Peter Anderson, KPMGPeter Purcell, Deloitte & Touche

Adapted from Consulting Interview Preparation GuideMarquis, Stanford GSB Class of 2006

Case Interview Preparation Guide

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Prior to the Interview

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Building Relationships at your Target Firms

Attend as many events as possible for the firms that interest you

Including school / company-wide, affinity groups, and regional / office-specific events

At these events, talk to as many people as possible to make an impression

Have a set of good questions to ask firm representatives to show your level of interest in the company

Don’t ask about topics that can easily be found on the company’s website

Get the contact information for each person with whom you speak and follow up with an e-mail after an event

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Building Relationships at your Target Firms

Always make a positive impression when interacting with company representatives

This includes when attending official company presentations and dinners, during informal exchanges, and even at school sponsored functions

Be on the lookout for deliberate attempts to see how you act when you’re not “on the clock”

Assume that all interactions with a firm’s employees could affect your standing, so be on your best behavior AT ALL TIMES!

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Resume Preparation

Without a prior banking or consulting background, you will likely have to tailor your resume to appeal to the consulting firms

Instead of focusing on the “must have” skills for your previous industry, emphasize the following:

Analytical abilities Experience in teams Communications skills Leadership / management experiences History of achieving results

Use an “Additional Information” section to highlight qualities / interests to differentiate yourself

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Answering the “Why Firm X?” Question

Show a specific desire to work at Firm X, rather than simply a general desire to work in consulting

Learn the “ins and outs” of the company Locations Business areas of specialty Reputation Career progression and direction Company culture

Research the firm’s competitors to find points of differentiation

Give reasons that the firm is a good fit for you and that you are a good fit for the firm

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Describing your Work Experiences

Resume “walk through” Develop a coherent story for each step along your educational

and career path – it should not seem like a random walk Some firms analyze the walk through as if it were a case – be

structure when describing the sections of your resume

Work experience stories Allow firms to learn about your experiences in a variety of work

situations Have four or five unique stories ready to share

− Led an initiative to a successful conclusion− Had an impact on a team where you were not in charge− Worked in a group where there was internal conflict− Found success in a challenging environment− Initiated change within an organization

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Generating a List of Questions

It is crucial for the candidate to develop good questions to ask the interviewer at the end of the interview

Tips for creating strong questions: Ask questions beyond standard travel and work-life balance

issues (interviewers hear these questions all the time) Show that you have done some prior research about the firm Ask questions that pertain to your own background If given interviewer biographies, ask questions about their

backgrounds and how they were able to leverage them at the firm

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Generating a List of Questions

Brainstorm sample questions Firm culture / office culture Performance management Specialist vs. generalist skills Long-term employee development Others??

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Approaching the Case Interview

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Interview Technique Basics

Keep clean and organized notes Use two separate sheets (landscape oriented) for your

information, analysis, and calculations Write in pencil and write neatly

− This may seem basic, but being able erase mistakes helps produce clean and easy to read notes

− Some companies will collect your notes to get insight into how you structure your thoughts

Use tables and graphs to demonstrate structured presentation of information

Get comfortable with using “educated estimates” when concrete data is not provided

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Interview Practice Basics

Practice makes perfect Start with sample cases early to develop your own technique Seek opportunities to participate in, or observe, case studies

Case guides can help build your case analysis skills

Run through cases with classmates and friends Friends who’ve graduated before you; those with internships Mock interviews and case study workshops

Don’t practice with company reps unless you’ve developed a case approach

Being unpolished during a company case coaching session is a wasted chance

Coaching sessions should sharpen your skills, not initiate them

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Math Tricks

Use round numbers wherever you can, especially when you have the chance to pick the numbers

Do “ballpark” calculations if possible It isn’t about getting the exact mathematical response There is usually an allowable margin of error, so take advantage

of that

Calculations must be solved correctly KISS If you do calculations in your head, write your solutions down so

you can refer to them later

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Math Tricks

Rule of 10’s and Rule of ½’s Break difficult numbers into either tens or halves to do quicker

calculations Quick! What is 37% of 25,000?

− 25,000 / 10 = 2,500 10% of 25,000− 2,500 / 2 = 1,250 5% of 25,000− 1,250 / 2 = 625 2.5% of 25,000

From the above, you can approximate the answer

(2,500 * 3) + 1,250 + 625 = 9,375 37.5% of 25,000

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Math Tricks – Exercise

What is the annual U.S. market for chewing gum Total number of consumers Units sold Revenue Profit

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Math Tricks – Example

What is the annual U.S. market for chewing gum (total number of consumers)

Estimate the total U.S. population (~300 million) Segment the population based on some metric (hint: age is

usually a good metric) Estimate the number of people in each population segment Make a guess at the percentage of each segment that chews gum

[(100 m) * 80%] + [(150 m) * 60%] + [(50 m) * 20%] =

80 + 90 + 10 = 180 million

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Math Tricks – Example

What is the annual U.S. market for chewing gum (units sold)

Start with the estimate of total gum chewing consumers Make a guess at the number of packs an average consumer

purchases in a given week Multiply the above two numbers to estimate the number of packs

sold each week Multiply by number of weeks in the year (ballpark!)

180 million X 2 X 50 = 18 billion

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Math Tricks - Example

What is the annual U.S. market for chewing gum (revenue)

Start with the annual number of pack sold Make a guess at the average price of gum per pack (ballpark)

18 billion X $1 = $18 billion

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Math Tricks - Example

What is the annual U.S. market for chewing gum (profit) Method #1: Annual revenue X estimated profit margin

$18 billion X 10% = $1.8 billion

Method #2: Unit profit X number of units

$1 per pack X 10% X 18 billion units = $1.8 billion

Use round numbers:− Round, but reasonable (e.g., wouldn’t expect a 50% margin)− It’s the methodology they want to see!

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Learning to “Think Business”

Structuring the case well and executing the math are great, but… you need to get to the “so what”

Relationships within and between industries is important in determining implications of business decisions

“Connecting the dots” in a business scenario can demonstrate key business insights in a case analysis

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Learning to “Think Business”

Useful tactics for learning to “think business” include: Reading business related periodicals (WSJ, CNN Money, Fortune,

etc.) Watching business related programs (MSNBC, Bloomberg, etc.) Analyzing business events to figure out the full set of implications

Example: OPEC nations decide to restrict the supply of oil− Direct: US gas prices increase oil company revenues increase− Indirect: Sales of SUVs decrease auto companies offer promotions− Indirect: Airlines raise fares travelers fly less airline layoffs− Indirect: Use of public transportation increases revenues for

business related to auto use decline− Indirect: US government faces pressure US applies trade sanctions

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Key Business Concepts

Solvency / Profitability Revenues Costs

Industry attractiveness / market issues Total size of market (in dollars) Number of competitors Minimum efficient scale Market conditions and associated implications

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Key Business Concepts

Mergers and acquisitions Financials of the deal (will it be profitable?) Product, service, or support synergies Market reaction Culture issues

Marketing Pricing Placement (distribution channels) Product Promotion

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Key Business Concepts

Product introduction Potential market for product or service

− Do consumers want it?− Does market have to be developed?

Profitability of the product− Cost to introduce− Expected revenues and margin

Competitor reaction− Can they copy it?− Do they already have competing products

Does the new product fit your current company and product line− Does it fit with the brand?− Are there implications on existing products?

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Key Business Concepts

Other concepts that show deeper business insights Labor issues

− Unionization− Defined benefit programs

Long-term contracts Revenue stream analysis Costs

− Fixed vs. variable− Direct vs. indirect

Supply / demand issues, and their affect on pricing Operational issues Culture and morale issues

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Case Execution

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Case Execution Tips

Break case problems into distinct segments to create a structured response

Use decision trees to set up the analysis The case question serves as the root, and the problem components

serve as the branches

Once you’ve presented a roadmap, follow it! Be sure that your problem components are “MECE”

− Mutually exclusive: No overlaps between issues− Collectively exhaustive: Key issues are covered by the branches

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Case Execution Tips

Example: An automobile dealership is experiencing declining profits

What could be the problem?

Why is profitability declining?

Revenues Costs

Price Quantity Fixed Variable

… … … … … … … … … … … …

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Case Execution Tips

Don’t be afraid to ask clarifying questions if you don’t understand something

Assumptions are powerful; be clear when you use them

Be quick, but correct, when doing calculations (use round numbers and ballpark estimates)

Be confident in your analysis

Be ready to change direction if guided to do so

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The First Four Steps

Summarize the question

Verify the objectives

Ask clarifying questions

Lay out your structure – it’s OK to ask for a few minutes to collect your thoughts!

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Types of Cases

Entering a new market Step 1: Investigate the market

− Would entering the market make good business sense?− Assess market attractiveness

Step 2: If you decide to enter the market, determine the best way to become a player

− Start from scratch− Acquire an existing player− Form a JV or strategic alliance with a complementary player

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Types of Cases

Developing a new product Step 1: Analyze the product Step 2: Analyze the market and develop a strategy Step 3: Analyze potential customers and segments Step 4: Develop project financial model

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Types of Cases

Pricing strategies Step 1: Investigate the product Step 2: Determine pricing strategy

− Pricing methodology:○ Cost-based pricing: Analyzing product cost, estimating

margin, and generating sales price○ Price-based costing: Analyzing market for price point,

costing out production to meet price point with desired margin

− Supply / demand forces and price elasticity

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Types of Cases

Growth strategies Step 1: Clarify objectives

− Nature of growth (organic, acquisitive− Scope of growth (division vs. enterprise)

Step 2: Analyze and select growth strategy− Increasing sales− Expanding distribution channels− Expanding product line− Invest in major marketing programs− Diversify products / services− Acquire another firm

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Types of Cases

Starting a new business Step 1: Investigate the market to make sure entering it makes

good business sense Step 2: Analyze the project from a VC’s point of view

− Management team− Market and strategic plan− Business model and operational strategy− Product and service footprint− Customer segmentation− Distribution channels− Financing

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Types of Cases

Competitive Response Step 1: Ask probing questions

− What is the competitor’s new product or service?− How does it differ from ours?− What has the competitor done differently?− How has market share shifted?

Step 2: Analyze and select a response action− Acquiring the competitor− Merging with or acquiring another complementary player− Copy the competitor− Hire the competitor’s top management− Launch marketing and PR campaigns to increase profile

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Types of Cases

Increasing sales Step 1: Ask probing questions to gather information

− Market− Product line− Customer

Step 2: Analyze market factors and determine sales strategy− Increase sales force (and presumably sales volume)− Increase price point (or reduce price point)− Increase marketing− Enter new markets− Expand customer base− Improve customer service− Rationalize product line− Create seasonal balance

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Types of Cases

Reducing costs Step 1: Ask for a breakdown of costs Step 2: Identify and analyze cost drivers for significant cost

categories Step 3: Analyze market dynamics and their impact on cost

drivers Step 4: Benchmark competitors Step 5: Determine cost reduction strategy

− Labor− Facilities and real estate− Capex− Opex− Other

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Types of Cases

Turnarounds Step 1: Evaluate the magnitude of the problem

− Test the business model− Analyze liquidity and understand debt covenants− Review costing and pricing and develop top down cost model− Review business model and market strategy

Step 2: Choose appropriate actions (and be creative!)− Control cash and cut all non-essential spending− Clean up the balance sheet− Retain key staff and cut non-essential payroll− Communicate / negotiate with key constituencies

− Suppliers− Banks− Tax authorities− Customers

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Case Examples

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Case Example Introduction

The following case samples are provided to facilitate first-level analysis

For each case, practice setting up the high-level tree that could be used to attack the problem:

Place the key question for the case at the root of the tree Break the problem into a set of solvable components and assign

those components to the tree branches Define the high level steps you would take to solve each

component

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Case Example

Your client owns a professional football team that has just won the Super Bowl. Despite the Super Bowl victory, the team finished the season with a financial loss for the 5th season in a row.

What could be the cause of the team’s profitability problems? How would you go about developing recommendations to reverse

this past season’s financial performance?

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Case Example

You are the owner of a small, but relatively successful towing company with a hand full of locations throughout the Southeastern U.S. Two recent MBA graduates have approached you about purchasing the company.

How would you go about determining whether you should accept the offer to sell your company?

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Case Example

Your client is an industry-leading security software company that is considering acquiring a data management software company.

How would you go about determining if your client should go through with the acquisition?

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Case Example

Your client is a national chain of fitness centers with locations in 35 major cities. The company is thinking of creating a sub-brand of gyms for the small-town market.

How would you go about determining whether your client should launch the sub-brand?

What issues come into play when making this decision?

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Case Example

A publishing company that has traditionally created news and entertainment magazines is thinking of introducing a new sports-focused magazine.

How would you go about determining whether they should do it?

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Case Example

You have taken over as the Executive Director of a non-profit that has had trouble raising enough money to fund its programs.

What could the problems be? How would you go about determining what might be done to

resolve the issues?

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Case Example

You have just accepted a job as the Superintendant of a city school district where more than 90% of the students have scored below proficient in English and Math for the past 15 years.

How will you solve this long-standing academic performance problem?

What resources might you need to implement your plan?

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Case Example

Your client is a beverage company that was excited to see its sponsored cyclist win the Tour de France. That is, until authorities announced that the cyclist had tested positive for performance enhancing drugs.

What sort of damage control should the company do in light of this event?

What could be the effects on the company’s brand as a result of this discovery?

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Case Example

Your client is an enterprise software company that has spent over $100 million developing a new product that isn’t selling well.

What could the problem be? How would you go about identifying what could be done to

resolve the situation?

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Case Example

A friend of yours is considering becoming a franchisee of a national fast-food chain

What issues should she be thinking about in making her decision? How would you go about determining whether she should open

the franchise?

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Final Words of Advice

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General Advice

Relax, and don't let yourself get too stressed out before or during the interview – succumbing to nerves is the quickest way to sabotage yourself.

Be confident during the interview, but be humble!

Be sure to have a strong list of questions to ask the interviewers

This is your chance to gain insights from their experiences It shows that you care enough about getting a position to ask

insightful questions

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General Advice

If you make a mistake, learn from it and move on. Don’t let it fester in your mind It will serve as a distraction later on.

Make sure the interviewer understands your thinking. Gives the interviewer a chance to give you correct information if you've

got something mixed up Gives the interviewer a chance to ask follow-up questions to gain more

insight about you as a candidate

Take time to think about what you're going to say before you say it.

There is nothing wrong with taking 5 or 10 seconds to think through something

Fight the urge to say the first thing that comes to mind

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Advice on Cases

Focus on structure from start of interview until the end Initial case breakdown Set up and execution of calculations Final case wrap-up

Having a structured approach in a case interview is just as important as getting the "right" answers

Think “big picture” whenever you can Don’t dig too deep into the details until you have to The big picture should be the foundation of your approach; it is

especially important when developing your initial case roadmap and issue tree

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Advice on Cases

Make sure you bring out the "So what?" insights and not just surface level ideas.

Simply reciting facts won't distinguish you from the pack Drawing out insights about the case situation, and the larger

business context is key

Be as efficient as possible when doing the math on your cases.

Writing out equations can use up a lot of time that would be better spent doing case analysis and gathering data

Find shortcuts to get through your calculations quicker, such as canceling zeros or recognizing patterns in numbers

Use the Rule of 10’s and Rule of ½’s

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Advice on Cases

Make your notes as neat and clear as possible. It will help so you don't confuse yourself during interviews Some firms collect your case notes to gain insights on how you

structured your analysis

Don’t become restricted by the explicit details of the case – be creative!

There are many ways to solve a problem Creativity can make a strong and lasting impression on the

interviewers

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Advice on Cases

Use assumptions to your advantage, but check first If you need a piece of information during the case, ask for it The worst that can happen is that the interviewer won't have the

information and you will have to make an assumption about it The alternative to not asking is making an invalid or incorrect

assumption and going down the wrong path In most cases, the interviewer will have additional data that can

help you sharpen your case analysis

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Advice on the Fit / Experience Discussion

The interview is not all about the case, the interviewer’s cultural fit assessment is highly important!

Focus on your role – the interviewer wants to hear about what you did

Have several stories prepared (I’d recommend at least four) that cover a wide range of anecdotes about your leadership experience (try not to repeat stories across interviews on a single day)

Be concise and make sure you bring out only the most important points