Costs in declining revenue question?

Bain BCG caseinterview casequestion MBB McKinsey New profitability revenue
New answer on Oct 01, 2019
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Anonymous A asked on Sep 26, 2019

If the case question asks about investigating the cause of declining revenue (without any mention of profits), is it advisable to look at costs in the structure or ask for costs during the case? I have come across some cases where it is impossible to arrive at an answer without exploring costs, but would mentioning costs seem to show that one does not have a sound understanding of revenue and profits?

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Aws
Expert
replied on Sep 26, 2019
Senior Consultant @ Google | McKinsey, BCG, Bain exp. as Client | 100+ REAL MBB cases

Hi A,

First, clarify the objective clearly upfront. Does the client only care about revenue or also profit?

If the case is focused on only revenues, focus only on that. You can say to the interviewer, "I suggest we look at the revenues first and see what opportunities we have there. Afterwards, if we have time, we can explore costs as well. Does this sound like a good plan?"

Does this help?

Best, Aws

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Udayan
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replied on Oct 01, 2019
Top rated MBB coach with many offers /Ex McKinsey EM in New York /6 years McKinsey recruiting experience/Real cases

As a follow up to the answers below, I want to stress that it is always better to ask a well thought through question (e.g., I have explored x factors around revenue, can you tell me if there is something I may be missing? or perhaps I think I have explored all factors around revenues, are costs also relevant to this problem?) rather than going down a path you are unsure of.

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Vlad
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replied on Sep 26, 2019
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

Usually you break down the costs into fixed and varibale while initially structuring and go through the detailed cost structure while solving the case

Best

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Aws gave the best answer

Aws

Senior Consultant @ Google | McKinsey, BCG, Bain exp. as Client | 100+ REAL MBB cases
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