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) x Volume

• Understand the product mix offered by

the company
• Check if product is competitively priced, if not
• Understand the different target
segments that the different products of the
Competition try and understand the reason behind why it is
priced differently
company cater to

• Check the margins the product is making based

Competitive Response on the cost incurred in manufacturing the product
Cost +
•Check for recent changes in the cost structure
• Determine the Supply-Demand in the market which might impact this sort of pricing
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
• Product should be priced according to the value
follow given different responses by competitors
a customer derives from the product
to changes in price by a company
• Different companies are increasingly adopting
Value Based 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 as future Market Position Segmentation Buying Process
growth)
• Understand the macro-trends in the • Understand the market 1. Product 1. Want generation
market and how they will influence the position of the player 2. Geography 2. Information search
market in the future (includes • Determine the power a 3. Demographics 3. Evaluation
megatrends) player has in the market 4. Occasion / Place of 4. Purchase
• Broadly use Porter’s 5 Forces Consumption 5. Post-purchase evaluation
• Customers
• Suppliers
• Competitors
• Substitutes
Product Price Promotion Place
• Entry Barriers
• Brand • As determined • Advertising (B2C) • Types of distribution
• Understand PESTLE scenario – • Quality of the earlier • Trade Discounts channels
Political, Economical, Social, product • Also check for the (B2B) • Check Availability,
Technological, Legal and • Competitive signalling of quality by • Must ensure both Visibility and
Environmental factors advantage the price (luxury medium and message Freshness
• Packaging (SKU) products have to are correct
and Imaging on the priced at a premium)
product
 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-managerial •Fuel – petrol, •Storage costs – •Smaller •Warehousing – •Given to •Trade discounts •Installation
Material itself – staff diesel, coal, better forecasting packaging can rationalize wholesaler and •Discounts given •Maintenance
use alternatives natural gas needed reduce costs and warehouses retailers – to customers •Spare parts
•Transportation •Electricity – can transport •Transportation – operate own •Labour
and Storage costs captive, bought more at a time rationalize points points of sale
•Replacement
of sale
(warranties)

Flow of Information
• Profitability

• Growth

• Market Entry

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

PRODUCT
New Old
• Introduce new products which are adjacent to existing • Variety – Expand product • Place – Increase where
products or complementary to existing products lines product is sold
• Adjacent – You sell Washing machines, start selling • Value – Change pricing; • Product – sell more stuff
other home appliances make same customer spend
• Promotion – advertise to
more (new uses)
Old

• Complementary – You sell shaving razors, introduce increase sales

• Volume – Increased volume
aftershave
within segment or in new
• Upgrade existing product and package as a new product – segments (gain market share)
‘new and improved’
MARKET

• Diversification – Vertical and Horizontal integration
• Vertical integration – Buy players in your value chain
(suppliers, distributors)
• Horizontal integration – Buy out competitors
New
• 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 is

introduced in

• Each of the above options has its own way of implementation, also its important to consider acquisition as a way of
How? 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 attractiveness,
Objective consumer behaviour, operational requirements

•Why do you want to enter?

Step 1: Strategic 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

competitors, present or future

Step by Step
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)

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

Market Analysis • 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 • Company – Capabilities of the company need to be understood Eg. Manufacturing processes, new technologies, R&D,
Analysis Marketing, Sales and Distribution, etc.
• 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