expert
Expert with best answer

Vlad

97% Recommendation Rate

379 Meetings

5,963 Q&A Upvotes

USD 189 / Coaching

2

D is correct. Why is C not the best answer? It directly mentions the outcome ("stronger growth"); A, B, D don't.

McKinsey PST question

McKinsey PST question

This is from McKinsey PST A 2012. Not much else context needed I think (RentEstate is in the business of developing and acquiring high-quality apartment communities, and renting these apartments to individual renters.) — Anonymous A on Jan 27, 2020 (edited)

2 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Vlad

97% Recommendation Rate

379 Meetings

5,963 Q&A Upvotes

USD 189 / Coaching

Hi,

Answer D is the right one. You can cross-sell to the existing customers, and thus:

  • You will have no extra customer acquisition costs, and existing CAC will be spread over more revenues
  • Your lifetime value of the customer will increase since you can sell more to the same customers

Best

Hi,

Answer D is the right one. You can cross-sell to the existing customers, and thus:

  • You will have no extra customer acquisition costs, and existing CAC will be spread over more revenues
  • Your lifetime value of the customer will increase since you can sell more to the same customers

Best

(edited)

Thanks for the answer, Vlad. Shouldn't the best argument in favor of pursuing the new opportunity be the direct answer of "it will definitely lead to stronger growth in the future" (outcome, C) rather than "the conditions for stronger growth are given" (opportunity, implied in D)? — Anonymous on Jan 28, 2020 (edited)

Book a coaching with Udayan

100% Recommendation Rate

40 Meetings

181 Q&A Upvotes

USD 179 / Coaching

D is the correct answer because

1. It implies that you already have the customer base in your portfolio and assuming they trust you it is a strong captive market that others don't have access to (competitive advantage)

2. It explains the reasoning for why it is a good reason to expand into sales

C is not a good reasons because

1. It does not tell you why diversification will lead to stronger growth (diversification in and of itself is not an argument for growth. If that were the case all companies would have multiple areas of focus and not just one)

2. It does not ecplain where the stronger growth will come from (who will the new customers be? How will we attract them? etc.)

Best,

Udayan

D is the correct answer because

1. It implies that you already have the customer base in your portfolio and assuming they trust you it is a strong captive market that others don't have access to (competitive advantage)

2. It explains the reasoning for why it is a good reason to expand into sales

C is not a good reasons because

1. It does not tell you why diversification will lead to stronger growth (diversification in and of itself is not an argument for growth. If that were the case all companies would have multiple areas of focus and not just one)

2. It does not ecplain where the stronger growth will come from (who will the new customers be? How will we attract them? etc.)

Best,

Udayan

(edited)

Related BootCamp article(s)

Which companies are currently using written tests ?

All major firms like McKinsey, BCG and Bain use tests to assess a candidate's analytical skills. However the design of those tests can differ a lot.

Written tests such as the PSTs

Top tier consulting firms have started using PSTs to test for in-depth analytical skills needed to be successful as a consultant on a day-to-day basis.

How to Read Charts and Data in Case Interviews

We explain and give tips on how to understand and analyze graphs, charts and data presented by interviewer to candidates in case interviews.

Quiz

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

Related case(s)

McKinsey Questions

Solved 35.2k times
McKinsey Questions Tell me of a situation where you had an opinion and no one seemed to agree with you. What was your goal when you decided to join university / work / clubs / a sports team? Did you have a goal that you were not able to reach? What did you do? What do you want to be remembered for and how are you achieving it? What is your typical way of dealing with conflict?
4.5 5 843
| Rating: (4.5 / 5.0) |
Difficulty: Intermediate | Style: Fit interview | Topics: Personal fit

Tell me of a situation where you had an opinion and no one seemed to agree with you. What was your goal when you decided to join university / work / clubs / a sports team? Did you have a goal that you were not able to reach? What did you do? What do you want to be remembered for and how are you ... Open whole case