200 State Street, Boston, MA Associate Mock Case Interview Dartmouth College October 8, 2004

xxxxxxxxxxxx 2 Agenda Case Preparation Case Assessment Case Execution

xxxxxxxxxxxx 3 Case Preparation Case Question: Fenway Park T-Shirt Vendor Case Question -Assess whether or not a Red Sox t-shirt vending cart operated outside of Boston’s Fenway Park can be a profitable business Case Question -Assess whether or not a Red Sox t-shirt vending cart operated outside of Boston’s Fenway Park can be a profitable business Background Facts -Fenway Park is home to the Boston Red Sox, a major league baseball team -Many vendors operate single-cart businesses (e.g., hotdog carts, ice cream carts, t- shirt carts,etc…) immediately outside ballpark grounds for pre- and post-game sales -Average game attendance:30,000 -Average game duration:5 hours (includes pre- and post-game) -160 games per season:50% home, 50% away -Average ticket price:$40 per person -Business intention is to operate a single vendor cart outside of Fenway Park on Yawkey Way, where people come to enjoy the festive pre-game atmosphere

xxxxxxxxxxxx 4 Case Preparation Before You Start… Take a deep breath and relax Write down your thoughts and other notes (you need to bring pen/pencil and paper!) Identify a framework that will help you structure the problem Think before you talk Start your case with a thought process – explain briefly how you intend to approach the problem Throughout the case ask probing questions and/or state your assumptions Be aware of time constraints and be prepared to summarize your findings Smile

xxxxxxxxxxxx 5 Case Preparation Thoughts & Notes Fenway Park – is it profitable to operate a t-shirt cart? What do I know? -Attendance 30, home games per year -T-shirts sell for between $10 - $25 HOW DO I BREAK THIS DOWN?? HOW DO I PROCEED? HOW DO I BREAK THIS DOWN?? HOW DO I PROCEED?

xxxxxxxxxxxx 6 Case Assessment How Did I Do? Demonstrates clear logic Uses relevant framework and/or provides structure to case problem Guides interviewer through thought-process Offers both broad and detailed assumptions Calculates numbers accurately Sanity checks answers & recovers from potentially “off” estimates Summarizes findings and makes a firm and actionable conclusion Makes creative considerations beyond obvious case issues: Product differentiation Location Seasonal influences (e.g., weather, playoffs, etc.) Customer loyalty Shows enthusiasm Excellent (Home Run) Demonstrates reasonable logic Uses framework, but not necessarily most relevant Provides some explanation of thought-process Makes broad assumptions, but lacks detailed considerations Does not gauge all answers for reasonability or accuracy Summarizes findings but conclusion lacks conviction Makes some creative considerations, but could push to another level of detail Shows enthusiasm Good (Double) Fails to grasp key issues or demonstrate clear logic Does not use framework or structured approach Thought-process is rambling (or not communicated at all) Assumptions lack depth and fail to consider key issues Estimates are unreasonable or calculated incorrectly Does not summarize findings, or summary does not take into account key issues and/or estimates Lacks creative thinking and enthusiasm Nervous and fidgety Needs Improvement (Strike Out)

xxxxxxxxxxxx 7 Case Assessment Wrap-Up Case Tips -Bring a pen/pencil and paper -Listen carefully to case details and general interview questions -Respond in a thoughtful and structured manner (take your time!) -Remember that your thought-process is usually more telling than your answer -PRACTICE, PRACTICE, PRACTICE!! General Interview Tips -Be on-time and dressed appropriately -Know your resume and academic/work experience background -Answer interview questions concisely -Be able to state clearly and concisely why you want to work in consulting -Be enthusiastic -Be yourself

xxxxxxxxxxxx 8 Case Execution The Framework Profit Cost Revenue Variable Fixed Price Quantity How many t-shirts can you sell per game? What factors affect sales? How much can you charge for t-shirts? What are my costs? Use a framework that will help you and your interviewer understand your thought process M I N U S

xxxxxxxxxxxx 9 Case Execution Cost Analysis Profit Cost Revenue Variable Fixed Price Quantity How many t-shirts can you sell per game? How much can you charge for t-shirts? What are my costs? What costs are start-up, (e.g., one-time only)? What costs are recurring? How often? (Annual, monthly, periodic?) Start with something straight-forward (low-hanging fruit) – in this case, the cost component is easiest to estimate

xxxxxxxxxxxx 10 Case Execution Cost Analysis Profit Cost Revenue Variable Fixed Price Quantity How many t-shirts can you sell per game? How much can you charge for t-shirts? Labor $10/hour 5-hour (incl. pre- and post-game) $50 labor per game, plus… T-shirt cost $2 per t-shirt how many t-shirts do I need? Total ???? Cart Purchase ~$5,000 (one- time) or Cart Lease ~$1,000 (semi-annual) Operator’s License $1,000 (annual)  $6,000 Total

xxxxxxxxxxxx 11 Case Execution Revenue Analysis Profit Cost Revenue Variable Fixed Price Quantity How many t-shirts can you sell per game? How much can you charge for t- shirts? Labor $10/hour 5-hour (incl. pre- and post-game) $50 labor per game, plus… T-shirt cost $2 per t-shirt how many t-shirts do I need? Total ???? Cart Purchase ~$5,000 (one- time) or Cart Lease ~$1,000 (semi-annual) Operator’s License $1,000 (annual)  $6,000 Total

xxxxxxxxxxxx 12 Case Execution Quantity Estimation How many people buy t-shirts per baseball game? How many people buy t-shirts from us? How many people buy t-shirts per baseball game? How many people buy t-shirts from us? What is the best metric to use? What is per game attendance? 30,000 people per game How many people buy things at baseball games (food, hats, t- shirts, banners, balls, etc.)? How many people buy t-shirts? How many people buy t-shirts from us? 6,000 Buyers (20%) 24,000 Non-Buyers (80%) 1,500 T-shirt Buyers (25%) 4,500 Buy Other Things (75%) SANITY CHECK: DOES THIS MAKE SENSE? 50 Buy Our T-shirts (3%) 1,450 Buy T-shirts from Others

xxxxxxxxxxxx 13 Case Execution Sanity Check The Sanity Check: -Does 50 t-shirts sold per-game sound right? -There are 1,500 t-shirts sold and I am selling 50 shirts, so that implies that there are ~30 t-shirt vendors at the park. Is that a reasonable number? -If we really only sell t-shirts for 2 pre-game hours and 1 post-game hour, we effectively have 180 “selling minutes”  OR… we sell 1 t-shirt every 3-4 minutes  Can one person handle a t-shirt sales transaction every 3 ½ minutes? 50 Buy Our T-shirts SANITY CHECK: DOES THIS MAKE SENSE? OUR ASSUMPTIONS SEEM REASONABLE

xxxxxxxxxxxx 14 Case Execution Revenue Analysis Profit Cost Revenue Variable Fixed Price Quantity 50 t-shirts sold per game Labor $10/hour 5-hour (incl. pre- and post-game) $50 labor per game, plus… T-shirt cost $2 per t-shirt 50 t-shirts per game Total $150 $15 per t-shirt Total Revenue per Game $750 Cart Purchase ~$5,000 (one- time) or Cart Lease ~$1,000 (semi-annual) Operator’s License $1,000 (annual)  $6,000 Total

xxxxxxxxxxxx 15 Case Execution Roll-It-Up Profit Cost Revenue Variable Fixed Price Quantity 50 t-shirts sold per game $15 per t-shirt Now that you’ve calculated the various components of the profit tree, roll-it-up to an annual level and summarize… $750 per game revenue $5,000 start-up costs (cart purchase) $1,000 annual operator’s license $50 labor wages per game $2 cost per t-shirt x 50 shirts = $100 $6,000 annual costs$150 per game costs ANNUALIZE & SUMMARIZE

xxxxxxxxxxxx 16 Case Execution Roll-It-Up Sanity check your findings once again and summarize to the interviewer Total Revenue per Game$ 750 Less: Total Costs per Game($ 150) Net Income per Game$ 600 Total Home Games per Year 80 Annual Income$48,000 Less: Annual Fixed Costs($6,000) Total Annual Profit$42,000 What do you think? Too high? Too low? What do you think? Too high? Too low?