1. Duke APD Consulting Club
Case Practicing
Duke APD Consulting Club
11/21/2018

2. Meeting Agenda Introduction to Case Practicing series, and our plan
Sample Case
Basic steps for case solving
How do give feedback
Skills for today:
Mental math
Framework No.1
Case practice
11/21/2018

3. Meeting Agenda Introduction to Case Practicing series, and our plan
Sample Case
Basic steps for case solving
How do give feedback
Skills for today:
Mental math
Framework No.1
Case practice
11/21/2018

4. Introduction to Case Practice series
Number of meetings: 6
Goal for 6 meetings: go over Level 1 items in the spreadsheet, and prepare for basic case solving skills
11/21/2018

5. Introduction to Case Practice series
Items to cover:
Mental math,
Market size estimation,
Case interview frameworks,
Basic case interview skills,
Case practice with peers
11/21/2018

6. Meeting Agenda Introduction to Case Practicing series, and our plan
Sample Case
Basic steps for case solving
How do give feedback
Skills for today:
Mental math
Framework No.1
Case practice
11/21/2018

7. Sample case
Bubble Gum Manufacturer You are a consultant working for a bubble gum manufacturer. The CEO of the gum manufacturing company is concerned because his company is experiencing declining margin. My questions to you are: 1, the reasons behind declining profitability; 2, your suggestions for improving profitability.
11/21/2018
Wharton Consulting Casebook Edition

8. Step one: Summarize the case and clarify the objectives
Steps to solve a case
Step one: Summarize the case and clarify the objectives
Bubble Gum Manufacturer
You are a consultant working for a bubble gum manufacturer. The CEO of the gum manufacturing company is concerned because his company is experiencing declining margin. My questions to you are:
1, the reasons behind declining profitability;
2, your suggestions for improving profitability.
11/21/2018

9. Step two: Make hypothesis and develop “issue trees”
Steps to solve a case
Step two: Make hypothesis and develop “issue trees”
Hypothesis: This is a profitability problem, the company needs to reduce their product cost
Issue tree: typical profitability structure
Revenue
Price per unit
The number of unit sold
Cost
Fixed cost
Variable cost
11/21/2018

10. Step three: drill down to each topic
Steps to solve a case
Step three: drill down to each topic
Revenue
Price per unit No info
The number of unit sold Has been increased
Cost
Fixed cost No info
Variable cost Components of the cost
11/21/2018

11. Step three: drill down to each topic
Steps to solve a case
Step three: drill down to each topic
Variable cost:
Components of the cost:
Cost of goods sold (COGS): No change
gum, sugar, flavor, smell, color…
Labor No info
Selling, General and Administrative expenses (SG&A) No info
11/21/2018
! Product mix: There are some more profitable products and less profitable products. If the selling of a low profit product counting more, the profit margin will decline.

12. Two types of products: flavored and flavorless gum
Steps to solve a case
Variable cost:
Two types of products: flavored and flavorless gum
Both products are sold at the same price point
Composition products:
Flavored gum: gum, sugar, color dye, and flavor
Flavorless gum: gum, sugar, color dye
Note that the gum, sugar and color day raw materials are same in size for each of the two products.
11/21/2018
Conclusion for problem1: Because the increasing sales of the flavored gum, the profit margin declined despite of an increasing total sales.

13. 2, suggestions for improve profitability:
Steps to solve a case
2, suggestions for improve profitability:
Reduce the cost: negotiate with raw material providers (esp. flavor)
Increase the revenue: the price of flavored gum …
11/21/2018

14. Step four: wrap up the analysis
Steps to solve a case
Step four: wrap up the analysis
1, After our analysis on this case, we think the main reason for the declining profitability is the increasing in the sales of flavored gum, which has the same price with the flavorless gum while cost more to produce.
2, Our suggestions to improve the profitability are:
Reduce the raw material cost by negotiating with raw material provider
Or try lifting the price of the flavored gum …
11/21/2018

15. Basic steps for case solving
Summarize the case and clarify the objectives
Make hypothesis and develop issue tree
Drill down on each topic
Summarize the results
First five steps:
Summarize the question
Verify the objective(s)
Ask clarifying questions
Label the case and lay out your structure
State your hypothesis
11/21/2018
case in point 8th edition, 4: IVY CASE SYSTEM

16. Time: usually 20 to 30 min. It can be extended for beginners
How to give a feedback
Time: usually 20 to 30 min. It can be extended for beginners
Track down the partners performance during the practicing, where they did good and where they got stuck
Summarize their strong points and weak points
11/21/2018

17. Meeting Agenda Introduction to Case Practicing series, and our plan
Sample Case
Basic steps for case solving
How do give feedback
Skills for today:
Mental math
Framework No.1
Case practice
11/21/2018

18. Tips for mental math: Skills for today
Round up or round down: keep it in mind, you don’t have to be precise, just be accuracy enough
Be sensitive to some relations: like 1/4=0.25, 1/6= 0.16, 1/7=0.14 or 0.15, 1/8=0.125, 1/9=0.1
Break it down to several easier parts: 10/6 * 24, 24*25
To avoid unnecessary calculation: 25*40,000 and 65*20,000, which is bigger
Practice more:
11/21/2018

19. Mental math practice: (1 min, error should be controlled under 20%)
Skills for today
Mental math practice: (1 min, error should be controlled under 20%)
12% of 9,956 =
579 * 123,140,408 =
425, ,597,756 =
1,364 * 194 =
119,181, ,981,641 =
53,165,916 / 5,463 =
7,415 * 875 =
950,372,836 / 26,852 =
11/21/2018

20. Framework 1: profitability
Skills for today
Framework 1: profitability
11/21/2018
Case interview secretes, by Victor Cheng

21. Meeting Agenda Introduction to Case Practicing series, and our plan
Sample Case
Basic steps for case solving
How do give feedback
Skills for today:
Mental math
Framework No.1
Case practice
11/21/2018

22. Case Practicing
11/21/2018