1. Duke APD Consulting Club
Case Practicing
Duke APD Consulting Club
11/7/2018

2. Meeting Agenda Brief review of last meeting Skills for today:
Market size estimation
Mental math tips and practicing
Business situation framework
Skills for today:
Business situation framework (4 C’s)
BCG Matrix (product protfolio matrix)
Case practice
11/7/2018

3. Meeting Agenda Brief review of last meeting Skills for today:
Market size estimation
Mental math tips and practicing
Business situation framework
Skills for today:
Business situation framework (4 C’s)
BCG Matrix (product protfolio matrix)
Case practice
11/7/2018

4. Three steps for market size estimation
Determine and label the question, and lay out the structure:
population-based, household, or preposterous question?
Make assumptions:
The total population/ the total household/ the total area of the U.S….
Do calculation:
Be accurate enough but not necessarily to be precise
11/7/2018

5. Summary for market size estimation
Key numbers to keep in mind:
U.S. population is 320 million
Life expectancy of an American is 80 years
Even distribution between the ages (so there is the same number of 2- year-olds as 72-year-olds. We
100 million U.S. households
11/7/2018
CASE IN POINT: Complete Case Interview Preparation, 8th Edition

6. Sample estimation
A man lives on a small hill, and he has to walk down the hill to take a bus to work every day.
Question: the slope of the ramp from his home to the bus stop?
11/7/2018

7. Sample estimation Solution 1:
1, Since this man has to walk down the hill, the slope should be negative.
2, Not considering special circumstances, the bus can’t drive up to the hill, the absolute value should not be very low, let’s say higher than 30 degrees.
3, This man can still walk down and up, the absolute value of the slope should not be very high, let’s say lower than 45 degrees.
4, Our estimation is: -30 to -45 degrees. Take a midpoint mark, -37 degree.
11/7/2018

8. Sample estimation Solution 2:
Well it’s hard to estimate the slope because of lack of information. But I can tell you how to estimate.
Suppose this man is very, very fat, like a 500 lbs ball. We can just crouch at his door and watch him walk to the bus stop every day, until he falls off one day. If he rolls down the hill at a constant speed, and we know the friction of the ground, then we can know the slope!
11/7/2018

9. Meeting Agenda Brief review of last meeting Skills for today:
Market size estimation
Mental math tips and practicing
Business situation framework
Skills for today:
Business situation framework (4 C’s)
BCG Matrix (product protfolio matrix)
Case practice
11/7/2018

10. Mental math
Tips:
First, match the digits, and ignore the third digit from left and the rest after that
Second, for plus and minus questions, do calculation on the highest two digits
Second’, for multiply questions, round up or round down, and keep in mind how many zeros should be there; for dividing questions, after rounding up or down, cancel out the zeros, and put it into this form: XXX/X
Third, do the calculation and don’t forget to put zeros afterwards.
11/7/2018

11. Mental math practice
Mental math practice: (1 min, error should be controlled under 20%)
11/7/2018

12. Meeting Agenda Brief review of last meeting Skills for today:
Market size estimation
Mental math tips and practicing
Business situation framework
Skills for today:
Business situation framework (4 C’s)
BCG Matrix (product protfolio matrix)
Case practice
11/7/2018

13. Market situation framework
Customer
Product
Who is the customer
What does each customer segment want
Price sensitivity
Distribution channel preference by segment
Customer concentration and power
Nature of product
Commodity of differentiable good
Identify complementary goods
Identify substitutes
Products life cycle
packaging
Company
Competitor
Capabilities and expertise
Distribution channels
Cost structure
Investment cost
Intangibles
Financial situation
Organizational structure
Competitor market share concentration
Competitor behaviors
Best practices
Barriers to entry
Supplier concentration
Regulatory environment
11/7/2018

14. Introduction to Case Practice series
Items to cover:
Mental math,
Market size estimation,
Case interview frameworks,
Basic case interview skills,
Case practice with peers
11/7/2018

15. Meeting Agenda Brief review of last meeting Skills for today:
Market size estimation
Mental math tips and practicing
Business situation framework
Skills for today:
Business situation framework (4 C’s)
BCG Matrix (product protfolio matrix)
Case practice
11/7/2018

16. Business situation (4C’s)
4C’s framework:
Consumers/customers
Company
Competitor
Collaborator
11/7/2018

17. Business situation (4C’s)
Harvard Business School Management Consulting Club, Case Interview Guide
Consumers/customers:
Consumers and customers can be two different entities. Identifying and meeting the needs of both entities are crucial.
Consumers: people who consume the product
Customers: people who buy the product
Define the market:
Decision making unit: Who’s the consumer and customer? Who makes the choices? Who influences the choices? Who pays for the product?
Decision making process: what triggers the needs?
Product use: how much? How often? When, where, and with whom?
Product nature: salient aspect? Meet or exceed expectations?
Situational factors: Purchase occasion? 1st time? Customer loyalty? Existing of alternatives?
11/7/2018

18. Business situation (4C’s)
Company:
Internal analysis:
Key Success Factors (KSFs):
Can be operational factors: product mix, inventory turnover,
competitive standing: customer loyalty, trend setter,
organizational structure: management structure, highly-skilled labor
Value Chain:
Raw Materials >>> Operations >>> Delivery >>> Marketing & Sales >>>Services (customer retention)
Financial Analysis:
Balance sheet, financial ratios, cash flow analysis, time value of money, net present value, cost accounting
External analysis:
11/7/2018
Harvard Business School Management Consulting Club, Case Interview Guide

19. Business situation (4C’s)
Company:
Internal analysis:
External Analysis:
General trends:
Supply/demand, demographics, socio-cultural, political forces, technology, macroeconomics/global
Industry analysis:
Industry evolution, fragmented industry, emerging industry, maturing industry, declining industry
11/7/2018
Harvard Business School Management Consulting Club, Case Interview Guide

20. Business situation (4C’s)
Competitors:
Competitive analysis:
What drives the competitor: future goals (at all levels of management), assumptions (held about itself and the industry)
What is the competitor doing and what can the competitor do:
current strategy,
capabilities (strengths and weaknesses)
Market signals:
prior announcement, or after the facts,
discussion of the industry, or competitors historical relationship
Competitive moves: risks, retaliation…
11/7/2018
Harvard Business School Management Consulting Club, Case Interview Guide

21. Business situation (4C’s)
Collaborators: strategies to deal with suppliers and distributors
Buyers selection:
Four broad criteria to determine the quality of a buyer
Purchasing potential
Growth potential
Structural position: intrinsic bargaining power and propensity to use it
Cost of servicing
Good buyers can be created through:
Build up switching costs (discounts or loyalty program)
High-cost buyers should be eliminated
Supplier strategy:
11/7/2018
Harvard Business School Management Consulting Club, Case Interview Guide

22. Business situation (4C’s)
Collaborators: strategies to deal with suppliers and distributors
Buyers selection:
Supplier strategy:
Stability and competitiveness of the supplier pool
Optimal degree of vertical integration
Allocation of purchases among qualified suppliers
Creation of maximum leverage with chosen suppliers – avoid switching cost, threat of backward integration
11/7/2018
Harvard Business School Management Consulting Club, Case Interview Guide

23. Meeting Agenda Brief review of last meeting Skills for today:
Market size estimation
Mental math tips and practicing
Business situation framework
Skills for today:
Business situation framework (4 C’s)
BCG Matrix (product protfolio matrix)
Case practice
11/7/2018

24. Bcg matrix “Product Portfolio Matrix”
To be successful, a company should have a portfolio of products with different growth rates and different market shares.
High growth rate product needs more cash inputs to grow, while low growth rate product functions as earning excess cash.
11/7/2018
case in point 8th edition, 5: ADDITIONAL TOOLS AND FRAMEWORKS

25. Bcg matrix Four rules determine the cash flow:
margins and cash generated are a function of market share. High margins and high market share go together;
growth requires cash input. The added cash required to hold market share is a function of growth rates;
high market share must be earned or bought;
no product market can grow indefinitely. The payoff from growth must come when the growth slows. The payoff is cash that cannot be reinvested in that product.
11/7/2018
case in point 8th edition, 5: ADDITIONAL TOOLS AND FRAMEWORKS

26. Bcg matrix Four sections in the Matrix
Low growth, high market share: Cash Cows, generate excess cash
Low growth, low market share: Cash Pets, may show some accounting profit, but the profit must be reinvested to maintain the share, worthless.
High growth, low market share: Question mark. Require far more cash than they can generate. It’s a liability of a company unless it becomes a leader.
High growth, high market share: The star. It’s the leader of the industry, and if it can stay as a leader, when the growth slows down it will eventually become the Cash cow.
11/7/2018
case in point 8th edition, 5: ADDITIONAL TOOLS AND FRAMEWORKS

27. Bcg matrix
11/7/2018
case in point 8th edition, 5: ADDITIONAL TOOLS AND FRAMEWORKS

28. Meeting Agenda Brief review of last meeting Skills for today:
Market size estimation
Mental math tips and practicing
Business situation framework
Skills for today:
Business situation framework (4 C’s)
BCG Matrix (product protfolio matrix)
Case practice
11/7/2018

29. Case Practicing
11/7/2018