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CASE INTERVIEW WORKSHOP

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TODAYS AGENDA

1. Introduction
2. A good approach to case interviews 3. Preparation tips and hints

4. Breakout sessions 5. Drinks

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TODAYS AGENDA

1.

Introduction

2. A good approach to case interviews 3. Preparation tips and hints

4. Breakout sessions 5. Drinks

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WHY ARE WE HERE TODAY?

To clarify what we are looking for in candidates To share with you what McKinsey considers a good approach to case interviews To help you assess and improve your level of preparation for the upcoming interviews

To give you the opportunity to meet (more) McKinsey consultants

To kick off the weekend with some drinks!

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WHAT WE LOOK FOR IN INTERVIEWS

Intellectual capacity Practical orientation Quantitative comfort Problem solving Personal impact

Presence Communication Empathy

Leadership

Personal initiative Teamwork Entrepreneurship

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Drive & aspiration

High standards of excellence Energy level Persistence

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WHAT IS A CASE?

Description of business situation

Open-ended Usually taken from a real situation

Designed to measure
Problem solving Tolerance for ambiguity Communication skills

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WHY DO WE USE CASES?

No right background for consulting

Not unlike a consulting situation for new Associate Unfamiliar territory Real-time thinking on your feet Never enough facts or time

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DIFFERENT TYPES OF CASES

Classic cases
Why is the profitability of Company X declining?
Impact on company of a consolidating industry? Should Company X add capacity? How should Company X react to a new competitor? Should Company X enter/exit a new/old market?

Purpose
Broad functional skills
Big-picture perspective Comfort with details, analysis

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TODAYS AGENDA

1. Introduction
2. A good approach to case interviews 3. Preparation tips and hints

4. Breakout sessions 5. Drinks

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A GOOD APPROACH TO CASE INTERVIEWS

Clarify
Ensure complete understanding of business issue

Structure
Develop approach to solve problem

Analyse
Request information to test hypothesis

Conclude
Synthesise findings into recommendations

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CAR MANUFACTURER EXAMPLE

A car manufacturer has approached McKinsey with the following question: Our customers wait up to 8 months to receive their new car. On the other hand we have 8 months inventory. Something must be wrong with our processes, but we dont know what. Can you help us find out why? You are alone at the client site with the clients project leader; he is keen to get your early thoughts on the subject The engagement manager will arrive only tomorrow and you did not get a chance to talk to the partner to find out what his hypothesis is
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A GOOD APPROACH TO CASE INTERVIEWS

Clarify

Structure

Analyse

Conclude

Listen closely to problem definition Paraphrase to confirm problem statement Ask questions to improve understanding Pause to think

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CASE EXAMPLE - CLARIFY

Summarise understanding
If I understand you correctly, the problem is the following Customers wait up to 8 months for their new car to be delivered The manufacturer has 8 months inventory Why?

Ask clarifying questions (you may make yourself notes)

Is inventory finished products, parts before assembly or raw material? Is inventory sitting at the plant or at the car dealers? Are car dealers independent? Is 8 months customer waiting time calculated from car order to delivery?

Pause: Think!
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A GOOD APPROACH TO CASE INTERVIEWS

Clarify

Structure

Analyse

Conclude

Describe your overall approach Break the problem into discrete pieces (MECE*)

State clear hypothesis

Use framework if appropriate

* Mutually exclusive, comprehensively exhaustive

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USE HYPOTHESIS AND STRUCTURE THE PROBLEM

Hypothesis
Part of the 8 months customer maximum waiting time is due to logistics constraints and order processing inefficiencies

Structure the problem

Follow one customer order from sale agreement to delivery
Agree sale
Inventory /transport

Customer orders

Locate car
Delivery

Manufacturing

Car inventory

Inventory is inevitable given current processes because production pattern of different car models is not related to demand

Follow one car from manufacturing to delivery

Manufac- Inventory turing /transport Delivery

Composition of inventory

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STRUCTURING - EXTERNAL vs. INTERNAL

External
Customer demand
Customer segments Industry structure Regulatory environment

Internal
Cost structure
Value chain Processes Organisation Performance over time

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STRUCTURING - 3Cs

Company

What are the competitive advantages of the company? What are costs compared to competitors? What is the split between fixed and variable? What is the level of competitive intensity in the industry? How are the products differentiated? What substitutes exist? What segments exist? How do they make purchase decisions? What specific features do they look for?

Competition

Customers

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STRUCTURING THE BUSINESS SYSTEM

R&D
Product development Innovation

Manufacturing
Cost Quality Speed

Marketing
Pricing Product Place

Distribution
Cost Channel

Responsiveness

Supply

Promotion

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STRUCTURING - FINANCIAL STATEMENT

Income statement
Price

Balance sheet
Assets Cash Volume Investment Receivables Fixed SG&A Inventories Liabilities Payables Long-term debt Other liabilities reserves

Revenues Profits Costs

Property, plant, Shareholders stock equity equipment Common

Variable Labour Materials

Retained earnings

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STRUCTURING PORTER FIVE FORCES

Industry structure
Substitution threats

Competitive position
Suppliers Us Them Barriers to exit Barriers to entry Customer buying factors

External environment Change in government regulations Major economic shifts Changing social concerns
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A GOOD APPROACH TO CASE INTERVIEWS

Clarify

Structure

Analyse

Conclude

Walk the interviewer through your thinking Prioritise issues Ask relevant questions State findings for each analysis

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UNDERSTAND ORDER PROCESSING - EXAMPLE

Agree sale Process

Price Car model Options

Dealer identify car

Manufacturing

Transport/ inventory

Delivery

Local inventory Factory inventory New build required

Centralised in Transport by the U.S. ship Done in Cars shipped batches once a week (1 week)

Dealer check Arrange appointment Deliver

Further analysis
5 options (2 possibilities per option) 32 possibilities One combina- 3 weeks tion of options transportation per batch time Takes >7 month to complete one cycle

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A GOOD APPROACH TO CASE INTERVIEWS

Clarify

Structure

Analyse

Conclude

Summarise the discussion Discuss trade-offs Develop overall recommendations Relate back to problem statement

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CONCLUDE

Synthesise
(The 30 second elevator summary) Your customers wait up to 8 month for their new car while you carry 8 month inventory because manufacturing of batches of car models is not related to demand 5 options implies 32 models Batches of 1 week implies 7 month cycle Add 3 weeks transportation and it makes 8 month maximum waiting time
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Propose actionable recommendations

Manufacture cars in smaller batches Propose fewer options Move to dealer-fitted options (whenever possible) Introduce flexible manufacturing system

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TODAYS AGENDA

1. Introduction
2. A good approach to case interviews 3. Preparation tips and hints

4. Breakout sessions 5. Drinks

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HINTS . . . WHAT TO DO

Relax!! Practice case problem solving before the interview Listen (take notes if you wish) Ask a few questions Structure, structure, structure Explain your thought process Work from hypotheses (guess a little) Gather and analyse key facts (80/20 rule) Push for a conclusion

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HINTS . . . WHAT NOT TO DO

Force a framework that does not fit Jump to a conclusion without explaining your thought process Be sure you have the answer and ignore signals/hints from the interviewer (the answer is obvious . . . ) Wild horses ( . . . and I refuse to change my mind) Hide from the details (or the numbers) Get frustrated Do a post-mortem (in or after interview)

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ENJOY!

Show enthusiasm, interest Go beyond the obvious Do not get stuck in cookie cutter analysis Build your skills/confidence to cover the basics competently (qualifiers) Real order winner is insight and originality

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