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The case is set in the 1990’s when Toys “R” Us was the category killer and Walmart was deciding to enter the category. Given the economics, Michael needs make a decision.
Michael makes a classic mistake by not using the time to build on the discussion or move the case forward. Kevin explains this mistake during the feedback discussion.
Michael struggles to understand the profitability terms used by Kevin, thereby slowing him. This case includes the main profitability concepts tested in McKinsey interviews.
Michael struggles to use the data provided by Kevin to produce a more tailored approach. He presents a useful, but basic, framework.