When it's a case related to decline in "sales", is it assumed it's decline in "revenue"? Or should I clarify that with the interviewer if they are referring to revenue or volume?
(edited)
Hi there,
It is always better to clarify. Although sometimes sales and revenue is used interchangeably, you really need to understand the business model to see whether they are equal or not. For a business that is commission based, these could be two different things.
For example, for an online grocery business like InstaCart, the way the company makes money is by taking a commission out of every transaction consumer makes. If a consumer makes an order on InstaCart of USD100, this USD100 would be sales (or GMV in eCommerce term). But the revenue for InstaCart would be USD 5, if the commission rate is 5%.
Makes sense?
Emily
Hi Anonymous,
Most likely "decline in sales" was used synonymously with "decline in revenue" - but never assume anything in a case interview implicitly. Just ask that straight forward and clarify with your interviewer.
Same is in a real-life client interaction - if you are not perfectly sure what your client refers to, you will just ask > the same should be true for case interviews as well!
Hope that helps - if so, please give it a thumbs-up with the green upvote button below!
Robert
A decline in sales is ambiguous. Its not clear whether they mean the quantity of sales (i.e. volume) or revenue?
If they mean volume then you would want to dig into the drivers of why demand (volume) has fallen? Some reasons could be an increase in price, a new competitor taking share or perhaps changing customer preferences over time.
If the decline is revenue then you need to dig further to understand whether its volume or price. A fall in price could perhaps (amongst other reasons) be due to greater discounting (which you would hope would drive higher volumes unless its a response to competitor action) or it could be a change in mix towards lower priced products, which in turn could be due to multiple factors, including competitor action or changing consumer preferences.
In summary, never assume what the interviewer means, always clarify if you are not sure otherwise you run the risk of going down the wrong path.
Hope this is helpful!
Kind Regards,
Adam
Hello,
The first and the most important rule to start the case is to clarify all the definitions and the objectives. Talking about "Sales" is really ambigous, and you have to ask if it's referred to volumes or revenues. Don't be afraid to ask questions to your interviewer, he's an important source of information.
Best,
Luca
Hello!
Precisely this kind of "vague" promp is the one that 100% needs further clarifying.
Decline in sales could be in number of units sold, in total revenues obtained, or both. It completly changes and the 1st thing to be done is to understand in which scenario we are.
For instance, if it´s a decrease of units but revenue stays the same, we could have experimented a pricing change, which can mean a change in stregy towards pricier segments (changes in marketing, go-to-market, packaging, etc.) Same way, if for instance you are selling the same number of units but you are getting less revenues, it could be a pricing change or a change in the product. mix.
Hope it helps!
Cheers,
Clara
Hope it helps!
Cheers,
Clara
Learn to crack Profitability Framework Consulting Cases, which are the number 1 reason for real consulting projects and hence are an important case type.
1 Q&A QuizGrowth questions are among the most common questions in consulting case interviews: gather the necessary Information about volume and price to find the best growth lever
Learn everything you need to know about CAGR (Compound Annual Growth Rate) for your case interview ✔ Definition ✔ Formula ✔ Examples ✔ Applications
LubricantsCo, a very successful Asian premium producer of lubricants in their native region, would like to further increase their revenue and profit. The product range ranges from lubricants in the automotive sector (e.g. motor and gear oil) to industrial applications (e.g. fats, heavy-duty oils). ... Open whole case
Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case
I’m thinking about setting up a wine cellar in my basement. The way I see it, shelf space would be divided into two sections: (1) a “drinking” section where I store bottles for my own consumption and (2) an “investment” section where I store bottles that I intend to sell at a profit after they appre ... Open whole case
You have been hired to support the owner of a bike-shop as a business consultant. The bike-shop has suffered a significant revenue decline during the last year, and now the owner would like you to assess the situation and options for the way forward. They want to know last year’s profit, i.e. how i ... Open whole case
A leading online real estate marketplace in Germany – your-new-home.com – is struggling with stagnating sales after many years of high growth rates. In a preliminary project with EY-Parthenon, the market environment has already been examined in detail – competitors, new entrants, customer needs, etc ... Open whole case
The Case Cracker Program 
