Background

A major salted snack food company has experienced a decline in market share over the past two years, dropping from 20% to the current level of 18%. However, despite this decrease in market share, profits as a percentage of sales have been steadily growing. Your task is to identify the factors that may be causing this trend.

Key Considerations:

Market Dynamics: Understand the changes in the total salted snack food market size over the past two years and how the client's dollar sales align with this trend.

Cost Structure: Analyze the alterations in the cost structure of the company, specifically focusing on raw ingredients, conversion costs, distribution, marketing, and sales force expenses.

Competitive Landscape: Assess the competition, considering the presence of two multinational consumer product companies dominating the market with a combined 55% share, and how the client's strategies compare.

Also read, the management consulting case study on the Oil Refining Machinery Division

Final Analysis

To comprehend the market share decline and the increase in profits:

Market Dynamics:

  • Evaluate how the growth in the total market has impacted the company's dollar sales and market share.
  • Determine if the company's product line aligns with the market trends and demands.
  • Explore the missed opportunities for growth despite a growing market.

Cost Structure:

  • Analyze the changes in cost percentages to understand how operational costs have evolved.
  • Assess the impact of reductions in the sales force and marketing budget on market share.
  • Investigate the effects of reduced trade promotions on shelf space and market share.

To solve the management consulting case studies, visit theconsulting.io 

Competitive Landscape:

  • Compare the company's strategies and cost structures with those of the major competitors.
  • Analyze the effectiveness of the cost-cutting measures and their sustainability in the long run.
  • Suggest strategies to improve market share, considering both cost efficiencies and promotional activities.

For more insights, enroll in our self-paced courses for the better insights.