Capital One Case Study Essay Example for Free

Capital One subject area Study Essay What is a gaucherie interview? The Case call into question What specific skills does it assess? How to prepare for a case interview? An interactive example.What is a Case reference anyway?The Case hearing Simulation of a business problem. Similar to what our associates encounter every day. Series of open-ended questions. Theyre designed to stimulate your conceptual, quantitative, analytical and most importantly creative abilities.The Case InterviewThere are several types of cases. Each is designed to assess different skills.Classic Case The Case Interview Should an formation add capacity? How should an organization react to a new competitor? Should an organization enter/exit a new/old market?Measures Your freehanded functional skills Your big- portraying perspective Your comfort with detail and analysisSpecial Case The Case Interview Why are manhole covers round? Whats the estimated weight of a Boeing 747? What will interest c ounts do next?Measures Your comfort with ambiguous challenges Your level of creativityThe Case InterviewWhat are we looking for? Logical skills analytic/reasoning skills Conceptual problem-solving abilities Critical path thinking FlexibilityWhat do we mean by. .The Case InterviewProblem-solving ability? Can you identify the appoint issues of the case while accurately and methodically reaching the solution? Critical path thinking? Can you use the clues that build on each early(a) while staying on track and focusing on whats relevant? Flexibility? . Can you adapt your answers to a changing situation?The Case InterviewWhat do you need to bring?Your logical business sense The Case Interview How do decreasing meteal costs affect pelfability? What raise will fixed costs have on the result?Your mathematical aptitudeFrom basic mathematics to. Algebra Probability Weighted averages Unit conversionYour strategic interpretation skills The Case InterviewCan you Interpret your answers impact? Assess alternatives? Keep a grasp on the big picture as well as the minor details?Your presentation skillsCan you. Clearly state your thoughts and synthesize culture? Explain how your answer changes in the organization of changing vari adequate to(p)s? Defend your answer?The Case InterviewBe prepared Lets work through a case together.Background developmentThe Case Interview You are a manager at a company that markets various products and services and that is looking to diversify You receive some(prenominal) information indicating magazine publishing may be interesting You are considering developing a new magazine but are not sure how advantageous it might be What are some of the issues you must consider when evaluating the magazine business?Things to considerThe Case Interview Defining the target market ambition of competitors, fragmentation, brand name Build off of core competencies Barriers to entry Business cycle stage Method of measuring viabil ity Opportunity costOur next timbre is to understand the economics of the business. What are the profit drivers in the magazine publishing business?The Case InterviewMain profit drivers of the publishing business accept Revenue Sources Subscriptions Newsstand sales Advertising Customer lists Internet Costs Printing Distribution Content Development Marketing/ promotionsThe Case InterviewThrough some initial research you have been able to determine the following You can charge 25 for an annual subscription of 50 issues You can generate 1 in advertising revenue per issue for each subscription Printing and distribution costs are 1 per copy per issue Content development costs endure 1 million per yr Lets ignore newsstand sales for now Lets ignore marketing expenses for now How much profit will yougenerate a year from one incremental subscription?Lets figure it out together. The Case InterviewSubscription revenue per year = 25 Advertising revenue per year = 50 1/issue x 50 issues Yearly production and distribution costs = 50 kale from one incremental subscription = 25 25 + 50 50 How many subscriptions would we need to sell in order to breakeven on this conjecture?The Case InterviewHow many subscriptions do we need to sell to break even?Profit (contribution margin) = 25 per subscriptionMagazine content development = 1 million per yearBreakeven = 1 million/25 = 40,000 subscriptions Given you need 40,000 subscriptions to breakeven, do you move forward?What about marketing costs? The Case InterviewYour company has expertise in direct mail solicitation so you decide to use that method to market your new magazine. Each piece of mail costs 0.50. You are able to achieve a 2% response rate. How much does it cost you to sign up a subscriber?Cost per subscriber calculation The Case InterviewCost of mailing/response rate = Cost to sign up one subscriber 0.50/2% = 25 per subscriber Another way to answer for cost per subscriber Assume you mail offer to 100 people Costs = 50 (0.50 x 100 people) Responders = 2 (2% of 100) Cost per responder = 50/2 or 25 How will this affect your breakeven calculation?New break even calculation The Case InterviewOld contribution margin Marketing costs New contribution marginNew contribution margin = 25 25 = 0 OuchWhat can we do to make this venture better?Some possible considerations The Case Interview Raise subscription prices Raise advertising rates Reduce production costs Increase response rate Make each response matter more Consider reformals and multi-year subscriptionsThe Case InterviewRenewals look like an obvious avenue to explore In the surmount case scenario, zero cost to acquire with no drop in revenuesHow might you encourage renewels?Some possible options The Case Interview Price promotion Competitions Marketing Free giftsThe Case InterviewSome market testing gives you 2 possible options1) Do nothing 50% of existing subscribers will renew each year2) Offer a free second year subsc ription 75% of existing subscribers will renew each year