Crack the Case. D. Ohrvall

Re-routers and Heavy Lifting

Re-routers

Questions To Keep Things On Track

Pack: 006 page 21 of 30

Interviewer Feedback

Pack: 006 page 22 of 30

6. You drove the case.

12

Clearly in control, you took the case to a conclusion

Analytics

7. You analyzed the data well on a piece by piece basis.

8. You integrated data well and reached insights (saw the big picture).

Recommendation

9. Your final recommendation was to the point and data driven.

10. You were persuasive in making your final points.

Total Score:

(10-60)

Before giving your score, have the candidate do the Self Assessment at the back of the case pack. What can you tell the candidate that will help him or her prioritize his prep going forward?

Candidate Review Sheets

Pack: 006 page 23 of 30

MVM™

Zone 5

S P E2 C I A L T

Candidate Review Sheets

Pack: 006 page 24 of 30

Good

OK

Weak

“Since Noble Line Travel wants to increase profit, I want to review both revenue and costs to determine which one will give us the most bottomline impact. If it is revenue, I’ll want to explore new ways to increase business, looking to customers and competitors for clues. If it is costs, we’ll need to see what can be done feasibly to reduce them. I would like to begin with any revenue data you have, unless you would prefer that we discuss another area first.”

(You stayed focused on profit maximization and let me know you understand all the levers that matter in a case like this.)

“Profit maximization is simple: revenue minus costs. There are so many factors changing right now in this industry that increasing revenue will be kind of tough, but of course we’ll have to see what the data says. Also, I would like to better understand what competitors are doing and whether there are any additional barriers in the industry. Do you have any revenue information?”

(I know from the first sentence that you understand profit maximization, but don’t solve the case yet by saying that “increasing revenue will be tough.” Let’s see what the data says first.)

“Everyone knows that this is not the time to increase the top line in the travel industry. So to maximize profit I want to look at Noble Line Travel’s cost structure. Do you have any data on it?”

(Oh boy, you’re going to be hard to redirect. You are assuming that one branch of the equation does not matter. If I ask you to first consider revenue, I’ll give away a major hint. Instead I’ll hand you the cost slide and see if you can turn this case around.)

Candidate Review Sheets

Pack: 006 page 25 of 30

A Logical Flow Using the FRAME Method™ A Logical Flow Using the FRAME Method™

R - Read the Audience

Interviewer: Play the Senior Partner role outlined in the book. Ask for insights often and see if the candidate can synthesize his/her understanding as you move along:

•What does the data tell you?

•How does your point relate to what we talked about earlier?

•What is the main question we are trying to answer? How does what you just said relate to that question?

•If you did run into roadblocks in this area, what would be our options?

•Give me your one minute summary of what you want to do.

SuggestedSuggestedAnswers,Answers,DiagramsDiagramsandandBehaviorsBehaviors

Good Reactions/ Body Language:

•Firm, dry handshake, leaning slightly forward

•High energy

•Consistent eye contact during the introduction

•Warm smile, worn most of the time

•Relaxed manner in small talk and getting situated

•“Ready to talk” body language, sitting on the front half of the chair, eager to discuss the case

Average Reactions/ Body Language:

•Half-hearted handshake

•Average energy

•Frequently breaks eye contact (indicates nervousness or insecurity)

•Forced smile

•A little tense and awkward in getting set up

•Moving around a lot in the chair, leaning or sitting back too far, indicating disinterest or laziness

Poor Reactions/ Body Language:

•Soft, weak or moist handshake

•Low energy

•Little to no eye contact

•No smile

•Awkward conversation; palpable tension

•Sitting completely in the back of the chair; slumping over the desk; putting arms on knees in the football coach position

Interviewer Notes and Answers

Pack: 006 page 26 of 30

A Logical Flow Using the FRAME Method™ A Logical Flow Using the FRAME Method™

A– Anchor a Hypothesis

When you heard this problem, what were you thinking? With a profit case you know that you’ll be digging into revenue and costs. Even if you don’t have a hunch early on, keep the following in mind as you work through the elements of your plan.

•Logical thinking that includes revenue and cost drivers first

•Common sense about how a travel agency makes money and what it can do to increase profit

•Big picture thinking that returns to some of the macro issues like the potential to lose commissions

SuggestedSuggestedAnswers,Answers,DiagramsDiagramsandandBehaviorsBehaviors

Potential Hypotheses

A hypothesis structure can be helpful even in a case where you think you need to see the data first. By anticipating one or two issues a company may have, you give yourself a focus for your questions. For instance, by thinking about scale, as shown below, you have “turned your mind on” and readied it for the data. The data may give you a different answer than expected, but that is a beauty of a hypothesis. The data will prove it or disprove it.

Scale is the Issue

“Since NLT is fifth in terms of revenue, they are probably missing out on some scale advantages that larger organizations have. If they can’t replicate these scale opportunities, I’ll look for ways to be more profitable in their niche.”

Costs

“Costs may be out of control which could be hampering bottom line profit. I want to make sure I understand the basic fixed and variable costs and the drivers that could be increasing them.”

Revenue

“These companies probably differentiate themselves by going after different segments. I want to make sure we are going after the most profitable corporate clients.”

Candidate Review Sheets

Pack: 006 page 27 of 30

Mining Zones

Revenue & Costs

•What is the revenue of each company? Who is making more money?

-Calculate revenue by taking transactions x average ticket price x commission rate

•Which variable is the biggest driver?

-No one variable is dominant

•Who has higher costs per ticket?

-Excursions (highest commission rate) and Destinations (highest volume) are leading

•Who has benefited from scale? Should we focus on cost reductions?

-Cost reduction provides little profit leverage compared to revenue

Specific Markets

•How are some companies earning more revenue than others? What are the various niches?

-Handout D shows that companies who focus on international travel tend to do better

•Which niche seems to be offering the most revenue? Are there correlating increases in cost with these markets?

-Regional transportation keeps the average ticket price low and the commission rate at 10% (US rate)

Entering New

Space

•What are the barriers to entering a new space?

-Doing more international bookings will require us to have more of a presence in several foreign locations

•Is NLT suited to play in that space? What challenges will we face?

-Many of these regions may be tough to enter, and increasing our brand awareness may be difficult

•What would it take to get our organization ready?

-Internally, we need people with international experience to market us