Corveta Motors: Pressure-Test This Recommendation
Consulting
medium35 min0 submissionsMcKinsey
Scenario
A team has finished a margin diagnostic at Corveta Motors (€850 M revenue) and drafted the recommendation below. The partner wants it pressure-tested before the client readout.
The draft recommendation
"Operating margin fell 6 points this year. Our analysis shows the business has lost pricing discipline. We recommend an immediate across-the-board price increase of 5-7%, supported by tighter discount governance."
The evidence pack behind it
| Finding | Value |
|---|---|
| Average realised price, like-for-like | -1% |
| Premium-tier volume | −21% |
| Budget-tier volume | +25% |
| Discount rate on premium tier | Unchanged |
| Input costs | +2% |
The slide is well built and the client is expecting a pricing answer.
Supporting data
evidence
- margin drop points
- 6
- premium discount rate
- unchanged
- budget volume change pct
- 25
- premium volume change pct
- -21
- like for like price change pct
- -1
draft recommendationacross-the-board price increase of 5-7%
Your task
Pressure-test the recommendation. Your answer should provide:
- Analysis — does the recommendation follow from the evidence? Show why or why not.
- Risks — what happens if the client acts on it as written.
- Recommendation — what the evidence actually supports.
State any assumptions you make.
Ready to move forward? Up next: Build the Model: SaaS Unit EconomicsNext question
How you'll be graded
100 points, 60% to pass.
- explanation20
- residual review15
- logic correction30
- error identification35
Hint
Reveal suggested structure
Does the conclusion follow from the evidence; price vs mix decomposition; corrected recommendation