BCG-Case-Interview-Guide-2-BCG-Type-Cases 2

CRACKING
THE CASE!
Case Interview
Guide
Table of contents
Introduction/review of interview basics
Practice cases
• Case 1: China outsourcing opportunity
• Case 2: Growing specialty paper sales
78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 1

Why case interviews?
Cases help us gain insight into how you might approach and analyze a typical business issue
• Assesses your problem-solving capabilities, analytics and business judgment
• Gives you a perspective of what consultants do
Cases are representative of our work

• Our interview cases are frequently taken from real BCG case work
• However, keep in mind that in the interview there are not always clear 'right' or 'wrong' answers
To do well on the case, the interviewer is looking for you to

• Provide a clear structure for your analysis
• Prioritize the components of the problem
• Listen and use relevant information to develop a clear recommendation
Case performance is not the only metric BCG uses to evaluate candidates, others include
• Education, work and life experiences
• Interpersonal and communication skills
'Use sound business judgment to take the quickest (ie,
least resource intensive) path to the highest impact
conclusion.' — BCG interviewer

Interview format
45 minute interview
Discuss prior experiences

10–15 minutes
Open discussion (accomplishments, motivations)
Case introduction
20–25 minutes Case discussion
Case wrap up
5–10 minutes Q&A, your chance to ask questions
Typically you are given two cases in the first

round of interviews and three in second round

Candidate evaluation criteria
Problem solving Communication and

Effectiveness and impact and insight presence
Self-motivated and tenacious Structures the problem, Projects self-assurance,
resolves ambiguity credibility
A leader and team player
Shows business Communicates concisely,
Has substance, backs judgment, prioritizes effectively
up claims
Rigorous, accurate, Actively listens
Actively pursues self- quantitatively sound
development Builds relationships of trust
Curious, creative, goes
Drives to action, beyond obvious
delivers results
Synthesizes, develops
conclusions

Five steps to approaching the case
Recommen- Next steps/other

Introduction Approach Analytics
dation areas to explore
Pose problem to Evaluate structure to Provide data and Wrap up interview May prompt with 'is
be solved solve case context as asked within time limit there anything else
[co] should consider?'
BCG role
Provide basic facts Evaluate analytical Evaluate
(will vary in detail) performance (math, recommendation Evaluate next steps
deductions, etc)
Restate your State hypotheses Ask for relevant Tie back to initial Translate
understanding of data; explain hypotheses recommendation to
the problem Identify which any assumptions implementation
analyses you think Conclude analyses
Your role you need and why Execute with actionable Identify next steps for
computations recommendations investigation,
Explain what you assumptions to verify
are thinking Explain the impact
('so what')
Without explaining the right approach,

very difficult to succeed in other steps

Quick tips: 'DOs'
Based on feedback from BCG interviewers
Open discussion Solving the case
Relax After the setup, ask 2–3 value added clarification

• Attitude shows through questions to help you frame
• Keep it conversational and fun
Use a relevant framework to help structure and
Be enthusiastic and authentic prioritize. There is no standard approach
• Be genuine to yourself
• Show energy — smile! Think out loud — make your logic/rationale explicit
Know your 'story' Pace yourself

• 1 minute, 2 minute, 5 minute versions • Avoid a frantic start — collect your thoughts
• What you did at each job, what you learned, how • Be aware of the time — you need to be progressing
you got the next position? towards a recommendation
• What sets you apart?
• Tie your experiences into a career Stop and summarize when necessary or if stuck
• Be prepared to guide conversation if appropriate
Make it easy for the interviewer to follow calculations
The basics: Bring pen and paper, ask • Write down numbers
clarifying questions • Don't overcomplicate the math
Listen, listen, listen Draw conclusions from the facts — identify pivotal
evidence for your argument
Prepare a few questions to ask interviewer at the end of
the interview — but do your homework first! Conclude with a recommendation — what should the
client DO? Have a viewpoint and conviction

Quick tips: 'Don'ts'
Based on feedback from BCG interviewers
Open discussion Solving the case
Focus solely on the case; the open discussion is also Begin asking a variety of questions before establishing
important in our evaluation of you an approach to problem
Fumble the basics (eg, "Why are you interested Repeat back every detail of the case set up
in consulting?")
Get so set on a framework that you are unwilling to
Show concern/hesitation when the interview shifts accept a new direction
to the case
Avoid the math — interviewers are looking for your
Provide long, technically detailed descriptions comfort level with numbers
of your experiences
Ignore given information, 'clues' on relevant issues
Ignore interviewer's signals regarding pace, eg,
answering two minute question with 10 minute Get 'bogged down' on less important issues
monologue
Make critical assumptions without explaining the
logic behind them
Take too long to formulate the summary — think of the

'30 second elevator speech'
Ask "How did I do?" or "Did I get the right answer?"

during the interview

How to prepare
Practice problem solving

• Case examples (this book!, Wet Feet Press, consulting club casebooks, www.bcg.com)
• Interview workshops and mock interviews
• Student peers, former BCG associates, former BCG summer interns
• Make it as realistic as possible (eg, timing, write down ideas/approach, talk out loud)
Give cases to others to see things from the 'other side'
Talk to alumni and friends who have experience with case interview formats
Look at a few dozen other résumés — what makes you stand out?
Practice helps train you to structure the problem

and think out loud; however, beware the risk of
becoming 'robotic' with over-practice

Table of contents
Practice cases

Case 2
China outsourcing opportunity

Problem set-up
The client is a national manufacturer of plastic consumer products that are sold in a variety of
retail formats, including supermarkets, discounters, club stores, and dollar stores. The company
has three main product lines — 1) Freezer bags, 2) Plastic plates and utensils, and 3) Specialty
plates and utensils
The CEO has been reading for some time about American companies outsourcing their
production overseas to low-cost countries such as China. She wonders whether this makes
sense for her company as well. It worries her that none of her main competitors have
established foreign production capabilities; on the other hand, this could be a tremendous
opportunity to gain a competitive advantage
We have been asked to help the client understand the benefits and risks of moving its
production capabilities to China and to provide a recommendation

Case 2

Questions and facts (I)
Costs Competitive
Product description (China versus US) Consumers landscape
Freezer bags • All three product lines • Top purchase criteria is • Client is no. 3 in
• Plastic bags used have similar cost quality, since low category, 200 million
mainly to store food structures and savings quality bags will result lbs sold
items in freezers • Give interviewee in food spoilage • Category leader has
exhibit 1 strong brand and
strong innovation
Plastic plates • All three product lines • Top purchase criteria • Client is no. 2 in
and utensils have similar cost is price category, 300 million
• Disposable plates structures and savings lbs sold
and utensils; intended • Give interviewee • Client at cost parity
for single/limited use exhibit 1 with category leader
but has weaker brand
Specialty plates • All three product lines • Top purchase criteria is • Client is no.1 in
and utensils have similar cost style/design category, 100 million
• Plastic plates and structures and savings • Because many lbs sold
utensils produced for • Give interviewee products are new and • No strong competitors
specific retailers, exhibit 1 untested, demand is
customized to their highly variable
design specs

Case 2

Questions and facts (II)
Topic Information to share with interviewee
Current client production • All products are made in a single factory in Ohio
capabilities • The factory is at capacity and the company is considering building or acquiring a
nearby facility
Chinese production options • Client has no previous experience in building and managing
a factory overseas
• Client has met with several Chinese manufacturing partners and has done initial
product testing
– Cost
– All three product lines have similar cost structures and savings
– Give interviewee exhibit 1
– Quality
– Lower quality on freezer bags
– Equal quality on plastic plates and utensils (both regular and specialty)
– Lead time
– Need 3–4 weeks of additional lead time for each product line for
transportation from China to US distribution centre
Chinese market, current • All three categories are relatively underdeveloped but growing, dominated by
client presence local manufacturers
• Client does not currently have any sales in China, although a few of their US
customers (eg, Wal*Mart) do have presence there

Case 2

Exhibit 1
Costs in Costs in China Costs in

Costs US ($/lb) relative to US China ($/lb)
Labor 0.30 8% of wage rate —

80% of productivity
Material
• Plastic resin 0.30 80%
• Other material (including packaging) 0.20 75%
Variable overhead 0.05 140%
Fixed overhead 0.10 60%
Transportation
• China to US distribution centre N/A $6K to ship 40K lbs
• US distribution centre to customer 0.05 Same
Total 1.00

Case 2

Sample approach
Main question Should plastics manufacturer move production to China?
Cost savings Consumer behavior and Effect on current

Key areas to explore
purchase criteria production capabilities
• Would save $0.25/lb (25% of • Quality is top purchase criteria • Current plant is at capacity
current costs) for freezer bags – Outsourcing would
• At current production levels, – Lower quality from China eliminate need to build
would save • Price is top criteria for plastic additional capacity
Analysis – $50M in freezer bags plates and utensils • Plastic plates and utensils are
– $75M in plastic plates • Style is top criteria for 50% of total production
and utensils specialty plates and utensils – Outsourcing may create
– $25M in specialty plates – Highly variable demand too much extra capacity
and utensils requires short lead times
• Outsource plastic plates and utensils to China

Recommendation • Do not outsource specialty plates and utensils
• Do not outsource freezer bags (although further analysis may be warranted)
• To compensate for extra capacity that would be created in current plant, could produce new product line, rent out
Other factors spare capacity, or move to smaller facility

Case 2

Framework and analysis (I)
The interviewee should start with a brief overview of the potential benefits and risks of outsourcing to China.
The main benefit is lower costs, mostly driven by inexpensive labor. A secondary benefit is a possible
springboard into the emerging Chinese (and other Asian) market. Risks include lower labor productivity,
possible quality issues, longer lead times, additional transportation costs, and potential communication/
coordination issues. Ask the interviewee about the ramifications of longer lead times — they include greater
carrying costs, higher cycle and safety stock, greater forecast error, and less responsiveness to demand
There are three main questions that the interviewee needs to answer
• How much cheaper is producing in China?
• What do consumers value and how would outsourcing affect those criteria?
• What are the client's current production capabilities and how would outsourcing part/all of their
production affect the remainder?
First, the interviewee should size the opportunity — Is this a $5M or $500M opportunity? By solving for the last
column in exhibit 1, the interviewee will find that the client would save $0.25/lb (25% of current costs) by
outsourcing to China. Given current production levels, the client would save $50M by outsourcing freezer
bags, $75M by outsourcing plastic plates and utensils, and $25M by outsourcing specialty plates and utensils.
Two notes: 1) Costs may increase if the Chinese Yuan rises versus the dollar and 2) these estimates do not
include a profit margin for the Chinese outsourcing partner

Case 2

Framework and analysis (II)
The interviewee must recognize, however, that cost savings alone are not sufficient to make a decision. It is
important to understand how an outsourced product will affect sales. The interviewee should suggest market
research to understand consumer behavior
Freezer bags: Since customers' top purchase criteria is quality and outsourcing would produce lower quality
bags, the interviewee should raise a red flag here. A more sophisticated recommendation would be to conduct
market research to see the impact on sales of the lower quality bag at lower prices — even though quality is
more important than price, the magnitude of a price change may override the drop in product quality
Plastic plates and utensils: The top purchase criteria here is price, which makes this product line an
attractive outsourcing opportunity. Ask the interviewee what the client should do with the cost savings —
potential recommendations include dropping price to steal share, investing to defend its position in case
competitors begin outsourcing (eg, brand, innovation, customer service), and milking the
product line as a cash cow
Specialty plates and utensils: The highly variable and unpredictable demand for these products means that
shorter lead times are critical in order to adjust production quickly. Longer lead times will result in greater
forecast errors, higher safety/cycle stock, and more unsold inventory and/or out-of-stocks. Therefore, specialty
plates and utensils should not be outsourced

Case 2

Framework and analysis (III)
An analysis of customer purchase behavior indicates that plastic plates and utensils should be
outsourced, specialty plates and utensils should not be, and freezer bags probably should not
be. The final step is to understand the impact of outsourcing on the client's current production
capabilities. For example, will it lead to plant closings (resulting in closing costs and possible
negative publicity)? Will it lead to underutilization of current facilities?
Since the current plant is already near capacity, moving plastic plates and utensils offshore
would actually save the client from investing in new facilities. However, since that product line
makes up 50% of total production (in terms of lbs), removing it may create too much extra
capacity in the current plant for the two remaining lines. To compensate, the client could
produce a new product line, rent out the extra capacity, or move to a smaller plant

Table of contents
Practice cases

Case 3
Growing specialty paper sales

Problem set-up
Your client is a leading manufacturer of specialty papers sold to commercial printers. The client
produces self-adhesive sheeted papers that are ultimately used in a variety of labelling
applications — including the labelling of consumer goods and the printing of self-adhesive signs
Your client's operations are profitable, but the business has failed to grow over the past few
years. The client would like to invest in the business and you have been asked to identify
opportunities for growth

Case 3

Questions and facts (I)
Topic Information to share with interviewee
Supply chain Raw mats Layering Sheeting Packaging Distrib

• Rolls of • Adhesive • Rolls of
paper and liner layered
• Adhesive applied to paper cut
• Non-stick rolls into sheets
liner
• The client is not capacity constrained in its manufacturing processes
• The client's manufacturing and packaging operations are currently
configured to package specialty papers in boxes
Customers • There are approximately 24,000 commercial printers in the United States
• Printers are roughly categorized into three groups: Small, medium, and large
• Differences among the groups are driven by the type of printing technology
employed and the size of print jobs that the printers are able to serve
• Printers prefer to receive product from the specialty paper manufacturers in
different forms, primarily driven by the type of printing technology employed
– Small printers prefer to receive their specialty paper in boxes
– Medium printers prefer cartons of specialty paper
– Large printers prefer to receive palletized shipments of specialty paper
Market share • The client has approximately 30% market share with small printers and only
10% share with medium and large printers
Client financials • Margins are currently acceptable but management is against cutting price to
gain market share, knowing that competitors can match price cuts
• Price and cost to serve per equivalent box are different for each
customer type
Case 3

Questions and facts (II)
All figures are per equivalent box
Small (boxes) Medium (carton) Large (pallets)

Price to printer 20.00 18.00 15.00
Materials 5.50 5.50 5.50
Coating 1.00 1.00 1.00
Sheeting 0.50 0.50 0.50
Packaging (direct costs) 3.00 2.00 1.00
Gross profit/($ per equivalent box) 10.00 9.00 7.00
Number of printers 20,000.00 3,000.00 1,000.00
Annual usage (number of equivalent boxes) 100.00 500.00 3,000.00
Total potential profit pool ($) 20,000,000.00 13,500,000.00 21,000,000.00
Information revealed only when asked —

interviewee completes all calculations

Case 3

Framework and analysis (I)
The problem set-up indicates that the client wants to invest in this business. Investment can take
many forms including expansion of manufacturing operations and capacity, expansion of
customer-facing activities, and acquisition of competitors. Its interesting to note that this is
currently a profitable, no-growth business for the client. Investment decisions cannot be made
unless the management team (and the interviewee) understand the market conditions as well as
the client's internal capabilities
This case does not lend itself well to traditional 'case solution structures'. A strong initial
response is to list a set of internal and external factors that must be understood and evaluated.
Ultimately, the interviewee should decide whether investment is warranted, and if so, where
Strong hypotheses might include

• Assuming the client is not capacity constrained, there are likely groups of customers that
represent opportunities for profitable growth
• Depending upon the current go-to-market strategy, the client may need to re-evaluate the
way that it is configured to serve existing and potential customers

Case 3

Assume the client can expand their packaging operations to better serve medium or large
customers, but not both
Interviewee should recognize that a comprehensive solution evaluates the required investment
to serve a particular market segment (packaging line, manufacturing operations, additional
SG&A) against the expected return
• For simplicity, interviewee should ignore taxes and depreciation, assume SG&A is fixed
Client economics and cost to serve each customer group are shown on exhibit 1
Interviewee should evaluate the profit pool from serving medium and large customers. This
should be based upon an assumption about the size of the market that the client can capture.
Assuming the client can match its small printer market share, the client could capture an
additional 20% of the medium or the large printer customer segment
Assume the following (and reveal to interviewee when asked)

• Investment and operation of carton packaging line would cost $675,000 per year
• Investment and operation of the palletizing line would cost $2,300,000 per year

Case 3

A logical conclusion would be that an investment in a carton packaging line would be a superior
investment compared to the palletizing line
A strong answer may also include following

• The carton packaging line is a less-risky investment (requires less up-front capital)
• The solution assumes a static environment. If large printers are growing in number and or
usage of specialty paper, this may change the answer
• The investment in a new carton packaging line would need to be evaluated against other
potential investments to understand if it is the optimal use of the client's capital

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CRACKING

Introduction/review of interview basics

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 1

Cases are representative of our work

To do well on the case, the interviewer is looking for you to

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 2

Discuss prior experiences

20–25 minutes Case discussion

5–10 minutes Q&A, your chance to ask questions

Typically you are given two cases in the first

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 3

Problem solving Communication and

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 4

Recommen- Next steps/other

Without explaining the right approach,

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 5

Open discussion Solving the case

Relax After the setup, ask 2–3 value added clarification

Know your 'story' Pace yourself

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 6

Open discussion Solving the case

Take too long to formulate the summary — think of the

Ask "How did I do?" or "Did I get the right answer?"

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 7

Practice problem solving

Give cases to others to see things from the 'other side'

Practice helps train you to structure the problem

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 8

Introduction/review of interview basics

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 9

China outsourcing opportunity

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 10

China outsourcing opportunity

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 11

China outsourcing opportunity

Topic Information to share with interviewee

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 12

China outsourcing opportunity

Costs in Costs in China Costs in

Labor 0.30 8% of wage rate —

Variable overhead 0.05 140%

Fixed overhead 0.10 60%

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 13

China outsourcing opportunity

Main question Should plastics manufacturer move production to China?

Cost savings Consumer behavior and Effect on current

• Outsource plastic plates and utensils to China

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 14

China outsourcing opportunity

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 15

China outsourcing opportunity

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 16

China outsourcing opportunity

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 17

Introduction/review of interview basics

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 18

Growing specialty paper sales

78800-10-Case Interview Guide v3-03Oct07-DS-rrdc1-ATL.ppt 19

Growing specialty paper sales

Topic Information to share with interviewee

Supply chain Raw mats Layering Sheeting Packaging Distrib

Growing specialty paper sales

All figures are per equivalent box