Case Interview Workshop

Dartmouth College

July 2015

Introductions

Name

Alex de Chatellus Joe Rusckowski Bobby Riehle Maya Schechter

Firm

Bain & Company Bain & Company Treacy & Company Treacy & Company

Email

[email protected]

Joe. [email protected]

[email protected]

[email protected]

2

Agenda

•

What is consulting?

•

What is a case interview?

•

What consulting firms are looking for during a case interview

•

What can I expect during the case?

(Practice Case)

3

Consulting is helping companies make decisions and take actions

1

IDENTIFY KEY ISSUES

2

COLLECT/ ANALYZE FACTS

IDENTIFY KEY ISSUES COLLECT/ ANALYZE FACTS 3

ORGANIZE DECISION FRAMEWORK

4

MAKE DECISION/ TAKE ACTION

ORGANIZE DECISION FRAMEWORK MAKE DECISION/ TAKE ACTION

4

Agenda

•

What is management consulting?

•

What is a case interview?

•

What consulting firms are looking for during a case interview

•

What can I expect during the case?

(Practice Case)

5

What is a case interview?

A CASE INTERVIEW IS…

• Evaluation of your ability to think about and structure a

solution to a business problem

• Example of a real business problem typical of

consulting cases

• More than just the “case;”

opportunity to get to know you

• Fun and thought

provoking A CASE INTERVIEW IS NOT…

• Test to see if you get the “right” answer • A test of business terms, expressions or current events • Brainteasers or theoretical problems • Only a test of your analytic ability • Stressful

* (we all know it’s somewhat stressful)

6

Cases are often based on real issues our clients face

CORPORATE STRATEGY

 What business should we be in?

 Which customers will we serve?

 What geographies should be expand into?

BUSINESS UNIT STRATEGY

 How does our product gain market share?

 How can we make more money?

 How should we run this unit?

M&A OR INVESTMENT STRATEGY

 What should we buy/sell?

 At what price?

 Is a company worth investing in? 7

Cases involve qualitative and quantitative questions to be resolved

Performance related: QUALITATIVE

 Why could profits be down after two years of growth?

 Why could one store be doing better than the others?

QUANTITATIVE

 How much more can we make by taking an action?

 How much better should the bad stores be?

Market related:

 What marketing could work in order to enter a market?

 What do we have to think about when making an acquisition?

 How big is the market?

 How much will we grow if we make an acquisition?

8

Case interviews follow four key phases

Overall situation Establish a framework and get specific

Caution: We are looking for structured approach, not a canned framework from a case prep book

Run the numbers Make a recommendation 9 9

Agenda

•

What is management consulting?

•

What is a case interview?

•

What consulting firms are looking for during a case interview

•

What can I expect during the case?

(Practice Case)

10

Interviews are opportunities to learn more about each other

OPPORTUNITY FOR US TO LEARN ABOUT YOU

• What are your career goals?

• What are your passions?

• What are your current skills, strengths and talents?

OPPORTUNITY FOR YOU TO LEARN ABOUT US

• What kind of work do we do?

• What are our people like?

• What does an analyst do in a typical day?

• What are areas where you would like to grow and develop?

• What will I learn in consulting?

• Why do we love our jobs?

11

What do consulting firms look for in a case interview?

• •

STRUCTURED APPROACH

Understand the question being asked Develop an approach to answering the question • Always draw a final conclusion relating discussion to initial problem

STRONG ANALYSIS

• Synthesize and filter data provided by interviewer • Display comfort with numbers and ability to make reasonable assumptions

REASONING AND LOGIC

• Identify and prioritize key issues as they arise • “Sanity check” – Does the answer make sense?

PROFESSIONALISM AND ENGAGEMENT

• Show enthusiasm and interest in the question • Exhibit general understanding of the firm and consulting • Demonstrate ability to use original thinking and logic to solve problems • Convey a mature and confident demeanor 12

The inside scoop: what interviewers are looking for

“I look for a high degree of structure, confidence and engagement.” “An ability to identify the relevant data, make reasonable

assumptions

and work with the numbers.” “Enthusiasm and intellectual curiosity for solving the problem – we answer similar questions every day at work.” “I am looking for individuals that will thrive within the culture and succeed at doing the job .”

13

What can you do to prepare?

• Get started early • Review potential frameworks • Practice with a diverse set of people • Challenge yourself with different types of cases • Keep an eye on the time; 20 minutes goes quickly • Practice introductions, experience interviews and questions • Understand why the firm is a good fit for you and your career 14

Case interview advice: before the interview

START PRACTICING EARLY!

• Practice a diverse set of cases – great resources exist!

• Practice with diverse set of people to gain exposure to different styles

GET COMFORTABLE WITH NUMBERS LEARN BUSINESS CONCEPTS AND FRAMEWORKS THINK ABOUT HOW TO PRESENT YOU

• Practice doing quick math in your head • Be comfortable making simple assumptions • Understand common frameworks and terms - Profits = rev – costs

NOT

- Modigliani-Miller theorem • Focus on tackling challenges faced by businesses (e.g. declining profitability, improving performance) • What experiences do you want to highlight?

• Why consulting and why the specific firm?

BUT DON’T

• Don’t over-prepare to the point of sounding rehearsed • Don’t sneak in a calculator • Don’t try going without pen and paper • Don’t spend time learning nuances of any particular industries • Don’t feel like there is a “right” answer. Be yourself!

15

Case interview advice: during the interview

• Reiterate the key question(s) to ensure understanding • Do not force-fit a framework • Focus on the high-value components; do not be exhaustive • Over communicate and explain your thinking • Read your interviewer (an ally) and adjust accordingly • Drive to an answer • Explain the “so what,” not just the facts that support your answer • Provide a succinct one or two minute summary with a pragmatic

“Monday morning” plan

• Relax, be yourself, and enjoy the case discussion 16

Agenda

•

What is management consulting?

•

What is a case interview?

•

What consulting firms are looking for during a case interview

•

What can I expect during the case?

(Practice Case)

17

Practice Case: School Furniture

Overview

Steps we’ll work through in answering this case 1 Understand the Case 2 Develop and Execute a Logical Approach 3 Think Through Strategic Implications 4 Synthesize and Present Findings

CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 18

Practice Case: School Furniture

Understand the Case At the beginning of the case, the interviewer will share a short background on the client and the objectives of the case:

Situation Treacy & Company has been engaged by a $2B North American manufacturer and distributor of office furniture. The Client sells desks, chairs, cubicles, etc. to offices nationwide. Historically, the Client has experienced consistent top-line revenue growth. However, in 2012 the Client saw its positive year-over-year revenue growth flatten for the first time, and in 2014 saw negative revenue growth (~$250M decline).

The Client is looking to T&Co to recommend near-term growth opportunities. The CEO of the firm is especially interested in the school furniture market, and would like our help evaluating this opportunity. Her assumption is that, given her firm’s ability to successfully manufacture and distribute office furniture, it can do similarly well in the school furniture market.

Objective Please evaluate the attractiveness of the school furniture market for the Client and share the strategic implications of your findings.

CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 19

Practice Case: School Furniture

Understand the Case

• • To understand the case:

Think through the situation Clarify the objective

Tips • Take notes • Define the objective in actionable terms • Present an initial framework to interviewer • Ask for guidance from interviewer

Good Better Best

“I’m evaluating the attractiveness of this market and determining whether it’s a smart move for this Client” “I’m evaluating the attractiveness of this market and determining whether it’s a good fit for this Client, which I’ll do by sizing the opportunity and thinking through what the Client

would need to do to win there

” “I’m evaluating the attractiveness of this market and determining whether it’s a good fit for this Client, which I’ll do by sizing the opportunity and thinking through what the Client would need to do to win there

and long term implications for the Client’s current business model

” CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 20

Practice Case: School Furniture

Develop and Execute a Logical Approach

To develop and execute a logical approach: •

Define the question

• Outline and communicate a methodology • Develop and communicate assumptions • Perform and communicate calculations • Verify results Tips • Make sure you understand all parts of the question before beginning analysis • If possible, offer a hypothesis along with a question

Good Better Best

“How should I define attractiveness? Is there a particular part of the school market I should focus on?” “

Usually it makes sense to define attractiveness by profitability, and to define the school market as K-12.

Do you agree that that’s how I should define attractiveness and the market we’re looking at?” “

Because the Client is focused on revenue growth, I think it makes sense to define attractiveness by overall market revenues, and to define our market as all school furniture in K-12 schools, as those schools may have more similar buying patterns to offices relative to higher education.

Do you agree that that’s how I should define attractiveness and the market we’re looking at?” CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 21

Practice Case: School Furniture

Develop and Execute a Logical Approach

To develop and execute a logical approach: • • Define the question

Outline and communicate a methodology

• Develop and communicate assumptions • Perform and communicate calculations • Verify results Tips • Talk the interviewer through your thinking • Outline all the pieces of information you’ll need

Good Better Best

“I’ll estimate the K-12 market for desk and chairs” “I’ll estimate the K-12 market for desk and chairs

by determining the size of the student population and estimating the cost of the average desk and chair

” “I’ll estimate the K-12 market for desk and chairs using an approach in which I’ll

incorporate the size of the student population, the cost of the average desk and chair, a replacement rate for this furniture, and a market penetration rate for our Client”

CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 22

Practice Case: School Furniture

Develop and Execute a Logical Approach

To develop and execute a logical approach: • Define the question • Outline and communicate a methodology • •

Develop and communicate assumptions Perform and communicate calculations

• Verify results Tips • Build up your assumptions from basic pieces of data • Talk the interviewer through your thinking and ask for feedback on your assumptions • Go slowly enough that you don’t make mental math errors

Good

“I assume there are 50M school-aged children in the US”

Better Best

“I am assuming

there are 300M people in the US, 25% of which are school-aged

, meaning there are 75M school-aged children” “I am assuming there are 300M people in the US,

that the average lifespan is 75 years, and that the population is distributed equally across all years. There are therefore 4M people in each age “bucket,” and since K -12 spans 13 years, I assume there are 52M school aged children. Would you like me to continue or use a different assumption?”

CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 23

Practice Case: School Furniture

Develop and Execute a Logical Approach

To develop and execute a logical approach: • Define the question • Outline and communicate a methodology • •

Develop and communicate assumptions Perform and communicate calculations

• Verify results The assumptions we’ll use: • 300M Americans w/ average lifespan of 75 years • Equal age distribution across population • K-12 schooling spans 13 years • Each student needs one desk and one chair • Desks cost $100 each and chairs cost $50 each • Both desks and chairs need to be replaced every 10 years • Our Client can win 20% market share CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 24

Practice Case: School Furniture

Develop and Execute a Logical Approach

To develop and execute a logical approach: • • Define the question • Outline and communicate a methodology • Develop and communicate assumptions • Perform and communicate calculations

Verify results

Tips • Double-check calculations • Gut check to see if final number makes sense • Consider other factors that may affect result

Good Better Best

“The market size for our Client is $156M” “

I verified my assumptions with you and double-checked my calculations, and am confident that the market opportunity for our Client is $156M”

“I am confident that the opportunity is $156M based on my assumptions and calculations,

but recognize that regulation, market trends, or competitors may be factors in sizing our opportunity; would you like me to incorporate these factors or any other information?

” CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 25

Practice Case: School Furniture

Think Through Strategic Implications

• • • To think through strategic implications:

Develop a framework Logically complete framework Drive to a recommendation

Tips • Make sure the framework is relevant to the specific question • Talk through framework with interviewer • Ask for guidance from interviewer CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 26

Practice Case: School Furniture

Think Through Strategic Implications

Example: What our the implications of the size of the school furniture opportunity for our Client? Will entering the school furniture market as we’ve sized meet the Client’s growth goals? Yes No What other factors should we consider to assess strategic fit for the Client?

Competition

How competitive is this market? What differentiates our Client from the competition?

Capabilities

What capabilities does our Client have that can be used to enter this market? What will they need to add?

Customers

What are these customers looking for? Is there a particular segment our Client should focus on? CRACK THE CASE | TREACY & COMPANY | July 17, 2015 How else can our Client meet their growth goals?

Portfolio Analysis

What are opportunities exist? Which are most attractive for our Client? CONFIDENTIAL | COPYRIGHT 2015 | 27

Practice Case: School Furniture

Think Through Strategic Implications

Example: What our the implications of the size of the school furniture opportunity for our Client?

Portfolio Analysis

What are opportunities exist? Which are most attractive for our Client? • • • Brainstorm Opportunities • • Determine Attractiveness Metrics Populate framework with opportunities Select most attractive opportunities for Client and make recommendation CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 28

Practice Case: School Furniture

Think Through Strategic Implications

Example: What our the implications of the size of the school furniture opportunity for our Client?

Portfolio Analysis

What are opportunities exist? Which are most attractive for our Client?

High Medium Attractiveness High Attractiveness

Hotel Furniture

Feasibility

Custom Furniture

Low Attractiveness

Outdoor Furniture Office Supplies

Low Low

CRACK THE CASE | TREACY & COMPANY | July 17, 2015

Revenue Potential

Storage Systems

Medium Attractiveness

After-Market Parts

High

CONFIDENTIAL | COPYRIGHT 2015 | 29

Practice Case: School Furniture

Synthesize and Present Findings

• • To synthesize and present findings:

Roll up your analyses into a few key findings (clearly articulate the “So What”) Summarize your process of arriving at your conclusions

Tips • Keep in mind your audience and their fundamental question (e.g. in this case, you are making a recommendation to the CEO, who is wondering, “Should we enter the school furniture market ?”) • Make a recommendation for action backed by a concise, logical summary of your analyses CRACK THE CASE | TREACY & COMPANY | July 17, 2015 CONFIDENTIAL | COPYRIGHT 2015 | 30