Case Interview Preparation: Recapping, Market Analysis, and Synergies in Consulting

What is the first step in recapping a case?

Answer first in your recap to synthesize information.

What should you include in your case recap?

Relevant information such as client name, business type, and the problem they are facing.

What are clarifying questions used for?

To ensure understanding of the industry and gather relevant information before proceeding.

What are some key clarifying questions to ask?

Revenue streams, cost drivers, customer segments, sales channels, and market segment.

What is important to do when interpreting numbers?

Sense check units, ask for cost information, and consider industry benchmarks.

What are typical buckets to consider in a case?

Market size, growth, competitors, market share, and relevant trends.

What aspects of company profitability should be analyzed?

Revenues, pricing opportunities, quantity factors, channel performance, product mix, and costs.

What are example ways to improve profits?

Enter a new channel, rethink sales process, target new customer segments, or diversify products.

What should you consider regarding operational feasibility?

Finance, internal organizational capabilities, and supply chain logistics.

What are potential risks to consider in a case?

Internal factors, external environment, political instability, and competitor responses.

What benefits should be considered in non-business cases?

Macro impact, job creation, local economy boost, and stakeholder satisfaction.

What key questions drive profitability analysis?

Is the issue company or industry-related? Is it due to revenues or costs?

What are revenue opportunities for improving profitability?

New products, customer segments, geographies, and increased marketing.

What are the ways to enter a market?

Build product, acquire existing customer, or form partnerships/joint ventures.

What key questions should be asked when considering market entry?

Is the market attractive? What would be our market share/profits?

What investment considerations are specific to private equity?

Investment price, expertise, management quality, ROI, and exit strategy.

What are key questions for evaluating a company in private equity?

Is the market attractive? Is the company attractive? Is the investment price justified?

What acquisition-specific considerations should be evaluated?

DCF valuation, price, ROI on acquisition, and exit strategy.

What are the three types of synergies to consider in acquisitions?

Financial, Organizational, Logistical

What financial factors should be evaluated for investment in acquisitions?

Cash flows for investment

What organizational factors are important in acquisitions?

Culture fit and overlap in departments

What logistical consideration is crucial when combining companies?

Combining supply chains

What are revenue synergies?

Opportunities to increase revenue through price leverage or capacity increases.

What are two ways to achieve revenue synergies?

Price increases through new branding and quantity increases through production capacity.

What are cost synergies?

Opportunities to reduce costs through fixed and variable cost reductions.

What fixed costs might decrease due to overlap in acquisitions?

Factory rent, depreciation, SG&A, insurance.

What variable costs should be considered in cost synergies?

Inputs, transportation/distribution, labor.

What key question assesses market attractiveness in acquisitions?

Is the market attractive?

What should be evaluated regarding the target acquisition's market position?

Does our target acquisition have good positioning in this market (market share, competitive edge)?

What cultural aspect is important to consider in acquisitions?

Do our cultures match?

What financial question should be asked regarding the acquisition price?

Is the acquisition price reasonable? What would be the ROI or PBP of the acquisition?

What customer factors influence pricing strategies?

Price sensitivity, general demand, tastes and preferences.

What are the pros and cons of different pricing models based on?

Profitability or revenue generation.

What is the focus of growth strategies in consulting?

Revenue-focused strategies.

What are some ideas for growth opportunities?

New customer segments, new products, entering adjacent markets.

What is the top-down approach to market sizing?

Start with a base population and narrow down by categories to identify target customers.

What is the bottom-up approach to market sizing?

Start with the total number of customers and scale up to total quantity or revenue.

What should be considered for products with long use life in market sizing?

Replacement sales and frequency of purchase.

What is a helpful strategy when unsure about market sizing units?

Trust your gut and think out loud.

What general buckets should brainstorming ideas trace back to?

Customer considerations, market/competition, macro/environment.

What are some customer trend questions to consider?

Price, quality, durability, security, reputation of company.

What risks should be evaluated in operational feasibility?

Logistical considerations and product development stages.

What differentiates your ideas in consulting cases?

How you explain and contextualize them to the case.

What should you consider when brainstorming for a consulting case?

Think about departments within a business and how they would be affected, especially for company, operational capabilities, and logistics.

What are some examples of competitive responses in consulting cases?

New entrants, new innovations, entering new distribution channels, negotiating contracts, creating discounts, and offering additional services.

What are the revenue drivers in the Consumer/Retail industry?

Number of customers, frequency of purchases, spend per purchase, segment by customer types, and product lines.

What are the cost drivers in the Consumer/Retail industry?

Fixed costs like rent, utilities, insurance, and general & administrative costs; variable costs like inputs to products, packaging, and labor.

Why are channels important in the Consumer/Retail industry?

There are more channels present, such as in-store pickup, online only, delivery services, and curbside pickup.

What strategies can stores use to increase customer retention?

Loyalty programs, promotions, deals, and branded credit cards.

How can physical stores affect sales?

Through product placement and presentation.

What is a key revenue driver in the Technology industry?

Number of customers, price per contract, length of contract, and maintenance/implementation planning.

What are the cost drivers in the Technology industry?

Engineering, research and development, maintenance, and general & administrative costs.

What is SaaS pricing?

Subscription pricing which is more predictable for customers.

What is a significant trend in the Technology industry?

Cloud migration from legacy software.

What is a common characteristic of software companies?

They typically operate high-margin businesses due to high revenue operations and low costs.

What is a key function in driving revenue for software companies?

Sales, along with customer support and implementation.

What future capability will AI provide in the Technology industry?

Automation and speeding up many processes.

What regulations should companies in the Technology sector pay attention to?

Regulations on security, data storage and collection, and privacy.

What are some tech adoption concepts?

Word of mouth/reputation, ease-of-use, and access to online training.

What are different business models in the Technology sector?

Paid subscription model, freemium models, and one-time payment.

What is a key revenue driver in the Media/Entertainment industry?

Ticket sales, concession sales, merchandise, advertisements, sponsorships, and number of attendees/viewers.

What are the cost drivers in the Media/Entertainment industry?

Fixed costs like rent, maintenance, insurance, and utilities; variable costs like labor and inputs for concessions.

What impact has the pandemic had on the Media/Entertainment industry?

It has slowed in-person events growth.

What content trend is emerging in the Media/Entertainment industry?

A shift towards short-form content rather than long-form content.

How has Netflix found growth in the Media/Entertainment sector?

Through their Ads business.

What are the primary revenue drivers for a music festival?

Profit, local community benefits, job creation, tourism.

How do producers and actors earn from viewership?

They receive royalties.

What is a common strategy for platforms like Disney?

Expanding to adjacent markets, such as theme parks.

What is the purpose of bundles in subscription services?

To offer combined services at a discounted rate, like student bundles for Spotify and Netflix.

How does Netflix generate revenue?

Through a subscription model with options for ads or ad-free viewing, and by creating exclusive shows.

What is the primary competition in social media?

Competing for user attention and time spent on the platform.

What are the revenue drivers for telecom companies?

Number of users, price per subscription plan, and data usage.

What are the fixed cost drivers for telecom companies?

Infrastructure costs, such as telephone cables and satellites.

What are the revenue drivers in logistics and transportation?

Number of shipments, price per trip, routes prioritized, capacity, and efficiency.

What are the fixed cost drivers in logistics?

Rent for storage spaces, utilities, and insurance.

What is a key challenge in the logistics industry?

Difficulty in differentiating services and competition on price.

What are the revenue drivers for airlines?

Number of passengers, occupancy per trip, number of trips, and additional spending on services.

What are the cost drivers for airlines?

Fixed costs like rent and utilities, and variable costs like fleet maintenance and fuel.

What is a significant concern in the airline industry?

Airplane safety and sustainability of transportation.

What are the revenue drivers in healthcare?

Number of patients, insurance reimbursements, and types of operations.

What are the cost drivers in healthcare?

Fixed costs for facilities and variable costs for salaries and equipment.

What are the revenue drivers for pharmaceutical companies?

Number of patients and price per medication.

What are the cost drivers in pharmaceuticals?

Fixed costs for R&D and manufacturing, and variable costs for chemicals and packaging.

What is a major regulatory concern for pharmaceuticals?

Patents and government laws on healthcare.

What are the revenue drivers for energy providers?

Watts of energy produced and price per watt.

What are the cost drivers for energy providers?

Fixed costs for equipment and setup, and variable costs for maintenance.

What is a trend in energy production?

The rise of solar and wind power, dependent on weather conditions.

What are the revenue drivers for utilities?

Watts consumed and price per watt.

What are the cost drivers for utilities?

Fixed costs for infrastructure and variable costs for energy consumption.

What is a common characteristic of utility companies?

Typically nonprofits or state-owned monopolies.

What are the revenue drivers in manufacturing?

Based on production volume and price per unit.

What are the cost drivers in manufacturing?

Fixed costs for facilities and variable costs for labor and materials.

What is a key consideration in the chemicals/mining industry?

Environmental impact and waste management.

What are the revenue drivers for financial services?

Based on the number of clients and services provided.

What are the cost drivers for financial services?

Operational costs and reimbursements.