2023

CONSULTING
COMPENDIUM
Prepared By
ConQuest
The Consulting & Strategy Club of IIM Shillong

ig/[Link] [Link]/conquest fb/[Link]

 CONTENTS
i. Overview
ii. What is consulting?
iii. Types of consultants
iv. Roles of a consultant and career progression
v. Major recruiters
Top Consulting firms visiting IIM Shillong
vi. How to ace consulting interviews?
a. Case interviews – Frameworks with examples
3C
4P
Pestle
Porter
SWOT
BCG Matrix
Ansoff Matrix
Market sizing
Declining profits
Increasing profitability
Increasing capacity
Customer turnover
Competitive response
New product introduction
Merger & Acquisition
Unconventional cases
b. Guesstimates with examples
c. Guesstimate questions
Guesstimate 1
Guesstimate 2
Guesstimate 3
Guesstimate 4
Guesstimate 5
vii. References
 OVERVIEW
Dear PGP Class of 2023-25,

ConQuest, the Consulting and Strategy Club of IIM Shillong is ecstatic to present to you the consulting
compendium, your gateway to the domain of Consulting.

As the shape of business changes in today’s VUCA world, the world of Management Consultancy has
also witnessed a 360-degree shift in the domain from being strictly restricted to advisory to now
spanning to strategy implementation. Even with such dimensional shifts, the core of the domain remains
the same and hence has been one of the most coveted streams for B-School graduates.

This compendium is one effort from us to introduce you to the world of consulting and help you prepare
better for your upcoming placement process. We have tried to cover all major aspects of the domain,
starting with domain breaking, Frameworks, Case Interviews, Guesstimates and Additional References
to give you a holistic understanding under one umbrella.

We wish you the best for your placement process! We hope you’ll put in your best efforts to extract the
maximum value out of this compendium. And, in case of any query regarding anything related to
consulting, feel free to reach out to us. We'd be more than happy to solve any query of yours, however
small it might be.

Best Regards,
Team ConQuest
The Consulting & Strategy Club of IIM Shillong

ConQuest – The Consulting and Strategy Club of IIM Shillong

 WHAT IS CONSULTING?
The process of helping third parties solve complex problems by providing domain expertise and
knowledge in exchange of some fee is known as consulting. The services may either be restricted to
advisory services or can be extended to implementation services, depending on the requirements.

The problem solvers, implementing various approaches are known as Consultants. According to a HBR
article, ‘Consulting is more than giving Advice’: Management Consulting includes a broad range of
activities. One way to categorize the activities is in terms of the professional’s area of expertise (such
as competitive analysis, corporate strategy, operations management, or human resources).
Another approach is to view the process as a sequence of phases—entry, contracting, diagnosis, data
collection, feedback, implementation, and so on.

Source: HBR Article: Consulting Is More Than Giving Advice by Arthur N. Turner

Consultants use various approaches in form of primary and secondary research, logic and business
sense, to work across a wide range of roles, projects, industries and geographies to analyze information
and implement client goals.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Required Skillset
1. Understanding and fragmentation of complex problems
2. Problem-solving skills
3. Analytical skills
4. People skills
5. Excel and presentation skills for effective communication of solutions

ConQuest – The Consulting and Strategy Club of IIM Shillong

 TYPES OF CONSULTING
Strategy Consulting
An upper-level decision making process where the consultants’ advice and support businesses to
develop, implement and sustain business goals. This type of consultancy helps business in both long
term and short-term goals by helping in profitability, M&A, operations, and workforce.

Financial Consulting
The role of a consultant under financial consulting is providing information and advice to businesses
on investment strategies, audits, financial decisions, taxes, actuarial, valuation and risk management.

IT Consulting
An IT consultant works in partnership with clients to overcome their business challenges through the
application of technology. A consultant's work will often be based on the need to improve efficiency
and the way a company functions, with IT used as a means to achieve this.

Operation Consulting
Operations consulting, often known as operations management, is defined as advising and/or
implementation services that help a firm enhance its internal operations and value chain performance.
By advising on and supporting the implementation of changes to target operating models, functional
business processes, management systems, culture, and other value chain elements, operations
management consulting projects help clients run more efficiently.

Human Resource Consulting

HR consulting is the activity of providing all parts of human resource management as an external
supplier, as well as the professional and business challenges that go along with it, such as client
development, contracts, and client management.

ESG Consulting
ESG consultants are responsible for advising businesses for more sustainable investing. They identify
opportunities in the company’s current portfolio for investments that are environmentally and socially
sustainable. They also suggest businesses to f=divest from those that do not comply to ESG.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 ROLES OF A
CONSULTANT
Front End Team
This is the direct client facing role. Here the consultants are required to interact with the clients,
understand their pain points and present solutions suggested by the team to the clients.

Back-end Support Team

This role requires specific domain expertise to provide relevant advisory services to the client. These
teams form the backbone of the consulting world and are responsible for providing solutions and domain
expertise.

Knowledge Team
This team releases research papers, sectoral analysis, general knowledge, and research. They also
monitor economic and other macro factors and provide inputs to the firm.

Career Progressions

Partner

Director

Principal

Manager

Consultant

Associate

Analyst

ConQuest – The Consulting and Strategy Club of IIM Shillong

 MAJOR CONSULTING
COMPANIES
Strategy Finance Technology Operations
consulting consulting consulting consulting

HR consulting ESG consulting

ConQuest – The Consulting and Strategy Club of IIM Shillong

 TOP CONSULTING FIRMS
VISITING IIM SHILLONG

Overview:

Boston Consulting Group is a global consulting firm that partners with leaders in business and society
to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer
in business strategy when it was founded in 1963. Today, it works closely with clients to embrace a
transformational approach aimed at benefiting all stakeholders—empowering organizations to grow,
build sustainable competitive advantage, and drive positive societal impact. Firm’s diverse, global
teams are passionate about unlocking potential and making change happen, delivering integrated
solutions through leading-edge management consulting, technology and design, and corporate and
digital ventures.

The selection process for the Summer Internship Program (SIP) at Boston Consulting Group typically
involves a buddy round and 3 rounds of interviews. While the specific process may vary, here is a
general outline of what you can expect:

Buddy Round: Once shortlisted for BCG, every candidate is allotted a buddy to know about the firm,
understand what life and culture at BCG is like, how to prepare for the interviews etc. While it is said
that buddy round is non-evaluative, one must understand that nothing that happens in the process shall
be taken lightly. Buddy round is all about interacting actively with buddies and practicing case
interviews with them. It is essential to constantly seek feedback and show excitement about BCG.

First Round: It is a classic case based interview round which may also involve guesstimates to assess
your problem-solving abilities, analytical skills, and fit for the company. Ensure that you are adequately
prepared to answer basic general knowledge questions, such as identifying the neighbouring state of
your home state, knowing the current President and Prime Minister of India, and other relevant
inquiries.

Second Round: Post clearing round 1 of the process, candidates go through another round of case based
and guesstimate solving interview. This is just to double check a candidate’s problem solving abilities.
The level of questioning is more difficult than the first round and forces one to think to the second and
third degree of insights and causes.

Third Round: The final round is an HR based fit check round. It is usually with a MDP level
person to understand your willingness to join the firm and validate your soft skills.
In terms of the types of cases, Boston Consulting Group typically focuses on profitability, growth,
mergers & acquisitions, go to market strategy, new product development and other
unconventional cases too.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Overview:

Bain Capability Network (BCN) is an integral part of Bain's operations and acts as a strategic partner
with a team of professionals who specialize in delivering advanced analytics, research, and strategic
insights to support the firm's consulting engagements, drive business transformation and value for
their clients.

BCN is divided into several service lines that focus on particular sectors, such as Consumer Products,
Retail, and Technology, as well as particular skills, such corporate finance, strategy, and supply chain
management. The BCN Centre of Excellence's (CoE) departments provide the business units (BUs)
specialised capabilities, tools, and procedures that give them a competitive edge.

The selection process for summer internship at BCN usually involves CV based shortlisting followed
by an online aptitude test and few rounds of interviews. While the specific process and rounds may
vary here is general outline;

Online Aptitude Test: The shortlisted students have to appear for an online test that tests your
quantitative and analytical skills. The exam's format is comparable to that of the LRDI portion of the
CAT exam, and the sets that must be answered place a greater emphasis on your business acumen.
BCN organizes a small workshop for all the shortlisted students in which they explain how to
approach the case interviews and guesstimates using specific examples. This is an excellent chance
tolearn about the kind of situations that might be expected in the interview as well as the strategy that
they are looking for in problem solving.

The interview round shortlists is Centre of Excellence (COE) specific and your interview experience
can be very different
across different COEs. But the general outline is as follows:

First Round of Interview: The initial round of interviews is usually conducted by a senior manager.
This round is mostly case/guesstimate based. You can expect two small cases or single a long case.
The case can be of market entry, business strategy, estimating total addressable market etc. Some
COE interviews, such as Corporate Finance and Private Equity, do not use case/guesstimate solutions,
but rather evaluate your expertise in that specific subject.

Second Round of Interview: This round is led by a director-level individual and tests your
personality, familiarity with the company/role, and if you would fit in with their atmosphere. This
round isn't particularly organised. They might ask you questions about your CV, hobbies, general
knowledge, future ambitions, and expectations from BCN. For some, the second round includes
case/guesswork solutions followed by a general set of questions. Expect a lot of questions based on
your professional experience if you have any.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Overview:

Accenture Strategy and Consulting is a global management consulting firm that provides strategy,
consulting, digital, technology, and operations services to clients across various industries. With a focus
on delivering innovative solutions and driving business transformation, Accenture helps organizations
navigate the challenges of a rapidly changing marketplace.

The selection process for the Summer Internship Program (SIP) at Accenture Strategy and Consulting
typically involves a few rounds of interviews. While the specific process may vary, here is a general
outline of what you can expect:

First-round Interview: If you are shortlisted after the initial application screening, you will typically
have a first-round interview. This interview may consist of behavioral and case-based questions to
assess your problem-solving abilities, analytical skills, and fit for the company. Be prepared to discuss
your past experiences and demonstrate your ability to think critically and approach complex problems,
in-depth case interviews, where you will be presented with a business scenario or problem and asked to
provide recommendations or solutions. The interviewers will evaluate your ability to structure your
thoughts, analyze data, and communicate your ideas effectively.

Second-round Interview: If you pass the first-round interview, you may proceed to the second round.
This round would involve interaction with MD, with domain knowledge related questions, fitment
check, elevator pitch.

In terms of the types of cases, Accenture Strategy and Consulting typically focuses on business strategy,
operational improvement, digital transformation, and organizational change. Cases may involve market
entry strategies, cost optimization, mergers and acquisitions, customer experience enhancement, or
technology implementation.

To prepare for the interview process at Accenture Strategy and Consulting, here are a few tips:

Research the Company: Familiarize yourself with Accenture's services, industry focus, recent
projects, and the latest trends in the consulting industry. This will demonstrate your genuine interest in
the company and enable you to ask relevant questions during the interview.
Develop Problem-Solving Skills: Practice solving case studies to improve your ability to analyze
complex problems, break them down into manageable components, and develop structured and logical
solutions. Focus on developing frameworks and methodologies to approach different types of business
scenarios.
Showcase Relevant Experiences: Highlight any experiences or projects that demonstrate your
problem-solving, leadership, and teamwork skills. Accenture values candidates who can apply their
knowledge in real-world situations.
Enhance Communication Skills: Effective communication is key in consulting. Work on articulating
your thoughts clearly, actively listening to the interviewer's questions, and structuring your responses
in a concise and logical manner.
Practice Time Management: During case interviews, it's important to manage your time effectively.
Practice solving cases within the given time constraints to ensure that you can deliver well-thought-
out recommendations within the allocated time.

Remember, preparation and practice are key to success in the interview process.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Overview:

Deloitte is a UK-based, confidentially restricted, professional service provider with exposure to an

internal audit, financial accounting, financial advisory, enterprise consulting, human capital, strategy
operations, risk management, and technology consulting. Deloitte serves several sectors: automotive,
telecom, real estate, health care providers, insurance, state government, and technology.

Summer Internship Program format:

The Summer Internship Program (SIP) at Deloitte is known for its rigorous interview process, which
typically consists of three rounds designed to assess the candidates' skills, knowledge, and fit for the
program. Each round serves a specific purpose and offers unique challenges to the applicants.

First round: The first round sets the foundation for the interview process. It includes a short guesstimate
exercise, where candidates are given a hypothetical situation and are required to make quick estimations
or calculations based on the given information. Additionally, a small consulting case study is presented,
testing the candidates' problem-solving abilities and their understanding of business concepts.

Second round: Moving on to the second round, candidates face more intricate challenges. They are
presented with a complex case study, which delves into various aspects of business strategy. The case
study may revolve around topics such as market entry strategy, cost optimization, mergers and
acquisitions, customer experience enhancement, technology implementation, etc. This round evaluates
the candidates' analytical thinking, decision-making skills, and their ability to develop practical
solutions to real-world business problems.

Third round: If the candidates successfully navigate the second round, they proceed to the final round
of the interview process. This round usually involves an interactive session with a Managing Director
(MD) or a senior executive. During this session, the candidates are tested on their domain knowledge,
with questions related to the specific field. Additionally, the fitment check aims to assess the candidates'
alignment with Deloitte's values, culture, and goals. Furthermore, candidates may be required to deliver
an elevator pitch, a concise and compelling summary of their skills, experiences, and aspirations.

The multi-round interview process at Deloitte allows the company to evaluate candidates
comprehensively, considering their problem-solving abilities, strategic thinking, industry knowledge,
and cultural fit.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Overview:

The Summer Internship Programme (SIP) at Everest Group follows a one-round process, typically
consisting of one or two case rounds. However, some students are also assigned a buddy who conducts
3–4 mock interviews with them.

Buddy Round: To participate in the buddy round, students are required to fill out an EOI (Expression
of Interest) form. The allocation of buddies is done on a first-come, first-served basis. Buddies provide
students with various techniques for solving case rounds through mock interviews.

Interview: During the interview stage, candidates encounter more demanding obstacles. They are given
one or two elaborate case studies that explore different facets of business strategy. These case studies
may cover areas like market entry strategy, cost optimisation, mergers and acquisitions, improving the
customer experience, implementing technology, and others. This round assesses candidates' analytical
thinking, decision-making abilities, and capacity to devise feasible solutions for real-world business
challenges.

To prepare for the interview process at Everest Group, here are a few tips:

1. Be receptive to feedback: During the buddy round, your buddy may provide you with feedback
on your performance, including your answers, communication style, and problem-solving
approach. It's crucial to be open to constructive criticism and demonstrate a willingness to learn
and grow. Use the feedback as an opportunity to improve and showcase your adaptability.

2. Enhance your communication skills: Effective communication is essential in any interview

setting. Focus on clearly expressing your thoughts, ideas, and experiences. Practise active
listening by paying attention to the questions asked and responding thoughtfully. Be concise
and articulate, and ensure that your responses are well-structured and organised. Strong
communication skills demonstrate your ability to effectively convey information and
collaborate with others.

3. Practice solving different types of cases. Case study interviews are often conducted to assess
problem-solving abilities and analytical thinking. Familiarise yourself with different case
formats, such as market sizing, business strategy, or operations cases. Practise solving cases by
breaking them down into key components, analysing data, and providing logical and well-
supported recommendations. This preparation will enable you to approach case interviews
confidently and showcase your problem-solving skills effectively.

4. Cultivate structured thinking: Employ a structured approach to problem-solving, demonstrating

your ability to think critically and logically. Break down complex problems into smaller,
manageable components and establish a clear framework for analysis. Present your thoughts in
a structured manner, highlighting key issues, analysing potential solutions, and providing well-
reasoned conclusions. This structured thinking showcases your ability to approach challenges
systematically and make informed decisions.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Overview

Redseer Strategy Consultants is a leading strategy consulting firm that helps new-age consumer focused
businesses grow. The company was founded in 2009 and is headquartered in Bengaluru, India. Redseer
has a strong presence in India, the Middle East, Southeast Asia, the USA, and the UK. The company
has a team of experienced consultants who work with clients to develop growth strategies, digital
transformation plans, and investment thesis. Redseer is a thought leader in the Internet economy space
and is the most widely quoted consulting firm in the media. The company has worked with some of the
leading new-age consumer businesses in India, including Zomato, Nykaa, Paytm, and Cartrade. Redseer
is a trusted advisor to new-age businesses and is committed to helping them grow and succeed.

The selection process for the Summer Internship Program (SIP) at Redseer Strategy Consultants
typically involves 2 rounds of interviews. While the specific process may vary, here is a general outline
of what you can expect:

First-round Interview: If you are shortlisted after the initial application screening, you will typically
have a first-round interview. This interview may consist of behavioural and case-based questions along
with guesstimates to assess your problem-solving abilities, analytical skills, and fit for the company.
Ensure that you are adequately prepared to answer basic general knowledge questions, such as
identifying the neighbouring state of your home state, knowing the current President and Prime Minister
of India, and other relevant inquiries.

Second-round Interview: If you pass the first-round interview, you may proceed to the second round.
During the second round of the interview, the interviewer assesses the candidate's familiarity with the
company and evaluates their proficiency in basic commands and fundamental calculations.
In terms of the types of cases, Redseer Strategy Consultants typically focuses on business strategy,
digital transformation, and organizational change. Cases may involve market entry strategies, cost
optimization, mergers and acquisitions, customer experience enhancement, or technology
implementation.

To prepare for the interview process at Redseer Strategy Consultants, here are a few tips:

• Research the Company: Acquaint yourself with the range of services provided by Redseer
Strategy Consultants, their industry specialization, and recent projects, and stay updated on the
latest trends in the consulting industry. This will showcase your sincere interest in the company
and equip you to ask pertinent questions during the interview. To enhance your understanding
in this area, you can make use of resources like Redseer's YouTube channel and watch videos
featuring the CEO. Link for the same ([Link]
• Develop Problem-Solving Skills: Practice solving case studies to improve your ability to
analyze complex problems, break them down into manageable components, and develop
structured and logical solutions. Focus on developing frameworks and methodologies to
approach different types of business scenarios.
• Enhance Communication Skills: Effective communication is key in consulting. Work on
articulating your thoughts clearly, actively listening to the interviewer's questions, and
structuring your responses in a concise and logical manner.
• General awareness: Redseer considers evaluating candidates' basic general knowledge as a
critical aspect of the selection process. It is essential for candidates to display awareness and
understanding in various areas, such as current affairs, industry trends, and relevant facts, to
increase their chances of being selected by Redseer.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 HOW TO ACE CONSULTING
INTERVIEWS?
FRAMEWORKS
3C’s

3C’s is a framework that focuses on company, customers, and competitors. It helps evaluate the business
situation. The framework provides the flexibility to start with any C, however, it is recommended to
follow the flow: Customers >> Competitors >> Company. This is because if you start with the company
first, you may use the company data as a benchmark to analyse customers and competitors.

1. Customer: Foundation of any business is to support the interests of the customers.

Who is the customer?
Different segments of target audience?
What is the demographic (age, income, sex, etc.) of the target audience?
What are they motivated by: value or status?
What is the customers’ willingness to pay?
Customer needs and preferences?
What are their purchasing habits and behaviours?

2. Competition: To understand where the company stands in relation to its competitors.

What are competitive dynamics?
Major players?
Market Share and growth prospects of all competitors?
How is the industry performing?
Competitor’s brand and value proposition?
Financial health of competitor?

3. Company: To look inwardly to design strategies to maximize strength against competition.

How is the company performing?
Its core competencies?
Product offering by the company?
Profitability of the company?
What is the company’s USP?

ConQuest – The Consulting and Strategy Club of IIM Shillong

 4P’s

4P’s is a framework which helps develop strategies to differentiate a company’s product from its
competitors. It is very common when launching a new product or while reviewing the positioning of
existing product. There are various variations of this framework, as is sometimes referred to as
“marketing mix” framework.

1. Product: The company must be clear on what product is it selling, and which product or which
version of the product to market.
What is the product?
Good versus service?
Product lifecycle?
How innovative is the product compared to existing products?
Any patents or rights to protect the product from being copied?
Any similar products or substitutes?
Will the product cannibalize any of the current products offered?

2. Price: The price charged for the product depends on its command in the marketplace. It impacts
the company’s revenue and profits as well as communicates information on quality or value of the
product.
What is the perceived value of the product for the customers?
Price charged by the competitor?
Production cost involved?
Price sensitivity of the product?
What is the breakeven point?
Do customers need to be educated about the product or its usage?
Current pricing strategy?

3. Promotion: It is important to understand how to spread information about the new product among
the customers. Various cost-effective strategies and techniques can be used to reach to different
segments of customers.
What marketing strategies have been implemented?
Which strategies have been successful?
What strategies are the competitors using?

ConQuest – The Consulting and Strategy Club of IIM Shillong

 How much is spent of marketing?
Best time to promote the product?
Which media type will be used and will be most effective?

4. Place: It is about making it easy to find a product or convenient to buy. To know where the product
will be sold to the customers, which will make some distribution channels more effective than
others.
Possible distribution channels? (online/offline, etc)
What are the sales team requirements?
What are the strategies followed by the competitors?
Which channels best reaches out to the customers?
Most successful channels in the past? And why?

The above frameworks are usually supplement other frameworks to solve a bigger case at hand.

Example:

Problem statement: [Link] is a retailer at US who sells beauty products. For the past few months,
the retailer is suffering inventory stock-outs for few of its SKUs. Please answer the following questions:
1. What are the factors you will consider for the problem?
2. Any possible suggestion to drive the client out of the situation?

Scoping Questions: Start with the 3C1P1S approach:

1. Customers- Customers are everyone who uses beauty products

2. Company- [Link] is just a retailer who has only one outlet in Seattle.
3. Competitors- Since the products sold be the client are majorly commoditized products, there are a lot
of competitors who play in thin profit margins
4. Products- As per the problem statement (Didn't ask this question)
5. Supplier- Distributors of the products transfer it to [Link]

Deloitte USI cases are generally exhaustive of the 3C1P1S in problem statement itself. Interviewer
expects you to start solving the issue at hand and not spend more than 2 minutes in scoping.

Approach used by the candidate: First I started with a framework for the factors affecting inventory
stock outs. I divided the issues into 2 parts: Demand factors and supply factors.

Demand factors:
1. Sudden changes in customer preferences
2. Change in demographics
3. Certain brands are promoting few products and hence are in high demand

Supply Factors:
1. Wrong forecasting of demand
2. High Lead time for product delivery of stock out SKUs.
3. [Link] unable to the economic order quantity (EOQ)

After brief discussion on each and every issue, I was asked to concentrate on the supply factors and
approach the issue from a value chain perspective. Identified that wrong forecasting was one of the
issues at retailer end and is thus getting magnified (mentioned bullwhip effect from LSCM elective) at

ConQuest – The Consulting and Strategy Club of IIM Shillong

 the supplier end, hence, causing wrong production units for certain SKUs. I was then asked how to
forecast correctly. Discussed Winter-Holt model (LSCM elective) that demand can be broke down into
level, trend and cyclist. The interviewer confirmed that wrong forecasting was indeed the only reason
for stock-outs.

Next, I was asked ways to recover the situation:

Mentioned that we can start a warehouse to stock parts, automate the process of existing warehouse,
expand the old warehouse etc. I was handed a data sheet that containing expenses and revenues for the
3 suggested ways. It contained onetime expense of starting the warehouse, labor charges, overhead
expenses and also the additional revenues. From the table I found out the profit margins for all the 3
cases and recommended to go with the alternative that provides best profit margin which in this case
was starting a new warehouse. Also mentioned about the risks of starting a new warehouse. Hearing
this, I was handed another data sheet of possible locations of starting a new warehouse. The data sheet
had various parameters against the 5 possible locations for new warehouse such as proximity, modes of
transportation available, demand density etc. From a qualitative analysis, I suggested opening a
warehouse in one of the 5 locations.

The interviewer added that we can both start a new warehouse and then automate the warehouse, thus,
increasing efficiency.
(Source of case interview: Consulting Case Book, ISB Class of 2022)

PESTLE
Pestle Analysis is a concept used to gauge the environment in which the company operates and provides
good/ services to its customers. PESTLE is a mnemonic which refers to:

P: Political
E: Economic
S: Social
T: Technological
L: Legal
E: Environmental

Political factors help determine the extent to which a company/industry or economy is impacted by
government influence. For example, new tax structure, trade tariffs, fiscal policy changes, etc.

Economic factors help determine the performance of the economy directly or indirectly impacting the
company. For example, a rise in the inflation rate of an economy would affect prices of company’s
products and services. Adding to that, it would further affect the purchasing power of the consumers
and may change demand/supply models for that economy.

Social factors help determine demographics, cultural trends, population analytics, etc. For example,
buying trends in a country like India during festive season of Diwali where the economy witnesses high
demand during festivities.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Technological factors help determine the changes in technology that may affect the company’s
operations or product line. For example, automation changes the way company operates and leads to
changes in the human capital requirements.

Legal factors help determine how certain laws may affect the business environment while operating in
a country. It also considers certain policies companies chart out for themselves. For example, labour
laws, consumer laws, etc.

Environmental factors help determine the factors determined by the surrounding environment and its
influence and these are not just limited to climate and weather, but also include geographical location,
global climate changes, environmental offsets, etc.

Example:

Interviewer: The client is a beer manufacturer facing decline in profits. You have been brought in to
figure out the reason and suggest some recommendations.

Interviewee: Just to reiterate, our client is a beer manufacturer and they have been facing a decline in
the profits. I need to figure out reasons and provide some recommendations for the same. To start with,
may I know how long has the client been facing this problem?

Interviewer: The company has been facing the issue since 2-3years.

Interviewee: In which geography does the client operate? Is there any particular region in which we
are seeing this issue?

Interviewer: The client has different brands across the world. The problem is particularly evident in
the US.

Interviewee: Is this an industry wide issue or is it a client specific problem?

Interviewer: It an industry wide issue.

Interviewee: Can you tell me more about the competitors of the client?

Interviewer: There are 4 major players. Our client has almost 50% of the market share.

Interviewee: Okay. Now I would like to break down the profits as revenue minus costs. Could you
please tell me if there are any changes in the revenues and costs over the past few years?

Interviewer: The revenues have been declining. The costs have remained the same.

Interviewee: That’s interesting. Here, I would like to understand a bit about the revenue stream of our
client. I understand that beer is typically sold on liquor shops and pubs. Am I missing any other revenue
stream? Has the revenue gone down in both these channels?

Interviewer: No these are the two major channels. Revenue has gone down in both.

Interviewee: I would like to split the revenue in number of units sold and average price of a beer bottle.
Could you please let me know if there are any changes in these two parameters?

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewer: As a matter of fact, industry price of beer has remained the same but units sold have gone
down.

Interviewee: Ok, has there been any supply issue in distributing the beer through the channels? Or the
demand from the consumer side has reduced?

Interviewer: There has been no change in the supply. Even the margins for the distributors have
remained the same. People are just not buying the product.

Interviewee: Ok. Since, this has been an industry wide problem, it looks like an external issue. I would
like to analyse some macro-economic factors that could have led to this. (Applies PESTLE)

Interviewer: Yes. Actually, there has been a social lifestyle change in the beer consumers of US. They
have become more health conscious as beer may lead to long term obesity and other heart and liver
problems.

Interviewee: OK. That’s why there is a fall in the demand. I think we have identified the issue. Can I
take up a minute to come up with some recommendations?

Interviewer: Sure.

Interviewee: I’ll split my recommendations into two parts: Existing products & New Products. On the
existing products, to stimulate demand, we can look at promoting the beer brands that already have low
alcohol content. On the new products side, we should plan to launch a new brand with zero alcohol
content that tastes like beer, which can be healthier alternative for our consumers.

Interviewer: Looks good, thank you.

(Source of case interview: IIM Calcutta Consult Club Case Book 2022-23)

Summary:

Client was a beer manufacturer facing a decline in profits. This was an industry wide issue – there had
been a social lifestyle change in the beer consumers of US. They had become more health conscious as
they thought beer may lead to long term obesity and other heart and liver problems. To stimulate
demand, the client can look at promoting the beer brands that already have low alcohol content. They
can also plan to launch a new brand with zero alcohol content that tastes like beer, which can be healthier
alternative for our consumers.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 SWOT

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate
a company's competitive position and to develop strategic planning. SWOT analysis assesses internal
and external factors, as well as current and future potential.
A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths and
weaknesses of an organization, initiatives, or within its industry. The organization needs to keep the
analysis accurate by avoiding pre-conceived beliefs or gray areas and instead focusing on real-life
contexts.

Strengths

Strengths describe what an organization excels at and what separates it from the competition: a
strong brand, loyal customer base, a strong balance sheet, unique technology, and so on.

Weaknesses

Weaknesses stop an organization from performing at its optimum level. They are areas where the
business needs to improve to remain competitive: a weak brand, higher-than-average turnover, high
levels of debt, an inadequate supply chain, or lack of capital.

Opportunities

Opportunities refer to favourable external factors that could give an organization a competitive
advantage.

Threats

Threats refer to factors that have the potential to harm an organization.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Example:

Interviewer: The client is an international manufacturer of Electric Buses and has a substantial
presence in the European market. The client is impressed by the initiatives taken by the Government of
India (GoI) to promote the usage of Electric Vehicles (EVs). You have been hired to find out if the
client should introduce these buses in India.

Interviewee: I would like to confirm if I have understood all the critical aspects of the client’s situation.
Our client is an electric bus manufacturer who has a substantial presence in other markets, so I am
assuming that their buses are beyond the technical feasibility stage and are complaint with the stringent
European environment laws. We need to see if this product can be feasibly launched in India and
evaluate the market characteristics to analyze if this would be a good move.

Interviewer: That’s correct. The client does not face any regulatory barriers to entry in India. You’ve
understood the situation well, how do you propose going about the solution?

Interviewee: Since this is a new product in a new market, I would like to structure my discussion around
the product characteristics (development and customization) for the Indian market. If the introduction
of the product is feasible, I’ll move on to the launch (competition, challenges, distribution and
promotion) part of the case.

Interviewer: This sounds fine to me.

Interviewee: To start with, can you tell me something more about these electric buses? How are they
different from traditional fuel-based buses?

Interviewer: There are quite a lot of differences between these buses, but to help you out, I’ll point out
a few major ones – the major difference is that these buses produce less than 90% greenhouse gases as
compared to traditional buses. These buses also run on electric batteries, which means that these buses
can run 150-200kms on one charge.

Interviewee: That is good. It gives us the advantage to position our product as an environmentally-
friendly alternative that can be used for an extended period of time. I would also like to understand how
has our client priced these buses in their existing markets

Interviewer: They are selling these buses at approx. 1.6 times the price of fuel-based buses; however
due to the presence of heavy environment taxes, many companies prefer to buy these buses in the long-
run.

Interviewee: That might be a problem for us. Since these are short-to-medium distance buses, they
would be used mostly for intra-city travel, and private/public bus-operators won’t accept a more costly
option until they don’t have a similar incentive

Interviewer: That’s a fair point. Assume that the government is providing a 5-year tax holiday to
companies investing in the electric vehicle industry and would give special tax breaks to private
operators who promote environmentally-friendly buses.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewee: Ok, this means that our major target customers – both in the public and private sector -
are receptive to the product. Can you also tell me if there are existing EV bus operators in India?

Interviewer: No, the client would be the first-company to introduce such buses.

Interviewee: That does play for and against us. Its good for us since we would have the first mover
advantage and will be able to capture more market, but it might play against us because the
infrastructure required to support these buses may not be present and awareness of the EV buses might
be low. Can you also tell me what is their target region or cities in India?

Interviewer: Assume that the company will initially operate only within Ahmedabad, and has the
capital and resources for this. Given this information, can you suggest some company and market
specific strengths and possible problems that the company might face.

Interviewee: (draws and discusses SWOT table) To summarize, the company has the requisite
experience to manufacture and customize these buses, and the environment-friendly policies of the
government, and the associated financial incentives, are a good reason to expand into India. The
growing urbanization in India, and the large population that uses public transport, also justify the need
for a product that can meet demand without compromising the environment. However, there are certain
major problems/barriers as well – oil is currently at its lowest price in over a decade, which may make
it difficult to convince operators to switch to these electric buses. Also, the high-price of these buses,
the lack of charging infrastructure and operability for a short distance (before being put to charge again)
are some other problems that the company might face. One other major problem that I foresee is that
tenders in the public sector are often offered to lowest-bidders, and if the client can’t match the prices
of its competitors, then it won’t get business from the public sector companies operating in the transport
sector.

Interviewer: Ok, that sounds like a detailed analysis. Based on this, what is your recommendation?

Interviewee: My final recommendation would be not to introduce these buses in India since current
industry landscape and market conditions are not favourable for such a move. However, in the near
future, once the government policies become more supportive and the market conditions change to
favour EVs, the company may reconsider its position on entering the market

Interviewer: Very good. Thank you.

(Source of case interview: IIM Shillong Case Book 2021-22)

Recommendations:

• The client should not enter the Electric Bus market

• While the government has introduced various incentives to promote these vehicles, the current
business environment and market conditions don’t support entering into India
• In the near future, once the government policies become more supportive and the market conditions
change to favour EVs, the company may reconsider its position on entering the market

ConQuest – The Consulting and Strategy Club of IIM Shillong

 BCG Matrix
The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic management tool
that helps businesses analyze their portfolio of products or services. It was developed by the Boston
Consulting Group in the 1970s and has since become widely used for assessing a company's product
line and making informed decisions about resource allocation and future growth strategies.

The matrix is based on the idea that a company's products or services can be classified into four
categories based on their market growth rate and relative market share. These categories are:

1. Stars: Products or services that have a high market share and are in a high-growth market. Stars
typically require significant investment to maintain their growth and market dominance. They have the
potential to become cash cows in the future if their market growth slows down.

2. Cash Cows: Products or services that have a high market share but are in a low-growth market. Cash
cows generate a steady stream of revenue and profit for the company and require minimal investment
to maintain their market position. They are considered to be the main source of cash for the company,
which can be used to support other products or invest in new opportunities.

3. Question Marks (also known as Problem Child or Wildcat): Products or services that have a low
market share but are in a high-growth market. Question marks have the potential to become stars if they
can gain market share, but they also require significant investment and attention to achieve that growth.
Companies need to carefully assess and decide whether to invest more in these products or consider
divesting if they cannot achieve a satisfactory market share.

4. Dogs: Products or services that have a low market share and are in a low-growth market. Dogs
typically do not generate significant profits and may even incur losses. They are often considered weak
performers and may require a decision to either invest in them to improve their market position or to
divest and reallocate resources to more promising opportunities.

The BCG Matrix provides a visual representation of a company's product portfolio by plotting each
product or service as a bubble or marker on a two-dimensional grid. The horizontal axis represents the
market growth rate, and the vertical axis represents the relative market share. The size of the bubble
indicates the product's contribution to the company's overall revenue or profit.

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 The matrix serves as a starting point for strategic decision-making by helping companies identify their
key growth drivers, allocate resources effectively, and develop appropriate strategies for each product
category. For example, companies may focus on investing in stars to maintain their growth trajectory,
milking cash cows to generate cash flow, developing question marks to turn them into stars, and making
tough decisions regarding dogs to minimize losses.

It's important to note that the BCG Matrix is just one tool among many used in strategic management,
and its effectiveness depends on the accuracy of the underlying data and the context in which it is
applied. It should be used in conjunction with other analytical tools and business judgment to make
informed strategic decisions.

Ansoff Matrix
The Ansoff Matrix, developed by Igor Ansoff in 1957, is a strategic planning tool that helps businesses
identify growth strategies for their products or services. The matrix provides a framework for analyzing
and selecting between various market and product development strategies. It consists of four growth
strategies, each focusing on a different combination of existing and new markets and products. These
strategies are as follows:

1. Market Penetration:
Market penetration strategy aims to increase the market share of existing products or services in existing
markets. This can be achieved through initiatives such as aggressive marketing campaigns, competitive
pricing, improving product quality, or enhancing customer loyalty programs. The goal is to attract more
customers from the existing target market and increase the usage or consumption of the current
offerings.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 2. Market Development:
Market development strategy involves introducing existing products or services to new markets. This
can be done by expanding geographically, targeting new customer segments, or entering untapped
market niches. Market development often requires conducting market research to understand the needs
and preferences of the new target market and adapting marketing strategies accordingly.

3. Product Development:
Product development strategy focuses on creating and introducing new products or services to existing
markets. This can involve enhancing existing products, launching new product variants or extensions,
or developing entirely new offerings. The objective is to cater to the evolving needs and demands of
existing customers by providing them with improved or innovative solutions.

4. Diversification:
Diversification strategy involves entering new markets with new products or services. This can be either
related diversification, where the new products or markets have some connection or synergy with the
existing business, or unrelated diversification, where the new products or markets are completely
different from the current offerings. Diversification carries higher risks and requires extensive market
research, careful planning, and investment in new capabilities or resources.

The Ansoff Matrix helps businesses evaluate their growth options and make strategic decisions based
on their risk tolerance, available resources, and market opportunities. It provides a structured framework
for considering various growth avenues and understanding the potential benefits and challenges
associated with each strategy.

It's important to note that the Ansoff Matrix is not a prescriptive tool and does not guarantee success. It
should be used in conjunction with a thorough analysis of the market, competition, internal capabilities,
and the overall business strategy. Furthermore, different growth strategies may be appropriate at
different stages of a company's lifecycle or in response to changing market dynamics. Regular
reassessment and adjustment of the chosen strategies are necessary to adapt to the evolving business
environment.

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 Porter’s 5 forces
Michael Porter's Five Forces is probably the most famous framework used in preparing for case
interviews. It has endured as one of the frameworks most talked about by many in and out of the
consulting field. Although the Five Forces is an excellent framework in helping you organize you
thoughts, its analysis is not complete. It should be used in conjunction with other frameworks to enable
you to fully understand the issues at hand.

Competitive advantage in an industry is dependent on five primary forces:

• The threat of new entrants

• The bargaining power of buyers
• The bargaining power of suppliers
• The threat of substitute products
• Rivalry with competitors

The degree of these threats determines the attractiveness of the market

• Intense competition allows minimal profit margins

• Mild competition allows wider profit margins

The goal is to assess whether a company should enter/exit the industry or find a position in the industry
where it can best defend itself against these forces or can influence them in its favour.
Note:
Identification of buyers and suppliers is key. Here’s an easy heuristic:
• The company pays money to a supplier
• The company gets money from a buyer. Buyers can be intermediaries; They needn’t always be
end consumers

Barriers to Entry:
There are a number of factors that determine the degree of difficulty to enter an industry:
• Economies of Scale
• Product differentiation
• Capital requirements
• Access to distribution channels
• Cost advantages independent of scale (unique access to raw materials)
• Propriety technologies
• Relationship with suppliers of raw materials
• Geographical presence
• Time compression diseconomies
• Government regulations
• Legal or regulatory barriers
• Strong brand identity
• Trade Policies

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 Relationship with Buyers:
A buyer group is powerful if:
• It is concentrated or purchase large volumes as a % of seller’s sales
• Undifferentiated products
• Low switching costs
• Buyers pose a credible threat of backward integration
• The industry's product is unimportant to the quality of the buyer's products or services
• Buyers are fewer in number as compared to manufacturers.
• Buyer profits

Relationship with Suppliers:

A supplier group is powerful if:
• There are fewer substitutable products
• The industry is not an important customer of the supplier group
• The supplier group is an import input to the buyer’s business
• The supplier’s products are differentiated and have high associated switching costs
• The supplier group poses a credible threat of forward integration

Substitute Products:
Substitute products that deserve the most attention are those that:
• Compete in price with the industry’s products
• Are produced by industries earning higher products
• Switching costs

Rivalry:
Rivalry among existing competitors increases if:
• Numerous or equally balanced competitors exist
• Industry growth is slow
• Fixed costs are high
• Undifferentiated products and low switching costs
• Brand identity
• Excess production capacity
• Diversity of competitors
• Corporate stakes
• High exit barriers
• Excess production capacity

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Example:

Interviewer: The client is in the business of making anti-smoking pills - the way we have those patches
and lozenges in the market to curb the urge to smoke. The client wants to sell it at a premium price.
You have been hired to find out if the product can be introduced in a country like India - and if so -
what is the expected target market, market share and a feasible price at which the drug should be sold.

Interviewee: I would like to confirm if I have understood all the critical aspects of the client’s situation.
Our client is in the business of making anti-smoking pills that reduce the urge to smoke for smokers.
We need to do see if the product is feasible to be launched in India and evaluate the market
characteristics such as size and client’s share based on the price.

Interviewer: That’s right. Now that you’ve understood the situation well, how do you propose going
about the solution?

Interviewee: Since this is a new product launch, I would like to structure my discussion around the
product characteristics (development and customization) for the Indian market and then move on to the
launch (competition, distribution and promotion) part of the case.

Interviewer: This sounds fine to me. Also, please note that this product is not entirely new; it has been
introduced in other countries already.

Interviewee: Ok, that experience should definitely help us. To start with, can you tell me something
more about the product? How is it different?

Interviewer: Unlike the lozenges or patches, this product is completely nicotine free - it is 5 times more
effective as proved by lab results and 50% of the test results responded to the pill (which in this industry
is an extremely high number thus indicating success). Moreover, it is a drug that cannot be sold over

ConQuest – The Consulting and Strategy Club of IIM Shillong

 the counter – it requires a prescribed dosage given by the doctor. It is to be taken for 3 months daily, 3
times a day.

Interviewee: That is good. It gives us the advantage to position our product as superior due to the higher
efficacy of treatment. I would like to know take up the competitive scenario next so that we can decide
the price before determining the overall market size.

Interviewer: That’s a fair point. So, there is no similar product in the market. Cheaper products like
lozenges exist but they contain nicotine and sell for Re. 1 per unit.

Interviewee: What are the other countries where the product has been introduced? How receptive have
the customers been in those countries?

Interviewer: The other countries have smokers who are quite similar to the Indian consumers. The
product has been quite a success.

Interviewee: Ok, this means that the target audience will be receptive to the product and we can assume
that there is a strong market for the same. I will now proceed with the estimation of the price and market
size. There are two ways that we can price a new product in a non-competitive market: Cost based and
‘willingness-to-pay’ based. In the first, I would calculate the cost to company and charge a margin on
the same while in the second case; I would calculate the propensity of the consumer to pay for this drug.
This would vary with my target segment chosen. Ideally, we should be able to calculate the optimal
profit case by considering the trade-off in sales volume vs. price for various price points. The solution
will also be influenced to an extent by the growth rates of the different target segments overall, say
movement of people to upper-class from lower-middle class.

Interviewer: Hmm… that is good. In our case, let us assume we did this and came up with Rs. 8 per
unit. You think that sounds reasonable?

Interviewee: I think a price of Rs. 8 per pill is feasible because of the lab results - people will be
convinced that it is a medically prescribed drug and since it is a pre-scheduled dosage for 3 months,
results are guaranteed. We can also stress on the on nicotine bit and indirectly position this as a life
saving drug.

Interviewer: Ok, let’s estimate the market size assuming we decide to price it at Rs. 5 per unit.

Interviewee: Let’s take Delhi as a base case. Population: 150 lakh. Target segment: 40% of them smoke
* 20% of them would want to quit smoking * 75% can afford (Rs. 8 * 3 * 90 = Rs. 2160 drug to quit)
= 9 lakh people or INR 9 * 2160 ~ INR 200 crores. We can now assume that this drug will reach out to
25% of the population across India (urban + rural since its effective and one-time payment to quit
smoking), which means the total market is 200/150 * 0.25 * 10,000 lakh = INR 3,333 crores.

Interviewer: Very interesting. What will drive the market growth our market share?

Interviewee: The market growth rate will be affected by the sales and distribution coverage, willingness
of people to quit smoking and addition of new smokers who would want to quit after sometime. We can
look to capture about 80% of this market eventually, assuming no major competitor enters the market,
which can be prevented by IPR support. Since this is a prescription drug, the bulk of the promotion
costs in this industry are in targeting the doctors and chemists via direct sales agents or Medical

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Representative to convey the pros and cons for them to a) prescribe the drug and b) keep it in their
pharmacies. This will drive our market share from the potential market size.

Interviewer: Good. What about the other 20%?

Interviewee: I am assuming that the remaining 20% will comprise of smokers who are unwilling to
quit smoking (10%), perceive the price to be high (5%) or are not aware of the product (5%). This
percentage can decrease as we move further in the product life cycle and the product becomes well
established through marketing and promotion efforts.

Interviewer: Good. Any other costs/concerns that you would like to address?

Interviewee: The training costs for the direct sales agents will also be critical as this is a new product
and local agents would need an in-depth understanding of the product. No. of sales people can be
calculated by total workload method: Assuming Doctor/Population ratio and say 3 doctors per day and
repeat visits every 2 months; and Chemist/Population ratio and 3 chemists per day and repeat visits
every 15 days. The supply chain will have to be considered - the warehousing, distribution network,
retail chains etc. We can perform the cost benefit analysis for using middle distributors v/s direct
distribution.

Interviewer: Good, I think we have covered the different aspects of the case. Thank You
(Source of case interview: IIM Ahmedabad Case Book 2021-22)
Recommendations:
• Price point should consider both customer’s willingness to pay and product’s incremental value
proposition over existing products in the market
• IPR/ Patenting the drug can prevent competitors to enter market and facilitate capture of market
share
• Spend more on training the medical representatives and direct sales agents to push the product
to the doctors who in turn will prescribe it to the patients

In this example we can see how the interviewee goes about asking all the questions related to Porters 5
framework without mentioning the framework to set its base. This is done to understand all about the
business and to understand the market for a better analysis.

Competitive response
Example:

Interviewer: Your client is an elevator manufacturer. Lately, a new competitor entered the market who
has been eating into the client’s market share. The client needs your help to devise a competitive
response.

Interviewee: Just to confirm the objective, the client wants strategies to stem the loss of market share
they have been experiencing. What exactly has been the decline and when did the competitor enter?
Does the client have a specific target market share in mind that they want to attain?

Interviewer: They had a market share of 70% at their peak 2 years ago but this has now declined to
50% since the competitor entered the market. They just want your help to understand how they can
prevent a further decline in this and maybe re-attain their market position.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewee: Before I structure our approach, I need to clarify a few more things. For how long has the
client been in this business and in which geography?

Interviewer: The client has been a well-known name in this industry since the past 20 years. They
manufacture in Europe and have traditionally served European and US customers.

Interviewee: Interesting. This means the client was able to become the dominant player in terms of the
market share at the global level despite presence only in two continents. Who exactly are their
customers? What does the client’s value chain look like?

Interviewer: They usually have long-term contracts with builders. Whenever a new building block
comes up, the client is responsible for shipping and installing new elevators.

Interviewee: The longevity of the client and the long-term nature of the contracts would typically mean
close relations with customers which would help in this B2B industry. Can you tell me a bit more about
the competitors – How many competitors are there and what are their market shares?

Interviewer: There are basically just these two players in the market. The competitor has been able to
attain a market share of 25% since they entered 2 years ago. The remaining 5% of the market is made
up of small, regional players with negligible market shares.

Interviewee: How does the client compare with its competitors? Have they been facing a similar
problem?
Interviewer: It is just the client who has been facing this problem. In terms of the product, the
competitor has brought in a far superior elevator which is both faster and is priced cheaper.

Interviewee: Interesting. This product differentiation leads me to hypothesize that the client did not
undertake any product innovation over the years and customers are thus shifting to their competitor’s
superior products.

Interviewer: That is a fair conclusion.

Interviewee: Given this, I would like to take the following approach to consider the strategies the client
can adopt to grow their revenues. They can look to expand their business either organically by
themselves. Or they can adopt an inorganic expansion strategy by partnering with other firms.

Interviewer: What exactly do you mean by an inorganic strategy?

Interviewee: As part of an inorganic strategy, the client can look to partner with other firms or acquire
them with the aim to integrate vertically along the value chain.

Interviewer: That makes sense. Let us focus on organic strategies for now.

Interviewee: To grow their revenues organically, we can consider total revenues as the product of the
total number of customers and the average revenue per customer. The client can look for growth
opportunities in either of these.

Interviewer: Alright. Let us consider them both one by one.

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 Interviewee: Talking about the total number of customers, it will be the product of the total number of
potential customers of the client’s product and the percentage conversion among them. Given the lack
of value offered by the client in terms of product quality and price, this is the first thing they need to
address to increase the percentage conversion. The client needs to look at the typical customer’s
purchase journey, understand their needs, invest in R&D to improve their product and improve their
cost structure to offer a better price to the customer.

Interviewer: Makes sense. Let us talk more about increasing the potential customer base.

Interviewee: To increase the total number of potential customers, the client can either continue to focus
on geographies they are already present in or instead venture into new geographies. In particular, the
client has traditionally done well in the European and US markets. Can they venture into new countries?
Where exactly is the client’s competitor focusing on?

Interviewer: That is a good point. Yes, the client can consider moving into new geographies. In fact,
their competitor has been focusing on Asian markets which have been experiencing a healthy growth.

Interviewee: Interesting. It seems the competitor has been able to tap into new markets which the client
has missed out on. The client can do the same and target Asian customers. They can look at other
potential markets in the world as well and be the first one to move there.

Interviewer: How else can the client grow their total customer base?

Interviewee: The client can either target new customer segments, develop new products or explore new
distribution channels. In terms of new customer segments, the client can look to partner with builders
of both commercial buildings and residential societies as well. If the client is willing to invest, they can
introduce new products. They can leverage synergies in their manufacturing process by innovating
products that require similar manufacturing capabilities (materials/processes used). They can also
leverage synergies in their distribution/sales network by making other products required by their
existing customers - escalators, moving walkways etc. They can look to expand their existing
distribution and sales network as well. As a long-time brand in a B2B business, they can leverage their
sales relationships to persuade customers from defecting to other manufacturers while they meanwhile
understand and address their pain points.

Interviewer: Excellent. Let us talk about the average revenues per customer.

Interviewee: The average revenue per customer would be the product of the average volume purchased
per customer and the price charged to them. I assume the total number of elevators a customer buys
would be dependent on the contract length, building specifications, the real estate industry etc. In terms
of pricing, the client can look at a price discrimination strategy to extract maximum value from different
customer segments. If the client has other products that they offer, they can look at bundling and cross-
selling as viable profit maximization strategies as well.

Interviewer: Good. Is there anything else?

Interviewee: As a trusted name, the client can even look to leverage their brand by forging long-term
customer relationships based on trust. Further, even though they are surpassed in terms of speed of
elevators, the client can possibly identify other customer needs such as safety or luxury and rebrand
themselves. Accordingly, they can sell elevators to hospitals or luxury hotels and charge a premium
price as well. Finally, their competitor’s ability to innovate and excel quickly in this market points to

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 superior organizational capabilities. The client can perhaps look to poach the top management of the
competitor to attain fresh talent.

Interviewer: Outstanding. We can close the case here

(Source of case interview: IIM Shillong Case Book 2021-22)

Recommendations:

• Partner or acquire other companies to achieve forward and backward integration.

• Negotiate contracts to ensure optimum revenue per customer.
• Invest in R&D, perform operational redesign, consider organizational restructuring, and leverage
brand and sales network to dissuade customers from defecting.
• Venture into new geographies, new customer segments or new distribution channels to tap into
new customer markets.

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 Market sizing framework

Determine the key drivers and

decide the approach to solve

Top-down approach Bottom-up approach

Usually done by population Identify a micro-element of a
segment or household larger population and dial the
numbers up

Make assumptions

Calculate using round

numbers and use common
sense check

Analyse the results and check

the implications
Adjust the answer accordingly
Problem statement
A company manufacturing beer wants to enter the Kolkata market. They want you to estimate the
market size of beer in Kolkata.

Approach in brief

• Identify a parameter or a segment through which you can break down the number
• Make reasonable assumptions if any datapoint(s) is missing
• Provide viable solutions addressing identified gaps/problems

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 Approach Chart

18-30

Penetration basis
Population Split 30-50 behavioural
patterns

50+

Noteworthy Excerpt

Interviewer: Legal age for consuming Beer (21 or 18)?

Interviewee: Even though the legal age for alcohol consumption is 21, college students who in turn
are below 21 years of age are one of the heaviest drinkers of beer so leaving them out would not give
a very accurate result.

Example:

Interviewer: A company manufacturing beer wants to enter the Kolkata market. They wantyou to
estimate the market size of beer in Kolkata.

Interviewee: Does the company manufacture premium or regular beer?

Interviewer: They have products in both segments.

Interviewee: Do you want the market size in terms of units or sales?

Interviewer: First estimate the number of units from there maybe we can look at sales.

Interviewee: The population of the Kolkata Metro area is around 15 million. I would split them into
different age groups: less than 18 (who don't drink beer), 18- 30 (students and young professionals),
31-50 (older professionals) and 50+. These age groups will have different behaviour in terms of beer
consumption

Interviewer: You took the minimum age of beer drinkers to be 18, isn't the legal age 21.

Interviewee: Even though that is the case, college students are one of the heaviest drinkers ofbeer
so leaving them out would not give a very accurate result.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewer: Okay then, go ahead.

Interviewee: I would divide each age group by gender having a 50:50 split. Assign values to the
percentage penetration to each group and the number of bottles of beer they drink in a week this
would give me the weekly consumption.

Interviewer: You have not considered the income levels of the population. Do you think it is
not a major factor in this calculation?

% Populati
Weekly Weekly Total
Populatio Population on
Consumptio Consumptio Weekly
n (Assumptio (Numbe
n (Male) n (Female) Consumpti
Split n) r)
on
18-30 25% 3.75M 2 1 2.47M
30-50 25% 3.75M 2 0.5 1.71M
50+ 30% 3M 0.5 0.2 0.17M
Please note that gender ratio is taken as 1:1 Total 4.35M

Interviewee: I do not believe it does. Because beer drinkers will consume beer irrespective of how
much they earn. Also since the company manufactures beer in different price ranges, they will be
able to cater to consumers from all income levels.

Interviewer: That seems like a fair assessment. You can go ahead with the calculation.

Recommendations:

• Don't ask for too much data, just make clear, rational assumptions.
• Candidates should know about the population area and such statistics of their home town or state
• The interviewee should take a couple of minutes at the beginning to structure their response
instead of diving in from the get go

(Source of case interview: IIM Shillong Case Book 2021-22)

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Declining profits framework

What is driving the decline of

profits?

Gather information and

analyse using profit equation
Equation= Revenue - Cost
Equation =

Revenue Cost

Price Volume Product Mix Fixed costs Variable Costs Unusual expenses

Decreasing Selling less Added capacity Raw Material Writeoffs;

comp. pressure profitable item prices Lawsuits

Decrease Increase
Market conditions Higher marginal
Competitions Cost or Overtime

Problem statement

A Public Sector bank is facing declining profits in ATM business

Approach in brief

• Identify key focus areas

• Consider all possible reasons for losses
• Provide structured solutioncovering identified gaps andaddress any major innovationin the
sector

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Approach Chart

Fee charged from

own customers

Revenue
Fee charged from
other bank
customers
Profit

Fixed Cost

Cost
Payment for
transactions by our
customers at other
bank ATMs
Noteworthy Excerpt

Interviewer: You are missing on one-line item that is crucial for profitability?

Interviewee: In ATM business, your revenue loss becomes your cost and has a double impact on your
income statement, which means if your customer uses other bank ATM, you loose out on revenue
and you also have to pay a cost to the other bank for that transaction.

Example:

Interviewer: Your client is a public sector bank. It has been facing declining profits from its ATM
business. Help them in finding solutions to their problem

Interviewee: I would like to begin with confirming the problem statement and would also like toask
few clarifying questions. Also, I would like you to please help me
with a brief understanding on how ATM business works for the banks there a particular mode of
transportation that they want to focus on?

Interviewer: Yes sure, go ahead.

Interviewee: So our objective is to just focus on profits or profitability of ATM business

Interviewer: Yes, you may focus on absolute profits

Interviewee: So as per my understanding, the revenue for ATM business comprises of the fee that is
charged for transactions of own bank customers (over and above the free transactions) plus the fee
charged by other banks for other bank customers using our ATM

Interviewer: Yes, that’s correct but you are missing on one-line item that is crucial for profitability

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewee: Is it related to fixed costs or variable costs?

Interviewer: No, so in ATM business, your revenue loss becomes your cost and has a double impact
on your income statement, which means if your customer uses other bank ATM, you loose out on
revenue and you also have to pay a cost to the other bank
for that transaction

Interviewee: Correct thanks for helping me there. So, this burden is high mostly in cases of free
transactions.

Interviewer: Right

Interviewee: So, few more questions I have – How many ATMs do we have, any major split in
terms of branch/non-branch, geography etc. How do we stand in terms of the number of ATMs with
respect to other banks?

Interviewer: Okay. So our client has around 3500 ATMs spread across the country at present. Last year
they closed 500 ATMs on account of losses. As far as industry is concerned, we have the second largest
number of ATMs in India. Highest number of ATMs operated by a single bank is 5000

Interviewee: Thanks. And any information on how is our profitability is as compared to the peers?

Interviewer: Our profits have dropped by 25% in the last 3 years. Other public sector banks have either
maintained profitability numbers or have seen a drop of maximum 5-7% in the last years. Private sector
banks are having highly profitable ATM business

Interviewee: Are the inter-bank commissions standard – meaning is this same for all the banks?

Interviewer: Yes, it is regulated by RBI

Interviewee: Okay, what I can think of here is that we are losing out on revenue which in turn is
impacting us with additional costs as explained by you earlier. The reason I feel this can happen is
majorly because of 2 reasons – 1. More technical downtime and unavailability of cash in our ATMs, 2.
ATMs not located in appropriate places or competition have ATMs strategically located which reduces
ATM transactions for us – both own customers as well as other bank customers

Interviewer: You may focus on the second hypothesis of yours.

Interviewee: Okay, so for approaching this side of the problem, we need to first understand the 3500
ATMs we have and which are the ones that are loss making in terms of no of transactions. We need to
have case by case analysis of each ATM or clusters and decide based on profitability, location etc. and a
decide to shut down loss making ATMs. Further we need to find out locations which bring high number
of ATM transactions like metro stations, IT parks, Residential societies etc. and we need to capture those
places where competition is less or is not present. A future driven approach has been applied. Further we
can explore option of mobile ATMs and can provide portable ATM machines to shops in residential
localities where people can withdraw money using that machine and can collect cash from the
shopkeeper. IDFC has been using this model lately

Interviewer: That’s good enough. This was a constructive interactive. Thank you and all the very best

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Recommendation:

• Feel free to ask about business model if you are not sureabout that
• Bifurcate the multiple reasons for declining profits
• Consider feedback as an opportunity and explore alternative approach/ solution

(Source of case interview: IIM Shillong Case Book 2021-22)

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Increasing Profitability

Revenue COGS SG&A

Price Volume Direct Material Direct Labour Variable O/H

Scale Replace Cost Acctg. -

Price Existing
Economies w/machines – Allocation
Sensitivity - Market -
/Diseconomies Union? Drivers - Does
Elasticity Promotion -
- Supply pricing reflect
Place
Competitive New Markets - Constraints Cost
Environ. - Geographic -
Substitutes Economies of Inventory
Scope Mgmt. -
Carrying Costs -
Shrinkage

Problem statement
The State Transport Department of USA is exploring ways to increase their profits after a few years of
dip

Approach in brief

• Identify key focus areas

• Dive deeper in focus areas to identify problems
• Provide viable solutions addressing identified gaps/problem

Approach Chart

Ticket Sales

Revenue

Concession Stands

Profit

Wages

Cost

Other

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Noteworthy Excerpt

Interviewer: Back-office team drives majority of the wages, what would you recommend to cut costs?

Interviewee: Seeing as it is mostly staff costs, this may lead to layoffs. I think there are ways to trim
the team down by leveraging technology, like by using ERP systems.

Example:

Problem statement: The State Transport Department of the United States of America is exploring
ways to increase their profits after a few years of dip

Interviewee: Is there a particular mode of transportation that they want to focus on?

Interviewer: Yes. Ferry.

Interviewee: Do we have any recent Top-Line or Bottom-Line figures for Ferry department?

Interviewer: (Data for only one year provided, no trends. Data indicates marginal profits)

Interviewee: Would the department like to focus on increasing revenue or decreasing costs?

Interviewer: Let’s look at revenue for now

Interviewee: Sure. Do we want to increase non-transport related revenue or ticket volume?

Can you elaborate further?
So, I am guessing there will one revenue stream coming from the ferry tickets, and
another from non-transport activities like concession stands

Interviewer: Yes sure, lets look at the non-transport revenues

Interviewee: What are your current sources of non-transport revenues?

Interviewer: Only concession stands at the docks – say we wanted to branch out, what other sources
would you recommend?

Interviewee: Well, renting out the ferries for private parties, hosting birthdays and weddings, that could
be an avenue to explore. We could also consider vending machines on the ferries.

Interviewer: That sounds good – could you give us an estimate of the revenue we can generate from
this data: That looks good, we now have some data on the cost side (Gives the breakup of the
expenses)

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewee: Okay so it looks like close to 80% of all ferry expenses are for staff wages – does that
include the crew?

Interviewer: Yes – but it is only a small percentage

Interviewee: Okay so may I ask what is the remaining percentage? Maintenance staff? Back-office
team?
Do we want to cut costs?
What would you recommend?

Interviewer: Seeing as it is mostly staff costs, this may lead to layoffs. I think there are ways to trimthe
team down by leveraging technology, like by using ERP systems – we can explore that if you want
Okay sure

Interviewee: What is the primary operation of the Back-office?

Interviewer: Primary functions include Booking tickets, scheduling, etc.

Interviewee: I think most of these functions can be fulfilled by websites and self-service kiosks.
However, we may need a small technical team for its maintenance.

Interviewer: Okay sounds good – can you summarize the case for us?
(Gives summary, highlight the conclusions reached and tentative way forward)

Recommendations:

• Don't ask for too much data, just make clear, rational assumptions and expressly state them before
proceeding with the solution
• Maintain the required structure in mind to not lose track of the original ask
• Consider feedback as an opportunity and explore alternative approach/ solution

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Pricing

Pricing

Existing Product New Product

(Modified)

Competition exists No Value based Pricing Cost based

Competition Pricing
Value based
Cost based
Pricing
Pricing
Cost based
Competitor Pricing
based
Pricing
Problem statement

The State Transport Department of USA is exploring ways to increase their profits after a few years of
dip

Approach in brief

• What business is the client operating?

• What is the product or service that is being offered?
• What are the various uses of the product?
• How is it different from what is being offered by the competitor?
• Expected margin
• Substitute products
• Capital investments and expected payback period

Approach Chart

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Example:

Problem Statement: Client is a Korean conglomerate, and wants to launch a new fertilizer in the US
market. Monetize the fertilizer.

Interviewee: Okay, can you tell me more about the client? What is the main business of theclient?
Where does the client currently operate?

Interviewer: The client manufactures chemicals, fertilizers, and other petroleum products.
They currently operate in the Asian market.

Interviewee: Since the client operates in the Asian market, why are they targeting the USmarket?

Interviewer: Fertilizers is not a big market in Asia due to low income of farmers, hence for high
profits the clients want to launch it in US directly.

Interviewee: What is the new fertilizer? Is it different from the fertilizers people generally use in US?

Interviewer: Yes, it accelerates the growth of fruits.

Interviewee: Does it work on all kinds of fruits or any specific types of fruits?

Interviewer: It has been tested successfully on apples; hence the client wants to launch it only for
apples as of now.

Interviewee: Does the client have a patent for this product? Does any similar marketalready exist in
US?

Interviewer: Yes, the client has a patent. No such market exists.

Interviewee: Okay. Does the client plan to set up a manufacturing plant in US or import theproduct?
How are they planning to sell to the customers?

Interviewer: That will depend on the revenues we are expected to generate, you can ignore that for
now. They plan to sell it through retail chains across US.

Interviewee: Okay. To price the fertilizer, we cannot use competition-based pricing since there is no
competition, and cost-based pricing also cannot be used sincewe don’t know about the cost details,
hence I think that value-based pricing will be the best way to monetize this fertilizer. You mentioned
that it accelerates the growth of fruits. By how much does time get reduced?

Interviewer: The time gets reduced by 20%.

Interviewee: How much time does the normal cycle of apples take to grow?

Interviewer: It takes 90 days.

Interviewee: Okay. This means that a farmer can grow 4 cycles in a year, taking 360 days. Reducing

ConQuest – The Consulting and Strategy Club of IIM Shillong

 time by 20% means the new cycle will be complete in 0.8*90 = 72 days, and the farmer can now grow
5 cycles in a year. What is the price of thefertilizer that they currently use?

Interviewer: There is only one type of fertilizer in the market, which costs $40/kg.

Interviewee: How much quantity do they generally require?

Interviewer: 5kg of fertilizer is required for 1 acre of land.

Interviewee: Okay. Now considering that we price the new fertilizer at $40/kg, we can saythat the
customers spend $40 for 0.2 acre land per cycle, and an additional $40 for the 5th cycle. In addition,
they would be making an additional revenue from the 5th cycle. Added profit would be *profit per
cycle* per 0.2 acre, from 1 kg fertilizer, per year. We can add a premium to the base price of $40
depending on this value, it should be lower than the value (profit per cycle)/5, since for the new
fertilizer the customer will be paying this amount every cycle.

Interviewer: That looks good, thank you.

Recommendations:

• Don't ask for too much data, just make clear, rational assumptions and expressly state them before
proceeding with the solution
• Maintain the required structure in mind to not lose track of the original ask
• Consider feedback as an opportunity and explore alternative approach/ solution

(Source of case interview: IIM Calcutta Consult Club Case Book 2020-21)

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Market Entry
Framework Overview and Structure:

Should they
enter?

New Market Product Customers Capabilities Regulations

Scale and Growth Product

Differentiation Manufacturing Government
Major Players Target Segment
Positioning Financials Norms
Market Share Customer Habits
Price/Features Sales and Resource
Advantages / Segmentation
Other attributes Distribution Availability
Disadvantages

Yes / No Why No? Suggestions

If Yes How?

Entry Options Operational Decisions Marketing Growth Plan Conclusion

Raw Material,
Workforce How to scale up
Start on own
Promotion Product /
Acquire Manufacturing
Strategies Geography
Joint Venture Distribution
expansion
Channels

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Example:

Problem Statement:

Your client is leading water purifier company and has recently launched water purifying powder in
India that will remove all the impurities when mixed with tap/ground water. Design a market launch
strategy

Interviewer: Your client is leading water purifier company and has recently launched water purifying
powder in India that will remove all the impurities when mixed with tap/ground water. Design a market
launch strategy

Interviewee: I would like to ask some questions regarding the product to decide on the target segment

Interviewer: Sure, go ahead. You can take 5-6 minutes to come up with the target segment

Interviewee: How does the process work? Will the powder purify any water?

Interviewer: It will purify the tap water and the groundwater

Interviewee: In the entire process, is any waste generated?

Interviewer: For our convenience, let us assume that no waste is generated.

Interviewee: I would like to divide the target market into urban and rural segments and High- income,
mid-income, and lower-income. In Urban areas, our target should be the low- income segment to Lower
middle-class segment as an upper-middle class and High- Income people in both areas will already have
automatic purifiers installed.

Interviewer: Fair enough, what do you think about the rural areas?

Interviewee: I suppose similar logic applies for rural areas, so our target should be Lower middle
class and poor

Interviewer: Okay. Are there any other customers you want to target?

Interviewee: Yes, as our product does not leave any waste in the process, I would also market it in the
areas with high water scarcity in places like Chennai as it saves water. This product has high scope in
the coming years with groundwater reserves emptied in major cities, and as people cannot use water
purifiers due to high water wastage. We can target all segments of people in these areas
Also, this product can be beneficial while traveling, and we want pure water.

Interviewer: Great, so we have decided on our target segment? How do you think we should launch
our product? What should be the price of the product and quantity?

Interviewee: I think the price should be less enough for them not to think twice while paying. As our
primary target segment is low-income groups, we should provide enough power to purify 3 liters of
water for one person per day. I think we should launch it in small sachets and price it around 10 Rs.
which is not a burden on them. Assuming a family of 4 needs 15 liters of water per day for drinking and
cooking, they will need to spend less than 50 Rs for clean water

Interviewer: Yes, I thought that we should launch in a similar way like ORS Sachets. What are the
costs you anticipate during the manufacturing?

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewee: Mentioned the different costs production, Marketing, Distribution, etc.

Interviewer: Okay, assume that we are setting the selling price at Rs 10 Per 3 liters. What will be the
revenue generated per day?

Interviewee: I assume that around 50% of the Indian population will come under the lower middle and
poor segments. Assuming that the Indian population is 120 crores, 60 crore people will come under our
target segment. I think 50% market penetration for our product with 30 crore people using it.
So, assuming a single person needs 3 liters of water per day, if 30 crore people use it, our revenue will
be 300 crores.

Interviewer: Amazing. Now coming to the final question. I want you to think about pitching the
product to your manager. Think about five aspects that you think are most prominent for this product?
I Suggest you take around 5 minutes to get your thoughts together and answer the question?

Interviewee: The five reasons why this product should be launched are:
There is an immediate need for a disruptive product like this that will change the hygiene system in the
country
The product is portable and efficient
Will have an enormous impact on the health of lower middle class and poor people, and positive
advertising for the company
Increased customer reach with water shortages looming in the near future and RO not being an option
as it generates more wastewater for water purified. High sales expected with the low price of the product

Interviewer: Great. Well done! We can stop here.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Mergers and Acquisition
Framework Overview and Structure:
M&A cases are focused on decisions regarding a potential merger or acquisition opportunity. It is
important to understand the synergies involved, do cost vs benefit analysis & due diligence, and
recommend whether to take the opportunity or not.
Some important factors to consider:

Deal Rationale Business Benefits

What is the firm’s objective? How the target fits?
• Target • Business Synergies
• New Market/ Channels • Market Research
• Cost Reduction • Competition/ Survival
• Market Share/ Competition • Cost Saving / Tax Benefits
• Investment • Portfolio Expansion

Deal Price Potential Risks

Fair Price? Challenges / Risks in M&A
• Valuation? • Synergy Realization
• Is it fair? Can we afford? • Integration
• Transaction Type • Cultural Aspects
. • Post M&A Cost • Macro- economic risks

Due Diligence Implementation

Checks and Confirmations • How can the merger or acquisition
• Strategic Options be effectively.
• Commercial (Market Related) implemented
• Operational (Target Related) • Issues related to cultural
• Financial (Target’s data, integration and operational
• Valuation) aspects and targeted
benefits

Exit Strategies
How, When & Why to exit?
• Strategic Options
• Commercial (Market Related)
• Operational (Target Related)
• Financial (Target’s data,
Valuation)
• Legal (Regulatory Norms)

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Case Interview:

Example:

Problem Statement:

Your client is a large PE firm, based out of India. It focuses on firms in the home utility and consumer
durables’ space. The client has identified a company (referred to as the Target) in the second-hand
furniture space (C2B and B2B), that it wants to invest in. They want us to conduct a due diligence study
of the furniture re-commerce market and the target capabilities. How would you approach this
engagement? What would your considerations be?

Sure. So, to clarify the objective, the idea is to develop a structure for the due diligence activity –
covering both the furniture re-commerce space and the Target. Is that right? Are we also expected to
come up with recommendations on the investment strategy?

Interviewer: Yes, that’s right. No, recommendations are not needed. I only need you to structure the
due diligence activity.

Interviewee: Sure, understood. I’d like to breakdown the analysis into 3 sections – The Furniture
Re-commerce Market, The Target, Client (PE) Capabilities and Synergies.

Interviewer: Let’s shelve the client analysis for now. Focus on the market and target analysis.

Interviewee: Okay. I’d like to start with the market. There are 2 aspects that I want to look at as a part
of the market analysis.
a) I want to do a sizing activity to gauge the second hand furniture market size in India;
b) Next, I’d like to look at the growth drivers of this market to understand how the market will grow
over the next 4-5 years (typical investment period for a PE firm)

Interviewer: Okay. That’s a good start. Go ahead. I have some data points to help you get started. All
datapoints are for FY 21. You can assume a 10% CAGR on the top-line. Total Furniture Userbase in
India ~ 450 Mn
Total Annual Furniture Shipments ~ 250 Mn Average
Furniture Replacement Cycle ~ 3 Years
% of Furniture Exchanged Commercially ~ 30 (Buy Back/Exchange/Re-sale)
% of Second-hand Furniture Exchanged in P2P Mode ~ 90

Interviewee: Okay, thank you. Let me take a minute to understand the data.

Interviewer: Sure, take some time and let me know how you would go about it.

Interviewee: Since we are looking at how many second-hand furniture pieces are exchanged
(bought/sold), I’d like to look at the number of furniture pieces shipped on an annual basis. From this

ConQuest – The Consulting and Strategy Club of IIM Shillong

 total number, I would look at the number of new and second-hand furniture pieces that are shipped.
Finally, I would like to look at the number of second-hand furniture pieces exchanged through
organized C2B platforms (such as the Target and its competitors).

Total Furniture Userbase = 450 Mn

Average Furniture Replacement Cycle = 3 Years

Number of New Furniture Sold/Shipped Annually = 450/3 = 150 Mn

Number of Second-hand Furniture Transactions = 250 – 150 = 100 Mn Number of Second-hand

Furniture Shipped Commercially = 0.3*100 = 30 Mn Number of P2P Second-hand Furniture
Shipments = 0.9*30 = 27 Mn Organized Exchange of Second-hand Furniture = 30 – 27 = 3 Mn
(FY ‘21)
So the current market size for organized second hand furniture market is about 3 Mn units annually. Do
you want me to project these numbers for a 5-year period assuming 10% CAGR on the top line?

Interviewer: Good! The market size estimation is indeed accurate. Well done. No, we can leave the
projections be for now. Let’s move ahead. What do you think would be the growth drivers for this
market? Would you expect the market to grow or shrink?

Interviewee: Major macroeconomic factors indicate that real estate and home furnishing businesses in
India will continue to be on the rise over the years to come. Growing GDP, higher per capita income,
the growing demand for smart homes, IoT enabled furnishings, and rural adoption of basic furniture
point towards a strong growth potential. New business models such as organized P2P renting,
refurbishing, and customization will drive business in the Target’s niche. As customers also realize the
monetary potential of used furniture, the market is likely to boom and prospects look good over the next
5 years.

Interviewer: Alright. That’s a fair justification. Let’s move on to the analysis of the Target. What are
your considerations?

Interviewee: In looking at the Target, I would first want to understand the core business proposition –
what is it that the business does? Does it operate in a niche market or is it a general proposition? If need
be I would also look at riper international markets to understand how they have evolved, how the players
have consolidated themselves and get a sense of where the Indian market may be headed.

Interviewer: That sounds good. So, the target primarily has capabilities in furniture repair and
refurbishment and they sell primarily to businesses (OMs and Retailers). They source used furniture
sets from users, undertake refurbishment activities and further sell these units. In terms of volume, the
Target is the 3rd largest player in the market and handles about 23% of all second-hand furniture
exchanged.

Interviewee: Thanks for the information. I want to start with a competitive benchmarking exercise, to
understand and map competitor and Target capabilities and USPs. This would help identify
approximately what portion of the growth pie the Target can internalize. Creating this market map
would also help identify market niches and extend the Target’s business portfolio.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewer: A thorough competitive benchmarking is indeed the next logical step that we’d adopt.
Good! Let’s move on. You spoke about wanting to look at international markets. Why would you do
that? And if you had to pick one market that’s closely related to the Indian marketplace, which would
it be? And why?

Interviewee: The Indian market for consumer durable re-commerce is still nascent and studying a
mature international market would help us understand how a transformation might occur and serve as
a base for identifying the common challenges. From a PE perspective as well, it would help the client
understand what they can expect over their investment period and how they can plan for suitable exit
options.
In terms of market relevance, I would say China is closely related to the Indian market. The market size,
structure, buying patterns, and consumer mindsets of the two countries are largely similar. Further,
India’s start-up revolution has been largely inspired by the Chinese market and that is good reason to
believe that any transformation in India is likely to be inspired by the Chinese market

Interviewer: Makes sense. Good. To bring this to a logical closure, can you list down the top 4 exit
options that you think would be plausible for the client.

Interviewee: Sure. The most likely exit options for the client involve the buy-out of the client’s
stake by larger entities.
a) Client stake buy-out by a larger global PE firm

b) Client stake buy-out through the Target’s acquisition by an Indian ecommerce giant or a large
furniture manufacturer/assembler
c) Client stake buy-out through the Target’s acquisition by a larger global firm in
the furniture re-commerce space
d) Client stake buy-out through an IPO for the Target

Additionally, it’s also possible that strategic partnerships are formed with niche industries such as IoT,
Home Automation, Insurance and Technology Services. The exit in these situations would have to be
looked at on a case by case basis.

Interviewer: Alright. That’s a very good analysis. We can stop at this point. Well done. Thank you!

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Unconventional Cases
Framework Overview and Structure:
Unconventional cases generally cannot be fit into any of the frameworks we have studied so far. These
cases are generally open-ended and have multiple ways of being structured. Most unconventional cases
do not have a particular solution like Profitability cases do. An example of an unconventional case
would be – “You are required to improve the literacy rate of your state.” As you can see, this case
focuses on how creative you can be and how broad your framework can be to incorporate maximum
point. There is no one solution in this case.

Some examples of common unconventional cases and how you can approach them –

A) Journey or time-related problems –Calculate the total time taken at each step of the journey to
isolate the problem

START POINT TRAVEL END POINT

B) Process-related problems with regards to a particular goal –E.g. Help India win the next Football
World Cup

PRE DURING POST

C) Increasing footfall at a particular event –E.g. Increase the footfall of a concert in Delhi

POPULATION % THAT ARE AWARE % THAT CAN COME % THAT WANT TO COME

Example:

Problem statement:
Your client is an online retailer of clothes and has been facing a problem of high churn rate on their
payment gateway. You need to analyse why this is happening and give recommendations accordingly.

Approach Chart:

High churn rate

Directing to page Making the payment

Convenience Interface Time Additional Charges

Obstruction
OTP

Security

OTP sent by Information sent

Success Bank/Wallet to Bank/Wallet
Rate

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Interviewer: Your client is an online retailer of clothes and has been facing a problem of high churn
rate on their payment gateway. You need to analyze why this is happening and give recommendations
accordingly.

Interviewee: Interesting problem. I would like to begin by understanding our client better. What kind
of clothes do they sell? What is the target market?

Interviewer: Our client sells jeans for both men and women. Our target market is everyone in the
age bracket of 18-50.

Interviewee: Got it. Since when have we been facing this problem? What is churn rate? How much
has it increased by? Are competitors facing a similar issue?

Interviewer: Ever since the inception of the website. Churn rate is the number of customers who leave
a product over a given period of time. You don’t have to worry about that. Consider it to be high enough.
Our competitors have reported no such issues.

Interviewee: Sure. What are the modes of payment that our website offers and is the decline uniform
across all modes? Is it fair for me to assume that we use a third-party payment gateway?

Interviewer: We have credit/debit cards, PayTM and Google Pay. The decline is fairly uniform across
all the modes. Yes, we have a partnership with a third party.

Interviewee: Understood. We can analyze the high churn rate by breaking it down into a process:

STAGE 1: Directing to the payment gateway

1) Obstruction -Banners appearing on the screen

2) Convenience -Time taken to load the page
3) Security -Whether the connection is secure or not –usually indicated by a lock on the search bar
4) Success rate –Number of incidents where redirection is unsuccessful

STAGE 2: Making the payment

1) Interface -Ease of navigation and use, whether all options are displayed and so on
2) Time -Time taken to send the OTP and navigate between pages
3) Additional charges-Whether additional charges are added at this stage.

Interviewer: You have covered everything. We have realized that the time taken to send the OTP is
about 3 minutes.

Interviewee: Thank you. From my personal experience, 3 minutes seems like a long time. To gauge
the situation better, do we have information on how much time other websites take?

Interviewer: Yes. Other websites take 5-10 seconds.

Interviewee: Interesting. Time taken to send the OTP can be divided into:

1) Information sent from our payment partner to the wallet/bank

2) OTP generated and sent to payee

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Given that the time taken by other websites is not as high, I think we can fairly assume that our partners
take more time to send the information to the wallet/bank.

Interviewer: Correct. What do you think we should do?

Interviewee: We can improve the situation by:

A. Sticking to the same payment gateway:

1) Improve its efficiency
2) Recovering lost sales from the third party via penalties
3) Introducing a commission-based model to incentivize better performance of the third party
4) In the interim period, we can add a disclaimer that the OTP may take time to deliver and customers
are requested to be patient

B. Hiring a different third party or developing our own payment gateway after doing a cost-benefit
analysis

Interviewer: Great. We can close the case now.

Recommendations:

Things to keep in mind in unconventional cases:

1) Try to break the problem into a mathematical formula whenever possible

2) Aim at looking the problem in 2 ways –quantitatively and qualitatively
3) If the case is really broad, try asking the interviewer if you can focus on only the most important
bucket
4) Bucketing helps massively in unconventional cases
5) Never begin an unconventional case structure without ensuring you’re familiar with the problem or
the industry; ambiguity can be your biggest enemy.

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 Guesstimate
Guesstimates are approximated estimates done on the basis of guesswork & calculations. The
entire purpose of guesstimates in an interview is to assess your:
Structural thinking & approach (how pragmatic your approach is?)
• Comfort level with number & quick calculations
• Sanity checks & validations
Approaches to solve a guesstimate:
1. Top-Down approach:
Here, you start from the bigger data like population (i.e. the top level) & then making
approximations & narrowing down until you arrive at the answers
Important points:
• Identification of the appropriate universe
• Making the right assumptions & calculations.
• Segmentations can be done based on-
- Demographics (age, sex, income, ethnicity, etc.)
- Psychographics (attitudes, behaviour, values, e.g. smoker vs non-smoker, dog vs cat
person, etc.)
- Geography (urban vs rural, Tier I/II/III cities, country, continent, etc.)
- Channels (offline vs online, mobile app vs website, etc.)

2. Bottoms-Up Approach:
Here, instead of top level you start from the bottom level data such as pen need by a
person/month & then build up further making assumptions & calculations.

Bottom-Up approaches

Household approach Population Approach Bottle-neck approach

(for calculating no. of (No. of people taking (for calculating no. of
refrigerators, etc.) taxi, etc.) trains/day)

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 Example 1:

What is the Surf-excel detergent usage in a day in India?

Ans. The best way to start with this question would be with the population.

India ~1.3 billion

Rural ~ 70% ~ 900 million

Urban ~ 30% ~ 400 million

Rural - upper BPL : ~ 40% = 360 million

Rural (BPL) : 60% = 540 million

Rural (BPL)

We can assume Rural BPL mostly as collective households, averaging at 5 per family: ~110 million

1. Mostly they use sachets. let’s average the usage 2 sachets of 3 rs each per week: 24–30 Rs. per
month ~ 25*110 = 2750 million INR.
2. Now Surf Excel is a little costly sachet, and given cheaper alternatives available, we can assume
its share to be around 5–10% =200 million
3. For per day: 200/30 ~ 7million INR

Rural (Above BPL)

1. We can assume 4 sachets per week ~ 12 = 50–60 per month

2. Total household: 72 million = 72*55 = 3960 million INR monthly
3. Surf Excel share ~ 20% (others going to wheel, rin, ok, ghadi etc.) = 792 million INR
4. Daily use therefore: 792/30 = 26.4 million INR
5. Total Rural daily revenue: ~ 33 million INR

Urban

1. Urban Low class ~ 30% = 120 million = 24 million household (5 per family) : Usage 250gms
per month: 50 INR = 1200 Million INR
2. Surf Excel share: 5–7% = 84 million INR.
3. Daily: 84/30 million INR = 2.8 million INR
4. Urban Middle class: - 40% = 160 million = 40 million households (4 per family)
5. Average use: 500 gms per month , 90 Rs per month = 3600 million INR
6. Surf excel share: 20–25% = 900 million INR
7. Daily : 900/30 = 30 million INR
8. Urban High Class: 120 million ~ 30 million households (4 per family)
9. Average use: 1kg per month, 200 INR = 6000 million INR.
10. Surf Excel (King here) ~ 70% share ~ 4200 million INR
11. Daily = 4200/30 = 140 million INR.
12. Total Urban daily revenue: = 173 million INR

So total daily monetary value of the usage:

ConQuest – The Consulting and Strategy Club of IIM Shillong

 1. Rural daily + Urban daily = 33+173 = ~ 206 million INR
2. So Surf Excel totalling a value of Rs. 206 million is used in India daily.
3. If you want to find out the quantity, let’s divide it by the average kg price ~ 160 INR
4. = 206/160 Million Kgs ~ 1.29 million Kilograms per day.

Example 2:

How many t-shirts e-commerce companies selling in India per day?

We can approach this problem in two ways:

1. Demand side
2. Supply side

We are going to solve using demand of t-shirts in the market

Total population of India: 1 bn (approx.)
Reach to internet: 40% =400 Mn
Reach of ecommerce companies to deliver products: 3/4th = 300Mn

Let's assume 50% are male and 50% are female

Let’s solve for male population first.

Now I have divided males in the four categories on the basis of age because demand of t-shirts for
different age groups will be different.

1. 0–15 yr = 45 Mn, on an average, individual own 4 t shirts -> 4*45=180 Mn

2. 16–22 yr = 23 Mn, on an average individual own 5 t shirts -> 5*23 = 115 Mn
3. 23–50 yr = 65 Mn, on an average individual own 4 t shirts -> 4*65 = 260 Mn
4. 50 - 80 yr = 18 Mn, on an average individual have 2 t shirts -> 2*18 = 36 Mn

Total t-shirts owned by men: 180 + 115 + 260 + 36 = 591 Mn ~ 590 Mn

Let's solve for female population now:

1. 0–15 yr = 45 Mn, on an average individual own 3 t shirts -> 3*45=135 Mn

2. 16–22 yr = 23 Mn, on an average individual own 5 t shirts -> 5*23 = 115 Mn
3. 23–40 yr = 40 Mn, on an average individual own 4 t shirts -> 4*40 = 160 Mn
4. 40 - 80 yr = 67 Mn -> we can neglect this section. Only a few ladies prefer to use t-shirts in this
age group.

Total t-shirts own by females: 135 + 115 + 160 = 410 Mn

Total t-shirts own by men + women = 590 + 410 = 1 Bn
Average life of a t-shirt = 2-year
Demand per year = 500 Mn

Online portals provide coupons and offers but because of trust factor and fitting issues, people in India
still prefer to buy offline.
So, I am assuming 30% of people buy a t-shirt from eCommerce portal and 70% are buying from
market.
Total number of t-shirts sold through eCommerce platform per year in India= .3*500 = 150 Mn
Number of t-shirts sold in India per day (from eCommerce portal) = 150 * 10^6/365 ~ 4.1 lakhs

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 Guesstimate 1

Number of washing machines sold each year in India

Assumptions:
• % of Metro/Tier I cities, Tier II/III cities & villages taken as 20%, 15% & 65% respectively.
• Family size (No. of family member) for Metro/Tier I cities, Tier II/III cities & villages taken as
4, 4, & 5 respectively.
• % of poor, middle income & rich in-
- Metro/tier I : 20%, 60% & 20% respectively
- Tier II/III: 40%, 50% & 10% respectively
- Villages: 60%, 35% & 5% respectively
• Average life of washing machine = 10 years & Market Growth rate = 5%

Solution:
Total Population of India =
1,40,00,00,000

Metro/Tier-1 cities (20%) Tier-II/III cities (15%) Villages (65%)

= 28,00,00,000 = 21,00,00,000 = 91,00,00,000

Average family size – 4 Average family size – 4 Average family size – 5

members members members
No. of Household/family No. of Household/family No. of Household/family
=7,00,00,000 = 5,25,00,000 = 18,20,00,000

Poor (20%) = 1,40,00,000 Poor (40%) = 2,10,00,000 Poor (60%) =10,92,00,000

Middle Income (60%) Middle Income (50%) Middle Income (35%)
= 4,20,00,000 = 2,62,50,000 = 6,37,00,000
Rich (20%)= 1,40,00,000 Rich (10%)= 52,50,000 Rich (5%)= 91,00,000

Washing Machine Owners Washing Machine Owners Washing Machine Owners

Poor (0%) Poor (0%) Poor (0%)
Middle Income (50%) Middle Income (40%) Middle Income (0%)
=2,10,00,000 = 1,05,00,000
Rich (100%)=1,40,00,000 Rich (100%)= 52,50,000 Rich (50%)= 45,50,000

Total = 3,50,00,000 Total = 1,57,50,000 Total = 45,50,000

Total Owners in India = 5,53,00,000

Average life of washing machine = 10 years, Growth rate = 5%

Washing machine sold in year = 5.53cr/10 + 0.05*5.53cr = 82,95,000

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Guesstimate 2

Number of daily passengers in Pune airport

Assumptions:
• Operational hours of each runaway is taken as 20 hours
• Split of domestic vs international is 70:30
• Average no. of passengers/flight is taken as 150
Solution:

Total Available Hours

24 hours

Peak Hours Non-Peak Hours Non-operational

8 hours 12 hours 4 hours

Boarding gates used Boarding gates used

100% 60%

Total Boarding gates = 5

Boarding time = 45 minutes

= (8hours/0.75 = (12 hours/0.75

hours) *(100%*5) hours) *(60%*5)

= 50 flights = 48 flights

Taking 30% markup for layover flights

= 130 flights

Taking an average of 150 passengers per flight

= 19500 passengers

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Guesstimate 3
Number of schools in the city of Mumbai

Notes & assumptions:

• Considering both, private as well as government schools
• The large schools will have all classes, from nursery till 12th grade, the medium schools would
usually have classes only till 10th grade and the small schools, would have classes only from 1st
to 5th grade.

Solution:
Population of Mumbai = 2,00,00,000

Population below 18 years (School going age) = 30%

Total population for consideration = 60,00,000

% of school going children in different income segment

Lower
Upper class Middle class middle class
BPL (30%)
(10%) = (40%) = (30%) =
= 18,00,000
6,00,000 24,00,000 18,00,000

% going to % going to % going to % going to

school : school : school : school :
100% 100% 60% 30%
= 6,00,000 = 24,00,000 = 10,80,000 = 5,40,000

Average school going children in different category schools

Large Schools: Medium Schools: Small Schools:

No. of Students/class = 40 No. of Students/class = 35 No. of Students/class = 30
No. of divisions/class = 4 No. of divisions/class = 3 No. of divisions/class = 1
th th st th
No. of classes = 15 (Nursery to 12 ) No. of classes = 15 (Nursery to 12 ) No. of classes = 12 (1 to 12 )
Total no. of students/school = 2400 Total no. of students/school = 1575 Total no. of students/school = 360
% of Large Schools in city = 30% % of Large Schools in city = 50% % of Large Schools in city = 20%
Average students = 864 Average students = 788 Average students = 72

Overall average no. of

students/school = 1724

Total No. of Schools = 2,680

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Guesstimate 4
No. of White cars sold in India in a month

Notes & Assumptions:

• Families of 4 in Urban & 5 in Rural
• Average life of cars (in years) is 10
• Growth rate of Car Market = 2%
• 25% of cars are White
Solution:
Total Population India = 1,40,00,00,0000

Above poverty line (70%) = 98,00,00,000

Urban (30%) = 29,40,00,000 Rural (70%) = 68,60,00,000

No. of Families = 7,35,00,000 No. of Families = 13,72,00,000

Income Group: Income Group:

Lower group: 20% Lower group: 40%
Car owners: 50% Car owners: 0%
No. of cars = 73,50,000 No. of cars = 0
Middle Income: 50% Middle Income: 40%
Car owners: 70% Car owners: 20%
No. of cars = 2,57,25,000 No. of cars = 1,09,76,000
Higher Income: 30% Higher Income: 30%
Car owners: 100% Car owners: 70%
No. of Cars owned: 2 No. of cars = 28,81,200
No. of cars = 4,41,00,000

Total Cars in India = 9,10,32,200

Total new cars sold in a year (taking avg. life of car = 10years)
=91,03,220

Growth rate of car market = 2%

Growth rate of car market = 2%

Total cars sold next year = 1,09,23,864

Taking White cars = 25%

Total White cars sold/year = 27,30,966

Assuming equal frequency/month

Total White cars sold/month = 2,27,580

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Guesstimate 5
Number of weddings in India in a year

Notes & assumptions:

• Taking no. of people amongst age group till 35
• Taking sex ratio 1:1
• Assuming 15%, 70% and 10% people get married in the age groups 20-24, 24-29, 29-35
respectively in urban area.
• Assuming 25%, 60% and 10% people get married in the age groups 18-24, 24-29, 29-35
respectively.
• Assuming the probability of getting married in any year is equal
Solution:

Total population in India

= 1,40,00,00,000

Marriage Age
Urban (20-35)
Rural (18-35)

% Population(18-
35 year) = 35%
= 49,00,00,000

Urban population (30%) = Rural population (70%) =

14,70,00,000 34,30,00,000

From sex ratio of 1:1 From sex ratio of 1:1

No. of possible marriages No. of possible marriages
(Urban) = 7,35,00,000 (Rural) = 17,15,00,000

Urban Rural
Age group 20-24 (25%) Age group 18-24 (35%)
Getting Married (15%) Getting Married (25%)
=27,56,250 =1,50,06,250
Age group 24-29 (35%) Age group 24-29 (30%)
Getting Married (70%) Getting Married (60%)
=1,80,07,500 =3,08,70,000
Age group 29-35 (40%) Age group 29-35 (35%)
Getting Married (10%) Getting Married (10%)
=29,40,000 =60,02,500

Total No. of Wedding

=89,42,500

ConQuest – The Consulting and Strategy Club of IIM Shillong

 REFERENCES
Mckinsey
Mckinsey 7S Framework:

Strategy: A coherent set of actions aimed at

gaining a sustainable advantage over
competition

Structure: The organization chart and

accompanying baggage that show who reports
to whom, and how tasks are both divided up and
integrated

Systems: The processes and procedures through

which things get done.

Shared Values: Those ideas of what is right and

desirable (in corporate and/or individual
behaviour) which are typical of the organization and common to most of its members

Style: The way managers collectively behave with respect to use of time, attention, and symbolic
actions

Staff: The people in the organization, considered in terms of corporate demographics, not individual
personalities

Skills: Capabilities possessed by the organization as a whole as distinct from the individual; some
companies perform extraordinary feats with ordinary people

Case 1: Our client is Super Soda. Super Soda is a top-three beverage producer in the United States and
has approached McKinsey for help in designing a product-launch strategy.

As an integrated beverage company, Super Soda leads its own brand design, marketing, and sales
efforts. In addition, the company owns the entire beverage supply chain, including production of
concentrates, bottling and packaging, and distribution to retail outlets. Super Soda has a considerable
number of brands across carbonated and non-carbonated drinks, five large bottling plants throughout
the country, and distribution agreements with most major retailers.

Super Soda is evaluating the launch of a new product, a flavoured sports drink called Electro-Light.
Sports drinks are usually designed to replenish both energy (sugars) and electrolytes (salts) in the body.
However, Electro-Light has been formulated to focus more on the replenishment of electrolytes and has
a reduced sugar content compared to most other sports drinks. The company expects this new beverage
to capitalize on the recent trend away from sugar-rich products.

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Q. What key factors should Super Soda consider in deciding whether or not to launch Electro-Light?

Some of the factors you might discuss with your interviewer could include
Consumers. Who drinks sports drinks? Are there specific market segments to address?

Cost/price. Is the sports drinks market more profitable than those markets for Super
Soda’s current products? Is it possible to profitably sell (at a price set by the market and internal
production costs) Electro-Light? Given the fixed costs involved, what would be the break-even
point for Electro-Light?

Competitors. Which products will Electro-Light compete with? Which companies are key players
and how will they react?

Capabilities and capacity. Are the required marketing and sales capabilities available within Super
Soda? Does the product require specialized production, packaging, or distribution? Is it possible
to accommodate Electro-Light in the current production and distribution facilities? What impact
does geography have on plant selection?

Channels. What is the ideal distribution channel for this product? Are current retail outlets
willing to add Electro-Light to their product catalogue?

Q. After reviewing the key factors Super Soda should consider in deciding whether to launch Electro-
Light, your team wants to understand the beverage market and consumer preferences to gauge the
potential success of Electro-Light.

Your team has gathered the following information on the US sports-drink market. The information
shows an estimate for the share of electrolyte drinks, as well as the current share for the two main
electrolyte products: Cool Sweat and Recover Plus.

Share of US sport-drink market, %

Total Market- 8 Billions Gallons

Electroly Cool sweat

te 20%
drinks, 5

Recover
plus
10%
Energy
drinks,
Other
95
70%

Based on the target price and up-front fixed costs, what share of the electrolyte drink market
would Electro-Light need to capture in order to break even? Here is some additional information for
you to consider as you form your response:

ConQuest – The Consulting and Strategy Club of IIM Shillong

 • Electro-Light would launch in a 16-ounce presentation (one-eighth of a gallon) with a price of
$2 to retailers.
• In order to launch Electro-Light, Super Soda would need to incur $40 million as total fixed
costs, including marketing expenses as well as increased costs across the production and
distribution network.
• The vice president of operations estimates that each bottle would cost $1.90 to produce and
deliver in the newly established process.

Key to answering the question

• Don’t feel rushed into performing calculations. Take your time.

• Remember that calculators are not allowed - you may wish to write out your calculations
on paper during the interviews.
• Talk your interviewer through your steps so that you can demonstrate an organized
approach; the more you talk the easier it will be for your interviewer to help you.

Q. SuperSoda executives believe that the company's position as a top three beverage company gives
them strategic strengths toward achieving the desired market share. However, they ask the team to
outline what would be needed to achieve the target of 12.5 percent share of the electrolyte-drinks
market. What would SuperSoda need to do to gain the required market share for Electro-
Light following its launch?

Some of the ideas you might discuss with your interviewer could include
Match with consumer preferences. Ensure product image, attributes, and quality fulfill the needs of
all consumers or niche segment, reaching desired market share. Ensure target price is consistent with
other products in the market and the consumer’s expectations

Strong branding/marketing. Create a successful introductory marketing campaign, including

advertising, pricing, and bundling promotions. Leverage top-three producer status and limited market
fragmentation in order to position Electro-Light brand within top three in the market segment.
Anticipate response from competitors (for example, advertising, pricing, distribution agreements).
Ensure product positioning does not cannibalize on other, more profitable SuperSoda products. (Note:
in marketing, the decreased demand for an existing product that occurs when its vendor releases a new
or similar product is called “cannibalization.” It is not important for you to use this business
terminology.)

Operational capabilities. Ensure access to preferred distribution channels. Ensure sales-force

capabilities to sell the new product. Ensure production ramp-up that allows response to increased
demand.

Source: Electro-Light | Careers | McKinsey & Company

Case 2: Client is GlobaPharm, a major pharmaceutical company (pharmaco) with $10 billion a year in
revenue. Its corporate headquarters and primary research and development (R&D) centers are in
Germany, with regional sales offices worldwide.

GlobaPharm 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. GlobaPharm is interested in entering a new, rapidly growing

ConQuest – The Consulting and Strategy Club of IIM Shillong

 segment of drugs called “biologicals.” These are often proteins or other large, complex molecules that
can treat conditions not addressable by traditional drugs.

R&D for biologicals is vastly different from small-molecule R&D. To gain these capabilities,
pharmacos have three options: they can build them from scratch, partner with existing start-ups, or
acquire the start-ups. Since its competitors are already several years ahead of GlobaPharm, GlobaPharm
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 $1
billion in total.

Q. What factors should the team consider when evaluating whether GlobaPharm should acquire
BioFuture?

Keys to approaching the problem:

• Take time to organize your thoughts before answering. This tells the interviewer that you
think about the problem in a logical way.
• Develop overall approach before diving into details.
• Be sure to mention a range of potential issues to explore instead of immediately diving
very deep into one issue. Then ask your interviewer if he or she wants to go deeper on any
of them specifically
• Ask for clarification of information if necessary.
• Take notes of the numbers.
• Take time to plan out how to approach the calculation.
• Describe your approach and talk the interviewer through your calculation.
• It is always good to provide a “sanity check” on your numbers and to provide common-
sense commentary and insights on the implication of your calculations.

A good answer would include the following:

• The value of BioFuture’s drug pipeline, number of drugs currently in development, quality of drugs
(likelihood of success), potential revenues and profits
• BioFuture’s R&D capabilities (future drug pipeline), scientific talent, intellectual property (for
example, patents, proprietary processes or know-how for biologicals research), and buildings,
equipment, and other items that allow BioFuture’s R&D to operate.
• BioFuture’s marketing or sales capabilities. Especially how promotional messages will be
delivered, for example, relationships with key opinion leaders that can promote biologicals; key
opinion leaders can come from the academic arena, like prominent medical school professors, or
from the public arena, like heads of regulatory bodies or prominent telejournalists.
• Acquisition price.

A very good answer might also include multiple additional key factors GlobaPharm should consider:

• BioFuture’s existing partnerships or other relationships with pharmacos.

• GlobaPharm’s capability gaps in biologicals, R&D, sales and marketing, etc.
• GlobaPharm’s alternatives to this acquisition. Alternative companies GlobaPharm could acquire.
Other strategies for entering biological segment, for example, entering partnerships rather than
acquiring, and pursuing other strategies than entering the biological segment

ConQuest – The Consulting and Strategy Club of IIM Shillong

 Q. The team wants to explore BioFuture’s current drug pipeline. The team decides to focus first on
evaluating the value of BioFuture’s current drug portfolio. What issues should the team consider when
evaluating the value of BioFuture’s existing drug pipeline?

A good answer would include the following:

• Further cost of R&D until each drug is ready to be sold.

• Potential value of selling each drug.
• Market size, for example, size of patient population, pricing
• Market share, for example, number of competitive drugs in R&D or on the market; different side
effects, convenient dosing schedule (that is, patients are prescribed to take a drug at regular intervals
that are easy to remember such as once a day or every 12 hours)
• Costs to manufacture and sell, for example, marketing, distribution
• Press about these drugs, for instance, have famous doctors called for this kind of drug? Is it only
slightly improving on what is on the market already?

A very good answer would also include the following:

• Risk level
• Likelihood clinical trials of a drug will prove effective
• Likelihood that a drug will win regulatory approval
• Side effects and potential legal exposure, for example, potential law suits due to unexpected side
effects
• Emergence of substitutes: are competitors working on substitutes already? Is it about speed and
does BioFuture have enough researchers working on the respective drugs?
• Strength of underlying patents, that is, how likely is it that a competitor can successfully copy
BioFuture’s drug?

Q. Below is a description of expected probability of success, by stage, in the Pharma R&D pipeline.

Note: “Filing” is the process of submitting all of the clinical and safety evidence from Phase I, II, and
III trials, and asking for regulatory approval to actually sell the drug.

GlobaPharm believes that the likelihood of success of BioFuture’s primary drug candidate can be
improved by investing an additional $150 million in a larger Phase II trial. The hope is that this
investment would raise the success rate in Phase II, meaning that more candidate drugs successfully
make it to Phase III and beyond. By how much would the Phase II success rate need to increase in order
for this investment to break even?

The interviewer would tell you to assume that if the drug is successfully marketed and sold, it would
be worth $1.2 billion (that is, the present value of all future profits from selling the drug is $1.2
billion).

A very good answer would include the following.

Investment would need to increase the probability of success in Phase II from 40 to 80 percent (that is,
increase of 40 percentage points). There are multiple ways to approach this calculation. One method is
shown here:

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 • If a candidate drug passes Phase II, then it has a 50% x 90% = 45% chance of being successfully
marketed and sold. Since a successful candidate drug is worth $1.2 billion, a candidate drug that
passes Phase II is worth 45% x $1.2 billion = $540 million.
• To break even (that is, to make the $150 million investment worthwhile), the value of the candidate
drug that passes Phase II would need to increase to $540 million + $150 million = $690 million.
This means, the probability of combined success in Phase I and II would need to increase by
(150/540) = 28 percentage points.
• So the current probability of Phase I and II, that is, 70% x 40% = 28% would have to increase by
28 percentage points, to 56%. In order to come up to 56%, Phase II probability would have to
increase from 40% to 80% (70% x 80% = 56%).
• This seems like a very big challenge, as an increase by 40 percentage points means that the current
probability of 40% needs to double.

Q. Next, the team explores the potential setup with BioFuture after the acquisition. Although
BioFuture's existing drug pipeline is relatively limited, GlobaPharm is highly interested in its ability to
serve as a biological research “engine” that, when combined with GlobaPharm's existing R&D assets,
will produce many candidate drugs over the next 10 years.

What are your hypotheses on the major risks of integrating the R&D functions of BioFuture and
GlobaPharm?

A very good answer would include the following:

• Scientists do not have overlapping disease (therapeutic area) interests or expertise and are unable
to materially collaborate.
• Integration into the process-driven GlobaPharm culture kills the entrepreneurial culture at
BioFuture that has been key to its success.
• Language barriers severely hinder communication and sharing of information.
• Poor management and sense of community as a result of R&D operations that might come with a
time difference of 9 hours.
• Key scientific talent leaving BioFuture after the acquisition – either because acquisition makes them
independently wealthy or because they don't want to be a part of the new big GlobaPharm
pharmaco.
Source: GlobaPharm | Careers | McKinsey & Company

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 Boston Consulting Group (BCG)

Do: Don’t:

Listen to the interviewer, ask questions, and be Hold back or hide your thought process
yourself.

Structure the problem and develop a framework Rush into analysis without developing an
understanding of the problem

Generate a hypothesis and explore options Defend your solution at all costs. Be open to
creatively listening to interview views on your solution

Synthesize your thoughts and draw conclusions Panic if the answer is not apparent
from analysis.

Think before speaking demonstrate business Circulate cases, use advance knowledge, or stick
judgement to an artificial framework.

Case : Crafting a Distribution Strategy

Your client is the sugar cereal division of Foods Inc., a U.S.-based distributor and manufacturer of
packaged foods.

Establish an understanding of the case:

Q: First, let me make sure I understand the problem. Our client specializes in sugar cereals traditionally
distributed through grocery stores. Sales to Big M Mart, a discount chain, have been growing at 15
percent per year, and the chain has recently become the largest distributor of the client's product
nationwide. We are here to help evaluate the distribution strategy in light of Big M Mart's growth.
Ans. That is correct.

Q: Could you explain to me how grocery stores differ from discount stores?

Ans: Sure. Grocery stores generally specialize in food, as well as selling some household goods and
over-the-counter pharmaceuticals. Discount stores, on the other hand, offer food alongside a wide
variety of merchandise, including clothing, home electronics, and housewares.

Q: Does Big M Mart market its food products differently than do grocery stores?

Ans: Discount stores advertise lower prices for a wide variety of foods, particularly staple,
nonperishable foods.

Q: Could I take a moment to write a few notes to myself?

Ans: Please feel free.

Set up the framework for the Case:

Q: Before making recommendations, I think we would need to evaluate whether sales growth at Big
M Mart is good or bad for Foods, Inc. To do that, I would first look at how its sugar cereal
performance at Big M Mart compares with that in other distribution channels. Second, I would look at
its performance at Big M Mart in relation to competitors' performance. Next, I would determine what
drives customer purchases. Finally, I would want to understand the supply chain.

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 A: That certainly sounds like a reasonable approach. Let's proceed.

Evaluate the Case using the Framework:

Q: First, I would like to get a better sense of where Big M Mart stands in relation to our client's other
distribution channels by examining the client's sales data and margins, by distributor.

A: The marketing department does not have margins by channel, but tracks sales and volume for its
top five distributors.

Q: What does this imply about Big M Mart as a distribution outlet?

A: It looks as if the top distributors have been growing more important, but particularly Big M Mart,
which is growing faster than all the others. This is particularly true when we look at volume, where
Big M Mart's growth is much higher than that of the other four channels.

Q: And how could you interpret what these data says about margins?

A: While the client's sales through other distribution channels are growing faster than volume, Big M
Mart volume and sales growth are the same, so the average price paid by Big M Mart has remained
constant. That implies that sales growth at Big M Mart could have negative implications for our
client's margins.

Next, I would like to look at how our client is doing in relation to the competition within Big M Mart.
Have they been gaining or losing market share?

Q: How might you find that out?

A: I would try to interview Big M Mart's purchasing personnel, since they would probably track those
data for their own purposes.

Q: Why would they want to talk to you? How might you approach such an interview?

A: I would approach the purchasing personnel and suggest that our client and Big M Mart work
together to identify best practices to reduce costs and increase sales of sugar cereals at Big M Mart.

Let's say in a perfect world you could get a breakdown of Big M Mart sales for the four largest
competitors.

Q: What can we infer about our client's competitors within this channel? Who should they be worried
about?

A: It looks like our client is losing market share, as is Tasty Breakfast, while Cereal Co. and Private
Label are gaining share. Private Label, however, looks to be growing from a very small base.

I would like to explore why our client is losing market share to Cereal Co. at Big M Marts. Are their
prices better than those of our client?

Q: After a period of price wars six to seven years ago that lowered industry margins, the cereal

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 companies have refrained from price competition within the same channel.

A: If prices are not driving the difference, I would look at other factors such as brand selection,
percentage of shelf space, product placement, and in-store promotions.

Q: Well, I suspect that children are a large target market for the sugar cereal manufacturers. The lower
shelf placement could be especially important to children who are looking at the different types of
cereals. Are there any other promotions?

A: Visits to Big M Marts indicate that each name-brand company holds 30 percent of the shelf space,
while private label has 10 percent. Cereal Co. brands, however, tend to be placed lower on the shelf
than your client's products.

Q: So, even if all the companies are maintaining product prices, maybe Cereal Co. is strategically
discounting prices to gain market share. It seems as if there is evidence of cooperation between Cereal
Co. and Big M Mart. Do we know anything about their relationship?

A: Some Cereal Co. brands have sales promotion tags, and the team notes that store flyers advertise
specials on Cereal Co. brands for Big M Mart customer cardholders.

Q: During earlier discussions with Big M Mart, you discovered that your client's competitors have 50
sales representatives dedicated to the Big M Mart account. Your client has seven.

A: Cereal Co. appears to be dedicating more resources to its relationship with Big M Mart than our
client is. This may explain its better product placement and promotion programs.

I think I have a good sense of distribution and competition. I would now like to look at the customers
and understand why they select the products they do. One hypothesis I have is that shifting brand
loyalties are hurting our client's market share at Big M Mart.

Q: That's interesting. What do you think might motivate purchases of sugar cereals?

A: There are lots of factors, such as the games in the boxes, the price of the cereal itself, how it tastes.
To better understand consumer behavior, we might conduct market research, possibly through focus
groups, customer observation, and price sensitivity studies.

Q: For the brand-loyal shopper, the priority would be product availability, while product placement
would be important for consumers who like to shop around. Within these groups, are consumers price
sensitive such that one brand can lure shoppers loyal to another brand?

A: BCG teams often do such research. Let's assume your team conducts some analysis. Your research
concludes that most buyers tend to fall into two categories. Approximately 60 percent of buyers go
straight to one cereal and grab it. We can call this group the "brand-loyal" shoppers. Another 40
percent of shoppers look at all the cereals and then select one that interests them. Let's call this group
the "impulse" buyers.

Q: Well, from that information, it appears that price is not a major driver of purchases unless the
preferred cereal is out of stock. In these stock-out situations, you said, brand-loyal customers will
purchase discounted cereals 35 percent of the time. What happens when the customer does not
purchase a discounted cereal?

ConQuest – The Consulting and Strategy Club of IIM Shillong

 A: In general, your research indicates that consumers are not price sensitive and are extremely loyal to
their preferred brand. But when the preferred cereal is unavailable, the brand-loyal customers will
purchase discounted cereals approximately 35 percent of the time.

Q: Interesting. It seems as if product availability could be a major driver of total cereal volume for
Big M Mart. Of course, we would need to know how often stock-outs occur that cause consumers to
walk away without purchasing cereal occur. Since I have a pretty good understanding of customer
motivation, I'd now like to ask a few questions about the client's supply chain. I would want to talk to
our client's distribution personnel to understand the distribution process and to determine how often
stock-outs occur. Can you describe how our client's cereal is distributed at Big M Mart?

A: In approximately 25 percent of cases, the customer walks away without purchasing any cereal at
all. In the remaining 40 percent of cases, the brand-loyal customer will act like an impulse shopper
and select another brand.

Q: Do we have any knowledge about when the individual stores are out of stock?
A: Cereals are distributed from the factory to the distributor's warehouse twice monthly. The retailer
then stocks the shelves itself.

Q: Since we identified product availability as a key success factor earlier on, I would want to make
sure that the stores were stocking the product correctly.

A: No, we do not, since our client only delivers to the warehouses and has no direct access to in-store
inventory information.

Q: Let's say that in your earlier in-store investigations, you found out that Big M Mart stores averaged
15 percent of sugar cereal brands out-of-stock, across all brands.

A: Stock-outs would be a major problem for our client, since 60 percent of customers look for a
specific brand of cereal and 35 percent of them would buy a discounted brand in a stock-out situation.
Big M Mart would also have an incentive to reduce out-of-stock incidents, since 25 percent of the
time, a brand-loyal customer will walk away without buying anything.

Summarize and Make Recommendation:

Q: Big M Mart is our client's leading customer, accounting for more than 20 percent of our client's
sugar cereal revenue. Although sales to Big M Mart are increasing on an absolute basis, our client's
margins there are lower than in its other channels and its competitive position is eroding in that
channel.

At Big M Mart, our client faces competition from both private label and Cereal Co., although the
latter appears to be the greater threat. There appears to be a relationship between Big M Mart and
Cereal Co. as evidenced by their joint promotions, the superior placement of the Cereal Co. product,
and the substantial resources that Cereal Co. has dedicated to the Big M Mart account.

We learned that 60 percent of customers are brand-loyal, implying product availability is most
important. However, 40 percent like to try different kinds of cereal, indicating product placement is
also important. Purchasers do not appear to be price conscious, unless the type of cereal they are
looking for is out of stock, in which case there is a stronger tendency to base purchases on price

ConQuest – The Consulting and Strategy Club of IIM Shillong

 promotions.

In terms of distribution, our client is making deliveries twice a month to Big M Mart's warehouses.
Big M Mart, in turn, is responsible for stocking the shelves. We currently have no direct knowledge of
when our client's items are out of stock at the individual stores, but there is evidence that stock-outs
do occur with some frequency.

A: Well, it sounds as if you understand the situation. What would you recommend the client do?

Q: The sales through Big M Mart appear to have a negative impact on the bottom line, as they have
lower margins than sales through grocery stores. The client could work with grocery stores to ensure
that they are able to compete effectively with Big M Mart in the sugar cereal market. This strategy
could be risky, however, since Big M Mart is a large and important customer. Therefore, I would
recommend that our client work more collaboratively with Big M Mart.

To defend its current position at Big M Mart stores, the client should move toward a partnership with
Big M Mart and dedicate more resources to the relationship. The customer and competitor data
indicate that our client's first priority should be to improve distribution to ensure better product
availability. In addition, it should push for product placement equal to, if not better than, that of its
competitors.

A: Why would Big M Mart be willing to enter into a partnership with Foods Inc?

Q: Foods Inc could offer to share its information about customer behavior to help increase revenues
for both itself and Big M Mart. Stock-outs hurt Big M Mart in two ways. First, some brand-loyal
customers simply walk away without purchasing cereal whenever their preferred brand is unavailable.
Second, we know that other brand-loyal customers purchase lower-priced cereal whenever they
encounter a stock-out of their preferred brand. Both of these instances lower Big M Mart's revenue.

By eliminating stock-outs, Big M Mart could increase its sales by simply ensuring that customers
don't walk away without making a purchase. Converting these purchase occasions to sales would
increase Big M Mart's sales of sugar cereals by more than 2 percent.

Better availability also helps Big M Mart and our client increase their revenue by deterring the brand-
loyal shoppers from trading down to lower-priced cereals. Recall that 35 percent of the brand-loyal
shoppers purchase a discounted cereal if their preferred brand is not available. If improved
distribution now makes the preferred brands more consistently available, the customers will pay a
higher price for these products.

Finally, we could use the information about consumer purchase behavior to help persuade Big M Mart
to share information about product availability in its individual stores. We could work with our client
and Big M Mart to improve the current distribution system to allow for more economical deliveries,
while at the same time ensuring that our client's product is consistently available in the store.

A: Thank you. Those sound-like solid recommendations, but I would suggest that you fully understand
the root cause of the stock-out situations and the cost to eliminate them before moving ahead.

(1) 15 percent out of stock x 60 percent brand-loyal customers x 25 percent willing to forgo purchase
= 2.25 percent
Source: Case Interview Prep | Careers | Boston Consulting Group ([Link])

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 Bain & Company
You’re having lunch with an old friend from university, and she’s looking for some business advice.
She is thinking of opening a coffee shop in Cambridge, England, a large university city an hour and a
half away from London.

She sees potential in this business but wants your help in determining whether opening a coffee shop
is a good idea.

Case Setup:

Start any case by understanding the question you’re asked to solve. Ask your interviewer questions if
you feel confused or need more information. We want you to succeed in your interviews!

Take the time (1-2 minutes) to think about how you would approach the problem. Always structure
your thinking, and communicate your ideas with your interviewer.

Here are some sample questions to ask yourself:

• How big is the opportunity?

• How much does it cost to open a coffee shop?
• What is the shop’s go-to-market strategy?

Analysis:
You show your proposed framework to your friend, and she really likes it! She’s especially interested
in figuring out how big the market is to best estimate how much coffee she can sell. She knows the
market probably includes commuters, visitors, etc., but for now, she wants you to focus on Cambridge
residents alone.

How do you estimate the size of the market?

Two potential approaches come to mind when estimating market size:

1. "Top-down" approach: Start with a large number (e.g. total relevant population) and
progressively narrow down.
2. "Bottom-up" approach: Start with a small number (e.g. average cups of coffee consumed per
day) and progressively scale up.

After you show her the potential options for estimating market size, she wants you to approximate
the market size using your framework. Assume that Cambridge has a population of 100,000 people
and, on average, each drinks 1 cup of coffee per day.

*Note: When making assumptions about market size, there is no “right” or “wrong” answer. Base
your estimations on your reasonable assumptions about the market.

Top Down:

100,000 people live in Cambridge

80% are adult = 80,000
50% of adults are coffee drinkers= 40,000 people
1 cup of coffee per person per day= 40,000 cups per day

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 50% of coffee made and consumed at home = 20,000 cups of coffee per day at coffee shops
350 days per year= 7,000,000 of cups of coffee per year
Total Market size is 7,000,000 cups of coffee per year

Now that you have the market size, your friend wants to gain a better understanding of how much
coffee she would need to sell to break even in her first year.

How much coffee does she need to sell to break even in the first year?

Here is some additional information:

• Price per coffee = $3

• Cost to open shop = $245,610
• Cost to run shop each year = $163,740
• Cost per cup of coffee = $1

Breakeven:

(Price* Quantity)- (Fixed costs + variable costs) = $0

Profit = $0
Revenue- Cost = $0
(3*Q)- (163,740 + 245,610+[1*Q])=0
2Q- 409,350=0
Q= 204,675 cups to breakeven

Recommendations:

Good Answer Better Answer

It is reasonable to start the coffee shop because A better answer would take into account how
there are 7,000,000 cups sold and the break- long it would take for her to recoup the cost to
even point is 204,675 cups, which is ~3% of open the store and other considerations before
proceeding.
the market share, breaking even is achievable.
Breaking even is achievable, but we’d want to
understand more about our friend’s investment
timeline. Depending on how many years she plans
to run the store, it might be difficult to recoup the
cost of opening it.

Other key questions she needs to think about before

proceeding include:

What is CoffeeCo's go-to-market strategy?

How will the organization differentiate itself
among its competitors?
Is there a dominant player that will make it difficult
to win share?
Is the market full of smaller competitors that
CoffeeCo could beat?
Source: Coffee Shop Co. | Bain & Company
Reference:
35 Case Interview Examples: McKinsey, BCG, Bain, Accenture, Deloitte and More |
MConsultingPrep

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