Boston Consulting Group Potential Test
Free Practice Test
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Free BCG Potential Test
Copyright © 2015 IGotAnOffer Ltd.
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
Based on the market research,
what is the average ticket
price Olympian Airways
should charge for a flight from
London to Paris?
1.
2.
3.
4.
€102
€136
€125
€116
Doc 1
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Doc 4
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
pricing strategies in order to preserve
their market share.
5,000 people were asked how much they
would pay for a flight from London to
Paris.
Olympian Airways is one of the largest
airlines in Europe and is revamping its
Question
x / for
23international shortpricing strategy
haul flights.
Number of respondents and price points:
€200
1,100
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.
€100
1,500
€150
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€50
500
BCG Potential Test – Olympian Airways
Question 2
What ticket price should
Olympian Airways charge to
maximise gross profit per
day?
1.
2.
3.
4.
€100
€125
€150
None of the above / we
lack sufficient information
at this stage
Doc 1
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Doc 3
Maximise gross profit
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,
Question
x / 23 electronics, etc.) to
alcoholic beverages,
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.
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Doc 4
Scenario analysis
Scenario
A
B
Flight cost and tickets’ revenue
Avg cost per flight
€15,000
€15,000
30
20
Ticket price
€100
€150
# passengers /
flight
200
150
# flights / day
Distribution of passengers
C1
50%
30%
C2
30%
30%
C3
20%
40%
Avg duty free spending per passenger
C1
€5
C2
€10
C3
€15
BCG Potential Test – Olympian Airways
Question 3
Which of the factors listed
below would not affect the
gross profit difference
between scenarios A and B?
1.
2.
3.
4.
Ticket prices
Aircrafts’ seat capacity
Fuel costs
None of the above
Doc 1
Doc 2
Doc 3
Maximise gross profit
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,
Question
x / 23 electronics, etc.) to
alcoholic beverages,
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.
Copyright © 2015 IGotAnOffer Ltd.
Doc 4
Scenario analysis
Scenario
A
B
Flight cost and tickets’ revenue
Avg cost per flight
€15,000
€15,000
30
20
Ticket price
€100
€150
# passengers /
flight
200
150
# flights / day
Distribution of passengers
C1
50%
30%
C2
30%
30%
C3
20%
40%
Avg duty free spending per passenger
C1
€5
C2
€10
C3
€15
BCG Potential Test – Olympian Airways
Question 4
Given the data you are
provided with, what is the
maximum number of points
one can earn by buying a
single ticket?
1.
2.
3.
4.
59,700
62,300
5,970
6,230
Doc 1
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Doc 3
New customer loyalty programme
Miles & Bonus
In addition to reviewing its pricing
strategy, Olympian Airways has also
decided to launch a new loyalty
programme called Miles & Bonus.
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
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.
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Doc 4
Data
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.
None of these tickets earns less than 500
points and exactly 15 of them earn less
than 1,200 points.
BCG Potential Test – Olympian Airways
Question 5
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?
1.
2.
3.
4.
€56,048
€56,016
€56,480
€56,160
Doc 1
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Doc 3
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
aircrafts will have three different types of
seats: first, business and economy.
Average ticket prices for popular
destinations are expected to be €700 for
first class, €300 for business and €150 for
economy. The average duration of these
flights is 3 hours.
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.
Copyright © 2015 IGotAnOffer Ltd.
Doc 4
First and business customers get free WiFi on board but economy customers need
to pay €2 / hour for using it.
BCG Potential Test – PayCo
Question 6
What is the current cost per
sale for PayCo assuming all
lead sources have the same
conversion rate?
1.
2.
3.
4.
$39 / sale
$44 / sale
$49 / sale
$54 / sale
Doc 1
Doc 2
Doc 3
Doc 4
Cost per sale
Case overview
PayCo is a payments company that
processes debit card and credit card
transactions in the United States.
Current situation
PayCo purchases lists of leads at
different prices from Alma Bank, Bingo
Bank and Com Bank.
PayCo’s clients are shops such as
restaurants, bars, apparel shops,
supermarkets, petrol stations, etc.
Share of
total mix of
leads (%)
Question
x rents
/ 23 debit and credit card
The company
Alma Bank
$5
30%
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.
Bingo Bank
$3
60%
Com Bank
$6
10%
The company works with banks to acquire
new clients. It purchases lists of
businesses from them and calls them to
sell card machines and services.
Copyright © 2015 IGotAnOffer Ltd.
Cost per
lead ($)
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%.
BCG Potential Test – PayCo
Question 7
What is the maximum
conversion rate that can be
achieved by PayCo using the
the three banks as a lead
source?
Doc 1
Doc 2
Doc 3
Maximise conversion rate
Bank by bank analysis
1.
2.
3.
4.
10.5%
11.2%
11.8%
12.3%
Doc 4
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.
Conversion rate results
After carrying out some research, your
team finds out that the conversion rate
between the three banks is actually
different.
PayCo needs to achieve its sales target
by using 300,000 leads per year.
Question
23
Bingo Bank x
is /established
in the Midwest
Conversion
rate
# of leads
available
per year
Alma Bank
12%
100,000
Bingo Bank
8%
600,000
Com Bank
15%
80,000
and primarily serves Mom and Pop
businesses.
The team at PayCo has always assumed
a similar conversion rate of 10% across
all three banks.
Copyright © 2015 IGotAnOffer Ltd.
BCG Potential Test – PayCo
Question 8
What is the minimum cost per
sale PayCo can achieve by
using Alma Bank, Bingo Bank
and Com Bank as sources of
leads?
Doc 1
Doc 2
Doc 3
Maximise conversion rate
Bank by bank analysis
1.
2.
3.
4.
$35.0 / sale
$37.5 / sale
$40.0 / sale
None of the above / we
lack sufficient information
at this stage
Doc 4
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.
Conversion rate results
After carrying out some research, your
team finds out that the conversion rate
between the three banks is actually
different.
PayCo needs to achieve its sales target
by using 300,000 leads per year.
Question
23
Bingo Bank x
is /established
in the Midwest
Conversion
rate
# of leads
available
per year
Alma Bank
12%
100,000
Bingo Bank
8%
600,000
Com Bank
15%
80,000
and primarily serves Mom and Pop
businesses.
The team at PayCo has always assumed
a similar conversion rate of 10% across
all three banks.
Copyright © 2015 IGotAnOffer Ltd.
BCG Potential Test – PayCo
Question 9
Which of the following
statements would NOT
increase the motivation of
sellers handling leads from
Bingo Bank?
Doc 1
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Sellers incentives
Day to day
1.
2.
3.
4.
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
PayCo’s 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
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.
leads from their respective bank and work
through the list during the day.
The Head of Sales has noticed that
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.
Copyright © 2015 IGotAnOffer Ltd.
Doc 4
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.
2.
3.
4.
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
Doc 1
Doc 2
Doc 3
Doc 4
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.
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.
Question x / 23
The head of sales suspects that this
might be due to sellers selling at
increasingly lower prices to increase their
bonus.
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
PayCo’s services at increasingly less
profitable prices.
Copyright © 2015 IGotAnOffer Ltd.
Answer key
Question 1
Question 2
Correct answer: 2
Correct answer: 1
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
You are asked to determine which of the two
scenarios maximises gross profit. The gross profit for
each scenario can be calculated as follows:
Answer 2 is therefore the correct answer.
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.
Copyright © 2015 IGotAnOffer Ltd.
Answer key
Question 3
Question 4
Correct answer: 4
Correct answer: 1
Ticket prices will affect revenues for each scenario
and will therefore affect the gross profit difference
between them.
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.
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.
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.
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.
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, 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.
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.
Copyright © 2015 IGotAnOffer Ltd.
Answer key
Question 5
Question 6
Correct answer: 1
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
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.
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
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
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
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
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.
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 PayCo’s needs of 300,000.
The correct answer is therefore answer 2.
Answer key
Question 9
Question 10
Correct answer: 4
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”.
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.
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.
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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