Solution
Paragraphs highlighted in green indicate diagrams or tables that can be shared in the “Case exhibits” section
Paragraphs highlighted in blue can be verbally communicated to the interviewee
Paragraphs highlighted in orange indicate hints for you how to guide the interviewee through the case
Part 1  Case Opening
After presenting the prompt, wait for the candidate to ask clarifying questions and/or present the structure.
Information to be shared
only under request:
 SmartBridge offers tutoring services for students in Middle and High Schools. It is currently present in 4 major cities in the US, New York, Boston, Los Angeles and San Francisco
 The client is sustainable thanks to government funding and donations, and offers its service for free to the students. The client rents physical spaces where tutors perform teaching for selected candidates
 The goal of the client is to reach a minimum of 1.000 students at risk in the 1st year in Chicago and minimize the monthly cost per student
 The client has a budget constrain of $5M per year to invest in the project
                                                         
Example of an excellent answer (score: 2)
GOAL CLARIFICATION
An excellent candidate would clarify the objective in terms number of students, budget constraints and understand the source of revenues is from donations.
STRUCTURE
A great candidate would include in the analysis the following elements:
 Market potential. The potential of the Chicago area in terms of students at risk. Key elements to derive the market potential are:
 Possible barriers that would not allow to enter the market – eg current legislation
 The size and growth of the market of students at risk
 The concentration of competitors and substitutes in the market
 Client potential. The potential of the client in that market. Key elements to consider are:
 Calculation of the number of students at risk the client may reach, without considering its current operations in other cities
 Positive and negative externalities in terms of additional students that can be reached, related to the presence in other cities
 Capabilities. Analysis of the resources needed for the client to start operations. Key elements to consider are:
 It is possible to satisfy the budget constraint of $5M
 Are there any other relevant resources needed and are they available to the client
 Risks and next steps. Key elements to consider are:
 Implementation of the entry strategy
 Analysis of possible risks that could negatively affect the objective
The candidate may include additional elements, but there should be a rational related to the objective of SmartBridge.
COMMUNICATION
An excellent candidate should present clearly the different areas in a structured way.
Moreover the candidate should clearly present the rational why he/she wants to explore a particular point, connecting the answer to the objective of the client.
                                                         
Suggested score
An excellent candidate should:
 Clarify the goal of the client
 Include the main elements in the structure as presented above
 Communicate the structure in a clear way
Recommended score calculation: starting from 2, decrease the score by 0,5 points down to 0 for any of the following:
 The candidate did not clarify the objective
 The candidate missed point 1, 2 or 3 in the structure (not including risks and next steps is tolerable)
 The candidate included several useless elements in the structure (ie boiling the ocean)
 The candidate communicated the structure in a disorganized way or without a clear connection to the goal

Part 2 – Choice of Suitable Districts
After the presentation of the structure, show the following graph to the candidate, asking which district they believe is the most attractive for the client, based on the goal.
Show Exhibit 1.
"We have some information on the number of students for four districts in Chicago. Based on this graph, which area would be more attractive in terms of the number of students our client could reach? Assume they can enter one district only."
If the candidate did not clarify the goal as 1.000 students in 1 year with a budget of $5M, reveal the information to the interviewee.
The graph does not contain enough information to provide a conclusion. Indeed, the objective of the client is to have at least 1.000 students at risk. The candidate will need information on the percentage of students at risk and the percentage of market share the client may be able to get.
If the candidate cannot think about either the market share or percentage at risk, try to challenge him/her with a question like “Which elements do you think are critical to calculate the number of students our client can really reach?”
After the candidate asked for additional information, present the following table.
Show Exhibit 2.
Once received the table, the candidate should calculate the expected number of students the client may reach in the four districts, to calculate the ones that would meet the objective.
If needed, clarify that the market share refers to the students at risk that SmartBridge can reach.
Following the math computation, the candidate should identify that the districts meeting the goal are A, B and C.
                                                         
Example of an excellent answer (score: 2)
INFORMATION REQUEST
An excellent candidate would ask information on the percentage of students at risk and the expected market share.
MATH STRUCTURE
A great candidate would present the logic of the math before performing the actual math.
The correct formula to use is the following, for each district:
Number of students = (Low performer*Percentage at risk + Average performer*Percentage at risk + High performer*Percentage at risk) * Expected market share
MATH COMPUTATION
An excellent candidate would perform the math correctly, aligning with the interviewer, identifying the districts which allow to reach the target are A, B and C.
Applying the previous formula, the math to perform is the following:
 District A = (14.000*0,4 + 49.000*0,1 + 7.000*0)*0,2 = 10.500*0,2= 2.100
 District B = (35.000*0,3 + 50.000*0,05 + 15.000*0)*0,1 = 13.000*0,1= 1.300
 District C = (11.000*0,5 + 16.500*0,2+ 27.500*0)*0,3 = 8.800*0,3 = 2.640
 District D = (15.000*0,2 + 15.000*0,1 + 45.000*0)*0,15 = 4.500*0,15 = 675
NEXT STEPS
A great candidate would connect the numbers with the client’s goal, saying that the next steps for the winning options would be to identify if the resources available ($5M) are sufficient and use that to identify the ideal districts.
                                                         
Suggested score
An excellent candidate should:
 Ask information on:
 the percentage of students at risk and
 the percentage of relevant market share the client may get
 Present the structure upfront before performing the math
 Correctly calculate the areas with the number of students at risk
 Propose next steps related to the budget – that is, check if Districts A, B and C require more or less of the $5M budget
Recommended score calculation: starting from 2, decrease the score by 0,5 point down to 0 for any of the following:
 The candidate did not ask additional information on market share and/or percentage of students at risk to calculate the target areas
 The candidate did not present a structure before performing the math
 The candidate did mistakes performing the math
 The candidate did not suggest to move to the next steps analyzing the budget available

Part 3 – Budget Analysis
Show the following graph to the candidate, asking the following question:
Show Exhibit 3.
"Which would be the cost per student per month for the options feasible for our client, considering all the costs involved?"
Important: mention to the candidate that the client would have to serve all the students in a district to respect its own regulation.
If the candidate did not think about the constraint of $5M, remind him/her to do so now.
If asked, clarify that the costs refer to serving the students previously calculated in a District.
After completing the computation, District C will result too expensive given the $5M budget of the client. However, a great candidate will notice that not all the costs have been reported. Since our client serves students in facetoface, at least the cost of real estate should be added to the list.
If the candidate doesn’t ask for additional costs, challenge him/her asking “Are you sure you have considered all the costs?”
After the candidate asked for additional information, present the following exhibit.
Show Exhibit 4.
Some candidates will move immediately to the computation of the average cost per student.
However, a great candidate will notice that District A and C are not suitable given the budget of the candidate, since the yearly cost will be above $5M there; moreover District D is not suitable given that we cannot reach 1.000 students there. This means that the computation is needed only for District B, where the monthly cost per student is approximately $258.
If the candidate doesn’t recognize the costs are per month while the budget is per year, help him/her with the following: “Are you sure you are using the correct unit of time?”
                                                         
Example of an excellent answer (score: 2)
INFORMATION REQUEST
An excellent candidate would ask information on the additional costs, at least for real estate.
ELIMINATION OF ALTERNATIVES
A great candidate would identify that District A and C do not respect the $5M budget, and that District D is not suitable given the number of students is too low.
MATH STRUCTURE
An excellent candidate would clearly present the logic of the math before performing the actual math.
The correct formulas to use are the following:
 Total costs: Cost of Equipment + Marketing + Staff + Rent + Other costs
 Cost per student: Total cost / Number of students
MATH COMPUTATION
A great candidate would perform the math correctly, aligning with the interviewer and avoiding computations for options not feasible. Following the previous formula, the math computation is the following:
 Total costs District A: (70K + 35K + 210K + 105K + 40K) *12 = 460K*12 = $5.520K
 Total costs District B: (43K + 22K + 137K + 72K + 62K) *12 = 336K*12 = $4.032K
 Total costs District C: (88K + 44K + 290K + 185K + 110K) *12 = 717K*12 = $8.604K
(Computation for District D is not required, since it doesn’t reach the target of 1.000 students)
 Cost per student District B: 336.000 / 1.300 ≈ $258
NEXT STEPS
An excellent candidate would conclude that with the information achieve so far the best district according to the objective of the client is B and suggest to move to consider the possible next steps to implement the entry.
                                                         
Suggested score
An excellent candidate should:
 Ask information on the additional costs
 Identify District A, C and D are not suitable
 Present the structure upfront before performing the math
 Correctly calculate the average cost per district for District B
 Conclude that District B is the most suitable
Recommended score calculation: starting from 2, decrease the score by 0,5 point down to 0 for any of the following:
 The candidate did not present a structure before performing the math
 The candidate did mistakes performing the math
 The candidate performed calculations not strictly necessary
 The candidate was not proactive in proposing next steps related to District B
If the candidate recognizes that some costs are missing, you may add back 0,5 points up to 2, as this is a good observation that few candidates make.

Part 4 – ELearning Investment Brainstorming
This part should be presented by the interviewer to the candidate directly, even if the interviewer opts for the intervieweeled approach, as there are no previous hints that can bring to it.
"Our client is considering launching an elearning system to simplify the access to students. Which advantages or disadvantages do you see with this option?"
A great candidate should keep in mind the goal of the client is to reach at least 1.000 students with a budget of $5M. Anything that is not related to the goal of the client should therefore not be considered as an advantage or disadvantage. The solution below presents some possible elements to consider in the brainstorming.
After the brainstorming, show Exhibit 5 asking the candidate the following question:
Show Exhibit 5.
"
The following graph shows the increase in the number of students that we could serve and the expected decrease in rent cost thanks to the elearning platform. The graph is divided in ranges of 6 months.
The IT investment required is $2M. Assuming the government will subsidize 30% of the IT investment, would it be feasible for the client to launch the elearning platform within the next year?”
Note that the information on the number of students is irrelevant given the question, as this is about the feasibility of the investment.
The candidate should identify that although the volume of students will increase, the investment will bring the total costs above the budget of the client in the first 12 months, thus the investment is not feasible. Once answered, ask the candidate the following.
"The client is wondering how they could be able to make the investment feasible with the current constraints. What would you suggest?"
Note: if the candidate is unable to identify that the investment doesn’t make sense, help him/her to understand where the mistake is.
The candidate should present a structured approach considering at least 3 of the 4 options available, related to:
 Decreasing the investment
 Negotiating a higher subsidy
 Increasing the savings from the elearning
 Increasing the budget
 Decrease other costs
                                                         
An optional difficult question is the following (ask it only if there are at least 5 minutes left to complete the case or if you want to challenge a particularly good candidate):
"Can you quantify the exact amount needed for each option to make the elearning investment feasible?"
                                                         
Example of an excellent answer (score: 2)
PLUS AND MINUS OF THE INVESTMENT
An excellent candidate would identify at least 6 reasons. Possible answers are the following:
Number of students
 Plus
 Increase the number of students involved in District B
 Expand outside District B
 Create marketing opportunities for friends of friends (eg via social media)
 Simplify the onboarding process, increasing the number of attendants
 Differentiate against competitors, possibly stealing market share
 Minus
 Create risk of churn of students due to lack of contact or perceived inferior quality, affecting the brand of SmartBridge
 Create risk of cannibalization of traditional facetoface activity
 Create bottlenecks due to lack of resources to manage the new IT infrastructure, leading to fewer students than estimated and affecting the brand of SmartBridge
Budget
 Plus
 Decrease future costs for rent, equipment and possibly staff
 Minus
 Surpass the budget for the first year due to initial investment
 Surpass the budget for the first year due to ongoing costs
MATH STRUCTURE
A great candidate would clearly present the logic of the math before performing the actual math.
An ideal structure to compare the new cost with the available budget is the following:
 New cost = Investment*Percentage to be paid by client – Savings in months 06 – Savings in months 612
 Available budget = Total budget – Old yearly cost estimate District B
MATH COMPUTATION
An excellent candidate would perform the math correctly, aligning with the interviewer, identifying that the investment is not sustainable.
From Exhibit 4, the current rent is equal to $72K. With the investment, the new rent would be $62K in months 06 and $52K in months 612.
As a consequence, the saving per month in the first 6 months will be $10K and in the second 6 months $20K.
Applying the previous formula, we get:
Since the new cost is above the available budget by $252K, the investment cannot be performed.
(Note that the information on the old yearly cost  $4.032K  should have been calculated already in Part 3).
OPTIONS TO MAKE THE ELEARNING FEASIBLE
An excellent candidate would identify at least 3 of the following options:

Identify additional cost savings

Decrease the IT investment

Negotiate a higher subsidy with the government

Increase the budget available

Decrease any other cost affecting the budget
In case you want to challenge the candidate with the difficult questions, he/she should quantify the following:
 Identify additional cost savings by at least $252K in the following 12 months
 Reason: as calculated before, the difference between the remaining budget ($968K) and the cost ($1.220K) is $252K. Thus if we decrease costs by $252K we can match the goal.
 Decrease the IT investment by at least $360K
 Reason: the IT investment that would be sustainable can be calculated as follows:
 Feasible investment = (Available budget + Savings in months 06 + Savings in months 612)/ Percentage to be paid by client) = (968K+60K+120K)/0.7 = $1.640K
 Since the current investment is $2.000K, the decrease is $360K.
 Negotiate a higher subsidy with the government of at least 43%
 Reason: the percentage of subsidy can be calculated as follows:
 Percentage to be paid by client = (Available budget + Savings in months 06 + Savings in months 612)/ Investment) = (968K+60K+120K)/2000K = 57.4%
 Thus the new subsidy should be 43%
 Increase the budget available in 12 months to at least $5.252K
 Reason: as calculated before, the difference between the remaining budget ($968K) and the cost ($1.220K) is $252K. Thus if we increase the budget from $5.000K to $5.252K we can match the goal.
 Decrease any other cost affecting the budget by at least $252K
 Reason: as calculated before, the difference between the remaining budget ($968K) and the cost ($1.220K) is $252K. Thus if we decrease costs by $252K we can match the goal.
                                                         
Suggested score
An excellent candidate should:
 Identify at least 6 advantages/disadvantages of the IT investment only related to the objective (number of students and budget)
 Identify the equation to calculate whether the investment make sense
 Present the structure upfront before performing the math
 Correctly calculate that the investment is not convenient as will exceed the budget
 Brainstorm at least 3 ways to make the investment feasible
Recommended score calculation: starting from 2, decrease the score by 0,5 point down to 0 for any of the following:
 The candidate did not provide at least 6 advantages or disadvantages for the IT investment related to the number of students and budget
 The candidate did not present a structure before performing the math
 The candidate did mistakes performing the math
 The candidate did not brainstorm at least 3 options to make the IT investment sustainable

Part 5 – Conclusion
"You have one minute to present your findings to the CEO. What are you going to say?"
                                                         
Example of an excellent answer (score: 2)
RECAP OF THE OBJECTIVE
An excellent candidate would start with a small recap of the objective:
"Our client asked us to understand if it would make sense to start to operate in Chicago, given our goal of 1.000 students and $5M budget, minimizing the monthly cost per student"
CONCLUSION
A great candidate would provide and answerfirst approach to the question asked.
"We would recommend to enter the Chicago market, specifically in District B, without the elearning investment. The reasons for this are the following:
 We will be able to serve 1.300 students, 300 above our target goal
 We will be able to meet the budget, as the investment required is only $4.032K
 The elearning investment would require an additional $252K above the budget, thus won't be currently feasible"
NEXT STEPS AND RISKS
An excellent candidate would mention risks and next steps to take:
"We would recommend to develop an implementation plan for the launch, evaluating possible risks to surpass the budget or reach fewer students.
Potentially, we may also explore whether we could make the IT investment feasible in the near future, which would allow to reach additional students, helping the client in its mission."
                                                         
Suggested score
An excellent candidate should:
 Recap the objective of the case
 Explain the client should enter District B and the elearning investment is not sustainable at the moment
 Propose next steps on an implementation plan, risk analysis and elearning investment
Recommended score calculation: starting from 2, decrease the score by 0,5 point down to 0 for any of the following:
 The candidate did not have an answerfirst approach and presented the conclusion in a disorganized way
 The candidate did not cover the reasons for the decision for both the number of students and budget
 The candidate did not have next steps and/or risks as part of the recommendation
 The candidate spent more than 1,5 minutes to deliver the recommendation

Final Remarks
Thanks for completing the case!
Do you have any feedback or questions on the case or on your preparation?
Then you can click on the link below, click on the arrow near “Book a coaching” and click on “Send a message”, I will reply within 12 hours.
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Best,
Francesco