answer accurately

Case Type: new product, new technology, pricing & valuation. Consulting Firm: McKinsey & Company first round full time job interview. Industry Coverage: manufacturing. Case Interview Question #00689: Our client Moldovan Coffins is a high-end coffin maker in the country of Moldova. Moldova, officially the Republic of Moldova, is a landlocked country in Eastern Europe located between Romania to the west and Ukraine to the north, east, and south. Moldova declared itself an independent state with the same boundaries as the Moldavian Soviet Socialist Republic in 1991 as part of the dissolution of the Soviet Union. The total population of the country amounted to 4 million (2004 Moldovan census). The owner of Moldovan Coffins business has seen substantial change in his market in recent years and is contemplating the future of his business. Up until now, he has been in the business of building high-quality, handcrafted coffins largely by hand with a skilled labor force. Recently, however, he has become aware of a new technology that would allow him to build machine-made coffins with much less labor. Should he invest in this new technology? And should he even remain in the coffin-making business in the first place? Why or why not? Possible Solution: Note that this case requires the interviewer to drive key points in the discussion. Allow the candidate to formulate a plan and then prompt him/her to consider each of the topics listed below. Question #6: What would the value of the company be if the owner invests in the new technology? Provide the following information if asked: Investment - Investing in the new technology will cost the firm $1M. Cost Savings - Material costs remain the same, but labor costs are reduced by 50%. Proprietary Nature of Technology - The new coffin-making technology is being offered for sale by a machine tool company, who holds the patent. They are not offering exclusivity to any customers (i.e. they will sell to Moldovan Coffin's competitors if possible) Competitive Threat - It is not known whether the competitors have acquired or are planning to acquire this new coffin-making technology Customer Preferences - While the machine-made coffins are not "hand made", the quality perceived by the customer is the same or better. It is believed that the customer will be indifferent between the quality and appearance of a hand-made and a machine-made coffin. Brand Impact - The candidate may argue that a machine-made coffin might negatively impact Moldovan Coffin's brand. If so, ask them how they would test this (e.g. consumer research), but tell them to assume that it would have negligible impact