Insider Guide ider G

Ace Your Case III: Practice Makes Perfect

2004 Edition

Helping you make smarter career decisions.

The WetFeet Research Methodology

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Insider Guide

Ace Your Case III: Practice Makes Perfect

2004 Edition

Helping you make smarter career decisions.

WetFeet Inc.
609 Mission Street Suite 400 San Francisco, CA 94105 Phone: (415) 284-7900 or 1-800-926-4JOB Fax: (415) 284-7910 E-mail: [email protected] Website: www.wetfeet.com

Ace Your Case III: Practice Makes Perfect

ISBN: 1-58207-298-1

Photocopying Is Prohibited Copyright 2003 WetFeet, Inc. All rights reserved. This publication is protected by the copyright laws of the United States of America. No copying in any form is permitted. It may not be reproduced, distributed, stored in a retrieval system, or transmitted in any form or by any means, in part or in whole, without the express written permission of WetFeet, Inc.

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Table of Contents
Ace Your Case III at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Interview Unplugged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 The Case Interview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Case-by-Case Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Market-Sizing Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Business Operations Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Business Strategy Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Resume Cases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

The Practice Range. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

Market-Sizing Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Business Operations Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Business Strategy Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Resume Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

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Nailing the Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

The Answers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Market-Sizing Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Business Operations Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Business Strategy Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Resume Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

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Business Strategy Cases

Overview
Business-strategy cases are the granddaddies, and demons, of the case-question world. Consultants love to use these questions because they touch on so many different issues. A good strategy question can have a market-sizing piece, a logic

Case-by-Case Rules

puzzle, multiple operations issues, and a major dose of creativity and action thrown in for good measure. Moreover, a complex strategy question can go in many different directions, thereby allowing the interviewer to probe the candidates abilities in a variety of areas. Again, strategy-case questions can run the gamut from complex, multi-industry, multi-national, multi-issue behemoths to a localized question with a pinpoint focus. Common types of strategy questions include advising a client about an acquisition, responding to a competitive move by another company in the industry, and evaluating opportunities for a new product introduction and pricing the product.

The Scorecard
Depending on the nature of the question, the interviewer can use it to assess anything and everything from your ability to handle numbers to your ability to wade through a mass of detailed information and synthesize it into a compelling business strategy. Of all the different types of case questions, these are also the most like the actual work youll do on the job (at least at the strategy firms). One other thing the interviewer will be checking carefully: your presentation abilities.

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Location
Strategy-case questions are fair game for any type of candidate. For undergraduates, they will often be more two-dimensional and straightforward. For MBA candidates, they will frequently have several layers of issues, and perhaps an international or other twist to boot. Although most strategy boutiques will use this kind of case as a mainstay in their recruiting efforts, firms with more of an operations focus may rely more heavily on operations questions.

Case-by-Case Rules

Succeeding at the Strategy Stumpers

Because business strategy questions can involve many different elements, they can inspire fear in the weak of heart. Although it is true that strategy questions can be the most difficult, they can also be the most fun. This is your opportunity to play CEO, or at least advisor to the CEO. You can put all of your business intuition and your hard-nosed, data-driven research to work and come up with a plan that will bring a huge multi-national corporation into the limelightor not. Does it matter that you just crafted a story about why a credit-card company should go into the Italian market when your best friend who interviewed immediately prior to you recommended against going Italian? No, not really. Unless, of course, your friend did a better job of exploring the case question. What does that mean? By going through this case book (and the other WetFeet Ace Your Case! Insider Guides), youre already a step ahead of the game. However, here are a couple of rules youll want to keep in mind as you tackle your strategy-case questions.

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Rule 1: Think frameworks! While analyzing a really juicy strategy question you

might be able to draw information and jargon out of almost every course in your schools core business curriculum. Dont succumb to temptation! Your interviewer will be much more impressed by a clear and simple story about how you are attacking the question and where you are going with your analysis. The best way to do this is to apply a framework to the problem. Just as with operations questions, this means setting out a plan of attack up front and following it through to conclusion. One other big benefit: Having a clear framework will help you organize your analysis.
Rule 2: Ask questions. Successful consulting is as much about asking the right

Case-by-Case Rules

question as it is about providing a good answer. Likewise, your solution to a strategy case will be much better if youve focused your energy on the right issue. To help you get there, dont hesitate to ask your interviewer questions. In the best case, he may help you avoid a derailment; in the worst case, hell understand your thought process as you plow through the analysis.
Rule 3: Work from big to small. Even though the strategy case you are examining

was the subject of a study that lasted several months, you probably have about 15 minutes to provide your answer. Therefore, its essential that you start by looking at the most significant issues first. Besides, this is a great discipline for future consultants. After all, the client will probably be paying for your time by the hour, so youll want to make sure that you are really adding value.

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Case 12
Your client is a large private equity firm. It is looking into rolling up the tow-truck industry; that is, buying many small- and medium-sized firms and combining them to create one, larger firm. It wants your help in assessing industry attractiveness. Key questions to ask:

What are the main issues?

The Practice Range

Outline for my answer:

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Again, a leading question. The interviewer is testing the candidates creativity. Candidate: Well, one idea might be to sell the product to an existing player. Another might be to go after different customersfor example, sell it to flower store owners. And a third idea might be to invest in research to see if the product has any other uses. The candidate has passed the creativity test nicely. Interviewer: Good thinking. I think you did a fine job on the case.

Case 12
Your client is a large private equity firm. It is looking into rolling up the tow-truck industry; that is, buying many small- and medium-sized firms and combining them to create one, larger firm. It wants your help in assessing industry attractiveness. Dont be intimidated by the jargon. This is a classic industry attractiveness question and should be treated as such.
Bad Answer

Candidate: Im going to use the 3C framework for this case: company, competition, and cost. First, Im going to talk about the existing tow truck companies, then the competition between them, and finally the cost of purchasing the individual firms.

Nailing the Case

The candidate has awkwardly tried to apply a framework that doesnt work in this case. The 3C framework should be used for new market opportunity questions, which is not the case in this example. The interviewer is going to be wary.

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Interviewer: What the client really wants to know about is the attractiveness of the industry; youve mentioned a couple of the aspects, but I didnt hear anything about customers or barriers to entry. Should we be considering those things as well? This is one nice interviewer. She is almost spoon-feeding the candidate a framework, which the candidate should easily recognize. Candidate: Ill get to that at the end; Ive never been a consultant before, so Im not too familiar with the frameworks. The 3C framework is one that works for me, so if you dont mind Im going to stick with it, even though it might be a little messy. Hopefully the candidate didnt make quotation marks with her fingers when she said framework. Interviewers are looking for your ability to be flexible and comfortable with new problems. Dont force-fit a framework.
Good Answer

Candidate: The client has asked me to assess industry attractiveness. This seems like a pretty good opportunity to use Porters Five Forces. So Im going to follow that framework. First, the buyers: what is the relative power of customers? Well, when you get your car towed, you certainly feel powerless! Humor is a little risky, but may break the ice a bit if you think the interviewer will enjoy the levity.

Nailing the Case

Candidate: I do think, though, that this is important. Customers need to get their car back, and must pay the exorbitant fees that are required to get their car out of the lot. In addition, they are somewhat price insensitive and willing to pay whatever it takes to retrieve their car. So, from a bargaining power of suppliers perspective, the industry is fairly attractive.

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The candidate has given a briefbut effectiveoverview of one of the Five Forces and come to a logical conclusion. Analysis of all of the categories can take a while, so its to your benefit to move quickly and let the interviewer stop you in areas where she wants more analysis. Interviewer: Sounds good to me. Whats next? Candidate: Lets talk about the bargaining power of suppliers. Again, I dont see suppliers having a lot of bargaining power over the tow truck firms. Im defining the suppliers as the companies that make the tow trucks. Im also assuming that there are several manufacturers of those trucks. Is this correct? Interviewer: Thats a good assumption. There are quite a few firms that manufacture tow trucks. Candidate: What about labor? Are there unions that I need to be concerned about? Interviewer: How does this relate to suppliers? Candidate: Well, if one union supplies all of the labor, for example, it will be able to exercise a significant amount of control over the labor force, which is one of the key supplies that a tow truck firm needs to operate. The candidate has demonstrated a broad understanding of supplier power. Interviewer: In the geography where the client is looking to roll up the industry, there are no unions.

Nailing the Case

Candidate: Okay. So, similar to buyer power, there doesnt seem to be a lot of supplier power in this industry. Its a good idea to summarize whenever you come to the end of a line of logic and, when relevant, relate it to other conclusions that youve drawn during your analysis. This gives you a chance to take a breath, and also gives the interviewer a window to ask follow up questions. If

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Who We Are
WetFeet is the trusted destination for job seekers to research companies and industries, and manage their careers. WetFeet Insider Guides provide you with inside information for a successful job search. At WetFeet, we do the work for you and present our results in an informative, credible, and entertaining way. Think of us as your own private research company whose primary mission is to assist you in making more informed career decisions. WetFeet was founded in 1994 by Stanford MBAs Gary Alpert and Steve Pollock. While exploring our next career moves, we needed products like the WetFeet Insider Guides to help us through the research and interviewing game. But they didnt exist. So we started writing. Today, WetFeet serves more than a million job candidates each month by helping them nail their interviews, avoid ill-fated career decisions, and add thousands of dollars to their compensation packages. The quality of our work and knowledge of the job-seeking world have also allowed us to develop an extensive corporate and university membership. In addition, WetFeets services include two award-winning websites (WetFeet.com and InternshipPrograms.com), Web-based recruiting technologies, consulting services, and our exclusive research studies, such as the annual WetFeet Student Recruitment Survey. Our team members, who come from diverse backgrounds, share a passion about the job-search process and a commitment to delivering the highest quality products and customer service.

About Our Name

One of the most frequent questions we receive is, So, whats the story behind your name? The short story is that the inspiration for our name comes from a popular business school case study about L.L. Bean, the successful mail-order company. Leon Leonwood Bean got his start because he quite simply, and very literally, had a case of wet feet. Every time he went hunting in the Maine woods, his shoes leaked, and he returned with soaked feet. So, one day, he decided to make a better hunting shoe. And he did. And he told his friends, and they lined up to buy their own pairs of Bean boots. And L.L. Bean, the company, was born . . . all because a man who had wet feet decided to make boots. The lesson we took from the Bean case? Lots of people get wet feet, but entrepreneurs make boots. And thats exactly what were doing at WetFeet.

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