Misleading information in Part II. Analysis 4?

Question

The additional information here states that SuperBurger sells 350K units per store at $3.5.

This does not seem to corroborate the tables shown in the exhibits. According to the tables, revenues per store for SuperBurger amount to $5,500m/5,000 = $1.1m per store.

Calculating revenues per store using the information provided in part 4 of the analysis section yields $3.5*350,000 = $1.225m.

How is this explainable? Did I miss something else? It's a bit picky, I know, but this info is particularly misleading because I would have calculated cannibalized profit following another approach:

15% * $5,500m * 6.3% = $59.975m in total and therefore $0.01m or $100k per store (taking 5,000 stores from exhibit 1 and 6.3% profit margin from exhibit 2). The solution states $110.25k per store.

It seems this last analysis section is supposed to be a standalone question. In that case, it should have been made clearer to the interviewee.

Would be helpful to receive some feedback on that, thanks in advance! :)

Answer 1

Hi Dennis,

Agreed that it's misleading. Remember, cases are created by….humans!

I would say every other case has a mistake in it. Just be aware that they are not perfect and are moreso a tool for training/practice.

Also remember…your interviewers aren't perfect either ;)

Answer 2

Hi Dennis,

I think this is an interesting question that may be relevant for many people. I would be happy to share my thoughts on it:

Yes, it seems to be wrong. I don't know why they made the mistake, but it doesn't align with the numbers in the charts.

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

Best,

Hagen