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Henning

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4

Mini case question at Bain, how to answer?

The biotechnology industry is one of the most profitable industries, whereas airlines have had low returns for decades. Why do you think this is the case?

Any ideas on how to structure/answer this?

Thanks!

The biotechnology industry is one of the most profitable industries, whereas airlines have had low returns for decades. Why do you think this is the case?

Any ideas on how to structure/answer this?

Thanks!

4 answers

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I'd say it depends a bit on the type of interview. I would not see this as a full-blown case, but it might be employed for a simplified interview process, e.g. for one of the business courses for students. To participate there, you'll need to apply and pass an interview, but it's typically a 30min interview with a junior consultant, rather than a series of several interviews with more senior people.

You could deploy a standard strategy framework like the other coaches suggested. For this simplified interview, it might even be enough to demonstrate you business judgement. Talk about general business drivers like

  • Competitive pressure: Airlines offer a commoditized product (getting you from A to B), while biotech companies develop specific drugs and technologies that might not compete with each other directly.
  • Differentiation: The only way for airlines to differentiate is on non-essential services and maybe loyalty cards, but the core service is completely commoditized.
  • Price awareness: Customers that purchase a flight might be looking to do so at the lowest price, while customer that purchase potentially life saving drugs to care about money.
  • Price transparency: You can compare prices for different flights within seconds on your mobile, getting price quotes from different drug manufacturers is much more difficult.

My bottom line is: For these type of cases you might not need a super fitting framework, if you're quick on your feet and can talk about 2-3 key reasons that actually make sense on the fly. If this should be part of a larger case however, I fully agree: You'll need a strong framework upfront.

I'd say it depends a bit on the type of interview. I would not see this as a full-blown case, but it might be employed for a simplified interview process, e.g. for one of the business courses for students. To participate there, you'll need to apply and pass an interview, but it's typically a 30min interview with a junior consultant, rather than a series of several interviews with more senior people.

You could deploy a standard strategy framework like the other coaches suggested. For this simplified interview, it might even be enough to demonstrate you business judgement. Talk about general business drivers like

  • Competitive pressure: Airlines offer a commoditized product (getting you from A to B), while biotech companies develop specific drugs and technologies that might not compete with each other directly.
  • Differentiation: The only way for airlines to differentiate is on non-essential services and maybe loyalty cards, but the core service is completely commoditized.
  • Price awareness: Customers that purchase a flight might be looking to do so at the lowest price, while customer that purchase potentially life saving drugs to care about money.
  • Price transparency: You can compare prices for different flights within seconds on your mobile, getting price quotes from different drug manufacturers is much more difficult.

My bottom line is: For these type of cases you might not need a super fitting framework, if you're quick on your feet and can talk about 2-3 key reasons that actually make sense on the fly. If this should be part of a larger case however, I fully agree: You'll need a strong framework upfront.

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Interesting question!

I would use any framework for industry analysis, such as Porter's Five Forces. Talk about how the strengths of each force and compare/contrast.

Remember, they are looking to see you business judgement, so don't just apply a framework, but use it to make judgements!

In this case, the key point is competition within the industry. In the airline industry, every cost saving is passed on to customers who are very price sensitive and there is low switching costs. Biotech is different since the products are unique and patents protected, so high prices. Can also talk about differences in supplier power, but that is less relevant due to cost structure.

Does that help?

Interesting question!

I would use any framework for industry analysis, such as Porter's Five Forces. Talk about how the strengths of each force and compare/contrast.

Remember, they are looking to see you business judgement, so don't just apply a framework, but use it to make judgements!

In this case, the key point is competition within the industry. In the airline industry, every cost saving is passed on to customers who are very price sensitive and there is low switching costs. Biotech is different since the products are unique and patents protected, so high prices. Can also talk about differences in supplier power, but that is less relevant due to cost structure.

Does that help?

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Hi there,

This isn't a case, so make sure you're not trying to solve a whole case!

However, leverage what you've learned about frameworks. So, structure the problem based on the main drivers that you think exist.

You'll essentially want to look at key market drivers...increasing/declining margins....cost vs revenue driven, price sensitivty of customers, etc.

Hi there,

This isn't a case, so make sure you're not trying to solve a whole case!

However, leverage what you've learned about frameworks. So, structure the problem based on the main drivers that you think exist.

You'll essentially want to look at key market drivers...increasing/declining margins....cost vs revenue driven, price sensitivty of customers, etc.

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Hello!

To be super honest, this sounds like my fist class of competitive strategy -where indeed, they teach you frameworks such as Porters Five Forces, etc-.

A case would never like that, you are always going to have a clear call-to-action.

Best,

Clara

Hello!

To be super honest, this sounds like my fist class of competitive strategy -where indeed, they teach you frameworks such as Porters Five Forces, etc-.

A case would never like that, you are always going to have a clear call-to-action.

Best,

Clara

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