Beruflich Dokumente
Kultur Dokumente
FIRM
TYPE
clubs.marshall.usc.edu/mcsc
INDUSTRY
MCSC 2016
FIRM
Case #
Type
Name
Industry
Page
Aviation
Sports
Automotive
General
Small Business
11
Market Sizing
Flying High
Market Sizing
Market Sizing
Market Sizing
What a Drag
Market Sizing
Market Entry
RayQ Magazine
Publishing
13
Profitability
e-Commerce
15
Cost Reduction
MarshallCare
Healthcare
18
Profitability
Entertainment
21
10
Profitability
Finance
24
11
Market Entry
Trojan Airlines
Aviation
27
12
Private Equity
Wangs Bistro
Small Business
30
13
Market Entry
Giant-Sized Chickens
Vitamins
33
14
Profitability
Houston Firearms
Defense
36
15
New Product
Missle Misser
Aerospace
38
16
Market Entry
Home Alone
Security
41
17
New Business
Olympic Trials
Sports
47
18
Profitability
Chris Clothes
Fashion, Retail
50
19
Profitability
Cosmetics
57
20
Profitability
Plastics
Manufacturing
60
TYPE
INDUSTRY
DESCRIPTION
Commercial
Assume 3,000 domestic flights per day
An average flight has 250 seats
Average flight occupancy is 80%
Average staff consists of 2 pilots and 8 flight attendants
Cargo
Assume 6,000 flights per day
An average flight has 10 crew members
Key assumptions
Can ignore which day of the week/holidays
Can ignore people who are flying through other means (helicopters,
hot air balloons, sky divers, etc.)
Passengers going through connecting flights, flying more than once a
day, etc. can be considered unique passengers
FIRM
IBM / R1
TYPE
Market Sizing
INDUSTRY
Aviation
FIRM
IBM / R1
TYPE
Market Sizing
INDUSTRY
Aviation
DESCRIPTION
FIRM
Accenture
TYPE
Market Sizing
INDUSTRY
Small Business
Demand:
Assumption: Population is uniformly distributed from 0-80 years old.
21-40 years: 0.5 MM people * (30% use dry cleaning) * (5 articles of clothing/week) = 750K articles/week
41-60 years: 0.5 MM people * (40% use dry cleaning) * (5 articles of clothing/week) = 1MM articles/week
61-81 years: 0.5 MM people * (10% use dry cleaning) * (3 articles of clothing/week) = 150K articles/week
Supply:
Assumption: The average dry cleaner has 10 washers and 10 dryers, each with a capacity of 30 articles
Assumption: A wash cycle = 1 hour. Dry cycle = 1 hour. Transporting clothes is instant.
Assumption: Machines are utilized 60% of the time. Dry cleaners are open 12 hours a day. 5 day weeks
FIRM
1.9 MM Articless / 10.8k Units per Cleaner per Week = ~175 Dry Cleaners
Accenture
TYPE
Market Sizing
INDUSTRY
Small Business
DESCRIPTION
None
Passenger car tires are defined as tires used on regular cars (no
motorcycles, semi-trucks, etc.)
Market Size
10M new cars sold each year
60M cars on the road
Cars have a 7 year life-span
Tires last 45k miles
The average driver drives 15k miles/year
Considerations
Some cars might come with a spare tire this will affect calculations
Key Assumptions
People purchase new tires immediately when necessary
When people replace tires, they replace all 4 at the same time
No growth in installed cars
FIRM
Samsung / R1
TYPE
Market Sizing
INDUSTRY
Automotive
CALCULATIONS
FIRM
Existing Cars
60M cars on the road
Because tires last for 45k miles and average usage is 15k, tires
need to be replaced every 3 years
60M cars/ 3 Years = 20M cars need replacement
20M * 4 tires = 80M tires
New Cars
4 new tires: 10M * 4 = 40M tires
4 new tires + spare: 10M * 5 = 50M tires
Total tires sold each year
80M + 40M = 120M (130M if every new car has a spare)
Samsung / R1
TYPE
Market Sizing
INDUSTRY
Automotive
DESCRIPTION
FIRM
MCSC
TYPE
Market Sizing
INDUSTRY
General
% Smokers
0-20
80M
10%
8M
21-40
80M
25%
20M
41-60
80M
20%
16M
61+
80M
15%
12M
Assuming that each smoker smokes 5 cigarettes a day (some will smoke more than a pack a day but many will
smoke less).
(Total American Smokers) x (cigarettes per day) x (number of days a year)
(8M + 20M + 16M + 12M) x 5/day x 365 days/year
= 56M x 5 * 365
= 280M *365
= 300M x 350
= 105B cigarettes smoked by Americans each year
FIRM
Bonus: Interviewee considers alternates/substitutes to cigarettes (ex. E-cigs & Cigars, etc)
MCSC
TYPE
Market Sizing
INDUSTRY
General
10
DESCRIPTION
FIRM
McKinsey
TYPE
Market Sizing
INDUSTRY
Sports
11
FIRM
0-20 years: 30 MM
20-40 years: 30 MM
41-60 years: 30 MM
61-80 years: 30 MM
% of
0-20 years: 3 MM people * (playing 3 times per year) * (4 balls used each time) = 36MM balls
20-40 years: 4.5 MM people * (playing 6 times per year) * (3 balls used each time) = 81MM balls
41-60 years: 9 MM people * (playing 12 times per year) * (2 balls used each time) = 216MM balls
61-80 years: 9 MM people * (playing 18 times per year) * (2 balls used each time) = 324MM balls
McKinsey
TYPE
Market Sizing
INDUSTRY
Sports
12
DESCRIPTION
None
FIRM
Strategos
TYPE
Market Entry
INDUSTRY
Publishing
13
FIRM
Strategos
TYPE
Market Entry
INDUSTRY
Publishing
14
DESCRIPTION
The client has two products: traditional paper cards and electronic cards
50 billion visits to Yahoos site (per year)
Click through rate to greeting card site 1:1000
5% sell rate (ie: .05 cards sold per visitor)
Cannibalization would be 25% of traditional greeting card business
(number of visitors who would have bought traditional cards, but are
buying ecards instead)
Total company revenues: $20 million
$10 million from electronic cards
$10 million from traditional cards
All inclusive costs for e-cards (design, production, etc)= 50% of
revenues
All inclusive costs for traditional cards = 75% of revenues
Card price to customer = $4 per electronic card
FIRM
MCSC
TYPE
Profitability
INDUSTRY
E-commerce
15
FIRM
MCSC
TYPE
Profitability
INDUSTRY
E-commerce
16
FIRM
MCSC
TYPE
Profitability
INDUSTRY
E-commerce
17
Case 8: MarshallCare
PROMPT
A local hospital has been hurting. The 600 bed institution has had consistently high patient volume growth, but is seeing a rise in the
number of uninsured patients. Recently, it has been under operating margin pressure from the local government, which is requiring the
hospital to reduce its budget $100 million over the next three years. Also, the hospital cannot forego service in this budget cut it must
maintain its service. What do you recommend about the budget, and what implementation challenges to do you see in your
recommendations?
DESCRIPTION
Product
Hospital known for decent quality -- relative to competitors it is middle-ofthe-road
Provides a range of service, from simple examinations to high-end procedures
(ankle sprains to brain surgery)
There is a growing demand for higher-margin services such as emergency
room procedures
FIRM
Deloitte S&O
TYPE
Capacity
They have noticed unused capacity high quality doctors are spending time
doing routine examinations.
Also noticed doctors are working outside of their profession in an effort to
speed-up the process
Costs
Major variable costs
Personnel - Doctors forced to take care of administrative tasks
Supplies - Supply use has been high (medication, waste)
Ask interviewee how they would evaluate this (answer:
benchmark with comparable hospitals)
In this case, the volume of disposable waste has been growing
Major fixed costs: utilities, SG&A, sales and marketing, and capital
expenditures (equipment upgrades)
Cost Reduction
INDUSTRY
Healthcare
18
Case 8: MarshallCare
ANALYSIS
Capacity Issues
Re-align doctors: have them stay within their own practice to ensure they are working on what they are best at
Hire (lower salaried) generalists to deal with routine, low margin procedures
Cost Issues
Personnel cost
Supplies cost
Volume: encourage lower use of disposables (be environmentally friendly)
Price: re-negotiate cost of supplies with vendors, or even look for new, cheaper vendors
Equipment upgrade cost:
Focus on equipment maintenance to reduce frequency of repair
Consider lowering the quality of non essential equipment ie: perhaps use lower quality beds
Data (ASK INTERVIEWEE) What data would you want to collect in order to assess if the issues identified
were indeed issues? How would you validate this information?
Would want to collect info about usage rates, hours worked
Compare to: internal metrics over time, and to other comparable hospitals
Patient turnover
Possible solutions:
Can make beds more compact
Encourage home-care when possible to lower turnover
FIRM
Deloitte S&O
TYPE
Cost Reduction
INDUSTRY
Healthcare
19
Case 8: MarshallCare
RECOMMENDATION
Improve efficiency:
Change talent pool to reflect service needs: hire generalists, re-align doctors, re-shift work focus
Capacity: put beds closer together, encourage home care to reduce turnover
Costs:
Reduce volume (work with nurses & doctors) and price of supplies (work with suppliers)
Cut unnecessary equipment costs, reduce quality
RISKS
Economic
Legal: ramifications with local government?
Internal: unions / bureaucracy that make change difficult?
Competitive response: how will other hospitals react?
Community: PR issues with cutting quality in some areas
NEXT STEPS
FIRM
Patient surveys
Workflow analysis and begin realigning doctors
Talk with suppliers and begin renegotiating
Deloitte S&O
TYPE
Cost Reduction
INDUSTRY
Healthcare
20
DESCRIPTION
FIRM
Analysis Group
TYPE
Profitability
INDUSTRY
Entertainment
21
FIRM
Analysis Group
TYPE
Profitability
INDUSTRY
Entertainment
22
RISKS
Short term variance if customer wins a jackpot
Other legal considerations
NEXT STEPS
Pick a machine, purchase, and install
Consider adding more machines if space allows
FIRM
Analysis Group
TYPE
Profitability
INDUSTRY
Entertainment
23
DESCRIPTION
FIRM
Bain
TYPE
Profitability
INDUSTRY
Finance
24
BONUS: Give only if the candidate asks about reasons the competitor may act irrationally
The competitor has another division. Does this change anything?
The competitors other division comprises 75% of its revenues.
This division manufactures a specialty chemical that is sold to banks to check for fraud. (e.g. ink pen that
changes color when used on counterfeit money).
This division is highly dependent on bank relationships built through the deposit slip business.
FIRM
Bain
TYPE
Profitability
INDUSTRY
Finance
25
FIRM
candidate does ask about competitor acting irrationally and selling at a loss:
The competitor is more likely to sell deposit slips below cost because its other division is so dependent on it.
Price war may not be a good idea.
Client should pursue other means of increasing profits and revenues, such as diversifying into other products,
selling to other customers, etc
Bain
TYPE
Profitability
INDUSTRY
Finance
26
DESCRIPTION
Product
Current flights are cheap, short haul flights from the UK to various
European destinations
Company does not offer business class flights at the moment
Various upgrades such as speedy boarding and greater legroom are
available for purchase
Brand perception is that this airline is extremely cheap, but also has
very low quality service
FIRM
Strategy&
TYPE
Competition
The going rate for similar type business seats are $1k/customer
Entry Method
Company does not want to acquire a competitor
Partnerships are possible, but we have no data on any potential
candidates
Market Entry
INDUSTRY
Aviation
27
FIRM
Ask the following: Our first destination will be Vienna. How much would we have to charge to break even with
25/32 seats filled?
Costs
when
Breakeven Revenue:
25 passengers
$27,500 costs / 25 passengers = $1,100 / passenger
Then
(Ask the candidates to list as many cost items as possible. Keep pushing until they run out of ideas, and
they do so, provide them with the following list):
Fuel: 6,000 gallons @ $3.00/gallon = $18,000
Aircraft dry lease: $2,500/flight
Aircraft Servicing: $600 / flight
Aircrew Costs: 2 pilots @ $700 & 3 crew @ $400 = $2,600
Other Overhead: $1,500 / flight
Airport Charges (landing, passenger use of facilities): $900 / flight
Catering Costs: $1,400 / flight
TOTAL COSTS: $27,500 / flight
ask the following: What challenges do you think the client will face?:
Issues exist around the brand of a low cost airline, meaning the rebranding might be necessary
Landing slots at hub airports are critical to business travel, and will be very hard to acquire
They do not have the full set of capabilities required to deliver a business class service, so choice of
partners is critical
Strategy&
TYPE
Market Entry
INDUSTRY
Aviation
28
FIRM
Strategy&
TYPE
Market Entry
INDUSTRY
Aviation
29
DESCRIPTION
FIRM
Capgemini
Restaurant
When business declined 4 years ago, the owners had to fire 2
assistants, which put a strain on manager / employee relations.
Sell all kinds of food mostly a broad American food place.
Restaurant is like a sit-down diner, but also package food to go.
Average wait time at our restaurant is 5 minutes, average time at the
others is 3 minutes.
TYPE
Private Equity
INDUSTRY
Small Business
30
Ask interviewee: what if breakeven for restaurant every day is 200 customers? Do you think buying would be a
good idea or not?
There is no right or wrong here
Interviewee should begin brainstorming of ways to increase profits (increasing revenue or decreasing
costs) and explain how to do so
Drill down revenues and costs and figure out how to improve the restaurant on both fronts. Push the
candidate until they run out of ideas, after which they should be asked to give a recommendation
Some sample ways to increase profits
Brand more as quicker food option, advertise in business centers, offer delivery, offer more fastfood items on menu, identify restaurant bottleneck and provide more resources
FIRM
Capgemini
TYPE
Private Equity
INDUSTRY
Small Business
31
FIRM
Capgemini
TYPE
Private Equity
INDUSTRY
Small Business
32
DESCRIPTION
FIRM
PwC
TYPE
NOTE: These are prices if the client were to acquire the mines
The additional cost beyond the raw material is $0.10/lb
Market Entry
INDUSTRY
Vitamins
33
Recommendation
Risks
Next
FIRM
Competitive response
Government issues
New entrants
Large investment in expanding
Steps
Establish relationships with corporate farms
Do due diligence on business environment in China
Look into getting patent protection on product
PwC
TYPE
Market Entry
INDUSTRY
Vitamins
34
RISKS
Competitive response
Government issues
New entrants
Large investment in expanding
NEXT STEPS
FIRM
PwC
TYPE
Market Entry
INDUSTRY
Vitamins
35
FIRM
DESCRIPTION
Houston Firearms
Market share in 2015 was 45%, in 2014 it was 55%
Firearms industry has grown by 3% annually in the past 5 years
IBM / R1
TYPE
Product
Most popular product Houston Rocket constitutes 75% of Houston
Firearms sales. Remaining sales come from firearm suppliers
Cost of production, distribution, and marketing have not changed
Prices have increased only at the rate of inflation
Competition
Dallas based firearms manufacturer Bullseye was established in 2005
and has been growing rapidly.
Outsource production and offer a cheaper alternative the Cowboy
There is no other major competition in this industry
Profitability
INDUSTRY
Defense
36
FIRM
IBM / R1
TYPE
Profitability
INDUSTRY
Defense
37
DESCRIPTION
Market
6,000 commercial airplanes (3,000 eligible for installation)
Client can capture a maximum of 50% of the market government law
requires a competitive market
Product
System is installed beneath planes. Small device that does not affect
performance of aircraft. Installation is not an issue
Uses infrared lasers to redirect missiles away from plane, missile will
still detonate in a different location
Government will pay $2M per installation
Variable cost per system is $1.7M
System needs reinstallation every 10 years
Company
Current total revenue of $15B
Fixed costs: $250M for factory, $250 for management/employees, $250
for R&D
FIRM
Bain / R1
TYPE
New Product
INDUSTRY
Aerospace
38
FIRM
Bain / R1
TYPE
New Product
INDUSTRY
Aerospace
39
RISKS
NEXT STEPS
FIRM
Develop contracts with the United States ensuring a certain volume or exclusivity
Continue R&D that disarms or detonates missile to limit collateral damage
Bain / R1
TYPE
New Product
INDUSTRY
Aerospace
40
FIRM
DESRIPTION
Only provide each support slide after being asked for the information
by the candidate
Slides:
Target companys current situation
Demographics and growth by income
Competitive landscape
Competitive estimated revenues and earnings
10M suburban households
1M new suburban households each year
System is priced at-cost
1-2 large local players per market
Large local players are entering national market and competing with
large national player
Bain / R1
TYPE
Market Entry
INDUSTRY
Security
41
FIRM
Number of homes
in market
10 Million
1 Million
Competitors
System Price
$1,000 installed
Service Price
Bain / R1
TYPE
Market Entry
INDUSTRY
Security
42
80%
<$100k
70%
$100K to $200K
60%
$200K to $500K
50%
$500k to $1M
1% Growth
40%
>$1M
30%
2% Growth
20%
4% Growth
10%
4% Growth
0%
US
FIRM
Bain / R1
TYPE
Market Entry
INDUSTRY
Security
43
Competitive Landscape
100%
National Player 5
National Player 4
90%
Local
Local
Local
Local
National Player 3
80%
Player
Player
Player
Player
1
2
3
4
National Player 2
70%
60%
50%
40%
National Player 1
National Market
Local Market
30%
20%
10%
0%
FIRM
Bain / R1
TYPE
Market Entry
INDUSTRY
Security
44
30%
25%
20%
15%
10%
5%
0%
National Player 1 National Player 2 National Player 3 Local Player 1
Revenues ($M)
FIRM
$1,500
Bain / R1
TYPE
$270
$100
Market Entry
$30
INDUSTRY
Local Player 2
$20
Security
45
FIRM
Bain / R1
TYPE
Market Entry
INDUSTRY
Security
46
FIRM
DESCRIPTION
Strategy&
TYPE
New Business
INDUSTRY
Sports
47
Math Answers
Seating Type
Total Number of
Seats per day
Expected
Capacity*
Total Revenue
(for entire 15 days)
$200
420,000
95%
5,985,000
$1.197 B
$120
700,000
60%
6,300,000
$0.756 B
12,285,000
(~12 M)
$1.953 B
(~$2 B)
Exact totals:
(allow these when moving forward with further calculations)
*Provide if asked, but allow interviewee to complete workings without this first, and then ask what assumptions have been made. If the interviewee doesnt think
of this, provide the numbers
FIRM
Strategy&
TYPE
New Business
INDUSTRY
Sports
48
FIRM
Seating Type
Total Number of
Seats per Day
$200
420,000
$120
700,000
Strategy&
TYPE
New Business
INDUSTRY
Sports
49
FIRM
DESCRIPTION
BCG Round 1
TYPE
Profitability
INDUSTRY
Fashion, Retail
50
700M
400M
600M
350M
300M
500M
400M
300M
250M
Retail
Wholesale
200M
Wholesale
Website
200M
Website
150M
100M
100M
50M
M
2011
FIRM
Retail
2012
2013
BCG Round 1
2014
TYPE
2015
2011
Profitability
2012
2013
INDUSTRY
2014
2015
Fashion, Retail
51
Rent
($K)
2,000
15
Sales
1.500
10
Stores opened
>10 years ago
Stores opened
5-10 years ago
Stories opened
0-5 years ago
1.000
500
0
FIRM
10
20
30
BCG Round 1
40
TYPE
50
60
70
80
Profitability
90
Rent
100
INDUSTRY
Fashion, Retail
52
FIRM
BCG Round 1
TYPE
Profitability
INDUSTRY
Fashion, Retail
53
FIRM
BCG Round 1
TYPE
Profitability
INDUSTRY
Fashion, Retail
54
FIRM
BCG Round 1
TYPE
Profitability
INDUSTRY
Fashion, Retail
55
RISKS
Closing 40 out of the clients 100 retail stores would significantly reduce its brick & mortar presence. J&H could
suffer from decreased exposure to potential customers
This strategy only increases total profits by 6%
NEXT STEPS
FIRM
Perform a more detailed analysis of both the short- and long-term impacts of closing the 40 stores
Perform an analysis of why the recently-opened stores are not doing well, and explore ways to make them
profitable (i.e. management changes, adjustment to product mix to better align to customers in those stores
locales)
BCG Round 1
TYPE
Profitability
INDUSTRY
Fashion, Retail
56
FIRM
DESCRIPTION
Company
Market share declined from 90% to 60% in the past two years.
Manufacturing is excellent
Inventory management systems are unsophisticated and ineffective,
resulting in excess inventory and order fulfillment problems
Brands are widely recognized throughout Malaysia
No new products have been launched in the past eight years
BA sells its health and beauty products primarily through local mom
and pop shops (i.e., convenience stores)
Management considered selling its current products outside Malaysia,
but has been distracted by problems in its home country
EY Round 2
TYPE
Profitability
INDUSTRY
Cosmetics
57
FIRM
EY Round 2
TYPE
Profitability
INDUSTRY
Cosmetics
58
FIRM
EY Round 2
TYPE
Profitability
INDUSTRY
Cosmetics
59
DESCRIPTION
Market
No significant threat from competitors
Too difficult to capture more share from
competitors
FIRM
Bain / R1
TYPE
Product
Sells worldwide
Other products are much lower quality
Cell phone customers: are the trendy, up-andcoming players
Profitability
INDUSTRY
Manufacturing
60