Baixe Wharton Casebook 2007-2008 e outras Notas de estudo em PDF para Economia, somente na Docsity! A Wharton Consulting Club Wharton Consulting Casebook 2007 — 2008 Edition Table of Contents I. Introduction................................................................................................................. 1 II. What Interviewers Want ............................................................................................. 2 III. Types of Cases ............................................................................................................ 4 IV. Using a Framework..................................................................................................... 6 V. How to Crack the Case ............................................................................................... 9 VI. Practice Cases ........................................................................................................... 12 A. Practice Case #1 – Bubble Gum Manufacturer................................................. 13 B. Practice Case #2 – Widget Manufacturer in Brazil .......................................... 15 C. Practice Case #3 – Market Growth Strategy in Retail Banking........................ 20 D. Practice Case #4 – Retirement Homes.............................................................. 26 E. Practice Case #5 – R&D Portfolio .................................................................... 28 Page 3 question posed and providing logical support for you answer based upon the facts discovered during the case. Let me emphasize: You must answer the problem posed by the case to pass the case interview. During the interview process, each interviewer will see a dozen or more candidates, but will only advance a couple to the next round. You may have been polished, confident, and likeable, crushed the analytics of the case, and answered every question posed by the interviewer with ease, but if you didn’t address the problem of the case you are not likely to stand out as one of the one or two stars that the interviewer is going to recommend that day. Note that you don’t necessarily need to have the “right answer.” Often you will be asked to come up with your own assumptions for different facts in the case, and therefore the final answer may vary from candidate to candidate. What is important is that you have made a concise conclusion that is consistent with the facts given and assumptions that you have made. Interviewers like to say that you are exploring a business problem together. If you have a good rapport with the interviewer you may take the case in any number of directions. This is fine – just be sure to come to a conclusion. Don’t be tempted to hedge in your conclusion. Cases generally ask you either for a recommendation (“Should company X invest in expanding production?”) or for the answer to some problem (“What is the market for Silly Putty?”). Do not say something like “Expanding production is good because it will lead to increased market share and will help defend against the strengthening competition. On the other hand, it may increase fixed costs to the point that the firm becomes unprofitable.” Take a stand, back up your reasoning with logic and facts, and know when to shut up and finish the case. So you muddled your way through 15 minutes of questioning, managed to formulate a concise and (hopefully) correct conclusion, and fought the urge to keep talking about the case. You’re almost done. Not all interviewers will do so, but you should try to get them to give you feedback about the case that you can use for your next case. If you had a good discussion about a real-life case and came to a definite conclusion, it is often easy to ask “so what actually happened?” Interviewers often use their own cases and are happy to talk about what they did. This is an excellent way to gauge how well you did and to find out what areas of questioning you might have missed. Finally, remember that the interview isn’t over until you are out the door. Collapsing in despair after the case is over does not convey the sense of confidence and poise that you are going for. No matter how poorly you thought it went, stay upbeat and act as though you had a challenging but enjoyable experience and thank your interviewer for his time. Page 4 III. Types of Cases As you interview with different firms, you will likely encounter a number of different variations of the case interview. It’s a good idea to know beforehand what types of cases you might encounter. Below are a number of different case styles that companies used in the 2004-2005 recruiting season. Standard Case – Most case interviews will be of the style contained in this book and in the David Ohrvall casebook. These cases generally ask you to consider a broad business problem and come up with a recommendation for responding to it. In some cases, the interviewer may provide a substantial amount of data either verbally or in the form of charts or graphs. Other times, the interviewer will provide no facts whatsoever and ask you to make reasonable assumptions for all case facts. These cases will always require you to drive to a conclusion. Market Sizing Case – Market Sizing cases are not common in MBA interviews, though you may encounter one. In these cases, you are simply asked to estimate some unknowable amount. This could be estimating the market for Silly Putty in the US. It could be estimating the number of ping-pong balls that would fit in a football stadium. Solving these cases is all about coming up with reasonable assumptions, approaching the problem clearly and logically, and crunching the math correctly. Command and Control Case – McKinsey has begun using cases in which the interviewer takes substantial control over the interview, essentially incorporating Market Sizing type questions into a broader Standard Case. These cases can be difficult because you must maintain control over the case in order to reach a reasonable conclusion, yet the interviewer will periodically derail your questioning to have you solve a particular problem. The key here is to keep moving quickly, addressing the problems they pose and then moving on in your questioning. Crunch and Interpret – Some cases will be simply about the numbers. You may be given a graph, a chart, or even a set of equations and be asked to analyze the data to answer a particular question. ZS used this format for their first-round interviews with a series of slides, starting with a graph, then a table of data, and finally an equation. Candidates were asked to analyze the data presented in each slide and then reach a final conclusion that synthesized all of the data provided. In these cases, you don’t need to worry about driving the case because the interviewer will be doing that. Instead, focus on getting the math right and trying to pull insight from the data provided. Be ready to provide a concise conclusion that pulls together everything that you have discovered. Read and Discuss – Monitor used a case format for their first rounds that involved reading a three-page case in a short period of time and then discussing the case with the interviewer. The interviewer asked questions about the case that required both synthesizing information from the overall reading, as well as pulling specific numbers and performing analysis. These cases are difficult because you will have very little time to read the case, but must still be able to pull the case facts from memory and analyze them. Take a deep breath and read the case quickly but carefully, underlining or noting key facts in the case so that you can more easily find them when you need them. Page 5 You still need to drive these cases, but doing so is more difficult since the interviewer will be asking a number of specific questions. Try to put the case into an overall question that needs to be answered (e.g. “Is this a business we should enter?”) and then approach the analysis of the interviewer’s question in this light. Present to the Board – A variation of the Read and Discuss case was used by ZS and Monitor in second round interviews. Candidates were given a larger amount of case and other supporting materials to read and had 40 minutes to read them and then prepare a presentation to the board of a fictional company. At the end of the 40 minutes, the candidate was asked to come into a room where 4-5 interviewers were playing the role of the board. The candidate then had to present their findings and answer (sometimes aggressive) questions from the board. To ace this case, you must be able to maintain composure and present well. Because you will not have a chance to ask questions while you are formulating your recommendation, the dynamics of the case analysis are a bit different. Make assumptions, draw clear conclusions, and stick to you guns in the presentation. IT Case – Diamond and the Booz Allen Hamilton IT practice perform IT-specific interviews which will combine a Standard Case with a deep dive into associated IT technology. In first- round Diamond interviews, candidates were asked to solve a business problem relating to poor automation of sales force activities. Once the candidate diagnosed the problem, they were then asked to describe an IT solution that would solve the problem. You will not get these interviews if you have no IT background, but if you do, definitely expect to be tested on your knowledge. HR Case – KPL conducted its case interviews in a manner fitting with their focus on the organization aspects of strategic implementation. Candidates were asked to start solving a Standard Case. After about five minutes of a typical case when the overall problem had been diagnosed and some solutions posed, the interviewer then stopped the case and switched gears, asking how the solutions would be implemented from an HR perspective. The recommended solution would have created significant impact on morale and answering the case well required a display of empathy in the solution. Stress Case – While not different in format from a Standard Case, these cases are distinguished in that the interviewer attempts to throw you off your game by creating an environment of high stress. Often, the problem will be fairly straightforward but the interviewer will give little or no information and then be stone-faced or even combative in response to the candidate’s questions. In one interview last year, a candidate was given a graph and no information and asked to interpret the situation. The interviewer would not provide any more information, so the candidate postulated different scenarios that might account for the graph. The interviewer’s response to each incorrect hypothesis was a curt “No, that’s wrong.” The key to mastering a Stress Case is realizing that you are in one and keeping your composure. Page 8 Here are possible areas to explore: 1. Competition 2. Customers 3. Supply Chain 4. Revenue You might come up with a different list, but here is the reasoning for the above list: Clearly we are looking for ways to grow the business, probably by repositioning the company in a new market as a response to a competitive threat. So understanding the competition and possible customer segments will be critical to understanding where we might reposition the company. If we are investigating entering a different market, we clearly must understand how our distribution network (as part of our Supply Chain) may provide a competitive advantage (or lack thereof). Finally, we will need to know how much of a growth opportunity any new market positioning may provide. You might also include an investigation of cost position relative to competitors, or question the impact of regulation given that this is a medical product. These were left out initially, however, because they seem like secondary issues (at least at first blush) and can always be investigated further if it becomes clear that they are important. Now within each of these major topics, what drivers would want to investigate? 1. Competition a. Rivals – Who are they? What is their relative share? How are they positioned relative to us? b. New Entrants – Is there a credible threat of new entrants? c. Substitutes – Are we worried about other products serving as substitutes? 2. Customers a. Segments – What new segments might we be able to pursue? b. Needs – What are the needs of each segment? 3. Supply Chain a. Distribution – Do we have the capability to reach a new customer segment? 4. Revenue a. Volume – What the size of a new target segment? b. Price – What price point can we hit? Page 9 V. How to Crack the Case Now let’s pull everything together into an approach to solving cases. Most cases should follow four stages: listening to the question, planning your approach, probing for information, and reaching a conclusion. Listening to the Question – Many cases will involve a data dump at the beginning of the case where the interviewer shares a large amount of information following the statement of the case problem. You must take notes effectively at this stage because you are not going to want to ask her to repeat this information if you need it later. Take notes neatly and in an organized manner. Writing your notes in the style of slides with a title and bullets will help you keep organized and shows that you are already thinking like a consultant. When practicing cases, figure out what information you need to write down, and what you can simply commit to memory. You don’t want to be asking the interviewer to pause while you write down every word. More likely, you will need only to write down numbers and note key facts, but leave contextual information to memory. You may, however, want to write down the core question that you are trying to solve as a reminder to be sure that conclude the case properly. Case Planning – Once the interviewer has stated the problem and provided any initial information, you need to take a moment to plan your approach to the case. Rather than simply falling silent while you plan, ask the interviewer for a minute to plan your approach. Be careful here – after practicing many cases, people often fall to asking for this time in shorthand: “Could I take a minute?” Remember that in the interview, impression is everything. Have an articulate and polite line ready for your interviewer, such as “I would like to develop a plan for approaching this problem. May I take a minute to do so?” In most cases, the interviewer is expecting this and will oblige. Be ready, however, for a Stress Interview where the interviewer may decline (politely or not) to allow you to take a minute to plan. In this case, you must comply and move forward immediately with your probing. While doing this, you should still sketch out a plan in your head to attack the problem and stay in control of the case. Now that you have a minute to think, pull out your framework and start devising a plan. You will want to identify 3 to 5 major topic areas to investigate and the appropriate sub- topics for each. Write each major and sub topic on your note paper in a neat manner that you can share with the interviewer. I suggest that you use one complete sheet of paper to do this and format it as you would a slide. The layout of the slide is not important as long as it clearly shows your topics of investigation and can be clearly followed by the interviewer. This slide becomes your roadmap for the case and you can refer to it throughout the interview to keep both yourself and the interviewer on track. Page 10 Figure 1: Sample Plan Slide Probing for Information - Once you have drawn up your plan of attack for the case, it is time to start digging for information about the case. Using your plan, begin by questioning the interviewer about each topic. You are trying to get information that is going to shed light on the problem being asked, so it is important to guide your questions based on your evolving hypothesis about what you believe the ultimate solution to be. If you suspect that a low-cost competitor is stealing share from the company, your first two questions might be “Who are the other competitors in the market?” and “What are the relative cost positions of each market player?” Be sure to ask concise and definite questions. Asking general questions such as “What is happening in the market?” or “Tell me about company profitability” are likely to get unhelpful responses from the interviewer. You will need to ask specific questions that the interviewer can answer without giving up information too easily. If you are not getting anywhere in your questioning, perhaps you are asking questions that are too vague. While you are probing for information, you will be gathering more and more data. It is imperative that you take effective notes during this stage. As you did during the initial data dump, it is wise to organize your notes in the form of slides. For each major topic area (such as Competition, Revenue, Cost, etc.) create a topic heading, and then list all information gather on that topic as bullets below. If you are careful to follow this format and write neatly, the interviewer will be pleased to see both the organization of your thoughts and your ability to produce slide output. As you get deeper into the case, you will reach a point (hopefully) where you believe that you know the answer. Here is important to shift gears from your planned approach to try to validate your hunch and then gather as much supporting data as possible. In our surgical gloves example, we may find that indeed a low-cost competitor has entered the hospital glove market and is destroying our margins, but that the market for gloves in non-hospital settings is still relatively underserved. At this point, we may switch gears to investigating the potential of this new market, our competitive advantages therein, and key assets that will enable us to penetrate this market. We know what we are trying to conclude – that we want to reposition the company to enter this new market – and we are now gathering data to back up that position. Competitors Customers Supply Chain Revenue • Rivals • New Entrants • Substitutes • Segments • Needs • Distribution • Volume • Price Page 13 A. Practice Case #1 – Bubble Gum Manufacturer Question (posed by interviewer): You are a consultant working for a bubble gum manufacturer. The CEO of the gum manufacturing company is concerned because his company is experiencing declining margin. My questions to you are: (1) the reasons behind declining profitability (2) your suggestions for improving profitability Interview Guidance (general information to be given if asked): Sales have been increasing If asked about cost composition, ask the interviewee to brainstorm potential cost buckets: COGS: gum, sugar, flavor, smell, color Labor SG&A Raw material cost has not changed (i.e. the unit cost is the same but total cost could be different depending on product composition. ***This is the key to the case so don’t give the information about the unit cost to the interviewee too early in the interview. Remember to push the interviewee so that she comes to the conclusion herself***) Product portfolio – 2 types of products: flavored and flavorless gum Both products are sold at the same price point. Composition products: Flavored gum raw material: gum, sugar, flavor, color dye Flavorless gum raw material: gum, sugar, color dye Gum, Sugar, and Color Dye raw materials are same in size for each of the two products. Logical Conclusion: Profitability has declined because sales of flavored gum have been increasing, which means that raw material consumption is also increasing because flavored gum requires the additional flavor component. This added with the fact that the price of flavored gum is the same as non flavored gum, means that, essentially, costs are now rising while revenues are not. To improve the profits of the company, interviewee should come up with 4-5 suggestions (raising price of flavored gum, sourcing cheaper flavors from other suppliers, negotiate with existing suppliers to reduce the flavor cost, vertical integration of flavor manufacturing company) Page 14 Successful Roadmap: The key focus of this case is in the product mix. Most interviewees may be really confused when they get the info that sales have been rising and cost is constant. First, don't guide them into the product portion right away b/c this is the topic that they should explore themselves. Logical buckets that interviewees should expore are Sales trend, cost trend, cost composition, product mix. The conclusion should be concise as indicated in the logical conclusion section. For the answers to the second question (how to improve profits), great interviewees would present two type of options (short term (easy to implement, quick wins) would be to negotiate with existing suppliers / look for other suppliers, long term (vertical integration)). When discussing price change, you should ask interviewees risk regarding price increase and how they are planning to cope with it. For example, customers may buy less of flavor gums b/c of price increase. However, you can offer value-added product such as low-cal flavor gum & do promotional/marketing efforts to justify price increase. Page 15 B. Practice Case #2 – Widget Manufacturer in Brazil Question (posed by interviewer): A widget manufacturer in Brazil has a 60% national market share and has a leadership position in South America. However, it only has a 5% international market share. The top 20 clients buy 80% of its products and the manufacturer is concerned with increasing margins and exploiting new sources of revenue. Their CEO has asked you to gather data and brainstorm potential ideas for increasing margins and market share. Interview Guidance (general information to be given if asked): Market Information: Market is growing at 5% No significant competitors in the region Greatest threat comes from U.S., Chinese and Indian imports Premium pricing for national customers Company Information: Plants are operating at 100% capacity Plants can’t shift from producing one product to another Currently company sells products directly to customers Interviewee should ask to understand the products and profitability of each. Remind them that the company sells its products in local and international markets. ***Please use Exhibit A when asked this question*** Interviewee should ask about the breakdown of international and national markets. ***Please give Exhibit B when asked this question*** Ask them to calculate profit margins (should use the unit costs in Exhibit A). Assume no freight costs, taxes, etc Logical Conclusion: Product A is more profitable nationally while Product B is more profitable internationally. (Please see Exhibit C). For national markets, the client should consider reducing prices to gain market share from India, China, and the U.S. to maintain their leadership position. They should also consider developing new products in partnership with local clients and establishing new distribution channels to better serve smaller clients. Internationally, the client should seek support from the government to aid in the export of products. For example, create commercial partnerships at the government level. They should also consider acquiring a company in the markets they would like to enter as well as setting up distribution channels to reach these customers. Page 18 Exhibit B: Units National Price Profit Margin Product A 200 10 ____________ Product B 150 5 ____________ Product C 75 4 ____________ Units Export Price Profit Margin Product A 200 8 ____________ Product B 50 6 ____________ Product C 25 4 ____________ Page 19 Exhibit C: (for use after case or to help interviewee if they get stuck on calculations) Units National Price Profit Margin Unit Costs Product A 200 10 55% 4.50 Product B 150 5 34% 3.30 Product C 75 4 30% 2.8 Units Export Price Profit Margin Unit Costs Product A 200 8 44% 4.50 Product B 50 6 45% 3.30 Product C 25 4 30% 2.80 Product A is more profitable nationally Product B is more profitable internationally Product C has the same margins for both markets Page 20 C. Practice Case #3 – Market Growth Strategy in Retail Banking Question (posed by interviewer): A bank based in a developing country in Southeast Asia has hired us to determine how it can grow in the local market, specifically in retail banking. What are the factors you would look at to assess the situation? What is your recommendation for our client? Interview Guidance (general information to be given if asked): Competition/Competitive Landscape: Market Share by bank and product Client is one of the top three market share leader. Show Exhibit 1 & 2. Observation: Client maintained market share in deposits but lost market share in credit cards. Client lost share in auto loans but is doing very well in home loans. Product and pricing competitiveness All products are priced competitively at market level Brand name and reputation or customer awareness Client has good brand name reputation and recognition Branch and ATM prevalence or distribution of branch network Client has wide distribution of branch and ATM network Macroeconomic Trends: Employment rate or population growth Number of people coming into employment age is at an all time high in the coming 5 years Foreign investments are projected for healthy growth with increase investments in Business Process Outsourcing Interest rate trend Interest rate has declined dramatically in the last 5 years from over 10% to the current level of 4% Disposable income or GDP trend 40% of the population lives at or below poverty line. Another 40% makes less than $500 per month. Top 15% makes less than $2,000 per month. Remaining top 5% is the richest population in the country whose lifestyle resembles those of upper-middle class in developed countries. Disposable income and GDP is projected to continue growing at about 11% per annum Home/car ownership and real estate development growth Home/car ownership and real estate development is expected to increase in the coming 5 years Rural to urban migration Migration rate is stable Products: Types of products Page 23 Exhibit 1 Products Market Share 02-'06 CAGR Market Share 02-'06 CAGR Client 15% 10.6% 10% 2.4% Competitor A 15% 8.0% 17% 9.8% Competitor B 15% 16.0% 28% 10.2% Other 55% 9.1% 46% 6.8% Total Market 100% 10.4% 100% 7.5% Deposits Credit Cards Exhibit 2 Auto Loan sales and market share Housing Loan sales and market share =-client Auto Loan (Ler) Client Market Share (Right —e— Client Mortgage (Left) —o— Client Market Share (Right) Client Auto Loam 4% q CAGRIS% Client Mortgage 32% 34% q CAGR 98% 29% 31% 20% 266 5 24% E 5 e 5 8 e Ls [5% 3 Ss 6 24% e 22% & [= 230 ; 203 134 no 27 127 4 [tes 1,0 20c2 2203 2004 2005 2006 2002 2003 2204 2005 2006 Note: $Currencyis in Millions Page 24 Percent Exhibit 3 Percentage of total number of customers Dk SM 10h 164 206 25 Ok SM 40h AM GD 65% GO CM TO 25% GM 05% COM O 100% 2905275 0% 0% separam Sm custorrers La do a 5 Average Number of Products Across Avg. Deposit Balance a af Average Rof 2 La Products 13 [| T o EH 7] 10 1D-100K 100-<200K 250-<1M Ao <BM O G-<10M d0-<20M 20-<20M aoMUP Annual Deposit Balance Page 25 Page 28 E. Practice Case #5 – R&D Portfolio Question (posed by interviewer): You are part of our team working for a Pharmaceutical manufacturer. We've been asked to look at their current R&D portfolio and assess whether they're maximizing their potential with their current projects. My questions to you are: (1) How can you help them decide what information you would need and (2) What components do you think would round out a portfolio for this company? Interviewer Guidance and Information to be given if asked: Current staffing needs are at equilibrium and layoffs and hiring are not expected to be necessary ***Remember to make them brainstorm. You want them to come up with categories for this company to consider when developing their R&D portfolio. For any questions, make sure you keep them on track with this goal. They should be naming different areas to look at (i.e. investing in current projects versus Investing in creating new business)*** Logical Conclusion: The company should be considering looking at multiple areas of its business such as whether the R&D is for new business or current business, new technologies versus current technologies, spread of projects across your business units, big projects versus small projects, high dollar investment versus low dollar investment, short duration projects versus long duration projects, etc. (There may be a few others but these are the pertinent ones.) Additional Requests, Attachments, Etc: Interviewer - When the interviewee has provided their conclusion for the areas they think the company should be looking at for a successful mix, please ask them to pick two and create a 2x2 diagram for you. Please ask: "If you were to look at these two areas, how would you suggest breaking up the expenditure." ***Please see example attachment for the appropriate 2x2 graph and sample calculations*** If asked how much the R&D expenditure is annually, answer with $1M, but this is not relevant to calculations and they can be done using percentages only. Page 29 Successful Roadmap: A successful interview would follow this "logical path:" (1) Develop a small framework from which they follow. Potential framework categories include Revenues and Expenses, Regulatory Environment, Internal Issues, etc; (2) Start asking appropriate questions based on this roadmap. (example: "I would really like to look at the current state of finances for the company. There is the possibility that for expense reasons, they may not be able to heavily invest in a lot of R&D Projects." (3) When prompted, conclusion should be short and sweet. "In my opinion, this pharmaceutical company should really focus on 4 different categories. These are large investment versus short investment, longer projects versus shorter projects, new business versus existing business, and the mix over different business units. These will allow it to maximize its spending investment and reduce their risk by not being overly invested in one area." (4) The 2x2 should follow. It doesn't matter which areas they pick to compare but the math should be easy. If there is a problem with the math, an easy prompt can be given without too many "points" being taken off. Sample 2x2: Category: Duration of Projects <- this can be any category Long 40% Short 60% High 40% Category: $$ Investment Low 60% The main points to make sure the interviewee gets correct is that all four boxes together should = 100% and that each of the columns and rows should equal the percentage allocated for that particular category (ie 40% for long term projects or 60% for low $$ investment projects) $$ Investment: 40%; Duration: 40%; Total % of All Projects: 16% $$ Investment: 40%; Duration: 60%; Total % of All Projects: 24% $$ Investment: 60%; Duration: 40%; Total % of All Projects: 24% $$ Investment: 60%; Duration: 60%; Total of All Projects: 36%