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Hard Environmental Sustainability Cost Reduction Operations

Cowbon Emissions

#Agriculture #Energy
ProHub Comment

This is a complex sustainability case requiring the candidate to prioritize emission reduction opportunities across multiple business segments (farming, processing, transportation). The case tests market sizing skills (estimating cow herd size), financial analysis (cost-benefit calculations over 5 years), and strategic decision-making to meet a 45% reduction target within budget constraints.

Estimated Time 36 minutes
Difficulty Hard
Source IESE
20 / 100

Our client is a major milk producer in New Cowland, Milking it Co., MIC. New Cowland has recently introduced a law that means MIC has to reduce its GHG emissions by 45% of 2019 levels within the next five years or face being shut down or heavily fined. They currently produce 20% of New Cowland’s GHG emissions.

The CSO has hired us to figure out a way to reach this target.

Clarifying Information

  1. MIC produces approximately 100% of New Cowland’s milk supply
  2. MIC does not have plans for expansion, but reducing volumes is not an option
  3. They only produce milk and have no plans to diversify
  4. Budget for this project is $750m/year for the next five years (for perspective, current revenues are $15billion)
  5. MIC owns the entire production chain – from farms, production and transport, they sell to a variety of clients
  6. 5% of their market is local, the rest is foreign
  7. Only need to reduce GHG directly produced by MIC
Mock Interview
Interviewer

Our client is a major milk producer in New Cowland, Milking it Co., MIC. New Cowland has recently introduced a law that means MIC has to reduce its GHG emissions by 45% of 2019 levels within the next five years or face being shut down or heavily fined. They currently produce 20% of New Cowland's GHG emissions. The CSO has hired us to figure out a way to reach this target.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

MIC, a major dairy producer producing 20% of New Cowland’s GHG emissions, must reduce emissions by 45% within 5 years or face shutdown/fines. The candidate must develop a strategy using a $750m/year budget. Key initiatives include replacing the herd with a lower-emission breed (21% reduction), converting to renewable energy (14% potential), and electrifying transport (5% reduction), totaling 40% reduction in year 5, leaving a gap requiring additional solutions.

Key Insights:

  1. Prioritization by impact: Identify that cows account for 63% of farming emissions (the largest single source), making herd replacement the logical first intervention
  2. Phased implementation approach: Recognize the 5-year lifespan constraint requires gradual replacement of 1 million cows annually rather than immediate replacement
  3. Cost-benefit trade-offs: Distinguish between cost-effective solutions (renewable energy, transport electrification) and inefficient investments (sterilizing process takes 20 years for only 4% reduction)
  4. Budget allocation: Demonstrate ability to track spending ($2.5B + $1B = $3.5B used of $3.75B available) and identify remaining gap requiring creative solutions