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171199LNZXL315FRAH-C1
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CASE INTERVIEW WORKSHOP
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1. Introduction
2. A good approach to case interviews
3. Preparation tips and hints
4. Breakout sessions
5. Drinks
TODAY’S AGENDA
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1. Introduction1. Introduction
2. A good approach to case interviews2. A good approach to case interviews
3. Preparation tips and hints3. Preparation tips and hints
4. Breakout sessions4. Breakout sessions
5. Drinks5. Drinks
TODAY’S AGENDA
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• To clarify what we are looking for in candidates
• To clarify what we are looking for in candidates
• To share with you what McKinsey considersa good approach to case interviews
• To share with you what McKinsey considersa good approach to case interviews
• To help you assess and improve your level of preparation for the upcoming interviews
• To help you assess and improve your level of preparation for the upcoming interviews
• To give you the opportunity to meet (more) McKinsey consultants
• To give you the opportunity to meet (more) McKinsey consultants
• To kick off the weekend with some drinks!• To kick off the weekend with some drinks!
WHY ARE WE HERE TODAY?
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Presence Communication Empathy
Presence Communication Empathy
Personal impact
Personal impact
Personal initiative Teamwork Entrepreneurship
Personal initiative Teamwork Entrepreneurship
LeadershipLeadership High standards
of excellence Energy level Persistence
High standards of excellence
Energy level Persistence
Drive & aspiration
Drive & aspiration
Problem solving
Problem solving
Intellectual capacity Practical orientation Quantitative comfort
Intellectual capacity Practical orientation Quantitative comfort
WHAT WE LOOK FOR IN INTERVIEWS
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Designed to measureDesigned to measure
• Problem solving
• Tolerance for ambiguity
• Communication skills
Description of business situationDescription of business situation
• Open-ended
• Usually taken from a real situation
WHAT IS A CASE?
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• Not unlike a consulting situation for new Associate
– Unfamiliar territory
– Real-time ‘thinking on your feet’
– Never enough facts or time
• No ‘right’ background for consulting
WHY DO WE USE CASES?
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PurposePurpose
• Broad functional skills
• Big-picture perspective
• Comfort with details, analysis
Classic casesClassic cases
• Why is the profitability of Company X declining?
• Impact on company of a consolidating industry?
• Should Company X add capacity?
• How should Company X react to a new competitor?
• Should Company X enter/exit a new/old market?
DIFFERENT TYPES OF CASES
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1. Introduction1. Introduction
2. A good approach to case interviews2. A good approach to case interviews
3. Preparation tips and hints3. Preparation tips and hints
4. Breakout sessions4. Breakout sessions
5. Drinks5. Drinks
TODAY’S AGENDA
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Synthesise findings into recommenda-tions
ConcludeConclude
Request information to test hypothesis
AnalyseAnalyse
Develop approach to solve problem
StructureStructureClarifyClarify
Ensure complete understanding of business issue
A GOOD APPROACH TO CASE INTERVIEWS
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• A car manufacturer has approached McKinsey with the following question:
“Our customers wait up to 8 months to receive their new car. On the other hand we have 8 months’ inventory. Something must be wrong with our processes, but we don’t know what. Can you help us find out why?”
• A car manufacturer has approached McKinsey with the following question:
“Our customers wait up to 8 months to receive their new car. On the other hand we have 8 months’ inventory. Something must be wrong with our processes, but we don’t know what. Can you help us find out why?”
• You are alone at the client site with the client’s project leader; he is keen to get your early thoughts on the subject
• You are alone at the client site with the client’s project leader; he is keen to get your early thoughts on the subject
• The engagement manager will arrive only tomorrow and you did not get a chance to talk to the partner to find out what his hypothesis is
• The engagement manager will arrive only tomorrow and you did not get a chance to talk to the partner to find out what his hypothesis is
CAR MANUFACTURER EXAMPLE
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ConcludeConcludeAnalyseAnalyseStructureStructureClarifyClarify
• Listen closely to problem definition
A GOOD APPROACH TO CASE INTERVIEWS
• Paraphrase to confirm problem statement
• Ask questions to improve understanding
• Pause to think
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Summarise understanding“If I understand you correctly, the problem is the following• Customers wait up to 8 months for their new car to be
delivered• The manufacturer has 8 months’ inventory
Why?”
Summarise understanding“If I understand you correctly, the problem is the following• Customers wait up to 8 months for their new car to be
delivered• The manufacturer has 8 months’ inventory
Why?”
Ask clarifying questions (you may make yourself notes)• “Is inventory finished products, parts before assembly or raw
material?”• “Is inventory sitting at the plant or at the car dealers?”• “Are car dealers independent?”• “Is 8 months customer waiting time calculated from car order
to delivery?”
Ask clarifying questions (you may make yourself notes)• “Is inventory finished products, parts before assembly or raw
material?”• “Is inventory sitting at the plant or at the car dealers?”• “Are car dealers independent?”• “Is 8 months customer waiting time calculated from car order
to delivery?”
Pause: Think!Pause: Think!
CASE EXAMPLE - CLARIFY
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ConcludeConcludeAnalyseAnalyseStructureStructureClarifyClarify
• Describe your overall approach
A GOOD APPROACH TO CASE INTERVIEWS
* Mutually exclusive, comprehensively exhaustive
• Break the problem into discrete pieces (MECE*)
• State clear hypothesis
• Use framework – if appropriate
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Customer orders
Car inventory
Hypothesis
• Part of the 8 months’ customer maximum waiting time is due to logistics constraints and order processing inefficiencies
• Part of the 8 months’ customer maximum waiting time is due to logistics constraints and order processing inefficiencies
• Inventory is inevitable given current processes because production pattern of different car models is not related to demand
• Inventory is inevitable given current processes because production pattern of different car models is not related to demand
USE HYPOTHESIS AND STRUCTURETHE PROBLEM
Structure the problem
• Follow one car from manufacturing to delivery
• Follow one car from manufacturing to delivery
Manufac-turing
Manufac-turing
Inventory/transportInventory/transport DeliveryDelivery
• Composition of inventory
• Composition of inventory
• Follow one customer order from sale agreement to delivery
• Follow one customer order from sale agreement to delivery
Inventory/transportInventory/transport DeliveryDelivery
Agreesale
Agreesale
Locatecar
Locatecar
Manufac-turing
Manufac-turing
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InternalInternal
• Cost structure
• Value chain
• Processes
• Organisation
• Performance over time
ExternalExternal
• Customer demand
• Customer segments
• Industry structure
• Regulatory environment
STRUCTURING - EXTERNAL vs. INTERNAL
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• What are the competitive advantages of the company?
• What are costs compared to competitors’?• What is the split between fixed and variable?
• What is the level of competitive intensity in the industry?
• How are the products differentiated?• What substitutes exist?
CompanyCompany
CompetitionCompetition
CustomersCustomers • What segments exist?• How do they make purchase decisions?• What specific features do they look for?
STRUCTURING - 3Cs
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• Cost
• Channel
• Pricing
• Product
• Place
• Promotion
• Cost
• Quality
• Speed
• Supply
DistributionDistributionMarketingMarketingManufacturingManufacturingR&DR&D
• Product development
• Innovation
• Responsiveness
STRUCTURING – THE ‘BUSINESS SYSTEM’
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• Payables
• Long-term debt
• Other liabilities reserves
• Shareholders’ stock equity
– Common
– Retained earnings
Liabilities
Income statement
ProfitsProfits
RevenuesRevenues
CostsCosts
PricePrice
VolumeVolume
Fixed• SG&A
Fixed• SG&A
Variable• Labour• Materials
Variable• Labour• Materials
STRUCTURING - FINANCIAL STATEMENT
Balance sheet
Assets
• Cash
• Investment
• Receivables
• Inventories
• Property, plant, equipment
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Industry structure
Competitive positionCompetitive position
Us
Them
Us
Them
Barriers to exit
Barriers to exit
Barriersto entryBarriersto entry
Substitution threats
Substitution threats
SuppliersSuppliersCustomer
buying factors
Customer buying factors
External environment• Change in government regulations• Major economic shifts• Changing social concerns
External environment• Change in government regulations• Major economic shifts• Changing social concerns
STRUCTURING – PORTER FIVE FORCES
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ConcludeConcludeAnalyseAnalyseStructureStructureClarifyClarify
A GOOD APPROACH TO CASE INTERVIEWS
• Walk the interviewer through your thinking
• Prioritise issues
• Ask relevant questions
• State findings for each analysis
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DeliveryDelivery
• Dealer check• Arrange
appointment• Deliver
UNDERSTAND ORDER PROCESSING - EXAMPLE
Further analysis• 5 options (2
possibilitiesper option)
• One combina-tion of options per batch
• 3 weeks transportation time
• 32 possibilities • Takes >7 month to complete one cycle
Transport/Transport/inventoryinventory
• Transport by ship• Cars shipped
once a week
Manufac-Manufac-turingturing
• Centralised in the U.S.• Done in
batches(1 week)
DealerDealeridentify caridentify car
• Local inventory• Factory
inventory• New build
required
Agree saleAgree sale
Process• Price• Car model• Options
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ConcludeConcludeAnalyseAnalyseStructureStructureClarifyClarify
A GOOD APPROACH TO CASE INTERVIEWS
• Summarise the discussion
• Discuss trade-offs
• Develop overall recommendations
• Relate back to problem statement
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Propose actionable recommendationsPropose actionable recommendations
• Manufacture cars in smaller batches
• Propose fewer options• Move to dealer-fitted options
(whenever possible)• Introduce flexible
manufacturing system
SynthesiseSynthesise
(The 30 second elevator summary)
• “Your customers wait up to 8 month for their new car while you carry 8 month inventory because manufacturing of batches of car models is not related to demand– 5 options implies 32 models– Batches of 1 week implies 7
month cycle– Add 3 weeks transportation and
it makes 8 month maximum waiting time”
CONCLUDE
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1. Introduction1. Introduction
2. A good approach to case interviews2. A good approach to case interviews
3. Preparation tips and hints3. Preparation tips and hints
4. Breakout sessions4. Breakout sessions
5. Drinks5. Drinks
TODAY’S AGENDA
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HINTS . . . WHAT TO DO
• Relax!!
• Practice case problem solving before the interview
• Listen (take notes if you wish)
• Ask a few questions
• Structure, structure, structure
• Explain your thought process
• Work from hypotheses (guess a little)
• Gather and analyse key facts (80/20 rule)
• Push for a conclusion
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• Force a framework that does not fit
HINTS . . . WHAT NOT TO DO
• Jump to a conclusion without explaining your thought process
• Be sure you have ‘the answer’ and ignore signals/hints from the interviewer (the answer is obvious . . . )
• Wild horses ( . . . and I refuse to change my mind)
• Hide from the details (or the numbers)
• Get frustrated
• Do a post-mortem (in or after interview)
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• Show enthusiasm, interest
ENJOY!
• Go beyond the obvious
• Do not get stuck in cookie cutter analysis
• Build your skills/confidence to cover the basics competently (qualifiers)
• Real order winner is insight and originality