Hi,

At the beginning of the case, I would ask the clarifying question: Why is the company thinking about this investment now. What is the objective?

If it is the case of the demand growth, I would start same as you with the market and trying to estimate the demand

If it is the case of operational efficiency - I would start with the the analysis of the current operations and the operations in both of the options, rather than the market. For that purpose, I would go through the value chain: Production / transportation / DC / Retail and check how are the new options different in operations from the current ops.

Best

Hello!

Precisely for the high amount of questions (1) asked by my coachees and students and (2) present in this Q&A, I created the “Economic and Financial concepts for MBB interviews”, recently published in PrepLounge’s shop (https://www.preplounge.com/en/shop/prep-guide/economic_and_financial_concepts_for_mbb_interviews).

After +5 years of candidate coaching and university teaching, and after having seen hundreds of cases, I realized that the economic-related knowledge needed to master case interviews is not much, and not complex. However, you need to know where to focus! Hence, I created the guide that I wish I could have had, summarizing the most important economic and financial concepts needed to solve consulting cases, combining key concepts theorical reviews and a hands-on methodology with examples and ad-hoc practice cases.

It focuses on 4 core topics, divided in chapters (each of them ranked in scale of importance, to help you maximize your time in short preparations):

• Economic concepts: Profitability equation, Break even, Valuation methods (economic, market and asset), Payback period, NPV and IRR, + 3 practice cases to put it all together in a practical way. 
• Financial concepts: Balance sheet, Income statement/P&L and Performance ratios (based on sales and based on investment), +1 practice case
• Market structure & pricing: Market types, Perfect competition markets (demand and supply), Willingness to pay, Pricing approaches, Market segmentation and Price elasticity of demand, +1 practice case
• Marketing and Customer Acquisition: Sales funnel, Key marketing metrics (CAC and CLV) and Churn, +1 practice case

Feel free to PM me for disccount codes for the guide, and I hope it helps you rock your interviews! 

Hi Anonymous,

I agree with Vlad that there is a Step 0 missing in the framework: you should clarify the goal as first thing. As an additional element, besides those mentioned by Bruno, I would also consider which level of synergies/cannibalization are there with your current business when computing the effect on revenues and/or costs, according to your objective.

Best,
Francesco