expert
Expert with best answer

Aws

2 Meetings

26 Q&A Upvotes

USD 139 / Coaching

Costs in declining revenue question?

Anonymous A asked on Sep 26, 2019 - 3 answers

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?

(edited)

3 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Aws
Expert
replied on Sep 26, 2019
(-30% PROMOTION!) McKinsey, BCG, Bain exp. as Client (Senior Partners) | 100+ REAL MBB cases | ONLY expert on PL /w Client Exp.
Book a coaching with Aws

2 Meetings

26 Q&A Upvotes

USD 139 / Coaching

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

Udayan
Expert
replied on Oct 01, 2019
Ex McKinsey EM with 7 years of recruiting experience/ received all 3 MBB offers/Real MBB cases
Book a coaching with Udayan

100% Recommendation Rate

22 Meetings

79 Q&A Upvotes

USD 149 / Coaching

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.

Vlad
Expert
replied on Sep 26, 2019
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School
Book a coaching with Vlad

97% Recommendation Rate

364 Meetings

5,229 Q&A Upvotes

USD 229 / Coaching

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

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

Profitability Case

Learn to crack Profitability Framework Consulting Cases, which are the number 1 reason for real consulting projects and hence are an important case type.

Quiz

Related case(s)

Bain case: Asian lubricants producer

Solved 101.3k times
4.7 5 27400
| Rating: (4.7 / 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

DHL Consulting case: Bike Shop

Solved 42.6k times
4.3 5 10932
| Rating: (4.3 / 5.0)

You have been hired to support the owner of a bike-shop as a business consultant. The bike-shop has suffered a significant revenue decline during the last year, and now the owner would like you to assess the situation and options for the way forward. They want to know last year’s profit, i.e. how i ... Open whole case

Bain Case: Old Winery

Solved 38.5k times
4.4 5 1009
| 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

Oliver Wyman case: Setting up a Wine Cellar

Solved 36.3k times
4.3 5 3309
| Rating: (4.3 / 5.0)

I’m thinking about setting up a wine cellar in my basement. The way I see it, shelf space would be divided into two sections: (1) a “drinking” section where I store bottles for my own consumption and (2) an “investment” section where I store bottles that I intend to sell at a profit after they appre ... Open whole case

zeb case: Private Bank Anytown

Solved 20.5k times
3.9 5 4999
| Rating: (3.9 / 5.0)

Private Bank Anytown disposes total assets of approx. EUR 3 bn on December 31, 2014. The growth strategy of the institution determined at the end of 2010, however, has a higher impact on the cost side than on the income side. Aggregated to the return on equity as defined central parameter of the ba ... Open whole case