www.preplounge.

com

McKinsey 1st Round

Case - Party Burger
Topic Difficulty Style
Capacity change, Growth Intermediate Interviewer-led (McKinsey
strategy, Operations strategy, style)
Profitability analysis

Case Prompt

Our client is Party Burger, a restaurant chain in the US serving premium burgers and salads for
lunch. They rely on the quality of their products to attract customers, and they are usually fully
booked. However, reviews have pointed out that the service offered could be improved. Our client
is concerned this could impact their sustainability long term.

Payment ID: 51266 (atariq2@babson.edu)

Page 1
Payment ID: 51266 (atariq2@babson.edu)

Page 2
Exhibits

Payment ID: 51266 (atariq2@babson.edu)

Page 3
Payment ID: 51266 (atariq2@babson.edu)

Page 4
Part 1 - Case Opening

Q1: How would you improve the customer experience?

Additional Information

Information to be shared only under request:

The client feels they are losing control of their service. They aim to better understand the
problem and solve it.
The chain includes 10 owned restaurants spread across different cities.
On average, the restaurants’ rating for the service is 2.5 out of 5 stars, while other factors
are rated 4 out of 5 or more.
If asked about the reviews, please provide Exhibit 1.

Solution

Example of an excellent answer (score: 2)

GOAL CLARIFICATION

Payment ID: 51266 (atariq2@babson.edu)

Page 5
An excellent candidate would clarify the objective of the client.

STRUCTURE

1. Identify where the problem is

a. Identify the part of the flow with issue (e.g., service, kitchen, etc.)
b. Identify how it is done
c. Compare metrics with past data or competitors
2. Understand the reason for the problem
a. Internal reasons
i. Service inefficiency
ii. Kitchen inefficiency
iii. Communication problems
b. External reasons
i. Excess customers
ii. Delays by suppliers
iii. Competitors e.g., stealing experienced employees
iv. Regulation e.g., Pandemic measures are slowing down the service
3. Identify a solution
4. Risks and next steps

The candidate may state a hypothesis when presenting the structure. The structure may differ
from this but it should follow a rationale and answer the question, considering the client's goal.

COMMUNICATION

An excellent candidate should present clearly the different areas in a structured way.

Moreover, the candidate should clearly present the rationale for why he/she wants to
explore a particular point, connecting the answer to the objective of the client.

Suggested score

An excellent candidate should:

1. Clarify the goal of the client

2. Include the main elements as presented above in the structure
3. Communicate the structure in a clear way

Payment ID: 51266 (atariq2@babson.edu)

Page 6
Recommended score calculation: starting from 2, decrease the score by 0.5 points down to 0
for any of the following:

The candidate did not clarify the objective

The candidate did not include two or more of the areas described above
The candidate included multiple useless elements in the structure
The candidate communicated the structure in a disorganized way or without a clear
connection to the goal

Part 2 - Understand the Problem

Q2: Looking at Exhibit 2 and Exhibit 3, what do you think could be the problem of our client?

Additional Information

Note for Interviewer

Show Exhibit 2 and Exhibit 3.

Let the candidate know the exhibits compare stores of similar size in terms of surface
area and workforce.

Payment ID: 51266 (atariq2@babson.edu)

Page 7
Solution

Example of an excellent answer (score: 2)

From Exhibit 2, the candidate should understand that the problem is affecting all the restaurants of
the chain, even if some perform slightly better than others.

From Exhibit 3, the candidate should note that Competitors A, B and C have much better
performances than our client’s average. Competitor D instead seems to be facing similar problems.

The candidate may suggest looking at how our process is different than the one of Competitors A,
B and C.

Suggested score

An excellent candidate should:

1. Take a reasonable amount of time to look at the graphs and ask questions to understand
how to read them
2. Understand the problem is affecting all the restaurants of the chain (internal problem)
3. Understand some competitors do not face this problem
4. Consider analyzing the solutions implemented by the successful competitors

Recommended score calculation: starting from 2, decrease the score by 0,5 points down to 0
for any of the following:

Payment ID: 51266 (atariq2@babson.edu)

Page 8
 The candidate did not repeat the goal
The candidate did not take some time to look at the graph
The candidate did not identify the insights of the graphs (internal problem, not affecting
some competitors)
The candidate did not suggest a way to proceed with the analysis

Part 3 - Identify Solution

Based on what successful competitors do, our client is considering investing in an automated
system to manage orders. The waiter/waitress could communicate the order directly to the
kitchen, cutting down serving time by 20 minutes and reducing the mistakes to 2 per day.

Q3: How do you think these improvements may impact the financials of the restaurants?

Solution

Example of an excellent answer (score: 2)

Revenue side
Quicker service may allow us to serve more customers
Improved service may encourage higher spending per order (e.g., getting
desserts/extras)
Introduce new meals that would require more time with the current setting (new
products)
Improved morale of the team thanks to the automation: less stress and more tips for
them could lead to higher quality service, which in turn could result in better reviews
and more customers
Faster service could spread word-of-mouth and thus increase the number of customers
Cost side
Reduced food waste thanks to the reduced mistakes
Reduced staff (as we are already working at full capacity, there won’t be extra staff
needed)
Higher costs due to the implementation of the new system

Suggested score

Payment ID: 51266 (atariq2@babson.edu)

Page 9
An excellent candidate should:

1. Take some time to think of the question

2. Identify at least 3 possible answers
3. Structure the ideas and illustrate them clearly
4. Present ideas that are tailored to the situation of the restaurants

Recommended score calculation: starting from 2, decrease the score by 0.5 points down to 0
for any of the following:

The candidate did not take some time to answer

The candidate did not structure the ideas
The candidate provided few answers / answers that are too generic / answers that are not
focused on the financial side
The candidate did not present them clearly

Part 4 - Math

The upfront investment for the system would be of $8m for all the restaurants. The yearly fee to
pay to the supplier would be equal to 10% of the investment.

Q4: What would the payback time for the investment be?

Additional Information

Note for Interviewer

Show Exhibit 4.

Payment ID: 51266 (atariq2@babson.edu)

Page 10
Information to be shared only under request:

If the candidate forgot the benefits of the IT system, let he/she know it will reduce the
serving time by 20 minutes (we can assume occupation time would drop from 1.5 hours to 1
hour) and that the mistakes will drop from 11 to 2 per day.
The only two effects we will consider are these two (i.e., ignore higher spending on desserts
or cost saving due to waste reduction).
The occupancy rate would remain close to 100%
The 10 restaurants are open 350 days per year.
All tips are kept by the waiters and do not result in additional revenues for the restaurant.

Solution

Example of an excellent answer (score: 2)

To compute payback time, calculate (i) additional margins due to extra customers (ii) costs per
year (iii) payback time.

i. Additional margins due to extra customers

Number of tables served (as-is) = 20 * 3h / 1.5 h = 40 tables/day

Number of tables served (to-be) = 20 *3h / 1h = 60 tables/day
Additional tables per day = 60-40 = 20 tables/day
Additional customers per day = 20*4 = 80 customers/day

Payment ID: 51266 (atariq2@babson.edu)

Page 11
 Additional daily margins in a restaurant = 80*10 = 800 $/day
Additional margins for all restaurants in a year = 800*350*10 = 2.8m $/year

ii. Costs per year

Upfront investment = $8m

Yearly fee = 8m * 10% = $800k

iii. Payback time = 8m / (2.8m – 0.8m) = 4 years

Note: it is not necessary to compute additional tips since they would go to waiters.

Suggested score

An excellent candidate should:

1. Ask for additional information

2. Take a reasonable amount of time to structure the computation
3. Compute the solution clearly
4. Comment on the results

Recommended score calculation: starting from 2, decrease the score by 0,5 points down to 0
for any of the following:

The candidate did not ask for additional information

The candidate did not set up the analysis correctly or clearly
The candidate made mistakes in the computation
The candidate did not comment on the implications of the result

Part 5 - Recommendation

Q5: Can you sum up the case for our client?

Solution

Example of an excellent answer (score: 2)

The candidate should:

Payment ID: 51266 (atariq2@babson.edu)

Page 12
 1. Recap the objective
2. Provide an answer-first approach to the question asked
3. Mention risks and the next steps to take

RECAP THE OBJECTIVE

“Our client asked us to understand the reason behind the negative reviews and provide ideas to
solve it.”

ANSWER-FIRST APPROACH TO THE QUESTION

“Based on our analyses, service teams seem to lack the ability to communicate effectively with the
team in the kitchen. A possible solution would be to invest in an automated system to manage
orders. This would imply a reduction of the service time and of the number of mistakes, resulting
in:

Additional yearly margins of $2m, net of the fee for the software
Increased customer satisfaction
Increased tips for our staff, among others.

Moreover, the chain would be able to break even within 4 years.”

RISKS AND NEXT STEPS

“Possible risks include variations of the estimates, which rely on the fact that we would serve more
people in the same amount of time, making less mistakes. However, changes in this data may
impact on the outcome of this analysis. We recommend if possible trying out this solution in one
restaurant first, before using it in all stores, in order to identify possible problems.”

Recommended score calculation: starting from 2, decrease the score by 0,5 points down to 0
for any of the following:

The candidate did not have an answer-first approach

The candidate did not mention all the key reasons supporting the investment
The candidate presented the analysis in a disorganized way
The candidate did not conclude the recommendation proactively, mentioning the next steps

Final Remarks

Payment ID: 51266 (atariq2@babson.edu)

Page 13
Thanks for completing the case!

------------------------------------------------------------------------------------------------------------------------

Looking for free tips? Click on the links below to find more information about some of the most
common topics in consulting:

1. 11 New Consulting Trends You Should Know

2. 4 Ways to Land an MBB Interview
3. Making $ in the Middle East - 16+ Data Points on Consulting Salaries in Dubai and Co
4. How to Make $1M+ by Working in Consulting
5. Top 15 Consulting Firms by Revenues and Prestige
6. How to Master the 6 Games of the McKinsey Problem Solving Game
7. 10 Must-Know Tips to Master the BCG Online Case
8. Consulting Firms in Singapore - Learn Everything About 18 Top Consulting Firms in the
Lion City
9. Revealed: The Real 32 MBB Target Schools for US Applicants
10. Salaries of the Best 16 Consulting Firms in Singapore - Everything You Need to Know
11. BCG Potential Test - 9 Exclusive Tips

------------------------------------------------------------------------------------------------------------------------

For any questions, please drop me a message here, happy to help.

Best,

Francesco

Payment ID: 51266 (atariq2@babson.edu)

Page 14