Case Interview Preparation

PRACTICE SESSION 2

The ADC Consulting Club

March 9th, 2017
Recap
We covered the following on Tuesday…..
 Main steps in a case interview
 Frameworks
 Thinking and speaking out loud
 Some terminologies: percentage, margin, market share, currency change
 Structure of a profit/loss scenario case interview
Today
Case Commandments
Core Problem Solving Tools
Case Scenarios
Structured Road Map – Mutually Exclusive, Collectively Exhaustive
Summarizing the Case Results
Profit Scenario Case Practice
 Airport Taxi by McKinsey
 Strawberry Jam from Ross Casebook 2010 (pg 32)
 BONUS: Japanese Electronics Manufacturer from Case in Point
The Case Commandments – Case In Point
 Listen to the question
 Take notes
 Summarize the question
 Verify the objectives
 Ask clarifying questions
 Organize your answer
 Hold that thought for “one alligator” – think before you speak
 Manage your time
 Work the numbers
 Be coachable
 Be creative and brainstorm
 Exude enthusiasm and a positive attitude
 Bring closure and summarize
 Core Problem Solving Tools
1. Hypothesis
2. Issue Trees/Frameworks
3. Drill-down Analysis
4. Synthesis or Summary

Victor Cheng – Case Interview Secrets

6

The Twelve Main Case Scenarios

Strategy Case Operations Case
 Entering a new market  Increasing sales
 Industry Analysis  Reducing costs
 Mergers and Acquisitions  Improving the bottom line
 Developing a new product
 Turnarounds
 Pricing Strategies
 Growth Strategies

 Starting a new business

 Competitive response
7

Today’s Objective
Strategy Case Operations Case
 Entering a new market  Increasing sales
 Industry Analysis  Reducing costs
 Mergers and Acquisitions  Improving the bottom line
 Developing a new product
 Turnarounds
 Pricing Strategies
 Growth Strategies

 Starting a new business

 Competitive response
Important: Lay out your structure
Use trees to create a roadmap and follow it
Pause, think, use the MECE format

MECE - Mutually Exclusive, Collectively Exhaustive

YouTube Link
Important: Lay out your structure
Use trees to create a roadmap and follow it
Pause, think, use the MECE format

MECE - Mutually Exclusive, Collectively Exhaustive

Mutually Exclusive
 Information grouped into categories should not overlap
 Not considered twice
Collectively Exhaustive
 All categories cover all possible options
 Comprehensive collection without alternatives
Eliminates confusion and ensures thoroughness

Profitability framework from last session is a good example of a MECE structure

 Profitability Framework
Profitability Framework: Economy(Profit=Revenue-Cost)Market
Rev/uni
t
External Factors:
Revenu
Revenu  Economy
ee
#
# Units
Units  Market
sold
sold
Fixed
Fixed Internal Factors
Profits
Profits Cost
Cost  Revenue
Cost/uni
Cost/uni
t
 Costs
Cost Variable
Cost
Cost
MECE - Captures
Units
Units
sold
sold everything that has to
do with revenue
MECE or Not MECE
Grouping customers by their hobbies
 Not MECE. A customer can have more that one hobby
Grouping customers by age
 MECE. A person can only fall into one age group (ME part) & Age grouping covers
the entire population (CE part)
Grouping customers by nationality
 Not MECE. An individual can have two nationalities
Lists of entrance fees? Regular entry: $10
Kids and Teens entry: $5
Seniors & Disabled entry: Free entrance
 Not MECE. E.g disabled kids

Use MECE to get the high-level factors affecting the problem

[Link]
Practice MECE
1. A client asks…should I enter the XYZ market?
 Two possible factors: Financial & Non-financial

2. Should a client attend Harvard or Stanford Business school

 List some MECE factors?

Some possible answers will be shown in the next sessions

 Concluding the Case
 Recap the objective
 Make the recommendation directly
 Use data to explain briefly why the recommendation was made
 Say how the recommendation will be carried out
› Give a timeline, if possible
 State any secondary implication
 Give any additional insight or future anticipated work

Avoid the use of phrases like ‘I think”, “I feel”, “it is my impression”

use
“It is more likely”, “There is a possibility”, There are higher chances…”

Let’s Try A Simple Example
How was your vacation?
 My vacation was lousy for three reasons:
 I missed the plane and thus the cruise ship.
 I broke my leg and was confined to a wheelchair.
 I paid $3,000 in medical bills for the privilege of watching others have
fun.
 Those are the three reasons why my vacation was lousy.
Example
Assuming you just went through the following case:
A bakery wants to increase profits and asked you how they should. The
bakery primarily caters to wedding ceremonies. After analyzing the
case you found that there is a huge demand for custom birthday cakes
for children. With some retrofitting and initial upfront investment, it is
possible for them to grow their profits from $1 million to $1.5 million.
You have decided this investment is worth it and now you have to pitch
it to the CEO!
Concluding the Case – This is just one possible solution
 Recap the objective
› XYZ baker wants to increase profits
 Make the recommendation directly
› Our analysis shows they can achieve a 50% increase in their profits long term by extending
their niche into the making of birthday cakes, specifically for kids
 Explain briefly why the recommendation was made with data
› Birthday celebrations are projected to increase at a rate of 20% in the next 10 years and the
market is currently under-saturated.
 How
› A successful advertising campaign is necessary to capture this market. Once done, XYZ
baker is projected to grow by 2% annually
 State any secondary implication/ Additional insight
› The cost of shutting down the bakery for reconstruction has not been considered in this
analysis. However it is not likely to eat deep into the projected profits or result in a loss of
customers.

See more her

BREAK INTO PAIRS
P I C K W H O S TA R T S F I R S T

Interviewer – led
Practice Cases

1. Airport Taxi -- McKinsey Case

2. Strawberry Jam – Ross Casebook 2010 (pg 32)

3. BONUS: Japanese Electronics Manufactures

Link To Cases
[Link]
Interviewer: Read the question
 Listen to the question
 Take notes
 Summarize the question

 Make sure it is not verbatim

 It is spoken clearly
 It captures all the essential information

 Ask for clarification

 Clarification if asked should be meaningful
Airport Taxi: McKinsey
Comments:
 Inferring that this is a profitability scenario is not as straightforward

 Question 1 is an indication for you to walk through your framework. Note

again costs, revenue and volumes are all considered in the response.
Observe how the answers were tailored to the question!
› Tolls, fuel efficiency, heavy traffic all indicate cost
› Flag drop charge and tips highlight the revenue
› Distance, time of day specify volume

BE CREATIVE and BRAINSTORM!

Airport Taxi: McKinsey
Additional comments
 The MECE components can be applied to every question

 Note the inference in the answer for question 4. The solution didn’t stop
at identifying the profits were the same. An extra step was taken to make
a recommendation/ inference.

 The conclusion is very good. Fear not if you didn’t come to this same
conclusion. This is why we practice .
Japanese Electronics Manufacturer: Case In Point
Comments:
 Use of percentages: ….”2 percent return where the figures for 2005
indicate a 1 percent return”

 Systematic walk through a profitability framework using questions

› Revenue streams, percentage each stream contributes, trend in
streams, economic factors, volume, competition, costs: fixed and
variable are all explored deliberately

 Creativity in thought process and ideas with a strong conclusion