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Workshop Preview
Crack the
Master the most feared part of the
selective process at consulting
companies
Crack the Case – PrepLounge 2
Agenda of Training
• Theory
 Introduction - Cases & frameworks
 7 commandments of a case i...
Crack the Case – PrepLounge 3
Cases & frameworks (simplified view)
Three main categories of cases:
1. Market Sizing
– Alwa...
Crack the Case – PrepLounge 4
Cases & frameworks (detailed view)
Reduce costs
Pure Market
Sizing
Market Sizing
framework
M...
Crack the Case – PrepLounge 5
Reduce costs
Pure Market
Sizing
Market Sizing
framework
Market entry New product
Operations ...
Crack the Case – PrepLounge 6
Finance
HR
Others
No specific
framework
Brainteasers
Reduce costs
Pure Market
Sizing
Market ...
Crack the Case – PrepLounge 7
Supply &
Demand
Capacity
change
Capacity framework
Finance
HR
Others
No specific
framework
B...
Crack the Case – PrepLounge 8
Pure Market
Sizing
Market Sizing
framework
Pricing &
Valuation
Private
equity
M&A
M&A / PE
f...
Crack the Case – PrepLounge 9
Industry analysis New business
Pricing &
Valuation
Private
equity
M&A
M&A / PE
framework Sup...
Crack the Case – PrepLounge 10
The commandments: Opening the case
1. Listen actively
– Fully concentrate!
– Note down ALL ...
Crack the Case – PrepLounge 11
The commandments: Opening the case
3. Plan the solution structure (roadmap)
– Ask for 1 min...
Crack the Case – PrepLounge 12
The commandments: Cracking the case
4. Be answer-first
– Always list a few possible hypothe...
Crack the Case – PrepLounge 13
The commandments: Cracking the case
5. Keep structured throughout the case
– Always refer t...
Crack the Case – PrepLounge 14
The commandments: Cracking the case
6. Gather data the right way
– ALWAYS segment your data...
Crack the Case – PrepLounge 15
The commandments: Closing the case
7. Close the case properly
– Ask for a minute to gather ...
Crack the Case – PrepLounge 16
Market Sizing framework – the 3 golden
rules
1. Always use a tree to structure your problem...
Crack the Case – PrepLounge 17
Always use a tree to structure your problem
• How structured you are, that’s what matters!
...
Crack the Case – PrepLounge 18
Find the trade-off between pragmatism and
accuracy
• Rounding numbers is an art that must b...
Crack the Case – PrepLounge 19
Find the trade-off between pragmatism and
accuracy
• Work with averages when the problem is...
Crack the Case – PrepLounge 20
Do sanity checks along the way
• Problems are not easy: you might make mistakes
• Take a st...
Crack the Case – PrepLounge 21
• Only profitability problem (quantitative focus)
• Only conceptual problem (qualitative fo...
Crack the Case – PrepLounge 22
• Profit: number 1 reason for consulting projects
• Almost half of Business Situation cases...
Crack the Case – PrepLounge 23
Actionable recommendations
Competitors
Company
(+product)
Customers
(+ market)
The “Core Th...
Crack the Case – PrepLounge 24
The “Core Three” – Customers (+market)
• Who are our customers?
– How can we segment them?
...
Crack the Case – PrepLounge 25
The “Core Three” – Company (+product)
• What is our product?
– Is it differentiated or a co...
Crack the Case – PrepLounge 26
The “Core Three” – Competitors
• Who are our competitors?
– How is the competition structur...
Now it’s your turn!
Sign up to PrepLounge now to
watch the full workshop
and crack 60+ cases with
thousands of other candi...
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Case Interview Prep - Crack the Case Workshop

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Master the most feared part of the selective process at consulting companies.

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Case Interview Prep - Crack the Case Workshop

  1. 1. Workshop Preview Crack the Master the most feared part of the selective process at consulting companies
  2. 2. Crack the Case – PrepLounge 2 Agenda of Training • Theory  Introduction - Cases & frameworks  7 commandments of a case interview: application examples  Market Sizing framework: impress your interviewer applying the 3 golden rules  The Profitability framework and an application example  The “Core Three” framework: Customers (+ market), Company (+ product), Competitors • Practice – PrepLounge.com
  3. 3. Crack the Case – PrepLounge 3 Cases & frameworks (simplified view) Three main categories of cases: 1. Market Sizing – Always use the Market Sizing framework 2. Business Situations – 85% of the time: General Business Situation framework – 15% of the time: M&A / PE or Capacity frameworks 3. Other cases types – No off-the-shelf frameworks
  4. 4. Crack the Case – PrepLounge 4 Cases & frameworks (detailed view) Reduce costs Pure Market Sizing Market Sizing framework Market entry New product Operations strategy Business turnaround Increase sales Competitive response Business Situation framework Industry analysis New business Pricing & Valuation Private equity M&A M&A / PE framework Supply & Demand Capacity change Capacity framework Finance HR Others No specific framework Brainteasers
  5. 5. Crack the Case – PrepLounge 5 Reduce costs Pure Market Sizing Market Sizing framework Market entry New product Operations strategy Business turnaround Increase sales Competitive response Business Situation framework Industry analysis New business Pricing & Valuation Private equity M&A M&A / PE framework Supply & Demand Capacity change Capacity framework No specific framework • Assess the financial health of Swatch • How should Coca Cola define the salaries of their overhead? • What economical consequences would a change in traffic direction in Britain have? Finance HR Others No specific framework Brainteasers • Why are gully covers round? • …
  6. 6. Crack the Case – PrepLounge 6 Finance HR Others No specific framework Brainteasers Reduce costs Pure Market Sizing Market Sizing framework Market entry New product Operations strategy Business turnaround Increase sales Competitive response Business Situation framework Industry analysis New business Pricing & Valuation Private equity M&A M&A / PE framework Capacity framework • For what price could Intel sell the i5 processor if they increased their units production by 25%? • What is the best diamond extraction and commercialization volume per year for De Beers? Supply & Demand chart Supply & Demand Capacity change Capacity framework
  7. 7. Crack the Case – PrepLounge 7 Supply & Demand Capacity change Capacity framework Finance HR Others No specific framework Brainteasers Reduce costs Pure Market Sizing Market Sizing framework Market entry New product Operations strategy Business turnaround Increase sales Competitive response Business Situation framework M&A / PE framework • How much is facebook worth? • Bain Capital wants to buy 10% of Dropbox for US$300 million. Is that a good deal? • Should UPS really merge with TNT? • Should GM buy its windshield provider (vertical integration)? Use Business Situation framework with focus on synergies! Industry analysis New business Pricing & Valuation Private equity M&A M&A / PE framework
  8. 8. Crack the Case – PrepLounge 8 Pure Market Sizing Market Sizing framework Pricing & Valuation Private equity M&A M&A / PE framework Supply & Demand Capacity change Capacity framework Finance HR Others No specific framework Brainteasers Business Situation framework • C&A has been facing a steady decrease in sales… Detailed discussion after break! • Henkel wants to diversify its business and enter the packaging industry. Is that a good idea? Reduce costs Operations strategy Business turnaround Increase sales Competitive response Industry analysis New business Market entry New product Business Situation framework
  9. 9. Crack the Case – PrepLounge 9 Industry analysis New business Pricing & Valuation Private equity M&A M&A / PE framework Supply & Demand Capacity change Capacity framework Finance HR Others No specific framework Brainteasers Reduce costs Operations strategy Business turnaround Increase sales Competitive response Business Situation framework Market Sizing framework • How many golf balls fit in a Boing 747? • How many shoes are sold in Brazil per year? • What is the market of hearing aids in Europe? • For how much would you sell the Golden Gate bridge? • How heavy is Manhattan? Pure Market Sizing Market Sizing framework Market entry New product Detailed discussion after break!
  10. 10. Crack the Case – PrepLounge 10 The commandments: Opening the case 1. Listen actively – Fully concentrate! – Note down ALL information 2. Pause, paraphrase problem and clarify all questions – “So, if I understood it well, I’m the CEO of a company…” – Double check on objective: “Is reducing production costs our only goal in this case?” – Don’t be afraid to ask: make sure you understood the problem 100%
  11. 11. Crack the Case – PrepLounge 11 The commandments: Opening the case 3. Plan the solution structure (roadmap) – Ask for 1 minute to gather your thoughts – Identify case type and corresponding framework – Describe and draw framework for interviewer – Organize your notes (consultants are supposed to be always “client-ready”) + point: You don’t need to call your structure a framework! Interviewers always complain that candidates force-fit their cases into off-the-shelf frameworks Profit Revenue Costs- Example: Profitability framework
  12. 12. Crack the Case – PrepLounge 12 The commandments: Cracking the case 4. Be answer-first – Always list a few possible hypotheses and set out with one of them – Start with corresponding branch of framework – Refine/rebuild hypothesis as you find out more Example: Coca-cola’s profit has been declining in the last 2 years. Hypotheses: Profit Revenue Costs-  Revenues have decreased  Costs have increased  Both + point: Use your general culture to help choose initial hypothesis
  13. 13. Crack the Case – PrepLounge 13 The commandments: Cracking the case 5. Keep structured throughout the case – Always refer to structure – Don’t jump around framework branches – Consistently explore branches and exclude them if they are not relevant – Summarize findings when switching major branches – Be MECE! Example: Coca-cola Profit Revenue Costs- Answer first: Costs have increased Raw material DistributionLabor Others + point: Mention that your structure is MECE
  14. 14. Crack the Case – PrepLounge 14 The commandments: Cracking the case 6. Gather data the right way – ALWAYS segment your data! – Proactively ask for relevant data – Don’t be too vague – Quantify whenever possible – Go for the trend (this year vs. last years) – Company-specific or industry-wide?
  15. 15. Crack the Case – PrepLounge 15 The commandments: Closing the case 7. Close the case properly – Ask for a minute to gather your thoughts (and draw them up) – It’s all about actionable recommendations! – Choose a side and stand by it! – First conclusion/recommendation then justification – People like 3: give the interviewer 3 reasons! Conclusion + recommendation Reason 1 Reason 2 Reason 3 + point: Always apply the pyramid principle (by Barbara Minto)
  16. 16. Crack the Case – PrepLounge 16 Market Sizing framework – the 3 golden rules 1. Always use a tree to structure your problem 2. Find the trade-off between pragmatism and accuracy 3. Do sanity checks along the way
  17. 17. Crack the Case – PrepLounge 17 Always use a tree to structure your problem • How structured you are, that’s what matters! • First the structure (downward from top) then the numbers (upward from bottom) 1 Example: How many golf balls can you fit in a Jumbo? # golf balls in Jumbo Golf ball volume (m3) Jumbo volume (m3) / x Filling constant Radius 2 (m2) x π Sectional area (m2) Length (m) x + point: always explicitly write the units of the variables being estimated 10 3 30 1500 Diameter3 (m3) 125.10-6 125.10-6 1.2 12M . 1.2 ≈ 14M 50
  18. 18. Crack the Case – PrepLounge 18 Find the trade-off between pragmatism and accuracy • Rounding numbers is an art that must be used • But… ask the interviewer if he’s fine with it! • Round some up and some down 2 + point: if you are able to make the exact calculation, round up the answer instead of the inputs. Ex: Right: 4 * 3.8 = 15.2 ≈ 15 Wrong: 4 *3.8 ≈ 4 * 4 = 16
  19. 19. Crack the Case – PrepLounge 19 Find the trade-off between pragmatism and accuracy • Work with averages when the problem is complicated enough, otherwise segment! • MECE is essential in segmentation • Don’t make implicit assumptions 2 Example: How many shoes are sold in Brazil per year? # shoes/year in Brazil + point: try to segment in three categories. Anyone can understand 3 categories, which is not true for 4 or more # shoes class B / year # shoes class A / year Class A population # shoes / person / year + # shoes class C / year x + Class B population # shoes / person / year x … x …
  20. 20. Crack the Case – PrepLounge 20 Do sanity checks along the way • Problems are not easy: you might make mistakes • Take a step back, be critical, use common sense • Do sanity checks for major branches 3 Example: How many people can stand together on an airport runway? # people on runway # people / m2 Runway area (m2) x Width (m) Length (m) x + point: don’t worry if your check is off by 2 times. But do something if it’s off by 10 times or more 50 1,000 50,000 5 250,000
  21. 21. Crack the Case – PrepLounge 21 • Only profitability problem (quantitative focus) • Only conceptual problem (qualitative focus) • Combined problem (quantitative + qualitative) Business Situation compound framework – 3 different combinations Profitability framework “Core Three” framework Profitability framework “Core Three” framework
  22. 22. Crack the Case – PrepLounge 22 • Profit: number 1 reason for consulting projects • Almost half of Business Situation cases start with a profitability problem – Sales falling – Costs rising – Both The Profitability framework and an application example profit costsrevenue - revenue / unit # units sold x variable cost fixed cost+ cost / unit # units soldx+ point: focus on isolating the problem by applying the commandments
  23. 23. Crack the Case – PrepLounge 23 Actionable recommendations Competitors Company (+product) Customers (+ market) The “Core Three”: Customers (+ market), Company (+ product), Competitors • First and foremost the customer: the company’s raison d’être • The company and its products • Competitors and competitive landscape The “Core Three” framework Insights
  24. 24. Crack the Case – PrepLounge 24 The “Core Three” – Customers (+market) • Who are our customers? – How can we segment them? – How big are the segments? What is our market share? – Customer concentration (bargain power)? • What does the customer expect (per segment)? – Do we understand it? – Do we fulfill it? – Which distribution channels do they like? • Is the market growing? Is it profitable? Competitors Company (+product) Customers (+ market)
  25. 25. Crack the Case – PrepLounge 25 The “Core Three” – Company (+product) • What is our product? – Is it differentiated or a commodity? What’s the pricing? – Can we cross-sell add-ons to it (bundles)? – Is there a substitute threat? – If portfolio: what does the BCG matrix look like? • What is the client’s company? – What are the company’s core competences? – Which distribution channels are used? – What are the main cost blocks (use the value chain)? Is there supplier concentration (bargain power)? – What are the company’s main assets (brand value, customer loyalty) and liabilities (legal problems, debts)? Competitors Company (+product) Customers (+ market)
  26. 26. Crack the Case – PrepLounge 26 The “Core Three” – Competitors • Who are our competitors? – How is the competition structured (fragmented, monopoly, oligopoly etc.)? – How do they behave? Is there a price war? – Best practices: are they doing something better than us? Do we do something better than them? • How does our cost structure compare with our competitor’s? • Are there barriers to entry? • Is the market regulated? If so, how? Competitors Company (+product) Customers (+ market)
  27. 27. Now it’s your turn! Sign up to PrepLounge now to watch the full workshop and crack 60+ cases with thousands of other candidates www.preplounge.com

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