Q1. What factors would you consider to drive the profitability up?
Fragrance & makeup market
- Growth rate
- Major brands and their market shares
- Typical profitability
European beauty company
- Customers segments (e.g. B2B – entertainment industry, hair salons, etc.; high-end/low-end?)
- Key product lines
- Distribution channels (e.g. own branded stores, department/drug stores, etc.)
Profitability
- Revenue analysis
- Current level and growth rate
- Break-down by product line and channel
- Cost structure (high VC business?)
Make sure that the candidate covers the following key points typical for a profitability case structure: analysis of external factors (e.g. market’s growth rate and competition), understanding of the client’s business model (e.g. customer segments and product offerings), and financial analysis (e.g. revenue and cost structure).