Root Cause Analysis - Net Revenue Drop at Enterprise X

PROBLEM

Evidence


Our company's net-revenue has gone down. 

WHY?

On the surface


Sales remain high, but profit margins have gone down.

WHY?

Sub Causes


We lowered our prices in order to compete with a new company in the area.

The cost of our raw materials has risen.

WHY?

Hard core truth


We assumed we’d have to compete for the same customers.

We have not expanded our product offering to be able to capture a larger segment of the market.


WHY?

Status Quo


Customers constantly  switch between products as new players and startups are introduced to the space with unique product offering and competitive price point.

We have not refreshed our product design and manufacturing methodology in years.


WHY?

Origins


We focused most of our growth efforts on sales and not product development.

Opportunities for solution:


Short term: Segment our legacy product offering to capture different layers of customer personas at different price points.


Long term: diversify introduce new products and add-ons to appeal to existing customers

Exit