Case Prep 201

Case Prep 201

VP of Casing
Christopher
Lam | Raymond Wang
Casing
Basics
Frameworks

Exhibits

Reading Exhibits

Live Practice

MCSC 2016

Agenda
Case Prep 201 Overview
1.
2.
3.
4.

Review of 101
Frameworks
Exhibits
Live Case

Casing Basics

Frameworks

Exhibits

Live Practice

Recap and clarification: Aligning the issue at hand

What am I
recapping?

What am I
clarifying?

Casing Basics

The recap should be a brief

review of the prompt, focusing
on the primary issue at hand.

Clarifying questions should be

high level questions that affect
your understanding of, and
approach to the issue.

Frameworks

Exhibits

Do
Repeat the key issue at
hand
Include high level context
Dont
Recite every piece of
information from the
prompt

Do
Keep questions high level
Ask about pieces of the
prompt you do not
understand
Dont
Ask specific, detail-oriented
questions

Live Practice

The framework is the roadmap to a case solution

A strong framework is MECE

Mutually Exhaustive
Buckets or categories of factors that effect the
case should not overlap

Casing Basics

Frameworks

Collectively Exhaustive
The framework should cover all factors that
could potentially influence the issue at hand

Exhibits

Live Practice

Example framework
Profitability Framework

Profit

Revenue

Price

Costs

Volume

Driver #1

Sub-driver A
Sub-driver B
Sub-driver C

Casing Basics

Variable x
Volume

Fixed

Driver #2

Frameworks

Sub-driver A
Sub-driver B
Sub-driver C

Driver #3

Exhibits

Sub-driver A
Sub-driver B
Sub-driver C

Live Practice

Lets Practice! (OldPharma Acquisition Strategy)

Example #1
OldPharma has a long, successful tradition in researching, developing, and selling
small molecule drugs. This class of drugs represents the vast majority of drugs
today, including aspirin and most blood-pressure or cholesterol medications.
OldPharma is interested in entering a new, rapidly growing segment of drugs called
biologicals. These are often proteins or other large, complex molecules that can
treat conditions not addressable by traditional drugs. OldPharma wants to jumpstart
its biologicals program by acquiring BioFuture, a leading biologicals start-up based
in the San Francisco area. BioFuture was founded 12 years ago by several prominent
scientists and now employs 200 people. It is publicly traded and at its current share
price the company is worth about $1B in total. OldPharma has asked you to
evaluate the potential acquisition of BioFuture, and provide a go/no go
recommendation.

Casing Basics

Frameworks

Exhibits

Live Practice

Lets Practice! (OldPharma Acquisition Strategy)

BioFuture

OldPharma

Biologicals Market

Competition

Drug Pipeline

Drug Pipeline

Size

Main competitors

Drug Portfolio

Drug Portfolio

Growth Trends

Market Share
Distribution

Value Chain
R&D
Manufacturing
Distribution

Value Chain

Regulations

Customer Segments

Customer Segments

Drug differentiation

Manufacturing
Capacity

Acquisition Price

Casing Basics

Frameworks

Exhibits

Live Practice

Lets Practice! (Dry Wall Manufacturer)

Example #2
Our client is Durrmaurer, a dry wall manufacturer, and is concerned about a
SturdyDry, new player coming into the market. The new player is perceived to be a
low price player and our client is considering lowering its price by 10%. The client
seeks our advice regarding its options.

Casing Basics

Frameworks

Exhibits

Live Practice

Lets Practice! (Dry Wall Manufacturer)

Durrmauer

SturdyDry

Dry Wall Market

Product Differentiation

Product Offerings

Profitability
Revenues
Costs

Customer Segments

Customer Segments
Price Sensitivity
Preferences

Key Strengths/
Weaknesses

Distribution

Competitors
Saturation/MS
Response
Potential Disrupters/
Substitutes

Growth and Trends

Brand Positioning
Value Chain

Casing Basics

Frameworks

Exhibits

Live Practice

Lets Practice! (Machine Company Market Entry)

Example #3
Our client is Machine Co. a European specialty machine manufacturer. The company
researches, designs, and manufactures a variety of machines from underwater drills
to semi-conductor chip fabricating machines. The machines are developed based on
specific requirement of a customer, as well as brand products which are then
marketed and sold to niche customers. One of Machine Co.s brand products is an
injection molding machine (XG 43). This machine injects and molds plastic at high
temperatures to create specific plastic products. XG43 is renowned for fabricating
high quality products with a nine-sigma defect rate. The quality of products is
unmatched by any other existing machine. Although XG43 has strong and profitable
market share in Europe, it is unable to sell any machines in the US. Over the past
few years, Machine Co. has made two unsuccessful attempts to penetrate the US
market. You have been retained by Machine Co. to evaluate whether a third attempt
is warranted, and if so, how can the attempt be made successful.

Casing Basics

Frameworks

Exhibits

Live Practice

10

Lets Practice! (Machine Company Market Entry)

XG43
Functionality/
differentiation
Price Point
Production cost
Distribution cost

Machine Co

US Market

Entry Methods

Customers

Market Size

Organic

European market
success

Existing Products

Partnership

Competitive Landscape

Acquisition

Experience with the US

Market
Distribution
Branding

Regulation/Entry
Barriers
Import taxes

Casing Basics

Frameworks

Exhibits

Live Practice

There are many different kinds of exhibits

Matrices

Casing Basics

Tables

Graphs

Price

Quality

Function

Product 1

100

High

Low

Product 2

50

Med

High

Product 3

60

Low

Med

Product 4

90

High

High

Frameworks

Exhibits

Live Practice

Tips to handling exhibits effectively

The interviewer hands you an exhibit and asks you to provide your thoughts
1. Ask for 10-15 seconds to read the exhibit. Do NOT speak without having processed
the information
2. Clarify any information that is unclear
3. Pay attention to chart titles and axis
4. If applicable, set up charts and do calculations that will help progress the case
5. Mention takeaways and relate them back to the case

Casing Basics

Frameworks

Exhibits

Live Practice

13

Ex 1: What insights can you draw from the following?

The client is a company that manufacturers specialty epoxy countertops for use in
laboratories. What insights does the following information provide?

Attribute Importance
5
4.5
4
3.5
Importance

Epoxy

2.5

Phenolic
Ceramic

Laminate
1.5
1
0.5
0
Chemical Resistance

Casing Basics

Heat Resistance

Frameworks

Hardness

Cost

Exhibits

Design Features

Live Practice

14

Ex 1: Sample Insights
A few takeaways from the data:
1. Ceramic is the most expensive countertop to manufacture
2. Customers value chemical resistance the most and design features the least
3. There is little material difference between epoxy and phenolic countertops, although
phenolic countertops have a minor cost advantage
4. Laminate countertops cost the least but have poor performance

Casing Basics

Frameworks

Exhibits

Live Practice

15

Ex 2: What insights can you draw from the following?

Our client is a large, multinational consumer products company that has always had a
premium product strategy. It has never targeted the low income segment before and
doesn't have a low income strategy, but given the growth of this segment, our client is
considering entering the low income segment. What information can be derived using
the following table?

Total Category
Sales (US$M)

Client Category
Sales (US$M)

Total LI
consumer
spend (US$M)

LI consumer
spend on client
(US$M)

Shampoo

400

100

90

30

Cold Medicine

250

50

75

7.5

Diapers

300

150

100

25

Baby Food

300

100

100

30

Product/
Category

Casing Basics

Frameworks

Exhibits

Live Practice

16

Ex 2: Sample Insights
An example table is as follows:

Product/
Category

Total Category
Market Share

LI Market Share

Total Opportunity

Shampoo

25%

33%

Cold Medicine

20%

10%

$7.5M

Diapers

50%

25%

$25M

Baby Food

30%

30%

If we can bring our LI sales to the level that our total sales are, we are looking
at a $32.5M opportunity. Lets further examine each category to see if we
should pursue the LI market
Casing Basics

Frameworks

Exhibits

Live Practice

17

Questions

Live Case
Practice

Casing Basics

Frameworks

Exhibits

Live Practice

18

Exhibit 1

SSS
Change

Price per Item

SSS
Change

30%

Number of Items

SSS
Change

30%

Customer Traffic

30%

R = 0.82

R = 0.04
25%

25%

20%

20%

R = 0.04

25%
20%

15%

15%

10%

10%

5%

5%

10%

0%

0%

5%

-5%

-5%

-10%

-10%

-15%

-15%

-20%

-20%

15%

0%
-5%

-25%
-10%

0%

10%

20%

-25%
-20%

-10%

0%

10%

# of items change

Unit Price Change

Casing Basics

-10%

Frameworks

Exhibits

20%

-15%
-20%

-10%

0%

10%

20%

30%

Monthly Traffic Change

Live
LivePractice
Practice

19

Exhibit 2

Average Price ($) per Menu Item

$12.00

$10.95
9.95

9.5

8.75

Chain 3

Chain 4

$9.00

$6.00

$3.00

$0.00
Client

Chain 1

Chain 2

Items per bill

4.4

4.6

4.1

4.7

3.9

Margin

30%

28%

27%

27%

16%

Casing Basics

Frameworks

Exhibits

Live
LivePractice
Practice

20

Exhibit 3

9+

100%
7

80%

60%

Occupancy During Peak Hours

8
6
5
6

40%
2
20%

2
0%

1
Party size

Casing Basics

Frameworks

Table size

Exhibits

Live
LivePractice
Practice

21

Questions

Exhibit 3
Explained

Casing Basics

Frameworks

Exhibits

Live Practice

22

Exhibit 3 Explained

9+

100%
7

80%

60%

Occupancy During Peak Hours

8
6
5
6

75% Efficient

40%

50% Efficient
2
20%

2
0%

1
Party size

Casing Basics

Frameworks

Table size

Exhibits

Live
LivePractice
Practice

23

Questions

Questions?

Casing Basics

Frameworks

Exhibits

Live Practice

24