industry knowledge for case studies

You are doing a lot of what I say "looking at the leaves" while you need to rise above and look at the whole forest. You cannot, ever, know about all the industries you may be questions on at a case interview. Your job is NOT to know everything about everything but to have the TOOLS to get you there ASAP. What does that mean? Your brain freezes because you've trained it to only answer things that you ALREADY know. You now need to train it to figure out what are the RIGHT questions to ask to get you to a place where you can accurately GUESS at what you don't know. Take your own Q: "what influences variable costs of power plants". I've never read a single document/article on power plants. Here's how I'd approach it.

1. Do I know what variable costs are? Yes. OK, next:

2. Do I know what generally happens to get me power@home? Yes (coal/hydro/solar --> magic happens --> electricity --> national grid --> power lines --> regional grid --> more power lines --> .... -> home). OK, next:

3. Do I know what happens in ANY generic plant/factory? Yes (source --> raw material --> lots of magic --> finished material --> destination). OK, next:

4. Do I know, approx, what the "magic" is? Yes (material, machines, people, etc). OK, next:

Now, TUNE the above to "power plants". Thinking through this, the variable costs are likely going to be:

1. Raw material (if there's no demand, you don't supply == no raw material costs)
2. Transport (see above -- things like people, fuel, etc)
3. Seasonal labor, if applicable (likely -- summers in hot country == more AC; winters in cold countries == more heaters), so more people to dig coal, or transport, etc etc..

That's all I can think of without knowing ins and outs of the industry. You can probably rattle these off without knowing ANYthing about ANY industry and you'll likely be right but your goal is to show you aren't just guessing and have thought through and customized your answer to the industry in question.

So, fun fact: After writing all that above, I just googled up "variable costs of power plants" and came up with this link: https://www.e-education.psu.edu/eme801/node/530 and you'll note, I was almost 100% right. And THAT's how you crack a case interview. Good luck!

Hemant

Hi Alex,

I completely agree with you that the importance of sector knowledge is underestimated in case interviews. While most people would argue it is not as relevant, trust me it makes a difference. Just to give you an idea, I had a very hard time in one of the real life case interviews, simply because I wasn't familiar with the revenue streams of private banking.

I would advise to get familiar with some most common aspects of sectors e.g. revenue streams, main products, consumer behaviour, logistics and key trends. The most common sectors covered in interviews are banking, insurance, consumer goods, energy and TMT.

As mentioned by other experts, you can find some information in certain case books or via a simple google search.

Best of luck!

Dear Alex,

Good point.

Some casebooks address this - Kellog and Wharton for example - they have industry trends, drivers and so on.

If you're not able to find it just PM me and I will send you.

Cheers

Hi Alex,

I actually disagree with Heman a little bit here because I prepare my students on different industries. We discuss ideas and market trends for Banking, Products, Technology etc. and it helps when you bounce ideas, debate - you start to understand how you structure your thinking process.

The first step is read up a few bits about industries - I recommend Economist for general market overview. Wired and Tech crunch for new technologies out there, sometimes FT for market insights.

Prior to interviews - easiest way is obviously getting a coach to bounce ideas and discuss in prep or find a friend that works in industry that you can debate trends with.

It is true that with experience this knowledge is almost automatic but you can definitely prepare also and it doesn't hurt to have an idea about market trends for Pharma, Banks, Tech firms etc.

Hope this helps!