Fenway Park T-Shirt Vendor Case
A worked general business case example
LGA AUG 2010 ©
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Introduction
General business skills are used in assessment centres to test general management
skills.
They have a number of advantages. Because no specific industry knowledge is
required, business experience does not provide an advantage. In addition,
specialised knowledge gained in the past cannot be used to help arrive at a logical
solution.
Instead candidates must use their own analytical skills to determine how to identify
and resolve issues.
This case study is provided for illustration only. It shows how a particular case
question could be approached, without the need for specialist knowledge.
Read through it and ensure that you understand how the case creators arrived at
the model answer. Then consider those approaches when you face a case in your
own assessment centre or management training.
LGA AUG 2010 ©
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Fenway Park T-Shirt Vendor
Assess whether or not a Red Sox t-shirt vending cart operated
outside of Boston’s Fenway Park can be a profitable business
• Background Facts
Fenway Park is home to the Boston Red Sox, a major league baseball team
Many vendors operate single-cart businesses (e.g., hotdog carts, ice cream carts,
t-shirt carts, etc…) immediately outside ballpark grounds for pre- and post-game
sales
Average game attendance:
30,000
Average game duration:
5 hours (includes pre- and post-game)
160 games per season:
50% home, 50% away
Average ticket price: $40 per person
Business intention is to operate a single vendor cart outside of Fenway Park on the
main entrance road, where people come to enjoy the festive pre-game atmosphere
LGA AUG 2010 ©
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How to Start
Look at all of the data carefully
Review the question: what are the issues you need to clarify to
answer the question. This case asks your views of potential
profitability. What are the key issues that determine profitability?
Identify a framework that will help you structure the problem
Start your case with a thought process – explain to yourself how you
intend to approach the problem
Be aware of time constraints and be prepared to summarize your
findings
Remember: Points are awarded for how you approach the question,
not simply getting the correct answer.
Smile ☺! You’re supposed to be enjoying yourself.
LGA AUG 2010 ©
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Thoughts & Notes
Fenway Park – is it profitable to operate a t-shirt cart?
What facts were given to you?
Attendance 30,000
80 home games per year
T-shirts sell for between $10 - $25
HOW DO I BREAK THIS DOWN??
HOW DO I PROCEED?
LGA AUG 2010 ©
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Analytical Framework
Use a framework that will help you and the observers understand your thought process
Profit
Revenue
Quantity
• How many t-shirts
can you sell per
game?
• What factors affect
sales?
Cost
M I N U S
Price
Fixed
• How much can
you charge for tshirts?
LGA AUG 2010 ©
Variable
• What are my costs?
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Cost Analysis
Start with the easiest element – in this case, the cost component is easiest to estimate.
Split them up into the two most common categories: variable and fixed costs.
Profit
Cost
Revenue
Quantity
• How many t-shirts can
you sell per game?
Price
Fixed
• How much can you
charge for t-shirts?
Variable
• What are my costs?
• What costs are start-up,
(e.g., one-time only)?
• What costs are recurring?
How often? (Annual,
monthly, periodic?)
LGA AUG 2010 ©
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Cost Analysis
No data has been given, so you are expected to make reasonable estimates.
Profit
Cost
Revenue
Quantity
• How many t-shirts
can you sell per
game?
Price
Fixed
• Cart Purchase
~$5,000 (onetime)
• How much can
you charge for
t-shirts?
or
• Cart Lease ~$1,000
(semi-annual)
• Operator’s License
$1,000 (annual)
• $6,000 Total
LGA AUG 2010 ©
Variable
• Labor
− $10/hour
− 5-hour (incl. preand post-game)
− $50 labor per
game, plus…
• T-shirt cost
− $2 per t-shirt
− how many t-shirts
do I need?
?????
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Revenue Analysis: Quantity
What is the best
metric to use?
What is per game
attendance?
How many people
buy things at
baseball games
(food, hats, tshirts, banners,
balls, etc.)?
How many people buy t-shirts per baseball game?
How many people buy t-shirts from us?
30,000 people per game
6,000
Buyers (20%)
24,000
Non-Buyers (80%)
How many people
buy t-shirts?
1,500
500
T-shirt Buyers (25%)
4,500
Buy
Other Things (75%)
How many people
buy t-shirts from us?
50
Buy Our T-shirts (3%)
1,450
Buy
T-shirts from Others
SANITY CHECK: DOES THIS MAKE SENSE?
LGA AUG 2010 ©
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Sanity Check
50
Buy Our T-shirts
SANITY CHECK: DOES THIS MAKE SENSE?
Does 50 t-shirts sold per-game sound right?
There are 1,500 t-shirts sold and I am selling 50 shirts, so that implies that
there are ~30 t-shirt vendors at the park. Is that a reasonable number?
If we really only sell t-shirts for 2 pre-game hours and 1 post-game hour,
we effectively have 180 “selling minutes” OR… we sell 1 t-shirt every
3-4 minutes
Can one person handle a t-shirt sales transaction every 3½ minutes?
OUR ASSUMPTIONS SEEM REASONABLE
LGA AUG 2010 ©
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Revenue Analysis
Profit
Cost
Revenue
Quantity
• 50 t-shirts sold
per game
Price
Fixed
• $15 per t-shirt
• Cart Purchase
~$5,000 (onetime)
• Total Revenue per Game $750
or
• Cart Lease ~$1,000
(semi-annual)
• Operator’s License
$1,000 (annual)
• $6,000 Total
LGA AUG 2010 ©
Variable
• Labor
− $10/hour
− 5-hour (incl. preand post-game)
− $50 labor per
game, plus…
• T-shirt cost
− $2 per t-shirt
− 50 t-shirts per
game
• Total $150
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Making the case
Now that you’ve calculated the various components of the profit tree, summarize it on
an annual basis
Profit
Revenue
Quantity
• 50 t-shirts sold
per game
Cost
Price
• $15 per t-shirt
• $750 per game revenue
Fixed
Variable
• $5,000 start-up costs
(cart purchase)
• $50 labor wages
per game
• $1,000 annual
operator’s license
• $2 cost per t-shirt
x 50 shirts = $100
• $6,000 annual costs
• $150 per game costs
ANNUALIZE & SUMMARIZE
LGA AUG 2010 ©
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Annual Summary
Sanity check your findings once again and summarize them
Total Revenue per Game
$ 750
Less: Total Costs per Game
Net Income per Game
($ 150)
$
600
Total Home Games per Year
Annual Income
80
$48,000
Less: Annual Fixed Costs
Total Annual Profit
($6,000)
$42,000
What do you think?
Too high? Too low?
LGA AUG 2010 ©
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Case Assessment: “How Did You Do?”
Excellent
Good
• Demonstrates clear logic
• Demonstrates reasonable logic
• Uses relevant framework and/or provides
structure to case problem
• Uses framework, but not necessarily
most relevant
• Guides interviewer through thoughtprocess
• Provides some explanation of
thought-process
• Offers both broad and detailed
assumptions
• Makes broad assumptions, but lacks
detailed considerations
• Calculates numbers accurately
• Does not gauge all answers for
reasonability or accuracy
• Sanity checks answers & recovers from
potentially “off” estimates
• Summarizes findings and makes a firm
and actionable conclusion
• Makes creative considerations beyond
obvious case issues:
− Product differentiation
• Summarizes findings but conclusion
lacks conviction
• Makes some creative considerations,
but could push to another level of
detail
• Shows enthusiasm
− Location
Needs Improvement
• Fails to grasp key issues or
demonstrate clear logic
• Does not use framework or
structured approach
• Thought-process is rambling (or
not communicated at all)
• Assumptions lack depth and fail to
consider key issues
• Estimates are unreasonable or
calculated incorrectly
• Does not summarize findings, or
summary does not take into
account key issues and/or
estimates
• Lacks creative thinking and
enthusiasm
• Nervous and fidgety
− Seasonal influences (e.g., weather,
playoffs, etc.)
− Customer loyalty
• Shows enthusiasm
LGA AUG 2010 ©
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What did you learn?
We hope that you enjoyed this sample case!
Some of the main lessons were:
1. Read the data carefully and ensure that you understand the question. The
aptitudes being assessed are logical thinking, analytical skills, numeracy ,
communications and ability to grasp details as well as the bigger picture
2. Ensure that you have an analytical framework to guide your thinking.
3. Check the facts that you have been given. You may need to create data
for yourself based on analysis drawn from reasonable assumptions
4. Practice makes perfect. Once you have experienced these type of cases,
they are no longer so daunting
Learned enough? There are plenty more case examples and quizzes to
develop your skills.
LGA AUG 2010 ©
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