Case in Point is, in my opinion, the best book of its kind on the market. Cosentino's Case in Point was easier to understand and covered the key techniques/frameworks behind case interviews.
FIRST-ROUND INTERVIEW
I think you are right; I think B is the right answer.” There is no shame in changing your answer if you got it wrong. If you are applying for employment in the industry, there are a few things you should know.
COMMONLY ASKED CONSULTING INTERVIEW QUESTIONS
A DOZEN REASONS TO ENTER CONSULTING
WHAT FIRMS LOOK FOR
S. population is 320 million
A large percentage of the low-income population lives in cities and does not need a car. When your time is up, a consultant comes into the room and you are expected to "present" the case, just as you would in a business school class.
MARKET-SIZING QUESTIONS
Cabin air: It's captured air, so we need to add a barrel for the cabin air.
FACTOR QUESTIONS
Best Case Thinking: The Ivy Case System™
Summarize the question
Verify the objective(s)
Ask clarifying questions
Label the case and lay out your structure
State your hypothesis
If you disprove it, you'll want to update your hypothesis as you proceed through the case. Often the company in the case is settled, so we have no idea about the strength of the brand.
Profit and loss
Another barrier would be that the costs of leaving a market are higher than the costs incurred to remain competitive in the market. Although interviewers mention dozens of different types of cases, the four scenarios listed below are the basic building blocks of many of the cases. Be careful of books that convince you that one structure fits all - it's the lazy way out.
Entering a new market
While it's unlikely that a case will fit neatly into any of these scenarios, you'll notice that the components that make up the different cases in the scenarios below are related.
Pricing
Growth and increasing sales
Once you have an understanding of the market and the company, you'll need to come up with some solutions to increase profits - after all, that's the goal. It's also easier to come up with ideas when you're looking at a heading instead of a blank sheet of paper. It can be difficult because when you're in a stressful situation and you're cut off, it's hard to let go of that thought and come up with something new.
What are the major revenue streams, and what percentage of the total revenue does
You want to submit all revenue-based ideas first, then all cost-based ideas. If you take the time to write your answers first and the interviewer interrupts you, just look at your notes and offer another idea. It takes a lot of stress out of the situation and makes you look more professional.
Does anything seem unusual in the balance of percentages?
Dividing ideas into short-term and long-term solutions is also desirable, especially if there is a time limit for raising profits. He knows every possible answer you can think of and has become impatient with answers. There's a good chance he'll cut you off as soon as he knows where you're headed.
Any major shifts in costs?
Do any costs seem out of line?
Start off with questions about the company. (Remember the core list.)
Determine the state of the current and future market. (Remember the core list.)
Step 3: Investigate the market to determine whether entry makes good business sense
Examples include capital requirements, access to raw materials, access to distribution channels and government policies.
- Start from scratch and grow organically
- Acquire an existing player from within the industry
- Form a joint venture / strategic alliance with another player with a similar interest. What
- What kind of shape is the target company in?
- How secure are its markets, customers, and suppliers?
- How is the industry doing overall?
- What are the margins like? Are they high volume, low margin, or low-
- How will competitors respond?
- Are there any legal reasons we can’t or shouldn’t acquire the target
- Are there technology risks?
- Competitive Analysis: Are there similar products out there? How does our product
- Price-based Costing: What are people willing to pay for this product? If they’re
However you want to understand the company and its objective, its products and the industry. Investigate the industry: Is it growing and how is the customer growing compared to the industry. What is the competitor's new product and how does it differ from what we offer.
COST-DRIVEN PRICING: THE DEADLY BUSINESS SIN
The only good way to price is to start with what the market is willing to pay – and therefore, it must be assumed, what the competition will charge – and design to that price specification.
IVY CASE SYSTEM AT A GLANCE
21 WAYS TO CUT COSTS
- Cross-train workers
- Cut overtime
- Reduce employer 401(k) or 403(b) match
- Raise employee contribution to healthcare premiums
- Institute four 10-hour days instead of five 8- hour days
- Convert workers into owners (if they have a stake in the company they will work longer
- Contemplate layoffs
- Institute across-the-board pay decreases
- Invest in technology
- Consolidate production space to gain scale and create accountability
- Create flexible production lines
- Reduce inventories (JIT)
- Renegotiate with suppliers
- Consolidate suppliers
- Import parts
- Have customers pay sooner
- Refinance your debt
- Sell nonessential assets
- Hedge currency rates
- Redesign health insurance
- overall declining market demand (e.g., soda sales have dropped as
- the possibility that the current marketplace is mature or your
- loss of market share because of substitutions (e.g., video rentals have
However, if costs are not the issue, then you should investigate the product mix and check to see if margins have changed. If the numbers are not an important part of the issue, the interviewer is more likely to tell you not to focus on them. Sound preparation will give one the confidence needed during the actual interview – confidence that will create a positive impression on the interviewer.
Anatomy, Case Starts, Dialogue, and Partner Cases
HARLEY-DAVIDSON
Student: If we keep the price the same, our net profit will be $3.3 billion. Interviewer: So if we raise the price or leave it alone, we will make the same net profit. If we raise the price, we will have lower labor costs because we will be able to lay people off.
COORS BREWING COMPANY
What percentage of the bottled water market does Coors expect to capture in five years. Interviewer: What percentage of the bottled water will we need to get to reach the $2.6 billion goal. There's no way we're going to get 18 percent of the bottled water market in five years.
MUSIC TO MY EARS
He is looking to get 5 percent of the high-end market within a year of entering the market. First I'd like to look at the company, then the high-end headphone market, and finally the different ways the company can enter the market. You said that Company A has 60 percent of the market and that they had $400 million in sales.
IN THE RED
In my third bucket, I would like to explore ways to increase sales, not only through the traditional methods of increasing marketing, but perhaps by changing the product mix. Okay, in the short term we are raising our price for DVD rentals and changing the product mix. Interviewer: In the short term, your plan is to raise the price of the DVDs, change the product mix and increase marketing.
FLATLINE
I suspect that the number of units is therefore limited due to the number of trained doctors. The size of the bubble indicates the ratio of units per number of 85-year-olds. Student: That's just the number I needed to calculate the predicted number of units we would sell.
POWERSPORTS POWERTHROUGH
Student: First, I would like to look at external factors, economic factors, as well as changes in the industry. Regardless, unless industry prices rise, it will hurt everyone in the long run. Student: We were tasked with increasing the share price and profit in both the short and long term.
DISPOSABLE REVENUES
Would retailers allow our customer to exchange casual cups for holiday and/or special cups. It may be possible for our customer to exchange random cups for holiday or special cups in the Food and Drug channels. One way would be to know what percent of the Party's $100 million in revenue is from our customers and what percent is from our competitors.
Case Starts
They are less structured cases because the interviewer has given you a list of information to determine (more common for McKinsey). When the interviewer gives you a list of issues, you can often take the opportunity to quickly draft a final slide. It will act as your outline, a scorecard for the interviewer to follow, and your summary.
CASE STARTS – CASES
Remember, there are no right answers; the interviewer wants to see how you think, how you structure your thoughts and how you communicate. The client has not been profitable for several years and the CEO suspects that the company's high degree of vertical integration is hurting them. How can we grow the company, regain market share and restore the brand to its former glory.
CS1: CHINA WATER
However, competition increased as the sport became more popular and Hootie lost its trend towards smaller boards. And fourth, I would like to know about Nestlé's market share in other key water markets, including North America and Europe. How are those markets growing and would it be wiser to allocate more resources there or to China?
CS2: HACKER GUARD
Is this just Hacker Guard's problem or do all companies in this space have a similar problem. What are the industry revenues and what have been the trends in the last three to five years. Are P&Ls of other firms everywhere or are they only Hacker Guard's?
CS3: HONG KONG VIDEO GAMES
FYI – The real company this example is based on went public in October at $9. Break it down into five main groups: the company, current market analysis, due diligence and risks, costs and exit strategies. What is the segmentation of the industry and have there been any changes in the industry.
CS4: FLINTSTONE, POTTER AND COKE
Even if you try to do it off the top of your head, there's a good chance the interviewer will cut you off mid-step because they know where you're going. It is very difficult to come up with another answer when you are cut off in the middle of your original thought. Once you've worked out the pros and cons, you have the opportunity to ask some questions.
CS5: ITALIAN COMPUTER TABLET
Are there any significant changes in the industry, such as new players or new technology? Are you looking for profits and want to price the tablet at a premium (like Apple). Who is our competition, how do their tablets differ from ours and how much do they charge.
CS6: DIET-DRINK LOSS
CS7: GLOBAL MOTOR CARS
What are the revenues of the parts departments and their trends, and what share of the company's total revenues they represent. Has the parts division been gaining or losing market share over the past three years. Or spin off the parts division from the automaker and make your own company.
CS8: HOOTIE SURFBOARDS
Distribution Channels: Increase through a combination of company-owned stores, Hootie's online store and other retailers, both domestically and internationally.
CS9: PALM TREE PLANTATION EXPORTS
Who are the major players, what market share do they have and how do their products differ from Hooties. State and city budgets are down, housing starts are down, and mall and office building development is also down.). What are the major costs, both fixed and variable, and how have they changed over time.
CS10: JAPANESE HIGH-END HEADPHONES
Who are the most important customers and what is their industry like. State and city budgets are down, housing starts are down, and mall and office building development is also down.). Once you have a feel for the industry, go inside the bracket to get a feel for the company. Who are the major players, what market share do they have and how do their products differ from ours.
Case Practice
And what does success mean for the client - how much market share does he expect in the first year. Determine how best to enter the market: There are three ways to enter the market.
MEXICAN BANK
Before I analyze the bank's costs, both fixed and variable, I will first take a closer look at the bank's income. If our customer has 8 million customers, the average price per customer higher than the average turnover per customer, resulting in a loss. In effect, we would adjust our service delivery model based on the customer's value to the bank.
YELLOW STUFF CHEMICAL COMPANY
Next, I would study the list to see if there are any synergies that we can share. Once we've narrowed down the list, we need to analyze the market to find out who the major players are and what the barriers to entry might be. A barrier can be a stranglehold on the market – if, for example, two companies have an extraordinarily large market share and have a habit of destroying new entries.
EASTERN TRAINING NETWORK
Our client is a midsize training company that serves New England and the Atlantic Seaboard regions. It offers a variety of computer training and consulting
I would try to figure out what I could do to raise the barriers to entry and keep IBM out. To build capital to buy small firms when IBM comes to town. On the other hand, it's because IBM is so big that things could very well fall apart.
COKE
It could follow Coke's lead and raise its prices to match Coke's; can leave prices as they are; or it can take advantage of the price change and lower its price. If Pepsi keeps the price the same, its volume will increase from 6 percent to 12 percent. If Pepsi lowers its prices to 21 cents, Pepsi's volume will increase from 6 percent to 20 percent.
LONGEST-LASTING LIGHT BULB
GE has invented a light bulb that never burns out, and the marketing director wants us to help her set the price. So if we use the conventional light bulb pricing model, that would mean the consumer would have to pay $75 for this light bulb. Then we have to ask ourselves whether a consumer would pay €37.50 for a light bulb that never wears out.
GETTING INTO DIAPERS