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

Andrea

99% Recommendation Rate

147 Meetings

863 Q&A Upvotes

USD 269 / Coaching

5

Is ok to systematically ask question to clarify the business model? Especially for Profitability cases

There are many cases where man is not familiar at all with the business model. Epecially for profitability cases where it is important to know if there is a mix in order to properly tailor his framework. Is it ok for Mckinsey type interview to ask a clarification question upfront about the business model? The # segments? If yes what is the most elegant way to do it? Would you advise to systematically ask this question for all cases?

There are many cases where man is not familiar at all with the business model. Epecially for profitability cases where it is important to know if there is a mix in order to properly tailor his framework. Is it ok for Mckinsey type interview to ask a clarification question upfront about the business model? The # segments? If yes what is the most elegant way to do it? Would you advise to systematically ask this question for all cases?

5 answers

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

99% Recommendation Rate

147 Meetings

863 Q&A Upvotes

USD 269 / Coaching

Yes, as highlighted, not asking this might be an hindrance to the development of a customized framework and hence resolution of the case. The way I would phrase such a question would be (let's take credit card as an example) "My knowledge of this sector is purely from a consumer perspective, so wanted to check with you whether my understanding of revenue strams of credit card companies is accurate and complete: the two main revenue sources I am aware of are interest on outstanding balances and transaction fees, anything else?" (in this case interviewer might say that annual fees can be also a factor since they can be up to $500-1,000 for premium cards).

Hope it helps,

Andrea

Yes, as highlighted, not asking this might be an hindrance to the development of a customized framework and hence resolution of the case. The way I would phrase such a question would be (let's take credit card as an example) "My knowledge of this sector is purely from a consumer perspective, so wanted to check with you whether my understanding of revenue strams of credit card companies is accurate and complete: the two main revenue sources I am aware of are interest on outstanding balances and transaction fees, anything else?" (in this case interviewer might say that annual fees can be also a factor since they can be up to $500-1,000 for premium cards).

Hope it helps,

Andrea

Thanks Andrea. It definitely helps — Stephane on Feb 28, 2018

Hey Stephane,

For McK (and the rest in general) is not always fine but highly recommend that you clarify everything in your mind before jumping into the framework - that include for example understanding the overall problem of the company, their goal and their business model (that said, you need to use some basic common sense: if we were doing a case about a basic supermarket and you ask me how do they make money I’ll be negatively impressed by that question; however, if you ask what are their distribution channels that would be ok and interesting)

best

Bruno

Hey Stephane,

For McK (and the rest in general) is not always fine but highly recommend that you clarify everything in your mind before jumping into the framework - that include for example understanding the overall problem of the company, their goal and their business model (that said, you need to use some basic common sense: if we were doing a case about a basic supermarket and you ask me how do they make money I’ll be negatively impressed by that question; however, if you ask what are their distribution channels that would be ok and interesting)

best

Bruno

Bruno, thanks for the clarification. — Stephane on Feb 28, 2018

Book a coaching with Vlad

97% Recommendation Rate

413 Meetings

11,459 Q&A Upvotes

USD 239 / Coaching

Hi,

You absolutely should clarify the business model. Often even if it seems that you just a bit misunderstood the model

I recommend asking two questions in one: How does the business work and what are the revenue streams? Why do you need to know the revenue streams? Because it's one of the most critical pieces in understanding the business model. An example is Oil&Gas with up-, mid- and down- streams that are completely different businesses. This is also the most common pitfall in profitability cases (the 2nd pitfall is the Mix)

Other questions to ask in the beginning of the case are:

1) Clarify the objective. Here make sure that your goal is:

  • Measurable
  • Has a time-framed
  • Has / has no limitations

e.g. Should I invest 100k in this business for 1 year if I want to get 15% return?

2) Ask the questions that will help you build a relevant structure and remove ambiguity.

And remember, all these questions serve one purpose - making a good structure!

Best,

Vlad

Hi,

You absolutely should clarify the business model. Often even if it seems that you just a bit misunderstood the model

I recommend asking two questions in one: How does the business work and what are the revenue streams? Why do you need to know the revenue streams? Because it's one of the most critical pieces in understanding the business model. An example is Oil&Gas with up-, mid- and down- streams that are completely different businesses. This is also the most common pitfall in profitability cases (the 2nd pitfall is the Mix)

Other questions to ask in the beginning of the case are:

1) Clarify the objective. Here make sure that your goal is:

  • Measurable
  • Has a time-framed
  • Has / has no limitations

e.g. Should I invest 100k in this business for 1 year if I want to get 15% return?

2) Ask the questions that will help you build a relevant structure and remove ambiguity.

And remember, all these questions serve one purpose - making a good structure!

Best,

Vlad

(edited)

Dear A,

You HAVE to clarify the business model and also other questions that strengthen your understanding of the company.

Asking about segmentation is also ok, as well as about objective.

Better to make it before you outline your structure.

Hope it helps,

André

Dear A,

You HAVE to clarify the business model and also other questions that strengthen your understanding of the company.

Asking about segmentation is also ok, as well as about objective.

Better to make it before you outline your structure.

Hope it helps,

André

Book a coaching with Francesco

100% Recommendation Rate

3,469 Meetings

16,954 Q&A Upvotes

USD 449 / Coaching

Hi Stephane,

I agree with the previous comments. More specifically:

  • Definitely ok to ask for the business model
  • Segmentation is also ok, although you may also present it in the structure
  • As Vlad mentioned, clarify the objective is a must

In general, that’s not true only for McKinsey, but for all the companies.

Best,
Francesco

Hi Stephane,

I agree with the previous comments. More specifically:

  • Definitely ok to ask for the business model
  • Segmentation is also ok, although you may also present it in the structure
  • As Vlad mentioned, clarify the objective is a must

In general, that’s not true only for McKinsey, but for all the companies.

Best,
Francesco

Related case(s)

MBB Final Round Case - Smart Education

Solved 18.5k 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 5 647
| 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

Bain 1st Round Case – BlissOttica

Solved 2.6k times
Bain 1st Round Case – BlissOttica Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client?
4.3 5 126
| Rating: (4.3 / 5.0)

Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client? Open whole case

Merger of two beer manufacturers

Solved < 100 times
Merger of two beer manufacturers Our clients are two beer manufacturers from a well-developed country who just decided to merge. We can call them Company A and Company B. The decision about the merger has already been taken and our clients are certain it will soon be approved by regulators. What is expected from you is to help them with two objectives: Firstly, they would like you to help them decrease the costs of their post-merger operations. Secondly, they would like you to help them develop a new marketing strategy. How would you like to go about helping our clients?
0.0 5 0
| Rating: (0.0 / 5.0)

Our clients are two beer manufacturers from a well-developed country who just decided to merge. We can call them Company A and Company B. The decision about the merger has already been taken and our clients are certain it will soon be approved by regulators. What is expected from you is to help the ... Open whole case