200 State Street, Boston, MA 02109 Associate Mock Case Interview Dartmouth College October 8, 2004

200 State Street, Boston, MA 02109

Associate Mock Case InterviewDartmouth College

October 8, 2004

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Agenda

• Case Preparation

• Case Assessment

• Case Execution

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Case Preparation

Case Question: Fenway Park T-Shirt Vendor

• Case Question

- Assess whether or not a Red Sox t-shirt vending cart operated outside of Boston’s Fenway Park can be a profitable business

• Case Question

- Assess whether or not a Red Sox t-shirt vending cart operated outside of Boston’s Fenway Park can be a profitable business

• Background Facts

- Fenway Park is home to the Boston Red Sox, a major league baseball team

- Many vendors operate single-cart businesses (e.g., hotdog carts, ice cream carts, t-shirt carts,etc…) immediately outside ballpark grounds for pre- and post-game sales

- Average game attendance: 30,000

- Average game duration: 5 hours (includes pre- and post-game)

- 160 games per season: 50% home, 50% away

- Average ticket price: $40 per person

- Business intention is to operate a single vendor cart outside of Fenway Park on Yawkey Way, where people come to enjoy the festive pre-game atmosphere

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Case Preparation

Before You Start…

• Take a deep breath and relax

• Write down your thoughts and other notes (you need to bring pen/pencil and paper!)

• Identify a framework that will help you structure the problem

• Think before you talk

• Start your case with a thought process – explain briefly how you intend to approach the problem

• Throughout the case ask probing questions and/or state your assumptions

• Be aware of time constraints and be prepared to summarize your findings

• Smile

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Case Preparation

Thoughts & Notes

• Fenway Park – is it profitable to operate a t-shirt cart?

• What do I know?

- Attendance 30,000

- 80 home games per year

- T-shirts sell for between $10 - $25

HOW DO I BREAK THIS DOWN??

HOW DO I PROCEED?

HOW DO I BREAK THIS DOWN??

HOW DO I PROCEED?

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Case Assessment

How Did I Do?

Demonstrates clear logic

Uses relevant framework and/or provides structure to case problem

Guides interviewer through thought-process

Offers both broad and detailed assumptions

Calculates numbers accurately

Sanity checks answers & recovers from potentially “off” estimates

Summarizes findings and makes a firm and actionable conclusion

Makes creative considerations beyond obvious case issues:

Product differentiation Location Seasonal influences (e.g.,

weather, playoffs, etc.) Customer loyalty

•Shows enthusiasm

Excellent(Home Run)

Excellent(Home Run)

Demonstrates reasonable logic

Uses framework, but not necessarily most relevant

Provides some explanation of thought-process

Makes broad assumptions, but lacks detailed considerations

Does not gauge all answers for reasonability or accuracy

Summarizes findings but conclusion lacks conviction

Makes some creative considerations, but could push to another level of detail

Shows enthusiasm

Good(Double)

Good(Double)

Fails to grasp key issues or demonstrate clear logic

Does not use framework or structured approach

Thought-process is rambling (or not communicated at all)

Assumptions lack depth and fail to consider key issues

Estimates are unreasonable or calculated incorrectly

Does not summarize findings, or summary does not take into account key issues and/or estimates

Lacks creative thinking and enthusiasm

Nervous and fidgety

Needs Improvement (Strike Out)

Needs Improvement (Strike Out)

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Case Assessment

Wrap-Up

• Case Tips

- Bring a pen/pencil and paper

- Listen carefully to case details and general interview questions

- Respond in a thoughtful and structured manner (take your time!)

- Remember that your thought-process is usually more telling than your answer

- PRACTICE, PRACTICE, PRACTICE!!

• General Interview Tips

- Be on-time and dressed appropriately

- Know your resume and academic/work experience background

- Answer interview questions concisely

- Be able to state clearly and concisely why you want to work in consulting

- Be enthusiastic

- Be yourself

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Case Execution

The Framework

ProfitProfit

CostCostRevenueRevenue

VariableVariableFixedFixedPricePriceQuantityQuantity

How many t-shirts can you sell per game?

What factors affect sales?

How much can you charge for t-shirts?

What are my costs?

• Use a framework that will help you and your interviewer understand your thought process

M I N U S

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Case Execution

Cost Analysis

ProfitProfit





What are my costs?

What costs are start-up, (e.g., one-time only)?

What costs are recurring? How often? (Annual, monthly, periodic?)

• Start with something straight-forward (low-hanging fruit) – in this case, the cost component is easiest to estimate

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Case Execution

Cost Analysis ProfitProfit



How many t-shirtscan you sell pergame?

How much canyou charge for t-shirts?

Labor $10/hour 5-hour (incl. pre-

and post-game) $50 labor per

game, plus… T-shirt cost

$2 per t-shirt how many t-shirts

do I need?

Total ????

Cart Purchase ~$5,000 (one-time)

or

Cart Lease ~$1,000 (semi-annual)

Operator’s License $1,000 (annual)

$6,000 Total

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Case Execution

Revenue Analysis ProfitProfit








$2 per t-shirt how many t-shirts

do I need?

Total ????


or



$6,000 Total

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Case Execution

Quantity Estimation

How many people buy t-shirts per baseball game?

How many people buy t-shirts from us?

How many people buy t-shirts per baseball game?

How many people buy t-shirts from us?What is the best metric to use?

What is per game attendance?

30,000 people per game30,000 people per game

How many people buy things at baseball games (food, hats, t-shirts, banners, balls, etc.)?

How many people buy t-shirts?

How many people buy t-shirts from us?

6,000 Buyers (20%)6,000 Buyers (20%)

24,000 Non-Buyers (80%)

24,000 Non-Buyers (80%)

1,500 T-shirt Buyers (25%)

1,500 T-shirt Buyers (25%)

4,500 Buy Other Things (75%)4,500

Buy Other Things (75%)

SANITY CHECK: DOES THIS MAKE SENSE?SANITY CHECK: DOES THIS MAKE SENSE?

50 Buy Our T-shirts (3%)50 Buy Our T-shirts (3%)

1,450 Buy T-shirts from Others

1,450 Buy T-shirts from Others

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Case Execution

Sanity Check

• The Sanity Check:

- Does 50 t-shirts sold per-game sound right?

- There are 1,500 t-shirts sold and I am selling 50 shirts, so that implies that there are ~30 t-shirt vendors at the park. Is that a reasonable number?

- If we really only sell t-shirts for 2 pre-game hours and 1 post-game hour, we effectively have 180 “selling minutes” OR… we sell 1 t-shirt every 3-4 minutes

Can one person handle a t-shirt sales transaction every 3 ½ minutes?

50 Buy Our T-shirts

50 Buy Our T-shirts

SANITY CHECK: DOES THIS MAKE SENSE?SANITY CHECK: DOES THIS MAKE SENSE?

OUR ASSUMPTIONS SEEM REASONABLEOUR ASSUMPTIONS SEEM REASONABLE

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Case Execution

Revenue Analysis ProfitProfit



50 t-shirts sold per game




$2 per t-shirt 50 t-shirts per

game

Total $150

$15 per t-shirt

Total Revenue per Game $750


or



$6,000 Total

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Case Execution

Roll-It-Up

ProfitProfit



50 t-shirts sold per game

$15 per t-shirt

• Now that you’ve calculated the various components of the profit tree, roll-it-up to an annual level and summarize…

$750 per game revenue

$5,000 start-up costs (cart purchase)

$1,000 annual operator’s license

$50 labor wages per game

$2 cost per t-shirt x 50 shirts = $100

$6,000 annual costs $150 per game costs

ANNUALIZE & SUMMARIZEANNUALIZE & SUMMARIZE

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Case Execution

Roll-It-Up• Sanity check your findings once again and summarize to the interviewer

Total Revenue per Game $ 750

Less: Total Costs per Game ($ 150)

Net Income per Game $ 600

Total Home Games per Year 80

Annual Income $48,000

Less: Annual Fixed Costs ($6,000)

Total Annual Profit $42,000

What do you think?

Too high? Too low?

What do you think?

Too high? Too low?

Documents

200 State Street, Boston, MA 02109 Associate Mock Case Interview Dartmouth College October 8, 2004