Tuck at Dartmouth Consulting Case Interviews Cracking the case.

Tuck at Dartmouth

Consulting Case Interviews

Cracking the case

Tuck at Dartmouth

2004 Mini-Course

2nd Year Ace the Case

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• Situation

• Interview Framework

• Wrap-up

Agenda

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Situation

Great year for management consulting

Interviews are in

4 weeks

Preparation is critical

Try to get in 15-25 cases

What is a good day to begin mock

interviews?

Finally, time to get in the frame of mind

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Focus on the Interview

Review frameworks (this week)

Vault and Wet Feet – Free access

Harvard Case Book – On P Drive in

Consulting Folder

Get into Mindset

Framework around Interviewing

Stick to game plan

Attend Sessions and Network

2nd Years, Alum, Company Presentations

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What is a Case?

30 to 45 minutes

One-on-One

First Rounds – Usually 2nd or 3rd year

Consultant, your future manager

Second Rounds – Usually 4+ years, Partners

A problem or situation that they are looking for

your help on, your analysis

Usually projects that they once worked on

The goal is concrete diagnosis and pragmatic

solutions

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A problem, situation, or challenge is described to you and you are expected to:

Crack the Case - Identify the main issues by asking questions in an iterative process with the interviewer

By using your framework(s) to:

state and test hypotheses

structure the interaction

modify direction/framework when necessary

synthesize, propose solutions and recommend courses of action

What is a case interview

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What Firms Look For: Part IIOther Dimensions

Does the candidate:

• Possess strong interpersonal skills?

• Communicate effectively?

• Display energy/drive?

• Show initiative?

• Demonstrate flexibility?

• Possess a strong desire to succeed

• Perform well under pressure?

• Manage time effectively?

• Convey genuine interest in the career and the firm?

What Firms Look For: Part IProblem Solving Skills

Does the candidate:

Follow a structured thought process?

Demonstrate insight on the key business

issues?

Apply solid quantitative skills?

Display creativity?

Demonstrate decisiveness?

Evaluation Framework

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Analytical Thinking (AT)

Quantitative Thinking (QT)

Conceptual Thinking (CT)

Personal Impact (PI)

Evaluation Criteria for Case Interviews

The ability to use

casual

relationships in

deductive problem

solving

Developing an

issue tree to solve

a complex problem

Breaking a

complex problem

into the key

components in a

structured manner

Definition

Examples

The ability to think

analytically in a

quantitative context

Developing a

quantitative structure

Conducting numerical

analyses ( what would

you have to believe

same-store sales

growth to be for market

share to double in 5

years?)

The ability to see

patterns, infer

relationships, and build

conceptual frameworks

in inductive problem

solving

Forming hypotheses

from multiple data

points

Framing a problem in

an insightful way

Showing good

judgment / intuition

Insightful synthesis

(not just summarizing!)

Creative idea

generation

Professionalism

Presences in the

room; energetic

and interested in

the issues; not a

flat liner. . .

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• Summarize results, Push Implications

Summarize Findings


* “Decompose Problem” step may be unnecessary for “brain teaser” cases** Time estimation based on 30 minute interview

Major Interviewee Activity

Relative Amount of Information Sharing

Time** 5 minutes 15 minutes5 minutes 5 minutes

Interviewee

Interviewer

• Listen / Write / Ask Questions – Dig a little deeper

Listen / Clarify

Problem

• Apply framework to test solution

Test Hypothesis

Interview Framework

• Break problem into logical parts

Decompose Problem


• Propose solutions, Ideas

Hypothesize


Resume Review

• Solidify Structured Thought


Small Talk

• Establish Professionalism


Evaluating

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Interview – Small Talk

What to Focus On

Establish Professionalism

He/She is the client

Establish Rapport

Do you know someone at the firm?

Talk about how excited you are to interview

Say “It is a pleasure to meet you” with

massive sincerity

Get Down to Business / Don’t Prolong getting to

the Case

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Summarize Findings






Interviewee

Interviewer

• Listen / Write / Ask Questions

Listen / Clarify

Problem


Test Hypothesis

Interview Framework


Decompose Problem



Hypothesize


Resume Review



Small Talk



Evaluating

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Interview – Listen / Clarify Problem

Questions What is the business case for the US to have a

manned mission to Mars?

My client is a company that makes high tech vacuum

toilets for military ships. They are thinking of taking the

technology and going into new markets. What do you

think?

What new markets? I would think this would be an

expensive toilet with all of the technology.

A restaurant company is declining in profitability, what

is wrong and what can we do about it?

What kind of restaurants – multiple brands? Which

segments?

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Steam Boiler Hose ManufacturerStructuring Problems

McKinsey was asked by a diversified manufacturing client to help turn around the steam boiler

hose division.

Relevant facts include:

(1) Boiler hoses are sold both with original equipment and as replacements

(2) There has been increasing price pressure in the industry

(3) Last year, P&L showed the following (as % of sales)

–Raw Material 70%

–Labor 20%

–Overhead 10%

–SG&A 15%

–Profit (15%)

(4) Client is third of eight industry participants

(5) At least two of the other companies in the industry are making moderate profits

(6) The raw material is a commodity petrochemical

How would you structure an analysis aimed at restoring profitability? Where do you expect to

be able to save costs?

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Video Game ManufacturerStructuring Problems

The CEO of a large, diversified entertainment corporation has asked a Bain team to examine

the operations of a subsidiary of his corporation that manufacturers video games.

Specifically, he needs to know if he should approve a $200 million capital request for

significantly expanding the division’s capacity

You are a member of the McKinsey team assigned to this project. Assume you and I are at the

first team meeting. What are the critical issues we should plan to examine and why?

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Interview – Listen / Clarify Problem

What to Focus On Listen / Absorb

Any emphasis on words / out right hints

What kind of firm - LEK – always M&A angle

Start Your Engine

What are you going to focus on?

Any early hypotheses? Don’t jump to early

Only Ask Questions about the Case, relative to the

Question given

Usually good to ask questions about product and

customer segments (high proportion of cases are

about segmentation)

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Summarize Findings






Interviewee

Interviewer


Listen / Clarify

Problem


Test Hypothesis

Interview Framework


Decompose Problem



Hypothesize


Resume Review



Small Talk



Evaluating

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Decompose Problem

Definition

Mutually Exclusive, Collectively Exhaustive (MECE)

Structure, not Frameworks

Structuring a complex problem into the key issues

required to solve the problem; breaking a complex

question into smaller, manageable questions

An initial problem solving structure that has

component that are unique and cover the entire

solution landscape; single element solutions (i.e., fix

cost issue) may miss part of the solution set (i.e.,

revenue opportunities)

MECE structures are critical if the interviewer needs

a second or third issue to investigate.

Frameworks are general solution sets (Porter’s 5

forces, 3 C, etc ) for generic business issues.

Frameworks are useful when very little information is

known about the client issue.

Structure is designing a MECE solution set given specific client information . . .

Analytical Thinking

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What to Focus On

Spend 2-4 minutes writing and drawing – don’t stop

and ponder too much

Ok to scribble or be illegible

Define the whole structured universe

Always thinking – Mad Scientist

Highlight important areas

Dig deeper into some areas of the tree

Decompose Problem

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IllustrationFramework Possible Applications

Potential Entrants

Competition

Substitutes

Suppliers Buyers

Support Activity 1

Support Activity 2

InboundLogistics

OperationsOutboundLogistics

Sales andMarketing

Five Forces

Value Chain

Profit Tree

• Assess industry attractiveness for possible market entry

• Understand operations cost drivers

• Assess relative value-added of each step

• Determine where profitability problems lie

3C’s & 4P’s • Quickly define the market, competition and value proposition

• Company, Customers, Competitors

• Product, Price, Place, Promotion

Profitability

Revenues

Costs

Volume

Price

Fixed

Variable

INTRO GROWTH

TIME

DECLINEMATURITY

Product Life Cycle• Understand stage of competition and

critical issues for products

Review of the key frameworks

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Profit tree

Profit

Segment Customers

Value vs. Premium

Competition

Differentiation / Features

Product Improvement

Distribution

Promotions

Industry Life Cycle

Product Development

Repositioning / Geog. Expansion

Renegotiate , Lower Transfer Price

Reduce Waste

Not Wages – Productivity

Outsource

Importance to Customer

Capacity Utilization

Benchmarking

Benchmarking

Increase MS

Market Growth

New Markets

Elasticity

PositioningPrice

Quantity

Variable

Fixed

Revenue(P x Q)

CostVC x Q + FC

Materials

Labor

Service

Machinery

Overhead

Distribution

Profitability, Competitive Situation,

Capital Projects, Acquisitions

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Profit tree

Profit

Revenue(P x Q)

CostVC x Q + FC

Price

Quantity

Variable

Fixed

Elasticity

Positioning

Increase MS

Market Growth

New Markets

Materials

Labor

Service

Machinery

Overhead

Distribution

Segment Customers

Value vs. Premium

Product Improvement

Industry Life Cycle

Product Development





Benchmarking

Benchmarking

Competition


Distribution

Promotions


Reduce Waste

Outsource

Profit

Revenue(P x Q)

CostVC x Q + FC

Price

Quantity

Variable

Fixed

Elasticity

Positioning

Increase MS

Market Growth

New Markets

Materials

Labor

Service

Machinery

Overhead

Distribution

Segment Customers

Value vs. Premium

Product Improvement

Industry Life CycleProduct Development





Benchmarking

Benchmarking

Competition


DistributionPromotions


Reduce Waste

Outsource

Investments

Profit

Revenue(P x Q)

CostVC x Q + FC

Price

Quantity

Variable

Fixed

Elasticity

Positioning

Increase MS

Market Growth

New Markets

Materials

Labor

Service

Machinery

Overhead

Distribution

Segment Customers

Value vs. Premium

Product Improvement

Industry Life CycleProduct Development





Benchmarking

Benchmarking

Competition


DistributionPromotions


Reduce Waste

Outsource

Product A

Product B

Company XYZ

Segmentation

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Market entry

Market Entry

Market Attractiveness

Acquirer /Entrants’ ability

To extract value

Synergies withExisting company

Increases switchingbarriers

Marketing

Sales Channel

Operations

Product

Customers

Comp. Landscape Consolidated or fragmented?

Pricing

Growth

Profitability

Competitive Nature

Products

Stable vs. eroding pricing

Growing or shrinking

Drivers of profitability

Cooperative or competitive

Differentiated or commodity

Same set of customers

Same sales channel

Similar manufacturing, dist, etc

Complementary product

Cross selling

Strength ofMarket

Ease ofMarket Entry

Cost of Entry High barriers to entry / exit?

Market Entry Structure

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Summarize Findings






Interviewee

Interviewer


Listen / Clarify

Problem


Test Hypothesis

Interview Framework


Decompose Problem



Hypothesize


Resume Review



Small Talk



Evaluating

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What to Focus On Take a few minutes to take interviewer through structure

Turn the page and start talking and pointing Start at the beginning of the tree restating the question

State hypotheses Whether right or wrong, you will get reactions from the interviewer which will further drive your analysis

Emphasize Case facts Potential areas of further exploration Bring in any knowledge you have on the industry

Take notes (New pages) Circle areas to explore Write down new case facts

Hypothesize

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Summarize Findings






Interviewee

Interviewer


Listen / Clarify

Problem


Test Hypothesis

Interview Framework


Decompose Problem



Hypothesize


Resume Review



Small Talk



Evaluating

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What to Focus On

Once your done with the structure repeat what the interviewer wants you to focus on – prioritize future analysis

Time to find the needle or needles in the haystack!!! Rich discussion building up on where to focus and new case facts Keep on writing everything down!!! Introduce new frameworks and hypotheses Always thinking, Always Implications

Usually the time where you get the Quantitative Tests If you are not comfortable doing public math, just do a lot on paper If you know the approximate answer say it is around 420 and then do the math Any mock interviews through some public math in

Test Hypothesize

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Definition

Math Skills

Sample Calculations


Simple math skills (e.g., addition , subtraction,

multiplication, division) are required

Manipulate fractions and percentages

Estimations

- - Breakeven calculation for a new product

- - Maximum capacity calculation for a manufacturing

facility

- - Market size after 2 years of steady 10% growth

- - Profitability of adding one additional customer

- - Other

Ability to move efficiently and effectively through mathematical

problems to get to the key analyses

Ability to show facility with handling calculations with ease in a

interview (public math)

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Summarize Findings






Interviewee

Interviewer


Listen / Clarify

Problem


Test Hypothesis

Interview Framework


Decompose Problem



Hypothesize


Resume Review



Small Talk



Evaluating

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Summarize

Definition

Hypotheses,

Insights

Synthesis

Conceptual Thinking (CT) Ability to take several pieces of information and draw an

inference or a synthesis from that information

Ability to think outside of the box and come up with insightful

ideas and interesting hypotheses

“From the information provided, this company may want to

dedicate more resources to its new products rather than

continuing to sink funds into outdated ones.”

“In addition to the ideas we have already covered, the CEO may

want to consider alternative uses for this sudden uptick in

profitability. I think some important areas for growth could

be…”“In summary, this company is heading for some difficult times

due to the changing market dynamics and customer

preferences. They need to make some radical changes to stay

relevant. Some changes they could make are . . . “

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What to Focus On

Manage Clock (watch in front of you) If 5 minutes left, stop, acknowledge not much time left and desire to synthesize Structure your synthesis

Hypotheses you made Analysis and frameworks you used Refined Hypotheses Any Conclusions

Then PUSH IMPLICATIONS Right timing Feasible recommendations Other considerations

Summarize

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Summarize Findings






Interviewee

Interviewer


Listen / Clarify

Problem


Test Hypothesis

Interview Framework


Decompose Problem



Hypothesize


Resume Review



Small Talk



Evaluating

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Resume Review

Situation. Our client was an industry laggard and an aggressive/activist investor purchased a large stake

Task. Our firm was hired to complete an EVA analysis. My role was…

Analysis/Actions. I completed all the EVA analysis for 20 plants and conducted a customer satisfaction survey. During the course of my analysis I found…

Recommendations. Based on those findings, I made the following recommendations…

Results. Sales increased by xx%, profits doubled, the stock price tripled…

STARR

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What Firms Look For: Part IIOther Dimensions

Does the candidate:

• Possess strong interpersonal skills?

• Communicate effectively?

• Display energy/drive?

• Show initiative?

• Demonstrate flexibility?

• Possess a strong desire to succeed

• Perform well under pressure?

• Manage time effectively?

• Convey genuine interest in the career and the firm?

What Firms Look For: Part IProblem Solving Skills

Does the candidate:

Follow a structured thought process?

Demonstrate insight on the key business

issues?

Apply solid quantitative skills?

Display creativity?

Demonstrate decisiveness?

Evaluation Framework

Tuck at Dartmouth





Evaluation Criteria for Case Interviews

The ability to use

casual

relationships in

deductive problem

solving

Developing an

issue tree to solve

a complex problem

Breaking a

complex problem

into the key

components in a

structured manner

Definition

Examples

The ability to think

analytically in a

quantitative context

Developing a

quantitative structure

Conducting numerical

analyses ( what would

you have to believe

same-store sales

growth to be for market

share to double in 5

years?)

The ability to see

patterns, infer

relationships, and build

conceptual frameworks

in inductive problem

solving

Forming hypotheses

from multiple data

points

Framing a problem in

an insightful way

Showing good

judgment / intuition

Insightful synthesis

(not just summarizing!)

Creative idea

generation

Professionalism

Presences in the

room; energetic

and interested in

the issues; not a

flat liner. . .

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1) Quantitative ability

2) Conceptual thinking

3) Analytical ability

Three specific measures of a case interview

Bar

AnalyticalConceptualQuant

Standard level of performance and a “spike” will move you on to the next

round or get you the offer

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1. Layout a road map for your interviewer

2. Ask clarifying questions if necessary

3. Listen carefully

4. Justify all assumptions you make

5. Maintain eye contact

Top Interview Tips

6.Take your time

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7. Take notes

8. Think out loud - (transparent process)

9. Think in a clear, logical manner

10. Make your conclusion more than a summary

11. Be MECE (mutually exclusive and collectively exhaustive in your analysis)

Top Interview Tips (cont)

12. Have fun!!!

12. Save the firm specific cases for a day or two before the interview

Tuck at Dartmouth Consulting Case Interviews Cracking the case.

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Transcript of Tuck at Dartmouth Consulting Case Interviews Cracking the case.