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+ The Discount Brokerage Race

Case 8: Look at this chart. Your client is a discount brokerage. The majority of its revenue

comes from online trading. It achieved a 10% growth rate last year (Y1) and was ranked

number six in the industry. In Y2 it fell to seventh. The company wants to get back its sixthplace

ranking. How much will it have to grow to maintain that sixth-place ranking in Y3, given

the rate of growth of its competitors?

Our client is Company F, a discount brokerage. In Y1 we were ranked sixth with a growth rate

of 10% and sales of 600 million. In Y2 we dropped to seventh place with a growth rate of 10%

and revenues of $660 million. You want me to figure out how much we will have to grow by in

order to get our sixth-place ranking back in Y3.

– Yes, that’s right.

Is it fair to assume that the growth rates of all the other firms will remain the same?

– Yes.

Do you mind if I write on the chart you gave me?

– No, go ahead.

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