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Medium Profitability Strategic Decision

Locker Up!

#Real Estate
ProHub Comment

This case tests a candidate's ability to build a revenue model from limited information and recognize that excess capacity presents opportunities beyond the original business model. The key insight is recognizing that despite having 2000 locker capacity, actual demand is only ~700 lockers, leaving significant room to repurpose space for alternative revenue streams.

Estimated Time 25 minutes
Difficulty Medium
Source HKUST
10 / 100
Our client is a real estate developer in Hong Kong owning several shopping malls with high foot traffic in Central and Sheung Wan. The client wishes to build six banks of lockers in various locations for use by local residents, tourists, and business owners in the malls owned by the client. The client has asked us to maximize the profitability that can be gained from these lockers.

Clarifying Information

  1. The six banks of lockers are essentially identical in size and capacity.
  2. Individual locker sizes vary, but are charged at the same rate.
  3. Little variation is expected in usage patterns between locations.
  4. There are 2000 lockers spread more or less evenly across the six locations.
  5. There are no nearby hotels that offer concierge services, gyms, or any other commercial lockers available in the area, or entities that offer temporary storage solutions.
Mock Interview
Interviewer

Our client is a real estate developer in Hong Kong owning several shopping malls with high foot traffic in Central and Sheung Wan. The client wishes to build six banks of lockers in various locations for use by local residents, tourists, and business owners in the malls owned by the client. The client has asked us to maximize the profitability that can be gained from these lockers.

You

Thanks. Before analyzing, I'd like to clarify a few key questions...

Interviewer

Good question. Let me provide some background information...

You

Based on this, I suggest analyzing from these dimensions...

AI Score
Structure Analysis Communication Business Sense Quantitative
Practicing...
Score coming soon
Practice this case with AI Mock Interview

A Hong Kong real estate developer seeks to maximize profitability from six planned locker banks in shopping malls. Candidates must segment users (tourists, residents, business owners), calculate revenues based on different pricing models (hourly vs. monthly), and ultimately recommend adopting a validation system while converting excess capacity to commercial uses.

Key Insights:

  1. Build a profitability tree segmenting users by type (hourly vs. monthly) and derive pricing from comparable services
  2. Recognize that low utilization (700/2000 lockers) indicates excess capacity is the core constraint, not demand
  3. Validate system generates incremental revenue by converting customers into higher-margin passes while maintaining total user volume
  4. Repurpose unused locker space for storefronts, kiosks, or advertising to unlock additional revenue from underutilized real estate