Firm:A.T.KearneyCaseNumber:Casesetup(factsofferedbyinterviewer):YourclientisaU.S.basedmanufacturerofbrandedcookies(cookiesthatcarrythenameofthemanufacturer)Recentlyprivatelabelcookies(thosecarryingthenameoftheretailer)haveemergedandthreatenedbrandedcookiesPrivatelabelcookiesemergedfiveyearsagoTwoandone-halfyearsagotheymadeup10%oftheoverallcookiemarket(brandbeingtheother90%)Todaytheymakeupapproximately20%oftheoverallcookiemarket(i.e.,therehasbeenasteady,linearincreaseofprivatelabelportionoftheoverallcookiemarketduringthepastfiveyears)TheoverallcookiemarkethasbeenrelativelyflatoverthepastfiveyearsPrivatelabelcookiesaremadebythesamemanufacturerswhomakebrandedcookies,theyarejustsoldunderthenameoftheretailerThereareessentiallythreemajorcompetitorstoconsider:Yourclient,whomakesonlybrandedcookiesAsecondmajorplayer,thatmakesbothbrandedcookiesandsuppliescookiesforprivatelabelersAcollectionofsmalloutfits,thatmakebothbrandedcookiesandsupplyprivatelabelersDistributionoccursprimarilythroughoneoftwotypesofoutlets:Groceryoutlets:allgrocerssellbrandedcookies,mostalsocarrytheirownprivatelabelcookies.Thisrepresentsapproximately90%oftotalcookiesalesMassmerchandisers(ex.Walmart,Sam’s,etc.):sellonlybrandedcookiesQuestion:HowlargewouldyouestimatetheoverallU.S.cookiemarkettobeintermsof$?Howlargeofathreatdoyoubelievethetrendinprivatelabelcookiesalestobetoyourclient?Basedonyourassessment,whatisanappropriatestrategyforyourclienttofollow?Suggestedsolutions:Thefirstquestion,estimatingthesizeoftheU.S.cookiemarket,hasnorightorwronganswer.Itisatestofacandidate’sabilitytomakereasonableassumptionsandworkquicklywithnumbersonan“orderofmagnitude”level.OneacceptableresponsewouldbetoestimatethenumberofU.S.households,estimatehouseholdconsumptionoversomeperiodoftime,estimatetheaveragecostofabagofcookies,andprojectoutforoneyear.Inthiscase,afteranestimatehasbeenmade,thecandidatewouldbetoldtoassumethemarketsizeis$1Billiontosimplifyanyfuturecalculations.Asstatedintheupfrontinformation,themarketisassumedtohavebeenflatforthepastfiveyears.Thesecondquestionismoreinvolved.Itinvolvesdeterminingtowhatextentyourclientisthreatenedbytheincreasingpercentoftheoverallcookiemarketrepresentedbyprivatelabelsales.Tobetteranswerthisquestioninformationshouldbegatheredpertainingtowhatisdrivingthedemandforprivatelabelcookies,towhatextentthishasalreadyaffectedyourclient’ssales,andwhatthelikelihoodisforthetrendtocontinue.Thefollowingarequestionsandanswersthatwouldbeprovidedinaninterviewscenario.Whatarethesalestrendsfortheclientoverthepastfiveyears?Yourclient’ssaleshavebeenflatat$600Mforthetimeframeoffivetotwoandone-halfyearsago.Overthepasttwoandone-halfyears,saleshavedecreasedsteadilydowntoapresentlevelof$560MM.Howhasmarketshareoftheprivatelabelsegmentbeensplitoverthepastfiveyearsbetweenyourclient’smaincompetitorandtheothersmallerplayers?Thesmallerplayerscombinedhad100%oftheprivatelabelsubsegmentfiveyearsago.Twoandone-halfyearsagoyourclient’smaincompetitorbegansupplyingprivatelabelers.Today,thismaincompetitorowns40%oftheprivatelabelsubsegment,thesmallerplayersowntheremaining60%Howhasmarketshareofthebrandedsegmentbeensplitoverthepastfiveyears?Yourclientheld60%ofthissegmentfiveyearsago,67%twoandone-halfyearsagoand70%today.Itsmaincompetitorheld30%fiveyearsago,25%twoandone-halfyearsagoand23%t...