Have you conducted a marginal cost analysis comparing the cash received, to deposit versus credit card deduction of 1 to 2% when paid by a credit card directly? In my opinion, when considering marginal benefits, cash payment seems to be more advantageous. This is because depositing cash in a bank might not incur significant costs. Additionally, it's worth exploring the option of using UPI or QR code for payments, as they do not entail any charges and allow for receiving the full amount. For cash Risk - Create proper Reconciliation method will solve the issues.
Or the manufacturer could go from B2B to DTC and now instead of earning a 25% margin, they earn a 62.6%. Even if they lower their prices and spend on building websites, they would still be able to attain a 50% margin within 2 years.
This was an INCREDIBLY helpful video! I'm having my first case interview soon and this really helped me understand what it would be like and the type of thinking I should adopt! Great job :)
She's wrong tho, should have focussed more on cost and not revenue. I wouldn't let her pass that mistake if i was an interviewer as she failed to identify the root cause.
makes me want to barf in my mouth. the mckinsey consultants i work with have messed up all the numbers in their final reports (they might as well be made up) and come up with the most obvious recommendations possible. put that in your 4 x 4 matrix and your shit toothed grin when you present.
Hello Elaine, you probably don't remember me, but we worked at BIA many moons ago. I was in the IT department, and I think you were an intern at the time. You had come to my desk a few times while you were there... Anyway, just thought I'd randomly say hi more than 7 years later.
I think that in the beginning would be great if he asked about what products are sold and where the business units are located, I consider that this things would changing totaly the case. In my opininion without these informations and another ones is very dificult to be specific and insghtfull.
Hi guys, Can you please guide me how to go about profitability framework in an INTERVIEWER LED McKinsey case because i wont be asking interviewer for info et
Seems very structured and confident. This is the first case I’ve seen where the candidate had to make up the data. I work at Bank of England and I like to see cash being used so that my colleagues keep their jobs :-)
Paying with a card would increase your receivables by increasing the time you need to cash in the money, therefore your working capital would INCREASE and would have to be financed.
Hi Anna! David here, hope I can help to explained why the interviewee only using VC while calculating BEP. Breakeven Point means that our investment towards the business have paid off by the profit we gain from that particular business. And the profit we get from doing a business is actually a gross profit (unit*(price - VC)). That way to calculate BEP we use this formula: Initial investment/(#Unit sold*(price-Var Cost)) Regarding your questions about Fix Cost, I think in some case there are annual fix cost (eg. renting the distribution channel/warehouse/etc.), to handle that we should ask the interviewer whether this 'variable cost' is total annual cost per year divided by total unit sold or just cost of good sold manufactured.. if it is just cost of good sold manufactured, the formula to calculate BEP must elaborate the fix cost in to the calculation so the calculation of BEP will be something like this: BEP = Investment/Annual Profit from the Business =Initial Investment/[(#UnitSold*(Price-VarCost)) - Annual Fix Cost) Hope this help!
Thanks for sharing the video! A couple of things the candidate can improve. First of all, the passion, doesn’t seem that this candidate is curious enough and enthusiastic about doing consulting. Secondly, the initial structure is not very organised when I just listen to it. He can number each branch or bucket. Thirdly, the candidate should walk through the calculation with and put the initial formulation upfront to the interviewer.
Nice case. Makes you think. However I heard in the opening comment that A+ uses cards + cash, So where is the issue of incremental costs to switch to cards and risks of losing revenue if card reading machine fails.?
i dont know if using 4 minutes to present the strcuture is too much that would amount to fishing, do you guys think he can neglect some of that? I feel like the parts about joint venture or equity financed are a little bit redundant at the beginning stage
I do not agree with the costs - since 80% of people use cards...they should not need more PPE...you only need 4-5 swiping machines...I don't think training and IT should be an issue aswell
Would you please post some more case studies? How about just making some up with fabricated number and see how the interviewee responds. Or just take some ideas from existing companies and give a case study on them. Love the insight business education like this, it's going to a business school.
How do the self check out machines know when items have not been scanned or not placed in a bag after scanning? It gives you a warning. Is there a laser scanner or does it detect with the weight difference from the shelve where you place the products before scanning and after scanning?
Alternate solution: sell the clothing directly from a company website & put the website address on the tag of the clothes. $60-$45=$15 to the stores. $120-$45=$75 to the customers.
