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Starter: Jikaro Solar: more systems sold, less margin
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
Jikaro Solar sells solar home systems in Kenya on a pay-as-you-go basis. It sold 50 percent more systems this year, but its total margin fell. The exhibit shows the key figures. What happened, and what should it do?
Format note: Difficulty: Starter. Format: interviewer-led, with an exhibit. Industry: Off-grid energy and consumer finance. Region: Kenya. Interview length: about 25 minutes. The company is fictional and all figures are illustrative.
2. Answers to clarifying questions
Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.
If asked: How do customers pay?
Answer: They pay a small deposit, then daily or weekly by mobile money over 12 months, KES 24,000 in total. If they stop paying, the system switches off remotely.
If asked: What happens when a customer stops paying?
Answer: On average, customers who stop have paid about half the price. In this case, we do not resell used systems.
If asked: What changed this year?
Answer: Sales teams moved into new rural areas where many customers are farmers whose income comes mostly at harvest.
3. The hypothesis a strong candidate states
Listen for an early, testable guess like this one. It does not need to match word for word.
Sales grew 50 percent, so the fall must come from the margin on each system. My hypothesis is that more new customers stopped paying, and that serving remote areas cost more.
4. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Margin = systems sold x (cash collected per system - cost per system)
- Systems sold
- Key: Cash collected: full payers and customers who stop
- Cost per system: product, sales, delivery
Exhibit 1
Reveal to candidate: when they ask for this data, say "Open Exhibit 1" (they press "Show exhibit 1" on their screen).
| Measure | Last year | This year |
|---|---|---|
| Systems sold | 40,000 | 60,000 |
| Full price paid over 12 months (KES) | 24,000 | 24,000 |
| Customers who pay in full (%) | 90 | 75 |
| Share of the price paid by customers who stop (%) | 50 | 50 |
| Cost per system, including sales and delivery (KES) | 15,000 | 16,000 |
So-what
Sales grew, but fewer customers paid in full and each system cost more to sell, so total margin fell.
5. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: Cash collected per system, last year
What a strong candidate does: 90 percent pay the full KES 24,000; the other 10 percent pay about half.
Cash per system last year (KES): 24,000 × (0.9 + 0.1 × 0.5) = 22,800
Step 2: Cash collected per system, this year
What a strong candidate does: Only 75 percent pay in full.
Cash per system this year (KES): 24,000 × (0.75 + 0.25 × 0.5) = 21,000
Step 3: Margin per system, last year
What a strong candidate does: Cash collected minus KES 15,000 of cost.
Margin per system last year (KES): 24,000 × (0.9 + 0.1 × 0.5) - 15,000 = 7,800
Step 4: Margin per system, this year
What a strong candidate does: Cost rose to KES 16,000 as sales moved to remote areas.
Margin per system this year (KES): 24,000 × (0.75 + 0.25 × 0.5) - 16,000 = 5,000
Step 5: Total margin, last year
What a strong candidate does: 40,000 systems.
Total margin last year (KES): 40,000 × (24,000 × (0.9 + 0.1 × 0.5) - 15,000) = 312,000,000
Step 6: Total margin, this year
What a strong candidate does: 60,000 systems.
Total margin this year (KES): 60,000 × (24,000 × (0.75 + 0.25 × 0.5) - 16,000) = 300,000,000
Step 7: Curveball: payments that follow the harvest
What a strong candidate does: Interviewer: "A pilot let farmers pay more after harvest and less in the months before. In the pilot, 85 percent paid in full." Candidate: "Margin per system would be:"
Margin per system with harvest plans (KES): 24,000 × (0.85 + 0.15 × 0.5) - 16,000 = 6,200
Step 8: Total margin with harvest plans
What a strong candidate does: On this year's 60,000 systems.
Total margin with harvest plans (KES): 60,000 × (24,000 × (0.85 + 0.15 × 0.5) - 16,000) = 372,000,000
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Total margin fell from KES 312 million to KES 300 million because each system now earns KES 5,000 instead of KES 7,800. First, the share of customers who pay in full fell from 90 to 75 percent, cutting cash collected per system from KES 22,800 to KES 21,000. Second, cost per system rose KES 1,000 as sales moved to remote areas. Third, selling 20,000 more systems was not enough to make up for this. Jikaro should roll out payment plans that follow the harvest in farming areas: if 85 percent then pay in full, margin per system recovers to KES 6,200 and total margin rises to about KES 372 million. It should also check each area's repayment record before sending more sales staff there.
Risks a strong answer names: A poor harvest would hurt repayment in the same areas at the same time; Longer payment plans tie up more cash.
Next steps: Compare repayment by area and by customer type; Extend the harvest-plan pilot to two more farming counties.
Strong versus weak
A strong answer
Looked past the sales growth to cash collected per system, sized both causes, and tied the fix to how customers earn their income.
A weak answer
Recommended more sales staff to sell even more systems, which would add more customers who do not pay in full.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
Total
0 out of 25
Score all five criteria to see the band and the feedback template.