Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Gianluca

0 Meetings

75 Q&A Upvotes

USD 149 / Coaching

4

Bain Business Case

Hi,

This is a question from Bain sample case. I attach the question and relevant graphs below. I know that the answer is 2.7 but im not sure on how to get to this. I would appreciate if someone could give me hints on how to solve this. Thank you very much!

The whole case can be found in this link if someone finds it useful: https://drive.google.com/drive/folders/1X_4awAfTq302vQyT1m7pbHj4PRontjkv?usp=sharing

Hi,

This is a question from Bain sample case. I attach the question and relevant graphs below. I know that the answer is 2.7 but im not sure on how to get to this. I would appreciate if someone could give me hints on how to solve this. Thank you very much!

The whole case can be found in this link if someone finds it useful: https://drive.google.com/drive/folders/1X_4awAfTq302vQyT1m7pbHj4PRontjkv?usp=sharing

(edited)

4 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Gianluca

0 Meetings

75 Q&A Upvotes

USD 149 / Coaching

Hi,

based exclusively on the question and graph you provided, I would answer as follows:

  1. Based on graph 2, ChemicalCo currently sells (1.2 + 4.5 + 7.2 + 6 + 3) = 21.9 kty of Chemical_A to local Chemical_1 producers (players A to E);
  2. If ChemicalCo acquires players C and D, my hypothesis would be that it will fulfill 100% of players C and D's Chemical_A needs, thereby gaining an additional 4.8 kty * $1.0k/ton = $4.8M in revenues;
  3. However, by acquiring players C and D, ChemicalCo will lose local customers A, B and E, losing (1.2+6.0+3.0) kty * $1.0k/ton = $10.2M;
  4. Finally, ChemicalCo will export the difference between the quantity it currently sells locally and the new quantity it will sell after the acquisitions (equal to the sum of the entire Chemical_A need by players C and D, i.e. 7.5 + 9.0 = 16.5 kty). That is, it will sell an additional (21.9-16.5) kty = 5.4 kty at a price of $0.5k/ton, resulting in additional revenues of $2.7M.

Overall, the change in ChemicalCo's EBITDA will be equal to: $4.8M - $10.2M + $2.7M = -$2.7M.

Hope this helps.

Hi,

based exclusively on the question and graph you provided, I would answer as follows:

  1. Based on graph 2, ChemicalCo currently sells (1.2 + 4.5 + 7.2 + 6 + 3) = 21.9 kty of Chemical_A to local Chemical_1 producers (players A to E);
  2. If ChemicalCo acquires players C and D, my hypothesis would be that it will fulfill 100% of players C and D's Chemical_A needs, thereby gaining an additional 4.8 kty * $1.0k/ton = $4.8M in revenues;
  3. However, by acquiring players C and D, ChemicalCo will lose local customers A, B and E, losing (1.2+6.0+3.0) kty * $1.0k/ton = $10.2M;
  4. Finally, ChemicalCo will export the difference between the quantity it currently sells locally and the new quantity it will sell after the acquisitions (equal to the sum of the entire Chemical_A need by players C and D, i.e. 7.5 + 9.0 = 16.5 kty). That is, it will sell an additional (21.9-16.5) kty = 5.4 kty at a price of $0.5k/ton, resulting in additional revenues of $2.7M.

Overall, the change in ChemicalCo's EBITDA will be equal to: $4.8M - $10.2M + $2.7M = -$2.7M.

Hope this helps.

Thank you so much ! — Valeria on Feb 09, 2021

Book a coaching with Ian

100% Recommendation Rate

188 Meetings

15,885 Q&A Upvotes

USD 289 / Coaching

Hi Valeria,

I see this is your second post in a short time for Bain sample cases.

It's great that you're using the Q&A here...that said, I highly encourage you to really think through these problems as much as possible before asking for help!

This is the classic "giving a man a fish" vs "teaching how to fish" scenario. Gianluca has given a great response...take time to reflect not on his answer, but how he decided to think about/break down the problem! Patterns should emerge.

Good luck :)

Hi Valeria,

I see this is your second post in a short time for Bain sample cases.

It's great that you're using the Q&A here...that said, I highly encourage you to really think through these problems as much as possible before asking for help!

This is the classic "giving a man a fish" vs "teaching how to fish" scenario. Gianluca has given a great response...take time to reflect not on his answer, but how he decided to think about/break down the problem! Patterns should emerge.

Good luck :)

(edited)

Book a coaching with Clara

100% Recommendation Rate

50 Meetings

12,186 Q&A Upvotes

USD 229 / Coaching

Hello!

+1 Gianluca, super didactic :)

Bear in mind that you need quite some agility to be able to do this -the overall thinking + calculations- in minutes.

Cheers,

Clara

Hello!

+1 Gianluca, super didactic :)

Bear in mind that you need quite some agility to be able to do this -the overall thinking + calculations- in minutes.

Cheers,

Clara

Hello,

1) Earlier market share - ( A + B + C + D + E ) = 21.9

2) New market share - ( C + D )( 9 + 7.5) = 16.5

Domestic market share lost = ( 1 - 2 ) = 5.4

Since, domestic market share has to be exported at .5 ( or half the price of domestic market revenue lost will be exactly half) = 5.4/2 = 2.7

Or 5.4 * .5 (export rate) = 2.7

Any other calculation you do will consume time & confuse you more is what I feel.

Hello,

1) Earlier market share - ( A + B + C + D + E ) = 21.9

2) New market share - ( C + D )( 9 + 7.5) = 16.5

Domestic market share lost = ( 1 - 2 ) = 5.4

Since, domestic market share has to be exported at .5 ( or half the price of domestic market revenue lost will be exactly half) = 5.4/2 = 2.7

Or 5.4 * .5 (export rate) = 2.7

Any other calculation you do will consume time & confuse you more is what I feel.

(edited)

Related BootCamp article(s)

Interviewer-Led vs Candidate-Led cases

Case Interviews can be led by the candidate or by the interviewer: In Candidate-led cases the main challenge is the structure. In Interviewer-led cases the main challenge is to adapt quickly

Related case(s)

Bain case: Asian lubricants producer

Solved 153.2k times
Bain case: Asian lubricants producer 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). According to preliminary examinations, further growth potentials in the Asian core market are rather limited. Thus LubricantsCo would like to investigate options to internationalize in the passenger car business – also outside the premium segment which is given priority. Therefore your consulting firm was instructed to elaborate a market entry strategy for the European market.  
4.6 5 29322
| Rating: (4.6 / 5.0)

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

Bain Case: Old Winery

Solved 65.9k times
Bain Case: Old Winery You have inherited the “Old Winery” from your grandfather, a winery which has been family owned for five generations and can be dated back to the 16th century. Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in the conventional way, i.e. they are not organically farmed and certified. The vine stocks are in a good condition regarding age and care. Overall, only ¼ of the harvest is made into wine by the winery itself; the rest is sold. Your grandfather never wanted to change the image of the winery and left the managerial and administrative task to a young and energetic wine-maker. Due to the not so well-known brand , the demand for the “Old Winery” wine is currently rather low. You do not intent to run the winery operatively, given your limited knowledge of wine making, but find the idea of owning a winery exciting. Your plan is to give the winery some fresh impetus.
4.4 5 1777
| Rating: (4.4 / 5.0)

You have inherited the “Old Winery” from your grandfather, a winery which has been family owned for five generations and can be dated back to the 16th century. Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in the conventional way, i.e. ... Open whole case

McKinsey Questions

Solved 38.9k times
McKinsey Questions Tell me of a situation where you had an opinion and no one seemed to agree with you. What was your goal when you decided to join university / work / clubs / a sports team? Did you have a goal that you were not able to reach? What did you do? What do you want to be remembered for and how are you achieving it? What is your typical way of dealing with conflict?
4.5 5 862
| Rating: (4.5 / 5.0) |
Difficulty: Intermediate | Style: Fit Interview | Topics: Personal fit

Tell me of a situation where you had an opinion and no one seemed to agree with you. What was your goal when you decided to join university / work / clubs / a sports team? Did you have a goal that you were not able to reach? What did you do? What do you want to be remembered for and how are you ... Open whole case

BCG Questions

Solved 26.9k times
BCG Questions What arouses your interest when you are working / studying / doing another activity (from the CV)? Tell me of a time where you had no idea what you were doing. When did you use an uncommon approach to do something? Have you ever had responsibility for other people? Tell me of a situation where you were not the official leader.
4.5 5 212
| Rating: (4.5 / 5.0) |
Difficulty: Intermediate | Style: Fit Interview | Topics: Personal fit

What arouses your interest when you are working / studying / doing another activity (from the CV)? Tell me of a time where you had no idea what you were doing. When did you use an uncommon approach to do something? Have you ever had responsibility for other people? Tell me of a situation where ... Open whole case

Bain Questions

Solved 24.7k times
Bain Questions Tell me about a difficult situation you had to cope with. Tell me of a task which you didn’t like doing and explain why you performed it nevertheless. Why do you do things? What do you like doing most / What is your favorite hobby? Walk me through a situation where you showed leadership skills.
4.6 5 296
| Rating: (4.6 / 5.0) |
Difficulty: Intermediate | Style: Fit Interview | Topics: Personal fit

Tell me about a difficult situation you had to cope with. Tell me of a task which you didn’t like doing and explain why you performed it nevertheless. Why do you do things? What do you like doing most / What is your favorite hobby? Walk me through a situation where you showed leadership skills ... Open whole case