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.
As you describe it, this is the longest version of this case format; normally too long for an oral interview, so it's super important to listen whether the question is about if (the client should ente... (more)
Hi there, I would start by asking some general questions to have a better feeling on the case: 1) Does our client provides this new service elsewhere? If not, does our client already has the cap... (more)
If I understand your questions correctly, you are trying to figure out the difference between analyzing the overall market (or an industry), vs. the subsections of the market that a particular company... (more)
Hey Philip, There are for sure several ways of estimating that number, but a quick top down approach can be resumed in 3 steps 1. Estimate the total population of the US: ~300M (I guess it's alrea... (more)
Hi Anonymous, this is how I would structure a market entry analysis: 1) Goal clarification. It is always good to start with the end in mind – thus what is the specific reason why you want to ent... (more)
In order to get into consulting, the case study is the most important element of the interview. Here, you can learn the specific skills and concepts to solve them.
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