Case Interview Frameworks Overview

Determine Key Issue(s) Develop Hypotheses Gather Data / Test Hypotheses Refine Answer Develop Options Make Recommendation

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As the interviewer describes the situation, think about what are the key issues facing general managment Develop hypotheses Decide what data you need to better understand the issues Listen to the facts Evaluate which facts are critical to the key issues Probe for more detail in critical areas Use facts and numbers appropriate in building argument Summarize options before making recommendation State pros and cons - be fact driven Make your recommendation
Kenan-Flagler Business School Consulting Club

more than one framework may be applicable  Use an appropriate framework  Do not force a framework  Be hypotheses driven  Be prepared to revise your hypotheses  Mutually Exclusive and Collectively Exhaustive (MECE)  Listen for clues from the interviewer  Accept direction from the interviewer  Display your thinking visually / graphically  Be transparent in your analysis  Leave time to summarize and make recommendations Kenan-Flagler Business School Consulting Club .Case Interview Frameworks Using Frameworks  There is no golden rule.

as long as it is logical. Kenan-Flagler Business School Consulting Club . appropriate and transparent to the interviewer.Case Interview Frameworks Some General Frameworks  The Three C’s  The Four P’s  Porter’s Five Forces (+govt.)  Supply & Demand  The Profit Equation  Internal .External  NPV Analysis Don’t be afraid to create your own framework.

Case Interview Frameworks Market Sizing Determine The Key Drivers Bottom Up or Top Down? Make Assumptions Calculate Use Round Numbers! Common sense check! Analyze Results Implications? Increasing Factors Decreasing Factors Adjust Answer Adjust Answer Kenan-Flagler Business School Consulting Club .

Writeoffs . pressure? Decrease Increase Selling Less Profitable Items .Overtime Kenan-Flagler Business School Consulting Club .Competition Higher Marg.Org. Costs .Raw Material Prices . Dysfunction .Lawsuits .Case Interview Frameworks Declining Profits What's Driving the Decline? Gather Information Analyze Using Profit Equation Revenues Expenses Price Volume Product Mix Fixed Costs Variable Costs Unusual Expenses Decreasing Comp.Market Conditions .Added Capacity? .

Economies of Scope Inventory Mgmt.Shrinkage Can we explore economies of scope with entry into adjacent industry? Kenan-Flagler Business School Consulting Club .Supply Constraints Replace w/machines .Promotion .Allocation Drivers .Substitutes New Markets .Union? Cost Acctg.Carrying Costs .Does pricing reflect Cost Competitive Environ. .Place Scale Economies /Diseconomies . .Elasticity Existing Market . .Geographic .Case Interview Frameworks Increase Profitability Revenues COGS SG&A Price Unit Volume Direct Material Direct Labor Variable O/H Price Sensitivity .

Add shifts Acquire Outsource Global Competition Consumer tastes Substitutes Kenan-Flagler Business School Consulting Club .Case Interview Frameworks Increase Capacity? Should We Increase Capacity? Market Demand Investment vs. Improvement Industry Capacity Market Trends Improve Productivity Add Capacity Competitors Plans Threats Cyclical / Seasonal Economy Bottlenecks Design for manuf.

pull? Has public image changed? Disposable income? Are diffentiated competitors stealing from us? Any new regulations restricting the use of our product and favoring substitues? Demographics of our target? Are competitors integrating into distribution and shutting us out? Are they offering our customers special incentives to switch? (particularly with substitutes) Do new substitutes exist? Kenan-Flagler Business School Consulting Club .Case Interview Frameworks Customer Turnover What Has Changed in the Following Environments? Company Customer Competition Regulatory Product Is quality sagging? Tastes changing? Are low cost competitors stealing from us? Do new tax incentives exist? Price Have sensitivities changed? Overpriced versus our competition? Place Is our distribution getting squeezed out? Are Customers Changing Channels? Promotion Are we spending? Push vs.

What do they want? . Kenan-Flagler Business School Consulting Club .How do we add value? Values/Tastes Price Sensitivity Purchasing Habits Product Place Resources to respond? Business relationships Susbsitutes Demographic changes New customers? Disposable income Mature market? Distribution channel Price Bundled product? Promotion Normal good? Cost structure Tangible Intangible Finances Distributor Vendor Customer • Given the above. is it worth making a competitive response? • How will the competition react? • Applying game theory or PARTS analysis may help.Case Interview Frameworks Competitive Response Customer .How do they choose? Competitor .Where is the competition? Company .Where are we positioned? .

Case Interview Frameworks New Product Introduction? Customer Does product met a need? Competition Is there any? Company Can we do it? Product Have we done homework? What does the segment want? Proliferation of products already? Price Have we explored sensitivity? Can we make a profit at this price? Yes No Finance Are we able to finance the launch? Should we buy an existing producer? Many Few Are there barriers to entry? Will we be first movers? Operations D0 we have capacity? Supply network? Is market growing? Promotion Push or Pull? Cost of launch? Will current promotions help? Place Is distribution aligned with customer? Are we experienced in this channel? What wil be the strategy? Low cost or Differentiated? Yes Can we beat them? Any precious resource that we own? (Ricardian rents) Can we eat the young? No Can we erect some? Marketing Will we cannibalize existing products? Is this a complement / bundled good Does it build on resources? Kenan-Flagler Business School Consulting Club .

Values / gender roles Methods of Conducting Business .Different channels Political Climate .Introductions .Case Interview Frameworks International Expansion Internal External Quantitative Doesit match our growth strategy? .ROE/ROI Cultural Differences of Customers .Instability Local Market .Flexible enough to adapt? Amount Is organization consistent with overseas 'autonomy' Economy & Exchange Rates Timing .Government contacts Educational Differences ROI / Hurdle Rate Alliance with local firm? .Weather Distribution system .Transportation infrastructure .Competition Kenan-Flagler Business School Consulting Club .Operating Discount Rate Corporate Values .Joint venture/distributor Cash Flows Can our resources succeed overseas? .Startup / disposition .Bribery Worker's conditions / child labor Seasonality .Tastes / product preferences .Size .

Inflation .Working Capital Kenan-Flagler Business School Consulting Club .Risk Adjust .Case Interview Frameworks Investment Decision Investment Decision NPV Analysis Other Factors Useful Life Cash Flows Discount Rate Strategic Fit Synergies Environmental Political Competitors Timing .Current Supply Potential Demand Size .Outflows .Risk Free Rate .Market Potential .Volatility .Missing Links of Value Chain .Opportunity Cost .Seasonality .Inflation Demand Cycle Stability Regulation .

Management Hard Issues .Culture/Fit .Balance Sheet Kenan-Flagler Business School Consulting Club .Case Interview Frameworks Company Acquisition Understand Purpose Diversification? Gain Market Share? Geographic Expansion? Analyze Opportunity Internal Factors External Factors Strategic Objective Strengths & Weaknesses Industry Attractiveness Identify Acquisition Candidates Resources Acquisition Fit Porter's Five Forces Three C's Soft Issues .Price .

Buy Back Stock Cultural Fit Yes Then Buy Back Stock to Raise Stock Price No Can We Release Good News to Raise Stock Price? Kenan-Flagler Business School Consulting Club ...Case Interview Frameworks Hostile Takeover Defense Two Options Both Designed to Raise the Value of the Company Self-Help White Knight Are We Highly Levered? (Relative to the Industry) Classic M&A Is there a Firm That. Yes No Has Financial Strength Strategic Compatability Do We Have Cash? Issue Debt.

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