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INDUCTIS How To Ace Your Interview Interview Workshop April 2002 Agenda Introduction Fit Interview Case Interview Sample Cases Proprietary and Confidential. inductis, Inc. 2 What Makes A Good Consultant Factors for Success: "The key factors for success in the management consulting field are qualities of character, intelligence, judgment, the ability to express oneself persuasively, self-confidence, [and] self-discipline." Problem Solver: "The consultant is a professional problem solver who likes solving problems for the thrill of it, for his/her own satisfaction. S/he likes to face a variety of problems frequently. S/he's not the kind of person who could sit for 20 years behind the same desk. " Team Leader: "The professional consultant must plan and organize much of his/her own work, must readily grasp and assume effective control of situations which are inherently unclear, and must be able to lead people over whom s/he exercises no authority." Source: 1968 Interviews with management consultants Proprietary and Confidential. inductis, Inc. 3 Types Of Interviews Typically the interviewing process is broken into a fit interview and a case interview. To receive an offer you must succeed at both interviews. Fit Offer Case Proprietary and Confidential. inductis, Inc. 4 The Fit Interview Proprietary and Confidential. inductis, Inc. 5 Overview The main purpose of the fit interview is to discover whether you will "fit" with the firm's culture and people. • To explore your personal integrity and ambitions • To learn about your interests and to see if they match those of the firm • To see whether you can "present" yourself in a coherent Objectives manner • To ascertain your level of knowledge and interest in consulting • To provide an opportunity for you to learn more about our firm Proprietary and Confidential. inductis, Inc. 6 Character Traits Explored In The Fit Interview Communication Skills Analytic and Quantitative Skills Leadership Ability Characteristics Teamwork Organization Ethics and Integrity Computer Skills Proprietary and Confidential. inductis, Inc. 7 Dos And Don'ts Of A Fit Interview Since the fit interview is designed to see simply if you match well with the firm, it is difficult to put forth a set of rules. However, there are some basic dos and don'ts. DO: • Relax and be comfortable • Express your own interests and expectations • Convey a coherent picture of yourself and your skills • Ask good questions • Demonstrate your knowledge of the firm (i.e. its culture and history) DON'T: • Get defensive or let nerves overcome you • Feign interest in subjects to impress the interviewer • Tell stories that confuse the interviewer or provide confusing images of who you are • Ask questions for the sake of asking questions • Appear ignorant about the position for which you are interviewing or about the firm with which you are interviewing Proprietary and Confidential. inductis, Inc. 8 The Case Interview Proprietary and Confidential. inductis, Inc. 9 Overview Case interviews seem to be one of the biggest sources of stress surrounding the interviewing process, but they don't need to be. If you understand what the interviewer is looking for, case interviews can be quite manageable. • To ascertain how you think through problems • To determine your ability to structure a logical Objectives argument • To test your analytic and quantitative skills • To give you a flavor for the types of problems consultants work on Proprietary and Confidential. inductis, Inc. 10 General Hints For Approaching Cases No matter what kind of case you face, there are a few guidelines you should always keep in mind. General Tips • Think first, then speak • Be as clear and concise as possible (e.g. 1, 2, 3) • Ask questions, don't just give answers • Make sure you are answering the problem being asked • Establish the scope of the problem before digging deep in one area • Always state your assumptions • Don't be afraid to take notes if there are a lot of facts • Be sure you explain your thought process/logic path • Select a solution and justify it • Don't forget possible alternatives • Read the newspaper the day of your interview; many times interviewers will pull their cases from the day's news Proprietary and Confidential. inductis, Inc. 11 United States Basic Statistics While you certainly shouldn't go and memorize the census report, there are certain statistics that you should be familiar with in order to help you solve cases. You should also be familiar with general demographic trends (i.e. Gen-Xers vs. Baby-Boomers and income distribution). Population of the world: 6.2 billion Population of the U.S.: 290 million Number of households in the U.S.: 105 million Number of adults in the U.S.: 210 million (18+ yrs.) 200 million (25+ yrs.) Number of cars per household: 2.5 Minimum wage: approx. $5 per hour Proprietary and Confidential. inductis, Inc. 12 India Basic Statistics While you certainly shouldn't go and memorize the census report, there are certain statistics that you should be familiar with in order to help you solve cases. Population of the world: 6.2 billion Population of India: 1000 million Number of households in India: 180 million Number of adults in India: 530 million (18+ yrs.) 440 million (21+ yrs.) Number of cars per Household: 0.02 Minimum wage: approx. 15 rupees per hour Proprietary and Confidential. inductis, Inc. 13 Interviewing Styles Every interviewer will have a different interview style. When explaining a case you must feel comfortable with each of the different approaches and be able to adapt your approach. Case Descriptions Detailed Problem • Detailed introduction of case • Specific problem to be Conceptual Problem • Brief introduction solved • A few starter facts • Many additional facts Two Extremes • Very broad description of available, if asked • Conversational feel problem (e.g. poor performance) • Few, if any facts available • “What do you think” throughout case interview responses to many questions Proprietary and Confidential. inductis, Inc. 14 Types Of Cases The types of cases you are likely to encounter will generally fit into one of three distinct groups. Strategy Types of Cases Special Cases • Engineering • Economics • Data Analytics • Miscellaneous Build-Up Proprietary and Confidential. inductis, Inc. 15 Strategy Cases Strategy cases generally involve one or more of the following three issues, but these certainly do not represent the universe of possible scenarios. Types of Strategy Cases Costs Marketing Revenues Proprietary and Confidential. inductis, Inc. 16 Frameworks For Approaching Strategy Cases – The Four P's While you probably do not want to make it obvious that you are using an economic framework to solve a case, employing the underlying logic should help you structure your argument and solidify your analysis. One popular framework is the Four P's: Product • What product do you want to sell? • What product are you able to produce? • What advantages does your product offer? • What price must you charge to make a profit? • What price are consumers willing to pay? • What price are your competitors charging? • Where is there a demand for your product? • Where are your suppliers located? • What distribution channels are being used? • Who is your target audience? • How do you reach them? • How much do you want to spend on promotions Price The Four P's Place Promotion and advertising? Proprietary and Confidential. inductis, Inc. 17 Frameworks For Approaching Strategy Cases – The Four C's Another helpful framework in approaching a strategy case is the Four C's. Customers • What do the customers want and need? • How will you satisfy those needs? • What is most important to the customers? • How much will they pay for it? • What are your competitors doing? • What are their strengths and weaknesses? • How are they meeting the customer's demand? • What is their cost structure? • What are your company's capacities: Competitors The Four C's Capacity - financial - organizational - production - marketing? • What are your strengths and weaknesses? • What is your cost structure? Costs - fixed costs - variable costs • How have your costs changed over time? Proprietary and Confidential. inductis, Inc. 18 Framework For Approaching Strategy Cases – Marketing Strategy Model While it is slightly more complex than the previous frameworks, the marketing strategy model provides an excellent frame of reference for marketing cases. Marketing Strategy Model • What are the costs? • What is the break even? • How long is the payback on my investment? Start Economics Consumer Analysis • What is the relevant market? • Who is buying and who is using the product? • What is the buying process? • How can I segment the market? • How does my product fit with my other products? • How will I differentiate my product? • How does the product life cycle affect my plans? Marketing Mix Distribution Competition • What are your company's strengths and weaknesses? • What are your competitor's strengths and weaknesses? • What is your relative size and position in the market? • How do your resources differ from those of your competitors? • How can my product reach the consumer? • How much do the players in each distribution channel profit? • Who holds the power in each distribution channel available? Proprietary and Confidential. inductis, Inc. 19 The Build Up Case While most cases fall into the strategy category, there are several cases that are build-up cases. These cases are meant to test your quantitative ability and general logical reasoning skills. Examples $ How many credit cards are there in the world? There are approximately 6 billion people in the world. Lets assume that a third live in areas where they cannot get credit cards (rural areas, poverty stricken areas, etc.). Of the 4 billion remaining lets assume three quarters are adults (in the U.S. it’s 4/5, but we have a slower birth rate than many countries). Of the 3 billion adults a third don't carry credit cards (they have bad credit, don't believe in credit cards, are unemployed, etc.). Of the 2 billion adults who carry credit cards, each carries on average of 3 cards (Visa, Mastercard, American Express). Resulting in 6 billion credit cards in the world. How many quarters are there in Yankee stadium during a sold out game? Yankee Stadium holds approximately 50,000 fans. There are approximately 150 additional people working at the stadium. Of the workers each either carry approximately 40 quarters or have 40 in their cash registers to provide change to customers for a total of 6,000 quarters. Of the fans approximately 4/5 are male. Of that 40,000 half are like my dad and have about 10 quarters in their pockets at any given time for a total of 200,000 quarters. Of the remaining 20,000 half have no quarters, and half have 6 quarters to ride the subway home for a total of 60,000 quarters. Of the 10,000 women half have 12 quarters for them and their husbands/boyfriends to ride the subway home, and half have 1 quarter to call someone in an emergency for a total of 65,000 quarters. For a grand total of 331,000 quarters in Yankee Stadium. How many people in the U.S. wear earrings? There are approximately 250 million people in the U.S. Of those about half are women. Of the 125 million women 4/5 are adults. Of the 100 million adult women about 3/4 wear either pierced or clip-on earrings for a total of 75 million people. Of the 25 million girls about 1/5 get their ears pierced or start wearing earrings each year and about 2/5 already have until the full 3/4 wear earrings by the time they are adults for a total of approximately 15 million girls at any given time. Of the 125 million men, 4/5 are adults. Of the 100 million adult men about 1/20 wear earrings (based on my personal experience, but obviously subjective) for a total of 5 million. Of the 25 million boys only about 1/50 have parents who will let them wear earrings for a total of .5 million boys. For a grand total of 95.5 million people wearing earrings. Proprietary and Confidential. inductis, Inc. 20 Special Cases There are a variety of other types of cases which you may be asked. They will focus on your ability to think conceptually, business acumen, and creativity. Examples Engineering Case What is the minimum number of 1 " x 1" x 1" cubes needed to make a 10" x 10" x 10" cube? • First assume that the cube is hollow, then since each side must be 10 inches in dimensions ten 1" x 1" x 1" cubes are needed for each side. However, each corner piece will have 3 sides showing, while each outside non-corner piece will have 2 sides showing and each inside piece will have only 1 side showing. Thus, we must break down the problem into the three distinct types of pieces. – Corner Pieces: A cube has 4 corner pieces per each of its 6 sides. Since each corner piece has 3 sides showing, only 8 cubes (4 x 6 ÷ 3) are needed to create the corners. – Non-corner outside pieces: For the non-corner outside pieces a total of 8 (10 - 2 corners) are needed per direction. Thus, since there are 4 directions per side a total of 32 (8 x 4) cubes are needed per side. Since each non-corner outside piece has two sides showing a total of 96 cubes (32 x 6 ÷ 2) are need to create the noncorner outside pieces. – Inside pieces: A total of 64 inside corner cubes are needed per side to create the inside pieces. (i.e. 100 - 4 [corners] - 32 [noncorner outside]). Since, there are 6 sides a total of 384 cubes will be needed for the inside. – Total: Thus, 488 1" x 1" x 1" cubes (8 + 96 + 384) are needed to create a 10" x 10" x 10" cube. • Alternative Solution: Subtract the inside cubes from the volume (i.e. 10 x 10 x 10 - (8 x 8 x 8)= 488 cubes). Economics Case Assume that the overhead cost to produce a computer is $10,000 and the variable cost is $5,000 per computer, graph the variable cost, fixed cost, total cost and total cost per unit. $60,000 Fixed + Variable Costs 50,000 40,000 30,000 20,000 10,000 0 Variable Cost Fixed Cost Miscellaneous Why are manhole covers round? So that they can't fall in. To provide the greatest opening width for the least total opening area and therefore save on material costs. 0 1 2 3 4 5 6 7 8 9 10 Volume (# Computers) $16,000 ($/Unit) 12,000 8,000 4,000 $0 1 2 Total Cost Variable Cost 3 4 5 6 7 8 9 10 Proprietary and Confidential. inductis, Inc. 21 Volume (# Computers) Data Analytics Cases Data Analytics cases will address specialized statistics, mathematics and logical knowledge Examples Probability and Statistics A red and a white die are rolled. Let event C = {5 on red die} and event D = {sum of dice 11}. The 36 outcomes have equal likelihood. Are events C and D independent? Likelihood Estimation Let X1, X2, …,XN be a random sample from geometric distribution with p.m.f. f(x;p) = (1-p)x-1, x=1,2,3… What is the maximum likelihood estimator of p (derive)? Mathematical Without finding their numerical values, which is greater, e^(pi) or (pi)^e? • Of the 36 events: - 6 are favorable to C, - 2 are favorable to D, - and 1 is favorable to C ∩ D. Therefore: • P(C) * P(D) = (6/36)*(2/36) = (1/108) ≠ (1/36) = P(C ∩ D) • Hence, dependent events Likelihood function is L(p) = (1 – p)x1-1 p(1 – p) x2-1p…….(1-p)xn-1 p = pN (1 - p) xi-n , 0 < p <1 Ln L(p) = nlnp + ( ni=1 xi-n) ln(1-p) 0 < p < 1 Since we restrict p to (0, 1) , take derivative: d ln L(p) = n - ni=1 xi-n Solve for p: P= n = 1 1 x X n i=1 i => M.I.E(p) = p = n = ni=1 xi X ^ = • e^(pi) • Put x = pi/e - 1 in the inequality e^x > 1+x (x>0) 0 Proprietary and Confidential. inductis, Inc. 22 Data Analytics Cases - Sample SAS Case* SAS cases are designed for data analytics candidates to test basic SAS knowledge as well as approach towards datasets SAS Dataset SAS dataset with yearly revenues by state for three telecommunication companies Sample Problem Create a new variable, which contains the means over time for each company Problem Rationale Company Verizon Verizon Verizon Verizon Verizon Verizon AT&T AT&T AT&T SNET SNET SNET State New York New York New York New Jersey New Jersey New Jersey New York New York New York Connecticut Connecticut Connecticut Year 1990 1991 1992 1990 1991 1992 1990 1991 1992 1990 1991 1992 Revenue $100MM $120MM $130MM $90MM $100MM $95MM $100MM $110MM $90MM $70MM $100MM $80MM •A simple problem that would be given to anyone that claims they have experience with SAS, or those that admit to having moderate experience. There are many ways of getting to the answer, but what is critical is whether candidates start running loops over the data or use some of SAS’s in-built basic functionalities, such as PROC MEANS, SUMMARY, SORT, DATA step, etc. • Usually, this type of a problem can be easily extended to become more involved, but this is always one of the first steps. •This type of a question reveals how candidates think about datasets. * Fresh BA’s are not expected to have SAS knowledge. Sample case included for illustration only Proprietary and Confidential. inductis, Inc. 23 If You Get In A Jam… Pause to collect your thoughts. Remaining silent is better than blurting out an incoherent thought Recount what you already know to the interviewer. By reviewing what you know about the case, the next step often becomes more clear Don't give up. Interviewers are judging your poise and maturity in addition to your problem-solving skills Proprietary and Confidential. inductis, Inc. 24 Summary There is no single “right” answer… ... but there are inappropriate approaches • Ignoring or forgetting important facts • Force-fitting a framework that just doesn't work • Defending impractical solutions Proprietary and Confidential. inductis, Inc. 25 Additional Resources To Consult Before Your Interview • • • • • • • Ace Your Case! The Essential Management Consulting Case Workbook - Wet Feet Press 1-800-926-4JOB Competitive Advantage - Michael Porter Competitive Strategy - Michael Porter The Consulting Resource Packet - Wharton Career Development & Placement (Packet #13) Harvard Business School Career Guide: Management Consulting - Harvard Business School Press 1-800-545-7685 The Ten Day MBA - Steven Sillbiger Case Interviews at Consulting Firms Websites - http://www.mckinsey.com/careers/apply/solveacase/index.asp - http://www.bcg.com/careers/interview_prep/practice_cases.asp - http://www.bain.com/bainweb/join/interview/practice_overview.asp • Management Consulting On-line - www.cob.ohio-state.edu/~fin/jobs/mco/mco.html Proprietary and Confidential. inductis, Inc. 26 Sample Cases Proprietary and Confidential. inductis, Inc. 27 Special Cases The following sample cases have been compiled from Kellogg’s, Stern’s, and Tuck’s Consulting Club Guides to management consulting cases. They are intended to assist you in preparing for your case interview. The suggested approaches are by no means the only approach you could take, but rather are the ones authors of these guides thought were most appropriate. Case #1 You are visiting a new client who sells golf balls in the United States. Having had no time to do background research, you sit on the plane wondering what is the annual market size for golf balls in the U.S. and what factors drive demand. Your plane lands in 15 minutes; how would you go about answering these questions? Hypothetical Approach • Golf balls sales are driven by end-users. You have to determine the number of end-users; this will be some fraction of the total U.S. population (say 300 million to make my math easier). First assume a uniform age distribution and an average life expectancy of 80 years. Then assume that only people in the ages 20-70 will be potential buyers. Thus you eliminate 30 to 80 years or 3/8 of the 300 million population. So, now you are down to a potential buyer pool of about 110 million. Now you might estimate how many people out of 10 play golf – say 4 – so now 4/10 of 110 gets you down to 44 million people who play golf. Now you have to estimate purchase frequency, how many balls per month an average person buys (you may want to temper this “average purchase” assumption by at least mentioning that retired people play more than students). A good guess might be 15. So demand per month is now 15 x 44 million or 660 million. Finally, you need to estimate the number of months per year that people play golf – 12 months in good climate regions, maybe 5 in regions with cold winters – so on average 8 is a decent estimate: 8 x 660 = 5.280 million golf balls per year Case #2 Why is there no light beer in the UK? Case #3 You have been called in by a Big 4 accounting firm that is experiencing declining profitability in its auditing operation. What levers would you push to help improve profitability? Hypothetical Approach Hypothetical Approach • This problem does not fit in common • Whenever you hear “declining profitability,” framework, but it can be dissected by start with basic profitability analysis. simply listing the alternative reasons for Determine whether this is a revenue each component of the issue. Here is one problem, cost problem or both. approach: • The reason there is no light beer could be because (1) consumers do not demand it, (2) producers are not producing it, despite consumer demand, or (3) some outside influence, such as the government, will not permit light beer in the country. Following the producer option, one can subdivide the problem as nobody wants to sell light beer in the UK or somehow, light beer producers are blocked out of the UK Proprietary and Confidential. inductis, Inc. 28 Special Cases (Cont’d) Case #4 Your client is going to build a skyscraper, but is not sure how many stories to make it. How should he decide? Case #5* The airline industry is characterized by low returns and stiff competition. In the early years after deregulation, discount carriers like People Express sprang up. Years later the discounters have gone out of business. In a price-competitive industry, why is it that the higher-cost carriers were able to survive and the low-cost ones weren't? Hypothetical Approach These are some of the basic issues to be fleshed out: • Characteristics of discounters: – Low fares – Limited service • Characteristics of major carriers: – Higher fares, but better coverage and service – Hub systems channeling traffic • Competitive moves by majors: Innovative use of information technology for yield management and differential pricing 1) Basically they priced every seat individually based on continuously monitoring supply/demand 2) They wooed leisure customers with fares lower than discounters and charged more from business travelers (indifferent to price but sensitive to service frequency) 3) They stole the discounters' market and forced them out Hypothetical Approach • This is an economic supply/demand mind tease. Clearly you don't want to lose money on the deal. The building will house tenants, who will pay to reside there. The costs of building and maintaining the structure (both fixed and incremental by story) need to be compared to revenue-generating capability of the project. When marginal revenue equals marginal cost you stop adding stories * This case is too complex for BA candidates. Included here for illustrative purposes only Proprietary and Confidential. inductis, Inc. 29 Data Analytics Cases The following sample cases have been compiled with input from Inductis associates and managers. They are intended to assist you in preparing for your interview. Math A thin membrane covers the surface of the (spherical) earth. One square meter is added to the area of this membrane to form a larger sphere. How much is added to the radius and volume of this membrane? Combinatorics n people each know a different piece of gossip. They can telephone each other and exchange all the information they know (so that after the call they both know anything that either of them knew before the call). What is the smallest number of calls needed so that everyone knows everything? • • • • 1 for n=2 3 for n=3 2n-4 for n>=4 This can be achieved as follows: choose four people (A, B, C, and D) as the "core group". • Each person outside the core group phones a member of the core group (it doesn't matter which); this takes n-4 calls. • Now the core group makes 4 calls: A-B, CD, A-C, and B-D. At this point, each member of the core group knows everything. • Now, each person outside the core group calls anybody who knows everything; this again requires n-4 calls, for a total of 2n-4. Analysis What is the longest time that a particle can take in traveling between two points if it never increases its acceleration along the way and reaches the second point with speed V? • V = (4/3)*pi*r^3 and A = 4*pi*r^2 • Need to find out how much V increases if A increases by 1 m^2 • dV / dr = 4 * pi * r^2 dA / dr = 8 * pi * r dV / dA = (dV / dr) / (dA / dr) = (4 * pi * r^2) / (8 * pi * r) = r/2 = 3,250,000 m • If the area of the cover is increased by 1 square meter, then the volume it contains is increased by about 3.25 million cubic meters. • We seem to be getting a lot of mileage out of such a small square of cotton. However, the new cover would not be very high above the surface of the planet -- about 6 nanometers (calculate dr/dA). • Assumptions: - x(0) = 0; - x(T) = X 2. - v(0) = 0; - v(T) = V 3. - d(a)/dt <= 0 • Solution - a(t) = constant = A = V^2/2X which implies T = 2X/V. • Proof: -Consider assumptions as they apply to f(t) = A * t - v(t): 1. integral from 0 to T of f = 0 2. f(0) = f(T) = 0 3. d^2(f)/dt^2 <= 0 From the mean value theorem, f(t) = 0. Proprietary and Confidential. inductis, Inc. 30

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