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GEP CASE COMPETITION 2015 GEP Case Study: Confection Infection

Stan Radzinski was ready with his views about the problems with U.S. brand Brandburys top confectionery product, Cooky Monster.

As he went through his notes just before the board meeting, Stan couldnt help but observe how crucial this discussion would be for

the future of the Cooky Monster brand as they tried to arrest a problem of profitability in the U.S., their current market. As Senior Vice

President of Sales, Stan would be asked about his opinion of the problems he has faced in the last year. Although procurement strategy

was the main agenda, there would be inputs from other departments as well, mostly to figure out how to increase profitability. Stan

just hoped a consensus could be reached. He began by coming right to the point about the issues at hand.

Stan: As you all are aware, we have to address the issue of stagnating sales for Cooky Monster. Out of our 4 business units,

confectionery contributes 40% to annual revenue far greater than beverages, dairy and biscuits and Cooky Monster contributes

50% of the confectionery revenue. Needless to say, we need to fortify our top brand that contributes the most to our $20Bn company.

And how to keep the brand profitable is the biggest concern we have. The U.S. market has matured, leading us to explore other more

profitable markets. We want to expend energy looking for new territories, since capturing more of the U.S. market is now a lost cause.

Andrew (Chief Procurement Officer): We should also factor in the problems facing supply of ingredients for Cooky Monster. Costs for

peanuts, sugar and cocoa have gone up steadily over the years. We have been sourcing cocoa from West Africa, while the sugar comes

from Brazil and the peanuts are sourced from Argentina. We should be exploring other options that reduce our costs

Gerry (Senior VP, Quality) interrupts: While maintaining quality standards of course, Andrew! We would not want our number one

brand, with a high level of brand recall to disappoint customers just to cut costs.

Stan: Good point, Gerry. I think Tom had a few pointers on the direction we should be looking at, given all the concerns we have just

discussed.

Tom (Chief Financial Officer): Guys, I understand all of your concerns. That is why we decided to tie all of these problems together

and figure out our next strategy. On one hand, the U.S. has been the only market for us and I would not want to lose sales here. Having

said that, we should expand to newer geographies, like Stan suggested.

For this, we had engaged a market research firm last month, who advised that we should expand our business to South America or

APAC, both of which have sustainable demand and tremendous growth potential. High-level indicators from their study are available

for use with us, to analyze expansion scope for countries in these geographies.

We now have to evaluate if, to cater to the new markets, expanding our only plant in Ohio is feasible in terms of return on investment.

If not, other options have to be thought about to cater to the new markets. Also, we have rising costs and perhaps we need to explore

newer territories to source our three major ingredients. And as Gerry pointed out, we cannot compromise on the quality of the

ingredients.

Stan: Thanks, Tom. I think to seriously evaluate our options, we need assistance from experts with proven credentials. We have

consultants from GEP standing by, who could give us a fresh outside perspective in terms of what our strategy should be. I urge you

all to cooperate with them completely. The sooner we figure out the long-term strategy, the better. Frankly, our Ohio plant is already

utilized to the maximum, so we need to figure out how to cater to our plans of entering new geographies. We need to hit the ground

running with this.

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GENERAL INSTRUCTIONS As a consultant from GEP, review the scenario and evaluate the possible solutions addressing Brandburys concerns.

Round 1: Teams of 1 or 2 members can participate.

1. Format of Submission:

a. Prepare a presentation of NOT more than 5 slides. Include an extra slide stating your institute name, team name and

team members.

b. The submission should be made as a .PDF file ONLY

c. Name your file as GEP Case__.pdf

2. Content of Submission:

a. Current Scenario: Succinctly capture all the relevant details of the case, with a special emphasis on points that will drive the case solution

b. Problem Statement: Clearly identify the key problems in the current scenario and their possible causes

c. Information Required: Clearly identify the information that you will need to solve this case over and above, what is stated in Round 1.

d. Strategies: Based on the information provided in Round 1 and reasonable assumptions, list down and explain all the possible strategies to resolve the current situation.

3. Date of Submission:

Presentations are to be submitted to your placement committees latest by August 10, 2015.

Round 2: Based on the presentations submitted at the end of Round 1, a few teams will be shortlisted for Round 2. In Round 2, teams

will be provided with additional information on the case. Teams will then submit their Round 2 recommendations based on the

information provided and secondary research.

Final Round: Based on Round 2 responses, 5 to 10 teams will be shortlisted for a final presentation at the GEP office in Mumbai,

wherein they will be invited to present their recommendations to the evaluation committee at GEP.

The winning team will receive cash prize worth Rs. 1,00,000 plus PPIs*

*Internship interview for first year students, Pre-Placement Interviews for final year students as per institute placement committees

approval