IIM BANGALORE
CASEBOOK 2019-20
Volume 9(A)
ICON | IIMB Consulting Club
FOREWORD
INDEX
Description
Page No
• Introduction
• What to Prepare
3
• How and When to Prepare (Case Interview, Fit Question)
4
• Interview Process
• Do’s and Don'ts
5
• Approach
• List of Practice Cases
6
• Company Wise Cases
(Alphabetical Order)
8-127
• Accenture Strategy
8
• Alvarez and Marsal
16
• A.T.Kearney
27
• Auctus Advisors
45
• Bain & Co.
54
• Boston Consulting Group
75
• L.E.K
86
• K.P.M.G.
94
• McKinsey & Co.
96
• NRI Consulting
112
• Strategy &
124
This casebook documents the interview experiences of students across consulting firms
to assist the students of IIM Bangalore in their preparation for case interviews during
placements. The aim of sharing these experiences is to inform students about the caseinterview experiences of past batches and to help them prepare for their placements
accordingly. The experiences listed below are not necessarily the best way to handle
case interviews. They only serve to give students an idea as to what to expect when they
walk into a case interview. Every individual could have his / her unique way of tackling
consulting interviews, each of which could be correct.
This document has contributions from students who appeared for campus interviews
conducted by consulting firms during the summer placement process over the past five
years. The interview experiences have been sorted firm-wise.
Special thanks to all the contributors.
Team ICON wishes you all the very best for summer placements!
2
1. INTRODUCTION
Over a period, a career in consulting has become the numero - uno aspiration for majority
of management students across B-schools in India and abroad. The adrenaline rush to solve
a gamut of intriguing business problems faced by a wide spectrum of industries is enticing
enough for most students to want to explore the intricacies of the consulting sphere.
Considering industry trends and student expectations, many consulting firms visit IIM
Bangalore campus every year for the recruitment process; although the main thrust is on
summer placements in different domains like strategy consulting, IT consulting, operations
consulting and analytics. Experience across the globe has given evidence that an internship
with consulting firms gives the student an insight into the industry on a real-time basis and
helps consulting enthusiasts make informed career decisions.
The selection process is predominantly based on resume-based shortlist, followed by case
interviews. Thus, when the competition is amidst the best, it becomes imperative to have a
fundamental understanding of the case interview process of major recruiters. The case
interview processes of most of the companies are conducted similarly and follow a similar
pattern.
ICON, IIMB’s consulting club seeks to equip IIMB’s students with a sound understanding of
the consulting industry and provide valuable insights into the entire process as they gear up
to tackle the upcoming summer placement interviews. In a constant endeavour to practice
learning by experience, the following pages present the “as it is” interview experiences of
our contributors during their summer selection process at IIMB. This case interview guide
aims to provide a preview into the summer selection process of top consulting firms like
McKinsey & Co., Strategy& (formerly Booz & Co.), BCG, AT Kearney, Accenture, Bain & Co.,
Deloitte, Roland Berger etc.
ICON through this guide has endeavoured to assist the students in understanding the
consulting industry, the process involved in selection, the detailed preparation guidelines.
The interview experiences will help the students develop a fair idea of what to expect in
the interviews and how best to approach the probable case solutions.
2. WHAT TO PREPARE
A typical interview for a consulting firm is a mix of “case” and “fit”.
A. Case Preparation
Cases are arguably the most important aspect of any consulting interview. A good
performance in a case puts you in a very favourable position with the firm; an excellent one
virtually guarantees an offer.
A typical case is a business situation, requiring strategy formulation to fix a problem or
enhance efficiency (optimisation). It can vary from a detailed problem statement,
supported by several facts to a one-liner conceptual statement with a very broad problem
description along with few if any, facts are available. Case interviews are designed to help
the interviewer assess the candidate on the following parameters.
Thinking process – The interviewer constantly evaluates the candidate as the latter thinks
through the problem
Structuring – This involves breaking down the problem into simple, logical components and
structuring a broad approach framework.
B. Fit Questions
The objective of these questions is to determine the degree of fit between the candidate
and the firm. This part of the interview serves the following purposes:
• Helps interviewer know more about the candidate, his life-story and ambitions Explore
candidate’s interests, and how they “fit” with those of firms
• Assess how coherently the candidate can present himself in a conversation
In parallel to the above aspects, the candidate is continuously assessed on his
communications skills as well. Typically, a very good performance in both parts, i.e. case
and fit, is essential for a final offer. Very strong performance in one section can compensate
for average performance in the other to a certain extent, but a minimum decent show in
both aspects of the interview is mandatory to be considered for the next round/final offer.
3
3. HOW TO PREPARE
A. Case Preparation
Resources
Case examples provided on McKinsey, BCG, Bain, and other firm websites Casebooks from
other business schools
Case Study group
Typically, a group of 3 – 4 PGP-I students to discuss cases and conduct case interviews
among themselves Thorough preparation of 10-15 cases is recommended through this
mode
Ideally, all members should be focused on consulting as the career option. It ensures
consistent, enthusiastic participation from all members throughout the preparation period.
Diversity/uniformity in academic background and work experience within a team do not
matter.
What indeed matters is group dynamics, the amounts of trust members have in each other,
to pass honest feedback to others and constructively accept the same. The purpose is lost if
members do not believe in other members’ sense of judgement and the ability to pass on
accurate feedback.
A couple of cases can be prepared with some other case study groups to break the
monotony and, in the process, obtain varied feedback.
Miscellaneous
PGP-II students also conduct mock interviews and case workshops, typically the summer
interns from consulting firms
Self-study of solved cases, when group activity is not possible, is beneficial
Knowledge of basic statistics, such as population counts, can prove to be enormously
helpful
One should not quit until he or she becomes 100% confident in case analysis
Sector research, especially those in which interviewers specialise, can come in handy
Equally important is to gain a basic understanding of the sectors in which the candidate has
undertaken any academic projects in the past
B. Fit Questions
Typical questions preparation
The Placement committee generally circulates a list of ~40 questions towards the end of
Term-I.
Interview questions from summer interview process of the previous year should also be
prepared.
Company Research
It’s recommended to obtain a basic knowledge of the company operations, its history,
culture and vision. It helps in aligning one’s responses on appropriate lines as well as asking
relevant questions during the interview
Vault guides
Limited help from mentors appointed by consulting firms (for shortlisted candidates only)
Company’s websites (and neutral sources such as Wikipedia!)
4. WHEN TO PREPARE
Considering the importance of the entire process and a great deal of preparation required,
sufficient time should be invested.
A. Case Preparation
Case preparations are done best in case groups of 3-4 people, which should typically be
formed as the students begin their Term-II. This should give the students sufficient time of
about 20-25 days for preparation before the summer’s selection process kicks off. It is
advisable that students form their case groups well within the time to avoid last minute
bottlenecks of not finding the right case partners.
B. Fit Questions
Another important aspect as discussed above is the preparation of answers for the fit
questions. Answers to these can’t be framed at the last moment, as it requires a great deal
of introspection and successive reviews to frame the best possible answer. Hence, it is in
the interest of the students to start working on the first draft as early as possible,
preferably from the beginning of Term-II.
4
5. INTERVIEW PROCESS
The selection process has the following stages:
A. Resume Short Listing
All heads are looked at, and the base criteria need to be passed in each of the heads. The
base criterion depends on the batch strength and is not an absolute cut-off. After crossing
the base cut-off, 1-2 spikes are looked at. A Spike is defined as a unique attribute in a
resume - something that is not shared by anyone else in the batch.
B. Interviews
A number of interviews varies across candidates and companies. The interviews for all
consulting firms are mostly case based. These do not stress interviews. The interviewer
directs the candidate through the cases, providing leads and hints, to understand your
approach to a particular situation.
As discussed in the last section, a typical consulting interview has two parts – “fit” and
“case”. Generally, a consulting interview lasts for ~40 - 45 minutes, with the following being
the breakup
Fit Interview: 15 – 20 minutes
Case Interview: 20 – 30 minutes
Fit Interview
A fit interview is taken to assess your nature and check your suitability to the firm’s work
culture. Fit Interview involves personal questions – Typically of the kind “About yourself”,
“Why do you want to join a consulting firm?” etc.
A typical consulting interview starts with a few personal questions, lasting for 5 – 10
minutes. This initial phase is used to establish rapport. These questions are used to gauge
whether the candidate fits the company culture.
Personal questions can also be asked during and after the case, hence be prepared for a
question when you are least expecting it.
The interviewer forms an impression of the candidate after going through the resume
and tries to verify it during the interview based on the candidate’s responses to
these questions.
The fit questions are not directly addressed but are asked through a chat session, where
the interviewer will try to understand the kind of person one is. You are less likely to be
asked direct questions like “How will you fit in the company culture?” Instead, if a certain
consulting firm stresses on team culture, you will be judged on how good a team player you
are.
6. DO’S AND DON’TS OF A FIT INTERVIEW
DO’s:
• Adopt a calm and composed manner throughout the interview – Consultants spend
much time in direct contact with the client where this aspect of the personality is very
essential
• Be yourself – projecting a false image of being someone else does not work. The person
on the other side of the table is a seasoned player and would easily spot pretence.
• Present a coherent picture of yourself in an articulate manner
• Be confident – Nothing would compensate for shaky responses and a fumbling tone Be
friendly and show that you can present your thoughts in a clear, concise manner.
Consider case solving as a fun experience. The recruiter should be convinced that you
enjoy the job
• Display a good knowledge of the firm, and how it fits into your career goals Be honest –
Admit if you don’t know the topic interviewer wants to discuss Express your
expectations and interests concerning the firm
DON’Ts:
• Get defensive when the interviewer presents a counter argument
• Feign interest in subjects to impress the interviewer – artificial poses don’t carry weight.
• Appear confused about joining a consulting firm – your career aims should be clearly
outlined. Narrate stories that present contradictory images of who you are.
• Appear ignorant about the position or the firm for which you are being interviewed
5
7. APPROACH
Consulting firms use cases to gauge how well the candidate will perform on the job and if
he/she will like consulting as a job. The case is given as a 3-5 statement caselet. The case is
either number based or strategy based. (Guesstimates may be given either as a part of
number based or strategy-based case). The case gives the objective of the case.
• Take 1-3 minutes to structure your thoughts. You are not judged on the final solution
that you recommend, but on your approach to solving the problem
• Feel free to note down your thoughts, take your time to think before coming up with a
solution
• Make sure that you have touched upon all the areas concerned with the problem
Make the session interactive by asking questions, instead of taking it as a test. The
interviewer would guide you to the solution by giving hints if you approach wrong
• Industry knowledge is not required - ask them questions about the industry, which are
relevant to the case Making assumptions is a necessity- always confirm their validity
• Try to have your approach to the problem. The standard frameworks can act as a
guideline. They would not like rehearsed problem-solving approaches
• Have your style of how you are going to approach cases (top-down, bottom-up etc.)
Make sure to listen to the information given properly, before asking questions; keep
noting down any extra information given during the case discussion. You can take time
to restructure your approach with the new piece of information given. Industry
knowledge on few important sectors as telecom, IT will be helpful.
• Be calm and try to address the problem based on the hints provided to rectify any errors
made. Make sure to summarise your findings and analysis so that the recruiter has a
clear picture of your thought process
PARAMETER
IMPORTANCE
Personal Questions
Very Important
Communication Skills
Very Important
Approach to Problem Solving
Very Important
Final Solution to Case
Important
Stress Level
Low
Guidance by the interviewer
Medium
6
8. PRACTICE CASES
• A Mobile Handset Manufacturing Company, which has a 60% market share want to
strengthen their position and understand where the growth will come from in the next
five years
• A foreign bank wants to start a credit card business in India. What options would you
suggest?
• An upcoming BPO wants to understand the workforce crunch (Supply is less than
demand) in the next five years
• An Indian youth channel wants to start a new music magazine. Is it a good venture?
• A VC firm needs market size for institutions for music and creative skills (on similar lines
of NIIT for
• computer skills)
• Increasing efficiency and reducing costs for a call centre setup
• Selling strategy for condensed milk and packaged milk products in India Infosys is
starting BPO services, how would you control the attrition rate?
• Estimate the market for platinum and diamond jewellery in India for a European
company.
• Feasibility of a corrugated cardboard carton manufacturer going into the paper business
(profitability
• analysis)
• A Telecom call-center BPO couldn’t cope up with the number of calls it was getting.
Figure out the multiple problems ailing the company and generate methods to solve all
of them There is a coffee shop on the ground floor of a 40-floor building. Guess its
monthly revenue
• A call centre wants to cut costs by 10 per cent. What are the measures?
• Entertainment Company in music, planning to launch a magazine. Data are given such as
expected
• readership of other magazines, industry growth, competitor prices
• New heart hospital in New Delhi. It would cost X to set it up. What would be the breakeven time for it?
• Guesstimate – demand for a Mosquito repellent band that can be worn on the hand in
India
• Call centre – cut costs per employee by 0.65$
• Tractor Company is losing sales. 2-minute case. Write five possible reasons Chain of
stores were losing business, identify the problem
• Petrol pumps, set up on highways. Suddenly, revenues were going down. What
might be possible reasons?
• How would you make quizzing a national pastime? You are a consultant to the
government
• A movie producer has come to you with four scripts. You need to choose one.
Which one and why?
• What are the parameters you will use to evaluate?
• Confectionary major is planning to get into India. Should he buy a factory that is on
offer, or should he enter on his own?
• TEM of mobile phones. Sales of your handsets have gone down. Your dealer says
that this is because competitors’ prices are better. What do you do?
• How much investment is required in infrastructure in India in the next 5-6 years
An Indian private bank wants to go global. Which countries should it focus on and
what should be its strategy?
• How much time would it take a 100-bed heart care hospital to break even and how
many customers would they require to do so
• A box manufacturing company which made a better quality cardboard box (at a
higher cost) as compared to local manufacturers. Analyze the ways in which they
could cut costs and communicate the value proposition of their product
• Various options that could be explored for potential market entry (acquisitions, tieups, green-field etc) of an international chocolate and confectionery manufacturer
in India
• A mobile handset manufacturer, which had a leading position in the market but its
retailers were threatening to shift to other brands because they weren’t making as
much money on the sale of this brand. Examine possible reasons for this and
suggest ways to overcome the problem
• Market Entry Strategy Case in Retail. Develop a two by two framework to evaluate
the prospects of 3 lines of retail business – Baby Care Products, Soft Clothing like
screens, bed spreads, etc. and Leather Accessories
7
Accenture Strategy
8
Market Entry– BAJAJ SCOOTER
Candidate : Sudeep Nayak
Sector : Automobile Industry
Company : Accenture
Type of Case : Unconventional/Vague
Problem Statement: Calculate market size for Bajaj that wants to re-enter the scooter
segment
The Interview
Interviewer
Good Morning Sudeep, let’s get started with the case directly?
Sudeep
Good Morning Sir. Yes, sure.
Interviewer
Great. Let us say Bajaj wants to launch a scooter. It had exited this
business. It wants to relaunch its scooter product offerings. Prepare a
guesstimate for the market size for Bajaj Scooters in India.
Sudeep’s
Approach
He started with Urban-Rural classification. Then he subdivided it on the
basis of age. Within urban, he classified the different categories within age
on the basis of their paying capacity. (Matrix Approach)
Interviewer
Okay, go ahead.
Sudeep
People with high paying capacity wont prefer scooter, so they are out of
the market. Teenage students from the age of 15-18, the low wage group
and the middle waged group.
Interviewer
Sudeep
(After thinking)Sir, I should have considered the gender aspect too.
Because in case of bikes, males are the prominent buyers. But in case of
scooters, women would have a higher proportional than in the bike case. I
will start it again.
Interviewer
No, there is no need for that. Give me the final formula for arriving at the
final demand number.
Sudeep
Population in Urban Area*Total number from respective
gender*Percentage of employement*Percentage in the Requisite Income
Group*Percentage of Scooter Riders
Interviewer
Alright. So now lets assume the market size has been estimated. Now
what next?
Sudeep
Now I have to analyse the possible synergies between the new and
existing products. I have to see how compatible the existing machinery is
for producing the scooters. And then estimate the number of more
machines required. Then I will have to check for profitability.
Sudeep’s
Approach
He talked of the competitor’s analysis to gauge the strengths and
shortcomings of their competitors. He suggested conducted market
surveys to identify the gaps, needs, expectations and customer
perception. (Determining the market size and share, synergy analysis,
break-even analysis, go-to strategy)
Interviewer
No, I think we are done with the case.
Sounds fine, but are you sure you aren’t missing out on anything?
9
Market Entry– BAJAJ SCOOTER
Approach
Starting Pop:
1.3Bn
Market Entry
Considerations
Market
Availability
Analysis
Rural
60%
Market Share
Market Size
Recommendations
Urban
40%
Male
50%
X
Synergy
Analysis
Break-Even
Analysis
MECE
People who
can afford
+
People who
are willing
to buy
Female
50%
X
% Working Pop
50%
30%
X
X
X
% in the Requisite
Income Group
20%
20%
X
X
X
% Scooter
Riders
30%
20%
No. of Consumers = (1.3*0.4*0.5*0.5*0.2*0.3)+(1.3*0.4*0.5*0.3*0.2*0.2)
No. of Consumers (Final) = 10.92 Million
10
Cost Reduction – MEDICAL DEVICE MANUFACTURER
Candidate : Angshuman
Sector : Medical Devices
Company : Accenture
Type of Case : Cost Reduction
Problem Statement: A medical devices manufacturer is facing rising costs. How would
you go about solving it?
The Interview
Interviewer
Good Morning Angshuman , how are you doing today?
Angshuman
Good Morning Sir, I am doing good.
Interviewer
Very well, let’s get started with the case right away.
Your client is a medical devices manufacturer. (The candidate had prior
experience in medical industry) They are facing rising costs. You have been
hired to devise a cost reducing strategy.
(The candidate asks preliminary questions)
Process
The candidate draws the typical medical devices Industry value chain. The
value chain comprises of Research and development, manufacturing,
distribution and marketing and selling. Research and development involves
deciding Design, clinical trials and regulations. And then he suggests
approaches to reduce costs at each node of every step of the value chain.
Interviewer
Very good, this will be fine.
11
Cost Reduction – MEDICAL DEVICE MANUFACTURER
Approach
Research and
Development
•
Talk about
organisation
design,
centralised/dec
entralised
decision making
and budget
allocation.
•
•
•
•
Design for
manufacturer
Component
outsourcing
Modular
architecture
Assembling at
destination
Marketing
and Selling
Distribution
Manufacturing
•
•
Common route
to market
Achieve
Economies of
Scale in
operations
•
•
Build conducive
ecosystem
Salesforce
optimization
12
Unconventional/ Vague – INVENTORY OPTIMIZATION
Candidate : Samir Sodani
Sector : Supply Chain
Company : Accenture
Type of Case : Inventory Optimization
Problem Statement: You are looking into the supply chain of a supermarket store
chain and have been asked to optimize the inventory for the same. What will be your
approach?
objective and any other relevant information that may be necessary to
solve the case.
Samir
I have a few preliminary questions to help me better understand the
problem our client is facing. How many stores are there and where are
these stores located?
Interviewer
There are 10 stores located in various parts of Bangalore city.
Samir
By optimizing inventory, do we mean to reduce the total cost incurred in
carrying and transporting inventory? Also, what is the current system of
inventory management?
Interviewer
Yes. Currently, the chain has one operational warehouse in the outskirts of
Bangalore from where it dispatches the required inventory through trucks
on a weekly basis to all the stores. What will be the factors that you will
consider minimizing the cost?
The Interview
Interviewer
Good Morning, Samir. Why don’t you start by telling me something about
yourself while I go through your resume.
Samir
Gave the prepared answer.
Interviewer
Great, Can you briefly tell about your roles in your previous work and also
the projects that you handled.
Interviewer
Well absolutely! It is the biggest concern in this project. How will you
assess the potential risks associated with it?
Samir
Yes. I worked as a mechanical engineer, planner and associate manager
during the 3 years of my work tenure. I worked on projects relating to
inventory optimization, mine digitization and equipment overhauling
Samir
[Progress]
The interviewer asked several questions regarding the details of the
projects done.
Interviewer
Tell me why you want to get into consulting?
Firstly, I will look upon the cost of operating the trucks for inventory
transport and their utilization. I will also see whether the week dispatch
period can be increased to 15-day period or more by supplying the
economic order quantity. Then, I will look upon the product perishability
and expiry in the warehouse. Also, I will look upon the automation in the
warehousing operation so that manual labor tasks can be eliminated.
Samir
Gave the prepared answer
Interviewer
Interviewer
Let’s go to the case right now. Suppose you are looking into the supply
chain of a supermarket store chain and have been asked to optimize the
inventory for the same. What will be your approach?
The client has outsourced the inventory logistics to a local vendor who
charges the client on per truck basis. The client operates separate trucks
for all its stores.
Samir
Can I assume that because the client is using separate trucks for each
store, there may be under utilization of truck space?
[Progress]
I started with basic set of clarifying questions to clearly define the
13
Unconventional/ Vague – INVENTORY OPTIMIZATION
Candidate : Samir Sodani
Sector : Supply Chain
Company : Accenture
Type of Case : Inventory Optimization
Approach
Problem Statement: You are looking into the supply chain of a supermarket store
chain and have been asked to optimize the inventory for the same. What will be your
approach?
Inventory
Optimization
Interviewer
Yes.
Samir
The client can pool the inventory of 2-3 stores and transport it with the
help of 1 truck. This way, the client will be able to reduce the total number
of trucks and utilize the truck space effectively.
Interviewer
How will you address product perishability or expiry in the warehouse?
Samir
We can devise a FIFO system for the perishable products in the warehouse
in which the product coming first in the warehouse is leaving first from the
warehouse.
Interviewer
Good. I think you have covered most of the aspects of the problem.
Product
Perishability
Truck Utilization
factor
Economic Order
quantity
Automation
14
Market Entry – AUTOMOBILE SECTOR
Candidate : Abhijit Kande
Sector : Automobile
Company : Accenture
Type of Case : Cost reduction
Approach
Problem Statement: There is a off road vehicle company in South Africa, they have
decided to enter Indian Markets. How to go about it?
Cost
The Interview
Interviewer
Good Morning Abhijit, how are you doing today?
Abhijit
Good Morning Sir, I am doing good.
Interviewer
Do you have some questions for me??
Abhijit
No Sir.
Interviewer
Then lets get started with the case study.
Abhijit
Alright, I would like to consider the following options regarding market
entry1 Import centre
2 Exclusive distributor
3 Joint venture with an existing player
4 Setting up its own plant
Interviewer
Go ahead, evaluate the options.
Abhijit
As, we are unsure about the future prospects of the off road vehicle in
India, I would like to go with import centre .
Interviewer
Don’t You think Joint venture is more viable option?
Abhijit
Sir, for the early entry option import will be feasible .As and when the
business expands, we can surely go with joint venture.
Setting up its
own plant
Import Centre
Exclusive
Distributor
Joint Venture
Low Cost
Full Control
More Expertise
Full control
High Quality
More Profits
Less costly
Increased
productivity
15
Alvarez & Marsal (A&M)
16
Profitability Enhancement – GLASSLINE CONTAINER MANUFACTURER
Candidate : Pallabi Chakraborty
Sector : Manufacturing
Company : A&M
Type of Case : Profitability
Interviewer
It is a special lining reactor. They use glass for lining. They sell directly to
end customers.
Pallabi
Ok. Thanks. How many factories do they have?
Problem Statement: A reactive vessel manuf. Co. with production capacity 120 units/
month receives an order of 150 vessels delivery in one month. How to meet the order?
Interviewer
Five
Pallabi
This cost cutting measure is to be employed across all factories?
The Interview
Interviewer
Yes. Consider all factories are similar. Take one factory as specimen.
Interviewer
Good Morning, Pallabi. Why don’t you start by telling me something about
yourself?
Pallabi
Since Cost cutting is main agenda, I will first focus on the ways of
minimizing cost and then move to maximizing revenue part. Is it ok?
Pallabi
[Answered]
Interviewer
Yes. Please.
Interviewer
Where did you work before? What did you do exactly?
Pallabi
Pallabi
[Answered]
I will divide cost in to fixed and variable cost. I will start with foxed cost
assessment. Is it ok?
Interviewer
Let’s dive into a case now. Our client is a reactor manufacturer based in
India. Financials are good. The reactor is a special type of reactor with a
glass lining. The client want us to increase revenue and find ways to
minimize cost.
Interviewer
Yes. Please.
Pallabi
I did a value chain analysis in the paper. He was looking over what I was
writing.
Notes
I asked questions on each and every item one by one and suggesting how
to reduce cost.
Pallabi
Since we sell directly to customer I am assuming that there is no
substantial cost to dealers and as such marketing.
Interviewer
Yes. Go ahead please.
Notes
I started with basic set of preliminary questions like how many factories,
location, any special reason for cost cutting or general ,what is the market
demand etc. after which I made a clear outline of the framework I was
planning to adopt to solve the case. The preliminary questions helped me
to gain perspective about the industry and the business problem.
Pallabi
I have a few preliminary questions to help me better understand the
problem our client is facing. Is that ok?
Notes
I was asking questions about fixed cost items. He cut me in between and
asked me to focus on variable costs.
Interviewer
Yes sure.
Pallabi
Ok. From where do we source raw materials?
Pallabi
Can you tell me more about the product?
Interviewer
Major is steel. 2 vendors.
17
Profitability Enhancement – GLASSLINE CONTAINER MANUFACTURER
Pallabi
How do we source? Any contract? How is lot size decided?
Interviewer
As and when required.
Pallabi
Since steel is major part of raw material it is better to enter into long term
contract and get price discount. Suppliers will also have stable demand
knowledge and scheduling will be better.
Pallabi
We can see if there is a substitute material of wood. Wood is costly. And
also storing them vertically will free up space, we will able to sell more as
there is ample demand.( He indicated before that there is unmet demand)
Interviewer
How? I don’t understand.
Pallabi
There were water bottles in the table. I took two of them and showed him
that horizontally they take more floor space and vertically less space.
Interviewer
That’s impressive.
Pallabi
Thank you
Interviewer
Yes. Good. Go to the next component
Pallabi
What kind of employees do we have? Permanent / contract wise? How do
we pay them? Pay structure?
Interviewer
Why do we ask?
Interviewer
Pallabi
We can link pay with performance. See what are the medical benefits
given. If there is chance of cost cutting there.
Okay. We are done with the case. What are your 3 major learnings from
your last work experience?
Pallabi
[Answered]
Interviewer
Yes ok.
Interviewer
Thanks. Wait outside. I will decide with my partner and let you know.
Notes
Then he nudged me to look into the production process. I asked the
various staged of production. He helped me construct a flow chart. Again I
started by asking questions about what is the exact process currently
employed and offered my suggestion as to how that can be improved. I
will cite some example.
Pallabi
Thanks.
Pallabi
How much is the process technology driven?
Interviewer
Mostly manual
Pallabi
We can see lots of scope of incorporating technology. This will drive down
cost.
Interviewer
Yes.
Pallabi
How are the reactors stored?
Interviewer
On wood rolls. Laid horizontally
18
Profitability Enhancement – GLASSLINE CONTAINER MANUFACTURER
Approach
Profitability
Revenue
(-)
Costs
• Not the focus area
Variable
Costs
• Core focus area
• Raw material cost –
long term contracts
• Employee costs –
controllable, noncontrollable
• Use of technology
• Storage cost of
vessels
(+)
Fixed Costs
• Not the focus area
19
Output Enhancement – GLASSLINE CONTAINER MANUFACTURER
Candidate : Nitesh Kumar
Sector : Manufacturing & Production
Company : A&M
Type of Case : Output enhancement
Interviewer
Cutting and bending is totally automated and machine based, welding
requires both machine and manual effort as somebody has to use the
machine to weld, rest all process are completely manual.
Problem Statement: A reactive vessel manuf. Co. with production capacity 120 units/
month receives an order of 150 vessels delivery in one month. How to meet the order?
Nitesh
Are there any constraints for procurement of iron sheets?
Interviewer
No there are no constraints. The company can procure any number of iron
sheets.
The Interview
Nitesh
What about cutting and bending machine? How many sheets can it
process per day and what is the average number of sheets that are
required to be processed for each container?
Interviewer
Hi Nitesh. Lets start this interview with a case study. Do you know what
does throughput mean?
Nitesh
Do you mean industry or production throughput? I have a basic idea about
that.
Interviewer
Assume machine can process 20 sheets per day and each vessel requires
around 2 processed sheet to be manufactured.
Interviewer
Good. So there is a company that makes reactive vessels with a layer of
glass line coating on the inner end. The company currently has a capacity
of producing 120 vessels per month. They have recently secured a very
large order of 150 units to be delivered in one month. How should they do
to meet the order?
Nitesh
What is capacity of welding process and since the process is manual how
many workers are deployed to attain that capacity?
Interviewer
Two welders able to produce one vessel per day and there are . Assume
that there are sufficient machines to reach to that output. On an average,
there are 12 welders in the factory.
Nitesh
Can you let me know the basic process flow of manufacturing of this
reactive vessel?
Nitesh
In the lining process, which is completely manual, what are the capacity
constraints?
Interviewer
The process starts with sourcing of iron sheets. After this, these sheets are
cut and bended as per the design requirements. After this, the processed
sheets are welded to give the shape of the container. Post welding, the
interior of the vessel is lined with a glass coating to make it reaction proof.
Once the coating is done, the is packaged and distributed.
Interviewer
One vessel is lined per every four workers working in this division. On an
average 16 workers work in this department.
Nitesh
Any limitations with regards to packaging and distribution?
Interviewer
No. The company can package and distribute any number of vessels as the
entire process is outsourced.
Nitesh
What about the factory operation time? Does it operate on all days of
week and how many working shifts are there?
Nitesh
Okay. To increase the throughput, I will first have to identify the bottleneck
in the process and the reason of it being the bottleneck. To move further,
which of the following steps involve use of machines and machines,
manual labour or both?
20
Output Enhancement – GLASSLINE CONTAINER MANUFACTURER
Interviewer
Good, assume that the factory is operational on all 7 days of the week.
Currently, the work is being done in only 1 8-hour shift.
Nitesh
Can I take a minute to do the calculations?
Interviewer
Sure.
Nitesh
Based on the information provided, procurement of iron sheets and
packaging & distribution have no bearing on my production capacity.
Cutting & bending machine can process enough sheets to produce 300
vessels per month, welding department can process 180 vessels per
month while lining of vessel interior is the bottleneck with 120 vessels per
month. So, we can either increase the strength of the department by
hiring temporary workers or increase the shift time temporarily to fulfill
the order at hand.
Interviewer
Okay, but are you not forgetting a factor in your calculation for manual
processes?
Nitesh
Can I take minute to think over my calculation. [After some time] Yes,
since the processes are manual, there should be a factor for efficiency.
What can be a good estimate of worker efficiency in this case?
Interviewer
Great. Consider it to 50% for now.
Nitesh
Based on the efficiency considerations, no process has a limitation of
capacity and ideally the factory should be able to fulfill the order with the
current step-up. But since is a manufacturing plant, 50% efficiency is too
low a number. So in the short run, I still feel that we will not be able to
fulfill the order by just focusing on the efficiency aspect and will have to
implement one of the above recommendations.
Interviewer
Sounds fair. How will you improve efficiency in the long run?
Nitesh
I will first conduct an in-depth time & motion study to identify the reasons
Nitesh
for low efficiency and opportunities to improve. After understanding the
gap, the corrective measure can be, and not limited to, bringing in a
better supervisor, introduction of/redesigning incentives for workers and
managers etc. which will help improve the efficiency of operation in the
long run.
Interviewer
Okay. This is enough from the case side. Let me why do you want to join
the company?
Nitesh
A&M takes pride in execution and working here I will be able to work on
the entire spectrum of activities from plan to execute and this motivates
me to join A&M.
Interviewer
What other calls do you have?
Nitesh
Apology in advance but we have very strict placement committee
guidelines of not disclosing it to anybody.
Interviewer
Okay no problem. Please wait outside for a while.
21
Output Enhancement – GLASSLINE CONTAINER MANUFACTURER
Approach
Process
Type
Capacity
1
Procurement of Iron
Sheets
Manual
Infinite
2
Cutting & bending of
sheets
Machine
20 sheets per day
~300 vessels p.m.
3
Welding of sheets
Machine + Manual
1 vessels per day
per 2 workers
~ 180 vessels p.m.
4
Lining of vessel interior
Manual
1 vessel per day for
every 4 workers
~120 vessels p.m.
5
Packaging &
distribution
Manual
Infinite
22
Cost Reduction – MANUFACTURING FACILITY
Candidate : Kirti Kishan
Sector : Manufacturing
Company : A&M
Type of Case : Cost Reduction
Problem Statement: Your client is a manufacturing company in Pune. It is looking at
cost cutting measures.
The Interview
Interviewer
Good Morning Kirti, tell us something about yourself?
Kirti
Good Morning Sir. Prepared a generic answer for this.
Interviewer
That’s good to hear. Let’s get started with the case. Your client is a
manufacturing facility in Pune. It wants to reduce its costs. What measures
can it take.
Kirti
Okay, The client wants me to look at various ways of reducing costs. Sir,
what type of goods are manufactured by this company and is it involved in
only manufacturing or other processes like distribution as well?
Interviewer
Let’s not go in depth about the type of goods. Consider it a general cost
reduction scenario for a company that manufactures goods in Pune to be
finally exported from Mumbai.
Kirti
Alright. So, for a typical manufacturing facility, cost can be broadly
classified
into:
1. Fixed Costs : Rent/Lease, Machinery for production (Tech), Patents
(intangible)
2. Variable Costs: Labour, Utilities, Packaging, Transportation
Interviewer
Very well, how can you reduce Labour Costs?
Kirti
Labour can be of 2 types, Permanent and Contractual (Temporary task
forces). Does the manufacturing company have this distinction in labour?
Interviewer
That’s interesting. All the labour is permanent as of now. Can you
elaborate on the distribution of Permanent and Contractual labour?
Kirti
Sure Sir. There has to be a safe ratio maintained between the permanent
and contractual workers so that at no point of time, there is labour
unutilized or on bench.
Interviewer
How would you determine this safe ratio between permanent and
contractual labour?
Kirti
This will depend on the demand for the goods being manufactured and
the seasonality of demand. For producing the average number of goods
demanded, permanent labour will be employed. For seasonal peaks above
average, contractual labour can be employed to absorb higher demand.
This can be seen from the Demand curve and the cycle of demand.
Interviewer
What if the demand cycles are very short, won’t hiring and firing
contractual labour become very expensive?
Kirti
Yes sir, my previous assumption was based on less frequent seasonal
peaks. However, if the cycles are very short, the manufacturing facility
should invest in cross training its labour into various functions so that a
limited number of them can look after different processes in times of
peaking demand instead of hiring contractual labour for a very short span.
Interviewer
Very Good, we’ll see you in the second round.
23
Cost Reduction – MANUFACTURING FACILITY
Approach
Cost
MECE
Capital:
Rent/Lease
Technology/
Machinery
Fixed
MECE
Variable
Intangible:
Patents
Raw
Materials
Labour
Permanent
Contractual
Cross
Functional
Training
Utilities
Packaging &
Transportation
Depending on the Demand Cycle
have a safe split between these 2.
If Demand cycle is very short with
frequent peaks, adopt this
24
Declining Profits– HOSPITAL INDUSTRY
Candidate : Kirti Kishan
Sector : Hospital
Company : A&M
Type of Case : Profitability
Problem Statement: There is a hospital facility facing declining profits. What can be the
potential causes for the same.
The Interview
Interviewer
Good Morning Kirti, let’s get started with the case unless you have any
preliminary questions for us?
Kirti
Good Morning Sir. Sure, we can start with the case.
Interviewer
Well. Your client is a hospital facing declining profits. How would you
identify the issue?
Kirti
Has there been a change in the consultation fees or the course of
treatment offered over time?
Interviewer
No, These factors have remained the same more or less over time.
Kirti
Okay, Is there any new hospital/clinic that’s been set up in the vicinity or a
new government scheme that’s incentivising customers to shift towards
them due to their cheaper price?
Interviewer
Nothing like that, the landscape has remained pretty constant in terms of
it being the best hospital in the vicinity.
Kirti
Then this means that the footfall of patients has remained similar as well
over a period of time. (Acknowledged by the interviewer with a nod).
Coming to the other factor, I would like to investigate if the in-house sale
of medicines has been the driver of declining profits.
Interviewer
Go ahead.
Kirti
The sale of in-house medicines can be affected by the following factors:
1. Change in the contractor/distributor of in house medicines
2. Parity between what’s being prescribed and sold
3. Change in the timings of the medicines being sold (24*7 or not)
Interviewer
The distributor has remained the same for a very long period of time,
supplying the same brands’ medicines. The medicine shops have also
been open 24*7 always.
Kirti
Alright, The hospital’s profits are reducing over a period of time and I have
to identify what might be leading to this (The interviewer nods at this). So,
profits are a function of the revenue for the hospital less its costs. Should I
analyse both the metrics one by one or do you want me to focus on just
one?
Interviewer
We know that the YoY revenue has been declining. What are the major
areas you’ll look over?
Kirti
Okay. So, for a hospital there can be broadly following streams of revenue:
1. Consultation Fees for the doctors
2. Revenue from the treatment given
3. Sale of in-house medicines
4. Others: Revenue from leasing premise for cafeteria, leasing space for
parking, other shops set up in hospital
Kirti
Alright, then I would like to explore if there is a mismatch between the
prescribed medicines and the ones being sold.
Interviewer
Okay. That is the reason for decline in inhouse medicine sale. But, Why?
Kirti
Sir, there can be medicine shops around the hospital selling similar drugs.
The doctors might collude with these shops for a cut in the medicine sale.
Very well, how would you go about finding the pain-point after this?
Interviewer
Very good, this was what actually happened with the hospital. 25
Interviewer
Declining Profits– HOSPITAL INDUSTRY
Approach
Profits
Revenue
MECE
Cost
No Change
Consultation
Fee
Treatment
Revenue
(Fees) X (Patients) (Treatment cost to
Patient) X (Patients)
In House
Medicine
Others:
Lease
MECE
Distributor
Not to be
considered
Cafeteria
Parking
MECE
Shops
Timings of
sale
Parity w/
prescription by
doctors
Medicine shops
around hospital
Doctors
colluding with
these
Final Answer
26
A.T.Kearney
27
Salesforce Problem – PHARMACEUTICAL
Candidate : Hardik Dubal
Sector : Pharma Manufacturer
Company : A.T.Kearney
Type of Case : Salesforce Problem
Candidate
Okay. Please give me a minute to structure my thoughts. (After about 40
seconds) I will approach this case from the revenue side, if that is okay
with you (nods). So, revenue can be increased by increasing the number of
units sold, or by increasing the basket size. Since we are only focusing on
one drug, I shall ignore the second part, unless there is a complementary
drug that sells along with this drug.
Interviewer
There is, but you can ignore the second part for now.
Candidate
Okay. The number of units can be increased either by increasing the
number of doctors that know about and prescribe our drug (demand side)
or by increasing the pharmacies that keep our drugs (supply side). Here I
would like to ask you a question: When a patient is diagnosed with the
disease, what percent of the doctors remember the name of our medicine
while prescribing?
Interviewer
Good question. The recall rate of our drug is about 20%.
Candidate
Okay, so there is a potential to increase this rate. I shall first analyze this
tree. We can increase demand through existing doctors, or by reaching
out to new doctors.
Interviewer
The company’s sales force has reached out to all the major hospitals in the
country. Reaching out to the smaller hospitals will not be economical.
Candidate
Alright. We can either increase the advertisements for our product, or we
can increase our salesforce efficiency.
Interviewer
Tell me more about this salesforce part that you are talking about.
Candidate
Sure. We can increase our reach by increasing the number of salespeople,
the number of doctors each salesperson contacts, and the frequency of
contact. These are somewhat interconnected, but individually they
provide more information. May I know the standing of our company wrt.
the competitor for these numbers?
28
Problem Statement: The client is a pharma company which has a patented drug which
will expire in 6 months, how should the company sustain itself?
The Interview
Interviewer
Good Evening, How was your day? Tell me something about yourself?
Candidate
Good Evening. It was good. A prepared answer is provided.
Interviewer
That’s good to hear. Let’s get started with the case. The client is a pharma
company which has a patented drug. This drug is its cash cow. However,
this patent will expire in 6 months, and the company is worried how it will
sustain itself. Analyze the situation and suggest recommendations
Candidate
Interesting! According to my understanding, the customer wants to ensure
that it can keep capitalizing on this drug even after the patent expires. Am I
right? (interviewer nods). Thanks. May I ask a few clarifying questions, so
that I can understand the situation better?
Interviewer
Sure. But do it quickly.
Candidate
Sure. A couple of questions: a. Where is this company located? b. Does any
competitor have any similar product? c. What type of drug is this- is it an
over-thecounter drug, or a prescription drug? and d. What type of ailment
is it used to cure- something permanent or a short-term disease?
Interviewer
The company is located in India, our competitor has a similar product, the
drug is a prescription drug and is used to cure short term diseases.
Salesforce Problem – PHARMACEUTICAL
Interviewer
Good observation. I will mention the ratio wrt. our competitor for these
metrics: a. 1:4 b. 10:1 and c. once a month vs. once in two weeks.
Candidate
Wow, that is a huge difference, and a tremendous scope for improvement.
Why are our numbers so low in comparison?
Interviewer
The company has not updated the sales team numbers for a while now,
since they are under the assumption that they are efficient. You have
arrived at the root cause. What recommendations would you give the
company?
Candidate
Interviewer
Well, a personalized relationship with the doctors goes a long way in
establishing trust, as well as over-the-head recall of the product. Apart
from increasing the sales force and improving the frequency of contact
with doctors, we can also use social media to reach these doctors through
targeted advertisements.
Approach
Volume Sold
Basket Size
# of Units Sold
New Doctors
Doctors
(Demand)
Good, thank you.
Pharmacy
(Supply)
Existing Doctors
Strength of
Salesforce
Salesforce
# per Salesforce
Frequency of
Contact
Advertisement
29
Process Problem – TELECOM
Candidate : Hardik Dubal
Sector : Telecom
Company : A.T.Kearney
Type of Case : Salesforce Problem
Problem Statement: The client is a service provider which has been facing a large
number of complaints from customers. Suggest what could be done.
Candidate
Thanks. Customer service can be divided into the service itself, and the
process that the customers go through while experiencing the service.
Since you had mentioned earlier that the service is top-notch, I am
assuming that the problem is with the process. Is my assumption correct?
Interviewer
You are right. Please elaborate on this hypothesis.
Candidate
To understand the process better, let us have a look at the various steps
that the customer goes through. They place the call, then reach the
startup menu--
Interviewer
You are forgetting something. The year is 2012, and startup menus were
not very actively used back then.
Candidate
My apologies. Then the customer waits for the call to be attended by the
teller, after which the call gets connected. I am not analyzing this further
since the quality after this is good. Which part of the process seems to be
the problem?
Interviewer
Customers have expressed concerns about a very long waiting time for the
tellers to pick up the call.
Candidate
The waiting time of the customer is a function of only two things- arrival
rate and service rate. **I applied concepts from queuing theory and wrote
down the formula for the length of the queue. The interviewer seemed
quite impressed.**
The Interview
Interviewer
Good Evening, How was your day? Tell me something about yourself?
Candidate
Good Evening. It was good. A prepared answer is provided.
Interviewer
That’s good to hear. Let’s get started with the case. Your client is a service
provider in India during the year 2012. They have the largest market share
in the industry but are facing a large number of complaints from
customers. Their service is top notch, but somehow the customers are not
very happy. A T Kearney has identified that there is an internal problem.
Please build up on this information to identify the problems and suggest
what could be done about them.
Candidate
When you say “’internal”, I am assuming that it has to do with the core
product/ service that they offer, and not an organizational design problem.
Interviewer
Yes, you can assume that. How will you approach the case? Talk me
through your thoughts.
Interviewer
Definitely. An internal problem can be caused by three reasons: Product
quality, customer service and meeting customer demands (product line).
Which one would you like me to explore first?
Good work. We have understood that the number of tellers that we have
are enough for the specific requests that the customers have. Still, the
waiting time is longer than the competitors’.
Candidate
May I know by what margin?
Candidate
Interviewer
The quality of their offerings is at par with the requirements of the
customer. You can dive deep into the customer service part.
30
Process Problem – TELECOM
Interviewer
About 20%. But don’t delve on this further. I want to know the qualitative
reasoning that you provide
Candidate
Okay. This means that we have unnecessarily long calls from customers.
Interviewer
Good observation. But there is another problem that we are facing. Can
you list down the various reasons that the customers might call us for?
Candidate
Interviewer
Interviewer
Good job. You have identified the problem. What are some of the
recommendations that you would give to the company to improve their
service?
Candidate
The company needs to start using startup menus! (with a smile)
Interviewer
Alright, looks like we are out of time. Please wait outside so we can tell
you the next step in the process.
Customer Service
Service
Good. General queries that customers call us for do not fall into the
domain of specific requests that the company considered while calculating
the number of tellers
I see. Can we say that the number of these non- specific requests are high,
leading to larger number of calls from the customers?
Internal Problem
Product quality
Definitely. The calls can either be general queries regarding the top-ups,
various schemes that the company advertises etc. or it could be some
genuine specific problem that they are facing, and they need support
regarding this problem.
Candidate
Candidate
Approach
Product Line
Process
Non-existent in 2012
StartUp
Menu
Call
Customer
waits
Connect
with Teller
Low Service Rate
Problem
Solving
High Arrival Rate
General Queries
Thank you!
Existing
Customers
New Customers
Specific Problems
31
Declining Market Share – AUTOMOBILE MANUFACTURER
Candidate : Shruti Prabhu
Sector : Automobile
Company : ATK
Type of Case : Profitability/Market Exit
Problem Statement: The client is an Indian automobile manufacturer with operations
abroad as well. Its market share is declining in Eastern Europe and it is finding it
difficult to run its operations. It is exploring to either streamline its operations or exit
the market altogether.
The Interview
Interviewer
The Client is only engaged in the manufacturing of commercial vehicles
mainly trucks. These trucks are from small to large sizes having multiple
uses where chassis is the same and other add-ons are procured locally.
The client has only 1 manufacturing plant in Europe with auto parts, R&D
and product development happening in India. These markets are
characterized by changing nature of product.
Shruti
Who are their competitors in this market? Are they facing the same issue?
Is the problem being faced by our client only in Eastern Europe region?
Interviewer
This problem is faced only by Indian manufacturers. The other Korean
manufacturers are not facing the issue. The competition for our client is
mainly from resale of second hand trucks. This problem is being faced by
our client only in the Eastern Europe region.
Interviewer
Good Morning Shruti, how are you doing today?
Shruti
Good Morning Sir, I am doing good.
Interviewer
Very well, let’s get started with the case right away.
Shruti
Interviewer
Your client is an automobile manufacturer operating in India and other
countries outside India. It observes a decline in market share in Eastern
Europe. Hence, it is finding it difficult to run operations. The client wants to
know whether there is something it can do to streamline its operations or
it should exit the market altogether?
Alright. So to clarify, our problem statement is to suggest to an Indian
truck manufacturer whether to continue its operation in eastern Europe
given its declining share?
Interviewer
Yes, That’s right.
Shruti
Before I move on to suggesting whether to continue or exit the market, I
would first like to deep dive on the product survival factors in eastern
Europe. For this, I would break it down into 4 buckets- Price, Place,
Promotion and Product. What is the pricing band of our products – High
end, medium or low price? What are the channels they use to sell their
trucks? Have they engaged into any promotion activity?
Interviewer
The client sells trucks in low price segment to fight competition. The sale
happens only through dealers who sell trucks of multiple manufacturers.
Client has a low budget for promotions. It does not have any TV ads. It
promotes sales only through schemes in stores.
Shruti
I would like to begin with a few clarifying questions on the client.
Interviewer
Yes, Go ahead.
Shruti
What kind of automobiles does the client manufacture? Does it operate
across the value chain? Where are these automobiles produced? Since I do
not know about the eastern European market, is there something peculiar
about these markets that I should keep in mind?
32
Declining Market Share – AUTOMOBILE MANUFACTURER
Candidate : Shruti Prabhu
Sector : Automobile
Company : ATK
Type of Case : Profitability/Market Exit
Interviewer
Yes, please go ahead.
Shruti
In order to streamline its operations as per alternative A, we should focus
on cost reduction across the value chain which includes R&D, Raw
Material Procurement, Manufacturing, Transportation and Marketing.
Since there are frequent product changes happening in Europe, it makes
more sense for the R&D team to be based out of Europe. However, the
cost of labour and set up which will be higher than that in India needs to
be considered. Instead of manufacturing all auto parts in India, the
company can consider importing only the cheaper parts. The product
development can be done faster in Europe with greater synergy between
the rapidly changing product specifications. The transportation cost using
Airways vis-à-vis waterways of imported components should also be
factored in. The manufacturing location can be closer to port/airport
which will reduce inland freight. New promotion strategies and incentives
should be devised to target dealers who will encourage customers to buy
our new trucks instead of second hand ones.
Interviewer
Okay, Sounds good.
Shruti
Thank you.
Problem Statement: The client is an Indian automobile manufacturer with operations
abroad as well. Its market share is declining in Eastern Europe and it is finding it
difficult to run its operations. It is exploring to either streamline its operations or exit
the market altogether.
The Interview
Shruti
Ok, Since the client operates in the low price segment with major
competition from second hand trucks, we know that the competition is
price based. The dealers are the link between the company and its
customers, but this dealership is not exclusive to the client. You also
mentioned about the changing nature of product in the eastern European
markets. Can you please elaborate?
Interviewer
The government has introduced some new safety features such as sudden
auto braking. This has resulted into high cycle time in production. Also,
frequent changes are leading to increase in the R&D effort and time. Given
this scenario, what do you recommend?
Shruti
Can I have a minute to jot down my thoughts?
Interviewer
Sure.
Shruti
I would approach the way forward by choosing between two alternatives
A) Continuing its eastern European business by tweaking its operations or
B) Withdrawing from the business. Given that the problems being
currently faced by our client is specific to the company and not attributed
to a general slowdown in the market, I would like the client to not opt for
alternative B. Hence, is it ok if I further discuss only alternative A?
33
Declining Market Share – AUTOMOBILE MANUFACTURER
Approach
Profits
Quantity
Cost
Revenue
Price
Variable Cost
Fixed Cost
Across the
Value chain
Raw
Material
Manufacturing
Volume seems affected
because of competitive
pricing from second-hand
truck market
Marketing
Distribution
R&D
Additionally, 4P framework can be implicitly
used to define the promotion and placement of
the product at the decided price
Not discussed deeply in the case
Production
Cost
Import Cost
Labour Cost
Recommendation (as per the interview):
• Since the market demand isn’t declining & issue seems client specific, the client should continue in the market by
streamlining the operations (cost reduction)
Or, (quantitatively impactful alternative)
• Estimate the profit (P) and the variable costs (VC) of the client,
• If, P > VC; streamlines the operations (cost reduction)
• If, P < VC; leave the business
34
Estimate Demand for Milk/ Market Entry – FOREIGN RETAILER
Candidate : Aishwarya Sharma
Sector : Retail
Company : ATK
Type of Case : Guesstimate + Market Entry
Problem Statement: Foreign retailer looking to set up shop in India. Demand for milk to
be estimated followed by suggestions on how to enter the market.
The Interview
Interviewer
Good Morning Aishwarya, how are you doing today?
Aishwarya
Good Morning Sir, I am doing good.
Interviewer
Very well, let’s get started with the case right away.
Your client is an international conglomerate looking to set up shop in India.
How would you go about it?
Interviewer
Lets assume that the retailer wants to specialize in Milk. Why don’t you
estimate the demand for milk for me?
Progress
At this point the interview takes turn to become a guestimate rather than
a market entry case.
Aishwarya
Sure Sir. To begin with, I would like to know in what sort of area will the
establishment be set? Rural/ Urban, Commercial/Residential?
Interviewer
It will be in an urban residential area.
Aishwarya
Okay, So I will assume my starting population to be similar to a
metropolitan city like Bangalore(Urban) with a population around 12L.
Next, I would like to know what types of milk will be sold? Multiple
categories like fat, skim, soy, almond etc?
Interviewer
Assumer 2 types of milk only: Fat and Skim
Aishwarya
Okay, so there is an international player looking to enter the Indian market.
Is there a particular type of business model they are willing to set up or
they do you want me to evaluate various options?
Aishwarya
Right, so the type of milk consumed will depend on the population
demographics. Families usually consume Fat milk while Individual working
professionals and old people consume Skim milk.
Interviewer
The client wants to set up a supermarket sort of an establishment. Since it
is a new player, it has to make some backward investments in the supply
chain as well.
Interviewer
I get where you’re getting at. How would you arrive at the demand now?
Aishwarya
I will calculate daily demand for milk since it is a highly perishable good
and then multiply it by 30 to get a monthly demand number
Aishwarya
Alright, is it looking to specialize in a particular product category or does it
want to enter as a one-stop shop supermarket?
Interviewer
Okay, go ahead
Interviewer
It wants to specialize in dairy products.
Aishwarya
Refer to the flowchart on the following page for calculation of the final no.
Aishwarya
Okay, the depth of dairy product line is quite high encompassing milk, ice
cream, butter, cheese, yoghurt, ghee, frozen foods. Is the retailer looking
to develop expertise in this whole category or a product specific expertise
is expected?
Interviewer
Very good, now that you have monthly demand, why don’t you tell me
various ways through which the retailer can enter the Indian Market?
Aishwarya
It can take up a franchise, set up its own brand, acquire an existing player
depending on the depth of pocket, enter into joint ventures/mergers.
35
Estimate Demand for Milk/ Market Entry – FOREIGN RETAILER
Approach
Daily Demand
for Milk
Rural
For consumption at
home
Similar to Population
of Bangalore
Assumed 40% of
Population
Family Set Up
Urban
Residential
Commercial
Starting Pop:
12L
Working Prof +
Old People
Fat
Skim
4.8 L
7.2 L
Assuming 0.5ltr consumption of milk per day
2.4L Ltr
3.6L Ltr
Assuming Rs 25/ltr for Fat and Rs 20/ltr for Skim
Rs 60L
For Supply to other
bigger institutions
Assumed 60% of
Population
X 30
Daily Demand
Daily Revennue
6L Ltr
Rs 132L
Monthly
Demand
Monthly
Revennue
180L Ltr
Rs 3960L
Rs 72L
36
Unconventional/ Vague – PERSONAL CARE PRODUCTS
Candidate : Shamta Thakkar
Sector : FMCG
Company : A.T. Kearney
Type of Case : Unconventional/ Vague
Problem Statement: Your client is a personal care products manufacturer. It wants to
reduce the margins it is paying. How can it achieve that?
Shamta
For the distributor specifically, we can also consider forward integration –
many FMCGs have their own distribution depots. Another option can be
analyzing where a distributor is needed based on factors like geography,
volume, etc. and eliminating redundancies in the network.
Interviewer
Okay, and what about the other intermediaries in the network?
Shamta
For wholesalers, we need to conduct regular awareness and training
workshops. We could also provide perquisites to wholesalers and invest in
relationship building. In the case of wholesalers as well, we can provide
economies of scale (by maximizing volumes with most crucial
wholesalers) & economies of scope (ensuring that wholesalers are able to
meet demand for all SKUs by efficient supply chain planning). Does this
sound acceptable to you?
The Interview
Interviewer
Good Morning Shamta, I am going to get right to the case
Shamta
Good Morning! Yes, Sure.
Interviewer
Your client is a personal care products manufacturer. It wants to optimize
its sales costs by reducing the margins it is paying.
Interviewer
Yes, you can move on to retailers
Shamta
Okay, in that case, should I evaluate the sales & distribution network first?
Shamta
Interviewer
Yes, that is correct, go ahead
Shamta
Alright. So, for a typical FMCG, the sales and distribution network would
involve the following:
Manufacturer > Distributor > Wholesaler > Retailer > Final customer
Should I analyse each leg of the network or do you want me to focus on
one particular leg?
In the case of retailers, again some products can be made exclusive to
certain retailers e.g. to large supermarket chains.
For both wholesalers and retailers, volume bonus can be introduced. Price
discounts for bulk volumes can be considered to the extent they do not
completely offset the reduction in margins.
Interviewer
Don’t you think these strategies are imitable? How do you ensure your
intermediaries choose you over competitors?
Interviewer
You can analyze each of the legs in the network
Shamta
Yes, to some extent. Can I get a couple of seconds to think through this?
Shamta
I will start with the Distributor. Manufacturers typically have a strong
relationship with them. If we are reducing the margin paid to them, we
must compensate to not lose their loyalty. We could introduce ‘exclusive
distributor’ agreements to increase selected distributors’ product volume.
We can also incentivize them with periodic bonus on meeting a predecided sales volume. Another option can be price discounts on bulk
volumes.
Interviewer
Yes, sure
Shamta
We can benchmark our margins with those of competitors. We can reduce
margins from current levels while ensuring that they are still at a slight
premium over competitor margins
Interviewer
Yes, we did conduct a benchmarking analysis for the client. Good work,
we shall see you in the next round
37
Unconventional/ Vague – PERSONAL CARE PRODUCTS
Approach
Manufacturer
Distributor
Wholesaler
MECE
Exclusive
Agreements
Incentives
Volume bonus
Retailer
MECE
MECE
Forward
Integration
Price discounts
Relationship
Building
Awareness/
Trainings
Incentives
Perquisites
Final Consumer
Exclusive
Agreements
Economies
Scale
Incentives
Scope
Competitor Benchmarking at each leg of the network. Margin floor – Competitor Margins + xx% Premium
38
Market Sizing – GROCERY RETAILER
Candidate : Prunoti Dutta
Sector : Retail
Company : A.T. Kearney
Type of Case : Market Sizing
Interviewer
Sure. I would consider the following equation:
No. of households who purchase from the client per month x Average
Basket Size
I would consider households visiting the store in a month, irrespective of
number of trips made in one month. Out of 50,000 households, I would
consider only the top 40 % income segment households and assume only
10% is captured by us. Thus, 0.1*0.4*50,000 = 2000 households. Do we
have information regarding their average basket size per month?
Interviewer
Yes. 40% of the households spend around Rs. 2000 per month on average,
other 40% about Rs. 1000 and the remaining spend Rs. 3000. This involves
both grocery and apparels from our client’s offering
Candidate
This would help.
Problem Statement : Our client is a retailer (Superstore chain) who wants to enter the
Indian market. Do you think it is a good idea?
The Interview
Interviewer
Our client is a retailer (Superstore chain) who wants to enter the Indian
market. Do you think it is a good idea?
Candidate
I would require more information to provide any suggestion. What does it
sell? In which city is it targeting? Who are its competitors?
Interviewer
It sells 80% grocery and remaining is apparels. It is planning to start with
Bangalore. Its closest competitor is Big Bazaar etc.
Candidate
First, I would like to estimate the market size.
Interviewer
Yes, sure. Go ahead.
No of Households Average Basket Size Total Spending
800
1000
800000
800
2000
1600000
400
3000
1200000
Revenue per month
3600000
Candidate
Assuming the client opens a store in Bangalore, I would consider the target
as around 5 km diameter around the store.
Thus, the area under consideration is 3.14*2.5*2.5= 20 sq.km approx
Thus, per month, on an average it could potentially earn Rs. 3.60 million.
To consider opening a store, we would also consider the capital
investment, other costs and estimate the breakeven.
Interviewer
Sure.
Candidate
The population of Bangalore is approx. 80-85 lakhs, assuming number of
households to be 2 million and area of Bangalore is 700-750 sq km. Thus,
per sq km can have 2500 households typically. Thus, the target area would
have approx. 2500*20 = 50,000 households. As assumed, let average
household size be 4, thus there are 2 lakh individuals.
Interviewer
Interviewer
That looks good to me. Thank you.
Candidate
Thank you.
Good, could you estimate its potential revenue?
39
Market Sizing – GROCERY RETAILER
Approach
Number of
Households (~2
million)
÷
Area of Bangalore
(700-750 sq. km)
=
Households per sq.
km (~2500)
X
Target Area
(3.14*2.5*2.5= 20 sq.
km)
Lower Income
Segment (60%)
=
Target Households
(~50,000)
Middle Income
Segment (30%)
Upper Income
Segment (10%)
Assume 10%
market share
40
Guesstimate – DOMESTIC RETAIL FIRM
Candidate : Vivek Gaba
Sector : Retail
Company : ATK
Type of Case : Guesstimate
Vivek
Since the outlet sells a wide variety of products including groceries, food
and electronic items, a large fraction of spent income (70% of total) will
be consumed in buying these items. I would like to assume this fraction to
be 75%. Should I go ahead with this approach or do you want me to
consider some other parameters as well?
Interviewer
The approach is alright. Assume the average income of 30k/ month can be
used as representative for all 4 income groups. Go ahead and estimate the
revenue.
Vivek
Since we have the income figure, we can now calculate the amount being
spent on products sold at modern trade outlet. 0.7*0.75*30k= 15k per
household is used for buying these products. Assuming 4 person per
household, we now need to calculate the number of households in
Bilekahalli.
Interviewer
Okay. How will you estimate Bilekahalli’s population?
Vivek
This can be done using two data points: the area of Bilekahalli and area of
Bangalore city as a whole. We know that population of Bangalore is
around 12 million. Using the two areas we can then calculate Bilekahalli’s
population
Interviewer
Assume the area of Bilekahalli and Bangalore is 5 and 700 square
kilometers respectively.
Vivek
Final revenue will be 15k/4*(5/700*12M)*0.4=128M per month
Interviewer
Good! We are done with the guesstimate
Problem Statement: Estimate the revenue for a modern retail outlet operating in
Bilekahalli.
The Interview
Interviewer
Good Morning Vivek, how are you doing today?
Vivek
Good Morning Sir, everything is great.
Interviewer
Good to hear that. Let’s jump directly to a guesstimate then. You need to
estimate the revenue for a modern retail outlet operating in Bilekahalli.
Vivek
I have a few preliminary questions to help me better understand this retail
outlet’s business. What kind of products are sold at this outlet? What
other similar outlets are available in this area? Is there anything that
differentiates our client from its competitors? What is its market share?
Interviewer
Products like groceries, home care and personal care, electronic goods etc.
are sold at this outlet. There are competitors present in this space and
market share for our client can be assumed to be 40%.
Vivek
Ok, great! I would like to take a minute to think through this.
Interviewer
Sure. Take your time.
Vivek
First, it is important to estimate the income for all 4 classes, High, Middle,
Low and Very Low Income. Then it can be safely assumed, that 30% of
income remains untouched and contributes towards savings. Rest is used
for expenditure.
41
Guesstimate – DOMESTIC RETAIL FIRM
Estimate Revenue
Type of store and
market share
Consumer type &
Spending
Population
Estimate
Revenue =
Population * Income
42
GUESSTIMATE - Capacity Estimation
Candidate : Anant Sharma
Sector : Transportation
Company : AT Kearney
Type of Case : Supply Chain
Problem Statement: We have an airport Developer. They had been given contract of
developing an airport in a Tier2 city. What capacity should they have in mind?
Interviewer
A market research like this will be prohibitively difficult. Suppose you have
a company like Intel in Jabalpur with 2000 employees. Hardly 1% would
fly every month. While there could be a consulting firm which might
require more frequent travels – so scaling might not be correct.
Anant
Ok. I’ll approach this problem differently. I want to consider the passenger
count and their mode of travel in Jabalpur. I would estimate how many I
can expect would shift to Air travel if given an opportunity.
Interviewer
Go ahead.
Anant
So, in Jabalpur roadways and railways are primary modes of transport. I
would like to focus on railway passengers because fares are somewhat
comparable to airways. Jabalpur, a railway junction, is connected to metro
cities in India and if an airport comes up, under hub and spoke model, it
will have flights only to metro cities. I would consider 6 metro cities first
and then scale accordingly. How many trains do we have from Jabalpur to
6 metros ? What’s the occupancy for each of the ticket classes?
Interviewer
Assume 1 to each city and 80% occupancy for all. (Assume that all
passengers are bound to metro destination only)
Ok, a train in general has around 16 coaches. I’ll take 3 3rd AC, 1 second
AC and 1 First AC. I’ll find the number of seats and the occupancy rate.
The Interview
Anant
Good Morning sir!
Interviewer
Good morning, Anant. Tell me something about your role at AlumCom.
Anant
Alumcom’s motto is “Building bridges across time”. So, that’s what we
basically do. We try to ensure that the current students get the maximum
benefit out of experiences of our Alumni and Alum’s feel perennially
connected to campus.
Interviewer
Okay, let’s do a quick case now. Our client is Airport Developer. They had
been given contract of developing an airport in a Tier 2 city. What capacity
should they have in mind?
Anant
Which Tier 2 city are we talking about? Is it in India?
Interviewer
Consider a city like Jabalpur in MP.
Anant
Ok. I will try to get an estimate of fixed passenger traffic that we can
expect. Over that we can have a peak factor to account for seasonal
variations, festivals etc. We can have a look at businesses in Jabalpur and
can classify them like local, multinational and then get an estimate of
number of trips currently required. We can get an estimate from few
companies and then scale it accordingly.
Anant
Interviewer
How much of them would shift to air travel. What factors we can consider?
Anant
Let’s assume IRCTC issues 30% of seats via tatkal, we can assume that 8090% of them would shift to flight given an option as they are already
paying more. For rest 70% (regular bookings), we can apply a blanket
factor of 10% conservatively.
Interviewer
Thanks, Anant. I think we can wrap up the case now.
43
GUESSTIMATE - Capacity Estimation
Approach
Airport
Developer
Geography
Number of
Passengers
Mode of
Transport
Roadways
Target Focus
1st AC
Railways
2nd AC
3rdAC
Coaches in a train = 16
Seats in a 1st = x
Seats in 2nd AC = y
Seats in 3rd AX = z
Occupancy Level = 80%
Capacity = (16x+16y+16z)*8
(Similarly for bus)
44
Auctus Advisors
45
Guesstimate - NUMBER OF PASSENGERS AT AN AIRPORT
Candidate : Abhijit Kande
Sector : Airport Industry
Company : Auctus Advisors
Type of Case : Guesstimate
Approach
Problem Statement: Estimate the number of passengers on Bangalore Airport
No. of
Passengers
The Interview
Runways=4
Interviewer
Good Morning Abhijit, how are you doing today?
Abhijit
Good Morning Sir, I am doing good.
Interviewer
Very well, let’s get started with the case right away.
I need a demand estimation of the number of passengers on Bangalore
airport.
Abhijit
Okay, so there are 4 runways at Bangalore airport. Time between
consecutive take-off or landing is 2 mins . Hence, total number of flights
landing in an hour can be calculated
Interviewer
Ok, go ahead.
Abhijit
The runways operating time is 20 hours. So, total flights can be calculated.
The percentage of domestic and international flights can be assumed?
Interviewer
Yes, go head with any assumption
Abhijit
Okay, domestic and international flights and the seating capacity is
assumed. The number of passengers *flights are the number of
passengers. The calculation is depicted in the flow chart.
capacity per
aircraft=300
Time between consecutive take-off or
landing is 2 mins Hence, total number
of flights landing in an hour = 60/2 = 30
flights Average daily operating time of
the runway is 20 hours. Hence, flights
handled per day = 20X30 = 600 flights
International
30%
Seating
capacity=300*30%
Domestic
70%
capacity per
aircraft=180
Seating
Capacity=180*0%
Average
occupancy=60%
Average seating capacity per flight = 216 (180X70%+300X30%) and average occupancy = 60%
Therefore average number of passengers per flight = 130 (216X60%)
Total passengers per day at Bangalore airport = 78,000 (130X600)
Per year=78000*365=28470000
46
Guesstimate – NUMBER OF PLANES AT AN AIRPORT
Candidate : Koustav
Sector : Airports
Company : Auctus Advisors
Type of Case : Market Sizing Guesstimate
Approach
Problem Statement: How many planes will be there in a day in the Bangalore
aerial region?
No. of planes in the
Bangalore Aerial Region
in a day
The Interview
Interviewer
Hi Koustav, why don’t you tell us something interesting about
yourself?
Koustav
Hello Sir. “Well prepared answer, followed by 2-3 minute
discussion on the same”
Interviewer
That’s interesting. Let’s get going with the case interview then. I
will be asking you a simple market sizing guesstimate. How many
planes will be there in a day in the Bangalore aerial region?
Koustav
I will walk you through my calculations step-by-step.
1. No. of terminals in the Bangalore airport
2. We take a 15 minute window and assume Y flights are taking
off and landing per terminal every 15 minutes
3. Number of terminals multiplied by 24 hours/0.25 hours
(number of time slots in a day) multiplied by Y
Koustav’s Progress
No. of
terminals
X
No. of
flights/15 mins
X
No. of 15
minute
intervals in a
day = 24/0.25
Draws a flowchart depicting the process of arriving at the final
estimate for the number of planes in the Bangalore aerial (See
Approach on the right)
47
Profitability/Resource Utilization – HOTEL
Candidate : Vinaya Hegde
Sector : Hospitality
Company : Auctus Advisors
Type of Case : Resource Utilization
Problem Statement: Your client is a hotel owner. He has recently inaugurated a hall. He
is thinking of either offering it as a marriage hall or as conference hall. What would you
recommend?
Interviewer
Yes, you can go ahead with these assumptions.
Vinaya
To analyze both the possible decisions, I would like to break down the
profitability into revenue and cost for both the situations.
Interviewer
Could you please take us through the cost side of both the cases.
Vinaya
Alright. The cost side would have more variable cost in the case of setting
up a marriage hall – customized decoration and functional needs for every
marriage. Also, the maintenance cost could be higher due to more casual
usage by the guests. In case of conference hall, relatively, the
requirements would be similar and not much investments would be
required at regular intervals.
Should I also look at the revenue side?
Interviewer
Only tell us the most important factor you would consider while
evaluating the revenue for both the cases?
Vinaya
So, I would consider the frequency of booking, which would be relatively
more variable (seasonal) in case of marriage hall. On the contrary, the
booking could be stable for conference hall due to its location in the
vicinity of airport.
The Interview
Interviewer
Hello Vinaya, how are you doing today?
Vinaya
Hello Sir, I am doing good.
Interviewer
Very well, let’s get started with the case right away.
Interviewer
Your client is a hotel owner. He has recently inaugurated a hall on the
ground floor. He is thinking of either offering it as a marriage hall or as
conference hall. What would you recommend?
Vinaya
I would require more information to provide any suggestion.
Interviewer
Yes, go ahead.
Vinaya
In which city is the hotel located? What is the type of locality? How big is
the hotel?
Interviewer
I think this would be enough for our discussion. We should wrap it up
here.
Interviewer
The client is running a 3-star hotel close to the Mumbai airport.
Vinaya
Thanks.
Vinaya
Can I take a minute to pen down my thoughts?
Interviewer
Sure.
Vinaya
I will assume that since the conference hall belongs to a 3-start hotel, it
would be equipped with basic amenities – air conditioned, big enough for
200+ gathering, wi-fi, good lightings.
48
Profitability/Resource Utilization – HOTEL
Approach
Profitability
No. of
Bookings
Cost
Wedding Hall: Seasonal
Conference Hall: Regular
Revenue
Price
Variable Cost
Fixed Cost
Maintenance
Cost
Insurance, legal
and taxes
Advertising
Initial Set-up
cost
Customization
Cost
Food &
beverages
Support staff
cost
Utility Bills
(usage based)
49
Revenue Maximization – METRO RAIL
Candidate : Vinaya
Sector : Transportation
Company : Auctus Advisors
Type of Case : Maximizing Revenue
Problem Statement: The client is a Metro train operator. The ridership for the city has
become stable now and it is not possible to increase fare prices. How would the
operator generate additional revenue to manage its rising expenses?
The Interview
Vinaya
The broad avenues for generating non fare revenues are advertising, food
and beverages outlets, and other spaces available for rent at the station
premise. Additionally, the trains can themselves be used as advertising
platforms.
Interviewer
Okay, so do you think all these options can be standardized across all
stations?
Vinaya
No. Since the revenue from rented spaces and food and beverages outlets
depends on the size of the stations and also the location, we cannot
standardize all the options.
However, advertisement strategy can be standardize in terms of billboard
and TV sizes and their placements around the stations.
Interviewer
Hi Vinaya, how was your day? Tell me something about yourself.
Vinaya
(a prepared answer is provided)
Interviewer
Tell me one thing that you have done is your life which you are proud of
and one things that think you messed up.
Interviewer
Now suppose you have to chart a plan to execute your proposals. How
would you prioritize the implementation plan?
Vinaya
(a prepared answer is provided)
Vinaya
Interviewer
Let’s now discuss a case.
The execution can first be targeted at the stations with maximum footfall
and can then later scaled to other stations.
Interviewer
The client is a Metro train operator. The ridership for the city has become
stable now and it is not possible to increase fare prices. How would the
operator generate additional revenue to manage its rising expenses?
Interviewer
This sounds good. We will stop here.
Vinaya
Thanks you.
Vinaya
Before I begin to break down the problem, can I please ask some
clarification questions?
Interviewer
Yes, Go ahead.
Vinaya
What reference metro city can I assume for this case?
Interviewer
You can assume the city to be Bengaluru.
Vinaya
(makes notes)
50
Revenue Maximization – METRO RAIL
Approach
Non Fare
Revenue
Advertisement
at station
Indoor and
outdoor
Static Ads
(billboards)
Advertisement
on Train
Dynamic Ads
(TVs)
Food & Beverages
outlets
Rented
Spaces
ATM/Vending
machines
Mini-Stalls
(non-food)
Limited to larger
stations
Parking Lots
51
Revenue Streams – METRO PROJECT
Candidate : Koustav
Sector : Public Sector
Company : Auctus Advisors
Type of Case : Revenue Streams
Problem Statement: Your client is the government. A metro project is currently
underway. The client wants to know how to increase its non-fare revenues.
The Interview
Interviewer
Good Morning Koustav, tell us something about yourself?
Koustav
Good Morning Sir. Prepared a generic answer for this.
Interviewer
That’s good to hear. Let’s get started with the case. Your client is the Indian
government and a metro project in underway. There are land parcels
around the metro station and some area in the mezzanine level and the
concourse level, what can we do with it to increase non-fare revenues?
Koustav
Okay, the client wants me to look at various ways of increasing non-fare
revenues inside the metro station and outside the metro station. We will,
first look into the area next to the metro station. Either a residential
project or a commercial project can be executed there.
Interviewer
How will you evaluate which option to go with?
Koustav
Alright. So there are 3 aspects through which we can determine which
option, residential or commercial we should choose:
a. Demand and supply for each type of project
b. The profitability rate and occupancy rate for each type of
project
c. NPV calculation for each project after which we choose the
one with the higher NPV
Interviewer
Ok. Perfect. What are the sources of non-fare revenue inside the metro
station?
Koustav
There are two sources of revenue. Firstly, the area in the mezzanine level
could be utilized for retail stores. Secondly, the space inside the metro
station could also be used for advertising in terms of signages, digital
advertising boards.
Interviewer
Could you elaborate on what kind of retail stores could be opened?
Koustav
The most relevant store to open could be a QSR (quick service food and
beverage) store. General purpose stores like WHS Smith could also be
opened.
Interviewer
How would you determine which store to open?
Koustav
Your firstly analyze the passenger demographics in the nearby area.
If the station is situated in an office area, food and beverage will sell more,
and thus you give more space to food stores and less to general stores.
Interviewer
What are other non-fare sources of revenue that you can think of?
Koustav
1.
2.
Interviewer
Token Brands- Each token can have the logo/advertisement of a
certain brand who will pay royalty fees for it.
Station naming rights can be given out for a monthly charge.
Very Good, we’ll see you in the second round.
52
Revenue Streams – METRO PROJECT
Approach
Non- Fare Revenue
Streams
Inside the Metro
Station
Retail Stores
Quick Service Food
and Beverage Store
AdvertisingSignages and
banners
General Stores
like WHS Smith
Prior to making a choice
between QSF and general
stores, analyze the passenger
demographics in the nearby
area.
Outside the Metro
Station (Empty Land)
Residential
Project
Commercial
Project
Consider the following factors
prior to making a choice
between residential or
commercial project:
a. Demand and supply for
each type of project
b. The profitability rate and
occupancy rate for each
type of project
c. NPV calculation for each
project after which we
choose the one with the
higher NPV
53
Bain & Co.
54
Guesstimate - DUE DILIGENCE OF A MULTIPLEX
Candidate : Aman Chedda
Sector : Entertainment
Company : Bain & Co.
Type of Case : Guesstimate + Due Diligence
Interviewer
Make that 100 for ease of calculation.
Aman
Okay, thank you. So, the revenue will be: number of screens* number of
shows* occupancy for that show* average ticket prize.
Now, for occupancy, we will consider peak and non-peak hours. Let’s say
the run time at PVR is from 10 am to 12 am which is a total of 14 hours.
Taking the average run time of a movie as 2.5 hours, we can approximate
the number of shows to 5 per day. Occupancy will also differ on weekdays
and weekends. On weekdays, approximately 30% occupancy and on
weekends approximately 80% occupancy can be assumed. Ticket Price on
weekday is taken as ₹250 and on weekends as ₹350.
Problem Statement: Leading multiplex wishes to evaluate its revenue . Has been facing a
decline in its occupancy rates - wants to understand the causes and solutions for the same.
The Interview
Aman
Good Morning Sir!
Interviewer
Good morning! I see you’ve studied at the Bombay Scottish School. I
worked at Bain in Mumbai myself. Anyway, let’s start the case. Now, this
case is about the due diligence of a multiplex.
Interviewer
Okay, so you’ve got the approach. Now, let’s say the client is facing a
decline in occupancy of late. Can you think of possible reasons why?
Aman
Okay, should I analyze the revenue or the profitability or another aspect?
Aman
Interviewer
Please focus on the revenue.
Aman
Okay, so the possible sources of revenue can be – tickets, parking charges,
auxiliary items available at the cinema, shopping outlets at the cinema.
There could be multiple reasons such as :
1. Rise of at home consumption through platforms - Netflix/Hotstar, etc.
2. Increasing trend towards live events, especially during IPL.
3. Maybe the content quality is going down.
4. Pirated copies are easily available.
Interviewer
(interrupts) Please focus on the tickets. Why don’t you guesstimate the
revenue in a city like Mumbai? Consider a PVR in Mumbai.
Interviewer
So, how do you think they can improve their revenue?
Progress
Interviewer leaves the room. Candidate starts to panic. Interviewer comes
back after a couple of minutes and demands an answer.
Aman
Okay. Please give me a minute to frame my approach.
Interviewer
Sure, go ahead.
Aman
Aman
So, Mumbai’s area is 600 km2. In a 5km radius, there are 2 PVRs.
Therefore, we can say that approximately for every 25 km2 there is 1 PVR.
So, approximately there will be 24 PVR multiplexes in Mumbai. Each will
have at least 4 screens. So, the total screens will be 96.
The multiplex could come up loyalty cards to incentivize customers. It
could offer enticing packages of popcorn + tickets . It could work on the
ambience of the theatre. It could give premier and loyal viewer offers. It
could focus on providing a good experience since viewers value that most.
Interviewer
Okay, great. Thank you and Welcome to Bain!
55
Guesstimate - DUE DILIGENCE OF A MULTIPLEX
Approach
Multiplex
Single
Screen
Franchise
(PVR)
Source of revenue
Mumbai’s area = 600 km2 with 2 PVRs/5km radius. Every 25 km2 there
is 1 PVR -> 24 PVR multiplexes in Mumbai. Screens per PVR = 4. Total
screens = 96.
Ticket
Others
Assumptions
Total screens in
Mumbai
Total Revenue
TR = Number of screens* Number of shows* Occupancy for that show*
Average ticket prize
Run Time/day
14 hours
Average Run
time/movie
2.5
Weekday
occupancy
Weekend
Occupancy
30%
80%
= Number of screens*[5*weekday occupancy *weekday ticket price]+
Number of screens[2*weekend occupancy*weekend ticket price]
Weekday ticket
price
Weekend ticket
price
=96*[5*0.3*250] + 96*[5*0.8*350]
₹ 250
₹350
56
Market Share Estimation - GROCERY RETAIL
Candidate : Ruchika
Sector : Retail (Grocery)
Company : Bain & Co.
Type of Case : Increase Market Share
Interviewer
Okay, sure.
Ruchika
Problem Statement: A hyper-local grocery supermarket wished to increase its market
share. What should it do?
Such professionals consider convenience primary. Now does this store
offer any discounts?
Interviewer
No. Think about why would someone want to go here other than say a
Reliance Fresh?
The Interview
Ruchika
Primarily because it is near me or during emergencies. I would rather take
out time over the weekend and go to a Reliance Fresh and buy everything
in one go.
Interviewer
Okay, if that is the case, how can this store gain market share.
Ruchika
Okay, so the target includes bachelors who are lazy and like convenience.
So what this shop could do is –
A) it could provide varieties that others don’t have and could charge a
premium on that and cross subsidize the price.
B) It could provide discounts.
C) It could provide door to door services which would be much cheaper
for the customer versus other options.
Bang on, this is exactly what we did. You have solved the case.
Ruchika
Good Morning sir!
Interviewer
Good morning. The case we will be discussing today is about a hyper local
grocery store which sells local, exotic and frozen vegetables. It wishes to
capture more of the market share. How will you approach this?
Ruchika
Could you please clarify what market share signifies in this case? Does it
signify share in terms of volume or revenue?
Interviewer
Take it as revenue.
Ruchika
Okay, which geography are we dealing with?
Interviewer
Take Gurgaon.
Ruchika
Okay, so I am assuming that Gurgaon is a very working professional heavy
place where there are concentrated sections of such people.
Interviewer
Correct. Assume it is located near cyber city.
Ruchika
Okay, so the demographic of this place will be of bachelors or early
married couples. So, I will look at their purchase patterns to understand
how to drive quantity.
Interviewer
57
Market Share Estimation – GROCERY RETAIL
Approach
Grocery Store
Focus for market
share
Revenue
Volumes
Geography
Consumer
Behaviour
Quality
Needs
Value
Additions
Diversified
Products
Compared to close
competitors
Discounts
Door to Door
Service
58
Performance Improvement – IT CONSULTING
Candidate : Maitresh Agarwal
Sector : IT consulting
Company : Bain & Co.
Type of Case : Cost reduction
Problem Statement: Can you tell me the KPIs of the sales team required for hunting?
The Interview
Interviewer
Good Morning, Maitresh. Why don’t you start by telling me something
about yourself?
Maitresh
Good Morning. I was born and brought up in Bihar and have completed my
primary and secondary education from Patna. I joined Economics Program
at IIT Kanpur for my under graduation and was working with PwC Diamond
Office in Mumbai for 10 months before joining MBA program here at IIM
Bangalore.
Maitresh
For the client hunting team – KPIs – Revenue per sale employee, clients
converted per employee per unit time
Interviewer
Which one do you think is the metric of higher priority?
Maitresh
Revenue – because number quality of client matter, not just the number
Interviewer
Okay, how would you improve this metric for the sales team?
Maitresh
Performance linked incentives for the sales (hunting) team so they
achieve the KPIs
Interviewer
Ok, let’s say the sales team is incentivized and everything. The
organization has many functions that support the sales team – e.g.
product sales div. How would this support the sales team? How will you
incentivize these supporting divisions?
Maitresh
Functions identified – product, account management, lead generation
(with many hints that the interviewer was dropping), tele-calling team
Interviewer
Great, so you do have some bit of experience in the industry.
Maitresh
Yes Sir
Interviewer
Correct, how can their performance be measured? And maybe improved?
Interviewer
Okay so let’s start with a case. We are an IT Consulting company. We have
few, but big marquee clients who want to improve their hunting
capabilities. Can you tell me ways to help them achieve this goal?
Maitresh
Interview
Progress
I started with preliminary questions
where/what/who are we?
Maitresh
I restated the problem and asked what exactly am I required to find out.
Interviewer
Can you tell me the KPIs of the sales team required for hunting?
The people in the product team will help prepare the pitch deck for sales
team and how they can cross – sell and up-sell various products.
The people in the account management team will help with onboarding
and opening of the account. So how many accounts they open and what
kind of retention rates they hold.
Lead generation team – divide # of leads in 3 buckets (Hot, Cold and Junk)
and based on the %age of these leads/totals leads can decide their
variable pay. Tele-calling team – How many appointments they are able to
fix and what is the amount of potential revenue they are bringing in.
– what kind of clients,
59
Performance Improvement – IT CONSULTING
Approach
Interviewer
Okay, Impressive. Tell me what kind of incentive structure you will have for
account management team?
Interview
Progress
I laid out a broad 4P (Product, Placement, Price and Promotion) framework
to further my analysis
Maitresh
The account management team should have a fixed bonus pay for each
account they can open based on the client’s revenue category (Gold, silver,
Bronze) and also once the account has been active for at least 6 months to
make sure they keep the clients engaged and farming revenue from them.
Interviewer
Thanks, Maitresh. I think we can wrap up the case now.
Maitresh
Thanks.
Interviewer
We would like to extend the offer to you, will you accept it or reject it?
Maitresh
(after 10 seconds of being zoned out) definitely accept the offer (I was not
able to fathom the feeling that I was through in one round and did not
apply a single case concept learnt in past 50 days.)
KPI
Clients
converted/empl
oyee/unit time
Revenue per
sale employee
Increase by
incentives
Product
Pitch for Sales
Account
Management
Lead Generation
Appointment
fixation and
potential revenue
A/C opening &
Management
Hot
Telecalling
Cold
Junk
60
Market Entry - QUICK SERVING RESTAURANT
Candidate : Karan Tulsiyan
Sector : Service
Company : Bain & Co.
Type of Case : Go to market
Problem Statement: You have to open a QSR (Quick Serving Restaurant) in Bangalore,
which place would you choose, which product and then we will go towards pricing
and finally its feasibility
The
Interview Good Morning, Karan! How are you feeling today?
Interviewer
Interviewer
You have to open a unique restaurant, you can choose your expertise.
Moreover, a QSR is generally a fast food serving place.
Karan
Ok, thank you, I would begin by deciding the place first, considering it’s a
QSR, I would prefer to open in Koramangala, which caters to both the
college going crowd as well as shoppers.
Interviewer
Okay, which food will you prefer to serve?
Karan
I will to open a roll joint, preferably north Indian, considering that
Bangalore now has a huge influx of people from north both for studies and
work. Moreover, there are very less restaurants serving the same and
hence would be a differentiator.
Karan
Good Morning. I am feeling good, a little nervous maybe.
Interviewer
Being little nervous is always good before an interview, you have
mentioned in your CV that you had a self-owned business, then why
consulting?
Karan
Yes definitely, while I was working into my business I was basically acting as
a negotiator between buyers and sellers of edible oils, in B2B space, a part
of the work also included monitoring production plants and solve supply
chain issues, this prompted me to think that if I can solve problem for small
companies, why not work for diverse sectors and bigger companies, hence
consulting.
Interviewer
Okay! That was well thought. So Karan! How will you proceed next?
Karan
The next thing would be to find a place to rent in Koramangala which has
an easy visibility and should be near to crowd gathering areas. Do we have
any budget in mind?
Interviewer
Well that’s interesting, without wasting time any further let us start with
the case
Interviewer
On point! We do not have any budget, why don’t you guess the same.
Interview
Progress
You have to open a QSR (Quick Serving Restaurant) in Bangalore, which
place would you choose, which product and then we will go towards pricing
and finally its feasibility
Karan
Okay, according me a small shop in Koramangala would be around 25k per
month. Should I proceed with it?
Interviewer
Yes, you can go ahead but before that lets do a small guestimate, estimate
the sales you would have daily qualitatively.
Karan
I have a few preliminary questions to help me make a better decision, to
start with do we need to open a unique QSR or any well-established brand?
61
Market Entry - QUICK SERVING RESTAURANT
Karan
To estimate our sales (monthly, for quick calculations), it is generally a
product of avg. no. of rolls sold each day & avg. price per roll. To estimate
the number of rolls sold, I would begin by estimating the number of
people visiting Koramangala each day. To estimate that, I would begin by
population of Bangalore, classifying it according to age and then
concentrating on people from 15 to 45 as our target customer. After
calculating this number, I would take a 10% factor who would visit
the area every day & inflate it for weekends. After we get this no., I would
give a 5% chance of people visiting our store and making a purchase.
Should I move ahead, or do you want me to rethink on some part?
Interviewer
The thought process looks clear, but how did you choose 5% as a fair
probability and how would you decide the price?
Karan
I choose a 5% probability because there are various shops already present
around the area which would be a direct competition for us, moreover not
everyone prefers roll, so I assigned a low probability to it. Coming to
pricing, there are generally 3 ways of pricing, cost-based pricing; valuebased pricing & competitor-based pricing. Before I move ahead, do we
have any data regarding the competitors and do you wish me to elaborate
more on 5%?
Interviewer
Karan
Interviewer
No, 5% was a well thought answer, and we do not have any data regarding
competitors. Why don’t you go ahead with cost-based pricing?
Sure! To calculate through cost-based pricing, I will divide the cost into
fixed & variable. Considering the fixed costs would be that of labour, rent,
chef’s salary, tools & utensils; and variable cost primary would be
vegetables, fruits and chicken & cooking gas. Do you want me estimate all
of this or should I assume convenient numbers?
You can assume that per roll costs 50 inclusive of fixed cost, how much
profit will you charge and how will you check the feasibility?
Karan
Since it will be a new business, I will like to keep the margin low at 20 per
roll and then I would divide the fixed cost by my margin to take out the
breakeven point. If my annual sales (in no of rolls) is greater than the
breakeven sales, it will be profitable for me to move ahead and start it,
hence making it feasible.
Interviewer
It’s exactly what I was thinking. Karan, do you think that you are missing
on something?
Karan
(After taking a minute to think) As far as I can think, I missed out on 2
things.
Firstly, we did talk about price, place & product but we did not talk about
promotion which would be a considerable part of my cost initially.
Secondly, while considering sales I forgot about delivery system as well.
Interviewer
Exactly, what you missed out, now since you have figured that out, can
you quickly state how will these factors play in your case
Karan
Talking about marketing cost, I think it will be around 20-30% as it would
include discounts, online & offline advertisements. It would eventually
fall below 20% after sales stabilize.
Interviewer
Okay!!, well thought and what about food delivery, how would you
venture into it?
Karan
Well, since we have started the business now, we will tie-up with swiggy,
uber eats etc. It will not only increase our sales but would also be a
source of our online promotion through reach. The channel will have its
costs, but it also has the potential to increase our sales by 50%.
Interviewer
That’s right. Also, these channels will help you reduce your cost in
delivery vehicles and delivery boys and hence would help you expand
easily. We can close the case now.
Karan
Thank you, Ma’am. It was good to talk to you!
62
Market Entry - QUICK SERVING RESTAURANT
Interviewer
Thanks Karan. You did a great job and fairly covered everything, its already
20 mins why didn’t I hear the knock!!
Karan
I was extended an offer after the first round, the case although was
comprehensive and involved a lot of things but it is very important to buyin from interviewer at every stage because it helps removing unnecessary
information.
Approach
Market Entry
North Indian or
South Indian
Place
(Kormangala)
Price
Product
Value Based
pricing
Cost Based
Pricing
Competitor
based pricing
Promotion
Advertising
Personal Selling
Fast Food(rolls)
Fixed Costs
Utensils and
tools
Variable Costs
Sales Promotion
Rent
Labour Salary
Raw Materials
63
Cost Optimization - LAUNCH OF CUSTOMER ENGAGEMENT PORTAL FOR FMCG
Candidate : Anwesha Behera
Sector : IT/ITeS
Company : Bain & Company
Type of Case : Cost Optimization
Problem Statement: Your client is an FMCG company. They want to bring up a
customer engagement portal that serves as an informational platform for all their
brands. You have 2 options:
1. A 1000-strong ITeS team of a local company that is based out of Bangalore
2. A 1000-strong captive unit as a part of a UK-based company.
The Interview
Interviewer
Good Morning Anwesha, how are you doing today?
Anwesha
Good Morning Sir, I am doing good.
Interviewer
Very well, Let’s see what is there on your resume.
Anwesha
Sure Sir.
Interviewer
Okay Anwesha, let’s now move to the case. ~ Explains the problem
Anwesha
Is the portal meant to be a web application or mobile application?
Interviewer
Consider it to be a web portal
Anwesha
So, our decision involves choosing between two alternatives to help bring
this engagement portal to our customers. May I know as to what key
metrics are, we looking out for, as a company, when choosing between
these two alternatives?
Interviewer
We want to ensure that the team we choose is technically competent to
execute this project. Also, we want to involve minimum cost while carrying
out the same.
Anwesha
I’d like to look at the first metric you mentioned – technical competencies.
Do we have any information about how options A and B compare to each
other in terms of their technical prowess?
Interviewer
Both teams are equal in terms of technological capabilities.
Anwesha
In that case I will keep that aside as it seems that it might not be a
determining factor. I’ll move on the next metric – costs. Is the second team
also based out of Bangalore?
Interviewer
Yes, in fact both teams have local employees and technical experts.
Anwesha
Alright. I’d like to analyze the value chain to better determine components
along which these two teams may differ. (I draw the standard value chain
briefly, without expanding all). I would want to highlight on just the
marketing and sales section as we’re dealing with customers who would
either want more information about the products they’ve bought, are
planning to buy or want to engage with the brand. Our customer
engagement portal would fit in right here, if I’m not wrong.
Interviewer
Yes, that’s right
Anwesha
Without further ado, I’ll dive into what cost components might exist for
the portal. I’ll take the salaries of our employees, the IP rights that ~might~
be a concern if we’re planning to own the portal’s source code, data
repositories (if we want to store any customer data, cookies etc.) as well as
maintenance of the database and portal itself.
Interviewer
You can take the IP rights not to be a concern as web services like these
aren’t usually bought over these days, they aren’t that unique and have
been commercialized. You can also ignore maintenance costs for now.
Some additional information is that the captive unit will function as our
own team full-time
64
Cost Optimization - LAUNCH OF CUSTOMER ENGAGEMENT PORTAL FOR FMCG
Candidate : Anwesha Behera
Sector : IT/ITeS
Company : Bain & Company
Type of Case : Cost Optimization
Anwesha
Problem Statement: Your client is an FMCG company. They want to bring up a
customer engagement portal that serves as an informational platform for all their
brands. You have 2 options:
1. A 1000-strong ITeS team of a local company that is based out of Bangalore
2. A 1000-strong captive unit as a part of a UK-based company.
You mentioned the team’s capabilities to be the same. However, the
composition of the 1000-member team might be different. There might be
more senior managers in one of the teams, wherein the other team might
have more entry level employees. At different levels we would have to pay
our employees differently.
Interviewer
Yes that’s right. This greatly determines how much the portal project may
cost us.
Can you figure out which level employees have a greater impact if they
were to leave?
The Interview
Anwesha
Yes, senior managers leaving would greatly hurt our business as they have
more technological and managerial capabilities accumulated over the
years. It would be costly to replace them
Interviewer
What costs might be involved with attrition of entry level employees?
Anwesha
Retraining costs, mostly. We would be offering the same salary package to
our new hires most likely
Anwesha
I see. I’ll dive right into the salaries of our employees. I’ll list out various
components that must be considered for the same – monthly wages,
healthcare insurance, other perks etc. Any of these you’d like me to focus
at?
Interviewer
You can assume that salaries are comparable
Anwesha
Are their insurance coverages different?
Interviewer
You can ignore all perks
Anwesha
In that case, if I were to look at the employees, in order to execute their
goals well, they must have the ability and the willingness to work towards
achieving the goals. My hunch is that since you mentioned that the team’s
abilities are comparable, would they be having different motivations
towards the tasks (probably because the first outsourced team has other
projects to complete hence might not give their best)?
Interviewer
This is a valid point; however it does not relate to our costs directly, that
you initially identified as one of our objectives.
65
Cost Optimization - LAUNCH OF CUSTOMER ENGAGEMENT PORTAL FOR FMCG
Approach
Engagement
Portal
Mobile
Application
Key Metrics for
Analysis
Whether Teams
are equally
competent
This Metrics will
not impact the
decision we
should move to
other metrics
Web Portal
Technically
Competent
Team
Minimum Costs
Whether Teams
are not equally
competent
Salaries of
Employees
We should
choose the
option which
has more
competence
Portal will fit in
Marketing and
Sales
Understand the
value change
IP Rights and
costs for owning
the source code
Maintenance
cost of the
database
Perks associated
with each option
Analyse the
competence on
basis of ability to
perform tasks
and achieve
goals
Assess the composition
of the employees
amongst both team.
Top management or
entry level
Top management
employees to have
more impact on overall
costs.
Entry level employees
to have training costs.
66
Declining Revenues – IT INDUSTRY
Candidate : Ankit Saxena
Sector : IT
Company : Bain & Company
Type of Case : Declining Revenues
Ankit
Very well, it is clear that the external environment has not impacted
revenues adversely. Since Revenues = Price X Quantity , I would like to
understand whether the price of the offerings have been reduced or
whether the quantity sold has declined.
Interviewer
The quantity sold has declined.
Ankit
Is this primarily because new competitors have come into the market?
The Interview
Interviewer
No.
Interviewer
Good Morning Ankit, let’s get started with the case unless you have any
preliminary questions for us?
Ankit
Is there an issue with the acquiring new customers or retaining old ones?
Interviewer
Yes. Dive deeper into this issue.
Ankit
Good Morning Sir. Sure, we can start with the case.
Ankit
What are the different sales channels?
Interviewer
Well. Your client is an IT company facing declining revenues. Why were the
revenues declining and how would you solve the issue?
Interviewer
There are sales channel agents who pitch the company to new clients.
Ankit
I would like to ask some preliminary questions:
1. What was the duration of the revenue decline?
2. What were the regions/markets in which the company was facing the
decline?
3. Are competitors facing the same issue?
4. Are there external factors such as a slowdown in the economy/
recession affecting the company?
Ankit
Are they well-trained and qualified?
Interviewer
Actually, there was some churn in the sales team due to which the
company had to hire new salesmen who weren’t experienced enough to
retain existing clients or acquire new ones. There attrition rate of
salesmen was also high in the firm. What recommendations would you
give a firm facing such an issue?
Ankit
1. Issue long-term contracts with employees.
2. Provide training to new salesmen.
3. Give higher commissions for each sale and provide incentives to sales
men to maintain effective long-term effective relationships with their
customers.
Problem Statement: An IT company in India is experiencing a problem of declining
revenues. Why were the revenues declining?
Interviewer
The revenues have been declining for a year across India. Competitors are
not facing the same issue and there isn’t a slowdown in the economy.
Ankit’s
Progress
Asks questions about all aspects of the PESTEL framework to check
whether the external environment has affected the company’s revenues
adversely.
67
Declining Revenues – IT INDUSTRY
Approach
Declining Revenues
External Reasons
for Declining
Revenues
Internal Reasons
for Declining
Revenues
Quantity
MECE
Sales
Channels
Sales
channel
Agents
Price
Not to be
considered
PESTEL Analysis
Competitor
Analysis
Market Analysis
No significant change
Final Answer
68
Unconventional - INCREASE ATTACH RATES OF SWITCH/ROUTER FOR CISCO
Candidate : Vishwajith G Bhat
Sector : Technology/Product
Company : Bain & Co.
Type of Case : Unconventional
Problem Statement: You are working with CISCO to help increase their
attach rates of their switch/router in India
Vishwajith
I have a few preliminary questions that will help me with the case. What is
the product portfolio of the switches/router business? What exactly do we
mean by attach rate? Also, are there any other objectives in this case?
Interviewer
For the simplicity of the case, assume that there is only one product – the
router. Attach rate is the percentage of clients opting for warranties of
their CISCO product to the total CISCO product sold. Lastly, no. There are
no additional objectives to this
Vishwajith
Ok. I have a reasonable idea of the product. Next, I wanted to understand
a bit more about the value chain. From my understanding, the value chain
comprises of the procurement (inbound logistics), manufacturing of
routers, distribution of routers (supply chain), finance and marketing as the
main arms. Have I missed anything?
Interviewer
No. The value chain seems fine. Anything in specific that you would like to
dwell into?
Vishwajith
Great. Can you kindly explain as to what is the existing supply chain for the
router?
Interviewer
There are two main channels of distribution – distributors and system
integrators. The distributors provide the router as an independent product
and sell it to small/medium businesses. Some examples include Simple,
Ingeram, Reddington, etc. System integrators are large firms that provide
the end-to-end solution such as WIPRO, TELCO’s, etc.
Vishwajith
Thanks. I would like to compare the two channels across the two markets
– India vs globally. What is the percentage split for the distribution
channels? What exactly is the difference between the two distribution
channels with respect to warranty renewals? Also, what is the net
realization for these distribution channels?
The Interview
Interviewer
Hello Vishwajith, kindly take a seat. How are you doing today?
Vishwajith
Good Morning. I am doing fine. A little nervous on account of Day Z.
Interviewer
Good, then let us get directly into the case. It is a slightly lengthy case, so
make a good note of the case facts. Your client is CISCO, an American
multinational technology conglomerate headquartered in San Jose,
California, in the center of Silicon Valley. It has entered into the
switch/router business in India about 6-7 years ago. Assume that the cost
of this switch/router is about $ 100. It currently offers warranties at
multiple levels: a) First warranty is priced is at an 8% premium over the
product and as a part of this warranty, CISCO offers call/remote support to
its clients and in-case the router issue is not fixed over call, the customer
then couriers the faulty product to CISCO and it repairs it and re-sends it to
the customer b) Second warranty is priced upto 35% of premium over the
product. CISCO assures its customers that the technical team will be onsite within 1 hour to respond to the situation. CISCO has observed a very
unique situation in India. While globally, the attach rate is about 97% in
Year 1, 80% in Year 2 and about 70% in Year 3, in India, the attach rate is
only 40% in Year 1, 20% in Year 2 and less than 10% in Year 3. You have
been tasked with helping the client increase their attach rate. How will you
go about it?
69
Unconventional - INCREASE ATTACH RATES OF SWITCH/ROUTER FOR CISCO
Candidate : Vishwajith G Bhat
Sector : Technology/Product
Problem Statement: You are working with CISCO to help increase their
attach rates of their switch/router in India
Interviewer
Good follow up questions. In India, the split between distributors and
integrators is 40:60 and globally, this is about 70:30. With respect to
renewals, the attach rates in India for the distributors is 50%, for the
integrators is 33%. Globally, this is 97% respectively for both the
distributors and the integrators. Further, the net realization rate is about
9% in India, while it is about 16% globally.
Vishwajith
Ok. So, from the case facts, I can understand that there are two primary
issues in India – the attach rate is low (about 40% vs 97%) and the net
realization is also on the lower side.
[Progress]
I was able to get majority of the case facts early in the case. The case then
meandered for a bit in the middle as I tried to structure the data available.
Vishwajith
I would like to understand the competitive landscape in India and globally
and understand the points of difference if any. Also, I would like to look at
the differences if any between the Indian applications/utility for these
routers v/s those globally. Also, I would like to understand a bit more about
the consumer preferences in these two countries.
Interviewer
are generally system integrators – small and medium purchase from the
distributors and the large ones directly.
Company : Bain & Co.
Type of Case : Unconventional
Okay. For the sake of simplicity, you can assume that the router provided
by CISCO is unique in the world and that the company has a near
monopoly in this respect. As for the second question, the end customers
Vishwajith
Ok. So, CISCO has monopoly in this space and its end customers are the
system integrators. The primary requirement for the attach service comes
from the failure of devices. I would like to understand the usual failure
rates of these routers, both in India and globally.
Interviewer
Good. The failure rate in India is seen to be higher than globally, primarily
driven by high voltage fluctuations. You can assume that the total failure
rate is about 0.23% on average in the first 5 years of usage.
Vishwajith
So, from what I understand, the failure rate is less than 0.25%. Even if I
assume a safety factor of 4x, it will be about 1% of the cost. Thus, for every
100 such routers, 1 extra spare will suffice. Thus, due to the low failure
rates, the value of spare and hence warranty is less than 1$ per unit. This is
much lower than the basic warranty being provided – 8$ per unit. This
could be one of the potential reasons as to why we are seeing lower attach
rates in India vs globally.
Interviewer
Hmm, correct. So, what can we do?
Vishwajith
I would like to examine the distribution channels – the margins involved
and if we can push it via the distribution channels.
Interviewer
Both the distributors and integrators are getting double digit margins on
the unit. The margins are consistent across.
Vishwajith
Also, another factor could be the variation between the warranty attach
rates in the channels across the two geographies, which is seen in the net
realization of 9% v/s 16% globally. From this, I can conclude that in the
Indian context, the preference is towards the lower warranty – 8%. I would
like to focus on first increasing the attach rate and then focus on the net
realization. Is this approach fine?
70
Unconventional - INCREASE ATTACH RATES OF SWITCH/ROUTER FOR CISCO
Candidate : Vishwajith G Bhat
Sector : Technology/Product
Company : Bain & Co.
Type of Case : Unconventional
to change this?
Interviewer
Yes. In interest of time, I can tell you what was implemented. The pricing
was set at 5% for the base warranty from year 1 onwards. As seen in the
case, the attach rate is about 40% in India. If the net realization is taken at
9%, this is about 3.6$ for 100$ unit. If we are charging 5% (assuming 100%
net realization), we are gaining 1.4$ per 100$ unit.
[Progress]
The interviewer asked me to think about the final strategy deployed in
terms of long-term solution and left the room (about 25 mins into the
interview)
Vishwajith
I have broken down the long term solution into three parts (roughly 3⁄4
P’s):
1) Contracts: Look to extend additional value add ons to the second
warranty and look to push these services.
A) Further, look to getting into providing multi-year contracts with a
mix of warranty 1 and warranty 2.
B) Focus on distributors as their dependence/bargaining power is
lower.
2) Services: Develop an additional services arm, dedicated to providing
additional service options and look to provide this as a add on package,
over and above the existing warranty options
3) Integration: Look to building a module/unit around the core product –
routers and offer this as a package to the customers
Interviewer
Well, these recommendations were thought of by the team, however, the
final approach proposed was different from these recommendations. I
think we can wrap up this case.
Vishwajith
Thanks.
Conclusion
I asked the interviewer for the final solution. During the course of our final
discussion, he revealed that CISCO would look to integration of software
71
Problem Statement: You are working with CISCO to help increase their
attach rates of their switch/router in India
Interviewer
Sure. Go ahead
[Progress]
I had further identified the problem – price of maintaining spares v/s basic
warranty. I asked for some time at this juncture to come up with the
suitable recommendations.
Vishwajith
I would like to go through the short term recommendations. I have four
pointers:
1) Distribution: Focus on shifting the ratio of distributors to integrators.
Reason: Globally, the split is higher for the distributors and their attach
rate seems to be higher in India
2) Contracts: Include warranty as a part of the contracts. Reason:
Monopoly in industry and this will boost the attach rates
3) Cost: Re-look at the cost of the product itself and the cost of warranty.
Also, look for bundling of services (if any) to improve the value of the
proposal
4) Channels: Explore additional channels to reach out to the direct
customers directly. Maybe establish additional channels if necessary.
Interviewer
Vishwajith
Ok. Basis what we have seen, most of these cannot be implemented. In
order to increase the attach rates, we did focus on contracts. Can you
come up with a pricing for this?
(Confused) The warranty seems to be fixed at 8% currently. Are we looking
Unconventional - INCREASE ATTACH RATES OF SWITCH/ROUTER FOR CISCO
Candidate : Vishwajith G Bhat
Sector : Technology/Product
Company : Bain & Co.
Type of Case : Unconventional
Approach
Problem Statement: You are working with CISCO to help increase their
attach rates of their switch/router in India
CISCO
Distributors
with the product and integration of their global services. Also, since
majority of the integrators were themselves into SaaS (software as a
service), some portion of the pie could be outsourced to them, thereby
getting them onboard for the second warranty.
India
Net
realization
Integrators
US
India
US
Contribution:
40%
Contribution:
70%
Contribution:
60%
Contribution:
30%
Attach rate:
50%
Attach rate:
97%
Attach rate:
33%
Attach rate:
97%
India: 9%
US: 16%
72
Market Entry – TMT
Candidate : Sagarika Chatterjee
Sector : TMT
Company : Bain & Co.
Type of Case : Market Entry
Problem Statement: Our client is a fresh MBA graduate from a US university. He
intends to return to India and open a Radio Station. He has reached out to us to
understand what factors to evaluate while taking this decision.
Interviewer
Our client is a fresh MBA graduate from a US university. He intends to
return to India and open a Radio Station. He has reached out to us to
understand what factors to evaluate while taking this decision.
Sagarika
So, to clarify, our client is moving back to India and plans to open a Radio
Station. He wants to know what factors he must evaluate for taking this
decision.
Interviewer
Yes
Sagarika
Okay. Does our client have any work experience prior he took up him
MBA? He could leverage from the experience or the network
Interviewer
None. Assume he has no contacts in India and no relevant experience.
Sagarika
Thanks. Are there any specific business objectives I should be aware of?
Interviewer
He is looking to establish a sizeable market share for now and of course
not at a financial loss
Sagarika
We will first need to evaluate the market attractiveness and then look at
our own capabilities. We will identify the possible market and identify the
target market bases on the profile, demand pattern and current market
analysis. Then we need to decide the product mix and pricing strategy.
Possible investment channels have to be identified and given the person
has no experience, understanding the value chain is key.
Interviewer
Sure. Let’s say money is not a problem. What are the first things he will
need to decide for opening the station? Tell me the key elements
Sagarika
He will have to set up a space to run the radio station. Buy/lease the radio
frequency and decide the show line-up. He will need a radio jockey. He will
need to identify his target audience and decide the nature and time of the
shows.
Interviewer
What will be key to success in this case?
Sagarika
Show customization, timing and the effectiveness of the radio jockey.
Interviewer
Yes, the radio-jockey is key here because they kind of drive the show and
content. What do you think are the revenue sources here?
Sagarika
Advertising, movie promotions, music launches will be the major sources
of revenue. The rates may depend on the number of listeners, type of
show, time of the day, frequency, etc
Interviewer
Okay. Why don’t you tell me how he should identify his target customers
and what shows can he start with?
Sagarika
I will start with looking at the major customer types. There will be school
going children, college students, office-travelers, old people and stay-home
people. In all these categories, I will evaluate the amount of time spent by
each on radio and the type of shows preferred. We can then pick the top
segment(s) depending on the segment size. A survey could be then floated
to gauge their interest in certain show types.
Interviewer
Would you float a survey to everyone then?
Sagarika
No. That will not be effective and be unnecessarily expensive. If we look at
consumer behavior, radio is not one of the most preferred modes of
entertainment. Children prefer playing or watching TV, college students
prefer to socialize and old & stay-home people are more hooked to TV.
73
Market Entry – TMT
Sagarika
Only the people who travel to work and are left with not many options of
entertainment listen to radio maybe in their car-pools or cell phones. So,
targeting the age group of 24- 50 years in Tier1 and Tier2 cities could be a
good starting point.
Interviewer
And what shows?
Sagarika
First, I would look at the other popular radio channels and identify the
most popular shows – look at the genre, timings, duration, etc. Then, I
would float a survey to my target audience to gauge the level of interest in
each of these identified show times. We would also need to discuss this
with the RJ & make sure its in her comfort zone.
Interviewer
What kind of shows would appeal to this target audience? What do you
think?
Sagarika
From personal experience, I feel, current Bollywood music with a good RJ,
news, sports commentary and stand-up would be interesting to this age
group.
Interviewer
What other factors are important when planning the channel content?
Sagarika
Planning the show-timings right is very important. News should be in the
morning, songs or stand-up comedy could be at night when people are
returning from work. Also, a good RJ is important. Regulating the
frequency and lengths of advertisements is also crucial for customer
retention because switching cost to another channel is negligible here to
the customer.
Interviewer
Approach
Market Entry
Capabilities
Funding
Relevant
Experience
Value Chain
Attractiveness
Price
Volume
Market
Share
Product Mix
Growth Rate
Show Types
Market Size
Timings
Thanks, Sagarika. I think we can wrap up the case now.
74
Boston Consulting Group (BCG)
75
Patent Expiry & Revenue Enhancement (Unconventional) – PHARMA COMPANY
Candidate : Newton Bishoyi
Sector : Pharma
Company : BCG (Dubai)
Type of Case : Unconventional
Problem Statement: One of the most important patents of a pharma company is about
to expire. What should the company do?
The Interview
Interviewer
Newton
Hi Newton. Lets start this interview with a case study. Since you have
some experience in the pharma industry, patent of a blockbuster drug of a
pharmaceutical company is about to expire next year. What should the
company do in such a scenario?
Can I know a bit more about this company, its product portfolio, and
dependency of revenues from this patent, competitors in this drug,
therapeutic area, positioning of this drug?
Interviewer
[Replied]
Newton
What about the region of operation of this company?
Interviewer
How is the region of operation relevant for this problem?
Newton
The region of operation will determine under which regulations they will
have to operate, like under FDA if this is USA based problem or IMA if it is
India based, and will determine the ease of implementation of solution.
Along with that it will help me test the feasibility of solution from the
customer end as e.g. Indian customers are more price sensitive etc.
Interviewer
Assume we are discussing a US based context.
Notes
It was established in the discussion above that the patent of the drug is
the lifeline of the revenue stream for the company which is based out of
USA and company was heavily dependent on this patent.
Newton
The way I see it, there are two options with the company. First is they can
renew their patent and second is they can come up with a new molecule.
Note
The framework used was Ansoff Matrix but was communicated in
business sense
Interviewer
Okay. How will you weight the options and choose one?
Newton
I will do analysis to identify advantages and disadvantages of these two
options. Basically it will include the impact on the company’s working
capital over the next 5 years, net present value of future cash flows and
initial investment required from the financial standpoint.
Interviewer
[Interrupted] Can you quickly list down what major changes in the
working capital in these two cases?
Newton
[Answered]
Interviewer
What about other factors that you should consider lets say if are
considering the new molecule option?
Newton
Can I take a moment to collate my thoughts?
Interviewer
Sure.
Newton
In case of new molecule development, other factors to look at will include
R&D costs, FDA approvals, designing and establishing manufacturing
processes. On the consumer side, sales and distribution will also need to
revamped which can be broken into two parts, sales force side and other
distribution channels. On the sale force end it will include training of sales
force and maintaining business continuity with existing doctors &
hospitals and on the other distribution channels end, we will have to
ensure sufficient access coverage by insurance providers, a major success
factor for drugs in US.
Interviewer
Good. That is enough for the case. Moving further, what all activities
76
Patent Expiry & Revenue Enhancement – PHARMA COMPANY
Newton
[Answered]
Interviewer
Okay. That will be all from my side. Can you please wait outside for a
while and you will receive further communication there.
Notes
Existing Products
New Products
Market
Penetration
(Renew Patent)
Product
Development
(New
Molecule)
Market
Development
(Not part of
case)
Diversification
(Not a practical
approach
under current
scenario)
Increasing Risk
Towards the end of the interview, the interviewer was trying to judge the
cultural fitment of the person. The core philosophy is to judge the person
in front of you and understand what he wants to listen instead of blankly
applying the case frameworks. Get comfortable with the interviewer in
the first five minutes, try and identify their requirements, keep the
interview conversational in nature rather than structure oriented.
Frameworks are for your reference and not interviewers, so keep them in
the back of your mind and communicate the same in business terms.
Approach
Existing Market
have you been a part of in your work or undergraduate colleges and what
did you learn there?
New Market
Interviewer
Increasing Risk
77
Profitability Analysis – QSR CHAIN
Candidate : Omkar Shindekar
Sector : Quick Service Restaurants
Company : BCG
Type of Case : Profitability Analysis
Problem Statement: There is a pizza chain similar to Dominos/ Pizza Hut and is facing
problems of profitability decline in recent past.
The Interview
Interviewer
Hi Omkar. How has it been so far?
Omkar
[Answered]
Interviewer
Tell me a little bit about your strengths & weaknesses.
Omkar
[Answered]
Interviewer
Tell me one thing that you have done is your life which you are proud of
and one things that think you messed up
Omkar
[Answered]
Notes
The interviewer was not just breaking the ice in the interview but was also
trying to access the candidate based on the answers given
Interviewer
Good! Lets do a small case now. Your client is a pizza chain, operating with
a model similar to Dominos. They are facing difficulty with profitability.
How will you approach the problem?
Omkar
Before I begin to break down the problem, can I please ask some
clarification questions?
Interviewer
Sure.
Omkar
Is this decline a profitability an industry wide phenomenon?
Interviewer
No.
Omkar
Is this a chain-wide phenomenon or specific to some specific stores?
Interviewer
No. This is a chain wide phenomenon.
Omkar
How I see it, profitability can be broken into two components, revenue
and cost, which part of the problem should I start with?
Interviewer
The problem is in the revenue side of the equation.
Omkar
Has there been a change in prices or menu that might have resulted in
this decline in profitability?
Interviewer
No. Pizza chain has not changed any of the other elements recently.
Omkar
What is the approximate quantum of change in top line that has resulted
in the decline of profitability?
Interviewer
The revenues for the chain have declined by approx. 3-4% YOY over the
last 2-3 years
Omkar
Has there been a new entrant in the market which has resulted into
market cannibalization?
Since this is a food chain example and has there been a recent shift in the
consumer preferences?
Notes
After exploring a little more on the revenue front, the interviewer directed
the interview towards the cost side
Omkar
On the cost front, we can break up the total cost into two components,
fixed cost and variable costs
Interviewer
Good! Can you explore the different elements of costs that will be faced
by this pizza chain in these two buckets?
Omkar
Sure. Variables costs in this case will primarily include food costs, royalty
payments (if any) and labour costs.
78
Profitability Analysis – QSR CHAIN
Interviewer
Great! What about fixed costs?
Omkar
Fixed costs in this business will be primarily higher and will include rent,
electricity, store equipment, delivery vehicles etc.
Interviewer
What can you say about the profitability after this analysis?
Omkar
As the revenues have decreased without changes in the prices, it means
that the number SKUs that were being sold earlier have also decreased
which means fixed costs per unit would have increased. The degree of
operating leverage seems to be relatively high in this industry and thus a
small decline in revenue will have a cascading effect on profitability.
Interviewer
Good. The analysis seems fine! Wait outside and we will get back to you
in some time.
Notes
The interview was a bit random. One never expects a case interview to
start from HR type questions in consulting interview, so one should expect
for the unexpected. It is equally important to take clues that are given by
the interviewers, like the initially statement and the final analysis were
very different which would have been difficult to reach had the
interviewer not supported me. Also, practice for different industries and
non-regular cases as getting stuck in those as an off chance is a difficult
position to be in.
Approach
Profitability
(-)
Revenue
• Revenue decreased
by 3-4% YOY in last
2-3 years
• Prices per SKU
• Market
Cannibalization
• Consumer
Preferences
Costs
Variable
Costs
• Food cost
• Labor
• Royalties
(+)
Fixed Costs
•
•
•
•
Rent
Equipment cost
Electricity
Delivery
High fixed cost in relation to variable cost
=
High degree of Operating Leverage
=
High sensitivity of profitability on top line
79
Launch of customized bikes – AUTOMOBILE INDUSTRY
Candidate : Omkar Shindekar
Sector : Automobile
Company : BCG
Type of Case : Customized case
Omkar
Problem Statement: Bajaj automobile is planning to launch customized bikes in India.
What production related challenges will the company face?
The Interview
Interviewer
Let us discuss a short case first. Bajaj wants to launch customized bikes in
India. Since you have worked on assembly lines, what production related
challenges do you think Bajaj will face while launching this product?
Omkar
Sounds like a very innovative concept. May I know what exactly does
customized bike mean?
Interviewer
The customized bike market will work in the following way – when a
customer will arrive at a Bajaj showroom, he/ she will have options to
select the colour, lights, fairing and other such cosmetic elements and the
showroom will have to service the order.
Omkar
Thank you for the clarification, Should focus on the entire supply chain or
only the production assembly line?
Interviewer
Focus on only production assembly line.
Omkar
Even in the assembly line, there are various peripheral activities that go
around the core assembly line process, should I keep my focus strictly on
the core assembly line processes?
Interviewer
Focus on only core processes.
Omkar
Can I take a minute to structure my answer?
Interviewer
Sure.
[After a minute or so] The assembly line as we know today were
developed in the initial time of industrial revolution which is primarily
based on standardization of tasks and thus when something like
customization is introduced in this mix, the current assembly line
philosophy will have to be updated to solve the issues that will come up.
As per my understanding of the assembly lines, I can classify the issues in
the current working into three categories:
First bucket will be material availability. The current versions of assembly
line work on a JIT philosophy of raw material with parts being stacked by
the vendor near to the assembly line. Now owing to customized bikes
being produced in the same assembly line, different SKUs will need to
stacked which will increase inventory storage requirement near the
assembly line which needs altogether a different storage philosophy as
compared to what is currently followed. Also, it will impact the inventory
handling costs.
Interviewer
Okay. What are other problems?
Omkar
Second category of the problem will be as to how the work is currently
being done. The workers who are working at different stations on the
assembly line will need to be made aware as to what part will get fixed in
the next unit that is coming on the assembly line which will require the
workstations to be refitted with some kind of SKU tracking stations. Also,
there will be significant training requirements for the workers to be able
to work on the new assembly line systems as the complexity of the work
will significantly increase. Since the complexity of the work is increasing.,
another problem that it will result in is in the rotation of workers across
stations, which is very important to maintain a decent level of employee
satisfaction.
Interviewer
Sound good.
80
Launch of customized bikes – AUTOMOBILE INDUSTRY
Omkar
The third kind of problems will be the mechanism of transition from one
workstation of assembly line to another. The bike needs to move across
different workstations of the assembly line before it is finally produced
between which is stored in in-situ workshop warehouses. Now since the
current systems are designed to store only one kind of product, the
handling of storage space will require to be updated for it handle different
kinds of products and then send it to the net station in the order that is
most favourable for the entire assembly line.
Interviewer
Good! That will be enough for the case. Let’s continue with the interview
forward.
Notes
This is an example of a very specific and customized case question. The
interviewee had a pervious experience of working on assembly lines and
indeed setting up one. The case was more about contemplating the
problems and bottlenecks in case certain elements of a previously worked
situation changes rather than providing solutions. Proper structuring in
such cases is of prime importance as first the interview knows that such a
case does not fit into a particular kind of frameworks that we study during
case preparations and second the interviewer wants to check structuring
problems is ones main quality or he/she takes a brute force solution to
problems faced.
Approach
Production problems
with customized bikes
Supply Chain
Management
• Not the focus of
exercise
Production
Assembly
Line
Peripheral
activities
• Not the focus of
exercise
Material
Availability
• Storage
• JIT
How the work is performed
on the assembly line?
• Information flow
• Training
• Employee rotation
Transitioning
between stations
• Storage and warehouse
management
• Tracking of units under
production
81
Unconventional/ Vague – E - COMMERCE
Candidate : Sahil Singhal
Sector : E- Commerce
Company : BCG
Type of Case : Unconventional/Vague
Problem Statement: An E-Commerce Platform has to evaluate a brand positioning on
its website. What will be your recommendations on the evaluation?
Sahil
Sir, there are 3 major steps to be looked at:
1. Engagement : Browsing for that brand
2. Consideration Bucket : Added to cart for buying consideration
3. Decision Bucket and Checkout
Interviewer
Okay, what are the indicators you’ll look into each bucket?
Sahil
The KPI’s will differ depending on the stage of decision making process
like:
1. In Engagement, the customer has begun search for the desired product
so metrics like no of searches for that brand, no of times selected or
removed from the filter bucket, no of clicks on the brand’s products, no of
visits.
2. For Consideration buckets, metrics like no of product reviews, star
ratings, no. of times added to cart, no of similar products added along
with to see substitutability, added to Wishlist
3. Decision Bucket will include measure like click to conversion rate,
ordered in 1 visit or multiple visit (decision making time), repeat
purchases.
Interviewer
Alright. As we discussed in the beginning, now that you have the KPIs,
what will you do with them to give recommendation to boost sales?
Sahil
We can use the KPI’s to develop a Brand Score for various brands sold
online. This Brand Score can be used for evaluation and comparison across
brands in same category. It can be used as a feedback loop to these
brands so that they can be placed better on the website depending on the
customer segment.
Interviewer
How will you show this on a 2*2 matrix for Brand Score and Segments?
Sahil
So the Brand Score can be High or Low and Customer segment can be high
and low engaged based on their recency, frequency, magnitude of
purchase on the website.
82
The Interview
Interviewer
Good Morning Sahil, let’s get started with the case directly?
Sahil
Good Morning Sir. Yes, sure.
Interviewer
Great. An E-Commerce Platform has to evaluate a brand positioning on its
website. What will be your recommendations on the evaluation?
Sahil’s
Progress
Preliminary questions asked on:
1. What is the product mix being sold on the e-comm website currently?
Ex: Electronics is heavy on brand specs, clothing will be browse heavy
2. What kind/category of Brand has to be evaluated?
Ex: High-end or not, clothing, electronics, kitchenware, stationery etc.
3. Reason for evaluation? Increase in Sales/ Market Share/ Profit Margin?
Interviewer
Take it to be an e-comm player like flipkart looking for a generic brand
evaluation, not constrained to a particular category of goods. The idea is to
use these evaluations for recommendations to increase sales. What factors
will you consider in the evaluation?
Sahil
I believe the best way for a generic brand evaluation will be to look at the
customer journey at the e-comm website to track key performance
indicators.
Interviewer
Sounds right, what are the major steps in a customer journey during an
online purchase?
Unconventional/ Vague – E - COMMERCE
Brand Score
(as developed)
Use of Customer Journey
for a generic brand
Customer Journey >>
o
o
Key Performance o
Indicators >>
o
Engagement
No of clicks
No. of Visits on the
brand
No of Searches
No. of times
selected/removed
from the filters
o
o
o
o
o
Consideration
Decision
Bucket
Bucket
No of Product Reviews
Star Ratings
No. of times added/
removed from cart.
No. of times added to
Wishlist
Other brands added
along with to check
substitutability
o
o
o
Clicks to
conversation rate
Decision making
time, in how many
visits
Repeat Purchases
to check brand
loyalty
Low
Recommendation on 2*2 Matrix
Brand Evaluation on
E-Comm Website
High
Approach
Enhance
Drop
Protect
Grow
High
Low
Customer Engagement
Score
Brand Score
using all KPIs
Based on RFM (Recency,
Frequency, Magnitude) of
purchase
83
Profitability - FMCG
Candidate : Ruchika
Sector : FMCG
Company : BCG
Type of Case : Increase Revenue
Problem Statement: An FMCG is looking to enhance its distributer network, i.e., the
revenue per salesman. Tell us how can it do this?
The Interview
Interviewer
Moving on, let’s assume that the price is as per industry standards and the
SKU balance is also okay. So what do you think could be the problem?
Ruchika
Okay, I think the volume is the problem and we need to push it more.
Interviewer
Say, they are pushing it to the maximum extent. What now?
Ruchika
Okay, so are we a marketing leader?
Interviewer
We are not a market leader – nowhere close to that. It is actually a market
share problem for us.
Ruchika
Okay, so what kind of products are we looking at?
Interviewer
Assume any FMCG product.
Ruchika
Okay, given its an FMCG, I feel we will focus on unpenetrated markets
such as Tier 1/2 cities or the rural sector.
Ruchika
Good Morning sir!
Interviewer
Good morning, please introduce yourself.
Interviewer
Okay, so let’s begin with the case. So the case at hand is about an FMCG
company that is trying to enhance the revenue per salesman across its
distributor network. You need to suggest the ways it can go about this.
Ruchika
Please tell me what kind of distributor network does the company have?
Interviewer
Focus on Tier 1 and 2 cities.
Interviewer
The company has a distributor type such as HUL –broad distributors.
Ruchika
Ruchika
Okay, so how many distributors are we looking at?
Interviewer
Say, 3000. Now you understand that with such a large number of
distributor network, there will be a lot of sales people after them. Right?
Now, FMCG products when looking to capture market share work as per
the concept of bundling. So, I will divide the SKU into packages that
provide margins and attract consumers simultaneously. This will help me
gain market share and at the same time maintain profitability.
Interviewer
Okay, so this is something that even we did at the firm. I would now like to
close the case. Thank you.
Ruchika
Yes, so I need to focus on profitability. Should I focus on cost or revenue?
Interviewer
Please look at increasing revenue. In fact, give me the function of revenue.
Ruchika
Okay. Revenue =Summation of (no. of SKUs*units you have*price of SKU)
Interviewer
Don’t you think you’re missing something? You haven’t considered the
market share that they hold in the industry!
84
Profitability - FMCG
Approach
Moderate
Player
Tier 1 or 2 cities
Revenue
Centralized
Distributor Network
Rural Areas
Cost
Market
Penetration
(Bundling to
increase
market share)
Product
Development
(Not part of
this case)
Market
Development
(Not part of
case)
Diversification
(Not part of
this case)
Increasing Risk
Broad distributor
network
Existing Market
Market
Leader
New Market
FMCG
Increasing Risk
Revenue = å(number of SKUs*units you have*price of SKU)*market share
85
L.E.K
86
Market Entry/Guesstimate– E-CIGARETTES
Candidate : Sahil Singhal
Sector : E-Cigarettes
Company : L.E.K.
Type of Case : Market Entry/Guesstimate
Problem Statement: A PE Firm is looking to invest in an E-Cigarette company. How will
you evaluate?
The Interview
Interviewer
Hi Sahil, why don’t you tell us something interesting about yourself?
Sahil
Hello Sir. “Well prepared answer, followed by 2-3 minute discussion on the
same”
Interviewer
That’s interesting. Let’s get going with the case interview then. There is a
PE Firm is looking to invest in an E-Cigarette company. How will you
evaluate?
Sahil’s
Progress
Asked preliminary questions on:
1. What does the client portfolio look like (existing investments)
2. Has it invested previously in the Indian Market. Why India?
3. Why E cigarettes specifically or what are they expecting out of this new
investment?
Interviewer
It has invested previously in India in other products. Let this not bother
you. I want you to focus on evaluating investment in e-cigarettes only. They
want to tap on this upcoming business opportunity and have an initial
advantage.
Sahil
Okay. If I have to evaluate the market entry of this PE Firm into E-Cigarettes
in India, I will follow a two-pronged approach : Qualitative which includes
risks and feasibility in this market and Quantitative which is mainly
demand assessment, market share that can be captured and return on
investment.
Interviewer
Very good, why don’t you walk me through how you will estimate demand
for E-cigarettes?
Sahil
Sure Sir. Demand for E-Cig = # Consumers X # E-Cig used in lifetime on avg.
I start with estimating the no. of consumers. I will begin with India’s
population of 1.3 Bn, divide them into Urban and Rural categories since Ecigarettes will only cater to Urban Population due to its higher cost,
affordability and attractiveness. I will take a 40-60 urban-rural split ratio.
Interviewer
Alright, what further factors will be taken into consideration ?
Sahil
Within Urban population, I will take a 50-50 split for Men and Women. For
further factors, the proportions will differ for Men and Women which I’ll
walk you through step by step.
Firstly, the subsequent factors will include:
1. % population in the workforce since consumption of E-cig will be
majorly concentrated here and very small % in college goers and retired
people which we can take as a small increment later
2. % Smokers out of Working population
2. % of workforce in white collar jobs v/s blue collar jobs because given
the high price of e-cig, it will be consumed by white collar workers.
3. % of White Collar job holders who are likely to opt for E-cig based on
affordability (income distribution).
Sahil’s
Progress
Draws a table with proportion for each factor mentioned above and
comes at a final number for estimated consumers. (See Approach behind)
Interviewer
Very Well, I get your consumer estimation for E-cig. Let’s go back to the
Qualitative factors you mentioned about market assessment. Walk me
through them briefly.
Sahil
Sure sir, These would broadly involving:
1. Assessing concentrated/fragmented market in terms of competition
2. How is the overall market and economy doing in terms of consumption
87
Market Entry/Guesstimate– E-CIGARETTES
Sahil
3. Is there a threat of new player entering?
4. Are the distributors highly under control of existing players
making it difficult to enter?
5. Do the consumers perceive any existing brand to be superior
than others?
Progress
Basically covered all 5 porter’s forces implicitly.
Interviewer
Very well Sahil, that was an in-depth assessment. We’ll see you
in the next round.
Sahil
Thank you, Sir.
Approach
Demand for
E-cigarettes
No. of
Consumers
To be calculated
for the case
X
No. of E-cigarettes
used over time
Starting Pop:
1.3Bn
Rural
60%
Urban
40%
Male
50%
X
Female
50%
X
% Working Pop
50%
30%
X
X
X
% Smokers
30%
10%
X
X
X
% White Collar
30%
20%
X
% affordability
and awareness
X
X
20%
10%
No. of Consumers = (1.3*0.4*0.5*0.5*0.3*0.3*0.2)+(1.3*0.4*0.5*0.3*0.1*0.2*0.1)
No. of Consumers (Final) = 2.5 Million
88
Unconventional – EDUCATION-TECHNOLOGY
Candidate : Shilpa Rana
Sector : Education Technology
Company : L.E.K.
Type of Case : Unconventional
Shilpa
Sure Sir. Looking at the customer side of Revenue model, we can define
revenue as No. of Customers * Avg Revenue per Customer.
For no. of customers, I would like to see the journey of customer on the
website.
The first step would include the App Interface, if it’s customer friendly, all
categories/subjects/grades are clearly listed or not.
Next would be how many steps will a customer have to go through to
finally select the product. Comparison options available across packages.
Last, I would look at the payment methodology. Also, the click to
conversion ratio on the website.
Average revenue per customer will depend on no. of services available,
preference for tuitions/tests only/both (cut in the middle)
Interviewer
These seem fine, the application interface is also similar to the other
competitor and average revenue per customer has also remained
constant. What else would you consider?
Shilpa
Since average revenue per customer has been similar, the reason for the
company not performing well can be low conversion rates, that is people
coming and surfing but not buying or a drop in the visitors and thereby
customers of their services.
Problem Statement: There are 2 educational technology companies with same
business models but one of them is not performing as well. Why could this be?
The Interview
Interviewer
Hi Shilpa, I want to start off with the case unless you have some questions?
Shilpa
Hello Sir. Sure, we can start with the case, I don’t have any questions.
Interviewer
There are 2 Education-Technology Companies with similar business
models, however one of them is not doing so well in the market. Why?
Shilpa
Okay Sir, if I understand correctly, there are 2 education tech companies
with same models but one of them is not keeping up with other’s
performance. (Gets a nod from the interviewer).
In order to investigate where the performance issues are coming, I would
first like to look at its Revenue Model.
Interviewer
Sure, go ahead Shilpa.
Interviewer
Very well, How will you identify the reasons for this?
Shilpa
So the revenue streams for an education-tech company will come from the
students (customers) availing various study packages, advertisements on
the online media platform, recurrent revenue from seminars/services
being given to schools if any beside the app.
Shilpa
Interviewer
Sounds about right but they don’t have any off-application services.
Shilpa
Alright, then that area can be excluded. I would first like to see if the
revenue streams from advertisement is not doing well.
Sir, getting more customers to buy their product is a function of the
marketing team responsible for advertisements, promotions and
positioning, of the public relations team to identify problem areas,
interact with external environment and transfer this knowledge to
product development team, word-of-mouth from the existing customers
about their experience building the credibility of their services. Either of
these functions can be responsible for a low product attractiveness to the
customers.
Interviewer
No, assume that to be constant YoY. Focus on your customers.
Interviewer
Right, the other competitor got a major celebrity to be their brand
89
ambassador which led to them overtake this one.
Unconventional – EDUCATION-TECHNOLOGY
Approach
Poor
Performance
Step 1
Rev from
seminars,
talk
shows etc
Revenue
Step 2
Step 3
In App
Advertisements
Others
Customers
Not to be considered
No of
Customers
Step 4
App
Interface
Comparison
Options
Placement of
packages: clarity
and
exhaustiveness
- No of Clicks
before reaching
Payment Stage
- Comparability
across packages
Avg. Rev per
Customer
Constant
In-App
Journey
Payment
Methods
- Click to
conversion rate
- Variety of
payment option
Visibility/
Awareness
Step 5
Marketing
Public
Relations
Existing
Customers
-Advertisements
-Promotions:
Seminars, Talks
-Positioning
- Query
Redressal
- Response/
feedback time
-Word of Mouth
- Testimonials
- Experience
Ans: Other firm had assigned a celebrity as Brand ambassador
90
Investment Valuation – EDUCATIONAL ASSET
Candidate : Shilpa Rana
Sector : Educational Asset
Company : L.E.K.
Type of Case : Investment Valuation
Problem Statement: Your client is a PE firm looking for a 5 year investment in an
educational asset. How will this investment opportunity be evaluated.
Shilpa
Yearly Revenue is the product of Capacity of the school * average revenue
per student * utilization of capacity of the school.
Interviewer
Right. Can you arrive at a number for how many students will be coming
to this school?
Shilpa
Sure Sir. I will proceed as follows:
1. Population of Mumbai- 18 MM
2. Avg. size of household – 4, no of children per HH – 2; so no. of
students= (18/4)*2= 9MM
3. Assumption, 10% of the population is below age of 5 not eligible for
school, remaining = 8MM (Approximately)
4. Since it is in a posh area, only affluent families will be able to afford it.
Also, there will be other established schools where these students will be
already going. Can I get some data on existing schools of the same level?
Interviewer
There are 4 other schools competing against each other with 75% of the
affluent families’ kids going there.
Shilpa
Alright, then I will take the remaining 25% as the opportunity for the given
school as an opportunity to tap on. Also, I will assume only 10% of the
families can afford this high fees. Given it will be located in a particular
part of the city, it will be quite distant from other areas and thus only 25%
of the above eligible population will come here. (4 directions, each has
equal population distribution so 25%).
Thus the final number of students comes at 8*0.25*0.10*0.25= 5K
students for this school.
Interviewer
Seems like the right number. The actual capacity of the school is actually
4500 students. Next, if I tell you that the revenue from these students is
less than the total cost incurred, would you go ahead with the
investment?
Shilpa
Since it is an investment for 5 years only, it won’t be in PE’s best interest
to invest in a school not in profit.
91
The Interview
Interviewer
Hi Shilpa, how are you doing?
Shilpa
Hello Sir. I am doing well, thanks.
Interviewer
Good. So I’ll start the case. Your client is a PE firm looking for a 5 year
investment in an educational asset. How will this investment opportunity be
evaluated?
Shilpa’s
Progress
• Understanding of Problem: Education Asset -> Chain of schools in 4
metropolitan cities. Classes Nursery-XII in all schools
• Decision to invest has been made, exit in 5 years -> profit earning motive
only.
• Expertise of PE firm is not of concern
• Proceeds with a school is in Mumbai, Posh locality (extrapolated later)
• Proceeds with Profitability assessment to evaluate the investment
Interviewer
Sounds right, how will you assess the profits?
Shilpa
Profit is the net of Revenue and Costs. Revenue will be the fees per student
multiplied by the no. of students and costs will be mainly fixed and partly
variable. Fixed Cost will be cost of infrastructure (real estate), teaching &
non-teaching staff, equipment like furniture, boards etc, cost of learning
software etc. Variable cost will include utilities, extra-curricular activity cost
based on needs of additional students and staff as well.
Interviewer
Okay. On average the fees per student is Rs. X for a school at this level across
India. How will you reach annual revenue figures for this school?
Investment Valuation – EDUCATIONAL ASSET
Interviewer
Right, What kind of synergies can this school draw so that we
can enhance the revenue stream?
Shilpa
There can be 2 aspects to the synergies:
1st will be teaching related and other non-teaching synergies.
With respect to teaching facilities, new experienced teachers
with testimonials can be hired from other schools, interactive
learning methods can be adopted, investment in field trips and
outside classroom learnings to attract more students in case
the school is not operating at full capacity.
For non teaching methods, extra space utilization can be done
to increase the number of facilities available like more courts,
horse riding arenas, skating rinks if not already present.
Approach Sounds great, we’ll see you soon.
Interviewer
92
Valuation
Profits
Guesstimate for No of Students
Revenue
(Fees)
NEXT
FOCUS
No of
Students
Avg Fees Per
Student
Cost
Fixed
Real Estate
Furniture
Variable
Starting Population (Based on Mumbai)
18 MM
No of Households (4 member per HH) and kids per HH
*(1/4)*2
% not eligible for school (<5 years)
10%
% Affluent enough to afford this school
10%
% Due to location (1 out of north/east/south/west)
25%
% Due to other 4 competitive schools with 75% market share
25%
Final Number of Students= 18MM*(1/4)*2*0.1*0.1*0.25*0.25
= 5K (approximately)
Soft-wares
Utilities
* Can be variable or fixed, depends on how you define and place them
Extra
Curriculars
Staff*
93
K.P.M.G.
94
Market Sizing– ELECTRIC VEHICLES
Candidate : Debashish
Sector : Electric Vehicles
Company : K.P.M.G.
Type of Case : Market Sizing Guesstimate
Approach
Demand for
Electric Vehicles
in India
Problem Statement: Estimate the market size for electric vehicle in India.
Tier 1 cities
The Interview
Interviewer
Hi Debashish, why don’t you tell us something interesting about yourself?
Debashish
Hello Sir. (Well prepared answer, followed by 2-3 minute discussion on the
same)
Interviewer
Debashish
‘s Approach
That’s interesting. Before we get going with the case, tell me what do you
know about electric vehicles? What are the challenges to their adoption in
the country? (Candidate answers)
Okay, now, tell me how would you go about estimating the market size for
electric vehicle.
The candidate takes one Tier 1 city and one Tier 2 city and benchmarked
and estimated the number of cities that are there. Based on the
population, he estimated the total number of vehicles using the family size
and all. And deduced the total number of Electric Vehicles in Bangalore. He
started with Bangalore city, assuming Bangalore has a population of 2
Crore. Then, he narrowed it down assuming a family size of 4. Then he
provided for different segments of the population. Assuming that vehicle
would be owned by the top segment (30%) itself. Even amongst those
people, not everybody would want to buy an electric vehicle. Only those
who are concerned about environment would. So, he assumed that there
are 4 electric vehicles on every 1000 vehicles in the city to arrive at the
final number.
80-20
Rule
Tier 2 cities
Taking an example
Bangalore
Assumptions1. Population = 2 crores
2. Family Size = 4
3. Top 30% of richest can afford cars
Total Number of Vehicles in Bangalore
= 2,00,00,000 * 0.25 * 0.3
= 15,00,000
Assuming 4 on 1000
vehicles are electric vehicles
6,000 Electric Vehicles
95
McKinsey
96
Guesstimate - NUMBER OF PHARMACIES IN INDIA
Candidate : Udit Daga
Sector : IT/ITeS
Company : McKinsey
Type of Case : Guesstimate
Problem Statement: How will you know that what is the number of pharmacies in India.
The Interview
Interviewer
Good Morning Udit, how are you doing today?
Udit
Good Morning Sir, I am doing good.
Interviewer
So, Udit Daga? We already have many Dagas in our company. Why I should
hire you.
Udit
Generic reply mentioning what separates you
Interviewer
Okay Udit, let’s now move to the case. ~ Explains the problem
Udit
Approach 1: Assumed that whole of India in divided in 2 part. Rural and
Urban. The concentration of pharmacies in Rural and Urabn India is surely
different
Interviewer
Fair Enough !! Go Ahead.
Udit
So now I will find out the KMs of roads in both Urban Areas and Rural
areas. I would exclude the Highways distance since there is almost no
probability of having a pharmacy. Please tell if I am going in a right
direction?
Interviewer
Seems alright till now, go ahead.
Udit
Now I will remove 20% of that road length. (for bends/highways etc.), and I
will assume those are straight line. I will assess the number of buildings
along these road.
Udit
Divide population of urban sector in family of 4. Number of people in a
building in general. Number of building in the locality to estimate the total
number of people living that locality.
Interviewer
Okay, go ahead.
Udit
Now I will assess the total number of pharmacies in that locality.
Considering the number of the people in that locality and pharmacies we
can generalize the total number of pharmacies in urban area. Factor of
0.75 for the residential area.
Similar in for Rural.
Interviewer
Are you considering the whole India as a residential area?
Udit
No Sir, to make an effective judgement we can take a normalization factor
of say 0.75 to accommodate the intensity change in residential and nonresidential areas.
Interviewer
What about the Rural area?
Udit
We can replicate the same approach for Rural area as well.
Interviewer
All right Udit !! Can you think of some other approach. I can see that this
approach of yours involve a lot of assumptions.
Udit
Sir, Can you give me some time.
Interviewer
Think on these lines – To run a pharmacy a person need to have license
issued from government
Udit
Alright Sir. So I would assess the data from on people holding pharmacy
license. Now it is not certain that everyone having license would work in
pharmacy.
97
Guesstimate - NUMBER OF PHARMACIES IN INDIA
Candidate : Udit Daga
Sector : IT/ITeS
Company : McKinsey
Type of Case : Guesstimate
Approach
Pharmacies in
India
Problem Statement: How will you know that what is the number of pharmacies in India.
The Interview
Udit
We can assume that around 7%-8% people will either work in nonpharmacy area or work in same pharmacy (more than one license holder
in single pharmacy)
Interviewer
That is a fair assumption according to me.
Udit
So now we can back-track to see that age of the license issued and assess
that licences issued more than 45+ years are obsolete now and people will
not be running pharmacy. We can assume it to be 4%-6%.
Now we can easily determine the total number running pharmacies in
India.
Interviewer
Alright Thanks Udit
Udit
Thank you Sir.
Number of
Active license
holders for
Pharmacy
practice
Number of
people not
working in
pharmacy
Multiple working
simultaneously
in the same
pharmacy
People who are holding
license but don’t
practice anymore
because of age etc.
Remaining people
holding active license
are the ones who are
running pharmacy in
India
98
Launch of an innovative product – PHARMA COMPANY
Candidate : Jinit Dharia
Sector : Pharma
Company : McKinsey
Type of Case : Product Launch, Market Est.
Jinit
Revenue is Price of the product * Product Mix * No of Units sold. Is
inhaler available in one type only?
Then Revenue is Price*No. of units sold. Should I start estimating the
number of units sold?
This can be done by finding out the market size and market share. Market
size would be the number of diabetics present in India.
Interviewer
(Cutting me) Aren’t you missing something?
Jinit
Yes. I would also have to consider the future diabetics. So, there would
also be a component of market growth.
Say 130 crore is the Indian population. Diabetes is highly prevalent in the
age group of 25+. Hence, that comes around 60% of Indian population.
Out of this 60%, can I assume that at least 10% would be suffering from
diabetes?
Growth rate would be around 10% and we can think of capturing the
entire market of insulin injections, gradually.
Problem Statement: Pharmaceutical company wanting to launch an innovative product
The Interview
Interviewer
There is a pharma company, which wants to launch an innovative product.
Should it?
Jinit
Before I proceed with answering your question, can I ask some clarifying
questions?
Interviewer
Yes.
Jinit
Can I know as to where the operations of the company are in? And where
does it want to launch the product?
Interviewer
Fair enough! Can you guess the present cost of insulin injection?
Interviewer
All over India
Jinit
Jinit
What is the objective which the company wants to achieve?
Rs 100/ day. Can you tell me the estimated price at which we would like to
sell the inhaler and also the usage frequency of inhaler and insulin
injection?
Interviewer
Profitability, after breaking even.
Interviewer
Jinit
And one last question, can I know what is the product all about?
We can sell inhaler at Rs. 100, Insulin injection is to be replaced, very
frequently (say everyday). But, inhaler can be used 3-4 times at least
Interviewer
A very good question. It is a drug which cures diabetes
Jinit
That’s great. That means we can capture the entire market.
Jinit
How it is then innovative?
Interviewer
Can we now move upon the cost analysis?
Interviewer
Its an inhaler.
Jinit
Jinit
That’s awesome. Profitability = Revenue – Costs. Do you want me to
analyze revenues first? (nod)
Yes, sure. Costs can be classified into two major categories – Fixed Costs
and Variable Costs. Can I know as to whether we would be making any
capital expenditure specifically for producing this product, or we may able
to use the current land, machinery etc.?
99
Launch of an innovative product – PHARMA COMPANY
Interviewer
We will be using the factory premises only, but will have to purchase new
machinery for that purpose. What will be the most important cost driver
in this connection?
Notes
[Then Jinit started working on the costs. NPV rule is simple – It is -> (Initial
Investments – Present value of all discounted future cash flows). But could
not complete calculations, as the interview was getting longer).
Jinit
The probability of research going successful
Interviewer
We could conclude the interview.
Interviewer
That’s very right. What do you think about that?
Jinit
Can I summarize?
Jinit
I would like to know the estimated probabilities of the project going
successful or not.
Interviewer
Yes!
Jinit
[Summary]
Interviewer
What would you do these probabilities?
Jinit
I would find the Net Present Value of the project, at a decided discount
rate. Then I will find expected NPV of the project by using the probabilities
of success and failure scenarios.
Interviewer
That’s awesome. Please tell me what more data you need.
Jinit
The probabilities as we talked for. Then the cost of research and
development. Also, the operating costs every year (i.e. Variable costs). I
would also like to know salvage value of plant and machinery, if any.
Notes
(The interviewer gave me all the required data. Not included here, as it is
not at all needed)
Interviewer
Aren’t you missing something out?
Jinit
Just give me few moments to think. (After a long pause) Yes, the
marketing costs.
Interviewer
Absolutely correct.
Jinit
The marketing costs would be a sort of fixed in the short run.
Interviewer
Here’s that cost amount. (Gives me the cost amount).
100
Launch of an innovative product – PHARMA COMPANY
Approach
New Product
Luanch
Revenue
Side
Price
(100)
*
Product Mix
(1)
*
Cost Side
No. of Units
Fixed Cost
+
Variable
Probability of Success
Population
of India
*
Target
Population
*
Dosage
Net Present Value (NPV) of the Project
Decision: If NPV > 0 & IRR in investment range. Project is a Go, Otherwise No Go
101
Profitability - EXPRESSWAY PROJECT
Candidate : Shivali Pande
Sector : Infrastructure
Company : Mckinsey
Type of Case : Profitability
Problem Statement: You are working with a private equity client who is exploring an
investment opportunity in an infrastructure firm which has undertaken MumbaiHyderabad expressway project. You have been called upon to examine the estimated
cash flow statement of the project and enumerate the possible risks associated with
these cash flows.
Shivali
Right! So, the approach that I was thinking of is that we can delve into the
profitability of the expressway venture and see the sources of revenue and
costs involved which will correspond to the cash inflows and outflows.
However, this method would cover cash flows over the lifetime of the
project, is that fine or are we looking at a specific timeframe?
Interviewer
No that should be fine. Let’s drill down the revenue and cost heads.
Shivali
The major revenue sources associated with expressways according to me
are toll tax: both commercial vehicles and private vehicles as there will be
rate differential, interstate duties (though these might be simplified given
the GST regime), food mall or restaurant rents in case the sideroads
utilized by these places are on lease, advertisement revenue from
billboards on highways. Costs would include construction, road
maintenance, running the toll collection systems, electricity expense on
lights and billboards and additional service expense (like telephone booths
or emergency ambulances). Am I missing out on any other major head?
Interviewer
Well that pretty much covers all the heads. In fact, most of the cost comes
from construction which can be treated as a sunk cost in this case and the
others are constant costs with very less variability. So let’s look at the
revenue side, what do you think would be the biggest chunk?
Shivali
It’s a heavy traffic route between two major commercial cities and so the
toll collections should be significant.
Interviewer
Well absolutely! It is the biggest concern in this project. How will you
assess the potential risks associated with it?
Shivali
For that I would need to understand the current structure of toll
collections in terms of toll charged and distribution across commercial and
private vehicles in terms of number of vehicles.
The Interview
Interviewer
Shivali
Good Morning Shivali, since we have a limited time frame, let’s just start
with the case. You are working with a private equity client who is exploring
an investment opportunity in an infrastructure company that works in the
area of roads, metros, sea ports etc. You are specifically looking at one
project being undertaken by the infrastructure firm which is the MumbaiHyderabad expressway. You have been called upon to examine the
estimated cash flow statement of the project and enumerate the possible
risks associated with these cash flows.
Alright, before I start thinking of a possible way to enumerate the risks, I’d
like to clarify a few things if that’s fine?
Interviewer
Sure! Go ahead.
Shivali
I wanted an idea as to the typical projects that the PE firm deals in and is
there any specific reason why they have chosen to go ahead with this
infrastructure firm and this particular Mumbai Hyd expressway project
only?
Interviewer
Because I need to interview you to offer you an internship and we have got
only 15 min so let’s just cover this one project for now.
102
Profitability - EXPRESSWAY PROJECT
Candidate : Shivali Pande
Sector : Infrastructure
Company : Mckinsey
Type of Case : Profitability
Problem Statement: You are working with a private equity client who is exploring an
investment opportunity in an infrastructure firm which has undertaken MumbaiHyderabad expressway project. You have been called upon to examine the estimated
cash flow statement of the project and enumerate the possible risks associated with
these cash flows.
Interviewer
Gave the following data:
Total number of vehicles on a daily basis = 100,000
Type
Price
Quantity
Private Cars
100
40%
Comercial
200
40%
Buses
150
20%
Shivali
Alright! I’d like to calculate the respective revenue contributions of each
category to see who can create the maximum impact on overall earnings.
Should that be fine?
Interviewer
Absolutely!
Shivali
The major traffic of commercial vehicles on this route would likely be due
to trade given that both the cities are major industrial or commercial
centers in the West and South respectively. Hence, any change in volume
of trade can impact the traffic. Additionally, any alternate route availability
or possibility of alternate modes of transport can impact traffic also. Do
any of these causes seem pertinent as of the current circumstances?
Interviewer
Well, trade certainly seems to be the area of interest. Which industries do
you think account for greatest trade in general across land routes?
Shivali
Typically, raw materials (steel etc), automobile industry and agriculture.
Interviewer
Well that pretty much covers all the heads. In fact, most of the cost comes
from construction which can be treated as a sunk cost in this case and the
others are constant costs with very less variability. So let’s look at the
revenue side, what do you think would be the biggest chunk?
Shivali
Typically, raw materials (steel etc), automobile industry and agriculture.
Interviewer
Correct, so agriculture and automobile are the major contributors in this
case, each contributing 50% to the total commercial vehicle traffic. And
declining trade in both the industries is a cause of concern, what do you
think is driving the decline in trade?
Shivali
Let’s look at agriculture first: it’s a heavily monsoon dependent industry
and therefore the most likely reason for the dip in trade would be a bad
season. However, this is a seasonal variation that must have been
accounted for in the estimation of cash flows.
Interviewer
Yes, so let’s focus on just the automobile industry.
Shivali
So typical factors affecting trade vehicles are competition, demand for
goods, alternate routes o modes of transport. Any specific head that I
should look at?
Interviewer
Well Pune-Solapur belt is an automobile hub which has been supplying the
major chunk of automobiles to the South but recently Chennai has
emerged as a dynamically growing auto hub in the South.
Shivali
So, it seems like it’s become easier for Hyderabad retailers and stock
holders to source automobiles from Chennai than Pune belt and hence
traffic on Mum-Hyd expressway might be taking a hit. Do we have an idea
as to what extent can the demand be fulfilled by the Chennai hub?
103
Profitability - EXPRESSWAY PROJECT
Candidate : Shivali Pande
Sector : Infrastructure
Company : Mckinsey
Type of Case : Profitability
Problem Statement: You are working with a private equity client who is exploring an
investment opportunity in an infrastructure firm which has undertaken MumbaiHyderabad expressway project. You have been called upon to examine the estimated
cash flow statement of the project and enumerate the possible risks associated with
these cash flows.
Interviewer
So, we expect a 50% fall in traffic and hence revenue.
Interviewer
Also, you talked about an alternate route. So, there is a new highway
coming up that can help cut down the time of this route travel by 25%.
That will reduce the remaining traffic by another 50%. So, can you
calculate the expected number of commercial vehicles.
Interviewer
Shivali
Revenue
Interstate duties
50% of the current demand. Also assume that the entire demand currently
is being met by transporting vehicles via the expressway.
Shivali
Shivali
Approach
I wanted to know about the work that McK does in the field of retail and
brands, so we discussed that for a while and the interview ended.
Food mall &
restaurant
leases
Advertisement
revenue
Commercial
Vehicle
Private vehicle
Initially we had 40,000. Due to Chennai hub the traffic dropped to 20,000
and now, due to this alternate route it’ll now go down to 10,000. So, we
will have only 10000 commercial vehicles which will be charged a toll of
200. This drop should be the major risk to estimated cash flows then. Do
you want me to calculate the new estimated revenue?
Not really, I’m sure you can multiply 10000 and 200. So, you have pretty
much proceeded in a way that we did for this case when we were working
with this client. Do you have any questions for me?
Toll Tax
Seasonal nature of
agricultural trade
Reduction in trade
Chennai hub
Fall in traffic
competition
Alternate routes
104
Evaluating Market Entry – IT MAJOR
Candidate : Suneha Bagri
Sector : IT
Company : McKinsey & Company
Type of Case : Market Entry
Interviewer
Looks good. Could you please try to elaborate the situation a bit more?
Suneha
Under the industry, we can look into the competitive landscape, the
market growth rate, and the degree of fragmentation. For risk and
returns, we can calculate the critical ratios, while for the company itself
we can look for its financials and non-financials. The non-financials can be
further broken down into the culture, philosophies, and founder.
Interviewer
What would be sources of 3 sources of competitive advantage this IT BPO
can have?
Problem Statement: KKR & Co. Inc. is planning to invest in an IT Firm. You are McKinsey
& Company, and you have to identify 5 questions that you need to answer before
proposing the recommendation to KKR & Co.
The Interview
Interviewer
Hi Suneha. Lets start this interview with a case study.
Suneha
It would be the technology, the people, and the expansion strategy.
Suneha
Hello Sir. Yes, sure.
Interviewer
Interviewer
KKR & Co. Inc. is planning to invest in an IT Firm. You are McKinsey &
Company, and you have to identify 5 questions that you need to answer
before proposing the recommendation to KKR & Co.
This takes me to the point where you mentioned that the IT firm’s founder
should also be considered before investing. So, what exactly would you
study about the founder?
Suneha
What is important to know is the principles of the founder(s). For
example, the founder of D-Mart, Radhakishan Damani, is a man of strong
principles. He is a philanthropist. All of these traits are visible in the
business of D-Mart, and the same commitment is visible in the way of
firm’s working. This in the end generates the confidence to invest in firms
headed by such personalities.
Interviewer
Okay, I think we are done here.
Suneha
Thanks you.
Suneha
I would like to begin with a few clarifying questions on the IT firm.
Interviewer
Yes, Go ahead.
Suneha
Could you please give details about the size and domain of the IT firm?
Interviewer
The firm is A 200 million company into digital analytics. It is growing at
40% for last 2 years.
Suneha
Is there any equivalent company of this scale and similar operations?
Interviewer
You can assume it to be equivalent to Emphasis.
Suneha
So, my 5 questions would be on understanding, the analytics industry, the
IT firm itself, the opportunity of return of investment, the threat of risk,
and in the end the exit strategy.
105
Evaluating Market Entry – IT MAJOR
Approach
5 Questions
The IT Firm
IT Industry
ROE
Exit Strategy
Net Present
Value (NPV)
Financials
Pay back ratio
Operations
Financials
Market Growth
Risks
Returns
ROA
Fragmentation
/concentration
Non-Financials
Competitive
Landscape
Strategic
Culture
Philosophy
Other past
records
Recommendation
• No need to force fit a framework. Sometimes its all required is to come up with an end to end solution.
106
Unconventional – E-COMMERCE
Candidate : Samridhi Khurana
Sector : E-Commerce
Company : McKinsey & Company
Type of Case : Unconventional
Problem Statement: Facebook is your client and it wants to measure its contribution to
Samridhi
I want to understand if we are interested in gauging the tangible impact,
or intangible impact, or both.
Interviewer
Let’s consider the tangible impact. Let’s focus on how FB will measure the
monetary impact that it creates for SME.
Interview
Progress
Samridhi was slightly blank aftersheI heard the problem statement at the
start, but she maintained her confidence and made it as interactive as
possible. I tried to apply a structure to my thoughts as much as I could.
Samridhi
The monetary benefit added by FB can be broken down as:
Eyeballs per advertisement * %age clicks that landed the customer on
SME website * Average revenue per customer.
Interviewer
Alright. Now I want you to think how you will measure the business that
the SME did with FB’s help. And secondly, is there any other method apart
from this using which we can gauge FB’s contribution.
Samridhi
So first I will focus on measuring how much business did FB help the SME
to achieve. And then, I will move on to the second part of the problem.
For a customer who is using FB, there are a sequence of steps involved
that will lead to the business for SME:
Ad -> Click -> Makes purchase
It is easy for FB to track clicks per ad, but it could be a challenge to gauge
how many customers made a purchase from the SME’s website and for
how much.
Interview
Progress
She started thinking using customer journey analysis and was able to
understand the challenge faced by FB.
Interviewer
Yes. How do you think FB can measure that?
SME growth in India. How will you articulate the economic value that Facebook has added?
The Interview
Interview
Progress
Interviewer
It started with resume discussion. The interviewer asked Samridhi
questions around her internship experience at IBM Research, job learnings
at Deutsche, why not MS, why Student Alumni Committee at IIMB and her
contribution to it etc. The interviewer then proceeded with the case
round.
Facebook is your client and it wants to measure its contribution to SME
growth in India. How will you articulate the economic value that Facebook
has added?
Samridhi
As I understand, Facebook provides an advertisement platform to various
SMEs across India. To gauge the economic impact, I would like to
understand if there is any specific SME that we are interested in.
Interviewer
We are not restricted to any particular SME here. We want to devise a
general approach. You can think of any SME like Myntra that uses FB for
advertisement. You can take 2 minutes to think how we should proceed.
Samridhi
Alright. So we want to measure FB’s contribution to SME growth in India.
Broadly, FB helps SMEs in the following manner:
- Monetary impact (increases revenue for the SMEs etc)
- Societal benefit (helps SMEs ceate awareness for a campaign or a cause)
- Operational Ease (SMEs are able to reach the targeted audience
effectively)
107
Unconventional – E-COMMERCE
Candidate : Samridhi Khurana
Sector : E-Commerce
Company : McKinsey & Company
Type of Case : Unconventional
Problem Statement: Facebook is your client and it wants to measure its contribution to
SME growth in India. How will you articulate the economic value that Facebook has added?
The Interview
Samridhi
A couple of things that come to my mind:
1. Ask SMEs to provide data so that we can map the customers who landed
on their site via FB to their bill amount (both first-time & repetitive
purchases)
2. With SME’s revenue before advertising on FB as the benchmark, we can
track how much has their revenue increased after they started advertising
with FB
Interviewer
These might be difficult to implement as there are many SMEs and asking
for data from each is not feasible. The second one could be one way but
not very accurate.
Samridhi
I agree sir. With the increasing privacy regulations, data collection from
SMEs might not be feasible as they are bound to protect the customer’s
information. And since companies deploy multiple marketing strategies in
parallel, we cannot attribute the entire amount to FB.
Interviewer
Perfect. Let’s move on to the second part of the problem to discuss if
there is any other way to measure FB’s contribution. I want you to apply
learnings from your economics class.
Interview
Progress
The interviewer had given a straight cue. We had micro economics in term
1 but this was an application of macroeconomics. I asked for a minute to
put my thoughts on the sheet.
Samridhi
Sir, FB’s contribution to the SME growth will also lead to the economic
benefit for the nation at the macro level:
1. Increase in the revenue will increase the overall GDP of the country
2. The SME might attract foreign investments in India which will lead to
the further growth of the business
3. The SME expansion will generate more employment and might also add
an impetus to the average wages
4. It will also enable other businesses to grow. For example, if Myntra
flourishes then other ancillary businesses like logistic also grow
Interview
Progress
The interviewer told me that we are out of time and asked me if I had any
questions for him. I asked him his experience at the firm and with this the
interview ended.
As another method, I think we can have a survey on our platform and ask
customers who clicked on an ad as to how relevant the ad was for them.
We can also ask if they had shopped with the SME before, how frequently
do they buy from that website now and what is their average spend. With
the correct questions, we can get an estimate of their annual purchase
from the SME.
108
New Product – INSURANCE
Candidate : Samridhi Khurana
Sector : Insurance
Company : McKinsey & Company
Type of Case : New Product
Problem Statement: Your client is an insurance player that recently launched a new
Interviewer
Mostly HNIs. You can consider HNIs in a metro city like Mumbai where
there is adequate demand.
Samridhi
What is the competitive landscape like? My understanding is that there
are 4 major public companies who offer non-life insurance policies, and
there are many private players who would provide a similar offering. So
the market has multiple players for home insurance. Is my understanding
correct.
Interviewer
Yes.
Samridhi
Okay, I have one last question before I proceed. When we say the product
has not done well, is it based on client’s own projections or are we
comparing with our competitors?
Interviewer
It didn’t do well as per their own projections before launching the
product.
product. It did not do well in the market and the client wants you to diagnose.
The Interview
Interviewer
Samridhi
Let’s start directly with a case. Your client is an insurance player that
recently launched a new product. It did not do well in the market and the
client wants you to diagnose.
Could I ask a couple of questions to understand the client and the product
better before I proceed with the case?
Interviewer
Sure.
Samridhi
What kind of insurance is the client into? Is it life insurance company or
general insurance company or both?
Samridhi
Okay. Thank you for all the details. I would like to take a minute to jot
down my thoughts, if that is okay with you.
Interviewer
It is a leading life insurance player like LIC.
Samridhi
Okay, so it is a public player that has a pan India presence in mostly life
insurance product. And what about the new product? Is it also a life
insurance product? And when did they launch it?
Interview
Progress
She divided the number of policies sold as a demand side or supply side
issue. She further divided the demand side into internal and external
factors. The framework shown in the appraoch is a general framework
based on which she structured her points. The interviewer asked her to
focus on internal issues.
Interviewer
That’s a relevant question. It is a home insurance product that was
launched 6-7 months back.
Samridhi
Samridhi
Thank you for that information. So the failed product is a general insurance
offering. Who are our customers for this product? Is this home insurance
product targeted towards economic segment or HNI?
Okay, I would like to discuss the internal factors that can affect the
demand for our product.
- Product Awareness: The customers would know the client mostly for life
insurance products. Are they aware of this home insurance product?
109
New Product – INSURANCE
Candidate : Samridhi Khurana
Sector : Insurance
Company : McKinsey & Company
Type of Case : New Product
Samridhi
For home insurance, the customers have to understand the financial
benefit in order to buy it. Therefore, the salesperson needs to be able to
articulate the monetary benefit effectively and be able to carry out
comparative analysis well, demonstrating the advantages over the
competitor’s products. This requires employees who are good with
numbers and understand the nuances of the product
Interviewer
Alright, that’s all.
Problem Statement: Your client is an insurance player that recently launched a new
product. It did not do well in the market and the client wants you to diagnose.
The Interview
Samridhi
Product Attractiveness: Is the product offered by the client attractive for
customers? Does it charge competitive premium?
- Effective Salesforce: Is the client able to explain the product features and
sell the product to its customers?
- Customer Onboarding: How seamless is the process to onboard the
customers and to retain them?
Interviewer
Let’s focus on salesforce.
Samridhi
For salesforce, the following factors could affect the performance
- Do we have a dedicated Team for new offering? Have we trained them?
- Employees: i) Expertise level ii) Soft skills * ability to convince
- Realistic Selling Targets for the new policy
- Efficiency or Employee Utilization
Interviewer
Great. We do not have a dedicated team for this new product. How do you
think employee expertise will affect the performance? What kind of
employees do we need for this product?
Samridhi
Life insurance is an emotional investment for most of the families. And
therefore, the salesforce tries to get the emotional buy in of the
customers. It requires less convincing as most of the customers are more
than willing to buy the life insurance policy for the betterment of their
family.
110
New Product – INSURANCE
Approach
Less no. of
policies sold
Demand is
less
Product
Awareness
Attractive
Insurance Policy
Effective
Salesforce
Customer
Onboarding
Internal
Issues
Need gap
Analysis
Supply is
inadequate
External
Issues
Substitutes
Regulations
Compliance
Issues
Competition
111
NRI Consulting
112
Supply Chain Strategy – FOREIGN MANUFACTURING FIRM
Candidate : Tarunay Dayal
Sector : Manufacturing
Company : Nomura
Type of Case : Supply Chain Strategy
Problem Statement: A Japanese manufacturing is planning to enter Indian market.
How would you plan their distribution network?
The Interview
Interviewer
Hi Tarunay, how was your day? Tell me something about yourself.
Tarunay
(a prepared answer is provided)
Interviewer
Tell me one thing that you have done is your life which you are proud of
and one things that think you messed up.
Tarunay
(a prepared answer is provided)
Interviewer
Let’s now discuss a case.
Interviewer
A Japanese manufacturing is planning to enter Indian market. How would
you plan their distribution network?
Tarunay
Before I begin to break down the problem, can I please ask some
clarification questions?
Interviewer
Yes, Go ahead.
Tarunay
What kind of entry is the company targeting – own, joint venture, or
organic?
Interviewer
The company wants to go with organic approach. How would the supply
chain distribution be like?
Tarunay
The company should go for hub and spoke model, which would define a
base central base and multiple suppliers.
Interviewer
How would you plan the execution?
Tarunay
First of all we would need to identify the region of dominant sales, based
on which we could define the centre of the distribution model.
Interviewer
Okay, I think we are done.
Tarunay
Thank you,sir.
113
Supply Chain Strategy – FOREIGN MANUFACTURING FIRM
Approach
Spoke #2
Spoke #1
Spot #4
Hub
Spoke #7
Spoke #5
Spoke #6
114
Market Sizing – LUXURY WATCH MANUFACTURER
Candidate : Anand MP
Sector : Luxury Watch Manufacturer
Company : Nomura Research Institute
Type of Case : Market Sizing
Problem Statement: Your client is a luxury watch manufacturing company. It is looking
to enter India, what is the market potential?
Interviewer
Yes, you may assume all such channels are being considered. You may
consider India as a whole.
Candidate
Sure Sir. First, I would consider the adult population of India as 1 billion
and segment it on the basis of income. I would target the top 1% of the
population for my client. This comes to 10 million individuals. Assuming,
on an average, an individual purchases a luxury watch once every five
years. This means, typically, 2 million luxury watches could be potentially
sold every year. Do we know the average price of watches in the luxury
segment in India?
Interviewer
Okay, You may assume it to be Rs. 50,000.
Candidate
Thank you, this implies the potential market size can be estimated to be
2,000,000 x Rs. 50,000 = Rs 100 billion = Rs. 10,000 crores
Interviewer
Good, do you think this is the current market size in India?
Candidate
No, this is the potential to reach. If much less than 2 million luxury
watches are sold every year in India, there is a potential to tap into those
customers who have the ability to purchase such watches.
Interviewer
How could you determine the current sales?
Candidate
We may conduct interviews with multi-brand watch retailers to estimate
sales and use data from various other distribution channels such as sales
from outlets of would be competitors and e-commerce platforms. We can
also consider interviewing distributors who come before retailers in the
value chain to estimate how much they supply.
Interviewer
Good, thank you.
The Interview
Interviewer
Good Evening, How was your day? Tell me something about yourself?
Candidate
Good Evening. It was good. A prepared answer is provided.
Interviewer
That’s good to hear. Let’s get started with the case. Your client is a luxury
watch manufacturing company. It is looking to enter India, what is the
market potential?
Candidate
Interesting! Could you let me know whether it is for both men and women
and price range generally?
Interviewer
Yes, it is for both men and women. Its close competitors in India would be
RADO, ROLEX etc.
Candidate
Okay, before I estimate its market, has the client decided on its distribution
channels?
Interviewer
Well, no. Could you tell some good channels for it?
Candidate
Since it is luxury player, having its own outlets in Tier-1 cities would be
good option. Apart from that, it can also consider supplying to watch
retailers who sell multiple brands. E-commerce channel is also
recommended.
115
Market Sizing – LUXURY WATCH MANUFACTURER
Approach
India’s Adult
Population (1 billion)
Lower Income
Class (50%)
Middle Income
Class (40%)
Upper Income
Class (10%)
Ultra-Rich
Individuals
(10 million)
Assume that on an
average, an individual
purchases a watch once
every 5 years
Purchases every year
(2 million)
Wealthy
Individuals
(90 million)
X
Average price of
luxury watch in India
(Rs. 50,000)
=
Potential Market Size
(Rs. 100 billion)
116
Revenue Decline – PIANO DISTRIBUTOR
Candidate : Varun Sridhar
Sector : Musical Instruments
Company : NRI Consulting
Type of Case : Declining Sales
Problem Statement: Assume that you are a Piano Distributor. Your piano sales are
declining.
Interviewer
We haven’t made any changes to price but that doesn’t mean price is not
cause of the problem.
Varun
Then, maybe competitors have reduced their prices.
Interviewer
Yes, you could look at that.
Varun
(They discuss the pricing strategy and candidate moves to other factors.)
Has there been any change in the product?
Interviewer
No.
Varun
Okay, is something wrong with the Place factor?
Interviewer
Yes, place is an issue. What are the things that you will look at in place?
Varun
I will look at the location of the store.
Interviewer
How would you evaluate if the store location that you have chosen is
good or not?
Varun
If its in a crowded area, the footfall you get in the store is decent or not. I
will also analyse the location of the competitor’s store.
Interviewer
Yes, that’s a problem. The competitor’s store is located in a street that has
musical association while yours is not.
Varun
They can change the location of their stores to a better place.
Interviewer
This is a good idea. You may stop here. Good luck.
The Interview
Interviewer
Good Morning Varun, tell us something about yourself?
Varun
Good Morning Sir. Prepared a generic answer for this. (Candidate’s cv
mentioned interest in piano)
Interviewer
That’s good to hear. Let’s get started with the case. Assume that you are a
Piano Manufacturer. Your sales are declining. What measures can it take?
Varun
Okay, I will break down Piano revenue as function of price and quantity.
Interviewer
No, this is now how it is. Think of another way of going about it.
(Candidate thinks for a while) Use any other framework that have been
taught in the course, maybe something related to marketing.
Varun
I will analyse the case using the 4Ps. I will start with Price. Have they made
any changes to the price?
Interviewer
No, they haven’t made any changes.
Varun
In that case, can I move past price?
117
Revenue Decline – PIANO DISTRIBUTOR
Approach
Piano
MECE
Price
First Cause of
Revenue Decline
Product
Own
product’s
price
Competitor’s
Price
No change
Reduced
Place
Own stores
Promotion
Competitor’s
Location
Better
placed
Second Cause of
Revenue Decline
No change
118
Market Expansion– E-COMMERCE COMPANY
Candidate : Rahul
Sector : Analytics
Company : NRI Consulting
Type of Case : Market Expansion
Problem Statement: Major E-Commerce Company enters a new market and is looking
for avenues to expand its market share.
Rahul
I will start by analysing the supply side then move to the demand side. Let
me first analyse which out of revenue and expenses is causing the
problem. Or is it that customers aren’t getting attracted e.g. website? This
will be my overall approach.
Interviewer
Look into the customer side. Assume for the case that there is an issue
with the website. (The candidate has a analytics background) The website
isn’t appealing enough for the customers. As a consultant what are the
factors you will be looking at?
Rahul
Okay, I would look at number of visitors on page, bounce rate (percentage
of visitors who navigate away from website in short time), and number of
unique visitors. I will also look at how customers are being directed to our
website. Is it through any specific pages, apps, blogs, or random search.
Interviewer
Assume that visitors are coming through a particular page. There are a few
set of blogs through which we are getting our customers. But they are
advertising heavily on other media as well. But those aren’t having a
major impact.
Rahul
Then this means only a few blogs are giving you the major chunk of
customers. This is an issue of advertising. The channel that they are using
isn’t most appropriate.
Interviewer
What steps will you undertake to solve this issue?
Rahul
1. They can use micro-influencers(social media celebrities having following
of 1K to 1 Lac) to create interest among their customers. Since we are
entering a new market, we can target the customers through them.
2. Engage in co-branding activities with other new entrants.
3. Try to contact more blog people because that’s where majority traffic is
coming from.
4. Rethink the advertising strategy through traditional means.
Interviewer
Very good, this will be enough.
The Interview
Interviewer
Good Morning Rahul, let’s get started with the case unless you have any
preliminary questions for us?
Rahul
Good Morning Sir. Sure, we can start with the case.
Interviewer
Well. Your client is an E-commerce company that entered a new market
but it was not able to get a major market share in that particular segment/
country. You, as a consultant, have to address the issue and provide
suggestions for their future action. (Candidate takes 5 minutes to
formulate his approach)
Rahul
Alright, I would analyse the value chain. But before that, I have some
preliminary questions. Where is the inbound logistics coming from? Who
are their suppliers? Are we just a warehouse manufacturer? Are we a
moderator? Or are we engaging in buying and selling also?
Interviewer
We know that they are just a moderator-the middleman. Also, they have a
prevalent market share in other countries. But they entered this country
newly in which their market share is going down. We have a single
warehouse in the entire country.
Rahul
Okay. I want to know how are we distributing the product to the
customers? And who are our customers and where are they located?
Interviewer
They are distributing through a third party vendor. Now focus on the
problem.
119
Market Expansion– E-COMMERCE COMPANY
Approach
Industry Analysis
for E-Commerce
Not to be
considered
Supply side
MECE
Revenue
Expenses
Number of
visitors
Bounce Rate
Demand
Side
Website
Case Specific
Channel directing
Number of
unique
visitors
Recommendations
Final Answer
120
Market Entry– AUTOMATIVE AFTER SALES FIRM
Candidate : Rahul
Sector : Automobile
Company : NRI Consulting
Type of Case : Profitability
Problem Statement: Create a go-to market strategy for a new country for an
Automotive After Sales Company
Kirti
It would depend on the country. Say, if the country is a really big one and
if the market available is huge, it makes sense to open the manufacturing
plant there itself. In the long run, their fixed costs will go down and we will
be able to cover the fixed investments.
Interviewer
Okay, lets assume we aren’t going for this strategy. Assume that we are
exporting it to the other country that small in size . They are collaborating
with a third party for logistics. Reason why would they go for this? Also,
suggest some ways for them to reduce their expenses under this strategy.
Kirti
Okay, since we are entering a new market, we would not know of the
exact route for logistics. In that case, it makes sense for us to undertake
this strategy.
The Interview
Interviewer
Good Morning Rahul, let’s get started with the case unless you have any
preliminary questions for us?
Kirti
Good Morning Sir. Sure, we can start with the case.
Interviewer
Well. Lets assume there is Company X in India. It engages in after sales
business for Automotive Manufacturer of auto parts like brakes, spare
parts,etc. Currently, they are planning to enter a new market. As a
consultant, you are supposed to create a go-to market strategy for their
entry into a new country.
Interviewer
Okay, conclude your overall recommended strategy.
Kirti
I would say if it’s a big country, then they should go for setting up a
manufacturing plant. Otherwise, exporting it from the base country, given
its feasible, would be more appropriate.
Kirti
(After asking some preliminary questions)Alright, I will conduct the
industry analysis. (The candidate explained his approach of analysing
Porter’s Five Forces)
Interviewer
Very good, this will be fine.
Interviewer
Okay, what are the parameters you will look to decide if the company
should enter the new market or not?
Kirti
Okay. So, I would say we should definitely enter the market if
attractiveness of the market is high and the competition in the new market
is low.
Interviewer
Very well, Lets assume that there are two options available to you. Either
you can open a new manufacturing plant there or just export it from
here(if its feasible). How would you decide between these options?
121
Market Entry– AUTOMATIVE AFTER SALES FIRM
Approach
Market Entry
Entry
Decision
Market Share
(Existing
Competition)
Market Size
(Market
Attractiveness)
Establishing Value
Chain
Third Party
Collaborations
Own Facility
(Manufacturing
Unit)
Small
Neighbouring
Countries
Large
Potential Market
Countries
122
Cost reduction - GENERIC
Candidate : Abhijit Kande
Sector : Generic
Company : NRI Consulting
Type of Case : Cost reduction
Abhijit
Sure Sir.
1 As experienced people demand high salaries, change in employee mix is
recommended.
2 To ensure that highly skilled employees are not fired, these employees
can train/mentor freshers.
3 While working on a project, experienced people count can be decreased
and more freshers can be included.
Interviewer
Thank you
Problem Statement: There are 2 similar cost centres. Cost centre one is more
profitable. Evaluate the reasons.
The Interview
Interviewer
Good Morning Abhijit, how are you doing today?
Abhijit
Good Morning Sir, I am doing good.
Interviewer
Very well, let’s get started with the case right away.
There are 2 similar cost centres. Cost centre one is more profitable.
Evaluate the reasons.
Abhijit
Okay, so first starting with fixed costs….
Interviewer
Fixed cost is same for both cost centres.
Abhijit
Alright, variable cost consists of employee cost ,operating expenses…
Interviewer
Operating cost is also same for both of them. Proceed with employee cost.
Abhijit
There can be a difference in number of employees, billing/wage rate,
employee mix.
Interviewer
The number of employees and wage rate is same.
No. of employee
Abhijit
The employee can be freshers as well as experienced . The experienced
people demands high salaries. So, the cost can be high.
The no. of employees
are same
Interviewer
Can you tell some ways to reduce cost?
Approach
same
Operating
expenses
Cost
Variable Cost
Fixed Cost
same
Employee Cost
Direct Material
cost
same
Billing Rate
The Billing Rate
is same
Employee Mix
The difference is
in employee mix.
123
Strategy &
124
Pricing/Guesstimate – BILLBOARD ADVERTISEMENT
Candidate : Naman Gupta
Sector : Mass Media
Company : Strategy&
Type of Case : Pricing/Guesstimate
Problem Statement: How will you price an advertisement on a static billboard that is
located at Bengaluru airport?
The advertisement is about a premium product.
The Interview
Interviewer
So, I recently was travelling on the road and saw a billboard. Tell me how
will you price an advertisement on the billboard?
Naman
What type of billboard is this – static picture or dynamic (where
advertisements change)? Where is this billboard located? What is the
advertisement about?
Interviewer
Assume it is a static billboard with only one advertisement and it is located
at Bengaluru airport. The advertisement is about a premium smartphone,
take iPhone as an example.
Naman
Ok, what is the rough size of this billboard and is it located outside the
airport?
Interviewer
You can assume the billboard is 2.5m x 3m, the typical ones you find for
advertising smartphones outside the airport.
Naman
Ok, I can think of two ways to price it – 1) Competitive or Parity Pricing
where you look at similar billboards’ prices at the same or other airports
and 2) Value-based pricing. I don’t believe cost based pricing is applicable
here as the benefit (the number of persons who see the billboard) and the
cost (materials used to display the advertisement) have quite different
metrics here.
Interviewer
Good, now assume you don’t have any similar billboard pricing data
available and can’t do straight-away parity pricing. Is there any other
competition you can look for pricing?
Naman
Actually billboards are used for advertisements so we should compare to
other advertisement channels like spot ads on television, social media,
newspapers etc. ?
Interviewer
Correct, so let’s take spot ads for television as a benchmark. What will you
evaluate?
Naman
I should compare the number of people reached out via billboard for the
duration the ad is posted and compare how much I need to pay to reach a
similar audience via a spot-TV ad.
Interviewer
Yes, now tell me the approach of calculating the number of people
reached out via the billboard.
Naman
So we can split the problem as Number of people reached ……. (approach
given on the next page)
Do you want me to get into numbers?
Interviewer
No that is fine. How will you evaluate the percentage of people for whom
the product is relevant.
Naman
I will look at the age-group. Travelers with age 20-60 can be considered as
the target population who can buy a smartphone. Should I look for
additional parameters?
Interviewer
No, that would be all for now. I liked your approach and wish you all the
best.
Naman
Thank You.
125
Pricing/Guesstimate – BILLBOARD ADVERTISEMENT
Approach
Billboard Reach
(no. of people)
Pricing
Value Based
Other
billboards
Competition
Based
Different
Mode
Same Mode
No. of days
the ad is
posted
Cost Based
Other modes
of advertising
X
No. of people
crossing the
billboard
X
% of people
who see the
ad
X
% of people
for whom the
product is
relevant
Passengers
arriving
+
Social Media
Television Spot
Mobile
Marketing
Print Media
Sales
Promotion
Passengers
departing
+
Staff and other
regular visitors
Estimate the Price of Billboard
based on price of reaching similar
number of eyeballs by a TV ad.
126
Pricing strategy - TELEPORTING MACHINE
Candidate : Ankur Dixit
Sector : N/A
Company : Strategy&
Type of Case : Pricing
Problem Statement: There is an engineer who has just developed a machine which
can teleport people from say Bombay to London. Come up with a pricing strategy.
The Interview
Interviewer
Good Morning, Ankur. Tell me something about yourself
Ankur
Gave a brief introduction about myself, work experience and hobbies.
Interviewer
Great, so let’s do a small case. There is an engineer who has just
developed a machine which can teleport people from say Bombay to
London. Come up with a pricing strategy.
[Progress]
Asked for some time to structure as of how I would go about pricing. Made
a rough structure as of what questions are needed to be asked (basically
data points)
Ankur
So, I can price the equipment with three pricing strategies. Value based,
Cost based, and Competition based. Before I could proceed further the
interviewer asked me to focus on Cost based pricing. Can I know about the
different costs incurred to develop the product?
Interviewer
So, the engineer spent around 5 crores to develop the product
Ankur
Can I further know about the lifecycle of the product?
Interviewer
The engineer expects the machine to work without any repair for 5 years
Ankur
Great. I would like to know about the time the machine would take to
teleport a person from Bombay to London.
Also, if there are any operational hours that are we constrained to? How
many days in a year will the machine work?
Interviewer
Good question. Currently the machine takes around 5 minutes of setup
time every time for a new person and 5 more minutes to teleport. The
engineer expects to work 10 hours a day. For the number of days assume it
to be 360.
Ankur
What are the operational costs associated while working on the machine?
Interviewer
For every person that is transported, there is a fixed expense of 10k.
Ankur
Does the engineer have any particular profit margin in mind? Also, the
R&D cost is supposed to be break even in what time frame?
Interviewer
Just assume a number for both and give me the final price.
Ankur
(Now I had all the numbers that I require to come up with the price) (5
crores/ (12*360) + 10k + 360*8*60/10) * 0.2 = ~ 46000
Interviewer
That’s good. Which pricing model would you choose to price the
equipment?
Ankur
We already have the cost-based price as calculated earlier. For value-based
pricing, it will depend upon the current price of air ticket assuming that the
air travel is the fastest mode of transportation currently present. Then I
would like to add the value gained by the time saving Thirdly, for
competition-based pricing I would like to know about the current
competition, the services they provide and the price they are charging.
Interviewer
There is no competition at present. Anyways I think you have done well.
Good luck for next round.
127
Pricing strategy - TELEPORTING MACHINE
Candidate : Ankur Dixit
Sector : NA
Company : Strategy&
Type of Case : Pricing
Problem Statement: There is an engineer who has just developed a machine which
can teleport people from say Bombay to London. Come up with a pricing strategy.
Approach
Pricing
Value Based
Cost Based
Competitor Based
Fixed cost
Variable cost
128