Cheers
Practice this intermediate profitability case interview question in the Consumer Goods sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
This case teaches profitability analysis combined with cost-benefit optimization. The key insight is recognizing that ALSH's profit decline stems not from revenue issues but from hidden costs (fake wine refunds), and that investing in screening is cost-justified both financially and strategically for reputation recovery.
Clarifying Information
- Does ALSH have a physical presence?: Yes, it has a few stores in major cities in the US, but the bulk of its sales occur online
- Is there a profitability target?: No – aim to increase as much as possible
- Timeframe?: As fast as possible
- Where does ALSH sell to?: Internationally – mainly to private collectors and enthusiasts
- Annual expenses incurred by ALSH total $34,500,000
- Wine sizes, number sold, price, and cost: Magnum (1,000,000 sold at $45 price, $30 cost), Liter (2,000,000 sold at $35 price, $25 cost), Standard (4,000,000 sold at $30 price, $25 cost)
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