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Medium Growth strategy

Queen Bae

#CPG
ProHub Comment

This is a classic profitability case requiring candidates to diagnose root causes through financial analysis and data interpretation. The case progresses logically from identifying the profit decline, to discovering supply constraints, to developing a specific procurement optimization solution. Strong candidates must recognize the disconnect between growing market demand and declining revenue, then trace this to supply-side constraints in a specific geographic region.

Estimated Time 15 minutes
Difficulty Medium
Source Duke
50 / 100
Your client is Royal Honey, a manufacturer of premium organic honey that purchases its raw honey from a single farm in the Midwest. Despite record-high demand for high-quality organic honey nationwide, Royal Honey has experienced a gradual decline in profitability in recent years. Its CEO has come to you to determine why the company’s financial state has rapidly deteriorated over the past four years and to develop a turnaround strategy for the company.

Clarifying Information

  1. Overall Goal - Company wants to return to FY16 profitability in two years
  2. Competition/Market - Declining revenue and profitability for all major competitors, but not to the same extent as Royal Honey.
  3. Product - Royal Honey sells only one product: organic golden honey
  4. Value Chain/Revenue Information - Royal Honey purchases raw honey from suppliers and manufactures organic golden honey.
  5. It sells to domestic high-end grocery stores (e.g., Whole Foods) nationwide