Myntra Interview Question | Case Study
Question
Profit of a company selling mobile back cover is declining. List out
all the possible reasons
solved
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Case Study
4 years
3 Answers
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Answers ( 3 )
Quality Issue
Price War with Competitors
Mobile Companies tie up with third party selling covers
-Profit can dip because of 2 reasons – increasing costs and decreasing revenues.
-Costs involve fixed and variable costs. Fixed costs can be lease and rental payments,
insurance and interest payments. Variable costs vary on the amount of output. Variable cost
include labor and the cost of raw materials. An increase in these costs can cause the profit
to dip.
– Supply chain costs might have increased.
-Revenue can decrease due to several reasons, prime reason being decrease in sales.
– Sales can decrease due to the entry of new competitor who is eating into our market share.
– The company is not innovating enough to cater to the changing demands of the customer.
– The customers are not happy with the quality of the product, which traces back again to the
processes followed during production.
– The stores to which the covers are distributed are not in catchment areas.
The decrease in profit of the company. We can go through the structure for better understanding .
1.Revenue: There might be two factors which we need to look at it.
Is there any Increase in prices? , If yes this might be the reason for decrease in Revenue.
There might be a decrease in the Number of Units sold due to the i). Distribution Problem ii).Production Problem
2.Costs: Increase in costs is the problem for decrease in Revenue, We need to look at Direct costs and Indirect costs
Direct costs are mostly the same, The Major problem lies with indirect costs i.e Variable costs , Below are the possibilities for Increase in cost :
. Increase in Raw material cost may be a problem
.Increase in Packing cost
.Cost incurred due to Transportation and distribution
Generally, This type of Questions will be a Discussion between an Interviewer and interviewee , By following the above structure and getting clarification at each stage of structure, we can come to a conclusion for the Case Study.