Market Entry Case Study Interview: BCG-Style — Transcript

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1. 0:05Abby Jin is a junior she is going through the  recruiting process for the first time and she's
2. 0:12done a good number of cases but i'm gonna let her  give a bit of her background what she's studying
3. 0:17what she's done for cases so far and what she's  looking forward to in the case today welcome abby
4. 0:24hi everybody thanks jenny ray for the for  the welcome um this is not a fake background
5. 0:28i'm sitting in a park by my house because my  house is being renovated so sorry if it gets
6. 0:32a little bit windy um as jenny ray mentioned  my name is abby i'm a junior at uc san diego
7. 0:39which is where i am now i'm studying business  and accounting so pretty standard disciplines
8. 0:44um and have done about 33 live cases so  far so if i know any of you on the call hi
9. 0:51hopefully i don't disappoint uh but really  happy to be here and excited to do the space
10. 0:56um would love to see some cool ideas in the chat  too just with anything i miss but hopefully this
11. 1:02is a good learning experience for me and for  everybody here so it's good to be here awesome
12. 1:08abby we're so excited to have you do you have  any questions before we dive into the case today
13. 1:15um no questions okay well let me just tell  you what i've got planned we have today
14. 1:22a bcg case we're going to do it round one focused  so i'm going to give you a maximum of 30 minutes
15. 1:28to complete the case we're going to target a  separate section for creative but the math is
16. 1:36actually kind of hard to time through so i'm  going to time your opening your structuring
17. 1:42the beginning and the end part of the case uh and  any creative questions that we end up diving into
18. 1:47but because of the natural back and forth inside  pcg i'm not going to be able to give you anything
19. 1:51except for a big bulk time for what happens inside  the middle of the case during the case my job is
20. 1:57to guide you to the end of it but i'm not going  to give you feedback after the case i'll give you
21. 2:02some detailed feedback about what should happen in  each one of the sections where you did really well
22. 2:06and where i think there's room for improvement  so if you're ready we'll go ahead and get started
23. 2:14yeah um i know some people have been  having trouble hearing me so is this better
24. 2:20but you can hold up yeah hold it up i think  a little bit further that would be awesome
25. 2:25like this yes yes there we go that's amazing  perfect okay if my papers fly away it's because
26. 2:32i'm holding this but okay do you want to grab a  rock or something else to hold your papers down
27. 2:39oh my my phone is here so it'll be perfect
28. 2:46great so as we're about to get started if  everyone could just mute um at the beginning
29. 2:51of the session so that we have no background  noise or anything else that's happening
30. 2:55it will just be abby and i on voice and then at  the end of the case we will have plenty of time
31. 3:01for y'all to ask questions both live and through  the chat bar okay abby i'm ready to get started
32. 3:07if you are yep ready when you are amazing so  our client today is a german luxury car maker
33. 3:15the luxury car maker wants to grow its business  and is looking into selling cars in pakistan the
34. 3:21gdp growth in pakistan is six percent per  year there are over 200 million people in
35. 3:27pakistan but the luxury goods market is quite  limited in fact currently there is only one
36. 3:32luxury car sold in pakistan which is the bmw the  cars are sold direct there are no dealerships that
37. 3:39carry bmws so each one is special ordered from  germany and brought into the country individually
38. 3:46for the purposes of this case the luxury car  market does not include resold cars only new
39. 3:52cars our ceo wants to find out if the company can  break even in two years if it enters the market
40. 3:59what would you look at to help the ceo make a  decision on this question great so this is very
41. 4:07interesting um i'm not a car person so we'll have  to be asking a lot of questions here uh but the
42. 4:13first thing i want to do is just really quickly  recap the case make sure i have all the facts
43. 4:18and then from there i can clarify some gaps in my  understanding so our client is a german luxury car
44. 4:24maker they currently sell cars all over the world  but they're looking to enter the pakistan market
45. 4:30a little bit about pakistan they are their gdp is  growing at about six percent they have a little
46. 4:35over 200 million people and they have a limited  luxury goods market with only one luxury car
47. 4:41the bmw that's currently designing there  interesting fact about the pakistan car market
48. 4:46the cars are sold directly so no dealerships they  just purchased directly from the original car
49. 4:52manufacturer so you know my intuition tells me  that that could be something that we need to
50. 4:57explore if we were to look into entering this  market um we're looking specifically to break
51. 5:02even in two years if we enter uh and that's the  objective that i have written down here is there
52. 5:08anything that i missed or did that pretty much  summarize the facts i think you got everything
53. 5:12that i needed you to have at this point and um  i'm really excited to dive into the case now
54. 5:19sounds good um and just one quick clarifying  question is the only objective to break even
55. 5:23within two years uh or is there anything else  we should consider what do you what else do you
56. 5:28think that we should be thinking about here yeah  i think uh one of the biggest things that stands
57. 5:33out to me is just the distribution channels so i'm  looking at maybe we need to explore alternatives
58. 5:37uh or not not alternatives or options  to establish maybe some dealerships
59. 5:41or look at ways in which uh we currently sell  cars to the end consumer i know dealerships
60. 5:47are pretty popular everywhere in the world  especially in the u.s but i'm not too familiar
61. 5:51with uh how a car manufacturer would be able  to sell directly to the consumer in a pakistan
62. 5:57country us who would love to learn a little bit  more about that once i lay out my thoughts that
63. 6:01seems to make sense um question at what point do  you think it would make sense to have a dealership
64. 6:06established or what metrics would you look for in  order to include a dealership yeah so i know that
65. 6:13for a dealership we can consider that like an  investment so we need to look at the cash flows
66. 6:17from that investment the revenue we expect to get  as well as any costs of establishing a dealership
67. 6:22there if we have no previous experience in the  pakistan market we don't have that cultural
68. 6:28kind of ability to navigate that business  environment so we need to do a lot more due
69. 6:32diligence into what kind of pakistan customers  would want our cars um given that the given the
70. 6:38limited size of the luxury market and then on the  cost side we need to figure out uh what some fixed
71. 6:42cost of investment would be and then from there  kind of establish whether or not it would look
72. 6:47good from a financial standpoint from a financial  standpoint uh i think hold on to that thought
73. 6:53when we um and make sure that you include it  in your structure because it would be something
74. 6:57worth exploring what what you think um the kind  of you know metrics and details around that would
75. 7:02be not the primary question but but i think  including it would be worthwhile okay sounds
76. 7:08great uh did you have any other questions i think  that covers everything that i need to ask right
77. 7:14now um so what i'm gonna do is take a few minute  moments and lay out my structure okay sounds good
78. 7:30for those of you that are listening in  please build your own structure here
79. 7:35it'll be a good test to see how you can
80. 7:37do
81. 8:48jenny quick question i want to answer questions  until at the end of the case oh i was just going
82. 8:53to ask if you could post the problem by any  chance no i won't be posting it oh okay okay
83. 8:59yep you're welcome
84. 10:07great so i think sorry i dropped the mic i think  i have here a pretty basic three-part structure
85. 10:13that i'd like to use to tackle this problem and  we're looking specifically as you mentioned to
86. 10:18break even in two years if we're looking at entry  so what i've done is i've divided my analysis into
87. 10:23three major buckets the first bucket is looking  at whether or not this market is standalone
88. 10:28attractive looking at the pakistani luxury car  market the second bucket i'd like to look into
89. 10:33is whether or not our company is a good fit  for this market and then the third bucket is
90. 10:38looking at the how so that's uh where i would  look into either organic or inorganic growth
91. 10:43as the best strategy to penetrate this market if  we jump into that first bucket that i mentioned
92. 10:47is the market attractive on its own i'd like  to take a look at three things in that bucket
93. 10:52first the industry second the products in  the industry and then third customers so
94. 10:59if we jump into industry i want to take a look at  the size and growth of the industry as a whole so
95. 11:03we're looking at the luxury car market in pakistan  and i'd also like to understand the profitability
96. 11:08of this industry where it's expected to go within  the next three to five years specifically i guess
97. 11:14within the context of our clients within that  two-year time period and from there we can kind
98. 11:20of begin to gauge how much market share we could  capture and then uh maybe potentially whether or
99. 11:25not a break-even point would be feasible uh if  we look into the products uh the second branch
100. 11:31of that first bucket um i'd like to understand  what types of cars that are typically sold in
101. 11:37pakistan i know different cars have different  functionality um so in the luxury market uh do
102. 11:44car makers typically sell the cars themselves or  do they sell other products as well that we could
103. 11:47profit from and then finally i'd like to take  a look at the typical customers i'm assuming
104. 11:51they're very high income but i want to take a  look more at what specifically that looks like
105. 11:56and how those segments of customers are expected  to grow so we can properly tailor any market entry
106. 12:02strategy to that profile of customers if we jump  into the second bucket whether or not we're a good
107. 12:07fit for this market i'd like to take a look at  three things within this bucket as well uh first
108. 12:12the company capabilities uh second the customers  and finally our sales and marketing capabilities
109. 12:18so uh i guess first in company capabilities we're  looking at distribution channels um any cash we
110. 12:24have available for investment and the strength of  our brand uh and actually on second thought i'm
111. 12:28gonna group the sales and marketing capabilities  within that first branch and then the second
112. 12:32branch is looking at our specific customers um  and what type of customer we typically cater our
113. 12:38products to to see if there's a match with that uh  this pakistan luxury car market and then finally
114. 12:44in that third bucket i'd like to take a look at  alternatives and risks of those alternatives uh or
115. 12:50specifically a market entry strategy so i'm  thinking whether we sell directly to the
116. 12:54consumer or uh set up a medium to sell you know  either that whether that's a dealership or joint
117. 13:00venture to sell through uh with a partnership  with another entity already existing there
118. 13:05uh and then any return on investment and costs  and profit that we need to take into consideration
119. 13:10within that specific branch with that being said i  would like to start off by understanding a little
120. 13:15bit more about the standalone attractiveness of  the the pakistan luxury car market do we have
121. 13:20any information on the size of this industry and  how fast it's growing i know you mentioned that
122. 13:25we have a gdp growth of six percent so my  assumption is that we're going to be growing
123. 13:29at a little bit faster than that um this is a  higher potential market yeah what when you're
124. 13:35thinking about the size of the market how are  you thinking about actually measuring that abby
125. 13:40yeah so if we're looking at the size of the  market in terms of number of luxury cars uh
126. 13:46purchased per year um i would probably start off  with a population and then i'd split that up into
127. 13:53segments of population by income typically only  the top maybe ten five to ten percent of the
128. 13:59population are going to be able to afford luxury  cars i don't know what specifically this car
129. 14:04maker is as far as our client goes but that's  what i would assume about five to ten percent
130. 14:09and then from there kind of taking a  look at what cars they currently drive
131. 14:12um who would be most likely to purchase them  uh given what customers prioritize whether
132. 14:17that's functionality image of the car uh any other  attributes of the car and then from there kind of
133. 14:23assuming a percentage of that specific uh  willing to willing to buy this type of car
134. 14:28able to purchase this type of car market uh and  then divide that by the average lifetime of a car
135. 14:35is how i would go about sizing that market i  love that so i've got some data that's actually
136. 14:39a little simpler but the way that you thought  through it activated me to kind of give this
137. 14:44to you um it's it's data about bmw which is the  closest data that we've got um and it segmented it
138. 14:50into two types you mentioned that there are people  who replace the cars um but we actually do have
139. 14:55some new entrants into the luxury car market as  well so we actually segmented those two pieces out
140. 15:01um one of them is one of the pieces of data is  that bmw imported and sold about 20 000 cars in
141. 15:07this market over the past 10 years the second  is that the existing owners replace their car
142. 15:14what would you think a good replacement rate to  use would be here i think once every 10 years is
143. 15:20about standard yeah that's actually exactly  what i've got so i think that's about right
144. 15:24and then of course there will be some that will do  a lease or you know something that's every three
145. 15:28years leasing isn't an option in this market so it  makes sense that it would be a little bit longer
146. 15:33and then finally there are new buyers every  year that are entering the market and so after
147. 15:37going through the exercise that you just walked  through we identified that there would be 600
148. 15:42new buyers each year in the luxury car market
149. 15:49okay great uh so i think you gave me three  major data points there and i want to run
150. 15:53through them to make sure that i got everything  so okay you mentioned uh if we're looking at
151. 15:57bmw as a competitive benchmark here i'm  assuming that we can use bmw's numbers
152. 16:02um to calculate our market size or potentially  the whole market size uh since they're the
153. 16:07only player so they imported and sold 20  000 cars in the last 10 years in pakistan
154. 16:14uh the average car is replaced once every  10 years and there are approximately 600
155. 16:18new buyers every year is that correct that is  correct and we're looking at the market size
156. 16:24for cars at the specific moment or in general  uh maybe how many cars were expected to to have
157. 16:31in the in the country every year what's the  specific time frame um tell me what you think
158. 16:38yeah so i think um since we can look at a  yearly basis so um if we're looking at 20 000
159. 16:46cars already in the industry we can take that and  just estimate how many of those buyers assuming
160. 16:52that it's one owner per car will replace their  car every 10 years so what the first thing i'm
161. 16:57going to do is i'm going to take that 20 000 and  divide that by 10 to get the total number of car
162. 17:02owners that will be replacing it every given year  we have that 20 000 cars provided by a 10-year
163. 17:09lifespan and that's going to give us a number and  then the second thing i'm going to do after that
164. 17:14is i'm going to take that number and add it to  the number of new buyers that we have per year
165. 17:17and that should get us to the annual number  of cars that bmw sells or expects to sell
166. 17:24every year from there we can kind of be able  to gauge where uh how much of that market size
167. 17:29we can capture but i'm getting ahead of myself  so i want to jump back to the first step that i
168. 17:34had wanted to calculate so we  have that 20 000 20 000 cars
169. 17:37market size that are currently being owned  so we have twenty thousand divided by ten
170. 17:43uh for the ten years so that's going to be uh  two thousand bars that are replaced every year
171. 17:51and then we're going to add that to the 600  new cars that are purchased every year and
172. 17:55that's going to get us to a total of  3 600 cars purchased per year of bmw
173. 18:05uh uh this this number's a little small um 3600 is  not a lot of cars but we're just taking a look at
174. 18:11the stagnant market as is right now uh so is this  the number of new buyers every year projected to
175. 18:18grow as the years go on um and maybe alternatively  uh if the market's gonna stay stagnant what are
176. 18:25the differences between bmw's car offering and our  car offering and how those compared with customer
177. 18:30preferences just to get an idea of how we'd be  able to compete with them as far as i want you
178. 18:35to look at the data that we already have and see  if you can extrapolate it to answer that question
179. 18:40yeah so you mentioned that the gdp of  pakistan is growing at six percent so
180. 18:45i'm going to assume that the the luxury car  market is going to grow at least that fast
181. 18:49i think you should double check that  with the numbers that we already have
182. 18:55the six percent the um with the number that we've  already sold or not we sorry that bmw has already
183. 19:04sold uh i'm not trying to understand any questions  yeah so so instead of looking at the high level
184. 19:11market we can really just dial down into whether  we think the market is growing based on whether
185. 19:17we think that new buyers entering the market are  entering at the same rate that they have entered
186. 19:22over the last 10 years and we have the data to  do that got it got it okay so we know that 20 000
187. 19:28cars have been imported and sold in the last 10  years so i'm going to take an average of that to
188. 19:33see how many cars have been sold every year so if  we do an average here that's just going to be the
189. 19:4120 000 cars divided by the 10 years so we have  the 2000 cars per year on average that are sold
190. 19:46every year um by bmw now if we add that to the the  or if we compare that to the new buyers of 1600
191. 19:54uh that's a 400 400 card deficit but i just  want to clarify so this new buyers is that um
192. 20:05are we that's the only um so in any given year the  car sales will be a total of the the existing car
193. 20:15owners that will be replacing their cars as well  as the new buyers correct that's right right okay
194. 20:20so um if we're adding that 1600 to the 20 000  um we have 20 000 owners right now if we grow
195. 20:29by 1600 owners every year we can get that growth  rate um is that okay with you seems reasonable
196. 20:36okay sounds good so calculating a growth rate  that's going to be that 20 000 existing owners
197. 20:44plus the 1600 new owners every year divided by  the 20 000 that should give us a yearly growth
198. 20:51assuming that it's not going to change from  year to year given and it would change obviously
199. 20:55because we're going to have this baseline growing  but i'm just curious as to whether you know you
200. 21:00kind of said is it growing or not i think you can  answer your own question here okay sounds good so
201. 21:04we'll do the the 2 the 20 000 plus the 1600 so  that's going to be 21 600 divided by 20 000. now
202. 21:12if we run the numbers here it's going to be about  216 divided by 200 let me just write it out here
203. 21:25i mean if i divide that in two that's going to be  108 over 100 which is going to be about 1.08 so
204. 21:31the market's growing at about 8 in this next year  it's growing at eight percent on the total mm-hmm
205. 21:38and then we thought about it another way so  how many cars were sold would you estimate
206. 21:44you know around 10 years ago per year i'm sorry i  couldn't hear you that well you said how many cars
207. 21:52yeah do you think we're sold about 10 years ago
208. 21:58yeah so if we're assuming maybe that
209. 22:03every year there's 1600 new buyers what i  could do is take that 20 000 cars and subtract
210. 22:1010 x 1600 and that should get us to the market  size 10 years ago is that what you're looking
211. 22:15for kind of yeah and i'm just saying just just  just ballpark it for me do you think that the so
212. 22:21so here's what we've identified right it's growing  we have new buyers entering the market and we have
213. 22:25the old buyers that are likely to replace this is  good um but what i'm curious about is if we think
214. 22:30the rate of growth is going to continue to grow  if we think that's going to be declining over time
215. 22:37um in the next 10 years you're saying yeah  let's we can call it in the next 10 years or
216. 22:41even just the next couple years yeah i mean  very qualitatively i think this market will
217. 22:47definitely grow of course we just calculated that  it's going to grow eight percent in the next year
218. 22:51um i guess if we if we look retroactively if  we look at the growth rate the change in the
219. 22:57growth rate from the last 10 years maybe  looking forward if i were to ballpark that
220. 23:04let's see let's say it's maybe around the same  uh hasn't grown that much i don't think that
221. 23:20the market is really accelerating upward is that  kind of aligning with the numbers that you have or
222. 23:25do you want me to run any specific calculations  well we're not going to need to calculate this in
223. 23:30i was really just asking for your interpretation  but what i'm noticing is that you know maybe on
224. 23:35average if if we sold 2 000 cars per year  over the last 10 years incrementally new
225. 23:40to kind of get up to that 20 000 it wouldn't  have been straight line we probably sold more
226. 23:45in year five and maybe even more in year seven or  eight but it does seem like the number of new car
227. 23:50buyers entering the market might be declining a  bit and then as we have that balance of luxury
228. 23:56car replacements versus new cars it seems like  the importance is going to be on the replacements
229. 24:02um yeah so i don't know that i don't know that  this will necessarily change our numbers but i do
230. 24:07think that it's important to note that it doesn't  seem like we're selling more new cars a year than
231. 24:11we used to do i mean if we're looking at the last  10 years 20 000 cars that's approximately 2 000
232. 24:17cars per year that we sold even if it fluctuated  within those those years as a general trend line
233. 24:23the market's still growing we still have new  buyers but the marginal rate of growth is slowing
234. 24:28there we go okay good so again i i don't need you  to factor that into the rest of the calculation
235. 24:34but i just wanted to kind of get a quick read  on what you thought about what's going on there
236. 24:41what should we do next yeah sorry i was fiddling  with mike um now that we've kind of looked at the
237. 24:47market and we know that the market is growing a  little bit slower than it was before i think i
238. 24:52want to take a look at our biggest competitor bmw  and i like to understand what their capabilities
239. 24:58are what their competitive advantage is how  they're tailing tailoring to customers to see
240. 25:02if there's a potential entry point available for  us here okay go ahead and ask me for data yep uh
241. 25:10so what's their i mean their current market share  is 100 um what kinds of products do they sell or
242. 25:16what kinds of cars just sedans just to dance and  just to clarify that's the the five passenger
243. 25:25standard cars so that sounds like uh it's  appealing to customers a desire for functionality
244. 25:34so it's very interesting have we done any  customer surveys or do we know anything
245. 25:38about what customers prefer in their cars in  the pakistan market what are you trying to
246. 25:43get to what do you what will that lead you to  what would be the next question after that one
247. 25:48after that one uh then i want to know  how do our cars differ from bmw's cars
248. 25:54uh can we tailor to a different customer segment  can we tailor to different customer preferences
249. 25:58and within the customer base in pakistan  what's the breakdown as far as preferences go
250. 26:03in terms of percentages of customers that want  either more we don't know what the market share
251. 26:08will be for sure in pakistan until we enter but  we have entered other markets vietnam is a simpler
252. 26:15is a similar use case for us on average in  these other markets including vietnam we gained
253. 26:2225 market share within the  first year of those markets
254. 26:29that's pretty significant i like that  number okay so we can use i guess our past
255. 26:35experience entering different geographical  markets as a proxy for maybe how much we
256. 26:40expect to grow in pakistan or how much share we  expect to get so if we know that uh year of entry
257. 26:48that we have 20 000 or 2000 replace or yeah  replacement cars purchase per year plus that
258. 26:53additional 1600 of new buyers that means the total  market size for the year is going to be 3 600
259. 26:59cars per year um and if we take 25 of that that  should get us to approximately what we estimate to
260. 27:06be able to sell uh in that first year of entry is  that does that sound good with you sure so for 3
261. 27:15600 cars multiplied by 25 is just 3 600 divided by  4 so that's going to be 900 cars we expect to sell
262. 27:22and to really get an idea of how much this uh this  means for our business i'd like to take a look
263. 27:27at either the price that we can sell at and  then a factoring in any variable costs and
264. 27:33investment costs um tying that back to the  original point of being able to break even
265. 27:38so what's the price that we'd be able to  sell awesome we don't know exactly but we
266. 27:42do know what bmw charges they charge  80 000 us dollars per car on average
267. 27:4880 000 per car okay great so now i'm going to be  able to calculate total revenue in the first year
268. 27:56and i'm going to also be able to calculate total  revenue in the second year since we're looking at
269. 28:00a two-year time period so if we calculate revenue  in year one that's 900 cars multiplied by 80
270. 28:07thousand dollars of revenue per car that's  going to be 72 million dollars of revenue
271. 28:14in year one i'm actually going to draw the table  here just so all my numbers are organized move
272. 28:20your 1 year 2 revenue or all this is forecasted  we're just using bmw's numbers so the revenue in
273. 28:28year one is going to be 72 million and if we look  at year two we're still going to sell at that bmw
274. 28:34price that eighty thousand dollars per car but  we're going to build on the market size from year
275. 28:39one because we're we have an additional  uh 1600 buyers per year so in year two
276. 28:47year one year two we're gonna have uh 20 i  think we can i think we can make a simplifying
277. 28:53assumption abby that it's the same like probably  none of those new buyers yet will be buying
278. 28:58additionally so i think it's fair to assume  that there will be just another 1600.
279. 29:04right so it'll be uh instead of 3 600 cars in the  market it'll be 3 600 1600 right um no because it
280. 29:13would be the because that that what i'm saying is  that that 1600 now is incrementally added to the
281. 29:202000 the 20 000 that um but but there's probably  no cars that are new that new 1600 haven't come up
282. 29:26for a replacement yet so we can just assume  that it will be another 3600 in the second
283. 29:31year okay sounds good that makes it easier then  so our revenue from year one to your two will
284. 29:36stay the same and now i'd like to understand  either what our profit margins are or what
285. 29:43our cost breakdown looks like do you have that  information what cost would you like specifically
286. 29:47yeah i'd like to know fixed and variable costs  um and if we tie this back to the breakeven point
287. 29:53i'd like to know on the cost  side both the investment cost
288. 29:57and any fixed and variable operational costs and  then on the revenue side we already have that so
289. 30:03i'd like to take a look at costs great so i've  thankfully got this a little bit simplified i do
290. 30:08have our initial investment cost it's gonna be  nine million dollars to open this market for us
291. 30:14in addition i have the per car costs three of  them are actually variable and one is fixed
292. 30:20can you tell me just really quickly what you  think the key variable costs would be here yeah
293. 30:26variable costs of course include any shipping so  if we're not going to manufacture within pakistan
294. 30:32we need to ship the cars we also need to take into  consideration any any products manufacturing raw
295. 30:40materials any commission that we're paying to  any uh sales and marketing teams uh and then any
296. 30:48uh direct labor that we're hiring to uh kind of  sell these cars to the end consumer in pakistan
297. 30:54okay so um we got we got two of those i'll give  you those first the manufacturing costs per
298. 31:00car are 20 000 these are all in us dollars the  transportation is 80 of the manufacturing costs
299. 31:14okay we also have a third cost which is customs  and taxes um and so when we're importing directly
300. 31:21we're going to have the challenge of  doing that and that's going to be 95
301. 31:25of the manufacturing plus the transportation costs
302. 31:32and i mentioned that there  was one fixed cost as well
303. 31:35and we just prorated this based on the number of  cars that we already expected it's about 10 of
304. 31:41all of the above costs so of the manufacturing  plus transportation plus customs and um taxes
305. 31:51okay let's run some numbers okay great so you  mentioned that manufacturing costs per car
306. 31:57these are all per car cost so manufacturing  is 20 000 transportation is going to be 80
307. 32:01of 20 000 so that's going to be 16 000  customs and taxes are going to be 95
308. 32:06of the 16 000 plus the 20 000 so that's going  to be 95 percent of 36 000 so 95 of 36 000 i'm
309. 32:15actually gonna take five percent of 36 000 and  subtract it out from 36 000 make it make our lives
310. 32:20easier so sounds good five percent of 36 000 uh is  going to be half of 10 so 10 of 36 000 is um 3600
311. 32:32i'm 10 of 36 36 000 is going to be 3 600 if  we have that that's going to be 1800 so that's
312. 32:37going to give us the 5 and then if we subtract the  1800 from the 36 000 that should get us to 34 200.
313. 32:45so that'll be our customs and taxes uh costs  per car and then you said the fixed cost
314. 32:52the fixed cost per car is going to be  10 of all three of these costs combined
315. 32:57so if we combined the if we combine the 20  000 16 000 and the 34 200 that's going to
316. 33:03get us to thirty six thousand plus thirty four  thousand two hundred which is seventy thousand
317. 33:09two hundred and if we take ten percent of that  that's going to be seven thousand and twenty
318. 33:16car fixed cost um we're going to add  up all of these costs to get the total
319. 33:22per car cost and then from there we can solve a  break-even point sounds good we have the 20 000
320. 33:3020 thousand sixteen thousand we have  thirty four thousand two hundred
321. 33:35uh which we already had calculated to  be uh seventy thousand two hundred total
322. 33:40then we're going to add that to the seven zero  two zero of that 10 so that's going to get us
323. 33:47total cost per car of 77 220. you can round  that to 77 000. oh perfect 77 000 dollars
324. 34:00um and then just to clarify the prompt again so  you're looking at breakeven point in two years
325. 34:06um are we looking at feasibility or are  we looking at how many units we need to
326. 34:10sell in order to break even we're looking at  feasibility right can we break even into yours
327. 34:16okay sounds good let's see  here so if we run a calculation
328. 34:25um in year one we make 72 million dollars  of revenue in year two we make 72 million
329. 34:30dollars again so total revenue over the  two years is going to be that 144 million
330. 34:40and then if we look at costs
331. 34:45what i'm thinking here is we can  take the profit over the two years
332. 34:48uh cumulatively and then just divide it into  the investment cost i like that process better
333. 34:54to see if we can make that happen so we know that  the revenue over the year one and year two period
334. 34:58is going to be two times 72 so as i said that's  144 million if we have costs of 70 77 000 per car
335. 35:07and we know that we're selling a total of 3 600  multiplied by two cars over the two years that's
336. 35:13going to be 77 000 of cost per car multiplied by  72 100 cars that we're selling over the two year
337. 35:21period so that should get us to our total costs  and if i just run those numbers really quickly
338. 35:35you sure that we're selling 7 200  cars is that what you just said
339. 35:40yes you mentioned that we're selling 3 600  cars oh sorry that's the total market size
340. 35:44there we go so we're actually selling 25 of  that so 900 cars and we're selling 1800 over
341. 35:50the two-year period my mistake so we have that  eighteen hundred cars multiplied by seventy
342. 35:54seven thousand dollars per car which should  get us to total costs over the two-year period
343. 35:59so i'm gonna do seventy-seven thousand  multiplied by eighteen hundred
344. 36:10i just want to make sure my numbers are  right here so that gets me to 137.6 million
345. 36:16okay that's total costs now if we subtract that  out from revenue we get profit so profit is going
346. 36:24to be let's see if we round that to 138 million  that's going to be a difference of 6 million so
347. 36:296 plus 0.4 6.4 million dollars of profit and if  we divide that into the upfront investment of
348. 36:35nine million dollars we'll get the break even  yeah which one was higher revenues or costs
349. 36:41so revenues was higher per my calculation what  was revenues it was and 140 four million dollars
350. 36:48are you sure so i guess just cycling back you  mentioned that we're selling um 900 cars at 80
351. 36:57000 a car so i calculated that to be 72 million  of revenue okay and then we had i was doing the
352. 37:03revenue over the two years okay so i added those  together and i got 144 million dollars great
353. 37:11is that okay with you sounds good okay and then  we subtracted out the cost of 137.6 million to
354. 37:17get profit of 6.4 million and now that we have  that break even or i'm sorry that investment of
355. 37:229 million dollars we can take that 9 million and  divide that by 6.4 is it okay if i round the 6.4
356. 37:28to 6. so what is that going to tell you i just  want to make sure you know what you're doing here
357. 37:33yeah so when we do that number what does that tell  us so let's say that we get a number less than 2
358. 37:41i think that means that we'll be  able to break even in less than
359. 37:44two years are you sure what what is the six  what is the and i think it's actually 5.4 um
360. 37:52right 138.6 and the 144. oh i have 137.6 okay what  is the um what is the number represent what does
361. 38:01that represent that that 5.4 or 6.4 what does that  represent so the 144 million so that's going to be
362. 38:08total revenue over the two years the 138.6 is  going to be total costs incurred for the cars
363. 38:14that we're selling over the two-year period and  then that profit number of i think you said 7.4
364. 38:215.4 excuse me that's going to be total profit over  the two-year period okay so how do we calculate
365. 38:28if we're breaking even or not when do we break  even so we break even when profit is equal to zero
366. 38:35okay so and so what do we have to have  for profit to be equal to zero how much
367. 38:39how much profit in those two  years would we have to get
368. 38:46yeah that's a good question so if we have that  investment of nine million dollars we have uh
369. 38:50if we amortize that over two years it's gonna be  about 4.5 million dollars um of investment costs
370. 38:56and so you're doing it in the aggregate for the  two years so how much do we have to have in profit
371. 39:00nine million right yeah yeah do we have it
372. 39:04uh good point we don't have that so we are  about 3.6 million dollars short uh profit
373. 39:11is still positive but we um we are still short of  our goal so i think we have a couple options here
374. 39:18a little bit of a fork in the road one we can take  this loss and we can say okay we're still making a
375. 39:23profit um these numbers you know are maybe likely  to change we could do some more due diligence but
376. 39:28for now assume that it's it's pro it's a good  decision to enter this market or we could look
377. 39:32at alternatives um such as establishing our own  distribution channels like that dealership we were
378. 39:37mentioning in the beginning uh or we could look at  potentially a different market to enter or a joint
379. 39:43venture uh to make sure that we can accelerate  our sales growth in the specific pakistan market
380. 39:50uh okay let me ask you um specifically if we could  adjust the inputs that we just calculated to get
381. 39:58us to a break even in two years which ones  would you think are the most likely to adjust
382. 40:06yeah so cost optimization is a lot  easier than trying to bolster sales so
383. 40:12i'd want to take a look at our cost  breakdown uh we have pretty high costs and
384. 40:19at 77 000 per car so i'd like to better  understand the breakdown uh as and compare
385. 40:27that to competitors uh so we have you know that  uh manufacturing transportation costs per car
386. 40:35i'd like to understand what bmw is  also doing within the cost segment
387. 40:43sounds good anything else yeah i think there's  there's other ways we could do this as well uh
388. 40:47we can look at potentially raising prices although  my hypothesis is that that doesn't sound like a
389. 40:52great idea considering that the market's already  so small and we're um we're competing with one
390. 40:56major player already established there we could  also look at increasing our sales and marketing
391. 41:01campaign on the revenue side uh we could look at  selling uh complementary products i know that for
392. 41:07people that may not want to buy new cars when they  replace new cars they could we could potentially
393. 41:13give them spare car parts um or offer some kind of  repair services that would bring in revenue for us
394. 41:19while also enabling customers to form a a  relationship with us down the line in case they
395. 41:25don't want to buy a whole new luxury car later on  um and then like i mentioned before we could also
396. 41:32look into that joint venture strategy maybe even  it doesn't look like acquisition is likely but
397. 41:36it would depend on on the cash we have on hand  and uh anything within that vein as well could
398. 41:42be potentially good things to look at okay awesome  well at this point we're ready for a final answer
399. 41:49what do you think we should do enter don't  enter make changes to our plan what's your
400. 41:54final recommendation abby yeah so this is a very  interesting case so thank you so much for this one
401. 42:01my final recommendation is uh that we should enter  this market and i have a few reasons for that
402. 42:10first of all uh this market is still growing um  even though it's growing a little bit slower than
403. 42:16it was before that doesn't mean that this will be  a permanent growth rate so i think there's still a
404. 42:20lot of upward potential here especially since we  have only one other competitor competing with us
405. 42:25i think the second reason is that we can  capture 25 market share in the first year
406. 42:30which is pretty significant um and without even  taking into consideration how that would grow
407. 42:35we'd be able through that 25 market share  to get profits of about uh 4.5.4 million
408. 42:43um in those two years now i know that this falls  short of our original uh goal and i know that
409. 42:49we're a little bit short of breaking even in  that two-year time period uh but i think that
410. 42:54if we're looking at this from a very  high level qualitative perspective
411. 42:58there's a lot of room for this market to continue  accelerating upward um and i think even if we
412. 43:03break in within three years which is the current  trajectory that we're heading towards uh it could
413. 43:07still be a very profitable investment i'll be just  a little bit delayed on the break-even return of
414. 43:12course some next steps to consider is definitely  a risky market so i would want to do a little bit
415. 43:17more due diligence into the numbers make sure that  we really can assume that we can capture that 25
416. 43:22percent of the market and that our forecasts are  uh are properly verified in order to mitigate any
417. 43:28risks of potential failure or not being able to  capture the market that we had originally hoped
418. 43:34okay great good job ellie you can relax  well done how did that feel for you
419. 43:42um honestly i was a little bit flustered it wasn't  my best performance ever but i think um if i just
420. 43:49maybe taken like two seconds and stepped back it  would have been a little bit better on the numbers
421. 43:53i think that's a really it's a really  great feedback i'm going to go through
422. 43:57and give you some insights as we went through  the case we ended up taking almost 40 minutes
423. 44:02to do it it may have felt harder than you were  initially anticipating because when i got through
424. 44:08the initial piece i felt like you were gonna do a  really good job so i actually decided to modify it
425. 44:13push a little bit deeper into it and make it more  of a second round case because i wanted you to
426. 44:17get a lot out of it as we were going through it  and so um what i did i appreciate that thank you
427. 44:23i added in some bonus stuff um and you know  as the interviewer i was really pushing you
428. 44:29you probably felt this but i was pushing you  to read out the insights before you did the
429. 44:35math i was pushing you to give me a a general  direction before kind of waiting until the end
430. 44:41and that's one of the big differences in a second  round case with bcg that i'm looking for versus
431. 44:46the first round is that i'm looking for you to  call it before you need to call it right you you
432. 44:51call it then you verify you call up and you verify  and so i'm going to go through each section of the
433. 44:56case and give you detailed feedback you can feel  free to ask questions as we're going through this
434. 45:00and then also at the end if you have any questions  i'm happy to to listen to those as well after that
435. 45:05we'll open it up to the floor for people to  ask either you questions or any questions
436. 45:09so first of all let me just go through the timing  and the structure of the case as i mentioned
437. 45:14i didn't split out what was happening inside  the math because that piece was a little bit too
438. 45:21kind of jumbled together right like gathering  data and then doing the calculations
439. 45:25um and so i just did the beginning and the ending  and the creative question so at the beginning of
440. 45:31the case your introduction was about three and  a half minutes it was really good uh the only
441. 45:36thing that i would tweak in the introductory  piece is that you started out with a negative
442. 45:40statement you said i'm not really a car person  which deflated i think what you're trying to
443. 45:45do is set my expectations that you might say  something a little silly at some point inside
444. 45:50the case but you did not demonstrate that you  weren't a car person as we went through it you
445. 45:54were totally with it and i think you really need  to push yourself to say something positive like
446. 45:59like um you know this sounds like a problem that  i have never thought about before but i have
447. 46:04familiarity with cars right something that kind of  is like giving me confidence instead of breaking
448. 46:08my confidence down what i'm imagining when you say  i'm not a car person is that i put you in front of
449. 46:13a client at bmw and you say that and they fall  apart right they're like why did we staff this
450. 46:19kid who knows nothing about cars on a car case  so just beginning with that posturing is a very
451. 46:24important part of the beginning however i thought  your recap was super fluid very story ended
452. 46:29i i felt like overall you did a great job of  demonstrating that you had proficiency with the
453. 46:34business problem at the beginning of the case and  so um that would be really my only key takeaway
454. 46:39when you asked the question which was included  in that time about that three and a half minutes
455. 46:44it was kind of not really a question you  were just like musing out loud i think
456. 46:48right you know there's only there's um you kind of  said you know it's interesting that only bmw was
457. 46:53in the market and it's also interesting that they  have no um like you know local sales and i think
458. 47:00that that would be a really big opportunity and i  loved that you said that but you never asked me a
459. 47:04question so that's kind of why i asked  you a question and then we got off on
460. 47:09almost like mini tangent at the beginning so  just make sure at the beginning that your wording
461. 47:12when you come up with insights like that i love  it just ask me the question afterwards right are
462. 47:17we open to having a different kind of distribution  than bmw has would we be willing to set up local
463. 47:23dealerships or a partner partnership with a local  dealership would we be open to considering local
464. 47:29manufacturing right so just so there's like you  know give me the musing but then add that detail
465. 47:34in okay um i overall though i thought that was  good your structure was a little funky for a
466. 47:39bcg case this felt like a mckinsey issue tree um  i don't know if you've read or watched some of
467. 47:46victor chang's stuff but it felt like straight out  of victor chang and it did not feel like this was
468. 47:50meant to solve this problem it took you um three  and a half minutes to build it oh wow quietly and
469. 47:58then it took you almost um three minutes about  two minutes and 50 seconds to report it back out
470. 48:04and so that was way too long for a case like  this and i actually have a podcast coming up
471. 48:09kind of soon called the issue tree is dead for  virtual interviews in parentheses is for virtual
472. 48:14interviews and i think you did an awesome job  of demonstrating why because um you actually
473. 48:19were like and in that branch there's a baby branch  and i like you should see what i wrote down on my
474. 48:24paper i i could not follow it after a point and i  just gave up um that's obviously not how you want
475. 48:29to engage your interviewer there so you need to  simplify your structure and you need to make it
476. 48:33just data oriented i'm going to need this data i  need to know what the size of the market is how
477. 48:37many german luxury cars there are i need to know  what the percentage is of those luxury cars that
478. 48:41are that would be sold by bmw and by us in order  to figure out the number by us i'm going to go to
479. 48:46the second category customers right what kind of  models of cars do customers want and what is our
480. 48:51breakdown like give me the data only in a bcg  case that you're then going to go collect make
481. 48:57it your data playbook and give me one level of  category and then one level of data you gave me
482. 49:04a nine eight or nine actual category structure  all baked together which is why i think it took
483. 49:10you so long and why we after the first question  never used it again right so um and in bcg one
484. 49:16of the things i'm gonna test for you in a final  round is like was your structure the playbook
485. 49:20that you used inside the case so again in a first  round i would have been like ah she wasn't wrong
486. 49:25like a lot of those things are good ideas you know  she's adorable in the second round i'm like look i
487. 49:30have to choose whether i want her on my project  or not i need somebody who's really linear here
488. 49:35so i really want to make sure that you understand  the difference between those and just go ahead and
489. 49:39incorporate that in your first round performance  okay any questions about that structuring piece
490. 49:44yes so um is that only a bcg thing so how does i  know mckenzie loves the issue tree what about bane
491. 49:52so mckenzie doesn't love the issue tree in virtual  environments because they can't see anything
492. 49:56that's happening so i would say that you still  would have been well served to do that same kind
493. 50:01of structure for being and for mckinsey because  i would know in each one of those situations the
494. 50:06analysis that you would do would answer my  question um and so you're welcome to make it
495. 50:10a two-minute version of it if you come up with  that linear structure in a minute yeah add some
496. 50:15other contextual detail right add me a category  of local distribution like set that up and tell
497. 50:22me exactly what you would need but i'm just really  pointing out that you had like concept concept and
498. 50:27in some situations concept at the third layer  and all of those three we're never gonna get
499. 50:31to no matter what kind of any case it is um we're  going to get to data inside categories those are
500. 50:37the only two places that we're going to get to  inside the case so i think that that structure
501. 50:42would work well in all of those situations it's  one of those big changes that we have to make in
502. 50:46a virtual environment and um the second thing uh i  don't know that you could have done this with the
503. 50:51complexity restructure in the first place but you  have to number everything out number one category
504. 50:56is and you did that well and then when you went  into the first one you said number one is the
505. 51:00industry number two is the product number three  is the customer and then it went haywire you were
506. 51:04like and then here's like seven things inside  here or maybe they were only three and you were
507. 51:08just explaining them i actually don't know when  you were moving on from point one to point two
508. 51:13to point three and so you want to keep that like  incredible numbering going you might even want to
509. 51:18number them inside your structure to cue you to do  that when you're in this verbal environment okay
510. 51:25um good so everything was there you needed about  half of it and it needed to be all numerical those
511. 51:30are my key takeaways from the structural phase  then when you went into the math i thought you
512. 51:34did an excellent job of gathering i thought your  speed and your fluency with math was incredibly
513. 51:40proficient i loved that you stated assumptions as  you went through when you caught them right i'm
514. 51:46gonna assume that this reflects one owner per year  not multiple drivers right there were things that
515. 51:51you did um when you went through it uh there were  a couple of times when you tried to do math before
516. 51:56you needed to and that's really where i just  wanted to reorient that math for second round to
517. 52:00be like okay what am i looking at here right let  me make sure that i'm setting this up correctly
518. 52:05i felt like there was a lack of structure inside  your mouth that you could have wowed me with it i
519. 52:10knew it was there because i watched you deliver  on it but i wasn't hearing it beforehand so you
520. 52:16weren't kind of building my confidence and then  i think you would have gone through a more linear
521. 52:20um process i actually think you would have maybe  caught a shortcut which in this case is to just do
522. 52:25the margin per car and then divide that into the  breakeven and figure that figure out the number of
523. 52:31years um and so you were doing actually like more  complex calculations because you were trying to
524. 52:37just calculate calculate calculate  and so in a second round performance
525. 52:41uh i i actually still really thought you  did a good job but i it wasn't great and i
526. 52:46i would hate for you to walk away and be  just right on the border right you have to
527. 52:50you're so close you have to  get this offer when it comes up
528. 52:54so so the way that you do that is just tell me  like okay what i'm gonna need is the market size
529. 53:01and what you did there is you told me here's the  data that i would need before you asked for it
530. 53:05what you did for all the other ones you were  like well what about the price instead of
531. 53:09saying okay now we need to figure out the margin  per car and right and that's where putting that
532. 53:14into your structure is going to help you it'll  give that exact playbook that you can just go
533. 53:18back and follow again um but that's where we were  losing it and that's why the math in total took us
534. 53:2430 minutes oh wow okay um actually 20 sorry 28  and a half minutes 28 and a half total minutes
535. 53:31and that probably could have taken us 12 i  think by the time i was asking some of the
536. 53:35sideline questions um it was it was really three  parts of math which i would give 15 minutes for
537. 53:42but i think you could have taken about 12 um to do  it and so anyhow i think that that could have been
538. 53:47about half the time and then we could have spent  a lot more of our time talking about for me what
539. 53:52are the ways that i really test my top candidates  which is the next piece okay um overall um i i
540. 53:59just again i just really want to compliment you on  the speed and the fluency of the math i felt like
541. 54:03you understood it i felt like you did a really  great job across the board there but i i did feel
542. 54:07like there was them for improvement the way that  you practice it is just go back through it again
543. 54:11now that you have all the data and then go back  after you do the math and rewrite your structure
544. 54:16right what are the things inside my structure  that i should have thought about gathering
545. 54:20um and that will going backwards inside a case  like that helps bring clarity for the next
546. 54:25time you do a market entry great and then the  final thing was your creative question that i
547. 54:30asked right what what numbers would be flex that  came across like just a verbal download right just
548. 54:37a waterfall of verbalness i don't want that so i  need it i think you were feeling like there was
549. 54:42time pressure but i still want to see some control  from you there and so um what you would do instead
550. 54:48you what what i wrote down was um um expect to  break even what the alternatives are different
551. 54:55markets to enter your jv and actually i think  that was new for your um closing i didn't even
552. 54:59write down what you said in the creative because  i couldn't really follow it super clearly and so
553. 55:02that's again in a virtual environment you might  have been writing things down but it just came
554. 55:07across as like well we could do this we could do  that or we could do this and instead of being like
555. 55:10okay let me look at the volume at the data that we  have again right what we have is the price point
556. 55:16we also have the transportation costs we  have the import costs and then we have the
557. 55:23taxes finally we have this you know overall  sg a look we could bring the sg a down but
558. 55:29that's not going to make a major difference  we need to look at the big cost categories
559. 55:33so could we lower price sure do we want to  maybe not and then maybe talk with me more
560. 55:38detailed about what we would do there maybe we  should sell suvs right um differentiate ourselves
561. 55:44through a different product maybe we're going  to have similar other numbers maybe they won't
562. 55:48be percentages but we're going to get a higher  price point in the first place and so like right
563. 55:52and so you kind of could probe into those once  you've laid out the structure again is that clear
564. 56:00yes so what i would have wanted for  you is to basically rambling there
565. 56:04so so control yourself by writing down the  categories of creative first so let me just
566. 56:11and just say it out loud i'm gonna write  down my categories so category one is price
567. 56:16category two is um transportation costs category  three is customs category four is manufacturing
568. 56:28and i'm gonna think about ways that we could  adjust each one of them and then prioritize
569. 56:32which one makes the most sense and then go back  through for pricing we could change the product
570. 56:37mix maybe it's selling suvs or higher luxury uh  price items yeah so then you kind of go through
571. 56:44each one of them and you anchor those like that  but write it down and write down your categories
572. 56:49first then uh in your final oh go ahead did you  have a question i was gonna say like i i usually
573. 56:54end up like writing it out like just writing  four buckets like i think would take i would
574. 56:59take a look at but if i'm crunching on time is it  worth my time to say okay category one is it is
575. 57:04category two is this or should i always to write  the categories to then go into detail underneath
576. 57:09the categories isn't as necessary but yeah if i  would have just known what the categories were
577. 57:14i could have followed everything else you  said more clearly and i would have thought
578. 57:17oh she's structured right which is really in a  bcg case i'm just gonna rate you at the end are
579. 57:21you structured are you proficient at solving  the problem um are you a good communicator
580. 57:26and i'll do that in just a second for you the  final step was the closing and um i actually find
581. 57:31it kind of odd that you were like enter the market  um because we i told you the mission was that
582. 57:37we were supposed to break even in two years and  then like enter the market and so um your closing
583. 57:43delivery was really good i just found the actual  choice of what you recommended to be a little bit
584. 57:49unclear um so i liked the recap piece i liked the  recommendation piece but that part i would have
585. 57:55tweaked i loved your next steps um and so i just  felt like the whole thing flowed out of actually
586. 58:01a different recommendation so it felt like it was  almost doubling back on each other a little bit
587. 58:04um so i think the delivery was fine i think the  structure of it was there again i would just
588. 58:09really reflect on going back to the mission of the  case and making sure that you've responded to it
589. 58:14um that about 80 of the cases the answer is gonna  be yes but that twenty percent that are no i don't
590. 58:19want you to just force it into a yes um i mean  i think where my argument was gonna go there was
591. 58:27even though we don't break even in two years we'll  break even in three and there's still profit to
592. 58:31be made here so i think maybe we could um still  enter even though it doesn't meet our criteria
593. 58:37it just we just have to wait maybe six months yeah  yeah yeah and i i wouldn't have dinged you for it
594. 58:42and i still liked you so um but but all that i was  saying is that um i think you would have wanted to
595. 58:48have some more verification that we we could have  gotten that and maybe a better creative structure
596. 58:54beforehand like i think that the way that we're  gonna do this is by um you know batch transporting
597. 59:00them so we're gonna do like one transport a month  gosh if we just get those costs down by like
598. 59:05five thousand dollars per car then we break  even easily in the two years right so like i was
599. 59:10looking for something tying the actual performance  to the metrics that we were looking for um
600. 59:17and so um good yeah so then my final score  so basically bcg scores you on the three
601. 59:24core categories right where you structured um  was it um how was the problem solving and then
602. 59:29what was the communication like and so i would  have given you like um out of if we called it a
603. 59:35four-point score with one being the highest and um  for being the lowest i would have given you twos
604. 59:41on the structure and on the um problem solving  which is really good that would have gotten you
605. 59:46already into the final round but it's not it's  not perfect right it's not like what what somebody
606. 59:52at bcg would do currently so that's just where i  think your biggest opportunity is is really like
607. 59:57making the structure super clear and making sure  that you do that insight before data piece and
608. 1:00:02then um the communication you were a one it  was fantastic across the board and so um so
609. 1:00:08again congratulations i thought that was a really  good case and i hope that you found that feedback
610. 1:00:12valuable thank you i appreciate that i also  appreciate that you made it a little bit more
611. 1:00:17difficult um so that i could get some some good  pressure some fire under myself to be better
612. 1:00:25um so the structure and problem solving you'd give  me a two it wouldn't be enough to pass me on the
613. 1:00:29final but it would be enough to get me it would  it would just it would just leave you in the in
614. 1:00:33the yellow zone right there's a green a yellow  and a red zone you wouldn't have been in the red
615. 1:00:37zone you would have been in the definite nose but  you wouldn't have been in the green zone and so
616. 1:00:41you might have gotten an offer and you might not  have gotten an offer and that is just the worst
617. 1:00:46place to be in my opinion yeah i mean you don't  want to be in the definite nose either but but
618. 1:00:50if you're going to be so close i just think you  have a couple of very fixable things um that that
619. 1:00:55are uh going to be you know that you just need one  or two good practice partners to really push you
620. 1:01:01on those to say like i actually couldn't follow  your structure just go back and do it again
621. 1:01:05or i or like in the math like let's just  go back and do it a second time and see if
622. 1:01:10i you know i timed you the first time it  was 11 minutes like let's see if we can
623. 1:01:14make it faster a second time right and just  kind of like run through so you can kind of
624. 1:01:19rejigger that process a little bit got it okay  and that last point where i didn't i wasn't
625. 1:01:24able to conceptualize the dividing the like  just comparing the profit to the break even
626. 1:01:30now that i'm looking at it i'm like how did i end  up doing that but if i made that mistake in like
627. 1:01:35if i was just so bogged down in the math and i was  looking at it and like it was just crazy that that
628. 1:01:40was why you got like a two instead of a one or a  you know like the kind of second highest number
629. 1:01:46um for that for the um for for that number for  bcg because that i wanted to see that the insight
630. 1:01:53piece was really strong and so i felt like you  were so fluid with the numbers but i wouldn't
631. 1:01:58want you to bring me a number and be like here  you go i would want you to be like break even or
632. 1:02:03not breaking it right i really wanted you to go  all the way to to think about how to answer that
633. 1:02:07um and so so you can pause a little bit when  you get that moment like on insights it's not
634. 1:02:13like mckinsey where you can say like can i take  20 seconds to plan the whole thing but you can
635. 1:02:18certainly say let me just look at it for a second  like you had moments to do that inside the case
636. 1:02:22and that might help as well okay okay okay good to  know awesome okay i think that's everything i have
637. 1:02:29right now okay awesome i know that a couple  people had questions so um i just wanted to
638. 1:02:34answer a few of the ones that have come through in  the chat bar and um i also just want to make sure
639. 1:02:39that um everybody's questions about the insights  and the feedback were answered so um um idiot i
640. 1:02:44think you said um did anyone calculate how long  it would take to break even it's about 3.3 years
641. 1:02:49with current revenues and costs so like abby said  that's not crazy um it's aggressive to say that we
642. 1:02:54want to break even in two years but it is risky  um the main risk which we didn't identify in our
643. 1:03:00discussion is that um like it would be super easy  for bmw to just drop their prices by four percent
644. 1:03:06right we're at really small margins right now um  in the case that like that you know three percent
645. 1:03:13or three three thousand dollars out  of the 70 um out of the like 80 000
646. 1:03:18is a really small percentage of the margin  so they could just wipe us out by dropping
647. 1:03:23the price to like 74 000 or 77 thousand dollars  even you know um then we don't have any profit
648. 1:03:30whatsoever so there there are some challenges  i'm thinking even about the competitive reaction
649. 1:03:39yeah run it