Why did manufacturing costs rise so substantially?
Finally, once you have successfully isolated and focused on the key issues, try to propose some solutions. You can be as creative as you wish here, but try to focus on tangible solutions that you think that the company could actually implement. Depending on the answers to your previous questions, you might believe that some of the following are the right answers to the decline in profits: “It looks like raw material costs are the major factor behind declining profitability. The company should go to its suppliers and make sure that it is getting the best price from them” or perhaps: “I think that the company’s declining profitability has been principally driven by declining volume. Consequently, we need to make sure that the company’s competitors do not continue to steal its customers. To stop this we could look to improve its distribution to key outlets, and perhaps start to aggressively push its product through the large European supermarkets.
