Case Study Prompt
Two years ago a venture capital company purchased a cable TV system that had access to 3 million households in Arizona and New Mexico.
The VC firm was attracted to the extremely large subscriber potential, and the potential for considerable return. Unfortunately, they have failed to turn a profit in the past three years. The cable system features fiber-optic lines to each street corner, but not yet direct to the home. Fixed costs are extremely high due to the distance between cities in the system. The debt and maintenance costs are also higher than system in metropolitan areas.
The current system is only at 43% capacity (# of subscribers) vs. a 63% industry average. Low subscription rate (43%) is not attributable to life-style – people in the service area actually watch more TV than the national average.
You have been hired to determine if they can turn a profit or if they should sell the business.
Case Study Overview
Your client is a venture capital firm that has made a recent acquisition and is looking to you to help it determine if the cable TV system they purchased and turn a profit or should be offloaded. In this Strategy& style company case study, it is up to you to familiarize yourself with the market, dig into profitability and find potential solutions for their problems. They are looking to you to help them make a difficult decision.
Are you preparing for a first round Strategy& interview? We recommend using the Profitability Framework to solve this company case study, but remember that the best case interview candidates add their own business acumen to create a custom frameworks specific to the problem at hand.
There are no math exhibits in this case. The qualitative difficulty is 2 out of 4, which makes this a beginner company case study you would typically see in a first round interview.
Strategy& Interview Tips
What does Strategy& look for in its case interview candidates? Innovation and a knack for creatively solving problems.
Make sure you are comfortable working outside basic frameworks and finding unique solutions to problems you may face.
In this case, focus on a couple of things:
- Time yourself throughout the case (2min to build structure and 2min to present it; 2min each for a brainstorming question; 2min for final recommendation)
- Focus on finding one area you can improve upon for next time.
For out-loud practice with an expert, book an hour with an ex-MBB coach.
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