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![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.
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
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?
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![I want you to estimate the quantity of paint used in India in a year.
Okay, first, to understand the problem better, I would like to ask a few
clarifying questions.
Yeah, sure, go ahead.
Are we considering wall paints only or all kinds of paints?
For this case, we are looking for wall paints only.
And can I assume that houses and stores are to be painted?
Yes, you can assume that.
I also wanted to ask how many surfaces are to be painted
5 surfaces are to be painted, considering 4 walls and 1 roof.
Okay, so I will assume that the total population of India is 100 crore, of
which 10% are rich, 50% are middle class, and 40% are poor.
Furthermore, I’ll split them on the basis of number of houses.
Let’s say the rich population own 2 houses each. 50% of the middle
class population own 2 houses, 25% own 1 house while 25% don’t
own any house. Finally, 20% of poor population own 1 house while
80% don’t own any.
Does this segmentation sound fine to you?
Yes, you can go ahead with making those assumptions.
Alright, thanks. To get the number of households, I will assume that
there are 4 members in every rich family, 5 in every middle-class
family, and 6 in every poor family. And for shops, I will assume that
there is 1 shop owner in every 20 households.
Yes, fair enough. You can move ahead.
Great, moving ahead, I’ll take the average size of each wall to be 12
sq meters and of each painting, stroke to be 100 millimeters. And I
will assume that each house or store is painted once every 6 years.
Sounds great!
Finally, to get the volume of paint used I’ll solve this-
[(No of surfaces) x (Area of each surface) x (Size of each stroke) x
(No of houses + shops)] / Probability of a paint job in a year
= [(5) x (12 m2) x (100 mm) x (18.33crore + 5crore)] / 6
= 233.3 crore m3
GUESSTIMATE | MEESHO BA (1/2)
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![KEY Takeaways:
In case the interviewer doesn’t
mind a simpler approach, the
candidate can choose to assume
the stadium to be an inverted
cone cut at the ti
The candidate can then calculate
the volume by first evaluating the
volume of the whole original cone
and subtract the volume of the tip
to get a good estimate of the
volume of the stadium
Approach:
Problem statement : How many tennis balls can fit in a stadium?
Alternate Approach:
Total Available Volume
Volume above the pitch
[Formula]
Volume of stands
[Formula]
Number of balls= (Total Available Volume * Packing
Efficiency) / Volume of One Ball
Volume of showcase
area at ground floor
[Formula]
In cases which are related to area, volume, customers related to revenue per customer, value chain based on import/export, it
is easier to use a bottom-up approach.
For the main approach candidate must try to fully explain the formula and all its components in detail, so that the interviewer
stays in the loop of things.
While asking clarifying questions, it is good to cover as many things as possible. Furthermore, the interviewer might even
provide additional information which helps the interviewee a lot
GUESSTIMATE | OYO BA (3/3)
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![Correct.
Your figure is slightly off, but I liked your approach. This is all for the
interview, thank you for coming in.
Guesstimate | L.E.K Consulting - 2 (2/3)
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.
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![Market Entry | Model Case - e2W (2/3)
Yes, that seems like a detailed enough analysis. Now you can suggest
some recommendations, and we can close the case.
I will rule out the below-poverty income category because affording an
electric 2-wheeler would not be possible for them. I will further split the
remaining 3 categories based on direct and indirect competitors
pertaining to the traditional 2-wheeler companies and use that factor to
understand the adoption of electric two wheelers. The lower income
bracket has lower environmental awareness and is also price-conscious.
The upper middle class has relatively more disposable income and is
more environmentally conscious. Finally, the upper class can easily afford
these vehicles. Based on these, the calculation would look as follows:
What is the cost of the economy electric 2-wheeler that we’re offering ?
Given our analysis and that we are pitted to make profits once we enter
the markets and given the other favorable conditions listed above, I
think it will be a feasible option for us to enter the market. Do you also
want me to map out a detailed GTM strategy along with pricing,
competitor pricing, and the geographies (states) we should enter?
Ok, that seems nice. Please proceed ahead.
Yes, I could have added the age split in the urban population to make it
more precise, as the age group of 18-25 is more environmentally
conscious.
No, that wouldn't be required, and we can close the case.
Assume that we make substantial profits and the number and our bottom
line is financially feasible. How would you approach the problem in that
case, and what would be your recommendations?
Yes, this number seems fair. But do you want to talk about certain
elements you could have added to make the calculations more
accurate?
I would like to whip out a quick analysis of the facts we have discussed in
the case today.
Our strengths are:
We already have a customer base that is loyal to us and knows our
brand name due to our electric buses
We have infrastructure that we can leverage to manufacture these
electric 2-wheelers
Specifically, in the electric 2-wheeler segment, the Government's
policies are very favorable and there are heavy subsidies
Typically, the 18-25 population is the country's most environmentally
conscious and voluminous population. This is something that we can
leverage.
Our weaknesses are:
The upfront costs is very high
Also, our first mover advantage can be disadvantageous as we do not
have competitors to benchmark our price with, also it will make it
difficult for us to negotiate with OEMs as there are no other
competitors
The EV market in India is very nascent and not very well established,
even though the perception is still changing.
Does this seem like a detailed enough analysis?
Total urban population: (30/100 x 1.2billion)
Total number of households: ¼(30/100 x 1.2billion)
Total households in lower middle income: ¼(30/100 x 1.2billion) x 25/100
Total households in upper middle income: ¼(30/100 x 1.2billion) x 25/100
Total households in upper income: ¼(30/100 x 1.2billion) x 10/100
Total E2W market: 10/100[¼(30/100 x 1.2billion) x 25/100] +
30/100[¼(30/100 x 1.2billion) x 25/100] + 40/100[¼(30/100 x 1.2billion) x
10/100]
= 12,600,000
Does this number seem fair to you?
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IIT BHU B-Club Casebook 3 (2022).pdf
Here are the key steps I would take to solve this problem: Recommendations: 1. Optimize transportation routes to reduce fuel costs by 15% 2. Reduce inventory levels by 20% through JIT model 3. Launch new products in untapped markets like rural areas 4. Improve distribution channels like e-commerce to reach new customers 5. Restructure sales team incentives to focus more on cost control Implementation: Develop detailed plans and timelines for recommendations. Assign responsibilities and track progress. Provide ongoing support and course correction. This is a basic structure consultants follow to solve client problems in a systematic manner. The key is to break down the problem statement, analyze critically using all
