National Gallery: Strategy and Optimization
Practice this intermediate profitability case interview question from BCG in the Public Museum sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
This case tests candidates' ability to balance quantitative financial analysis with qualitative strategic considerations. The profitability calculation favors reducing exhibitions (profit increases from $4.4m to $6m), but the recommended answer emphasizes mission alignment and risk mitigation, requiring candidates to think beyond pure optimization to consider stakeholder impact and market uncertainties.
Whilst entry to the National Gallery is free, tickets are sold for special exhibitions. The VP of Operations is evaluating the possibility of changing the frequency of hosting special exhibitions.
National Gallery currently hosts 4 special exhibitions per year, each lasting for up to 11 weeks (as 2 weeks are required to change display items between exhibitions). Looking at the special exhibition revenue/cost structure in Exhibit 1, do you think reducing special exhibitions to 3 per year is a good idea?
Clarifying Information
- About 500,000 visitors are interested to see each special exhibition.
- The first and last week of each special exhibition are the least popular times – each only attracting 5% of interested visitors. The remaining visitors’ choice of visit timing is split evenly across other weeks (but some visitors may be turned away if visitor numbers exceed capacity)
- Max capacity per week = 40,000
- Tickets to special exhibitions sell for $10
- Each exhibition incurs $3m fixed costs to stage (including costs of acquiring or leasing some artwork from partner museums, costs of engaging experts to curate exhibitions, operational costs of transporting and hanging artworks, etc)