Crack the Case 2010

David Ohrvall, Founder

MBACASE MBACASE
Crack the Case agenda g
Overview &
Core Skills
Practice
Structures &
Techniques
Practice
Integrated
Thinking
875 minutes
8Overview
845 minutes
8Video highlights
860 minutes
81 mini-business case
8CLASSIC skills
8Market sizing cases
8Case Path structure
8FRAME & MVM
81 full business case
15 min.
2
David Ohrvall
3
i i participate
think big picture think big picture
be serious be serious,
have fun
4
CASES are EVERYWHERE
Consulting Finance
iStrategy/ IT/ Operations
iMarket entry
iProfit maximization
iM&A transactions
iPrivate equity buy-outs
iBusiness sell offs iProfit maximization
iDeclining market
iOrganizational redesign
iBusiness sell-offs
iTime value of money
g g
Marketing Industry Marketing
iNew product
iLagging product
Industry
iAirlines
iHealth care
iNew industry
iBranding remedies
iInternet / telecomm
iInternal strategy
5
What What
the
world
sees
What
you are
made of
6
What do cases really test?
C L A SS IC
Communication
C
Logic
L
Analytical
A
Social Skills
SS
Integration &
Creativity
IC
Which skills matter?
Market
Sizing
Mini
Business
Full
Business
Pre & Post
Behavioral
g
&
Estimation
Business
Case
Business
Case
Interview
Questions
C L A SS IC
Communication
C
Logic
L
Analytical
A
Social Skills
SS
Integration &
Creativity
IC
Be answer first!
Answer First
C L A SS IC
Communication
C
Logic
L
Analytical
A
Social Skills
SS
Integration &
Creativity
IC
Show breadth and depth
Breadth
Depth
C L A SS IC
Communication
C
Logic
L
Analytical
A
Social Skills
SS
Integration &
Creativity
IC
Our client wants to open a chocolate store.
Time
Financial
Goals
Competitors
Product
Quality
Distribution
p
Goals Quality
Short Term
id
Break Even
O
Boutiques
Gif Sh
Organic
C
Central
i l Mid Term
Long Term
ROI
Profit Margin
Gift Shops
Ice Cream
Cocoa
Consistency
Regional
Does our What is our Do you have What are the Will we Does our
client have a
deadline ?
What is our
ROI goal?
Do you have
data on
competitors?
What are the
product
standards?
Will we
make on site
or distribute
it?
11
Build a data foundation
Comfort
Scale
Accuracyy
Estimating
C L A SS IC
Communication
C
Logic
L
Analytical
A
Social Skills
SS
Integration &
Creativity
IC
Estimate first
Towels Unlimited Inc.
$ #
%
Sales are $.5B. Profit margin is
30%. Profit may have fallen 30%.
Candidates must be able
to manipulate simple
b
%
numbers.
Total
Rev
Total
Costs
Total
Profit
$
Goals
$500M $350M $150M
Stop the
Bleeding!
100% 70% 30% $45M
~10% Rev
When asked, they
should be ready to go
into detail.
simple equations
break even analysis
reading charts and data
13
Be client ready
Work toward Work toward,
consistent
normal
pre and post p p
interview skills
C L A SS IC
Communication
C
Logic
L
Analytical
A
Social Skills
SS
Integration &
Creativity
IC
Save your creativity
Pull together
facts and data
Develop
interesting and
quickly
g
applicable
solutions
Creativity! Creativity!
C L A SS IC
Communication
C
Logic
L
Analytical
A
Social Skills
SS
Integration &
Creativity
IC
2
1 Breadth and depth should be 1. Breadth and depth should be
your highest practice priorities
2. Analytical skills pick-up quickly
3. Frequent practice and wide
exposure are most important
for integration and creativity
16
2
Homework
1 Read Business Week 1. Read Business Week
(or other business magazine)
2. Assess a story:
- whats the main issue?
- write down issues to consider
- write out questions you have
- list data you need to solve
17
Lets do a case!
Market
Sizing
Mini
Business
Full
Business
Pre & Post
Behavioral
g
&
Estimation
Business
Case
Business
Case
Interview
Questions
Communication
C
Logic
L
Analytical
A
Social Skills
SS
Integration &
IC
Communication Logic Analytical Social Skills Integration &
Creativity
You need to SPEAK
M k t Si i / E ti ti C Market Sizing/ Estimation Cases
Counting
# of toothbrushes sold regularly g y
Measuring
How many square feet of
windows are in Seattle windows are in Seattle
Usage
How fast do consumers go g
through a bottle of hair spray?
Communicate your comfort with
numbers, ambiguity and logic
19
SPEAK is a guide
tate your assumptions
S
P
ti t i kl ith d #
ick your metrics
P
E
stimate quickly with round #s
h d
E
A
eep exceptions and next steps in mind
ssess your approach and answer
K
A
eep exceptions and next steps in mind
K
20
How much shampoo do people use
in a downtown hotel each day? in a downtown hotel each day?
tate your assumptions
S
iWe are counting hotel supplied shampoo only
iDowntown hotels have 20 floors
iShampoo bottles from the hotel are 1 ounce
i15 rooms per floor
i75% average occupancy i75% average occupancy
iCustomers open 1 bottle per day
21
ick your metrics
P
iOunces or units of product used
iOthers include:
iPopulation Dont use this one every time
iObservation (people entering a store)
iTime iTime
iDistance
iGeography
22
stimate quickly and with round #s
E
i20 floors x 15 rooms = 300 rooms
i300 rooms x 75% occupancy = 225
i225 x 1 oz bottles = 225 ounces per day
23
ssess your approach and answer
A
i225 ounces = 28, 8 oz bottles (visually makes
sense)
iV i l h iVery simple approach
iHow else could you have approached it?
24
eep exceptions and next steps in mind
K
i60% of people use hotel shampoo
i225 x 60% = 135 ounces (divide for bottles)
iSome people take extra bottles from hotel
iFloor lay-out may vary
iNext steps: iNext steps:
iLook into wall mounted pumps (no waste)
iSurvey customers to understand needs
iConsider 2 sizes of bottles
25
Market Sizing Practice
iPractice with a partner Practice with a partner
i1 person gives the case using the
answer keyy
i1 person receives the case using
white paper
iTake about 10 minutes for each case
iTrack areas where you need to improve Track areas where you need to improve
26
3
1 Market sizing cases will test your 1. Market sizing cases will test your
communication and analytics
2. Use SPEAK as a guideline at first
3. Be ready to analyze the problem
with different approaches
27
3
Homework
1 Find some market sizing cases 1. Find some market sizing cases
2. Practice using SPEAK to get 2. Practice using SPEAK to get
yourself warmed up
3. Speak out loud for all your work
4. Try your own style over time and
practice solving the same case
diff t
28
different ways
Todays workplan y p
Overview &
Core Skills
Practice
Structures &
Techniques
Practice
Integrated
Thinking
875 minutes
8Overview
845 minutes
8Video highlights
860 minutes
81 mini-business case
8CLASSIC skills
8Market sizing cases
8Case Path structure
8FRAME & MVM
81 full business case
15 min.
29
Business cases are the
most common
Merge, Acquire, JV
Strategy
Maximize Profit
Ops & Org
Competitor Attack
External Forces

g , q ,
Growth Strategy Change Price
p
Market Shift

New Product/ Bus

New Market (Geo)
New Processes
Restructure Team

Most cases follow a similar

pattern
30
pattern
MBACASE Path: Most any case you
receive will follow this flow receive will follow this flow
Qualitative
I t ti &
Start
Warm-up
I ntegration &
Creativity
Warmth &
Client Ready
So what?
Logic &
Breadth
Data
End
So what?
Insight!
Quantitative
Depth &
A l i l
Insight!
Chart/
Data
Dump
E ti t
Analytical
C a t/
Table
Dump
Estimate
Equations
Solve
for X
31
Meet Shari & Sameer
To watch this video go to
www.mbacase.com. Click on
the image of David holding the
slide. Go to Video 3.
Interviewer
Shari Rogge-Fidler, ex-BCG
MBACASE coach
(calm, pointed, analytical)
Candidate
Sameer
(eager, analytical, suffers
from some SSdisorders)
1 - Transition
Qualitative
I t ti &
Start
Warm-up
I ntegration &
Creativity
4
Warmth &
Client Ready
Logic &
Breadth
Data
5
So what?
End
Insight!
Quantitative
1 2
Depth &
A l ti
So what?
Insight!
Chart/
Data
Dump
E ti t
Analytics
3
C a t/
Table
Dump
Estimate
Equations
Solve
for X
1 - Transition
2 & 3 Question & Recap
Qualitative
I t ti &
Start
Warm-up
I ntegration &
Creativity
4
Warmth &
Client Ready
Logic &
Breadth
Data
5
So what?
End
Insight!
Quantitative
1 2
Depth &
A l ti
So what?
Insight!
Chart/
Data
Dump
E ti t
Analytics
3
C a t/
Table
Dump
Estimate
Equations
Solve
for X
2 Question
3 - Recap
4 & 5 Initial data & plan
Qualitative
I t ti &
Start
Warm-up
I ntegration &
Creativity
4
Warmth &
Client Ready
Logic &
Breadth
Data
5
So what?
End
Insight!
Quantitative
1 2
Depth &
A l ti
So what?
Insight!
Chart/
Data
Dump
E ti t
Analytics
3
C a t/
Table
Dump
Estimate
Equations
Solve
for X
4 Initial data
5 - Plan
6,7 & 8 Shari pushback
Qualitative
I t ti &
Start
Warm-up
I ntegration &
Creativity
4
Warmth &
Client Ready
Logic &
Breadth
Data
5
So what?
End
Insight!
Quantitative
1 2
Depth &
A l ti
So what?
Insight!
Chart/
Data
Dump
E ti t
Analytics
3
C a t/
Table
Dump
Estimate
Equations
Solve
for X
6 Data?
7 Plan?
8 What do you mean?
9 Diving into data
Qualitative
I t ti &
Start
Warm-up
I ntegration &
Creativity
4
Warmth &
Client Ready
Logic &
Breadth
Data
5
So what?
End
Insight!
Quantitative
1 2
Depth &
A l ti
So what?
Insight!
Chart/
Data
Dump
E ti t
Analytics
3
C a t/
Table
Dump
Estimate
Equations
Solve
for X
9 Diving into data
10, 11, 12 Integration
Qualitative
I t ti &
Start
Warm-up
I ntegration &
Creativity
4
Warmth &
Client Ready
Logic &
Breadth
Data
5
So what?
End
Insight!
Quantitative
1 2
Depth &
A l ti
So what?
Insight!
Chart/
Data
Dump
E ti t
Analytics
3
C a t/
Table
Dump
Estimate
Equations
Solve
for X
10 Integrate & End
11 Wrap up
12 Get practical
13 Wrap up
Qualitative
I t ti &
Start
Warm-up
I ntegration &
Creativity
4
Warmth &
Client Ready
Logic &
Breadth
Data
5
So what?
End
Insight!
Quantitative
1 2
Depth &
A l ti
So what?
Insight!
Chart/
Data
Dump
E ti t
Analytics
3
C a t/
Table
Dump
Estimate
Equations
Solve
for X
13 Wrap up
4
1 Expect to be put on 1. Expect to be put on
the spot and challenged
2. Use the interviewers
ti t h questions as a way to show
confidence
3. Structure and data are used
53
at every step
4
Homework
1 Make a list of the worst 1. Make a list of the worst
questions an interviewer
could ask you could ask you
2. Lay out answers y
3. Lay out tactics. Where would you
move the discussion? What data
would you ask for?
54
MBACASE Path: Most any case you
receive will follow this flow receive will follow this flow
Qualitative
I t ti &
F R A
Start
Warm-up
I ntegration &
Creativity
F R A
E
Warmth &
Client Ready
So what?
Logic &
Breadth
Data
End
So what?
Insight!
Quantitative
Depth &
A l i l
Insight!
Chart/
Data
Dump
E ti t
Analytical
M
C a t/
Table
Dump
Estimate
Equations
Solve
for X
55
The FRAME Method
consists of 5 skills you need to build co s s s o 5 s s you eed o u d
orm a Plan
F
ead Your Audience
R
nchor a Hypothesis
A
ine for Data
M
nd the Case!
E
56
The FRAME Method
consists of 5 skills you need to build co s s s o 5 s s you eed o u d
orm a Plan
F
Listen & take notes
Group your thoughts
Think holisticallyy
Present your plan Present your plan
57
Listen & take notes
iUse only 2-3 loose pieces of paper Use only 2 3 loose pieces of paper
iWrite the bare minimum think white board
Prepare to show your work
Develop a consistent system youll use every time
Use your notes!
58
Develop your own consistent approach
Facts
Plan
Data Data
59
Whats your objective
with every case?
M i i th V l Maximize the Value
of the Company p y
60
Develop an integrated mental map
Maximum Value Model (MVM) a u a ue ode ( )
E
C I
A
Z 5
S
P
E
C I
A
L
T
Zone 4
Zone 5
Organization
Finance
Zone 2
Zone 3
Zone 4
Strategy
Operations
Zone 1
People
Systems
.
CA$H
R
Volume
Mix
Price
Systems
Processes
Measure
D/E
C
Price
Fixed
Variable
Customer
61
Waterfall each zone adds value
Zone 4
Zone 2
Zone 3
Zone 4
Zone 1
62
Strategy increase, change, shrink
Zone 4
Zone 2
Zone 3
Zone 4
Strategy
Zone 1
63
Operations revenue and cost
Zone 4
Zone 2
Zone 3
Zone 4
Strategy
Operations
Zone 1
R
Volume
Mix
Price
C
Price
Fixed
Variable
Customer
64
Organization people, systems,
processes and measurement p o esses a d easu e e
Zone 4
Organization
Zone 2
Zone 3
Zone 4
Strategy
Operations
Zone 1
People
Systems
.
R
Volume
Mix
Price
Systems
Processes
Measure
C
Price
Fixed
Variable
Customer
65
Finance cash, debt, equity
Zone 4
Organization
Finance
Zone 2
Zone 3
Zone 4
Strategy
Operations
Zone 1
People
Systems
.
CA$H
R
Volume
Mix
Price
Systems
Processes
Measure
D/E
C
Price
Fixed
Variable
Customer
66
External Forces
E
C I
A
Z 5
S
P
E
C I
A
L
T
Zone 5
Suppliers
Public
Technology
Legal
Economy
g
Auditing
Competitors Industry
67
Maximum Value Model (MVM)
E
C I
A
Z 5
S
P
E
C I
A
L
T
Zone 4
Zone 5
Organization
Finance
Zone 2
Zone 3
Zone 4
Strategy
Operations
Zone 1
R
Volume
Mix
Price
People
Systems
.
CA$H
C
Price
Fixed
Variable
Systems
Processes
Measure
D/E
Customer
68
The FRAME Method
consists of 5 skills you need to build co s s s o 5 s s you eed o u d
orm a Plan
F
Listen & take notes
Group your thoughts

Think holistically

y
Present your plan Present your plan
69
Use your plan to connect and explain
Plan
Main Idea
Facts
Plan
Group A Group B Group C Group D
Why?
?
Data
Data?
Questions?
Data
70
Use your plan to connect and explain
Plan
Facts
Plan
R
P
issue
driver
R
V
driver
Data
TT
VC
Data
C
VC
FC
71
Always Fresh (www.mbacase.com)
iSubsidiary of $30B consumer products conglomerate y $ p g
iSuccessful line of deodorant/anti-perspirant spray, roll-on and
stick
iTeam is ready to go abroad and youre the team leader iTeam is ready to go abroad and you re the team leader
iIs international expansion a good idea? Which countries
are best?
How do I start in a simple p
and common sense way?
72
Move through your mental map
E
C I
A
Z 5
S
P
E
C I
A
L
T
Zone 4
Zone 5
3
Organization
Finance
Zone 2
Zone 3
Zone 4
Strategy
Operations
Zone 1
People
Systems
.
CA$H
2
4
1 R
Volume
Mix
Price
Systems
Processes
Measure
D/E
2
C
Price
Fixed
Variable
Customer
73
Lay out your notes and be ready to share
Always Fresh
Go international
stick/spray/roll-on
which market?
Go international?
Go/ No Go
Strategic Revenue Compet Organiz
R
C
$30B conglom
Why?
l ?
Wheres
demand?
Response?

history?
i
C
Goals?
Other prod
launches?
Estimate
V & P
Presence
by country
org in
place by
country?
TT
Goals
launches?
74
Read your audience at all times
iNote his or her style Note his or her style
- Chatty Charlie vs. Data Maam vs. Silent Partner
iExpect changes in style throughout the interview
- Relaxed to intense to relaxed again is common
iRespond!
Stay nimble: speed up slow down listen intently - Stay nimble: speed up, slow down, listen intently
- Track with the interviewer at all times
75
Anchor a hypothesis
iThis approach speeds up your thinking This approach speeds up your thinking
iPut a mental stake in the ground on what you
think solve to prove or disprove it p p
iYou do not have to state your hypothesis!
issue
Main Question
R
P
V
issue
driver
A
Why?
B C D
T
V
VC
y
Data?
Q ti ?
C
VC
FC
76
Questions?
Where would you like to go first?
Always Fresh
Previous
Go international
stick/spray/roll-on
which market?
Go international?
Previous
experience
with team and
distribution is
Go/ No Go
Strategic Revenue Compet Organiz
distribution is
vital
R
C
$30B conglom
Why?
l ?
Wheres
demand?
Response?

history?
i
C
Goals?
Other prod
launches?
Estimate
V & P
Presence
by country
org in
place by
country?
High demand is
the key to
finding the
P d t i
TT
Goals
launches?
g
right market
Product is
differentiable;
can take
competitors
77
competitors
share
Mine for an answer (find data!)
Demand exists
and can be
ti t d
Product is
differentiable
Team
support is
iDo people iWhat is
estimated
differentiable support is
vital
iIs the team p p
want this
product?
iDemand by
country?
unique about
product?
iHow can we
differentiate?
in place? Do
we have
experience?
iHow will we country?
iPrice?
iWhere is
there growth?
differentiate?
iHistorical
competitor
response?
iHow will we
sell and
distribute the
product?
i i i
there growth?
iFinancing in
place?
Find specific answers to your questions
78
Mine for an answer (continued)
Big markets: Brazil Japan and Germany Big markets: Brazil, Japan and Germany
Price differentiation: Spray is higher
B il d J f t d h i Brazil and Japan are fragmented, share gains are
possible
No deodorant type is dominant by country
Entering all three countries will bring in annual
revenue of $183M
79
End the case!
iPlan the end long before the time is up Plan the end long before the time is up
iBe concise and answer the main question q
iTie data to your recommendations dont
answer just from your gut!
80
The FRAME Method
orm a Plan
F
ead Your Audience
R
nchor a Hypothesis
A
ine for Data
M
nd the Case!
E
81
6
1 FRAME will help you pinpoint 1. FRAME will help you pinpoint
your weaknesses
2. Anchoring a hypothesis helps
you focus and speed up. You y p p
dont have to say it.
3. Mining for data and answers
requires you to own the
bl
82
problem.
6
Homework
1 Practice a few cases and then 1. Practice a few cases and then
assess your performance
using the FRAME structure. Where using the FRAME structure. Where
did you have trouble?
2. Download Always Fresh and do the
full case with a partner (2x).
83
Todays workplan y p
Overview &
Core Skills
Practice
Structures &
Techniques
Practice
Integrated
Thinking
875 minutes
8Overview
845 minutes
8Video highlights
860 minutes
81 mini-business case
8CLASSIC skills
8Market sizing cases
8Case Path structure
8FRAME & MVM
81 full business case
15 min.
84
Crack the Case 2010
David Ohrvall, Founder
MBACASE MBACASE