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By examining KO’s fixed cost structure, Kevin helps Alice understand the difference in strategies for companies with different cost structures.
Using a set of graphs, Alice is able to correctly determine the strategies preferred by KO and the bottlers.
Alice rapidly arrives at the solution. Though, the lesson from this case is to have a logical sequence of analyses leading up to the final answer, and moving rapidly to insights.
Kevin tests Alice’s understanding of the case by asking her the economic considerations when selecting a fixed-cost structure. There are crucial lessons from Alice’s language.