Introduction To Case Studies

INTRODUCTION
of Consulting Case Study Training

Are you preparing for an interview for a job in Management Consulting? Perhaps you will be applying for a
general Management-track position at a company that uses Case Studies as part of its interview process? In either
case, this training manual is for you.
Street of Walls has teamed up with industry experts in Management Consulting to bring you an indepth Consulting Interview Training program. This is ideal for anyone who is interested in working in
Management Consulting and needs to learn the ropes of navigating the recruiting process from start to finish. If
youre just starting to look for a job in Management Consulting, then the Consulting Interview Training guide is
the best place for you to start. (Be sure to come back to this training guide when you are done!)
This guide, the Consulting Case Study Training guide, is broken out as a separate guide from the rest of
Consulting Interview Training for a good reasonnowadays, Consulting-type Case Studies are appearing in
interviews for many different industries. They are particularly gaining traction for positions in large corporations
that involve Strategy, Business Development, and/or rigorous quantitative analysis. Thus if you are applying for
a position like one of these, then this guide is for you as well.
We will teach you the skills and techniques you need to know in order to excel at the Case Study portion of these
interviews, and we hope to help you secure your job offer.
Why Do I Need to Read This?
Street of Walls is sharing this guide with you to help you prepare for a very difficult and unique questioning
format that all Management Consulting firms utilizeas well as some corporate recruiters, as we have discussed
above. These Case Studies are truly unlike anything else you might have run across in your job search processes
they are difficult, and they require training and practice to perform well. In addition, while there is plenty of
information online pertaining to Consulting Case Studies, most of it is devoted to sample cases without synthesis
and real teaching. In other words, its easy to find sample cases, but its much more difficult to find proper
training for how to truly improve at the Case Studies in preparation for your interview.
In this guide, we will give you six sample Full Business Cases, as well as examples of Guesstimate Cases and
Brainteasersall of which could occur in a Management Consulting interview. But just as importantly, we will
also teach you the required theory behind Consulting Case Study questions, as well as step-by-step thought
processes, observations, and analysis for each question. The combination of introductory theory and a step-bystep walkthrough of the cases is designed to help you learn how to think through Case Studies in an efficient,
accurate way. We also provide guidance about how to interact with the interviewer as you respond to the cases.
Keep in mind throughout this training guide that, for Management Consulting, recruiting is very competitive
you will be up against tens if not hundreds of other applicants who are talented and well-qualified. Thus among
this group, your performance in Case Study questions is going to be a major determinant of who gets an offer
and who doesnt. In fact, most who are familiar with the industry would argue that Case Studies are the most
critical component of your interview process in Management Consulting.
Although this Street of Walls training guide will not give you all the answers and will not guarantee your success,
Street of Walls believes that it will help you focus on the key areas you need to be aware of in approaching Case
study questions, and will provide you with a strong foundation to go into your Case Study interview ready and
confident. Good luck!
CONSULTING CASE STUDY INTERVIEW: OVERVIEW
Case Studies are the critical part of the consulting interview processthe heart and soul, if you will. However,
they are very challenging. They can be so challenging, in fact, that they scare many people who might otherwise
be interested in Management Consulting into simply not applying. Therefore preparing for Case Studiesfrom
becoming comfortable with the concept all the way up to being ready and confident for the Case, whatever it may
beis one of the most important things a prospective Consultant must do in the Consulting recruiting process.
First, lets ponder an important question: why do Management Consulting firms focus so much on Case Studies
as part of the interview process? After all, the firm already knows your work experience, your grades and all your
accomplishments, from your resume and other portions of the interview process. Why run the risk of scaring off
so much good potential talent, or threatening their candidacy for the job with such a (seemingly) daunting
interview component?
The key reason is very simple: that the case interviews are highly reflective of the daily work of a Consultant.
Thinking on your feet, being structured and articulate in communication, synthesizing information, and
demonstrating your ability to respond well under pressure are all central to being effective in the Consulting
industry. Case studies offer a method to evaluate who the firm believes will be the best Consultants among many
qualified and talented candidates. In other words: it doesnt matter how much raw talent you haveif you
cannot succeed in the Case Studies portion of Consulting interviews, there is a good chance that Consulting may
not be the right field for you.
Importantly, many corporations (e.g. Microsoft, Google, etc.) and financial industry firms (such as hedge funds
and private equity firms) have followed the Consulting industrys lead by developing Case Study interview
methodologies of their own. In each case, the core concept of Case Study-oriented interviewing has been tweaked
to fit the demands and specifics of the relevant firm or industry. For example, high-tech firms that have adopted
this framework tend to ask about technology-oriented cases, while hedge funds and private equity firms use Case
Studies that are more investments-oriented. We believe, therefore, that this training guide can be very effective
for individuals applying for jobs in those areas as well.
We recommend that all Management Consulting job candidates, as well as individuals applying for jobs where
Case Studies are an important part of the process, review all the concepts and methodologies laid out in this
training guide and practice an enormous number of cases to successfully crack the cases.
Case Study Basics
Here are the basics. First, there are two predominant types of Case Study interview questions: Business Situation
Case Studies and Guesstimate Case Studies. Business Situation Case Studies are typically more involved and
often require specific frameworks (or a selection of possible frameworks) to address well. These cases require a
high degree of structure in order to summarize the issues and drill down into them effectively. Guesstimate Case
Studies tend to be smaller/shorter, and require a strong ability to determine the important factors in making an
estimation, as well as to actually do the math behind the estimation. Each of these types of Case Study questions
is addressed directly in a separate chapter later in this guide.
Another category of Case Study questions is the Brainteaser category. We also address this question type in a
separate chapter at the end of this training guide. However please note that this category is less common than
the others, and is becoming even less common. Part of the reason for this is that the issue being tested in
Brainteasers is more hit or miss. A job candidate might get lucky in determining what the core issue is in a
Brainteaser case, while another candidate, otherwise highly skilled, might simply draw a blank. There is a
consensus among some Consultants, therefore, that Brainteaser questions are not as predictive as Business
Situation Cases and Guesstimate Cases.
When you are given a Case Study question of any type, the following areas will be tracked and graded by the
interviewing Consultant as you respond:
Ability to structure ideas in an effective way. Can the candidate quickly enumerate and prioritize the
issues? Is the overall approach to the problems posed in the case systematic and organized? Is the approach
appropriate given the type of information available?
Ability to communicate articulately and concisely. Can the candidate communicate the issues and
priorities back to the interviewer in a lucid way? Can he or she ask appropriate questions and quickly and
accurately dive deeper into puzzling issues?
Numerical/quantitative ability. How comfortable is the candidate with quickly performing numerical
analysis in his or her head or on a piece of paper? Can he or she estimate accurately and efficiently? Is the overall
quantitative approach systematic and accurate?
Thinking on your feet under pressure. Does the candidate demonstrate comfort and confidence as the
analysis of the case proceeds? If a candidate gets stuck on an issue, does he or she convey the ability to maintain
composure and recover effectively?
Ability to synthesize information. Can the candidate aggregate the information and analysis in a cohesive
way to see the big picture and provide targeted, actionable, and accurate recommendations?
Responding to a Case Study
There is a general approach that applies to responding to Case Studies that you should take into account as you
practice cases. Case studies vary in type and style, but these general points apply to all cases whether they are
open-ended looking for a series of recommendations or seeking a specific numerical answer.
1. Understand and Address the Question: Listen carefully when the interviewer outlines the case. Take brief
notes if you need to, and dont be afraid to proceed deliberately with this if you need to. Be certain you
understand the case and what the interviewer is asking you to conclude (e.g. size of market, the reasons profit
is falling, a specific number or a range of numbers, etc.). You are allowed to, and it is expected that you will, ask
questions to better understand the case and deliverables. Asking questions and interacting with the interviewer
shows an ability to be composed under pressure. As needed, clarify the case facts/questions to the interviewer
and the outcome/conclusion that you will provide (For example: The facts are x and y; and I will ultimately
provide a series of recommendations about how to improve profitability Am I understanding the situation
correctly?). Always accept the facts and advice offered by the interviewer; this is not the time to attempt to
show that you are smarter than the interviewer. Do not be concerned about being repetitiveit is more important
to be sure that you are answering the right question. Many nervous applicants start to answer the question
before they understand what they are being asked to do.
2. Structure your Analysis: Before launching in to the analysis, clearly outline your initial ideas/thoughts/plan
and share it with the interviewer. A simple outline structure helps you to keep your analysis and answer
structured, which is important. It is better to be articulate, coherent and mostly correct than come across as
disorganized and completely correct. (Remember, the interviewer needs to be confident that he or she can put
you in front of a client.) Also, at times the interviewer might help guide you in a different direction if you outline
your plan for the analysis, which is actually a good sign. Listen carefully to any guidance or revisions and be
flexible. Address any insights/direction offered by the interviewer. You are more than permitted to ask for extra
time to prepare your structure/answer. In fact, if you need it, we insist upon it!
3. Analyze: Work through your outline to ask questions, drill down on issues, perform back-of the envelope
calculations, and ultimately arrive at an answer. Think/analyze out loud in order to make this part of the process
interactive with the interviewer. Just like in a real-live case, the interviewer will likely engage in your thought
process. Continue to ask questions about the approach you are taking or for any missing information. Keep in
mind that solution-oriented questions are better than open-ended questions. For example, I will run the
analysis this way; does that sound reasonable to you? is superior to How should I run the analysis?. Listen
carefully to any input/insights provided by the interviewer, and integrate them into your thought process. (One
reliable sign that you are not on the right track is if the Consultant offers some specific guidance that you dont
use!) Carefully organize your sub-answers and assumptions (highlighting them), so that they can be easily
accessed and altered at a later point if required. Ultimately, you hope to arrive at the best answer possible in a
short time frame, but dont rush. Remember, in most cases there is no perfect answer, but there are good ones
(thorough, thoughtful, and well-communicated) and there are not-so-good ones.
4. Answer/Give Recommendations: Provide the answer/recommendation in an answer-first manner (this is
Consultant-speak for Give the answer first and then build up how you got to the answer). For example: I
recommend that the client in this case enter Market X. This recommendation is driven by the following three
factors Being articulate and structured in your answer is criticalremember, the interviewer wants to be
confident that he or she can leave you to engage with clients. In the event that you have not finished your analysis,
and the interviewer interrupts and would like an immediate answer, request a moment to collect your thoughts.
Then, provide your answer to date and what analysis you would do next if you had more time. Finally: if asked
what sources you would use to find additional information, some good examples to have on your fingertips
include the following:
o Company filings
o Industry data (often available from trade organizations)
o Company Investor Relations presentations
o Interviews with Industry experts (through LinkedIn or an expert network)
o Relevant media articles
In responding to Consulting Case Study questions, your thought process should always go back to this 4-step
process. An effective way to remember this is to drill the following into your mind:
Understand, Structure, Analyze, and Answer.
Additional Case Study Tips
Being structured and articulate is the most important component of your response. Always think structure,
structure, structure.
Dont be afraid to be originalcreative approaches and ideas often gain traction from interviewers. But make
sure the creative answer has a logical underpinning. In other words, make sure your approach will lead to an
interesting, thought-provoking result.
Use the frameworks and concepts laid out in later chapters of this training guide, but do not try and fit each Case
Study response into one specific framework. Case Studies are not that simpleoften there will be no best
framework to address a problem, which means you will need to do a lot of probing to determine the best course
of action. Or, there may be multiple aspects to a case that need to be analyzed separately in different ways. Trying
to shoehorn a Case into a specific framework will be obvious to the interviewer, and will generally result in a
poor performance.
Develop an opinion on the Case as your analysis proceeds and more information becomes clear to you. You
should remain flexible on this, because there might be a twist, but dont be ambivalent. A note on this: dont jump
to conclusions, either. Wait until there seems to be sufficient information to indicate that one direction or result
is far more likely to be correct than its alternatives.
Discuss the So what? aspect of an answer. If you figure out an answer, you are generally only half way there.
Evaluating the So what? piecethe implications of your analysis and recommendationswill set you apart
from other candidates. For example: The market size in Turkey for widgets is approximately $x billion; so
what does that imply? A good response might be: That market size is attractive, we should advise Company
ABC to enter that market; furthermore, the widget market in Turkey appears to be growing more rapidly than in
other countries in the region, which makes the opportunity even more attractive.
Most Case Studies will require you to make some assumptions. When making assumptions, be sure to voice the
logic behind the assumption; think it through first, if necessary. For example, if you decide to assume that sales
volume will be flat (no growth) on the U.S. West Coast, be sure to say whyfor example, something like the
economic situation is challenging and there is unlikely to be any market growth unless this changes would be
helpful.
Always round up or down for numbers and percentages. Estimation of this type will be helpful in getting through
the math quicklyremember, in most cases it is more important to come up with an approximate number quickly
than an exact number very slowly. Practice your math speed, and get used to adding, dividing and multiplying
large estimated numbers (division shortcuts, working with powers of ten, estimating compounded growth, etc.).
We estimate that about 10 hours of practice with this can make you about 25% faster at back-of-the-envelope
math of this typethis is a key skill that Consultants use on a regular basis.
Draw from personal examples and experiences, but keep the stories and anecdotes succinct and articulate. And
remember that you dont need to do this, so dont dredge for examples that either dont exist or dont fit the case.
They are helpful, but you can also do perfectly fine on a case without using examples from your experience.
Maintain reasonable eye contact with the interviewer, as though you were talking with a friend.
Importantly: no matter what happens, stay composed, energetic and confident. Be positive as you work through
the issues and dont get flustered. These cases are challenging, but they can also be extremely interesting and
thought-provoking. Have fun and smile as you work through them!
CONSULTING CASE STUDY 101: AN INTRODUCTION TO FRAMEWORKS

Before we look at individual Cases, it is important to begin by looking at analysis frameworks that commonly can
be used to address Case Study questions. In this chapter, we will outline some of the core frameworks and some
additional Consulting concepts that are important to grasp and will form part of many interviews. The
frameworks will be helpful to answer certain types of cases, depending on the type of case. In reality, few case
interviews or real-life business situations cover just one concept or business problem, so you have to have the
flexibility to apply a range of concepts/structures. For example, a Company bringing a new product to market
would require a market size analysis, competitor analysis, as well as understanding the key customer segments.
The more you practice, the easier the cases will become and the more articulate and structured youll be in your
answers.
An important note on this: historically, the vast majority of Consulting candidates have used specific business
frameworks to answer cases. Frameworks remain important as concepts to answer Case Studies, but you should
absolutely avoid any rigid use of a specific framework. In reality, the main purpose of learning the frameworks
is to help you to structure your answers, just as the case situations in our later examples should do.
The key frameworks that follow should be used directly in certain Case situations, but more broadly they should
be used as a way to expand your strategic thinking, which is the critical component of success in the Case Study
interview process. Ultimately, a top-flight candidate will build his or her own framework/structure for
evaluating the Case as it progresses, often drawing from many of the frameworks and concepts in this module,
and potentially others. In other words, you should absolutely avoid using the phrase, I will apply framework
X to this case. However, be aware of the famous frameworks in case they are mentioned in an interview setting,
and dont be shy about referencing them as you dive into the specifics of the Case Study youre evaluating.
Porters Five Forces
Porters Five Forces has become an incredibly well known framework in the business strategy world. It is
probably the most famous of all of them. It was introduced by Harvard Professor and Monitor Consulting firm
founder Michael Porter. Porters Five Forces is a high-level framework that you can draw upon to perform a
market landscape and competitor dynamics analysis. It can help determine whether a market or company is
attractive, whether the client for whom the analysis is being performed is a private equity firm thinking about
buying a company, or a major company thinking about entering or exiting a certain market segment. In most
cases, a Case Study will address at least some of the components found in this framework.
Here are the Five Forces in detail:
PORTERS FIVE FORCES
1. Threat of New Entrants (effectively, this is Barriers to Entry)
Legal or regulatory barriers (for example, patents or government contracts)

Economies of scale
Cost advantage (for example, unique access to lower raw material costs)
Access to distribution channels
Product differentiation (for example, how is this product different?)
2. Competitive Dynamics
Industry growth rate
Industry fragmentation
Level of switching costs
Motivation to reduce prices (for example, from excess capacity)
3. Supplier Power
Level of substitute products
Buyers decision influenced by supplier
Supplier inputs/products have high switching costs
Supplier has potential to forward integrate
Supplier accounts for large share of the inputs/products
4.
5.
Buyer Power
High customer/client concentration
Level of commoditization of product/input
Level of switching costs for buyer
Buyer has significant product/market information
Threat of Substitutes
Substitute products/services that can compete on price and/or quality
Switching costs to shift to substitute products
The 3 Cs
This simple framework has been around for a long time as a way to think about any industry or company, and
applies broadly to a wide range of Case Study questions. If you compare the description below to that of Porters
Five Forces above, you will see that there is substantial overlap.
The 3 Cs approach is to address any Case situation by assessing the:
1. Company
2. Competitors
3. Customers/clients
THE 3 CS
1. Company: the first C is about understanding the operations of the Company itself and how the Company makes
money.
Product/service offering
1. Pros and cons of product/service
2. Value chain
Profitability analysis
1. Revenue (price volume) and expenses
Other Company factors
1.
2.
3.
4.
5.
6.
Capacity
Core competencies
Regulatory environment
Distribution network
Management and core employees
Other
2. Competition: the second C is about understanding how the competitors impact your client and how the
competitive dynamics will change over time.
Competitor mix/make-up
1. Market share
2. Fragmentation
3. Financial situation (for example, deep pocket competitors?)
4. Management
5. Other competencies (for example, marketing or distribution channels)
Competitor products/services
1. Value proposition versus client
2. Value chain
3. Customers/Clients: the third C is often overlooked but is fundamental, and consists of knowing your
clients/customers. Always ask for available customer information, as knowing what your customer wants/needs
is important to winning in business.
Customer mix
1. Demographics (age, gender, etc.)
2. Value of core customers/clients
3. Wants and needs of customers/clients
Position with customer/client segments
1. Customer/client segment sizes
2. Customer/client segment shares
3. Customer/client segment growth rate
Key drivers of customer/client decisions
1. Price
2. Product characteristics
3. Brand
4. Personnel (especially for B2B)
The 4 Ps
This framework is often used specifically whenever there is a marketing component involved in a case (for
example: how to increase sales resulting from any profitability optimization case, deciding on an approach to
enter a market, etc.). When combined with the 3 Cs, this framework can cover many topics and as you practice
more Case Study questions, youll develop a better sense of when and how to draw from these frameworks.
The 4 Ps approach is to address a marketing-oriented Case situation by assessing the:
1. Product
2. Price
3. Promotion
4. Placement
THE 4 PS
1. Product: it is critical to understand the Companys product/service and its value proposition.
Company product/service qualities, features, attributes

1. Commoditized or differentiated?
Competitor product/service qualities, features, attributes
1. Commoditized or differentiated?
Substitute product options
1. How close are the substitutes?
2. Value proposition versus substitutes (price, quality, etc.)
3. Switching costs
Customer value proposition
1. Why are clients/customers purchasing the product?
2. Brand, availability, service, value, reliability, aesthetic, etc.
2. Price: it is critical to understand the Companys optimal pricing strategy. Price is often the key driver of
profitability and success. Review the pricing optimization section for more points on pricing this also offers a
good approach of the key issues to consider on price.
Price elasticity
1. Is our product sufficiently better to justify a higher price? Or is it somewhat
commoditized?
2. Customer loyalty/lock-in
3. Supply/demand: current state of demand and supply for the product or service
Price of substitute products/services
Price of competitor products/services
Market positioning
1. Brand position and perception
2. Status
Profitability
1. What is the cost for the client to produce the product or offer the service?
3. Placement: this is about getting the products to the customers/clients and how the Company does so.
Which distribution channels to use?

1. Select/exclusive channels or wide distribution network?
Transport/logistics
1. Seamless delivery to customers
2. Internal transport or outsource?
Specific location within the channels
1. Specific areas of a site online
2. Product placement in stores
4. Promotion: This aspect (which could be called marketing strategy, if only the word marketing started with
the letter p) is about reaching and attracting the customer/client. There is overlap here with other areas,
especially product, because a big part of product is understanding customer wants and needs which helps
determine the promotional aspects.
Which markets/customers should the Company target?

1. Customer/client awareness
Is the Company reaching and attracting its target market?
What are the most effective marketing campaign strategies?
Return on marketing spend
Are we retaining our customers/clients?
Can we up-sell or cross-sell to our current customers/clients?
SWOT (Strengths, Weaknesses, Opportunities, Threats)

SWOT analysis is more of a mini-framework, specifically for quickly evaluating a single company in an industry.
In that regard, its far less complete than other frameworks, and can often miss important details. However an
interviewer could potentially ask you for a SWOT analysis, and you should be prepared to apply it in that case.
SWOT is effectively a quick, high-level market landscape/competitive dynamics analysis arranged using the
following terminology:
SWOT ANALYSIS
1. Strengths: Company strengths within an industry
2. Weaknesses: Company weaknesses within an industry
3. Opportunities: Company opportunities available within the industry (or potentially by branching into a new
industry)
4. Threats: Company threats within the industry (or potentially from companies whose primary business is in
another, related industry, or from disruptive technologies that potentially threaten all companies in an industry)
It should be noted that SWOT can be extended from comparing a specific company to the others in the industry,
to comparing a specific industry or sub-industry to other, related industries or sub-industries within the
economy. For example, a classic SWOT analysis might entail benchmarking Delta Airlines with the airline
industry as a whole; an extension could entail benchmarking the entire airline industry against the broad
transportation sector.
Other Frameworks
You should be very familiar with the well-known frameworks already discussed in this chapter, although it is
unlikely that an interviewer would ask you to use a particular framework in your analysis. Instead, it is typically
expected that you draw on the concepts encompassed by these frameworks and/or the concepts that we will
outline in the next chapter, which breaks down the common Case Study interview question types.
In addition to these frameworks, there are a number of other frameworks that you will read about on certain
Consulting firm sites, but you will probably not be expected to know them in detail or apply them specifically in
an interview. It does not hurt, however, to be familiar with them. Therefore, we include these example
frameworks for your reference and encourage you to at least familiarize yourself with the basics of them:
The BCG Growth Share Matrix for evaluating product or business lines
The McKinsey 7S Framework for evaluating organizational effectiveness
The Product/Market Grid to determine growth opportunities
Force Field Analysis for Change Management
The Affinity Diagram for organizing ideas and information
Additional Analysis Concepts

There are additional, relatively simple analytical techniques that you should be prepared for in Consulting Case
Study interviews. These techniques tend to be numerical, and occur frequently, although none are
comprehensive or broad enough to fall into the category of a Framework:
Break-Even Analysis
Fixed vs. Variable Expenses
Net Profit Margin
Return on Investment (ROI)
Compound Annual Growth Rate (CAGR)
Lifetime Customer Value (LCV; sometimes referred to as User Lifetime Value)
Product Life Cycle
Opportunity Cost
Elasticity (Supply or Demand)
Financial Statements, Accounting, and Valuation
Lets take a deeper look at each analysis category.
BREAK-EVEN ANALYSIS
The gist of Break-Even Analysis cases is that the Fixed Costs of a businessi.e., the costs that are
unavoidableneed to be overcome by making profit from sales of products. Presumably, each incremental sale
contributes to profit at a rate that can be determined (or at least estimated); the question that is to be answered
is, How many units do I have to sell in order to overcome my Fixed Costs, i.e., to Break Even?
In other words, the Break-Even Point is the number of units sold at which Revenue equals Total Expenses
(Fixed Expenses plus Variable Expenses).
Break-Even Analysis is often applied when deciding whether to develop a new product or make a capital
equipment investment, as well as helping in making decisions around how to price products and service and the
number of units to produce.
Formulaically, Break-Even Number of Units = Fixed expenses (Revenue per unit Variable Expenses per
unit).
Note that the expression (Revenue per unit Variable Expenses per unit) is often referred to as the Unit
Contribution Margin.
An understanding of how to analyze Expenses and differentiate Fixed Expenses from Variable Expenses is useful
in order to run a Break-Even Analysis of a company.
Break-Even Analysis can get more complex, as there are microeconomic and macroeconomic considerations that
can change both the Fixed and Variable Expenses, but the basic concept is an important one; therefore you will
likely come across some form of Break-Even Analysis in Consulting Case Study interviews.
Note that this concept can also be translated into a question on Break-Even Price, i.e., Assuming a certain
volume of sales, what is the sales price required in order to break even?
Formulaically, Break-Even Price = (Fixed Expenses Sales Volume) + Variable Expenses per unit.
Note that the expression (Fixed Expenses Sales Volume) equates to the required Unit Contribution
Margin at the assumed Sales Volume in order to break even. In other words, Break-Even Price = Required Unit
Contribution Margin + Variable Expenses per Unit.
FIXED VS. VARIABLE EXPENSES
Fixed Expenses (or Fixed Costs) are expenses that do typically fluctuate regardless of the production or sales
levels. These expenses can be viewed as unavoidable, at least in the short-term. Typical examples for Fixed
Expenses include Rent, Insurance, Mortgage Payments, and Corporate Overhead Expenses.
Variable Expenses (or Variable Costs) are impacted by changes in production or sales levels typical
examples include are Raw Materials, Direct Labor Expenses (wages and benefits), and delivery costs.
Understanding a Companys Fixed vs. Variable Cost structure is important in a variety of cases (such as in BreakEven Analysis, discussed above).
When analyzing a Case, always keep in mind that total Fixed Expenses remain constant as volume rises (or falls),
but Fixed Expenses per unit decline as volume rises (rise as volume falls). For example, if a computer component
manufacturer has $1,000 of Fixed Expenses and produces 100 components, then the $1,000 of Fixed Expenses
will be spread across 100 components (= $10 of Fixed Expenses per unit). If the Company produced 200
components, then the Fixed Expenses per unit would decrease to $5 per unit.
Variable Expenses, meanwhile, rise proportionately as volume increases, so Variable Expenses per unit remain
constant.
NET PROFIT MARGIN
When an interviewer asks a candidate to calculate the Net Profit Margin (a.k.a. Profit Margin or Net
Income Margin), he or she will usually be referring to the total Net Income of a company or business line as a
percentage of its Revenue: Net Profit Margin = Net Income Total Revenue.
The interviewer could also refer to Gross Profit Margin, which is simply Gross Profit as a percentage of
revenue: Gross Profit Margin = Gross Profit Total Revenue
Similarly, the interview may also refer to Operating Profit Margin (EBIT Margin), or EBITDA Margin.
In both cases, thus is simply the figure in question (Operating Profit, a.k.a. EBIT, or EBITDA) as a percentage of
Revenue.
RETURN ON INVESTMENT (ROI)
Return on Investment (ROI) is a ratio that determines the return, or Profit, from capital invested. ROI is used
in consulting interviews as a way to evaluate the return of a particular investment or to assess the feasibility of a
potential investment or acquisition. Many companies have an internal ROI metric for capital investments.
Standard ROI is calculated as follows: Profit from the Investment (Revenue minus Costs) Capital Invested.
Note: Return on Assets (ROA) is a variation of this concept, but instead revolves around all capital invested
in a project (Liabilities + Equity), rather than just Equity invested, which is typical for an ROI calculation.
COMPOUND ANNUAL GROWTH RATE (CAGR)
o
o
The Compound Annual Growth Rate (CAGR) is the percentage rate at which any figure, such as number of
units sold, a population, or an investment must grow in each year to reach a given end value over a certain
amount of time. (Note that this is not the only growth path to grow from a beginning number to an ending
number, but it is the only growth path that is the same growth rate every year.)
The formula to calculate CAGR is: [(Ending Value Beginning Value)^(1 Number of Years)] 1.
For example: If sales grew from $1,000 in the year 2001, when a store opened, to $2,100 in 2012, what is the
CAGR?
Answer: [(2,100 1,000)^(1 11)] 1 = 2.1^(0.090909) = 7.0%
Thus, the CAGR between 2001 and 2012 was 7.0%.
CAGR is very similar in concept to Internal Rate of Return (IRR), which is the annual rate of return on an
investment if its value grows by a specific multiple over a specific amount of time.
Use the Rule of 72 to estimate CAGR whenever possible. The rule of 72 simply states that a quantity will roughly
double in value whenever the number of years times the annual growth rate equals 72.
Using the above example, we can see that the quantity slightly more than doubled, so the answer should be
slightly above (72 11) percent, or slightly above 6.6%. Indeed, it is!
LIFETIME CUSTOMER VALUE (LCV)
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Lifetime Customer Value (LCV) projects the total profitability attributed to a firms future relationship to a
typical customer.
The idea behind this microeconomic analysis is to determine the reasonable cost to win or acquire a customer
(or to maintain an existing customer, i.e., prevent him or her from churning, or switching to a competitor). It
can also be used to determine level and type of customer service to provide, and as another way to estimate the
value of a business. (In theory, the value of a business should equal the number of existing customers the LCV
per customer, plus growth opportunities.)
The steps to calculate the LCV are as follows:
Estimate the remaining customer years; in other words, how long is a typical customer expected to last with the
company?
Estimate future Revenue per year per customer, based on product volume per customer price
Estimate Total Expenses for producing those products (either separating Fixed Costs out or allocating them on
a per-customer basis)
Calculate the Net Present Value of the future profit (Revenue Expenses) per customer (in other words,
discount these future profits back into todays equivalent dollars)
PRODUCT LIFE CYCLE
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Important for market sizing problems, the Product Life Cycle helps to calculate and project the annual market
size for a given market/industry. It is often used by companies to project their own anticipated Revenue figures.
Formulaically, Annual Market Size = Total Revenue of a product outstanding Average life of the product. For
example, Total Revenue of a product outstanding might represent the sticker price of all cars driven in the US,
while the Average life of the product would be the average number of years a car is driven.
It is also worth knowing the four steps in the Product Life Cycle Curve, as the concept could come up in a
hypothetical product case.
Emerging: A new product or technology that is in initial adoption phases and therefore has very rapid growth
rates (for example: electric cars)
Growth: Product adoption is becoming widespread but still growing at an above-average rate (for example:
smartphones)
Maturity: Product adoption is widespread, or at least stabilized; growth typically comes only from price
increases and growth in GDP (for example: breakfast cereal)
Declining: Technological obsolescence, shifting consumption patterns, or increased market competition has
resulted in total growth rates that are below-average or negative (for example: dairy products or wireline
telephones)
OPPORTUNITY COST
Opportunity Cost simply refers to the concept that if a person or company does X, the person or
company necessarily cannot also do Y. This is an important concept throughout business and consumer decision
making, as there are only finite resources available in most cases (time, money, etc.).
Thus, for example, it is unwise for a company to invest $1 million in a project earning $3 million if that same
investment prevents it from investing the $1 million in another opportunity that would earn $10 million. In this
case, the Opportunity Cost can be defined as the loss of incremental profit of $7 million ($10 million potential
profit lost minus the $3 million earned).
If X does not prevent also doing Y, then there is said to be no Opportunity Cost of doing X with respect to Y. In
the above example, if the company had $2 million to invest and the capacity to manage both projects, it could
reap the profits from both projects, i.e., $13 million.
ELASTICITY (SUPPLY OR DEMAND)
Elasticity is a concept from microeconomics that describes the tradeoff between Quantity and Price.
Specifically, Elasticity is the ratio of a percentage change in quantity to the percentage change in price.
Formulaically, Elasticity = % Change in Quantity Demanded or Supplied % Change in Price.
For example, if an increase in the price of oranges from $1.00 apiece to $1.50 apiece causes demand for those
oranges to fall from 100 units to 80 units, then the % Change in Quantity = 20% and the % Change in Price =
50%. Therefore the Elasticity of Demand = (20 50) = 0.4.
Note that for normal goods, Elasticity of Demand will always be negative (higher prices mean less quantity is
purchased) while Elasticity of Supply will always be positive (higher prices mean that suppliers are willing to
produce and/or supply more goods).
The concept comes up in multiple types of cases, such as pricing optimization. Clients often ask what the impact
would be on volume if they adjust the price. Usually the correct answer is to increase prices in Inelastic markets
(price increases lead to a relatively small decrease in products sold) and decrease them in Highly
Elastic markets (price increases lead to a large decrease in product sold).
FINANCIAL STATEMENTS, ACCOUNTING AND VALUATION
Unlike Investment Banking interviews, which can be detailed and highly technical in terms of Finance and
Accounting, Consulting interviews and the Consulting job itself revolve much more around estimation and
exercising business judgment and what-if analysis. Rarely would a Consultant be called upon to develop and
maintain a detailed, precise financial model for Discounted Cash Flow valuation, for example.
That being said, a basic-to-moderate understanding of the Income Statement, Balance Sheet and Statement of
Cash Flows, and how they work together, is very relevant to many interviews. (You might even be provided with
a basic Income Statement or Balance Sheet of a company as part of a Case Study interview question.)
Rather than reinventing the wheel and writing content on Finance and Accounting in this guide, we recommend
you review any standard, basic Financial Accounting textbook to familiarize yourself with the components of
basic Financial Statements:
Income Statement (Revenue, Expenses, and Profit)

Balance Sheet (Assets, Liabilities, and Equity)
Statement of Cash Flows (Cash Flows broken out into the following categories of sources: Operating Activities,
Investing Activities and Financing Activities)
We also recommend that you familiarize yourself with some basic core Finance concepts (Net Income, EBIT
(Operating Profit), EBITDA, Free Cash Flow, Internal Rate of Return, Net Present Value, and Enterprise Value
are good places to start) and core Valuation techniques (Cost of Capital, Comparable Company Analysis,
Precedent Transaction Analysis, Discounted Cash Flow analysis, and Leverage Buyout analysis). Although these
concepts will not be tested and do not form a major part of general Consulting Case Study interviews, these topics
can appear in a general discussion about a particular business situation and you should be able to discuss them
at least on a basic level.
If you are applying for a job in Business Development, or for a Consulting position in a Corporate Finance group
or at a firm that does a lot of Corporate Finance Consulting work, then you should definitely study up and be
prepared for these core Finance and Accounting concepts, because they will likely be tested on in detail in your
interviews. In addition to introductory Finance and Accounting textbooks, we highly recommend that these
candidates read the Street of Walls Investment Banking Technical Training guide, which addresses complex
details around Financial Statements, Accounting and Valuation at a very detailed level. (We also recommend this
training guide in general to anyone who is interested in advancing their Finance and Accounting skills
particularly when it comes to Corporate Valuation.)
CONSULTING CASE STUDY TYPES

In the previous chapter, we described some well-known frameworks for evaluating companies and industries
frameworks that are important in Management Consulting Case Studies, and can broadly be applied to many
different types of Consulting Business Situation Cases. We also described a number of analytical techniques that
frequently come up in Business Situation Cases. In this chapter well take a deeper look into common types of
Business Situation Cases, evaluating the core concepts in them and the methodologies for approaching them
(using ideas from the frameworks from the previous chapter to help us organize our approach, and the analytical
techniques from the previous chapter to help us drive to an answer).
Each of these Case Study categories occurs very frequently in Management Consulting Case Study interviews,
so you should be familiar with the basic issues that tend to occur over and over when they come up. In short, you
should practice each of these Case types multiple times until you feel confident that you could a new Case of this
type in a live interview.
Here are the eight primary types of Business Situation Case Studies as we see them:
Profitability Optimization
Pricing Optimization
Industry Landscape & Competitor Dynamics
New Product or Project
Growth Plan/Strategy
Market Entry or Expansion
Merger/Acquisition/Joint Venture
Start-Up/Early-Stage Venture
Note that in most situations, a given Case will lend itself to several different categories. In the discussion below,
we will attempt to enumerate the different combinations of Case Study situations that tend to occur together in
the same Case.
Profitability Optimization
In both good and bad economies, companies continually seek to optimize their Revenue model and their Cost
structure. The goal, ultimately, is for the company to use Invested Capital as efficiently as possible.
The two core components of a Profitability Optimization case are a Cost Assessment and a Revenue Assessment.
Sometimes, only one of the two will be required for the Case. Note that Profitability Optimization situations often
arise as part of a Case Study of another typefor example, in a Case Study involving pressures from competitors
or substitute products, you may need to assess and optimize the Companys Cost structure to determine it is
competitive. Or, it could be that the case revolves around the Companys Cost structure optimization, the job
candidate may need to perform some qualitative analysis of the competitor or supplier landscape. As you can
see, a variation on Profitability Optimization can arise as part of many different Business Situation Cases.
Whenever Profitability Optimization is a key issue, the interviewer will usually highlight that profitability has
been declining (or is projected to decline) and the Case will involve identifying the sources of the decline and
potentially how to reverse or obviate it.
EXAMPLE CASE SITUATIONS
The client is a low-cost airline based in Singapore, serving 24 destinations in the Southeast Asian market. The
Airlines profitability was strong until 2010 and has since seen a declining trend and is now only just barely
profitable. The CEO would like you to determine what is causing the profitability decline and suggest a strategy
to reverse this trend.
The client is a market-leading, niche ski equipment manufacturer based in Colorado. Profitability has remained
steady but the CEO has noticed from reading industry annual reports that two publicly-listed competing ski
equipment manufacturers have meaningfully higher profit margins and have also been increasing their top line
(Revenue). The CEO would like to understand the drivers of these differences.
Note that both of these Cases would involve some degree of Market Landscape/Competitor Dynamics analysis
in addition to Profitability Optimization.
CORE CONCEPTS AND STRUCTURE
Scenario: The client has determined that profitability margins have been (or are projected to be declining) and
has requested that you analyze the causes of this decline and put forth recommendations to reverse it.
EXPENSE ANALYSIS
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Gather current expense breakdown and historical expense breakdown (this question alone will only help to get
you towards the key focus area, as the interviewer will only have so much information).
Identify the bang areas (this is Consultant lingo for expense areas that account for a large percent of the total).
Analyze the key Fixed and Variable expense components and identify any meaningful changes in expense areas.
Fixed Expenses might include overhead, fixed equipment expenses or depreciation, distribution, rent, and/or
interest
Variable Expenses might include raw materials, labor, sales, and/or distribution costs
Request information on competitor Cost structures from the interviewer to see where the companys Cost
structure may be inefficient.
Assess whether any expense areas could be cut with minimal or no impact on sales.
REVENUE/SALES ANALYSIS
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Gather as detailed of information as possible on current sales volumes and pricing and historical volumes and
pricing. Use this information to determine growth rates.
Identify the bang areas (consultant lingo for revenue streams that account for a large percent of the total,
and/or a large percentage of the growth in the total).
Analyze the key product areas and identify any meaningful changes in volumes and prices.
Request information on competitor Revenue models (volume and pricing) from the interviewer to see where the
company is potentially missing profitable business activity.
Assess whether any changes could be made to improve overall Revenue or Revenue per unit sold.
Pricing change suggestions/analysis (e.g., factors behind price elasticity; see Pricing Optimization Case
descriptions below)
Volume assessment and ways to improve volumes
Identify changing customer desires/demands and respond accordingly.
Invest in and/or reformulate marketing strategy.
Expand distribution channels.
Expand sales force or customer service.

Expand production capacity.
Expand product/service portfolio (see New Product or Project, Growth Plan/Strategy, and Market Entry or
Expansion Case descriptions below).
Make an acquisition or enter into a joint venture.
Assess which products/divisions might have the largest growth opportunities and allocate investments
accordingly.
Pricing Optimization
What would customers be willing to pay if Facebook shifted to a subscription model (we heard that this Case was
conducted by the San Francisco office of a major Consulting firm recently, though the client being analyzed was
not Facebook)?
A long-stay hotel chain would like to maximize profitability by determining the optimal pricing for different
lengths of stays and types of rooms.
An online movie-streaming company is seeking to select the optimal price mix for its product offering in order
to maximize profitability.
Like Profitability Optimization, this is a type of Case Study in which many of the other Case Study types might
be relevant (for example, Industry Landscape, Competitor Dynamics, Growth Plan/Strategy, etc.)
Scenario: The client is deciding how to set prices so as to maximize profitability.
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Competitor/substitute pricing is the key element hereparticularly if there is no major differentiation or benefit
to the clients products relative to substitutes.
Price of substitute products/services
Is the product sufficiently different to justify a higher price? (This points to the threat of substitutes.)
Customer loyalty/lock-in (as an example: many lower-priced colas have failed to successfully compete against
Coca-Cola due to consumer brand loyalty)
Remember to ask about: Price Elasticity, Price Elasticity, Price Elasticity!
Interviewers will often give you sufficient information to assess the impact on volume with a price adjustment
and expect you to make the calculation.
The higher the absolute value of Demand Elasticity (i.e., the more volume decreases when prices increase),
the more likely it is that a price reduction would be beneficial. Likewise, the lower the absolute value of Demand
Elasticity (i.e., volume barely decreases when prices increase), the more likely it is that a price increasewould be
beneficial.
Expense-driven pricing analysis
What is the fully-loaded cost for the client to produce the product or offer the service? How does this compare to
the price?
How does clients fully-loaded cost compare with competitor pricing?
Note: In situations in which the clients cost is higher than the competitor price, it is usually a good
recommendation to exit this product or service unless it can be demonstrated that:
There is a clear path to reduce client production costs, or
The competitor price is temporary and unsustainable.
Customer-driven pricing analysis
How much would customers be willing to pay for this product? (You are not expected to be able to answer such
questions, but ideas on how you might approach such questions are importantfor example, running a survey,
looking at applicable Case examples, looking at pricing structures for comparable products, etc.)
What is the current state of demand and supply for the product or service (for example: would an increase in the
number of orange juice manufacturers and orange tree groves be putting significant pressure on orange juice
prices)?
What are the alternatives for the customer and the relevant prices? I.e., is the threat of substitutes substantial or
can it be mitigated?
Industry Landscape & Competitor Dynamics
A client is a large nutrition, health & wellness Company and is considering divesting its non-core infant foods
subsidiary in order to free up capital to invest in higher growing industries. The CEO would like you to assess
the industry landscape of the infant foods business in Western Europe.
A client is a global financial services firm that is considering allocating more resources to the facilitation of
electronic fund transfers globally. The CEO wants to better understand the market landscape and develop a
strategic plan to increase the Companys share of the market.
Scenario: The client wants you to understand and assess an industry (this often overlaps with Market Entry,
New Product or Project, or Growth Plan/Strategy Cases, described in more detail below). Usually, the goal is to
assess the characteristics of an industry and to determine whether or not it is an attractive industry to enter, to
ramp up, or potentially to exit.
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Market/Industry Landscape
Current market size
Projected market growth
Customer mix (a.k.a. Customer Segmentation)
Industry-wide profitability
Mergers & Acquisitions activity in the industry
Competitive Advantage/Barriers to Entry
Supply chain: who are the key suppliers to the industry? (Assess this only if relevant)
Brand loyalty
Technology, regulatory issues, or other key topics relevant to the market
Competitor Dynamics
Key competitors in the market and their strategies
Current market shares and shares over time
Used to derive Market Concentration (i.e., what portion of the market is served by the top 3/5/10 companies
in the market?)
Product/service differences among competitors
Any recent moves/threats by a key player to the market or a new entrant?
New Product or Project
A client is a durable consumer equipment manufacturer attempting to develop a green washing machine that
employs special technology, resulting in 60% less water use and cleaning 10% more effectively than standard
washing machines. The CEO would like help to determine the products market potential and the strategy to
bring it to market.
A client is a pharmaceutical company that is engaged in Research & Development on a drug that would both
lower cholesterol and reduce obesity (i.e., help in significant weight loss). The CEO would like to know whether
this drug would gain traction, and if so, what is the potential market size and the optimal price for such a drug.
Once again, this is a type of Case Study where many of the other Case categories might be relevant (Industry
Landscape, Competitor Dynamics, Growth Plan/Strategy, Market Entry or Expansion, etc.). Note that such cases
could also involve decisions such as the purchase of a major information technology system (in this case, many
of the acquisition concepts could be applied). It could also involve the assessment of a new investment project,
such as the development of a new major manufacturing or sales facility.
Scenario: The client is developing a new product and would like your assessment of the feasibility of this
product. Would the product be profitable and beneficial in the marketplace?
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Product Snapshot (Less relevant for New Project cases)

Will the client have any competitive advantage that prevents competitor entry (such as a patent or a way to lock
in customers) once the client has unveiled the new product?
How is the clients product different from and/or better than competing products? What are the substitute
products?
Pros and cons of client product (for example, environmental and social considerations)
Is there a risk that that the new product will cannibalize another of the clients products?
Customer Strategy (Less relevant for New Project cases)
What is the appropriate customer mix to target? How does this affect profitability and marketing strategy?
What are the distribution channels? Can the client use its existing distribution channels?
What is the methodology/strategy to attract customers to try the product and potentially switch?
What is the methodology/strategy to retain newly acquired customers?
Market Entry Strategy (Mostly less relevant for New Project cases)
Competitive advantages/Barriers to Entry
Approach to entering (Acquisition or enter organically?)
Time/investment required to enter market
Product pricing strategy
Technology, regulatory or other risks to entering this market
Market Landscape
Current market size
Future market growth
Current customer and product mix
Key competitors in the market, their strategy, Market Shares (current and historically over time), product
differences and potential response to clients actions
Product/Project Funding
Does the projected profit justify the required the Research and Development expenditure, the initial capital
requirements, and any ongoing investment needs?
What is the Opportunity Cost of the required funding?
What is the required financing and how is the Research & Development being financed?
Will the project result in Economies of Scale (i.e., cost reductions for increased production) elsewhere in the
company? (Less relevant for New Product cases)
Growth Plan/Strategy
The client is a German carpet manufacturer that has seen sales decline dramatically in its North American
operation. The client would like you to help it develop a strategic plan for sales growth in North America and to
determine the root causes of the sales decline.
The client is a surf apparel Company that has three stores on the West Coast of the United States and is looking
to grow its store base significantly across the continent. The CEO would like help designing a store rollout
strategy across North America.
Yet again, this is a type of Case Study where many of the other Case categories might be relevant (Industry
Landscape, Competitor Dynamics, New Product or Project, Market Entry or Expansion, etc.)
Scenario: The client is seeking to grow its business, whether it involves growing a certain products sales,
growing in a certain geographical region, increasing total sales, etc.
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Increasing Revenue (this is the heart and soul of most Growth Plan/Strategy Cases)
Ways to increase number of units sold
Optimize prices (See description of Pricing Optimization above)
Increase share of wallet (fancy term used by Consultants to mean that the client captures more of a typical
customers spending in a particular area than it previously did; analogous to Market Share)
Determine which products/divisions have the largest growth opportunities and allocate investments accordingly
Growth Drivers (approaches to growth and factors that influence capacity for growth)
Identify changing customer preferences/demands and respond accordingly
Invest in and/or reformulate marketing strategy
Investigate means and requirements to expand distribution channels
Investigate means and requirements to expand capacity
Investigate means and requirements to expand sales force / customer service
Investigate means and requirements to expand product/service portfolio (see description of Market Entry or
Expansion below)
Make an acquisition or enter into a joint venture (see description of Merger/Acquisition/Joint Venture below)
Always drive towards Profitable Growth: in any growth case, be sure to discuss this issue. Growing Revenue
in and of itself is usually not a good outcome if the Costs of the growth exceed the Revenue, or if there were other
growth opportunities that would have yielded a higher return on investment but are mutually exclusive (see
Opportunity Cost).
Market Entry or Expansion
The client is an online yoga apparel retailer looking to enter the European market. The CEO would like help in
formulating an entry strategy.
A high-end watch manufacturer has developed a high quality watch called the outdoors watch in order to attract
the wealthy, younger audience. The CEO would like to develop a strategy to attract this customer segment.
This category of Case Study frequently overlaps with several other Case categories (Industry Landscape,
Competitor Dynamics, New Product or Project, Growth Plan/Strategy, etc.)
Scenario: A client is seeking to expand or enter into a new market, whether it be a new geographical region or
an additional customer segment.
Market/Industry Landscape
Current market size
Customer mix (a.k.a. Customer Segmentation)
Industry-wide profitability
Mergers & Acquisitions activity in the industry
Competitive advantage/Barriers to Entry
Brand loyalty
Technology, regulatory issues, or other key topics relevant to the market
Competitor Dynamics
Key competitors in the market and their strategies
Current market shares and shares over time
Used to derive Market Concentration (i.e., what portion of the market is served by the top 3/5/10 companies
in the market?)
Product/service differences among competitors
Any recent moves/threats by a key player to the market or a new entrant?
Entry Strategy
Approach to entering (acquisition or enter organically?)
Time/investment required to enter market
Customer mix/segmentation
Product pricing strategy
Merger/Acquisition/Joint Venture
Your client is a European online white goods retailer that is considering acquiring a North American online
furniture retailer.
Your client is a U.S. specialty chemical producer that is considering acquiring a regional specialty chemical
producer in Indonesia.
As you might expect by now, this is a type of case where many of the other case segments are relevant. In
particular, Merger/Acquisition/JV activity often represents one method of implementing a Growth
Plan/Strategy, a New Product or Project, or a Market Entry or Expansion.

Scenario: The client is considering either acquiring a company or entering into a Joint Venture, driven by many
potential factors such as wanting to increase market share, widen product portfolio, take out a potential
competitive threat, etc.
Important: For this Case type, you should ask questions as to why the Company is contemplating such an
action. The responses to these questions can help steer you to the right analysis, as the responses will often
indicate what the key considerations behind the acquisition/JV are from the clients perspective. Thus you should
perform a standard Merger/Acquisition/JV analysis as outlined below, but then generally pivot to the right
framework for analyzing the business scenario from the aforementioned categories, depending on the situation.
Investment Considerations in entering the Merger/Acquisition/JV agreement

Evaluate price to acquire (use back-of-the-envelope Valuation techniques to consider whether the deal is
reasonably priced, such as those based on Comparable Company Analysis or Precedent Transaction
Analysis)
Perform Target company-specific analysis
Market position
Customer Concentration and customer certainty
Supplier relationships and supplier certainty
Barriers to Entry
Reputation and brand loyalty
Product/regulatory/technology risks
Compute expected profitability resulting from acquisition
Pay-Back Period/Net Present Value/Internal Rate of Return based on current operations and growth
estimates
Add in Cost or Revenue improvements from Synergies (see below)
Subtract out Integration and Restructuring expenses (also determine whether the project is feasible)
Compare with similar projections if the Company were to endeavor to grow organically (required capital
expenditures, cost of marketing strategy, etc.)
Estimate Synergies
Ability to combine or leverage joint distribution channels across products produced by acquirer or target
Value of expending geographic/market reach
Cost synergies (such as spreading overhead costs across a larger combined business or combining redundant IT
systems)
Evaluate other transaction dynamics
Strategic fit
Cultural challenges
Competitor response
Assess the medium-to-long-term plan for the acquisition
Plan to exit (if relevantnote that this will always be relevant for Private Equity firms)
Plan to restructure the organization, if any, and how/why
Start-Up/Early-Stage Venture
While consulting firms rarely work for Start-up companies due to the high fees typically charged, there are
increasingly Case Study questions that discuss start-ups. Some Consulting firms have even begun the practice of
working for Start-up companies and receiving equity compensation from the Start-up in exchange for reduced
cash Consulting fees.
Importantly, this topic is in many ways covered when thinking about a company entering a new market or
developing a new product, although there are usually some additional issues to consider for a Start-up company.
(Most of these additional issues fall into the Business Plan category for a Start-up company.) Additionally,
there is generally significant overlap with the industry landscape section.
Two real estate entrepreneurs are contemplating setting up a co-working space in downtown Chicago to attract
the increasing number of young IT entrepreneurs in the area. Discuss the key considerations for a business plan
for such a venture.
Siggi, a student from Iceland at Stanford University, has determined that there is an enormous opportunity for
Icelandic-style yogurt in the North American market. He is in the process of securing funding to produce the
yogurt on a farm in Oregon and would like input regarding the key considerations for the yogurt to be a success.
Situation: A potential client has launched a new company to develop a new product or technology that is
expected to have positive yet disruptive consequences for a particular market or industry. The client would like
your advice regarding specific issues in the company development or product rollout, and any thoughts regarding
optimal company strategy.
Market Landscape
Competitive advantage/Barriers to Entry (with a Start-up, this is a crucial piece of the analysiscan
the Start-up enter the market successfully? Will the Start-up will have some sort of competitive
advantage, whether it be proprietary technology or access to particular distribution channels?)
Current market size (if the product a new concept, then you would typically be asked to assess the industry
of a substitute product or service, or use relevant comparable products or services to estimate the
potential market size for the new concept)
Key competitors in the market, their strategy, current market shares and shares over time, product
differences and potential response to entry
Likely customers and customer mix (a.k.a. Customer Segmentation)
Industry-wide profitability (to the extent applicable)
Brand loyalty
Technology, regulatory issues, or other key topics relevant to the product or market
Business Plan (the interviewer might ask you to compile a very simple business plan, after he or she gives you
some information; key components are given here)
Product/Service
What is the product/service? What are pros and cons of this product/service? How does this compare to existing
products on the market?
What will be the competitive advantage and/or barriers to entry for a product of this type?
Customers and Distribution
Who are the target customers?
What are the core distribution channels?
What is the marketing plan?
Financing/Profitability
What are the initial funding requirements prior to cash flow Break-Even? How does this compare with expected
future profitability?
What are the projected Revenue and Costs for the next three years?
Management and Oversight
Management: experience and abilities
Preliminary Investors: reputation, expertise, and ability to add legitimacy to the new enterprise (and potentially
invest more in the company)
Key Directors and Advisors
Being able to discuss the core aspects of analyzing a Start-up company highlights your ability to quickly answer
questions about a new project or idea that may be thrown at you when you are with clients.
Additional Resources
There are a number of guides published and online that attempt to discuss different types of Consulting Case
Study questions in a comprehensive and informative way. Our feeling is that most of them are not particularly
helpful or are too expensive. There are two, however, that we have found to add quite of a bit of value as an addon to the discussion above, and are therefore worth checking out. Please comment on this page or email us
directly if you have a suggestion for an additional resource:
CONSULTING BUSINESS SITUATION CASES

Now that we have been through the frameworks/analytical methods frequently used to solve Case Study
questions, as well as a discussion of the main categories of Case Study questions that are asked, its time to
practice solving Cases.
The six Street of Walls Business Situation Case Study examples provided in this chapter are outlined in a manner
that would reflect a real case. In many other guides, the Cases are presented in a much cleaner way, often applying
specific frameworks with little explanation of or exploration into the thought process behind solving them. Often,
these guides present all of the information up front, whereas in a real Case Study interview, the candidate will
often have to ask follow-up questions to get the needed information. In short, real Case Study interviews at firms
are never straightforward, and interaction with the interviewer generally involves jumping around various
business concepts but tying together your responses in a thoughtful, articulate, concise, and accurate manner.
When you read through these Cases, take time to pause and think about what your next steps would be. Which
questions would you ask? How would you process the response? At what point would you begin performing
analysis? At what point would you begin offering recommendations or hypotheses? Go through the guide slowly
and deliberately, pausing to see what youd do next. Then compare your thoughts with the following lines. When
youre done, see where you could have improved your thought process and what you would have done differently
now that you know the ending of the Case. Practice this method repeatedly, and you should find that your
performance on these Cases and your confidence begin to improve dramatically.
Also be aware that many Cases will not have a clear-cut answer. The important thing in such Cases will be your
ability to articulate your understanding of the key issues, make recommendations/form perspectives that are
appropriate, and give guidance for what additional information and analytics you would like to perform to assist
in making the decision clearer.
Here are a few additional tips before you get started:
Before diving in to the example Case Studies, be sure you have reviewed our discussions on frameworks/analytics
for Consulting Case Studies as well as Consulting Case Study Types from previous chapters. The concepts and
structures outlined in these chapters will be a useful reference tool as you practice cases. We see it as a mini,
strategy-focused, MBA in only about 20
When you read these Business Situation Cases and the suggested approach for responding to them, you will see
that most are common sensebut that this common sense develops over time and with practice, reaching evergreater levels of understanding and sophistication.
This is a valuable skill for you to develop not only for the Case Studies, but also for your Consulting career. Being
able to identify the key issues and structure your response to a business problem well is important for the Case
Studies, but it is just as important in the daily life of a Consultant.
It is worth noting that the business concepts and situations highlighted in these examples do overlap, but most
real-world business situations (and also most Case Study interview questions) will also include a range of
business issues to address, even if there is only one core problem being asked about. For example, a company
bringing a new product to market will require market size analysis, but will also a competitor analysis and
industry landscape, as well as a good understanding of the customer segments.
As you practice Cases, you should rehearse responding out loud, not just in your head. You will find that you
begin to speak more articulately and competently about business, regardless of whether you secure a position at
a Consulting firm. This will be valuable in your career no matter what you do!
Note: by convention, Case descriptions, interviewee questions, and interviewee responses are written in normal
text, while interviewer responses to interviewee questions are written in italic text.
OK, lets get to it!
SOW Business Case Example #1
TO CO-WORK OR NOT TO CO-WORK: NEW YORK CITY
There is an increasing trend of co-working in New York City, fueled partly by the technology boom. Co-working
spaces are communal work places, which freelancers and small companies can use as workspaces, while sharing
the space with any number of other freelancers and/or small companies. As part of the arrangement, many
resources, such as office equipment and bathroom and kitchen facilities, are also shared.
Fred Wilson of Union Square Ventures explains the trend well:
The main benefits of this kind of setup are camaraderie (small start-ups can be lonely), knowledge-sharing,
high energy, culture, and cost sharing. I have heard many stories of software developers walking to the other
side of the office to talk to software developers working for another company to talk about a thorny tech issue.
That same thing can happen in finance, legal, business development, marketing, product management, really
all parts of the business. You can get some of the benefits of scale without being at scale.
Matt and Tony are two real estate entrepreneurs who want to capitalize on this trend, and start New Work Labs,
a co-working space that fits 75 people. They are in talks with two office buildings to lease out the space. The first
one is a building near the young and trendy Union Square area, which will be $40 per square feet per annum.
The second building is in the SOHO/Chinatown area, in an old loft surrounded by dumpling shops at $30 per
square feet per annum.
Which building should they select?
DATA LIST AND QUESTIONS
How much space is needed for 75 people?

o Normal office allocates 200-225 sq. ft. per employee. However, co-working spaces in New York
can be as dense as 100 sq. ft. per person.
What is the total investment required to set up the space?
o Plain vanilla build-out and retrofitting will cost $50 per square foot.
o Furnishings will cost $20 per square foot.
o Assume total build-out for Chinatown space is 30% cheaper than Union Sq.
What are the utilities and maintenance costs (this includes everything, e.g. electricity, wifi, water, heat,
repairs to furniture, security, etc.)?
o $10,000 per month.
Do they need to hire someone?
o Yes, an office manager at $70,000 per annum total compensation.
What will be the rental for these desks?
o $300 per month per person for monthly usage.
o $30 per day for daily usage.
o Assume that 1/3rd of total occupancy is for daily desks.
o No weekend hours.
o For simplicity, assume flat rates without any deals.
What is the occupancy rate?
o Co-working spaces have been found to quickly reach 70% occupancy rate on average.
o The Union Sq. location will have a higher occupancy (assume 80%). Chinatown will see average
occupancy. (Note: Bonus points for assuming that Union Square might see higher occupancy
rates.)
Are there any additional revenue opportunities?
o Co-working spaces double up as event spots during evening hours. Average rate for an event is
$5,000.
o To avoid disrupting the regulars too much, a space holds no more than 6 events on average
every month. (Note: Bonus points for asking this question. Also, bonus points for considering
that Chinatown may have a harder time getting to 6 events per month.)
How long do Matt and Tony want to do this?
o They would ideally exit in less than 10 years. (Note: Bonus points for asking this question.)
KEY ITEMS TESTED IN CASE
Calculate the build-out costs.

Calculate the operating costs.
Generated revenues must exceed operating costs. This tests a candidates creativity to maximize revenues, and
allow him/her to explore additional avenues. Take account of consideration for the community, which may mean
letting go of some money generating opportunities.
Which building offers a faster payout? This must be seen in light of earnings run rate, therefore also see which
building will offer a better exit opportunity in 5-10 years.
SAMPLE CALCULATION
(Note that during the case, you would need to do this on paper and estimate to some degree. You may even want
to concentrate mostly on the differences between the two offices to gain a perspective on which facility to rent.)
TAKEAWAYS
The Union Square office takes longer to repay the initial investment but generates more income n an ongoing
basis. Ignoring discounting, the Union Square office offers more income potential over a 10-year time frame.
The decision is a close one, however, and is largely driven by assumptions about the relative occupancy rates and
the number of events per month.
If, in fact, the number of events per month is the same in each office, then the Chinatown facility dominates the
Union Square facility (less investment and more cash flow per month).

TELECOM COMPANY: GROWTH OPPORTUNITIES
Assume that the year is 2006, and the largest Indian Fixed Line Telecom Co., Telca, which has global ambitions,
wants to double its Revenue over the next 5 years. To meet this aggressive target, its strategy team scanned the
universe for acquisition targets and identified two options:
SeaLink, the largest undersea cable provider on the Trans-Atlantic route

Afmob, the largest mobile telephone service provider in Africa
You have been hired as a Consultant to help Telca pick the most ideal optionthe company cannot acquire both.
The following Exhibits are available. How would you go about this project?
EXHIBITS
Exhibit E: Undersea cable map
INITIAL RESPONSE/KEY ISSUES

The key is to quickly analyze and realize from the data that the two choices present completely different growth
strategies: expand in a mature, crowded market closer to the core strength of the Company (SeaLink) or in a
rapidly-growing market where the Company has limited experience (Afmob). Either strategy can be justified.
A sample thought process is outlined below, including some questions for the interviewer:
EXHIBIT A QUESTIONS AND INFERENCES
Enterprise fixed line and wholesale voice/data are the primary business segments for Telca.
Consumer mobile is growing fast, but is still a small share of the total
Q: Is wholesale data and voice for Telca carried on the same international cable?
A: Yesthe same is true for SeaLink.
EXHIBIT B QUESTIONS AND INFERENCES
Primary markets for Telca are domestic (India), Europe, and North America.
Limited presence in Africa and the rest of the world
Q: What does a regions revenue mean for wholesale data/voiceparticularly with regard to international calls?
A: This is the location where the sales originated.
EXHIBIT C QUESTIONS AND INFERENCES
Q: What does the % Capacity in use figure represent?

A: Undersea cables have more capacity than what is currently being used. This is similar to your
computers hard disk. The figure represents the total for voice and data combined.
Q: Telcas shares are listed in terms of the proportion of installed capacity; what about its shares for % Capacity
in use?
A: Assume a split equal to that of the whole market.
Telca has a dominant position in AfricaAsia, South AsiaEast Asia, and East AsiaNorth America (TransPacific) routes (assume probable #1 position for all). It has marginal status in North AmericaEurope
(Transatlantic) and Europe-Africa.
Sealinks acquisition will make Telca the #1 player in the wholesale data/voice business in each of the major
routes.
There is significant unutilized capacity in Transatlantic. This means that even if a player has dominant market
share, it cannot control pricing because other players will simply light up additional unused capacity.
EXHIBIT D QUESTIONS AND INFERENCES
The African mobile market is exploding, i.e., growing at 14% annually.

Afmob is growing even faster, i.e., it is gaining market share and is already the dominant player.
The overall market is relatively small at the present time.
EXHIBIT E QUESTIONS AND INFERENCES
Illustrates Exhibit C data visually while also giving visual inferences to the magnitude of each routes relative
market size/capacity.
TAKEAWAYS
SeaLinks acquisition strengthens Telca in its core business.

However, the core business is slow growing and facing a capacity glut.
Mobile is not the core business for Telca but is the fastest growing market.
Telca has limited experience in running a mobile business, and no experience in running it in a foreign
environment.
Afmobs acquisition will give Telca a foothold in the fastest growing high potential market.
In your response, you should take a position after carefully reviewing all of the evidence. There is reason to
believe that either acquisition could be better. Afmob provides entry into a new, fast-growing market in which
Telca has limited exposure, but the market is still small and the move has a number of strategic hurdles to face.
Meanwhile, SeaLink is a leading player in Telcas core business, serving routes in which Telca has marginalplayer status. This market is not growing rapidly, and there may be pricing pressure due to the substantial unused
capacity.
A good follow-up to your conclusion would be to highlight areas of research to help make a better informed
decision, such as:
Profitability of each business
Quality of management at each business
More detail on Competitor landscape, including pricing trends and market positioning
Relative cost to acquire each business
Technological or regulatory risks (and in the case of Afmob, potential political risks)
Current Revenue for SeaLink
Remember, however, that the key goal of this case was Revenue growth, not Profit. One could reasonably infer
from the Exhibits that, if pricing per volume is similar at SeaLink to Telcas pricing, that SeaLink is likely to have
much more current revenue than Afmob. In that case, an acquisition of SeaLink immediately gets Telca much
closer to its stated goal.

MIND THAT HEAT: STICKY LABELS
Sticky Inc. manufactures heat-shrink labels. You might recall noticing these labels on Arizona Tea or 5 Hour
Energy bottlesthey are completely wrapped from head to toe and have 360 degree graphics printed on them.
This is achieved through label sleeves that shrink by applying heat to conform to the shape of the bottle. This
makes handling and storage of the labels tricky. Label materials can start shrinking at temperatures over 90
degrees Fahrenheit.
Sticky Inc. is struggling to decide whether to manufacture these labels in China or the U.S. and is soliciting your
assistance to help the company make an informed decision.
What is the price of these labels?

o 30 cents per Thousand Square Inches (MSI) (Note: M is often used as a symbol representing
1,000).
Where are the customers located?
o 100% in the United States.
What does it cost to manufacture them?
o 16 cents per MSI in China.
o 20 cents per MSI in USA.
Who pays for the transportation cost from warehouse to customer?
o Sticky Inc. (technically, this cost is baked in the price, but Sticky Inc. has limited ability to pass
on any increase in this cost because the competition might not follow).
What is the transportation cost?
o 3 cents per MSI when being transported from China (assume the warehouse cost in the U.S. is
baked into the manufacturing cost).
o 2 cents per MSI when transported from within the U.S.
Are the warehouses temperature controlled?
o Yes. All the costs are baked into the manufacturing cost.
Is the transportation temperature controlled?
o No. Transportation costs do not account for it. (Note: This is the most important question. Bonus
points for asking it in some variation, and serious negative points for not identifying it.)
How much extra does it cost to transport in reefer (refrigerated) containers?
o Transportation cost doubles.
When is refrigerated shipping required?
o During the summer is an obvious assumption. Assume April to September, i.e., 6 months for US
manufacturing. (Note: Bonus points for considering using temperature control year-round on
shipping in China, as the climate tends to be fairly hot there year-round.)
What are the other costs (e.g. sales, marketing, G&A, etc.)?
o 6 cents per MSI for both options.
SAMPLE CALCULATION
(Note that during the case, you would need to do this on paper, although you should be able to calculate these
numbers exactly. You may even want to concentrate mostly on the differences between the two manufacturing
and shipping plans, and use these differences to estimate the cost savings of one option vs. the other. However,
doing so will make it more difficult to perform sensitivity analysis around the assumptions, and to calculate the
exact profit amount for each scenario.)
TAKEAWAYS
Overall, manufacturing is 4 cheaper in China but shipping is at least 1 more, ignoring reefer shipping.
Assuming half of U.S. shipping and all of China shipping requires refrigeration, this adds 1 to U.S. shipping
costs per MSI and adds 3 to China shipping costs per MSI.
At first glance, our calculations indicate that manufacturing in China is probably cheaper by a fairly small margin
(saving 1 relative to total manufacturing + shipping costs in the U.S. of 23).
Note, however, that we have omitted an important consideration: items like these run a serious risk of inviting
high duties and/or anti-dumping fees in U.S.
Additionally, the company may receive some backlash for shipping manufacturing operations to China. This
consideration is hard to quantify, but may be enough of a factor alone to sway the decision.
The best candidates will evaluate the answer in light of these considerations.
FOOD FOR CRUISE: MIAMI
FoodCruise Inc. runs a four-day/four-night cruise out of Miami. The cruise line has always prided itself upon the
quality of the dining and the experience on board. Traditionally, cruise lines had a single dining hall with a preset menu, with fixed seating at a fixed time twice per day for each of the travelers, who were expected to dress in
a formal manner. FoodCruise currently operates its on-ship meals in this fashion.
FoodCruise realizes that this practice is not appropriate for the free-spirited nature of many individuals who are
seeking an exciting yet relaxing cruise experience. The Company is contemplating the elimination of the dining
hall to introduce 10 restaurants, each serving a different cuisine. Restaurants will serve an la carte menu, and
each passenger will be given a voucher of $200 to be utilized over 8 meals. Any purchase above this amount will
be charged. Industry experts and competitors are keenly watching this innovation.
The CEO of FoodCruise hires you and asks, Is this a wise move for our company?
Overall, the key is to figure out the additional cost for FoodCruise to operate 10 separate restaurants, relative to
its current dining setup, and determine whether it will help the Company win enough incremental customers to
justify the cost.
How many passengers are typically on board a cruise ship?

o The capacity is 500.
o Occupancy has suffered due to the large number of cruise lines and recent economic weakness,
so assume average occupancy of around 60%.
What price does an average traveler pay?
o The price is $1,000 for the standard four-day/ four-night cruise.
How many trips does one ship make in a year?
o 20 is the companys average.
What was the cost of food per passenger for the dining hall?
o $100 is the typical cost per passenger for the whole trip.
What was the profit per ticket?
o 10% of revenue, or $100 per customer, is the companys current profit margin.
Does FoodCruise need more manpower to operate 10 restaurants instead of 1 dining hall?
o Yes, it needs 10 more staff members; the average fully-loaded annual compensation per staff
member is $72,000. You can ignore any upfront costs associated with building out the
restaurants on the ships.
For the restaurants, what is the expected bill per passenger per meal?
o Average across each restaurant is expected to be $40.
o For simplicity, assume consistency across lunch and dinner.
What about tipping?
o In both the options, no individual tipping is encouraged. A lump sum tip is expected at the end
of the cruise, which is distributed to the entire crew. No increase is expected in the total tip
amount.
Is the food cost expected to increase under this proposed plan?
o Yes, assume 20% more to account for the additional pre-prepared food required for individual
restaurants. Because there are more dining options that are varied, there will be more food
wastage. (Note: Bonus points for asking this question.)
What is the additional CapEx (Capital Expenditures) required to set up these restaurants?
o Again, we are ignoring any upfront costs for the build-out of the restaurants, so you can ignore
CapEx for this analysis. (Note: Even though the answer was ignore, add bonus points for
remembering to think of this, because usually CapEx considerations will apply.)
SAMPLE CALCULATIONS
(Note that during the case, you would need to do this on paper, although you should be able to calculate these
numbers exactly. You may even want to organize your work differentlynote, for example, that the additional
manpower is fixed per trip. Therefore, each passenger is worth ($120 $20) = $100 of incremental profit. Since
the incremental fixed cost per trip, from increased staff size, is $36,000, this means we need 360 passengers to
breakeven, or 72% occupancy rate.)
TAKEAWAYS
As per sample calculations, a 12% increase in occupancy is required to offset the additional operating costs, given
that all of the assumptions are correct.
Try to note which assumptions are the most fragile. For example we are assuming an average food spend of $40
per meal by customers. If this drops to $35, then the marginal value of each customer under the new plan falls
from $100 to $60. In that case, even at 100% capacity the plan is a money-loser.
If, by contrast, the actual spend averages $45 per meal, then the marginal value of each customer is $140, and
now the break-even number of customers falls to 257 (51.4% capacity). In this scenario, its likely that the plan is
a winner.
A strong candidate will weigh the probability of winning new customers under the baseline assumptions ($40
per meal) vs. the potential competitive response.
Whether there is a first mover advantage that will sustain the customer win is a smart topic to discuss,
as first move does not necessarily lock in customers for the future. If, for example, competitors
immediately copy FoodCruises plan, this will almost certainly negate FoodCruises ability to maintain
higher-than-industry occupancy rates.
Given the low occupancy rates across the industry, if competitors implement this plan, it may also lead
to a voucher war in which there is a push toward higher and higher voucher values needed to attract
customers. Hence FoodCruise may start out giving $200 vouchers, but may end up feeling pressure to
increase this to $225, $250, etc. in order to attract customers, depending on what the competition does.
Also notice that weve ignored initial Capital Expenditure requirements entirely. In reality, it is very
unlikely that these costs can be ignored. Furthermore, these expenditures will take time to implement.

CHIP THE KART
Disclaimer: This is a fictitious case, which only uses a real life premise. All data is hypothetical, and has no
relation to actual/official data for Amazon Inc. or ChipKart.
Amazon Inc. has been considering an India market entry for some time, although it has been skeptical of the
adoption of credit cards and the migration to online shopping in India. Meanwhile, a local start-up company,
ChipKart, has emerged, and created a strong, well-reputed Indian e-shopping market. It overcame the reluctance
to use credit cards online through the simple innovation of accepting Cash on Delivery (COD) for its merchandise.
ChipKart trained the delivery & logistics team to become a part of the sales process.
This innovation has awoken Jeff Bezos, CEO of Amazon Inc., to the possibility of market potential in India.
However, leery of engaging in an early, head-on battle with ChipKart, Mr. Bezos decided that he would like to
know which are the right customer segments and product segments to target for initial entry into the India
market without arousing a competitive battle with ChipKart early on.
You have been hired as a Consultant to help Amazon make a decision on what direction to take. How will you go
about it?
EXHIBITS

Looking at the Exhibits, you can probably already note that this is a complicated business situation. The key is
to recognize that there are different purchasing trends among the different demographic groups, and that those
differences have significant strategic implications.
A sample thought process is outlined below, including some questions for the interviewer (or just to ponder as
your review the information):
EXHIBITS A & B QUESTIONS AND INFERENCES
Note that 22-32 and 32-42 age customer segments have good credit card penetration. However, the younger end
of the spectrum appears to be lower-price focused.
EXHIBIT C QUESTIONS AND INFERENCES
Something peculiar is going on with ChipKart. Against conventional wisdom, the 22-32 age group seems to be
purchasing a larger amount than would be expected, by value.
Note that both ChipKart and the overall market skew heavily toward older segments, when transactions are
measured by value rather than quantity. In both cases, this suggests that the older population is buying more
items per order or more expensive items.
EXHIBIT D QUESTIONS AND INFERENCES
It would have been useful to have this data by value, but we can gain a sense of Revenue by category by
multiplying the number of transactions by the average price. According to this metric, the highest-revenue
categories are:
Mobiles, Camera & Computers
Home Entertainment
Clothing, Shoes & Jewelry
This could help confirm our suspicion. The products that the older segment could potentially buy are most likely
the higher-priced items.
EXHIBITS E, F & G QUESTIONS AND INFERENCES
COD is prohibitive for smaller value items. Is this passed on to the consumer? Who buys the smaller value items?
(It may be difficult to incorporate the COD cost in the price of the item without losing the revenue to a competitor,
either online or in a physical retail store.)
TAKEAWAYS
It might be challenging to set up cash on delivery (COD) initially (Exhibit G). It requires finding, hiring, and
training a network of delivery personnel, and setting up oversight to ensure respectable quality control.
Cash on Delivery economics do not work for certain products (Exhibit D and Exhibit G), and these products make
up the lions share of the transactions in India. Relative to online bank and credit card transactions, COD
shipping loses money on shipments below 2,000 Rs. in value. (Above 2,000 Rs., the COD method is less
expensive, ignoring setup costs.)
Looking at demographics, one can deduce that older (42+) customer segments buy items more suitable for Cash
on Delivery (they are purchasing higher-value shipments on average, and are much less likely to own credit
cards).
A potential answer could be: Amazon should target younger segments with cheaper items, and place an emphasis
on high-volume purchasing. It should allow only bank and credit card transactions.
The data is ambiguous in some respects, however, and some of the conclusions weve drawn from it may be
misleading. Thus this Case probably has no definitive answer, and there are a range of qualitative and
quantitative issues that could be brought up from the Exhibits, as highlighted above. Such a case can lead into a
discussion about many topics not directly related to the specific Case.
NARNIA OR NEVERLAND
Axia Inc. is a communication equipment company based out of the Greater New York Area. It has been facing
rising Costs with limited ability to increase Revenue, and the companys bottom line (Profit Margin) has suffered
as a result. The company just won a new large contract, however, and is seeking to supplement the existing
software development team at the company with a remote outsourced software engineering team from another
company to help facilitate the delivery of equipment mandated by this contract. The request is to hire a team of
150 engineers.
You have been hired as a Consultant by the senior management of Axia to determine the best outsourcing
location. The decision is between two front-running choices: Neverland and Narnia. While making a
recommendation for the outsourcing location, ignore the outliers. Assume that each country is representative of
all firms in that country.
EXHIBITS

The key to this case is to notice that there are plusses and minuses to each country; therefore, there are multiple
factors to take into account and there is likely to be no clear-cut best answer based on the information provided.
Additionally, the information provided is limited.
A sample thought process is outlined below, including some questions for the interviewer (or just to ponder as
your review the information):
EXHIBIT A: NUMBER OF SOFTWARE ENGINEERS GRADUATING EVERY YEAR
Neverland is a much smaller country, though software engineering seems equally popular among its respective
population (25% of annual graduates).
EXHIBIT B: NUMBER OF SOFTWARE COMPANIES
Narnia seems like a traditional powerhouse, with many large companies. Is a 150-member team too small for it?
EXHIBIT C: ENGLISH PROFICIENCY
Could Axia engineers face problems in communicating with the team in Neverland? Overall it has a much lower
English proficiency than Narnia (25% vs. 40%), although the majority of the younger population in both locations
seems to be proficient in English.
Narnia has an edge here, but if hiring is to be done among younger workers, that edge is less clear-cut.
EXHIBIT D: CODING PRODUCTIVITY (LINES OF CODE WRITTEN PER DEVELOPER PER
YEAR)
Neverland appears to have much strong software engineering talent. Much higher LOC scores and much fewer
bugs per LOC.
EXHIBIT E: AVERAGE SALARY PER SOFTWARE DEVELOPER (WITH 5 YEARS OF
EXPERIENCE)
Thats a big cost difference. Is Neverland worth it?

TAKEAWAYS
There are not many calculations involved in this case. Therefore it is essential to highlight the major issues.
Narnia is a much bigger economy with far more firms of much larger size on average.
(Since the requirement is only 150 engineers, it is possible that Neverland firms will be
more eager for the business opportunity than Narnia firms.)
In spite of this, Neverland still has a similar concentration of software engineers.
Narnia has an edge in English proficiency, though it is too early to tell how important this
factor will beparticularly if younger engineers are selected.
Neverland has much more productive software engineers with a lower bug rate than
Narnia, but also a much higher cost per engineer. Neverland is slightly less expensive on
a per-output basis ($2.22 per line of code vs. $2.29 per line of code). Nevertheless, 2
software engineers from Narnia will produce about the same amount of code as 1 software
engineer from Neverland, at roughly the same costbut with twice the error rates!
Other considerations not mentioned in the Exhibits, but worth considering and potentially asking about, include
relative regulatory/technology/political advantages or disadvantages from working with either country. For
example, one country may have a much better trade relationship with the U.S.
Your answer could take many forms here. The key is to highlight the relative strengths of each location, and to
justify a choice with sound business judgment. As discussed repeatedly in the interview preparation sections, it
is most important that you are structured, thorough, and articulate in your thought process and
answer/recommendations.
Additional Resources
We hope that you enjoyed and learned a lot from these sample Cases, and encourage you to review them again
as you progress in your practice for Consulting Case Study interviews. We also recommend that you review the
online cases offered by each firm, and some additional sample cases that we have included below. The more
cases you do, the more confident and comfortable you will become at taking on any Case put in front of you.
CONSULTING GUESSTIMATE CASES

The questions in this chapter are representative examples of Guesstimate Cases. In essence, these questions
involve a short case or analysis in which you must try to estimate a value you probably had never considered
estimating before. The key to these types of problems is to break them down into logical pieces, walking the
interviewer through how you are approaching the problem, and then try to determine appropriate assumptions
for the value of key figures in each of those pieces.
Guesstimate cases are generally used as part of a first-round interview to warm a candidate up for a full Business
Situation Case later in the interview process. Guesstimate cases are also used as a way to test quantitative ability,
numerical thinking and judgment, and an to arrive at reasonable assumptions.
With some practice, guesstimate cases are not difficult and once you get accustomed to them, they are actually
quite fun, even though at first they might seem a little scary. Guesstimate cases will also form part of many full
case interviews, so it is important to master them.
Here are some quick examples of Guesstimate Cases so you can get a better sense of what we are dealing with:
Guesstimate Case Study Examples
What is Air Frances weekly revenue for the Paris-to-New York leg?
What volume of beer is sold at an average LA Lakers basketball game?
What is the monthly revenue of your hair salon?
How many school teachers are there in Chicago?
What is the monthly profit of your favorite restaurant?
How many flat screen televisions have been sold in Australia in the past 12 months?
How many iPhones are currently being used in China?
Are there more iPhones in operation in the U.S. or in China?
How many trees are there in New York City?
How many avocados are used to make guacamole per day in Mexico?
What is the Revenue for the smartphone market in India?
Here are a few key points to keep in mind when answering these questions:
There is rarely, if ever, a verifiably correct answer or one way to tackle a Guesstimate
question. The goal is to make reasonable, logical assumptions and if you are wrong on your
assumptions, that is totally fineafter all, some of the figures used to make the estimation are quite
obscure and you do not have access to the data during the interview. The interviewer is aware of that. If
you can logically explain how you arrived at your assumptions, and highlight which of your assumptions
seem the most important to research, youre doing well. (As an example, for the Chicago teachers
question, you might not know the population of Chicago to start withit is about 2.7 million. However,
even if your estimate is 1 million or 10 million, your logic in estimating the correct answer can still be
sound.)
As you progress through the case, round assumption numbers up and down so that the calculations
are less difficult (also use percentages where applicable that are easy to calculate without a calculator). In
the above example, use 3 million even if you know that Chicago had 2.7 million people. Keep the numbers
simple, as the interviewer will be quite impressed if you get a result that is reasonably close to his or her
estimate.
Importantly, as with all cases, be very structured in your approach and write out your numbers
and assumptions in a clear manner. Be sure to clearly label the units and variables. This is also
important if the interviewer follows up with the question What if we changed that assumption? This
question is not an indication that youre bombing the Caseit might simply mean that your initial
assumption was off, or the interviewer might be testing your ability to think flexibly under pressure.
Stay composed, as these cases should not trip you up, especially with sufficient practice. They are all
quite similar after you have done a few practice questions.
Communicate your process and answer succinctly and articulately. Do not be afraid to
acknowledge mistakes during the processit shows maturity and composure.
Virtually all of these questions can be grouped into Top-Down or Bottom-Up (often referred to
as Ground-Up) questions. In some situations, they can even be both.
o
Top-Down Questions: Questions that involve starting with an entire population (in other
words, the top level) and then breaking it down until you arrive at an answer. For example,
consider the question about the number of schoolteachers in Chicago. A simple way to approach
it would be to start with the population of Chicago, then estimate what percentage of the
population is of student age, and then estimate the number of students per class. Using this, you
would arrive at an estimate of the number of school teachers, because at any given time there is
(generally) exactly one teacher per class. To show your ability to be creative and think outside the
box, you could also attempt to account for retired teachers and substitute teachers.
Bottom-Up (Ground-Up) Questions: For these questions, rather than starting from the top
with a high-level figure such as population, the best approach is to start from the bottomsome
low-level statistic, such as Revenue per customer, and build your way up to the answer. For
example, consider the question pertaining to the monthly revenue of a hair salon. In this case,
wed recommend you work out the revenue for a week and then multiply that by four (or if you
are quick at multiplication, 4.3). You could start with an assumption regarding the average price
per client visit, and then estimate weekly volume by assuming the number of chairs in the salon,
the number of hours it is open per week, and the average number of clients chair per hour. To
show your ability to be creative and think outside the box, you could also add revenue for hair
salon products sold. You may also want to break the estimate into male and female clients, as male
clients at hair salons tend to spend less money per visit but also take less time on average.
Step-by-Step Approach to Guesstimate Questions
Step 1: Ask questions if the request is not totally clear. Take a minute or two to decide how to structure
your answerthis is the period in which you determine whether it is Bottom-Up or Top-Down question,
how you will break the question down into pieces, and the assumed values you will use for each of those
pieces. Though you can interact and direct questions to your interviewer, in these cases it is not useful to
ask for help on your assumed values as often his or her guess will be an educated guess, just like your own
guess. (And even if you assumed value is off the mark, it is far less important than being able to structure
and articulate the response, correctly calculate an answer based on the assumed values, and provide
insight for which assumptions youd ideally like to research further.)
Step 2: Mentally double-check the Guesstimated values that you will apply to the pieces of the
calculation you developed in the first step. Note that in Guesstimate Cases, a population figure is very
commonly part of the solution process (whether it be the U.S. population, another countrys population,
a city population, or passengers on an airline). Often you will need to segment this populationin the
Chicago schoolteacher example, we would need to estimate the number of children of student age. Keep
in mind that any population be segmented in a number of ways. In the context of using a Top-Down
approach, the key segments to use typically are:
o
Gender
Age
Geography
Income & assets
Step 3: Perform the calculations to arrive at an answer. Remember to use estimation to make your math
easy. Also, if you find that you are estimating multiple figures to make the math easier, try to balance
rounding up with rounding down. For example, if an answer involves multiplying 44 by 5,300, you
will get a more accurate answer with 50 5,000 = 250,000 (one rounded up, and the other rounded
down) than 40 5,000 = 200,000 (both rounded down). (The exact answer is 233,200). This effect tends
to get larger if you have 3 or more numbers to round, so always be mindful of the degree and direction to
which your estimate might be off due to rounding error.
Step 4: Identify any additional creative elements that could further refine your answer, if relevant. For
example, in the hair salon case, we saw that Revenue might be boosted from the sale of hair care products.
Additionally, you should tell the interviewer which pieces of your estimate seem most vital to research
furtherthose that seem to have the highest degree of sensitivity in determining the correct answer, or
those in which you have the most uncertainty as to whether your estimate was reasonably close. In the
Chicago schoolteacher example, if you had no sense whatsoever of the population of Chicago, you might
indicate that youd like to look up that number and that your answer depends heavily upon the value you
chose for that assumption.
Guesstimate Case Example #1

HOW MANY CUPS OF COFFEE WERE CONSUMED IN THE UNITED STATES IN THE PAST WEEK?
Start by clarifying the question, then identify the variables to apply to this problem.
Number of cups in the past week: This equals number of cups per day 7 (for 7 days per week).
Mention to the interviewer that your assumption treats each day equally, although you would get points
for mentioning that there are likely fewer cups consumed on the weekend, as people are not in the office
and in general might feel less of a need to drink coffee.
Percent of the population that drinks coffee: this would be an educated guess. Assuming 300
million people in the U.S., we could further assume that 20% are children that (we hope) do not drink
coffee. We could also guess that another 20% of the population does not drink coffee at all (perhaps they
prefer tea or other beverages, or just water).
Number of cups per day: here our guess is that of the remaining 60% of people, half drink 2 cups per
day, a quarter drink 4 cups per day, and a quarter drink 1 cup per day. This averages out to 2 0.5 + 4
0.25 + 1 0.25 = 2.25 cups per coffee drinker per day.
Therefore the calculation is:

o
60% 2.25 300,000,000 = 405 million cups each day
405 million cups 7 days per week = 2.84 billion cups per week (you could round it to
approximately 2.8 billion cups)
Note: the interviewer could then ask questions around how many cups are drunk at home or the office versus
bought from a store, or other similar variations. The interviewer might also ask your thoughts on coffee trends
and also how much revenue this would mean, etc.
WHAT WAS THE REVENUE FOR FLAT SCREEN TELEVISIONS SOLD IN AUSTRALIA IN THE PAST 12
MONTHS?
Your first thought might be, Why Australia? I am not applying for the Sydney Office of McKinsey!
Interestingly, more and more questions have a global component as Consulting becomes more global in
nature (for example, advising firms on entering or performance in foreign markets, or working directly
with foreign clients). While you will not be expected to know Australias population, your estimate will
say something about your ability to think and your logic.
Population of Australia: Approximately 23 million people. (Editors note: I once received a Case Study
question involving this figure and my estimate was far too high, but I still did well on the case because
my thought process was transparent and otherwise accurate.)
Assume that the average household is 3 people. It is worth noting that families probably have
more than 3 people, but this is balanced out by people living alone, such as students and young
professionals. Here is a good example of rounding: you can say 8 million households (which is a little
more than 23 million 3).
Assume households replace their televisions every 4 years. The interviewer might say that
seems reasonable or you should try a higher/lower number. You might also note that you believe there
was nothing special about last year in terms of television salesno major product innovations, sluggish
but growing economy, etc.
Assume an average of 1 flat screen television per household. Some households might not have
any, but others may have 2 or even 3.
Therefore, (8 million households) (1 TV per household) (4 years/purchase) = 2 million televisions

purchased in the past year.
Assume an average sale price of $600. Again, the interviewer might say that seems reasonable or
you should try a higher/lower number. He or she may even ask you to break this down into groups,
such as high-end flat screens and smaller flat screens with different average prices. However, $600
seems like a reasonable average across higher-end TVs, which might cost more than $1,000, and smaller
flat screen TVs, which can sell for $200 or even lower.
Therefore, 2 million $600 = $1.2 billion annual Revenue for television sales in Australia.
To show your creativity and business thinking you could have also discussed the market for resold used
televisions and the Revenue that comes from that (this might reduce your estimate of the market size by
reducing the average sale price; if the interviewer insists that the question should only include new
televisions, then keep the average sale price constant but reduce the number of purchasing households
each year).
The interviewer might then ask you a follow-up question, such as discuss your thoughts about trends in
television sales, just to see how you think on the spot.

HOW MANY IPHONES ARE CURRENTLY BEING USED IN CHINA?
Start by clarifying the question. In this case you might want to confirm whether the question is how many
iPhones are in operation, or how many are being used at that this current moment. (The interviewer
would probably explain that he or she means in operation.) Once the question is clarified, identify the
variables to apply to this problem.
Population of China: Approximately 1.4 billion people.
There are several different approaches from this point; one approach is to make assumptions around the
number of people that can afford iPhones rather than considering the number of households.
Based on very basic knowledge of China, even though the country is experiencing extraordinary economic
growth, you might assume that the majority of the population is still very low-income and cannot afford
an iPhone. Thus, you might estimate that 20% of the population could afford an iPhone.
Therefore, the total potential market size is 20% 1.4 billion = 280 million iPhones.
What percent of this total market size is penetrated? There are many competing products that are
cheaper, but perhaps youve read that the Chinese are very brand-focused and that Apple has an
extremely trusted and desirable brand in China. Therefore you estimate that 20% of this segment is
currently using an iPhone.
Using these estimates, 20% 280 million = 56 million iPhones are currently being used in China.
A follow-up question might be something along the lines of Are there are more iPhones in operation in
the U.S. or in China? Well leave you to try and figure that one out yourself.
Another follow-up question might be how you would check the accuracy of your assumptions and
response (in this case, perhaps by reviewing the Apple annual report or telecom industry reports).
Guesstimate Example #4
WHAT IS THE REVENUE OF PEUGEOTS SOLD IN FRANCE PER YEAR?
Population of France: Approximately 60 million people.
Assume an average household is 3 people. This leads to 20 million households (60 million 3).
Assume 20% of households have no car, as they are in urban cities such as Paris or Lyon.
Of the remaining households, assume an average of 1.5 cars per household.
Therefore, there are approximately 80% 1.5 20 million households = 24 million cars in France.
Assuming a replacement rate of every 6 years, there will be (24 6) = 4 million cars replaced per
year.
Of these 4 million, how many are Peugeot brand? You could suggest that the French are quite patriotic,
so perhaps 20% of the 4 million cars purchased each year are Peugeot.
Therefore, you estimate that (20 4 million) = 800,000 Peugeot cars are purchased in France per year.
Of the 800,000, assume 70% are new cars and 30% are used cars.
Assume that the average price is $30,000 for new cars, and used is $10,000 for used
cars (this is assuming similar pricing, currency-adjusted, to that of U.S. cars).
Using these assumptions, (560,000 $30,000) + (240,000 $10,000) = $16.8 Billion + $2.4 Billion =
$19.2 Billion.
Therefore, total Revenue of Peugeot cars sold in France per year is approximately $20 Billion.

WHAT IS THE REVENUE FOR THE BOARD GAME MONOPOLY SOLD IN INDIA PER YEAR?
Start by clarifying the question. In this case, intelligent questions might be:
o
Is there an Indian version of Monopoly? (Interviewer: Yes.)
If yes, how long has it been on the market in India? (Interviewer: The Indian version has been
on the market since 2006. Prior to that, the British version was sold in India.)
From this, perhaps the interviewer might further explain that in India there is a childrens
version and the regular version, and she would like you to estimate the revenue of the
children version, which targets 8-15 year old children.
Once the question is clarified, identify the variables to apply to this problem.
Population of India: Approximately 1.2 billion people.
Percent of population that is aged 8-15 in India: Assume 15%.
Total population of 8-15 year old children: 180 million.
Assumed percent living in areas where the board game is available for sale: 50%
Assumed percent of such children playing board games: 20%
Assumed number of board games purchased per child in this age range per year: 2
A potential question at this point for the interviewer: How popular is Monopoly compared to other
games? (Interviewer: It is gaining a lot of interest and is a popular board game with an estimated 10%
share.)
Average price for Monopoly: Assume Rs 600 (The interviewer will probably provide the number;
otherwise, you might need to estimate based on U.S. prices and dollar-rupee exchange rates)
Using these estimates, the annual Monopoly sales in India are as follows: 180 million 50% 20%
2 10% Rs 600 = Rs 2.16 billion annual Revenue.
Interviewer: If the exchange rate is U.S. $1 to 60 Rupees, how many dollars is that?
2.16 billion 60 = $36 million.
Total Revenue for the childrens version of Monopoly in India per year appears to be approximately
$36 million. Note that because of the large chain of assumptions made, this estimate could be off
significantly; in particular, the estimate is highly sensitive to the percentage breakdown assumptions for
the relevant demographic (percent of 8-15 year olds living where the game is available; percent of those
individuals who play board games; number of board games purchased by those customers annually; etc.)
CONSULTING BRAINTEASERS
Youll probably hear a lot about Brainteaser problems in Consulting interviews, but they rarely actually
appear in consulting interviews these days. Guesstimate Cases and Business Situation Case Studies are
now used in virtually all Case Study interviews for Consulting, while many of the firms have abandoned
Brainteasers altogether. Brainteasers were once used to see how a candidate responds under pressure,
but over time interviewers realize that the full Case Studies are a better guide to both the candidates
ability to respond under pressure and the candidates aptitude for the skill set actually required by
Consultants on the job.
That said, understanding what a brainteaser problem is and going through a few examples is worth
doing, in case you come across one. The creative thinking involved in these problems can also help
foster creativity in other cases.
Brainteasers tend to be short, generally unusual problems where the answer sometimes appears
counter-intuitiveif there is a definitive answer at all. Our key recommendation, if you face a
Brainteaser, is to stay composed and realize that the straightforward ones (which are usually basic
numbers with assumptions) are reasonably easy, while few candidates successfully answer the tricky
problems. (Often the ones who do either get lucky or have heard the case before!) Ultimately, this part
of the interview is rarely a make-or-break situation (provided you do not get flustered); thus you should
try to relax and have fun with the Brainteaser should it come along.
Make a good attempt at an answer, be logical and structured, ask for clues where appropriate, and be
sure to acknowledge any mistakes made in the process and ideas missed.
The following are examples Brainteaser problems that have been around in some format or another
over the years in Consulting interviews.
Brainteaser Example #1
WHAT IS THE RATIO OF THE WEIGHT OF AN ELEPHANT TO THE WEIGHT OF AN

ANT?
Answer: Approximately 1 billion. The average elephant weighs about 3,000 kilograms while the
average ant weighs about 3 milligrams. 3,000 kilograms = 3,000,000 grams = 3,000,000,000
milligrams. You can estimate these values and if you arrive within an order of magnitude youve done
very well.
THERE ARE 12 BLACK SOCKS AND 12 WHITE SOCKS TOGETHER IN A DRAWER.
IT IS DARK, AND YOU CANNOT TELL THEM APART. WHATS THE SMALLEST
NUMBER OF SOCKS YOU NEED TO TAKE OUT WITHOUT LOOKING TO BE SURE
OF HAVING A MATCHING PAIR?
Answer: 3 socks. Assume the first sock is black. The second one could be black, in which case you have
a matching pair. If the second sock is white, the third sock will be either black and match the first sock,
or white and match the second sock.
IS THERE ANYTHING INTERESTING ABOUT THE FOLLOWING SEQUENCE OF
NUMBERS?
8, 11, 5, 4, 9, 1, 7, 6, 10, 3, 12, 2, 0
Answer: The digits are in alphabetical order. (Eight, eleven, five, four, nine, one, seven, six, ten, three,
twelve, two, zero)
YOU ARE DRIVING A BUS AND TRACKING THE NUMBER OF PASSENGERS ON
THE BUS. AT THE FIRST STOP, THE BUS PICKS UP 26 PEOPLE. AT THE SECOND
STOP, 15 OF THOSE PEOPLE GET OFF THE BUS, AND 8 NEW PASSENGERS GET
ON. AT THE THIRD STOP, 2 PASSENGERS GET OFF, AND 11 NEW PASSENGERS
COME ON. AT THE FOURTH STOP, 3 PASSENGERS GET OFF, AND 4 PASSENGERS
GET ON. WHAT IS THE COLOR OF THE BUS DRIVERS EYES?
Answer: The first sentence is the important one: You are driving a bus! (And yes, this question
has actually been used before!)
(By the wayif you are counting, there will be 29 people on the bus after the fourth stop.)
IN A TINY CABIN IN THE WOODS, TWO MEN LAY DEAD. THE CABIN IS NOT
BURNED, BUT THE WOODS AROUND IT BURNED. HOW DID THE MEN DIE?
Answer: It is the cabin of a plane and the plane crashed. This is known as a Lateral Thinking
exercise, and it revolves around your ability to see that the word cabin can mean multiple things.
Do not be dismayed if you do not get this onebut remember to keep your composure!
I AM THE OWNER OF A PET STORE. IF I PUT IN ONE CANARY PER CAGE, I HAVE
ONE BIRD TOO MANY. IF I PUT IN TWO CANARIES PER CAGE, I HAVE ONE CAGE
TOO MANY. HOW MANY CAGES AND CANARIES DO I HAVE?
Answer: Four canaries and three cages. If you put one canary in each cage, you have an extra bird
without a cage. However, if you put two canaries in each cage then you have two canaries in the first
cage, two canaries in the second cage and an extra cage.
Algebraically:
C = number of canaries
L = number of cages
CL=1
L (C 2) = 1
From the first equation:

L=C1
(C 1) (C 2) = 1
2C 2 C = 2
C=4
L=41=3

Introduction To Case Studies

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INTRODUCTION

of Consulting Case Study Training

CONSULTING CASE STUDY 101: AN INTRODUCTION TO FRAMEWORKS

Legal or regulatory barriers (for example, patents or government contracts)

Company product/service qualities, features, attributes

Which distribution channels to use?

Which markets/customers should the Company target?

SWOT (Strengths, Weaknesses, Opportunities, Threats)

Additional Analysis Concepts

COMPOUND ANNUAL GROWTH RATE (CAGR)

Income Statement (Revenue, Expenses, and Profit)

CONSULTING CASE STUDY TYPES

EXAMPLE CASE SITUATIONS

Expand sales force or customer service.

Product Snapshot (Less relevant for New Project cases)

CORE CONCEPTS AND STRUCTURE

Investment Considerations in entering the Merger/Acquisition/JV agreement

CONSULTING BUSINESS SITUATION CASES

How much space is needed for 75 people?

KEY ITEMS TESTED IN CASE

Calculate the build-out costs.

SOW Business Case Example #2

SeaLink, the largest undersea cable provider on the Trans-Atlantic route

Exhibit E: Undersea cable map

INITIAL RESPONSE/KEY ISSUES

Q: What does the % Capacity in use figure represent?

The African mobile market is exploding, i.e., growing at 14% annually.

SeaLinks acquisition strengthens Telca in its core business.

SOW Business Case Example #3

What is the price of these labels?

How many passengers are typically on board a cruise ship?

SOW Business Case Example #5

INITIAL RESPONSE/KEY ISSUES

INITIAL RESPONSE/KEY ISSUES

Thats a big cost difference. Is Neverland worth it?

CONSULTING GUESSTIMATE CASES

What volume of beer is sold at an average LA Lakers basketball game?

What is the monthly revenue of your hair salon?

How many school teachers are there in Chicago?

What is the monthly profit of your favorite restaurant?

How many iPhones are currently being used in China?

Are there more iPhones in operation in the U.S. or in China?

How many trees are there in New York City?

What is the Revenue for the smartphone market in India?

Income & assets

Guesstimate Case Example #1

Therefore the calculation is:

60% 2.25 300,000,000 = 405 million cups each day

Therefore, (8 million households) (1 TV per household) (4 years/purchase) = 2 million televisions

Guesstimate Case Example #3

Population of China: Approximately 1.4 billion people.

Population of France: Approximately 60 million people.

Of the remaining households, assume an average of 1.5 cars per household.

Guesstimate Case Example #5

Is there an Indian version of Monopoly? (Interviewer: Yes.)

Population of India: Approximately 1.2 billion people.

Percent of population that is aged 8-15 in India: Assume 15%.

Total population of 8-15 year old children: 180 million.

Assumed percent of such children playing board games: 20%

2.16 billion 60 = $36 million.

WHAT IS THE RATIO OF THE WEIGHT OF AN ELEPHANT TO THE WEIGHT OF AN

From the first equation:

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