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Customer Profitability Case

Cases represent broad organizational situations that encompass many facets of a company’s business model. The learning focuses on logically analyzing business situations and identifying what concepts and analyses will connect the issue to the actions taken. In team assignments, you should show that you can collaborate with group members and provide added value solutions to your group work.

There are no simple solutions; yet through the dynamic process of exchanging perspectives, countering and defending points, and building on each other's ideas, students become adept at analyzing issues, exercising judgment, and making difficult decisions.  I do not expect you to come up with a truly unique solution. I am interested in your thought process. These assignments can prepare you for your career and show you are capable to think through a problem as well as how to communicate and present the solution.

Casework will contain written assignments, analyses, and presentations. They will be both team-based and individual. The case grade will be based on the level of you and your team’s contribution to increasing the classes understanding of the case. Further, you should demonstrate an ability to utilize and apply course concepts and analysis to substantively support conclusions, evaluate alternatives and provide a comprehensive solution.

Case write ups will be in an action memo formats and will be submitted via HCT.

Suggested ways to tackle case analysis:

Case Location -  https://hbsp.harvard.edu/import/674762

(There was an oversight in the HBR Course Pack. The required readings for customer profitability were included but the case was not. Please click on the above link for the case study.

You will NOT need to pay anything for the case.) 

Points to consider: These 10 are the “textbook” questions. They do not have to be answered in any particular order or at all. Collectively, they are a good guide. Question #7 may take more time than you may have, so do not worry about it (but it would be “kind of cool if you did” and it definitely will be an excel worksheet you could use in the future!)

  1. Summarize Infinity Bank’s competitive environment. What are the major issues facing the bank? How did the bank perform in 1998-2003?
  2. What were the conclusions of the product-profitability project? What were the surprises?
  3. Should the bank consider phasing out current accounts? What are other possibilities for improving this product line?
  4. What are the potential advantages of the “supermarket” strategy? What are the potential disadvantages of the strategy?
  5. What are the objectives of customer-profitability analysis (at Infinity and in general)? What does it add to the product-profitability system? Is it important? How should Philippa Smith’s customer-profitability pilot study be improved/extended?
  6. What were the conclusions of Philippa Smith’s customer-profitability pilot study? What were the major sources of variation in customer profitability?
  7. Examine the customer-profitability database. Construct a graph to communicate the profitability of the 2,205 customers in the Weighted Sample sheet, ranked from best to worst.
  8. Given the customer-profitability analysis, does the “supermarket” strategy make sense?
  9. How should the customer-profitability information be used? What should we do about the unprofitable customers?
  10. Overall, what are your recommendations for Infinity Bank’s managers?

Customer Profitability Case

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