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Starter: Farmacias Xelumi: do the doctor's offices pay?
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.
Farmacias Xelumi, a Mexican pharmacy chain, added a doctor's office next to 300 of its stores a year ago. Profit per store has not improved. The exhibit shows an average store before and after. Is the model working, and what should the chain do?
Format note: Difficulty: Starter. Format: interviewer-led, with an exhibit. Industry: Pharmacy retail and health. Region: Mexico. 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: What does the doctor's office offer?
Answer: A general doctor sees patients next to the pharmacy for a low fee of MXN 50 per consultation.
If asked: Who pays for the doctor and the room?
Answer: The chain does, about MXN 90,000 a month per store, including the doctor's pay.
If asked: Did anything else change?
Answer: No. Ticket size and margins are the same as before.
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.
The office brings consultation fees and extra prescriptions. My hypothesis is that too few patients fill their prescriptions in the store to cover the doctor's cost.
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.
- Change in store profit = consultation fees + extra pharmacy margin - office cost
- Consultations and fees
- Key: Extra pharmacy tickets from prescriptions
- Cost of the doctor and the office
Exhibit 1
Reveal to candidate: when they ask for this data, say "Open Exhibit 1" (they press "Show exhibit 1" on their screen).
| Measure | Before | After |
|---|---|---|
| Consultations a month | 0 | 1,200 |
| Consultation fee (MXN) | 0 | 50 |
| Pharmacy tickets a month | 6,000 | 6,400 |
| Average ticket (MXN) | 250 | 250 |
| Gross margin on pharmacy sales (%) | 30 | 30 |
| Doctor and office cost (MXN a month) | 0 | 90,000 |
So-what
The office brings many consultations but only 400 extra tickets, so fees and extra margin just cover its cost.
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: Consultation revenue
What a strong candidate does: 1,200 consultations at MXN 50.
Consultation revenue (MXN a month): 1,200 × 50 = 60,000
Step 2: Extra pharmacy margin
What a strong candidate does: 400 more tickets at MXN 250 and a 30 percent margin.
Extra pharmacy margin (MXN a month): (6,400 - 6,000) × 250 × 0.3 = 30,000
Step 3: Net effect
What a strong candidate does: Fees plus extra margin, minus the MXN 90,000 cost.
Net effect (MXN a month): 1,200 × 50 + (6,400 - 6,000) × 250 × 0.3 - 90,000 = 0
Step 4: Share of consultations that bring a ticket
What a strong candidate does: 400 extra tickets from 1,200 consultations.
Share bringing a ticket (%): (6,400 - 6,000) ÷ 1,200 × 100 = 33.33
Step 5: Margin per extra ticket
What a strong candidate does: MXN 250 at a 30 percent margin.
Margin per ticket (MXN): 250 × 0.3 = 75
Step 6: Curveball: sending prescriptions to the counter
What a strong candidate does: Interviewer: "A pilot sent prescriptions from the doctor straight to the pharmacy counter. In the pilot, half of all consultations led to an extra ticket."
Net effect with 50 percent capture (MXN a month): 1,200 × 50 + 1,200 × 0.5 × 250 × 0.3 - 90,000 = 15,000
Step 7: Across 300 stores
What a strong candidate does: For a year, in MXN million.
Gain across 300 stores (MXN million a year): 300 × 15,000 × 12 ÷ 1,000,000 = 54
Step 8: Consultations needed at 50 percent capture
What a strong candidate does: Each consultation is then worth MXN 50 of fee plus half of MXN 75 of margin.
Break-even consultations a month: 90,000 ÷ (50 + 0.5 × 75) = 1,029
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
The model breaks even today and can be made profitable. First, each store earns MXN 60,000 a month from fees and MXN 30,000 of extra pharmacy margin, which exactly matches the MXN 90,000 cost. Second, only one in three consultations leads to an extra ticket, so most prescriptions are filled somewhere else. Third, if half of consultations lead to a ticket, as in the pilot, each store gains about MXN 15,000 a month, or about MXN 54 million a year across 300 stores. Roll out direct sending of prescriptions to the counter, check that stock matches what the doctors prescribe, and close offices in stores that stay below about 1,030 consultations a month even with the higher capture.
Risks a strong answer names: Patients may feel pushed to buy in the store, which could hurt trust; Doctors may leave for better-paid jobs.
Next steps: Compare prescriptions written with tickets sold, by store; Roll out prescription sending in 30 stores and track capture for three months.
Strong versus weak
A strong answer
Built the store's change in profit from three parts, found the weak link (prescription capture), and sized the fix across the chain.
A weak answer
Said the offices do not work and should close, without seeing that they break even and could earn more.
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.