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Cases

Ohjelma
Bike Lease Finland

Bike Lease Finland

Leasing and maintenance of employee bicycles, digital services.

Ohjelma
Excelence Solutions

Excelence Solutions

Consulting and data analytics, expert services and consulting.

Ohjelma
Finnish Timber Oy

Finnish Timber Oy

Ecological log buildings and construction site processes, project business.

Ohjelma
Green Scape

Green Scape

Customized green wall services for B2B clients, service business.

Ohjelma
Marine Craft

Marine Craft

Customized motorboats, project delivery, manufacturing industry.

Ohjelma
Scandinavian Design

Scandinavian Design

Leasing and maintenance of company bicycles, digital services.

Task

Profitability Comparison



In this task, the student compares the profitability of a product or customer segment from two case companies. They prepare simple profitability calculations, interpret the differences, and consider the reasons for these differences. Based on the calculations, the student writes a recommendation on which target the company should invest in and with what actions. The task develops the ability to connect financial figures to practical business decisions.

Learning objectives

After completing the task, the student:
1. Can calculate and interpret the profitability of two products or customer segments using basic management accounting metrics.
2. Understands how pricing, volume, and cost structure affect profitability.
3. Can make recommendations to the management of the case company based on financial calculations.
4. Recognizes the limitations of profitability calculations and can consider what additional information is needed for decision-making.

Step by step

  1. Profitability comparison

    Objective:
    The objective of the assignment is that the student is able to calculate and compare the profitability of two products or customer segments of the case company and make a clear recommendation to management based on the calculations.

    Materials:

    • The selected case company description from the learning material.

    • A simplified cost and sales dataset for two products or customer segments given in the course or created by yourself (e.g. sales volume, sales price, variable costs, required working hours).

    • The assignment is based on the case description and on well-grounded assumptions regarding prices and costs.

    Assignment steps (instructions for the student):

    1. Select the comparison targets and describe them briefly
      Choose two products or customer segments from the case company that you want to compare from a profitability perspective.
      Write a 4–6 sentence description of each: what kind of customers they involve, what service or product is offered to them and how important they are for the company.

    2. Prepare a profitability calculation for each target
      Collect or define through assumptions the necessary figures:

      • sales volume (units or €)

      • average sales price

      • variable costs (e.g. purchases, subcontracting, commissions, working hours)

      • optionally also the allocation of fixed costs (e.g. marketing, administration).
        Calculate at least the following for each target: contribution margin €/unit, contribution margin percentage and an estimate of the total contribution for the selected period.

    3. Compare profitability and identify reasons for differences
      Prepare a half-page comparison that highlights:

      • which of the targets appears more profitable and based on which metric

      • which factors explain the difference (e.g. price, volume, cost structure, time required for work).
        Write the comparison as clear text, not just a table.

    4. Make a recommendation for management
      Write 5–8 sentences in which you present a recommendation on how the case company should proceed:

      • whether to invest more in one product/segment, cut back, reprice or develop the operating model

      • what the effects of the recommendation could be on revenue, risk level and resource use.
        Base your recommendation directly on your calculations.

    5. Briefly reflect on limitations
      Write a short paragraph (3–5 sentences) on what the calculation does not show:
      for example brand value, strategic importance, long-term growth opportunities or uncertainty in the data.
      Explain what additional information you would need to be able to provide an even stronger recommendation.

    Submission and evaluation:
    Submit an output of about 1–2 pages that shows:

    • a description of the two products or customer segments being compared

    • clearly presented profitability calculations and the assumptions used

    • a written comparison and conclusions

    • a recommendation to management and a brief reflection on the limitations of the calculation.

    Evaluation focuses on how well:

    • the calculations are logical and transparent

    • you can interpret the numbers and make well-grounded conclusions from them

    • the recommendation is clear, realistic and aligned with the calculations from management’s viewpoint

    • the text is structurally clear and understandable.

    Recommended working time: approximately 45–60 minutes, individually or in pairs.

Tasks by audience and theme

University of applied sciences

Polytechnics and higher education studies.

68 tasks