Tech. Company Strategy Analyst Case

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New answer on Jun 30, 2020
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Anonymous A asked on Feb 19, 2020

Hi All,

I've been working on a case for a impending interview to present very shortly. The company presented me with a relatively small data set (17 columns x 18 rows). The question, likely on purpose does not fit within one clear framework. Without providing too much detail - decide where our company should build a new office. The prompt states they value access to engineering & sales talent, (numbers they provide to me over three years) then less so they value the ability to gain significant market share in that city.

Data presented gives me projected headcounts of sales & engineers on LinkedIn in each city, % college graduate rate, total # employed in high-tech software, competitor offices, average engineer and sales salary, then $/per square foot of rental space, average vacancy, corp. tax rate, 12 month recurring rev. and TAM (all in each city). My thought process is weight each component they value (1.access to talent, 2. ability to gain market share, 3. cost). Seems like a general Business Problem framework, perhaps supply demand, however I'm not entirely sure.

Any suggestions on how best approach the case and provide recommendation on where company should build their newest office?

Thanks for any help

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Daniel
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replied on Feb 19, 2020
McKinsey / ex-Interviewer at McKinsey / I will coach you to rock those interviews

if they provide you with the info how they value what, weighting those parameters by their value is definitely a very good approach to take.

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Tyler on Feb 20, 2020

Thanks Daniel. This was my initial thinking. However, in the prompt they only state they wish to choose the city based on access to talent and secondly ability to gain market share in that area. I have supply data on talent and demand data. They also give me average salary of engineers and sales person within each city. Along with rental space by square foot, vacancy of buildings, TAM in that city, recurring revenue in that city and corporate tax rate. Although the prompt only specified they value access to talent and ability to gain market share (lesser so), I feel leaving out cost of labor and tenancy and tax out of my recommendation may be a misstep. What do you think?

Anonymous replied on Jun 30, 2020

This is another good example of solving a case doesn't always require a typical framework.
Yet, this case is actually very structured. It boils down to comparing the options (potential cities) side by side along those key dimensions. Agree with weighting.

2 points to note though:

(1) instead of ability to gain market share in a city, suggest to also consider the total market size they can achieve. Because 90% market share in a market of $1Million is not necessarily better than 50% market share in a market of $100M.

(2) Even though only talent and market share is mentioned in prompt, it makes sense to also consider costs. You can assign more weights to the first two, and when you present you can also clarify that you thought about the prompt, but you think with costs it makes a more holistic picture.

Best

Emily

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Antonello
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replied on Feb 29, 2020
McKinsey | MBA professor for consulting interviews

Weighting the main KPI is a good approach to transform a complex decision in a quantitative one.

Best,
Antonello

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Ian
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replied on Feb 23, 2020
MBB | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hmmm, when weighting, just make sure you don't lose your analysis.

So, when starting out with your presentation, make sure to highlight first the strongest places for engineering and sales talent.

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Clara
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replied on Feb 20, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

I agree with your approach of assigning a weight to each variable and have like this an "objective" procedure for decision-making.

However, I would not stop there and suggest, on top, couple other alternatives in case the client does not like this approach (e.g., using the data you were giving for forecasting both sales and people you will be needing to cover them, etc.)

Hope it helps!

Cheers,
Clara

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Daniel gave the best answer

Daniel

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McKinsey / ex-Interviewer at McKinsey / I will coach you to rock those interviews
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