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Boston Consulting Group Potential Test

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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.

Copyright 2015 IGotAnOffer Ltd.

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.

Copyright 2015 IGotAnOffer Ltd.

BCG Potential Test Olympian Airways

Question 1 Doc 1 Doc 2 Doc 3 Doc 4

Based on the market research,
what is the average ticket
price Olympian Airways
Pricing strategy
should charge for a flight from
London to Paris?
Case Overview Market Research

1. 102 Due to the increasing number of low-cost 5,000 people were asked how much they
airlines entering the market, the worlds would pay for a flight from London to
2. 136 major carriers are forced to revisit their Paris.
3. 125 pricing strategies in order to preserve
4. 116 their market share. Number of respondents and price points:

Olympian Airways is one of the largest

airlines in Europe and is revamping its 50
Question x / for
pricing strategy 23international short- 200 500
haul flights. 1,100

In order to do so, it decided to carry out

market research to find out how much 100
passengers would be willing to pay for 1,500
different routes.

150

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BCG Potential Test Olympian Airways

Question 2 Doc 1 Doc 2 Doc 3 Doc 4

What ticket price should
Olympian Airways charge to
maximise gross profit per
Maximise gross profit
day?

Customer segments Scenario analysis

1. 100
2. 125 After conducting market research in ticket
prices the company puts together two Scenario A B
3. 150
different scenarios. Scenario A is a low Flight cost and tickets revenue
4. None of the above / we price high volume strategy and Scenario
lack sufficient information B is a high price low volume strategy. Avg cost per flight 15,000 15,000
at this stage # flights / day 30 20
In addition to ticket revenues, Olympian
Airways also sells products (perfumes, Ticket price 100 150
Question x / 23 electronics, etc.) to
alcoholic beverages,
# passengers /
passengers during flights. 200 150
flight
The company classifies customers into Distribution of passengers
three income bands: C1, C2 and C3. C1
C1 50% 30%
passengers have got the lowest income
and C3 the highest. C2 30% 30%
C3 20% 40%
C1 customers are price elastic across
ticket prices and likely to spend less on Avg duty free spending per passenger
goods purchased on board.
C1 5
Olympian Airways aircrafts all have the C2 10
same number of seats.
C3 15

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BCG Potential Test Olympian Airways

Question 3 Doc 1 Doc 2 Doc 3 Doc 4

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

Customer segments Scenario analysis

1. Ticket prices
2. Aircrafts seat capacity After conducting market research in ticket
prices the company puts together two Scenario A B
3. Fuel costs
different scenarios. Scenario A is a low Flight cost and tickets revenue
4. None of the above price high volume strategy and Scenario
B is a high price low volume strategy. Avg cost per flight 15,000 15,000
# flights / day 30 20
In addition to ticket revenues, Olympian
Airways also sells products (perfumes, Ticket price 100 150
Question x / 23 electronics, etc.) to
alcoholic beverages,
# passengers /
passengers during flights. 200 150
flight
The company classifies customers into Distribution of passengers
three income bands: C1, C2 and C3. C1
C1 50% 30%
passengers have got the lowest income
and C3 the highest. C2 30% 30%
C3 20% 40%
C1 customers are price elastic across
ticket prices and likely to spend less on Avg duty free spending per passenger
goods purchased on board.
C1 5
Olympian Airways aircrafts all have the C2 10
same number of seats.
C3 15

Copyright 2015 IGotAnOffer Ltd.

BCG Potential Test Olympian Airways

Question 4 Doc 1 Doc 2 Doc 3 Doc 4

Given the data you are
provided with, what is the
maximum number of points
New customer loyalty programme
one can earn by buying a
single ticket?
Miles & Bonus Data
1. 59,700
2. 62,300 In addition to reviewing its pricing There are 60 different types of tickets (10
strategy, Olympian Airways has also destinations, 3 travel classes and 2
3. 5,970 decided to launch a new loyalty seasons) with an average of 2,000 points
4. 6,230 programme called Miles & Bonus. awarded per ticket.

In this programme customers are
awarded points based on the distance
they travel with either the airline or one of
Question
its partners.x / 23
None of these tickets earns less than 500
points and exactly 15 of them earn less
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.

Copyright 2015 IGotAnOffer Ltd.

BCG Potential Test Olympian Airways

Question 5 Doc 1 Doc 2 Doc 3 Doc 4

Assuming only 5% of
economy customers use Wi-Fi
all the time, what are the
Upgraded fleet of aircrafts
expected revenues from a
flight to a popular destination
using a new aircraft at its full New aircrafts Data
capacity?
Olympian Airways is considering The ratio of first class, business and
upgrading its fleet. The new aircrafts will economy seats in the new aircrafts will be
1. 56,048 use technologies such as touch screens 1 to 3 to 8 and the total number of seats
2. 56,016 and Wi-Fi on board. will be 240.
3. 56,480
4. 56,160 The company has decided that the new Average ticket prices for popular
aircrafts will have three different types of destinations are expected to be 700 for
seats: first, business and economy. first class, 300 for business and 150 for
Question x / 23 economy. The average duration of these
First class seats will have leather heated flights is 3 hours.
chair beds, business seats will have
leather seats with extra leg space and First and business customers get free Wi-
economy seats will have standard seats. Fi on board but economy customers need
to pay 2 / hour for using it.

Copyright 2015 IGotAnOffer Ltd.

BCG Potential Test PayCo

Question 6 Doc 1 Doc 2 Doc 3 Doc 4

What is the current cost per
sale for PayCo assuming all
lead sources have the same
Cost per sale
conversion rate?

Case overview Current situation

1. $39 / sale
2. $44 / sale PayCo is a payments company that PayCo purchases lists of leads at
processes debit card and credit card different prices from Alma Bank, Bingo
3. $49 / sale transactions in the United States. Bank and Com Bank.
4. $54 / sale
PayCos clients are shops such as Cost per Share of
restaurants, bars, apparel shops, lead ($) total mix of
supermarkets, petrol stations, etc. leads (%)

Question x rents
The company / 23 debit and credit card Alma Bank $5 30%
machines to its clients. It earns a rental Bingo Bank $3 60%
fee for the card machines as well as a
small fee for each card transaction Com Bank $6 10%
processed by their client.
It then calls the leads to try and sell them
The company works with banks to acquire card machines and services. The average
new clients. It purchases lists of conversion rate from lead to actual
businesses from them and calls them to customer is about 10%.
sell card machines and services.

Copyright 2015 IGotAnOffer Ltd.

BCG Potential Test PayCo

Question 7 Doc 1 Doc 2 Doc 3 Doc 4

What is the maximum
conversion rate that can be
achieved by PayCo using the
Maximise conversion rate
the three banks as a lead
source?
Bank by bank analysis Conversion rate results

1. 10.5% Alma Bank is a large commercial bank After carrying out some research, your
from the East Coast of the US. Its clients team finds out that the conversion rate
2. 11.2% are mainly restaurants and shops. between the three banks is actually
3. 11.8% different.
4. 12.3% Com Bank has got a similar list of clients
to Alma Bank but is established on the PayCo needs to achieve its sales target
West Coast of the US. by using 300,000 leads per year.

Question
Bingo Bank x
is /established
23 in the Midwest Conversion # of leads
and primarily serves Mom and Pop rate available
businesses. per year

The team at PayCo has always assumed Alma Bank 12% 100,000
a similar conversion rate of 10% across Bingo Bank 8% 600,000
all three banks.
Com Bank 15% 80,000

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BCG Potential Test PayCo

Question 8 Doc 1 Doc 2 Doc 3 Doc 4

What is the minimum cost per
sale PayCo can achieve by
using Alma Bank, Bingo Bank
Maximise conversion rate
and Com Bank as sources of
leads?
Bank by bank analysis Conversion rate results

1. $35.0 / sale Alma Bank is a large commercial bank After carrying out some research, your
from the East Coast of the US. Its clients team finds out that the conversion rate
2. $37.5 / sale are mainly restaurants and shops. between the three banks is actually
3. $40.0 / sale different.
4. None of the above / we Com Bank has got a similar list of clients
lack sufficient information to Alma Bank but is established on the PayCo needs to achieve its sales target
at this stage West Coast of the US. by using 300,000 leads per year.

Question
Bingo Bank x
is /established
23 in the Midwest Conversion # of leads
and primarily serves Mom and Pop rate available
businesses. per year

The team at PayCo has always assumed Alma Bank 12% 100,000
a similar conversion rate of 10% across Bingo Bank 8% 600,000
all three banks.
Com Bank 15% 80,000

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BCG Potential Test PayCo
Question 9
Which of the following
statements would NOT
increase the motivation of
sellers handling leads from
Bingo Bank?
1. Work with Bingo Bank to
increase the quality of the
leads purchased from
them by PayCo
2. Group sellers handling
different banks in a single
team and randomise the
distribution of leads
between them
3. Keep sellers in different
teams but rotate lead
sources between them
4. Increase bonuses to $200
per sale for all sellers
Copyright 2015 IGotAnOffer Ltd.
Doc 1 Doc 2 Doc 3
Sellers incentives
Day to day
PayCos sellers work from 9am to 5pm
from Monday to Friday 47 weeks a year.
Sellers are divided into three teams. Each
team deals with one of the following lead
sources: Alma Bank, Bingo Bank and
Com Bank.
Question x / 23receive a list of 85
Every day, sellers
leads from their respective bank and work
through the list during the day.
The list of leads they get are newly setup
businesses which are likely to require
debit and credit card payment processing
services.
Sellers simply cold-call the leads and try
to convince them to sign up for PayCo
services.
Doc 4
Sellers compensation
The sellers base salary starts at $40k
and increases by about 5% per year for
each additional year they stay with the
company.
In addition, sellers can receive $100 for
each sale they make.
The Head of Sales has noticed that
sellers for Bingo Bank are much less
motivated than their peers on average.
After investigating, his initial conclusion is
that they have been consistently making
less sales and getting lower bonuses than
their peers.
BCG Potential Test PayCo
Question 10
Which of the following
measures would best help the
company to fully prevent
sellers from agreeing
unprofitable prices with future
customers?
1. Train sellers to negotiate
better prices with leads
2. Fine sellers when they
give unprofitable prices
3. Incentivise sellers to sell
at higher prices with a
different bonus system
4. Set up an audit team that
would check prices and
validate contracts before
they count towards
sellers total sales
Copyright 2015 IGotAnOffer Ltd.
Doc 1 Doc 2 Doc 3
Incentive structure
Current issue
Sellers are currently only incentivised
based on the number of customers they
manage to sell to.
The head of finance of the group has
noticed that the prices at which sellers
agreed to provide PayCos services have
decreased in the past few months.
Question x / 23
The head of sales suspects that this
might be due to sellers selling at
increasingly lower prices to increase their
bonus.
Doc 4
Pricing
When selling PayCos services, sellers
negotiate a share of their customers
future revenue.
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
cents from the sandwich shop in
exchange for their service.
For credit cards, the price agreed is a
percentage of the transaction instead of a
fixed fee. This percentage is usually
around 1.5%.
Lately, sellers have been found to sell
PayCos 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.
Copyright 2015 IGotAnOffer Ltd.
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.
Copyright 2015 IGotAnOffer Ltd.
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 Question 6
Correct answer: 1 Correct answer: 1

The expected revenues can be calculated as follows: This calculation can be broken down into two steps:
1. Calculate the number of passengers per category 1. Calculate cost per lead
1y + 3y + 8y = 240 => 12y = 240 => y = 20: 2. Calculate cost per sale
First class passengers: 20
Business class passengers: 60 The cost per lead needs to be calculated across all
Economy class passengers: 160 three banks, taking into account their total share of
2. Calculate the revenues from tickets: 20 x 700 + 60 mix: $5 x 30% + $3 x 60% + $6 x 10% = $3.9 / lead
x 300 + 160 x 150 = 56,000
3. Calculate the revenues from Wi-Fi purchases: 5% x The cost per sale can be calculated by dividing the
160 x 2 x 3 = 48 cost per lead by the conversion rate: $3.9 / 10% =
$39.0.
Therefore total revenues are 56,048.
The correct answer is therefore answer 1.
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.

Copyright 2015 IGotAnOffer Ltd.

Answer key
Question 7
Correct answer: 2
In order to maximise its conversion rate, PayCo
needs to rank lead sources from the highest to the
lowest conversion rates. It should then use as many
leads from the first source before considering the
second one:
1. Com bank 15%; 80,000 leads available
2. Alma bank 12%; 100,000 leads available
3. Bingo bank 8%; 600,000 leads available
PayCo needs 300,000 leads per year to meet its
target sales. To maximise the conversion rate, the
lead mix should then be:
1. Com bank: 80,000
2. Alma bank: 100,000
3. Bingo bank: 120,000
The maximum conversion rate achievable is then:
(15% x 80,000 + 12% x 100,000 + 8% x 120,000) /
300,000 = 11.2%
The correct answer is therefore answer 2.
Copyright 2015 IGotAnOffer Ltd.
Question 8
Correct answer: 2
Sufficient information is provided to calculate the cost
of sale for each lead source:
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
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
2. Bingo bank: $3 / 8% = $37.5
3. Com bank: $6 / 15% = $40.0
Bingo bank has got the lowest cost per sale. In
addition, it can provide 600,000 leads per year which
is sufficient to cover PayCos needs of 300,000.
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.
Copyright 2015 IGotAnOffer Ltd.
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.
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