“This

book will help you develop the behaviours and the way of looking the
World that make you a Consultant and get a job in a Consulting Firm”
Luiz Zorzella, McKinsey & Company Alumni (Canada)

“Josemaria is very useful because he is focusing on behaviours rather than
frameworks”
Sergi Pereira, Deloitte Consulting Consultant (Spain)

“Josemaria was extremely helpful, I went from an engineer background to
securing an offer with Booz & Company. Highly recommended"
Eho Kim, Booz & Company Alumni (Korea)

“He helped me a lot to improve case interview skills”
Seila Osman, Accenture (Slovak Republic)

“He knows very well how to deal with the case interview process”
Marcel Amorós, MIT University Visiting Student (Boston)

“I really improved with Josemaria because he tells you what to do during case
interviews, but also why you should do it. Knowing how and why Consulting
Firms works, it makes you a better consultant and it is easier to show your
consulting strengths”
William Violet, London Business School Student (France)

“He really understands in detail the case interview and give you specific
suggestions”
Nishant Dobhal, IESE Business School Student (India)

“Their suggestions and recommendations are great”
Sameer Duggal, IE Business School (Denmark)

"Josemaria's help was extremely useful”
Mohan Anem, London Business School Student (London)

“He understands deeply the consulting industry and how the recruitment
process goes. He was a insightful help”
Chase Parker, Stanford University V. Student (California)




 PRIVACY POLICY

This book and the information contained here are for informative purpose only.
The information in this book is distributed on without any warranty. The author
makes no legal claims, express or implied, and the material doesn’t mean to
substitute any legal or financial counsel.
The author, publisher and/or copyright holder assume no responsibility for the
loss or damage cause or allegedly cause, directly or indirectly, by the use of
information contained in this book. The author and publisher specifically disclaim
any incurred liability from the use or application of this book content.
All rights reserved. Any part of this book may be reproduce or transmitted in any
form by any means, including electronic, mechanical, photocopy, recording, or
otherwise, without the prior written permission of the publisher.
Throughout this book, trademarks names are referenced. Rather than using a
trademark symbol with every occurrence of a trademarked name, we state that we
are using the names in an editorial function only and to the benefit to its trademark
owner, with no intention of infringement of the trademark.
The mentioned cases are from my own and they are not doing reference to any
existing company.

2013 Josemaria Siota ©
All rights reserved.














The opinions expressed in this manuscript are solely the opinions of the author and do not represent the
opinions or thoughts of the publisher. The author has represented and warranted full ownership and/or legal
right to publish all the materials in this book.

Case Interview for Engineers
A Former Deloitte, Interviewer & Engineer Reveals How to Get Multiple Job Offers in Consulting All Rights
Reserved.
Copyright © 2014 Josemaria Siota
v1.0

This book may not be reproduced, transmitted, or stored in whole or in part by any means, including graphic,
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 ACKNOWLEDGEMENTS

“Alone we can do so little; together we can do so much” said Helen Keller years
ago.
Long-time, hard work and some difficulties since the beginning of writing this
book. In contrast of these adversities, there were during that time, a couple of
great people and amazing professionals who helped me with his example, support
and vision to achieve this goal. With that TOGETHER, we achieved that SO
MUCH.
There is a quote from Phil Collins that says: “In learning you will teach, and in
teaching you will learn.” I have to confess and thanks how much I have learnt
from each of my students and how they empowered me to write this book.
I would want to include all the people who contributed and even all my students,
but it would be too long. For that reason I have chosen a summary of these
professional who I really respect the most:

Juan Almeida Miguel Ángel Ariño

Miguel Antón Edu Arce
Jaume Armengou Cristina Aznar
Marc Badía Javier Bernuy
Josep Borràs Pere Clavero
Farouk Dey Marc Escapa
Mariluz Espinosa Luis Florit
Héctor Fornes María Francisca
Carlos Gómez Álvaro Hergueta
Raul Hernández Veda Jeffries
Junichi Kagaya María Luisa de la Peña
Jose Mª García Solé J-P Martins
 Heiko Mossetter Edu Mundet
Javier Muñoz Susana Ortiz
Jaime Oliver Iván Palencia
Michael Polt Eduardo Portu
Ricard Puiggari André Rodrigues
Guillem Rojo Pau Torné
Jordi Suñer Cristina Tomás
Daniel Sabido Ricard Vila
Fernando Villar

“Coming together is a beginning, Keeping together is progress, Working together
is success” said Henry Ford. I hope to keep in touch with all of them because they
are who can really learn from, in whom you can really trust.
Finally, my especial gratitude to my family who always is there, supporting and
encouraging me.

Sincerely thanks,
Josemaria
SECTION ONE: INTRODUCTION
 FOREWORD

This book will make you lose weight, invest better and land a job in a great
consulting firm.
“Wait – what? What are you talking about?” – you ask.
And I reply: Yes, this book can actually do that. It can, because consultants solve
problems. That’s the only common denominator that defines the profession. And
this is what a job interview in a consulting firm is about: to assess how you solve
problems.
You probably know that, at some point in the conversation, the interviewer will
turn to you and say something like “My costs are is too high”, “We are not growing
fast enough”, “How can I sell laptops in Russia?” and will stop to observe what
you do.
However, the assessment of your problem solving starts much before that. It starts
when you open your resume and tell him why you chose your school or how you
dealt with your first job. How do you apply the theory?
And this is what this book is about. This book will guide you and help you
develop the behaviours and the way of looking at the World that make a consultant
a consultant.
It will also provide you with the keys you will need during the typical interview
process as well as some insight about the life and work inside a consulting firm
for context.
I am a consultant. I spent 6 year with McKinsey & Company, 4 years with
JPMorgan Chase & Co and launched my own practice in 2010, where I advise
companies on how to accelerate growth and enter new businesses and markets. I
have worked with other consultants from different firms (Bain, BCG, Booz,
Deloitte, etc.) and with clients in different sectors.
I have decided to focus on growth because it is an area that I find exciting and
rewarding. But, the principles of problem solving – the principles you will learn
in this book – are as useful in getting you a job in a consulting firm, as in helping
you advise a CEO on how to sell laptops in Russia, lose weight or become a
better investor.
Good reading.


LUIZ ZORZELLA
McKinsey & Company Alumni
Amquant Principal
 INTRODUCTION

During five years, I was studying, studying and studying Engineering. In the 2nd
year, one of my professors’ quotes that stuck with me was:
“As engineers, you are not only here to study. You are here to understand
how to solve difficult problems and get things done. And if you don’t know
something, find it.”
I have to confess, the first impression was to think that he didn’t know what he
was saying. Years later, I realized how right he was.
Near the 4th year in an Engineering University, I decided that my future it will be
in business, but related with Engineering. Then, I heard something about
Consulting. I knew that this change would be hard, because:
- I never had done anything about business.
- The online public information related to enter in Consulting Firms was
almost zero and charged.
- I didn’t have connections with business backgrounds or enough prepared to
train the application processes (like case interviews)
But I also knew with time and effort, almost everything is possible.
I had to work a lot, but finally I got offers from multiple Top Consulting Firms,
[1]
finally choosing Deloitte , for personal reasons. That time in the Big4 was
amazing: challenged projects and impressive co-workers.
After that, I developed some Start-ups and Consulting Firms. Meanwhile, I
continued increasing my formation from some Business Schools.
During one of those courses, I met an engineer, who was really interested to enter
in Consulting. So knowing the difficulties I had in past, I helped him with the
preparation to enter.
On one hand, he proposed me to help more people to enter in these big Firms. On
the other hand, I really think when one helps others you always feel good. So I
said: “Let’s go!”
I decided to really improve my preparation: selecting the best online information,
researching how the top Business Schools prepare their students for Consulting
Application Processes and interviewing more than 115 inside-consultants
(including Human Resources consultants) from McKinsey & Company, The
Boston Consulting Group, Bain & Company, Deloitte, Accenture, etc.
By the time this book is published, I‘ve already coached more than 2800 students
and prepared hundreds of candidates coming from top Universities as London
Business School, Stanford University, MIT University, IESE Business School, IE
Business School, INSEAD Business School, Engineering Schools and others.
So reader, I have good and bad news for you. The bad news: you are trying to
prepare one of the most difficult processes/examinations nowadays to get a job:
the case interview -on average for more than 100 candidates, finally only one get
the final offer-.
The good news: now you know it, you are trying to work hard, you are searching
for the best material to be as best prepared as possible and I will put all my effort
to help you as much as I can.
Therefore, along this book we are going to see the methodology resulted from all
this extensive and deep research; you will go from knowing nothing about
Consulting, to be prepared and dominate case interviews.

WHAT IS INCLUDED AND WHAT NOT?

In this book I will explain you my secrets to succeed before, during and after a
case interview.
The three key new untold aspects are:
(1) It includes an already tested, simplified learning methodology, focused
on skills rather than frameworks. It means that I am going to share my
secret methodology that gave me the success. It was double checked by a
research with 115 inside-consultants, in addition to an increasing number
of candidates who have already got offers.
(2) It introduces a new way to do the most important aspect of the
preparation: training. This is done explaining how your colleagues must
give you feedback when you train with them and how you can train in
your daily life. It means that it will improve the speed of your learning
 curve and it will save you time, especially for those with no time.
(3) It is focused on candidates with engineer backgrounds. It means that is
not needed a business background to use this book and it includes
specific recommendations for those coming from engineering.
Moreover, it includes other aspects like: how to network specifically with those
firms, three real cases done by candidates recently in those firms, specific
recommendations for different interview channel types as videoconference, a
complete planning to know what to do and when, how to improve your market-
sizings, etc.
In this book I will not cover how to improve your CV or Cover Letter.

BOOK WRITING NOTATION

· Currencies: are indicated on the right-side.
· Decimals: are indicated with a comma “ , “.
· Thousands: are indicated with a dot “.”.
· K, M: thousand, million.

· Example: 1.000.000,89 $
A million dollars and 89 cents.
 SECTION TWO: CASE INTERVIEW

 OVERVIEW: SKILLS SCHEMA

Case Interview is the evaluation methodology, applied by some Consulting Firms,

to judge applicants that are interested in be hired by those Firms. They are a kind
of trial of everyday consultants’ life: get involved in very ambiguous business
problems without clear paths and solving them.
Each case is different, it can demand different needs and doesn’t even have a
unique solution, but there is a “common denominator”: it is the case resolution
structure.

WHAT IS THE CASE RESOLUTION STRUCTURE?

To solve almost every case you cross through 4 steps:
1. Understand the proposed Problem
2. Split it and Structure your Analysis
3. Analyze it by segments (quantitative and qualitative)
4. Give a Conclusion/Recommendation
For each step, consultants use some skills or apply some techniques. So we only
have to learn which and how they use those, in order to acquire and apply them.
This table indicates the relation within steps, the content included in each one and
the related needs to afford them. All of them are explained in next chapters.

CASE RESOLUTION SKILLS
Step Case structure Content Skills/Techniques
- Listen
- Understand the - Social: ask
Understand problem & ask for - Understand charts
1
Problem clarifications - Synthesis
- Summarize the - Insight
Problem
- Split the problem in - MECE Principle
parts - Scientific Method
2 Split & Structure - Structure the analysis - Issue-Tree
 with: hypothesis and - Frameworks
assumptions - Insight
- 80/20
- Search Trends
- Where-Why-Solution
- Prioritized and
3 Analyze & Data - Top-Down Reading
structured analysis
- Market sizing
Numbers operations
- Insight
- Idea generation
- Case Synthesis
4 Conclusion - Recommendation
- Argumentation
- Insight
www.CaseInterviewer.com

WHY THIS STRUCTURE/SKILLS?

Case interview skills or needs can be classified in many ways. And even for the
current classification, we can increase the numbers of skills/techniques for each
step.
However, we are going to focus in the proposed before because: on one hand, this
structure is more oriented to skills; and on the other hand, the skills selected are
the key ones needed.
 STEP 1: UNDERSTAND PROBLEM

At the beginning, the interviewer is going to explain to you a business problem, a

situation. The first step is to understand it.
Doing it, you must: listen, ask for clarifications, understand charts and make a
problem synthesis -as a verification-.

HOW?
Asking for clarifications
It is important to ask for clarifications to avoid solving a different problem from
the asked one, and it will be less permitted to ask open questions late in the case
interview process.
Understand Charts
Probably, you are going to watch a couple of charts and graphs. They could be
[2]
from different types: histogram, bar chart, pie chart, line chart, etc.
DAILY LIFE: a trick to practise this skill is to get subscribed to the
[3] [4] [5]
newsletter/RSS of one of the Firms (McKinsey , BCG ...) each
monthly delivery is plenty of charts –and by the way, you will
improve your knowledge about the Firm. Another source is to read
[6]
the statistics at The Wall Street Journal .
Synthesis
After listening the problem, I recommend you to summarize it in other words, to
check that you have understood it, and to show it to the interviewer.
Also, if is possible, add a little insight to evince you value added. It doesn’t need
to be a deep one. For example:
· Interviewer: 230 over 920 students are buying tickets...
· Candidate: 25% of the students are buying tickets...

DAILY LIFE: to practise your problem synthesis; every time someone
explains to you a problem, try to summarize it.

SUMMARY
· Ask for clarifications: as soon as possible.
· Synthesis: include an insight.
 STEP 2: SPLIT & STRUCTURE: Principles

Consultants’ daily-life is commonly confronted with extremely complex problems

to solve.
However these big Firms don’t want consultants with “bright solutions”. I mean,
the first idea that comes to your mind –even if it is a great one-. Because they
don’t want employees who sometimes solve problems, they want people who
always can solve problems in a structured and logic way.
Therefore, we must find a path to solve extremely difficult problems. For that
reason, the trick is to segment it and structure it in little ones, that are easier and
you can solve them. As Napoleon said: “Divide and conquer” (divide ut
[7]
regnes ).
In order to divide the problem, you have to keep in mind: the MECE Principle, the
Scientific Method and the Issue-Tree.

HOW?
MECE Principle
This principle, used by Management Consulting, means “Mutually Exclusive and
[8]
Collectively Exhaustive” . It is a grouping principle for separating a set of
items into subsets, the choice of subsets should be:
· Mutually exclusive: no subsets should represent any other subsets (“no
overlaps")
· Collectively exhaustive: the set of all subsets are taken together, should
fully encompass the larger set of all items ("no gaps").
The MECE principle is useful to map process or create structures where the
optimum arrangement of information is exhaustive and does not double count at
[9]
any level of the hierarchy .
Examples of MECE arrangements include: categorizing people by age (assuming
all years are known). A non-MECE example would be categorization by
nationality, because nationalities are neither mutually exclusive (some people may
have dual nationality) nor collectively exhaustive (some people may have none).
DAILY LIFE: you can train on it, for example, when you are
classifying your computer files in folders.

Scientific Method (The Hypothesis)
The Scientific Method is a body of techniques for researching phenomena and
acquiring new knowledge. This method includes: a hypothesis, assumptions,
experimentation and conclusion.
[10]
The HYPOTHESIS is a proposed explanation for a phenomenon . To be
verified, there are some ASSUMPTIONS that should be true. To test those
assumptions we do some EXPERIMENTS, finally to approach into a
CONCLUSION.
For example, I think that you are good at basketball (HYPOTHESIS). In order to
confirm that, I must know if you are good: passing the ball, bouncing the ball and
shooting baskets (ASSUMPTIONS). For that reason, I am going to watch you
playing basketball matches, during a month, keeping attention on those 3
assumptions (EXPERIMENTS). If these 3 assumptions are true, and those are the
only 3 assumptions I needed to test; “you are good at basketball player”, then we
can affirm it (CONCLUSION).
This Method can be used in science, but also in other aspects, such as Consulting.
For example, I think the net profit of the company A is decreasing, because of a
reduction in revenues (HYPOTHESIS). To affirm it I must check if the revenues
are decreasing and the costs are maintained flat (ASSUMPTIONS). To test it, in a
real project, I will interview the client (in your case, ask the information to the
interviewer) (EXPERIMENTS). Finally, if I verified both assumptions are true,
then the decline in the net profit is caused by the revenues reduction
(CONCLUSION)
Now, you can think that there are more ways to solve problems. CEOs like
Richard Branson or Steve Jobs were leaders who went ahead focused more on
intuition, and they did it really good. However, in Consulting is needed to follow
this approach to avoid the two extremes: too much and too little analysis.
First, too much. Many times you have the possibility to analyze all the data that the
company owns, look for statistics and get hundred of insights. However, we are
consultants that are paid for services done and for hours worked. So we must
focus on what the client is asking for, and solve it accurately and efficiently. So it
won’t be a good practise in the real life, to analyse things that are not logically
related with the problem (in consequence, also during the interview).
For example, if we are trying to increase the sales of the company, it is not logical
to start the case asking for its insurance corporate expenses or the accounting
software we are using in one of their offices.
Second, too little; because is not client-oriented. Strategy Firms are not working
only to do some analysis; they are working to solve problems and give
recommendations to the clients that must be implemented.
For that reason, our client must understand and have to be really convinced that
our recommendation is the best one. To achieve it, we need to give them a logical
and structured argumentation with solid reasons. To get that reasons, we need to
analyze and test the assumptions of our hypothesis verification to get the
conclusion. Finally, converting this process in a final recommendation justified by
quantitative and qualitative reasons.
For example, in a project’s final presentation (at the end of a case interview), we
are going to make a recommendation:
A bad one it would be:
· [After the question, without analysis]
o In my opinion your company have to partner with this IT Indian
supplier because is a good current trend.
A good one it would be:
· [After a deep analysis] Your company have to partner with this IT supplier
in India because:
o Your IT Labour Cost has increased 37% the last 2 years.
o The IT Labour Cost in India is 1/5 of your current one.
o One of your managers is from India and knows very well the culture
and how to manage Indian teams.

Moreover, inside these Firms, there is the topic that you sometimes give a
recommendation that can be improved, but you can NEVER give a
recommendation without an STRONG argumentation.
To achieve it, we need to give to our client, logical and structured reasons. That is
it achieved with the Scientific Method.
Therefore, knowing that we are going to use the Scientific Method during the case
interview, remember to state the beginning hypothesis as SOON AS POSSIBLE
to: keep focus on that logical analysis and to don’t forget to do it.

DAILY LIFE: to practise how to apply the Scientific Method, when
you heard an argumentation, you can judge critically its structure
and quality.

Issue Tree (Assumption Structuring)
After stating the hypothesis, we must decompose it in the needed assumptions that
have to be true, to verify the hypothesis.
For this task, consultants normally use the Issue Tree –also called Logic Tree-.
This tree is a graphical breakdown of a question that dissects it into its
differentiated components vertically, and progresses into details as it reads to the
right. In other words, it means to breakdown the hypothesis into different needed
assumptions, and for each one: in sub-assumptions. So the general structure is
going to look like this:

For example, to verify if the company’s net profit is decreasing caused by the
increase in costs (HYPOTHESIS), we must test if: (1) costs are increasing and
(2) revenues are maintained flat (ASSUMPTIONS).

This technique is useful for the Problem Solving Process, because it shows your
mental process graphically:
- For the interviewer (or client): it is going to understand better and faster
what you are saying and how you are thinking.
- For you: it helps you to picture all the relationships while you are in the
process.
This tree-graph can be used for other purposes such as classifications, etc. In
general, when we do a tree-graph, we can read it in 2 ways:
· Top-down: starting from the top levels (hypothesis, in our case) and for
each one, follow its branches to the lower levels: the more specific one
(assumptions and then sub-assumptions)
· Down-Top: vice versa.

EXAMPLE
A classification: “My room have chairs, tables and beds”
Tree-graph:
Top-Down Reading:
1. Room
2. Chairs, Tables, Beds
Down-Top Reading:
1. Chairs, Tables, Beds
2. Room

DAILIY LIFE: You can practise it, every time you are preparing for
an oral presentation or you are making a class schema, to
understand and visualize the skeleton.
EXTENDED MATERIAL: to go deeper in the Issue-Tree, I recommend
[11]
you the book: The Pyramid Principle .

SUMMARY
· “Divide and conquer”: segment information.
· MECE: Mutually Exclusive, Collectively Exhaustive.
· Scientific Method:
o State your Hypothesis as soon as possible.
o To be true that HYPOTEHSIS, some ASSUMPTIONS have to be true.
To verify you have to do some EXPERIMENTS, to finally achieve
your CONCLUSION.
· Issue-Tree:
o To picture your thinking.
o Top-Down and Down-Top Readings.
 STEP 2: SPLIT & STRUCTURE: PCR-Frameworks

Frameworks: What are they? Why do they exist? Why and what are the best ones
for case-interviews?
First, frameworks are route maps or structures to solve some range of problems,
which guide you thought this process. They are like a GPS that can really help
you, but you always have to include your critical thinking and perspective,
because each problem has its customized solution. In consequence, during a real
project, you need to use your critical and logical thinking (therefore, the same in
case interview).
This is why recruiters don’t like framework-oriented candidates, because they
don’t want consultants that know a couple of frameworks to solve a couple of
problems. They want consultants that can solve every problem. Otherwise, it
would be like drive a car using a GPS but closing your eyes.
So frameworks are good tools that can be useful in some scenarios, although they
never have to substitute your logic thinking.
Second, they exist mainly for 2 reasons. On one hand, probably you have
discovered in the previous explanation of Issue-Trees that you can create a wide
variety. However, there are some problems and in consequence, some Issue-Trees
representations that are extremely more common, and consultants use them a lot of
times, because they solve problems that are very frequent.
On the other hand, there are some difficult cases that you don’t know how to split
it into little and easier pieces. Frameworks can help you in that process, knowing
that we must adapt frameworks to problems, but never problems to frameworks.
Third, what are the best ones? You can find a lot of them (PESTEL, SWOT, 4Cs,
7Ps, 7Ss, etc.) On one hand, business students are usually plenty of them. On the
other hand, engineers without business background/knowledge don’t know which
are the key areas or ways to think about business problems.
To solve it, after 2 years of research, I have found a lot of possible frameworks
among other research through: strategy’s writers and a wide number of business
teachers.
However, the ones that are used the most: those that can be adapted easier, those
that are more useful to solve the most common business problems, that also other
consultants and I recommend because we use them almost every day in our
Consulting jobs helping businesses and, in consequence, are the most beneficial
for the case interview process are the variation/combination of some great
[12] [13]
business literatures .
These 3 frameworks look like the base of the others. I call them the PCR-
Frameworks:
(P) Profit & Loss
(C) Company (M&A)
(R) Revenue Increase

PROFIT & LOSS

When to apply it?
It would be applied to observe the company from a financial point of view, to
detect sources of problems. This is very important: to understand the reasons of
the problem numerically, before solving it.
It can be obvious, but I continue finding many applicants with great MBAs that
come without previous case-interview preparation. When they hear the
introduction of the problem, they start to explain her/his solution without knowing
the real why of the problem and without having strong numerical arguments to
defend her solution.
How to apply it?
The essential of this framework is decompose the company in financial
[14]
figures /concepts (with the MECE Principle), using the Issue-Tree to show it
more graphically. We start decomposing the Net Profit -the net earnings of the
company-:

1. [NET PROFIT]:
- To segment it, we think where it comes from: the revenue -the
income of the company-, and the costs –the losses-.
 Net Profit = Revenue – Costs
- So the 2 next branches are: Revenues and Costs.
2. [REVENUES]:
- On one hand, to decompose revenue, we think where it comes from:
the numbers of units –how many products/services we are selling- and
the price –in average how much our customers pay for each product-
Revenues = Units x Price/Unit
3. [COSTS]
- On the other hand, the amount of costs comes from:
- Variable:
ü The ones that change with the production volume.
ü For example:
§ The raw materials of pencil’s company.
§ If we increase the pencils sales, we are going to increase
our production.
§ So we are going to need more raw materials and in
consequence, our absolute variable cost of the company is
going to increase.
ü Variables costs are decomposed in Units x Cost/Unit.
ü The most common Costs/Unit are: raw materials, packaging,
direct labour.
- Fixed:
ü The ones that don’t change with the production volume.
ü For example:
§ Advertisement of the computer’s company.
§ They can produce higher or lower, but it is not going to
impact directly in the cost of the advertisement campaign.
ü The most common (normally):
§ Rent, water, gas, light
§ Machinery
§ Indirect labour
§ Advertisement
§ Insurances/Taxes
- Recommendation: be careful because many costs can be both,
depending on the industry. For example: energy is often a fixed cost.
However, in the case of Energy Plant Company, the energy is very
 important/related to the production, and is going to be considerable
variable.

This is the beginning of the schema. But always you can go deeper for more
details, segmenting each sub-branch. For example:
- Units (for the revenues and the costs): come from the numbers of
customers and the number of unit per each customer.
Units = Customers x Units/Customer
- Variable and fixed costs: as we have seen, can include different
aspects.
Besides to go deeper, you can do it also in more detail. For example, segmenting
revenues and variables costs per each different product/service.

Example
In this example the interviewer explain that our client is an aerospace engineering
firm that offers 1 specific consulting service for aerospace companies. This last
year, it decreases its net profit 15.000$. The goal of the project is to increase their
net profit.
So the steps to follow after verify if we have understood the problem and we have
asked for trends: internally (historically) and externally (comparing with the
competitors -benchmarking-):
Candidate: Net profit by definition is revenues minus cost. Our hypothesis is
 that the source of the problem comes from the decrease of repetition
for each customer, that impact in the revenues branch, because is what
we have discovered that is happening in the competition. So we are
going to start analyzing that branch.
Are the revenues decrease 15.000$ this last year and the costs were
maintained flat?
Interviewer: Yes, it is.
Candidate: Ok, so now we know the 100% of the decrease comes from
revenues. Revenues depends on the units of services the customer hire
and the price per service.
So we are going to start analyzing the quantity of services hired.
Did quantity of services hired last year decrease?
Interviewer: Yes.
Candidate: How much?
Interviewer: The units of sold services decreased in 10.
Candidate: Ok, to ensure that the quantity is the only source of the problem, we
are going to ask for the price for each service.
How much it cost each service?
Interviewer: 1.500$
Candidate: Ok. Now we know the only source of the decrease of the net profit
comes from Units, because:
Units x Price/Unit = Revenue
10 Units x 1.500$/Unit = 15.000$
So now we are going to continue analyzing the quantity. It depends on
the number of clients that use our service and the number of times they
use each year –the repetition-. We are going to see the repetition.
Has the repetition decreases the last year?
Interviewer: Yes it is.
Candidate: How much?
Interviewer: It has decrease in 2.
Candidate: Ok. To ensure that the repetition is the only source of the problem
we are going to ask for the number of customers.
What is the number of customers?
Interviewer: 5.
Candidate: Ok. Now we know that the only source of the decrease of the net
profit comes from the repetition per each customer because:
Customers x Units/Customer = Units Sold
2 Customers x 5 Units/Customer = 10 Units

DAILY LIFE: You can practise this framework, every time you see a
company going into bankrupt or outperforming, try to imagine its
financial composition (revenues, costs...) and imagine which
quantitative financial aspect is affecting them the most.

COMPANY (M&A)
When to apply it?
This framework is used when you want to understand the company in more detail
or find qualitative reasons for numerical financial problems found with the P&L
Framework.
We could analyze a huge number of facts and circumstances of the company with
many different frameworks (SWOT, PESTEL, 7Ss, 7Ps, etc.) However, in a real
case -in consequence, also during the interview-, you won’t have enough time to
do it all and also you don’t need to always analyze all the areas. So, we are going
to focus on a couple of them.
How to apply it?
In order to get the company’s overview, I recommend focusing on the 4 areas
needed to understand for success: Customer, Product, Company and Competitors.
[15]
These four aspects are similar to the 3C’s business model of Kenichi Ohmae :
Customer, Competitors and Corporation; but, including also information about the
Product.
In order to memorize the structure of the framework, a tip is to picture the process,
with this sentence: “what we want (our COMPANY) is to sell our PRODUCT to
our CUSTOMERS, jumping our COMPETITORS”

Customers
Competitors
Product
Company

These are the 4 areas of information. But each one has a lot of information inside,
so we can segment each group.
A brief overview of what could be include it in each one or how can we segment
them:
· Customers: what are our most profitable customers? Which are their
preferences, habits? Which is their income, country? How we segment
them?
· Product: what are our products? What problem we are solving (segment
them in typologies)? What is the most profitable one? What is the most
sold? 4P’s, etc.
· Company: what are our financial statements? How the company is
financed? Which are our distribution channels? How our management team
is? What is our competitive advantage? How we maintain it along time?
 · Competitors: who are they? What is our market share? What is our
difference from them? Which are their distribution channels, what are their
strategies and their competitive advantages?
Variation: M&A
Each framework, have to be adapted to each situation. I didn’t include all the
possible situations for each one, because: on one hand, I would need a couple of
books and every day appears new business problems. On the other hand, the most
important aspect is not to use the framework, is to use your logic thinking.
However, there is a common business situation to study, in which two or more
companies are merged, or one acquires the other. To analyze it, we can use the
Overview Framework for those companies (for example to analyze synergies,
costs, problems...)
Example 1
Following the previous example (the aerospace company, used in the P&L
Framework’s example), our client has decreased their customers’ repetition in 2. I
mean, the number of times that a customer buy a service during a year have
decreased in 2. And this impacts with a decrease of 15.000$ in the net profit.
Candidate: So now that we know the source of the problem, but we are going to
analyze the reason of this problem. To do that I have selected four
areas where I think the problem could comes from: customers,
product, company and competitors.
[Comment: As a following part of the previous example, we already have
information about the company and the product. This is why we are
going to omit the analysis of these 2 aspects. In other cases, we
would decide to analyze them or not]
Candidate: As we already know about company and product. We are going to
start by the competitors.
Who is our main competitor? What is our market share comparing to
them? Are they suffering the same decreasing of net profit caused by
the same reason? How are they doing to solve it?
Interviewer: Our engagement client is the main leader in your industry with a
78% market share. The other competitor is AeroShare. It is not
suffering the same problem, but it has started a new big campaign to
improve the relation with suppliers and its customer service.
Candidate: Ok. And, lets talk about our customers. Are they having the same
needs as before? Are they moving to our competitor? Do they like our
customer service?
Interviewer: Our main clients are having more or less the same needs, but each
year, they are asking for more demanding products and services.
We have maintained the same customers’ volume for the last 10
years, but recently the feedback, is decreasing grades related with the
customer service and the post-selling attention.
Candidate: Knowing that, my hypothesis is the decrease in customers’ repetition
is caused by a bad customer service. So I am going to go deeper in the
customer experience.
Why are they giving us bad feedback about the customer service?
Interviewer: They said that competitors are offering a faster and extremely
effective customer service by phone. Always you have a problem;
they solve it in less than 24 hours.
Additionally, our clients’ budgets are decreasing. So they are doing
fewer projects during the year with us, and trying to hire internal
employees who can respond 24x7.
Candidate: So, updating the hypothesis: the decrease in repetition, it is
probably caused by:
- An improvement in our competitor customer service.
- It is decreasing our customers’ opinion about our customers
service, in terms of speed and effectiveness.
- A reduction in the internal budgets of our clients: causing to
hire internal employees and decrease the times that use our
services.
Example 2
In this example, there are 2 companies that are thinking to do a Joint Venture -an
agreement during a period of time-. The goal is to find the potential synergies
between them:
Candidate: In order to determine the possible good synergies between both
companies, we are going to analyze four areas: customer, product,
company and competitors.
 I will start with the product. What are the 2 companies offering?
Interviewer: FoodDist is a big distributor of fresh food and related products. And
OilPassion is a huge producer of a high quality olive oil.
Candidate: About the company, where are they located?
Interviewer: FoodDist in Germany and OilPassion in Spain.
Candidate: Which are the customers of each one?
Interviewer: FoodDist is like a big retailer that distributes to the medium and
high-income population in Germany. And OilPassion distributes to
most of the Spaniard retailers.
Candidate: And finally: who are the competitors of each one? Which is their
market share?
Interviewer: On one hand, FoodDist is positioned with high quality products with
a 22% of market share. Its 2 main competitors are FD2 and FD3.
On the other hand OilPassion only has a 14% market share, in an
industry extremely fragmented with more than 50 competitors.

[The next table is a summary of the previous facts]
Customer Product Company Competitors

Medium-
Fresh 22% m.
Food high
food, share
income Germany
Dist but not
German FD2, FD3
olive oil
population
14% m.
Oil Most High share
Spanish quality Spanish
Passion retailers olive oil Extremely
Fragmented

Candidate: So, the main synergy I find between them is that OilPassion’s olive
oil can be distributed through FoodDist because:
- FoodDist it would be interested in a foreign product of high
quality that is not offering now. With this diversification we can
analyse how it would impact in the market share.
- OilPassion probably is interested in increase sales volume
(with help of distributors) because:
 ü Its current market is full and has fragmented competition.
ü This can open to get international connections and open
opportunities in other countries.
DAILY LIFE: You can practise this framework, every time you see in
news that 2 companies are going to merge (2 banks, 2 retailers...),
thinking 5 reasons why they are merging and 5 of why they don’t have
to do it.
EXTENDED MATERIALS: if you are considering go deeper in M&As
or see a full range of specific frameworks, I recommend you the
[16]
book: Exploring Strategy

REVENUE INCREASE
When to apply it?
In Consulting, sometimes there are project meetings where brainstorming is
needed. For example, after detect the problem of a company; in order to improve
the situation, you need to find a solution that many times is not obvious.
Of course, those meetings have to be prepared before, for each consultant,
because the team is searching for really experienced and creative solutions.
In consequence, one of the parts that are evaluated in the interview is creativity
under pressure.
Creativity doesn’t have a framework, but we are going to see some tips to
increase our “Structured Creativity”, but focusing on the most common scenario in
which is asked for creativity: the revenue increase.
How to apply it?
IN GENERAL
When you are asked for a creative solution; or in a brainstorming, a list of
potential solutions to solve a problem, especially when you are under a high
pressure, it is frequent to get stuck or get low number of ideas.
To avoid this and also to keep a structured thinking, the recommendation is to
group ideas.
If you remember the issue tree that we have seen in a previous chapter, we have 2
ways to read them (Top-Down and Down-Top).
We are accustomed to create list of things naturally by Down-Top. I mean, starting
with the more specific ideas, and then we group them in big ones.
However, the trick to increase the creativity (idea generation) is to use the Top-
Down. Start with the more generic ideas and then to the most specific ones.
For example: Tell me 10 ways to increase the employees’ motivation:
· “Down-Top” Idea Generation:
o Meet the boss with each worker to know which are their worries and
how she could help them.
o Create a plan of bonus variable salaries for top performers.
o All the office does an especial dinner when the company increases
2% of sales.
o ...
o And the group the ideas.
· “Top-Down” Idea Generation:
o Get information
§ Now: “motivational audit”.
§ Periodically: each month periodic meeting with the boss.
§ Always: create an internal blog for sharing opinion.
o Material compensations
§ Material
· Economic (bonus, extra-salaries...)
§ Non-material
· Congratulate when someone is doing something well.
· Give thanks.
o ...
With this grouping you can create more ways in less time and easier.
VARIATION: REVENUE INCREASE
When the interviewer (or our client) asks for increase their sales, my recommend
steps to follow are:
First, search for trends: if competitors have more revenues than us, what are they
doing different from us (customers segment, products, cost, distribution...) in order
to create it (from scratch), copy it (for example, hiring the management team) or
thinking in an M&A.
Second, as we have seen in the P&L Framework:
 Revenue = Products x Units x Price
So now we have the 3 groups of issues that we can vary:
Products
Diversification: offer other products/services, giving
more/different/bigger solutions for the problems
Quantity (Units/Product)
Advertisement Campaign: by TV, newspaper, online...
Customer Diversification: different profile of the target customer:
different countries, incomes...
Seasonal Balance: there are some businesses that have different sales
volumes depending on the season time. In order to increase each season
we can offer different seasonal products.
For example
If they are selling schoolbooks, very probably we are going to
sell mainly on August and September.
So we can try to sell school material/or literature books
during the course, in order to increase our revenue during that
time.
Increasing distribution channels: improve our quantity/quality of our
channels (increase partnerships, commissions that we are giving to them
for each sale...)
Customer service: improve how we attend our customer: before, during
and after the sale.
Price (Price/Product)
Decreasing or increasing price: depending on the customer we are
targeting is going to cause different results.

You can find more ideas in business literature like, and in your daily life as a
consultant. So my recommendation is to keep in mind the ones that are most
beneficial, go well in most of the cases and help you in difficult moments, but also
I recommend you to have a notebook, where you include all your new ideas you
have discovered to increase revenues.
Example
Your client is a Hungarian retailer that distributes food for domestic birds. Your
goal is propose ideas to increase revenues.
Candidate: Considering this as a brainstorming, as a previous phase of the
analysis, I am thinking in 3 main ways to increase revenues: products,
quantity and price.
First, product. We can diversify our product range, offering
complementary products. For example, a part of food, offer:
birdcages, merchandising, complements...
Second, quantity.
- It would be possible to increase our distribution channels. For
example, partnering with vets.
- Launching advertisement campaigns. For example at
Christmas, giving for free a bird (something very cheap), after
the reservation of the bird food reception at home every month
(to obtain periodical revenues)
- Improve our customer service. For example, though a
Facebook account, in which we can answer the questions of our
clients and also guide them to one of our products.
- Customer diversification. For example, offering our product
range in other countries or to other income segment.
- Improving the seasonal balance. Assuming that the bird food is
bought every month and probably their sales increase in
Christmas (with presents, gifts...), we can create a customers
program to achieve a periodical purchasing. For them to keep it
easier, for us to receive permanent revenues and potentiate the
Christmas sales period.
And third, price. It needs an analysis, but if our customers are the
low-income segment, we would be interested to consider reduce
prices to increase customer volume.

DAILY LIFE: You can practise this framework, every time you see a
company in the news or a shop in the street. While you are walking,
think 10 ways to increase their revenues.

SUMMARY
· PCR-Frameworks
 o Profit & Loss: detect the quantitative source of the problem.
o Overview (M&A): Customers, Product, Company and Competitors.
o Increase sales
§ Search for trends and benchmark with competitors.
§ Create ideas with Top-Down Issue-Tree.
§ Vary
· Products: diversification
· Quantity
o Advertisement
o Customer Diversification
o Seasonal Balance
o Distribution Channels
o Customer Service
· Price
· Recommendation:
o Be hypothesis-oriented, not framework-oriented.
o Create or adapt structures/frameworks to the problems, not vice
versa.
 STEP 3: ANALYZE & DATA

Normally, consultants don’t have enough time to analyze all the possible data or
follow the entire framework. They are not able to “boil the ocean” (as is called by
internal consultants, to analyze all the possible information), because there is not
enough time and not always is needed.
So we are going to see the principles needed for prioritization in the analysis to
know how to analyze a problem (in order to find a solution) and some
recommendations to treat the data. These are: Pareto Principle (80/20), Search for
Trends, Where-Why-Solution, Top-Down Reading, Market Sizing and some
Numbers/Charts tips.

HOW?
Pareto Principle (80/20)
The Pareto Principle or 80/20 stated for many events that roughly the 80% of the
[17]
effects come from the 20% of the causes .
Two examples of this principle would be: first of all, the 80% of the revenue
comes from the 20% of the customers. The second one, the 80% of profits in the
Technology Industry is made by the 20% of the companies in the sector.
The application of this rule in many businesses means that you have an easy
access to the dramatic improvements in profitability by focusing on the most
effective areas by eliminating, ignoring, automating, delegating or retraining the
rest, as appropriate.
In the case-interview context, when we are analyzing a problem, and we don’t
want to “boil the ocean”, is needed to prioritize what we are analyzing, to get
more with less.
This is a very difficult training, because it is mainly given by experience and
industry knowledge. For example, what are the driven costs (main costs) in this
industry? How the competitors are solving this specific problem? Etc.
So my recommendation is: first, always you are selecting a branch (among others)
to analyze in your issue-tree, explain to the interviewer why you are choosing that
branch (why you are prioritizing like that).
For example, if you are trying to improve the net profit of an e-commerce,
analyzing its revenues coming from 100 clients, and it is receiving 70% of
revenues from 10 out of that 100 clients: start from those 10.
We can analyze first the other 90 clients, but doing this last option, our analysis is
probably going to impact LESS in revenues.
DAILY LIFE: When you are doing your daily task schedule, try to
prioritize it, thinking in this principle.

Search for Trends
Because of this 80/20, we are interested in detecting the most relevant
problems/issues and even better, if we do it in the fasted way. To detect faster the
key issue, is very useful to ask for trends while doing comparisons.
During the case there are two moments where search for trends is going to help us
a lot. The first one is at the beginning of the case to if we are searching for the
cause of the problem. The second moment, is every time we get a data or a result,
compare it with another one is going to help us to understand it and if we provide
that other number, we are going to add value with that insight.
When you are asking for trends to do a comparison, you can do two types of
comparisons: internal and external to the client.
Internally, you can compare the client data historically -previous years- (revenues,
costs, employees, etc.)
Externally, you can compare by benchmarking against competitors and the
industry: what the other players are doing (distribution channels, revenues,
manufacturing process, etc.)
DAILY LIFE: Every time you listen a figure/number try to compare
them with something (historically or related), to determine its
magnitude.

Where-Why-Solution
Sometimes, you have a client who explains you a problem to solve. But during the
analysis, you discover that the problem is bigger (as an iceberg) or the real
problem is other.
To avoid solving the incorrect problem, it is important to discover the real one
and its size. To do that, my recommendation is to follow 3 steps.
First one: Where? Detect where to find the data (QUANTITATIVE argument) that
will confirm the real problem. It means where is quantitatively the source of the
problem. For it you must use the P&L Framework.
Second one: Why? Detect the main reason for this situation. To detect this
QUALITATIVE cause, you must use the Overview Framework.
Third one, having all the above information, it only remains you to look for the
solution. In many cases, you can use the Revenue Increase Framework.
For example, the interviewer says the company’s net profit is decreasing each
year (PROBLEM). After our analysis we have detected this reduction comes from
a decrease of 50% of our client’s portfolio (WHERE). Those clients are now
buying to the competitors, because they offer them a better price (WHY). In order
to solve it, we are going to... (SOLUTION)
DAILY LIFE: When you heard a problem, rather than focus on the
effects, try to think in the real source of it.

Top-Down Reading (Issue-Tree)
As we have seen in a previous chapter, we have two ways to read Issue-Trees. In
order to be structured and clear in our analysis, there are two recommendations.
The first one, use the Top-Down reading for the Issue-Tree when you are
designing your analysis strategy. On one hand, to follow a more logical reasoning,
in which you state a hypothesis, and then you test the assumptions.
On the other hand, because you can detect faster the wrong assumptions, because
you don’t have to analyze all the low levels (sub assumptions), if you detect
before a wrong top level assumption.
For example, after being asked for increasing the net profit:
· Bad analysis
o What is cost of energy?
o What is the cost of gas?
 o What is the cost of the machinery?
o ...
· Good analysis
o Ok, we know Net Profits is Revenue-Cost.
o So we are going to start analyzing the Revenue because...
And the second recommendation, when we are reading the Issue-Tree, it is
important not jumping among different sub-branches, unless we have a clear
justification of why to do it.
On one hand, in management structured minds are wanted, whose are more
understandable for the clients (in consequence, for the interviewers). So it is
easier to follow and understand when one follows a clear and logical path –a
structured analysis/reading of Issue-Tree-.
On the other hand, “bright ideas” are not wanted to solve problems, just for 60%
of the time. I mean “trying” methodologies all the time or just following intuition.
What is wanted in Consulting is to solve all the problems, every time. To do it,
you need a structured way of thinking and a systematized problem solving.
For example, during the analysis with the P&L Framework:
· Bad analysis
o Analyze revenue.
o Then customers.
o Then fixed costs.
o Then ask for the industry
o Then product price
· Good analysis
o I am going to start analyzing the revenue because...
o Revenue = Quantity x Price.
o So, I am going to analyze Price because...
o ...Now that we have seen that we can’t do nothing more in the revenue
side, I am going to analyze the costs.
o Costs include Fixed + Variables
o So, I am going to analyze Fixed because...
A final recommendation, every time you are going to enumerate some points, start
for mentioning the total number of points, at the beginning.
A couple of examples:
 · I recommend you this for three reasons. First... Second... And third...
· You company is decreasing in sales for two problems. On one hand, you
customer service is ineffective, causing unhappy customers. On the other
hand, you have loosed four of your nine distribution channels.

And you can think: why is better to enumerate it at the beginning? Because your
are going to be more understandable for two reasons: first, your are going to be
more structured and second, you are going to give to your listener, at the
beginning, an overview of what you are going to say.
DAILY LIFE: Every time you are explaining something to another
person try to do it Top-Down, first the general classification of
aspects and then the content of each aspect.

Market-sizing
This is an extremely frequent and extended practise, included in the consultants’
daily life. It consists in doing an APPROXIMATION of a number that we don’t
have, under some specifications.
This is used as a tool for many reasons: to analyze if one selected country have
enough potential market (customers) for launching a product; to do forecasts; etc.
For example, could you tell me how many car wheels are sold in France every
year? How many bicycles are produced in Germany per year? Etc.
The first time you listen these types of questions, you can think that they are
extremely difficult. However there is a path to do it easier with some of the
principles that we have seen before:
1. Understand: exactly what is asking the interviewer and in which units s/he
wants the result.
a. For example, it is different to ask for the “number of car wheels”,
than to ask for the “potential sales in dollars of car wheels”. On one
hand, s/he is asking for wheels. On the other hand: for dollars.
2. Whole market: calculate the entire one.
3. Segment:
a. State segmentation assumptions: including how to segment and
following the principles: “segment to win”, “MECE” and the
“80/20”. The main idea is to segment the market in a MECE way, to
 have the option to calculate easier little parts, focusing on the parts
with more impact in the calculation.
b. Subtract (reductions): from that total market, remove the segments
that are not included in what the interviewer is asking for.
i. For example, if the interviewer is asking for German
population between 25-100 years old, we have to subtract the
people below 25 years old.
4. Repetition:
a. Multiply each unit, per each repetition/unit.
5. Unit conversion: and finally, if needed, convert the final number into the
targeted unit (dollars, kilograms, etc.)
For example, bicycle manufacturing industry in US: how many dollars earns each
year? In other words, how many bicycles produce the US, translated to money?
1. Understand: we want the money earned by the production of bicycles (not
the ones that are already) in US, per year.
2. Whole market: to do it, we are going to get the US population: which is:
near 300 millions.
3. Segment::
a. Assumptions:
i. US life expectancy: near 80 years.
ii. Population is segmented in 3 different age groups,
from the bicycle’s consumption point of view (among: 0-19, 20-
59, 60-80)
iii. The age distribution is stable: we assume that for each
group there is more or less the same amount of population. This
can be graphically shown as a rectangle, where the age
distribution is in the vertical axis and the volume of population
for each group’s age in the horizontal axis.
b. Reductions: we are going to take away the group 60-80 from the
analysis, because they have low impact. They may be too old to buy a
bicycle.
c. So, now we have that ranges:
i. 0-19 years represents the 25% of 0-80 years
ii. 20-59 years represents the 50% of 0-80 years
d. So:
i. 25% of 300 millions = 75 millions
 ii. 50% of 300 millions = 150 millions
4. Repetition
a. Populations consumption assumptions:
i. 0-19 years: buy 1 bike every 5 years
ii. 20-59 years: buy 1 bike every 10 years
b. So each year:
i. 0-19 years: 1/5 = 0,2 bikes/year
ii. 20-59 years: 1/10 = 0,1 bikes/year
c. If we add:
i. 75 millions x 0,2 bikes/year/person = 15M
150 millions x 0,1 bikes/year/person = 15M
ii. Total: 15M + 15M = 30 millions bikes/year
5. Unit: assuming that each bike it cost near 70$
30M x 70$ = 2.100 M $/year

Remember to explain the interviewer the assumptions you are using. It is very
typical to forget it.

DAILY LIFE: every time you see a place where there are many people
(a commercial centre, a soccer field, an airplane, an airport...), try to
do an estimation of people inside.

Numbers/Charts
During the analysis you are going to work with many numbers and charts. During
the case you cannot bring calculator and it is expected to do it mentally correct
and fast.
NUMBERS
Mentally calculation, as other skills, it is a technique. Therefore, what you only
have to do is to study the theory and training.
About the technique, there are infinite tips for numbers. I recommend you to use
the ones that give you better accuracy, speed and comfort.
To detect the most used rules, I have researched though consultants that do mental
calculations extremely fast. The conclusion and the most repeated answer was that
consultants didn’t learnt any specific tool, but we “play every day with numbers”
since we were child.
I was analyzing the mental processes consultants do automatically in their minds
and these are the most used methodologies.
· Addition
o As we learned before, when we have a big problem, we have to break
it into parts.
o Example: to calculate 1270 + 1430.
§ We decompose the 2 numbers:
1270 = 1200 + 70
1430 = 1400 + 30.
§ Then we operate:
1200 + 1400 = 2600
70 + 30 = 100
§ The final result: 2600 + 100 = 2700.
· Subtracts
o Tip: the only one that I have detected in this operation is for
 calculations with “rounded” numbers (containing final zeros), when
the “rounded” number is the biggest one of both.
What is used, is to subtract 1 to the rounded number and then, add it 1.
o Example: to calculate 1000-728. We subtract 1:
§ 1000 – 1 = 999
§ Then calculate the difference: 999 – 728 = 271. And finally
adding it 1: 271 + 1 = 272
· Multiplications
o Tip: following the principle “divide and conquer” (big problems in
little ones), the recommendation is to separate the operation in little
ones (similar to addition). The most difficult number to multiply
decomposed in sums.
o Example: to calculate 37 x 48.
§ We see that the most difficult one is 48, so we separate it in a
addition: 48 = 40 + 8.
§ So now is (40 + 8) x 37 = (40 x 37) + (8 x 37)
§ Then, each part: 40 x 37 = 1480 and 8 x 37 = 296
§ The final result is: 1480 + 296 = 1776
· Divisions
o Tip: here to get speed, the best option is know by heart the most used
fractions with some decimals.
§ 1/1 = 1
§ 1/2 = 0,5
§ 1/3 = 0,33
§ 1/4 = 0,25
§ 1/5 = 0,20
§ 1/6 = 0,16
§ 1/7 = 0,14
§ 1/8 = 0,125
§ 1/9 = 0,11
§ 1/10 = 0,1
· Percentages:
o Tip: use the 1% and 10% of the targeted number as the main unit, and
then multiply it for the number of times needed.
o Example1: to calculate the 7% of 500, we can divide 500/100 to
calculate the 1% of 500 = 5.
 With that number we only have to multiply it x7 to get the 7% of 500 =
5 x 7 = 35
o Example2: to calculate the 80% of 700, we can divide 700/10 to
calculate the 10% of 700 = 70.
With that number we only have to multiply it x8 to the get the 80% of
700 = 70 x 8 = 560
Remember that all of these are only tips. But it remains the most important aspect:
training. Like consultants do “play every day with them”.
DAILY LIFE: you can think in moments during the day for practising
mind maths. A couple of examples:

- While you are walking, for each car registration, train all the
main operations (add, subtraction, division, multiplication) and
percentages.
- While you are shopping, try to do the entire bill by head,
calculate the VAT…
- Every time you receive a number, try to compare it to another
number to look for the percentage.
o For example: in news you listen, the football team have
done 13 matches. Ok the total matches of that league are 52.
So they have done the 25% of the league.
Two last recommendations. First, “keep it easy” (the numbers). If you are doing
estimations, and you can choose the numbers, get those that are going to be easier
for your calculations and always you can confirm them with the interviewer if s/he
agrees with those numbers.
For example: if the interviewer asks you to calculate the 20% of the US
population, you can choose 308 million or 300 million of population (estimated).
Get the easy one 300 x 0,20 = 60 millions.
Second, after your calculations, do sanity checks to ensure the correction. During
the interview it is allowed to do your calculations at a normal speed. However:
the faster, the better. What is not allowed is to do incorrect calculations. So check
them.
CHARTS
Engineers are used to treat many tables in the university. However, at the
beginning is difficult when business concepts are related in the charts, so you have
to train it.
[18]
DAILY LIFE: to train this, you could read The Business Week or
[19]
The Wall Street Journal . When you detect one chart, try to
understand it and get a conclusion from it.

SUMMARY
· Principles/Tips
o 80/20: 80% of the effects come from 20% of the causes.
o Search Trends
o To solve problems: Where/Why/Solution
o Analyze with the Top-Down issue tree Reading
o At the beginning, tell the total number of the enumeration
· Market-sizing
o Understand
o Whole market ()
o Segment (with reductions) (remember the assumptions)
o Repetition
o Units conversion
· Numbers/Charts
o Tips
§ Additions/Multiplications: “divide and conquer”
§ Subtractions: -1 to the biggest “rounded” number
§ Divisions: main ones by heart. Use 1% and 10% as the base
 STEP 4: CONCLUSION

During a Consulting project, after the analysis (in case interviews too), what the
client (the interviewer) wants is the solution or recommendation.
For that, you have to find the solution and convince the client to apply it (typically
the most difficult part)
We are going to see the aspects that affect this final step: Idea Generation, Insight,
Case Synthesis and Argumentation.

HOW?
Idea Generation
For a fast and easy idea generation (to find solutions), the only recommendation is
to follow the tip we have seen in the Revenue Increase Framework: try to group
ideas.
DAILY LIFE: to train it, when you see a person with a problem, try to
look for 10 different ways for solving it: how to weigh a table, how to
reduce the light of the dinning-room, etc.
The other option is with brainteasers: Internet is plenty of them.
Insight
This is one of the most difficult aspects to train. This is the reason why junior-
candidates are asked for less insight, but more analytical power. But senior-
candidates need a bigger insight and expertise of services and the industry.
DAILY LIFE: to train it, as well as read business publications and
newspapers, to keep informed about industries and trends. I also
recommend you: every time you see a company, guess what they have
to do to improve or what probably are going to be their next business
movement. And then, compare it critically with what they are doing
and what is saying newspapers.

Case Synthesis
At the end of the case, a typical mistake is to re-explain all the case you have
done, rather that give the recommendation/conclusion.
The clients (and the interviewer) don’t want to know if we have travelled to 24
countries and we didn’t sleep the last 3 days. They want results. So tell her the
conclusion, not how you have achieve it.
To test it, the interviewer can use “the Elevator Pitch”. This test consists in
imaging that you are in the elevator with the company CEO and you are asked for
[20]
the final recommendation, before s/he lefts the elevator .
So remember: “Tell the conclusion, not the process.”
Argumentation
With the previous aspects, you know how to find the solution after the analysis and
how to synthesize the case. However, we need to convince the client to apply our
recommendation.
This is very difficult, because we are in front of someone, who probably has
larger experience and expertise in the company/industry. But there is something
we can offer: analysis, data and quantitative reasons.
This is why we recommend to every time concluding with: the recommendation
and then three reasons (if it is possible, quantitative reasons with data and
numbers), why s/he has to apply it.
· Example 1
o After our analysis, and looking for many spread sheets, have spoken
with many of your employees and looking though many information
databases of your competitors; my recommendation is to do a Joint
Venture with company X.
o BAD Conclusion:
§ Without reasons structure.
§ Without quantitative arguments.
§ Explain the process, rather than focus on the recommendation.
· Example 2:
o My recommendation is to do a JV with the company X because:
§ We have maintained our net profit flat, for the last four years.
 § The surveys said that 82% of the Chinese population is
interested in buying our product and no company is offering it
yet in China.
§ The company X is the leading distributor with the 94% of market
share, for the main complementary product, and they really want
to do the JV because they don’t have factories to produce our
product.
o GOOD Conclusion
§ Structured reasoning.
§ It includes quantitative reasons.
§ It gives the recommendation and 3 reasons.
DAILY LIFE: try to use this type of explanation/reasoning of your
opinions.

SUMMARY
· Idea Generation: group ideas
· Case Synthesis: tell the conclusion, not the process
· Argumentation: recommendation + 3 whys (qualitative and especially
quantitative)
 GENERAL: HOW TO ADAPT FRAMEWORKS?

Frameworks are analysis structures that are more common and consultants use
them in some cases as a tool. We have studied in previous chapters the most
frequent ones.
However, one typical mistake of candidates is to be framework-oriented. Trying
to adapt the business problem into a specific framework. This is a big mistake
because each problem has different solutions and you need different analysis to
approach it.
For example, imagine one day you go to the hospital with a broken finger, and the
doctor starts to examine your ears, then your toes, and finally the measure of your
body. If you discover this doctor is doing always the same questions and actions,
probably you will never return to her/him.
Because s/he is using the same question and same patterns (frameworks) to detect
the diseases, without take into account the specific aspect of the patient s/he has in
front.
So be framework-oriented, rather than hypothesis-oriented, is penalized during the
case. Frameworks have to be adapted to the problem, not the problem to the
framework.

HOW?
Keeping in mind that the centre of the coordinates axis is the problem and not the
framework. So we can use it or adapt it, if is related or near the problem.
To understand better how to adapt frameworks to specific cases, we are going to
see adaptions examples for each PCR-Frameworks we have already seen in
previous chapters, for instance from a Technology point of view (in the scenario
[21] [22]
being speaking to CIOs , rather than CEOs )
This Technology point of view adaptation is very common, especially when you
are specialised in Technology inside these Consulting Firms. For example, in
[23]
McKinsey & Company, this department it is called BTO .
P&L
If we are using this framework, probably we are analyzing the company from a
financial point of view. Let’s imagine that the interviewer ask to us for different
ways to reduce the cost side, but only for items related with IT.
It will arrive the moment that we have to segment the costs; however it can be
difficult to segment IT costs between variable and fixed.
However, we can adapt the framework and try to adapt it to an easy and most
personalised structure, dividing cost between: software, hardware and labour.
Then, each one, among volume of items and cost/item.

Company (M&A)
In this one, if you are analyzing the advantages and disadvantages of an M&A (for
example between two banks), from an IT perspective:
1. Get the four areas of the framework: Customers, Product, Company and
Competitors.
2. Think which one is going to be the most important and developed it.
a. In this case, we have seen the most important areas to analyse are
probably: Customers, Product and Company. Because Competitors
only can include the market share variation or the decrease in the
suppliers’ power negotiation.
3. When we know the three areas to analyze about companies, we include the
two global aspects we are interested in: advantages and disadvantages.
 Therefore, we only have to fill gaps in the next table (included some
possible ideas)
Customer Product Company
Reducing
structural costs
Improve
[24] Specialization
Advantage CRM Data Tech-enable
Know-how

Less supplier
power
Difficult to
Bad perception Management goals
integrate product
Disadvantage about the new
information in Integration costs
interface
databases

These are the ideas explained with deeper detail.
- Advantages:
o Improve CRM Data: cross customer information’s database to
improve it.
o Tech-enable: technology of company A can open opportunities to
company B.
o Reduce structural costs: taking advantage in a more efficient way of
the IT resources.
o Specialization: of the employees and departments, so they can
improve their efficiency.
o Know-how: sharing IT knowledge between companies.
o Less supplier power: with bigger budgets, the new company has more
power to negotiate with their suppliers.
- Disadvantages
o Bad external perception about the new interface: with the new
integrated software, customers can think that is difficult to adapt to the
new one (especially old people)
o Product database integration: depending on the systems, it is going to
be difficult to merge the systems containing the product information.
o Management goals: disappointed point of views about the IT future of
the company, between the 2 management teams.
o Integration costs: for the databases, trainings…
Revenue Increase
In the previous example, our banking client decline the M&A. Now we want to
increase our client ‘s revenues, through Technology Solutions. So we are going to
adapt the Revenue Increase Framework specifically for a Tech view.
For this, as before, we can search for trends: externally (our competitors’
strategies for revenue growth creation) and internally (what we have done
historically).
After that, we can analyze the three areas to improve revenues:
· Products: diversification. We can try offering more or different type of
products, enabling new technology inside the company.
· Quantity
o Advertisement: by Google AdWords and partner webs.
[25]
o Distribution Channels: by online affiliation programs, SEO ,
[26]
SEM , social networks, newsletter...
o Customer Service: improving the process of receiving online
complaints.
· Price
o Depending on our strategy, customers and other variables, we can
vary our price (for example reducing it only in the online channel), to
increase our customer volume and optimize our revenues.

DAILY LIFE: every time you watch news about company’s problems,
try to think which framework you would use it (one of the PCR or a
different one) and how you would adapt it to that specific situation.

HOW TO SWITCH BETWEEN FRAMEWORKS?

As we have seen, frameworks are just tools. We can adapt them and we have to
use them only when they are needed. So when you have finished one part of the
case, you would probably change your analysis structure. With this I mean to
change between structures/frameworks.
A frequent example is by following the simple schema of problem resolution:
understand the PROBLEM, find the REASONS (quantitative and qualitative) and
give the SOLUTION. In this schema, after understanding the problem we have to:
1. Find the quantitative reasons (generally with the P&L Framework)
 2. Find the qualitative reasons (Company Framework)
3. And finally give the solutions (sometimes generated with the Revenue
Increase Framework)

SUMMARY
· Don’t be framework-oriented: adapt the framework to the problem, not the
problem to the framework.
· Switch between frameworks, as you need.
· Problem resolution: PROBLEM, REASONS (quantitative, qualitative),
SOLUTION
 GENERAL: OTHER RECOMMENDATIONS

So far, we have seen some of the important skills/techniques in the previous

chapters, but there are some aspects that you have to keep in mind during the case:
Keep me posted, Maintain the calm and What to do if you get lost.

DURING THE CASE

Keep me posted!
The interviewer who is in front of you, s/he may be a senior-consultant, extremely
busy, that was doing the case that is doing with you in the real life previously.
Now, imagine that you are that consultant and you have a young student who is
trying to solve the same problem. Also, you have a high knowledge and detail of
the case, so probably this interview is going to be a little boring and you will
probably get distracted.
In order to keep the interviewer’s attention, to receive her/his help and to avoid
long silences, you have to do two things.
First, always you have to think out loud. I mean, tell her/him how you are solving
the case and how your mental process is going. Especially if you are an engineer,
you will have a very structured way of thinking, which is one of the aspects they
are looking for.
For example, if the interviewer asks you to estimate the number of cars sold in
US:
· Bad option: ok...(2 minutes in silence)...The result is 110 million.
· Good thinking: ok. Knowing that the population of US is near 300M, we
are going to segment the populations into age groups... (Continue
explanation).... so finally doing this multiplication, we know that there are
sold approximately 110 million cars in US.
Second, update the interviewer with the information you are discovering and the
impact that it is having to the case resolution. Similar to the consulting internal
jargon: “so/what”. It means, after doing some discoveries or having new data, tell
him/her the impact/insight related to our problem or the new hypothesis.
For example, imagine a client with decreasing net profits and flat revenues.
During the costs analysis, the interviewer explains that all the industry suppliers
are increasing their prices. We can update: now our hypothesis is suppliers are the
cause of the decreasing net profit. To test it, we are going to continue analyzing
each of our suppliers.
DAILY LIFE: train thinking out loud with your friends or family,
when is possible.

Keep calm
During projects, sometimes you have to work under pressure, so the interviewer is
also testing how you react to stress situations (your calculations, you synthesis in
the “elevator pitch”...)
To survive, you need previous preparation. First, and the best one, is training. The
most expertise and trained you are, the easier and calm you will be.
Second, avoid giving too much importance to the situation -the interview-. Or
thoughts as “if they say that I didn’t pass the case, my life will not get no sense”.
To avoid that, my recommendations are:
· About you: apply to other Consulting Firms, in addition to your favourite
one, in order to always have an alternative plan and to train a lot of real-
cases.
· About the interviewer: be prepared for the “good and bad cop”. With this I
mean that during the recruitment process, there are going to be different
interviewers. Some of them are going to be extremely peaceful; others will
try to really challenge you and give you pressure. So don’t worry, normally
they are only acting, because they have to test how do you think under
pressure with difficult context.

DAILY LIFE: try to do speeches or speak in front of many people
(doing presentations in your university, in your job, meeting with
friends, etc.)

If I get lost
On one hand, during a real project, when you get lost, you have seniors to help
you. Accordingly: don’t worry and ask, because the interviewer is also there to
help you, especially in the led-interviewer cases.
On the other hand, when you get lost, try to segment the problems. If you think it is
impossible to solve it, try to do it smaller and easier.

EXTENDED MATERIALS: if you are interested in more
recommendations for an insider and how to improve some of the
related aspects in a Strategy Consulting Project, I recommend you
[27]
the book: “The McKinsey Mind” .

SUMMARY
· Keep the interviewer posted: thinking out-loud and updating the so/what
for the new information.
· Be calm. Get a plan B. Be prepared for “good/bad cop”
· If you get lost, try to segment the problem or ask for help.
 WHAT TO AVOID

Nowadays, I am preparing many students around the world. After each session, I
try to give them detailed feedback and every two or three months we study and
research which are the general trends about candidates: materials, typical
mistakes, etc. In order to give them a better support.
Following those studies, these are the list of the eight most common mistakes that I
have oftentimes detected. For each one it is explained their common causes and
their related BAD consequences.

WHICH 8 ASPECTS?
First, misunderstand the problem of the problem at the beginning of the case.
· Causes: lack of clarifying question and the verification of the main goals
before starts the analysis process.
· Consequences: solve a different problem than the desired one by the
interviewer.
Second, be framework-oriented rather than hypothesis-oriented. It means trying to
fit the problem to a specific framework, rather than use the Scientific Method -
explained in previous chapters-.
· Causes: I segment it depending on the candidate profile:
a) Business students (Bachelors, MBAs, etc.): they have learned
recently a huge range of frameworks to analyze many situations. They
are confortable using those frameworks. So they try to bring the
problem to that confortable-zones.
b) Non-business students (Engineers, Humanists, etc.): they commonly
don’t have business background and they never heard before how to
deal with case interviews. So they learn a couple of frameworks,
thinking that those ones can solve all the business problems.
· Consequences: as a result of don’t use the Scientific Method: the candidate
is potentially going to show an illogical reasoning (matching a problem
 with an analysis-resolution structure non specifically related to that
problem). So s/he is going to analyze information that is not needed to solve
the specific problem –too much- or is not going not analyze needed aspects
to verify their assumptions -too little -.
Third, do the analysis of the case without prioritization. It means, always your
have analysis alternatives, to don’t use the best and without explaining why.
· Causes: not using the Pareto Principle (80/20) prioritization, in order to
see which aspects have bigger impact in the problem. Also, related with be
framework-oriented, if you always use the same order in your analysis
structures to solve the case (without depending on the context)
· Consequences: it originates to spend too much time in aspects that are not
important for the analysis of the problem and even skipping impactful
aspects.
Fourth, think in silence. It means doing your mental process only inside of you.
· Causes: fear to do a mistake in front of the interviewer and discomfort with
math calculations and shame.
· Consequences: it raises a disconnection and miscommunication with the
interviewer and s/he is unable to understand our mental process.
Fifth, numbers correction/speed. It means doing wrong math calculations or spend
too much time doing it.
· Causes: lack of training and over-stress by the situation.
· Consequences: it generates a high distrust in the candidate from the
interviewer point of view.
Sixth, low insight or business knowledge. It means low added-value comments
during the case -in the step of understand of the problem, during the analysis with
new data, comparisons with the industry, etc.-
· Causes: lack of knowledge about the external client context (political,
economic, social, technological, legal, environmental) and internal client
context (industry, clients profile, etc.)
· Consequences: misunderstanding of what is explaining the interviewer and
it decreases the value the candidate is giving in their views and
recommendations.
Seventh, conclude explaining the process, not the recommendation. It means
explaining how you have achieved your recommendation, rather than the
quantitative/qualitative reasons why you have analysed that is the best one.
· Causes: misunderstanding of what is the important aspect of the conclusion
and what really wants the client (the interviewer)
· Consequences: bad case synthesis and conclusion.
Eighth, argumentation without quantitative justification. It means, during the
conclusion, give a recommendation without quantitative justification.
· Causes: it is produced by not analyzing the quantitative impact of the
problem at the beginning of the case and not asking for numbers during the
analysis.
· Consequences: it decreases the credibility of our recommendation from the
client (interviewer) point of view.

To avoid these eight most frequent mistakes, follow the recommendations in the
previous chapters -each one is explained- and try to understand the reasons of why
you are following those recommendations.

SUMMARY
Problems to avoid:
· Misunderstand of the problem
· Be framework-oriented rather than hypothesis oriented
· Analysis without prioritization
· Think in silence
· Bad numbers correction/speed
· Low insights or business knowledge
· Conclude explaining the process, not the recommendation
· Argumentation without quantitative justification
SECTION THREE: OTHER ASPECTS
 THE SOCIAL PART

In Consulting, human resources department is not only searching for the best
minds. They want great leaders who can bring a team to success and employees
who can work in many different multidisciplinary groups.
Imagine how important is that in general, interviewers have to answer these two
questions:
· Do you like this candidate in your team?
· If you have to wait many hours in the airport, would you like to be with
her/him? (It is also called “the Airport Test”)
To prepare this part, we are going to see three aspects: the Social Aspect, Human
Resources and the Leadership Case.

HOW?
Social Aspect (During)
Now business schools call this aspect “empathy”, but it is very simple: “treat the
interviewer as you want to be treated if you were the interviewer”.
So, there are the ones that we all know: handshake, follow the company’s dress
code, smile (you always are more receptive to someone that is smiling), maintain
the eye contact (to read the interviewer body-language and to project your
assertiveness) and to be calmed. In addition, there are four important reminders.
First of all, you must know all about the company, of course. However, also it is
very important to know information about the interviewer: her profile in LinkedIn,
publications, commons connections, in which industries she is more specialised,
info about her country and some words in her language (if he is not using it), her
office (in which services and industries is specialised), etc. This really impacts in
the interviewer and “preparer the land” for a better evaluation.
Second, at the end of the interview, she will ask if you have any questions. Be
careful, don’t waste it, it is for give the interviewer a good time, to give her time
to enjoy, so ask her a question in which:
· It proves your interest about the company/office/interviewer.
· It shows that you have “done your homework”, I mean, you know all about
the company and her. So you are not going to ask something that you should
have researched previously.
· Something in which the interviewer is very comfortable speaking about.
For example:
· Bad questions: what happened to the employee whose I am going to
substitute? Which is going to be my salary?
· Good questions: now that you see the career in Consulting from the
perspective, what would you recommend me?
In case the interviewer had travelled a lot... I have seen in your profile that
you have a huge international experience, especially in Europe, how was
your experience inside the company in other countries?
Third, in Consulting you are going to work many hours, so you really have to be
passionate with your work, showing your fervour for the cases. They want really
enthusiastic people with the job and cases, because it is going to be what you are
going to do 12-18 hours per day.
And fourth, Consulting Firms don’t give only solutions to clients; they show them
the solution path in a “client-oriented” way. For this reason they want nice people
and they don’t like arrogant people or consultants who get nervous when someone
contradicts them.
Human Resources
Besides problem solving skills, they are also interested in knowing more about
you: your background, your passions, why do you like Consulting, etc. Previously
you had explained it in the CV and the Cover Letter, but they want it to be
explained more detailed in person.
Usually, they choose only two or three questions from this list, but it is important
to be prepared.
· How do you describe yourself?
· What are your weaknesses? Virtues?
· Why did you choose that background (studies, company...)?
· We have many applicants. Why do we have to hire you and not others?
· Why do you want to work with us? Are you in other selection processes?
 · What are your economic expectations?
· Are you willing to travel?
· Why do we have to hire you?
To avoid stress or mistakes, my recommendation as always is: training, training,
training. So, get in front of a mirror or with a friend/sister/brother... and try to
answer them these questions. After that, ask for feedback.
Leadership Case
During the interview, usually at the beginning, the interviewer is going to ask you
(depending on the Firm) a personal case in which you illustrate your Leadership
skills.
A couple of recommendations:
· Get an extreme case in which your leadership skill is really proved (all
applicants are good, so you have to find a real case in which you were
superb, always telling the true)
· Give many details and be prepared to give even more, if they ask (they
want to check that it is really true)

SUMMARY
· Social tests
o Will the interviewer like you in his/her team?
o “Airport test”.
· Social (During)
o Know all about the company and the interviewer.
o Take an advantage of the last question to give to the interviewer a time
to enjoy.
o Show passion for business cases and the company.
o Give solutions “client-oriented”.
· HR Questions: train them before with a friend or a mirror.
· Leadership Case: superb real case with details.


 TYPES & CHANNELS OF INTERVIEWS

Case interviews can be classified in many ways. We are going to see two of them.
The first classification is by the “official leader” during interview, I mean, who is
guiding the interview process: led-interviewer or led-interviewee. So it is going
to affect to the process and the content of the interview
The other one is by the communication channel: in presence or by
videoconference. This is going to impact on how we communicate with the
interviewer.

HOW?
Led-interviewer
This type is used at McKinsey & Company. It is a case more guided by the
interviewer, who is going to divide it into little block problems. For that reason,
s/he can jump though different problems or different branches of schemas.
Two recommendations for this type: first one, be prepared to those changes during
the case. For example, imaging that we are analyzing fixed costs of a company:

Candidate: We have these five fixed costs. I am going to start analyzing
“machinery costs” because: reason A, reason B and reason C.
Interviewer: Ok, I agree, but let’s go to analyze now revenues. Our client now is
thinking to increase their number of customers. Tell me ten 10 ways to
do it.

Second recommendation; make it easier to the interviewer to pass from one
problem to the other. For that, just keep her posted every time you discover a new
insight and telling to her what are the alternatives you have to analyze, which one
you are choosing and why.

Candidate: With this new information -a chart with company information- we
have discovered that the decreasing in net profit of the company it is
caused by the loss of distribution channels because: reason A, reason
B, reason C... Knowing that, if you agree, we are going to analyze why
our distribution channels are decreasing.
Interviewer: Ok, do it.

Led-interviewee
This type is mainly used at The Boston Consulting Group and Bain & Company. It
is a case in which you get more power about the direction of the analysis.
For that reason it is important to always “keep her/him posted” as we have seen in
a previous chapter, be extremely structured and don’t get lost in your analysis.
Channel: in presence
When you are doing a personal interview in presence, you have to keep in mind
the typical recommendations: beginning handshaking, smile, eye contact, etc.
In addition, during the case: the more understandable you are, the better. For that
there is an extra-tip, frequently underestimated: your notes.
Every time you have a piece of paper with a pen in front of you, use it as a “white-
board” to your interviewer. This is going to help you to convert the case in a more
participative one for the interviewer and also because s/he is going to understand
better what you are doing and thinking. For that, of course, keep your notes
structured and clear because that notes are the picture is receiving the interviewer
from you: “internal image”.
Two examples where you can use this tool: first one, if you write an issue-tree to
plan your analysis, you can show her the complete structure. During the analysis,
pointing the step of the process where you are in each moment (the branch of the
issue-tree).
The second example, when you are doing math calculations, you can show her the
process you are doing. It is always better than only words.
Channel: by videoconference
In this channel, there are some missing helps, unlike the presence channel. To
solve that, we are going to see how to find other ways to do the same things with:
eye-contact, numbers and paper show.
First of all, eye-contact. As you know “the first impression matters”. So, if we
want to pass the “Airport Test”, we have to create good feelings with the
interviewer.
Following the 80/20 Principle, the 2 most important moments are the first and the
last minutes of the interview. However, in the videoconference, sometimes the
camera is not directly situated in the TV we are seeing the interviewer. In
consequence, when we are looking to the TV, our camera records us from a
different angle, without looking to the interviewer directly.
So, during the first minutes at the beginning and the last minutes at the end of the
interview, forget the TV and look directly to the camera. Doing that, the
interviewer will see you as you were looking directly to her eyes.
Second, check the numbers. The audio can be configured with low volume, or
even it can have interferences. To avoid doing wrong numbers caused by listening
incorrectly the statement, you can repeat them after you have listened.
And third,
Now, the interviewer doesn’t see your “whiteboard” (the paper), so we can show
to her/him through the camera, if we are not too far and you think is going to help
you to be more understandable,

DAILY LIFE: try to apply all these tips when you are doing a
videoconference with a friend.

SUMMARY
· Interview types:
o Led-interviewer: McKinsey.
o Led-interviewee: BCG, Bain.
· Channel:
o In presence: take advantage of your paper. Show it.
o Videoconference.
§ Eye-contact: to the camera at the begin/end.
§ Check that you have listened the correct numbers.
§ Show your paper.
 TRAIN WITH FRIENDS

As we have seen, the best method to learn case-interview skills is training. For
that, you have a couple of alternatives.

HOW?
First and the best one, try to find some friends inside those firms to test you in a
real case. This is the most real and beneficial training. However, it is very
difficult to know people inside. And in case you know it, they are probably
working near 12-18 hours every day, so they are going to be busy.
Second, try to find friends that have an amazing preparation in business or who
are also preparing these interviews.
If you don’t know anyone preparing the interviews, you can try to get in contact
with other applicants: BEFORE, if you are enough lucky to attend one of these
firms preparation courses for new candidates (typically in the university or in
their corporate offices); and DURING the application recruitment process, when
you are doing the first logical test in paper, that is normally done with more
candidates.
Third, you have enclosed a couple of examples and cases in this book.
And forth, if you want to an extremely detailed feedback from Former Consultants
and Interviewers, I recommend you to train with www.CaseInterviewer.com

HOW TO GIVE FEEDBACK? / CHECK-IN-CASE ©

I was thinking why all the students that we have prepared were so happy with our
service and finally approach successfully their offers.
After asking directly to them, I realized that one of the key factors was the great
feedback because to increase the improvement speed, it is really important to have
a detailed one after each case interview.
During last years, I was developing and testing a new matrix to evaluate students,
in order to help them training by themselves.
This was a result of the top-20 most important aspects that normally these Firms
evaluate and their reasons to discard candidates. Something similar is what the
interviewers use in case interviews.
After this research, I have also tested it with my students and consultants. It is the
“CHECK-IN-CASE ©”, a matrix to train, training.
Each row has to be fulfilled by the answer to the question: “is the candidate
prepared in the aspect XX?”
· Include “1”: if the candidate is doing it well.
· Include “0”: if not.
And also include an example of your punctuation, why s/he is doing well or
wrong.
This detailed example gives more help to the interviewer because you are more
precise and s/he realized better what is needed to improve.

CHECK-IN-CASE ©
ASPECT VAL EXAMPLE

1 Ask for clarifications

2 Synthesize & verify the problem

3 Graph understanding

4 Problem segmentation

5 Structured analysis

6 T hink out-loud

7 Hypothesis-oriented

8 Prioritized analysis

9 Updating insights

10 Creativity

11 Numbers: correction/speed
Market-sizing
12
(explain assumptions)
Numbers:
13
keep them simple

14 Insight & Business Knowledge

15 Synthesis: final recommendation

Argumentation:
16
what + 3 whys

17 Structured & clear notes

Social: Airport Test
18
(Eye-contact, smile…)

19 Social: Calm under stress

20 Quality: In your team?

www.CaseInterviewer.com
 Most of these 20 aspects, we have seen them in previous chapters. But, to avoid
misunderstandings, we are going to see only a couple of them in detail:
12) “Market-sizing - explain assumptions”: is the candidate prepared in
the aspect of doing market-sizings, doing good estimations and explaining
previously the assumptions, if the candidate are using some?
13) “Numbers: keep them simple”: is the candidate prepared in the aspect
of using easy numbers rather than difficult ones for the estimations, in case
the candidate can choose them?
14) “Insight & Business knowledge”: is the candidate prepared in the
aspect of having the needed concepts to understand the problem and giving
added value insights and recommendations?
18) “Social (Airport Test)”: if you have to pass 8 hours in the airport, do
you want to be with her/him?
19) “Social (Calm under stress)”: is the candidate prepared in the aspect
of keeping serenity during the case, especially during difficult questions,
math calculations or when the interviewer is acting as a “bad cop”?
20) “Quality (In your team)”: is the candidate prepared in the aspect of
trust from your personal view? If you were the project leader, do you want
her/him in your team?

SUMMARY
· Try to train cases with: insiders, prepared friends, applicants or with
Former Consultants at www.CaseInterviewer.com
· Feedback:
o Use the CHECK-IN-CASE ©: for train, training.
o Be extremely detailed, with examples.
 PLANNING

As you know, all candidates are commonly overachievers with really high
performance, little details is what makes you different from REALLY get an offer,
compared to ALMOST get an offer.
For that reason, you need a deep preparation that can’t be improvised from one
day to other. This is why we are going to see an overview of the Application
Process, a couple of Recommendations and a Proposed Planning to apply: before,
during and after.

HOW?
The Application Process
Depending on the Consulting Firm you are going to have different steps in the
application process. Depending on the office (city/country) and the position
(seniority), the quantity of interviews is going to change.
However this is the typical structure the Firms follow with little variations
(knowing that each part of the process is eliminatory)
1. One Mathematic/Logical Test:
· This is the first filter in which they want to test your accuracy and
speed with numbers, your logical and critic mind set during less than
one hour.
· It has a different name depending on the company
i. McKinsey & Company: Problem Solving Test (PST)
ii. The Boston Consulting Group: Computer Test
iii. Bain & Company: Multiple Choice Test
iv. Deloitte: Math Test
2. Two rounds of 2 or 3 interviews each one:
· Each interview consists in an introduction, leadership (social aspect)
and business case.
 · The interview duration is between 1 and 2 hours.
· After each interview you will probably have a feedback call.

Success Ratios
The success ratios, I mean, how many candidates get finally an offer, it depends
on the Firm, the country and the department you are applying for.
I have researched those numbers for a couple of offices from different countries.
On average the ratio of success is below 1%. It means, for every 170 candidates -
Curriculum Vitaes received by one firm-, only 1 of the candidates receives the
final job offer.

So, on average, for every 170 candidates, 25 pass to 1st round, 3 of them pass to
2nd round and 1 get the final offer.
The other fact is that offices, to maintain its internal employees pyramid structure
of: analysts, associates, managers, principals and partners –names of the roles
change between firms-, they hire 10 new consultants each year.
Recommendations: Before, During & After
First: BEFORE, as soon as possible, you need to plan your skills (maths, case
interview, synthesis...) and company information (offices, culture...). For this
information it would be helpful to be subscribed to its newsletter.
When you know all what you need, check what you already have and which is the
best method to achieve it. Probably, you will have only a couple of weeks to
prepare it, but knowing that almost all the processes are in February and October,
the earlier you start, the better. The secret: training, training and training.
The week before, as soon as you know the name of the interviewer and the
targeted country, start searching for the information about: her/his profile in
LinkedIn, publications, commons connections, in which industries s/he is more
specialised, info about the country, her/his office (typical services and industries)
The interview day, try to sleep 8 hours that night, get a great breakfast, disconnect
your mobile before, try to arrive 10’ in advance to be calm down, study the place
where you are going to do the interview and get as most info as possible.
Second: DURING the interview, you will have to apply all the techniques that we
are going to see during the next chapters.
Third: AFTER, if you have coincided with other applicants, try to get their mails
to keep in touch because: every time you help other is good and probably both
are going to be interested in training case interviews and if you help him/her and
s/he pass the process, you will have a new contact inside.
Also, it is important to know what the next steps are after each interview and who
to contact -human resources-. After a couple of days of each interview, send a
brief mail to the HR contact to thank the interview. Sometimes they don’t reply,
but they appreciate it and you show your interest.
Finally, if you see they are not telling you after two weeks when to do your next
interview, you can send a very short reminder and in case you have it, use insider
contacts.
Proposed Planning
The personal preparation planning for each candidate recruitment process it
depends on the weaknesses s/he have to solve, and the time s/he has until the
beginning of the process.
However, in the next table is included the tasks needed to do before the interviews
and the estimated time in hours, assuming that you are not an expert in those fields.
In average, you will need near 200 hours of preparation. So working hard every
day, you can be prepared in 1 month approximately.
Note: this planning assumes that you have the background, CV and the
 contact to enter in the recruitment process.





TASKS HO URS

Planning
Analyze what are your weakness and needs

Calculate how many hours you need for each aspect
1
Search information about the company you are applying

Subscribe yourself to their company’s newsletter

HR Case
Prepare & T rain it 4

Case Inte rvie w

T heory: Business – Learn and understand the main concepts: balance sheet,
40
P&L, breakeven…
T heory: Case Interview Skills – Learn and understand the specific skills: read
10
this book, online resources…
T heory & T rain: Numbers Speed/Accuracy – Learn the techniques to
improve your correction and speed of math calculations and train to do 50
it fast
T rain: Case Interview – T rain with partners or online near 40 personal
80
interviews and receive feedback.
Search Information: interviewer/office – T hrough LinkedIn, Google and
1
company’s websites.

In this book is included how to prepare each task. In case you need the basic
business concepts, besides some books I have recommended to extend preparation
in many chapters, I have included an appendix with business vocabulary.
The explained planning is assuming that you have these near 200 hours. In case
you don’t have that time, and you attend the interview in two weeks, I recommend
you to read this book, invest a couple of hours in improving your math
calculations and basic business concepts, and focus on the most important aspect:
train.

SUMMARY
ü The Application Process: 1 Math Test and 2 rounds of 2 or 3 case interviews.
ü Before
o Planning: what you need, what you have and the shortest way to
achieve it.
o Train, train, train.
 o Do research about you interviewer.
ü After
o Keep in touch with other applicants.
o Thanks and next steps?
ü Proposed Planning: near 1 month.

 3 CASES FROM INSIDERS

It is difficult to know people working inside these companies; in consequence, it

is difficult to train a case that is normally used in recruitment.
This is a recompilation of three similar business cases that were used recently in
recruitment processes there and can be useful for you to practise. They are
developed in a Led-interviewer way.
Try to resolve each case by yourself, trying to answer each interview question
without reading the candidate answer and then compare it with yours. Do it, but
knowing that there is not only 1 solution for each problem, but this is the one that I
would choose.

CASE 1: ONLINE SUITS E-COMMERCE

Interviewer Imagine that one of your University classmates comes to you in 2011
and says: I am looking for creating a new business and I would want
to know your opinion. My idea would be to distribute suits online in
the Spanish market.
Candidate If I have understood correctly: you are planning to launch a suits e-
commerce and you are interested in knowing what I think about it.
Isn’t it?
Interviewer Yes.
Candidate Could you give me a couple of seconds to structure my analysis?
Interviewer Sure.
Note 1: remember that we are assuming that we are in a previous year:
2011.
Candidate My initial hypothesis is that quite possibly it is profitable due to be
an innovative technological business with a market that still is in
expansion phase and the growing trend of buying online.
 To test this hypothesis, I would like to pick up some detail of the
company's global vision, to then see the profitability and feasibility of
the business. So I would like to discuss four points: customers,
competitors, product and company.
First of all, customers to better understand who we are selling.
Here I would like to ask 4 questions: what is the number of total
customers that could we approach? Is that market growing, stable or
decreasing? How we would reach those customers (for example, what
would be our distribution channel)? How many suits customers used
to buy?
Interviewer For the number of clients, you could estimate it. The market is
growing 5% each year and we distribute through online advertising.
Each client usually has 3 suits in the wardrobe and renew one each
year.
Note 2: rather to explain literally all the process, to be more
understandable by you -the reader of this book- I am going only to specify
the maths schema (you can learn more of how to do it in the chapter of
Market-Sizing)
Note 3: for each step, if there is any assumption I include it as “A: ”
Candidate
1. Spanish population: ~50 M
A: Our customers are young men, in the white-collar sector between
22 and 42 years olds (before that age, they don’t need a suit; after,
they don’t buy through Internet)

A: Spanish life expectancy is 80 years.

A: The Spanish population structure is going to be treated as a
rectangle -for simplification-, rather than a pyramid. It means that
there is the same number of people of 10 year compared to 60 years.

A: 30% of the Spanish population, between 22-42 years old, in the
white-collar sector use suits.
2. Our customers segment:
a. Our segment is: 42-22 = 20 years
 20/80 = 25% of Spanish Population
25% of 50M = 12,5M
b. Using suits: 30% of 12,5M = 3,75M
3. Each customer have 3 suits and renew 1 each year:
a. 3,75M customers x 1/3 suits/year = ~1,25M suits/year
4. In summary our potential market are ~1,25M suits/year

Candidate Second, I would like to analyze competitors to know the market
share our current competitors have.
Interviewer There are only 4 direct competitors recently created that have 20%
of the market.
Candidate Ok. In consequence, if the potential market is near 1,25M suits/year,
the 20% of that market is owned by those 4 competitors; there is an
80% uncovered, we can approach a market of 1M suits/year.
The third aspect in which I would be interested is the product to
understand better what we want to offer. So 2 questions: besides
suites, would we sell complements as: neckties, cufflinks, pins, or
pants? What would be the price per suit?
Interviewer We only sell suits, although we do not rule out selling add-ins in the
future. About the price, the average is 65€, in addition to 5€ of
transport price.
Candidate Interesting.
So, if we can approach 1M suits/year and we charge 70€ in total
per suit, our potential revenues are 70M €/year.
Finally, I would like to ask you three questions about the company.
Which costs does the company have? We have capital to those costs
or access to credit? How prepared is your team to: create suits and to
distribute the product?
Interviewer We have personal capital. As far as costs, make me an estimation
breakdown. And about the team, I have management knowledge and
experience; I have a great developer with deep experience in online
marketing and sales-force person that have wide range of connections
in fashion retailers.
Candidate Ok. To analyze the costs, I am going to divide them in fixed and
variable.
For that, I would ask you three questions: will we outsource or
produce in home the suits? Will we ship directly to customers or will
we have a warehouse? Have we negotiated and know the expenses?
Note 4: after receiving the answers of the interviewer, we have achieved
the estimation of the next table.
Note 5: they outsource production and warehouse. For that reason we
include renting as variable cost, because we only use it as an
intermediate for some of the sales and it is provisional for reducing first
year costs. Both costs they have negotiated to pay 2 months after sell it.

Fixed
Indirect labour 1K €
Insurance 3K €
Equipment 0K €
Advertisement 12K €
Variables
Renting 6K €
Production
1,25M suits x 30€ = 3,75M €
Shipment 1,25M €

Knowing that we have done revenues and variable cost calculation
assuming the best scenario of getting the 80% of the market share and
assuming 5K€ for startup costs of company creation:
1s year costs: start and fixed 21K €
1st year costs: variables ~ 5M €
1st year revenues 70M €
So, profits segmenting in 2 scenarios during the 1st year:
 This best scenario ~ 65M €
Worst scenario (no sales) - 21K €

Interviewer Now your colleague tells you that have to go home for a dinner, what
would you recommend him?
Candidate My recommendation is to start the business because four reasons:
1. It has a huge market potential: 70M € in revenues.
2. It is a growing market: with a 5% annual increase and currently
80% uncovered demand.
3. It is feasible: as the team has all the key parts for the company
success: management, IT and distribution.
4. It is low risky: as the beginning investment needed to afford the
start and fixed costs are only 21K € that we already have it as
personal capital and even, we can pay suppliers in 60 days.
Interviewer Thanks for your time, we have finished the interview.

Case Classification
Difficulty Level: 3 out of 5
Trained Business Concepts
o Industry: online retailing
o Profitability & Feasibility
o Market-sizing
o Startup costs

CASE 2: INTERNATIONAL BANKING M&A

Interviewer The CIO of a Spanish bank has hired you, because she has received
from the CEO, news about a potential merge offer with a Brazilian
bank. For that she is asking a recommendation of what to do from an
CIO point of view. For that, he is asking to you first to analyze all the
potential IT synergies and problems that could be created from that
action.
Candidate If I understood well, we have a merge offer in the table from a
 Brazilian bank and we have to decide from the CIO point of view. For
that, she is interested in start analyzing pros and cons. It’s ok?
Could you give me a few seconds for structure my mind?
Interviewer Sure.
Candidate Ok. My initial hypothesis is that probably can be interesting caused
by the deep financial crisis in the Spanish market and the huge
expansion of the Brazilian market.
To verify this hypothesis I start analyzing the potential IT synergies
and problems, classifying them in 3 areas: hardware, software and
people. Now I would only do a brainstorm, but we can enter deeper
and analyze some of them, if you prefer.

Pot. Synergies Pot. Problems
· Reduce SERVERS
needs by
Hardware
rescheduling & · HARDWARE
(Servers, Laptops, merging processes Integration
ATMs…) · Increase negotiation
power with hardware
SUPPLIERS
· Increase negotiation · SOFTWARE
Software power with software Integration
SUPPLIERS (processes &
(Servers & Laptops
· Unify WEBSITE to languages)
licenses, Website…)
reduce structural
costs
· IT departments
SPECIALIZATION · CULTURAL
(development, differences
People
maintenance, · TRAINING need
(Depts. Maintenance, training, etc.) for new software
Testing, Training…) · COST-LABOUR and hardware
reduction (more · TIME differences
cheaper in Brazil)
· EXPERTISE sharing

Until now we have seen qualitative good and bad reasons. In
summary:
· Synergies: reduce structural costs, increase negotiation power
with suppliers and expertise increase (by sharing & specialization)
· Problems: implantation cost (including integration, training and
people differences)
 So, now I would propose to analyze numerically these gains and costs
to determine the potential benefit.
Interviewer Agree, but we have hired a new team that is doing that task. Now the
CIO is worried about the problems that are going to be created by
implanting the new software. Especially, how she is going to motivate
employees to be implicated. So my next question is: tell me 10 ways
to motivate them for the new change (you only have 1 minute)
Candidate For that I will group the brainstorming in the process of: before,
during and after, on one of the axis. In the other one with:
psychological and physical needs.

Psychological needs Physical needs
· INFORM them about
the process: the
current problem, the
near solution and the · Reduce
each one need of peoples failure
implication risk by
· ASK for their opinions reducing
Before before to implicate technological
them in the decision risk, preparing
· Analyze the employees them with
point of view: who training,
can be the internal tutorial, etc.
leaders of the change
and who can be wall
of the changes
· With your PERSONAL
EXAMPLE first · Material
· Reinforce good compensations
achievements with (variable on
PUBLIC goals)
During
CONGRATULATIONS ü Department
and wrong holidays
achievement with ü Salary
PERSONAL increase
CORRECTIONS
· REINFORCE
· REINFORCE the the success
After success with a public with a public
congratulations compensation

In summary prepare them before, guide then during the process and
reinforce the success after.

Case Classification
Difficulty Level: 3 out of 5
Trained business concepts:
o Industry: banking
o Department focus: IT
o M&A
o Leadership: motivational structures

CASE 3: FREE SUBSTITUTE THREAT

Interviewer Your client is a US company that gives advice through a printed
magazine about traveling for the premium white-collar sector in
aspects like: best restaurants, hotels, leisure, etc.
They are the market leader with a 35% of market share. Their main
competitor with a 20% market share told them that they want to buy
the company or they will launch the same product of our client, for the
same market, but for free. What they have to do?
Candidate Interesting. If I understood our US client distributes travelling
printed magazines for the white-collar sector. Being the market leader,
their main competitor is giving a challenge: acquisition or substitute
product launch. Is it ok?
Interviewer Yes.
Could I take some time to structure the analysis?
Interviewer Ok.
Candidate To know what is better for us, we have to size the potential gains
and costs for both operations: sell and not sell.
1. Sell (gain or cost) = Buying Pricing – Company Valuation
2. Not sell (gain or cost) = Projected Sales – Current Sales

For that I would ask you 3 questions: what prize the buyer is offering
for the company? What is our company valuation? How is going to
impact reducing our clients and in consequence, our revenues?
Interviewer They are offering 20M$. Tell me how could we value our company
and try to do an estimation of our potential losses, caused by the new
substitute product.
Candidate About the first question: company valuations, I think we could do
valuation by assets, by benchmarking and by income approaches.
Interviewer Ok. We are going to focus on the third option. In the next table we
have the simplified P&L forecast Statement of the next year. What is
the valuation?

REVENUES 30M $
Cost of sales -9M $
Gross profit 21M $
SGA expenses -8M $
Operating profit 13M $
Tax (5%) -0,65M $
PROFIT ~12M $

Candidate Knowing that EBIT (Earnings Before Interest and Tax) is 13M$ and
assuming a Capitalization Rate of 20%, we can calculate it by Income
Capitalization:

Company Valuation = Next Year Cash Flow / C. Rate
Company Valuation = EBIT / Capitalization Rate
Company Valuation = 13M$ / 0,20 = 65M$
So the simplified Company Valuation is 65M $.
This means that if we choose the option 1: to sell, we are going to
loose 45M $, the difference between the Company Valuation (65M $)
and the price the competitor is offering (20M $)
Interviewer In the next table there is the simplified Balance Sheet of the company
for this year. What can you tell me about these 2 last financial
statements?

ASSETS 18M $
Cash 9M $
Accounts receivable 4M $
Equipment 4M $
Stock 1M $

LIABILITIES 4M $
Accounts payable 1M $
Salaries payable 3M $

STOCKHOLDERS EQUITY 14M $
Retained earnings 4M $
Stockholders equity 10M $

From the first table -the P&L Statement-, assuming that the forecast
was done correctly, I could say two things: first, the company is
profitable with ~12M $. Second, it has margins of near 40% that is
very high for this industry.
About the second table -the balance sheet- I would say 2
comments: first, that the company has a good solvency or liquidity
level, because their short term liabilities (accounts payable and
salaries payable) minus short term assets (cash, accounts receivable
and stock) give a positive difference of 10M $. The second aspect is
the financial leverage it seems null, or at least it doesn’t appear any
reference in the statement.
Interviewer Now returning to the second question, in the next table we have
segmented our revenues. There are two types: the ones that come from
price-sensitive customers (5%) and the rest that comes from non-
sensitive customer. How is going to affect our market share and in
consequence our revenues?


Interviewer We are probably loose this 5% revenues of price-sensitive
customers that are paying a high price for something that is going to be
free. In consequence we are going to potentially reduce our revenues
from 30M$ to 28,5M $. In summary we are going to loose 1,5M $.
Interviewer The CEO of the company is coming, what is your recommendation?
Candidate My recommendation is to NOT sell because:
(1) If we do it, we are going to loose additional 43,5M $ because:
· Our loss with selling is -45M $, caused by the variation of the
buying price and the real value of the company.
· Our loss with not selling is only -1,5M $, caused by the decrease
of our customers turned to the substitute product.
(2) Our revenues are coming mainly (95%) from non price-sensitive
customers, who prefers quality and brand, rather than low-price.
(3) We have a profitable company with near 12M $ profits, high
 liquidity level and without risk of financial leverages.
Interviewer Ok. The CEO of the company has followed your recommendation.
But, net profit if going to decrease 5K $. In only 30 seconds, tell me
the maximum ways you know to increase the company revenues.
Candidate As revenue is for each product, the price per product multiplied for
the sold units of each product. I would say as brainstorming:
1. Product diversification (near the core product)
2. Pricing review
3. To increase number of units
a. Customer diversification
i. By the amount of money to buy
ii. By country
b. Do a Joint Venture to cross-sell complementary products
between companies
c. Seasonal Balance: because this business has
seasonality, try to think in other revenue ways during the
rest of the year.
d. Advertisement campaign
e. Increase distribution channels
Case Classification
Difficulty Level: 4 out of 5
Business concepts trained:
o Industry: printed publishing
o Company valuation
o Financial statements: P&L, Balance Sheet
o Substitute product
o White-collar market
o Prize sensitive customers
o Joint Venture
o Cross-selling
o Seasonal balance
SECTION FOUR: APPENDIX
 VOCABULARY

Rather than include a huge range of terms and with complicated definitions, I have
included in this chapter a summary of basic business concepts with simplified
definitions you need to know very well before the interview that frequently
appear.

DEFINITIONS
3C’s
A model to analyze the success factors: customer, competitors and corporation.
4P’s / Marketing Mix
A model used in marketing to determine a product/brand offering including:
product, price, place and promotion.
Airport-Test
A test to analyze the social aspect of a candidate, in which consists of asking the
interviewer: if I was with this person 4 hours waiting in an airport, I might
actually enjoy?
Back-of-the-envelope question
Normally a market-sizing. It is a question that starts with: “imagine that you don’t
have books, Internet, phone or any resources”…
Balance Sheet Statement
A financial statement that summarizes company's assets, liabilities and
shareholders' equity at a specific point in time.
Assets = Liabilities + Shareholders' Equity
BCG Matrix
A model to analyze and classify business units or product lines in 4 categories:
cash cows, dogs, question marks and stars.
Benchmark
A comparison with performance metrics of the industry.
Big-picture
Slang expression to define the overall situation.
Blue-collar
Slang expression referencing a working-class class, historically defined by hourly
rates of pay and manual labour.
Boil the ocean
Slang expression of doing a task unnecessarily difficult.
Brain-teaser
A form of puzzle that requires thought to solve.
Break-even
The balance point between making either a profit or a loss.
Cannibalization
The negative impact of a company's new product launch, on the sales performance
of its existing related products.
Case Interview
A job interview in which the applicant is given a business problem and asked to
resolve it.
Capitalization Rate
A rate of return on an investment property based on the expected income that the
property would generate. It is used to estimate the investor's potential return on
her investment.
Capitalization Rate = Yearly Cash Flow / Company Value
Cash Flow Statement
A financial statement that provides information about all cash inflows and
outflows.
COGS
Cost Of Good Sold. They are the direct costs attributable to the production of the
goods sold by a company.
Company valuation
The process of estimating what the organization is worth.
Core competencies
Main strengths or competitive advantages of an organization.
Cost-benefit analysis
A technique to determine the costs and benefits of a project to analyze its
feasibility.
Cost-based pricing
A pricing strategy in which the product is priced according to their production
cost.
Costs
Expenses of the company.
Crack the case
Slang expression of resolving a Business Case.
Depreciation
It is a method of allocating the cost of a tangible asset over its useful life or a
decrease in an asset's value caused by external conditions.
Distribution channel
The chain of businesses/intermediaries through which a good or service passes
until it reaches the end consumer.
Economies of scale
The cost advantages that enterprises obtain due to size. The cost per unit
decreases, as fixed costs are spread out over more units of output.
Elevator Pitch
Slang term of describing a brief speech that outlines an idea.
Entry barriers
Obstacles that prevent new competitors from easily entering an
industry/area/business.
Fixed costs
A corporate expense that doesn’t vary with products/services volume.
Framework
A structure that helps you organizing your thoughts.
Hypothesis
A proposed explanation for a phenomenon.
Industry
A classification that refers to a group of companies that are related in terms of
their primary business activities.
IPO
Initial Public Offering. It is the first sale of stock by a private company to the
public.
Interest expense
Expense for borrowed money.
JV
Joint Venture. A business arrangement in which two or more parties agree to pool
their resources for the purpose of accomplishing a specific task for a period of
time.
M&A
Merges and Acquisitions. A term to determine the consolidation of companies.
Margin
Difference between selling service/product price and production cost.
Market share
The percentage of an industry or market's total sales that is earned by a particular
company over a period.
Market-sizing
An estimation of a specific market.
MECE Principle
A grouping principle for separating a set of items into subsets that should be
mutually exclusive and collectively exhaustive.
Niche market
The subset of the market on which a specific product is focusing.

Overhead / Operating Expense
Expense of operating a business necessary to the continued functioning of the
business but cannot immediately be associated with the product/service offered.
Pareto Principle / 80-20 Rule
A principle of Vilfredo Pareto that specifies an unequal relationship between
inputs and outputs. It states that, for many phenomena, 80% of consequences stem
from 20% of the causes.
PESTEL
A model to analyze macro-environmental factors including: politic, economic,
social, technological, environmental and legal.
Porter 5 Forces
Model created by Michael Porter to analyze the 5 competitive forces that shape
every industry to identify their weaknesses and strengths:
1. Industry Competition
2. Industry potential new entrants
3. Suppliers power
4. Customers power
5. Substitute products threat
Priced-based costing
A pricing strategy in which the product is priced according to what the market
bears and customers want to pay.
Profit / Net Income / Bottom Line
Total amount of money that a company earns after subtracting their expenses
during a period.
Profit = Revenues - Costs
Profit & Loss Statement / Income Statement
A financial statement that measures a company's financial performance over a
period. It is assessed by giving a summary of its revenues and expenses.
R&D
Research and Development. They are Investigative activities that a business
chooses to conduct with the intention of making a discovery that can either lead to
the development of new products/procedures o improving existing ones.
Revenues / Gross Income / Top Line / Gross Sales / Turnover
Total amount of money that a company earns during a period.
Revenues = Price/Unit * Units
Scientific Method
A method consisting in systematic observation, experiment, testing and
modification of a hypothesis.
Segmentation
Action of split an entity into parts.
SGA
Selling, General and Administrative Expenses.
Substitute
A product/service that satisfies the need of a consumer that another
product/service fulfils.
Supply & Demand
An economic model of price determination in a market. It concludes: in a
competitive market, the unit product price will vary until it settles at a point where
the quantity demanded by consumers (at current price) will equal the quantity
supplied by producers (at current price), resulting in an economic equilibrium for
price and quantity.
SWOT
A model to identify the Strengths, Weaknesses, Opportunities and Threats of an
organization.
Unit cost
The expense incurred by a company to produce, store and sell one unit of a
particular product.
Value Chain
A model of how businesses receive raw materials as input, add value to them
processes, and sell finished products to customers.
Variable Cost
Corporate expense that varies with products/services volume.
VC
Venture Capital. It is money provided by investors to startup firms and small
businesses with perceived long-term growth potential.
Vertical market
A group of companies that serve each other's specialized needs and that don’t
serve a broader market.
White-collar
Slang expression referencing a working class that is known for earning high
average salaries and not performing manual labour at their jobs.

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