Consulting Bootcamp Notes
Consulting Bootcamp Notes
Consulting Bootcamp Notes
Coaching:
Weve figured out how conventional thinking exists to digest as quickly as possible how to
make things work
ASSESSMENT FOCUS
Listening
Critical Thinking
Verbalization
90% of failures - Not listening to the question / information provided
Not using the info provided
All cases are verbal exercise - majority is based on acquiring information and working with that
info
For communication - take the lessons form boot camp and apply it to your interviews/classes
One big problem interviewers speak of:
Theyre trying to turn a switch / be a certain way, to get an offer. It takes time to develop as a
person and effectively communicate and be precise
Your efficiency and effectiveness will be critical - youll look smarter; look like a consultant with
practice
NOTE TAKING
Get a standard 8.5 x 11
Draw a line in the middle
Do not bring copy paper to an interview
16 hours a day
Variable side
Changes in variable costs - from what they are today
Both cost reductions / cost increases
Creatively talk about existing process - time / production etc.
CASE PARTIICIPANTS ANSWERS
COACHING: you can be far more successful in life - once you learn this disciplined thinking. It
feels like a game, but its meant to evaluate your discipline to become a CEO.
Q: tell me what costs do you think will go up/down
A: Fixed costs(already stated)
Var costs.
etc
CORRECT ANSWER: Lets not make a laundry list of items - dont list all the ideas you have, just
the best idea you have
MCK has to find an excuse to get rid of you
Easiest elimination - made a laundry list, sounded unstructured
Heres what I want you to do:
You wanna immediately say, Im going to evaluate into two parts:
1. Verbalize that Mr. interviewer - i want to look at cost increases(dont forget this !)
2. Costs decreases
Just mention Materials(COGS)
Labor costs(DL)
SG&A
Coaching: MCKINSEY doesnt have smart people
Just regular people - who are empowered to do amazing things
INCORPORATE IN YOUR INTERACTION - ALL YEAR AROUND in class as well
REMEMBER: Basic math only/your objective is not to do the math right, but to do the math and
explain that the math correctly and easily
CASE INFO:
Material costs - will go down by 50 cents / metre
Inventory cots - will go down by 50 cents / metre
Labor costs - will go down by 25 cents / metre
All costs increases:
Utilities + Training + Inks / dyes - 1 EUR / m
Q: From this information - calculate the actual change in cost structure?
A: What is the volume?
We produce 10 million meters / year
Life in machine = 10 years = >depreciation costs =xx, its directly symmetrical to the cost
structure
CORRECT: Theres no change in cost structure - its just testing your knowledge. The depreciation
will bridge the missing piece
The focus of the question, is to make sure that youre not forgetting that
OUR ROI BASED ON THE COST STRUCTURE IS ZERO (SAY IT OUT LOUD)
CASE INFO:
New technology will actually give us a new format that will appeal to new customers
New carpet = $20/ metre (+25% from before)
Q: Incremental revenue from producing these new patters?
$20 is the new price for the product
=>$16 for the old price
(So you estimated the cost ?)
COACHING: You have to verbalize the basics = say the basics about your mathliterally the
basics about whats going on
CASE INFO:
The high end market currently buys = 70 Mln
Benny gets = 5%
In addition to that, a large portion of existing customers = 30% revenues are going to switch
from old to new product
COACHING: 70 Million meters - not customers (units are important)
$4 x cannibalization = 12 Mln
82 Mln = final answer for incremental revenue (DETAILS TO BE WORKED BY CANDIATE)
Incremental revenue is given
Mr. Interviewer - what Ive observed that our volume is increasing a little - our revenue is
increasing significantly
Q: What are the risks in taking this?
A: We have a non-incremental cost structure
It sounds too good of a deal - let me tell you about a few things which make this look so
What are the risks that could damage the zero change in cost structure hypothesis (snifftest..makes NFC)
Also, sensitivity analysis - that the market is 70 Mln
Maybe its not the case
Consumer taste changes
GENERAL END NOTES:
Engagement managers do the interviews
Final rounds: Some partners do an unstructured case - based on a real client engagement
If you dont get up that curve, youre gonna be rated below average
If you exhibit these faults - youre gonna be told whats wrong, and how to fix it
When they wanna fire - A partner will take out to a nice dinner and tell you that youve got 6
months
Associates who leave McK are future clients - but when youre actually an associate, youre gonna
get your ask kicked
THINGS TO DO:
Prep lounge
Mgmt consulting club
You will burn out and feel defeated if you do it by yourself
More cases tomorrow
Think about what else can I get a travel agency - hotels, cars, FX, trip interruption insurance
Put yourself in the shoes of that industry and think about the drivers
Q: What could be the answers?
A: The hypothesis that was stated first - were going to sell other products is essential to this case
CASE INFO:
Sales agent costs - 60K EUR / year
In addition to this - 20% / year as benefits
Next year the salaries are going to go up by 10%, and their benefits are going to decline by 10%
CLARIFY FACTS
Q: I want you tell me what their hourly rate is next year?
Cost = 60 + 12 = 72
(Given that they work 40 h / week - 50 weeks / year)
Total hours =40 * 50 = 2000
Hourly wage = 36/ hour currently
NEXT YEAR:
Cost = 66 + 10.8 = 76.8
Hourly wage = 38.4/hour
Verbalize the answers to Mr. Interviewer
COACHING: You guys did it the interview gave it to you - so that youre sitting there and
struggling with the math; Im gonna verbalize the math for you in a different manner
First thing - you identify the # with the most zeros aka 60K
How many hours are we working per year?
Work with hourly wages - get rid of all the 0s
You have to believe that these calculations are easy - then work with them
At one point the interviewer says - put your pen down and verbalize the answer to me
How important is the answer - well its important/ if you get the calculation is wrong, Ill give you
The interviewer guided you towards a smart hypothesis - but perhaps the hypothesis is wrong
The client cant solve the problem - even though they are an expert in their business?
Because they have tried solving the problem - and it didnt work
Or try and convince Wall Street by hiring Mck and convincing them
Youre gonna get tough ass problems and you have to solve them
IN SUMMARY:
FOR THE COSTS: FTE reduction
FOR THE REVENUE: Sales channel mix modification
Working hard is never enough - by yourself especially
If you can follow patterns, and make linkages - youre set
Theres no really smart people at Mck. Its really the process with which you think that empowers
you and affords you to think clearly
BREAK
[email protected]
HOW DO YOU APPLY THIS IN THE CLASS?
Case info:
Lets assume youre a consultant for Bavarian chocolate company
It has recently added a new chocolate
called nougat filling chocolate
Its a light sweet filling, used at specific time of the year
at easter, christmas, halloween
People wanna buy more of it - given that bavarian chocolate can make more of it
Create a manufacturing strategy to increase production of nougat
PROBLEM: Whats the best way to increase production?
Case info:
They want to manufacture more than they can make at their moses lake factory, washington
Demand exceeds production at this time
You can store this product
They keep selling this product after the holiday
The packaging is different - but costs are not
Q: What factors might bavarian consider - in determining in creating more capacity?
A:
Evaluate the demand
Production
Costs
On the demand side: aggregate annual amount demanded
average amount that is demanded each year
spike in demand during holiday season
for production - our ability to product on average and the peak easter/halloween production
levels aka spikes
Further in the value chain - look at the four additional things
Costs - ways you can increase production and the associated with increase production
increasing shifts
adding lines
outsourcing
CASE INFO:
The current demand for nougat = 55 Mln pounds / year
How much capacity does the company need?
Chocolate nougat is made in a batch process - with a bottle neck cycle time of 3.5 hours
Kettle capacity at the bottleneck step = 55K pounds
Ask for additional case info:
CASE INFO:
one eight hour shift per day - 30 minute break for lunch
and two 15 min breaks