Learn Profitability Case Interviews in 9 Minutes

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In this profitability case interview example, I’m going to show you the three steps you need to take to solve any profitability case. You’ll have a robust profitability framework that will differentiate yourself from other candidates.
Profit and loss case interviews are the most common types of cases you’ll encounter in consulting first round interviews. There is a very high likelihood you’ll see one of these in a first-round interview, especially at firms such as McKinsey, BCG, Bain, Deloitte, or Accenture. Therefore, you should be very familiar and comfortable with these types of cases.
A profitability case will sound something like this: “An electric car manufacturer has recently been experiencing a decline in profits. What should they do?”
To solve this, you need to take three steps:
First, you want to understand, quantitatively, what is the driver that is causing the decline in profits? Is it that revenues have gone down, costs have gone up, or both?
Second, you want to understand qualitatively, why this is happening? You'll look into areas such as customer needs and preferences, suppliers, competitors, and market trends.
Third, you want to brainstorm ideas to improve profits and determine which recommendation is best by assessing the advantages and disadvantages of each option.
If you build an intuition for thinking about profitability cases in this structured way, you’ll be able to solve any profitability problem with ease. With enough practice, profitability cases will be fairly straight forward and repetitive for you.

[@HackingtheCaseInterview]

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[@mohitsingha210]

Now that's a pretty comprehensive framework. Thanks so much.

[@fubbaubba]

Great video! This clear structure helped me a lot in my interviews :)!

[@anirudhsrinath4224]

Loved the structured approach

[@ianpatrick23]

This is a great explanation of a really great profitability framework. Thank you!

[@matb1101]

One of the most useful videos I have ever seen on case study solving. Thanks so much for uploading

[@Zahra-mc9vs]

One of the most impressive consulting training videos I have ever seen, your simplistic visuals and clear explanations are just magic. Can clearly see this process would have taken you time to master and for you to articulate so well in such simplistic terms is a credit to you! Thank you so much 👏

[@cocoarecords]

indeed tbh

[@vedikaagarwal3451]

The best video on case interviews! Thanks so much :)

[@bsrk2909]

Excellent video. pricing analytics is another area I am interested in

[@mosessaokailie9997]

Thanks so much,i understood everything i was searching for

[@arunasingh8617]

One of the best videos ever watched 👍🏼

[@SephyStabbity]

Thanks for explaining it so well.

[@piotrw4629]

Great Job, really helpful video!

[@talsnir6615]

Wow this is such a great simple and easy explanation! so helpful!

[@HackingtheCaseInterview]

Glad you found this helpful!

[@clayton6671]

My interview is in a month and those videos really helped. Thank you!

[@HackingtheCaseInterview]

Glad these are helpful! Best of luck with your upcoming video! Let me know how it goes

[@aftermath__7060]

mine is today 😬

[@brh8343]

nice contents. Looking forward for more.

[@turnwaito.michael3292]

Thank you very much for this video. Please could you be kind enough to present a video on case study interview/assessment for research consultancy jobs?

[@yourfavclown1629]

I haven't commented in years on a YT video, this was extremely helpful thank you

[@HackingtheCaseInterview]

Glad it helped!

[@ItsMyHappyWorld]

Right to the point

[@phenomencore]

This was great

[@judyl.7811]

0:30 the most common case type is profitability, during the first round interview. 1. three-step approach 2.a unique framework to differentiate. 0:44 Case interview online courses. 0:55 A firm/client is experiencing a decline in profits. What should she do? 1:21 #1 quantitative: what is causing the decline in profits. #2 qualitative: why this is happening. #3 develop a recommendation. 1:49 cost is flat: 持平 a pricing structure that charges a single fixed fee for a service, regardless of usage 2:24 80% of profit decreases is because of revenue, so maybe first tackle this then cost. 3:11 you may prioritize the decreased sale of full-sized car. 4:01 competitor's recent move: decreasing the price or offering an additional car features. 5:55 once you explore and brainstorm these areas, you can come up with advantages and disadvantages. 6:35 alloy 合金: that used to make car framing 7:23 用例 use case, 是一種通過用戶的使用場景來獲取需求的技術 7:29 cost analysis 8:09 your ultimate recommendation 8:50 suppliers and competitors cost 9:11 if you build intuitionally the profitability case solution, it will be repetitive for you.

[@joaopupo3972]

Great video

[@HackingtheCaseInterview]

Thanks! Glad you found it helpful

[@sinhamohit]

I think logically, we should first determine the decrease in sales part (and not the pricing in our firm) and then move to the competitor's pricing.

[@MrSayandeep]

Could you please review my case study deck prepared for qn upcoming interview.please reply

[@kjql949]

Hi! If the interview prompt directly mentions that revenues have been declining, should your structure still mention costs or should you delve into categories like customers, competitor, market trend etc.?

[@HackingtheCaseInterview]

If the interview prompt mentions that revenues have declined, then there should be no need to look at costs. Focus on breaking down revenue into its respective components and determining whether the revenue decline is concentrated in a particular geography, product line, customer segment, etc. Once you've identified the revenue driver behind the decline, you can look into customers, competitors, market trends to understand why this is happening.

[@mgtconsultant8810]

Great

[@dipanshuverma1959]

What could be our solutions if government regulations are increasing our cost?

[@niveshsingal6654]

best

[@HackingtheCaseInterview]

Thanks Nivesh!

[@mohitsingha1809]

Profit is a percentage of revenue. So if revenue declined by 100mn, profit would not be directly related to revenue.