Case study The "case study" is an interviewing technique that you will typically encounter when interviewing with

Estin & Co, or another strategy consulting firm. When you are not familiar with this exercise, it may be a bit stressful. This is obviously not the objective. The simple reason for conducting such an interview, is that "cases" are our everyday job. Our activity is highly analytical; we constantly try to solve new and unheard of problems. So what we want to find out in a case interview is how you will act and react in the course of a typical assignment. Try to think of it as something very ordinary, something that you would do everyday with your manager while in a case meeting. And never hesitate to ask questions. Basically, there are five kinds of cases : The market size case The logic case The finance case The industry dynamics case The strategy case The market size case In a highly competitive world,valuable information is scarce. You are often unable to find the exact piece of information you need, or may have doubts regarding the reliability of a given source. In such situations, your best recourse is to estimate an answer indirectly. The market size case is precisely about this. You may be asked to evaluate the market size of, say, the washing- machine business in India (or it could be the number of phone calls made each year in France). You should explain your reasoning, how you analyze the problem (the first thing to know is how many people own a washing-machine, then how often they buy one to replace the old one, then what proportion buy a brand new one, then what the average price must be.). You may have to do some segmentation or to make some estimates: always try to use your existing knowledge first; however thin it may be (for example, you know that the population of India is between 800 million and 1 billion people, that most of these persons are very poor so not likely to have a washing-machine, that a washing-machine won't cost less than, say, 200 $.). The logic case When you analyze a business or when you present recommendations to a client, your reasoning has to be flawless. It may seem easy but it can be very tricky. Things are simply not so clear sometimes.

The logic case is about making sure that you won't fall into any logical trap by reaching a conclusion too quickly. The most common logics case is the "quarter past three" question: what angle is formed by the hands on your watch face at 3:15? Most of the time, the candidate says zero, simply because he didn't took time to think about it. If you happen to have such reasoning in front of a client, you won't be retained for long. If you pause for a second, you will realize that, at 3:00, the small hand is on the 3 but that, at 3:15, it has moved a little so as to be on the 4 at four o'clock. Once you have found that out, you can easily find the solution: 360 / 12 (number of hours) / 4 (number of quarters in an hour) = 7,5 The finance case Finance is at the core of our business. At the end of the day, a good or a bad strategy is reflected by a company's performance vs. its competitors'. So you have to master finance to be an effective strategy consultant. Finance cases may appear disturbing because they always look like technical questions. In fact they are truly about your analytical skills and your business knowledge. For example, you may be asked why, in the long run, a company's annual growth rate cannot be higher than its cost of capital. Don't be afraid, even if at first you haven't got a clue. You may know that a company's valuation can be assessed by the sum of its future actualized cash-flows: (where r is the cost of capital) which can be written as: (where g is the annual growth rate) which is equivalent to: This series has a value only if: -1 < (1+g)/(1+r) < 1 which is the same as: -r-2< g < r But you don't have to do all this painful demonstration if you use your business sense. If a company has an annual growth rate higher than its cost of capital, it has an incentive to grow. Yet a company cannot get bigger and bigger. In the end the market size and the whole economy have a finite value. So in the long

run there must be a point at which the company's and the market's annual growth rate cannot stay a very high levels and tend towards zero. The industry dynamics case Strategy is about understanding the rules of the game in order to outperform your competition. So, as a strategy consultant, you should exercise your analytical skills whenever you get a chance. The objective of the industry dynamics case is to make sure that, not only you keep abreast of the business news, but you also try to make your own opinion on the economics and dynamics of major industries. As an example, you could be asked to explain the current evolution of the car industry. Nobody expects you to be an expert. What's important is your ability to quickly gain a good understanding of this business: economics (e.g. scale effects), levers of competition (e.g. high volumes and wide product range), dynamics (e.g. shared platforms), strategic moves (e.g. partnerships, mergers & acquisitions)... Your conclusion is much less important than the questions you ask, which show your capability to analyze the problem. The strategy case All the above cases are truly only a portion of a larger one, which is the strategy case. For the short period of the interview, you must act like an experienced consultant dealing with a new assignment. Don't try to have any pre-established framework for analyzing the problem. Ask questions (any question that comes to your mind). Use all the available information (especially since, contrary to a real life assignment, your interviewer already knows the case and tries to help you out). Try to be as business-minded as you can (reading a business newspaper regularly is definitely an asset). A typical case could be that of a cement company whose revenues are twice as large as that of its main competitor but whose earnings are twice as small. The head of this cement company wants your advice about how to increase its profitability. If you need anything to get you started, remember a few tools that are always helpful. Try to evaluate the size and growth of the relevant market. Production costs are a major driver in any industry: analyzing the cost structure can teach you a lot about scale effects, capacity utilization, synergies... Business is part of a global framework: different technologies, different products, different companies or regulations can interfere with a well- established industry and change its dynamics. Last but not least, segmentation (geographies, products, clients, distribution channels...) is the basis of strategy: often, when you can't

figure out what is going on in a business, it is because your segmentation is not accurate. By now you know everything you need to face the case interview without fear. It's up to you to stand out from the crowd.