Surviving the case interview

A guide to job hunting in strategy consulting

Reader from 2012 training by Top of Minds Executive Search

By Auke Bijnsdorp, Partner - Amsterdam office
Top of Minds is a candidate centered niche-agency specialized
in strategy consulting and the life after

1 Candidate centered

• Extensive attention to the needs of the candidate

• Objective advice rather than a commercial push towards vacancies

2 Specialized in strategy consulting

• A closed group open only to top-5% academics

• Strong position in the strategy consulting market

3 Focus on added value through training and coaching

• Individual coaching and career counseling

• Training program for consultants-to-be by an ex-strategy consultant
Agenda

General Interviews
10:00 Coffee 15:45 Live interview 1
10:15 Being a consultant 16:00 Discussing interview 1
16:30 Live interview 2
Cases 16:45 Discussing interview 2
10:30 Case: Buffy Bear’s
11:00 Discussion Closing
11:45 The Pyramid Principle 17:00 Q&A
12:00 Working lunch 17:30 Wrap-up

12:45 Case: Shell Express

14:00 Discussion
15:00 Frameworks
Becoming a strategy consultant
You want to be a strategy consultant because you’ll learn the
most, because you can and because it’s the best start ever

1 You’ll learn the most

• You’ll work with ridiculously clever people pushing you to your limits
• You’ll learn a complex abstract trick that works with everything in business

2 Because you can

• As an insecure over-achiever, you want to prove you can

• If you don’t, you’ll always be wondering if you could have

3 It’s the best starting point for virtually every career

• Being a strategy consultant implicates high value

• You’ll have a strong network and good visibility to headhunters
In The Netherlands, strategy consulting firms can be
divided in three categories

1 Generalists (all international)

2 Strategic operations (The Netherlands), examples - non exhaustive

3 Specialists (The Netherlands), examples - non exhaustive

Clients hire strategy consultants because they’re smart, they
work hard and have industry specific expertise

1 They’re smart

• Fact-based approach without political bias

• Methodological strength provides clarity in complex issues

2 They work hard

• Strategic projects often have a tight deadline

• Small teams ensure minimal communication overhead

3 They have industry specific expertise

• Although a junior won’t, the partner has industry specific expertise

• Moreover, strategy consultants are good at drawing parallels between industries
Example positions for ex-strategy consultants, drawn from
portfolio Top of Minds

Client Industry Position

Ahold Retail Lead Intelligence Consultant

AudioNova International Retail Business Development Manager

Anthony Veder Transport & logistics Business Development Manager

ING Financial Services Manager Strategy & Business Change

Coca-Cola Enterprises FMCG Strategic Planner

FrieslandCampina FMCG Customer Marketing Manager

AkzoNobel Chemicals Finance Manager

Jumbo Supermarkten Retail Commercial Controller

GrandVision Retail International Business Controller

Staples Retail Manager Sales Operations

Sanoma Media Online Senior Product Manager Mobile & Tablet

Consultants hire candidates when they’re smart, they work
hard and learn quickly

1 When you’re smart

• Strong academic results are the most reliable indicator of brain power
• You can structure your thoughts and get them across with empathy

2 When you work hard

• You think it’s the coolest thing in life

• You are an insecure over-achiever

3 When you learn quickly

• You can quickly grasp a new industry

• You are willing to follow orders and won’t be a liability
The case interview is the main barrier to entry when becoming
a consultant – but don’t act like it’s a test

His objective Your approach

The consultant wants to know To perform as natural as

how you will perform on a possible, as if you’re not an
project in his team. applicant but a colleague.

He likes: You show:

- brainpower - resourcefulness
- reliability - empathic humor
- independence - self reflection

Above all, he wants to enjoy You’re having fun, because

himself. there’s no reason to fret.
There are two types of cases: business-cases and brain-teasers,
usually mixed together
Business-case
70% of time spent
Three types:
1. Action planning
2. Performance gap
3. External change
Brain-teaser
30% of the time spent, usually
mixed into a business-case
when estimating missing data
Two types:
1. Estimation by analysis
(weight of a Boeing 747 through
breakdown)
2. Estimation by analogy
(number of car batteries sold via cars)
Case 1
Buffy Bear’s
Buffy Bear’s is a chain of 90 restaurants in the Denmark and but
saw profits fall
Key data Buffy Bear’s

• 100% privately owned my Mr. Green, a Danish

millionaire
• Mr. Green wants to sell to retire but profits are
falling, affecting the sales price
• Dishes are meat-oriented, mainly steaks
• Restaurants are located in major cities and next to
high ways
When defining the problem, we use the SCQ model to clarify
the key question
STQ to clarify the key question

Situation Mr. Green owns a chain of 90 restaurants, Buffy Bear’s

Complication Profits have fallen by 20% which affects the potential for
selling off the business

Question Can we restore profits to the level of 2008?

Note: The SCQ model is explained in detail in the book “The Piramid Principle” by Barbara Minto
To identify the cause, we analyse the profit structure

Generic profit structure

market share
decline
volume
revenue decline
market size
decline decline
profit decline price decline
cost increase

This structure helps us to ask the right questions.

It turns out that our market share has declined because people want
more health food.

We also find an increase in costs.

To analyse the costs we use a set of common categories…

Generic cost structure Cost of inputs

Cost of goods
sold (COGS)
Process costs

Communication
costs

Cost of
incentives
Marketing
costs
Distribution
Costs
costs

Other costs

R&D costs

Administrative
costs
Other costs
Cost of capital

Other costs
… and tailor them to the situation at hand, where we find that
the price of meats has gone up
Cost structure Buffy Bear’s
Meats
Cost of goods
sold (COGS)
Vegetables

Advertising
Marketing
Costs
costs
Promotions

Salaries
Other costs
Real estate
Now we can come up with ideas to increase profits and test
them
Ideas for increasing profits

Increase revenue:
• Raise prices
• Diversify the menu with salads to attract new customers
• Extend the menu with typical road snacks, like ice-cream and apple-pie competing
with petrol stations
• Use drive-ins to service quick customers

Decrease costs:
• Offer salads to reduce the effect of rising meat prices
• Offer meat replacements like soj burgers
• Provide free proteine-rich shakes as a starter (instead of desert) to reduce the
hungry feeling of clients
After shooting some ideas, the best one is picked and
developed further
Formulating the hypothesis

Diversifying the menu with salads has a double effect:

1. It attracts new customers
2. It decreases the influence of rising meat prices

The hypothesis giving the answer to the SCQ is now formulated as:

“We can restore profits to the level of 2008 by replacing 20% of our menu with
vegetable–based dishes.”
The interviewer will now ask you to make some quick
calculations

What is the effect on profitability of the introduction of salads?

Steak Salad

Production cost € 8 Production cost € 2

Retail price € 16 Retail price € 14

Number of clients grows from 4.000.000 to 4.500.000 per annum thanks to the more diverse menu
Number of salads in the new sales mix is 20% of all dishes
First you come up with a difficult formula

∆Profit = (∆Revenue - ∆Costs) / Profit[current]

= (4.500.000*(80%*€16+20%*€2)-4.000.000*€16)–
(4.500.000*(80%*8+20%*2)-4.000.000*€8))/(4.000.000*€16-4.000.0000*€8)
First you come up with a difficult formula

∆Profit = (∆Revenue - ∆Costs) / Profit(current)

= (4.500.000*(80%*€16+20%*€2)-4.000.000*€16)–
(4.500.000*(80%*8+20%*2)-4.000.000*€8))/(4.000.000*€16-4.000.0000*€8)

And you start to sweat

and panic!
So you try it with percentages

What is the effect on profitability of the introduction of salads?

Steak Salad

+50% gross
profit in
Production cost € 8 Production cost € 2
Retail price € 16 20% of dishes is Retail price € 14
Gross profit € 8 Gross profit € 12

10% up in total
gross profit
Number of clients grows from 4.000.000 to 4.500.000 per annum +12.5% more clients
Number of salads in the new sales mix is 20% of dishes
Leading to the conclusion:
Yes, introducing salads will restore the profit level of 2008
Cost/profit mix before and after introduction salads

Price build-up
Price build-up
Gross
+10% profit
Gross
Cost
profit
Cost

+12.5% customers

110% * 112.5% = 123,75% is more than the profit level 2008 in of 120%
(not 110% + 112.5% = 122.5%, although you could use that as an preliminary estimate,
as long as you show that you understand the difference)
But of course you forgot all about the fixed costs

Cost structure Buffy Bear’s

Meats
Cost of goods
sold (COGS)
Vegetables

Advertising
Marketing
Costs
costs
Promotions

Salaries
Other costs
Real estate
But of course you forgot all about the fixed costs

Cost structure Buffy Bear’s

Meats
Cost of goods
sold (COGS)
Vegetables Luckily, the interviewer has run out of
time so he helps you out:
Advertising “The new number of clients matches the
Marketing
Costs
costs old one in 2008, and no staff
Promotions
was fired. So the fixed costs remain the
same.”
Salaries
Other costs
Real estate
Structuring your storyline:
The Piramid Principle
 The Piramid Principle tells you to work top-down and structure
your argument
Illustration of issue tree

Situation
Complication
Question

Answer

because because
of X of Y

because because because

of X1 of X2 of Y1

Source: The Piramid Principle by Barbara Minto

 The SCQ framework helps you understand the question and
scope the assignment
The SCQ model

Situation What are we talking about?

Complication Why are we talking about it?

Question Which question follows from the above?

Answer The hypothesis you’ll be working with (optional)

Source: The Piramid Principle by Barbara Minto

You divide the key question in an issue tree, building an
inductive argument
Illustration of issue tree

Question

Issue X Issue Y

Issue X1 Issue X2 Issue Y2

X and Y have to be MECE

Mutually Exclusive and Collectively Exhaustive
Intermezzo: MECE brings us to SEAL

SEAL is a test for any list of issues

Any list of issues should not only be MECE, but also SEAL
– Similar: same sort of issues
– Exhaustive: all issues are covered (like in MECE)
– Apt: relevant to the topic
– Linear: same level of abstraction or magnitude

Example of correct list Example of incorrect list

• Cars • Cars
• Bikes • Transportation
• Trains • Public
• Plains • Speed
The basic performance gap model is an example of a MECE
issue tree
Issue tree Buffy Bear’s

Why are
profits down
by 20%

Revenues Costs
declined? increased?

Volume Price COGS Marketing cost Other cost

declined? declined? increased? increased? increasde?

Market share Market size

declined? declined?
But MECE issue trees can be build for anything

Issue tree Geert Wilders

Why is Geert
Wilders gaining
influence?

Is there another
Do people like Do people not like
reason to vote for
him? the alternative?
GW?

Do people not like Do people not like Is a vote for GW a

Do people Do people like his
the alternative the alternative protest vote as
support his ideas? presentation?
ideas? presentation? such?
 Issue trees are based on inductive reasoning

Illustration inductive reasoning

Poland is about
to be invaded
by tanks

French tanks German tanks Russian tanks

are at the are at the are at the
Polish border Polish border Polish border

Source: The Piramid Principle by Barbara Minto

When you make slides to convey your thoughts, use the
consulting style
Slide format for final round case presentations

Wrong style Consulting style

Effects of crisis
• More unemployment
• Less vacancies available
• 50.000 less vacancies compared to 2008
• Currently 152.000 open vacancies
The economic crisis has led to a 25% decline in open
vacancies in only three months time
Open vacancies in Dutch labour market
-25%
202.000
152.000

Source: CPB Q4 2008 Q1 2009

1. Key message as action title

2. Graphs preferred over text
3. Subtitle describes content
4. Name your source
Frameworks:
When and which
When: novice consultants and candidates usually overestimate
the value of frameworks, only use it when you can
An argument you shouldn’t overestimate the value of frameworks

Do not overestimate
the value of
frameworks

Logical reasoning is
Using frameworks is Frameworks are not
more important than
not easy always necessary
using frameworks

Mapping frameworks
There are many A framework itself The primary goal of A framework itself is
to cases is not easy
frameworks, and an doesn’t hold the frameworks is to not intelligent. You
and requires a lot of
engineer will know answer. You do structure you are
experience
less than an MBA. presentation. You
[Yet, more engineers might not get to this
are hired than MBAs]
Which: mapping frameworks comes from training, but a
guideline can help you get started
A generic guideline for mapping frameworks to cases [never exhaustive]

Type of case Examples Relevant frameworks

Industry analysis Start an internet provider in Africa? Porter’s five forces

Competitive power of product/service De Volkskrant looses subscribers Four Cs: customers, competition, cost,
capabilities
Power of product/service, less focus on Profile sells les tires with winter profile Four Ps: product, place, price, promotion
competition
Performance gap analysis McDonalds’ profits are falling • Revenue/cost analysis
• Value chain analysis
Process cases Transform KPN from a infrastructure to a GSTIC: Goal-Strategy-Tactics-
services provider Implementation-Control
Exhaustiveness test Interviewers frequently test if you can • Being there
think of more issues. And more. • Inverse
• Abstract association
Portfolio analysis What products or services should be • Four Cs or Ps
(dis)continued? • BCG matrix (use this only at BCG)

Public policy issues Should we IPO Schiphol? Stakeholder analysis

M&A cases Should a acquire company X? Does it • SWOT analysis
have a promising future? • Value driver analysis
• BCG matrix
A lot of mistakes are made with using the word profit

Definitions of profit related terminology

• Sales revenue (net turnover) = price (of product) * quantity sold

Bruto omzet = prijs (van product) * hoeveelheid verkocht

• Gross profit (gross margin) = sales revenue – cost of sales

Brutowinst = bruto omzet – verkoopkosten

• Operating profit (EBITDA) (net margin) = gross profit – overheads and direct costs
Operationale winst = brutowinst – overhead en directe kosten

• Net profit = operating profit – depreciation – amortization – interest

Nettowinst = operationale winst – afschrijvingen - rente

• Profit after tax = net profit – tax

Winst na belasting = nettowinst - belasting
Case 2
Shell Express
Shell considers increasing the number of unmanned petrol
stations
Case assignment: Shell Express - 2009

You’re at a seated benefit dinner for WarChild. Your heart misses a beat when you find out
Jeroen van der Veer is sitting next to you! Your consulting firm has been trying for ages to
get a project with Shell, so this is your chance.

He tells you that one of his worries in the current handover to his successor Peter Voser is
losing market share in the retail activities. The economic crisis has put extra pressure on
prices and unmanned petrol stations of competitors are eating at Shell’s market share.

Shell has some 60 unmanned petrol stations itself, introduced as

an experiment some years ago, branded ‘Shell Express’.

This is now 10% of the total base of 600 petrol stations, and Shell
is wondering whether they should convert all of the remaining
stations to the unmanned variant as well so lower prices can be
offered.
Let’s get this straight: you’re asking me if converting to
unmanned will restore your profit level to last year’s, right?
STQ to clarify the key question

Situation 10% of Shell’s retail outlets are unmanned ‘Shell Express’,

all in urban locations

Triggered by the economic crisis, Shell has lost 2% of it’s

Complication retail market share in urban locations in the last twelve
months, resulting in a decrease of 4% of total profits

Question Can we restore the profit level (i.e. +4%) by converting

more petrol stations to the Shell Express formula?
Since this is a ‘product versus competitors’ case, we can use
either the four Cs for an initial analysis
Four Cs mapped to the Shell Express case
Customers
(segmentation, purchase criteria)
1. Shell Express attracts price aware consumers. This
excludes employees with a company car.
2. Because of the recession, the segment of price-aware
customers has grown rapidly.
3. The Express formula should be limited to urban areas,
since high way customers choose their petrol station out
of geographical motivation and have a stronger need for
shopping.
Cost
(production costs, economies of scale, experience)
1. Unmanned petrol stations have a lower running costs,
creating the opportunity to lower prices.
2. In retail, economies of scale are always leading in profit
issues, since most costs are fixed so all extra turn-over
strongly contributes to the profitability.
3. Removing shops from petrol station reduces not only
costs, but also turn-over.
We have to calculate the net effect.
Competition
(market share, position, USPs)
1. Competition is two-fold, both big chains with their own
express formula and local independents.
2. The market share of unmanned stations is expected to
keep growing, as clients increasingly accept it.
3. Shell has a more premium brand than others.
Capabilities
(product-company fit, resources)
1. Shell’s premium brand doesn’t have be an obstacle.
There are successful examples in other industries: KLM’s
take-off fares, KPN’s Hi, take-out food
2. The conversion to unmanned requires no significant
changes to the company’s structure, and lay-offs can be
gradual.
3. There is already experience with 60 stations, making a
swift conversion operation feasible.
After the initial analysis we can create a very sharp and focused
issue tree
Issue tree Shell Express case

By converting to
Express formula, Shell
can restore profits

Lower costs enable Profits increase by

discounts, attracting cutting shops, churn is
more customers minimal

Profits actually increase The number of clients

The discount of x cents
Discount to be offered because most shops preferring a shop that
is enough to regain the
is x cents have a negative net will turn to a
lost 2% market share
effect on profit competitor is minimal

Shops in isolated areas

Only shops in urban
with no store-
areas are closed, not
competition are
the ones on high ways
maintained (20%)
Key assumption is that most shops have a negative net
contribution to profit
Estimation of net effect on profits of losing the shop
Key effects Neglected effects
x • The costs involved in installing automatic
terminals (-)
• The savings of running costs on shops
(electricity, cleaning) (+)
x-y
• The savings of no more stock in the stores (+)
y

Saving by no Benefit Loss by no

more staff more sales
in shop
To make the necessary calculations we have to make some
assumptions, or the data is provided by the interviewer
Assumed or given data for calculation

Assumptions
• 80% of shops have the ‘average format’: 4 outlets for cars + 1 for motor cycles
• petrol station is open from 8:00 to 22:00, manned continuously by two employees in two shifts
• Two peaks of two hours during rush hour, operating at 80% capacity. Rest of the day at 40% capacity.
Average duration of visit is 5 minutes
• Average non-petrol purchase per customer in shop is € 2 with a 50% margin
(cigarettes are excluded because of extremely low margin)
• 20% of clients are non-petrol clients and only shop in store

Lay-out petrol outlets Utilization of capacity during the day

80% 80%
car 1

car 2
40% 40% 40% 40% 40%
car 3

car 4

8-10 10-12 12-14 14-16 16-18 18-20 20-22 hrs

bike
First we calculate the margin decrease that comes from no
more non-petrol sales
Calculating margin decrease

Margin decrease = number of shopping clients per day * average spent * margin * 365 days
= 1.2 * (22-8 hrs) * 5 *(80%*2 + 40% * 5)/7 * 60/5 *€2 * 50% * 365 days
= 1.2 * 14 * 5 *± 50% * 12 *€2 * ± 180
= 1.2 * 14 * 30 *€2 * 180
= 1.2 * 14 * 60 * 180
= 1.2 * 840 * 180
= 1.2 * 1.680 * 90 ≈ 1.2 * 1.500 * 100
= 1.2 * € 150.000
= € 180.000 per annum (€ 189.216 exact, 5% off)
Then we calculate the savings of having no more staff

Calculating savings of no more staff

• Open from 8:00 – 22:00 = 14 hours

• 2 shifts of 7 hours = 4 man per day
• People work 2/3 of the year, meaning we actually need to employ 6
• Average salary = minimum wage + 30% = € 1.500 per month1 + 30% ≈ € 2.000 per month
• 22:00 – 18:00 = 4 hours out of 14 = 2/7 are after six so pay +50%
• 1/7 of hours is on Saturdays paying +50%
• 1/7 of hours is on Sundays paying +100%
• Average salary corrected for overtime = 100% * 1/7*150% + 1/7*50% + 1/7* 100% = 100% + 4/7 * 50% =
100% * 200%/7 ≈ 130%
• Additional costs for pensions, health insurance and other benefits +50%
• Total corrected salary = 180% * 12 months per year * € 2.000 per month
= 180% * € 24.000
= 90% * € 48.000 = € 43.000 per annum

6 staff members costing each € 43.000 per annum = € 258.000 per annum

1] Holiday allowance already discounted

The saving of 78.000 euro per annum means a discount of 1
cents per liter, which is not enough. So the answer is NO.
Conversion to unmanned saves 108.000 euro per annum per petrol station
Unmanned is € 78.000 per annum cheaper Which means a discount of 1 cent per liter
€ 258.000
• Number of clients per day = 14 * 30 = 420
• 78.000 euro per annum = 78.000/ 360
€ 78.000 ≈ € 210 per day
€ 180.000 • 210/420 = 50 cents per customer
• 50 liter per visit
• 1 cent per tank discount

It’s unlikely that a discount of 1 cent per liter is

enough to attract significantly more customers.

So converting to unmanned stations will not

restore the profits to the level of last year’s.
Saving Benefit Loss
Interviews
Prepare yourself for questions on five important competences

The five most important competences The STAR framework for formulating
(specifically for a junior consultant) examples

Problem solving
• Describe the situation
Situation

• Explain the task at hand and goal you

Drive Impact pursued
Task

• Briefly summarize what you did, on an

abstract level. Explain when the ‘how’
Action question is asked.

• Describe the result and more specifically,

Communication Teamwork how you contributed to the result
Result
Classic brainteaser are not often used, but it never hurts to
know some answers
Some classic brainteasers

• What is the prime number closest to 100?

• You fly with a rocket to the moon at twice the speed of light. What do you see when you get
out (neglecting the time that it costs to do so) and look back?
• Two switches connect to two lamps in an other room. The door is closed. Both lamps are out.
You can flip a switch twice. Which switch is connect to which light?
• Why are manhole covers round?
• A bat and a ball cost € 1.10 in total. The bat costs € 1 more than the ball. How much for a
ball?
• You’re in a boat on a lake and you throw a big rock overboard. Does the water level of the
lake rise or fall?
Codes of conduct

Do’s and don’ts at a job interview in consulting

Do’s Don’ts
Arrive 5 minutes before Don’t arrive 30 minutes in advance

Bring squared paper Don’t overvalue your uniqueness or

authenticity

Wear a watch Don’t repeat the interviewer’s name

Strong handshake with a wiped dry hand Don’t smoke just before interview

Make (eye) contact Don’t mirror seating behavior

Prepare three questions for the end, ask one Don’t use stupid phrases like
‘een stukje’ or ‘je ding doen’

Create a conversation instead of just

answering questions, by embedding ‘why’ Don’t ask what’s there on the website
moments in your answers
Dressing correctly will stress that you fit in
Consultant dress-code for men
Incorrect
• Brown suit
• 3 pieces
• Button-down shirt
• Narrow angle collar on
shirt
• No collar stiffeners
• Yellow shirt
• Signal red tie
• Top button not closed
Correct
• Dark (but not black) suit
• Minimal pattern
• No belt or modest belt
• Shirt without stripes
• Tie with non-obtrusive or
no pattern
• No tucks in trousers
• Smooth black shoes with
laces
• Normal buttons, no
cufflinks
Wrong in this picture:
• Tie is one inch to short,
should tip the trousers
• Facial hair!
Women have more room for creativity, but here is a suggestion
Consultant dress-code for women
Incorrect
• Shirt with high closed neck
looks defensive
• What’s this tie-like thing
around her neck?
• Suit is black
• Suit is too long
• Too heavy make up on eyes
• Hair is not professional
Correct
• Dark blue suit
• White or light blue shirt
• Enough room for a hint of
décolleté, but only a hint
• Light make up on eyes and
lips
• Shirt sleeves are longer
than suit sleeves
• No earrings or bracelets
Wrap-up
A case-buddy is by far the most effective preparation
Contact us if you want personal advice on your consulting
career or the life after

Top of Minds Executive Search Your contact:

Prins Hendriklaan 56 Auke Bijnsdorp, Partner
1075 BE Amsterdam T +31 20 7600 776
www.topofminds.com aukebijnsdorp@topofminds.com