A Primer on Case Preparation The Case Lounge by ICON

The Team Today

Mehak Gupta Rohan Jain Shubham Maurya

Intern: Bain & Company Intern: McKinsey & Company Intern: Boston Consulting Group
Work-ex: Citi Work-ex: Goldman Sachs Work-ex: Tata Motors

LSR IIT Bombay, CFA L3 BITS Pilani

 Agenda for today

Introduction to Guestimates and Case interview Preparation Questions and

Case interviews 4 major types of process and tips master plan and answers
business cases for succeeding resources
Case Interviews help to gauge candidates’ on-job performance ability

q Personality based ques. (5 min); Case discussion (20-30 min); Closing ques. for interviewer (2 min)
Case Interview
q Know your CV well → personality ques are based on CV to break ice and getting to know you
q Case discussions don’t have a predetermined answer. Evaluation is based on approach, exercising
judgements and steering through the problem statement

q Real life consulting project, that the interviewer was involved in → basis of case discussion
Business Case
q Consult projects can vary from 2-3 months to even a year → condensed into minutes for interviews
q Provided as a 3-5 statement caselet introducing the client and problem faced by them
q Can be number based or strategy driven; guesstimates can be a part as well

Idea behind case q Test the ability to perform on the job in a similar setup as the case-interview (consult-fit)
q Understand thought process of the candidate and capability to make decisions/ prioritize
interviews
q Put you under same pressure, like any consult project, to assess your poise, self-confidence and
communication skills (interpersonal skills)
q Drawing on personal experiences, if any, can come very handy – appreciated by interviewer
Guesstimates are mini-cases, used frequently for opportunity sizing

q Back of the envelope type calculations, very open-ended, important to establish boundaries
Guesstimates
q Example: #Burgers sold in a McD outlet in GK, #Cigarettes smoked by Indians annually (market entry)
q Can be unconventional: #hair strands on a full-grown dog, #golf balls that can be fitted in a plane

Idea behind q Test candidate’s ability to deal with abstract questions which are not really complicated
q Buy-in from interviewer: stating the assumptions with justification and thought process
guesstimates
q Comfort with numbers: spontaneity in basic arithmetic calculations and keeping it simple
q Capability to act fast: guesstimates are candidate-driven; not losing track, if prompted, is very imp

How to prepare q Practice making your equation as MECE as possible, and verbalize your approach
q Fix your approach: Top-down/Bottom up, Demand /Supply side; round off numbers for calculations
q Have some basic statistics on the top of your head. E.g. population of metro cities, demographics
splits/ratios – income, gender, age
q Sanity Check: Build a habit to “sniff” your final answer. E.g. trillion-dollar market size of a pen?!
Four major types of business cases…
Profitability and Cost reduction Market Entry
1 These cases are about companies willing to improve their 2 In this case you face a company which plans to enter a new
profitability or reduce their costs, and you are asked about market. You will have to evaluate attractiveness of the market
how to achieve it. and suggest ways to enter.

Cost = Variable + Fixed Should we How to

Profits = Revenues - Cost Objective?
enter? enter?

Important points to cover Important points to cover

Market Situation Understanding the objective
q Is your firm suffering or the complete industry? q Why does the firm need market entry? Growth or reaction to market?
Revenues q What resources and capabilities the firm has? Brand or expertise?
q Competitive parity in pricing. Possibility to increase prices? Develop the approach
q What is firm’s market share? Enough capacity to meet demand? q Market attractiveness: Growth, margins
Costs q Competitive landscape – market structure, powers distribution
q How does the cost fare against competitors? q Customers – Segments, growth, feasible
Customer/Channel q Barriers- Financial, regulatory, suppliers, distribution, scale
q Which customer segment is served? Are they most profitable? Modes of Entry
q Current channel sales mix? Do they attract high margin customers? q JV/ acquisition/ greenfield – assess the risks as well
Four major types of business cases…
Growth Strategy Pricing
3 In this case, you will be asked to help companies decide 4 Pricing cases ask you to help companies price their products
whether to expand into a new geographic region, a in the market – it could be a traditional product or a
new/related business, or a new customer segment. breakthrough.
Product
Present New
New Present

Market Product
Penetration Development
Market

Cost based < Competitive < Value based

Market
Diversification
Development
Always give a price range

Important points to cover Important points to cover

Strategic Objective Product and Market
q How much, in what period, and where does the firm want to grow? q What is the nature of the product? An invention or existing? Benefits?
Existing Business q Any special requirements/market structure/ regulations of the market?
q Existing product line – pricing within elasticity constraints, volume per Types of Pricing
customer, number of customers, product mix q Cost Based: consider mfg. cost, R&D cost, expected margins, payback
New Business period, price elasticity; gives the lower limit for price
q Product Development – identify target segment and requirements q Competitive: based on similar existing product, proxy product/industry
q New Geography – growth rate and margins, industry structure – reaction for new product; info. about industry structure (consolidate/fragmented)
to entry, other Market Entry barriers q Value based: calculate willingness to pay, estimate next best alternative’s
q Diversification – horizontal or vertical integration price for the target segment; gives the higher limit for price
Case interview process is largely standardized across firms

Interview stage What to expect? Skills tested Duration

q Ability to listen
Case question q Interviewer tells about the business problem and objective 5min
1
q Ask clarifying questions; ensure you heard the question correctly and synthesize
introduction

Developing the q Ask for time to structure the problem at hand q Structured thinking
2 2min
structure q Expected to come-up with a structured MECE approach quickly q Communication

q Expected to use a hypothesis driven approach for case solving q Problem solving
q Ask relevant questions, use 80-20 rule appropriately q Analytical skills 20min
3 Case analysis
q Case can get number intensive q Communication

Distribution q Creativity
4
Summary/ q Summarize the case with recommendations backed up by insights
q Concision 2min
Recommendation discovered in the case
q Communication

Questions for the q Opportunity to show enthusiasm towards consulting q Consulting fit 2min
5
interviewer q Ask relevant, non-generic question
Tips for succeeding in the consulting case interviews
Before the interview During the interview

Solve at least 30 to 50 cases with batchmates, seniors,

Follow basic hygiene in terms of dressing, behaviour and
1 and buddies (resources). Spend time on analyzing your case 1
writing solutions
solutions, create milestones to track your progress

Avoid losing calm when dealing with ambiguous case

Get comfortable in doing calculations in the interview, practise
2 2 situations. Feel free to take a pause and ask for help, if you’re
cases from Case Interview cracked
stuck

Be aware of the value chain, major drivers for revenue and

Try to take cues from the interviewer; don’t bring ego to the
3 cost for industries like – IT, Airline, Telecom, Pharma, Oil, 3
table. Try to remain polite and confident
Cement, Automobile

Stay up to date with the current events. Read up about the

Case question is generally based on an actual client. Show
4 company, their major clients, partners’ profile etc. Don’t miss 4
curiosity and enthusiasm towards the problem.
out the COVID reports by consulting firms!

Take the case interview more like a conversation, keep a smile

5 Stay connected with buddies, keep communications in check. 5
throughout the discussion J
8-week master plan to prepare you for Day Z
Questions?
Let’s do a case!
Your client is the IIMB Souvenir Shop
owner. Lately, he has been seeing a
decline in sales.
How will you help him?
APPENDIX
Basic framework for Profitability and Cost reduction case

Profits

Revenue Cost

(What product in the

Price Volume Product Mix portfolio; apply 80/20) Fixed Variable

(Can use value chain analysis

(Can use customer for cost reduction too)
Production Distribution Customer journey for services)

Value Chain
Volume per # of
customer customers Think about journey of product/ service
Mfg/ Srvc
Loyalty program Place R&D In-bound
delivery
Cross selling Product

Bulk discounts Promotion After Sales & Out-

sales Mktg bound
(Covering the 4Ps)
Basic framework for Market Entry case

Market Entry

Strategic Industry How to

Objective Conditions Enter?

Why to enter?
Market Barriers to
Customers Competition Organic Inorganic
Target Metric
Attractiveness Entry

Addressable Market Price Market structure Financial constraints Joint Venture

Growth rate Product Reaction to Capabilities/Resources Acquisition

entry
Profit Margin Place Suppliers

IRR/ROI Promotion Govt. Regulations

Patents, IP
Basic framework for Growth strategy case

Growth

Existing
Increasing market penetration New business
business

(Change SKUs, Geographic Product

Price Volume Product Mix Diversification
bundling etc.) expansion development
Proceed as you would in
(Can use market-entry cases Horizontal
Production Distribution Customer customer journey for Integration
services)
Vertical
Volume per # of Ansoff Matrix Integration
customer customers Within the
Can use this 2*2 as an alternative framework value chain
Loyalty program Place
Product
Present New
Cross selling Product

New Present
Market Product

Market
Penetration Development
Bulk discounts Promotion Market
Diversification
(Covering the 4Ps) Development
Basic framework for Pricing case

Pricing

Competitor
(lower price limit) Cost Plus Value Based (higher price limit)
Based

Willingness to Pay
Existing New Product
Direct Costs Indirect Costs
Product type type Opportunity cost
of no product
R&D Marketing Use proxy Next best
industry/product alternative’s price
Manufacturing Distribution

Packaging

(must include expected margin)

Basic framework for a Due Diligence case
PE
Investment

Industry Target
Returns Risks Synergies Exit
Attractiveness Company
(from the portfolio
Market Size Payback period Operational companies) IPO
Financials
M&A
Growth, margins NPV Financial
ROI
Next PE
Market Structure Valuation Strategic investment
ROA
(concentrated/
fragmented) EBIDTA

Non-Financials

Management

Culture and values

Organizational Fit

Corporate Governance
Good to know structures to aid you in case solving

Customer Journey: Awareness → Consideration→

1 Action → Service → Retention or Pre purchase →
purchase action → product/srvc use → after sales srvc

2 4Ps : Product, Price, Promotion, Place

q Easily available on Google

5Cs: Company, Customer, Competitors, Collaborators,
3 q Do not call out these frameworks while using them
Context
q Keep them at the back of your mind, can be very
handy when you’re stuck and unable to develop
4 Demand side factors and Supply side factors
an approach

PESTEL framework and Porter’s 5 Forces for external

5
factor analysis