Interviewer view · keep this screen to yourself
Starter: Desi Crunch: profit on INR 10 biscuit packs has collapsed
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.
Desi Crunch, an Indian biscuit maker, sells most of its volume in INR 10 packs. Profit fell from about INR 100 crore to about INR 20 crore in a year. The exhibit shows the economics of one pack. What happened, and what should it do?
Format note: Difficulty: Starter. Format: interviewer-led, with an exhibit. Industry: Consumer goods. Region: India. 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: Can the INR 10 price change?
Answer: Shoppers expect INR 10 for small packs; changing it risks large volume losses.
If asked: What volume do we sell?
Answer: About 100 crore packs (1 billion) a year, flat.
If asked: What are fixed costs?
Answer: About INR 100 crore a year, flat.
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.
Wheat, sugar, and oil prices have been volatile. My hypothesis is that ingredient costs rose while the INR 10 price stayed fixed, squeezing contribution per pack.
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.
- Profit = packs x contribution per pack - fixed costs
- Price per pack (fixed at INR 10)
- Key: Variable cost per pack: ingredients, packaging, trade margins, other
- Fixed costs
Exhibit 1
Reveal to candidate: when they ask for this data, say "Open Exhibit 1" (they press "Show exhibit 1" on their screen).
| INR per pack | Last year | This year |
|---|---|---|
| Price | 10 | 10 |
| Ingredients (wheat, sugar, oil) | 4 | 4.8 |
| Packaging | 1 | 1 |
| Distributor and retailer margins | 2.5 | 2.5 |
| Other variable costs | 0.5 | 0.5 |
So-what
Only ingredients moved, up INR 0.8 per pack, which cut contribution from INR 2.0 to INR 1.2 on a billion packs.
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: Contribution per pack, last year
What a strong candidate does: INR 10 minus all variable costs.
Contribution last year (INR): 10 - 4 - 1 - 2.5 - 0.5 = 2
Step 2: Contribution per pack, this year
What a strong candidate does: Ingredients rose to INR 4.8.
Contribution this year (INR): 10 - 4.8 - 1 - 2.5 - 0.5 = 1.2
Step 3: Profit last year
What a strong candidate does: 100 crore packs x INR 2, minus INR 100 crore of fixed costs (in INR crore).
Profit last year (INR crore): 100 × 2 - 100 = 100
Step 4: Profit this year
What a strong candidate does: Same volume at INR 1.2 per pack.
Profit this year (INR crore): 100 × 1.2 - 100 = 20
Step 5: Size of the ingredient rise
What a strong candidate does: Ingredient cost per pack rose by:
Ingredient cost rise (%): (4.8 - 4) ÷ 4 × 100 = 20
Step 6: Keep INR 10 by using fewer grams
What a strong candidate does: To bring ingredient cost back to INR 4.0 at today's prices, the pack must hold this much less.
Weight reduction needed (%): (1 - 4 ÷ 4.8) × 100 = 16.67
Step 7: Curveball: a rival advertises "more biscuits for INR 10"
What a strong candidate does: Interviewer: "A rival keeps its pack size and advertises it. Suppose we lose 10 percent of volume after reducing grams." Profit with contribution back at INR 2:
Profit after the change (INR crore): 100 × 0.9 × 2 - 100 = 80
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
The fall comes entirely from ingredient costs, up 20 percent while the INR 10 price stayed fixed. First, contribution per pack fell from INR 2.0 to INR 1.2, which on a billion packs cuts profit by INR 80 crore. Second, raising the price is risky at a price point shoppers treat as fixed, so reduce grams per pack by about 17 percent to restore contribution. Third, even if a rival's advertising costs 10 percent of volume, profit recovers to about INR 80 crore. Also buy key ingredients further ahead to smooth price swings, and raise prices on larger packs, where shoppers are less sensitive.
Risks a strong answer names: Shoppers may notice smaller packs and switch; Ingredient prices may rise again.
Next steps: Test a smaller pack in two states and track volume; Agree six-month supply contracts for wheat and oil.
Strong versus weak
A strong answer
Found the one line that moved, respected the INR 10 price point, sized the grams change, and tested the rival's response.
A weak answer
Recommended raising the price to INR 12 without asking whether the price point could move.
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.