About Case Interviews

What is a Case Interview anyway?

Simulation of a business problem. Similar to what our associates encounter every day. Series of open-ended questions. Theyre designed to stimulate your conceptual, quantitative, analytical and most importantly creative abilities.

There are several types of cases. Each designed to assess different skills.

Classic Case: o Should an organization add capacity? o How should an organization react to a new competitor? o Should an organization enter/exit a new/old market? o Measures: Your broad functional skills Your big-picture perspective Your comfort with detail and analysis Special Case: o Why are manhole covers round? o Whats the estimated weight of a Boeing 747? o What will interest rates do next? o Measures: Your comfort with ambiguous business challenges Your level of creativity

What are we looking for?

Logical skills Analytical/reasoning skills Conceptual problem-solving abilities Critical path thinking Flexibility

What do we mean by

Problem-solving ability? o Can you identify the key issues of the case while accurately and methodically reaching the solution? Critical path thinking? o Can you use clues that build on each other while staying on track and focusing on whats relevant? Flexibility? o Can you adapt your answers to a changing situation?

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About Case Interviews

What do you need to bring?

Your logical business sense. o How do decreasing marginal costs affect profitability? o What effect will fixed costs have on the result? Your mathematical aptitude. o From basic mathematics to Algebra Probability Weighted averages Unit conversion Your strategic interpretation skills. o Can you ... Interpret your answers impact? Assess alternatives? Keep a grasp on the big picture as well as the minor details? Your presentation skills. o Can you ... Clearly state your thoughts and synthesize information? Explain how your answer changes in the face of changing variables? Defend your answer?

You will be solving real-life problems with real-life objectives:

Operational efficiency maximization Product profitability Market expansion/product development Financial decision making Profit maximization Breakeven points Strategic pricing and planning

What Case Interviews Are NOT:

Not a means of intimidation Not the only deciding factor Not easy

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About Case Interviews

A Sample Case:

Background Information o You are a manager at a company that markets various products and services and that is looking to diversify. o You receive some information that indicates magazine publishing may be interesting. o You are considering developing a new magazine but are not sure how profitable it might be. What are some of the issues you must consider when evaluating the business?

Things to consider o Defining the target market o Competition (# of competitors, fragmentation, brand name) o Build off of core competencies o Barriers to entry o Business cycle stage o Method of measuring viability o Opportunity cost The next step is to understand the economics of the business. What are the profit drivers in the magazine publishing business?

Main profit drivers of the publishing business include ... Sources of Revenue Subscriptions Newsstand sales Advertising Customer lists Internet Costs

Printing Distribution Content development Marketing/promotions

Through some initial research you have been able to determine the following ... o o o o o o You can charge $25 for an annual subscription of 50 issues Lets ignore newsstand sales for now You can generate $1 in advertising revenue per issue for each subscription Printing and distribution costs are $1 per copy per issue Content development costs run $1 million per year Lets ignore marketing expenses for now

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About Case Interviews How much profit will you generate a year from one incremental subscription? Subscription revenue per year = $25 Advertising revenue per year = $50 $1/issue x 50 issues Yearly production and distribution costs = $50 $1/issue x 50 issues Profit from one incremental subscription = $25 $25 + $50 - $50 How many subscriptions do we need to sell to break even? Profit (contribution margin) = $25 per subscription Magazine content development = $1 million per year Breakeven = $1 million/$25 = 40,000 subscriptions What about marketing costs? Your company has expertise in direct mail solicitation so you decide to use that method to market your magazine. Each piece of mail costs $.50. You are able to achieve a 2% response rate. How much does it cost you to sign up a subscriber? Cost per subscriber calculation Cost of mailing/response rate = cost to sign up one subscriber $.50/2% = $25 per subscriber Another way to calculate cost per subscriber: Assume you mail offer to 100 people Costs = $50 ($0.50 x 100 people) Responders = 2 (2% of 100) Cost per responder = $50/2 or $25 How will this affect your breakeven calculation? New break even calculation Old contribution margin Marketing costs = New contribution margin New contribution margin = $25 - $25 = $0 Ouch!

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About Case Interviews What can we do to make this venture better? Some possible considerations: Raise subscription prices Raise advertising rates Reduce production costs Increase response rate Make each response matter more; consider renewals and multi-year subscriptions
Additional Case Interview Tips:

Stay confident stay cool Show enthusiasm not frustration Be thorough avoid mistakes Ask questions Show your stuff

Additional Case Interview Resources:

Websites o http://www.joinbain.com/apply-to-bain/interview-preparation/default.asp has sample cases you can practice. o http://www.quintcareers.com/case_interview_resources.html has different resources including books on case interviews. o www.casequestions.com is all about case interviews. o http://www.mckinsey.com/en/Careers/Apply/Interview_tips/Practice_case _studies/Practice_Case_-_OldPharma/Case_Question_3.aspx has sample cases Credit Card Terms: o http://www.creditcards.com/credit-card-news/credit-card-glossary-termsfirst-credit-card.php Breakeven analysis: o http://fast4cast.com/break-even-calculator.aspx o http://accountingexplained.com/managerial/cvp-analysis/break-evenpoint-equation-method Capital 1 Case: o http://www.capitalone.com/careers/hiring/sample_step1.php? linkid=WWW_Z_Z_Z_CARHIBC_C1_01_T_CARHISA1

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About Case Interviews Consulting Terms: o http://managementconsulted.com/core-content/dictionary/ Other Sites: o http://careercenter.tamu.edu/guides/interviews/case.cfm? sn=prospectivestudents o http://www.acethecase.com/ o http://www.bcg.com/join_bcg/interview_prep/interactive_case/default.asp x o http://www.imahal.com/careers/management/interviews/interviews_case_t actics.htm o Leverage www.youtube.com and search case interviews Books o Vault Guide To The Case Interview by Mark Asher, Eric Chung, and The Staff of Vault o Case In Point, Complete Case Interview Preparation by Marc P. Cosentino

Capital One Confidential/ProprietaryCapital One does not provide, endorse, nor guarantee and is not liable for third party products, services, educational tools, or other information available through this site. Read additional disclosures.
6 Updated 10/24/2011