LET'S SOLVE A

CONSULTING CASE
Problem Statement
Your client is a global
spirits manufacturer.
Their profits from
India have dropped
this year. Analyze the
problem.
 Interview Thread
Interviewee: Sure. Is this problem being faced by
other companies in the industry as well?

Interviewer: No, it is a client-specific problem.

Interviewee: Is this problem faced by any other

geography or just in India?

Interviewer: Only in India.

Interviewee: Do we have any more information on

the company? The major products offered, the
product mix, the target customers (individual
consumers or industrial companies), where all it
operates in the value chain, and if the profits have
dropped in any single segment/product.
Interviewer: The client is a leading manufacturer of
gin for human consumption. 75% of its portfolio is
standard gin, 10% is flavoured gin, and 15% is
premix cocktails. It is present throughout the value
chain, right from manufacturing the gin to
distributing it. The profits have dropped in the premix
cocktail category.

Interviewee: Sure. Do we have any data about how

much the profits have dropped this year?

Interviewer: It is about 10%.

Interviewee: Okay, thank you for the information. To

analyze the problem, we can break down the client’s
profits into revenue and costs. Do we have any
information on where the problem is?

Interviewer: It is present in both. Let’s look at the

revenues first.
Interviewee: All right. So, the revenue of the client
will equal the number of premix bottles sold *
Average price per bottle. Another way could be
the Number of customers * Number of orders per
customer * Average value per order.

Interviewer: This works. The issue is with the

number of orders. Let’s move on to the costs.

Interviewee: To analyze the costs, I’d like to look

closely at the various components of its value
chain. The value chain would include research &
development, raw material procurement,
manufacturing, warehousing & storage of the final
product, distribution, marketing, and after-sales
services. Do we know where the problem lies?

Interviewer: Yes, it is in the manufacturing

process.
Interviewee: The manufacturing process involves the
conversion of raw materials into the desired cocktail
mix, packaging the mix into bottles and any other
further packages, and labelling the packages. Have
any of these been affected?

Interviewer: The problem is in the packaging.

Interviewee: A product’s packaging can be divided

into primary, secondary, and tertiary packaging. Do
we have information on the same for this product?

Interviewer: The primary packaging is bottles, and

the problem is in the tertiary packaging.

Interviewee: In the case of pre-mix cocktails, the

tertiary packaging would include the cartons/boxes
used to package the bottles for further
transportation.
Interviewee: The following could be the problems
with the tertiary packaging – breakages, wrongful
identification, and inappropriate design for
handling. Is there any special packaging
requirement for the product?

Interviewer: Yes, the product is to be kept at an

optimal temperature.

Interviewee: Okay, so then a lack of temperature-

controlled packaging could be leading to spoilage
of the product in transit and hence increasing
wastage and, in turn, the costs of the client. Is this
a correct hypothesis?

Interviewer: Yes, you are right. Could you give

some recommendations?
Interviewee: In the short term, the client can
buy/rent temperature control boxes. They can also
think of transporting the bottles in bulk using
temperature-control trucks. They can also tie up
with other agriculture or manufacturing companies
to collaboratively use temperature-controlled
resources. In the long run, they can invest in
researching different preservatives that make the
product more resilient to temperature changes.

Interviewer: Okay, that seems fair. We can wrap up

the case.

Interviewee: Thank you.

That's a wrap!
 Framework

Raw
R&D Materials Manufacturing

Storage

After-sales
Service Marketing Distribution
Framework
Manufacturing

Turning raw material

into cocktail mix

Labelling

Packaging

Primary

Secondary

Tertiary
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