Capital One Case Study

1245 WordsDec 30, 20125 Pages
The Case Interview • What is a case interview? The Case Interview • What specific skills does it assess? • How to prepare for a case interview? • An interactive example. What is a “Case Interview” anyway? The Case Interview Simulation of a business problem. Similar to what our associates encounter every day. Series of open-ended questions. They’re designed to stimulate your conceptual, quantitative, analytical and – most importantly – creative abilities. The Case Interview There are several types of cases. Each is designed to assess different skills. Classic Case The Case Interview • Should an organization add capacity? • How should an organization react to a new competitor? • Should an organization enter/exit a…show more content…
The Case Interview How many subscriptions do we need to sell to break even? Profit (contribution margin) = £25 per subscription Magazine content development = £1 million per year Breakeven = £1 million/£25 = 40,000 subscriptions Given you need 40,000 subscriptions to breakeven, do you move forward? What about marketing costs? The Case Interview Your company has expertise in direct mail solicitation so you decide to use that method to market your new magazine. Each piece of mail costs £0.50. You are able to achieve a 2% response rate. How much does it cost you to sign up a subscriber? Cost per subscriber calculation The Case Interview Cost of mailing/response rate = Cost to sign up one subscriber £0.50/2% = £25 per subscriber Another way to calculate cost per subscriber: Assume you mail offer to 100 people Costs = £50 (£0.50 x 100 people) Responders = 2 (2% of 100) Cost per responder = £50/2 or £25 How will this affect your breakeven calculation? New break even calculation The Case Interview Old contribution margin Marketing costs New contribution margin New contribution margin = £25 - £25 = £0 Ouch! What can we do to make this venture better? Some possible considerations: The
Open Document