Case Interview Workshop:

“How to Succeed in Case Interviews”

Eli Broad Graduate School of Management

September 15, 2006

Today’s objectives

At the End of This Workshop, Participants Will Be Able to:

 Explain the case-style interviewing process

• Frameworks — what they are and why we use them
• Develop a picture of what demonstrated structured thinking looks like

 Learn how to structure their thinking

• Understand the problem
• Dissect the problem/identify the key question(s)
• Examine/analyze each piece of the problem

 Prepare/plan for a case-style interview

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 The Case Interview

Candidates should use a logical process to answer case

questions Assimilate & Structure Problem

Listen To The
5-8 minutes
Case As
Presented

Clarify Major Issues

• Restate problems
• Ask clarifying questions
• Organize issues

For Each Issue

Framework Develop One Or
Issue More Hypotheses

Ask Key Questions

Reformulate Hypothesis
Key Hypothesis - or - To Validate Or
Questions Next Hypothesis Invalidate Each
Hypothesis

Summarize
Your
Conclusion Conclusions

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 The Case Interview

In case interviews, begin with general issues and

hypotheses which will lead to more specific sub-issues
and outputs
The “General Approach”
General
“Big Picture”
Business Situation/Client
Objective

Issue Issue Issue

Hypothesis Hypothesis Hypothesis

Analysis Analysis Analysis

Synthesis

Detailed
Analysis
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 The Case Interview

Facts should be synthesized into findings, conclusions

and recommendations

Fact

Fact Finding

Conclusion Recommendation
Hypothesis Fact

Issue Finding

Hypothesis Fact
Conclusion Recommendation

Fact Finding

Fact

Listen Develop Collect Synthesize Diagnose Prescribe

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 The Case Interview

Taking notes can help you keep track of both your

thought process and information
 Take notes will help you and the interviewer trace your logic flow

 Using diagrams such as Fishbone, Issue Trees, and Causal loops can help
organize your train of thought and give structure to your thinking

 If 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

 Make 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

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Case Interview Frameworks

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 Frameworks

Common frameworks for answering business case

questions

Case Category Framework

• Company profitability • Revenue cost
problems breakdown

• Company’s market • The “Three Cs”

positioning
• The “Four Ps”
• Marketing assessment
• Market entry/market • Five forces analysis
analysis

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 Frameworks

Cost/revenue framework

Profit

Revenue — Cost

( Price X Quantity
) —
( Fixed + Variable
)
• Price • Customer • Capital equipment • Labor
discrimination segmentation • Land • Materials
• Changes in pricing —New/existing • Buildings • Energy
structure —Loyal/switchers
• Viability of pricing • Channel
over time restrictions or
• Discounts or temporary
couponing disturbances
• Competitor’s • Changing
pricing consumer
demands
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 Frameworks

The “Three Cs”

Market Positioning of
XYZ Company

Cost Customers Competitors

• Break down the • Segment the • Identify major
company’s cost company’s customer competitors
structure base — Traditional
— Fixed — New/existing — Unexpected
— Variable — Loyal/switchers substitutes
• Estimate the • Examine company • What are the
competitor’s cost profitability by competitor’s strengths
structure segment and weaknesses
• Understand trends in — How much do — Profits
cost structures they purchase? — Costs
— At what price? • Investigate market
share
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 Frameworks

The “Four Ps”

Product Place (Distribution) Promotion Price

• What are the • How is the product • What advertising • How is this product
product’s distributed to medium is used to priced?
differentiating consumers? sell the product? • How are its
attributes? • What new methods • What is the most competitors priced?
• Why does the of distribution are effective method of
consumer purchase coming available? “getting the word
this product? out”?

• Unique packaging • Retail store • Newspaper versus • Value pricing/

• “Superior cleaning • Warehouse store, TV versus radio ads “Everyday Low
power” Sam’s Club • Retail placement — Price”
• Affinity marketing — • Mail order aisle-end displays • Premium pricing
“cool people drink • Internet/electronic • New media? • Price discrimination
XX” distribution

How effective is this product’s marketing campaign?

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 Frameworks

Five forces market analysis

Barriers To Entry
• Economies of scale
• Capital costs
• Cost advantage of existing
competitors
• Barriers to exit
• Patents

Supplier Power Market Rivalry Buyer Power

• Number and size of • Number and size of • Significance of the
suppliers competitors purchase relative to cost
• Switching costs/product • Industry growth rate structure
differentiation • Product differentiation factors • Switching costs
• Availability of • Industry margins/pricing • Purchase volume
substitutes • Threat of backward
• Possibility of forward integration
integration
Substitutes
• Relative price/value of the
substitute compared to
industry’s product
• Cost of switching to substitute
• Buyers’ propensity to switch
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 The Case Interview

We have a set of examples for five of the most common

interview cases

Pricing
Market Profit
Expansion Improvement

Industry Investment /
Analysis Types of
Divestment
Cases

In today’s workshop session you will also practice other types

of cases

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 The Case Interview

Industry analysis case studies

Types of
Cases

Examples
• A 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?

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 The Case Interview

Industry analysis case studies (cont’d)

Types of
Cases

Key Points Candidate Should Explore

• Evaluate market size and segmentation
Market • Analyze product demand/trends
• Identify customer requirements
• Analyze competitive economics
• Determine levels of
Competition – Product differentiation
– Market integration
– Industry concentration

• Evaluate negotiation power

Customer/Supplier Relations
Barriers to Entry / Exit
Financials
• Identify substitutes
• Assess backward or forward integration potential
• Evaluate companies entering/exiting
• Determine competitor reaction to new entrant
• Analyze economies of scale
• Predict learning curve
• Research government regulations
• Identify key financial ratios (ROI, ROE)
• Determine fixed and variable costs
• Assess risk factors of industry

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 The Case Interview

Market expansion case studies

Types of
Cases

Examples
• A 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
client’s 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?

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Market expansion case studies (cont’d)
Key Points Candidate Should Explore
Size of the market
Understand competitors
Analyze customer needs
Assess client’s capabilities
Understand economics
The Case Interview
Types of
Cases
• Identify data sources for market size
• Understand growth trends
• Identify current service providers
• Evaluate strengths/weaknesses
• Estimate competitors’ cost structure
• Identify key customer segments and respective needs
• Identify gaps in current services
• Discuss cost-benefit trade-offs
• Identify client’s strengths and weaknesses
• Compare client capability to competition
• Understand client’s cost structure
• Determine potential competitive advantages
• Project expected revenues and costs
• Estimate capital expenditures
• Perform sensitivity analyses
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 The Case Interview

Pricing case studies

Types of
Cases

Examples
• Your client is a concert pavilion. Revenues at performances are declining. Given
the concert pavilion’s 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?

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 The Case Interview

Pricing case studies (cont’d)

Types of
Cases

Key Points Candidate Should Explore

• Identify the type of market
– Monopoly

– Oligopoly

– Perfect competition

• Issues to address
– Consider what the market will bear

– Think about the long-term effects of pricing decisions

– Think how the competition will respond to changes in pricing

– What is the elasticity of demand? Consider the consumer’s sensitivity to price

changes
– Consider methods to create price discrimination

– Consider using strategic tactics such as creating “loss leaders” or “traffic

builders”

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 The Case Interview

Profitability case studies

Types of
Cases

Examples
• The 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 campaign’s performance?

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 The Case Interview

Profitability case studies (cont’d)

Types of
Cases

Key Points Candidate Should Explore

• Costs: • Price/cost/volume relationship:
– Fixed and variable – Plant utilization

– Labor costs – Quality

– Suppliers – Economies of scale

– Materials – Distribution

• Customers: • Competition:
– Price sensitivity – Pricing

– Segmentation – Capacity

– Cost-benefit trade-off – Basis of differentiation

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 The Case Interview

Investment cases
Types of
Cases

Examples
• A German manufacturer of consumer products is considering opening a
manufacturing facility in Poland to meet Eastern Europe’s 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?

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 The Case Interview

Investment cases (cont’d)

Types of
Cases

Key Points Candidate Should Explore

• Sustainability of profits in segment
• Market size and dynamics
• Competitive position
• Product differentiation and standards
• Price dynamics
• Distribution of costs

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 The Case Interview

Again remember these key points

• Framework and process are critical: issues, hypotheses, key questions,

conclusions

• Think big picture first, then think “top down”

• Think of and express all alternatives

• Listen to the interviewer’s feedback and its impact on your process

– Be “coachable”; integrate feedback quickly

• Restate and “gut-check” your final conclusions

– Does it make sense what I’m saying?

And when things aren’t going as well as you’d like…

... recognize you’re stuck
... ask for more information
... pursue different paths

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 The Case Interview

We are going to practice some real cases in our

breakout sessions
Breakout Sessions

 We will split into groups

 Practice a case

 Identify key success factors

 Regroup to share learnings

 The breakout will last approximately 45 min
 Try to take the most out of this experience and have fun!

And this is just the beginning! Over the next couple of weeks
practice, practice, practice!

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