Case Study Preparation and Industry Notes

Vocabulary-style flashcards covering case study framework concepts, profitability drivers, market sizing approaches, and industry-specific terminology.

Answer First

A style of recap, particularly for Bain, where you state the conclusion before providing context to synthesize information and cut things short.

Clarifying Questions

Questions asked before building a framework to understand industry-specific details like revenue streams, cost drivers, customer segments, sales channels, and metrics for success.

Sense Check

A process of verifying if numbers (like market size) make logical sense, such as checking if they should be in the millions or billions.

Fixed Costs

Ongoing business expenses that do not change with production levels, including R+D, Insurance, Rent, Utilities, and G+A (General and Administrative).

Variable Costs

Costs associated with the actual product or service inputs that fluctuate based on the volume of goods produced or services provided.

Diversification

A strategy for improving profits by selling a new product to a new customer or industry.

Cannibalization

An operational risk where a new product or change negatively impacts the performance or focus of an existing business.

Capital Intensive

A characteristic of building a product from scratch that requires heavy investment in R+D and equipment, often resulting in a longer PBP (Payback Period).

Acquisition

A market entry method with high upfront costs that requires evaluating post-merger considerations such as culture fit and business combination.

Joint Venture

A partnership entry method that offers lower upfront costs but results in limited control for the involved parties.

Revenue Synergies

Post-acquisition benefits such as raising prices via branding or increasing quantity through shared production capacity and new channels.

Cost Synergies

Reductions in fixed costs (like factory rent or SG+A) or variable costs (like labor or distribution) resulting from departmental overlap after a merger.

Top Down

A market sizing approach that starts with a base population and narrows it down by specific categories to identify a target customer.

Bottom Up

A market sizing approach typically used in B2B businesses that starts with the total number of customers and scales up to total quantity or revenue.

Use Life

The expected duration a product lasts, which determines the frequency of replacement sales for items that are not quickly consumed.

Organic and Inorganic Growth

The two primary ways a PE firm considers growth for a target investment to ensure a profitable exit strategy.

LTV (Lifetime Value)

A technology industry revenue driver based on the length of a customer contract.

SaaS (Software as a Service)

A business model using subscription pricing, which provides more predictable revenue for the company and predictability for customers.

Freemium

A model where access is free in exchange for advertisements or the sale of customer data to third parties.

CAC (Customer Acquisition Cost)

A marketing metric essential for software and technology companies to measure the expense of gaining new users.

Reimbursements

Payments made by insurance companies to patients or healthcare providers for medical operations.

Capacity Constraints

A healthcare revenue restriction based on the limited availability of doctors and the number of patients they can see.

Time to Market

A critical pharma and manufacturing concept where being behind in R+D creates a competitive disadvantage.

GTM (Go-to-Market)

Tactics for launching a product, including test launches, channel selection, and promotional strategies.