Case 1: Our client is a major commercial bank in Mexico. Despite the fact that the bank has experienced increased revenue growth, for the past two years its profits have declined and even become negative. You have a meeting with the CEO of the bank in a week and you have to come up with answers to two questions: What is the main cause of this decline in profits, and what can we do to restore the bank's profitability?

Other objectives?Assuming answer is noBanks goals and strategy. Customer segment/ base. Market conditions credit rates low?Long term vs short term loans; increase in CRR or REPO? NPAs? What does a bank make its money from? Investments; Loan interests; Deposit reinvestmentCompetition, what is happening to the competitive landscape?No, since revenue is on the rise then why the decline in profits? Costs too high?Why? Level of automation. What about internet banking? Are they an internet savvy bank?What about ATMs? do they have enough ATMs? have salaries gone up?How has revenue increased? What are their revenue channels? Which one is contributing to the increased revenue? Are there any declining channels?How r revenues increasing? Is it because of an increase in volume of customers? Or is because of a few well endowed customers? High volume of low transaction customers will increase labour charges.Is the bank being credit heavy? Do they have too many debts? Are they borrowing from someone? Have they borrowed with heavy interest? Are the taxes too high there?Are there any expansions happening?

Case 2: Our client is a manufacturer that makes industrial cleaning solvents and pesticides. Recently, sales have been declining, mostly because of new EPA guidelines. The company has been "dumping" its old products overseas into countries that have less stringent environmental laws, as well as re-engineering its products to fit the new EPA guidelines. Further evaluation of sales, both past and future, indicates that the chemical industry has grown and will continue growing slowly over the next five to seven years, with 3 percent annual growth. Management has decided to diversify. While Yellow Stuff wants to keep its chemical business intact, it also wants to enter an industry that has long-term, high-growth potential. Yellow Stuff has hired us to help determine which industry or industries it should enter. Don't come up with a list of industries; instead tell me what things you should be researching to determine which industry our client should diversify into.

Why diversify? To gain growth? What is the capacity of the client to acquire another firm? If not acquisition, are we looking at a JV? What are we bringing to the table? If its chemical expertise, then maybe we look at vertical integration which company needs our chemical expertise? Or if not vertically upwards, then downwards? Location diversification? Timeline? Funding? Entry and exit costs. Future growth.Long term high growth potential? >10% 15%? What is high, 3% is slow, so maybe around 15 or 10% growth and a long term means the new industry cannot be dissociated completely from chemical industry which industry is growing at around 20% for the last 5 years or maybe 3 years? which industry is valued high in the market? Whos gonna grow? Petroleum? Pharma? Whos close to chemical industry? Who needs investments right now? Can we get into home products perhaps cleaning agents etc.?

Case 4: Coca-Cola is trying to boost profitability domestically by raising its prices. It's focusing on the grocery store market, where the volume is high but the margin is low. What are the economics of raising prices, and is this a good idea?Keep market share

What is the volume? How much market share does coke have? How does grocery store compare to its other sources of revenue? What is the margin? What is the market size?Say market size is x and coke percentage sales thru grocery is y, then volume is xy. If price is increased by a%, then new price is b+ab. For b+ab, whats the margin they make?

Every 5 yrsChemical 20 yrsGovt 1000$/mileCost of producing and applying the chemical 50$/mileEstimate the miles of state and fed highwaysPricingOther issuesTake a 40 yr periodTotal expense for replacing roads for 40 yrs 8 time 1000$ - 8000 $/mile=8000*300000 = 240,00,00,000Total expense for replacing roads for 40yrs with chemical 2 times 1000$ + 50$*2 = 2100$/mile = 2100*300000 = 63,00,00,000Adding a profit margin of 50% = 94,50,00,000 = 3150/mile for 2 times = 1575$ per mile 1000$ = 575$Kerala is around 1/100 th of India and has end to end highway distance of 1000 kms + state highways of perhaps 2 times that distance. So, 3000 kms of road in Kerala. And 100 times that in India, i.e. 300000kms of roads(hw+shw) in India.

Total population of India 1.3 billionAge groups0-310 - - 64-10511-161016-3045%31-4515%46-651066-755 - - 2

8% of 1.3 billion will need and have the means to buy diapers = .08*13 = 104 million diaper usersApprox.. 4 per day => 104*4*365 = 151.84 billion diapers total, if we were to look at a 30% market share => .3*41.6 = 12.4 million diapers*365 = 45.26 billion151.84 billion * 10 Rs/diaper = 1520 billion rupees50 billion * 10 Rs/diaper = 500 billion rupees. Profit = 5%= 25 billion Rs.Now, what will be cost of manufacturing a diaper?Say normal diapers are priced at 15 per diaper =>