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BCG Medium Reducing Costs Accounting Brainstorming Creativity

Stance at a Distance

#Education (Public Sector) #Education #Public Sector
ProHub Comment

This case tests the candidate's ability to analyze school finances through income statements and benchmarking, then identify cost-cutting opportunities. The case requires both quantitative analysis (calculating savings from staff reductions) and qualitative reasoning (identifying risks and alternative funding sources). A strong candidate will recognize that tuition increases are constrained by competitive positioning and enrollment trends, making cost reduction the primary lever.

Estimated Time 15 minutes
Difficulty Medium
Source NYU
50 / 100
Our firm has just wrapped up a project with The Stance School, which offers K-12 education in Philadelphia, to help them with developing two major strategic initiatives. The first initiative, which is the priority, is an e-learning platform for their students to facilitate remote learning, in response to a global pandemic that resulted in students having to take classes from home for the last few months of the school year. The other initiative is a professional development tool to help the teachers with developing and effectively providing a remote curriculum to the students. The team that worked on the strategic planning determined that the cost would be $1M. You are now tasked with determining how these initiatives will be funded within the next year and whether or not the school should move forward with this project.

Clarifying Information

  1. Currently it is 2020 H1 (First Half)
  2. The initiatives will be launched at the start of the 2020-2021 school year
  3. The last income statement we have is from FY ‘18
  4. The school is a private school in a major metropolitan city in the US
  5. The school consists of a lower and upper school, educating levels K-12
  6. There are 1000 students in the school
  7. Students are primarily middle-upper middle class
  8. ~10% of the students are on scholarship
  9. No need to consider ongoing costs for the program. With the $1M in savings per year, that should also cover ongoing run-rate of the initiatives.
  10. Endowment is allocated for specific purposes and to ensure that the school is funded in the long-term. The endowment would not be an option for funding the initiatives.