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Qualitative parts of Case Interviews

Benjamin asked on Jul 06, 2019 - 3 answers
Preparing for McKinsey and BCG interviews

Hello! I just got the feedback from my Job Interviews that I did not perform well on the creative part of the case studies. My question is how to best train for this?

Thanks!

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Vlad
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replied on Jul 08, 2019
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Hi,

Here is how you should answer these questions:

1) Ask an interview for a minute to think

2) Think of several buckets of ideas (e.g. scope / value proposition). Remember to think as big as possible

3) Narrow down to each bucket and generate as many ideas as possible (e.g. scope: vertical growth, horizontal growth, new products. Value proposition: additional services, improved quality, etc.)

4) Present the structure (buckets) and then your ideas

Creativity is in direct correlation with your business judgment. Business judjement is directly related to industry knowledge. Focus on the most common industries in the following priority (sorted by probability of geting a case): 1-retail and CPG; 2-airlines; 3-Telecom; 4-banking; 5-natural resources; 6-tech

There are several sources of info to develop industry knowledge:

1) Cases - you simply solve 50-70 cases and get a broad knowledge of different industries, common pitfalls and questions. The key here - find good partners who already had case interviews with MBB companies

2) Company reports, equity reports, IB roadshow docs - usually have a good overview of company and industries. Annual company reports are probably the bast source of information about the industry

3) HBS cases - quite useful, but not sure if there are lot's of them available publically. Probably worth buying

4) Books - one good book about airlines with numbers and industry analysis can give you all needed industry knowledge

5) News, Industry blogs

For each industry, you should understand:

  • Revenue streams
  • Cost structure
  • Margins
  • Key performance indicators
  • Key revenue drivers
  • Industry trends

Also some comments about particular industries:

1) Retail - make sure you understand key retail metrics (P&L lines, same store sales, revenue per square meter and per person, etc) and how distribution works as well as its metrics (share on shelf, etc)

2) Airlines - read about profitability issues, different routing models, cost structure, industry metric s like load factor and make sure you know all possible additional revenue streams

3) Telecom - I would read industry reports and try to understanf how telecom is transforming with internet penetration and tech innovations

4) Banking - you should know the key products in corporate and retail banking and how they earn money (Interest, commision, transactional)

5) PE / M&A - go through available case examples and read about different PE strategies

Good luck!

Francesco
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replied on Jul 07, 2019
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Hi Benjamin,

it is really difficult to provide accurate feedback without additional information on the creative question and your proposed answer. In general, problems with creativity are due to a lack of structure for questions the candidate didn’t see before, which leads to partial/incomplete brainstorming. Therefore, to improve your creativity, you have to follow specific steps to be able to derive creative brainstorming in a structured way, even for unusual questions.

I recommend the following steps to work on that:

  1. Recap the situation until that moment
  2. Ask for one minute of time to structure your thoughts
  3. Identify some key MECE areas. This is something you can do even if you have never seen that question before. Potential divisions include: Number of units - Price per unit (eg to identify the components to reduce costs); Current-New (eg to structure product, customers, distribution channels); Financial - Nonfinancial (eg to compare ways to enter a market). The more you practice cases in the right way, the more you will be able to derive appropriate MECE areas.
  4. Brainstorm inside each of the areas. Your creativity in this area is directly correlated with the number of cases you have done. If you feel weak in one specific industry, the most effective strategy is to go through consulting MBA casebooks (there are many available for free online) and screen the list for the industries where you want to focus. MBA casebooks are not good in terms of the structure of the case but can help to develop creativity.

I provided an example below.

---

Interviewer: So, generally speaking, how would you decrease the cost of raw materials?

Step 1: Recap the situation

Interviewee: So, if I understood correctly, you would like now to move to the elements that could decrease this cost. If it is fine for you, I would like to do a small recap and then move through the key elements that can help to do so. In the beginning, you asked me what brought a decline in profits. We have identified the problem lays in Product A, and in particular in the cost area. We then found out that the main increase in cost was related to raw material.

Interviewer: That’s right.

(Note you may have gained 30 seconds of additional time summing up information)

Step 2: Ask for one minute of time to structure your thoughts

Interviewee: Do you mind if I take 1 minute to think about it?

Interviewer: Please take your time.

Step 3: Identify some key MECE areas

Interviewee: Thanks; I believe there are two key areas to decrease the cost of raw material; we may decrease the cost of each unit, or we may decrease the number of units we buy. I would like now to go a bit deeper in these two components.

(Note that even if you are brainstorming, you are first presenting a list of the MECE areas. This is fundamental to brainstorm correctly)

Step 4: Brainstorm inside each of the areas

Interviewee: Well, in order to decrease the cost per unit we may do a couple of things, keeping in mind we want to maintain revenues at the same level:

  1. we may use lower quality material;
  2. we may negotiate with the supplier;
  3. we may look for someone else as supplier.

In order to decrease the number of units, we may do two things:

  1. we may start to use a more efficient technology for our raw material, so that we have to buy fewer units;
  2. we may also substitute some of the units with other types of materials, ideally cheaper.

---

Hope this helps,

Francesco

Anonymous replied on Jul 06, 2019

Genuine feedback, not a pitch for PrepLounge coaches, but you need a coach!

The creative part is the hardest part and can't really be read in a book. Ultimately, you need to understand the case at hand as if it's a real-life project. Put yourself in the situation, pull all the knowledge you've accumulated in this world, and apply it to the case!

Learning this is something that requires 1) Direct feedback and 2) Oral communication. The forum (1-way and written) is not the best way!