CASEBOOK by THE ESADE MBA CONSULTING CLUB OraACKNOWLEDGEMENTS To the Boston Consulting Group... The inaugural edition of the ESADE MBA Consulting Club Casebook is only possible through the tremendous effort, commitment and determination of the following bright stars: We are hugely grateful to Joan Sol for his meticulous review and valuable feedback to our cases. Many thanks also to Marfa Angeles Bosch and Santiago Fernandez for representing BCG and helping us throughout the development of our casebook. ‘Thank you to all the BCG consultants who contributed their Insights Into the life of a consultant: Hans Clement, Paul Fattinger, Joan Sol, Marc André Lein and Diego Aguilar. ‘To the ESADE MBA Career Services. ‘To Helga Kirchner, our ESADE MBA Career Services Director and to whom the casebook owes its existence, thank you for your tireless efforts in supporting the ESADE MBA students in thelr career quests, We wouldalso lke to extend our thanks to Carmen Gonzalez, who has become a welcome partner to the ESADE MBA Consulting Club. 2 casebook | ESADE MBA Consulting Club ‘To the ESADE MBA Consulting Club Members and Alumni... Special thanks to Gaurav Gupta, Lina P Piazzesi and Jofre Casas for thelr case testing, z Lucia We also would like to thank our other Alumni contributors: Dieter Kohler (ESADE MBA Class of 2010 and member of our ‘Alumni Advisory Board) and Mare Andre Lein. ‘And finally, thank you to Thomas Gut, Paul Fattinger, and the Consulting Club Board from the ESADE MBA Class of 2011. You set an unequivocal standard that our Board still strives to follow. For the inspiration to create this Casebook and your continued influence in driving the ESADE MBA forward, we thank you. om, Bi consutting ‘club . (asaAcknowledgements [2 Introduction Il4 Education INS Interview Preparation I BOG Interviews J 29 Cases I 38 Heathrow Aiport TT 39 Mobile Usage x pei? TT 2 Us Houschould Debt TT 33 Windows $ pp TTT Restaurant in Bien 0s Ais TTT Dukes Meadow Golf Ci) TS Gracia Footbal bs TT 5 NCE Mobile TD 58 ee R$ TT 55 Private Hig) TID 6; Lalian Food £:parsior TD, 7 | Lark Vedi I 75 Cor Ma 7 I 75 Market Entry into Chir, a 3 The Cos 0f Healt, I 3 Mein eri, I 9 Cr 51 ID | 5 UV Sbnc1in Se ES 95 Ls Cn TD | Final Notes I 106 casebook 3INTRODUCTION The ESADE MBA Consulting Club is proud to present the Inaugural edition of our Casebook in collaboration with The Boston Consulting Group, We created this Casebook to prepare MBA students for case Interviews, specifically through: + Sharing perspectives from BCG consultants about thelr personal experience in consulting + Presenting solid insight into the case interview process and preparation techniques + Providing access to a broad range of BCG-approved cases for practice 4 casebook | ESADE MBA Consulting Club We placed special effort on creating a user-centric design for this Casebook - we strongly believe that design is and will be 2 key differentiator not just in tools such as this one, but in the future of business. By streamlining the information so cases are ‘more intuitive and easier to give when practicing in pairs, we alm to facilitate a smoother and more efficient case practice experience. We hope you find this Casebook useful and relevant in your interview preparations for consultancy firms. Consulti Stubelton UuOMhEDUCATION The consulting interview Applicants to consultancy firms can expect to undergo several The business case Is a key feature of the Interview. Mastering Interviews (typically four to five), each lasting in the region of 45 the case interview Is essential to succeed in the consulting minutes to one hour. Interview. 15-20 min 29.25 min 5 min — eect d Ceuta Crry Better understand candidate's background Prove competence and thinking ability Demonstrate and goals Interest & Draw clearer idea of candidate's preparation Determine mutual requirements capabilities and potential Wrap up nl Key focus of this book! 6 casebook | ESADE MBA Consulting ClubEDUCATION Introduction to the ESADE education secti The ESADE MBA casebook will introduce the concepts of: Why companies are increasingly using cases in their interviews Whats a case and what types of cases are frequently used Methods and frameworks for how you can successfully complete an interview case Se ee Ce ee ake ee eee Tacos your interview preparation, but your study should be augmented by other materials ESADE MBA Consulting Club | casebook 7EDUCATION Why do companies use case interviews? Cases go beyond behavioral and background questions to assess the actual abilities of a candidate Cases can test quantitative aptitude, creative thinking, general business acumen, soft skills, presence, poise and reaction to pressure through a business simulation Companies use cases to analyze your client-readiness and determine whether you could interact with clients in a professional manner if hired STOEL ue Cae CS Ree a eC Mea evaluate potential candidates and are creasingly being used by industry 8 casebook | ESADE MBA Consulting ClubEDUCATION What are cases? Cases are a tool used by interviewers based on a business scenario; the candidate is expected to replicate the steps of a consulting project They are a means of evaluating potential candidates when facing a real-life business challenge The interviewer typically selects his or her own cases, either based on a real-life project or on a fictitious business scenario, however both serve the same purpose Interview cases are meant to show your structured thinking and how you would approach here is not necessarily one right answer ESADE MBA Consulting Club | casebook 9EDUCATION What types of cases are there? Several types of cases are commonly used: How much gum is chewed each day in the US? Te) How many text messages are sent each year in Spain? What isthe financial gain of hosting the Olympics? How can a manufacturer increase falling profits? era How can a factory decrease throughput time? (One branch of a retail chain i falling Why? Market entry- how should company X enter country Y? What are growth strategies and options for company X? How should a company bring their new product to market? Although less common, you may also encounter: With eight marbles and one balance, what isthe minimum ‘number of moves you could make to figure out which i= lighter than the others? What is the NPV of a prospective project? Determine which is more profitable, option X or option Y? 10 casebook | ESADE MBA Consulting ClubEDUCATION How to approach your case Source Dark Teek-Crackthe Cote 2011 an > > be sure tounderstand the Plan and structure an approach Dever solution fiat answers business question ‘the main business question Determine which frameworks will Make note of all key information be useful ge sure to interact with your Interviewer at every step of Identity what information is touranaiyarand fodiens imssing and what questions to ask interviewer Address ideas and issues that you identify The case interview is an interactive exercise between candidate and Pee Se eke ea enc a rr ESADE MBA Consulting Club | casebook 11Profit tree 2 eee ee eee’ impacts of changes to a company’s profital Materials Peer) DET eer ear Depletion cou reed eri De ees Cre tol eens eeu) DA uoUWOD D4 youw0>EDUCATION Three Cs model (or strategic triangle) Current customers Gee Current marketplace Segmenting options Competitive advantage Competitive response ‘Make or buy Brands / image Resources avallable Capitalize on differences in cost structure Cost effectiveness Industry dynamics The strategic triangle, or 3 Cs framework, is useful in understanding the source or cause of broad business problems including marketing or internal performance issues. ESADE MBA Consulting Club | casebook 13EDUCATION Porter's five forces Threat of entry BST) yey Rivalry Barg: oe Ono Threat of substitution Pee ae eM eet) Cee entice PCR ates 14 casebook | ESADE MBA Consulting ClubEDUCATION BCG growth matrix Relative Market Share High Low Pe ee Coy cash cows in question marks to OU neces High Question Sars Mare Market Growth Rate Be Ey evaluate a company’s portfolio of Low Cash Cows Dogs products or product lines in order Po ne Reece Tee es ESADE MBA Consulting Club | casebook 15SWOT Analysis Internal Factors External Factors (geography, new product lines, etc.) or business Peck eae aes 16EDUCATION Ansoff growth matrix Markets Development Products Existing New 2 s Market Product 5 Penetration Extension = 2 Market Diversification BCS unee tet hc) eet eae a) Bene este su Le ey DC eee Cor ESADE MBA Consulting Club | casebook ”EDUCATION Four Ps model Whatis the product, what customer needs does it fulfill? How is the product differentiated? a Does the product interact with other products (complements) or product lines (internal)? Whatis the absolute / relative price of the product? How will sales staff be compensated (commission, etc.)? — Will discounts or incentives be offered, at what interval? What types of stores will offer the product? How will the product reach the stores (supply chain, distribution channels)? _> For new products, will test markets be used for roll-out? What marketing strategy will be used? Gielen How will the brand message be communicated to different stakeholders? Based on segmentation, how will the product be positioned? Dott inet eth uth ut ete) to determine the cause of an increase or decrease in sales; it can also help in identifying es ak ake eae 18 casebook | ESADE MBA Consulting ClubUsing an example of the pharmaceutical industry. Newdrug Sourcingof —_—_— Production and Outbound logistics to. Marketing efforts, Keeping public research & materials packaging of drugs pharmacies, hospitals, PR, saleseffortsto up to date about approval needed for care faciliti doctors /hospitals potential side production effects Value chain analysis is used to look at activities throughout organizations, supply chains and Cee nun Cea Cee Cece ecu ki Cet ey organization, to determine where value is added and to identify weaknesses or bottlenecks within Pernt 19Financial statement analysis a re) ee Shor Tam leer Cost of Goods Sold (raterals drectlabor OF) I inventories taxes payable sca : tr BPREGrinusdprecnton) [common foek ook aie] eed ROE JOpereting Margin Tax (income * tax rate) ROA Profit Margin eee eC eee heer] [Current Ratio Gross Margin Pore en Len ee ee ring [cash Ratio [Price to Earnings 20EDUCATION Project and company valuation NPV prot 2 ‘o+ [sum of present value of cash flows for entire project duration 2670, indicates the profitability Ge ee, J aR discount rate where NPV equi ofa project Payback Tength of ume to regain cash foman investment years or GreakEven) months) *NPV will be most commonly used Earners to evaluate projects for cases realy expected fee cashflows discounted based on Sales a the weighted average cost of capital, can include 2 Cmtl coos seme nye LoD fee Dividends based [eum ofifinte dividends payments vaing perpeniny R-g DEA estimation (erminal vale) = Muliples | valuation based on compariontoamiarcompanes | Terminal Value EG [orice-eamingsratie,EV/eales bock-to-markevete) | Caleuation a DEA fe [Operating Cash Fow A/J-curve can be used to CAPEX. + show cash outflow and [Working Gavia time _ inflow fora project and . lustrate the breakeven point ESADE MBA Consulting Club | casebook 21INTERVIEW PREPARATIONyou | ? sibs oesINTERVIEW PREPARATION Our interview process is aimed at getting to know you personally, learning more about your analytic capabilities, and also introducing you to our people and our work. We assess your ability to listen, communicate effectively, and present yourself with tact, energy, and persuasiveness. We look for intellectual Curiosity and creative thinking. And sometimes, we Just want to find out what it would be like to spend a week on the road with you, working together on a client project. Interviewers value a sense of humor and a bit of ’sparkle" in your personality. Typically, we divide interviews into three parts: personal background, consideration of a case study, and an opportunity for the applicant to ask questions about us. Your Personal Background During the interview, we want to find out more about you and how you would ft in at BCG, For example, you might be asked to describe ways you have been able to make an impact in a team environment in the past. Or you could tellus of a time when you ‘were able to overcome obstacles, persuading others to go along with a decision that they had initially resisted. The interviewer may also simply be curious to hear your motivation for choosing to pursue a career with BCG, 24 casebook | ESADE MBA Consulting Club Case Study We use a case study to give you an opportunity to demonstrate your problem-solving skills. Because the case is likely based on a teal lient project your interviewer has worked on, youwill gain a Unique insight into what strategy consulting at BCG Is lke.MOST IMPORTANT: BE YOURSELF The case study will feature a business problem that you and the interviewer will seek to solve together. it will not require extensive knowledge of specific industries ot processes, and often our cases have no right ot wrong answers. Your questions and thought processes are more Important to us than coming up with an actual solution. We hope that you will find the discussion of the case study Intellectually stimulating. There isno better way to simulate what we do than towork through one of our cases. Questions and Answers The interview is your chance to ask questions about working at BCG or your interviewer's personal experience. It Is an opportunity for you to get to know our people and our culture. ‘Come prepared with the questions that matter to you, and we will make every effort to answer them, Preparation for the Case Study To prepare for the case study discussion, you can review some practice cases at www.bcg.com/careers. The Web site examples will give you an idea of what to expect in the case study portion of the interview. While there are no set rules on how to solve a case, we have found that some advice can help you succeed. You should + avoid rushing to a solution without making sure you understand the problem + ask questions to get all the relevant information you need and rely on your Interviewer to help you get on the right track make assumptions, but be transparent about the assumptions you are making perform a sanity check when doing calculations— you will score extra points for this + take hints from the interviewer; we want you to succeed, and we don't play games + be flexible: if your approach is not leading to a solution, pause, rethink the key issues, and adjust your approach explore what is important and what isnot; focus on the former and don't let yourself be held up by the latter resist the urge to rely on a textbook approach or conventional wisdom seek creative and Innovative approaches to solving the case (One last piece of advice: be yourself and have fun discussing the case. If you find this an exciting and entertaining experience, you'll likely enjoy being a consultant at BCG. ESADE MBA Consulting Club | casebook 25DOS AND DON’TS FOR THE CASE STUDY Do Listen to the Interviewer and Ask Questions The interviewer will begin by laying out the problem. You should take time to align your thinking, ask clarifying questions, and communicate your line of reasoning to your interviewer. The Interviewer will also give you hints and help along the way, so don'tbe afraid to take notes. Structure the Problem and Develop a Framework to Solve it Take a moment to think about the case to gain perspective. Putting together a structure and a framework will help you clarify each step and enable you to identify the analysis you may want to perform to reach a solution, Focus on High-Impact Issues Concentrate on the issues that will eally make a difference and create value for your “client,* but make sure that you explain the reasons behind your choices. 26 casebook | ESADE MBA Consulting Club Generate a Hypothesis and Explore Options Creatively ‘Make suggestions on how to solve the key Issues you have Identified The interviewer will be looking for the same things 2 BCG client would expect when working with us—Innovative approaches that can change the rules of the game and creation of lasting competitive advantage. Synthesize Thoughts and Draw Conclusions from your Analysis [At the end of the interview, you should summarize the key hypotheses and options you have developed, Then, conclude with your recommended solution to the client's problem,DOS AND DON’TS FOR THE CASE STUDY Don’t Don't Rush into the Analysis without Developing an Understanding of the Problem During the discussion, the interviewer will work with you to organize your thoughts and steer you toward a solution. Don't be afraid to ask questions that check your understanding Don't Panic if the Answer is not Apparent There isno right or wrong answer in our interviews, andyou are not expected to know everything about business. The objective of the interview is for us to learn about your approach to solving business problems, so remember to discuss your line of thought with the interviewer. Don’tDefend your Solution at all Costs If the interviewer challenges the solution you propose, don't go on the defensive. Acknowledge the possibility that the interviewer has brought up a relevant perspective that you had ‘not considered and reexamine your thinking accordingly. Don't internalize your Thought Process The Interview should be a dialogue between you and the Interviewer, so make sure you communicate your logic and underlying assumptions. Don't Stick to an Artificial Framework ‘Standard frameworks you have learned in school may appear relevant, but they may not hold up after closer consideration ESADE MBA Consulting Club | casebook 27Crees To learn more about BCG, to find out more about activities on a campus near you or to apply please visit Reet Ce dU Runa Cree Doc a ee edBCG INTERVIEWSBCG INTERVIEWS Joan Sol | Barcelona What is it you look for in a personal interview? What about cases? Is one worth more than the other? Hook for a wellrounded and balanced candidate, with good interpersonal and analytical skils. Both dimensions are important and candidates mast txcelin them, The acid test question ask myzelfie Would like to have thie candidate working in my project?” What distinguishes a good candidate during acase interview? ‘You feel it A good candidate engages in the discussion, connects with the interviewer, shows high level of motivation and enjoye the interview. So, youhave fun during the interview, thats good signal What is the most memorable case interview that you have ever given? One year ago | interviewed an MBA candidate | started introducing the caze, showing him a side about the industry, when he interrupted me and said “Ihave done this case, with these exact numbers! thanked him for his sincerity and asked him who told him about the case, maybe a colleague who interviewed with me beforehand. His answer wae unforgettable: No Joan, I have done thie case, in another consulting interview! | wae really shocked since | created the case from scratch based on previous experience ina client. My takeaway: It's pity don't copyright my cases. 30 casebook | ESADE MBA Consulting Club Whatiis the source of inspiration for your cases? Real projects ve done pre ‘the number jously. don't like asking candidates to estimate Isyou can ftinto a Boeing 747 because | don’ sm with the same kind of issues and strategic decisions face during a project. How did you prepare for your case interview when you interviewed with BCG? I read 2 couple of booklets on consubing interviews. And | also practiced, practiced and practiced. That's the most important part of preparation, What is the best thing about being a consultant? What is the worst? Just one? There are a lot My favorites are (1 full responsibilty you have from day one, (2) intellectual challenge you face in every project and (3) working with such a talented group of people ‘The worst thing to me is traveling, especially when you have 2 newborn baby athome, In your opinion, does the preparation / interview of ca: reflect the skills that a consultant needs to succeed? [Absolutely As! mentioned, lke to test candidates facing similar isues to ‘those Ihave, s0 atthe and lam testing their consulting kilBCG INTERVIEWS Paul Fattinger | Vienna What is it you look for in a personal interview? What about cases? Is one worth more than the other? In the case part of the interview, | specifeally look for the candidate’ ability to suucture problems to think outside the box and to get to the bottom of the case. In the personal part | focus on a well rounded story “why Conzulting?; why 8CG does the candidate understands his or her strengths and weaknesses and how the implications on thet job. In my opinion the case and the personal interview are actually quite similar to each other. Both show whether candidates are prepared, how ‘they communicate 25 well whether they can relate to the situation and ‘the personality ofthe interviewer, Last but not least the whole interview process usually gives a pretty good picture ofa candidate and the ft with aca. What distinguishes a good candidate during a case interview? \Well frst of alla good candidate gets to the bottom of the case. Moreover he or she has a clear structure, stays calm, listens to the interviewer and shows curiosity and eagerness to get understand the problem athand, 2s? Whatis the source of inspiration for your ¢ Clearly the projects | have worked on or the ones | am working on inspiration. As consultante we solve cases everyday ~and the question very similar to the ones we ask in an interview. So sometimes when you discuss problem with colleagues or clients itjust strikes you - that would be s grestinterview question! How did you prepare for your case interview when you interviewed with BCG? ESADE offered several trainings on how to solve cases, which | have found texremely useful to set getan understanding of what ceee interview is and ‘what companies are looking for As the interview day approaches however ‘there isnothing better than practicing cases with colleagues, What is the best thing about being a consultant? What is the worst? I have always atked my interviewers this question and got many different answers. Inmy ease Ilove being able to work on interesting issues together with a team of like-minded but very diverse colleagues. The ‘worst, depending on where the projects: I'd sometimes like to see my girriend and friends more often, ESADE MBA Consulting Club | casebook 31BCG INTERVIEWS Paul Fattinger | Vienna In your opinion, does the preparation / interview of cas reflect the skills that a consultant needs to succeed? | didn’t realize until started working asa consultant but preparing for my caze interviews was 3 very good learning experience and preparation for my job, Becauze, what we ack of candidates during a case interview, ie what we offer to our clentsin a nutshell the ability to dissect complex problems into manageable pieces, getting results by asking the right questions combining all available resources and in the end communicate them in 2 Gear and concise way, 32 casebook | ESADE MBA Consulting ClubBCG INTERVIEWS Diego Aguilar | Madri How did you prepare for your case interview when you Interviewed with BCG? lreadmy CVand MBA application essays several imesto refeeshmymemory onthe wording !had used toreferto past experience aswell as my strengths and weaknesses, | read the book “How to crack the case Interview" and did between 20 and 30 practice cases with fellow students. | think practicing ie important a well s knowing tome frameworks because you need to use ‘them during the cases. On the other hand you also have to work on your personal part of the interview, solving the case or developing itis just one partof the interview. What is the best thing about being a consultant? What is the worst? ‘There area lot of good things, you can work in diferent companies, learn from differentindustres and practice areas Also you getto know and work with accomplished and motivated people aswellasaccessto top executives very earlyin your career ‘There are always downside risks asin every other career. You can getthough cases, which means ong hours or you can get boring cases where you will learn very litle. In my opinion some risks are worth taking, a consulting experience in a top consulting company like BCG will definitely have a Positive impactin your professional care In your opinion, does the preparation / interview of ¢: reflect the skills that a consultant needs to succeed? To some extentit does prepare you forthe hurdles you wil face once you start butyouwouldbemistaken fyou thoughtthata good interview means ‘you know all there isto know about consulting There are certain skill you willneed to learn very fast if you do nothave consulting experience. Making sidan the propersdidefloa. working on yourExcaland comsranicrtion sila ‘te. Be prepared to work very hard and remember thete is step leatning curvein consulting. BCG does a greatjob helping the new consultants with several wainings, but you have to work hard on your own to be able to become good consultant. ESADE MBA Consulting Club | casebook 33BCG INTERVIEWS Marc André Lein | Amsterdam What is it you look for in a personal interview? What about cases? Is one worth more than the other? Ina personalinterviewlammainiy looking for how the personinteracts with ime. Most important for me isto assess whether the person is authentic of not? Basically wantto gette know the real person. lsthe person somebody "could exsily ee within the fern? In the end BCG is avery diverse place to ‘work a different nationalities, backgrounds and personalities, so there is no specific type of person am looking for but fl like to get to know more about the person, its definitely a good sign It must come natural though, because otherwise | could think the person is trying to pretend somebody he or shein realityisnot. In cases look ultimately at how walla person can solve an issue at han Itis important to show that you have the necessary breadth to work on all sorts of problems, but also the depth to entrely understand and solve one particular problem athand. | think thatreflecte leo the work you do in your day-to-day ife at BCG. ‘The way to tackle a case is of course diverse and | learned for example during the team work st ESADE that there ls many ways to come to good result One thing | am looking for however sto assess whether the person ‘was justlucky with a ease that came easy for him orher or whether Ibelieve ‘this person could also have easily solved another ‘not so lucky’ case. Hence, ‘the approach toa case is also important. Am | confident that this person is following a comprehensive and holistic approach? A perfect case for me is rather a good conversation. At certain points | am tying to ask questions ‘that are not directly corelated with the final question of the case to see 34 casebook | ESADE MBA Consulting Club how well the person can have an intellectual conversation to understand if ‘the person is only looking atthe problem athand or does also have a more broader view. lam most impressed ifa person not only solved the case in 2 good way, but also raises good points to consider or asks questions that I haven't thought of myself, which shows me that the person is thinking aboutthe problemin a holistic way. What distinguishes a good candidate during acase interview? [A good candidate has a clear svucture and tres to really understand the situation/ problem rather than tying to just solve the caze. Hence, they must not necessarily solve a case without difficulties, asthe problems we facein our daly life are not always easy to solve neither. What distinguishes 4 good candidate though is the drive to tackle a problem in a structured ‘way and identifying the issues that this case contains. In the next step 2 good candidate is also understanding implications of problems and Possible eolutions on other areas and is crestive in finding eolutions of identifying issues. If all these points are met, an additional nice-to-have differentiator isa candidate who is showing some sort of extra. This extra might be smart questions that show diffrent solutions to the problem, considering something not directly corelated withthe solution that might sill be very important if you think about a problem holistically and hence showing thatthe candidate s thinking further than justthe obvious..thus, ‘uying to identify the real insight.BCG INTERVIEWS Marc André Lein | Amsterdam What is the most memorable case interview that you have ever given? One of the most memorable interviews was during my frst year at ESADE. [At that time many people were preparing for their intern interviews and | was having a mockup interview with one of the highest GMAT scores in four class. Hence, | thought that he would probably blast me away with his quant sills and easily solve the case, However, Iwas surprised that this was not the case. Of course calculations of any sort were not 2 problem to hirm, s0 tied to have a case that included quantitative and qualitative parts Even so | could see that he had a clear structure in his head and that he could exsily go into depth, he was lacking zome of the breadth that wae needed to solve this caze. In that moment | ealzed thatbeing smartis not allthatisneeded to make itinto Consulting, but youneed to havea broader skillset Justbeing an expertin one dimension does not suffice, My interview partner wae ofcourse smart enough toidentifyhis weaknesses 25 well, worked on them constanty and also developed further during his ‘ume atESADE and is today also a successful Consultant Whats the source of inspiration for your cases? ‘The sources of inspiration for me are a mix of cases | have seen in other case books, the interviews | were given to myself, experiences | got from my daily work life and personal interests bout topics that | am interested in discussing. If within cases 2 certain questions comes into my mind, | sometimes also pick up on that to start an interesting discussion, How did you prepare for your case interview when you interviewed with BCG? First | started doing 2 lot of mockup case interviews whenever possible with fellow students However | didn't feel that it would prepare me enough. felt that it was nice to solve a case here and there, but didnt fel lke ! would be totally Preparedfor each and every topic that might arise. As| always try to analyze and understand things as a closed system, | also tied the same for case interviews. | knew the business tools and frameworks including their implications on a business, but| didn't feel so comfortable with identifying the issue at hand, hence connecting these tools and frameworks and applying tto 8 company in 3 holistic and detailed structure, that was my main weakness Henee,|satdown and developed framework thatbasicaly combined all other main frameworks and tools and included ther into a company’sbusiness structure and environment that would be structured in ‘the way think. This framework helped me thinking about a problem more exhaustively by connecting the dots Kind of being the storyline I could use for every problem, atleast that was the intention, ESADE MBA Consulting Club | casebook 35BCG INTERVIEWS Marc André Lein | Amsterdam | also found itvery helpful to read several magazine and newspaper articles ich azinteresting ones rom the Harvard Business Review a¢ they triggered iy thinking further in 2 broader direction and was also informed about current political and business developments and had an opinion about them, What is the best thing about being a consultant? What is the worst? ‘The bestthing isthe intellectual challenge that you are facing over and over again, You need to be at your bestatalmost every day, can contribute to 2 company’s and BCGs success and also have a visible impact and have very interesting topics to work at Also the open working culture and exchange 38 BCG is one of the best things of my jab. | enjoy having open discussions ‘with my colleagues irrespective their level within the company overall sorte of problems and cases that we work on | like my job, 20 there is not alot that | disike, The worst part of being # consultant for me is hence being limited in your stock wading activities. | don't wade atall asi don'twantto getinto a position that might contradict ‘with the ethical values of C6, 36 casebook | ESADE MBA Consulting Club In your opinion, does the preparation / interview of cases reflect the skills that a consultant needs to succeed? Definitely, case includes most ofthe things that are also needed for the day-to-day fe ofa consultant Given the breadth of our work itsimportant ‘hata cate let an interviewee chow his or her breadth, When analyzing 3 topic weneed to goto the utmostdepth as we try to identify the underlying problem, notjust the symptoms. Both taking together, we need to identiy the insights needed. You also see how a person is acting under pressure ae the interview ize ie kind of a svessful situation. In addition, you alzo need to think quick sometimes when in a direct client situation, which is tlso tested ina case interview. ‘The preparation itself also helps tremendously for your workasa consultant [As you need to prepare for ll sorts of topics, you also broaden and specify ‘your skill set which is definitly needed to succeed in Consulting,BCG INTERVIEWS Hans Clement | Dubai What is it you look for in a personal interview? What about cases? Is one worth more than the other? What look fr in an interview ate the main char ‘the driving forces for hisfher application for 8CG, istics ofa person and | ty to assess his fundamental behaviour and hisher curiosity Atthe end of te day | want to know if he/she could be » person | want to work with and if ean wust him/her fll. With regards to the cases ita very good mean to see a person's attitude in stressful situation and how he/she reacts with constantly changing input and ideas. So the combination ofthe personal interview and the case should give me 2 good sense on what person sitsin front of me, What distinguishes a good candidate during acase interview? HisMher curiosity, hisyher ability to handle new ideas and input, creativity and his/her ability to make itan interesting conversation, What is the source of inspiration for your cases? Previous experience ~case related examples. Everyday examples. How did you prepare for your case interview when you Interviewed with BCG? [basically did a lot of interviews with my peers. used to exercise my math tkilsin come classes under the influence of some disturbing voices. ‘The last week before my final cases I focused very much on the per What is the best thing about being a consultant? What is the worst? Amazing learning curve at the beginning. High profile changing topics to work on projects. Ever Being away from home for mostof the week In your opinion, does the preparation / interview of cases reflect the skills that a consultant needs to succeed? Pardy yes, it basically gives you an idea how 2 consultant is structuring @ problem and try to solve it Moreover you get very good sense that you need to thinkin all directione 1 find a solution for a prablem. ESADE MBA Consulting Club | casebook 37esosHeathrow Airport Markt Sing Ssratcgy Prompt - Part 1 Notes ‘The dientis BAA group - the owner of London Heathrow Airport, one of the worlds busiest international airports. Analytical & Problem Estimate the number of passengers that travel through Heathrow per year. Solving Skil 12345 Guide - Provide only if requested Number of runways:2 Communication & Runway utilization: 1 takeof/landing every wo mins Presence ‘port opening hours: 18h per day ‘Average plane capacity: 250 seats 1203 4 5 Plane utilization rate: 70% " : Business Acumen 1203 45 ‘Suggested Approach - Part 1 Common Sense & Practcaity © Rumvay anabsis © Plane analysis. — Q Conclusion 123 4 5 Number ofrunways:2 Averageplane capacity: Passenger numbers per day: 189,000 280 passengers 175 avg passenger volume * 1080 Lire per ae (candidate may round upto 190000" Creativ 1 takeoff or landing (1) every2 mins Cade may round upto saot0K — Criniy ‘Opening hours of airport Passenger numbers per year:~68m Samto Vipm-7 daysa week 189,000 passengers per day * 360 Number of /ts perhour: 60 Tits (utlized days maybe reduced) sere an “Total market size: Number of T/Ls per day: 1080T/Ls GOTAsperhours 1Bhours ~68 milion passengers ly though Heathrow airport ESADEMBA Consulting Club [casebook 39Heathrow Airport MetcSooe A a =o see Prompt - Part2 Our cet 6 AA Go te cee Retvow aig Heathrow airpor is currently running over-capacity by 15% in terms of passenger numbers. ‘The governments insisting that BAA group reduce its passenger numbers and match capacity mmeciately (within the next year) ‘What do you recommend BAA group do in order to meet the government request? Guide - Provide only if requested “There are four airports in London: Heathrow (largest) Gatwick Qnd largest) ee Stansted (rd largest) ofan Giy (smallest) reer) BAA Group owns Heathrow and Stansted in London, and also owns three other airports inthe pecs UK epi reri Heathrow’ location is very residential Heathrow charges talline companies are curently the highest of all London airports. Two principal chargestt ailines are: ‘Two principal charges to airlines are: Hub fees Take offfLanding fees Relationships between airports and ailines are long-term 40 casebook | ESADE MBA Consulting ClubHeathrow Airport a | _ Sieatcgy soe pala Suggested Approach © Options Caro ror rey Increase prices! es BY x x v Would need planning permission Heathrow issetin a residential area. Heathrow Hub &Take-ffflnding GAA has the advantage of owing an adction and would be subject to dispute Not possibleto extend operating feesarethehighestin London. al London aport and should explore wansfer Ce among residents (ie. apotental hours Increasing prices would increase of hubs to this or ther ofits UKairportsto Long term solution ony) the ik of compettive responses, maintain itslong-term relationships from Gatwiek& Cty >_> ‘Alar goed ideas, but reassigning atines to isother airports (most probably Stansted) s ‘the best option given the aleady high pices of| Heathrow and the competitive responses from ‘other London airports © Solution BAA Group should transfer the small airlines and/or the low cost ones to Stansted. selling point for these airlines is that hub and takeoff/landing fees would be less at Stansted than at Heathrow, which would actually be of benefit to their business models. ESADE MBA Consulting Club | casebook 41Mobile Usage in Spain Netcsog Co a ED geen Prompt Motes How many minutes of mobile phone calls are made each day in Spain? Analytical & Problem Solving Skil 12345 Guide - Provide only if requested ‘Gremio é Population of Spain: 45m me Rati ofurbarturl population: 3:1 123 45 ‘Total market penetration: 95% (Spain) Urban market penetration: 100% (Spain) Business Acumen 1203 45 Common Sense Practcality 1203 45 a” Creaiiy Energy & Fit 12345 42. casebook | ESADE MBA Consulting ClubMobile Usage in Spain —— ‘Suggested Approach O Size the market © Conclusion Population: 45m Approximately 300 milion minutes of mobilephone cllsaremade each day Estimated demographic audience: 10-70 year olds (70-1075 = 80% Target market audience: 36m (45m * 805) 2m Market size om (36m *75%) (26m *25%) 27m Market 7am (100% penetration) penetration (36m *95%)-27m Average dally 30 mins phone usage 15mins ‘Total demand: 918M mins/day Gomins * 27M) + (15 mins*7.2M) ESADE MBA Consulting Club | casebook 43US Household Debt nv Orgaion == a Prompt Notes Estimate the total US household debt. Anabyial & Problem Solving Stile rag 4s Guide - Provide only if requested US population: ~300m Average US household size: 3 people Communication & Presence Sources of debt: L268 & Mortgages (70%) pote Otherhousehold loans (20%) peieeal Credit cards (10%) oro Business Acumen 1203 45 96 f private property among US households: 70% s8of private propery with existing mortgages: 65.67% ‘Average US mortgage: $150,000 Estimated credit card penetration rate in US: 55% ‘Average household creditcard debt $17,000 Common Sense Practcality 1203 45 ‘Suggested Approach Creativity P23 4s © Estimation of US household size Us population: -300m Energy & Fit Average US household size: 3 people 123 45 Estimated number of UShouseholds: 300m / 3 peopk 44 casebook | ESADE MBA Consulting Club 100m householdsUS Household Debt sce omar ‘Suggested Approach O Analysis of debt sources 70% 20% 10% J x Jf Unlike mortgages and credit cards, ther household loans are extremely fragmented and ind n types. Therefore candidate should use either mortgages or credit cards a the basis of © 2 Methods for calculation of estimated US household debt Seofprivate property among US 70% households 100m * 7035" 66.5795"8150,000 $675 trilion/ 70% 6 ofprvate propery with existing 6.67% mortgages, = $675 sion =~$9.5trillion Average US mortgage $150,000 een) Estimated credit card penetration 55% 100m * 5555 *$174 Sees $17,900 $0.95 wilion / 10% ‘Average Household credit card debt $17,000 '=-$095tilion =~$9.5 trillion ESADE MBA Consulting Club | casebook 45Window Supplier Busines Operatins Strategy Prompt - Part 1 Notes ‘Ourclient i supplier of windows to global construction companies. The client owns factory which has been Analytical & Problem ‘extremely successful sinc ts lunch five years ag, with revenues growing at an average at of 10% per yer. Solving Skills However throughput time has increase rapidly in recent times, rom one month to an average of three months pasas (order through to cient delivery) Ther cents are not happy and have signaled that they wil reconsider their relationships i speed of delvery doesnot improve. Communication & ‘Why has the throughput time increased so sharply? Presence What can the company do to address this problem? 12345 Business Acumen 1203 45 Guide - Provide only if requested ‘Margins /profitshave remained constant The operation is extremely efficent: No problems “The market consists of very few suppliers principal suppliers, 2in the US (operating at ull capacity), 3m EU (operating at ful capac including your cent, and 1 n hina with spare copay) The dlenthas small numberof arge buyers ‘The dlient produces both frame and galss components of windows Productmixhas not changed Common Sense Practcality 1203 45 Creativity 123 45 Energy & Fit 12345 46 casebook | ESADE MBA Consulting ClubWindow Supplier ‘Suggested Approach - Part 1 O Mentify cause of throughput deficiency Consistent year-on-year revenue and profit growth of 10% and an efficient operational processcan only mean one thing, the firm is suffering from insufficient capacity to satisfy its demand growth. © Identify client options Since cur cients buyers ave made cer hat they wil reconsider relationships oon and because the companys dependent on asm Panber of cents Le srong buye power) the step needs tobe to deny ashore soliton, Ge rd carrey EI Company wi, lose chents taken x x Operaionsdo Glass. Thiss along nothaveary highly tem solution problems Commodiized anew plant product would take yeas tobuld Us-based companies Evsbased companies There ate 2US bases ‘companies operating at ful capacty ‘There are 3 EU.based ‘companies including your ent whic age all afl ‘apacty swincsOpecie — = V v GGood solution Glass ishighly butnot commoditized and necessary easly procured the quiet and requires finaing CChina-based companies (One newly established factory in China with roe venice 7 ESADE MBA Consulting Club | casebook 47Window Supplier sins Options CT ‘Strategy sonst — Prompt - Part 2 ‘After identifying the chinese factory with whom to partner,you recommend that your client approach them to outsource production Estimate who holds the greater power in negotiations when they meet. ‘Suggested Approach - Part 2 raw comparison line and ask candidate to indicate where the balance of power ies. — Chinese Factory Prompt - Part 3 In preparation fora frst meeting with the Chinese factory representatives, your client has conducted some addtional research and learned that the company is onthe verge of bankruptcy. The factory was built three years ago in anticipation for demand that never materialized and hence has large amounts of spare capacity, Based on this new information Re-estimate the balance of negotiation power? Would there be any changes to your recommendation? 48 casebook | ESADE MBA Consulting ClubWindow Supplier vaintopccioe a ‘Strategy ua ate ‘Suggested Approach - Part 3 Draw comparison tine and askeanddatetindat where the balance of poweles and why. ‘Thenew information othe financial poston ofthe Chineefactor significant shite the postion of power 50% —— yt Ghent Chines Factory Based on this, the client should additionally consider an acquisition. Conelusion Candidate should be able to sum up a recommendation based on his/her assessment and confidently support one of the ‘wo options based on his/her assessment, <== siiax== Pros: Pros: ‘Good opportunity to expand and increase capacity of Less funding required production, increase market share, increase economies Client can take advantage ofa strong bargaining position ‘of scale, and enter Chinese market Quick fx to client priicpal business solution Risks: Risks: Cultural ft and adaptation to new market Client could lose it postion of negotational power inthe Financial riskof funding Jong term and miss. strong growth opportunity ‘Other M&A risks of synergies (eg, quality of product) Quality of product ESADE MBA Consulting Club | casebook 49Restaurant in Buenos Aires Business Operations Prompt \Whilston holiday inthe Argentinean capital, you meet through mutual friends, Mike, the proud new owner of ‘YuNoodle, a Korean noodle restaurant. ‘You askabout his restaurant and he tls you that businesshas been very successful since its launch one yea ago. He also mentions that he has recently been approached by abankofferingYuNoodle the option to acept credit ‘ard payments He says that he unsure, and that although some val restaurants do acept card payments, ret ‘card usage i fay low in Argentina. Currently YuNoodle nly accepts cash payments fom customers Mike asks you whether or not he should accept the bank's offer. Guide - Provide only if requested $1 Argentinian peso (ARS) = $0.02 USD Traps Restaurant business canbe broken down into two parts: Restaurant curently 90% of revenue) aie Opening hours: 9 hours pr day for lunch and dinner ae Average dent spend: 60 AS (er head) Capacity: 80 seats Uslization: 90% Profitmargin:~% Growth ate: 0% ‘Average meal duration: 1 Shours ‘Takeaway (curently 10% of revenue) Profitmargin: 109% Growth rate:~20% per annum ‘Credit card payment details: Credit card providers charge a commision (2%) per transaction inretun they ofer business inteligence/ consumer insight. Credit card acceptance wil immediately double takeaway sles. Mike expects 75% of tokeawoy customers to py by credit card Regarding the restaurant business, an estimated 23% of customers would pay by credit card 50 casebook | ESADE MBA Consulting Club _— Notes Analytical & Problem Solving Skills 123 45 Communication & Presence Business Acumen 1203 45 Common Sense Practcality 1203 45 Creativity 123 45 Energy & Fit 12345Restaurant in Buenos Aires Business Operations ‘Suggested Approach Understand the business == =m ‘Average daily revenue: $25,920 ARS ‘Average annual revenue: $1m ARS 860 ARS * (80 seats * 90%) * (Shouts /1.5 hour duration) '$10m ARS * 10% of revenue ‘Average annual revenue: $9m ARS. ‘Average annual profits:$100,000 ARS. $25,920 ARS * 350 days, ‘SIMARS* 10% profit margin ‘Average annual profit: $540,000 ARS ‘38m ARS * 6% prof margin ‘Total annual profit: ~$640,000 ARS. © Understand the card payment model and assess the impact == . == Lossin profit: $45,000 ARS Increase in profitability: $100,000 ARS. ‘9 millon * 25% * (29) = $45,000 ARS ‘$1 million * 10% = $100,000 ARS. ‘Loss in profits: $30,000 ARS ‘S2million * 75%" 2% = $30,000 ARS ‘Total change in annual proft:+$25,000 ARS $100,000 = $30,000 $45,000 = $25,000 ARS © Conclusion Based on information and revenue benefit, Mike should accept the Bank's offer astheTake away business is growing, ‘Access to business intelligence will give additional customer insight which might help future business considerations. ESADE MBA Consulting Club | casebook 51Dukes Meadow Golf Club ot Gina! sic aha Prompt - Part 1 Notes Dukes Meadow Golf Club was set up about 10 years ago ina suburb of London, Analytical & Problem ‘The course isa beginer hole course (the standard is 18 hoes) andhas been extremely successful Solving Skil Due tinal funding constraints a time of purchase founderowner only developed half thelandhe orginal purchased, YE ‘The owner asks you what he should do with the remaining 50% of his land. Communication & Guide - Provide Only if Requested Presence Percentage of customers who are beginners: 80% 123 45 io Demand exceeds supply and is growing. Dee) Other spors faites nearby include one profesional pada Business Acumen gol course and one profesonaltenis center ee t2o3 4s “The course fe stuated on theriverand isa neighbor o 8 eaten number of rowing clubs. _ Common Sense & Two ange breweras ar sis based inthe ara, Practica 1203 45 Funding isnot an issue forthe client. Creativity 123 45 Energy & Fit 12345 52. casebook | ESADE MBA Consulting ClubDukes Meadow Golf Club oo a: Strategy oe ‘Suggested Approach - Part 1 Duke Meadows E i ae ars on Poiereciteny Cros Peele] cord Crt Insufcent land; eg, golf ange; eg.barorrestauant —eg.tennis Unpopularamong strong demand TBholestarget_ —_Veryconsistent wth fisting astomers —inareaand hence amoreexpet’ _companybusiness modet andcommunty bargaining power sudience Would satisfy growing demand 100% of 70% of 20%of 30% of 100% of 30% of remainingland —remainingland ——remainingland —remainingland —remainingland remaining land ESADE MBA Consulting Club | casebook 53Dukes Meadow Golf Club eZ Stricgy ene fealitee Prompt - Part 2 Caneite shoul deny the creation of orange a the best option Assess the profitability of developing a golf range and recommend whether to pursue. Guide - Provide only if requested Estimations for golfrange ‘Summer months: Apr ~ Sept ‘Capacity: 50 aisles Daily opening hours: 14 hours Price: £3 for 40 balls Utilization rate: 90% ‘Average duration per 40 balls: ~30min Rowing club has made ‘an offer for 15% of land: 300,000 ‘Suggested Approach - Part 2 Revenues Pee Caeneeaes CMNRERCee cttemer oer ies aes Recaesin dics Stacie aalinion, Indiesiyomcs) theme casemann saci acrslaarnoe can u + J TT lm ((£3/40 golf balls)- £0.02 per go bal) Yes it isa good idea. Creating a golf range would satisfy growing demand and increase profitablty Additionally, the golfrange would provide a complementary service for beginner golfers. $4 casebook | ESADE MBA Consulting ClubDukes Meadow Golf Club Prompt - Part 3 Candidate should validate the construction of the golf ange. ‘What should our client do with the remaining 30% of the land? Suggested Approach - Part 3 Candidate should evaluate other alternatives including the following: The client can cash in and sell the remaining land to the rowing cub. However, candidate should readdress the other highlighted option of developing land for other, related sports (e.g. tennis) to the same target market audience and recommend further research. ESADE MBA Consulting Club | casebook 55Gracia Football Club Prompt ‘Gracia FC, ahistoricaly small and provincial football club, isin its fourth consecutive year in Liga 1 (the top Spanish league). sategy ‘The Clubs board and manager has made clear the clubs goal and expectation: to stayin the top league. The CEO of ‘the cub also wants to improve cashflow in order to buy top players (e.g. Messi, ‘Additionally, the board wishes to develop its stadium to top league standards and to increase the match day capacity totop league standards ‘The club’s CEO asks you what he should do with the stadium. Guide - Provide only if requested Cutan stadium capaci: 15000 fverage ihe price 20€ toe Average get tadlum capacty35,000 eetap Approximate number of games per year at stadium: 30 aoe Stam chats slesreresen 30% of ttl revenue ete {ote souees rT ight and erhandng) a Football margins: Gracia F's are usually around 20% (candidate should use this 35a proxy to cash flow for caleulations) Gracia paid a construction company toinvestigate two options Developing existing stadium andincreasing capacity by 50% at a cost of Sm € (expected utlzation rate: 100%) Building a brand new stadium seating 40000 would cost 4om € expected utization rate: 80%) Forboth investments, discount rate is 10% 56 casebook | ESADE MBA Consulting Club — pa Notes Analytical & Problem Solving Skills 12345 Communication & Presence Business Acumen 1203 45 Common Sense Practcality 1203 45 Creativity 123 45 Energy & Fit 12345Gracia Football Club ‘Suggested Approach Develop a scenario-based approach to the information acquired. Candidate should be able to develop three distinct scenarios and assess the financial feasibility of each, Pe Donothing Timeto complete: 0 year Capacity increase: 0% Cost to build: 0€ Usilization rate: 100% [Annual ticket revenue: 9m € 15,000 *20€ "30, le NPV: 18m € (om €* 2088) / 1058) -0€ Leaving the stadium asis does not support the Club's long- term strategy of staying in the topleague ‘Missed opportunity of increasing revenues, x pare ad ‘Time to complete: 1 year Capacity increase: 50% Cost tobuild: 5m € Usilization rate: 100% ‘Annual tcket revenue: 13.5m € 153000 15 * 206" 30 ie NPv:22me ((13:5me * 203) / 1036) -5me Les risk than building new stadium ‘One year until completion v ‘ayy seeneuce palate Conclusion Capacity: 000, ualtatve analysis Cost to build: 40m € z even’ Utization rate: 80% ‘Annual ticket revenue: 19.2m€ 40,000 * 206 * 30 games * 809% le NPV:-1.6 me ((19:2m €* 205) / 1056) 40m € High isk project Supply estimated to exceed demand “wo years unt completion x ESADE MBA Consulting Club | casebook 57NICE Mobile : ‘aategy Prompt - Part 1 Notes ‘Your client isthe CEO of Fench-based mobile phone operator More special they ae a‘vitual mobile phone Analytical & Problem ‘operator Tey ifr from traditional mobile operators (eg, Vodafone, FMobile, Telefonica et...) inthat they do not Solving Skil ‘own mobile antennas, bt instead partner with them and rent antenna capacity in order to offer a mobile service. es ‘Your client has expressed interest in expanding his company's operations to anew country. They have shortlisted 12 countries. Communication & ‘Which country/countries would you select from the list below for our client and why? Presence 123 45 Guide - Provide only if requested NICE mobile ONLY offers prepaid services Business Acumen 1203 45 [NICE mobile curently provides services in: Nt considering France where itpartners with Yellow oe UK--whereit partners with'Finaphone’ acorn Common Sense & pipers iy Practcality pieeisaich too as Creativity 123 45 Energy & Fit 12345 58 casebook | ESADE MBA Consulting ClubNICE Mobile To be shown to candidate % of prepaid mobile ee) Italy 5 < 8 3| 2 3 Tey High 40-70% Medium 40-70% Japan eo High High oes Medium 40-7086 v A ally |ialia lla l]& ESADE MBA Consulting Club | casebook 59NICE Mobile ‘Suggested Approach - Part 1 Candidate should discuss key insights from chart but focus on the following two: = / = / High % and stable number of users Fast growing market with large prepaid segment 60 casebook | ESADE MBA Consulting ClubNICE Mobile _ i ee Prompt - Part 2 w fof the two markets would you recommend to prioritize and why? Support your answer with both qualitative and quantitative analysis Estimate potential revenue for our client based ‘on capture of 196 of the market share in both Inca and aly. Guide - Provide only if requested tealy India Population: ~60 milion Population:~1. bition Mobile penetration rate:~95% ‘Mobile penetration rate: 70% 9% of prepaid users: ~20% Sof prepaid uses:~20% ‘Avg revper customer: $30/per month ‘Avgrevenue per customer: 50/per month Market entry relatively easy due t EU membership Markets highly liberalized and ey fr foreign companies to ‘Suggested Approach - Part 2 = / = / {50m = 958 * 90% 1.3 milion customers 1.1b 70% * 909% = 693 milion customers (51.3 milion $30)°19% =~515 million (702 milion"$10)"196= ~$70 milion Key takeaway: Although both markets should remain targets for NICE mobile the client should prioritize india due to its large and growing market along with its beralized foreign investment policies, ESADE MBA Consulting Club | casebook 61NICE Mobile Prompt - Part 3 Now that you have identified India as a prime choice, how can you go about ent seategy Guide - Provide only if requested There are 15"traitional mobile operators in india (none of them are virtual networks) “The top 3 hold ~50% marketshare One ofthe top 3 firms sa current partner of NICE mobile: Finaphone! Suggested Approach - Part 3 NICE mobile hae two options: Parmer with existing business partner in Europe Indian market includes unusually large number of mobile operators: hence large supply of potential partners to enter 62 casebook | ESADE MBA Consulting ClubPharma Sales mii ee Prompt - Part 1 Notes ‘Your cients a leading global plaerin the pharmaceutical market. ts sales in Europe for Valo a drug used teat a Analytical & Problem type ofheartdsease ae deteriorating. Solving Skil 12345 ‘You have been hired to understand why sales are deteriorating and to recommend actions to ‘overcome these factors. Guide - Provide only if requested Distributor prices: Diller per country, but stable Turkey Euros UK Euros Germany 10 Euros The number of patients vito use Valo to treat their disease has remained the same, their usage has not changed, therefore, the total numberof products sold isthe same. No substitute exists. ‘Assume the same numberof people have this disease in each country and Valvois the only curently used ‘medication, The patent forValvois nota problem. [Adoctor' prescriptions needed to purchase Valo. Pharmaceutical products can be sold across borders. Theres no need to consider other products in portflio. Communication & Presence la pana Business Acumen ert P23 4s Common Sense Practcality 1203 45 Creativity 123 45 Energy & Fit 12345 ESADE MBA Consulting Club | casebook 63Pharma Sales mi — ‘Suggested Approach - Part 1 O Find the source for the declining sales sales =Volume “rice Total sold volume is stable, but differs between countries ‘stable but differentin other markets outside of Europe: ‘There are no rerwictions for ditibutors where to buy their products Distributors buy from ow price markets and sellin high price markets. PERSE ea Crd Patient od cae) (ore > Product Flow > Influencing Parties 64 casebook | ESADE MBA Consulting ClubPharma Sales Busines Operations Prompt - Part 2 ‘What can be done to overcome the declining sales? Suggested Approach - Part 2 Align prices among countries When renewing contracts with distributors include a clause for non-cross border sourcing [Agree with distnbutors on volume-based discounts on European level considering price per market Company could enter distributor market Influence regulators to limit cross-border medicine sales Prompt - Part 3 Ifyou were to align prices among countries, what challenge would they face? ‘Suggested Approach - Part 3 Governments and other public institutions would protect the interests of their citzens and likely resist price increases ESADE MBA Consulting Club | casebook 65Rascal Beer mii eT Prompt Notes ‘our client i Rascal in, a beer company in an Afican country They have jst hired anew Managing Director whose Analytical & Problem frst task ns tov varius bars to beter understand the market. Mehears that some bas doi sll scl beer ‘Solong Stile because they can get the product Ls 8m § ‘Why are these bars unable to acquire the product? Communication & Guide - Provide only if requested Presence Distibutor markets fagmented “There ae approximately 1,000 main local distributors. ical aan IM ines Acumen 1203 45 Each bar has only one distributor. ‘The products placed fairly wel with many distributors, approximately 250 of them. Common Sense Practcality 1203 45 “There are 6-8 beersin the market. “The margins forall different beers along each step of the value chain are comparable Creativity 123 45 Energy & Fit 12345 66 casebook | ESADE MBA Consulting ClubRascal Beer Suggested Approach - Part 1 Understand why the bars can't get the product ‘Structuring the problem: Possible sources causing the problem (not exhaustive) _ > => E> E> Production planning process Transportation o distributors Actual Situation (provide only frequi Transportation to distributors takes between 2 days and? weeks Internal planning processis notaligned with demand by distibutore © Conclusion Favoring to promote other beers Distribution problems to bars Distributors are local so distibution to bars isnot Distributors eannot get the product mii ll fealiee Favoring other beers to sell Consumer preference for other Limited warehouse capacity beers Barshavealleapacityto store Rascal beer isthe #1 preferred beer beer by consumers ‘Margins for beer are the same, so beer selection onlyis driven by ‘The breweries are the problem, as transportation costs and internal planning are not aligned with distributors’ needs. Candidate should elaborate on ways to increase the effectiveness of the planning process. ESADE MBA Consulting Club | casebook 67Private Highway ww a ‘Seategy emetic Prompt - Part 1 Notes ‘The government of Germany is considering privatizing the highway between Murich and Hamburg, Your client, who Analytical & Problem is considering undertaking ths project, sks you whether ths good idea. Solving Stile How would you go about assessing this business question? taaue? Suggested Approach - Part 1 Communication & enti the various revenue and cot sources for such 2 Presence Project. i 123 4s avarice is Missing potential “oll fe by carsand trucks consireven Payments by restaurants and gas stations located Busines Acumen onthe highway 12345 Road advertising (Other services (eg. emergency roadside assistance) Investment costs Se Purchasing pice oflicense icality Building oftol stations P2345 Running costs of operations Maintenance of tol stations Catily Road maintenance ScRA P2345 Energy & Fit 123 45 68 casebook | ESADE MBA Consulting ClubPrivate Highway Prompt - Part 2 Business Operations ‘Seategy ‘Assuming thatthe annual operational costs can be covered by non tll-fe revenues (restaurants and petrol stations), ‘what toll should the client charge per one-way trip in order to achieve a two year payback of the investment? (Assume no discount rate) Guide ~ Provide only if requested Tolsare collected at iferent stations between the two cites. ‘Markt research estimates that the project could cost up to €BMilion aM License fee 5M Construction costs Le of tals) Distance between Munich and Hamburg i ~750 km (approx. 470 miles) milion commuters travel annualy betwen thet cies of which 1035 do so by car. asked, candidate may double revenues to take ino account passengers using the ‘motorway, but not traveling the entre distance between the two cities (only paying a partial toll Suggested Approach - Part 2 Recommended price: €10 TT ne ‘The German government should privatize the highway and charge a toll of €10. A large risk Is the inconvenience to commuters due to toll construction, ESADEMBA Consulting Club [casebook 69Private Highway aoe anim "sce see felis Prompt - Part 3 ‘What would be your approach to estimating the number of pay stations needed for the toll road? Suggested Approach - Part 3 ‘Too few pay stations would mean commuters could drive long distances without paying a toll, representing a loss of potential revenue. Therefore, a good measure to use is the number of exits. For example, assume one pay station every 2-3 exits. Prompt - Part 4 Now lets say that the government places pricing restiction and setsa maximum charge of Would you still recommend the bid? Suggested Approach - Part 4 Yes - it would simply reduce payback to 3-4 years; still a small payback period by construction standards. Other revenue opportunities (e.g. advertising, retail space) could also be explored to generate additional revenues. 70 casebook | ESADE MBA Consulting ClubItalian Food Expansion ni! ‘Stategy eet Prompt - Part 1 Notes ‘The cient is an tain foods manufacturer who wants to grow the company quickly. They are are present in Europe Analytical & Problem and produces small range of product. Solving Skil ‘You have been hired to come up with feasible growth ideas. poe ss Guide - Provide only if requested Communication & ‘Markets: Italy, Spain, Switzerland, Slovenia, Germany, and Presence Asta [eeu 5 Italy makes up for 40% of EBITDA Business Acumen 1203 45 Products: Dry pasta, canned vegetables, tomato sauce, and fruituice Total company EBITDA: «200M pee Channels Grocery stores and supermarket chains = Coane ath No needtotakeVATinto consideration ce Practical 1234s Creativity 123 45 Energy & Fit 12345 ESADEMBA Consulting Club | casebook 71Italian Food Expansion ines Operate _ ——_ Seategy Suggested Approach - Part 1 Using the new/existing ~ product/market matrix as a structured entry into the case, ‘candidate should explain each quadrant and quickly analyze them: Products Existing New | within existing markets. feasible way, as the GB | Thecompany wouldneed | clienthas established “Se | substantial investment in relationships and could S| marketing efforts ‘cross-sell new items. 3 v ; = Entering a new market with an existing product is High risk strategy. 72. casebook | ESADE MBA Consulting ClubItalian Food Expansion i ee Prompt - Part 2 ‘The client likes your recommendation and decides to produce a new product: olive oil Whataare the things the company should consider before kick-off? Suggested Approach - Part 1 Some considerations include: Market size Marketing, ie. 4 Psin collaboration with distributors [Additional profit from the new product, ie. revenues and costs Logistics Getting on the shelves of existing distributors Supply High quality or low cost approach? What is the differentiator? Production and capacity Distribution, Le. widespread or exclusive Prompt - Part 3 Determine the market size. How much olive oil would you estimate is consumed in Italy? Whats the value of this market? Suggested Approach - Part 3 Population: ~60 milion Average consumption of olive oll per month Average price per bottle: €7.50 Average household: 3 people peer household: 1 bottle Calculation for value: 20M x €7.50.x 12 = Number of households ~20 million Size of one bottle: 750 ml €1.8bn ‘Annual consumption: 20M x 0.751x 12 = 180 million liters ESADE MBA Consulting Club | casebook 73Italian Food Expansion i aa ‘cucgy ene foals Prompt - Part 4 Let's focus on financials: Estimate the additional profit in terms of EBITDA (ignoring VAT and potential additional Capex requirements). Do youthink the client should sell olive oil? Suggested Approach - Part 4 Revenue cos SGA Market share estimation ~5% What are usual COGS of a FMCG General & Admin. Cost: (given when asked to) manufacturer? Fair estimation: 10% of revenues = €9M 5% of €1.8bn = ~€90M Fair estimation: 50% of revenues Sales & Marketing & sales (shelf space incl) : Fair assumption: 25% of revenues = €22.5M EBITDA 90M ~ 645M ~ €9M ~€22.51 = €13.5Mestimated E8ITDA Conclusion Yes, the client should begin producing olive oil. Based on the calculation (13.5 over 200), the client can anticipate an 6.75% increase in EBITA over the whole company. 74 casebook | ESADE MBA Consulting ClubBanks Wedding ni! ‘cucgy ene Prompt - Part 1 Notes ‘Your cients one of Germany's largest private banks and considering the acquisition of one ofits vals (Germany's Analytical & Problem 3rd largest private bank, Solving Skil Which factors/synergies should be considered in order to evaluate the usefulness and fit of the taaue? acq Qn? Guide - Provide only if requested Banka: Strong domestic retail cient business Market leaderin SME business Manly focused on domestic markt strong in some Esstem European countries Less than average CostIncome-Ratio wns systems (ferent fom Bank) Bank 8: Solid domestic retailand private dient base Good in Wealth Management, Home market Germany also strong in other foreign countries (especialy LatAM) (OwnsIT systems (itferent from Bank A) Communication & Presence 123 45 ia porns Business Acumen 1203 45 Common Sense Practcality 1203 45 Creativity 123 45 Energy & Fit 12345 ESADE MBA Consulting Club | casebook 75Bank’ Wedding 4 Suggested Approach - Part 1 © Breakdown of main considerations Eke Ey kw Examples + Geographies + Best practice sharing + Capital increase + History + Markets (cost-income ratio) + Cash + Vision & Mission + Products + staff + Shares + Goals + Segments + Systems + Financial + Working + Property, Plant and Leverage environment Equipment + Acquisition: + Compensations financing 76 casebook | ESADE MBA Consulting ClubBanks Wedding saan ent ‘Seategy Prompt - Part 2 Estimate the value of the cost implementation this newly-formed company could ‘generate through consolidation? Guide - Provide only if requested Bank A BankB ae Headquarters: Franke Frankfurt staf 15000 10000 No.of buildings: ® 5 Iowragecapacty: 1750 2000 ‘Average salary: 30900 «0000 Estimated FTE 10% combined workoce veduction post merger Severance Package: 50% annual salary Estimated systems €10M ‘implementation costs: than supply (2 subs for 5 buyers), US $3.78b +5033 =$4.11 billion government should negotiate EE eee for higher prices with National (2*$300m"0.7) (1-02) =$336m Scientific Institutions 6 countries” 3 subs ($300m"6"3) 0. ESADE MBA Consulting Club | casebook 101IT Cost-Cutting ww ‘cucgy ene Prompt - Part 1 Notes Aarge European Retail Bank has been suffering under the recent nancial rss and its CEO is desperately looking for Analytical & Problem ‘ways to cut costs. Ona Sunday afternoon, she looks through the bank’ controling reports and stumbles upon large Solving Skil chunk ofeosts MT. Teams Monday morning she calls you and asks: Do you think we can save costs here? Communication & Presence Guide - Provide only if requested 1203 4 5 ‘Total costs:€300m Number of employees: 12.000 Business Acumen 12345 ‘Available benchmarks: Apes ~ Rata bank of £2000 employees spands ae Comman Senizth Ba Practialty + Corporate bankof 12.000 employees spends 400m on IT 1203 45 + Investmentbankof2.500 employees spends €100m on IT Creativity 123 45 Energy & Fit 12345 102 casebook | ESADE MBA Consulting ClubIT Cost-Cutting ‘Suggested Approach - Part 1 Pinca costs in the financial services Eo ‘The frst step isto find outhow the banks_IT costs ‘compare to the industry. A benchmark analysis. isrequiced, Simple way to benchmarkIT costs: average IT cost per employee 186m / 12,000 employ ~€15,500 peremployee 400m / 20,000 employ ~€20,000 peremployee Se 100m /2,500 employees = ~€40,000 per employee Client bank average IT cost per employee: €300m / 12,000 is €25,000 euros of IT cost per employee ‘cucgy ene foals eee Pee ree nes ‘What can you conclude from this data? investment banks have higher IT requirements (because of ‘wading, etc) and therefore larger costs. + Corporate banks and retail banks ae fairly comparable in their ITspend per employee + The most useful benchmark is obviously the retall bank. Realistically, is this enough of a benchmark to make a recommendation? No, one would need more comparables. What are the factors thet determine @ useful benchmark? + Size (economies of scale) industry and sub-sector (retail vs corporate vs bank) + Location (labor costs) Conclusion: The other retail bank has much lower costs while having same amount of ‘employees, therefore there must be an opportunity to lower IT costs. ESADE MBA Consulting Club | casebook 103IT Cost-Cutting busines Operon: =! a Prompt - Part 2 The CEO sees this and becomes very motivated to be able to slash costs in T. How can she do this? Guide - Provide only if requested cost structure isa Personnel: €150m Depreciation: €75m Licenses: €50m Others: €25m ‘Suggested Approach - Part 2 Gain an understanding ofthe IT cost structure in order to identify opportunities to cut costs Candidate should identify that depreciation represents almost 25% of total lT costs, Prompt - Part 3 What does the depreciation account for? Suggested Approach - Part 3 Depreciation ison all the machinery where applications are hosted (mainframes, servers, networks, etc) 104 casebook | ESADE MBA Consulting ClubIT Cost-Cutting Js Gin ey neat foals Prompt - Part 4 ‘Two companies have stepped forward with offers to reduce our cliente’ depreciation costs, They offer the following terms: company A: Offers Company B: Off ice at cost of €10m, estimated reduction in depreciation costby 40% and personnel costby 10%. services atcostof 15m, estimated reduction in depreciation cost by 20% and personnel cost by 25%. What offer should the client choose? Suggested Approach - Part 4 Company AIT savings: (€1500m x 908) + (€7Sm x 60% Total saving opportunity using Compeny A:€45m- €10m = €35min savings ‘Company® IT savings: (€150m x 75%) + (€75m x 80%) = €52.5m Total saving opportunity using Company B: €52.Sm-€1 Sms €37.5m ‘The savings generated are relatively similar. Due to the higher cost and the greater headcount reduction involved with ‘Company B, candidate should recommend Company A. ESADE MBA Consulting Club | casebook 1051 FINAL ) NOTESCase & Author List ase 1: Heathrow Airport ‘Author: Alex DF Gash Case 2: Mobile usage in Spain ‘Author: Alex OF Gash ase 3: US Household Debt ‘Author: Alex DF Gash Case 4: Window supplier ‘Author: Alex DF Gash Case 5: Restaurant in Buenos Aites ‘Author: Alex DF Gash Case 6: Duke Meadows Golf Club ‘Author: Alex DF Gash Case 7: Gracia Football Club ‘Author: Alex DF Gash case 8: NICE Mobile Author: Alex DF Gash Case 9: Pharma Sales ‘Author: Mare Andre Lein Case 10: Rascal Beer ‘Author: Mare Andre Lein Case 11: Private Highway ‘Author: Alex DF Gash, Mare Andre Lain Case 12: talian Food Expansion ‘Author: Thomas Gut case 13: Bank's wedding ‘Author: Dieter Koehler Case 14: Car Manufacturer ‘Author: Francois Deconinck Case 15: Market Entry into China ‘Author: Alex DF Gash, Case 16: The Cost of Health, Author Lilian Bautista ase 17: Museum Opening ‘Author: Alex DF Gash, Lillan Bautista Case 18: Green Airline ‘Author: Alex DF Gash, illan Bautista Case 19: US Submatine Sale ‘Author: Kathryn Montbriand case 20: IT Costs Author: Paul Fattnger Please note that all cases are property of SADE Business Schoo! and are protected by copyright regulations ESADE MBA Consulting Club | casebook 107Special Thanks fee. om, Club Alex De Fursac Gash | Principal Author alex.gash@esade edu Lillian Bautista lilian [email protected] Kathryn Montbriand [email protected] Francois Deconinck francois [email protected] Helga Kirchner | ESADE MBA Career Services helga [email protected] 108 casebook | ESADE MBA Consulting Club Michael Yu | Principal Designer michael [email protected]