case-interview-practice

What this skill does

# Case Interview Practice

Comprehensive frameworks and methodology for management consulting case interviews, business problem-solving, and structured analytical thinking.

## Case Interview Types

| Type | Description | Common At | Key Skill Tested |
|------|------------|-----------|-----------------|
| **Profitability** | Why are profits declining? How to improve? | All firms | Structured decomposition, math |
| **Market Sizing** | Estimate the size of a market or quantity | All firms | Logical segmentation, math |
| **Market Entry** | Should company X enter market Y? | McKinsey, BCG | Strategic thinking, risk assessment |
| **M&A** | Should company X acquire company Y? | All firms | Valuation, synergy analysis |
| **Pricing** | How should we price product X? | Bain, BCG | Economics, customer segmentation |
| **Operations** | How to improve efficiency/reduce costs? | Deloitte, Accenture | Process analysis, prioritization |
| **Growth Strategy** | How should company X grow revenue? | All firms | Creativity, market analysis |
| **New Product** | Should we launch product X? | McKinsey, BCG | Market analysis, feasibility |

## Framework Toolkit

### Profitability Framework

```
PROFIT = REVENUE - COSTS

REVENUE:
  Revenue = Price x Quantity
  |
  |-- Price
  |   |-- Has pricing changed?
  |   |-- Competitive pricing pressure?
  |   |-- Product mix shift?
  |
  |-- Quantity
      |-- Customer count changed?
      |-- Purchase frequency changed?
      |-- Market size changed?
      |-- Market share changed?

COSTS:
  |-- Fixed Costs
  |   |-- Rent, salaries, depreciation
  |   |-- Have fixed costs increased?
  |   |-- Capacity utilization?
  |
  |-- Variable Costs
      |-- COGS, materials, labor per unit
      |-- Input cost changes?
      |-- Efficiency changes?
      |-- Supplier issues?
```

### 3Cs Framework

```
COMPANY:
  - Core competencies and capabilities
  - Financial position and resources
  - Current product/service portfolio
  - Brand strength and reputation
  - Operational efficiency

CUSTOMERS:
  - Market size and growth
  - Customer segments and needs
  - Purchase behavior and decision factors
  - Price sensitivity
  - Unmet needs and pain points

COMPETITORS:
  - Key players and market shares
  - Competitive advantages/disadvantages
  - Barriers to entry
  - Substitute products
  - Likely competitive response
```

### Porter's Five Forces

| Force | Key Questions | High = |
|-------|--------------|--------|
| **Threat of New Entrants** | Capital requirements? Regulatory barriers? Economies of scale? | Less attractive industry |
| **Bargaining Power of Suppliers** | Few suppliers? Switching costs? Unique inputs? | Squeezed margins |
| **Bargaining Power of Buyers** | Few buyers? Price sensitive? Can integrate backward? | Pricing pressure |
| **Threat of Substitutes** | Available alternatives? Switching costs? Price-performance? | Revenue risk |
| **Competitive Rivalry** | Number of competitors? Industry growth? Differentiation? | Margin pressure |

### 4Ps Marketing Framework

```
PRODUCT:
  - Features, quality, design
  - Brand positioning
  - Product line breadth
  - Differentiation

PRICE:
  - Pricing strategy (premium, penetration, skimming)
  - Price relative to competitors
  - Price elasticity
  - Discounting approach

PLACE (Distribution):
  - Channels (direct, retail, online, wholesale)
  - Geographic coverage
  - Channel conflicts
  - Distribution costs

PROMOTION:
  - Marketing channels and spend
  - Customer acquisition cost
  - Brand awareness
  - Sales force effectiveness
```

### Value Chain Analysis

```
PRIMARY ACTIVITIES:
  Inbound Logistics --> Operations --> Outbound Logistics --> Marketing & Sales --> Service

SUPPORT ACTIVITIES:
  - Firm Infrastructure (management, planning, finance)
  - Human Resource Management (recruiting, training, retention)
  - Technology Development (R&D, process improvement)
  - Procurement (sourcing, vendor management)

ANALYSIS APPROACH:
  1. Map each activity in the chain
  2. Identify cost drivers per activity
  3. Identify value drivers per activity
  4. Compare to competitors
  5. Find optimization opportunities
```

## Structured Approach Methodology

### The CASE Method

```
STEP 1: CLARIFY (1-2 minutes)
  - Restate the problem in your own words
  - Ask clarifying questions
  - Confirm the objective
  - Identify any constraints
  Questions to ask:
    "Just to make sure I understand, the client is..."
    "When you say profitability, do you mean operating profit or net profit?"
    "Is there a specific timeframe we're looking at?"
    "Are there any options that are off the table?"

STEP 2: STRUCTURE (2-3 minutes)
  - Lay out your framework
  - Explain your approach
  - Be MECE (Mutually Exclusive, Collectively Exhaustive)
  - Prioritize branches
  "I'd like to break this problem into three areas..."
  "Let me start with what I think is the highest-impact area..."

STEP 3: ANALYZE (15-20 minutes)
  - Work through each branch
  - Ask for data at each step
  - Do math carefully and out loud
  - Test hypotheses
  - Pivot if a branch is unproductive
  "Based on this data, it seems like... Let me test that by looking at..."

STEP 4: SYNTHESIZE (1-2 minutes)
  - State your recommendation clearly
  - Support with 2-3 key reasons
  - Acknowledge risks
  - Suggest next steps
  "Based on my analysis, I recommend X because of three reasons..."
```

### MECE Principle

```
MUTUALLY EXCLUSIVE:
  - No overlap between categories
  - Each item belongs to exactly one bucket
  - Bad: "Online sales" and "Sales to millennials" (overlap)
  - Good: "Online sales" and "In-store sales" (no overlap)

COLLECTIVELY EXHAUSTIVE:
  - All possibilities are covered
  - Nothing falls through the cracks
  - Bad: "Domestic" and "European" (misses Asia, etc.)
  - Good: "Domestic" and "International"

MECE STRUCTURES:
  - Internal vs External
  - Revenue vs Costs
  - Short-term vs Long-term
  - Qualitative vs Quantitative
  - Supply vs Demand
  - Organic vs Inorganic growth
```

## Market Sizing Techniques

### Top-Down Approach

```
EXAMPLE: Estimate annual revenue of coffee shops in Chicago

Total US population:               330M
Chicago metro population:           9.5M (2.9% of US)
US coffee shop market:              $48B annual
Chicago share (population-weighted): $48B x 2.9% = ~$1.4B

Adjustment factors:
  - Higher urbanization (more coffee shops per capita): +15%
  - Cold weather (more hot beverage consumption): +10%
Adjusted estimate: $1.4B x 1.25 = ~$1.75B
```

### Bottom-Up Approach

```
EXAMPLE: Same question, bottom-up

Number of coffee shops in Chicago:  ~3,000 (estimate)
Average transactions per day:        200
Average ticket size:                 $5.50
Operating days per year:             360

Revenue per shop: 200 x $5.50 x 360 = $396,000
Total market: 3,000 x $396,000 = ~$1.2B

Sanity check: Within range of top-down estimate (~$1.2B vs ~$1.75B)
```

### Analogy-Based Approach

```
EXAMPLE: Estimate number of gas stations in the US

Known: ~280M registered vehicles in the US
Assume: Average vehicle fills up once per week
Weekly fill-ups nationwide: 280M
Average station serves: ~200 fill-ups per day = 1,400/week
Stations needed: 280M / 1,400 = ~200,000

Actual: ~150,000 (reasonable - some stations are larger)
```

## Mental Math Tips

```
ESSENTIAL CALCULATIONS:

Percentages:
  10% of X = X / 10
  5% of X = X / 20
  15% = 10% + 5%
  33% = roughly X / 3
  25% = X / 4

Growth:
  Rule of 72: Years to double = 72 / growth rate
  10% growth for 7 years ≈ doubles

Large numbers:
  Million = 10^6
  Billion = 10^9 (1,000 millions)
  Trillion = 10^12 (1,000 billions)

Quick multiplication:
  X x 1.1 = X + 10% of X
  X x 0.9 = X - 10% of X
  Break complex multiplication: 47 x 8 = 50x8 - 3x8 = 400-24 = 376

COMMON BENCHMARKS:
  US population: ~330M
  US households: ~130M
  Global population: ~8B
  US GDP: ~$28T
  Average US household income: ~$75K
  US life expectancy: ~78 years
```

## Communication Frameworks