4 Columbia Business School Interviewer: The company operates 5-8 shifis and is running at fairly close to 100% utilization rate. However, they have considered shifting to multiple shifts in each plant and running a 22-hour workday. What do you think the overall demand capacity looks like in this particular industry? Interviewee: | would assume that it is either flat or declining because the US telecom market is relatively saturated, with little new customer growth, Interviewer: Yes, that’s correct. Interviewee: Ok, well, I would now like to inve where our client sits in the industry. Do we have any information about their market share? Interviewer ‘hey have a relatively high market share of 80%. Interviewee: Who are they supplying the products to? Consumers, business customers, or phone companies? Interviewer: They are a telecom infrastructure manufacturer so their direct clients are the phone companies. Interviewee: Does our client have any reeson to believe that the market share could change dramatically? What are the switching costs in this industry? Interviewer: There are very high switching costs in the industry. Also, our client recently acquired a competitor so they are not anticipating any big declines in market share. There are also only a few competitors in the industry with little threat of new entrants due to the flat or declining growth. Interviewee: Given the overall macro trends in this industry as well as their specific ‘manufacturing set-up, I believe that our client does have excess capacity? Interviewer: Why? Interviewee: Well, the industry is declining and there is less demand for these products over time. Also, opportunities exist to streamline their manufacturing operations with ‘more shifts per plant across less overall plants. Interviewer: Ok. What should they do? Interviewee: They could close some existing plants, or they could generate revenues from manufacturing products for competitors (or for companies with similar products). Management Consulting Association Case Book 2007 42