Case Interview - How to get a sense of a potential revenue of a new business service?
I've recently interviewed with a technology company for an Analyst role. I thought the interview should tend to be tech focused, while the interviewers asked me a lot consulting case questions that I had not prepared for. So, I post these case questions here and hope to learn from great answers.
Our client is a real estate agency with regional offices in Boston, New York city, Washington DC, and Philadelphia. It focuses on helping people sell homes and find houses for sale & apartments for rent. The company aims to launch a new home-selling service by the end of this year -- charging home-sellers 0.5% ~ 2% listing fee to provide comprehensive cleaning service that prepares their houses for a sale.
1). Is 0.5% ~ 2% listing fees charged reasonable? Why or Why not?
(I said it depends on the segmentation of home-sellers and the values of houses for sales..)
Then, the interviewer asked me how 0.5% ~ 2% should be charged to different home-sellers or house segments..why or why not...and if we should use a fixed % as a service charge for all segments.
2). Let's say we want to use 1.5% listing fee as service charge. Please estimate the annual potential revenue from this new service for the office in Washington DC.
3). Now, do you still think this new service is promising? What would you say to the CEO of this agency?
4). Our client has another challenge with its DC office. This office has 5 local real estate agents. The volume of homes for sales and the volume of deals are both increasing in the DC metro area while the revenue of DC office is decreasing. What could be the major causes? Why or Why not?
5). Do you suggest to hire more agents or cut off some headcounts in DC office? What is a major factor when you consider to increase or reduce a headcount?
6). You mentioned the commission. That sounds interesting. In this agency, a buyer’s agent receives 2% in commission and a seller’s agent receives 3% in commission. What's your thought?
7). Last question. This agency is planning to open their first West Coast office in Los Angeles. Do you have any suggestions or considerations for this expansion plan?
Hey goodluck2me77, sorry about the delay, but are any of these useful:
I hope those threads give you a bit more insight.
Hey, thank you so much for sharing these threads with me!
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