Interviewer view · keep this screen to yourself
Standard: Shuyun Tea: should it match a rival's CNY 9.9 price?
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
Shuyun Tea runs 300 tea drink shops in Sichuan, in western China. A large rival has started selling many drinks at CNY 9.9, and Shuyun now sells 10 percent fewer cups. Should Shuyun cut its prices to match?
Format note: Difficulty: Standard. Format: candidate-led, with interviewer dialogue. Industry: Food and drink retail. Region: Mainland China. Interview length: about 30 minutes. The company is fictional and all figures are illustrative.
2. Answers to clarifying questions
Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.
If asked: What are Shuyun's price and costs?
Answer: Its average drink sells for CNY 16. Ingredients, cups and delivery app fees cost about CNY 6 a cup (illustrative).
If asked: How many cups does it sell?
Answer: About 3 million cups a month before the rival's move, and 2.7 million now (illustrative).
If asked: Could the shops make many more drinks?
Answer: At peak hours most shops are already busy. Together they could make at most about 3.6 million cups a month (illustrative).
3. The hypothesis a strong candidate states
Listen for an early, testable guess like this one. It does not need to match word for word.
Matching a much lower price needs a big rise in cups to keep the same contribution. My hypothesis is that Shuyun should not match, and should answer price-sensitive buyers in a narrower way.
4. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Monthly contribution = cups sold x (price - cost per cup), today and at the rival's price
- Contribution per cup at CNY 16 and at CNY 9.9
- Key: Cups needed at the lower price, and what the shops can make
- Which buyers left, and a narrower answer for them
5. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: Contribution per cup today
What a strong candidate does: Candidate: "CNY 16 minus CNY 6."
Contribution per cup today (CNY): 16 - 6 = 10
Step 2: Monthly contribution now
What a strong candidate does: Candidate: "Sales fell from 3 million to 2.7 million cups a month, at CNY 10 each."
Monthly contribution now (CNY): 3,000,000 × 0.9 × (16 - 6) = 27,000,000
Step 3: Contribution per cup at CNY 9.9
What a strong candidate does: Candidate: "CNY 9.9 minus the same CNY 6."
Contribution per cup at CNY 9.9 (CNY): 9.9 - 6 = 3.9
Step 4: Cups needed at CNY 9.9
What a strong candidate does: Candidate: "To keep CNY 27 million a month at CNY 3.9 a cup:"
Cups needed a month at CNY 9.9: 3,000,000 × 0.9 × (16 - 6) ÷ (9.9 - 6) = 6,923,077
Step 5: Increase needed
What a strong candidate does: Candidate: "Compared with the 2.7 million cups sold now."
Increase in cups needed (%): (3,000,000 × 0.9 × (16 - 6) ÷ (9.9 - 6) ÷ (3,000,000 × 0.9) - 1) × 100 = 156
Step 6: Best case at CNY 9.9
What a strong candidate does: Candidate: "Even if the shops made their full 3.6 million cups a month:"
Monthly contribution at full capacity and CNY 9.9 (CNY): 3,000,000 × 1.2 × (9.9 - 6) = 14,040,000
Step 7: Curveball: a smaller cup
What a strong candidate does: Interviewer: "Marketing suggests a smaller cup at CNY 11.9 that costs CNY 4.5 to make. It would win back the 300,000 lost cups a month, but 400,000 current cups would trade down to it." Candidate: "New cups at CNY 7.4 each, minus CNY 2.6 lost on each cup that trades down:"
Monthly gain from the smaller cup (CNY): 300,000 × (11.9 - 4.5) - 400,000 × ((16 - 6) - (11.9 - 4.5)) = 1,180,000
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Shuyun should not match the CNY 9.9 price; it should hold its main prices and add a smaller cup at CNY 11.9. First, each cup earns CNY 10 today but would earn only CNY 3.9 at CNY 9.9. Second, keeping today's CNY 27 million a month at CNY 9.9 would need about 6.92 million cups, 156.41 percent more, far beyond what the shops can make. Even at full capacity Shuyun would earn just CNY 14.04 million. Third, the smaller cup wins back the 300,000 lost cups and adds about CNY 1.18 million a month, even after 400,000 cups trade down. Test the smaller cup in 30 shops and track how many buyers trade down.
Risks a strong answer names: More current buyers than expected may trade down to the smaller cup; The rival may cut prices further on the drinks Shuyun sells most.
Next steps: Test the smaller cup in 30 shops for six weeks; Find which shops lost the most cups, and whether they sit near the rival.
Strong versus weak
A strong answer
Worked out how many cups a price cut would need, saw it was beyond capacity, and answered the rival with a narrower offer for the buyers who left.
A weak answer
Matched the price to protect market share, without checking that it halves contribution even with full shops.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?
Total
0 out of 25
Score all five criteria to see the band and the feedback template.
Next: another case in Partner mode
Swap roles and run the next case, so you both practise answering and scoring.