cracking the case interviews

A Parivartana Consulting Pvt. Ltd. Initiative

CRACKING THE CASE INTERVIEWS

Workshop with Vijay Khairnar

2

August 21Private & Confidential

Structure of the workshop

Session # Title Duration

1 Introduction, Solving Guestimates And Market Sizing Cases 90 mins

2 Growth Strategy / Revenue Enhancement Cases 60 mins

3 Profitability / Cost Reduction Cases 60 mins

4 Customer Satisfaction/ Loyalty 60 mins

What you’ll learn✓ How to crack all manner of case studies including: Market Sizing, Profitability etc.

✓ Multiple frameworks to help you structure your thinking in a case interview

✓ All the business and consulting terminology necessary in a case interview

✓ How a case interview is conducted through interactive case interview examples

✓ Tips to help when preparing for online case interviews

3


Who am I?

• Strategy consulting professional with 11+ years of experience

• Expertise in Growth Strategy, Cost Reduction and Business

Transformation

• Cracked case interviews of Tier-1 (MBB), Tier-2 and boutique

consulting firms

• Conducted >100 case interviews across B-schools and lateral hires

• MBA from XLRI, Jamshedpur (2011)

Vijay Khairnar

4


Session#1: Agenda

1 What is case interview?

2 Why do companies take case interview?

3 Typical flow of a case interview

4 Different parts & progression of a case interview

5 Types of case studies

6 Guestimates and market size estimation cases

5


What is case interview?

• Solve a broad business problem that is analogues to a real-life concern of a

company

• E.g.,

• Should a Finnish mobile manufacturing company enter Indian market?

• How should airline price the flights on a particular route?

• In what ways can FMCG company improve the revenue of a particular brand?

• What should a steel manufacturer do to improve its profitability?

• In real-world, consultants will take months to solve these problems. You are expected

to solve in a 30-min or 1-hour case interview

Hence, APPROACH is far more important than the final solution!

6


Why do companies take case interview?

Problem solving skills

Business acumen

Quantitative skills

Logical thinking

style

Clear & effective communication

Testing core

strategy skills –

all at once !

Companies following case

interview approach:

✓ Strategy consulting firms

✓ Leading tech firms

✓ Conglomerates for Corp Strategy/

General management roles

✓ Data and analytics firms

7


Typical flow of a case interview

INTERVIEWER:

Presents background, problem

and objectives of the case

(understanding the case

background information)

YOU:

Synthesize major points of the

case and verify objectives

(Verifying objectives)

YOU:

Request time to structure your

thoughts into a framework

(Developing a structured

framework)

YOU:

Present the framework to the

interviewer

(Presentation &

communication)

YOU + INTERVIEWER

Interviewer reviews your

framework, suggests the area to

start with OR you’ll be expected

to suggest (Start the case)

YOU + INTERVIEWER

Gather assumptions to solve

the quantitative problem

(Quantitative skills)

YOU + INTERVIEWER

Solve qualitative questions on

business judgement/ intuition

(Logical thinking style)

YOU + INTERVIEWER

The interviewer will ask you to

summarize/ provide final

recommendations

(Delivering a conclusion)

YOU

Differentiate yourself with

additional insights/ ability to see

a larger picture

(Taking it forward)

8


Different parts & progression of a case interview

• Listen to the problem statement carefully

• Note down the key information (about industry, company, customer, market, pain

points)

• Ask question if not clear

Understanding the case background information1

• Take a moment to consume the information provided

• Summarize the case background and objective to the interviewer

• Ask the interviewer if your understanding is correct or not

Verifying objectives2

9



• Analyze the problem statement and think about an approach/ framework to solve in a

structured manner

• You may leverage the standard frameworks like Ansoff matrix, BCG matrix, Porter’s

framework, 3C framework etc. (only if they are directly applicable)

Developing a structured framework3

• Share your thought process (or framework) with the interviewer before starting to solve

the case. Explain your rationale.

• Demonstrate your overall approach to solve all aspects of the problem at hand

• Ask the interviewer if your approach is correct and whether you are missing any

aspects

Present your framework/ structure/ approach 4

10



• Take 2-4 mins to build your solution/approach in line with the framework

• Narrate the solution/ approach to the interviewer

Solve the case5

• Share your assumptions and calculation methodology with the interviewer

• Ask the relevant questions and seek the required data

• It will be ideal if you speak your math out loud

• Think how best can you triangulate your result

Quantitative skills6

11



• For the qualitative parts of the case (e.g., competitive analysis, industry analysis,

customer response etc.), leverage your industry expertise and/or business acumen

• Out of the box thinking is always appreciated

Qualitative question solving (logical thinking)7

• Share your conclusion with rationale to the interviewer

• Many a times, this is followed by a subsequent twister – Do not outrightly negate your

solution. Rather, think how best can you further improve your solution given the

additional information

Delivering a conclusion8

12


Types of cases

# TYPE SUB-TYPE

1 Guestimates Top-down, bottom-up, mixed

2 Market size estimation Top-down, bottom-up, mixed

3 Growth StrategyRevenue acceleration, business diversification, Acquisition,

market share improvement, market-entry strategy

4 Profitability Cost reduction, Pricing strategy

5 Customer satisfactionCustomer experience enhancement, Loyalty improvement, churn

reduction, Brand advocacy improvement, NPS improvement

6 MarketingGo-to-market strategy, Pricing strategy, Promotion strategy,

Marketing channel mix, Campaign effectiveness

7 Supply chain/ OperationsNetwork optimization, Logistics cost optimization, warehousing

and distribution, supplier rationalization

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✓ There are no correct answers: The aim is to be logical

✓ Don’t tie yourself in knots: round-up/ down the numbers whenever

possible

✓ Write it down: Do not treat the piece of paper as a rough calculation

sheet

✓ Speak up: The time you speak for should always be greater than the

time you spend calculating


Tips for solving case studies during the interview

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1. GUESTIMATES


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1. What are guestimate case studies?

Guesstimate questions in interviews ask the candidate to estimate a number based on very limited information (hence “guess”)

Top-downQuestions that involve starting with an entire

population (in other words, the “top” level) and

then breaking it down until you arrive at an answer

Bottom-upStart from the “bottom”—some low-level

statistic, such as Revenue per customer,

and build your way up to the answer

Example guesstimate questions:

•How many mattresses are sold in India every year?

•What is the monthly profit of your favorite restaurant?

•How many bottles of coca-cola are there in circulation in India now?

•How many weddings are performed in India per year?

•How many flights have a lay-over at Dubai Airport in year?

•What would be the revenue of a Lakme Hair Salon in South Delhi?

(Top-down)

(Bottom-up)

(Top-down)

(Top-down)

(Bottom-up)

(Bottom-up)

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GUESSTIMATE CASE #1

Solving a case study


Guestimate Case #1


How many cups of tea is consumed in Mumbai per month?

Step 1: Clarify the question

Step 2: Inform the interviewer about your thought process (Assumption and approach)

Approach :

• Break down the monthly consumption into weekly consumption;

• Divide the population by types of tea-drinking pattern (Habitual, Regular, Occasional and

none);

• Determine the per week consumption for different types of tea-drinkers

Key Assumptions to start with:

• Same consumption on all days of the week;

• Mumbai population is ~2 Cr

Guestimate Case #1


How many cups of tea is consumed in Mumbai per month?

Step 3: Build on the approach

Eliminating children, who are ~10% of

the population

Habitual drinkers (25%)

~2 cups per day i.e., 14

cups per week

Regular drinker (40%)

1 cup per day i.e., 7

cups per week

Occasional drinkers

(25%)

2 cups per week

Non-Tea drinker

(10%)

0 cups per week

Mumbai Population : 2Cr

Addressable population: 1.8Cr

Tea-cups

consumed per

week

1.8*25%*14

= 0.45*14

= 6.3 Cr

1.8*40%*7

= 0.72*7

= 5.04 Cr

1.8*25%*2

= 0.45*2

= 0.9 Cr

Total tea-cups

consumed per

month

[6.3+5.04+0.9] * 4 = 12.24 * 4 = 48.96Cr = ~49 Cr

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GUESSTIMATE CASE #2



Guestimate Case #2


Estimate the profit of your favorite restaurant in your city



Clarify the context and scope

• Tell a few facts about your favorite restaurant to build the scope

• Shivsagar Restaurant : family dining place in the suburb

• Operates 4 hours in the morning and 4 hours in the evening

• Serves veg food and non-alcoholic beverages

• Considering only dine-in side of the business (Ask the interviewer if he/she is ok with this assumption)

Approach :

• Determine monthly revenue based on per customer invoice amount and capacity utilization

• Determine monthly cost : fixed cost and variable cost

• Estimate operating profit before tax, depreciation and amortization (Ask the interviewer if he/she is ok

with this understanding)

Guestimate Case #2



Step 3: Calculate the revenue

Revenue per week = number of tables * number of customers per table per week *

revenue per customer

Number of tables: 20 (you know it! It’s your favorite restaurant)

Number of customers per table per week:

Revenue per customer : INR 2,000 (assumption)

Revenue per week = 20* (18+20)* 2000 = INR15,20,000

Revenue per month = INR 60,80,000

Weekdays (Monday lunch to Friday lunch) i.e. 9

slots of 4 hours each

• Utilization : 50%

• Hours per customer : 1 hour

• Total customers per table = 9*4*50% / 1= 18

Weekend (Friday dinner to Sunday dinner) i.e. 5

slots of 4 hours each

• Utilization : 100%

• Hours per customer : 1 hour

• Total customers per table = 5*4*100% / 1 = 20

Guestimate Case #2



Step 4: Calculate the cost

Total cost per month = Fixed cost + (Variable cost per customer * total customers per month)

Fixed cost = Rent + Utilities + Salary of staff + License & Insurance

Staff break-up = Chefs + Waiters + Cleaners + Admin/cashier

= (3*75,000) + (8*20,000) + (3*8,000) + (1*15,000) = INR 4,24,000

Fixed cost = 300,000 + 30,000 + 4,24,000 + 11,000 = INR 7,65,000

Variable cost = Raw material

Assumption : Food raw material is ~50% of the price of the dish

Total variable cost per month

= (Revenue per customer * 50%) * number of customers served per month

= (2000 * 50%) * ((18+20)*20*4)

= 1000 * 3040 = INR 30,40,000

Total cost per month = INR 38,05,000

Guestimate Case #2



Step 4: Calculate the Profit

Operating profit per month = Revenue – (Fixed Cost + Variable Cost)

= 60,80,000 – 38,05,000

= INR 22,75,000

Annual operating profit = INR 2.73 Cr

Step 5: Share further information around how will you calculate the net profit

• Estimate the capital expenditure and potential debt

• Determine the interest, depreciation and taxes

• Estimate the net profit

• If the capex is funded through own money, we can calculate ROI and break-even period

24

2. MARKET SIZING CASES


25


1. What are market sizing studies?

Estimate the market size (e.g: “annual sales”) of a certain product, often using limited information.

B2C Focuses on estimating the number of

customers/ users and then estimating the

consumption per user

B2BInvolves identifying the end-use sectors

and relevant markets followed by

estimating the demand per sector and

market

Example guesstimate questions:

• What is the market size of pressure cookers in India?

• What is your estimate of electric 2W market in your city?

• What is the market size of steel rods in India?

• How big is the market for online gaming apps in India?

• What could be the market size for organized tea chains in India?

26

MARKET SIZING CASE #1



Market sizing case #1 27


What is the market size for online eye-glasses market in India?



Clarify the context, assumptions and scope

• Eye-glasses for this case are only with powered lenses

• Sunglasses, fashion accessories are not considered in the scope (Ask the interviewer if

he/she is ok with this assumption)

Approach :

• Determine the population which would use eye-glasses

• Estimate the consumption per year per customer to determine the total units sold

• Estimate annual sales by multiplying the average price of the eye-glasses

• Estimate the share of customers adopting online purchases in eye-glasses category




Step 3: Start solving the case Total Population : 1.4 Bn

Age 0-20 (25%) Age 21-60 (50%) Age 60+ (25%)

Total market size = INR 1,785 Cr

Population (Mn) 350 700 350

% people wearing eye-glasses 10% 50% 100%

# people wearing eye-glasses (Mn) 35 350 350

Eye-glasses replenishment cycle 2 years 4 years 5 years

% of online adopters 1% 5% 0%

Avg price of eye-glasses (INR) 2000 4000 5000

Online annual sales of eye-glasses

(INR Mn)

=(35/2)*1%*2000 =

350

=(350/4)*5%*4000

=17,500

=(350/5)*0%*5000

= 0

Online Eye-glasses market size (INR Cr) 35 1,750 0




Step 4: Share further insights to demonstrate your ability to see a larger picture

This market size is expected to grow as the penetration of ecommerce in eye-glasses

segment increases. Factors fueling this penetration –

• Smartphone usage

• Penetration of ecommerce companies in Tier 3 cities

• AR/ VR enablement in smartphones

Ask the interviewer if he/she wants you to calculate sunglasses market as well.

30

MARKET SIZING CASE #2





Our client is a leading lithium-ion battery manufacturer in Japan. They

want to enter Indian market and have hired you to estimate the market

size in India.

Step 1: Clarify the problem statement and ask any additional questions you may have


Approach :

• Estimate the # batteries required by auto manufacturers – 2W, 4W, commercial vehicles

• Estimate the demand in after-sales market

• Lithium-ion battery has applications in multiple end use sectors. What are the end-use

sectors the client is operating in? – Automotive

• Do they want to stick to the same sectors in Indian market? - Yes

Note: In B2B market sizing case, you may need multiple datapoints which you can not guess like

population of India. Ask for these datapoints at the relevant stage in the calculation



Step 3: Start solving the case

Lithium-ion battery market size for automotive sector in India

Total Battery consumption

New vehicles Old vehicles

• Data required:

• Annual production of 4W, 2W and CV

• Cost of a battery per type of vehicle

• # of batteries consumed will be same as the

production

• Data required:

• Number of 4W, 2W and CV on the road

• After-market price of the battery per type of

vehicle

• Assumptions/ Data required:

• Avg life of a battery for 4W, 2W and CV

• Battery consumption per year per type of vehicle =

Number of vehicles on road / avg lifespan of the battery

Note: Interviewer may handover the data to you in the form of tables/ graphs as case appendix OR

can provide you the datapoints verbally.




Appendix A :

Automobile

production trends

Type 4W 2W CV

Avg wholesale price 4,700 2,600 6,500

Avg retail price 6,000 3,500 8,000

Avg lifespan 4 years 5 years 3 years

Appendix B :

Battery details




Key Assumptions to validate with interviewer

• For simplicity, we are assuming that the production is equal to sales

• Average lifespan of the vehicle is 10 years. Thus, total vehicles on the road will be twice the

cumulative sale of last 5 years

• New car batteries are purchased by auto manufacturer. Hence, they will buy it at wholesale price

• Old car batteries are purchased by individuals. Hence, they will buy it at a retail price

• Other types of vehicles are not considered in the scope at this moment

Homework : Please calculate the market size and verify with your friend

Market sizing case #235



Step 4: Share further insights to demonstrate your ability to see a larger picture

This market size can be divided into addressable vs non-addressable market for the Client

based on following factors –

1. Eliminating the demand of auto manufacturers who have in-house battery manufacturing

2. Any specific requirements from the vehicle manufacturers restricting the usage of third-

party batteries in after-sales

3. Battery distribution network in the after-sales

36

Q&A


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37

Growth Strategy/ Revenue enhancement cases


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cracking the case interviews

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