How to handle Cases

Situational Interview Questions

Presented by:
Pradeepta
 What ‘I’ will cover in this presentation ?

• Case interview overview

–Purpose
–Types
–Suggested approach
• Successful problem solving
• Types of case interviews and frameworks
 TYPES OF CASES

Business cases
•What will the impact of industryResponses should demonstrate
•Big picture perspective
consolidation be on company X •Ability to structure
•Should company X enter/exit a •Broad functional skills
new/old market?
•Comfort with details, analysis
•How should company X react to
a new entrant?
•Should company X add
capacity?
Responses should demonstrate
Estimation cases •Comfort with ambiguity
•How big would •Ability to structure
•“What is the size •Facility with numbers
•“What do you think annual •Poise
SUGGESTED APPROACH FOR CASES

If required then must do

• Listen to introduction – do not think ahead to Try to avoid or Never do
your answers •Play 20 questions
• Ask few clarifying questions, if necessary; take a •Assume 1 framework
few notes if you like; do not expect every piece of fits all
data to be available •Cover 1 issue without
•Organize your thoughts and structure the problem mentioning and
• Pick one branch to probe, develop hypotheses, prioritizing all key
ask for a few relevant facts, defend/refine issues
hypotheses based on new information, probe •Dig your heels in
further, and describe implications you see •Hide from the details (or
• Pick another branch and continue (Make sure the numbers)
you are prioritizing your responses) •Get frustrated
• Put it all together: try to answer the overall •Conduct a postmortem
question (big picture) with a reasonable, in the interview
actionable conclusion
– Review what you know
– Clarify what you do not understand
– Solidify and tender recommendation
I think this is one approach towards solution
Discuss whether this is right or wrong plzzzzzzzz

State the Disaggregate

problem the issues

Eliminate all
non-key issues

Conduct critical Synthesize

analyses, porpoise
between data and findings and
hypotheses build argument
STEP 1: STATE THE PROBLEM
You must  clearly understand the problem

Characteristics of a good problem statement

 A leading question or firm hypothesis
 Specific not general Clear statement of problem to
be solved or issue to be resolved
 Not a statement of fact or non-disputable assertion
 Actionable
 Focuses on what the decision maker needs to move forward
You are responsible for ensuring the clarity of the problem

You are Paraphrase the problem and

Problem has been
responsible make sure you have it right
clearly stated, and you
for ensuring
understand it
the clarity
of the
problem Problem has NOT been Ask questions to
clearly stated, or you do clarify the issue
not understand it
STEP 2
STEP 2: DISAGGREGATE THE ISSUES
Why use logic trees?
• To break a problem into component parts so that
Problem Statement
•Problem-solving work can be divided into intellectually
manageable pieces
•Priorities can be set among the parts
•Responsibilities can be allocated to individuals

Issues/hyp
• To ensure Issues/hyp
that the integrity Issues/hyp
of the problem solving is maintained
othesis
•Solving othesis
the parts will really solve the problemothesis
•The parts are mutually exclusive and collectively exhaustive
1
(i.e., no over-laps, no gaps)
2 3
 Suggestion

Describe your approach to the interviewer as you proceed.

Do not assume they know what you are thinking!
State your hypotheses as crisply as possible
Only use frameworks if they are appropriate – do not force fit
The ideas are important, not the framework. “I think we
should look at the power of buyers and industry
competitiveness” is better than “I’d like to apply part of the
Porter Five Forces framework”
STEP 3: ELIMINATE ALL NON-KEY ISSUES

Issue 1 Why
Issue 2 •First step in constant, interactive
Problem refinement process
statement
Issue 3
•Focuses your effort on what is most
Issue 4
important

Do’s and don’ts

•Always ask yourself “so what” . . . but also

ask yourself what you might have missed
•Tell the interviewer what you are cutting
and why
STEP 4: CONDUCT CRITICAL ANALYSIS
 Do’s Don’ts
Be hypothesis-driven and end products-
oriented  Do not just “run the numbers” –
ask yourself “what questions am I
“Porpoise” frequently between hypothesis and trying to answer?”
data

Keep the analyses as simple as you can. Be  Do not chase your tail
suspicious of huge linear programs and their ilk

Do order of magnitude estimates before you  Do not miss the forest for the trees
start detailed analyses

Use 80/20 and back-of-envelope thinking

 Beware of “polishing dirt”

Do not be afraid to be creative

 Look for breakthrough thinking
STEP 5: SYNTHESIZE FINDINGS AND BUILD
ARGUMENT
Use situation, complication, Pyramid structure or
resolution format decision tree
Main assertion
Situation State the conditions at point
of problem
Sub-assertion Sub-assertion
Flesh out barriers to
Complication
improving situation Supporting data
Supporting data Supporting data
Lay out possible solution
Resolution
path
Yes Action 1
Question
No Action 2
Question
Yes Action 3
Question
No Action 4
 The Case Analysis
After a lots of study and analysis I found this frame work but
friends their is no premade solutions or strategy for solving
any problem.
Everything depends upon your own preparation(before) and
capability to understand the problem during the death hours
and moreover your inherited strengths to solve cases
logically and mathematically.
My a t t e m p t i s j us t a g ui d e l i n e f o r y o u.
I will be obliged if you will argue during the conversations
because I believe “Knowledge only comes after a matured
and intellect discussion”
Three primary characteristics are always considered

Problem
Problemsolving
solving

Assess if the
Tolerance
Tolerancefor
for
candidate ambiguity
ambiguity
has aptitude
for
Communication
Communication
ski
skills
lls
Case interviews evaluate far more than a candidate’s
functional and technical skills

Skill Key Questions

• Interpersonal skills Is the candidate relaxed and confident?

• Communication Is the candidate engaging? Is the candidate a good listener?

skills Is the candidate asking insightful, clarifying questions?

• Organizational skills Is the candidate good at organizing the information provided?

Is the candidate good at developing a framework for
analyzing the information? Is the candidate stating
assumptions clearly?

• Strategic thinking Is the candidate comfortable discussing the multifunctional

skills aspects of the case? Is the candidate examining the
organizational and cultural issues as well as the functional
and strategic? Is the candidate approaching the problem at
the right level of detail?

• Creativity skills Is the candidate thinking creatively?

• Analytical skills Is the candidate demonstrating analytical horsepower?

TYPES OF CASE INTERVIEWS AND
FRAMEWORKS
 The Cost-Revenue Model

Profit

Revenue Cost

( Price X Quantity )—( Fixed + Variable )

• Price • Customer • Capital • Labor
discrimination segmentation equipment • Materials
• Changes in — New/existin • Land • Energy
pricing g • Buildings
structure — Loyal/
• Viability of switchers
pricing over • Channel
time restrictions or
• Discounts or temporary
couponing disturbances
• Competitor’s • Changing
pricing consumer
demands
 The “Four Cs”

Market Positioning of
a Company

Costs Customers Competitors Channels

• Break down • Segment the • Identify major • Identify relative
the company’s company’s competitors channel
cost structure customer base — Traditional leverage
— Fixed — New/existing — Unexpected — Sources of
— Variable — Loyal/ substitutes advantage
• Estimate the switchers • What are the — Sustain-
competitor’s • Examine competitor’s ability
cost structure company strengths and • Impact of
• Understand profitability by weaknesses channel
trends in cost segment — Profits strategies on
structures — How much do — Costs market
they • Investigate positioning
purchase? market share
— At what
price?
 The “Four Ps”

Product Place (Distribution) Promotion Price

• What are the • How is the • What advertising • How is this
product’s product medium is used to product priced?
differentiating distributed to sell the product?
attributes? consumers? • How are its
• What new • What is the most competitors
• Why does the methods of effective method priced?
consumer distribution are of “getting the
purchase coming available? word out”?
this product?
• Newspaper versus
• Unique packaging • Retail store TV versus radio • Value pricing/
• “Superior cleaning • Warehouse store, ads “Every Day Low
power” Sam’s Club • Retail placement Price”
• Affinity marketing • Mail order — aisle-end • Premium pricing
— “cool people • Internet/electronic displays • Price
drink XX” distribution • New media? discrimination

How effective is this product’s marketing campaign?

 Porter’s Five Forces

Barriers To Entry
• Economies of scale
• Capital costs
• Cost advantage of existing
competitors
• Barriers to exit
• Patents

Supplier Power Market Rivalry Buyer Power

• Number and size of suppliers • Number and size of • Significance of the purchase
• Switching costs/product competitors relative to cost structure
differentiation • Industry growth rate • Switching costs
• Availability of substitutes • Product differentiation factors • Purchase volume
• Possibility of forward • Industry margins/pricing • Threat of backward
integration integration

Substitutes
• Relative price/value of the
substitute compared to
industry’s product
• Cost of switching to substitute
• Buyers’ propensity to switch
 Value Chain

Design and
Suppliers Manufacturing Marketing Sales Distribution Service
Engineering

•Cost •Value Engineer. •Research •Margins •Response

•Quality •Research •Price •Inventory time
•Cycle Time •Development elasticity turns •Enabling
•Technology Timetable •Promotion •Level of technology
•Investment hurdle •Channels support •Labor
•Prototyping •Logistics requirements
network •Satisfaction
•Structure of levels
network
•Delivery/batc
h sizes
 Financial Analysis

• Estimate Future Cash Flow

– Revenues - Costs
• Estimate Discount Rates
– Look at comparables
• Attain Net Present Value (NPV)
– Discount future cash flows at appropriate discount rate
• Consider Other Synergies
– Reasons for go ahead despite negative NPV
 Brain Teasers

• Know Some Basic Statistics

– Country’s Population // Households // Per capita Income
– Employed // Married
– Income Distribution
– Education:
– A basic knowledge about Primary/Secondary/Tertiary sector
– GDP growth / Inflation
– Trend analysis of some particular industries “what is their
future projection for better market share and profitability”
– You must be good in Geography
– GEOPOLITICAL STRATEGY a key for marketing
strategies
 Five general types of cases

Industry
Analysis

Investment/ Market
Divestment Expansion

Profit
Pricing
Improvement
 Industry analysis case studies
Key Points Candidate Should Explore
• Market • Market size and segmentation
• Analyze product demand/trends
• Customer requirements

• Competition • Analyze competitive economics

• Determine levels of
— Product differentiation
— Market integration
— Industry concentration

• Customer/supplier relations • Evaluate negotiation power

• Identify substitutes
• Assess vertical integration

• Barriers to entry/exit • Evaluate companies entering/exiting

• Determine competitor reaction to new entrant
• Analyze economies of scale
• Predict learning curve
• Research government regulations

• Financials • Identify key financials

• Evaluate potential ROI
• Assess risk factors of industry
• Determine fixed and variable costs
 Market expansion case studies
Key Points Candidate Should Explore
• Size of market • Identify data sources for market size
• Understand growth trends

• Understand competitors • Identify current service providers

• Evaluate strengths/weaknesses
• Estimate competitors’ cost structure

• Analyze customer needs • Identify key customer segments and

respective needs
• Identify gaps in current services
• Discuss cost-benefit trade-offs

• Assess client’s capabilities • Identify client’s strengths and weaknesses

• Compare client capability to competition
• Understand client’s cost structure
• Determine potential competitive advantages

• Understand economics • Project expected revenue and costs

• Estimate capital expenditures
• Perform sensitivity analyses
 Profitability case studies
Key Points Candidate Should Explore
• Costs
— Fixed and variable — Plant utilization
— Labor costs — Quality
— Suppliers — Economies of scale
— Materials — Distribution
• Customers
— Price sensitivity
— Segmentation
— Cost-benefit trade-off
• Competition
— Pricing
— Capacity
— Basis of differentiation
• Channels
— Relative leverage
— Market segmentation
— Strategy
 Pricing case studies

Key Points Candidate Should Explore

• Identify the type of market
—Monopoly
—Oligopoly
—Perfect competition
• Issues to address
—Consider what the market will bear
—Think about the long-term effects of pricing decisions
—Think how the competition will respond to changes in pricing
—What is the elasticity of demand? Consider the consumer’s
sensitivity to price changes
—Consider methods to create price discrimination
—Consider using strategic tactics such as creating “loss
leaders” or “traffic builders”
 Investment cases

Key Points Candidate Should Explore

• Sustainability of profits in segment

• Market size and dynamics
• Competitive position
• Product differentiation and standards
• Price dynamics
• Distribution of costs
 Summary of advice...

• Understand the objectives of the case interview; clarify

issues if necessary
• Use notes and take time to collect your thoughts
• Use a standard methodology
• Think “top down”— big picture first
• Focus on identification of issues, developing and testing
hypotheses, and next steps, not just right answers
• Use good communication skills — state and revisit your
assumptions
• Be “coachable” and integrate feedback quickly
• Be confident and relaxed
• Read industry journals
 THANK YOU

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achievement for me.
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