Bain Online Test - Grocery Retail Co. (Guidance on Questions)

Hi there,

I'm very sorry but Clara and Udayan's answers are wrong. The answer is A and D. (Though Answer B for Q1 is indeed tempting)

Let's talk through this....

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The key here is to identify what matters. What clues are you getting in the text? I.e. what moves the needle? I see two clear phrases:

1) The current value proposition is not driving profitable economics (loss of profitability)

2) Customer behaviour is highly skewed towards infrequent one-off purchases

3) High Inventory days and non-moving stock leading to sub-optimal throughput.

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QUESTION 1
(ANSWER) A. Current value proposition and value proposition of competitors, global players etc.

• Value proposition! This is the answer...the text explicitly told us the current value proposition is a big issue. We need to first decide if the big-picture i.e. the highest-level decision makes sense, before we dive into any specifics.

B. Contracts for purchase of various SKUs (stock keeping units)

• Irrelevant...nothing like this is mentioned. It is tempting to pick this one as we know we have a problem with stock. However, the problem is regarding throughput not contracts.

C. Employee wages to be benchmarked against competitors

• Irrelevant...nothing like this is mentioned

D. Store locations to assess spread and focus

• Irrelevant...nothing like this is mentioned

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QUESTION 2
Which of the following is NOT a priority for the client? Choose One
A. Improving customer loyalty

• Of course it is! Customers aren't coming back..that's a problem...loyalty means they come back...i.e. repeat purchases...i.e. this is a focus

B. Increasing frequency to reduce inventory days

• We have high inventory days. This is a problem for profitability. So, reducing them is good

C. Improving profitability and margins

• Of course! We said we have a profitability issue

(ANSWER) D. Identifying profitable stores and closing down others

• Store-specific profitability isn't mentioned anywhere. We can't make this assumption!

(edited)