Cracking The Case

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Copyright 2012 by Steve Campbell

All rights reserved,
including reproduction in whole or in part in any form.
www.caseinterviewhq.com
Preface
When I applied at the top strategy firms, I quickly learned that many
best-selling books on case interviews are severely lacking. They are
based on interviews with industry insiders instead of intimate personal
experience, focus only on one part of the interview process and do not
prepare you at all for the tough selection process employed by these
firms.
In this book I combine my personal experience gathered on both sides
of the interview table with what Ive learned from successfully coaching
candidates during countless one-on-one and group sessions. It covers
the whole process: from cover letter and resume to the case interview
itself, featuring:
Everything you need to know to write the cover letter that gets you
invited, including templates, examples and expert tips.
The truth on resumes and how they are used, including what you can
do to make sure you stand out.
The two essential consultant skills you need to communicate during
the interview and how to answer any other question they throw at you.
The best way to prepare for the McKinsey PST and other written cases,
including a unique practice PST question.
A complete tutorial on solving guesstimates and how to avoid its
pitfalls, including 3 fully elaborated example questions.
Three frameworks and four golden principles to help you crack the
business case confidently.
Thirty pages with three fully elaborated practice cases including
example frameworks, riddled with tips and best practices.
A solid approach to even to most difficult brainteasers.
This is the book I would have wanted when I started interviewing. It is
the most complete and most up-to-date guide to case interviews around
and is guaranteed to radically improve your interview performance.
That I promise.
Table of contents
Introduction!..........................................................................................................7
Cover Letter! .........................................................................................................9
How they use your cover letter: the 30 second rule!.................................................9
Five ways to make your cover letter stand out!........................................................10
How you should use your cover letter!......................................................................11
How to structure the cover letter!.............................................................................12
Resume!.................................................................................................................15
The truth on resume formatting!..............................................................................15
The format that works!..............................................................................................16
Writing the perfect consulting resume!....................................................................18
Things to avoid in your resume!.................................................................................21
The Interview!......................................................................................................23
Before the interview!..................................................................................................23
The typical interview!.................................................................................................25
The Airport Test!........................................................................................................25
Resume walkthrough!.................................................................................................26
How to best answer interview questions!.................................................................27
The two skills the interviewer will be looking for!..................................................30
All the questions youll get (and answers too!)!.........................................................33
Your questions!...........................................................................................................40
Written Cases!......................................................................................................43
McKinsey Problem Solving Test!...............................................................................43
Other Written Cases!.................................................................................................46
Practice PST Case!..............................................................................................49

Guesstimates!........................................................................................................55
Four Golden Guesstimate Principles!........................................................................55
Guesstimates: Basic Structure!..................................................................................57
How to support your assumptions!...........................................................................58
Refine Assumptions!..................................................................................................60
Guesstimate Pitfalls!...................................................................................................61
Practice Guesstimates!........................................................................................63
London Eye!................................................................................................................63
Hearing Aids!..............................................................................................................66
Romanian Cons!......................................................................................................70
Business Cases!.....................................................................................................73
Four Golden Business Case Principles!.....................................................................73
The Basic Structure of Business Cases.!....................................................................78
Three frameworks with broad application!.............................................................80
Business Case Pitfalls: Data!.......................................................................................85
Business Case Pitfalls: Structure!..............................................................................86
Business Case Variants: Group Cases!......................................................................90
Business Case Variants: Presentation Case!..............................................................91
Practice Cases!.....................................................................................................93
Indian Whisky!............................................................................................................93
Coee shop!...............................................................................................................105
Brazimao!....................................................................................................................112
Brainteasers!.......................................................................................................129
Brainteaser approach!...............................................................................................129
Brainteaser examples!...............................................................................................129
Brainteaser solutions!................................................................................................131
Appendix A:!.......................................................................................................135
Solutions to the PST-practice case!..................................................................135
References!..........................................................................................................137
Acknowledgements!...........................................................................................137
Introduction
This book will guide you from the first line of your cover letter to the
last question you ask at your final case interview. It was written with a
clear goal in mind: getting you through the selection process. To that
end, it follows the standard procedure from start to finish: from cover
letter and resume, to written test and case interview.
While reading this book and going through the selection process
yourself, its important you keep your goal in mind: with sufficient
talent, preparation and maybe a little luck you are to become a
consultant at a top (strategy) consulting firm. The whole process is to
determine whether you have it in you to become successful as a
consultant. At every step, the question will be Is this candidate a good
consultant?. To answer this question, these firms will look at your cover
letter, your resume and use case interviews, selecting only the best at
every step.
They use the case interview for a specific reason: theres no better test
to determine whether you are fit for real-life consulting work. The case
interview is a consulting project in a nutshell: a difficult question, lots of
data, high uncertainty and high pressure. Without preparation, this can
quickly become overwhelming.
The material in the first two chapters is meant to get you to the
interview and revolves about making sure your cover letter and resume
get noticed and do not end up in the reject pile. Chapter three and
onward cover the interview itself: the basic structure, the resume
questions, guesstimates and business cases.
You can practice the techniques with the example questions, in which
you can compare your approach with the candidates. Throughout these
elaborated cases youll find the structure and framework used to solve
the case, including tips on what you should copy from the candidate and
what not.
This book will make sure you have all the tools and necessary
preparation to get an invitation to the interview and confidently ace
every question they throw at you.
Good luck!
Cover Letter
We will start with the first step of the consulting application process: the
cover letter and resume. Both will travel with you through the case
interviews: every interviewer will have a copy of it and ask some
questions on your previous (work) experience or education. But its also
the first thing on which youll be selected. Before you write any of these
two documents, its important to crawl inside the head of the person
that is going to read them and decide whether theyll invite you or not.
So before we start, we will take a look at the selection process used by
these firms.
How they use your cover letter: the 30 second rule

Consulting firms receive hundreds, if not thousands of applications a
month. So once or twice a month, they gather all these cover letters and
resumes and have HR or a junior consultant scan through them. So
imagine this stack of, say 300, applications and the happy consultant
that has been assigned the task of selecting the dozen that make the
cut. Many of these 300 applicants are top performers, having graduated
from excellent schools with great GPAs and impressive extracurriculars.
How can you make sure you are one of the happy few being invited?
First of all, you want to make sure you do not disqualify yourself.
Spelling and grammar should be checked by someone else (because
youll always make a spelling mistake in that very first sentence), the
formatting should not be too fancy, your letter should not be six pages
long (1 page is enough), no pictures of the family dog, etc.
Expert Tip:
You would not believe how often we [at BCG] get applications with
cover letters directed to McKinsey or Bain. We know that people often
apply at all these firms at the same time and probably write them the
same letter, something I would advise against. But even if you do,
please make sure you change the name at the top.
If you are indeed sure you are not about to disqualify yourself, its time
to make sure you stand out. Remember, you are one of 300 applicants
and every application gets about 30 seconds worth of attention. In those
30 seconds, they will read the first paragraph of your cover letter and if
they are not interested, they will skip to your resume to confirm their
feeling that your application is indeed destined for the reject pile.
So you have to make sure you stand out in those first paragraphs of
your letter. If you can catch the attention of the reader he might read
your whole letter and invite you to the interview. In the next section, we
will tell you how to stand out.
Five ways to make your cover letter stand out

Even though the competition is tough, there are plenty of things you can
do to stand out. Below, youll find five tips to get noticed and get the
invite, in no particular order:
1. Dont send mail merge letters
Many books on interviewing compare the cover letter to the weather:
people only talk about it when its bad. Therefore, nobody really spends
time on cover letters and everyone sends a generic mail merge letter to
the firms they apply to. This does not only lead to mistakes (see the
Expert Tip above), but also to a lot of very standard cover letters, along
the lines of:
I send you this letter and my resume because I want to work at Firm X. I
think this will be a great fit because I have qualifications A, B and C
from XYZ experience.
The fact that 90% of applicants send a standard cover letter is not only
boring for the poor soul condemned to screening them all, but an
opportunity for you! Your cover letter should show that you are
interested in the firm and prove that youve done your research (you did,
didnt you?). What is your specific reason for joining this particular firm?
Why? Why are you so sure about that?
2. Think different
The reader is trying to look for why you stand out, so make it easy for
him. Show that you are different from the other candidates:
Different from other candidates that are applying for an associate
position at the New York office, I already know Im a good fit with Firm X
culture because Ive been a summer intern at the Boston office.
Unlike other Social Studies applicants who claim to be analytical, I
developed a mathematical model for my thesis.
Over the top? Maybe, but were trying to make a point: always strive to
differentiate yourself from the other 300 applicants.
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3. Look for a specific fit

Another way to stand out and show that you are sincerely interested in
the job youre applying to is to look for a fit between you and both the
firm and function youre applying for. Especially if you come from a
different industry (IT, banking), youll really need to explain why you
want to switch to consulting.
Its not enough to list your qualifications, just like everyone else: lots of
people are qualified. You need to think one step ahead: why do I (and
my qualifications) fit with the firm and my new role?
4. Awesome comes first
If you did something great, like winning a medal or working at a big
name company, list it in the first sentence or paragraph. As weve said
above: the first paragraph is scanned and if its not interesting, the rest
remains unread. So list those awesome things you did in a spot where it
does get noticed.
Even if it feels awkward to step into the spotlight so directly and not
write a safe (but dreadfully boring) normal introductory paragraph:
remember that this is your chance for more than thirty seconds of
attention. And it might be your only one.
5. Dont be afraid to use referrals
If youve spoken to a consultant during a recruiting event or during a
business course, or you had an interesting conversation over a cup of
coffee: say so. List what you talked about and why that got you
interested in Firm X.
Better yet: you can ask these contacts to recommend you, which often
helps to skip the screening process all together and gets you directly
onto the invite pile.
How you should use your cover letter

Emphasize details
Some books on job interviews negate the importance of a good cover
letter. They believe its all about the resume, and your cover letter is like
the wrapping on a gift. The truth is that your cover letter can be an
important tool in getting the interview, not only to pique the interest of
the reader and persuade him to read your resume, but also to
emphasize details that otherwise might go overlooked.
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When youve got the attention of the reader, the body of the letter is
where you link your qualifications with the firm and show that there is a
fit between the two. Its also the perfect opportunity to flesh out your
resume. Your resume is a dry summary of facts, with little room to
explain interesting details. If you founded an unknown company that
now does $20 million in sales in an industrial niche nobodys ever heard
of, it can easily be buried by the other facts on your resume. Remember,
you only get a short window of attention.
We will tell you how to make these interesting facts stand out on your
resume in the next chapter, but you can use your cover letter to explain
these interesting facts in greater detail. This also makes sure they dont
get overlooked.
Know your weaknesses
This is another way to differentiate you from the other 300 applicants
and shows you did your homework well. If you have a Physics or Math
background, you can emphasize your analytical skills and exemplify it
by writing down how well you examined this or that mathematical
problem.
However, since you have an analytical background, the reader is not
questioning your analytical prowess as it will probably be sufficient for
the job. Hes probably more worried about whether you can handle
yourselves in social situations. In you cover letter, focus on the one or
two activities from your resume that show these social skills (being
coach on the local football team, for example).
The same is true if you have an Arts or Social Studies background: the
reader will probably take your social skills for granted, but will be more
interested in whether you can tackle analytical problems. Highlight
those in your cover letter.
Know what the stereotypes of your background are and help the reader:
show you are different in your resume as well as your cover letter.
How to structure the cover letter

To help you structure the cover letter, an abstract example has been
included below.
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We will now look at each of these sections in a little more detail:

Firm Address/Your Address
This speaks for itself...
Location, Date
Your location and the current date, aligned to the right of the page.
First Paragraph
The most important paragraph, as you understand by now. Here is
where you need to make a difference and grab the interest of the
reader. Differentiate, drop names, list your achievements and convince
the reader why you are the one to be invited for the interview.
Second Paragraph
If you want to elaborate some interesting experiences from your
resume, this is the spot. Additionally, you can link specific competencies
you possess to those that the firm requires with examples to support
you claims.
Third Paragraph
This is the conclusion of your cover letter in which you sum up the most
important conclusions from the rest of the letter (why should they invite
you?), ending with that you are really looking forward to the interview
process. Finish with a next action: the next thing you or the firm you
are applying to should undertake. For example, inviting you to an
interview, contacting you as soon as possible, or waiting to be contacted
by you.
This chapter covered the cover letter, lets move on with that other
document youll send with it: your resume.
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Resume
We know how to write a cover letter that catches the readers attention,
but that is only the beginning: he will quickly move on to your resume
to see whether his interest in you is justified. Can you present your
accomplishments in such a way the reader can identify them at a glance?
Well, the following section will help you do just that.
The truth on resume formatting

Most of us spend a great deal of time on how our resume looks:
typeface, line distance, font size, etc. Formatting is not that important
however. You should not worry so much about how your resume looks,
its the content that you should worry about.
So whats with all the buzz about formatting, it must be important right?
Sure, your resume needs to be legible. If you use a simple to read font
(Helvetica, Lucida, Arial, to name a few) and a decent font size (10-12)
so it can be read comfortably, you are already halfway there. Yes, you
need to know where to put what so the reader can easily identify your
accomplishments (and well get to that shortly). Time spent on worrying
about the typeface can be put to better use (re)writing the important
stuff: the content and how to draw attention to it.
Again: dont try to differentiate through formatting. Which means: no
stupid stuff. No fancy graphs. No pictures. Just dont. Try to imagine the
thoughts of the reader when going through your resume. Will they be:
Cool, awesome graph, this guy is an Excel guru. or rather be: What
the... ? Next!.
Expert Tip:
During my time [as a consultant] Ive screened dozens of cover
letters and resumes. Ive probably seen thousands and never
have I recommended someone because of his creative approach
to formatting. Some tried, and made for a good but awkward
laugh.
Also: no skills resumes, they make the reader feel awkward. Dont know
what a skills resume is? Good, keep it that way.
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The format that works

Enough about what you should not do: how should you structure your
resume for maximum effect? How can you grab the readers attention
and steer it to the accomplishments you are so proud of? Below youll
find the format that works followed by an elaboration of the three main
sections of a good consulting resume.
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Start with education

Unless youre an experienced hire with 10+ years of work experience,
your education will be the first on your resume. List your degrees in
chronological order, with the last awarded degree at the top. Always
include grade point averages (GPA), or else the reader will think youre
hiding them because they are too low (if that is indeed the case, hide
them).
Also include standardized scores, such as SAT, GRE, GMAT, MCAT and
LSAT scores (or your countrys equivalent) as GPAs are difficult to
compare across universities and studies. Always include your math
scores on these tests: high math scores correlate with analytical
thinking which is something the reader will be looking for in your
resume.
Follow up with experience
Following the education section comes the experience section where
you summarize your experiences that are most relevant for the job,
again in chronological order. Only list the most important experiences,
this is not where you write a short autobiographical novel: its a
summary.
Focus on important and relevant achievements, leadership experiences,
job experience at big brand firms or in consultancy, and relevant
extracurriculars. List job experience first and put extracurriculars in the
next section. Later on in this chapter, well go into greater detail on
what is important and how to communicate this effectively.
This is probably the largest section in your resume, but again: focus on
what is important and be concise. Your resume is a short summary of
your life and for most graduates it should be 1, maybe 2 pages max.
Only if you have multiple years of work experience will your resume be
longer than this.
Conclude with personal skills & interests
This short section will provide the reader with some personal details and
gives you the opportunity to flesh out your character. It can also provide
both you and the interviewer with something to chat about during your
case interviews. Again, think about the impression youre trying to leave
behind: the hard-working, reliable, extravert consultant. If you play an
instrument in a band for fifteen years (reliable), ran the New York
marathon (hard working, competitive) or are an avid skydiver
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(interesting!): list them here. If you are addicted to World of Warcraft (no
life) or play an obscure boardgame (no friends): dont list.
Writing the perfect consulting resume

So how do we present all that content about ourselves? Your education
is important and already at the top, with GPAs and standardized test
scores. Not much more to say about that. But what about your
experience?
Remember that your resume is being scanned, and that you have to
make it easy for the reader to spot your achievements. That means you
should not bury them in a story. Or in long lists with job descriptions,
responsibilities and unimpressive other achievements.
Focus
Youll need to focus on key responsibilities and important achievements.
Use bullet points (consultants love them): first list your key
responsibilities in one or two sentences in the first one or two bullets.
Then use one or two bullets to list key achievements. Be concise and to
the point: rewrite every bullet once or twice to make it more to the
point. Dont use words such as a lot, many, very, quickly: be
specific. How many widgets did you sell? With how much did you
increase profits? How many clients gave your service an A rating? If you
worked as a sales team manager at a company that sells windshields,
dont write:
04/97 - 03/99 Sales Team Manager at Company X
As a manager of a sales team at company X which produced
windshields, I managed a medium-sized sales team and did client
negotiations.
First of all: that you were a sales team manager at company X can be
concluded from the job title. Dont repeat it. If company X is a wellknown company, dont repeat what they do: everyone knows. If not, use
the first bullet point to explain what the company does. For example:
Company X is a Detroit-based producer of car windshields with 200
employees and annual revenue of $ 10 million.
I was responsible for a team of 9 account managers and negotiated all
deals above $ 200,000.
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Now, your achievement is specific and to the point. The reader will know
what Company X is all about and what your responsibilities were. It
would be even better to add an achievement in another bullet point, for
example how much windshield sales increased under your management.
Personally responsible for the 100% increase in windshield sales.
The example above is also quantified, a technique which well turn to
now.
Quantify
One good way to make achievements more clear is to quantify. If you
are able to quantify your achievements: do so, if possible using
numbers as they grab attention. Did you double yearly company sales in
your last position? Dont write:
I have achieved an increase of more than double the amount of last
years sales in wind shields.
Be to the point and quantify:
Personally responsible for the 100% increase in windshield sales.
This is much easier to read, isnt it? Numbers grab attention better than
words. You should always try to quantify your achievements and the
same holds true for responsibilities. If we go back to the example of the
sales team manager, we already saw a good example of how it should
be done:
Its crystal clear how many people you managed and what kind of deals
you negotiated at Company X.
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Highlight
We already touched this subject above, where we discussed the format
of your resume. To make it easy for the reader to spot your
achievements, you should not only focus and quantify. You also need to
highlight what is important. You might think this looks stupid: you dont
want to look like an attention-seeking exaggerator. But think again:
what if you dont get invited because nobody saw your achievements
because they werent highlighted and presented properly? What do you
prefer?
But what do you need to highlight? The resume screener is looking for
big names. Both high-end universities and Fortunes 100 companies are
good candidates for highlighting. If youve worked at a small company
but had big name companies as your customers: highlight them. For
example:
I was responsible for a team of 9 account managers and negotiated
deals with Ford, General Motors, and Toyota.
If you dont have these big names to highlight, you can still draw
attention to achievements youre proud of by highlighting them. Dont
highlight everything: try to tactically grab the attention of the reader and
direct his or her attention to those two or three things you are most
proud of.
How to highlight? My personal favorite is by making those highlights
bold. You could also put important achievements higher on your resume
than less important ones, although this breaks the chronological order.
Expert Tip:
One creative way for students with little work experience but
lots of extra-curriculars is to highlight that special achievement
without breaking chronology: list that extra-curricular as work
experience. That way you can move it up to a spot where it
gets more attention than when its hidden in the extracurricular section.
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Things to avoid in your resume

There is a reason why all resumes and cover letters look alike and follow
a standard format: its easy to make mistakes and everyone is scared of
looking like a fool. Because we encourage you to stand out from the rest
and mistakes cannot be prevented (even when following the herd), we
will also list some things you should not do.
Writing in the passive tense
One of the things you shouldnt do is writing in the passive tense. The
passive tense allows you to remove the subject (you!) from an
achievement. Compare:
Active: I increased sales by 20%
Passive: Sales were increased 20% [by me]
You use your resume to sell yourself to the reader, and if you use the
passive tense this becomes progressively harder. For example:
Profits were increased by 150%
Customer happiness was raised by 20%
Revenue increased from $ 10 million to $ 15 million
Someone reading your resume might think: Ok, profits increased while
this guy/gal worked here, but was it because of him? Who accomplished
this profit increase?. Writing in the active tense forces you to claim
your achievement:
Our team increased profits by 150%
I doubled customer happiness
Otherwise, you leave the reader guessing. So dont write in the passive
tense.
Puffing up or using buzzwords
All this work to make your achievements stand out and fine-tune your
resume towards the consulting industry might tempt you to make some
achievements sound more important than they actually are. It can be
tempting to exaggerate some of the achievements on your resume, but
you should always use objective language to describe your
accomplishments and keep the descriptions short.
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Dont forget that these people see thousands of resumes and speak to
hundreds of candidates: they can spot the difference between
exaggerated achievements and real ones. Besides: the last thing you
want is to get busted during the case interview, as this will mean the
end of the interviewing process.
Using buzzwords and industry jargon excessively is also a no-go. Dont
use terms you are not intimately familiar with, since if you fumble using
them, the interviewer will reappraise your whole resume accordingly.
Example:
04/97 - 03/99 Team Manager at Company X
As a Green Belt Lean Manager hosted multiple Six Sigma Kaizen
workshops.
Envisioned MECE TQM plan to do SWOT analysis of the company.
Just dont do it. The next chapter will focus on the next important step
in the interview process: the interview itself. What can you expect? How
to answer those though interview questions? That and more in the
following chapter.
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The Interview
So youve rewritten your cover letter and resume and finally sent your
application to McKinsey, Bain and BCG. Time to relax, right?
Not exactly. If you want that job, now is the time to start preparing the
interview. Heck, even if you havent applied yet: start practicing right
after finishing this book, using the materials supplied in the coming
chapters. Why? Because the majority of applicants does not start
practicing until after they have received the invite for the first round of
interviews, which might take place within a week or so. This leaves them
with only a few days to prepare.
A few days of fully devoted practice might be enough to pass the first
round, maybe even the second. But I want you to sit there relaxed, with
a professional look in your eyes that gives both you and the interviewer
the confidence that you will ace the interview and make a perfect
addition to the team. The only way to attain that is preparation, so lets
start.
Before the interview

Its clich, but you only have one chance to make a good first
impression. So before you go to the interview, make sure you are
perfectly able to make one.
Expert Tip:
Try to imagine yourself as a consultant during a client
meeting. Imagine how a consultant would present himself to
that client. Is he going to wear jeans and sport shoes? No. Is he
wearing a suit and looking well-groomed? Yes.
Grooming
It might be obvious following the Expert Tip above, but when you have
your interviews, make sure you are well-groomed. Shower, brush your
teeth, shave, polish your shoes, comb your hair, iron your shirt, cut your
fingernails.
Not looking well-groomed is communicating that you are a lazy person
that does not take the job interview seriously. Why would an interviewer
want to hire such a person?
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Dress code
So, what are you wearing to make that perfect first impression? An
interview in the consulting industry means wearing business attire. This
means a suit and tie for men, no exceptions. Women are more flexible
in this regard, but lets first start with what men should wear:
Men
When it comes to clothing, men have it easier: the options are more
limited and if you play it safe then its difficult to screw up your outfit.
Lets take a look:
Suit: Darker colors, but not black. Dark blue and dark grey are safe
choices. No fancy stuff, a small pinstripe is allowed. Choose wool,
synthetics look cheap and feel uncomfortable.
Shirt: White is the safest option, light blue is also great. Again, no fancy
stuff. Stripes are possible, but be careful with your shirt/tie
combination. If you prefer double cuffs, dont wear your Mickey Mouse
cufflinks.
Tie: One stripe maximum. If youre wearing a suit and shirt with plain
colors, the tie can be a little more colorful. Watch out when combining
striped shirts with pin stripe suits and patterned ties.
Shoes: Brushed, black, leather, traditional model. Brown is also an
option, but officially its all black. Steer away from those fancy models,
and wear black socks in them.
Women
More variation, and thus more difficult than men. Especially for the
interview, you should go for safer options. You can still wear that special
blouse if you get the job and get a feel for what other women wear at
the office.
Top: A dark blazer, blue, gray or black. A shirt and top underneath.
Maybe you feel a white shirt is too plain, but its a safe bet. Other safe
colors include light blue and a soft pink. Wear a tank top under it, so
nobody sees what they shouldnt see.
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Skirt/Trousers: You can choose to wear a pencil skirt, but make sure
they are not too tight and that you can sit comfortably in them.
Otherwise wear dark trousers.
Shoes: The interview is not the time nor the place to wear those killer
heels, but that doesnt mean you cant wear any. Try to balance
professionalism with attractiveness, not just with your shoes but in your
whole outfit.
The typical interview

Basically the interview will take about an hour and look like this:
5
5-10
minutes of introduction.
minutes of resume questions.
30-40 minutes for the business case.

5-10 minutes for you to ask questions.
We will deal with case questions in the next section, here well focus on
the first and last ten to fifteen minutes of the interview. Even though
many candidates think the case is most important (and its true that
cracking the case is essential), the minutes before and after the case
are equally important.
Why? Consulting is people business. Yes, a client hires consultants to
tackle a difficult problem and you need the brainpower to be able to
crack these problems and come up with solutions. But the actual
analysis is just a small fraction of the day to day activities of a
consultant. Most of your time will be spend with the client: gathering
data during interviews, talking to executives, presenting your findings.
The case is to test your analytical abilities, but your social skills are
equally important. Can you cope with resistance? Can you lead a team?
Do people enjoy working with you? Assuming you answered the
previous questions with yes, we will now continue on how you can
show these skills to the interviewer.
The Airport Test

To see wether you are a nice person to work with, youll have to pass
the airport test. The name of this test is derived from the hypothetical
situation in which you and the interviewer are stuck on an airport during
bad weather, while traveling to or from the client. Is it fun to spend two
hours with you waiting on the next flight, or are you such a bore that
25
these two hours cost your colleague more energy than a full day of
spreadsheet analysis?
During your interview, you should keep in mind that your social skills
are also constantly tested. There is no faking a great personality, but
being aware, calm and prepared helps a lot to make a great impression.
Try to be friendly and smile, even though youre stressed because of the
interview. Try to look at the interview not as a test, but as a
conversation between two educated people trying to solve a case and
get to know each other. Try not to let the stress of the interview harm
your enthusiasm for solving cases or your mood in general, just take it
easy.
Through practice you can master the case interview, which relieves you
of some stress and it can give you the necessary self-confidence during
the interview. An interview will always be exciting, but we are to make
sure that this excitement is positive (enthusiasm) instead of negative
(stress).
Resume walkthrough
After the introduction, the interviewer will first ask you some quick
questions about your resume. Anything on it is fair game, so expect to
answer questions on any item, being work experience, education or your
interests. Make sure you prepare little narratives for each, in which you
explain what your achievements are and how you achieved them.
Try to focus these narratives around the three to five of your positive
characteristics/achievements you want to convey. So if you want to show
you have experience in the industry or showcase a great teamwork
achievement, than bend your answer towards those achievements.
Does this sound odd to you? Compare the job interview to a normal
interview and picture in your mind a politician answering questions from
an interviewer. Politicians are professional question benders: if an
interviewer asks them about XZY, they give a quick answer on XYZ and
then continue stating that they (or their party) also supports ABC
because of blabla. For example:
Interviewer: Sir, do you think building this dam will be bad for the
wildlife in the area?
26
Politician: Independent research has shown that this is not the case,
while the construction of the dam not only creates hundreds of jobs but
also reduces the US dependence on Saudi oil.
Interviewer: Are you implying we are too oil-dependent?
See how you the question about wildlife gets bended into a potential
discussion about job creation or the US energy dependence? Interviewer
and interviewee dance around each others questions and answers.
During your interview, you will need to do the same.
The interview is a stage, in which you are given the possibility to present
three to five striking details about yourself. For example: your
enthusiasm for consulting, your extraordinary leadership experience
and your persistence. Thus, you try to bend every question towards an
answer that incorporates one of the above:
Interviewer: Tell me about a time you worked in a team
You: Well, together with a team I organized event X and I had to do Y.
The odds were against me, but even through initial failure I persisted
and completed the task, achieving Z.
It might be difficult (and even feel a little awkward) at first to do this,
and you should practice answering these kind of interview questions (a
list of typical questions and possible answers is provided at the end of
this chapter). Dont be afraid that the interviewer will react negatively if
you bend the question: he has been there before and will be glad that
you understand the interview dance. But try not to dance the foxtrot
during a waltz: you cant force it.
How to best answer interview questions

By now, you have probably defined what you want to tell the interviewer.
But before you start creating little narratives for your resume and the
three to five striking details you want to highlight, lets first elaborate
on how and start off with an example.
For example, one of the bullets in your resume might be:
Decreased cost by $ 10 million.
27
If asked to explain this bullet, a candidate can answer this question by

saying: We decreased cost by doing A, B and C. Interviewers hate the
word we, as it is not what they are interested in, they are interested in
you! What was it that you did to decrease cost by $ 10 million? What was
your role in the team? Were you on the front lines firing co-workers and
taking the heat? Or were you just the administrative person that made
sure everyone kept their schedule?
The interviewer is interested in that differentiation, and we simply does
not cover that. Below, well introduce a method to answer these kinds of
questions: the STAR method. The STAR method is an easy way to show
what your role was and is an acronym for Situation, Task, Action, Result.
As with your resume, your answers about it should be specific and
concise, so try no to ramble. Prevent rambling by preparation and use
the STAR method to prepare your narratives so they highlight your role
in the story. Well walk you through each step below, with two example
answers on the following question, typical for consulting interviews:
Tell me about a time you exhibited leadership
The STAR method:

Situation
What was happening, what were you doing, what were the events
leading up to the situation? And even better: what would have gone
wrong if nothing happened? Remember: be specific! Example:
In February 2009 we started preparations for a career fair to
be held in November of that year, but my team-members were
slacking off while we needed decisions to be made on location
and the exact date. With these things unclear we could not
start approaching companies, who might settle for other fairs if
we did not pre-empt them.
At my previous employer, I was a coder working at a small

software firm in a team of five. We were working on a new
product, which was set to become the new bestseller: a lot of
marketing and PR was already building up towards the launch
date in six months, when our manager got ill.
28
Task
What were your tasks? What was your goal? What were your
responsibilities? Example:
As one of the account managers on the team, it was my task

to approach companies and make sure as many of them as
possible attended the fair.
Our goal was to finish the product on time, since missing the
deadline would cause serious damage to the companys profits
and brand name.
Action
What did you do? Which action did you take? What were your
contributions? Describe them concisely and make sure to keep it
focused on you: use I and dont use We.
I took the initiative and asked three candidate locations to

send a quotation and called a meeting with the team to visit
these three locations together. Having visited the locations, we
quickly picked a date based on the availability and our
preference of the locations.
Knowing how much I enjoyed having responsibility as

president of the Bimonthly, our universitys student newspaper,
I volunteered to temporarily stand in. I found out we were
already behind schedule and asked management for permission
and funds to plan multiple late night shifts.
Result
What happened? What did you accomplish? What did you learn? Try to
list multiple positive outcomes and make them as tangible as possible,
for example by quantifying them. With negative outcomes you should
29
focus on what youve learned and how you dealt with failure, but this is
a lot trickier than with positive outcomes, so try to avoid them.
Since there was no more delay, I and the two other account
managers could go to work. Not only were we able to attract
30% more companies than the year before, visiting the
locations together increased team spirit and got everyone more
involved in the organization.
The product was seen as a great success, even though the

extra costs of night shifts pushed us 3% over budget we
completed the product in time for launch. A delay would have
been far more costly, both financially and considering the bad
PR. The case is now used as an example on crisis management
during company training and I was promoted to team leader as
a result.
The STAR-method is one of the easiest ways to tell the interviewer

exactly what you want: that you are the best new hire. You should have
a list of five STAR-stories you want to tell, about characteristics or
achievements you want to get across, focusing on the two skills
consultants find important Leadership and Personal Impact (see below
for an elaboration). Try to bend other questions towards one of these
five stories. But before you start writing, read the next section on which
skills are important, and why.
The two skills the interviewer will be looking for

Now you know how to answer questions, but which questions should
you expect? Crawl into the interviewers head: what does he or she want
to know? The interviewer is trying to determine whether you have the
skills necessary to succeed in consulting and will ask questions to find
that out. Ill go through some of the most frequently used ones in detail,
including example answers. At the end, youll find a complete list of
potential questions which you can use to prepare for the interview.
But know that there are two specific skills consultants are looking for
when they ask these questions, and you should focus on covering these
characteristics. We will use the terms used by McKinsey:
Leadership
30
Personal Impact
I can hear you think: So, thats it?. Well, yes actually. Consulting is the
interesting combination of business analysis on one hand, and people
skills on the other. The business case is there to test your analytical
abilities, but people skills are also extremely important, and often
underestimated.
As a consultant, you will often work with a client facing a crisis and
there is no way youll be able to convince the client of your solution
without people skills. Or get the much-needed statistical data from a
reluctant administrative worker whos job is on the line. To succeed as a
consultant, you need people skills and two in particular: leadership and
personal impact.
Leadership
There must be dozens of books on leadership and its definition, but
leadership in this case comes down to the following:
Getting a group of people who disagree on an idea to agree enough to
make them execute it successfully.
What does that mean? As a consultant, youll often find yourself between
people with 30+ years of experience in an industry while you just
started on this project last week. Your analysis showed that they should
run their business completely different, how are you going to tell them
and convince these veterans of the necessity of a new business model?
With every candidate that sits down in front of him, the interviewer is
asking himself: can I trust this candidate in these kinds of situations and
does he have the experience to show for it? Experience with these kinds
of situations (and their successful resolution) are what the interviewer is
looking for and this experience can come from anywhere: work
experience, extracurriculars, volunteering, etc.
Personal Impact
Where leadership is more concerned with setting direction and
successfully bringing people to follow it, personal impact revolves about
empathy, conflict resolution and political skills.
Lets first focus on empathy and conflict resolution. Clients are often in
a crisis, or they wouldnt have hired you. But that often means people
31
are afraid to lose their jobs, are trying to shield their team, division or
business unit from job or budget cuts and are generally resistant
against change and the agents of change: you. This means you need to
be able to handle situations in which you face considerable resistance
and emotional reactions.
Pointing to the rational facts (Stop protesting, youre wrong! Heres the
analysis that proves it!) will often make things worse. Being able to
handle these situations requires empathy and understanding, which is
what the interviewer will be looking for in the interview. So tell him or
her about a situation in which you did! But what about political skills?
Since youll be working with a new client team every project and every
company/division is different, youll need to be able to grasp the
political situation quickly. Since most politics happen beneath the
surface, you need to have a gut feeling about who decides what (which
often differs from the official power structure) and intuitively grasp how
people will respond to certain changes. You might have worked hard on
a perfect analysis and wonderful solution, but if you submit them to the
wrong manager hell put the recommendations in his desk and youll
never hear from him again.
Personal impact is about knowing how to make the most impact and
successfully implement changes. Its about dealing with people, showing
empathy and understanding, and knowing how to resolve conflict.
Leadership and Personal Impact Questions

Since these skills are so important for consulting, it is no surprise that
interviewers are looking for candidates with the requisite skills. Possible
questions probing these two skills include:
"Could you give an example of a problem that you faced with your
team and how have you done it?"
Could you give an example of a group situation where the group was
deeply divided and how you resolved it?"
"Please give an example of a time you needed to convince a group of
people to change their opinion and take action different than the one
they intended to and tell me how you accomplished this?"
32
"Please tell me about a time you led a group that was in disarray but
still needed to get something important done and how you dealt with
it.
Could you tell me about a time you faced a group with bad morale
that still needed to be effective and how you fixed this?"
I think you get the point. Use a story of your own experience in STARformat to answer one of these questions. Try to cover both your
leadership and personal impact skills in the answer. These type of
questions should always be expected, since these skills are so crucial
for consulting.
All the questions youll get (and answers too!)

There are some other frequently used questions, and well explore them
below. We know that there are two crucial consulting skills which
interviewers are looking for in candidates and you should devote at least
one STAR-story specifically to them (you wont regret preparing them,
rest assured). But theres one more thing to keep in mind, and you
might want to devote a narrative to it as well: differentiation.
Differentiation
Interviewers rely on stereotypes. When the interviewer scans your
resume and sees you have a PhD in Mathematics, he will assume that
your analytical skills are sufficient. But hell be wondering how your
people skills are. When you majored in Psychology or Arts, the
interviewer will be interested in your leadership and personal impact,
but hell be especially interested in your analytical prowess. You can
expect questions from the interviewer with which he will try to confirm
his hypothesis about your specific stereotype. Even if he doesnt directly
ask it, hell assume it (un)consciously.
It pays off to break the stereotype, as this will make you a more wellrounded consultant, which is exactly what theyre looking for. So if you
have a background in Science, prepare a STAR-story about a great
teamwork experience and if you have a background in Sociology,
prepare something about that quantitative spreadsheet analysis you did
on the difference between the population of two countries. The
interviewer is following a mental checklist, so help him tick off those
possible problem areas.
33
We have now covered about 70% of the types of questions youll get
during the interview and will now move on to the more general type of
questions. Remember that you can always try to bend these questions
into one of your prepared STAR-narratives: you dont want to walk away
from the interviewing regretting you were not able to tell them.
Tell me about yourself
Dont make the classic mistake of telling the interviewer where you were
born and where you went to college. Its not wrong per se, but you risk
going into personal details (could be awkward) and more importantly:
you lose the opportunity to present yourself well.
So what should you do? Try to stand out, be different! At the end of the
day, all interviewers meet to discuss the candidates. If nobody
remembers you, your candidacy is over. But if you told them about the
paragliding-business you set up as a student, everybody remembers you
as the paraglider. You could also use it to tell about one of the
qualities the interviewer is looking for (leadership, personal impact or
differentiation) or tell one of your other STAR-stories.
Below, youll find a differentiation example answer:
Im a History Major with a minor in Economics, I love sports
and I am an active long distance runner who also owns an
active blog on running, with 5000 unique visitors per month.
Because of my experience with my own website I picked up a
little programming which came in handy when I wrote my
thesis: I evaluated Napoleons tactics during the battle of
Waterloo with a computer simulation.
Why consulting?
Why would the interviewer ask this? Well, because these firms spend a
lot of valuable time and resources on recruitment and training of first
year consultants. If you cant convince them that you are passionate
about the consulting lifestyle and can keep up with the long working
hours and travel, why should they waste any more time and resources
on you?
To help you answer this question:
34
The most popular reasons to choose for consulting:

- The people youll work with are intelligent and hard-working.
- Youll gain a vast array of business skills and expertise.
- Youll see multiple companies in different industries.
- Work is project based.
- The learning never ends.
- You get the chance to impact Fortune 500 companies.
- Youll get the chance to meet business leaders.
- You get the chance to travel and work abroad.
- It looks great on your resume.
Why firm X?
Even though most consulting firms do practically the same thing, there
are subtle differences. They have different areas of expertise, a different
focus (for example: McKinsey: Leadership, BCG: Self-development, Bain:
Team-building), office sizes, growth rates, opportunities, etc.
Even if you dont really care whether you end up at BCG or at Bain, you
should be prepared to defend your choice (hopefully, youll get offers
from both and get to pick). You could refer to specific people you spoke
or recruiting events you attended, for example:
Since a company presentation in my second year, Ive always

been interested in the strategic consulting practice and Firm X
in particular. I attended your Masterclass Strategy last year and
was impressed by the enthusiasm and friendliness of Firm X
employees and the work hard, play hard atmosphere. And since
Im always looking for ways to improve myself I really like the
companys focus on employee development.
Which firms are you interviewing with?

Competition is tough and it would be foolish to bet on only one horse.
Dont make it a secret that youre interviewing with other firms: most
consultants did the same. Most will advise you to interview with other
firms before applying at your dream firm. More case interviews = more
practice and secondly, knowing that other firms also considered you
good enough to invite you could make you hard to get.
35
However, you should be prepared to explain why you choose this firm in
particular (see the question above). Also, we would advise against
mentioning any interviews in other sectors, as this might lead the
interviewer to conclude youre not passionate for consulting. The only
exception here might be the (investment) banking industry: the biggest
competitor for McKinsey when it comes to hiring is not BCG but
Goldman Sachs.
Tell me about a recent setback youve had to deal with.
Or: tell me about a time youve failed at something, or any other variant
of the failure question. As a consultant, youll get your fair share of
(un)deserved failure. This question is to determine whether you can
cope with failure and whether you are able to learn from it. So give them
a recent example of something you tried and failed at, and what you
have learned from it. Or preferably, something in which you persevered
even though you failed and which you ultimately brought to a good end.
Dont say I never fail or something along that line: everybody fails.
Other no-gos: academic failure and personal failure, such as recent
break-ups, family feuds and other things that might make the
interviewer uncomfortable. An example:
During my first year at college I had a part-time job at a

computer repair shop. I was getting good reviews and was
always able to fix any problem, but kept scoring low on client
friendliness. Getting it up would make me the best performing
employee and would get me a raise, so I asked my colleagues
where I could improve and started to buy some self-help books.
Because I knew I often looked grumpy even if I wasnt, and I
forced myself to be friendlier and smile more often. Slowly but
steadily, my ratings started to improve and after two months I
was made employee of the month!
What achievement are you most proud of?

Or: what are your strengths? Or: tell me something about your biggest
achievement? This question is a free opportunity for you to talk about
one of your STAR-stories that youve prepared, without the need to
really bend the question. If the leadership and personal impact
questions havent been asked yet or you feel you should showcase them
36
a little more in the interview: do so now. If not, tell a STAR that will
make them remember you: such as that time you ran the New York
marathon for charity, or something like that.
Tell me about something you struggle with
Or: What is your greatest weakness? A standard interview question, with
which you can do two things:
1. Tell about a minor weakness not relevant for the job.
Difficult for consulting, since so much is relevant. You need to be a
teamplayer, need to be able to work on your own, need analytical skills,
need to be able to work with numbers. Some examples:
1. Quickly bored
Im the kind of person that doesnt like getting stuck at a
normal job because I usually get bored of jobs when doing
them for longer than one year. Thats exactly why I like
consulting, since you switch from project to project, often
doing something completely different at different firms in
different industries.
2. Practical Skills
I dont know why, but I just cant cook. Since leaving home,
Ive been trying to learn how to cook, buying cook books and
even following a cooking workshop. I can bake an omelette
and prepare mac and cheese, but thats about it...
3. Experience
As a PhD student, Ive spent most of time running
experiments and analyzing data. Im comfortable with
numbers, but I lack working experience and specific industry
knowledge. Because I wanted to build both quickly and like
the international opportunities, Ive opted for consulting
2. Bend a weakness into a strength.

Dont say you are a perfectionist and that you do everything well, but
get lost in the details sometimes. It gets old real quick. Instead, think a
37
little harder to come up with something original and explain what you
are doing to compensate for that weakness. Some examples:
1. Self-Projection
I demand a lot from myself at work and can be pretty hard
on myself. I tend to expect my team to live up to my own
standards, which has led to arguments in the past. Nowadays I
tend to respect individual differences more, knowing that
everyone brings something different to the team, while still
trying to be a good example myself.
2. Assuming Leadership
When working in a team, I often end up assuming the
leadership role. This happens automatically, though I know it
can lead to conflict when theres a designated leader. I try to
be more conscious about my role in such situations nowadays,
being a little more careful when taking up responsibilities.
Would you say you are creative?

Since the client relies on you to come up with creative solutions to their
problem, consultants look for creative people. This is also the reason
why consultants hire people from different backgrounds, as long as the
candidate is smart enough: diversity increases creativity. Even though
the business case is also a measure of creativity, you can expect a direct
question.
As always, dont just say yes but back your answer up with a creative
project youve initiated or a creative idea you came up with during your
PhD-writing and that pioneering article youve written. Also mention how
it benefited the team or the organization, if possible. If you really cant
come up with something, you might tell that instead of being creative
yourself, you try to foster creativity in your team, by actively initiating
brainstorming sessions or running workshops.
What are you passionate about?
Consulting is a high-energy lifestyle, and very demanding on your
personal life. The rewards are great, but the sacrifices as well. Without
passion and enthusiasm, you will not have enough energy to maintain
38
this lifestyle, which is why candidates are rejected because of lack of

enthusiasm.
So how to convince the interviewer of your enthusiasm? And how to
determine your passion? The latter is a difficult and very personal
questions that is beyond the scope of this book, but here are some
pointers to an answer on the former:
Impact
(Strategic) Consulting is often work with high impact: you change
organizations and their course. This could impact the lives of hundreds
or thousands of employees and their communities and the
organizational changes proposed by you could headline the news.
Consulting is about making a difference, and you could very well be
motivated by that.
Challenge
Another way to describe consulting is problem solving. You are often
hired to solve the clients most difficult problems, either because they
require thorough analysis or because the solution will face a lot of
resistance, or both. And every 6 to 8 weeks, you will face a new problem
on a new project.
Self-Development
The continuously changing projects, combined with regular training and
MBA-sponsorships give the consulting job a steep learning curve. You
could be thrilled by all these learning opportunities, which differentiate
consulting from other jobs.
The most important thing however is to be genuine. Theres no faking
real enthusiasm or true passion. So give this question some thought of
your own and devise your own personal reply. What makes your eyes
and face light up if you talk about? What really gets you going? Thats
the kind of passion the interviewer will be looking for.
What makes you the right candidate
So, why should we hire you? Another typical interview question and
another opportunity to shine with one (or a combination) of your STARstories. Try to link three to four job requirements to your characteristics
and skills and explain why you want to work at this particular firm.
39
I know that consulting requires both soft skills as well as

analytical strength. My three years in the GE management
development program have enhanced my leadership and
teamwork skills and I hope my background in Physics shows
that I have the required analytical skills. Im a naturally
curious, but critical thinker and Im always looking to learn
more and develop my skills: I applied for BCG especially
because of the firms focus on self-development. I also
persevere where others give up, so I think Im a very strong
candidate.
Your questions
Case interviews often end with some time for you to ask questions, so
use them to get to know the interviewer or the firm a little better and
leave a final good impression before the interview ends. One way a good
candidate differentiates himself from the rest is through preparation
and the final questions are no exception. So read up on the firm, think
about what you would like to know.
Dont ask questions recruiters can answer
When will I hear whether Im selected or not? Do you have offices in XYZ
area? How many consultants work in this office?
These questions not only are boring, some might also show you did not
do your homework on the firm. So dont ask these questions, or ask a
recruiter.
Dont ask about work-life balance
Why not? First of all: you know what youre getting into, so dont ask.
Second: its a question everybody asks, not differentiating you from the
other applicants. Third: asking this can have the interviewer doubt
whether you are fit for consulting: if youre worried about losing worklife balance, go find another job.
So instead of asking questions about the interviewers personal life, you
should focus on his or her professional achievements. They love
consulting (otherwise they wouldnt be doing it) and dont mind giving
advice or any questions about things they did. Such as:
40
Im really interested in private equity*, could you tell me more about what Firm
X does in this area?
What is the most interesting project youve done?
What is the most difficult client situation you have faced?
Could you tell me something great about your colleagues?
What do you think is the most common mistake made by first year consultants?
Would you advise doing an MBA? Did you?
*: can be replaced with any other area of expertise, industry or country.
Weve covered both the first and last minutes of the case interview, so
lets move on to the core: the business case.
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42
Written Cases
Before we get to the live cases however, we will first treat written cases
since they often precede live cases. Written cases are a recent
development in the management consulting industry: McKinsey started
using them a few years ago to efficiently assess whether a candidate
should be invited to live cases or not. Instead of wasting precious hours
with hopeless candidates, they started using a written test called the
McKinsey Problem Solving Test (PST).
Inspired by the PST, other consulting firms now also feature paper tests
and we will take a look at them as well. At the end of this chapter, you
will find a practice question to get a feel for what you can expect.
McKinsey Problem Solving Test

Basically, the PST is a case interview on paper, with multiple-choice
answers. Though it features some quantitative questions (no calculator
allowed), it is designed to be solvable by both Physics and Art majors.
To increase your stress levels, theres also a strict time limit: youll only
get 60 minutes to solve all 25 questions, which is a very short time
considering the amount of text and charts thrown at you. Which is very
much like a real case interview.
Basic PST Structure
The PST consists of 25 - 30 questions, divided into four to six minicases. Every mini-case has an introduction, in which the company
(anything from a fish restaurant to a personal electronics manufacturer)
and its problems are introduced. Often with some numerical
information and possibly with a quote from the CEO or director.
The introduction is followed by the first series of questions, after which
a new piece of information (a chart, a new problem) is introduced. This
new information is then followed by another set of questions and then
its on to the next mini-case.
Below, well share the essential tips on what you should do before and
during the PST.
Before the PST
If you know you are going to apply to McKinsey, start practicing now.
Dont wait for that invitation, because then youll only have a few days
43
to prepare for both the PST and any other interview rounds. Practicing
the PST is difficult however, since there is so little information to be
found online. To help you, we included practice PST-style question in
this book, and you can use the practice case found on the McKinsey
website as well.
Math
Since you are not allowed to bring a calculator, you have to do every
calculation in your head. If you are like most of us, the last time you
calculated 17 x 55 in your head is approximately 10 years ago, so its
time to dust off those math skills. Calculating in your head is a skill, so
you can actively improve it: it just takes time. But it is time well spent,
since math is also an important part of the next hurdle in the selection
process: the case interview.
There are plenty of ways to train math. There are countless smartphone
apps, websites and computer programs that you can use to practice.
You should focus on a few key areas:
Percentages
Double digit multiplication (for example, 24 x 14)
Large numbers with a lot of zeroes
Though exact math is very important during live cases, the questions in
the PST will typically require the (estimation) of percentages and large
numbers. Focus on training calculation with large numbers: you are
bound to forget a zero somewhere.
Business Mindset
This might sound strange for all Finance/Economics/Business people,
but some studies are a better preparation for consulting than others. If
you dont have a business background, it can help in your preparation
to read up on business problems by reading magazines and websites
such as The Economist, BusinessWeek and BusinessInsider.
You then get a little more attuned to the concepts and terminology used
in the consulting world. You then recognize more automatically that
Profit = Revenue - Cost, with
Revenue = Quantity of Goods Sold x Price.
That cost can be split up in fixed and variable cost and that you dont
waste time thinking about what depreciation exactly meant.
44
Dont fret, however: the PST is designed to be made by everyone and

features a cut-off score, not a bell-curve. You are only competing against
yourselves and thus theres only one thing you can do: your best.
During the PST

As you can see, there is very little you can do to practice the PST.
However, there are still some things you should can do during the PST
to improve your score and save some time. Since there are only 26
questions, one wrong answer could make a difference.
Read carefully
The single most important thing youll have to do is to read carefully.
But youre also on a strict time limit, so I propose two possible
strategies:
I.
Skim and underline
When youre reading the introduction or any piece of data: quickly scan
through it while underlining or circling important facts, such as what the
revenues currently are and what the goals of the client are. You then
move on to the questions and use the underlined facts as visual anchor
points to quickly find the answer.
II. Read the question first
Not everything is relevant and the PST will drown you in data if you try
to understand all the information and every chart and graph completely.
You could therefore read the questions first and then start to read the
data or start interpreting the charts, with the questions in the back of
your mind.
We prefer the first method, though you should not get stuck trying to
interpret a chart that in the end is not relevant. Always read the question
and every multiple choice answer carefully. The goal is to select the best
answer: which means that multiple answers may be right, but one is
better than the others. Subtle phrasing differences could set you off on
the wrong foot, so dont answer the question until you understand it.
Not everything is relevant
We already mentioned it above, but since it is so important we will
repeat it here: not everything is relevant. You dont need to fully
understand every chart in order to answer the questions. Focus on the
45
bits and pieces of information necessary to answer the question

successfully.
Consultants are buried in mountains of company data on a daily basis.
Paying attention only to what is important is a necessary skill, tested by
the PST. In the last version of the PST, there was actually a chart
included that was not used in any question at all, just there to distract
you. So pay attention to what is relevant and what is not!
Eliminate
A typical multiple-choice strategy: the elimination of plain wrong
answers. Usually, you can eliminate one or even two wrong answers,
increasing the chance on a right answer if you need to guess (there is
only one best answer per question).
Estimate
Its not always required to calculate the precise answer to a question, so
you can often get away with estimation. If only one of the multiple
choice answers is in the range you estimated, then you can safely select
that answer as the right one. No need to calculate the exact number and
waste your precious time.
Fill in all answers
Any unanswered questions are counted as wrong and there is no extra
penalty for giving wrong answers. So if youre running out of time, just
guess and pray youve selected at least a few right answers.
Final Words
In the end, the goal is to get you through the PST and into the live
interview rounds. With the tips and tricks of this chapter in the back of
your mind you know what to expect and ready to save some of those
precious minutes, which you can invest in revisiting that difficult
question halfway the PST.
The PST is challenging, but fun. You are not being compared to the
others, they arent the competition. Its just you beating the cut-off
score. Look at it as a game: you are going for the high score.
Other Written Cases

Much of what applies to the McKinsey PST also applies to other written
cases. Because of the success of the PST (quick, cheap and reliable),
other firms have been implementing them as well. BCG uses them in
46
some European offices and some firms started by McKinsey alums have
been using a variation of the original as well.
The BCG test also borrows some tasks from standard intelligence tests
and has a more quantitative focus than the PST. Otherwise, they are
comparable.
47
48
Practice PST Case

Below, youll find an example of a PST-style case. When doing this case,
dont use a calculator and measure your time. The time limit is 20
minutes. Answers and explanations are provided in Appendix A.
BePal
Bepal is a pallet manufacturer located in Belarus, in the former Soviet
Union. It was established in 1993 and operates two divisions: a sawmill
and a pallet production line (since 2000). It buys raw wood from a local
woodcutting company and processes the logs into wooden planks at its
sawmill. These planks are sold to furniture factories and used by its
pallet division, which buys them for market price.
Pallets are used in transportation and can be made of wood, aluminum
and plastic. More than 90% of pallets are made out of wood, a natural
material that requires extra treatment to make it less prone to fungal
growth and increase its resistance to weather conditions. BePals pallets
are high quality and carry the EPAL (European Pallet Organization)
quality mark, which include extra norms to increase safety and
durability. The most used EPAL pallet is the EPAL1, with the dimensions
shown below.
BePals Pallet customers are mainly European logistics companies that

ship to Russia: Belarus is on the main trade route between the port of
Rotterdam and Moscow and has a bustling wood manufacturing
49
industry. Lately, BePal has seen an increase in orders from Russian

customers.
While BePals pallet business was on the rise, its sawmill business was
hurting. BePals CEO has contacted us to advise him on the situation: he
wants to make the sawmill division profitable again by reducing cost.
You are on the consulting team we sent to Belarus to help him achieve
his goals.
Below, youll find a chart with BePals total revenue from 2005-2010:
BePal Revenue 2005-2010 in million $

30
25
20
15
10
5
0
2005
2006
2007
Sawmill
2008
2009
2010
Pallets
1. As you can see in the chart above, revenue from the Sawmill has
decreased in the years 2005-2010. Which of the following statements
about BePals revenue is correct?
A. Revenue for BePals Sawmill has always been in decline.
B. BePals Sawmill saw its revenue more than halved in this period.
C. In 2007, revenue from the Sawmill was lower than from Pallets
D. The decline in Sawmill revenue is caused by a declining demand for
processed wood.
50
2. Which of the following information would help you answer the CEOs
question?
1.Cost structure of the Pallet division.
2.Market analysis on customers and competitors in the
processed wood market.
3.Current Sawmill revenue and profit.
4.Analysis on revenue opportunities in the processed wood
market.
5.Cost structure of the Sawmill division.
You would need at least:
A. 1 & 5.
B. 2, 3 & 5.
C. 2, 3 & 4.
D. 3 & 5.
3. What would definitely not help the CEO in attaining his goals?
A. Lay off a part of the workforce.
B. Reduce inventory of finished goods.
C. Lower the price of his products.
D. Renegotiate prices with suppliers.
The director of the Sawmill division visits your team and tells you that
there are actually two sawmills: A & B. He only has data on sawmill A,
the biggest sawmill of BePal, and supplies you with revenue and
processed wood volume of this sawmill. You compare his info to the
data you received from the Pallets division:
Year
2005
2006
2007
2008
2009
2010
Sawmill A Revenue
(in million $)
15
13
10
10
7
5
Sawmill A
Volume
500000
450000
370000
380000
280000
200000
51
Pallets Revenue
(in million $)
4
6
9
11
12
11
Pallets
Volume
400000
600000
900000
1100000
1200000
1100000
4. What cant be concluded from this table?

A. Prices of BePals processed wood dropped more than 15% in this
period.
B. BePals Pallets are sold for $10 a piece.
C. BePals revenue in 2005 was $19 million.
D. Pallet revenue and volume increased by 33% from 2006 to 2007.
Your team has identified the falling price of processed wood as one of
the main reasons for falling profits. While fixed and variable costs have
been constant over the years, prices dropped and profit margins fell.
Your team calculated that for Sawmill A, profit margins in 2009 were 17
%.
5. What was the profit per unit for Sawmill A in 2009?

A. $ 4.25
B. $ 4.05
C. $ 3.95
D. $ 4.30
6. In 2010, prices remained the same, but volumes dropped. If Sawmill

As fixed costs in a given year are $ 3m, what would happen to the
profit per unit in 2010 if we also assume variable costs remain at the
2009 level?
A. They would be lower than $ 4.05
B. They would be higher than $ 4.05
C. They would be the same.
D. You cannot answer this question based on this information
Even though the Iron Curtain fell in 1990, Belarus is slow in opening its
markets and privatizing state companies. Foreign investment is on the
rise, but many companies are still (partly) state-owned. Some receive
state funding to guarantee their continued existence, while others
receive tax incentives to improve their competitive position (and some
get both). Our competitor analysis has shown that a large percentage of
sawmills in the area is state owned.
52
7. Which of the following developments could not have caused the pricedrop of processed wood?
A. Lowered VAT on products from state owned companies
B. A more restrictive woodcutting policy, requiring more trees to be left
standing in deforested areas.
C. Technological advancements in the woodcutting industry, reducing
the amount of wood wasted during processing by 20%.
D. A cultural shift in housing: traditionally people lived in wooden
houses in villages, now people move to the city and its concrete flats.
See Appendix A for the solutions.
53
54
Guesstimates
One of the basic interview types youll encounter throughout your
interviewing process will be the guesstimate, also known as the back of
the envelope or market sizing question. Many first round interviews will
feature a guesstimate and later rounds often start with one which is
then expanded into a business case.
Examples include both problems closely related to business, such as
how many car-tires are sold each year in the United States, but can also
include oddball questions such as how many ping-pong balls fit into a
Boeing 737.
Already struggling with the above questions? Dont fret, guesstimates
are easy to practice and not particularly difficult, and thus the perfect
interview type to start your case practice with. Still, its frustrating to trip
over your calculation of the size of the coffin market in Moldavia and
nothing hurts your performance more than being nervous and lose your
cool. Practice guesstimates until you can confidently solve them without
effort.
Expert Tip:
You should practice structuring guesstimates in your spare time, for
example while walking through town (How many traffic lights does
this city have?) or while dining out (What is the average weekly
revenue of this restaurant?).
Before we go through some practice questions later in this chapter, we

will introduce the basic structure of guesstimates, a how-to on making
correct assumptions and guesstimate pitfalls. But first, the four golden
guesstimate rules:
Four Golden Guesstimate Principles

Keep these rules in mind throughout your case interview practice and
this chapter, theyll prevent those embarrassing moments and help you
get the job.
Principle 1: Process, not answer.
The interviewer does not really know the size of the New York hot dog
stand market, nor does he care. Its about determining whether you are
fit to be a consultant: can you break down a complex problem into its
55
parts, analyze those parts and then come up with an answer based on
your analysis without breaking a sweat?
Focus on the process: draw the structure of your analysis, show it to the
interviewer and walk him through it:
(Turning paper towards interviewer)
As Ive drawn here, I would first like to know the amount of people in
China that would be able to buy luxury handbags. Lets assume there are 1
billion people in China, and only women are interested in handbags, which
leave us with 500 million potential customers. Not everyone can afford
luxurious products however...
And so on.
Principle 2: No trivial facts, please.
Maybe youve read in a BusinessWeek article that every US town has an
average of six gas stations. Or the newspaper reported this morning
that every American consumes 1,500 gallons of water yearly. The
interviewer wants to see whether you can use your judgement to come
up with reasonable estimates, not how well you can remember facts.
Resist that temptation.
Principle 3: Dont be hard on yourself.
Round numbers up or down for easy calculation. Assume that there are
300 million Americans, not 313. If you calculated the European market
for ski gloves to be 3.013.458 pairs a year, use 3 million. If you need to
calculate the total market value of the European ski glove market,
assume an average price of $20, not $17,45.
Also, write these numbers down. You dont want half your brain
remembering numbers while you need 100% to focus on cracking the
case. Bring pen and paper, just to be sure.
Principle 4: Think out loud.
The whole process of interviewing is about showing the interviewer that
you can think, act and hopefully work as a consultant. This means
involving him in your train of thought: why do you assume X, how did
you come to answer Y? The best way to do this is to think out loud,
which is more difficult than it may seem. Practice thinking out loud even
when practicing alone by pretending you are explaining your approach
to someone sitting opposite to you.
56
Guesstimates: Basic Structure

The basic approach of guesstimates is comparable to the business case
approach and features three distinct steps:
I. Opening
Pause (Thats interesting...)
Buy your brain some time to start grappling with the problem, so you
can ask relevant questions and start structuring.
Verify
You start with verifying the question, repeating it to check whether
you remembered it correctly and making sure you set out to answer
the real question.
Explore
You can squeeze in two or three questions to improve your
understanding of the subject at hand and narrow down the scope of
the question. We advise against the latter though, as it is your task to
separate relevant from non-relevant issues..
II. Analysis
Structure
Take a minute to build your framework for answering this
guesstimate. What data do you need? What is relevant and what not?
Assume and Calculate
Go through your structure, assuming and calculating numbers along
the way. Dont forget any branches of your framework and try not to
screw up any calculations.
Listen
Listen to the interviewer when hes trying to guide you, be

confident about your approach without being defensive.
III. Closing
Check
After finishing your calculations, double-check your framework: did
you miss anything? Do a sanity check on the results: is the market for
tooth-brushes really a 12 billion dollar market in Canada?
Answer
After double checking your numbers, answer the question.
57
How to support your assumptions

Many guidebooks and therefore many candidates believe its OK to
make quick and dirty assumptions and sometimes, it is. But most of the
time, you can expect the interviewer to question your assumptions: how
did you get to that number?
Not having a clue in this case is bad. Trying to cover it up is even worse,
as most interviewers see right through your attempts. Below, we
introduce four approaches you can use as a reference to get to a
reasonable assumption.
Reference 1: General Population.
When you can safely assume that the whole population regularly makes
use of service X or buys product X, you can use the general population
as a reference for assumptions: how many X per 1000 inhabitants. You
can calculate the number of gas stations, supermarkets, fast food joints,
etc. this way.
How many supermarkets are there in the US?

In my town we have ten supermarkets for a total of 29,000 inhabitants.
Ill therefore assume that there is about one supermarket per 3,000
inhabitants. I assume that the general population of the United States
is about 300 million, therefore there are about 100,000 supermarkets in
the US.
Reference 2: Households
Some products are only used once in every home. A good reference
point thus is the average household: how many of product X or service X
is consumed per household?
Use the number of households to calculate the market size for white
house paint, lawnmowers, television sets and newspaper subscriptions.
58
How many lawnmowers are sold in the US each year?

I assume that there are 300 million inhabitants in the US and that the
average household size is 3, so we have 100 million households in the
US. Not everyone lives in a house with a garden, so I assume that
about 40% of Americans have a house with a garden, which makes 40
million households. I assume that a lawnmower breaks down after
about ten years, which would mean the amount of lawnmowers sold in
the US each year is 4 million.
Reference 3: You.
There are things that everyone needs, be it shaving razors, underwear or
food. In this case its helpful to use your own behavior as a reference
point, though its wise to segment and differentiate between usage
patterns based on preference, age or gender.
How many shaving razors are sold to men yearly in the US?
I assume the US population is 320 million and that there are an equal
amount of males and females. I also assume the life expectancy is 80
years and that everyone is divided equally among the different age
groups. I shave every day and assume every man does, and I change
razors about once per month. Some men are too young to shave and
some wear beards, so lets assume that no man in the age group
between 0-10, and only half the men between ages 11-20 shave. I also
assume that of the other age groups, 5% wear beards and do not
shave. Thus:
Age group
# of men
% that shaves
# of shavers
0-10
20m
0m
11-20
20m
50
10m
21-30
20m
95
19m
31-40
20m
95
19m
41-50
20m
95
19m
51-60
20m
95
19m
61-70
20m
95
19m
71-80
20m
95
19m
Total
124m
With a total of 124 million men shaving every day and changing razors
every month, there are 124 x 12 = 1488m shaving razors sold each year.
59
Reference 4: Time
The final reference point you can use to support your assumptions with
is to make assumptions on the amount of time it takes to perform a
certain action. Useful if you want to calculate the amount of pumps at a
gas station or the amount of visitors to the Vatican Museum.
How many tourists visit St. Peters Basilica in Rome each year?
Ive visited Rome once, and I know that everyone visits St. Peters
Basilica. Theres always a huge line on St. Peters square: I assume
people start visiting the cathedral from the time it opens at 8 am and
do so until it closes at 8 pm. There is only one entrance, with four
security gates and I assume it takes 30 seconds to get checked. So
every minute, eight people can enter the cathedral. The cathedral is
open 12 hours a day, seven days a week, for 360 days a year, we thus
have 8x60x12x360 = 2.073.600 This means that about two million
people visit St. Peters Basilica each year.
If everything else fails...

Sometimes, there is no way to match the question at hand to one of the
above reference points. In those cases, just break down the problem in
various parts and analyze each part. Many problems can be solved if
they are divided into a lot of small problems, the same holds for cases.
Refine Assumptions
So you have your reference point, what more do you need? To make
your assumption more realistic, you should refine it in a few steps. You
already saw it in the above examples. For example, in the lawnmower
example, we refined by only using houses with gardens in our
calculation instead of all houses. In the shaving razor case, we refined
our assumption by accounting for the ages of men that shave and the
men who wear beards and thus dont shave.
An assumption about the amount of customers at a restaurant could be
refined by accounting for busy weekends and calm weekdays. An
assumption on the size of the chocolate bar market could be refined by
differing between regular consumers of chocolate, binge eaters and
members of Chocolate Anonymous, who abstain from eating chocolate
completely.
60
But you can also go too far, making it unnecessarily complicated. For
example by differentiating between six groups of cinema visitors with
different visiting patterns, or identifying seven factors that influence the
amount of soft drink sold at a local fast food joint. The trick is to find a
balance in refining your assumptions and a great rule of thumb is the
80/20 rule.
The 80/20 rule is found everywhere and basically comes down to the
following: 80% of the effects is caused by 20% of the causes. So 80% of
profits come from 20% of customers. And 80% of ice cream sales are
driven by two or three factors (for example: temperature and weather).
Try to identify those two to three factors that are important and dont
bother about the rest.
Guesstimate Pitfalls
Guesstimates are not very difficult, especially after youve practiced
them a couple of times. As long as you adhere to the basic principles
outlined above and learn from your practice sessions, theres little that
can go wrong. Still, well highlight two often made mistakes:
Diving too deep
Especially if you are a little perfectionistic or have a scientific
background in which youve always strived for exact answers it might be
difficult to know when to stop refining your structure. Be wary of diving
too deep into the analysis. You dont want to waste valuable time (if the
guesstimate is only an introduction to a business case) or lose yourself
in a too difficult structure.
Standing your ground without being defensive
You might be challenged by the interviewer: he might ask whether you
believe your approach was whether you think you missed something
important. Dont get emotional and defend your analysis at all costs, but
neither should you give in too rapidly.
As a consultant, youll also often face opposition and be asked (or
forced) to defend your analysis. Do you think consultants crumble when
a client thinks their analysis stinks? Obviously not: so act like a
professional, keep your head cool and stick to your guns, initially.
In the next chapter, youll find sample guesstimates (including
solutions) to practice everything youve learned during this chapter.
61
62
Practice Guesstimates
Below youll find three practice guesstimates, with a completely
elaborated solution.
London Eye
Last year, the company organized a weekend with the complete office to
visit London. We had a great time visiting all the attractions, including
the giant Ferris Wheel at the bank of the Thames: the London Eye. As
consultants, we couldnt resist but think: whats the yearly revenue of
the giant Ferris wheel in London, the London Eye?
Thats interesting, just let me get this clear, you want me to calculate
the yearly revenue for the London Eye?
- Yep. Have you even been on it?
Ok, well, as a matter of fact Ive been to London once, but we only
walked past the Eye. So to answer your question: no.
- Then let me give you some more info on the Eye. Its quite a
popular attraction for tourists since it gives a great view over
London, even at night. The wheel itself turns very slowly, so people
can get in and out easily: it never stops. Oh, and ticket prices are
quite expensive, at 35 for adults and 25 for children.
Hmm. Yeah, I think the prices were also the reason we skipped it during
our visit. But back to the case: could I take a minute to draft a structure?
- Sure.
Take some time to draft your own structure of analysis. An

example structure has been given on the next page, but write
down your own before you look at the example.
63
Ok, to determine the yearly revenues, I need to determine the amount of

visitors per year. As Ive drawn here, I first want to determine the
revenue per day. So lets first try to determine the amount of visitors per
day. There was a big line at the Eye when I visited London, even though
the weather wasnt that great. So I guess they usually fill every capsule
up completely. I remember they let about 20 people in one capsule, but
dont quite know how many capsules there are... Could you help me on
that?
- Sure... I dont know exactly either, but its about 30 capsules.
64
30... Ok, still more than I thought. You already mentioned the wheel
turned quite slowly, so lets assume that a capsule goes round in 30
minutes: so 40 people get in hourly, per capsule. That would be during
high season, however. During low season, I assume its only half that
amount, so 20 people per hour per capsule, is that ok?
- Maybe a bit optimistic, but go ahead.
Ok, of the people on a capsule, not all are adults and I think such a
Ferris wheel is a great family attraction, attracting children like flies. I
assume that children are accompanied by their parents, so the amount
of children never goes above, say, 20%. Which means that during high
season, a capsule would hold 32 adults and 8 children per hour and 16
adults and 4 children during low season. This leads to a revenue per
hour of (1120 + 400 =) 1520 per capsule during high season and
760 per capsule during low season. The London Eye is opened from
morning to evening, so lets say 10 hours per day, for ease of
calculation.
- Sure.
One day would then bring in 10 x 30 x 1520 = 456,000 during high
season and 10 x 30 x 760 = 228,000 per day during low season. Now
lets assume that high season runs from May until October, so six
months, which equals 180 days. That would mean a revenue of about
82 million. The low season would then bring in 41 million, summing
up to a grand total of about 123 million. The yearly revenue of the
London Eye thus comes down to around 120 million.
- Thats indeed close to their yearly revenue. Thank you for the
calculation.
65
Hearing Aids
One of our clients in the healthcare technology industry is considering a
move in the hearing aid market. They have recently discovered some
innovative technologies which let them miniaturize speakers in a new
way. Lets look at the size of the hearing aid market first: would you like
to estimate the size of the US hearing aid market for me?
Let me get this straight: you want me to calculate the US market of

hearing aids?
- Thats correct.
Ok. Well, I believe that hearing aids are covered by health insurance, but
I know that not everyone in the US is fully insured. Some people rely on
Medicaid, some are privately insured. Do we have any information on
that?
- Even though its not realistic, just assume that everyone is insured
and that there are not differences between insurances.
Very well, one more question: do we have any information on the age
distribution in the United States?
- What do you think this distribution is?
Note: If the interviewer returns your question, youve crossed
the line between what you can ask and what you should
calculate/assume.
Well, I think the age distribution in the US is pretty straight: there are
about as many elderly as there are youngsters. Could I have a minute to
draw up my structure of analysis?
66
67
Ok, as you can see, I assume that there are two reasons why someone
would use hearing aids. First of all because of old age and secondly
because of hearing damage, by being subjected to loud noises for long
periods of time. Im going to assume that the total population of the
United States is 320 million, and that the population is distributed
equally along the eight age groups, with a maximum age of 80. For
every age group, I then make assumptions about the percentage of
people using hearing aids either because of old age or hearing damage.
- Ok.
That means there are eight age groups, with 40 million people in each. I
dont think people suffer hearing loss of old age before their fifties, so I
assume that only the age groups above will use hearing aids. Hearing
damage will probably not occur before people start visiting concerts and
work in loud environments, so they will only occur after age 20. That
leads to the following table, and a total potential user base of 34.4
million hearing impaired.
Age
Group
Size
Old Age
(%,#)
Hearing
Damage (%,#)
0-10
40 mln
0, 0
0, 0
10-20
40 mln
0, 0
0, 0
20-30
40 mln
0, 0
1, 0.4 mln
30-40
40 mln
0, 0
2, 0.8 mln
40-50
40 mln
0, 0
2, 0.8 mln
50-60
40 mln
10, 4 mln
2, 0.8 mln
60-70
40 mln
25, 10 mln
2, 0.8 mln
70-80
40 mln
40, 16 mln
2, 0.8 mln
30 mln
4.4 mln
Total
Not everyone likes to use these hearing aides however, so I reduce this
usage base with 10% to account for that. That leaves us with about 30
million hearing impaired who actually use hearing aides. I have no idea
what the average cost of hearing aides is, but I know that theyre not
68
cheap. So Im going to assume that they cost about $2000 dollars on

average, especially because they are very high tech nowadays.
- That might be a bit too much, but continue.
Ok. Well, with a $ 2000 average price tag, 30 million users, I only need
the average replacement period to calculate the yearly market. These
hearing aides are used every day, and not in the most friendly
environment for technology: in a warm and humid environment. They
are also pretty small, and if they dont get lost, people might step on
them. So lets assume they are replaced every 10 years. That would
leave us with a total market size of $ 6 billion.
- Ok, thank you very much.
69
Romanian Coffins
Our next client is the owner of a small wood workshop in the Romanian
capital of Bucharest. For generations, this workshop has made furniture
of any kind. Nowadays, its focused solely on the production of coffins,
in which the local dead are buried. My question for you is: can you
estimate the size of the coffin market in Bucharest?
Interesting... so my objective here is to estimate the size of the coffin

market in Bucharest, the capital of Romania?
- Yep, that is correct.
Ok. Let me first ask a few questions. Ive never heard of the city of
Bucharest before, and though Romania rings a bell, I have no clue about
how many people live in its capital. Do you have information on that?
- Ah, sure: there are about 2 million people living in Bucharest at the
moment.
Hmm. I have one more question for you then. Im not familiar with the
burial customs in Romania.
- And what would you like to know?
Well, are their dead buried or cremated? Do they buy simple coffins or
are there traditions in place that every man is buried in the most
luxurious coffin he can afford? What other cultural factors should I worry
about?
- Most of the dead in Romania are buried, as is tradition. There are
various cultural festivities around a persons death, but none about
the type of coffin he is buried in.
Ok. Could I take a minute to draw up a structure of analysis?
- Sure.
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I have drawn up my structure, let me walk you through it. We start with
the total population of Bucharest, which was 2 million. For ease of
calculation, I will round this up to 2.1 million, if that is ok?
- No problem.
I assume that these 2.1 million inhabitants pass away on their 70th
birthday on average and are equally distributed among the age groups.
With seven age groups and each spanning ten years, that will be
300,000 inhabitants per age group. Even though some Romanians pass
away at age 50 and some live on to become 90, I assume that on
average, they pass away the day they reach their seventieth birthday,
which means that each year, one tenth of the 60-70 age groups passes
away, which is 30,000 people.
- Ok.
Of these 30,000 people, most are buried as is tradition. But I assume
that there will also be people that are cremated, but not many: lets
assume 10 %. That would mean there are 27,000 burials in Bucharest
each year. I also think that not everyone is buried in the same type of
coffin, so the richer part of the population is buried in expensive coffins
and the poor part of the population in simple coffins. And I assume that
20% of the population can afford an expensive coffin.
- Very well.
That would mean that there are 5,400 expensive coffins sold each year,
and 21,600 simple coffins. We can now calculate the total market size,
which is 5,400 x $800 plus 21,600 x $ 200, which makes a market size
for the Bucharest coffin market of $ 8,640,000 a year.
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Business Cases
The business case is the main case type youll encounter when
interviewing at consulting firms. The work of a consultant is varied and
so is the business case: from profitability problems to mergers, market
entry and investment decisions, you can expect it all. This broad range
makes preparation difficult: there is no way you can prepare for every
possible case question that will be thrown at you.
Then how to prepare? As with guesstimates, there is a basic approach to
all business cases and we will walk you through it below. Frameworks
can help you structure your thoughts and we will treat three frameworks
with broad application. We will conclude this chapter with case interview
pitfalls and practice questions.
Four Golden Business Case Principles

Before we set off however, we will introduce four basic principles to
business case interviews. Keep the following principles in the back of
your mind when practicing or cracking business cases.
Principle 1: You are the consultant
As with guesstimates, case interviews are a method for the interviewer
to assess your consulting skills. And as with guesstimates, the process
is more important than the final answer. You should think out loud to
make this process known to the interviewer. Think of the case interview
as a hypothetical meeting between consultant (you!) and client (the
interviewer). You are a consultant of firm X trying to fix the problems of
the client in a structured way. Not only do you need to find a good
solution to the problem at hand, youll also need to convince the
interviewer that you can successfully perform in real life consulting
situations.
Expert Tip:
I look for client friendliness in all candidates and it is an aspect many
forget. Yes, you need to structure the problem. Yes, you need to give a
data-driven advice. Yes, it helps to think out loud. But consulting
revolves around the client and you need to involve him in every step in
your analysis: explain your procedure and show me your work.
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Principle 2: Always let a stated hypothesis drive your analysis.

During your college or university years you have probably done
research: you identified an unanswered scientific problem, read
literature on the subject, formulated a hypothesis, gathered data,
analyzed the data and drew conclusions. In consulting and during case
interviews you do the same thing, only more efficient: you directly
formulate a hypothesis as an answer to the main question and let the
hypothesis steer your analysis. You then ask questions and gather data
to (dis)prove your hypothesis, reformulate it and keep gathering data
and reformulating until you can safely draw conclusions. This process
has been visualized below:
By letting your hypothesis drive your analysis, you save time by

preventing unnecessary data gathering. Still seems fuzzy? Lets look at
an example:
Example: ABC Conglomerate

ABC Conglomerate is trying to increase its profits through an increase
in revenue of $ 10 million and asked us for help. You propose to gather
some financial data: product prices and sales, fixed and variable costs
and their trends over time.
Right? No, wrong! Why investigate costs when trying to increase
revenue? Even though we can potentially save a lot of money with a
thorough cost-analysis, the information is irrelevant and time
consuming to gather and analyze. Try again and take a minute to
follow the steps illustrated above: identify the key question and
formulate a hypothesis that is an answer to this question, then write
both down.
If done correctly, you should have written down something like this:
- Question: What can ABC do to increase revenue by $10m?
- Hypothesis: ABC can increase revenue by increasing prices with 10%.
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Is this the answer to the case? Maybe, maybe not: but the hypothesis will
drive our analysis towards the answer and away from distracting and
irrelevant information. When cracking a case always formulate and state
a hypothesis, then attempt to (dis)prove it. Iterate the process until you
are able to give a data-driven solution to the case.
Example: Iteration
Candidate: I know that revenue is broken down into the number of
sales and price. My hypothesis is that ABC conglomerate can increase
revenue by increasing the price of its products by 10%. Increasing price
will probably cost us customers, do we know how price-sensitive our
customers are?
Interviewer: Well, we know that increasing price by 10% will cost us
20% of our customers.
Candidate: Ok, so it seems that raising price is not an option, as the
increased price cannot cover the amount of customers lost. Instead of
raising price, we can also increase revenue by increasing the amount of
goods sold. Do we have information on...
What did we see in the example? The candidate hypothesized that the
solution to the revenue problem lied in increasing price and stated this
hypothesis before searching for data to (dis)prove it. The interviewer
gave him the necessary data to disprove his hypothesis: prices could not
be raised. This led the candidate to revise his hypothesis and focus on
the other component of revenue: the amount of goods sold.
What if the key question was not to increase revenues but to increase
profits and there was also no way to increase sales (because the
company has no money to spend on marketing)? You then go up in
your structure of analysis and focus on another branch of analysis that
might influence your goal. In this case, analyzing costs would be a good
idea. In the next section we will look at how you should structure your
analysis: according to the pyramid principle.
Principle 3: The Pyramid Principle
Often, you will need to analyze more than one area to disprove your
main hypothesis (the answer to the main question). For example, if ABC
conglomerate wants to improve its profits without specifying whether
they want to do it through increasing revenue or decreasing cost, you
will want to investigate both. You should structure the related questions
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(and their corresponding answers in the form of hypotheses) in a topdown fashion. For example:
This technique might be difficult at first, but you can use the
frameworks later on in this chapter to guide your questions and
hypotheses. Structuring in this top-down fashion is known as the
pyramid principle and is common practice in every consulting firm
today.
MECE Categories
When building a pyramid of hypotheses, you should strive to make them
MECE (pronunciation: me-see). MECE is an acronym for Mutually
Exclusive, Collectively Exhaustive. Well elaborate both below:
Mutually Exclusive
All categories of analysis on the same level should be mutually
exclusive: there should be no overlap between them. For example,
dividing the analysis of Mars energy bar division into an investigation
regarding chocolate energy bars and another regarding caramel energy
bars is not mutually exclusive: some energy bars are a member of both
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categories. Making a distinction between the energy bar division and the
pet food division is mutually exclusive. No Mars product is both an
energy bar and a pet food.
Mutual exclusivity makes it easier to determine which factors are
causing the found results. For example, Mars declining revenue could
be attributed to declining revenue of the energy bar division, you can
safely say that further analysis of the pet food division is unnecessary. If
you found a revenue decline in the caramel energy bars category, do
you need to analyze the Snickers-division?
Collectively Exhaustive
Your categories of analysis should cover all factors influencing the
result. When trying to determine a new product launch, you could
analyze only the customers wishes and leave it at that. But there are far
more factors influencing a successful product launch, such as size of
the market, competition and of course the product itself.
Therefore your categories of analysis should be collectively exhaustive,
combined they should completely account for the (possible) result.
Because you have little time during a case interview, you should focus
on the three to five factors accounting for the biggest changes in result,
instead of trying to find them all: dont boil the ocean.
Principle 4: Dont boil the ocean
During the case interview youll be focused on gathering relevant
information and cracking the case. In the effort to perform well, youll
probably be striving for perfection and finding the best solution. And
before you know, the interview is over and you are only half-way your
analysis.
Even though its counter-intuitive, you should not strive for perfection,
but stop when the analysis is good enough. We already mentioned the
80/20-rule: 80% of effects come from 20% of the causes. If youve found
the two or three causes that make 80% of the difference and focus on
them: its good enough. Do not continue your analysis, wasting precious
time in an attempt to explain the remaining 20% of effects. When cutting
costs at a factory, you dont investigate the potential savings of
switching off air-conditioning. If you want a cup of tea, you dont boil
the ocean.
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The Basic Structure of Business Cases.

Every business case will follow the basic structure outlined below. Since
Analysis (step II) and Closing (step III) are crucial for successfully
cracking a business case, we will elaborate them more fully than we did
above in the guesstimate chapter.
I. Opening
Pause (Thats interesting...)
Buy your brain some time to start grappling with the problem, so you
can ask relevant questions and start structuring the case.
Verify:
You start with verifying the question, repeating it to check whether
you remembered it correctly and making sure you set out to answer
the real question: Is this the only question or is there more I should
be concerned about? Try to quantify the goal if possible: by how
much do we need to increase profits? By how much should we reduce
costs?
Explore
You should explore the company or subject with two or three general
questions. Try to understand the industry and the value chain, how
does the company produce value for its customers? If the question is
about a specific subject (for example, the distribution of product X),
try to understand it. Try not to ask too broad questions, as this might
irritate the interviewer. You know youve crossed the line if he
replies with What do you think?.
Structure
With a good grasp of the company and the question, start structuring
the case. Dont rush it, ask the interviewer for a minute to do this: it
is completely normal. Formulate (sub)hypotheses and build a
structure that will ultimately (dis)prove the main hypothesis and
answer the question.
II. Analysis
To analyze = to break down
Go through your structure from top to bottom, guided by your
hypotheses, adapting both along the way. For a structured and
thorough analysis, follow the following steps:
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1. State your (sub)hypothesis

My hypothesis is that ABC can improve profits through an increase in
revenues and I want to break revenues down into its component
parts...
2. Identify key issues
... I know that the main drivers for revenue are the price per product
and quantity of products sold...
3. Ask questions
... do we have more information on the quantity of products sold?
4. Dig deeper or go back
... and has the volume of products sold changed over the years?
... ok, so the volume has already increased significantly, what did
prices do?
5. Make a (mini-)conclusion and refine your hypothesis
... since both sales and prices are up from previous years and high
for our industry, I dont think we can improve profits through an
increase in revenue. My new hypothesis is that we can improve
profits through a reduction in costs...
Expert Tip:
Try to break down and segment every subject of interest and keep
digging until you find something interesting or you can safely conclude
there is no more information to be found. For example, total revenues
of Firm A have been $ 15 million both last year and the year before.
This can lead you to conclude that revenues are not interesting and you
move on to costs. If you segmented further, you might have learned
that even though total revenues have not changed, product 1 went up
from $5 million to $ 10 million and product 2 went down from $ 10
million to $ 5 million. Interesting information youve just missed...
III. Closing
Synthesize
To come to a conclusion, you need to combine all the information
you found during your analysis. The product of this recombination is
called a synthesis, and there are five steps to a good synthesis:
1. Take a break and gather your thoughts.
2. Review the most important findings from your analysis.
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3. Provide an actionable conclusion.

4. Support this conclusion with data.
5. Mention one or two risks or areas for further analysis.
Give the answer
As with your structure, you follow the pyramid principle in answering
the case. This means you start with the (actionable!) conclusion and
back it up with data and not the other way around:
Good synthesis: Firm A should divest plant X because of data 1, data 2
and data 3. A potential risk however, is Z.
Bad synthesis: We analyzed data 1, data 2 and data 3, therefore its
best for Firm A to close plant X.
Starting with the conclusion feels unnatural, but gives the listener a
frame of reference to structure his thoughts. If youre not convinced,
listen to yourself or the person youre practicing with.
Expert Tip:
Stand by your conclusion and approach, without being defensive. If
Im interviewing candidates, I usually question their approach or their
results: are you sure that the market for socks is $ X?. Some
candidates break down and start doubting their (good) analysis. Dont
let self-doubt get the better of you: its healthy to be a little self-critical,
but you should also stand by your conclusion, just as real consultants
do. Other candidates react defensively, as if I just personally insulted
them. Be professional, defend your analysis and conclusions, but dont
get emotional.
Three frameworks with broad application

When candidates start practicing case interviews, they often think
applying frameworks will automatically solve a case. They then quickly
find out that they dont. Frameworks (whether the three shown below,
Porters Five Forces, the BCG growth/share matrix, or any other for that
matter) are just that: a frame of reference. You need to be flexible: use a
framework to help you remind of possible interesting areas of analysis,
but let your hypotheses drive the basic structure of analysis in the end.
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Expert Tip:
Nothing is worse than a candidate who tries to fit the case into the
framework, instead of the other way around. Dont investigate all the
five forces from Porter if only three are relevant to the case and never,
never state out loud that you are going to apply the Five Forces or the
Four Ps. Its not which framework you apply that matters, its why.
Weve already mentioned some frameworks above, all of which have

applications in specific types of cases. Below, Ill show you three highly
adaptable frameworks which you can use in almost every situation as a
basic starting point for your analysis.
The Profitability Framework
You use this framework when you get a profitability question, for
example: Company YXZ has seen declining profits, what can they do?
or Conglomerate ABC wants to improve its bottom line, how?.
Notes:
Revenue
Segment! Segment per product, per region or per customer:
segmenting uncovers hidden information. Well return to this later on,
but even if revenue has been flat, there could have been huge
variations in the revenues per product. How do you know the best way
to segment? Either through previous exploration or by not being
overly specific when posing your question: the interviewer will often
reveal the best segmentation.
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Do ask: I want to break down revenue in its component parts, do

we have more information on it?
Dont ask: I want to know the total amount of sales.
Be quantitative, then qualitative. The profitability framework is a
mathematical equation you can solve: Profit = Revenue - Costs. Dont
stop when you have isolated the problem, but ask why costs have
gone up or sales are down.
Costs:
Segment! Breaking costs down in variable and fixed costs is often the
best, but not always. You might want to have costs per division, or per
product.
The Business Case Framework
This is a framework you can use for most business cases, from specific
cases such as growth strategies, (re)positioning and market entry or
when following up from the profitability framework to investigate ways
to increase revenues/decrease costs.
It features two branches of analysis: an external environment that
influences our firm and internal factors that our firm can influence. It
features elements from Ohmeas Three Cs model, as well as elements
from Porters five forces.
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Notes:
External Branch:
Competitors
Determine who your competitors are and what differentiates them
from your company.
How many competitors are there?
How large is every competitor in terms of market share: is there one
big competitor or many small ones?
How has the competitive landscape changed over the last years? Have
new competitors been entering? Have there been mergers? Have
competitors gained market share and if so, why?
Market
Is this a mature or emerging market? Is the market growing or in
decline? Be on the lookout for contradictory signs, such as a company
with declining revenue in a growing market.
Are there barriers to entry or exit? Do we fear new entrants? If we
enter this market, can we exit without significant costs?
How is legislation effecting the market and our strategy? Will an
acquisition be stopped because of anti-competitive legislation? Are
there any disruptive technological innovations going on?
Internal Branch:
Customer
Who are our customers? How can they be segmented: by age, location,
industry?
What are the needs of each customer segment? Are there differences
between them? Are we fulfilling those needs with our product/service?
Which distribution channel does each customer segment prefer? Direct
marketing? Online stores? Brick and mortar stores?
Product
What are the features of our product? Try to understand the qualities
of our product and why we are different from competitors. Is it unique
or a commodity?
Why would a customer buy our product? Why not?
In which stage in the product lifecycle is this specific product?
Company
What are our core competencies? What do we excel at and sets us
apart from the competition? Product design? Logistics? Innovation?
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How are our finances? Can we invest in a marketing campaign or an

acquisition?
Which distribution channels do we employ? Do these match with the
needs of our customers? Can we develop new channels?
The Go/No Go framework
This framework is useful for all situations in which you have to choose
between two scenarios. Basically, you make two Business Case
frameworks: one for the scenario in which the company decides to do
the acquisition/product launch/market entry and another scenario in
which the company decides not to do the acquisition/product launch/
market entry.
Often, candidates only look at one scenario, following their hypothesis
(Yes! We need to acquire competitor X!) blindly. But it might be far
better not to do anything at all and focus on organic growth only: a
scenario you forgot to analyze. The Go/No Go scenario prevents that
and allows easy comparison of the advantages and disadvantages of the
acquisition/product launch/market entry.
If you get a case question that involves a company looking for advice on
whether they should or shouldnt do something, the Go/No Go
framework will help you structure your analysis. Since the above is a
rather abstract representation of the framework, weve filled one in for a
market entry question.
When investigating whether a firm should enter a market, you compare
the current market to the future market(s). Weve only listed three areas
of investigation (Market, Customers and Risks/Costs/Barriers) for
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esthetic purposes, but you should also investigate how our company is
going to distribute our product in the new market, for example.
Business Case Pitfalls: Data

Data without context is meaningless
While solving a business case you will gather a lot of data. It is
important to realize that numbers or percentages on their own mean
nothing. If I tell you that costs have risen 50% while revenue went down
20%, do I make a profit? And if I tell you that profits of division A were
$10 million while profits of division B were $5 million, in which division
should I invest?
You dont know. In the first situation you need to know the absolute
numbers to determine whether you make a profit. In the second
situation youll need the numbers from the previous years to make a
well-grounded decision: maybe the profits from division A went down
from $50 million five years ago, while B grew from $1 million last year.
Always ask for historical trends when given data.
Hidden without segmentation
Company AB has two divisions and is looking for ways to increase profit.
Costs have been pretty much constant over the years at $20 million.
Revenue decreased from $25 million five years ago to $20 million today.
What should they do?
If you forget to segment costs, you could have missed the fact that costs
from division A went up from $5 million to $15 million, while division B
went down from $15 million to $ 5 million. Always try to segment data
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until you find something interesting or until you can be sure that there
is nothing more to be found.
How are the market and competitors doing?

This has been mentioned before, but the market and competitors are
also a helpful context to make sense of data. If you have a company
losing revenue in a declining market and with competitors hurting as
well (for example, the newspaper industry), then you know that it will be
difficult for the firm to improve its revenue with the current operations.
If the company is hurting in a growing market, then its a red flag:
something is wrong. It could be caused by the structure of the industry
or the company itself, but something is amiss.
Business Case Pitfalls: Structure

Jumping around
Theres a specific feature of a weak (read: untrained) candidate: they
jump around their framework a lot, seeming to randomly go from one
part of the framework to the next and then back again. Before we tell
you how to prevent this, let me first tell you the main causes for this
behavior:
They structure the case with standard frameworks (not adapted
to the question at hand)
They do not let a hypothesis drive their analysis
They dont think out loud
What can you do to prevent all this and improve your chances of passing
the interview? Read on below:
Adapt standard frameworks
Bad candidates try to adapt the case to a framework, good candidates
adapt the framework to the case. Untrained candidates will just use a
cookie-cutter framework and then follow it from A to Z.
For example, if the main case question is about reducing costs and the
candidate uses the profit framework they will start with asking about
revenues. Or when the client wants to know whether a merger between
his firm and Firm X is a good idea, the untrained candidate will try to
work his way through the business case framework and start with
competition, when in this case internal factors are far more important:
do they match between the two merging firms?
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Are revenues unimportant when reducing costs? Should competition be

disregarded when merging two firms? Not per se. But the interviewer is
looking for candidates that know to prioritize their analysis, just like
they should in real consulting life. Starting with less important or even
completely irrelevant fields of analysis is a red flag.
Be hypothesis-driven (again)
One reason why untrained candidates follow a standard framework is
because its easy: you dont need to think. You just pick the framework
you think is applicable and go for it. Your brain is racing at full speed,
dealing with the stress of the job interview and trying to crack a difficult
case at the same time, which makes it tempting to take a shortcut and
just go for the standard framework. .
What you need to do however is to take a step back, relax and look at
the case from a distance. Keep the question of the client in the back of
your mind and reformulate it into a hypothesis, for example:
To return to profitability, we need to increase revenue
And then use that hypothesis to guide your analysis, which in this case
would lead you down the revenue side of the profitability framework.
Every analysis you do, every question you ask, every move you make
during a business case should be driven by a (sub)hypothesis. This gives
you a clear direction (proving or disproving your hypothesis) and
focuses you on the important facts you need. If you dont think a certain
part of a framework will help in this process, dont analyze it!
Share your train of thought
Some candidates seem to adapt a framework to a case and seem to
follow a structured approach, using hypothesis to drive their analyses.
Some are natural talents that subconsciously follow these steps, others
learned it by practicing a lot. But they still might look like a weak
candidate.
Why? The interviewer is looking for repeatability. He needs to know
whether he can rely on you during real consulting engagements. If he
sees you doing the right analyses and asking the right questions during
the case, eventually arriving at a good conclusion, the interviewer is left
wondering whether you got lucky or whether you followed the right
approach. On the latter, he can rely. On the former he cannot.
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To show the interviewer you arent getting lucky every time and prove
that you can repeat this process on the job, youll have to share your
train of thought. The way to do this, is by thinking out loud. Does that
mean you have to say everything that comes to mind? Obviously not.
What should you always share?
- Any (sub)hypothesis
- Mini-conclusions and subsequent hypothesis refinements
- Aha-moments
The first two speak for themselves: they are what guides your analysis
and sharing them with your interviewer shows that you are following the
right approach. The third seems a little out of place, but let us explain.
Aha-moments are the result of learning interesting or contradicting
information from the interviewer and sharing your thoughts will show
that you are able to correctly identify important facts. For example, if
you learn that the market is growing but our revenues are falling,
something must be going on. An example:
Candidate: Ok, we know that revenue was flat at $10 million, but
before we move on Id like to investigate it a little further to make sure
Im not missing anything. Therefore Id like to break down revenue in
its component parts: amount of goods sold and price. Do we have
more information on them?
Interviewer: As a matter of fact, we do: we know that sales doubled in
the last year.
Candidate: Aha! Thats interesting. Since revenue is sales times price
and revenue was flat, it seems that if sales doubled, prices must have
halved. Id like to investigate why... Do we have more information on
that?
This example might be a little obvious, but you get the point.
Brainstorm in brackets
At any time during a case interview, you could be asked to:
Name the advantages of a joint venture versus a merger between
Firm X and Firm Y
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Think up reasons for a market entry

Brainstorm about potential cost savings
Give examples on how Firm X can increase revenues
Come up with reasons a customer would buy product Z
Etc.
In every situation, youre asked to brainstorm and then come up with
options or features. You could start answering right away, as most
candidates do:
The reasons our client could have for entering this market? Ok, well,
they will gain access to a larger customer base and increase revenue.
They will... eeuhm... the competition is weak. And... let me think...
eeuhm... they reduce dependance on the home market. And finally,
eeuhm... I think... No, I think that was it.
If you were the CEO of the client and a consultant for whom you pay
hundreds of dollars per hour just did the above, what would you think?
Let me tell you: you will not grant him a second project. How could you
prevent the above and look professional when asked one of these
questions? Brainstorm in brackets! Take a minute to brainstorm and
write down options/advantages/features/etc. and then present them:
The reasons our client could have for entering this market? Ok, Let me
think a minute.
Ok, I believe there are three main reasons our client should enter this
market:
- Market entry will give the client access to a larger customer base
allowing it to increase revenues.
- Also, the competition in this market is fairly weak, which gives us the
opportunity to seize market share quickly.
- Finally, diversifying operations into a new market will reduce our
reliance on the home market.
Its an easy method and when done consistently looks really

professional. It conveys to the interviewer that he or she can bring you
to a board-meeting at the client and be confident that you dont screw
up.
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Business Case Variants: Group Cases

A new variation on the traditional one-on-one case interview, in which
the candidate faces one consultant, is the group case interview in which
three to four candidates work with a consultant on a case. During a
group interview, the focus lies not just on the analytical case cracking,
but far more on your people skills.
There are three important things to remember when you are facing a
group interview and Ill walk you through each of them below:
Work together
Group cases are not about beating the other candidates, its about
beating the case together. That means you should support other group
members who struggle, listen to the ideas of others and help each other
in solving the case. Dont stick to your approach stubbornly if someone
elses approach is better, dont argue about who does what (I want to
be the leader) and confidently admit it if youre wrong about
something. Be nice: youre being judged on whether its a pleasant
experience working with you.
Help the team
Being nice also means helping others and sharing your knowledge: if the
other group members dont know how to structure a case, help them. If
they dont know what MECE categories are, teach them. If they are
facing trouble because they dont have a financial background, assist
them. Always be sure to bring the whole group through the process
without leaving anyone behind.
Its also very helpful to the group effort to have one leader who
distributes tasks and keeps an oversight on what needs to be done
when. So if theres no-one who takes this task upon himself, do it
yourself or ask the group who should do it.
Dont be a jerk
Since youre being judged on your skills as a teamplayer, this should be
obvious. Dont do anything that might hurt the group performance. If
you dont like the direction the team is taking, say so: in a professional
manner. If someone is making a mistake, dont point it out (the
interviewer will know) but help him correct that mistake.
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Always keep in mind that its the group effort that counts and that its
not about beating the others. You are rated on your interpersonal skills,
so focus on letting them shine in a confident, relaxed manner.
Business Case Variants: Presentation Case

Another recent addition is the presentation case. There are multiple
varieties (including group presentation cases), but in the end it comes
down to you receiving a bunch of slides and datasheets, together with a
question from the client.
Its important to keep in mind that youll always receive too much
information, including irrelevant stuff. Its your job to structure your
approach, which basically comes down to the normal case interview
approach of formulating a hypothesis and analyzing relevant data to
prove it. Even if you are unable to finish a final recommendation, show
them your approach and whats missing: its more about how you came
to the answer than the answer itself.
In the end, you are asked to present your analysis and conclusion, much
like a synthesis in the normal case interview. Presenting in the
consulting world is a profession of its own, but basically reflects your
analysis. If you followed the Pyramid Principle, its actually very easy:
Take your hypothesis (which by now should have been turned into
a conclusion backed by analysis) on the top of your pyramid. You
start with the conclusion, in actionable form.
You then support the conclusion with the conclusions from your
analysis one tier lower in the pyramid and present the data that
led to that conclusion
And so on.
For example, a profit framework presentation will have a pyramid like
this:
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A presentation starts with the conclusion, for example:

We can improve profit by $10 million if we increase our price by 10%
You continue with the conclusions from the lower tier, consisting of
revenue and costs (the two MECE categories which make up profit).
With a price increase of 10%, our revenue increases with $10 million,
while costs will remain the same.
And you then go down another level, breaking down revenue into its
component parts, and so on.
Want to test your new frameworks and structuring skills? In the next
chapter, youll find three sample business cases with a sample candidate
solving them.
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Practice Cases
To help you practice for your case interview, You can find three example
cases below. Try to solve each part on your own before reading the
sample solution: write down your answers on a piece of paper and then
read on, comparing your answer to the sample solution. Take heed of
the differences and take note of the things you forgot. Ready?
Indian Whisky
Our client is a luxury brand that has recently acquired a Scottish whisky
distillery. This distillery has one luxury brand, aimed at the upper
markets, and one private label, sold for lower prices in local liquor
stores. Our client is worried that this private label might damage its
upper class image and has asked us what they should do with it. One of
the options they would like investigated is whether they should relaunch
this private label as a luxury brand in an upcoming market: India.
Ok, thats interesting.... let me recap: our client has acquired a whisky
distiller in Scotland and is afraid that the private label produced by this
distiller could hurt their brand image. The client is wondering whether
they should rebrand the private label and sell it in India as a luxury
brand and Im to investigate whether this is a good idea, is that correct?
- Yes, that is correct.
Ok, lets get this clear: are there any specific goals that I should keep in
mind?
- Well, they strive for profitability in five years. But they are more
interested in possible risks and barriers and not looking for a
specific quantitative profit goal. Lets first start with a small
market sizing of the Indian whisky market however, could you
please tell me what the yearly expenditure on premium whisky is
in India?
Very well, but before I start, I have a few questions.
Take some time to think up and write down three to five
questions you would like to have answered before taking a look
on the following page. Do so now.
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I dont know anything about Indian culture, so I would like to explore

whether their drinking culture is comparable to ours or different in
some way?
- Their drinking habits differ from the Western societies: Indians
dont drink as much beer and wine, but traditionally drink more
distilled alcoholic beverages, including whisky.
Interesting. Another culture-related question is about their religion. I
know there are both Hindus and Muslims living in India, I know that
Muslims are not allowed to drink alcohol, what about Hindus?
- Youre right, most Indians are Hindus: about 90% of the
population. Though there are some Buddhists and Christians living
in India as well, lets just assume that the other 10% are Muslim.
So 10% of the population wont be buying our whisky then, I guess.
What about women? Whisky is a pretty masculine drink, so do they
drink whisky?
- Of course there are women who drink whisky, but far less than
men. Assume that only 5% of them drink it regularly.
Ok. Well, one last question: I know that the population distribution in
India probably looks more like a pyramid than in Western societies.
There are a lot of young people in India and relatively little elderly. Is it
fair to assume that people live to an average age of 60 and that the
population is distributed evenly among age groups for ease of
calculation?
- You are making it easy on yourself, but go ahead. Lets start
calculating, shall we?
Sure, could I take a minute to structure my calculations? Ill walk you
through them afterwards.
Take some time structure your analysis and think up what you
would like to know. On the next page youll find an example
solution. First draw up yours, then compare it to the analysis
below.
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Ok, first I want to determine which part of the population would actually
drink whisky. I assume there are about 1.5 billion people living in India,
and I distribute them evenly among three age groups: 0 to 20 year olds,
20 to 40 year olds and 40 to 60 year olds. I assume a 50-50 split
between women and men, which leaves me with 250 million men and
250 million women per each group. Lets assume that everyone below
the age of 20 does not drink and if they do, that they cannot afford
whisky, which leaves us with the other two age groups.
Not everyone drinks whisky because of religious reasons, so I subtract
10% from every age group, leaving 225 million men and 225 million
women per age group. Of these 225 million women only 5% actually
drink whisky, so that leaves us with 11.25 million potential whisky
drinkers. Lets round that down to 11 million for ease of calculation.
Age Group
Men
Women
0-20
20-40
225
11
40-60
225
11
Sub Total
450
22
Total:
472
If we count that all up, we have a total of 472 million potential whisky
drinkers. A lot of Indians are poor however and wont be able to afford a
premium brand whisky. Lets say that 5 % of the population is rich
enough to afford drinking our whisky regularly and that another 5% is
able to buy our whisky, but only does so because of the upper class
image attached to drinking our brand and therefore drink it less
regularly. Each of these segments comprise of a total of 23.5 million
Indians.
Im a whisky drinker myself and I sometimes drink a glass in the evening
after a hard day of work and a few glasses if I have friends over for
dinner. Usually, I need to buy a new bottle every two months, so lets
assume that the regular drinkers also buy a bottle every two months
which amounts to 6 bottles a year, while the irregular drinkers buy a
new bottle every six months, which comes down to 2 bottles a year.
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This leads to a total amount of bottles sold yearly of (23.5 x 6 + 23.5 x

2 =) 188 million. Which is a huge amount of bottles. But then again,
India has a huge population, so I guess this number makes sense.
- Very well, but what is the total market size?
Right! I dont quite know what a bottle of whisky goes for in India, since
a large portion of the price is also dependent on government taxes. I
dont know what competitors are charging for their products, but I think
its fair to assume that a premium bottle in India goes for the price of an
average quality bottle here, so lets say $ 20. This would lead to a total
market size of 188 x 20 = $ 3760 million, or $ 3.8 billion.
- That seems to be right. Very well, how about the question of the
client? Should they rebrand their private label and launch it in
India?
Well, the market size does look very interesting indeed... Before I draw
up a structure to analyze this problem, I want to make sure I understand
the way this industry works. Could you please tell me more about the
value chain?
- Sure. Our client produces Scottish whisky, also called Scotch, which
is distilled from grain. After distilling, its left to age in oak barrels
for three years. Afterwards, its bottled and distributed. The bottles
of Scotch are then sold in liquor stores or in bars.
Ok, and what about our Indian customers? You already mentioned that
they drink plenty of distilled alcoholics, why would they be interested in
our Scotch?
- Well, though Indians also produce their own whisky its of lower
quality and its taste is a lot softer than Scotch: more like rum. Only
Scottish whisky can be called Scotch and thus is seen as a more
premium drink than its Indian counterparts.
Aha, very well. Id like to take a minute to draft a structure to analyze
this problem.
Take some time structure your analysis and think up what you
would like to know. On the next page youll find an example
solution. First draw up yours, then compare it to the analysis
below.
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Ok, I have drawn up a structure for my analysis, including areas that I

would like to investigate. My initial hypothesis, based on the market
sizing that we just did, is that our client should proceed with this market
entry, but to confirm that I would like to investigate two areas: external
factors and internal factors. The first thing I would like to investigate are
the external factors, which I have broken down into Competitors and
Market. My sub-hypotheses are that the competitive landscape and the
market are favorable, so lets investigate these two a little further.
Note: its a good habit to state your hypothesis and structure

your analysis up front. This way the interviewer can more easily
follow your approach, especially if you also convey it in a
graphical sense: by turning the paper with your structure
around and pointing towards the areas of analysis.
Lets start with the competitors: do we know who else is selling Scotch
in India? And do we know their market shares?
- Yes we do, there are three other Scotch whiskey brands active in
the market. All of them have about one third of the market.
Aha. I would like to know how easy this market can be penetrated and
check whether one of them entered the market recently, or whether the
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traditional market leader is losing share to the competition. Do we have

any information on how these market shares have changed during the
years?
Note: See how this candidate is thinking out loud? Though he

does not explicitly states a hypothesis, the reason for the
question is clarified by the upfront out loud thinking. Try to
do this yourself, otherwise the interviewer might be thinking
that you are guessing or jumping around without following a
clear structure.
Also, asking for historical data (trends) can reveal important
facts about your subject of analysis. Remember: data without
context is meaningless!
- Actually we dont, but thats a good question. Just assume that they
had the same market share in the past years.
Ok. One final hypothesis regarding the competitors I would like to check
is whether they are currently serving the whole market: since India is so
large I suspect that they arent, which would mean theres demand left
unfulfilled.
- Its true that theres demand unfulfilled, but 90% of demand is
concentrated around the bigger cities which are served by our
competitors.
Thats interesting, as this will also influence our distribution strategy.
Ok, based on this analysis of our competitors Id say that theres plenty
of room for our product: the market for Scotch whiskey is not oversatisfied by a plethora of competitors and secondly theres still demand
left unfulfilled. I would now like to move to the market. We know its
very large, but Id like to make sure Im not missing anything important.
Note: take note of how this candidate closes the analysis of

competitors with a mini-synthesis of the most important
conclusions of the analysis, before moving on to the next
logical step in his structure: the market.
- Very well.
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We know that the market is currently very large, but has it always been
this way? My hypothesis is that its growing because of the increase in
wealth in India, do we have any historical data on that?
- Your hypothesis is spot on: Indians are growing more wealthy and
a larger part of the population is now buying luxury goods,
including premium whisky. This trend is expected to continue.
Aha. And do we know with how much the market has been growing the
last 5 years? With which percentage?
Note: see how the candidate is trying to quantify the

qualitative data he received from the interviewer? The market
is growing could mean a 1% growth rate, but a 30% growth
rate as well.
- Yes we do, the market has been growing steadily with a rate of 6% per
year, in the last five years.
That seems to be a decent growth rate, but not spectacular. Id also like
to investigate whether there are any barriers to entry and whether we
can expect new competitors to enter as well in the coming years. Are
there any other government issues that we need to be aware of? When
we discussed the price of a bottle, I already mentioned government
taxes. What do we know about them?
- They are high... very high. To protect the home-distilled whiskys,
the Indian government is enforcing tariffs of up to 550% on
imported spirits, including Scotch whisky.
Now that is interesting. I assume that there is no way to evade these
taxes, such as producing in India?
- No, since the product wouldnt be Scotch anymore. Im going to
deviate from your question a bit, since were talking about entry
barriers: which methods of market entry are there?
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Note: you can expect the interviewer to intervene in your

analysis at any point, either because they want to help you and
steer you in the right direction (so listen very carefully!) or to
ask a general business question, which is happening above.
As far as I know, there are three ways to enter a market: alone, with a
joint venture or strategic alliance and you could also acquire a local firm
as a third and final option.
- Very well, do you know what the advantages of each method are
with respect to entry and exit of the Indian market? Which would
you recommend?
Well, going at it alone would require significant resources, especially if
we dont have any local market knowledge yet. Since we produce in
Scotland, our Indian operations would all be about distribution and Id
say that its pretty difficult to build a distribution network from the
ground up. It would also be very costly to exit, since most of the
resources invested would be location specific.
The same would be true for an acquisition: high investment costs and
exit costs. But you do gain access to local knowledge and existing
distribution networks. There could be difficulty with legislation however:
maybe there are laws in place limiting foreign investment.
A joint venture or strategic alliance would mean sharing a portion of the
profits, but youd get access to local market knowledge and existing
distribution networks. Its also relatively easy to exit a joint venture,
easier than the other two options at least. Therefore I would choose for
this option, if we decide that India is indeed an interesting market.
- Good! In the actual project we did for the client, this was also the
option we recommended to them. Go ahead and assume that they
choose for a joint venture.
Ok. Well, it seems like the market also looks favorable: we know that its
very large and growing and that we can enter it rather easily through a
joint venture, which also reduces potential exit costs. Theres one point
that worries me though: the trade tariffs. However, we are aiming at
customers that are pretty price insensitive: the high price we are forced
to charge might actually improve the exclusivity of our brand. Which
brings me to the next area of analysis: our customers. I would really like
to understand who our customers are, how they can be segmented and
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what their wishes are. But lets first start with identifying who they are:
do we have any information on that?
- Our direct customers are liquor stores and the hospitality industry:
bars, restaurants and clubs.
And do they have special requirements in India that we do not know
about, or other special demands nobody is fulfilling yet? Something on
which we can differentiate ourselves?
- Not really.
Hmm. I think it would be more interesting to delve a little deeper and
figure out who the end customers are and find out what their wishes
are. Do we have information on that?
Note: one of the most difficult things is knowing when to stop

drilling down your framework or when to stop segmenting. On
one hand, you might miss important information. On the other
hand: thorough analysis costs time, of which you have
preciously little.
Try to apply the 80/20 rule: do I know the three to five most
important drivers for this factor? If you do: then you can safely
conclude that there was indeed nothing to be found in this
branch of your analysis. If you dont: dig deeper. Use the
questions in the Business Case chapter to guide your questions.
They cover the most important factors, in most cases.
- The situation is actually very much like the one you described in
your market sizing: we have customers buying Scotch because they
belong to the elite and customers buying Scotch because theyd
like to belong to the elite. They are pretty price insensitive, but
they want a quality product in return: they wont settle for the
Indian rum. As Ive said, they are concentrated around cities, where
the younger generations consume Scotch in bars and pubs and the
older generations drink at home, buying their Scotch in local liquor
stores.
Ok, and do we know how many of these potential customers belong to
each segment?
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- Currently 70 % of Scotch drinkers is from the older generation, but

the younger segment is growing more rapidly.
Very well. I think I can conclude that with regard to our potential
customers things are looking good: they are concentrated around easy
to supply locations and rather price insensitive. Theres an interesting
shift in customer base however, with a growing younger segment that
prefers to drink Scotch in bars and clubs. Before I can give a final
recommendation however, Id like to investigate our client a little closer.
My hypothesis is that we have the resources to distribute our Scotch in
India, both on a financial and operational level. Finally, Id like to see if
we can set ourselves apart from the competition in some way.
- I can tell you that financially, there wont be a problem as our
client has a healthy balance sheet and plenty of opportunities to
attract sufficient resources. But distribution is a potential problem.
What do you think is the most expensive part in the distribution
process?
Let me think... I would say the bottling and subsequent distribution of
the bottles. It would be expensive to bottle our whisky in Scotland and
send those to India. Local bottling would be more cost-efficient. Is local
bottling a possibility or is this bottling process the problem we are
looking for?
- It is, but you identified one of the main issues. What if I told you
that our current yearly capacity is 1 million bottles?
Aha! Well, obviously that will be the bottleneck to conquering the Indian
market. Theres no way we can supply more than a tiny sliver of the
demand at this rate.
- Indeed. So if they want to increase supply, how should they
proceed?
I know that there are two ways of growth: organic and an-organic. They
could expand their distillery or acquire another Scottish distillery and
bottle their whisky. Because of the costs associated with acquisition, I
lean towards organic growth.
- Theres a problem with that however: after distilling, whisky is left
to age for at least three years. Higher quality whisky is aged for
nine, twelve or even fifteen years. Which is why we advised them to
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acquire another distillery... Ok, the clients CEO is coming in one

minute, what would you advise him?
Ok, let me think a minute here.
Note: a good synthesis is difficult and something even

experienced consultants struggle with. Take your time! Go
through the most important conclusions from every branch in
your analysis and formulate an actionable conclusion, with the
mini conclusions as support.
Our client should rebrand its private label whisky and sell it in India
through a joint venture with a local distributor for three reasons.
First of all, we risk hurting our current premium label and the image of
our firm if we keep selling private label whisky in our home markets.
Since Scotch whisky is seen as premium per definition in India, we can
safely rebrand our private label and sell it India.
Secondly, the Indian markets potential is huge and growing rapidly.
Theres also little competition and only one major drawback: the trade
tariffs. This drawback is faced both by us and any other Scotch whiskey
so no-one has an advantage there.
And finally, we need local market knowledge to distribute our product
efficiently. A partnership with a local distributor will serve both these
ends and allows us to back out of the Indian market with relatively low
exit costs compared to other entry methods.
- Thank you very much.
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Coffee shop
Youre being offered the chance to start a coffee joint in a busy subway
station in Berlin, in the business district. About 20,000 commuters work
in the area. You would need to invest ! 150,000 to get the place up and
running. Would you do it?
Thats interesting. So theres the opportunity to invest in a coffee
business and I need to figure out whether its a good investment?
- Yes.
Before I start, I think I would like to understand some more about our
business and especially its location and size: are we above the ground
with large sitting area or more the take-away business inside the subway
station itself?
Note: Its always wise to step into the shoes of the client (in
this case: you) and picture the situation as vividly as possible.
Try to imagine the location, the clients, potential problems.
What questions do you need answered before you can proceed?
- Good question. Its a small lot at the central plaza under the
ground: everyone passes this area going in or out. Theres a small
kitchen and a large counter at the front-end. Next to the door is
room for two standing tables. The total size is about 16m2.
Aha, looks like were going to be focusing on the take-away business.
Do we know how many of the 20,000 commuters take the subway?
Some will use their own cars or other public transportation to go to
work I suppose.
- Thats true. Assume that 10,000 people per day commute to work
through the subway. You can forget about the other 10,000.
Ok. Well, to know whether this is a solid investment, I would like to
know if we can make a profit with this business. Could I take a minute
to draw up a structure for my analysis?
Note: Take some time to formulate your own structure and
note the areas you would like to investigate. Turn the page for
an example structure.
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Ok, so the hypothesis Id like to test is the hypothesis that we can make
a healthy profit. I know that profit can be broken down into revenue and
costs. To make a profit, revenues need to exceed the costs. I want to
turn to the costs first, since I think that they can be determined more
reliably than revenues: for which well be forced to make a lot of
assumptions. As you can see, Ive determined a few factors influencing
cost, and I would like to ask you whether we have more information
about them. The factors influencing costs are split between fixed costs
such as labor, rent, utilities and interest and the variable costs, which
Ive split between the costs for drinks and food. I would like to start with
the fixed costs first. Do we know how much the rent is?
- As a matter of fact, we do: rent is about ! 500 per square meter per
month, which includes expenses for utilities.
Aha, well we know what the size of our shop was 16 square meter,
which comes down to yearly costs of 12 x 16 x 500 = ! 96,000, so lets
fill that in.
- Very well.
That leaves us with both labor and interest. On interest, I assume we
need to lend the 150,000 investment from investors or the bank, and
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lets assume that we lend it for an interest rate of 10%. That would add a
yearly cost of ! 15,000. Now on to labor. I believe well need at least
two employees: one who makes sandwiches and special coffees and
another who stands behind the counter. Its a traditional students job,
so lets assume they earn as much as I did on my last job, which was !
10,- per hour. As an employer, you have additional costs such as taxes,
insurances, pension funds and whatnot, so lets add 50% to that hourly
wage to determine costs for the employer. Lets say were open 10
hours a day.
- What makes you think so?
Since many commuters commute early, we also want to open early, say
seven o clock and close at a normal time, such as five in the evening.
That makes ten hours a day.
- Ok.
With 2 students costing us ! 15,- per hour, the total cost for labor will
be ! 300,- per day. We wont be open during the weekends, as there
wont be a lot of commuters then, just as during the christmas holidays.
So lets assume were open five days a week for 50 weeks. That would
make a labor cost of 5 x 50 x 300 = ! 75,000.
- Are you sure that your calculations of these fixed costs are
correct?
Note: The interviewer can and will put your assumptions and
calculations to the test, even if they are right. Dont act
offended, check your calculations and reject his doubts in a
friendly, calm and confident manner.
Hmm, let me check. Yes, I do think so. I dont think Ive missed
anything.
- Very well, proceed.
Ok, so, total fixed costs are then 96,000 + 15,000 + 75,000 = !
186,000 per year. Thats quite a lot of coffee we need to sell... So to
determine we can realistically sell enough coffee and sandwiches to
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cover these costs, lets look at the variable costs and the contribution
margin of our products.
- That sounds interesting, could you explain your approach?
Sure. Instead of making an assumption on our volume of sales and
associated revenues and variable costs, Ill subtract the variable costs
from our sales price to determine contribution margin. In this way, I can
calculate how much sales we need to break even.
Note: If you use business terms, be prepared to explain them.

You dont want to be caught using a term that you dont fully
grasp. If you dont happen to know a term the interviewer uses
because you have a non-business background, just ask.
- Ok, looks good. Lets just focus on coffee for a second: how many
cups of coffee would you have to sell to break even?
Hmm. Well, first I would like to determine the contribution margin and I
need both a price and variable cost for that. Lets assume that we sell
our cups of coffee for ! 2,-. Since coffee is just boiled water and coffee,
variable costs are quite low, lets say 10% or ! 0,20. That would mean a
contribution margin of ! 1,80 per cup. To break even, we would need to
sell about 100,000 cups of coffee a year. This seems doable, but lets
look at how many cups that are per hour.
Note: Its very good to do this reality check on your own

initiative and a great way to score points with the interviewer.
If you cant quite grasp wether 100,000 cups per year (or
30,000 patients, or 50 custom made cars, or whatever) is
realistic or not, bring it back to a number that you can get your
head around. So the amount of cups per day, patients per night
or how many days per custom car, etc.
100,000 cups per year comes down to 100,000 / 360 = 277 cups per
day, and with 10 open hours a day, that would be 28 cups per hour.
About 1 cup every two minutes. It should be possible for two persons to
deal with 1 customer every two minutes, even if you sold more complex
coffees such as cappuccino's and lattes. But it would be difficult to
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keep the store filled at a 1 customer per two minute rate, especially
during down times such as between nine o clock and lunch.
- Ok, well lets assume that if you sold specialty coffees and
sandwiches, the market size would be no constraint. What other
areas would you investigate to determine whether this investment
is a good idea?
Let me think about that for a second.
- Sure.
Note: As in the previous case, take some time to brainstorm

about your structure and the questions you would like
answered before you would make this investment decision. An
example structure is supplied on the next page.
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As you can see, I have two main areas that I want to explore. First the
competition, as I believe that we wont be the only ones selling coffee in
the area. I would like to know how many competitors there are and who
they are: small stores such as ours or major chains such as Starbucks
and what their market share is. Secondly, I want to explore how we are
going to position ourselves in this market and how we are going to
differentiate ourselves, based on the wishes of our customers, our
products and services and company specific things such as our brand
name and location of the store.
Note: The proposed structure is very hypothesis-driven, even
though they were not explicitly stated as such by the
candidate. Its an example on how you should let your
framework adapt to the case, and not the other way around. If
you look closely, you can still identify parts of the business
case framework.
- Ok, were running out of time here: so Id like you to report on your
findings and decide on whether youd invest or not.
Sure. Could I take a minute to gather my thoughts?
- No problem.
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Note: Again, take some time to formulate a synthesis on your

own, then go ahead and read the example synthesis.
Remember: theres not really a good or bad answer per se, its
about how you come to your answer and how well you support
you conclusion.
Personally, I would not invest ! 150,000 in this coffee shop, for three
main reasons:
First of all, its unclear whether we can attain the necessary volume in
coffee and sandwiches to cover our costs, let alone gain a profit. The
main concern here is whether we can service enough customers during
peak times to attain enough revenue.
Second of all, competition is likely to be fierce. We would not only be
competing against cafs and lunchrooms which are bound to be found
in this business district, but also against supermarkets and kiosks that
already have a coffee/snack take away service. I doubt we stand a
chance against these entrenched competitors.
And finally, we dont know how we can differentiate ourselves from the
competition. How do we position ourselves? Do we focus on low costs,
or on high service? Is there a niche to be found for commuters that need
a quick caffeine fix on their way to work, or is there no demand for
coffee shops like ours?
- Ok, thank you very much.
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Brazimao
Our next client is a mail order company from Brazil. They traditionally
sold clothing, all through those typical thick catalogues. Nowadays,
internet sales account for an increasing percentage of revenue. Ten
years ago the company differentiated into the furniture and home
accessories market, selling these items through their traditional
catalogues and website. In the last 3 years profit has been hurting and
the CEO of Brazimao has asked us for advice.
Interesting... So if I understand correctly, our client Brazimao is a mail

order company that sells both clothing and furniture through a
catalogue and a website. The CEO hired us because profits have fallen
and asked us for advice. Do we need to come up with
recommendations? Or is there a specific goal in profits we need to
reach?
Note: The question is not quite clear: what does the CEO want
you to do? Increase revenue? Reduce costs? Increase profits?
By how much? Try to get the question clear, otherwise youll
find yourself solving the wrong case. If possible, try to get a
quantifiable goal, such as we need to increase profits by $ 10
million.
- Ah, yes, I was a bit unclear on that. The CEO wants to reach profits
of $ 15 million in three years.
Ok, so our goal is to increase profits to $ 15 million a year. Well, before
I start with my analysis, I would like to ask some questions first.
- Thats ok, but let me start with a question for you. Id like you to
estimate the size of the home shopping market in Brazil, if thats
possible.
So you want me to estimate the Brazilian home shopping market? Sure,
but before I start with my estimation, I have some questions.
Take some time to think up and write down three questions

you would like to have answered before taking a look on the
following page with example questions and answers. Do so
now.
112
You asked me to size the home shopping market, does that include
both catalogues, websites and those TV shows?
- Yes.
Ok, how different is the home shopping market in Brazil from the US?
Are there any cultural differences that I should be aware off?
- Well, Brazilians used to be quite wary of these commercial home
shopping channels and catalogues, preferring to shop in brick and
mortar stores. This distrust is waning and people are seeing the
advantages of home shopping more and more.
Interesting. One more question, do all Brazilians have access to home
shopping channels, such as the catalogues, the TV-shows and the
internet?
- What do you think?
Note: If the interviewer returns the question, its a sign that

you went too far and have either asked too many sweeping
questions and that its time to move on, or because he or she
believes that your question could (and should) be answered by
you, without help from the interviewer.
Well, I dont think so: not everyone has access to TV, let alone internet.
And I dont think that these companies deliver deep in the jungle, so I
guess the answer is no.
- Thats correct.
Well, I would like to take a minute to think about my analysis of the
Brazilian home shopping market and draw a structure. Could I?
- Go ahead.
Take some time to think up and write down a structure of
analysis of your own and compare it with the example on the
next page.
113
Ok, I will use the number of households here as a reference, since even
though we buy clothing on an individual basis, most furniture and home
accessories are bought per household. I assume that Brazil has about
200 million inhabitants, and that the average Brazilian household has
four members, which brings us to 50 million households. We already
assumed that not everyone in Brazil has access to our sales channels,
because of where they live and how much they earn: not everyone in
114
Brazil can afford a TV or internet connection. Ive heard about the

favelas and how poor most of the Brazilians are, even though the
economy is growing rapidly and welfare is improving. I therefore assume
that about 50% of households are reached through our channels, which
is 25 million.
- Ok. Dont you think thats a little low?
Well, I think a lot of people know we exist and what we do, but to
actually make a purchase you will not only need access to the catalogue,
website or TV channel, but also a phone to make your purchase, a bank
account and probably an address too. Because you need all these things
and not everyone in Brazil, especially the inhabitants of the favelas, has
all three, I came to 50%. But I guess youre right that its on the low
hand, so lets make it 60% and 30 million households, is that ok?
Note: Be prepared to defend your estimations and use the

reference points you considered while estimating as
arguments. Dont be defensive, but on the other hand, dont
stubbornly stick to your answer as well: be flexible.
- Very well, go ahead.

Ok. Well, even the households that have access to these channels might
choose not to use them. As you said, Brazilians historically preferred
brick and mortar stores. I myself refrain from buying online unless its
absolutely necessary and I know more people that enjoy the service of
real stores. Lets say that 50% of these 30 million households prefer
traditional stores, while the other 15 million use home shopping
regularly.
As you can see, I assume that of these home shoppers, not everyone
buys equal amounts through these channels. Some only buy clothing
and other small purchases, while others buy couches and complete
wardrobes online. So lets divide this group into 2, with one group of
high frequency users and one with low frequency users, with 1 high
frequency user for every 4 low frequency buyers.
I assume that a high frequency shopper buys an amount of goods equal
to $ 25 per month on average, while the low frequency buyer buys for
only $ 5 dollar per month. That would lead to a total of 3 million x 25 x
115
12 = $ 900 million total per year for the high frequency shoppers and
12 million x 5 x 12 = 720 million total per year for the low frequency
shoppers. This leads to a total market size of the home shopping
market of $ 1.62 billion.
- Ok, what if I told you that this is way too low, could you identify
one assumption in your analysis that might have caused this?
Note: Unfortunately, you cannot always be right and sometimes
even be far off. The candidate could have done well with a
reality check here, but thats too late now. The question of the
interviewer is to check whether you have insight in what the
most important drivers are in your calculation
Well, probably my assumption on what people buy via home shopping

channels on average is way too low. Maybe high frequency buyers spend
twice as much on a monthly basis... but especially the low frequency
average is low: 5 dollars per month is one pair of jeans per year.
- Ok, thanks for your calculation. Lets head back to the main
question: how can Brazimao increase its profits to $ 15 million
annually?
Ah, yes. Well, let me think. I would like to answer some clarifying
questions first, to get a better picture of this company and the industry.
Is that alright?
- No problem, go ahead.
Take some time to think up and write down two to three

questions you would like to have answered before taking a look
on the following page with example questions and answers. Do
so now.
116
Ok, first of all, I would like to have a better picture of how this company
creates value for its customers and try to understand the value chain.
Could you tell me some more about that?
- Sure. Because we buy in volume from suppliers, we can keep
purchase prices low. We store these items in our distribution
centers, where they are shipped as soon as a buyer orders
something by mail, phone or website. We deliver the goods and
then collect payment from the customer.
Interesting. And are there any special things I need to worry about in the
Brazilian market? Do we have distribution problems because of bad
infrastructure or do our customers have special wishes? Is there
government legislation regulating the market, or maybe state-owned
companies?
- None of the above. The only interesting difference between Brazil
and the US is that the wages are lower and that we have slightly
higher administrative costs because our client has not invested
much in IT yet, resulting in a lot of paperwork.
Hmm. Ok, with your permission Id like to draft a structure of my
analysis after which Ill walk you through it step-by-step.
- Sure.

next page.
117
So we know that profitability is hurting, so I want to start with the

profitability framework and look at both components of profit: revenue
and costs. We know that our goal is to get profits to $ 15 million in one
year. Before we start however, do we have any information on profits:
are we making profit at this moment and how did it change over the
year?
- Sure. We know that profit is $ 10 million at this moment and was $
13 million three years ago.
Aha. My first hypothesis is that the drop in profits is due a lower
revenue and that we need to increase revenue to increase profits. As you
can see, I know that revenue consists of two components: sales and
price. Do we know how revenue changed and wether sales and prices
have changed?
- Well, revenue has indeed changed: three years ago we had a
revenue of $ 26 million, this has grown to $ 38 million now. I dont
have specific information on prices, but sales have obviously
grown.
Sounds like revenue is not the problem then, I want to adjust my
hypothesis accordingly and look at costs. Since we know profits and
revenues, we can calculate costs: they must have gone up from $ 13
million to $ 28 million, is that correct?
- Thats correct.
118
Note: Being pro-active and making this calculation yourself

shows you have insight in the mechanics you are applying and
not passively waiting for information from the interviewer. A
good thing to do during your case interviews.
We have an interesting situation: revenue increased about 50% with $ 12

million while costs doubled in the same time, increasing with $ 14
million. I want to understand this development, do we have any
information on the components I wrote down here: fixed and variable
costs?
- Yes, we do. Variable costs per unit increased slightly over the
years, because of higher prices for cotton and other resources. We
only have data from the total variable costs: it went from $ 9
million to $ 18.5. Fixed costs also rose, going from $ 4 million to $
9.5 million.
Hmm. I dont really see anything odd in that. I mean, it still puzzles me
that costs rose faster than revenues, but I cant see any reason why. Am
I missing something?
- Actually, you did. Let me help you...
Note: The candidate made a mistake here and as a result got

stuck. What did he do wrong? What questions should he have
asked or what framework should he have used?
Take a moment to read the business case part again and think
about what you would have done differently. Then look below
to the solution.
So what did I do wrong?

- First of all, you got stuck into a cookie-cutter framework and was
too focused on the basic components, instead of adapting it to the
case or allowing me to help you. For example, you asked me about
sales and price and found nothing interesting. Afterwards, you
moved on to costs. But if you had asked me a more general
question, such as I want to break down revenue into its
119
component parts, do we have more information on that? I could

have given you the optimal revenue segmentation.
And what would that be?
- In this case, revenues are segmented into the two divisions of
Brazimao: clothing and furniture. You would have learned that
revenue from the clothing division was flat at $ 20 million, while
furniture rose from $ 6 million to $ 18 million.
Thats interesting: if we found out why revenues from clothing arent
rising, we might have been able to remove some barriers to its growth.
And furniture tripled in revenue from $ 6 million to $ 18 million, I would
like to know why.
- True, well come back to that. At the cost side, you did exactly the
same thing: blindly following the framework and focusing on
fixed and variable costs, while again, costs by division would have
been more insightful.
I guess. Any more?
- Yes, you could have asked how the competition and the market
was doing. If everyone is facing problems, maybe our company is
not at fault, its the industry thats facing problems.
Ok, can I still move on?
Note: This was just to point out the errors of the candidate. A
real interviewer would have tried to nudge you in the right
direction, without giving all information away like this.
If you ever get stuck: be honest. Say so. Explain your line of
reasoning to that point and ask for help. Nothing is worse than
a panicked candidate that jumps from idea to idea without
following a structure, hoping to gather bits and pieces of info
to crack the case based on luck.
Interviewers are looking for repeatability, not luck. Honesty,
not denial. Admitting youre stuck might still mean the end of
the interview process, dancing around randomly is the end for
sure.
120
- Ok, below youll find Brazimaos Revenues and Costs from 2009
and 2012. Please tell me what you see.
Cost
2009
(var/
fixed)
Cost
2011
(var/
fixed)
20
6 / 2.5
9.5 / 2.5
18
3 / 1.5
9/7
9/4
18.5 / 9.5
13
28
In million
$
Revenue
Revenue
2009
2012
Clothing
20
Furniture
Subtotal
Total
26
38
Ok, based on the table you gave me, I conclude three things. First, on
the revenue side, I see that clothing remained flat while furniture
increased three-fold. As I said before, Id like to investigate why revenue
from clothing is flat and why furniture increased so drastically. Do we
know what their respective markets did?
Note: Comparing revenue trends from the client with the
market can be very insightful and is highly recommended. If the
companys revenue shrunk while the market grew, something is
going wrong. When revenue is down and the markets are down,
maybe we should look for other markets, instead of focusing
on this one.
Try to make it a habit when you get this kind of information.
- Good question. Both the mail-order clothing market and the market
for furniture grew rapidly.
Interesting. Ok, Ill keep that in mind. On the cost side I see that
clothing variable cost increased more than 50% and I would like to know
why. And finally, I see an even more drastic rise in the fixed costs for
furniture, which increased five-fold in three years. Again Id like to
understand the reasons for this.
121
- First of all, clothing variable cost is caused by increased costs for

cotton, a commodity which increased substantially in price the last
year.
Hmm, seems as it will be difficult to cut costs there, since other
suppliers will also have increased prices because of the increased cotton
price, or am I mistaken?
- No, youre spot on. Every clothing manufacturer raised prices in the
last few months. Moving on to fixed costs for furniture: we only
recently launched a furniture line, but as you can see it has had
rapid success. High marketing costs arose because of higher
competition, who are responding to our entry. We recently decided
to invest heavily in sufficient warehousing to keep offering our
excellent customer service and delivery times: we keep a lot of
units on stock to be able to send them out directly. We also offer
mass-customization: customers can adapt a few features on their
new couch, choosing between five different sofa legs.
Ok, so weve seen that revenue from clothing was flat, but that furniture
increased threefold. This also led to an increase in warehousing and
marketing costs, because we had to invest to stay competitive. My
hypothesis is that we can need both an increase in revenue from
clothing and reduce costs at the furniture division at the same time to
reach our ambitious goal of $ 15 million in profit. But before I can give
specific advice on how our client should proceed I would like to analyze
the current situation some more.
Note: The candidate is switching to a new framework. When

you switch, its often a good idea to make a mini-conclusion
about what youve learned during the analysis from the
previous framework and follow-up with a new hypothesis to be
tested with the new framework.
As you can see above, the candidate did just that.
next page.
122
123
Ok, I first want to focus on the matter of cost reduction at the furniture
division. You mentioned that they can offer fast delivery because they
keep a stock of every item in their warehouses and offer customization
to customers. Both seem like costly affairs and I want to know whether
customers are really looking for these services we offer. So my
hypothesis is that customers are being offered more services than they
actually want. But lets first investigate our furniture customers, do we
have information on customer segments? What do they want?
- We have a recent customer survey that asked customers why they
ordered at our client. Many choose us because of our fast delivery
times and customization options.
Aha, and do you have any actual percentages on these two segments?
And why did other customers choose us?
Note: Its a good habit to quantify the information you get,
otherwise you dont know how many many, a lot, plenty
etc. is.
Also: the candidate checked whether the interviewers answer
really answered his question: It did not. He still only knows
about two segment: those that want quick delivery and those
that want customization (and maybe both).
- Good question. Lets say that 40% of our customers specifically

choose us because of delivery times and 40% choose us because of
our customization options. The remaining 20% choose us for a
variety of reasons, such as a product only we offer, impulse
buying, etc.
Ok. Seems as that the extra services we offer to our customers are
necessary to keep them: they dont just cost us more but bring in
substantial extra value as well. Im gonna conclude that my first
hypothesis was wrong: we cant cut costs in the furniture division by
offering slower delivery and less customization. I want to investigate the
clothing division and understand why its revenue has been flat even
though its market grew, while trying to figure out how we can improve
its revenue. I want to start with the external factors, as I believe our
competitors have something to do in this: do we have information on
who our competitors are, what their markets shares are?
124
- Yes, we do. We have three main competitors with whom we share

80% of the market, and a few smaller ones.
Aha. And have there been any changes in the competitive landscape the
last few years? Any reason for why we have been losing market share?
- Yes, one of these three main competitors is a hip store chain that
used to focus on brick and mortar stores, but launched an online
store five years ago. It has been growing rapidly and stealing
market share from the traditional catalogue players, like our client.
Interesting! Ok, seems as we know why weve been losing market share.
I now want to look at how we can improve our position, what we can do
to get more revenues and attain the clients $ 15 million profit goal. I
want to look at our clothing customers, our products and our company
and see where we can improve. Lets start with customers: my
hypothesis is that they are switching to this new competitor, and I want
to know why. Do we have information on existing customer segments,
what their wishes are and who shops with us?
- Yes we do. There are three main segments: older women, young
women and men. Older women go for traditional brands and looks,
whereas young women are more fashion conscious. Men dont
shop much, but are very loyal to the places they shop and dont
switch often. We are very strong in the older women brands and
we have a substantial market share in the men segment. Were
lacking in the younger women market: the new entrant is very
appealing to them.
Aha. My hypothesis is that these younger markets are also responsible
for the growth in online retailing, am I correct?
- Brazil has a young generation with a growing clothing budget, yes.
Ok, interesting. I think we are not fashionable enough for this new
generation of shoppers, which is why they are shopping at the new
entrant. I would like to investigate whether we can attract these fashionconscious shoppers, and if so how.
- Lets brainstorm about that for a little, how would you do that?
Do this yourself, think up three options before looking at the
solution on the next page.
125
Ok, let me think about that for a minute.

- Sure.
Note: Brainstorm in brackets, asking for a minute to think

anywhere during the interview (to brainstorm, to come up with
your structure, etc.) is no problem at all.
Ok, there are three possibilities they should consider. First of all, they
could refocus their current brand to appeal a younger audience. This
brings significant risks, however: losing their current customer base,
failing to appeal that younger audience and it will cost a significant
amount of money. A second option would be to launch a new brand,
independent from the current clothing lines. This does not endanger the
current image with our current customers, but itll be difficult to make
this completely new brand a success. A third option might be to acquire
one of the smaller competitors that is appealing to youth, but lacking
the resources to grow. This way, the risk of failure is lower: the brand
has proven itself. The costs of acquisition are probably higher than
going at it alone.
- Very well. Assume that the CEO of Brazimao is on her way to catch
a flight and asked you to brief her on the state of your analysis,
could you give a synthesis of your analysis thus far?
Sure. Let me think about that for a minute.
- No problem.
Note: Again, take some time to formulate a synthesis on your

own, then go ahead and read the example synthesis on the next
page.
126
Ok. I think its possible for Brazimao to get their profit to $ 15 million
by acquiring a small but fashionable competitor, but not in one year. I
think this for three reasons:
First of all, acquiring a fashionable label does not risk losing the current
customer segments because they cannot identify themselves with the
brand anymore and is less risky and quicker than going at it alone with
a new brand.
Secondly, they can use this acquisition to tap into the growing segment
of fashion-conscious young women, using Brazimaos resources to
accelerate the growth of the acquired label.
Finally, this will not be sufficient to get them to $ 15 million in profits in
one year, as I assume the acquired company will not be making a $ 5
million profit in year one. But this goal should be realistic in 3 to 5
years.
- Ok thanks. But what about the growth from the furniture division
and its impact on profit?
Ah. I forgot about those... Furniture revenue rises with an average of $6
million in the last two years and has a 50% profit margin. Fixed costs
will only increase slightly because we already invested a lot in the last
few years to prepare for the coming growth. Lets say growth in the
furniture division increases profit by $2 million in the next year, which
means my solution only needs to bring in $3 million, which will still be
difficult I believe.
- Well, thank you very much.
This candidate made some errors, but it was a difficult case and
he recovered quickly if he made errors. He would have made for
an average/good candidate, but this was not a top performance
setting him apart from the other candidates.
Making mistakes during your interview is unavoidable, so if you
make them, remain flexible and dont react defensively. Correct
your approach and continue cracking the case.
127
128
Brainteasers
To my knowledge, brainteasers are not often employed in consulting
interviews: they are more an investment banking or IT thing. In this
chapter we will show you how to approach a brainteaser and we will give
some examples, so you are better prepared if you happen to encounter
one after all.
Brainteaser approach
The approach to a brainteaser is somewhat similar to the approach of a
business case. Its not the answer that is important, but the thought
process (though coming to the right answer helps).
Think out loud
Always think out loud and try to turn the interview into a conversation.
Not only does it give the interviewer an insight into your approach,
conversation also takes the edge off the interview.
Structure your approach
As with case interviews, the interviewer is trying to gain insight into your
problem-solving approach. Break down a problem into different parts,
based on your hypotheses, and try to solve each part seperately.
Consider the following question:
Why are man-hole covers round?
You could structure your approach around the difference between
square and round covers and identify advantages of round man-hole
covers in three different areas: transportation (one man can roll a round
cover), installation (you dont have to rotate a round cover to fit the
corners in) and safety (round covers cant fall down the hole).
Brainteaser examples
These are examples of questions actually asked in investment banking
and IT job interviews. We will answer them later on in this chapter.
Two Jugs
You have a five gallon jug and a three gallon jug and you must obtain
exactly four gallons of water. How?
129
Fuses
You have two fuses which will each take an hour to burn completely
when lit. However, the fuses do not burn evenly along their respective
lengths. So if they are lit and are half burned, you cannot assume that
30 minutes has passed. How do you use the fuses to time 45 minutes?
Blindfold
You are blindfolded and sit in front of a table. On the table are many
coins, 10 of which have heads facing up. How do you split the group of
coins into two groups such that the same number of coins are heads-up
in each group? You dont know how many coins there are and you cant
tell which side is facing up in any way.
U2 on a bridge
The four members of U2 (Bono, the Edge, Larry and Adam) need to get
across a narrow bridge to play a concert. Since it's dark, a flashlight is
required to cross, but the band has only one flashlight, and only two
people can cross the bridge at a time. (This is not to say, of course, that
if one of the members of the band has crossed the bridge, he can't
come back by himself with the flashlight.) Adam takes only a minute to
get across, Larry takes two minutes, the Edge takes five minutes, and
slowpoke Bono takes 10 minutes. A pair can only go as fast as the
slowest member. They have 17 minutes to get across. How should they
do it?
Socks
If you have seven white socks and nine black socks in a drawer, how
many do you have to pull out blindly to ensure you have a matching
pair?
Light switches
You are in a room with three light switches on the wall. In a room down
the hallway there are three lights. Each of the switches in your room
controls one of these lights, but you dont know which switch controls
which light. You can only go into the room with the lights once. How do
you work out which switch corresponds to which light?
Clocks
You look at the clock and the time is 3:15. What is the angle between
the hour hand and the minute hand?
130
Brainteaser solutions
Two Jugs
There are actually two solutions to this question, but they both share
the same rationale:
1: Fill the three-gallon jug with water and pour it into the five-gallon jug.
Repeat. Because you can only put two more gallons into the five-gallon
jug, one gallon will be left over in the three-gallon jug. Empty out the
five-gallon jug and pour in the one gallon. Now just fill the three-gallon
jug again and pour it into the five-gallon jug.
2: Fill the five-gallon jug with water and use it to fill the three-gallon jug.
When full, empty the three-gallon jug an pour the remaining two gallons
from the five-gallon jug into the three gallon jug. Refill the five-gallon
jug and use it to fill the three-gallon jug. Ta-da, you now have a full
three gallon jug and a five-gallon jug with four gallons of water.
Fuses
The key here is to know that if a fuse takes 1 hour to burn when lit from
one end, it will take 30 minutes to burn when lit from both ends, even
though it burns unevenly."So if we light one fuse from both ends it will
burn in 30 minutes."At the same time we light the other fuse from one
end.
30 minutes later the first fuse is completely burned and the second fuse
has 30 minutes of burn time left in it. When that happens, we
immediately light the other end of the second fuse."The second fuse will
be completely burned out 15 minutes later which means it was 45
minutes in total.
Blindfold
The answer to this brainteaser is rather simple:
1. Separate 10 of the coins from the group and put them to one side. It
doesnt matter which 10.
2. Turn all of the coins in the group of 10 on to their opposite sides.
Done! Dont believe it?
131
Lets say there are 100 coins and we separate 10 of them. Now we have
a group of 10 and a group of 90. Lets say that there are 2 heads in the
group of 10. Then there will be 8 heads in the group of 90.
Total
10
90
Heads
Tail
92
Now we turn over all the coins in the group of 10.
Total
10
90
Heads
Tail
92
Ta-da! 8 heads in each group. The key is that if you are told that 10 of
the coins are heads up, you need to separate 10 coins from the main
group." No matter what numbers you use the result will always be the
same.
U2 on a bridge
The key to attacking this question is to understand that Bono and the
Edge are major liabilities and must be grouped together. In other words,
if you sent them across separately, you'd already be using 15 minutes.
This won't do. What does this mean? That Bono and the Edge must go
across together. But they can not be the first pair (or one of them will
have to transport the flashlight back).
Instead, you send Larry and Adam over first, taking two minutes. Adam
comes back, taking another minute, for a total of three minutes. Bono
and the Edge then go over, taking 10 minutes, and bringing the total to
13. Larry comes back, taking another two minutes, for a total of 15.
Adam and Larry go back over, bringing the total time to 17 minutes.
Socks
Not all of them are hard. The answer is three: even if you pull out two
different socks in the first two pulls, the third will give you either a
second white or a second black sock.
Light switches
In order to solve this problem you need to consider the real-world
characteristics of light bulbs. What happens when you turn a light on?
132
What happens when you keep a light bulb on for a few minutes or more?
What happens when you turn it off again?
A bulb will light almost immediately and after a while, it will heat up. It
will be warm enough that you can feel the heat by holding your hand
close to it. When you turn the light off, it stays warm and slowly cools.
To solve this brainteaser, you turn on one of the lights and keep it on
for say, 10 minutes. You turn it off and then turn on another light. Now
you go into the other room. The light that is off and warm corresponds
to the first switch. The light that is on is controlled by the second switch
and the light that is off is controlled by the third switch.
Clocks
In this brainteaser it is important to visualize the clock - the hour hand,
remember, moves as well. Every minute on the clock represents 6
degrees (360 degrees/60 minutes). Every hour, the hour hand moves
from one number to the next (in this case, it is moving from 3 to 4)
which represents 5 minutes or 30 degrees.
Since it is exactly 1/4 past the hour, the hour hand is 1/4 of the way
into its 30-degree trip or 1/4 or 30 degrees....which is 7.5 degrees.
133
134
Appendix A:
Solutions to the PST-practice case
1. Answer: B. Revenue dropped from just under $ 20 million to just
above $ 5 million. A is false, since revenue was flat between 2007 and
2008. C is wrong, as can be seen in the chart. D is also wrong:
nothing points toward it and there is no way you can support that
answer.
2. Answer: D. Why?
1. Is not relevant, because the CEO is only concerned with the Sawmill
division.
2. Though analysis is always interesting, customers and competitors
have no direct influence on cost. Not relevant.
3. We need the current revenue and profit, since else we wont know
our goal: the CEO wants to regain profitability, but with just the
costs you dont know how much you need to reduce costs to reach
profitability.
4. Again, interesting but not relevant, we are focusing on cost here, not
revenue.
5. Obviously relevant: otherwise you dont know where the costs come
from.
3. Answer: C.
Laying off a part of the workforce (A) directly lowers fixed costs: the
amount paid on wages. Reducing the finished goods inventory (B) can
save money in two ways: (1) warehousing finished goods is costly and
(2) less inventory means less money tied up in your firm, freeing up
resources and reducing (possible) debt burden. Renegotiating prices (D)
directly influences variable costs: the less you pay for materials, the
lower your costs. Even though C (lowering prices) might help increasing
revenue, this is far from certain. Secondly, it does nothing to reduce
costs, the main goal of our CEO.
4. Answer: C.
We need to calculate A:
Price 2005:15,000,000/50,000 = 30
Price 2010: 5,000,000/20,000 = 25
135
Difference = 30 - 25 = 5, which is (5/30)*100% = 16,7 % > 15 %.

Therefore, this statement is true.
Statement B can indeed be concluded from this table: pallet prices in
2005 are (4,000,000/400,000 = ) $10 and remain at that level
throughout 2010.
On C: Even though Sawmill As revenue ($ 15 million) + the Pallet
division revenue ($ 4 million) is $ 19 million, we dont know the revenue
from Sawmill B. Based on this table, we cannot conclude that BePals
revenue is $ 19 million.
To check whether statement D is correct requires the following
calculation: Revenue 2007 (9) - Revenue 2006 (6) = 3, and (3/9)*100% =
33%
5. Answer: A.
First we need to calculate the per unit price in 2009, which was
7,000,000 / 28,000 = $ 25. We know the profit margin (17 %), so the
profit per unit is 0.17*25 = $ 4.25, which is answer A.
6. Answer: A.
The question is a little vague, but you are told that fixed and variable
costs remain the same, while volume drops. This means that fixed costs
are distributed over a smaller number of units sold, which will lower the
profit per unit. A is thus the correct answer.
7. Answer: B.
A. A lot of our competitors are state-owned and would be able to lower
their prices because of the tax cuts. This would force us to lower
prices as well to remain competitive.
B. Restricting woodcutting limits would increase the costs of cutting
wood (forcing woodcutters to travel further to cut wood) and thus
prices of the primary resource for processed wood would increase as
well. This would lead to an increase in processed wood prices.
C. These technological advancements would lead to an increase in
efficiency and processed wood supply, lowering processed wood
prices.
D. If the demand for processed wood decreases because people dont
build wooden houses anymore, prices will be lower with a constant
supply.
136
References
Ohmae, K. (1982), The Mind of the Strategist. Penguin.
Porter, M.E. (1980), Competitive Strategy: techniques for analyzing
industries and competitors. Free Press, New York.
Acknowledgements
This is a big thank you to all who proof-read the first versions of this
book. Without you, this book would not be as good as it is now, without
spelling mistakes and even better geared towards the non-consultant
reader. I thank you.
I thank everyone for their support during the creation of this book. It
wasnt always an easy process. Im proud of what it has become and
hope itll get my readers the thing they want: a job in the strategic
management consultant.
I based this book on my personal experience which includes the many
written sources I read on during my own practice as well as many case
interview coaching sessions I gave to groups and individual students. I
paid special attention that all material in this book is original work by
my hand, but it is unavoidable that some similarities might occur. I tried
to give credit where it is due but if you find something missing the
appropriate references, do not hesitate to contact me at
steve@caseinterviewhq.com.
The material in this book is copyrighted and distribution of this book in
any form is illegal.
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Copyright 2012 by Steve Campbell

Practice PST Case!..............................................................................................49

Business Case Variants: Presentation Case!..............................................................91

How they use your cover letter: the 30 second rule

Five ways to make your cover letter stand out

3. Look for a specific fit

How you should use your cover letter

How to structure the cover letter

We will now look at each of these sections in a little more detail:

The truth on resume formatting

The format that works

Start with education

Writing the perfect consulting resume

Things to avoid in your resume

Before the interview

The typical interview

30-40 minutes for the business case.

The Airport Test

How to best answer interview questions

If asked to explain this bullet, a candidate can answer this question by

Tell me about a time you exhibited leadership

The STAR method:

At my previous employer, I was a coder working at a small

As one of the account managers on the team, it was my task

I took the initiative and asked three candidate locations to

Knowing how much I enjoyed having responsibility as

The product was seen as a great success, even though the

The STAR-method is one of the easiest ways to tell the interviewer

The two skills the interviewer will be looking for

Leadership and Personal Impact Questions

All the questions youll get (and answers too!)

The most popular reasons to choose for consulting:

Since a company presentation in my second year, Ive always

Which firms are you interviewing with?

During my first year at college I had a part-time job at a

What achievement are you most proud of?

2. Bend a weakness into a strength.

Would you say you are creative?

this lifestyle, which is why candidates are rejected because of lack of

I know that consulting requires both soft skills as well as

McKinsey Problem Solving Test

Dont fret, however: the PST is designed to be made by everyone and

During the PST

Skim and underline

bits and pieces of information necessary to answer the question

Other Written Cases

Practice PST Case

BePals Pallet customers are mainly European logistics companies that

industry. Lately, BePal has seen an increase in orders from Russian

BePal Revenue 2005-2010 in million $

4. What cant be concluded from this table?

5. What was the profit per unit for Sawmill A in 2009?

6. In 2010, prices remained the same, but volumes dropped. If Sawmill

See Appendix A for the solutions.

Before we go through some practice questions later in this chapter, we

Four Golden Guesstimate Principles

Guesstimates: Basic Structure

Listen to the interviewer when hes trying to guide you, be

How to support your assumptions

How many supermarkets are there in the US?

How many lawnmowers are sold in the US each year?

If everything else fails...