Interviewer view · keep this screen to yourself

What a fading advantage is worth

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.

Illustrative numbers, fictional company. A card payment company in Poland earns economic profit (profit above the cost of capital) of PLN 50 million a year from its merchant network. A new instant payment system, free for shops, is arriving. The team expects the economic profit to fall 20 percent each year from next year. How much economic profit will it earn over five years, and how much less is that than if nothing changed?

2. Answers to clarifying questions

This case has no scripted clarifying answers. Answer from the prompt, and say "assume what you think is reasonable" if the prompt does not cover it.

3. 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.

Five-year economic profit = sum of each year's economic profit
- Eroding profit: each year is the year before x 0.8
- Flat profit: five years of PLN 50 million, for comparison

4. 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: Year 2
What a strong candidate does: Down 20 percent from PLN 50 million.
Year 2 economic profit (PLN millions): 50 × 0.8 = 40
Step 2: Year 3
What a strong candidate does: Down 20 percent again.
Year 3 economic profit (PLN millions): 50 × 0.8 × 0.8 = 32
Step 3: Five-year total
What a strong candidate does: Years 1 to 5: 50, 40, 32, 25.6 and 20.48.
Five-year total (PLN millions): 50 + 40 + 32 + 25.6 + 20.48 = 168
Step 4: Without erosion
What a strong candidate does: Five flat years at PLN 50 million.
Five flat years (PLN millions): 50 × 5 = 250
Step 5: Share lost
What a strong candidate does: How much of the flat total the erosion removes.
Share of five-year economic profit lost (percent): (250 - 168.08) ÷ 250 × 100 = 32.77

The recommendation to listen for

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

Over five years the company would earn about PLN 168 million of economic profit instead of PLN 250 million, about a third less, and by year 5 it earns less than half of today. That number sets the budget for a response. The company should be willing to spend up to a meaningful part of that PLN 82 million gap on defending or replacing the advantage, for example by offering the new payment method itself and earning on services around it, rather than defending fees the new system makes free.

Risks a strong answer names: The 20 percent rate of erosion is an assumption; test faster and slower cases; A real valuation would also discount later years, which lowers both totals.

Score the candidate

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

This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?

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.