小灶計劃內容

CONSULTINGCASEINTERVIEWPREPARATIONGUIDE

2005-2006RecruitingSeason

-2ndEdition-

December5,2005

BUSINESSSCHOOLCONSULTINGCLUB

?2005MichiganConsultingClub

Contents

Introductiontocases

?

?

Administeringcases

Receivingcases

Thecaselist

Thecases

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Editor’snote

?2005MichiganConsultingClub

Editor’sNote

DearMichiganConsultingClubMember,

Ifyouarereadingthis,thenitislikelyyouareinterestedinpursuingaconsultingcareerupongraduationfrombusinessschool.Inordertoincreaseyourfamiliaritywiththeconsultinginterviewformat,theMichiganConsultingClubhasestablishedamultilateraltrainingprogramfocusingonthedifferentpartsoftherecruitingandinterviewingprocess.Thisbookfocusesonthe‘case-interview’portionoftheconsultinginterviewandistobeusedinconjunctionwithothercase-orientedclubtrainingmaterials.

Theelementstestedinacaseinterviewarecoretofirms’hiringdecisions.Thesecases,ormini-businessproblems,areaglimpseintoaconsultant’s(andoftentheinterviewer’s)lifeastheyarefrequentlytakenfromrealclientexperiences.

Givenpracticeandexperience,casesbecomeanaturalwayofthinkingabouthowyouwouldstructureapproachesandsolutionstonearlyanytypeofproblem. Alongtheway,wehopeyouwillfindyouenjoysolvingproblemsinthismanner,andwouldenjoyperformingthistypeofworkforaliving.

Inordertofacilitateyourpreparation,yourfellowclubmembershaverecordedtheirreal-lifecaseinterviewexperiencesandtheircustomizedframeworksandsolutionelements.Thesecasesactasastrongreferencepointforwhattoexpectduringaconsultinginterview,butareinnowayallencompassing.Sinceeachcasecomesdowntoaconversationbetweentheinterviewerandthecandidate,itisveryplausiblethatonecandidatecouldreceivethesamecasefromtwodifferentinterviewersandhavetwoverydifferentconversationsaboutthebusinessproblem.Infact,weencouragethis.

Finally,youmayhavenoticedthatyouarereadingthiscompilationinlandscapeformat.Thisisintentional.ConsultantsthinkintermsofPowerPointslidesmuchmoreoftenthanessay-styledocuments.Theyalsoconstantlyworktodevisethemostsuccinctwaytoillustrateandframe-outaproblem,necessaryactionsteps,andasolution.Thissaid,the’05-’06preparationguidehasbrokenfromthetraditionofbook-basedcasesbyadoptingPowerPointdeck-basedcases.Youwillfindthisformatdovetailswellwithhowyouwriteyournotesincases,andhowyouwillconveyinformationasaconsultant.

Goodluck,andrememberyourfellowclubmembersareheretohelp,

2005-2006Board

MichiganConsultingClub

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

?2005MichiganConsultingClub

Contents

Editor’snote

Thecaselist

Thecases

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Introductiontocases

Receivingcases

Administeringcases

?2005MichiganConsultingClub

AdministeringCases

Greatcaseexperiencesarenotsolelydeterminedbystrongcandidatescrankingoutamazingissueandfinancial-basedanalyses.Theinterviewer’sinteractionwiththecandidateandabilitytoconveyinformationwillveryeasilychangethestyleofacase.Giventheinterviewer’spositionofpowerinthediscussion,thereareseveralthingstokeepinmindpriorto,during,andafteracaseinterview.

Preparingforinterview

Duringinterview

Afterinterview

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Withthesestepsinmind,youshouldbeabletoconductaconciseandrewardingcaseinterview.

Readthecaseover2-3times

Familiarizeyourselfwiththerelevantnumbersanddetails

Determineyour‘character’

Rushedpartnerordisinterestedclientrepresentative?

Prepareforhowyouwilladdressirrelevantquestionsorrequestsfordatayoudonothave

Makeupfakedataandletcandidategofishing,orletthemknowitisirrelevant?

Tracktime(about25minutesisaverage)-balancefinishingcaseandlettingcandidatestruggle

Prepareforcandidate‘curve-balls’

Candidatescanoftenthinkofverydifferentapproachestocases.Beforediscountingquestionsaswrong,askthecandidatefortheirthinking…ifitmakessense,gowithit

Considerwhataconsultantwouldbelookingforinthecandidate

Presentation:canIputthispersoninfrontofaclient?

Aptitude:Canthispersonaccuratelydothework?

Interest:Doesthispersonlikewhattheyaredoing?

Providefeedback

Thisispossiblythemostcriticalstepofthecaseinterviewprocess

Honestlyletthecandidateknowstrengths,butmoreimportantlyareasforimprovement

Withouthonestfeedbackandconstructivecriticism,itisverydifficulttoimprove

?2005MichiganConsultingClub

Contents

Editor’snote

Thecaselist

Thecases

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Introductiontocases

Administeringcases

Receivingcases

?2005MichiganConsultingClub

ReceivingCases

YouwillhavealotofinstructionaboutgeneralconductandhowtoreceivespecifictypesofcasesduringtheConsultingClub’strainingprogram,howeverthereareseveralthingstoalwayskeepinmindtomaximizethevalueofeachcaseyoureceive.

Becausereceivingcasesisessentiallythecomplimentarypuzzlepiecetoadministeringcases,thesameframeworkisusedbelow:

Preparingforinterview

Duringinterview

Afterinterview

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Goodluck,andremembertohavefun!

Arriveon-timeandprepared

Graphpaperorblankpaper

Penorpencil(bolderisbetter)

Brain

Confidentbusinessetiquetteandpresentationdonotgounnoticed

Itisbeneficialtopracticecaseswithavarietyofinterviewers(MBA1’sand2’s),notlimitingyourpracticegrouptoyourclosestfriends.

Thisdynamicchangewillhelpyouprepareforthevarietyofinterviewersyouwillencounter

Tracktime(about25minutesisaverage)-maintainingpace,notdivingtoodeeptooearly

Setuppaperandthoughtsinafamiliarwayeachtime

Manycandidatesusethe2landscapepagesetupintroducedintrainingmaterials

Don’thesitatetoclarifyissues

Jotdownimportantcasefactsforreference

Takeyourtimewithmath-aslowrightanswerisbetterthanafastwrongone

Bepoliteanddonotlooseyourcool,evenwheninadifficultsituation

Acceptfeedbackgraciously

Theinterviewer,nomatterhowharsh,istryingtohelpyou

Goovercaseonyourownlateron,replayingwhereyoucouldhaveimprovedyourapproach

Preparationisnotinthequantityofcasesprepared,butinthequalityofeachcaseattacked

Ifpracticingwithafellowstudent,offertogivetheintervieweracase!

?2005MichiganConsultingClub

Contents

Editor’snote

Introductiontocases

?

?

Administeringcases

Receivingcases

Thecases

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Thecaselist

?2005MichiganConsultingClub

TheCaseList

1.

2.

3.

4.

5.

6.

7.

8.

9.

CartiresSuperpens

HVACserviceproviderMulti-purposetool

UShealthcareSoftwareproductFrozendoughFertilizerinnovation

Schoolbuses

11

12

14

16

18

20

24

26

28

30

32

34

37

39

41

Sheepauction

Securitysystems

Termitecontrol

Telecomserviceprovider

Smartcardmanufacturer

Insuranceprovider

Applianceinsurance

Autopartsmanufacturer

Electronicsretailer

Trucking

HongKongport

Argentineanbank

Sandwichbags

Giftwrappingpaper

Automobilemanufacturer

43

49

55

60

62

65

69

71

73

76

79

87

89

96

99

Pharmaceutical

Tissuepaper

distribution

Charcuterieprocessor

Musicretailerloyalty

Retailerdiscounting

Bookretailer

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Note:Donotreadallofthesecasesassoonasyoureceivethisguide.Whilereworking‘completed’casesbothaloneandwithingroupsishighlyencouraged,pre-readingcasesremovestheelementofsurprisewhichstemsfromaddressingacaseforthefirsttime,thissensationisverydifficulttoreplicate.

?2005MichiganConsultingClub

Contents

Editor’snote

Introductiontocases

?

?

Administeringcases

Receivingcases

Thecaselist

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Thecases

?2005MichiganConsultingClub

FormatIntroduction

Inthiscasepreparationguideyouwillfindfourtypesofslides.isnotedintheupperleftcorner.

Thetypeofeachslide

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Asevidencedbythelooseframeworkineachcase,youareencouragedtoestablishvariantsonthesecasesforadditionalpractice

SampleSolutionElements

Theseslidessuggestwherethecasecould/shouldgobasedontheinitialcaseinformationandbackupdata.Theseframeworksarebynomeanstheonlypossiblesolution,butshouldprovidetheinterviewersomestructureforwherethecandidateshouldbeheading.Theseslidesaretobekeptbytheinterviewer,butinformationcanbesharedastheinterviewerseesfit.

AdditionalQuestions/InformationforCandidate

Theseslidesareacontinuationofthe‘EstablishingtheCase’slides,eitheraddingmoreinformationtoprovidethecandidate(uponrequestorduetotiming),ortakingthecaseinanewdirection.Theseslidesaretobekeptbytheinterviewer.

CandidateHandout/Assignment

Thishandoutwilleventuallymakeitswaytothecandidate’shands.However,whenthishandoffoccursisatthediscretionoftheinterviewer.Someinterviewersmaychoosetooverwhelmtheircandidatewithalargeamountofinformationearlyontoseethemstruggle,othersmaybereluctanttoprovideinformationunlessaskedspecifically.Assignmentsforthecandidateareexactlythat,andshouldbeexpresslycompletedundertheeyeoftheinterviewer.

EstablishingtheCase

Thisiswheretheinitialbusinessproblemisposedandtheinterviewerisprovidedwithanyadditionalinformationtheycanprovidetothecandidateuponrequest.Theseslidesaretobekeptbytheinterviewer.

?2005MichiganConsultingClub

Case1:CarTires(IofI)

McKinsey&Company,RoundII

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

SampleSolutionMethodology

Thereare70Mcarsontheroad

60Moldcars

10Mnewcars

Tireslastthreeyears

60Minstalledcars/3yrs

20Mcarsneednewtireseachyear

20Mx4tires:80Mtires

10Mnewcars

@4tires/car:40Mtires

@5tires/car:50Mtires

Totaltiressoldeachyear

120Mtires(nospare)

130Mtires(w/spare)

AdditionalInformationtoProvideUponRequest

About10Mnewcarsaresoldeachyear

Carslastabout7yearsbeforeneedingreplacement

Tireslast45Kmiles

Peopledrive15Kmiles/yr

Assumepeoplepurchasenewtireswhenneeded

Assumenogrowthin‘installedcars’

BONUS:Newcarsget5tires(includesspare),oldcarsget4newtires

ProblemStatementNarrative

PleaseestimatethenumberofpassengercartiressoldeachyearintheUnitedStates.

QuickBrainteaserCase

?2005MichiganConsultingClub

Case2:SuperPens(IofII)

A.T.Kearney,RoundI

(1)Ifdetailedexhibitsexist,theywillbereferencedinthisbox,andincludedinfullonthefollowingslide(s)

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Guidanceforinterviewerandinformationprovideduponrequest(1)

Informationtoprovideuponrequest

Penscost$20tomanufactureatcapacity

Thetechnologyisverycompact,verythin,veryreliable,andincrediblysecure;essentiallyfraudulent-proof.

Thingstothinkaboutduringcase

Howdidthecandidatearriveatalistofpotentialclientsandindustries

Didthecandidateuseaspecificframeworkforvettingtargetcustomers,etc.?

Howdidthecandidateconstructavalueproposition?

Askingquestionsaroundcurrentcustomercosts/revenuesandhowthepenwouldimprovethis

Whoistheactualcustomervswhomaybebuying?

i.e.:creditcardcompanies,orindividuals

Problemstatementnarrative

Yourclientisabankvaultmanufacturer,mostlyfocusingonthelargewalk-intype.It’saverymaturebusinessandtheyarethelargestsupplierintheindustry.Inordertodiversifytheirbusinessandprovidegrowth,theclienthasboughtacompanythatspecializesinhightechnologysecuritydevices.Oneofthiscompany’sbiggestandmostpromisingproductswasapenthathastheabilitytodistinguishifthepersonsigninganythingisinfacttheownerofthepen.

Theclientwouldlikeyoutodefinethefollowing:

Whowouldthecustomersofthistechnologybe?

Howdowemarkettothem?

Whatisourvalueproposition?

EstablishingtheCase

?2005MichiganConsultingClub

Case2:SuperPens(IIofII)

A.T.Kearney,RoundI

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

…couldnegateproposition.

Drawbacks:

Needingtokeeptrackofapen

Incompletereach

Expensivereplacement

Expensiveinfrastructure

Adoptioninthecreditcardindustrymaynotbeviable…perhapsanotherindustry?

Swissbanksperhaps?

…andincompletereach…

Penswouldonlyworkatretailestablishments,andwouldbeinsecureoverinternet,phone,andother‘unsigned’transactions

Thesetransactionsareestimatedatalmost50%ofallcreditcardtransactions

However,addedcosts…

$500percardreadingsiteinmodificationsandtrainingtoacceptnewtechnology

100KcardreadersestimatedacrossUnitedStates

…Createspotentialvalue.

$100/yearinfraudpercustomercurrently

$0.01/yearinfraudwithpen

Ifpencosts<$100,thenbeneficialforcardcompanies

…Withviableeconomics…

$20:Productioncostperpen

0.001%:Anticipatedfraudrate

Acreditcardsubstitute

$10,000inannualchargesforeachcardincirculation

1%:Industryacceptedfraudrate100McardsexistacrossUSA

Thisisapotentialcustomerssoolluuttiion,thecasecould(andshould)beadaptedffoorrBanks,Governmeent,Corporations,HighNetWorthIndividuals,Exclusivity/Loyaltyprograms,etc.

Interviewershouldfeelfreetoallowfullmarketestimationscenarriiooiinaallllccaasseessttooalllowffoorrmoorerobustmathematicalanalysis

SampleSolutionElements

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Case3:HVACServiceProvider(IofII)

TheBostonConsultingGroup,RoundI

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Guidanceforinterviewerandinformationprovideduponrequest

Onlyprovideadditionalinformationafterbeingspecificallyaskedbycandidate.

Atlantamarketconsistsof500firms

Averageannualrevenue:$10M

Revenuegrowth:3%

Acquisitioncost:Perpetuitycostofprofits

Costofcapital:13%

Coststructure(%ofrevenues)

Labor:50%,Techniciansare100%utilized

Equipment:25%

Administrative:20%

Profit:remaining5%

Savingsareas:

Labordispatchingefficiency:5%decreaseinlabor

Equipment5%decreasethroughbargainingpower

Admin:1%netdecreaseafterITandadvertisinginvestments

Client’sfinancedepartmentrequiresa3-yrbreak-even

Assumeallcostsavingsoccurimmediately

Assumerevenueswillremainstableforeachtarget

Problemstatementnarrative

YourclientisanenergyfirmthathasalotofextracashandwantstoknowiftheyshouldconsolidateHVAC(heating,ventilationandcooling)servicefirmsintheAtlantaarea.

Theclientwouldliketoknowifthisisaviableinvestmenttheyshouldconsider.

EstablishingtheCase

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Case3:HVACServiceProvider(IIofII)

TheBostonConsultingGroup,RoundI

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Andsuggestimprovementsforbreak-even.

Reducingpurchaseprice

Seekfurthercostimprovements(ITsystems,warrantycosts,etc)

Improverevenuesthroughadvertisingefficiency,brandname,referrals,etc.

Asolidinterviewwilladdressotherpotentialrisks…

Noindustryexperience

Culturalissues(smalloperationspurchasedbylargecompany)

Nationalentrantsoverpoweringeffort

Thenwanttoconductabreak-evenanalysis.

Currentprofit Interestrate Costoffirm Expectedprofit UndiscountedBreak-even

$500M 10% $5M $895K 5.58years

(CoC–growth) (stating:over5yrsisfine)

TOOLONG=NOGO

Candidateshouldcalculateimplicationsofchangingcoststructure…

CostCenter Cost(%rev) Cost($) Savings(%cost) Savings$ NewCost($)

Labor 50% $5M 5% $250K $4.75M

Equipment 25% $2.5M 5% $125K $2.375M

Administrative 20% $2M 1% $20K $1.98MProfits 5% $500K $895KPROFIT

SampleSolutionElements

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Case4:Multi-PurposeTool(IofII)

TheBostonConsultingGroup,RoundI

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Guidanceforinterviewerandinformationprovideduponrequest

Onlyprovideadditionalinformationafterbeingspecificallyaskedbycandidate.

Price:$50,constantovertime

Currentvolume:100Munits/yr

Channel:Hardwareretailer-cannotbreakcontract

Priceelasticityofdemand:0.5(20%reductioninpricewillraisedemand10%&visaversa)

Severalnewcompetitorsinpast2years

Sellingsimilarproductfor$30

Channel:Discountretailers(Wal-Mart,Target)

Problemstatementnarrative

Yourclientisadiversifiedhardwaremanufacturerthatproducesamulti-purposehandtool.Forseveraldecades,yourclientwastheonlycompanytomakesuchatool.Overthepast2years,thecompanyhasseenadeclineinrevenue.

Whatisdrivingthedecline,andwhatcanyourecommendasasolution?

EstablishingtheCase

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Case4:Multi-PurposeTool(IIofII)

TheBostonConsultingGroup,RoundI

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

…Andtakeactiontoimproverevenues.

Intheshortrunwhilecontractsaretiedwithcurrentchannel,increasingpricetoincreaserevenuesto

$5.4Bfrom$5Bisrecommended

Longerterm,theclientshouldinvestigateenteringabroaderarrayofdistributionchannelstoensuremaximumproductreach

Further,theclientshouldexploreapremium-valuepropositiontocompeteinpricereductionmarketandretainmargins

Givencontract,clientmustinvestigateprice…

Priceelasticityofdemandis0.5

Customersnotverypricesensitive

Increasingpriceby20%to$60willreducedemandto90Munits,etc

Follow-upquestion:Whynotincreasepriceby40%?Tofurtherincreaserevenues?

A:Demandmaybenon-linear,andunpredictableatlargepricechanges

…Drilltoincreasedcompetition.

Competitorscompetingonprice($30vs.$50)

Competitorsindifferentchannel

Clientcannotchangechannel

Initialrevenuedriverquestions…

Increasedcompetition?

Yes!

Substituteproducts?

Yes!

Declineinmarketdemand?No,demandishigherthaneverwithdo-it-yourselfwork(ourmarket)increasing

Marketingbudgetreduction?No,beenverystable.

Declineindistributionchannels?No-onestablecontract.

SampleSolutionElements

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Case5:UnitedStatesHealthcare(IofII)

McKinsey&Company,RoundII

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Guidanceforinterviewerandinformationprovideduponrequest

Thereisnoadditionalinformationtoprovide.Thepurposeofthiscaseistotestpoiseandpressuredthought.Ifthecandidatemakesanassertion,play‘devil’sadvocate’andtrytogetthecandidatetoreversehimorherself.Someexamplesmayinclude:

Privatizedvs.socializedmedicine

Subsidizedmedicinedevelopment/salesvs.unsubsidized

Healthcareavailabilityforall

Boutiquehospitalsvs.fullservicehospitals

Preventativevs.reactionarymedicine

ProblemStatementNarrative

IhavejustbeentalkingwithwithRickWagoner,GM’sCEO,abouthiscompany’sskyrocketinghealthcarecosts.GMpaysforthehealthcareofabout1.1Mfamilies,whichequatestoabout$8-9Bor$1500percarsold.Afterawhile,hebegandiscussingtheUnitedStates’healthcareproblemonanationallevel.

TheUSspends15%ofitsGDPonhealthcarewhileJapanspends7-8%andGermanyspends10%.

However,hesaysthereisnoevidencethathealthcareisbetterintheUS:averagelifeexpectancyisactuallydecreasingandabout45Mpeopleareuninsured.

Hewantedmetoexplorepossiblecausesandsolutionsfortheincreasingcosttrendwithdecreasingeffectiveness/quality.Hemadeapointofsayinghedidn'twanttodiscusspolitics,andshiedawayfromfancyframeworksinourdiscussion

Mightyouhelpmethinkaboutwhattotellhim?

EstablishingtheCase

?2005MichiganConsultingClub

Case5:UnitedStatesHealthcare(IIofII)

McKinsey&Company,RoundII

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Lackofhealthcareforlower

class

TheUStreatseverypatientintheERregardlessofinsurance.However,itismuchmoreexpensivetohandlesomethingintheERratherthanwhentheproblemfirstoccurs(regulardoctorvisits,etc)Possiblesolution:Provideadequatehealthcareforlowerclassbeforeproblemsbecomeemergencies.Possiblefree-riderandsocializationdiscussions

Profitmotive

Healthcareprovidersneedtomakelotsofmoney.Theyhaveinvestedincareers,R&D,capital,etc,andneedareturn.ThiscreatesamotiveofwantingtoMANAGEdiseaseratherthanCUREdiseasetomaximizereturn.Allhealthcareplayersmakemoremoneyfromalonger-termcashflowthanonetimetreatment.Discusssocializationvs.currentmodel.

Doctors’abilitytoinduce

demand

Ifalargenumberofdoctorschoosetoliveinaparticulararea(alargecity,forinstance),andtherearenotenoughpatientstosustainanormalpractice,thedoctorscouldorderadditional(andpossiblyunnecessary)teststogenerateadditionalrevenue.

Possiblesolution:feesperpatientratherthanfeesperserviceperformed.Challengeonpracticality

Emergingmodular

Care

Thereisagrowingtrendofwealthycitizensseekingoutspecializedcarefromprivatecenterswithprovidersaccommodatingbyopeningspecializedclinicsthatonlyofferhigh-marginprocedures(heartsurgery),butarenotburdenedbylowmargin,butnecessary,ER’s,etc.Thistakesneededfundsoutoffull-servicefacilities.Discussregulationsorrisks.

Noproactivepre-symptomcare

Nutritionalplanning,exercise,no-smoking,etc.aremuchcheapertopromoteratherthanhavingtodealwithcomplications(heartdisease,diabetes)downtheline.Possiblesolution:government(oremployer)sponsoredprogramspromotingpreventionactivities.Discusshealthcareincentivetodothis…whereisthefinancialreturn?

HigherdrugcostsinUSA

TheUSisessentiallysubsidizingworddrugconsumptionbypayinghigherprices.USexpenditurepaysforthemajorityofR&Dandrisk-premiumcostsforthepharmaindustry.Possiblesolutionsaretopersuadedrugcompaniestochargethesamepriceseverywhere,orthreatenre-importation.Discusslong-termimplicationsonR&Dandcuringdiseases.

Demand

Supply

Thereareanynumberofresponsestothisopen-endedcase,thereforetheinterviewerisencouragedtoallowthecandidatetodrivethecase.Somecommonelementsmayinclude:

SampleSolutionElements

?2005MichiganConsultingClub

Case6:SoftwareProduct(IofIV)

TheBostonConsultingGroup,MockInterview

(1)Ifdetailedexhibitsexist,theywillbereferencedinthisbox,andincludedinfullonthefollowingslide(s)

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Informationprovideduponrequest(1)

Clientgoal:growrevenues

Product:Documentauthoringsoftware(MSWord,etc)

Possibleproductsegmentationconsidered:businessvs.homeproducts

Companyrecentlycompletedmarketstudy:

seenextpageforresults

Currentlyonlyofferproducttobusinessmarket(businesscurveonchart)

Problemstatementnarrative

Yourclientisasoftwaremakerthathasoneproduct.

TheCEOwouldliketoknowwhetherthecompanyshouldoffermultipleproductsinsteadofone.

EstablishingtheCase

?2005MichiganConsultingClub

Case6:SoftwareProduct(IIofIV)

TheBostonConsultingGroup,MockInterview

MarketStudyResults

Product600Price

500

400

300

200

100

0

0

5

10

15

20

25

30

Users(M)

Price

Business

Home

Combined

200

400

500

11M

10M

9M

15M

5M

2M

26M

15M

11M

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

HomeBusinessCombined

CandidateHandout(uponrequest)

?2005MichiganConsultingClub

Case6:SoftwareProduct(IIIofIV)

TheBostonConsultingGroup,MockInterview

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Solutionguide

9Munitsx$500=$4.5Brevenues

Price Home Business Combined200 200x15M=$3B 200x11M=$2.2B $5.2B

400 $2B $4B $6B

500 $1B $4.5B $5.5B

Segmentationshowstherevenuemaxpriceis$400(w/revenueof$6B)ifpricediscriminationisimpossible

Ifpricediscriminationispossible,charge

$500tobusiness,and$200tohomeusers

Additionalquestionsforcandidate

Ifwearecurrentlysellingtobusinessesfor

$500,whatisourtotalrevenue?

Ifwesegmentourdemandandsellseparateproductstoseparatemarkets,whatdoourrevenueslooklike?

Isthereanythingelsetothinkabout?

Usethisslideas‘interviewer’sguide’afterprovidinggraphtocandidate

AdditionalQuestions

?2005MichiganConsultingClub

Case6:SoftwareProduct(IVofIV)

TheBostonConsultingGroup,MockInterview

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

ComplimentaryProducts

Ratherthanseparatingcurrentproductintotwoseparateproducts-

Clientcouldofferaseriesofcomplimentaryproductstotheircoreproduct,addingincrementalrevenueandsegmentingtheircustomersbasedonhowmanyadditionalfeaturestheywanted(i.e.:addinginterrelatedprogramsataprice)

Licensing

Relatedtotheproduct/marketdifferentiationissue,thefirmcouldgainincrementalrevenuebyeither:

Establishingseparateproductsales/licensingcostsforbusiness/homeusers($200for1-3licenses,and$550foradditional,etc)

Approachingothervendorsforbundlingdealstoattachproductwithotherproducts

ProductDifferentiation/Cannibalization

Little/noabilitytocreatedifferentproductsfordifferentmarketscouldleadtoprice-ledcross-segmentproductcannibalization

Creatingswitchingbarrierswouldallowcompanytodifferentiatebetweenproductlineswithoutconcernforcannibalization

IncrementalCosts

Thecandidatemaydiscusselementsneededtocreatetwoversionsoftheproduct-thesemayinclude:

Programming

Testing/QA

Packaging

Sales/marketing

Distribution

Theinterviewcangointhisdirection,askingthecandidatetooutlineaviablecoststructurepersegment

SampleSolutionElements

?2005MichiganConsultingClub

Case7:FrozenDough(IofII)

A.T.Kearney,RoundI

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2005-2006MICHIGANCONSULTINGCASEINTERVIEWPREPARATIONGUIDE

Informationprovideduponrequ