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Medium Profitability Brainstorming

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 15 minutes
Difficulty Medium
Source HKUST
50 / 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.