Where To Play & How To Win (!

)
Case Interview Guide
By Nebula
Version - 2012
What to do at the start of a case?

DON’T
PANIC (In Large Friendly Letters)
 Seriously.
Don’t Panic.
 Getting Through A Case Interview
• Take a moment and see if you understood the case correctly:
o Verify facts you think you might have missed
o Ask for clarifications and clear any ambiguities (“When you say telecom company,
are they a service provider or are they in the hardware business?”)
• Ask the interviewer for a couple of minutes to collect your thoughts (You can actually tell the
interviewer “I’ll take a couple of minutes to collet my thoughts”)
• WRITE down a structure you can follow to analyze the case; but remember to modify any
structure to suit the case given to you. A cookie-cutter approach doesn’t work!
• Proceed with the analysis of the case – ask for inputs from the interviewer wherever
necessary and you can check if your assumptions make sense as well. (Don’t overdo it
though!)
• It is important to have a recommendation at the end of the analysis on what the company
should do next. Be sure you can justify what your are recommending to the client at the end.
• Communicating your thoughts/analyses is important, so keep it simple. Fancy words and
complicated jargon do not make of good analysis.
• Last and most important – Enjoy the process 
Case Study Methodologies
• Profitability

• Growth

• Market Entry

• M&A
 Profitability

Profit = Revenues
- Costs
 Profitability : Revenues [1/2]
Variety x Value (Price)
• Understand the product mix
offered by the company
• Understand the different target
segments that the different
products of the company cater to
Competitive Response
• Determine the Supply-Demand in the
market for the product, and see the
flexibility the company has to change
prices
• Construct a pay-off matrix to
determine the best course of action
that a company should follow given
different responses by competitors to
changes in price by a company
x Volume
• Check if product is competitively priced,
Competition if not try and understand the reason
behind why it is priced differently
• Check the margins the product is
making based on the cost incurred in
Cost + manufacturing the product
•Check for recent changes in the cost
structure which might impact this sort of
pricing
• Product should be priced according to
the value a customer derives from the
product
Value Based • Different companies are increasingly
adopting this method of pricing, it is
critical for the company to correctly
communicate to its customers the value
they offer, else price will not be accepted
 Profitability : Revenues [2/2]
Variety x Value (Price) x Volume

Market x Market Share

• Determine size and growth of
the market (past growth as well Market Position Segmentation Buying Process
as future growth)
• Understand the macro-trends • Understand the market 1. Product 1. Want generation
in the market and how they will position of the player 2. Geography 2. Information search
influence the market in the • Determine the power a 3. Demographics 3. Evaluation
future (includes megatrends) player has in the market 4. Occasion / Place of 4. Purchase
• Broadly use Porter’s 5 Forces Consumption 5. Post-purchase
• Customers evaluation
• Suppliers
• Competitors
• Substitutes
Product Price Promotion Place
• Entry Barriers
• Brand • As determined • Advertising • Types of
• Understand PESTLE scenario • Quality of the earlier (B2C) distribution
– Political, Economical, Social, product • Also check for • Trade Discounts channels
Technological, Legal and • Competitive the signalling of (B2B) • Check
Environmental factors advantage quality by the • Must ensure Availability,
• Packaging price (luxury both medium and Visibility and
(SKU) and products have to message are Freshness
Imaging on the priced at a correct
product premium)
 Profitability : Costs
Fixed Costs
• Machinery – depreciation • Marketing costs – advertising
• Administrative costs • Capital structure – Debt vs. Equity
• Rent – factories and corporate office • Technology – change and up gradation

Variable Costs
Flow of Material
Manufacturer Distributors & Retailers Customers

Raw Post-Sales
Labour Energy Inventory Packaging Distribution Margins Discounts
Material Service
•Cost of Raw • Non- •Fuel – petrol, •Storage costs •Smaller •Warehousing •Given to •Trade •Installation
Material itself managerial diesel, coal, – better packaging – rationalize wholesaler discounts •Maintenance
– use staff natural gas forecasting can reduce warehouses and retailers – •Discounts •Spare parts
alternatives •Electricity – needed costs and can •Transportatio operate own given to
•Labour
•Transportatio captive, transport n – rationalize points of sale customers
more at a time points of sale •Replacement
n and Storage bought
(warranties)
costs

Flow of Information
• Profitability

• Growth

• Market Entry

• M&A
 Growth
• Understand the reason why the company is seeking new avenues of growth; may include -
Objective Hedging risks, Current market declining , Attractive opportunity in other markets, Eroding market
share, etc.

PRODUCT
New Old
• Introduce new products which are adjacent to • Variety – Expand • Place – Increase
existing products or complementary to existing product lines where product is sold
products • Value – Change • Product – sell more
• Adjacent – You sell Washing machines, pricing; make same stuff
Old

customer spend more

start selling other home appliances • Promotion – advertise
(new uses)
• Complementary – You sell shaving razors, to increase sales
• Volume – Increased
introduce aftershave volume within segment
• Upgrade existing product and package as a new
MARKET

product – ‘new and improved’
• Diversification – Vertical and Horizontal
integration
• Vertical integration – Buy players in your
value chain (suppliers, distributors)
New
or in new segments
(gain market share)
• Enter new geographies – try and enter
geographies which are similar to the ‘old market’
• Target new segments for the same product
• Always adapt the new product to suit the market it

• Horizontal integration – Buy out is introduced in

competitors

• Each of the above options has its own way of implementation, also its important to consider
How? acquisition as a way of growth in each of the above options
• Profitability

• Growth

• Market Entry

• M&A
 Market Entry
•Recommend whether to enter a given market, product or geographic; may include – industry/market
Objective attractiveness, consumer behaviour, operational requirements

Step 1: Strategic •Why do you want to enter?

Fit •Does it fit in with long term strategy of the firm?

Understand the Market: Market size? Growth?

Typical Margins? Present trends?

Competition Analysis: Size and number of major OR

Step by Step
competitors, present or future

Understand Customer:
Step 2: Market
• Who is the customer (Segment) ?
Attractiveness • Will he buy my product? - Value proposition I
have to offer
• What are the substitutes for my offering?
Entry Barriers:
• Suppliers • Distribution • Regulations
• Capital • IPR • Economies of
Scale

1 2 3
Start from
How? JV Acquire
scratch
• Profitability

• Growth

• Market Entry

• M&A
 M&A
•What are your goals and objectives for doing the M&A ?
Why? •Possible reasons - Growth, access to technology, diversification, market access, pre-empt
competition, synergies (cost, distribution network – economies of scale and scope)

Market • Especially important if it is an acquisition in a new geography or acquiring a company in a new

Analysis category
• Follow steps of Market Entry

• Context – Conduct a market analysis (5 Forces usually works well) and figure out the PESTLE
scenario (Political, Economical, Social, Technological, Legal and Environmental factors)
Target
• Company – Capabilities of the company need to be understood Eg. Manufacturing processes, new
Company technologies, R&D, Marketing, Sales and Distribution, etc.
Analysis • Customer
Refer Market Entry
• Competition

• What is the company being valued at?

How Much? • How is the valuation being done? What are the intangibles (Eg. Brand reputation) being valued at?
Comparable ratios or DCF or any other? (NOT expected to know the nitty-gritties of valuation,
however helps if you know the basics

• Can the company afford the acquisition? How can the acquisition be financed?
Can I Do It? • Post-merger integration – Roles of senior management in both companies? Cost synergies?
Integrate cultures?
 Who Is Nebula?

A few PGP-2s trying to help

Ritesh Agarwal Pushkar Aggarwal Sudhanva Rao M.

Summer Internship – BCG Summer Internship – Bain Summer Internship – BCG
End of Document