This approach will allow you to crack any type of case study
Solving a case in a case interview is not very different from the approach a consultant uses in real life to solve clients' problems. You will need to:
- Develop an exhaustive structure that will guide you throughout the case interview efficiently. The structure ideally will tell you where to look for the solution of the problem
- Develop a hypothesis early on and prioritize the information you need to gather. Apply the 80/20 rule to figure out which answer to what question will have the biggest impact on the case solution (80/20 rule or Pareto Principle);
- Gather data and know why you need the information and what conclusions can you draw which would ultimately help you get to the solution
In a case interview, your only source for data is the Interviewer. Hence, It is important that you establish an open bi-directional communication and obviously your rapport with the interviewer is very important.
Make sure you ask for only relevant information and ideally let the interviewer know why you need a particular piece of data, be as open and transparent in your thought process as possible, and think out loud to let the interviewer know your thinking process including your current hypothesis.
The Interviewer will likely provide verbal information or charts based on your questions.
The foundation for a successful case is set at the beginning so follow these steps religiously during your interview practice
1. Restate the question and make sure you understand the problem statement by confirming with the interviewer
Understand the problem really well before structuring or asking for data. Do not simply repeat the question but rephrase it in such way that it would avoid misunderstandings. This is important because in consulting, it is crucial to understand the needs of the customers.
2. Clarify the Goals
Ask specific questions to clarify goals. “So our objective is to increase the bottom line. Are there any other objectives I should know of?” If there is more than one objective, do not try to solve them all at once, instead, break the problem into pieces and solve one piece at a time. This will allow you to stay focused.
3. Write out your structure
First, ask your interviewer for a minute to prepare your structure since this part is extremely important and determines whether you will succeed in solving the case. Don’t be afraid of the silence! Practice structuring the case! If you have a good structure that is Mutually Exclusive Collectively Exhaustive (MECE), you do not have to worry about running into dead ends because even if you do, you can dig down an alternative branch that will ultimately help you solve the case. Use an issue tree to help in customizing your structure.
4. Ask questions to understand the trends of the company, industry and product
Ask questions about the firm’s business model, the state of the competition and its substitutes, the firm’s position within the industry, and the product. Make sure to ask about changes (or deltas) [how/if things have changed]. Example categories"
- What is the current situation of the client
- What has changed from previous years
- What are the financial (& non-financial) predictions given the current situation
Don’t be afraid to ask questions about the business model. Even if you have graduated with a business degree, it is impossible to know a company's business model without investigating details. Thus, solving a case based on false assumptions is worse than asking a question you think you should know beforehand. Typically, you'd want to know:
- The size of the company
- Whether it is profitable and growing
- How a business transaction works within the company
- How is the product being produced and what some crucial production steps?
For cases where external factors are decisive (e.g. market entry), you may want to know:
- At which point of the lifecycle is the industry?
- What is its configuration?
- Who are the key players?
- Who are the suppliers?
- What is the client’s position relative to other firms?
- What has changed? Who has left the industry? Who has recently entered the market? Why? Have any of the competitors changed their pricing? What about buying behavior?
- Was there a change in regulations?
- What are the major substitute products?
- What are the future predictions about the market?
(For a systematic view, see Porter’s Five Forces)
In some cases, the crux of the matter is the product. In these cases, you want to know:
- What exactly is the product? What does it do? What are its strengths/weaknesses? What is it mainly used for? Has there been a change in the way it is being used?
- What is the lifecycle of the product? Is it still in the development phase or about to become outdated?
- How is the brand/reputation?
- How do competitors’ products perform in comparison? What are their strengths/weaknesses?
- Who are the customers? How are they segmented? What do they need? Has the need changed recently (e.g. connectivity, “eco”, social)?
- What is the price of the product? How is the price compared to competitors?
- How is the product being promoted? Has a competitor recently changed its promotion activities?
- What are the distribution channels? Is the sales place where the customers are? Have new distribution channels emerged recently?
- What is the service (e.g. after sales) like? How does it compare to competitors? Has there been a change?
- Closely related to the industry part: Are there any new technologies or products on the market?
- What does the product consist of? What are the parts and where are they sourced?
(For a systematic view, see 4 Ps Framework)
A key evaluation criterion is your ability to structure a case and being able to adapt the structure throughout the case
A good case structure is the most important part of the case. Based on your structure, you will need to interpret the new information and draw conclusions from it. Try to segment your information until you have isolated the problem. If the problem is not captured by your structure, you will likely not be able to solve the case. Remember to practice setting up a case structure during your interview preparation.
What the Interviewer expects to see
- An excellent ability to communicate; i.e. stating the conclusion/result first and providing the reason why later on by applying the pyramid principle
- Solid and flexible problem solving skills, which includes the ability to break a problem down into its parts, think qualitatively and quantitatively about the problem and refine your hypothesis according to new information and insights
- Business judgment and logical reasoning
- Thoughtful questions
- Identify the most likely and efficient solution and weigh up the pros and cons and the implementation potential
- Generate actionable recommendations
- Being considerate
Note-taking is key to setting up a good structure: practice the skill!
Structure is a very important part of the case interview. In fact, most candidates who do not get a pass in their interview is because of their inability to structure the problem. Ideally, you should structure your case based on two categories:
- Incoming information which you receive and process
- Outgoing information which you communicate to your case partner
To show your interviewer how you structure, you need to display how you receive and process information mentally and how you would express your thoughts to a potential client. Taking good notes helps in:
- Understanding the structure
- Remembering the structure
- Refering to the structure when required
Your interviewer will usually not give you all the information that is necessary to solve the case.
To be able to spot missing data and be organized, use the following approach:
Organize information and make conclusions
Support conclusions with data analysis
For all three tasks, use a different sheet of paper and never write on the back of these sheets. During stressful situations such as a case interview, you run into a high risk of losing track where the information is if you cannot see everything on one side of the sheets.
The following examples show how the system applies in practice while taking notes:
1. Gather information
You gather information and take notes only at the beginning of the case. Make sure you don’t miss any details, especially if the interviewer is providing you with numerical data.
2. Organize information and make conclusions
The step is extremely crucial (organizing initial information and interpreting it). Here, you would want to build a framework for your approach and structure your hypotheses using an issue tree.
Start testing your hypotheses based on your structure and adapt it according to your results (whether hypothesis is true or not). Use this particular sheet as a guide whenever you run into dead ends and to keep you structured. This approach will help you in clarifying your approach to the interviewer and yourself at every step of the analysis because it forces you to regularly make sub-conclusions and recaps. Use landscape format and as much graphic support as possible and this manner would also demonstrate to the interviewer that you think like a consultant.
3. Support conclusions with data analysis
Make sure you focus on data that is relevant and important to answer the case problem. This will demonstrate your interviewer that you don’t blindly note down everything. Thus, before analyzing anything, it would make sense to paraphrase in your head and write only relevant information. Make sure to take notes in a structured fashion. This will ensure that you will remember the relevant case information and have quick access to it even during a stressful interview. To summarize, before noting down and sharing the information with interviewer, analyze it and determine its relevance.
Finally, you should have a rough sheet only for doing calculations. After finishing your calculations make sure you transfer the result to the corresponding part of the structure on the other sheet.
Follow the 4 commandments to ace your case interview
In this section, we will go over what we call the 4 commandments of case cracking. The 4 commandments will help you get through almost any case in a structured and goal-oriented way.
The 4 commandments:
- Listen & Clarify
- Plan & Hypothesize
- Think and Gather
- Structure & Close
1. Listen & Clarify
- Focus and concentrate!
- Write down EVERY piece information especially numerical data
Pause, paraphrase the problem and clarify all questions
- Example:“So, if I understood you correctly…”
- Double check on objective: “Is reducing production costs our only goal in this case?”. Don’t be afraid to ask - make sure you understood the problem 100%
2. Plan & Hypothesize
Plan the solution structure (roadmap)
- Ask for 1 minute to gather your thoughts
- Identify case type and corresponding framework
- Describe and draw the framework you want to use for the interviewer
- Ideally you should start with the problem you want to solve (e.g. "To assess the market size I will be trying to calculate the number of diapers sold in the US per year")
- Then lay out how you want to get there and where you will use assumptions
- Organize your notes (consultants are supposed to be always “client-ready”)
- Always list a few possible hypotheses and set out with one of them (e.g. "Since you have mentioned that revenues are more or less flat my hypothesis is that the problem is mostly driven by the cost side of the business. If it is ok with you I will start by analyzing this side of the Profit tree first.")
- Start with corresponding branch of the framework
- Refine/rebuild hypothesis as you find out more
3. Think & Gather
Think out loud
- The interviewer is interested but has no crystal ball. You have to tell him what you are thinking
- Sharing your thoughts allows the interviewer to interact. He will give you hints such as nodding if you are on the right track
- If you ever get stuck, the interviewer is in a better position to help you out since he knows where you are in your thought process
Gather data the right way
- ALWAYS segment your data(e.g. using the ABC-analysis)
- Proactively ask for relevant data
- Don’t be too vague in your questions. ("Why are profits declining" is a bad question. "So, profits have been declining. Does the client have any data about recent changes in either the revenues or the cost position of the company?" is better)
- Quantify whenever possible ("By how much have revenues been declining?")
- Go for various trend data (this year vs. last years OR client vs. competition)
- Try to evaluate whether trends have been company-specific or industry-wide
4. Structure & Close
Stay structured throughout the case
- Always refer to the structure you have set up at the beginning of the case
- Remember: be flexible with your structure as the case evolves
- Don’t jump around framework branches without finishing analyzing a branch, always solve problems serially
- Explore branches of your issue tree and eliminate when you reach a deadend
- Summarize findings when switching major branches. This can also be done during the case
- Be MECE!
Close the case properly
- Ask for 30 secs to a minute to gather your thoughts [try to draw them]
- Choose a recommendation and stand by it!
- For consulting projects, it is important to have a clear recommendation
- Your recommendation must be action oriented
- Your interviewer will likely challenge your recommendation (either to see if you can handle pressure or to assess if you really believe in what you are saying): stand by your recommendation (obviously within reasonable limits)
- When communicating your solution, put the most interesting part first: first conclusion/recommendation then justification
- Do not go over the analysis in your recommendation and focus on the important outcome ("Here is what you should do: [...] and this is why: [...]")
- People like 3: give the interviewer 3 reasons
- Case Interviews are an important part of candidate assessment where: communication, problem solving ability, business judgment and data interpretation skills are being evaluated
- They are more standardized and better to prepare for than you might think. How to successfully prepare for a case interview depends a lot on your willingness to PRACTICE. PrepLounge and most Case Interview resources recommend at least 30 case simulations before you go to your first real interview
- You need to get used to a structured approach of problem solving that is similar to how a real life engagement is approached
- Follow the 4 Commandments
- Get a feel and true understanding of the problem and the objective
- Lay out an exhaustive, well thought-through structure
- Build an initial hypothesis and prioritize the different areas
- Gather data based on your hypothesis and priorities
- Evaluate the data keeping in mind your problem and goal
- Track down the root cause and the area which would have the biggest impact
- Develop possible solutions, weigh them and choose the best one. Make sure your solution is based on the data irrespective of whether it is positive or negative. Keep in mind that the best feasible solution is truly the best solution!