What does "key driver" exactly mean?

Hey Anon A,

As Anon B said, the key driver is just the main justification behind the problem statement, so there is no way you can now it beforehand (it would be great if you have some early hypothesis on what it could be, but unless you know very well the industry and the company it's highly unlikely for you to be 100% sure what it is), so you should draft your strcuture normally and proceed with the analysis, so that you can identify it.

"In the solution, it is actually not the "reason" that I should be after. The "key driver" end up with identifying essential stakeholders who has the major power over sales decisions, e.g. customers and distribution channels. And I was criticised by not understanding the question." >> we're not aware of the particularities of this case/situation and it's also not 100% clear the context the problem statement vs. solution, so can you ellaborate further?

Best

Bruno

If you get asked on key drivers the interviewer really wants to test whether you do understand what aspects mainly impact the business i.e. in your case what impacts revenues. Thus, the interviewer is actually not interested in the basic equation and this would be (at least to me) the wrong approach to start with.

Definition Key Driver: What variable has a high impact on the result.

Let me give u an example: A hotel in Switzerland is experiencing a revenue decrease since a couple of years. What are the three main driver for revenue that you want to look at?

Key Driver:

1. The number of hotel guest per year

2. The average duration a customer is staying in the hotel

3. The average room price / night

Now you need to build your analysis accordingly. Build your hypothesis and now you might want to start asking more precise questions on the revenue equation. Based on your findings you can structure your further analysis and always come back to the identified key drivers.

(editiert)

The full case is about a automotive parts company. They have a flat sale. The marketing manager comes and ask about 1) what is the key driver of the flat sale and 2) what to do with it. I started the case with the usual framework: market/customer/distribution channel/client company. I thought it is to identify the reason for the flat sale. What the interviewer actually want is a brainstorming of potential KEY drivers, no data analysis.... I managed to deliver the key driver at the end, but it takes quite some detour to get there. Thus I got confused. When they ask for key driver, it is really a different question than asking for the reason, right?

I understand that it is to test your business judgement of the "key point". The question is, those key points can only be revealed after some initial strcutrue, where I may get an idea where to look into, right? In this hotel case, the key drivers are extrapolated from the formular to calculate its revenue, price/night * #of guest * average stay/guest. The key driver can actually be something under each parameter: For example, #of guests maybe changed becaused the total tourism industry is not in a good shape or bad economy. Those two second level driver can even be "blamed" to some specific stakeholders.

I think the problem is, should I brainstorm with structure, or structure to identify potential drivers via looking at all my branches?