Framework for brainstorming ideas for cutting department costs (IT and Marketing)

Question

Dear community,

I have a question regarding how to appropriately structure the following prompt: Now that we have identified a potential for cost reductions in the Marketing and IT functions, what are some ways this can be accomplished?
The overall case is an M&A case in the airline industry and it has been identified that those are the 2 functions in which no cost synergies were achieved yet and now it's time to come up with ideas on how to do it.
I am not struggling with finding ideas such as, for example, reducing headcount, merge systems ect. but I am struggling with finding a way on how to neatly structure such a question. How would you approach it? Variable vs fixed costs in each department? people/processes/technology? I can't seem to find a proper way so I am very grateful for any ideas. Thank you very much!

Best, Emma

Answer 1

Hi Emma,

Wherever possible try to avoid fixed and variable costs - interviewers want to shoot themselves when they hear this!

Option 1:

People

IT/Tech/Systems

NOT Process (doesn't apply here…it's linked with systems)

==========================================

Option 2:

Front/customer facing

Back-end/support

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Option 3:

Do less

Be more efficient

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Option 4

(Marketing) Campaigns

(Marketing) Steady-State

(IT) Legacy systems

(IT) New systems

(IT) Support staff

==========================================

Option 5

Customer Acquisition

Booking

Flight/transit/service offered

Post-flight support

Answer 2

Hi Emma,

Why not you share your thoughts on several approaches you have tried now, with commentary on why you think they are ‘not proper’.

That i think will be a much more insightful way of not just getting feedback on an approach but also a way for coaches here to give feedback on your thought process/logic, which is IMO more important.

Answer 3

Hi Emma,

I would be happy to share my thoughts on your question:

First of all, it would be great to at best first hear the proposal from you, to provide feedback on.
Moreover, while commonly used among candidates, structuring cost reduction levers along variable and fixed costs is in many cases not a meaningful way. Instead, I would advise you to focus on potential synergies in an M&A context, categorizing the opportunities into areas such as process optimization, technology harmonization, and organizational restructuring.
Lastly, consider aligning the proposed cost reduction measures with the airline industry's specific context and the M&A's goals. What are the strategic objectives behind the merger, and how can the cost reduction in these two functions support those goals? This would make your proposal even more compelling and aligned with the overall business strategy.

If you would like a more detailed discussion on how to best prepare for your upcoming interviews, please don't hesitate to contact me directly.

Best,

Hagen

Answer 4

Hi Emma!

Your thinking is going in the right direction, but it's a lot better if you could provide 1-2 suggested ways of structuring it that we could give feedback on.

Also, sharing with you here a guide you could use on structuring methodologies:

Free Guide: Mastering Structuring & Brainstorming

Best,
Cristian