Consulting club casebook pdf

Find costs. Why or why not? Shrubs important to diversify products! Total of acres should add to 10! Find out what the land will be used for, how many acres, financial target of client, etc. After finding estimated demand, interviewee should look to assign each type of plant to a specific number of acres.

This involves figuring out the margins per unit, the profitability per acre of each plant most profitable plants get first priority in acre assignments , and how many plants can fit onto an acre. Interviewee should take into account the fixed costs for each year. Use as much paper as necessary.

Establishing the case 74 Case8 : Academic Performance of Students McKinsey: Round 1 Guidance for interviewer and information to be Problem statement narrative provided on request A public school system in a city has , students in There are in total 13 grades in the public school system total. The average score of the students in a state wide exam is much lower than the scores of the students from Elementary: KG to 6th grade the rest of the state.

Are there more distractions in the city as opposed to School: Teachers and Support the rest of the state? System, Quality of teachers, What kind of support system does the school have? Possible follow-up and Possible follow-up and Possible follow-up and guidance to interviewer guidance to interviewer guidance to interviewer Support System in school comprises There are same number of students For the purpose of this case lets of Admin, Warehouse for storing in each class. Each student orders 2 assume this is not a problem.

Sample solution element — Math 76 Each student orders 2 math books, There are equal number of students in each grade. How many additional math books should Junior High school get on-time with the improved efficiency in the system? What are the implications of that?

Capacity Utilization, costs associated. Currently the elementary schools can host students. However only students are enrolled. What is the new capacity utilization by moving 6th graders to junior high.

Is Who uses insurance? Assuming we are the first movers, we can capture the majority of this Breakeven amount. Market: size, growth rate, penetration rate, price or understand the product, where it will be sold, customer expected margins, costs: investment and variable preferences, financial targets of the company if any , etc.

Purchase criteria? Competition: market share, products and substitutes Next, candidate should ask about the market size and growth rate.

Capabilities: production capabilities, marketing means for the client. Ask about market penetration rate and and sales, distribution, financial, management skills, competition, investment costs, and profit margins. Conduct a etc. External Environment: relationships with and access to break even? Is this feasible? Assuming client can meet to suppliers, cannibalization, etc.

The current market demands 20M units. Last, the client is fully capable of bringing this product to market. Moreover, our client needs to only sell 60, units Recommendation to break-even in a current market that demands 20M units. Sixty-thousand units is not a lot. Our client currently sells Action First approximately 11M units of its other products annually. Furthermore, our client has the capabilities financial, production, etc.

Before making a final decision, however, I would look into how well our brand would play out in the pizza crust market as Next Steps well as what kind of shelf space our product would get. I would also consider launching first in the gourmet or natural food channels where competition is lower and margins higher. Notes Market Sizing: McKinsey will embed this in their cases from time to time. So will Bain and Booz.

Practice a couple each night to get comfortable with them. When sizing the market, never pull a number from thin air. Make your assumptions known and base it on your personal experience if needed. The interviewer cares more about how you arrived at the answer than the actual answer itself. Establishing the case 87 Case11 : Traffic Signal Company Oliver Wyman: Round 1 Guidance for interviewer and information to be Problem statement narrative provided on request The client is a company that installs and maintains traffic What is their goal of entry?

It is a small company based in California. They Increase revenues and profits no specific ROI target are considering expanding into the Tri-state market, especially Manhattan.

They want our help to determine Is the scope of the case to determine only entry into whether they should enter the Manhattan market. Manhattan market? Yes Does the client manufacture signals? Contracts awarded by bidding to highest bidder.

Use this to determine no. It is strategically important — Manhattan is largest market. This will take us to the big time Implementation risk since we have not done such a large city before.

Risks Investigate historical bids by competitors in previous contracts Next Steps Understand the strategic implications of this market entry and figure out how high we can bid in terms of potential economics benefit s in future BONUS Why may we want to bid at a loss?

Strategic importance of the contract — it can get us more cities in future. Manhattan is the largest signal market in the US. Total yearly subscription fee collected be substantial. This will help him or her develop a traveler audience. Does the client want to improve its top-line or client is currently earning.

Does the company have a financial target? Areas for further exploration include ways to increase revenue, Next, the candidate should brainstorm all the potential such as licensing and sponsorship opportunities, the competitive revenue streams for the travel channel. The two key landscape of the cable industry, and ways to decrease costs for revenue streams are advertising and subscription fees. In figuring out advertising revenue, the candidate should determine which demographic the travel channel should target.

This includes determining the number of viewers for each demographic, the advertising rates that each demographic draws, and the number of advertising slots per day. Afterwards, the candidate should figure out the costs and subtract them from total revenues to get the profit. Last, the candidate should explore any potential risks such as competitive response as well as ways to increase revenues. Establishing the case 95 Case13 : Best Buy LEK: Round 1 Guidance for interviewer and information to be Problem statement narrative provided on request Best Buy is approaching Christmas and sales are down and inventory is rising.

What should they do in the short term to increase profitability? What should they do in long term to stay competitive? Factors: -Circuit City has just declared bankruptcy. May have to lower commission based payments over together mixing convenience of store prices to do this. Store Experience Geek Squad Return Stuff to Suppliers May want to make exciting store Continue to use this as a Have a lot of leverage with suppliers experience like Apple Store and get differentiator of your products and since you own end-consumer.

May be people in to buy high margin Walmart who mainly competes on able to send some stuff back, accessories. May also consider using shared revenue model with suppliers to spread the risk around and align incentives.

What are risks and gains? If they restructure, may Risks come out smaller, but stronger and harder to compete with. BB should consider buying CC or buying their goods if they liquidate. They may also want to buy some Next Steps of their locations if they are strategic and where BB does not have presence. Recommendation Overall: Short Term-cut costs, send inventory to suppliers, and maybe lower prices.

Long Term: Work on in-store experience, continue to promote Geek Squad, and consider strategic acquisitions as Circuit City continues to flounder. Establishing the case 98 Case14 : All-Mart McKinsey: Round 1 Guidance for interviewer and information to be Problem statement narrative provided on request All-mart a discount superstore similar to Walmart is All-mart is planning on opening their first store in interested in entering the market in Romania and hires Bucharest the capital city of Romania.

McKinsey to help them determine if it will be profitable. What factors would you consider to determine if this is a good idea or not? Does All-mart have prior segmented? How do competitors - Overhead differentiate? Opportunity Cost Possible follow-up and Possible follow-up and Possible follow-up and guidance to interviewer guidance to interviewer guidance to interviewer For a market-entry problem, this is After looking at market size, the next These are points that students should the right place to start.

We need to step is to determine if there are mention also in providing a final determine if there is a large enough potential cost savings from opening suggestion. What potential market size can All-mart realistically capture? Is that a big market size? What is the overall costs of running a discount store in Romania as a percent of cost in the U.

Clothing is produced by contractors in Asia - same as in the U. Skincare is the most profitable category for the large Provide this information if the interviewee asks for it. Skincare segment. Lunilever has hired McKinsey to help them determine what their potential entry strategy into the Chinese skincare market should be. The likely provide insight into the most attractive revenue question is about revenue, not profit. If it maintains the status quo same marketing expenditures, no dramatic new product launches etc.

Displays very strong business intuition rounds off intelligently, and gets to the insight quickly. Otherwise, provide the details, but deduct points. Apply above formula to calculate future share. What do you think is the ideal AA price point that Lunilever should enter at? Assume all other information from the earlier question still holds Math Question 2 Information to be provided Approach and solution contd. Local players are unlikely to be as marketing- largely unoccupied savvy as the multinationals.

See solution. Assume that - Sacrifice margin by not operating at the top end to build costs are already included in gross margin figures revenue base. If not, probe for underlying logic. Recommendation 2. Bonus points: They are unlikely to allow Loonilever a free run of the market irrespective of which option they choose 1. Conduct a sensitivity analysis for these revenue projections based on different competitor responses 2. Their operations beverage drinks. They do not distribute are predominantly in North America.

BevCo sells primarily to retailers, restaurants, bars and wholesalers. Segments of drinks include: Recently, competition has been rising, giving consumers Sugar carbonated drinks, e. Coke, Fanta , Juice, more choices over brand as well as type of beverage.

Gatorade , Energy This, in turn, has put pressure on margins. BevCo has e. Red Bull , Diet hired us to make recommendations on what actions to take. Possible consumer drivers: It looks like there is high growth in the Water, Sports and Energy segments. Drivers behind this might include factors such as health, sports, trendiness, demographics. For example, there is a larger proportion of young people in the population.

They specifically want to target young males in the age group. How would you go about doing this? They two products and might ask for more specific manufacture and sell two mosquito repellant products.

The client would like to understand what caused the decline in margins and is looking for three to four ideas on how to boost the margins. Explore causes for that. Possible follow-up and Possible follow-up and Possible follow-up and guidance to interviewer guidance to interviewer guidance to interviewer The interviewee could be probed on her The interviewee should demonstrate The interviewee should explore whether understanding of fixed and variable understanding of the industry i.

The interviewee new and old competitors can affect product mix understanding. Sample solution element — Math The interviewer should not ask any specific math question. However, the interviewee should attempt to calculate the revenue, costs and profits for years and , and understand how the product mix Math Question affected the financial. Then, the interviewee should explore the reasons for the decline in revenues for the first product e.

Provide information if asked labor, material, transportation, distribution costs etc. Revenue split: In revenue was split equally between The reason for both lies in the increase in oil price. Direct the interviewee to the opening framework and ask about lead time and the volatility of demand. Shoes manufactured in Vietnam have a lead time of three months time from order to delivery.

Shoes manufactured in the U. What additional factors should the client add to the unit profitability model in order to make the right sourcing decision? Why are they important? As follow-on steps, the client may wish to understand the sensitivity of these assumptions to quality, transportation, and tariff costs, as well as future changes to the volatility of demand for the product.

Greater volatility or higher cost of capital will push the client to shift more manufacturing back to the U. Prompt: The city of Chicago is planning to sell the rights to all of its parking meters for 20 years to a private company. The city is planning to use a competitive bidding process with the highest bidder winning the contract. Bidders will be expected to set the prices for their parking meters and should be aware that they bear the risk of consumer demand for parking spaces and should factor that in when pricing their bids.

Additionally, the contract also requires a high-tech upgrade replacing the old coin- based meters with new machines that accept cash, credit or debit cards, which is a service enhancement that should be incorporated in the bid. How would you go about estimating it? For simplicity, we can assume that the newly installed meters will have a life of 20 years and the bidder will not be expected to change them during the period.

A few considerations include changes in population, changes in preferences consumers preferring to bike , economic activity, advancements in technology driverless cars, alternatives to parking meters, etc.

These could include variable pricing schemes e. Think MGEC! For example, the bidding company could consider launching mobile apps that would inform customers of parking availability if they are near a parking meter and would also send alerts if the time is expiring. For example, in any privatization, the public expects that the quality of service will improve. So what would be the strategy that the candidate would suggest to ensure that?

They help find, scope and drill as much oil and gas as possible for their clients — which range from major international oil companies to petrostates such as Saudi Arabia and Russia. Of late they are seeing a very high attrition rate among their Field Engineer FE population across several offices globally, the Mumbai office in India being one of the most affected.

The CEO is concerned and has asked you for advice specifically for the Mumbai office. She hopes that if the problem can be fixed in Mumbai, similar fix can be implemented everywhere else. It is indeed a matter of grave urgency for SLS. It is also more qualitative than quantitative. Leave it up to the interviewee to structure as s he wishes and give them information only if requested. Since this case is from an industry and function that people might not be familiar with, it is important to understand the context clearly before diving deeper.

If the interviewee gets stuck at any point during the case, feel free to direct them towards what needs to be evaluated. Field Engineers work with specialized oilfield equipment which they lower inside a well, and then record and analyze data to identify whether and how much oil and gas is buried in the ground. They spend a considerable amount of time working on oil rigs.

All oil rigs in Mumbai are offshore i. How is attrition rate defined? Mostly going to do Masters or moving to a completely different industry How high is the attrition rate? Business in Mumbai and the life of an FE a. What does SLS do in Mumbai? What exactly do FEs do and what is a day in the life of an FE like? Background of the FE ii. Work-Life balance ii. Relationship with Managers 2. Identifying the reasons for high attrition a.

What information to collect and how to collect it i. Face to face interviews with managers, FEs, HR etc. Anonymous questionnaires and feedback forms b. Analyze the information — potential reasons for high attrition i. Internal SLS related reasons ii.

External non-SLS related reasons 3. Recommendations for fixing attrition a. Short-term i. Team-building activities iii. Get More engineers b. Long-term i. Revamp Offshore Staffing Model ii. Hire FEs compatible with Schlumberger culture iii.

Business in Mumbai and the life of an FE Provide information if asked a. Optimal time an FE likes to spend offshore before swap is 3 wks. Ask interviewee for observations. Yes — 25 rigs for the last 5 yrs. Wait for interviewee to ask about relevant information — otherwise show this and ask for observations. This translates to 10 FEs being in the office on any given day, and 10 on vacation. If they miss this, remind them again.

Given only 2 FEs are needed in the base besides this, 14 FEs can be sent on vacation. Remember 3 wks. Interviewee should drill deeper and enquire about segmentation of this data. Exhibit 5 shows that Sr. FEs are consequently making lesser bonus — both are unhappy! Interviewee should question why this might be happening otherwise ask them. Reason is that the new risk-averse management is not confident with Jr. Recommendations for fixing attrition Interviewee should list most or all of these a.

That being said, the interviewee should still structure their thoughts, be engaging, and come up with a great final recommendation. Prompt: Our company is pitching to the President of the Salt Lake City International Airport next week, hoping to earn a big contract with the Airport moving forward.

We know that the SLC Airport is the only commercial airport for more than 2. That being said, answers should still be structured, math should still be organized and correct! Answer guide: A good answer will be structured and consider the various stakeholders of an airport i. Passengers are important because if passengers have a bad experience, they will choose to drive, take the train, or visitors simply might choose to go to Colorado to go skiing and locals might simply not travel.

This will certainly hurt the airport. The Airlines are another key stakeholder, because if they are unhappy they will fly to SLC less. This will hurt the local business and tourism economy, likely increase airfares if there are fewer flights which hurts passengers, and also lead to layoffs if there are fewer passengers.

The Airport Vendors are another important stakeholder, because they affect the passenger experience and represent local jobs. The Airport President should make sure that there are an appropriate number and variety of vendors, and similar to a shopping mall, be the intermediary between the different vendors.

A passenger is measured by a person who passes through the airport, either to board or deplane an aircraft. People who are passing through the airport on a layover switching planes are considered one passenger. Taxi drivers, Uber drivers, and people picking up their friends are not passengers.

We are only counting people who have a paid ticket to fly, not people at the airport for their job. We are considering each visit to the airport. For example, a family of four traveling roundtrip from SLC to Los Angeles for vacation would count as 8 passengers 4 when they leave and 4 when they return. Answer guide: A good answer will be structured and break down passengers into usable sub segments.

Example of an answer flights based : We know there are flights per day. Starting with residents, we know there are 2. They travel roundtrip every week probably 45 weeks per year.

The money to build both has already been accounted for through municipal bonds, so you can ignore construction costs. The first is to open a sit down restaurant in the terminal and the second is to open a lounge in the terminal.

Which of the two options would you suggest the President pursue? The decision should be based on the criteria you said was important for the President to consider in part one. No, the airport does not have either. So they are both profitable, and depending on how many passengers use the two we could say which is more profitable ie, if there is more than twice the interest in the restaurant, than the restaurant will be more profitable.

Earlier I said passenger experience is a key consideration and also airport vendors. Considering the passengers, we know the majority of passengers are their for business reasons, and business travelers would most likely prefer a premium lounge.

Considering airport vendors, while there is not a sit-down restaurant, there must be counter or take-out food vendors who would not like to see a sit-down establishment take away business, so they too would most likely prefer a lounge. It seems that a lounge is the way to go. In addition to continuing to use its traditional supply chain and manufacturing process for many of the Yermakov clothing lines, Yermakov is also introducing new, local lines of fashion. These acquired businesses exclusively use fair trade sourcing, have close relationships across their supply chain and buyer base, and in general are much smaller in size that Yermakov — the largest employee base of any of the companies being acquired is people.

These employees have deep, specialized knowledge about their industry and are passionate about local fashion and local business. This is making long-time Yermakov employees anxious, which is affecting their day-to-day performance. Yermakov has approached Deloitte Human Capital for help stabilizing their workforce and communicating a compelling change agenda.

Pro tip: The interviewee should take a moment to ask insightful clarifying questions. Then briefly summarize the case. Sample Clarifying Questions and Answers Is the other consulting firm still working with the client? For the acquired companies, did their staff have much advance It differed from company to company, but in general there usually notice of the acquisition?

What problems will you be solving? How will you break down these work steams into distinct phases assess, implement, evaluate? Pro tip: It is recommended to have three work streams. You can do more suggest no more than five , but be mindful that you have limited time to put your framework together.

Pro tip: Prioritize your work streams, and start with your most important one. What are ways to minimize these risks? Pro tip: Time to fill out your framework is limited. Pro tip: Always state your assumptions. Pro tip: Clearly state your conclusions and recommendations before you wrap up going through your framework.

Comms should be straightforward with vision, timeline Bonus points for and steps to make vision a reality. Should demo that Yermakov mgmt. I Employee engagement strategy assumed that Can include variety of approaches: more face time with senior leaders, employee professional development opportunities for employees engagement went Strike a balance between maintaining fundamental elements of down post- Yermakov culture while preserving core elements of acquired company acquisitions.

In the culture short-term I want to get back to baseline, Evaluate and post- intervention I expect Employee engagement levels pre- and post-intervention to see rates go up. Am I wrong? In Human Capital cases there many different ways to respond to the same prompt well. In this case, alternative work streams include: - Leadership alignment for example, what is the reporting structure for all the CEOs of the acquired companies? Are they still able to maintain some autonomy?

How is this affecting performance and business outcomes? If you had to prioritize one work stream, which one would it be and why? How will you minimize it? How would you deal with this aspect of the acquisition integration? This is important. Is the interviewee keeping an eye out for how to optimize business opportunities from Yermakov, and how to build a long-term relationship?

If not, prompt them to do so. If not, ask them which current trends are most relevant to the case in question. Examples include the gig economy, automation, millennial workforce expectations, etc.

If not, prompt them about this with a question. A: Very little advance notice was given to employees of acquired companies about the acquisitions, and very limited information was provided to them about how the acquisitions would affect their day-to-day work — work these employees are extremely passionate about. This created a lot of unnecessary uncertainty and anxiety. Why is this such a problem for Yermakov?

A: People are the most important asset a company has, and when people feel undervalued, they underperform and often leave the company. Yermakov just made a huge investment in acquiring companies, and in this case the human talent, networks and passion for the work are the most valuable assets they captured.

Yet, very few people at Yermakov seem to really understand what local fashion is. These same people are ambassadors of the Yermakov brand. How can this be addressed? A: This is where training comes in. The pharma industry has become increasingly competitive in recent years, with peer companies having already invested significantly in global expansion and technological advancements. In terms of age, in particular? All external International Compliance Manager hires, or also internal Recruitment strategy internal vs external promotions?

Have Hiring and training timeline you called out links between gap Evaluate analysis and ore redesign strategy? Bonus points for mentioning Implement that the training strategy Bonus points for would be piloted first, identifying before global roll-out Training and learning strategy different types of Different forms of content consumption to align with different learning content personas, employee job responsibilities, etc.

Can you pre- Work Stream 3: emptively address negative employee Technology Technology impact assessment engagement outcomes? Adoption Will CRM interface be accessible outside of office network? Costs of data migration CRM, healthcare Bonus points for Stakeholder analysis calling out potential risks to Implement your plan. How can you mitigate Technology adoption strategy — including transition plan them?

Consistent communication re: timeline, anticipated changes, learning opportunities, benefits to employees Contingency plan What key milestones will Evaluate you use to Measure employee acceptance of changes measure Usage rates, reductions in manual workarounds progress?

How will you address this? Examples include leadership succession plans, the gig economy, automation, millennial workforce expectations, etc. Is it really necessary to have so many different approaches?

In the US many of the employees are middle-aged, with a smaller number of employees in their twenties and early thirties. Research shows that people of different ages absorb content differently. Particularly in the area of technology training adoption, where people understand new procedures at platforms at different paces, some learners are comfortable learning at their own pace rather than in a classroom setting, and retain information better when they know they have a video they can always refer back to.

Additionally, with employees based in multiple countries and time zones, a multitude of training and learning options will help ensure everyone has equal access to pertinent information. What are your thoughts on this? This is essential for maintaining company culture, creating cohesion in a newly international organization, and helping to ensure a seamless transition. Extensive involvement of the HR Director will also be key.

Leadership of the European offices by formerly US executives will need to be balanced with German and French hires with senior roles in the new offices. This will ease tensions borne out of cultural differences, language barriers, lack of local knowledge, etc. Can you talk a little more about this? Employees typically get anxious when unclear changes to their healthcare benefits are looming, which negatively affects performance.

Additionally, for outsourcing to go well it will be important that employees can easily contact their new healthcare benefits manager, and that the process for doing so is clear and straightforward. Prompt: Our client is an Australian mining company, whose main product is Iron Ore, which it sells exclusively to China. This company is the largest producer in volume in this market with million tons sold each year. We estimate the total Chinese demand for Iron Ore today to be around million tons per year.

Our client has won a concession to mine a new site adjacent to its biggest mine, and increases production to million tons per year i. Is this worth doing? Board typically approves projects with payback in less than What typically constitutes success? You can use payback with no discounting for your math. How is the market expected to grow? What is the cost of this new volume of production? Are Consider this new mine to have the same exact cost as its there cost synergies or is this a more expensive mine?

Price will likely decrease from increased supply, but volume will go up. Winning effect will come out of the numbers. How will they react? Price therefore converges to the lowest possible that allows Mty demand to be met.

Also assume this has positive pay-off which gives them a real chance at pursuing such project. What should we do? Alpha engaged our firm in the due diligence process and wants us to help them understand: A. What is the team worth? Should they make this investment? We want to maximize our investment. Also assume that fund leadership is filled with avid Phillies fans who want the team to be successful How does the team make money?

Assume the city of Philadelphia owns these and we are paying annual leasing costs. Are there other potential bidders for the team? Assume there are not other bidders and we have the first shot at buying the team. Keep pushing them until they are out of ideas or have covered the topics in the tables below. Give hints as needed. If necessary, prompt the interviewer to compare this value to the asking price. If they do not bring up synergies, guide them to this topic. The candidate should spot cost synergies with sales and advertising and connect the revenue percentages to the topline revenue figure previously calculated.

These synergies increase the valuation beyond the asking price. See below for calculations on potential synergies and associated impact on the valuation. See below for some example considerations. What do you tell her? Note for Interviewer: This case hinges on the candidate realizing that revenue and cost synergies are required to make this a viable investment.

Strong math skills are required, including intuition around the synergies. The candidate could use the prompt to underpin a strong framework a pre-packaged framework will likely lead to problems.

Finally, strong candidates will continue to drive the case throughout, particularly moving from a basic financial analysis to a discussion of the other considerations.