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Casebook. Real MBB Cases 2020. Detailed Answers
Casebook. Real MBB Cases 2020. Detailed Answers
11 real cases of
McKinsey, Bain, and BCG
with detailed answers from a
professional case prep coach
Confidential
McKinsey
Diesel truck
manufacturer
2020
Question #1 How would you evaluate if they should produce and sell e-trucks?
Based on the table how much should we charge for the electric
Question #3
truck?
Hand-outs Appendix 1.
§ Size and growth rate § Target customer § Expected capex § Market specific risks
§ Largest e-truck segments for e- § Investment criteria § Financial risks
producers (incl. trucks (same B2B or (e.g. ROI, NPV, § Operational risks
market shares and B2C too?) payback period)
key differentiating § Expected e-truck § Expected profitability
points) model (e.g. type, (incl. synergy
§ Average margin in key selling points) analysis):
the space § Distribution (own/ − Revenue
partner dealerships; − Costs
online; etc.)
Make sure that the candidate covers the following key points typical for a market entry
case structure: market size, growth rate, competition, average margins in the space, b-
Comments
model of the client, and barriers for entry. In case the interviewer shared a financial
goal – the candidate should include financial analysis/valuation too.
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 4. “Market entry” (7 min) | 5
Case #1. McKinsey. 2020. Diesel truck manufacturer
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 5. “Comparison” (6 min) | 6
Case #1. McKinsey. 2020. Diesel truck manufacturer
Total Cost of
$34k+$20.6k » $55k per year $20.4k+$10.3k » $31k per year
Ownership (TCO)
§ The calculated value depends on the diesel price, and oil & gas prices fluctuate a lot. In
case of drop in diesel prices (like in 2020), the value might drop too.
§ The calculated price doesn’t account for the customers’ willingness to pay (WTP), which
might be lower as customers might be price sensitive (even despite the estimated
positive value)
§ We assumed the average mileage of 68k, but there will be customers with far higher and
far lower mileages, and for them the generated value will vary
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
01 02 03
Factor in the price other decision- Strengthen our hypothesis around Think about next steps
making criteria mentioned before: $221k through additional analyses: (e.g. develop leasing
§ How much value might the e-truck § Benchmark (with other e- programs, design risk
generate on the revenue side? trucks in the market) [there is mitigation plan, build
− Higher payload in comparison no other e-trucks] marketing strategy based
with diesel trucks? § Assess willingness-to-pay of on the price, etc.)
− Higher utilization rate due to different customer groups
lower number of repairs? (e.g. long-haul carriers vs
§ What are the typical investment regional carriers; large vs
criteria for our customers and does small carriers; etc.)
our price help them meet these § Define the goal of our pricing
criteria? (e.g. ROI, payback period) (e.g. maximize profits, market
§ Should we decrease the price to share, or number of trucks
balance out the potential operational sold) which might affect the
risks? (e.g. lack of mechanics, lack final decision on pricing
of charging infrastructure, etc.)
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
Recommendation
Appendix 1.
Based on the table how much should we charge for the electric
Question #3
truck?
McKinsey
Female executives
2020
Question #2 Based on the chart what are the issues with the current process?
All else being equal how many women should we attract to the
Question #3
entry level to increase number of female execs by four over time?
Question #4 What do you think about this number? [5,000 new hires]
Hand-outs Appendix 1.
Client’s % of
Key drivers to
External outlook women among Career funnel
attract women
execs
Make sure that the candidate covers the following key points typical for a wild card case
structure: analysis of external factors (e.g. benchmarking and overall trend), analysis of
Comments
the indicator (e.g. % of female execs and trend), and process flow (e.g. career funnel
and performance of its steps/stages).
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 9. “Wild card cases” (7 min) | 16
Case #2. McKinsey. 2020. Female executives
15%
Managers 400 FTEs* -20%
25%
500 FTEs* -50%
Entry level
Question #2 Based on the chart what are the issues with the current process?
The 25% promotion rate of The ratio of managers to entry High attrition rate (entry level)
entry level might seem too high level seems on the lower end § Despite it might be natural for
§ Due to potential rapid growth the § A good number of managers the retail industry (low-pay high-
company might need more might not have subordinates at stress jobs), it also requires
managers and encourage all state-of-the-art recruiting,
accelerated promotions which § The company underutilizes their training and HR ops which might
often comes at the expense of managers (and thus experiences be expensive
managers’ quality (e.g. poor low productivity) and might § It might affect customer
experience, culture, brand, etc.
leadership and toxic culture) benefit from consolidation of
High attrition rate (managers)
§ It might be driven by high some functions to increase the
§ It might cause constant
attrition rate (which frees up ratio
disruption to the work processes
vacancies), high competition for § The company might struggle with (as it’s more time-consuming to
managers and narrow talent pool filling up entry level roles (which find a manager than entry level)
§ The company might rely heavily might lead to increased overtime § It might suggest high recruiting
on the internal hiring than on of existing entry level employees, expenses that might be optimized
attracting outside talent which lower morale, lower customer § It might indicate low morale, low
brings fresh ideas/new expertise satisfaction, higher attrition, etc.) compensation, lots of low-perfor-
mance managers who are fired
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
§ We expect that the attrition and promotion rates won’t change materially
over time
§ The attrition rate is the number of employees who quit or were fired as a % of
the average number of employees
§ For the sake of calculation, let’s assume we hire 1,000 employees for entry level
§ Here is how many of them will end up getting to the executive level:
§ So, 1,000 new hires will yield 0.8 executives in the long term
§ The client wants five times more than that (0.8 * 5 times = 4 executives), thus we will
need to hire 5,000 women for entry level employees (= 1,000 * 5 times)
§ The answer is 5,000
Question #4 What do you think about this number? [5,000 new hires]
§ For the sake of calculation, let’s assume we hire 100 female directors
§ Here is how many of them will end up getting to the executive level:
# FTEs % who stayed % promoted # promoted
§ So, if 100 new directors yields 5.4 executives over time, and “x” yields 4 executives, then:
§ X = (100 * 4) / 5.4 » 74
§ The answer is 74 female directors to be hired
Comments:
§ The number of directors will need to sky-rocket (almost double), which might
not be justified by the business needs
§ It will boost overhead costs and increase management complexity
§ It might also be extremely expensive and time-consuming to recruit such a high
number of high-profile professionals
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 3. “Revenue growth ideas” (10 min) | 23
Case #2. McKinsey. 2020. Female executives
Recommendation
Appendix 1.
Question #2 Based on the chart what are the issues with the current process?
15%
Managers 400 FTEs* -20%
25%
500 FTEs* -50%
Entry level
McKinsey
Spanish Airlines
2020
What are some ways for this Spanish low-cost carrier to improve
Question #2
their profitability?
Can you name some ideas to create new revenue streams? (Ask
Question #3 this, in case there were no or a little number of new revenue
streams suggested in the answer to question 2).
What are the typical key cost items in the airline business? (Ask
Question #4 this, in case there were no or a little number of cost items
covered in the answer to question 2).
Which potential scenario would you address first? How would
Question #5
you prioritize these three scenarios?
Question #6 Based on the chart, calculate the revenue from passenger tickets.
Make sure that the candidate covers the following key points typical for a profitability
case structure: analysis of external factors (e.g. market’s growth rate and competition),
Comments
understanding of the client’s business model (e.g. customer segments and service
offerings), and financial analysis (e.g. revenue and cost structure).
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 2. “Profitability cases” (7 min) | 29
Case #3. McKinsey. 2020. Spanish Airlines
Focus on high
Increase sales Decrease costs
margins
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 6. “Other major types” (10 min) | 30
Case #3. McKinsey. 2020. Spanish Airlines
3 Diversification
New § Cargo/mail delivery
customer § Ads services for other companies to promote their products onboard
segments § Aerial picture services
§ Charters for corporate retreats
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 3. “Revenue growth ideas” (10 min) | 31
Case #3. McKinsey. 2020. Spanish Airlines
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 4. “Key cost items” (10 min) | 32
Case #3. McKinsey. 2020. Spanish Airlines
2 Indirect annual financial impact If increase in fuel costs is The client will face diseconomies of scale:
industry-wide: ▪ Some airport fees might be passenger volume-
▪ Airlines will raise their driven and the client might lose volume discounts
prices and the demand
will decline
▪ The client might lose volume discounts for food
supplies
▪ Other cost items will
increase as fuel is baked
in the cost structure of
lots of services/products
(e.g. food supplies,
airport fees)
3 Expected duration of the scenario ▪ Will fuel prices drop ▪ High-speed train ▪ Is it driven by
back to the original system will likely stay seasonality and
levels soon? will bounce back?
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
Scenario C
Medium
Scenario A
Note: This prioritization chart is provided for illustrative purposes only. The position of scenarios at the chart and the amount of the resources needed
would depend on the candidates’ perspectives on each of the scenarios and rationale behind it. There is no right or wrong answer.
§ The airline
operates 12 hours
a day without
weekends and
holidays
Question #6 Based on the chart, calculate the revenue from passenger tickets.
§ The average time on the ground is 24 min (0.4 hour) per flight
Question #6 Based on the chart, calculate the revenue from passenger tickets.
# flights per
day for one 12 hours (2 hours + 0.4 hour on the ground) 5
plane
# flights
5 flights 6 planes 360 days 10,800
annually
# passengers
143 seats 80% load factor 114
per flight
Price per
$200 for a round-trip ticket 2 $100
flight
114 passengers
Revenue 10,800 flights $100 per ticket $123M
per flight
Question #6 Based on the chart, calculate the revenue from passenger tickets.
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
Recommendation
Appendix 1.
Which potential scenario would you address first? How would
Question #5
you prioritize these three scenarios?
Appendix 2.
Question #6 Based on the chart, calculate the revenue from passenger tickets.
§ The airline
operates 12 hours
a day without
weekends and
holidays
McKinsey
European Beauty
Company
2020
Make sure that the candidate covers the following key points typical for a profitability
case structure: analysis of external factors (e.g. market’s growth rate and competition),
Comments
understanding of the client’s business model (e.g. customer segments and product
offerings), and financial analysis (e.g. revenue and cost structure).
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 2. “Profitability cases” (7 min) | 47
Case #4. McKinsey. 2020. European Beauty Company
§ Launch loyalty card for § Introduce bundles § Launch e-commerce option § Improve CX (e.g. better
regular customers § Offer family packages § Increase incentives (e.g. select, train, assess, and
§ Invest in aggressive sales commissions) for retail incentivize customer-facing
§ Develop subscription options staff)
marketing campaigns and partners
promotions § Adjust pricing levels to match § Develop digital solution to
WTP (willingness-to-pay) § Add new retail chains and facilitate customer journey
§ Build/strengthen credibility beauty chains to official (e.g. personalized
through regular publications distributors recommendation,
re beauty products in print, § Start own-branded stores information on skincare
blogs, YouTube, etc. products)
§ Offer franchising
§ Address pain points (if any)
(e.g. improve packaging,
quality of products)
§ Develop adjacent offerings
to cross-sell/up-sell
§ Build offerings for B2B (e.g.
cosmetics/haircut salons,
entertainment industry)
§ Consider going into high-
end, product for men, etc.
§ Consider white-labeling
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 3. “Revenue growth ideas” (10 min) | 48
Case #4. McKinsey. 2020. European Beauty Company
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
150
100
50 100 108 120
0
2018 19 20F
xx - as % of company’s
In-store beauty advisor/consultant* costs by product line, M EUR (2018-20F) revenue
15.0
20 14.3
13.8
15
Makeup 10 18.0
5 13.8 15.4
0
20
15 7.5
5.2 6.2
Fragrance 10
5 9.0
0 5.2 6.7
20
2.5
15 1.0 1.5
Skin care 10
5 1.0 1.7 3.0
0
2018 19 20F
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
§ The costs as % of revenue are given for each product line. The total costs are the sum of
these individual %s:
o Consumers can upload a selfie photo and the platform will instantly provide
detailed diagnostics and recommendations of specific products and
treatments tailored to their needs and personal preferences.
o Consumers can “try” cosmetics before they buy through digital makeup
sampling and try-on features (i.e. AR – augmented reality).
§ The expected investment to build the digital solution is €2.1M.
§ The ongoing operational costs to maintain the digital solution is €0.2M per year.
§ We project that the technology should reduce beauty advisor costs by 5%.
§ In order to calculate annual cost savings driven by the digital solution, we need to adjust
the reduction in beauty advisor costs by maintenance costs (e.g. updates, bug fixing):
Annual cost
savings €31.5M 5% €0.2M €1.4M
Payback
period €2.1M €1.4M 1.5 years
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
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
Recommendation
Appendix 1.
Your analyst put together some financial information of the client
Question #4
and sent you these charts. What do they tell you?
150
100
50 100 108 120
0
2018 19 20F
xx - as % of company’s
In-store beauty advisor/consultant* costs by product line, M EUR (2018-20F) revenue
15.0
20 14.3
13.8
15
Makeup 10 18.0
5 13.8 15.4
0
20
15 7.5
5.2 6.2
Fragrance 10
5 9.0
0 5.2 6.7
20
2.5
15 1.0 1.5
Skin care 10
5 1.0 1.7 3.0
0
2018 19 20F
McKinsey
Almond farm
2020
Question #3 What is the almond market size going to be in the U.S. in 2025?
What could possibly happen (what sort of shocks) that might cause
Question #5
prices of almond to increase in future?
Target Acquisition
Almond market Target
valuation risks
Make sure that the candidate covers the following key points typical for a PE firm case
structure: analysis of external factors (e.g. target’s market size, its growth rate and
Comments
competition), understanding of the target’s business model (e.g. customer segments
and product offerings), and financial analysis (e.g. valuation and profitability).
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 5. “PE firm cases” (7 min) | 65
Case #5. McKinsey. 2020. Almond farm
5.0% 1.7%
1.6% Paramount Farming
1.6%
1.5%
South Valley Farms
Agriland Farming
Braden Farms
Note: 85% of almond farms in the U.S. are 250 acres or less.
Price, USD per lbs $4.00 $3.13 $2.39 $2.53 $2.50 $2.43
Market size in the U.S., Bn USD $7.5 $5.9 $5.1 $5.7 $5.7 $6.2
§ The conservative scenario suggests that the almond price will drop to $2.00 in 2025.
Question #3 What is the almond market size going to be in the U.S. in 2025?
§ In order to calculate annual cost savings driven by the digital solution, we need to adjust
the reduction in beauty advisor costs by maintenance costs (e.g. updates, bug fixing):
Question #3 What is the almond market size going to be in the U.S. in 2025?
§ Rapid growth in the production suggests that the target might need to expand their
capacity by increase almond acreage or harvest yield per acre – both might require
extra investment and affect the expected cash flows
§ The prices dropped by almost half during 2014-19, so if this trend persists, our
assumption of $2 might be too optimistic and the target’s economics will be worse
that we expect based on the calculations
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
§ Outbreak of cow
diseases
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com *CDC – Center for Disease Control and Prevention | 72
Case #5. McKinsey. 2020. Almond farm
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 2. “Risks and challenges” (8 min) | 73
Case #5. McKinsey. 2020. Almond farm
Recommendation
Appendix 1.
Your team dug deeper into the competitive landscape of almond
Question #2
market. Your analyst emailed you this chart. What does it tell you?
5.0% 1.7%
1.6% Paramount Farming
1.6%
1.5%
South Valley Farms
Agriland Farming
Braden Farms
Note: 85% of almond farms in the U.S. are 250 acres or less.
Appendix 2.
Question #3 What is the almond market size going to be in the U.S. in 2025?
Price, USD per lbs $4.00 $3.13 $2.39 $2.53 $2.50 $2.43
Market size in the U.S., Bn USD $7.5 $5.9 $5.1 $5.7 $5.7 $6.2
Sign up for newsletters with more case prep tools – email Peter K at Peter_K@berkeley.edu
Bain
Banknote
manufacturer
2020
Question #4 What revenue growth opportunities can you suggest to the client?
Our client would like to expand into two other adjacent businesses
Question #5 – passport production and credit card production. What are the
pros and cons of each of them?
The client just entered the room and they would like to know your
Question #6
recommendations.
Make sure that the candidate covers the following key points typical for a sales growth
case structure: analysis of external factors (e.g. market’s growth rate and competition),
Comments
understanding of the client’s business model (e.g. customer segments and product
offerings), and revenue analysis.
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 3. “Sales growth cases” (7 min) | 81
Case #6. Bain. 2020. Banknote manufacturer
Supplies
Production Inspection
and quality Delivery to
§ Banknote control Central Bank
paper § 10 production
stages § Equipment to
§ Quality double-
§ Ink check the
§ Equipment of check
quality:
§ Foil precise § Storage
application printing, – Visually
(security micro- § Entry into
– Through
strips) perforating, circulation
magnetic
cutting, etc. fields
§ Chemicals
– Mechanically
Note: This is for the candidate’s information. No insights are expected. To be given to the candidate before framework.
Headquarter UK Germany
Note: Please provide this chart to the candidate if they ask for market shares or other data points from the chart.
Chart #2 – chart-reading
Basic comments (expected from everyone):
§ Both companies are established players, have been around for a while, enjoy large
geographical footprint and capture similar size of the market
§ Alternatively, the 2nd major player might have a more diversified business with
banknotes providing just some of their revenue; then the client might expand to
the adjacent segments that 2nd player has entered already
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
Currency in Projected
Bill Printing costs, circulation - volume to be
Lifespan, years
denomination cents per note volume, Bn of printed in 2020,
notes Bn of pieces
Note: Please provide this chart to the candidate to do a Math exercise (see next slide)
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
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 5. “Comparison” (6 min) | 88
Case #6. Bain. 2020. Banknote manufacturer
Question #4 What revenue growth opportunities can you suggest to the client?
§ Invest in relationship building with the § Develop new optional security and/or
central banks (e.g. more events, optical features to up-sell
dedicated account managers) § Explore entering adjacency markets in
§ Select, train, and highly incentivize top- B2G: passport/ID production, document
notch sales people security consulting services, anti-
§ Adjust pricing to offer various discounts counterfeit excise tax stamps, etc.
§ Increase efficiency of PR/marketing to § Explore entering B2B market: anti-
strengthen credibility and brand counterfeit labels for packages, banknote
§ Ensure state-of-the-art quality and cutting paper, security features for credit cards,
edge security of banknotes cash processing machines, etc.
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
This is a typical Ansoff matrix approach covered in the e-course, however two buckets (geo expansion and new customers segments) are left out.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 3. “Revenue growth ideas” (10 min) | 89
Case #6. Bain. 2020. Banknote manufacturer
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 5. “Comparison” (6 min) | 90
Case #6. Bain. 2020. Banknote manufacturer
Q6. Recommendation
The client just entered the room and they would like to know your
Question #6
recommendations.
• First, the growth potential of the banknote space is limited given slow
growth rate of the market (3-5%), fairly high competitive pressure
from almost equally sized 2nd player, and long sales cycle.
• Secondly, passports and credit cards are presumingly attractive
Reasoning markets comparable in size to the banknote space and can offer new
growth opportunities to further expand to adjacent segments.
• Thirdly, it is where our client can leverage their core capabilities in
producing anti-counterfeit solutions with high level of security.
We should consider some market entry risks though like potentially
Risks tough competitive landscape, lack of expertise/credibility in the domain,
and unreasonable assumptions in projected market share and costs.
As for the next steps we would suggest to build a risk mitigation plan,
Next steps conduct a comprehensive due diligence of the passport/credit card
markets and design a go-to-market strategy.
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 candidate is usually expected to structure their conclusion as RRRN (recommendation, reasoning, risks, and next steps) and keep it under 1.5 min]
Bain
2020
What ways can you suggest to grow once the client had their 2K
Question #2
stores?
§ Growth rate [low as mature § Product offerings (e.g. types § Increase in market share
market?] of meals; pre-packaged to-go § Product innovation
§ Major restaurant chains vs freshly cooked; share of § Geographic expansion
§ Substitutes (e.g. cooking at non-food items)
§ New customer segments
home, healthy food options § Customer segments (e.g.
from coffee shops, B2C/B2B; high-end/low-end)
convenience stores, meal-kit § Marketing strategy
delivery companies, etc.) § Current revenue and growth
rate
Make sure that the candidate covers the following key points typical for a sales growth
case structure: analysis of external factors (e.g. market’s growth rate and competition),
Comments
understanding of the client’s business model (e.g. customer segments and product
offerings), and revenue analysis.
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 3. “Sales growth cases” (7 min) | 95
Case #7. Bain. 2020. Fast casual food restaurant
§ Launch loyalty card for § Introduce meal bundles § Launch online/smartphone § Improve CX (e.g.
regular customers (combos) orders (e.g. UberEats, cleanliness, friendliness,
§ Invest in aggressive § Offer family-size meals (for DoorDash) speed of service)
§ Develop a smartphone app
marketing campaigns and price-sensitive customers) § Launch drive-through
promotions to facilitate customer
§ Develop subscription options § Train cashiers and increase journey (e.g. personalized
§ Build/strengthen credibility their incentives (e.g. sales recommendations, info on
§ Adjust pricing levels to match
through regular publications WTP (willingness-to-pay) commissions) to cross-sell new healthy meals)
re healthy nutrition in print, and up-sell § Address pain points (if any)
blogs, YouTube, etc. (e.g. improve packaging,
§ Increase the capacity of
§ Improve online rating of current restaurants (e.g. quality of products)
restaurants (e.g. Yelp, increase # seats, working § Launch breakfasts, coffee
OpenTable) hours) and low-calorie bakery
§ Develop adjacent offerings
§ Increase in-store and local § Enter retail pre-packaged to cross-sell/up-sell (e.g.
marketing food space by offering to-
merchandise, seasonal
go packaged meals at
offerings)
groceries, convenience § Build offerings for B2B (e.g.
stores, etc.
corporate catering)
§ Start franchising in regions § Consider going into high-
other than Europe/US end
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 3. “Revenue growth ideas” (10 min) | 96
Case #7. Bain. 2020. Fast casual food restaurant
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See synergies at e-course: “Brainstorming”, L-6. “Other major types” (10 min)| 97
Case #7. Bain. 2020. Fast casual food restaurant
0
Peak hours Non-peak Weekends
hours
Weekdays
§ Potential revenue synergies might also improve margins as breakfasts would likely
attract new clientele that might come back later to buy lunch/dinner too
§ We made a lot of assumptions and the delta between 6% and 5% might not be
statistically significant – minor changes in numbers might affect margins radically
§ Given restaurants are a location-driven business the breakfast sales might vary
drastically across different restaurants (depending on foot traffic in specific location)
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
Estimated
$7M $7M $7M
annual revenue
Downtown and
Type of locations Downtown Suburbs
suburbs
Existing staff
New staff for
Staff implications Extra staff for trucks completes corporate
production lines
orders
Headquarter
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 5. “Comparison” (6 min) | 103
Case #7. Bain. 2020. Fast casual food restaurant
§ Expected capex and client’s § Potential additional revenue § Level of operational risks
investment criteria opportunities driven by each (e.g. increase in operational
[ROI/NPV, etc.] option complexity, quality control)
§ Projected cost structure and § Serviceable Addressable § Expected rate of
potential cost synergies Market (SAM) for each cannibalization
§ Forecast of pricing changes option that provides access
[to see the impact on the to new customer segments/
margins] regions [e.g. food truck –
price-sensitive customers,
catering services – B2B,
retail chains – new regions]
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 5. “Comparison” (6 min) | 105
Case #7. Bain. 2020. Fast casual food restaurant
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 5. “Comparison” (6 min) | 106
Case #7. Bain. 2020. Fast casual food restaurant
Recommendation
Appendix 1.
0
Peak hours Non-peak Weekends
hours
Weekdays
Appendix 2.
The team is considering three more options. The analyst summa-
Question #5
rized them in this chart. What recommendations would you make?
Estimated
$7M $7M $7M
annual revenue
Downtown and
Type of locations Downtown Suburbs
suburbs
Existing staff
New staff for
Staff implications Extra staff for trucks completes corporate
production lines
orders
Headquarter
Bain
2020
Question #2 What are the key cost items of the Brew Co?
Make sure that the candidate covers the following key points typical for a comparison
case structure: understanding of status-quo (e.g. business model of the company,
Comments
options to compare), analysis of financial implications of each option (capex, revenue
and costs), potential strategic value of each option, risk assessment of each option.
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 8. “Comparison cases” (7 min) | 113
Case #8. Bain. 2020. Instant coffee pod producer
Question #2 What are the key cost items of the Brew Co?
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 4. “Key cost items” (10 min) | 114
Case #8. Bain. 2020. Instant coffee pod producer
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 2. “Risks and challenges” (8 min) | 115
Case #8. Bain. 2020. Instant coffee pod producer
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 3. “Revenue growth ideas” (10 min) | 116
Case #8. Bain. 2020. Instant coffee pod producer
§ # of hotels in the chain § Expected price of the § Estimated revenue for adjacency
§ # rooms per hotel contract/per pod products/services (e.g. cross-sell of coffee
§ Average occupancy rate § Potential discounts mugs to hotel guests)
§ # of guests per room § Forecasted changes in any of § Assessment of potential marketing value:
§ % coffee-drinkers among the above due to inflation, − Expected future revenue from new
guests change in volume, etc. customers who enjoyed coffee at the
§ # coffee pods consumed per hotel and will start purchasing it for
coffee-drinker per day themselves after their stay at the hotel
§ Expected changes in any of − Estimated improvement in the retention
the above rate of existing customers whose
loyalty to the client’s coffee brand will
strengthen after their stay at the hotel
− Estimated increase in coffee
consumption of existing customers
whose loyalty to the client’s coffee
brand will strengthen after their stay at
the hotel
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
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
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 5. “Comparison” (6 min) | 122
Case #8. Bain. 2020. Instant coffee pod producer
In-house Outsource
Time to
6 months 1 month
implementation
§ The client might consider a hybrid option, start with outsourcing and build the in-
house capabilities in parallel (if the economics of outsourcing can be improved) – it
will help avoid five months of wait period [6 months - 1 month] and get extra sales
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
Recommendation
Appendix 1.
The client wants to hit $1M in weekly profits from the deal with
Question #6
the hotel chain. Can you calculate their expected weekly profits?
Appendix 2.
We managed to learn some details re in-house and outsource
Question #9
options. What recommendations would you make based on them?
In-house Outsource
Time to
6 months 1 month
implementation
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BCG
Grocery retailer
2020
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 6. “Other major types” (10 min) | 132
Case #9. BCG. 2020. Grocery retailer
Client – grocery
Competition Financial analysis
retailer
Make sure that the candidate covers the following key points typical for a profitability
case structure: analysis of external factors (e.g. competition), understanding of the
Comments
client’s business model (e.g. customer segments and product portfolio), and financial
analysis (e.g. revenue and cost structure).
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 2. “Profitability cases” (7 min) | 133
Case #9. BCG. 2020. Grocery retailer
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 4. “Key cost items” (10 min) | 134
Case #9. BCG. 2020. Grocery retailer
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 4. “Key cost items” (10 min) | 135
Case #9. BCG. 2020. Grocery retailer
90% 15%
20%
Coca-Cola 16%
80%
70%
35%
60%
45%
Nestle 10% 50%
40%
30%
50%
Kraft 8% 20%
35%
10%
0%
0% 5% 10% 15% 20% Client Other major grocery chains
§ The client moves high volume of Kraft’s § The client might offer to conclude a long-
juices and might ask for a volume discount term contract with Kraft to ensure a
§ The client supposedly provides large shelf predictable revenue stream for Kraft
space for Kraft’s juices which contributes § The client might offer benefits: in-store
to the increase in Kraft’s brand awareness marketing, customer analytics, real-life Kraft
§ Kraft’s juices aren’t attractive to the client sales results (IT integration required), etc.
based on the benchmarking analysis, and if § The client might offer to increase purchasing
Kraft doesn’t improve the client’s margins volume for other Kraft’s product too
it’s natural to expect that the client will § The client might offer to bring some Kraft’s
shift towards other juice brands ops functions in-house (e.g. merchandising,
§ The client likely purchases other Kraft’s tracking inventory) to save them costs
products (e.g. snack, dairy) too, and thus
is an important buyer for Kraft
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
Question #8 What if Kraft doesn’t do it for you? What else would you do?
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 6. “Other major types” (10 min) | 140
Case #9. BCG. 2020. Grocery retailer
Revenue from
Kraft’s juices $60M 50% $30M
Incremental
profits $30M (10%-8%) $0.6M
Total incremental
profits $20B 1% $200M
Q11. Recommendation
You are in the final steering committee with the client’s manage-
Question #11
ment team and they would like to hear your recommendations
Appendix 1.
We’ve collected some sales and profitability data for the juice
Question #5
segment. What does this chart tell you?
Chart 1. Client’s margins for juice
Chart 2. Sales structure in juice segment
products of different brands
- Coca-Cola - Nestle - Kraft
100%=$60M
100%
90% 15%
20%
Coca-Cola 16%
80%
70%
35%
60%
45%
Nestle 10% 50%
40%
30%
50%
Kraft 8% 20%
35%
10%
0%
0% 5% 10% 15% 20% Client Other major grocery chains
BCG
Snack food
company
2020
Hand-outs Appendix 1
Distribution
Financial analysis Strategic value Risks
models
Make sure that the candidate covers the following key points typical for a comparison
case structure: understanding of status-quo (e.g. business model of the company,
Comments
options to compare), analysis of financial implications of each option (capex, revenue
and costs), potential strategic value of each option, risk assessment of each option.
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 8. “Comparison cases” (7 min) | 148
Case #10. BCG. 2020. Snack food company
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 5. “Comparison” (6 min) | 149
Case #10. BCG. 2020. Snack food company
§ Invest in aggressive § Offer family-size packages (for § Bring distribution in-house § Design new flavors, shapes,
marketing campaigns and price-sensitive customers) and ensure its top-notch calorie count, types of
promotions § Introduce bundles of different quality (e.g. no sold out, cookies/crackers
§ Increase in-store marketing cookies/crackers damaged, expired items on § Partner with major ice
the shelves) cream brands to do cookie
§ Partner with major wine § Adjust pricing levels to match
brands to do co-marketing WTP (willingness-to-pay) § Launch e-commerce and cream ice cream
for wine, cheese and § Incentivize distributors to § Enter high-end/low-end
cracker pairings promote our products (e.g. segments
increase their mark-ups, get § Enter corporate segment
best shelf-space) with cookies for
§ Add new distribution professional meetings
channels (e.g. retail chains, § Consider entering baking
groceries, drug stores) and sweets business (e.g.
§ Partner with creameries, pies, cakes, candies) by
bakeries, dessert places, leveraging core capabilities
and coffee shops to sell our and understanding of the
products customer segments
§ Enter vending machine § Consider white-labeling
business to sell cookies and
crackers
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 3. “Revenue growth ideas” (10 min) | 150
Case #10. BCG. 2020. Snack food company
© 2020 Peter K. More at Peter-K.thinkific.com Note: * SKUs – stock keeping units | 151
Case #10. BCG. 2020. Snack food company
Q7. Recommendation
You are in the client’s meeting and they would like to know your
Question #7
recommendations.
Recommen- We would like to recommend for the client to go ahead and make the
dation transition to the in-house distribution model.
• Despite it will reduce the revenue at the beginning, the profits are
expected to increase dramatically
• Building in-house distribution capabilities will provide higher control
Reasoning over the value chain and offer more operational flexibility
• It might also help strengthen the relationship with our distributors and
react to their concerns quicker
Our next steps would include to build a plan to address potential risks,
Next steps design roadmap to bring distribution in-house and try to renegotiate the
current 20% rate with the contractor before we complete our transition.
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 candidate is usually expected to structure their conclusion as RRRN (recommendation, reasoning, risks, and next steps) and keep it under 1.5 min]
Appendix 1.
Our analyst did some research re the competitors and here is
Question #4
what they found. What does this table suggest?
© 2020 Peter K. More at Peter-K.thinkific.com Note: * SKUs – stock keeping units | 158
Case #11
BCG
Electronics
manufacturer
2020
Your team put together some data about the laptop market
Question #3
dynamics. What does it tell you? (We’re in 2019)
Based on our research, the laptop market is going to decline over
Question #4
the next four years. What might the reasons be behind it?
Assuming the client will keep the same market share, will they be
Question #5 able to hit $3.5B in sales by 2023? What EBITDA should they
expect in 2023?
The manager has just entered the room and they would like you
Question #6
to summarize your conclusions.
Hand-outs Appendix 1
Client – electronics
Laptop market Profitability analysis
manufacturer
Make sure that the candidate covers the following key points typical for a profitability
case structure: analysis of external factors (e.g. growth rate, typical profitability,
Comments
competition), understanding of the client’s business model (e.g. customer segments and
product portfolio), and financial analysis (e.g. revenue and cost structure).
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.
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Structuring”, Lecture 2. “Profitability cases” (7 min) | 162
Case #11. BCG. 2020. Electronics manufacturer
Focus on
Shrinking sales Rising costs
low-margin
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 8+ ideas, structured approach, and on-the-fly delivery without taking notes]
© 2020 Peter K. More at Peter-K.thinkific.com See e-course: “Brainstorming”, Lecture 6. “Other major types” (10 min) | 163
Case #11. BCG. 2020. Electronics manufacturer
171.9
1.5%
170
168.1 1.0%
165 164.7
163.7 0.5%
162.1
161.2
160 0.0%
6/18
7/18
8/18
9/18
1/19
2/19
3/19
4/19
5/19
6/19
10/18
11/18
12/18
-0.5%
155
-1.0%
Note: The expected shipments in 2019-23 are based on the
forecast from June 2018.
150 -1.5%
2016 17 18 19 20F 21F 22F 2023F
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
§ To calculate the expected revenue in 2023 we might need to use the latest CAGR for 2019-23 from the
chart on the right-hand side (see question 3), as the forecast data of the chart on the left-hand side is
outdated. According to the note on the chart it was built based on the forecast from June 2018
§ According to the latest forecast made in June 2019, CAGR for 2019-23 is expected to be -1%. In order
to calculate the change in revenue we need to use compounding, however given that the rate of 1% is
very little, the error would be negligible if we use a linear approach [1%*4 years]
§ The answer is $3.07B for revenue and $60M for EBITDA is 2023.
Q6. Recommendation
The manager has just entered the room and they would like you to
Question #6
summarize your conclusions.
Appendix 1.
Your team put together some data about the laptop market
Question #3
dynamics. What does it tell you? (We’re in 2019)
171.9
1.5%
170
168.1 1.0%
165 164.7
163.7 0.5%
162.1
161.2
160 0.0%
6/18
7/18
8/18
9/18
1/19
2/19
3/19
4/19
5/19
6/19
10/18
11/18
12/18
-0.5%
155
-1.0%
Note: The expected shipments in 2019-23 are based on the
forecast from June 2018.
150 -1.5%
2016 17 18 19 20F 21F 22F 2023F
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