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Case Interviews
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Case interviews
Our sample cases are based on past McKinsey case interviews to ensure you train
with the most realistic material possible. Here are a few tips to make the most of
them:
1. No calculator
If you are practicing by yourself, you should both play the role of the interviewer
and of the interviewee and you should speak out loud. This might sound a little odd
but candidates who force themselves to use this technique are progressing much
faster than others because it better reproduces the conditions of the interview.
After completing the case, you should study the answer key in details. You need to
pay attention both to the content of the answers and to the way it is communicated.
Most candidates are only focused on the content and whether they got to the right
answer. But in reality, your interviewer will also evaluate you on how you
communicate. Do not hesitate to repeat parts of the answer out loud. This will help
you develop a habit of communicating in a structured way.
Finally, do the cases multiple times. You might think that you will remember the
answers, but if you wait a couple of days you probably won’t remember them very
Doing cases a second time will enable you to keep track of your progress and to
double check that you are not making the same mistakes twice. We also
recommend that you keep a notebook where you write down what you've learned
at the end of each case. You can then refer back to it when you do a case for the
second time.
Finally, we are here to answer any of your questions, so if you get stuck trying to
understand the explanations in the answer key, just drop us a line
at: support@igotanoffer.com. We’ll be happy to fill any gaps!
1. Situation
The CEO is considering entering a new market with a device called the Gloucoskov.
People who suffer from diabetes can use this device at home in order to monitor
their glucose levels. The device will be priced at $120 and customers will also have
to purchase disposable paper stripes.
2. Framework development
What areas would you investigate to determine whether Meditech should enter this
new market?
Question 3.a.
Meditech wants your team to investigate if the UK could be a good market for the
Gloucoskov. What is the size of the UK market for this new product today, in two
years and in four years? Assume the price of the device will drop by 33% and 45% of
the initial price within two and four years respectively.
Question 3.b.
Your team has collected information about Meditech’s competitors in the UK. This
information is presented in the table below:
What are some of the insights you can draw from this table and how could they
affect Meditech’s decision to enter the new market?
4. Creativity question
What are some of the things Meditech could do to make selling the Gloucoskov
devices more profitable?
5. Recommendation
After eight weeks of rigorous analysis it is time for your team to present its findings
to Meditech’s CEO. What would you tell the CEO?
1. Situation
To play back the company situation, you should summarise what your interviewer
told you. This will enable you to avoid any misunderstandings. In addition, you
could also ask follow up questions that will help you get a better grip on the
situation. For instance, you could ask:
• Does Meditech design, manufacture and distribute the Gloucoskov devices?
Or does it outsource any parts of the process?
• Is the product ready to be launched or is still under development?
• Does Meditech plan to launch the product worldwide or in a specific
geography?
Prior to diving into the framework question, it is also advisable to further define the
objective of the case. Examples of questions you could ask include:
• I understand the CEO wants to increase profitability. Do we know by how
much and by when he wants to increase profitability?
• I understand the CEO wants us to focus on new markets. Can you confirm
there aren’t any other devices than the Gloucoskov he wants us to analyse?
2. Framework development
In this situation, the main elements that can be extracted from the case question
and situation include:
A. Market profitability
1. Revenue
a. Number of units sold: What is the market size for diabetes devices?
Who are the biggest competitors in the market? What can Meditech do
to capture a high market share?
b. Price: Are customers willing to pay $120 for the device? Does this price
enable Meditech to recover its costs? How much does the competition
charge for similar devices?
2. Costs
a. Upfront costs: Could Meditech acquire a company to get into this new
market quicker?
b. Fixed costs: How much is Meditech expected to spend to develop its
Gloucoskov devices? Does Meditech need a new manufacturing unit
for its Gloucoskov devices?
c. Variable costs: How high are raw materials and labour costs to
manufacture the Gloucoskov device? Can Meditech take advantage of
its existing assets in order to reduce variable costs (i.e. use the same
distribution channels)?
B. Regulation
1. Regulatory approvals: Does Meditech need regulatory approvals to launch
the Gloucoskov? What are the different approvals required and the chances
of success for each approval?
2. Technology standards: Are there technological standards that Meditech
needs to respect to obtain certain certifications (E.g.: ISO)?
Question 3.a.
If a plan does not come to you naturally when trying to answer the question, it is ok
to ask your interviewer for a few seconds to gather your thoughts.
Here is a potential plan you could have shown to your interviewer for this specific
question:
1. Estimate number of people with diabetes in the UK
2. Estimate number of monitoring devices sold per year
3. Estimate market value today, in two years and in four years
Let’s now do the calculations and simplify the numbers when possible:
Once you found the answer to the maths question, you need to:
• Relate the result back to the broader case question
• Suggest next steps in the analysis
In this case, the size of the market seems to be falling rapidly. If our price
assumptions are correct, it will almost halve in 4 years. This suggests the market is
not very attractive for Meditech unless it manages to decrease its production costs
as rapidly as the price falls. A potential next step could be to analyse where this
price reduction comes from and if it is due to intense competition in the market.
Assumptions
You need to make assumptions to answer this question (e.g. percentage of
diabetes sufferers in each age group). These assumptions should be anchored to
some sort of argument whenever possible (e.g. older people are more likely to
have diabetes).
Before actually diving in the calculation, you should check whether your
interviewer is ok with your assumptions or not. The easiest way to do this is
through eye contact. If you look at your interviewer you will quickly realise if he
agrees with the assumption you have just made or not.
Rounding up / down
You can round numbers up or down to make your calculations easier within
reason. A good rule of thumb is that you should not round numbers up or down
by more than 10%. As you do this you should keep an eye on your interviewers’
reactions to make sure he is comfortable with your estimates
Question 3.b.
At the start of a data interpretation question, you need to make sure you
understand the headers, axes and units of the graphs you will be interpreting.
Whenever possible, you should read tables horizontally first and focus on
extracting trends from the totals. You can then switch to reading the table vertically
to extract complimentary insights.
Here are some insights that can be extracted by reading the table horizontally:
• First of all, looking at the total market size we notice that the market has
more than doubled over the past four years. That being said, growth has
slowed down over the past two years
The following trends can also be extracted by reading the table vertically:
• Four years ago, four big players of similar sizes accounted for approximately
60% of the market. The remaining 40% was probably distributed among
many smaller companies
• Three years ago, companies A and B started to clearly grow market share vs.
the rest of the competition. Today companies A and B account for about 55%
of the market. This high market concentration could raise barriers to entry
for Meditech
The information provided also indicates that Meditech intends to achieve a pay
back of five years for its investment. The number of devices that needs to be sold to
break even in five years can be calculated as follows:
Once you have analysed the data at hand you need to:
Here, Meditech needs to sell 375k units over five years and therefore 75k units on
average every year for five years to break even. The UK total market size is about
100k according to the previous question. It is therefore unrealistic for Meditech to
break even in five years by entering the UK market, as it will need to capture 75% of
the market. If Meditech wants to enter the UK market it therefore needs to lower
the cost of its Gloucoskov device to be able to break even with a lower market. This
could be the next area we focus.
4. Creativity question
In this case, we can think of two areas to make the Gloucoskov more profitable:
In this case, it could make sense to start by exploring ways to increase revenue, as
an important jump in profitability seems to be needed. This jump in profitability is
less likely to come from the cost side where improvements are usually incremental.
One risk the bear in mind as we explore ways to increase revenue is that some of
the ideas we listed involve upfront costs that will further decrease profitability in
the short-term.
5. Recommendation
The initial analysis indicates that Meditech should not enter the UK home-kit
diabetes market for the following reasons:
1. It needs to capture virtually the whole market to break even in five years
which is not realistic
2. The value of the home-kit diabetes market seems to be plateauing making
suggesting that competition is likely to be increasingly fierce over time
3. There are already two big players in the market (companies A and B) and it
will be difficult for a new player like Meditech to take a large share of the
market away from them
However, there are further areas that could be explored to solve Meditech’s
profitability issue:
Note that in most cases, there is no right or wrong conclusion. As long as you
follow the method above and give a good rational for your conclusion, your
interviewer will accept it.
Outlining next steps is important. This is something all consultants do at the end
of projects to sell on the next project. Including that in your conclusion will show
your interviewer that you are aware of how actual projects work!
1. Situation
Alset is the 3rd largest automotive company in the world. Alset has recently been
experiencing a decline in profitability in the SUV (Sports Utility Vehicle) category. Its
CEO wants to identify the reasons behind this decline and bring the profit margin of
the SUV category back to where it was two years ago.
Note: SUVs are large 4 by 4 vehicles originally designed to drive in the mountain or
forest. Customers in urban areas have also adopted them.
2. Framework development
What are the areas you would look at to identify the reasons for the profit margin
decline in the SUV category?
Question 3.a.
The CEO believes that one of the reasons for the decline in Alset’s profit margin is
the growth in manufacturing costs. He asked your team to look into each
manufacturing facility to verify his hypothesis.
Oldcastle,
1,550
Reeds, 2,800
Perminton,
2 000
Northampton,
1,400
Nacaster, 800
Question 3.b.
A group of analysts from your team collected the data below regarding the cost per
SUV of Alset’s competitors and the total cost for each company for 2015. What are
some of the insights that can be concluded from the data?
6,000
4,000
2,000
0
Panther WMB Alset Ronda Gexus Nord
4. Creativity question
5. Recommendation
Alset’s CEO is meeting your team tomorrow to discuss your findings and he wants
to know whether it’s possible for his company to increase the profit margin of the
SUV category and what they need to do in order to achieve this. What is your
recommendation?
1. Situation
To play back the company situation, you should summarise what your interviewer
told you. This will enable you to avoid any misunderstandings about the situation.
In addition, you could also ask follow up questions that will help you get a better
grip on the situation. For instance, you could ask:
• Has the decline in profit affected all categories or is it specific to SUVs?
• Have Alset’s competitors experienced similar issues?
Prior to diving into the framework question, it is also advisable to further define the
objective of the case. Examples of questions you could ask include:
• I understand the CEO wants us to get profitability back to where it was two
years ago. But how much is profitability today? And how much was it two
years ago?
• By when does the CEO want to return to historical profitability levels?
• Can you confirm we are only interested in improving the profitability of the
SUV category?
2. Framework development
In this situation, there are two potential drivers behind the decrease in profits:
A. SUV industry total profits: The SUV industry as a whole might be experiencing
difficulties which could partly explain why Alset is experiencing declining
profits
Question 3.a
If a plan does not come to you naturally when trying to answer the question, it is ok
to ask your interviewer for a few seconds to gather your thoughts.
Here is a potential plan you could have shown to your interviewer for this specific
question:
• Calculate the cost per SUV for each facility
• Identify the lowest cost per SUV facility
Let’s now do the calculations and simplify the numbers when possible.
The cost per SUV can be calculated by dividing the total cost of each facility by the
number of vehicles it produces:
Once you found the answer to the maths question, you need to:
• Relate the result back to the broader case question
• Suggest next steps in the analysis
Potential drivers of Oldcastle good profitability include: new machinery, lower cost
of labour, cheaper real estate, etc. We could look into this as a next step in the
analysis.
Question 3.b
At the start of a data interpretation question, you need to make sure you
understand the headers, axes and units of the graphs you will be interpreting.
Whenever possible, you should read tables and graphs horizontally first and focus
on extracting trends from the totals. You can then switch to reading the table
vertically to extract complimentary insights.
In this particular case, the graph is simple enough to be analysed in one go. We can
extract the following insights:
• Manufacturing costs are the largest contributor to the total cost per SUV for
every company
• Alset has the highest cost per SUV mainly because of proportionally higher
manufacturing costs than its competitors. This confirms our previous
hypothesis that understanding why Oldcastle performs so well could help
improving profitability
• Ronda has the lowest total cost and manufacturing cost per SUV. But it also
has the highest R&D costs. This might indicate that high expenditure in R&D
leads to better product designs and therefore lower manufacturing costs.
But it might also just be that Ronda has its manufacturing facilities in areas
where labour and real estate costs are low
• Alset has both the lowest total cost and the highest cost per SUV. It is
therefore the company that sells the least number of SUVs. This indicates
Once you have analysed the data at hand you need to:
In summary, it seems that Alset has the highest cost per SUV of the group of peers
studied. This is mainly because of high manufacturing costs that are likely to hurt
profitability. However, Alset also seems to have lower sales than their direct
competitor, which means it probably also needs to improve demand for its
products.
We have already found that analysing Oldcastle could give us ways to decrease
Alset’s costs. A potential next step could be to analyse ways in which Alset can
improve its profitability by growing revenues.
You should not hesitate to summarise where your analysis is standing when you
feel you are coming to a natural transition point between questions. This will
help you keep an eye on the broader objective of the case. And it will also keep
your interviewer on board with your progress.
4. Creativity question
In this case, Alset could explore the following solutions to increase sales in the SUV
category:
1. Short-term:
• Increase advertising activities. This could include launching new TV
spots, or sponsoring a major automotive event or increasing spending
on online marketing and social media
• Focus on growth markets. Some countries such as China probably
experience a booming demand for SUVs and Alset needs to make sure
it is well positioned there
• Refresh the current SUV models. Slightly update the exterior and
interior designs of the current model to reflect the latest trends and
boost sales
2. Long-term:
• Identify gaps in the market. Analyse the demand for different types of
SUVs as well as the offer from the competition. And identify specific
gaps in the market that could be addressed by Alset
• Launch new SUVs in identified gaps. This could include sporty design,
connected car, new hybrid or electric motors, etc.
• Building the brand. Today’s consumers are examining more factors
when buying cars such as sustainability and corporate responsibility. It
seems important for Alset to adopt these principles and communicate
on its efforts in this space
If you do not feel that you have enough context from your interviewer to
brainstorm relevant ideas it is ok to ask a few questions to clarify the company’s
situation. This will help you get specific ideas that are well adapted to the
company. Your interviewer will value this, as general ideas are usually less
effective than specific ones.
For instance, here you could have asked: “When did Alset launch its latest SUV
model?” or “Which countries is the company currently focusing on?” or “Does the
company have any vehicles with hybrid or electric motors?” etc.
5. Recommendation
The recommendation is a critical part of the case. Almost without exceptions, this is
what your conclusion should contain:
4. Give your recommendation statement first
5. Then provide supporting arguments, ideally three or more
6. And finally, talk about next steps (additional analysis, potential risks, etc.)
This initial analysis indicates that it seems possible for Alset to increase its profit
margin in the SUV category by focusing on the following:
Note that in most case interviews, there is no right or wrong conclusion. As long
as you follow the method above and give a good rationale for your conclusion,
your interviewer will accept it.
Outlining next steps is important. This is something all consultants do at the end
of projects to sell on the next project. Including that in your conclusion will show
your interviewer that you are aware of how actual projects work!
1. Situation
Your client is Zeta Bank, a major UK bank. Zeta Bank’s aging IT system and its
myriad of new products has increased the complexity of its operations. A lot of
simple tasks such as changing a customer address or updating a customer on the
status of his loan application require manual intervention. This has led to an
increase in customer complaints about service quality and response times.
The Chief Information Officer (CIO) wants to increase next year’s IT budget to
develop digital tools that will decrease manual intervention to answer simple
customer questions. The CEO also wishes to improve customer service because he
is planning to expand Zeta Bank’s presence globally. That being said he is
concerned that the £5m increase in the CIO’s budget will not deliver the expected
improvement in customer satisfaction.
2. Framework development
The analytics team at Zeta Bank collected data on customers who call the bank for
simple queries that require a lot of manual intervention from the Operations team
to resolve. It then calculated average processing and resolution times:
The analytics team at Zeta Bank also provided you with the customer survey below.
Customers who had to call Zeta Bank for each type of query described above were
asked two questions:
• How much of an inconvenience was it to call us for this query and to wait for
our reply? (1 = low, 5 = high)
• How likely are you to leave Zeta Bank because you had to call us for this
query and to wait for our reply? (1 = very unlikely, 5 = very likely)
Loan applications
Online banking
Credit cards
0 1 2 3 4 5 6
Question 3.a.
The CIO wants to know which type of query the operations team spends the most
time on and how many FTEs it accounts for?
An FTE (Full Time Equivalent) is the hours worked by an employee on a full time
basis.
Question 3.b.
4. Creativity question
Zeta Bank’s main IT team is based in the UK but it also has a software development
team in China. The CEO is considering using the team in China to develop the digital
tools the CIO is asking for. What factors should the CEO consider before making
that decision?
5. Recommendation
After two months of rigorous analysis it’s time for your team to present its findings
to the CEO and CIO of Zeta Bank. What would you tell them?
1. Situation
To play back the company situation, you should just summarise what your
interviewer told you. This will enable you to avoid any misunderstandings. In
addition, you could also ask follow up questions that will help you get a better grip
on the situation. For instance, you could ask:
• What is the total CIO budget? How material is a £5m increase in that budget?
• Has the volume of customer complaints only recently increased or have they
been an on-going issue?
• Has the CIO run similar digital initiatives in the past? Were these initiatives
successful in improving customer satisfaction?
Prior to diving into the framework question, it is also advisable to further define the
objective of the case. Examples of questions you could ask include:
• I understand the CEO wants to improve customer satisfaction. Do we know
how customer satisfaction is measured today? And by how much it changed
in recent years?
• I understand the CEO is concerned that the digital tools proposed by the CIO
will not improve customer satisfaction. Does he think that the tools per se
will not make a difference to customer satisfaction? Or does he think his
team lacks the skills to roll out and use these tools?
Asking the right questions to your interviewer at the beginning of the case can
unveil parts of the framework your interviewer has in mind. As you become
more and more comfortable with case interviews, the questions you ask at the
beginning should both aim to clarify the situation and objectives but they should
also help you develop your framework.
2. Framework development
In this situation, the main elements that can be extracted from the case question
and situation include:
A. First, the overarching goal of the CEO is to improve customer satisfaction. It
would therefore be helpful to understand the fundamental drivers behind
the decrease in customer satisfaction
B. Second, the CEO actually wants to know if the digital tools suggested by the
CIO would help increase satisfaction. Analysing these digital tools is therefore
important
A. Customer satisfaction
1. Internal environment
a. Customer expectations: what are customers’ expectations for Zeta
Bank’s products? And for the quality of its customer service?
B. Digital tools
1. New technology: what sort of tools is the CIO planning on rolling out exactly?
How are they addressing the main customer pain points? How will these
improvements be measured?
2. Daily operations: Can Zeta Bank run these digital tools alongside its legacy
IT systems? Is this going to cause any issues in the day-to-day operations?
3. Skills: Does Zeta Bank have people in house to develop these tools or is the
development going to be outsourced? Does the CIO have any experience in
rolling out this type of tools?
4. Cost: How will the £5m requested by the CIO be used? What is the expected
financial return of this investment in digital tools? Have alternative plans
been studied?
Your interviewer will often ask you follow up questions after you have laid out
your framework. A typical question he could ask is if there are additional areas
that are not part of the initial framework that could be explored.
Additional ideas you could give could include: improving the training of
customer service employees to enhance customer satisfaction; increasing
customer service staff, etc.
Question 3.a.
You should clearly lay out your plan to identify the query category taking up the
most time before diving into any calculation. Here you can simply:
The time spent by the operations team per query for each category is simply the
total resolution time minus the processing time:
Loan applications are therefore the category taking up the most time per month. In
order to convert this number of hours into a number of FTEs you can simply
assume that 1 FTE works 8 hours a day and 20 days a month.
“Loan applications” therefore account for 43 FTEs. “Online banking” also accounts
for about 40 FTEs. Together, these two categories count towards more than 90% of
the total FTEs needed. As a consequence, developing digital tools to handle these
types of queries automatically will save the most cost to the bank. At this point, it
might be interesting to analyse if “Loan applications” and “Online banking” are also
the two categories that really dissatisfy customers.
Question 3.b.
Here is a simple plan you could follow to drive as many insights as possible from
the survey:
1. First focus on the two questions asked in the survey individually
2. Then focus on combining the insights from each question asked
3. And finally relate your findings back to the other questions in the case
Let’s focus on the “Likelihood of leaving“ question first. The category with the worst
rating is “Online banking”. This indicates that Zeta Bank is falling short of customers’
expectations in online banking. It seems that customers consider they should not
have to contact the bank for a query regarding online banking. They probably
Overall, there does not seem to be a direct correlation between the level of
inconvenience and the customers’ likelihood to leave the bank. This might reflect
that customers are ready to endure some inconvenience for certain specific queries
but not for others. In other words, customers seem to have different service
expectations for different query categories.
4. Creativity question
Creativity questions are best answered using a simple framework. This will ensure
that you cover the question comprehensively. It is ok to ask for some time at the
beginning of a creativity question to put a simple framework together if it does not
come to you naturally. Once you identified a framework, you can then brainstorm
in each of its different sections to answer your interviewer’s question.
The factors the CEO needs to consider in order to make his decision can be split
into two categories: quantitative and qualitative.
1. Quantitative:
• Cost: What are the cost implications of using the software development
team in China? Will it be cheaper / more expensive than using another
Zeta Bank team or a third party?
2. Qualitative:
• Project management: Who will lead the management of the project? The
team in the UK or in China? What are the dynamics between the two
teams?
• Communication: Given this is a critical project, how can the team in
China and the team in the UK best communicate? Won’t time differences
be an issue when the tools need to be rolled out in the UK?
• Team skills: Are the skills of the team in China similar to the ones of the
team in the UK? Can they develop the same type of tools in the same
timeline?
• Tools maintenance: How will futures updates to the tools be handled if
they are used mostly in the UK but the software developers are in China?
How will the customer feedback received in the UK be transferred back to
the development team in China?
Before deciding, the most important thing to determine is if the China team has got
the right skills to develop the tools and if it is realistic for them to maintain the
digital tools in the future taking the customer feedback on board. The risk of having
the team in China develop the software is that it adds communication and time
difference complexities to a project that seems critical to improve customer
satisfaction.
Notice here how after brainstorming different ideas we are summarising the
most important things to understand before the CEO decides. In addition, we
are also highlighting the risks related to the CEO’s ideas.
Prioritising ideas and highlighting risks are two really helpful habits in creativity
questions. We definitely encourage you to emulate these habits.
5. Recommendation
Based on our initial analysis, Zeta Bank should develop digital tools with a particular
focus on improving how queries regarding “Online banking”, “Loan applications”
and “Credit cards” are handled. There are two main reasons for suggesting this:
• First, “Online banking” and “Credit card” are the two categories for which
customers are most likely to leave the bank if they are dissatisfied.
Developing digital tools to handle such queries is therefore likely to help
improving customer satisfaction.
• Then, “Online banking” and “Loan applications” account for more than 90% of
FTEs dedicated to handling customer queries. Developing digital tools to
handle such queries will therefore decrease costs.
1. Situation
Your client is Quidi Market (QM), a small supermarket chain in the North East
England that opened its first shops in the 1980s in Gateshead and Darlington. The
chain is known for its friendly staff, local products and support to the local
communities.
In the past five years big super market chains from the South of England have been
expanding in the North East. QM is a family-owned business and its owner is
concerned that his business will not be able to compete with the large supermarket
chains. He fears he will not be able to keep his business up and running as it
happened with other small supermarkets in other areas of England where the big
chains recently established themselves.
2. Framework development
What areas would you look at to assess how much of a threat the arrival of large
super market chains is to QM?
Question 3.a.
The National Consumer Agency in England considers that a city is under served
when it has less than 1 supermarket per 10,000 people. Below that number, people
need to travel long distances to find a supermarket.
Your team has collected the information below about the population of five cities in
the North East of England and the number of supermarkets per city. The total
number of supermarkets includes QM shops.
QM’s owner wants to invest in one of these cities and open new shops. Which city
would you recommend?
280,000
Newcastle
230,000
Sunderland
180,000 Gateshead
North Tyneside
130,000 Darlington
80,000
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Question 3.b.
QM’s owner is planning to invest £5m in new stores in one of the above locations.
He wants to open small and big stores. Each small store will yield £100k in annual
profits compared to £200k for a large store. The owner wants the ratio of the
number of small to big stores to be 3:1. How many stores of each kind does QM
need to open to achieve a 5-year payback?
4. Creativity question
5. Recommendation
After four months of analysis, QM’s owner wants to know what are the best ways
for his team to respond to the entry of large chains in the region. What would you
tell him?
1. Situation
To play back the company situation, you should summarise what your interviewer
told you. This will enable you to avoid any misunderstandings. In addition, you
could also ask follow up questions that will help you get a better grip on the
situation. For instance, you could ask:
• How many stores do QM and the large chains have in the North East
respectively?
• What is the typical size of a QM store and of a large chain store?
• Is QM in a healthy financial position at the moment?
Prior to diving into the framework question, it is also advisable to further define the
objective of the case. Examples of questions you could ask include:
• I understand the owner of QM is concerned about the competition. Do we
know more specifically what the owner is worried about? Is it lower prices,
more products variety or bigger stores?
• I understand QM is a family owned business. Does the owner want the
business to remain independent or would he consider selling to a large
chain?
Asking the right questions to your interviewer at the beginning of the case can
unveil parts of the framework your interviewer has in mind. As you become
more and more comfortable with case interviews, the questions you ask at the
beginning should both aim to clarify the situation and objectives but they should
also help you develop your framework.
Here for instance, the last question on whether the owner would consider an
acquisition can unveil a lot about the direction in which your interview is going to
take the case.
2. Framework development
In this situation, the main elements that can be extracted from the case question
and situation include:
A. Competitive threat:
1. Price: How price-aggressive are large chains compared to QM? Do they
run more promotions and discount more products?
B. QM response:
1. Consolidate current position
a. Reinforce what makes QM different including: the friendly staff,
local products and support to the community
b. Keep up with customers’ demand for new services such as online
shopping, click and collect, etc.
c. Refurbish current stores and adapt store format to evolving
customer needs if required
2. Scale up
a. Open new stores in strategic locations to gain in scale and be able
to compete with the larger competitors
b. Alternatively, if QM needs to grow very fast, it could also acquire
one or several other local supermarket chains
c. QM could also create partnerships with other chains to buy
products together and therefore gain scale and lower costs
In this case, understanding the scale of the threat represented by large chains is
really the priority. Once this has been determined an appropriate response can be
designed for QM.
Question 3.a.
Let’s first calculate the number of supermarkets per 10,000 people and then extract
insights from the graph.
Gateshead and North Tyneside are therefore close to be underserved and seem
like good targets to open new stores.
Here are some insights that can be extracted by reading the graph:
1. Darlington’s population looks set to decrease, which will likely increase its 1.9
ratio in the near future. This makes the city unattractive for new investments
2. Newcastle’s population is going to increase. This will help decreasing its 1.6
ratio in the mid-term and might make it a more attractive investment in a few
years
3. Sunderland’s population will stay the same over the next few years meaning
its 1.3 ratio is likely to stay unattractive in the near term
4. Gateshead has got the fastest growing population and is underserved. This
makes it extremely attractive for investments
5. North Tyneside is underserved but its population is decreasing making it a
less attractive opportunity than Gateshead
Once you have analysed the data at hand you need to:
Based on the analysis above, Gateshead is clearly the best city to invest in. It both
has a growing population and is currently underserved in terms of number of
supermarkets.
Question 3.b.
If a plan does not come to you naturally when trying to answer the question, it is ok
to ask your interviewer for a few seconds to gather your thoughts.
Here is a potential plan you could have shown to your interviewer for this specific
question:
1. Layout the basic equation for the payback period
2. Express the relationship between the number of small to big stores as an
equation
3. Inject the store ratio equation in the payback equation
Let’s now do the calculations and simplify the numbers when possible.
Therefore, QM could open 8 stores in total, 2 big and 6 small, in order to achieve a
5-year payback period for a £5m investment.
Once you found the answer to the maths question, you need to:
• Relate the result back to the broader case question
• Suggest next steps in the analysis
Investing in new store is a good idea to consolidate QM’s position and fight back the
entrance of new players. However, if eight stores were built in Gateshead the
number of stores in the city would increase by 80%. This is probably very aggressive
and might lead to reaching the saturation point of the market. A good next step in
the analysis could be to analyse if it would be an interesting idea to install some of
these new stores in cities where QM is not already present.
4. Creativity question
2. Variable Costs
• Product costs: QM could reduce product costs by making its suppliers
compete harder for its business. QM could also create partnerships with
other retailers and gain scale to get better prices
• Advertising: QM could reduce its advertising to the minimum given it is
already known in the region. The downside of doing this is that it might
lose visibility as new players enter the region
• Labour: QM could try to naturally decrease its labour costs by not
replacing people who retire and by stopping to hire new employees in the
short-term. For instance, it could install automatic tills in its current stores
as well as its new stores and reshuffle its current cashiers across its stores
In this case, it makes sense to focus a lot of attention on product costs and real
estate costs, as they are likely the highest costs QM incurs. It should also be
highlighted that some of the cost cutting measures suggested require an initial
investment. As a consequence, in the very near term some of these actions are
likely to degrade profitability.
The recommendation is a critical part of the case. Almost without exceptions, this is
what your conclusion should contain:
1. Give your recommendation statement first
2. Then provide supporting arguments, ideally three or more
3. And finally, talk about next steps (additional analysis, potential risks, etc.)
However, there are further areas that could be explored. Next steps could include:
• Making sure that QM has got the financial resources to expand in Gateshead.
We should make sure that the expansion does not weaken QM financially
before the arrival of the large chains
• Understanding in more detail how large chains managed to get market share
in other regions they recently got into could help enhance QM’s competitive
response
• Looking into potential acquisitions of other local chains or into partnerships
with these chains could also help QM drive costs down
1. Situation
Your client is a high-tech British start-up called Electron. Electron launched the first
cooking thermometer in the UK two years ago and it was a huge success. A cooking
thermometer is used to measure the internal temperature of meat when cooking.
He is convinced that to achieve his vision he needs to add new innovative products
to Electron’s portfolio and to diversify the company’s culture by hiring international
employees. Currently Electron hires 40 British employees based in London and
outsources the manufacturing of its product to a manufacturer in the UK. Electron’s
CEO hired your team to help him define a strategy in order to achieve his vision.
2. Framework development
What key factors would you analyse to design the CEO’s strategy?
Electron’s CEO decided that the countries he wants to enter are China and
Germany. Your team collected the information below about Electron’s competition
in these countries.
China Germany
Xi- H- S-
Others iWarme KlugL VatenT eKoch Other
Ion Chen Glim
170 150 20 5 20 12 10 8 9
Question 3.a
Question 3.b
The CEO believes that Electron can capture 10% of the German and Chinese
markets in 2015.
Is it realistic? Would it put Electron on track to achieve its 2020 revenue target? In
2014 Electron had revenues of $15m.
4. Creativity question
What measures can be taken to reduce the risks related to entering the German
and Chinese markets?
5. Recommendation
It’s time for your team to present your findings to Electron’s CEO. What are your
recommendations for Electron’s strategy?
1. Situation
To play back the company situation, you should summarise what your interviewer
told you. This will enable you to avoid any misunderstandings about the situation.
In addition, you could also ask follow up questions that will help you get a better
grip on the situation. For instance, you could ask:
• Is there any particular reason why the CEO is only considering Europe and
Asia and not the US for example?
• Has Electron already started developing new products or is it just focused on
the kitchen thermometer?
• Does Electron have any stores or does it only sell its product online?
Prior to diving into the framework question, it is also advisable to further define the
objective of the case. Examples of questions you could ask include:
• I understand that the CEO wants to quadruple sales by 2020. Do we know
what sales are today?
• Does the CEO only have a sales target or does he also have a profit target in
mind for 2020?
• The CEO seems to be expecting most of the sales growth in the next 5 years
to come from the UK. Can you confirm that’s right?
2. Framework development
Therefore, the three areas that can be used to structure your framework are new
markets, products and company culture.
A. New markets:
1. Market size: What is the size of the market and the customer segments
for Electron’s products in different countries? Are customers in those
markets early adopters of smart kitchen technology? Given Electron’s
products are related to cooking, is there a strong cooking culture in these
countries?
2. Competition: How many competitors does Electron have in the different
countries? How concentrated is this competition? How do their products
compare to Electron’s (price, features)?
3. Barriers to entry: Are there any legal issues preventing Electron from
entering the targeted markets?
B. New Products
1. When: Is it wise for Electron to invest in the development of new products
before entering the new markets? Or should it launch the smart
thermometer in new markets first and then reinvest some of the
revenues in developing new products?
2. What: Should Electron focus only on smart kitchen related appliances or
should it launch smart home products too? Is the vision of the company
to become a specialist leader in smart kitchen appliances or does it want
to play across more markets?
3. Where: Where should the company design and manufacture its new
products? Should it move the manufacturing to a lower cost facility than
Developing new products and building a more diverse culture both take time. As a
consequence, it probably makes sense to first focus on taking Electron’s existing
product, the cooking thermometer, and trying to sell it in new markets. This is the
area of the framework that is most likely to deliver sales growth in the short term.
Question 3.a
If a plan does not come to you naturally when trying to answer the question, it is ok
to ask your interviewer for a few seconds to gather your thoughts.
Let’s estimate the market penetration for each country following the steps above:
Once you found the answer to the maths question, you need to:
• Relate the result back to the broader case question
• Suggest next steps in the analysis
The CEO wants to enter at least two new markets. The market penetration for
China and Germany is respectively 2% and 4%. It is difficult to know by how much
this penetration can grow and how much opportunity there is left in these two
countries. Comparing these penetrations to the UK’s penetration or to other
countries could provide more information on this.
As a next step, it might be helpful to understand the highest limit these market
penetrations can reach. This could be done by looking at the penetration of cooking
thermometers or similar kitchen products in other countries.
Question 3.b
Asking if you think that Electron can capture 10% of the German and Chinese
markets is a form of data interpretation question.
The Chinese market is extremely concentrated, with Xi-Ion and H-Chen having more
than 90% market share. By comparison, the German market is more fragmented
with KlugL and VantenT accounting for 50% of the market. Based on this simple
concentration analysis, it seems that it might be easier for Electron to get 10%
market share in Germany than in China.
To achieve 10% market share in China, Electron would need to have some sort of
price advantage or technological advantage that its Chinese competitors do not
have.
In this type of situations, you should ask your interviewer if he has information
about prices and technology. If he doesn’t, you should then make an initial
conclusion based on the information you have and outline the conditions under
which your conclusion would need to be revised.
This is what we are doing here by saying that it would seem difficult for Electron
to grab a 10% market share in China unless it has superior prices and
technology.
Let’s assume for a moment that Electron can achieve 10% market share. Calculating
if that would be sufficient for Electron to reach its target is a form of maths
questions.
If a plan does not come to you naturally when trying to answer the question, it is ok
to ask your interviewer for a few seconds to gather your thoughts.
You can take a three steps approach to calculate if China and Germany would be
enough for Electron to be on track to meet its 2020 target:
1. Calculate additional 2015 sales needed to be on track for the 2020 target
2. Calculate the realistic share that could come from Germany
Let’s now do the calculations and simplify the numbers when possible.
Once you found the answer to the maths question, you need to:
• Relate the result back to the broader case question
• Suggest next steps in the analysis
Overall, the CEO’s revenue objective seems realistic. To confirm this, it could make
sense to further analyse Electron’s pricing and technology compared to its
competition. In addition, we could also look at whether there is enough room for
growth in Germany and China for Electron in 2016 onwards. If it is not the case,
Electron might have to consider expanding in other countries or launching new
products.
4. Creativity question
Here you first need to identify the main risks related to the strategy and then
suggest how they can be mitigated both in the short-term and in the long-term.
1. Main risks
• Being unable to compete with the two very large Chinese players
• Focusing too much on China and Germany and ending up neglecting the UK
• Focusing too much on market development and ending up neglecting
product development
2. Mitigation strategies
• Short-term:
o Electron should perform a detailed analysis of the two Chinese players
(price, technology, region, etc.) to identify any gaps in the market
o Electron might want to think about a more ambitious goal for the UK
than just maintaining its position in order to avoid losing momentum
in its home market. For instance, it could try to achieve a reasonable
yearly growth target
o Electron might also want to continue investing in its technology or at
least to have a clear roadmap for the development of new products
• Long-term:
o Concentrate all efforts in China on a single gap identified. Examples of
gaps could include a region that is underserved by the two large
players or a segment of the market for which Electron’s technology is
particularly well adapted, etc.
o As the CEO spends more and more time developing new markets, he
might want to appoint a strong figure of the company to continue
leading the development of Electron in the UK
o Finally, the CEO should make sure the company keeps on developing
new interesting products. This will probably be best achieved by
continuing to recruit the best possible engineering talent.
Here the prioritisation has already been done by splitting the framework in short-
term vs. long-term. Similarly, the framework focuses on risks so there is no need to
outline risks after the brainstorming exercise.
5. Recommendation
The recommendation is a critical part of the case. Almost without exceptions, this is
what your conclusion should contain:
4. Give your recommendation statement first
5. Then provide supporting arguments, ideally three or more
6. And finally, talk about next steps (additional analysis, potential risks, etc.)
Based on the initial findings from our analysis it seems possible for Electron to
reach its 2020 sales target by focusing on the following:
In addition, further work could be done to consolidate the strategy outlined above:
1. Electron should define a more detailed plan to diversify its workforce and
attract the best possible talent
2. Explore alternative markets to China as it seems to be very concentrated with
high barriers to entry
3. Examine the option of moving the manufacturing facilities to Asia while
keeping the design of its products in the UK
Note that in most case interviews, there is no right or wrong conclusion. As long
as you follow the method above and give a good rational for your conclusion,
your interviewer will accept it.
Outlining next steps is important. This is something all consultants do at the end
of projects to sell on the next project. Including that in your conclusion will show
your interviewer that you are aware of how actual projects work!