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Where To Play & How To Win (!

)
Case Interview Guide
By Nebula
Version - 2012

What to do at the start of a case?

DONT
PANIC
(In Large Friendly Letters)

Seriously.
Dont Panic.

Getting Through A Case Interview


Take a moment and see if you understood the case correctly:

Verify facts you think you might have missed

Ask for clarifications and clear any ambiguities (When you say telecom company,
are they a service provider or are they in the hardware business?)

Ask the interviewer for a couple of minutes to collect your thoughts (You can actually tell the
interviewer Ill take a couple of minutes to collet my thoughts)
WRITE down a structure you can follow to analyze the case; but remember to modify any
structure to suit the case given to you. A cookie-cutter approach doesnt work!
Proceed with the analysis of the case ask for inputs from the interviewer wherever
necessary and you can check if your assumptions make sense as well. (Dont overdo it
though!)
It is important to have a recommendation at the end of the analysis on what the company
should do next. Be sure you can justify what your are recommending to the client at the end.
Communicating your thoughts/analyses is important, so keep it simple. Fancy words and
complicated jargon do not make of good analysis.
Last and most important Enjoy the process

Case Study Methodologies

Profitability
Growth
Market Entry
M&A

Profitability

Profit

Revenues

Costs

Profitability : Revenues [1/2]

Variety
Understand the product
offered by the company

Value (Price)

Volume

mix

Understand the different target


segments that the different
products of the company cater to

Competition

Competitive Response
Cost +
Determine the Supply-Demand in the
market for the product, and see the
flexibility the company has to change
prices
Construct a pay-off matrix to
determine the best course of action
that a company should follow given
different responses by competitors to
changes in price by a company

Check if product is competitively priced,


if not try and understand the reason
behind why it is priced differently

Check the margins the product is


making based on the cost incurred in
manufacturing the product
Check for recent changes in the cost
structure which might impact this sort of
pricing
Product should be priced according to
the value a customer derives from the
product

Value Based

Different companies are increasingly


adopting this method of pricing, it is
critical for the company to correctly
communicate to its customers the value
they offer, else price will not be accepted

Profitability : Revenues [2/2]


Variety

Market

x
x

Market Position

Understand the macro-trends


in the market and how they will
influence the market in the
future (includes megatrends)

Understand the market


position of the player
Determine the power a
player has in the market

Understand PESTLE scenario


Political, Economical, Social,
Technological,
Legal
and
Environmental factors

Product
Brand
Quality of the
product
Competitive
advantage
Packaging
(SKU) and
Imaging on the
product

Volume

Market Share

Determine size and growth of


the market (past growth as well
as future growth)

Broadly use Porters 5 Forces


Customers
Suppliers
Competitors
Substitutes
Entry Barriers

Value (Price)

Buying Process

Segmentation
1.
2.
3.
4.

Product
Geography
Demographics
Occasion / Place of
Consumption

Price
As determined
earlier
Also check for
the signalling of
quality by the
price (luxury
products have to
priced at a
premium)

1.
2.
3.
4.
5.

Promotion
Advertising
(B2C)
Trade Discounts
(B2B)
Must ensure
both medium and
message are
correct

Want generation
Information search
Evaluation
Purchase
Post-purchase
evaluation

Place
Types of
distribution
channels
Check
Availability,
Visibility and
Freshness

Profitability : Costs
Fixed Costs
Machinery depreciation

Marketing costs advertising

Administrative costs

Capital structure Debt vs. Equity

Rent factories and corporate office

Technology change and up gradation

Variable Costs
Flow of Material
Distributors & Retailers

Manufacturer

Raw
Labour
Energy
Inventory
Material
Cost of Raw NonFuel petrol, Storage costs
Material itself managerial
diesel, coal,
better
use
staff
natural gas
forecasting
alternatives
needed
Electricity
Transportatio
captive,
n and Storage
bought
costs

Packaging

Distribution

Margins

Discounts

Smaller
Warehousing Given to
Trade
packaging
rationalize
wholesaler
discounts
can reduce
warehouses
and retailers Discounts
costs and can Transportatio operate own given to
transport
n rationalize points of sale customers
more at a time points of sale

Flow of Information

Customers

Post-Sales
Service
Installation
Maintenance
Spare parts
Labour
Replacement
(warranties)

Profitability
Growth
Market Entry
M&A

Growth
Objective

Understand the reason why the company is seeking new avenues of growth; may include Hedging risks, Current market declining , Attractive opportunity in other markets, Eroding market
share, etc.

PRODUCT

New

MARKET

Old

New
Introduce new products which are adjacent to
existing products or complementary to existing
products
Adjacent You sell Washing machines,
start selling other home appliances
Complementary You sell shaving razors,
introduce aftershave
Upgrade existing product and package as a new
product new and improved
Diversification Vertical and Horizontal
integration
Vertical integration Buy players in your
value chain (suppliers, distributors)
Horizontal integration Buy out
competitors

How?

Old
Variety Expand
product lines
Value Change
pricing; make same
customer spend more
(new uses)
Volume Increased
volume within segment
or in new segments
(gain market share)

Place Increase
where product is sold
Product sell more
stuff
Promotion advertise
to increase sales

Enter new geographies try and enter


geographies which are similar to the old market
Target new segments for the same product
Always adapt the new product to suit the market it
is introduced in

Each of the above options has its own way of implementation, also its important to consider
acquisition as a way of growth in each of the above options

Profitability
Growth
Market Entry
M&A

Market Entry
Objective

Recommend whether to enter a given market, product or geographic; may include industry/market
attractiveness, consumer behaviour, operational requirements

Step 1: Strategic
Fit

Why do you want to enter?


Does it fit in with long term strategy of the firm?

Understand the Market: Market size? Growth?


Typical Margins? Present trends?

Understand Customer:
Who is the customer (Segment) ?
Will he buy my product? - Value proposition I
have to offer
What are the substitutes for my offering?
Entry Barriers:
Suppliers Distribution Regulations
IPR
Capital
Economies of
Scale

Step 2: Market
Attractiveness

1
How?

Start from
scratch

OR

Step by Step

Competition Analysis: Size and number of major


competitors, present or future

3
JV

Acquire

Profitability
Growth
Market Entry
M&A

M&A
Why?

Market
Analysis

What are your goals and objectives for doing the M&A ?
Possible reasons - Growth, access to technology, diversification, market access, pre-empt
competition, synergies (cost, distribution network economies of scale and scope)

Especially important if it is an acquisition in a new geography or acquiring a company in a new


category
Follow steps of Market Entry

Target
Company
Analysis

Context Conduct a market analysis (5 Forces usually works well) and figure out the PESTLE
scenario (Political, Economical, Social, Technological, Legal and Environmental factors)
Company Capabilities of the company need to be understood Eg. Manufacturing processes, new
technologies, R&D, Marketing, Sales and Distribution, etc.
Customer
Refer Market Entry
Competition

How Much?

What is the company being valued at?


How is the valuation being done? What are the intangibles (Eg. Brand reputation) being valued at?
Comparable ratios or DCF or any other? (NOT expected to know the nitty-gritties of valuation,
however helps if you know the basics

Can I Do It?

Can the company afford the acquisition? How can the acquisition be financed?
Post-merger integration Roles of senior management in both companies? Cost synergies?
Integrate cultures?

Who Is Nebula?
A few PGP-2s trying to help

Ritesh Agarwal

Pushkar Aggarwal

Sudhanva Rao M.

Summer Internship BCG

Summer Internship Bain

Summer Internship BCG

End of Document

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