What Are Case Interviews & How To Answer ThemBy Tang Kai Long • 10 min read
This is it. All the months (years for some) you spent paving the route to consulting have led you here. You’ve been shortlisted for the interviews. You’re at the door. Make it or break it, the interviews are what’s left standing between you and consulting.
But these aren’t just your typical interviews. Consulting jobs and internships always involve case interviews.
Some people spend years of their life mastering case interviews in an attempt to break into their industry. Others even pay thousands of dollars to get coached or gain access to online training courses that help increase their chances of landing the job.
There’s a lot of information out there if you want to do a deep dive into case interviews, but we’ve condensed the heap of knowledge behind case interview mastery, what you should do, and what you need to know in order to land yourself a consulting job.
What are case interviews?
Case interviews are hypothetical business problems you will have to analyse and solve during the interview process. It is a stimulation of what consultants do on the job, and in that process they assess you to get a sense of how you would perform on the job.
Of course, there are many different types of problems, but they can all be narrowed down to a few major themes.
Types of case interviews
Marketing sizing questions
Market sizing questions require you to determine the size of a market with regard to total revenue or total number of units sold.
Example: If I start a company selling coffee beans in the heart of the town, how much revenue can I look to make every month?
When it comes to market sizing, more than a “correct” answer, the emphasis is on your rationale for doing things in that certain way. Simply put, it has to be logical.
Also, always be prepared to handle any adjustments at the end of the case.
Example: What if instead of coffee beans, we sold red beans instead?
Like a real-life consulting project that is susceptible to changes, interviewers may include an adjustment in the question to test your ability to think on your feet.
Profitability questions are very straight forward, and they only care about one thing – increasing profits. What they are testing you on is how you would go about increasing profits – in the context of this business case.
Example: What are the factors the company should be considering to increase profits?
To increase profitability, you either help businesses increase revenue or reduce costs. With everything provided in the case, you have to make a logical recommendation on how the company can minimise costs (e.g. reduce manpower) and/or increase revenue (e.g. streamline production process).
Market entry questions
Entering a new market is risky, and that’s one of the reasons companies engage consulting firms to advise them on such strategic moves.
An example of a market entry question looks like this: Should the company venture into ride-hailing services right now?
Before answering, there are a number of factors you would have to consider and address – even if the question didn’t explicitly ask for it:
- What is the market size of ride-hailing services?
- Who are the competitors or existing players in the market?
- What are the revenue drivers?
- What are the cost drivers?
- What are the possible risks/implications?
- What competitive advantages does the company have?
- How would you break into it?
Without using a calculator, the purpose of consulting math questions is to ensure you can do basic math. With just a pen and paper, you are expected to provide near-perfect calculations.
Example: Out of the 35,000 employees, only 90 of them are C-suite level. What is the percentage of C-suite executives in this company?
Decisions can be made based on that and how accurate your calculations are serves as a proxy to how proficient you can be as a consultant.
Merger & acquisition
These questions incorporate market sizing, profitability, market study, with a fair share of consulting math.
Example: Should Company A take-over company B?
Although merger and acquisition questions don’t happen as often as the others, they are complex issues which encompass many factors you have to unpack and understand. Tackling such questions requires you to have a comprehensive understanding over the subject. Ultimately, your decision should always result in increased profitability.
They are uncommon, but in case the interviewer throws you a curve ball in the form of a brainteaser, you will need to be prepared.
Examples: How do you explain a vending machine to someone who hasn’t used it before? How many people watched Netflix in the last hour?
After all, you solve these questions the same way you solve a market sizing question – you break down your mental process and explain how you derive at a solution.
How long do case interviews take?
It will take roughly 45 to 60 minutes. The bulk of it, about 30-45 minutes, will be spent on the case interview while the remaining time would be a “personal fit” interview – either before or after the case interview segment.
It’s not enough to just score on the case interview – you need to prove to be a good culture fit for the company. Personal fit questions are similar to what you’ll expect from the typical interviews: Why do you want to join consulting? Could you tell me about a time you failed?
At the end of the interview, like every other, there will be a part for you to ask the interviewer questions. Instead of asking nothing, learn about the intentions behind this question and what you can ask to impress the interviewer.
Also, there would usually be multiple rounds of interviews. The specific number of rounds depends on the specific firm. The format of the different rounds of interviews remain largely similar, but the subsequent rounds are usually conducted by more senior consultants or partners.
Check out The Ultimate Starter Guide To Management Consulting to see the specific number of rounds of interviews & formats for McKinsey, BCG, Bain & Co., Oliver Wyman, and more.
How to answer case interview questions?
Most of the solutions to consulting cases are derived from frameworks.
Frameworks provide a structured methodology to break down cases, which then allows you to effectively target the areas that need to be worked on. Like all solutions, there won’t be a one-size-fit-all framework. Instead, there are many frameworks developed for specific case situations, and having them at your fingertips will greatly augment your ability to come up with sound solutions.
Profit = Revenue – Cost. Breakdown Revenue and Cost respectively and you get something like this:
Start with either revenues or costs. Then, branch downwards until you find the root cause that’s affecting profitability. If you’re on the right track, keep drilling. If you realise that’s not the right branch, switch to another one.
All things considered, figure out the component contributing the most to profitability. While studying the framework, it’s useful to consider the external factors that could be affecting each input (e.g. competition, coronavirus).
The 3 Cs being Company, Competitors, and Clients.
- Company: What it does, what is sells, product or service. Understand the business model (i.e. how revenue is generated). Consider value propositions, competitive advantages, market share, growth rate.
- Competitors: Understand market competitiveness, barriers to entry, competitor’s value propositions and competitive advantages, potential impact on company’s growth.
- Clients: Consumer demographics, needs, purchasing power, market size. How are these expected to change in future?
- Product: What is the selling point? How does it differentiate from competitors?
- Price: What is the market rate? How much are we selling it for? Can we spike it up with our branding?
- Promotion: How can we best market it? Are we targeting the right clientele? Traditional campaigns or social media?
- Place: Where can our clients find our product or service? Physical or online purchase? Delivery or self-collection?
Porter’s 5 forces
Created by Harvard Business School professor Michael Porter, this framework is used to analyse an industry’s likely profitability and the competition surrounding it. It was pointed out that the competitive environment includes more than just competitors.
- Existing competition
How many rivals are there? Who are they? How do their goods/services compare with yours? What is their financial health?
- Buyer power
Is it easy for the customers to drive your prices down? Is there more supply than demand? What is the ratio of customer to supplier? What is their purchasing power? What is their profile? Can they dictate terms?
- Supplier power
Is it easy for the suppliers to drive your prices up? Is there more demand than supply? What is the ratio of suppliers to buyer? How unique is their product/service? Can we switch from one supplier to another? Is it expensive to?
- Threat of substitutes
Can whatever you offer be easily substituted? Are the alternatives becoming popular? Not to be confused with competitor. g If you are BMW, e-scooter brands may be a substitute. Audi is not a substitute, it’s a competitor.
- Threat of new entry
Is it easy to enter this market? The easier it is the shakier your position. How tightly is this market regulated? Compare selling ride-hailing services to automating vehicles. It’s easier to gather a group of drivers to provide service than to automate cars.
BCG Growth-Share Matrix
By categorising products into “Star”, “Question Mark”, “Cash Cow” and “Pet”, companies can then decide where to focus their resources to generate most value while minimising losses.
- Star: These “stars” have high potential and should be significantly invested.
- Question mark: Depending on their chances of becoming stars, “question marks” should either be invested in or discarded.
- Cash cow: Milk these “cash cows” for cash to reinvest.
- Dog: Liquidate, divest, or reposition these “dogs”.
A more straightforward framework than its counterparts, meant to quickly evaluate risks to a business and potential pursuable opportunities. Like the BCG Growth-Share Matrix, the SWOT also uses a 4 quadrant matrix – broken down into external/internal and helpful/harmful.
- Strengths: An internal factor that helps the organisation attain its goals is a strength.
- Weaknesses: Also an internal factor, but is something the organisation has to work on to improve performance.
- Opportunities: An external factor that helps the company improve profitability.
- Threats: Also external, but is something an organisation should look to limit or overcome to minimise losses.
Merger & Acquisition framework
Applied when company A is looking to merge with or acquire Company B, and the two companies are significantly different. Rare situation, but a task highly demanding of CEOs which is why they often outsource it to consultants. Understand:
- The market
Is the market growing? Is it saturated? Is there profitability in the industry and what is the potential competition?
- Company A
What is the rationale for merging with or acquiring? Do they have acquisition experience? Do they have adequate acquisition financing?
- Company B
How attractive is this company as an acquisition target? What is their current and future financial position? Do they have valued assets or capabilities? What is the quality of management team? Is there cultural fit between the 2 companies?
- Synergies and risks
What is the value of company A, company B, and when combined? What is the cost and revenue of the companies, standalone and post-merger? What are the best and worst case scenarios?
To do well in interviews, there is a lot more you can and should do. From knowing how to answer specific questions to knowing what to ask the interviewer. Better prepare yourself for upcoming interviews by checking out these other resources:
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