Medium
Profitability
Flickering Fortune
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.
ProHub Comment
This case reveals a classic tension between volume-driven sales incentives and profit optimization. The key insight is that despite improving unit economics (costs falling 37.5% to 10% annually), Vivid is leaving money on the table through excessive discounting driven by sales quotas, while customers demonstrate high willingness-to-pay due to product quality and switching costs.
Estimated Time
26 minutes
Difficulty
Medium
Source
Wharton
10
/ 100
Your firm has been engaged by Vivid, a consumer electronics screen manufacturer, for a pricing optimization project. Vivid’s main product is HDTV (high-definition TV) screens. Its main customers are well-known TV manufacturers in Asia and the US, who buy other components, build the finished TVs and sell them to retailers who use global distribution channels to reach end-users.
Clarifying Information
- Objective: Client is looking at pricing in search of opportunities to grow revenue
- Patents: Vivid technology is patent-protected, and for manufacturers to switch suppliers would require costly plant reconfiguration
- Revenue trends: While sales volumes have been increasing, revenue has remained flat
- Competitive landscape: No insights available