Crack the Case · HBS HEC Hong Kong UST IE Madrid INSEAD France INSEAD Singapore Iowa Irvine...

Crack the CaseLevel 1

David OhrvallMBACASE

2

Core Skills

75 minutesCLASSIC SkillsCommunication &StructuringMarket SizingExercise w/ Partners

Case Flow &IntegratedThinking

45 minutesVideo Highlights& Business CaseMBACASE PathStructuring, Analysisand Integration

Practice

60 minutesMini CaseDrills You Can Do

Agenda

3

JapanJapan

David Ohrvall

4

MBACASE Events

AU CairoBerkeleyBocconi SDABoston CollegeCambridge JudgeCM TepperCase WesternCass LondonCEIBS ShanghaiChicagoColumbiaDardenDartmouth TuckDuke FuquaEmoryESADE BarcelonaGeorgetown

GeorgiaGeorgia TechG WashingtonHaskayne CalgaryHBSHECHong Kong USTIE MadridINSEAD FranceINSEAD SingaporeIowaIrvine CaliforniaIveyIU KelleyMarylandMcGill

TexasThunderbirdRotmanUSCU of WashUCLAUC DavisWake ForestWashington & LeeWhartonWisconsinWilliam & MaryYale

McMasterMichiganMichigan StateMinnesotaMITNU SingaporeNW KelloggNotre DameNYU SternOhio StateOwen VanderbiltOxford SAIDPepperdineQueen'sRiceSMUStanford

5

CASES are EVERYWHERE

ConsultingConsultingStrategy/ IT/ Operations

Market entry

Profit maximization

Declining market

Organizational redesign

MarketingMarketingNew product

Lagging product

New industry

Branding remedies

FinanceFinanceM&A transactions

Private equity buy-outs

Business sell-offs

Time value of money

IndustryIndustryAirlines

Health care

Internet / telecomm

Internal strategy

6

Industry /Marketing

Behavioral

Finance Consulting

Companies emphasize differentbehavioral and technical elements

• Show leadershipand positiveenergy

• Can achievelong term goalsthru cooperation

• Play well withothers

• Show grit,confidence,and fight

• Use insightsand savvy toWIN!!!!!!

• Get alongwith others

• Show ability tobe all things toall people

• Use data toprove pointsand persuade

• Enjoy and canlead others

Technical • “Think thru asituation . . .”

• Company andbusiness sense

• Industryawareness

• Acct./FinanceBasics

• Logic, deal andbusiness sense

• Memorized andon the spotanalytics

• Gen. businessknowledge

• Logic andbusiness sense

• On the spotanalyticalprowess

7

We’ll be working on skills you canuse in all your interview situations

Technical • “Think thru asituation . . .”

• Company andbusiness sense

• Industryawareness

• Acct./FinanceBasics

• Logic, deal andbusiness sense

• Memorized andon the spotanalytics

• Gen. businessknowledge

• Logic andbusiness sense

• On the spotanalyticalprowess

• Show leadershipand positiveenergy

• Can achievelong term goalsthru cooperation

• Play well withothers

• Show grit,confidence,and fight

• Use insightsand savvy toWIN!!!!!!

• Get alongwith others

• Show ability tobe all things toall people

• Use data toprove pointsand persuade

• Enjoy and canlead others

Industry /Marketing

Behavioral

Finance Consulting

8

But after today you’ll need togo deeper in certain areas

Technical

• Connect to theproducts

• Know the roleand your fit

• Embrace thelong term careerpath

• Know firmdifferences

• Highlightyour victories

• Show you areready tosacrifice

• Know officedifferences

• Find client-likeexamples

• Show you canflex and dealwith change

Industry /Marketing

Behavioral

Finance Consulting

• Know theproducts

• Know recentstrategies

• Know theindustry

• Mental math• Capex• Cash flow• Balance sheets• DCF• Debt/ equity• Working Cap• Depreciation• Goodwill

• Mental math• Growth rates• Present value• Slide reading• Break-evenanalysis

• Market sizingmath

• ROI

9

participate

think big picturebe serious,

have fun

What do cases really test?

CommunicationCommunicationC

LogicLogicL

AnalyticalAnalyticalA

Social SkillsSocial SkillsSS

Integration &CreativityIntegration &Creativity

IC

Be answer first!

Answer First


LogicLogicL




IC

12

hallenge or Failure

ersuasion

anage or Lead

ndividual Contribution

nalytics

I

M

P

C

A

Create an IMPACT

eamT

Interview Logic by David Ohrvall. Property of MBACASE. Do not copy or distribute.

Show breadth and depth

Depth

Breadth


LogicLogicL




IC

TimeTime FinancialGoals

FinancialGoals CompetitorsCompetitors Product

QualityProductQuality DistributionDistribution

Our client wants to open a chocolate store.

Short TermShort Term

Mid TermMid Term

Long TermLong Term

Break EvenBreak Even

ROIROI

Profit MarginProfit Margin

BoutiquesBoutiques

Gift ShopsGift Shops

Ice CreamIce Cream

OrganicOrganic

CocoaCocoa

ConsistencyConsistency

CentralCentral

RegionalRegional

Does ourclient have a

deadline ?

Does ourclient have a

deadline ?

What is ourROI goal?

What is ourROI goal?

Do you havedata on

competitors?

Do you havedata on

competitors?

What are theproduct

standards?

What are theproduct

standards?

Will wemake on siteor distribute

it?

Will wemake on siteor distribute

it?

14

NYC Chocolate Store

OrdersOrders Pick & PackPick & Pack LoadingLoading DeliveryDelivery InventoryInventory

They need to ensure on-time delivery and profit.

StandardStandard

RushRush

LayoutLayout

AvailabilityAvailability

DataData

PrepPrep

Truck TimingTruck Timing

Load TimeLoad Time

RoutingRouting

OutsourcingOutsourcing

Time WastersTime Wasters

High FreqHigh Freq

Low FreqLow Freq

Are theorderssorted

properly?

Are theorderssorted

properly?

Where arethere

slowdowns?

Where arethere

slowdowns?

What are thebest in class

metrics?

What are thebest in class

metrics?

Whatimpactsdelivery

efficiency?

Whatimpactsdelivery

efficiency?

How is ouravailabilityby product?

How is ouravailabilityby product?

15

Amazon Prime

Comfort

Scale

Accuracy

Estimating

Build a data foundation


LogicLogicL




IC

Towels Unlimited Inc.Towels Unlimited Inc.

• Sales are $.5B. Profit margin is30%. Profit may have fallen 30%.

Candidates must be ableto manipulate simplenumbers.

TotalRev

TotalRev

TotalCostsTotalCosts

TotalProfitTotalProfit

$Goals

$Goals

$500M $350M $150M Stop theBleeding!

100% 70% 30% $45M~10% Rev

When asked, theyshould be ready to gointo detail.

• simple equations• break even analysis• reading charts and data

$ #%

17

Estimate first

Work toward,consistent“normal “

pre and postinterview skills

How am I coming across?


LogicLogicL




IC

Pull togetherfacts and data

quickly

Developinteresting and

applicablesolutions

Creativity!

Save your creativity,Be output focused


LogicLogicL




IC


LogicLogicL




IC

MarketSizing

&Estimation

MiniBusiness

Case

FullBusiness

Case

Pre & PostInterview

BehavioralQuestions

Let’s do a case!

21

Market Sizing/ Estimation Cases Counting

# of toothbrushes sold regularlyMeasuring

How many square feet ofwindows are in Seattle

Usage How fast do consumers go

through a bottle of hair spray?

Comfort withambiguity

You need to SPEAK

22

eep exceptions and next steps in mind

stimate quickly with round #s

ick your metrics

tate your assumptions

ssess your approach and answer

S

P

E

K

A

SPEAK is a guide

23

How much shampoo do people usein a downtown hotel each day?

tate your assumptionsS

We are counting hotel supplied shampoo onlyDowntown hotels have 20 floorsShampoo bottles from the hotel are 1 ounce15 rooms per floor75% average occupancyCustomers open 1 bottle per day

24

ick your metrics and approachP

Ounces or units of product usedApproach includes:

Population – Don’t use this one every timeObservation – Great for unfamiliar topicsTimeDistanceGeography

25

stimate quickly and with round #sE

20 floors x 15 rooms = 300 rooms300 rooms x 75% occupancy = 225225 x 1 oz bottles = 225 bottles per day

26

ssess your approach and answerA

225 1 ounce bottles =28, 8 oz bottles (visually makes sense)

Very simple approachHow else could you have approached it?

27

eep exceptions and next steps in mindK

60% of people use hotel shampoo225 x 60% = 135 bottles

Some people take extra bottles from hotelFloor lay-out may varyNext steps:

Look into wall mounted pumps (less waste)Consider 2 sizes of bottles

Slides Videos & Cases Homework

Text “CTC1slides” to 33444

Partner Exercise & Break

29

Merge, Acquire, JV

Growth Strategy

New Product/ Bus

New Market (Geo)

Strategy

Maximize Profit

Change Price

New Processes

Restructure Team

Ops & Org

Competitor Attack

Market Shift

External Forces

Most cases followa similar pattern

Most Common Business Cases

30

Qualitative

StartStart

End

Warmth &Client Ready

Warm-up

Insight!

Chart/Table

Chart/Table

DataDumpDataDump EstimateEstimate

EquationsEquations Solvefor XSolvefor X

Quantitative Depth &Analytical

Logic &Breadth

Integration &Creativity

Data

So what?

MBACASE Path

Qualitative

StartStart

End

Warm-up

Insight!

Chart/Table

Chart/Table



Quantitative


1

1

Logic &Breadth

2

Depth &Analytics

3Integration &Creativity

6

5

Data

7

So what?

4

1. Qualitative and Quantitative

Pet Power VideoWatch this video using the link thatcame in the e-mail with these slides.

2. Warm-up

Qualitative

StartStart

End

Warm-up

Insight!

Chart/Table

Chart/Table



Quantitative


1

1

Logic &Breadth

2

Depth &Analytics


6

5

Data

7

So what?

4

2. Move Into the Case


2. Pet Power Prompt


2. Pet Power Prompt with Data


3. Recap: Situation, Complication,and My Task


3. Clarify, Ask for a Minute, Plan

Qualitative

StartStart

End

Warm-up

Insight!

Chart/Table

Chart/Table



Quantitative


1

1

Logic &Breadth

2

Depth &Analytics


6

5

Data

7

So what?

4

3. Create Your Plan

39

How do I put together an on-point,case specific and flexible plan?

Facts

Data

Plan

?

40

What’s your objectivewith every case?

Maximize the Valueof the Company

41

Develop a holistic way to thinkthrough problems

Strategy

Operations

OrganizationFinance

People

Systems

Processes

Measure

.

CA$H

D/E

SP E C I A L

T

Zone 1

Zone 2

Zone 3Zone 4

Zone 5

R

C

VolumeMixPrice

FixedVariable

Customer

42

Waterfall – each zone adds value

Zone 1

Zone 2

Zone 3Zone 4

43

Strategy – increase, change, shrink

Strategy

Zone 1

Zone 2

Zone 3Zone 4

44

Operations – revenue and cost

Strategy

OperationsZone 1

Zone 2

Zone 3Zone 4

R

C

VolumeMixPrice

FixedVariable

Customer

45

Organization – people, systems,processes and measurement

Strategy

Operations

Organization

People

Systems

Processes

Measure

.

Zone 1

Zone 2

Zone 3Zone 4

R

C

VolumeMixPrice

FixedVariable

Customer

46

Finance – cash, debt, equity

Strategy

Operations

OrganizationFinance

People

Systems

Processes

Measure

.

CA$H

D/E

Zone 1

Zone 2

Zone 3Zone 4

R

C

VolumeMixPrice

FixedVariable

Customer

47

External Forces

SP E C I A L

TZone 5

Suppliers

Public

Economy

Competitors Industry

Technology

Legal

Auditing

48

Maximum Value Model (MVM™)

Strategy

Operations

OrganizationFinance

R

C

VolumeMixPrice

FixedVariable

People

Systems

Processes

Measure

.

CA$H

D/E

SP E C I A L

T

Zone 1

Zone 2

Zone 3Zone 4

Zone 5

Customer

49

Use your plan to connect andexplain

Main Idea

Group A

•Why?

•Data?

•Questions?

Group B Group C Group D

Facts

Data

Plan

50

Use your plan to connect andexplain

Facts

Data

Plan

TT

R

C

P

V

VC

FC

issue

driver


3. Present Your Plan


3. What about your PLAN?


3. What do you MEAN?


3. What about your DATA?

Qualitative

StartStart

End

Warm-up

Insight!

Chart/Table

Chart/Table



Quantitative


1

1

Logic &Breadth

2

Depth &Analytics


6

5

Data

7

So what?

4

4. Dive Into Data


4. Talk Thru the Data (Handout A)

Qualitative

StartStart

End

Warm-up

Insight!

Chart/Table

Chart/Table



Quantitative


1

1

Logic &Breadth

2

Depth &Analytics


6

5

Data

7

So what?

4

5. Find Insights


5. Find insights (Handout C)


5-6. Use Data

Qualitative

StartStart

End

Warm-up

Insight!

Chart/Table

Chart/Table



Quantitative


1

1

Logic &Breadth

2

Depth &Analytics


6

5

Data

7

So what?

4

7. Integrate and Wrap-up


7. Give a Recommendation

Next Steps / Homework

1) Build my IMPACTstories

2) Buy a businessmagazine & practiceBlockBreakAskTwitter: davidohrvall

3) 15 market sizing cases,2 ways

4) Build an integratedthinking model

5) Pet Power, 2 times6) 10 profit trees –

different industries7) Global Nest, 2 times8) 20 Case Starts – check

out MBACASE.comvideos

9) 20 cases with friends10)10 cases with

strangers

Slides Videos & Cases Homework

Text “CTC1slides” to 33444

THANK YOU!

I

CRACK THE CASE WORKSHOPSGlobal NestCase Skills: Case specific words, root causes, profit

T

Ask for NumbersAsk about data and numbers. You must test a specific analytical skill. Transition to the “Data Pool.”

1. (BREADTH) What else would you like to include in your structure? (e.g. ask this if there is an obvious gap in the candidates’ thinking).

2. (DEPTH) Let’s talk in detail about some of the areas in your structure. Could you walk me through the data you would need for each section in order to find out what is happening? (The candidate should be able to explore each section and lay-out his thoughts. To understand the shift in revenues or costs the candidate would need to collect about 6–12 months of data for each category).

3. (DEPTH) Global Nest has a policy that they try to stock 3 levels of product for each category. For instance, low, medium and high quality pillows or vases. Why would they do that? Be ready if asked:

� Different customer needs and budgets � Staying competitive, we have to offer wide variety � Try to upsell customers, e.g. switch from medium to high � Full range of product required (supplier demands that store have all 3 types)

4. (NUMBERS) Those are some good thoughts. I do have some data here that I need your help in interpreting. Please review this slide and let me know what you see. Hand out the chart. Keep it in plastic to avoid having the candidate write on it.

5. (NUMBERS) Please calculate the profit for each product type. Expect exact numbers.6. (NUMBERS) What’s going on here?

� Selling 3 lines by product type � Before, high margin lines were selling more units � After, low margin units are selling more � Revenue has stayed the same but profit is down

Request a RecommendationPush the candidate for a recommendation• Short Term:

• Quickly turn the store back to its original format.• Understand the employees thinking and retrain them.

• Mid Term:• “When we put low margin products in front of customers, they bought them, perhaps

we can push high margin goods in certain areas.”• Long Term:

• “Why are we selling products at negative margin?” You must carry all 3 products, but vendor negotiations are next month.

• Negotiate product prices so that the -10% becomes 0% at least. This will result in $350k savings, most of the $425 loss (profit dropped from $375k to –$50k).

Track & PracticeTrack weak areas and plan to practice and drill• Help the candidate track strong and weak areas. Reading through data and finding root

causes is a basic skill. Recommend other data handouts and practice reading the main insights out loud. The candidate should also practice quick calculations to boost speed.

A

R

Total Store Revenue: $10M


BEFORE PROFIT DROP

Margin Revenue Breakdown Profit15% 40% $ 600,000

5% 25% $ 125,000

–10% 35% $ (350,000)

$ 375,000

AFTER PROFIT DROP

Margin Revenue Breakdown Profit15% 20% $ 300,000

5% 30% $ 150,000

–10% 50% $ (500,000)

$ (50,000)

High quality

Medium quality

Low quality

High quality

Medium quality

Low quality

7. (INTEGRATION) Why do you think there has been this shift to the low margin products? � People can’t find the products � High margin products have not been available (stock outs) � Customers’ budgets are tighter in particular for this location (likely tighter all over the US, but

more extreme here) � There’s been a change in promotion that has prompted people to buy the low margin products � Other?

8. (INTEGRATION) To wrap up, I need to tell you what the team found. At the location where profit is down, some employees had a bright idea. They thought it would be easier for the customers to find their products if they put a lot of the high volume sellers (low margin product) toward the front of the store. They thought it would be easier for customers to find everything and cut down on “silly” questions. Given the data and all these facts, what would you do?

Visit www.mbacase.com to learn more about the Crack the Case System book and C4: Crack the Case Crash Course

[email protected]

Typewritten text

Corrected

D

CRACK THE CASE WORKSHOPSGlobal NestHandout



BEFORE PROFIT DROP

Margin Revenue Breakdown Profit

15% 40% ?

5% 25% ?

–10% 35% ?

Total

AFTER PROFIT DROP

Margin Revenue Breakdown Profit

15% 20% ?

5% 30% ?

–10% 50% ?

Total

High quality

Medium quality

Low quality

High quality

Medium quality

Low quality

Visit www.mbacase.com to learn more about the Crack the Case System book and C4: Crack the Case Crash Course

[email protected]

Typewritten text

Corrected

Crack the Case · HBS HEC Hong Kong UST IE Madrid INSEAD France INSEAD Singapore Iowa Irvine...

Documents

Transcript of Crack the Case · HBS HEC Hong Kong UST IE Madrid INSEAD France INSEAD Singapore Iowa Irvine...