FOREWORD
As the Councilorof the Science and Technology Council, I am thrilled to introduce the exceptional casebook
crafted by The Business Club at IIT (BHU) Varanasi. Over the years, our institution has remained committed to
fostering academic excellence and innovation, providing a dynamic environment that nurtures talent.
The Science and Technology Council stands as a beacon of guidance and support for students passionate about
leveraging science and technology for meaningful change. This casebook, a commendable initiative by The
Business Club, perfectly aligns with our mission to equip students with the skills needed to excel in the ever-
evolving realms of business, technology, and consulting. The inclusion of frameworks, industry insights, and
practical guidance underscores the commitment to providing students with a comprehensive toolkit for success.
I extend my heartfelt congratulations to The Business Club for their unwavering commitment to education and
innovation. This casebook not only serves as a valuable resource but also reflects the dedication and potential
that thrives within our institution.
I encourage all students to maximize the benefits of this resource, sharpen their analytical skills, and strive for
excellence in their chosen paths. Together, we can continue to elevate our institution and empower our students
in the world of science, technology, and business."
Prof.RajeshKumarUpadhyay
TheCouncilor,ScienceandTechnologyCouncil
04
6.
FOREWORD
A couple ofyears back, a step was taken by The Business Club to help peers and juniors who sat for placements
and internships. The Club received lots of appreciation for curating preparation content for Analyst, Consulting,
Quant, and Product Management roles and compiling it into a book, which turned out to be one of the most
successful initiatives of the club: “Casebook 1.0”. The “1.0” in the name was a deliberate showcase of
commitment and confidence by the Club to produce more editions of the Casebook. “Casebook 4.0” is the next
step in that direction.
This book, like its previous editions, is an affirmation of the vision of the club to aid the students who want to
test their business acumen by venturing into business-related fields.
The past few years’ placement and internship data and the students' achievements at various levels point out
the trend of rising analytics, consulting, and product management opportunities (culture) at IIT(BHU). Matching
the “demand”, Casebook 4.0 “supply” not just more, but better cases, interview transcripts, and techniques to
help people learn the skill of problem structuring and solving and become more confident with their presentation
and articulation process.
Going through the content, I can only imagine the concerted effort of the authors and editors in compiling
interviews and transforming them into a book. I want to thank them for adhering to the Club’s principles and
vision in helping their counterparts prepare for, but not limited to, their placements. I would also like to
acknowledge the significant contribution of all the former and current secretaries and club members in taking
this instrumental initiative for the college.
SanchitGupta
FormerSecretary
TheBusinessClub,IIT(BHU)Varanasi
05
7.
ABOUT BUSINESS CLUBIIT(BHU)
Business Club, IIT(BHU) is the student-run club of Indian Institute of Technology (Banaras Hindu University),
Varanasi where the confluence of finance, economics, consulting, analytics, and product management
transpires. The club doesn’t just limit itself to these few verticals, but rather focuses more on the ever-flowing
culture of constant learning and curiosity to learn even more.
Having begun a few years with a team of a handful members, the club has since moved forward by leaps and
bounds to a size of over 150+ core members and an enthused learning community of 400+ members. The club
launched its flagship publication, The Casebook, 2 years ago in 2020, and it has since become the most widely-
followed and preferred placement preparation material in IIT (BHU).
Being from a technical institute, the club’s members never fail to bring a unique perspective from a technological
standpoint that can often be the difference-maker in problem solving. Thus, with the same sheer confidence in
our mind, we dedicate ourselves to building a casebook that is fresh with tools to build in-demand hard and soft
skills, with innovation at the top of our minds, every year.
The Business Club
IIT (BHU) Varanasi
The Business Club, IIT(BHU) Varanasi aims to cultivate a culture of growth and learning among members. It plays
a central role in honing vital skills such as analytical thinking, problem-solving, and communication, making it a
valuable asset to its participants. Even though it is operating within a technical institute, we cover various fields
like finance, economics, product management, consulting, data analytics, and marketing.
In 2020, the club introduced "The Casebook," a crucial resource that significantly contributes to the Institute's
Business culture. It acts as a knowledge repository, offering practical cases and solutions to apply problem
solving skills in real-world scenarios.
The club provides a supportive and learning-focused atmosphere, with many members securing valuable
internships and Pre-Placement Offers (PPOs) from elite organizations across the world. The fact that we function
within a technical institute, helps us explore the intersection of business and technology and offer a unique
perspective that aids in real-world problem-solving.
Additionally, the club ensures its publication remains innovative and current, releasing a new edition annually.
This commitment to staying up-to-date sets the club apart and continues to benefit its members and the
broader student community.
The Business Club
IIT (BHU) Varanasi
06
8.
Rohil Shah, Consultant| Kearney
Manish Rai, Business Analyst | Navi
ALUMNI TESTIMONIALS
The Casebook was a big checkpoint to understand that I'm able to solve not just consulting
cases but product management cases as well to hone my structured problem solving. At the
end of the day no matter what problem you're solving, there is a process to it and Casebook
covers a huge spectrum of cases to apply that process in various shapes and forms. It helps
you ask the most basic first principle questions in every situation so as to get a thorough
understanding of the problem and the roadmap to solve it. All in all, Casebook was important
in building a thought process which impacts a lot of things and I'd recommend folks
to go through it.
Anesh Srivastav, Co Founder| Stimuler
The IIT BHU casebook is more than just a collection of cases; it is a go-to guide for
structured and critical thinking. Regardless of your field, I suggest that everyone try it out to
improve their problem-solving skills; the insights you'll gain are invaluable. Personally, the
casebook's lessons were instrumental in helping me shape my professional life and have
proven to be an asset for many of my batchmates as well.
"Regardless of the role or company, interviewers demand three key skills: problem-solving,
structured thinking, and confident communication. The IIT BHU casebook is an invaluable
resource, compiling the latest business cases and culture-fit questions to prepare individuals
for interviews. The diversity of cases and the comprehensive analysis provided have been
instrumental in my placement-prep journey. Having been part of the previous casebook
versions, I can assure you that version 4.0 will be even better. Best of luck during the
placement season!
”
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07
9.
Manav Jain, Founder’sOffice | Zupee
ALUMNI TESTIMONIALS
The IIT(BHU) Casebook has a long legacy of boosting candidates' placement preparation and
giving them the confidence to ace every interview on the D-Day. A primer for every case type
and an exhaustive question bank, along with hints and suggestions, make the Casebook the
perfect guide for any student looking to break into a consulting, product, or analyst role. The
Casebook utilizes a conversational format, and hence, proves most effective when cases are
practiced with a partner. I wish all readers the best for their preparation. Happy solving!
The casebook was my go to repos for building my case prep. The diversity in the type of
cases and structured approach helped me a lot. While there are other resources for case prep
like IIM A Casebook, The PM Interview, Advait Sridhar, etc, I had been recommended to go
through IIT BHU's casebook by BITS alumni as well.
Sanchit Gupta, S.D.E. | Wells Fargo
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The IIT(BHU) Casebook is a compilation of previous year questions, experiences, do's, and
don'ts that people who have been through the process have contributed to. I believe that
this adds to the preparation of anybody preparing for these roles in their placement
journey because these insights come from genuine experiences and help you present
yourselves confidently in front of the interviewer. I wish all the best to anybody who sits
for their interview. I hope this casebook helps you for it
Ishita Sharma, Associate Consultant I Mastercard
08
10.
WHAT’S NEW ANDHOW TO USE THIS BOOK?
“Great things are done by a series of small things brought together.” - Vincent Van Gough
Structured thinking and clarity of thought remain highly valued qualities not only in consulting interviews but also in roles like analytics,
finance, and product management. Why so? Because these attributes demonstrate your ability to effectively deconstruct problems and
pinpoint their underlying causes, helping you in proposing empathetic and actionable solutions!
Articulating the problem effectively, establishing a clear framework, posing pertinent questions, and subsequently suggesting the most
suitable solutions is a tried-and-true formula for success in case interviews. Although seasoned professionals make it seem effortless,
it's a skill that requires dedicated practice and long hours of effort.
The Business Club at IIT (BHU) Varanasi has assembled this Casebook with the specific goal in mind: to provide you with a seamless
learning experience that caters to all your needs in one place, offering a comprehensive resource to refine your approach to solving
cases and apply them directly to specially curated cases for this purpose.
While case interviews from a wide range of profiles and companies are at the core of this document, we've gone the extra mile to assist
learners in their preparation by providing frameworks as a starting point, industry insights on current trends to complement the lessons
from each case. Additionally, there are knowledge sections and introductory materials on finance and economics to lay the foundation
for your business acumen, statistics to refresh your mathematical skills, datasheets to keep you up to date.
We strongly recommend practicing cases in groups of 2-4 individuals multiple times each week, taking on the roles of the interviewee
and the interviewer alternatively to gain a better understanding of the dynamics of a case interview from both sides of the table. Solving
the case should be done individually, and the approach taken by the interviewee, as well as the key takeaways, should be analyzed for
learning purposes. Wherever possible, we have included alternative approaches and case facts to ensure a broader range of learning.
Deck making also plays a crucial part in case solving, and for the same we have added a deck breakdown of a deck selected in Flipkart
APM.
Beyond just interview preparation, we hope that this Casebook helps you develop an analytical mindset and a structured approach to
problem-solving in general. Just as much as it holds true for solving cases, the journey of learning is often more significant than the end
result.
We hope that this book assists you in achieving your most sought-after aspirations! Happy Case Solving!
The Business Club
IIT (BHU) Varanasi
09
Consulting involves providingadvisory services to organizations to improve their performance or to assist
them in dealing with business problems that may require special expertise. It provides a third
party(outsider) perspective to business problems.You’re gonna love consulting if you love brainstorming &
solving real life business problems
The problem solving process is a series of analytics & structured approaches that involves primary and
secondary research combined with business acumen & creative thinking.
In short, it helps companies, CXOs & other leaders with solving relevant business problems.
Strategy Consulting : Services such as drafting & implementing business strategies, mergers and
acquisitions, client strategy, organizational strategies, etc come under this part.
Management Consulting or Business Consulting : Involves advice to management towards
improving business strategies and operational processes.
Operations Consulting : Includes improvement in the operations level(supply chain, outsourcing,
etc) & performance in organizations.
Financial Advisory : The segment covers services such as transaction services, risk
management, actuarial valuation, tax advice, audits etc.
Human Resources : Includes all advice and implementation activities related to human capital
management and the HR departments.
IT Consulting : A segment that advises companies on how to best use their IT infrastructure &
suggests improvements.
CONSULTING PRIMER
What is Consulting?
Key Working Areas
11
13.
Hiring Process
Qualities Theyare Looking For:
This involves three main parts:
Problem Solving Skills Soft Skills Leadership & X-factor
Analytical & problem solving
abilities, business acumen &
creative thinking. Usually tested in
guesstimates and/or case
questions.
Communication & Presentation
skills, ability to structure, teamwork
etc. Usually tested in HRQs & case
interviews.
Track record, extraordinary projects
or achievements in CV. All of these
skills can be highlighted through
projects and/or contribution in
events.
CONSULTING PRIMER
Basic Filter: CV shortlistings,
cover letters, HRQs, etc
Final Hiring call!
Interviews: Few (generally 2-3)
case interviews
12
14.
Business Analyst
Pre-MBA
Position
Responsibilities:
Research, data
collection& its
analysis,
documentation
& deck making,
financial models
too(sometimes)
Tenure(Usual) -
2 years
Post-MBA
Position
Responsibilities:
portion of
consulting
projects to work
on, data
gathering(a bit),
managing few
senior clients,
leading
analysts,
problem
solving.
Tenure: 2.5-4
years
Project
Managers
Responsibilities:
Project leads,
coordinate
team’s activities,
relationship
management,
partner
meetings.
Tenure: 2-3
years
Associate
Partner
Responsibilities:
Client meetings,
selling firm’s
expertise,
development of
staffs, oversight
on projects,
business
development &
frequent
travels.
Tenure: 3-4
years
Position at the
absolute top of
the hierarch
Responsibilities:
client
relationship
management,
business
growth,
inspiring
initiatives, firm’s
policy.
Tenure: NA
Associate
Consultant/
Consultant
Engagement
Manager
Principal Partner
CONSULTING PRIMER
13
15.
Problem Solving Structure(Example)
Define & Identify:
Project - Increase profits of a FMCG company.
CONSULTING PRIMER
Increase profits by 15% by cutting costs & discovering new markets to increase sales.
Proper understanding of the context & business is crucial.*
Analysis:
Use critical data of the transportation & inventory management operations to identify potential flaws.
Analyze market data for different geographies and selling channels & identify opportunities for the client.
Understand the competitive landscape in the new markets & selling channels.
Implementation:
Implementation of the recommended solutions. This involves a great deal of coordination between various stakeholders
involved.
Monitoring implementation & re-evaluation along the way is equally important to ensure success.
Hypothesize:
Better managed supply chain will reduce costs by 6-8%.
Expansion to X market & y selling channel will help increase the sales.
Decision Making:
Closing of some inefficient inventories & channels to cut costs, supply of goods based on estimated demand (data analysis)
Setting up a new selling channel for expanding presence in identified geographies.
Formulation of detailed sales & marketing plan.
14
Case Questions -
Ina case interview, a candidate is usually tested on these two parameters:
Personality - Strength & weaknesses and if the candidate is suitable for the job(through HRQs).
Candidate’s problem-solving ability & analytical skills(through case questions).
Aim :
Case Questions are asked to gauge the candidate’s analytical skills, creative thinking, problem-
solving ability and general awareness of their surroundings. Apart from these, the candidate’s soft
skills are also tested.
Approach :
The standard approach to solving a case interview is to first understand the problem by asking some
basic contextual questions, then lay out a roadmap(or structure), walk the interviewer through each
step and then conclude by presenting logical solutions & suggestions.
The main aim is to judge the candidate’s personality, strengths and weaknesses & to understand
whether he/she would be a good fit for the role & the firm using behavioral and past work
experience-related questions.
Clarify Framework & Structure Analyze Conclude
HR Questions
STUCTURE OF A CONSULTING CASE INTERVIEW
16
18.
A clear understandingof the problem statement is absolutely essential. Candidates can’t afford to commit a mistake here.
Ask clarifying & contextual questions to have a better understanding. Asking good clarifying questions at first would help
you see the problem from a much better perspective & will also earn you brownie points.
Interviewers won’t give away all information at once. It’s about a candidate’s skills to squeeze out all the necessary
information.
Candidates must communicate & validate all the assumptions taken.
This involves synthesizing all the findings, squeezing out more info and making some sense out of it,
Candidates should try to build a logic/theory consisting of various possible outcomes/reasonings, get their hypothesis
validated and keep narrowing down the outcomes.
Candidates should make sure to walk the interview through each step and ask well-directed questions to gather more info
& to move in the right direction.
Structuring involves putting all the data gathered together & make something out of it.
Laying out an analysis framework helps the candidate be organized & at the same time, it provides a visual roadmap for
both the interviewer and interviewee.
Candidates should understand that there is no one perfect framework. Rather the framework they are using should be
MECE; also it should be thorough but not wasteful.
This is be a concise yet very crucial stage. Candidates should come up with logical suggestions for an implementation plan
for the client & should also cite the reasons which led to this conclusion.
One should also highlight any one action that the client should take to mitigate major concerns and should also mention
the factors that the client should be aware of that may impact the recommendations.
Quickly performing a sanity check, i.e. roughly evaluating the proposed solution(quantitatively), might earn you brownie
points.
Understanding the context & problem statement
Analysis of the case
Framework & Structure
Conclude
STUCTURE OF A CONSULTING CASE INTERVIEW
17
19.
KNOW YOURSELF
Develop thatmuscle to walk through the details of your resume and fill in the details.
You will be asked about a lot of things on the resume. Be prepared to answer those. Why did you make the moves you
have? What have been the most significant decisions you have made? Where were the challenges and where were the
triumphs?
Create a perfect story such that being in that firm seems like the next logical step in you career.
Give them something to remember you by, some amazing life story, a skill that separates you from the rest, an unique talent
that you might have.
Learn to mitigate weaknesses in your skills or background., also learn the self-insight that is required to answer your
interviewer’s questions honestly and persuasively.
What does the firm pride itself on? Try to show those qualities in yourself .For e.g. if a firm takes pride in doing ESG
(Environmental, Social and Governance) Consulting, include some ESG projects in your resume and mention them in the
interviews
Research about the company and the interviewer. For example, if the interviewer has been recently promoted, ask the
interviewer about their role and responsibilities, how the roles and responsibilities have changed since they got promoted
or if the company has just merged with any other company ask them how the company policies have changed internally.
If the interviewer specializes in a particular sector, talk about your experience in that sector and take their opinions on your
projects in that sector and certain disruptions or trends that can symbolize the sector recently. For example, if the
interviewer has a lot of interest in the e-commerce industry, mention your take on the trends in the industry like
horizontalization, verticalization or cross sales and also take their opinions on the same
Know the basics of the company like where they are located and how they are structured. If unclear, ask do show some
initial understanding though
Knowing the firm will help you a lot in articulating the Why questions, “why do you want to work in our firm”, “why do you
think you are a good fit for our company”
Highlight the values of the firm, show them you are a perfect fit for the firm. If it is a firm that values an entrepreneurial
mindset, highlight that you have tinkered with the ideas, and have a keen interest in startup space.
KNOW THE FIRM
HR QUESTIONS
18
HR Questions
You willbe asked “Do you have any questions for us?”.
Be ready to ask two to three intelligent questions that shows your interest and preparation and provide you with any
information you think you need.
Don't ask something that is too obvious in the brochure or web page
State that you look forward to a follow-up interview or to receiving an offer from the firm; Ask for the job.
Ask when you can expect a phone call with the results of the interview. This way you will be able to ask for a feedback
about your performance in the interview
Never ask, ”How did I do?” directly.
Use this opportunity to showcase your knowledge of the firm by mentioning questions pertaining to a recent merger that
might have taken place, clarify the roles and responsibilities associated with the role, etc.
CLOSING THE INTERVIEW
This, most probably, will be the first question they ask you and also the one which answers what they want to know about
you the most. So, it is of great importance that you put forward a coherent, compelling, and compact story for yourself
through this.
Stop from rambling about unnecessary points and talk about stuff that moves the needle. Don’t stretch the answer by
including irrelevant things.
Describe your life’s wants, goals and your resulting accomplishments. Tell your story in such a way that it seems that you
are the one who led your life
Give the interviewer something to remember you by, some unique thing about you, some thing that distinguishes you from
all the other interviewees.
Don’t just show the smart side of yours also show them the creative, well thought and well mannered side of yourself.
TELL ME ABOUT YOURSELF
HR QUESTIONS
20
22.
HR Questions
Be preparedfor competency based questions around work-ethic, leadership, accountability, ownership, etc. Examples of
such questions are enumerated below:
“Recount an incident” type questions like “Recount an incident that shows you are a team player” , “Recount an incident
which shows that you are a good leader” , etc.
Have some stories ready that can fit in more than one such incident , for e.g. there will be some stories that potray you
both as a good leader and a good team player.
COMPETENCY BASED QUESTIONS
Clearly identify your greatest strengths
State the strengths that have direct relevance in you being a great consultant.
Identify a weakness that can be perceived as a strength but don't be too obvious saying things like, “I tend to work too
hard”
State a weakness that you can fix or a weakness that won’t directly affect you in the job that you are applying for. Don't
say you don’t like long hours, traveling or working with people.
Whenever you mention a strength, try to back it up with an anecdote from your life exhibiting that particular strength.
Whenever you mention a weakness, mention that you identified it as a pressing problem and you are working on it. For
example, “I recognized that public speaking was somewhere where I had room for improvement and following that
realization, I’ve enrolled for certain courses and have attended multiple workshops.
Don’t cough up a huge list of weaknesses.
STRENGTHS AND WEAKNESSES
HR QUESTIONS
21
ASKING PRELIMINARY QUESTIONS
Preliminaryquestions carry a two-fold purpose
Understanding the problem at-hand better
Seeking more pieces of information regarding the case
They help a candidate in identifying the scope of the problem and the solution expected from them, as well as
gauging the situation of the client in-depth It’s recommended that the candidate tries to cover the following two
buckets of preliminary questions while seeking more information:-
Defining the objective : Problem statements provided
during the case often leave the candidate oblivious to a
vital piece of information
For example, consider the following case, “Your client is a
daily-use electronics manufacturer which has been facing
stagnation in growth of sales. Identify why”
A candidate can uncover the treasures of hidden
information by iterating over the case statement and
identifying certain keywords.
What are daily-use electronics? What does the company
manufacture within this?
Who is the company selling to? How do we define “growth”
in sales?
What do we mean by stagnation?
Since when is this happening?
Why is it a problem if the company is facing stagnation in
growth of sales?
Another way to better understand the problem is to use the
5W1H framework (What, Why, Where, When, Who, How) to
clearly define all the key aspects. Most importantly, fully
clarify any new piece of information that you come across.
Analyzing the company : Now that a thorough
understanding of the problem has been established, it’s
important to uncover the other pieces of information critical
to the case. These can typically be categorized into the
following four types, depending on the client :
Product : The candidate should know what exactly the
company sells. What’s the product mix like? What
problem is the product trying to solve?
Value Chain : How is the product/service being
developed? What are the various steps involved? Who
are the stakeholders? Who are the customers?
Industry : What’s the industry landscape like, is it a
monopoly or a perfect competition? If competition
exists, then how differentiated are their products/
services?
Geography : Understand where the company is located,
where it manufactures its products, where the
distributors and customers are located, etc.
23
25.
While conveying anoverall strategy, it is generally utile to follow the breadth then depth approach. In this approach, you begin by detailing the
breadth of the structure you'll be following to solve the case and then, after clarification from the interviewer you focus on an individual
subsection of all the possible verticals.
In a nutshell, we provide the interviewer a bird's eye view of the approach first and follow that up by looking at the range of possible solutions in a
specific bucket.
Breadth then depth :
EXAMPLE-
BREADTH THE DEPTH
After the preliminary questions have been answered, a scope has been
agreed upon. Use the breadth then depth strategy mentioned below to
convey the same. Once you relay the strategy to the interviewer, they can
correct you if need be and you’ll be on the same page.
For example, if you have to go about assessing the possibility of setting
up a pet store in Delhi. How you can go about detailing the overall
strategy, you can begin by saying that my objective is to assess whether
the company should open a pet store or not. To assess this, I'll first look at
the financial feasibility of such a venture and then suggest the GTM.
Then, you can individually highlight what you'll do for each specific
bucket.
For the sub-sections, ensure you highlight what you'll be covering.
So, it would look something like this:
In assessing the financial feasibility, I shall estimate the profits, for
which I shall look at revenue and costs. In revenue, I shall look at the
market size, market share, and product lines. In terms of costs, I'll
look at fixed and variable costs.
Discussing your mini-strategies and takeaways with the interviewer
ensures that you proceed in the right direction, and keeps the
interviewer engaged.
Drafting an overall strategy and mini-strategies
Mini-strategies
Overall strategy
Assume that a major airline's revenue decline, and ithe major sources of revenue are ticket sales and in-flight services.
So you can convey the structure by saying that on the revenue side, I'll be looking at ticket sales and in-flight services, with ticket sales looking at
volume, type of ticket, frequency, and % occupancy, and in-flight services looking at meal categories, airport lounge services, and so on. In this
manner, you can detail the approach by first focusing on the breadth or different categories of solutions, and then on the depth or individual
factors of a particular bucket.
24
26.
What?
EXAMPLES
Why?
The 80/20 rulestates that 80% of outcomes of a given situation
result from 20% of the inputs. In other words, we can say that
weight isn’t uniformly distributed all across the board, and there are
some aspects of a problem that carry more weight than the others.
Using the 80/20 rule becomes a crucial aspect of approaching a
case in the consulting world because of limited resources (cost and
time) and scarce human capital. Thus, it is a good rule of thumb to
integrate the 80/20 rule into your toolkit for dissecting problems.
Profits (50% )
Flipkart
Cost
Cost
SG & A
(50%)
White Goods
(50%)
Employees,
Wages &
Schemes
(20%)
Electronics
(30%)
Others
(30%)
Others
(20%)
Revenue Revenue
(30%)
We will be considering SG & A for our analysis as it has
50% to the overall cost.
We will be considering SG & A for our analysis as it has
50% to the overall cost.
Even though Electronics has only 30% contribution to the
revenue but as the sales have gone down by 80% we will
focus on this segment.
Let’s say company X has seen a decline in profits by 50%
over the past year. You are to identify why and suggest
recommendations. After your clarifying questions, you
understand that SG&A (Selling, General, and Administrative)
costs comprise 50% of costs incurred by the company and
employee wages & compensation schemes comprise 20%
of the costs.
But, trends matter the most when it comes to problem-
solving. For instance, let’s say Flipkart has undergone a
decrease in revenue by 30%, and 50% of the revenue comes
from white goods (large household appliances like
microwave ovens, washing machines, etc), but after
clarification, you understand that 30% of Flipkart’s revenue
comes from electronics and the sales of electronics have
gone down by 80%, whereas sales of white good appliances
have plummeted by 20%.
PARETO PRINCIPLE OR 80/20 RULE
25
27.
MECE and MATHEMATICALFORMULATION
Often in different case themes, we have to drive the interview in a specific way to get to the root cause or the localised issue at hand. Various tools
can be used to this end that enable us to get to the problem in a structured and reiterative manner.
The MECE principle suggests that in order to break any problem, it should split
into smaller buckets that are
1. Mutually Exclusive: All subproblems fit into different categories, i.e. they
should be independent of each other.
2. Collectively Exhaustive: All subproblems put together should completely
define the scope of the original problem.
MECE (Mutually Exclusive and Collectively Exhaustive) Mathematical Formulation
Cost of travelling from Delhi to Kolkata
Cost of one liter petrol
(Rs./lt) * *
Mileage
(lt/km)
Distance
(km)
Consider the case of estimating the number of cycles in India. The
population of India, in this case, can be split on the basis of various age
segments such as 0-18, 19-45, 45-60, 60+ to simplify the challenge of
figuring out the proportion of the population that owns cycles.
Similarly, MECE splits can be drawn on the basis of gender, rural/urban,
product segments, etc. depending on the case at hand.
MECE
0-18 19-45
60+
46-60
0-20
18-45
40-60
60+
Not MECE
The process of mathematically breaking down various case-
affecting factors to quantitatively gauge them and drill down to the
root cause of the problem in a highly precise manner.
So is possible due to the MECE nature of mathematically breaking
down things into formulae, where each individual component can be
assessed independently and can hence assist the interviewee in
going a level deeper in an efficient manner.
If one were to estimate the cost of travelling from Delhi to Kolkata,
they could break the cost into [Cost of one liter petrol (Rs./lt) *
Mileage (lt/km) * Distance (km)]. Further, each of the three
components can be assessed individually to analyze which factor is
causing change in costs.
EXAMPLE
EXAMPLE
Why MECE?
What is MECE?
Being MECE in their approach helps candidates in breaking complicated
problems into simple chunks assisting them in identifying the root cause
without the possibility of any duplication.
26
28.
This is somethingthat will separate you
from the bunch. While suggesting
solutions, ALWAYS prioritize.
Communicate to the interviewer that we
should act on this first, followed by this
and then the next thing
Categorization on the basis of time period: Prioritization of proposed suggestions:
Synthesis
Instead of just plainly listing out what
can be done, it's important to signify
the time frame and when it can be
done.
For example it would look something
like this, I think we can do X in the short
term and then consider Y in the long
term in order to address the situation
HOW TO SYNTHESIZE A CASE ?
While summarizing the case be extremely crisp about the details of the case and mention them in a top-down
format without going into the thick of it
Remember two things while suggesting actionable recommendations for the case.
So, you've done everything right up until now. Asked the right preliminary questions, laid out a good structure. But,
a strong synthesis serves as a make or break. So, let's look at how to properly synthesize the case. Here are two
things that you should adhere too.
27
29.
PROBLEM ISOLATION TOOLS
Benchmarkingwith competitors comes in extremely handy and is a
very useful tool in your arsenal. It ensures that you don’t fall behind or
fall short in terms of things like supply chain, tech stack, inventory
management, direct, and indirect costs and other facets.
Competitive Benchmarking Company-specific or Industry-Wide Segmentation
The Company-specific or Industry-wide segmentation essentially
provides direction to the interviewee to then proceed with the case.
EXAMPLE
Carrying out a company-specific or industry-wide segmentation,
enables us to understand the market well. It expedites the case-solving
process and improves drill speed in arriving to the solution.
Revenue = (#Units) * (Product Mix) * (Price/Unit)
Now, through a company-specific and industry-wide segmentation, you
get to know that it is a product mix issue with one of our product lines
shutting down and that is an industry wide issue owing to a legislative
amendment passed by the constitution that prohibits the sale of that
product line.
Revenue
# Units Price/unit
Product mix
In the above example, it gave us the conclusion that all companies had
to discontinue that product line thereby the interviewee can analyse
that and prioritise that issue in the remainder of the case.
In this given, case, it was a product
mix issue as one product line had to
be discontinued following an
amendment passed in the assembly
An example of the competitive benchmarking of neckbands in terms
of sourcing, supply chain, market share (Volume and GMV) can be
carried out between JBL and boAt to understand the competitive
landscape.
Similar competitive benchmarking can be carried out for Average order
value (AOV), frequency and volume of sales, along with gross margins
and product cost build-ups.
EXAMPLE
Brand Wearables
(Market Share)
Hearables
(Market Share)
34.3%
11.5%
8.7%
42.8%
8%
4.5%
InboundLogistics
Top
Players Operations Outboundlogistics
Benchmarking
Storage expense
Benchmarking
Inventory
Management
infrastructure and
expenses
Comparing
margins across
raw materials in
sourcing, etc.
Comparing
logistics partners
across volume,
type, and the
extent to which
they push
individual brands
28
30.
Whatisbusinessacumen?
Howwillithelpyou?
Howtobuildanacumen?
The ability tounderstand how businesses operate, their problems and the WHY behind the organization.
An interviewee needs to understand the business, its customers, its model, among many other things, to be
able to appropriately structure their approach and provide sound recommendations.
Step1:Pick any industry that you like. It could be something that excites you, you wish to understand better, or
you’ve worked on in the past. In the same industry, pick 5-6 companies (preferably the biggest in the industry
for beginners)
Step2 : Research on the 5-6 companies you’ve picked. This is to understand their businesses better. It can be
done by tracking their stock movement and analyzing the related news pieces.
Carry this on for 3-4 months. While it might seem mundane at first, soon you’ll start understanding the
functioning of the industry and the standard operating model.
Step3 : It’s time to apply your knowledge. There are two ways to do this. Take up the aforementioned Step 1
and 2 with your friends and have regular group discussions on the same. Case competitions can also be a great
way to upskill yourself further in the relevant industries.
Step4 : Make projects and do internships. Experiential learning will overshadow any theoretical learning that
you can take up.
BUILDINGABUSINESSACUMEN
29
Guesstimation is theestimation of a ‘number’ or a ‘market size ’ of a certain product using very limited information. A guesstimate
question aims to test a candidate’s logical thinking and reasoning acumen, basically qualitative and quantitative skills. Apart from
problem-solving, communication and presentation skills are also very crucial while solving a guesstimate.
Guesstimate is not about finding the right and precise answer but more about the approach used to find the answer. The goal is to make
reasonable & logical assumptions and even if you are slightly off, that is perfectly fine.
The following methodology should be used while solving a guesstimate:
Handy Tips:
Use well-rounded numbers that are easy to work with.
Remember and use standard divisions based on demographics(income, gender, geography, etc).
Avoid guessing any data, if you’re not sure, just ask it. At least confirm it.
Make it engaging, talk through the steps, and convey all the assumptions and the overall approach. No awkward silences!
Never start solving without discussing your approach.
Keep your worksheet neat & organized and don’t use too much text.
Always ask to perform a sanity check.
CLARIFYING
QUESTIONS
Analyze &
Structure
Visual MECE
Structure Conclude
Ask a few preliminary
questions to understand the
problem. Look at the
problem from a bigger
perspective & take some
time to gather your
thoughts.
Try to relate the info provided
with day-to-day knowledge,
make realistic assumptions and
try to prepare a structured
approach by breaking down the
problem into workable
segments/demographics.
Use tree diagrams & visuals
while segmentation and
make sure to check if your
approach & segmentation is
MECE & discuss that with
your interviewer.
Mentally double-check the
‘guesstimated values’ that
you will apply to the pieces
of the calculation you
developed. Ask to perform a
sanity check (that would get
you brownie points)
GUESSTIMATE
31
33.
Top Down Approach
Keepin mind the following segments:
Demographics(Age, income, gender, rural-urban, etc)
Weekdays vs Weekends, Peak vs Non-peak
Occupancy rate
Start with detailed products/services information
Take into account the volumes & prices
Then scale up to say, revenue.
Replacement Frequency
Demand-side Approach
Market sizing using the demand size approach involves the
estimation of end consumers to whom products or services
will be sold & the quantity consumed by them.
Variables to be considered:
Demographics-based segmentation
Frequency of replacement
Seasonality
Start with the largest universe possible, apply required conditions
& filters and break it down into workable segments/
demographics.
Supply Approach
The supply-side approach works better in clearly outlined
environments. When the target consumer base is highly
fragmented or the numbers are non-computable, then the
supply-side approach is considered.
The supply-side approach involves the following methodology:
Looking at the market share & volume sales of competitors
Sales growth trend & level of market saturation
Retailer & Distributor segmentation
Bottom Up Approach
Start with some small figures, focus on micro attributes, find
replicable blocks and then move towards the general and scale
up.
For Example:
GUESSTIMATE
32
34.
Bottleneck Approach (Unconventional)
EXAMPLES:
Usedby targetting the most fundamental thing in the operational flow of information, flow and goods, controlling/restricting the demand
& then forming a structure on it.
It is an unconventional approach yet a very effective one.
The methodology:
Find the step in the flow which is getting self-constrained (the bottleneck)
Segmentation (Peak vs Non-Peak, demographics) and Structur
Assumptions & Calculations
Seating Capacity in a McDonald’s outlet is a constraint (bottleneck) for them & can’t be helped
The maximum no. of Pani-puris a seller can sell in a fixed duration is constant, irrespective of the demand
The max number of flights that can take off from a runway is fixed
GUESSTIMATE
GUESSTIMATE
33
35.
GUESSTIMATE | L.E.KConsulting-1 (1/4)
Estimate the market size of healthy food Industry of Mumbai in
terms of revenue ?
Before I proceed, I would like to ask a few questions, is that
okay?
Go ahead
Would it be fair to assume that fruits and green vegetables fall
under the healthy food category? What else could be consider as
a healthy food ?
Yes, you can consider fruits and green vegetables to be healthy
food. It would also comprise low calorie food such as pulses and
sprouts.
Ok, so before moving ahead, since we are mainly concerned with
rationing and family wise food distribution, we should be
concerned with number of households in rural areas. This can be
found, considering an average number of 5 people, in every
household. After that, Let s divide the rural population on the
basis of income, that is ones that receive the benefits of rationing,
which are within an annual family income bracket of 1,20,000 Rs
which due to Rural income distribution would be around 90% of
total households. Is that safe to assume.
Alright, then the net revenue that rationing would generate
annually will be,
= 85 million * 10,000 Rs (amount spent per household) * 35%
Alright, with the available households, certain fraction would be
unaware of the rationing scheme and wouldn t be benefiting from
them, though this number would be around 20% of the households
that lie in this income bracket. Thus, by assuming total population of
India to be 1.2 billion, the number of households that get ration are,
= 1.2 * 70% (rural population) * 90% (lower income bracket) * 80%
(Awareness of rationing) / 5 (average number of people per
household) billion = 85 million households Now, for every
household, can I assume that the government would spend
approximately 10,000 Rs per annum on rationing, out of which only
35% contributes to healthy food?
Alright, What should be the time period for which we have to
calculate revenue for this Industry
You can calculate revenue for a year
Also, I would like to clarify what sources of sales of healthy food
do I have to consider? For instance, do I have to consider food
used in both residential and commercial segments, Also should I
also include the food that government purchases for vulnerable
population i.e. Rationing.
That sounds very logical, you can proceed with that.
Yes, that is reasonable, proceed with that.
Yes you have to consider all the mentioned sources of healthy
food distribution for revenue generation, which includes the
case for government purchase
Yes, that would be an appropriate assumption.
or affordability issues. This in turn directs focus to government
provided rations which constitutes 70% of healthy food and the
organised food available to non lower class population, while
neglecting other contributing factors.
Firstly, I would like to segregate the market into Rural and Urban
areas of living. With Rural population being 70% of total
population. Focusing on that, people in rural areas are self
sufficient due to farming as their main activity of work. On the
other hand they have lesser access to organised and packed
healthy food industry due to either unavailability of packed food
34
36.
GUESSTIMATE | L.E.KCONSULTING-1 (2/4)
(amount spent in healthy food industry.)
= 300 Billion Rs
Alright, let’s move to the other income segment now
Now, the income segment above 1,20,000 Rs would meet their
healthy food needs due to the presence of farming as a major
activity, and the negligible amount that one spends on packaged
and organised food industry. Should I move ahead with urban
segment?
You can move ahead with the urban segmentation and neglect this
income bracket.
Alright this gets us to consider major channels of age group
populations in which revenue of healthy food industry is
generated. For instance the following factors would be substantial
for the industry, Eating habits of 0-18 which is 35% of population
and 45+ that is 15% of population, age groups would be similar as
both are supposed to follow a general diet that would be
supervised by either the ones they are dependent on (their
parents or children) or their dietitian. Major contributing elements
in 18-30 age group that is 25% of population would be fitness
conscious people and pregnant women, this is due to the fact that
healthy food industry would only have substantial revenues from
people that follow a regular diet. Fitness conscious individuals
would be 2% of general population as observed in surroundings
through number of gym attendees verses that of non attendees.
For 30-45 age group, which comprises 25% of the population, we
will have only fitness conscious individuals and people with
chronic diseases and prescribed diet. These individuals would be
approximately 5% of total population. Do I proceed with the same?
Alright, before I move ahead with the revenue for the highlighted
segment, I would like to verify the number of pregnant women.
This can be done by understanding the fact that an average
woman, in consideration with the fertility rate and miscarriages, is
pregnant for approximately 2 years in her life (2.2 fertility rate, 9
months per child and miscarriages) Which is mostly in this 18-30
age bracket, Implying that probability that a woman would be
pregnant in this segment is = 2 / 12 * 100 percent Which when
multiplied by the number of women will give number of pregnant
women annually, thus, making it easy for classification. Would this
be a right approach? Should I move ahead with revenue
segmentation?
Now, for urban segment of population, we shall follow a different
approach. Considering the fact that household eating patterns
may differ to a high degree in urban areas and regularity in trends
of eating habits would be found for age groups rather than
households. So, let’s start with segmentation of market based on
income groups, i.e. Below poverty line which should be 40% of
population , Lower middle class that should be 30 % of population
, upper middle class which is 20 % of population and higher class
that is 10 % of population. Now due to limited access to organised
food industry and lesser availability of funds, can I assume that
BPL category would have a negligible contribution in the healthy
food industry revenue?
Yes, you can do that.
Yes, you can proceed with this.
Yes, you can assume that.
Yes, that would be an appropriate assumption.
Alright, Now for every segment of income highlighted, we can
further subdivide the population into age groups that have similar
eating habit due to activities of similar nature, i.e. of 0-10, 10-18,
18-30, 30-45 and 45+, however given the time constraint should I
club the age group of 0-10 and 10-18 together?
GUESSTIMATE | L.E.K Consulting-1 (2/4)
35
37.
GUESSTIMATE | L.E.KCONSULTING-1 (3/4)
Yes, this is a reasonable approach, please proceed ahead!
Ok, Using the above knowledge we can generate the number of
concerned people in every age bracket for the revenue and have
segmented the consumer base according to their behaviour. We
will calculate the amount that each of the above listed segment
spends per day and multiplying it by their population to get the
revenue numbers for them per day. After that just calculating the
annual counterpart and adding them together we’ll get the net
revenue of the healthy food Industry.
This was a very nice approach, thank you.
GUESSTIMATE | L.E.K Consulting-1 (3/4)
36
38.
KEY Takeaways:
When itcomes to policies or schemes that are not that widespread, it is usually very helpful to apply a filter based on awareness.
For example, the rationing scheme mentioned in the question
It is very important to be on the same page with the interviewer with regards to what needs to be calculated. For example, had the
interviewer talked about the online healthy food industry, the calculations would have been massively different
Creating customer personas like fitness enthusiasts, pregnant women really helps in cases where there is no set consumer type
Problem statement: Estimate the market size of healthy food Industry of Mumbai in terms of revenue
case facts
Rationing was explored as it accounts for
a major percentage of the healthy food
industry, particularly in rural areas and
upon clarifying, the interviewer asked us
to include it
Here, to be available for rationing, an
individuals annual income should be less
than 1.2L per annum
Major consumer personas consuming
healthy food include those suffering from
chronic disease, fitness enthusiasts, and
children who are subjected to supervised
eating.
GUESSTIMATE | L.E.K CONSULTING-1 (4/4)
GUESSTIMATE | L.E.K Consulting-1 (4/4)
37
Approach:
Slum (40%)
Non-Slum
(60%)
Commercial
Non-Slum
BPL
5%
2%
5%
15%
25%
25%
15%
40% 30% 20% 10%
LMC
0-18 18-30 30-45 45+
UMC UC
Supervised
Eating
Chronic
Disease
Chronic
Disease
Fitness
Enthusiasts
Organised &
Packed Foods
Rationing
Can avail
Rationing(90%)
Aware about such
scheme(80%)
Cannot avail
Rationing(10%)
Annual Income>1.2L
Total cost incurred by the
govt. for healthy food:
% Healthy food (35%) * Cost per
family * Total eligible families
=
Population
Annual Income<1.2L
39.
Guesstimate the numberof Coca-Cola bottles sold in India.Before
you proceed, keep in mind that I am referring to only Coca-Cola
and not soft drinks as a whole and proceed.
of less than 15 and more than 40 might drink lesser
comparatively maybe once a week in tier 1 cities and once in 10
days in tier 2 cities. In the tier-3 cities, this frequency would be
even lesser, with those in the 15-35 bracket drinking once a
week and the remaining people drinking very rarely say once in
15 days. With this, I will be able to obtain a final answer for the
total number of soft drinks consumed, and multiplying that with
coca cola’s market share, which would be around 50%, would
give me the final answer to the guesstimate.
Very well, I’d like to use a demand-based approach to calculate the
same. Firstly I would classify the population into 3 brackets based
on the tier of the cities they belong to i,e, Tier-1,2, or 3.
Alright. Could you give me an idea of how you would proceed to
calculate the final number now from these assumptions?
Firstly, the average income of the people living in tier 1 and 2
cities is greater than those in Tier-3 cities. Further, on average,
there are more stores in well-developed cities for people to
access coca-cola drinks. Thus, it would make more sense for
more bottles to be sold in these cities as compared to Tier-3
cities, and thus such a classification would help me out here.
I’d further like to divide the people under these groups on the
basis of their age into 3 brackets- <15 years old, 15-40 years old,
and >40 years old. The drinking preferences of these groups of
people will vary for a number of reasons like financial
independence, eating habits, and lifestyle; thus, it makes sense to
classify them this way.
Alright. Why do you think such a classification will help you out
here?
I wish to know how many bottles are sold in a single day.
Well justified, you may go ahead.
No, that will not be necessary. Your approach is sufficient
enough, this will work fine. Thank you and good luck.
Very well. That makes sense. Do you have anything else to add?
No, that will be all. Would you like me to go into the specific
numbers for the individual segments and derive a final answer to
the guesstimate now?
Alright, before I go ahead, could you also clarify over what
duration you wish to know how many bottles were sold?
GUESSTIMATE | MASTERCARD CONSULTING ANALYST (1/2)
GUESSTIMATE | MASTERCARD CONSULTING ANALYST (1/2)
GUESSTIMATE | MASTERCARD CONSULTING ANALYST (1/2)
38
40.
KEY Takeaways:
Problem statement:Guesstimate the number of Coca Cola Bottles sold in a single day in India.
It is necessary often to justify your assumptions and steps taken towards solving any guesstimate as done here by the candidate.
This helps the interviewer follow your line of thinking and shows one’s clarity of thought. This is a key trait one looks for in any case
interview and goes a long way in proving one’s credibility.
>40 Years Old
(once in 15 days)
15-40 Yrs old
(once in a week)
<15 years
(Once in 15 days)
>40 Years Old
(Once in 10 days)
<15 years
(Once in 10 days)
>40 Years Old
(Once a week)
15-40 Yrs old
(2-3 times/ week)
<15 years Old
(Once a week)
Population of
India
Tier III
Cities
Tier I
Cities
Tier II
Cities
Approach:
15-40 Y
ears old
(2-3 times/week)
Alternate Approach:
The candidate could have first divided
the population on the basis of age
groups and then divided these groups
on the basis on frequency of drinking
taking into account some more factors
like season, demography and climate
This would have been a good approach
as well, as drinking trends are more well
found in an age group than based on the
tier of the city which they belong to.
GUESSTIMATE | MASTERCARD CONSULTING ANALYST (2/2)
39
41.
GUESSTIMATE | REDSEER1 (1/3)
Estimate the size of the tennis players’ market in India.
To define the scope more clearly, I’d like to clarify a couple of
questions. Should I include both the amateur (or recreational) and
the professional tennis players, or do I focus on individual
segments?
Yeah, sure. I applied the area filter of rural or urban because rural
India doesn’t have access to tennis infrastructure. Additionally,
since tennis is a very cost-intensive sport, only the demographic
segments from higher income classes can afford the costs
associated with the sport. Typically, individuals in the age bracket
0-15 and business professionals having active tennis club
memberships will comprise the market.
Got it. Let’s take the population of India to be 1.2B. Therefore, 30%
of 1.2B will fall under Urban India, which is 0.36B. For ease of
calculation, let’s assume it to be 0.4B. Further, we’ll apply an
income filter to get 20% of 0.4B (0.08B) for the Upper Class and
25% of 0.4B (0.1B) for the Upper Middle class, 35% of 0.4B (0.14B)
for the Lower Middle class and 20% of 0.4B (0.08) for below
poverty line (BPL). We shall discard the lower middle class and the
lower class for further calculations since they don’t have access to
the required infrastructure
Proceeding further, I shall apply an age filter on the two
demographic segments. The age brackets are: 0-15 (35%), 15-25
(25%), 25-45 (25%), >45 (15%). I shall then consider the two
segments of 0-15 and >45 to estimate the tennis players market as
young professionals and a lot of established working people are
enrolled in club memberships. Furthermore, given tennis has to
compete with sports like cricket, hockey etc. that are legacy
sports, thus we’ll have to include an interest factor of (10%) for
someone looking to take up tennis.
For this guesstimate, include both recreational and professional
segments
Got it. Additionally, I wanted to understand whether we have to
calculate the market size in terms of volume (number of tennis
players across India) or in terms of GMV (Gross Merchandise
Value).
Understood. I hypothesize that it can be calculated using the
mathematical formula
GMV= (# Tennis players) * (Average spend per player). Then, I shall
estimate the number of tennis players followed by the average
spend to get the final answer. Shall I proceed with the approach, or
are there any tweaks that I should incorporate into my approach
Seems alright. Do state why you applied these splits.
To compute the total number of tennis players across the country,
I shall begin with the population of India, then apply splits on the
population based on the following parameters
Area (Rural - 70% /Urban - 30%)
Annual Income (Upper/Middle/Lower Class basis income) (20%,
50%, 30%)
Age (0-15, 15-30, 30-45, 45+) (30%, 30%, 25%, 15%)
Does this seem fine, or should I think of an alternative approach?
The approach seems fine. Kindly proceed with the individual
calculations.
Good clarifying question. Proceed by calculating the GMV of the
tennis players’ market
Perfect. The approach seems fine, do plug in the numbers and
estimate the total market in terms of volume.
This looks fine. How will you go about your calculations next?
Perfect! What is the resultant figure?
40
42.
Yeah, so 35%of 0.08B + 15% of 0.08 B + 35% of 0.1B + 15% of 0.1B.
Upon adding all the sub-segments the answer that we get is 0.09B,
and upon applying a 10% interest factor basis sports, we get the
final answer to be 0.009B, which is 9 million
I’ll carry out a quick sanity check on the number. If we benchmark
the number with the population of India, we get a ratio of 0.009/1.2
we get around 8 tennis players in a sample space of 1000, which
seems like a reasonable number. Do you want me to mention certain
edge cases that could have made it more accurate
Typical costs would be the cost of racket, costs associated with
tennis accessories (bandana, arm band, tennis jerseys),
additionally costs associated with club memberships. Other
costs include those related to logistics costs since there are
only one or two tennis clubs in cities meaning that enthusiasts
would have to travel long distances to reach those clubs.
Yeah, so the costs are as follows:
Cost of racket : INR 3000 on average annually
Cost of accessories : INR 2000 on average annually
Cost of memberships : INR 20000 on average annually
Othe miscellaneous expenses: INR 5000 on average annually
The figure is roughly around INR 30000 annually.
So, the figure would be roughly around INR 30000 across a
year. To cross-check the numbers, we can carry out a quick
sanity check, in which we can benchmark this with the typical
expenses for food, which are around INR 40000 - 50000
annually. So, it passes the sanity check as it is around 60-70%
of the expenditure on food which seems reasonable and goes
to show the influence of income on the calculation
Do, you want me to estimate the GMV as well?
Yeah, so a couple of other things that could have been included
to yield an even more accurate answer are that both sexes don’t
have the same access to take up tennis as their career, so a split
based on sex could have been included. Other than this, we
could also include a tier split, since the vast majority of tennis
players come from metros or fairly well-established tier 2 cities
What kind of costs would these be and could you give us a rough
estimate for this number as our client is looking to venture into the
market and wants to get an idea of the financial feasibility of
foraying into the market.
Yeah, so to obtain the GMV, I shall calculate the operating
expenses/typical costs that an average tennis player subscribes
to. Then, I shall multiply that with the volume to obtain the final
answer.
Great! Now, how will you obtain the GMV for the tennis players’
market in India.
Sure, kindly account for those said edge cases that’ll lead to a
more accurate answer
Could you quantify these costs and give me a number?
Could you try to put the number into perspective by taking up certain
examples.
No, that won’t be required. We can close the case here. This
approach seems fine.
GUESSTIMATE | REDSEER 1 (2/3)
41
43.
KEY Takeaways:
15-25
(25%)
Approach:
Problem statement:
GUESSTIMATE| REDSEER 1 (3/3)
Estimate the size of the tennis players’ market in India.
Urban (30%)
Rural (70%)
Below Poverty Line
(20%)
>45
(15%)
>45
(15%)
Lower Middle Class
(35%)
25-45
(25%)
25-45
(25%)
Upper Middle Class
(25%)
15-25
(25%)
Upper Class
(20%)
0-15
(35%)
0-15
(35%)
Population of India (1.2Bn)
The total figure thus obtained =0.09 Bn
Interest factor in tennis basis benchmarking with different sports = 10%
So, final answer = 9 million.
Carrying out sanity checks based on demographics and geographics help us get a look and feel of the problem.
Benchmarking the number of people playing tennis with the entire population and tennis expenses with food expenses
helped us establish the viability of the approac
Accounting for certain edge cases helps you demonstrate breadth of thinking and gets you brownie points
Alternate Approach:
Given that we had to account for
amateur as well as professional player
segments. Separate calculations could
have been carried out for both
For the calculation of amateur tennis
players, the number of players in the
age segments 0-15, and 15-25 could
be calculated and a very small
percentage (1-2)% of that could be
taken to calculate the professional
tennis players.
Working professionals with club
memberships pursuing tennis as a
hobby can be calculated in a similar
manner.
42
44.
Can you estimatethe size of the bamboo toothbrush market sold
annually in India?
Certainly, before we begin, may I kindly request some clarifying
information?
Of course, certainly.
Is there any specific brand we need to focus on?
No specific brands, we are interested in all bamboo toothbrushes
sold nationwide.
Great. Also, should we calculate the market size in terms of the
number of toothbrushes sold (volume) or GMV (Gross
Merchandise Value)?
A good question. Proceed by calculating the volume of
toothbrushes sold in a year.
So, that would be (0.3 × 1400) that is 420 million people.
Alright, how would you proceed?
Alright, I will assume that on average, a single individual uses 3
toothbrushes per year. Does that seem reasonable?
That's a fair assumption.
Now, I would like to segregate the market into rural and urban
areas, assuming that rural areas make up around 70% of our
population. We do this because the rural market for bamboo
toothbrushes is relatively smaller due to lower awareness and
availability.
So, are you excluding the rural segment altogether?
Yes, because toothbrushes sold in rural areas are almost
negligible compared to urban areas. This leaves us with 30% of
the total population, which is 1,400 million people.
Next, let's segment the market by age. It's our assumption that
bamboo toothbrushes may not be suitable for children below 16,
as they can potentially harm their sensitive gums. Additionally,
individuals aged 45 and above tend to stick with well-
established brands, favoring traditional plastic toothbrushes. So,
we'll focus on the age group between 16 and 45, as they are
likely to be more receptive to innovative products and have
heightened environmental consciousness.
That's a reasonable approach, please continue.
Now, assuming the adult population is around 40%, this gives us
0.4 × 420, that is 168 million people.
Alright, how would you proceed from here?
Next, let's segment the market by income. We observe that lower-
income individuals might find bamboo toothbrushes less
accessible due to their relatively higher cost. On the other hand,
the upper class tends to prefer electric toothbrushes or premium
brands. The upper-middle class emerges as a key demographic
for bamboo toothbrushes due to their affordability and eco-
friendly attributes. The lower-middle class often opts for budget-
friendly toothbrushes from well-established brands. Limited
awareness of bamboo toothbrushes also contributes to their
lower adoption rates across various income segments.
That makes sense, please go on.
GUESSTIMATE | REDSEER 2 (1/2)
GUESSTIMATE | REDSEER 2 (1/2)
43
45.
Assuming the upperclass accounts for 20%, the upper-middle
class for 20%, the lower-middle class for 40%, and the lower class
for 20% of the adults, we can estimate how many of them would
be using bamboo toothbrushes in each of these segments. We
can consider 2% of the upper class, 5% of the upper-middle class,
and 2% of the lower-middle class as our buyers.
That gives us ((0.02×0.2) + (0.05×0.2) + (0.02×0.4)) × 168, that is
3.7 million people who buy bamboo toothbrushes.
Since each person uses 3 toothbrushes per year, we would
estimate the number of annual brushes sold to be three times the
answer, that is about 11 million people. This top-down analysis
provides us with a framework for further market research and
analysis.
So, what would that make according to your calculations?
That sounds like a reasonable approach, thank you.
GUESSTIMATE | REDSEER 2 (2/2)
44
46.
Guesstimate the numberof cars in the city of Delhi.
I would like to ask a few clarifying questions first. Does the number of
cars refer to cars owned by all people staying in Delhi or the number of
cars running on the roads of Delhi on any given day?
Sure, The average size of a household would be four, to the best of my
knowledge. So the final figure would look something like this as per my
suggested approach
I am expecting the former.
Alright, I would like to use a demand-based approach to proceed with
solving this guesstimate.
I would like to divide the population of Delhi into three segments based
on their income. I’m proceeding with the assumption that the people of
the higher end can afford two or more cars per household, the middle
end can afford one car per household, and those of the lower end
cannot afford a car.
Good. Do walk me through the rest of your calculations for the same.
The total number of cars owned by the resident of Delhi will thus be the
total sum of the number of cars owned by the individual segments of its
population, which can be calculated easily as the number of households
in the segment x No of cars per household wherein the number of
households per segment will just simply be the percentage of the total
number of households belonging to that segment.
Delhi being an urban city, its population split would probably comprise
20% belonging to the upper class, 50% belonging to the middle class,
and the remaining 30% belonging to the lower class roughly.
Very well, that makes sense.
Sure, go ahead.
Alright. What do you think the split of the Delhi population would look
like?
Will this be your final answer, or would you like to account for any other
outlier values?
No, I would like to add to it further. There would also be certain people
like cab drivers and car rental agencies who own a significant number
of cars. This should not affect the answer very much, though. However,
I think it would round off my guesstimated number to around 7Mn cars.
Your answer is slightly off the expected number, but your approach to
the guesstimate was well-structured enough. That will be all for now,
thank you and good luck!
Thank you.
Upperclass (30Mn*0.2/4)*2 = 3Mn + Middleclass (30Mn *0.5/4)*1 = 3.75 = 6.75 Mn
GUESSTIMATE | JPMC ANALYST
45
47.
46
Estimate number ofmangoes in New York in a given month in season.
Yes, please.
Let’s take it to be 10% of the fruits.
Yeah this looks okay. Please put the filter on people consuming
mangoes and hence, calculate the number of mangoes in a given
month.
Kindly walk me through the complete split for the same.
Yes that is quite accurate. How would you estimate the need for
mangoes in each household?
That seems fair.
Yes. For the sake of simplicity, let’s focus only on the urban population
for this case.
Sure, that sounds reasonable.
Number of mangoes refers to the amount purchased by the consumers.
We intend to calculate the number during the mango growing season,
i.e. summers.
Consider this to be New York State.
I’d like to begin by asking a few clarifying questions first. What does “New
York” refer to? The state or just the city?
Does the number of mangoes refer to the mangoes bought by consumers
in a month or the number of mangoes produced? Also, does “in season”
mean the time of the year when mango production is optimal?
Great. So I’d like to start by breaking down the population of New York
into an Urban and Rural split. If I remember correctly, New York is
composed of 90% urban population and 10% rural population, does that
sound fine to you?
Got it. Further, the urban population can be split on the basis of income
segments of upper, middle and lower class with 10%, 50% and 40%
shares respectively.
Next, I’d like to simplify the situation by splitting these population
segments into households. It’s well-known that New Yorkers typically live
in small apartments, and hence, I’d like to assume the average household
size to be 3. Does that make sense?
We can further split these income segments into different groups based
on focus on health, wellness and affinity to consume fruits, and one final
filter on the proportion of such people consuming mangoes.
Sure. We can split these segments into 3 groups; fitness enthusiasts, the
average eaters, and the people who aren’t very health conscious.
Upper class can be split as, 40%, 40%, and 20%.
Middle class can be split as 20%, 50%, and 30%.
Lower class can be split as 5%, 45%, and 50%.
I hope this split is reasonable?
Sure. I expect the fitness enthusiasts to consume fruits everyday, i.e. 30
times in a month. The average eater will consume fruits 20 days in a
month. The last category probably consumes fruits 10 days a month.
Since mango is a fairly common fruit, it shouldn’t be impractical to assume
that 20% of the time mangoes are consumed.
Alright. Should I proceed with the calculation?
So the population of New York is approximately 20 million, hence, the
urban population would comprise 18 million individuals.
That means that upper, middle and lower classes comprise 1.8 million, 9
million, and 7.2 million people. Dividing the population into households of
average size 3 gives us 600k, 3 million, and 2.5 million (approximately)
households.
Understood. So I suppose supply won’t be an issue and we can take a
demand-side approach?
GUESSTIMATE | LEK 2 (1/2)
48.
Correct.
Your figure isslightly off, but I liked your approach. This is all for the
interview, thank you for coming in.
Now, I’ll split these segments into their respective fitness consciousness
buckets and calculate the approximate number of mangoes consumed in
New York in a given month.
[Calculation]
So my calculation tells me that 10.75 million mangoes are consumed in
New York in a given month
Thank you.
GUESSTIMATE | LEK 2 (2/2)
47
Revenue: Volume couldhave declined either due to: Cost: Avg cost / unit depends on:
Revenue
Volume
Average price/unit Product Mix Average price/unit
Volume
Cost
Revenue: Avg. price/unit
can be affected due to -
Production Distribution Push Customer Pull External Factors
Procuring
Processing
Efficiency test
Packaging
Inventory
Distribution
Policy
Marketing
Invoice
Fewer
Distribution
Channel
Margins
Other products
Shelf life
Inventory
Price
Preferenc
Product
Promotio
Policy
Demography
Competitors
Pushers -
Distributors &
Retailer
PESTEL
Covid
Porter’s Five
forces
Rent
Labour
Salaries
Administrative
expenses
R&
Procurement
Manufacturing
Packaging
Distribution
Sales/Marketing
Competitor
Substitute
Elasticity
Fixed Cost Variable Cost
Profits
PROFITABILITY CASE APPROACH
This framework should be used for questions on profits, related
operations, or new business opportunities.
Profitability cases deal with the cost-side problems, revenue-side
problems, or both.
Approach through preliminary questions
Get a basic understanding of the business: What products or
services does it provide
What geographic area does it serve
Understand whether it is an industry-wide phenomena/problem or a
company-specific problem.
What was the trend before?
49
51.
Cost Reduction- ValueChain Analysis
Cost of raw materia
Contract & deal
Quantity Used
Marketing Channe
Strategy
R & D
Equipmen
Human Capita
Cost of Finance
Machiner
Factory Ren
Labour Hour
Technology
Sales Channe
Sales Forc
Training
Repair
Spare Part
Returns
Transport to
Warehous
Storag
Transport to
Customers
Raw Material Processing
Storage &
Transport
Distribution
Marketing
Customer Service
Due to a potential rise in operating costs, the client would likely see a decrease in earnings/profits (bottom line).
An interviewee is first expected to identify different cost components followed by validating them, identifying the key
cost drivers as well as the levers affecting their value, and finally suggest how the company could change its ways to
become more profitable.
PROFITABILITY CASE APPROACH
50
52.
Our client XYZretail bank facing declining profits and is unable to
compete. You have been approached to find the problem and
suggest changes.
No, please go ahead.
This problem is being faced by a specific branch that is located in
a metropolitan region.
The problem is unique to our client and is not affecting others.
No, the decline is not due to any particular product.
Sure, go ahead.
Sure, sir. So, I need to focus on finding the issue with our client's
declining profits. Is there any other objective I need to keep in
mind?
I’ll start with a few clarifying questions.
Does this issue affect a majority of the client's branches, or is it
isolated to a specific category such as metro, urban, or rural
branches?
Given that the problem is specific to a particular branch, it is fair
to assume that the problem is not faced by the banking industry in
general. Are the competitors located in that region also facing
similar issues?
Are there any particular products or services offered by the
branch that have seen a decline in customer demand or usage
over the past few months, and do we have insights into the
reasons behind this decline?
By how much have the profits decreased, and for what period has
our client been witnessing this decline?
There has been a decline of 25% in profits over the past five
months.
The revenue has been steadily increasing, but the costs have
risen at a much greater rate.
The interest expenses are comparable to those of similar
branches, and the bad debt levels are in line with regional
standards.
The rent per square meter is in line with other banks in the area
and has remained unchanged over the past few years. Likewise,
maintenance, depreciation, and utility expenses have also stayed
relatively consistent.
Alright. Since the issue is that of profitability, Could you provide
insights into the revenue and cost trends of that particular
branch for the last five months?
Okay. So, in that case, I'd like to explore the cost components of
a typical retail bank branch. Can we identify which of the three
categories - Interest, Provisioning, or Operating expenses - did
not meet the client's expectations in the cost structure for such a
branch?
Understood. It appears that the issue pertains to the operating
costs of the branch. The primary operating expenses of the
branch would include employee expenses per customer, rent,
utilities, stationary and postage, maintenance, and depreciation
expenses. Can we gather insights on where the costs have been
increasing specifically vis-a-vis our competitors or in comparison
to prior periods?
PROFITABILITY | RETAIL BANK (1/3)
51
53.
The salary structureof employees for various positions closely
resembles those of similar branches.
Alright. So, how would you further analyze this cost head?
Yes correct. So, it has been observed that the time taken by the
employee per customer is high. What are the possible reasons for
the same?
Okay, so that leaves us with employee expense per customer,
which is salary/number of customers handled by each employee,
stationery, and postage expense. Considering employee and sales
agent salaries first, are the salaries of branch employees and sales
agents above the industry standards?
Okay, so can we infer that the problem revolves around the
number of customers each employee serves? Considering the
high expense, is it reasonable to conclude that the number of
customers handled per employee is lower than industry standards,
indicating a potential issue of over-staffing?
The metric of "customers served per employee" encompasses the
number of customers served by each employee, which, in turn, is
influenced by the time an employee spends per customer and the
total working hours.
According to me following can be the possible reasons for high
time taken taken by employee per customer
Employees might lack the competency skills or training,
resulting in their inability to address customer issues
effectively during the initial visit
Due to improper segmentation, the customer may have to visit
multiple counters to perform a single task.
Due to improper segmentation, the customer may have to visit
multiple counters to perform a single task.
Thank you. These recommendations are reasonable and logical.
Okay. So, firstly promoting the adoption of the bank's mobile app
and website among branch customers for accessing essential
services such as money transfers and checking account
balances. Offer demonstrations when necessary. Secondly,
Installing self-service kiosks either within or outside the bank
premises, facilitating cash deposits and passbook updates for
customers, and providing convenient options. Then, training the
employees to enable them to better understand the needs of the
customer and thereby assist them efficiently. Lastly,
Implementing a single-window clearance approach for a wide
range of services wherever feasible, simplifying customer
transactions and minimizing the need for customers to visit
multiple service points.
PROFITABILITY | RETAIL BANK (2/3)
52
54.
KEY Takeaways:
Approach:
Problem statement:
PROFITABILITY | RETAIL BANK (3/3)
CASE FACTS:
Our Client is a major retail bank facing declining profits and is unable to compete. You have been approached to find the problem and
suggest changes.
Declining costs are majorly due to higher employee salaries. This can also n=be figured through higher customer handling charges
Once the problem is identified, it is important to figure out the reasons for the same- this can be done through industry specific
metrices which measure efficiency/productivity
Candidate needs to develop understanding of the cost structure in the banking industry.
Profits
Revenues Costs
Variable costs
Fixed costs
Employee exp/
customer
Maintenance costs
Rent
Salary
Customers/
employee
Time taken by
employee per customer
Total working
Client is a major retail ban
Problem of increasing cost
Problem specific to a particular
branc
Interest expense and bad debt level at
par with other branche
Fixed cost of employee salary similar
to competitors
53
55.
Your client isPharmacy store in New Delhi. They have encountered a
decrease in profitability and want you to analyze the reasons while
suggesting recommendations for the same.
This has been seen for the last 2 months and we do not have data for
the exact drop in profitability.
Yes Indeed, they do deal with both Drug and Non-Drug segments of
medicines, however the profit drop is only seen in the drug segment.
We can further classify the Drug segment into Prescribed medicines and
Over-The-Counter Drugs i.e. The ones that can be purchased without
any sort of prescription. Was the profit drop equal in both the segments?
Alright, now Channels or Sources for Footfall of Patients that come for
prescribed medicines can be, Direct Referrals from different clinics and
nursing homes, through any third party prescription, patients with Online
Medical Consultancy Prescriptions. Do I have to consider more Sources
for patient footfall than the ones listed? Was the profit drop Uniform
across all these segments?
There is a clinic in a kilometer of radius and a nursing home that is just
on the adjacent space of pharmacy store.
I’d first like to start with a few clarifying questions. Since when have they been
facing this problem? Do we have the magnitude for profit drop?
Alright, considering that profits are a function of Revenue and Cost, am I
supposed to focus on any particular segment from them?
Ok. Now, to understand the breakdown of revenue I would like to better
understand, what are the segments of products that our client has been
involved with? For Instance, Do they deal with both Drug and Non-drug
segments of medicines? Has the profit drop for both the segments been
equal?
The profit drop was only seen in Prescribed medicines and not for Over-
The-Counter Drugs.
No, this consideration for patient footfall sources is exhaustive. Also, The
profit drop was only visible in Direct refferals from Clinics and Nursing
Homes. Sales from third party prescription and Online consultation
prescription were constant in the concerned period.
Ok, so we can directly look into the Clinics and Nursing homes that
provide referrals for our client. What are the numbers of such
Prescription centers?
Alright, revenue from this segment is equal to (Number of medicines per
person * no of Patients). Has any of these varied in the concerned
period?
This can be due to the following reasons,
1 Prescription Center related issue
The Clinic/Nursing home referring to a different Pharmacy.
The Clinic/Nursing home have started their own Pharmacy.
The Clinic/Nursing home have shifted to online consultancy.
2 Patient related issue
Choosing a competitor because of better quality or pricing.
I would suggest the following 2 solutions in order to solve the problem,
Try to get listed on such online platforms and increase the footfall for
the patients in online consultancy prescription.
Find more clinics and nursing home to integrate with for direct
refferals to increase the footfall for direct referral patients.
Yes Indeed, The fooftall for this segment of people has gone down
sharply in the past 2 months.
Nice approach, and yes the nursing home has shifted to online
consultancy and the patients are choosing to use the online services due
to the comfort of home. Also, the drop in footfall is also due to the same
reason. Now, What would you recommend to our client in order to solve
the above issue?
Yes, Cost has remained constant since the beginning of the concerned
period and Only revenue has gone down. So, focus on revenue only.
PROFITABILITY | HEALTH CARE
54
56.
Problem - Yourclient is a petrol pump owner who has noticed a decline
in profits of the pump in the past few months. Please look into the
problem and suggest recommendations for the same.
Seems like a fair assumption. How would you proceed further with
this information?
I’d first like to ask a few clarifying questions. Since when exactly have
they been facing this problem and was it a gradual or a sudden drop? Did
the petrol pump change locations?
This problem started 3 months ago and it was a sudden drop. They
haven’t changed their location.
And has the decline in profits been concentrated in either of the two
lines of business or both have suffered?
Both have faced proportionate declines in profitability.
Alright. Since the sale of petrol, diesel and oil is the primary line of
business, I shall focus on it more. I’d now like to break profitability down
into revenue and costs. I’d like to focus on the revenue side first. Does
that sound good to you?
Yes, please go ahead.
So revenue can be broken down mathematically into (Petrol Purchased) *
(Price of Petrol) * (Product Mix). Have we noticed a change in either of
these buckets?
Before I make use of that information, I would like to first break sale of
petrol into (Petrol purchased per customer) * (Number of customers).
Have either of the two figures declined?
Is there any issue with the ability of the drivers to locate the petrol
pump? Possibly the removal of a sign, a notice or something related that
used to direct drivers to the petrol pump earlier? Or maybe the opening
of a new pump?
Okay, and what about the road that leads to the petrol pump? Any
changes in the nature of the road, any blockage, or anything?
Is it affecting the truck and van drivers who wish to refill at the petrol
pump? Perhaps a restriction or the constrained size of road?
Got it. What all products and services does the petrol pump offer?
Its primary business lies in the sale of petrol, diesel, and oil. It also hosts
a convenience store at the pump itself which sells products like car
scents, window shades, etc.
Yes, the number of customers has declined recently.
Yes this looks satisfactory. How do you suggest we move further?
No changes have come up in the information at the drivers’ disposal and
no new petrol pumps have opened nearby.
Yes, the road that leads to the petrol pump has been under renovation
for a while.
Yes, as a matter of fact the client has reported a fall in the amount of
petrol purchased. This decline has come mainly due to a fall in the sale
of diesel.
Okay. To identify the reason, I’d like to look at the value chain of the
customers visiting the petrol pump. I visualize the process as follows:
Identifying location of the petrol pump
Path to the petrol pump
Queue at the petrol pump
Quality of service
Additional amenities (eg, general store, tire pressure check, etc)
Exit
Does this look good to you or should add something more?
PROFITABILITY | PETROL PUMP (1/3)
55
57.
Correct, the smallerwidth of the road isn’t allowing larger trucks and
vans to pass, hence, they’re forced to use other petrol pumps. You have
identified the core issue of the problem. Kindly provide a
recommendation for the same.
Sure. Since the problem is with the road leading to the petrol pump,
maybe the client could open a temporary pathway to the petrol pump, if
feasible. Another option could be to cut down their diesel purchase costs
so as to improve the profitability of their business until the road is fully
operational again. However, I would prioritize the first solution over the
second.
That sounds reasonable. Thank you so much.
Thank you.
PROFITABILITY | PETROL PUMP (2/3)
56
58.
KEY Takeaways:
KEY Takeaways:
Approach:
Problemstatement : Your client is a petrol pump owner who has noticed a decline in profits of the pump in the past
few months. Please look into the problem and suggest recommendations for the same.
Cost
Revenue
Price Mix
Petrol
Purchased
Petrol per
person
Number of
Customers
Profits
Location
Path to
Petrol Pump
Queue at
Pump
Extra
Ameneties
Service Exit
case facts:
decline in profits of petrol pump was
reported due to major fall in the amount
of petrol purchased and this was
influenced by fall in the sale of diesel
here the fair assumption that the primary
users of diesel were truck and van
drivers, helped to approach the case in a
right direction
accessibility of petrol pump was
hindered due to the road renovation, and
this was affecting their profits.
focusing on the primary users of the product line and the accessibility of the product
Visualizing the value chain as being a customer itself helps to easily identify the problem
try to solve an external issue by providing a temporary pathway in addition to the internal solutions.
PROFITABILITY | PETROL PUMP (3/3)
57
59.
There’s a nimbu-paniseller in Mumbai. He’s been facing a decline in
profits. Find out why and suggest recommendations.
To align with you on the case and define the scope of the problem clearly,
I had a couple of clarifying questions. How long has the nimbu-pani seller
been experiencing this loss and has it been a gradual decrease or a
sudden decrease in profits?
To answer your questions, the nimbu-pani seller has been
experiencing a dip in profits over the past 6-7 months and it has been
consistent over the same period.
Great, so now that we’re on the same page. I shall approach the problem
by taking profits as revenue - costs. So, the decline in profits could either
be because of the decline in revenue or a cost surge. Should I proceed
with the revenue side or inspect the cost side to get the root cause of this
problem?
Yeah, that’s a reasonable assumption. You can proceed with the same.
Has there been a change in either the price/product or the volume or the
units sold?
You can proceed with the revenue side.
Revenue can further be divided into the product of volume, product mix,
and price/product. Shall I assume the product mix is one as the nimbu-
pani seller has only one product line in nimbu-pani.
No, that has remained constant.
To proceed further, I shall look at the value chain of the revenue side. So,
there are three value chain segments: production, distribution push, and
customer pull. Has there been an alteration in any of these segments?
I think these are too broad buckets to comment on whether or not
certain segments have experienced a change over the past few months
or not. Could you clarify what possible reasons you would analyze in
these three segments and be somewhat more precise.
Sure, so in the production leg, I’ll be covering the following processes:
Procurement, Processing, Efficiency testing (QC), Packaging, Inventory,
Inbound Logistics, Outbound Logistics.
Given that the volume of nimbu-pani has remained consistent, I
hypothesize that it won’t be a procurement, processing, efficiency,
packaging, or inventory problem. Has there been any change in the
inbound logistics (referring to the logistics involved in bringing the raw
materials to the manufacturing centres) or outbound logistics (referring
to the logistics involved in storing and delivering goods to the end
consumers)?
Analysing the outbound logistics processes might yield some valuable
insights.
Correct, so the typical value chain of outbound logistics would include
the following steps: Order placement by the business or consumer,
Transmission & processing of order, Transportation, Delivery to the end
customer segment. Has there been any change in either of the steps that
are affecting the lemon’s efficiency?
With a focus on transportation-related hypotheses, following points can
be considered:-
1.High Transportation Costs: Optimizing transportation expenses can
boost profitability.
2.Delivery Time and Efficiency: Improving these can increase sales.
3.Supply Chain Disruptions: Addressing disruptions can stabilize profits.
Well, we’ve noticed that the transportation segment might cause the
problem. What are your hypotheses on the same?
PROFITABILITY | LEK (1/2)
58
60.
We haven’t noticedanything related to that which might be of concern
or might be causing this issue. Would you like to look at other steps/
processes?
To draw the connection between outbound logistics and the loss in
profits, I shall map out the user journey of a nimbu-pani seller. As I see
it, a common user journey would include the following steps: Picking the
nimbu out of the carton, Placing the nimbu in the machine, Squeezing,
the nimbu juice out of the nimbu, Pouring out the nimbu juice and giving
it to the customer. So, has there been a change in the efficiency or
procedures associated with any of these steps. Has the carton been
drying up the nimbus rendering a decrease in the final juice that can be
extracted out of the nimbu or has there been a change up in any of the
other processes.
Yes, there has been a decrease in the amount of nimbus juice that can
be extracted out of the nimbus. But, could you pinpoint where in the
supply chain or outbound logistics is this taking place?
Yeah, so I hypothesize that the main reason the nimbus are arriving with
less amount of juice in them is because they are getting dried up in the
transportation process of the outbound logistics. That should be the
reason, correct?
Correct. Could you suggest certain recommendations so that the
nimbu-pani seller can actually become profitable
Sure. In the short term the nimbu-pani seller can negotiate with the
dealers to wet the cartons or sacks that nimbus or brought in, ice could
be placed in them to prevent drying. In the medium to long term, we can
think of changing our distributors or altering the outbound logistics
processes to make sure that the nimbus don’t dry up.
Great, those seem like actionable recommendations. Thank you!
PROFITABILITY | LEK (2/2)
59
61.
Your client isa well-established manufacturing company, and it's been
experiencing a decline in profitability. Please identify the problem and
propose potential solutions.
I'm eager to get started. Can you please share more information? Where is
the company based? What are their core products? And how long has the
profitability issue been ongoing?
PROFITABILTY | PACKAGING MATERIAL MANUFACTURER (1/3)
This is an Indian company specializing in manufacturing packaging
materials, particularly carton boxes, for B2B clients in E-commerce and
Consumer Durables, such as electronic appliances. The issue with
profitability has persisted over the last 2-3 quarters.
Understood. Is this a challenge affecting the entire industry or is it
isolated to the company itself? Could you also provide insight into the
extent of the decline? And just to clarify, when you mention
"profitability," are you referring to the company's profit?
No, this issue is unique to the company. You can consider profitability
to be equivalent to profits, and the exact extent of the decline is not
relevant.
Thank you for clarifying. To further analyze the situation, I'd like to
dissect the profit into its components: revenue and cost. Could you
shed some light on whether the declining profits are a result of
decreasing revenues, increasing costs, or a combination of both?
Revenues have remained consistent, but costs have increased. Let's
concentrate on the cost aspect.
Sure, I'd like to start by examining the firm's value chain to identify if
the issue stems from any of its components.
Certainly, please proceed.
The value chain encompasses R&D, Procurement of raw materials,
Processing, Storage and Distribution, Retail, Marketing & Sales, After-
sales service, and Financial costs. Should I zoom in on a specific
component for analysis, or do you have a preference for a
comprehensive review of the entire value chain?
(Interrupting) Indeed, the issue is within the Processing step.
All right, I will utilize the process journey to pinpoint potential causes
within the Processing stage. Is that acceptable?
Sure, please proceed.
Thank you. Within the Processing step, we have the sub-processes of
Offloading of raw materials at the processing center, Core processing
involving tasks like cutting, painting, varnishing, and so on, and
Onloading of processed goods. Could you kindly guide me on which of
these sub-processes should I focus on for a more detailed analysis?
Focus on the Core processing part.
For analyzing the costs within the Processing step, I'd like to
categorize them into People, Process, and Technology. People costs
would encompass labor and supervisory expenses, Process costs
would include machinery and factory-related costs, and Technology
costs would involve expenses related to computer systems and
software. Could you provide guidance on which cost category to
concentrate on?
Focus on the Process costs, particularly the machinery costs.
Understood. Within machinery costs, I'll break it down further into
capital/purchase costs of new machinery, machinery operation costs
like water, electricity, fuel, coolant, and maintenance costs, including
expenses for oil, lubricants, and insurance. Is there anything else I
should consider?
60
62.
PROFITABILTY | PACKAGINGMATERIAL MANUFACTURER (2/3)
The consumption of oil and lubricants has notably increased. Can
you provide insights into why this might be happening and suggest
recommendations for the client?
The increased consumption of oil and lubricants could be due to
machinery nearing the end of their useful life and/or the recent
purchase of lower-quality machinery, leading to higher maintenance
requirements. For the short term, I would recommend conducting an
audit of all machinery in the company, considering early write-offs or
operating machines at reduced capacity as they approach the end of
their useful life. In the long term, it would be advisable to identify and
gradually replace low-quality machines with high-quality alternatives.
Sounds like a solid plan! We can consider the case closed!
61
63.
KEY Takeaways:
KEY Takeaways:
Keep in mind the wastage that is being produced during raw material procurement and processing
Take into account offloading during procurement and onloading during storage
Segment the processing step into three parts: Raw Materials, Work in Progress (WIP), and Finished Goods. Break down the processing
expenses into two categories: Labor Costs and Overhead Costs.
We are talking about an Indian Company
in this case
The company produces packaging
materials for business-to-business
(B2B) customers, specifically catering to
the e-commerce and consumer durables
sectors
Profits have declined over the past two
to three quarters
The problem is specific to the company
Expenses have increased
Study the facts carefully, identify the
challenges, provide solutions to the
company and try doing value chain
analysis
Problem statement :
Revenue
Cost
Profits
R&D
Acquiring raw
materials
Processing Retail
Storage &
distribution
After Sales
and Financial
case facts:
PROFITABILTY | PACKAGING MATERIAL MANUFACTURER (3/3)
Approach:
Your client is a manufacturing company which is currently experiencing financial losses.
Identify the challenges faced by your manufacturing company and provide solutions to
address these issues.
Sales and
Marketing
People
T
echnology
Labour Computer Software
Supervisor
Process
Packing Machinery
Factory rent Capacity Util.
62
Root cause analysisis a complete analysis of a given situation turning every stone that plays an important role. T
o understand
the approach, we’ll take up an example.
Business Model: Questions under this
segment shall focus on understanding
the business model of the company that
is under target
Objective: Clarifying the mission and
vision of the institution.
Timing: Knowing the environment of the
market and the globe while this situation
has occurred.
Market T
arget: This checklist will give
clarity on the target market of the
comp.
Geography: It provides the information
about the terrain, locality and culture
that created .
Clarifying Questions:
“
Asking the right questions” is a common
phrase from industry experts and guides. But
how to ask the right question. There is no
precise path to asking clarifying questions,
but you can create a checklist according to
the situation. A list may include a part or
entire or combination of frameworks like
3C-1P, 5W-1H, BOTMG etc., to make it MECE.
Keep in mind to follow a top-to-bottom
structure.
For example, if we take up BOTMG.
Think deeply about the facts you
accumulated from the clarifying questions
and structure the appropriate framework.
There are two ways you can distinguish
frameworks:
ii. External factors: These factors are
generally beyond the company's control but
are industry-related problems.
Considering the factors into consideration, one
needs to find a perfect framework.
Internal and external factors:
i. Internal factors: In most cases, these are
the factors an interviewee is expected to
dwell on.
Includes:
1. Recent developments in the
management of the company
2. Products launched by the company
Creating a proper framework:
At this stage, evaluating the facts and
formulating a hypothesis to find the root
cause of the situation.
For example:
In the above example, you can segregate
the consumers into divisions like the given
below and based on clarifying questions,
you can create an appropriate hypothesis.
Creating a Hypothesis:
Superficial
Causes
Root
Cause
If you stop here
the problem will
recur
A cause you can
take action on
that can prevent
the problem from
recurring
ROOT CAUSE ANALYSIS APPROACH
64
66.
It’s an internalissue in the app.
RCA | FLIPKART APM (1/2)
This is a global issue and not region-specific.
Yes, there has been a fall in the number of sessions by returning
users.
There has been a decline in the average number of sessions
launched by a user on average.
I have a few clarifying questions in mind before proceeding with
the approach. How do we define “traffic”? Is this drop in traffic
happening only on the app, desktop site, or both? Since when is
this happening? And was this a gradual drop or a sudden one?
So, has the click rate fallen?
The click rate can fall due to multiple factors. It could be due to lack
of engaging content, timing of the notification, etc. Have we
changed the content that goes into the notification?
So if it is an internal issue and the number of sessions have been
on the decline, I can draw the inference that there is a bottleneck
in users launching the Facebook app. Now, the app can be
launched in multiple ways, namely, via shared links to posts/
profiles, ads, notifications, logging onto a site with Facebook, or
directly opening the app. Has there been any drop in sessions
launched via any of these routes?
You are the Product Manager at Facebook. The traffic on
Facebook is down by 3%. Identify why.
This has been experienced on the Facebook mobile app. We have
been noticing falling numbers for the past week and this was a
sudden drop. Traffic refers to the number of sessions taken up by
the user in a single day.
Got it. And was this drop experienced across the world or was it
concentrated in some region?
The number of sessions launched through notifications has fallen,
the rest have remained the same. You may look into notifications.
Alright. I would like to further break down the number of sessions
launched through notifications into number of notifications sent *
Click rate. Have we changed the number of notifications sent to
users?
I’d like to break the number of sessions as the number of returning
users multiplied by the number of sessions launched by a user on
average. Has there been a fall in either of the two?
So is this an external issue, i.e., has there been a fall in social
media usage due to certain restrictions, new legislation,
competitors, etc. or an internal issue?
Correct. You have identified the problem, we can stop here. Thank
you for coming in.
No, the same number of notifications are being sent to the users.
Correct. The click rate has fallen by over 30% in the past few days.
Thank you.
Okay. Number of sessions can come from new users or returning
users. Have we experienced a drop in specifically either of the
two?
65
67.
RCA | FLIPKARTAPM (2/2)
66
You are the Product Manager at Facebook. The traffic on Facebook is down by 3%. Identify why
68.
The Supply sideof Housing.com is falling on a quarter-to-quarter basis,
identify the problem associated with it
So, what exactly is the supply side of Housing.com?
The houses that we rent as well as the plots that we sell, basically
comprise the supply side of Housing.com
What is the exact reason for this fall, Is any one of these two specified
domains a major contributor to the fall?
No, it is not specific to any domain, it is common in general to both the
domains.
Are there any more products of Housing.com which are facing a fall
in the supply side?
Are our other competitors like 99 acres, facing the same issue?
Are we facing any issues on the legal front or some government
restrictions, due to which we are not being able to list properties from
our side?
Is this any seasonal trend? Was this fall observed last time in this season
too?
Coming to the internal factors, was there a major change like some other
product like makaan.com being launched and the entire audience shifting
to the other product from the existing product, basically internal
cannibalism?
Yes, recently a law was passed in the assembly for the southern states
which stated that any rental property can only be dealt with through
government authorised personnel. This is a new step for government
authorisation.
No, currently we have to focus only on these two.
Since when are we experiencing this fall and is it observed in some
specific parts of the country like north or south India?
This fall can be seen in the last few quarters and yes, it can be
predominantly seen in the states in the south.
Is this problem observed with specific users, like are the new users not
listing on our site or the existing users have stopped listing? Also based
on the demographic data available, can we see anything like high-
income users are listing less or users in the rural areas are listing less?
No, we are not observing any such trend according to our data.
Now I am assuming that since housing-related work is serious so most
people must be using laptops for the same and there is not any issue
with android/ IOS devices.
Yes, you are right. It works on both android and iOS devices.
Okay, go ahead.
No, they are not facing any such issue.
No, there is no seasonal trend.
Let’s come to the solution part, I would like to analyse this problem in
two ways, one considering the external factors while the other
considering the internal factors.
In external factors, I’ll analyse the following things:
· The institutes/organisations on which Housing.com is dependent,
has that dependency weakened in any way?
· The competitors which are parallel to Housing.com
· The implied audience (the ones who are affected) of Housing.com
· The problems with the existing dealers.
RCA | HOUSING.COM (1/3)
67
69.
No, that’s notthe case.
That’s not the case either.
I agree with you. Do you have any suggestions to tackle this?
That sounds logical, thank you.
Then are there any major policy changes like an increase in the rent
percentage?
So, I analysed that, due to the new government rule in the southern
states the user experience for the users in that region is being disrupted.
They have to go through an extra step which is either arranging the
documents all by themselves or the waiting period is too long.
Yes, we can arrange pre-filled forms for this purpose and give the users
a hassle-free experience. We can also offer agents in order to deal with
long waiting periods and get our users covered.
RCA | HOUSING.COM (2/3)
68
70.
KEY Takeaways:
Approach:
Problem statement:
CASE FACTS:
Supply Side
Plots Sold
Internal
Internal
Combination
Rent changes
due to policy
External
Issues with
Dealers
Changes in the
competitive
ecosystem
Change in customer
perception/behavior
Policy
Changes
House Rent
The Supply side of Housing.com is falling on a quarter-to-quarter basis, identify the problem associated with it.
For terms like ‘supply side’ and other similar terms that have different contextual meanings, it becomes increasingly important to clarify and
understand their composition
The candidate, breaks the issue down into internal and external issues and steers the problem through that framework. Realize that this split is
MECE in nature. Whenever laying out a structure, follow similar splits which are MECE. Doing so makes sure that you don’t miss out on any
possible reason.
RCA | HOUSING.COM (3/3)
The Supply side of Housing.com
included Plots sold Houses rent
north and south india differ
significantly in their supply
business
owing to a policy change, an
additional step of government
authorization for southern steps
was mandated leading to a
dissatisfaction amongst
consumers.
69
71.
Meesho’s sales havebeen declining recently. Diagnose the reason and
suggest suitable solutions.
Thank you for the problem statement. I would like to ask a few
preliminary questions before getting into the case. What all product
segments the company is involved in?
The company has various product segments. Meesho offers products
related to baby care, casual & formal wear, home & kitchen products, and
cosmetics.
So, in the pre-purchase stage, we consider marketing and digital
infrastructure. During the during-purchase stage, we consider the
availability of products, prices & delivery, and in the post-purchase stage,
we consider customer services such as the return of items, feedback, etc.
So as you mentioned earlier, the decline in sales is mainly in casual &
formal wear and kitchen product segments. One of the main reasons
could be a change in customer preferences of product mix due to COVID.
During COVID times, as most of the working population was working from
home, there was a decreased demand for formal wear and increased
demand for casual wear and kitchen-related products.
Sure, let us look at the value chain of Meesho So there are three stages -
procurement of products and then their outbound logistics i.e. transportation
to a central warehouse, then to regional warehouses, and then delivery to
the customers. There are other areas as well such as sales & marketing,
development of digital infrastructure, rental costs for warehouses, etc. Is
there any specific area you want me to look into?
Is there any data regarding whether the decline in sales is specific to a
particular product segment?
Yes, there has been a decline in sales in the casual & formal wear &
kitchen product segments.
Since the profit is declining, there could be a decline in revenue, an
increase in cost, or a relative increase resulting in low profits. Initially, let
us assume that the revenues are declining and then maybe later, we can
have a look at the cost part.
Sure, go ahead.
Now, revenue = Number of units sold * price. Has the company changed
its prices recently?
Can you elaborate what all aspects you would cover in these three stages?
Yes, so the main reason is availability. What can you think of this?
Sure, regarding sales, we have procurement, distribution, and customer
demand, like are our customers switching to other competitors. Do we
have any information related to these areas?
Does the company sell its products all over India? Also, for how long
Meesho has been facing the decline? Is the entire industry facing the
same issue?
Yes, the company serves pan India. The company has been seeing a
decline in profits over the past year. Other competitors have not seen
much decline but Meesho has been significantly affected.
No, there were no recent changes in prices. You may analyze the
decline in the number of units sold.
Yes, the customers are not satisfied with our service and thus looking for
other options. Can you please analyze the user experience?
Sure. I would like to divide it into three stages - pre-purchase, during
purchase, and post-purchase stage. Do we have any information on
where the issue is?
Right, there has been an increase in demand for casual wear. The company
has been missing out on that readjustment and thus is falling behind. Now,
can we have a look at the cost part?
RCA | MEESHO BA (1/3)
70
72.
Yes, let’s lookinto outbound logistics. The company has to bear high
costs for orders from the north and northeast. Why do you think this is
happening?
The company has warehouses in New Delhi, Kolkata and Lucknow. The
warehouse in Kolkata has high rental costs, and connecting the northeast
region from there is a problem in itself. The warehouse in Lucknow is not
so active due to less demand but the others are quite active.
Absolutely. So what would be your recommendations to the client?
Do we have information about where the current warehouses are located?
And are they actively working?
Are there other options available in warehouses? Like, in terms of pricing
and demand?
So I can see that in this case, both the transportation as well as the storage
costs are increasing. The warehouse in Kolkata is very expensive and the
warehouse in Lucknow is very inactive thus producing very less value.
Few recommendations that I would like to give:
To match consumer demand, the company should try to readjust its
product portfolio more often.
Currently, it should focus more on selling casual wear.
Regarding logistics, to cut down costs, the company should try to
transfer its warehouses from Kolkata to somewhere cheaper(Patna).
Also, it should shut down its warehouse in Lucknow or at least give it
for lease and open a warehouse somewhere else depending upon their
demand demographics.
Considering the demand in the northeast region, the company should
look at the option of opening a warehouse in Guwahati.
There are cheaper options such as Patna but the company is reluctant
to change Its distribution structure.
Interesting. It was great interacting with you. Thank you!
RCA | MEESHO BA (2/3)
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73.
KEY Takeaways:
Approach:
Problem statement:
CASE FACTS:
Falling Sales
Price/Unit
Cost
Revenue
No of units Procurement
High costs in
North and
North-East
India
Availability
Pricing
Delivery
Marketing
Digital Infra
Return
Feedback
Procurement Distribution
Pre-purchase Post - purchase
Delivery
Customer
Demand
Outbound
Logistics
During
Purchase
availability failure due to change in
customer preference of product mix
due to Covid
problem with outbound logistics i.e high
cost for orders from north and
northeast
Warehouse rental cost high for kolkata
Lucknow warehouse not active due to
less demand
Transportation and storage costs are
increasing.
undestanding the industry and its product mix and then focusing on the right product line segment to take further approach
breaking down each stage of value chain into sub-stages for deep analyzing that where the problem is
Lowering the fixed cost i.e(rental cost of warehouse or shifting to cheaper locations) according to sales trend and readjusting
product portfolio can help to match the consumer needs.
Meesho’s sales have been declining recently. Diagnose the reason and suggest suitable solutions.
RCA | MEESHO BA (3/3)
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74.
If it's anengagement issue, we'll investigate whether it's caused by internal
or external factors.
Internal factors could include issues like feature launches/bugs leading to
frequent app crashes in this area, hardware outages related to load balanc-
ers in this city, or policy changes such as the end of incentive programs.
On the other hand, external factors might involve changes in demand, such
as drivers moving to other cities due to low business in this one.
Environmental factors like floods, public events, traffic congestion, or
government regulations could also play a role. Competition from other ride-
sharing services or PR campaigns against Lyft could be external factors.
Can you explain the issue you're addressing with Lyft drivers dropping out
of a city?
Could you clarify what you mean by "dropping out"? Is it related to the daily
active users (DAU) of drivers?
No, it's not about DAU in the sense of successfully providing rides. We're
concerned with drivers who are available to accept rides but are no longer
doing so in this city.
How will you differentiate between internal and external factors?
Is this city relatively small, and is it possible that drivers are operating across
city borders?
Yes, the city is small, and some drivers may indeed operate across city
borders, which could affect the availability of drivers in this particular area.
Have you noticed similar drops in nearby cities or regions?
Can you elaborate on the categorization process?
How are you planning to analyze and address this issue?
Is the drop in driver availability significant, and is it abrupt or gradual?
Certainly. We're observing a decline in the number of Lyft drivers actively
available to accept rides in a specific city, and it's not attributable to
typical fluctuations.
The drop is significant, and it's happening gradually over time, which is why
we're concerned.
No, adjacent cities or regions are not experiencing similar drops, which
makes this issue specific to the city in question.
We're taking a systematic approach. First, we're categorizing the problem into
acquisition, engagement, or retention issues based on driver behavior
analysis.
We'll conduct a cohort analysis of drivers in different buckets. This includes
examining the acquisition volume and assessing whether drivers who used
to operate in this city have shifted to other cities or left entirely.
Once you've identified the category, what's your next step?
To identify internal factors, we'll closely examine metrics related to software
versions, operating systems (Android or iOS), support contact rates, and
the timeline of feature releases. For external factors, we'll monitor PR
headlines, competitor announcements, demand volume, and news related
to the local environment.
Once you've identified the root cause, what actions will you take?
Certainly. We're examining various factors.
If it's an acquisition problem, it means new driver recruitment has dropped
in the greater area.
If it's engagement, it suggests that drivers are becoming available to ride
less frequently in this city.
If it's retention, it indicates that drivers are leaving the Lyft platform at a
higher-than-normal rate.
How do you plan to determine which category the issue falls into?
RCA | LYFT DRIVERS
RCA | LYFT DRIVERS (1/2)
73
75.
In summary, what'syour approach to resolving this issue?
Thank you for sharing a systematic and extensive approach to addressing
this issue with Lyft drivers dropping out of the city
We'll first determine whether the drop is seasonal and then categorize it into
acquisition, engagement, or retention issues. From there, we'll pinpoint
whether it's caused by internal or external factors and propose the
appropriate changes accordingly.
You're welcome!!
The actions will depend on the specific cause.
If it's related to a feature release, we'll collaborate with the engineering team
to either roll back changes or fix bugs.
For incentive program issues, we'll work with the relevant teams to resume or
update them.
If demand is the problem, we may offer discounts to attract more riders.
Regulatory challenges will involve engagement with government relationship
teams and local authorities.
If it's competition or PR-related, we'll devise strategies to address these
challenges.
RCA | LYFT DRIVERS (2/2)
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76.
75
Daily active userson Instagram have dropped by 20%. How would you go
about identifying the root cause?
What specific breakdowns of the DAU metric would you perform?
It's specific to Instagram, with no significant impact on WhatsApp or
Facebook.
It's been happening gradually for about a year.
Given these steps, how would you move forward?
How would you conclude your root cause analysis?
How would you utilize customer support data in this analysis?
To identify the root cause of the 20% drop in daily active users (DAUs) on
Instagram, I would follow a systematic approach. First, I would rule out
obvious reasons and then define and break down the metric to isolate the
issue.
I'd consider seasonality patterns, like the fact that weekends usually have the
highest usage and holidays see a surge in activity. Since this drop doesn't
seem related to seasonality, I would move on. I'd also rule out a broad service
outage, assuming that if such an issue existed, the company would be aware
and working on fixing it.
Firstly, I'd categorize users into new and existing, which can help isolate
issues related to the registration flow.
Next, I'd examine traffic sources, including direct traffic, notifications traffic,
and search engine traffic, as well as referral traffic from sources like FB.
Additionally, I'd assess whether any new features were deployed on different
platforms, such as iOS, Android, Web, Windows, MacOS, and more.
Finally, I'd analyze geographic data to check if the issue is localized to a
specific area.
Customer support data can provide valuable insights. If there's an increase in
complaints related to specific issues, like posts not working on iOS or Android,
it could explain why users are becoming inactive.
What about external factors? How would you consider them in your analysis?
External factors can indeed impact Instagram's usage. I would check if any
new competitors have launched or if existing competitors introduced powerful
features. Additionally, any announcements of hacks or security breaches on
competing platforms could erode user trust in Instagram, potentially causing
the decline in DAUs.
Could you share your prioritization of reasons and hypotheses based on
your analysis?
Based on the analysis, I would prioritize two hypotheses. Firstly, if lower
engagement among users of a particular age group or interest area is the
cause, I would measure various engagement metrics. Secondly, if a new
feature introduced on the app is not well-received, I'd assess the usage of
this feature compared to others.
To conclude, if the drop in DAUs has been drastic, it could indicate a sudden
change in a feature or usability. If the drop has occurred gradually over
several months, it likely means users have lost interest due to reduced
interactions with connections, irrelevant suggestions, a lack of content
generation, or difficulty in sharing new content.
Firstly, I would want to clarify a few points. Is the 20% drop in DAUs a
sudden decline or has it occurred gradually over a few months?
Is this drop observed only on Instagram, or have similar trends been
noticed on WhatsApp and Facebook as well?
Given this information, I'd like to explore potential reasons further. Could
there be a specific type of posts that users have reduced sharing, such as
a decline in picture posts or video posts?
RCA | INSTAGRAM USERS (1/3)
77.
Interestingly, CTR andCPI have increased during this time, and the usage of
the "Shops" feature has also gone up.
You're correct. We have already observed a 2% increase as things are
opening up.
Given these insights, it appears that the drop in DAUs could indeed be linked
to the pandemic, as users had fewer opportunities to share outdoor experie-
nces. As the global economy reopens, we can expect to see improvements in
DAUs.
You're welcome, and thank you for the opportunity to discuss this issue.
Mainly, users have reduced sharing picture posts, and this has been
consistent across a wide range of users.
Considering it's a worldwide drop, not specific to devices or demographics,
and has been happening gradually since April 2020, it could be related to the
COVID-19 pandemic. Users typically shared outdoor activities and
experiences, which were limited during lockdowns. Have you observed any
changes in Click-Through Rates (CTR) or Cost Per Install (CPI) during this
period?
RCA | INSTAGRAM USERS (2/3)
76
78.
KEY Takeaways:
Approach:
Problem statement:
CASE FACTS:
Candidate did a great job firstly in breaking down the potential internal issues and secondly by keeping the possibilities of any
potential external reasons as well
Candidate’s clarifying questions were on point.
Asking for the CTR or CPI to verify the possibility of COVID being the reason was a very wise line of thinking.
Users dropped by 20%
Users Geographic
Data
Seasonality External Traffic
Source
Outdoor
Activities
Notification
iOS Android
Referred
Age Group
New Competitor
Interest Area
Existing
Competitor
Various
engagement
Metrices
Weekends
New Existing
Platforms
Covid 19
Direct
Search
Engine
The issue is not related to seasonality
or broad service outag
20% drop in DAUs is not sudden
decline but has occurred gradually
over a few months
It's specific to Instagram, with no
significant impact on WhatsApp or
Facebook.
Daily active users on Instagram have dropped by 20%. How would you go about identifying the root cause?
RCA | INSTAGRAM USERS (3/3)
Web MacOS
77
MARKET ENTRY APPROACH
MarketEntry Approach
Market Entry
Company
Assessment
New Geography New Product New Customer
Segment
Is the market
attractive?
How do I enter
the market?
Implementation
Profitability Conclude
Conclude
FinancialFeasibility
ValueChainAnalysis
ExecutivePlan
Market
Assessment
Now to answer the question “How do I enter?”, the candidate
should follow the process
Target Value Chain Segment: Thoroughly understand the
target market's value chain and decide which segment of the
value chain should the company ente
Possible Barriers to Entry: It is also advisable to often check
with the interviewer about possible barriers to entry in this
market and pertinent issue
Mode of Entry: Following the completion of the above two
steps, the candidates can propose the mode of market entry.
Typical modes of entry include Partnerships, Mergers and
Acquisitions, Joint Ventures, and organic modes of entry.
Careful perusal and cost-benefit analysis should be carried
out before choosing a mode of entr
GTM strategy: To synthesize, the candidate should propose
a GTM strategy incorporating all the above-stated
information and should outline future targets and objectives
Company Product
3C1P
79
81.
Solving any marketentry case primarily involves answering the following two questions -
A market entry is a case type that includes candidates to evaluate and decide whether a client company should enter a particular market. These
cases can primarily be of 3 types-
In these cases, candidates whether the
business should expand to a new
geographical market, for example, if Tesla
should enter the Indian market.
In these cases, candidates assess whether the
business should launch new business lines into
their existing market, for example, if Apple
should start selling smartwatches.
In these cases, candidates assess
whether an improvement on an existing
product or service caters to new customer
segments who don't use the product.
Is the market attractive enough? If yes, how should the company go about it?
Through this question, the candidate assesses whether the company
should take the market opportunity or not.
To answer “Should I enter?”, there are two assessments one will have
to make – market assessment and company assessment. Company
assessment will reveal the company’s internal motivations to expand,
whereas market assessment shows the external motivations driving
expansion decisions
Company assessment: The first step after receiving any case is to
clarify about the company. This includes data like history of
previous products, launches and overall vision of the company.
Understanding the client’s internal motivations will help one solve
the case
Market assessment: The next step is to inquire into the market of
interest to understand external motivations for expansion. Is it the
market size or the potential market demand? Candidates can use a
profitability framework to judge if the market is attractive enough.
If you decide that the company should not enter, you no longer need
to answer the next question.
If you decide that it should enter, move on to the next step.
Figuring out how the company should enter the market will involve
assessing the feasibility of entering a new market for the company
– Does the client company have the financial capacities and
capabilities to adapt to and profit from the new market?
Figure out whether the client company’s financial situation can cover
investment costs. To do this, you first need to estimate the amount of
investment required.
The company’s capabilities help it secure market share by
differentiating it from other competitors in the market. Examples of
capabilities are firm-specific competitive advantages such as patented
technologies, efficient logistics & production capacities, local
knowledge, a low-cost structure, etc.
The candidate can get this data about the company from the
interviewer and then proceed accordingly. To better analyze the
position of the company, the candidate can use a 3C1P framework just
to be exhaustive in their approach.
Geography Product Diversification Customer Segment Expansion
MARKET ENTRY APPROACH
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82.
Before I proceed,I would like to ask a few questions, is that okay?
MARKET ENTRY | REDSEER (1/2)
You are working with Redseer and your client has a massive
company that has multiple businesses and they want to enter into
the business of batteries.You are expected to outline the
considerations that Redseer should keep in mind before making its
entry into the Indian market.
Go ahead.
Do any of the company's existing businesses involve battery
manufacturing, and is there any connection between
established companies entering the Indian market?
Okay so, I would first analyze the Financial feasibility of the
company. It includes analyzing the cost that is associated with
each unit whether it is setting up manufacturing facilities, market
campaigns, and other expenses and by comparing it with the
current financial position of the client company it can be assessed
if they have enough resources for the Indian market entry.
Does the client’s company already have any partnerships or
resources in the Indian market or they are planning to start from
scratch in terms of their presence?
No
Does that company need to enter any specific kind of battery
industry?
Yes, that company wants to enter into the business of EV
batteries more specifically.
What is the main goal of the client? What did they want to achieve
by entering into the Indian market for EV batteries? Are they
primarily interested in launching a product or making investments
in businesses related to the battery domain?
The client has a specialized focus on Lithium-Ion batteries tailored
for electric vehicles. They are renowned for their extensive
expertise in Lithium-Ion technology and a track record of
manufacturing high-performance batteries.
This applies to all types of vehicles, regardless of whether they are
four-wheelers or two-wheelers.
The client’s main goal is to expand their presence and establish
market share for EV batteries in the Indian market. Apart from this,
they believe that there is a significant growth opportunity for EVs
because of the government’s push toward a more sustainable
transportation system.
The client is starting from scratch and has limited partnerships
with Indian-based companies.
Whether they want to expand in the industry of lithium-ion
batteries or produce a range of different types of batteries.
Are they manufacturing any specific kind of EV batteries that are
focused on any specific type of technology?
For what kind of vehicles are they manufacturing batteries?
Okay so, what factors will you consider to assess client capability
and feasibility for entering into the market?
For that, I would consider, whether the client has the necessary
capability and resources available, and their ability to adapt
Lithium-ion battery technology to meet the needs of the Indian
market, this will includes adapting to local regulation, establishing
an efficient distribution channel and tailoring products to local
preference.
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83.
GUESSTIMATE | L.E.KConsulting-1 (1/4)
MARKET ENTRY | REDSEER (2/2)
That’s great. How would you propose the time frame for market
entry strategy?
I would consider the timing of the market event, any major
industry event, or policy change like the government considers
any policy change for the EV sector that is in favor of the
company.
If the client enters the Indian market what should be the method
of expansion that should be considered?
Considering that the client focus on the lithium-ion battery
industry and limited resources in India, so, a partnership-based
entry would be better as collaborating with local EV
manufacturers, distributors, or technology partnership would
provide a strong local presence, and would help them to establish
in even a better way.
So, how would you finalize the execution plan for the market entry
of the client’s company?
Okay so, considering all the facts, the execution plan would
involve
Retailing of objectiv
Task, responsibility, and timeline
Partnering with local manufacturer
Compressive guide for the client to follow
Automate the entire process with more manufacturers.
This plan would outline negotiation processes, technology
transfer, production setup, joint marketing effort.
Moving to probably the last question, there is a big demand for
lithium in India but people are not able to manufacture Lithium-ion
batteries, So what is your say on this?
I truly agree with that fact but in Kashmir, there are traces of
Lithium that has been found and TATA Chemical has suggested a
method for recycling Lithium-ion battery. So, in the future, there
might be the possibility that Indian companies or industries start
manufacturing lithium-ion batteries rather than exporting materials.
Good job, we can close the case here.
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84.
The client isa global multi-brand retailer and wants to enter India.
Government rules suggest that 30% of the investment should be
in the backend management. The client is looking to invest in milk
and dairy products.
What should be the total manufacturing capacity of factories to
be set up?
MARKET ENTRY - KEARNEY (1/3)
Who is the client and the industry they operate in?
The client is a global company engaged in the manufacturing and
retailing dairy products.
What kind of product does the client want to sell?
The client wants to sell skimmed milk.
Who are the main competitors in this market?
The main competitors are retailers such as Reliance Fresh, which
sells vegetables and dairy products.
(Having completed the 3C1P questions, I started questioning to
create a structured approach.)
How many supermarkets are we targeting in India & what are their
sales?
There are 50 hypermarkets with an average sales of 1 crore rupees
per month and 500 supermarkets with an average sales of 10 lakh
rupees per month.
The spoilage is 5% in hypermarkets and 10% in supermarkets.
How much retail capacity does the client need to meet the
demand?
The client wants to occupy 20% of the space in hypermarkets and
10% of the space in supermarkets for their product.
Can I assume the price of each skimmed milk to be 60/litre?
Yes go ahead.
So I would be dividing the entire sales / 60 to calculate the milk
quantity required
Total sales:
Hypermarket: 50x1cr
Supermarkets: 500x10 lakh
2. Calculating the production capacity considering the additional
reserves for spoilage and the capacity to be occupied in
supermarkets & hypermarkets and summing them up:
In hypermarkets: 50cr x(1+5/100)x20/100
+
In supermarkets: 50cr x(1+10/100)x10/100
Dividing the calculated number by 60 we get nearly 3Mn Ltrs per
month
That looks absolutely right. Should the manufacturing capacity be
consolidated or fragmented?
Should we consider the proximity of retail markets to the
manufacturing factories?
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What is the percentage of spoilage for milk products in these
supermarkets?
85.
How does thisrelate to the question?
MARKET ENTRY - KEARNEY (2/3)
I considered the pros and cons of consolidating or fragmenting the
manufacturing capacity.
The decision to consolidate or fragment the capacity depends on the
geography of the markets and the factories.
If the factories are located near the markets, then it would be more
efficient to consolidate the capacity and reduce transportation costs
and spoilage risks.
If the factories are located far from the markets, then it would be more
effective to fragment the capacity and distribute it closer to the
markets to ensure freshness and quality.
Very well, that makes sense.
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86.
No. of Supermarkets
No.of Hypermarkets
No. of Markets
KEY Takeaways:
Knowing the company's current situation and goals is crucial in any market entry case.
Using 3C1P approach for clarifying Questions is important for overall understanding
LOCATION OF THE MARKETS IS IMPORTANT FOR DECIDING THE FACTORIES SHOULD BE FRAGMENTED OR CONSOLIDATED.
Having industry-specific knowledge comes in handy as it helps you access the market situation more
comprehensively and calculate the market potential solar more accurately.
the client is global multi-brand retailer and wants to enter India. Government rules SUGGEST
that 30% of the investment should be in the backend management. The client is looking to
invest in milk and dairy products.
Efficiency
Targeted Market Share
Market
NOTE: Considering the spoilage percentage in final numbers.
Approach:
Manufacturing capacity of the factory
No. of Markets
case facts
The client is a global multi-brand
retailer with an international presence
and is looking to invest in milk and
dairy products.
Company wants to enter in skimmed
milk market
Spoilage % of milk in milk industry is a
major number to be considered
Geographical locations of the markets
is very imporant for such industries’s
product.
MARKET ENTRY | KEARNEY (3/3)
Sales/market
problem statement:
85
Spoilage % of milk
87.
I just hada few preliminary questions, to begin with. Starting off
with the internal factors, I would like to know more about the
German company. Where all does the company operate from, and
what are its core competencies? How far along is it in the know-
how of constructing and operating solar panels? Does it have any
existing business partnerships or infrastructure in India?
MARKET ENTRY | KPMG (1/3)
Got it. Moving on to my next question, what exactly is the scope
of the deployment? Is it supposed to be for residential,
commercial, or industrial purposes?
As a Consultant for a German energy supply firm looking to
venture into renewable sources of energy like photovoltaics, you
have to analyze the investment opportunities of solar panel
deployment in the Indian market and provide an initial Go or No-
Go recommendation based on your analysis.
Sure. To answer your questions, the company is present in
international markets with plants all around the world. It has
expertise in the development, installation, and operation of all
kinds of renewable energy sources and has successfully tested
and deployed several solar panels across Europe. It does not have
any business networks, partnerships, or assets in India.
The company wants to start by deploying the panels in the
industrial sector for the time being.
So, when we say a solar panel, I wanted to understand if I should
include only conventional solar panels in the analysis, like rooftop
and groundmounted ones, or floating solar panels, as well?
How will this affect the decision?
floating panels is low, and the investments are high, but it’s the
other way around for conventional solar panels.
Fair enough. Let’s focus on only conventional panels for this case.
Great. Moving on, as far as I know, the technology readiness of
conventional solar panels is high in India since India ranks 5th in
global solar power deployment. This means that there won’t be
any RD necessary for market entry. Is this right?
Yes. Go ahead.
So, I wanted to get a grasp on the costs of conventional solar
panels to know the market better. These costs depend on a lot of
factors like-The type and issues of the roof or surfaceEnergy
consumptionThe type of technologies used in the system and its
installationSize of the installation. Since we are currently going to
focus on industrial deployment, the end customers are going to be
energy consumers like companies, public facilities, and industries
with grid providers and distribution companies as intermediaries. I
have some more assumptions about the external market factors. It
would be great if you could validate them as well.
Sure.
So,India is within the top 5 countries in terms of the magnitude
of energy consumption, with a strong focus on moving towards
carbon neutrality by 2070 with coal phase-out, nuclear power
reduction, and a strong focus on renewable energy sourcesThere
is a pipeline of renewable energy projects being planned by
multiple multinational companies providing quite a strong
competition.There are a lot of companies and private individuals,
as well as government incentives like M SIPS, that provide a
favorable environment for investment in renewable energy
sources in India. Right?
From what I know, conventional and floating panels both have
different capacities and investment costs, The capacity for
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88.
MARKET ENTRY |KPMG (2/3)
Yes. Solar energy is a very crucial technology for India’s
decarbonization plans, and the government is providing several
PLIs and subsidies for incentivizing the adoption of solar power. In
fact, investments in the renewable energy sector in India have
surged more than 125% in the year 2022. Let’s do a quick
estimation of market potential then, shall we?
Sure. So, for the market potential solar, I need to find the
conventional solar panel potential in 2050 in India, right? Cause
that is the standard metric for market potential solar in the energy
sector.
Right. So, what all data do you need to calculate the market
potential?
Iˆ
d need to know theŠ-
land-use estimate for solar energy in 2050 in Indi
ŒThe approx area of utilization for conventional solar panels for
industrie
Number of solar panels per square km that can be installed
and,‡
The average capacity of an industrial solar panel
Great. So, Consider the high-side land use estimate for net-zero
to be 75,000 km2 for solar, with 95% area for conventional solar
panel systems. 8 solar panel systems can be accommodated per
km2. Each system has an average capacity of 6.4 MW.
Now that you have assessed the future market potential, what
should be the next step?
Well, after analyzing the problem across various qualitative
assessment factors like Company, Product, Competition, and
Market, Iˆ
d like to do a profitability calculation to be able to give
the Go or No-Go recommendation.
Perfect. Please, letˆ
s just go ahead with the general approach of
how youˆ
ll do that and skip the calculations for now.
The qualitative factors show that going ahead with the investment
opportunity would be a wise decision. Coming to the quantitative
part I think conducting the profitability analysis for one
conventional solar panel system over its lifespan will ensure the
general profitability. First, Iˆ
ll find the sales by taking the product of
the capacity, which is usually taken in MWh with the price/MWh,
the lifetime of the panel. Next, Iˆ
ll find the costs by taking the sum
of investment costs and the running costs over a lifetime. Finally,
the profits will be the difference between the Sales and the Costs.
And if the profits are positive, I would suggest the Company with
a Gorecommendation
Noted. So, Area available for solar= 75,000 km2 Expected area
utilised for solar = 72,000 km^2 (95% of available area) Number of
conventional solar panel systems in that area = approx 6,00,000
(8 per km^2) Market potential solar in 2050 in GW = (6,00,000 *
6.4) / 1000 = 3800 GW According to my calculations, the total
market potential solar for conventional solar power systems
should be 3800 GW in India.
Could you elaborate on the calculation of running costs over a
lifetime?
Sure. So the running costs over lifetime is the product of the
running costs per annum and the lifetime of the panel. The
running costs per annum comprise of fixed costs like leasing and
insurance costs and variable costs like operating maintenance
costs. If thereˆ
s anything else that youˆ
d like to know, I would be
happy to answer.
Great. So, we have concluded that the company should go ahead
with investing in conventional solar panel deployment in India.
That would be all.
Thank you.
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89.
KEY Takeaways:
Knowing thecompany's current situation and goals is crucial in any market entry case.
Having industry-specific knowledge comes in handy as it helps you access the market situation more
comprehensively and calculate the market potential solar more accurately.
Problem statement:
Average Capacity Solar panels/km^2
Expected area
utilised
Area available
for solar
Profits
Sales
Costs
Capacity
Lifetime
Running costs
Investment costs
Conventional
Floating
Approach:
Market Potential for Solar Energy
case facts
The client is a German company
with an international presence and
expertise in developing, installing,
and operating all kinds of renewable
energy sources
It does not have any partnerships/
business networks in India
Focusing on the introduction of only
conventional solar panels in the
Indian market for the time being.
Solar energy is a crucial technology
for India’s decarbonization plans,
and the government is providing
several PLIs and subsidies to
incentivize the adoption of solar
power.
MARKET ENTRY | KPMG (3/3)
As a Consultant for a German energy supply firm looking to venture into renewable sources of
energy like photovoltaics, You have to analyze the investment opportunities of solar panel
deployment in the Indian market and provide an initial Go or No-Go recommendation based on your
analysis.
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90.
Your client isan ex-veterinarian backed by a sizable investment from an
investment banking unit. Through a recent survey, they became
cognizant of the gap between the supply of pet care products and the
demand for these products among concerned dog owners, with 20% of
the dog owners opining the unavailability of these stores at optimal
locations. On the basis of this finding, the client wants to set up a pet
store in Delhi. For that purpose, you have to assess the following two
questions
What’s the market size of the pet owners’ market in Delhi, and would it
be feasible to focus vertically on the dog owners’ market or should we
cover all the different pet owners horizontally
How should the client enter the market?
Sure.
Any domestic animal owned for non-commercial purposes like dogs,
cats, etc.
You can consider households having pets of all income brackets and
pet centres where animals are taken care of collectively.
You can do it on an annual basis. Correct, Please go ahead.
Yes, it does sound fair.
Sounds good; please go ahead.
you can take that 80 - 20 instead.
Makes sense; please continue.
May I go ahead with a few preliminary questions?
What exactly is a pet for the reference of this case?
Whom can I consider as pet owners?
For what timeline or duration should I find the market size?
Ok, to find the required market size, we need to find the product of the
price each customer bears annually and the total volume of the
customers in Delhi. So let me start with finding the latter one first.
Sure, so taking the population of Delhi as 2 crores with a split of 70% to
30% for urban and rural, respectively.
Ok, now in the rural section, considering the income factor and low
standards of living, we can assume the volume to be negligible in this
section as owning a pet accounts for leisure expenses which exceed
their affordability. For the urban region, we can again split it into a lower
class, middle class and upper class, with each having a share of 20%,
60% and 20%, respectively. Since we are considering the urban section
here, we can consider the average household size to be 5, so the
number of households in the lower class will be
(2 crores)*(0.7)*(0*2)/5..which comes out to be around 6 lakhs
households, and similarly, for middle and upper class it comes down to
17 lakhs and 6 lakhs households respectively.
Now, considering factors such as leisure time and expenses,
maintenance costs and income levels, would it be fair to assume that
5% of households lying in the lower class have pets, 10% of
households in the middle class and 20% of households for the upper
class.
Ok, so after calculation, the number of households that own pets
comes down to 30K, 1.7 lacks and 60k for lower, middle and upper
classes, respectively. Again the number of pet centres will be
insignificant in comparison to the this figure, so we can simply
increase the final value by 2% to cater the gap occurred, is that fine?
Alright, now i will move forward with the cost incurred by each individual
annually,
The main expenses can be divided into procurement cost and
maintenance costs.
For procurement would it be correct to assume 10k rupees for the lower
and middle class whereas 15k for the upper class considering that they
can afford pets of better breed.
MARKET ENTRY | DOG OWNERS’ MARKET (1/4)
89
91.
Sounds good.
Ok, nowfor the maintenance part the major costs incurred account for
food expenses, self care products and other accessories like toys, etc.
Can i know the cost of few of these products to move ahead with
calculations?
You can take a good assumption here.
Alright, so let us assume for the middle and lower class the food cost is
nearly 30K per anumn, self care cost is 10K and cost for accessories is
5k. And again as the upper class has higher affordability limits, they will
opt for premium products so cost split for the upper class will be 50k ,
20k and 10k for food, self care and accessories respectively.
What are the resultant maintenance costs?
For lower and middle class the overall maintenance cost comes down to
INR 45K annually and for upper class it is 80k. Now, considering
procurement happens once in ten years for each households so the final
cost incurred per household boils downs to INR 46k for lower and
middle class and INR 82k for the upper class. So the final market size is
INR (30k)*(46k) + (1.7 lacs)*(46k) + (60k)*(82k) = 141 crores which
after increasing by 2% comes down to nearly INR 144 crores (final
market size). And instead of covering it horizontally by incorporating
every animal, it would be more feasible to focus vertically on the dog
owners comprising nearly 45% of all the kind of pets owned. So the dog
owners’ market would be around 45% of the total market size which
would be nearly INR 65 crores annually.
Good job. So, is the market attractive or not?
I’d first like to understand the market share that we’d like to accomplish
of the entire dog owners’ market and the competitors’ individual market
shares.
Sure, you can assume 2% market share, since the market is very
fragmented and legacy brands have a lot of customer loyalty.
Understood, thus the potential revenue that we stand to make would
turn out to be 2% of 65 crores, which is 1.3 crores on an annual basis.
Additionally, I’d like to enumerate the costs associated with the venture. I
hypothesize that shop rent, employee wages, electricity expenses, etc.
will fall under fixed costs, which would roughly account and certain
variable costs would be those associated with materials like pet food,
pet care products, etc. In total, these would be somewhere around 4-5
lakhs on a monthly basis. Should I proceed with this assumption
Given that a lot of dog owners have a reasonable dispensable income,
this seems like a fine estimate. You can proceed with the same.
Additionally, Consider the fixed investment to be around 10-20 lakhs
incorporating marketing , brand-building investment, etc.
Correct, so the profit that we can make is Revenue - Fixed Investment -
Running Costs. Thus, the bottom line is around 50-60 lakhs on an annual
basis, which seems very promising
Great, so how do we go about entering the market?
Before I begin suggesting that, are there any barriers to entry that might
pose a challenge.
Yeah, so we were thinking of setting up the shop in a posh locality which
a good percentage of dog owners’ reside but there are existing shops
there that have nice brand loyalty amongst the customers. Additionally,
as of now, we don’t have any differentiating factor that would help us
accomplish the market share that we target
In terms of establishing our presence in the posh localities, we could
consider marketing our pet care facilities and distinguishing them as
premium. Additionally, we could collaborate with pet grooming stores
(which this posh populace frequents) in order to get access to this
populace. There would be other spots like parks or dog races, etc. We
can identify them and either partner with such events or use these
events as a marketing opportunity
Great, what about the other customer segments? Economy buyers and
collective centres?
MARKET ENTRY | DOG OWNERS’ MARKET (2/4)
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92.
For collective dogcentres, we can come up with schemes to offer them
products in bulk at a discounted price initially to build trust and make the
customer acquisition process hassle-free. As for the economy buyers,
price would be a significant factor. So, that should be looked into to
smoothen the acquisition process. Additionally, since the client is an ex-
veterinarian, they already have a good network in pets.
So, how should we enter?
Given that upon assessment, the market turned out to be attractive. I’d
recommend entering the market organically, since the client already has
a broad network in the dog community, owing to his years of
experience working as a veterinarian. We could collaborate with certain
pet-grooming centres to establish a better market presence.
Good job, we can close the case here.
MARKET ENTRY | DOG OWNERS’ MARKET (3/4)
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93.
KEY Takeaways:
Approach:
Costs
Market
Size
Market
Share
Fixed
Investment
Priceper
Product
Running
Cost
Revenue
Profits
Profits = 2% of 65 Cr - Fixed Investment
- Running Cost
Profits = 60Lakhs/Annum
Customer
Segments
Collective pet
centre, economy
and premium
buyers
Organic
leveraging the
client’s existing
network
Collaboration with
pet grooming
stores and
altering pricing
Mode of
Entry
Product
Differentiation
Market Entry
Problem statement :
The decision of vertical/horizontal entry was made basis the sheer proportion of the dog owners’ market from the pet owners’ marke
Be on the lookout for subtle clues/tidbits in the question that enable you to make better/more substantiated decisions. For instance, given that
it was already mentioned in the question that the client has a strong network owing to his vast experience as a vet, we were able to propose an
organic mode of entry into the market
What’s the market size of the pet owners’ market in Delhi, and would it be feasible to focus vertically on
the dog owners’ market or should we cover all the different pet owners horizontally
How should the client enter the market?
MARKET ENTRY | DOG OWNERS’ MARKET (4/4)
CASE FACTS:
The interviewee could have either
focused on all the pet owners
horizontally or explored the dog market
vertically. Given, that the dog owners’
market is a substantial chunk of the
entire market, vertical entry was
prioritise
Marketing can be done by partnering
with pet grooming stores, which are
popular in the posh populac
Three customer segments were zeroed
in on, the collective pet centres,
economy dog owners and premium dog
owners
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94.
MARKET ENTRY |ENERGY DEVICE (1/3)
I want to begin with some clarifying questions. First of all, I would
like to understand the company's vision in launching such a
product.
I hypothesize two costs :-, Capital and Operational Expenditure.
What would the cost to the customer be for these two buckets
What is the landscape of the competitors in the Indian market?
I shall take some time to structure my thoughts before beginning
I will find the profits, the company would make from the Indian market
using the mathematical breakdown
Profit = Revenue - Cost (Fixed investment and running costs)
Cost is already given, i.e. INR 700 crore.
Revenue = market size (in volume) * market share * price per
product.
Guesstimating the market size of the energy-saving devices
Since the device requires mild to strong wind exposure, I would like to
apply a split based on geography. Could you please provide me with
information on the same?
The customer only needs to make a one-time investment of INR 1
lakh, and in terms of running operating expenses, they’re around
20% of the Fixed investment
The company realised that given the rapid surge in carbon
emissions, it is the need of the hour to cut down on our carbon
footprint to meet international goals. For that purpose, we put
things in motion for this initiative. In the process, it also wants to
become a do well, do-good company.
Got it. I would like more details about the product we plan to launch.
Our product is a sophisticated device that operates on wind
technology, i.e., converting wind energy into electricity. It is an
extreme upgrade to the traditional sources in terms of energy
efficiency. If the device is integrated on a large scale, it could
significantly lower the carbon footprint. It’s requirement is
exposure to mild to strong wind and periodic replacement of
internal fluids and chemicals
As of now, the Indian Govt. hasn't provided any incentives. But, the
company is optimistic that the future landscape wrt to incentives is
bright as EVs and solar energy devices are already incentivised
Great approach. The entire country experiences strong winds, but
they are seasonal. Some regions like Leh-Ladakh, parts of
Rajasthan, Gujrat, Maharashtra, Karnataka, and Kerala, experience
strong wind across the calendar.
The market is at a nascent stage right now and the market is
fragmented with no one having a consolidated share
Sure, go on
There are no wind energy linked incentives provided by the
Government. Are there any other incentives worth considering?
Your client is a manufacturer of electronic equipment for industrial
customers operating in the US. The Research Development
department has developed a new product -- a device that could
replace all typical energy costs using wind technology.
The estimated household price to the customer is around INR 1
lakh, with an estimated investment of around INR 700 crores.
Assess if they should enter the product into the Indian geography
or not.
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95.
MARKET ENTRY |ENERGY DEVICE (2/3)
Target market population = 35% of 1.2 bn = 0.42 bn
Also, there are, on an average, 4 members in a household
Target market household = 0.36 bn / 4 = 0.105 bn
Does this seem reasonable to you?
Therefore, if we assume the government of India has provided
the incentives in our favour, our total available market will be
0.00036225 bn households.
Our approx gross revenue = INR 121 crore
Comparing the revenue and the investment by the company, the
market does not look attractive.
To conclude, I would not recommend entry into the Indian
geography basis the following reasons. First, the consumer
perception of alternative sources (especially wind) is not very
optimistic. Next, the majority of the population resides in non-
viable based on geography. Third, the government doesn’t have
any scheme or incentive, and depending on it would create
several problems.
Further, inside each segment, some portion of the population has
potent awareness to understand the need for an alternate energy
source. Hence, a division into aware and non-aware portions can be
carried out. The affordable segment has greater environmental
consciousnesss, taking it to be around 30% of the population.
While, in the might-be-affordable segment, 15% of the population is
aware. Do I need to make any changes?
I shall apply a filter based on affordability of the device, some
households can afford the device without any incentives. In
contrast, some can afford it after government incentives, and
others cannot. The first segments (which can afford the device
without incentives) are economically more prosperous than the rest
of the areas, so the first segment, i.e. affordable group, can be 3%
of the population with an income of more than 10 LPA. The might-
be-affordable segment(who have an annual income between 6
lakhs and 8 lakhs) will account for 17% of the population, and the
rest is the non-affordable segment. Do the percentage and reasons
sounds good?
Affordable segment = 3% of 0.105bn = 0.00315 bn
Might-be-affordable segment = 17% of 0.105 bn = 0.01785 bn
Yes, it is reasonable. Continue.
No, you can continue with your assumptions.
Since, the market doesn’t look attractive. Please summarize.
Yes, seems reasonable. Kindly proceed
Conscious portion of affordable segment = 30% of 0.00315 bn =
0.000945bn
Conscious portion of might-be-affordable segment = 15% of
0.001785 bn = 0.00026775bn
Since a household needs to make a considerable investment, our
target market would be regions with strong wind throughout the
year. Such areas are among the top populated states so that I
would consider 35% of the total population in the region.
94
96.
KEY Takeaways:
Problem statement:
MARKET ENTRY | ENERGY DEVICE (3/3)
CASE FACTS
This essentially was a product
entry case, and thus, began with
the market size estimatio
The market turned out to be
unattractive owing to low adoption
and policy support for the shift to
sustainable wind energy in the
current ecosystem
Since, the requirement of the device in question was strong winds, a classification based on geography was carried out to
estimate the total market siz
While summarizing, the candidate has substantiated their recommendation with 3 reasons. It is a very good practice to
mention crisp and concrete reasons in support of your conclusion
Your client is a manufacturer of electronic equipment for industrial customers operating in the US. The Research
Development department has developed a new product -- a device that could replace all typical energy costs
using wind technology. The estimated household price to the customer is around INR 1 lakh, with an estimated
investment of around INR 700 crores. Assess if they should enter the product into the Indian geography or not.
Approach:
Indian Market
Population in
Geographical feasible
(35%)
Population in Geographical
non-feasible
(35%)
Population in
affordable segment
(3%)
Population might-be-
able-to-afford
(17%)
Population that cannot
afford at all
(80%)
Aware
(30%)
Aware
(15%)
Interested
(10%)
Interested
(5%)
Not interested
(90%)
Not interested
(95%)
Non- Aware
(70%)
Non- Aware
(85%)
95
97.
Your client, F-Mart,is the largest discount supermarket chain in South
India with 350 outlets. For several years, F-Mart has outperformed the
second-largest retailer (220 outlets) in both market share and
profitability. However, the biggest discount grocery retailer in North
India, N-Superstore, has recently acquired F-Mart's competitor and
intends to transform all 220 outlets into N-Superstore branches. The
CEO of F-Mart is alarmed by this development and seeks answers to
the following questions: Should I be concerned? How should I respond?
What advice do you have for the CEO?
That sounds acceptable.
N-Superstore operates 2,200 outlets, while its largest competitor
manages approximately 550 outlets.
F-Mart's cost structure closely resembles that of its competitors, but it
achieves higher sales per outlet.
Increased profitability could arise from either reduced costs or higher
revenues. Is there any indication as to which of these factors is
responsible for higher profits per outlet?
In that case, it is likely that F-Mart's outlets are better managed, as
the individual store owners have a greater incentive to maximize
profits.
How many outlets does N-Superstore have in the North, and how
many outlets does its closest competitor operate?
Are N-Superstore's outlets larger than those of its competitors?
MARKET ENTRY | THREAT TO THE NEW ENTRANT (1/2)
Let's commence with our analysis of the local market. I'd like to
comprehend what is contributing to F-Mart's superior profitability. Is F-
Mart more profitable due to a greater number of outlets, or does it
generate higher profits per outlet?
It generates higher profits per outlet.
Greater sales per outlet could be attributed to either higher prices or
increased sales volume per outlet. Given that we are a discount retailer,
maintaining competitive prices is crucial. It appears that the increased
sales volume per outlet is the primary reason.
Can you identify why this might be the case?
This could be attributed to larger store sizes, a wider product variety,
or more effective store management.
Store size is consistent, and the product range aligns with
competitors. F-Mart's stores, however, employ a different
management approach. F-Mart operates under a franchise model,
where individual outlets are owned and managed by franchisees who
have invested in the store and share in the profits.
You are correct. F-Mart's higher sales are primarily a result of
enhanced customer service. Their stores are cleaner, more appealing,
better stocked, and offer superior shopping experiences. We have
adequately covered the Southern market. Let's now turn our attention
to the North Indian market.
Yes, N-Superstore's outlets have an average size of 22,000 square
feet, whereas competitor outlets are 11,000 square feet on average.
This indicates that N-Superstore should be selling nearly eight times
the volume of the nearest competitor.
Close. N-Superstore's sales are approximately five times that of the
nearest competitor.
This is how I would like to approach the problem: First, I’d like to
understand the market in South India to understand how F-Mart has
become the market leader. Then I’d like to look at the market in North
India to understand how N-Superstore has achieved its position.
Finally, we can merge the two discussions to understand whether N-
Superstore's strength in North is transferable to our market
96
98.
I assume thatsales of this magnitude provide N-Superstore with
significant bargaining power with suppliers. Is N-Superstore's cost of
goods lower, resulting in lower prices compared to the competition?
To some extent, you are correct. F-Mart also faces similar labor costs.
F-Mart holds an advantage in distribution costs because it sources
more products from Southern suppliers. However, since F-Mart still
receives a significant amount of products from the North, the actual
advantage over N-Superstore is only about two percent of overall
costs.
Given that competitive pricing is crucial in discount retailing to retain
customers, F-Mart should examine its value chain from procurement
to distribution to retailing to identify opportunities for cost reduction
and offer more competitive pricing. In procurement, F-Mart can
explore negotiating competitive prices with suppliers. It may also
consider offering a more focused product selection to consolidate
purchasing power and negotiate more competitive prices with
suppliers. In distribution, F-Mart should aim to reduce transportation
costs. In retailing, exploring the possibility of negotiating lower
margins with retailers could allow F-Mart to pass on more savings to
customers. Additionally, implementing a loyalty program, such as a
frequent shopper program, where customers can accumulate points
for future merchandise discounts, could help in retaining customer
loyalty.
N-Superstore lacks brand recognition in the South. Both companies
offer similar products, though F-Mart leans more toward local
suppliers.
In fact, N-Superstore's cost of goods is approximately 15 percent less
than that of its competitors, and its prices are on average about ten
percent lower than those of the competition.
In the short term, F-Mart may remain relatively secure. Its outlets enjoy
a much stronger brand presence in the local market than N-
Superstore's, and they appear to be well-managed. However, as
consumers become accustomed to consistently lower prices at N-
Superstore, typically seven to eight percent lower, they are likely to
shift their loyalty to N-Superstore. The CEO should indeed be
concerned about losing a significant market share to N-Superstore in
the long run.
I believe I've gathered enough information about N-Superstore. Now,
let's explore N-Superstore's potential to succeed in the South. First, I'd
like to understand if N-Superstore has established a strong brand
presence in our market and whether it offers similar products to F-
Mart.
Is there any reason to believe that N-Superstore's operating costs in
the South will exceed those of F-Mart? Specifically, could N-
Superstore face higher labor costs, leasing costs, or increased
expenses related to raw materials or distribution? N-Superstore may
incur higher distribution costs as it needs to transport products from
its Northern warehouses to the South.
All these factors suggest that N-Superstore will likely maintain a
substantial price advantage over F-Mart's outlets, if not ten percent,
then at least seven to eight percent.
I concur with that assessment. Could you please summarize your
findings?
Could you suggest potential strategies for F-Mart?
Thank you. All of your suggestions are intriguing and warrant
further analysis.
MARKET ENTRY | THREAT TO THE NEW ENTRANT (2/2)
97
UNCONVENTIONAL | DALBERG(1/3)
Your client is a large cancer hospital in Mumbai. They have been
facing the problem of overcrowding outside the hospital for 6-7
months now. Identify the reason and suggest recommendations for
the same.
It’s located in the outskirts of Mumbai and its major customer
segments belong to the middle to upper class.
That change must have led to an increase in the size of staff as well,
correct?
That’s interesting. I’d now like to shift my focus towards the staff at
the hospital. What’s the staffing like at the hospital?
So there’s a shift change occurring at 5 pm during which there is a
rapid influx of Shift 2 Workers and an outflux of Shift 1 Workers.
Does the staff also enter and exit through the reception area itself?
So, given that there was a rapid increase in crowding outside the
reception area, my initial hypothesis is that a lot more patients may
have started visiting the hospital. Did the hospital shift its medical
focus or introduce a new therapy around 6-7 months ago?
Alright. I’d like to understand more about the problem now. Did this
overcrowding start suddenly or gradually? What is causing this
overcrowding, pedestrians or vehicles? What’s the typical mode of
commute to the hospital for the patients? Does this problem arise
at a specific time of day?
Any particular part of the hospital and its surroundings where this
overcrowding typically happens?
Yes, the patients are spending more time walking to the
hospital and getting an appointment
Got it. That's all for the clarifying questions. I’d now like to look at the
journey of the patients leading up to the hospital and identify the
points where the crowding is happening.
1.) Driving to the hospital
2.) Parking the car
3.) Walking to the hospital
4.) Getting an appointment at the reception
Yes. The hospital started admitting patients of lymphoma and
melanoma around 8 months ago.
Right. The hospital had to increase its staff size by approximately
20%.
I’d like to begin by asking a few clarifying questions first. Where is
this hospital located and what customer segment does it
primarily cater to?
This issue started gradually and escalated very quickly within a few
weeks. It’s mainly due to a large number of pedestrians and the
patients typically visit the hospital in a car. The overcrowding is at
its peak during 4-6 PM.
The crowd is concentrated right outside the reception area and the
pathway leading to it from outside the hospital.
The crowd inside the reception could be causing the crowd along
the road by slowing things down. So, I’d like to first look into that. I
hope that’s fine?
Sure, go ahead.
So the hospital employs people in 3 shifts of 8 hours each; 9 am -
5 pm, 5 pm - 1 am, and 1 am - 9 am So the hospital employs people
in 3 shifts of 8 hours each; 9 am - 5 pm, 5 pm - 1 am, and 1 am - 9
am.in 3 shifts of 8 hours each; 9 am - 5 pm, 5 pm - 1 am, and 1 am
- 9 am.
Do we have any insight on where the patients are spending more
time during their visit or where they are witnessing big crowds?
99
![MECE and MATHEMATICAL FORMULATION
Often in different case themes, we have to drive the interview in a specific way to get to the root cause or the localised issue at hand. Various tools
can be used to this end that enable us to get to the problem in a structured and reiterative manner.
The MECE principle suggests that in order to break any problem, it should split
into smaller buckets that are
1. Mutually Exclusive: All subproblems fit into different categories, i.e. they
should be independent of each other.
2. Collectively Exhaustive: All subproblems put together should completely
define the scope of the original problem.
MECE (Mutually Exclusive and Collectively Exhaustive) Mathematical Formulation
Cost of travelling from Delhi to Kolkata
Cost of one liter petrol
(Rs./lt) * *
Mileage
(lt/km)
Distance
(km)
Consider the case of estimating the number of cycles in India. The
population of India, in this case, can be split on the basis of various age
segments such as 0-18, 19-45, 45-60, 60+ to simplify the challenge of
figuring out the proportion of the population that owns cycles.
Similarly, MECE splits can be drawn on the basis of gender, rural/urban,
product segments, etc. depending on the case at hand.
MECE
0-18 19-45
60+
46-60
0-20
18-45
40-60
60+
Not MECE
The process of mathematically breaking down various case-
affecting factors to quantitatively gauge them and drill down to the
root cause of the problem in a highly precise manner.
So is possible due to the MECE nature of mathematically breaking
down things into formulae, where each individual component can be
assessed independently and can hence assist the interviewee in
going a level deeper in an efficient manner.
If one were to estimate the cost of travelling from Delhi to Kolkata,
they could break the cost into [Cost of one liter petrol (Rs./lt) *
Mileage (lt/km) * Distance (km)]. Further, each of the three
components can be assessed individually to analyze which factor is
causing change in costs.
EXAMPLE
EXAMPLE
Why MECE?
What is MECE?
Being MECE in their approach helps candidates in breaking complicated
problems into simple chunks assisting them in identifying the root cause
without the possibility of any duplication.
26](/p?url=https%3A%2F%2Fimage.slidesharecdn.com%2F1697625183036-250713165605-c5afe280%2F85%2FCasebook-THE-BUSINESS-CLUB-IIT-BHU-VARANASI-27-320.jpg&__src=https%3A%2F%2Fwww.slideshare.net%2Fslideshow%2Fcasebook-the-business-club-iit-bhu-varanasi%2F281563583%2362&__type=image)
![Correct.
Your figure is slightly off, but I liked your approach. This is all for the
interview, thank you for coming in.
Now, I’ll split these segments into their respective fitness consciousness
buckets and calculate the approximate number of mangoes consumed in
New York in a given month.
[Calculation]
So my calculation tells me that 10.75 million mangoes are consumed in
New York in a given month
Thank you.
GUESSTIMATE | LEK 2 (2/2)
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