Case #17

Case #17
Inspired by BCG
Betacer
2020
© 2021 Peter K. More at Peter-K.org | 271

Week 3. Market entry Case #17. Inspired by BCG. 2020. Betacer
Case #17. Inspired by BCG. 2020. Betacer
Prompt Additional information Case type
• Betacer is a major U.S. Please provide this information • Market entry

electronics manufacturer only upon request • Medium-Hard level
that offers laptop and • Betacer would like to payback their
desktop PCs, tablets, • Candidate-led case
investment within 2 years after the
smartphones, monitors, market entry • Expected time is 15-
projectors and cloud • Betacer plans to target the mass 20 minutes
solutions for home users, market, not hardcore gamers
business and government.
• The client would like to focus on
Given low or negative
the U.S. video-game market
growth rate in various
segments of the • It’s a $175B global market that sky-
electronics industry, rocketed in 2020 (see Appendix 1)
Betacer is looking for • It’s a fragmented space with a lot
expansion opportunities of big-name players (see Appendix
and is considering 2)
entering the U.S. video- • The U.S. video-game market was at
game market. They’ve $41B in 2020 (see Appendix 3)
reached out to you to get • Betacer doesn’t want to explore
your advice on whether other growth opportunities but to
this is a wise idea. focus on this market expansion

Opening. Make sure the candidate follows these steps
Step 1. Typically the candidates are expected to restate the prompt to make sure they are
Restate the on the same page with the interviewer
prompt
Candidates can react to the prompt by providing some quick thoughts which will
demonstrate candidates’ business acumen, e.g.:
• “At first glance this choice makes sense, as the pandemic likely positively affected
the video-game market. Driven by anxieties and social isolation people turned to
Step 2. Add video-games to entertain themselves, fill their time and connect with friends”
colors • “Betacer might expect some marketing and distribution synergies as they produce
(optionally) smartphones and PC, major video-gaming platforms”
• “Great to see that Betacer is a big-name player as they likely enjoy high brand
awareness and deep marketing pockets which they might leverage for their
market expansion”
It is common that candidates ask 2-3 clarifying questions before designing their
framework. Typical questions include:
Step 3. Ask • Geography of client’s operations/sales
2-3 • Financial goal
questions
• Business model of the client
• Typically candidates ask for a couple of minutes to structure their approach

Step 4. Ask • Sometimes during interviewer-driven cases, the interviewers ask the first question
for a moment and then the candidate takes time to build their framework
to structure

Case questions (this is a candidate-led case)
What factors would you consider to suggest whether Betacer should

01
enter the video-game market?
02 How do customers choose which video-game to purchase?
What synergies might Betacer capture by entering the video-game

03
market?
How many customers should Betacer attract to payback their $1M

04 investment in a smartphone game “Treasure Hunters” within 2 years after
launch?
Appendix 1. Appendix 2. Appendix 3.

Tips for candidate-led cases
• Try to minimize hand-holding. Try to let the candidate ask

questions
• If the candidate isn’t on the right track and seems lost, try to
give a hint or ask a question from the previous slide
• Feel free to manage the conversation to hit all the questions from
the previous slide, e.g.:
− “That’s a great question! What do you think?”
− “Sure. Before we dig into that, what are you thoughts on … [the
question from the list]?”
− “Yeah, that makes sense. The manager just walked in and they
would like us to look into… [the question from the list]”
− “Sure, we’ll explore it. Before that, let me share some data from
our analyst/client that we’ve just received and… [ask a Math
question]”
• When the case time is running out, prompt the candidate to provide
recommendation (see question 5)

Q1. What factors would you consider to suggest whether

Betacer should enter the video-game market?
Video-game Betacer Financial Potential market

market assessment entry risks
• Size and growth • Target customer • Expected • Market specific

rate segments (e.g. profitability
• Major video-game children or adults; • Financial
– Forecasted
producers low-end/high-end) revenue and • Operational
• Typical profitability
• Offerings (video- market share
• Substitutes (e.g.
TV-streaming game types and – Estimated costs
services, leisure platforms; etc.)
• Required capex
activities) • Planned
• Payback period
distribution
channels
Note: This is just one of many potential ways to structure your approach. Please treat this example only as a reference point and develop your own style.
© 2021 Peter K. More at Peter-K.org See e-course: “Structuring”, Lecture 4. “Market entry cases” (7 min) | 276
Q1. Make sure the candidate follows these steps

Step 1. Do The best practice is to start with a 15-second big-picture overview, e.g. “I’d like to
horizontal assess this problem through the lens of four areas – first, …; secondly, …; thirdly, …;
presentation and finally …”
Check if the candidate covers all key points typical for a market entry case structure:
Market assessment Business model Financial analysis
• Size • Client segments • Expected profitability (e.g.
Step 2. Hit • Growth rate • Product portfolio revenue and costs)
key points • Competition • Expected capex
• Typical profitability • Investment criteria
To avoid cookie-cutter/generic approach, the candidates can incorporate 2-3 stories

into their structure presentation, e.g.:
• “My running hypothesis is that this is an enormous market as video-gaming is one
of the major entertainment ways nowadays, and is part of the lifestyle for many”
Step 3. Add • “This is likely a capex-intensive and thus volume-driven business with high R&D
stories costs and thus number of users might be a key success factor”
(optionally) • “Barriers for entry for some video-game segments might be low. For example,
smartphone games are sold through a transparent well-developed app stores like
Apple and Google Play that provide direct access to end users”
At the end of the structure presentation, it is helpful for candidate to show that they
Step 4. Finish can drive team forward and prioritize, e.g. “Does this structure come across as a fair
with a approach to you? If so, do we have any information on the market size?..”
question

Q2. Key purchasing decision making criteria
02 How do customers choose which video-game to purchase?
Great Appealing Convenient Attractive value

perception pricing distribution proposition
§ Know and heard about the [Given most video-games [Like any software, video- [Each gamer might have their
video-game a lot [high target mass market, the end games are fairly easy to find preferences in terms of type,
brand awareness due to users are likely price-sensitive] and purchase online, through level of difficulty, time
marketing campaigns, app store at smartphone, or commitment and other aspects
§ Free or appealing pricing
promotions, etc.] (both one-time and in- tablet] of a video-game, which
§ Social pressure [a lot of game purchases) § Easy to find and purchase - suggests there are a lot of
available at app store or various customer segments]
their peers play this game § No need to purchase a new
and they don’t want to miss online § Platform compatible (e.g.
platform (e.g. console or
out] PC) and thus no additional doesn’t require console)
§ Peers highly recommended costs § Matches preferred game
this video-game type (e.g. fights, strategy)
§ High rankings § Offers high-value features
(e.g. in-game social
§ Positive reviews
interaction with friends,
team-based activities)
§ Sense of novelty, clearly
differentiated type of a
game
Note: This is just one of many potential ways to brainstorm. Please treat this example only as a reference point and develop your own style. [The candi-
date is usually expected to generate at least 4 ideas. The best practice is 7-8 ideas, structured approach, and on-the-fly delivery without taking notes]
© 2021 Peter K. More at Peter-K.org See e-course: “Brainstorming”, Lecture 3. “Revenue growth ideas” (10 min) | 278

• 80% of interviewers feel comfortable when candidates take 30-40
Step 1. Take seconds to think and write down their ideas before walking the
time or do interviewer through them
on-the-go • The best practice is to ideate on-the-fly
• The best practice is to structure brainstorming and offer a 10-second

top-down overview, e.g. “Sure, I’d like to think about purchasing
Step 2. Do reasons through four areas - marketing/perception, pricing,
horizontal
distribution, and value proposition. On the marketing side, the
presentation
(optional) reasons might be…”
• Regular feedback from consulting firms is that candidates offer only

Step 3.
three ideas which is a bit on the lower end
Provide at • Push the candidate to provide at least 4 ideas
least 4 ideas • Top-5% of candidates can usually suggest 7-8 ideas
• To impress the interviewer, the candidates can contextualize some of

Step 4. Add their ideas
colors • Example are given in [] brackets on the previous slide
(optionally)

Q3. Synergies
03 What synergies might Betacer capture by entering the video-game market?
Revenue synergies Cost synergies

[Betacer enjoys several core [Expanding product portfolio
capabilities they can leverage to typically leads mostly to revenue
sell video-games - established synergies, but there are some
distribution and marketing channels and a cost synergies as well.]
strong brand.] • Shared overhead (e.g. management,
• Leverage established distribution central services)
infrastructure for offline sales of video-
games • Potentially better markups from
• More bundling options (Betacer’s laptop or distribution partners for larger overall
smartphone + video-games at a discount) sales (electronics and video-games)
• Capitalize on Betacer’s high brand
awareness to promote video-games
• Launch co-marketing campaigns to
promote video-games
Note: This is just one of many potential ways to brainstorm. Please treat this example only as a reference point and develop your own style. [The candi-
date is usually expected to generate at least 4 ideas. The best practice is 7-8 ideas, structured approach, and on-the-fly delivery without taking notes]
© 2021 Peter K. More at Peter-K.org See e-course: “Brainstorming”, Lecture 6. “Other major types of brainstorming” (10 min) | 280

• 80% of interviewers feel comfortable when candidates take 30-40
Step 1. Take seconds to think and write down their ideas before walking the
time or do interviewer through them
on-the-go • The best practice is to ideate on-the-fly
• The best practice is to structure brainstorming and offer a 10-second

Step 2. Do top-down overview, e.g. “Great question. I’d like to break it down into
horizontal
revenue synergies and cost synergies”
presentation
(optional)
• Regular feedback from consulting firms is that candidates offer only

Step 3.
three ideas which is a bit on the lower end
Provide at • Push the candidate to provide at least 4 ideas
least 4 ideas • Top-5% of candidates can usually suggest 7-8 ideas
• To impress the interviewer, the candidates can contextualize some of

Step 4. Add their ideas
colors • Example are given in [] brackets on the previous slide
(optionally)

Q4. Math exercise – prompt

How many customers should Betacer attract to payback their $1M investment in a
04 smartphone game “Treasure Hunters” within 2 years after launch?
Please share with the candidate Please provide this additional

the following information information only upon request
• Betacer plans to invest $1M in the design • Typical commission of app stores (e.g. Apple
and development of a smartphone game App Store, Google Play, Microsoft Store) is
“Treasure Hunters” 30%
• The game is going to be free with in-game • Expected annual opex is $0.2M (apart from
purchases app store commission)
• Average spending per paying user for similar

games is $120
• Share of paying users among all users is 5%

Q4. Math exercise – calculations

Contribution
$120 per (1 - 30%)
margin per 5% $4.2
user paying user [commission]
Total costs for

$0.2M $1M
2 years (capex 2 years $1.4M
and opex) in opex in capex
Number of
users needed $1.4M $4.2 330k
to payback
Betacer should acquire 330k users to payback

their investment within 2 years

Q4. Math exercise – contextualization of the answer

Basic • In order to payback within 2 years their investment Betacer should

comments attract 330k users for their smartphone game “Treasure Hunters”
(expected from
everyone)
• 330k users sound realistic as it is a fraction of the U.S. market and

Betacer enjoys deep marketing pockets to ensure aggressive promotion
• $2M in sales [330k * $120 * 5%] also seems manageable
Advanced • Given this is going to be the first Betacer’s experience in the video-
comments (for game production, there might be some bugs and flaws in design that
outstanding would likely hurt the sales
candidates) • The smartphone game space is extremely crowded and in order to keep
healthy sales of Betacer’s game the client should ensure sustainable
marketing support which might exceed $0.2M in annual opex
Note: The candidate is not expected to mention all the advanced comments, but adding some of them will demonstrate that the candidate can connect the
dots, see the depth, add colors and bring some insights even if the candidate is not that familiar with the industry/topic

• Providing big-picture approach of how to calculate the answer might

Step 1.
help the candidate gain more points and help the interviewer follow
Structure
approach the candidate’s thought process
Step 2. Clarify • Often interviewers don’t provide all the information

missing data • The candidate needs to proactively ask for missing pieces
points
• Ideally the candidate shouldn’t make any mistakes

Step 3. • It is okay to ask for some time to run numbers and then walk the
Calculate interviewer through the calculations (some interviewers though might
accurately push back and ask you to do your Math on the fly)
• The interviewers highly appreciate it when the candidate not only

Step 4. Add calculates the answer correctly, but also contextualizes it
colors • See some advanced comments on the previous slide as example of
(optionally) the contextualization

Q5. Recommendation
The project manager bumped into you at the elevator and asked you to summarize your
05 current recommendations.
“Based on our initial assessment, the U.S. video-game market seems fundamentally
Recommendation
attractive for Betacer to enter”
• “It’s a $41B space that has been experiencing exponential growth and grew by 30-
40% during 2018-20”
Reasoning • “The competitive landscape is fairly fragmented with no clear dominating player which
offers space for new entrants”
• “Betacer will likely be able to payback their investment within 2 years after launch”
“However, there are some risks to consider like product-market mismatch as for Betacer it
is going to be the first experience and their video-game might not find healthy appetite
Risks
among users. Secondly, the competitive landscape might start consolidating. And thirdly,
our assumptions for financial modeling might not be validated”
”As for our next steps, I would suggest design a risk mitigation plan and develop a go-to-
Next steps
market roadmap”
Note: This is just one of many potential ways to make a recommendation. Please treat this example only as a reference point and develop your own style.


• The ”industry standard” of the conclusion is to structure it as RRRN –
Step 1. Start recommendation, reasoning, risks, and next steps
with recom-
mendation • Make sure the candidate start with the recommendation as this
demonstrates a top-down approach
• To ensure a comprehensive recommendation, the candidate is

Step 2. expected to provide some rationale
Provide • One piece of reasoning might be a bit on the lower end, whereas 2-3
rationale points usually make a robust recommendation
• The recommendation typically comes with the risk assessment to

make it more balanced
Step 3. • Similar to rationale, one risk is usually a weak answer, so the
Suggest risks
candidate should aim for 2-3 risks in their recommendation
• Next steps show the candidate’s forward-thinking approach

• A good standard is to provide 2-3 next steps
Step 4. Finish • Typical next steps are to build a risk mitigation plan and conduct
with next additional analyses that were part of the opening framework, but
steps weren’t covered during the case
• The overall time for the entire recommendation is usually under 1.5 min

Appendix 1. Global video-game market size by segment
Global video-game market size by segment, Bn USD (2018-20)
Browser PC Boxed/Downloaded PC Console Tablet Smartphone
200
180 175
3
160
146 34
138 3
140 4
32
120 29
51
100
35 42
80 11
60 14 11
40 75
56 58
20
0
2018 2019 2020

Appendix 2. Competitive landscape of global video-game

market
Competitive landscape of global video-game market*, % (2020)
Market size = $175B
Tencent
15%
Other players
40%
with market share 12% Sony
of less than 5%
9% Apple
8%
5%
6% 6% Microsoft
Activision Blizzard
Google Nintendo
© 2021 Peter K. More at Peter-K.org Note: *only software sales, excludes hardware sales | 289
Appendix 3. Global video-game market size by region
Global video-game market size by region, Bn USD (2018-20)
Middle East and Africa Latin America Europe North America Asia-Pacific (APAC)
200
180
175
6
160 7
146
138 5 33
140 5
5 4
120 27
24
45
100
33 37
80
60
40 84
71 72
20
0
2018 2019 2020
U.S. 30 34 41

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Case #17

© 2021 Peter K. More at Peter-K.org | 271

Case #17. Inspired by BCG. 2020. Betacer

Prompt Additional information Case type

• Betacer is a major U.S. Please provide this information • Market entry

© 2021 Peter K. More at Peter-K.org | 272

Opening. Make sure the candidate follows these steps

• Typically candidates ask for a couple of minutes to structure their approach

© 2021 Peter K. More at Peter-K.org | 273

Case questions (this is a candidate-led case)

What factors would you consider to suggest whether Betacer should

02 How do customers choose which video-game to purchase?

What synergies might Betacer capture by entering the video-game

How many customers should Betacer attract to payback their $1M

Appendix 1. Appendix 2. Appendix 3.

© 2021 Peter K. More at Peter-K.org | 274

Tips for candidate-led cases

• Try to minimize hand-holding. Try to let the candidate ask

© 2021 Peter K. More at Peter-K.org | 275

Q1. What factors would you consider to suggest whether

Video-game Betacer Financial Potential market

• Size and growth • Target customer • Expected • Market specific

Q1. Make sure the candidate follows these steps

To avoid cookie-cutter/generic approach, the candidates can incorporate 2-3 stories

© 2021 Peter K. More at Peter-K.org | 277

Q2. Key purchasing decision making criteria

02 How do customers choose which video-game to purchase?

Great Appealing Convenient Attractive value

Q2. Make sure the candidate follows these steps

• The best practice is to structure brainstorming and offer a 10-second

• Regular feedback from consulting firms is that candidates offer only

• To impress the interviewer, the candidates can contextualize some of

© 2021 Peter K. More at Peter-K.org | 279

03 What synergies might Betacer capture by entering the video-game market?

Revenue synergies Cost synergies

Q3. Make sure the candidate follows these steps

• The best practice is to structure brainstorming and offer a 10-second

• Regular feedback from consulting firms is that candidates offer only

• To impress the interviewer, the candidates can contextualize some of

© 2021 Peter K. More at Peter-K.org | 281

Q4. Math exercise – prompt

Please share with the candidate Please provide this additional

• Average spending per paying user for similar

• Share of paying users among all users is 5%

© 2021 Peter K. More at Peter-K.org | 282

Q4. Math exercise – calculations

Total costs for

Betacer should acquire 330k users to payback

© 2021 Peter K. More at Peter-K.org | 283

Q4. Math exercise – contextualization of the answer

Basic • In order to payback within 2 years their investment Betacer should

• 330k users sound realistic as it is a fraction of the U.S. market and

© 2021 Peter K. More at Peter-K.org | 284

Q4. Make sure the candidate follows these steps

• Providing big-picture approach of how to calculate the answer might

Step 2. Clarify • Often interviewers don’t provide all the information

• Ideally the candidate shouldn’t make any mistakes

• The interviewers highly appreciate it when the candidate not only

© 2021 Peter K. More at Peter-K.org | 285

© 2021 Peter K. More at Peter-K.org | 286

Q5. Make sure the candidate follows these steps

• To ensure a comprehensive recommendation, the candidate is

• The recommendation typically comes with the risk assessment to