Case Type: reduce costs; improve profitability.
Consulting Firm: A.T. Kearney first round job interview.
Industry Coverage: Food & Beverages; Consumer Products.
Case Interview Question #00385: The client Wrigley Company (NYSE: WWY, acquired by confectionery and food manufacturer Mars Incorporated in April 2008) is a chewing gum manufacturer headquartered in Chicago, Illinois, United States. The company currently sells its chewing gum products in more 
than 180 countries and maintains 14 factories in various locations.
Recently, equity research analysts are giving our client Wrigley’s stock poor ratings. In fact, the stock was just downgraded from “Hold” to “Sell” by research analysts at a major investment bank. You have been brought in by the upper management team at Wrigley Company to figure out what’s going on and to propose appropriate course of action to rectify the situation. How would you approach this case?
Additional Information: (to be provided to you after relevant questions)
- Our client makes all varieties of chewing gum – sugar, sugar-free, whitening, etc.
- Revenues have remained constant, though profit has decreased.
Suggested Approach:
By far one of the most common types of case interview questions you will receive is one requiring you to analyze changes in company’s profitability. Once you have done a few of these, you will recognize that they can all be approached in a fairly similar fashion.
A simple approach can be applied to most profitability questions. The simple structure is:
- Identify as a profitability issue
- Analyze revenue issues
- Analyze cost issues
- Identify cause of profitability decline
- Outline options to address cause of decline
- Select a preferred option
- Explore other ways that profitability might be improved generally (if any)
Possible Solution:
