I just interviewed for the C1 SBA minicase yesterday, and it was the exact same Groupon case that's been floating around!
If you're running a restaurant, you're considering whether to partner with a platform like Groupon.
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What factors would you consider?
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Given data: number of tables served per day: 20; avg spend/day: $30; cost: $0.40 per dollar spent; FC: $100/day — what is the daily profit? Worked out to $260/day.
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Now Groupon's strategy is that customers can use a $15 coupon to redeem $30 worth of spend, and Groupon takes a 40% commission on that $15 — what average spend/day would make this Groupon strategy viable? (Basically, calculate the break-even point.) Worked out to $35/day.
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Asked whether I'd consider partnering with Groupon. (This was actually asking about marginal profit, but I didn't catch that angle in the moment — I just said partnering looked doable since avg spend went from $30 to $35, a $5 bump. Thinking about it afterward, from a marginal profit angle: without Groupon the VC is $0.40, with Groupon the VC is $21 (Groupon's cut) + $0.40 — which is higher than the VC without Groupon, so the answer should be not to partner.)
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New data given: number of tables served per day: 25; avg spend/day: $36; VC: $0.40/dollar spent; FC: $100; and 10 of those tables used a Groupon coupon — what's the daily profit now? Worked out to $230.
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Asked why, even though both the number of tables served and the avg spend went up, profit actually went down compared to question 2.
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Asked again whether I'd consider partnering with Groupon now. (I said from a pure profitability standpoint, no, because of the Groupon cost — but if the restaurant's tables are often sitting empty with low occupancy, then from a marketing angle, to attract customers, I would consider it.)
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Asked how I would improve profitability if I did partner with Groupon. (Reduce the commission, or switch to a $20-redeems-$30 structure.)
The interviewer opened with a brief self-introduction and then went straight into the case. Since I'd already prepped this exact question, I moved through it pretty fast. The interviewer didn't say much the whole time — no follow-up questions based on my answers, no real feedback, he just kept saying "make sense" lol. The case portion wrapped up in a little over 20 minutes, followed by roughly ten-plus minutes of small talk.
More than an hour after the interview ended, I got an email from HR saying I'd moved on to the next round.
Good luck everyone!
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