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[Speaker 2]
Or sorry, labor within pizza is costing five dollars where a raw material is costing 10. If I'm
looking at that properly.

[Speaker 1]
Yeah, we can I hear you on why you're trying to make sense while you're trying to figure out
the units here On the left hand side of this chart. I'm gonna ask you to ignore that and just
focus on margins Okay.

[Speaker 2]
All right. So we're looking at that margin. Um, so yeah, we see that pizza is at 33% Where
drinks at the highest margin is at 53% So what we can potentially do is look at ways to
increase the margins for pizza to similarly how we have for sandwiches and drinks um, and
one of the potential ways to do that is um, since we see that raw material and labor has um
is contributing the cost most um, one way to look at that is either we Uh decrease labor or
decrease the cost that's going towards labor And then also, um if there's potential ways to
decrease the cost of raw material as well, okay

[Speaker 1]
So that i'm hearing is one very feasible idea over the next three years to increase margin

[Speaker 2]
Yeah, so to increase overall margins I would say that Two things that we can potentially do is
decrease the cost going towards labor and decrease the cost going towards raw material.
Okay Um another way to go about this Um, we do see that since drinks have the highest
margin at 53% maybe potentially, um sell more drinks Um since uh, we see more margins
there Uh, we can potentially sell at higher volumes or maybe sell at a higher price where we
can increase our profits and um Uh, sorry increase our profits and then uh ultimately help
grow or Double that gross margin goal that we have for three years

[Speaker 1]
Okay, great Anything else any other ideas you'd want to offer?

[Speaker 2]
Um Yeah Um, so it does seem like sandwiches here. Uh, it has Lower costs going towards
raw material and labor compared to pizza Um and has very similar profit margins as um As
pizza as well. So one of the things that we can potentially do expand the product mix within
sandwiches itself so that we can uh Attract more customers or bring in newer customers
And then that can also you know help with the the selling Of pizza and sandwiches or their
products in general to help ultimately double the gross margins

[Speaker 1]
Awesome Okay, cool tomah i'm gonna call it a close to the case Okay, take a deep breath
How do you feel?

[Speaker 3]
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episode's show notes Um, I felt a little nervous.

[Speaker 2]
I was expecting more math. Maybe I was not doing the quantifying That I was supposed to
do Um, but it felt a little more qualitative just because we had so many exhibits.

[Speaker 1]
Yeah Uh good noticing and I want to make a disclaimer on this case just for the group in
general This is a bain style case. I'll be very open. My familiarity is much more in the
interviewer-led mckinsey style case So I would say this candidly in my opinion is not
representative Uh, definitely not representative of a mckinsey case.

It may be more representative of bain cases Um in every case You will have a direct
computational math question. You're right toma that you didn't have one here This was very
exhibit heavy. Um in a typical case, I would expect question one is your structure question
Question two is maybe looking at data, but then doing a straight math calculation Yeah,
question three will be like a data graph that has you draw some hypotheses And then
question four will be like a synthesis question to bring the case together Okay, so um good
observation Anything you'd want to share before we do a little bit of reflection together

[Speaker 2]
um No, i'd really just love to hear your thoughts Actually, I was not really sure how to drive
forward the case I think that's what I struggled a little bit because I was getting the exhibits
and it's just like where i'm going Trying to relate what i'm seeing at the exhibit in the market
standpoint and then having translating that over to financial

[Speaker 1]
Yeah, so what you're noting is both the Beauty and challenge of an interviewee-led case. So
bcg and bain tend to be more interviewee-led McKinsey is more interviewer-led and i'm
saying this for not just your benefit But hopefully for the benefit of the folks on the call In a
case like this where it's interviewee-led My guidance is at the end of every question And this
is where synthesis skill becomes really important You almost want to have your one to two
sentences that synthesize the like what you've taken what you've learned from that
question And almost have a sentence to say and to this point in the case You know, we
talked about the three areas we would look at to evaluate how to grow gumby and what
we've learned thus far is the following Because then you're actually driving the case forward
and frankly allowing yourself to keep I'll call it like the running Party line of all the
information that you're gathering Because to your point you're getting a lot of disparate
data One by one and it's hard to remember like what am I doing with all of this as I go
along? Yeah, versus in an interviewer-led It'll be just much more like i'll pull you along in a
way that I didn't put you along here Um, okay, great.

So let me start with a few reflections. Um, i'll start with a recap I loved your two like the two
questions that you offered one was, you know What is it about pizza that is interesting to
this PE firm? Essentially asking the question like should we be playing in pizza or generally in
food?

Um, and I liked your question on like are we limited by scope and geography? So I thought
you had really good not just like clarifying questions But questions that would move that
could move your answer forward, which is what I would call level three question Um what I
want you to be aware of Um, and this is hopefully a pretty easy fix. I tell all candidates.

There's no need to be polite meaning You don't need to say that. Okay that i'm going to do
xyz. I expect you to take a moment um, I You know, I expect all that and I want to say time is
your friend and your enemy in an interview So the more that you can keep your language
tight the better and so Even simply putting saying statements.

I actually encourage candidates. I'm going to put these in the chat I encourage candidates to
have their like go-to phrases that they just like ink around that they're going to say Whether
it's i'm going to recap what I heard Or i'm going to take a few minutes a few moments and
come back to you and that's all you need to say um, so it'd be my only feedback on the
Recap If it's okay with you tomah, i'm actually going to jump to the exhibits first for
feedback and then come back to structure Just because it's such an exhibit heavy question
Um, so in general i'm going to encourage you and everyone on the call to think about The
approach to exhibits at three levels so one thing you did tomah that I really appreciated that
I want everyone to do is Take your 30 seconds to absorb the data And then do what you did
which is play back like literally just play back what the data graph is So what this data is
showing is market share and I can even share my screen while i'm saying this market share
by Um Yeah, what this data is showing is Essentially the revenues that we're making by the
customer segments that we have across You know four products pizzas sandwiches drinks
other So just saying out loud What the data show without any insights any hypotheses,
that's level one Level two is drawing some takeaways like you did from the graph So if this is
what the graph is showing we see that pizza, you know students by far are Buying pizza.

They have a few drinks to accompany. They maybe buy some sandwiches What we see is
like for town folk They're kind of a split between pizza and sandwiches and faculty and staff
is the same. So no surprise younger people want pizza Older people want sandwiches and
pizza.

That's like a level two, which is Just kind of i'll call it interpretation of the data The level
three is the distinguishing factor right for any candidate which is What are hypotheses then
or like why does this matter for our client? And this is where making connections Not just
within a data graph, but across Data graphs becomes important So as an example in this
case And i'm not going to share the screen across the different exhibits because that might
get just a bit jarring for folks on the call um a couple of insights along the graphs were Just
for gumby knowing that we primarily serve students really well and that students are the
majority of the market um and that Margin, I think one of the other insights or just ahas was
margin on drinks is high great But ultimately pizza's where we really want to play. So I loved
that you said How can we basically get more margin out of pizza? um What I what I want I
don't want to kind of prescribe a hypothesis that would have connected the few graphs But
one thing that just came to me when I was thinking about the graphs is Essentially, how do
we as gumby double down on pizza knowing that that's what we do really well And that our
primary segment Students is mostly eating pizza Oh, and by the way, we also do delivery
well and so I'm, I can make an assumption that delivery and carry out probably have higher
margins than sitting in just because I don't need a lot of overhead To do delivery and carry
out and if i'm mostly serving students They're not interested like an older couple is sitting in
my restaurant so essentially if i'm a pe firm wanting to just like Pardon my capitalistic
language of saying exploit profit I essentially want to make Pizza really cheap and get get as
much volume out as I can which is essentially carry out or delivery And I probably want to
up my carry out because my margin is likely going to be higher there And I think that's one
thing I was hoping for earlier in the case, which is you wanting margin data much earlier
Because what was missing across all the exhibits until the end?

Was any sort of cost view on any of this information is all top line um Let me pause there on
exhibits for any questions from you and then i'll jump to the structure And then we'll open it
up for qa No, I think it makes sense.

[Speaker 2]
I think I got Bogged down by the different exhibits and I need to get in habit of i'm talking
But I should also be writing some of my key takeaways Um, and I think when we were going
over it, it just I remembered Oh, I forgot about delivery, which I realized I didn't even
mention at the end

[Speaker 1]
um, yeah, no, I understand that and I want to just honor the fact that looking at a lot of the
data like this is Very fatiguing and just not that typical so to the extent that and this is more
of a Like a note-taking strategy i'll say to the extent that you can ensure that you have one
piece of paper for each question and almost get in the habit of Like a takeaway box at the
bottom right of your piece of paper so that when you're looking at the case holistically
You've already done a bit of the synthesis for yourself And as you're recapping what you've
learned and then trying to draw that into like holistic insights at the end of the case That
helps make your job easier um one shout out I want to give you I know i'm jumping around
the questions because There was just a lot of kind of creative and exhibit questions I liked
your Just kind of the bigger ideas for um Data that you would want to see in general before
we got to margins So what makes scum be superior for students?

Like what are we doing well that we want to make sure we keep doing well and maybe
exploit for other populations Um, what is the product mix and how can we expand this?
That was a great question before you actually got some data on the product mix and margin
Um, and then the business model, right? So what can we do to actually just get more money
per customer not necessarily per product but actually per customer?
So I liked I liked that Um, okay, so let's jump back to structure um a few things i'll say before
I comment on your specific structure and I'm conscious of our time. And so what I might do
actually tomah is give my view on what? How to think about structure in general not just
gumby specific And then we can talk about some of your structure pieces if that's if that's
fine So yeah, i'll say in general.

We all know me see is a bare minimum requirement for your structure Um, I like to think of
structure at three levels level one level two and level three So in your example, I like that
you framed there's a few questions. I want to analyze i'm going to call those your level ones
so what is the profitability of um gumby generally Your second level one was the PE firm and
like its portfolio And your third level one was other considerations to do a proper evaluation
of gumby. That's level one Within level one there's going to be what i'll call level twos And I
encourage everyone to think about a level two as like a research or analysis question and
the reason that I encourage that is Is it will require you to actually think about what what
are the what's the data that I need To ultimately care about what I care about in level one
um, so you said your first level two was revenue um So at that point the research question is
essentially what is what is the volume of pizza that i'm selling and at what price point What
does the customer? Demand look like today and what is the growth of that? Thing I heard
you say and then finally, what is a product portfolio?

That was my I think articulation tome of what you said when you did speak it you kind of
spoke it as one big sentence The more that you can like signpost for your interviewer within
revenue. Here are the three questions. I care about boom boom boom the better Um So
that's level two.

I'm kind of mixing up level two and level three here level three for me is again This is what
distinguishes a candidate like a superstar candidate from a good candidate is the more
specific And like offering hypotheses you can even within specific parts of your tree. So As
an example, I like under your PE firm portfolio bucket You talked about like what other
synergies do we have? So for me an explicit example of that would say Um, if we as a PE
firm have had if we do we have experience just doing franchise or growing businesses in
general and more specifically You know fast food type businesses where we know how to
leverage talent really quickly We know how to get the like the cheapest but high quality
ingredients Um, we know how to optimize like capacity on the supply chain like giving really
specific examples like that with regard to synergy Would be what a level three example like
examples are for something that's just called synergies So level one is the bucket level two is
a research question and then level three are specific Examples relative to the client context
until i'm conscious. I threw a lot of information at you So thank you for bearing with that.
Hopefully it was useful.

[Speaker 2]
No. No, thank you so much. Yeah, of course I think that's what happens when you get
through a case you start losing a little bit of the structure if you're like Especially if you're
bogged down by exhibits or like what you need to say next And I think that's just something
that I need to keep in the back of my mind like take time Take a breather and then just kind
of structure what i'm going to say
[Speaker 1]
Yes, always Everyone has the right to time. I want to remind everyone that on the call.

[Speaker 3]
You always have a right to ask for 30 seconds Thank you for tuning into this fun case
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