I went straight to external factors first, which in hindsight was backwards.
Start by clarifying the goal and defining what 'declining sales' means (e.g., revenue, units, or market share) and over what period. Then structure your investigation by breaking down the problem into internal and external factors, using data to isolate the root cause before proposing solutions.
Pro tip: Demonstrate a hypothesis-driven approach: form 2-3 hypotheses early and prioritize them based on impact and ease of validation. This shows you can navigate ambiguity efficiently, a key trait for Google PMs.
Ask clarifying questions to understand the scope: Is the decline in revenue, units, or profit? Over what time period? Is it specific to certain locations or the entire chain? This ensures you're solving the right problem.
Decompose sales into drivers: number of customers, average order value, frequency, and retention. Analyze trends in each to identify which component is declining and by how much.
Based on the data, generate hypotheses for the decline, such as increased competition, changing customer preferences, operational issues, or pricing problems. Prioritize hypotheses by likelihood and impact.
Collect both quantitative data (sales trends, customer surveys, competitor analysis) and qualitative data (customer feedback, employee insights) to test each hypothesis. Use tools like cohort analysis, funnel analysis, and A/B tests if applicable.
Identify the root cause(s) and propose actionable solutions. Prioritize solutions based on impact and feasibility, and outline how you would measure success.
AI-generated suggestions, not part of the candidate's original notes. May be inaccurate — verify before relying on them.