Customized for: Jessica ([email protected]) — HoustonChronicle “A richrepositoryofinformationabouttheworld ofwork.” — TheWashingtonPost commentary fromemployeesandindustryanalysts.” information... SitessuchasVaultdothis,featuring insightsand “If onlythecompanyprofilesontopsiteswould listthe‘real’ — NewYorkTimes “Another killerappfortheInternet.” — Money.com insights arepriceless.” “For thosehopingtoclimbtheladderofsuccess,[Vault’s] — Fortune corporate grapevine.” “Vault hasbecomeadefactoInternetoutsourcerofthe — Yahoo!InternetLife insight intocorporatecultureandhiringpractices.” “Best waytoscopeoutpotentialemployers...Vaulthassharp — Knight-Riddernewspapers guys.” propaganda tothenitty-grittyinsidedopebetterthanthese “Unflinching, fly-on-the-wallreports...Noonegetspastcompany Here’s asamplingofourcoverage. The media’swatchingVault! Customized for: Jessica ([email protected]) Customized for: Jessica ([email protected]) © 2008Vault.comInc. MORE CASEINTERVIEWS GUIDE CAREER PRACTICE GUIDE 2 INTERVIEW VAULT CASE INTERVIEW CASE Customized for: Jessica ([email protected]) Customized for: Jessica ([email protected]) © 2008Vault.comInc. MORE CASEINTERVIEWS GUIDE CAREER PRACTICE GUIDE 2 INTERVIEW VAULT CASE ROBERT VUJOVICHAND THESTAFFOFVAULT RISHI MARWAH,SRIDHAR PARAMESHWARAN, INTERVIEW CASE Customized for: Jessica ([email protected]) Vault, theVaultlogo,and“TheMostTrustedNameinCareerInformation Vault.com Inc. electronic ormechanical,foranypurpose,withouttheexpresswritten permission of No partofthisbookmaybereproducedortransmittedinanyformby anymeans, the accuracyandreliabilityofinformationcontainedwithindisclaims allwarranties. All informationinthisbookissubjecttochangewithoutnotice.Vault makes noclaimsasto Copyright ©2008byVault.comInc.Allrightsreserved. Printed intheUnited StatesofAmerica ISBN 10:1-58131-546-5 ISBN 13:978-1-58131-546-2 Library ofCongressCIPDataisavailable. Inc., 150West22ndStreet,NewYork, NY10011,(212)366-4212. For informationaboutpermissiontoreproduceselectionsfromthisbook, contactVault.com of Vault.comInc. TM ” aretrademarks Customized for: Jessica ([email protected]) support ofourinvestors,clients,employees,familyandfriends. Thank you! production andmarketingprocesses. Vault alsowouldliketoacknowledgethe We areextremelygratefulto Vault’s entirestaff foralltheirhelpintheeditorial, ACKNOWLEDGMENTS Customized for: Jessica ([email protected]) Customized for: Jessica ([email protected]) Table ofContents SAMPLE CASES INTRODUCTION insider firm profiles, messageboards, theVaultFinanceJob Boardandmore. Visit theVaultFinance Career Channelat aeItriwCtgre ..12 Categories Interview Case ..10 Interviewing Practicing ..9 Interview the of Part Non-Case the of Do’sDon’ts and ..7 Interview the of Part Non-Case the of Structure Basic . ..4 Case the in Do’sDon’ts and ..1 Interview Case a of Structure Basic usucn omrilDb olcinCs ..122 Case Collection Debt Commercial Outsourcing ..115 Case Chain Fast-Food Organic . ..109 Case Gambling Online . ..103 WidgetsNorwegian Case . ..97 Case Brand Nonprofit . ..92 Case Partnership NGO ..87 Case Devices Medical . ..83 Case Strategy Outsourcing IT . . .77 Business Case and Alignment Benchmarking IT . . .71 Case Entry Market Loans Housing Case . ..65 Program Loyalty Consumer CPG Care Health . . .61 Case Chain Eyewear ..56 Case Brokers Customs EU ..51 Case Growth Revenue Company Card Credit ..46 Case Strategy Growth Products Consumer ..42 Case Entry Market Chain Coffee . ..37 Case Market Chemical Chinese ..31 Manufacturer Case Fertilizer Acquisition B2B ..25 Case Manufacturer Bicycle ..19 Case Park Amusement www.vault.com/consulting – with LIBRARY CAREER 17 1 ix Customized for: Jessica ([email protected]) x APPENDIX FINAL ANALYSIS Table ofContents Vault CaseInterviewPracticeGuide2:MoreInterviews Telecom Equipment/Services Provider Case ..159 Case TelecomProvider Equipment/Services ..154 Case Brand Kitchenware Specialty ..149 Case Systems Communications Satellite ..143 Case Commercial Bank Regional . . .135 M&ACompany Case Publishing . ..131 Case Bono Pro ..127 Case Revenue PetCo apeNnCs neve usin 176 Acing theCase:Checklist Sample Non-CaseInterviewQuestions Sample Guesstimates/Brainteasers LIBRARY CAREER © 2008Vault.com Inc. 173 181 175 169 Customized for: Jessica ([email protected]) Introduction Visit theVaultConsulting CareerChannelat Basic StructureofaCaseInterview sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. to prepareforit. for now, ontowhatyou’remostlikelytogetinacaseinterviewandhowbest mat, andthisbookwilladdresslesstypicalcaseinterviewformats aswell.But firms—or sometimesjustsomerenegadeinterviewers—deviate fromthisfor- typical, formatsforcaseinterviews.However, itshouldbenotedthatsome date.) Mostofthisbookisfocusedonhowtoprepareyoufor these,themost allows afirmtohavemorethanonepersonweigh-intheiropinion onacandi- interviewing andahalf-hourof“gettoknowyou.”(Havingtwo interviewers will usuallymeetwithtwoseparateinterviewersanddoabout anhourofcase minute caseanda15-minute“gettoknowyou”conversation.Eitherway, you times, thisformatwillvaryslightly—withtwointerviewerseachdoinga30- business case,and2)a30-to45-minute“getknowyou”interview. Some- The caseinterviewisusuallycomposedoftwoparts:1)a30-to45-minute practice forthecaseinterviewandhelpyoutobecomesuccessfulatit! they’re testingforindifferent partsoftheinterview, andthen,itwillhelpyou view: thestructureofinterview, whattoexpectfromtheinterviewand you withthatpractice.Itwillwalkthroughhowtopreparefortheinter- case interviewingpractice,tomastertheinterview. This bookwillhelp over theyearsinotherworkoracademicenvironments,withahealthydoseof thoughtful analysisofaproblemandstructuredthinkingthatthey’velearned terviewers. Instead,successfulcaseinterviewersarethosethatcombinethe Luckily, caseinterviewingisalearnedskill.Peoplearenotborngreatin- have toexcelatinordergetthejob. gic rolesinbusiness—acaseinterviewmaybeascreeningtacticthatyou’ll gic planner, acorporateorbusinessdevelopmentmanager, ormanyotherstrate- to ajobatconsultingfirm.Ifyoueverwantbeconsultant—orstrate- For betterorforworse,thecaseinterviewis,inmanyways,biggesthurdle ning. Itgenerallyconsistsofthe followingparts: reason: youhaveto“pass”the case partoftheinterviewtostillbeinrun- The caseiswhatyou’llspendmost ofyourtimepreparingfor—andforgood 30- to45-minutecase www.vault.com/consulting — within- LIBRARY CAREER 1 Customized for: Jessica ([email protected]) 2 Introduction Vault CaseInterviewPracticeGuide2:MoreInterviews ing forthebasicskillsthatmake agoodconsultant:structuredthinking,creative pression “Therearemoreways thanonetoskinacat”?)Instead,theyaretest- or theremaybemorethanone “rightanswer.” (Haveyoueverheard theex- can get“therightanswer”tothe case—oftentimes,thereisno“rightanswer,” tion ofthatfromyourgrades,or anIQtest. They arenottesting toseeifyou you’re thesmartestpersoninyourclass—theycouldgetapretty goodindica- they’re testingforintheseexercises.Interviewersarenot testing toseeif The mostimportantthingtoknowasyouprepareforcaseinterviews iswhat What they’retesting for youtopracticeaswell.) atypical formatsandtests.(Two group-formatcasesareincludedinthisbook skills thatyou’lldevelopformoretypicalformats,excel atthesemore as longyou’reshowingthesamewonderfulanalyticaland interpersonal these firmsarestilllikelytestingthesamethingsasinastandardformat;so, he orshereactstoconstructivecriticism.Regardlessofwhattheformatis, feedback onhisorherperformanceoverthecourseofprocesstoseehow as apartofteam;otherfirmsaddaninterviewwherecandidateisgiven ample, somefirmsusegroupexercisestoassessacandidate’s abilitytowork the mixtogaugecandidates’ abilitiesinotheraspectsoffirmculture.Forex- the caseinterviewtodifferent formats,orhaveaddedtheirownelementsinto ognize thatsomefirmsdothesethingsalittledifferently. Somehaveadapted Having saidallthataboutatypicalinterviewformat,itisalsoimportanttorec- Other interviewformats the smalltwistsandturnsthateachofthesepartscantake. once youknowthatthisiswhatcangenerallyexpect,it’s easytopractice but thisbasicstructureformsthebackboneof30-to45-minutecase,and Each ofthesepartstothecasemightincludeatwist,different bitofanalysis, 3) A conclusioninwhichanintervieweewillbeaskedtosummarizethecase 2) Two tothreepiecesofanalysisthatwillhelpleadaresultthecase. At 1) An introductiontoaclient’s businessproblemorgeneralquestion,which what theyshoulddo. in threetofivesentences,includingarecommendationtheclientas of themwillrequireabitbrainstorming,oroptiongeneration. least oneoftheseendeavorswillhaveaquantitativeaspect,andusually the intervieweeisaskedtostructureanapproachto. LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. case. Your recommendationshould notbeconsideredaone-word “solution” cause ofthis,youshouldexpect tomakearecommendationattheendof with abusinessproblem,and specifically, counselthemon whattodo.Be- meetings—and airports—consultants areexpectedtoactuallyhelptheirclients Ability tosynthesizeandbedecisive. lope” calculationinfrontofaclient,they’dbecomfortabledoing so. numbers. This istoseethat ifthey’reaskedtodoasimple,“backoftheenve- do alittlemultiplicationanddivision,showthatthey’recomfortable with analysis inacaseinterview, theywillbeaskedtocalculateapercentageortwo, sis. While caseinterviewees won’t berequiredtodocomplicatedquantitative this, consultantshavetobecomfortablewithnumbersandquantitative analy- ing percentagesandROIs,gettingfromgrosstonetmargins. Becauseof working inExcel,analyzingfigures,completingregressionanalysis, calculat- guage ofbusinessisquantitative.Consultantsspendagood bit oftheirtime Comfort withquant. the finalresultofcase. the caseinterview—tonarrowthatlistofoptionsdowntoafewcouldbe multiple optionsandthenuseyourbusinesslogic—orsomeanalysisduring other waytolookatit?” What yourinterviewerwantsisforyoutogenerate will beasked:“Whatdoyouthinkisgoingonhere?”or“Canofan- You willlikelyhaveatleastacoupleofpointsinthecaseinterviewwhere you least significantabilityintermsofideageneration—duringacaseinterview. consultant’s process,itisimportant todemonstratecreativethinking—orat to what’s drivingabusinessproblem andcreativewaystoengageclientsina sultants havetogenerateideasonwherefindsourcesofdata,hypothesesas Creative thinking/brainstorming/“thinkingoutsidethebox.” tured andclear. tools (MECE,abc/123,etc.)inordertomakeallpartsoftheinterviewstruc- four Ps,thethreeCs,etc.),buttherearealsomoregenericframeworksand that applytospecificbusinessproblems(profitability=revenue-costs,the As partofpracticingcases,you’lllearntobecomfortablewithframeworks demonstrating clear, structuredthinking. problems. Becauseofthat,asubstantialpartthecaseinterviewisabout careful thoughtandanalysistobusinessexecutivesfacingcomplex Structured thinking. more adeptatanycaseinterview. be successfulatanycase,it’s easytopracticethoseskillsandmakeyourself analysis. Onceyourealizethatthosearethebasicskillshavetomaster thinking, comfortwithquantitativedata,andabilitytosynthesizedata Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting A lotofwhatconsultantsinvolvesprovidingstructured, Consultants areinthebusinessofbusiness,andlan- — within- In theend,afteralotofanalysis and LIBRARY CAREER Because con- Introduction 3 Customized for: Jessica ([email protected]) 4 Do’s andDon’tsintheCase Introduction Vault CaseInterviewPracticeGuide2:MoreInterviews excited tobeaconsultant. there, tearingthroughthecase,yourinterviewermaythinkthat youwon’t be knows? Butyourinterviewerthinksitis,andifyoudon’t seemexcitedtobe Whether ornotthecaseinterviewisaperfectreplicationof casework,who You should be enjoyingyourcaseinterview—itshouldn’t feelliketorture. Do beenthusiastic. terview—don’t expectyour interviewer todoso. sis andlearningsfortheirclients.Besuretodrivethecaseduring thecasein- information aboutthecase.Inreality, consultantsareexpectedtodriveanaly- potheses astowhat’s goingon. Too often,caseintervieweesexpecttobefed Lean forwardinyourseat. Ask questions ofyourinterviewer. Proposehy- Do drivethecase. Do’s strate inthecaseinterview. keep inmindaboutthesemore“softskills”orabilitiesthatyoushoulddemon- want youontheircaseteam. The followingaresome“Do’s andDon’ts” to interviewer determinewhetheryou’dbeagreatconsultant—andthey’d qualities likeenthusiasm,curiosity, proactivityintheconversationthathelpan case interviewandhavetheskillstobeagoodconsultant,therearesubjective skills thatthey’relookingforshowwhetherornotyou’vepreparedyour subjective abilitiesthatyourinterviewerislookingfor. While manyofthe case interview(structuredthinking,quantitativeabilities,etc.),therearemore Besides thespecific—andmaybeacademic—skillsthatthey’retestingforin mentioning furthersalesforthefirm!) work couldbedonetomitigatetheriskforclient.(That’s asubtlewayof major casepoints,makesarecommendation,andpointstothefactthatmore be a“data-driven”answerofcouplesentences,whichsummarizesthe the analysisandworkthatyou’vedonethroughoutcaseinterview. Itshould to thecase.Instead,itshouldbeyourbest-effort recommendationbasedon LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. slow down.Drawandwriteyour thoughtsonpaperinclearviewforyourin- out loud. Your interviewersneedtohearorseeyour thinkingtoevaluateit.So, demonstrating clear, structuredandcreativethinking,it’s importanttothink Because thecaseinterviewis notaboutgettingtherightanswer, but about Do thinkoutloud. gives youanyhintsthatshould. attention toyourinterviewerandcorrectcourseaccordingly ifheorshe it intheexpressionsontheirfacesandbodylanguage. Regardless,pay down it.Sometimes,they’llbeexplicitandtellyou;sometimes, youcansee the casesolutionandsteeryouawayfromwrongpathif youstarttogo for youifdon’t dowell. So,they’relikelytohelpyou,giveyouhints case interviewprocessisalmostasuncomfortablefortheinterviewers asitis Your interviewers wantyoutosucceed. They wantyoutodowell. The entire Do listentoyour interviewer’s answerstoquestions/hintsthe case. can “thinkinPowerPoint,”whichiswhateveryconsultantneedstodo. slides (withyourpaperinlandscapeposition),interviewerwillseethatyou notes alongtheway. Third, ifyoudesignyournotesinawaythatlookslike ings quickly, andyou’llhaveaneasiertimedoingthatifyou’vebeentaking at theendofcase,you’llbeaskedtosummarizeyourthoughtsandlearn- everything inyourhead—so,don’t putthatexpectationonyourself.Second, First, yourintervieweriscertainlynotexpecting(norrequesting)thatyoudo You’ll begivenalotofdataoverthecoursecaseinterview, sotakenotes. Do takenotes. in anairport. with whomthey’llhavefun,evenwhenweatherdelaysforcethemtobestuck lot oftimetogether, especiallywhentraveling,andtheywanttohirepeople want tobestuckwiththispersoninanairportIowa?”Consultantsspenda A lotofwhatyourinterviewerisalways testingistheairporttest:“Would I Do showalittlepersonalityandhavesomefun. effective workingonateam. laboratively, twotraitsthata consultant needstobeeffective intheirworkand case setting. Also, askingquestionsshowcuriosityandanabilitytoworkcol- ful tothecase,waitingforyouaskrightquestion,justasonehasina immediately. Your interviewermaybeholdingbackinformationthat’s help- A lotofcaseworkisaskingtherightquestions—notknowingallanswers Do askquestions. Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Introduction 5 Customized for: Jessica ([email protected]) 6 Introduction Vault CaseInterviewPracticeGuide2:MoreInterviews depth ofthinkingandsolidanalysis. Yes, you’ll probablybenervousduring You’re notbeingevaluatedonspeedofanalysis; you’rebeingevaluatedon No oneevergotaconsultingjob byfinishingacasefasterthaneveryoneelse. Don’t rush! effectively throughthecase. ible andresponsive(andabithumble)bychangingcourse andcontinuing mon hypothesiswrong!),butwhatyoushoulddoisshowthem thatyou’reflex- even beapartofthecasetoleadyoudosomeanalysisthat provesacom- their work. You maygodownthewrongpathduringcaseinterview(it be inlovewiththeirideas—instead,theyhavetoletthedataand analysisdrive analysis untilhegetsitright.Consultantsareexpectedtohave ideas,butnot the ego-lessconsultantthenhastocreateanotherhypothesisand dosomemore they’ve donesomeanalysiswheretheyprovetheirownhypothesis wrong—and Consultants havetochangecourseintheircaseworkallthetime—usually after Don’t beafraidtocorrect yourselfor changeyour mind. case. you needtomoveon,askforyourinterviewers’ blessingandcontinuewiththe data foryou.Iftheysayno,thenmakeareasonableassumptionthe But beforemakingassumptions,askyourinterviewersiftheyhaveanymore You willlikelyhavetoatleastsomedataasyouworkthroughthecase. and checkingwithyourinterviewerstoseeifit’s afairassumptionforthecase. Well, let’s rephrase:don’t makeassumptionswithoutmakingthemexplicit— Don’t makeassumptions. Don’ts ers, you’llbeabletoreadthemforcuesabouthowyou’redoinginthecase! any interview. Furthermore,bymaintainingeyecontactwithyourinterview- evaluating youonallthesameinterpersonalskillsthatyou’reevaluatedin Remember: thisisstillaconversationwithyourinterviewers,andtheyare get sointothecasethatyouforget allofyourwonderfulinterpersonalskills. While youareheretotackleacaseandworkthroughbusinessproblem,don’t Do maintaineyecontact. process outloud.) little mistakeyoumadeandhelptocorrectitisifaresharingyourthought logic, assumptionsormath,theonlywayyourinterviewerscanknowwhata terviewer tosee. Think outloud.(Furthermore,ifyoudomakeamistakein LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Interview Basic StructureoftheNon-CasePart sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. an appendix. that really“drill-down”oninterpersonalstoriesandquestions—is includedin A fulllistofquestionsthatyoucanexpect—andfollow-upforfirms A3) fewminutesattheendforinterviewee toasktheinterviewerquestions. 2) A fewinterpersonal/personalqualityquestions, wheretheintervieweetells 1) A resumewalk,wheretheintervieweraskshowinterviewee’s previous other interpersonalinterviews.Itgenerallyconsistsofthefollowingparts: The get-to-know-youpartoftheinterviewisstructuredsamewayasall 30- to45-minute“Getknowyou” twice! other later, andyoudon’t wanttolooklikeyoujusthadthesameconversation ers, besurethatyoutellthemdifferent stories,astheywillconferwitheach 30 minutesofinterpersonalinterviewing—andifyoudohavetwointerview- minute interviewbyoneinterviewer. Eitherway, youshouldplan foratleast tacked ontothecaseportionofinterview, oritwillbegivenafull30-to45- ther bedividedintotwo15-minuteportionsbydifferent interviewersand The interpersonal,orget-to-know-youpartofthecaseinterviewwilllikelyei- rush; so,makesureyouslowdown. for yourquantitativeanalysis. You’re morelikelytomakeamistakeifyou your frameworkforthecase,jotdownnotesorwritenumbers Take yourtime.Getcomfortablewith30secondsofsilenceasyousketchout your interview, whichwillmake youwanttorush;so,practiceslowingdown. a storythatdemonstrateshisorheranswertothequestion. experience hasledhimorhertothispoint Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Introduction 7 Customized for: Jessica ([email protected]) 8 Introduction Vault CaseInterviewPracticeGuide2:MoreInterviews homework onthefirmstotry discovertheirlittledifference andseewhich selves asdifferent fromeachother. Becauseofthis,youshoulddoyourown tural attributesoverlapwiththose ofotherfirms,theydoliketothinkthem- Each firmhasitsownsetofvalues, andwhilemanyofthesevaluescul- Fit withthefirm/interest inthefirm looking forinthispartoftheinterview. ing toomuchpersonality. It’s afinelinetowalk,butthat’s partofwhatthey’re at afewjokesoverdinner. Inotherwords,havesomepersonality, withouthav- be appropriateinallofyourcomments,whilealsoshowingthat youcanlaugh and relatetoCEOs,whilealsoshowingthatyouhaveabitof fun-lovingside; ancing actinyourget-to-know-youconversation:showthatyou canbeserious being completelycontradictory, thismeansyouneedtodothefollowingbal- some mightargue, asksyou toweartwoverydifferent hatsatonce. Without stuck inanairportwiththisperson? This isatwo-prongedpersonalitytestthat, trust thispersontodealeffectively withmyclients?,and2)doIwanttobe Interviewers areevaluatingyourpersonalityontwodimensions:1)wouldI Personality sultant theywantfortheirteam. were dedicatedandpulledacoupleall-nighters,becausethat’s thekindofcon- clubs—instead, pickonecluboractivitywhereyourosethroughtheranks, demonstrate youroverachievementinstories.Don’t justlistoff titlesin clients thatarespendingsomuchmoneyontheirservices.So,besureto want consultantswhowillworklate,gotheextramileandoverachievefor with acleartrackrecordofsubstantiveleadershipandachievement.Firms Most firmswanttohiretoptalentandare,therefore,lookingforcandidates Leadership andachievement that fitwiththevaluesoffirmandprofession. tively bykeepingallstoriestounderthreefiveminutes,andchoose ganization incollegeformewere:one…”),synthesizetheiranswerseffec- their interpersonalanswers(“Thethreekeylearningsfromstartinganewor- itself. Intervieweesthatdoreallywellintheinterpersonalinterviewstructure of thesethingsasthesameskillsthatthey’retestingforincaseinterview and leadershipskillsintheget-to-knowyouinterview. You’ll recognizemany ative thinking,abilitytosynthesize,problem-solvingskills,goodteamwork Generally, firmsarelookingfor intervieweestoshowstructuredthinking,cre- What they’retesting LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Interview Do’s andDon’tsoftheNon-CasePart sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. their recentcasework—theydon’t havetobethemostinsightful questionsin questions aboutthefirm, howtheychoseconsultingasacareer, about a bitself-absorbedifyouhadnothing toaskthemback.So,prepareacouple spent agoodamountoftimeasking youquestionsaboutyou—itwouldseem can dobothsidesofaconversation. Furthermore,yourinterviewerslikelyjust you’re acurious,inquisitiveperson;yourinterviewersalsowant toseethatyou disappoint thembyhavingnothingtoask. Your interviewerswanttoseethat view forquestions—inmanyways,it’s intervieweretiquettetodoso.Sodon’t Most allinterviewersleaveatleastfiveminutesoftimethe endoftheinter- Do havequestionstoask. part oftheinterview. and arelookingforyourabilitytotellstoriesconciselyeffectively inthis tations toclientsasstoriesofanalysisthatleadagivenrecommendation, viewees willgetthejob.Furthermore,consultantsoftenthink oftheirpresen- all theotherinterviewerssortingthroughcandidatesanddecidingwhichinter- that theywillrememberandbeabletotelllaterinthedaywhenthey’rewith end. You wantyour answerstobequick,interesting,insightfullittlestories People rememberstories. They rememberaconcisebeginning,middleand Do try“totellastory.” Do’s terview. view, whichwillreinforceyourdemonstratedconsultingskillsfromthecasein- some “Do’s andDon’ts” tokeepinmindaboutthenon-casepartofinter- person andoverall,well-roundedaconsultantyoucanbe. The followingare terview, thereareafewtipsthatwillhelpyoutoshowjusthowpersonable that they’relookingforyoutomentionintheget-to-know-youpartofin- Besides thespecificpersonalqualities,interpersonalskills,andachievements also makethemfeelliketheyworkateveryone’s favoritefirm. your interviewersthatyouhaveaparticularinterestintheirfirm,butitwill dedicated andcommittedtoonlyworkingattheirfirm.Itwillnotshow viewers—show thatyou’vedoneyourhomework;makeitclearyou’re fits yourpersonalitythebest. Then showoff yourknowledgetointer- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Introduction 9 Customized for: Jessica ([email protected]) 10 Practicing Interviewing Introduction Vault CaseInterviewPracticeGuide2:MoreInterviews self. Ifyoureallydowantto simulatethecaseinterviewexperiencetoits And intermsofspecificallyhow topracticecases,don’t practice thembyyour- terviewing themoreyoupractice. being consultantsthemorecases thattheydo,you’llbecomebetteratcasein- and you’llbecomeanexpertat cases.Inthewaythatconsultantsgetbetterat more typesofcases,industries,businessesandbusinessproblems you’llsee, tually makeyoubetteratthem. The moreofthemthatyouworkthrough,the Practicing caseswillnotonlymakeyoumorecomfortablewith cases,itwillac- Practicing cases,practicingmath swers toquestionshere. to reinforceyourinnateandpervasiveuseofstructuredthinkinginan- While thisistheinterpersonalpartofinterview, youshouldconstantlytry your answersverystructuredandclear—regardlessofwhatthequestionis. to dinnerandamovie.” There areverysimplewaysthatyoucanmakeallof Friday, Icanthinkofthreeoptions:1)gotoamovie,2)dinner, or3)go plans wereonaFridaynight? The secondconsultantanswers:“Well, forthis Have youeverheardthejokeaboutoneconsultantaskinganotherwhathis Don’t forgettobestructured, clear, andconciseinyour answers. want theirquestionsansweredandaclearanswerisrequired. first, andtomakeacleartransitionyourstory. The interviewersactuallydo for thispartoftheinterview. Butpleasebesuretoanswerthequestionathand stories thatshowyourpersonalqualitiesandachievementspracticedready question first.Besuretoanswerthequestion.Sure,haveyourfiveseven that showstheirweaknessbuthowthey’reworkingonitandneveranswerthe weaknesses?” andintervieweeswilllaunchontotheirpracticed,preparedstory Often, interviewerswillaskverypointedquestionslike:“Whatareyourbiggest Don’t forgettoanswer theactualquestionfirst! Don’ts be sincere,too. terested inhavingajobliketheoneyourinterviewershave,questionswill the world. You justneedtoasksomething—andhopefully, ifyoureallyarein- LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. skills.) you’ll looklikeinfrontofaclient,asmuchyourExcel or dataanalysis a top-tierconsultinginterview. (Remember: They’re evaluatingyouforwhat to-know-you interviewcanmakeorbreakyourchancesforthenextroundof skills showninthecase,it’s advisable topracticethispart,too,asasolidget- cause thenon-casepartofacaseinterviewissupposedtoreinforcemany warming upbeforegoingbackintotheinterviewingworld.Furthermore,be- views aswell.Everyonecangetalittlerustyandwouldbenefitfrom mended thatyouspendsometimepracticingthenon-casepartofcaseinter- haven’t interviewedinawhile(caseorotherwise),it’s recom- probably whereyoushouldspendamajorityofyourtime.However, ifyou You willspendamajorityofyourtimepracticingcaseinterviews—andthis is Practicing “non-case”partofinterviews back onthebicyclebeforeyourinterviewday. noon. You’ll find thatit’s likeridingabicycle,butyou’llbehappyyougot tle old-fashionedmultiplicationandlongdivisionforafewhoursoneafter- rusty. The bestremedyistotakeoutapenandwhitepaperpracticelit- third grade;so,yourskillsofdoingmathwithpenandpaperarelikelyalittle people preparingforinterviewshavenotdonemathwithoutacalculatorsince Finally, anothergoodthingto practiceisyourelementaryschoolmath.Most you don’t knowwellgivingyoucases. comfortable, youwon’t simulatetheexperienceofhavingacaseinterviewer you onlypracticecaseswithyourbestfriendswhomyou’relikelyvery better, havesomeonethatyoudon’t knowthatwellplayyourinterviewer. If fullest, havesomeoneelseplaytheinterviewerandgiveyoucases.Even Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Introduction 11 Customized for: Jessica ([email protected]) 12 Case InterviewCategories Introduction Vault CaseInterviewPracticeGuide2:MoreInterviews Wall Street Journal this, it’s alwaysgoodtobereadingthebusinesssectionofnewspaper or nance company)willalsobeof useasyouworkthroughthecase.Becauseof pharma/biotech, costsforthemanufacturing sector, riskandfinancingfor afi- thought astowhatmightdrive thatindustry(R&Dandmarketingfor industry analysiswithoutany specificknowledgeofthatindustry, alittle try analysiscase. And whileyoushoulddefinitelybeabletoworkthroughany tors, customers)arethemostcommonframeworksusedtoapproach anindus- part ofalarger case.Porter’s FiveForcesorthethreeCs(company, competi- Industry analysisisanotherverycommoncaseinterview, orjustacommon Industry analysis terview. background), amarketsizingexercisemightbetheentiremeat ofthecasein- a morejuniorcandidate(anundergraduate, orsomeonewithlittlebusiness such asanewproduct/marketentrycaseoranacquisitioncase.However, for MBA graduate),amarketsizingwill bejustthefirststepofamuchlarger case, For moreadvancedcaseinterviewees(aformerconsultantorbanker, oran a client’s penetrationofthatmarket isaswell. the nearfuture.Sometimes,amarketsizingcasewillinvolveestimatingwhat be better, and3)makeanestimateonhowthatmarketmightgrow/declinein ways, andaccountforwhytheanswersaredifferent andwhichanswermight in whichtosizethemarket,2)actualmarketoneortwoofthose Often, thesecaseswillaskyoutodoafewthings:1)proposenumerousways and practiced,butitisatypicalconsultingexerciseinmanycases. A marketsizingcasemaybeassimple asmanyguesstimatesthatyou’veseen Market sizing of thesetypesquestionsisincludedonpage177.) the casewithouthavingtopracticeawholecase.(Anappendixofexamples they’re agoodwaytopracticethethinkingskillsthatyouneedbefluentin and creativitywithdata. They tendtoberathersilly“sizing”questions,but case, inordertoassessanapplicant’s quantitativeabilities,structuredthinking These areshortmathproblemsthatsomeconsultingfirmsuse,insteadofa Guesstimates/brainteasers LIBRARY CAREER for theweeksbefore yourcaseinterviewssothat youhave © 2008Vault.com Inc. The Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Operations type ofcaseinterviewtopractice. Because itcombinessomanyframeworksandtypesofanalysis, it’s agreat acquisition/valuation oramarketingframeworkandideageneration attheend. combines alittlemarketsizinganalysis,industry andeitheran This isaverytypicalcaseinterview(andreal-lifeconsulting case). Itusually New product/marketentry step beforemakingarecommendationattheendofcase. Other thanthat,asimpleindustryanalysiswilllikelybetheonlyadditional ply (usinga10percentrateoveryears)islikelythehurdletothesecases. nance practicesatfirms.Gettingcomfortablewithdiscountingcashflowssim- finance, thosewithbusinessdegrees,orintervieweesapplyingtocorporatefi- This typeofcasewilllikelyonlybegiventocandidateswithbackgroundsin Acquisition/valuation be suretogetcomfortablewithothertypesofcasesandcasequestions. interview). So,afteryou’vepracticedafewoftheseandbecomecomfortable, they arerarelyseeninconsultingpractice(andthereforeusedlessan tice togetcomfortablestructuringacase,askingquestionsdata,etc.,but tions toyourinterviewergetmoredata.Profitabilitycasesaregoodprac- the pathofeithervolumemultipliedbyprice,orCOGs,andaseriesques- profit loss—oraskyourinterviewer, orflipacoin—andthenyou’reoff down you onlyneedtomakeaquickhypothesisaswhichsidemightbedrivingthe The easiestframeworktoapplythisis:Profits=Revenue-Costs. After that, ing decliningprofitability, andthey’vecometoushelpthemfigureoutwhy.” easiest frameworkatthebeginning. This caseusuallybegins:“Ourclientisfac- This islikelythemostcommonlypracticedtypeofcaseinterview, asithasthe Profitability business problemsinyourcaseinterviews. a littlemoregeneralbusinesssensebeforeyou’reconfrontedwithbunchof to suchafirm,it’s goodtopracticeatleastafewoperationscases. specialize inoperationsandsupply chainmanagement;so,ifyou’reapplying While operationscasestendto be fewandfarbetween,someconsultingfirms Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Introduction 13 Customized for: Jessica ([email protected]) 14 Introduction Vault CaseInterviewPracticeGuide2:MoreInterviews and curiosityinthecaseinterviewsetting.) gage yourinterviewersandshowoff yoursoftskillsofcreativity, flexibility interested intheworkofaconsultant,anditcanbegreatforumtoreallyen- Often, they’llshowyouactualdata.It’s agoodwaytoseeifyou’reactually view intotheworldofconsulting:yougettoseeanactualcaseanditsanswer. (Note: The coolthingaboutthistypeofcaseisthatyougetareal-lifewindow work here. what theclientthought,oriftherewasanyfollow-upcaseworkbecauseoftheir these typesofcaseinterviews,askyourinterviewershowtheprojectended, them assuch.Ifyoureallywanttoscorebonuspointsattheendofone fully engagingthem,astheyreallyare“theexpert”hereandyoushouldtreat more flexibleinredirectingthecoursethatyoutakeandmakesureyou’re more “skininthegame”onthisone.So,paycloseattentiontotheirhints,be have practiced,butyoushouldrecognizethatyourinterviewersmayabit mean thatyoushouldabandonallthegreatcaseinterviewingskills handle themselves—so,youshouldtrytodiscerntheiranswer. This doesnot to approachtheproblem—morethantheywouldinacasethatdidnot more ofanopinionaboutwhattherightanswerisinthiscaseandbestway add adosemoreofhumilitytotheentireaffair. Likely, theinterviewershave case interviewasaconversationandaskmorequestions.Maybeyouwould thinking andapproachthatyouwouldanyothercaseinterview, butviewthe of that.Ifthishappens,trytoapproachthecasewithsamesortstructured are currentlyworkingon,orhavejustfinished. They willusuallyinformyou Often, caseinterviewerswillcreateaonthespotaboutthatthey The casetheyareworkingonorjustfinished LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. there isnocleardistinctionbetweeninterviewingstylesatspecificfirms. ready toexpectanything;thereareplentyofconsultantswhoinsistthat case. However,itshouldgowithoutsayingthatintervieweesbe of thesearetheAmusementParkcaseandOrganicFast-FoodChain one ofwhichisquantitativewhiletheothersarequalitative.Examples two- tothree-pagecaseandseveralchartsanswerthreequestions, tor, atypicalfirstroundmayinvolve20to25minutesofreviewing ability togeneratenewideas(e.g.ProBonocase,page136).AtMoni- questions asthecaseinterviewprogresses,testingcreativityand terviewer maypushthecandidatetoanswermoreandspecific slides, asintheEyewearChaincase,page62.AndatMcKinsey,anin- interview mayrequiretheintervieweetoderiveinsightsfromaseriesof quick back-of-envelopecalculations(e.g.PetCocase,page132).ABain proactive inseekingrelevantdata,oftengivenverbally,andthenmake ple, aBCGcaseinterviewmayrequireanintervieweetobeparticularly leading firmstendtostickadistinctiveinterviewingstyle.Forexam- Finally, therearesomeseasonedconsultantswhobelievethatcertain may bearedherringplantedbyyourinterviewer. beware oftooreadilypigeonholingacaseasonedistinctcategory—it prepared foracasethatasksyoutotackleblendofframeworks.And While it’sgoodtofamiliarizeyourselfwithallofthesekindscases,be tioned categories,suchasaprofitabilitycasethatincludesmarketsizing. egory. Infact,somecasesincorporatetwoormoreoftheaforemen- come across,includingmanyinthisguide,donotfallneatlyintoonecat- It’s importanttonotethatalargepercentageofconsultingcasesyou’ll A NoteonCategorizing Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Introduction 15 Customized for: Jessica ([email protected]) GUIDE CAREER CASE INTERVIEW SAMPLE CASES PRACTICE GUIDE Customized for: Jessica ([email protected]) 18 LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Amusement ParkCase Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. of thethreelocations. days forateamof100workers toconstructandsetupthethemeparkinany able component. Your teamhaspainstakinglyprojected thatitwillrequire400 the timetakentobuildtheme park. Therefore, laborcosts arethemainvari- After leasingtheland,cost of buildingthethemeparkisentirelydrivenby a large pieceoflandinthefuture ifthethemeparkiscloseddown. Theme parksdonotbuythelandoutrightbecauseofriskin sellingoff such One ofthemaincostsfordevelopmentathemeparkis leasing theland. Cost ofthemeparkdevelopment than gettingmiredinthedetails. portant toconsiderthemostimportantcostandrevenuecomponents, rather data gatheringandanalysisprocess. Therefore, atthisstageofanalysis,itisim- as towhichisthemostprofitablesite,beforemovingforwardrecheck all theanalyzedinformationinasinglesettingtodevelopaninitialhypothesis pieces willdefinitelybemorerelevantthanothers. You decidetoshiftthrough Your experiencedteamhasprovidedyouwithalotofinformation,andsome mistake. fired formakingalessoptimaldecision,andyouvowednottorepeatthesame spent ondeterminingtherightsite. The lastbusinessdevelopmentdirectorwas Thrilly. Your experienceshavetaughtyounot to underestimatetheeffort andtime to ensuringthattheprojectsitewillbringingreatestpositivenetoutcomefor major costconsiderations,anddeterminingthefuturerevenuepotentialiscritical theme parksinatwo-hourdrivingradius.In are locations A, BandC. These areasarefreeofcompetitionfromsimilar your teamhasdeterminedthreesuitableareasforfutureconsideration. These is todeterminewheresitethelatestthemepark. After ayearofassessment, Thrilly hasover18themeparksalltheUnitedStates.Oneofyourtasks “Thrilly” specializinginthrillridesandtargeting kidsfromageeightto16. You arethebusinessdevelopmentdirectorforanationwidethemeparkcalled Situation minutes, youwillwalkthroughyoursolutionswiththeconsultant. You mayusethecalculator, paperandpenmadeavailabletoyou. After 20 Please readthefollowingsituationcarefullyandanswerthreequestions. Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- situating athemepark,thereare LIBRARY CAREER Sample Cases 19 Customized for: Jessica ([email protected]) 20 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews your experiences. piling thisinformation,soyouwillhavetoinferthecritical issuesbasedon operating ofathemepark.However, your teamhasnotgottenaroundcom- ate othernonmarketandnonfinancialissuesthatcomewiththe developingand Beyond theobviousfinancialcalculation,itwouldbealsonecessary toevalu- Other considerations gardless oftheseason. The ticketpriceforanadultis$40andtheachild$30,re- concessions isslightlydifferent basedontheirsocioeconomicstatus. once everyyear. Families’ averagespendinginthethemeparksonfoodand years, andfamilieswiththehighestsocioeconomicstatus(A)willvisit Thrilly come. Ontheaverage,familiesunderstatusBwillvisit Thrilly onceeverytwo Families understatusCwillnotvisit Thrilly duetotheirlackofdisposablein- Thrilly classifiedtherelevantpopulationunderthreesocioeconomicstatuses. with theirchildrentoandfromathemepark. around thethemepark,asfamiliesareunwillingtoendureafour-hour drive park. The populationtobeconsideredlieswithinatwo-hourdrivingradius number offamilieswhowillhavethedisposableincometovisittheme To estimatethenumberofvisitorseveryyear, itisimportanttoconsiderthe Revenue fromthemepark erating costs. ride frequencyisprojectedtobehigher, andthereforeresultinginhigherop- it isoperatingduetoweatherconditions.Duringthepeakseason(summer), the themepark. The operatingcostwillonlybeaffected bythenumberofdays After thethemeparkisbuilt,itwillbecriticaltoconsideroperatingcostof efit analysis. same regardlessofthelocation,sothisshouldnotbeafactorincost-ben- The costofacquiring,transportingandsettinguptheactualrideswillbe LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. and Fall) (Spring Off-Peak (Summer) High Peak (Winter) Closed High Peak Low Peak Number ofpeak(summer),off-peak (springandfall)closed(winter)days Exhibit 2: Weather conditionsandoperatingcost Total discountedleasingamountfor15years($000) Exhibit 1:LeasingandLabor Cost 7,500 190 200 85 90 26 32 A A Estimated laborcostperdayperson($) Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting Operating costperday($000) No. ofdays 8,200 198 195 90 80 24 33 B B — within- 8,400 200 LIBRARY CAREER 180 95 70 26 31 C C Sample Cases 21 Customized for: Jessica ([email protected]) 22 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Status C Status B Status A Status* A Status B ual (regardlessofwhetherchildoradult) ** Non-ticketsalesconsistofaveragefoodandconcessionsspend byeachindivid- across childrenandadults Note:*Assume thatthestatusisevenlydistributedas%ofaddressable population Socioeonomic statusofpopulationwithinatwo-hourradiuseachlocation Exhibit 3:Socioeconomicstatusoftargetedpopulation 350,000 children* 150,000 adults LIBRARY CAREER Non-ticket** spendperadultorchildbasedonstatus($) 20 50 39 10 Eligible populationwillingtovisitthemeparks A 866 320,000 visitors 180,000 adults 25 50 25 8 B 360,000 visitors 140,000 adults © 2008Vault.com Inc.

20 60 20

10 C % of eligible population* population* eligible of % Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Ticket Sales tive season per day*daysinrespec- Operating costs=Cost of operation of workers*No.days Labor costperday*No. Construction costs= year tomers whovisiteach Number ofStatusBcus- year tomers whovisiteach Number ofStatus A cus- Locations Leasing Cost Revenue calculation Cost calculation with thenecessarycalculations,usingcalculatoravailabletodoso. Which areawillyouchoosetosetupthethemepark?Pleasesupportyouranswers Questions Building thethemepark Annual operatingcostofthepark $34,000* 85=$7.98M $26,000 *190+ = $9.275M + (50,000+37,500)*$40 (105,000 +87,500)*$30 37,500 adults 150,000 *50%*0.5= 87,500 children 350,000 *50%*0.5= adults 150,000*30% =50,000 children 350,000*30% =105,000 $200 *100workers * 400days=$8M Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting $7.5M A Annual Revenue $7.722M *198+$40,000*80 = $34,000 $8.4M (45,000+45,000) *$40= (80,000+80,000) *$30+ adults 180,000*25%= 45,000 children 320,000*25% =80,000 45,000 adults 180,000*50%*0.5 = 80,000 children 320,000*50%*0.5 = — within- * 400=$7.8M $195 *100 $8.2M B *$40 =$8.2M (28,000+42,000) adults dren *$30+ (72,000+108,000) chil- * 95=$8.145M $32,000 *200+$38,000 42,000 adults 140,000*60%*0.5 = 108,000 children 360,000*60%*0.5 = adults 140,000*20% =28,000 children 360,000*20% =72,000 * 400=$7.2M LIBRARY CAREER $180*100 Sample Cases $8.4M C 23 Customized for: Jessica ([email protected]) 24 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Lease +Build Total BuildingCost= Operating Cost Total Profit=Revenue– the adverseimplicationoftheseincidents. park willadverselyaffect the numberofcustomers,soitiscriticaltomitigate light ofaccidentsinanyotherthemeparks. A majoraccidentinanytheme Another issueistocontinuallyassureparentsaboutthesafety ofrides,inthe neighbors todoso. may shrink,assomeresidentsboycottthethemeparkand encouragetheir duce thesenegativeeffects. Ifresidentsareirritated,thenthecustomerbase fic andnoisepollution. Thrilly mayhavetoco-investinsomeinitiativesre- clusters byworkingwithlocalofficials todeterminehowbestmanagetraf- It iscriticaltomanagepositiverelationshipswiththesurrounding residential into accountwhenoperatingthethemeparkatarea yousuggested? What are thetopnonfinancialor noneconomicconsiderations tobetaken These twodriversareimportantleversthataffect thenetprofitforeachlocation. location asitdirectlyaffects thebottomline. The otherkeydriveristhethemepark’s dailyoperatingcostsineachspecific as itdeterminesboththefrequencyofvisitsandamountnon-ticketspends. key driversisthesocioeconomicstatusofpopulationwithintwo-hourdrive, Given thatthenumberofadultsandchildrendonotdiffer significantly, oneofthe cluding buildingcost? What doyouthinkare thetopdriversinnetprofit ofeachlocation,ex- option financially. Based onthebuildingcostandnetprofit,locationCwillbemostattractive Final calculation LIBRARY CAREER $7.5M+$8M =$15.5M $12.775M-$7.98M = $4.795M $8.2M+$7.8M =$16M $10.9M-$7.722M = $3.178 $15.6M $8.4M+$7.2M = © 2008Vault.com Inc. $10M-$8.145M = $1.855 Customized for: Jessica ([email protected]) Bicycle ManufacturerCase Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. To determinewhathascausedoverall Suggested solutions • Itmanufacturesandsellsthreecategoriesofbicycles: The clientisamanufacturerofbicyclesandhasbeeninbusinessfor25years. • Case factsinitiallyofferedbytheinterviewer • Whatrecommendationsmightcorrectthesituation? • Whatisdrivingthedeclineinoverallprofits? Questions tobeansweredbycandidate • The clientprofitshavebeenerodingoverthepastfiveyears. Children’s marketshare hasincreasedfrom0percent to3percent. Mainstream marketsharehasincreased from0percentto5percent. Racing marketsharehasdecreased from60percentto30percent. Firm: over thepastfiveyears? Interviewee: ent sizeof$400million. billion. Children’s hasincreasedat3percentgrowthrateperyeartoitspres- stream hasincreasedat2percentgrowthrateperyeartoitspresent sizeof$1 Firm: past fiveyears? Interviewee: questions andanswersthatwouldbeprovidedinaninterview scenario. the pastfiveyears,duringwhichprofitabilityhasslipped. The followingare first understandwhathastranspiredineachofthethreeproductcategoriesover • Children’s bikes:Smaller, simplerversionsofitsmainstreambikesmade Mainstream bikes:Durable,butnot overly complicatedbikesforeveryday • Racing bikes:High-end,high-performancebikesforsophisticatedcyclists • for children riders Racing hasremainedconstantatitspresentsizeof$300million. Main- Was thereanychange in marketshareeachofthesesegments What isthemarketsizeofeachthreesegmentsover Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting profits todecreasethecandidatemust — within- LIBRARY CAREER Sample Cases 25 Customized for: Jessica ([email protected]) 26 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews • Thedeclineinprofitscanbe deduced asfollows: The client,withacommandingpositioninflatmarketsegment(racing),ex- • ing scenario: The aboveinformationshouldbeusedbythecandidatetoanalyze thefollow- year. Inallsegments,laborisanincreasingpercentageofthecosts. Firm: Overallcostshavebeenincreasingatafairlyheftyrateof10percent per of expenseschangedoverthepastfiveyears? Interviewee: Children’s: Labor=25percent,Material40Overhead35percent Mainstream: Labor=25percent,Material40Overhead35percent Racing: Labor=30percent,Material40Overheadpercent Firm: gories foreachproductsegment? Interviewee: The costsaredividedintothreecategories:labor, materialandoverhead. rate linesinthisfacilitytoproduceracing,mainstreamandchildren’s products. Firm: Theclienthasasinglemanufacturingandassemblyplant.Itsepa- Interviewee: Children’s: Cost=$200/unit,Profit =$50/unit Mainstream: Cost=$250/unit,Profit$75/unit Racing: Cost=$600/unit,Profit$300/unit Firm: each ofthethreesegments? Interviewee: than 10percentofthemarket. percent ofthemarket.Inchildren’s, therearemanycompetitors,nonewithmore mainstream, therearemanylarge competitors,noneofwhichholdsmorethan10 main competitorhasincreasedmarketsharefrom30percentto50percent.In Firm: What hashappenedtotheirmarketshareineachsegmentoverthepastfiveyears? Interviewee: Whoaretheclient’s majorcompetitorsineachmarketsegment? lucrative segment(racing). ingly createdanunfavorablemix, thusdecreasingthemarketshareinmost panded intonewsegments(mainstream andchildren’s). This movehasseem- In racing,thereisonemaincompetitorandahostofsmallfirms. The LIBRARY CAREER Has therebeenanyincreaseincostsovertheyear?mix What istheclient’s costingpolicy? Can Ihavethedetailsofyourclient’s margins forabicyclein Do wehavethecurrentbreakdownofcostsalongthesecate- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. cialty outletsafter thenewdistributionnetwork wasadopted? Interviewee: Firm: racing product,especiallyafter italtereditsdistributionnetwork? Interviewee: to havefailed. Firm: client’s racingsalesoccursinmassdistributorsanddiscountstores? Interviewee: Firm: different fromthespecialty stores forracingbikes? Interviewee: of mainstreamandchildren’s bikes foritsracingbikes. the competition.However, theclientalsobegantousedistributionnetwork sold exclusivelythroughsmall,specialtydealers. This remainsunchangedfor Firm: Yes. Previouslytheclientanditsmaincompetitorinracingsegment for yourclient’s racingproduct?Or foritsmaincompetitor’s racingproduct? Interviewee: Haveanysignificantchangestakenplaceinthedistributionnetwork Children’s: Massdistributorsanddiscount stores Mainstream: Massdistributorsanddiscountstores Racing: Smallspecialtydealers,massdistributorsanddiscountstores Firm: Interviewee: Whatisthecurrentdistributionnetworkforclient’s products? Firm: in yourclient’s racingproduct?Or initsmaincompetitor’s racingproduct? Interviewee: following questionscanbeaskedforfurtherprobing: To understandthedramaticdecreaseinmarketshareracingsegment, x $400million20percentchildren’s margin). margin) +(5percentx$1billion23mainstreammargin) +(3percent Profits today=$44million(=(30percentx$30033racing racing margin) Profits fiveyearsago=$60million(=60percentx$30033 No studieshavebeendone. Prices atthesestorestendtobe1520percentless. No. Effectively none. The attempttosellthroughthesedistributorsseems Any significantchangeintheclient’s relationshipwiththespe- Is thepricingpolicyofmassdistributorsanddiscountstores Has therebeenanyrecentstudyonbrandimageoftheclient’s Have therebeenanymajorchangesinproductqualityorprice After thechangeindistributionnetwork,whatpercentof Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 27 Customized for: Jessica ([email protected]) 28 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Firm: Interviewee: Firm: Interviewee: has beendecreasingsteadilyoverthelastseveralyears. Firm: the pastfiveyears? Interviewee: Firm: Interviewee: Whatistheaverageageofworkforce? Firm: Interviewee: ing overtheyears.Furtherquestionstouncovercostissueswouldinclude: It isalsoknownfromtheinitialdiscussionthatlaborcostshavebeenincreas- In addition,thepresenceofracingproductsindiscountoutletshasput • • As yourclientintroducedlowerend(mainstreamandchildren’s) products • There hasbeennosignificantchangeineitherqualityorprice(oranyother two questionsmoreconclusively, apossibleanalysiscanbederived. Although someanalysisand/orsurveyshouldbeperformedtoanswerthelast The nextstep Firm: sentially serveastheclient’s sales force. client hasnodirectsalesforceattheretailoutletsandspecialtyshopses- might betemptedtopushthecompetition’s product.Especiallysincethe works oftheracingsegment,therebycuttingtheirownprofits.Instead,they The specialtyshopsneedtonowlowerthepricecompetewithothernet- your historicracingdistributor(thespecialtyshops)inaprecariousposition. discount outlets,itsreputationseemedtohavebeencompromised. and begantopushitsracingbikesegmentsalesthroughmassdistributors not theproductthatisproblem,butratheritsimage. tangible factor)oftheclient’s racing productrelativetoitscompetition.Itis Yes. Fifty-two andclimbing. There isverylittleturnoverintheworkforce. Emergency repair. Yes. Again, noformalanalysishasbeenperformed. Presently theplantisproducingatabout80percentofcapacity. This LIBRARY CAREER What isthepresentthroughputrating?Howhasitchangedover Are theremanyinstancesofequipmentshutdowns? What isthetypicalreasonforequipment shutdown? Is theworkforceunionized? © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Issues toconsiderinthisapproach: Abandon themainstreamandchildren’s segmenttorecoverleadershipinthe • and recommended. The following aresomepossibilities: gle correctapproach. There are anumberofapproachesthatmightbeexplored In proposingrecommendationstoimprovetheclient’s situation,thereisnosin- The clienthasanagingworkforceandtheplantlagsbehindintermsoftech- • of theequationandwhylaborcostshavebeenonrise. The aboveinformationissufficient toaddsomeunderstandingthecostside Possible approaches differentiates themfromthecompetition.(Unfortunately, heorsheisright!) his/her opinionthatapproach,maintainingthe“humantouch,”iswhat and utilizetechnologytoimproveefficiency throughouttheindustry, butitis Firm: Theclienttellsyouthatthereisacontinuingmovementtoautomate and technology)reflectthatofitscompetition? Interviewee: generally doubledOEMrecommendations. It hasfollowedaphilosophyofmaximizingthelifeitsequipmentand Firm: the originalequipmentmanufacturer’s recommendations? Interviewee: edge ofseniortechnicians. Firm: client’s facility? Interviewee: greater laborhours(overtimetofixbrokenmachines). creased throughput,increasedlaborrates(wagesincreasewithseniority)and nology andinnovation. This hascontributedtoexcessivebreakdowns,de- lucrative andmoreprofitableracingsegment. • How willthismoveaffect• overallutilizationoftheoperating facilities? • Are therealternativeoutletstothespecialty shops,suchasInternetsales? • How badlydamagedistherelationship withthespecialtyoutlets? • What aretheexpectedgrowthrates of eachsegment? • How muchoftheracingsegmentis recoverable? The clientfeelsthatmostOEMrecommendationsareveryconservative. Preventive maintenanceisperformedinformallybasedontheknowl- How oftenhasequipmentbeenreplaced?Isthisconsistentwith Does thebasicapproachtomanufacturing(i.e.,mixoflabor Describe thepreventivemaintenanceprogramineffect atthe Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 29 Customized for: Jessica ([email protected]) 30 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews a candidate’s abilitytoworkcomfortablywiththequantitativeside ofthiscase siders bothrevenueandcostissues andhowtheseimpactprofit. Additionally, a logicalfashion.Itisimportant thatthecandidatepursueasolutioncon- would coveralloftheabovetopics, butratherworkthroughselectedtopicsin This casecanbelengthyandvery involved.Itisnotexpectedthatacandidate Key takeaways Issues tobeconsidered: Reducecoststhroughestablishingaformalpreventivemaintenanceprogram. • Issues tobeconsidered: • Reducecoststhroughautomationandinnovation. Issues toconsiderinthisapproach: Maintainthemainstreamandchildren’s segments,butselltheseunderadiffer- • the specialtyoutletsforracingsegment. ent name. This willmaintainthebrandimageofracingsegment.Revertto • How willtheunionizedworkforcerespond? • What technicalorsystemchangesarerequired? • What trainingisrequiredoftheworkforce? What analysiswillbeperformedtodetermine theappropriateamountof • • What organizational changeswill berequired? If layoffs arerequiredtoachievethebenefits,whatimpactwillthishave • • What impactwillthishaveontherequiredworkforcelevels? Are themainstreamandchildren’s• segmentspotentially“over-engineered?” • To whichlinesaretheseinvestmentsappropriate? • How will theseinvestmentsaffect throughput? • What aretheexpectedreturnsonthoseinvestments? • What aretherequiredinvestments? • What technologicalimprovementsaretobemade? What isdrivingthe buyinghabitsofthemainstreamandchildren’s• market? • What aretheexpectedgrowthratesforeachsegment? • What additionaladvertisingandpromotionalcostsmightbeincurred? • What istherelationshipstatuswithspecialtyoutlets? • Is theredemandamongthemassanddiscountdistributorsforbicycles PM? on laborrelations? under theclient’s name? LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) B2B FertilizerManufacturerCase Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. tributor, and it’s thinkingofbuyingafertilizer company. It’s hiredustotellit Interviewee: Firm: Interviewee: LetmejustmakesureIunderstand thecase. Breakdown ofsolution 2) Valuation ofthefertilizercompany, bothasastand-aloneunit andwiththe A1) standardthreeCsanalysisofwhetherornotthis is asmartacquisitionfor The acquisitiontarget companyisamidsizedfertilizercompany,• whichmar- The clientservesboththeB2BmarketandB2Cmarket,but B2Cmarket • • The clientisalarge farmequipmentmanufactureranddistributorbasedin Additional informationprovidedduringquestioning you valuehowmuchthatfertilizercompanyisworthtoourclient? two mainquestions:1)Shouldourclientbuythecompany?,and2)Howwould sidering whetherornotitshouldbuyaB2Bfertilizercompany. This casehas A large farmequipmentmanufactureranddistributorisourclient.Itcon- a fewamongmany. The candidatemaycomeupwithhisorherownideas. is important. The aboverecommendationsforimprovingprofitabilityarejust in ordertocomplete: dard acquisitioncasethatrequiresstructuringandanalysisof two mainparts over thelastfewdecades.ItsellsitsproductsonlyinU.S.Thisisastan- farming industry, whichitachievedbecausethatindustryhasconsolidated kets itsproductsintheB2Bmarket.Ithasa35percentmarketshare client hasexploitedforitslighterequipmentandproductlines. B2C markethasgrownintermsofhomegardeningequipment,whichour the U.S.hasdeclinedsignificantlyoverlastfewdecades.However, the has beendwindlingintermsoffarmequipment,asmom-and-popfarming the U.S.,butithasoperationsoverseasaswell. revenue andcostsynergies that couldbeachievedwiththeclient. the clientgivenmarketconditions. Sure. So, theclientisalarge farmequipmentmanufacturerand dis- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 31 Customized for: Jessica ([email protected]) 32 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews 3) Whatwouldthisacquisitiondofortheclient’s competitiveoutlook?Isthis What wouldthisacquisitiondofortheclient’s2) customerbase? Will afertilizer What wouldthisacquisitiondoforthecompany’s 1) brand,corecapabilities,prod- the companyintothreemainquestions: Interviewee: (A fewminutesgoby…) Firm: Interviewee: enough infoforyoutogetstarted? dated overthelastfewdecades.ItsellsitsproductsonlyinU.S.Isthat in thefarmingindustry, whichitachievedbecausethatindustryhasconsoli- that marketsitsproductsintheB2Bmarket.Ithasa35percentmarketshare Firm: and supplier? Interviewee: product lines. gardening equipment,whichourclienthasexploitedforitslighterequipmentand over thelastfewdecades.However, theB2Cmarkethasgrownintermsofhome farm equipment,asmom-and-popfarmingintheU.S.hasdeclinedsignificantly B2B marketandB2Cmarket,butthehasbeendwindlingintermsof based intheU.S.,butithasoperationsoverseasaswell. The clientservesboththe Firm: Interviewee: Firm: it shouldpurchasethecompanyfor. whether ornotthat’s therightthingtodostrategically, andtotellithowmuch with us? base growtheclient’s customerbaseortheamountcurrentcustomersspend uct lineoffering, operations, andshort-long-termmarketstrategy? competitive advantageoverthe competition? a necessaryacquisitiongiventhe competition,orwillthisgivetheclienta Actually, it’s not. The acquisition target isamidsizedfertilizercompany Sure. The clientisalarge farmequipmentmanufactureranddistributor That’s right.Doyouhaveanyquestionsbeforewegetstarted? Of course. Take yourtime.Justletmeknowwhenyou’reready. LIBRARY CAREER Yes. That’s great.CanIhaveafewminutestocollectmythoughts? I woulddividemyanalysisintowhetherornotitshouldevenbuy That’s great. And isthetarget alsoaB2BandB2Cmanufacturer Actually, canIknowalittlemore abouttheclient? © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. COMPETITORS CUSTOMERS table liketheonebelow. An experiencedintervieweecouldorganize histhoughtsandquestionsina COMPANY Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting • Is itacompetitive necessitytomakethis • Will thisacquisitiongivetheclienta Howwillthecompetitionreacttothis • • Istheacquisitionaffordabletoclientright • Howlongwillittaketofullyintergratethe • Doestheacquisitionaddtoclient’scorporate • Willthisacquisitionaddtotheclient’scapabilities • Willthisacquisitionaddtotheclient’scurrent • Does theacquisitiondetractfromclient’s • Will theacquisitionaddtoclient’scurrent now? Howwilltheacquisitionbefinanced? pressing mattersfortheclient? acquisition? WIllthisdetractfromanycurrently brand? Ordoesitdetractforsomereason? portfolio ofproducts? competitors havethattheclientdoesnot? acquisition? Whatkindsofbusinesslinesdo competitive advantageinthemarket? acquisition? current customerbaseforanyreason company’s customerbases? base? Orarethereredundanciesinthetwo — within- LIBRARY CAREER Sample Cases 33 Customized for: Jessica ([email protected]) 34 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Firm: Interviewee: it mighthelpgrowitsconsumer businesswithanexpandedproductline. it mighthelpgetaslightedge over itscompetitioninB2Bspaceandbecause ingly toitsconsumerbusinessforgrowth.Itlikesthisacquisition bothbecause consolidating, competitionhasgottenfierce. The clienthasbeguntoturnincreas- two othercompetitorsinthefarmequipmentmarket,andwith farmingindustry Firm: well ourclientisdoinginthefarmequipmentmarket—orconsumer market. well inthefertilizermarketwitha35percentshare,butIdon’t thinkIknowhow about thecompetitiveenvironment.Iknowthatfertilizercompany isdoing Interviewee: Um,well,unlessImissedsomething,I’mnotsureknowmuch tested forininterviews.) admit whattheydon’t knowtotheirindustry-expertclients;so,itisoftenaskill to say/admitwhenhe/shedoesn’t knowsomething tention, takegoodnotesandreview themquickly, and2) An interviewee’s ability (Here, theintervieweristestingtwothings:1) An interviewee’s abilitytopayat- tion—for thecross-sellingopportunities. What aboutintermsofcompetition? Firm: fertilizer company. start tosellmore—thatis,crossfertilizer—toitsconsumerbaseifitbuysthis tomers, maybeowningthetarget canhelpitgetthere. Also, maybetheclientcan pretty goodshare.Ifourclientdoesn’t havethatwithitsfarmingbusinesscus- company hadachieveda35percentmarketshareintheB2Bmarket—that’s a cantly intheconsumermarket.However, youalsomentionedthatthefertilizer I doubtthattheacquisitionwouldreallygrowclient’s customerbasesignifi- player andaB2Cplayer, whereasthefertilizercompanyisonlyaB2Bplayer. So, Interviewee: Well, ifIremembercorrectly, yousaidthattheclientisbothaB2B Firm: product lineandcapabilities. equipment andthetarget makesfertilizer. So,theacquisitionwouldaddtoits seems liketheacquisitionwouldaddtoitscapabilities. The clientmakesfarm Interviewee: even hypotheses,thatanswersomeofthosequestions? you knowabouttheclientandacquisition,dohaveanyanswers,or Firm: Actually, youdon’t knowmuchnow. Let’s getintothatabit. There areonly That’s right. That’s oneofthemainreasonsitwasconsideringthisacquisi- That’s great. That’s kindofhowweapproachedthecase.Givenwhat That’s right. What aboutintermsofcustomers? Now, whataboutthesecondquestionfromclient? LIBRARY CAREER Well, thatcertainlyexplainsthings. Well, intermsofthecompany, itscapabilitiesandbrand,it — consultants oftenhaveto © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Firm: buy yournewproducts. ucts intothesalescycle,andthen,you’reneversurethatyourcustomerswill It’s revenuesynergies thataremoreuncertain.Ittakeslongertogetnewprod- to laypeopleoff, butcostsynergies areeasytoseeandachieve. hurting thebusiness.Imean,itmaybepainfulforbusiness—it’s neverfun people callingonthesamefarmcustomer, it’s easytojustcutoneoutwithout Interviewee: interviewees, butveryappropriate forbusinessschoolinterviewees.) (This isanadvancedquestion—probably notappropriate forundergrad case achieve—or longestterm? Firm: (The relationship betweenthepiecesofvalueare illustratedinthetableonpage36.) up, that’s themaximumpricethat clientshouldpayfortheacquisition. the cross-sellingopportunitiesthatweweretalkingaboutearlier. Ifyoutotalthat value oftherevenuesynergies thattheclientcouldgetfromacquisition—that’s synergies thattheremightexistbetweentheclientandacquisition,3) The value ofthefertilizercompanyasastand-alonedivision,2) The valueofanycost Interviewee: (Few minutesgoby…) ahead andtakeafewminutesifyouneedit. Firm: Yes. Howwouldyougoaboutstructuringthatpartofthecase?Go Interviewee: That’s perfect.Now, whichofthosesynergies arethemostdifficult to That’s perfect. Well, costsynergies areeasiesttoachieve—ifthere aretwosales It seemsliketherearethreepiecesofvaluefortheclient:1) The Oh, right,howmuchshoulditpayforthisacquisition? Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 35 Customized for: Jessica ([email protected]) 36 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews • Net presentvalueof COMPANY ASA riod intothefuture appropriate timepe- quisition forsome the profitsofac- STAND-ALONE VALUE OFTHE whether ornotwe thinkthisacquisitionisagood idea—whatwouldyousay? porate developmentandstrategy attheclientsite.He’s anxiousto hearabout Firm: capture alittleover$10million inB2Crevenuesynergies. $40.5 million).Ifwethinkthat wecancapture25percent,thatmeans facturer is$40.5million(10percentof$454.5million; $45-4.5= markup onfertilizer, thenthatmeans the valueofthosesalestomanu- in fertilizer, thenthey’reselling$45million total.Ifretailershavea10percent Interviewee: these threenationalretailers,howmuchisthatworthtousin revenue? percent. Ifwethinktheclientcancapture25percentoffertilizer salesto lion eachinfertilizertoconsumers.Retailermargin onfertilizerisabout10 research onthesethreeretailersanddeterminedthattheyare selling$15mil- provement chainsintheU.S.asapartofitsB2Cbusiness. We’ve donesome know thatourclientsellsitslightfarmequipmenttothreenational homeim- Firm: UNIT That’s great.Now, let’s pretendthatyou’vejustrunintothehead of cor- Now, let’s lookatthoserevenuesynergies alittlemoreclosely. We LIBRARY CAREER Well, iftherearethree retailers,andeachisselling$15million + • Overlap insales • Overlap inmanufac- • Overlap inoverhead/

COMPANY ASA STAND-ALONE VALUE OFTHE porate branding force/marketing/cor- turing/operations expenses headquarters/general Cost-cutting, more

easily achieved synergies } UNIT + • Cross-selling oppor- • Cross-selling • Cross-selling oppor- • Cross-selling

achieve, longerterm COMPANY ASA tion customers ofacquisi- of theclienttoB2B equipment products tunities offarm ness customers consumer andbusi- products toclient’ tunities offertilizer Riskier synergies— STAND-ALONE VALUE OFTHE more difficultto

© 2008Vault.com Inc. } UNIT Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Chinese ChemicalMarketCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. his domesticpositionwillbethreatened byChina’s productionof chemical X? Firm: on thethreeconcernsequally. Interviewee: problems. whether itshouldenterChina. The CEOwantsaplantoapproachallthree mestic andexportmarket,thecompanyhasalwaysbeen wondering Firm: three concernsisthemostimportant? ical XinChina.Iwouldliketotakeastepbackunderstand whichofthe mestic andexportmarkets,alsowhetheritmakessenseto producechem- Interviewee: cost. Howwillyouapproachthisproblem? market toproducechemicalXtakeadvantageofthelowlaborandmaterial which istheU.S.Inaddition,CEOalsointerestedinenteringChina inant domesticmarketposition,andthecompany’s primaryexportmarket, the importofchemicalXintoBrazil,whichwillthreatencompany’s dom- creasing productionofchemicalXinChina.Specifically, heisconcernedabout range ofchemicals. The CEOofonethedivisionsisconcernedaboutin- Your clientisan Argentinean chemicalconglomeratethatproducesawide Firm: nizes howimportantthebottomlineis,anditwrapsupcasenicely.) the caseinterviewinhisorhersummary—itshowsthatintervieweerecog- (It’s importantthattheintervieweeuseanyquantitativeanalysisdoneduring that sideofthebusiness. enue synergies fromtheacquisitionalone,whichwouldbegreatgrowthfor of thefertilizersalesatthreenationalretailers,we’llsee$10millioninrev- of highgrowthforthecompany. Infact,ifwecanachievea25percentshare will allowustoreallygrowourconsumeroffering, whichneedstobeanarea ness customers,whoarebecomingatoughersegmenttowin,andbecauseit primarily becauseitwillhelpbolsterthecompany’s offering tofarmingbusi- Interviewee: Unfortunately, itsrevenueforchemicalXisevenlysplitbetweenthedo- That’s great. We’re donehere. Correct. Let’s focusonthefirstconcern.Howwillyoudetermine if The clientisconcernedaboutChina’s threattothecompany’s do- It isunfortunatewecannotprioritizeourapproach,soIwillfocus I wouldsaythatwebelievetheacquisitionisagoodidea, Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 37 Customized for: Jessica ([email protected]) 38 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews growth rate. sultancy, evenontheoverallchemicalproductionleveland theprojected Chinese state-ownedenterprise willspeaktoaninternationalmanagementcon- its growthrateinChina.Idonot thinktheseniormanagementteamfrom private sectorcompaniesabouttheoverallproductionlevelof chemicalXand Third, Iwillinterviewrelevantseniormanagersofthetopthree tofivelargest cross-check thedataonthesemarketresearchreports. Second, IwillinterviewtheheadofchemicalXassociation inChinato chemical Xfromstate-ownedenterprisesandprivateenterprises. companies inChinawhoactuallytrackboththeproductionsize andgrowthof First, Iwillbuyresearchreportsfrommultiplelocalprivate market research to lookintodifferent datasources totriangulatetheresult. Interviewee: Firm: demand, andthisinsightcanalsohelptoanswerthethirdconcern. ports willbedrivenbyhowmuchdomesticproductionexceeds mestic demandisalsoincreasing. Therefore, theamountandgrowthofex- chemical X.GiventhestrongeconomicgrowthofChina,Iwillassumethatdo- Interviewee: the U.S.sincebothofthemareexportingtheirproducts? termine ifChineseproducerwillthreatentheclient’s primaryexportmarketin Firm: South America shouldbereasonably ascostefficient asinChina. skilled laborascomparedtoChina,andsourcingforrawmaterialsthroughout Interviewee: and rawmaterialcostarecomparabletotheclient? Firm: chemical Xwillnotbeathreattotheclient’s domesticmarket. China aresignificantlycheaper, myinitialhypothesisisthatChineseproduced X ifitisexportedinto Argentina. Unlessthelaborandrawmaterialcostin will betransportationcostsandeventariffs fortheChineseproducedchemical raw materialsandoverheadsuchasthemanufacturingplant.Inaddition,there ers. The costofproducinganychemicalshouldbedistributedbetweenlabor, ing chemicalXwiththemoreefficient andlarger ChinesechemicalXproduc- Interviewee: Okay. Let’s moveontothesecondconcern.Howwillyoufurther de- How willyouassesstheproductionlevelinChina? That’s areasonablehypothesis. Why doyouthinkthatChineselabor LIBRARY CAREER Given thelackofhigh-qualitymarketdatainChina,itiscritical I willassesstheamountandgrowthofexportsoutChinafor I wouldliketobenchmarktheclient’s coststructureofproduc- In Argentina, Ibelievetheclientcanobtaincost-competitive © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Products Product A Product C Product B fairly aggressivegrowthrate. Interviewee: centage increasefortheChinesedomesticdemandofchemical X? Firm: 3,090+1,050+ 7,700=11,840 unitsofchemicalX. The demandfornextyearwillbe3,000*(1.03)+1,000*(1.05)+7,000*(1.1) = 3,000+1,000+7,000 =11,000 ofchemicalX. these threeproducts,whichwillbe15,000*0.2+10,000*0.1+20,000*0.35 = Interviewee: and nextyearbasedonthistable,assumingnosubstitutionforchemicalX? Firm: substitute tochemicalXfortheproductandrateofsubstitution. X andextrapolateaccordingly. Itisalsoimportanttodetermineiftherewillbea step willbetodeterminehowmuchperunitoftheproductrequirechemical producers todeterminethemarketsizeandgrowthofproduct. An additional sociation fortheproductandinterviewrelevantmanagementoftop duction ofchemicalXbyusingthelocalmarketresearchfirm,talkingtoas- Interviewee: mand andgrowthofthisproduct? Take theexampleofonethreeproducts.Howwillyouestimatede- Firm: need chemicalX? the downstreamdemandforchemicalX.CanIfindoutwhatproductswill Interviewee: demand levelinChina? Firm: Can youcalculateformethedemandchemicalXcurrentyear That seemstobereasonable.Howdoyouplanassessthedomestic Let’s assumethereareonlythreeproducts thatwillneedchemicalX. Thanks forwalkingmethroughyourcalculations. What istheper- Units (M) I willactuallyemploythesameprocessasdeterminingpro- In ordertoassessthedomesticdemand,itisimportant The currentdemandwillbesumoftheusagechemicalXby It is(11,840-11000)/11,000 =7.6percentincrease. This isa 20,000 10,000 15,000 Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting Chemical Xforeachproduct Per unitusageof — within- 0.35 0.1 0.2 LIBRARY CAREER rate Y-o-Y Sample Cases Growth 10% 5% 3% 39 Customized for: Jessica ([email protected]) 40 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews the domesticdemand inChinaiftheclientwent inalonewithoutaChinese ready exceededChinesedemand, itisunlikelyourclientwillbeabletosell Interviewee: how shouldwedoso? Firm: fore, theclientshoulddefinitelylookintoproducingchemical XinChina. come asignificantpricedifferentiation foracommoditizedproduct. There- differ significantly. An effective anddeepcustomerrelationship willnotover- price differentiation between theChineseproducersandclientshouldnever However, giventhatchemicalXappearsto beacommoditizedchemical,the U.S. customersrequire,anddelivertheexactamountaccordingly. client canbetterunderstandtheamountofeachbatchchemical Xthatthe its deliveryscheduleofchemicalXmeetsU.S.customers’ need.Second, the remaining competitiveinprice.First,theclientcanworkharder toensurethat Interviewee: Theclientcanworkondeepeningcustomerrelationshipswhile Firm: exporters ofchemicalXwilldefinitelyposeathreatinthenearfuture. But assumingthatthedifferentiation intransportationcostisminimal,theChinese Interviewee: ence? Firm: is furtherawayfromtheU.S.than Argentina. will beslightlyhigherfortheChineseproducerthanourclientbecauseChina ferential willbethetransportationcost.Iassumecost structure isrelativelycompetitiveandtheyfacethesametariffs, thekeydif- producers willthreatentheclient’s primaryexportmarket. Assuming theircost Interviewee: ical Xinthefuture,whatwillbenextstepouranalysis? chemical XinChina,andfoundthattherewillbeincreasingexportsofchem- Firm: Assumethatyouhavedeterminedboththeproductionanddemandof chase itdomestically. assumption thattheproducersinChinawhoneedchemicalXwillfirstpur- and thedemandgrowthrateforchemicalX. We needtoverifythereasonable evant productsforchemicalX,wewillbeabletoassessthedomesticdemand Interviewee: Firm: What willyouadvisetheclienttodothen? How shouldwedetermineifit is agoodideatoproduceinChina,and Okay. What’s next? That’s afairassumption.Doyou think thatisgoingtomakeadiffer- LIBRARY CAREER I thinkourclientcaninitiallyleverageonthecostdifferentiation. Given thatwehaveestablished thatChineseproductionhasal- Once wehaveanestimatedmarketsizeandgrowthfortherel- Let’s circlebacktothesecondconcern ofwhethertheChinese © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Chinese domestic demandforchemicalXhas beenmorethanfullymet,and Third, youmaynotwanttoenter ChinanowtoproducechemicalXbecausethe your U.S.customers. must alwaysensureyourprice isascompetitivetheChineseproducersfor less expensivethanyoursinthe U.S.marketmovingforward. Therefore, you tomers, andensuretheChineseproducedchemicalXwillnot besignificantly Argentina. However, youhavetodeepenyourrelationshipwithU.S.cus- it costsmoretotransportChinese-producedchemicalXthe U.S.thanfrom Second, youdonotfaceanimmediatethreattotheU.S.export marketbecause it toocostlytobecompetitive. The transportationandtariff fortheChinese-producedchemicalXwillmake rable productioncostofchemicalXbetweenyouandtheChinese producers. First, youdonotfaceathreattoyourdomesticmarketbecause ofthecompa- Interviewee: that Iamtheclient. Firm: build afactoryfocusingonratherdangeroussubstance-chemical. ity inobtainingthenecessarypermitsfromlocalChinesegovernmentto tory inChinatohavefullownership,butthekeyriskfactorisunfamiliar- If theclienthasmoretime,thenitmaywanttoconsiderbuildingitsownfac- share ofthejointventure. client’s unfamiliaritywithChina. So theclientshouldaimtohaveamajority that thejointventurepartnermaytakeunfairadvantageofclient,given ical Xforexportbackinto Argentina giventhetimepressure.Onekeyriskis partner withexistingproductionfacilitiesthatwillproducecost-effective chem- Interviewee: ket. What shouldtheclientdo? to produceinChinaandtransportback Argentina andtheU.S.exportmar- cantly inChinaascomparedto Argentina, andactuallymakesitcosteffective Firm: now. client continuetomonitorChina’s production,butnotenterintoChinaright China dropsignificantlyrelativeto Argentina, Iwouldrecommendthatour unless circumstancechangesandthecostofrawmaterialsorskilledlaborin into Argentina orSouth America becauseofthetransportationcost. Therefore, port market.ItisdefinitelynotagoodideatoproduceinChinaexportback partner. Another optionwouldbetoproduceinChinaforthesurrounding ex- Do youwanttoquicklysumupwhatwehavediscussed,andassume I agree.Let’s assumethattheraw materialcosthasdroppedsignifi- CEO, Iwouldliketoaddressyourthreeconcerns. The clientshouldconsiderlookingforajointventureChinese Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 41 Customized for: Jessica ([email protected]) 42 Coffee ChainMarketEntryCase Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews understand thecompetitivelandscape, intermsofhowcompetitiveorfrag- fee consumptionsoldbycoffee chainsinkey Asian cities.Second,I’dliketo areas. First,Iwanttounderstand themarketsizeandgrowthforpremiumcof- Interviewee: To answerthequestion,Iwouldliketolookintothreebroad sheet ofpaper.) (During thenext45seconds,youlayoutyourframeworkclearly onasingle Firm: tion. Will thatbeOKwithyou? Interviewee: couple ofyears. ties. Sheunderstandstheneedtoinvestforthisexpansioninto Asia inthefirst creasingly matured. The CEO islookingfornewgrowthrevenueopportuni- over thepasttwotothreeyearsascoffee chainmarketintheU.S.hasin- Firm: ask whytheCEOwantstoconsiderentering Asia. Interviewee: she agreesthatthismarketentrymakessense. Firm: Café shouldenteroneofthe Asian cities,and,ifso,howitshoulddoso? Interviewee: but isunsureifitmakessensetodoso. pursue revenuegrowth,withthelonger-term planofenteringother Asian cities, California verywell. The CEOisnowconsideringenteringan Asian cityto West CoastoftheU.S.,andhassuccessfullyserved Asian populationin erates coffee storeswithaverysimilarformattoStarbucks.Itoriginatedonthe revenue of$500million,andhasnointernationalpresence.SunshineCaféop- Sunshine Caféisthefifth-largest coffee chainintheUnited States,withannual quickly. partner inChinatoleverageonthemorecosteffective productionprocess fective toproduceinChina,thenitisimperativeconsiderajointventure pared toproductionin Argentina. That said,ifitbecomesmuchmorecostef- there isnocostadvantageforgoingtoChinaproducechemicalXascom- Yes, andmakesureyoucanprovideapreliminaryplanfortheCEOif Sure. That’s agreatquestion.SunshineCafé hasexperiencedflatrevenue LIBRARY CAREER I wouldliketoclarifythatthekeyquestioniswhetherSunshine Before Ijumpintothecase,wouldliketotakeastepbackand Let metakeaminutetolayouthowIwillapproachthisques- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. are regularcustomers,and75percent arejustimpulsecustomers. tomers. Outofthe1.2millionpotential customers,Iassumearound25percent not buycoffee fromcoffee chains,soweareleftwith1.2millionpotentialcus- lion isaround2.4million. Assume that50percentofthiscustomer basewill 35 percentbasedonalinearage assumption. Thirty-five percent ofsevenmil- potential customerbase,basedonagegroup,is(40-16)/70= which isaround fee chain,andtheaveragelifeexpectancyinHongKongis70. Therefore, our Second, assumethatindividualsfromages16to40willbuycoffee fromacof- tomers willspend$200/yearand$40/yearrespectively. coffee costsaweightedaverage of$2. Therefore, regularandimpulsecus- which Iwillrounddownto20cups/impulsecustomerayear. Assume acupof impulse drinkerwouldmaybebuyittwiceamonth,whichis 24cupsayear, 96 timesayear. Let’s roundthatupto100cups/regularcustomerayear. An a coffee chainaroundtwice a week,whichiseighttimesmonth,andaround for coffee fromcoffee chains.Let’s assumearegulardrinkerwouldbuyfrom First, Iwanttodeterminehowmuchregularandimpulsecustomerswillspend culations onpaper. Interviewee: lation ofsevenmillion? ing ofthepremiumcoffee chaindrinkingmarketinHongKongwithapopu- Firm: vestors. Sydney seemtobethelarger, wealthierandfriendliercitiesforforeign in- understanding of Asia, Tokyo, Seoul,HongKong,Shanghai,Singaporeand preferable tochoosecitieswhereforeigninvestorsarewelcome.Basedonmy coffee atapremium. Also, giventhatwehavenopresencein Asia, itwouldbe like tofocuson Asian citieswhere therearesufficient populationstopurchase Interviewee: Firm: tractive markets? coffee chains.Dowehaveanyinformationonwhichmightbethemostat- look atthepotentialmarketsizeandgrowthforcoffee consumptionsoldby Interviewee: Firm: ability ofSunshineCafétopursueinternationalopportunities. mented eachofthecities’ marketis. Third, Iwanttohavemoredetailsonthe This approachseemsreasonable. Which areadoyouwanttofocuson? What doyouthink? That’s agoodfirststab.Inthiscase, doyouminddoingamarketsiz- I willuseabottomupapproach,andshowmythoughtscal- Given thatourcoffee isgoingtobesoldatapremium,Iwould To betterunderstandwhich Asian citiestochoose,weshould Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 43 Customized for: Jessica ([email protected]) 44 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews a seriousthreattothem. resources tobidupretaillocations iftheyperceivethatSunshineCaféwillbe better differentiate ourselves. The dominantplayerswillhavegreaterfinancial ket, itmaybedifficult forSunshineCafétopenetrateHong Kong unlesswecan locations. Ifthereareoneortwomajorcoffee chainsthatdominatethemar- Western influence,Iassume thattherearecoffee chainsinallattractiveretail the HongKongcoffee chain market.Beingadevelopedcitywithsignificant Interviewee: competitive landscape? Hong Kongmarketfortheremainingportionofthisdiscussion. What aboutthe Firm: to suggestapositivegrowthrate. customers whowillpurchasemorecoffee. HongKonghasthesetwodrivers to many Asians, andmoredeveloped citieswouldhaveagreaternumberof influence. Buyingexpensive$2coffee fromcoffee chains isa Western concept coffee andthefrequencyofpurchase. The secondisthe uptakeof“Western” which willdrivethepercentageofpopulationabletopurchasepremium Interviewee: What doyouthinkarethekeydriversformarketgrowthcities? has areasonablemarketsizeandgrowthrateascomparedtoother Asian cities. Firm: Good. A preliminarymarketsizingestimationshowsthatHongKong relatively attractivemarkettoenter. so thenumbermaybelowerfornon-U.S.stores.HongKongappearstoa store isaround$640,000.However, thisnumberincludesmainlyU.S.stores, Interviewee: Assuming$8billionand12,500stores,theaveragerevenueper stores in2006. Firm: ical Starbucksstore? it willearnrevenueof$500,000to$1million.Howdoesthatcompareatyp- Interviewee: Firm: $100 million. million (900K*$40)ayear. The HongKongmarketis$96millionoraround (300K*$200) ayearandthe900,000impulsecustomerswillspendupto$36 The 300,000regularcustomerswillthereforespendupto$60million These arereasonableassumptions. Therefore, let’s focusonentering the Great question.Starbucksreportedrevenueof$7.8billionwith12,440 Good. DoyouthinktheHongKongmarketisattractivethen? LIBRARY CAREER Even ifSunshineCafécanobtain0.5to1percentofthemarket, We needtounderstand thesaturationandconcentrationlevelof There aretwodrivers. The firstisthedisposableincomelevel, © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. flagship store,andmoveonfrom there. Shanghai andSingapore,leveraging onwhatthey’velearnedfromoperatingthe After thefirstsixmonths,management shouldconsideropeningstoresin months, assumingtheflagshipstore isprojectedtogenerateareasonablereturn. erating in Asia, andaimtoopenasecondstoreinHongKong withinsix The internationalmanagementmustbeabletoquicklylearnthe nuancesofop- Hong Kong. supplier ofcoffee beansata competitive pricerelativetoothercoffee chainsin Kong market. To becost-effective, SunshineCafémustprocureacomparable Asian-Americans onthe West Coast,butmodifiedaccordinglyfortheHong ity coffee. The storemusthavethesamefeaturesthatmadeitattractiveto must obtainagoodretaillocationinhightraffic areaandensurehigh-qual- ing aflagshipstore,duetotheattractivenessofmarket. SunshineCafé Interviewee: SunshineCaféshouldfirstentertheHongKongmarketbyopen- (Take aminutetothinkoveryourresponse.) Firm: mendations. MayIhaveaminutetocollectmythoughts? Interviewee: tional market. Firm: new markets? throughout theU.S.,theirmanagementteamhasrecentexperienceinentering of theframework,canIassumethatsincetheyhavebeenexpanding gain afootholdintheHongKongmarket.Goingbacktothirdbroadarea Interviewee: on itslocation,butthequalityofcoffee isconsistentlyhighacrossallitsstores. it serves. The individualcafé’s décoris,therefore,slightlydifferentiated based the localcrowd,cafédecoratesandplaysmusictargeted tothelocalcrowds for mobilephonesandacomprehensivedeliveryservicetooffices. To attract shine Caféprovidesmoreelectricaloutletsforlaptopusers,universalchargers Firm: help SunshineCafésuccessfullypenetrateHongKong? company hasservedthe Asian populationwellinCaliforniathatcanactually Interviewee: atively fragmentedwithoutanydominantplayers. Firm: The coffee chainmarketinHongKongissaturatedbuttherel- Sure. To attracttheprofessionalswhoareitsmain,regularcustomers,Sun- Yes, themanagementteamisconfidentaboutgoingintointerna- That’s goodtoknow. Canyoushareanyinsightsintohowthe Given thisdifferentiation, SunshineCaféwilllikelybeableto I thinkhavesufficient informationtoprovidesomerecom- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 45 Customized for: Jessica ([email protected]) 46 Consumer ProductsGrowthStrategyCase Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews one totwoyears. retail segmentisbecomingmore attractiveinrecenttimes,especiallythelast Firm: Interviewee: scenario. The followingarequestionsandanswersthatwouldbeprovided inaninterview livery mechanismforthecompany. customers, aswellpotentialtoseeiftheInternet isaviablede- tions canalsoaidthecandidatetogetabettersenseforcompany’s current isting operationsofthecompanyanditsdistributionnetworks. Someques- Before suggestinganyaction,thecandidatemustattempttounderstand theex- itability. the Internetasadistributionchannelandotheristoincrease salesandprof- The candidatehastwopartstoaddressinthiscase.Oneiswhetherintroduce Suggested solutions • What issueswouldyouconsider? • What stepswouldyouundertake? Questions tobeansweredbycandidate • The client’s goalistodouble totalsalesandprofitsinlessthanthreetofive • TheclientalsowantstointroducetheInternetasadistributionchannel. • The clientdesirestosubstantiallyincreasethesizeofitsoperations. • The clientisalarge consumerproductscompany. Case factsinitiallyofferedbytheinterviewer to alleviatetherisk. investor-friendly citiessuchasHongKong,SingaporeandShanghaiwillhelp with thedifferent governments,andchoosingtoopenstoresinitiallyinforeign The keyriskfactorinopeningstores Asia istheneedtolearnhowdeal years. The clientisaretailerandwholesaler forwhitegoodappliances. The LIBRARY CAREER What isthecurrent“Value Chain”oftheclient? © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Interviewee: wholesale market. smaller players. Three ofthemoperatejustliketheclient, bothinretailand Firm: Currentcompetitionincludesfourleadingplayersandnumerous other Interviewee: The Internetispopularonlyinthewholesalesegment. ket recentlyinthetarget region withInternetshoppinganddeliveryservices. the traditionalmarket. The second isapureonlineplayerwhoenteredthemar- have alreadyenteredthisnewmarketplaceistheclient’s primarycompetitorin ping business,andarerapidlygainingmarketshare.Oneofthe companiesthat Firm: tail market? Interviewee: rectly fromthewarehouse. Firm: Interviewee: industry norms. prices downconsiderably. The client’s margins arefoundtobeconsistentwith it doeshaveanimpactonthebottomlineifanyofmajorplayersbring Firm: effect beonsalesandprofitsifwesimplyreducedpricesormargins? Interviewee: client’s revenueisroughlyevenly divided amongallthreemarketsegments. market segmentsarerefrigerators,washingmachinesanddishwashers. The Firm: Interviewee: Firm: client isoperating? Interviewee: Firm: the client’s marketsegment?Inretailorwholesale(i.e.,B2BB2C)? Interviewee: The clienthassixretailshopsandthewholesalemarketiscateredtodi- Fluctuation inpricesdoesnotaffect competitioninamajorway, though In theretailmarket,twocompetitorshaveemerged intheInternetshop- The Internetisgainingpopularityintheretailsegmentonly. Current marketsize:$2billion,client’s share:15percent. Client hasthreemarketsegmentsthatoperateasprofitcenters. The What isthecurrentdistributionnetworkundertakenbyclient? How isthecompetitionadaptingtoInternettechnologyinre- What isthecompetitivenatureofindustry? What wouldthe What isthecurrentmarketsizeofretailinwhich Who aretheclient’s majorcompetitorsinthismarket? Can youtellmethemarketshare oftheseplayers? How isthemarketsegmentedwithinclient’s operations? Is theInternet,asadistributionchannel,alreadyoperationalin Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 47 Customized for: Jessica ([email protected]) 48 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews • The competitionhasalreadyshown awillingnesstoinvestinthemarket,and • • Itscustomersarehigh-potential Internetusers. • Given themarketattractivenessforInternetorders,clientwould bere- the gatheredinformationandfollowingcanbeinferred. A quickthreeCs Analysis maybeused(company, customer, competition)from Possible steps/analysisregarding theInternetasadistributionnetwork ing. Firm: trained tohandledeliverytasksassociatedwiththeInternet? Interviewee: livery system. Firm: ternet market? company’s distributioncapabilities? Specifically, isitabletoaddress theIn- uisite skillstoaddresstheInternetuser?Doyouhaveanyinformationon better understandarethecompany’s corecompetencies—doesithavethereq- prepared toputtheiroperationsontheInternet. The centralissuesI’dliketo Interviewee: is alsogrowing. net usersisgrowingrapidlyandthepercentageofhomeswithInternetaccess middle class. As farasthemarket isconcerned,onlineshoppingamongInter- Firm: elaborate onthegrowthprospectsforthismarket? of anInternet-basedsystemareuppermiddleclass.Canyouconfirmthisand Interviewee: Firm: company? ing retailmarkettoseeiftheInternetisaviabledeliverymechanismfor Interviewee: year. The otherthreehaveapproximately20percentmarketshare. Firm: sales) isgrowingthefastest. the competitorwithnostores in theregion(i.e.,totallyreliantonInternet miss topassupthisopportunity. The currentemployeescannotperformthesetaskswithoutmore train- The clientservesprimarilyuppermiddle-classcustomers. Your guessiscorrect.UsersoftheInternetsystemaretypicallyupper The newonlineplayerhascaptured8percentofthemarketinlast The client’s currentdistributionfacilities arenotadequateforthede- LIBRARY CAREER I’d liketonowfocusonourclient.Clearlynotallcompaniesare Can youtellmealittleabouttheclient’s customersintheexist- That’s importanttoknow. Iwouldguessthatprospectiveusers How aboutthecompany’s employees? Are theysufficiently © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • Thatsaid,thecompanymustbewillingtoinvestinthismarketsucceed. Firm: Interviewee: Whatpotentialisthereforexpansionbyacquisition? Firm: sion? Interviewee: years, thefollowingprobing canbedone Regarding theclient’s goaltodoublesalesandprofits inthenextthree in theclient’s areaof operation. Firm: graphical areas? Interviewee: Firm: ment? Interviewee: the marketshare. Firm: Interviewee: Firm: market? Interviewee: and theycontrolabout20percentofthemarketshare. The clientisconsideringacquiringasmallretailfirminthemarket. The target firmhasthreestoresandthesecatertothe sectorsnot The clientisamarketleaderinthatsegment,controlling40percent of As mentionedearlier, thatarequiteafewsmallplayersinthismarket No. No. • Finally, itmustspendenoughmoneytocross-trainitsemployeesso Next, itmustdevelop aninventorymanagementsystemsothatitcan • Further analysismustbedoneastowhetheritshouldimproveitscur- • • First,itmustimproveitsdistributioncapabilities. formed. that tasksassociatedwithInternetdeliverycanbeeffectively per- dering andwheretheproductisdelivered(Internetvs.traditional). effectively trackwhatitordersfromsuppliers,customersareor- voted totheInternetmarket. rent operationsordevelopastand-alonecapabilityexclusivelyde- Any insightsonthecompetitivescenarioofwholesalemarket? Has theclientresearchedanytarget companiesinthewholesale Do thetarget companyandtheclientcompeteinsame geo- Has theclientalreadyconsideredanyplansformarketexpan- Is theclientlookingintoexpandingitsoperationsinthatseg- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 49 Customized for: Jessica ([email protected]) 50 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews • Beactiveintheretailmarket using bothbrickandmortarInternetchan- • To sellnewproductstocustomersbymeansofacquiring thetarget firm. Possible recommendations reach oftheclient. firm andtheclient’s operations,andtheacquisitionwillincreasemarket diversification throughacquisition.Sincethereissynergy betweenthetarget The clientshouldthenconsiderthepotentialforincreasingsales bymeansof form ofdiversificationcouldhelpachievethecompanygoals. In thiscase,itturnedoutthatonlysellingnewproductstocustomers viasome The suitabilityoftheseoptionswillagaindependontheparticular environment. This leavesonlysalesincreases,whichcouldbeachievedby: ticularly ifthecompanyisoperatinginamoderatelycompetitiveenvironment. costs representsafeasiblemethodbywhichtodoublesalesandprofits,par- dustry norms,itwouldseemunlikelythateitherincreasingpricesorcutting However, giventhatthecompany’s margins arefoundtobeconsistentwithin- A businesscanincreaseprofitsin three ways: Possible analysisfor marketexpansion Firm: Interviewee: Doesthecompanyhavefinancialcapability? Firm: for Internetsales? Interviewee: and isoftenthepreferredsupplierduetoitscustomerresponsiveness. Firm: Beingasmallerfirm,ithasstrongcontactswithmanylocalcustomers, Interviewee: Howstrongisthetarget firm’s presenceinthelocalmarket? nels ofdistribution. The clienthasthefinancialcapabilitytofinanceacquisitioninternally. No researchhasbeendoneonthat. • Sellingnewproductstocustomers • Sellingcurrentproductstonewcustomers • Sellingnewproductstocurrentcustomers • Sellingmoreofthecurrentproductstocustomers 3. Decreasingcosts 2. Increasingprices 1. Increasingsales LIBRARY CAREER Does thepotentialtarget firmhaveanytechnologicalcapability © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Credit CardCompanyRevenueGrowthCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • Credit cardshavebeenaroundsincethe1950s, buttheindustryreallytookoff • Thebusinessmodelforthecreditcardisasfollows: The company The clientisalarge financialservicesprovider,• butthemajority ofitsrevenue Additional informationprovidedduringquestioning its revenuegrowthtogetitback10percentinthenextcoupleyears. and $18billionthispastyear. Ithas hiredustohelpdevelopideasjumpstart been less.Forexample,theclienthadarevenueof$17billiontwoyearsago years. Itusedtohaveover10percentannualgrowth,andinrecentyearsit’s A leadingcreditcardcompanyhas seenitsrevenuegrowthdeclineinrecent The candidatemaycomeupwithhisorherownideas. growth prospectsandpursuingtheInternetchannelarejustafewamongmany. distribution channel. The abovesuggestedrecommendationsforimproving that isholistic,andunderstandthecompletenatureofInternetasaviable topics inalogicalfashion.Itisimportantthatthecandidatepursuesolution didate wouldcoveralloftheabovetopics,butratherworkthroughselected that areexpectedtobesolvedbythecandidate.Itisnotacan- This casecanprovetobelengthyandveryinvolvedgiventhetwocomponents Key takeaways Continue operationsinthewholesalemarket,whichclienthasastrong • • Eliminatecannibalizationbyfocusingondistinctproductsforeachchannel. in theU.S.1980sandhas continuedtoexpandglobally. This casewill machine andbasicservicingof themerchants’ accounts. from merchantsforthetelecom charges fortransactions,rental oftheswipe all purchasesmadewiththecard frommerchantsandaflatfeeof$30/month chants whoacceptthecard. This creditcardcompanytakes3to5percentof holders whocarryabalancefrommonthtomonth,and2)revenue frommer- makes moneyfromtwosources:1)revenueinterestpayments fromcard- ness loancompany. agement firm,aprivatewealthmanagementadvisoryfirmand asmallbusi- comes fromitscreditcardbusiness.Itsotherbusinessesinclude anassetman- presence. Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 51 Customized for: Jessica ([email protected]) 52 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Interviewee: about theindustryjusttogeta sense ofthebigpicture. about thecreditcardbusiness. Let’s startwithacoupleofquick questions companies. Buttechnically, itisrevenue.So,youseemtoknowagoodamount equipment, operationsandservicing—so, it’s kindofawashforthecreditcard Firm: Yes, that’s right.Merchantsalsopayamonthly feefortransaction charges. ple whohavecreditcardsandfrommerchants,assomesortof percentage ofthe derstanding isthatthosefirmsmaketheirmoneybothfromtheinterest paidbypeo- Interviewee: Firm: next twoyears.Isthatcorrect? in recentyears,andit’s lookingfor afewgoodideastohelpjumpstartitinthe The clientisalarge creditcardcompany. Ithasseenitsrevenuegrowthdecline Interviewee: Firm: Breakdown ofsolution will makesurethattheyunderstandthebusinessmodel. holders andmerchants).Iftheintervieweedoesnotprobethis,interviewer ness modelandthattherearetwosourcesofrevenueforthecompany(card- It’s importantthattheinterviewee understand thecreditcardcompanybusi- pieces ofquantitativeanalysisdoesdrivethefinal“answer”tocase. ity (andthereareafewnumberstestssprinkledthroughout),butoneofthemain the 4Ps. There arenumbersthrownintothecasemainlytotestquantitativeabil- product introduction. This caseisbestsolvedusingthemarketingframeworkof theinitialquestioning,thisreallyturnsintoamarketingcaseaboutnew After general businesssenseandcomforttalkingaboutissues. good exampleofhowaninterviewermighttesttoseeifacandidatehas a caseinterview. This beginningpartmaythrowanintervieweeoff, butit’s a basic businesssenseorinstincts,thenmovesintothemoretypicalstructureof This casebeginswithsomeinterviewerquestionsthattesttheinterviewee’s ing quicklyfromyeartoyear. focus ontheU.S.marketonly, as internationally, theclient’s revenueisstillgrow- Yes, that’s right. So, first,doyouhaveanyquestions? LIBRARY CAREER Also, I’mnotthatfamiliarwiththecreditcardbusiness,butmyun- Okay. Sure. Iwanttojustbecertainthatunderstandtheproblem. © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Young, fast-growingindustry Undifferentiated, commodity what youknow, what’s beentheir recentyear-over-year growthinrevenue? go backtotheoriginalquestion. The client’s revenuegrowthhasslowed.From types ofproducts.Okay, well,nowthatwehaveagoodsense oftheindustry, let’s themselves, butmysenseisthatthisbrandinghaslesseffect thanwithmanyother Firm: for me.So,I’llsaythatthey’remoreofaprice-basedcommodity. think ofthemasbeingthesame—withinterestratemain differentiator Interviewee: WhileIdoseeafairamountofcreditcardadvertising,basically (The intervieweeshouldmarkonspectrum,oranswerdirectionally.) where wouldyouputthecreditcardindustryinU.S.? Firm: rectionally-correct sense.) sense/instincts. Theinterviewerisnotlookingforanexactanswer (Here’s where theinterviewerwantstotestinterviewee’s generalbusiness moditized andinterchangeable,wherewouldyouputcreditcardsasaproduct? Firm: know thisclientisseeingrevenuegrowthproblems. Interviewee: (The intervieweeshouldmarkonthespectrum,oranswerdirectionally.) That’s right.Onthespectrumofhighly differentiated andbrandedtocom- That’s right.Sure,creditcardcompaniesintheU.S.havetriedtobrand On thefollowingspectrumofyoungandgrowingtomatureslow, product Probably moreontheslowandmatureside,especiallysinceI Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting Credit CardIndustryinU.S. Credit CardIndustryinUS — within- HIghly differentiated,branded Mature, slow-growing product industry LIBRARY CAREER Sample Cases — just adi- 53 Customized for: Jessica ([email protected]) 54 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews are moreofacommodity/less brandedproduct. So,thatmakesmethink credit cardindustry, wesaidthatitwasamorematureindustry andcreditcards Interviewee: grow revenue? might wanttostart,orwhich bethemostfruitfulbucketsforideasto Firm: not necessary. Gettingthecorrect structure isthehardest part.) want todisguisethePs,orcustomizethemcredit card industry, butit’s (Any sortof4Psderivationwouldworkeffectivelyhere. Theintervieweemay ographic reach/placementofourproducts. price, 3)ourpromotionalandmarketingactivities,4) distribution/ge- analysis intofourprimarybucketsthateffect revenue:1)ourproducts,2) Interviewee: (After acoupleminutes…) Firm: Interviewee: How wouldyoustructurehowtolookatjumpstartingthatrevenuegrowth? question nowthatweknowwhatthenumbersgoalisforthisrevenuegrowth. Firm: $2 billioninnewrevenuetheyear. it wouldprobablyliketoseeabout$20billioninrevenue,whichmeansaround Interviewee: is approximately $20billion) ($18 billionX10percent =1.8billion;$18billion+1.8$19.8billion, which type ofrevenuedoyouthinkit’s aiming forthisyear? Firm: growth inrevenue.Soitusedtoalmostdoublethat. Interviewee: Firm: percent) (Growth rate=($18-17)/17billion1/17.058,whichcanberounded to6 lion, whichisabouta6percentgrowth. was $17billion,andthenextyear, itwas$18billion. That’s agrowthof$1bil- Interviewee: Well, youmentionedthattwoyearsago,thecompany’s revenue That’s agreatwaytolookatit.Doyouhaveanythoughtsonwhere That’s right.Fromlastyear, whenannualrevenuewas$18billion,what That’s aboutright—$2billionina year. So,let’s gobacktotheoriginal Yes, that’s right. And whatisitaimingfor? Of course. LIBRARY CAREER Well, ifitwantsatleast10percentannualrevenuegrowth,then Well, ifIstepbackandthinkaboutourearlierdiscussion ofthe Can Itakeafewminutestocollectmythoughts? You mentionedthattheywereusedtoover10percentannual Since thiscaseisaboutgrowingrevenue,Iwoulddividemy © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. vestment. Doyouthinkthiscould beone? $50 millionideainthefirstyear thatrequiresnosignificantinfrastructurein- So, let’s assumethateachideawebringtotheclientneeds beatleasta from theconsumerpurchasing thecard,let’s saya2percentservice charge. product: onefromthemerchantintermsof3percentpurchase andone would work,theclientcontinuetoseetworevenuestreams fromthe Firm: year timeframe.Isthatcorrect? credit cards—thatthisgiftcardideacouldbeimplementedin that one-totwo- sounds like—becausetheinfrastructureforthesecardsis sameasthatfor 10 percentannuallythatitcouldimplementinthenextone to twoyears.It need tobringtheclientthreeideashelpitbackitsrevenue growthto Interviewee: evaluate whetherornotthisisagoodidea? Now, givenouroriginalmandateforthecasefromclient,howwouldyou Firm: else, butthatitwouldbasicallyfunctionmuchlikeacreditcard. an amountstoredonit,thatacardholdercouldpurchasetogivesomeone Interviewee: a giftcard? client’s capabilities,currentinfrastructure, etc.DoyouknowwhatImeanby last year, andwethoughtthatthissortofproductlentitselfperfectlytothe fact, topU.S.retailers’ giftcardsgivenatChristmasaccountedfor$10billion found thattherehadbeenrealgrowthingiftcardstheretailindustry—in for thecompanyinU.S.—agiftcardproductaimedatconsumers. We One ofthethingsthatwelookedatforclientwaslaunchinganewproduct That leaveslookingattheproduct,andthat’s actuallywherethecasetookus. client wantsustofocusonjumpstartingrevenueintheU.S. expanding internationalplacementoftheclient’s product.Butfornow, the ties outsidetheU.S.thatclientisexploring—andyourhunchrightabout triggers forrevenuecreditcards.Second,therearegeographicopportuni- Firm: portunities outsidetheU.S.thatweshouldexplore? ment ofthatproductasthetwobucketstoexplore. Are theregeographicop- less ofanimpactonrevenuegrowth.So,thatleavestheproductandplace- think thatchangingourproducts’ marketingorpromotionalactivitieswillhave price ishardtomoveupwardsforacommodityproduct,anditalsomakesme First off, greatjob—priceandpromotionaredefinitelynotthebiggest Exactly—and beusedanywherethatsomeonecoulduseacreditcard. Yes, itis.Now, justtogiveyouasense of howthebusinessmodel I thinkso.I’massumingit’s likea fixed-valuecreditcard,with Well, ifIlookbackin my notes,understandingisthatwe Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 55 Customized for: Jessica ([email protected]) 56 EU CustomsBrokersCase Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews est tolargest offices needtobe.Howwould youhelpitworkthroughthis? planning office locationsanddevelopsomekindofscalefor wherethesmall- tries totarget first.Rather, itwantsyou tohelpitdevelopaframeworkfor identify preciselyhowmanybrokers areneededineachcountryorwhichcoun- It hasaskedyoutohelpitthink throughthisproblem.Itdoesnotneedyouto where itneedstohaveoffices initially. But itisnotsurehowtochoosestaffing allocationsfordifferent offices oreven in abigwayandplantoeventuallyhaveatleastoneoffice ineachcountry. tween different EUcountries. Ithasdecideditneedstocomeintothemarket of different states,itwould carry outcustomsbrokerageforgoodstradedbe- its businessintotheEUcountriesusingasimilarmodel, exceptinstead in oneortwomajorcitiesofmoststates. The companynowwantstoexpand Your clientoperates anetworkofcustomsbrokersintheU.S.andhasoffices Firm: like giftcards—toachievethatrenewedgrowth. troductions thatrequirelittleornoinvestmentinadditionalinfrastructure— more ofacommodityproduct,thecompanyshouldfocusonnewproductin- Since thecreditcardindustryisfairlymatureinU.S.andcardsare it’s hopingtoseeideasthatwilladd $1billioninsalesthenextcoupleyears. pany needsseveralideastojumpstartitsrevenuegrowthintheU.S.market,and Interviewee: Firm: looking for. would beabout$50million,whichisjustthesizeoftypeideathatwe’re by cardpurchasers. That meansthatourrevenuefromanewgiftcardproduct amount isthe3percentofthatpaidbymerchantsand2 Interviewee: ity ofgiftcardpurchasesanyway. Firm: Yeah, let’s justlookattheholidaysfornow—theymakeupmajor- of thegiftcardssoldinU.S.—ifwejustlookatholidays. share ofthegiftcardmarketwithinonetotwoyears. That’s owning$1billion could cutacross ALL retailersintheU.S.,wecouldgeta10percentmarket billion annuallyaroundtheholidaysingiftcards.Let’s saythatbecausewe Interviewee: That’s great. That’s right.So,howmightyousummarize thiscase? LIBRARY CAREER Well, ifIlookbackattheoriginalquestionofcase,thiscom- Okay, so,wesell$1billiongiftcards,butourrevenuefromthat Well, youmentionedthatcurrently, topU.S.retailerssell$10 © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. others. client shouldsetupcountryoffices andwhichlocationsmight belarger than to tryapplythemtheEU countries toseeifwecanprioritizewhereour lessons tobelearnedfromthem. OnceIunderstandthesedrivers,wouldlike cessful offices inparticularU.S.locationsasexamples,and seeifthereareany then thefactorsthatcontributetoitsstaffing requirements.I’dliketousesuc- derstand whatdrivesthedecisiontosetupanoffice inaparticularplace,and Interviewee: ask aseriesofquestionsthatseemlikeshotsinthedark.) you aminuteortwo.Mostwillprefer youtakethetimetodothis,ratherthan structure thecasemovingforward. You canalwaysask theinterviewertogive (You nowhavesomebackground informationandshouldthinkabouthowto to be,andwhichonescanbesmallorlarger. the clientwantstoavoidthistimebythinkingthroughwhere theoffices need business, downsizingandsoon.Itisexactlythiskindofunplannedgrowththat times quiterapidly, basedondemandandthishasoftenledtolossesfromlost thereby growingonecityatatime.Offices werescaledupanddown,some- major citiesinitiallyandgraduallyjustaddedwhereitfoundwork, through anygreatstrategicplan. The clientestablishedoffices inoneortwo Firm: was thethinkingbehindchoosinglocations,staff allocationsandsoon? Interviewee: European expansion,itplanstoalsodealwithexportsandnotjustimports. having goodsthatareindividuallyclassifiedunder$100,000invalue.Inthe language, whichexpeditestheirwork.Ourclientworksonlywithshipments usually prefertoworkwiththemaswellbecausetheycanspeakacommon pertise inlegalrequirements,taxesanddutiessoon.Customsofficials their businessorindividualclientsimportgoodsintotheU.S.throughex- customs authoritiesontheother. In theU.S.,sofartheyhavebeenassisting clients, businessesorindividuals,ononehand,andwiththecountries’ orstates’ Firm: structuring myanalysisbasedonsomeassumptions. I haveafewthoughts,butbeingunfamiliarwithit,wouldnotwanttostart Interviewee: to structure youranalysis.) the client’s work.Usetheinformationtobeginthinkingabouthowyouwant not hesitatetoaskafewquestionsgainsomebasicinformationaboutitand (This isanindustryyouare verylikelytobecompletelyunfamiliarwith.Do Well, intheU.S.thingshavehappenedquitehaphazardlyratherthan Sure. The basicfunctionofcustomsbrokersistoworkwiththeir Could youpleasetellmeaboutthecustomsbrokerageindustry? How weretheoffices setupintheU.S.geographically? What I’d liketostructuremyanalysisasfollows.Ifirstneedun- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 57 Customized for: Jessica ([email protected]) 58 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews market research orfromgovernmentsources. Ifthereisn’t, thecompanymay Interviewee: the companycouldgetthiskind ofdata? Firm: No,thereisnosuchdatacurrently available.Howwouldyoupropose data onshippingvolumesfordifferent locationsinEurope? in shipmentsofgoodsvaluedlessthan$100,000.Doesthe clienthaveany Interviewee: Firm: U.S. offices? any othercriticalfactorsthatwecanascertainfromstudying thesuccessful mercial spaceandotheroperatingcostsarenotexceptionally high. Are there of tradegenerallyimplytheneedforlarger sizeoffices assumingthatcom- for anoffice locationistobe nearatradecenter. Additionally, highervolumes Interviewee: work toseeifyouhavemadeanyerrors oroverlookedanything.) how youare progressing, butalsoallowsyoutoperiodicallytakestockofyour assumptions. Thiswillnotonlyhelptheinterviewerhaveaclearer picture of (As yougoalong,itissometimeshelpfultosummarizeyourinformationand move forwardwith. Firm: Europe—are candidatesforlarger offices. sume thatplaceshavinggreatertrade—interstateintheU.S.orinternational quired istheamountoftradethattakesplace. Therefore, Iwouldfurtheras- Interviewee: Firm: enough tooffset theimportanceofbeingnexttolocationtrade. other costssuchascommercialspace,humanresources,etc.,arenotlarge need tobelocatedatthosecentersoftradeorveryclosethem,assumingthat occur wheretheactualtradeistakingplace,andinlongrunoffice would ported orexported.Myassumptionwouldbethatthiskindofworkwillmainly broker istoassistwiththelegalandotheraspectsofgoodsthatarebeingim- selected foranoffice. Basedonwhatyou’vetoldme,themainfunctionofa Interviewee: need tothinkaboutmultiplecitiesinasinglecountry. an office inacountry, itwillbeinthecapitalonly. Inotherwords,youdonot Firm: No, Ithinkthosearethebiggestdrivers. Yes, thatseemsreasonable. I thinkthat’s OK.Forthesakeofsimplicityassumethatifyousetup Yes, thatisaslightlysimplifieddescription,butfairassumptionto LIBRARY CAREER There maybemarketdataalready availableeitherfromprevious OK. I’llstartwithlookingatwhyaparticularlocationmaybe I’d liketoapplytheselocationsinEurope.Ourclientdeals Just toreviewtheanalysissofar, itseemsthatthemaindriver One driverthatwoulddeterminetheamountofresourcesre- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. EU countrieswouldalsoberanked pertheirtradevolume. est inthesameorderastheirtrade volume.Beyondthesefive,theremaining to establishoffices. These fivecitiesIwouldrankintermsoflargest tosmall- lier simplification,theircapitalcities wouldpotentiallybethefirstfivelocations the highestvolumeoftradeingoods valuedunder$100,000.Givenyourear- Interviewee: countries withthetop-fivevolumesoftrade. Firm: greatest amountoftrading? Interviewee: Firm: volumes frombothgovernmentandothersourcessuchasthe WTO. analysis. We shouldbeabletogettheinformationforoverallcountrytrade realize thismaynotbetrueforallcountries,butitsufficient forafirst trade ingoodsvaluedunder$100,000FranceisalsodoublethatofSpain.I ample, ifthetotaltradethroughoutFranceisdoublethatofSpain,then trade ourclientdealswithmirrortrendsinoverallofcountries.Forex- Interviewee: accurate. Besure tostatetheassumptionsyouare makingwhenyouusethem.) mates, yourassumptionsneedtobereasonable ratherthancompletely tween countries.You maynotbecompletelycorrect—but whenmakingesti- that trends inthetradeofsuchgoodsare similartotrends ingeneraltradebe- trade thatcomprisesgoodsvaluedunderaspecificamount.You couldassume to whatyouare lookingfor. Inthiscase,youare dealingwithasubsectionof interview. Try tostepbackandthinkaboutwhatkindofdatamaybesimilar ter datacanbefound,anditisaskillyoubenefitfrom displaying inyour develop estimates.Theywillusetheseestimatesintheabsenceoforuntilbet- often havetolookfordatarelevant toapoorlydefinedsituationand useitto (At thispointyouhaveanopportunitytoshowsomecreativity. Consultants data. with someinitialplanning,andcanevenhelpitdecideifneedsmoreprecise gest somethingthattheclientcoulddoasafirstestimate? This wouldhelpit would beexpensiveandprobablytakequitesometime.Canyousug- eventually needtohireafirmcollectsuchdataatsomepoint.However, that Firm: them. need toconductsuchmarketresearchorhireanappropriatefirmdoitfor OK, sohowwouldyouproceedwiththisassumption? No, thereisnosuchdataavailable. You arecorrect,theclientmay Let’s assumeFrance,Germany, Spain,BelgiumandIrelandarethe Based onmyassumption,thesewouldalsobethecountrieswith An assumptionIwouldmakehereisthattrendsinthekindof Do wehaveinformationonwhatcountriesareinvolvedinthe Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 59 Customized for: Jessica ([email protected]) 60 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews tially splitthisupintoimportand exportvolumesbetweencountries.Ithink Interviewee: Firm: may have.) sketch outthetableasyoudescribeit,sotoeliminateanyconfusion he/she (If youhaveapaperandpen,itmaybehelpfultoyourinterviewer ifyouquickly ulation willhighlightthosetradelaneswiththemaximumactivity. EU countriesandfillinthevalueoftradebetweeneach them. This tab- mental organizations suchas the WTO. We couldconstructatableofallthe details oftheirtradevolumeswithdifferent countriesaswouldnongovern- trade betweendifferent countries asaproxy. Governments willbepublishing Interviewee: Continuingwiththeearlierassumption,Iwouldagainuse Firm: law thaninSpanishtheFrenchoffice. $100,000. InthiscaseitwouldneedtohavemorebrokerstrainedinGerman tion, itistradingmorewithGermanythanSpainforgoodsvaluedunder cantly moreoftenwithGermanythanSpain,thenbymyearlierassump- the countriestradingwithoneanother. Forexample,ifFrancetradessignifi- Interviewee: Therequirementforspecializedbrokerknowledgedependson and shouldnowthinkaboutthesecondone.) going to—the“tradelane.”You haveworkedyourwaythrough thefirstpart main variables,thequantityoftradeandwhere thetradeiscoming from or (You are stilldealingwithfactorsthataffectatradingcenter. There are two law thanSpanishtradelaw, initsFrenchoffice? the companyestimateifitneedsmorebrokersspecializinginGermantrade could estimatetheplacingofsuchspecialistbrokers?Forexamplehowwould Firm: specialized brokerswhoareawareoftherequirementsdifferent countries. to Europeanddealingwithbothimportsexports,theremightbeaneedfor miliar withU.S.law, sincethey’redealingwithimportsonly. When moving tions willbethatintheU.S.companybrokersprobablyonlyneedtofa- Interviewee: ness operatesandplansitsoffice structure? any anythingdifferent aboutEuropethatmayrequirechangestohowthebusi- duce. These assumptionsarebasedontheU.S.businessstructure.Doyousee Firm: Is thereanyfurtherrefinement youcanmaketotheproxy? Could youmakethiskindofassessmentforthedifferent countries? Correct, thatwillbeabigdifference. Howdoyouthinkthecompany Based onyourassumptionssofar, thatisareasonablerankingtopro- LIBRARY CAREER So far, wehave lookedatoveralltradevalues. We couldpoten- The onebigdifference betweentheU.S.andEuropeanopera- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Eyewear ChainCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. of thesamestoresales. What canyouinferfromthisslide? Firm: strong relationshipswiththeircustomers. lens andframes.Mostsuccessfuleyewearfirmsaimtoestablish andbuild service toitsregularcustomers,andnotjustsellingproducts, whicharethe address it. The successfuleyewear firmbelievesthatitisprovidingavaluable founder wantsustodeterminethereasonfordecline,and howsheshould enue andprofitrecentlyasitunderwentexpansioninthepast 10years. The Eye Inc.,aneyewearchain,hasbeenstrugglingwithdeclining perstorerev- any calculationormathematicalerrorsyoumayhavemade. systematically forpossibleflawsinyourassumptionsandframework,or pected result,donotpanic. Acknowledge thattheresultseemsoff, andlook better chanceofnotderivingunexpectedresults.Ifyoudoarriveatanunex- work. Ifyouhavebeendoingsomerealitychecksonyourwork,a recommendations byprovidingrealdataandaskingyoutouseitinyourframe- suggesting. Itispossiblethattheinterviewercoulddecidetotestyouonyour go alongyoushoulddoperiodicrealitycheckswithyourselfonwhatare When developingrecommendationsonaconceptual/frameworklevel,asyou to thinkaboutwhatmightbedifferent intheEU. important toevaluatewhathadworkedintheU.S.andnot,also fit oftheU.S.exampleandsowerenotstartingfromscratch.However, itis that theclientcouldthenusewithactualnumbers. You alsohadthebene- explore thiscaseonaconceptualleveltoseeifyoucandevelopframework viewer isnotlookingforprecisenumbers. This impliesthatheorshewantsto its neworganizational structure. At theverystartyouweretoldthatinter- This caseisaboutprovidingyourclientwithsomeguidelinesforhowtosetup Case analysis Firm: ernment releaseddataororganizations suchasthe WTO. this informationshouldalsobeavailablefromthesamesources,thatis,gov- Your teamhasspentsometimeanalyzing the revenueandprofitability I thinkthat’s reasonable. Thank you. Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 61 Customized for: Jessica ([email protected]) 62 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews No. ofshops Index to Year 0 wars, andthereforehasnotbeen engagingintheseasitopensnewstores.It cline. However, EyeInc.isacutelyawareofthedamagingimplication price Firm: lenging toincreasethepricewhile retainingthesamevolumeofcustomers. cut intheirnewstoresthroughapenetrationpricingstrategy, andfindsitchal- be thatEyeInc.istryingtoattractnewcustomersbyoffering asignificantprice ited marketmayhaveencouragedthepricecompetition. Another reasonmay into amarketsaturatedwithexistingeyewearretailers,andtherefore thelim- portant toanalyzetheclient’s expansionplan.EyeInc.mayhaveexpanded Interviewee: the keydriversforpriceofeyewear. Firm: average priceofeyewearhasdeclined? Interviewee: proceed? Firm: is drivingthedeclineinrevenue. tiplied bythepriceofeyewear, weneedtodeterminewhetherpriceorvolume declining profit.Giventhatrevenueconstitutesvolumeofeyewearsoldmul- nitely lookintowhatisdrivingthedecliningrevenue,whichhasresultedin which meansthatcostisnotlikelytobeanissue. Therefore, weshoulddefi- Interviewee: 100 - 120 - Year 20 - 40 - 60 - 80 - 0 - That soundslikeagoodplanmovingforward.Howwouldyouto Before Ianswerthequestion,wouldliketoknowwhatyou think are Both aregoodreasonswhyprice maybeadriverfortherevenuede- LIBRARY CAREER (Year 0-5) Exhibit 1:Per store revenue andprofit In ordertodeterminewhatmaybedrivingpricedown,itisim- Let’s focusontheprice.Dowehave anydatatoshowthatthe Revenue andprofitappearstobedecliningatthesamerate, 0123 45 1 2 4 6 8 © 2008Vault.com Inc. 10 Customized for: Jessica ([email protected])

Visit theVault ConsultingCareerChannel at sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. % of regular customers* regular of % to us. What canyouinferfromit? more thanoneeyewearproductwithinayear. Here’s thedatamadeavailable regular customers.Itdefinesitscustomersasthosewhohavepurchased Firm: EyeInc.actuallydoessegmentitscustomersbetweenregularandnon- tomer satisfactionwillbehelpful. sessed thatthelocationswereselectedcarefully, soanydatafocusingoncus- the retailshopordecreaseincustomersatisfaction.However, wehaveas- Interviewee: ers forthedeclineofvolume? Firm: time? have anydatatoshowhowthevolumeofeyewearpurchasedhasdeclinedover tively constant,thenthevolumeofeyewearpurchasedmusthavedropped.Dowe Interviewee: tion, thresholdpopulationandaccesstothestores. has alsochosenitslocationscarefully, takingintoaccountexistingcompeti- 20 - 40 - 60 - 80 - 0 - What specificdatadoyouthinkwillbehelpfulindeterminingthedriv- eyewear purchased per regular customer per year Exhibit 2:Per store percentage ofregular customersand store. purchased morethanoneeyewear productayearfromthe Note:* Regularcustomersare definedasthosewhohave Average no.ofeyewearpurchased perregularcustomeryear .513 .612 1.14 1.22 1.26 1.32 1.35 12345 2 01 OK, let’s explorethevolumesidethen.Ifpricehasremainedrela- The declineinvolumemaybeduetounfavorablelocationof Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER 1.07 Sample Cases 63 Customized for: Jessica ([email protected]) 64 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews chases. Itisthereforecriticalto ensurethatthepercentageofregularcustomers significantly contributetotherevenue ofeachstore,especiallywithrepeatpur- down servicesrenderedtothe stores’ regular customers.Regularcustomers profit, thefounderneedstoevaluate thedecisiontomanagecostsbycutting Interviewee: Firm: the declineinaveragenumberofeyewearproductsforregular customers. they willbuyaneweyewearproductorevenreturntothestore. This explains port andwerecharged more thanatokensumfortheserepairs,itisunlikely However, ifcustomersfeltthattheywere not providedtheextraservicesup- wear productssuchasanextraframeorsunglasses. and fuss,theseregularcustomersmaybepersuadedtopurchase othereye- regular customersareinthestoresandhavetheirneedsmetwithminimalcost relationships. Inaddition,goodwillisgeneratedatthisspecificoccasionwhen charge aminimalsumorwaivethecharges altogetherto strengthencustomer placed duetominorscratches,andthemoresuccessfuleyewearfirmsmayonly Customers tendtoreturntheshophavetheirframesfixedorlensesre- duced theservicesprovidedtoregularcustomerskeepcostsdown. profitability ofaneyewearbusiness. Therefore, EyeInc.mostlikelyhasre- Interviewee: Firm: ular customersarethekeydrivers. 5, thedeclinesinregularcustomersandpurchasesofeyewearproductsbyreg- has declinedfromanindexof100to80,a20percentdrop Year 0to Year centage dropis(1.24-1.03)/1.24=17percentdrop.Giventhattherevenue 1.24. The indexfor Year 5is1.07*40percent+1*60=1.03. The per- one year. Therefore, theindexfor Year 1is1.40*60percent+1*40= Interviewee: tribution toEyeInc.in Year 0ascomparedto Year 5? lar customers,canyoucalculatethepercentagedropinregulareyewearcon- Firm: of rapidexpansion,whichresultedinthedeclineregularcustomers. has beenreducingservicestoallofitscustomerskeepcostconstantinthemidst that costhasnotchangedbasedonthefirstslide,myhypothesisisEyeInc. and eventheclient’s regularcustomersarebuyingfewerpiecesofeyewear. Given Interviewee: Let’s gobacktodiscussing—what doyouthinkcausedthesedeclines? What willyourrecommendationtothefounderbe? Before wediscusswhythatwillspecificallydrivethedeclineofregu- LIBRARY CAREER The numberofregularcustomershasactuallydeclinedovertime, Regular customersareimportantcontributorstotherevenueand A non-regularcustomeronlypurchases oneeyewearproductin In orderfortheEyeInc.toarrestdeclineofrevenueand © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Case Health CareCPGConsumerLoyaltyProgram sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • Customer loyaltyprogramshavealonghistory. Someofthemostwell- This clientisoneofthefirm’s • largest intheU.S. As such,thefirmhasafairly The client’s• target consumerforitsCPGbusinesstendstobemothers,asthoseare • The clientisalarge healthcare-relatedproductsmanufactureranddistributor. Additional informationprovidedduringquestioning asked uswhetherthisisagoodidea.Howwouldyoustructurethatinquiry? would lovetodoaloyaltyprogramforthecompany’s target consumers,buthas and oneofthetopicsthatcameupwasconsumerloyaltyprograms. The CEO business issuesonhismindwithoneofourconsultingfirm’s seniorpartners, products isaclientofourconsultingfirm. The CEOwasdiscussingseveral A large CPG(consumerpackagedgoods)companyspecializinginhealthcare ices tothosewhohavebeenregularcustomers. lar customers. At theleast,itisstillimportanttoprioritizetheseafter-care serv- services doesnotnegatethebenefitfromincreasingpurchasesbymoreregu- However, itisimportanttoensurethatthecostofprovidingtheseafter-care tunities fortheregularcustomerstopurchasemoreeyewearproducts. does notdipbycontinuingtoprovideafter-care services,andcreatingoppor- the consumersdoingpurchasingofmosthouseholditems. focus onthatpartofitsbusiness. sumers (thinksoapsandshampoos,cottonswabs,diapers,etc.). The casewill health careprofessionals,themajorityofitsproductsaretargeted towardscon- While about25percentofbusinessiscomposedproductsfordoctorsandother which hingeuponcollectingthe UPClabelsofpackagedgoods. consumers havebeeninducedto repeatedlybuybrandsduetogiftsandoffers, However, loyalty programshavealsoexistedintheCPGrealm.Fordecades, icked bybanks,creditcardcompanies, hotelchainsandrentalcarcompanies. free travelorothergifts. These “frequentuser”programs havebeenmim- accumulate milesforpaid-fortravel,andwhichcanbetradedin forupgrades, known loyaltyprogramsincludefrequentflyermiles,whereloyal customers a viablebusinesscasebeforemakingdecisionsandexecuting them. “strategic planninggroup.”Herunshisideasthroughthefirm to seeifthere’s close relationshipwiththeCEO,andCEOoftenusesfirm ashisown Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 65 Customized for: Jessica ([email protected]) 66 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Does thatanswerallofyourquestions? ness tendstobemothers,asthose dothepurchasingformosthouseholditems. Firm: audience? Interviewee: if hecandosomethinglikethatforhiscompany’s consumers. this loyaltyprogramidea—heloveshisfrequentflyermemberships andwantstosee fore hepresentsitinternallytohiscompanyforexecution.He’s prettyexcitedabout gic planninggroup.”Herunshisideasthroughustodevelopthe business casebe- Firm: with thisclient,andtheCEOinparticular. the seniorpartnershere.Itsoundslikefirmhasaprettygood relationship for thefirm,andthatCEOhasaprettycloserelationshiptoatleastoneof lationship withthisclient. You mentionedthatthisclientisoneofthelargest pany we’retalkingabout.Now, I’dliketogetabettersenseofthefirm’s re- Interviewee: to focusonconsumerloyaltyprograms,andthesideofitsbusiness. products arealsogearedmoretowardsdoctorsandnurses,butourclientwantsus its mainproductlinesaremorelikecottonswabs,soapsanddiapers.Someof of over-the-counter illnessremedieslikecoldmedicineandaspirin.Butactually, Firm: health careCPGcompany. Doesthatmeanitsellsproductslikecoldmedicine? Interviewee: analyses andqualitativeevaluations) Breakdown ofsolution(includingquantitative ture oftheclient’s ideabeforeeven attemptingtosolvethecase. spend agoodbitoftimeprobingthecontextclientrelationshipandna- and importanceofthisclientrelationship. A successfulintervieweewilllikely There’s alotofbackgroundinformation here,andup-fronthintsaboutthedelicacy to thecase. interviewee hitsonthosetwoconcepts,heorsheshouldbeabletofindasolution The firstiscost-benefitanalysis,andthesecondopportunitycost. As longasan There aretwoconceptsthatshouldreallybeusedtostructureandsolvethecase. Suggested high-leveloverviewofsolution You’re ontherighttrack.ItisahealthcareCPG,anditdoessellcouple Yes, that’s correct. The CEOoftenusesourfirmashisownsortof“strate- That’s agreatquestion. The client’s target consumerforitsCPGbusi- LIBRARY CAREER I’d liketomakesurethatIunderstandthecase.So,ourclientisa In termsoftheconsumers,whoexactlyiscompany’s target Great, thatgivesmeabetterunderstandingofthetypecom- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore.

U.S. Dollars 10 - 12 - 0 - 2 - 4 - 6 - 8 - aided usinhelpingtheclientthinkaboutstartinganewprogram. grams outthere—nonethatourclientisspecificallyrunning—but thisresearch some benchmarkingdatathatwedidondifferent pilotconsumerloyaltypro- Firm: in saleswemightgetfromtheprogramversuswhatitcoststorunit. need todosomesortofacost-benefitanalysisseehowmuchextrarevenue a consumerloyaltyprogramisgoodidea.Inordertoevaluatethis,wewould Interviewee: (A coupleofminuteslater…) Firm: Interviewee: labels onpackagedgoods.Doesthatgiveyouabettersenseofwhat’s outthere? to getgiftsandoffers thatarebasedonthecollectionofacertainnumberUPC area. Fordecades,consumershavebeeninducedtorepeatedlybuybrandsinorder rental carcompanies.However, loyaltyprogramshavealsoexistedintheCPG programs havebeenmimickedbybanks,creditcardcompanies,hotelchainsand can thenbetradedinforupgrades,freetravelorothergifts. These “frequentuser” quent flyermiles,whereloyalcustomersaccumulatemilesforpaid-fortravelthat long history. Someofthemostwell-knownloyaltyprogramsareairlinefre- into avarietyofconsumerloyaltyprograms.Customerprogramshave Firm: That’s anothergreatquestion. We actuallyendedupdoingalotofresearch health carepackagedgoodsexactly? ing abouthisfrequentflyermembershipcard,buthowdoesthattranslateto exactly isintherealmofpossibilities?Imean,knowthatCEOthink- Interviewee: Exhibit 1:LoyaltyPrograms per Customer Analysis ealrAfnt ad iln rqetByrCrsHouseholdCleaner Rebates AirlineFrequent BuyerCards Retailer AffinityCards .50.55 0.45 That’s right. And that’s exactlywhatwedid.Now, I’dliketoshowyou Of course. So, thequestionthatclienthasputforthistodecidewhether Yes. CanIhaveafewmomentstocomposemythoughts? Just onemore:Intermsofconsumerloyaltyprograms,what Vault CaseInterviewPracticeGuide2:MoreInterviews 10 www.vault.com/consulting 7 for FrequentPurchases 2.5 3 — within- 09 10 CPG Discount Coupon Club LIBRARY CAREER Sample Cases Test Program per Customer Sales Liftper Total Costof Customer 67 Customized for: Jessica ([email protected]) 68 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews above, heorshewoulddefinitely notbeexpectedtoanswerthis.Butamore (Again, thisismore ofanadvancedquestion. Iftheintervieweeisnewasstated think we’dgetfromthemarketing folksattheclient? eled afteranairlinefrequentflyer program,whatkindof“push-back”doyou company—as areasonwhyitshould createaconsumerloyaltyprogrammod- client—and notjusttheCEO,whoseideathisprogramwas,but toothersathis Firm: That’s right.Now, lookatExhibit1.Saythatwepresentedthistothe brand loyaltyovertime. awareness orloyalty?Iimaginethattheclientwantsthisprogram toincrease be lookedatintermsofbranding—howmuchdoestheprogram increasebrand a signof“pantry-loading,”that’s notgreat. Any marketingeffort shouldalso Interviewee: able tospeakthis.) pected toanswerthis.Butamore experiencedintervieweewouldwant tobe views—or thebusinessworldingeneral—heorshewoulddefinitelynotbeex- (This isamore advancedquestion.Iftheintervieweeisnewtocase inter- quantitative benefitstoeachoftheprograms. What mightthosebe? running theprogram.Butyoualludedtofactthattheremightbeothernon- Firm: airline frequentbuyerprogramisthemosteffective andthebestone. return. Onapurecost-benefitbasisintermsofsalesandcosts,itlookslikethe the lastone,CPGdiscountcouponclub,youget(10/9=1.11) a110 percent purchases program,itlookslikeyougeta(3/2.5=1.2)120percentreturn.For percent returnontheprogram.Forhouseholdcleanerrebatesforfrequent For theairlinefrequentbuyercards,itlookslikeyougeta(10/7=1.428)143 cards, itlookslikeyougeta(.45/.55=.818)82percentreturnontheprogram. of programgivesyouthegreatestreturnforcosts.Forretaileraffinity Interviewee: swer.) analysis withthepercustomernumbersoncharttoarriveatrightan- (Now, theinterviewee needstodosomequickreturn-on-investment (ROI) Firm: sumer loyaltyprogramsofothercompanies? sets ofbarsrepresentsthepercustomersalesliftandcostspilotcon- Interviewee: So, whatdoesthisdatatellyou? That’s right.Itdoesgetyouthehighest saleslifeforthecostsincurred Yes. That’s right. Which programisthe best? LIBRARY CAREER Well, inordertodecidethat,you’dneedcalculatewhichtype Sales liftsareobviouslygood,butiftheyonlytemporary, or Let memakesurethatI’mreadingthiscorrectly. Eachofthese © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore.

Internet Advertising U.S. Dollars 1.2 - 0.2 - 0.4 - 0.6 - 0.8 - Exhibit 2:ClientMarketingProgram per Customer Analysis me whatthistellsyou. Firm: tiatives likeadvertising,sampling,coupons,etc. marketing programs—bothpotentialloyaltyprogramsandotherini- they’d wanttoconsiderwhatkindofROIthey’regettingfromothertypes dustry, whichisthe“best,”evenintermsofsalesliftversuscost,Iimagine fore declaringasortof“frequentbuyerprogram”modeledaftertheairlinein- their company, theirproductsandcustomertarget, mothers.Second,be- that clientswouldwantabettertestofhowloyaltyprogramworkfor the marketingteamwouldsaythatthey’renot“purecomparables.”Iimagine from othercompanies,productsandevenindustries.Iimaginethat might pushbackon.First,eachoftheexamplesinExhibit1arebenchmarks Interviewee: its ofpiecesdataandclientrelationship management.) If theintervieweecanhitallofthesepoints,itshowsgreat awareness ofthelim- experienced intervieweewouldwanttobeablemakeanobservationortwo. 1 - 0 -

Print Advertising 0.5 That’s exactlyright.Giventhat,let meshowyouExhibit2.Now, tell 0.25

Health Care Fair Sponsorship 0.55 I canthinkofafewthingsthatpeopleattheclientcompany 0.5 Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting 0.45 TV Advertising 0.25 0.85 Circular Coupons 1 — within-

Sampling 1

Online Blog Sponsorship 0.2 1 0.45 LIBRARY CAREER 0.15 Sample Cases tomer per Cus- Program of Test Total Cost Customer per Sales Lift 69 Customized for: Jessica ([email protected]) 70 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews we diddosomethingforourmoms—even somesortofloyaltyprogram—we grams. Itturnsoutthatonline efforts haveevengreaterROIs. So,fornow, if pears thattheROIsareevenhigher withsomeofourInternetmarketingpro- marketing activities,whichwe do withourtarget consumers—mothers—it ap- pany’s consumers.However, whenwecompare thistosomeothertypesof see whyyouthoughtthiswouldbeagoodthingtolookinto foryourcom- grams—in fact,theyshowaROIofover140percent,whichis great,andIcan grams showprettygoodreturnsintermsofsalesliftforthe costs ofthepro- other companiesandindustries,itseemsthatairlines’ frequentflyerpro- Interviewee: surprised.) which sometimeshappensincaseinterviews,sointerviewees shouldnotbe wards before thefinalpresentation willbecomplete.It’s alsoa littlerole play, wrong; and3)statethattheteamisstillworkingevaluatingallrisks/re- given theanalysisdone—notworryingtoomuchaboutwhetherit’s rightor back toatleastonenumbercalculated;2)stateanopinionorrecommendation should dothree things:1)summarizedata/analysisdone,definitely referring quickly andsuccinctlyyoucansummarizeacaseinterview. And interviewee CEO “whoyourunintointhehallway/elevatoratclient.It’s atestofhow (This isactuallyafavoritecaseinterviewtactic—summarizetheto to him?Howwouldyousummarizethiscaseandwhatwe’velearned? way—he’s veryexcitedtofindout howthecaseisgoing. What wouldyousay back tohim.Let’s saythatyou’re at theclientsiteandrunintohiminhall- at theclient.However, itwasnewknowledgefortheCEO.Infact,let’s get swer. That wasnewknowledgeforus,butnotsomuchthemarketingfolks are athome,dyingforanonlinecommunity, whichtheblogsinsomewayan- online athomeandrespondprettyheavilytoit.Infact,alotofyoungmoms can provideshowprettyhighROIs.Inturnsoutthatmomsspendalotoftime it, anditseemsthatthedirectmarketingdifferent Internetmarketingtools Firm: kind ofsurprisesme. Internet advertisingand“onlineblogsponsorships”providethebest,which vertising havetheworstROIsintermsofsaleslifttocosts. And, itlookslike Interviewee: Justglancingatit,itlookslikesampling,couponsand TV ad- do themath,butjustglancingatthisgraph,whatyousee? Firm: ing activities. Interviewee: Don’t worryaboutthatorbeingsopreciseonthisone.Iknowyoucan That’s right,andyeah,thatkindof surprisedusto.Butwelookedinto LIBRARY CAREER Well, firstIwouldcalculatetheROIsforeachofthesemarket- Well, inlookingavarious consumerloyaltybenchmarksfrom © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Housing LoansMarketEntryCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. interviewer whatyouthinkitrefers to justtoverifythatyouare correct.) background andare familiarwiththisterm, itwouldbeagoodideatotellthe ple, whichisnotwhatreferred tointhiscase. Evenifyouhaveafinance is the“subprime”market?You mayhaveheard ofa“primerate,”forexam- ket entrystrategyaswell.The first questionthatshouldcometomindis,what market analysis,andiftheconclusionisfavorablethenpossibly developamar- situation inadifferent country. Ifyouthink offrameworksyouneedtodoa (This casedealswithamarketentrydecisioncomplicatedbythe newmarket’s to helpmakeadecision. It doesnotknowifthiscanbeaneffective growthstrategy. Ithasaskedyou ideally underitsownbrandsoasnottodiversifyproduct. tering theCanadianmarketasawaytogrow. Itwouldprovidethesameservices, market. The U.S.marketisbecoming saturatedandthebankisthinkingabouten- Your clientis aU.S.bankthatprovideshousingloans.Itspecializesinthesubprime That’s it.Greatjob! it’s goodthatyourecognizewe havetobealittlecarefulaboutit. make businesssensethanjustrecommendingthemtostayonhisgoodside.But the time.So,we’rebetteroff delicatelyshootingdownhisideasiftheydon’t do good,data-drivenanalysisandwork. That’s whyhetrustsusandhiresall that oneofthereasonswhywehavesuchagoodrelationshipwithhimis Firm: lationship withhim,don’t we?Hemaynotlikeusrecommendingit. evaluated anddeclinedwastheCEO’s idea,wasn’t it? And wehaveastrongre- Interviewee: relationships.) every intervieweegetthis,butifyoudo,itshowsreal understanding ofclient (This isalsoa“nice-to-have”answerinthecaseinterview. Bynomeans,will flyer programs? about inrecommendingnottodoaloyaltyprogramliketheairlinefrequent mendation totheCEO?Or, letmerephrasethat,whatmightyoubeconcerned Firm: the mostforourtarget consumersandourcompany’s sales. should probablydesignsomethingonline,becausethat’s whereweseemtodo That’s great. And you’reright—itisalittledelicate.But,Ihavetosay, That’s great.Justquickly, whatdoyouseeastheriskofthisrecom- Well, theonlythingthatcomestomindisthisideawejust Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 71 Customized for: Jessica ([email protected]) 72 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews only thetopend ofthesubprimecandidatesare currentlybeingserviced. has alsoshownlowerratesof defaulters butthismaybeduetothefactthat rates ofalmost20percentover thelastfewyears.SofarCanadianmarket about 3to5percentwhiletheCanadian marketisabout$20billionwithgrowth Firm: TheU.S.subprimemarketisabout $150billionwithagrowthrateof to theU.S.? Interviewee: WhatisthemarketsizeandgrowthrateinCanadaascompared Canada. ItdoesnotwanttoconsidergoingoutsideNorth America atthistime. larity offinancialandlegalinstitutions,soon,it chosetotarget far moreinitsfavorthantheMexicanoneallaspects—potential size,simi- ingly saturated. The banklooked NorthandSouththeCanadianmarkethad Canada. GrowthintheU.S.wasslowingdownasmarket became increas- Firm: growth. Why didtheclient choose theCanadianmarket? dian marketisactuallyanappropriatestrategytoachievetheclient’s goalof Interviewee: Firm: compete inanewmarketthatissituateddifferent country. goal ofgrowth. The secondistoassessiftheclienthasabilityenterand derstand whetherornotenteringthismarketwillhelpourclientachieveits Interviewee: entering anewmarket,particularlyonethatisindifferent country.) market’s suitabilitytoachievingthegrowth goalaswellthefeasibilityof formation youneedtoreach adecision.You needtothinkabouttheCanadian analyze thecase.You willprobably needtoaskalotofquestionsgetthein- (Now thatyouunderstandthecontextbetter, it’s timetoprovide astructure to diversifies yourrisksincethepoolofpeoplewhowillnotdefaultisalsolarger. ciently large numberofborrowers;itraisesyourfinancialexposurebutalso For banksoperatinginthismarket,thereisalsoanelementofhavingasuffi- change forcharging ahigherlendingrate,typically3to4percentagepoints. will notgivethemaloan. Those thatdowilltakeonthehigherriskinex- because ofthispoorcreditrating,andmanymainstreamlendinginstitutions leading tothemhavingabadcreditrating. They areconsideredahigherrisk housing loansfromnormallenders. This mightbeduetoseveralreasons,most Firm: “subprime market”refersto. Interviewee: Sure. The subprimemarketreferstocustomerswhodonotqualifyfor OK, wherewouldyouliketobegin? It wasmoreCanadachoosingitselfthantheclientreally LIBRARY CAREER I wouldliketoanalyzethecaseontwolevels. The firstistoun- I’d liketostartwithassessingwhetherornotenteringtheCana- Before startingtothinkaboutthecase,I’dlikeclarifywhat © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. pect, thatwillsuccessfullyattract customersawayfromtheincumbents. highly differentiated eitherintermsoftheproductitselforcustomer serviceas- could bequiteexpensive. Another optioncouldbetoenterwithan offering thatis way bybuyingoutoneoftheincumbents andtakingoverthebusiness,ofcoursethis the clientcouldentermarket. Forexampleitcouldcomeintothemarketinabig are bigplayerswithdeeppockets.Neverthelesstheremightbeafew different ways Interviewee: them.) nity tobecreative. Picktwoorthree thatyouthinkare thebestandoutline for anewentrantbutthere are afewdifferent strategies.Here isanopportu- (In ahighlyconsolidatedmarketwithbigplayers,share canbetough very highpercentageofallfinancialbusinessacrossCanada. for them. These fivebanks operate nationallyanddominatethemarketwitha major banksthatarestartingtoprovidethisserviceorhaveaffiliates doingit Firm: mented withseveralplayersorisitmoreofamonopolyoligopolystructure? Interviewee: Firm: quired.) fine yourstructure asyoumovethrough thecaseanddeterminewhatisre- are commonplacewhenestablishingnewoperations).It’s goodtofurtherre- enue atafastratebuthaveanoverallprofit declinefortoolong(initial losses (It isimportanttomention“profitable like toanalyzethemarketintermsofincumbents,customersandentrybarriers. the analysistoassessfeasibilityofenteringandcompetinginmarket.I’d it wouldbystayingonlyintheU.S.market.I’dliketomovesecondpartof at thesamepaceasmarket,thenitwouldachieveitsobjectiveofgrowingfasterthan the U.S.Ifclientwasabletoestablishprofitableoperationsthatgrewatleast Interviewee: double digitsforthenextfewyears. Firm: Itmaynotmaintain20percentgrowthbutitisexpectedtogrowinthe at similarrates? Interviewee: verge ofbursting,whichwouldbetheworsttimetoenteramarket.) historical data. A marketcouldbeinthemiddleofagrowth bubbleandonthe (Always remember tokeepaforward-looking perspectiveandnotjustrely on That soundsreasonable. The markethasanoligopolystructure.Itmainlyconsistsofthefive It seemslikethemarketisrelativelyconsolidatedandincumbents OK, sothemarketitselfisdefinitelygrowingatafasterratethanin Is thisgrowthtrendintheCanadianmarketexpectedtocontinue Beginning withtheincumbents,isindustrycurrentlyfrag- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting operations.” Noonewantstogrow rev- — within- LIBRARY CAREER Sample Cases 73 Customized for: Jessica ([email protected]) 74 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews sults ofasurvey] anditisaskillthatyoucandevelop withpractice.Try tothink to moveaheadwhiletheyare waiting forthedatatoarrive,examplere- sultants todoearlyintheprocess ofa casewhengooddataisnotavailable[or on. Determiningandusinga proxy for actualdataisverycommoncon- (The interviewerisguidingyou tomakesomehigh-levelassumptionsmove there anyproxyyoucanuse? Firm: where theyareconcentratedgeographicallyinCanada? Interviewee: Firm: one intheU.S. I amassumingthecustomerprofilewewouldtarget thereisverysimilartothe Interviewee: Firm: prioritize thedifferent regions. Interviewee: Firm: proach theproblembytargeting oneregionatatime. be quiteexpensiveandwouldnotafastprocess. We could,however, ap- nant nationally, settingupitsownnetworkthatcancompetewiththesewould Interviewee: hence youshouldtailoryouranswersaccordingly.) terviewer ispushingyoutogobeyondjusthigh-levelassumptionsandsteps, (Recognize thatyouare wellandtrulyinthemiddleofa“deepdive.” Thein- Firm: venture withoneoftheincumbents. the entranthastoeitherestablishitsownoperationsoralternativelyhaveajoint presence inthecountry. Ifalocalincumbent’s operationscannot betakenover, Interviewee: The firstoptionofbuyinganincumbentisfartooexpensive. uct andservicethatmightattractpeople,buthowwillitbringthesetomarket? structuring theloan. The clientcouldmakesomechangestothestandardprod- management, legalandotherrequirementsallowlimitedroomforcreativityin is amajor, usuallyonce-in-a-lifetimeinvestmentthatpeoplemake,andrisk Firm: Yes, thatis a reasonableassumption. What kindofcustomeranalysisareyouthinkingof? How wouldyoudothis? Let’s explorethesetwooptionsfurther. The secondoptionismoreinterestingbutalsolimited,giventhatthis We don’t haveanygeographic-baseddemographicdatarightnow. Is LIBRARY CAREER Since weareplanningtooffer thesamebasicproductinCanada, Even withthesecondoption,clientwillstillneedaphysical I wouldtrytousethecustomeranalysisdeveloparanking If thecompetitionconsistsofbigfivebankswhoaredomi- Do wehavedetailsofthiscustomerprofileormarketdatafor © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. in thissectoroftheeconomy? one now. Are thereanylegalor regulatorybarrierstoentrybyaforeignbank looking atincumbents,customers andentrybarriers.I’dliketolookatthelast but stillneedtothinkabouthow toenter. Inmyearlierstructure,I talkedabout manageable. Sofarwehavedeterminedametricforchoosing wheretoenter does soinagradualmanner, oneregionat atimetokeepitsmarketentrycosts the optionwherecliententerswithadifferentiated productonitsownbut Interviewee: about it.) that youare usingthestructure youhadproposed earlieranddidnotjustforget this outloudasinterviewersgainaninsightintohowyouare thinking.Italsoshows (Reassess where youare sofarinthestructure youproposed. Donothesitatetodo ber ofcitiesthatrankhighlyinthisanalysis,whatshouldtheclientdonext? Firm: sis unit. Interviewee: market. sity ofpopulationandthencommunityprofiletoprioritizelocationsenterthe Firm: the customerprofilethatformsourbase. those thatwetarget intheU.S.sothatweareclosetocommunitieshave of people. Another metriccouldbe totryandmatchcommunityprofiles want tobeinareaswhereasinglelocationcouldservethemaximumnumber yet surehowmanyphysicallocationswewouldhave,butregardless Interviewee: of? Firm: ters ofCanadaandwouldapplymetricstorankthem. So, asaveryroughfirstproxy, Iwouldthinkaboutthemainpopulationcen- where youneedalarge poolofborrowerstodiversifytheriskdefaulters. thinking abouttheearlierinformationthatthisbusinesscanbevolume, greater numbersclosertothemainpopulationcentersofCanada.Iamalso Interviewee: sumption and,iftheintervieweragrees, moveaheadwithit.) of anyprevious informationthatmighthelpyouchooseaproxy. Stateyouras- So youaresuggestingacustomeranalysisthatwilllookatsizeandden- Let’s simplifyandassumetheprovince ofOntariohasthemostnum- Could youclarifythatplease? What kindofmetricsareyouthinking Yes. Iwouldprobablylookatcitiesorgroupsofastheanaly- We wereassessinghow toenterthemarketandwerelookingat For example,Iwouldlookatdensityofpopulation. We arenot In general,anyprofiletypeisprobablymorelikelytoappearin Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 75 Customized for: Jessica ([email protected]) 76 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews ner orthroughajointventure and morebroadlyifitcanfindasuitablejoint decide thebestwayitshouldenter—either independentlybutinaslowerman- The mainquestionissincethey aremovingintoanewcountry—itneedsto at afasterratethattheU.S.market andisexpectedtodosointhenearfuture. meet thegrowthobjectivebyentering theCanadianmarketsinceitisgrowing Interviewee: Firm: ship, whichmaymeanthereisonlyonerealoptionavailable. market, it’s possiblethatnoneofthemareinterestedinenteringintoapartner- a favorablecontract.Ifthefivebigbanksareonlypossible partnersinthis of findinganappropriatejointventurepartnerandhavingsuch partneragreeto ing throughapartnership.Simultaneously, Ialsoneedtoassessthefeasibility of afewyearstiedwiththegeographicspreadthatwecouldachieve byenter- be sharedbutsowouldprofits. Again Iwoulddevelopthisoveratimeperiod profit analysiskeepinginmindthatsomeofthecosts,suchasmarketing,might gins thatcanbeexpected.Forthesecondoption,Iwouldalsodocostand look attherevenuesidetodeterminebreakevenrequirementsandprofitmar- with howmanylocationswethinkmightopen. Apart fromthecosts,I’d marketing andsoon,developthisoverathree-orfive-yearplantiedin costs ofsettingupindependentoperations—acquiringlocations,hiringstaff, tions. Forthefirstoption,I’dliketounderstandwhatwouldbefinancial Interviewee: Firm: acted alone. might allowustoenterthemarketinamorewidespreadmannerthanifwe ate partner, enteringthroughajointventureislikelytobelessexpensiveand think aboutlocationstoenterthemarket. Assuming wecanfindanappropri- Interviewee: Firm: second entryoptionidentified,whichwastocomeinthroughajointventure. Interviewee: already deduced.) poorly ifyoudo.You mightbeabletousesomeoftheinformationyouhave (Don’t forget there wasasecondoptiontobeexplored. Itwillreflect very client shouldtrytoenterthemarketinregionsidentified? Firm: Could youclosethecasebywrappingupyourrecommendations? So howwouldyoudecidebetweenthesetwooptions? Sure. Howwouldwegoaboutdoingthis? No, assumetherearenosuchbarriers.Soyourecommendingthe LIBRARY CAREER I thinkthecustomeranalysiscanbereusedoverheretohelpus I thinkneedmoreinformationtochoosebetweenthetwoop- Before reachingarecommendation,Ialsowanttolookatthe I wouldrecommendtotheclientthatthereispotential © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat IT BenchmarkingandBusinessAlignmentCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. presentation totheCIO’s staff in weeksixorseven,schedulespermitting. with aninterimprogressreport fortheCIOduringfourthweekandafinal Firm: tations ofthedurationstudy. in mind.Sincetimeisalwaysanimportantfactor, let’s startwithyourexpec- marking studyforyou,andIameagertofindoutmoreabout whatyouhave Interviewee: how youplantostructureandperformthebenchmarkingstudy. ing withamemberoftheCIO’s staff toplanyourfirm’s approach.Sharewithher You havebeen assignedtotheprojectteamforyourfirm,andyouhaveameet- in termsofhowIT investment isbeingusedtoimprovekeybusinessprocesses. into howthismanufacturercomparestoitsprimarycompetitors—specifically, several consultingfirmstoperformabenchmarkingstudy provideinsight dustry parlance,OEM—originalequipmentmanufacturer). The CIOhasasked A newCIOhasjustbeenhiredby a large automotivemanufacturer(orinin- for theinterviewertobringoutchartsortablesintroducethisdata. market sizingfiguresandcostrevenuenumbers;youshouldbeprepared case couldhavealsobecomemorequantitativeiftheinterviewerbroughtup adapt toitshowyoucangobeyondjustskimmingthesurfaceofissues. The need torecognizewhentheinterviewerhasguidedyouintoadeepdiveand The interviewermovedintosomedepthand,asmentionedinthecase,you less foryourclient. erational partofthings,youmaybedoingalotworkthatisultimatelyuse- growth objectiveidentifiedbythecompany. Ifyoujumpedstraighttotheop- analysis indicatesthatenteringtheCanadianmarketmighthelpachieve ket entrydecision.Ofcourse,thesecondpartisonlyrequiredifmarket This casehastwoparts. The firstisamarketanalysisandthesecondmar- Case analysis Firm: analysis Ijustdescribedforbothoptions. venture partner. The decisionmayactuallybequiteobviousoncewedothe Thank you. We areexpectingafinalreportapproximatelysixweeks fromtoday, Our firmispleasedtohavebeeninvitedperformthebench- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 77 Customized for: Jessica ([email protected]) 78 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Firm: Interviewee: Whatisthepercentageofrevenue today? imately 1.25percentofrevenue. Firm: Interviewee: tiveness ofIT insupporting the business. lowing objectives:1)reduceoverallspendingonIT, and2)improvetheeffec- Firm: this studybyyourCIO? Interviewee: by thestudyare nowconfirmed.) (The namedcompetitorsandtheprimarybusinessprocess areas tobetargeted perience. Firm: Interviewee: companies A throughF. Firm: data, whodoyouconsidertobeyourprimarycompetitors? Interviewee: Nowthatwehaveclarifiedthedurationandexpectedsourcesof the process bywhichyou’llgatherit.) (Now youhavedeterminedtheclient’s expectationastothesources ofdata,and erating executivestobeoutsidethescopeofstudy. firm’s experienceintheautomotive industry. Soweconsiderinput fromourop- study isfeasible,evenifbasedonsecondaryresearchandtheinsightsofyour be coveredquiteheavilybythemedia. We feelcomfortable thataninsightful publicly availableresearch.IT andbusinesstrendsintheautoindustrytendto sources fromwithineachconsultingfirm’s autopracticeandfromsecondary, Firm: establish somebaselinedataaboutthecompany? plore, willsubjectmatterexpertswithinyourcompanybeavailabletohelpus amount ofdata.Oncewedeterminethemostimportantareasneedtoex- Interviewee: A benchmarkingstudywilltypicallygatherapotentiallylarge (You havenowverifiedthetimehorizonforstudy.) My boss,theCIO,hasamandatefromboardtoaccomplish thefol- The metricweareusingistoreach anIT spendamountthat isapprox- Roughly 1.75percent. We expectthebenchmarkingstudytobeperformedbasedonprimary Product development,manufacturing,supplychainandcustomerex- Including thiscompany, therearesixmajorplayersofinterest—i.e., LIBRARY CAREER Before wegofurther, canyousharewithme theintendeduseof What arethekeybusinessprocessareasofinterest? Is thereanumericaltarget for spendreduction? © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. to revenuegrowth. The secondisthedegreetowhich aninitiativehasthepotentialtocontribute gree towhichanygiveninitiative willcontributetooperatingcostreduction. Firm: environment? the business.SohowisreturnonIT investmentdeterminedinyourcurrent Interviewee: tough timejustifyingthespendinglevel. a difficult timequantifyingits value. They knowtheyneedit,buthavea on technologyasawaytoimproveproductivity, buttheyhavehistoricallyhad Firm: geting? Interviewee: vestment ininformationtechnologyisalwaysatarget forcostreduction. in theautoindustry. A firmofthissizespendsalotonIT, andthereforeourin- Firm: ing hisagenda? business—can yousharewithmewhatenterprise-levelchallengesmaybedriv- Interviewee: TheCIO’s objectivesareobviously drivenbytheneedsof a whole.) a neededframeworkforthedatayou’llcollectongroup ofcompetitors as areas. Thedegree ofexpectedreduction isalsoknown,whichinturnprovides amount andshare ofoverallIT spend consumedbyeachofthetargeted process (The personalobjectivesoftheCIOare nowconfirmed,asisthe relative you andyourcompetitors. back tothatafterweestablishadata-gatheringframeworkmakessensefor to knowaboutrecenttrends(i.e.,increasing,decreasingorflat)butI’llcome Interviewee: infrastructure. consumes 20percent. The remaining20percentisspentonotherprocessareasand ing consumes30percent;supply10percent,andcustomerexperience Firm: business processareas—isthisinformationreadilyavailable? Interviewee: Twenty percentofIT spendingoccursinproductdevelopment;manufactur- The executiveswholeadtherespectiveprocessareashavecome torely The searchforcostreductionopportunitiesisprettymuchafactoflife We evaluateIT investmentfromtwoperspectives. The firstisthede- Let’s lookattheallocationofIT spendingtoeachofthetargeted At thehighestlevel,anyinvestmentneedstoproduceareturn to Thanks verymuchforthisbaseline.Laterinthestudy, I’llneed How isIT valuedwithinthebusinessprocessareaswearetar- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 79 Customized for: Jessica ([email protected]) 80 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Interviewee: ization isyettobeachieved.) established thatthebulkofinvestment isbehindthem,andthatbenefitreal- from its IT investmentintheproduct development area. Inaddition,youhave (You havequantifiedtheamountofimprovement thebusinessexpectstogain mented. Butwebelieveourgoalsareachievable. Firm: of overallIT spendgoinginto thisarea? Interviewee: global productdevelopment. ment ofadvancedsoftwaretoolsandtheinfrastructurenecessary tosupport Firm: product developmentarea? Interviewee: Atahighlevel,whatistherecenthistoryofIT investmentinthe ment ofbetween26and52weeks. processes havetakenfulladvantageoftheIT, weexpectadditionalimprove- reduction intime-to-marketforavehicleprogramof12weeks.Onceour Firm: are beingusedtodefinetheimprovementyouhopeachieve? Interviewee: shorter amountoftime. Firm: is theprimarychallengeinareaofproductdevelopment? Interviewee: evaluates IT initiativeshasbeenestablished.) the contextofenterpriseviewIT isnowknown,andthewaythiscompany (The objectivesdrivingtheCIO’s motivationtoperformthestudyare identified, portant asamarketingimagetothecar-buying public. nology isnotonlyimportantinternallytoimproveprocesses,itvitallyim- Firm: It’s veryimportant—creatingareputationforinnovativeuseoftech- their competitors? ternal customersoftheCIO)attachtoIT strategiesbeingimplementedby Interviewee: We havejustcompletedaroundofmassiveinvestmentsinthedeploy- Our assumptionisthatourinvestmentinIT willresultinaminimum It’s abitearlytotell,sincethetoolshaveonlyrecentlybeenimple- Reduced time-to-market,i.e.,bringingnewproductstomarketina LIBRARY CAREER Let’s lookatthebusinessprocess areas inabitmoredetail. What What resultshavebeenachievedtodate,basedonthe20percent What istheprimarymanufacturing challenge? How muchimportancedotheoperatingexecutives(i.e.,in- Since time-to-marketissuchanimportantaspect,whatmetrics © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. term contracts. tation thatourcostswillbereduced byleveragingincreasedvolumeandlonger- Firm: Interviewee: Whatareyoudoingrightnow to achieveIT costreduction? Firm: ture inlinewithyourexpectationsofthedeliverablesstudy? supply chainandcustomerexperienceprocessareas. Are exhibitsofthisna- we proceed,willcomebacktoestablishappropriateframeworks forthe factor incontributingtotherelativestrengthofeachcompetitor’s ranking. As strength ofeachprocessareabycompetitor, andalsotheimportanceofIT asa your competitors. We willcreateaseriesofchartsdepictingtherelative gathering data,ultimatelyprovidingyouwithcomparativeinsights regarding in eachareawillvary. Therefore, wewillbegintoconstruct frameworksfor signed togenerateinsightsforthestudy. Again, theperformanceparameters spective businessprocesses,thendevelopingaranked,normalizedmatrixde- approach willincludeobservingtheparameterseachOEMuseswithinitsre- Business performanceparameterswillvarybyprocesswithineachOEM.Our and alsoshowyouwhereyourcompanyiscomparedtoothers. a patternisbeginningtoemerge thatIbelievewillfacilitateourdatagathering, discussed thehigh-levelproductdevelopmentandmanufacturingprocessareas, Interviewee: what someofthedeliverableswilllooklike.) rameters. Inaddition,younowhaveenoughhigh-levelstructure to describe process area islikelytohaveitsownuniqueperformancemeasurement pa- velopment andmanufacturingareas, youare nowabletoconcludethateach (Based ontheinsightsyourclientshared withyouregarding theproduct de- just tolowerspendinginIT. Firm: creasing, decreasingorflat? Interviewee: content/car within24months. Firm: been achievedtodate? Interviewee: Giventhe30percentofIT spendinthisarea,whatresultshave tomated assemblyandmaterialhandlingtechnology. Firm: Laborcostpervehicle—therefore,wecontinuetoinvestmainlyinau- Yes, Ithinkyouareontherighttrack. Given thepressuretoreduceIT asacategory, weexpecttohavead- We aretryingtogivemorevolumefewersuppliers, withtheexpec- We areontracktoachieveourgoalofa20percentreductioninlabor Moving forward,whatisthelikelyIT spendtrajectory, i.e.in- Thanks verymuchforyourguidancesofar. Nowthatwe’ve Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 81 Customized for: Jessica ([email protected]) 82 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews engagement.) works youhaveinmind.You are nowsufficientlyprepared tobeginthe dation from theclientastousefulnessofsomeprimarydeliverableframe- client hopestogainfrom thestudy. Inaddition, youhavegainedhigh-levelvali- ogy, thedatatobegathered, thetimeframe forcompletionandtheinsights At thispoint,youhavequantifiedtheclients’ expectationsforthestudymethodol- spending amongthem. pliers, andwhatrationaleyourclientintendstousereallocate themixof (You nowhaveaperspectiveofthecurrent allocationofIT spendtothesup- us adifferent perspectivewill beconsideredvaluable. Firm: pursuing. Doyouwishtoknowwhattheseare? identify any“bestpractice”IT strategiesorinitiativesthatleadingfirmsare sights inthisarea.Duringthecourseofstudy, itmayalsobeimportantto process strengthisclear, andIbelievethestudywillproducesignificantin- Interviewee: our IT expenditurestoamorediversesupplierbase. sults theyhaveachieved. This willserveasapotentialmodelforreallocating to whatthesesuppliershavebeenabledeliverourcompetitors,andthere- Our hopeisthatthebenchmarkingstudywillprovidesomeinitialinsightsas in termsoftheirabilitytosupportourbusinessprocessareasonaglobalbasis. Firm: ing withyourcurrentdominantsupplierwillbereallocated? Interviewee: ing isallocatedtoourCIO’s organization. area—they consume20percentofthespending,and10spend- Firm: Interviewee: goes toonesupplier. Firm: ment goestoeach? your primarysuppliersare,andwhatrelativeshareofoverallIT invest- Interviewee: Definitely. Any relevantinsightsyourstudycanproducethatmaygive We feelwewillneedtoassesstherelativestrengthsofourIT suppliers We areheavilyoutsourced;soatpresent,70percentofourIT spend The majorplayersareallrepresented,varyingbybusinessprocess LIBRARY CAREER Do youhaveapreconceivedstrategyastohowthecurrentspend- The importanceofIT investmentasadriverofrelativebusiness Let’s examinetheIT supplierperspective.Canyoutellmewho How manysupplierscomprisetheremainingIT expenditures? © 2008Vault.com Inc. Customized for: Jessica ([email protected]) IT OutsourcingStrategyCase Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. just howmuchyoustandtolose? tomer. Haveanyassumptionsoranalysesbeendevelopedtohelp youquantify you realisticallythinkface intheupcomingnegotiationswithyourcus- Interviewee: with theboardofdirectors. allow forvariousreviewcycleswithourC-levelexecutives and, potentially, but weneedtohaveourstrategynaileddowninternallywithin fivemonths,to Firm: sults ofthisprojectcanbeputintoplayaseffectively aspossible? critical calendarmilestonesweneedtobeawareof,sothat ensurethere- fort toretainorgrowthisimportantpieceofbusiness.First all,whatarethe Interviewee: the forthcomingbidprocess. brainstorming astowhatinsightsareneededstrengthen ABC’s responseto detail, todevelopahigh-levelengagementapproachanddosomeinitial come istounderstand ABC’s situationasthecompanyperceivesitingreater ing with ABC’s executive-in-charge forthisclientaccount. Your desiredout- You havebeenassignedtotheprojectteamforyourfirm,andyoua meet- informed decisionsaboutwhereitshouldinvest,divestor“staythecourse.” ferings arewinners,losersorsomewhereinbetween,soastobeablemake ultimately desirestohaveafact-basedperspectiveonwhichofitsserviceof- of thefuture”thatitwillsoonseerepeatedwithitsothermajorclients. ABC ice lineswillcontinue,andthereforeitviewsthisclientopportunityasa“wave ABC believesthetrendtostructureoutsourcinginitiativesbystandardizedserv- standardized serviceofferings thecustomerislikelytospecify. Inaddition, in developingaviewofitsbusinesswiththiscustomer, orientedaroundthe of servicesitprovidestoeachcustomerunit. ABC wouldlikeyourassistance ious businessunitsofitscustomer, ithasaverypooroverallsenseofthemix has detailedinformationregardingitsmanyindividualcontractswiththevar- tured withinaseriesofstandardizedserviceoffering categories. Although ABC petitors. Inaddition,thecustomerhasannouncedthatbiddingwillbestruc- of thebusiness ABC currentlyenjoys willbeavailableforbidsby ABC’s com- petition foritsIT-related business. The customerhasindicatedthat100 percent The customerhasnotified ABC ofitsintentto“leveltheplayingfield”com- provider, isnearingtheendofalong-termcontractwithitslargest customer. Your client, ABC Corp.,alarge informationtechnologyoutsourcingservice We haveeightmonths untilthestartofnegotiationswithourcustomer, Our firmispleasedtohavebeeninvitedcontributeyouref- I wouldliketounderstandalittle moreabouthowmuchrisk Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 83 Customized for: Jessica ([email protected]) 84 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews organized? Interviewee: Whatisthenatureofservices youprovide,andhowarethey one degreeoranother, bythesecontracts. perspective, mostorallofthe IT servicesprovidedby ABC areconsumedto way thecustomer’s profitcenters areorganized. Fromanindividualdelivery into aseriesof10individualservicecontracts,whichclosely alignwiththe Firm: basic detailsofwhatthisbusinesslookslike? the starttounderstandbasics.Canyousharewithmesome specific,yet Interviewee: the majorservicelinesyourclientdelivers.) analysis of,atminimum,where theriskliesbycustomerbusinessunitand (You alsonowknowthatsignificantworkmustbedonetocreate asensitivity Firm: risk? does yourleadershipteamhaveasenseofwhichunitsorservicelinesaremostat Interviewee: Eitherbycustomerbusinessunitortheservicelinesyouoffer, Firm: most risk? Interviewee: analytical phaseoftheproject.) nition andswitchingcostsare keyfactorsthatneedtobeconsidered withinthe (You havenowconfirmedwithyourclientthatunitpricing,serviceleveldefi- more competitorsenmasse. we believeourcustomermaybereluctanttodivertitsbusinesswithusoneor in certainareas,whichcouldworkourfavor. Therefore, inmission-criticalareas, ice leveldefinitions,webelieveourcustomerwillhavesignificantswitchingcosts Firm: and ifso,whichonescanyouinfluencemost? Interviewee: our lossexposuretocompetitorsrangesbetween10and25percent. to justifywhateveractionswetake.Ouroperatingassumptionrightnowisthat ing tothisprojecthelpusquantifytheriskagranularlevel,andthusbeable Firm: We areanticipatinglosingacertainamountofbusiness,andwelook- This isamongtheinsightsweareexpectingtogainfromthisproject. Please clarifywhatyoumean. Aside fromobviousfactorssuchasunitpricebenchmarkingandserv- Our masterserviceagreementwiththiscustomertodaybreaks down LIBRARY CAREER We willnodoubtdive deeperintothislater, butit’s importantat Have youidentifiedthekeyfactorslikelytodriveoutcome, Do youhaveasenseofthepartsyourbusinessthatface © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. are managingdeliveryoftheservices. structure ofthebusiness,andwho hasstrongrelationshipswiththepeoplewho Interviewee: largely full-timebasis,asneeded. within theirrespectiveorganizations tocommitworkonthisprojecta Firm: identified whofromyourorganization shouldworkonthiswithus? process bywhichwecanworkwithyourteamtobeginthisproject. Haveyou the insightstobestmanagedecisionprocessthatliesahead. Let’s discussthe you aretoday, thechallengesyoufaceandkindofanalysesneededtogive Interviewee: ganization, majorprocessesandourservicelines. greater senseofwhowewillfaceacrossthedimensionsour customer’s or- Firm: business thesecompanieswillattack? Interviewee: most significantcompetitionwillcomefromcompetitors A throughD. casional competitivebiddingwehaveseenwithourcustomertodate,believethe Firm: Basedonourcompetitiveexperienceinothermarkets,aswellwiththeoc- Interviewee: project.) a setofassumptionsaboutthetasksanddeliverablesthatwillneedtobepart tomer’s businessunits,potentiallymanyothersare not.Thisallowsyoutodevelop although someoftheservicesyouwillbeanalyzingare standardized across thecus- (You havenowquantifiedthenumberofbusinessunits.Inaddition,youknowthat we arelookingtothisprojectprovidesomeinsight. “cats anddogs”servicesthatvarysignificantlyfrombusinessunittounit, Firm: able youtoseeprofitandlossbyserviceline,acrossthecustomer’s businessunits? Interviewee: consolidation. these offerings toseeifcommondenominatorsexistthatwillsupportsomelevelof ered byourinfrastructuredeliveryorganization, weneedtolookcloselyatallof though someoftheseservicesarestandardizedacrossourcompany, andaredeliv- Firm: For thestandardizedofferings, wehavefairlyreliabledata.Regardingthe I agree.plantoaskeachmemberofmystaff toappointsomeonefrom We providemanydifferent servicestoeachofthe10businessunits. Al- Only ataveryhighlevel. We arelookingtothis project togiveusa I thinkwearegettingclosetounderstandingthelandscapeofwhere For thestandardizedservices,doyouhavemetricsinplacethaten- Who doyouconsidertobeyourprimarycompetitors? I suggestthatwehavesomeone whounderstandsthefinancial Do youhavesomesenseofwhichaspectsyourcustomer’s Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 85 Customized for: Jessica ([email protected]) 86 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews pants identifyingallcontributors andstakeholders. vide amajortasklist,timeline forcompletionandpreliminarylistofpartici- and theprocesswewilluseto create thedeliverables.Inaddition,Iwillpro- will describetheprojectcharter, organization, goals,illustrativedeliverables Interviewee: Firm: can feelcomfortableweareoff toastrongstart? formed throughouttheprocess.Doesthissoundlikeweareinagreement andyou the gaps.Inanycase,wewillkeepyourteam,guidancegroup andyourstaff in- very solid.Incaseswherethedataissoft,wewilldevelopvarious indicestofillin competitive actions.Insomecases,thefactswegetfromyourorganization willbe competitiveness byserviceline,yourcustomer’s businessunit,andbylikely Once wehaveafirstlookatthese,willdevelophypothesesaboutthebasisfor portunities thatmayarisetohelpyourcustomerachievetheirbusinessobjectives. planning ourdefenseofyourcurrentbusiness,wedonotwanttolosesightop- portunities mayexistforustofocusonaswegatherdatasupporttheanalysis.In business strategyanddirection. This willgiveusinsightastowheregrowthop- services stackupagainstlikelycompetitiveactions,wewilllookatyourcustomer’s deliver tothisclienttoday. Beforeweconsiderwhatitwilltaketoassesshowthese velop aseriesofchartsandgraphsthatcharacterizethefootprintservicesyou Interviewee: Firm: (You havenowestablishedaframeworkforproject organization andgovernance.) concepts illustratingthedeliverableswewillcreate. will beabletoreturnyoushortlywithamoredetailedapproachandsome Interviewee: estimate thetimecommitmentourpeoplewillneedtoplanfor? also theonesrunningbusinessonaday-to-daybasis. Will yoube ableto the factthatverysamepeoplewhohaveknowledgeweneedtotapare Firm: allocated totheprojectasneededdriveanalysis. function willbetoensurethattheprioritiesareset,andkeyresources Interviewee: Firm: Can yousharewithmewhatsomeofthesedeliverablesmightlooklike? Agreed. Yes. What doyouthinkweneedtogetstarted? As youdecidehowbesttoconductthisanalysis,pleasekeepinmind LIBRARY CAREER Definitely. Basedonthediscussionwehavehad,Iproposede- I alsoproposethatwecreateanexecutiveoversightgroup,whose I willprepareafewpagesonourdiscussiontoday. These pages Absolutely. Basedonthisdiscussiontoday, Iamconfidentwe © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Medical DevicesCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. further tofixingtheproblem. the interviewerwilllikelyhint up frontthattheintervieweeshouldpusheven does wantthefirmtoanswer questionaboutwhyprofitabilityhasdeclined, work todataanalysis,brainstorming andproblemsolving. While theclient This isaprofitabilitycase,but itmovesquicklyfromtheprofitabilityframe- The company’s• customersareprimarilyhospitalsandhospitalchains, butitalso The companywasasmallregionalplayerinthe SouthoftheUnitedStatesorig- • The companystartedoutwithasmallproductline-cottonswabs,hygienicswipes • • The companymakesmedicalsupplies. While theproductitselfisnotafocal Additional informationprovidedduringquestioning more thanthat. have decreased.Ithashiredustoexplainwhythatis,butintheendwetoldit fast growthhasbeengreat.Infact,itknowshasn’t: itknowsthatitsmargins having annualsalesof$2billiontoday. However, it’s notsurethatallofthis manufacturer anddistributorwithannualsalesof$100milliontenyearsagoto well. Infact,itsbusinesshasgrownfromasmall,regionalmedicalsupplies Our consultingfirmhasbeenhired. The clientisveryprofitableanddoing begin theengagement.) have inmind,andthetimeframerequired. You are nowsufficientlyprepared to the clientastohowusefulare someoftheprimarydeliverableframeworksyou tive project execution.Inaddition,youhavegainedhigh-levelvalidationfrom comes oftheproject atahighlevel,andtheprocess youwillusetoensure effec- (At thispoint,youhaveidentifiedtheclient’s current situation,thedesired out- gional area. serves somelarge physician grouppracticesandclinics,dependingonthere- inally. Now, itservesall50statesandsomehospitalsinCanadaMexico. syringes, plasticcontainersforbloodandotherbodilyfluids,etc. dously toincludedisposablesurgical clothing,surgical packswithsteriletools, and medicatedtissueswerethebasisofitsproductline.Ithasexpanded tremen- swabs, gloves,etc. company makesproductslikesurgical packswithcleansurgical tools,syringes, point forthecase,ifintervieweeasks,interviewerwilltellthemthat Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 87 Customized for: Jessica ([email protected]) 88 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews rious astowhy and howtoreversethattrend? It hasseenitsprofitabilitydecline asthecompanyhasgrown,andit’s justcu- Interviewee: that youwerelookingfor? tices andclinics,dependingon theregionalarea.Doesthatgiveyousense pitals andhospitalchains,butitalsoservessomelarge physiciangroupprac- Firm: It showstheinterviewee’s knowledgeoftheindustryandusecomparables.) know whothecustomersare, he/shethrows incomparables—pharmacompanies. descriptions. Forexample,eventhoughtheintervieweewould really justliketo (One thingthat’s great tododuringthisinitialquestioning istodrivesomeofthe or tosomeoneelse? customers are?Imean,doesitmarkettophysicianslikepharma companiesdo, Interviewee: Mexico. But,forthepurposesofthiscase,justfocusonU.S. States originally. Nowitservesall50statesandsomehospitalsinCanada Firm: market—or shouldIconsiderothermarketsaswell? Interviewee: tainers forbloodandotherbodilyfluids,etc. able surgical clothing,surgical packswithsteriletools, syringes, plasticcon- the basisofitsproductline.Ithasexpandedtremendouslytoincludedispos- small productline—cottonswabs,hygienicswipesandmedicatedtissueswere surgical tools,syringes,swabs,gloves,etc. The company startedoutwitha Firm: tor ofmedicalsupplies. What kindofsuppliesdoesitmake? ness works. You said thatitwasasmall,regionalmanufactureranddistribu- Interviewee: Firm: analyses andqualitativeevaluations) Breakdown ofsolution(includingquantitative problem andimplementasolution,whichiswhatsomefirmsarelookingfor. case pastjuststructuringandsolvingthequestiontoactuallytrying“fix” for theresultingdata.Italsoisagreatexampleofhowanintervieweecantake This isagoodcaseforpracticinglookingatdataandbrainstormingdifferent causes Sure, thatmakessense.Itproductslikesurgical packswithclean First, doyouhaveanyquestions? That’s agreatquestion. The company’s customersareprimarilyhos- The companywasasmallregionalplayerintheSouthofUnited LIBRARY CAREER Yeah, that’s great. And justsoI’mclearontheclient’s question: And beforeIgetstarted,canyoujustgivemeasenseofwhoits Yes, Iwanttomakesurethatunderstandhowtheclient’s busi- Great. And I’massumingthatwe’re focusedonlyontheU.S. © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. the discountsthatit’s givingtoitscustomers. What doesthis data tellyou? Firm: That’s rightontrack.Letmeshow yousomedatathatwecollectedon creased. Hasanythingchangedintermsofprice?itgonedown? in termsofregionsandcustomers,I’mgoingtoassumethatunitssoldhasin- Interviewee: After weeliminatedcosts,thatleftrevenue. What wouldyoulookatthere? cost base—so,that’s actuallynotwhere theansweris,butit’s agoodhunch. the answeractuallylies. The clienthadkeptagoodeyeonitscosts—and grew—and theCsuiteofclienthadlookedatthat,too—butthat’s notwhere Firm: shows thatyouare really drivingthecase.) to lookintoandyourhypothesisaswhythatmightleadtheanswer—it easy andcleartostructure, it’s agoodideatosuggestwhichleveryou’dlike (The structure forthecaseisspoton.Butbecauseprofitability casesare so to expansionthathasmadeitlessprofitable. I’m wonderingifwhilethecompanyhasgrown,it’s hadtoincursomecostsdue might haveledtoerodingprofitability. I’dliketostartonthecostsside,as and costs—tounderstandwhethertherehavebeenchangesoneithersidethat Interviewee: (A fewminutesgoby…) Interviewee: Great—thanks. free totakeafewminutescollectyourthoughts. Firm: Unit Sold 100 - 150 - 200 - 250 - 300 - That’s great. And weactuallylookedatexpansioninitscostbaseasit That’s right—now, howwouldyoutrytoanswerthatquestion?Feel 50 - 0 - Exhibit 1:UnitsSoldbyDiscount Well, revenueispricetimesunits.Sinceitsbusinesshasgrown I wouldwanttolookatthetwoleversofprofitability—revenue Vault CaseInterviewPracticeGuide2:MoreInterviews er1Ya er3Year4 Year3 Year2 Year 1 www.vault.com/consulting — within- LIBRARY CAREER Discount 5% Discount 10% Discount 15% Discount 20% Sample Cases 89 Customized for: Jessica ([email protected]) 90 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews you wanttoseehere? Firm: client’s question. bringing downitsoverallfee average. Ithinkthisshowstheanswerto its large clients,butit’s probablydestroyingmargins onitsmidsizedclients,and tomers, nottoitslargest ones. This maybekeepingtheprofitabilityhighon giving someofthehighestdiscountsonitsfeestomidsized andsmallcus- Interviewee: that datatellyou? Firm: higher onmoreoftheirsales,whichiswhyitsprofitabilityeroding. cent) 60percentweresoldatthehigherdiscount.So,they’rediscounting were soldatthehigherdiscount,andin Year 4,itlookslike(150/250=60per- Interviewee: Firm: almost 150ofthoseweresoldatafiveto10percentdiscount. Whereas, in Year 4,itlookslikethenumberofunitssoldgrewto250,butonly total, andabout110 ofthoseweresoldatafiveto10percentdiscount. count hasgrownovertheyears.In Year 1,itlookslike120unitsweresoldin Interviewee: % Discount 11 12 13 14 15 16 17 18 19 20 So, whatpercentweresoldatthehigherdiscountin Year 1vs. Year 4? Sure. Nowhere’s anotherquestion:ifyouweretheclient,what would That’s right.Now, letmeshowyouanotherpieceofdata. What does LIBRARY CAREER Exhibit 2:DiscountbyCustomer Relationship $ SizeofCustomerRelationship(in‘000s) Well, it’s notwhatIwouldexpect.Itlookslikethecompany is Well, itlookslikethenumberofunitssoldunderahigherdis- Well, in Year 1,itlookslike(10/120=8.3percent)8.3percent 10 100 1,000 10,000 © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Firm: made senseforitsprofitability target. pany wouldliketosetacapat 15percent—oratleastfigureoutacapthat cent discount,butby Year 3,20percentseemedto bethecap.Maybecom- right now?Imean,in Year 1,itlookedlikemostsalesdidn’t goovera10per- Interviewee: Firm: I mean,they’reprobablynotawarethatdoingthisas a whole. of trainingsothattheycanseehowthey’reaffecting company’s profitability— Interviewee: tions—it’s acreative/short brainstormingtest.) (Here, the intervieweristestingintervieweetocomeupwithmore solu- would youdo? because ittakesawhileforpeopletoadjustbusinesspractices. What else ple’s contracts;theyoftenneedayear totakeeffect afteryouputtheminplace, client. Butincentivesarehardtochangeovernight,becausethey’reinpeo- Firm: are usuallyincentedon. low discounting,aswellrevenuetargets, whichIthinksaleforcemembers Interviewee: into. Knowingthat,howmightyoutrytofixtheproblem? clients thansaysalesmeninotherregions,wherethecompanywasexpanding where thecompanywasfounded,weregivingmuchlowerdiscountstotheir and thatthiscorrelatestoregionalarea.ItturnsoutsalesmenintheSouth, ically, anditturnsoutthatthere’s highvariationtodiscounting by salesperson, Firm: a orcertainclienttype,likehospitalclinicchain. whether theclustersofdiscountsrepresentacertainsalesman,region ters ofdiscountsbyrelationshipsize,orevendiscountsize—Iwonder the discountsaregiven—Iwonderwhatisdrivingthem. There areafewclus- fact, itlookslikeit’s doingthereverse.Second,itseemsprettyrandomwhere like volumediscounting.Here,itdoesn’t lookliketheclientisdoingthat—in be givingthebiggestdiscounts,ormosttomylarger clients— Interviewee: the exhibittoillustratehisorherpoint.There are three ideasbelow.) (Here, theintervieweeshouldgenerateanideaortwo—maybeevendrawon That’s great. We wentoverthisdataandlookedintotheclustersspecif- Yup. That’s great,andthat’s exactlywhatwesuggested. That’s right—trainthem.Now, whatelse? Yep—incentives aregood,andwedefinitelyrecommendedthattothe I mightalsosharethisnewdatawiththesalesforceinsomesort I wouldmakesurethatallofsalesforceincentivesweretiedto Well, Iwouldwanttoseeafewthings.First, I mightmakeacompanywidediscountcap.Doesithavethat Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 91 Customized for: Jessica ([email protected]) 92 NGO PartnershipCase Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews positive imagein thisareaisbecomingimportant becauseofincreasingmedia Firm: Interviewee: Firm: you tellmeaboutthepartnershipitself? Interviewee: sessment aboutwhethertheNGOisanappropriate partnerforyourclient.) partnership. Understandingwhatitisaboutmayhelpyoulater in makinganas- you shouldhavenoteddownthoseactivities.You alsowanttolearnaboutthe (You nowknowalittlebitaboutthestakeholders involved.Ifyouhavesomepaper and advisesdevelopinggovernmentsonthingslikesocialpolicy. opment work.Itrunseducationprograms,grassroots-leveldevelopment work, Firm: TheNGOisalsoquitelarge andisinvolvedinvariouskindsofdevel- kind ofworkisitinvolvedin? Interviewee: as mailservicesinseveralcountries.Itsannualrevenueisover$10billion. Firm: in? volved. Couldyoutellmeaboutourclient? What businessesdoesitoperate Interviewee: them. stakeholders—your clientandtheNGO. Your firstgoalshouldbetounderstand tion buthavebeengivenverylittleinformationabouteitherofthetwomain From thebeginning,youshouldrealizethathavebeendescribedasitua- partnership foryourclient. What doyoudo? partnership canprogress,andwhetherornotthisNGOisevenanappropriate You havebeenaskedtoworkwithbothorganizations tounderstandhowthis they bothoperate. sides havenowagreedtotrylaunchsomethinginadevelopingcountrywhere tions, therehasbeennoprogress,leadingtofrustrationonbothends.Both the partnershipwasdefinedonlyataveryhighlevel,anddespitebestinten- an NGOoperatinginseveralcountries. At thetimeagreementwassigned, Your clientisaglobalmultinationalinvolvedinone-year-old partnershipwith What wouldyouliketoknow? The clientwantedtogetinvolved withanNGOforseveralreasons. A The clientisinvolvedininternationalgroundandairlogisticsaswell LIBRARY CAREER I nowunderstandalittlebitaboutourclientanditspartner. Could Could youalsotellmeabouttheNGOit’s partneredwith? What Why didbothgroupsenterinto thispartnershiptobeginwith? I wouldfirstliketounderstandthedifferent stakeholdersin- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. would needtobeverymuchin linewithwhatitdoes. isting program. The NGOwouldalsonotbeaversetosomething new, butit Firm: develop somethingnew. client eitherbecominginvolvedintheNGO’s ongoingprogramsorworkingto Interviewee: Firm: partnership withtheNGO. portunities, Iwouldtrytoevaluateiftheclientshouldconsider dissolvingits the goalsofbothorganizations. Ifwedeterminetherearenosignificantop- if thereareopportunitiestodevelopthispartnership,keeping in mindsomeof I wouldliketocontinue,usingthefollowingstructure. firstliketosee Interviewee: forward. Present astructure forhowyouplantoworkthrough thisanalysis.) background informationandshouldstartanalyzingwhathappen going NGO isnottherightonetopartnerwith.Bynowyouhavealotofinteresting company isgoingtohavelookforsimilarlylarge partnersifitdecides this thing thatcanbeduplicatedindifferent partsoftheworld.Thisalso meansthe interested intakingadvantageofeachother’s sizeandtryingtolaunchsome- ing aclassroom maynotappealbecausetheyare notunique.Bothpartiesare marketing purposes. Also, thetypicalsolutionsofmonetarydonationsorbuild- to useitenhanceitscorporateimage—i.e.,possibleofanyresults for pany notjustbecauseitisagoodthingtodo,butthecompanywants (You learnedalotofinformationinthatanswer. CSRisimportant tothecom- ferent partsitstheirworld. is, asuccessfulpartnershipwithglobalcompanycouldleadtoworkindif- sizes ofcompaniesbutwasattractedinthiscaseforverysimilarreasons—that to supportitswork,eitherfinanciallyorinkind.Itpartnerswithallkindsand As farastheNGOisconcerned,it’s alwayslookingforprivatesectorpartners and itwasn’t lookingfornewprojectsorpartnerseveryfewmonths. ble NGOsothatprojectscouldbesustainedoverasignificantperiodoftime prefers touseitsexpertisedosomethingunique.Itwantedalarge andsta- It didnotwanttojustgivemoneyfixabuildingorpaintclassroom;it ing forapartnershipthatcouldbevisibleinseveraldifferent partsoftheworld. NGO becauseofitsglobalreach.Beingacompanyitself,itwaslook- and consumerattentiontoCSR—corporatesocialresponsibility. Itchosethis I donotthinktheclient’s firstchoicewouldbetopiggybackonan ex- OK, that’s fine. I thinkunderstandsomeofthecontextcurrentsituation. Opportunities todevelopthispartnershipcancomefromour Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 93 Customized for: Jessica ([email protected]) 94 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews would liketoexplorethesefurther. NGO’s workincommunicationoreducationwiththeclient’s mailbusiness.I the client’s expertiseinlogistics. Another potentialareamaybeinpairingthe stands outtomeisthecombination oftheNGO’s workintransportation and Interviewee: one, incaseyourinterviewerwantstoexplore different alternatives.) mail business.Itisbettertoidentifytwoorthree possibilitiesratherthanjust munication oreducation—thiscanbepaired withtheclient’s expertisefrom its client isinvolvedinlogistics]. A weakerpossibilityistheNGO’s workincom- should standoutistheNGO’s workintransportationnetworks[giventhatthe ect itisquitelikelyyouwouldexplore mostofthem.However, theonethat (There are severalcombinationsthatcanbeexplored here, andinareal proj- Firm: minute toreviewitandseeifsuggestsavenuesexplorefurther. Interviewee: That’s asignificantamountofinformation. I’dliketotakea for afewminutestodothiskindofanalysis.) mation todetermineifanyofitisuseful.Donothesitateasktheinterviewer Part ofyourworkasaconsultantwillbetosiftthrough vastamounts ofinfor- there isanythingthatstandsoutinthecontextofclient’s core competencies. now beengivenalotofinformationabouttheseactivitiesandshouldseeif the activitiesofNGOtosearch foropportunitiescooperation. You have (OK, pause.You hadearlierbeengivenahintthatyoumayneedtofocuson occasion theywillproactivelydevelopproposalsforconsiderationaswell. with governments,itisoftenbecausethegovernmenthasinvitedthem,buton policy butnotactuallybecomeinvolvedincarryingitout. When theywork necessary approvals.Italsomayadvisegovernmentsondevelopmentorsocial volves thelocalorstategovernment,eitherinimplementationtogain partners toprovideexpertsimplementtheprojects.Itsworkalsousuallyin- portation andcommunicationnetworks,etc.Oftenitinvolvesprivatesector of development,itworksinruralareas—buildingclassrooms,clinics,trans- ently andwiththegovernment. These canbeaboutalmostanything.Interms Firm: it worksin.CouldyoubemorespecificsothatIcanbetterunderstanditswork? Interviewee: it iswillingtoworkon.Thiscouldhelpnarrow yourareas ofexploration.) Another hintisthattheNGOlikelytobemore limitedthantheclientonwhat (Your interviewerisguidingyoutoexplore opportunitiesforanewprogram. Sure. Sure. IneducationtheNGOrunsseveralcampaigns,bothindepend- LIBRARY CAREER I wouldliketofocusontheNGO. You mentionedafewareas I feeltheremaybeafewdifferent areastoexplore.One that © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. site. Howwouldyoustructure yourworkonceyougetthere? Firm: number ofNGOscapableworking onaglobalscopeastheywantto. different partner. However, itneedstorealizethattheremaybeonlyalimited velopment ofasuitableprogram, theclientmayneedtoconsiderlookingfora opportunity incommunicationoreducation.Ifnoneofthese leadstothede- pertise withtheNGO’s transportation-relatedwork. There may beasecond mend ourclientexploreifthereisanopportunitytocombine itslogisticsex- Interviewee: what thenextstepsmightbe.) mendation. You shouldtrytosupplement yourrecommendation byproposing Even ifyoufeelonlyscratchedthesurface,needto makearecom- (The interviewermaywanttoendtheinterviewormoveanother partofit. your recommendation? Firm: (The interviewercouldgoinseveraldifferent directions atthispoint.) area orshouldweexploresomeoftheotherpotentialopportunities? case itmaybelimitedtoairports. Would youlike metodivedeeperintothis moving large quantitiesofgoodsthroughinternationalports,thoughinthis prove this.Beingininternationallogisticsourclientmayhaveexpertise ment. There maybeanopportunitytoexploreifanythingcandoneim- Interviewee: ing tracks) proceed. Iftheinterviewerresponds vaguely, youmayneedtoconsiderswitch- could suggestthisasaninitialhypothesistogaugehowtheinterviewerwants are ontherighttrackandinterviewermaywantyoutodevelopit further. You try andinanarea theclientmaybeabletoworkin.Thisislikelya sign thatyou (The interviewerhasgivenyouaspecificexampleoftheNGO’s workinthecoun- were stilllotsofproblems,buttheNGOhelpedalot. coordinated efforts atinternationalportsintheaftermathofahurricane. There nation, oftenneedsinternationalaidtohelprecover. The NGOhasinthepast in thisarea. The countryisquitepronetohurricanes,butbeingadeveloping Firm: No,notpresently. Butithas periodically workedwiththegovernment is thereanytransportationworkthattheNGOinvolvedin? Interviewee: Firm: No, let’s stophere.Basedontheinformation youhave,whatwouldbe Now, assumeyouhavegotthisfarbeforeevenstartedworking on I thinkthat’s reasonable. You mentiontherebeingproblemsdespitetheNGO’s involve- I wouldliketostartwiththefirstone.Incountryselected, Based onthepreliminaryinformationthusfar, Iwouldrecom- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 95 Customized for: Jessica ([email protected]) 96 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews limited information. you off ortoseehowyousummarizeandcloseadiscussion whenyouhavevery end totheinterviewmayseema bitabrupt,butthiscouldbeanattempttothrow ing processofwhetherornotto dissolveit.Intheversionpresentedabove, veloping thispartnership,andthen askingyoutoworkthroughthedecision-mak- been toquicklyguideyoutowards theconclusionthattherewaslittlescopeforde- to identifyseveralpotentialoptionsforthispartnership. A thirdoptioncouldhave The interviewercouldhavealsotriedtochallengeyourcreativity byaskingyou financial) requirementswithwhatthecompanywaswillingtocommit, andsoon. dive intoaparticularoption,i.e.,analyzingbusinessfit,comparing resource(HR, viewer couldhavehandledthiscaseinseveralways.Onewould betodoadeep an initialassessment,andformulatedastructureforprojectplanning. The inter- depth inanalyzingindividualoptions,butdirectedthediscussion towardreaching business objectivesoftheclient. The interviewerchosenottogointotoomuch ing partnership,andwhetherthereisanyvalueincontinuingwith it,giventhe This caseisaboutassessingwhetherthereanopportunitytodevelop anexist- Case analysis Firm: ect orruninparallelasasecondworkstream. options arefortheclient. This couldtakeplaceafterthefirstpartofourproj- work toassessfuturepotentialforthispartnershipandreviewwhattheother I wouldanalyzewhytherewasalackofprogressforsolong,usethephaseone uate thepartnershipregardlessofwhetherornotanysuitableprojectisfound. The secondpartofthisprojectis,Ithink,ourresponsibilitytotheclienteval- contribute tothecorporateimage,andsoon. for example,cantheworkofprojectbeduplicated,isoutputgoingto given theresourcesclientiswillingtocommitanditsbusinessobjectives— areas. Ifanyarefound,thethirdphasewouldbeassessingtheirsuitability centrate onlookingforprojectsthetwoorganizations canworkoninthese business andthenlookforareasofoverlap.Inthesecondphase,Iwouldcon- the NGO’s workindepth,theclient’s corecompetenciesbasedonitslinesof would confirmtheclientandNGO’s goalsforthispartnership,understand would workonthefirstpartinathree-phasestructure.Inphase,I and thesecondistoassessifthispartnershipcreatingvalueforclient.I parts tothisproject. The firstislookingforawaytofurtherthepartnership, Interviewee: Similartomypreviouslyoutlinedstructure,Iseetwodistinct you usedduringtheinterview, evenbetter.) (You needtooutlineahigh-levelworkplan.Ifyoucantieitintothestructure I thinkthat’s suitable. Thank you. LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Nonprofit BrandCase Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • (A • savvyinterviewee mightaskaboutthedifference betweenhavingtheboard • Because theclientisboardoforganization, andnotseniormanage- (If theintervieweeasks) The recentfinancialmismanagement heavilycovered • • The clientorganization hastraditionallyhadaveryrecognizablebrand,and The clientorganization servestwomainfunctions:1)itraisesmillionsofdol- • Additional informationprovidedduringquestioning us tohelpturnthataround.Howwouldyoustructurethis? of fundsthattheorganization hasraisedinthelastcoupleyears. They’ve hired that thebrandisstilltarnished—andthey’vealsoseenadeclineinamount and whiletheguiltypartiesarenolongerwithorganization, theboardfeels received somebadpressbecauseoffinancialmismanagementafewyearsago, them withabrandingproblemthattheorganization iscurrentlyhaving. They The boardofalarge, U.S.-basednonprofitorganization hashiredustohelp Case question/backgroundinformationprovided the case.) being questionedandshouldbe consideredaspartofthepotentialsolution should saythatitmeanssenior management’s role/judgment is definitely as theclientandseniormanagement astheclient.Ifasked,interviewer play. ment, theroleofseniormanagement—eventheirexistence—is definitelyin feels thatalotofthedamagelingers. story (asdidhisfamilymembersworkingattheorganization), buttheboard covered innationalprintandbroadcastpress.Heresignedat the timeof family membersandpayingthemincrediblyhighsalaries. This storywas business trips(stayingattheFourSeasonsandsuch),aswell asemploying in thepresswas:CEOoforganization wascaughtexpensinglavish try. still does.Brandawarenessandrecallisextraordinarythroughoutthecoun- disabled. gious communityorganizations servingthepoor, children,theelderly and the from “programmembershipfees”)amongstgrassroots,nonpartisan,nonreli- vides upthosefunds(plusthatitreceivesfromsomeinvestmentsand lars throughanextensive,countrywideumbrellaorganization, and2)itdi- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 97 Customized for: Jessica ([email protected]) 98 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews things abouttheclientand case? Before Istructurethatcase,can Igetabetterunderstandingofcoupleother is morecomplicatedthanjust donations fromdonors. That’s goodtoknow. Interviewee: Promotional servicesfees,orfeesthatitcollectsfromnot-for-profits andfor-prof-4) 3) Fees from“membershipdues” fortheprogramssponsoredbyclientorgani- 2) Halftheinterestfromorganization’s investments 1) Donationsfromdonors but thosefundscomefromfoursources: decline inthefundsthatithastodivideupbetweenitsmember organizations, zations servingthepoor, children,theelderlyanddisabled.So,it’s seena those fundsamongstgrassroots,nonpartisan,nonreligiouscommunityorgani- through anextensive,countrywideumbrellaorganization, and2)itdividesup client’s organization servestwomainfunctions:1)itraisesmillionsofdollars are notnecessarilyjustdonations.Letmeexplainabitaboutourclient. The Firm: a declineindonations? rectors hashiredustohelpthemwiththeirsomewhattarnishedbrand,and is anot-for-profit organization, notafor-profit corporation. The boardofdi- Interviewee: Breakdown ofsolution needed tomakeasolidrecommendationtheclient. four Psareutilizedthroughout,astheyleadinbesttothequantitativeanalysis to setthecaseup.Bothareshownforstructuringpartofcase,but a marketingcase,thefourPsandthreeCsarereallybeststructuretouse That beingsaid,thisisasimplebranding/revenueproblemcase.Becauseit niques inthenonprofitsettingthattheywouldafor-profit case. thermore, intervieweescanapplythesamecasestructuringandanalysistech- surprising forafirmtogivecaseinterviewwithnonprofitsetting.Fur- large nonprofitsinthesamewaytheyarebyfor-profits—so, itwouldnotbe a significantamountofnonprofitworkthesedays—manyalsoarehiredby profit corporation,whichmostcasesareabout.Still,manyconsultingfirmsdo It maythrowintervieweesoff, astheclientisanonprofitandnotstandardfor- its thatwanttousetheclient’s name/brandinitspromotionalmaterial orproducts zation Well, that’s mostlyright. They’ve seenadeclineintheirfunds—which LIBRARY CAREER Ah, interesting.So,theorganization’s revenue-generationmodel So, letmejustmakesurethatIunderstandthecase. The client © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. motional useofourbrand,ormaybe it’s somethingwithourdonors? the feesthatwecharge ourprogrammembers,orthefees we charge forpro- a trickyone.I’mnotsurewhat thepricewouldbeinthissituation—maybeit’s recent badpressthatwe’vehad. Last,Iwouldlookatourprice.Now, that’s brand differently, oratleast steppedupourbrandpromotionefforts, giventhe look atplacement—maybewe’renotintheneediestcommunities, orcountries. organizations, andthat’s hurtingourbrandandrevenue.Second, Iwould service organizations thatwe fund.Maybewe’renotfundingtheneediestof work toapproachthecase.First,Iwouldlookatourproduct—the community a simplemarketingproblemtome,soIwoulduse frame- Interviewee: (The interviewee’s sketchisillustratedonpage100.) proach. problem? Why don’t youtakeafewminutestosketchout yourthoughtsandap- tion tothecase.So,areyoureadystructurehowmightapproachthis tence—is definitelyinplay, andshouldbeconsideredwhendevelopingasolu- and notseniormanagement,theroleofmanagement—eventheirexis- Firm: is thatdifferent thanworkingfortheCEOofanorganization? by theboard,notnewCEO.I’veneverworkedforaboardbefore—how Interviewee: Brand awarenessandrecallisextraordinarythroughoutthecountry. that organization hastraditionallyhadaveryrecognizablebrand,andstilldoes. Firm: Interviewee: feels thatalotofthedamagestilllingers. the story(asdidhisfamilymembersworkingatorganization), buttheboard was coveredinnationalprintandbroadcastpress.Heresignedatthetimeof ploying familymembersandpayingthemincrediblyhighsalaries. This story ing lavishbusinesstrips(stayingattheFourSeasonsandsuch),aswellem- the pressinvolvedCEOoforganization, whowasfoundtobeexpens- Firm: not inagoodway. CanIask whatthatwasabout? Interviewee: Firm: Third, Iwouldlookatourpromotion.hopethatwe’vestarted promotingour That’s agoodquestion.Becausethe clientistheboardoforganization, Sure. The recentfinancialmismanagementthatwasheavilycoveredin Well, wecangetfurtherintothatinthecase,butfornow, let’s justsay Sure, gorightahead—askaway. I justhaveonelastquestion: You mentionedthatwewerehired You mentionedthattheclienthadbeeninnewslately—and Well, eventhoughthis isanonprofitclient,thisstillseemslike Do wehaveasenseofhowtheclient’s brandisviewed? Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 99 Customized for: Jessica ([email protected]) 100 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews PLACEMENT PROMOTION PRODUCT that hadn’t really increasedsincethebadpress. Firm: Interviewee: Wow—so, globalizationhitsthenonprofitworldaswell! raising organizations. which mayhavemadeuslose groundtosomeinternationalnonprofitfund- covered. Intermsofproduct,wefocussolelyontheU.S.,not international, Firm: (A summaryofthestructure ofthisapproach follows.) PRICE That’s great. You broughtupacoupleofinterestingthingsthatwedis- Yes, itdoes.Second,welookedatourrecent promotionalspend,and LIBRARY CAREER • Can wechangeourpricetosucceedinthemarket? • How doesourproduct’spricecomparetothatof • Cost pluspricing?Market • How isourproduct(donations,programfeesand • How dotheycomparetoours?Canwecreatenew, • What productsarenowoutinthemarket? • Does theproductnolongersuitmarketneeds? • • Daily placement? • Daily placement? • Seasonal placement? • Event-based • Are weplacedinplacesaccessibletodonors? • Are weglobal,nationalorlocalinourplacementef- • Is ourproductplacedintherightmarkets? • Have ourcompetitors’ promotionalactivities • Has ourpromotion changedrecently?(Itprobably • Howarewemarketingourproduct? our competitioninthemarket? promotional activitiesfees)priced? ket? customized productsthatcansucceedinthemar- changed? Has ourproductchanged?portfolio donor markets? forts? Areweintheneediestcommunities?Best tivity inthemarketchanged? changed recently?Hasthelevelofpromotionalac- should haveincreased,givenrecentbadpress.) © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Exhibit 1: The pricingofdonationtypes lected wherewesawsomethingveryinteresting. tiers areinlinewiththecompetition.Letmeshowyousomedatathatwecol- Firm: organization clientanditscompetitor.) showing theexhibitandexplaininghowpricingworksfornonprofit donor (The interviewerwilllikelylettheintervieweeguessabitaboutthisonebefore Interviewee: What doyouthinkthepriceofdonationsisinanot-for-profit likethis? that. Let’s talkaboutpricingfora bit,specificallythepricingofdonations. Firm: Interviewee: spending onthecommunityserviceprograms. wanted tomakessurethattherewerenoincreasesinanyspendingotherthan the badpress. The badpresshadtodowithfinancialmismanagement,sohe conversations withtheCEO,wefoundoutthathefrozeallbudgetsbecauseof Firm: promotion andpresswhenyou’vejusthadabitofbadpress? Interviewee: Well, that’s agoodguess,butotherorganizations havetiers,too,andour Agreed. Now, turningtopricing,youhadsomeinterestingthoughtson Yes, that’s whatwethought,too.Inallfairness,though,afterafew That seemsalittlestrange—wouldn’t youwanttostepupgood Is itthetiersthatdonorscangive? I couldseethat.It’s probablystill hurtthebrandabit. Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 101 Customized for: Jessica ([email protected]) 102 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews (This isaclearhintfrom theinterviewer.) Exhibit 1foreachdonationdollar? Firm: correct? that that’s whatactuallywaspassedontothecommunityserviceprograms, Interviewee: business schoolgrads—shoulddotheirbesttoarriveatananswer.) (If theintervieweedoesn’t seethis,that’s fine.Butadvancedinterviewees— these abbreviatedincomestatements,whatdoyouthinkprice is inthissetting? Firm: practically anycorporationoutthere. Interviewee: think thathasimpactedtheclient’s currentproblem? sociation withtheircommunityserviceandpromotionalfees.Howdoyou community service,westartedcharging themafeetouseourbrandnameinas- enue stream. When corporationsstartedwantingtoidentifythemselveswith Firm: workers. it mayimpactourbrandoutinthecommunity, withgrassrootscommunity receive fundsfromotherdonororganizations thatdon’t charge them.Second, Interviewee: it raisesfundsfor. Howdoyouthink thatimpactsthecase? of theclientorganization’s overheadouttothecommunityserviceorganizations the administrationoffund,reporting,etc.It’s basicallyawaytospreadsome charging eachcommunityserviceorganization thatreceived itsfundsafeefor fees aresomethingtheclienthasbeendoingsincebeginning.Itstarted Firm: ices fees. Why isthat? we’re theonlyonesgettingrevenuefromprogramfeesandpromotionalserv- know we’reanationalorganization, sothat’s abitsurprising.Icanalsoseethat million—in donationsasdoesacitycompetitor, whichissmallerthanus.I based onrevenue.But,itlookslikewereceiveaboutthesameamount—$50 nonprofit donororganization outthere—itlookslikewe’rerightinthemiddle Interviewee: Firm: Let’s takeeachseparately, andseewhatwecanlearn.First,the program That’s aboutright.Now, thepromotionalservicesfeesareanewer rev- What doesthisexhibittellyouabouttheclientrelativetocompetitors? Yes, that’s right. So,howmuchisthatforeachdonororganization on That’s whatwethought,too.Now, turningbacktoprice.Lookingat LIBRARY CAREER Well, I’mnotsurethat ithelpstohaveyourbrandassociatedwith Well, ifIlookatthe“Program Expenses”lineitem,Isuppose Well, ontherevenueside,Icanseethatwe’renotbiggest Well, first,Iimaginecommunityserviceorganizations liketo © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Norwegian Widgets Case sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Firm: (It’s keyhere thattheintervieweeremember hisclientistheboard, nottheCEO.) change ourcoststructuresothatwecanbring our“pricing”inlinewiththat 3) 2) re-evaluate ourpromotionalactivities’ revenuestream—thebrandneedsto increasecurrentpromotionalspendtohelpthebrandtarnishedbyrecentpress 1) Interviewee: that we’vediscussed,what’s your recommendation totheclient? Firm: pay ouroverheadthanforcompetitors. the mostcostlyorganization—more ofeverydonordollargiventousgoes dollar, 95centsgetspassedon($95million/$100million=.95). Wow, we’re Interviewee: Firm: dollar infundsforthecommunityorganizations. Interviewee: goes tothegrassrootscommunityserviceorganizations thatitworkswith. its boardpayforalloftheorganization’s overheadsothateverydonordollar really interestingtobenchmarkbecauseitdoessomethingveryunique:has Firm: “Board Fees”mean? ice organizations thatitworkswith. As forthecitycompetitor, first,whatdoes ($65 million/$70million=.928)93centsgoestofundingthecommunityserv- Interviewee: and residentialcustomers throughoutEurope.Ina recentreviewofitsfinancialmet- Your clientisaNorwegianfirmthatproduces widgetsandshipsthemtobusiness our brandnowneedshelptorecoverandregainlostdonations. coverage; theCEOwasprobablyrighttoputafreezeonbudgetincreases,but losing revenuebynotstayingcompetitive. of thecompetition—donorsarefindingmorevalueelsewhere, andwe’re little ofourrevenuemaybedetractingmorethanit’s adding. be refurbished,andlendingitouttocorporationsforfeesthat compriseso Great. Ithinkthatsumsitupnicely. Right. That’s right—andthat’s thepriceinthissetting.So,giveneverything Well, that’s aninterestingquestion. We thought thisorganization was Well, Iwouldrecommendthreekeychangesgoingforward: Well, forourclient,eachdonationdollar, itlookslikeonly Interesting. So,forthisorganization, eachdonationdollarisa And fortheglobalcompetitor, itlookslikeforeachdonation Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 103 Customized for: Jessica ([email protected]) 104 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Firm: client. Canyoutellmeaboutthe firm? Interviewee: viewer toaskyoujumpstraightanintermediatestepthat yououtlined.) (When outliningananalysisstructure, youshouldbeprepared foraninter- Firm: know iftheywillplayarole ornot.) viewing anylocation-specificcharacteristicsbecauseatthis time youdonot case themainonedoesnotresult inanysolutions.You shouldalsomentionre- the clientbeyondjustitscurrent focusandwillhaveanavenuetoexplore in (It isgoodtointroduce thelastoptiontoindicateyouare abletothinkabout portunity toincreasethevolumeofgoodsproducedoverallprofitability. be tolookforothercostbucketsthatcancontrolled,orexamineifthereisanop- again wehitaroadblockatthispoint,anotheroptiontorestoreprofitabilitymight like tolookforalternativesthatcanbedevelopedreversethecostincrease.If we candevelopsolutionstothesecauses.Ifhitaroadblockhere,thenIwould derstand thereasonsforriseincoststhisarea. The nextstepwillbetoseeif location characteristicsthatareimportanttoconsider. This shouldleadmetoun- years. HereagainIwouldliketoexamineifbeinginNorwaycreatessomespecific ers ofthetransportationcostsanddetermineifanyhavechangedoverpasttwo teristics thatareimportanttoitssituation.Next,Iwouldlikedelveintothedriv- a littlebitmoreabouttheclient’s business andiftherearespecificlocationcharac- declining profitability. Iwouldliketostructuremyanalysisbyfirstunderstanding Interviewee: Norway beforehand]. Startwithgivingastructure toyourplannedanalysis.) being inNorway[theinterviewerwillnotexpectyoutohavespecificknowledgeof need todecideifthere isinformationrelevant tospecificdetails,suchastheclient expecting youtogointosomedetailasmovethrough thecase.You willalso This givesyouanarrow rangetofocuson,butmayindicatethatthe interviewer is (You havebeengivenasituationwhere averyspecificcostbucketisbeinganalyzed. should bedonetorestorethelostprofitabilitymargin. You havebeenaskedtodeterminethereasonforthisandrecommendwhat itability. creasing asapercentageofcostsoverthepasttwoyearsandiseatingintoprof- rics, theCFOnoticedthatproductstransportationcosthasbeensteadilyin- What wouldyouliketoknow? I thinkthat’s OK. LIBRARY CAREER The CFOisconcernedaboutaspecificcostbucketthatleadingto As outlined,Iwouldliketofirst understandmoreaboutthe © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. next steptounderstandwhatthe driversare.) (You’ve identified where thecostsare comingfrom. It’s timetomovethe paid tothetransportcompanyatendofeachquarter. Firm: being analyzedisentirelyfromthiscontract,orthereanyother aspect? Interviewee: everything elseforalloftheclient’s widgets. delivery andhandleseverythinginbetween,fromcustoms toinsurance currently hasacontractwithtransportcompany, whichdoesthedoor-to-door them upfromthefactoryanddroppingoff atanotherplace. The firm Firm: currently doingit? Interviewee: to repeat yourquestion.) realized thatyourquestionwasnotfullyanswered. Bealertanddon’t beafraid gotten orhecouldbecheckingtoseeifyoupaidattentionwhatsaidand answered howthetransportationisactuallydone.Hemayhave simply for- (The interviewerhasonlyanswered partofthequestion.Heorshe hasnot things acrossEurope.Itonlymanufacturesthem. Firm: the widgetsthemselves? the clientusesforthesewidgets?Forexample,doescompanytransport Interviewee: charge theshippingandhandlingcoststocustomers. to customers—aspartofitspromotionalcampaignthecompanydecidednot do notneedanyspecialtransportarrangements. They aresoldatafixedprice Firm: portation arrangements. are they?Iamaskingbecausewonderingiftheyrequirespecializedtrans- Interviewee: more focusedinyourquestionsgoingforward.) you. Butiftheinterviewerindicatesyouneedtobemore specific,trytobe (It’s OKtostartwithaveryopenquestionseewhattheinterviewerprovides That’s correct. Transportation costsforthiswidgetarebasicallyabill No, thecompanydoesnothaveanykindofinfrastructuretotransport For thiscase,assumethewidgetsarejustsomeplasticobjects. They Well, thewidgetsarequite simple,andit’s justaquestion ofpicking Could youtellmeaboutthecurrenttransportationarrangements Could youtellmeaboutthewidgetsclientproduces? What So iftheclientdoesnottransportwidgetsitself,howisit So woulditbecorrecttosaythenthatthetransportationcost Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 105 Customized for: Jessica ([email protected]) 106 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews a partner? developing itsowntransportation networksothatitdoesn’t needtogothrough Interviewee: rate. which issatisfiedthatnoothertransport companiesareoffering amorecompetitive Firm: current transportcompany? other companiesandwhethertheyarecompetitivewithwhat’s offered bythe Interviewee: tions. The CFOandprocurement teamsaresatisfiedthatthesefair. Firm: Interviewee: tained naturetocausetheprofitreductionseenoverlasttwoyears. and soon,butnothingattheperunitlevelthatisdrasticenoughorofasus- Firm: charges inthepasttwoyearsthatarenotvolume-related? Interviewee: so on. There arenominimumvolumerequirementsneededfromtheclient. ber ofrepeatvisitsrequired,whetherornotaconsigneesignatureisrequiredand variable anddependsonthespecificationsofdelivery, suchastiming,num- livered toanindividualresidentialconsumer, thentheratecharged ismuch more price perunit. This pricevariesfromcitytoofcourse. When theunitisde- customers alwaysreceiveshipmentsby9a.m.andtheclientischarged afixed ness customersandthesecondisfordeliverytoresidentialcustomers.Business Firm: a minimumvolumerequired?Oranyotherdetails? the charges basedonafixedpriceperunitforparticulardestinations?Isthere Interviewee: Firm: it andhavenotforgotten aboutit.) structure asyougothrough theinterviewtoshowintervieweryouare using (It mightbeagoodideatoperiodicallyrefer backtoyouroriginalanalysis next partofmyanalysisanddiveintothis. ment betweenourclientandthetransportcompany, I’dliketomoveonthe Interviewee: The contracthastwopricingschemesinit. The firstisfordeliverytobusi- Yes, thisispart oftheannualreviewdonebyprocurementdepartment, There havebeensomechangesforinflation,fuelsurcharge adjustments Sure. Yes, theseare negotiatedannuallyforthetwotypesofdeliveryloca- LIBRARY CAREER Has theclienteverconsidered costsandlong-runbenefitsof Are thereanyvolumediscountsoffered totheclient? Has theclientevercomparedtransportationratesoffered by Now thatweknowthecostisbasedentirelyonagree- Do weknowanydetailsaboutthecontract?Forexample,are Has therebeenanymajorincreaseinthetransportcompany’s © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. of deliverytoa residential customerbeenrising? like tolookatwhataffect thishashadontheoverallcosts.Has theaveragecost centage ofdeliveriesareonthe variable pricingschemeandnottheflatrate.I’d coming anincreasingpercentage ofourclient’s customers;thusa larger per- Interviewee: looking intothisdifference. ) plore this further. Try totalktheinterviewerthrough thethinking behind fects thetwocomponentsofitstransportationcosts.You definitelywanttoex- (You havefoundthattheclient’s customerbaseischangingandthisdirectly af- are beingaddedatafasterrateincertaincountries. but therateofnewcustomersbeingaddedisdifferent. Residentialcustomers Firm: even today? Interviewee: would havebeenalotmoreexpensiveonaveragesincethevolumewaslow. ume goingtobusinesscustomersandnegotiatedaflatrateforthemeachcity. Firm: scheme. why deliveriestobusinessandresidentialcustomersfollowadifferent pricing Interviewee: ness andresidential customersandwhatimpactthismayhave,ifany.) case, wehavenotyetlookedatwhythere isadifferent pricingschemeforbusi- unexplored regarding thetransportationcontractbefore movingon.Inthis and decidehowtoproceed. You wanttomakesure youhavenotleftanything (You shouldnottakemore thanaboutaminutehere toreview yourinformation Firm: have overlookedanythingorifIshouldmoveontoanotherareaofanalysis. Interviewee: thing; framethispositively.) take stockofwhatinformationyouhaveandwhetheroverlookedany- you donotwanttoappearasifare “shootinginthedark.”You needto show theinterviewerthatyouare thinkingofseveraldifferent possibilities.But ceed. Theyare nonethelessvaluabletohelpyoueliminateoptionsaswell (The lastfewquestionshavenotprovided youanydirections inwhichtopro- Firm: When thecontractwasfirstdeveloped,suchaflatrateforresidentialcustomers Yes, thiswasfoundtobehighlyimpracticalandveryexpensivesetup. It’s beenlikethisfromthestart. The clienthasalwayshadfarmorevol- Even todaytherearefarmorebusinesscustomersthanresidential ones, Sure. I’d liketobetterunderstandthepricingusedincontractknow If residentialcustomersareincreasing atafasterrate,theyarebe- Is thisdistributionofbusinessandresidentialcustomersthesame I’d liketotakeaminutereviewtheinformationseeifI Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 107 Customized for: Jessica ([email protected]) 108 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews as abackupincasetheyarenot willingtodothis? rate thatislowenoughtomake thischangevaluable. What wouldyousuggest port partneralsoagreeingtore-evaluate thepricingcontract,aswellaflat Firm: consider switchingattheearliestpossibletime. If thisnumberislowerthanwhatwearecurrentlyshippingthen theclientshould ber ofunitsshippedaflatpricingschemebecomesmorecost-effective proposition. fect seenwithbusinesscustomers. We wouldalsoneedtounderstandatwhatnum- should evaluateifafixedpricecontractwillprovidebetterscale similartotheef- tomers toincrease. This assumption will,ofcourse,needtobeverified. The client is goingtocontinue,sowecanexpectthevolumeofshipments residentialcus- currently assumingthatthetrendofresidentialcustomersincreasing atafasterrate the pricingschemeusedfortransportingwidgetstoresidential customers.Iam idential customersatthistime.Rather, myinitialrecommendationistore-evaluate Interviewee: the moreprofitablecustomers? Firm: reductions tobusinesscustomersandthereforeeatingintooverallprofitability. be thattheincreaseincoststoresidentialcustomersisoffsetting thegainsfromcost overall costs.Iwouldneedtoexamineactualfigures,butmyassumption of thecustomerbase. This explainswhytheynowconstitutealarger partofthe costs forresidentialcustomers. These customersarealsobecomingalarger part Interviewee: through, present yourinitialassessment.) coming alarger partoftheoverallcustomerbase.Onceyouhavethought this pair thiswiththefactthatcustomergroup thischangeapplies toisbe- rate thantheothers,itisbecomingahigherpercentage ofthetotalcosts. Now (Do somequickmentalmathhere. Ifonecostbucketisincreasing atafaster Firm: changes inothercostareasformanufacturingtheproduct? Interviewee: as theygaingreatervolume. Firm: Interviewee: Firm: Do youthinkweshoulddroptheresidentialcustomerstofocusonlyon The averagecostforbusinesscustomerhasbeendecliningmarginally Other costareashavebeenrising0.3percentto0.5annually. Yes, theaveragecosthasbeenrisingbyabout1percentperyear. I thinkthatisareasonablesuggestion butitisdependentonthetrans- LIBRARY CAREER Based ontheinformationIhave,wouldnotrecommendignoringres- And forbusinesscustomers? It seemsthatthetransportationcostsarerisingfasterthanother How doesthisincreaseforresidentialcustomerscompareto © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Online GamblingCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Additional informationprovidedduringquestioning evaluate andcreatetheirmarketentrystrategy. Howwouldyoustructurethat? the explosioningrowthofonlinegamblingandhavehired ustohelpthem A large, globalgamblingcompanyistheclient. The executiveshavenoticed you fromforgetting toconsideritwhenyouarewrappedupinadifferent area. possibility earlyon,whensettingupyouranalysisstructure,willhelpprevent of different costbucketsandwhattheirinfluencersmightbe.Recognizingthis sate. This canchangethefocusofcaseandtestyourbroaderknowledge then needtolookatwhetheranyothercostscanbebroughtdowncompen- nity tocontrolthetransportationcostsforeithercustomersegment. You would The casecouldhavegonedownadifferent pathwheretherewasnoopportu- and controllingthemasapercentageoftheoverallcosts. also importanttodistinguishbetweendrivingdownoveralltransportationcosts customer segments,whetherfromaprofitabilityorcostpointofview. Itis scheme. Ingeneral,itisalmostalwaysimportanttolookfordifferences in in thiscasewouldhavebeentoassumeeveryonewasonthesamepricing uncovering different pricingschemesfordifferent customer segments. An error costs foraproducttodeterminewhatisdrivingitup. This iscombinedwith This isacaseaboutdelvingintothevariouscomponentsoftransportation Case analysis Firm: competitive, theymaybecomesowithadifferent pricingscheme. for bothkindsofcustomers. Although wehavepreviouslynotfoundthem der totransportationcompanies,thistimeaskingforproposalswithaflatrate for thisincrease.Iwouldsimultaneouslyconsiderthefeasibilityofafreshten- which istoseeifthereareothercostbucketsthatcanbereducedmakeup Interviewee: • The clientisalarge gamblingcompany.• They have operationsin40countries endeavor. The firmisalsoaU.S.-based company. worldwide andareconsidering theonlinegamblingmarketworldwideinthis Thank you. I wouldproceedtothefinalstephadmentionedinmyoutline, Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 109 Customized for: Jessica ([email protected]) 110 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews casinos withoperationsinboththe U.S.andoverseas. Third, it ownsandoperates action networkandhandlestheoperations ofthelottery. Second, itrunsachainof facilitates lotteriesforgovernments globally—itdevelopsthegames,runstrans- wide inthisendeavor. The client runs severaltypesofgamingoperations.First,it in 40countriesworldwideandis consideringtheonlinegamblingmarketworld- Firm: Yes, that’s correct. The clientisalarge gamblingcompany. Ithasoperations rently haveanyonlinegamblingoperations.Isthatcorrect? help determineitsstrategyfordoingthat.I’massumingthat itdoesn’t cur- and isinterestedinenteringtheonlinegamblingmarket. We’ve beenhiredto Interviewee: Firm: Interviewee: analyses andqualitativeevaluations) Breakdown ofsolution(includingquantitative interviewee toseehowheorshereactssurprisesinthecaseformat. may surprisetheintervieweethatitiseventhere. This isalsomeanttotestthe Also, thequantitativeexerciseisliterallytackedontoendofcase—it interviewee’s comfortwithnumbers, butitdoesnotdrivethecaseanswer. titative exercisethrowninattheendtohelpinterviewertest ginning ofthecasetogetintervieweethinking. There isalsoashortquan- Numbers donotdrivethiscase. There’s aquickquantitativequestioninthebe- answer thesecondarycasequestionsandsummarizefindingsatend. can structurethecasewell,heorsheshouldjustusedataprovidedeffectively to ket entry(seeframeworkincluded).Oncetheintervieweehasshownthatheorshe The frameworkthatanintervieweeshouldbeawareofisthedecisiontreeformar- Suggested high-leveloverviewofsolution • The onlinegamblingmarkethasexperiencedtremendousgrowthinthelast The clientrunsseveraltypesofgamingoperations.First,itfacilitateslotteriesfor • are placedinoff-gaming sites;thisbusinessispurelyinternational,butgrowing. ations inboththeU.S.andoverseas. Third, itownsandoperatesslotmachinesthat handles theoperationsoflottery. Second,itrunsachainofcasinoswithoper- governments globally—itdevelopsthegames,runstransactionnetworkand million. In2007,theonlinegamblingindustryisexpectedtototal$18billion. decade. In1996,betsfortheonlinegamblingindustrytotaledapproximately$17 Go rightahead. What questions doyouhaveforme? LIBRARY CAREER I’d liketomakesurethatIunderstandthecase. Our clientisalarge, globalbut U.S.-basedgamblingcompany, © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. we gotfromthird-party researchhelpedusunderstand abitaboutthisnewmar- Firm: standard measuresandreporting mechanismshaven’t become stable. tentimes, inanewindustry, themetricsforthatindustryaren’t thatreliable,as wonder howaccuratetheindustry metricsareinsuchanewindustry/market.Of- phase andthatindustrygrowthrateswilldeclineasthe matures.Ialso able. Iimaginethattheonlinegamblingindustryisprettynew and initsstartup Interviewee: Ingeneral,itlooksgreat,butgrowthlikethatreallyisn’t sustain- (Here, the intervieweristryingtotestinterviewee’s business judgment/intuition.) Firm: stickler forthenumbers!) should prepare themselvestodomore exactmathincaseaninterviewerisa make thematheasier, whichinthiscaseisprobably fine.Butinterviewees (Here, theintervieweehasused17billion,insteadof18in order to that’s agrowrateofover1,000percent. Interviewee: (Here, theintervieweristestinganinterviewee’s quantskills) total $18billion.Justquickly, whatkindofagrowthratearewetalkingaboutthere? approximately $17million. This year, theonlinegamblingindustryisexpected to growth inthelast10years.In1996,betsforonlinegamblingindustrytotaled fast-growing market. The onlinegamblingmarkethasexperiencedtremendous Firm: Interviewee: to shiftgearsandparticipateinwhateverdiscussionaninterviewerinitiates.) terviewee’s abilitiesto“roll withthepunches.”So,agoodintervieweewillbeable fore gettingintothestructured case—andheorshealsomightbetestinganin- anything tohappenhere. A caseinterviewermightwanttodiscussdatabe- (This isnota“standard” caseflow, butanintervieweeshouldbeprepared for case, let’s talkaboutwhatweknow aboutthemarketfirst. Firm: into, orshouldIevaluatethat,too? Interviewee: erations, butithasnowhiredustohelpwithhowgetintothatmarket. tional business,butagrowingone. And no,currently, ithasnoonlinegamblingop- slot machinesthatareplacedinoff-gaming sites;thisbusinessispurelyaninterna- We’ve donesomequickduediligencealready, andit’s aprettyattractive, No, noneedtoevaluatethat,too. Actually, beforeweevengetinto the Yes, that’s right. What doyouthinkaboutthatgrowth? That’s great—andthat’s right. The sheerindustrysizingnumbers that Okay, that’dbegreat. What doweknowaboutthemarketsofar? Well, ifitstartedat$17million,andit’s nowover$17billion, OK, andcanIassumethatit’s aprettyattractivemarkettoget Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 111 Customized for: Jessica ([email protected]) 112 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Exhibit 1:OnlineGamblingIndustryGrowth Companies 1,000 - 1,500 - 2,000 - 2,500 - 3,000 - 3,500 - 500 - 0 - (Few minutesgoby...) Firm: Interviewee: structure howtoenterthismarket? where weandtheclientwereatbeginningofthiscase. How wouldyou Firm: interviewer shouldpress theintervieweetocomeupwithmore.) a goodjob.Infact,heorsheshouldmakeatleasttwoobservations. Ifnot,the (If theintervieweegetstwoorthree oftheseobservations,heorshehasdone ing; so,thismarketwilllikelygetbigger. it lookslikethere’s stillroomfortheindustrytogrow—newcustomersarecom- gambling companiesandcustomerscontinuedtogrowinthisonline market.Finally, the Internetboomkindofwentbustin2000/2001,andyetnumberonline or brand. Third, itlookslikeonlinegamblingissomewhatrecession-proof.Imean, can comeinandcustomersaren’t necessarilyloyaltoanysinglecompany, product to growrapidly. Myguessisthattherearen’t realbarrierstoentry—anycompany dustry ishighlyfragmented—thenumberofonlinegamblingcompaniescontinues market isstillinstartupandhigh-growthmode.Second,itshowsmethatthein- Interviewee: that wecollected. What doesthattellyouabouttheonlinegamblingindustry? ket. Butwewantedtoknowmoreaboutit.Letmeshowyousomeotherdata Online GamblingCompanies 1996 1997199819992000200120022003 That’s great.Nowthatyouknowabitmoreabouttheindustry, you’re Of course. Take yourtime. LIBRARY CAREER Well, ittellsmeacoupleofthings.First,reinforcesthefactthatthis May Ihaveafewminutestocollect mythoughts? Online GamblingCustomers © 2008Vault.com Inc. - 0 - 1,000,000 - 2,000,000 - 3,000,000 - 4,000,000 - 5,000,000 - 6,000,000 - 7,000,000 - 8,000,000 - 9,000,000 Customers Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Entry Strategy Entry Strategy Marketing Marketing lowing isanexampleofanswerforeach.) he orsheshouldmakearecommendation withsomedatasupporting it.Thefol- an answerhere, itdoesn’t mattersomuchwhichoptionanintervieweechooses—but (This isthekeyquestionforthiscase.Becausethere islittledatathat would drive market, whichwouldyousuggestthisclientdo? Firm: (The three optionsare illustratedinthetablebelow.) by amixofbothorganic growthandacquisitions. that market—oraseriesofacquisitionsinmarket,or3)createbusiness divisions, 2)getintothatmarketbymakingasignificantacquisitionalreadyin tions: 1)createanewbusinessorganically fromexistinglinesofbusinessand Interviewee: That’s right.Now, knowingwhatyouknowaboutthisclientand this Well, withanynewmarketentry, Ithinkafirmhasthreeop- • Createanonlinegamblingbusinessthroughamixtureofor- • Create onlinegamblingbusinessthroughacquisition. • Createonlinegamblingbusinessorganically. • Createanonlinegamblingbusinessthroughamixtureof • Create onlinegamblingbusinessthroughacquisition. • Createonlinegamblingbusinessorganically. Vault CaseInterviewPracticeGuide2:MoreInterviews ganic growthandacquisition. organic growthandacquisition. Maketargeted,smallacquisitionsthatwillquicklymeshwith • • Buyanonlinegamblingcompany(orcompanies)toenterthe • Create anonlinegamblingdivisionwithinthecompany • Theclientcouldgrowitsexisting consumer-focused • Theclientcouldmaketargetedacquisitions inmarkets • Therearesomanyonlinegamblingcompaniesoutthere • Usetheconsumer-focuseddivisionsofcompanyand www.vault.com/consulting existing businessestocreateonlinegamblingbusiness. customers. market throughanexistingplayerwithbrandsand using itsexistingresources,products,servicesorbrands. easily online. businesses inmarketswhereitsbrands mighttranslate that developed. where itsexistingconsumer-focused businessesarenot That wouldensurequickmarketentry. the geographicmarketsthatclientwantstoexistin. already; itmightbeeasiertobuysmallcompaniesinallof markets. online thatmirrortheirexistingslotmachinesinoverseas For example,theclientcouldcreateslotmachinegames create onlinedivisionsthatmirrorexistingconsumerbrands. — within- LIBRARY CAREER Sample Cases 113 Customized for: Jessica ([email protected]) 114 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Exhibit 2:GameDevelopmentCycle determine itsR&Dprocesses,whicharesummarizedinthefollowing. ucts totheJapanesemarketeachyear. We’ve doneabitofresearchto ing thatthisnewcompanywillallowittobringanaverageofthreeprod- would helpbringmoreproductstomarket,andfaster. Infact,theclientishop- isting companybecauseitthoughtthatitsproductdevelopmentcapabilities didn’t havemanycurrentlinesofbusiness. The clientwanted tobuythisex- up hiringustoevaluateanacquisitiontarget intheJapanesemarket,whereit Firm: Interviewee: Firm: markets whereitstillneedssomehelp. world andmakeselectacquisitionsofonlinegamblingcompaniesingeographic nificant consumer-focused businessthatitcanuseasspringboardstotheonline a mixstrategy:entertheonlinegamblingmarketorganically wheretheclienthassig- might nothavesignificantcurrentassetsthatitcanleverage.So,Iwouldrecommend out there,Ibetitcouldpickupsomeacquisitionsinkeymarketswheretheclient make toenterthemarketinabigway. Butbecausetherearesomanycompanies panies—it doesn’t seemlikethere’s onesignificantacquisitionthattheclientcould to takehugerisks.Becausethemarketisstillsofragmented—thousandsofcom- if it’s payingustoevaluatethemarketandcreateastrategy, itprobablydoesn’t want tering thismarket.Butitsoundslikealsowantstodoinalow-riskfashion— Interviewee: But thiscaseactuallyledtoanotherforthefirm. The clientended That’s great. And it’s prettyclosetowhatweactuallyrecommended. LIBRARY CAREER If theclienthashiredus,myguessisthatit’s prettyinvestedinen- Great. © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Organic Fast-FoodCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. amount oftraffic forfuturestores tobefinanciallyviable. land isthelackofsuitablestorelocationsinDrywellthatwillgenerate thesame pand intotheneighboringcityof Ashland. The imperativeformoving outto Ash- has beenfinanciallysuccessfulforthepastcoupleofyearsand decidedtoex- A smallorganic fast-foodchain,Different Taste, withoverthreestoresinDrywell, Situation walk throughyoursolutionswiththeconsultant. use thecalculator, paperandpenmadeavailable toyou. After 20minutes,you will Please readthefollowingcasecarefullyandanswerthreequestions. You may Firm: what theclientislookingfor, thenyes,theyshouldmaketheacquisition. client wantsfortheJapanesemarket.So,yes,ifallelseaboutcompanyis bring anaverageofthreenewproductstomarketeachyear, whichiswhatthe ket. Ifyouaveragethatoutoverthetwoyears—thatmeansthiscompanycan takes twoyearsexactly, theclienthassixnewproductsreadytotakemar- again onthelastscreentosix.So,atendofdevelopmentprocess,which make ittothenextscreen,whichhalvesnumberofproductsagain12and then only48enterthefinancescreen.Fromthere,50percent—or24— at theR&Dboardscreen.Ifonly60percentof80makeitbeyondthere, Roundtable, andonly80percentmakeitthroughthat,thenhasproducts Interviewee: Firm: games mustpassthesefivescreensbeforebeingbroughttomarket? the fivestagesofdevelopmentwithtimeittakesateachstage,andnew Interviewee: make thisacquisition? oper’s Roundtable”stage.Giventhisdata,doyouthinkthattheclientshould The companycurrentlyhasabout100productseachyearenteratthe“Devel- ture expansion. She hasalreadydeterminedthatthere arenosimilarcompetitorsin Jane, toensurethattherewillbe sufficient demandsustainingthe store,andforfu- Unlike atypicalfoodchain,itis imperative forthebusinessdevelopmentdirector, Background information That’s great. That’s whatwerecommended,too. That’s right.So,shouldtheclient acquire thiscompany? Well, letmemakesurethatIunderstandthisdatafirst. These are Well, iftheclienthas100productsenteratDeveloper’s Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 115 Customized for: Jessica ([email protected]) 116 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews percent ofotherfast-foodchains. Take-away isalmost60percentoftotalrevenue,butlower thanthe70to75 further detailsintermsofthe percentageoftake-awaysalesanddiningin. customer andnumberofcustomers whopurchasedfromthestores.Janehas 1 onpage118), andanalyzeditthoroughly. Revenueisdrivenbyspendingper Jane hasgathereddataforthepast12monthsfromthreestores (seeExhibit Revenue ofcurrentstores dent thatthemostlikelynumberofcustomerseachmonthis14,500. evaluating thelocationofproposedstorein Ashland, Jane’s teamisconfi- in additiontothesuburbstoreislocatedin.Basedon survey data,and find thefood“fun”toeat. The customerscomefromthesurroundingsuburbs, perceived asahealthyalternativetofamilydinner, andthechildrenactually tend topatronizethestoresduringmealtimeonweekdays.Different Taste is from thehigherincomebrackets.Surprisingly, familieswithyoungchildren pected, thesurveyfoundthatcustomersaremostlywelleducatedandstem Six monthsago,theyconductedasurveyoftheircustomerbase,andasex- order toattractpatronswhoareonlyhavingmeals. seats. The managementdeliberatelychosenottohaveanyInternetaccessin city. The in-storeenvironmentsarebrightlylitandclean,withcomfortable stores aresituatedinthedowntownshoppingareascentralpartof fast-food chainsforthehealthy, tastyandconvenientfood. All of thethree sold, butcustomersarewillingtopaythe1525percentpremiumoverother Given thehighcostofrawmaterials,thereisapricepremiumforproducts mostly healthy, consistingoforganic fruitjuice,organic milkandmineralwater. The oilusedtopreparethefoodisalsolowfatandorganic. The drinksare all ofthefoodismadefromorganic cheese,meat,bunsandvegetables,etc. The organic fast-foodchainhasthesamemenuasatypicalhamburger joint,but ate whythestore’s currentexpansion intoDrywellhasbeensosuccessful. To makeacalculateddecisiontoopenstorein Ashland, Janeneedstoevalu- Success ofDrywell’sstores be makingtherightdecision. of threemillion. Therefore, theyaregatheringalotofdatatoensurethatwill ness developmentteamisconsideringopeningupastoreoutsideofDrywell,city conomic demographicsasDrywell’s stores.However, thisisthefirsttimeherbusi- Ashland. The targeted locationin Ashland willattractcustomersofsimilarsocioe- LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. should expandinto Ashland. make afinanciallydrivenrecommendationaboutwhether Different Taste before goingintomoredetail,torecheckalltheassumptions. Sheneedsto sion forthetimebeing.Janeneedstoquicklydeterminewhether itisfeasible, profit isbelow30percent,itunlikelythattheCEOwillagreetoexpan- Taste hasdecidedtoexpandoutsideitsareaofcomfort.Ifthetargeted gross Jane isawareoftheimportancedecision,asitfirsttimeDifferent Should DifferentTasteexpandintoAshland? items. itable, duetocorporateoverheadcost,costofcapitalandothermiscellaneous The targeted grossprofitisexpectedtobe30percentforanewstoreprof- as betterlocatedstoresaresituatedinhigh-traffic areas. Exhibit 3onpage119), thereisastrongcorrelationtothenumberof customers, hired inproportiontothenumberofcustomers.Intermsrentalcost(see The laborcost(seeExhibit2onpage118) comesfromthenumberof workers of thethreestores. costs andlackofeconomiesscale,ratherthanthecurrentaverage31percent tional 2percentoftherevenuesold. This isduetoadditionaltransportation its threestores,Jane’s teamestimates thattherawmaterialswillcostanaddi- cent oftherevenue.However, duetothetargeted citybeinganhouraway from chasing. ForDrywell’s stores,the averagecostoftherawmaterialsis31per- of therevenuesales,asitisabletoachievesomeeconomiesscaleinpur- purchase itsstorelocations. The costofthefoodisreflectedasapercentage costs andlabor. Different Taste hasnotreachedeconomiesofscaletoleaseor The majorcostcomponentsaretherawmaterialsforfoodanddrink,rental Costs ofrunningthecurrentstores Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 117 Customized for: Jessica ([email protected]) 118 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Estimated numberofcustomersmonthly Average %oftakeout Dine-in 10 Average spendpercustomerstoreinDrywellpast12months($) Exhibit 1:Spendper customer andnumber ofcustomers Number of 17,500 workers Average monthlycostofeachworker($) 2,250 60% Average numberofworkersineachstoreDrywell A Exhibit 2:Labor cost A 15 Takeout LIBRARY CAREER 8 8 18,500 2,450 70% 17 BC BC 9 © 2008Vault.com Inc. 9 18,250 2.400 65% 16 7 Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Source: EstimatedfromJane’s businessdevelopmentteam Note: *Rentalcostincludeaverageutilities, etc. Note: *Rentalcostsincludeaverageutilities,etc. Estimated numberofcustomers Percentage oftake-awaycustomers store Average spendpercustomer Cost ofrawmaterial worker ($) Average monthlycostforeach Number ofworkersneeded Monthly RentalCost* Monthly Rental Average rentalcost*permonthforeachstoreinDrywell Exhibit 3:RentalCost $9,250 cost ($) Cost Items Revenue Items Exhibit 4:Projected datafor newstore in Ashland A Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting $10,200 BC 14,500 age ofDrywell’sstores To beestimatedfromaver- 65% 33% ofrevenue 65% in Ashland jected numberofcustomers To beestimatedfrompro- $8,500 — within- $9,500 LIBRARY CAREER Sample Cases 119 Customized for: Jessica ([email protected]) 120 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews available isaccurate afterchecking? Should JanerecommendthatDifferent Taste enter Ashland, assumingthedata Gross Profitpercentageofrevenue =$41,120/$121,70534percent. Gross Profit=$121,705-$79,955 =$41,120. Determine gross profit of Ashland’s stores Total monthlycostofrunning storein Ashland =$79,995. Food cost=(31+2)%ofrevenue33%*$121,705$39,995. and given). Monthly rentalcost(whichincludesaverageutilitiesspent)=$8,500 (estimated Labor cost=14*$2,200$31,500. Estimated costofrunningthestore in Ashland stores =14,500/1104 =13.1(14)(rounduptoobtainnumberofworkers). Estimated numberofworkerneededfor Ashland’s storebasedonDrywell’s Average number ofcustomersperworkerinDrywell=17,666/161,104. Average number ofworkersforstoresinDrywell=(15+16+17)/316. 3 =$17,666 Average number ofcustomersforstoresinDrywell=$(17,500+18,500+18,250)/ tomers. Determine thenumberofworkersneededforstorebasedoncus- Estimated monthlycostsfrom runningstore in Ashland Total estimatedrevenuefrom Ashland’s store=$121,705. Total dineincustomerrevenue=$14,500*35%*$9$45,675. Total takeoutcustomerrevenue=$14,500*65%*$8$75,400. customers ofsimilarsocioeconomicdemographicsasDrywell’s stores. be thesameasDrywell’s stores,as thetargeted locationin Ashland willattract We willassumethattheaveragecustomerspendingfor Ashland storewill Average customer spendingfortake-awayDrywell’s stores=$(8+9+7)/3=$8. Average customer spendingfordineinDrywell’s stores=$(10+8+9)/3$9. Estimate thepercustomerspendfortake-awayanddinein. Estimated monthlyrevenue from Ashland’s store to doanyestimationforthenewstoreeconomies. the estimatedcollecteddata? You mustusetheaveragedataforthreestores Will thenewstorein Ashland achieveatleasta30percentgrossprofitgiven Questions (andanswers) LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. A. Ensuringthequalityofestimateddata enter Ashland, howshouldthecompanygoaboutdoingsotoensure itssuccess? Regardless oftheanswer totwoandassumingthatDifferent Taste choosesto its 30percentgrossprofittarget. estimated 14,500customers,thestorein Ashland willdefinitelybeabletohit confident thatifthenumberofcustomershoversaround10to15percent The profitmargin of4percentabovethetarget doessuggestthatJanecanbe mend thatDifferent Taste expandinto Ashland. cent grossprofitifitchoosestoenter Ashland. Therefore, Janeshouldrecom- From initialestimation,Different Taste willbeabletoachieveatleasta30per- C. Monitor thefirstfewmonthscloselytoensurestoreiscustomer-centric and C. B. Ensurethequalityoffood,serviceandenvironment economically viable. 2.Check thatthelocationofstorewillbeabletogenerateesti- 1.Ensure thatmoretangibledatasources,suchasmonthlyrentandcost 7. The Ashland financialsshouldbemonitoredcloselytoensurethat 6. Corporate HQshould observethecustomers’ behavioratthe Ashland 5. The staff mustbeaswelltrainedandservice-orientedtheDrywell The interiorofthestoremustbesamequalityasDrywellstores. 4. In termsofrawmaterials,Different Taste3. willhavetoensurethatthe qual- Drywell. graphic profiletodrivethesameamountofcustomerspendingin mated numberofcustomersfromthecorrectsocioeconomicdemo- of workers,havebeencheckedtoensureaccuracy. customer-centric, inorder tocontinuedrivecustomersintothestore. from Drywell,itisstillimportanttoensurethestorein Ashland remains though itisunlikelythatthecustomersin Ashland willdiffer significantly store, andmodifyfoodofferings andservicelevelsaccordingly. Even stores. can guaranteethesamefreshnessandquality. by eithersourcingfromthecurrentsupplier, orfromlocalsupplierswho ity remainsconsistentwiththeDrywellstores.Different Taste candoso months. cent grossprofitasearlypossible, ideallywithinthefirsttwo the 30percentgrossprofitisachieved. The aimistoachieve 30per- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 121 Customized for: Jessica ([email protected]) 122 Outsourcing CommercialDebtCollectionCase Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews work foryouranalysis.) well. Onceyouare comfortablewith both topics,proceed byoutliningaframe- you are notclearaboutoutsourcing, youshould asktheintervieweraboutitas [i.e., sendingworkhalfwayacross the worldratherthanintothenexttown].If ber, here youare dealingwithoffshore outsourcing andnotjustoutsourcing ready be familiarwiththebasicsofoutsourcing businessmodel.Remem- (You nowknowalittlebitabouttheindustry yourclientisin.You shouldal- it willeithertrytoresellanotherdebtcollectororwrite itoff. for debtitpaid$2for, thusmakingaprofit onit.Ifitcannotcollectanyofit, percent. The debtcollector will trytocollectthedebtandmaycollect,say, $5 say $2. This wayitreceives 20percentofthemoneyit’s owed ratherthan0 is owed$10,itwillsellthe“righttocollect”$10another companyfor debt asaloss,oritcan“sell”tocollectors.Forexample, ifacompany leaving behindanunpaidbill.Insuchcases,thecompanycan writeoff the case isB2C—where,forexample,perhapsthecustomerhassimplylefttown, case ofB2B,perhapsthecustomerhasbecomeinsolvent. The morecommon this money. A percentageofitwillbeuncollectibleforvariousreasons.Inthe ceivables sectionoftheirbalancesheet—buteventuallytheyhavetocollect their customersoncredit—whichmayinitiallybereflectedintheaccountsre- ment. To simplifyalittle,companieswilloftensellservicesandproductsto Firm: some informationaboutitsoIcanunderstandhowourclientfitsin? iar withthedebtcollectionindustry. Couldyoubeginbybrieflygivingme Interviewee: a littlebitabout].Startbyexploringtheindustry.) and whatoutsourcing isallabout[whichyouprobably dounderstandandknow to understandtheindustryitoperatesin[whichyoumaynotbefamiliarwith] to yourclient,withthespecificgoalofreducing operationalcosts. You need (This caseisaboutassessingiftheoutsourcing businessmodelcanbe applied ing businessmodel. What shoulditconsideroutsourcing,ifanythingatall? One questionithasiswhetherornotshouldconsidertheoffshore outsourc- ational costs.Itwantsyouhelpthinkthisthrough. it iswonderingifcanusetheoutsourcingbusinessmodeltoreduceitsoper- the industryaverage.SeeingallnewssurroundingIT offshore outsourcing, B2C debtcollection.Ithashadsteadygrowth,withprofitmargins onparwith Your clientisaNorth American financialinstitutionspecializinginthirdparty The debtcollectionindustryislinkedtoaccountsreceivablesmanage- LIBRARY CAREER I understandtheoutsourcingbusinessmodel,butamnotfamil- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. to findaperson,extractpayment andsoon. strict legalframeworksofwhat adebtcollectioncompanycanandcannotdo to sellanothercompanyata lowerprice. All ofthisoperateswithin fairly the debtwillbedeemeduncollectible andeitherwrittenoff or anattemptmade cost oflegalproceedingswillfar exceedthevaluethatmaybecollected,and be initiated.Butmoreoftenthannot,thedecisionwillnegative, becausethe the persontopay. Ifapositivedecisionismade,thenlegalproceedingsmay owed, adecisionismadeonwhetherornottotakelegalaction totryforce tact himorhertocollectpayment.Ifthepersonisnotwilling paythemoney customer whoowesthedebt.Ifhedoeslocateperson, willtrytocon- type environment. This person willattempt,overseveraldays,tolocatethe agent.” This isusuallyoneof alarge poolofpeopleoperatinginacallcenter- purchase thedebtandassignittooneofitsstaff, calleda“debtcollection Firm: boxes, orwhateverelseworksforyou.) person youshouldfeelcomfortablewithsketchingoutdiagramsarrows or not wanttoforget anyofthestepsinprocess. Ifyouare avisually-driven lines them,sinceitwillbethefocusofyouranalysisgoingforward and youdo brought thesewithyou.You shouldnotedownthestepsasinterviewerout- (The interviewerhaslikelygivenyousomepaperandapen,orhave describe thisprocessforme? chasing debt,andbeingabletocollectitordecidingwriteoff. Canyou Interviewee: Firm: the basics.) in yourclients’ shoestothinkaboutwhattheywillbeworriedbeyondjust (The lastpart,aniceextra,showstheintervieweryoucanreally put yourself business. client doesnotsuffer inthisrespect,duetolosingdirectcontroloverpartofits feasibility ofputtingqualityandmonitoringchecksinplacetoensurethatthe and whatisrequiredtoimplementtheoutsourcing.I’dalsolikecheck be theeffect/reduction onoperationalcostsiftheclientdidoutsourcethatstep, steps isappropriateforoutsourcing.Ifthereareany, I’dliketoseewhatwould Next, I’dliketoassess,fromapurelyoperationalview, ifoneormoreofthese or writeitoff. This willhelpmebetterunderstandourclient’s businessprocess. the timeitpurchasesB2Cdebttoeithercollectsordecidessell tion. Ineedtofullyunderstandthemajorstepsourclientgoesthroughfrom Interviewee: At ahighlevel,theprocesshasthreeorfourmajorsteps. The clientwill I thinkthat’s appropriate. Where wouldyouliketostart? First Ineedtounderstandthestepsthattakeplacebetweenpur- I wouldliketousethefollowingstructureanalyzethissitua- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 123 Customized for: Jessica ([email protected]) 124 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews by howmuch. The secondisfromanoperational pointofview, lookingat or notitwouldcontributetothe businessgoalofreducedoperationalcost,and a financialperspective.Iwould liketoexplorethecostofoutsourcing,whether Interviewee: deeper intothedebtcollection agent’s work. Firm: develop asexpected.) the optiontoreturn tothispointintheanalysisifcurrent branchdoes not what peoplenormallydo.You alsowant toaddthelastlineleaveyourself aged incaseinterviewsandissomethingyoushouldpractice sinceitisnot than theentire conclusion.This“thinkingoutloud”process ishighlyencour- there is anerror inyourreasoning chain,theinterviewercancorrect itrather show theintervieweryouare notsimplymakingguessesinthedark.Evenif (By identifyingyourassumptionsanddescribinglineof reasoning, you areas andexaminethemfurther. does notdevelopintoanopportunitythenImaycomebacktotheothertwo second stepandfocusontheworkdonebydebtcollectionagents.Ifthis with myassumptions,asanearlyhypothesis,Iwouldliketodigdeeperintothe so on,andthusmaynotbethebestcandidateforoutsourcing.Ifyouagree work—again giventhatitwouldrequirefamiliaritywiththerelevantlawsand tions, mayalsobetimeconsuming,butIassumeitwillmorespecialized and theremaybeanopportunityhere. The thirdstep,consideringlegalop- pears tobemorelaborintensive,giventhatitisinacallcenterenvironment, Interviewee: Firm: periodic contractualnegotiationswithcompanieslookingtoselltheirdebt. that purchasingthedebtisnotahighlylaborintensiveprocessanddependson Interviewee: didat.). also helpyouavoidmakingthemistakeofsimplyjumpingtoobviouscan- the thinkingthatmakesyoufocusonthisstepratherthanothers—thiswill people inacallcenterenvironment. You wanttotalktheinterviewerthrough portunity foryoubydescribingoneofthestepsasinvolvinglarge numberof cated]. Inthiscasetheinterviewerhaspracticallyidentifiedapotentialop- than couldbeachievedonshore [i.e.,attheplacecompanyiscurrently lo- sourcing isconvertinglaborcostsfrom fixedtovariableandatalowerrate appropriate foroffshore outsourcing. Themajoradvantageofoffshore out- (As outlinedinyourstructure, youwanttocheckifanyofthesestepswouldbe I thinkthosearereasonableassumptions,let’s proceedbydigging Yes, that’s mostlythecase. LIBRARY CAREER I’d liketolookatthisfromtwo pointsofview. The firstisfrom Considering themajorstepsinthisprocess,myassumptionis The nextstepthatiscarriedoutbydebtcollectionagentsap- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. of offshore outsourcing.Iwanttounderstandwhatthehigh-level stepswould Interviewee: client needstotake? enough financialincentivetotry togoahead. What arethe nextfewstepsthe cost savingsifwecanmakethis work. Assume theclienthasdecided thereis Firm: And therewillbeotheroverheadcostsperagentthatwehavenot accountedfor. site forqualitymonitoring,training,etc.—especiallythe transition phase. ings willnotbequitethathigh,sincetheclientneedsome staff retainedon 90 percentforthisdepartment,assumingitwasallmovedover. Still,thesav- Interviewee: about $5,000inIndiaorMalaysia. Firm: for thisjobprofile. get marketresearchoncomparativesalariesintheU.S.andIndiaorMalaysia Interviewee: going costs.) savings are significant,andthiswillthemuchlarger costbucketintermsofon- (Ignore overhead fornow. Thecostoflaboriswhere theopportunityforcost a back-of-the-napkinstylecalculation? Firm: labor costpoolwouldbe? Interviewee: one-off specialitems. Firm: ing costsarethedebtcollectionagents’ andtheoverheadassociatedwiththem? initiative, whichweretoreduceoperatingcosts. What portionofouroperat- Interviewee: ond partofthefinancialdecisiontoseeifthisisworthdoingornot? setup costswillbelargely one-timeexpenses.Howwouldyoulookatthesec- tablish itsownoffices, dorecruitmentorbasictraining,andthatother find apartnerinIndia,Malaysiaorsimilarplace,andwouldnothavetoes- Firm: shore. what wouldbeinvolvedinexecutinganoutsourcingofthisparttheworkoff- We don’t haveanyestimatesrightnow. What wouldyouexaminetodo Sure, let’s startwiththefinancialperspective. Assume theclientwould They compriseabout50to60percentoftheoperatingcostsexcluding Yes, that’s correct,butthereisquitelikelythe potentialforsignificant The peragentcostinNorth America isabout$50,000annuallyand That wouldimplythatthecostoflaborgodownbyabout And dowehaveanyestimatesforwhatpercentageanoffshore The secondareaIwantedtoexplore wastheoperationalaspect Cost oflaborisdrivenlargely bycompensationlevels. We can I wouldlookatthisinthecontextoffinancialgoals Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 125 Customized for: Jessica ([email protected]) 126 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Firm: for example,initsHR,whichwill takeplaceiftheoutsourcingisexecuted. its newpartner. Simultaneouslyitneedstostartplanningforinternal changes— can monitorandcontrolqualitylevelsasithandsoverpartof itsoperationsto succeeding. Italsoneedstodevelopappropriatequalitychecking planssoit gration, etc.,arereducedandthereisahigherprobability ofthechange rience withthiskindofoutsourcingwork,sothecosttraining, systemsmi- find anoutsourcingpartnertoworkwithandshouldpreferone thathasexpe- ating coststhroughoutsourcingthedebtcollectionagent’s step.Itneedsto Interviewee: Iwouldrecommendthatithasthepotentialforreducingoper- Firm: (A pilotphasewillalmostalways takeplacebefore anymajorchangetoabusiness.) closely withapartnerindifferent timezone. different HRrequirementsandpossiblelayoffs, policies forhavingtowork policies andcommunicationtodealwiththechanges—forexample,around appropriate qualitychecksinplace.Internally, theclientwillneedtodevelop well, wewouldhandoverthecompletesteptooutsourcingpartnerwith outsourcing partner’s systemsinparallelduringthisphase.Finally, ifallgoes running apilotphasetotesteverything,possiblybothourclientandits things suchasdatabasesprocedures,etc. Then wewouldhavetoexecutethis, to identifythebestwaymigrateclientsprocessespartner’s systems, an appropriatecontractandotherservicelevelagreements,workingwiththem ing anappropriateoutsourcingpartnerfromapoolofcandidates,developing outsource, butnotthe“how.” The “how”wouldincludestepssuchasselect- Interviewee: handling possiblestafflayoffs].) those dealingwiththeoutsourcing partner]aswelltheinternalones [e.g., which ishavingthestepoutsourced. Thinkabouttheexternalchanges [i.e. start from where theclientiscurrently andmovingtoward the“tobe”status, tant things.Onewaycouldbetothinkabouttheprocess chronologically— you shoulddothisinasystematicmannertomakesure youdon’t missimpor- (You wanttoidentifythedifferent stepsthattheclientwouldneedtotake,and Firm: ing before? the expertisetodothisornot.Hasclienteverdoneanykindofoutsourc- be thattheclientwouldhavetoexecutemakethisworkandwhetherithas Thank you. So whatisyourfinalrecommendationtotheclient? No. LIBRARY CAREER At thisstagewehaveidentifiedwhattheclientcouldpotentially © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat PetCo RevenueCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. from $2billionto$2.6 billioninthenextyear? Question: HowcanPetCoincreaseits revenue CEO shouldconsider. whether theCEOcanachievegoalsetbyboard,and theoptions You havebeen hiredtoevaluatethefeasibilityofthisgoal. You havetoassess enue by$600millionfromthecurrentrevenueof$2billionwithin thenextyear. industry. The CEOisundertremendouspressurefromthe boardtogrowitsrev- Revenue hasremainedrelativelyflatforthepastfiveyearsin matured petfood hired anewCEOtoreplacetheretiringwithmandatedriverevenue. Your client,PetCo,isapetfoodcompanyintheUnitedStates.Ithasrecently on laborcosts—butthiswillnotalwaysbethecase. this case,itwasunnecessary, giventheobviousstepthathadpotentialtosave interviewer withanegativeconclusiontowhattheclientisthinkingabout.In ent waystomakeapositivebusinessdecision,donothesitateprovideyour your abilitytothinkacrossfunctions. While itisimportanttolookfordiffer- the interview),butonlyidentifyingoneortwowouldnotreflectfavorablyon in yourinterview, norwouldyougoindepthall(dependingonthelengthof to evaluatethedecisioninaholisticmanner. You maynothitalloftheareas and qualitycontrolthatarekeyareasofthebusinessyoushouldbethinking kind ofdecisionthereareelementsfinance,operations,changemanagement It isimportantnottothinkinbucketswhenmakingbusinessdecisions.Inthis quite reasonablefortheinterviewertoexpectyoubefamiliarwithit. any kindofanalysisonit.Givenhowcommonoutsourcinghasbecome,itis the industry, youneedtounderstand thebusinessmodelbeforebeingabletodo client, andwhatisrequiredtodothis. As mentionedpreviously, regardlessof assessing aparticularbusinessmodeltoseeifitcanbemadeworkforthe IT industry, andpairsitwithafinancialservice. The corequestiondealswith This casetakestheconceptofoutsourcing,whichisnowcommonplacein Case analysis The following • PetCo isonethelargest playersintheU.S.petfoodindustry,• with40percent for it: market share. background data Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting will beprovidedonly — within- if theintervieweeasks LIBRARY CAREER Sample Cases 127 Customized for: Jessica ([email protected]) 128 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews The fourfactorsare: tails forotherrelevantinformationthatwillhelpanswerthequestion. a big-pictureperspective,whilealsoprovidingopportunities todrillintode- these fourfactorswillhelptheintervieweetoaskrightquestions andform tablishing aclearframeworkusingthefourfactorslistedbelow. Lookingto The intervieweeshouldattempttodeterminethegrowthopportunities byes- Suggested approach • PetCowillbelaunchinganinnovativeproductthisyearbyleveragingonits The needsoflesspopularpets,especially fish,arenotaswellmetthoseof • • PetCo productsaremainlytargeted atthetwomostcommonpets—catsand PetCo, thecompany,• isinamorefavorablemarketpositionastheleader • The petfoodindustryintheU.S.ismaturedandwillgrowat3percentfor • There willbeminimalantitrustissuesifacompanyinthepetfoodindustry One ofthepetfoodcompanieswith8percentmarketshare ispartofalarger• Two• otherpetfood companieshave8percentmarketshareeachandtherest and therefore,organic growthisprojectedtobehigherat5percentfornextyear. next year. enue benefitof5percentcurrentrevenueinthenextyear. are notwellmet. This PetCoproductlaunchwillresultinanincrementalrev- rently dominatedbythefragmentedmarketplayersbutneedsofpetfish current R&Danddistributionreachforfish. The marketforfishfoodiscur- cats anddogsduetothepoorofferings fromtheverysmallplayers. market foroneofthelesspopularpetssuchasfish. sters/gerbils. However, PetCohasalwaysbeeninterestedingettingintothe dogs—with verylittlepresenceinthepetfoodmarketforfish,birdsandham- has lessthan50percentofthemarketshareafteracquisitions. ticular petfoodbusinessfocusesonbirdsandhamsters/gerbils. food conglomerate,anditislookingtodivestthepetbusiness. This par- percent ofthemarket. of theindustryishighlyfragmented,withallothercompanieshaving1to2 • Competitive dynamics • Competitive • Customers’ needsandprofile characteristics • Company • Industry sizeandgrowth LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • Competitivedynamics: • Customers’ needs andprofile: • Companycharacteristics: • Industrysizeandgrowth: ness. This smaller company’s focusonbirdsand hamsters/gerbilsiscomple- pet foodbusiness,andiscurrently focusedonthebirdandhamster/gerbilbusi- the smallerplayersisownedby alarge foodconglomeratelooking todivestits more aboutthetwosmallerplayers, theintervieweewillbeinformedthatoneof players with8percentsharein the market.Byexpressingdesiretolearn petitive landscapeofthepetfood market,inparticularthattherearetwosmaller lion inthefirstyear. sanity checktodetermineifanewproductionlaunchcancapture $100mil- revenue of$100million.Ideally, theintervieweeshouldconductaquick percent ofthecurrentrevenue. A quickcalculationwillyieldincremental will beprovidedwiththeincrementalrevenuefromlaunch, whichis5 its distributionreach,R&Dandmarketresearchcapabilities. The interviewee an opportunityforPetCotolaunchitsinnovativefishproduct, leveragingon met bythefragmentedpetfoodcompaniesinmarket. This voidprovides already wellsatisfiedbyPetCo.However, theneedsoffisharenotaswell will beinformedthattheneedsofmostpopularpets—catsanddogs—are most popularpetsintheU.S.,andaskwhethertheirneedsarealreadymet.He mandate. continue torealizethatorganic growthwillnothelptheCEOinachievinghis 5 percentmultipliedbycurrentrevenueof$2billion. The intervieweewill calculate thattheorganic revenuegrowthofPetCois$100million,which rate forPetCoishigherthanthemarketaverage. The intervieweewillthen rate of5percentonceheisabletoassesswhythecompanyorganic growth The intervieweewilllikelybeprovidedwiththecompanyorganic growth scale, andisthereforemorelikelytoexceedtheoverallmarketgrowthrate. better negotiationpowerwithretailersandstrongermarketingeconomiesof such alarge andsignificantmarketplayer, willhaveawiderdistribution reach, in meetingtherevenuetarget. to quicklyassessthatincreasedorganic growthwilldefinitelybeinadequate growing atarateslightlyhigherthaninflation,theintervieweeshouldbeable market intheU.S.,whichis3percent.Byunderstandingthat of initiatives,theintervieweeshouldknowgrowthratepetfood and multiplyingby100percent). To evaluatetheorganic growthregardless industry istherefore$5billion(obtainedbydividing$240percent share (40percent)andrevenue($2billion). The marketsizeofthepetfood market sizeofthepetfoodindustrybyusingdataPetCo Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting The intervieweemustseektounderstandthecom- The intervieweemustbeabletodeterminethe The intervieweeshouldrealizethatPetCo,as The intervieweeneedstoquicklyassessthe — within- LIBRARY CAREER Sample Cases 129 Customized for: Jessica ([email protected]) 130 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews • This framework enablestheintervieweetoaskrightquestionsasaddi- • For theinnovation-drivengrowth, itisalsonecessarytodoasanitycheck • New productintroduction—Reliablemarket researchandpilottestsshouldbe • a morecomprehensiveandwell-thought-throughrecommendation. The intervieweeshouldalsoproactivelyaddressthefollowing riskstoprovide Additional recommendations • Third,acquiringoneofthesmallercompetitorswith8percentmarket • Second, innovation-drivengrowth, spearheadedbyPetCo’s newproductfor First, organic• growthduetoPetCo’s leadingmarketposition,widerdistribu- $600M withinthenextyearthroughthreestrategicinitiatives. CEO willbeabletoachievethegoalofincreasingincrementalrevenueby Given theindustryevolutionandPetComarketposition,itislikelythat Basic recommendations time frameofoneyear. strategic initiativesof30percentrevenuegrowthwithinanextremelyshort This informationwillhelptheintervieweedrivetowardsdeveloping tional newinformationisobtainedfromeachofthefactorsinframework. the acquiredcompanyhasan8percentmarketshareina$5billionmarket. the companywillprovideanotherincremental$400millioninrevenue,because mentary toPetCo,whosecurrentfocusiscats,dogsandfish. An acquisitionof capturing 2percent oftheentiremarketfrom restofthecompetitorsseems new productisfeasible.Given thattheentirepetfoodmarketis$5billion, determine ifthe$100millionincremental revenuegrowthfromlaunchinga the acquiredfirm(birdsandhamsters/gerbils). cannibalization duetothecurrentproductfocusofPetCo(cats anddogs) conducted toensuresuccessfulpetfishproductintroduction withminimal billion petfoodmarket=$400million) will immediatelybringincrementalrevenueof$400million(8percent$5 million (5percentof$2billionrevenue=$100million) the petfishmarketwillneta5percentincrementalrevenuebenefitof$100 million) incremental revenueof$100million(5percent$2billion= economies ofscalewillresultina5percentmarket-drivengrowthwithnet tion reach,betternegotiationpowerwithretailersandstrongermarketing LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Pro BonoCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • Acquisition—Given thatthenewcombinedPetCowillhave48percentof • while 75percentmustcomefrom ticketsales. The speakers arenotpaid. the NPOprojectedthatcorporate sponsorshipcancover25percentofthecost, meals areprovidedforthestudents. Duetoitslimitedfund-raisingcapability, past twoyearssinceitsinception. YI usesvolunteerstoruntheevent,andno a midsizedcity, witharound4,000studentsparticipatingin each eventforthe Youth Inspiration hasheldtwoLDeventstargeting middleschoolchildrenin and ismotivatingstudentstotakeonleadershiprolesresponsibilities. to motivateandinspireyoungpeople. The eventhasbeenverywellreceived, its mostpopularprogramisLeadersDayevent,wherespeakers areinvited Youth Inspiration (YI). YI’s missionisthepromotionofyouthleadership,and One ofourprobonoengagementsinvolvesanonprofitorganization called • Alltherevenueopportunitiesmustadduptoanincrementalgrowth • The intervieweemustquicklystatethatorganic growthwillnotbeableto A• commonmistakeistobetoodetail-orientedandnotstrategicinevaluating Study notes ulator toensurethatitwillnotblocktheacquisitiondueantitrustconcerns. pet foodmarket,itiscriticaltoaddresstheconcernsofgovernmentreg- nibalization fromlaunchingaproductforpetfish. pany thatfocusedonbirdsandgerbils/hamsters,therewillbeminimalcan- reasonable. GiventhatPetCoisgoingtoacquirethesmallerpetfoodcom- back tothequestionanswercase. and getallthemathcorrect,butstillnotaceitbecauseoffailuretocircle of $600milliontoanswerthequestion. The intervieweemightdrivethecase through newmarketpenetrationandacquisitions. strategic sourcesofrevenuegrowth,namelyinnovation-drivengrowth satisfy theCEO’s mandate.Itiscritical totakeastepbackandzeroinon gressive growthtarget withintheveryshorttarget timeframe. volume. Butthisstrategywillstillnotbesufficient toachievetheveryag- bution andsellingthesameproductatlowerpricestogenerateincreased ing thecapabilitiesofcompany, forexample,throughincreasingdistri- the optionsavailabletoCEO.Itiseasybeoverlyfocusedonimprov- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 131 Customized for: Jessica ([email protected]) 132 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews ings. Within thepublicsector, education-relatedgovernmentagenciesmayor- Interviewee: ferings. Firm: but $15isdefinitelythelower-end amount. at amuchhigherorlowerprice,then YI canpriceaccordingtothecompetition, enced bycompetitiveorcomparableofferings. Ifthereareverysimilarevents ness ofthestudentorschooltopayforevent,whichissignificantly influ- From themarketpricingperspective,itisimportanttodetermine thewilling- can bedeterminedfromadetailedcostaccountinganalysis. sorship. The “true”break-even ticketpriceshoulddefinitelybehigher, which time inrunningLeadersDay, andalsothetimespentseekingcorporatespon- include theallocatedsalarycostofEDandotherfull-time staff members’ flects thecostofrunningeventwithcorporatesponsorship. This doesnot Interviewee: Firm: of eachticketshouldbeatleast$57,000/4,000=$14.25or$15. percent =$57,000as25ofthecostwillbesponsored. The break-evenprice $1,000. The totalcosttobecoveredthroughticketsalesis($75,000+$1,000)*75 ber ofvolunteersneededis4,000/100=40. The volunteerswillincurcostsof Interviewee: Round upyourfinalticketpriceperstudenttothenearestdollar. sold. What isthebreak-evenpricegiventhatthereare5,000seatsinvenue? transportation tothevolunteeris$25. Also, assume80percentoftheseatswillbe and theratioofvolunteerstostudentsis1:100,costprovidingmeals Firm: as manystudentsitcan. Therefore, sincethecostofvenueisfixed,itcriticalfor YI to fill itwith The variablecostsincludetransportationandfoodexpenseforthevolunteers. costs. The fixedcostsincluderentalofthevenueandaudiovisualequipment. Interviewee: What must Youth Inspirationdotoensureprofitability? Firm: nancial sense. the highschoolmarket,andhasaskeduswhetheritsmakesstrategicfi- The executivedirector(ED)islookingtoexpandtheLeadersDayeventinto Assume therentalcostofvenueandaudiovisualequipmentis$75,000, Tell meinmoredetailwhatyoumeanbycompetitiveorcomparable of- What doyouthinkisthemaincoststructureofholdingsuchanevent? Will youpricetheticketat$15?Explainyourrationale. LIBRARY CAREER The numberofseatstobesoldbreakevenwill4,000. The num- From thecostpricingperspective,thisbreak-evenpriceonlyre- Both thepublicandprivatesectors canoffer comparableoffer- The maincoststructurecanbedividedintofixedandvariable © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. $60,000 andafull-time staff memberispaid $40,000. The twoLeaders Day does thistranslateintoafinancially sustainablesituation? The EDispaid Firm: has alreadypenetratedthemiddle schoolmarketquiteeffectively. end. Therefore, havingapproximately20percentofthemarket meansthat YI a typicalpopulationpyramid,43,000isconservativeestimate andthelower Given thatthereareagreaternumberofyoungerindividuals thanolderin middle schoolpopulationwillbe(1,000,000/7)*3=43,000. pectancy is70yearsold,soeachagebucketonemilliondivided by70. The total one fromage12to15isattendingmiddleschool.First,assumethe typicallifeex- grades six,sevenandeight,whichcoversagesfrom12to15. We assumethatevery- in atypicalpopulationofonemillionpeople.Middleschoolconsists ofchildrenin middle schoolstudents. We needtodeterminehowmanymiddleschoolstudentsare Interviewee: ThetwopreviousLeadersDayeventshavealreadyattracted8,000 lations tothenearestthousand. more thantwohoursaway. You shouldfeelcomfortable roundingyourcalcu- venue. Itisalmostimpossibletoconvinceschoolssendstudentsanevent one millionpeoplelivewithinthetwo-hourdrivingradiustointended Firm: profits. dents, whichexplainswhy YI maynothavestrongcompetitionfrom othernon- The marketforthistypeforummayalreadybesaturatedintermsofnumberstu- implications fortheirimage. adults forafee,butspeakingtoyoungstudentsfeemayhavenegative students. Speakerswillusuallybewillingtospeakfinanciallyindependent do notwanttobeperceivedasfinanciallybenefitingfromspeakingyoung Private companiesmayfinditchallengingtoattractmotivationalspeakerswho pensation. ing onmoretangibleitems,suchasimprovinginfrastructureandteachercom- a forumaspriorityand,givenlimitedresources,wouldratherfocustheirspend- the venueandspeakers.Education-relatedgovernmentagenciesmaynotseesuch Interviewee: Firm: Thereisnotmuchcompetitionto YI’s LD. Why doyouthinkthatis so? can alwaysorganize similarevents. interschool forums.Straddlingtheprivateandpublicsector, othernonprofits the privatesector, for-profit companiescanpayspeakerstoorganize similar ganize interschoolforumswheremotivationalspeakersgivelectures. Within How doyoudetermineifthemarketisalreadysaturated? Assume that If thecurrentpricingforamiddle schoolstudentis$15fortheevent, In termsofthepublicsector, itmaybehardtojustifyspendingon Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 133 Customized for: Jessica ([email protected]) 134 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews ket. Currently, breakingevenrequires4,135highschoolstudents, eachpaying$30 Interviewee: Firm: The break-evennumberforattendinghighschoolstudentsis 4,135 perLD. break-even number. => $3,000x-x=$12,400,000x12,400,000/2,9994,135, whichisthe equal to$30x-$70,000-x/100=$54,000. Therefore $30x-x/100=$124,000 $70,000+x/100. The totalrevenue willbe(x*$30). The numberofstudentsis Let xbethenumberofstudentsattendingeachevent. The totalcostwillbe the highschoolmarketmustensureatleasta$54,000profit. Interviewee: sume thevenueandvolunteercostsaresameasmiddleschoolLD. $30 aticketforhighschoolstudents,andthatthereisnocorporatesponsorship. As- market withoneLDperyear, andwhetheritisfeasible? Assume thatwecancharge Firm: market isastrategic,financiallysounddecision. from arevenueperspective,thedecisionbyEDtoenterhighschool none oftheseoptionsarehelpfulinensuring YI’s long-termsuccess. Therefore, part-time staff, andlookforalessexpensivevenuetheevent.However, tives. Fromacostperspective,theEDcanreducehisorhersalary, layoff the Interviewee: Firm: uation isnotfinanciallyviable. YI isexpectedtolose$54,000everyyearifthestatusquoprevails,andthissit- is $76,000*2+$60,000+$40,000=$252,000. The totalcostofoneLDis$76,000. Therefore, thetotalcosttononprofit percent oftotalrevenue,thewillbe$158,000/80*100=$198,000. revenue fromthetwoLDsis$158,000.Giventhatcontribute80 cost baseforthetwoLD,whichis$76,000*25percent*2=$38,000. The total is $15*8,000=$120,000.Corporatesponsorshipcontributes25percentofthe Interviewee: A $15ticketpricemeansthattherevenuegeneratedfromsales only costisfromtheEDandfull-timestaff salaries. revenue comesfrom100percentfeepayingleadershipworkshops,wherethe events contribute80percentoftotalrevenueto YI. The other20percentofthe What isyourrecommendation to theED? What can YI dotoovercomethesefinancialchallenges? Can youdeterminethebreak-evenanalysisforenteringhighschool LIBRARY CAREER The EDshoulddefinitelylookinto enteringthehighschoolmar- YI isexpectedtolose$54,000everyyear. Therefore, entering We canaddresstheissuefrombothcostandrevenueperspec- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Publishing CompanyM&ACase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. will findout/ask aboutthecompany’s assetsveryearly oninthecase. The ex- This isathreeC’s +marketsetting/dynamicscase. A successfulinterviewee The company isbestknownforitsconsumerandeducationalpublishingassets in • • The newCEOisaclienttothefirm. The firmishopingtoestablisha Theclientisalarge, globalpublishingcompanywithholdingsinavarietyofmar- • Additional informationprovidedduringquestioning structure that? CEO hascomeintoaskushelphimreevaluatethatactivity. Howwouldyou egy. The companyhadalotofM&A activityinthelast10years,andanew A large, globalpublishingcompanyhashiredustohelpitwithitsM&A strat- speakers ortocastthenetwiderattractagreaternumberofspeakers. events inayear, andtherefore,thereisaneedtorequestreferralsfromcurrent One keychallengemaybe YI’s abilitytoattracthigh-qualityspeakersforallfour members mustleveragethevolunteernetworktorunanadditionaltwoevents. least $50,000inprofitandbuildfinancialreserves. The EDandfull-timestaff If Youth Inspiration isabletoholdasecondLD,thenitwillbegenerateat and leveragingitstrackrecord. the EDcanconsiderloweringpricebyattainingsomecorporatesponsorship To ensurethatthehighschool-focusedLDcanattractareasonablylarge crowd, population islarger thanthemiddleschoolpopulation,duetowiderageranges. for eachLD. This break-evennumberisreasonable,giventhatthehighschool seas businessesaregrowingfaster thanitsU.S.businesses. the U.S.andU.K.Overseas, itsbrandislesscategory-specific,andover- viewee onceheorsheasksformoredetailsontheclient’s holdings). company’s holdingsisincludedinExhibit1(whichshouldbegiventotheinter- kets internationallyandwithholdingsinseveralindustries. A fullbreakoutofthe company’s foundingassets,liketheprofessionalpublishingcompanies. formation, thenewCEOwouldlikelybeveryreluctanttosell off hisfamily’s ever, itmadeitsnameinthebusinessnews reportingindustry. Giventhis in- was originallyfounded,itarailwayindustryreportingcompany; how- great-grandson ofonethefounderscompany. When thecompany longer-term consultingrelationshipwiththeclient. The newCEOisalsothe Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 135 Customized for: Jessica ([email protected]) 136 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews (A high-levelsummaryofhow toapproach thecaseinthiswayisonpage137.) we likelytobeatthecompetition? the businessesthatwe’rein? Where isthecompetitionbeatingus,andwhereare those customersbetweenbusinesses?;4) What’s thecompetitionlikeforeachof of businessandarethererevenuesynergies andcross-sellingopportunitiesfor attractive, orunattractivemarkets?;3) Who aretheclient’s customersineachline ket dynamicslikeinthemarketsthatclientcurrentlyhasbusinessin—arethey 1) What arethecompany’s corecapabilitiesandinterests?;2) What arethemar- Interviewee: Well, Iwouldwanttodividemyanalysisintofourmajorbuckets: (Few minutesgoby…) Firm: Interviewee: Firm: going forward.Isthatcorrect? evaluate thispublishingcompany’s holdingsandrecommendanM&A strategy Interviewee: Breakdown ofsolution school graduate. M&A strategygoingforward,butthatwouldonlybeexpectedofabusiness An advancedintervieweemightbringupportfoliotheorytoevaluatingthe data, thecruxofmanystrategycases. test theinterviewee’s abilitytosortandanalyzequalitativequantitative hibits areusedbothtogivetheintervieweeinformationaboutcaseand Yes, that’s correct.Howmightyoustructurethatkindofanalysis? Of course.Justletmeknowwhenyou’rereadytobegin. LIBRARY CAREER Can Ihaveafewminutestocollectmythoughts? So, itsoundslikewe’vebeenbroughtinbyanewCEOtore- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. MARKET SETTING/ COMPETITORS CUSTOMERS COMPANY DYNAMICS company’s holdings isincludedinExhibit1. ternationally andwithholdings inseveralindustries. A fullbreakoutofthe is alarge, globalpublishingcompanywithholdingsinavariety ofmarketsin- Firm: Sure.Botharegoodtopicstohave agoodunderstandingof. The client ness—can Igetabettersenseof that? activity inthelast10years,Iimaginethatithasalotofdifferent linesofbusi- CEO andthecompany’s holdings.IftheclienthasbeendoingalotofM&A Interviewee: like toknowmost? Firm: Let’s beginwithyourquestionsaboutthecompany. What wouldyou Sure. I’dactuallyliketoknowalittlemoreaboutboththisnew Vault CaseInterviewPracticeGuide2:MoreInterviews What’s inourportfolio? businesses? Are thereanyrevenuesynergiestobehadbetween Who arethecustomersforeachofbusinesses? www.vault.com/consulting • Whatarethoserevenuesynergiesandhowmuch • Whatgeographicmarketsarewelocatedin? • Whatlinesofbusiness?industriesdoweplay • What marketscarrythemostriskfor our • Are thereattractivemarketsadjacenttothemar- • What marketsthatweareinhavegoodbarriersto What marketsaregrowing?shrink- • • Where areourcompetitorsstrong?we What dowehavethatdifferentiatesusfromour • • Who areourcompetitors? they worth? in? Whatcustomergroupsdoweserve? businesses? enter? kets thatwe’recurrentlyinwemightliketo entry? ing? kets/industries arewelosingtothecompetitionin? stronger thanthem?(Marketshares?)Whatmar- competition? portfolio? Where aretherecostsynergiestobehadwithinthe What arewebestknownfor? What areourcorecapabilities? — within- LIBRARY CAREER Sample Cases 137 Customized for: Jessica ([email protected]) 138 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews B2B MagazinesandNewspapers Administrator Report National Hospital Cleveland Lawyer Atlanta Lawyer Southwest LawMonthly New EnglandLawJournal Asia LawReview Quarterly Report Crop &Grain Hospital AdministratorNews Monthly New MedicalScience HealthGroup Quarterly Railway NewsDaily Rail andTransportReport Railway Monthly Gulf Gazette Gulf CoastReport Gulf StreamMonthly Corn HarvestDailyReport Magazine Global Lawyer Report Chicken Farmer’sWeekly Shipping MonthlyMagazine Exhibit 1:Client’s Businesses LIBRARY CAREER NationalLawyer.Com AirTravel.Com Airway.Com TravelGroup.Com AustraliaLaw.Com EuropeLaw.Com MiddleEastLaw.Com AfricaLaw.Com AsiaLaw.Com Hospital.Com Science.Com NewMedicalScience .Com Information.Com HealthCare HighSeas.com Rail.Com GlobalLawyer.Com Shipping.Com ClevelandLawyer.Com Com PhysicianAssistant. Doctor.Com NurseNews.Com GlobalShipper.Com TravelAgent.Com Web sites Family Health Women’s Health Your Health This MonthinBusiness Watson Textbooks Watson Testing Watson Education Educational Publishing PanEuropa Paperbacks Asia Paperbacks Timeless Paperbacks Learning TreeWorkbooks Consumer Publishing Snoody’s Ratings Ratings-Asia Small Business Ratings-U.S. Small Business B2B RatingServices Consumer Magazines © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Exhibit 2:RevenueandProfits byBusinessLine data onthecompany’s holdings: purchased inthelastfiveyearsofM&A activity. Letmegiveyou somemore Firm: agencies. It lookslikeithasalotofwebsites,andsomeotherbusinesses,ratings just apublishingcompany, evenifthat’s whatthecompanyisbest knownfor. Interviewee: what youknownow? ven analysis. What areyoumostinterestedinlookingatyouranalysisgiven to tellhimwhathewantshear—weneedimpresswithsharp,data-dri- sulting relationshipwiththeclient.Butthatdoesn’t meanthatwearejustgoing Firm: get morework. ing toimpressthisnewCEOsothat,ifwedoagoodjobwithproject,we’ll Interviewee: founding assets,liketheprofessionalpublishingcompanies. this, thenewCEOwouldlikelybeveryreluctanttoselloff hisfamily’s company’s company; however, itmadeitsnameintheB2Bnewsreportingindustry. Given When thecompanywasoriginallyfounded,itarailwayindustryreporting to thefirmandisalsogreat-grandsonofonefounderscompany. In termsofthenewCEO,there’s alottoknowthere,too. The CEOisanewclient overseas businessesaregrowingfasterthanitsU.S.businesses. in theU.S.andU.K.Overseas,itsbrandislesscategory-specific, The companyisbestknownforitsconsumerandeducationalpublishingassets That’s right.It’s gottenprettydiversified.Mostofthewebsiteswere We definitelyare. The firmishopingtoestablish alonger-term con- Right. Well, inlookingatExhibit1,itlookslikethis ismorethan That’s goodclientbackgroundtohave. Iimaginethatwe’retry- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 139 Customized for: Jessica ([email protected]) 140 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Exhibit 3:RevenueandProfits byIndustrySector enue andprofits, justdividedupand looked atintwodifference ways.) ference betweenthetwoexhibitsbefore analyzing thedata—it’s thesamerev- (The interviewerwilllikelymake sure thattheintervieweeunderstandsdif- Firm: instead ofin“Web Sites.” industry sectorsthatit’s in.So,thewebsitesinlegalsectorare“Law” lines ofbusiness,andExhibit2showsthecompany’s revenueandprofitsbythe two exhibitsfirst.Exhibit1showedthecompany’s revenueandprofitsbyits Interviewee: Firm: gether forthecase: Firm: from thedatabefore movingon.) the interviewerisentitledtopushthemobserveasmanythingspossible hibit 2.Iftheydonotgetalloftheobservationslistedabove,that’s fine,but (Here, intervieweesshouldmakeatleasttwoobservationsfrom thedatainEx- businesses arenottherealdriversofprofitsforcompany. azines business. Third, itseemsliketheconsumermagazinesandpublishing bring inalmosthalfoftheprofits. The storyisverysimilarwiththeB2Bmag- cent oftheprofits.Second,itseemslikeB2Bratingsservices,whilesmall, lishing businessbringsinasignificantamountoftherevenue,butonly10per- Interviewee: Firm: That’s exactlyright. What doesthisexhibittellyou? What doesthisexhibittellyou? That’s great.Nowletmeshowyou somemoredatathatweputto- LIBRARY CAREER It tellsmeafewthings.First,itlooksliketheeducationalpub- Let memakesurethatIunderstandthedifference betweenthe Care © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Exhibit 4:RevenueGrowth byMarket What doestheexhibitbelowtellyou? I’d liketoknowyourthoughtson. Firm: case.) but shouldbepushedtocomeupwithmore, asthisdatawilllikely drive the (Again, theintervieweeshouldmakeatleasttwoobservationsthispoint— care sectorcontributesignificantlytobothrevenueandprofits. essary, orattractiveeither. Fourth,itlookslikeboththelegalsectorandhealth tion oftherevenueorprofitscompany. Agriculture doesn’t lookthatnec- profits. Second,itlooksliketherail/transportsectordoesn’t makeupalarge por- tor seemstomakeupalarge portionoftherevenueforcompany—butnot Interviewee: That’s right.So,Ijusthaveonemore pieceofdataonthecompanythat Well, ittellsmeacoupleofthings.First,again,theeducationsec- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- 7 LIBRARY CAREER Sample Cases 141 Customized for: Jessica ([email protected]) 142 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews we’re goingtorecommend thathesellit,Iimagine thatwillbeahardsell,and sold. ButIknowthatthiswas thisCEO’s great-grandfather’s business;so,if not lookthatsignificantinterms ofrevenueorprofits;so,itcouldeasilybe Interviewee: Firm: are growingfaster, astheireconomiesare growingfaster. ward, heshouldlooktodevelopingcountriesandmarkets,where hisbusinesses he’s concernedwithwhereheshouldmakestrategicacquisitionsgoingfor- profitability. Those businessesshoulddefinitelynotbesold. Furthermore,if health careandfinancialservicessectors,drivealotofthecompany’s current business linesinB2Bpublishingandratingsservices,particularly inthelegal, enue andprofitdriversforhiscompany, andthatitlookslikethecompany’s Interviewee: How wouldyousummarizethiscase? he’s eagertoknowhowthecaseis goingandwhatwe’relikelytorecommend. Anyhow, let’s saythatyourunintotheCEOinhallwayat clientsite,and strong correlationwithcapitalmarketdevelopmentinacountry. Firm: ally takesoff wheneconomiesandcapitalmarketsstarttodevelop. nesses willdowell,especiallythatratingsagencybusiness,whichprobablyre- healthy economicgrowthanddevelopmentinamarket,Iimaginethebusi- mainly servesB2Bcustomers—andeducationcustomers.So,aslongthere’s Interviewee: essary forasuccessfulcaseinterview.) (Answering thisquestionwillgiveanintervieweebonuspoints,butisnotnec- that be? Firm: like Latin America, Asia, Africa andtheMiddleEast. longer growingnearlyasfastthebusinessesindevelopingpartsofworld, from thisinanutshellisthattheU.S.,U.K.andEuropeanbusinessesareno GDPs ofthecountriesintheseregionsforlastfewdecades. What Itake Interviewee: Firm: ent geographicmarketsforthelastfewdecades. rectly, thisillustratesthegrowth ratesforthecompany’s businessesindiffer- Interviewee: That’s right. And you’rerightaboutittyingtoGDP growth—whymight And whataboutthebusinesses heshouldsell? Yes, that’s correct. That’s right. We foundthatrevenuegrowthforthesebusinesseshada LIBRARY CAREER Well, Iwouldsaythat we’ve donealotofanalysisonthekeyrev- Well, IhavetosaythatI’mnotsurprised.Ifreadingthiscor- Well, fromthelooksofthesebusinesses,itseemslikeclient Well, that’s atrickyone.I mean,therail/transportsectordoes Well, theyalsolooksimilartotherelativegrowthratesfor © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Regional BankCommercialCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • Theprofitability question. to address/assessare: There aremultipleanglesforthis case.Someoftheissuescandidateneeds sition. Bothquantitativeandqualitative sidesofthecaseneedtobeanalyzed. It isimportantthecandidateunderstands andprobeswhythebankisinthispo- Candidate evaluation and potentialsolution? If youweretheengagementmanageronthisjob,whatwouldbe yourapproach Questions tobeansweredbycandidate • The objectiveistomakethecorporatebanksought bycustomers,feared • It isunabletodetermineprofitability, whichisespeciallyimportanttothe Its rapidgrowth,lackofbusinessfocusandsegmentationincommercial bank- • • It hasaseparatecharterineachstateandbanksoperateau- • Super BankisaregionalbankintheSoutheastwithcorporate/commercial viewer Some casefactsinitiallyofferedbytheinter- for acorporatefinanceconsultingpractice.) a businessschoolgraduate—andeventhen,probably onlyinacase interview which businessestosellandkeep,butthatwouldonlybeexpectedof (An advancedintervieweemightbringupportfoliotheoryinthesummaryof Firm: way. one thatIwouldn’t necessarilytrytomakewhenIranintotheCEOinhall- competitors andasourceofprideforemployees. bank’s management. ing havecontributedtocommercialbankingproblems. tonomously. operations ineightstates. That makessense—andyou’reprobablyright.Goodjob! Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 143 Customized for: Jessica ([email protected]) 144 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Possible analysisregarding profitability Firm: balance percustomerforthebank? Interviewee: erage forsimilaroperationsisbetween2to2.5percentoftheoperational size. Firm: on variablecosts? Interviewee: Firm: Interviewee: Andhowmanyarethereatpresent? no matterwhatthesize. Firm: Interviewee: That’s ahugecost.Doesthisvary according tothecreditamount? year. Firm: Interviewee: percent. Firm: Interviewee: Dowehaveanyinformationaboutthespread? Firm: Interviewee: Firm: Interviewee: revenue sidesoftheclient’s banking operation. For answeringtheprofitabilityquestion,onehastoanalyzecostsideand Suggested solutions • Keyquestiontoanswerinthiscase:issuesoffocusandwhetherthe“Isbig- • Identifypotentialreasonsforlackofhighbrandimage,ifany. • Thecurrentimageofthebankwithinitsexternalandinternalcustomers. ger better?”philosophyworksforSuperBank. There’s noexactfigurefortheentirebankatthispoint,butindustryav- Major costcomesfromthecreditofficers, whichtotals$75,000,000per Bank borrowsfromtheFedatarateof6percentandlendsmoney9 $50,000. Seven hundredandfiftycreditofficers. It hascustomersofallsizes. One millioncommercialcustomers. Each officer spendsthesameamountoftimeoneachcreditproposal, LIBRARY CAREER What istheaveragesizeofacustomer? What isthecustomerbaseofbankacrossregions? If welookatthecostside,whatinformationisavailable? If welookatthecostsideagain,whatinformationisavailable That’s interesting!Isthereanyinformationabouttheaverage © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. cessing fees? want tocomethisbankover others.Doesitoffer better ratesorlowerpro- Interviewee: tify potentialreasonsforthebank’s declineincustomerservice,if any. pany, customerandcompetition)analysis. Then heorshecanprobetoiden- For analyzingtheimagequestion,candidatecanadopt threeCs(com- tomers Possible solutionsfor image-building amongbothexternalandinternalcus- small loans,increasetherateforloansorexitloan businessentirely. taking toomanysmallloanapplications.Itshouldreducetheamount oftimeon From thegiveninformation,onecanalsocometoconclusion thatthebankis to generatetherequiredvolumeofbusiness. whether thecreditofficers’ costsarejustifiable andwhethertheywillbeable more accuratefigure. The bank’s managementshouldalsomakeadecisionon study ofitsvariablecostsandfixedcanbeundertakentocomeacrossa This givestheintervieweeadecentpeekatbank’s profitability. A thorough Possible recommendation for profitability X =$20millionvolumeofbusinesseachpersonshouldhandleyear. 3 percent(X)=2.5+$100,000(costspentoneachcreditofficer). Therefore atbreak-even: 2.5 percent Given thatthespreadis9percent-6=3percent,assumecharge off is officer mustprocessinayeartojustifythecostincurred: The candidatecanfurthertrytocalculatethebreak-evenvolumeofloanseach Cost)/Revenue). Therefore, theContributionMargin is20percent.(Revenue- Variable tomers *averagebalance)2.5%=$1.25million. percent oftotaldeposits.Hence,variablecostsare$50billion(numbercus- etc.). Assuming theindustryrange, thevariablecostscanbecharged at2.5 Costs aredividedintovariablecosts(charge offs) andfixedcosts(salary, rent tomer size)*$50,000(averagebalance)=$1.5billion Revenue =3percent(thespread-9to6percent)*1,000,0000(cus- culate thefollowing: With theavailableinformationandsomeassumptions,candidatecancal- The firstissueIwouldliketoaddress iswhycustomerswould Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 145 Customized for: Jessica ([email protected]) 146 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews Possible recommendation for customer serviceissue customers oftheacquired banksindifferent statesare suffering.) through acquisitions,thefocusoncommercial bankinghasbeenshakenand (From theaboveinformationcandidate canidentifythatduetoexpansion local banksineverystatethatare highlycompetitive. Firm: ing inthesamelandscapealllocations? Interviewee: Firm: Interviewee: ficers. Firm: Interviewee: istration. growing frictionbetweentheaccountofficers, productunitsandcreditadmin- Firm: Thebankisnotprovidingahighqualityofservicetocustomersdue inconsistent? Interviewee: Hastherebeenanyresearchonwhytheunderwritingskillsare mercial bankingprocess. while thebankhasactivelyacquirednewbanks,therebycomplicatingcom- Firm: adopting variousprocessesforunderwriting? Interviewee: tains goodcreditquality. Firm: where thebankwantstoimprove? Interviewee: number foreachtypeofquestionorproblem.Callwaittimesareoftenlong. Firm: service? Interviewee: dustry. Firm: Thebank’s ratesareverycompetitiveandsomeofthelowestinin- There’s nosinglebankwithinallstatesbutthereareanumberofsmaller Yes, thebank hasnotbeenabletoattractandretainthebestaccountof- In mostofthestates. Yes, yourguessisright. Also, costandcreditcontrolshavetightened The bankhasinconsistentcreditunderwritingskills,thoughitmain- Service timeisaproblem.Customershavetocalldifferent phone LIBRARY CAREER Has therebeenaproblemofworkforceturnoverwithinthebank? Are theseproblemsinoneparticularstateoracrosslocations? How competitiveistheenvironment?Isthereanybankoperat- Do thecustomersfaceanyotherproblemsintermsofcustomer Is theinconsistencyduetoitsmanybranchesindifferent states Is thereanyreasonwhycustomersavoidthisbankorthearea © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • There isalackofestablishedprocesses atthispoint,especiallyindetermin- Weakness • Ithasalreadyestablishedcommercial bankingskills. • Ithasgoodcreditwritingskillsandacustomerbase. • Thebankhasgrownthroughmultipleacquisitions. Strengths tion canbequicklysummarizedasfollows: The candidatealreadyhasinformationfromtheabovediscussions. The situa- Possible analysis tunities andthreats)toformulateananswer. question, andonecanperformaSWOT analysis(strength,weakness,oppor- acquisitions orconsolidateitscurrentoperations. This isademand-oriented The finalpartofanalysisinvolveswhetherthebankneedstoexpandthrough cordingly. the industry(recentbankruptciesoracquisitions,etc.)andadoptpoliciesac- cused organizations. Onecanalsotrytopinpointwhathasrecentlychangedin that customerserviceisoftenbestconductedbysmaller, morecustomer-fo- One shouldquestiontheimplicationsof“marketleader”statusandrecognize Harmonize relationshipsandmakesurethereareformalcommunication chan- • Focus ontheHRpolicyandmakeaneffort toretainthebesttalent.Introduce • • Institute relationshipmanagersandservicetoimprovethequality To• maintainuniformityandtoimprovequalityofcustomerservice,thebank The followingaresomepossibilities: ing profitabilityforthebankas awhole.Growingbiggerwithoutconsoli- nels betweentheaccountofficers andcreditadministration. performance-based incentivesystems. send arepairpersonfamiliarwiththatcustomerortypeofsystem. help desk),aswellajobtrackingsystem,whichwouldallowthestaffer to adding morerepairpersonnelortechnicallyknowledgeablestaff tothe of customerservice. The companycanconsideraworkforcerestructure(e.g., which itoperates. needs toconsolidatethecommercialoperationsacrossallofstatesin Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 147 Customized for: Jessica ([email protected]) 148 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews • The demographicsoftheareasurroundingprospectiveacquisitionshould • The clientmustexamineif any newacquisitionwouldcomplementitsexist- • ture acquisitions. More thanthreats,thebankmustresearchfollowingbeforemakinganyfu- Threats Once thebank’s• operationsareconsolidatedandformalized,itwilldefinitely • TheabsenceofasinglebankinggiantintheSoutheastarea. Opportunities • Qualityofcustomerserviceandfallingbrandequityareissues. tions amongmany. The candidate maycomeupwithhisorherownideas. for improvingcustomerserviceand fortheissueoffocusareafewpossiblesolu- derstands thecompletenatureof bankingissuesinvolved. The recommendations fashion. Itisimportantthatthecandidate pursuesasolutionthatisholisticandun- cover alloftheabovetopics,butratherworkthroughselectedtopics inalogical the candidateisexpectedtoconsider. Itisnotexpectedthatanintervieweewould This casecanprovetobelengthyandveryinvolved,giventhethree componentsthat Key takeaways • At thispoint,“biggerisbetter”notaviablesolution,giventhattheprof- The bankshouldnowconcentrateonfocusandaimtofulfilltheobjectiveof • Possible recommendation petitors shouldalsobeconsidered. be comparedwiththoseofhistoricallysuccessfulbanks.Locationcom- be examined.Population,businessconcentration,incomelevels,etc.,should profitability, etc.)andwhatpurposeitwouldserve. ing competenceandstrategy(i.e.,commercialbanking,highgrowthor have acompetitiveadvantageandcanexpanditsbusiness. plicated. dating existingoperationswillonlymakethebankingoperationmorecom- itability ofthebankisnotexceptionallygood. source ofprideforemployees. making thecorporatebanksoughtbycustomers,fearedcompetitors anda LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Satellite CommunicationsSystemsCase Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. client iscurrentlyreviewingfor commercialpotentialaresoftware-based? Interviewee: provide sothatthecommunications datacanflowthroughthem. to interconnectthedifferent hardware componentsthatotherengineeringfirms It providescustomizedsoftwarefordifferent partsofthenetworkthatisused tract outdifferent partstothese specializedfirms.Ourclientisonesuchfirm. contracts fromstates,countries,nationaltelecomfirms,etc.,and thensubcon- very littleoverlap. The large globalengineeringfirmsaretheonesthatwin comprised ofdifferent companies providingengineeringserviceswithusually ware andsoon.Eachishighlyspecializedaminiindustry ofitsown, nents rangingfromgroundservices,uplinking,downlinking, integration soft- Firm: idea tostartinvestigatingatahighlevel.) industry andsowithseveraldifferent areas toexamine,itisusuallyagood (The interviewerwillnotbeexpectingyoutohaveanyspecificknowledgeofan into it. communications industry?I’dliketobetterunderstandwhereourclientfits Interviewee: derstanding oftheindustryandalsocurrent leanphaseitisgoing through.) whether theclienthasresources tomakethetwomeet.You willneedsomeun- thing thatmighthavecommercial value,whatthemarketforitmight beand (This casehasseveralcomponentstoit.You needtoassessiftheclienthasany- how toextractthiscommercialvalue.Howwouldyouadviseyourclient? dependent ofspecificcontracts.Ifso,theclientwouldneedfurtheradviceon has developedtoseeifanyofthemcanbeputfurthercommercialbenefitin- The clienthasdecidedtoexaminethesatellitecommunicationstechnologiesit as awholeisgoingthroughleanphase. However, newcontractshavedriedupoverthelast12months,asindustry large multinationalsandgenerallyhasaverygoodreputationintheindustry. has developedalotofcutting-edgetechnologyaspartitsworkwiththese that establishsatellitecommunicationssystemsinvariouscountries. The client the pastdecadethroughworksubcontractedtoitbyglobalengineeringfirms in thesatellitecommunicationsindustry. The client’s businesshasgrownover Your clientisahigh-techengineeringfirmthatprovidesservices Satellite communicationsnetworkshavethreetofourmajor compo- Could youbeginbygivingmesomebackgroundonthesatellite So woulditbecorrecttosaythat allthetechnologiesthat Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 149 Customized for: Jessica ([email protected]) 150 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews the rightstotechnologiesit hasdevelopedinthisrespect? those technologiesitownsorcan gettherightsto.Doweknowstatusof to firstassesswhoownstherights tothem. The clientwill onlybeabletouse Interviewee: Ifthetechnologiesweredeveloped aspartofcontracts,weneed respect tothis.) veloped for. It’s definitelyworthexploringtounderstandwhatthe statusiswith it ownstherightstoorthatcangainfrom whomeveritwasde- elsewhere aswell.Theclientwillonlybeabletocommercialize technologies stated inthecontract.Thisisnotspecifictotechnologyindustries andapplies erty rightsforsuchtechnologywilldependonwhathasbeen agreed toand issues surrounding whoownsthework.Inotherwords, theintellectualprop- (Anything developedspecificallyaspartofacontractforcustomer mayhave any waygoingforward? tract andforthespecificclient.Doyouthinkthiswillaffect thecompanyin Firm: receives acontract? eral years.Sofar, hasitbeenprovidingthissoftwaretoitscustomerswhen product consistsofpiecessoftwarethatithasdevelopedoverthelastsev- Interviewee: Firm: it canbringtothemarketinaprofitableway. develop anassessmentofwhethertheclienthasacompetitiveproductoffering nels, marketing,pricing,competitorofferings andsoon. All ofthiswillhelp ket. Iwouldneedtounderstandthemarketitself—aspectsofitlikesaleschan- them, or, inotherwords,whatwouldberequiredtobringtheproductmar- tential customers,I’dliketoknowwhatisinvolvedinbringingthisproduct fected bythecurrentleanphase. After understandingtheproductanditspo- the satellitecommunicationsindustryand,ifthisiscase,howtheyareaf- tomers are.I’dliketounderstandifthesecustomersareallgoingbefrom to understandwhattheclient’s product mightbeandwhothepotentialcus- Interviewee: about thebestwaytodothis.) should trytostructure yourworktomoveforward. Take afewminutestothink (You nowknowalittleabouttheindustryandwhere theclientfitsin.You whole system. pieces ofhardwareworktogethertotransmitcommunicationdataaroundthe Firm: No. The softwarehasalmostalwaysbeendevelopedaspartofthecon- Yes, that’s correct. The clientwritesthesoftwarethatmakesdifferent That soundsreasonable. Where wouldyouliketobegin? LIBRARY CAREER I wouldliketousethefollowingstructuregoingforward.need I’d liketostartwiththeproductitself. To reiterate,theclient’s © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. path thatcouldpotentially workorisatleastworth exploring.Unlessyouare ex- (A positiveresponse from theinterviewerwilltellyouthatare followinga ware, therebyincreasingthepotential numberofcustomers. vendor wantingitsequipmentto be abletocommunicatewithothervendors’ hard- tomer basefromconsistingofonly themajorengineeringfirmstoanyhardware compared toapackageforentiresystems. This wouldalsorefocustheclient’s cus- components thatcanbesoldtodifferent hardwarecompaniesatalowerprice to itscustomers.Forexample,perhapsthesoftwarecanbebroken intodifferent wondering iftheclient’s productcanbeoffered inadifferent formatatalowercost same customersitwouldapproachunderanynewbusinessmodel. However, Iam dustry slowdownthatisforcingourclienttore-examineitsproduct affects the Interviewee: TheissuethatIamseeingasapotentialroadblockisthein- fully understandswhatyouare suggesting.) try todescribeyourapproach inmore thanjustonelinesothattheinterviewer rent conditions.There canbedifferent waysofapproaching this.You should for theclienttorepackage itsofferinginamannerthatisdifferent from cur- by itscurrent leanphase.You needtobecreative here tosee ifthere isaway (If allpotentialcustomersbelongtothisindustry, itislikelymostare affected Firm: you inadifferent direction.) and asktheinterviewerifheorsheagrees withit.Ifnot,heorshe may point ward. Itisimportant,however, tostatewhenyouare makinganassumption (You willneedtomakeassumptionsasyoumovethrough thecasetopushfor- whom theclientgenerallycontracts.Isthisacorrectassumption? is largely fromthesatellitecommunicationsindustry, orthesamecompanieswith point myassumptionisthatgiventhisveryspecializedwork,thecustomerbase Interviewee: Thenextstepistounderstandwhothecustomersmightbe. At this ceed? to, forexample,a Windows CDinacomputerstore.Howwouldyou nextpro- technologies andcanessentiallybundlethemintoasoftwarepackagesimilar Firm: may needformallegaladvicetodothis. about theintellectualpropertyrights,anddecideonacase-by-casebasis. We need toreviewthecontractunderwhichitwasdevelopedseewhatstates Interviewee: be examined.Howwouldyouproposedoingthis? Firm: That’s agoodpointyouraiseanditwillbesomethingthathaveto That’s correct. Assume fornowthattheclienthasrightstosomeof Yes, that’s correct. For eachpieceofsoftwarethattheclientisexamining,wewould Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 151 Customized for: Jessica ([email protected]) 152 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews explore forlaunchingsuchaproduct? introducing theproducttomarket. What channelswouldyou suggesttheclient Firm: (It’s goodtoleave thedooropenforanythingthatyoumaythinkoflater.) product, butmayneedtolookatotherthingsaswellwemove ahead. tially lookatcompetitorofferings, pricingstrategiesandchannelstoplacethe market, andiftheclienthasnecessaryresourcestodoso.Iwould liketoini- of themarkettoassesswhatclientneedsdobringsuch an offering tothe ket forthisproductduetoitslowercost.Iwouldnextlikeunderstand details together anddespitetheoverallindustrygoingthroughaleanphase thereisamar- Interviewee: doing thisandwhy. to drasticallydeviatefrom it,that’s OK,butlettheinterviewer knowyouare back ofhisorhermindandwillwanttoseethatyouare usingit—if youneed are. Theinterviewerhasmore thanlikelykeptthestructure youproposed inthe (Do amentalrecap oftheanalysisstructure youproposed toseewhere you this worthwhile,whatwouldyouadvisethemtodonext? end processmightlooklike. Assuming thereisabigenoughmarkettomake early stageitisjusttryingtogetahigh-levelunderstandingofwhattheend-to- know whetheranysuchbreakdownofitssoftwareisevenpossible. At this Firm: market sizingestimate.Dowehaveanyinformationrelevanttothis? to companiesthatarepotentialcustomers. This willhelpdevelopsomesortof ploring thiswouldbetomatchpiecesofsoftwarethatcansoldindependently that anydecisionsmadearenotjustbasedongutfeeling.Mynextstepinex- Interviewee: you canhandlethenumbersinvolvedifrequired.) dation. Your interviewermayornotrequire it,butyouneedtoshowthat fits involvedanditisimportanttoinvestigatethemaspartofanyrecommen- (Any businessdecisionhingesinlarge partonquantifyingthecosts and bene- How wouldyouexplorethisfurther? and youarecorrect,itwouldpotentiallybroadenyourcustomerbaseaswell. still receptivetolowercostpiecesofasystemratherthanfull-blownnetwork Firm: should suggesttheinterviewerwantsyoutoconsideradifferent approach.) ceptionally sure oftheideayouhavebrought up,aneutraltonegativeresponse The clienthasnotworkedthroughanynumbersasyet,sinceitdoes Let’s ignorepricingandcompetitorsfornowfocusonchannels for That’s aninterestingsuggestion.Itisquitepossiblethatthemarket LIBRARY CAREER So farwehavedeterminedthereisaproductthecompanycanput It wouldbeimportanttoquantifythisasapotentialopportunityso © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. the courseofinterview)torefine youranalysisandrecommendations. then honeintousecaseandindustry specificfacts(whichareuncoveredduring situation thebusinessdecisionsandstructuredthinkingthatneed to beapplied,and edge aboutit. What theywill expectisforyoutobeableabstractoutofthe ity withtheindustry, asinterviewerswillnotexpectyoutohavespecificknowl- revenue potential.Donotbecomenervousorconcernedabout your unfamiliar- a marketsizing-relatedcase,whereyoumightneedtocalculate suchthingsas it tothemarketatlowercost,interviewercouldhavechosen tomakethisinto ple, whenproposingtobreakuptheproductoffering intosmallerpiecesandoffer The casecouldhavebecomefarmorequantitativeatseveralpoints. Forexam- if notalltheimportantareasthatcouldinfluencesuchadecision. This highlightstheneedforagoodinitialstructuretobesureyoucovermost and usedecisionsabouteachofthemasbuildingblocksfortheoverallissue. would beincompleteifyoudidnotconsiderthesecomponentsindividually channels couldbeusedtobringtheproductmarketandsoon. The analysis ness modelunderconsideration,ifthereisareasonablemarketforit,what For exampleyouhavetodecideifthereisanyproductsupportthenewbusi- develop thecasebymovingthroughdecisionsonseveralsmallercomponents. of repackaginganexistingproductandlaunchingitafreshinthemarket. You This caserequiresyoutogothroughthestepsofthinkingaboutpossibility Case analysis Firm: more one-on-oneinteractionandsalespitches. eral companiesaswelldirectmailersandaroadshowtothemajorfirmsfor media; industrytradefairswheretheclient’s representativescanspeaktosev- dustry. Suchchannelscouldincludetrademagazinesandjournalsintheprint focus onchannelsthatarenarrowbutrelevantforcompaniesinthisspecificin- I wouldhypothesizetheydonotneedamasscampaign.Rathershould Interviewee: Giventhattheclientistargeting averyspecificcustomerbase, propriate andhavesuitableexamplesforeachofthem.) audio-visual, electronic, etc.)inmind.Thinkaboutwhichonesmightbeap- about itinastructured manneristokeepdifferent kindsofmediatypes(print, the clientwillbelaunchingtoanarrow rangeofcustomers.Onewaytothink (Here isanotheropportunitytoshowsomecreativity. Rememberthoughthat I thinkthat’s reasonable. Thank you. Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 153 Customized for: Jessica ([email protected]) 154 Specialty KitchenwareBrandCase Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews analyses andqualitative evaluations) Breakdown ofsolution (includingquantitative consultant. strate hisorhercreativityinfindingdata,whichisalwaysahelpful skillfora There isone“brainstorming”exercise,inwhichaninterviewee candemon- buy forthefirm. this isaPEfirm—ifthenumbersarenotachievablequickly, it’s notagood Numbers reallydrivetheanswer, andthe interviewee needstorememberthat specific case—whichiseasilyanalyzedwithaquickmarket-sizing exercise. This isathreeCscase—withthe“company”and“customer” tailoredtothis Suggested high-leveloverviewofsolution Not muchisknownaboutthespecialtykitchenwaremarketinU.S. There • In orderforthePEclienttopurchaserights,itneedsbeablegrow rev- • The clientisatypicalprivateequity(PE)firm.Itusuallymakesinvestments • Additional informationprovidedduringquestioning is agoodidea.Howwouldyoustructureourresponse? sold intheU.S. The clienthashiredourfirmtoadviseonwhetherornotthis tion rightsis$10million. The kitchenwarebrandupforsaleisnotcurrently a brandofEuropeanspecialtykitchenware. The askingpriceforthedistribu- A privateequityfirmclientisconsideringbuyingtheU.S.distributionrightsto is aprivateequityfirm,andithas hiredustohelpitdecidewhetherbuythe Interviewee: priced at$40to$500apiece. for saleconsistsofcookware,ceramics,pots,pansandspecialtyutensils are noanalystreportsonthemarket,itstrendsorgrowthrates. The brandup enue forthebrandto$50millioninfiveyears. and that’s oneofthereasonswhyit hashiredus. have anyotherholdingsinthekitchenwaremark—thisisanewmarketforit, makes investmentsofnomorethan$10milliondollars. The clientdoesnot for nomorethanfiveyears.ItisaN.Y.-based firm. The clienttypically LIBRARY CAREER So, letmejustmakesurethatI understandthecase: The client © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. BRAND/PRODUCT COMPETITION CONSUMERS/ RETAILERS those asfollows: petition inthekitchenwaremarket.Idividedkeyquestionsformyanalysis cialty kitchenware,andoverallkitchenwaremarketintheU.S.,3)com- on buyingtheserights:1)theproductline/brand,2)consumers/retailersinspe- Interviewee: (Few minutesgoby…) Firm: thoughts? Interviewee: it hiredus. kitchenware market—thisisanewmarketforit,andthat’s oneofthereasonswhy than $10milliondollars. The clientfirmdoesnothaveanyotherholdingsinthe years. ItisaN.Y.-based firm. The clienttypicallymakesinvestmentsofnomore typical privateequityfirm.Itusuallymakesinvestmentsfornomorethanfive Firm: bringing EuropeanbrandstotheU.S.,orinkitchenware? Interviewee: Firm: million. Isthatcorrect? U.S. distributionrightstoaspecialtykitchenwareline. The askingpriceis$10 LINE Those aregoodquestions. The answeristhatitdoesnot. The clientisa Not atall. Take yourtime. Yes. That’s right. I havethreemaintopicsthatI’dliketoanalyzemakeadecision Before Icollectmythoughts,doesthePEfirmspecializein Great. DoyoumindifItakeafewminutestocollectmy Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting • How manyconsumersarethereforthissortof • Is thecompetitionlikelytoincreaseordecrease • • Howmuchcompetitionisthere inthemarket? How manyretailersarethereforthisproductline? • • Howmuchareconsumerswillingtopayfor • What’s thebrandawarenessinU.S.right What istheproduct offeringthatwe’rebuying? • U.S.? product? Istheconsumerbasegrowingin in thenearfuture? How muchdotheyneedit? this product? now? would itbeinthemarket? What’s itspricerange?Howdifferentiated — within- LIBRARY CAREER Sample Cases 155 Customized for: Jessica ([email protected]) 156 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews U.S., andinterviewsorsurveyswithcookwareconsumersin the U.S. ers intheU.S.,analystandannualreportsoncookwaremanufacturers Sonoma, Crate&Barrel,etc.),analystandannualreportsoncookwareretail- to high-endkitchenwareinkeyretailers(likeBed,BathandBeyond, Williams- is consideringbuyingtherightsfrom,primaryresearchonshelfspacedevoted data onthebrandandproductlineinEuropefromcompanythatclient ware marketintheU.S.,tradejournalsonkitchenware,consumerand exist forthismarket,Icanthinkofusinglitsearchesonthespecialtykitchen- questions. Otherthananalystreports,whichyou’vealreadysaiddon’t really Interviewee: mation thattheintervieweealready outlined.) more exhaustivelist,includedbelow, isdividedupbythekeybucketsofinfor- to fourways/datasources thattheymightlooktofindoutaboutthe market. A (This isthebrainstormingexercise. An intervieweeshouldcomeupwiththree the marketandtoanswersomeofkeyquestionsthatyou’vedefined? me tomynextquestion: What kindofresearchwouldyoudotofindoutabout Firm: Do weknowmuchaboutconsumersorthecompetitioninmarket? Interviewee: are greatontheproduct;so,that’s whytheclientisinterestedinit. cialty utensilspricedat$40to$500apiece—quiteexpensive.Butthemargins rates. The brandupforsaleconsistsofcookware,ceramics,pots,pansandspe- market intheU.S. There arenoanalystreportsonthemarket,itstrendsorgrowth have somenot-so-greatnews:Notmuchisknownaboutthespecialtykitchenware Firm: That’s agreatwaytostart.Intermsofyourquestionsaboutthemarket,I Not really—that’s abigpartofwhy theclienthiredus. And thatbrings LIBRARY CAREER I canthinkofseveraldatasourcesthatmightanswersomemy That answersalotofmyquestionsaboutthebrand/productline. © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. BRAND/PRODUCT CONSUMERS/ COMPETITION RETAILERS but checkinwiththeinterviewer onwhetherthoseassumptionsare reasonable.) size. Themainpieceofadviceis thattheintervieweeshouldmakeassumptions, sumptions thatare reasonable inorder togeta “back oftheenvelope”market case interviews.Otherthanthat, anintervieweeshouldfeelfree tomakeas- 100 millionhouseholdsintheU.S.—those are considered commonknowledgefor the U.S.hasapopulationof275to300millionandthatthere are approximately would bereasonable. An intervieweeshoulddefinitelyknowtheassumptionsthat (The followingmarketsizingisillustrativebutnottheonly sizingthat Firm: brand couldgetinfiveyears. kitchenware marketandestimatehowmuchofthat I thinkthisnew Interviewee: decide ifit’s agoodideatobuytherights? enue forthebrandto$50millioninfiveyears.Knowingthat,howwouldyou order forthePEclienttopurchaserights,itneedsbeablegrowrev- Firm: interview.) ally, abrainstormedlistliketheoneaboveisfineforanexercise likethisinacase (The followingisamore detailedandcompartmentalizedlistoftheabove,butre- LINE That’s right. What wouldyousizethemarketat? That’s great,andareallygoodlist ofpotentialdatasources.Now, in Well, Iwouldneedto know thesizeofcurrentspecialty Vault CaseInterviewPracticeGuide2:MoreInterviews • Shelf-space analysisincookwareretailers • Trade journalsoncookware/kitchenware • Analyst andannualreportsoncookwaremanufac- Lit searchesoncookwaremanufacturersintheU.S. • Annual reports/analystreportsoncookwareretailers • • Interviews/surveys withconsumersintheU.S. • Consumer dataonbrandconsumersinEurope Primary researchin/visitstocookwareretailers(C&B, • • Productline/brandinfofromcompanyinEurope • Tradejournalsoncooking,cookware,kitchenware Lit searchoncookwarebrands/productsintheU.S. • Litsearchonbrand/productlineinEurope • www.vault.com/consulting turers intheU.S. in theU.S. allocations Williams-Sonoma, BB&B)tomeasureshelfspace — within- LIBRARY CAREER Sample Cases 157 Customized for: Jessica ([email protected]) 158 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews five years. That’s onlya5percent marketshareinfiveyears,whichseems consider buyingtherightsifitcould achievearevenueof$50millioninthefirst Interviewee: back tothequestionofcase: Shouldtheclientbuyrights? grow themarketaswellitsshareifitmakesthisinvestment. Now, getting Firm: Thatseemsreasonable—maybeabithigh,butourclientishoping to ket sizeof$1.08billion. households. Ifyoumultiplythoseout,getatotalspecialty cookwaremar- servative inmymarketsizing.So,that’s $270spenteachyearbyfourmillion a householdpurchasingeachyearbuysonlyoneproduct,just tobeabitcon- Interviewee: Firm: rest ofthespecialtycookwaremarket? line rangedfrom$40to$500/product—canIassumethatthat’s similartothe Interviewee: Now, ifIremembercorrectly, yousaidthattheproductsin Firm: in anygivenyear, onlyaboutfourmillionhouseholdsarepurchasing. probably onlymakeaspecialtycookwarepurchaseonceeveryfiveyears.So, Interviewee: Yes, so,I’mgoingtoassumethatthose20millionhouseholds Firm: cialty kitchenwareisprobablyafairlydurablegood… holds thatwe’reconcernedwith.Now, I’mgoingtoassumethatsincespe- Interviewee: we’re hopingtogrowthemarket,whydon’t weuse20percent? Firm: consumers thatweshouldbeinterestedin.Isfair? market. Let’s assumethatonlyabout 10percentofhouseholdswouldbethe ware market,mostarenotconsumersofthespecialtyorhigh-endkitchenware Let’s assumethatwhilemostallof thosehouseholdsareconsumersofthecook- Interviewee: Firm: sumers. to sizethemarketintermsofhouseholds,insteadindividualcon- Interviewee: Yes, itis—forthepricesthatthesespatulassellfor! That’s agoodassumption. That seemslikeagoodidea. Sure. Yeah, that’s aboutright—it’s alittlebiggerthanthat,andIthinkthat LIBRARY CAREER I knowthattheU.S.hasapproximately100millionhouseholds. Well, ifIremembercorrectly, yousaidthattheclientwouldonly Because kitchenwareispurchasedonahouseholdbasis,I’dlike The middleofthatrangeis$270,andI’mgoingtoassume Great—20 percentthen;so,thereareabout20millionhouse- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat Telecom Equipment/ServicesProviderCase sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. • The client hastraditionallygotten80percentofitsrevenuefromitstelecom The globaltelecomindustrysurged inthe1990s,butrecentyears,duetoa • The clientservesprimarilybusinesscustomers,likelarge globalcorporations • The clientisaglobaltelecomequipment/servicesprovider.• Itisbasedinthe Additional informationprovidedduringquestioning How wouldyoustructureourresponse? years. Ithashiredustofindoutwhyandhelpitturnarounditsprofitability. A large telecomequipmentproviderhasseenitsprofitabilitydeclineinrecent Firm: in theU.S. client’s goalsdoseemachievableand itshouldpurchasetherightstobrand Interviewee: ware marketintheU.S.withinfiveyears. it workswithandbelievesthatcouldget5percentofthespecialtykitchen- Firm: brands? doable butaggressive.DoesthePEclienthaveanyexpertiseinmarketingnew tenance andservicesbusiness. equipment manufacturingbusinessand20percentfromitsinstallation/main- pliers werehithardbythisturninthemarket. ment droppedquickly. All traditionalglobaltelecommanufacturersandsup- tremendous supplyinglobaltelecomcapacity, demandfortelecomequip- are quiteprevalent. small office/home office productlinesandoperationsinmarketswherethose started toservehomeoffices forglobalbusinesscustomersanddeveloped that needtheirownglobalnetworks,dedicatedlines,etc.However, ithas U.S., butitservesaglobalcustomergroup. Actually, itdoes. The PEfirmhasareallygreatmarketingcompanythat That’s great. We’re done. Well, ifthat’s thecase,thenevenifmymarketsizingisoff, the Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 159 Customized for: Jessica ([email protected]) 160 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews there areanymajorchangesthere. changed. Or, wecouldrundowntheitems oftheincomestatementtoseeif fixed costsofthecompanyhavechanged,orwhethervariable costshave of howmuchwesellhaschanged. Within costs,youcanlookatwhetherthe look atwhetherthepriceofouroffering haschanged,orwhetherthevolume two leversofprofitabilityarerevenueandcosts. Within revenue,youwantto Interviewee: (Few minutesgoby…) minutes ifyouneedthem. Firm: ure outhowtoturnthataround? seen itsprofitabilitydeclineinrecentyears,andithashiredustohelpthemfig- Our clientisalarge telecomequipmentmanufacturerandproviderthathas Interviewee: analyses andqualitativeevaluations) Breakdown ofsolution(includingquantitative way togetattheanswer. several frameworkstostructuretheproblemandgenerateideasisreally ideas—no matterhowfrustratingthatgets—inordertogetananswer. Using The intervieweereallyhastousehisorherimaginationkeepgenerating This isnotaquantitativecase. There’s alsonotalotofinformationinthiscase. this situation. terviewer bringsitupheretoseehowadepttheintervieweeisatapplyingin tools usedinthiscase.Consultantsfrequentlyusewithclients;so,thein- probably thesimplest.Hypothesisgenerationandtestingisoneofother answer tothecase.Bothframeworksarelaidout,thoughusingthreeCsis Porter’s FiveForcesorthethreeCsisreallyonlywaytodriveactual ture intermsofthetwoleversprofitability, anindustryanalysisusing While thisisaprofitabilitycase,andtheintervieweeshouldlayoutstruc- Suggested high-leveloverviewofsolution Yes. That’s right.Howwouldyouapproachthatproblem? Take afew LIBRARY CAREER Let mejustmakesurethatIunderstandthecasesetupcorrectly. Well, thisseemslikea standardprofitabilitycasetome. The © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. PROFITABILITY namics/setting. 2) customersatisfaction,3)competitive landscape,and4)overallmarketdy- by dividingmyanalysisintofour mainbuckets:1)company/productchanges, derstand whytheclient’s volumeisdeclining.Itendtoapproach thesethings Interviewee: (Few minutesgoby…) Firm: Interviewee: CanIhaveafewminutestocollectmythoughts? declined fortheclient? Firm: assume thatvolumehasdecreased. creased. Iimaginethattheclientwouldknowifpricehaddecreased;so,I’ll Interviewee: pened ontherevenueside. Where doesthattakeyourthinking? nothing haschangedonthecostsside.So,changeshavedefinitelyhap- Firm: (Below isthewaytolayoutthisstructure.) That’s right.So,howwouldyouevaluatelookingintowhyvolumehas That’s right.Now, Icantellyoufromtheclient’s ownknowledgethat Of course.Justletmeknowwhenyou’reready. Well, theneitherthevolumehasdecreasedorpricede- Well, youwouldneed todosomesortofindustryanalysisun- Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting REVENUE COSTS — within- • Volume • Price • Items onincome • Variablecosts • Fixedcosts statement LIBRARY CAREER Sample Cases 161 Customized for: Jessica ([email protected]) 162 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews MARKET SETTING/ COMPETITORS CUSTOMERS COMPANY DYNAMICS example ofanotherapproach thatanintervieweecouldtake.) Forces are notusedthroughout therest ofthecasebutare shownhere asan an approach usingPorter’s FiveForces framework(onpage163).TheFive (Below isanillustrationofthisapproach usingtheframeworkdescribed,and LIBRARY CAREER market, orkeepupwiththecompetition? Has ourcompanyfailedtoinnovateinthe business? services insomewaythathasmadeuslose Has ourcompanychangeditsproductsor shrinking? Is themarketfortelecomequipmentgrowingor competitors predictableorunexpected? Has competitionincreasedrecently?Arenew Who isourcompetition? pursue? Are therenewcustomersthatweshouldgo Have customersstartedspendingless? Have thecustomersdecreased? untapped? markets lefttoenter/expandintothatareasyet Is thisalocalorglobalmarket?Aretherenew • Different productoffering? • Have therebeen market-changingevents/ • What’s beentherecenttrend? • Are therenumerouscompetitors?Orhave • Havewestoppedservingacustomerneed • Havecustomersgoneelsewhere? product composition? inventions recently? the long-termtrend? market sharesremainedfairlystable? © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. THREAT OFNEW COMPLEMENTS BUYER POWER SUBSTITUTES/ (A fewminutesgoby…) Firm: Interviewee: be goingonhereinthosefourbuckets? stead ofjustaskingquestions,doyouhaveanyhypothesesabout whatmight Firm: ENTRANTS SUPPLIER RIVALRY POWER That’s great. You’ve broughtupalotofquestionsforanalysis.Butin- Of course. Sure. CanItakeafewminutes justtowritethemout? Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting • Government regulation? • Government technology? • Patented • Are thereanybarrierstoentry? • Arenewentrantslikely?Havetherealreadybeen • Are suppliersverticallyintegrating,increas- • Are keysuppliersworkingmoreintandem • Have thesuppliersincreasedordecreased? • Have suppliersincreasedinpower? • Are therecomplementstoourproductcategory • Are theresubstitutestoourproductthatnow • Has competitionincreased? • Are marketshareschangingbecauseofin- • Has rivalryincreasedinthemarket? • Has therebeengovernmentinterventiontoin- Has negotiatingpoweronthebuyersiderecently • • Is thenumberofbuyersgrowingorshrinking? • How manybuyersarethereinthemarket? • Are thenumberofbuyersconcentrated,ordif- new entrants? increasing rivalry? that couldstabilizeourshare,orare creased rivalry? crease buyingpower? increased forsomereason? fused? exist inthemarket? ing competitionintheindustry? with ourcompetitionthanus? — within- LIBRARY CAREER Sample Cases 163 Customized for: Jessica ([email protected]) 164 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews MARKET SETTING/ COMPETITORS CUSTOMERS DYNAMICS COMPANY the followinglist: Interviewee: utes, orbrainstormoutloud—whateveryou’remorecomfortable with. look attoproveordisproveeachofthosehypotheses? Take acoupleofmin- and getattheclient’s problem,canyoutellmewhatdatasourcesmight Firm: That’s aprettycomprehensivelist.Now, beforewediveintothatlist Interviewee: Well, Ihaveseveral. They are… LIBRARY CAREER Sure, letmecollectmythoughtsforaminute…OK,soIhave • Hypothesis: Ourcustomershavestartedtospend • • Hypothesis: Therearefewercustomersbecause • Hypothesis: Thetelecomequipmentmarkethas • Hypothesis: The telecomequipmentmarketis • Hypothesis: The telecomequipmentmarketis Hypothesis: Unexpectedcompetitionhasentered • • Hypothesis: Competitionhasincreased,frag- • Hypothesis: Competitionhasincreased,driving • Hypothesis: Thecompanyhasfailedtoinnovate • • Hypothesis: Thecompanyhaschangedits less onourcategory. tion. our typicalcustomershavegonetothecompeti- foreseen marketforce. slowed, duetoarecessionorsomeotherun- growing, butnotinthemarketsthatwearein. shrinking. gory/product line. our marketwithnewsubstitutesforcate- menting themarket. prices down. to keepupwiththecompetition needs. product offeringandnolongermeetscustomers’ © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. MARKET SETING/ COMPETITORS CUSTOMERS DYNAMICS COMPANY global business customers, anddevelopedsmall office/home office product lines networks, dedicatedlines,etc.However, ithasstartedtoservehomeoffices for rily businesscustomers,likelarge globalcorporationsthatneed theirownglobal based intheU.S.,butitservesa globalcustomergroup. The client servesprima- you abitmoreabouttheclient.It’s aglobaltelecomequipment/services provider and theclient’s offering isthesame asitscompetitorsinthemarket.Letmetell Firm: ing inthemarket. its productoffering tokeepup withthecompetitionorinnovationhappen- or service,whichhasledtoadecreaseinvolume,maybeit hasn’t changed Interviewee: start intacklingthisproblem? Firm: That’s agoodcoupleofhypotheses.Unfortunately, welookedabitatthat, That’s great.Now, backtoyourhypotheses. Where wouldyouliketo In termsofthecompany, maybeithaschangeditskeyproduct Vault CaseInterviewPracticeGuide2:MoreInterviews • Annualreportsofcompetition • Interviews/surveyswithcustomers • Interviewswithindustrythoughtleaders Lit searchesandanalystreportsonindustry/com- • • Annualreportsofcompetition Lit searchesandanalystreportsonindustry/com- • • Market sharesfromindustryreports • Number oftelecomequipmentmanufacturers www.vault.com/consulting • Company’smarketshare • Surveysofcustomersatisfaction • Company’s productofferingovertimevs.com- • Number ofcustomercompanies(hasthis • Tradejournalsforindustry • Litsearchesandanalystreportsforindustry • Customerannualreports • Customersurveys petition petition from anindustryboardortradepublication petition’s productofferingovertime grown, orshrunk?) — within- LIBRARY CAREER Sample Cases 165 Customized for: Jessica ([email protected]) 166 Sample Cases Vault CaseInterviewPracticeGuide2:MoreInterviews enue? ket intheconsumermarket. Any otherwaysthatitmightbeableto restoreitsrev- way thatitcouldmakeupforallof itslostrevenuefromthebusinesscustomermar- doing, and2)becauseofitsproduct lineandthesizeoftwomarkets,there’s no much valueforustojusttelltheclient tocontinuedoingsomethingthatitisalready that fortworeasons:1)it’s alreadygrowingitsconsumersegment; so, itdoesn’t add Firm: That’s agoodhunch. And yes,itcan.Butwedidn’t wanttojusttelltheclient offices. Canitgrowthatbusiness inanyway? ness customers,butthatitisstartingtosellitsproductsconsumers withhome of consumer. You mentionedthattheclienttypicallysolditsequipmenttobusi- Interviewee: Well, thefirstthingthat comestomindistargeting anewtype you suggestthatitgrowsitsrevenue? Firm: in profitability. that havecausedtheclient’s decline involume,declinessales,anddecline Interviewee: So,it’s mylastbucketthen—there aremarketwidedynamics hard bythisturninthemarket. quickly. All traditionalglobaltelecommanufacturersandsuppliers werehit supply inglobaltelecomcapacity, demandfortelecomequipmentdropped telecom industrysurged inthe1990s,butrecentyears,duetoatremendous the telecomequipmentcategory. You see,what we foundwasthattheglobal Firm: ness customersjustspendinglessontelecomequipmentthantheyusedto? away bystartingtoserveconsumers?Or, ifIgobacktomyhypotheses,areourbusi- sumers withhomeoffices. Havewesomehowdrivenournormalcustomerbase and thatwe’veprimarilyservedbusinesscustomers,butarestartingtoservecon- Interviewee: you wanttoexplore? was facingsimilarproblemstothoseofourclient. What otherhypothesesdo Firm: competition haslittletodowiththeclient’s problems. tutes inthemarketthathasdecreaseddemand.ButnowI’mthinking had enteredthemarket,takingcustomersawayfromus,orintroducingsubsti- problem here.Imean,oneofmyhypotheseshadbeenthatnewcompetition Interviewee: Actually, yes.Itakefromthat thatcompetitionisn’t reallythe any furtherinsight? and operationsinmarketswherethosearequiteprevalent.Doesthatgiveyou You’re right. We lookedthere,too. And itseemedthatthecompetition Now you’rereallygettingsomewhere.Customersarespendinglesson Yes. Butwhat doyousuggestforittofixtheproblem?How LIBRARY CAREER Well, youmentionedthatourclientservesaglobalcustomergroup, © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Firm: You’re right. That’s it. And that’s whatwerecommendedtotheclient. client couldusemoreservicingandmaintenanceofthatequipment? business customersmayhaveenoughcapacityandequipment,butmaybethe Interviewee: installation/maintenance andservicesbusiness. What doesthatmakeyouthink? enue fromitstelecomequipmentmanufacturingbusinessand20percent Firm: services doesitprovide? equipment manufacturerandservicesprovider. Wait, that’s it. What kindof Interviewee: telecom products,doestheclienthave? Firm: which Ihaven’t considered? customer market,istheresomethingelsethatit’s nowdoingthatitcouldgrow, Interviewee: years forittoseesubstantialrevenuefromthatinvestment. itability now, andchangingwhatitmanufacturesbringstomarketwilltake Firm: ufacture adifferent typeofproduct? Interviewee: player—most marketshavealreadybeentapped. Firm: type, isthereanewgeographicmarketthatitcouldenterforitsbusinesscustomers? Interviewee: Good question. The clienthastraditionallygotten80percentofitsrev- You’re ontherighttrack. What capabilities, otherthanmanufacturing That’s anothergoodthought,too. But itneedssolutionsforitsprof- That’s agoodthought,too.Butunfortunately, it’s alreadyaglobal Well, ifitcan’t justrestorerevenuebytargeting adifferent customer Well, ifitcan’t enteranewproductmarketandcan’t enteranew If Ireviewmynotes,believeyousaidthatit’s aglobaltelecom Can itstarttodosomethingthathasn’t donebefore,likeman- Is thereanywaythatitcangrowitsservicesbusiness?Imean, Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Sample Cases 167 Customized for: Jessica ([email protected]) GUIDE CAREER ANALYSIS CASE INTERVIEW FINAL PRACTICE GUIDE Customized for: Jessica ([email protected]) 170 LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) Final Analysis Visit theVaultConsulting CareerChannelat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. job! better preparedthanmost—andwithalittleluck,you’lldogreat andgetthe book, youwillhavedonemorethanmanyotherapplicants and probablybe keep thingsinperspective.Ifyoupracticeandworkthrough thecasesinthis Finally, itneverhurtstojustkeepyourfingerscrossed,havealittleluckand flight homefromtheclientsiteiscanceled. you’re theperfectconsultant:stillbeingsmartandpersonable evenwhenyour good-natured andhelpfulthroughitall,well,thenyoumayjustshowhow What youdohavecontroloverishowreacttoit:ifyou’reflexible,calm, view settingwhenyouinterview—butdon’t havemuchcontrolofthat! to standinandbeyourinterviewer. You maynothavethemostperfectinter- consultant whohasnevergivenacaseinterviewbeforeinhislifegetscalled case interviewergetscalledawaytoaclientmeetingatthelastminute,and giving theprescribedcaseandstartabrainteaserinstead. A seasoned terviewers gettiredandcutthecaseshort.Caseinterviewersbored,stop kind ofcan’t preparefor, butshouldpreparefor, is theunexpected.Casein- of caseinterviewing,there’s onething tokeepinmind:theonethingthatyou Third, whileyoucanpracticeforyearsandbecomethemasterofeverystyle ing throughthisbookisanimportantsteptohelpingyoufigurethatout. wholly miserable,thenmaybeconsultingisn’t rightforyou—eitherway, work- you understandifwanttobeaconsultant.Iffindcaseinterviewing Second, practicingcasesandgoingtocaseinterviewswillinmanywayshelp likely muchbetteratthemwhentheywerepreparingforalloftheircaseinterviews. tell youthatthey’dprobablydohorriblyifgivenacaseinterviewtoday, buttheywere to surpassthehurdle.Practicemaynevermakeyouperfect—mostconsultantswill make youmorecomfortablewiththeskillset,betteratproblemsandable First, practicewillhelpyou.Likeanytest,assignmentorhurdle,practicing for yourcaseinterviews,butasyouwalkthroughthedoortointerview. In conclusion,thereareafewthingstokeepinmindnotonlyasyouprepare Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting — within- LIBRARY CAREER Final Analysis 171 BearingPoint | Accenture | |Gartner Consultants|McKinsey &Co.| OC&CStrategy |Deloitte Consulting Unisys | Wipro |ZS Associates |CorporateExecutive Board |Fair Isaac Consultants |IBM BCS |L.E.K. Consulting |Kurt Salmon Associates | Keane |Bain&Company |MonitorGroup |RolandBerger Strategy Associates | A.T. Kearney |BostonConsultingGroup |DiamondCluster agement Consulting| Towers Perrin |Booz Allen Hamilton|Hewitt ent |Cap GeminiErnst& Young |Mercer Man |IBMGlobalServices Co. | DeloitteConsultingBearingPoint | Accenture |Sapi |Gartner Executive Board |FairConsultants McKinsey & Isaac|OC&CStrategy Kurt Salmon Associates |Unisys Wipro |ZS Associates |Corporate Consultants|IBMBCSL.E.K.Roland Berger Strategy Consulting Group |DiamondCluster |Keane |Bain&Company |MonitorGroup Allen Hamilton|Hewitt Associates | A.T. Kearney |BostonConsulting |Mercer ManagementGlobal Services Consulting| Towers Perrin |Booz | Accenture |Sapient |Cap |Gartner GeminiErnst& Young |IBM Consultants|McKinsey &Co.egy |DeloitteConsultingBearingPoint | ZS Associates | CorporateExecutive Board |Fair Isaac|OC&CStrat | IBMBCSL.E.K. Consulting|Kurt Salmon Associates |Unisys | Wipro Bain &Company |MonitorGroup Consultants |RolandBerger Strategy A.T. Kearney |BostonConsultingGroup |DiamondClusterKeane Consulting | Towers Perrin |Booz Allen Hamilton|Hewitt Associates | Cap Gemini Ernst& Young |Mercer Management |IBMGlobalServices Deloitte Consulting|BearingPoint | Accenture |Sapient |Gartner tive Board |FairConsultantsMcKinsey &Co. Isaac|OC&CStrategy Salmon Associates |Unisys Wipro |ZS Associates |CorporateExecu Consultants| IBM BCS|L.E.K.Berger Strategy Consulting|Kurt | DiamondClusterKeane |Bain&Company |MonitorGroup |Roland Hamilton |Hewitt Associates | A.T. Kearney |BostonConsultingGroup |Mercer ManagementServices Consulting| Towers Perrin |Booz Allen Accenture |Sapient |Cap |Gartner GeminiErnst& Young |IBMGloba sultants |McKinsey &Co. |DeloitteConsultingBearingPoint | ciates |CorporateExecutive Board |FairCon Isaac|OC&CStrategy L.E.K. Consulting |Kurt Salmon Associates |Unisys Wipro |ZS Asso | MonitorGroup Consultants|IBMBCS |RolandBerger Strategy | BostonConsultingGroup |DiamondClusterKeane |Bain&Company Towers Perrin |Booz Allen Hamilton|Hewitt Associates | A.T. Kearney Ernst & Young |Mercer Management |IBMGlobalServices Consulting| Consulting |BearingPoint | Accenture |Sapient |Cap |Gartner Gemin Fair Consultants|McKinsey &Co. Isaac|OC&C Strategy |Deloitte sociates |Unisys Wipro |ZS Associates |CorporateExecutive Board Consultants|IBMBCSL.E.K.Strategy Consulting|Kurt Salmon As Cluster |Keane |Bain&Company |MonitorGroup |RolandBerger Hewitt Associates | A.T. Kearney |BostonConsultingGroup |Diamond cer Management Consulting| Towers Perrin |Booz Allen Hamilton ner |Sapient |Cap GeminiErnst& Young |Mer |IBMGlobalServices McKinsey &Co. | DeloitteConsulting|BearingPoint | Accenture |Gart

Customized for: Jessica ([email protected]) G www.vault.com/consulting For moreinformation goto E CEST L OF ALL TO ACCESS GET INN OSLIGCRE INFORMATION CAREER CONSULTING WINNING G ET terview Prep Guides, Consulting EmployerProfilesandCase In- 15% off Access to programs andlawschools Student andalumnisurveys Consulting SalaryCentral Insider consultingsalaryinformationwith including qualityoflifeandpracticearearankings Vault's exclusiveconsultingfirmrankings profiles Access to consulting firms,withinsiderinfoon Employee surveys O THE FOR O V AULT • Businessoutlook • Hiringprocessandinterviews • Salariesandcompensation • Companyculture G OLD all Vaultpurchases,including complete Vaultmessageboard archives 100+ extendedinsiderconsultingfirm M MESI AND EMBERSHIP V AULT for top ' AWARD S G - for 100softopMBA OLD ! , Vault's Customized for: Jessica ([email protected]) GUIDE CAREER- APPENDIX CASE INTERVIEW PRACTICE GUIDE Customized for: Jessica ([email protected]) 174 LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Visit theVaultConsulting CareerChannelat Brainteasers Sample Guesstimates/ Whatwill thepriceofagallonmilkbein10years? • Whatwill thepriceofacupStarbuckscoffee beinfiveyears? • Howmuch toyouthinkUniversalMusic’s sales willgrownextyear? • HowmuchdoyouthinkPfizer’s saleswillgrownextyear? • HowmuchdoyouthinkStarbucks’s saleswillgrownextyear? • Howmuchdoyouthink Wal-Mart’s saleswillgrownextyear? • HowmuchdoyouthinkHomeDepot’s saleswillgrownextyear? • Howmanycansofsouparesoldonthe U.S.permonthonaverage? • Howmanycansofcatfoodaresoldin theU.S.onaweeklybasis? • HowmanypetsarethereintheU.S.? How manydogs?cats? • HowmanynewcarsarepurchasedeachyearintheU.S.? • HowmanycarsarethereintheU.S.? • HowmanyiPodsarethereintheU.S.? • HowmanytelevisionsarethereintheU.S.? • HowmanycreditcardsarethereintheU.S.? • HowmanyK-12schoolteachersarethereintheU.S.? • HowmanyelementaryschooltextbooksareusedintheU.S.onadailybasis? • Howmanycupsofcoffee areconsumedintheU.S.onadailybasis?How • HowmanycellphonesarethereintheU.S.?residentiallandlines • HowmanymanholecoversarethereinManhattan? • HowmanytelephoneboothsarethereinManhattan? • at homevs.outsidethehome? many aresoldatStarbucksvs.Dunkin’ Donuts?Howmanyareconsumed are thereintheU.S.?Howmanybusinesslandlines www.vault.com/consulting. — within- LIBRARY CAREER 175 Customized for: Jessica ([email protected]) 176 Appendix Vault CaseInterviewPracticeGuide2:MoreInterviews AnnualGDP growthinU.S.:3to5percent • NumberofhouseholdsintheU.S.:100million(thiscouldrangefromto • PopulationoftheU.S.:300million(thiscouldrangefrom250tomillion, • Data pointstoknowforbrainteasers: 150 million,somakeyourassumptionclear) so makeyourassumptionclear) LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Visit theVaultConsulting CareerChannelat Interview Questions Sample Non-Case Tell me somethingaboutyourselfthat’s notonyourresume. • Whatareyoumostproudof? • Isthereanythingonyourresumethatwe haven’t talkedaboutthatyou’dlike • Wheredoyouseeyourselfinfiveto10 years? • Tell me aboutanyoneofyourpastjobsthatyouthinkshowshowyou’dbe • Tell meabouthowyouchosethecollegethatattended. What wasyour • Your resultsinjobXareveryimpressive.Howdoyouexplainthose? • You haveaone-yeargaponyourresume.Howdoyouexplainthat? • Xjobseemslikeastepdown. Why didyoudecidetotakethatjob? • WhydidyoudecidetotakeajobatCompanyX? • You seemtohavemovedaroundalot. Why haveyounotstayedatanyone • Your lasttwojobsareincompletelydifferent fields/functions—whyisthat? • Tell me more aboutyourroleatCompanyX.Howdidthatgrow/changeover • Follow-ups/other versions: it’s ledyoutobeheretoday Walk methroughyourresumeandexplainhow to talkabout? good atthisjob. process? What wasyourcriteriainselectingthatschool? much ofthatwasateameffort vs.anindividualeffort? job forverylong? What connectsthem? time? Why didyouleave? www.vault.com/consulting. — within- LIBRARY CAREER 177 Customized for: Jessica ([email protected]) 178 Appendix Vault CaseInterviewPracticeGuide2:MoreInterviews Describeyour creativeskills. • Tell meaboutatimethatyouapproached ananalyticalproblemcreatively? • Haveyou everfoundedaneworganization orteam? • Would youdescribeyourselfasanentrepreneur? • Whathaveyoudonethat’s innovative? • Whatdidyournewprocessachievethat couldn’t havebeenhadyoudoneit • Howdidyouconvinceothers thatthisnewwayofdoingthingswasgood/better? • Follow-ups/other versions: ently thanithadbeendonebefore Describe atimewhenyoudidsomethingdiffer- Describeasituationwhereyouhadtobepersuasive. • Whatwouldyoudodifferently today? What didyoulearnfromtheprocess? • Was youropinionswayedbyanyoneelse’s overthecourseofprocess? • Whatwasyourplangoingin?Howdidthatchangeovertime? Why did • Follow-ups/other versions: the opinionofagroup Tell meaboutatimewhereyouhadtochange Whatisthebiggestchallengeyou’vehadtoovercome?Howdidyourise • Whatwouldyourfriendssaywerestrengthsandweaknesses? • Whatwouldyourlastboss/teamsaywerestrengthsandweaknesses? • Tell meaboutatimethatyoufailed. • Follow-ups/other versions: nesses? What areyourstrengths?weak- the oldway? it change? the occasion? LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Visit theVaultConsulting CareerChannelat Areyoua leader, ateamplayerorcreativetype? What aresomeexamples • IfIwerea studentatyourschool,whywouldIwantyouonmyteam? • Whatwould youspecificallybringtomycompany/team? • Whatonethingmakesyoudifferent fromalltheothercandidatesheretoday? • Follow-ups/other versions: Why shouldIhireyou? Describeasituationwhereyoufacedan ethicaldilemma.Howdidyouhan- • Tell me aboutatimethatyouhadtomanageriskandhowdealtwithit. • Describeatimewhenyoutookcalculatedrisk.Howdiditturnout? Would • Givemeanexampleofashortcutthatyoutooktogetsomethingdone. • Follow-ups/other versions: How doyoumanagerisk? Describeasettinginwhichyouusedyourleadershipskills. • Howdoyoufosterteamwork? • Tell meaboutatimethatyouhadtomanageteam/groupofpeople. • Tell meaboutatimethatyouhadtomanageconflictatwork.Howdid • Tell meaboutatimewhenyoudidn’t agreewiththedirection/leadershipof • Tell meaboutatimethatyouhadtoworkincross-functionalteam. • Follow-ups/other versions: a team Tell meaboutatimewhenyouworkedaspartof that demonstrate that? All theotherpeopleatyourschool? dle it?Isthereanythingyouwouldhavedonedifferently? you doitagain? the process? handle it? What wouldyouhavedonedifferently? What didyoulearnduring What didyoulearnduringtheprocess? the team.Howdidyouhandleit? What wouldyouhavedonedifferently? Vault CaseInterviewPracticeGuide2:MoreInterviews www.vault.com/consulting. — within- LIBRARY CAREER Appendix 179 Customized for: Jessica ([email protected]) 180 Appendix Vault CaseInterviewPracticeGuide2:MoreInterviews Whyconsulting/strategicplanning/corporateorbusinessdevelopment? • Whatdoyouseeasthemostimportantissuesthisorganization willaddress • Whatotherfirmsareyoulookingat? • Ifyoudon’t endupworkinghere,wherewillyougo? • When/howdidyoufirsthearaboutus? • Whohaveyoutalkedto/metwithsofaratthefirm? • Howdoyouthinkwillfitintothe culturehere?Howwouldyoude- • Whatcriteriaareyouusingtoevaluatethefirmsthatyou’relookingat? • Whynotoneofourcompetitors?Howarewedifferent? Why areyoumost • Follow-ups/other versions: Why thiscompany/firm? Howwouldyoudescribeyourself? • in thenextfiveyears? scribe theculturehere? suited to/interestedinus? LIBRARY CAREER © 2008Vault.com Inc. Customized for: Jessica ([email protected]) • Engage theinterviewanddrivecaseforward.Getintodriver’sseat sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Visit theVaultConsulting CareerChannelat Case Interview Having theCorrectMindsetisKeytoAcing intelligent, structureddiscussion andengagingthepartners/seniorpartners. how youcrunchthenumbers orcrosstheTsanddotIs.Focusonhavingan Checklist Acing theCase: ation—give himorherthechancetoguideyou,too. the caseisalsoanalyzingwhatitwouldbeliketoworkwithyouinateamsitu- ask therightquestions,fordata,andshareinsights.Thepersongivingyou Think likeaCEOor Think likeyouare consultant onthe approach tothe Customize your interviewers actually the a Partner case whether youcanthinklikeapartner orCEOratherthan viewers. Aseniorpartnermaybemoreinterestedin • Forthesecond/finalrounds,besensitivetointer- 25 minutes.Conclusion:oneminute. questions, onetotwominutes.Drivingsolution:20 timing is:developingframework/logictreewithclarifying focused andproveyoucandothemath.Thestandard • Forthefirstrounds,youmayhavetobemoredetail- Comeequippedwiththe10differentframeworksyou • • Try totakeastepbackwhendevelopingandforming • onto acaseisclearpathtobeingdinged. fashion (i.e.,logictree).Tryingtoforceaframework comprehensively exhaustive)way,andinanatural lem. TrytobucketideasinaMECE(mutuallyexclusive and thinkabouthowyouwillactuallysolvetheprob- problem asifyouaretheconsultantorclientinvolved, have practicedandmemorized.Reallylistentothe swering thecasequestionitself. back mentallyandmakesureyouareactuallyan- CEO orownerofthebusiness?Alwaystakeastep too detail-oriented?Areyouthinkinglikeapartner, actually covereverythingthatisimportant?Areyou a frameworktoproceedwiththecase.Shouldyou www.vault.com/consulting. — within- LIBRARY CAREER 181 Customized for: Jessica ([email protected]) 182 Success Proper FrameworkDevelopmentisCriticalfor Appendix Vault CaseInterviewPracticeGuide2:MoreInterviews Assess whetheryou Refer backtoyour are havingfun Prioritize your Answer the framework framework question LIBRARY CAREER • • The caseinterviewsarereallygoodindicatorsofthe • If yourealizeyourframeworkiswronginthefirst10 • • Your frameworkisyourpath tosolvingthecase. To pushthecaseahead,explainthoseareasyouare • • Do youknowthekeyquestions?Makesurean- • do themreallywell,consultingmaynotbeforyou. do notlikethecaseinterviewprocess,andevenifyou industries andbusinessareasallthetime.Ifyoureally you actuallyliketheambiguity,researchingdifferent problem-solving aspectsofconsulting.Thinkaboutif the interview. work orcreateanewonesothatyoucanstillace minutes oftheinterview,trytoreviseyourframe- crete pieceofinformation. Try toreferitwhenyoufinishanalyzingadis- knows youarepushingthecaseforward. You maynotberight,butatleasttheconsultant case interview,giventhelimitedtimeyouhave. areas. Being80/20isextremelyimportantinthe planning tofocusonfirstandwhyyouchosethese because youthinkanotherareaismoreinteresting. work. Don’tsidestepansweringthequestion swer thequestionbeforecomingupwithframe- © 2008Vault.com Inc. Customized for: Jessica ([email protected]) six studentsbeforeyou! stream ofconsciousness.Remember theinterviewermayhaveinterviewed change, Ithinktherearethreeissuesinthisproblem, etc.Don’tbabblea can avoidtheseifyouaregoodwithmentalmath). ignate thebottompartofpapertododetailedcalculations(butyou volved inthecalculationsotheconsultantcanfollowwhatyouaredoing.Des- calculation youplantodo • Use moresheetsofpaperratherthanless,anduseanewsheetfor • • WRITE BIGsotheinterviewercanreadyournotesfromacrossdesk!If Organize, CalculateandCommunicate sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Visit theVaultConsulting CareerChannelat each discretemoduleofanalysis.Nowisnotthetimetosavetrees. Math! thinking andtalking Be structuredin Management Proper Paper Vault CaseInterviewPracticeGuide2:MoreInterviews want tolookinto,therearetworeasonsforthis easy tofollow.Forexample,therearethreeareasI • Trytocommunicateinpointformssoyourlogicis • Practice thePyramidPrinciple(byBarbaraMinto). • Practiceyourmentalmath.Read • Beorganizedincalculatingyourdata.Explainwhat • Organize yourpapersproperly(page#1:caseinfor- • along theway. follow yourtrainofthoughtandgiveyouhelpfulhints he canreadwhatyouwrite,theconsultantthen are saying. and alsohelpstheinterviewertofocusonwhatyou ing theanswersetscontextforreasoning, Give theanswerfirstandthenyourreasoning.Giv- before the book! calculate 95%of$450intwoseconds.Ifnot,read lanche ofcalculations.Youshouldbeableto culations, andremaincalmwhenmetwithanava- help youtoconductquicksanitycheckonyourcal- quickly byHenrySticker.Strongmentalmathwill porting facts). page: conclusionorpage#1logictreewithsup- from branch1,page#3:anotherbranch,last mation andlogictree,page#2:details/calculations www.vault.com/consulting. doing them.Writedownallthevariablesin- — within- How toCalculate LIBRARY CAREER Appendix 183 Customized for: Jessica ([email protected]) 184 • Keep recommendationsinpointform,andkeepalloftheseunderone Talk aboutanymajorconsiderationsfortherelevantsolutions,andtalk • Getting UnstuckandEndingPerfectly Appendix Vault CaseInterviewPracticeGuide2:MoreInterviews minute (max). other potentialareastolookat. Summarize thesitua- When stuck,imagine tion thewayaCEO you areactuallyin wants tohearit the situation LIBRARY CAREER • If yougetstuck,takeastepbackandvisualizeyour- • • Use relevantdataandinsightsfromthelast20 to • Give theanswersfirst,thenyourrationales.Priori- • Spend afewminutesrecollectingtheinterviewin might neverhavethoughtabout. tion canhelpyoutothinkofpossibleoptions on thefloor.Puttingyourselfinspecificsitua- ine yourselfastheworkeroperatingthatmachinery imagine yourselfastheCEOofcompany,imag- consumer lookingattheproductsonshelves, self inthespecificsituation.Imagineyourselfas 30 minutestosupportyourrationale. menting first(80/20). tize whichofthesolutionsyourecommendimple- preparation foryourrecommendation © 2008Vault.com Inc. Customized for: Jessica ([email protected]) sider firmprofiles, messageboards, theVaultConsultingJob Boardandmore. Visit theVaultConsulting CareerChannelat www.vault.com/consulting. — within- LIBRARY CAREER 185 Customized for: Jessica ([email protected]) 186 About theAuthors officer. as ATK's UniversityofMichigangraduatebusinessschoolcampusrecruiting relationships, accountplanningandengagementexecution.Bobalsoserved management consultantwith A.T. Kearney, Bobfocusedondevelopingclient folio management,manufacturingandproductengineering. While aprincipal sulting experience,particularlyintheareasofIT outsourcing,servicelineport- 25 yearsofdiverseindustry, informationtechnology, andmanagementcon- Robert Vujovich Technologies asaproductmanagerdealingwithsupplychainissues. egy andMarketing.PriortoKellogg,Sridharspentfouryearsworkingwithi2 the Londonoffice. HegraduatedfromKelloggin2006withmajorsStrat- Sridhar Parameshwaran east Asia. Earlierinhiscareer, hewasinvolvedintwostartups Toronto. School ofManagement(Toronto), hehasadvisedclientsinEuropeandSouth- management consultancyfirm. An MBA graduateoftheJosephL.Rotman Rishi Marwah LIBRARY CAREER is aManagementConsultantintheSingaporeoffice ofaglobal is aPrincipalwithCeleniumGroup,LLC.Hehasmorethan is an Associate with A. T. Kearneyworkingout of © 2008Vault.com Inc.