Bain Business Case

Question

Hi,

This is a question from Bain sample case. I attach the question and relevant graphs below. It says the correct answer is D, however, to me option C makes a lot more sense. Would appreciate if someone can give me hints on why D is the correct answer. Thank you very much!

Answer 1

Hello Valeria,

I think that we still miss some information here, I also noticed that those 2 exhibits are for 2 different markets (1st Europe, 2nd Brazil). May you share the entire case so that I can help you?

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Update

Got them. I'm still not sure that you can apply insights from exhibit 5 on Brazilian market. The note "People tend to buy food products that take less time to be prepared, as soon as they can afford them" seems to suggest that evolution will be different in countries with lower gdp per capita, like Brazil. ALso, you don't have on wchibit 6 anything related to ready-to-eat cake that should be already on the market according to exhibit 5.

Anyway let's try to think about your specific question and try to answer this:
Why should F&P focus on cake mix? It seems to be already in the market leader cluster and the market is still quite small compared to flour or pasta (and it could continue to be that small for a while, with previous considerations).
Looking at the matrix there are two options for our client:

Invest in Pasta segment to become a market leader
Invest on flour to prevent the market from shrinking (of course assuming that your investments can somehow influence the general trend of the market. As example think of a research on flour to reduce cooking time)

I agree with you that question is not clear and that every answer could be questionable in this case, but these are in my opinion the better options.

Hope it helps,
Luca

Thanks,
Luca

Answer 2

Hello Valeria,

Agree with Luca.

Furthermore, could you share the source of this?

Cheers,

Clara

Answer 3

I agree with Luca. And I would probably also have checked option C in the case. I don't see any indication that with investing in R&D for Flour they could stop the decline of the market, so it seems more logical to see this as your cash cow, invest just enough to keep leadership, but at the same time establish a strong(er) position in the up and coming market.