Case Interview Workbook TABLE OF CONTENTS

What is a Case Interview? 3

Common Misconceptions About Case 4

Interviews Case Interview Success Factors 5

The Case Interview Process: Structured Problem 6

Solving Clarify the Problem 7

Decompose the Problem 8

State Hypotheses and 9

Develop Test Hypotheses 10

Summarize and Communicate 11 Findings Types of Cases 13 “The Great 14 Unknown” “The 16 Parade of Facts” 18

“The Back of the Envelope” 20 Samples Frameworks and 21 Application Putting it Together

2 Case Interview Workbook WHAT IS A CASE INTERVIEW?

A case interview is a type of job Consulting firms are looking for people interview, used most frequently who can show problem solving and by consulting firms, that allows an business analysis skills, think under applicant to demonstrate his/her ability pressure and maintain a professional to solve a given business problem. presence with their teams and the During a case interview, an interviewer clients. A case interview provides presents a situation or case and then excellent insight into how well you asks the applicant to explore the would perform in a consulting situation. underlying causes of the problem and suggest recommendations to remedy The purpose of this guide is to help the problem. familiarize you with the process of a case interview, introduce you to The cases given tend to be real business some potential methodologies, and situations, often drawn from the provide you with sample cases to interviewer’s actual project experience. practice. Learning about case Case interviews typically last from 45 interviews is also a helpful way to to 60 minutes, with a focus on the case determine if strategic itself lasting 30 to 45 minutes. consulting is right for you, as these cases reflect the types of business Your success in a case interview will situations and structured thinking not depend on identifying the “correct” consultants encounter on a daily basis. answer, but rather on how clearly you define the problem, how logically you structure your analysis, your quantitative analysis skills and how well you communicate your thoughts to the interviewer.

3 Case Interview Workbook COMMON MISCONCEPTIONS ABOUT CASE INTERVIEWS

THERE ARE MANY MISCONCEPTIONS ABOUT THE CASE INTERVIEW AND WHAT THE INTERVIEWER IS LOOKING FOR.

Myth

There is one The interviewer Industry knowledge right answer or expects you to get is required to do approach to the case the right answer well on the case

Fact

Usually there The interviewer The interviewer expects are several credible expects a you to be effective with approaches and solutions thoughtful, the knowledge you have structured response and make hypotheses based on sound common sense

4 Case Interview Workbook CASE INTERVIEW SUCCESS FACTORS

CASE INTERVIEW SUCCESS DEPENDS ON PROVIDING A THOUGHTFUL AND STRUCTURED RESPONSE TO THE CASE PROBLEM.

• Understand the case situation • Listen for suggestions and hints and what is being asked from the interviewer

• Analyze the case issues and • Engage the interviewer—it is okay potential solutions in a structured to ask for direction and manner clarification • Make certain your thought • Manage time effectively—maintain processes are transparent to the your momentum, don’t get interviewer bogged down on one point • Be creative, yet practical—use your business judgment and give • Identify critical focus areas and specifics ask probing questions to learn • Take notes more

• Make sure you are communicating clear and logically

5 Case Interview Workbook THE CASE INTERVIEW PROCESS: STRUCTURED PROBLEM SOLVING

LISTEN CLARIFY DECOMPOSE STATE TEST SUMMARIZE TO CASE PROBLEM PROBLEM HYPOTHESES HYPOTHESES FINDINGS

A case study interview is quite similar to After you lay out the framework for a consulting situation. First, you will be the interviewer, you should discuss given a description of a case problem the analyses you would perform to by the interviewer. This description may determine potential solutions tothe be as short as one sentence or as long business problem. The interviewer may as a page of detailed information. Once ask you to perform simple analyses to given the case description, you will need test your hypotheses. to understand the problem by asking the interviewer well thought out questions. Finally, you should summarize your The answers to these questions should methodology with any recommendations allow you to align on the objectives you may have as well as addressing and expectations before developing an risk factors. approach (framework) that you can use to analyze the situation.

6 Case Interview Workbook CLARIFY THE PROBLEM

LISTEN CLARIFY DECOMPOSE STATE TEST SUMMARIZE TO CASE PROBLEM PROBLEM HYPOTHESES HYPOTHESES FINDINGS

Goal: Articulate Key Case Problem

Activities: Ask clarifying Probe for additional Assess Pause to structure questions information case facts your thinking

Summarize issues Confirm objectives Document and for discussion and expectations confirmassumptions

In consulting, understanding the client Based on your questions, the interviewer situation is fundamental to developing will often provide you with more details solutions to important problems as well about the case. By structuring your as recommendations for how a business questions, you will cue the interviewer to could be run more effectively. A case how you plan to work through the interview models this by presenting problem. It is important to be flexible you with information, asking you to make in your approach and open to multiple sense of it, and develop potential solutions If the questions you are asking do solutions. Clarifying the nature of not yield useful answers, try switching to the business issue (e g , declining an alternate approach. Remember, you are profitability, loss of market share, or new also being evaluated on your ability to ask competitive threats) is an important step. insightful questions.

7 Case Interview Workbook DECOMPOSE THE PROBLEM

LISTEN CLARIFY DECOMPOSE STATE TEST SUMMARIZE TO CASE PROBLEM PROBLEM HYPOTHESES HYPOTHESES FINDINGS

Goal: Identify Root Causes of Problem

Activities: Break the problem into its component parts in a structured manner

Once you have stated and clarified To develop a good issue tree, you the problem, you need to decompose should ensure that the subcomponents it in an exhaustive, logical manner. are linked in a logical manner, that By using an issue tree, you can break it prioritizes the issues, and that it the problem into smaller pieces and reveals possible solutions. Also, each illustrate logical relationships among the branch of the tree must not overlap component parts. with another (mutually exclusive), and the branches should thoroughly Basic issue trees are represent contributing elements structured as follows: (collectively exhaustive).

Issues/Causes … (e.g. declining Problem revenues) … (e.g. declining profitability) Issues/Causes … (e.g. increasing costss) …

8 Case Interview Workbook STATE HYPOTHESES AND DEVELOP

LISTEN CLARIFY DECOMPOSE STATE TEST SUMMARIZE TO CASE PROBLEM PROBLEM HYPOTHESES HYPOTHESES FINDINGS

Goal: State Hypotheses/Potential Solutions

Activities: Reviewproblem Identify potential State your decomposition hypotheses/solutions assumptions

Choose appropriate framework to test hypotheses (See “Sample Frameworks and Applications” section) for example: Porter’s Five Forces, 4 P’s of Marketing, Profitability Analysis, Three “C’s”

Once you are confident you understand since many cases will not fit neatly into the problem, you should list out one of those frameworks. The framework potential hypotheses that may resolve is a key to structured thinking—it allows the core problem. You will then need to you to approach a problem in a holistic choose a framework (or analysis tool) to manner, while directing your analysis structure your hypotheses (see “Sample to each of the components within Frameworks and Applications” section), the framework. but do not feel constrained by these

9 Case Interview Workbook TEST HYPOTHESES

LISTEN CLARIFY DECOMPOSE STATE TEST SUMMARIZE TO CASE PROBLEM PROBLEM HYPOTHESES HYPOTHESES FINDINGS

Goal: Apply framework to TestHypotheses

Activities: Describe analysesto Break problem into its Apply framework and discuss be applied component parts in a findings/implications to structured manner solution definition

Once a framework is selected, you must If you find that your analyses are not analyze each component of the confirming your initial hypotheses, framework in a logical manner. Discuss develop new ones If your analyses do not the analyses you would perform to appear to be enlightening, the interviewer determine if your initial hypotheses are may direct you towards true. You may have to ask additional another path. Take advantage of these questions of the interviewer to get the hints if they are offered. information needed to develop these Analyses. Often times, you may be asked to perform an analysis with simple data supplied by the interviewer.

10 Case Interview Workbook SUMMARIZE AND COMMUNICATE FINDINGS

LISTEN CLARIFY DECOMPOSE STATE TEST SUMMARIZE TO CASE PROBLEM PROBLEM HYPOTHESES HYPOTHESES FINDINGS

Goal: Summarize Findings/Implications

Activities: Succinctly remind Present Present alternative interviewer of issuescovered solutions scenarios

Finally, summarize the framework and analyses you utilized in the case and communicate effectively those findings. Suggest recommendations for the client and potential next steps the client should take. The interviewer may tell you what happened with the real project situation on which the case was based. However, don’t worry if your methodology or answer did not match the real project situation because you are being evaluated on your thought processes and not against some predetermined answer.

11 Case Interview Workbook “SOFT EVALUATIVE” CRITERIA

In addition to your ability to ask probing questions, decompose the problem, define the preferred analysis framework and perform the analyses in the case, you will also be evaluated on many intangible qualities. While interviewers look at these criteria in non-case interviews as well, you will need to be extra- conscious of them in a case interview, since often times your concentration will be on solving the case.

Poise Flexibility • Are you confident in your answer? • As situations change and new • How do you handle yourself when information becomes available, are you you make a mistake? able to adapt your thinking to new data • Do you perform well under pressure? or an emerging environment?

Communication Other Intangibles • Are you articulate in communicating • Do you display energy and drive? your thought processes and • Do you show initiative? conclusions with others? • Do you manage time effectively? • To be a successful consultant, you • Do you demonstrate decisiveness? must be able to clearly communicate • Do you convey a genuine interest in your recommendations and articulate the career and the firm? how you were able to arrive at your conclusions • Listening skills: are you leveraging all the information/data provided by the interviewer

12 Case Interview Workbook TYPES OF CASES

THERE ARE THREE GENERAL TYPES OF CASES:

The The The “Great Unknown” “Parade of Facts” “Back of theEnvelope”

Provides very little Provides a significant Provides littleinformation, information amount of detail— but asks a key question some unnecessary Tests candidate’s ability Tests a candidate’s to probe for additional Tests candidate’s ability analytic abilities details to distill key issues Requires logical thought Requires structuring Requires depth ofanalysis process and ease with framework based on based on relevant facts numbers new facts

The “Great Unknown” and “Back of the Envelope” cases are the most common types of cases. However, regardless of the type, be sure you have a solid understanding of the facts and what is being asked of you before you begin to “crack” the case.

13 Case Interview Workbook THE “GREAT UNKNOWN”

One of the most common types of case Write those questions out and ask the interviews poses the situation in one or interviewer. Be prepared to go several two sentences, leaving you with little layers deeper into the issue as the information or structure on which tobuild. interviewer’s answers may lead you to These cases are used often because they additional questions. test your ability to discover necessary facts by posing the rightquestions Hypotheses and Framework and being able to develop analytical Development frameworks to solve the problem. Describe to the interviewer what some of the potential issues/hypotheses could be. Potential Methodology: Then choose a framework that will Case Description structure your thinking and guide you Listen carefully and determine the through testing the issues/hypotheses. central business problem being asked. Hypotheses Testing Problem Decomposition Using the framework selected, explore the Identify and prioritize root causes of issues/hypotheses initially laid out. the problem by breaking the problem Describe the factors in each section of the down into its component parts. An issue framework that are relevant to the central tree is a valuable tool to ensure that problem. Also list out analyses to test the decomposition is exhaustive and that the hypotheses in each section of the sub-components are linked together in a Framework. By asking additional questions, logical manner. you may still yield more information about the case from theinterviewer. Problem Understanding Consider the central problem What Case Summary additional facts do you need to fully clarify Review your initial issues/hypotheses in this problem? What are the crucial pieces light of your structured analyses and of information that willallow you to suggest possible recommendations for develop a framework around this problem? the client.

14 Case Interview Workbook THE “GREAT UNKNOWN” CASE EXAMPLE

Interview Example: Potential Methodology: • The client, a leading manufacturer of Problem Understanding prefabricated kitchen furnishings, has • Has the size of the market changed in been steadily losing market share over the last two years? the last two years. • Has the competitive structure of the • The senior executive team would like industry changed? Mergers and you to help them understand why and Acquisitions? New Entrants? what they can do to improve their market standing. • Are there any new products or new technologies that are gaining market share?

• How are we currently positioned (low cost, high quality, etc )? What is our competitive advantage?

15 Case Interview Workbook THE “PARADE OF FACTS”

These cases are relatively rare because Potential Methodology: of the amount of time necessary to Problem Understanding present the case description, but can Pause for a moment and consider the also be one of the more challenging central problem. Which of these facts are types of questions. You will be given totally irrelevant? Eliminate them for now more information than you need in the Which facts are definitely related to the case description, and one of your key problem? Ask questions about facts that tasks is determining which facts are appear relevant. relevant to the client’s business problem. Probe for additional facts that the Consultants are often faced with a interviewer may have. deluge of details, and the ability to sort out the crux of a problem is a key skill for which firms are looking.

While most of our process steps are similar to “The Great Unknown,” how we understand the central issue and probe for insight differs.

16 Case Interview Workbook THE “PARADE OF FACTS” CASE EXAMPLE

Interview Example: Potential Methodology: • Client is a leading food company that • Key Problem: Profitability of Business wants to develop a fresh prepared and Size of Market meal business • Trend among consumers is toward • Problem Understanding: fresher food with no artificial • Ask about consumer test What preservatives or coloring prices are consumers responding • Consumers are currently purchasing to? Are there any items spoiling on $5 0 billion of frozen meals—trendis the shelf? toward more upscale products • What is the competitive structure • A fresh meal plate combining a of this market currently? protein, vegetable and starch is • What are the components of the delicately arranged in a sealed plastic company’s cost structure? dome package • Nitrogen gas flushing is used to • Structure Analysis: extend shelf life • What is the break-even point for • Product is currently in limited the firm? consumer test at $5 50 to $850 1 Determine Gross Margin per Unit per meal 2 Determine fixed costs • Shelf life of product is 14 days— 3 Divide to find break-even product will spoil in 21 days potentially • Estimate the size of the market (a causing food poisoning case within a case) • Client wants to know if they can make • Determine the market share they money in this business will need to break-even • Client wants to know if the market is big—how will they keep • Develop Recommendations: competition out • Discuss the competitive structure • Client wants a consultant to assist in of the market Can the firm building business case realistically achieve the break-even market share?

17 Case Interview Workbook THE “BACK OF THE ENVELOPE”

“The Back of the Envelope” questions Framework Developmentand are very different from other types Numerical Analysis of cases in that they are primarily Walk the interviewer step-by-step through numerically driven. You will be asked your framework, calculating the numbers to estimate the number of some for him as you go. You will need to begin everyday item in society. The with some assumption about the interviewer is not looking for a random population (of people, objects, etc ) and guess, but rather a structured thought will need to make other assumptions at process to get to a numerical answer. certain points throughout the case. These types of questions not only test your comfort level with numbers, but Don’t be afraid to make too many also force you to create your own assumptions, but be certain that they framework to develop a numerical are needed and that you can explain answer. why you are making that assumption. There are often several different ways to Often, you will hit a “dead end” in your approach these problems, and all of thinking If you find yourself in a situation them are correct as long as they are where you don’t know how to proceed, internally consistent and holistically you should back up several steps in your structured to arrive at a logical answer. analysis (make sure you communicate this to the interviewer) and pursue an Problem Understanding alternative path. Rather than asking probing questions, take a moment to think about the steps you would need to take to get to an answer. What assumptions will you have to make along the way?

18 Case Interview Workbook THE “BACK OF THE ENVELOPE” CASE EXAMPLE

Interview Example: • Estimate the average number of units a • Estimate the total number of dry dry cleaner can handle per week cleaners in Philadelphia • Assume that the average dry cleaner has two workers who Potential Methodology: typically handle 20–30 customers • Assume there are two million people (or 80–120 units of clothing) in Philadelphia per hour • Estimate the size of market by • If the average dry cleaner is open segmenting the population eight hours a day, 5 days/week, • Assume the population consists of they typically handle 3200–4800 25% adult men, 25% adult women, units per week (80–120 units and 50% children x 8 hours x 5 days) • Assume children have no dry • Divide the total market size by the cleaning and only 25% of adults use average units handled per dry dry cleaning cleaner to find the total number of • Estimate the average number dry cleaners of “units” of clothing each man • There are between 208 and 312 and woman brings weekly to the dry cleaners in Philadelphia cleaners For this case, assume that 3 shirts/ blouses and 1 suit are brought to the cleaners each week • Thus the total size of the market (per week) is one million units of clothing (1 million people x 25% x 4 units per person)

19 Case Interview Workbook SAMPLE FRAMEWORKS AND APPLICATION

In the preceding section we outlined problems that can be presented within a several types of case “formats” you case interview and oftentimes numerous are likely to encounter throughout the business problems will be combined interviewing process. However, this within one case situation. The following doesn’t describe the actual content of frameworks are not exhaustive but are cases or the problems and issues you provided as a guide to get you started will be asked to consider. There are many thinking about how to solve different different categories of business issues or types of case problems.

Business Issue Potential Framework

Volume Revenue Price Profitability Profitability Fixed Cost Variable

Products Current

Market Penetration Product Expansion et

MarketExpansion k

New

ar s M Market Development Diversification

Current New

3 C’s Customer Company Competition CompetitiveAnalysis SWOT Strengths Weaknesses Opportunities Threats

Porter’s Opportunity Assessment Potential Entrants FiveForces • Product (e g new product launch) • Business unit Suppliers Industry Competition Buyers • Overall market • Asset valuation/maximization Substitutes

MarketStrategy 4 P’s Product Price Promotion Place

20 Case Interview Workbook PUTTING IT TOGETHER

The interview process we have outlined Building and Refining Skills will help you structure your thinking and One of the best ways to prepare for case the “types” of cases we have suggested interviews is by practicing them. Some will help you orient yourself to the suggestions for sharpening skillsinclude: different way in which information may be presented. • Rehearse before your first interview

In addition, the types of business issues • Think through potential types of and corresponding solution frameworks business problems and applicable provided on the preceding page will frameworks help you determine how to analyze the situations given. • Practice cases with friends alternating between various styles and cases- start Remember, there will always be multiple with practicing the case example in methodologies and frameworks that this workbook! can be used successfully to approach a solution and you will work more • Refine your skills throughout the effectively if you choose a framework recruiting process you are comfortable with.

21 Case Interview Workbook PRACTICE CASES

THE “GREAT UNKNOWN” SAMPLE

• A major furniture retailer has • Citibank is considering purchasing experienced declining profits for four another credit card company If the quarters, yet over that same time acquisition is made, Citibank will gain period, it has experienced a 25% access to 100,000 new card holders. growth in sales and has opened many What is the estimated value of this new stores. Why are profits declining? acquisition?

• A fast food company is thinking about • A commercial bank is re-evaluating the putting a franchise in an airport.They number of branches it operates, and hire you to see if they should do so. whether they should increase the number of branches or close some • A bread division of a large food down. How would you suggest they go company is facing increasing about it? competition in its market and wants to know if it should exit the market. • A large conglomerate company is facing declining profits in its railroad • A car company is interested in company division and is considering developing a new car. What marketing shutting it down. You have been hired related issues should it consider to determine if this is the before doing so? right course of action and identify potential alternatives. • What factors influence the revenue potential of a new pharmaceutical • New York City has hired you to product? determine what optimal route or what destination taxi drivers should go to when they do not have a customer.

22 Case Interview Workbook PRACTICE CASES

THE “BACK OF THE ENVELOPE ” SAMPLE

• How much money could Continental • Estimate the change in the price of oil Airlines save by giving customers 1/2 a in the year 2000 from today’s price. can instead of a whole can of Sprite? Will it increase or will it decrease?

• What is the estimated value of a • Estimate the number of attendees for taxi medallion in New York City? a free concert for U2 in Central Park in New York City. • Discuss what is wrong with the following statistic: the Volvo is the safest car on the road because a recent study has shown that Volvos have the fewest number of accident deaths per mile driven.

23 Case Interview Workbook ABOUT ACCENTURE

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