Bain Case: Altes Weingut

Hi Elisey,

I would personally not recommend to use a single framework for all the so-called business situations (M&A, Entry, New product, Operations etc). Although this would help to more easily remember the framework, it would make more difficult to present a customized structure when the interviewer asks the initial question. Moreover, since every business situations has some peculiar key elements (eg how to enter in a market-entry case, price valuation in M&A, etc), this could lead to completely miss one core bucket.

Based on my experience, it thus make sense to make the extra effort to learn 3-4 different structures for business situations (potentially with some elements in common), and be able to present from the beginning something ad hoc when needed.

Moving to the framework per se, using as an example market entry, this is how I would structure it:

1) Goal clarification. It is always good to start with the end in mind – thus what is the specific reason why you want to enter the market? Is it revenues, profits or specific synergies?

2) Industry. There are two macrovariables here.

• Key industry numbers/facts. This includes for the market and potential subsegments the following
  • Growth
  • Size
  • Barriers to entry
• Key industry players. This includes:
  • Customers segmentation
  • Competition
  • Occasionally for some cases: suppliers and substitutes.

You should present this area connecting with the goal, and not purely listing the elements to analyse as if it was a laundry list. The best way to do so is explain how a certain variable will help you to achieve you goal. Eg, if your goal is to increase revenues, don’t simply say “I want to look at growth, size and barriers”, rather “I want to look at growth and size – this will tell me if the market has the potential to provide enough revenues for our client. I would also like to check the barriers, to understand which are the obstacles in entering such a market and thus increase revenues”.

3) Company - Target objective feasibility. Here you want to check the fit between the client and the selected industries.

• Can our specific client reach its objective in the selected market (eg profits, revenues, market share, etc)?
• Are there positive or negative synergies in such industry?

In the first point, you will probably have to go through a profitability/revenue/cost framework, to calculate the effective result.

4) Best way to enter. Once you know the industry is attractive and you can reach you goal, you should consider the entry options.

• Which are the possible ways to enter the market? Usually you should consider (i) starting from scratch; (ii) M&A; (iii) Joint Venture or licencing
• Which option meets better our capabilities to enter the market? Each specific way to enter will require some different capabilities. If you start from scratch you may need skilled people in all the phases of the value chain; if you buy another company you may need less people, but more upfront capital, etc.

5) Risks and next steps. What are the major elements that we should further analyse based on the previous points (eg regulator decision, unexpected competitor reactions, potential wrong pricing in the new market, etc)?

This would include all important market metrics, presenting barriers to entry into the industry. I would not consider the price or the product in the first or second level for a market entry, but rather as a possible third level once reached step 3, when we have to understand if/how we can meet the client's goal.

Hope this helps,

Francesco

The number of hairdressers depends on three main factors: # of haircuts done per year, time spent per haircut and capacity of each hairdresser.

Number of haircuts: Number of haircuts depends on US population that gets a haircut and how often people get a haircut. I will first tackle the population. Obviously, people aged between 0-10 do not get haircuts. Even if they do, it is exceedingly rare. I assume health expectancy is 80 years and population is evenly distributed among each groups. That means, only 87.5% of the US population gets haircuts. I assume there are 160m males and 160m females in the US. That means, 140m males and 140m females gets haircut each year. I also assume males get a haircut once every month and females get once every three months, which means 12 haircuts per year for males and 4 haircuts per year for females.

This means, total number of haircuts per year is 140m * 12 = 1.68 billion for males and 140m * 4 = 560 million for females.

Time per haircut: I will assume a haircut per male will take 30 minutes while it will take 1 hr for females.

Capacity per hairdresser: I will assume there will be on average four hairdressers per shop and each will work for 40 hours per week. Assuming they will work for 50 weeks per year, capacity of each shop is 8000 worker hour.

Obviously, the number of hairdressers is total hours worked / capacity per hairdresser.

Total hours worked: 1.68 billion * 30 minutes (for males) + 560 million * 1 hr (for females) = 0.84 billion worker hours (for males) + 0.56 billion worker hours (for females) = 1.4 billion worker hours

Capacity per hairdresser: I calculated it above to be 8000 worker hours per year.

Number of hairdressers: 1.4 billion worker hours per year / 8000 worker hours per year = 175,000.

There are approximately 175,000 hairdresser shops, or 700,000 individual hairdressers working in the US.

Hi there,

I would start by asking some general questions to have a better feeling on the case:

1) Does our client provides this new service elsewhere? If not, does our client already has the capability to provide it without major investments?

2) How does this particular auction work? (i.e. it is like an "English auction"? / do we have some type of advantage for being an outside bidder? etc)

3) What dictates a good deal in the client's eyes? Does he want to breakeven in a certain timeframe? Does the contract has a timeframe?

Then I would move on to my structure:

I would like to analyze this problem in two steps: first the qualitative side and then the quantitative side. On the qual. side I would look for both external and internal conditions; external being market and competition and the internal being more about our client and the 5G technology we are going to provide.

Basically on the first step, I would like to analyze the size of the potential market, what companies will bid with us and what do they have to offer, I would look for possible barriers to enter and focus on what we can provide as well.

After gathering all the info I would focus on the quantitative side, probably through a breakeven analysis or use some type of target (i.e. client would like to see some return after X years, or the contract is only valid for a certain timeframe and our client would like to breakeven within that time).

--

The analysis I proposed could vary depending on the answers to the 3 first questions. (mostly for the bid)

For perspective, I worked 5.5 years at BCG in Germany and Japan, and did projects all over the globe. I have multiple friends at both McK and Bain. The following are my personal views, and your statement "from different online sources, I am getting different ideas" also holds in "real life" :)

Important:

(1) The differences between all three firms (and even other top managment consultancies) are negligible compared to non-consulting firms/jobs.

(2) All three firms have grown so much, they compete on all levels and no longer specialize in certain topics or industries. Basically, if one of the firms pitch for a certain project, the others could do it equally well.

On to the differences:

- In Europe, there is still a difference between McK/BCG and Bain, which is a bit smaller. So, while any competitive pitch where McK is invited also has BCG pitching (and vice versa), Bain is not always present.

- McK tends to have a more top-down, slightly harsher approach (maybe rooted from operations/cost cutting experience). BCG has a bit more cooperative approach, building support bottom-up together with the client's organization/middle management. Bain is somewhere in the middle.

- I found the smartest/most intelligent people to be at McK, intellectually a tiny notch above the other firms. BCG I found to be a bit more creative/out of the box.

Again, all of this is highly subjective. If you receive an offer from any of the firms, congratulations, that's amazing! :) If you end up getting more than one offer, I would choose the one which feels the best to you personally. I loved BCG, but one of my friends did not like the atmosphere and they somehow didn't connect -- he is now super successful and happy at Bain. During the interview process, you get to know 5-10 consultants over 2 rounds in a professional context. And keep in mind -- they don't just interview, but also try to make a good impression on you! The interview process is actually quite revealing about how working there would be, so going with your gut feel is probably the best way to go.

Good luck and all the best!

Sure, I would be happy to share my own from when I applied. PM me!