Case structure: Open land case

Hi A,

love this case ;-)

There is obviously no right and wrong to answer this case, but the interviewer wants to better understand how you tackle this question or better how you come to good answer.

For example...

If it should be a written answer (which I doubt), you could be creative be making different suggestions of how to use. So you're structure could be: I'll give you a long list and then let's further discuss a short list.

Or, a more likely situation, in a face to face interview, you simply ask the interviewer questions about his/her situation and preferences of how he or she could use the land in order to meet his/her goals.

Like mentioned: There is no right or wrong - you're now in the role of the consultant in order to give advice. Take a decision for a certain framework and then be creative!

Enjoy ;-) Jasper

Hi!

A very clear approach would be:

Step 1: Verify the objective (e.g., generating money from the land)

Step 2: Identify High Level Options how the land can be used, e.g.,

• Selling it
• Renting it out
• Putting it to productive use via, e.g.,
  • Building something on it which can then either be sold (e.g., a large house) or generate a stream of return (e.g., a leisure offering for specific groups)
  • Extracting value from it (e.g., agriculture, mining, oil & gas drilling, etc.)
  • ...
• Leave it untouched (and, e.g., wait for an "organic" increase in value, or keep it in the back pocket as a collateral to finance large-scale business activities that you are planning)

Step 3: Quantify the (present) value of each option in terms of money

Step 4: Double check your capability to execute the preferred option and verify the potential risks that might come along with this option

I hope this helps!

Sidi

Clarify the main goal(s) of the friend, e.g. receiving a high return on the land. Does he own it? Where is the land located? What kind of land is it, e.g. pasture, forrest, wasteland?

In general the options would be the following; then evaluate for each the ROI or NPV; check also some restrictions, risks, etc.

1. Do nothing

2. Lease it

3. Do something with the land, e.g. for agriculture or real estate

4. Sell it

Hi, you can find here some other useful examples:

• https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
• https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
• https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
• https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692

Hope it helps,
Antonello

Hello there!

I think you missed the question :)

Best,

Clara