Get Active in Our Amazing Community of Over 450,000 Peers!

Schedule mock interviews on the Meeting Board, join the latest community discussions in our Consulting Q&A and find like-minded Case Partners to connect and practice with!

Is it sufficient to conclude a company's weakness has caused a consistent drop in volume for 3 years??

office vending services
New answer on Mar 23, 2020
2 Answers
Anonymous A asked on Feb 29, 2020

I have some questions about this case: office vending services (p.6).

Would really appreciate some advice:

[Case background]

Client profitability dropped consecutively 3 years, due to volume drop.

At the same time, competitors volume is increasing.

In a customer survey, we know that end users care about price and delivery reliability,

but our client is having a disadvantage in these two areas while competitors are strong in these two areas.

Q1. After learning that client is having a disadvantage in these two areas while competitors are strong in these two areas,

I tried to explore more details about the delivery reliability, to understand what has caused this issue.

My thought was there might be some specific issues causing the delivery reliability, so I started asking about the delivery process (where I was stuck).

In the case, the relevant information is actually about the cost structure, as we can see the delivery fee was dropping and the client was doing cost-cutting.

However, I find it hard to come up with the idea of asking for "cost structure".

What would be some good question to ask (or data to seek) as a next step?

Should I try to find a root cause causing the bad delivery quality, or I should start brainstorming ways to improve the delivery quality?

Q2.In the case books' answer, it assumed that "client is facing a volume drop because the price is not competitive and delivery reliability is not good".

However, I don't think this result is solid enough,

since the volume has been dropping for 3 years consecutively, but the customer survey shows only the latest result.

I feel that even if price/delivery reliability is client's weakness, it is not "sufficient" enough to prove this led to volume decrease for 3 years.

I tried to ask for extra data such as 3-year change in price and 3 year data of customer's perception change of clients delivery reliability. But there is no extra information.

Is it actually sufficient to make the assumption mentioned above (delivery quality/price caused a volume drop for 3 years) ?

What would be some good questions to clarify with the interviewer on whether its okay to make this assumption?

Overview of answers

  • Upvotes
  • Date ascending
  • Date descending
Anonymous replied on Mar 23, 2020


Hope your preparation is going well. Concerning your questions, here some observations.

Q1: I am not sure with which sequence you get the exhibits and if you get them all at the same time, but as soon as you get to know that price and delivery are the two most important aspects for clients, then I would deep dive into how OVS does vs. competitors in those respects.

At this point you get told that OVS performs worse in delivery than competitors. At this point, you should ask why. As you know that OVS has been cutting costs, then you should ask whether delivery-connected costs have been also touched (e.g. have they fired delivery employees, have they reduced their fleet, etc.). The answer would be yes, therefore you can start hypnotising that maybe the cost cut has worsened delivery performance. At this point you can ask for a cost comparison with competitors.

So, once you know where OVS is performing worse than competitors, I think it is easier to ask for a cost breakdown. If you still didn’t know that delivery is where OVS performs worse, you could always start assuming that maybe the cost cut has touched some critical company activity, does making it unable to carry out its job properly. From this assumption you can ask for a cost breakdown and for a clarification on what are the most important activities for an office vending service operator.

Before brainstorming possible solutions to bad delivery you should find possible root causes. You might want to list some possibilities, e.g. too few employees to serve the demand, bad scheduling/logistics management, sufficient employees, but insufficient vehicles, no-decentralization of service, etc.

Q2: Based on the information you have at disposal; I think you can only conclude that the main problem is bad delivery. However, you could also add some flavour to your conclusion, mentioning which other aspects of the situation you would investigate and ask if you can have some information about these topics.

In your communication with the interviewer you could say something like: “Based on the evidence I have so far, I assume that the main factor causing a drop in sales is delivery. However, I would also investigate other options such as….. Do we have some information about... (topic you want to investigate)

Hope this helps!



Was this answer helpful?
replied on Mar 23, 2020
McKinsey Junior Associate

Hi Anon,

I think you're thinking about the question in the right way, but perhaps your questions were slightly too specific. I would start with more open-ended questions e.g.

"How does our value proposition compare with our largest competitors?"

"How does our delivery time compare to competitors?"

Asking for specific price change numbers or customer perception may be too narrow a way to enquire.

To answer your second point, I don't think the upfront information is enough to make robust assumptions about the cause of volume drop - you're right to keep probing about causes.



Was this answer helpful?
How likely are you to recommend us to a friend or fellow student?
0 = Not likely
10 = Very likely