Profitability Framework
Clarify the Problem
01
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How much have profits reduced?
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What is the timeframe we are looking at?
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In which geography is the product sold?
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Is the decline recent or ongoing?
Example of a case to demonsrate each step (e-commerce, fintech etc can be picked)
Analyze the Profit Structure
02
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Revenue: Change in Price? Change in volume of Sales?
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Costs: Changes in fixed costs? Changes in variable costs?
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Segment Analysis
03
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Geography: Region specific issues?
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Product Type: Specific products contributing to the decline?
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Distribution Channels: Issues with specific methods?
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Value Chain Analysis
04
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Production Issues Affecting volumes?
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Distribution Push Issues: Effective product push?
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Customer Pull Issues: Reduced demand?
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Business Situation Framework
05
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Volume Decline: Why decreased?
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Customers: Changes in preferences or market size?
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Competition: Impact on sales?
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Product: Issues with product?
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Company: Internal issues?
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