Cracking the Case : Cement Company Losing Profits 📉

I have always enjoyed doing case-studies because to me it’s basically like solving mysteries. There’s some phenomena observed and you have to keep investigating and collecting clues to find out the reason and give solutions. I remember solving a lot of these cases from ‘Case in Point’ and other B-school casebooks when I was prepping for interviews at ZS after undergrad. But when I really started enjoying solving these problems was during my time at Spekle wheere we had a lot of data but the skill was how to structure your thoughts and find potential solutions for clients. So, as I am going to start my MBA soon I thought of getting back into prepping for case interviews and publish the best cases I can find!

So — this evolving blog series is just me solving cases from popular resources I can find and linking my notes and takeaways.

Link to the case: https://www.youtube.com/watch?v=gTi8qAVGeCo (credits: Prepmatter)

Introduction :

We are discussing an Indonesian cement company whose profit margins are down from 8% to 2%. They want to generate $500 Mn in the next 5 years.

My Notes :

Takeaways :

• Setting up context and trying to get all the information about the company is important Eg. Does the business have international operations? Should we concentrate only on one geography?
• Always state the assumptions made during solving a case
• Variable Cost Ratio is Variable Cost/Revenue which should not be increasing for a healthy business
• Not always will there be a perfect solution for the case. It is perfectly okay to say that it seems that the factors affecting profits are not something we can control right now and our best bet is to downsize the business