SDA Bocconi M&CC_ Consultung Guide 2011

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MBA Consulting Guide 2011 A guide for MBAs seeking a career in Management Consulting

Prepared by the MBA 36 Management & Consulting Club

SDA Bocconi Management & Consulting Club c/o SDA Bocconi School of Management Via Balilla, 18 - 20136 Milano - Italy Fax +39 02 5836.3275 - email: [email protected]

Content 1



Consulting Recruitment Timeline..........................................................3


Career Development Service (CDS)......................................................7


The Management & Consulting Club..................................................10


Consulting Industry Overview.............................................................15


Profiles of Consulting Firm..................................................................26


Cover Letter and Resume...................................................................40


Focus Interview...................................................................................48


Case frameworks................................................................................54


Case types..........................................................................................65


Interview Case Examples....................................................................75


Insider Views from MBA36................................................................104


Online Resources..............................................................................111


Consulting Club History....................................................................113

1 Introduction Traditionally, up to one third of SDA







MBA in

consulting after graduation. Even more flirt with the idea of becoming a management consultant at the start of the





remains a high-profile and high-paying field that offers the opportunity to take on a lot of responsibility right out of the business school, leveraging ones industry and MBA skills and benefiting from a high learning curve. In the light of this, the SDA Bocconi Management & Consulting Club (MCC) is pleased to present you the 2011 edition of its MBA Consulting Guide. The Objective of this booklet is to support new MBA candidates who consider a career in consulting with a straight forward starting point for their own research, preparation and application efforts. Based on this, the guide aims to address some key questions you might have: 1) What is the MBA Recruitment timeline and process, and which are the activities from the Career Development Service and the Management & Consulting Club (see Chapters 2-4)? 2) What are the structure, history, and current trends in the consulting industry? Which are the main players? To whom can I reach out from the SDA Bocconi network to get some first hand insights on a specific consulting firm (see Chapters 5 and 6)? 3) Which things should I consider when


my CV


Motivation Letter? Are there some “best practice samples” from previous MBA candidates (see Chapter 7)?


4) How will the recruitment interview look like? Which are the most important case study types and frameworks I should be aware of before the interview? Are there some case study examples and blueprint solutions available? And finally, are there some field reports from previous MBA candidates on their interview experiences (see Chapter 8-11)? The idea to develop this guide has been driven by the SDA Bocconi Management & Consulting Club members based on their own experiences and burning questions during the MBA program. However, this document would not have been possible without the support from the Career Development Service and of course the network of SDA Bocconi MBA Alumni. We would like to thank anyone who contributed to the MBA Consulting Guide. The MCC would also like to invite you to find additional useful material





( and to contribute to a vivid network by joining our linked in group: Management Consulting Club - SDA Bocconi.

Management & Consulting Club Board, September 2011


2 Consulting Recruitment Timeline Overall Recruitment Timeline Management consulting is traditionally one of the most attractive job opportunities for MBA candidates. Anyone interested in consulting will have to prepare well in advance to the summer internship recruitment phase (January – March), starting from October right after the MBA kick-off. The below figure provides an overview of the overall recruitment timeline and the key activities, grouped into four phases. Make sure that you initiate your self preparation (CV, Motivation Letter, and Case Study Interviews) before January, since the selection process for internships will start right after the Christmas break and you will have little time given the tight schedule of the second MBA term. While internships from June to August are usually a great opportunity to both understand whether consulting is the right choice for you and to receive offers for permanent jobs. However, if your application for an internship has not been successful, you still have the chance with to apply for permanent jobs from September onwards.


SDA Bocconi MBA Consulting Recruitment Timeline

Typical Application Process Given the high number of applications, consulting companies have developed very demanding and well structured recruitment processes, whereby technical competencies, communication and teamwork abilities, as well as personal fit are tested. The recruitment process does not change significantly whether you apply for an internship or permanent position. The below figure highlights the key phases for applications in Management Consulting, which change only gradually across different companies and regions.


Typical Consulting Recruitment process

Source: Adapted from BCG

Key preparation tips 

Meet the Career Development Service in October/November to share your professional experiences, job expectations and to learn more about the recruitment process

Do a self assessment of your strengths, weaknesses, career progress








Development Coach. 

Consulting Case Study Competitions are a great chance to get to know a company and understand whether consulting is the right choice for you

Every consultant firm is different: Do your homework and make a shortlist of targeted consulting companies based on its positioning, your profile and expectations

Start preparing your CV and Motivation before January and ask CDS, Development Coach, and your MBA fellows for feedback. Adapt the cover letter to the firm specifics!








frameworks, hints & tricks before January. This guide and the Management & Consulting Club web space provide a good starting point 

Make sure you attend mock interview sessions organized by companies and MCC

Attend the networking and company events on campus to make first hand insights and references that you can refer to in your motivation letter and during the interviews.


3 Career Development Service (CDS) Mission Providing MBA candidates with the tools and knowledge needed to design a successful career development strategy and bridging them into an international network of top MBA recruiters.

Who we are and what we do 

A team of professionals dedicated to full-time MBA students’ career development

A competence center helping you to gain a deeper understanding of the MBA job market, its rules and its major players

An established network of relationships within the world of international MBA recruiters

Expertise in sector specific career advising

A team that works with you to facilitate the best possible post-MBA career development and employment conditions

The CDS Consulting Practice The Consulting practice is your counterpart within the Career Development Service Team if you can imagine a post MBA career in the consulting industry. The practice is lead by Ilaria Mencolini, who will also act as your first point of contact.


Key activities & events of the CDS Management Consulting Practice

Source: SDA Bocconi Career Development Service

Ilaria Mencolini, Career Development Service Practice Leader for the Management Consulting, Luxury/Fashion, FMCG industries “Consulting is traditionally one of the most attractive but also most competitive industries on the radar screen of MBA candidates. One of the key success factors to successfully apply with one of the top consulting firms is an early and in depth preparation for the case interviews. While the CDS will organize a consulting mockinterview session with representatives from a top firm, individual drive and commitment will be crucial for the challenging selection process.”


Consulting recruiters at SDA Bocconi Overall, the share of SDA Bocconi MBA candidates that have found a postMBA full time employment in the consulting sector over the last three years has been between 34% (high end) and 22% (low end). In terms of the companies, the following overview provides you with the full list of consulting firms that have been part of the SDA Bocconi recruitment network in the last three years (MBA34 – MBA36). Hence, those companies have posted job opportunities via the CDS at least once over the last three years, and might have also visited the school to conduct on campus presentations (NB: This does not mean that all of these companies have necessarily hired SDA MBA candidates at the end of the campaign). Note: companies that have hired MBAs for summer internships in Consulting over the last three years have been underlined. Consulting companies recruiting at SDA Bocconi (2009-2011)



4 The Management & Consulting Club Mission The Management & Consulting Club is managed by MBA students and provides valuable activities for the students. The focus of the activities lies on consulting and actual management issues since these are very relevant for consultants. It is an open platform for everybody, who is interested and it is also open to the other master programs.

Activities of the Club The following summarizes the main categories of the club’s activities: a) Provide support for consulting applications The management consulting club wants to assist students interested in management consulting. It therefore organizes mock interviews with fellow students, mock interviews with consulting firms and it collects relevant material in an online platform (Management & Consulting Club Webspace). b) Generate opportunities for networking & knowledge transfer Networking is a crucial topic for MBAs - that’s why the management consulting club organizes events with firms. In these events, students can talk to managers and alumni in order to develop their network. Furthermore, it facilitates the exchange of actual knowledge and keeps students up to date. Furthermore, a LinkedIn group (SDA Bocconi Management & Consulting Club) has been established as a platform for networking between past and actual consulting club members. c) Facilitate the participation in relevant events (case study competitions etc.)


Another activity is the organization of participation in relevant events. There are, for example, several case study competitions, which are important for the visibility of the school and which are a great learning experience for the students. The club should facilitate the participation in these events. In MBA 36, we were working on these competitions:


A.T. Kearney Global Prize Competition

Roland Berger IESE Case Competition

MIXX Contest

d) Manage the knowledge and generate continuous improvement Last but not least, the management consulting club committed itself to manage the knowledge in a proper way in order to conserve it for the following generations. This contains the handover to the new club management, an online platform for a collection of materials and, of course, this guide.

The Activities of the Club MBA 36 In the 36th edition the management consulting club managed to provide some interesting opportunities to enrich the MBA experience. The following activities have been carried out by now: 









participants): here we gathered all the students with consulting experience and all students interested in consulting in order to have an informal exchange of ideas and tips 

22. Dec 2011 - Debrief of A.T. Kearney Case Competition (ca. 10 participants): after the A.T. Kearney Global Prize Competition, the participating team of the finals debriefed the outcomes and the experience after meeting with the other schools

13. Jan 2011 - Organization Meeting for Case Training (ca. 20 participants): in this meeting, all people who wanted to practice consulting case interviews met to agree the preparation of cases and to organize the practice sessions

15. Jan 2011 - Mock Interviews with Marco Grieco BCG (ca. 20 participants): the consulting club organized a mock interview session with a BCG employee and Bocconi MBA Alumnus


19. Jan 2011 - First 1:1 Case Interview Session (ca. 20 participants): we carried out case interviews with cases from literature and own prepared cases throughout the whole day

22. Jan 2011 - Second 1:1 Case Interview Session (ca. 20 participants): additional practice for consulting interviews

27. Jan 2011 - Bain & Company Case Interview Session (ca. 20 participants): another case interview with a Bainie

05. Mar 2011 - Leadership Conference @ Spazio Gancia (ca. 80 participants): together with the DiVino club, we organized a leadership conference with top executives from 8 leading firms (BAIN&CO, GANCIA,











GENERALE) of different industries. The event took place at the rooftop terrace of Gancia, the Spazio Gancia and was followed by an aperitivo. 

19. May 2011 - How to Use Consulting Event (ca. 30 participants): in this event, we discussed with McKinsey, Nestle, Continental, Pirelli and UniCredit how Consulting can be used in international corporations

15. September 2011 – 1:1 Case Interview Session (ca. 15 participants): a final practice session to prepare for job interviews for post MBA positions in consulting.

22. September 2011 – Delivering Financial Services in Sub Saharan Africa (ca. 30 participants): in collaboration with the Career Development Service, the Management & Consulting Club invited a Partner from Roland Berger Strategy Consultants to speak about a recent study conducted to analyze market potential and trends in Sub Saharan Africa.

October 2011 – The “Bocconi” Case (core team of 5 MBA36 candidates, survey among all students, focus interviews with selected students):

in this project, we decided to deliver a more detailed

feedback to the direction of SDA Bocconi. We developed some hypotheses of how to improve the MBA and checked these with surveys and focus interviews. The outcome was presented to the director and selected board members. 14

July – October 2011 – Consulting Guide (whole Mgmt Consulting Club): in order to improve knowledge management and provide targeted information for students, we developed this consulting guide


The following timeline summarizes the activities in the application phase in order to give a more comprehensive overview:



5 Consulting Industry Overview Industry structure and major players Management







expertise to leaders of corporations, governments, and non profit organizations. Management consultants are brought in for their neutral outsider approach and sometimes have more overall industry experience than the client itself. Because of this outsider approach, many firms are readily able to offer "best practices" from the industry as a whole and market their own proprietary methodologies, which offer strategies to help transform









management consultant works on projects such as helping companies assess its problems, improve operational efficiency, maximize profits, and design a business plan for the future. However, consulting is a very broad term for a huge and diverse industry landscape that can be segmented in many different ways. Individual industry/functional focus, type of projects, salary level and long term career outlook can vary among the different types of consultancies. The following overview provides a segmentation of the industry according to focus and size. Although neither exhaustive nor fully accurate, this matrix provides a useful summary of the best known companies in each category.


Segmentation of the Consulting Industry

Source:, BCG

 Global Strategy Firms : Most MBA graduates are hired by so-called Global Strategy Firms. The bulk of these firms’ work consists of providing strategic and operational advice to executives in top companies. Teams are rather small (2-4 members) and salary levels higher compared to other types of consulting companies. Despite the high demand for new joiners, the recruiting process is very selective: wanted are high potential candidates with personal fit that master the case study interviews  Global Operations/IT Firms: These consulting firms, sometimes also called Full Service Providers, typically take on larger projects and design, implement, and manage their client’s needs very closely (often IT, Outsourcing, or Organizational Restructuring projects). These projects require larger teams at lower rates compared to Global Strategy Firms. Consultants have a stronger focus on the









 Boutiques: These are smaller firms that have specialized along industries and/or functional areas. Although smaller in terms of number of consultants, some of these firms have significant reputation and are considered as alternatives to the most well-known firms for certain projects. The smaller workforce might lead to a higher share of international projects for each consultant. In order to identify the leading Consulting Companies, a number of parameters such as industry and functional focus, geography, number of consultants, revenues, earnings per consultant, thought leadership etc. need to be taken into account. The following list includes some of the major players in Europe based on surveys conducted by However, since it is rather impossible to provide a one-fits-all ranking this overview should not be considered more than a starting point for your own research according to your individual preferences. Vault Europe Consulting Firms Ranking 2011 (Prestige)


Industry history and recent trends Management consulting grew in the US with the rise of management as a unique field of study and looks back on more than 100 years of history. 20

While the consulting industry seems pretty fragmented at first sight, many of today’s major players have common routs and never stopped to be part of a closed network of professionals, clients, and alumni.

Evolution tree of the consulting industry

Source: BCG

The first management consulting firm was Arthur D. Little, founded in 1886 by the MIT professor of the same name. Booz Allen Hamilton was founded by Edwin G. Booz, a graduate of the Kellogg School of Management at Northwestern University, in 1914 as a management consultancy and the first to serve both industry and government clients. McKinsey & Company, founded in Chicago in 1926 by James O. McKinsey, was to become the first pure Management Consultancy and the first to hire MBA graduates from top business schools. In 1937, Andrew T. Kearny, an original McKinsey partner, broke off and founded A.T. Kearney. The first wave of growth in the consulting industry was triggered by the Glass-Steagall Banking Act in the 1930s, and was driven by demand 21

for advice on finance, strategy, and organisation. From the 1950s onwards consultancies not only expanded their activities considerably in the United States but also opened offices in Europe and later in Asia and South America. After World War II, a number of new management consulting firms formed, most notably The Boston Consulting Group, founded in 1963, which brought a rigorous analytical approach to the study of management and strategy. Work done at The Boston Consulting Group, McKinsey, Booz Allen Hamilton, and the Harvard Business School during the 1960s and 1970s developed many of the tools and approaches that would define the new field of strategic management, setting the groundwork for many consulting firms to follow. Another big player entered the stage in 1973: Bain & Company distinguished itself from its older peers through its innovative focus on shareholder wealth and its successful private equity business. The industry experienced impressive growth exceeding 20% in the 1980s and 1990s: In 1980 there were only five consulting firms with more than 1,000 consultants worldwide, whereas by the 1990s there were more than thirty firms of this size. A more recent change was the development of consulting arms by both accounting firms (e.g. Arthur Andersen / Accenture, KPMG, Ernst & Young, Deloitte, PwC) and global IT companies (such as IBM and Infosys). As a business service, consulting remains highly cyclical and linked to overall economic conditions. The consulting industry shrank during the 2001-2003 period, but grew steadily until the recent economic downturn in 2009. This period brought high uncertainty for consulting firm’s clients and lead to the postponement of major decisions and projects. This resulted in a decline for the industry and the downscaling of recruiting efforts. Since then the market has stabilized and MBA recruitment has gained new momentum during 2011. Despite stronger competition between consultancies on a worldwide scale and slow growth especially in mature markets, there has been no significant consolidation among top players until today.


When looking at current developments in the market, the following trends are often cited: Segmentation and specialization:

A current trend is a clear segmentation of consulting firms, as described in the previous section of this guide. Only the leading players like Bain, BCG, and McKinsey operate on a worldwide scale while retaining their strong strategy focus. Boutique firms compete in this high-end market with a particular focus on a certain industry or service. Generalist consulting firms such as Accenture and IBM Global Business Services are broadening their offering to include high volume, lower margin work such as system integration, often crossing the line between traditional management consulting and IT consulting services. 

Focus on growth in emerging markets:

The consulting market is growing rapidly in China, Russia, and Middle East. Also Latin America and India are experiencing high growth. Major firms are heavily investing in these regions, opening new offices and aggressively competing for candidates with local market and language expertise (Mandarin, Russian, Arabic, etc.).  As

Bigger share of projects non-industry fields: the








government, quasi-government and non-profit organizations are turning to the same managerial principles that have helped the private sector for years. 

Pay for Performance:

As far as the revenue model is concerned, the consulting industry traditionally charged on a time and material basis, billing staff consultants out based solely on the hours worked plus out-of-pocket expenses such as travel costs. During the late 1990s and early 2000s, there was a shift to more results-based pricing, either with 23

fixed bids for defined deliverables or some form of results-based pricing in which the firm would be paid a fraction of the value delivered. The current trend seems to favour a hybrid with components of fixed pricing and risk-sharing by both the consulting firm and client. 

Comeback of accounting firms:

After a number of highly publicized scandals over accounting practices, such as the Enron scandal, professional advisory firms (most notably Ernst & Young, PwC and KPMG) began to divest their management consulting units, to more easily comply with the tighter regulatory scrutiny that followed. However, to some extent trend is now being reversed and firms are rapidly rebuilding their consulting capabilities.


Inhouse Consulting:

Recently, more and more corporations (such as Unicredit, Porsche, and Siemens) have started to set up their own internal consulting groups, hiring internal management consultants either from within the corporation or from external consultancies. Many corporations have internal groups of as many as 25 to 30 full-time consultants. Internal consulting groups are often formed around a number of practice areas, commonly including: organizational development, process management, information technology, design services, training, and development. 

Individual specialization:








propositions, such as providing market information to clients and providing management tools and frameworks are less relevant today due to easier access to information and a large number of MBA graduates







consultants tend to be less generalists switching between different types of projects and industries. Many firms have more structured organizations across industries and service lines to deal with the increased sophistication of clients. Hence, new joiners might be asked to develop deep expertise in one industry right after joining.

The Consultant job at a glance In essence, consultants are hired advisors to corporations. They tackle a wide variety of business problems and provide solutions for their clients. Depending on the size and chosen strategy of the firm, these problems can be as straightforward as researching a new market, as technically challenging as designing and coding a large manufacturing control system, as sensitive as providing outplacement services for the HR department,









organization and strategy. 25

Management consultants must be skilled at conducting research and analyzing it. Research means collecting raw data from a variety of sources including the client's databases, trade associations in the client's industry, government agencies, and, perhaps most importantly, surveys and market studies that you devise and implement yourself. It also means interviewing people to gather anecdotal information and expert opinion. The interviewees may be anyone, from industry experts to the client's top executives to the client's lowest-level employees. All this data must then be analyzed, using tools from spreadsheets to your own brain. The idea here is to spot behaviour patterns, production bottlenecks, market movements and other trends and conditions that affect a client's business. Your ultimate job is to improve the client's business by effecting changes in response to your analysis. That's the hard part, because it involves convincing the client to accept your recommendations, often in the face of opposition from client executives who resent outsiders upstaging them with the boss or resistance from company employees who have something to lose from change. To succeed you'll need excellent people skills and the ability to put together a persuasive PowerPoint presentation. Finally, you'll need the ability to handle disappointment if your solution fails or the client decides not to even try implementing it.

Consulting career path While each consulting firm has its own unique terminology for its ranks, basically all consultancies are organized in the same pyramidal structure with very similar hierarchical levels. The average duration per level and the extent to which the often cited up-or-out principle is applied may vary among different companies, geographies, as well as external market conditions. The following figures summarized the most common hierarchy levels, job titles and job durations.


Hierarchy levels in consulting companies


Fellow, Analyst, Associate Consultant, Business Analyst: This is the position at the bottom of the professional pyramid. The vast bulk of analysts are young, talented, and hungry university graduates. Many firms structure this position to last for two to three years. The work itself-as well as the hours is usually quite demanding. It often includes field and market research, data analysis, customer and competitor interviews, as well as participation in client meetings. (Senior) Associate, Consultant: This is the typical port of entry for newly minted MBAs. Consultants often perform






recommendations, and present findings to the client. They are usually responsible for a dedicated work package, report to the project manager, and provide often coaching and guidance to younger colleagues. Case Team Leader, Manager, Engagement Manager: After a few years, a consultant will move up to manager. As the title implies, this usually means leading a team of consultants and analysts toward project completion through all phases of the project life cycle. In 27

addition to having more-rigorous responsibilities for managing the project team, the manager will typically be a primary point of contact for client interactions and will report to the accountable industry partner. Director, Partner, Junior Partner, Principal: Congratulations! You've forded the River Jordan of consulting and arrived at the Promised Land. Note that some firms further subdivide partners into junior and senior grade (see above figure). As a partner, one of your big responsibilities will be to sell new projects through your established network of clients and partners. Fortunately, as with other big-ticket sales jobs, the pay can be quite rewarding (The salary range is from $250,000 to several million dollars at leading firms).

Love it or Hate it: Consulting life consideration points So, you want to be a consultant? It can certainly be a great experience with challenging projects, brilliant colleagues, a great networking effect and high learning curve. However, be aware that it is not a dream job for everyone: Some consideration points to facilitate your own choice. Flexibility and top management exposure: Most people who work for consulting firms talk about how intellectually stimulating their work is. They enjoy the challenge of going into new settings and facing some of the most difficult issues business leaders have to deal with. Moreover, the consulting profession provides young professionals the opportunity to work directly with the top management, hence getting useful insights and experiences for their individual growth. Consultants also take pride in seeing the impact their advice has on clients' businesses. Obviously, all this requires high flexibility, adaptability, the ability to handle short deadlines and high expectations from client side.


Brilliant colleagues and peer competition: The key resource of consulting firms, and some would say the only resource, is their people. All of the top-tier firms fill their offices by skimming the cream of the undergraduate and business school elite. Insiders tell us that working at a consulting firm is very much like being on a team with the best people from school: "People are universally bright, interesting, hardworking, and motivated." Many insiders also say they enjoy socializing with their colleagues. However, candidates willing to work in consulting should feel comfortable to work in a team with highly ambitious colleagues and strong peer competition based on the up-or-out principle. Demanding learning environment: One of the thrills for many consultants is the constant learning that comes with the consulting workload. Whether you're learning about a new company or industry, talking to people in various parts of a client organization, or brainstorming ways to deal with challenging technical problems, consulting offers a steady diet of new cases and settings. Many consultants believe they wouldn't face such a wide variety of challenges in another profession. In turn, this means continuously high efforts to learn a lot in a short period of time. A Dog's Life: The travel, the hours, and the difficulty of maintaining a personal life top everyone's list of consulting complaints. It's not that people in other professions don't work long, hard hours, but the consulting lifestyle, which often requires the consultant to be out of town four days a week for months at a time, is hard to maintain over the long run, especially for people with families. Some individuals actually thrive on the pace and excitement of the energetic schedule. For many others, a few years are about all they want to put up with. Individual impact:


Most people who go into consulting as a career say they do valuable, highly meaningful work that delivers bottom-line impacts for their clients. However, some ex-consultants say that the work was not as meaningful to them as they would have liked: recommendations that end up in the executive drawer, lack of in-depth industry expertise, and too many slides for too little impact are some of the complaints.

6 Profiles of Consulting Firm A.T. Kearney A.T. Kearney is a global strategic management consulting firm known for helping clients gain lasting results through a unique combination of strategic insight and collaborative working style. The firm was established in 1926 to provide management advice concerning issues on the CEO's agenda. Today, they serve the largest global clients in all major industries. A.T. Kearney's offices are located in major business centres in 35 countries.


If you are interested, the A.T. Kearney Global Prize Case Competition might come handy for you. That’s a case competition, which is organized by A.T. Kearney starting from October. SDA Bocconi is a participating school and the competition offers a great opportunity to learn about A.T. Kearney and have some fun (the finals are in London). Alumni contacts: Name






ry Marina Catino





Giovanni Veronese




veronese.giovanni@gmail. com

Bain & Company Bain & Company is one of the leading global business consulting firms and serves clients on issues of strategy, operations, technology, organisation and mergers and acquisitions. The firm was founded in 1973 on the principle that Bain consultants must measure their success by their clients' financial results. Bain clients have outperformed the stock market 4 to 1. With 4800 people in 42 offices across 27 countries, Bain has worked with over 4,400 major multinational, private equity and other corporations across every economic sector.



Alumni contacts: Name



Count ry


Isabella Andrea




[email protected]

Antonio Linardi




[email protected]

Diego Lussana




[email protected]

Kerim Gurkan 34



[email protected]

John Faneca




[email protected]

Marzio Forlini




[email protected]

Björn Kuse




[email protected]

Antonello Cocco




[email protected]


Booz & Company Booz & Company is a leading global management consulting firm, helping the world‘s top businesses, government ministries and organisations. Founder Edwin Booz defined the profession when he established the first management consulting firm in 1914. Today, with more than 3,300 people in 57 offices around the world, the firm brings foresight and knowledge, deep functional expertise, and a practical approach to building capabilities and delivering real impact. Booz & Company works closely with clients to create and deliver essential advantage.



Alumni Contacts: Name



Count ry


Rafael Schmill




[email protected]

Diego Travaini




[email protected]


McKinsey & Company Founded in 1926 by James O. McKinsey, McKinsey has grown into a global partnership with over 6,000 consultants in more than 80 offices in more than 40 countries around the world. McKinsey serves as an adviser to the world‘s leading businesses, governments, and institutions. It is widely recognized as a leader and one of the most prestigious firms in the management consulting industry. McKinsey serves more than 70% of Fortune magazine’s most admired companies. It serves governments in more than 35 countries and conducts 150 pro bono engagements each year. Clients come to McKinsey for advice when they have major strategic, operational or organizational challenges. McKinsey is very effective in concentrating the global knowledge and expertise on the topics of interest to their clients. It has also a loyal and important alumni community. As an example, 150 McKinsey alumni have become CEOs of companies with more than one billion dollars in annual revenues.



Alumni Contacts: Name



Count ry


Mauro Braghiroli


Engagement Manager


[email protected] m

Branko Popovic




[email protected] m

Daniel Grimm



Germa ny

[email protected]

Anna Thanopolou




[email protected]


Roland Berger Strategy Consultants Roland Berger is one of the largest strategy consulting outfits in the world, and the largest that got its start in Europe. To this day, 26 of the firm’s 36 worldwide offices are located within Europe, meaning it is very active on its home turf, but a committed international approach since its founding has seen its influence stretch across four continents and more than 25 industry sectors. The firm constantly aims for “creative strategies that work”, an approach that means not being afraid of doing the unorthodox, and not necessarily following the same quantitative methodologies as its rivals.

As such,

Roland Berger tends to hire consultants from a wide range of backgrounds and academic disciplines—anyone, in fact, that can help its clients “see their vision become reality”, according to the firm, as “that is the yardstick by which our clients ultimately measure us”. In 2009, it generated EUR 616 million in revenues with about 2,000 employees. The strategy consultancy is an independent partnership exclusively owned by about 180 Partners.


Alumni Contacts: Name



Count ry


Roberto Borga


Senior Consultant


[email protected] m

Wolfram Lipp


Senior Consultant

Germa ny

Wolfram.lipp@googlemail. com 37


The Boston Consulting Group The name may sound local, but The Boston Consulting Group’s reach—and expertise—is anything but.

With 4,500 consultants in 69 offices in 40

countries, the firm ranks as one of America’s Largest Private Companies, according to Forbes magazine.

Clients typically include many of the

world’s 500 largest companies, but BCG also counts among its client’s midsized businesses, non-profit organizations and government agencies in North and South America, Asia, Europe, the Middle East and Australia. The Boston Consulting Group (BCG) partners with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. BCG‘s customised approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organisation. This ensures that their clients achieve sustainable competitive advantage, build more capable organisations and secure lasting results.


Alumni Contacts: Name





Chiara Codella


Project Leader


[email protected]

Iuri Longhi




[email protected]

Marco Grieco




[email protected]

André Krzyzowski



Switzerla nd

[email protected] om



Additional Consulting Firms Below you will find some Alumni contacts from other consulting companies that have been recruiting SDA Bocconi MBA graduates. Accenture Management Consulting: Name

MBA Position

Count ry


Pietro Di Maria




[email protected]

Gianmarco Loreti




gianmarco_loreti@accenture. com

AlixPartners: Name



Count ry


Tommaso Ascarelli


Vice President


[email protected]

Eugenio Berenga


Managing Director


[email protected]

Alvarez & Marsal: Name



Count ry


Marco Alessandrini




marco.alessandrini@gmail .com

Giovanni Zoppetti





Business Integration Partners: Name



Count ry


Francesco Brocato




[email protected]


Infosys Consulting: Name Dino Diviacchi Renato Velotto Romano

MBA Position

Count ry



Senior Associate


[email protected]




[email protected]

Net Present Value: Name



Count ry


Marco Paolo Noseda




[email protected]


Count ry




[email protected]

Porsche Consulting: Name


Carlos Bonilla 35

Tata Consultancy Services: Name Nikolaus Egyed



Count ry



Business Development Manager

Germa ny

[email protected]

Unicredit Management Consulting: Name



Count ry


Marco Cozzi




[email protected]


Value Partners: Name



Count ry


Stefano Melchiond a


Senior Associate


[email protected]

Varun Sridhar


Associate UAE Consultant

[email protected]

ZS Associates: Name



Count ry


Laura Galimberti




[email protected]

Antoine Herbaux




[email protected]


7 Cover Letter and Resume 1. How to write your resume and cover letter One of the first things that an MBA candidate will have to come up with in his pursuit to reach out to the leading consulting firms is a set of effective cover letter and resume. Typically a cover letter is read before the resume but it’s not a thumb rule. It is a brief note to the recruiters spread across 3 to 4 paragraphs. Recruiters usually scan the cover letter, looking for keywords (e.g. firms, roles, accomplishments). Where the resume provides the quantitative information about a candidate, the cover letter gives the qualitative edge. It lends the personal touch and a story to the recruiting process. These letters give an opportunity to: 

Showcase your personality through tone, voice, and diction

Tell one or two stories in more detail than the resume allows for

Highlight the reason why a certain consulting company attracts you

Some of the quick tips, which might be helpful in preparing a successful cover letter are: 1. The opening paragraph should clearly mention: 

The position that one is applying to

Mention if any company presentation was attended (when and where). Also mention the relevant people met during the presentation and if there are any personal connections (network) in the company

The qualities that make the candidacy a good fit (e.g. leadership experience, analytical skills )

2. The body paragraph (ideally not more than two) should include: 

Work highlights

A section to describe one experience in detail (work, student group, etc). Focus should be on one’s impact and the skills which were honed consequently


A section or paragraph on the interests in job, career goals and a little research done on the concerned firm.

3. The closing paragraph should be brief and restate why one would make a good consultant 4. Use anecdotes in consulting cover letters. Instead of saying “my past experiences have allowed me to become a strong leader of teams”, say this: “My project – where I led groups of up to 5 analysts during an implementation – have made me a strong team leader and partner for my colleagues” 5. Include current contact information at the top. Don’t assume it’s unnecessary because the information is on the resume 6. Never use more than one page. If it doesn’t fit with font size 12 and 1” margins, it’s too long. This is not an iron clad rule but a guiding principle. Cover letters with font size 10, 0.5” margins and minute paragraph spacing hurt the reader’s eyes and hurt the candidacy 7. Avoid







background. A sentence about the school and major should suffice. It’s OK to expand this section if one has a very high GPA, nationallyrecognized scholarships and fellowships, etc 8. Make sure the consulting cover letter is addressed to the right firm and person. The risk is greater of messing up than standing out, and this is mistake number one. Label and save each cover letter by firm, and double-check to ensure the firm name, address, and position applied for (e.g. Associate vs. Senior Consultant) is correct 9. Avoid using general statements about the company (e.g. leading firm, excellent reputation, blue chip company, etc.). Use network to get specific information 10.

One last thing – double-check the letter for syntax,

diction and the overall tone (should not appear rude or arrogant). At least cross check with two other people


The Resume is a brief account of one’s professional or work experience and qualifications. The way a resume is drafted determines the statement an individual wishes to make to a recruiter. A resume should typically include: 

A header section with personal information








miscellany interests/skills/activities 

Bulleted text as opposed to text paragraphs

Key information on each experience such as your title, the location, and length of time involved

*** It is not advised to include the lead “summary” or “objective” in a consulting resume. Most consultants find the summary to add little value as one’s achievements coherently put in the resume speaks volume about the candidate’s objective. Some quick formatting tricks for a consulting resume could be: 1.

Keep it to ONE PAGE and ONE PAGE ONLY. Obvious to some, but a VERY COMMON MISTAKE. If it is getting very difficult to fit the things to one page, play around with font-size, line-spacing,

character-spacing (all features within Microsoft Word) 2. ALIGN EVERYTHING and SPACE EVERYTHING EQUALLY. Proper spacing and alignment make a resume more VISUALLY APPEALING and are indicative of an ATTENTION TO DETAIL that is critical to any consultant’s early success. Also do check for typos. Proof reading again and again till the resume is devoid of any kind of spelling or grammatical error is of utmost importance 3. Focus on RESULTS. Preferably QUANTIFIABLE RESULTS. Consultants are very “results-oriented”. They will be looking for similar attributes in the resume. Focus on the 1-2 most impressive achievements and look for the specific consulting skills that are needed in the 4.

job (more on that below) Put the name in a LARGE FONT and make sure the contact info is UP TO DATE otherwise one is in danger of getting off to a bad start



Do not have CONSPICUOUS GAPS in education and work timeline. A few months are ok. Anything longer than 6 months is a no-no. The blanket advice here is to fill in the timeframe with SOMETHING substantive (e.g. nonprofit work, part-time schooling, and global travel) 9/10 times. For the 1/10 times where it is very difficult to fill (e.g. family issues), DO NOT MENTION THIS IN THE COVER LETTER. It should be downplayed, not emphasized.


make sure the story is straight and ANSWERS ARE READY, because there is a very good chance it will come up during a first round interview 6. Have a line on personal interest/hobbies and keep it SENSIBLE but SPECIFIC. One line only and do not include high school information, it is useless information. 7. Use peers and colleagues with consulting background (they are not competitors, leverage them) to check the content of the resume. If there are personal connections in the company one is applying to then those should be leveraged to review the resume ***Consultants









experiences in resumes:    

People management and team leadership Client interaction – both sales and relationship building Technical and quantitative analytics and research Proven-track record of success at prior jobs as demonstrated by

promotions and increasing responsibilities Quantifiable individual and team-oriented results

This will vary by academic background, years of work experience, and so forth. (To demonstrate the above, the key phrases include: directed teams, led meetings,







performance by, reduced costs by…) Sharing two samples of Cover Letter and Resume:


[Own Address] [Company & Address] [Place], [Date] Application as Consultant from xxx in the xxx office Dear [name] Currently enrolled in the MBA program at SDA Bocconi School of Management, I had the opportunity to meet several BCG consultants during your presentations on campus and in the Milan office as well as in my role within the Bocconi Consulting Club. As a passionate and ambitious professional aiming for bottom line impacts, I was impressed by your consulting approach based on diversity, collaboration, and sustainability. Therefore, I am writing you to express my strong interest to work as a Consultant for The Boston Consulting Group. After graduating with honors in Business Administration, I joined ________________ consulting practice for three years. Hereby, I experienced multinational projects throughout Europe linked to large scale business transformations and IT implementations. Moreover, I could not only focus on analytical and quantitative disciplines such as Organization Design and Benefits Realization but also build up expertise in soft areas like Change- and Program Management. My MBA Internship with __________ gave me the opportunity to perform core strategy consulting activities, such as market analysis, business plan review and synergies assessment for an M&A transaction. My personal style has been described by my _____ management team as tenacious, collaborative and always willing to go the extra mile to achieve client satisfaction. Through my ability to adapt quickly to new environments, framing core issues of complex problems and convincing others of proposed solutions, I was able to face project roles of increasing scale and responsibility. For example, I successfully led the design and implementation of a benefits tracking approach across three countries and fifty projects, managing multiple stakeholders on management level.


Having acted as both team member and team lead, I truly believe in the power of diversity and teams. This was crucial in my role as Change Management Project Manager when coordinating a twenty heads client team across seven countries in Central Eastern Europe. Based on my past consulting experience, my international background and the passion for innovative solutions, I am convinced that management consulting is the right track for my future growth. The BCG philosophy to work closely together with clients on customized solutions in combination with the imperative to achieve real impacts represents the fusion I am looking for. Discussions with BCG professionals confirmed my wish to demonstrate my ability to make a difference at The Boston Consulting Group. I have enclosed my resume and would greatly appreciate the opportunity to meet you for an interview. If I can be of any assistance in the meantime, please do not hesitate to contact me. Yours sincerely, Applicant’s Name Contact No. Email Id


Applicant’s Name Address Telephone E-mail

Recruiters Name Designation Company Name Company Address [Place], [Date] MBA Summer Associate, _______ Office Dear Ms. _______, I am writing to apply for the Summer Associate position. I am currently pursuing my MBA at SDA Bocconi. I have four years of consulting experience as well as three years of international experience both working and studying. I am fluent in English and have advanced knowledge within French and Italian. Prior to the MBA, I worked as a Supply Chain Management Consultant. This experience allowed me to grow a lot personally and professionally - especially as the implementation was mostly included in our projects. That means I had to work closely together with the internationally composed clients’ teams and to motivate these teams in order to achieve a high impact. Many times this also required a hands-on approach to reach the goal. Furthermore, I succeeded in building trustful relationships with the clients’ executives. This allowed me to be very efficient in implementations also in non-standard environments, like a Slovakian manufacturing plant. On the technical side, I dealt with complex supply chain networks both in terms of analysis and development of solutions. I worked for both smaller customers and big international groups and I am therefore familiar with the Consulting process in different environments. The reason for applying to ________________________________ is the same why I pursued my MBA. I want to have an entrepreneurial view on the total firm instead of dealing with a limited part of the business. I especially liked - as you explained in the company presentation at Bocconi - that you see yourself as entrepreneurs which work with other entrepreneurs (clients). This is why I do my MBA and why I believe that __________ is the ideal place for my further development. The fact that you provide individual solutions to your clients’ needs is another important point for me as this approach requires an open-minded, creative and analytical attitude. My personality and my professional experience, paired with the managerial skills from the MBA, are the optimal mix for exactly this approach and therefore ____________. I attached my CV for your review. Should you have any questions, please do not hesitate to contact me. The best way to contact me is via E-Mail. Thank you for your time and consideration. Many kind regards, Applicant’s Name & Signature


Education 2010 – to date

SDA Bocconi School of Management, Milan, Italy Master of Business Administration  Focus: Strategy and Innovation Management  Vice President MBA Club xxx

2004 – 2007

University, City, Country Bachelor in Business Administration, Major: Organization Design and Marketing  Final grade: 1.3 (Honor Pass), ECTS grade: A, awarded as best student of the year  Thesis: 'Change Management success in outsourcing projects' (Honor Pass)  Commercial tutor licence by Chamber of Commerce and Industry

Professional Experience 2011

Leading Consulting Company, City, Country MBA Internship Project - Summer Associate

2007 – 2010

Leading Consulting Company, City, Country Senior Consultant Focus: Organization Design, Transformation Management, Benefit Realization  Gained experience in company- wide transformation and reorganization, customer service centre consolidation, off- shoring, SAP roll outs (mostly Oil & Gas industry)  Worked successfully in multinational teams across Germany, Austria, Switzerland, Central Eastern Europe (onsite stay for more than a year), and Russia  Three Service Excellence Awards for outstanding client satisfaction Key achievements as Senior Consultant (2009 - 2010)  Change Management Lead Consultant in multinational project across seven countries. Sizing and coordination of 20 heads client team that met quality / time / budget targets  Designed regional organization transformation roadmap in collaboration with client management team, that was endorsed on international EVP level  Project Manager for development of Transformation Management Certification. Internal training was delivered to 100 internal Consultants on 3 continents Key achievements as Consultant (2007 - 2009)  Design and implementation of a program benefit realization and tracking approach for more than 50 projects across 3 countries  Organizational role design for sales and marketing units (500 heads). Development of target sizing and agreement of 3 years transition plan with General Managers

2004 – 2007

Leading provider of Telephony Solutions, City, Country Trainee  Assignment areas: sales, marketing, logistics, in- house consulting, procurement  Project experience: outsourcing of logistics activities, implementation of a new IT procurement system, strategic repositioning of direct sales business Key achievements  Proactive outsourcing project success analysis discovered non compliant process execution leading to operational inefficiencies  Responsible for sales and marketing activities of junior company


Family- owned metal processing company, City, Country Intern  Engagement in the area of customer service and order taking  Support in financial accounting and month end activities

Languages and Additional Information 

German: Mother Tongue, English: Fluent, Italian: Advanced


 

Volunteer of the Year 2007 (awarded by the Berlin Youth Sports Association) Personal Interests: sports (football, swimming), modern fiction literature


Education 2010 – 2011

SDA BOCCONI, Milan, Italy MBA - Master of Business Administration

2003 – 2008

________UNIVERSITY ___________________________________________ Diploma in Industrial Engineering and Management / ____________________,  4 year full- time program (equal to Bachelor Honours)  Grade 1.9 on scale from 1 (very good) to 5 (fail)


____________GRADUATE SCHOOL OF BUSINESS, _________________ Certificate of Business Studies, International Business  Exchange semester 'Certificate of Business Studies' - awarded with distinction  Incl. 2 weeks French course at the Ecole d'Ingénieurs Généraliste in Paris

Professional Experience 2008 – 2010

2007 – 2008

Name of the company_____________________________________ Senior Consultant Supply Chain Management  Developed supplier integration strategy and coordinated programming IT tool for 18 factories of an European white goods producer  Implemented supplier integration program with ca. 30 supplier workshops in 4 factories in Poland, Slovakia and Italy (total stock reduction € 1.3M)  Interacted regularly with client executives  Steered implementation teams with ca. 8 cross- department team members from different nations  Managed sub- project reengineering and implementation new warehouse processes in a Slovakian manufacturing plant  Analyzed & redesigned external logistics network in 4 factories (Germany, France) for leading medium size industrial goods company - total cost reduction ca. € 900K  Further project experience in aviation, retail, manufacturing  Promotion from Consultant to Senior Consultant after 16 months Name of the company______________________________________ Freelance Consultant  Investigated different material supply strategies in the automotive assembly in a multi- functional study (from logistics executive to manufacturing shopfloor employee)  Analyzed and evaluated processes in depth and evaluated fit into supply chain strategy  Compiled final study diploma thesis - grade 1.3 (=very good)


Name of the company______________________________________ Junior Consultant  Developed production optimization study and new factory layout for the management of an industrial goods company near Frankfurt (Main)


2004 – 2005

Name of the company______________________________________ Intern  Worked on process reengineering projects for automotive OEM and supplier


Name of the company______________________________________ Intern  Analyzed materials for material and manufacturing process qualification Name of the company______________________________________ Intern  Supported service network manager

Languages _______________________________________________________________ Additional Information



Personal Data Place of Birth: _________ Date of Birth: __________ Nationality: ____________ Permanent Address _________________ _________________ _________________ Present Address C/O _______________ ___________________ ___________________ ___________________ School E-mail ___________________ Personal E-mail ___________________

   

Participated in A.T. Kearney case competition Worked as voluntary private teacher for underprivileged pupils during undergraduate studies and started initiative to provide voluntary private lessons with students from undergraduate university English certification (TOEIC Test 980 out of 990 - Gold Level) SAP 01 training (SAP basics)


8 Focus Interview Parts of a typical interview in consulting Behavioral interview In this part, the interviewer briefly introduces himself and then asks you to do the same. This can range from an informal chat about yourself, your interests and accomplishments to a formal walk through your resume. Some firms like to disguise resume questions into questions of the sort "tell me about a time when..." or "what would you do if...". Also, any classic interview









strengths/weaknesses", "why this job", "reason to leave previous job", "role model, dead or alive" etc. This part typically lasts around 10-15 minutes. Case Study The biggest chunk of the interview consists of a case study and, optionally, a couple of math teasers. This part should last about 20-25 minutes. For the case study, the interviewer will present to you a company in some kind of distress. Usually, he gives you only a generic description of the situation, such as “a big supermarket chain experiences fall of profits in diaper sales”. It is your job to ask the right questions in order to arrive to the core of the problem and be able to propose a solution. As long as the math teasers are concerned, the most common ones are back-of-the-envelope market sizing questions or classic riddles that can be solved with a little bit of common sense and out-of-the-box thinking. Questions & Answers This is your time to ask questions to the interviewer. You could ask him about his personal experience within the firm or generally about firm practices. Usually the last 5 minutes of the interview are dedicated to this part. 54

Source: Adapted from Case in Point (4th edition, 2005)

Advise for each part Behavioral interview First of all, do not underestimate this part or think that you do not need to prepare for it. This is the first impression the interviewer gets of you and it allows you to establish a connection between you and market yourself the way you want to be seen, using the correct stories from your previous experience. To prepare for this part, you need to have gone through all the considerations necessary to build your resume and cover letter. That is to say, you need to analyze your personality and past experiences and have come up with what constitutes your personal brand. Next, you need to select some stories from your past (not necessarily professional) that highlight the points you are trying to make about yourself. Having 6-7 such stories ready should be enough to answer most "tell me about a time when..." questions with minor on-the-spot adaptations. It is important to have many stories in order to be able to answer a variety of questions as well as come up with different stories in each of the same-firm interviews. Remember to include some failure stories too; these should end with lessons learned and how you managed to power through. It goes without 55

saying that you should know all details in your CV by heart and be ready to expand on them. Just in case, bring some copies of your CV with you. Also, you need to check out the most common interview questions (such as strengths/weaknesses) online and prepare clever (yet not smart-ass) answers. Lastly, going back to the second part of building a cover letter, you should have spent some time on the website of the firm you are interviewing with and thought about how your stories could highlight their values and why you would fit in. You could also get inspiration for this during company presentations. Be prepared to answer the "who else are you interviewing with" question with honesty and valid reasons for your choices. To finalize your preparation, role-play this part once or twice with someone other than your mirror. Case Study When attacking the case, start by listening closely to the question and taking notes. Next, you should immediately repeat the issue in your own words and make sure that you understand what you are asked to examine. You can then ask a couple of questions to get a feel of the company and industry, yet you should refrain from asking too many questions not directly related to the issue at hand. In continuation, using the methodologies described in the next chapter, try to organize your thoughts in a linear way and let the interviewer see this by taking notes on a piece of paper and walking him through them. For each loose end, you should ask for clarifications in order to verify whether the problem begins there or not. If it does, go deeper into that with more questions and calculations and try to give a number of specific recommendations for the company to choose from. At all times, you should pay attention to what the interviewer is telling you with words or body language. If he looks bored, you should move on to the next part of your framework and try to engage him by leaning towards the table and speaking with a clear and keen voice. If he tries to push you 56

towards a different direction, follow him instead of sticking to your initial plan. Finally, make sure you arrive to the correct numbers. For the market sizing questions, let the interviewer follow your train of thought by explaining all the intermediate market sizes you need to compute in order to arrive to a solution. He is most interested in your ability to breakdown the problem into sub-problems than the accuracy of your numbers. Questions & Answers Definitely come prepared with clever questions tailored to the specific company, indirectly highlighting your interest in their work and having studied the environment. An example would be: "Do you think that the principle of been compensated based on results has harmed your firm's profits during the crisis?". However, if the interviewer mentions something interesting about his work, you can gain points by showing interest in that. You can also ask practical questions about your possible work there, for example "Which advice would you have liked to receive on your first day with company X?".

Source: Adapted from Case in Point (4th edition, 2005)


Estimation of required preparation Behavioral interview Most of the preparation for this part has probably taken place while writing your resume and cover letter. However, additional preparation and interview simulation with a peer could take some more time. It is advisable to allow a weekend to this before the interview period starts and revise your thoughts as well as study the company before each interview. Case Study The key to solving cases is practice, and that requires time and, ideally, some peers. Start by going through the frameworks in this guide as well as the sources they were inspired from. Once you get an idea of these tools, try applying them in a couple of cases while reading through the “solutions”. Unfortunately, since the case study is a highly interactive process, it is virtually impossible to simulate it in a realistic way without a peer. Therefore, our best advice to you is to arrange some mock interviews events in which people will have the chance to give and solve cases and rotate for a more diverse experience. Recommended timeline for case study preparation from frameworks to mock interviews is 2-3 months, so make sure to start way before the interview period. After the initial acquaintance with the frameworks and supportive material, most of the weight of the preparation should be given to practice. Questions & Answers Preparation for this part could be done together with that for the behavioral interview. You can have a general set of questions and add a couple every time you are interviewing with a new firm.


Dresscode Consulting firms tend to be from extremely formal to very formal. Therefore, it is crucial to dress accordingly in order to allow them to visualize you already fitting in. Male Wear suit, shirt, tie, belt, socks and formal shoes. Carry a briefcase and take care of your hygiene. Make sure to pick up a good quality suit with classic characteristics when it comes to "cut", color and pattern. Safest choices are navy, charcoal gray or black. For the shirt, choose a no-pattern or thin-lined one, preferably white or light blue. The sleeves of the suit jacket should not cover that of the shirt completely. About half an inch of the shirt's sleeves should be seen. Wear a solid-colored or subtly-patterned tie, in a matching conservative and dark color such as blue or red. Check out tie knots online and find the one that matches your shirt collar opening. Practice tying the knot beforehand to avoid surprises. The tip of the wider end of the tie should be at the same level as the bottom of your belt buckle. Tie accessories like tie bars and tie clips might be worn to keep the tie in place. The belt and the shoes should match each other and be dark-colored, such as black or brown. Obviously, the choice of belt/shoe color depends on the choice of suit color. Shoes need to be polished and have laces. Choose dark colored socks more or less in the color of the shoes. Carry a briefcase of similar color, containing your pens, your business cards and your resume. Cut your hair and keep a simple and neat hairstyle. Shave or at least trim your mustache and beard. Keep short and clean finger nails and use a very small quantity of fragrance if at all.

Female Wear suit, shirt and formal heels. Carry a briefcase or handbag, use stockings and avoid unnecessary make-up and jewelry. Wear a two-part suit with skirt or pants, or a strict dress with a matching blazer. Of all these 59

options, suit with pants is the safest. Color and pattern choices are the same as for men, above. However, if the interview takes place in the summer, women could go for a beige suit made of lighter fabric. Women also get more choices when it comes to shirts, but it’s still better to stick to simple colors and patterns. For instance, if you decide to wear a pink shirt do not overdo it by adding a stand-out pattern to it too. Pick a color that lights up your face, be that pink for brunettes or light blue for blondes. For the shoes, you need to go with heels but they have to look professional and not excessively tall. Again, your choice of colors is larger than that of men, but you can never go wrong with black (or beige in the summer). Ideally, the briefcase or handbag you will be carrying will play around the same colors. Always wear stockings, natural color or black, even in the summer. It is very important to keep a clean, professional look. Therefore, you should avoid excessive make-up, jewelry, perfume, nail art and hair-dos. Preferably, use no jewelry at all, basic make-up and keep your nails clean, unpolished and short. You can let your hair down or wear them in a simple and elegant pony-tail or up-do.


9 Case frameworks To crack the cases you will be given during your interviews, you should be aware of some fundamental frameworks – most of them part of the MBA Strategy classes. While it is neither required nor suggested to fully stick to those frameworks, they can serve you as a blueprint to approach cases in a well structured manner.

Value chain analysis The value chain analysis is helpful in understanding the core structure of an industry by looking at the infrastructure that keeps the company’s processes together. Oftentimes cases can be approached by asking the interviewer relevant questions on the effectiveness and efficiency of certain value chain steps.

Porter’s five forces The five forces help in evaluating the attractiveness of an industry segment in terms of the possibility to earn high returns. In a perfectly competitive market, no competitor would be able to earn higher-thanaverage returns on his business. Porter’s five forces are useful in assessing the overall competitiveness of a market and therefore the possibility of earning higher-than-average returns. Anyway, in order to fully understand the issues at hand, the five forces framework should be utilized in conjunction with other relevant frameworks. 61

Source: M. E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors

The goal is to assess whether a company should enter/exit the industry or find a position in the industry where it can best defend itself against these forces or can influence them in its favor. Barriers to Entry: There are a number of factors that determine the degree of difficulty in entering an industry: 

Economies of scale

Product differentiation

Capital requirements vs. switching costs

Access to distribution channels

Cost advantages independent of scale

Proprietary product technology

Favorable access to raw materials

Favorable location

Government subsidies

Learning curve

Government policy

Relationship with Buyers: A buyer group is powerful if:


It is concentrated or purchases large volumes relative to seller's sales

The products it purchases front the industry are standard or undifferentiated

It faces few switching costs

Buyers pose a credible threat of backward integration

The industry's product is unimportant to the quality of the buyer's products or services

The buyer has full information

Relationship with Suppliers: A supplier group is powerful if: 

It is not obliged to contend with other substitute products for sales in the industry

The industry is not an important customer of the supplier group

The supplier group is an important input to the buyer's business

The supplier group's products are differentiated or it has built up switching costs

The supplier group poses a credible threat of forward integration

Substitute Products: 

Substitute products that deserve the most attention are those that:

Compete in price with the industry's products

Are produced by industries earning high profits

Rivalry: Rivalry among existing competitors increases if: 

Numerous or equally balanced competitors exist

Industry growth is slow

Fixed costs are high

There is lack of differentiation or switching costs

Capacity is augmented in large increments.


Four P’s This is THE Framework for putting together a Marketing Plan. The four P’s represent the tools for implementing a strategy that first depends on the selection of a target customer segment and on product positioning. Product: The following are some questions that might be helpful in assessing the competitiveness of a product: • Does the product have the right positioning in the marketplace? 

Does it serve a particular segment of the market?

Is it a mass market or niche product?

Is it differentiated enough to stand out against the competition?

• What kind of brand equity does the product uphold? 

What are some of the issues/risks associated with the "image" or "perception" of the brand relative to other brands in the market?

What are some of the features that can be added to the product that would add to the value or the perception of value to the consumer?

• What are some of the packaging issues that might present an opportunity or impediment to increased sales?


Does my packaging reflect the positioning of the product? If mass market, does it have a mass market appeal?

How does the product fit in the overall strategy of the company?

How does the product relate to other products produced by the company?

What kind of a financial role is the product playing (i.e., cash cow, long-term profit potential, etc.)?

Promotion: Promoting and developing a specific brand for the product captures the most value not only by the supplier in being able to increase sales volume and per unit margin, but also by the consumer in developing a certain perception of the product. Again, promotion and branding must be aligned with the other "Cs" and "Ps" that have been covered thus far. The message that is communicated to the consumer, and in turn what the consumer believes about the product, will drive the success of the product. Promotion and branding can consist of a number of elements such as traditional advertising mass or niche), or no advertising to maintain certain perception of exclusivity, word of mouth, direct mail, etc. 

What message are we trying to communicate? What is the objective? o Is the goal to achieve a household name? Build loyalty? Defend the product's positioning? o Does the message portray the total customer experience?

What are some of the barriers to communicating the desired message?

Does the promotion/branding focus on the long-term view of relationship building with the consumer? o Does it encourage repeat purchasing? Focus on customer retention?

How is the marketing strategy different from the competition? o How will the competition react?

Which vehicles will you use to influence the decision making process? o Pull strategy: (direct at end user) use of advertising, direct mail, telemarketing, word of mouth, consumer promotions o Push strategy: use of trade promotions, sales aids and/or sales training programs 65


How much money is being allocated to marketing?

Price: Getting the right price for a product is extremely important for the success of the company. Unfortunately, sometimes the right price is not easy to determine. Depending on the price elasticity of the product, a 1% increase in price has anywhere from a -20% reduction to a 25% increase in net income. The most important factor of what ultimately drives price is the customer's perceived "value" of the product. For example, if a company produces shirts with a unit cost of $10, but the market perceives the product as fashionable or has the right brand name, the shirt can then be priced to capture any consumer surplus at $50 or even $80 per shirt. The same manufacturer introduces another shirt at the same cost the following season. This time, however, the shirt is no longer considered in vogue and thus has little "value." This time, the shirt would be priced at $25. Other factors that determine the price of a product are: • The Cost to Produce (COGS): maintain low costs to capture bigger profit margin • The price paid previously - the expected price: if consumers are used to paying a certain price for a product, it is very difficult to convince them of paying a $20 premium for the same product. However, if their perceived value of the product is higher than what they paid in the past, then there's room to capture some consumer surplus • The price of substitutes: the price of a product is driven down if the product can be easily substituted by another that serves the same function Place: After having assessed the product positioning and gained an understanding of who your customers are, you need to develop strategy around which distribution channel you need to use and where to sell your product. The distribution channel can be through a third party or through an in-house sales force, and is responsible for 67

transmitting the company's product to the customer (wholesaler, retailer, end user). The distribution channel that is selected and the outlets at which the product is sold MUST be aligned with the positioning of the product and focused customer segment. There









place/channel distribution. Below are just some thoughts that you may want to consider when formulating strategy on delivering the product to market: 

Which channels are most closely aligned with the company's strategy?

Does the company need to build new channels or eliminate existing ones?

What functions does the company want the channels to serve?

Does it make more sense to go direct to the end-user or deliver the product through intermediaries?

What are the economics of the channel?


Who needs to capture what margin?

Does this fit in with the intended selling price of the product?

How much control is the company willing to give up on the delivery of the product? 

Is the company willing to work in conjunction with the distribution channel, by monitoring its timeliness and service, or by placing most of the weight on the channels in meeting customer needs?

What would be the relationship of the company's sales force in this arrangement?

How would the company address any potential shifts in power to the channel?

[Source: Harvard Business School - Management Consulting Club - Case Interview Guide]


SWOT SWOT analysis helps identifying not only what are the company’s key strengths and weaknesses but also how those capabilities can help the firm take advantage of opportunities of fight threats. 

In order to analyze the company: o Strengths o Weaknesses

In order to analyze the environment: o Opportunities o Threats

Four C’s Useful in analyzing the company’s strategy based on its chosen market positioning and on the factors that can determine its success. The customers’ needs have to be known and the cost structure must be able to satisfy those needs with an acceptable level of profitability, which should also be sustainable because of the difficulty competitors might meet in trying to imitate it. 

Customers o What do they want and need? o How will we satisfy those needs? o What is important to them? o How much are they willing to pay?

Competitors o What are they doing? o What are their strengths and weaknesses? o How are they meeting customers’ demands? o What is their cost structure?


Capacity/capability o What are our capabilities in terms of: 





o What are our strengths and weaknesses? 

Costs o What is our cost structure? o How are overhead costs applied?


Seven S’s The Seven S framework helps understand the factors, internal to a company, that are a source of competitive advantage. The framework emphasizes the importance of the network that must be in place between all these attributes and that the attributes reinforce each other through the network.

Hardware: 

Strategy Actions that the company takes to gain a sustainable advantage in the marketplace (e.g., low cost; high quality; new product development; entering new markets)

Structure The structure in which rules and responsibilities are specialized and dispersed, and the channels of authority are outlined (e.g., organizational structure; channels of communication; chain of command – or the lack of)


System The formal and informal processes and procedures used by the company to manage itself on a daily basis (e.g., budgeting; planning; compensation; performance measurement; management control systems; information systems).

Software: 

Style The leadership style of upper management and the day-to-day operations of the company (e.g. hierarchical; meritorious; norms; common practices)

Staff The company’s approach to recruitment, selection, training, and blending of qualified staff (e.g., on campus recruiting; formal training; prior experience; leadership and/or management skills)

Skills The competencies that are held by the organization – not just the people (e.g., skills and experience of the people; best management practices; innovation; superior service)

Shared Values The basic values that are widely accepted and practiced with the company and act as the guiding principles of what the company stands for (e.g., a shared understanding of the purpose the company serves and its vision for the future; being the biggest or the best)


10 Case types

Every consulting firm and consulting guide has its own classification of interview cases. Hence, you might find different typologies in the literature and combinations of the following case study types in practice. It is therefore suggested to make up your mind and to gather information from different sources. Furthermore, you can find different case practice tools on the web pages of major consulting firms. These are always up to date and could help you to find out, what’s currently „hot” for the firm.


PROFITABILITY Description The cases usually ask to identify the reasons behind falling profits in a company. The candidate should analyze the components of the company’s income statement in order to identify whether the problem is on the revenue or on the cost side. Once this has been done, the candidate should drill down to the items that compose the problematic accounting figure in order to identify the root causes of falling profits. Trend analysis is usually helpful in identifying where the problem lies, although restoring revenues (or costs) to pre-fall levels is not always the only option available to recover overall profitability. Volumes should be considered in the analysis separately from prices and costs (the causes for dropping revenues can lie either in decreasing volumes or in decreasing prices). Variable costs should be analyzed separately from fixed ones, and the impact of the latter on overall profitability in case of decreasing volumes must be accurately taken into account. Analyzing changes in the overall industry sales and cost trends, with respect to changes in the specific company, as well as product mixes often help in identifying where the causes for falling profits are and whether they are easily recoverable. Applicable analytical frameworks Sales: 

What is our market share? What is the trend?

How are we doing relative to the industry?

Have we asked customers why are they no more buying our products?

Are our prices in line with the industry?

What have our competitors done that could have harmed our sales?


Costs: 

Do costs seem out of line?

What does the breakdown of costs tell us? Are there any trends?

How is our cost structure with respect to competitors?

How is technological advancement impacting our (or our competitors’) cost structure?

Tips Look at the revenue side first. You can only thoroughly analyze costs once you know the revenue streams behind them. Mind the demand curve, increasing prices does not always lead to increased revenues.


M&A Description The case usually asks to determine whether the merger/acquisition proposal is feasible and economically sound. In order to answer it, the candidate should first analyze the company’s goals and objectives and determine whether the proposed merger/acquisition makes sense from a strategic and economic/financial standpoint. Reasons for the move could be: 

Increase market access

Diversify holdings

Pre-empt competition

Gain tax advantages (e.g. impairment of goodwill)

Incorporate synergies (revenue and/or cost synergies)

The following step would be to analyze the price paid by answering the following questions: 

Is the price fair?

How is the company going to pay?

Can the company afford it?

Can the company still make the payments in case the economy gets worse?

The third step would be to analyze the target company, by answering the following: 

What kind of shape is the company in?

How secure are its markets, customers and suppliers?

How is the industry doing? How is the company doing relative to the industry?

What are the company’s margins?

How would the industry respond to the merger/acquisition?


Are there any legal/regulatory constraints to the operation?

Is there a fit between the two companies from a business and cultural perspective?

Lastly, an exit strategy should be figured out: 

How is the company planning to keep the other company?

How is the company going to sell the acquired company?

Applicable analytical frameworks  DCF analysis 

Value chain analysis

Four C’s

Seven S’s

Tips M&A cases tend to be the most complex and difficult type of cases. Hence, try to understand whether the interviewer is focusing on the strategic issues of the M&A transaction (qualitative focus), or whether he or she is rather interested in the quantitative elements (i.e. company valuation)


NEW PRODUCT/MARKET Description The case asks the candidate to analyze whether to introduce a new product or line of products on the market and what would be the consequences of such introduction. Applicable analytical frameworks In the analysis, the candidate can follow the following steps. Think about the product: 

What’s special or proprietary about it?

Is it patented?

Are there similar products on the market? Substitutes?

What are the key benefits of the new product / which needs are addressed?

How does it fit with the current offering?

Think about market strategy: 

How does the product affect the existing product line?

Is it cannibalizing other products?

Is it replacing an existing product?

How will it affect sales?

What would the competitive response be?

Are there any barriers to entering the new market?

Who are the major players on the market and what are their market shares?

Think about the customers: 

Who are the customers?

How can they be most effectively reached?

How can they be most effectively retained?

Think about financing: 

How is the project being funded?

Can we afford the debt?


Tips Remember that the overall objective is to determine whether or not to launch a new product or to enter a new market. Hence, do a simple costbenefit analysis before drawing a final recommendation to determine whether it is worth it.


COMPETITIVE STRATEGY Description The case asks the candidate to analyze the competitive framework and to come up with sound responses to the competitive issues posed. The questions can vary much. For example, in case a competitor introduces a new product that is eating market share from the company, it can answer the following questions: 

What is the new product and how is it different?

What has the competitor done differently? What is changed?

How are other competitors responding to the new product?

Once the problem has been analyzed, several courses of action can be followed. A non-exhaustive list might include: 

Acquire the competitor or another player in the same market

Merge with a competitor to create strategic advantage

Copy the competitor

Hire the competitor’s top management

Increase the company’s profile through marketing and communication

Applicable analytical frameworks  For C’s 

Seven S’s

Four P’s

Porter’s five forces

Tips When it comes to responses to a competitor move, interviewers tend to look at your logical reasoning and your ability to make strategic decisions. The key question is whether you can put yourself into the shoes of a CEO, deciding which option to go for (and of course whether you are able to communicate your choice adequately).


GROWTH Description The interviewer usually asks the candidate to identify the best courses of action the company should follow in order to grow in the market. This kind of case is usually very open-ended. Some questions can help in defining the industry environment: 

Is the industry growing?

How are we doing relative to the competitors?

How are our prices compared to the competitors?

What have the competitors done in terms of marketing and product development?

Which segments of our business have the largest growth potential?

How could we fund growth?

Once the environment has been identified, a strategy should be devised. Usually, but not always, growth is obtained through sales. Some alternative strategies that could be implemented are: 

Increase distribution channels

Expand product line/ Diversify offering

Invest in marketing

Acquire a competitor

Explore new geographic markets

Start up business, or acquire a player, in a different industry

Applicable analytical frameworks  For C’s 

Seven S’s

Four P’s

Porter’s five forces

Tips Ask the interviewer feeler questions in the beginning of the interview in order to understand if he already has some growth direction in mind. This will help you to narrow down the direction for your further analysis.


TURNAROUND Description The case asks the candidate to come up with solutions to save a troubled company. The case is usually a blend of other case types, as the solution to the company’s problems may come from any of the already analyzed case types. The first step in answering the case question would be to gather all the necessary information from the interviewer: 

What company are we talking about?

Why is it not doing well? Bad products, bad management or external factors?

How is the industry doing?

Are the competitors facing the same problems?

Does the company have access to capital?

Is the company privately or publicly-held?

Once the situation has been analyzed, the most effective actions among the following ones should be implemented order to turn the company around. Please note that the following list is not exhaustive: 

Learn as much about the business and operations as possible

Distinguish short-term and long-term goals; design the business plan

Review services, products and finance o Renegotiate debt o Active working capital management to secure liquidity o Simplify / streamline business operations (improve operational efficiency) o Outsource non core activities o Cut spending in non core areas (e.g. sponsoring) o Sell off non performing / not profitable business units o Reduce overcapacities


o Set the scene for long term growth through new products / markets / services… 

Secure sufficient financing for the turnaround plan

Review talent and temperament of all employees

Prioritize goals and achieve quick wins to build confidence

Involve key clients, suppliers and distributors

Applicable analytical frameworks  Core Competencies 

Business Unit P&L

Value chain analysis

Four C’s

Four P’s

Tips When you are confronted with a Turnaround Case, prioritize the different goals and actions in terms of urgency to secure the survival of the company. Try to design a turnaround plan that comprises different phases. For example, the initial phase could aim to “secure financing and liquidity” and could include actions such as working capital management and renegotiation of debt. The next phase’s objective might be to “stop the bleeding” by selling non performing and non core assets and business activities. On the other hand, cultural and product development might be important for the long-term growth, but not necessarily priorities to secure the short-term survival.


11 Interview Case Examples 1. Airline vs. baby food industry How would you compare the airline industry with the baby food industry? In which would you invest your own money? This is a classic industry attractiveness question. Use Porter's Five Forces, or even better, create your own framework for analyzing the suitability of an industry for investment. Notes: 

It turns out that competition in the airline industry is intense. Fixed costs are high and competitors keep cutting costs till they shave margins to the very bone. Customers are price sensitive. Brand equity is virtually non-existent.

Using a microeconomics argument, you see that airlines will keep cutting prices as long as they are covering variable costs. Since fixed costs are high and probably financed with debt, these companies can end up defaulting on interest payments.

On the other hand, the baby food industry is less competitive. There are two or three large players who do not indulge in cut-throat pricing. Products are well differentiated. Customers are quality conscious: they will pay a premium for quality.

So what? To invest your own money, baby food is better than airlines due to a higher profit potential.


Company valuation Your client is the treasurer in a significantly privately held corporation.










investments in addition to her treasury responsibilities. Recently, she has asked your advice about the purchase of a large position in company 456, whose stock is listed on the NYSE. Company 456 is currently selling for $22 per share. The treasurer's investment analyst predicts that the stock will pay a dividend of $1.25 for the foreseeable future. Short-term treasury bills are yielding 7 percent, and long-term t-bills are yielding 8 percent. The treasurer is contemplating the purchase of 5000 shares of company 456 and wants your help in determining a fair market price. How would you go about determining a fair price for company 456? Answer: $22 per share


Four men who want to cross a bridge There are 4 men who want to cross a bridge. They all start on the same side. You have 17 minutes to get all of them across to the other side. It is night. There is one flashlight. A maximum of two people can cross at one time. Any party, who crosses, either 1 or 2 people, must have the flashlight with them. The flashlight must be walked back and forth, it cannot be thrown etc. Each man walks at a different speed. A pair must walk together at a rate of the slower man's pace. 

Man 1: 1 minute to cross.

Man 2: 2 minutes to cross.

Man 3: 5 minutes to cross.

Man 4: 10 minutes to cross

For example, if Man 1 and Man 4 walk across first, 10 minutes have elapsed when they get to the other side of the bridge, if Man 4 returns with the flashlight, a total of 20 minutes have passed, and you have failed the mission. See how quickly you can solve this in the shortest timeframe possible! Note: 

The flashlight cannot shine a long distance. No one can be carried, etc.

This is a straight forward problem. There are no tricks.


How many piano tuners are there in Chicago? This is a brain teaser case. Its purpose is to test your logical and quick mathematical thinking. There is no right answer, the test is to see if you can come up with an answer based on the information you estimate. You need to start by asking questions about the key factors. One way to solve it is to estimate the number of households in the Chicago and area. The interviewer gave this piece of information at 2,000,000 households. Next, you can break the income of the households into four quarters (500,000 each), Make an estimate of 20% of highest income quarter have pianos, 10% of second quarter, 5% of third, and 0% of fourth. Thus: Income quarter

Population % w/ Pianos

# of Pianos

















With 175,000 pianos to tune you can estimate how often these pianos are tuned. You can estimate top income quarter tunes their pianos once a year, second quarter once every three years, third quarter once every 10 years. This gives you (100,000 + 50,000/3 + 25,000/10) = 119,167 or approximately 120,000. Estimate a piano tuner can do four pianos a day, 250 days a year, therefore: 120000/250=480 pianos a day to tune 480/4 = 120 pianos tuners needed. How could you check this? Look in the yellow pages online. Would all the piano turners be in there? You can guess half. By the way there are 46 piano tuners listed in the Chicago Yellow pages.


5. How many gallons of ice cream are sold in the US each year? Ice cream can be sold through retailers and restaurants. First, let's analyze the retail sales. Assume that of 250 million people in the US, 80% like to eat ice cream. That makes 200 million possible consumers. Ice cream sales are likely to be somewhat seasonal, especially in Northern Slates, so assume an average selling season of eight months in the North and ten months in the South, for an average of nine months for the whole country. During the season, assume that people eat ice cream twice a month, and assume that the average serving is one pint. Since there are eight pints in a gallon, retail sales will be: 200 million people x 9 months x 2 servings per month x 1 pint / 8 pints per gallon = 450 million gallons. Assume that 80% of the US population frequents restaurants, and that they do so at a pace of twice per month on average. That makes 250 million people x 80% x 12 months per year x 2 visits per month = 4,800 million restaurant visits per month. Assume that 50% of these restaurants offer ice cream. That makes 4,800 million x 50% = 2,400 million possible purchases. Now assume that one out of ten times, the customer will order ice cream. That adds up to 2,400 million x 10% = 240 million purchases. Now assume that the average serving is half a pint. Since there are 16 half pints in a gallon, the total restaurant purchases come out to be 240 million purchases / 16 servings per gallon =15 million gallons. Total purchases of ice cream are 465 million gallons per year. Do a quick sanity check by dividing this number by 250 million people, which means that the average annual ice cream consumption is 465/250 or a little less than 2 gallons per head of the population. That seems to be reasonable.

How big is the US market for Band-Aids? Band-Aids are used to cover up minor cuts. Assume that Band-Aid holds 75% of the US market for bandages. The market can be segmented into two main categories of users: kids 16 and under who tend to get cuts more often, and adults over 16 who are a little more careful. Assume that the 89

average life of a person is 80 years, and the population is evenly distributed. That means that kids 16 and under represent 16/80 = 20% of the population. Assume that they get a cut once every two months on average. If the US population is 250 million, 20% equals 50 million kids. Once every two months equals six times per year, for a total of 50 million x 6 cuts = 300 million bandages. Assume that it takes on average three days to cure a cut and bandages are replaced once a day. That makes for 900 million bandages. The adults represent 80% of the 250 million people in the country, or 200 million. Assume that they get a cut once every six months which lasts three days, with bandages being replaced every day. That is 2 cuts per year x 3 days per cut x 200 million people = 1,200 million bandages. The total number of bandages, then, is 900 + 1,200 = 2,100 million bandages. Assume there are approximately 20 bandages in a package, and a package sells for $2. The total size of the market expressed in Dollars is therefore 2,100 million / 20 x $2 which is approximately $200 million. Band-Aid holds 75% of this market which is equal to $150 million.

How many pairs of skis do you expect to sell in the US market as an up-market new entrant? Assume 250 million people in the US. About 10% of those people ski, which equals 25 million people. Assume a pair of skis lasts five years on average. This means that every year 1/5th of the skiing population buys a new pair of skis. That is 5 million pairs of skis per year. Now assume that 10% of the skiing population belongs to the "up-market" segment. Also assume that given the fanaticism and riches of this market segment, they replace their skis twice as often as the average person. That means that the market segment is 5 million x 10% x 2 = 1 million skis. Assume there are five major manufacturers in this segment at this time. That means that each sells 200,000 pairs of skis each year. Assume that as a new entrant, you will be able to attain 10% of the average sales volume in the first year. That is 10% x 200,000 pairs of skis = 20,000 pairs of skis.


Estimate the annual demand for golf balls in the US. There are 250 million people in the US. Let's assume that of those, 80% is physically fit enough to play golf. Of those 200 million people, let's assume that one out of ten plays golf. That is 20 million golfers. Let's assume that the average golfer plays ten times per year. That is 200 million games per year. Assume that during every game, the golfer loses three balls. That is 3 x 200 million = 600 million balls per year that need to be replaced.


How many basketballs are purchased by the NBA each year? To come up with a logical approach to answer an estimation problem, start with the answer and reason backwards about causal relationships. Think of this as a tree diagram. For example, if you are asked to estimate the number of basketballs purchased by the NBA and its teams each year, start out by thinking what basketballs are used for (the cause for purchasing basketballs). Most likely, they are used for games and practice. These are then the first two branches of your tree diagram. To continue to solve this problem, attack one branch at a time. Do not try to move down different paths at the same time, it will only lead to confusion. To continue with the basketball example, let's take the "games branch" of our tree diagram. We know that the number of balls is a function of the number of games and the number of bails per game (the causal relationship). What does the number of games depend upon? It depends on the number of teams and the length of the season (See, it doesn't take a rocket scientist or basketball coach to figure this out, common sense is sufficient). You can make an assumption about the number of teams and length of the season or you can continue to go down the tree to find the root causes for those numbers. Make sure, however, that you do not make the problem too complicated. If you have a reasonable idea of the numbers, go with the assumption and start filling in the equations. Examples of digging deeper into the drivers of the number of games are estimating the number of teams by the number of major cities in the US, or estimating the number of games by the length of the season in weeks and an estimate of the average number of games per week per team. Once you have figured out the first branch, do not forget to do the second one. It is easy to get wrapped up in a long chain of reasoning and completely forget about the "practice branch" in this case. Write the number you came up with for the game bails on a piece of paper so you do not have to use valuable brain space to remember it. A similar reasoning approach as above for the practice balls would try to estimate the number 92

of teams, the number of players who practice on each team, the number of practice sessions, and the average life of a bail.


Value of a new patent A small biotech company has come up with a revolutionary new seed for sugar beets which are exactly the same as regular beets but yield twice as much sugar. The company wishes to sell the patent (which is valid for twenty years) so that the inventors can pay off their venture capitalist and retire to an island with lots of sun and palm trees. What is the value of the patent? The price of a product is determined by the market. Let's assume that there are no inputs for the new seed technology (it's already produced and can simply be cloned), and that agricultural goods are commodities sold to a dispersed market of buyers who individually can exercise little power over the price. The price, then, will be based on the value of the product to the buyer, and by competition from similar and substitute good. To start out with the competition from similar goods: since this is a patent there are no similar goods, and therefore no competition. Substitute goods are regular seeds and possibly seeds for sugar cane. Sugar cane is grown in entirely different climates and is not considered to be a competing product in this market. That rules out one possibility and makes the solution easier. The only possible competition, then, is from regular sugar beet seeds. The value of that product should be compared to the value of our new seeds. Seeds need to be grown into beets, which require land and labor. The farmer using our new seeds has two possibilities: he can grow twice as much sugar with the same amount of land and labor or he can grow the same amount of sugar with half the land and labor. (Let's look just at land for simplicity here.) Do you believe the farmer can sell twice as much sugar? One individual farmer in a commodities market should be able to sell all his increased output at the market price, but if every farmer uses the new technology and doubles his output, the price will have to fall. The question then becomes whether the demand for sugar is elastic. Using common 94

sense, would you expect anyone to consume more sugar (bake more cookies or make more lemonade) when the price of sugar drops? Probably not, because sugar is already a pretty cheap staple product and rarely the most expensive ingredient in something. You might want to think about other uses for sugar such as making alcohol to use as a substitute for gasoline. This market's demand would probably be elastic. That is a good point but let us assume demand for sugar is fixed for now. This is an example of a clue where the interviewer does not want you to pursue this any further. Having established these facts, get back to the original line of the argument and continue. If demand for sugar is fixes, then the only possibility for the farmer is to use only half the land to grow the same amount of sugar. You need to determine the value of the land saved. This could be determined by the market price of agricultural land times the area saved. That's a bit of a problem. There is a glut of land available, and it is unlikely that the farmers will be able to sell their land at all within a period of a few years. Oops! Now what? Another possibility is to see if the farmer may have other uses for the land. Maybe he can grow a different crop? It is possible to grow other crops on that type of soil. For instance, cabbage grows well in those types of climates. The problem is that the profit margins on cabbage are only 20% of those on sugar beets. The beach and palm trees are seemingly starting to slip away from our inventors. It seems that the farmers will not derive a whole lot of benefit from the new seeds. You have looked at the end consumers of refined sugar and at the producers of the beets now. What other players could possibly gain from the new invention. A good way to approach this is to use a value chain or process flow. How does the sugar finally reach the consumer? 95

Sugar beets are produced by the farmer, and then shipped to the sugar refinery by truck. The sugar refinery makes sugar crystals from the beets and packages them. The packaged sugar is then shipped to retailers where it is distributed to the end consumer. The sugar that reaches the end consumer is the same sugar and the same amount that would be shipped if old seeds were used. Therefore, there are no cost savings there. From the farmer to the refinery, however, the amount of beets shipped would be only half the traditional amount. Trucking expenses should drop by 50%. The question is whether the refinery also realizes any production benefits from the reduced number of beets. As it turns out, the processing cost of the new beets will be 25% higher per beet than the old ones. If the number of beets is reduced by 50% and the cost per beet is only 25% higher, there will be a 25% production cost savings to the refinery. The refinery should be willing to pay the farmer a higher price for the new beets. The total savings from the new seeds can be summed up as follows: farmers gain 10% on their profit margins from the opportunity to grow cabbage on half their land (100% is original profit. 20% of this 100% on 50% of the land equals 10%.); trucking expenses from the farmer to the refinery are cut by 50%; and production costs are reduced by 25%. Next you need to find out how much each step contributes to the final price of sugar. Growing the sugar is 40% of the cost, trucking 10%, refining 30%, and distribution 20%. The savings are 10% x 40% = 4% in growing; 50% x 10% = 5% in trucking; and 25% x 30% = 7.5% in refining. This adds up to a total savings of 16.5%. Multiply this number by the annual sugar demand and you get a dollar value of annual savings. How would you estimate the annual demand for sugar?


At this point you drop your head in exhaustion for you will have to do an estimation case within a business case. See some of the examples above on how to do this. Assume that the resulting figure is $2 billion. Next you have to take the net present value of twenty years (the length of the patent) of 16.5% x $2 billion. Don't worry, they won't expect you to actually calculate this off the top of your head, as long as you tell the interviewer that this is the approach you would take.


Battery manufacturer loosing market share A battery manufacturer in the UK is experiencing declining sales. Its product is superior in lifetime and quality to its competitors. How would you approach this issue as a consultant. A decline in sales can be caused by two factors: declining market demand or loss of market share. Loss of market share can be due to competing products or substitute products. First, let's analyze the market. You want to know who the customers are, what the product is, and who the competitors are. The company sells batteries for fork lifts. Sales are made to OEMs (i.e. fork lift manufacturers) and for replacement purposes to large manufacturers and distributors who use fork lifts. The majority of sales are to the latter. Customers are located throughout









manufacturers which are of similar size to our client. What is the trend in market demand? Demand tends to be very stable, growing at approximately 3% per year. If that is the case, our decline in sales must be due to declining market share. Are there any new substitute products or new competitors? There have been no major changes in technology. The only large change in the market place is the emergence of a new Portuguese competitor. This company has managed to grow to approximately the same size as our client in a relatively short period of time. Next, we would like to find out how this company has been able to take market share so quickly in an otherwise stable industry. It is necessary to evaluate the company's price/product proposition to compare it to ours. Our client's product is superior in lifetime and quality to that of the Portuguese competitor. Our price is higher as well, however, 98

but we feel the additional quality more than makes up for this differential. Now that we have established the different value propositions of the two companies, we need to find out what the customer is looking for when purchasing a fork lift battery. Reliability and pricing are the most likely factors for an industrial buyer, and while we outperform our competitor on the former, we are lagging on the latter. The next step would be to evaluate the trade-offs among these two attributes, and to verify our client's claim that the increased quality is worth the price. We know that our client's product lasts longer; we need to know how much longer Our battery lasts for a total of five years while our competitor's only lasts for four years. Next we need to know what the price differential is. Our battery costs £1,500 while that of our competitor's costs £800. That means that the cost per year is £1,500/5 = £300 for our product and £800/4 = £200 for the competitor's. That is not looking good on the surface. Maybe our client should reduce its prices. Does their cost base enable them to do so while maintaining an acceptable level of profitability? Our client's cost base is substantially higher due to the higher quality









significantly higher in Great Britain than in Portugal. Our client is not willing to leave his lukewarm Guinness and jellied eel behind however, so moving is not an option. Therefore, lowering costs is not an option. Let's look a little bit further into the cost/benefit trade-off. So far we have only considered the purchase price as a cost of the product. It is possible that there are additional costs involved. To find out, we need to evaluate the use of the batteries. (You don't need to be an engineer to figure this out, just use your common sense.) Fork lifts will most likely ride around a 99

plant or warehouse moving goods around. The battery powers the fork lift, so will need to be recharged periodically. While the battery is recharging, the fork lift will be out of commission or the battery will need to be switched which takes time. Is there any difference in charging time or efficiency between the competing batteries? It takes 8 hours to fully charge our battery which will then last for 12 hours. Our competitor's battery takes 10 hours to charge and can be used for ten hours. The batteries draw the same amount of electricity per hour while charging, but due to the better design of our battery, output efficiency is higher. This efficiency difference needs to be translated into costs and value for the customer. Value is derived from lower energy requirements, faster turn-around time, and fewer switching operations. Given the fact that our clients are large industrial companies, they will probably work around the clock. Therefore, let's assume a 24 hour a day need for the fork lifts. First, evaluate the energy savings. We need to know the price of electricity drawn per hour. The hourly rate is £0.10. If the fork lift will be used 24 hours per day for say 350 days in a year, it will require 24/12 x 350 = 700 charges of 8 hours each for our battery. That is 5,600 hours at £0.10 or £560 per year. For our competitor, the battery requires 24/10 x 350 charges of 10 hours each per year. This equals 8,400 hours or £840 per year. The difference is £280 per year. Next, evaluate the switching costs. You need to know how long it takes to switch the battery. This only takes a couple of minutes. For simplicity, let's assume the time is negligible. That means that we can assume switching costs to be negligible. Since the batteries are out of commission while charging, however, we will need to evaluate how many batteries we need per fork lift. Assume that our clients 100

operate fleets with multiple fork lifts which can all share the same batteries. For our battery, each fork lift requires one battery to move while another is charging for 8 of the 12 moving hours or 2/3. That means that we need 1 2/3 batteries per fork lift. For our competitor's battery, the battery is charging for the entire moving time. That means that there are two batteries required for each fork lift. The annual purchase cost per fork lift is therefore £300 x 1 2/3 (£500) for us and £200 x 2 (£400) for the competition. That is a cost differential of £ 100 per fork lift. The purchase cost of our battery is £100 higher per fork lift per year, but the energy savings are £280 per year. That means that our battery is a better value than that of our competitor's. Next we need to find a way to relay this information to the customer, because they apparently do not know about this benefit given our loss of market share. We may want to consider using a direct sales force to explain these benefits given the complexity. Fainted materials may also be useful to describe the benefits in detail.

The hot dog stand You have a hot dog stand in front of your office. It serves the workers in your building and two neighboring office towers. You want to buy it. How much is it worth? Valuing a company is done by calculating the net present value of the cash flows at an appropriate discount rate. Therefore, you will first need to estimate the cash flows. The cash flow depends on revenues and cash costs. To estimate the revenues, you need to multiply volume by price. The estimation of volume is identical to the method used in estimation cases described above. Assume there are 500 workers in each building; that is 1,500 potential customers in total. If 80% of these workers like hot dogs, there are 1,200 potential customers. Assume that on average each of these potential customers eats a hot dog once every two weeks. If there are 50 working


weeks in a year, each customer eats 25 hot dogs per year. In total, the hot dog stand will sell 30,000 hot dogs per year. Now assume that one hot dog costs $1.50 and each customer also purchases a soft drink at a price of $1.00. Total revenues for the cart will be 30,000 x ($1.00 + $1.50) - $75,000 per year. Now we need to estimate the costs. Total costs will include cost of goods sold: hot dogs, buns, condiments, soft drinks, and napkins and straws. Additional costs are wages for the operator of the stand, electricity for the heater and refrigerator, depreciation expenses for the hardware, and insurance. Assume hot dogs cost $0.25 a piece and buns cost $0.10. Add $0.10 for condiments, straws and napkins. Cans of soft drink will cost $0.30 wholesale. That means that the total cost of goods sold is $0.75 per order, or 30,000 x $0.75 = $22,500. Assume wages of $5.00 per hour. If the stand is open eight hours a day, one year will have 50 weeks of 40 hours, or 2,000 total hours. Wages, then, are $10,000 per year. Add 10% employment taxes to that for a total of $11,000. Assume electricity is $100 per month for a total of $1,200 per year. Assume the hardware of the hot dog stand costs $10,000 and will last for 5 years. That is $2,000 depreciation per year. Finally, assume insurance is $800 per year. Total cost is $22,500+$11,000+$1,200+$2,000+$800 = $37,500. That means that profits are $75,000 - $37,500 = $37,500 per year. If we assume that annual capital expenditures are equal to depreciation, this figure is equal to the annual cash flow. The final step is to estimate an appropriate discount rate and to discount the cash flows. Assume that there will be no growth in the company, and it will continue operations indefinitely. That means you can use a perpetuity model to estimate the value. Take a risk free rate of 7% (long government bonds) and add a business risk premium. In this case, say that is 6%. That means that the appropriate discount rate is 13% per year. Divide the annual cash flows by this discount rate and you get the value of the


perpetuity. In this case, that would be approximately $300,000 ($288,000 to be precise). This is the maximum price you should be willing to pay.

The elevator improvement You are a manager of a residential high rise building. Tenants have complained about the slowness of the elevators. How would you solve the building's problem? To solve this problem, you can take two approaches: you can change the reality by speeding up the existing elevators or adding more elevators, or you can change the perception by making the wait less aggravating. First explore opportunities for the first approach. If adding elevators in unfeasible due to space limitations, you can try to decrease the waiting time by changing the moving speed of the elevators or by changing the algorithm used to move them. Possible options are: setting the default wait state to the middle floor in the morning (when most people will be leaving their homes to go to work) and to the first floor in the evening (when most people return from work). Another option would be to always have one elevator waiting on the first floor while another is waiting in the middle. A few of the elevators could also be turned into express elevators which serve only the bottom half or the top half of the building. One elevator could be programmed to stop on only every third floor, so that tenants could walk up or down the last floor. Elevators could be programmed to "learn" what patterns prevail at what time of the day, and could optimize their wait states based on that knowledge. Examples of the second type of remedy are to place mirrors in the lobbies so that people can look at themselves while waiting which may make the waiting time seem shorter. Other options are to place television sets in the lobbies (the Wharton Reprographics CNN approach), play music, install lights that show where the elevators are at, put coaches and magazines in the elevator lobbies, etc.


The best solution is likely to be a combination of both types of approaches.

Agricultural equipment manufacturing Q: Your client is a large agricultural equipment manufacturer. Their primary product line, farming tractors, is losing money. What questions would you ask of your client to help them solve their profitability problem? A: It is unlikely that there are too many players in this market. You might want to start off by asking how many competitors there are. Suppose the answer is that there are two direct competitors. What is your client's market share relative to their competitors (your client has 40% of the market, competitor #1: 30%, competitor #2: 15%, with the remaining 15% belonging to many small manufacturers) What-are the market share trends in the industry? (Five years ago, your client had 60% of the market, competitor #1, 15%, and competitor #2, 10%. Obviously, your client has lost significant market share to its two competitors over the last few years.) Do ail three competitors sell to the same customers? (Yes) How is your product priced relative to your competitors? (Your client's product is priced higher than the others.) Has this always been the case? (Yes) Are the products the same? (Essentially yes, they all have the same basic features. Of course, tractors are not commodity items and a few differences do exist.) What are the differences that allow you to charge a premium for your product? (Your client has a strong reputation/image of quality in the market and the market has always been willing to pay a premium for that reputation because it meant they would last longer and need less 104

maintenance. This can be critical for some farmers because they cannot afford to have a piece of equipment break down at a critical time.) Are sales revenues down? Are sales quantities down? (Yes) Is the price down? All costs the same? (No, in fact both the price and costs are up.) Have fixed costs increased? (No, material costs, (variable costs,) have gone up out of sight, and the client has no answer as to why material prices have gone up so staggeringly.) Do you manufacture your tractor or just assemble it? (Primarily an assembly operation) Finished part prices have gone up? (Yes) Raw material prices for your suppliers? (I don't believe so) Have labor costs increased for your supplier? (No) Have you changed suppliers? (No) Why are your suppliers charging you higher prices for the same products? (Well, they're not, the prices have increased as a result of our product improvement efforts. We've tightened tolerances and improved the durability of our component parts.) Why do you make these improvements? (Because we strive to continue to sell the best tractors in the world) Are your customers willing to pay for these product improvements? (What do you mean). Are your customers willing to pay a marginal price which will cover your cost of implementing these improvements? (I don't know, 1 guess we assume that they will...) It turns out that prices have been raised to cover the costs of these improvements, but customers do not value these improvements unless they are essentially free —so sales are down. The client needs to incorporate a cost/benefit analysis procedure into its product improvement process. Don't forget though, that you must consider the long-term effects of these decisions.



Candy company profits Q: Your company is a rather successful producer of candy. It originally started as a single product line. The production process consists of two basic activities: manufacturing and packaging. The firm has also expanded its sales through product line extensions. Management is concerned that sales are growing but profits are not increasing at the same rate. What can your company do? A: This is a revenue vs. cost exercise. Margins are shrinking. Find out about the critical components of cost: raw material, labor and fixed cost. Raw materials are commodities with cyclical prices which have fallen in recent years but are expected to swing up again (this, as you have guessed, makes the problem worse.) Labor and fixed capital has increased per unit over-proportionally compared with ten years ago. Find out that the company's controlling system is still focusing on the manufacturing part of production and the cost explosion occurs in packaging (candy is candy, the product line extension is primarily an issue of different packaging.) Controlling schedules manufacturing which is rather efficient already but not packaging, thus causing slack in labor and fixed capital (small batch sizes, high setup times.) Possible solutions: reduce product lines, introduce controlling/scheduling measures for packaging. Qualifier: Are the company's customers (i.e. retailers) willing to accept the reduced product line? Find out about revenues: Revenue killers: concentration of retailers, trade brands, retailers demand large introductory discounts for new products, high failure rate of new products.


Possible solutions: streamline product line, reduce low margin trade brand production, emphasize pull marketing, reduce introduction rate for new products. (Operational aspect): optimal plant location with respect to transportation.


Punch Line: Should the company seek dominance now? Have









fragmenting factors from the market are still in place. The company has not changed its strategy in the fragmented industry, (dominance makes no sense) but has gained an advantage by operational changes.

Consulting firm business model diversification You are the managing director in a large international consulting firm. Traditional strengths of your firm have been solving strategy and








increasing number of your firm's proposals are being rejected because of a lack of information technology expertise in your firm. So far, your firm's growth has been strong enough that proposals lost have not hurt annual earnings. Nonetheless, you are becoming increasingly concerned about the need to develop the firm's capabilities in information technology. Q1: Assuming your concern is valid, what reasons will you provide to









technology skills? Q2: Assuming you are able to convince other partners of the importance of IT expertise, what steps would you take to rapidly build IT capacity in this area? Q3: What are the major risks in executing an IT capacityexpansion? Answers: A1: Good answers focus on the value of IT to clients: discussion topics include the increasing importance of information in business, strategic value of information and information flows, importance of information


systems for implementing new organizational structures and management control systems. Better answers focus on the costs of losing clients to competitors: discussions included the encroachment costs of having clients talking with competitors about IT problems, risk of losing credibility with clients by not being able to solve a problem. A2: Good answers will focus on various methods to build expertise: buying expertise by acquiring another firm, by raiding IT practices of other firms for a few key consultants, building capacity through recruitment of IT experts and training them to be consultants, building capacity by training current consultants in IT practice skills, establishing a strategic alliance with a IT boutique firm. Candidates should discuss the pros and cons of each method proposed; impact on firm's current culture, cost to the firm, time needed to build expertise, etc. Better answers will realize the importance of stimulating client demand as capacity builds through seminars, articles strategic studies in IT areas... A3: Good answers depend on the expansion methods discussed, but an important issue is the loss of the firm's focus away from just strategy and organization. Better answers will focus on the difficulty of implementation in IT; rapid technological changes in the IT industry require significant ongoing training and development costs; new practice cultures may be significantly different from current culture, especially if "external experts" are brought into the organization.

Pricing Strategy for a New Product Your client is General Electric (GE), and they've just developed a new product: a new light bulb that can last eternally. Your job is 110

to help them go to market by defining their pricing strategy. The new light bulb cost S1 billion to develop. YOU: Are the new light bulbs different from conventional light bulbs in any other way? Are the light bulbs intended to replace regular incandescent light bulbs or fluorescent light bulbs? Interviewer: You can assume that the new light bulbs can be used to replace both incandescent and fluorescent light bulbs. You can further assume that the new bulbs are perfect replacements for these types of bulbs (i.e., they are available in two different forms, one that is exactly like any other incandescent bulb, and one that is like any other fluorescent bulb). YOU: In order to determine the optimal pricing strategy, we'll need to look at both microeconomic and marketing theory. First, it may be useful to determine the upper and lower limits on the price GE can charge for its new light bulbs. In general, price is bounded by two things: the product's economic value to the customer (EYC) and the company's average cost in producing the product. The EVC sets the upper bound in price since a person will not pay more than the product is worth to her, and the average production cost sets the lower bound since the company can not earn economic profits if the price is below this point (in the short run, however, the company will want to produce as long as price is above average variable costs since this yields a positive contribution to fixed costs). The optimal price must fall somewhere within this range.

Interviewer: How would you determine the lower and upper limits in price? YOU: 111

The average total cost of production can be obtained by considering fixed costs for the product (e.g., overhead and administrative costs), plus manufacturing costs, plus distribution costs, plus selling costs, and so on. Of course, the average cost will vary with the level of production. Generally, the average cost function is U-shaped (where the x-axis measures quantity and the y-axis measures average cost). Note that the average total cost of production is independent of the $1 billion development costs. This makes sense since this is a sunk cost. The sunk cost does affect the overall return on investment (ROI) and the internal rate of return (IRR) for the project, however. The EVC can be computed as follows: First, we assume for simplicity that the resale value of the new light bulb is negligible after it has been used for many years (this is akin to any other old household item). We further assume that the average person will be able to use one of the new light bulbs for 50 years before it is discarded (either because it is accidentally broken or because the person dies and his belongings are disposed of). Finally, we assume that a normal light bulb lasts an average of 6 months and costs $.50. Now, to compute the EVC we need to determine how much one of the new light bulbs will save a person. Since we assume that the new light bulb has an effective life of 50 years, it will save a person $1 a year from having to buy two old light bulbs for 50 years. Thus, the EVC is approximately the net present value of a $1 annuity for 50 years (to be more accurate, we would have to consider the economic value of the time savings from having to buy and replace normal light bulbs, the reduced risk of being electrocuted from not having to frequently changing normal bulbs anymore, and so on. We assume that this is negligible. At the same time, however, we must also realize that the new, significantly more expensive light bulb may be accidentally broken prematurely (e.g., while moving to a new house), resulting in an economic loss for the customer. The probability of this should be considered in the EVC. 112

Interviewer: Good. Now how would you determine the optimal price? YOU: The optimal price can be accurately estimated. We know that at the industry level, demand for light bulbs is highly inelastic since light bulbs have become a necessity and there are few substitutes for them (crosselasticities are low): As a result, the optimal pricing strategy for GE is to price its new bulbs slightly below the EVC for the new bulb (which is equivalent to pricing is slightly below the market price for conventional bulbs) since this will provide consumers a savings in using the new bulb (this assumes that the average production cost for the new bulb is below this price level. If it is not, it is not economical for GE to produce and sell the new bulb). If GE were to price its bulbs above its EVC, consumers would have no incentive to purchase it. If it were to price the new bulb at the EVC, the new bulb would offer no advantages to a conventional bulb, and it would just be another commodity bulb. As a result, it would not allow GE to significantly increase sales and profits. GE needs to consider a few other issues in its pricing strategy. First, it should price its new product low initially to induce trial. Second, severe cannibalization of its conventional bulbs is likely to result. Thus, GE needs to ensure that the sale of its new bulb will offer a higher contribution margin than that from the sale of its conventional bulb. Lastly, GE needs to consider the industry's competitive reaction. Since the industry is a commodity market, P = MC, and thus, it is unlikely that competitors can afford to compete by lowering the price of their products. They may, however, attempt to build their brands to make their product less of a commodity. Interviewer: How would your analysis be different for GE's business customer segment (i.e., for businesses that use the new bulb to replace fluorescent lights)? 113

YOU: In our consumer analysis, we assumed that the economic value due to the time savings from not having to buy and replace new bulbs is negligible (primarily because the opportunity cost is negligible - what is the opportunity cost of saving 2 minutes to pick up light bulbs while at the grocery store or from saving 2 minutes at home installing the bulb?) With business customers, however, this is not the case. The elimination of the need to replace bulbs periodically will save businesses money from having to hire maintenance personnel to do this. Thus, the EVC for businesses will be higher than that for consumers, and GE can charge businesses a higher price. In addition, we also assumed that the resale value of a new bulb that has been used for many years is negligible for the consumer since, aside from garage sales, it may be difficult for the individual seller to locate a buyer (this is currently changing as a result of the Internet, though. But, then again, how many people would be willing to pay a non-negligible amount of money for an old household item, such a hammer or an old mirror, both of which can theoretically last a long time like the new GE light bulb?). This is not the case with business customers, however, since the resale market for old business furniture is relatively strong. In addition, it is likely that the expected lifetime of a bulb used in a business environment will be longer than that used in a consumer's home. The reason for this is that bulbs are generally fixtures in the office building even as the occupants in the building change. Thus, the expected lifetime of the new bulb in a corporate office is likely to be about the same as that of the building. These factors will allow GE to charge an even higher price to its business customers. Interviewer: Good. I think that's all I wanted to cover with this case. Do you have any question for me about the firm?

New Market Entry - Amusement Park Expansion 114

Our client is XYZ Corporation ("XYZ"), the owner of a single amusement









government and offered 100 acres of land adjoining the current amusement park for £10 million. XYZ has engaged us to help them assess whether or not they should, purchase the land and/or expand their existing park. This is intended to be a two part question. Try to push the interviewee towards the qualitative ("strategic") aspects of the case









quantitative analysis of the case. YOU: The following facts are available only upon request for the strategic analysis: • XYZ's park is considered a regional park and does not get national attention; • This is the only amusement park for a 250 mile radius; • The average park visitor travels 30 miles to the park; • Only 1% of park visitors travel more than 100 miles to visit the park; • Other competing businesses in the area include: go carts, putt putt golf, video game arcades, water skiing and other thrill sports; • The park's attendance has been growing at an annual rate of 10% over the past five years; • The average park visitor is 17 years old; • 30% of the park visitors are adults (over the age of 18); • All of the parks vendors (food, video games, and shops) are wholly owned by the XYZ; • XYZ has the financial wherewithal to acquire the land and develop all 100 acres; 115

• Annual population growth for the 250 mile radius is expected to remain flat at 3%; • It can be assumed that XYZ has the internal management expertise to operate a larger park and that enough local employees are available to run the new operations at existing wage rates. The following is a potential framework that could be used to organize qualitative aspects of your answer: Market and Competition: After a careful analysis of the above facts, it appears that an expansion might be feasible, and is worth further consideration. Growth at the amusement park seems to be strong and although competitors exist for pieces of the amusement park's business, no businesses directly compete with the amusement park for a 250 mile radius. Additionally, it appears that amusement park visitors of this park are generally unwilling to travel outside of the area to go to the next closest amusement park. It is also safe to assume that amusement parks, in general, have high entry barriers due to the initial capital investment, which might discourage potential new entrants. Along these same lines, the expansion of XYZ's existing park might actually serve to discourage new entrants, since XYZ could end up having excess capacity which could give it a competitive advantage due to pricing flexibility. XYZ's Corporations Capabilities/Limitations XYZ appears to have the financial wherewithal to expand the park, as well as the internal management to run the expanded operation. Also, given that XYZ owns all of the park's vendors, an expansion could bring in significant revenues in addition to entrance fees. Interviewer: About halfway through the interview, move on to the quantitative part of the interview.


YOU: The following information is available upon request for the quantitative analysis: •

The amusement park averages 70% capacity, and is open year

round; •

The capacity for the amusement park is currently 2,000 visitors;

On 50 days a year, the park fills to capacity, resulting in long ride

lines for visitors; •

It is estimated that the excess demand on these 50 days is

approximately 600 visitors; •

The average ticket price is $23 ($30 for adults and $20 for kids);

The average visitor spends $17 on food, games, and souvenirs;

The land would cost $1 million per 20 acres to develop (i.e. add rides, attractions, shops, restaurants, etc.);

The expansion project would increase the amusement park's

capacity by 25%; •

The expected rate of return on the existing business is 12%;

XYZ has access to fluids at its existing weighted average cost of

capital; •

The profit margin on XYZ's operations is 20%.

An NPV analysis is very useful in the assessment of this potential project. All of the costs of the project should be considered as well as the annual free cash flow from the project. The costs include the cost of the land, the cost to develop the land, and the marginal costs of running the new operations. Costs: 

Land: $10 million (all year 0) 117

Development Costs

$5 million (all year 0)

Marginal Costs of Running Operations 80% of Revenues (on-going)

Revenues: Assuming that historical growth trends continue, and that when the park fills to capacity visitors stop coming, the following is a potential NPV scenario... On the 50 days that the park experiences excess capacity, 500 additional visitors could be admitted due to the park's expansion. Each visitor is assumed to spend $23 to enter the park, and $17 at the vendors, for a total of $40 per visitor. Annual Revenue = 50 days * 500 additional visitors * $40 per visitor - $1 million Assuming that XYZ's incremental profit margin will remain the same for the expanded section of the park, the 20% profit margin can be applied to these revenues to determine the net profit margin. Annual Profit Margin = $1 million * 20% = $200,000 Assuming that future capital expenditures match depreciation on the expanded section of the park, annual free cash flows due to the expanded section of the park would equal the annual profit margin of $200,000. Assuming that the growth is constant at the historical rate of 10%, and that the appropriate discount rate is 12%, the free cash flows can be discounted as a perpetuity. NPV of Project = -Land and Development Costs + [Free Cash Flows / (Discount Rate - Growth Rate)] = -$15 million + [$200,000 / (12% -10%)] = - S5 million Based on this, it appears that XYZ should not expand its existing amusement park since the project has a /negative Net Present Value.

Aircraft Manufacturer 118

In the 1970's, Lockheed Martin manufactured L-1011 wide-body aircraft for commercial airlines. The industry was very cyclical with swings in demand occurring a frequently as every 6 months (see chart below). During the down months, the Lockheed would have to layoff employees and shutter the plants, which created turmoil for the company and the local community. Jet aircraft were normally built to the order specification of the purchasing airline.

To alleviate the costs of cyclical swings, Lockheed

considered building aircraft to a predetermined schedule based on average expected aircraft sales over the next five years (see below). Do you think this is a good idea? What are the pros and cons of pursuing such a plan?

Possible Solution: Unlike some other cases, this case doesn't really have a yes/no solution. The important thing on a case like this is to identify the major issues and state your approach for arriving at a solution. The interviewer wants to see if you have a basic understanding of manufacturing business and the costs inherent in running such an operation. On a real problem like this, you would need to model the costs (with a spreadsheet) of the current (build to order) approach and the new approach (build to schedule) and then test the new approach under a range of sensitivities, both positive and negative. Revenues are unlikely to be impacted by this decision, unless having aircraft in inventory would facilitate greater sales. A good case solution would identify the cost drivers & and risks and arrives at an 119

educated guess of the right answer. Let's look at some of the costs under a build to schedule plan: 1) Inventory or Working Capital Holding Costs - This could be huge under a build to schedule. If demand is not as predicted or the market heads into a cyclical dip, Lockheed could end holding a lot of veiy expensive (tens of millions of dollars) of inventory that just sits on the books. At a 6-8% risk free rate of return, the inventory holding costs of such expensive assets would add up rapidly. 2) Labor Costs - Labor would probably be cheaper under a build to schedule. The company could avoid costly retraining and rehiring of its workforce after layoff. Additionally, the company would have to pay less severance costs due to fewer layoffs. With a more guaranteed production schedule, the company may be able to extract wage concessions from its unions. But, such savings would evaporate if the company were to busily build new aircraft that the market doesn't want. 3) Technological Obsolescence - With build to schedule, you run the risk of building aircraft that aren't demanded in the market because they are obsolete. Thus, if a competitor introduces a much better model at the existing price points or a technology change renders current models as inefficient, Lockheed had to liquidate existing inventory at fire sale prices. 4) Forecasting - A build to schedule plan for such costly goods requires a very accurate forecast of future demand. Can demand really be forecasted with sufficient accuracy? 5) Rework Costs - Airlines request specialized configurations of the aircraft to meet their particular needs. If the company pursues build to schedule, they would need to budget rework costs to change pre-built models to the specifications of the purchasing airline. Or, if they only build aircraft partially, how will they handle the production backlog of moving these partially completed aircraft through the remaining production steps? 6) Fixed Production Equipment and Facilities - In general, the fixed costs of production equipment and facilities should not change with a change in 120

production approach. Now, if the company amortizes equipment on a per unit basis (vice yearly), then net income could be affected under the new plan. But^ cash flows, the important thing to look at when making business decisions, should not be affected. 7) Variable Materials Costs - These include materials and components required for building the aircraft. Under a build to schedule plan, Lockheed could probably negotiate lower costs from their suppliers since they would be able to guarantee a steady stream of purchases. 8) Unused capacity - Under build to schedule, you're likely to have unused production capacity since you currently carry sufficient capacity to meet cyclical demand surges. The analysis should carefully examine the existing production assets to determine if savings could be realized through capacity reduction. After identifying the variables, the interview would expect you take a guess on the right answer based on your assumptions. It turns out that build to schedule approach is not viable for this company because they cannot predict demand with sufficient accuracy and the capital holding costs are too expensive.


12 Insider Views from MBA36 The following section includes some first hand insights from the summer internship interviews, collected from MBA36 candidates in 2011. Hereby, you will find an outline of the interview process and structure, as well as examples of common cases for some of the top consulting brands. Before that, we have summarized the top 10 Do’s and Don’ts for a successful application in consulting based on our experiences.

MBA36ers top 5 Do’s and Don’ts


A.T.Kearney 

Three Rounds of Interviews and two interviews per round (40-45 minutes per interview)

First part of the interview generally lasts for about 15 minutes and it starts with the interviewer introducing himself. Following that you need to give a short introduction about you covering your educational & professional background including some interests, track-records citing 1-2 examples. Then there would be questions like “Why AT Kearney?” “Why Consulting?” “Why MBA at SDA Bocconi?” Be prepared with some crisp answers to these types of questions (ideally 30 seconds). AT Kearney gives more importance to this part as compared to other consulting companies.

The second part is the case part and mostly you can expect one case on classical market sizing. For example “Estimate the market for Tennis Rackets in the EU” or “How many gas stations in Italy are profitable?” or “What is the demand for Razor blades in Germany”. The key to these types of questions is about the approach; they are not looking for the right numbers but the approach you take to estimate the numbers. Always try to use the numbers and percentages in a way that it’s close to accurate and the numbers are easy to calculate (like 5%, 10%, 20% etc) as that would allow you to focus more on the concept rather than calculations. There can be famous consulting interview questions like “Why Manhole covers are round” basically to test your logical thinking.

The other type of cases which involve more understanding and application of frameworks are like “An international company wants to consolidate country-specific logistics units into shared service logistics” The key to this question was that the labour costs in the shared service centre were way higher than in the country units. That’s why the project was not carried out. Further points included synergies, economies of scale, country-specific customization etc.


Another case this year was “You are given situation of a publisher client that wants to launch a new book. You are a Consultant aiming to support the company in the launch & market sizing activity. The specific task was to ask the CEO of the company 5 questions that would help the team to do the market sizing. Since the questions were directed to the CEO you should focus on the big picture and the questions should be in the direction of Marketing Mix like USP, sales channels, amount of advertising effort etc.

The last part of the interview is the Q&A part wherein you should ask some questions to the interviewer and it’s a quite important part. They are very to open to answering any type of questions like growth in past years etc. This is the part where you can show your preparation and motivation to join the company.


Booz & Co. 

Expect three rounds of Interviews

First & Second Round – Two case based interviews in each round.

Third Round – Non Case based behavioural interview with a Partner

The first round of interview is characterized by more pressure and the interview is quite challenging. There were cases to calculate the breakeven point, market sizing and some related to sales and distribution. The interviewer asked to find out why a car maker was not performing in selling certain additional services.

The second round of interview is generally friendlier than the first one. There can be cases on market entry strategies, market sizing etc. Sometimes they even ask some brain teasers. The interviewee was also asked about his views on M&A synergies.

The third round of interview which is with a Partner is more of a discussion than an interview. It includes discussing your objectives, experience and potential career in Booz.


McKinsey & Company 

Two Rounds of Interviews, first one with two interviews and second one with three. Generally about 40-45 minutes per interview

All the interviews are usually conducted on the same day and the interviewers are Principals or Partners. The interviews happen in English and the local language of the office you applied for. It starts with a behavioural interview followed by a case and Q&A.

The behavioural part is generally scanning through your CV and then interviewer might want to clarify some doubts if he has. Then the interviewer asked to tell them a story (personal or professional) which would demonstrate that you have some characteristics to be a Consultant like natural curiosity, empathy, endurance etc.

In the case part of the interview generally the questions are not targeted towards applying frameworks and methodologies but the cases are more focused on natural thinking and ability to improvise at the moment. Some examples of the questions are:

What does selling lettuce at the flea market and personal computers at an electronic megastore have in common? (the goal here was to think that both products have short useful life and therefore they need to be sold quickly and have demand forecasted accurately before orders are placed)

Name 10 ways to incentivize phone salesmen (you can go from the classic commission schemes to non-monetary awards, team building & top mgmt exemplary behaviour)

Why is our profitability falling even though we are selling the same volume, at the same price and buying at the same price from the same suppliers? (the mix of purchases has changed; we are buying at the same price as before but we are buying more from the most expensive supplier)


They look for numerical accuracy in your calculations and would expect up to 2 decimal places accuracy. They might also sometimes bluff and challenge you with the numbers.

In the Q&A round you are free to ask any type of questions and they would be happy to answer. They not merely look for professional excellence but also for an interesting human being.

Roland Berger Strategy Consultants 

Two Rounds of Interviews and two interviews per round

Generally 40-45 minutes per interview

First round – On SDA Campus

Second round – With the local office for which you have applied. (Usually with Partners)

The first part of the interview is generally talking about you and your background and how you can compare your experience with what you expect at Roland Berger. Then the interviewer explains about the company and the values of the company. This part is more like a chat in which they try to know you more both on personal and professional front. They might also talk about your general understanding about some industry like aerospace etc. Also, there can be a competency based interview during the first part of the interview.

The other part which is the case part is generally focused on operations but it might not always be the case. This year there was a case to prepare a questionnaire, which should be sent to a water producer before the start of the project in order to generate a first felling. You need to figure out what data you should ask for to analyze the supply chain. Then the interviewer asked potential weaknesses of the questionnaire and how those weaknesses can be addressed.


Another example of a case was that the interviewer asked to sell your pen to her. Although it’s not a typical case question you need to be prepared for such questions.

There was another case to estimate the potential profits of a taxi driver in Milan. It’s a typical Revenue-Cost analysis but keep in mind about the holidays and sometimes taxi drivers work on weekends as well.


The Boston Consulting Group 

Two rounds of interviews with two/three interviews per round

Generally 40-45 minutes per interview

First – Milan office usually with Case Team Leaders or Principals

Second – With the local office for which you have applied. Likely to have an interviews with Partners and potentially the Director of the office

Initial part of the interview is generally introduction wherein the interviewer introduces himself in about 2-3 sentences and then you need to have your 2-3 minutes elevator pitch ready. Some other general questions are like why do you want to join BCG? Why did you choose SDA for MBA? The whole process would last usually 5-10 minutes.

The second part which is the case part is the most important part of the interview. Some real examples from this year are a case about a retail shop for electronic goods (TV, HIFI, etc) that faces declining profits in comparison to another retail shop on the opposite side of the shopping street, which was prospering. Main pointers to solve this case are investigating






potential, and pricing. The solution can be linked to a different product mix (removal of slow moving low profit SKUs) with an optimized pricing (bundled offers), clearer communication of USPs, and improved customer care (loyalty programs). 

Another example of a case: Evaluate the warehousing efficiency in a refinery (Oil & Gas Sector). It involves outlining various supply chain steps and then focus on the different stock/warehouse types (raw materials, work in progress, finished goods). Compute some basic indexes (stock turnover & coverage) including computations (on paper and in short time). Finally provide some recommendations by applying different approaches like ABC analysis, and outsourcing of non core processes. 129

The cases get more sophisticated the faster you are. Generally there would be one case per interview. The third part i.e. Q&A session is usually limited to 1-2 questions. However, “non-standard questions” that show a good understanding of the challenges that consultancies face or that are very specific about BCG are definitely appreciated.


13 Online Resources

The central internet address is the Management & Consulting Club web space, which can be found at the following URL:

The following internet-links might come handy for your further reference and research:

Vault provides many insights into consulting firms and the most important ranking

Glassdoor provides information about salaries and insights from companies and is therefore extremely useful for you salary negotiation

Wetfeet is a general application advice homepage:

If you speak Italian, this page with McKinsey content features useful information for the consulting interviews (cases) in Italian. 05_2004/index.htm



14 Consulting Club History MBA 36 Name


Company Post-MBA


Wolfram Lipp


Roland Berger Strategy Consultants


Björn Kuse


Bain & Company

[email protected]

Anna Thanopoulo u

Marketing & Networking

McKinsey & Company

annathanop@gmail. com

Filippo Musso


Bain & Company

filippomusso@gmail. com

Corporate Franceso Fei Relations Italy Corporate Selene Relations Vasco Italy IT/ External Dhiraj Jha Communicati on Ashis Dash

Corporate Relations WW

Aruna Yadav

Corporate Relations WW

francesco.fei@hotm selene.vasco@gmail. com dheeraj7890@gmail. com

[email protected] om

MBA 35 Name


Company PostMBA

Pano Papadopouos



Marzio Forlini


Bain & Company

Mail panos79p@gmail. com marzio.forlini@bai

MBA 34 Name


Company PostMBA



Marco Grieco



The Boston Consulting Group

Grieco.marco@bcg. com

View more...


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