Become A Member
Management Consulting Case Interview Preparation Bootcamp | GMAT Cases over Coffee

Case Writeup – #3A

INTERVIEWER SHOULD READ THE CASE & GO THROUGH THE MODEL SOLUTION BEFORE THE CASE DISCUSSION. WE RECOMMEND THAT INTERVIEWER SHOULD SPEND ATLEAST 30 MINUTES READING THE CASE & GOING THROUGH THE MODEL SOLUTION, BEFORE THE FIRST INTERACTION WITH PARTNER.

This case should only be read by the interviewer/case giver. It is important to note that it might not be possible for the interviewer/case giver to follow this script exactly. It is okay to deviate a bit from the script. This particular case would be considered as a Round-1 case.

CASES OVER COFFEE HOLDS THE COPYRIGHTS FOR THIS CASE. ONLY FOR NETWORK MEMBERS. NOT TO BE SHARED UNDER ANY CIRCUMSTANCES.

CASE STATEMENT: IMPACT OF DIGITAL ECOSYSTEM ON A U.K.BASED RESTAURANT

Step 1: The following statement should be read by the INTERVIEWER right at the start of the case: 

“A RESTAURANT located in Oxford Street, London has been in business for the past 20 years and is one of the most-preferred restaurants. However, it has been facing a decline in Footfall since the beginning of this year.“

INSTRUCTIONS TO INTERVIEWER: (Pause here for a few seconds and give the chance to the candidate to ask a few questions. If the candidate is lost, share the below information voluntarily and ask the Question #1 directly)

Details about the restaurant: The restaurant is multi-cuisine. It is open to customers of all age groups. The market is fragmented and many similar restaurants are located nearby. However,  it does not serve alcohol.

QUESTION #1 FOR THE CANDIDATE: WHAT IS YOUR APPROACH FOR ESTIMATING THE TOTAL FOOTFALL IN A WEEK?

INSTRUCTIONS TO INTERVIEWER:

  • Please share the following figures AFTER the candidate comes up with the formula for estimating the total footfalls. Encourage the candidate to come up with the formula to estimate the total footfalls
  • Possible Formula – (Seating Capacity)*(Occupancy Rate in Peak Hours)*(No. of Peak Hours in a day)*(No. of Weekdays) + (Seating Capacity)*(Occupancy Rate in Non-Peak Hours)*(No. of Non-Peak Hours in a day)*(No. of Weekdays)For Weekends : (Seating Capacity)*(Occupancy Rate)*(No. Of Operational Hours)*2
  • Data to be shared:
    • Seating Capacity200
      Occupancy Rate in Peak Hours90%
      Occupancy Rate in Non-Peak Hours60%
      No. of Peak Hours6
      No. of Non-Peak Hours6
      No. of Weekdays5
      Occupancy Rate on Weekends100%
      Time spent at a table per customer1 hour

(Any other formula which covers all the aspects and is Mutually Exclusive and Completely Exhaustive will also give similar results.)

 

ANSWER – (FOOTFALL: 13,800 per week)

QUESTION #2 FOR THE CANDIDATE: THE DECLINE IN FOOTFALL IS 20%. WHAT ARE THE POTENTIAL REASONS FOR THE DECLINE IN FOOTFALL?

INSTRUCTIONS TO INTERVIEWER:

  • If the candidate confirms that the objective is to get back to the initial level of footfall, Please say “YES”
  • If the candidate is asking for data. Mention to the candidate that there is no data  apart from this
  • Also, there have been no changes in the Price-levels, Operational Hours, Type of Cuisine and Presentation of food

 

POTENTIAL ANSWERS:

  • Decrease in demand, Payment issue because of absence of Cashless Modes, Change in the seating arrangement which promotes bigger groups and thus decrease in the occupancy rate, Increased preference of Alcohol)

QUESTION #3 FOR THE CANDIDATE: WHAT ARE THE AREAS YOU WOULD EXPLORE TO GET THE CLIENT’S FOOTFALL BACK TO INITIAL LEVELS?

INSTRUCTIONS TO INTERVIEWER:

  • Please ask the candidate to consider both short-term and long-term while exploring the areas
  • For the purpose of this case, ask the candidate to suggest more revenue generating opportunities which also attract the customers
  • If the candidate suggests measures for cutting costs: Please say “YES”

 

POTENTIAL ANSWERS:

  • Short Term – Introduce Cashless modes of payments, special weekday offers to increase occupancy rate during the weekdays
  • Medium Term – Obtain License for Alcohol since preference is high and introduce with happy hours to increase awareness
  • Long Term –  Change the seating arrangement only if the above measures prove unsuccessful. Make changes in the ambience.)

QUESTION #4 FOR THE CANDIDATE: WHAT ARE THE COSTS ASSOCIATED WITH THE ABOVE MENTIONED MEASURES TO INCREASE FOOTFALL?

INSTRUCTIONS TO INTERVIEWER:

  • Mention that revenues have taken a hit because of decline in footfall and due to that costs cannot be increased to a very large extent
  • Tell the candidate to focus only on the short-run while estimating the impact on costs

 

POTENTIAL ANSWERS:

  • For Cashless Modes  – Installation of POS Machines, Transaction Fees charged by the bank i.e., 2-3% of every transaction, Training cost of the employees
  • For Weekday Offers – Some percentage impact on revenue due to discounts)

QUESTION #5 FOR THE CANDIDATE: WHAT ARE THE STEPS THAT THE CLIENT SHOULD TAKE RIGHT NOW WHEN DEALING WITH THE PANDEMIC?

INSTRUCTIONS TO INTERVIEWER:

  • Tell the candidate to focus on current issues that the customer must be facing and come up with some solutions for them

 

POTENTIAL ANSWERS:

  • Introduction of Cashless Modes because of the threat of spread of virus through hard currency and meeting the global safety standards
  • Explore the option to serve Alcohol and conduct sensitive analyses (revenue increase vs. decrease by serving Alcohol)
  • Focus on promotions (Happy hours, weekend brunches, discounts, etc.)

LAST QUESTION FOR THE CANDIDATE: WHAT ARE YOUR FINAL RECOMMENDATIONS FOR OUR CLIENT, BASED ON ALL THE ANALYSES DONE SO FAR?

POTENTIAL ANSWERS:

  • Introduction of Cashless modes of payment
  • Obtain license for alcohol in the near future so as to retain the segment of people who prefer alcohol
  • Special offers such as discounts, happy hours etc. on the weekdays)