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Medium Market Entry Profitability Supply Chain Strategy

Fastcar

#Manufacturing
ProHub Comment

This case tests market sizing, financial modeling, and strategic decision-making between two supply chain alternatives. Candidates must estimate the Pakistan luxury car market, project revenues based on market penetration, build a comparative cost analysis between European shipment and local production, and synthesize findings into a clear recommendation. The case rewards structured thinking and quantitative rigor.

Estimated Time 27 minutes
Difficulty Medium
Source IESE
10 / 100
Fastcar is a big multinational automotive company in the luxury segment. It has the headquarter in Germany in production plants in Europe, North America and Latin America. Fastcar is considering to expand its sales network and to enter in Pakistan. The company is also asking what is the best supply chain strategy: shipping cars from Europe or opening a production plant in Pakistan. The CEO of Fastcar has hired you to assess this opportunity and which supply chain strategy should pursue.

Clarifying Information

  1. Fastcar has only one brand of cars, in the luxury segment. Its main competitors are Mercedes, Audi and BMW.
  2. There are no financial constrains, but all the investments should have a maximum payback period of 5 years.
  3. 5 years ago, Fastcar tried to enter in Asia, in the Chinese market, but it decided to quit after 2 unsuccessful years, due to local regulations. Legislative environment will not represent an issue this time.
  4. After-sales and maintenance market are outside the scope of this case
Mock Interview
Interviewer

Fastcar is a big multinational automotive company in the luxury segment. It has the headquarter in Germany in production plants in Europe, North America and Latin America. Fastcar is considering to expand its sales network and to enter in Pakistan. The company is also asking what is the best supply chain strategy: shipping cars from Europe or opening a production plant in Pakistan. The CEO of Fastcar has hired you to assess this opportunity and which supply chain strategy should pursue.

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
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Practice this case with AI Mock Interview

Fastcar, a luxury automotive company, seeks to enter the Pakistan market and must choose between shipping cars from Europe or building a local production plant. Through market sizing analysis, the case reveals a 440,000 car annual market opportunity, with 50% penetration achievable in 3 years generating €16.5B revenue. Cost analysis shows that local production saves €26.7B over 5 years compared to European imports, making local production the recommended strategy despite higher upfront investment and execution risks.

Key Insights:

  1. Market sizing requires clear assumptions about population, household wealth distribution, and vehicle lifecycle to estimate addressable market
  2. Revenue forecasting combines market penetration rates with pricing strategy (competitor-based pricing used at €75k per vehicle)
  3. Cost comparison must account for production costs, transportation, customs duties, and investment across both scenarios to quantify the economic advantage
  4. Strategic recommendation balances financial metrics with qualitative factors like brand reputation and supply chain resilience
  5. Risk identification around factory construction timelines, talent acquisition, and supply chain setup is critical for implementation success