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Company case by Stern Stewart & Co.
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Stern Stewart Case: TexGroup – Breaking the crisis of a traditional textile company

< 100
Times solved
4.5
< 100 Ratings
Advanced
Difficulty

Case Prompt

TexGroup is a family-owned German heritage company, now in its third generation of leadership. Specializing in high-quality, Made-in-Germany textiles, the company operates across four distinct product segments: TexCasual, TexPremium, TexSport, and TexProfessional. TexGroup supplies its products to a diverse portfolio of fashion brands, with a strong focus on the European market.

In recent years, TexGroup has faced increasing financial pressure, with steadily declining profit margins. The recently concluded 2024 fiscal year closed with a historically low EBIT margin of just 0.6%, raising serious concerns among management about a continued downward spiral that could push the company into financial losses.

To stop this negative trend and secure long-term success, TexGroup is seeking an external consulting team to setup and implement a structured turnaround program. The primary target is to achieve 10% sustainable EBIT margin within two years.

 

Note: During our assessment day, candidates could receive a laptop and an Excel file to analyze data and perform calculations. While this case can be solved without the Excel file, downloading it allows for a more pragmatic experience. Download the file here.

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Task 1: Identifying key drivers of profit decline (8 min)

Break down the problem into general possible drivers of TexGroup's declining profitability.

Format: Verbally / Whiteboard

Task 2: Analysis of TexGroup’s income statements (12 min)

Analyse TexGroup's income statements for 2024 and 2023 and formulate hypotheses on the main reasons for the negative financial development.

Format: Excel

Task 3: Benchmarking TexGroup’s income statement (12 min)

Benchmark TexGroup's income statement against its two main competitors and identify key improvement areas.

Format: Excel

Task 4: Structuring key improvement areas (3 min)

How would you summarize and structure the key improvement areas based on the analysis? Please draft a possible program organization.

Format: Whiteboard

Task 5A: Brainstorming cost reduction strategies (5 min)

[Choose 5A or 5B]

Brainstorm first measure ideas on how to increase revenues.

Format: Whiteboard

Task 5B: Brainstorming cost reduction strategies (5 min)

[Choose 5A or 5B]

Brainstorm first measure ideas on how to reduce raw material costs.

Format: Whiteboard

< 100
Times solved
Advanced
Difficulty
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