Case Interview Workshop

Dartmouth College
October 8th, 2004

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Objectives

Give you a glimpse into the world of strategy

consulting and the issues we address in our
work

Walk through one component of a sample

case interview

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Strategy Consulting

Advise corporations on their key strategic issues

- Decide which businesses to acquire, retain, or exit

- Pursue growth or profitability improvements within

existing businesses

- Assess market opportunities and competitive threats

- Evaluate internal priorities for management focus and

investment

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Ace The Case

Discussion
-Not a cross examination

Frameworks
-Structure your answer, but dont rely on a
framework that may not be relevant

Relax and be yourself

-We want to get to know you

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Photo Case Study: Background

Situation
-Our client, a photography company, currently
makes money by selling film and photo paper

Complication
-They have experienced declining profits over
the past five years and have hired Bain to
figure out what is wrong

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
What should our client do?

Background
-We have determined that our clients declining profitability due
to volume declines resulting from digital substitution
-As a result, the client is now considering a few new business
ideas to enter digital photography

Potential Action
-Our client has been approached by Kmart in order to place
kiosks within each of their stores
-Kiosks are self-serve stations that allow users to print their
digital photos on the clients paper

How do we evaluate the attractiveness of this opportunity?

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
What should our client do?
Step 1: Set-up a framework to tackle the question and communicate
it to the interviewer

Size the Market Opportunity Calculate Breakeven Demand

Make a Final Recommendation

Attack each piece one at a time

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Size the Market Opportunity

Step 2: Estimate the potential demand for digital prints per year
within a single Kmart store as an example

Top Down Bottom Up

Start with large number (e.g. total Start with small number (e.g.
relevant population) and number of K-mart customers per
progressively narrow down day) and progressively scale up

Exact numbers and order of steps are not important

Make assumptions that are reasonable
Once you finish the calculations, step away and ask
yourself, Does this number make sense?
If not, go back and refine your original assumptions
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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Size the Market Opportunity

Top Down Bottom Up

1M people in Boston How many people go to a single
- *10% are Kmart customers= 100K Kmart per year?
- *10% of customers go to Kmart to - 2500 customers per day
do photo finishing = 10K - *400 days/yr = 1M visits per year
- *5% of these customers use a How many digital prints will this
digital camera = 500 people
translate into?
- *average person prints 100 digital
- Average customer goes to Kmart ten
photos per year = 50K prints
times a year (1M/10) = 100K unique
customers
- *10% of customers go to Kmart to
do photo finishing = 10K
- *5% of these customers use a digital
camera = 500 people
- *average person prints 100 digital
photos per year = 50K prints

The potential demand for digital prints

in a single Kmart store is 50,000
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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
What should our client do?

Size the Market Opportunity Calculate Breakeven Demand

Make a Final Recommendation

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Calculate Breakeven Demand

Key Inputs
- Average price per digital print is $0.50
- Cost per kiosk is $1,000 (assume no other fixed costs)

- Average cost per digital print is $0.10

Calculations
- Breakeven: Revenue = Cost
0.5*Q = 1,000+ (0.1*Q)
0.4*Q = 1,000
Q = 2,500 prints

The client would have to believe that it could sell

at least 2,500 prints in order to take this action
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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Final Recommendation

Client Should Pursue if:

Market Opportunity > Breakeven Demand

50,000 > 2,500

Our client should place digital print

kiosks in each Kmart Store

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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.
Key Tips For Success

Listen carefully and make sure to answer the

question you were asked to evaluate
If confused, ask for clarification. It will be hard to
succeed on the case if you dont understand the facts
Structure, structure, structure. Use it, it will help you
Make sure you get to an answer
Always provide logical back-up to your answers, the
thought process is much more important than the
actual answer
React to verbal and physical cues from your
interviewer Remember, the interviewer wants you
to succeed on the case
Be yourself the interviewer wants to get to know
you
Relax, and have fun
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This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent.