Accenture Case

Hi there,

I would be happy to share my thoughts on your question:

• Can you please provide a proposal that I can review? There is no point in coaches presenting their approaches when it is you who is currently preparing for the interviews and wants to learn how to do it.

You can find more on this topic here: How to succeed in the final interview round.

If you would like a more detailed discussion on how to best prepare for your upcoming interviews, please don't hesitate to contact me directly.

Best,

Hagen

For most profitability problems, I take the following three-step approach, tailoring to the business context shared in the prompt: 

Step 1: Clarify the context and the problem

1. Confirm the timeframe (~2 years, 3-5 years) of the decline and its consistency across locations (same % drop or is one more significant)
2. Understand this restaurant's context and customer segment (e.g., urban vs. rural, high- vs. low-income, type of cuisine, new vs. old spot, whether it offers dine-in and/or takeout and/or delivery, does it serve alc., etc.)
3. Ask if external factors (e.g., economic shifts, city-specific regulations) have been observed before you dive into your framework

Step 2: Diagnose what is driving the profitability decline 

1. Revenue = # of Customers x Avg. Bill x Operating Hours (if dine-in only); add takeout / delivery if applicable (# orders x $/order); dig into: 

• Sales Trends by Location: Identify which locations have declining sales, whether specific days/times or menu items are problematic
• Customer Segments: Has the demographic changed (e.g., reduced visits from high-spending customers, neighborhood experiencing change)?
• Average Bill Size: Is there a reduction in per-customer spending?
• Operating Hours: Have we changed our schedule (time, days of wk.)?

2. Cost = COGS will get you to a gross margin analysis (are my inputs getting more expensive), and SG&A will get you to an EBITDA margin (am I running this restaurant effectively?) -- not expected to get to this level of detail in 2min, but I included a longer list here to give you a sense; fixed/variable split works too 

• Costs of Goods Sold (COGS)
  • Food Costs = Ingredients (raw materials) + Waste/Spoilage
  • Beverage Costs = Alcohol Costs + Non-Alcoholic Beverage Costs
• Selling, General, and Administrative (SG&A)
  • Labor = Salaries (Management) + Hourly Staff Wages + Benefits (Health Insurance, Payroll Taxes, etc.) -- one of the biggest
  • Occupancy = Rent + Utilities + Maintenance/Repairs
  • Marketing = Social Media Ads + Loyalty Programs/Discounts
  • Supplies = Disposable Items + Cleaning Products
  • Technology = POS Systems + Online Ordering Platforms (e.g., Uber, GrubHub, etc.) + Other Software Licenses (e.g., accounting)
  • Licenses and Permits = Operational Permits + Health Certifications
  • Insurance Costs = Property Insurance + Liability Insurance
  • Miscellaneous Costs = Entertainment Costs + Staff Training 

3. External Factors -- if the interviewer says upfront that this is an issue, dig into it first before rev/costs (generally, it isn't the problem because cases are set up to give you some analysis to run on rev/cost issues for the most part)

• Competition: Have competitors launched aggressive promotions or opened nearby locations that offer a differentiated experience?
• Market Trends: Shifts to healthier or more sustainable dining could impact customer preferences, and local/regional economic factors (e.g., inflation, declining purchasing power) could impact overall demand.

4. Other factors to keep in mind

• Staff Productivity: High staff turnover or inefficient labor allocation can increase costs and reduce service quality.
• Supply Chain and Logistics: Delayed deliveries or inconsistent ingredient quality could affect customer satisfaction.

Step 3: Actionable Recommendations (examples) 

Short-Term Fixes

• Revenue Boost: Introduce targeted promotions or city-specific pricing strategies. Reevaluate the menu mix to focus on high-margin items.
• Cost Optimization: Renegotiate supplier agreements or consolidate orders for bulk discounts. Implement waste tracking systems to identify and reduce losses.

Long-Term Solutions

• Customer Retention: Invest in loyalty programs and community engagement (e.g., local events or partnerships).
• Menu Innovation: Launch new offerings based on customer preferences (e.g., plant-based options).
• Operational Excellence: Consider tech solutions for labor management or inventory tracking.

Getting a nuanced understanding of the problem and a solid structure on a consistent basis takes practice and high-quality feedback. If you would like to explore coaching, I'd be happy to set up an introductory chat with you. 

Hey! 

I would do it the following way: 

1. Revenue Analysis
   • Assess sales trends by location
   • Examine average price, volume, and customer segments
2. Cost Analysis
   • Fixed costs: rent, utilities, salaries
   • Variable costs: ingredients, supply chain issues
3. Competitive Landscape
   • Benchmark performance vs. competitors
   • Industry trends (demand shifts, new entrants)
4. Operational Efficiency
   • Staffing/utilization
   • Inefficiencies in procurement or logistics
5. Action Plan
   • Revenue: pricing, promotions, location-specific strategies
   • Costs: renegotiate rents, optimize staff, reduce wastage
   • Long-term: explore menu innovation, loyalty programs

Hope this helps :) Alessa

Hey there, 

Just to add on to the great answers already given, I'd segment the revenue and cost drivers by region, menu items, meal time of day (i.e. Breakfast, Lunch, Dinner), Customer segments (i.e. kids meals, regular adult meals, vegetarian / vegan meals) etc.  

The last 2 points may be only suited for revenue diagnostics and not costs

All the best

Hi there,

Quick tip since I am late to the party here and have seen some replies.

A case framework is the analytical lens you use to understand where the issue of the client is coming from. A framework should not include solutions/actions. 

Hence, areas like Revenue and Cost should be included in this case, however, things like Actions or Actionable steps should not be included as they 

• do not help you understand where the problem is coming from
• are not MECE with the analysis
• look at solutions before you even know what the problem is (= boiling the ocean)

Cheers,

Florian