Interviewer view · keep this screen to yourself

Suburban stores for a Singapore cafe chain

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

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

A cafe chain has 20 stores in central Singapore and is considering 10 stores in suburban housing estates. Each suburban store is expected to bring in SGD 600,000 of revenue a year at a 15 percent store-level cash margin, and costs SGD 500,000 to open. The table below compares a central store today, the suburban forecast, and an early estimate for a smaller kiosk. Should it go ahead with the suburban plan?

The prompt refers to Exhibit 1. After reading it, say: "Open Exhibit 1 now."

Format note: Interviewer-led: the interviewer shows the table and asks, in order, whether one suburban store passes the hurdle, what would have to change, and what you recommend.

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: Is the 15 percent margin store-level cash profit, after store rent and staff but before head-office costs?
Answer: Yes.
If asked: What payback does the company require on new stores?
Answer: Three years or less.
If asked: Would suburban stores take customers from the city stores?
Answer: Management expects very little overlap, so ignore it for now.

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.

Suburban rents are lower but so is foot traffic. My hypothesis is that revenue per store is the swing factor, so I will test whether one store earns back its opening cost within the three-year hurdle.

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.

Does one store pass the three-year hurdle?This comes from payback = opening cost / yearly cash profit per store, where cash profit = revenue x store margin.
- Cash profit per store per year
- Key: Payback versus the hurdle
- If it fails: the revenue or opening cost that would pass

Exhibit 1

The prompt uses this exhibit, so the candidate opens it right after you read the prompt ("Show exhibit 1" on their screen).

Store economics by format (SGD, per store)

Store economics by format (SGD, per store)
Store format	Revenue (SGD a year)	Store-level cash margin (%)	Opening cost (SGD)
Central store (today, actual)	1,400,000	18	450,000
Suburban store (forecast)	600,000	15	500,000
Station kiosk (early estimate)	350,000	20	150,000

So-what

The suburban store costs more to open than a central store but earns less than half the revenue, so it cannot meet a three-year payback. The kiosk is much cheaper to open.

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: Benchmark: a central store
What a strong candidate does: Read the first row: SGD 1.4 million of revenue at an 18 percent margin pays back its SGD 450,000 in under two years. That is why the chain wants to grow.
Central store payback (years): 450,000 ÷ (1,400,000 × 0.18) = 1.79
Step 2: Cash profit per store
What a strong candidate does: SGD 600,000 of revenue a year at a 15 percent store-level cash margin.
Cash profit per store (SGD a year): 600,000 × 0.15 = 90,000
Step 3: Payback
What a strong candidate does: SGD 500,000 to open, earning SGD 90,000 a year: about 5.6 years, well above the three-year hurdle.
Payback (years): 500,000 ÷ 90,000 = 5.56
Step 4: The full plan
What a strong candidate does: Ten stores would need SGD 5 million of capital to earn SGD 900,000 a year, with the same slow payback.
Capital for 10 stores (SGD): 10 × 500,000 = 5,000,000
Step 5: Revenue needed to pass
What a strong candidate does: To pay back in three years, a store must earn SGD 500,000 / 3 a year, which at a 15 percent margin needs about SGD 1.1 million of revenue, almost double the forecast.
Revenue needed per store (SGD a year): 500,000 ÷ 3 ÷ 0.15 = 1,111,111
Step 6: Opening cost that would pass
What a strong candidate does: Or keep the forecast profit of SGD 90,000 a year and ask how much a store could cost to open and still pay back in three years.
Maximum opening cost (SGD): 90,000 × 3 = 270,000
Step 7: Test the kiosk estimate
What a strong candidate does: The third row: SGD 350,000 of revenue at a 20 percent margin earns SGD 70,000 a year on an opening cost of SGD 150,000, well under the SGD 210,000 that three years of its own profit would cover.
Kiosk payback (years): 150,000 ÷ (350,000 × 0.2) = 2.14

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

Do not approve the 10-store plan as designed. First, each suburban store would take about 5.6 years to pay back, well above the three-year hurdle, against under two years for a central store. Second, a pilot of the same format cannot fix that: even if revenue comes in as forecast, payback stays at 5.6 years; a store would need about SGD 1.1 million of revenue, almost double the forecast, or an opening cost of SGD 270,000 or less. Third, the early kiosk estimate passes, at about SGD 70,000 a year on SGD 150,000, a payback of about 2.1 years. Pilot kiosks near train stations in two estates, and approve a rollout only if real payback comes in under three years.

Risks a strong answer names: The kiosk revenue is an early estimate and may be too high; Opening costs often run over budget; Kiosks near stations may take customers from nearby central stores.

Next steps: Confirm kiosk rents and fit-out costs with two landlords; Pick the two estates with the highest foot traffic for the pilot.

Strong versus weak

A strong answer

Tested one store against the hurdle, saw that a pilot of the same format could not fix the economics, and worked out the cost or revenue that would pass.

A weak answer

Said yes because "the suburbs are a big market," or proposed a pilot without checking whether the economics could ever pass.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.