I additionally would add to at the difference of customer segment (old vs. young) that an adaptation for cruise destination should be applied. Without doubt, there are different preferences in destinations between these target groups.
When he asked her in the first question why are profits are declining , she should've mentioned Porters five forces and going through each force . That would have shown him that shes the ability to run a case study for a top down perspective. Thats IMO
Perhaps mention the location? Is The Mediterranean area in decline overall? What other destinations may increase occupancy? If you’re trying to encourage a younger market, and stick to Mediterranean, maybe visit cities or ports that cater more to a younger crowd - party cities and so on. This may decrease the older and traditional occupants, but as he said at the start, they are very price sensitive. Younger people, generally spend more on a cruise and less price sensitive. Just my two cents.
How is fuel fixed cost? Also, before mentioning market segment diversification i would have suggested product diversification first. If you’re losing your core customer segment, chasing the next segment would be less successful. It’s a good suggestion but winning back the age group as well as considering the younger group would make more sense.
Why is no one talking about how to increase the customers, how to bring more people in, because finally, it all comes down to bringing in more customers. Why aren't they talking about advertising techniques?
I agree with you. However, I believe this case study is more focused on financial analysis rather than a marketing functional assessment. That's why its more financed driven, not discussing about marketing maneuvers.
Yes, but the test is about critical thinking and how you analyse the business problem, not just about crunching numbers. You need to walk the interviewer through how you THINK about the problem as well.
That is going to effect the global demand for cruise industries as customers would be weary about travelling due to concern about their own safety and security. Best strategy would be marketing to attract new customers and enter emerging markets.
Hi, I did a much much faster route for the breakeven, since you know, from the start, that to have a breakeven you need a minimum occupancy... So, what I did, much faster and not using such big numbers was: Rev./Pers= ($450+$150)-$100= $500 Breakeven= $600,000/$500 = $6,000/$5 (for those not wanting to deal with large numbers) = 1,200 minimum amount of people on board. 2,000 capacity/1,200 actual occupancy= 60%
Not really, here the route for ships is fixed and hence fuel even though variable per kms, it still is fixed irrespective of the number of customers on board. You don't change a cruise route/kms depending on customers on board!
Hey guys! could u please recommend me any good website or even books, video tutorials in order to prepare for strategy interviews? Unfortunately at College i am not taught how to interprete charts, diagrams or even think into business issues they way we are required at consulting interviews! Thanks a lot in advance
In the second case study, we should also divide the number of tickets into two categories - Weekday sales of tickets and weekend sales of tickets. Because the number of people going for movie will vary on weekdays and weekends.
" Tomorrow's Back Up visions and Investment Social" is an organization nonprofit, why i have chosen that name ? First of all, he has chosen to be his servant, i have known in the Bible that his only son, Jesus has come On earth to preach and act, the Gospel is not only Word But it's Action. Imagine your brother or sister is hungry, and you have Things to feed him or her, Will you pray or Act ? Some Will pray but like some Act, me, i will act because you have means to take care instead of praying but it's Gospel. We have our brothers and sisters are homeless, suffering, weakness, hungry, naked and son fourth... On October 2016, i have got this vision because i couldn't sleep and wake up with his Awesome vision to help Kids specially and i have chosen to take care of them with their Family. I am so far in the process but i am working on to help them but as we have already known it's an easy process but he never gives a vision without provisions but he is faithful to his vision, a great to save life. There are some organization pretend to help but they enrich on them but i would love to do different But it 's not easy because i Will have other people in the project with me, i don't know but God knows them better than us. Whatsapp : 509-37748846
Well I could do it swiftly and calculated 1200 passenger occupancy in just 2 seconds for break-even...But I quickly realised that additional 150 GBP spend was all taken in as profit...what about the cost of products or services provided to customer in lieu of that per passenger revenue...don't think that can be accounted in fixed costs. Have many other ideas too - fill the rest of the missing occupancy even at discounted rates and you still profit more given you stay above the break-even barrier for that segment - many ways to achieve it.
such a boring answer! the client would've already thought about the classic causes, what he'd be looking for is something they don't typically see because they are overly involved in the business. boring.
Fuel is a fixed cost. First of all, it would vary depending on a number of passengers and distance traveling. Second, the price of gas is changing In addition, if the number of passengers has declined, that means the cost has decreased
I You my son he was my father and I said I would never know if he was a child or 👶 he would be my favorite person ever to be have Ktytu is r the way you are and you are the one ☝️ and I love think 💭 will get be you the only person I know want a man to know about you
Why not just acquire another company to boost market share. If the whole market is depressed you should be able to buy another company at a discount. Or even better acquire a Cruise company targeted toward the younger generation. Also just increase costs on the ship, your customers can't go anywhere while onboard and if you are discounting tickets already you need to make back money while on the ship. Customers can't be price sensitive while on board because you own 100% of the market for anything they could buy.
lolol not consultant material. Your thought, "if every single movie coming out of Hollywood is "shit", what then?" shut down completely? shut down for a few months when "good" movies come out? If it's temporary, there are no guarantees "good" will ever come.
It's both. Consider a cruise ship with 10,000 people and a ship with 100 people. It would take more fuel for the ship with 10,000 people considering their weight and everything but if you consider the entire ship sailing, it may or may not be a huge difference. That ONE ship will still sail regardless of the occupancy rate. but overall it will depend on how far they sail and such so I think in an interview setting you can choose one.
madhur kalgutkar I believe it's a fixed cost. With the cruise business, they will generally be visiting the same locations, so after a few times the total fuel cost can be accurately measured. If the cruise line stops in the same locations each time, then they can classify it as a fixed cost.
I worked in a yacht company and I can tell you is a fixed cost. Since the variation by the amount of people is negligible compared with the one caused by the distance.
It was a good video. BUT, if the costs has been constant for the 4-5 year period. You should definitely look towards reducing both fixed and variable cost which will definitely have a great impact on the Margins. Secondly, if you are targeting newer age group, this also means that you need to change the destinations location. third, rather than getting new cruize, why can't we acquire existing cruize from the market and increase market share as the industry is seeing a decline ( 10% market share means you are a sizeble company)
Well to answer why you should not try to increase share in a declining market means that you are defacto buying more of something that will get less valuable over time.
probably, But i would like to think that any market would have at least 4-5 predominant ones with a higher market share. and a quiet of bit of inefficient small ones. Industry decline could be a economic cycle effect and will bounce back and this is the best time for acquisition. and introduce a newer brand for different age segment.
Well if total costs haven't changed (as mentioned by the interviewer) then the number of passengers haven't changed as well. So the problem isn't the number of passengers.
Why is she subtracting the the Fixed Costs (600,000) from the variable costs? Aren't you supposed to Add both Fixed Costs + Variable Costs in order to get Total Costs?
If you do the math like this: profit = RV - (FC + VC) you will get after removing the brackets () in the end the same result. + becomes - and it is the same, :)
While the constant cost doesn't imply the problem is not from cost side. As technology evolves, it is better to compare cost ratio of client to industry. If cost ratio is much higher than industry level, that implies that the client needs to work on cost optimization. Cost optimization is the hardest job for company!!! Second, as recommending client focusing on younger customers to increase the occupancy, the cost will definitely goes up!!!
There is a mistake in the occupancy calculation diagram (adding the word occupancy as an additional term), even though the calculation itself is correct.
⁰p
Cost of crimes ?????? Cost of Lies ???? Cost of hate ????? Cost of False teaching ?? Cost of not being fair ??/ Cost of religious freedom?????????????
What about the price of discrimination of LGBT persons??????????? try 7. 7 million
Anyone else confused why Michael Mcintyre is interviewing her
This was unbelievably helpful, thank you.
I additionally would add to at the difference of customer segment (old vs. young) that an adaptation for cruise destination should be applied. Without doubt, there are different preferences in destinations between these target groups.
Could you please put a bit more of pixels on this video, it is really interesting , but it looks like a really old video.
When he asked her in the first question why are profits are declining , she should've mentioned Porters five forces and going through each force . That would have shown him that shes the ability to run a case study for a top down perspective. Thats IMO
i have an interview this tuesday and i dont have any idea that there will be this type of case study
the problem of the case is we only know the difference in profit among the companies but have no idea about the competitor's revenue and cost.
Very good.
So is this a model for a perfect performance?
Perhaps mention the location? Is The Mediterranean area in decline overall? What other destinations may increase occupancy? If you’re trying to encourage a younger market, and stick to Mediterranean, maybe visit cities or ports that cater more to a younger crowd - party cities and so on. This may decrease the older and traditional occupants, but as he said at the start, they are very price sensitive. Younger people, generally spend more on a cruise and less price sensitive. Just my two cents.
How is fuel fixed cost? Also, before mentioning market segment diversification i would have suggested product diversification first. If you’re losing your core customer segment, chasing the next segment would be less successful. It’s a good suggestion but winning back the age group as well as considering the younger group would make more sense.
For the second case, he didn't mention anything about reducing cost.
Because if you reduce cost, you raise profit, not revenue. (Profit = revenue - cost)
lol consulting is such bullshit
More practical situations and good analysis of answer with available inputs.
Not sure about this Michael McIntyre sketch...
Why is no one talking about how to increase the customers, how to bring more people in, because finally, it all comes down to bringing in more customers. Why aren't they talking about advertising techniques?
I agree with you. However, I believe this case study is more focused on financial analysis rather than a marketing functional assessment. That's why its more financed driven, not discussing about marketing maneuvers.
I guess you missed the part where she explained how a younger market would bring more customers onto the cruise ship?
@@tylergable2445 You're forgetting about attracting more customers from the original target market
That moment when you know you're going to smash the chick on your desk after you hire her 17:13
that mouth thing he does is fucking annoying
Easier way to solve it: Profit per passenger is (600 -100) = $500. How many 500s do we need to equal 600k ? 1200. 1200 is 60% of 2k
Yes, but the test is about critical thinking and how you analyse the business problem, not just about crunching numbers. You need to walk the interviewer through how you THINK about the problem as well.
Wouldn't sinking a few ships of their competitors help increase the market share of this struggling cruise company?
Or one of their own to boost the occupancy 🤔
That is going to effect the global demand for cruise industries as customers would be weary about travelling due to concern about their own safety and security. Best strategy would be marketing to attract new customers and enter emerging markets.
lOlollolo
🤣🤣🤣
Expected reply of the russian kind
A consultant complaining cinema refreshments are overpriced! that's some cheek.
Hi, I did a much much faster route for the breakeven, since you know, from the start, that to have a breakeven you need a minimum occupancy... So, what I did, much faster and not using such big numbers was: Rev./Pers= ($450+$150)-$100= $500 Breakeven= $600,000/$500 = $6,000/$5 (for those not wanting to deal with large numbers) = 1,200 minimum amount of people on board. 2,000 capacity/1,200 actual occupancy= 60%
ketochi thanks! I hated how she calculated it.
How can the occupancy be the problem if the costs are constant ? They should fall in this case atleast a bit.
Fuel is variable.. it increases and decreases with output (along with wages)
Not really, here the route for ships is fixed and hence fuel even though variable per kms, it still is fixed irrespective of the number of customers on board. You don't change a cruise route/kms depending on customers on board!
Hey guys! could u please recommend me any good website or even books, video tutorials in order to prepare for strategy interviews? Unfortunately at College i am not taught how to interprete charts, diagrams or even think into business issues they way we are required at consulting interviews! Thanks a lot in advance
The McKinsey mind might help
In the second case study, we should also divide the number of tickets into two categories - Weekday sales of tickets and weekend sales of tickets. Because the number of people going for movie will vary on weekdays and weekends.
Prashant Dagar Great point.
" Tomorrow's Back Up visions and Investment Social" is an organization nonprofit, why i have chosen that name ? First of all, he has chosen to be his servant, i have known in the Bible that his only son, Jesus has come On earth to preach and act, the Gospel is not only Word But it's Action. Imagine your brother or sister is hungry, and you have Things to feed him or her, Will you pray or Act ? Some Will pray but like some Act, me, i will act because you have means to take care instead of praying but it's Gospel. We have our brothers and sisters are homeless, suffering, weakness, hungry, naked and son fourth... On October 2016, i have got this vision because i couldn't sleep and wake up with his Awesome vision to help Kids specially and i have chosen to take care of them with their Family. I am so far in the process but i am working on to help them but as we have already known it's an easy process but he never gives a vision without provisions but he is faithful to his vision, a great to save life. There are some organization pretend to help but they enrich on them but i would love to do different But it 's not easy because i Will have other people in the project with me, i don't know but God knows them better than us. Whatsapp : 509-37748846
average performances.
Well I could do it swiftly and calculated 1200 passenger occupancy in just 2 seconds for break-even...But I quickly realised that additional 150 GBP spend was all taken in as profit...what about the cost of products or services provided to customer in lieu of that per passenger revenue...don't think that can be accounted in fixed costs. Have many other ideas too - fill the rest of the missing occupancy even at discounted rates and you still profit more given you stay above the break-even barrier for that segment - many ways to achieve it.
such a boring answer! the client would've already thought about the classic causes, what he'd be looking for is something they don't typically see because they are overly involved in the business. boring.
Break-even Question: Costs = Revenue 600,000 + 100(people) = 450(people) + 150(people) people = 1,200 = 60% of capacity.
thank you
Fuel is a fixed cost. First of all, it would vary depending on a number of passengers and distance traveling. Second, the price of gas is changing In addition, if the number of passengers has declined, that means the cost has decreased
can someone tell me did she get the offer based on her performance---if it is a real interview
Wow this is such a bad interview.... ok its getting a bit better later on.. Nice video though! Thx!
on which basis do you say that?
I You my son he was my father and I said I would never know if he was a child or 👶 he would be my favorite person ever to be have Ktytu is r the way you are and you are the one ☝️ and I love think 💭 will get be you the only person I know want a man to know about you
Why not just acquire another company to boost market share. If the whole market is depressed you should be able to buy another company at a discount. Or even better acquire a Cruise company targeted toward the younger generation. Also just increase costs on the ship, your customers can't go anywhere while onboard and if you are discounting tickets already you need to make back money while on the ship. Customers can't be price sensitive while on board because you own 100% of the market for anything they could buy.
They fucked after this
lmao
I was reminded of David Brent the entire time. "You've charmed me."
Lol, she got the way to increase market share completely wrong, is this a real interview?
To increase profit of a Cinema stop showing shit movies.
lolol not consultant material. Your thought, "if every single movie coming out of Hollywood is "shit", what then?" shut down completely? shut down for a few months when "good" movies come out? If it's temporary, there are no guarantees "good" will ever come.
It was a joke u idiot
Fuel is a variable cost.
It's both. Consider a cruise ship with 10,000 people and a ship with 100 people. It would take more fuel for the ship with 10,000 people considering their weight and everything but if you consider the entire ship sailing, it may or may not be a huge difference. That ONE ship will still sail regardless of the occupancy rate. but overall it will depend on how far they sail and such so I think in an interview setting you can choose one.
It's a variable cost in the sense that it varies with the number of trips made. It's not a fixed periodic cost.
Uhm, depends on the business. In this case, I tend to agree with the fixed cost definition. People weight on a cruise ship is absolutely trivial.
madhur kalgutkar I believe it's a fixed cost. With the cruise business, they will generally be visiting the same locations, so after a few times the total fuel cost can be accurately measured. If the cruise line stops in the same locations each time, then they can classify it as a fixed cost.
I worked in a yacht company and I can tell you is a fixed cost. Since the variation by the amount of people is negligible compared with the one caused by the distance.
It was a good video. BUT, if the costs has been constant for the 4-5 year period. You should definitely look towards reducing both fixed and variable cost which will definitely have a great impact on the Margins. Secondly, if you are targeting newer age group, this also means that you need to change the destinations location. third, rather than getting new cruize, why can't we acquire existing cruize from the market and increase market share as the industry is seeing a decline ( 10% market share means you are a sizeble company)
You stole my idea. :P
Well to answer why you should not try to increase share in a declining market means that you are defacto buying more of something that will get less valuable over time.
probably, But i would like to think that any market would have at least 4-5 predominant ones with a higher market share. and a quiet of bit of inefficient small ones. Industry decline could be a economic cycle effect and will bounce back and this is the best time for acquisition. and introduce a newer brand for different age segment.
👏🏽👍🏼
Total costs have declined as passenger numbers have fallen. I think what they meant was the variable cost per passenger hasn't changed.
Well if total costs haven't changed (as mentioned by the interviewer) then the number of passengers haven't changed as well. So the problem isn't the number of passengers.
not true. Total cost might stay the same with number of passengers went down
Why is she subtracting the the Fixed Costs (600,000) from the variable costs? Aren't you supposed to Add both Fixed Costs + Variable Costs in order to get Total Costs?
She isn't! Thats the complete equation. Try doing the calculation on your own, you'll get the same answer.
If you do the math like this: profit = RV - (FC + VC) you will get after removing the brackets () in the end the same result. + becomes - and it is the same, :)
While the constant cost doesn't imply the problem is not from cost side. As technology evolves, it is better to compare cost ratio of client to industry. If cost ratio is much higher than industry level, that implies that the client needs to work on cost optimization. Cost optimization is the hardest job for company!!! Second, as recommending client focusing on younger customers to increase the occupancy, the cost will definitely goes up!!!
There is a mistake in the occupancy calculation diagram (adding the word occupancy as an additional term), even though the calculation itself is correct.
Marcus Soori agreed.