麦肯锡案例分析题及答案.doc

1、Client Goal: Should Great Burger acquire Heavenly Donuts as part of its growth strategy?Our client is Great Burger (GB)a fast food chain that competes head to-head with McDonalds,Wendys, Burger King, KFC,etc.Description of Great BurgerGBis the fourth largest fast food chain worldwide, measured by th

2、e numberof stores in operation. Asmost of its competitors do, GB offers food and combos for the three largest meal occasions:breakfast, lunch, and dinner.Even though GB owns some of its stores, it operates under the franchising business model with 85percent of its stores owned by franchisees (indivi

3、duals own and manage stores, pay franchise fee toGB, but major business decisions (e.g., menu, look of store) controlled by GB).McKinsey studyAs part of its growth strategy GB has analyzed some potential acquisition targets including HeavenlyDonuts (HD), a growing doughnut producer with both a U.S.

4、and internationalstore presence.HD operates under the franchising business model too, though a little bit differently than GB. WhileGBfranchises restaurants, HD franchises areas or regions in which the franchisee is required to open acertain number of stores.GBsCEOhas hired McKinsey to advise him on

5、 whether they should acquire HD or not.QUESTION1WhatreaswouldyouwanttoexploretodeterminewhetherGBshouldacquireHD?ANSWER1Some possible areas are given below. Great job if you identified several of these and perhaps others.?StandalonevalueofHDoGrowthinmarketfordoughnutstogrowthinnumberofoHDspastandpro

6、jectedfuturesalesgrowth(breakdowniostores,andgrowthinsamestoresales)CompetitionarethereanyothermajornationalchainsthataredoingbetterthanoHDintermsofgrowth/profitWhatdoesthisimplyforfuturegrowth?.Profitability/profitmarginoCapitalrequiredtofundgrowth(capitalinvestmenttoopenewstores,working?capital)Sy

7、nergies/strategicfitoBrandqualitysimilar?Wouldtheyenhanceordetractfromeachotherifmarketedosidebyside?Howmuchoverlapofcustomerbase?(verylittleoverlapmightcauseconcernthatobrandsarenotcompatible,toomuchmightimplittleroomtoexpandsalesbycrossy-marketing)Synergies(Hint:donotdivedeeponthis,asitwillbecover

8、edlater)?Managementteam/culturalfitoCapabilities/skills of top, middle managementoCultural fit, if very different, what percent of key management would likely be ableto adjust?Ability to execute merger/combinecompaniesoGBexperience with mergers in past/experience in integrating companiesoFranchise s

9、tructure differences. Detail “ diveinto” franchising structures. Wouldthese different structures affect the deal? Can we manage two different franchising structures at thesame time?The team started thinking about potential synergies that could be achieved by acquiring HD. Here are some key facts on

10、GB and HD.Exhibit 1StoresGBHD?Total5,0001,020oNorth America3,5001000oEurope1,00020oAsia4000oOther1000?Annual growth in stores10%15%FinancialsGBHD?Total store sales$5,500m$700m?Parent company revenue$1,900m$200m?Key expenses (% sales)oCost of sales51%40%oRestaurant operatingcosts26%24%Restaurant prop

11、erty & equipment costs4.6%8.5%Corporate general & administrative costs8%15%?Profit as % of sales6.3%4.9%?Sales/stores$1.1m$0.7m?Industry average$0.9m$0.8mQUESTION2What potential synergies can you think of between GBand HD?ANSWER2We are looking for a few responses similar to the ones below:?ooLower c

12、ostsBiggest opportunitylikely in corporate selling, general, and administrative expenses(SG&A) by integrating corporate managementMay be some opportunityto lower food costs with larger purchasing volume onsimilar food items (e.g., beverages, deep frying oil), however overlaps may be low as ingredien

13、ts arevery differento?ooooGBappears to have an advantage in property and equipment costs which might beleveragable to HD (e.g., superior skills in lease negotiation)Increase revenuesSell doughnuts in GB stores, or some selected GB products in HD storesGBhas much greater international presence thus l

14、ikely has knowledge/skills toenable HD to expand outside of North AmericaGBmay have superior skills in identifying attractive locations for stores as its salesper store are higher than industry average, whereas HDs is lower than industry average; might beable to leverage this when opening new HD sto

15、res to increase HD average sales per storeExpand HD faster than it could do on own GB,as a larger company with lower debt,may have better accessto capitalQUESTION3The team thinks that with synergies,it should be possible to double HDsU.S. market share in the next 5 years, and that GBsaccessto capita

16、l will allow it to expand the number of HD stores by 2.5 times. What salesper store will HD require in 5 yearsin order for GBto achieve these goals?Use any data from Exhibit 1 you need, additionally, your interviewer would provide the following assumptions for you:?Doughnut consumption/capita in the

17、 U.S.is $10/year today, and is projected to grow to $20/year in 5 years.?For easeof calculation, assume U.S.population is 300m.ANSWER3You should always feel free to ask your interviewer additional questions to help you with your response.Possible responses might include the following:?Market share t

18、oday: $700M HD sales (from Exhibit 1) $3B U.S. market ($10 x 300M people)= 23% (round to 25% for simplicity sake)?U.S. market in 5 years = $20 x 300 = $6B?HD sales if double market share: 50% x $6B = $3B?Per store sales: $3B/2.5 (1000 stores) = $1.2MDoes this seem reasonable?Yes,given it implies les

19、s than double same store salesgrowth and per capita consumption predicted to double.isQUESTION4One of the synergies that the team thinks might have a big potential is the idea of increasing thebusinessesoverall profitabilityby selling doughnuts in GBstores. How would you assesstheprofitabilityimpact

20、 of this synergy?ANSWER4Be sure you can clearly explain how the assessment you are proposing would help to answer thequestion posed.Some possible answers include:?Calculate incremental revenues by selling doughnuts in GBstores (calculate how manydoughnuts per store, times price per doughnut, times n

21、umber of GBstores)?Calculate incremental costs by selling doughnuts in GBstores (costs of production,incremental number of employees, employee training, software changes, incremental marketing andadvertising, incremental cost of distributionif we cannot produce doughnuts in house, etc.)?Calculate in

22、cremental investments. Do we need more space in each store if we think we aregoing to attract new customers? Do we need to invest in store layout to have in-house doughnutproduction?If your answer were to take into account cannibalization, what would be the rate ofcannibalization with GBofferings? D

23、oughnut cannibalization will be higher with breakfast productsthan lunch and dinner products, etc.?One way to calculate this cannibalization is to look at historic cannibalization rates with newproduct/offeringlaunchings within GBstores?Might also cannibalize other HD stores if they are nearby GB st

24、ore couldestimate thisimpact by seeing historical change in HDssales when competitor doughnut store opens nearbyQUESTION6Yourun into the CEOof GBin the hall. He asks you to summarize McKinsey sperspective so far on whether GBshould acquire HD. Pretend the interviewer is the CEO whatwould you say?ANSWER6You may have a slightly different list. Whatever your approach, we love to seecandidates come at a problem in more than one way, but still address the issueas directly and practically as possible. Answers may vary, but here is an example of a response:?oEarly findings lead us to believe acqui