Listen carefully the problem

Understand the problem

Set your framework

Evaluate the problem using the

framework

Reach to a conclusion

ACING THE CASE

* Take notes on important things

* Express the problem in your own words

* Take your time but think aloud so the interviewer can hear you

* Use schemes and graphics to express your case approach

* Stay organized!

* Adress issues one at time

* Adress all important issues

* Request x additional information, explaining why

* Perform important analysis

* Test your hypotheses

* Step back periodically

* Use common sense

* Watch cues for the interviewer

* Don´t lose eye contact

* Stay calm - confident

1

2

3

4

5

BUSINESS

PROBLEMS &

STRATEGY

LOGIC PROBLEMS

AND

BRAIN TEASERS

MARKET

SIZING -

ESTIMATIONS

THREE TYPES OF CASES

A B C

INCREASE SALES GROWTH STRATEGY

* Increase Volume

* Increase Prices

* Increase Distribution

* Increase Mrktg Spend

New Products (3)

* Develop

* Buy (M&A)

* Ally (Joint Venture)

New Territories (4)

* Export

* Franchise

* Joint Venture

* Subsidiary (dvlp)

INCREASE PROFITS

* Cut Costs

AND / OR

* Increase Volume

* Increase Prices

* Increase Distribution

* Increase Mrktg Spend

* Pricing Strategy * M&A Analysis

* Develop New Product

* Start New Business

COMPETITIVE STRATEGY CORPORATE STRATEGY

BUSINESS PROBLEMS & STRATEGY FRAMEWORKS

1 2

3 4 5

A

PROFIT

REVENUE COST

P*Q

VARIABLE FIXED

C*Q (C = COGS)

4Ps

* Product

* Price

* Promo (*)

* Place (*)

3Cs

* Customer

* Company

(Rsrc & Cpblt)

* Competition

Awareness

Consideration

Trial

Repurchase

Loyalty

Advocacy

Q = Pnt*AC

AC =Frq*CxO

COMPETITIVE

PERFOMANCE

INTERNAL

PERFOMANCE

Category & Competition

- CAGR Vol / Val – (maturity level)

- MS Vol / Val – (concentrtn - fragmntt)

- Profit % / Substitutes / New entrant

Current Business

Framework

Competitive

Strategy

Suppliers bargaining power

1

Fully Allocated (**) * Materials

* Manufacturing (Wages)

* Distribution / Delivery

* Marketing

* Overhead / SG&A

(**) Industrial company example

New Business

Framework

Actual product x new clients / markets

or

New product x current clients / market

Actual product x new

clients / markets

New Product x current

clients / market

Market Atractivity

* Trends on…

* Size

* Growth (ML)

* Margins

* Regulation

* Supplr brgn pwr

Probab 2 Win

* # Compttrs - MS

* Fragmenttn

* Maturity

* Entry barriers

* Substitutes

* Customer power

Comptr Atractivity

* MS (vol – $)

* Profitability

* Rsrc & Cpblt

* Tangible

* Intangible

* Human

Assess Distance

* Cultural

* Administrativ

* Geographical

* Economic

Entry Methods (2)

Transaction Direct Investment

Exporting Joint Venture

Franchise Subsidiary

M&A Fit

* Sinergy (1+1=3)

* Products

* Customers

* Competition

* Rsrcs & cpblt

* Suppliers

Buy, build or JV?

* Cost - Benefit

Corporate

Strategy

2

M&A Process (in More Detail)

Objectives

Why buy?

Exit

Strategy

Acquisition

Cost

Due Diligence

Analysis

* Market Access

* Diversify Holding

* Preempt Compttn

* Taxes

* ↑ Shrhldr Value

* Synergies

* Fair Price

* Affordability

* Integration costs

* Economic prspctvs

* Hold time

* Possible buyers

* Expctd exit ratio

* Sell whole vs parts

* Market Atractivity

* Company Atractvt

* Probab 2 Win

* Compttrs reaction

* Regulation barriers

M&A Fit

* Sinergy (1+1=3)

* Products

* Customers

* Competition

* Rsrcs & cpblt

* Suppliers

Market Atractivity

* Trends on…

* Size

* Growth (ML)

* Margins

* Regulation

* Supplr brgn pwr

Probab 2 Win

* # Compttrs - MS

* Fragmenttn

* Maturity

* Entry barriers

* Substitutes

* Customer power

Company Atractivity

* MS (vol – $)

* Profitability

* Rsrc & Cpblt

* Tangible

* Intangible

* Human

3

Corporate

Strategy

Pricing Strategies

Competitive

Analysis

Will based

Pricing

Cost based

Pricing

Company

Objectives

* Market maturity

* P/S atribtts - bnfts

* Core / potential

target price sensitvity

* Compttrs prices

* Substitutes prices

* COGs

* Break-even point

* Profitability

* Added value

* Willingness 2 pay

* Market Share

* Profits

4

Competitive

Strategy

Labor Finance

* Cross train workers

* Cut overtime

* 4d x 10h instead 5d x 8h

* Pay decreases x levels

* Convert workers in owners

* Downsizing

* Make customers pay sooner

* Refinance your debt

* Sell nonessential assets

* Hedge currency rates

Production

* Invest in tecnology

* Consolidate production space

to gain scale

* Flexible production lines

* Reduce inventories (JIT)

* Outsource 2nd activities

* Renegotiate with suppliers

* Consolidate suppliers

* Importation

Ways to Cut Costs

5

Competitive

Strategy

MARKET SHARE – REVENUE – PROFITS EVOLUTIONS

(TRICKY RELATIONSHIPS)

Revuene Mshare Profit Reason

Up Up Up Good performance / Ideal situation

Up Up = Sales increase = market growth AND cost increases higher level than sales

Up Up Down Sales increase = market growth BUT cost increases signf. higher level than sales

= Up Up Sales flat AND market contraction AND cost decreases

= Up = Sales flat AND market contraction AND cost stay flat

= Up Down Sales flat AND market contraction BUT cost increases

Down Up Up Sales decrease < market contraction AND cost decreases signf. higher level than sales contraction

Down Up = Sales decrease < market contraction AND cost decreases higher level than sales contraction

Down Up Down Sales decrease < market contraction BUT costs increases >= level than sales contraction

Up = Up Sales increase < market growth AND cost decreases; stay flat or grow proportionally sales

Up = = Sales increase < market growth AND cost increases higher level than sales

Up = Down Sales increase < market growth BUT cost increases signf. higher level than sales

= = Up Sales flat AND market flat AND cost decreases

= = = Sales flat AND market flat AND cost stay flat

= = Down Sales flat AND market flat BUT cost increases

Down = Up Sales contraction < market contraction AND cost decreases signf. higher level than sales contraction

Down = = Sales contraction < market contraction AND cost decreases higher level than sales contraction

Down = Down Sales contraction < market contraction AND cost increases >= level than sales contraction

Up Down Up Sales increase sign < market growth AND cost decreases; stay flat or grow proportionally sales

Up Down = Sales increase sign < market growth AND cost increases higher level than sales

Up Down Down Sales increase sign < market growth BUT cost increases signf. higher level than sales

= Down Up Sales flat AND market growth AND cost decreases

= Down = Sales flat AND market growth AND cost stay flat

= Down Down Sales flat AND market growth BUT cost increases

Down Down Up Sales decrease = market contraction BUT cost decreases signf. higher level than sales contraction

Down Down = Sales decrease = market contraction BUT cost decreases higher level than sales contraction

Down Down Down Really bad performance / Bad situation

Profit expresed in absolute terms, value, not margin rates

MARKET SIZING & ESTIMATION FRAMEWORKS B

Find the driver(s) related to the sizing

* Population (gas stations, newspapers, chewing gum, golf balls, etc)

* Households (piano tuners, light bulbs, garden hoses, dvv rental, etc)

* Other market (fast food market => burger machines, online fashion china

=> offline fashion china).

Use estimations based on common sense…

* For the rates you don´t know (penetration, average spend – average

comsumption) * [AS/ AC = frequency* (spend or consumption) x ocassion)]

Watch Out! Some times advice cases are market sizing cases

undercovered

Break the problem into smaller pieces

Reach to a conclusion

LOGIC PROBLEMS AND BRAIN TEASERS C

* Main goal = look how you handle an unstructured problem.

* Don´t panic, get frustrated, streesed or upset.

* Break the problem logically.

* Some formulas to remember…

Perimeters

* Square: 4a

* Triangle: a+b+c

* Circle: 2*Pi*r

* Rectangle: 2*(a+b)

Volumes

* Cube: a3

* Rectangle prism: a*b*c

* Cylindre: Pi*r2*h

* Pyramid: (b*h)/3

* Sphere: (4/3)*Pi*r3

* Ellipsoid: (4/3)*Pi*r1*r2*r3

Areas

* Square: a2

* Cube: 6a2

* Sphere: 4*Pi*r2

* Rectangle: a*b

* Parallelogram: b*h

* Trapezoid: h/2*(b1+b2)

* Circle: Pi*r2

* Elipse: Pi*r1*r2

* Triangle: (b*h)/2

Sources

Own adaptation of frameworks from…

http://www.casequestions.com/about.cfm

http://www.caseinterview.com/