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IIM BANGALORE

CASEBOOK 2019-20
Volume 9(A)

ICON | IIMB Consulting Club


INDEX FOREWORD

Description Page No This casebook documents the interview experiences of students across consulting firms
to assist the students of IIM Bangalore in their preparation for case interviews during
• Introduction placements. The aim of sharing these experiences is to inform students about the case-
3
• What to Prepare interview experiences of past batches and to help them prepare for their placements
• How and When to Prepare (Case Interview, Fit Question) 4 accordingly. The experiences listed below are not necessarily the best way to handle
case interviews. They only serve to give students an idea as to what to expect when they
• Interview Process
5 walk into a case interview. Every individual could have his / her unique way of tackling
• Do’s and Don'ts consulting interviews, each of which could be correct.
• Approach This document has contributions from students who appeared for campus interviews
6 conducted by consulting firms during the summer placement process over the past five
• List of Practice Cases
years. The interview experiences have been sorted firm-wise.
• Company Wise Cases
8-127 Special thanks to all the contributors.
(Alphabetical Order) Team ICON wishes you all the very best for summer placements!
• Accenture Strategy 8
• Alvarez and Marsal 16
• A.T.Kearney 27
• Auctus Advisors 45
• Bain & Co. 54
• Boston Consulting Group 75
• L.E.K 86
• K.P.M.G. 94
• McKinsey & Co. 96
• NRI Consulting 112
• Strategy & 124

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1. INTRODUCTION
2. WHAT TO PREPARE
Over a period, a career in consulting has become the numero - uno aspiration for majority
A typical interview for a consulting firm is a mix of “case” and “fit”.
of management students across B-schools in India and abroad. The adrenaline rush to solve
a gamut of intriguing business problems faced by a wide spectrum of industries is enticing
A. Case Preparation
enough for most students to want to explore the intricacies of the consulting sphere.
Cases are arguably the most important aspect of any consulting interview. A good
Considering industry trends and student expectations, many consulting firms visit IIM
performance in a case puts you in a very favourable position with the firm; an excellent one
Bangalore campus every year for the recruitment process; although the main thrust is on
virtually guarantees an offer.
summer placements in different domains like strategy consulting, IT consulting, operations
A typical case is a business situation, requiring strategy formulation to fix a problem or
consulting and analytics. Experience across the globe has given evidence that an internship
enhance efficiency (optimisation). It can vary from a detailed problem statement,
with consulting firms gives the student an insight into the industry on a real-time basis and
supported by several facts to a one-liner conceptual statement with a very broad problem
helps consulting enthusiasts make informed career decisions.
description along with few if any, facts are available. Case interviews are designed to help
The selection process is predominantly based on resume-based shortlist, followed by case
the interviewer assess the candidate on the following parameters.
interviews. Thus, when the competition is amidst the best, it becomes imperative to have a
Thinking process – The interviewer constantly evaluates the candidate as the latter thinks
fundamental understanding of the case interview process of major recruiters. The case
through the problem
interview processes of most of the companies are conducted similarly and follow a similar
Structuring – This involves breaking down the problem into simple, logical components and
pattern.
structuring a broad approach framework.
ICON, IIMB’s consulting club seeks to equip IIMB’s students with a sound understanding of
the consulting industry and provide valuable insights into the entire process as they gear up
to tackle the upcoming summer placement interviews. In a constant endeavour to practice B. Fit Questions
learning by experience, the following pages present the “as it is” interview experiences of The objective of these questions is to determine the degree of fit between the candidate
our contributors during their summer selection process at IIMB. This case interview guide and the firm. This part of the interview serves the following purposes:
aims to provide a preview into the summer selection process of top consulting firms like • Helps interviewer know more about the candidate, his life-story and ambitions Explore
McKinsey & Co., Strategy& (formerly Booz & Co.), BCG, AT Kearney, Accenture, Bain & Co., candidate’s interests, and how they “fit” with those of firms
Deloitte, Roland Berger etc. • Assess how coherently the candidate can present himself in a conversation
ICON through this guide has endeavoured to assist the students in understanding the In parallel to the above aspects, the candidate is continuously assessed on his
consulting industry, the process involved in selection, the detailed preparation guidelines. communications skills as well. Typically, a very good performance in both parts, i.e. case
The interview experiences will help the students develop a fair idea of what to expect in and fit, is essential for a final offer. Very strong performance in one section can compensate
the interviews and how best to approach the probable case solutions. for average performance in the other to a certain extent, but a minimum decent show in
both aspects of the interview is mandatory to be considered for the next round/final offer.

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3. HOW TO PREPARE
B. Fit Questions
A. Case Preparation
Typical questions preparation
The Placement committee generally circulates a list of ~40 questions towards the end of
Resources Term-I.
Case examples provided on McKinsey, BCG, Bain, and other firm websites Casebooks from Interview questions from summer interview process of the previous year should also be
other business schools prepared.
Company Research
Case Study group It’s recommended to obtain a basic knowledge of the company operations, its history,
Typically, a group of 3 – 4 PGP-I students to discuss cases and conduct case interviews culture and vision. It helps in aligning one’s responses on appropriate lines as well as asking
among themselves Thorough preparation of 10-15 cases is recommended through this relevant questions during the interview
mode Vault guides
Ideally, all members should be focused on consulting as the career option. It ensures Limited help from mentors appointed by consulting firms (for shortlisted candidates only)
consistent, enthusiastic participation from all members throughout the preparation period. Company’s websites (and neutral sources such as Wikipedia!)
Diversity/uniformity in academic background and work experience within a team do not
matter.
4. WHEN TO PREPARE
What indeed matters is group dynamics, the amounts of trust members have in each other,
Considering the importance of the entire process and a great deal of preparation required,
to pass honest feedback to others and constructively accept the same. The purpose is lost if
sufficient time should be invested.
members do not believe in other members’ sense of judgement and the ability to pass on
accurate feedback.
A. Case Preparation
A couple of cases can be prepared with some other case study groups to break the
Case preparations are done best in case groups of 3-4 people, which should typically be
monotony and, in the process, obtain varied feedback.
formed as the students begin their Term-II. This should give the students sufficient time of
about 20-25 days for preparation before the summer’s selection process kicks off. It is
Miscellaneous advisable that students form their case groups well within the time to avoid last minute
PGP-II students also conduct mock interviews and case workshops, typically the summer
bottlenecks of not finding the right case partners.
interns from consulting firms
Self-study of solved cases, when group activity is not possible, is beneficial
B. Fit Questions
Knowledge of basic statistics, such as population counts, can prove to be enormously
Another important aspect as discussed above is the preparation of answers for the fit
helpful
questions. Answers to these can’t be framed at the last moment, as it requires a great deal
One should not quit until he or she becomes 100% confident in case analysis
of introspection and successive reviews to frame the best possible answer. Hence, it is in
Sector research, especially those in which interviewers specialise, can come in handy
the interest of the students to start working on the first draft as early as possible,
Equally important is to gain a basic understanding of the sectors in which the candidate has
preferably from the beginning of Term-II.
undertaken any academic projects in the past
4
5. INTERVIEW PROCESS
The fit questions are not directly addressed but are asked through a chat session, where
The selection process has the following stages: the interviewer will try to understand the kind of person one is. You are less likely to be
asked direct questions like “How will you fit in the company culture?” Instead, if a certain
A. Resume Short Listing consulting firm stresses on team culture, you will be judged on how good a team player you
All heads are looked at, and the base criteria need to be passed in each of the heads. The are.
base criterion depends on the batch strength and is not an absolute cut-off. After crossing
the base cut-off, 1-2 spikes are looked at. A Spike is defined as a unique attribute in a 6. DO’S AND DON’TS OF A FIT INTERVIEW
resume - something that is not shared by anyone else in the batch.
DO’s:
B. Interviews
• Adopt a calm and composed manner throughout the interview – Consultants spend
A number of interviews varies across candidates and companies. The interviews for all
much time in direct contact with the client where this aspect of the personality is very
consulting firms are mostly case based. These do not stress interviews. The interviewer
essential
directs the candidate through the cases, providing leads and hints, to understand your
• Be yourself – projecting a false image of being someone else does not work. The person
approach to a particular situation.
on the other side of the table is a seasoned player and would easily spot pretence.
As discussed in the last section, a typical consulting interview has two parts – “fit” and
• Present a coherent picture of yourself in an articulate manner
“case”. Generally, a consulting interview lasts for ~40 - 45 minutes, with the following being
• Be confident – Nothing would compensate for shaky responses and a fumbling tone Be
the breakup
friendly and show that you can present your thoughts in a clear, concise manner.
Fit Interview: 15 – 20 minutes
Consider case solving as a fun experience. The recruiter should be convinced that you
Case Interview: 20 – 30 minutes
enjoy the job
Fit Interview
• Display a good knowledge of the firm, and how it fits into your career goals Be honest –
A fit interview is taken to assess your nature and check your suitability to the firm’s work
Admit if you don’t know the topic interviewer wants to discuss Express your
culture. Fit Interview involves personal questions – Typically of the kind “About yourself”,
expectations and interests concerning the firm
“Why do you want to join a consulting firm?” etc.
A typical consulting interview starts with a few personal questions, lasting for 5 – 10
DON’Ts:
minutes. This initial phase is used to establish rapport. These questions are used to gauge
• Get defensive when the interviewer presents a counter argument
whether the candidate fits the company culture.
• Feign interest in subjects to impress the interviewer – artificial poses don’t carry weight.
Personal questions can also be asked during and after the case, hence be prepared for a
• Appear confused about joining a consulting firm – your career aims should be clearly
question when you are least expecting it.
outlined. Narrate stories that present contradictory images of who you are.
The interviewer forms an impression of the candidate after going through the resume
• Appear ignorant about the position or the firm for which you are being interviewed
and tries to verify it during the interview based on the candidate’s responses to
these questions.

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7. APPROACH

Consulting firms use cases to gauge how well the candidate will perform on the job and if
he/she will like consulting as a job. The case is given as a 3-5 statement caselet. The case is
either number based or strategy based. (Guesstimates may be given either as a part of PARAMETER IMPORTANCE
number based or strategy-based case). The case gives the objective of the case.

• Take 1-3 minutes to structure your thoughts. You are not judged on the final solution Personal Questions Very Important
that you recommend, but on your approach to solving the problem
• Feel free to note down your thoughts, take your time to think before coming up with a
Communication Skills Very Important
solution
• Make sure that you have touched upon all the areas concerned with the problem
Make the session interactive by asking questions, instead of taking it as a test. The Approach to Problem Solving Very Important
interviewer would guide you to the solution by giving hints if you approach wrong
• Industry knowledge is not required - ask them questions about the industry, which are
Final Solution to Case Important
relevant to the case Making assumptions is a necessity- always confirm their validity
• Try to have your approach to the problem. The standard frameworks can act as a
guideline. They would not like rehearsed problem-solving approaches Stress Level Low
• Have your style of how you are going to approach cases (top-down, bottom-up etc.)
Make sure to listen to the information given properly, before asking questions; keep
noting down any extra information given during the case discussion. You can take time
to restructure your approach with the new piece of information given. Industry Guidance by the interviewer Medium
knowledge on few important sectors as telecom, IT will be helpful.
• Be calm and try to address the problem based on the hints provided to rectify any errors
made. Make sure to summarise your findings and analysis so that the recruiter has a
clear picture of your thought process

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8. PRACTICE CASES
• Call centre – cut costs per employee by 0.65$
• A Mobile Handset Manufacturing Company, which has a 60% market share want to • Tractor Company is losing sales. 2-minute case. Write five possible reasons Chain of
strengthen their position and understand where the growth will come from in the next stores were losing business, identify the problem
five years • Petrol pumps, set up on highways. Suddenly, revenues were going down. What
• A foreign bank wants to start a credit card business in India. What options would you might be possible reasons?
suggest? • How would you make quizzing a national pastime? You are a consultant to the
• An upcoming BPO wants to understand the workforce crunch (Supply is less than government
demand) in the next five years • A movie producer has come to you with four scripts. You need to choose one.
• An Indian youth channel wants to start a new music magazine. Is it a good venture? Which one and why?
• A VC firm needs market size for institutions for music and creative skills (on similar lines • What are the parameters you will use to evaluate?
of NIIT for • Confectionary major is planning to get into India. Should he buy a factory that is on
• computer skills) offer, or should he enter on his own?
• Increasing efficiency and reducing costs for a call centre setup • TEM of mobile phones. Sales of your handsets have gone down. Your dealer says
• Selling strategy for condensed milk and packaged milk products in India Infosys is that this is because competitors’ prices are better. What do you do?
starting BPO services, how would you control the attrition rate? • How much investment is required in infrastructure in India in the next 5-6 years
• Estimate the market for platinum and diamond jewellery in India for a European An Indian private bank wants to go global. Which countries should it focus on and
company. what should be its strategy?
• Feasibility of a corrugated cardboard carton manufacturer going into the paper business • How much time would it take a 100-bed heart care hospital to break even and how
(profitability many customers would they require to do so
• analysis) • A box manufacturing company which made a better quality cardboard box (at a
• A Telecom call-center BPO couldn’t cope up with the number of calls it was getting. higher cost) as compared to local manufacturers. Analyze the ways in which they
Figure out the multiple problems ailing the company and generate methods to solve all could cut costs and communicate the value proposition of their product
of them There is a coffee shop on the ground floor of a 40-floor building. Guess its • Various options that could be explored for potential market entry (acquisitions, tie-
monthly revenue ups, green-field etc) of an international chocolate and confectionery manufacturer
• A call centre wants to cut costs by 10 per cent. What are the measures? in India
• Entertainment Company in music, planning to launch a magazine. Data are given such as • A mobile handset manufacturer, which had a leading position in the market but its
expected retailers were threatening to shift to other brands because they weren’t making as
• readership of other magazines, industry growth, competitor prices much money on the sale of this brand. Examine possible reasons for this and
• New heart hospital in New Delhi. It would cost X to set it up. What would be the break- suggest ways to overcome the problem
even time for it? • Market Entry Strategy Case in Retail. Develop a two by two framework to evaluate
• Guesstimate – demand for a Mosquito repellent band that can be worn on the hand in the prospects of 3 lines of retail business – Baby Care Products, Soft Clothing like
India screens, bed spreads, etc. and Leather Accessories
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Accenture Strategy

8
Market Entry– BAJAJ SCOOTER
Candidate : Sudeep Nayak Company : Accenture
Sector : Automobile Industry Type of Case : Unconventional/Vague Sudeep (After thinking)Sir, I should have considered the gender aspect too.
Because in case of bikes, males are the prominent buyers. But in case of
scooters, women would have a higher proportional than in the bike case. I
Problem Statement: Calculate market size for Bajaj that wants to re-enter the scooter
will start it again.
segment
Interviewer No, there is no need for that. Give me the final formula for arriving at the
final demand number.
The Interview
Sudeep Population in Urban Area*Total number from respective
Interviewer Good Morning Sudeep, let’s get started with the case directly? gender*Percentage of employement*Percentage in the Requisite Income
Group*Percentage of Scooter Riders
Sudeep Good Morning Sir. Yes, sure.
Interviewer Alright. So now lets assume the market size has been estimated. Now
Interviewer Great. Let us say Bajaj wants to launch a scooter. It had exited this what next?
business. It wants to relaunch its scooter product offerings. Prepare a
guesstimate for the market size for Bajaj Scooters in India. Sudeep Now I have to analyse the possible synergies between the new and
existing products. I have to see how compatible the existing machinery is
Sudeep’s He started with Urban-Rural classification. Then he subdivided it on the for producing the scooters. And then estimate the number of more
Approach basis of age. Within urban, he classified the different categories within age machines required. Then I will have to check for profitability.
on the basis of their paying capacity. (Matrix Approach)
Sudeep’s He talked of the competitor’s analysis to gauge the strengths and
Interviewer Okay, go ahead. Approach shortcomings of their competitors. He suggested conducted market
surveys to identify the gaps, needs, expectations and customer
Sudeep People with high paying capacity wont prefer scooter, so they are out of perception. (Determining the market size and share, synergy analysis,
the market. Teenage students from the age of 15-18, the low wage group break-even analysis, go-to strategy)
and the middle waged group.
Interviewer No, I think we are done with the case.
Interviewer Sounds fine, but are you sure you aren’t missing out on anything?

9
Market Entry– BAJAJ SCOOTER

Approach Starting Pop:


1.3Bn
Market Entry
Considerations
Rural Urban
60% MECE 40%
Market Market Share
Availability
Analysis Market Size
Male Female
50% 50%
X X
Synergy
Analysis % Working Pop 50% 30%
People who X X X
can afford % in the Requisite
20% 20%
Break-Even + Income Group
Analysis People who X X X
are willing % Scooter 20%
30%
to buy Riders

Recommendations
No. of Consumers = (1.3*0.4*0.5*0.5*0.2*0.3)+(1.3*0.4*0.5*0.3*0.2*0.2)

No. of Consumers (Final) = 10.92 Million

10
Cost Reduction – MEDICAL DEVICE MANUFACTURER
Candidate : Angshuman Company : Accenture
Sector : Medical Devices Type of Case : Cost Reduction

Problem Statement: A medical devices manufacturer is facing rising costs. How would
you go about solving it?

The Interview
Interviewer Good Morning Angshuman , how are you doing today?
Angshuman Good Morning Sir, I am doing good.

Interviewer Very well, let’s get started with the case right away.
Your client is a medical devices manufacturer. (The candidate had prior
experience in medical industry) They are facing rising costs. You have been
hired to devise a cost reducing strategy.
(The candidate asks preliminary questions)
Process The candidate draws the typical medical devices Industry value chain. The
value chain comprises of Research and development, manufacturing,
distribution and marketing and selling. Research and development involves
deciding Design, clinical trials and regulations. And then he suggests
approaches to reduce costs at each node of every step of the value chain.
Interviewer Very good, this will be fine.

11
Cost Reduction – MEDICAL DEVICE MANUFACTURER

Approach

Research and Marketing


Manufacturing Distribution
Development and Selling

• Talk about • Design for


organisation manufacturer • Common route
design, • Component to market • Build conducive
centralised/dec outsourcing • Achieve ecosystem
entralised • Modular Economies of • Salesforce
decision making architecture Scale in optimization
and budget • Assembling at operations
allocation. destination

12
Unconventional/ Vague – INVENTORY OPTIMIZATION
Candidate : Samir Sodani Company : Accenture objective and any other relevant information that may be necessary to
Sector : Supply Chain Type of Case : Inventory Optimization solve the case.
Samir I have a few preliminary questions to help me better understand the
Problem Statement: You are looking into the supply chain of a supermarket store
problem our client is facing. How many stores are there and where are
chain and have been asked to optimize the inventory for the same. What will be your these stores located?
approach?
Interviewer There are 10 stores located in various parts of Bangalore city.
Samir By optimizing inventory, do we mean to reduce the total cost incurred in
carrying and transporting inventory? Also, what is the current system of
The Interview inventory management?

Interviewer Good Morning, Samir. Why don’t you start by telling me something about Interviewer Yes. Currently, the chain has one operational warehouse in the outskirts of
yourself while I go through your resume. Bangalore from where it dispatches the required inventory through trucks
on a weekly basis to all the stores. What will be the factors that you will
Samir Gave the prepared answer. consider minimizing the cost?
Interviewer Great, Can you briefly tell about your roles in your previous work and also Interviewer Well absolutely! It is the biggest concern in this project. How will you
the projects that you handled. assess the potential risks associated with it?
Samir Yes. I worked as a mechanical engineer, planner and associate manager Samir Firstly, I will look upon the cost of operating the trucks for inventory
during the 3 years of my work tenure. I worked on projects relating to transport and their utilization. I will also see whether the week dispatch
inventory optimization, mine digitization and equipment overhauling period can be increased to 15-day period or more by supplying the
[Progress] The interviewer asked several questions regarding the details of the economic order quantity. Then, I will look upon the product perishability
projects done. and expiry in the warehouse. Also, I will look upon the automation in the
warehousing operation so that manual labor tasks can be eliminated.
Interviewer Tell me why you want to get into consulting?
Interviewer The client has outsourced the inventory logistics to a local vendor who
Samir Gave the prepared answer charges the client on per truck basis. The client operates separate trucks
Interviewer Let’s go to the case right now. Suppose you are looking into the supply for all its stores.
chain of a supermarket store chain and have been asked to optimize the Samir Can I assume that because the client is using separate trucks for each
inventory for the same. What will be your approach? store, there may be under utilization of truck space?
[Progress] I started with basic set of clarifying questions to clearly define the
13
Unconventional/ Vague – INVENTORY OPTIMIZATION
Candidate : Samir Sodani Company : Accenture
Sector : Supply Chain Type of Case : Inventory Optimization Approach
Problem Statement: You are looking into the supply chain of a supermarket store
chain and have been asked to optimize the inventory for the same. What will be your
approach?
Inventory
Optimization

Interviewer Yes.
Samir The client can pool the inventory of 2-3 stores and transport it with the Product Truck Utilization Economic Order
Automation
Perishability factor quantity
help of 1 truck. This way, the client will be able to reduce the total number
of trucks and utilize the truck space effectively.
Interviewer How will you address product perishability or expiry in the warehouse?
Samir We can devise a FIFO system for the perishable products in the warehouse
in which the product coming first in the warehouse is leaving first from the
warehouse.
Interviewer Good. I think you have covered most of the aspects of the problem.

14
Market Entry – AUTOMOBILE SECTOR
Candidate : Abhijit Kande Company : Accenture
Sector : Automobile Type of Case : Cost reduction
Approach

Problem Statement: There is a off road vehicle company in South Africa, they have
decided to enter Indian Markets. How to go about it?

Cost
The Interview
Interviewer Good Morning Abhijit, how are you doing today?
Abhijit Good Morning Sir, I am doing good. Exclusive Setting up its
Import Centre Joint Venture
Interviewer Do you have some questions for me?? Distributor own plant

Abhijit No Sir.
Interviewer Then lets get started with the case study. Low Cost Full Control More Expertise Full control

Abhijit Alright, I would like to consider the following options regarding market Increased
entry- High Quality More Profits Less costly
productivity
1 Import centre
2 Exclusive distributor
3 Joint venture with an existing player
4 Setting up its own plant
Interviewer Go ahead, evaluate the options.
Abhijit As, we are unsure about the future prospects of the off road vehicle in
India, I would like to go with import centre .
Interviewer Don’t You think Joint venture is more viable option?
Abhijit Sir, for the early entry option import will be feasible .As and when the
business expands, we can surely go with joint venture.
15
Alvarez & Marsal (A&M)

16
Profitability Enhancement – GLASSLINE CONTAINER MANUFACTURER
Candidate : Pallabi Chakraborty Company : A&M Interviewer It is a special lining reactor. They use glass for lining. They sell directly to
Sector : Manufacturing Type of Case : Profitability end customers.
Pallabi Ok. Thanks. How many factories do they have?
Problem Statement: A reactive vessel manuf. Co. with production capacity 120 units/ Interviewer Five
month receives an order of 150 vessels delivery in one month. How to meet the order?
Pallabi This cost cutting measure is to be employed across all factories?

The Interview Interviewer Yes. Consider all factories are similar. Take one factory as specimen.
Interviewer Good Morning, Pallabi. Why don’t you start by telling me something about Pallabi Since Cost cutting is main agenda, I will first focus on the ways of
yourself? minimizing cost and then move to maximizing revenue part. Is it ok?
Pallabi [Answered] Interviewer Yes. Please.
Interviewer Where did you work before? What did you do exactly? Pallabi I will divide cost in to fixed and variable cost. I will start with foxed cost
assessment. Is it ok?
Pallabi [Answered]
Interviewer Yes. Please.
Interviewer Let’s dive into a case now. Our client is a reactor manufacturer based in
India. Financials are good. The reactor is a special type of reactor with a Pallabi I did a value chain analysis in the paper. He was looking over what I was
glass lining. The client want us to increase revenue and find ways to writing.
minimize cost.
Notes I asked questions on each and every item one by one and suggesting how
Notes I started with basic set of preliminary questions like how many factories, to reduce cost.
location, any special reason for cost cutting or general ,what is the market Pallabi Since we sell directly to customer I am assuming that there is no
demand etc. after which I made a clear outline of the framework I was
substantial cost to dealers and as such marketing.
planning to adopt to solve the case. The preliminary questions helped me
to gain perspective about the industry and the business problem. Interviewer Yes. Go ahead please.
Pallabi I have a few preliminary questions to help me better understand the Notes I was asking questions about fixed cost items. He cut me in between and
problem our client is facing. Is that ok? asked me to focus on variable costs.
Interviewer Yes sure. Pallabi Ok. From where do we source raw materials?
Pallabi Can you tell me more about the product? Interviewer Major is steel. 2 vendors.
17
Profitability Enhancement – GLASSLINE CONTAINER MANUFACTURER
Pallabi How do we source? Any contract? How is lot size decided? Pallabi We can see if there is a substitute material of wood. Wood is costly. And
also storing them vertically will free up space, we will able to sell more as
Interviewer As and when required.
there is ample demand.( He indicated before that there is unmet demand)
Pallabi Since steel is major part of raw material it is better to enter into long term
Interviewer How? I don’t understand.
contract and get price discount. Suppliers will also have stable demand
knowledge and scheduling will be better. Pallabi There were water bottles in the table. I took two of them and showed him
that horizontally they take more floor space and vertically less space.
Interviewer Yes. Good. Go to the next component
Interviewer That’s impressive.
Pallabi What kind of employees do we have? Permanent / contract wise? How do
we pay them? Pay structure? Pallabi Thank you
Interviewer Why do we ask? Interviewer Okay. We are done with the case. What are your 3 major learnings from
your last work experience?
Pallabi We can link pay with performance. See what are the medical benefits
given. If there is chance of cost cutting there. Pallabi [Answered]
Interviewer Yes ok. Interviewer Thanks. Wait outside. I will decide with my partner and let you know.
Notes Then he nudged me to look into the production process. I asked the Pallabi Thanks.
various staged of production. He helped me construct a flow chart. Again I
started by asking questions about what is the exact process currently
employed and offered my suggestion as to how that can be improved. I
will cite some example.
Pallabi How much is the process technology driven?
Interviewer Mostly manual
Pallabi We can see lots of scope of incorporating technology. This will drive down
cost.
Interviewer Yes.
Pallabi How are the reactors stored?
Interviewer On wood rolls. Laid horizontally
18
Profitability Enhancement – GLASSLINE CONTAINER MANUFACTURER

Approach

Profitability

Revenue
(-) Costs

• Not the focus area

Variable
Costs (+) Fixed Costs

• Core focus area • Not the focus area


• Raw material cost –
long term contracts
• Employee costs –
controllable, non-
controllable
• Use of technology
• Storage cost of
vessels

19
Output Enhancement – GLASSLINE CONTAINER MANUFACTURER
Candidate : Nitesh Kumar Company : A&M Interviewer Cutting and bending is totally automated and machine based, welding
Sector : Manufacturing & Production Type of Case : Output enhancement requires both machine and manual effort as somebody has to use the
machine to weld, rest all process are completely manual.
Problem Statement: A reactive vessel manuf. Co. with production capacity 120 units/ Nitesh Are there any constraints for procurement of iron sheets?
month receives an order of 150 vessels delivery in one month. How to meet the order? Interviewer No there are no constraints. The company can procure any number of iron
sheets.
The Interview Nitesh What about cutting and bending machine? How many sheets can it
Interviewer Hi Nitesh. Lets start this interview with a case study. Do you know what process per day and what is the average number of sheets that are
does throughput mean? required to be processed for each container?
Nitesh Do you mean industry or production throughput? I have a basic idea about Interviewer Assume machine can process 20 sheets per day and each vessel requires
that. around 2 processed sheet to be manufactured.
Interviewer Good. So there is a company that makes reactive vessels with a layer of Nitesh What is capacity of welding process and since the process is manual how
glass line coating on the inner end. The company currently has a capacity many workers are deployed to attain that capacity?
of producing 120 vessels per month. They have recently secured a very Interviewer Two welders able to produce one vessel per day and there are . Assume
large order of 150 units to be delivered in one month. How should they do
that there are sufficient machines to reach to that output. On an average,
to meet the order? there are 12 welders in the factory.
Nitesh Can you let me know the basic process flow of manufacturing of this Nitesh In the lining process, which is completely manual, what are the capacity
reactive vessel? constraints?
Interviewer The process starts with sourcing of iron sheets. After this, these sheets are Interviewer One vessel is lined per every four workers working in this division. On an
cut and bended as per the design requirements. After this, the processed average 16 workers work in this department.
sheets are welded to give the shape of the container. Post welding, the
interior of the vessel is lined with a glass coating to make it reaction proof. Nitesh Any limitations with regards to packaging and distribution?
Once the coating is done, the is packaged and distributed. Interviewer No. The company can package and distribute any number of vessels as the
Nitesh Okay. To increase the throughput, I will first have to identify the bottleneck entire process is outsourced.
in the process and the reason of it being the bottleneck. To move further, Nitesh What about the factory operation time? Does it operate on all days of
which of the following steps involve use of machines and machines,
week and how many working shifts are there?
manual labour or both?
20
Output Enhancement – GLASSLINE CONTAINER MANUFACTURER
Interviewer Good, assume that the factory is operational on all 7 days of the week. Nitesh for low efficiency and opportunities to improve. After understanding the
Currently, the work is being done in only 1 8-hour shift. gap, the corrective measure can be, and not limited to, bringing in a
better supervisor, introduction of/redesigning incentives for workers and
Nitesh Can I take a minute to do the calculations?
managers etc. which will help improve the efficiency of operation in the
Interviewer Sure. long run.
Nitesh Based on the information provided, procurement of iron sheets and Interviewer Okay. This is enough from the case side. Let me why do you want to join
packaging & distribution have no bearing on my production capacity. the company?
Cutting & bending machine can process enough sheets to produce 300
Nitesh A&M takes pride in execution and working here I will be able to work on
vessels per month, welding department can process 180 vessels per
the entire spectrum of activities from plan to execute and this motivates
month while lining of vessel interior is the bottleneck with 120 vessels per
me to join A&M.
month. So, we can either increase the strength of the department by
hiring temporary workers or increase the shift time temporarily to fulfill Interviewer What other calls do you have?
the order at hand.
Nitesh Apology in advance but we have very strict placement committee
Interviewer Okay, but are you not forgetting a factor in your calculation for manual guidelines of not disclosing it to anybody.
processes?
Interviewer Okay no problem. Please wait outside for a while.
Nitesh Can I take minute to think over my calculation. [After some time] Yes,
since the processes are manual, there should be a factor for efficiency.
What can be a good estimate of worker efficiency in this case?
Interviewer Great. Consider it to 50% for now.
Nitesh Based on the efficiency considerations, no process has a limitation of
capacity and ideally the factory should be able to fulfill the order with the
current step-up. But since is a manufacturing plant, 50% efficiency is too
low a number. So in the short run, I still feel that we will not be able to
fulfill the order by just focusing on the efficiency aspect and will have to
implement one of the above recommendations.
Interviewer Sounds fair. How will you improve efficiency in the long run?
Nitesh I will first conduct an in-depth time & motion study to identify the reasons
21
Output Enhancement – GLASSLINE CONTAINER MANUFACTURER

Approach

Process Type Capacity

Procurement of Iron
1 Sheets
Manual Infinite

Cutting & bending of 20 sheets per day


2 sheets
Machine
~300 vessels p.m.

1 vessels per day


3 Welding of sheets Machine + Manual per 2 workers
~ 180 vessels p.m.

1 vessel per day for


4 Lining of vessel interior Manual every 4 workers
~120 vessels p.m.

Packaging &
5 distribution
Manual Infinite

22
Cost Reduction – MANUFACTURING FACILITY
Candidate : Kirti Kishan Company : A&M Interviewer That’s interesting. All the labour is permanent as of now. Can you
Sector : Manufacturing Type of Case : Cost Reduction elaborate on the distribution of Permanent and Contractual labour?
Kirti Sure Sir. There has to be a safe ratio maintained between the permanent
Problem Statement: Your client is a manufacturing company in Pune. It is looking at and contractual workers so that at no point of time, there is labour
cost cutting measures. unutilized or on bench.
Interviewer How would you determine this safe ratio between permanent and
contractual labour?
The Interview
Kirti This will depend on the demand for the goods being manufactured and
Interviewer Good Morning Kirti, tell us something about yourself? the seasonality of demand. For producing the average number of goods
Kirti Good Morning Sir. Prepared a generic answer for this. demanded, permanent labour will be employed. For seasonal peaks above
average, contractual labour can be employed to absorb higher demand.
Interviewer That’s good to hear. Let’s get started with the case. Your client is a This can be seen from the Demand curve and the cycle of demand.
manufacturing facility in Pune. It wants to reduce its costs. What measures
can it take. Interviewer What if the demand cycles are very short, won’t hiring and firing
contractual labour become very expensive?
Kirti Okay, The client wants me to look at various ways of reducing costs. Sir,
what type of goods are manufactured by this company and is it involved in Kirti Yes sir, my previous assumption was based on less frequent seasonal
only manufacturing or other processes like distribution as well? peaks. However, if the cycles are very short, the manufacturing facility
should invest in cross training its labour into various functions so that a
Interviewer Let’s not go in depth about the type of goods. Consider it a general cost limited number of them can look after different processes in times of
reduction scenario for a company that manufactures goods in Pune to be peaking demand instead of hiring contractual labour for a very short span.
finally exported from Mumbai.
Interviewer Very Good, we’ll see you in the second round.
Kirti Alright. So, for a typical manufacturing facility, cost can be broadly
classified into:
1. Fixed Costs : Rent/Lease, Machinery for production (Tech), Patents
(intangible)
2. Variable Costs: Labour, Utilities, Packaging, Transportation
Interviewer Very well, how can you reduce Labour Costs?
Kirti Labour can be of 2 types, Permanent and Contractual (Temporary task
forces). Does the manufacturing company have this distinction in labour? 23
Cost Reduction – MANUFACTURING FACILITY

Approach
Cost

MECE Fixed Variable MECE

Capital: Technology/ Intangible: Raw Packaging &


Labour Utilities
Rent/Lease Machinery Patents Materials Transportation

Depending on the Demand Cycle


Permanent Contractual
have a safe split between these 2.

Cross
If Demand cycle is very short with
Functional
Training frequent peaks, adopt this

24
Declining Profits– HOSPITAL INDUSTRY
Candidate : Kirti Kishan Company : A&M Kirti Has there been a change in the consultation fees or the course of
Sector : Hospital Type of Case : Profitability treatment offered over time?
Interviewer No, These factors have remained the same more or less over time.
Problem Statement: There is a hospital facility facing declining profits. What can be the
Kirti Okay, Is there any new hospital/clinic that’s been set up in the vicinity or a
potential causes for the same. new government scheme that’s incentivising customers to shift towards
them due to their cheaper price?
The Interview Interviewer Nothing like that, the landscape has remained pretty constant in terms of
it being the best hospital in the vicinity.
Interviewer Good Morning Kirti, let’s get started with the case unless you have any
preliminary questions for us? Kirti Then this means that the footfall of patients has remained similar as well
over a period of time. (Acknowledged by the interviewer with a nod).
Kirti Good Morning Sir. Sure, we can start with the case. Coming to the other factor, I would like to investigate if the in-house sale
Interviewer Well. Your client is a hospital facing declining profits. How would you of medicines has been the driver of declining profits.
identify the issue? Interviewer Go ahead.
Kirti Alright, The hospital’s profits are reducing over a period of time and I have Kirti The sale of in-house medicines can be affected by the following factors:
to identify what might be leading to this (The interviewer nods at this). So, 1. Change in the contractor/distributor of in house medicines
profits are a function of the revenue for the hospital less its costs. Should I 2. Parity between what’s being prescribed and sold
analyse both the metrics one by one or do you want me to focus on just 3. Change in the timings of the medicines being sold (24*7 or not)
one?
Interviewer The distributor has remained the same for a very long period of time,
Interviewer We know that the YoY revenue has been declining. What are the major supplying the same brands’ medicines. The medicine shops have also
areas you’ll look over? been open 24*7 always.
Kirti Okay. So, for a hospital there can be broadly following streams of revenue: Kirti Alright, then I would like to explore if there is a mismatch between the
1. Consultation Fees for the doctors prescribed medicines and the ones being sold.
2. Revenue from the treatment given
3. Sale of in-house medicines Interviewer Okay. That is the reason for decline in inhouse medicine sale. But, Why?
4. Others: Revenue from leasing premise for cafeteria, leasing space for Kirti Sir, there can be medicine shops around the hospital selling similar drugs.
parking, other shops set up in hospital The doctors might collude with these shops for a cut in the medicine sale.
Interviewer Very well, how would you go about finding the pain-point after this? Interviewer Very good, this was what actually happened with the hospital. 25
Declining Profits– HOSPITAL INDUSTRY

Approach Profits

Not to be
Revenue MECE Cost
considered
No Change
Cafeteria
Consultation Treatment In House Others:
Fee Revenue Medicine Lease Parking MECE
(Fees) X (Patients) (Treatment cost to MECE Shops
Patient) X (Patients)

Parity w/
Timings of
Distributor prescription by
sale
doctors

Medicine shops
around hospital

Doctors
colluding with
these
Final Answer

26
A.T.Kearney

27
Salesforce Problem – PHARMACEUTICAL
Candidate : Hardik Dubal Company : A.T.Kearney Candidate Okay. Please give me a minute to structure my thoughts. (After about 40
Sector : Pharma Manufacturer Type of Case : Salesforce Problem seconds) I will approach this case from the revenue side, if that is okay
with you (nods). So, revenue can be increased by increasing the number of
units sold, or by increasing the basket size. Since we are only focusing on
Problem Statement: The client is a pharma company which has a patented drug which
one drug, I shall ignore the second part, unless there is a complementary
will expire in 6 months, how should the company sustain itself? drug that sells along with this drug.
Interviewer There is, but you can ignore the second part for now.
The Interview
Candidate Okay. The number of units can be increased either by increasing the
Interviewer Good Evening, How was your day? Tell me something about yourself? number of doctors that know about and prescribe our drug (demand side)
or by increasing the pharmacies that keep our drugs (supply side). Here I
Candidate Good Evening. It was good. A prepared answer is provided. would like to ask you a question: When a patient is diagnosed with the
Interviewer That’s good to hear. Let’s get started with the case. The client is a pharma disease, what percent of the doctors remember the name of our medicine
company which has a patented drug. This drug is its cash cow. However, while prescribing?
this patent will expire in 6 months, and the company is worried how it will Interviewer Good question. The recall rate of our drug is about 20%.
sustain itself. Analyze the situation and suggest recommendations
Candidate Okay, so there is a potential to increase this rate. I shall first analyze this
Candidate Interesting! According to my understanding, the customer wants to ensure tree. We can increase demand through existing doctors, or by reaching
that it can keep capitalizing on this drug even after the patent expires. Am I out to new doctors.
right? (interviewer nods). Thanks. May I ask a few clarifying questions, so
that I can understand the situation better? Interviewer The company’s sales force has reached out to all the major hospitals in the
country. Reaching out to the smaller hospitals will not be economical.
Interviewer Sure. But do it quickly.
Candidate Alright. We can either increase the advertisements for our product, or we
Candidate Sure. A couple of questions: a. Where is this company located? b. Does any can increase our salesforce efficiency.
competitor have any similar product? c. What type of drug is this- is it an
over-thecounter drug, or a prescription drug? and d. What type of ailment Interviewer Tell me more about this salesforce part that you are talking about.
is it used to cure- something permanent or a short-term disease? Candidate Sure. We can increase our reach by increasing the number of salespeople,
Interviewer The company is located in India, our competitor has a similar product, the the number of doctors each salesperson contacts, and the frequency of
drug is a prescription drug and is used to cure short term diseases. contact. These are somewhat interconnected, but individually they
provide more information. May I know the standing of our company wrt.
the competitor for these numbers?
28
Salesforce Problem – PHARMACEUTICAL

Interviewer Good observation. I will mention the ratio wrt. our competitor for these Approach
metrics: a. 1:4 b. 10:1 and c. once a month vs. once in two weeks.
Candidate Wow, that is a huge difference, and a tremendous scope for improvement. Volume Sold
Why are our numbers so low in comparison?
Interviewer The company has not updated the sales team numbers for a while now,
since they are under the assumption that they are efficient. You have
arrived at the root cause. What recommendations would you give the
company? Basket Size # of Units Sold
Candidate Well, a personalized relationship with the doctors goes a long way in
establishing trust, as well as over-the-head recall of the product. Apart New Doctors
from increasing the sales force and improving the frequency of contact
with doctors, we can also use social media to reach these doctors through
Doctors Pharmacy
targeted advertisements.
(Demand) (Supply)
Interviewer Good, thank you.

Existing Doctors
Strength of
Salesforce

Salesforce # per Salesforce

Frequency of
Contact

Advertisement

29
Process Problem – TELECOM
Candidate : Hardik Dubal Company : A.T.Kearney Candidate Thanks. Customer service can be divided into the service itself, and the
Sector : Telecom Type of Case : Salesforce Problem process that the customers go through while experiencing the service.
Since you had mentioned earlier that the service is top-notch, I am
assuming that the problem is with the process. Is my assumption correct?
Problem Statement: The client is a service provider which has been facing a large
number of complaints from customers. Suggest what could be done. Interviewer You are right. Please elaborate on this hypothesis.
Candidate To understand the process better, let us have a look at the various steps
that the customer goes through. They place the call, then reach the
The Interview
startup menu--
Interviewer Good Evening, How was your day? Tell me something about yourself? Interviewer You are forgetting something. The year is 2012, and startup menus were
Candidate Good Evening. It was good. A prepared answer is provided. not very actively used back then.

Interviewer That’s good to hear. Let’s get started with the case. Your client is a service Candidate My apologies. Then the customer waits for the call to be attended by the
provider in India during the year 2012. They have the largest market share teller, after which the call gets connected. I am not analyzing this further
in the industry but are facing a large number of complaints from since the quality after this is good. Which part of the process seems to be
customers. Their service is top notch, but somehow the customers are not the problem?
very happy. A T Kearney has identified that there is an internal problem. Interviewer Customers have expressed concerns about a very long waiting time for the
Please build up on this information to identify the problems and suggest tellers to pick up the call.
what could be done about them.
Candidate The waiting time of the customer is a function of only two things- arrival
Candidate When you say “’internal”, I am assuming that it has to do with the core rate and service rate. **I applied concepts from queuing theory and wrote
product/ service that they offer, and not an organizational design problem. down the formula for the length of the queue. The interviewer seemed
Interviewer Yes, you can assume that. How will you approach the case? Talk me quite impressed.**
through your thoughts. Interviewer Good work. We have understood that the number of tellers that we have
Candidate Definitely. An internal problem can be caused by three reasons: Product are enough for the specific requests that the customers have. Still, the
quality, customer service and meeting customer demands (product line). waiting time is longer than the competitors’.
Which one would you like me to explore first? Candidate May I know by what margin?
Interviewer The quality of their offerings is at par with the requirements of the
customer. You can dive deep into the customer service part.
30
Process Problem – TELECOM

Interviewer About 20%. But don’t delve on this further. I want to know the qualitative Approach
reasoning that you provide Internal Problem

Candidate Okay. This means that we have unnecessarily long calls from customers.
Interviewer Good observation. But there is another problem that we are facing. Can
you list down the various reasons that the customers might call us for? Product quality Customer Service Product Line
Candidate Definitely. The calls can either be general queries regarding the top-ups,
various schemes that the company advertises etc. or it could be some
genuine specific problem that they are facing, and they need support Service Process
regarding this problem.
Interviewer Good. General queries that customers call us for do not fall into the
Non-existent in 2012
domain of specific requests that the company considered while calculating
the number of tellers Start-
Customer Connect Problem
Call Up
Candidate I see. Can we say that the number of these non- specific requests are high, Menu
waits with Teller Solving
leading to larger number of calls from the customers?
Interviewer Good job. You have identified the problem. What are some of the
recommendations that you would give to the company to improve their
service?
Low Service Rate High Arrival Rate
Candidate The company needs to start using startup menus! (with a smile)
Interviewer Alright, looks like we are out of time. Please wait outside so we can tell
you the next step in the process. General Queries
Candidate Thank you! Existing
New Customers
Customers

Specific Problems
31
Declining Market Share – AUTOMOBILE MANUFACTURER
Candidate : Shruti Prabhu Company : ATK
Interviewer The Client is only engaged in the manufacturing of commercial vehicles
Sector : Automobile Type of Case : Profitability/Market Exit
mainly trucks. These trucks are from small to large sizes having multiple
uses where chassis is the same and other add-ons are procured locally.
Problem Statement: The client is an Indian automobile manufacturer with operations The client has only 1 manufacturing plant in Europe with auto parts, R&D
abroad as well. Its market share is declining in Eastern Europe and it is finding it and product development happening in India. These markets are
difficult to run its operations. It is exploring to either streamline its operations or exit characterized by changing nature of product.
the market altogether. Shruti Who are their competitors in this market? Are they facing the same issue?
Is the problem being faced by our client only in Eastern Europe region?
The Interview
Interviewer This problem is faced only by Indian manufacturers. The other Korean
manufacturers are not facing the issue. The competition for our client is
Interviewer Good Morning Shruti, how are you doing today?
mainly from resale of second hand trucks. This problem is being faced by
Shruti Good Morning Sir, I am doing good. our client only in the Eastern Europe region.
Interviewer Very well, let’s get started with the case right away. Shruti Alright. So to clarify, our problem statement is to suggest to an Indian
truck manufacturer whether to continue its operation in eastern Europe
Interviewer Your client is an automobile manufacturer operating in India and other
given its declining share?
countries outside India. It observes a decline in market share in Eastern
Europe. Hence, it is finding it difficult to run operations. The client wants to Interviewer Yes, That’s right.
know whether there is something it can do to streamline its operations or
Shruti Before I move on to suggesting whether to continue or exit the market, I
it should exit the market altogether?
would first like to deep dive on the product survival factors in eastern
Shruti I would like to begin with a few clarifying questions on the client. Europe. For this, I would break it down into 4 buckets- Price, Place,
Promotion and Product. What is the pricing band of our products – High
Interviewer Yes, Go ahead.
end, medium or low price? What are the channels they use to sell their
Shruti What kind of automobiles does the client manufacture? Does it operate trucks? Have they engaged into any promotion activity?
across the value chain? Where are these automobiles produced? Since I do Interviewer The client sells trucks in low price segment to fight competition. The sale
not know about the eastern European market, is there something peculiar
happens only through dealers who sell trucks of multiple manufacturers.
about these markets that I should keep in mind?
Client has a low budget for promotions. It does not have any TV ads. It
promotes sales only through schemes in stores.

32
Declining Market Share – AUTOMOBILE MANUFACTURER
Candidate : Shruti Prabhu Company : ATK
Interviewer Yes, please go ahead.
Sector : Automobile Type of Case : Profitability/Market Exit
Shruti In order to streamline its operations as per alternative A, we should focus
Problem Statement: The client is an Indian automobile manufacturer with operations on cost reduction across the value chain which includes R&D, Raw
Material Procurement, Manufacturing, Transportation and Marketing.
abroad as well. Its market share is declining in Eastern Europe and it is finding it
Since there are frequent product changes happening in Europe, it makes
difficult to run its operations. It is exploring to either streamline its operations or exit
more sense for the R&D team to be based out of Europe. However, the
the market altogether. cost of labour and set up which will be higher than that in India needs to
be considered. Instead of manufacturing all auto parts in India, the
The Interview company can consider importing only the cheaper parts. The product
development can be done faster in Europe with greater synergy between
Shruti Ok, Since the client operates in the low price segment with major the rapidly changing product specifications. The transportation cost using
competition from second hand trucks, we know that the competition is Airways vis-à-vis waterways of imported components should also be
price based. The dealers are the link between the company and its factored in. The manufacturing location can be closer to port/airport
customers, but this dealership is not exclusive to the client. You also which will reduce inland freight. New promotion strategies and incentives
mentioned about the changing nature of product in the eastern European should be devised to target dealers who will encourage customers to buy
markets. Can you please elaborate? our new trucks instead of second hand ones.
Interviewer The government has introduced some new safety features such as sudden Interviewer Okay, Sounds good.
auto braking. This has resulted into high cycle time in production. Also,
Shruti Thank you.
frequent changes are leading to increase in the R&D effort and time. Given
this scenario, what do you recommend?
Shruti Can I have a minute to jot down my thoughts?
Interviewer Sure.
Shruti I would approach the way forward by choosing between two alternatives
A) Continuing its eastern European business by tweaking its operations or
B) Withdrawing from the business. Given that the problems being
currently faced by our client is specific to the company and not attributed
to a general slowdown in the market, I would like the client to not opt for
alternative B. Hence, is it ok if I further discuss only alternative A?
33
Declining Market Share – AUTOMOBILE MANUFACTURER

Approach Profits

Quantity
Volume seems affected
Cost Revenue because of competitive
pricing from second-hand
Price truck market

Fixed Cost Variable Cost

Additionally, 4P framework can be implicitly


used to define the promotion and placement of
Across the the product at the decided price
Raw
Value chain Manufacturing Marketing Distribution R&D
Material
Not discussed deeply in the case

Production
Import Cost Labour Cost
Cost

Recommendation (as per the interview):


• Since the market demand isn’t declining & issue seems client specific, the client should continue in the market by
streamlining the operations (cost reduction)

Or, (quantitatively impactful alternative)


• Estimate the profit (P) and the variable costs (VC) of the client,
• If, P > VC; streamlines the operations (cost reduction)
• If, P < VC; leave the business
34
Estimate Demand for Milk/ Market Entry – FOREIGN RETAILER
Candidate : Aishwarya Sharma Company : ATK
Interviewer Lets assume that the retailer wants to specialize in Milk. Why don’t you
Sector : Retail Type of Case : Guesstimate + Market Entry
estimate the demand for milk for me?
Progress At this point the interview takes turn to become a guestimate rather than
Problem Statement: Foreign retailer looking to set up shop in India. Demand for milk to
a market entry case.
be estimated followed by suggestions on how to enter the market.
Aishwarya Sure Sir. To begin with, I would like to know in what sort of area will the
establishment be set? Rural/ Urban, Commercial/Residential?
The Interview
Interviewer It will be in an urban residential area.
Interviewer Good Morning Aishwarya, how are you doing today? Aishwarya Okay, So I will assume my starting population to be similar to a
Aishwarya Good Morning Sir, I am doing good. metropolitan city like Bangalore(Urban) with a population around 12L.
Next, I would like to know what types of milk will be sold? Multiple
Interviewer Very well, let’s get started with the case right away. categories like fat, skim, soy, almond etc?
Your client is an international conglomerate looking to set up shop in India.
How would you go about it? Interviewer Assumer 2 types of milk only: Fat and Skim
Aishwarya Okay, so there is an international player looking to enter the Indian market. Aishwarya Right, so the type of milk consumed will depend on the population
Is there a particular type of business model they are willing to set up or demographics. Families usually consume Fat milk while Individual working
they do you want me to evaluate various options? professionals and old people consume Skim milk.
Interviewer The client wants to set up a supermarket sort of an establishment. Since it Interviewer I get where you’re getting at. How would you arrive at the demand now?
is a new player, it has to make some backward investments in the supply Aishwarya I will calculate daily demand for milk since it is a highly perishable good
chain as well. and then multiply it by 30 to get a monthly demand number
Aishwarya Alright, is it looking to specialize in a particular product category or does it Interviewer Okay, go ahead
want to enter as a one-stop shop supermarket?
Aishwarya Refer to the flowchart on the following page for calculation of the final no.
Interviewer It wants to specialize in dairy products.
Interviewer Very good, now that you have monthly demand, why don’t you tell me
Aishwarya Okay, the depth of dairy product line is quite high encompassing milk, ice various ways through which the retailer can enter the Indian Market?
cream, butter, cheese, yoghurt, ghee, frozen foods. Is the retailer looking
to develop expertise in this whole category or a product specific expertise Aishwarya It can take up a franchise, set up its own brand, acquire an existing player
is expected? depending on the depth of pocket, enter into joint ventures/mergers.
35
Estimate Demand for Milk/ Market Entry – FOREIGN RETAILER

Approach Daily Demand


for Milk

Rural Urban

For consumption at For Supply to other


Residential Commercial
home bigger institutions

Similar to Population Starting Pop:


of Bangalore 12L

Assumed 40% of Working Prof + Assumed 60% of


Family Set Up Population
Population Old People
Daily Demand Daily Revennue
Fat Skim
6L Ltr Rs 132L
4.8 L 7.2 L
Assuming 0.5ltr consumption of milk per day Monthly Monthly
X 30
2.4L Ltr 3.6L Ltr Demand Revennue

Assuming Rs 25/ltr for Fat and Rs 20/ltr for Skim 180L Ltr Rs 3960L
Rs 60L Rs 72L

36
Unconventional/ Vague – PERSONAL CARE PRODUCTS
Candidate : Shamta Thakkar Company : A.T. Kearney Shamta For the distributor specifically, we can also consider forward integration –
Sector : FMCG Type of Case : Unconventional/ Vague many FMCGs have their own distribution depots. Another option can be
analyzing where a distributor is needed based on factors like geography,
volume, etc. and eliminating redundancies in the network.
Problem Statement: Your client is a personal care products manufacturer. It wants to
reduce the margins it is paying. How can it achieve that? Interviewer Okay, and what about the other intermediaries in the network?
Shamta For wholesalers, we need to conduct regular awareness and training
workshops. We could also provide perquisites to wholesalers and invest in
The Interview
relationship building. In the case of wholesalers as well, we can provide
Interviewer Good Morning Shamta, I am going to get right to the case economies of scale (by maximizing volumes with most crucial
wholesalers) & economies of scope (ensuring that wholesalers are able to
Shamta Good Morning! Yes, Sure. meet demand for all SKUs by efficient supply chain planning). Does this
Interviewer Your client is a personal care products manufacturer. It wants to optimize sound acceptable to you?
its sales costs by reducing the margins it is paying. Interviewer Yes, you can move on to retailers
Shamta Okay, in that case, should I evaluate the sales & distribution network first? Shamta In the case of retailers, again some products can be made exclusive to
Interviewer Yes, that is correct, go ahead certain retailers e.g. to large supermarket chains.
For both wholesalers and retailers, volume bonus can be introduced. Price
Shamta Alright. So, for a typical FMCG, the sales and distribution network would discounts for bulk volumes can be considered to the extent they do not
involve the following: completely offset the reduction in margins.
Manufacturer > Distributor > Wholesaler > Retailer > Final customer
Should I analyse each leg of the network or do you want me to focus on Interviewer Don’t you think these strategies are imitable? How do you ensure your
one particular leg? intermediaries choose you over competitors?

Interviewer You can analyze each of the legs in the network Shamta Yes, to some extent. Can I get a couple of seconds to think through this?

Shamta I will start with the Distributor. Manufacturers typically have a strong Interviewer Yes, sure
relationship with them. If we are reducing the margin paid to them, we Shamta We can benchmark our margins with those of competitors. We can reduce
must compensate to not lose their loyalty. We could introduce ‘exclusive margins from current levels while ensuring that they are still at a slight
distributor’ agreements to increase selected distributors’ product volume. premium over competitor margins
We can also incentivize them with periodic bonus on meeting a pre-
decided sales volume. Another option can be price discounts on bulk Interviewer Yes, we did conduct a benchmarking analysis for the client. Good work,
volumes. we shall see you in the next round 37
Unconventional/ Vague – PERSONAL CARE PRODUCTS

Approach

Manufacturer Distributor Wholesaler Retailer Final Consumer

MECE MECE MECE

Exclusive Forward Relationship Exclusive


Incentives Incentives Economies Incentives
Agreements Integration Building Agreements

Volume bonus Price discounts Awareness/


Perquisites Scale Scope
Trainings

Competitor Benchmarking at each leg of the network. Margin floor – Competitor Margins + xx% Premium

38
Market Sizing – GROCERY RETAILER
Candidate : Prunoti Dutta Company : A.T. Kearney
Sector : Retail Type of Case : Market Sizing Interviewer Sure. I would consider the following equation:
No. of households who purchase from the client per month x Average
Basket Size
Problem Statement : Our client is a retailer (Superstore chain) who wants to enter the I would consider households visiting the store in a month, irrespective of
Indian market. Do you think it is a good idea? number of trips made in one month. Out of 50,000 households, I would
consider only the top 40 % income segment households and assume only
The Interview 10% is captured by us. Thus, 0.1*0.4*50,000 = 2000 households. Do we
have information regarding their average basket size per month?
Interviewer Our client is a retailer (Superstore chain) who wants to enter the Indian Interviewer Yes. 40% of the households spend around Rs. 2000 per month on average,
market. Do you think it is a good idea? other 40% about Rs. 1000 and the remaining spend Rs. 3000. This involves
Candidate I would require more information to provide any suggestion. What does it both grocery and apparels from our client’s offering
sell? In which city is it targeting? Who are its competitors? Candidate This would help.
Interviewer It sells 80% grocery and remaining is apparels. It is planning to start with No of Households Average Basket Size Total Spending
Bangalore. Its closest competitor is Big Bazaar etc. 800 1000 800000
800 2000 1600000
Candidate First, I would like to estimate the market size. 400 3000 1200000
Interviewer Yes, sure. Go ahead. Revenue per month 3600000

Candidate Assuming the client opens a store in Bangalore, I would consider the target Thus, per month, on an average it could potentially earn Rs. 3.60 million.
as around 5 km diameter around the store. To consider opening a store, we would also consider the capital
Thus, the area under consideration is 3.14*2.5*2.5= 20 sq.km approx investment, other costs and estimate the breakeven.
Interviewer Sure.
Interviewer That looks good to me. Thank you.
Candidate The population of Bangalore is approx. 80-85 lakhs, assuming number of
households to be 2 million and area of Bangalore is 700-750 sq km. Thus, Candidate Thank you.
per sq km can have 2500 households typically. Thus, the target area would
have approx. 2500*20 = 50,000 households. As assumed, let average
household size be 4, thus there are 2 lakh individuals.
Interviewer Good, could you estimate its potential revenue?
39
Market Sizing – GROCERY RETAILER

Approach

Number of
Households (~2
million)
÷ Area of Bangalore
(700-750 sq. km) =
Households per sq.
km (~2500)

X
Target Area
(3.14*2.5*2.5= 20 sq. = Target Households
(~50,000)
km)

Lower Income Middle Income Upper Income Assume 10%


Segment (60%) Segment (30%) Segment (10%) market share

40
Guesstimate – DOMESTIC RETAIL FIRM
Candidate : Vivek Gaba Company : ATK
Vivek Since the outlet sells a wide variety of products including groceries, food
Sector : Retail Type of Case : Guesstimate and electronic items, a large fraction of spent income (70% of total) will
be consumed in buying these items. I would like to assume this fraction to
Problem Statement: Estimate the revenue for a modern retail outlet operating in be 75%. Should I go ahead with this approach or do you want me to
Bilekahalli. consider some other parameters as well?
Interviewer The approach is alright. Assume the average income of 30k/ month can be
used as representative for all 4 income groups. Go ahead and estimate the
The Interview revenue.
Interviewer Good Morning Vivek, how are you doing today? Vivek Since we have the income figure, we can now calculate the amount being
Vivek Good Morning Sir, everything is great. spent on products sold at modern trade outlet. 0.7*0.75*30k= 15k per
household is used for buying these products. Assuming 4 person per
Interviewer Good to hear that. Let’s jump directly to a guesstimate then. You need to household, we now need to calculate the number of households in
estimate the revenue for a modern retail outlet operating in Bilekahalli. Bilekahalli.
Vivek I have a few preliminary questions to help me better understand this retail Interviewer Okay. How will you estimate Bilekahalli’s population?
outlet’s business. What kind of products are sold at this outlet? What
other similar outlets are available in this area? Is there anything that Vivek This can be done using two data points: the area of Bilekahalli and area of
differentiates our client from its competitors? What is its market share? Bangalore city as a whole. We know that population of Bangalore is
around 12 million. Using the two areas we can then calculate Bilekahalli’s
Interviewer Products like groceries, home care and personal care, electronic goods etc. population
are sold at this outlet. There are competitors present in this space and
market share for our client can be assumed to be 40%. Interviewer Assume the area of Bilekahalli and Bangalore is 5 and 700 square
kilometers respectively.
Vivek Ok, great! I would like to take a minute to think through this.
Vivek Final revenue will be 15k/4*(5/700*12M)*0.4=128M per month
Interviewer Sure. Take your time.
Interviewer Good! We are done with the guesstimate
Vivek First, it is important to estimate the income for all 4 classes, High, Middle,
Low and Very Low Income. Then it can be safely assumed, that 30% of
income remains untouched and contributes towards savings. Rest is used
for expenditure.

41
Guesstimate – DOMESTIC RETAIL FIRM

Estimate Revenue

Type of store and


market share

Consumer type &


Spending

Population
Estimate

Revenue =
Population * Income

42
GUESSTIMATE - Capacity Estimation
Candidate : Anant Sharma Company : AT Kearney
Interviewer A market research like this will be prohibitively difficult. Suppose you have
Sector : Transportation Type of Case : Supply Chain
a company like Intel in Jabalpur with 2000 employees. Hardly 1% would
fly every month. While there could be a consulting firm which might
Problem Statement: We have an airport Developer. They had been given contract of require more frequent travels – so scaling might not be correct.
developing an airport in a Tier2 city. What capacity should they have in mind? Anant Ok. I’ll approach this problem differently. I want to consider the passenger
count and their mode of travel in Jabalpur. I would estimate how many I
The Interview can expect would shift to Air travel if given an opportunity.
Interviewer Go ahead.
Anant Good Morning sir!
Anant So, in Jabalpur roadways and railways are primary modes of transport. I
Interviewer Good morning, Anant. Tell me something about your role at AlumCom. would like to focus on railway passengers because fares are somewhat
Anant Alumcom’s motto is “Building bridges across time”. So, that’s what we comparable to airways. Jabalpur, a railway junction, is connected to metro
basically do. We try to ensure that the current students get the maximum cities in India and if an airport comes up, under hub and spoke model, it
benefit out of experiences of our Alumni and Alum’s feel perennially will have flights only to metro cities. I would consider 6 metro cities first
connected to campus. and then scale accordingly. How many trains do we have from Jabalpur to
6 metros ? What’s the occupancy for each of the ticket classes?
Interviewer Okay, let’s do a quick case now. Our client is Airport Developer. They had
Interviewer Assume 1 to each city and 80% occupancy for all. (Assume that all
been given contract of developing an airport in a Tier 2 city. What capacity
should they have in mind? passengers are bound to metro destination only)
Anant Ok, a train in general has around 16 coaches. I’ll take 3 3rd AC, 1 second
Anant Which Tier 2 city are we talking about? Is it in India?
AC and 1 First AC. I’ll find the number of seats and the occupancy rate.
Interviewer Consider a city like Jabalpur in MP.
Interviewer How much of them would shift to air travel. What factors we can consider?
Anant Ok. I will try to get an estimate of fixed passenger traffic that we can Let’s assume IRCTC issues 30% of seats via tatkal, we can assume that 80-
Anant
expect. Over that we can have a peak factor to account for seasonal
90% of them would shift to flight given an option as they are already
variations, festivals etc. We can have a look at businesses in Jabalpur and
can classify them like local, multinational and then get an estimate of paying more. For rest 70% (regular bookings), we can apply a blanket
number of trips currently required. We can get an estimate from few factor of 10% conservatively.
companies and then scale it accordingly. Interviewer Thanks, Anant. I think we can wrap up the case now.

43
GUESSTIMATE - Capacity Estimation

Approach Airport
Developer

Geography

Number of Mode of
Passengers Transport

Roadways Railways

Target Focus 1st AC 2nd AC 3rdAC

Coaches in a train = 16
Seats in a 1st = x
Seats in 2nd AC = y
Seats in 3rd AX = z
Occupancy Level = 80%
Capacity = (16x+16y+16z)*8

(Similarly for bus)

44
Auctus Advisors

45
Guesstimate - NUMBER OF PASSENGERS AT AN AIRPORT
Candidate : Abhijit Kande Company : Auctus Advisors
Sector : Airport Industry Type of Case : Guesstimate
Approach

Problem Statement: Estimate the number of passengers on Bangalore Airport No. of Time between consecutive take-off or
Passengers landing is 2 mins Hence, total number
of flights landing in an hour = 60/2 = 30
flights Average daily operating time of
The Interview Runways=4 the runway is 20 hours. Hence, flights
handled per day = 20X30 = 600 flights
Interviewer Good Morning Abhijit, how are you doing today?
Abhijit Good Morning Sir, I am doing good.
capacity per International Domestic capacity per
Interviewer Very well, let’s get started with the case right away. aircraft=300 30% 70% aircraft=180
I need a demand estimation of the number of passengers on Bangalore
airport.
Seating Seating
Abhijit Okay, so there are 4 runways at Bangalore airport. Time between capacity=300*30% Capacity=180*0%
consecutive take-off or landing is 2 mins . Hence, total number of flights
landing in an hour can be calculated
Interviewer Ok, go ahead.
Average
Abhijit The runways operating time is 20 hours. So, total flights can be calculated. occupancy=60%
The percentage of domestic and international flights can be assumed?
Interviewer Yes, go head with any assumption Average seating capacity per flight = 216 (180X70%+300X30%) and average occupancy = 60%
Abhijit Okay, domestic and international flights and the seating capacity is
Therefore average number of passengers per flight = 130 (216X60%)
assumed. The number of passengers *flights are the number of
passengers. The calculation is depicted in the flow chart. Total passengers per day at Bangalore airport = 78,000 (130X600)
Per year=78000*365=28470000

46
Guesstimate – NUMBER OF PLANES AT AN AIRPORT
Candidate : Koustav Company : Auctus Advisors
Sector : Airports Type of Case : Market Sizing Guesstimate Approach

Problem Statement: How many planes will be there in a day in the Bangalore
aerial region?
No. of planes in the
Bangalore Aerial Region
The Interview in a day

Interviewer Hi Koustav, why don’t you tell us something interesting about


yourself?
Koustav Hello Sir. “Well prepared answer, followed by 2-3 minute
discussion on the same”
Interviewer That’s interesting. Let’s get going with the case interview then. I
will be asking you a simple market sizing guesstimate. How many
planes will be there in a day in the Bangalore aerial region?
Koustav I will walk you through my calculations step-by-step. No. of 15
No. of No. of minute
1. No. of terminals in the Bangalore airport
terminals X flights/15 mins X intervals in a
2. We take a 15 minute window and assume Y flights are taking
off and landing per terminal every 15 minutes day = 24/0.25
3. Number of terminals multiplied by 24 hours/0.25 hours
(number of time slots in a day) multiplied by Y
Koustav’s Progress Draws a flowchart depicting the process of arriving at the final
estimate for the number of planes in the Bangalore aerial (See
Approach on the right)

47
Profitability/Resource Utilization – HOTEL
Candidate : Vinaya Hegde Company : Auctus Advisors
Interviewer Yes, you can go ahead with these assumptions.
Sector : Hospitality Type of Case : Resource Utilization
Vinaya To analyze both the possible decisions, I would like to break down the
Problem Statement: Your client is a hotel owner. He has recently inaugurated a hall. He profitability into revenue and cost for both the situations.
is thinking of either offering it as a marriage hall or as conference hall. What would you Interviewer Could you please take us through the cost side of both the cases.
recommend?
Vinaya Alright. The cost side would have more variable cost in the case of setting
up a marriage hall – customized decoration and functional needs for every
The Interview marriage. Also, the maintenance cost could be higher due to more casual
usage by the guests. In case of conference hall, relatively, the
Interviewer Hello Vinaya, how are you doing today? requirements would be similar and not much investments would be
Vinaya Hello Sir, I am doing good. required at regular intervals.
Should I also look at the revenue side?
Interviewer Very well, let’s get started with the case right away.
Interviewer Only tell us the most important factor you would consider while
Interviewer Your client is a hotel owner. He has recently inaugurated a hall on the evaluating the revenue for both the cases?
ground floor. He is thinking of either offering it as a marriage hall or as
conference hall. What would you recommend? Vinaya So, I would consider the frequency of booking, which would be relatively
more variable (seasonal) in case of marriage hall. On the contrary, the
Vinaya I would require more information to provide any suggestion. booking could be stable for conference hall due to its location in the
Interviewer Yes, go ahead. vicinity of airport.

Vinaya In which city is the hotel located? What is the type of locality? How big is Interviewer I think this would be enough for our discussion. We should wrap it up
the hotel? here.
Interviewer The client is running a 3-star hotel close to the Mumbai airport. Vinaya Thanks.

Vinaya Can I take a minute to pen down my thoughts?


Interviewer Sure.
Vinaya I will assume that since the conference hall belongs to a 3-start hotel, it
would be equipped with basic amenities – air conditioned, big enough for
200+ gathering, wi-fi, good lightings.
48
Profitability/Resource Utilization – HOTEL

Approach

Profitability

No. of Wedding Hall: Seasonal


Bookings Conference Hall: Regular
Cost Revenue

Price

Fixed Cost Variable Cost

Maintenance Insurance, legal Initial Set-up


Advertising
Cost and taxes cost

Customization Food & Support staff Utility Bills


Cost beverages cost (usage based)

49
Revenue Maximization – METRO RAIL
Candidate : Vinaya Company : Auctus Advisors
Vinaya The broad avenues for generating non fare revenues are advertising, food
Sector : Transportation Type of Case : Maximizing Revenue
and beverages outlets, and other spaces available for rent at the station
premise. Additionally, the trains can themselves be used as advertising
Problem Statement: The client is a Metro train operator. The ridership for the city has platforms.
become stable now and it is not possible to increase fare prices. How would the
Interviewer Okay, so do you think all these options can be standardized across all
operator generate additional revenue to manage its rising expenses?
stations?
Vinaya No. Since the revenue from rented spaces and food and beverages outlets
The Interview
depends on the size of the stations and also the location, we cannot
standardize all the options.
Interviewer Hi Vinaya, how was your day? Tell me something about yourself. However, advertisement strategy can be standardize in terms of billboard
Vinaya (a prepared answer is provided) and TV sizes and their placements around the stations.
Interviewer Tell me one thing that you have done is your life which you are proud of Interviewer Now suppose you have to chart a plan to execute your proposals. How
and one things that think you messed up. would you prioritize the implementation plan?
Vinaya (a prepared answer is provided) Vinaya The execution can first be targeted at the stations with maximum footfall
and can then later scaled to other stations.
Interviewer Let’s now discuss a case.
Interviewer This sounds good. We will stop here.
Interviewer The client is a Metro train operator. The ridership for the city has become
stable now and it is not possible to increase fare prices. How would the Vinaya Thanks you.
operator generate additional revenue to manage its rising expenses?
Vinaya Before I begin to break down the problem, can I please ask some
clarification questions?
Interviewer Yes, Go ahead.
Vinaya What reference metro city can I assume for this case?
Interviewer You can assume the city to be Bengaluru.
Vinaya (makes notes)

50
Revenue Maximization – METRO RAIL

Approach
Non Fare
Revenue

Advertisement Advertisement Food & Beverages Rented


at station on Train outlets Spaces

Static Ads ATM/Vending


Indoor and Dynamic Ads
(billboards) machines
outdoor (TVs)
Limited to larger
stations
Mini-Stalls
(non-food)

Parking Lots

51
Revenue Streams – METRO PROJECT
Candidate : Koustav Company : Auctus Advisors Interviewer Ok. Perfect. What are the sources of non-fare revenue inside the metro
Sector : Public Sector Type of Case : Revenue Streams station?
Koustav There are two sources of revenue. Firstly, the area in the mezzanine level
Problem Statement: Your client is the government. A metro project is currently could be utilized for retail stores. Secondly, the space inside the metro
underway. The client wants to know how to increase its non-fare revenues. station could also be used for advertising in terms of signages, digital
advertising boards.

The Interview
Interviewer Could you elaborate on what kind of retail stores could be opened?
Interviewer Good Morning Koustav, tell us something about yourself? Koustav The most relevant store to open could be a QSR (quick service food and
Koustav Good Morning Sir. Prepared a generic answer for this. beverage) store. General purpose stores like WHS Smith could also be
opened.
Interviewer That’s good to hear. Let’s get started with the case. Your client is the Indian
government and a metro project in underway. There are land parcels Interviewer How would you determine which store to open?
around the metro station and some area in the mezzanine level and the Koustav Your firstly analyze the passenger demographics in the nearby area.
concourse level, what can we do with it to increase non-fare revenues? If the station is situated in an office area, food and beverage will sell more,
Koustav Okay, the client wants me to look at various ways of increasing non-fare and thus you give more space to food stores and less to general stores.
revenues inside the metro station and outside the metro station. We will,
first look into the area next to the metro station. Either a residential Interviewer What are other non-fare sources of revenue that you can think of?
project or a commercial project can be executed there.
Koustav 1. Token Brands- Each token can have the logo/advertisement of a
Interviewer How will you evaluate which option to go with? certain brand who will pay royalty fees for it.
2. Station naming rights can be given out for a monthly charge.
Koustav Alright. So there are 3 aspects through which we can determine which
Interviewer Very Good, we’ll see you in the second round.
option, residential or commercial we should choose:
a. Demand and supply for each type of project
b. The profitability rate and occupancy rate for each type of
project
c. NPV calculation for each project after which we choose the
one with the higher NPV
52
Revenue Streams – METRO PROJECT

Approach Non- Fare Revenue


Streams

Inside the Metro Outside the Metro


Station Station (Empty Land)

Advertising- Residential Commercial


Retail Stores
Signages and Project Project
banners
Consider the following factors
prior to making a choice
Quick Service Food General Stores between residential or
and Beverage Store like WHS Smith commercial project:
a. Demand and supply for
each type of project
Prior to making a choice b. The profitability rate and
between QSF and general occupancy rate for each
stores, analyze the passenger type of project
demographics in the nearby c. NPV calculation for each
area. project after which we
choose the one with the
higher NPV

53
Bain & Co.

54
Guesstimate - DUE DILIGENCE OF A MULTIPLEX
Candidate : Aman Chedda Company : Bain & Co.
Interviewer Make that 100 for ease of calculation.
Sector : Entertainment Type of Case : Guesstimate + Due Diligence
Aman Okay, thank you. So, the revenue will be: number of screens* number of
shows* occupancy for that show* average ticket prize.
Problem Statement: Leading multiplex wishes to evaluate its revenue . Has been facing a
Now, for occupancy, we will consider peak and non-peak hours. Let’s say
decline in its occupancy rates - wants to understand the causes and solutions for the same. the run time at PVR is from 10 am to 12 am which is a total of 14 hours.
Taking the average run time of a movie as 2.5 hours, we can approximate
The Interview the number of shows to 5 per day. Occupancy will also differ on weekdays
and weekends. On weekdays, approximately 30% occupancy and on
Aman Good Morning Sir! weekends approximately 80% occupancy can be assumed. Ticket Price on
weekday is taken as ₹250 and on weekends as ₹350.
Interviewer Good morning! I see you’ve studied at the Bombay Scottish School. I
worked at Bain in Mumbai myself. Anyway, let’s start the case. Now, this Interviewer Okay, so you’ve got the approach. Now, let’s say the client is facing a
case is about the due diligence of a multiplex. decline in occupancy of late. Can you think of possible reasons why?
Aman Okay, should I analyze the revenue or the profitability or another aspect? Aman There could be multiple reasons such as :
1. Rise of at home consumption through platforms - Netflix/Hotstar, etc.
Interviewer Please focus on the revenue. 2. Increasing trend towards live events, especially during IPL.
Aman Okay, so the possible sources of revenue can be – tickets, parking charges, 3. Maybe the content quality is going down.
auxiliary items available at the cinema, shopping outlets at the cinema. 4. Pirated copies are easily available.
Interviewer (interrupts) Please focus on the tickets. Why don’t you guesstimate the Interviewer So, how do you think they can improve their revenue?
revenue in a city like Mumbai? Consider a PVR in Mumbai. Progress Interviewer leaves the room. Candidate starts to panic. Interviewer comes
Aman Okay. Please give me a minute to frame my approach. back after a couple of minutes and demands an answer.
Interviewer Sure, go ahead. Aman The multiplex could come up loyalty cards to incentivize customers. It
could offer enticing packages of popcorn + tickets . It could work on the
Aman So, Mumbai’s area is 600 km2. In a 5km radius, there are 2 PVRs. ambience of the theatre. It could give premier and loyal viewer offers. It
Therefore, we can say that approximately for every 25 km2 there is 1 PVR. could focus on providing a good experience since viewers value that most.
So, approximately there will be 24 PVR multiplexes in Mumbai. Each will
have at least 4 screens. So, the total screens will be 96. Interviewer Okay, great. Thank you and Welcome to Bain!

55
Guesstimate - DUE DILIGENCE OF A MULTIPLEX

Approach
Multiplex

Single Franchise
Screen (PVR)

Source of revenue Ticket Others

Assumptions
Mumbai’s area = 600 km2 with 2 PVRs/5km radius. Every 25 km2 there Total screens in
is 1 PVR -> 24 PVR multiplexes in Mumbai. Screens per PVR = 4. Total Average Run
Mumbai Run Time/day
screens = 96. time/movie

14 hours 2.5
Total Revenue

Weekday Weekend
occupancy Occupancy
TR = Number of screens* Number of shows* Occupancy for that show*
Average ticket prize 30% 80%

= Number of screens*[5*weekday occupancy *weekday ticket price]+ Weekday ticket Weekend ticket
Number of screens[2*weekend occupancy*weekend ticket price] price price
=96*[5*0.3*250] + 96*[5*0.8*350] ₹ 250 ₹350

56
Market Share Estimation - GROCERY RETAIL
Candidate : Ruchika Company : Bain & Co.
Type of Case : Increase Market Share Interviewer Okay, sure.
Sector : Retail (Grocery)
Ruchika Such professionals consider convenience primary. Now does this store
offer any discounts?
Problem Statement: A hyper-local grocery supermarket wished to increase its market
share. What should it do? Interviewer No. Think about why would someone want to go here other than say a
Reliance Fresh?

The Interview Ruchika Primarily because it is near me or during emergencies. I would rather take
out time over the weekend and go to a Reliance Fresh and buy everything
Ruchika Good Morning sir! in one go.
Interviewer Good morning. The case we will be discussing today is about a hyper local Interviewer Okay, if that is the case, how can this store gain market share.
grocery store which sells local, exotic and frozen vegetables. It wishes to Ruchika Okay, so the target includes bachelors who are lazy and like convenience.
capture more of the market share. How will you approach this? So what this shop could do is –
Ruchika Could you please clarify what market share signifies in this case? Does it A) it could provide varieties that others don’t have and could charge a
signify share in terms of volume or revenue? premium on that and cross subsidize the price.
Interviewer Take it as revenue. B) It could provide discounts.
C) It could provide door to door services which would be much cheaper
Ruchika Okay, which geography are we dealing with?
for the customer versus other options.
Interviewer Take Gurgaon. Interviewer Bang on, this is exactly what we did. You have solved the case.
Ruchika Okay, so I am assuming that Gurgaon is a very working professional heavy
place where there are concentrated sections of such people.
Interviewer Correct. Assume it is located near cyber city.
Ruchika Okay, so the demographic of this place will be of bachelors or early
married couples. So, I will look at their purchase patterns to understand
how to drive quantity.

57
Market Share Estimation – GROCERY RETAIL

Approach
Grocery Store

Focus for market Revenue Volumes


share

Geography

Consumer
Behaviour

Value Compared to close


Quality Needs Additions competitors

Diversified Door to Door


Discounts
Products Service

58
Performance Improvement – IT CONSULTING
Candidate : Maitresh Agarwal Company : Bain & Co.
Maitresh For the client hunting team – KPIs – Revenue per sale employee, clients
Sector : IT consulting Type of Case : Cost reduction
converted per employee per unit time

Interviewer Which one do you think is the metric of higher priority?


Problem Statement: Can you tell me the KPIs of the sales team required for hunting?
Maitresh Revenue – because number quality of client matter, not just the number
Interviewer Okay, how would you improve this metric for the sales team?
The Interview
Maitresh Performance linked incentives for the sales (hunting) team so they
Interviewer Good Morning, Maitresh. Why don’t you start by telling me something achieve the KPIs
about yourself?
Interviewer Ok, let’s say the sales team is incentivized and everything. The
Maitresh Good Morning. I was born and brought up in Bihar and have completed my organization has many functions that support the sales team – e.g.
primary and secondary education from Patna. I joined Economics Program product sales div. How would this support the sales team? How will you
at IIT Kanpur for my under graduation and was working with PwC Diamond incentivize these supporting divisions?
Office in Mumbai for 10 months before joining MBA program here at IIM
Bangalore. Maitresh Functions identified – product, account management, lead generation
(with many hints that the interviewer was dropping), tele-calling team
Interviewer Great, so you do have some bit of experience in the industry.
Maitresh Yes Sir Interviewer Correct, how can their performance be measured? And maybe improved?

Interviewer Okay so let’s start with a case. We are an IT Consulting company. We have Maitresh The people in the product team will help prepare the pitch deck for sales
few, but big marquee clients who want to improve their hunting team and how they can cross – sell and up-sell various products.
capabilities. Can you tell me ways to help them achieve this goal? The people in the account management team will help with onboarding
and opening of the account. So how many accounts they open and what
Interview I started with preliminary questions – what kind of clients, kind of retention rates they hold.
Progress where/what/who are we? Lead generation team – divide # of leads in 3 buckets (Hot, Cold and Junk)
Maitresh I restated the problem and asked what exactly am I required to find out. and based on the %age of these leads/totals leads can decide their
variable pay. Tele-calling team – How many appointments they are able to
Interviewer Can you tell me the KPIs of the sales team required for hunting? fix and what is the amount of potential revenue they are bringing in.

59
Performance Improvement – IT CONSULTING

Approach
Interviewer Okay, Impressive. Tell me what kind of incentive structure you will have for
KPI
account management team?
Interview I laid out a broad 4P (Product, Placement, Price and Promotion) framework
Progress to further my analysis
Clients
Revenue per
converted/empl
sale employee
Maitresh The account management team should have a fixed bonus pay for each oyee/unit time
account they can open based on the client’s revenue category (Gold, silver,
Bronze) and also once the account has been active for at least 6 months to
make sure they keep the clients engaged and farming revenue from them. Increase by
Interviewer Thanks, Maitresh. I think we can wrap up the case now. incentives

Maitresh Thanks.
Interviewer We would like to extend the offer to you, will you accept it or reject it? Account
Product Lead Generation Telecalling
Maitresh (after 10 seconds of being zoned out) definitely accept the offer (I was not Management
able to fathom the feeling that I was through in one round and did not
apply a single case concept learnt in past 50 days.)
Appointment
fixation and
Pitch for Sales A/C opening & potential revenue
Management

Hot Cold Junk

60
Market Entry - QUICK SERVING RESTAURANT
Candidate : Karan Tulsiyan Company : Bain & Co.
Interviewer You have to open a unique restaurant, you can choose your expertise.
Sector : Service Type of Case : Go to market
Moreover, a QSR is generally a fast food serving place.

Problem Statement: You have to open a QSR (Quick Serving Restaurant) in Bangalore, Karan Ok, thank you, I would begin by deciding the place first, considering it’s a
which place would you choose, which product and then we will go towards pricing QSR, I would prefer to open in Koramangala, which caters to both the
and finally its feasibility college going crowd as well as shoppers.

The Interview Good Morning, Karan! How are you feeling today?
Interviewer Interviewer Okay, which food will you prefer to serve?
Karan Good Morning. I am feeling good, a little nervous maybe.
Karan I will to open a roll joint, preferably north Indian, considering that
Bangalore now has a huge influx of people from north both for studies and
Interviewer Being little nervous is always good before an interview, you have work. Moreover, there are very less restaurants serving the same and
mentioned in your CV that you had a self-owned business, then why hence would be a differentiator.
consulting?
Karan Yes definitely, while I was working into my business I was basically acting as Interviewer Okay! That was well thought. So Karan! How will you proceed next?
a negotiator between buyers and sellers of edible oils, in B2B space, a part
of the work also included monitoring production plants and solve supply Karan The next thing would be to find a place to rent in Koramangala which has
chain issues, this prompted me to think that if I can solve problem for small an easy visibility and should be near to crowd gathering areas. Do we have
companies, why not work for diverse sectors and bigger companies, hence any budget in mind?
consulting.
Interviewer Well that’s interesting, without wasting time any further let us start with Interviewer On point! We do not have any budget, why don’t you guess the same.
the case
Karan Okay, according me a small shop in Koramangala would be around 25k per
Interview You have to open a QSR (Quick Serving Restaurant) in Bangalore, which month. Should I proceed with it?
Progress place would you choose, which product and then we will go towards pricing
and finally its feasibility Interviewer Yes, you can go ahead but before that lets do a small guestimate, estimate
Karan I have a few preliminary questions to help me make a better decision, to the sales you would have daily qualitatively.
start with do we need to open a unique QSR or any well-established brand?

61
Market Entry - QUICK SERVING RESTAURANT
Karan Since it will be a new business, I will like to keep the margin low at 20 per
Karan To estimate our sales (monthly, for quick calculations), it is generally a roll and then I would divide the fixed cost by my margin to take out the
product of avg. no. of rolls sold each day & avg. price per roll. To estimate breakeven point. If my annual sales (in no of rolls) is greater than the
the number of rolls sold, I would begin by estimating the number of breakeven sales, it will be profitable for me to move ahead and start it,
people visiting Koramangala each day. To estimate that, I would begin by hence making it feasible.
population of Bangalore, classifying it according to age and then
concentrating on people from 15 to 45 as our target customer. After Interviewer It’s exactly what I was thinking. Karan, do you think that you are missing
calculating this number, I would take a 10% factor who would visit on something?
the area every day & inflate it for weekends. After we get this no., I would Karan (After taking a minute to think) As far as I can think, I missed out on 2
give a 5% chance of people visiting our store and making a purchase. things.
Should I move ahead, or do you want me to rethink on some part? Firstly, we did talk about price, place & product but we did not talk about
promotion which would be a considerable part of my cost initially.
Interviewer The thought process looks clear, but how did you choose 5% as a fair Secondly, while considering sales I forgot about delivery system as well.
probability and how would you decide the price?

Karan I choose a 5% probability because there are various shops already present
Interviewer Exactly, what you missed out, now since you have figured that out, can
around the area which would be a direct competition for us, moreover not
you quickly state how will these factors play in your case
everyone prefers roll, so I assigned a low probability to it. Coming to
pricing, there are generally 3 ways of pricing, cost-based pricing; value- Karan Talking about marketing cost, I think it will be around 20-30% as it would
based pricing & competitor-based pricing. Before I move ahead, do we include discounts, online & offline advertisements. It would eventually
have any data regarding the competitors and do you wish me to elaborate fall below 20% after sales stabilize.
more on 5%?
Interviewer Okay!!, well thought and what about food delivery, how would you
Interviewer No, 5% was a well thought answer, and we do not have any data regarding venture into it?
competitors. Why don’t you go ahead with cost-based pricing? Karan Well, since we have started the business now, we will tie-up with swiggy,
uber eats etc. It will not only increase our sales but would also be a
Karan Sure! To calculate through cost-based pricing, I will divide the cost into
source of our online promotion through reach. The channel will have its
fixed & variable. Considering the fixed costs would be that of labour, rent, costs, but it also has the potential to increase our sales by 50%.
chef’s salary, tools & utensils; and variable cost primary would be
vegetables, fruits and chicken & cooking gas. Do you want me estimate all Interviewer That’s right. Also, these channels will help you reduce your cost in
of this or should I assume convenient numbers? delivery vehicles and delivery boys and hence would help you expand
easily. We can close the case now.
Interviewer You can assume that per roll costs 50 inclusive of fixed cost, how much
profit will you charge and how will you check the feasibility? Karan Thank you, Ma’am. It was good to talk to you!
62
Market Entry - QUICK SERVING RESTAURANT
Interviewer Thanks Karan. You did a great job and fairly covered everything, its already
20 mins why didn’t I hear the knock!!
Karan I was extended an offer after the first round, the case although was
comprehensive and involved a lot of things but it is very important to buy- Approach
in from interviewer at every stage because it helps removing unnecessary
information. Market Entry

Place
Product Price Promotion
(Kormangala)

North Indian or Value Based Cost Based Competitor


Advertising
South Indian pricing Pricing based pricing

Fast Food(rolls) Personal Selling

Fixed Costs Variable Costs


Sales Promotion

Utensils and
Rent
tools

Labour Salary Raw Materials


63
Cost Optimization - LAUNCH OF CUSTOMER ENGAGEMENT PORTAL FOR FMCG
Candidate : Anwesha Behera Company : Bain & Company Anwesha I’d like to look at the first metric you mentioned – technical competencies.
Sector : IT/ITeS Type of Case : Cost Optimization Do we have any information about how options A and B compare to each
other in terms of their technical prowess?
Problem Statement: Your client is an FMCG company. They want to bring up a
Interviewer Both teams are equal in terms of technological capabilities.
customer engagement portal that serves as an informational platform for all their
brands. You have 2 options: Anwesha In that case I will keep that aside as it seems that it might not be a
1. A 1000-strong ITeS team of a local company that is based out of Bangalore determining factor. I’ll move on the next metric – costs. Is the second team
2. A 1000-strong captive unit as a part of a UK-based company. also based out of Bangalore?
Interviewer Yes, in fact both teams have local employees and technical experts.
The Interview Anwesha Alright. I’d like to analyze the value chain to better determine components
Interviewer Good Morning Anwesha, how are you doing today? along which these two teams may differ. (I draw the standard value chain
briefly, without expanding all). I would want to highlight on just the
Anwesha Good Morning Sir, I am doing good. marketing and sales section as we’re dealing with customers who would
Interviewer Very well, Let’s see what is there on your resume. either want more information about the products they’ve bought, are
planning to buy or want to engage with the brand. Our customer
Anwesha Sure Sir. engagement portal would fit in right here, if I’m not wrong.
Interviewer Okay Anwesha, let’s now move to the case. ~ Explains the problem Interviewer Yes, that’s right
Anwesha Is the portal meant to be a web application or mobile application?
Anwesha Without further ado, I’ll dive into what cost components might exist for
Interviewer Consider it to be a web portal the portal. I’ll take the salaries of our employees, the IP rights that ~might~
be a concern if we’re planning to own the portal’s source code, data
Anwesha So, our decision involves choosing between two alternatives to help bring
repositories (if we want to store any customer data, cookies etc.) as well as
this engagement portal to our customers. May I know as to what key
maintenance of the database and portal itself.
metrics are, we looking out for, as a company, when choosing between
these two alternatives? Interviewer You can take the IP rights not to be a concern as web services like these
aren’t usually bought over these days, they aren’t that unique and have
Interviewer We want to ensure that the team we choose is technically competent to
been commercialized. You can also ignore maintenance costs for now.
execute this project. Also, we want to involve minimum cost while carrying
Some additional information is that the captive unit will function as our
out the same.
own team full-time

64
Cost Optimization - LAUNCH OF CUSTOMER ENGAGEMENT PORTAL FOR FMCG
Candidate : Anwesha Behera Company : Bain & Company Anwesha You mentioned the team’s capabilities to be the same. However, the
Sector : IT/ITeS Type of Case : Cost Optimization composition of the 1000-member team might be different. There might be
more senior managers in one of the teams, wherein the other team might
Problem Statement: Your client is an FMCG company. They want to bring up a have more entry level employees. At different levels we would have to pay
customer engagement portal that serves as an informational platform for all their our employees differently.
brands. You have 2 options: Interviewer Yes that’s right. This greatly determines how much the portal project may
1. A 1000-strong ITeS team of a local company that is based out of Bangalore cost us.
2. A 1000-strong captive unit as a part of a UK-based company. Can you figure out which level employees have a greater impact if they
were to leave?
The Interview Anwesha Yes, senior managers leaving would greatly hurt our business as they have
more technological and managerial capabilities accumulated over the
Anwesha I see. I’ll dive right into the salaries of our employees. I’ll list out various years. It would be costly to replace them
components that must be considered for the same – monthly wages,
healthcare insurance, other perks etc. Any of these you’d like me to focus Interviewer What costs might be involved with attrition of entry level employees?
at? Anwesha Retraining costs, mostly. We would be offering the same salary package to
Interviewer You can assume that salaries are comparable our new hires most likely
Anwesha Are their insurance coverages different?
Interviewer You can ignore all perks
Anwesha In that case, if I were to look at the employees, in order to execute their
goals well, they must have the ability and the willingness to work towards
achieving the goals. My hunch is that since you mentioned that the team’s
abilities are comparable, would they be having different motivations
towards the tasks (probably because the first outsourced team has other
projects to complete hence might not give their best)?
Interviewer This is a valid point; however it does not relate to our costs directly, that
you initially identified as one of our objectives.

65
Cost Optimization - LAUNCH OF CUSTOMER ENGAGEMENT PORTAL FOR FMCG

Approach Engagement
Portal

Mobile
Web Portal
Application

Key Metrics for Technically Portal will fit in


Understand the
Analysis Competent Minimum Costs Marketing and
value change
Team Sales

Whether Teams Whether Teams Salaries of IP Rights and Maintenance


are equally are not equally Employees costs for owning cost of the
competent competent the source code database

Perks associated
This Metrics will We should with each option
not impact the choose the
decision we option which
should move to has more Analyse the Assess the composition Top management
other metrics competence competence on of the employees employees to have
basis of ability to amongst both team. more impact on overall
perform tasks Top management or costs.
and achieve entry level Entry level employees
goals to have training costs.
66
Declining Revenues – IT INDUSTRY
Candidate : Ankit Saxena Company : Bain & Company Ankit Very well, it is clear that the external environment has not impacted
Sector : IT Type of Case : Declining Revenues revenues adversely. Since Revenues = Price X Quantity , I would like to
understand whether the price of the offerings have been reduced or
whether the quantity sold has declined.
Problem Statement: An IT company in India is experiencing a problem of declining
revenues. Why were the revenues declining? Interviewer The quantity sold has declined.
Ankit Is this primarily because new competitors have come into the market?
The Interview Interviewer No.

Interviewer Good Morning Ankit, let’s get started with the case unless you have any Ankit Is there an issue with the acquiring new customers or retaining old ones?
preliminary questions for us? Interviewer Yes. Dive deeper into this issue.
Ankit Good Morning Sir. Sure, we can start with the case. Ankit What are the different sales channels?
Interviewer Well. Your client is an IT company facing declining revenues. Why were the Interviewer There are sales channel agents who pitch the company to new clients.
revenues declining and how would you solve the issue?
Ankit Are they well-trained and qualified?
Ankit I would like to ask some preliminary questions:
1. What was the duration of the revenue decline? Interviewer Actually, there was some churn in the sales team due to which the
2. What were the regions/markets in which the company was facing the company had to hire new salesmen who weren’t experienced enough to
decline? retain existing clients or acquire new ones. There attrition rate of
3. Are competitors facing the same issue? salesmen was also high in the firm. What recommendations would you
4. Are there external factors such as a slowdown in the economy/ give a firm facing such an issue?
recession affecting the company? Ankit 1. Issue long-term contracts with employees.
Interviewer The revenues have been declining for a year across India. Competitors are 2. Provide training to new salesmen.
not facing the same issue and there isn’t a slowdown in the economy. 3. Give higher commissions for each sale and provide incentives to sales
men to maintain effective long-term effective relationships with their
Ankit’s Asks questions about all aspects of the PESTEL framework to check customers.
Progress whether the external environment has affected the company’s revenues
adversely.

67
Declining Revenues – IT INDUSTRY

Approach
Declining Revenues

Internal Reasons External Reasons


for Declining for Declining
Revenues Revenues

Not to be
Quantity MECE Price
considered

Sales
Channels Competitor
PESTEL Analysis Market Analysis
Analysis

Sales
No significant change
channel Final Answer
Agents

68
Unconventional - INCREASE ATTACH RATES OF SWITCH/ROUTER FOR CISCO
Candidate : Vishwajith G Bhat Company : Bain & Co. Vishwajith I have a few preliminary questions that will help me with the case. What is
Sector : Technology/Product Type of Case : Unconventional the product portfolio of the switches/router business? What exactly do we
mean by attach rate? Also, are there any other objectives in this case?
Problem Statement: You are working with CISCO to help increase their
Interviewer For the simplicity of the case, assume that there is only one product – the
attach rates of their switch/router in India router. Attach rate is the percentage of clients opting for warranties of
their CISCO product to the total CISCO product sold. Lastly, no. There are
no additional objectives to this
Vishwajith Ok. I have a reasonable idea of the product. Next, I wanted to understand
The Interview a bit more about the value chain. From my understanding, the value chain
comprises of the procurement (inbound logistics), manufacturing of
Interviewer Hello Vishwajith, kindly take a seat. How are you doing today? routers, distribution of routers (supply chain), finance and marketing as the
Vishwajith Good Morning. I am doing fine. A little nervous on account of Day Z. main arms. Have I missed anything?

Interviewer Good, then let us get directly into the case. It is a slightly lengthy case, so Interviewer No. The value chain seems fine. Anything in specific that you would like to
make a good note of the case facts. Your client is CISCO, an American dwell into?
multinational technology conglomerate headquartered in San Jose, Vishwajith Great. Can you kindly explain as to what is the existing supply chain for the
California, in the center of Silicon Valley. It has entered into the router?
switch/router business in India about 6-7 years ago. Assume that the cost
of this switch/router is about $ 100. It currently offers warranties at Interviewer There are two main channels of distribution – distributors and system
multiple levels: a) First warranty is priced is at an 8% premium over the integrators. The distributors provide the router as an independent product
product and as a part of this warranty, CISCO offers call/remote support to and sell it to small/medium businesses. Some examples include Simple,
its clients and in-case the router issue is not fixed over call, the customer Ingeram, Reddington, etc. System integrators are large firms that provide
then couriers the faulty product to CISCO and it repairs it and re-sends it to the end-to-end solution such as WIPRO, TELCO’s, etc.
the customer b) Second warranty is priced upto 35% of premium over the Vishwajith Thanks. I would like to compare the two channels across the two markets
product. CISCO assures its customers that the technical team will be on- – India vs globally. What is the percentage split for the distribution
site within 1 hour to respond to the situation. CISCO has observed a very channels? What exactly is the difference between the two distribution
unique situation in India. While globally, the attach rate is about 97% in channels with respect to warranty renewals? Also, what is the net
Year 1, 80% in Year 2 and about 70% in Year 3, in India, the attach rate is realization for these distribution channels?
only 40% in Year 1, 20% in Year 2 and less than 10% in Year 3. You have
been tasked with helping the client increase their attach rate. How will you
go about it? 69
Unconventional - INCREASE ATTACH RATES OF SWITCH/ROUTER FOR CISCO
Candidate : Vishwajith G Bhat Company : Bain & Co. are generally system integrators – small and medium purchase from the
Sector : Technology/Product Type of Case : Unconventional distributors and the large ones directly.
Vishwajith Ok. So, CISCO has monopoly in this space and its end customers are the
Problem Statement: You are working with CISCO to help increase their system integrators. The primary requirement for the attach service comes
attach rates of their switch/router in India from the failure of devices. I would like to understand the usual failure
rates of these routers, both in India and globally.
Interviewer Good. The failure rate in India is seen to be higher than globally, primarily
driven by high voltage fluctuations. You can assume that the total failure
rate is about 0.23% on average in the first 5 years of usage.
Interviewer Good follow up questions. In India, the split between distributors and Vishwajith So, from what I understand, the failure rate is less than 0.25%. Even if I
integrators is 40:60 and globally, this is about 70:30. With respect to assume a safety factor of 4x, it will be about 1% of the cost. Thus, for every
renewals, the attach rates in India for the distributors is 50%, for the 100 such routers, 1 extra spare will suffice. Thus, due to the low failure
integrators is 33%. Globally, this is 97% respectively for both the rates, the value of spare and hence warranty is less than 1$ per unit. This is
distributors and the integrators. Further, the net realization rate is about much lower than the basic warranty being provided – 8$ per unit. This
9% in India, while it is about 16% globally. could be one of the potential reasons as to why we are seeing lower attach
Vishwajith Ok. So, from the case facts, I can understand that there are two primary rates in India vs globally.
issues in India – the attach rate is low (about 40% vs 97%) and the net Interviewer Hmm, correct. So, what can we do?
realization is also on the lower side.
Vishwajith I would like to examine the distribution channels – the margins involved
[Progress] I was able to get majority of the case facts early in the case. The case then and if we can push it via the distribution channels.
meandered for a bit in the middle as I tried to structure the data available.
Interviewer Both the distributors and integrators are getting double digit margins on
Vishwajith I would like to understand the competitive landscape in India and globally the unit. The margins are consistent across.
and understand the points of difference if any. Also, I would like to look at
the differences if any between the Indian applications/utility for these Vishwajith Also, another factor could be the variation between the warranty attach
routers v/s those globally. Also, I would like to understand a bit more about rates in the channels across the two geographies, which is seen in the net
the consumer preferences in these two countries. realization of 9% v/s 16% globally. From this, I can conclude that in the
Indian context, the preference is towards the lower warranty – 8%. I would
Interviewer Okay. For the sake of simplicity, you can assume that the router provided like to focus on first increasing the attach rate and then focus on the net
by CISCO is unique in the world and that the company has a near realization. Is this approach fine?
monopoly in this respect. As for the second question, the end customers
70
Unconventional - INCREASE ATTACH RATES OF SWITCH/ROUTER FOR CISCO
Candidate : Vishwajith G Bhat Company : Bain & Co. to change this?
Sector : Technology/Product Type of Case : Unconventional
Interviewer Yes. In interest of time, I can tell you what was implemented. The pricing
was set at 5% for the base warranty from year 1 onwards. As seen in the
Problem Statement: You are working with CISCO to help increase their case, the attach rate is about 40% in India. If the net realization is taken at
attach rates of their switch/router in India 9%, this is about 3.6$ for 100$ unit. If we are charging 5% (assuming 100%
net realization), we are gaining 1.4$ per 100$ unit.
[Progress] The interviewer asked me to think about the final strategy deployed in
terms of long-term solution and left the room (about 25 mins into the
interview)
Interviewer Sure. Go ahead
Vishwajith I have broken down the long term solution into three parts (roughly 3⁄4
[Progress] I had further identified the problem – price of maintaining spares v/s basic P’s):
warranty. I asked for some time at this juncture to come up with the 1) Contracts: Look to extend additional value add ons to the second
suitable recommendations. warranty and look to push these services.
Vishwajith I would like to go through the short term recommendations. I have four A) Further, look to getting into providing multi-year contracts with a
pointers: mix of warranty 1 and warranty 2.
1) Distribution: Focus on shifting the ratio of distributors to integrators. B) Focus on distributors as their dependence/bargaining power is
Reason: Globally, the split is higher for the distributors and their attach lower.
rate seems to be higher in India 2) Services: Develop an additional services arm, dedicated to providing
2) Contracts: Include warranty as a part of the contracts. Reason: additional service options and look to provide this as a add on package,
Monopoly in industry and this will boost the attach rates over and above the existing warranty options
3) Cost: Re-look at the cost of the product itself and the cost of warranty. 3) Integration: Look to building a module/unit around the core product –
Also, look for bundling of services (if any) to improve the value of the routers and offer this as a package to the customers
proposal Interviewer Well, these recommendations were thought of by the team, however, the
4) Channels: Explore additional channels to reach out to the direct final approach proposed was different from these recommendations. I
customers directly. Maybe establish additional channels if necessary. think we can wrap up this case.
Interviewer Ok. Basis what we have seen, most of these cannot be implemented. In Vishwajith Thanks.
order to increase the attach rates, we did focus on contracts. Can you
come up with a pricing for this? Conclusion I asked the interviewer for the final solution. During the course of our final
discussion, he revealed that CISCO would look to integration of software
Vishwajith (Confused) The warranty seems to be fixed at 8% currently. Are we looking 71
Unconventional - INCREASE ATTACH RATES OF SWITCH/ROUTER FOR CISCO
Candidate : Vishwajith G Bhat Company : Bain & Co.
Sector : Technology/Product Type of Case : Unconventional Approach
Problem Statement: You are working with CISCO to help increase their
attach rates of their switch/router in India CISCO

Net
Distributors Integrators
realization
with the product and integration of their global services. Also, since
majority of the integrators were themselves into SaaS (software as a India US India US India: 9%
service), some portion of the pie could be outsourced to them, thereby
getting them onboard for the second warranty.
Contribution: Contribution: Contribution: Contribution:
US: 16%
40% 70% 60% 30%

Attach rate: Attach rate: Attach rate: Attach rate:


50% 97% 33% 97%

72
Market Entry – TMT
Candidate : Sagarika Chatterjee Company : Bain & Co. Interviewer Sure. Let’s say money is not a problem. What are the first things he will
Sector : TMT Type of Case : Market Entry need to decide for opening the station? Tell me the key elements
Sagarika He will have to set up a space to run the radio station. Buy/lease the radio
Problem Statement: Our client is a fresh MBA graduate from a US university. He frequency and decide the show line-up. He will need a radio jockey. He will
intends to return to India and open a Radio Station. He has reached out to us to need to identify his target audience and decide the nature and time of the
understand what factors to evaluate while taking this decision. shows.
Interviewer What will be key to success in this case?
Interviewer Our client is a fresh MBA graduate from a US university. He intends to Sagarika Show customization, timing and the effectiveness of the radio jockey.
return to India and open a Radio Station. He has reached out to us to
understand what factors to evaluate while taking this decision. Interviewer Yes, the radio-jockey is key here because they kind of drive the show and
content. What do you think are the revenue sources here?
Sagarika So, to clarify, our client is moving back to India and plans to open a Radio
Station. He wants to know what factors he must evaluate for taking this Sagarika Advertising, movie promotions, music launches will be the major sources
decision. of revenue. The rates may depend on the number of listeners, type of
show, time of the day, frequency, etc
Interviewer Yes
Interviewer Okay. Why don’t you tell me how he should identify his target customers
Sagarika Okay. Does our client have any work experience prior he took up him and what shows can he start with?
MBA? He could leverage from the experience or the network
Sagarika I will start with looking at the major customer types. There will be school
Interviewer None. Assume he has no contacts in India and no relevant experience. going children, college students, office-travelers, old people and stay-home
Sagarika Thanks. Are there any specific business objectives I should be aware of? people. In all these categories, I will evaluate the amount of time spent by
each on radio and the type of shows preferred. We can then pick the top
Interviewer He is looking to establish a sizeable market share for now and of course segment(s) depending on the segment size. A survey could be then floated
not at a financial loss to gauge their interest in certain show types.
Sagarika We will first need to evaluate the market attractiveness and then look at Interviewer Would you float a survey to everyone then?
our own capabilities. We will identify the possible market and identify the
target market bases on the profile, demand pattern and current market Sagarika No. That will not be effective and be unnecessarily expensive. If we look at
analysis. Then we need to decide the product mix and pricing strategy. consumer behavior, radio is not one of the most preferred modes of
Possible investment channels have to be identified and given the person entertainment. Children prefer playing or watching TV, college students
has no experience, understanding the value chain is key. prefer to socialize and old & stay-home people are more hooked to TV.
73
Market Entry – TMT

Sagarika Only the people who travel to work and are left with not many options of
entertainment listen to radio maybe in their car-pools or cell phones. So, Approach
targeting the age group of 24- 50 years in Tier1 and Tier2 cities could be a Market Entry
good starting point.
Interviewer And what shows?
Sagarika First, I would look at the other popular radio channels and identify the Capabilities Attractiveness
most popular shows – look at the genre, timings, duration, etc. Then, I
would float a survey to my target audience to gauge the level of interest in
each of these identified show times. We would also need to discuss this
with the RJ & make sure its in her comfort zone. Funding Volume Price

Interviewer What kind of shows would appeal to this target audience? What do you
think?
Relevant Product Mix
Sagarika From personal experience, I feel, current Bollywood music with a good RJ, Experience Market
news, sports commentary and stand-up would be interesting to this age Share
group.
Interviewer What other factors are important when planning the channel content? Growth Rate Show Types
Value Chain
Sagarika Planning the show-timings right is very important. News should be in the
morning, songs or stand-up comedy could be at night when people are
returning from work. Also, a good RJ is important. Regulating the
frequency and lengths of advertisements is also crucial for customer Market Size Timings
retention because switching cost to another channel is negligible here to
the customer.
Interviewer Thanks, Sagarika. I think we can wrap up the case now.

74
Boston Consulting Group (BCG)

75
Patent Expiry & Revenue Enhancement (Unconventional) – PHARMA COMPANY
Candidate : Newton Bishoyi Company : BCG (Dubai) Newton The way I see it, there are two options with the company. First is they can
Sector : Pharma Type of Case : Unconventional renew their patent and second is they can come up with a new molecule.
Note The framework used was Ansoff Matrix but was communicated in
Problem Statement: One of the most important patents of a pharma company is about business sense
to expire. What should the company do? Interviewer Okay. How will you weight the options and choose one?
Newton I will do analysis to identify advantages and disadvantages of these two
The Interview options. Basically it will include the impact on the company’s working
Interviewer Hi Newton. Lets start this interview with a case study. Since you have capital over the next 5 years, net present value of future cash flows and
some experience in the pharma industry, patent of a blockbuster drug of a initial investment required from the financial standpoint.
pharmaceutical company is about to expire next year. What should the Interviewer [Interrupted] Can you quickly list down what major changes in the
company do in such a scenario?
working capital in these two cases?
Newton Can I know a bit more about this company, its product portfolio, and Newton [Answered]
dependency of revenues from this patent, competitors in this drug,
therapeutic area, positioning of this drug? Interviewer What about other factors that you should consider lets say if are
considering the new molecule option?
Interviewer [Replied]
Newton Can I take a moment to collate my thoughts?
Newton What about the region of operation of this company?
Interviewer Sure.
Interviewer How is the region of operation relevant for this problem?
Newton In case of new molecule development, other factors to look at will include
Newton The region of operation will determine under which regulations they will
R&D costs, FDA approvals, designing and establishing manufacturing
have to operate, like under FDA if this is USA based problem or IMA if it is processes. On the consumer side, sales and distribution will also need to
India based, and will determine the ease of implementation of solution. revamped which can be broken into two parts, sales force side and other
Along with that it will help me test the feasibility of solution from the
distribution channels. On the sale force end it will include training of sales
customer end as e.g. Indian customers are more price sensitive etc. force and maintaining business continuity with existing doctors &
Interviewer Assume we are discussing a US based context. hospitals and on the other distribution channels end, we will have to
ensure sufficient access coverage by insurance providers, a major success
Notes It was established in the discussion above that the patent of the drug is
factor for drugs in US.
the lifeline of the revenue stream for the company which is based out of
USA and company was heavily dependent on this patent. Interviewer Good. That is enough for the case. Moving further, what all activities
76
Patent Expiry & Revenue Enhancement – PHARMA COMPANY
Interviewer have you been a part of in your work or undergraduate colleges and what Approach
did you learn there?
Newton [Answered] Existing Products New Products
Interviewer Okay. That will be all from my side. Can you please wait outside for a

Existing Market
while and you will receive further communication there. Product
Market
Notes Towards the end of the interview, the interviewer was trying to judge the Development
Penetration
cultural fitment of the person. The core philosophy is to judge the person (New

Increasing Risk
(Renew Patent)
in front of you and understand what he wants to listen instead of blankly Molecule)
applying the case frameworks. Get comfortable with the interviewer in
the first five minutes, try and identify their requirements, keep the
Diversification

New Market
interview conversational in nature rather than structure oriented. Market
(Not a practical
Frameworks are for your reference and not interviewers, so keep them in Development
approach
the back of your mind and communicate the same in business terms. (Not part of
under current
case)
scenario)

Increasing Risk

77
Profitability Analysis – QSR CHAIN
Candidate : Omkar Shindekar Company : BCG Omkar Is this a chain-wide phenomenon or specific to some specific stores?
Sector : Quick Service Restaurants Type of Case : Profitability Analysis
Interviewer No. This is a chain wide phenomenon.
Omkar How I see it, profitability can be broken into two components, revenue
Problem Statement: There is a pizza chain similar to Dominos/ Pizza Hut and is facing
and cost, which part of the problem should I start with?
problems of profitability decline in recent past.
Interviewer The problem is in the revenue side of the equation.

The Interview Omkar Has there been a change in prices or menu that might have resulted in
this decline in profitability?
Interviewer Hi Omkar. How has it been so far?
Interviewer No. Pizza chain has not changed any of the other elements recently.
Omkar [Answered]
Omkar What is the approximate quantum of change in top line that has resulted
Interviewer Tell me a little bit about your strengths & weaknesses.
in the decline of profitability?
Omkar [Answered]
Interviewer The revenues for the chain have declined by approx. 3-4% YOY over the
Interviewer Tell me one thing that you have done is your life which you are proud of last 2-3 years
and one things that think you messed up Omkar Has there been a new entrant in the market which has resulted into
Omkar [Answered] market cannibalization?
Since this is a food chain example and has there been a recent shift in the
Notes The interviewer was not just breaking the ice in the interview but was also
consumer preferences?
trying to access the candidate based on the answers given
Notes After exploring a little more on the revenue front, the interviewer directed
Interviewer Good! Lets do a small case now. Your client is a pizza chain, operating with
the interview towards the cost side
a model similar to Dominos. They are facing difficulty with profitability.
How will you approach the problem? Omkar On the cost front, we can break up the total cost into two components,
fixed cost and variable costs
Omkar Before I begin to break down the problem, can I please ask some
clarification questions? Interviewer Good! Can you explore the different elements of costs that will be faced
by this pizza chain in these two buckets?
Interviewer Sure.
Omkar Sure. Variables costs in this case will primarily include food costs, royalty
Omkar Is this decline a profitability an industry wide phenomenon?
payments (if any) and labour costs.
Interviewer No.
78
Profitability Analysis – QSR CHAIN
Interviewer Great! What about fixed costs? Approach
Omkar Fixed costs in this business will be primarily higher and will include rent,
electricity, store equipment, delivery vehicles etc.
Interviewer What can you say about the profitability after this analysis? Profitability
Omkar As the revenues have decreased without changes in the prices, it means
that the number SKUs that were being sold earlier have also decreased
which means fixed costs per unit would have increased. The degree of
operating leverage seems to be relatively high in this industry and thus a
small decline in revenue will have a cascading effect on profitability.
Revenue (-) Costs

Interviewer Good. The analysis seems fine! Wait outside and we will get back to you • Revenue decreased
in some time. by 3-4% YOY in last

Notes The interview was a bit random. One never expects a case interview to
2-3 years
• Prices per SKU
• Market
Variable
Costs (+) Fixed Costs
start from HR type questions in consulting interview, so one should expect
for the unexpected. It is equally important to take clues that are given by Cannibalization • Food cost • Rent
• Consumer • Labor • Equipment cost
the interviewers, like the initially statement and the final analysis were
Preferences • Royalties • Electricity
very different which would have been difficult to reach had the • Delivery
interviewer not supported me. Also, practice for different industries and
non-regular cases as getting stuck in those as an off chance is a difficult
position to be in.

High fixed cost in relation to variable cost


=
High degree of Operating Leverage
=
High sensitivity of profitability on top line

79
Launch of customized bikes – AUTOMOBILE INDUSTRY
Candidate : Omkar Shindekar Company : BCG Omkar [After a minute or so] The assembly line as we know today were
Sector : Automobile Type of Case : Customized case developed in the initial time of industrial revolution which is primarily
based on standardization of tasks and thus when something like
customization is introduced in this mix, the current assembly line
Problem Statement: Bajaj automobile is planning to launch customized bikes in India. philosophy will have to be updated to solve the issues that will come up.
What production related challenges will the company face? As per my understanding of the assembly lines, I can classify the issues in
the current working into three categories:
The Interview
First bucket will be material availability. The current versions of assembly
Interviewer Let us discuss a short case first. Bajaj wants to launch customized bikes in
line work on a JIT philosophy of raw material with parts being stacked by
India. Since you have worked on assembly lines, what production related the vendor near to the assembly line. Now owing to customized bikes
challenges do you think Bajaj will face while launching this product?
being produced in the same assembly line, different SKUs will need to
Omkar Sounds like a very innovative concept. May I know what exactly does stacked which will increase inventory storage requirement near the
customized bike mean? assembly line which needs altogether a different storage philosophy as
compared to what is currently followed. Also, it will impact the inventory
Interviewer The customized bike market will work in the following way – when a handling costs.
customer will arrive at a Bajaj showroom, he/ she will have options to
select the colour, lights, fairing and other such cosmetic elements and the Interviewer Okay. What are other problems?
showroom will have to service the order.
Omkar Second category of the problem will be as to how the work is currently
Omkar Thank you for the clarification, Should focus on the entire supply chain or being done. The workers who are working at different stations on the
only the production assembly line? assembly line will need to be made aware as to what part will get fixed in
the next unit that is coming on the assembly line which will require the
Interviewer Focus on only production assembly line.
workstations to be refitted with some kind of SKU tracking stations. Also,
Omkar Even in the assembly line, there are various peripheral activities that go there will be significant training requirements for the workers to be able
around the core assembly line process, should I keep my focus strictly on to work on the new assembly line systems as the complexity of the work
the core assembly line processes? will significantly increase. Since the complexity of the work is increasing.,
another problem that it will result in is in the rotation of workers across
Interviewer Focus on only core processes.
stations, which is very important to maintain a decent level of employee
Omkar Can I take a minute to structure my answer? satisfaction.
Interviewer Sure. Interviewer Sound good.
80
Launch of customized bikes – AUTOMOBILE INDUSTRY
Omkar The third kind of problems will be the mechanism of transition from one Approach
workstation of assembly line to another. The bike needs to move across
different workstations of the assembly line before it is finally produced
between which is stored in in-situ workshop warehouses. Now since the
Production problems
current systems are designed to store only one kind of product, the
with customized bikes
handling of storage space will require to be updated for it handle different
kinds of products and then send it to the net station in the order that is
most favourable for the entire assembly line.
Interviewer Good! That will be enough for the case. Let’s continue with the interview Supply Chain
Production
forward. Management
Notes This is an example of a very specific and customized case question. The • Not the focus of
interviewee had a pervious experience of working on assembly lines and exercise
Assembly Peripheral
indeed setting up one. The case was more about contemplating the
problems and bottlenecks in case certain elements of a previously worked Line activities
situation changes rather than providing solutions. Proper structuring in • Not the focus of
such cases is of prime importance as first the interview knows that such a exercise
case does not fit into a particular kind of frameworks that we study during
case preparations and second the interviewer wants to check structuring
problems is ones main quality or he/she takes a brute force solution to
problems faced.
Material How the work is performed Transitioning
Availability on the assembly line? between stations
• Storage • Information flow • Storage and warehouse
• JIT • Training management
• Employee rotation • Tracking of units under
production

81
Unconventional/ Vague – E - COMMERCE
Candidate : Sahil Singhal Company : BCG
Sahil Sir, there are 3 major steps to be looked at:
Sector : E- Commerce Type of Case : Unconventional/Vague 1. Engagement : Browsing for that brand
2. Consideration Bucket : Added to cart for buying consideration
Problem Statement: An E-Commerce Platform has to evaluate a brand positioning on 3. Decision Bucket and Checkout
its website. What will be your recommendations on the evaluation? Interviewer Okay, what are the indicators you’ll look into each bucket?
Sahil The KPI’s will differ depending on the stage of decision making process
The Interview like:
1. In Engagement, the customer has begun search for the desired product
Interviewer Good Morning Sahil, let’s get started with the case directly? so metrics like no of searches for that brand, no of times selected or
removed from the filter bucket, no of clicks on the brand’s products, no of
Sahil Good Morning Sir. Yes, sure.
visits.
Interviewer Great. An E-Commerce Platform has to evaluate a brand positioning on its 2. For Consideration buckets, metrics like no of product reviews, star
website. What will be your recommendations on the evaluation? ratings, no. of times added to cart, no of similar products added along
with to see substitutability, added to Wishlist
Sahil’s Preliminary questions asked on:
3. Decision Bucket will include measure like click to conversion rate,
Progress 1. What is the product mix being sold on the e-comm website currently? ordered in 1 visit or multiple visit (decision making time), repeat
Ex: Electronics is heavy on brand specs, clothing will be browse heavy
purchases.
2. What kind/category of Brand has to be evaluated?
Ex: High-end or not, clothing, electronics, kitchenware, stationery etc. Interviewer Alright. As we discussed in the beginning, now that you have the KPIs,
3. Reason for evaluation? Increase in Sales/ Market Share/ Profit Margin? what will you do with them to give recommendation to boost sales?
Interviewer Take it to be an e-comm player like flipkart looking for a generic brand Sahil We can use the KPI’s to develop a Brand Score for various brands sold
evaluation, not constrained to a particular category of goods. The idea is to online. This Brand Score can be used for evaluation and comparison across
use these evaluations for recommendations to increase sales. What factors brands in same category. It can be used as a feedback loop to these
will you consider in the evaluation? brands so that they can be placed better on the website depending on the
customer segment.
Sahil I believe the best way for a generic brand evaluation will be to look at the
customer journey at the e-comm website to track key performance Interviewer How will you show this on a 2*2 matrix for Brand Score and Segments?
indicators.
Sahil So the Brand Score can be High or Low and Customer segment can be high
Interviewer Sounds right, what are the major steps in a customer journey during an and low engaged based on their recency, frequency, magnitude of
online purchase? purchase on the website.
82
Unconventional/ Vague – E - COMMERCE

Approach
Brand Evaluation on Recommendation on 2*2 Matrix
E-Comm Website

Enhance Drop

Low
(as developed)
Use of Customer Journey

Brand Score
for a generic brand

Protect Grow

High
Consideration Decision
Customer Journey >> Engagement
Bucket Bucket High Low

Customer Engagement
o No of clicks o No of Product Reviews o Clicks to Score
o No. of Visits on the o Star Ratings conversation rate
o No. of times added/ o Decision making Based on RFM (Recency,
brand
removed from cart. time, in how many Brand Score Frequency, Magnitude) of
Key Performance o No of Searches
o No. of times added to visits using all KPIs purchase
o No. of times
Indicators >> selected/removed Wishlist o Repeat Purchases
from the filters o Other brands added to check brand
along with to check loyalty
substitutability

83
Profitability - FMCG
Candidate : Ruchika Company : BCG
Interviewer Moving on, let’s assume that the price is as per industry standards and the
Sector : FMCG Type of Case : Increase Revenue
SKU balance is also okay. So what do you think could be the problem?
Ruchika Okay, I think the volume is the problem and we need to push it more.
Problem Statement: An FMCG is looking to enhance its distributer network, i.e., the
revenue per salesman. Tell us how can it do this? Interviewer Say, they are pushing it to the maximum extent. What now?
Ruchika Okay, so are we a marketing leader?
The Interview Interviewer We are not a market leader – nowhere close to that. It is actually a market
share problem for us.
Ruchika Good Morning sir!
Ruchika Okay, so what kind of products are we looking at?
Interviewer Good morning, please introduce yourself.
Interviewer Assume any FMCG product.
Interviewer Okay, so let’s begin with the case. So the case at hand is about an FMCG
company that is trying to enhance the revenue per salesman across its Ruchika Okay, given its an FMCG, I feel we will focus on unpenetrated markets
distributor network. You need to suggest the ways it can go about this. such as Tier 1/2 cities or the rural sector.
Ruchika Please tell me what kind of distributor network does the company have? Interviewer Focus on Tier 1 and 2 cities.
Interviewer The company has a distributor type such as HUL –broad distributors. Ruchika Now, FMCG products when looking to capture market share work as per
the concept of bundling. So, I will divide the SKU into packages that
Ruchika Okay, so how many distributors are we looking at? provide margins and attract consumers simultaneously. This will help me
Interviewer Say, 3000. Now you understand that with such a large number of gain market share and at the same time maintain profitability.
distributor network, there will be a lot of sales people after them. Right? Interviewer Okay, so this is something that even we did at the firm. I would now like to
Ruchika Yes, so I need to focus on profitability. Should I focus on cost or revenue? close the case. Thank you.
Interviewer Please look at increasing revenue. In fact, give me the function of revenue.
Ruchika Okay. Revenue =Summation of (no. of SKUs*units you have*price of SKU)
Interviewer Don’t you think you’re missing something? You haven’t considered the
market share that they hold in the industry!

84
Profitability - FMCG

Approach
FMCG

Existing Market
Market Moderate Market
Leader Player Product
Penetration
Development
(Bundling to
(Not part of

Increasing Risk
increase
this case)
Broad distributor Centralized market share)
network Distributor Network

New Market
Market
Diversification
Development
(Not part of
Tier 1 or 2 cities Rural Areas (Not part of
this case)
case)

Increasing Risk
Revenue Cost

Revenue = å(number of SKUs*units you have*price of SKU)*market share

85
L.E.K

86
Market Entry/Guesstimate– E-CIGARETTES
Candidate : Sahil Singhal Company : L.E.K. Interviewer Very good, why don’t you walk me through how you will estimate demand
Sector : E-Cigarettes Type of Case : Market Entry/Guesstimate for E-cigarettes?
Sahil Sure Sir. Demand for E-Cig = # Consumers X # E-Cig used in lifetime on avg.
Problem Statement: A PE Firm is looking to invest in an E-Cigarette company. How will I start with estimating the no. of consumers. I will begin with India’s
you evaluate? population of 1.3 Bn, divide them into Urban and Rural categories since E-
cigarettes will only cater to Urban Population due to its higher cost,
affordability and attractiveness. I will take a 40-60 urban-rural split ratio.
The Interview
Interviewer Alright, what further factors will be taken into consideration ?
Interviewer Hi Sahil, why don’t you tell us something interesting about yourself?
Sahil Within Urban population, I will take a 50-50 split for Men and Women. For
Sahil Hello Sir. “Well prepared answer, followed by 2-3 minute discussion on the further factors, the proportions will differ for Men and Women which I’ll
same” walk you through step by step.
Interviewer That’s interesting. Let’s get going with the case interview then. There is a Firstly, the subsequent factors will include:
PE Firm is looking to invest in an E-Cigarette company. How will you 1. % population in the workforce since consumption of E-cig will be
evaluate? majorly concentrated here and very small % in college goers and retired
people which we can take as a small increment later
Sahil’s Asked preliminary questions on: 2. % Smokers out of Working population
Progress 1. What does the client portfolio look like (existing investments) 2. % of workforce in white collar jobs v/s blue collar jobs because given
2. Has it invested previously in the Indian Market. Why India? the high price of e-cig, it will be consumed by white collar workers.
3. Why E cigarettes specifically or what are they expecting out of this new 3. % of White Collar job holders who are likely to opt for E-cig based on
investment? affordability (income distribution).
Interviewer It has invested previously in India in other products. Let this not bother Sahil’s Draws a table with proportion for each factor mentioned above and
you. I want you to focus on evaluating investment in e-cigarettes only. They Progress comes at a final number for estimated consumers. (See Approach behind)
want to tap on this upcoming business opportunity and have an initial
advantage. Interviewer Very Well, I get your consumer estimation for E-cig. Let’s go back to the
Qualitative factors you mentioned about market assessment. Walk me
Sahil Okay. If I have to evaluate the market entry of this PE Firm into E-Cigarettes through them briefly.
in India, I will follow a two-pronged approach : Qualitative which includes
risks and feasibility in this market and Quantitative which is mainly Sahil Sure sir, These would broadly involving:
demand assessment, market share that can be captured and return on 1. Assessing concentrated/fragmented market in terms of competition
investment. 2. How is the overall market and economy doing in terms of consumption
87
Market Entry/Guesstimate– E-CIGARETTES

Sahil 3. Is there a threat of new player entering? Starting Pop:


4. Are the distributors highly under control of existing players 1.3Bn
making it difficult to enter?
5. Do the consumers perceive any existing brand to be superior
than others? Rural Urban
Progress Basically covered all 5 porter’s forces implicitly. 60% 40%
Interviewer Very well Sahil, that was an in-depth assessment. We’ll see you
in the next round.
Male Female
Sahil Thank you, Sir. 50% 50%
X X

% Working Pop 50% 30%


Approach
X X X
Demand for
% Smokers 30% 10%
E-cigarettes
X X X

% White Collar 30% 20%


No. of X No. of E-cigarettes
X X X
Consumers used over time
% affordability
20% 10%
and awareness
To be calculated
for the case
No. of Consumers = (1.3*0.4*0.5*0.5*0.3*0.3*0.2)+(1.3*0.4*0.5*0.3*0.1*0.2*0.1)

No. of Consumers (Final) = 2.5 Million


88
Unconventional – EDUCATION-TECHNOLOGY
Candidate : Shilpa Rana Company : L.E.K. Shilpa Sure Sir. Looking at the customer side of Revenue model, we can define
Sector : Education Technology Type of Case : Unconventional revenue as No. of Customers * Avg Revenue per Customer.
For no. of customers, I would like to see the journey of customer on the
website.
Problem Statement: There are 2 educational technology companies with same The first step would include the App Interface, if it’s customer friendly, all
business models but one of them is not performing as well. Why could this be? categories/subjects/grades are clearly listed or not.
Next would be how many steps will a customer have to go through to
finally select the product. Comparison options available across packages.
The Interview Last, I would look at the payment methodology. Also, the click to
Interviewer Hi Shilpa, I want to start off with the case unless you have some questions? conversion ratio on the website.
Average revenue per customer will depend on no. of services available,
Shilpa Hello Sir. Sure, we can start with the case, I don’t have any questions. preference for tuitions/tests only/both (cut in the middle)
Interviewer There are 2 Education-Technology Companies with similar business Interviewer These seem fine, the application interface is also similar to the other
models, however one of them is not doing so well in the market. Why? competitor and average revenue per customer has also remained
Shilpa Okay Sir, if I understand correctly, there are 2 education tech companies constant. What else would you consider?
with same models but one of them is not keeping up with other’s Shilpa Since average revenue per customer has been similar, the reason for the
performance. (Gets a nod from the interviewer). company not performing well can be low conversion rates, that is people
In order to investigate where the performance issues are coming, I would coming and surfing but not buying or a drop in the visitors and thereby
first like to look at its Revenue Model. customers of their services.
Interviewer Sure, go ahead Shilpa. Interviewer Very well, How will you identify the reasons for this?
Shilpa So the revenue streams for an education-tech company will come from the Shilpa Sir, getting more customers to buy their product is a function of the
students (customers) availing various study packages, advertisements on marketing team responsible for advertisements, promotions and
the online media platform, recurrent revenue from seminars/services positioning, of the public relations team to identify problem areas,
being given to schools if any beside the app. interact with external environment and transfer this knowledge to
product development team, word-of-mouth from the existing customers
Interviewer Sounds about right but they don’t have any off-application services.
about their experience building the credibility of their services. Either of
Shilpa Alright, then that area can be excluded. I would first like to see if the these functions can be responsible for a low product attractiveness to the
revenue streams from advertisement is not doing well. customers.
Interviewer No, assume that to be constant YoY. Focus on your customers. Interviewer Right, the other competitor got a major celebrity to be their brand
ambassador which led to them overtake this one. 89
Unconventional – EDUCATION-TECHNOLOGY

Approach Poor
Performance

Step 1 Revenue

Step 2 Step 3
Rev from In App
seminars, Others Customers
Advertisements
talk
shows etc Not to be considered
No of Avg. Rev per
Customers Customer
Constant
Step 4 In-App Visibility/
Journey Awareness Step 5

App Comparison Payment Public Existing


Marketing
Interface Options Methods Relations Customers

- No of Clicks
Placement of before reaching - Click to -Advertisements - Query
packages: clarity Payment Stage conversion rate -Promotions: Redressal -Word of Mouth
and - Comparability - Variety of Seminars, Talks - Response/ - Testimonials
exhaustiveness across packages payment option -Positioning feedback time - Experience

Ans: Other firm had assigned a celebrity as Brand ambassador


90
Investment Valuation – EDUCATIONAL ASSET
Candidate : Shilpa Rana Company : L.E.K. Shilpa Yearly Revenue is the product of Capacity of the school * average revenue
Sector : Educational Asset Type of Case : Investment Valuation per student * utilization of capacity of the school.
Interviewer Right. Can you arrive at a number for how many students will be coming
Problem Statement: Your client is a PE firm looking for a 5 year investment in an to this school?
educational asset. How will this investment opportunity be evaluated.
Shilpa Sure Sir. I will proceed as follows:
1. Population of Mumbai- 18 MM
The Interview 2. Avg. size of household – 4, no of children per HH – 2; so no. of
Interviewer Hi Shilpa, how are you doing? students= (18/4)*2= 9MM
3. Assumption, 10% of the population is below age of 5 not eligible for
Shilpa Hello Sir. I am doing well, thanks. school, remaining = 8MM (Approximately)
Interviewer Good. So I’ll start the case. Your client is a PE firm looking for a 5 year 4. Since it is in a posh area, only affluent families will be able to afford it.
investment in an educational asset. How will this investment opportunity be Also, there will be other established schools where these students will be
evaluated? already going. Can I get some data on existing schools of the same level?
Shilpa’s • Understanding of Problem: Education Asset -> Chain of schools in 4 Interviewer There are 4 other schools competing against each other with 75% of the
Progress metropolitan cities. Classes Nursery-XII in all schools affluent families’ kids going there.
• Decision to invest has been made, exit in 5 years -> profit earning motive Shilpa Alright, then I will take the remaining 25% as the opportunity for the given
only.
school as an opportunity to tap on. Also, I will assume only 10% of the
• Expertise of PE firm is not of concern families can afford this high fees. Given it will be located in a particular
• Proceeds with a school is in Mumbai, Posh locality (extrapolated later) part of the city, it will be quite distant from other areas and thus only 25%
• Proceeds with Profitability assessment to evaluate the investment of the above eligible population will come here. (4 directions, each has
Interviewer Sounds right, how will you assess the profits? equal population distribution so 25%).
Thus the final number of students comes at 8*0.25*0.10*0.25= 5K
Shilpa Profit is the net of Revenue and Costs. Revenue will be the fees per student students for this school.
multiplied by the no. of students and costs will be mainly fixed and partly
variable. Fixed Cost will be cost of infrastructure (real estate), teaching & Interviewer Seems like the right number. The actual capacity of the school is actually
non-teaching staff, equipment like furniture, boards etc, cost of learning 4500 students. Next, if I tell you that the revenue from these students is
software etc. Variable cost will include utilities, extra-curricular activity cost less than the total cost incurred, would you go ahead with the
based on needs of additional students and staff as well. investment?

Interviewer Okay. On average the fees per student is Rs. X for a school at this level across Shilpa Since it is an investment for 5 years only, it won’t be in PE’s best interest
India. How will you reach annual revenue figures for this school? to invest in a school not in profit. 91
Investment Valuation – EDUCATIONAL ASSET

Interviewer Right, What kind of synergies can this school draw so that we
can enhance the revenue stream?
Shilpa There can be 2 aspects to the synergies:
1st will be teaching related and other non-teaching synergies.
With respect to teaching facilities, new experienced teachers
with testimonials can be hired from other schools, interactive
learning methods can be adopted, investment in field trips and
outside classroom learnings to attract more students in case
the school is not operating at full capacity.
For non teaching methods, extra space utilization can be done
to increase the number of facilities available like more courts,
horse riding arenas, skating rinks if not already present.

Approach Sounds great, we’ll see you soon.


Interviewer

92
Valuation Profits
Guesstimate for No of Students

Starting Population (Based on Mumbai) 18 MM

Revenue
(Fees) No of Households (4 member per HH) and kids per HH *(1/4)*2

% not eligible for school (<5 years) 10%


NEXT No of Avg Fees Per
FOCUS Students Student
% Affluent enough to afford this school 10%
Cost
% Due to location (1 out of north/east/south/west) 25%

Fixed Variable % Due to other 4 competitive schools with 75% market share 25%

Final Number of Students= 18MM*(1/4)*2*0.1*0.1*0.25*0.25


Real Estate Furniture Soft-wares
= 5K (approximately)

Utilities Extra Staff*


Curriculars

* Can be variable or fixed, depends on how you define and place them 93
K.P.M.G.

94
Market Sizing– ELECTRIC VEHICLES
Candidate : Debashish Company : K.P.M.G.
Sector : Electric Vehicles Type of Case : Market Sizing Guesstimate Approach Demand for
Electric Vehicles
in India
Problem Statement: Estimate the market size for electric vehicle in India.

Tier 1 cities 80-20 Tier 2 cities


The Interview
Rule
Interviewer Hi Debashish, why don’t you tell us something interesting about yourself?
Taking an example
Debashish Hello Sir. (Well prepared answer, followed by 2-3 minute discussion on the
same) Bangalore
Interviewer That’s interesting. Before we get going with the case, tell me what do you
know about electric vehicles? What are the challenges to their adoption in Assumptions-
the country? (Candidate answers) 1. Population = 2 crores
Okay, now, tell me how would you go about estimating the market size for 2. Family Size = 4
electric vehicle. 3. Top 30% of richest can afford cars
Debashish The candidate takes one Tier 1 city and one Tier 2 city and benchmarked
‘s Approach and estimated the number of cities that are there. Based on the Total Number of Vehicles in Bangalore
population, he estimated the total number of vehicles using the family size = 2,00,00,000 * 0.25 * 0.3
and all. And deduced the total number of Electric Vehicles in Bangalore. He = 15,00,000
started with Bangalore city, assuming Bangalore has a population of 2
Crore. Then, he narrowed it down assuming a family size of 4. Then he
provided for different segments of the population. Assuming that vehicle Assuming 4 on 1000
would be owned by the top segment (30%) itself. Even amongst those vehicles are electric vehicles
people, not everybody would want to buy an electric vehicle. Only those
who are concerned about environment would. So, he assumed that there
are 4 electric vehicles on every 1000 vehicles in the city to arrive at the 6,000 Electric Vehicles
final number.
95
McKinsey

96
Guesstimate - NUMBER OF PHARMACIES IN INDIA
Candidate : Udit Daga Company : McKinsey Udit Divide population of urban sector in family of 4. Number of people in a
Sector : IT/ITeS Type of Case : Guesstimate building in general. Number of building in the locality to estimate the total
number of people living that locality.
Problem Statement: How will you know that what is the number of pharmacies in India.
Interviewer Okay, go ahead.

The Interview Udit Now I will assess the total number of pharmacies in that locality.
Considering the number of the people in that locality and pharmacies we
Interviewer Good Morning Udit, how are you doing today? can generalize the total number of pharmacies in urban area. Factor of
0.75 for the residential area.
Udit Good Morning Sir, I am doing good.
Similar in for Rural.
Interviewer So, Udit Daga? We already have many Dagas in our company. Why I should Interviewer Are you considering the whole India as a residential area?
hire you.
Udit No Sir, to make an effective judgement we can take a normalization factor
Udit Generic reply mentioning what separates you of say 0.75 to accommodate the intensity change in residential and non-
residential areas.
Interviewer Okay Udit, let’s now move to the case. ~ Explains the problem
Interviewer What about the Rural area?
Udit Approach 1: Assumed that whole of India in divided in 2 part. Rural and
Udit We can replicate the same approach for Rural area as well.
Urban. The concentration of pharmacies in Rural and Urabn India is surely
different Interviewer All right Udit !! Can you think of some other approach. I can see that this
Interviewer Fair Enough !! Go Ahead. approach of yours involve a lot of assumptions.

Udit So now I will find out the KMs of roads in both Urban Areas and Rural Udit Sir, Can you give me some time.
areas. I would exclude the Highways distance since there is almost no
probability of having a pharmacy. Please tell if I am going in a right Interviewer Think on these lines – To run a pharmacy a person need to have license
direction? issued from government

Interviewer Seems alright till now, go ahead.


Udit Alright Sir. So I would assess the data from on people holding pharmacy
Udit Now I will remove 20% of that road length. (for bends/highways etc.), and I license. Now it is not certain that everyone having license would work in
will assume those are straight line. I will assess the number of buildings pharmacy.
along these road.
97
Guesstimate - NUMBER OF PHARMACIES IN INDIA
Candidate : Udit Daga Company : McKinsey Approach
Sector : IT/ITeS Type of Case : Guesstimate
Pharmacies in
India
Problem Statement: How will you know that what is the number of pharmacies in India.

The Interview Number of


Active license
Udit We can assume that around 7%-8% people will either work in non- holders for
pharmacy area or work in same pharmacy (more than one license holder Pharmacy
in single pharmacy) practice
Interviewer That is a fair assumption according to me.
Udit So now we can back-track to see that age of the license issued and assess
that licences issued more than 45+ years are obsolete now and people will
not be running pharmacy. We can assume it to be 4%-6%. Number of Multiple working People who are holding
Now we can easily determine the total number running pharmacies in people not simultaneously license but don’t
India. working in in the same practice anymore
pharmacy pharmacy because of age etc.
Interviewer Alright Thanks Udit
Udit Thank you Sir.

Remaining people
holding active license
are the ones who are
running pharmacy in
India

98
Launch of an innovative product – PHARMA COMPANY
Candidate : Jinit Dharia Company : McKinsey Jinit Revenue is Price of the product * Product Mix * No of Units sold. Is
Sector : Pharma Type of Case : Product Launch, Market Est. inhaler available in one type only?
Then Revenue is Price*No. of units sold. Should I start estimating the
number of units sold?
Problem Statement: Pharmaceutical company wanting to launch an innovative product This can be done by finding out the market size and market share. Market
size would be the number of diabetics present in India.
Interviewer (Cutting me) Aren’t you missing something?
The Interview
Jinit Yes. I would also have to consider the future diabetics. So, there would
Interviewer There is a pharma company, which wants to launch an innovative product. also be a component of market growth.
Should it? Say 130 crore is the Indian population. Diabetes is highly prevalent in the
Jinit Before I proceed with answering your question, can I ask some clarifying age group of 25+. Hence, that comes around 60% of Indian population.
questions? Out of this 60%, can I assume that at least 10% would be suffering from
diabetes?
Interviewer Yes. Growth rate would be around 10% and we can think of capturing the
Jinit Can I know as to where the operations of the company are in? And where entire market of insulin injections, gradually.
does it want to launch the product? Interviewer Fair enough! Can you guess the present cost of insulin injection?
Interviewer All over India Jinit Rs 100/ day. Can you tell me the estimated price at which we would like to
sell the inhaler and also the usage frequency of inhaler and insulin
Jinit What is the objective which the company wants to achieve? injection?
Interviewer Profitability, after breaking even. Interviewer We can sell inhaler at Rs. 100, Insulin injection is to be replaced, very
frequently (say everyday). But, inhaler can be used 3-4 times at least
Jinit And one last question, can I know what is the product all about?
Jinit That’s great. That means we can capture the entire market.
Interviewer A very good question. It is a drug which cures diabetes
Interviewer Can we now move upon the cost analysis?
Jinit How it is then innovative?
Jinit Yes, sure. Costs can be classified into two major categories – Fixed Costs
Interviewer Its an inhaler.
and Variable Costs. Can I know as to whether we would be making any
Jinit That’s awesome. Profitability = Revenue – Costs. Do you want me to capital expenditure specifically for producing this product, or we may able
analyze revenues first? (nod) to use the current land, machinery etc.?
99
Launch of an innovative product – PHARMA COMPANY
Interviewer We will be using the factory premises only, but will have to purchase new Notes [Then Jinit started working on the costs. NPV rule is simple – It is -> (Initial
machinery for that purpose. What will be the most important cost driver Investments – Present value of all discounted future cash flows). But could
in this connection? not complete calculations, as the interview was getting longer).
Jinit The probability of research going successful Interviewer We could conclude the interview.
Interviewer That’s very right. What do you think about that? Jinit Can I summarize?
Jinit I would like to know the estimated probabilities of the project going Interviewer Yes!
successful or not.
Jinit [Summary]
Interviewer What would you do these probabilities?
Jinit I would find the Net Present Value of the project, at a decided discount
rate. Then I will find expected NPV of the project by using the probabilities
of success and failure scenarios.
Interviewer That’s awesome. Please tell me what more data you need.
Jinit The probabilities as we talked for. Then the cost of research and
development. Also, the operating costs every year (i.e. Variable costs). I
would also like to know salvage value of plant and machinery, if any.
Notes (The interviewer gave me all the required data. Not included here, as it is
not at all needed)
Interviewer Aren’t you missing something out?
Jinit Just give me few moments to think. (After a long pause) Yes, the
marketing costs.
Interviewer Absolutely correct.
Jinit The marketing costs would be a sort of fixed in the short run.
Interviewer Here’s that cost amount. (Gives me the cost amount).

100
Launch of an innovative product – PHARMA COMPANY

Approach
New Product
Luanch

Revenue
Cost Side
Side

Price
(100) *
Product Mix
(1) * No. of Units Fixed Cost + Variable

Probability of Success
Population Target
of India * Population * Dosage

Net Present Value (NPV) of the Project

Decision: If NPV > 0 & IRR in investment range. Project is a Go, Otherwise No Go
101
Profitability - EXPRESSWAY PROJECT
Candidate : Shivali Pande Company : Mckinsey Shivali Right! So, the approach that I was thinking of is that we can delve into the
Sector : Infrastructure Type of Case : Profitability profitability of the expressway venture and see the sources of revenue and
costs involved which will correspond to the cash inflows and outflows.
Problem Statement: You are working with a private equity client who is exploring an However, this method would cover cash flows over the lifetime of the
investment opportunity in an infrastructure firm which has undertaken Mumbai- project, is that fine or are we looking at a specific timeframe?
Hyderabad expressway project. You have been called upon to examine the estimated Interviewer No that should be fine. Let’s drill down the revenue and cost heads.
cash flow statement of the project and enumerate the possible risks associated with
these cash flows. Shivali The major revenue sources associated with expressways according to me
are toll tax: both commercial vehicles and private vehicles as there will be
rate differential, interstate duties (though these might be simplified given
The Interview the GST regime), food mall or restaurant rents in case the sideroads
Interviewer Good Morning Shivali, since we have a limited time frame, let’s just start utilized by these places are on lease, advertisement revenue from
with the case. You are working with a private equity client who is exploring billboards on highways. Costs would include construction, road
an investment opportunity in an infrastructure company that works in the maintenance, running the toll collection systems, electricity expense on
area of roads, metros, sea ports etc. You are specifically looking at one lights and billboards and additional service expense (like telephone booths
project being undertaken by the infrastructure firm which is the Mumbai- or emergency ambulances). Am I missing out on any other major head?
Hyderabad expressway. You have been called upon to examine the Interviewer Well that pretty much covers all the heads. In fact, most of the cost comes
estimated cash flow statement of the project and enumerate the possible from construction which can be treated as a sunk cost in this case and the
risks associated with these cash flows. others are constant costs with very less variability. So let’s look at the
Shivali Alright, before I start thinking of a possible way to enumerate the risks, I’d revenue side, what do you think would be the biggest chunk?
like to clarify a few things if that’s fine? Shivali It’s a heavy traffic route between two major commercial cities and so the
Interviewer Sure! Go ahead. toll collections should be significant.
Shivali I wanted an idea as to the typical projects that the PE firm deals in and is
Interviewer Well absolutely! It is the biggest concern in this project. How will you
there any specific reason why they have chosen to go ahead with this
assess the potential risks associated with it?
infrastructure firm and this particular Mumbai Hyd expressway project
only? Shivali For that I would need to understand the current structure of toll
collections in terms of toll charged and distribution across commercial and
Interviewer Because I need to interview you to offer you an internship and we have got
private vehicles in terms of number of vehicles.
only 15 min so let’s just cover this one project for now.
102
Profitability - EXPRESSWAY PROJECT
Candidate : Shivali Pande Company : Mckinsey Interviewer Well, trade certainly seems to be the area of interest. Which industries do
Sector : Infrastructure Type of Case : Profitability you think account for greatest trade in general across land routes?
Shivali Typically, raw materials (steel etc), automobile industry and agriculture.
Problem Statement: You are working with a private equity client who is exploring an
Interviewer Well that pretty much covers all the heads. In fact, most of the cost comes
investment opportunity in an infrastructure firm which has undertaken Mumbai-
from construction which can be treated as a sunk cost in this case and the
Hyderabad expressway project. You have been called upon to examine the estimated others are constant costs with very less variability. So let’s look at the
cash flow statement of the project and enumerate the possible risks associated with revenue side, what do you think would be the biggest chunk?
these cash flows.
Shivali Typically, raw materials (steel etc), automobile industry and agriculture.

Interviewer Gave the following data: Interviewer Correct, so agriculture and automobile are the major contributors in this
Total number of vehicles on a daily basis = 100,000 case, each contributing 50% to the total commercial vehicle traffic. And
declining trade in both the industries is a cause of concern, what do you
Type Price Quantity think is driving the decline in trade?
Private Cars 100 40% Shivali Let’s look at agriculture first: it’s a heavily monsoon dependent industry
and therefore the most likely reason for the dip in trade would be a bad
Comercial 200 40%
season. However, this is a seasonal variation that must have been
Buses 150 20% accounted for in the estimation of cash flows.
Interviewer Yes, so let’s focus on just the automobile industry.
Shivali Alright! I’d like to calculate the respective revenue contributions of each
category to see who can create the maximum impact on overall earnings. Shivali So typical factors affecting trade vehicles are competition, demand for
Should that be fine? goods, alternate routes o modes of transport. Any specific head that I
should look at?
Interviewer Absolutely!
Interviewer Well Pune-Solapur belt is an automobile hub which has been supplying the
Shivali The major traffic of commercial vehicles on this route would likely be due
major chunk of automobiles to the South but recently Chennai has
to trade given that both the cities are major industrial or commercial emerged as a dynamically growing auto hub in the South.
centers in the West and South respectively. Hence, any change in volume
of trade can impact the traffic. Additionally, any alternate route availability Shivali So, it seems like it’s become easier for Hyderabad retailers and stock
or possibility of alternate modes of transport can impact traffic also. Do holders to source automobiles from Chennai than Pune belt and hence
any of these causes seem pertinent as of the current circumstances? traffic on Mum-Hyd expressway might be taking a hit. Do we have an idea
as to what extent can the demand be fulfilled by the Chennai hub?
103
Profitability - EXPRESSWAY PROJECT
Candidate : Shivali Pande Company : Mckinsey
Sector : Infrastructure Type of Case : Profitability Approach
Problem Statement: You are working with a private equity client who is exploring an Revenue
investment opportunity in an infrastructure firm which has undertaken Mumbai-
Hyderabad expressway project. You have been called upon to examine the estimated
cash flow statement of the project and enumerate the possible risks associated with Food mall &
Advertisement
these cash flows. Interstate duties Toll Tax restaurant
revenue
leases
Interviewer 50% of the current demand. Also assume that the entire demand currently
is being met by transporting vehicles via the expressway. Commercial
Shivali So, we expect a 50% fall in traffic and hence revenue. Vehicle

Interviewer Also, you talked about an alternate route. So, there is a new highway
coming up that can help cut down the time of this route travel by 25%.
That will reduce the remaining traffic by another 50%. So, can you Private vehicle
calculate the expected number of commercial vehicles.
Shivali Initially we had 40,000. Due to Chennai hub the traffic dropped to 20,000
and now, due to this alternate route it’ll now go down to 10,000. So, we
will have only 10000 commercial vehicles which will be charged a toll of
200. This drop should be the major risk to estimated cash flows then. Do Seasonal nature of
agricultural trade
you want me to calculate the new estimated revenue?
Reduction in trade
Interviewer Not really, I’m sure you can multiply 10000 and 200. So, you have pretty
Fall in traffic Chennai hub
much proceeded in a way that we did for this case when we were working competition
with this client. Do you have any questions for me?
Alternate routes
Shivali I wanted to know about the work that McK does in the field of retail and
brands, so we discussed that for a while and the interview ended.

104
Evaluating Market Entry – IT MAJOR
Candidate : Suneha Bagri Company : McKinsey & Company
Interviewer Looks good. Could you please try to elaborate the situation a bit more?
Sector : IT Type of Case : Market Entry
Suneha Under the industry, we can look into the competitive landscape, the
Problem Statement: KKR & Co. Inc. is planning to invest in an IT Firm. You are McKinsey market growth rate, and the degree of fragmentation. For risk and
returns, we can calculate the critical ratios, while for the company itself
& Company, and you have to identify 5 questions that you need to answer before
we can look for its financials and non-financials. The non-financials can be
proposing the recommendation to KKR & Co.
further broken down into the culture, philosophies, and founder.
Interviewer What would be sources of 3 sources of competitive advantage this IT BPO
The Interview
can have?
Interviewer Hi Suneha. Lets start this interview with a case study. Suneha It would be the technology, the people, and the expansion strategy.
Suneha Hello Sir. Yes, sure. Interviewer This takes me to the point where you mentioned that the IT firm’s founder
should also be considered before investing. So, what exactly would you
Interviewer KKR & Co. Inc. is planning to invest in an IT Firm. You are McKinsey & study about the founder?
Company, and you have to identify 5 questions that you need to answer
before proposing the recommendation to KKR & Co. Suneha What is important to know is the principles of the founder(s). For
example, the founder of D-Mart, Radhakishan Damani, is a man of strong
Suneha I would like to begin with a few clarifying questions on the IT firm. principles. He is a philanthropist. All of these traits are visible in the
Interviewer Yes, Go ahead. business of D-Mart, and the same commitment is visible in the way of
firm’s working. This in the end generates the confidence to invest in firms
Suneha Could you please give details about the size and domain of the IT firm? headed by such personalities.
Interviewer The firm is A 200 million company into digital analytics. It is growing at Interviewer Okay, I think we are done here.
40% for last 2 years.
Suneha Thanks you.
Suneha Is there any equivalent company of this scale and similar operations?
Interviewer You can assume it to be equivalent to Emphasis.
Suneha So, my 5 questions would be on understanding, the analytics industry, the
IT firm itself, the opportunity of return of investment, the threat of risk,
and in the end the exit strategy.

105
Evaluating Market Entry – IT MAJOR

Approach
5 Questions

IT Industry The IT Firm Returns Risks Exit Strategy

Net Present
Market Growth Financials Financials
Value (NPV)

ROE ROA
Fragmentation Pay back ratio Operations
/concentration
Non-Financials
Competitive
Strategic
Landscape

Other past
Culture Philosophy
records

Recommendation
• No need to force fit a framework. Sometimes its all required is to come up with an end to end solution.
106
Unconventional – E-COMMERCE
Candidate : Samridhi Khurana Company : McKinsey & Company
Samridhi I want to understand if we are interested in gauging the tangible impact,
Sector : E-Commerce Type of Case : Unconventional
or intangible impact, or both.

Problem Statement: Facebook is your client and it wants to measure its contribution to Interviewer Let’s consider the tangible impact. Let’s focus on how FB will measure the
SME growth in India. How will you articulate the economic value that Facebook has added? monetary impact that it creates for SME.
Interview Samridhi was slightly blank aftersheI heard the problem statement at the
The Interview Progress start, but she maintained her confidence and made it as interactive as
possible. I tried to apply a structure to my thoughts as much as I could.
Interview It started with resume discussion. The interviewer asked Samridhi Samridhi The monetary benefit added by FB can be broken down as:
Progress questions around her internship experience at IBM Research, job learnings Eyeballs per advertisement * %age clicks that landed the customer on
at Deutsche, why not MS, why Student Alumni Committee at IIMB and her SME website * Average revenue per customer.
contribution to it etc. The interviewer then proceeded with the case
round. Interviewer Alright. Now I want you to think how you will measure the business that
the SME did with FB’s help. And secondly, is there any other method apart
Interviewer Facebook is your client and it wants to measure its contribution to SME from this using which we can gauge FB’s contribution.
growth in India. How will you articulate the economic value that Facebook
has added? Samridhi So first I will focus on measuring how much business did FB help the SME
to achieve. And then, I will move on to the second part of the problem.
Samridhi As I understand, Facebook provides an advertisement platform to various For a customer who is using FB, there are a sequence of steps involved
SMEs across India. To gauge the economic impact, I would like to that will lead to the business for SME:
understand if there is any specific SME that we are interested in. Ad -> Click -> Makes purchase
Interviewer We are not restricted to any particular SME here. We want to devise a It is easy for FB to track clicks per ad, but it could be a challenge to gauge
general approach. You can think of any SME like Myntra that uses FB for how many customers made a purchase from the SME’s website and for
advertisement. You can take 2 minutes to think how we should proceed. how much.

Samridhi Alright. So we want to measure FB’s contribution to SME growth in India. Interview She started thinking using customer journey analysis and was able to
Broadly, FB helps SMEs in the following manner: Progress understand the challenge faced by FB.
- Monetary impact (increases revenue for the SMEs etc) Interviewer Yes. How do you think FB can measure that?
- Societal benefit (helps SMEs ceate awareness for a campaign or a cause)
- Operational Ease (SMEs are able to reach the targeted audience
effectively)
107
Unconventional – E-COMMERCE
Candidate : Samridhi Khurana Company : McKinsey & Company
Interviewer Perfect. Let’s move on to the second part of the problem to discuss if
Sector : E-Commerce Type of Case : Unconventional
there is any other way to measure FB’s contribution. I want you to apply
learnings from your economics class.
Problem Statement: Facebook is your client and it wants to measure its contribution to
Interview The interviewer had given a straight cue. We had micro economics in term
SME growth in India. How will you articulate the economic value that Facebook has added?
Progress 1 but this was an application of macroeconomics. I asked for a minute to
put my thoughts on the sheet.
The Interview
Samridhi Sir, FB’s contribution to the SME growth will also lead to the economic
Samridhi A couple of things that come to my mind: benefit for the nation at the macro level:
1. Ask SMEs to provide data so that we can map the customers who landed 1. Increase in the revenue will increase the overall GDP of the country
on their site via FB to their bill amount (both first-time & repetitive 2. The SME might attract foreign investments in India which will lead to
purchases) the further growth of the business
2. With SME’s revenue before advertising on FB as the benchmark, we can 3. The SME expansion will generate more employment and might also add
track how much has their revenue increased after they started advertising an impetus to the average wages
with FB 4. It will also enable other businesses to grow. For example, if Myntra
flourishes then other ancillary businesses like logistic also grow
Interviewer These might be difficult to implement as there are many SMEs and asking
for data from each is not feasible. The second one could be one way but Interview The interviewer told me that we are out of time and asked me if I had any
not very accurate. Progress questions for him. I asked him his experience at the firm and with this the
interview ended.
Samridhi I agree sir. With the increasing privacy regulations, data collection from
SMEs might not be feasible as they are bound to protect the customer’s
information. And since companies deploy multiple marketing strategies in
parallel, we cannot attribute the entire amount to FB.

As another method, I think we can have a survey on our platform and ask
customers who clicked on an ad as to how relevant the ad was for them.
We can also ask if they had shopped with the SME before, how frequently
do they buy from that website now and what is their average spend. With
the correct questions, we can get an estimate of their annual purchase
from the SME.
108
New Product – INSURANCE
Candidate : Samridhi Khurana Company : McKinsey & Company
Interviewer Mostly HNIs. You can consider HNIs in a metro city like Mumbai where
Sector : Insurance Type of Case : New Product
there is adequate demand.

Problem Statement: Your client is an insurance player that recently launched a new Samridhi What is the competitive landscape like? My understanding is that there
product. It did not do well in the market and the client wants you to diagnose. are 4 major public companies who offer non-life insurance policies, and
there are many private players who would provide a similar offering. So
the market has multiple players for home insurance. Is my understanding
The Interview correct.

Interviewer Let’s start directly with a case. Your client is an insurance player that Interviewer Yes.
recently launched a new product. It did not do well in the market and the Samridhi Okay, I have one last question before I proceed. When we say the product
client wants you to diagnose. has not done well, is it based on client’s own projections or are we
Samridhi Could I ask a couple of questions to understand the client and the product comparing with our competitors?
better before I proceed with the case? Interviewer It didn’t do well as per their own projections before launching the
Interviewer Sure. product.
Samridhi What kind of insurance is the client into? Is it life insurance company or Samridhi Okay. Thank you for all the details. I would like to take a minute to jot
general insurance company or both? down my thoughts, if that is okay with you.
Interviewer It is a leading life insurance player like LIC. Interview She divided the number of policies sold as a demand side or supply side
Progress issue. She further divided the demand side into internal and external
Samridhi Okay, so it is a public player that has a pan India presence in mostly life factors. The framework shown in the appraoch is a general framework
insurance product. And what about the new product? Is it also a life based on which she structured her points. The interviewer asked her to
insurance product? And when did they launch it? focus on internal issues.
Interviewer That’s a relevant question. It is a home insurance product that was Samridhi Okay, I would like to discuss the internal factors that can affect the
launched 6-7 months back. demand for our product.
Samridhi Thank you for that information. So the failed product is a general insurance - Product Awareness: The customers would know the client mostly for life
offering. Who are our customers for this product? Is this home insurance insurance products. Are they aware of this home insurance product?
product targeted towards economic segment or HNI?

109
New Product – INSURANCE
Candidate : Samridhi Khurana Company : McKinsey & Company
Samridhi For home insurance, the customers have to understand the financial
Sector : Insurance Type of Case : New Product
benefit in order to buy it. Therefore, the salesperson needs to be able to
articulate the monetary benefit effectively and be able to carry out
Problem Statement: Your client is an insurance player that recently launched a new comparative analysis well, demonstrating the advantages over the
product. It did not do well in the market and the client wants you to diagnose. competitor’s products. This requires employees who are good with
numbers and understand the nuances of the product
The Interview Interviewer Alright, that’s all.

Samridhi Product Attractiveness: Is the product offered by the client attractive for
customers? Does it charge competitive premium?
- Effective Salesforce: Is the client able to explain the product features and
sell the product to its customers?
- Customer Onboarding: How seamless is the process to onboard the
customers and to retain them?
Interviewer Let’s focus on salesforce.
Samridhi For salesforce, the following factors could affect the performance
- Do we have a dedicated Team for new offering? Have we trained them?
- Employees: i) Expertise level ii) Soft skills * ability to convince
- Realistic Selling Targets for the new policy
- Efficiency or Employee Utilization
Interviewer Great. We do not have a dedicated team for this new product. How do you
think employee expertise will affect the performance? What kind of
employees do we need for this product?
Samridhi Life insurance is an emotional investment for most of the families. And
therefore, the salesforce tries to get the emotional buy in of the
customers. It requires less convincing as most of the customers are more
than willing to buy the life insurance policy for the betterment of their
family.
110
New Product – INSURANCE

Approach
Less no. of
policies sold

Demand is Supply is
Product less inadequate
Awareness

Internal External
Attractive Issues Issues
Insurance Policy

Need gap Substitutes


Effective Analysis
Salesforce

Regulations
Customer
Onboarding
Compliance
Issues

Competition

111
NRI Consulting

112
Supply Chain Strategy – FOREIGN MANUFACTURING FIRM
Candidate : Tarunay Dayal Company : Nomura
Tarunay The company should go for hub and spoke model, which would define a
Sector : Manufacturing Type of Case : Supply Chain Strategy
base central base and multiple suppliers.

Problem Statement: A Japanese manufacturing is planning to enter Indian market. Interviewer How would you plan the execution?
How would you plan their distribution network? Tarunay First of all we would need to identify the region of dominant sales, based
on which we could define the centre of the distribution model.
Interviewer Okay, I think we are done.
The Interview
Tarunay Thank you,sir.
Interviewer Hi Tarunay, how was your day? Tell me something about yourself.
Tarunay (a prepared answer is provided)
Interviewer Tell me one thing that you have done is your life which you are proud of
and one things that think you messed up.
Tarunay (a prepared answer is provided)
Interviewer Let’s now discuss a case.
Interviewer A Japanese manufacturing is planning to enter Indian market. How would
you plan their distribution network?
Tarunay Before I begin to break down the problem, can I please ask some
clarification questions?
Interviewer Yes, Go ahead.
Tarunay What kind of entry is the company targeting – own, joint venture, or
organic?
Interviewer The company wants to go with organic approach. How would the supply
chain distribution be like?

113
Supply Chain Strategy – FOREIGN MANUFACTURING FIRM

Approach

Spoke #2 Spot #4

Spoke #1 Hub Spoke #5

Spoke #7 Spoke #6

114
Market Sizing – LUXURY WATCH MANUFACTURER
Candidate : Anand MP Company : Nomura Research Institute Interviewer Yes, you may assume all such channels are being considered. You may
Sector : Luxury Watch Manufacturer Type of Case : Market Sizing consider India as a whole.
Candidate Sure Sir. First, I would consider the adult population of India as 1 billion
Problem Statement: Your client is a luxury watch manufacturing company. It is looking and segment it on the basis of income. I would target the top 1% of the
to enter India, what is the market potential? population for my client. This comes to 10 million individuals. Assuming,
on an average, an individual purchases a luxury watch once every five
years. This means, typically, 2 million luxury watches could be potentially
The Interview sold every year. Do we know the average price of watches in the luxury
segment in India?
Interviewer Good Evening, How was your day? Tell me something about yourself?
Interviewer Okay, You may assume it to be Rs. 50,000.
Candidate Good Evening. It was good. A prepared answer is provided.
Candidate Thank you, this implies the potential market size can be estimated to be
Interviewer That’s good to hear. Let’s get started with the case. Your client is a luxury 2,000,000 x Rs. 50,000 = Rs 100 billion = Rs. 10,000 crores
watch manufacturing company. It is looking to enter India, what is the
market potential? Interviewer Good, do you think this is the current market size in India?

Candidate Interesting! Could you let me know whether it is for both men and women Candidate No, this is the potential to reach. If much less than 2 million luxury
and price range generally? watches are sold every year in India, there is a potential to tap into those
customers who have the ability to purchase such watches.
Interviewer Yes, it is for both men and women. Its close competitors in India would be
RADO, ROLEX etc. Interviewer How could you determine the current sales?

Candidate Okay, before I estimate its market, has the client decided on its distribution Candidate We may conduct interviews with multi-brand watch retailers to estimate
channels? sales and use data from various other distribution channels such as sales
from outlets of would be competitors and e-commerce platforms. We can
Interviewer Well, no. Could you tell some good channels for it? also consider interviewing distributors who come before retailers in the
Candidate Since it is luxury player, having its own outlets in Tier-1 cities would be value chain to estimate how much they supply.
good option. Apart from that, it can also consider supplying to watch Interviewer Good, thank you.
retailers who sell multiple brands. E-commerce channel is also
recommended.

115
Market Sizing – LUXURY WATCH MANUFACTURER

Approach

India’s Adult
Population (1 billion)

Lower Income Middle Income Upper Income


Class (50%) Class (40%) Class (10%)

Ultra-Rich Wealthy
Individuals Individuals
(10 million) (90 million)

Assume that on an
Average price of
average, an individual Purchases every year
X Potential Market Size
purchases a watch once (2 million)
luxury watch in India = (Rs. 100 billion)
(Rs. 50,000)
every 5 years

116
Revenue Decline – PIANO DISTRIBUTOR
Candidate : Varun Sridhar Company : NRI Consulting
Sector : Musical Instruments Type of Case : Declining Sales Interviewer We haven’t made any changes to price but that doesn’t mean price is not
cause of the problem.
Varun Then, maybe competitors have reduced their prices.
Problem Statement: Assume that you are a Piano Distributor. Your piano sales are
declining. Interviewer Yes, you could look at that.
Varun (They discuss the pricing strategy and candidate moves to other factors.)
The Interview Has there been any change in the product?
Interviewer No.
Interviewer Good Morning Varun, tell us something about yourself?
Varun Okay, is something wrong with the Place factor?
Varun Good Morning Sir. Prepared a generic answer for this. (Candidate’s cv
mentioned interest in piano) Interviewer Yes, place is an issue. What are the things that you will look at in place?
Interviewer That’s good to hear. Let’s get started with the case. Assume that you are a Varun I will look at the location of the store.
Piano Manufacturer. Your sales are declining. What measures can it take?
Interviewer How would you evaluate if the store location that you have chosen is
Varun Okay, I will break down Piano revenue as function of price and quantity. good or not?
Interviewer No, this is now how it is. Think of another way of going about it. Varun If its in a crowded area, the footfall you get in the store is decent or not. I
(Candidate thinks for a while) Use any other framework that have been will also analyse the location of the competitor’s store.
taught in the course, maybe something related to marketing.
Interviewer Yes, that’s a problem. The competitor’s store is located in a street that has
Varun I will analyse the case using the 4Ps. I will start with Price. Have they made musical association while yours is not.
any changes to the price?
Varun They can change the location of their stores to a better place.
Interviewer No, they haven’t made any changes.
Varun In that case, can I move past price? Interviewer This is a good idea. You may stop here. Good luck.

117
Revenue Decline – PIANO DISTRIBUTOR

Approach

Piano

MECE

Price Product Place Promotion

Own Competitor’s Competitor’s


product’s Own stores
Price Location
price

First Cause of Better Second Cause of


No change Reduced placed
Revenue Decline Revenue Decline

No change

118
Market Expansion– E-COMMERCE COMPANY
Candidate : Rahul Company : NRI Consulting Rahul I will start by analysing the supply side then move to the demand side. Let
Sector : Analytics Type of Case : Market Expansion me first analyse which out of revenue and expenses is causing the
problem. Or is it that customers aren’t getting attracted e.g. website? This
will be my overall approach.
Problem Statement: Major E-Commerce Company enters a new market and is looking
for avenues to expand its market share. Interviewer Look into the customer side. Assume for the case that there is an issue
with the website. (The candidate has a analytics background) The website
isn’t appealing enough for the customers. As a consultant what are the
The Interview factors you will be looking at?
Interviewer Good Morning Rahul, let’s get started with the case unless you have any Rahul Okay, I would look at number of visitors on page, bounce rate (percentage
preliminary questions for us? of visitors who navigate away from website in short time), and number of
unique visitors. I will also look at how customers are being directed to our
Rahul Good Morning Sir. Sure, we can start with the case.
website. Is it through any specific pages, apps, blogs, or random search.
Interviewer Well. Your client is an E-commerce company that entered a new market
Interviewer Assume that visitors are coming through a particular page. There are a few
but it was not able to get a major market share in that particular segment/
set of blogs through which we are getting our customers. But they are
country. You, as a consultant, have to address the issue and provide
advertising heavily on other media as well. But those aren’t having a
suggestions for their future action. (Candidate takes 5 minutes to
major impact.
formulate his approach)
Rahul Then this means only a few blogs are giving you the major chunk of
Rahul Alright, I would analyse the value chain. But before that, I have some
customers. This is an issue of advertising. The channel that they are using
preliminary questions. Where is the inbound logistics coming from? Who
isn’t most appropriate.
are their suppliers? Are we just a warehouse manufacturer? Are we a
moderator? Or are we engaging in buying and selling also? Interviewer What steps will you undertake to solve this issue?
Interviewer We know that they are just a moderator-the middleman. Also, they have a Rahul 1. They can use micro-influencers(social media celebrities having following
prevalent market share in other countries. But they entered this country of 1K to 1 Lac) to create interest among their customers. Since we are
newly in which their market share is going down. We have a single entering a new market, we can target the customers through them.
warehouse in the entire country. 2. Engage in co-branding activities with other new entrants.
Rahul Okay. I want to know how are we distributing the product to the 3. Try to contact more blog people because that’s where majority traffic is
coming from.
customers? And who are our customers and where are they located?
4. Rethink the advertising strategy through traditional means.
Interviewer They are distributing through a third party vendor. Now focus on the
Interviewer Very good, this will be enough.
problem. 119
Market Expansion– E-COMMERCE COMPANY

Approach
Industry Analysis
for E-Commerce

Not to be Demand
Supply side MECE
considered Side

Website Case Specific


Expenses Revenue

Number of
Number of unique
Bounce Rate Channel directing
visitors visitors

Recommendations

Final Answer

120
Market Entry– AUTOMATIVE AFTER SALES FIRM
Candidate : Rahul Company : NRI Consulting
Sector : Automobile Type of Case : Profitability Kirti It would depend on the country. Say, if the country is a really big one and
if the market available is huge, it makes sense to open the manufacturing
plant there itself. In the long run, their fixed costs will go down and we will
Problem Statement: Create a go-to market strategy for a new country for an
be able to cover the fixed investments.
Automotive After Sales Company
Interviewer Okay, lets assume we aren’t going for this strategy. Assume that we are
exporting it to the other country that small in size . They are collaborating
The Interview with a third party for logistics. Reason why would they go for this? Also,
suggest some ways for them to reduce their expenses under this strategy.
Interviewer Good Morning Rahul, let’s get started with the case unless you have any
preliminary questions for us? Kirti Okay, since we are entering a new market, we would not know of the
exact route for logistics. In that case, it makes sense for us to undertake
Kirti Good Morning Sir. Sure, we can start with the case. this strategy.
Interviewer Well. Lets assume there is Company X in India. It engages in after sales Interviewer Okay, conclude your overall recommended strategy.
business for Automotive Manufacturer of auto parts like brakes, spare
parts,etc. Currently, they are planning to enter a new market. As a Kirti I would say if it’s a big country, then they should go for setting up a
consultant, you are supposed to create a go-to market strategy for their manufacturing plant. Otherwise, exporting it from the base country, given
entry into a new country. its feasible, would be more appropriate.

Kirti (After asking some preliminary questions)Alright, I will conduct the Interviewer Very good, this will be fine.
industry analysis. (The candidate explained his approach of analysing
Porter’s Five Forces)
Interviewer Okay, what are the parameters you will look to decide if the company
should enter the new market or not?
Kirti Okay. So, I would say we should definitely enter the market if
attractiveness of the market is high and the competition in the new market
is low.
Interviewer Very well, Lets assume that there are two options available to you. Either
you can open a new manufacturing plant there or just export it from
here(if its feasible). How would you decide between these options?
121
Market Entry– AUTOMATIVE AFTER SALES FIRM

Approach

Market Entry

Entry Establishing Value


Decision Chain

Small
Third Party
Collaborations
Neighbouring
Market Share Market Size
(Existing (Market
Countries
Competition) Attractiveness)

Own Facility Large


(Manufacturing Potential Market
Unit) Countries

122
Cost reduction - GENERIC

Candidate : Abhijit Kande Company : NRI Consulting


Type of Case : Cost reduction Abhijit Sure Sir.
Sector : Generic
1 As experienced people demand high salaries, change in employee mix is
recommended.
Problem Statement: There are 2 similar cost centres. Cost centre one is more 2 To ensure that highly skilled employees are not fired, these employees
profitable. Evaluate the reasons. can train/mentor freshers.
3 While working on a project, experienced people count can be decreased
and more freshers can be included.
The Interview
Interviewer Thank you
Interviewer Good Morning Abhijit, how are you doing today?
Abhijit Good Morning Sir, I am doing good. Approach
Cost
Interviewer Very well, let’s get started with the case right away.
There are 2 similar cost centres. Cost centre one is more profitable.
Evaluate the reasons.
Abhijit Okay, so first starting with fixed costs…. Variable Cost Fixed Cost same
Interviewer Fixed cost is same for both cost centres.

Operating Direct Material


Abhijit Alright, variable cost consists of employee cost ,operating expenses… same Employee Cost same
expenses cost
Interviewer Operating cost is also same for both of them. Proceed with employee cost.
Abhijit There can be a difference in number of employees, billing/wage rate,
employee mix.
Interviewer The number of employees and wage rate is same. No. of employee Billing Rate Employee Mix

Abhijit The employee can be freshers as well as experienced . The experienced The no. of employees The difference is
The Billing Rate
people demands high salaries. So, the cost can be high. are same in employee mix.
is same
Interviewer Can you tell some ways to reduce cost?

123
Strategy &

124
Pricing/Guesstimate – BILLBOARD ADVERTISEMENT
Candidate : Naman Gupta Company : Strategy& Interviewer Good, now assume you don’t have any similar billboard pricing data
Sector : Mass Media Type of Case : Pricing/Guesstimate available and can’t do straight-away parity pricing. Is there any other
competition you can look for pricing?
Problem Statement: How will you price an advertisement on a static billboard that is Naman Actually billboards are used for advertisements so we should compare to
located at Bengaluru airport? other advertisement channels like spot ads on television, social media,
The advertisement is about a premium product. newspapers etc. ?
Interviewer Correct, so let’s take spot ads for television as a benchmark. What will you
The Interview evaluate?
Naman I should compare the number of people reached out via billboard for the
Interviewer So, I recently was travelling on the road and saw a billboard. Tell me how
duration the ad is posted and compare how much I need to pay to reach a
will you price an advertisement on the billboard?
similar audience via a spot-TV ad.
Naman What type of billboard is this – static picture or dynamic (where
Interviewer Yes, now tell me the approach of calculating the number of people
advertisements change)? Where is this billboard located? What is the
reached out via the billboard.
advertisement about?
Naman So we can split the problem as Number of people reached ……. (approach
Interviewer Assume it is a static billboard with only one advertisement and it is located
given on the next page)
at Bengaluru airport. The advertisement is about a premium smartphone,
Do you want me to get into numbers?
take iPhone as an example.
Interviewer No that is fine. How will you evaluate the percentage of people for whom
Naman Ok, what is the rough size of this billboard and is it located outside the
the product is relevant.
airport?
Naman I will look at the age-group. Travelers with age 20-60 can be considered as
Interviewer You can assume the billboard is 2.5m x 3m, the typical ones you find for
the target population who can buy a smartphone. Should I look for
advertising smartphones outside the airport.
additional parameters?
Naman Ok, I can think of two ways to price it – 1) Competitive or Parity Pricing
Interviewer No, that would be all for now. I liked your approach and wish you all the
where you look at similar billboards’ prices at the same or other airports
best.
and 2) Value-based pricing. I don’t believe cost based pricing is applicable
here as the benefit (the number of persons who see the billboard) and the Naman Thank You.
cost (materials used to display the advertisement) have quite different
metrics here.
125
Pricing/Guesstimate – BILLBOARD ADVERTISEMENT

Approach
Billboard Reach
(no. of people)
Pricing

% of people
Competition No. of days No. of people % of people
Value Based
Based
Cost Based
the ad is X crossing the X who see the X for whom the
product is
posted billboard ad
relevant

Other Different Other modes Passengers


Same Mode Mode
billboards of advertising arriving
+
Passengers
Mobile Sales departing
Social Media Television Spot Print Media +
Marketing Promotion
Staff and other
regular visitors

Estimate the Price of Billboard


based on price of reaching similar
number of eyeballs by a TV ad.

126
Pricing strategy - TELEPORTING MACHINE
Candidate : Ankur Dixit Company : Strategy& Also, if there are any operational hours that are we constrained to? How
Sector : N/A Type of Case : Pricing many days in a year will the machine work?

Problem Statement: There is an engineer who has just developed a machine which Interviewer Good question. Currently the machine takes around 5 minutes of setup
time every time for a new person and 5 more minutes to teleport. The
can teleport people from say Bombay to London. Come up with a pricing strategy.
engineer expects to work 10 hours a day. For the number of days assume it
to be 360.
Ankur What are the operational costs associated while working on the machine?
Interviewer For every person that is transported, there is a fixed expense of 10k.
The Interview
Ankur Does the engineer have any particular profit margin in mind? Also, the
Interviewer Good Morning, Ankur. Tell me something about yourself R&D cost is supposed to be break even in what time frame?
Ankur Gave a brief introduction about myself, work experience and hobbies. Interviewer Just assume a number for both and give me the final price.
Interviewer Great, so let’s do a small case. There is an engineer who has just
Ankur (Now I had all the numbers that I require to come up with the price) (5
developed a machine which can teleport people from say Bombay to
crores/ (12*360) + 10k + 360*8*60/10) * 0.2 = ~ 46000
London. Come up with a pricing strategy.
Interviewer That’s good. Which pricing model would you choose to price the
[Progress] Asked for some time to structure as of how I would go about pricing. Made
equipment?
a rough structure as of what questions are needed to be asked (basically
data points) Ankur We already have the cost-based price as calculated earlier. For value-based
Ankur So, I can price the equipment with three pricing strategies. Value based, pricing, it will depend upon the current price of air ticket assuming that the
air travel is the fastest mode of transportation currently present. Then I
Cost based, and Competition based. Before I could proceed further the
would like to add the value gained by the time saving Thirdly, for
interviewer asked me to focus on Cost based pricing. Can I know about the
different costs incurred to develop the product? competition-based pricing I would like to know about the current
competition, the services they provide and the price they are charging.
Interviewer So, the engineer spent around 5 crores to develop the product
Interviewer There is no competition at present. Anyways I think you have done well.
Ankur Can I further know about the lifecycle of the product? Good luck for next round.
Interviewer The engineer expects the machine to work without any repair for 5 years
Ankur Great. I would like to know about the time the machine would take to
teleport a person from Bombay to London. 127
Pricing strategy - TELEPORTING MACHINE
Candidate : Ankur Dixit Company : Strategy&
Sector : NA Type of Case : Pricing

Problem Statement: There is an engineer who has just developed a machine which
can teleport people from say Bombay to London. Come up with a pricing strategy.

Approach

Pricing

Value Based Cost Based Competitor Based

Fixed cost

Variable cost

128

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