Management Consulting and Case Solving
for Dummies
7. What is a Case?
What is the Case Method?
What are some important Consulting
terms and norms?
What are the different types of Cases?
Issac Jojy
PGP 2014-16
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Now, we’ll get into the tips on Problem Solving for interviews. This document will be a slightly long
one. Read it with utmost attention, because this document will set your case preparation foundation
as well as the base for the documents that follow. Even if it takes you some time, go through this
document slowly, internalizing every concept. If you do not understand this document, the documents
that follow will be hard to understand. So ensure that you focus completely so that the concepts are
drilled into your brain and completely internalized.
What is a Case?
Keeping it very simple, a case is any business situation that is causing concern to the
management of a company. It’s as simple as that. For ease of communication, let’s take a simple
example that all of you will be able to relate to.
1. Hypothetical Case 1: The client is the management of Au Bon Pain (ABP). Let’s call ABP’s CEO
- Mr ABP. Assume for simplicity, that Mr. ABP has only 2 ABP restaurants. One is located at
IIMB and the other is located somewhere near MG Road. Mr ABP stays near Indira Nagar and
for convenience, he had set up his corporate office in Indira Nagar. Sitting in his fancy office in
Indira Nagar, leaning on his comfortable chair, he looks at how his company has been doing over
the last few months by looking at ABP’s balance sheet and income statement. Suddenly, he notices
that the total profits per month has been on the decline over the last few months. Sitting in his
office in Indira Nagar, he has absolutely no idea how/why this is happening. His sales, marketing
and operations teams had given their forecasts of revenue and cost projections, but he still has no
clue why his profits have been going down. His resources have their own routine work to do. He
cannot afford to ask them to keep that work aside and help him out to solve this problem.
(Remember the “economies of scale” reason I had mentioned in Document 1 as to why and how
Consulting firms add value – This is the reason. Mr. ABP cannot afford to use his regular resources
for solving this problem). So Mr ABP has hired you (the consultant) to analyze this situation and
give him recommendations on how to solve the problem. This business situation ABP is facing is
an example of a very simple case. The only brief that Mr. ABP tells the consultant is that the
company profits have been going down. Please analyze the situation and give
recommendations. It is as open ended as that. (We’ll come back to this case later, but the point
was to convey what a case means)
A case is as simple as this. If you’re thinking about “Man. Where do I even start solving this problem?”
That’s ok. The Case Method of solving problems teaches you the most logical way of solving such
problems. With time and practice, you’ll be able to solve such problems with so much ease, even if
you have absolutely no clue where/how to start when you’re reading this document for the first time.
But the point of this section was to convey what exactly a case is – Cases are any business situations
that create concerns for the top management of a company. Now, let’s go to the approach that needs
to be followed for solving cases – The Case Method.
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What is the Case Method of Solving Case Problems?
As mentioned in the previous section, the questions from the client will be very broad and open ended.
To summarize the approach of the Case Method in one line –
“Understand a little bit of the business context of the client, Set the objective/goal function. reverse
engineer from this objective function ONLY based on data, ensuring MECE at each stage of this
reverse engineering process to drill down to the core problem, understand what the current system is
to tackle this problem and based on this data based analysis, provide recommendations to the client.”
If you did not understand most of what I wrote above, it’s completely fine. I just wanted to mess
around a little with you guys ;-). I’ll explain each part of that statement so you have much more clarity.
I will use the ABP case as an example to explain the statement I just made.
For more simplicity, assume that each ABP restaurant has only 2 products sold – Mango Lassi and
Hot Chocolate. And suppose the actual reason for ABP’s profits going down is that in the IIMB ABP
restaurant, the level of service (in terms of friendliness, responsiveness etc) from the staff has come
down because of which the customers (students/professors/others etc) are not coming to ABP as
often as they used to come. This has led to demand coming down as a result of which the revenue is
down as a result of which profits are down for ABP.
Now as a candidate listening to the case question, you are asked only the following and you have
absolutely no idea that the answer is due to the reduced levels of service from the staff. You’re
expected to drill down to the core problem logically and give recommendations. The case question
asked will just have the following:
“Mr. ABP from Au Bon Pain (Bangalore-based restaurant chain) has hired you. The client’s
profit numbers have been down. Please find out the problem that the client is facing and give
recommendations to improve the profits.”
Like I had mentioned in the start of this page, I’ll be breaking down/splitting that long scary line that
I wrote at the start of the page and will explain what each part means. I’ll explain the specific
frameworks for different case situations in detail in later documents, but as part of solving this case,
I’ll just use a simple broad framework. For the sake of making the case method really clear, I’ll be
going to extreme level of detail for the ABP case, so that everyone has complete clarity on how to go
about solving a case.
Step 1: Understanding a bit of the client business context:
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After the case question is asked, acknowledge that you’ll be blanked out for 3-4 seconds, for you
to internalize the question. The most important thing here is NOT TO PANIC. Before proceeding
forward and finding out the problem, you need to understand a bit of the context under which
the client is working. Don’t ask too many questions. May be a minute or so you can spend on this.
In management consulting, a terminology that is commonly used is “Structuring the problem”
which basically means logically deciding on how you’re going to attack the problem. That’s all.
So to understand the context you can state something like “Before structuring and proceeding
with solving this problem, I’d like to ask you a few preliminary questions to understand a
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little bit about the client. Is that ok?” to which the interviewer almost always says yes because
they expect you to ask a few questions before you start structuring and solving the problem.
Once again, structuring just means deciding what approach to follow to solve the problem.
In the ABP case, you can ask a few context questions like
“So can I assume that ABP is like any other normal restaurant chain or is there anything specific that
I need to know” – Eventhough ABP as a restaurant might be known to you, you shouldn’t make any
assumptions. Just clarify with the interviewer before proceeding forward.
Answer: “Yes”
“How long has the client been observing a fall in profits” – To understand when the problem would’ve
started.
Answer: “3 months”
“How many stores does ABP have in Bangalore? ”
“What kind of products does ABP serve?”
Answer: “1 in IIMB and 1 in MG Road”
Answer “Mango Lassi and Hot Chocolate”
One question that I specifically ask in Step 1 (some of my friends used to ask this later) is
“Do we have any data to show that the fall in profits for ABP is specific to ABP or is it something
that ABP’s competitors/food industry as a whole is facing.” The reason why I ask this question at this
early stage is to check whether it is an internal client problem or an external industry problem. In my
next document, I’ll show you an example of how this question at this stage can be really powerful.
Most of the time, it will be an internal problem that the client faces.
Answer: “No. Industry is doing fine. This is an ABP specific problem”
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If you have no idea at all about the industry (like I had difficulty understanding Pharma, Insurance
and some other industires in the beginning), you might have to spend more time in Step 1.
I used to ask questions like “I’m not completely aware of this industry. Can I tell you what I know
about this industry and before proceeding forward, I’d like to know whether there’s something
more I need to be aware of this industry as part of solving this case”.
Tell the interviewer and the interviewer will help you out with more inputs about the industry.
The best part of consulting is this – You don’t need to know anything about any industry.
I’m not kidding. Just be logical and if you have no idea, you can just ask the interviewer directly
and that chap will help you out.
Now you have some sense of what ABP is into – They have 2 stores, their products are known to
you and the fact that their profits have been down for the last 3 months is known to you.
Before Step 1, you just knew that profits were down and absolutely nothing else. Now, you know
a little more information. Obviously, you can keep on asking context questions, but that will lead
you nowhere. You need to start solving the problem as well. After getting sufficient context details,
you need to start structuring the problem.
With practice, you’ll know what all questions to ask in Step 1 and you’ll kind of figure out where
to draw the line between Step 1 and Step 2. Now, let’s move to Step 2.
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Step 2: Set the objective(s)/goal(s) function
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Although the case question was to figure out ways to improve profits, you’re kind of expected to
restate/paraphrase the question on the lines of something like “Ok. So ABP, our client - a fast
food restaurant chain with 2 restaurants in Bangalore is experiencing a fall in profits. We’ve figured
out it is an internal client-specific problem. We need to help them figure out the reason and see
how to improve profits. Is that our only objective or is there any other objective as well or Can I
proceed forward with profits as our objective?”
Ensure you cross check whether there are other objectives as well. I’ve gone through few prep.
interviews where there are multiple objectives that the clients will have. I feel these are rare when
it comes to B-School consult interviews, but do a check with the interviewer anyway.
After he says “Yes”, ask him for a few seconds to structure the problem before proceeding
forward. The thing with a consult interview that I feel a lot of people miss out is to buy in the
interviewer and check with the interviewer at every level on the approach forward before you start
working on the problem.
At every stage, whenever you’re writing something on the rough sheet you’ll have or whenever
you’re talking about something, you should’ve got an OK from the interviewer on the approach
you’re going to take. So here, he says “Yes” again to you asking whether you can take a few seconds
to structure the problem.
Step 3: Reverse Engineer from this objective function ONLY based on data, ensuring MECE
at each stage to drill down to the core problem(s)
This is the most important part of the Case Method. Step 4 and Step 5 will follow from this step and
how well you perform in Step 3 will kind of decide whether you convert the interview or not. If you
do not know what reverse engineering means – it just means logically working from backwards. As in,
in this ABP case the staff service levels were down leading to reduction in customers leading to
reduction in revenue of ABP IIMB leading to reduction in revenue of ABP Ltd. leading to fall in
profits. But during the start of the case, you’re only told that profits of ABP Ltd. are down and you’re
supposed to find out the problem. So you’ll have to work backwards and at each stage when you work
backwards, you’ll have to ensure that you state out all possible options at that stage (will be clear
shortly). This idea of including all options at every stage when you work backwards is called MECE
(Mutually Exclusive and Collectively Exhaustive).
MECE is a very common consulting terminology and more on MECE will be covered in a later section
in this document. The most important thing is that the case analysis should be completely data based.
Because when you work backwards, you can only proceed further backward if you backup with data.
Will be clear in the following analysis. In the ABP case, the structuring will be something like this
Level 0 – Objective:
Profits
(You do not have to write Level 0 and
show the interviewer. I’m writing it so that you guys understand)
Level 1
Revenue – Costs
(You’ve started the process of working backwards. At
this level, you’ve covered all options – Profits = (Revenue – Costs) – Revenue is completely different
from costs (They’re Mutually exclusive) and Revenue – Costs together make profits (Both together
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are Collectively Exhaustive) Hence, at Level 1, you’ve MECEed all required variables. Sounds simple.
But will get complicated with difficult cases.
Now before proceeding further backwards, you need data. So you need to ask for data. The following
conversation will make it clear. Before this, we had asked the interviewer some time to structure the
problem. Here the structuring is fairly simple.
Candidate: “So Profits = Revenue – Costs. Do we have any data from the client to show that either
the total revenue has been going down or the total costs have been going up or both together are
happening?”
The interviewer answers: “The Revenue has been dropping over the last few months. Costs are under
control” In an actual industry assignment, this data will directly be available from the company balance
sheets of ABP Ltd.
Candidate: “Ok. So, I’ll not be looking at costs any further. I’ll drill down further on the Revenue side
to see where the problem is. Hope that is fine?” (Important point to be noted: The interviewer needs
to be bought in before proceeding further after every level)
Interviewer: “Yes. Please go ahead”
Candidate (after thinking for a few seconds) breaks the problem down further
Level 2:
Total Revenue of ABP Ltd. = Revenue of ABP MG Road + Revenue of ABP IIMB
(You can see that both variables together are MECE for the Total Revenue variable. Now you can see
that you further need data to proceed further. So you ask)
Candidate: “As discussed before, ABP Ltd. has 2 stores. Total Revenue of ABP Ltd. can be broken
down into Rev. of ABP MG Road + Rev. of ABP IIMB. Do we have any data from the client
indicating that either of these revenue figures or both of these revenue figures are not matching the
projections and have been going down”
Interviewer: “Yes. The ABP IIMB revenue figures have been going down and are not matching the
expectations. ABP MG Road is fine”
Candidate: “Ok. So I’m limiting my scope of further analysis only to ABP IIMB and will not be looking
at ABP MG Road. Hope that is fine?” (Again, buy in the interviewer before proceeding forward)
Interviewer: “Yes. Please go ahead”
Level 3: Monthly Revenue of ABP IIMB = Price of products*Volume of products sold*Product mix
Product mix in this case refers to the Hot Chocolate (HC) + the Mango Lassi(ML). So in reality the
Revenue is actually = Price(HC)*Monthly Volume Sold(HC) + Price(ML)*Monthly Volume sold(ML)
assuming no price variations in that month. Again you can see that when you break down the variables
are MECEed. All possible options are covered. You do not have to write it down to this level and
show the interviewer. You just need to write it at the level shown at Level 4 written above and tell him
as follows:
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Candidate (After thinking/writing down Level 4 structure on paper): “Monthly Revenue of ABP IIMB
= Price of products*Volume of products sold*Product mix. Do we have any data from the client to
show that for either or both of the products, the price has come down or the volume has come down.
(Please note that if the price has come down, the volume can go up as well – Supply demand
equilibrium concept but that is not the case here because we had set the problem in the beginning as
bad service leading to lesser number of customers coming in leading to lesser volume sold and nothing
related to the price)
Interviewer: “The prices for both the products have remained stable. However, data shows that the
volume of both the products sold has come down drastically at the ABP IIMB Store in the last few
months”
Candidate: “Ok. So that means prices of products are not the issue. I’ll drill down further on possible
reasons why the volumes would have come down for both products. Hope that is fine”
Interviewer: “Yes. Please go ahead”
Level 4: Volumes sold can go down due to 2 possible reasons – Either the demand from the
customer’s side has gone down OR the supply of products from ABP IIMB has gone down. Again at
this level, we have MECEed the variables. The reason for both these variables having gone down
could be plenty fold. Do not randomly start give reasons.
Candidate: “So if volumes have gone down, it’s either a demand drop from the customers or a supply
drop from ABP. Do we have any data from the client to indicate whether it is either of this or both
of this together happening?”
Interviewer: “From the supply side, there is absolutely no issues. The client had made the projections
and their operations were in line to supply as per projected requirements. But demand has gone down”
Candidate: “Ok. So I’ll limit the scope of further analysis only to the possible reasons why the demand
could’ve dropped. So broadly before I drill down on possible reasons why demand has gone down,
do we have any information on the competition for ABP IIMB. The reason why I’m asking this is to
see whether I need to look at something that the competition has been doing better than us because
of which customer are going to the competitors or something that we’ve not been doing as well as
compared to what we were before”
(I did not really break down into another level for showing the effect of competition, because it is an
obvious observation. If it wasn’t such an obvious observation for you or it did not strike you, don’t
worry. Just give it some time and practice – More on this will be discussed in a later section called
“Competitive Benchmarking / Industry Benchmarking. Now don’t worry about it and just proceed
forward with the ABP case)
Interviewer: “We do have some competition in the area. There are a couple of stores – Athicas, Amul,
PnE, NC etc. but they haven’t been doing anything different for a long time. So competition has been
indifferent for almost a year.”
Candidate: “That means that it is clearly an internal issue. Something that we were doing right
sometime back is not being done properly because of which the customers coming in have gone down
because of which volumes sold have gone down. Can I take a few seconds to think of possible reasons
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why this can happen? For that, I’m going to assume myself as a typical customer and break down my
journey to the restaurant and back and look at possible reasons where the bottlenecks could’ve
happened. Is that approach fine?” (The Customer Journey Analysis is one of the most powerful tools
to uncover bottlenecks FYI as part of solving cases)
Interviewer: “Yes. Please go ahead”
Now comes the real breaking down part. The skill that is generally checked is the ability of the
candidate to break down logically and sequentially.
Level 5: Broadly all parameters that affect the customer can be put into 2 buckets
External Factors (Before entering the restaurant and after leaving the restaurant) + Internal Factors
(All that the customer experiences inside the restaurant) - MECEed
Do not just say “External factors + Internal factors” That is too generic.
External Factors include variables like Availability of good car parking + External Ambience +
Security Guard Behaviour etc.
Just because you know ABP doesn’t have car parking or security, don’t make such assumptions. If
you’re making assumptions, state it out loud.
Internal factors include variables like internal ambience, waiting time in the queue, staff service
quality, food quality, convenience (like ease of payment) etc.
Candidate: “So broadly the variables affecting the customer’s journey include external factors like car
parking availability, external ambience, security guard behavior etc. and internal factors like internal
ambience, waiting time in the queue, staff service quality, food quality, convenience (like ease of
payment) etc. I think I’ve covered a lot of the variables. Do you want me to think of other variables
as well? If not, do we have some data to show that any of these variables have been bottlenecks over
the last few months”
(Please note that when I asked him whether I need to think of
other variables other than what I mentioned, I’m implicitly making it MECE because at this level,
there is a fair chance people might miss out variables. So play safe, make that statement and ensure
that you MECE it)
Interviewer: “No. You don’t have to think of other parameters. We have data to show that the staff
service levels have come down over the last few months. The customer surveys show that the staff
have become rather unfriendly and not responding well because of which the incoming traffic has
reduced. So you have drilled down to the core problem. Now please come up with recommendations.
If it’s an actual consulting assignment and it reaches this level, to collect the data, you’ll probably need
field visits to the ABP IIMB restaurant and get data to prove to the client the core problem which has
resulted in the profits going down. At every level for that matter, data is the primary thing. Consulting
is all about drilling down from a broad level objective function to the core problem with the help of
data at every level and ensuring it is MECEed as much as possible at every level.
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Please understand that there could be more than one core problem in a case. Then you’ll have to
prioritize and attack in such a way that you address the core problem which if corrected will create
larger impact on the objective function.
Step 4: Understand the current system in place to counter this problem:
Sometimes, no system might be in place to tackle this problem. Sometime, systems might exist but are
not really effective. Either way, before giving recommendations, you need to ask
Candidate: “Before giving recommendations, can I get an idea whether there are any systems in place
currently to counter this problem and if yes, why hasn’t the current system tackled the problem?”
Interviewer: “There is a system in place. There are monthly training programs for the staff where they
are regularly trained on how to deal with customers. The training programs are pretty effective.
However, in the last few months, a few new people were hired at ABP IIMB and they did not attend
the regular training and the management never came to know about this”
Step 5: Recommendations based on data based analysis
Recommendations naturally follow from Step 3 and Step 4
Candidate: “The core problem is reduced service levels, because of the lack of training for the new
staff. Various options to solve the problem include 1. Regular weekly training for the new staff until
service level standards are met. 2. A senior at the store to monitor the service levels of the new staff
to ensure that service level standards are met and no more customers are lost. 3. Increase service levels
beyond customer expectations until the negative effect of the reduced service levels is reversed and
then bring down the service levels back to normal standards. Do you want me to come up with more
options or is this fine?”
Interviewer: “Not required. This is fine. You’ve covered the solution we actually executed. Good job”
There are tons of solutions that can come as part of recommendations. But the main part is the drilling
down part (Step 3) and I believe that is where the evaluation of the candidate’s data-based breaking
down skills ensuring at every level the variables are MECE are tested.
Honestly, it is not really about giving recommendations. It’s more your thought process that matter
and they evaluate during Step 3. In one of my case interviews for summers, I did not even reach the
final recommendations stage – This is because I spent a lot of time with the interviewer on my CV,
post which we did not have a lot of time to complete the case. He was happy with the way my thought
process was during Step 3 and I passed that round.
The English and usage of words that I’ve written is subjective. You can talk whatever you want, but
ensure that the message is crisp, content is strong and you do not globe.
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It is not necessary to ask the interviewer so much as in this ABP example and not necessary to go to
all these levels I’ve gone to in this example. . I just showed it so that people are really clear on what
breaking down a problem means. This example gives you an idea of what the case method is.
The best part of the case method is suppose the actual problem was convenience issues (something
like ABP’s card machine is not working leading to lower customers coming in over time leading to
total revenue coming down), the same reverse engineering approach can be used to solve the problem.
In that case - At level 5, the interviewer would have mentioned that convenience is the core problem
and then you can drill down further to look at possible reasons under convenience and figure out the
problem. I hope you understand the power of the case method. You don’t even have to have any idea
about the core problem. You just need to be bothered about drilling down from the objective function
logically and sequentially and you need to be bothered only about the variables in every level. The final
core problem will naturally be found out in the process.
Suppose the issue was that the electricity charges were going up. Then after Level 1, we would go into
the costs vertical, drill down and find the problem in the exact same way.
This is the case method of solving problem. I created my own 5 step process. You guys can tailor it
to your requirements. Step 3 is indeed the most crucial one. Most of your time will have to be spent
there.
Step 1: Understanding a bit of the client business context:
Step 2: Set the objective(s)/goal(s) function
Step 3: Reverse Engineer from this objective function ONLY based on data, ensuring MECE
at each stage to drill down to the core problem(s)
Step 4: Understand the current system in place to counter this problem:
Step 5: Recommendations based on data based analysis
What are some of the important terms and norms in the consulting industry?
1. MECE:
I think I’ve made the concept of MECE very clear in the above ABP example.
a. The 26 alphabets are MECE to each other.
b. The 400 odd students of your batch are MECE when it comes to PGP 2015-17.
I hope you get the point. Sometimes, when you break down problems, it will be difficult to MECE
completely because you might not know the industry completely or you think you missed out
something. You can just play safe by stating “variable 1, variable 2…variable N. I think this covers
most of the parameters. Does this look comprehensive or do you think I need to look at some other
variables as well” – when you say that, there are 2 advantages
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a. If there are some variables you missed out, usually the interviewer helps out
b. The interviewer understand that you are open to having acknowledging the fact that you
can’t possibly cover everything. That one statement from your side can make the interview
sound more like a conversation where the candidate is implicitly acknowledging “Yes. I
can make mistakes. I might not be able to cover everything. I’m open to admitting that
and open to know new things that I might not have thought of” which the interviewer will
definitely appreciate.
When it comes to MECE, the only thing you need to ensure is that at every level, when you’re
checking with the interviewer, you ask all options at one shot and ask whether there is data available
for any of them. For example – At Level 1, don’t ask “Has the revenue gone down” If the interviewer
says “Yes”, you might just start drilling down further, but the costs might have gone up as well. The
ideal question should be “Do we have data to show that either the revenue has gone down or costs
have gone up or both are happening together?”
So MECE it when you say it out loud at every level. Else, it’ll sound stupid. Say for instance in the
ABP case, after you reach Level 5, do not ask very open ended questions like “is it a problem with the
car parking?” If the interviewer says “No” Then you ask “Is it a problem with external ambience”.
That is a very inefficient way of asking. At one shot, finish all parameters at that level and ask whether
data is available to show any of these parameters or multiple parameters are creating the core
problem(s) (Ensure you use usages like “ Do we have any data or information to show that any of
these parameters is a problem (after stating out the parameter)” and not open ended statements like
“Do we know anything about any of these parameters”
2. Data-centric mindset
As discussed before, this is a key to be a consultant. You’ll have loads and loads of data to deal with
as a consultant. You need to be prepared for that. It is not boring by the way. I did not like it so much
it at the beginning during my summers purely because of the large amount of data involved, but
realized that the data-centric decision making is indeed the most logical way to take decisions.
In addition to the data-centric mindset, please do think of how certain data points will be actually
measured on the field while you ask for data during a case interview. End of the day, it is always
possible to map everything to a survey or a feedback form or some number and make everything data
centric. Sometimes during the interviews, when you ask for certain data points, they might just ask
you back “How do you think we can measure this?”
The data-centric mindset is something they’ll definitely evaluate and as a consultant, a large part of
your work life will be about analyzing such data, figuring out patterns, and drawing insights from the
data sources
3. Pareto Principle (80-20 rule)
Like I had mentioned briefly before, some cases, during the process of drilling down, you’ll realize
there are multiple variables that are creating the core problems and all of them will have to be handled
to solve the case completely. In the ABP case, for example, Staff service quality as well as convenience
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together might be the bottlenecks. At all Levels, ensure that when you drill down, you use this pareto
principle which basically means prioritize and attack the problem to first address the lever/variable
which will create higher impact on the objective function. The below is the wiki definition of the 8020 rule. Some of you might think it is obvious. But I knew a lot of my friends in my batch who had
absolutely no idea what this means. It is basically just prioritizing within the variables, and
attacking/addressing the variables which will create higher return/impact
The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of
factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.
Also, in an actual consulting assignment, it might not be possible to MECE every possible option,
because the amount of data that will have to be analyzed would turn out to be so huge. So even then,
the 80-20 rule applies and you end up prioritizing and attacking the problems which you’re convinced
will create more impact on improving the objective function.
4. Competitive Benchmarking / Industry Benchmarking
This is something that was not covered in the ABP example. A lot of the work that consultants do is
primarily benchmarking. Like what the word benchmarking means, what it means in this industry is
compare the standards followed by the client with the industry standards or the standards followed by
better competitors and see where the gap is. Like for example, in our ABP case, suppose the actual
problem was that a hypothetical competitor at IIMB (Let’s call that restaurant XYZ), who is playing
in the same segment as ABP (same segment as in - both ABP and XYZ are targeting the same
customers) changes some of its internal food quality standards. As a result, the food quality at XYZ
goes up. The other side of it is that the costs for XYZ also might go up since higher quality food is
being served now. But the impact on ABP is that since the food quality at XYZ has gone up, the
customers that used to come to ABP will start going to XYZ. XYZ’s revenue will increase.
At some point, XYZ’s profits will also start increase (that point is where XYZ’s cost investment for
increasing the food quality breaks even with the extra revenue generated as a result of new customers).
But the issue for ABP is that their revenues will start going down as a result of customers going down
with absolutely no fault of ABP. ABP did not do anything wrong. But the competitor XYZ is doing
something better compared to what they were doing earlier. So in Page 7 of this document, where the
interviewer was asked about competition, if the interviewer had responded saying “Yes. This
competitor XYZ is has increased their food quality standards as a result of which customers are going
there” (XYZ could also increase staff service standards or ambience or a lot of other parameters). If
that is the case, then the case analysis would not have proceeded the way we did in the ABP case
above. Then, it’s a case on competitor benchmarking. And to know where the competition is doing
better than ABP, we’ll probably have to go through the same customer journey analysis and check
with the interviewer where the competition is doing better, accordingly find our bottleneck, correct it
and that is how that case will be solved. This is the idea of competitive benchmarking and this is
extremely important in consulting.
Industry benchmarking is more or less the same thing. Suppose instead of the revenue side, the
problem was in the costs side. And hypothetically, suppose the problem was that ABP is paying its
employees more than what the industry norms are, as a result of which the employee costs are high as
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a result of which total costs are high leading to lower profits. In such a case, the employee costs will
be benchmarked with the industry standards and recommendations will flow from the analysis
accordingly. This is just an example. The concepts of industry and competitive benchmarking are
extremely important and a lot of the work that consultants actually do is just this. I’ll not be explaining
any further in the following documents what benchmarking is. I think I’ve made it reasonably clear.
I’ll be just making statements like “This is a benchmarking problem. We’ll have to see where the gap
is and tackle this problem”. If you’ve understood this section on benchmarking, you’ll be able to
understand such statements. Else, read this again.
What are the different types of Cases?
The various cases I’ll be discussing in the further documents are the following:
1. Profitability cases: The ABP case discussed in this document is an example of a profitability case
2. Growth Strategy Cases: Suppose ABP wants to grow in Bangalore and increase its revenue
3. Market Entry Cases: Suppose ABP wants to enter the Mumbai market, how does ABP go about
this problem
4. Guestimates: Suppose ABP wants to understand the Mumbai market potential in terms of size
(INR) of the segment in which they’re competing. This number will be required as part of
understanding whether the market is worth entering. Guestimates are rough back-of-the-envelope
calculations to figure out such numbers, used mostly as part of Market entry cases
5. Mergers and Acquisitions (M&A) – Suppose ABP wants to merge with Company X or in another
case, acquire Company Y – How would ABP go about it? What are the things ABP will have to
look at ? M&A cases are rarely asked, especially because unlike other countries, in India, the level
of M&A that happens is less. So, I’ll just be covering basics.
I’ll not keep sticking to ABP if you’ve started to feel it’s boring. Atleast, I’ve started to feel ABP is
getting boring. So, I’ll bring in other examples.
This document has given you a fair idea about what a case is, what the case method of solving
problems is, a few important terms and norms in consulting and what the various types of cases are.
Now, let’s get into the various types of cases and a few simple frameworks to handle these cases, with
examples. Document # 15 and 16 that I have enclosed are 2 documents that really helped during my
case interview preparation. Doc# 15 was shared by ICON and Doc#16 is a file that I had received
from a friend of mine. The next few documents will have some similarities to these documents. I’ve
combined the best of both these documents and several other learnings in Documents 8-14. So, even
after going through the next few documents, do refer to Doc# 15 and 16.
The foundation/roots for the tree of learning for your case preparation has been set in this document.
The onus is on the candidate to have read this document thoroughly
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Now we’ll go into the next sections where we’ll start from these roots and make the tree of learning a
big huge one with branches and leaves and flowers ☺ (I know it’s a funny random analogy. It’s just
my style of communicating. If you don’t like it, you can ignore such random statements and just
takeaway the positive learnings)
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