We are a profitable American provider of fire and water remediation services. We are generally hired by insurance companies to provide cleaning services in the wake of burning and flooding damages. We we would like your counsel on whether to enter the growing USA traditional residential cleaning market or not. Traditional housecleaning usually takes place 2-3 times per month.
The case is designed to be presented to the candidate by an interviewer, who plays the role of a representative of an American provider of fire and water remediation services.
The firm should enter the US household cleaning market.
The interviewee should perform a back-of-envelope calculation which answers two key questions:
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If asked about competition, provide the following information to the candidate:
If asked about customers, provide the following information to the candidate:
If asked about profitability, provide the following information to the candidate:
Provide the following information, if requested
The market is large and looks attractive; the client also has transferable skills and contacts.
We can do a preliminary margin analysis:
[$60 price] - [4 hours * $10 hourly labor costs] - [$5 cleaning materials costs] = $15
Profit margin = 15/60 or 25% profit margin
Important things to do before entering the market:
The size of the US household cleaning market is $50 billion; it is large and attractive (25% margin). Therefore the client should enter the market.
If the interviewee solves the case very quickly, you can come up with more challenging questions.
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Get an overview over a company’s customers, competition, cost and capabilities by conducting a 4 C analysis in your case interviews
3 Comment(s)Investments or single business cases need to be evaluated based on a certain set of criteria. Since financial performance is the key criterion in most cases you need to have an idea about future financial impacts. A key tool to asses this impact is the cost-benefit analysis which is used to determine the net effect of potential revenues and costs.
4 Comment(s)It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.
9 Comment(s)The income statement, also known as profit and loss statement, is a summary of the revenue and costs over the last year. Costs are subtracted from revenue and as a result, either positive or negative net income is generated. The income statement belongs to the three financial statements together with the balance sheet and cash flow statement.
2 Comment(s)Market Sizing Cases are used to test your quantitative and reasoning skills. The interviewer evaluates your structure, numbers-handling and business sense.
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