Krack The Case '21

Consulting
Guide’21.
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Disclaimer
All the content and concepts used in this deck are accurate to best of our knowledge.
Any data, definitions or inspiration from the Internet have been acknowledged, wherever possible.
This guide was prepared by the undergraduate student team at Consulting & Analytics Club, IIT Guwahati.
If you find some discrepancy in the material, feel free to contact us at cac@iitg.ac.in
Or reach out to us at:

From the Team
The Consulting & Analytics Club, IIT Guwahati proudly presents our 2021 edition of the “Krack the Case” Consulting Guide.
We’ve aimed to make this an all-in-one guide to cater to all skill levels, and aid your induction into this omnipresent sphere.
We hope that the material we’ve created and curated aids you in your journey to ace consulting and PM interviews!
Created by the undergraduate student team at C&A IITG, this guide draws examples from discussions, talks, and peer
learning sessions organised within the club. As such, we’ve tried to recreate the bottom-up system of discussion that goes
from the grassroots to more complex fundamentals, to make the content accessible to a wide range of skill-levels. We’ve
ensured our curated material is up to industry standards, and included the names of our sources at the end – in case you
wish to delve deeper.
We at C&A have always strived to create communities of learners and teachers. This spirit of peer-assisted learning reflects in
both our in-house and open-to-all events, bolstering outputs through collective motivation and healthy competition.
On that note, we’re thrilled to introduce to you our annual Winter Consulting course! This free 4-week consulting
bootcamp has no pre-requisites, and includes projects, certification, industry webinars, and meticulously-curated content.
Stay tuned for this year’s reveal on our social media handles!
We hope this guide is an enriching read and an invaluable resource to consulting & PM aspirants out there. Do feel free to
reach out to us at cac@iitg.ac.in with any comments, feedback, and/or corrections!
Contents
I. A Peek into Consulting V. Case Frameworks

– Pricing Strategy
II. Issue Trees and MECE Approach – Market Entry
– Profitability
III. Guesstimates
VI. Making Amazing Slide Decks
IV. Strategic Tools
VII. Glossary of Useful Terms
– SWOT
– PESTEL VIII.A Glimpse of the PM World
– Porter’s 5 Forces
– Task Environment IX. User Personas and Research
– Value Chain Analysis
– BCG Growth Matrix X. Case Examples
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A Peek into
Consulting
Role of a Management Consultant
Identify Challenges of the Company and Define all

complex problems
Understand the condition of the market and position

of the company and address problems accordingly
Create and implement a structured approach

towards solving the problems
Recommend a proper elaborate action plan to solve

the problem and fight the challenges
Continuous Evaluation of the proposed solution and

modifying it according to newer scenarios
Case Interview Mindset
1. 3.
2. 4.
Understand the Generate relevant

case properly and insights from
ask clarifying existing
questions to get a knowledge, initial
better look into the clarifications and
Analyse the case Communicate the
actual problem at related concepts
problem and assumptions,
hand. and frameworks.
construct a insights and
structured recommendations
approach towards in a structured
solving it. form.
General Tips
• Be prepared with different frameworks. Practice a few cases beforehand and stay updated on industry
news.
• Communication skills would be of utmost importance. While solving the case, think out loud!
• Do not get stuck on calculations! Round off numbers, and use them quickly and efficiently.
• Ask clarifying questions in the beginning. Asking the right questions increases chance to come up with
an accurate solution.
• Do not make any assumptions unless necessary, even if you do make sure to communicate with the
interviewer to get them validated.
• Whenever a framework is used, communicate the approach of solving the case rather than mentioning
the exact framework.
• Keep communicating with the interviewer to let them know of your thought process. In most cases, the
interviewers will help you get back on track if they see you going in the wrong direction.
• Be calm, confident and patient with your approach.

Issue Trees &
MECE Approach
Issue Tree
• Making an issue tree is essentially Sub-Issue 1

“Mapping” the problem (1)
Issue 1
• Helps in clear and structured thinking for
problem solving Sub-Issue 1
(2)
Problem
• Aids in categorizing ideas which covers Sub-Issue 2
all possibilities without going deep into (1)
minute details
Issue 2
• The issue tree and each of the sub-trees
are a MECE structure Sub-Issue 2
(2)
MECE Approach
• MECE stands for Mutually Exclusive and Collectively Exhaustive.
• Mutually Exclusive part means that the smaller pieces of the issue tree cannot overlap, thus creating
more efficiency as no two parts overlap. Hence there is no repetition.
• Collectively Exhaustive means creating an issue tree such that when all sub-classes are taken
together it sums up the entire possibilities. This ensures that it does not miss any new ideas or
possibility.
• While creating MECE, one should also ensure that the sub-objects that the issue is divided into belong
to the same class and one should not use too many sub-objects to make the division.
• Ideally up to 3 sub-objects are desirable for each problem.

Using MECE to make Issue Tree
Identify causes
efficiently
Identify Root
Find all root using
cause reason.
cause and hypothesis
Not the
reasons and data given
symptoms
in the case.
1. Divide and Conquer
Start with the root cause of problem and divide it into sub-problems keeping in mind the MECE approach.
2. Add mini MECE layers to each subsequent layers
This will help to solve the problem efficiently at each layer.
3. Continue until you solve the problem

Creating Issue Trees
Estimate if the new targeted ad structure yields more revenue than the current one of a fashion magazine which sells monthly
magazine in India.
Clarifying Questions:
What is the current ad revenue structure?
We include full page ads in our magazine and get paid for it by the company whose
ad it is. Today, we sell 1M copies. Each magazine has 100 ads. Each ad costs $50 per
1000 copies.
Subscription
What exactly do you mean by targeted ads?
New Ad
We have data on our customers based on which we would send relevant ads to Revenue
them.
News stand
Broadly, what are the categories based on which you want to target
ads?
We have premium brand ads and non-premium brand ads today. The proposal talks
about sending
Premium brands ads → upper class/ premium customers
Non-premium brand ads → economy customers
• Considering basic division of News Ad revenue as: Premium
Customers
- Subscription Based
- News Stand
Subscription
• Further division can be constructed on basis of:
- Premium Customers
- Economy Customers Economy
Customers
New Ad
• Assuming: Revenue
- Percentage of subscription = 80%

- Percentage of News stand = 20%
- Percentage Premium Customers = 75% News
- Percentage Economy Customers = 25% stand
Now for calculating cost
Cost = no of magazines * no of ads per magazine * cost of ads

Hence final issue tree will look like:
# of magazine
Premium # of ads per

Customers magazine
Cost of ads
Subscription
New Ad # of magazine
Revenue
Economy # of ads per
News Customers magazine
stand
Cost of ads
Guesstimates
Definition and Scope
The term “guesstimate” is a portmanteau of the words “guess” and “estimate”. As such, a guesstimate question aims to test a
candidate’s qualitative and quantitative skills, as well as capacity for thinking on-their-feet.
Guesstimates in a Practical Context:

Give an excellent rule-of-thumb
A well-performed guesstimate gives a great ballpark of commodities/metrics, which
may then be used to influence administrative-level decisions. Versatile
Great way to perform sanity checks

They may be used to verify and cross-check projections made based on real data.
This introduces a layer of useful redundancy that aids in identifying invalid data, or in Practical
reinforcing the feasibility of predictions.
Cheaper and quicker than surveys/censuses

Gathering, cleaning and processing data is often costly in terms of money and time. Fast
While market research is essential, making educated guesstimations is the better way
out in cases where time is significantly more essential than factual correctness.
General Approach (1/2)
Demand-side
Clarify ambiguities
Pinpoint users/uses
Spot constraints
Identify the scope
Does the answer approaches assume

For market sizing
need to be short? Ask questions! an indefinite supply.
cases, one must
Or does it require a Smart questions (eg: mobile phone
find the segments
more granular show that you have market in India)
the question is
approach? an eye for detail. relevant to.
Supply-side
This is evident by Definitions, specific assumes the supply
Divisions like rural-
the style of the details and queries is at full/adjusted
urban, residential-
question – whether about the final result capacity to meet the
commercial,
it is asked as part of can be asked here. demand. (eg: how
large/small-scale
a larger case many COVID
can be made here.
problem or vaccines can be
separately. supplied)
These steps should ideally be done relatively quickly. These are essential
for the structure of the solution but are erroneously missed by candidates.
General Approach (2/2)
Assume/ask
Math & sanity checks

Develop a structure
It is a good practice to Calculate, then test

Before getting down confirm with the the answer against
to numbers, plot a interviewer if they practical values.
skeleton of how you have any values
want to approach the they’d like you to use. Making sure your
issue. If not, make informed answer is realistic
assumptions about shows that you are
Make an issue tree the same. methodical in your
with a depth suitable approach. It also
to the scope of the Remember: rounding addresses some of
problem. off numbers is a neat the queries the
Don’t overcomplicate! way to save both time interviewer might
and effort. have.
This represents the meat of the solution. This calls for an above-average
business sense and quantitative aptitude, so practice is key!
Sample Guesstimate #1
What is the market size of sofas in India?
Pre-Structuring Checklist:
Ambiguities
• Does market size here refer to volume or value? (Ans: INR value of sofas sold in a year.)
• Are single-seated armchairs included here? (Ans: By definition, no.)
• Sofas sold or produced? (Ans: Consider only the sofas sold in India.)
Users/uses
Sofas are, of course, needed in homes. Other possible uses are – in offices, airports, waiting lounges, cafeterias, hotels.
Since India is a country with lots of households, the lion’s share of sofas is for residential purposes.
(An adjustment may be applied to the final answer to account for the rest of the possible users – say 30%).
Demand or Supply?
Since the problem requires the value of sofas sold in a year, it is useful to assume that there is no bottleneck on supply. Thus,
an approach from the demand side would be the most useful.
Indian population
Structure:
Total # of sofas # of households ÷
People/household
Sofas replaced ÷
Average sofa
lifespan
x
# of sofas sold/year
+ Sofas/household
Total # of sofas
Market growth x x
Growth rate
Sofa market
size in India
x Penetration rate
Average cost/sofa
Standard sofas x
% of market vol
Average price/sofa +
Average cost/sofa
Premium sofas x
% of market vol
Assumptions:
We start backwards from the last level of the tree.
Level 5
• Population: ~125 crores, population of India
• People/household: An average of 5 people per household seems like a fair estimate.
• Sofas per household: Higher income households may have more than one sofa. On average, assume 2 sofas/household.
• Penetration rate: Consider the 30:70 split of urban:rural populations in India. Let’s say this applies to households too.
Assume 30% urban and 1% of rural households buy sofas. This amounts to approximately 10% penetration.
Level 3
• Average sofa lifespan: Assume sofas get replaced every 10 years on average.
• Growth rate: Assume the sofa market grows parallel to population growth. Thus, 1% market growth.
• Sofa pricing: Standard sofas may cost INR 20k, with a 75% market volume. Premium sofas may cost 5 times as much.
Calculations: 125 crore

5 crore sofas 25 crore h.h. ÷
0.5 crore/year ÷ 5 people/h.h
10 years x
0.55 crore/year
+ 2 sofas/h.h.
5 crore sofas
Sanity Check:
0.05 crore/year x x
1%/year Dividing the total market size by
INR 22000 crore the number of households yields
x 10% a spend of INR 880 per
(~USD 3 Bn)
household per year (~70/month).
INR 20,000
This is reasonable, as each
INR 15,000 x household would on average only
75%
spend a little on sofas (a fairly
INR 40,000 + long-term purchase).
INR 1,00,000
The value USD 3 Bn is also
INR 25,000 x reasonable for a market this size.
25%
Estimate the number of cups of coffee consumed in a MNC office in Mumbai on a typical 9-5 day.
Ambiguities
• Is any other beverage served? (Ans: Assume only coffee is served at this point.)
• How is the coffee made? In a coffee maker or vending machine? (Ans: A coffee maker. Everyone makes their own cup.)
Users/uses
Some people are staunchly opposed to the idea of coffee. Thus some of the employees consume only tea, and the others are
okay with coffee. We also note that since the coffee takes some time to prepare, the employees need to be on a break.
Demand or Supply?
This isn’t relevant here, however, we assume supply of coffee is limitless. This by default merits a demand-side approach.
Baseline Assumptions
We assume that the office building contains offices on all floors. For the sake of efficiency and cost reduction, architects will
seek to make every floor uniform and thus equal numbers of employees sit on each of the floors.
Additionally, each floor has a coffee maker, and employees get an hour of lunch break.
Structure:
# of hours
Breaks in 1st half x High productivity
# of breaks
Probability of
break/hour + Medium productivity
x
+ Low productivity
Coffees per floor # of employees/floor
# of hours
x
Cups of
coffee
x
consumed Probability of
Coffee penetration % Breaks in 2nd half x break/hour
Number of floors
Fatigue factor
Assumptions:
Level 5
• Productivity: Assume that the office has a 3:2:1 proportion of high, medium, and low productivity workers respectively. Also
assume that they take breaks with probabilities of 0.1, 0.25, and 0.4 respectively.
• Fatigue factor: As the end of the working day comes closer, employees are likely to get fatigued and thus be more likely to
take breaks. We assume this factor to be 2 – i.e. they are twice as likely to take a break in a given hour in the 2nd half.
• Employees per floor: 20 is a fair guess for this, as this includes both full-time employees and support staff.
• Coffee penetration %: The problem talks about an office environment. It is fair to assume around ~50% drink coffee.
• # of floors: For a MNC in Mumbai, as a conservative estimate, 10 floors is a reasonable assumption.

Calculations: 3 hours
3
0.6 breaks x 6
× 0.1
2.2 breaks/employee 2
0.2 breaks/hour + 6
× 0.25
x 1
+ 6
× 0.4
22 coffees/floor 20 employees/floor
4 hours
220 x
coffees
x
consumed 50% 1.6 breaks x 0.2 breaks/hour
10 floors Sanity Check:
2
Assuming the cost of a cup is INR 10,
the office spends INR 2200/day on
coffees, or ~INR 8 lakh/year. In an
office of this scale, this is reasonable.
Practice Guesstimate
Estimate the size of the online dating market in India.
Ambiguities
• Does market size refer to number of users or value?
• Are matrimonial sites to be included?
• What is the time period for which market size is to be considered?
Users/uses
Almost entirely urban folk. Cheap internet access precludes certain barriers, but we are interested with users who purchase
premium services.
Demand or Supply?
There are no constraints on the sale of premium virtual services. A demand-side approach is the obvious choice.
Possible Approaches
The population can be divided into buckets as per their age, gender, income situation etc. Conversion rates from free to
premium accounts will likely differ according to those factors. There are multiple apps to consider, and the distribution of users
across them can be analysed. It might also be worthwhile to explore the average lifetime of users on the app(s).
Previous Year Guesstimates
BCG Interviews Bain & Co.

• How many Pay-phones are there on the Island of • Guesstimate the number of laptops in working
Manhattan? condition in Delhi right now.
• How many hotel-sized mini bottles of shampoo and • Calculate the number of watches that people currently
conditioner are produced each year around the world? own in Delhi region alone.
• How many people in Uganda have no access to • How many cups of tea are sold in all of India every
Electricity? week?
• How Many Mazda Dealers Are There in the U.S.? • Estimate the number of flying cars that would be sold
in 2025!
• How to Estimate the Size of Chewing Gum Market in
the U.S.? • How Many Penguins Can Live in Antarctica?
• Describe how you measure the average time taken to

queue at an airport check-in counter?
McKinsey Interviews Wall Street Firms

• If I were to fill this room with pennies, how many
• Estimate the colored TV sales for Flipkart during pennies would fit in?
Diwali season (in India).
• What is the size of the market for disposable diapers
• Estimate toll collection outside Bangalore airport (in in China?
a week on average).
• How many Delta Airlines planes will take off in the next
• Estimate the annual logistics cost for Flipkart (in hour in United States?
India).
• How many gas stations are in North America?
• How much change would you find on the floor of an
average mall (today)? • Estimate the annual revenue of Tropicana's orange
juice division in the U.S.?
• How many second hand wedding dresses are sold
in the UK each year?
ZS Associates Software Companies

• Estimate the size of diaper market in India. • How Many Beer Bottles Are in Circulation in the U.S.?
(IBM)
• Estimate the number of traffic lights in Patiala.
• In the United States, how many people are in the air
• How many kilograms of chicken is sold in your city per right now? (IBM)
annum?
• How Many Golf Balls Can Fit into a School Bus?
• How many cricket bats are produced (in India annually)? (Google)
• What is the number of mobile phones used in the world? • How Many Dogs Are There in the United States?
(Google)
• What is the market size of blue car in your native city?
• What Is Annual Demand for Sugar in the United States?
• How many cricket balls will fit into a Boeing 747? (Applied Predictive Technologies)
• Estimate the revenues of any outlet of Haldirams in 1 day. • Can you guess the size of the grocery market in India?
• (Flipkart)
• Estimate the number of ATM machines in Delhi.
Other Consulting Firms
• Estimate the average revenue of DTC buses in a day. (KPMG)
• How many gallons of ice cream are sold in the United States each year? (PwC)
• How Many Basketballs are Purchased by NBA Each Year? (Accenture)
• How Much to Pay for the World’s Only Dinosaur? (Accenture)
• Estimate the number of customers Flipkart gained due to the Big Billion Day sale. (Accenture)
• How Much Paint Does It Take to Paint United Airlines’ Fleet? (Capital One)
• Number of Medium size industries in Mumbai? (Deloitte)
• How Many Piercings Are Done in India in a Year? (Capgemini Consulting)
• What Is Market Size of Hand Knitting Yarn in the U.S.? (E.Y. Advisory)
• What is Annual Demand for Natural Gas in India? (A.T. Kearney)

Strategic Tools
SWOT
SWOT Analysis
Strength Weakness
Internal
Opportunity Threat
External
Helpful Harmful
SWOT Analysis
SWOT is a great tool to capture the current state of your organization, it helps in setting of objectives for strategic planning
and identifying core competencies of the firm. It analyses whether or not to embark on a strategy.
• Strength:
1. What is our competitive advantage?
2. What resources do we have?
3. What products are performing well?
• Weakness:
1. Where can we improve?
2. What products are underperforming?
3. Where are we lacking resources?
• Opportunities:
1. What technology can we use to improve operations?
2. Can we expand our core operations?
3. What new market segments can we explore?
• Threats:
1. What new regulations threaten operations?
2. What do our competitors do well?
3. What consumer trends threaten business?
SWOT Analysis Example - Apple
Strength Weakness
1. Apple has established itself as a trustable brand 1. Expensive Product Range which acts a barrier
over time, and it’s the world’s most valuable for expanding in developing countries.
company by market value. 2. Closed-source components that prevents
2. Innovation: Apple keeps to deliver a set of cross-device compatibility.
products that provide a better UX. 3. Apple Products are always known for blocking
3. Apple has always identified itself as a brand third-party repairs.
that focusses on Privacy as its key value.
4. Loyal Consumer Base.
Opportunity Threat
1. Governments requesting Apple to open
1. Expansion in AR, autonomous technologies. backdoors.
2. Providing extensive streaming options for price 2. A number of pending lawsuits- including that
sensitive markets. against its anti-competitive practices.
3. Globalisation to reduce prices and escape 3. Apple, usually known for its late-moving
higher tax regimes in countries. policies, could experience disruptions in sales
due to better technologies/ products being
sold by its competitors.
PESTEL
PESTEL Analysis
P T TECHNOLOGICAL
POLITICAL
Political factors such as Govt. Includes changes in digital
policy, Foreign trade policy, Tax transformation, automation and
Policy, Labor Law R&D, innovation, technological
awareness
ECONOMY
Factors such as economic
growth, interest rates,
inflation, exchange rates, E E ENVIRONMENT
PESTEL
Climate, recycling procedures,
employment and how they carbon footprint, waste disposal,
affect your business i.e. how sustainability
profitable they are.
SOCIAL
Keep up with the changing family LEGAL
S L
demographics, cultural trends and Employment legislation,
lifestyle changes, age distribution, consumer laws, health and
career attitudes, Health safety, trade regulations,
Consciousness copyright & patent laws
Why PESTEL?
• When is it best of use?
• Starting a new business

• Entering a new market
• Entering a business with an existing company.
• PESTEL Analysis helps us identify the EXTERNAL factors

that affect a company or organization such as Macro-
environmental factors of a general environment.
• These factors affect your business and operations but the

effect cannot be seen the other way round. These are
generally climate, industry trends, inflation, etc.
• The company has no say on these factors. But conducting a

PESTEL Analysis on them gives us a better insight of the
industry.
PESTEL Analysis of
POLITICAL ECONOMICAL SOCIAL
• Need to make its stand clear • Easily accessible • User friendly

about driver’s Insurance • Affordable fare charges • Quick pick up
• Have to follow minimum • Offers job opportunities, • Gives better ride
wage rules but pay may not be experience than taxis.
• Have to deal with bans in convincing
many countries
TECHNOLOGICAL ENVIRONMENTAL LEGAL
• Excellent mobile app for • Fuel usage may • Need to prevent ban in
users increase many countries.
• Using social media and • Traffic congestion is a • Need to follow labor and
other electronic media concern. employee safety laws
well for promotion • Copyright laws need to be
looked at.
Porter’s 5 Forces
Porter’s 5 Forces
Why do we need Porter’s 5 Analysis ? Points To Remember
• Understand your industry of interest. • Use this model where there are at least three
competitors in the market.
• Identify attractive vs less attractive
• Consider the impact that government has or may
industries/markets. have on the industry.
• Identify opportunities and risks • Consider the industry lifecycle stage-earlier

stages will be more turbulent.
• How profits within an industry will be distributed
• Consider the dynamic/changing characteristics of
• Extrapolate industry trends & anticipate the industry.
changing trends • Avoid using the model for an individual firm; it is

designed for use on an industry basis
Porter’s
Five Forces
Threat of Substitutes Customer

Bargaining Power
❖ Number of substitute products
❖ Buyer propensity to substitute ❖ Price sensitivity
❖ Relative price performance of ❖ Number of Customers
substitute ❖ Buyer’s ability to substitute
❖ Perceived level of product Threat of Internal ❖ Size of each customer order
differentiation ❖ Buyer’s information availability
New Entrants Competition ❖
❖ Switching costs Difference between
❖ Switching costs ❖ Industry growth competitors
❖ Barriers to entry ❖ Quality differences
Supplier
❖ Capital requirements ❖ Brand loyalty
Bargaining Power ❖ Barriers to exit
❖ Cumulative
❖ Number and size ❖ Number of competitors
experience
of suppliers ❖ Diversity of competitors
❖ Access of
❖ Uniqueness of each
distribution channels
supplier’s product
❖ Ability to substitute
The Task
Environment
The TASK Environment
General
Task Environment
Internal
Environment
Environment
• Technological
• Customers • Employees • Natural
• Competitors • Culture • Sociocultural
• Suppliers • Management • Economics
• Labour Market • Legal/Political
• International
The TASK Environment
• The Task environment includes all the things that effect a firm’s business model including forces that
come from within the company as well as from outside the company.
• These depend heavily on the competitive positioning of the firm, its leadership and its goals. These
factors are how the firm interacts with the external factors and are somewhat in the firm’s control.
• These can be analyzed better using Porter’s 5 Forces Analysis.
• The Internal Environment is the firm . To evaluate it we consider the properties directly under its
control like employees, culture and the management.
• The General Environment can be analyzed using the PESTEL Analysis which shows us the factors
which are a part of the external environment.
• There is not much which the internal environment can do to change the PESTEL analysis as most
factors are beyond the firm’s control.
Value Chain
Analysis
Value Chain Analysis
ACTIVITIES Firm Infrastructure

SUPPORT
Human Resource Management

Technology
Procurement
Inbound Operations Outbound Marketing Service

Logistics Logistics &
Sales
PRIMARY ACTIVITIES
Value Chain Analysis - Example
Handles all of the procurement for its own coffee beans,
PROCUREMENT which is one of its competitive advantages.
Free & unlimited WIFI , use of Apple’s iBeaon system

TECHNOLOGY
apart from efficient coffee-related processes
Benefits ,incentives & training programs to keep

HUMAN RESOURCES
its staff motivated & efficient
Corporate Business managers & store managers help to

INFRASTRUCTURE
oversee well-designed and pleasing customer service
INBOUND LOGISTICS OPERATIONS OUTBOUND MARKETING SERVICES

LOGISTICS
Finest quality coffee In more than 80 Signature retail
markets - in the form Very little or no Superior quality
beans from producers objective of building
of direct company- presence of products and a
in Latin America, customer loyalty
owned or licensed intermediaries in high level of
Africa, and Asia. through its in-store
stores product selling customer service
customer service
BCG Growth
Matrix
BCG Matrix
What is the BCG Matrix and how is it

helpful ? Low High
• The BCG matrix helps the company allocate
Market Growth Rate

resources and is used as an analytical tool in Question High
Stars
brand marketing, product management, Marks
strategic management, and portfolio analysis.
• In this matrix we take the market share of the

company on the horizontal axis and plot it
against the growth rate of the industry of Cash
Dogs Low
which the company is a part. Cows
• It helps the company to have a balanced
portfolio of Question Marks, Stars and Cash
Cows.
Relative Market Share
BCG Matrix
Question Marks Stars
• High market share in fast growing
• Low relative market share but high
industry, generating large cash flows.
market growth rate.
• Have maximum profitability for
• Startups generally lie in this region.
company
• Have scope for further R&D.
• Once growth rate declines, might
• It not handled well may turn into Dogs.
change into Cash Cows
Dogs Cash Cows

• Low market share and low market • High market share in a stagnant market,
growth, typically produce no economic thus, high profits.
profits. • Low market growth means low R&D so
• Firms want to eliminate dogs. less investment.
• The money spent here can be used for • Excess cash to be “MILKED.”
other businesses or divested. • Displays balance and stability
BCG Matrix on
• Amul bread is a
new product with a • Amul Ice creams, Lassi
huge possible and Amul Kool are well
Market Growth Rate

market. Question known in the market
Marks Stars
• Amul Pizza Base and have growing
also has a growing market as well.
market
BCG
Matrix
• Amul Frozen Pizza
• Amul Milk is one of the
is not a much-
Cash most popular brands of
desired product, Dogs milk.
due to better Cows
• Amul Ghee and Butter
alternatives.
have large market share
• Amul Cookies is
but low market growth.
also another such
product. Relative Market Share
Case Frameworks
Pricing Strategy
Framework
Pricing Strategy Framework
The framework mainly involves an in-depth look into the company and its products. Different cases will involve
different pricing strategies.
It is usually an eliminative process, wherein we can eliminate the cost, competitive and value based branches
depending on our understanding of the case.
A basic approach to pricing cases consists of the following questions:
Step -1 Step -2 Step -3 Step -4
USP Cost Price Competitive Analysis Value

What is the product’s How much does it How much have the What are the benefits
unique selling point? cost to produce the competitors priced of this product to the
product? their product at? customer?
Pricing Strategy Framework
Execution Approach
Market position/size Growth
Company Company’s position

Market
Company’s goal shares/maximize
Company/ profits etc.
Product Comparison of product
with other substitutes
Product Product USP
Supply and demand
PRICING STRATEGY Cost price/R&D Expense

Cost
based
Profit Margin
Difference in
features
Substitutes in the
market
Difference in
Pricing Competition pricing
frameworks based Competitors' pricing
Price elasticity
Customer inclinations
Consumer loyalty
Benefits of the product
Value
based Willingness of
Value of the product
customers to pay
Business Situation
Our client, a global MedTech company, has recently developed drugs for
COVID patients. The company needs your help in making strategic pricing
decisions given the evolving clinical and competitor landscape.
Approach
Approach and Prelim
& Preliminary Questions
Questions
Approach
We will first analyze the company, and its goals,
and then make a pricing decision. For pricing, we
will perform a cost-based and value-based
analysis
Pre-case Clarifications
o What is the economic/demographic value of
our product to the customer?
Keep in mind that different customer segments will
have different willingness to pay.
o Is maximizing profits our primary goal?

o What are the core competencies of the
company?
o Who are our main competitors and what are
their strengths?
Proposed Solution
Proposed Solution
Increased growth rate
Market Position Growth during COVID pandemic
Established Multi billion

Company Company Position dollar company
Company Goals Maximizing profits

Use of older lab
Production
technologies
Substitutes in the
Market Priced Lower
Features
Brand Image
Fast-tracked
production
Product
Innovative Lab
Product USP technologies
Limited COVID
related drugs in the
market
Product supply Increased Demand

and demand during the Pandemic
Proposed
Proposedsolution
Solution
R&D, Trials, Testing,
Cost price/ R&D Expense
Market research
Cost Less intensive
testing of products
based
Profit Margin Obsolete-
Difference in features
production
Similar brand
Substitutes/Alternatives in image
the market
Competition Competitors' pricing Difference in pricing Priced lower

based
Customers want to
Price elasticity
pay- Lower
Customer inclinations
Tend to migrate
Consumer habits
towards lower costs
Better accessibility
Limited variety of
Benefits of our product COVID drugs available
in the market.
Value Innovative lab

technologies, intensive
based Geography Greater in cities with
testing.
(demand per region) more number of cases.
Willingness of
Value of our product
customers to pay Relevance of High requirement during
Product pandemic
FinalLOOK
FINAL Look
AT PRICING CASES
ASK THE RIGHT QUESTIONS

As this is a very qualitative framework, aligning yourself with the interviewer is key.
QUANTITATIVE DATA
Try gaining as much quantitative data as possible from the interviewer.
ADDITIONAL PRICING FACTORS

Don’t overlook opportunities for cross-selling, or up-selling, and factors such
as different customer segments.
THE COMPANY
Make sure to understand the goal or objective of the company.
ANTICIPATE
Always anticipate the consequences of the price point you set, with respect to the
market and your competitors.
Market Entry
Framework
Market Entry Framework
• Before one firm can enter a market, it

• The magnitude and importance is important to perform an estimate
of entry decisions - encompass on the economical and operational
everything from geographic feasibility of the business in that
expansion to new products to market.
diversification efforts - this calls • To remove any bias from our
to prompt a detailed analysis. analysis of entry decision, we should
• How do you decide what target the five core issues - value
innovation to lead with, what proposition and capabilities, the
products to offer, and what your market size, competition, market
market entry strategy should be? share and revenue, and costs
involved.
Market Entry Framework
Entering Strategy
Customer Product Company Industry
New Market Entry
Segments Customer Core Assets Competitors &

Expectation Share Yes No
Vision
Needs Current Capabilities Barriers ( From Scratch
Portfolio including
Regulatory ) Acquisitions
Goals
Profiling Resources
Potential Estimate of Alliances & JVs
Market Market-Share
Product
Objectives Costs Revenue
Offerings
SWOT
Analysis
Distribution Input Shared

Predictors Of Success
Predictor Description
Size of Entry relative to
Companies that are closer to an industry’s MES upon entry are more likely to succeed.
Minimum Efficient Scale
Entering below MES and then quickly scaling up is more viable when testing a market.
( MES )
The more related the market is to a company’s current portfolio of products / services,
Relatedness of the Market
the greater the chance of success, but properly measuring how related is crucial. One
Entered
should examine the difference between the current portfolio and the potential market.
Complementary assets such as marketing and distribution, are often more important
Complementary Assets factors for success, than core assets. One should perform a value chain analysis to
understand the problems and risks involved at each step of the chain.
While first movers have the advantage over others in some settings, this may change
Order of Entry
upon the time of entry chosen in most cases.
The life cycle stage of an industry is easily determined and greatly influences
Industry-life-cycle stage opportunities for success. Companies entering early in an industry’s life cycle have
greater odds for success than those entering near the shakeout
When a high level of superior information is necessary to innovate, incumbents have
Degree of Technological a major advantage over new entrants. Innovative entrants are likely to succeed by
Innovation staying small in niches that dominant players ignore rather than by expecting to
compete with them as equals.
Business Situation
Our client, Paccar, is a Dutch technology company and a premier commercial vehicle
manufacturer in Europe. Paccar is a worldwide quality leader in the design and manufacturing of
premium light, medium and heavy-duty commercial vehicles.
The company, in wake of Government of India’s newly announced Production Linked Initiative
and reduced tax schemes for EVs, plans to introduce its range of electric trucks and buses in India.
You have been hired to find out if they should introduce these vehicles in India.
Market Entry Example
Approach
We will analyse each of the core values and then present a solution in line with the company’s motives.
More about the PLI announced by GoI

• Provides an incentive of Rs. 26,058 crores, which will be provided over a period of five years, starting 2021.
Manufacturers would have to commit to set up a manufacturing facility of minimum capacity of 5GWh and
ensure a minimum 60% domestic value addition within five years.
• Subsequently the battery or cell manufacturer will have to achieve a domestic value addition of 25% and will
have to show a minimum investment of ₹225 crore per GWh within two years and raise it to 60% domestic value
addition within 5 years
Expected to be receptive towards vehicles owing to incentives announced by the government.
Customer
Paccar has substantial market presence in Europe and current portfolio include a broad range with a range of
Product
200-300 km mileage on a single charge.
Offers a wide product range consistent with global R&D divisions

Company
Net. Annual Revenue : $ 18.7 Bn. Net. Annual Income : $ 1.4 Bn. Total Assets : $ 28.4 Bn.
The company enjoys consistent profitability, a strong balance sheet, and excellent cash flow.
CAGR of 48% 3 Major / Existing Players, 4-5 Potential Entrants High Exit Costs
The central government has assigned 35.45 billion INR ($486 million) as incentives for the deployment of
Industry
7,090 electric buses, with support of subsidies amounting to 5 million

INR ($69,000) per bus. Presently, 5,595 electric buses have been allocated to 64 cities and State
Transport Unions, analysed to run over 3 billion kM without emissions from tailpipe.
Initial Investments as high as INR 13,500 Crores Proper infrastructure for support is missing
SWOT Analysis
Strengths Weaknesses Opportunities Threats
High Dependency on Public

Technical Expertise Lack of Infrastructure Existing players are Locally
Transport
(Requires installation of ACC Grown and established
manufacturing capacity within the sector-
Rapidly progressing
Environmentally Sustainable across India) less operating costs
urbanisation across India
High Price of EVs High use of

Production Linked Incentives GOI’s newly announced
(30 - 60% extra) fossil fuels
scheme to install charging
infrastructure worth INR
Cannot be used for Long 20000 Cr. High sunk costs and Low
Less Competitors
Distance Transport Demand
Verdict
• It is recommended for the company to look for possibilities to enter into a JV with existing players / potential
entrants, so that the company would be able to utilise existing infrastructure / share costs. They shouldn’t
enter the market on its own immediately, given the existing conditions - low demand / sales for EVs and high
sunk costs.
Key Questions to Ask Yourselves

1. What is my distinctive value proposition, and do I have the necessary capabilities and competencies
(including talent and experience in other related markets) to succeed?
2. What geographic area will I serve, what are the existing conditions, and how much demand will be
there in the market?
3. What costs and economies of scale / scope will I face?
4. What sales do I expect to see for my offering?
Profitability
Framework
Profitability Framework
• Profitability is a ratio while profit is an absolute amount
• Profit is simply the difference between revenues and costs
• Profitability refers to multiple ratios like the EBIDTA Margin, Net Profit Margin, Gross Profit Margin
• In essence, profitability is a measure of the efficiency of a company
• Profit Margins provide a better picture of the business performance of the company
Profit = Revenue - Costs
*PAT = Profit After Tax

Pricing Strategy:
Competitive, Cost Based,
Value based
Customer Segmentation,
Market Share, New Markets,
New Products,
Fixed Cost = SG & A, Rent,
R&D, Depreciation, Labor(fix
contracts), Marketing,
Interest
Variable Cost = COGS: Raw

Materials, Transport, Energy,
Labor
SG&A : selling, general & administrative expenses

COGS : cost of goods sold R&D : Research and development
Price per
unit
Revenue X
-
Number of
units sold
Profit Fixed Cost
Fixed Cost SG & A, Rent, R&D,
+
Depreciation,
Labor(fix contracts),
Costs Marketing, Interest
Cost Per Unit
Variable Cost
Variable
Cost X COGS: Raw
Materials, Transport,
Energy, Labor
SG&A : selling, general & administrative expenses Units Produced
COGS : cost of goods sold R&D : Research and development
Our client is consumer good electronics’ manufacturer (mainly kitchen appliances). Their profits have declined over
the last year and they want you to figure out the cause and suggest suitable remedies.
Approach Pre - case Clarifications

The approach to solve any Profitability case should be: How much is the decline?
20% in profits
• Clarify the problem properly to understand the scope of
issue, sectors it has been affecting, time duration etc. Is it visible in revenue or costs?
Only in revenue
• Prepare a structure and workflow to reach a specific
branch What are the major products company deals with?
About 90% of our revenue comes from toasters.
• Analyse Revenue Side and Cost side, to understand
effect on net profit. Has the price of a toaster been increased?
No, its exactly same.
• Go deeper into analysis, considering all factors affecting
the specific change. So can I assume that the volume sold must have
decreased?
• Switch Branch if it is not a big factor and try to identify Yes, it would be fair. Due to one of our competitors
root cause. decreasing there toaster price many middle class family
shifted to that company toaster and we have seen a 22%
decline in profits.
Price
(same)
Revenue
(20% Decline)
Volume sold
(20% decline)
Profit Government Tax
(20% Decline) Fixed Cost
(same) Raw Material
Costs Retail Outlet

(same)
Will revisit later
Variable Cost Transportation
(same)
Customer Service
Maintanence
Unit Sold
(-22%) Root Cause Found
Due to one of our
Toasters competitors decreasing their
(90%) toaster price many middle
class families have shifted
Price to that company.
(same)
Revenue
Unit Sold
(same)
Others
(10%)
Price
(same)
Making Amazing
Slide Decks
Guide to Amazing Presentations
Consistent Storyline
and flow
Executive Design and

Summary + Visual
Appendix appeal
Extensive User and

Sector Research
Consistent Storyline and flow Extensive User and Sector Research
• Story Telling is the foundation of a good slide • As a good Consultant or Product Manager, the
deck. main aim should be to present an extensive report
on user as well as sector research. It can be
• Make the presentation into a cohesive unit, achieved as
where it ceases to be individual slides or
separate ideas. • Identify the problem
• Viewing your presentation as a story that has • Correctly recognize the relevant factors
clear characters, conflict, and resolution will help
generate a through line in your presentation and • Gather the right type of information, using
solidify it as a cohesive unit. On each slide, secondary research or surveys
consider how the information is moving the story
forward and figure out how one slide leads into • Analyze the information gathered and find out
another. insights
• Try using specific tabs at the bottom or sides of • Make the right conclusion
the slide to depict flow.
Design And Visual Appeal Executive Summary and Appendix
• Maintain constant formatting and margins in the • The executive summary slides should only be 5%
entire deck. — 10% of the entire presentation's length. Make
the executive summary focused and simple by
• Keep it light on text! using short paragraphs or bullets and subheadings
• Try an use pictures/chart to express your data or • Summarize the story by introducing the client and
ideas. Graphics and charts explain the insights it’s pain points. Summarize your solution and the
better than words. flow of the presentation
• Keep the content directional. • Highlight the key results, including 1 or 2 statistics
that drive home the takeaway message.
• Use Selective Bolding to stress upon an
important term and ensure to use clear • Mention the source in the footnotes and include
headlines for the readers’ convenience Appendix to show all the research, calculations
and basis of insights.
Glossary of
Useful Terms
Useful Terms
Time Value of Money

A sum of money today is worth more than
the same sum in the future, as it can earn
interest in the meantime. An investment
delayed, is a lost opportunity.
Suppose an initial investment

of $100 is expected to grow to Compounded Annual Growth
$150 in 5 years. Then the Rate(CAGR)
CAGR is calculated as Given the amount invested today and its
expected value in the future, CAGR is the
rate of interest at which the investment will
have to be compounded to give the expected
future value
Useful Terms
Due to the concept of time value, any cash flows in the future need to be discounted to determine their
present value.
Net Present Value(NPV)

NPV is simply the difference between the present value
of cash inflows and outflows. It is a metric used to
determine whether an investment is profitable.
Investments with negative NPVs are avoided.
Internal Rate of Return(IRR)

The internal rate of return is the discount rate
which would make the NPV equal to zero. It
helps to identify the annual growth rate. A
high IRR is desirable for an investment.
Useful Terms
Net Profit Margin
It is the ratio of net profits to revenue
expressed as a percentage. It represents
how much of each dollar collected in revenue
translates into a profit.
Return on Investment(ROI)
ROI indicates the total growth of an
investment over a set time period. The net
profit expressed as a percentage of the initial
investment is the ROI.
Break Even Point

In accounting, it refers to the production
quantity where production costs are
compensated by the total production
revenue
A Glimpse of
the PM World
What does a PM do?
A Product Manager, put simply, is responsible for the development of products for a company.
A Product Manager’s role is user and product-focused. It is easy to find questions, criticism, or feedback about a product.
Users are usually very vocal about issues or shortcomings they find within the product. The million-dollar question here is:
how will you improve the product?
A PM makes around 20-25 calls per week to identify with and fully understand the problems faced. Once they reach a deeper
understanding of the issues, they work on strategising a solution to the problem.
User As a PM, you fall at

the intersection of
Experience the 3.
Tech Business
What does a PM do?
Source: Catherine Shyu

How does one get shortlisted?
A meld of inter-personal, business, and technical skills, and an ability to think on one’s toes.
The Pre-requisites:
• Ability to pitch to and influence people
• Clear written and verbal communication
• Technical and business/sales acumen
• Eye-for-detail and quick-thinking
• Can assume ‘ownership’ of the product
Additionally, a prior PM intern, or projects showcasing your problem-solving abilities, or even managerial or decision-making
experience is a plus.
The Process:
Resume Slide decks/aptitude test* Interviews
*Check out our section on building amazing slide decks here.

Acing PM Interviews
General layout:
• Guesstimate*
• Product/Business case study
• Strategy based problem (Pertaining to a new product/market, or growth)
• Metrics-based questions
• Product Critique
• Technical round (occasionally)
- SQL-related question
- Techstacks of projects on your CV
*Find our in-depth section on guesstimates + examples, here.

Metrics Matrix
Q. What metrics will you use to track the success of your new ad campaign?
Basic Metrics: A. • Lead time before discovery

• Net Promoter Score (NPS)
For measuring the success of any product are: • App Installs
1. Awareness (Discovery) • Bounce rate

• Click-through rate (CTR)
2. Acquisition
• Traffic (organic/ads)
3. Conversion • Click-through rate (CTR)
4. Engagement • Retention rate
• Churn rate/app uninstalls
5. Retention
• Lifetime value (LTV)
6. Monetization • Return on ad spending (ROAS)
Product Critique
Q. What would you change/improve in your favourite app (e.g. LinkedIn)?
First Principles:
Clarify. Don’t rush off into solving the problem without gaining some context.
• What are the metrics to measure or quantify this improvement?

• Are the changes restricted to the app or applicable for the website as well?
• Are there any constraints to keep in mind?
• Any business goals for the improvement?
• Based on the metrics, is there any data available to corroborate our findings on what aspects to improve?
Let’s assume the task is to improve engagement on the LinkedIn mobile app by 5% over the quarter (Here, engagement
refers to average # of posts created in a unit span of time).
• Draft user personas of the major LinkedIn users. Prioritise 1 persona and their story.
• Utilise the job-to-be-done (JTBD) framework, i.e. retrace the consumer’s thought-process in selecting the given product to
fulfil their intended job.
Product Critique
Q. What would you change/improve in your favourite app (e.g. LinkedIn)?
Solutions:
Let’s say your focus group is college students.
• What do college students use LinkedIn for?

• What are the challenges that they might face?
• What additional opportunities can be created for them on the platform?
Finally, the solution(s). College students wish to share their upskilling experiences with their network. To enable them:
• Set-up campus-wide communities on LinkedIn, allowing students to showcase their talents and experiences.
• Create a featured editorial every week/month, featuring a selection of these communities and giving them exposure.
If there are multiple solutions, prioritise them.
• The RICE framework* (Reach, Impact, Confidence, Effort) helps achieve this.
*For more on the RICE framework, click here

User Personas
and Research
User Personas and Research
• User personas are archetypical users whose goals and characteristics represent the needs of a larger
group of users.
• User research is the methodic study of target users—including their needs and pain points.
How to build effective User Personas and conduct User Research?

1. Define your “Research Objectives”.
2. Decide the “User Base and Demographics.”
- Interview for User Persona (ask everyone the same kind of questions)
- Google Doc for User Research (should be user and product focused)
User Persona User Research
• Create 3-5 unique and detailed • Gather Data and make sense out
personas with consistent of it to fill in the gaps of knowledge.
layouts. • Try to answer the questions in
• Emphasize user’s motivation our Objectives.
and pain points.
User Persona Categories
B2B or Business-to-Business Buyer Persona.
• In this case, you are selling to other

Businesses which further sell the
product to customers.
• Like B2C examples, the B2B buyer

persona examples also focus heavily on
the individual customer.
The examples include more specifics like:
- Where the ideal customer works,

- What they do.
- How they interact with their organization.
User Persona Categories
B2C or Business-to-customer buyer persona
• In this case, you are selling directly to a

customer in the market without any notice
worthy intermediate.
• You should include work details in a B2C

buyer persona, you don’t have to share as
much information about their roles and
responsibilities.
Instead, you can focus more on:
- Who the person is in their day-to-day life.

- How they make individual purchasing decisions.
User Research
User research focuses on
understanding:
- User behaviors.
- Needs.
- Motivations.
Methods to Analyse
- Observation techniques
- Task analysis
- Feedback methodologies
- Experiments
- Surveys
- Questionnaires
- Interviews
- Case studies
Example showing User Survey on Before and After pandemic Purchasing.
Case Examples
Case #1
Revenue Decline (Profitability Framework)

Your client is an Air Conditioner manufacturer
who is facing a decline in profits. He wants you to
figure out the reason for the same
Clarifying Questions (1/2)
Questions by Interviewee Answers by Interviewer
Profits is a function of revenue and cost. I would like to understand We have seen decline in revenues only
which part of the function is causing a problem.
It would be good to know about the Company position in the market, Yes. Company is a market leader in the AC segment. It targets upper middle
product mix and the customer segment it targets. Do we have data on this? class consumer.
I would like to know the trend for revenues and profits for the past 2 years Revenue and profits have seen an overall decline of 10%
I would like to break the revenue into volume and price to understand the That seems fair. The decline in revenues is due to fall in volumes. What will
decline in revenues you do next?
Having known this, I would like to know the geographical segments, the The company operates primarily in Western India. The issue is specific only
company is operating in. Also, is the issue company specific or industry wide to the company
Okay. Is our product differentiable from the products offered by the The company’s product is superior in terms of quality as compared to
competitors in terms of features and price? competitors, but the price is almost comparable to them
If the product is superior in quality and yet affordable and there is no Yes. That’s correct.
industry wide issue, it should be in demand amongst the consumers. Can I
therefore assume that product is unavailable in sufficient quantity ?
In that case, company’s distribution channel needs to be analysed. Do we Company sells its products through distributors, who then sell them to
have data on the distribution channel of the company? retailers and is thereby made available to consumers.
I would like to assume that company is facing some problems with its Correct. Distributors feel that the margins offered by the Company is less as
distributors. Is my assumption correct? compared to competitors. Hence, they distributors have gradually reduced
Do we have details on the margins offered by us and by the competitors? Yes. We offer 4% margin whereas competitors offer 7% margins. How will
you solve this problem
Can we consider increasing the margin for distributors and absorbing the Consider the following data and then decide: Assume that the number of
increased expense in our income statement? units sold will be back to original levels if margin is made comparable to
competitors
Particulars FY2017 FY2019
Units Sold 100,000 90,000
Price to dealer 18,000 18,000
Expense per unit 14,000 14,000
Based on the numbers, Company made a profit of INR 40 Crs in FY 2017 and Yes. That would be a fair assumption.
INR 36 Crs in FY 2019. In case, the price is reduced by offering margin of 7%,
the revised price shall be approximately INR 17,400. The resultant profit
shall be INR 34 Crs. That would mean we would be worse-off than current
situation if margins are increased
Do we have data on the number of distributors and their geographical Currently, Company has 5 distributors. 2 distributors handle Gujarat region
spread along with the approximate number of retailers and their while remaining 3 handle Maharashtra region. There are 200 retailers in the
geographical spread? Western region, with 50 in Gujarat and 150 in Maharashtra. All the retailers
are widely spread across the two states
Also, is the Company exploring any other distribution channels such as e- Company itself has minimal presence on e-commerce portals. The products
commerce? are often sold by distributors on such portals
Approach (1/2)
Your client is an Air Conditioner manufacturer who is facing a decline in profits. He wants you to figure out the reason
for the same
Observations / Suggestions
Interviewee Notes Case Facts
• It is important to think
• Decline is because of lesser • Targets upper middle class
about distribution channels
demand from distributors on customer
which often goes unnoticed
account of lower margins
in profitability framework
• Market leader in the segment
• Profits will decline further if
• It is important to
comparable margins are offered to • Revenue and profits have seen a
understand how long the
distributors decline of 10% over 2 years
problem has been going on.
In this case the problem
• Retailers are widespread across • Company product superior to
started around 2 years ago
the western region competitors and pricing at par
which means that
something must have
• The problem is in the lower • Sale through distributor and
changed during this period
availability of the product retailers
which has led to a decline in
profits
Approach (2/2)
Your client is an Air Conditioner manufacturer who is facing a decline in profits. He wants you to figure out the
reason for the same
Recommendations
Profits
• Start direct transactions
Revenue Cost with retailers by on-
boarding a factoring agent
to handle invoicing and
Price Quantity collection
• Start selling on
Customer Ecommerce portals directly
Need Awareness Accessibility Affordability
Experience from company.
Distributor
Margins
Channel
Case #2
Revenue Decline (Profitability Framework)

Your client is a cafeteria owner who is facing a
decline in profits. It wants you to figure out the
reason for the same.
Since when has the client been seeing decline in its profits? Also, do The client has been seeing decline is profits for the past one year, but
we have the magnitude of decline? there has been a significant decline for the past three months.
Is it only the client’s cafeteria which has seen the decline in profits or Other cafeterias have also seen some dip in their profits but the client
other cafeterias in the area have also seen a declines? has been significantly impacted.
Now I’d like to understand more about our client. What type of a The client has one high-end multi-cuisine cafeteria located in a high
cafeteria is it? And where exactly is it located? footfall area of Agra.
Due to the Taj Mahal, Agra attracts a lot tourists. I’d like to understand This is a fair observation. The customers are mainly tourists and you
the type of customers that visit the cafeteria. Locals or tourists? can consider them to be international tourists.
The decline in profits could be due to increase in costs or decrease in The revenues have declined significantly, while the costs have
revenue or both. Do we have an idea which side the problem lies? declined marginally
Since, revenues have seen a major decline, let’s first understand the The client only has dine-in cafeteria services and does not provide
reasons for its decline and then explore the cost side. A cafeteria can alcoholic beverages
have multiple revenue streams including dine-in, take-away and
delivery. It can offer both food and beverages including alcoholic and
non-alcoholic. Is our client into all of these services. Has any one of
these services observed a greater decline than others?
Has the average number of customers being served at the cafeteria in The average amount spent per customer has not changed but the
a day or the average amount spent per customer decreased? number of customers visiting the cafeteria has decreased.
Do we know if this decrease is because the client has not been able The client has been able to cater to all the customers who have
to cater to the customers willing to visit the cafeteria or the demand visited its cafeteria.
for the cafeteria has declined?
This implies that the customers visiting the cafeteria have decreased. The total number of tourist visiting India and % of those who visited
The problem could lie in any of these parts, number of tourists visiting the client’s cafeteria, both have declined.
India or visiting Agra or visiting the client’s cafeteria
This is interesting. Let’s first look at why tourist visiting India have With the current slowdown internationally, the international tourism
decreased. This decrease could be either due to a change in the market has seen a decline and India has been affected by it too. Now
International perception about India, increase in processing or their can you look at why the % of tourists visiting the client’s cafeteria has
country’s economic reasons or increased availability of alterative decreased?
options.
To understand this, I would look at the journey of the consumer from Sure, please go ahead.
the time when it decides on which cafeteria to eat, to actually eating
the meal at the cafeteria.I would like to divide the journey into three
parts comprising the decision to eat food till reaching the cafeteria, the
experience inside the cafeteria and the journey after leaving.
To finalize the client’s cafeteria to eat, the customer needs to be Yes. A few months back, the cafeteria decided to reduce the
‘aware’ about the cafeteria. Many tourists check reviews on websites commission of the tourist guides because of which these guides have
such Tripadvisor or niche food bloggers. The promotion done by now started recommending our competitor's cafeterias to the tourists.
cafeteria through posters and hoardings also helps. Many ask for You can now move to the next phase of the journey.
recommendations from their friends, travel agents and from the tourist
guides. The tourist will then ensure ‘affordability’. The cafeteria should
be ‘accessible’. Mismatch in location from google maps, change in
routes or blocks due to construction activities, difficulty in parking
spaces etc. could negatively impact the tourist's decision to visit the
cafeteria. Do we know is there any problem here?
Interesting. This can potentially explain why the costs also decreased, Can you look at the ambience part in more detail? What all would it
but we’ll look into it later. Once, the customers reach the cafeteria, entail?
they may have to wait before their turn comes. Then they enter the
cafeteria and take a seat. The seating arrangement, presentation of
cutlery and other amenities will effect the overall perception. The
customer places an order using a menu, where the presentation in the
menu is important. Having placed the order, the waiting time, waiter’s
hospitality and food quality and quantity will be important. Finally, the
ambience also adds to the experience. Has there been changes in
any of these?
Sure. The ambience to a cafeteria is aided by the features inside the That’s great. A building construction started three months back which
cafeteria like the music, fragrance, visual appeals of the paintings, the has blocked the view of Taj Mahal from the client's cafeteria. This has
overall décor etc. The view from a cafeteria also adds to the deterred many customers. Can you quickly also look at the last part of
ambience, used by roof-top cafes, sea-facing cafeterias etc. Here, a your journey?
view of Taj Mahal can be an added experience to the customers.
Once the customer has exited the cafeteria, she may avail a service Outside the cafeteria was a famous paanwaala shop which got closed
from near the cafeteria including local shopping or visiting a sweet due to the sad demise of its owner. This has also impacted few
shop. She may have to take a transport mode to visit another place. customers. Can you give some recommendations now?
The cafeteria may engage in loyalty programs as well. However, since
tourist visits are generally a one-time visit, loyalty program doesn’t
seem to be important here. Can you suggest if any of these has had
any changes in recent times?
Approach (1/2)
Your client is a cafeteria owner who is facing a decline in profits. It wants you to figure out the reason for the same.
Interviewee Notes Observations / Suggestions Recommendations
• Since the competition is also • While moving from one phase • Since the Taj Mahal has been
facing decline in profits, it is likely of the customer journey to obstructed from view, the hotel can
to be an industry wide issue. But another (say from pre phase to provide differentiated ambience with
higher decline with the client the during phase), one should local Agra’s feel, value added
suggests client specific issues as confirm from the interviewer if services and open a paan counter
well. she has covered all the to try replacing the paan shop
aspects. This ensures that one experience.
• Before proceeding ahead with the doesn’t move back and forth
decrease in revenue, it is the phases of the customer • Since there has been a decrease in
important to understand if it is a journey. offline advertising through agents,
demand or supply side issue. we can look at our increase in
• Structure the recommendation offline advertising through tie ups
• Specifics about the Agra city and do not give a laundry list of with hotels, maintaining good rating
should be kept in mind to suggestions. on food apps etc. We can have
customize the arguments. strategic ads near prominent areas
in Agra.
Approach (2/2)
Your client is a cafeteria owner who is facing a decline in profits. It wants you to figure out the reason for the same.
Case #3
Market Entry
Our client is a Telecom operator. They are looking
to diversify their presence in India and wish to
enter the electronic home security market. They
want you to estimate potential profits and want
you to suggest how to capture a significant
market share.
What market share is significant enough for the company? In how much About 5% in the first year.
time they wish to achieve this target?
So our objective is to estimate potential profits along with having a strategy Correct.
to achieve a 5% market share at least
What are the products we’re talking of in the home security business? There is essentially one product. It’s an alarm system which is installed in
the home along with sensors. Whenever someone is trying to burgle the
house, the alarm goes off
What part of the value chain are we looking to enter? We have not decided but generally industry players manufacture and use
third parties to distribute and retail
What geography are we looking to sell in? Anywhere in India where there is a market
We will have to do a guesstimate to find the market size currently Good let’s say we do this analysis and find that the market size is 15mn
household. Let’s move on from there.
Just to put this number in perspective what is the market share of the The industry is highly fragmented with mainly local players. The largest
largest player? player has a market share of about 5%
I want to understand what drives local dominance? Well, the industry is such that majority of costs are concentrated in
transportation of the fragile equipment. Lesser the distance from factory
lower the cost. Since manufacturing is cheap and transportation is not,
factories are set up close to markets.
And, what is the growth rate of the industry? It is about 10%.
There are two ways to enter the market, displacing existing players or taking We don’t have a product of our own. We plan to enter with the same type
a slice of the growing market. However, because of the fragmented nature of products that already exist at the same prices.
of the industry, if we have to capture a significant market share through
either path, we will need to have a competitive edge in our product. I would
like to benchmark our product with competitors to see if we have an
advantage. I’d like to do it on basis of price and other product parameters.
If our product is going to be the physically the same, then to capture a a) We don’t even have internal ability to produce this type of equipment
significant share in such a fragmented industry, can we get an edge on b) Lowering transportation cost has been looked into and is difficult. Also
a) Production front leading to lowered cost and hence lower prices because the market is very competitive we cannot afford to pay higher
b) Distribution front leading to lower transportation cost and distributors margins to distributors
favoring to push our products over competitors c) Consumers are price sensitive, do not care much about product brand.
c) Marketing
This means independently we cannot have a significant share. Then the only Yes, we do
remaining options to capture a 5% market share are through a Joint Venture
or by Acquiring existing players. For that however we would need enough
capital, do we have that?
I would like to know the price of existing products since that would be our They are generally priced between Rs. 5,000-15,000. The margin earned is
price as well 10% of the revenue. There is a servicing package which is bundled. Usually
Rs. 200 per month is charged, and a margin of 25% is earned in servicing.
Why is there a range in price of the product? Is it due to difference in No there is no difference in quality. Each product has a main alarm system
quality of product or brand? along with sensors placed in different parts of the rooms. The price
increases as the no. of sensors required are more.
Approach (1/2)
Our client is a Telecom operator. They are looking to diversify their presence in India and wish to enter the
electronic home security market. They want you to estimate potential profits and want you to suggest how to
capture a significant market share.
Market Size Estimation

Population
We can begin by first estimating profits. 1 billion
Profits = (Market Size) x (Market Share) x (Profit per unit) - (Investment)
While analyzing market share we can see how to ensure a minimum 5% share.
We’ve assumed a 70-30 Rural-Urban divide. Avg family size is take as 5 and 4
Rural Urban
respectively for Rural and Urban families.)
700 million 300 million
Next we will have to see
a) How many families can afford to purchase the home safety units?
b) How many families would buy them given some of them live in “high risk” Rural Families Urban Families
and “low risk” areas 140 million 75 million
A smaller % of rural families would be able to afford the equipment compared to
urbanites. We will have to also see how many families in each segment need
the equipment depending on degree of criminal activity and available security
measures (police enforcement, building security, CCTVs)
Approach (2/2)
Our client is a Telecom operator. They are looking to diversify their presence in India and wish to enter the
electronic home security market. They want you to estimate potential profits and want you to suggest how to
capture a significant market share.
Profit Per Unit Estimation Case Observations

We can divide the 15mn households into 33% small houses requiring a unit Joint venture would make sense if there is
priced at 5,000 33% medium houses requiring a unit priced at 10,000 33% some part of the value chain where we can
large houses requiring a unit priced at 15,000 Okay. complement existing players, either in
production, distribution or marketing/retailing
Let’s go ahead with that assumption. The average price is Rs. 10,000. We so that together with our partner we have an
know we earn a 10% margin which will result in a Rs. 1000 profit. Apart from edge. However we’ve already seen that we
that we know that Rs. 200 per month is charged with a margin of 25%. cannot manufacture and cannot provide any
edge on distribution or marketing front.
What is the life of any unit? One year. Then for every unit sold we earn 200x12
= Rs.2400. At a 25% margin this means an additional Rs. 600 of profit.
Hence total profit on a product is 1000+600 = 1600. Hence our expected profit
= (Market size) x (Market share) x (Avg Profit per unit)
= 15mn x 5% x Rs. 1600 = Rs. 120 crore
Case #4
Market Entry
The client is in the business of making anti smoking pills -
the way we have those patches and lozenges in the market
to curb the urge to smoke. The client wants to sell it at a
premium price. You have been hired to find out if the
product can be introduced in a country like India.
I would like to confirm if I have understood all the critical aspects of That’s right. Now that you’ve understood the situation well, how do
the client’s situation. Our client is in the business of making anti- you propose going about the solution?
smoking pills that reduce the urge to smoke for smokers. We need to
do see if the product is feasible to be launched in India and evaluate
the market characteristics such as size and client’s share based on
the price
Since this is a new product launch, I would like to structure my This sounds fine to me. Also, please note that this product is not
discussion around the product characteristics (development and entirely new; it has been introduced in other countries already
customization) for the Indian market and then move on to the launch
(competition, distribution and promotion) part of the case
Ok, that experience should definitely help us. To start with, can you Unlike the lozenges or patches, this product is completely nicotine
tell me something more about the product? How is it different? free - it is 5 times more effective as proved by lab results and 50% of
the test results responded to the pill (which in this industry is an
extremely high number thus indicating success). Moreover, it is a drug
that cannot be sold over the counter – it requires a prescribed dosage
given by the doctor. It is to be taken for 3 months daily, 3 times a day
That is good. It gives us the advantage to position our product as That’s a fair point. So, there is no similar product in the market.
superior due to the higher efficacy of treatment. I would like to know Cheaper products like lozenges exist but they contain nicotine and
take up the competitive scenario next so that we can decide the price sell for Re. 1 per unit.
before determining the overall market size.
What are the other countries where the product has been introduced? The other countries have smokers who are quite similar to the Indian
How receptive have the customers been in those countries? consumers. The product has been quite a success.
Ok, this means that the target audience will be receptive to the product and Hmm… that is good. In our case, let us assume we did this and
we can assume that there is a strong market for the same. I will now came up with Rs. 8 per unit. You think that sounds reasonable?
proceed with the estimation of the price and market size. There are two
ways that we can price a new product in a non-competitive market: Cost
based and ‘willingness-to-pay’ based. In the first, I would calculate the cost
to company and charge a margin on the same while in the second case; I
would calculate the propensity of the consumer to pay for this drug. This
would vary with my target segment chosen. Ideally, we should be able to
calculate the optimal profit case by considering the trade-off in sales
volume vs. price for various price points. The solution will also be
influenced to an extent by the growth rates of the different target segments
overall, say movement of people to upper-class from lower-middle class.
I think a price of Rs. 8 per pill is feasible because of the lab results - people Ok, let’s estimate the market size assuming we decide to price it
will be convinced that it is a medically prescribed drug and since it is a pre- at Rs. 5 per unit.
scheduled dosage for 3 months, results are guaranteed.
Let’s take Delhi as a base case. Population: 150 lakh. Target segment: 40% Very interesting. What will drive the market growth our market
of them smoke * 20% of them would want to quit smoking * 75% can afford share?
(Rs. 8 * 3 * 90 = Rs. 2160 drug to quit) = 9 lakh people or INR 9 * 2160 ~
INR 200 crores. Assume that this drug will reach out to 25% of the
population across India (urban + rural since its effective and one-time
payment to quit smoking), which means the total market is 200/150 * 0.25 *
10,000 lakh = INR 3,333 crores.
The market growth rate will be affected by the sales and distribution coverage, Good. What about the other 20%?
willingness of people to quit smoking and addition of new smokers who would
want to quit after sometime. We can look to capture about 80% of this market
eventually, assuming no major competitor enters the market, which can be
prevented by IPR support. Since this is a prescription drug, the bulk of the
promotion costs in this industry are in targeting the doctors and chemists via
direct sales agents or Medical Representative to convey the pros and cons for
them to a) prescribe the drug and b) keep it in their pharmacies. This will drive
our market share from the potential market size
I am assuming that the remaining 20% will comprise of smokers who are Good. Any other costs/concerns that you would like to
unwilling to quit smoking (10%), perceive the price to be high (5%) or are not address?
aware of the product (5%). This percentage can decrease as we move further
in the product life cycle and the product becomes well established through
marketing and promotion efforts.
The training costs for the direct sales agents will also be critical as this is a Good, I think we have covered the different aspects of the
new product and local agents would need an in-depth understanding of the case. Thank You.
product. No. of sales people can be calculated by total workload method:
Assuming Doctor/Population ratio and say 3 doctors per day and repeat visits
every 2 months; and Chemist/Population ratio and 3 chemists per day and
repeat visits every 15 days. The supply chain will have to be considered - the
warehousing, distribution network, retail chains etc. We can perform the cost
benefit analysis for using middle distributors v/s direct distribution
Approach (1/2)
The client is in the business of making anti smoking pills - the way we have those patches and lozenges in the market to
curb the urge to smoke. The client wants to sell it at a premium price. You have been hired to find out if the product can be
introduced in a country like India
Introduce Anti
Smoking Pills in
India
Profit and break

Initial Investment Value Chain
even point
Potential
Distribution Marketing Cost
Revenue
The drug cannot be sold as OTC and

Target Category Number
would require prescription. Medical Price
Market Projection
representative and direct sales agents
Population Base in Delhi 150 Lakhs
need to be hired who can push the
product to the doctors who in turn will % population who smoke 40%
prescribe it to the patients. Client needs % smokers to quit 20%
to invest in training of its sales reps so % quitters who can afford product 75%
that they can convince doctors with Potential Consumer Base 150*0.4*0.2*
product’s value proposition 0.75 = 9 lacs
Approach (2/2)
The client is in the business of making anti smoking pills - the way we have those patches and lozenges in the market to
curb the urge to smoke. The client wants to sell it at a premium price. You have been hired to find out if the product can be
introduced in a country like India
Interviewee Notes Observations / Suggestions Recommendations
• New product launch – Anti • Client is in the business of • Price point should consider both
smoking pills making anti-smoking pills and customer’s willingness to pay and
• Country – India wants premium price for its product’s incremental value
• Premium product requires product proposition over existing products in
premium price • Marketing of the product can the market
• Product characteristics (suitability be briefly discussed since the
for Indian market) & Product product charges a premium • IPR/ Patenting the drug can prevent
launch (competition, distribution price to its customers competitors to enter market and
and promotion) • Long term product goals and facilitate capture of market share
• How is the product different from ways to improve product
existing products? penetration across its lifecycle • Spend more on training the medical
• What is the competitive scenario could have been discussed representatives and direct sales
in the market • Remember to use comparable agents to push the product to the
• Product has already been from similar launches by same doctors who in turn will prescribe it
introduced in some countries company or competitors to the patients
References
• Case Interview Secrets – Victor Cheng
• Case In Point – Marc P. Cosentino
• Guesstimation 2.0
• IIM A Case Book

@caciitg /caciitg /company/caciitg
Consulting & Analytics /caciitg

Club IIT Guwahati

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Consulting

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I. A Peek into Consulting V. Case Frameworks

Identify Challenges of the Company and Define all

Understand the condition of the market and position

Create and implement a structured approach

Recommend a proper elaborate action plan to solve

Continuous Evaluation of the proposed solution and

Understand the Generate relevant

• Be calm, confident and patient with your approach.

• Making an issue tree is essentially Sub-Issue 1

• MECE stands for Mutually Exclusive and Collectively Exhaustive.

• Ideally up to 3 sub-objects are desirable for each problem.

1. Divide and Conquer

2. Add mini MECE layers to each subsequent layers

This will help to solve the problem efficiently at each layer.

3. Continue until you solve the problem

- Percentage of subscription = 80%

Cost = no of magazines * no of ads per magazine * cost of ads

Premium # of ads per

Guesstimates in a Practical Context:

Great way to perform sanity checks

Cheaper and quicker than surveys/censuses

Does the answer approaches assume

Math & sanity checks

It is a good practice to Calculate, then test

Calculations: 125 crore

Breaks in 1st half x High productivity

• # of floors: For a MNC in Mumbai, as a conservative estimate, 10 floors is a reasonable assumption.

BCG Interviews Bain & Co.

• Describe how you measure the average time taken to

McKinsey Interviews Wall Street Firms

ZS Associates Software Companies

• How Many Basketballs are Purchased by NBA Each Year? (Accenture)

• How Much to Pay for the World’s Only Dinosaur? (Accenture)

• Number of Medium size industries in Mumbai? (Deloitte)

• How Many Piercings Are Done in India in a Year? (Capgemini Consulting)

• What is Annual Demand for Natural Gas in India? (A.T. Kearney)

• Starting a new business

• PESTEL Analysis helps us identify the EXTERNAL factors

• These factors affect your business and operations but the

• The company has no say on these factors. But conducting a

POLITICAL ECONOMICAL SOCIAL

• Need to make its stand clear • Easily accessible • User friendly

TECHNOLOGICAL ENVIRONMENTAL LEGAL

Why do we need Porter’s 5 Analysis ? Points To Remember

• Identify opportunities and risks • Consider the industry lifecycle stage-earlier

changing trends • Avoid using the model for an individual firm; it is

Threat of Substitutes Customer

• These can be analyzed better using Porter’s 5 Forces Analysis.

ACTIVITIES Firm Infrastructure

Human Resource Management

Inbound Operations Outbound Marketing Service

Free & unlimited WIFI , use of Apple’s iBeaon system

Benefits ,incentives & training programs to keep

Corporate Business managers & store managers help to

INBOUND LOGISTICS OPERATIONS OUTBOUND MARKETING SERVICES

What is the BCG Matrix and how is it

• The BCG matrix helps the company allocate

Market Growth Rate

• In this matrix we take the market share of the

Dogs Cash Cows

Market Growth Rate