Soap Flake Manufacturer

McKinsey Case Study Prompt

Your client is a manufacturer of soap flakes. The company is located in central New York, where it has resided since its founding almost 100 years ago. Its customers are primarily marketing concerns, not unlike P&G, that brand your client’s products.

Despite years of steady business and profits, the last three quarters have been below expectations. In fact, the company is losing money, and shareholders are not happy.

The product is unchanged – no new formulas, sizes, etc. nothing that would affect sales. Profit margins are generally steady (but very small! – soap is a commodity, after all). The economy is normal – no exogenous variables (i.e., customer out of business, etc. – nothing going on here). Recent downsizing reduced labor force by 15%. Old equipment was recently scrapped, the plant was almost 100 years old! New plant equipment was purchased on credit.

You have been hired by the CEO to investigate the company’s profitability. She is expecting some recommendations.

What are some factors that you would look into?

Case Study Overview

Can you solve this McKinsey case study? The prompt will reveal the client: a soap manufacturer. The company has been around for a long time, but recently has experienced a dip in profitability and shareholders are not happy. Your job is resolve the profit loss, and recommend solutions to make it happen.

The Profitability Framework can be used to help create the structure for the McKinsey case study. Don’t become reliant on the basic frameworks – use your creativity and business smarts to create the best structure for the business situation in the case.

Prepping for a McKinsey first round interview? This case is great practice for that.

McKinsey Interview Pointers

The key to impressing your McKinsey interviewer is to demonstrate a firm grasp of the fundamentals of structure.

Are you able to build and maintain structure through every section of the case process – framework, math, presentation, brainstorming, etc.?

Identify 1 key area/opportunity for growth inside the case. Emphasize that area in your practice going forward.

Need more help before your case interview? Book time with an ex-MBB coach today.