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Boston Consulting Group Potential Test Free Practice Test

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Free BCG Potential Test
Free BCG Potential Test

Candidate briefing

Online case. During your recruiting process with BCG you will have to go through an online case. The purpose of this exercise is to test your analytical and logic skills as well as your business sense.

Sample. This document is a sample of 10 questions put together by IGotAnOffer. Its purpose is to help you prepare for the actual online exercise you will have to complete. We recommend you take no more than 20 minutes to take this test.

Each question is divided into 2 parts:

on the left, you will find the question itself on the right, you will find the information you need to answer the question

No calculator. We recommend you complete this sample test without using a calculator.

Scoring system. You should select one or more answers for each question. During the actual test you will be able to move onwards and backwards and change your prior answers so you should feel free to do the same here. For each right answer you will get +3 points, 0 points for no answer and -1 point for a wrong answer.

IGotAnOffer disclaimer

Process followed. BCG only makes four questions available to candidates preparing for its online test. The free sample test you are reading is inspired by these questions as well as conversations with past BCG candidates and other consulting recruitment tests. Although this free sample test is unlikely to be a perfect representation of the actual test, we believe it should help significantly in your preparation.

Remaining uncertainties. There are a few uncertainties regarding the BCG potential test that you should be aware of:

Number of questions and time: In its four-question sample BCG mentions that the online

test includes 23 questions and needs to be completed in 45 minutes. However, past candidates have also reported slightly varying numbers of questions and time limits. Maths vs. logic questions: Given the limited number of questions made available by BCG, the balance of maths and logic questions in the actual test is not known at this stage.

Future improvements. Despite these uncertainties we believe the materials we put together will enable you to develop the right skills. Your feedback on the actual test would be very valuable to us and would significantly help us further improve these materials. You can contact us at contactus@igotanoffer.com.

Question 1
Question 1
1.  Based on the market research, what is the average ticket price Olympian Airways should charge
1. 
Based on the market research,
what is the average ticket
price Olympian Airways
should charge for a flight from
London to Paris?
€102
2. 
€136
3. 
€125
4. 
€116
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Pricing strategy

 
 

Case Overview

Market Research

Due to the increasing number of low-cost airlines entering the market, the world’s major carriers are forced to revisit their

5,000 people were asked how much they would pay for a flight from London to Paris.

pricing strategies in order to preserve their market share.

Number of respondents and price points:

Olympian Airways is one of the largest airlines in Europe and is revamping its

 
1,100 1,500 €200 €150 €100 €50 500
1,100
1,500
€200
€150
€100
€50
500
 

pricing strategy for international short-

Question x / 23

 

haul flights.

In order to do so, it decided to carry out market research to find out how much

passengers would be willing to pay for different routes.

Question 2
Question 2
None of the above / we lack sufficient information at this stage What ticket price should
None of the above / we
lack sufficient information
at this stage
What ticket price should
Olympian Airways charge to
maximise gross profit per
day?
1. 
€100
2. 
€125
3. 
€150
4. 
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Maximise gross profit

Scenario

A

B

Flight cost and tickets’ revenue

 

Avg cost per flight

15,000

15,000

# flights / day

30

20

Ticket price

100

150

# passengers / flight

200

150

Distribution of passengers

 

C1

50%

30%

C2

30%

30%

C3

20%

40%

Avg duty free spending per passenger

C1

5

C2

10

C3

15

After conducting market research in ticket prices the company puts together two different scenarios. Scenario A is a low price high volume strategy and Scenario B is a high price low volume strategy.

In addition to ticket revenues, Olympian Airways also sells products (perfumes,

alcoholic beverages, electronics, etc.) to passengers during flights.

The company classifies customers into three income bands: C1, C2 and C3. C1 passengers have got the lowest income and C3 the highest.

C1 customers are price elastic across ticket prices and likely to spend less on goods purchased on board.

Olympian Airways’ aircrafts all have the same number of seats.

Question x / 23

Scenario analysis

Customer segments

Question 3
Question 3

Which of the factors listed below would not affect the gross profit difference between scenarios A and B?

1.Ticket prices 2.Aircrafts’ seat capacity 3.Fuel costs 4.None of the above

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Maximise gross profit

Scenario

A

B

Flight cost and tickets’ revenue

 

Avg cost per flight

15,000

15,000

# flights / day

30

20

Ticket price

100

150

# passengers / flight

200

150

Distribution of passengers

 

C1

50%

30%

C2

30%

30%

C3

20%

40%

Avg duty free spending per passenger

C1

5

C2

10

C3

15

Question x / 23

Customer segments

After conducting market research in ticket prices the company puts together two different scenarios. Scenario A is a low price high volume strategy and Scenario B is a high price low volume strategy.

In addition to ticket revenues, Olympian Airways also sells products (perfumes,

alcoholic beverages, electronics, etc.) to passengers during flights.

The company classifies customers into three income bands: C1, C2 and C3. C1 passengers have got the lowest income and C3 the highest.

C1 customers are price elastic across ticket prices and likely to spend less on goods purchased on board.

Olympian Airways’ aircrafts all have the same number of seats.

Scenario analysis

Question 4
Question 4
6,230 4.  5,970 3.  62,300 2.  59,700 1.  Given the data you are provided with, what
6,230
4. 
5,970
3. 
62,300
2. 
59,700
1. 
Given the data you are
provided with, what is the
maximum number of points
one can earn by buying a
single ticket?
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New customer loyalty programme

 
 

Miles & Bonus

Data

In addition to reviewing its pricing strategy, Olympian Airways has also decided to launch a new loyalty programme called Miles & Bonus.

There are 60 different types of tickets (10 destinations, 3 travel classes and 2 seasons) with an average of 2,000 points awarded per ticket.

In this programme customers are awarded points based on the distance

None of these tickets earns less than 500 points and exactly 15 of them earn less

they travel with either the airline or one of

Question x / 23

its partners.

 

than 1,200 points.

 
 

The points earned vary depending on the travel class (i.e. first, business or economy), the destination and the season.

For instance, peak season business tickets in non-popular destinations are awarded the most points.

Question 5
Question 5
€56,160 4.  €56,480 3.  €56,016 2.  €56,048 1.  Assuming only 5% of economy customers use Wi-Fi
€56,160
4. 
€56,480
3. 
€56,016
2. 
€56,048
1. 
Assuming only 5% of
economy customers use Wi-Fi
all the time, what are the
expected revenues from a
flight to a popular destination
using a new aircraft at its full
capacity?
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Upgraded fleet of aircrafts

 
 

New aircrafts

Data

Olympian Airways is considering upgrading its fleet. The new aircrafts will use technologies such as touch screens and Wi-Fi on board.

The ratio of first class, business and economy seats in the new aircrafts will be 1 to 3 to 8 and the total number of seats will be 240.

The company has decided that the new

Average ticket prices for popular destinations are expected to be 700 for

aircrafts will have three different types of seats: first, business and economy.

Question x / 23

 
 

First class seats will have leather heated chair beds, business seats will have leather seats with extra leg space and economy seats will have standard seats.

first class, 300 for business and 150 for economy. The average duration of these flights is 3 hours.

First and business customers get free Wi- Fi on board but economy customers need to pay 2 / hour for using it.

Question 6
Question 6
2.  What is the current cost per sale for PayCo assuming all lead sources have the
2. 
What is the current cost per
sale for PayCo assuming all
lead sources have the same
conversion rate?
1. 
$39 / sale
$44 / sale
$49 / sale
$54 / sale
3. 
4. 
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Cost per sale

The company rents debit and credit card

machines to its clients. It earns a rental fee for the card machines as well as a

small fee for each card transaction processed by their client.

The company works with banks to acquire new clients. It purchases lists of businesses from them and calls them to sell card machines and services.

PayCo is a payments company that processes debit card and credit card transactions in the United States.

 

Cost per

Share of

lead ($)

total mix of leads (%)

Alma Bank

$5

30%

Bingo Bank

$3

60%

Com Bank

$6

10%

PayCo’s clients are shops such as restaurants, bars, apparel shops, supermarkets, petrol stations, etc.

Question x / 23

Current situation

Case overview

PayCo purchases lists of leads at different prices from Alma Bank, Bingo Bank and Com Bank.

It then calls the leads to try and sell them card machines and services. The average conversion rate from lead to actual customer is about 10%.

Question 7
Question 7
2.  What is the maximum conversion rate that can be achieved by PayCo using the the
2. 
What is the maximum
conversion rate that can be
achieved by PayCo using the
the three banks as a lead
source?
1. 
10.5%
11.2%
3. 
11.8%
4. 
12.3%
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Maximise conversion rate

Alma Bank is a large commercial bank from the East Coast of the US. Its clients are mainly restaurants and shops.

Com Bank has got a similar list of clients to Alma Bank but is established on the West Coast of the US.

Bingo Bank is established in the Midwest

and primarily serves Mom and Pop businesses.

The team at PayCo has always assumed a similar conversion rate of 10% across all three banks.

After carrying out some research, your team finds out that the conversion rate between the three banks is actually different.

 

Conversion

# of leads

rate

available per year

Alma Bank

12%

100,000

Bingo Bank

8%

600,000

Com Bank

15%

80,000

PayCo needs to achieve its sales target by using 300,000 leads per year.

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Conversion rate results

Bank by bank analysis

Question 8
Question 8

$35.0 / sale $37.5 / sale $40.0 / sale None of the above / we lack sufficient information at this stage

What is the minimum cost per sale PayCo can achieve by using Alma Bank, Bingo Bank and Com Bank as sources of leads?

1.

2.

3.

4.

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Maximise conversion rate

Com Bank has got a similar list of clients to Alma Bank but is established on the West Coast of the US.

Bingo Bank is established in the Midwest

and primarily serves Mom and Pop businesses.

The team at PayCo has always assumed a similar conversion rate of 10% across all three banks.

PayCo needs to achieve its sales target by using 300,000 leads per year.

 

Conversion

# of leads

rate

available per year

Alma Bank

12%

100,000

Bingo Bank

8%

600,000

Com Bank

15%

80,000

Alma Bank is a large commercial bank from the East Coast of the US. Its clients are mainly restaurants and shops.

Question x / 23

Conversion rate results

Bank by bank analysis

After carrying out some research, your team finds out that the conversion rate between the three banks is actually different.

Question 9
Question 9

4.

3.

2.

Work with Bingo Bank to increase the quality of the leads purchased from them by PayCo Group sellers handling different banks in a single team and randomise the distribution of leads between them Keep sellers in different teams but rotate lead sources between them Increase bonuses to $200 per sale for all sellers

1.

Which of the following statements would NOT increase the motivation of sellers handling leads from Bingo Bank?

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Sellers incentives

 
 

Day to day

Sellers’ compensation

PayCo’s sellers work from 9am to 5pm from Monday to Friday 47 weeks a year.

The sellers’ base salary starts at $40k and increases by about 5% per year for

In addition, sellers can receive $100 for

Sellers are divided into three teams. Each team deals with one of the following lead sources: Alma Bank, Bingo Bank and Com Bank.

each additional year they stay with the company.

each sale they make.

Every day, sellers receive a list of 85

Question x / 23

 

The Head of Sales has noticed that

 

leads from their respective bank and work through the list during the day.

sellers for Bingo Bank are much less motivated than their peers on average.

The list of leads they get are newly setup businesses which are likely to require debit and credit card payment processing services.

After investigating, his initial conclusion is that they have been consistently making less sales and getting lower bonuses than their peers.

Sellers simply cold-call the leads and try to convince them to sign up for PayCo services.

Question 10
Question 10

4.

3.

2.

Train sellers to negotiate better prices with leads Fine sellers when they give unprofitable prices Incentivise sellers to sell at higher prices with a different bonus system Set up an audit team that would check prices and validate contracts before they count towards sellers’ total sales

1.

Which of the following measures would best help the company to fully prevent sellers from agreeing unprofitable prices with future customers?

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Incentive structure

 
 

Current issue

Pricing

Sellers are currently only incentivised based on the number of customers they manage to sell to.

When selling PayCo’s services, sellers negotiate a share of their customers’ future revenue.

The head of finance of the group has noticed that the prices at which sellers agreed to provide PayCo’s services have decreased in the past few months.

Question x / 23

 

For debit cards, they usually agree a price of about 15 cents per future transaction processed for the client. For instance, if PayCo processes a debit card transaction for a sandwich at $5, they will receive 15

For credit cards, the price agreed is a

 

The head of sales suspects that this might be due to sellers selling at increasingly lower prices to increase their bonus.

cents from the sandwich shop in exchange for their service.

percentage of the transaction instead of a fixed fee. This percentage is usually around 1.5%.

 

Lately, sellers have been found to sell PayCo’s services at increasingly less profitable prices.

Answer key

Question 1

Correct answer: 2

The ticket price can be calculated as follows:

1.Calculate the number of respondents for the 150 price segment: 5,000 - 1,100 - 500 - 1,500 = 1,900 2.Calculate the weighted average by multiplying the prices by the number of people per price segment and then dividing by 5,000: (500 x 50 + 1,500 x 100 + 1,900 x 150 + 1,100 x 200) / 5,000 = 136

Answer 2 is therefore the correct answer.

Question 2

Correct answer: 1

You are asked to determine which of the two scenarios maximises gross profit. The gross profit for each scenario can be calculated as follows:

Scenario A:

-Revenues from tickets: 100 x 200 = 20,000 -Revenues from duty free: (50% x 5 + 30% x 10 + 20% x 15) x 200 = 1,700 -Gross profit per day: (Total Revenues – Cost per Flight) x Number of Flights per Day = (20,000 + 1,700 – 15,000) x 30 = 201,000

Scenario B:

-Revenues from tickets: 150 x 150 = 22,500 -Revenues from duty free: (30% x 5 + 30% x 10 + 40% x 15) x 150 = 1,575 -Gross profit per day: (Total Revenues – Cost per Flight) x Number of Flights per Day = 22,500 + 1,575 – 15,000) x 20 = 181,500

Scenario A maximises gross profit per day. Therefore, answer 1 (100) is the correct answer.

Answer key

Question 3

Correct answer: 4

Ticket prices will affect revenues for each scenario and will therefore affect the gross profit difference between them.

Fuel costs will affect the cost of the flight, and since the number of flights is different for each scenario, this will affect the gross profit difference as well.

The total number of seats per aircraft could affect the gross profit difference. For example, if it was 300 then the number of passengers per flight and the number of flights per day for scenario A might increase.

Therefore, all of the factors listed could affect the difference in gross profit. Notice that you are asked to identify which factors would NOT affect the difference in gross profit, hence answer 4 is correct.

Question 4

Correct answer: 1

There are 60 different types of tickets with an average of 2,000 points each. The total number of points from all types of tickets is therefore 60 x 2,000 = 120,000.

In order to find the maximum number of points that could be earned with a single type of ticket, the points of all the other types of tickets need to be minimised.

None of the tickets have less than 500 points and exactly 15 have less than 1,200 points. At a minimum, we can have 15 tickets with 500 points. This leaves 44 tickets (60-15-1) with more than 1,200 points. In order to maximise the points of one ticket the remaining 44 should carry 1,200 points each.

Therefore, out of the 120,000 points, there are 120,000 – (15 x 500) – (44 x 1,200) = 59,700 points for the remaining ticket.

The correct answer is therefore answer 1.

Answer key

Question 5

Correct answer: 1

The expected revenues can be calculated as follows:

1.Calculate the number of passengers per category 1y + 3y + 8y = 240 => 12y = 240 => y = 20:

First class passengers: 20 Business class passengers: 60 Economy class passengers: 160

  • 2. Calculate the revenues from tickets: 20 x 700 + 60 x 300 + 160 x 150 = 56,000

  • 3. Calculate the revenues from Wi-Fi purchases: 5% x 160 x 2 x 3 = 48

Therefore total revenues are 56,048.

A faster way to obtain the correct answer is to calculate the revenues from Wi-Fi first (48). You should then notice that ticket revenues can only contribute towards the tens of the hundreds in the result.

The right answer will therefore finish by 8. By doing this, all answers can be eliminated except number 1.

Question 6

Correct answer: 1

This calculation can be broken down into two steps:

1.Calculate cost per lead 2.Calculate cost per sale

The cost per lead needs to be calculated across all three banks, taking into account their total share of mix: $5 x 30% + $3 x 60% + $6 x 10% = $3.9 / lead

The cost per sale can be calculated by dividing the cost per lead by the conversion rate: $3.9 / 10% =

$39.0.

The correct answer is therefore answer 1.

Answer key

Question 7

   

Question 8

Correct answer: 2

Correct answer: 2

In order to maximise its conversion rate, PayCo needs to rank lead sources from the highest to the

Sufficient information is provided to calculate the cost of sale for each lead source:

lowest conversion rates. It should then use as many leads from the first source before considering the second one:

1.Alma bank: $5 per lead with a 12% conversion 2.Bingo bank: $3 per lead with a 8% conversion 3.Com bank: $6 per lead with a 15% conversion

1.Com bank 15%; 80,000 leads available 2.Alma bank 12%; 100,000 leads available 3.Bingo bank 8%; 600,000 leads available

For each bank, the cost per sale can be calculated by dividing the cost per lead by the conversion rate:

1.

Alma bank: $5 / 12% = $41.7

PayCo needs 300,000 leads per year to meet its

2.

Bingo bank: $3 / 8% = $37.5

target sales. To maximise the conversion rate, the lead mix should then be:

3.

Com bank: $6 / 15% = $40.0

1.Com bank: 80,000 2.Alma bank: 100,000 3.Bingo bank: 120,000

Bingo bank has got the lowest cost per sale. In addition, it can provide 600,000 leads per year which is sufficient to cover PayCo’s needs of 300,000.

The maximum conversion rate achievable is then:

The correct answer is therefore answer 2.

(15% x 80,000 + 12% x 100,000 + 8% x 120,000) / 300,000 = 11.2%

The correct answer is therefore answer 2.

Answer key

Question 9

Correct answer: 4

The head of sales’ initial conclusion is that sellers handling Bingo Bank leads “have been consistently making less sales and getting lower bonuses than their peers”.

Indeed, the conversion rate for leads from Bingo Bank is lower than that of other banks. The comment implies that, to increase sellers’ satisfaction, their bonus would need to be similar relative to their peers.

However, if bonuses increase to $200 per sale for all sellers, the relative bonus obtained by sellers focused on Bingo Bank will not increase.

Answer 4 would therefore not help solve the problem and is the correct answer.

Question 10

Correct answer: 4

Answers 1 to 3 would all help decrease sellers’ tendency to sell at unprofitable prices. However, none of them would completely stop the trend:

1.Training sellers to give better prices could still result in sellers giving unprofitable prices in practice. 2.Giving a fine to sellers, while a good incentive, is not guaranteed to fully stop the trend. 3.Similarly, setting up a better incentives scheme is also not guaranteed to halt the trend.

Answer 4 is the correct answer because it fully prevents sellers from selling at unprofitable prices via an external audit team.