Zulu-Lemon
Practice this intermediate cost reduction 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 tests quantitative analysis and industry knowledge by requiring candidates to identify cost-saving opportunities across the value chain, then focus on material composition optimization. The case demonstrates practical application of cost engineering, where changing fabric mix from expensive Material 2 (from China at $240/kg) to cheaper Material 4 (from Peru at $110/kg) generates substantial savings while balancing supply chain risks.
Estimated Time
26 minutes
Difficulty
Medium
Source
ROSS
10
/ 100
Our client is a major US fitness apparel manufacturer that has recently lost market share due to rising costs. Due to lower margin and company earnings, activist investors have threatened to place the company for sale. The CEO feels that the true potential will be lost if the company is sold to a large retail house and has hired you to help figure out its strategy. First, we want to make sure we’ve identified all potential cost saving levers.
Clarifying Information
- Region: US only
- Value Chain: End to End; Manufacturing, Distribution, Retail
- Segment: Fitness; Yoga
- Customer: High end; currently retailing leggings at $80
- Products: Workout gear
- Competition: Pioneer in the industry, recently 2 new companies have been gaining market share
- Volume: 5 million (per year)