1、Bain & Company:Case InterviewIntroductionTake notesAsk questionsStructure your analysisDrive towards a recommendationCase Question: Entertain MeMusic retailer: cassettes, CDs, and videosBusiness Activities Mail orderrecords and tapesWent publicExpanded retail stores to 400 mall-based storesRecent fo

2、cus on InternetMail order channel was allowed to dieIssue: Declining revenue and marginsStructure your approachWrong: Always use the same framework regardless of the business issueBetter:Clarify the primary business issuesEvaluate optionsExplore broader issues to determine if channel segmentation is

3、 appropriate during analysisSame product competing in overall marketChannels may have cost advantagesFrameworkCost of Goods Sold (COGS)Multi-channel approach in order to increase volume and decrease unit costsSales, General & Administrative (SG&A)Retail: sales peopleMail Order: call centersInternet:

4、 promotions, ads, program developmentThese channels may share general overhead, but it is important to explore points of differentiation:ActivitiesCustomersCompetitorsCompetitors & CustomersOnline competition is highly fragmented Mail Order: historically have focused on this channel; now moving onli

5、neRetail stores: off-line consolidation; moving onlineInternet: Many Internet-only retailersCustomer demographics for various channels differChannelsRetail: Adequate, consistent with industry standardsMail Order: May have been a cash cow even if market growth was declining Internet: Drive profitable

6、 growthExplore each channels revenue and margins individuallyStrategic IssuesLevel of differentiationReputationMall stores: easy returns, advice from entertainment associatesMetricsRevenue+10% in 1997+2% in 1998- 10% in 1999compared to 50+% market growthCost PerformanceStructure: How does this overa

7、ll cost structure compare to the cost structure within each channel?60% COGS10% distributionSG&A up 5% over last 2 yearsRevenue AnalysisDecline in pricesLack of differentiationEasy product returns to mall storesCross promotions to create loyalty effectRecommendation enginesDecline in volumeCustomer

8、demographics for various channelsKey volume driversVisitors to the sitePurchase frequencyAverage purchase volumeRepeat purchasesCompare to mail order channel and online competitorsRecommendationEncourage existing mail order customer base to move onlineDirect mail to build awareness of the siteCommun

9、icate with customers to mitigate online security concernsCross channel promotionsVirtual coupons in direct mailerLong-term coupon plan to build repeat purchasesFriends & family programsIntegrate offline assetsEasy returns at over 400 stores nationwideProfessional advice from entertainment associatesLeverage assets across multiple channelsRecommendationTarget