MiniCase Questions_consulting

Mini Case Questions

1. Volvo – The Safest Car in the United States*

New US government report shows that fewer people die in a Volvo than in any other car brand in America. Assess the validity of this statement. Now you have 2 minutes to think about it, and 1 minute to give your presentation. Possible Solution:

Step 1. The validity of the claim that Volvo has the safest car in the US because fewer people die in it is at best ambiguous. I have several concerns about this claim:

1) The definition of “safe” — the statement assumes that a safe car is only one where someone does not die IN the car. But it’s possible the passenger died later or suffered severe injury. Now lets assume that a safer car really is one where fewer people die in it, the next concerns I have are:

2) # cars on the road - Perhaps Volvo has FEWER cars on the road and you’d expect them to have FEWER deaths in their cars because of it. To test this, I would need to know how many cars from Volvo are on the road vs. other brands, and compare the relative market share of cars to share of deaths.

3) # passengers in the car – Perhaps single people drive Volvo’s so there’s only one person in the car, compared to say a Toyota which is perhaps a family car which perhaps carries more passengers. So maybe when a Volvo crashes it kills the 1 person in the car more OFTEN, but in other car brands people die LESS OFTEN, but there are MORE passengers. To test this, I would need to know the average number of passengers per trip in Volvo cars vs. other manufacturers.

4) # accidents - Perhaps Volvos get in more accidents a lot more often than other cars, but perhaps once you get in an accident you’re less likely to die. For example, maybe Volvo brakes don’t work so you crash all the time, but the Volvo body frame construction and airbags are excellent. To test this, I’d need to know how many accidents involve Volvos compared with other cars — especially in comparison to their relative market shares.

5) Mileage – Perhaps Volvos are driven less often for shorter distances than cars from other manufacturers. If Volvo’s are driven less often, for fewer miles, then it’s possible Volvos have less time a risk of being in an accident — so it’s possible the car is actually more dangerous, but used less. To test this, I’d need to know how many miles per year the average Volvo is driven compared to other car brands.

6) The driver – Perhaps Volvo’s are not actually safer cars, but perhaps Volvo DRIVERS are safer. This might be hard to test with data, but to start it would be useful to get the accident history of drivers who own Volvos when they drive