Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Vlad

98% Recommendation Rate

413 Meetings

11,461 Q&A Upvotes

USD 239 / Coaching

1

How to structure the case: Should we close a location?

Hi everyone,

I recently started to practice case studies and saw two cases with the question "should company XY open a new location in ...?"

So i thought about the opposite case but could not find any specific case study on this:

"Should company XY close a location in ...?"

I was wondering how to strucutre this kind of question? I would have done it like this, maybe you have some thoughts or insights regarding the structure:

After some initial questions I would start by telling the interviewer that I would do a quantitative analyisi first, followed by a quantitative analysis.

For the qualitiative analysis I would look at the current revenue and cost from the location to find our if we are still making profit or if we are loosing money in this location.

If we are still making profit I would ask why the location should be closed and if we are loosing money, I would look at what changed in the last years. Maybe a competitor entered and we had to drop our prices to compete with them or resources got more expensive and our variable costs increased.

After understading the hard facts, I would look at the more qualitiative part and show pros and cons of closing the location like: Con: Longer transportation to the customer.

Those are just some ideas I had how to strucutre such a case, but it feels like it could be improved a lot. Since I am at the beginning of my case study preparation I would be thankful for any help.

Thanks

Hi everyone,

I recently started to practice case studies and saw two cases with the question "should company XY open a new location in ...?"

So i thought about the opposite case but could not find any specific case study on this:

"Should company XY close a location in ...?"

I was wondering how to strucutre this kind of question? I would have done it like this, maybe you have some thoughts or insights regarding the structure:

After some initial questions I would start by telling the interviewer that I would do a quantitative analyisi first, followed by a quantitative analysis.

For the qualitiative analysis I would look at the current revenue and cost from the location to find our if we are still making profit or if we are loosing money in this location.

If we are still making profit I would ask why the location should be closed and if we are loosing money, I would look at what changed in the last years. Maybe a competitor entered and we had to drop our prices to compete with them or resources got more expensive and our variable costs increased.

After understading the hard facts, I would look at the more qualitiative part and show pros and cons of closing the location like: Con: Longer transportation to the customer.

Those are just some ideas I had how to strucutre such a case, but it feels like it could be improved a lot. Since I am at the beginning of my case study preparation I would be thankful for any help.

Thanks

1 answer

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

98% Recommendation Rate

413 Meetings

11,461 Q&A Upvotes

USD 239 / Coaching

Hi!

I would start a bit more high-level here. Before I come to shut down the business location I would try to analyze the business:

1) Analyze the business and the options fix it:

  • Profits
  • Revenue / cost problem
  • Revenue -> Market / market share problem
  • Costs -> Fixed / variable

2) Analyze the additional opportunities if can't fix the problem:

  • Adjusting current product / improving the value proposition
  • Launching the new products
  • Entering the new segments (customer, etc)
  • Building new capabilities (Distribution, supply, assets, knowledge, etc)

3) How to shut down the location if needed?

  • Costs and benefits of shut down
  • Time to shut down
  • The exit value of the business / Fair value of assets
  • Key capabilities to maintain (Distribution, supply, assets, knowledge, etc)

Best!

Hi!

I would start a bit more high-level here. Before I come to shut down the business location I would try to analyze the business:

1) Analyze the business and the options fix it:

  • Profits
  • Revenue / cost problem
  • Revenue -> Market / market share problem
  • Costs -> Fixed / variable

2) Analyze the additional opportunities if can't fix the problem:

  • Adjusting current product / improving the value proposition
  • Launching the new products
  • Entering the new segments (customer, etc)
  • Building new capabilities (Distribution, supply, assets, knowledge, etc)

3) How to shut down the location if needed?

  • Costs and benefits of shut down
  • Time to shut down
  • The exit value of the business / Fair value of assets
  • Key capabilities to maintain (Distribution, supply, assets, knowledge, etc)

Best!

Related case(s)

MBB Final Round Case - Smart Education

Solved 18.6k times
MBB Final Round Case - Smart Education Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvantaged areas. The client is considering starting operations for its services in the Chicago area. They hired us to understand if that makes sense. Due to the nonprofit regulation, SmartBridge should operate on its own in the market, without any partnership. How would you help our client?
4.6 5 648
| Rating: (4.6 / 5.0)

Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvant ... Open whole case

Espresso, Whatelse?

Solved 11.1k times
Espresso, Whatelse? Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin. Your client wants to understand the root causes of this 2019 trend and how to increase its profit margin again.  
4.6 5 552
| Rating: (4.6 / 5.0)

Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin. Your client wants to understand ... Open whole case

MBB Case: COVID-19 Vaccine

Solved 6.2k times
MBB Case: COVID-19 Vaccine The COVID-19 pandemic has killed millions of people worldwide and led to devastating economic impact. A vaccine is one of the biggest hopes for stopping the pandemic.  The World Health Organization (WHO) is working with multiple stakeholders to ensure groups at higher risk of becoming infected and dying (e.g. elderly people and healthcare workers) receive a safe an effective COVID-19 vaccine in the next six months. The WHO’s Director-General asked your help to build a plan to achieve this goal. What should be included in this plan?
4.6 5 296
| Rating: (4.6 / 5.0)

The COVID-19 pandemic has killed millions of people worldwide and led to devastating economic impact. A vaccine is one of the biggest hopes for stopping the pandemic. The World Health Organization (WHO) is working with multiple stakeholders to ensure groups at higher risk of becoming infected and ... Open whole case

Hot Wheels

Solved 5.8k times
Hot Wheels Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability.
4.6 5 304
| Rating: (4.6 / 5.0)

Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability. Open whole case

Chinese Chess - Airline Business During COVID-19

Solved 4.2k times
Chinese Chess - Airline Business During COVID-19 Sky China, a government-backed Chinese airline, has recently seen profits plummet due to COVID-19. Profits are down 80% in the months of February and March, but are showing early signs of a rebound in April.  They've brought you in to first investigate what can be done immediatedly to prevent hemorrhaging cash and surive in the short-term. They are also looking to see how the current situation can be viewed as an opportunity, and what can be done to prepare for the future. 
4.3 5 121
| Rating: (4.3 / 5.0)

Sky China, a government-backed Chinese airline, has recently seen profits plummet due to COVID-19. Profits are down 80% in the months of February and March, but are showing early signs of a rebound in April. They've brought you in to first investigate what can be done immediatedly to prevent hemor ... Open whole case