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Broad case question

case questions unusual case
New answer on Jan 02, 2023
7 Answers
487 Views
Anonymous A asked on Dec 30, 2022

How to approach answering a broad case question such as the following: Where would you open an appliance store? 

I would normally ask clarifying questions to understand the objective/strategic intent behind opening up a store. However, as it is addressing to ‘you’, therefore myself, I am unsure how to approach this.

 

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Rushabh
Expert
Content Creator
replied on Dec 30, 2022
Limited Availability | BCG Expert | Middle East Expert | 100+ Mocks Delivered | IESE & NYU MBA | Ex-KPMG Dxb Consultant

Hello,

Here are my thoughts:

1) Yes, absolutely you should ask clarifying questions to get a better idea on how to approach the question. But once you have enough info, do the following.

2) Make a broad MECE structure laying out the factors you will consider when thinking about opening an appliance store. For e.g.:

 

1. Market Attractiveness

1.1 Market sizing

1.2 Market growth

1.3 Competition

1.4 Our offering vs what our customer's want

 

2. Financial factors

2.1 Initial investment

2.2 Annual revenue estimate (from market sizing above)

2.3 Annual costs estimate

2.4 NPV/PBP/ROI etc

 

3. Operational factors

3.1 Where will I have staff available?

3.2 Proximity to suppliers/customers

3.3 Transportation costs vs Rent [trade off between non-premium and premium locations]

 

4. Strategic factors

4.1 Which geographies would I want to be strong in, or have a flagship showroom in?

4.2 What is our company's 5 year plan? Is it to grow as many stores as possible? Is it to start franchising? etc

 

This should give the interviewer enough material to point you in the right direction of the case.

Hope this helps!

Feel free to reach out to me via chat if you have any specific questions :)

Rushabh

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Moritz
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updated an answer on Jan 02, 2023
ex-McKinsey EM & Interviewer | 7/8 offer rate for 4+ sessions | 90min sessions with FREE exercises & videos

HI there,

The objective is obviously key here because it changes fundamentally the approach you take. Let's consider some extreme examples i.e., same question but different objectives:

  • Visibility & Positioning: Imagine an appliance company wants to position their products as luxury goods. This may well lead you down the path to open up a flagship store that may be loss-making in terms of the entity's P&L. However, this doesn't matter as it will be adding disproportionate marketing value to the company as a whole because now, their fridges are literally positioned next to Luis Vitton and Chanel stores in the middle of a luxury shopping street, making people want to get them → Maybe a litte far-fetched but you get the point.
  • Profitable Growth: In all likeliness, an existing retailer is seeking to expand its footprint, in which case it becomes a matter of offsetting any investment costs with a decent P&L. This will lead you down a very different path than the above case and has been described by other coaches. → My point is that the objective changes everything.

Rather than speculating on the objective, however, you should absolutely clarify (by offering some ideas, perhaps). You're solving someone else's problem and it would be very careless not to ask about the owner's intent and success criteria. If I were the interviewer, I would be puzzled if you proceeded without knowing the latter.

Hope this helps a bit. Best of luck!

(edited)

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Dennis
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Content Creator
replied on Dec 31, 2022
Ex-Roland Berger|Project Manager and Recruiter|7+ years of consulting experience in USA and Europe

You should ask clarify questions that help you clarify, a.k.a. understand the task at hand to make sure you are not going down a completely different path right from the get go. So limit it to the essential elements rather than bombard the interviewer with minute details.

When the case question is broad, you should tackle it conceptually first to demonstrate to the interviewer that you can think through such a business operation. No need to get into any numbers at this stage unless otherwise prompted. Overall, it’s on you to establish a structure to get started. 

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Ian
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Content Creator
replied on Dec 30, 2022
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

Hi there,

You're asking how to framework! This is the #1 hardest skill in casing to learn and generally requires coaching to nail.

You need to learn how to create a structured MECE objective-driven approach for any question in the world - that way you can solve any case question that comes your way!

For this particular question, I would approach it as a “hidden” market entry question:

1) Where is there strong demand for an appliance store (people, traffic, etc.)

2) Within those options where will our store do well (matches demographic, better than competition there, etc.)

3) Within those, in which are best positioned to execute/implement (have the $, connections, rights, expertise, etc)

Here's a bit of reading to help with your prep:

https://www.preplounge.com/en/articles/how-to-shift-your-mindset-to-ace-the-case

https://www.preplounge.com/en/articles/pitfalls-case-interview-preparation

 

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Hagen
Expert
Content Creator
replied on Dec 30, 2022
#1 Bain coach | >95% success rate | interviewer for 8+ years | mentor and coach for 7+ years

Hi there,

This is indeed an interesting question which is probably relevant for a lot of users, thus I am happy to provide my perspective on it:

  • Generally speaking, it is always a good idea to ask clarifying questions, as it helps to ensure that you have a thorough understanding of the problem and can develop a more informed and accurate solution. In this case, it may be helpful to ask the following types of clarifying questions:
    • What are the goals and objectives of opening an appliance store?
    • Who is the target customer base for the store?
    • What resources or constraints do I have to consider when choosing a location?
    • How will the store be positioned in the market?
    • What are the potential competitors in different locations?
  • When structuring the question about where to open an appliance store, it is important to consider a variety of factors and structure them in a logical manner. This could include starting with financial and non-financial factors and branching out from there.

In case you want a more detailed discussion on what to do in your specific situation, please feel free to contact me directly.

Best,

Hagen

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Maikol
Expert
Content Creator
replied on Dec 30, 2022
BCG Project Leader | Former Bain, AlixPartner, and PE | INSEAD MBA | GMAT 780

The goal is to show logic and business sense in your answer.

Think about a solution, text it and we can discuss it. Or book a session to discuss it.

The key point is that when you open a shop you need goods, employees, and clients (able to pay for your goods).

So, considering this hint, you have something to work on!

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Anonymous replied on Dec 31, 2022

You could probably clarify in a slight better way. I would say, “ I am going to assume that I want to make as much profit from opening this store, but correct me if I am wrong”

If so, I think we should consider:

  • Demand for appliances in the local area
  • Supply of available space and materials
  • etc…
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Rushabh gave the best answer

Rushabh

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