Travel Wizard
Practice this intermediate competitive response case interview question in the Transportation sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
This case requires candidates to estimate demand for a disruptive technology by analyzing current airline passenger data and applying churn assumptions to different customer segments. The key insight is recognizing that first-class passengers have the highest willingness to switch (80% churn), creating disproportionate revenue impact despite smaller passenger volumes. Candidates must combine market sizing, financial analysis, and strategic thinking about competitive response.
The R&D team of Travel Wizard, a technology innovator, just announced that they have successfully invented a teleportation device which they plan to launch commercially next month. This device consists of a transmission room and a receiver room which can be placed at any distance and this one-of-a-kind device will be able transport a passenger between the two rooms within seconds.
Your client is the owner & CEO of SG Airlines, one of the biggest airlines in the world and she wants to know a few things: (1) How many customers should they expect to lose to Travel Wizard? (2) What will be their annual reduction in profit as a result?
Clarifying Information
- Assume that SG Airlines loses customers only to Travel Wizard and to no other player
- Travel Wizard only has 2 teleportation rooms for now, and does not intend to create any new teleportation rooms
- One room will be placed in New York, while the other one will be placed in London. Each room can act as a transmitter or a receiver room
- The main objective for the owner/CEO of SG Airlines is to calculate the loss in profit and to give ideas to turnaround the business
- SG Airlines is not looking to enter the teleportation business