Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Interview Partners to connect and practice with!
Back to overview

How to structure

Hi, i would like to know what is the best way to structure the following case.

Our client is Freedom Bikes, the US-based producer of mountain bikes – luxury sport bikes that represent the American spirit of freedom. The bikes are fully designed and manufactured in the US and are sold mainly to US customers, who value independence, freedom and high quality of a US-based manufacturer.
The client brought us to help decrease costs, which increased in the resent years and eroded the client’s margins.

If you ask for the cost breakdown you realize that the problem is related with an increase in the manufacturing costs.

There is no fixed target

1
2.1k
6
Be the first to answer!
Nobody has responded to this question yet.
Top answer
Ben
Coach
edited on Oct 18, 2019
Ex-McKinsey EM | Experienced interview coach (1,000+ sessions) | Discount on 1st session | LBS MBA

Hi there,

Once you know where the problem is, there is no longer need in setting up a full profitability framework, which is particularly useful in identifying the cause of the profit decline. In this case, I would suggest that the best approach is a hypothesis driven manufacturing cost issue tree. You first need to breakdown the cost of manufacturing to its components, outline the levers to reduce the cost, and ask for data to support these levers. One example below:

  1. Cost of labour = labour hours / bike * cost of labour / hour
    1. Can we reduce amount of labour needed? How efficient / well-trained the production staff is? How does our client compare to industry averages?
    2. Can we reduce the cost of labour? How does our pay compare to industry? Is there an option to outsource some, labour intensive processes / components to a low cost location, while maintaining the US spirit of the brand?

You can do the same with the other components of manufacturing costs: raw materials, utilities, machinery, lease of the facility.

Hope it helps!

Kind regards,

Ben.

Similar Questions
Consulting
Profitability Case Framework? Capital One Mini Case Interview
on Jul 24, 2024
Global
1
5.6k
Top answer by
153
1 Answer
5.6k Views
Consulting
CraftingCases: Hypothesis Testing (Case Interview Fundamentals Course)?
on Sep 19, 2024
Global
4
1.8k
Top answer by
Hagen
Coach
#1 recommended coach | >95% success rate | 9+ years consulting, interviewing and coaching experience
52
4 Answers
1.8k Views
+1
Consulting
Growth strategy framework
on Jun 07, 2025
Global
8
300+
Top answer by
Hagen
Coach
#1 recommended coach | >95% success rate | 9+ years consulting, interviewing and coaching experience
17
8 Answers
300+ Views
+5