ATKearneyCase Interview Workshop “How to Succeed in Case Interviews”

September 15,2006Case Interview Workshop:“How to Succeed in Case Interviews”Eli Broad Graduate School of Management2A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationTodays objectivesAt the End of This Workshop,Participants Will Be Able to:nExplain the case-style interviewing processFrameworks what they are and why we use themDevelop a picture of what demonstrated structured thinking looks likenLearn how to structure their thinkingUnderstand the problemDissect the problem/identify the key question(s)Examine/analyze each piece of the problemnPrepare/plan for a case-style interview3A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationFrameworkIssueKey QuestionsHypothesisConclusionReformulate Hypothesis-or-Next HypothesisListen To TheCase As PresentedFor Each IssueDevelop One OrMore HypothesesAsk Key Questions To Validate OrInvalidate EachHypothesisSummarize YourConclusionsClarify Major IssuesRestate problemsAsk clarifying questionsOrganize issuesThe Case InterviewAssimilate&Structure ProblemCandidates should use a logical process to answer case questions5-8 minutes4A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationIn case interviews,begin with general issues and hypotheses which will lead to more specific sub-issues and outputsBusiness Situation/Client ObjectiveIssueIssueThe“General Approach”General“Big Picture”Detailed AnalysisHypothesisHypothesisAnalysisAnalysisSynthesisIssueHypothesisAnalysisThe Case Interview5A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationFacts should be synthesized into findings,conclusions and recommendations FactFindingConclusionRecommendationFactFactFactFactFactFindingFindingConclusionRecommendationSynthesizeDiagnosePrescribeCollectIssueHypothesisListenDevelopHypothesisThe Case Interview6A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationTaking notes can help you keep track of both your thought process and informationnTake notes will help you and the interviewer trace your logic flow nUsing diagrams such as Fishbone,Issue Trees,and Causal loops can help organize your train of thought and give structure to your thinking nIf you must retrace your steps due to the flow of the interview,you will have documentation right in front of you to help answer these additional questions nMake sure that you practice taking notes.You will want to be comfortable taking effective notes without ignoring the interviewer or impacting your ability to communicate The Case Interview7A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationCase Interview Frameworks8A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationCompany profitability problemsCompanys market positioningMarketing assessmentMarket entry/market analysisCase CategoryFrameworkCommon frameworks for answering business case questionsRevenue cost breakdownThe“Three Cs”The“Four Ps”Five forces analysisFrameworks9A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationProfitRevenueCostPriceQuantityFixedVariable(X)(+)Price discriminationChanges in pricing structureViability of pricing over timeDiscounts or couponingCompetitors pricingCustomer segmentationNew/existingLoyal/switchersChannel restrictions or temporary disturbancesChanging consumer demandsCapital equipmentLandBuildingsLaborMaterialsEnergyCost/revenue frameworkFrameworks10A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationMarket Positioning ofXYZ CompanyBreak down the companys cost structureFixedVariableEstimate the competitors cost structureUnderstand trends in cost structuresSegment the companys customer baseNew/existingLoyal/switchersExamine company profitability by segmentHow much do they purchase?At what price?Identify major competitorsTraditionalUnexpected substitutesWhat are the competitors strengths and weaknessesProfitsCostsInvestigate market shareCostCustomersCompetitorsThe“Three Cs”Frameworks11A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationWhat are the products differentiating attributes?Why does the consumer purchase this product?Unique packaging“Superior cleaning power”Affinity marketing “cool people drink XX”How is the product distributed to consumers?What new methods of distribution are coming available?Retail storeWarehouse store,Sams ClubMail orderInternet/electronic distributionWhat advertising medium is used to sell the product?What is the most effective method of“getting the word out”?Newspaper versus TV versus radio adsRetail placement aisle-end displaysNew media?How is this product priced?How are its competitors priced?Value pricing/“Everyday Low Price”Premium pricingPrice discriminationProductPlace(Distribution)PromotionPriceHow effective is this products marketing campaign?The“Four Ps”Frameworks12A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationEconomies of scaleCapital costsCost advantage of existing competitorsBarriers to exitPatentsBarriers To EntryNumber and size of competitorsIndustry growth rateProduct differentiation factorsIndustry margins/pricingRelative price/value of the substitute compared to industrys productCost of switching to substituteBuyers propensity to switchNumber and size of suppliersSwitching costs/product differentiationAvailability of substitutesPossibility of forward integrationMarket RivalrySubstitutesSignificance of the purchase relative to cost structureSwitching costsPurchase volumeThreat of backward integrationBuyer PowerSupplier PowerFive forces market analysisFrameworks13A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationWe have a set of examples for five of the most common interview casesIndustry AnalysisMarket ExpansionPricingInvestment/DivestmentProfitImprovementTypes ofCasesIn todays workshop session you will also practice other types of casesThe Case Interview14A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationIndustry analysis case studiesTypes ofCasesExamplesA group of investors is considering building a 40,000-seat concert pavilion in the Northwest suburbs.What factors should they consider?A manufacturer of automotive batteries is losing market share and profitability is eroding.What should the company do?A national provider of in-home health care services is considering purchasing a regional managed-care facility with 250 physicians.What factors should our client consider in making this decision?A leading manufacturer of automobiles is considering acquiring a national rental car company.What factors are important in this decision?The Case Interview15A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationIndustry analysis case studies(contd)Types ofCasesKey Points Candidate Should ExploreMarketEvaluate market size and segmentationAnalyze product demand/trendsIdentify customer requirementsCompetitionAnalyze competitive economicsDetermine levels ofProduct differentiationMarket integrationIndustry concentrationCustomer/Supplier RelationsEvaluate negotiation powerIdentify substitutesAssess backward or forward integration potentialBarriers to Entry/ExitEvaluate companies entering/exitingDetermine competitor reaction to new entrantAnalyze economies of scalePredict learning curveResearch government regulationsFinancialsIdentify key financial ratios(ROI,ROE)Determine fixed and variable costsAssess risk factors of industryThe Case Interview16A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationMarket expansion case studiesTypes ofCasesExamplesA U.S.domestic express package company with both air and ground transport capability is highly profitable,with over$7 billion in revenue.A European company suggests they form an alliance to provide service between the U.S.and Europe.Should the client enter the international market?If so,what should the clients strategy be?If not,why?A European manufacturer of confectionery products is considering entering the U.S.market with premium product line.Should they,why or why not?A national retailer has approached our client,a manufacturer of fast-moving consumer products,and asked them to consider manufacturing a private label product line for them.The manufacturer is burdened with excess manufacturing capacity,so the proposal looks attractive.What factors should management consider in making the decision?The Case Interview17A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationMarket expansion case studies(contd)Types ofCasesKey Points Candidate Should ExploreSize of the marketIdentify data sources for market sizeUnderstand growth trendsUnderstand competitorsIdentify current service providersEvaluate strengths/weaknessesEstimate competitors cost structureAnalyze customer needsIdentify key customer segments and respective needsIdentify gaps in current servicesDiscuss cost-benefit trade-offsAssess clients capabilitiesIdentify clients strengths and weaknessesCompare client capability to competitionUnderstand clients cost structureDetermine potential competitive advantagesUnderstand economicsProject expected revenues and costsEstimate capital expendituresPerform sensitivity analysesThe Case Interview18A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationPricing case studiesTypes ofCasesExamplesYour client is a concert pavilion.Revenues at performances are declining.Given the concert pavilions goal is to maximize exposure while covering costs,what should be done?An inventor of a new athletic shoe wants to know:(1)What the market is for his goods,and(2)how to produce it.What steps should be taken?A major regional airline has drastically reduced its prices in its markets.How should other airlines in those markets respond?The Case Interview19A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationPricing case studies(contd)Types ofCasesKey Points Candidate Should ExploreIdentify the type of marketMonopolyOligopolyPerfect competitionIssues to addressConsider what the market will bearThink about the long-term effects of pricing decisionsThink how the competition will respond to changes in pricingWhat is the elasticity of demand?Consider the consumers sensitivity to price changesConsider methods to create price discriminationConsider using strategic tactics such as creating“loss leaders”or“traffic builders”The Case Interview20A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationProfitability case studiesTypes ofCasesExamplesThe U.S.subsidiary of a French spring water bottler is experiencing a drop in profits.Why?A Japanese automotive components(brakes,shocks,struts)manufacturer with a 12%share of the U.S.market is experiencing declining profits.20%of the products are shipped in from Japan and 80%are manufactured in U.S.facilities.What might be causing the decline and what actions should be taken?A company makes stairmasters and treadmills for sale to health clubs.How can profits be increased?Your client is a consumer products company.The board wants to know if its advertising campaign for its new brand of chips has been successful.How would you evaluate the campaigns performance?The Case Interview21A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationProfitability case studies(contd)Types ofCasesKey Points Candidate Should ExploreCosts:Fixed and variableLabor costsSuppliersMaterialsPrice/cost/volume relationship:Plant utilizationQualityEconomies of scaleDistributionCustomers:Price sensitivitySegmentationCost-benefit trade-offCompetition:PricingCapacityBasis of differentiationThe Case Interview22A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationInvestment casesTypes ofCasesExamplesA German manufacturer of consumer products is considering opening a manufacturing facility in Poland to meet Eastern Europes growing demand for its products.What factors should the company consider?A Midwest-based pharmaceutical company is considering opening distribution warehouses on the West Coast to handle the growing Western territory.What factors should it consider?A major national bank has just acquired a smaller regional bank.What steps should they take to properly integrate their resources?A company of chocolate and confectionery products is considering acquiring a regional soft drink manufacturer.Are the distribution synergies sufficient enough to justify an acquisition?The Case Interview23A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationInvestment cases(contd)Types ofCasesKey Points Candidate Should ExploreSustainability of profits in segmentMarket size and dynamicsCompetitive positionProduct differentiation and standardsPrice dynamicsDistribution of costsThe Case Interview24A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationFramework and process are critical:issues,hypotheses,key questions,conclusionsThink big picture first,then think“top down”Think of and express all alternativesListen to the interviewers feedback and its impact on your processBe“coachable”;integrate feedback quicklyRestate and“gut-check”your final conclusionsDoes it make sense what Im saying?Again remember these key pointsAnd when things arent going as well as youd like.recognize youre stuck.ask for more information.pursue different pathsThe Case Interview25A.T.Kearney 09.15.2006/Eli Broad Workshop PresentationWe will split into groupsPractice a caseIdentify key success factorsRegroup to share learningsThe breakout will last approximately 45 minTry to take the most out of this experience and have fun!We are going to practice some real cases in our breakout sessionsBreakout SessionsAnd this is just the beginning!Over the next couple of weeks practice,practice,practice!The Case Interview