I’m hoping to finish my PhD in a year (okay, it may take longer) and was looking at career options.
One of the options was Management Consulting and the hiring process for such a role involves something called “Case interviews”. I didn’t know much about case interviews and was curious to know what it entails. Thankfully, InPharma team along with Bain and Company organized a workshop to give us a quick introduction to case interviews.
Here is a brief summary/ my takeaways from the workshop :
What is a case interview ?
You are given an interesting business situation and expected to come up with solutions or recommendations. For example: The revenue for a carbonated beverage introduced 3 years ago, went down during the last year. The company now wants you to figure out what is driving this trend and how to fix it.
What is tested ?
Apparently, you are not expected to reach the “correct” solution, but what is tested is how you think and how you communicate. They are testing for analytical skills, structured thinking and good communication skills.
The organizers then went through the above mentioned example case:
Revenue for a product = Price of product * Numbers sold
So you then ask them if they have any information on how the price changed in the last 3 years. They show you a graph of the price and it remains fairly constant. So you infer that the price is not the contributing factor. You then ask about the number of units of the product sold.
Numbers sold = Number of stores in the country * Avg sales per store
Then ask for information to see if one these two variables has changed during the last 3 years. It was revealed that the number of stores didn’t change but the average sales per store changed. Then you try to break that number down.
Avg sales per store = Frequency of customers buying * No of units they purchase each time
It was then revealed that the frequency of the customers buying didn’t change, but the number of units they purchased changed. And the change here coincided with the stores reducing their shelf space allotted for the product (to make space for a competitor’s product). So this is driving the trend of decreasing revenues. Your recommendation for the company would be to increase the shelf space allocated for your product at the retail stores.
We were then introduced to another type of case study: Market estimation. A company wants you to find out what is the total size of the market for Faucets in Germany.
Market size = total number of faucets sold per year * price
Here they shared their approach on how one can come up with a figure:
You want to break this down to residential buildings and non-residential buildings. How many homes are there in Germany ? We start with the population of 80 million. Say the avg family has 3 members. No of homes = 80 million /3.
How many bathrooms and kitchens does an average home have ? Lets say 2 bathrooms and 1 kitchen.
How many faucets per bathroom and kitchen. Lets say 1 each.
No of faucets in homes = (80 million /3) * (2*1 for bathroom + 1*1 for kitchen) = 80 million
How often do people buy a faucet for these buildings ?- only when you build a new one or renovate. Assume every home is renovated once every 20 years. And lets assume the percentage of homes currently being built to be 1 percent.
No of faucets sales per year = 80 million * (1/20) * (1/100) = 40, 000 faucets
You use a similar approach for non-residential buildings and the sum of those two numbers times price would give you the market size.
So the key takeaways are :
- Structure the problem > Draw flow charts and break things down systematically
- Communicate your approach with clarity