WHARTON
CONSULTING CLUB
CASEBOOK
December 2008, © Wharton
Consulting Club
2
Content
s
Sectio
n
Page
#
□ Introduction &
Acknowledgements
3 □ Consulting Industry
Guide
6 □ Industry
Overview
□ Firm Overview (11
Firms)
□ Interview
Preparation 19
□ Interview Overview – Fit +
Case
□ Sample
frameworks
□ Other
References
□
Practice
Cases 41
□ 18 Practice
cases
□ Links to other
cases 123
□ Cases from firm
websites
□ Suggested cases from other
casebooks
3
Note to the
reader
Dear Consulting Club member, The 2008-09 leadership of
the Wharton Consulting Club has put in significant effort
into overhauling the Wharton Casebook! This casebook is
meant to provide you with a brief overview of consulting
recruiting and interview preparation as well as a number
of practice cases. Please note that this is meant to
supplement the excellent work done by our and other
schools in earlier casebooks, so we strongly encourage
you to not make this your sole reference. We have
indicated which other casebooks we found particularly
useful at different points in this casebook. Lastly, please
note that this is just our first version of the casebook and
there are changes we plan on making, and hope to issue
an updated version of the casebook after the winter break
(with more tips and cases). Till then, have fun reading this
and good luck as prepare to „Crack the consulting
interviews‟! - 2008 Wharton Consulting Casebook
Editorial Team
4 We are really grateful
to...
Ishan Chatterjee Brian Chu Charlene Chu
Zarja Cibej Diego Jimenez Rajesh Krishnan
Hemanth Sampath Michael Sion Fouzan Ali
Aryea Aranoff Parisa Habibi Anu Hariharan
Nihar Malik Bernice Ma Suma Reddy ... &
many others!!! For
their contributions
to this casebook!
5THE BIG PICTURE: CONSULTING
RECRUITING INVOLVES LOTS OF
LITTLE THINGS... NO SINGLE SILVER
BULLET
Apply Your objective What resources you will
need to use
Gather Info, Network &
Decide
• Is consulting what you want to
do?
• Which firm do you want to
join?
• Why do you want to join a certain
firm?
• Connect the dots (pre-MBA to MBA to
consulting)
• Get invited to interview (prepare good resume and cover
letter)
• MBACM industry
chats
• Firm websites / Vault /
WetFeet
• Coffee
chats
•
EISes
• Second Years / First Years from
firms
• Speakers on
campus
Interview:
Cases
• MBACM resume
review
•
Resumania
• Second Years (at least 2
reviews)
• Demonstrate „fit‟ - Leadership - Team-player - Well-rounded
personality Interview: Fit
• Prep „Fit‟ questions
thoroughly
• MBACM mock interviews
• Interviews with Second
Years
• Read WSJ, Economist...
something
• Ace Cases • Case books & Industry Primer
Series!
• Core
courses
• Practice extensively with First
Years
• MBACM mock interviews
• Interviews with Second
Years
• Reach out to consulting firm
buddies
6
Content
s
Sectio
n
Page
#
□ Introduction &
Acknowledgements
3 □ Consulting Industry
Guide
6 □ Industry
Overview
□ Firm Overview (11
Firms)
□ Interview
Preparation 19
□ Interview Overview – Fit +
Case
□ Sample
frameworks
□ Other
References
□
Practice
Cases 41
□ 18 Practice
cases
□ Links to other
cases 123
□ Cases from firm
websites
□ Suggested cases from other
casebooks
7 Industry overview –
Management Consulting
Management consulting involves solving complex
business problems and offering recommendations to
companies Overview of management consulting
• Problem-solve complex and unstructured business
problems
• Work closely with senior management on the
client side
• Intellectually stimulating work and ability to build a
strong set of skills
• Constant travel (depending on office location and
consulting firm) can pose significant challenges
• Industry (prior to economic downturn) was expected to
grow at
8.8% in
2009
• Most firms have a global presence and offer
international project opportunities Interview Process
• Case interview – involves solving a business case;
candidate expected to drive towards a solution and ask
for relevant data; focus on structure;
• Fit interview – numerous behavioral questions
focusing on
prior
experiences Typical Career Path
•
Consultant/Associat
e
• Senior
Consultant/Associate
• Manager/Project
Leader
• Associate
Partner
•
Partner
8 Industry overview –
Accenture
Accenture is a leading global management consulting firm
which is known for offering comprehensive solutions,
including technology services, to its clients. Accenture
Overview
• 2000
consultants
• Global brand recognition due to solutions
outside management consulting
• 3 broad services areas (management consulting,
systems integration consulting and technology
consulting)
• Regional staffing
model
• Comprehensive solutions, beyond strategy, offered
to clients Interview Format
• 2 rounds of
interviews
• Round 1: 2 45-minute
interviews
• Round 2: 3 45-minute
interviews Career
progression
•
Consultant
•
Manager
•
Partner
9 Industry overview – AT
Kearney
AT Kearney is a leading global management
consulting firm which is known for the implementation
focus of its projects/results. AT Kearney Overview
• 1700
consultants
• 51 offices
worldwide
• 34
countries
•12 industry
groups
• 7 broad services
areas
• Global staffing
model
• Partners actively involved in
cases
• Recently went private when company was bought
back from EDS Interview Format
• 2 rounds of
interviews
• Round 1: 2 45-minute
interviews
• Round 2: Regular case + fit interviews Case
presentation (60 minute prep, 20 minute presentation &
10 minutes for Q&A) Career progression
•
Associate
•
Manager
•
Principal
• Partner (Vice-
President)
10 Industry overview – Bain &
Co.
Bain is a global management consulting firm. It is
considered one of the top firms in this industry and is
known for its focus on delivering results and office-centric
work model. Bain Overview
• 3100
consultants
• 39 offices
worldwide
• 26
countries
• Office-specific staffing
model
• 14 industry
groups
• 11 functional practice
areas
• Office-centric work
model
• Culture considered to be
collegial Interview Format
• 2 rounds of
interviews
• Round 1: 2 45-minute
interviews
• Round 2: 3 45-minute interviews (2 case +
1 fit)
• Office-specific
interviews
• “Answer-first”
approach
• Career Focus on
progression creativity and
structure
•
Consultant
• Case Team
Leader
•
Manager
•
Partner
11 Industry overview – Booz &
Co.
Booz is a global management consulting firm. It is
considered one of the top firms in this industry and was
recently bought out from Booz Allen Hamilton, which is
govt. focused. Booz Overview
• 3300
consultants
• 57 offices
worldwide
• 30
countries
• Regional staffing
model
• 16 industry
groups
• 8 functional practice
areas Interview Format
• 2 rounds of
interviews
• Rounds 1 & 2: 2 45-minute
interviews Career progression
•
Consultant
•
Manager
•
Partner
12 Industry overview –
Boston Consulting Group
BCG is a global management consulting firm. It is
considered one of the top firms in this industry and is
known for its intellectual approach and diverse
workforce. BCG Overview
• 4500
consultants
• 66 offices
worldwide
• 40
countries
• Regional staffing
model
• 15 industry
groups
• 14 functional practice
areas
• People considered to be
friendly Typical Interview
Format
• 2 rounds of
interviews
• Round 1: 2 45-minute interviews
(cases)
• Round 2: 3 45-minute interviews
(cases)
• General 1st round and office-specific 2nd round
interviews Career progression
•
Consultant
• Project
Leader
•
Principal
•
Partner
13 Industry overview –
Deloitte
Deloitte is a leading global management consulting firm
which is known for offering comprehensive solutions,
including technology and tax services, to its clients.
Deloitte Overview
• Global brand recognition due to solutions
outside management consulting
•18 industry
groups
• 5 broad services areas (enterprise, human capital,
outsourcing, strategy & operations and technology
integration)
• 7 functional areas within strategy &
operations
• Regional staffing
model
• Comprehensive solutions, beyond strategy and
operations, offered to clients Interview Format
• 2 rounds of
interviews
• Round 1: 2 30-minute
interviews
• Round 2: 1 60-minute interview
with 2 partners Career progression
• Senior
Consultant
•
Manager
• Senior
Manager
•
Partner
14 Industry overview –
L.E.K Consulting
L.E.K is a global management consulting firm. It is
considered one of the top small firms in this industry and
is known for its analytical rigor. L.E.K Overview
• 900
consultants
• 20 offices
worldwide
• Strong presence outside
US
• 19 industry
groups
• 6 functional practice
areas
• Known for its analytical
rigor
• Cases usually shorter (6 to 8
weeks)
• Provides immediate managerial responsibilities to
its MBA hires
• Partners actively involved in
cases Interview Format
• 2 rounds of
interviews
• Round 1: 2 30-minute interviews (little fit, some cases
were brainstorming type questions)
• Round 2: 3 30-minute
interviews
• Potential case on NPV
analysis Career
progression
• Associate
Consultant
•
Consultant
•
Manager
•
Partner
15 Industry overview – McKinsey
& Co.
McKinsey & Co. is a global management consulting firm.
It is considered one of the top firms in this industry and is
known for developing leaders and strong culture.
McKinsey Overview
• 8500
consultants
• 92 offices
worldwide
• 52
countries
• National/global staffing
model
• 18 industry
groups
• 7 functional practice
areas Interview Format
•2 or 3 rounds of
interviews
• Command and Control case
interviews
• Office-specific interviews in all rounds (though
Northeast offices piloted common initiative)
• Fit interviews focus on structure, specific
actions and headlines for stories Career
progression
•
Associate
• Engagement
Manager
• Associate
Principal
•
Partner
•
Director
16 Industry overview – Monitor
Group
Monitor is a leading global management consulting firm
which is known for its thought leadership and focus on
knowledge transfer to its clients. Monitor Overview
• 1500
consultants
• 30 offices
worldwide
• 18
countries
• 15 industry
groups
• 3 broad services areas (advisory, capital-building &
capital)
• Global staffing
model
• Founded in 1983 by the likes of Michael
Porter Interview Format
• 2 rounds of
interviews
• Round 1: 2 interviews (case +
fit)
• Round 2: Group business case exercise Role play
interview Feedback interview Career progression
• Case Team
Member
• Module
Leader
• Case Team
Leader
• Global Account
Manager
17 Industry overview – Oliver
Wyman
Oliver Wyman is a global management consulting firm. It
is considered one of the top firms in this industry with a
significant presence outside the US. Oliver Wyman
Overview
• 2900
consultants
• 40 offices
worldwide
• 16
countries
• 9 industry
groups
• 7 functional practice
areas
• Global staffing
model
• Formed from a combination of Mercer Oliver
Wyman & Mercer Consulting Interview Format
• 2 or 3 rounds of
interviews
• Round 1: 2 30-60 minute with case
and fit
• Round 2: 1 Fit interview with two case + fit
interviews Career progression
• Junior
Consultant
• Senior
Consultant
• Junior
Manager
• Senior
Manager
•
Partner
18 Industry overview –
Parthenon Group
Parthenon is a management consulting firm that is well
known for its work in private equity, education and non-
profit consulting. It is one of the top small consulting
firm. Parthenon Overview
• 200
consultants
• 4 offices
worldwide
• 4 broad practice
areas
• 6 functional practice
areas
• Equity as fees in some
cases
• Known for its analytical
rigor
• Entrepreneurial
culture Interview
Format
•2 rounds of
interviews
•1st round: Typically 1 case with Associate and 1
fit with partner
•2nd Round : A pure fit, pure case and one interview
where you read a case and work with a manager to define
work- streams with detailed work-items Career
progression
•
Principal
• Partner (Multiple stages from principal to partner
take about 5 to 7 years)
19
Content
s
Sectio
n
Page
#
□ Introduction &
Acknowledgements
3 □ Consulting Industry
Guide
6 □ Industry
Overview
□ Firm Overview (11
Firms)
□ Interview
Preparation 19
□ Interview Overview – Fit +
Case
□ Sample
frameworks
□ Other
References
□
Practice
Cases 41
□ 17 Practice
cases
□ Links to other
cases 119
□ Cases from firm
websites
□ Suggested cases from other
casebooks
20
Contents:
Interview
Preparation
□ A typical consulting
interview
□ General
Tips
□ Fit interview preparation with sample
questions
□ Case interview
preparation
□ What is a case? Case Types and interview
methods
□ Problem solving – what is
it?
□ Overall flow of a
case
□ Tips to stand
out
□
Sample
Frameworks
□ Tips for giving
cases
□ Other resources (must
read)
21 A typical
consulting
interview
Meet & Greet The Fit The Case
Wrap-up Process
• Wait in hospitality suite with other candidates /
recruiters
• Interviewer asks for you by
name
• Handshake /
greeting
• Walk to interview suite / small
talk You should
• Interviewer may give personal
background
• Questions about resume /
experience
• Your chance to ask
questions
• Walk back to hospitality suite with
interviewer
• Appear warm, confident,
professional
• Interviewer will start
case
• Keep track of time so that you by when you are expected to reach a
conclusion
•
Convince
• Maintain
confident,
• Not ask stock
questions interviewer that you
controlled, upbeat are fit for the
firm
demean
or
• A good chance to get to learn about
the
• Pass the
“airport
interviewer‟s
personal test”
experiences at the
firm
22 General
Tips
□ Make a great first
impression
□ Professional
appearance
□
Preparatio
□ Have needed
supplies
□ Plenty of
pens/pencils
□ Graph/plain
paper
□ Serviceable
portfolio
□ Project confidence from start to
finish
□ Relax (hard to appear confident if
not)
□ Be yourself (extremely hard to be confident if
not)
23
What is
“fit”?
□ Opportunity to project “consultant” during the
interview
□ Inquisitive, logical, confident, friendly, driven,
happy
□ When you describe
yourself:
□ Focus on a set of skills that the company
wants
∎
Communicatio
n
∎
Leadership/Manageme
nt
∎ Work under pressure / ability to deal with conflict and
ambiguity
□ When you describe your
fit:
□ Don‟t repeat slogans; most firms do the same
things
□ Focus on what the firms consider to be their unique factors
(e.g. McKinsey‟s international reach, BCG‟s thought
leadership, Bain‟s office culture etc.)
□
For in-depth probing on leadership questions
(typical of McKinsey)
□ Prepare a 5-10 word „newspaper headline‟ that
encapsulates the story
□ Prepare beforehand a 1-2 minute description that quickly
lays out the context, the actors and the complication
□ Focus on your actions and thought process and the impact
of your actions that led to the solution / eventual success
24 Tips on the Fit
Interview
□ Almost every single interview involves at
least some fit- interview type questions
□ Applicants have been turned down from
the top consulting firms for not having
cleared the fit portions of interviews
□ Very basic steps go a long
way
□
Smil
e
□ Maintain eye
contact
□ Be honest and
heartfelt
□ Have a succinct
story
□ Practice can make
perfect
□
InterviewStrea
□ Mock fit
interviews
25 Tips on the Fit
Interview (cont.)
□
□ Establish common ground (geography, family,
interests, sports, etc.)
□ Ask the interviewer friendly
questions
□ Be confident in your
answers
□ Talk about something other than your
qualifications (you‟re interesting, so talk about
it)
□
Don‟
□ Discuss something
controversial
□ Complain about
anything
□ Make up elaborate questions you know the
answer to
□ Repeat company slogans, mottos, tag-
lines, etc.
□ Focus only on your business qualifications and
experience
26
Sample fit
questions
□ Take me through your
resume
□ Tell me about a time when you exhibited
leadership
□ Tell me about a time when you had to solve a
problem
□ Tell me about a time when you
failed
□ Tell me about a time you had
impact
□ What kind of leader are
you?
□ Why Firm
X?
□ Why City
Y?
□ Why
consulting?
□ What is your greatest
accomplishment?
□ What would you say your biggest
weakness is?
□ What are your long-term
goals?
□
How do you like
school?
□ What is your favorite class at
school?
□ What did you do last
summer?
□ What do you do for
fun?
27 Case types and
case interview
methods
□ What is a
case?
□A business issue/problem company is facing in a few
sentences
□ Takes about 25 minutes; has limited data which is usually
provided if asked for
□ Approach to solution is more important than the final
solution
□ There are two common case interview
methods:
□ „Go with the flow‟ cases (typical of most firms) – You
will determine which areas to explore and lead the
discussion, i.e. drive the case
□ Command and control (typical of McKinsey) –
Interviewer guides the discussion and case has
heavy brainstorming components and quantitative
work
□ Common case types* (not a comprehensive
list):
□
Profitability
□
Industry Analysis
(incl. non-profit) Market Entry
□
Market Sizing
Acquisition
□
Capacity Expansion
(incl. outsourcing) Organization
□
Investment
s
*Note: one case could span multiple case
types
Firms are trying to gauge your
28
problem-solving abilities, not
whether you are an industry
expert
Background
Important
Warning!
• Case interviews span a broad range of industries. You may encounter
everything from Financial Services to Mining to Education to Formula 1
• Those of you who have not worked as consultants before will likely not
have any background in most of these industries
• This document can give you a very high level view of some „typical‟
industries that cases focus on
• You MUST attend the industry primer series led by partners from various
firms as they will capture key insights and latest trends in those industries that
tend to be popular in cases Our belief
• We believe that having a very basic overview of an industry helps
to more effectively tackle a case
• At the very least it helps you construct a framework that is most applicable
to that particular problem context. Examples:
- Consumer goods: branding is an important driver of success -
Pharma: generics manufacturers pose a major competitive threat
• Do not attempt to master industry specifics or memorize industry
data
• You primary objective over the next few weeks/months is to
master case- based problem solving... not to become an industry
expert
• Spending a little time informing yourself about the basics of a few key
industries should improve your problem-solving ability
29 „Problem Solving‟ refers to wide
variety of decisions that consultants
help clients make by analyzing
issues/drivers
Examples Some
solution drivers
• Should client enter new market? What is
NPV?
• Should client do M&A? Post-merger integration
risk?
• How can client increase profits? Quantify
increase.
• How can client reduce costs? By how
much?
• Should client make new investment? What is
NPV?
• How can client increase share? Quantify
increase.
• How can client grow revenues? Quantify
increase.
• Should client outsource? Compare/value
alternatives.
Strategic
analysis
Economic
analysis
Customers /
channels
Catch-all /
Other
➢Wide variety of
decisions
businesses
face
➢Where possible, you will
be
guided to quantify improvement (i.e. to do some basic applied
math)
• What are industry
trends?
• Info on competitors/market
shares?
• Strategic rationale underlying
decision?
• What products? Prices?
Volume?
• What‟s the cost
structure?
• Profit impact for
client?
• Which customer
segments?
• What are customer needs /
wants?
• What channels? Sales
force?
• Any regional/geographic
concerns?
• What are the
risks?
• Any regulatory
issues?
• Any organizational behavior
issues?
➢Not all issues/drivers will be relevant but list should let you quickly zone in
on key to problem ➢ For these drivers, think
about: a. Changes over time? b. Compare client
with
competition etc. ➢This is meant to
be a
thought starter – not a comprehensive
list
Overall flow of a
case
~3 min. ~1-2 min. ~12-15 min. ~3 min. Understand the
question Plan your
Probe for
approach information
Assert a
conclusion
• Listen
actively
• Ask clarifying
questions
• Take judicious
notes
• Organize notes as
slides
• Formulate an initial hypothesis about possible
solutions
• Write down key
question
• Mention you will take a minute to plan your
approach
• Draw out a framework as checklist of topics to
explore
• Select 3 to 5 major topic
areas
• Identify relevant sub-
topics
• Present plan of attack to interviewer – start with the most
important
• Follow your
plan!
• Ask specific questions to test
hypothesis
• Adjust hypothesis and plan as data
emerges
• Organize notes as
slides
• Highlight insights from any numerical
calculations
• Note
conclusions
• Drive the case to a conclusion before time
expires
• Answer the
question
• Take a definite
stand
• Make best conclusion with data on
hand
• Make recommendations and follow them with supporting
evidence
• Address “risks” and “next
steps”
31 Tips: Communication,
Notes & Math
□
Communicatio
□ Explain your thought-process when presenting your
plan
□ Make hypotheses when asking
questions/requesting information
□ Go beyond verbal
communication
∎ Be engaging! Enjoy the case problem and work together to
solve it!
∎ Body language (eye contact, gestures, posture); smile often
but do not overdo it
∎ Facial expressions (Maintain composure at all
times)
□
Note
□ Write legibly, angle it such that the case-giver can
see your
work
□ Use a new page for each theme you are
exploring
□ Circle/box insights for use in
recommendations
□
Mat
□ Draw math out clearly (especially for market
sizing)
□ Explain any assumptions (be reasonable with
assumptions)
□ Walk through your logic aloud and tie the result to the
case
32 7 Tips to help you stand
out in the case interview
□ Ask questions that help clarify the scope of the case
and the exact question to be answered
□ Draw out as “MECE” (Mutually exclusive,
collectively exhaustive) a framework / tree as
possible
□ Talk about the most important branches first and explain
why they may be the key drivers; don‟t just follow the
sequence in which you wrote them
□ When asking questions or for more data, preface them
with contextual analysis, or even a hypothesis as to what
you expect the data show
□ When doing math, relate the numbers qualitatively to the
case, and identify/verbalize the takeaways from your
analysis
□ „Brainstorm in buckets‟: If asked to brainstorm, take a
minute, identify the broad levers that can answer the
question, and run- riot with ideas. Structure and a logical
approach is always
appreciate
d.
□ When presenting recommendation – take a position! Be
concise and top-down in your recommendation (i.e.
recommendation first with supporting arguments, tie in
numbers if possible). Then, mention the risks that
invalidate your reasoning
33 A note about
frameworks
□ There are an unlimited number of frameworks that
can be successfully applied in case interviews...
□ ...but knowledge of a few solid frameworks will go a long
way (profitability, market entry, go/no go investment,
etc.)
□ Sample frameworks can be found in the following
places:
□ Wharton, Ross, Stern, Tuck, Kellogg, and other school
casebooks available on webcafe
□ David Ohrvall “Crack the Case” and Mark Cosentino “Case in
Point”
□ Your knowledge from management, marketing classes and prior
work experience – read the CORE CONNECTOR published by
the Wharton Consulting Club too
□ Your own logical problem-solving
abilities
□ Cosentino and Ohrvall both offer “systems,” but these
systems are essentially combinations of individual case-
type frameworks
□ Use what(1) You are comfortable with, and, (2) works for
you.
Be as original as possible: DEVELOP A FRAMEWORK
THAT IS RELEVANT TO THE CASE PROBLEM
QUESTION AND INDUSTRY!
□ Some sample frameworks are provided in the next few
slides. But these are just meant to get you started – do
develop your own frameworks for each case!
34 Sample framework
1: Increase Profits
Overview Sample
Framework
• Client‟s earnings / profits (or „bottom-line‟ in Income Statement) has
declined or stopped growing
• You need to recommend ways to increase
profits
• Industry - Growth (g) - Revenues (R) - Profits
(Π)
• Competition - C1 market share (s1) - C2 market share (s2)
- Etc. Market Revenues Costs Customer /
Channel
• Product mix - Points of Parity
/
difference our products and competition
prod.
• Pricing (P) - Competitive parity
in
prices - Can we ↑
prices?
• Volume (Q) - What‟s our
market
share? - Enough capacity
to
meet
demand?
• Client cost structure (Fixed / Variable) - PP&E
(Property,
Plant & Equipment) - Overhead - SG&A - Labour - Materials - IT /
Systems
• Benchmarks - How do our
costs
stack up vs.
others?
• Supplier
power
• Customer Segment - Which segment
do
we serve? - Are they most
profitable?
• Channels - Current sales mix? - Are they low-
cost
channels? - Do these
channels
attract high margin customers? - Incentive
structures /
performanc
e
35 Sample framework 2:
M&A Deal
Overview Sample
Framework
• Client is considering an M&A
transaction
• Your goal is to recommend whether or not to do the
deal Strategic Fit Deal Economics Risk
Assessment
• Basic deal
rationale
•
Has the company done - Cost synergy-focus?
acquisi
t ions before? - Revenue-synergy
-
Capability test - focus?
•
Organizational cultures - Early-stage co. being
-
Compatible (high % of acquired for technology?
M&A
deals destroy value - Response to competitor
a
s cultures are not move?
compatible
)
• Type of
deal
•
Need to manage PMI (Post - Vertical integration
merge
r integration process) - Horizontal
•
Can investors not diversify - New market entry via deal
b
y themselves - Diversification move
• Valuation (Know basic DCF!) - Revenue &Costs - CAPEX & Working
Capital - PBT (profit before tax) - Taxes - PAT (profit after tax) - Cost of capital
(R) - Value = (PAT / r)
• Deal
Price
• Synergies - Cost and Revenue - New Firm
value
• New Value > Deal
Price
36 Sample framework
3: Outsourcing
Overview Sample
Framework
• Client is considering outsourcing an
operation
• Your goal is to recommend whether or not to do the
outsourcing
• Do NOT make a recommendation on cost savings alone – explore
areas like customer service impact, premium customer segment impact
etc Strategic logic Decision Economics Risks / Others
• Why are they thinking
of
• Current costs (in-
house
•
Risks outsourcing?
operation
)
-
Implementation risk? Political risks? - Cost savings?
• Outsourced
costs
-
Currency risk? - Market entry into BRIC/other
• Initial
investment
•
Partner capabilities markets?
require
d
- Quality of
service - Early-stage co. being
- Outsourcing
consultants
- Lead
time acquired for technology?
- IT/System
investments
-
Technology - Response to competitor
• Net cost
savings
-
Customer service move?
• Stakeholder
mgmt.
• Customers
affected
-
Stakeholders – job loss issues etc. - Which segments?
-
Manage media & community - What are their needs?
IMPORTANT: Sometimes interviews might make a difference between Outsourcing
and Off- shoring: former refers to functions that are done outside firm‟s boundaries.
Latter refers to outsourced functions done in a distant location such as India or
Ireland.
Sample framework 4:
37
Market entry &
Investment and new
technology
Overview Sample
Framework
• Client is considering entering a new market. Your goal is to recommend whether
or not they should enter it
• For these types of cases what is common is that the company is considering
spending money to get some kind of economic return. In addition to seeing whether the
decision is financially sound, you have to test: - Likelihood of implementation success
based on industry conditions and firm capabilities - Do a risk assessment
• Why are they thinking of market entry? - Growth? - Mature current
market? - Response to competitor move?
• Resources and capabilities - What does the firm have that makes them
think they can be successful?
▪Strategic Logic
Economics of
decision Risks /
Others
• New market
conditions
• Execution/entry barriers? -
Total Revenues (R)
- Channel access? - Total Profits
(Π)
- Regulatory barriers? - Growth
(g)
- Does firm have $ to
make
• Competition in a new
market
investment? - C1 market share
(s1)
• Risks - C2 market share
(s2)
- Implementation risk -
Etc.
- Political
risks?
•
Economics
-
Currency risk? Brand
- Investment
required
- Macroeconomic
risk?
▪
Patent
- Expected share of
revenues
▪ Local
expertise/partners
- Expected share of profits - Profitable? Payback
period?
38 Sample framework 5:
Non- profit organizations
Overview Sample
Framework
• Client is a non-profit
organization
• Your goal is to solve the specific problem for the
organization
• Important to display that you understand that non-profits have
fundamentally different drivers beside just the economics of a particular
decision Strategic Rationale Deal Economics Other
• Mission of non-
profit
•
Required capabilities - Health
-
Does non-profit have what it - Education
t
akes to do this well? - Poverty alleviation - Etc.
•
Risks - Response to competitor move?
- How will media perceive
this
• Stakeholder opinions and
likely
d
ecision? reaction
-
Critical to factor in - Donors
s
t akeholder reactions – will - “Customers” – those who benefit
thi
s alienate donors, volunteers from the non-profit‟s services
e
tc? - Volunteers - Paid staff
• Planned investment - What will it cost? - Do we have the
money?
• Returns, if any - Will we be getting
back
money? - Will organization make /
lose
money on
this?
39 Tips for giving
cases
One should broadly follow the following steps giving
cases to fellow students
Prepare
yourself
Make it
real
Step wise
approach
✓Read the case
thoroughly
✓Make the experience as
close to
✓Introduce the problem statement real as
possible ✓Don‟t give a case that you have not studied yourself
✓Be serious during the case even if you give the case to your
best friend
✓Have any exhibits ready for use during the
case
✓Be ready to take
notes
✓Allow 3~5 mins for candidate to gather her
thoughts
✓Be tough – test candidate‟s
ability
✓Answer any questions that to deal with a
negative vibes from
candidate may have
interviewer
✓ Control the time. Do not exceed 30-35 minutes for the case
portion!
✓Guide the candidate accordingly if she is digressing from
key issue
Ask questions Guide only when necessary Provide honest feed
back
✓Best way to make cases interesting to provide necessary hints indirectly - for ex
by asking related questions
✓Follow the case flow as provided in the original format – It helps in objective
assessment
✓Give out information only when right question is
asked
✓Idea is to let candidate stretch herself and get a feel for real
situation
✓Go back to your notes and think of both strengths and weaknesses ✓Be specific –
What was the mistake and what‟s the right approach ✓Be Honest – its in candidate‟s
best interest to make mistake with you and learn from them
Remember that there is no one answer to any case! A candidate can be creative
enough to take a new approach towards the problem.
40
Other
resources
□ There are a number of other
resources to learn about case
prep. We found the following
particularly useful:
□ Kellogg 2004 Casebook – Pages 5
to 44
□ Ross 2007 Casebook – Pages 3
to 25
□ Older Wharton
Casebooks
41
Content
s
Sectio
n
Page
#
□ Introduction &
Acknowledgements
3 □ Consulting Industry
Guide
6 □ Industry
Overview
□ Firm Overview (11
Firms)
□ Interview
Preparation 19
□ Interview Overview – Fit +
Case
□ Sample
frameworks
□ Other
References
□
Practice
Cases 41
□ 18 Practice
cases
□ Links to other
cases 123
□ Cases from firm
websites
□ Suggested cases from other
casebooks
42
List of Practice
Cases
Case
Description
Page #
□ Case 1: Microfinance in
India
43 □ Case 2: BCG – China
Outsourcing
49 □ Case 3: LEK -
Caskets
54 □ Case 4: Deloitte – Bottled Water
Market
58 □ Case 5: Bain – DeBeers Retail
Venture
62 □ Case 6: Booz – Hospital Administrative
Software
68 □ Case 7: BCG – Jamaican Land
Investment
70 □ Case 8: McKinsey – Academic Performance of Students
in Schools
74 □ Case 9: Bain – Mobile Phone
Insurance
78 □ Case 10: Bain – Organic
Pizza Crust
83 □ Case 11: Oliver Wyman – Traffic Signal
Company
87 □ Case 12: Booz – Travel
Channel
92 □ Case 13: LEK –
Best Buy
95 □ Case 14: McKinsey -
All-Mart
98 □ Case 15: McKinsey -
Loonilever PLC
10
3
□ Case 16: McKinsey –
BevCo
11
1
□ Case 17: Accenture – Mosquito
Repellant
11
5
□ Case 18: BCG – Cash Rich Energy
Company
11
9
43 Establishing the case
Case1: Microfinance In
India
Our client is a large microfinance institution in India that has seen its client base
(largely rural women earning less than $3 a day) growing at over 150% a year. This is
not unusual for private for-profit microfinance institutions in India.
However, the rapid growth has started to generate criticism over perceived high interest
rates and harsh collection tactics of loan officers. This came to a head when the media
and (local & state) started to blame farmer suicides on microfinance-induced over-
indebtedness and harsh collection practices.
What should our client do in-
response? Problem statement
narrative
Guidance for interviewer and information to be provided on request - Microfinance is a
huge untapped market in India. Demand met is $5Bn of $55Bn - Microfinance
Institutions (MFIs) cropped up in the early-late 1990s as non-profit institutions (NGOs) -
In the early-to-mid 2000s, these NGOs began to convert to for-profit institutions in order
to access commercial capital that would help them scale - The average MFI interest
rate is between 25-30% - Because many MFIs are now for-profit , critics contend that
MFIs are making money off the poor through their „high‟ interest rates - At that time, our
client provided financial services to around 1mm women clients in 5 states in India -
Loan officers are all from villages themselves, and are often incentivized according to
number of collections and drop-out rate
44 Sample solution element – issue
tree & qualitative analysis
Candidate may propose analysis /
action in:
Market
Analysis/Environment
External
Response
Internal
Response
• Is this an industry-wide
perception
• Explore competitive
environment
•
Training programs problem ?
• Who are players?
Private vs
• for loan officers to
ensure
• Explore criticisms from
government
governme
nt
n
o harsh collection practices and media (what are motivations?
• Do they use harsh
collection
a
re used Are they purely altruistic or
practices? Do
we?
•
for area managers to deal something more nuanced?)
• What interest rates do
they
with press and criticism
charge?
• Explore possibility of
reducing
• Opportunities to strengthen
brand
interest rate and
image? Possible follow-up and guidance to interviewer
Possible follow-up and guidance to
interviewer
Possible follow-up and guidance to
interviewer
• Main critiques are : “high” interest rates and harsh collection
tactics
• Important note: Our client (and other private MFIs) compete with government
providers of microfinance – majority of government voter base is rural poor, so private
MFIs are stepping on purview of gvnt (govnt view)
• Other private MFIs are allies, though two have engaged in harsh collection
practices. Our client has disassociated from them.
• Government programs are highly subsidized (world bank), so can charge much
lower interest rates. Still, their default rates are much higher. Show cost of borrowing
slide.
• For interest rate exploration, wait for them to ask about cost structure, and then
show cost structure slide. Ask them to analyze
45 Handouts &
Math
There is a lot of controversy over interest rates – should our client cut interest rates?
Responder should Math Question
ask about 1. cost structure of MFI/ 2. competitor interest rates and 3. ability of clients
to repay loans. For #3, ask responder to calculate returns on investment.... Overall
approach, good shortcuts & solution
Math question 1. A typical investment by a woman MFI client is to
buy a - For cost structure of the MFI – show chart. Shows that admin costs and cost of
lending are extremely high, and profits are less than 2%. Thus, interest rates seem ok.
buffalo. What is her return on investment in this decision? Supporting numbers (provide
if asked): Cost of buffalo: 10,000 Rs (Rupees) - For competitor interest rates - show bar
graph. This shows that compared to government programs (state bank programs
mainly), our client has a lower cost of borrowing because we have no travel costs (our
loan officers go to our clients each week to collect interest payment or deliver loans)
and client does not take bribes. However, Govt banks
Useful life of a buffalo: 1 year (300 days per year) Cost to maintain buffalo: Rs 2 per
day Milk per buffalo per day: 8 litres Market price for litre of milk: Rs 8 per litre Ignore
time value of money, buffalo siring progeny and other uses of buffalo heavily subsidize
their loans and charge lower interest rates that do not reflect the true cost of of
borrowing
Answer: ROI =
(Revenue – Cost - Investment) / Investment - For ability to repay, resopnder should
answer in two parts: 1. what is default rate = (less than 2%) 2. Calculate returns on
investment Answers
= Milk in litres per day * # of days buffalo can provide milk * price of milk * of useful
years – investment – cost per day) / Investment = ((8*300*8*1) – (10000) –
(300*1*2))/(10000) = 86% over 1 year investment period (Note: this is actually much
higher than the reqd. int. rate of 23- 25%)
