Casebook
May 2022
Note to the reader
Dear AUBCC member,
This casebook has been crafted to help you navigate the consulting recruiting process and help
you prepare for potential interviews. Inside, you will find two sections: the first tackles the
fit/behavioral segment of the interview while the second revolves around the case solving part.
Please note that this is meant to supplement the excellent work done by other consulting clubs
around the world, so we strongly encourage you to not make this casebook your sole reference.
Good luck!
- 2021/22 AUBCC Cabinet
Fit Interview
A fit interview is your opportunity to shine
10-15 minutes long
Tell your story
Expand beyond CV/CL
• First segment of an actual
interview
• It is your opportunity to
shine
• You are more than your CV
and Cover Letter
• Can run longer than 15 min.
if the interviewer is
interested in your story
• Tell them who you are and
what makes you special
• Show your charisma
• As important as the case
• Make it engaging,
captivating and straight to
the point!
• Talk about the experiences
that make you “you” and
distinguish you from the
typical AUB applicant
The fit part helps the interviewer answer key questions
Are you an agreeable person they want to work
with?
Are you someone they feel comfortable putting
in front of a client?
Tell me about yourself
Typical Question #1
Be exhaustive
You’re a complex person that extends
beyond a GPA and a major!
Make it fun!
You’re more than academics and
extracurriculars, make the personal
details that make you “you” shine too!
It’s a story not an obituary
The interviewer is not here to listen to a list
of bullet points but to an intricate story!
Sample answer
It’s a pleasure to meet you!
My name is […], I’m currently a second-year student at AUB
pursuing a degree in Mechanical Engineering with a minor in
Economics. I initially decided to major in MECH because of my
love of cars and machines and how they continue to impact our
lives on a massive scale. This led me to joining ASME which
helped meet fellow-minded people and organize […]. However, I
also developed a strong interest in Economics and Finance
which led me to the Investment Club where I was able to […]. In
addition, I am also an avid Basketball fan and player which was
a strong driver behind joining the Basketball Varsity Team. All of
these experiences were great opportunities to learn, grow
outside the classroom, and become a better team player and a
well-rounded individual.
Last but not least, on a more personal note, I am an avid reader
of Greek Philosophy and a big fan of Oum Kalthoum.
Note: This is not an exhaustive set of hard rules on how to answer the question but rather as a steppingstone and guide to the answer that reflects you best
Why Consulting ?
Typical Question #2
Think carefully about it
Know what you’re getting to and ask
yourself: “Why am I interested in
consulting?”
Do your research
You’re not Harvey Specter. Movies can
be deceiving so make sure you what the
industry is really about
Google is not everything
Talk to people who have interned or are
working in consulting. They’ll give you a
perspective you can’t find online!
Sample answer
As a mechanical engineering student, I’ve had the chance to do
a technical internship in […] at […]. While it was a great
opportunity, there were certain red flags. I enjoy problemsolving a lot, however, not in an engineering setting. I’d much
rather see the impact of my work in a business-setting because
it is more tangible and has a bigger reach. This is the main
selling point of consulting for me: use my problem-solving skills
and analytical thinking skills in a business setting, especially to
help improve the strategy of a certain technical project for
example. In addition, the dynamic and fast-paced environment
of consulting is an unparalleled opportunity to learn about new
industries and diversify my skills, especially non-technical ones,
in order to become versatile and well-rounded, which I think are
crucial characteristics. Last but not least, it’s a great
opportunity to work in an environment that champions diversity
where I can learn from all these different people with
contrasting perspectives, something mechanical engineering
doesn’t always have.
Note: This is not an exhaustive set of hard rules on how to answer the question but rather as a steppingstone and guide to the answer that reflects you best
Why [Firm Name] ?
Typical Question #3
Firms are different
They’re not the corporate version of Agent
Smith. Each firms has a distinct purpose,
identity, and way of doing things
It’s not a one-size fits all
Building on the previous point, it is
inevitable you will like certain firms more
than others so think about it while applying
Network!
Personal experience is a much better
indicator of whether you like the company
or not than information found online
Sample answer
I was first introduced to [...] during the firm’s presentation at
AUB, where I got the chance to meet some brilliant consultants
of the firm. Honestly, I was really impressed by how you
approached us and involved us in your presentation, as we had
to guess facts about the consultants through questionnaire and
polls. You seemed like a family where each one of you had a
genuine story and adventure to tell, and it was at that moment
that I said well hope one day I would be part of this family. Also,
I always wanted to find a company whose values and priorities
are aligned with mine, integrity, respect, team spirit, and
entrepreneurship, and this is where I knew that [...] is the
perfect fit.
I greatly appreciate that [...] introduced the […] program which
is proof that [...] really cares about making its consultants’ lives
manageable and easier and is a unique practice in the
consulting industry, showing that the firm respects its human
capital.
Note: This is not an exhaustive set of hard rules on how to answer the question but rather as a steppingstone and guide to the answer that reflects you best
Give me an example of leadership
Typical Question #4
How were you a leader?
Give details about the whole experience and
the reasons behind your actions. They count
much more than the end result
No one is perfect
No one expects you to have masterfully
orchestrated a $1 bn LBO. Be authentic and
acknowledge shortcomings. That’s what
makes a great leader!
Leader ≠ Boss
At its core, leading a team is not about
commanding people. It’s about much, much
more
Sample answer
My friends and I formed a group to work on a class project. Our
project was to design a car on a software, and to conduct a
motion analysis as well as a simulation analysis. Our project
was one of the most difficult ones as it requires us to draw the
car from scratch, in addition to the complex design to cope with
such high speeds and high friction. This was the biggest
obstacle we faced. Being the most interested in the field of cars,
I started to dig deeper into how we will be proceeding with this
problem. I started splitting the tasks among the team and
coordinating with them on any new findings along the way.
After one week of research, I was able to collect all the pieces
that were found by my teammates and I to come up with a
solution that allowed us to design an engine that would fit with
our dimensions.
We were able to design the car, however its motion analysis
failed, which had me re-evaluate the problem with my professor
who helped me throughout this problem to figure it out.
Note: This is not an exhaustive set of hard rules on how to answer the question but rather as a steppingstone and guide to the answer that reflects you best
Additional Questions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Walk me through your CV.
If I should remember you in one word, what would it be?
Why should we choose to give you an offer?
Tell me about a group project that was very important to you and mention why
What are your top 3 strengths?
What are your 3 biggest weaknesses?
Tell me about a time you challenged yourself.
Tell me about a time you led a group.
What is the most interesting course you took at university and why?
What skills do you aim on improving?
Why are you a good candidate for a career in consulting?
Tell me about a leadership experience that tested your ability to work with and
manage others .
What is your biggest regret?
Why are you not pursuing a career directly related to your major at university?
Why did you choose to join this major?
All the candidates here have interesting profiles, what sets you apart from the
rest?
Tips
Study the firm
Be spontaneous
Stay concise
First impressions last
This is your opportunity
to show how you will fit
into the firm’s culture
and enjoy working
there, so answer the
questions truthfully
while promoting what
you consider your
strengths
Do not memorize
answers written
beforehand and say
them word for word as
the interviewer will
probably sense this and
can throw you off-guard
by asking an unusual
question
Do not talk too much!
Keep your answers
concise. If you’re talking
for over 1.5 – 2 minutes,
the interviewer might
lose interest in the
message that you’re
trying to send
This is your first
impression on the
interviewer and is as
important as the
remainder of the
interview. Prepare for
the fit part as seriously
as you would for the
case!
Tips
Keep practicing
Confidence is key
Adapt and adjust
Discover yourself
Do mock Fit Interviews
with your friends or
colleagues. This will
give you a good feel for
whether your answers
will sound good during
your real interview
Be confident and
concise. Do not doubt
your answers
Adapt your answers to
what you feel the
interviewer will enjoy
talking/hearing about
by discussing
interesting topics that
could lead to a fruitful
conversation
Go through a process of
introspection and
prepare a few stories
about yourself and
aspects you could
improve on
Case Interview
Types of Cases
What are the different types of cases you might face during an interview?
Market Sizing
Profitability
Market Entry
Other
Estimate the size of a
market using a logical
approach and fair
assumptions
Use probing questions
to elucidate a decrease
in profitability
Help a client decide
whether to enter a
market or not
A myriad of possibilities:
valuation, M&A, brainteasers,…
List of Cases
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Diapers in KSA
Hot Dog Stand
Concert in Riyadh
Billionaire Banker
TV Family Business
Plane Ticket Price
Energy Consumption
KSA Retail Bank
Lebanese Cryptocurrency
Hair Loss Pill
Diapers in KSA
Diapers in KSA
Type
Difficulty
Market Sizing
Easy
Prompt
Estimate the market size of diapers in KSA.
This is an interviewee-led case. Ask the candidate to estimate numbers. If they are in the right ballpark, they should
use the numbers they came up with themselves. Provide numbers below only if estimates are too far-off.
Additional
Information
•
•
•
•
•
•
Elderly people are included
Only consider disposable diapers
Market size should be done by sales and not volume
Population of KSA is 35M people
Life expectancy is 80 years
One pack of 12 diapers costs $6
Age group
0-1
1-2
2-3
75-80
Diaper use (%)
100%
90%
80%
30%
Average Quantity
(per day)
10
8
6
4
Diapers in KSA
Solution
This is a typical market sizing case where the interviewer must dissect the population of
KSA according to age groups and proceed from there.
Population of KSA = 35 M
Life expectancy is 80 years
35 𝑀
80
≈ 450k people per age category
Diapers in KSA
[0-1]
450K
100%
450K
10/day
4.5M/day
[1-2]
450K
90%
405K
8/day
3.2M/day
[2-3]
450K
80%
360K
6/day
2.2M/day
[75-80]
450K x 5
= 2.25 M
30%
675K
4/day
2.7M/day
Total Sales = 4.6 B x
𝟔
𝟏𝟐
= $2.3B per year
Total
= 12.6 M / day
= 4.6 B / year
Hot Dog Stand
Hot Dog Stand
Type
Difficulty
Profitability
Easy
Prompt
Your client has a hot dog stand that has been experiencing a decline in
profitability in the past few months, and they want to know what the problem is.
This is an interviewee-led case. Ask the candidate to estimate numbers. If they are in the right ballpark, they should
use the numbers they came up with themselves. Provide numbers below only if estimates are too far-off.
Additional
Information
•
•
•
•
•
•
•
The stand is located in Hamra, Beirut.
The stand serves a standard meal consisting of a hot dog and a drink for $6.
Our direct competition is Frank’s Hot Dog and they are not facing any problem.
Indirect competitors are Roadster Diner and other restaurants.
The stand sells 15 meals per day
Fixed costs: disregard – the truck has been running for a while.
Variable costs: related to daily operations
• Cost Of Goods Sold (COGS): 3x pricing strategy
• Utilities (gas and electricity): $400 per month
• Rent: $800 per month
• Labor (1 chef): $500 per month
• Expired food: $200 per month
Hot Dog Stand
Solution
This is a typical profitability case. Let us start by computing the profits generated by this
truck which is done by finding the revenues and the costs.
Revenues
Costs
$6/meal
x
15 meals/day
Price
Quantity
0
2 × 15 × 30
+ 400 + 800
+ 500 + 200
Fixed Cost
The candidate can list other
revenue streams (Ads on truck,
Delivery
service,
Hot
Dog
toppings, New products …) but
we will only consider the
standard meal for the solution
+
=
Total
=
Variable Cost
Profit
$90/day
$2700/month
Revenues - Cost
= 2700 - 2800
= $ (100) /month
$2800/month
Total
Hot Dog Stand
Question : Given profits are in the red, how can we increase profitability ?
The interviewee should come up with different ways to increase profitability in a structured
a cohesive way. A possible answer could be:
Increase prices (take into consideration price elasticity of customers)
Increase
Revenues
Increase volume by working on marketing or introducing new items to the menu to
answer the customers’ needs
Add new revenue streams such as advertising for businesses
Changing location to reduce rent cost (could be a bad idea because the location is a
key factor to our client)
Decrease
Costs
Trying to reduce the COGS, but not at the expense of reducing quality
Inventory is an important factor to mention here because food has a relatively
short lifespan and our client is incurring a loss of $200 as a result. The client should
forecast, based on monthly trends, the quantity of food needed per month in order
to reduce this cost
Concert in Riyadh
Concert in Riyadh
Type
Difficulty
Profitability
Easy
Prompt
Our client is an entertainment company that wants to do a concert in Riyadh
with a famous DJ and they have come to us to see if it’s a good idea or not.
This is an interviewee-led case. Ask the candidate to estimate numbers. If they are in the right ballpark, they should
use the numbers they came up with themselves. Provide numbers below only if estimates are too far-off.
•
Additional
Information
Costs:
• $3 commission PR affiliates make
on each ticket sold
• DJ: $6,000
• Venue rent: $5,000
• Maintenance and Insurance: $4,000
• Operational expenses: $4,200
VIP
Regular
Tickets
400
600
Price
$50
$20
Sponsor
Amount
EJ Entertainment
$3,000
Sky Events
$2,000
DJDS Events
$1,000
Concert in Riyadh
Solution
This is a typical profitability case. We must first compute the profits generated by this
concert which is done by finding the revenues and the costs.
Costs
Revenues
$50 x 400 = $20,000
Regular Tickets
+
$20 x 600 = $12,000
$19,200
FC
+
VIP Tickets
$3,000
VC
+
$6,000
Sponsors
=
$38,000
Profit
=
Total
$22,200
Revenues – Cost = 38,000 – 22,200 = $15,800
Total
Concert in Riyadh
Question : This seems like a profitable idea so what are important aspects
of the event that we have to address?
Note: This is a non-exhaustive list, candidate might come up with additional ideas
1.
Barriers to entry
• License in order to organize concert events
• Local business regulations (necessity to partner with local patron)
2. Culture and preferences of target market
• Potential split of audience between males and females to respect local cultural
norms
3. How to sell the tickets to achieve 100% occupancy
• Online box office, local stores, social media promotions,…
• Timeline (start selling 1,3,6 months before)
4. Additional revenue streams:
• Accessories (glow sticks, t-shirts,…)
• Memorabilia related to the DJ and other performers
• Restaurants / food carts for burgers, hot dogs,…
• Non-alcoholic drinks
• Parking valet
Billionaire Banker
Billionaire Banker
Type
Difficulty
Market Entry
Easy
Prompt
Your client is a billionaire that is considering entering the Saudi banking sector.
Should they do it or not? What are the factors that should be considered?
This is more like a discussion case. Any interesting information that the candidate gives can be taken into
consideration in the case solving.
•
•
Additional
Information
•
•
•
Our client has no past experiences in the banking industry.
The Saudi banking market is relatively saturated but there is still place for an entrant like our
client.
There are no new regulations that prevent our client to enter the market.
Saudization should be considered for this entry.
Option 1 - Opening our own bank:
• Initial Investment: $15M
• Yearly revenues: $10M
• Profit Margin: 22%
•
Option 2 - Acquiring an existing player:
• Cost of acquisition: $20 M
• Yearly profit: $2.5M
Billionaire Banker
Sample Framework
Interviewee should target these 3 essential buckets:
Competitors
•
•
•
Who are the
competitors? Are they
well established in KSA?
Do the competitors have
the same goals as our
client?
Market trends,
alternatives, and future
projections
Barriers to entry
•
•
Should we have a Saudi
partner to enter the
market in KSA?
(Saudization)
Are there any
regulations set by the
government?
You should guide the candidate to the realization that
there are 2 ways to enter the market (see next slide) and
that he must study the profitability analysis of each.
Market Size & Share
•
•
What is the potential
market share our client
can get after entering
the market?
What are the market
shares of our
competitors?
Billionaire Banker
Profitability analysis
Interviewee should consider the profitability aspect of both options.
Green Dev. / Starting Organically
•
This is risky given our client has no
experience in the industry and does not have
any credibility in the market
Profitability analysis:
•
•
•
Initial Investment: $15M
Yearly Profit: 10 × 0.22 = $2.2M
Payback period:
15
= 6.8 years
2.2
Acquire Existing Player
•
This is safer given the player has an already
established customer base but there is the
concern of profitability
Profitability analysis:
•
•
•
Cost of acquisition: $20M
Yearly Profit: $2.5M
Payback period:
20
= 8 years
2.5
Billionaire Banker
Recommendation
In this case, an important factor to consider is to know the risk appetite of our client:
•
•
Opening a bank from scratch means that the revenues and hence, the profits, are forecasted and the
money is not actually there.
But, in the case of an acquisition, the customer base is already established, and the money is there.
Therefore, the risk is lower.
That being said, it depends on what the client wants.
TV Family Business
TV Family Business
Type
Difficulty
Market Entry
Medium
Prompt
Our client is a family business in Dubai that wants to acquire a TV channel
broadcasting company. They already operate and own businesses in the F&B
and transportation sectors. Is this a good idea or not?
This is an interviewee-led case. Ask the candidate to estimate numbers. If they are in the right ballpark, they should
use the numbers they came up with themselves. Provide numbers below only if estimates are too far-off.
Additional
Information
•
•
•
•
•
•
•
•
Client’s objective is payback period of less than 5 years
Channel operates 24/7 for 300 days per year
Only revenue stream is advertisements
For every hour of streaming, we have 10 mins of ads and 50 mins of streaming
1 min of ads during peak hours (4 h/day) costs $250
1 min of ads during peak hours (20 h/day) costs $100
Initial Investment is $15 M
Yearly operational costs are $6 M (mainly labor costs)
TV Family Business
Sample Framework
Interviewee should target these 3 essential buckets:
Client
•
•
•
Financial capabilities to
acquire the company
Expertise
Conflicts of interest with
other businesses
Market
•
•
•
•
Competitors
Market leaders
Potential market share
Barriers to entry
(regulations, policies,
antitrust laws,….)
Profitability
•
•
You should guide the candidate to the profitability
bucket by stating that the client has necessary expertise
and capability and that there are no barriers to entry.
Revenues:
•
Streams (subscriptions,
packages and bundles, ads,…)
•
Prices of subscriptions,
bundles, ads
•
Volume (number of
subscribers)
Costs:
•
Initial Investment
•
Fixed Costs
•
Variable Costs
TV Family Business
Profitability analysis
Unique revenue stream is advertisements, and we will use the bottom-up approach to
determine revenues.
Peak hour ads
$250
Non-peak hour ads
$100
Payback period
$ / min
$ / min
=
x
x
10
mins / hour
10
mins / hour
Initial Investment
Yearly Profit
x
x
=
4
hours / day
20
hours / day
x
x
300
days / year
300
days / year
$15 M
$15 M
=
Revenue − Cost
$3 M
=
$3 M
=
$6 M
=
5 years
Here, ask the candidate to critique the result and ask them if it makes sense. The candidate should realize that the limiting
factor is the supply and not the demand (not all ad slots are taken). After that, tell them the actual yearly revenue is $8 M.
Payback period
=
15
= 7.5 years
2
TV Family Business
Question: how to maximize profit to accelerate payback?
Interviewee should look into two options:
Increase Revenues
•
•
•
Charging a subscription
Increase the demand of ads to meet
maximum capacity through:
•
Marketing
•
Advertising the family business
(F&B and transportation)
•
Broadcast awareness campaigns
(smoking kills, suicide hotlines,…)
Host entertainment programs (like
“The Voice” for example)
Decrease Costs
•
•
•
Decreasing initial investment
Decrease labor costs
Outsource / Automate certain jobs
Plane Ticket Price
Plane Ticket Price
Type
Difficulty
Profitability
Medium
Prompt
Our client is an airline company based in Dubai. They want to prepare a flight from
Dubai to Paris and they want us to find the price per ticket that maximizes profit.
Additional
Information
• Number of seats in the plane: 300
If 200 seats are taken → Ticket Price $1,000
If 100 seats are taken → Ticket Price $2,000
• Revenues:
• Ticket price
• Extra luggage charge
• Amenities
• Advertising
• Companion fee for minor travelers
• Pet extra fee
•
Costs
• COGS
• Labor
• Maintenance
• Marketing
• Airport fees and taxes
• Fuel
• Insurance
Fixed: $10,000
Variable: $500/seat
Plane Ticket Price
Solution
This is a not a very typical profitability case. We must express the profits in term of P,
which is the ticket price. Afterwards, derive the profit expression, set it equal to zero, to
find the maximizing price P.
Assume we have a linear relationship between number of seats S and price per seat P of the form
S= a × P + b
ΔS
200 − 100
a=
=
= −0.1
ΔP 1000 − 2000
To find b, take one point and replace in the equation: 200 = −0.1 × 1000 + b so b = 200 + 100 = 300
So, the relationship is
S = −0.1 × P + 300
Revenues
S × P = −0.1 × P2 + 300 × P
Costs
10,000 + 500 × −0.1P + 300 = 160,000 − 50P
Profit
Revenues − Costs = −0.1 P2 + 350P − 160,000
Plane Ticket Price
Solution
Now, in order to maximize profit generated, all we have to do is take the derivative of the
profit expression in terms of P and set it equal to 0. The resulting value of P is the price
that maximizes profit.
Profit = −0.1 P2 + 350P − 160,000
dProfit
= −0.2P + 350 = 0
dP
350
P=
= 1,750
0.2
The price that maximizes profit is $1,750.
Energy Consumption
Energy Consumption
Type
Difficulty
Discussion Case
Hard
Prompt
The ministry of energy of a GCC country has hired you to design a program to reduce
the overall energy consumption of the country. How do you approach the problem?
This is an interviewee-led case. Ask the candidate to estimate numbers. If they are in the right ballpark, they should
use the numbers they came up with themselves. Provide numbers below only if estimates are too far-off.
•
Additional
Information
This is a discussion case. All information is on the next slides.
Energy Consumption
Sample Framework
Interviewee should come up with a structure that targets these 4 essential buckets:
Major consumption
sectors
• Residential sector
• Commercial and
entertainment sector
• Industrial sector
• Transportation sector
Consumption
reduction
• Find ways to reduce
consumption for
sectors on the left
(check note below)
Feasibility analysis
Profitability analysis
• Engineering feasibility
• Expertise
• Available technology
• Cost benefit analysis
to evaluate nonquantitative key
aspects like reduced
CO2 emission, cleaner
air...
The interviewer will guide the candidate and let them know that feasibility and profitability will not be explored in
this case in the interest of simplicity and saving time. The candidate will be only working on suggesting possible
ways to reduce the overall energy for each of the buckets.
Energy Consumption
Consumption reduction
Interviewee should come up with ways to reduce energy consumption for the 4 sectors.
Residential, Commercial and Entertainment
sectors
• Increase the cost of electricity per Kwh
• Offer free installation and discounts on
energy-efficient home appliances
• Install sensors for light bulbs to turn off
when the room is empty
• Reduce the # of unnecessary lightbulbs in
buildings
• Consolidate the cooling systems in buildings
Industrial sector
Transportation sector
• Increase the cost of
electricity per Kwh
• Impose higher taxation
and regulation policies
on big consumers of
energy
• Offer free installation
and discounts on energy
efficient machines
• Reduce the operating
hours
• Offer incentives to
companies with good
R&D departments to find
ways to reduce energy
consumption
• Increase the car fuel
prices
• Increase the price of cars
to encourage public
transportation
• Increase the costs and
taxes of driving licenses
and car licenses
• Increase the charges on
toll stations for cars
• Encourage car pooling
programs
• Install electric stations
for hybrid cars
KSA Retail Bank
KSA Retail Bank
Type
Difficulty
Profitability
Hard
Prompt
Our client is one of the largest retail banks in KSA. They have been facing a
decline in revenues for the past two years and they have hired us to find the
reason and provide them with a solution.
This is an interviewee-led case. Numbers in this case are project related and should be given to the interviewee
prior to shaping the framework. Direct the interviewee and discuss the numbers below.
Additional
Information
•
-
The bank’s revenue streams are classified into 3 main categories:
Category 1: Personal Loans & Credit Cards
Category 2: Car Loans
Category 3: House Loans
Category 1
Category 2
Category 3
2 years ago
55%
28%
17%
Now
50%
30%
20%
KSA Retail Bank
Sample Framework
The candidate should structure their framework taking an external-internal approach to
ensure a MECE framework.
Internal Factors
External Factors
•
Economic factors:
•
•
•
•
Decrease in customer disposable
income
Change in interest rates
Any new regulations imposed in the
financial sector
Market Factors:
•
•
•
•
Competitors facing the same issue or
not
Services offered by other
competitors
Market share of client and other
leaders
Revenue Streams:
•
•
•
•
Price and Fees:
•
•
Has there been an increase or
decrease?
Volume:
•
•
Credit & Debit cards
Return on loans
Money exchange fees
Has there been an increase or
decrease in number of
customers?
Product Mix:
•
% of revenue streams
The interviewer will guide the candidate and let them know that the problem is only internal.
Therefore, the candidate should explore the different rev streams which are split into 3 categories.
KSA Retail Bank
Question
The interviewer will guide the candidate and let them know that the problem is only
internal. Therefore, the candidate should explore the different rev streams which are
split into 3 categories (refer to additional information).
Ask candidate about the absolute reason behind declining revenues. Candidate should
know the reason is category 1 NOT ONLY because the % has dropped by 5% over the last
2 years BUT ALSO because the total revenue has dropped.
Then, ask candidate about categories 2 and 3. Candidate should say it is undetermined
whether these 2 categories caused an increase or decrease in total revenue due to the
relative change with respect to the total revenues.
Now, guide candidate to find ways to increase the revenues within category 1. This can
either happen by selling more to existing customers or acquiring new customers. Followup and ask which one is easier. Candidate should know that selling more to existing
customers is easier since there is high customer retention in banks, people have fixed
deposits and loans and can’t move accounts easily.
Candidate should name some ways to sell more to existing customers and, most
importantly, cross selling (selling credit cards to personal loan owners and vice versa).
Proceed to tell candidate to only focus on determining the increase in revenues resulting
from selling credit cards to personal loan owners (because of time limit of the case).
KSA Retail Bank
Revenue Estimation
Use the below information to guide the candidate to figure out how much revenue can be
made from cross-selling between credit cards owners and personal loans owners. More
precisely, ask them to determine the increase in revenues resulting from selling credit
cards to personal loan owners.
Once done, inform the candidate that cross-selling the other way around generates
$18.75M in revenue.
This is an interviewee-led case. Numbers in this case are project related and should be given to the interviewee
prior to shaping the framework. Direct the interviewee and discuss the numbers below.
Additional
Information
•
•
•
•
•
-
There are 500,000 customers in category 1:
30% have personal loans only
50% have credit cards only
20% have both
Only 10% of customers with personal loans only are interested in credit cards
On average, each customer spends $20,000 per year
On average, 5% of customers default on credit card payments
Credit card fees:
$250 annual fee
10% charge for customers who default
KSA Retail Bank
Revenue Estimation
The added revenue should be calculated the following way:
150k
100k
250k
15,000
Annual credit
card fee
Customers
Payment
default fee
Customers
Total Added
Revenue
15,000
$3.75 M
Candidate should figure out that,
out of the 150k with personal loans,
only 10% – which is 15,000 – are
interested in credit cards.
Personal Loans
Credit Cards
x
x
+
250
$ / customer
0.05
Share that defaults
$1.5 M
=
x
+
$3.75 M
20,000
Amount / customer
$18.75 M
x
=
0.1
10% Charge
=
$24 M
$1.5 M
KSA Retail Bank
Recommendation
Candidate should recommend going ahead with the cross-selling strategy but also look
more deeply into the other categories as these might be potential results of decline
revenues.
Lebanese Cryptocurrency
Lebanese Cryptocurrency
Type
Difficulty
Market Entry
Medium
Prompt
Our client is a startup that wants to create a cryptocurrency to be used in
Lebanon. They have hired you to know if this is a good idea or not.
This is an interviewee-led case. Ask the candidate to estimate numbers. If they are in the right ballpark, they should
use the numbers they came up with themselves. Provide numbers below only if estimates are too far-off.
Additional
Information
•
•
•
•
There is one major competitor: Bitcoin (BTC) who controls 60% of the market
There is a fix added charge of $0.5 on all transactions
Income-based distribution of population: high (10%), mid (50%), low (40%)
Profit margin is 10%
Age
Transaction
Commission Share of
group
Income
Transactions
size
transaction
0 – 20
level
per week
volume
Share into
crypto
10%
High
7
0 – $10k
$0.6
50%
21 – 40
25%
Medium
3
$10k - $100k
$0.4
40%
41 – 60
5%
Low
1
> $100k
$0.2
10%
61 – 80
0%
Lebanese Cryptocurrency
Sample Framework
Interviewee should target these 3 essential buckets:
Client
•
•
Previous experience and
expertise in the crypto
space
Financial capabilities to
back the idea
Market
•
•
•
Market size of crypto in
Lebanon
Competitors and their
market shares
Barriers to entry:
legislative
requirements,
governmental
regulations, restricted
access to distribution
channels,...
Profitability
•
•
Revenues
•
Revenue streams: fixed fees,
transaction commission,…
•
Prices and fees charged in
exchange for service
•
Volume: expected # of
customers
Costs
•
Initial Investment
•
Operating expenditures: fixed
and variable costs
The interviewer will guide the candidate and let them know that the client has the necessary expertise and is financially
capable to pursue the idea. There is only one main competitor which is Bitcoin (BTC) which has a 60% market share and
an untapped market of 40%. The candidate should proceed to estimate the crypto market size in Lebanon.
Lebanese Cryptocurrency
Step 1: Market Sizing
The candidate has to estimate the size of the crypto market in Lebanon.
Key factors to
consider
6M
People in Lebanon
Age, income, risk appetite, tech literacy, ability to trade, knowledge of crypto,…
1.5M
0 – 20 y.o.
1.5M
21 – 40 y.o.
10%
25%
150k
0 – 20 y.o. into crypto
375k
600k
People in Lebanon
into crypto
21 – 40 y.o. into crypto
40%
1.5M
41 – 60 y.o.
1.5M
61 – 80 y.o.
5%
0%
75k
41 – 60 y.o. into crypto
0
61 – 80 y.o. into crypto
240k
Maximum available
market
Lebanese Cryptocurrency
Step 2: Profitability Analysis
The candidate has now to estimate the potential profit ensuing from creating this new
cryptocurrency.
240k
People using the coin
0.1
High-income share
0.5
Mid-income share
0.4
Low-income share
x
x
x
7
Transactions / week
3
Transactions / week
1
Transactions / week
=
=
=
168k
Transactions
From the fixed charge
Transactions / week
Transactions
96k
Transactions
Revenues & Profit
$0.5 × 624k = $312k
624k
360k
Profit margin
0.5 × $0.6 × 624k
+ 0.4 × $0.4 × 624k
+ 0.1 × $0.2 × 624k
= $300k
From commission
=
$612k
Revenue
10%
$61,200
Expected Profit
Lebanese Cryptocurrency
Step 3: Additional Question
Ask the candidate to explain why the profit margin is 10% and not more. The candidate
should realize that he is asked to explain why the costs are so high. Reasons:
•
•
•
High initial investment cost to get the needed licenses and approvals, secure a
location to host the equipment, buy the servers, high cooling expenses (to avoid
overheating of CPUs which will be constantly mining,…)
High cost to validate the transaction on the blockchain that will host the coin
Potentially high customer acquisition cost to convince people to use this coin and not
a more established and international one like Bitcoin
Step 4: Recommendation
This seems like a profitable idea, but the client must know that the entry of any other
competitor will inevitably decrease the 40% market share we assumed our coin would
capture. Furthermore, one must consider the size of the initial investment and compare it
to the yearly profit to have an estimate for the payback period. Last but not least, the
client should also investigate ways to decrease costs and raise the profit margin.
Hair Loss Pill
Hair Loss Pill
Type
Difficulty
Profitability
Medium
Prompt
Our client created a pill that reverses hair loss and they want to sell it in Lebanon.
They have hired you to estimate the revenues of the first year.
This is an interviewee-led case. Ask the candidate to estimate numbers. If they are in the right ballpark, they should
use the numbers they came up with themselves. Provide numbers below only if estimates are too far-off.
•
•
Additional
Information
•
Only 1 pill is needed to cure a person suffering from hair loss.
No direct competitors exist. However, indirect competitors offering hair treatment and transplant
can be a threat when it comes to pricing.
The average cost of a hair transplant is $5,000.
Age Group (Men)
Population
% Interested
Age Group (Women)
Population
% Interested
0-20
0.75M
0
0-20
0.75M
0
21-40
0.75M
20
21-40
0.75M
0
41-60
0.75M
50
41-60
0.75M
5
61-80
0.75M
40
61-80
0.75M
20
Hair Loss Pill
Sample Framework
Knowing that Revenue = Price x Volume, the interviewee should target these 2 essential
buckets:
Price
•
•
•
Price/pill
Number of pills needed
for full treatment
Pricing strategy:
•
Cost-based
•
Value-based
•
Competitor-based
Volume
•
•
Market size in Lebanon
Market share (if there are
any competitors)
The interviewer will guide the candidate and let them know that there are no competitors selling the same product.
Hair Loss Pill
Discussion & Analysis
You should drive the candidate to the following realizations:
Price
Volume
Candidate should realize that this pill has a lot
of value for its users, especially since only 1
pill is needed throughout the lifetime of the
person for full cure. Therefore, the candidate
should realize that the pricing strategy should
be a mix of value-based and competitor-based
pricing. No direct competitors exist, however
indirect competitors offering hair treatment
and transplant can be a threat when it comes
to pricing.
Candidate should take into consideration
that people interested in the pill are
mostly men because they suffer more
from hair loss. But there are some women
who also might be interested, and they
should be accounted for.
Candidate should price it anywhere in the
range of 1.5 to 2 times the price of the
treatment:
Around $7,500 to $10,000
An income segmentation approach should
be used as this pill is rarely affordable by
lower income classes
Income
level
Share of
population
Share that can
afford pill
High
10%
100%
Medium
40%
30%
Low
50%
0%
Hair Loss Pill
Market Sizing
To calculate the total number of interested people in the pill, candidate should follow the
below approach.
0.75M
0 – 20 y.o.
0.75M
21 – 40 y.o.
0.75M
41 – 60 y.o.
0.75M
61 – 80 y.o.
3M
3M
Men in Lebanon
Women in Lebanon
0%
20%
50%
40%
0k
Interested in the pill
150k
0.75M
0 – 20 y.o.
0.75M
Interested in the pill
21 – 40 y.o.
375k
0.75M
Interested in the pill
41 – 60 y.o.
300k
0.75M
Interested in the pill
61 – 80 y.o.
0%
0%
5%
20%
0k
Interested in the pill
0k
Interested in the pill
37.5k
Interested in the pill
150k
Interested in the pill
Market size is 1.0125M people (can approximate to 1M to make calculations simpler)
Hair Loss Pill
Revenue Estimation
Candidate can now estimate revenues for the first year.
1M
People interested in the pill
100k
400k
500k
High income
Middle income
Low income
100%
30%
0%
100k
120k
0k
Can afford pill
Can afford pill
Can afford pill
220k
Can afford pill
Ask candidate whether all 220k will
invest in the pill. Candidate should
realize that only early adopters and
innovators will buy the pill from year 1.
Assume they represent 20% of the
people interested in the pill.
Hair Loss Pill
Revenue Estimation
Candidate can now estimate revenues for the first year.
220k
Total number of people interested in pill
x
0.2
Share of early adopters
x
$7,500
Price / pill
=
$330 M
Question
Ask the candidate if this is a profitable idea or not. The candidate should quickly realize
that the figure doesn’t necessarily reflect the profitability of the pill for 2 main reasons:
•
R&D cost to develop the pill will be quite high and thus it will take a few years to
breakeven.
•
Certain assumptions might have been overestimated like the price per pill. It might
be not as high as 1.5-2x that of a transplant, especially if both have similar results.
The main advantage of the pill is the speed and ease of taking it but it doesn’t
necessarily justify charging a 50% - 100% premium.
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