Something I would have liked to see would have been a greater awareness of the possibilities surrounding cashless transactions. for example, cash-on-hand will be in 2 currencies depending on the 2 points of the flight and if a US carrier only accepts USD, you miss out on international travelers... whereas a credit card will convert for you. Additionally, since the card is technology, there should have been a mention of pre-flight purchase capability, as well as in-flight purchases through the on board entertainment module (for example, you can select from a digital menu and pay). This gives you multiple chances to pay, not just when the cart comes by
Good point!! I also wanted to hear more about the benefits on international flights. Furthermore, I would recommend A+ switches to card-only purchases on international flights only as a pilot (test), and see if it is successful, and then later implementing it on the domestic flights. I chose international flights first for the very reason that the credit card will convert the currency for you, and most international travellers may not have exchanged a large amount of cash prior to the flight and will likely prefer card purchases.
Hey Elaine, thanks for the videos. Its really helpful for me to pause and try to prepare my structure as I go through the case. It would be great to see some information that you provide to the candidate but still a good effort. And specially the notes also helps me to see what the candidate thought about! Keep it up!
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 :-)
really interesting video, good structure, good business sense, but I think the interviewee speaks too fast and she did not take the time to analyse before speaking when she got the data. Beside that is a great job
Thank you so much Elaine for uploading such useful content. I Have read so many books on case study. Content like that help me to shape up my thoughts. I love you for that. Would you like to suggest some books in which reader can understand the pricing and dynamics of market
Ayush Varshney hi!! Appreciate your comment and question. So if you want a deep enough understanding of pricing for casing/consulting - then I think case books and doing the actual cases themselves are the best teacher. If you want a more nuanced understanding for your personal interest, then a good ol economics text book would be great, I am a believer in behavioral economics - players are not fully rational and we need to account for psychology - so you can look more into that field if you would like. I also think reading the news regularly and think pieces by thought Leaders (eg. McKinsey Quarterly) can be great places to get a more applied understanding of market principles. Hope this helps! I spend most of my time digging into non direct business material (politics, social justice, philosophy)
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
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 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
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.
I'm looking at Elaine's notes in drop box..Is operational vs financial a useful framework in general/in this case? What would have been a better framework to start this case? I'm having a hard time grasping why to divide things logically into operational and financial.
I disagree, I think that separating logically into Operational and Financial made a lot of sense. Those are the key parts that would influence a companies change if it already had a strong strategic mission established, which could probably be assumed. It tends to be a good idea in a case to begin by setting the overall areas of business where you must look. In this case we could rule out marketing, accounting, HR, etc. the issue was a money related issue that had a direct affect on operations.
@@archiej6386 cash is a part of current assets. If the requirement of cash is reduced, it's good for the company as then it can be used elsewhere. That's what 'freeing up cash' means
I think she does. Physical cash from all flights would have to be handled manually, checked, counted, reconciled and eventually deposited in to the airlines' accounts. Logistically this takes weeks. Cash (in the virtual sense) from card payments will be received in to the airlines account within 24 hrs by card vendor. Essentially, it is a huge reduction in accounts receivable, meaning cash is immediately available for paying down other debts, suppliers, etc. Using Ryan Air as an example, they do 600,000 flights per year = 50k flights month. Even if only 50 USD of cash was handled per flight then you can easily see how this is significant -> 50k x 50 = 2.5m USD less working capital on a rolling monthly basis.
Hi! Unfortunately, I do not know the best way to find the materials for the case for the public. I would try googling the case name or ask a friend who may be a part of a university who has a consulting club.
It's not about forcing creative flair. A clear and structured approach that the interviewer can follow through logically is always better than "creative" ideas which are vague and are not hypothesis-driven.
sometimes handling machines takes more time than tendering change-- you have to press numbers, sometimes the connection goes away (in India at least) .. its definitely not time saving
Handling the machine can be done by a dedicated off-plane team. The cash handling system inundates the cabin crew, so all things equal, it is an upgrade.
That’s a lot of structuring of thoughts! My response would have been we will not simply play fast follower to the other airline but doing something radically different than the competitor.
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.
