Consulting Case

Consulting Case
Market Sizing
Contents
Will People Buy Ice Cream Online?.......................................................................................................1
Esurance Starts Car Insurance Comparison Site in Germany...........................................................3
Delivery Hero Raises $110M in New Round of Funding.....................................................................6
24 Hour Fitness Considers Entry into UK Market.................................................................................8
Scientist Invents Magic Eye Drops That Cure Eye Problems...........................................................10
Advent International Considers Buying Bike Helmet Company.......................................................13
Allergan to Launch Botox Product for Migraine Treatment...............................................................15
Toyota Develops Next-Gen Hydrogen Fueled Car Engine...............................................................17
Monsanto to Enter Artificial Turf Business..........................................................................................19
Schering-Plough to Re-evaluate Drug Development Portfolio.........................................................21
What is the Market Size for Internet Routers in U.S.?.......................................................................25
Mexican Billionaire Carlos Slim to Fund More Universities...............................................................26
PE Firm Austin Ventures to Invest in Dish Plate Startup...................................................................29
C Enters U.S. Market by Lending Production Capacity.....................................................................32
How Big is the U.S. Market Size for Band-Aids?................................................................................35
What is the Market Size for Gas Tanker Trailers?.............................................................................36
Becton Dickinson to Launch Sleep Enhancing Device......................................................................38
Ritz-Carlton Hotel to Install Mini-bars in Guest Rooms.....................................................................40
Kmart to Place Kodak Picture Kiosks in Stores..................................................................................43
USG Interiors Not to Use Excess Capacity for Door Making............................................................45
Is It a Good Idea to Open a Classical Music Radio Station in Philly?.............................................47
What is the Market Size of Pianos in the United States?..................................................................50
Fosun to Sell 80% of Its Aluminum Alloy Wheels to U.S...................................................................52
P.F. Chang’s to Open 3 More Restaurants in Houston.....................................................................54
California-Based Republic ITS to Expand into Manhattan................................................................58
Capital One Evaluates Credit Card Market of Mexico.......................................................................61
How Much Money Do You Need to Retire from Consulting?............................................................64
How Many TV Sets Are Sold in the UK Each Year?..........................................................................65
Barclaycard Analyzes the Future of UK Credit Card Industry...........................................................67
W.S. Darley Considers Adding Capacity for Fire Truck Pump.........................................................71
U.S. Bank Eyes Emerging Markets for Growth Overseas.................................................................72
Philips Electronics to Divest from Home Solar Technology..............................................................73
How Many Razor-Blades are Sold in US Every Year?......................................................................75
What is US Annual Market Size for Car Tires?...................................................................................76
How Many Pairs of Boxers Are Sold in U.S. Each Year?..................................................................77
Finnish Calendar Publisher WSOY Eyes Danish Market..................................................................79
How Many Hotel-sized Bottles of Shampoo & Conditioner?.............................................................81
Will You Take Over a McDonald’s Restaurant in Frankfurt?............................................................83
Azul Airlines Aim to Add One More Passenger Per Flight................................................................84
How Many Cups of Coffee Are Sold in Hanover Per Day?...............................................................87
Why are Sinusitis Drug Sales Different Between US & Canada?....................................................88
Expedia Evaluates Market Potential of Trip Add-On Product...........................................................89
How Many Skis were Sold in U.S. Last Year?....................................................................................93
How Many Bubble Gums Chewed in a Day in US?...........................................................................94
Hollymatic Burger Machines Expand into China................................................................................94
How Many Cell Phones are Sold in U.S. in a Year?..........................................................................97
What is US Annual Demand for Artificial Grass Turf?.......................................................................99
Luxury Fashion House Chanel to Enter China Market....................................................................100
What is Worldwide Demand-Supply for Consulting Jobs................................................................102
What is US Annual Demand for AA Batteries?.................................................................................104
How Many Cups of Coffee Are Sold in US Every Year?.................................................................105
Eli Lilly Develop New Eyedrops That Cure Myopia..........................................................................106
How Many Timberland Hiking Boots Are Sold to Generation X?...................................................107
Law Firm Baker & McKenzie to Buy 800 Phone Number................................................................108
How Much Tea is There in China?.....................................................................................................110
How Many Mazda Dealers Are There in the U.S.?..........................................................................111
American Express May Drop Credit Card Annual Fee....................................................................112
CNH Forecast World Demand for Agricultural Machinery...............................................................113
What is the Percentage of Disposable Diaper in US?.....................................................................115
How Many Stories in Trump Tower Chicago?..................................................................................115
How Many Piano Tuners Are There in Chicago?.............................................................................116
BP Assesses Operation Status of Machinery Division....................................................................117
Condé Nast Publications to Enter Men’s Magazines Business......................................................118
How to Assess World Demand for Knitting Machines.....................................................................119
What is the Market Size for Golf Balls in the U.S.?..........................................................................120
Pizza Hut Entering Home Pizza Delivery Business in Paris...........................................................121
How to Estimate the Size of Chewing Gum Market?.......................................................................122
How Many Checking Accounts in the United States?......................................................................123
Will People Buy Ice Cream Online?

Case Type: new business; market sizing.
Consulting Firm: McKinsey & Company first round full time job interview.
Industry Coverage: food & beverages; startups; information technology (IT).
Case Interview Question #00781: Our client is a fresh MBA just graduated from business school.
Encouraged by the recent technology and Internet startups boom, and also, to make the world a better
place, the client has just founded a startup company together with two business school
classmates. Their business plan is very simple: to start an online ice cream
delivery shop.
Similar to other online food ordering companies like GrubHub, Seamless, Delivery Hero, Just-Eat,
FoodPanda, etc, the client’s startup works like this: They will buy an ice cream store first, then build a
website which would list different kinds of ice cream they sell, as well as menus from local ice cream
shops. The users would then use the website to place orders online. The client would then be responsible
for arranging the ice cream delivery, either from the client’s own store or from local ice cream shops. The
client would generate revenues by charging a small commission fee to ice cream shops for every
customer order from their website.
Is this a good idea? Why or why not?
Possible Answer:
Question 1: What factors should you consider with this type of business?
Suggested Solution:
1. Internal Factors/ Value Chain
a. Supplier Types
 Local ice cream shops
 Third party bulk ice cream distributors (wholesalers)
 Buy ice cream at store and store in freezer for internally controlled distribution
b. Distribution
 Rely on local shops (similar to online florists)

 In company owned freezer trucks
2. External factors/ Market
a. Advertising
 Where to advertise? Bonus for suggesting real potential options like Google AdSense
 Which markets and segments to target?
b. Delivery Methods
 Rely on local ice cream shops {similar to online florists)

 In company owned freezer trucks
c. Competitors
 Market Size (will people order ice cream online, and why?)
 Grocery stores and other brick and mortar ice cream shops
d. Seasonality
 Can you achieve sales year round or only during hotter months
 Changing ice cream flavors, and therefore inventory, for the time of the year.
Question 2: Estimate the market size (in $) in the United States for online ice cream delivery (averaged
over the year).
Suggested Solution:
1. Determine the population of the country (To be provided if asked: approximately 300 million)
2. Calculate the portion of population that eats ice cream
 There area many types of ice cream and it is a popular food item
 Roughly half of the population eats ice cream regularly, and it is evenly distributed across income,
age, and gender
 50% * 300M = 150 million
3. Find the part of population that would be willing to order ice cream online
 20-30 year old population is more likely to order online, especially for gifts
 Average life expectancy is around 80 years, so percentage of population in the target age range
would be (30-20)/80 = 12.5%
 12.5% * 150M = 18.75 million
 Percentage of this age group population that would order online is 20%
 20% * 18.75M = 3.75 million
 To simplify calculation, let’s say 4 million
4. Estimate the average size of the order (price per order) to find the total market size (note: exact
numbers are not important, provide them if asked)
 Customers are likely to order larger quantities if ordering online due to delivery costs
 Average price of ice cream is around $3 per pint (to be provided if asked)
 Average online order is 2 pints, giving an average order of $6
 Average person orders once or twice a year
 4 million * $6 * 2 = $48 million
Question 3: Is this an attractive business?
Suggested Solution:
The short answer is no. Main reasons are:
 Market size is too small: only $48 million in total addressable market
 Business model still unproved: will people really order ice cream online?
 Competition from other brick and mortar ice cream shops.
Esurance Starts Car Insurance Comparison Site in Germany
Consulting Firm: Boston Consulting Group (BCG) first round full time job interview.
Industry Coverage: property & casualty insurance; information technology (IT).
Case Interview Question #00774: Your client Esurance Insurance Services, Inc. is an American auto
insurance provider. The company, which is a wholly owned subsidiary of Allstate (NYSE: ALL), sells car
insurance direct to consumers online and over the phone, offering services to nearly 90
percent of the U.S. population in 40 states. Its primary competitors are other
direct personal auto writers such as GEICO and Progressive.
In order to diversify its business, the CEO of Esurance wants to create an online shopping and
comparison website for car insurance that connects car insurance agents with customers virtually. In this
website, car insurance agents could pay a fee to be listed on the website. When customers are shopping
for car insurance on the website, the site would compare quotes from the various agents for the customer
for free. The customer would then contact his or her preferred agent directly based on the price
comparison.
Does this sound like a profitable business for Esurance?
Possible Answer:
Question #1: What factors could affect the profitability of this car insurance comparison website?
Suggested Solution:
Profitability can be analyzed in terms of revenues and costs:
Revenue factors may be:
 Ability to attain large volume of customers and variety of insurance provides to participate
 Ease of use of website
 Marketing/advertising efforts to consumer
 Need for this product, revenue structure of the website (whether agents pay a flat fee, per
customer they win, etc.)
Cost factors could be:
 Maintenance of the website

 Marketing costs.
Question #2: What is the market size for this business segment if this website is operated in Germany?
Additional Information: to be provided if asked
10% people change insurance companies yearly on average. This is includes people who
i) buy new insurance
ii) change their insurance
iii) no longer have insurance.
It is unlikely that car ownership is growing in a well developed market like Germany.
Yearly car insurance fee in Germany is around 1400 Euros on average.
Extra points to the interviewee for mentioning different types of car insurance exist.
Suggested Solution:
1. Size of German population: 80 million (interviewee should know, otherwise provide)
2. Number of people that drive cars (not to be provided to interviewee; interviewee should estimate)
a. Assume average life expectancy is 80
b. Segment market by urban vs. rural:
 Urban: (60 million people)

 Rural: (20 million people)
c. Segment into families, 2 people per family: 30 million urban families, 10 million rural families.
d. Car ownership per family: 100% in rural, 70% urban

3. Number of cars in Germany = (30 million * 70% + 10 million * 100%) = (21 million + 10 million) = 31
million
4. Population who will shop for car insurance online:
 Assume people under age 20 don’t own cars

 Age 20 to 50: 90% willing to shop online for car insurance
 Age 50 to 80: none buy online (older generation)
Total = 90% of 3/8 of population will shop for car insurance online
5. People who change car insurance each year
31 million * 10% = 3.1 million
6. People who would be willing to buy car insurance online
3.1 million * (3/8) * 90% = 1 million
Revenue = 1 million * 1,400 Euro = approximately 1.4 billion Euro
Conclusion: Online car insurance market in Germany is approximately 1.4 billion Euro.
Question #3: How much could the Esurance website charge agents for listing ads?
Additional Information: to be provided if asked
 Agents pay based on how many searches customers make on the Esurance website.
 Only 10% of car insurance searches actually result in a purchase for each agent.
Suggested Solution:
Average revenue per customer search = 1400 Euro * 10% convertion rate = 140 Euro
Fee to agent per search should be less than the revenue insurance company receives per customer
search (possibly 1-5% is reasonable), therefore, fee charged to agent should be = 140 Euro * 5% = 7
Euro per customer search (the interviewee could suggest from 1.5 Euro to 7 Euro)
Excellent Response:
Suggest different pricing fees based on cost per click or even cost per displaying ad (not even for clicks).
Question #4: Please advise the Esurance CEO whether this is a profitable business.
Suggested Solution:
Yes, this is a profitable business because potential revenues are greater than costs.
Revenues:
 Large insurance market in Germany
 Good margins: 1-5% fee to insurance
Costs:
 Capital requirements are low

 Marketing costs are moderate
 Website maintenance costs are low
Potential Risks: need for extensive marketing, potentially new business model for consumers, potential for
new entrants who can easily copy the business model.
Delivery Hero Raises $110M in New Round of Funding

Industry Coverage: food & beverages; startups; information technology (IT).
Case Interview Question #00773: Our client is Delivery Hero Holding GmbH, a small Internet startup
company based in Berlin, Germany. The founders of the startup would like to start a new business in
Germany: providing online food and beverage ordering service. You have been hired to
evaluate the feasibility of the idea.

The Delivery Hero company would host a website which would list local restaurants with delivery services.
The users would then use the Delivery Hero website to find restaurants in their area, usually filtered by
cuisine and browse menus, read reviews and other information like the restaurant operating times and
order takeaway food and beverage online. Payments can then be made by credit card, PayPal or with
cash on delivery. The restaurants would then be responsible for arranging their own delivery service. The
client Delivery Hero would attain revenues by charging a small commission fee to restaurants for every
customer order from their website.
Is this an attractive business? Why or why not?
Possible Answer:
Question #1: Estimate the market size of an online foods delivery service in Germany.
Additional Information: (only provide if asked)
Population of Germany is approximately 80 million as of 2014.

Average price of each online food purchase: 12 Euro per order.
% Population that buys food online (segment by age, location distribution)

 Age 0-10: approx. 0% (no money or capability to buy online)
 Age 10-20: approx. 20%, usage: 1 order every month
 Age 20-30: approx. 30%, usage: 1 order every 2 months
 Age 60-80: approx. 0%
Suggested Solution:
a. Segmentation of population by age
 Age 0-10: approx. 10 million

b. Market Size Calculation
 Age 10-20 = 10M * 0.2 * €12 * 12 orders/year = €288M

Total = €288M + €216M + €288M + €192M = €984M
Excellent response:
An outstanding interviewee should note that the German population distribution has a disproportionately
higher amount of elderly, segmenting population in more detail, % that orders online from each age
bracket, adding considerations such as German economy (current vs. future market potential).
Question #2: What are the key success factors to gaining market share in this business?
Suggested Solution:
 Technical ability to scale the website to millions of users.
 Advertising: online vs. print, social media advertising campaign.
 Discounts/promotions: discount for first time users, free delivery, loyalty points.
 Satisfaction guarantee: money back if not satisfied (risks of this).
 Purchase Competitor: gain market share quickly.
 Ease of use of the website and possibility for online payment.
Question #3: Is this an attractive business?
Suggested Solution:
 Low maintenance costs, large marketing costs.
 Consider whether the client has strong core competencies for this business model.
 Market is not saturated but also not growing rapidly.
 Competitors: what is current competition like? – Some small players are already in this market.
 Business model is easy to copy.
 The client will not be able to have first mover advantage, although they can try to quickly get a
large market following to deter competitors.
Conclusion:
No, this is not an attractive business idea because:
 Business model is easy to copy.

 Acquiring a large enough distribution network is difficult, as online food ordering is not yet popular
in German culture.
 Small market: less than €1 billion in total addressable market (TAM).
 Large marketing budget would be necessary to gain market share.
24 Hour Fitness Considers Entry into UK Market
Case Type: market entry, new market; market sizing.
Industry Coverage: sports, leisure & recreation.
Case Interview Question #00772: Your client “24 Hour Fitness” is a privately owned and operated gym
and fitness center chain in the United States. The company currently has over 4 million gym members
and more than 420 clubs in 18 states. The corporate office is located in San Ramon, California and
a processing center is located in Carlsbad, California. Its major competitors in

the U.S. are Anytime Fitness, Gold’s Gym, Aspen Fitness, and LA Fitness.
To further grow their business, the CEO of 24 Hour Fitness wants to create an expansion plan in the U.K.
According to a market research firm, the total market size of gym membership service in the U.K. is
estimated to be approximately ￡2 billion per year. There are typically 2 types of gym segments in the
U.K.: basic, premium. The client 24 Hour Fitness is considering targeting either segment. Is opening gyms
in the U.K. a good idea for the client?
Possible Answer:
Question #1: What approach would you recommend to your client regarding entering the U.K. market?
Suggested Solution:
 Gain understanding of the UK market, as it is significantly different from U.S. market.
 Use synergies from the US market, such as: gym operations strategies, potentially using the
same gym equipment suppliers or marketing firm, etc.
 Find excellent location: easy access and high visibility to target customers.
 Minimize capital investment and maintenance costs to increase ROI.
 Clearly define the segment to target and then utilize specific marketing strategies geared towards
the target segment in UK.
 In an already saturated market, it’s key to offer a differentiated product, find untapped market
space.
Question #2: Is ￡2 billion per year an appropriate target market size for the gym segment (premium and
basic) in the UK?
Suggested Solution:
Segment the total population of 64 million (population of the UK in 2014) as follows:
1. Segment by age (assume lifespan of 0-80, and population is uniformly distributed), Calculate % of each
segment that would be premium members (fact: 12% of total UK population are members of gym):
 0 – 10: 8 million, 0% premium and basic

 11 – 20: 8 million, 1% premium, 8% basic
2. Calculate the number of gym members of each segment:
 Premium: (8 M * 0.01) + (48 M * 0.02) = 1.04M

 Basic: (8 M * 0.08) + (24 M * 0.13) + (24 M * 0.1) = 6.16M
3. Calculate average gym revenue:
 Premium membership: 60￡/month = 720￡/year

 Basic membership: 25￡/month = 300￡/year
4. Calculate total revenue:
 Premium: 1.04M * 720￡ = ￡749 M

 Basic: 6.16M * 300￡ = ￡1848 M
Total: ￡749 M + ￡1848 M = ￡2.6 Billion
Question #3: Is opening gyms in the U.K. an attractive option for the client?
Suggested Solution:
 Market size is large, however the client needs many physical locations to reach this market (high
costs).
 Highly capital intensive industry (considering the client is opening up their own gym business and
not franchise gym).
 Location of gyms is key to attracting customers.
 Opportunity Cost: good ROI on the investment funds? May be better to use the investment funds
to start another type of business, such as shopping mall, etc.
 Competition: U.K. gym market is highly saturated.
 Brand: the client’s brand is not known in UK and brand awareness must be established.
Conclusion:
No, opening gyms in the UK is not a good idea for the client. Although the market is large, it is already
highly saturated. In addition, there are few synergies that the company can transfer from the U.S. to the
UK market. The client has a disadvantage to current UK market players.
Scientist Invents Magic Eye Drops That Cure Eye Problems

Case Type: new product; pricing & valuation; market sizing.
Consulting Firm: Bain & Company first round full time job interview.
Industry Coverage: Healthcare: Pharmaceutical, Biotech & Life Sciences.
Case Interview Questions #00756: For this case, our client is Dr. Rothman. Dr. Rothman works as a
research scientist at the National Institutes of Health (NIH), a major biomedical research facility located in
Bethesda, Maryland, USA. Recently, Dr. Rothman has invented an amazing new product for eye
conditions.
Long story short, the other day Dr. Rothman just accidentally discovered the chemical formula for Magic
Eye Drops in his research lab. One drop in each eye will cure short- or long-sightedness in any patient
with eye problems. But Dr. Rothman is a research scientist, not a businessman, and he has come to our
consulting firm because he wants to sell the intellectual property rights to his Magic Eye Drops to a large
pharmaceutical company that will have the resources to commercialize his invention. So, what should his
asking price be?
Additional Information: (provided upon request)
Dr. Rothman has secured an exclusive, worldwide patent for the next 20 years. After the patent expires,
generic versions will quickly be developed.
Obstacles to regulatory approval are not foreseen.
The Magic Eye Drops have no known side effects or risks.
Give the candidate bonus points for identifying laser surgery as the closest competitor, but tell him/her to
focus only on corrective lenses (glasses and contacts) as competitors for the purposes of this case.
Direct the candidate to focus only on the U.S. market.
Possible Answer:
1. Suggested Framework
The interviewer or case giver should allow the candidate to build a framework. Help the candidate
understand that this is a pricing & valuation case.
The candidate will develop a structure to estimate the Net Present Value (NPV) of future expected
revenues and costs.
To develop revenue projections, the candidate will have to estimate the market size and the optimal price.
An illustrative example of market sizing is given in the next section 2 “Market Sizing” and an estimate of
revenue, including pricing, is given in section 3 “Pricing & Revenue”.
Make the candidate brainstorm cost drivers. Once the candidate has listed all cost drivers, provide
him/her with the figures listed on slide 4.
2. Market Sizing
Age
Group Population Rate of Sight Problems Rate of Adoption Market Size
0-15 50M 20% 10% 1M
16-30 50M 30% 50% 7.5M
31-40 50M 40% 50% 10M
41-60 50M 50% 50% 12.5M
61-75 50M 60% 40% 12M
75+ 50M 75% 20% 7.5M
Total ~50M
Give the candidate bonus points for thoughtful and creative explanations of the assumed rate of sight
problems and assumed rate of adoption within each segment (e.g., adoption among young and old
patients will be lower because parents will be unwilling to test out a new technology on young children
whose eyes are still changing and elderly patients with fewer years to live will realize fewer years of
savings from not having to purchase new corrective lenses).
Give the candidate bonus points for recognizing that the market will grow over the course of the 20 year
patent. If the candidate raises this point, provide a projected annual growth rate of 3.5%. By the rule of 70,
this means that the market will double before the patent expires, resulting in a true market estimate of
100M consumers.
3. Pricing & Revenue
The candidate should weigh different pricing strategies: competitive, cost based and value based.
One pricing strategy is to use competitive pricing, using corrective lenses as the relevant competition.
Based on personal experience, general knowledge or interviewer-provided information, the candidate
should assume an annual cost of corrective lenses at about $200.
Revenue over the life of the patent (20 years) can be calculated as shown below:
 Market Size * Annual Value of Magic Eye Drops * Patent Life = Total Revenue
 ~100M * $200 * 20 years = $400B
The candidate may suggest factors that alter the price point – such as convenience (suggesting a higher
price point) and riskiness (suggesting a lower price point). The interviewer should accept reasonable
alterations.
The solution’s assumption of 20 years of revenue assumes that all customers will purchase as soon as
the product comes on the market. The candidate may reasonably adjust the years of revenue downward
to account for some customers waiting several years before purchasing.
Make sure that the candidate understands that we will disregard discount rates for the purposes of this
case. In other words, assume a discount rate of 0%.
4. Costs
Exhibit 1: List of Cost Driver
Costs Driver Cost
Management/Overhea
d 33% of operating costs
Operating Costs
Marketing $150M per year for first 10 years, $50M per year for last 10 years
Production $20 per drop
Distribution $100M per year
Costs Calculations
Costs Driver Cost Total
Marketing $150M * 10 years + $50M * 10 years $2B
Production $20 per drop * 2 eyes * 50M customers $2B

Distribution $100M * 20 years $2B
Operating Costs $6B
Management/Overhea
d 33% * $6B $2B
Total $8B
5. Conclusion
A. Recommendation
Dr. Rothman should put his invention up for sale at ~ $392B ($400B in Revenues – $8B in Costs). Sales
could however continue even after expiry of the patent.
This solution has been simplified by assuming a discount rate of zero, because calculating the NPV for
this case by hand would be overly complicated.
B. Next Steps
 Solicit buyers: Focus on strategic acquirers

 Attempt to start a bidding war
 Speak at conferences extolling the value
Advent International Considers Buying Bike Helmet Company
Case Type: private equity (PE), investment; market sizing.
Consulting Firm: ZS Associates first round full time job interview.
Industry Coverage: sports, leisure & recreation.
Case Interview Question #00729: Your client Advent International is an American private equity firm
focused on buyouts of companies in Western and Central Europe, North America, Latin America and
Asia. The firm focuses on international buyouts, growth and strategic restructuring in five core sectors.
Originally founded in Boston, Massachusetts, Advent currently operates from

offices in 16 countries, with affiliates in a further eight countries and employs over 170 investment
professionals.
When making a decision about whether or not to purchase a company, the client looks at projected profits
of the target company 3-5 years out.
 If profits are flat or up, buy
 If profits are down, do not buy
Recently, the client is considering purchasing a firm that makes bike helmets and bike accessories; you
have been hired to determine whether or not they should purchase this firm. How would you approach
this case?
Additional Information: (Provide the following information if requested by interviewee)
 The target company only sells its products in the U.S.
 Revenue mix from the two product lines (bike helmets and bike accessories) is 50/50.
 The target company currently has 70% market share in the U.S.
 The target company has good relationships with suppliers.
 The products are distributed mainly through specialty stores.
If the candidate asks “Is the overall bike helmet market growing?”, ask them “what do you think?”, and
make them justify their answer. Ask them to provide you with a percentage growth or shrinking (range is
OK)
Example of an answer, but obviously there are many: “I believe the bike helmet market is growing
because people are exercising more because of health concerns, gas prices are increasing rapidly so
more people are using bikes as transportation (I had this case during the $4/gallon gas days), and Lance
Armstrong has revived an interest in the sport.”
Another sample answer: “When I was growing up, hardly anyone wore bike helmets, but now with
increased government regulation and safety concerns, almost all bikers wear helmets. Therefore, we can
think about growth in the bike helmet industry in relation to growth in the interest in biking.
Possible Answer:
1. Areas of Discussion
At some appropriate point during the interview, the interviewer should ask the candidate to determine the
annual revenue of the bike helmet company (market sizing). A good trick on this part is to realize that
since the revenue mix is 50/50, they only have to size one of the two product lines (bike helmets and bike
accessories), and then double their answer at the end. It is easier to size the bike helmets market,
because accessories is a very broad category.
There is no single “right way” to size the bike helmets market, but here are some considerations:
 Age
 Income
 Urban/rural areas
 Bike helmet laws
 Delivery
2. Analysis
The candidate should first size the entire U.S. market for bike helmets, and then take 70% of the total
market since they have 70% market share.
Sample Answer, but estimates and factors for consideration will vary:
 Three biker segments: adult cycling enthusiast, casual biker, under 18 teen biker.
 Assume 100 million households in the U.S., 50% have children with average 2 children per
household, 75% of children ride bicycles, therefore: 75M Under 18 customers.
 Assume 5% of adults are Cycling Enthusiasts, or 5M.
 Assume 20% of adults are Casual Bikers, or 20M.
 Assume a bike helmet will last for 5 years, so every year 1/5 of bikers’ helmets get replaced.
 Total market size: (75M + 5M + 20M) * (1/5) = 20M
The candidate must be able to justify the numbers through each step of the process.
Question #2: should the client Advent International purchase the bike helmet company or not?
Additional information:
 Competition: 20% of players are at the low end.
 Most new entrants into the market have been at the high-end of the market.
 If the candidate asks about new entrants, ask them what they think. Few barriers to entry.
The bike helmet company was originally in the high-end of the market, but is now in the mass market.
 Different product lines for high-end and mass market.

 Mass merchandizing makes about 60% of the market and bike shops make up about 40%
If the candidate asks where the company distributes its product, put the question back on them: “Where
do you think?”
 Specialty stores, Sports Authority, Wal-Mart, Target

Then ask “what are the risks of selling at Wal-Mart?”
 Squeezed on the prices

What is more profitable, selling to the mass market or in specialty stores?
 Selling to the mass market is more profitable because specialty stores have higher distribution
costs.
Recommended Conclusion
This case is really designed to see how the interviewee thinks. The candidate needs to make
assumptions and justify them throughout. The interviewer should push back on each assumption. In the
end, the recommendation should be to not buy the company because the lower end of the bike helmet
industry is most profitable, but has little product differentiation.
Allergan to Launch Botox Product for Migraine Treatment
Case Type: new product; market sizing.
Consulting Firm: IMS Consulting Group first round summer internship job interview.
Industry Coverage: healthcare: pharmaceutical, biotech, life sciences.
Case Interview Question #00726: Your client is Allergan, Inc. (NYSE: AGN), a global specialty
pharmaceutical company focusing on five areas: ophthalmic pharmaceuticals, dermatology,
neuroscience, urology and cosmetics. The company produces neurologic product, Botox, which is used
around the world to treat a variety of debilitating disorders associated with
muscle overactivity. In cosmetic applications, a Botox injection can be used to prevent development of
wrinkles by paralyzing facial muscles.
Migraine is a chronic neurological disorder characterized by recurrent moderate to severe headaches
often in association with a number of autonomic nervous system symptoms. Typically the headache
affects one half of the head, is pulsating in nature, and lasting from 2 to 72 hours. Associated symptoms
may include nausea, vomiting, and sensitivity to light, sound, or smell.
Recently, your client Allergan is considering expanding to the migraine market and has already begun
clinical trials in this arena. Their product is scheduled to launch in 2015. What is your estimate for the size
of the migraine market and the potential revenue?
Additional Information:
The product is given in the form of an injection every 2 months. It offers similar efficacy compared to
existing options but without any side effects. When given for migraines it does have some of the added
skin care benefits it is commonly associated with.
Possible Answer:
1. Analysis
Sizing the market:
 Population
 % of population diagnosed with migraines
 % treated with OTC (over the counter) vs. prescription medications
 % that have severe migraines
 Expected share for the product
Because the product requires an injection versus the current oral medication it requires more hassle and
thus will most likely be reserved for the most severe of patients. When moving to revenue the interviewee
should discuss potential issues involved in pricing such as:
 Insurance coverage
 Patients’ willingness to pay more than they currently are
 Inconvenience of MD visits for injections
 Skin care benefits from Botox
 The market leader in traditional prescription migraine treatments, Immitrex, lost patent protection
in last December and thus there will be very cheap alternatives available in the market. This should
be mostly bonus points but the interviewee could raise the issue of generic competition for existing
products or ask if generics exist.
Ultimately, the interviewer states that the client is going to price the drug at $200 per injection. Therefore
the therapy costs $1,200 per year and that is multiplied by the expected number of patients that will
receive Botox for migraines to get the annual revenue estimate.
Additional Question:
How might the launch of Botox for migraines affect their existing business in plastic surgery and should
the client launch under a separate brand name in the migraine market?
Possible Answer:
Launching under the same brand name Botox could cause a public outcry over the discrepancy in price
between the migraine version and the plastic surgery version given they are the identical drug. Also, it
could cause some patients to use the migraine form instead of buying the plastic surgery version, thus
cannibalizing some of the existing sales of Botox. On the other hand, keeping the Botox brand name
brings with it the strong reputation Botox has already built through its current use.
Launching under another brand name would allow the client to more effectively differentiate between the
two uses when advertising the product to consumers and physicians. It would also likely lessen the
backlash from the differential pricing.
Toyota Develops Next-Gen Hydrogen Fueled Car Engine

Case Type: new product, new technology; market sizing.
Consulting Firm: Hitachi Consulting first round full time job interview.
Industry Coverage: automotive, motor vehicles; energy industry.
Case Interview Question #00698: Toyota Motor Engineering & Manufacturing North America, Inc.
(TEMA) is an automobile manufacturing and research and development company owned by Japanese
automaker Toyota Motor Corp. (NYSE: TM). It is the result of a merger of Toyota Motor Manufacturing
North America (TMMNA) and Toyota Technical Center, U.S.A. (TTC) in April
2006, and has its headquarters at the former TMMNA headquarters in Erlanger, Kentucky.
You are an engineer working for TEMA. You have just invented a new engine that is fueled completely by
water. The new engine works like this: water-splitting catalysts first separate water into oxygen and
hydrogen gas, then the energy released by the combustion of oxygen and hydrogen is used to power
the engine just like a regular gas fueled internal combustion engine.
With the new engine, what would you do now?
1. Product
 Water-splitting catalysts can be easily produced with negligible costs.
 There are no differences in the total production costs of a regular gas fueled engine and a water
fueled engine.
 There are no differences in engine performance.
2. Infrastructure
 Gas station can be switched to water easily.

 Water costs are minimal.
 How would this impact gas station business models? What are the implications for sale to a
specific company or industry wide? Consider network effects.
Possible Answer:
So, what options do you have?
1. Start a firm and manufacture engines for vehicles (cars, boats, airplanes, etc). Think about:
 Access to capital
 Management capabilities
2. Sell the technology/patent. Things to consider:
A. Sell the technology/patent to whom? Specific industry:
 car vs. airplanes vs. boats, etc.

 Military vs. private.
B. How would you price the new technology/patent? This new technology is a disruptor. Water engines
will completely replace gas engines.
Use the car industry as an example. The price of the new engine should be equal to the extra profit
derived from the delta price that car manufacturer(s) can apply to a water fueled car. The delta price that
the car manufacturer(s) can apply depends upon a quantification of the lower costs that customers will
face by not having to pay for fuel. In order to determine such number, it may be useful to know:
Size of U.S. car market:
 300 million people in the U.S.

 100 million households
 50M urban with on average 1 cars per household
 50M suburban with on average 2 cars per household
 150M cars, replaced every 10 years
 15M cars per year, 80% new, 20% old
 12M new cars per year
Fuel cost savings of water fueled car:
 150K miles per car over life of car

 25 miles per gallon of gas
 6K gallons over life of car
 $4 per gallon of gas
 $24K in gas saving
Consumers are probably willing to pay $5K to $10K in premium (tax benefits / green image). Therefore,
this translates into a $60B to $120B potential market just in car industry alone.
C. Patents
 Are patents generally enforceable?

 How complex is the technology?
 What are the implications for sale to a specific company or industry wide?
Recommended Conclusion:
Sell the patent/technology instead of starting a new firm from scratch.
Sell to as many industries as quickly as possible. Target the largest players because they have the capital
to buy the technology and the resources to integrate the technology quickly. Use competitive bidding to
raise the price.
Monsanto to Enter Artificial Turf Business

Case Type: market sizing.
Consulting Firm: Cognizant Business Consulting (CBC) first round full time job interview.
Industry Coverage: Chemical Industry; Sports, Leisure, Recreation.
Case Interview Question #00690: Our client is Monsanto Company (NYSE: MON), an American
multinational chemical and agricultural biotechnology corporation headquartered in Creve Coeur,
Missouri. Founded in 1901, Monsanto used to be a major producer of plastics, including polystyrene and
synthetic fibers. It remained one of the top 10 U.S. chemical companies until it
divested most of its chemical businesses between 1997 and 2002, through a process of mergers and
spin-offs that focused the company on biotechnology.
Recently, Monsanto is considering entering the business of making artificial turf and would like us to
estimate the market size for artificial turf in the U.S. Artificial turf is a surface of synthetic fibers made to
look like natural grass. It is most often used in arenas for sports that were originally or are normally played
on grass. However, it is now increasingly being used on residential lawns and commercial applications as
well.
How would you help your client estimate the U.S. market size for artificial turf?
Possible Solution:
This is a market sizing case, so rarely is any more information provided. It tests the candidate’s comfort
with ambiguity. The candidate should lead the discussion and start brainstorming on the possible uses of
artificial turf from the beginning:
 Sports fields
 Baseball
 American football
 Soccer
 Field hockey
 Rugby
 Golf
 Commercial businesses
 Residential area
 Airports
 Schools
 High schools
 Colleges & Universities
After the candidate has identified some uses for artificial turf, prompt him/her to estimate the number of
schools in the U.S. (or any of the places where artificial turf is used)
Possible Answer:
To estimate the total market size of artificial turf in schools in the U.S., we have to estimate the following:
 Number of schools in the U.S.

 Number of sq feet of artificial turf that is bought each year per school
 Price of turf / sq foot
We start by estimating the number of schools in the U.S.:
Number of schools in the U.S. = (Number of high schools) + (number of 4-year colleges/universities) +
(number of 2-year community colleges)
1. Number of high schools
 Population of U.S. = 300 M

 Percent of population age 18 = 1% (assuming population is equally distributed)
 Number of people age 18 = 300M x 1% = 3M
 Assume 95% go to high school, then the number of people age 18 who go to high school = 3M x
95% = 2.8M
 Assume that on average there are 200 18-year-olds in a high school. Then the total number of
high schools = 2.8M / 200 = 14,000 high schools
2. Number of Colleges: 4-year colleges/universities
 Population of U.S. = 300M

 Percent of population age 19 = 1%
 Number of people age 19 = 300M x 1% = 3M
 Assume 30% of people go to 4-year colleges, then the number of 19-year-olds who go to 4-year
colleges = 3M x 30% = 900,000
 Assume that the average size of graduating class is 400 students, then the number of 4-year
colleges is = 900,000 / 400 = 2,250 colleges
3. Number of Colleges: 2-year community colleges
 Assume 10% of people go to community college, then the number of 19-year-olds who go to
community college = 3M x 10% = 300,000
 Assume average graduating class is 200 students, then the number of community colleges is =
300,000 / 200 = 1500 community colleges
4. Total amount of artificial turf
Make the following assumptions:
 price of artificial turf = $10 / sq feet

 lifetime of turf = 10 years
 athletic field = 60 yards x 120 yards = 60 x 3 feet x 120 x 3 feet = 64,800 sq ft
 adoption of turf = 50%
Now we can calculate the market size for artificial turf:
 Number of schools = 14,000 + 2,250 + 1,500 = 18,000

 Number of sq feet of turf that is bought each year per school = 1/10 x 50% x 64,800 = 3,240 sq
feet
 Price of artificial turf = $10 / sq feet
 Market size = 18,000 x 3,240 x $10 = $580 Million
Conclusion
The market size for artificial turf in schools in the U.S. is about $580 Million.
Schering-Plough to Re-evaluate Drug Development Portfolio

Consulting Firm: Quintiles Consulting first round full time job interview.
Case Interview Question #00683: The year is 2009. Schering-Plough Corporation is a large
pharmaceutical company based in Kenilworth, New Jersey, United States. Schering-Plough manufactures
several pharmaceutical drugs, the most well-known of which were the allergy drugs Claritin and Clarinex,
an anti-cholesterol drug Vytorin, and a brain tumor drug Temodar. The company
had revenue of USD $ 18.502 billion in 2008. In November 2009, another large American pharmaceutical
company Merck & Co. (NYSE: MRK) announced that it would merge with competitor Schering-Plough in a
USD $41 billion deal. The new company formed will take the name of Merck & Co.
Your client is the head of development (preclinical and clinical) at Schering-Plough. He has a declining
budget and wants to re-think his portfolio. He currently uses a spreadsheet to evaluate his portfolio which
contains columns for the chemical name, estimated launch date, and lead indication. Essentially, your
client wants you to add a column for the current market value of the partially developed drug so that he
can evaluate which ones to push through development. How do you do it?
Additional Information: (to be provided after relevant questions)
 Currently there are 60 drugs in development with 1/3 in clinical trials, and 2/3 in pre-clinical
development.
 It takes 10 years to bring a drug from pre-clinical to launch and there is large attrition along the
way.
 Assume that this is a U.S. launch only, that there is no bundling, and that each compound
represents a novel therapy.
Possible Solution:
Candidate: To determine the market value of the drug, I would want to do an NPV (net present value)
calculation and so the two areas I would primarily like to explore is revenue and costs. I’d like to begin
with the revenue side of the equation first and begin discussing the factors that influence volume. Should I
begin with a particular drug or should we talk in generalities?
Interviewer: I’d like to focus on the thought process you would use to do the calculation and so I am not
concerned about a specific drug. Generalities are fine.
Candidate: OK. The first thing I would want to do is estimate the size of the market and consequently our
market share at the time of launch. To do that I’d like to know the # of people who suffer from a particular
ailment.
Interviewer: Where would you find that?
Candidate: You can go to all kinds of different sources like the American Cancer Society or the American
Lung Association who keep track of this information. In particular, I’d take the growth rate for a given
disease category over the past few years and use that to extrapolate what it would be when the drug
launches to get the total number of people with the illness. Next, I’d want to find out the number of people
who are generally treated for the disease.
Interviewer: And where would you find that information?
Candidate: Similar sources although I suspect I’d might also be able to look at market research analyst
reports depending on the type of therapy being evaluated.
Interviewer: Good
Candidate: Next, I want to discount that number by the number of people who seek treatment using a
drug vs. another procedure like surgery to get a true sense of the market. Then I would want to take into
account the competitive environment.
Interviewer: What in particular would you look for?
Candidate: Well, I would first want to understand what competitors are on the market now and where we
anticipate them being from a product lifecycle perspective when we expect to launch our therapy. In
particular, I’d want to drill down on comparisons between mechanism of action, indications, and dosing
requirements.
Interviewer: What else should you look for?
Candidate: Knowing that new drugs are always being developed, I’d want to evaluate those that are
currently in the pipeline of our competitors and what we anticipate the impact of them being on the market
at the time of launch. You can find this information in publications like R&D directions as well as other
trade publications.
Interviewer: Sounds good. Besides volume what else should you be thinking about?
Candidate: Pricing. Pricing for drugs has a lot to do with demonstrated efficacy as well as whether you are
the first drug in a given class to be launched. Other things that you might want to consider include
convenience (dosing requirements) and other drugs used to treat the therapy even if the mechanism of
action differs.
Interviewer: Great. What about costs?
Candidate: From a cost perspective, I’d want to consider both fixed and variable costs. This would include
any new facilities that need to be built to manufacture the drug as well as the R&D and sales and
marketing launch costs associated with the product.
Interviewer: And what would you do with this information?
Candidate: I’d determine the free cash flow number for each year and then discount that back to the
current period. Additionally, since the process has high attrition, I’d also want to adjust for the probability
of success at each phase.
Interviewer: Great. Let’s say you’ve done all this and it turns out that ½ the compounds in pre-clinical
development have no value. How are you going to plug the hole from a revenue perspective?
Candidate: Any time you are considering product development there are two options – make or buy.
Under the make category, we could try to expedite the development of existing pipeline drugs to address
the gap but this is fairly unlikely to prove successful given the highly complex development process.
Interviewer: What else could address the revenue considerations if you can’t expedite development?
Candidate: You could work with your existing portfolio of marketed products to increase the amount of
revenue you can get from them. This could include considering shifting them to over the counter products
or evaluating other indications for the drug. However, I suspect we may already be doing this so it is
unlikely to be all of the answer.
Interviewer: Good. What else?
Candidate: We can buy a product or a group of products to plug the hole. To do so, we should go through
a similar compound valuation exercise as we did for our portfolio but also take into account synergies
between our two organizations and the previous track record of the other company in launching similar
projects.
Interviewer: Sounds good. Thanks!
Comments:
This case is an interesting spin on the standard market sizing type of question – Rather than evaluate one
market, the candidate has to outline a general process for sizing the market for a number of different
drugs. Layered on top of this the candidate needs to demonstrate a good understanding of the process
for deriving an NPV and the relationship between the NPV and the original market sizing exercise.
The candidate has given a very good answer and there are a number of positive aspects worth noting,
including the following:
Before doing anything else, the candidate sets out a clear road map for tackling the question – “I am
going to do an NPV calculation which will mean looking at revenues and costs”
The candidate clarifies the expectations of the interviewer – “Should we be looking at generalities or
specifics?” The last thing you want to be doing in a case interview is giving a great answer that bores the
interviewer because it is not the aspect of the question that they were interested in.
The candidate has a clear and logical approach to sizing the market for each drug. Not only are the steps
sensible and meaningful but they are also readily verifiable by available data (such as American Cancer
Society data on the number of patients with a particular cancer condition). It is quite common for
interviewers to ask how you would go about getting the data to support a certain step in you logic so it is
important to be choosing divisions where this information is likely to be available.
The candidate does not get bogged down when the interviewer changes the question. If you are asked a
new question, like how to fill a hole in the pipeline, then develop a new framework for approaching this
aspect – “there are two options to consider, make or buy”
Similar techniques could be applied to almost any market sizing question.
What is the Market Size for Internet Routers in U.S.?

Consulting Firm: Samsung Global Strategy Group (GSG) first round full time job interview.
Industry Coverage: telecommunications & network.
Case Interview Question #00672: A network router is a device that forwards data packets between
computer networks, creating an overlay internetwork. The most familiar type of routers are home and
small office routers that simply pass data, such as web pages, email, IM, and videos between the home
computers and the Internet. An example of a router would be computer owner’s

cable or DSL modem, which connects to the Internet through an Internet service provider (ISP).
Estimate the annual market size for internet routers in the commercial segment (companies with 20 to
1000 employees) in the U.S.
Additional Information: (to be given to candidate upon request)

 For companies with between 20 to 1000 employees, IT spending is about 5% of their annual
revenue.
 Networking is a subset of IT, and networking spending is about 20% of total IT spending.
 Internet routers make up 5%-10% of spending on networking.
Possible Answer:
This “market sizing” case can be solved by starting from the U.S. population. First, let’s estimate the
number of U.S. companies with between 20 and 1000 employees:
 U.S. population: 300 million.
 Assume half are of working age, so 150 million potential employees in the U.S.
 Of those 150 million people, assume 2/3 are employed full-time, or 100 million.
 Assume 60% of full time employees fall into the segment we’re looking at, i.e. working for
companies with between 20 to 1000 people. This gives us 60 million.
 Assume an average of 500 employees per company, so 60 million / 500 = 120,000 companies.
Then, make an estimate for revenue per head at these companies.
 Let’s say, on average each employee makes $80,000 contribution to company’s revenues.
 So, at a given company, annual revenue per company is $80,000 * 500 employee = $40,000,000.
Next, use the additional information provided to calculate the share of revenue spent on internet routers
by a given company.
 5% * 20% * 10% = 0.1% of total annual revenue.

 So for each company, annual spending on routers is $40,000,000 * 0.001 = $40,000.
And for the total market, we just multiply that by the number of companies, already estimated to be
120,000.
 120,000 * $40,000 = $4.8 billion estimated market size for routers in U.S. commercial segment.
Mexican Billionaire Carlos Slim to Fund More Universities
Consulting Firm: Strategic Decisions Group (SDG) first round summer internship job interview.
Industry Coverage: Education & Training Services.
Case Interview Question #00642: Our client is Mexican business magnate, investor and philanthropist
Mr. Carlos Slim. Mr. Slim has been ranked by Forbes as one of the richest persons in the world since
2010. His extensive holdings in a considerable number of Mexican companies through his
conglomerate, Grupo Carso, SA de CV, have amassed interests in the fields of
communications, technology, retailing, education and finance.
In Mexico, banks prefer not to lend money to not-for-profit institutions like hospitals and schools because
if one of these institutions defaults the bank worries that it will be seen as the one responsible for
liquidating their assets. We have been approached by Mexican billionaire Mr. Carlos Slim. He is
evaluating whether an opportunity exists to start a bank that would lend money to various universities in
Mexico. Specifically, there are three questions that Mr. Slim wants us to solve for him:
 Is there an opportunity to lend money to universities?
 If an opportunity exists, how big is it?
 How should he structure the bank?
Additional Information: (to be given to candidate if requested)
Mexico has a population of approximately 110 million as of 2011. Population distribution based on age
group is:
 0-15 years old: 20 million
Population growth: close to 1% (use 1% for the sake of simplicity)
Total number of universities in Mexico: 500
Recommended Approach:
The purpose of this case is to test the interviewee’s ability to determine whether it makes sense for the
client to open a bank that serves universities. In particular, the interviewee should recognize that he/she
needs to gather the necessary information to determine the market opportunity for such a bank. The
interviewee should ask questions to gather the necessary information to determine the market size.
Possible Answer:
Interviewer: So, given the facts of the case, how would you consider going about analyzing this question
for the client Mr. Slim?
Candidate: I’d like to understand a few things to evaluate this decision.
 First, I’d like to understand the size of the market to see whether there is an opportunity or not.
 Next I would like to analyze who are the competitors, if any. In particular, I am interested in the
competitors because they may decide to offer similar loans to institutions, like universities.
 Finally, I would like to know what the university can leverage from its own operations to develop
this idea, etc.
Interviewer: That seems like a good starting point. Let’s start by analyzing the market. How would you do
that?
Candidate: OK, I will start by analyzing in Mexico how many people go to university per year. If the
population grows at about 1% per year, this means that next year there could be more people attending
universities than space available. I would use a guesstimate of the percent of population enrolled in
universities to calculate the number of students currently enrolled across Mexico. For simplicity’s sake I
will assume that all potential students attend universities in Mexico, excluding the percent that attends
school abroad.
Age range Population % Enrolled in University (guesstimate) Enrolled In University
0-15 years old 20 million 0% 0
15-30 years old 25 million 30% 25 * 30% = 7.5 million
30-45 years old 25 million 2% 25 * 2% = 0.5 million
Total 8.0 million
There are roughly 25 million Mexicans between the ages of 15 and 30, and I would assume that they are
evenly distributed. That is, there are about 25 million / 15 = 1.67 million people in each year of age (e.g.
1.67 million people who are 15 years old, 1.67 million people who are 16 years old, and so on until the
age of 30). If I assume that 30% of the people between the ages of 15 and 30 go to university, that means
we have 25 * 30% = 7.5 million university students between the ages of 15 and 30.
Interviewer: Those assumptions seem to be very good ones. What else would you need to consider?
Candidate: OK, I think that I will need to figure out how many schools there are in Mexico and how many
students are enrolled in each school.
Interviewer: Sure, our client has told us that there are 500 universities in Mexico and we can assume
there they are all at full capacity.
Candidate: OK, so 7.5 million divided by 500 means that there are on average 15,000 students at each
school. I might think that this seems like a high number. In the United States we have part-time students
and full-time students. If this is similar in Mexico, the universities would likely be able to accommodate
more students without any investment.
Interviewer: No, they can’t do that as the law prohibits it.

Candidate: OK, so if the population grows at 1% per year and there are no new people going to university
for other reasons (e.g. better economy) this means that in any given year we will have 7.5 million
multiplied by 1% new students. We would have 75,000 incremental students. Given that we know the
schools are at full capacity, we would need 75,000 / 15,000 = 5 new schools.
Interviewer: OK, so now let’s focus on how would you segment the schools in order to think about the
credit scoring they may have?
Candidate: I would segment them based on three factors:
 New school or just new branch to an existing school. I believe that it is less risky to lend to a
company that already has a business in place.
 Flow of people to school: it’s much more secure to lend to a school that has plenty of students in
each year than to one that has the same number but distributed in a different way (e.g. most of the
people finishing their careers and almost nobody in the first or second year).
 Geography: We are speaking in averages. There may be areas with no population growth. There
may be an uneven dispersion.
Interviewer: How would you calculate how much money a typical school would need?
Candidate: There are two different streams of costs we have to consider. On the one side the cost of
building a new school – including buying the land, the construction of buildings, etc. – and one the other
side the funds needed until the company reaches a state in which it has a positive free cash flow.
Interviewer: Great. Tell me the number, or at least how to get it.
Candidate: The better is to rely on our client’s experience. He has a lot of business holdings, so there are
some experiences we can leverage there?
Interviewer: Let’s move on. How would you fund this project?
Candidate: I will think about a couple different ideas such as:
 Unilateral organizations (e.g. World Bank, etc.)

 The Government as it may need to help some private schools that focus on careers that are not
available through public university.
 Banks: They may not be willing to do this on their own but may want to partner with someone that
knows about this industry.
Interviewer: OK, fair enough. Our client Mr. Slim is asking you to summarize the situation. What would be
your recommendation?
Candidate: Can I take a moment to recap all the findings?
Interviewer: Sure.
Candidate: I will tell the client that it seems to be a pretty interesting opportunity to provide capital to build
new schools which would be at least 5 per year given the 1% annual growth in the population.
Interviewer: Very good. Thank you for your analysis.
PE Firm Austin Ventures to Invest in Dish Plate Startup

Case Type: private equity, investment; market sizing.
Consulting Firm: Analysis Group first round summer internship job interview.
Industry Coverage: startups.
Case Interview Question #00635: The client Austin Ventures (AV) is a private equity firm focused on
venture capital and growth equity investments in business services and supply chain, financial services,
new media, Internet, and information services companies. Based in Austin, Texas and founded in 1984,
AV has raised approximately $3.9 billion since inception across ten private
equity funds.
Recently, the CEO and co-founder of a start-up has asked Austin Ventures to invest in his company. The
start-up, based in Houston, Texas, makes high-end dish plate sets for the Mexican market. The CEO has
mentioned that he is going to use the investment from Austin Ventures to purchase a new manufacturing
machine that he expects will allow him to double production. Should AV invest in his venture?
Additional Information: (to be given to candidate if requested)
 114 million people live in Mexico. Assume 100 million for the sake of simplicity.
 Mexico population growth can be approximated to be 1% per annum.
 Income distribution: 5% of population top, 45% middle class, 50% bottom.
Recommended approach:
Rather than jumping directly to analyze in depth the market, the competition and/or the start-up
company’s capabilities, it is recommended that you use a dialogue to seek out more information. When
mentioning the themes you would like to cover, explain your reasoning behind each one.
Possible Solution:
Interviewer: So, should the client Austin Ventures invest or not?
Candidate: OK, I would like to analyze three key areas that I expect will help me understand whether this
is a good opportunity or not. I believe it is important to first analyze the market, focusing on its size,
growth potential and trends in terms of product design, then understand who are the startup company’s
key competitors and finally understand what this company can leverage from its existing operations once
the new machine is in place.
Interviewer: Good idea. Let’s focus on the market for a moment. How would you go about sizing it?
Candidate: There are a number of ways to do so. We can do some market research and talk to your
potential partner to get some information. Alternatively, we can visit some of the store or chains that sell
that kind of product to build a market size from the bottoms up. Finally, we can estimate that number
based on the population, etc.
Interviewer: OK, let’s do the estimation based on the population. In Mexico there are 100 million people.
What else do you need?
Candidate: Do you have the income distribution pyramid of Mexico? I believe that income will play a role
because households with higher incomes may purchase higherend dishes or may purchase different
quantities than households at the other end of the income distribution. I would also like to get a sense of
the replacement rate, if not given I can estimate. And, whether there are any key substitutes that I can
expect in the market in the next few years, to ensure that my estimates are fair.
Interviewer: Assume income distribution is 5% of population top, 45% middle class and 50% at the
bottom. And, you can assume a 15% per year replacement rate.
Candidate: OK. Let me quickly use these numbers to analyze the size of the market. I will calculate first
“the stock”, which is the size of the market given by the replacement of dishes. Then I will calculate “the
flow”, which is the size of the new market.
Item Quantity
Population 100 million
# of people per household 4
Households 100 million / 4 = 25 million
# of different Total # of
Income # of households Sets sets Total # of sets (replaced)
High 25 million * 5% = 1.25 million 3 3,750,000 3,750,000 * 15% = 562,500
Mediu 25 million * 45% = 11.25 22,500,000 * 15% =

m million 2 22,500,000 3,375,000
25 million * 50% = 12.5 12,500,000 * 15% =

Low million 1 12,500,000 1,875,000
Interviewer: But, are you sure that we can address the whole market?
Candidate: No, in fact this was only to calculate the full market size. I still wanted to ask you which part of
the market this startup company targets, is it within one income class?
Interviewer: OK, they target the medium segment, which by your calculations is of about 3.4 million sets
per year, among medium income households.
Candidate: Great. However, I would still want to understand the projected market growth. If the population
growth at 1% per year we can assume that there are about 250,000 (25 millions * 1%) new houses per
year, which 45% are of medium segment and they have to equip themselves with 2 sets. So there is an
extra 225,000 more dish sets demanded per year and a replacement rate of 15% on these new dishes.
So, the market size is approximately 3,375,000 + 225,000 = 3.6 millions sets per year.
Interviewer: On the ballpark, my estimation was that it was around 4 million.
Candidate: Anyway, we are still missing other segments on the markets such as restaurants, hotels,
offices, etc.
Interviewer: (interrupts) Don’t worry about that. Let’s continue with this.
Candidate: OK, so now, we have to think whether it is convenient for the client to invest. To do so I would
like to do a break-even analysis of buying the machine and figure out the amount of sets that we have to
sell.
[The interviewer interrupts again, since time is running low. Remember to practice good time
management in interviews and take clues from the interviewer]
Interviewer: Assume that we have already done so and we figure out that the start-up company will have
to produce at full capacity (150,000 sets per year). We don’t have much time. What would your
recommendation be?
Candidate: So, given that the startup was asking for the money to double production it means that their
production will go from 150,000 to 300,000. As this estimate represents less than 10% of the available
market (3.6 million), his proposal at first glance seems feasible.
However, I would want to know the company’s current market share versus those of competitors in this
segment. If a competitor already had 70% of the market, I might be more cautious about entering into this
venture. Furthermore, if I had more time I would focus on what can be leverage from the current cost
structure to assure it is a profitable proposition.
Interviewer: Good. Let’s stop here for now.

C Enters U.S. Market by Lending Production Capacity
Case Type: market sizing; market entry.
Consulting Firm: Roland Berger Strategy Consultants first round job interview.
Industry Coverage: metals production; automotive, motor vehicles.
Case Interview Question #00588: Our client China Metallurgical Group Corporation (MCC) is a large
Chinese conglomerate headquartered in Beijing, engaging in EPC (engineering, procurement and
construction), natural resources exploitation, paper-making, equipment fabrication, and real estate
development. With a lot of cash on their hands, they recently decided to invest
money in a aluminum plant that, by the end of this year, will have a full production capacity of 8 million
aluminum wheels annually. The senior management of MCC assumes that it will be able to sell 20% of its
production in the domestic Chinese market.
The company has retained Roland Berger Strategy Consultants to determine if it can sell the remaining
80% of the 8 million aluminum wheels to the US market, which is the largest vehicle market in the world.
What do you think? How would you approach this case?
Additional Information: (to be given to you if asked)
 About 17 million vehicles are produced in the US each year. 70% are equipped with aluminum
wheels.
 10% of used car owners whose cars are less than 5 years old buy aluminum wheels.
 120 million cars are in the “after market”, 24 million of which are less than 5 years old.
 Most car companies will select one supplier who will supply the aluminum wheels for the entire
life-time of a car model. Suppliers are usually selected 24 months before a new car model goes into
production and have stringent quality controls.
Suggested Approach:
This case is essentially asking you to do two things:
1. Determine the size of the U.S. car market so that you can understand the relative impact of the
Chinese company’s goals.
2. Assess the feasibility of entering the U.S. market and provide suggestions on how the Chinese
company might go about doing so.
Market Sizing: First, determine how many wheels your client MCC could supply to the US market – both
in number of wheels and number of cars (1/4 of the wheel number). Then ask about the size of the US
new car market and the secondary market to determine what share the company would need to capture
to sell 80% of its production in the US.
Feasibility and Possible Actions: This is where you need to drill down to uncover automobile industry
dynamics:
 How do OEMs (original equipment manufacturer) get the wheels for the cars they produce?
 How would a Chinese company distribute its wheels to the US market? Directly or through
intermediaries?
 How entrenched are supplier relationships? Do OEMs buy based on price only, or do the
relationships matter too?
 What regulations are involved in supplying an OEM?
Once you understand how the supplier-OEM relationships work, you can provide some suggestions on
how this company might feasibly enter the US market.
Possible Answer:
Candidate: OK, I’d like to first determine the production figures of the Chinese manufacturer and compare
them to the size of the total US automobile market. This will help me understand the relative size of the
Chinese company’s production numbers and whether their plan is realistic.
Once I know how much market share the Chinese company wants to capture, I’d like to discuss the US
automobile industry dynamics to determine if and how the Chinese company should enter the market.
Interviewer: Sounds like a plan. Go ahead!
Candidate: Let’s first start with their production numbers. Let’s assume that cars require only 4 aluminum
wheels and that spare tires are made out of some less expensive material. This means that our client
produces wheels for 2 million cars per year. 80% of 2 million gives us wheels for 1.6 million cars, which
we are trying to sell in the US. So how big is the US new car market and how large is the secondary car
market (people who buy aluminum wheels for an older car)?
Interviewer: I do have the numbers for you. About 17 million vehicles are produced in the US each year.
About 70% are equipped with aluminum wheels. About 10% of used car owners whose cars are less than
5 years old buy aluminum wheels.
Candidate: That means that roughly 17 million * 70% ~= 12 million new cars each year are sold with
aluminum wheels. Can we assume that there are about 300 million cars in the after-market, about 1 car
per person, considering that people in some area own on average 2 cars?
Interviewer: No, that number is much lower. There are about 120 million cars in the after market, but only
about 24 million are less than 5 years old.
Candidate: I see. That means the after-market is about 2.4 million sets of aluminum wheels per year.
Considering that our client needs to sell 1.6 million sets, they’d have to capture a 66% market share,
which seems very unlikely in such a fragmented market. That means we should probably focus on the
new car market. How do the major car companies procure the aluminum wheels they put on their cars?
Interviewer: That’s a good question. Most auto companies will select one supplier who will supply the
aluminum wheels for the entire life-time of a car model. Suppliers are usually selected 24 months before a
new car model goes into production and have stringent quality controls.
Candidate: Then, we probably would have to add another 12 months to even get on a company’s
preferred supplier list, which increases the lead time to about 3 years before we can hope to supply
aluminum wheels to a major US car manufacturer. Since you mentioned earlier that our client’s plant will
be ready for production by the end of this year, this does not look like a viable option either. What about
trying to expand distribution on a broader basis than just the United States?
Interviewer: They thought about that as another option, but they would really like to work with just the US.
Candidate: Well, assuming that our client can produce quite a bit cheaper in China than most competitors
can in the US, it might make sense to sub-contract some of this production capacity to suppliers of the
major US car manufacturers. This is probably less lucrative than selling directly to end-customers or car
manufacturers because the client would have to share its profit margin with the supplier. That said, it
would probably be the most efficient way to enter the US market on a large scale.
Interviewer: Yes, this is exactly what they did in the end.
How Big is the U.S. Market Size for Band-Aids?

Consulting Firm: IMS Health Consulting Group first round job interview.
Industry Coverage: healthcare: hospital & medical.
Case Interview Question #00580: Band-Aid is a brand name of American pharmaceutical and medical
devices giant Johnson & Johnson’s (NYSE: JNJ) line of adhesive bandages and related products. It has
also become a genericized trademark for any adhesive bandage in the United States, Australia, Brazil,
Canada and India.

How big is the U.S. market for Band-Aids (the brand)?
Possible Solution:
A market sizing or estimation case question should be solved by posing and answering a number of sub-
questions. To estimate the U.S. market size for Band-Aid bandages, the following sub-questions and
answers could be used:
 What are Band-Aids used for?
 Who are Band-Aids users?
 Within each segment of Band-Aids users, how often do they need to use Band-Aids?
1. What are Band-Aids used for? Band-Aid bandages are mostly used to cover up minor cuts.
2. Who are Band-Aids users?
Assume that Band-Aid holds 75% of the U.S. market for adhesive bandages. The market can be
segmented into two main categories of users: kids aged 16 and under who tend to get cuts more often,
and adults over 16 who are a little more careful.
Assume that the average life of a person is 80 years, and the U.S. population is evenly distributed. That
means that kids 16 and under represent 16 / 80 = 20% of the U.S. population, or 300 million * 20% = 60
million, and adults over 16 are 300 million * 80% = 240 million.
3. Within each segment of Band-Aids users, how oftern do they use Band-Aids?
Assume that kids 16 and under get a cut once every two months on average. Once every two months
equals six times per year, for a total of 60 million kids * 6 cuts = 360 million bandages. Assume that it
takes on average three days to cure a cut and bandages are replaced once a day. That makes for 360
million * 3 = 1,080 million bandages.
Assume that adults over 16 get a cut once every six months which also lasts three days, with bandages
being replaced every day. That is 2 cuts per year * 3 days per cut * 240 million people = 1,440 million
bandages.
The total number of bandages, then, is 1,080 + 1,440 = 2,520 million bandages.
Assume there are approximately 20 bandages in a package, and a package sells for $5. The total size of
the market expressed in US Dollars is therefore 2,520 million / 20 * $5 which is approximately $630
million. If Band-Aid holds 75% of this market, that is equal to $630 * 75% = $470 million.
What is the Market Size for Gas Tanker Trailers?

Case Type: market sizing; private equity.
Consulting Firm: Simon-Kucher & Partners first round job interview.
Industry Coverage: oil, gas & petroleum industry; automotive, motor vehicles.
Case Interview Question #00560: Your client Advent International is a global private equity firm focused
on buyouts of companies in North America, Latin America, Western and Central Europe, and Asia. The
firm focuses on international buyouts, growth and strategic restructuring in five core
sectors: Business & Financial Services; Healthcare; Industrial; Retail, Consumer
& Leisure; Technology, Media and Telecoms. Headquartered in Boston, Massachusetts, United States,
Advent operates from offices in 16 countries and employs over 170 investment professionals.
Recently, Advent is considering an acquisition of Kirkland, Washington based Kenworth Truck Company.
Kenworth mainly produces ground transportation gas tankers. Imagine the sort of trailer trucks that hold
big containers of gas and deliver them to gas stations, for example. How large is the market for these gas
tanker trailers in the United States?
Possible Answer:
This is mostly a marketing size case, with some creative work at the end. First, the interviewer should ask
the candidate what variables drive the need for gas trailers. Then ask the candidate to estimate the
market size based on those drivers (use volume). Once there is a market size, challenge the final number
and see the candidate’s reaction to pushing on different assumptions.
Market Drivers
 Distance: how far gas needs to be transported
 Volume: total gas needed for delivery in a year in the U.S.
Estimation (ask the candidate to make apppropriate assumption, then correct them if their assumptions
are very different)
There are 300 million people in the U.S., and 100 million American households. On average each
household owns 2 cars (or trucks). Therefore, roughly 200 million cars and trucks are owned by American
households.
Then, there are car rental companies like Avis, Alamo, Hertz, Enterprise, Budget Rent-A-Car etc, car
sharing companies like Zipcar, taxi companies and corporate that own a fleet of vehicles. Assume cars
owned by companies are only 25% of that owned by households. Thus, another 50 million cars and trucks
are owned by Americans companies.
So, in total there are 250 million cars and trucks in the United States.
Assume that in the U.S. cars and trucks are driven an average of 12,000 miles per year, and average gas
mileage is 15 miles per gallon. Therefore, each car or truck will consume 12,000 / 15 = 800 gallons of gas
every year.
For 250 million cars and trucks, 250 million * 800 = 200 billion gallons of gas are consumed in the U.S.
per year
Assume that 25% of the 200 billion gallons do not need transportation, so 200 billion * 75% = 150 billion
gallons need transportation
Assume that 20% of the 150 billion gallons are transported in ways other than trailers and trucks, so 150
billion * 80% = 120 billion gallons of gas are transported by gas tanker trailers.
Each gas trailer holds 8,000 gallons of gas on average, and can make 50 transportation trips in a year.
Therefore, to transport 120 billion gallons of gas will need: 120 billion / (8,000 * 50) = 300,000 gas tanker
trucks.
Replacement of gas tanker trucks is every 10 years, so every year 10% of the 300,000 gas trucks will get
replaced. Therefore, the market size for these gas trailers in the United States is: 300,000 * 10% = 30,000
per year.
Question #2: After there is a market size number, tell the candidate: in due diligence, the private equity
firm Advent International has been told by Kenworth Truck Company that demand has been surging
recently; but your client is suspicious about this sudden growth. What might cause a change in demand
for gas trailers?
Possible Answer:
Change in demand for gas trailers can be attributed to the following factors:
 More gas is produced in the U.S.

 Greater rate of gas consumption
 Gas is traveling further
 Average size of gas tankers is declining
 Legal regulations that may affect the quality of gas tanker trailers, so replacement time is
decreasing
 Roads being maintained worse, so replacement time is decreasing.
 Oil companies switching from other forms of transportation to gas tanker trailers
Question #3: After brainstorming, tell the candidate that in fact, it is due to a legal regulation 9 years ago
that required upgrades, and so at the time, there was a sudden spike in gas truck purchases. Now that we
are approaching the 10-year average replacement time, purchases are spiking again. How does this
information affect your recommendation to the private equity firm?
Possible Answer:
Maybe they shouldn’t acquire the gas truck company, since demand will probably drop soon. Then wrap
up the case with a summary and final recommendation about whether to acquire or not.
Becton Dickinson to Launch Sleep Enhancing Device

Case Type: pricing & valuation; market sizing.
Consulting Firm: IMS Health Consulting Group first round job interview.
Industry Coverage: healthcare: hospital & medical.
Case Interview Question #00554: Our client Becton, Dickinson and Company (BD) (NYSE: BDX) is an
American medical equipment company that manufactures and sells medical devices, instrument systems
and reagents. Headquartered in Franklin Lakes, New Jersey, BD does business in nearly
50 countries and has 28,803 employees worldwide. Revenue in fiscal year 2010
was about USD $7.37 billion.
The client Becton Dickinson & Company’s research & development (R&D) department have recently
invented a small device that can improve the quality of sleep by 400%. Your consulting company has just
been retained to help bring this new product onto market. Specifically, the client wants to know how they
should price it and what the estimated market for this product is. How would you go about the case?
Additional Information: (to be given to candidate if asked)
 The client company had operating income of $1.68 billion on revenue of $7.37 billion in 2010.
 This new sleep enhancing device will become the company’s flagship product, as there are no
other similar products currently on the market. Users strap the device around their head and breathe
through a mask on the front.
 The new device costs $20 per unit to produce.
 A normal person needs on average 8 hours of sleep per night. This new product reduces the
number of required sleep hours by 6.
 The client Becton Dickinson & Co. wants to focus on U.S. market first.
Possible Answer:
This “pricing a new product” and “estimating market size” case involves estimating the value of time and
value of feeling well-rested. Pricing involves price-based costing, cost-based pricing, and comparable
pricing. The market size comes from people who have poor sleep quality and time-related needs.
1. Pricing
3 methods to gauge price:
Price-based costing. What is someone willing to pay? Assume average wage rate of $10 per hour. Sleep
hours per night goes from 8 to 2: 6 hour reduction. 6 hours / night * $10 / hour * 365 nights per year =
$21,900 per year. This probably represents an upper bound of the price.
Cost-based pricing. The production cost of $20 per unit can be used as a lowerbound for pricing. One can
add a few costs for marketing and distribution, say $10. This will give a price of $30 per unit.
Comparable pricing. $30 to $21,900 is an enormous range, so the candidate must find something more
specific. People will pay several hundred dollars for a relaxing massage, or acupuncture many times a
year. Or, they spend money every day on energy boosting foods and energy drinks. These provide
comparable benefits and suggest a safe price estimate falls between $500 and $2,000.
Other issues to consider:
 Maybe the client can rent the sleep enhancing device per night / week / month or sell the
technology license/patent entirely.
 The new device itself is unappealing: big, intrusive apparatus on people’s face.
 Different pricing strategy: Start by pricing high and gradually decrease, or price low and gradually
increase?
2. Market Sizing
Assume that we have decided to price the new device at $1,000 per unit. People who buy the device are
those having both sleep-quality AND time-related needs.
U.S. population: 300 million

Assume that 80 million people have high enough income to purchase the device
Assume uniform distribution of ages 0 – 80. People with sleep-quality issues who would be interested:
 Ages 0 – 20: 20 million; 5% purchase: 1 million

 Ages 21 – 40: 20 million; 10% purchase: 2 million
 Ages 41 – 60: 20 million, 20% purchase: 4 million
 Ages 61 – 80: 20 million, 25% purchase: 5 million
 Total: 12 million
Of the 12 million people, say 50% have time-related issues, or 6 million. Deduct 1 million who aren’t
comfortable wearing a mask at night. Thus, 5 million person will be the target market in the United States.
Total market size = $1,000 per unit * 5 million = $5 billion.
Ritz-Carlton Hotel to Install Mini-bars in Guest Rooms

Consulting Firm: Cognizant Business Consulting (CBC) 2nd round job interview.
Industry Coverage: hotel, hospitality, lodging.
Case Interview Question #00537: The Ritz-Carlton Hotel Company L.L.C. is the parent company to the
luxury hotel chain, Ritz-Carlton Hotels. Headquartered in Chevy Chase, Maryland, located in the
Washington, D.C. metropolitan area, the Ritz-Carlton hotel company is a subsidiary of Bethesda,
Maryland based hotel giant Marriott International (NYSE: MAR).

You have just been promoted to be the Chief Operating Officer (COO) of Ritz-Carlton Hotel Company and
have been put in charge of the daily operation of the hotel chain. Previous the hotel chain did not have
mini-bars installed in the guest rooms. The CEO would like to know if you think the revenue opportunity is
large enough to make it worth it. You have been asked to estimate the revenue opportunity and make a
recommendation as to whether or not they should be installed. How would you go about it?
Instruction to the Interviewer:
The objective of this “launching a new business/service” case is
 To see if the candidate can make reasonable estimates as to the revenue opportunity
 To see if the candidate can identify intangible reasons for or against this new opportunity
 To see if the candidate can determine whether or not this is significant for the business
Question #1: How would you structure your analysis to help you make a recommendation?
Possible Answer:
 Understand the cities the hotels are located in, the local areas, and the restaurants in the hotels
 Estimate the revenue opportunity
 Evaluate risk factors
Instruction to the Interviewer: Let the candidate pick one city to carry out his/her analysis (do not let
them pick a hotel in countries that do not serve alcohol) and make assumptions about the local
bar/restaurant scene and the hotel bar.
Question #2: What are some issues for or against adding mini-bars in Ritz-Carlton Hotels?
Possible Answer:
Pros:
 Mini-bars are becoming standard amenity for upscale hotels

 Business travelers may not stay without it
 Good way to sell “Ritz-Carlton branded” items
Cons:
 Hotel bar will lose business

 Bartenders will lose tips
 Need to hire staff
 Need to adjust food service catering
 High initial startup costs
 Electricity costs
Question #3: Please estimate the revenue opportunity
Instruction to the Interviewer: There is no right answer here as long as all of the candidate’s
assumptions are reasonable and are well thought out. Challenge them to defend some of their
assumptions.
Possible Answer:
1. Estimation of the Hotel size
20 floors, 15 rooms/floor, ~300 rooms
 ~20 Penthouse Suites

 ~80 King Suites
 ~200 Regular Suites
2. Estimate room days per year
Assume 75% utilization and 350 usable days per year per room
 Penthouse Suite: 20*350*75% = 5,250, ~5,000 Room Days/Year

 King Suite: 80*350*75% = 21,000, ~20,000 Room Days/Year
 Regular Suite: 200*350*75% = 52,500, ~50,000 Room Days/Year
3. Estimate average spending per room per day
Assume that cocktail costs $10, beer costs $5 each.
 Penthouse: (2 cocktails & 2 beers) $30

 King Suite: (1 cocktail & 1 beer) $15
 Regular Suite: (1 cocktail) $10
4. Yearly Revenue Opportunity
Room
days/year Average spend/day Total
Penthouse Suite ~5,000 $30 $150,000
King Suite ~20,000 $15 $300,000
Regular Suite ~50,000 $10 $500,000
$950,000
Question #4: Is this amount significant?

Possible Answer:
First, estimate one hotel’s annual revenue from hotel guest rooms
Average rate per room per
Room days/year day Total
Penthouse
Suite ~5,000 $1,200 $6 million
King Suite ~20,000 $800 $16 million
Regular Suite ~50,000 $500 $25 million
$47 million
A strong candidate would be able to recognize that the revenue from the mini-bar (less than $1 million)
may be relatively low in comparison to the hotel’s total revenue (~$48 million) but may be very necessary
for intangible reasons. In addition, the candidate should mention that this is all top line (revenue) and may
not represent a significant profit increase.
Question #5: Ask the candidate to give a 30-second summary of the case and his/her final
recommendation.
Kmart to Place Kodak Picture Kiosks in Stores
Consulting Firm: Siemens Management Consulting second round job interview.
Industry Coverage: electronics; retail.
Case Interview Question #00536: Our client Eastman Kodak Company (NYSE: EK), commonly known
as Kodak, is a multinational imaging and photographic equipment, materials and services company
headquartered in Rochester, New York, United States. Kodak is best known for photographic film and
photo paper products. During most of the 20th century Kodak held a dominant
position in photographic film, and in the 1980s had a 90% market share of photographic film sales in the
United States.
Over the past five years, however, Kodak has experienced declining profits. Our consulting team has
determined that the client’s declining profitability is due to sales volume declines resulting from digital
substitution. As a result, the client is now considering a few new business ideas to enter digital
photography. Our client has been approached by Kmart (the third largest discount store chain in the
world, behind Walmart and Target) in order to place Kodak Picture Kiosks within each of their stores.
Kiosks are self-serve printing stations that allow users to print their digital photos on the client’s photo
paper. How do you evaluate the attractiveness of this new business opportunity?
Suggested Structure:
Any new business opportunity has to be profitable at least in the medium and long run. The following
questions should be answered to get there:
 Demand – What is the market demand for the digital photography printing services at Kmart?
 Profits – Even if there is good demand can the client turn profits?
 Capabilities – What capabilities and resources does the client have to be successful in this
business?
 Risks – What are the potential risks of this agreement with Kmart?
Possible Answers:
Step #1: Size the market opportunity – Estimate the potential market demand for digital prints per year
within a single Kmart store as an example.
1. Top Down calculation:
 1 million people in Boston area

 10% are Kmart customers = 100K
 10% of customers go to Kmart to do photo finishing = 10K
 5% of these customers use a digital camera = 500 people
 average person prints 100 digital photos per year = 50,000 prints per year
2. Bottom Up calculation:
 How many people go to a single Kmart store per year?

 2,500 customers per day * 350 days/year = 87,5000 visits per year ~= 90,000 visits
approximately
 How many digital prints will this translate into?
 Average customer goes to Kmart ten times a year (90K/10) = 90K unique customers
 10% of customers go to Kmart to do photo finishing = 9K
 5% of these customers use a digital camera = 450 people
 average person prints 100 digital photos per year = 45K prints
Therefore, the market opportunity per Kmart store per year is about 45-50K digital prints.
Step #2: Is the business profitable – Will it generate a good return on investment (ROI) for Kodak and
Kmart?
One of the simple ways to determine this is to calculate the break-even demand and compare it with the
potential market opportunity
Additional Information: to be provided to candidate

 Initial investment per kiosk is $6,000
 Average price per digital print is $0.50
 Fixed cost per kiosk per year is $5,000
 Average cost of photo paper per digital print is $0.10
 Cost of printing ink per 500 prints = $75
1. Break-even Calculations:
Revenue = Cost = fixed cost + variable cost

$0.50 * Q = $5,000 + ($0.10 + $75/500) * Q
Solve the equation, the number of prints needed to breakeven Q = 20,000 prints per year
2. Payback Calculations:
Assume the market demand is 50,000 prints per kiosk. Of that only 30,000 prints contribute to the profits
(20,000 breaks even). The margin per print is $0.50 – $0.10 – $75/500 = $0.25. The total profits per year
per store are 30,000 * $0.25 = $7,500
Given that the initial investment per kiosk is $6,000, the payback time is less than 1 year.
The client would have to believe that it could sell at least 20,000 prints per kiosk in order to take this
action. Here the potential opportunity per year is greater than the breakeven quantity.
Step #3: Capabilities and Resources

The candidate should think of what kind of resources and capabilities they need to be successful in this
business. Some questions to ask could be:
 Client has to invest in photo printing machines at Kiosks. Do they have funds?
 Do they have enough production capacity to manufacture photo paper?
 Client will have to manage inventory of printing paper and ink at these Kiosks
 Client has to manage if any machine breaks down (or at least they are responsible for revenue
loss)
 They need to work out the cash flow mechanism. Will the customers directly use their credit cards
when using the self-service kiosk or will use the kiosk and later pay to Kmart?
Step #4: Potential risks and issues – Some examples
 What if the demand is not as high as expected? Should they do a pilot launch?
 What if the present printing technology becomes obsolete in the next few years?
 Will our alliance will Kmart prevent us from partnering with other major retailers?
 What if the price per print crashes because of competition from other retailers?
 We are assuming average numbers to decide on this initiative. Should we be focusing only on
stores that have more than average customers?
 What if the customers use the Kiosk machine in an incorrect way resulting in machine damage?
USG Interiors Not to Use Excess Capacity for Door Making
Consulting Firm: Oliver Wyman 2nd round job interview.
Industry Coverage: Building Materials.
Case Interview Question #00473: Your client USG Interiors Inc. is a leading manufacturer of home
building supplies and construction materials, i.e. sheet-rock, lumber, etc. The company is a wholly owned
subsidiary of Chicago, Illinois based USG Corporation (NYSE: USG, a.k.a. United States Gypsum
Corporation), a Fortune 500 manufacturing company of building materials.

Recently, the management of USG Interiors realizes that they have excess capacity at their plants and
warehouses, and they are looking to utilize this capacity. They are thinking about entering the door
making business in the United States. First, estimate the number of new doors installed in new houses
and apartments each year in the U.S, and second, do you think this is a good business for the client?
Possible Answers:
This is a market sizing and estimation case with some strategy thrown in about launching a new business.
The following dialog is shown to provide you with one of many possible approaches.
1. Market sizing
 Assume that among the 300 million people in the US, 60% or 180 million live in houses and 40%
or 120 million live in apartments.
 The average house has 10 doors per house, and the average apartment has 5 doors per
apartment.
 People move into new houses every 10 years, and into apartments every 5 years.
 There are an average of 5 people in each house, and 3 people in each apartment.
House doors: there are 180,000,000/5 = 36,000,000 houses. 10%, or 3,600,000 new houses are built
each year. 10 doors in each new house for 36,000,000 house doors.
Apartments doors: there are 120,000,000/3 = 40,000,000 apartments. 20%, or 8,000,000 new apartments
are constructed each year. 5 doors in each apartment or 40,000,000 apartment doors.
Total: 36,000,000 + 40,000,000 = 76,000,000 new doors are installed each year in the U.S.
2. Launching new business

Candidate: Can you tell me about the current providers of new doors in the U.S.?
Interviewer: The market is composed entirely of morn and pop door makers who supply to builders within
their geographic location.
Candidate: Is there anyway our client can provide better service?
Interviewer: You tell me!

Candidate: Let us begin with costs. Can the client produce the doors more effectively? Does he have any
cost advantage (i.e. economies of scale)?
Interviewer: Maybe, but we don’t really think that is relevant. The client just wants to know if he should
utilize excess capacity and enter the doors market.
Candidate: Let us then look closer at the market. How do the current mom and pop outfits serve the
market?
Interviewer: They get an order for doors, for which there are approximately 10 different styles, and they
generally deliver the finished products within two to three weeks.
Candidate: Could our client deliver a more differentiated product in less time?
Interviewer: Our client has six warehouses and production facilities across the U.S. and he believes he
can deliver an order of doors anywhere in the US within two days.
Candidate: Time is one way in which our client can differentiate his business. Can he also produce a
differentiated product?
Interviewer: The client can deliver whatever the customer wants.
Candidate: If this is the case, then our client can differentiate his business. The question now arises as to
whether this industry needs this type of differentiation, or “consolidation”, and whether it is sustainable in
the long run. I’ll start by asking if anyone has tried this before?
Interviewer: Not that we know of, but I am interested in your thinking. What are you trying to discover?
Candidate: If there is a reason that this industry is so fragmented, and if there is a reason that 10 styles of
doors delivered within two to three weeks has proven a successful business model.
Interviewer: We believe that is correct! The business exists in its current form because that is what the
market demands. There is no great need for more than 10 different styles of doors. In fact, builders prefer
fewer styles because it makes their plans more uniform. As for time, builders know well in advance when
they need doors, so they plan their orders accordingly. Quick turn around is of no great benefit to them.
So what is your advice to the client?
Candidate: I’ll tell him to stay out of this market. It is fragmented for a reason. He can bring no great
competency to the market through which he will derive competitive advantage and his capacity could
probably utilized in a more fruitful manner.
Interviewer: Great! That’s actually what the client ended up doing.

Is It a Good Idea to Open a Classical Music Radio Station in Philly?
Consulting Firm: ZS Associates first round job interview.
Industry Coverage: mass media & communications.
Case Interview Question #00470: The Philadelphia WFLN was primarily a classical music radio station.
The call sign WFLN (which stood for “Franklin Broadcasting”) was originally assigned in 1949 to a
Philadelphia FM radio station located at 95.7 MHz. In 1956, WFLN (900 kHz) was started as a simulcast
of the FM programming. WFLN was sold in 1985 and became WDVT. WFLN-
FM continued operations until 1997 when it was sold, changed format and was renamed WXXM.
For quite some time WFLN was the only classical music radio station in Philadelphia, but recently it
changed its format to alternative music after it was bought out by a new owner. As a result, there is now
no classical music radio station in Philly. What do you think about the prospects of opening a new
classical music radio station in Philly?
Possible Answer:
Candidate: Very interesting case. I’d like to take a look at four major “buckets of questions”.
First, is there in fact a Market for classical music in Philadelphia? How many people are interested in
classical music? What types of segments exist among radio audiences?
Secondly, let’s look at the Customers, not just the consumers who will listen, but actually the advertisers
who will be generating revenue for the radio station.
Also, what sort of Competition exists, not just radio stations, but other forms of entertainment media for
this audience.
Finally, what sort of Company would need to be built, and how would I get the resources and expertise
needed to run a classical music radio station?
Interviewer: Sounds like a good structure. Let’s talk about the market first. Philadelphia has about 2
million people in it, but let’s take the entire listening audience of the greater Philadelphia area to be about
4 million.
Candidate: OK. The first segment I’ll look at is what I’ll call the “mature” segment – listeners who are 60+
years old. Assuming a uniform distribution of people across ages 0-80 (approximate average life
expectancy), that places a quarter of the total audience, or 1 million people in this segment. This is
probably a good target for classical music, since these people probably have had greater exposure to
classical music during their lifetimes, and are probably more receptive to classical music than other types.
Next, let’s take the “youth” segment for children aged 10 and under. This segment, using the same logic,
is about 500,000 people. This is a terrible segment for our classical music radio station.
Next, let’s talk about a “professional” segment. These are people in white-collar jobs, with higher
education and income, and also some exposure to classical music. This is another good segment for our
station, and I’ll estimate their number at about 1 million.
Last, the “other” segment consists of everyone else in the Philly listening audience, most of whom are not
classical music fans. This last segment, numbering the remaining 1.5 million, has a wide range of
individual tastes, and thus may be a fair segment for us.
Assuming 100% of the mature segment, 50% of the professional segment, 33% of the other segment,
and 0% of the youth segment are potential listeners, this makes a maximum audience of 1 million * 100%
+ 1 million * 50% + 1.5 million * 33% = 2 million people.
Interviewer: Good, but why do you assume that the professional segment is more likely to listen to
classical music than the other segment?
Candidate: Professional workers tend to have higher than average education and income levels, thus
allowing them broader exposure to music beyond the pop music our other segment receives.
Furthermore, much interest in classical music may be due to having music lessons as a child, which are
expensive and predominantly available to only higher income, professional consumers.
Interviewer: OK. Let’s talk about the customers.
Candidate: Given that we have a potential audience of 2 million listeners, I think we can convince
advertisers that we have a compelling targeting potential for their brands, products, and services. This is
particularly true since there is no real competition for us in classical music radio.
Interviewer: Are advertisers the only source of revenue?
Candidate: Not really. We can always try to get donations from consumers and corporations as a sort of
“arts” sponsorship, as public radio and television do frequently.
Interviewer: Great! For now, let’s concentrate on advertisers. How much money do you think we can raise
using advertisements for revenue?
Candidate: Advertisers are willing to pay a higher CPM (cost per thousand views) for specific, targeted
opportunities that reach consumers who are likely to be interested in their brands. From my own
background, I’m familiar with CPM rates for Web banner ads, which range from $20 to $75 CPM
depending on how focused your Web page is. Since we offer a reasonably specific customer segment
base, I’ll assume we can charge $50 CPM, which is towards the high end, but not as high as a very
specific Web site.
I’ll assume that we don’t get the entire potential audience of 2 million, but only one-twentieth of that. With
an audience of 100,000, that yields $50 per thousand * 100,000 = $5,000 per ad.
Interviewer: How do you feel about that figure?
Candidate: It sounds way too high to me.
Interviewer: You’re right. Why do you think it’s too high?
Candidate: Since radio is a mass broadcast medium, there’s really no way to tell if anyone is listening or if
the right people are listening. With a Web page, you can definitely keep track of traific and ensure you are
getting your money’s worth in pageviews from consumers if nothing else.
Interviewer: Good. Let’s use a figure of about 1% of what you had calculated.
Candidate: If ads cost $50 for advertisers, we then need to determine how many ads we can run per day.
Assuming one-tenth of airplay time is ads, that makes about 2.5 hours per day of ads. Let’s further
assume the average ad is 30 seconds long. This yields $50 per ad * 2 ads per minute * 60 minutes per
hour * 2.5 hours per day = $15,000 per day in advertising revenue. Since you can sell ads every day,
$15,000 times 365 days per year = $5,475,000 in potential advertising revenue per year.
Interviewer: Does this sound like an attractive opportunity to you?
Candidate: We have to look at the costs of establishing and running the business first. Since I don’t have
any experience in radio or classical music, I need to hire a station manager who can run the daily
operations. Let’s assume a salary plus benefits package of $150,000 annually is required. Next, let’s
assume a rotation of 10 DJ’s to play different programs and provide variety, at a package worth $60,000
each per year. We’ll also need some MBAs to do marketing to get advertisers and drum up publicity, say
3 MBAs at a package of $100,000 per year. Finally, let’s assume a staff of 10 people for various support
and service functions, each at a cost of $40,000 per year. This makes total staff costs $1,500,000 per
year.
Next, we’ll have to get the equipment lined up. We can probably lease a tower instead of buying one, so I
will assume a cost of about $20,000 per month for $240,000 per year. Also, we’ll have to lease the land
and building that we’ll place the tower on. We won’t have to set up directly in downtown Philly, so we can
probably get a small building lease for about $5,000 per month, or $60,000 per year for the real estate.
Next, we’ll need to lease the radio equipment—receivers, amplifiers, etc. This will be a bit more expensive
than a standard home system, so let’s assume another $5,000 per month for $60,000 per year. Finally,
let’s go and buy the CD library we’ll need-assume 1,000 CDs at $10 each for $10,000. This brings the
facilities costs to $370,000.
Last, let’s make an initial advertising blitz for $50,000, and then spend $5,000 on advertising per month
after that. This makes the first year’s marketing budget $110,000.
Total costs of running the station are thus $1,500,000 + $370,000 + $110,000 = $1,980,O00.
Interviewer: Does this sound like a good opportunity to you? Should we do this?
Candidate: With an upside of nearly $5.5 million per year for an annual cost of only $2 million. Yeah, I
think this is a great idea. We should definitely do this!
Interviewer: Excellent job! Let’s just stop here for the case. So, tell me why you want to be a management
consultant.
What is the Market Size of Pianos in the United States?

Consulting Firm: ZS Associates final round summer internship interview.
Industry Coverage: sports, leisure, recreation.
Case Interview Question #00456: Our client The Gibson Guitar Corporation is a manufacturer of
musical instruments based in Nashville, Tennessee, United States. Their major musical instrument
product lines are acoustic guitars, electric guitars, and bass guitars sold under a variety of brand names.
With a history of over 100 years, Gibson Guitar has been one of the companies
that have revolutionized the development of both the acoustic and the electric guitar.
Recently, the client is thinking of expanding their business by entering into piano market. We are hired by
Gibson Guitar to estimate the market size of pianos in the United States. What do you think annual sales
(total revenues in USD) are in the US for pianos?
Possible Answer:
I am thinking there are two types of piano buyers, personal households and institutions. Of those, a
certain percentage already own a piano. Piano buyers, in a given year, would be divided into:
 First-time piano owners
 Upgrading an old piano or replacing a damaged piano
 Adding a second piano (small for households, larger for institutions)
Then, I would need to estimate who these buyers might be.
1. Households
There are approximately 300 Million people in the US. Assume average household is 3 people (which
might be a bit high due to many single people). So, 100 Million households in total.
From there deduce how many are in the $75,000/year income bracket, as they are most likely to
purchase a piano (for example, 25%, which equals 25 Million households).
Out of those 25 Million, assume 5% currently own a piano already (1.25 Million Pianos). If I assume every
year, 2% of the 25 Million will buy a new piano, then there are 500K pianos sold to households every
year.
2. Institutions
Follow a similar logic for institution piano buyers – e.g. colleges, universities, symphonies, Carnegie Hall,
bars/businesses, etc. Assume that there are 1 million of these institutions, of which 20% (200K) would
want a piano. Of that, perhaps 5% buy a piano every year, or 10K pianos sold to institutions.
3. Calculations
Then, I would need to figure the average price paid per piano. It is important to distinguish between new
and used piano sales, as the price points are different.
 In the New Piano market, I would think the low price for a piano is $5,000 and the high price is
$15,000, so the average price of a new piano is $10,000.
 For a Used Piano, the low is probably $1,000 and high is $5,000, so the average price is $3,000.
I would venture that 20% of pianos sold are used and 80% are new for both households and institutions. If
this is the case, 510K * 20% = 102K total new pianos are sold and 510K * 80% = 408K used pianos are
sold every year.
To make the numbers simple, use 100K and 400K. This leads you to $10,000 * 100K = $1B in new piano
sales and $3,000 * 400K = $1.2B in used piano sales, or $1B + $1.2B = $2.2B in total annual sales.
Notes:
Like every other market sizing or estimation case, the key to this case is to demonstrate a logical way of
sizing the market. You need to make some assumptions, and show your way of getting to an answer. The
actual numbers aren’t as important as the logic behind the problem solving process.
Fosun to Sell 80% of Its Aluminum Alloy Wheels to U.S.

Case Type: market sizing; market entry.
Consulting Firm: Roland Berger Strategy Consultants first round summer internship interview.
Industry Coverage: automobile, motor vehicles.
Case Interview Question #00435: Our client Fosun International Limited is a large Chinese
conglomerate incorporated in Hong Kong and headquartered in Shanghai. As one of the largest private-
owned conglomerates in Mainland China, the client has a lot of cash on its hands. Recently, they decided
to invest their money in an aluminum plant that, by the end of this year, will have
a full production capacity of 8 million aluminum alloy wheels annually.
Fosun’s senior management assumes that it will be able to sell 20% of its production in the domestic
Chinese market. The company has hired Roland Berger Strategy Consultants to determine if it can sell
the remaining 80% of its annual aluminum alloy wheel production to the US market, which is the largest
vehicle market in the world. What do you think?
Additional Information: (to be provided to you if asked)
 17 million new vehicles are produced in the US each year. 70% of them are equipped with
aluminum alloy wheels.
 10% of used car owners whose cars are less than 5 years old buy aluminum alloy wheels.
 85 million cars are in the “after market” (used cars), 24 million of which are less than 5 years old.
 Most car companies will select one supplier who will supply the aluminum alloy wheels for the
entire life-time of a car model. Suppliers are usually selected 24 months before a new car model goes
into production and have stringent quality controls.
Suggested Approach:
This case is essentially asking the candidate to do two things:
 Determine the size of the U.S. car market so that the candidate can understand the relative
impact of the Chinese company’s goals.
 Assess the feasibility of entering the U.S. market and provide suggestions on how the client
company might go about doing so.
1. Market Sizing
First, the candidate should determine how many wheels the client could supply to the US market – both in
number of wheels and in number of cars (1/4 of the wheel number). Then ask about the size of the US
new car market and the secondary market (used car) to determine what share the client company would
need to capture to sell 80% of its aluminum alloy wheel production in the US.
2. Feasibility and Possible Actions

This is where the candidate need to drill down to uncover automobile industry dynamics:
 How do OEMs (original equipment manufacturers) get the wheels for the cars they produce?
 How would a Chinese company distribute its wheels to the US market? Directly or through
intermediaries?
 How entrenched are supplier relationships? Do OEMs buy based on price only, or do the
relationships matter too?
 What regulations are involved in supplying an OEM?
Once you understand how the supplier-OEM relationships work, you can provide some suggestions on
how the client company might feasibly enter the US market.
Possible Answer:
Candidate: OK, I’d like to first determine the production figures of the Chinese manufacturer and compare
them to the size of the total US automobile market. This will help me understand the relative size of the
Chinese company’s production numbers and whether their plan is realistic. Once I know how much
market share the Chinese company wants to capture, I’d like to discuss the US automobile industry
dynamics to determine if and how the Chinese company should enter the market.
Let’s start with their production numbers. Let’s assume that cars require only 4 aluminum alloy wheels
and that spare tires are made out of some less expensive material. This means that your client produces
wheels for 2 million cars per year. 80% of 2 million gives us wheels for 1.6 million cars, which we are
trying to sell in the US. So how big is the US new car market and how large is the secondary market
(people who buy aluminum alloy wheels for a used car)?
Interviewer: About 17 million vehicles are produced in the US each year. About 70% are equipped with
aluminum alloy wheels. About 10% of used car owners whose cars are less than 5 years old buy
aluminum alloy wheels.
Candidate: That means that roughly 12 million new cars each year are sold with aluminum alloy wheels.
Can we assume that there are about 280 million cars in the after-market, about 1 car per person,
considering that people in New Jersey own on average 2 cars?
Interviewer: No, that number is much lower. There are about 85 million cars in the after market, but only
about 24 million are less than 5 years old.
Candidate: I see. That means the after-market is about 2.4 million sets of aluminum alloy wheels per year.
Considering that your client needs to sell 1.6 million sets, they’d have to capture a 66% market share,
which seems very unlikely in such a fragmented market. That means we should probably focus on the
new car market. How do the major car companies procure the aluminum alloy wheels they put on their
cars?
Interviewer: That’s a good question. Most companies will select one supplier who will supply the
aluminum alloy wheels for the entire life-time of a car model. Suppliers are usually selected 24 months
before a new model goes into production and have stringent quality controls.
Candidate: We probably would have to add another 12 months to even get on a company’s preferred
supplier list, which increases the lead time to about 3 years before we can hope to supply aluminum alloy
wheels to a major US car manufacturer. Since you mentioned earlier that your client’s plant will be ready
for production by the end of this year, this does not look like a viable option either. What about trying to
expand distribution on a broader basis than just the US?
Interviewer: They thought about that as another option, but they would really like to work with just the US.
Candidate: Assuming that your client can produce quite a bit cheaper in China than most competitors can
in the US, it might make sense to sub-contract some of this production capacity to suppliers of the major
US car manufacturers. This is probably less lucrative than selling directly to end-customers or car
manufacturers because the client would have to share its profit margin with the supplier. That said, it
would probably be the most efficient way to enter the US market on a large scale.
Interviewer: Great, this is exactly what they did. Let’s just stop here. Do you have any questions for me?
P.F. Chang’s to Open 3 More Restaurants in Houston

Case Type: add capacity, business expansion; market sizing.
Consulting Firm: Boston Consulting Group (BCG) first round job interview.
Industry Coverage: restaurant & food service.
Case Interview Question #00431: The client P.F. Chang’s China Bistro, Inc. (NASDAQ: PFCB) is an
American Chinese food restaurant chain located in the city of Houston, Texas, United States. The
restaurant chain was founded by Paul Fleming (P.F.) and Philip Chiang (Chang) 15 years ago with the
help of their families and friends.

The P.F. Chang’s restaurants serve American Chinese cuisine from a menu originally conceived and
planned by chef Philip Chiang. In the past 15 years P.F. Chang’s has grown to a chain of 10 restaurants
in the greater Houston area. Recently, the two co-founders have been contemplating expanding their
business. Your consulting firm (Boston Consulting Group, BCG) has been retained to advise them. What
options do they have and how would you help them analyze these opportunities?
Suggested Structure:
1. List possible growth options
 Open more restaurants in the Houston area.

 Venture into new business opportunities: Open Chinese-to-go joints, fast food stands, enter
packed food or frozen food business, etc.
 Expand into other geographic regions.
2. Evaluate options from the 3C’s (Customers, Competitors, Company)
 Market/Customer
 Evaluate market growth: Is there demand?
 Market changing trends
 Customer need
 Competitive Landscape
 Direct competition
 Indirect competition
 Possible competitive response
 Client company’s own capabilities
 Resources: financial, human capital
 Potential risks
Possible Answers:
Interviewer: So which do you think will be the first option you would like to evaluate?
Candidate: I would first like to go with trying to find opportunities of growth within Houston. I believe we
have a competitive advantage as we know the market, have the resources in place and should focus on
becoming a market leader.
Interviewer: Let’s go with growing in Houston. What is the first problem you will address and how will you
do that?
Candidate: The first issue will be that of evaluating demand. To do so I am going to look at the following:
 Growth of local business

 Present company growth.
 New companies moving into the region.
 Changes in the population of younger people.
 The national economic trends (Micro-Macro economic issues).
 Customers
 Who is our customer?
 Which economic and age segment does the customer belong to?
 How many times does the customer visit the restaurants?
 How is this population demographic changing?
 Company
 How are our present restaurants performing?
 Is there waiting time?
 If so how much is it?
 Competitors
 How is our competition performing?
 Direct competition: other Chinese restaurants
 Indirect competition: fusion food, ethnic / international food chains such as Korean,
Japanese, Thai, Vietnamese, Mongolian, Malaysian, Mexican, etc.
Interviewer: Let us assume that P.F. Chang’s is the only Chinese bistro chain in Houston. The total
number of other similar food chains are about 100. Go ahead and evaluate the market.
Candidate: I would like to get the following information:

 What are the business hours for the P.F. Chang’s restaurants?
 Is there any difference between the lunch and dinner dining structure? (Buffet vs. A-la-carte)
 What is the average waiting period?
 Finally, how are economic and demographic changes taking place in Houston in regards to
population shift and growth?
Interviewer: The place is open for lunch from 10:30 AM to 3:30 PM and for dinner from 5:30 PM to 10:30
PM. The peak waiting time is one and a half hour. Each restaurant has a seating capacity of 80 people.
Peak time lasts for four hours in a day. Present population in the customer segment is 200,000 and is
growing at 10% annually.
Candidate: If we assume average eating time of half an hour per table, then 80 people * 1.5 hour / 0.5
hour = 240 people. Therefore, the restaurant will need to add approximately 240 more seats to address
the waiting time. This can also convert into the need of a new restaurant with a present demand of 240.
Also, we need to take into consideration people who are turned away due to the long wait. Assuming
during the four hours peak time, 40 people are turned away per hour, thus 160 people a day.
A rough estimate of 400 people (240 + 160 = 400) multiplied by 10 restaurants amounts to 4,000 people
daily.
In addition, yearly customer population growth of 10% adds additional 20,000 potential clients to the list.
Assuming that they eat at P.F. Chang’s once a month, this will add to 20,000 * 12 = 240,000 more yearly
and approximately 240,000/365 = 660 daily.
Add all the demand together: 4,000 + 660 = 4,660 people. This would amount to the need to opening 3
more restaurants because currently each restaurant has a maximum capacity of 80 people * 10 business
hours / 0.5 hour = 1600 people.
These numbers show a great upside potential for growth in our own region and we have not even
exploited the possibility of attracting other customers and carried out detailed analysis of people going to
similar restaurants.
Interviewer: Now that you have found out a need for opening 3 more new restaurants, what factors would
you take into consideration while choosing a location?
Candidate: There are two factors I will take into account:
1. First is to check which areas are growing in population. If people are moving towards the suburbs
or if new residential areas are being developed.
2. The other area of potential growth would be to check for parts of the city becoming “hot spots”. If
a particular region is being revived as an entertainment district with new restaurants, bars, movie
theaters, etc.
Interviewer: Do you see any competitive threat? If so how will you address it?
Candidate: If I understand correct there seems to be very high demand for Chinese food. Such a demand
can always motivate new players to enter the market. The goal should be to continuously keep growing
so that it does not make economic sense for some other player to enter.
Interviewer: Well, why don’t you summarize our discussion?
Candidate:
 The Chinese food market in Houston seems to have a very high potential of growth
 Our back of the envelope market sizing calculations show that we can build at least 3-4 more
restaurants
 The competition is not very strong and we have the capabilities to build the restaurants
 We will, of course, have to dig deeper into the financial situation of the client company before
proceeding.
My recommendation would be to capture the complete Houston market with new restaurants and then
look for opportunities to enter other geographic locations.
Comments:
This case was given by the BCG during the first round interview process. It is quite typical of the BCG
cases of starting with a totally abstract situation and eventually digging deep to the details. The case has
been modified a little to incorporate a structure to the problem which was not originally presented in this
detail during the actual interview.
California-Based Republic ITS to Expand into Manhattan

Case Type: market entry, new market; market sizing.
Consulting Firm: Oliver Wyman first round job interview.
Industry Coverage: transportation; engineering & construction.
Case Interview Question #00407: Our client Republic Intelligent Transportation Services, Inc. (Republic
ITS) is a licensed electrical contracting and transportation engineering company headquartered in Novato,
California, United States. Republic ITS specializes in traffic solutions and services which include the
installation, maintenance, testing, repair, and replacement of traffic signals,

streetlights, digital cellular technology upgrades, call boxes, etc. It was acquired by Siemens (NYSE: SI)
in September 2010.
The client is a small company operating mostly in California. Recently, however, they are considering
expanding into the Tri-state market (New York, New Jersey, and Connecticut), especially Manhattan in
New York City. They want our help to determine whether they should enter the Manhattan market or not.
How would you go about it?
Additional Information: (to be provided to you upon request)
 What is client’s goal of market entry? — Increase revenues and profits (no specific ROI target)
 Is the scope of the case to determine only entry into the Manhattan market? — Yes
 Does the client manufacture signals? — No, client only installs and maintains them.
Possible Answers:
I. Issue Tree & Qualitative Analysis
Candidate may propose analysis / action in:
1. Market
 Market size and growth

 Competition
 Business model
2. Revenues
 Installation revenue
 Maintenance revenue
3. Costs
 Installation costs
 Maintenance costs
Possible follow-up and guidance to interviewer:
 Market size and growth – ask the candidate to size the Manhattan market for traffic signals.
 Competition – Incumbent is the largest traffic signal company in the Northeast region.
 Business model – Single contract for maintaining ALL traffic signals in Manhattan. Contracts
awarded by bidding to highest bidder.
II. Quantitative Analysis
1. Estimate the market size of traffic signals in Manhattan.
Provide the following information/hint if asked:
 Revenue streams include installation and maintenance.

 Maintenance to be done for ALL signals and NOT only newly installed ones.
 Price of one traffic signal system – $100,000 (installation). Maintenance fee – 15,000/year.
 Assume that streets in Manhattan are vertical and horizontal. Use the number of streets to
determine the number of intersections.
 The candidate should also estimate how often the traffic signals are replaced.
Possible Solution:
 Approximate Manhattan into a rectangle of 80 streets long and 25 streets wide to account for the
tapered shape of Manhattan. Hence, 80 * 25 = 2000 intersections.
 Assume each intersection has 1 traffic signal system.
 Suppose that each traffic signal system lasts for 20 years. Hence, 1/20 of signals are replaced
every year.
 Installation market: $100,000 * 2000 * 1/20 = $10M
 Maintenance market: 2000 * 15,000 = $30M
2. Calculate the NPV (Net Present Value) of the project
Provide the following information if asked:
 Duration of contract = 3 years

 Cost of one signal system = $85,000
 Cost of Transportation = $0 (it is sourced locally)
 Cost of Installation: Labor
 5 workers
 Wage rate/worker/hour = $35
 Time per signal system = 6 hours
 Cost of Maintenance: Labor
 2 workers
 Time per signal system = 4 hours
 Number of maintenance incidents per year = 2
Possible Solution:
Costs:
 Cost of installation = 5 workers * $35/worker/hour * 6 hours = $1050 per system.

 Cost of maintenance = 2 workers * $35/worker/hour * 4 hours * 2 = $560 per system.
NPV calculations:
 Revenues
 Year 1: $10M installation + $30M maintenance = $40M
 Year 2: $40M
 Year 2: $40M
 Costs
 Year 1: ($85,000 + $1,050) * 2000 * 1/20 (installation) + $560 * 2000 (maintenance) =
$8.60M + $1.12M = $9.72M
 Year 2: $9.72M
 Year 3: $9.72M
 NPV = $90.84M
III. Recommendation
Yes, the client should enter the Manhattan market and bid for 2 reasons:
 It is a profitable venture – $90.84M NPV.

 It is strategically important – Manhattan is the largest market in the US. This will take us to the big
time.
There is no right answer as to how much to bid, but a sample case is for bidding at a loss – say $120M.
Potential Risks:
 Implementation risk since we have not done such a large city before.
Nest Steps:
 Investigate historical bids by competitors in previous contracts

 Understand the strategic implications of this market entry and figure out how high we can bid in
terms of potential economics benefit s in future
Bonus Question: Why do we want to bid at a loss?
Strategic importance of the contract – it can get us into more markets in future. New York City is the
largest city in the US, and Manhattan is the largest signal market!
Capital One Evaluates Credit Card Market of Mexico

Case Type: market entry, new market; market sizing; industry analysis.
Consulting Firm: Capital One final round job interview.
Industry Coverage: financial services.
Case Interview Question #00405: Capital One Financial Corp. (NYSE: COF) is a U.S.-based bank
holding company specializing in credit cards, home loans, auto loans, banking and savings products.
Recently, Capital One is analyzing growth strategies for its credit card business in a developing country
(Mexico). The goal is to focus on individual clients to whom it offers internet
banking and retail channels. The company wants to measure the opportunities in individual credit cards
as a stand alone business.
The target country Mexico has a population of ~100 million. The most representative demographic
segments are as follows:
 High Income: > $3,000/month

 Middle Income: > $1,000/month and < $3,000/month
 Low Income: < $1,000/month
As a financial solution advisor working on this project, you have been asked by the project manager to do
the following two analyses:
1. Estimate the Market Size of the individual credit card business for each of the demographic segments
in Mexico.
2. Identify the most attractive customer segments for Capital One.
Question #1: Before we commence that analysis, first tell me how you would go about assessing the
potential of this new business.
Possible Answer:
One way to measure market potential is by annual revenues. The different sources of revenue for credit
cards are:
 Interest Income: interest rate * average outstanding balance
 Transaction Income: transaction fee * average consumption
 Membership Fee Income: Annual membership fee * number of credit cards.
The interviewee should also suggest other factors he/she would take into account including:
 Costs associated with the different segments; such as Administrative Costs, Risk Cost, Service
Cost and Marketing Costs.
 Competitor analysis: who are the key players in the market and which segments are most
competitive?
 Brand positioning: is current brand positioning compatible with the most attractive segments?
 Current coverage: is Capital One ready to serve the most attractive segments in terms of
geographical coverage for retail and in terms of customer service (e.g. sophisticated support for High
income and straightforward support for Low income)?
Question #2: Let’s now turn to the first analysis the project manager has requested. What is the
approximate market size in dollars for this business in Mexico?
Possible Answer:
Below is one suggested answer, but obviously a number of approaches might legitimately be used.
The first step is to go from the population of Mexico to the number of credit cards. The interviewee should
realize that not everybody will have a credit card; people under-age or without any income should be
excluded. In a developing country like Mexico, we can assume that 50% of the population might have
access to a credit card. Next we should breakdown the qualifying population into the three demographic
groups to then calculate the number of credit cards:
 High Income: 10% of qualifying population, average of 2 credit cards per person.
 Middle Income: 20% of qualifying population, average of 1 credit card per person.
 Low Income: 70% of qualifying population, average of 0.5 credit cards per person.
Total population = 100 MM. The number of credit cards by segment and total would be
Customer
segment Customers Credit cards per customer Total cards
High 5 MM 2 10 MM
Middle 10 MM 1 10 MM
Low 35 MM 0.5 17.5 MM

Total 37.5 Million
The next step is to calculate Capital One’s potential revenues from different sources.
a. Interest Income: At this point, the interviewee should be provided with the monthly interest rates and
average outstanding balances per credit card for the three segments:
 High Income: 4% interest rate, $0 average outstanding balance.
 Middle Income: 7% interest rate, $300 average outstanding balance.
 Low Income: 10% interest rate, $140 average outstanding balance.
b. Transaction Income: For this calculation, provide the interviewee with the following information: the
transaction fee is 1%, and the average annual consumption per credit card for the three segments is:
 High Income: $3,000/year consumption
 Middle Income: $2,000/year consumption
 Low Income: $1,000/year consumption
c. Annual Membership Fee: Provide the interviewee with the following information when he/she gets to
this point: the annual fee is fixed and is different for the three segments:
 High Income: $70 membership fee
 Middle Income: $50 membership fee
 Low Income: $30 membership fee
Based on this information, the total revenue for the credit card market is summarized as follows:
Customer Segment High Middle Low Total
10 10
Total # of Cards MM MM 17.5 MM 37.5 MM
Interest Rate 4% 7% 10%
Average balance per month $0 $300 $140
Interest income per customer per

year $0 $252 $168
a. Total Interest Income (MM) $0 $2,520 $2,940 $5,460
Transaction fee 1% 1% 1%
Consumption per customer $3,000 $2,000 $1,000
b. Total transaction fee (MM) $300 $200 $175 $675
Annual fee $70 $50 $30
c. Total annual fee (MM) $700 $500 $525 $1,725

Total Income (MM) $1,000 $3,220 $3,640 $7,860
Question #3: What is your assessment of the most attractive segments for Capital One?
Possible Answer:
The figures in above Section 2 show that the biggest segments are the Middle and Low income
segments. But to make a final recommendation the interviewee should take other aspects into account,
some of them mentioned above.
The Low income segment is the largest in terms of income opportunity but will require the following
considerations:
 Higher default probability (discounted in the interest rate but not in terms of administrative costs)
 Higher costs because it requires a higher number of cards and clients to serve
 Higher marketing expenses if the current Capital One brand positioning is not compatible with the
segment (as hinted by the case description)
 Higher cost to serve, since this segment is less likely to use low-cost automated channels (e.g.
Internet-based online banking, telephone banking, etc) and will require new branches to service the
segment.
On the other hand, the Middle income segment is slightly smaller in terms of income opportunity but may
be more attractive given the factors mentioned for the Low income segment. The cost advantages are
impossible to quantify with the available information. However, they are strong enough to conclude that
the Middle income segment is the most attractive to Capital One. The interviewee should be able to
identify some of these items or additional ones and reach to the same conclusion.
How Much Money Do You Need to Retire from Consulting?

Case Type: market sizing; estimate or guesstimate.
Consulting Firm: Simon Kucher & Partners (SKP) final round job interview.
Industry Coverage: publishing, mass media & communications.
Case Interview Question #00403: You’ve made it to the final round of Simon Kucher & Partners (SKP).
After you walk into the office of a senior partner who is going to interview you, he tells you that he
has been thinking about writing a book on “Business in China”. He further

explains that his goal is to retire from the consulting business and make a living off the book. He wants to
know if it’s a good idea and if he’ll make enough money to retire. What would you tell the partner?
Possible Answer:
Both questions in this case (Is it a good idea? Will he make enough money from the book to retire?) are
driven by the same answer – How much money will the book make for the SKP senior partner? The
following is one possible solution to solve this case.
Solution Structure:
 How big is the U.S. market for business books on China?
 How much of the market value does the author actually receive?
 How much does the SKP senior partner need in order to retire now?
1. Market sizing for business books on China:
Start with the US population of 300MM. Let’s bracket them by age in groups of 20-year spans and
assume an even distribution (75M in each age bracket):
Age population
0-20 75MM
20-
40 75MM
40-
60 75MM
60+ 75MM
 Thus, the number of adults (age 20 and older) in the United States = 225MM, round to 200MM.
 Among the 200MM, the number of people who are interested in business books = 20% = 40MM.
 Among the 40MM, the number of people who are interested in business books on China = 5% =
2MM.
Gut check: Do you really think your new book can sell over 2 million copies? No Way!
Re-estimate: 200MM * 10% * 1% = 200,000 copies (more realistic)
2. How much does the author actually receive?
Assume $20 retail price for the book.
Value Chain for the book
 Retailer Cut: $3.00

 Marketing Costs: $3.00
 Manufacturing Costs: $5.00
 Publisher Cut: $5.00
 Author: $4.00
 Total: $20
Total Royalties for the author: 200,000 * $4.00 = $800,000
3. Can the senior partner retire now?
Wrap up the case by asking the interviewer if $800,000 is enough for him to retire. Depending on his life
style, it may or may not be enough.
How Many TV Sets Are Sold in the UK Each Year?

Consulting Firm: LEK Consulting first round summer internship interview.
Industry Coverage: consumer electronics.
Case Interview Question #00379: How many TV sets are sold each year in the United Kingdom (UK)?
Possible Answer:
To crack this market sizing case, it is best to take a “demand” based approach. The candidate might
begin by categorizing UK TV sets buyers into two large segments:
1. Residential users.
2. Commercial users.
1. For the first segment: residential market, to estimate the number of TV sets bought each year the
candidate could start from the UK population/households.
 There are about 60 million people in the UK.

 Assume average household size is 3 persons, then the number of UK household is ~20 million.
 Assume each household owns 1.5 TV set on average (some may own 2 TV sets), then the total
number of TV sets in UK household is ~30 million.
 Assume that an average household buys a new TV set every 4 or 5 years, then the demand in
one year would be 30 million / 4 = 7.5 million.
2. For commercial market, the candidate has to figure out who are the users first. So, who need TV for
business purpose?Off the top of my head, hotels! What else? You may also list companies, government
office buildings, universities dorms, bars, restaurants, airports, etc.
A. Hotels
To simplify calculations, assume that hotels have only two sizes: large and small. There are 1,000 small
hotels in the UK, with an average of 50 hotel rooms; and 10,000 large hotels with an average of 400 hotel
rooms (How would you validate these assumptions?)
 Small hotels: 50 rooms per hotel * 10,000 = 500,000

 Large hotels: 400 rooms per hotel * 1,000 = 400,000
Assume that normally hotels replace their TVs every 3 years, thus 900,000/3 = 300,000 will be replaced
each year.
Also, don’t forget that new hotels are being built every year too. If we assume the UK hotel industry is
growing at a rate of 20% annually, then the number of new TV sets to be bought for new hotel rooms will
be 900,000 * 20% = 180,000.
In total, the hotel industry will need 480,000 TV sets each year.
B. Companies
Similarly, assume there are three types of companies based on their size: large, medium-sized, and
small.
 Big companies: 1,000 * 100 TVs per company = 100,000

 Medium-sized: 10,000 * 40 TVs per company = 400,000
 Small companies 50,000 * 10 TVs per company = 500,000
Assume companies in the UK replace their TVs every 2 years, thus 1,000,000 / 2 = 500,000 will be
replaced each year.
Again, new company offices will need to buy new TVs. Assume a 10% growth rate, then 1,000,000 * 10%
= 100,000 additional TVs will be bought for company office buildings.
In total, companies in the UK will need 600,000 TVs each year.
C. Others: schools, colleges, universities (dorms, dining halls), bars, cafeterias, restaurants, airports,
government office buildings, etc.
There might be an additional ~200,000 TVs sold to these places each year.
Grand Total: 7.5 MM + 480K + 600K + 200K = 8.8 MM.

Reality Check: A recent article “Record 10M televisions sold in UK in 2009” by the Telegraph reports that
“fifteen years ago just four million new TV sets were sold each year in the UK, but in 2009 over 10 million
were sold, according to GfK, the market research firm. The figures confirmed that large-sized, flat-screen
televisions have become one of few consumer electronics that consumers snapped up in great numbers
during the recession. Falling prices, the digital switchover and the rising popularity of video games have
encouraged families to splash out on a new, larger set”.
Interviewee’s Comments:
I found it fairly straightforward to estimate the residential market for TV sets. However, I really struggled in
estimating TV sales in the commercial market. I didn’t know where to start in terms of estimating the
number of companies, hotels, bars, etc, in the UK. Fortunately, the interviewer gave me some helpful
hints. I guess the bit I found hardest about estimating the size of the commercial market was justifying
why I believe that there are ‘x’ thousand hotels or companies in the UK.
Barclaycard Analyzes the Future of UK Credit Card Industry
Case Type: industry analysis; market sizing.
Consulting Firm: Booz & Company second round job interview.
Industry Coverage: banking; financial services.
Case Interview Question #00363: Your client Barclays PLC (LSE: BARC, NYSE: BCS) is a global
banking and financial services company headquartered in London, United Kingdom. As of 2010 it is the
world’s 10th-largest banking and financial services group and 21st-largest company according
to a composite measure by Forbes magazine.

Barclaycard is the global credit card and loan business unit of Barclays plc. The Barclaycard was the first
credit card introduced in the UK, coming into service in 1966. It enjoyed a monopoly until the introduction
of the Access card in 1972. Currently, Barclaycard claims it is Europe’s leading issuer of credit cards with
10.4 million customers in the UK and 10.8 million outside the UK. You have been hired by Barclaycard to
analyze the future of the UK credit card industry.
Question #1. First, what do you think are some of the issues and challenges facing credit card
companies in the UK?
Reason behind the quesiton:
Interviewers are looking for a candidate’s ability to structure their answers to an open-ended question.
There is flexibility to concentrate on areas where you feel comfortable, e.g. market demand or internal
company issues such as operational challenges.
Possbile Answer:
There are three immediate issues facing credit card companies in the UK:
First, the UK market is close to saturation, so there are limited numbers of new customers out there and
hence growth opportunities may be limited.
Second, there has been an increase in customer switching rates between card companies — a situation
which is facilitated by the intenet. Hundreds of websites offer card comparison tools, and therefore card
offerings are now a lot more transparent.
And third, there is an increasing number of companies in this area, as non-traditional players such
supermarkets and the post office have recently emerged.
As a consequence of these three issues, competition is much greater – so credit card companies need to
put continuous effort into retaining customers and pricing competitively.
Question #2. Okay, so given that credit card companies are facing increasing competition, what do you
think they should be offering consumers?
Reason behind the question:
Interviewers may take the answer from the first question and drill down into one area. In this case, the
interviewr is testing your business intuition, and your ability to apply general knowledge to the topic at
hand.
Possible Answer:
The key drivers of competitive differentiation are price, features and service. These are not mutually
exclusive, and the mix and emphasis will depend on the target consumers and the company brand. At the
low end of the market, reducing price may be the only option, whereas at the high end, where consumers
have more money and less time, convenience and speed usually become more important. In this case, it
may be worth introducing a 24 hour customer service to attract higher end customers. However, will all
additional features and services the cost-benefits must be carefully considered.
Question #3. One feature which has recently been developed is “wave and pay” – a touchless payment
system. The consumer simply swipes a card over a reader and the transaction is complete. How many
people do you think could be using touchless credit cards in 2010 in London?
This is known as a “market sizing” case question. The most important thing to note is that although it is
important to drive to a definite numerical conclusion, the interviewer cares more about your thought
process than the answer. Of course, this is also a test of your numerical skills, and the interviewer would
like to see you to perform a rough “sanity check” at the end to test whether your answer is in a realistic
range.
Possible Answer:
Well, there are roughly 6 million people living in London. The Oyster Card’s (Oyster card is a form of
electronic ticketing used on public transport services within the Greater London area of the UK) recent
partnership with Barclaycard (A credit card variant of the Oyster card was launched by Barclaycard in
September 2007 and is called OnePulse. The card combines standard Oyster card functionality with Visa
credit card facilities) means that it is realistic that the majority of all Oyster Card users would want to own
a touchless credit card by 2010 as they would be familiar with the technology and see the direct benefit. I
estimate that 90% of the people in London own an Oyster Card as public transport is the quickest and
most convenient way to travel around London for the majority of Londoners.
However, there would be some people that live outside of London that commute to London to work, so I
estimate 30% of 6 million people are in this group — 6 million because whilst the surrounding London
area would be less densely populated than London, the georgraphical reach is much wider, and 30%
because I believe that the majority of those living outside of London perhaps don’t work in London, e.g.
those that have moved out of London for a “quieter life” or to attend university.
so, out of the 7.2 million total so far (90% of 6 million plus 30% of 6 million), the under 18s won’t be
eligible to own a credit card and it is unlikely that the older generation, say the over 60s, will be keen to
take up the new credit card technology. Cash will remain a strong contender for these groups. There will
also a small group of wealthy people who probably don’t use public transport and a small group of people
who aren’t “credit worthy”. I estimate that the total size of these excluded groups to be roughly one third of
the 7.2 million people.
This now gives me a total of (7.2 * 2/3 = 4.8) million people who will be using touchless credit cards in the
London area.
I have considered the groups of people that may not make the effort to apply for a touchless card but
believe this will be compensated by those not mentioned in any of the groups above that will sign up
purely as a response to marketing efforts. Therefore, my estimate remains as 4.8 million.
Hints & Tips:

 Use the paper provided to note down your thoughts if it helps. You can also use the paper to
draw charts or diagrams that help demonstrate your answer (bt that isn’t necessary).
 Don’t be afraid to ask the interviewer for some help if you are stuck, or at least to check that your
assumptions are realistic. Talking through your think aloud will help the interviewer follow your logic.
 Use this question as a chance to demonstrate your creative thinking. There are many paths you
can take to come up with an answer, so use this question to really impress the interviewer.
Question #4. What factors do you think might slow the take-up of touchless payment systems?
This question has been posed as a reality check. The interviewer is seeing if you can relate the question
around customer take-up back to the real world. It will be an opportunity for you to show that you
understand there are many factors at play which could affect the 3.5 million result you came up with in the
previous question.
Possible Answer:
Well, three things come to mind. One is a possible technology-cost issues, another is fraud implications
and the final one is competition.
With regards to technology, retailers will have to deal with an additional payment system if they want to
offer touchless payments on top of Chip and Pin, making the infrastructure requirements more
complicated. for example, Chip and Pin terminals may not be fully compatible with touchless readers, so
two pieces of equipment would be required. Any implementation of this new technology may also be
costly for the retailers, so it seems likely that some may be reluctant to install the touchless payments
systems.
Customers may also be reluctant to use these cards as they require no verification to make purchases,
increasing the possibility of fraud and therefore making the touchless cards unattractive.
With regards to competition, if touchless payments can only be used for transactions of £10 or less, then
usage amongst the touchless card owners could vary greatly as users may still need to carry additional
cash or the standard credit cards. Therefore, some groups, such as bigger spenders, may prefer to stick
to using one credit card which eables them to complete both low and high-value transactions.
Question #5. So, based on our discussion today, can you give me a summary of your view on the future
of the credit card industry in the UK?
The interviewer wants you to demonstrate that you can summarize the conversation concisely, picking out
the most important points, such as the “whats” and “whys”.
Hints & Tips:

 When doing this kind of summary, it might help to picture yourself passing your manager in the
office, where he/she would like you to give them a quick overview of your findings.
 Take time to recap on the discussion before speaking, so that you don’t miss out any important
points.
 Don’t repeat the whole conversation word for word as you shouldn’t be going into a lot of detail at
this wrap-up stage.
Possible Answer:
Greater competition is increasing the pressure on credit card companies to better match customer
requirements. Changing lifestyles are skewing the trend towards speedier transactions and more
convenience. For this reason, a touchless payment system may be the “next big thing” and customer
take-up should be quite high (in London in particular, due to the widespread use of Oyster Cards).
However, issues around implementation and fraud may still need to be overcome before it is widely
accepted. Perhaps the bigger challenge to come is making touchless payments a true substitute for cash.
W.S. Darley Considers Adding Capacity for Fire Truck Pump

Case Type: market sizing; growth, add capacity.
Consulting Firm: ZS Associates 2nd round job interview.
Industry Coverage: manufacturing; automotive, motor vehicles.
Case Interview Question #00317: Our client W.S. Darley & Company is a family owned and operated
business in the fire and emergency apparatus manufacturing industry. Headquartered in Itasca, Illinois,
the client mainly makes pumps for fire trucks. They offer portables, floating, high-lift booster, CAFS, PTO,
engine driven, front mount, and midship pumps with flows from 60 to 2500 GPM
and pressures to 1200 PSI.
Recently, the client company’s owner and management, the Darley family, wants to know if they should
expand their manufacturing capacity for fire truck pumps. They have two specific questions for you, a
management consultant hired to advise them: What is the market size for fire trucks in the United States?
Should the client W.S. Darley & Company expand their manufacturing capacity or not? And why?
Possible Answers:
1. For the first part of the case (sizing the market for fire trucks), I started by assuming that 10,000 people
are served by each fire station and that there are two fire trucks per station. Therefore, one fire truck
serves 5,000 people.
2. Since there are currently 300 million people in the U.S. (I used easy, round numbers), there is a current
stock of 50,000 fire trucks in the U.S. (300,000,000 / 5,000 = 60,000).
3. I then assumed that fire trucks have a useful life of 25 years. So in any one year 2,000 fire trucks need
to be replaced. (60,000 / 25 = 2,400).
4. I then added in the new fire trucks needed to serve the needs of a growing population. I assumed the
U.S. population grows 1% annually, or by 3 million people per year. Therefore, 600 new fire trucks are
needed each year in addition to the 2,400 replacement trucks. (3,00,000 / 5,000 = 600).
5. Adding (3) and (4) together, we got 2,400 + 600 = 3,000 fire trucks in total.
Final Recommendations:
The total market is 3,000 fire trucks per year.
We then discussed whether the fire truck pump company should make commodity pumps for everyone
(not a good idea, because they have a small shop and have specialized in fire truck pumps). I suggested
that the pump company could expand into fire hose fitting or perhaps even hoses because these things fit
their manufacturing expertise and marketing channel.
The interviewer corrected me when I tried to use 315 million people for the U.S. population. Keep the
numbers real simple when you do these types of estimation problems!
U.S. Bank Eyes Emerging Markets for Growth Overseas

Case Type: market sizing; market entry/new market.
Consulting Firm: American Express 2nd round job interview.
Industry Coverage: banking; financial services.
Case Interview Question #00312: Your client U.S. Bank (NYSE: USB) is the fifth largest commercial
retail bank in the United States with $321 billion in assets. Headquartered in Minneapolis, Minnesota, U.S.
Bank’s branch network serves 25 states, with a total of 3,069 banking branch offices and 5,310 ATMs.
Due to the recent financial crisis, the client has seen no growth over the last couple of years in the U.S.
domestic market. Therefore, U.S. Bank is considering pursuing growth overseas in emerging markets
such as Mexico, Brazil, Russia, India, and China. They have hired you to advise them on their oversea
expansion strategy. Specifically, they want you to help address two questions:
1. Provide a structure to evaluate whether or not the client should enter a given country.
2. Estimate the annual size of the auto loan market in Mexico (because Mexico was on my resume).
Possible Solution:
Part I: For the first part of this market entry case, I simply established the structure and then was directed
to do a market sizing within this case. We never got into any other details concerning the structure that I
had set up originally. However, my structure was as follows:
1. I first said that I would look at the current market size and growth rate of the country in question. I
would then analyze the economic and political stability of that market.
2. I would then determine if the regulations in the given country would prevent us from doing the kinds of
things that we need to do to earn a profit.
3. I then would analyze the demographic profile of the potential customers in the market (wealth, % who
use banks, etc).
4. I would then look at what banks are already in the market, is it a competitive situation?
5. In addition I would analyze what the operating costs would be (labor rates, etc).
6. Finally I would look at what the relative cost would be to enter a given market.
Part II: A market sizing was nestled within this market entry case: I was then instructed to estimate the
annual size of the auto loan market in Mexico.
Originally, I started down the population path; I assumed a population of roughly 100M people and
attempted to determine who was buying cars. Once I started to try to estimate this I realized that this
might not be the best path.
1. I reversed course and decided a better way to approach this might be to start with the number of car
dealerships. I estimated that there would be about 50 car dealerships in each major metropolitan region.
With roughly 10 major metropolitan regions (I named most of them as I was from Mexico originally) that
would be 500 car dealerships nationwide.
2. I then estimated that each car dealership would sell 5 cars a day, resulting in 2,500 cars sold per day.
With 300 sales days/year, we have 2,500 * 300 = 750,000 cars/year.
3. Assume $10,000 per car, less 10% down payment, less 10% of the people who don’t get auto loans
(pay in cash) resulting in 750,000 cars * $10,000/car * 90% * 90% = $6B. Of this number, the interest
payments would be 20% (higher than the US for obvious reasons!), resulting in an auto loan market size
of $6B * 20% = $1.2B.
Philips Electronics to Divest from Home Solar Technology

Case Type: market sizing; new product.
Consulting Firm: Alvarez & Marsal 2nd round job interview.
Industry Coverage: energy industry; electronics.
Case Interview Question #00311: Your client Koninklijke Philips Electronics N.V. (Royal Philips
Electronics, Euronext: PHIA, NYSE: PHG) is a global electronics company headquartered in Amsterdam,
Netherlands. Philips is one of the largest electronics companies in the world with €25.42 billion in sales in
2010. The company is organized in a number of sectors: Philips Consumer

Lifestyle (formerly Philips Consumer Electronics and Philips Domestic Appliances and Personal Care),
Philips Lighting and Philips Healthcare (formerly Philips Medical Systems).
Recently, the Research & Development (R&D) department of Philips has developed a new product: a
device that could replace all energy costs (electric, gas, heating, air conditioning, etc.) using solar
technology. The estimated price of the device to the customer would be $5,000/house, with a pay back in
2 to 3 years. The R&D department says that the estimated investment for the device is $100 million.
Question to you: What is the potential market for the device in the U.S.? How would you estimate the
percentage of market that will install the device?
Possible Answers:
1. Hypothesis: this device is mainly targeted at residential market.
The U.S. population is 300 million and there are ~100 households. Assuming that half of the American
people live in apartments and the other half live in houses. Therefore, there are 50 million houses in the
US = potential market size. An Net Present Value (NPV) analysis looks good here: estimating a 10%
margin on the product, total market potential = 50 million houses * ($5,000/house) * 10% = $25 Billion!
This looks even too good to be true!!
2. To estimate the percentage of market that will install the device, we could run a market survey.
Further facts revealed by interviewer: A survey shows that 30% of homeowners are interested in the
device. Additional question: How do we test this percentage?
Possible Solutions:
 Pre-order. This is risky since this would be expensive and would require a small sample (big
confidence error).
 Look at similar energy saving devices (new refrigerators, showerheads, etc), see what is the
percentage of people who actually bought it after showing interest.
The job candidate was then told that people in the US don’t buy energy saving devices. They would rather
spend their money some other way. Market therefore is small and the project was stopped.
3. Final Recommendations for client:

The potential market is too small. Right now, we should advise the client not to invest huge amount of
money in the device. These kinds of products require an important word of mouth and the company must
be ready either to spend a lot on advertising or to have a long payback period. The other solution is to
spend more on R&D to decrease the investment and the price billed to the customer.
How Many Razor-Blades are Sold in US Every Year?

Consulting Firm: Alvarez & Marsal first round job interview.
Industry Coverage: household goods & consumer products.
Case Interview Question #00309: How many razor-blades are sold in the United States every year?
Walk me (the interviewer) through your thinking and give me a final number in the end. Be sure to check
your answer for reasonableness.
Possible Answer:
This is a classical population-based market sizing case question. One of the

many possible approaches is to start by looking at the total US population, divide total US population into
different groups based on age, consuming habit, usage frequency, etc, and assign a consuming
frequency or usage rate for the target product/service to each population group. Then, sum them up to get
the final total market size. Also, remember to use round numbers, and round up or round down to simplify
your calculations. Here what matters is not how accurate your final number is, but the analytical problem
solving skills and thinking process through which you reach your final number.
A way to size the U.S. market for razor-blades is outlined below:
1. Total population of USA = 300 million. (sort of a common sense)
2. Males = 50% of 300 million = 150 million. (Assumption #1: males and females are approximately 1:1)
3. Males over 18 years old = 75% of 150 million = 110 million. (Assumption #2: only males 18+ use razor-
blades, also note that 150 * 75% = 112.5, round down to 110 million)
4. Assuming that among the 110 million males over 18 years old, 70% use shaving blades (Assumption
#3, others may go to barber shop, or don’t shave etc), thus total number of blade users = 110 million *
70% = 77 million, round up to 80 million.
5. Assuming regular razor-blade users shave every once in 2 days on average (Assumption #4), => 80
million / 2 = 40 million shaves per day.
6. Assuming that one blade is good for 4 shaves on average (Assumption #5), => 40 million / 4 = 10
million blades / day.
7. Therefore, total number of razor-blades sold per year in the U.S. = 365 days x 10 million/day = 3.7
billion.
Reality Check: According to data compiled by non-profit advocacy group National Recycling Coalition,
the US population discards each year 2 billion razor blades.
What is US Annual Market Size for Car Tires?
Case Type: market sizing; new business.
Consulting Firm: Samsung Global Strategy Group (GSG) first round job interview.
Industry Coverage: chemical industry; automotive, motor vehicles.
Case Interview Question #00300: A friend of yours wanted to start his own business. His start-up idea
was to open up a new car tire manufacturer in the US despite there being another 7 major players in the
car tire market (Bridgestone, Goodyear, Michelin, Continental, Cooper, Pirelli,

Hankook).
Since you work as a management consultant at a top firm, you were asked by your friend to help estimate
the potential for the business. First of all, you’d have to estimate how many car tires your friend’s
company can sell in a year in the US. You should walk me through your analysis and come up with a
reasonable number quickly.
Possible Answers:
This a market sizing case to estimate the US annual market size for car tires. One could start by
estimating the number of cars in the US. From there, making some assumption about average
replacement rate for car tires, one could calculate the number of car tires that need to be consumed every
year. The job candidate might say something like:
So, there are about 300 Million people in the US at the moment. I’d say 2/3 own a car, so lets say 200M
cars at the moment.For the sake of simplicity, let’s assume that my friend only wants to sell car tires and
not truck tires (the interviewer will correct me if I’m wrong), so we can forget about long haul trucks and
the like, let’s forget about SUVs with spares, etc. Of course, there are also regular cars for business use,
so let’s say roughly 100M business cars (not including trucks), so we have a total of 300M cars for
personal and business use in the US.
The next question here is what is the replacement rate? The average tire lasts, I don’t know, maybe
60,000 miles? The average person maybe travels about 12,000 miles a year, so tires last 5 years on
average. So, let’s say that roughly speaking of the 300M cars out there, every year about 60M need to
have new tires. Cars have four tires last time I checked, so that’s about 240M tires. Of course, new cars
are made each year as well, on the click of about 20M a year, and every new car needs 5 new tires (4
regular tires and 1 spare), so we could say about 240M + 100M = 340M new tires a year – that’s said,
presumably, about 20M cars also go out of commission each year, so let’s just go with 240M new tires a
year.
The next issue is how much of that total annual tire market we can capture. You had mentioned that there
are 7 major competitors, so one possible metric is simply what our “fair share” would be – and then we
can adjust from there. Based on that, I’d expect that we could theoretically capture up to 1/8 market
share, or 30M tires a year. Now, we might capture more if we have a better tire product, or a lower cost
product or some other competitive advantage. Why don’t we explore our product a bit more – are there
any obvious advantages to our product v.s. that of our competitors?
At this moment, the interviewer might reply something like:

(A) “That’s OK, assume we get 30M a year. What’s our profit?”
or he might say
(B) “Actually yes, our tire lasts forever. It never wears out.”
With (A), one might go down the path: “Well, that depends on price and cost. There are three ways we
can determine price, price based costing, cost based pricing, or comparables. Can you tell me the cost of
making this product?” The interviewer responds: “Yes, it costs us about 20x as much to make a tire as
anyone else.” You say “What?? Why? What’s so special about our tire?” He says “It never wears out”…
and then you move to B … the point here is that getting to B is critical to solving this case – if you don’t
get there you never solve it. You have to get used to digging and finding the right answer.
With (B), one might say “It never wears out? So it’s a one time sale? Well, in that case, I imagine we
could capture a LOT of the market, but it’s a one time sale, so once we’ve sold the tires what do we do
next? How much does it cost us to manufacture the tire? ” He replies, just like in A “20x as much”. At this
point, I’ll spare you the rest of the case, but essentially what you find is that if the tire costs 20x as much
then I need to price my tires at, at least, 20x that of my competitors, so a tire costs something like $2500
instead of $125 Each. Yes it lasts forever, but does that matter? The question becomes whether or not
consumers care. You’ll notice this case has gone from a market sizing/estimation problem to a pricing and
costing problem to finally a market and customer analysis problem.
Note: The last part of the case (car tires that last forever) is somewhat similar to the two “eternal light
bulb” cases “GE Defines Pricing Strategy for Eternal Light Bulb“, and “GE Develops Eternal Light Bulb
That Lasts Forever“, so you may want to check out solutions to those two cases too.
How Many Pairs of Boxers Are Sold in U.S. Each Year?
Consulting Firm: Seabury Group first round job interview.
Industry Coverage: apparel, clothing & textiles.
Case Interview Question #00275: How many pairs of boxers are sold in the U.S. each year?
Interview Tips:
This is a typical population-based market sizing case. Usually, this kind of cases have a simple format
“How many units of product X are consumed every year in country/region Y”, and can be solved
by the following approach:
 Step 1: Start with the overall population in country/region Y.

 Step 2: Calculate number of potential users.
 Step 3: Categorize on basis of usage (High, Medium, Low).
 Step 4: Assign percentages to each category.
 Step 5: Use these percentages to calculate number of people in each category and from that
calculate units of products consumed every year.
Possible Answer:
Key Assumptions:
 U.S. population = 300 million.
 People’s average life expectancy = 80 years.
 300 million / 80 years = 3.75 million, round to 4 million to simplify calculations.
 Same number of people in each age group.
 50/50 split between men and women.
 Children ages 0-10 don’t wear boxers.
Calculations:
Women Men
age % buy # per # of % buy # per # of

group population boxers year boxers population boxers year boxers
10 – 20 20 M 10% 1 pair 2M 20 M 75% 3 pairs 45 M
20 – 30 20 M 10% 1 pair 2M 20 M 50% 6 pairs 60 M
30 – 40 20 M 0 20 M 50% 6 pairs 60 M
40 – 60 40 M 0 40 M 50% 6 pairs 120 M
60 – 80 40 M 0 40 M 50% 6 pairs 120 M
Therefore, total number of pairs of boxers sold in U.S. each year: 4 + 45 + 360 = 409 million.
Finnish Calendar Publisher WSOY Eyes Danish Market

Case Type: market entry/new market; market sizing.
Consulting Firm: Quartz Strategy Consultants 2nd round job interview.
Industry Coverage: mass media & communications.
Case Interview Question #00274: Your client WSOY (Werner Soderstrom Osakeyhtio, Finnish
publishing company) provides publishing and printing services in Nordic. Based in Helsinki, Finland, it
publishes business publications, dictionaries, computer books, e-learning solutions, text books. The
company also involves in printing advertising materials, annual reports, and gift
packaging.
You are working on a project for a subsidiary of WSOY that sells annual paper-based calendars.
Specifically, you are asked for your perspective on three questions:
1. The calendar company faces some significant challenges. What do you think are the major strategic
challenges?
2. The calendar company is considering entering the Danish market. What must be considered before
deciding whether or not to enter the Danish market?
3. How big is the Danish market for calendar?
Possible Answers:
Interviewer: I have a case I would like you to solve for me. You are working on a project for a Finnish
publishing company selling annual paper-based calendars. The company faces some significant
challenges. Your team, therefore, is developing a proposal for a six-week strategy project. What major
strategic challenges do you believe this company is facing?
Candidate: Challenges could be related either to demand or supply. Do we know anything about the
character of the challenges?
Interviewer: We know that they are in the middle of outsourcing their production to low-cost countries, so
the challenges we have been asked to help with are related to the demand side.
Candidate: On the demand side, I believe one of the most likely challenges is limited growth, or maybe
even declining demand, as consumers switch to mobile calendars or the calendar on their computer.
There could also be some changes in the type of calendar people prefer – for example, many students
use free calendars, today.
Interviewer: Why would free calendars be a threat?
Candidate: I was thinking that free calendars are a threat if they replace ordinary calendars. I assumed
that the company has significant sales to this segment today with higher priced products – but I guess I
would have to test this before concluding that it is a threat and not an opportunity.
Interviewer: I follow you on that one. Let us move on to a new issue. The company is considering entering
the Danish market. What do they need to consider before entering?
Candidate: Do we know why they are considering the Danish market in particular?
Interviewer: They are looking at all Nordic markets outside their home market.
Candidate: Before entering the Danish market, they need to know the market potential – that is, the size
of the market and the growth rate. It is also important to understand whether it is a profitable market.
Interviewer: When we have analysed the Danish market and found out that it seems to be a reasonably
good market compared to our home market, what should be our next step?
Candidate: To build a sales organization in Denmark.
Interviewer: Okay, that could be relevant. But I wonder if we are missing a major point before reaching the
decision to set up a sales organization?
Candidate: Hmmm, I’m not sure…?
Interviewer: I believe we are missing the evaluation of the competitive situation and the company’s ability
to compete in this market.
Candidate: Yes, we need to compare our prices with the price on the Danish market and make sure we
are competitive. Interviewer: Anything else we should consider?
Candidate: I can’t really think of anything…
Interviewer: Normally we would investigate a few elements more before we can draw conclusions about
the company’s ability to compete in the Danish market. The relevant parameters in this case would be the
demand for the products we can offer (for example compatible formats), access to sales channels and our
ability to service the customers (for example retail) compared to competitors (selection, quantities,
delivery time, etc.). [A follow-up discussion on this part of the case then takes place before moving on to a
new part of the case.]
Interviewer: You mentioned that the market potential is important. What is your best estimate of the
Danish market for paper-based calendars?
Candidate: In order to determine the market size I would split the market into three groups:
1. Student calendars
2. Calendars for business people
3. Calendars for households/private use.
Population # of calendars per person # of calendars
Students 1.0 M 1.2 1.2 M
Business 2.5 M 0.2 0.5 M
Households/Private 2.3 M 0.5 1.15 M
Total 2.85 M
I would define the student group as people from 10 to 25-26 years of age. Hence, the group is
approximately 20% of the population, assuming a fairly equal distribution of the population in different age
groups from 0-80 years. That group amounts to about 1 million people. I’m disregarding that some
students do not study past secondary school, but I will include this in the demand per person in this
segment. Almost all students have at least one calendar, and many have two due to the free calendars or
half-year calendars. So I would assume an annual demand of 1.2 calendars per person in this group.
That’s 1.2 million calendars for the student group.
The business group includes people in the work force. If we assume these are people between from 25 to
65 years of age that would be 50% of the population – 2.5 million people. Of this group, fewer people
have work-related calendars, I believe. 20% coverage would give a demand of 0.5 million calendars per
year in this segment. I don’t think it is higher than this given the increased use of electronic calendars.
Finally, there are calendars for private use. As far as I remember, there are something like 2.3 million
households in Denmark, and I would imagine that at least one person in every second household has a
calendar for private use. This gives a demand of about 1.15 million calendars for private use.
This gives us 1.2 million calendars in the student segment, half a million in the business segment and
1.15 million in the household/private use segment. In total, it’s a market of approximately 2.85 million
calendars in Denmark.
Interviewer: Thank you. I think we will stop the case here. Do you have any questions for me?
How Many Hotel-sized Bottles of Shampoo & Conditioner?

Case Type: market sizing; estimate/guesstimate.
Industry Coverage: consumer products; hospitality, lodging.
Case Interview Question #00272: How many hotel-sized mini bottles of shampoo and conditioner are
produced each year around the world?
Possible Answer:
To crack this market sizing case, you might begin by assuming that hotel-sized mini bottles of shampoo
and/or conditioner are produced for two purposes only:
1. To supply hotels and upscale motels.

2. To provide samples for gift packs, salons, and so on.
You would then want to start by estimating the number of hotels and motels around the world that offer
the products to their guests. One way of estimating the number of hotels is to assume that hotels are
found predominantly in major cities and resorts. Figure that there are 2,000 major cities and resorts
around the world, an average of ten for each of the world’s approximately 200 countries. Assume
that each city averages 20 hotels that offer bottled hair products to their guests. Multiplying 20 by 2,000
gives you 40,000 hotels around the world that require shampoo and/or conditioner for their guests.
To understand how many bottles of shampoo and conditioner the 40,000 hotels require, you now need to
estimate the total number of uses each hotel on average represents. You can arrive at that number
through the following calculation: assume that there are 100 rooms in each hotel, and that those rooms
are occupied 50 percent of the time. Multiplying 40,000 by 100 by 0.5 by 365 (don’t forget the number of
days in the year!) gives you approximately 750 million.
However, it is probably reasonable to assume that a guest staying for longer than a day will not use a
whole shampoo bottle every day. If you assume that an average of one shampoo bottle is used for every
two occupied days in a given room, you can now divide your 750 million estimate in half to 375 million. To
get to the number of bottles of conditioner, estimate a ratio between the use of shampoo and the use of
conditioner. Since many of us do not condition every time we shampoo, you might assume that the ratio is
2:1. Dividing 375 million in half gives you approximately 190 million. Your conclusion would then be that
375 million bottles of shampoo and 190 million bottles of conditioner are required for hotel use every year.
To estimate the total market size, you can probably make things easy on yourself by assuming that the
number produced for sample purposes is a small percentage of the total, say ten percent. Combining your
two markets would give you approximately 400 million bottles of shampoo and 210 million bottles of
conditioner.
Reality Check: Finally, you might want to “reality check” your total figure. Assuming 610 million bottles
are produced and sold each year at an average price of 25 cents each, the worldwide market for
miniature bottles of shampoo and conditioner is about $150 million. Does that sound reasonable?
Will You Take Over a McDonald’s Restaurant in Frankfurt?
Case Type: market sizing; investment.
Consulting Firm: Accenture 2nd round job interview.
Industry Coverage: restaurant & food services.
Case Interview Question #00260: You get an offer to run a McDonald’s (NYSE: MCD) restaurant in the
middle of downtown Frankfurt in Germany. Just like every other McDonald’s, the restaurant itself primarily
sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, shakes, and
desserts. It contains of a seating area of 150sqm and 3 cash points. The

previous owner, however, keeps all financials secret. Should you agree to take over and run the
McDonald’s? Why?
Possible Answers:
First you want to identify the main question and develop a clear framework. In this case, since you are the
protagonist to decide on the offer, you can build the main question: I will agree to the offer if the
McDonald’s is profitable.
Next step is to open a structure to answer you question: Is the restaurant profitable? Since the previous
owner is not giving you any data, the case turns into a market sizing question with the structure: potential
profit = potential revenue – potential costs.
1. Revenue = # of customers * average order size
- How many people live in Frankfurt? (2009 population: 672,000, use round number 700,000 for
calculation).
- How many people eat fast food? (break down total population into different age groups, estimate the
percentage of people who eat fast food in each group).
- How often do they need fast food? (again, estimate the frequency in each age group).
- How many competitors are there? (KFC, Burger King, Arby’s, Wendy’s, Taco Bell, Subway, etc. Split the
# of customers over other fast food restaurants).
- When do the customers visit a McDonald’s (cyclical in the morning less, at lunch a lot and evening a lot
= how many people per hour in those three daytimes?)
Identify THE BOOTLENECK of the restaurant: only 3 cashpoints and 150sqm. (3 cashpoints is the
bootleneck because the # of potential customers > # of customers that can be served)
- How many people can be served in total and in an hour with only 3 cashpoints?
Multiply the potential customers that can be served (in a day/week/month) with the average order size
(hint: use your own experience of around 5€/order).
2. Costs
Identify the major cost drivers of a McDonald’s restaurant.
- franchise fee (depreciated)
- labour
- materials
- rent
- understand a little bit more the nature of the business
This will give you a potential profit. This is likely to be a bit negative, so you are asked in a second
question whether you have any ideas to bring this business back to profitable. Now the case turns into a
profitability problem.
Here it is important to identify that the potential demand is more than our capacity and that we can
improve revenue by increasing capacity. Think about ways to increase capacity: “mobile cashiers”, “drive
through”, etc. On the other hand of cutting costs, if you have found anything interesting and likely in the
cost sizing before.
Finally, you may be asked about a potential price of the restaurant (now it is a pricing & valuation case).
Do we get it for free? What would be otherwise the maximum paying price or how much can the
restaurant be valued? (Using multiple of the potential revenue or profit or use Net Present Value
framework).
Azul Airlines Aim to Add One More Passenger Per Flight

Case Type: market sizing; increase sales.
Consulting Firm: Ernst & Young (EY) final round job interview.
Industry Coverage: airlines.
Case Interview Question #00243: Our client is Azul Brazilian Airlines, a major Brazilian domestic low-
cost airline company based in the Greater Sao Paulo metropolitan area. As of January 2011, Azul Airlines
had 7.74% of the Brazilian domestic market share in terms of passengers per kilometre
flown. Azul also achieved the highest load factor in the Brazilian domestic
market with an average factor of over 85% since March 2009.
The airline’s CEO just contacted you (a senior consultant at Ernst & Young) and said that he wanted to
put one more passenger on each of his company’s flights. We will go to a meeting with him in an hour and
we need to prepare two things: 1. The financial return of one more passenger per flight. Is it worthwhile to
do so? 2. The marketing strategy to attract these new passengers. How would you approach the case?
Possible Solutions:
1. The financial return.

To calculate the financial return, the candidate should look that the revenue and cost side of bringing one
more passenger per flight. One the revenue side, we need: Average cost of an air ticket; and Number of
new passengers (see 2 and 3 below).
The candidate should also briefly ask about if he/she can assume that there is enough capacity to put one
more passenger onboard.
2. The average cost of an air ticket.
The candidate should ask about the kind of routes, the market share, and then price of each of them.
In this case, we were talking about the Brazilian domestic market and the client Azul Airlines has only
domestic flights. The interviewer simplified the numbers a lot the make the calculations easier. You
should adapt the numbers to US domestic airline market or any other you would like. For Brazil, the
interviewer gave the following information:
 60% of the flights are between two biggest cities (Sao Paulo and Rio de Janeiro), which are 60
minutes apart and the ticket costs US$100.00.
 20% between other major cities which are 2 hours apart from each other and the ticket also costs
US$150.00.
 20% between other smaller cities which are 3 and a half hours apart and cost US$300.00.
So the average air ticket price = 60% * $100 + 20% * $150 + 20% * $300 = $150.00.
3. The number of new passengers.

There are several ways to come up with the number of new passengers. I proposed two approaches:
 Calculate the number of flights: estimate the number of airplanes that the company owns and
then estimate the number of flights each airplane does.
 Calculate the number of cities (average) in which the company makes flights and the average
number of flights per city.
The interviewer said that I should use the first approach since he had looked at the company’s website
and he found out that they have a fleet of 100 airplanes.
I asked if I could assume that approximately 60% of the planes were used for the 1-hour flights, 20% for
1.5-hour flights and 20% for 3-hour flights. He answered that this was not 100% true in practice because
depending
on the city, we could have more frequent flights than others, but he agreed that I could do this
approximation. The interviewee can come up with other reasonable assumptions.
The candidate should also notice that normally the company spends a lot of money and time performing
maintenance on its airplanes. If the candidate forgets to mention this and starts using all 100 airplanes,
you should ask what assumptions he made to use the all the planes at once. For this case, the
interviewer mentioned that this company had a little less than 10% of its airplane in maintenance and we
could just use 100 airplanes to simplify calculations.
So, assuming all 100 airplanes available, we have: 100 × 60% = 60 airplanes doing 1 hour flights; 100 ×
20% = 20 airplanes doing 2 hours flights; 100 × 20% = 20 airplanes doing 3.5 hours flights.
To estimate the number of flights per airplane per day, we need the range of hours of flights during a day
and the interval of time in which an airplane stays on the ground (see 4 and 5 below). What the
interviewer wants to hear is not the right number, but what are your assumptions to get to the numbers.
4. Flight time per day
 The first airplane departs at 6:00 am because the executives must arrive at its client’s at 8:00 am,
for example.
 There will be no flights after 10:00 pm, so we will assume that the last flight will arrive around
midnight.
So, there is no flight between midnight and 6:00 am, thus a total flight time of 18 hours per day.
5. On the ground time:
 Taxiing (arrival flight) – 10 minutes

 Passengers going out of planes – 15 minutes
 Cleaning and food/drink supply – 10 minutes
 Passenger boarding planes – 15 minutes
 Taxiing (departure flight) – 10 minutes
Total: 60 minutes = 1 hour.
Therefore, based on the above analysis we now have:
 18 h / (1 h + 1 h) = 9 short flights per plane per day, 60 × 9 short flights per day = 540 flights.
 18 h / (2 h + 1 h) = 6 middle flights per plane per day, 20 × 6 middle flights per day = 120 flights
 18 h / (3.5 h + 1 h) = 4 long flights per plane per day, 20 × 4 long flights per day = 80 flights.
Total = 740 flights per day. So, the extra revenue in one month = 740 flights/day * 30 days * $150 = $
3,330,000.
On the cost side, the candidate should realize that the cost of one extra passenger is only the marginal
cost, which can be ignored. Therefore, the extra profit is the extra revenue. The interviewer asked why
was it important to have this raw estimation about the extra profit before going to meet the client. I said
that it was important to have a sense of the size of the clients’ issue and the interviewer agreed.
How Many Cups of Coffee Are Sold in Hanover Per Day?

Consulting Firm: Investor Group Services (IGS) 1st round job interview.
Industry Coverage: food & beverages.
Case Interview Question #00217: How many cups of coffee are sold in Hanover (the capital city of the
federal state of Lower Saxony, Germany, with a population of about 500,000 as of 2010) in a day?
Possible Answers:
To crack this kind of population-based market sizing case, there are usually two possible framework one
can apply: top-down, and bottom-up.
1. Top Down approach.
 Start with general population.
 Refine estimate to account for demographics (age, gender, location).
 Refine estimate to account for other variables (demand, customer behavior, consuming habits,
etc).
 Calculate the final number.
Tips:
 Keep track of your math. – Label units.
 Step back and think about your answer. – Does it make sense?
 Revisit key assumptions. – Where did you go wrong?
Calculations:
Let’s say 15,000 people in Hanover; assume 2/3 are adults =~ 10,000; 50% adults are coffee drinkers =~
5,000 people; 50% buy coffee from coffee shops vs. 50% make coffee and drink at home =~ 2,500
people; 1 cup per person per day => 2,500 cups of coffee per day in Hanover.
2. Bottom Up approach.
 Start with where product/service is sold.
 Consider factors that influence demand and segment assumptions (hours, seasons).
 Estimate throughput per segment (number of units sold per time).
 Gross up that number (per hour, per day, per week, per year).
 Sum your segments to get to units per location.
 Estimate number of locations.
 Multiply it out to get total units.
Consider two segments: Rush Hour and Non Rush Hour.
 Rush Hour: on average coffee shop sells 1 cup every 1 minutes = ~60 cups an hour, 3 hours a
day = 180 cups.
 Non Rush Hour: on average coffee shop sells 1 cup every 6 minutes = ~10 cups an hour, 7 hours
a day = 70 cups.
 Rush hour + non rush hour = 180 +70 = 250 cups sold per day per coffee shop.
 Assume 10 coffee shops in Hanover => 2,500 cups of coffee per day in Hanover.
Note: Check out the answer to a similar market sizing case “How Many Cups of Coffee Are Sold in US
Every Year”.
Why are Sinusitis Drug Sales Different Between US & Canada?
Case Type: math problem; industry analysis; market sizing.
Consulting Firm: Campbell Alliance final round job interview.
Case Interview Question #00183: Your client GlaxoSmithKline plc (LSE: GSK, NYSE: GSK) is a global
pharmaceutical and consumer healthcare company headquartered in London, United Kingdom. As of
2009, it is the world’s third largest pharmaceutical company measured by revenues (after Johnson &
Johnson and Pfizer).
GSK makes and sells a prescription drug brand-named Augmentin for nasal infections (or Sinus Infection,
Sinusitis). You’re brought in as an external consultant because GSK’s sales department has seen some
strange sales numbers showing per capita sales of Augmentin in the US are much higher than sales in
Canada. Their question to you: Why are per capita sales different between the two countries?
 A nasal infection is an ailment with symptoms much like a cold. People cannot self diagnose a
nasal infection.
 The competitors are the same in the US as they are in Canada.
 This is a prescription drug – it is not sold over the counter (OTC). Given a prescription, patients in
both countries will have it filled. Insurance will pay for it.
 Americans are no more or less likely to contract a nasal infection, or show symptoms than
Canadians.
 Canadians with nasal infection symptoms are will visit the doctor 60% of the time, while
Americans will visit the doctor 30% of the time.
 Canadian doctors are twice as likely to misdiagnose a nasal infection. In other words, Canadian
doctors diagnose a cold or flu, when the patent indeed has a nasal infection (the candidate should
ask for the magnitude of misdiagnosis – 10% in the US and 20% in Canada).
 For a diagnosis of nasal infection, American doctors prescribe the client’s drug 70% of the time
versus 33% of the time in Canada.
 The price of the drug in the US is 25% higher than the price in Canada.
 Canadian patients receive no refills for their prescription on average, while Americans receive 1
refill on their prescription.
Possible Answer:
The key to this case is to identify the process by which a person receives the drug. Since all comparisons
are made in per capita terms, the candidate should not focus on market or population size differences
between the two countries.
There are several steps in the process. The good approach should identify the relevant steps in the
process, in order, and compare US and Canadian revenues at each step. A good answer will identify four
of the five steps in the process, a very good answer will identify all 5 steps, and an excellent answer will
identify all five steps and be able to calculate the relative difference in sales between the two markets.
A good way to approach this case is to start with certain number of patients, say 100, and compare
revenues through each step in the process. The five steps in the process are:
 Of 100 people with undiagnosed nasal infections 60 Canadians will go to the doctor versus 30
Americans.
 Of the 60 (Canadian) / 30 (U.S.) people that visit the doctor 80% (Canadian) / 90% (US) will be
correctly diagnosed 48 (Canadian) / 27 (U.S.).
 Of the 48 (Canadian) / 27 (US) people that are diagnosed, 33% (Canadian) / 70% (US) receive a
prescription for our drug: 16 (Canadian) / 19 (US).
 Of the 16 (Canadian) / 19 (US) people that are prescribed the drug, price of the drug in the US is
25% higher than the price in Canada, this is equivalent to having 25% more people in the US receive
the drug. The 19 US people are 19*(1+0.25) = 24 revenue equivalent Canadian patients.
 Of the 16 (Canadian) / 24 (US) equivalent patients, Canadians, on average, receive no refill,
while Americans, on average, receive 1 refill. Again, each US patient is 2 revenue equivalent
Canadian patients. The 24 American patients are actually 48 revenue equivalent Canadians.
Conclusion: Overall, US revenues are three times higher than Canadian revenues – 48 revenue
equivalent US patients versus 16 revenue equivalent Canadian patients.
Expedia Evaluates Market Potential of Trip Add-On Product
Case Type: new product; market sizing.
Consulting Firm: Mercer Consulting final round job interview.
Industry Coverage: E-commerce, online business; tourism, hospitality, lodging.
Case Interview Question #00175: Your client Expedia.com (owned by Expedia Inc., NASDAQ: EXPE) is
an online travel website that currently sells all major travel products – airline flight tickets, hotel rooms, car
rentals, vacation packages, and cruises. Their major competitors are Travelocity, Orbitz and Priceline.
They are interested in entering a new market where consumers can add
additional destination products to their trip, such as airport transfers, show tickets, tours, etc. A consumer
will begin booking their trip as normal, and before concluding, will be presented with these additional
product options. Expedia calls this new product a “Trip Add-On”.
Before Expedia invests money in developing this new capability, they’ve asked you to evaluate the market
potential of this offering and provide a go/no-go recommendation with associated risks. How would you go
about it?
Possible Answer:
This case combines new product development and market sizing. The biggest challenge for the
interviewee is to think about what data he/she needs and how to gather this data. The interviewer should
let the job candidate drive the discussion as much as possible in uncovering the necessary data.
Revenue Drivers
The table below gives a complete overview of the product mix breakdown for your client Expedia. This
data is the first piece of important information. The interviewer should let the job candidate try and ask for
this information themselves.
Product % of Transactions % of Revenue
Air Flight 60 55
Hotel 20 25
Package (flight & hotel) 3 5
Car Rental 15 10
Cruise 2 5
Total per Year 10 million $3 billion
Next, the candidate should recognize that the new Trip Add-On products will be sold in combination with
the existing products. More specifically, a customer can only purchase a Trip Add-On together with a flight
ticket, hotel, package, car rental, or cruise product. They can never purchase a Trip Add-On by itself.
The critical estimation the candidate needs to provide is the conversion rate associated with each
product. The conversion rate associated with the air flight product is the number of Trip Add-Ons
purchased with the air product divided by the total number of air product transactions. For example, if
Expedia made 1000 air flight transactions and sold 150 Trip Add-Ons with these air transactions, the
conversion rate would be 15%.
Ask the candidate to ballpark conversion rates by product. It is not important that the candidate gets the
numbers suggested below; however, it is important that he/she provides some rationale for their
estimation. Factors that would be good to consider are:
 Intuition as to what current products are best associated with the new Trip Add-Ons. A package
would be most logical because the customer is looking to buy their entire trip at once, while a cruise
would be least logical since the customer will be tied up on the cruise-ship for their entire trip and
unlikely to need a Trip Add-On.
 Available competitive data from annual reports, press releases, or tour operators.
 Other offerings that may be currently sold in the booking path. An example of this would be travel
insurance.
Suggested conversion rates by product: Air Flight 5%. Hotel 10%. Package 20%. Car Rental 2%. Cruise
1%.
Other revenue drivers:
 Market reach: 50%.

 It won’t be possible to offer Trip Add-Ons in all markets, so the transaction numbers would have
to be cut by a market reach factor. Major markets like New York, Chicago, Las Vegas, etc. would be
included, but secondary markets (e.g. Charlotte, Indianapolis, etc) become too fragmented to support
Trip Add-Ons.
 Average retail price of an add-on: $100.
Again, it’s not critical that the candidate gets the suggested numbers correct, but make sure they provide
a logical rationale.
Sample Revenue Calculation:

# Trans
Product % of Trans (MM) Conv Rate Trip Add-Ons
Air Flight 60 6.0 5% 300,000
Hotel 20 2.0 10% 200,000
Package (flight & hotel) 3 0.3 20% 60,000
Car 15 1.5 2% 30,000

Cruise 2 0.2 1% 2,000
Total 10.0 592,000
592,000 potential Trip Add-Ons x 50% market reach x $100 average retail price = $29.6 million (round up
to $30 million)
Cost Drivers:
 COGS (Cost of goods sold): 80%
 Note that the client only retains 20% of the total retail revenue of the Trip Add-On
 Other variable costs: $10 per transaction
 Potential drivers include: computer hardware (direct variable), credit card fees (direct variable),
customer service (allocated), technology staff (allocated), and general overhead (allocated)
 One-time development cost of $3 million
Sample Cost and Profitability Calculation:
Cost = 80% x ($30 million) + $10 x (296,000 transactions) = $27 million
Assume the one-time development costs takes place in Year 1. Also, assume future growth rate is zero
and the discount factor is zero (e.g. $30 million in revenue for each year after Year 1, which is also the
present value).
Profit in Year 1 = $30 million – $27 million – $3 million = $0 million

Profit in each subsequent year in present value = $30 million – $27 million = $3 million
Other Considerations
1. Competitive environment
All Expedia’s major competitors (Travelocity, Orbitz, Priceline, etc) are currently selling Trip Add-Ons.
Your client is late to the game. Although competitors are publicly traded, it is hard to find specific data
related to the performance of their Trip Add-Ons. But the general feeling is that this has been a good
venture for them from a financial perspective.
2. Risks
 Adding an extra step in the booking path and negatively impacting existing products. For
example, making the booking path longer by adding Trip Add-Ons could potentially hurt the client’s
air flight product sales. This would be detrimental given the transaction and revenue volume the air
flight product provides.
 Fulfillment and customer service are new challenges that need to be addressed. How does the
client provide the customer with the necessary ticket to gain entry to their Trip Add-On? Mail is an
expensive option that would further eat into their profit margin.
 If Expedia does not implement Trip Add-Ons, will their competitors have a long-term product and
strategic advantage?
 Can the client meet a new product challenge from an organizational standpoint? Do they have the
resources to mobilize a dedicated team to take ownership?
3. Financial Issues
In the sample calculations, the profitability is zero in Year 1 and $3 million per year afterwards. Assuming
this represents free cash flow, is this a reasonable return given the financial and human resources
required? (Note – an excellent candidate would bring up whether or not the client is meeting its cost of
capital).
Recommendation: Make sure the candidate provides a go/no-go recommendation to the client that
captures the essence of the discussion. Additionally, they should bring up at least two risks with the
decision they are recommending. Whether or not the candidate recommends proceeding with the project
is not critical to succeeding with this case.
How Many Skis were Sold in U.S. Last Year?
Consulting Firm: Aon Consulting (now Aon Hewitt) first round job interview.
Industry Coverage: Sports, Leisure & Recreation.
Case Interview Question #00165: Your client Sports Authority is one of the largest sporting goods
retailers in the United States. Headquartered in Englewood, Colorado, the company operates more than
460 stores in 45 U.S. states under the Sports Authority name. You have been hired because Sports
Authority wants to find out the market size for skis before they enter the
business. Specifically, how many skis were sold in the U.S. last year?
Possible Answer:
Like any other market sizing cases, the key here is to carefully walk the interviewer through your
assumptions and calculations, and then come up with a reasonable number in the end. Here is one
possible approach:
 As always, assume 300 million people in the U.S.
 Assume 10% of the US population actually skis (You may want to support this assumption by
anecdotal or other evidence, say an article you read on New York Times sports section). That gives
you a total skiing population of 30 million.
 There are two important breakdowns among these 30 million – those who own their own skis and
those who rent.
 Probably only 25% of skiing population own skis (again, you know this because you are an avid
skier, have a lot of friends who ski, etc.) for a total of 7.5 million new skis buyers.
 Estimate how often people buy new skis – say every three years. So of the 7.5 million skis
buyers, roughly 2.5 million actually bought skis last year.
 Those who rent probably ski less frequently than those who own. But ski rental places buy lots of
skis. It is hard to estimate the number of skis bought by rental shops but make assumptions as
above. You Need to come up with a good guess for the number of ski rental shops in the U.S. Then
make an assumption for the number of new skis they buy every year. Remember that most rental
skis are used.
 Add this number to your 2.5 million and you have your total number of ski units sold in US last
year.
How Many Bubble Gums Chewed in a Day in US?
Consulting Firm: Alvarez & Marsal first round job interview.
Industry Coverage: Food & Beverages; Consumer Products.
Case Interview Question #00164: Estimate the number of bubble gums chewed in a day in the U.S.
Make any assumptions required to solve the problem. State the assumptions and the calculation in your
solution.
Possible Answer:
This is a population-based market sizing case, very similar to the “How to Estimate the Size of
Chewing Gum Market” case, so be sure to look at that solution also.

Assumptions:
 Number of people in the US = 300 million.
 75% of bubble gum is chewed by people ages 8 — 15.
 75% of population between 8-15 chews bubble gum.
 10% of US population is between 8-15 (assumes flat population distribution between ages 0 to
70; 10% of population in each age bracket: 0-7, 8-15, 16-23, 24-31 … etc.)
 People who chew bubble gum chew an average of two sticks per day.
Calculations:
 Number of people between ages 8-15: 300 million x 0.1 = 30 million
 Portion of people ages 8-15 who chew gum: 30 million x 0.75 = 22.5 million
 Amount of bubble gum chewed by ages 8-15: 22.5 million x 2 = 45 million sticks
 Total gum chewed: 45/0.75 = approximately 60 million sticks of gum per day.
Hollymatic Burger Machines Expand into China
Consulting Firm: OC&C Strategy Consultants final round job interview.
Industry Coverage: Food & Beverages; Manufacturing.
Case Interview Question #00157: Our client Hollymatic, Inc. is a leading manufacturer of food
processing equipment including patty forming, mixer, grinders, saws, vacuum tumblers, and associated
paper products. Best-known for the inventions of the Hamburger Patty Machine and the
Mixer/Grinder, Hollymatic is also responsible for the sale and manufacture of

burger machines that produce the meat patties that populate the ever-popular hamburgers, sold
worldwide by the likes of McDonald’s and Burger King.
OC&C Strategy Consultants have been approached by Hollymatic to help them think about their
international expansion strategy, and in particular the opportunity posed by developing markets, such as
China, India etc. Your specific task on this case is to scale the opportunity – i.e. how many Burger
Machines could the Hollymatic company expect to sell into China in the future.
Question #1: how would you estimate the Chinese market for burger machines?
Possible Answer:
The good candidate explains that the market for burger machines is clearly driven by the fast food market,
so we need to consider the total number of burgers that are likely to be sold, the total number of burgers
that a machine can produce and divide one number by the other.
The excellent candidate points out in addition to the above that we need to consider the effect of different
population centers and transport on the likely configuration of manufacturing plants. We also need to
consider the effect of importing on the local demand for burgers, as well as any existing infrastructure that
may be capable of meeting manufacturing demand.
Question #2: given that a burger machine can produce 90,000 burgers an hour, and is worth £250K, how
much do you think the market for burger machines is worth?
Possible Answer:
Now this gives you a couple of the vital data points that you need to work out the market size, but also
leaves some key information that you need to estimate or make assumptions on. Good candidates will
work through the logic piece by piece, whilst the excellent candidates will lay out methodology and
information required upfront and then work through them systematically. Fundamentally however we need
to work out the number of burgers sold and divide it by the number of burgers a machine can produce to
give us the number of machines.
The good candidate thinks about number of burgers consumed per person given benchmarks from
western society (data point provided here that the average American spends $350 per year on fast food).
Estimates a reasonable number per Chinese person and comes up with a total number of burgers
consumed. Next, takes the given 90,000 burgers per hour, and then calculates the number of burgers that
a machine can produce given 24 hours per day, 365 days per year. Possibly considers different total
working hours or utilization rates for the machine but doesn’t expand on this thinking or rationalize
assumptions made
The excellent candidate contemplates the proportion of people in urban centers likely to be the target for
fast food sales, uses western benchmarks, adjusted for Chinese society and comes up with an estimate.
Next, the candidate uses 90,000 burgers per hour but quizzes interviewer on number of hours worked per
day. Pursues debate on how many hours you would work per day (see next question) conclude and then
calculate capacity. Raises issues on utilization rate given potential mechanical downtime, impact of
geographic dispersion and other, and second order effects.
Question #3: how many hours a day would you operate the machines: What are the potential operating
models and what will influence which of these you choose?
Possible Answer:
The good candidate considers 24 hour a day operation versus 8 / 12 / 16 hour operation with key
considerations being ability to find staff to work all night, extra cost of getting people to work overtime, and
problems of trying to operate machinery 24 hours / day.
The excellent candidate identifies that a critical trade off is extra labour cost associated with operating a
night shift versus extra capital cost of having to buy more machines if working less hours; rationalizes
working 24 hours given likely cost of local labour versus high capital cost of (Western manufactured)
machinery.
In all of these calculations and discussions, there is an expectation that the candidate will be able to
calculate the numbers correctly, using a calculator. This does not mean that if you make a mistake you
have failed, but that you can identify when you have made mistakes (execute that all important sanity
check) and ultimately arrive at a sensible and correct answer. There is also an expectation that where you
are forced to make estimates they are vaguely sensible – assuming that all Chinese people eat 1 burger
per day is just clearly not very realistic!
Question #4: The final task in the market sizing case is to calculate the total number of machines
required and multiply through by the value of each machine – it is always surprising to see how many
applicants forget what the original question was (check Question #2 again) and stop at the number of
machines.
In the majority of cases, the interview will finish at this stage – both interviewer and interviewee being
generally exhausted and out of time. For exceptional candidates who have managed to get through the
case quickly, you will then be guided to go on to contemplate the size of this market in relation to the US
market, and what the likely drivers of the US market are.
Question #5: if the US fast food market is not growing, what will be the key drivers of burger machine
sales, and what impact would this have on your domestic strategy?
Possible Answer:
The excellent candidate is very unlikely to get all of the items below but should be able to generate some
interesting and non-obvious issues for discussion, like:
 Growth in basic demand zero, so sales of machines are unlikely to be driven by capacity
expansion, except if new regions are being developed.
 Market will be largely driven by replacement of old machines (interesting to reflect how this will be
impacted by economic cycle) or by market innovation.
 Consequently technological improvements and changes in the manufacturing processes possible
with the machines will drive new purchases. The key impact of this will be enhanced investment in
R&D.
Interviewer’s Note: This case interview question is based on a real case that OC&C worked on in 2005,
trying to gain an idea of the global market for Burger machines. This is typical of an ‘analytical’ case study
that you will get asked – requiring sound numerical skills (the ability to competently use a calculator), the
ability to come up with some sensible estimates and some commercial awareness. Excellent candidates
differentiate themselves by the quality of the answer, but also the time taken to respond – some of the
later, more advanced questions will only get touched upon if a candidate has ‘aced’ the earlier questions.
How Many Cell Phones are Sold in U.S. in a Year?
Consulting Firm: Dean & Company first round job interview.
Industry Coverage: Telecommunications & Network; Electronics.
Case Interview Question #00156: Your client Verizon Communication Inc. (NYSE:VZ) is a wireless
phone service provider that owns and operates the largest mobile telecommunications network in the
United States, based on a total of 93.2 million U.S subscribers as of Q3 2010. Verizon wants you to help
them estimate the market of cell phones. How many cell phones were sold in
the United States last year?
Possible Answers:
1. Ask initial questions
To confirm–we are talking about new sales, not total users? And the physical phones, not just changing
service plans? Do you mean all types of mobile phones?
2. Develop hypothesis and approach

 Start with all people in the US, but realize that only some of them will have mobile phone service
(“penetration”)
 Typically someone gets a service, and then buys a new phone and for one of two reasons
(“turnover” or “phones/year”):
1) Change providers or plans, 2) Want the latest technology
 Number of sold phones = People x Penetration x Turnover
3. Dive into the details
Let’s assume there are 300 MM people in the United States. Estimate 80% of Americans own a cell
phone. Then lets assume that cellphones have an average lifetime of two years. That means 300 MM x
80% x (1/2) = 120 MM cell phones sold in a year.
4. Pull up and summarise

I estimate 60 MM cell phones were sold in the US last year. Then I ask myself . . . Does this make sense?
And I suggest how I could make a more accurate estimate.
Interviewer Follow-up Questions:

1) Is a person living in the middle of nowhere going to own a cell phone?
2) Almost all of my friends have cell phones and they are always showing off the new model. Can we use
this type of data to refine your estimate?
Revised Approach:
1. While the numbers need adjusting my analytical framework still holds: Sold Phones = People x
Penetration x Turnover, you are right, people won’t buy a phone unless they have network coverage. The
US is very well built out so lets estimate 90% of US Population is covered.
US Population 300 MM, assume 90% of US population is in cell phone coverage area, therefore total cell
Coverage 300 MM x 90% = 270 MM.
2. It’s not surprising that your friends are heavier users, they aren’t average. Lets break up the whole into
a handful of market “segments”, each with its own set of penetration and turnover. Assumptions about
each segment:
 — Baby/Young kids: Don’t own cell phones

 — High School students: Want them, but need parental permission. Not much money to spend.
 — Young Adult: Lots of freedom, technology savvy, more disposable income
 — Baby Boomers: Probably have for work, lots of disposable income, but less tech savvy.
 — Seniors: More uncomfortable with technology, but emergency function valued
3. After calculating phones sold in each segment, add them up:
turnover
(phone/year
Age Group % of population % penetration ) number
Baby/Kids (0-12) 15% 0% N/A 0
High School (13-17) 10% 50% 1/2 6 MM
Young Adult (18-35) 25% 90% 1 60 MM
Baby Boomers (36-60) 40% 75% 1 80 MM
Seniors (60+) 10% 30% 1/2 4 MM

Total 150 MM
Summary: After looking at a segmented approach to the cell phone market, I estimate ~150 MM cell
phones were sold in the US last year.
Sanity Check: According to the NPD Group, a global provider of consumer and retail market research
information, mobile phone sales to consumers in the US reached 146 MM units by the end of 2007. NPD
estimates total 2007 consumer sales of $11.5 billion, after rebates and promotions.
What is US Annual Demand for Artificial Grass Turf?
Consulting Firm: Booz & Company final round job interview.
Industry Coverage: Chemical Industry; Sports, Leisure, Recreation.
Case Interview Question #00154: Your client is AstroTurf LLC. The company has recently developed a
new kind of synthetic artificial turf that they claim is far better than any other existing products. AstroTurf is
an artificial grass surface manufactured from synthetic fibers made to just look like natural
grass, most often used in arenas for sports that were originally or are normally
played on grass.
You have been hired by the CEO of AstroTurf to help him estimate the U.S. demand per year for the next
three years in actual number of square feet of AstroTurf. After 3 years the client’s patent will run out and
new competitors will introduce similar products. How would you go about analyzing the case?
Possible Answers:
To estimate the annual market demand for synthetic artificial grass turf in the U.S., one possible method
is the following:
1. Determine the overall market

2. Segment the market into different components
3. Try to determine the drivers of demand in each segment of the market
4. Review/challenge your assumptions for market demand for each segment.
Overall Market: Could include professional sport teams, college athletics, and high school sports.
Market Segment: Determine which sports would demand the new Astro-Turf: football baseball, soccer,
and lacrosse. Now make assumptions regarding the number of potential customers in each of these
sports. Always pick round numbers for easy calculations. Anytime you make assumptions about the
market’s potential customer base, you can remind the interviewer that under normal circumstances, you
would utilize a host of resource tools such as market research, industry data, sales and promotional
feedback, client focus groups, etc.
Professional Number College Teams: Number
Teams:
Baseball 20 NCAA Football
Soccer 15 Div. I-A schools 100
Lacrosse 12 Div I-AA 50
Football 28 Div II 50
Div III 25
Soccer (natural grass more popular) 75
Total 75 Total 300
Assume all fields are the same size and require the same amount of material: 120 yd x 60 yd = 7200 sq
yd per field. Multiply 7200 by 375 fields to get the total potential market of 2,700,000 sq yd. Now,
speculate on how much of the total market you expect to penetrate each year considering how often
stadiums change fields, what the recent trends are with respect to natural grass, etc. Apply these
percentages, e.g., 10-20%, to get yearly demands of 270,000-540,000 sq yd.
Luxury Fashion House Chanel to Enter China Market

Consulting Firm: OC&C Strategy Consultants final round job interview.
Industry Coverage: E-commerce, Online Business; Retail; apparel, clothing & textiles.
Case Interview Question #00149: Our client Chanel is a Parisian fashion house recognized as one of
the most established in haute couture, specializing in various luxury goods such as haute couture, ready-
to-wear, handbags, perfumery, and cosmetics among others.

OC&C Strategy Consultants have been approached by Chanel to help them think about their online
strategy in Asia Pacific region, with particular focus on the business opportunities in China. Your specific
task on this case is to scale the opportunity – i.e. how big is the current market size of online luxury
fashion goods in China and how many potential buyers currently exist in the Chinese market.
Question #1: How would you estimate the market for online high-end fashion in China?
Possible Answer:
The good candidate explains that the market for online high-end fashion is driven by the size of the
overall high-end fashion market, the number of internet users in China (i.e. the internet penetration rate),
the likelihood of internet users buying fashion online, and the share of their online spending as a percent
of total spending on high-end fashion.
The excellent candidate points out in addition to the above that we need to consider the impact of
Chinese people buying high-end fashion abroad while they are travelling. We also need to consider
worries on counterfeit goods by Chinese consumers and the lack of trust between buyers and sellers
online would require adjusting the online model from the West to fit the unique market situation in China.
Question #2: Given that the addressable high-end fashion market for our client in China is €400 million,
how much do you think the market for online high-end fashion is worth?
Possible Answer:
The interviewer will provide you with some data points to work out the market size, but you also need to
figure out what are the missing links and how to make reasonable estimates or assumptions on such
missing information. Good candidates will work through the logic piece by piece, whilst the excellent
candidates will lay out methodology and information required upfront and then work through them
systematically. Fundamentally however you need to work out a ratio to split up the existing market into
online and offline portion by making assumptions on the online purchase behaviour.
The good candidate thinks about the internet penetration rate among high-end fashion shoppers in China
(data point provided here that the overall internet penetration in China is around 12%) and estimates how
many of them would shop online for fashion. Next, estimate the share of online spending as a percent of
total spending on fashion. Finally multiply all these parameters with the addressable market size for our
client to get the answer for the market for online high-end fashion in China.
The excellent candidate does not just guess those numbers, but can justify where those numbers come
from by drawing reference to statistics, surveys, government data or derive a rational approach for the
estimation. For example, when estimating the internet penetration rate among high-end fashion shoppers,
the excellent candidate contemplates the proportion of people in urban centres likely to be the target for
high-end fashion, uses urban statistics, adjusted for the high-end segment of the population to come up
with an estimate on internet penetration for high-end consumers. The candidate should also raise the
issue on how the existing state of e-commerce infrastructure, such as online payment, credit card
availability, online security, delivery, counterfeit, etc, would affect the online shopping behaviour and
create potential hurdles for online shopping.
Question #3: What are the key hurdles for online purchase of high-end fashion in China?
Possible Answer:
The good candidate considers obvious factors that counterfeit products, poor online payment system,
unreliable delivery system, etc.
The excellent candidate also identify more subtle issues such as young age profile of internet users, lack
of credible or branded online retailers, lack of consumer protection, low credit card penetration and usage,
etc.
In all of these calculations and discussions, there is an expectation that the candidate will be able to
calculate the numbers correctly. This does not mean that if you make a mistake you have failed, but that
you can identify when you have made mistakes (execute that all important sanity check) and ultimately
arrive at a sensible and correct answer. There is also an expectation that where you are forced to make
estimates they are vaguely sensible!
Question #4: Estimate the number of potential buyers in China.

Possible Answer:
To estimate the number of potential buyers in China, you need to come up with an estimate on the
average purchase value per customer and divide the market size by that number.
Question #5: If our client decided to enter the China market, what are the points of
differentiation our client need to build in order to succeed in the market?
Possible Answer:
The excellent candidate is very unlikely to get all of the items below but should be able to generate some
interesting and non-obvious issues for discussion, like:
 Build a credible brand name by advertising on target media, such as magazines or internet
websites for high-end consumers and leverage presence of physical stores to emphasize that it is a
credible real business, not just a virtual store online.
 Provide special product selection, an edited offer with unique brands, unique merchandise or
latest products that customers cannot find elsewhere.
 Offer a risk free shopping environment to customers by providing free exchange and return.
 Provide loyalty programme and superb customer service to increase repeated purchase.
 Provide user generated content and community features in the website to enhance stickiness of
the website.
Interviewer’s Note: This case interview question is based on a real case that OC&C worked on in 2007,
sizing the potential of the online luxury fashion market in China. This case study requires sound numerical
skills, the ability to come up with some sensible estimates, some awareness of consumer behavior and
online knowledge. Excellent candidates differentiate themselves by the quality of the answer, the logic
and methodology in estimating the parameters used in the calculation and some understanding of the
China e-commerce market.
What is Worldwide Demand-Supply for Consulting Jobs
Consulting Firm: Samsung Global Strategy Group (GSG) second round job interview.
Industry Coverage: Consulting, HR & Business Services.
Case Interview Question #00136: What is the annual demand and supply for management consulting
jobs in the world?
Possible Answers:
To make life easier, let’s just consider new graduates fresh from schools and assume that the United
States has half of world’s consulting jobs.
Supply:
1. For this year’s graduating class (class of 2011) at top 50 universities in the US, let’s assume there are
1,500 students interested in getting into management consulting industry:
500 college students +
500 MBA students (both full-time and part-time) +
500 other advanced degree holders (PhD/JD/MD and non-MBA master’s degree).
2. For top 51 – 100 universities, on average the number of students who are considering management
consulting may be only one third of that of top 50s: 500.
3. Add (1) and (2) together ==> 1,500×50 + 500×50 = 100,000 in the US.
4. Double that number will give us roughly 200,000 students that will likely submit job applications to
management consulting firms worldwide.
Demand:
1. Given that the current headcount of consultants at top 4 consulting firms are as follows:
McKinsey &
Company 9,000 consultants
BCG 4,400 consultants
Bain & Company 3,500 consultants
Booz & Company 3,000 consultants
Big 4 total 19,900
If we assume the big-4 players combined has 10% market share, then the total number of management
consultants in the world is 200,000.
2. Since the turnover rate in management consulting industry is high, most consulting firms need to hire
20-30% of their existing headcount just to stand still.
3. Assume half of the new hires are from fresh graduates, and half are experienced hires, the total
number of consulting job openings available to undergraduates and graduate students would be: 200,000
x 15% = 30,000.
Therefore, approximately 3 out of 20 students who apply for management consulting jobs will actually get
offers.
Reality Check: According to a recent article on Wall Street Journal, the big-4 accounting firms plan to
hire thousands undergraduates and graduate students from U.S. campuses in the coming fiscal year.
new
hire current headcount ratio
PwC 5,500 162,000 3.4%
Deloitte 5,000 170,000 2.9%
KPMG 3,400 135,000 2.5%
Ernst & Young 6,450 141,000 4.6%
From the table, we can see that new hires from U.S. campuses over existing headcount ratio is about
3~4% for big-4 accountancy. Globally, the ratio can be expected to rise to 6~8%. Consultancy may have
slightly higher ratio, 10~15% may be a reasonable guess.
What is US Annual Demand for AA Batteries?

Consulting Firm: Kurt Salmon Associates (KSA) first round job interview.
Industry Coverage: Energy; Consumer Products.
Case Interview Questions #00135: You are on a flight home from London and find yourself seated next
to the newly appointed CEO of Energizer Holdings, Inc. (NYSE: ENR), an American manufacturer of
consumer products most well known for its Energizer and Eveready brands of batteries.
The CEO will be meeting with a group of important stockholders as soon as the plane lands in Chicago
and he asks you to help him estimate the total U.S. market for his company’s flagship product, AA
batteries. How would you estimate the U.S. annual demand for AA batteries?
Possible Answers:
The best job candidates will start with some macro-measure, such as the total US population, and then
estimate the number of batteries used per capita. For example, they might first identity the types of tools
or appliances that use AA batteries, then estimate the number of batteries used by each appliance, and
then consider the different lifetimes or replacement cycles of batteries used by each appliance. The best
candidates will also apply a “reality check” to their final answers, e.g. “that would mean that everyone
buys 100 batteries per year – which sounds too high.”
Alternately, a candidate could work this problem from a supply rather than demand perspective. The
candidate might start by identifying the number of battery manufacturers, estimate their total revenues,
and divide by retail price to estimate the number of batteries sold. This approach is generally less
intuitive, and candidates are more likely to “pull a number out of the air” for values like total revenue. If a
candidate struggles with this approach, the interviewer may suggest
the demand-driven approach and see how he or she responds.
How Many Cups of Coffee Are Sold in US Every Year?

Case Type: market sizing; math problem.
Consulting Firm: West Monroe Partners first round job interview.
Industry Coverage: Food and Beverage.
Case Interview Question #00128: How many cups of coffee are sold in the US every year?
Possible Answer:
This is a simple population-based market sizing case. Usually, this type of cases can be approached by
the following steps:
1. Start with a known population, e.g. US population is 300 million.

2. Divide the population into segments according to relevant parameters, like age, income, consuming
habits, purchasing habits, etc.
3. Pick percentages of each segment who belongs in your market.
Tips: Use 300MM for US population. Use manageable round numbers for bracket sizes and percentages,
for example: 300/4 = 75, 75/3 = 25, 75/5 = 15, etc.
Calculations:
Assume US population is 300M. Let’s bracket by age in groups of 20-year spans and assume an even
distribution (75M in each age bracket).
age population % drink coffee subtotal cups/da total
group y
0-20 75M 1/5 15M 1 15M
20-40 75M 2/3 50M 2 100M
40-60 75M 1/3 25M 2 50M
60+ 75M 1/3 25M 1 25M
190M
Thus, total cups of coffee sold per year = cups/day x days/year = 190M x 365 = 69B cups/year.
Reality Check: According to COFFEE STATISTICS REPORT 2010 Edition, Americans consume 400
million cups of coffee per day, or equivalent to 146 Billion cups of coffee per year; making the United
States the leading consumer of coffee in the world. If we assume half of the consumed coffee is bought
from coffee shops and the other half is home made, roughly 73 Billion cups of coffee are sold in the US
every year.
Eli Lilly Develop New Eyedrops That Cure Myopia
Case Type: new product; pricing & valuation; market sizing.
Consulting Firm: Campbell Alliance 2nd round job interview.
Industry Coverage: Healthcare: Pharmaceutical, Biotech & Life Sciences.
Case Interview Questions #00119: The client is a marketing vice-president of Eli Lilly and Company
(NYSE: LLY), a major global pharmaceutical company headquartered in Indianapolis, Indiana. Currently,
he is working on a business plan for a new revolutionary product. Researchers in the Research and
Development (R&D) division of Eli Lilly have recently developed new eyedrops
which completely eliminate Myopia (nearsightedness) in 60% of the cases (the cases caused by eye
strain rather than irregularly shaped eye lenses) if the drops are used twice a day.
Question Part 1: The marketing vice-president has been working on a business plan but is having a
difficult time with one piece of information. The client needs a directional estimate of the retail price they
should set for the new drops so that he can complete the business plan. How would you help the client
structure his thinking on the price and what is your back-of-the-envelope estimate on the price that he
should use in the business plan?
Possible Answer:
One rough cut pricing analysis would determine the market price for the product that is being replaced…in
this case, eyeglasses or contact lenses. For example, if eyeglasses cost $120 and last on average 2
years, then a two-year supply of drops could be sold for $120.
A more advanced analysis might determine that eyedrops are simple to use and completely trouble-free
so that they should replace the most expensive option including all the costs associated with that option.
For example, this may include $100 per year in optometrist fees, $180 in contact lenses ($120 per pair
plus on average each user loses on lens in a year), and $25 in contact lens cleaning solutions and other
supplies, for a grand total of $305. Using this example, the retail price of the one year supply of drops
should sell for $305.
The most advanced issue trees will include the fact that this new product is actually much better than the
alternatives, issues of dynamic pricing strategies (e.g. start high and reduce over time to best understand
elasticities), and pricing so that marginal revenue equals marginal cost.
Question Part 2: After talking through the pricing issue, you agree with the client that the price of the
drops should be roughly $200 per year. Because you have been so helpful, the client wants to discuss
one more issue. You look at your watch and determine that you have precisely 10 more minutes before
you absolutely must leave for the airport. The client explains that he needs to complete his baseline
business plan within an hour so that he can share it with the Eli Lilly management committee later that
afternoon. He would like you to help him produce a ballpark estimate of the market for the eyedrops
product. Specifically, what dollar level of sales might he be able to expect per year in the long run in the
US market?
Possible Answer:
Because you have already estimated a reasonable price, you must now estimate the number of yearly
supplies that the client can expect to sell in the US. One possible organizing structure (with estimates) is:
1. Estimate the number of people in the US: 300 million

2. Estimate the percentage of (1) using corrective eyewear: 20%
3. Estimate the percentage of (2) that are nearsighted: 70%
4. Use the client’s figure for the percentage of (3) that can be helped: 60%
5. Estimate the percentage of people that will adopt the new product: 50%
6. Put it all together: (300 million)(0.2)(0.7)(0.6)(0.5) = 12.6 million people
7. Multiply the number of people by the price per unit (12.6 million)($200 per unit) = $2.5 billion
NOTE: this market sizing approach assumes a proprietary product with no competition. If a competitor is
assumed, market share must also be considered.
How Many Timberland Hiking Boots Are Sold to Generation X?
Consulting Firm: NERA Economic Consulting 1st round job interview.
Industry Coverage: Retail; Apparel Clothing & Textiles.
Case Interview Questions #00113: How many Timberland hiking boots will be sold to Generation Xers
in the U.S. in the next quarter?
Possible Questions to ask the interviewer
1. What is Timberland? — A leading manufacturer and retailer of hiking boots,
outdoor clothing and products for active sports.
2. What is Generation X? — Generation born after the baby boom ended, ranging from 1961 to 1981,
namely the 30-50 year old age group (as of 2010).
Possible Answers:
This is a population-based market sizing case. One possible good and bad solutions are outlined below:
1. Suppose there are 300 MM people in the US.

2. Of this, estimate the number of Generation Xers, approximately 100MM.
3. Of this, estimate the number of hikers.
4. For each hiker, estimate the number of boots bought each year and multiply through to get a total
number of annual boots bought.
5. Divide by 4 to get a quarterly figure
6. A bonus check: Estimate the cost of these boots and multiply by the number sold to estimate
approximate quarterly revenues from this market. See if this is feasible.
Possible Bad Answer:
 Candidate guesses a number with no structure;
 Candidate offers structure but does not multiply the numbers through;
 Candidate multiplies the numbers through and gets a very low or high number and doesn’t know
how to double-check.
Law Firm Baker & McKenzie to Buy 800 Phone Number
Case Type: market sizing; pricing & valuation.
Consulting Firm: Novantas 2nd round job interview.
Industry Coverage: law, legal services; telecommunications & network.
Case Interview Questions #00111: You are a partner in Baker & McKenzie, a small Chicago-based law
firm specializing in divorce. Your firm decides to use 1-800-DIVORCE FREE as your primary contact
phone number. You call the number and you find that its owner, a shoemaker
facing an extreme liquidity crisis, is willing to sell you the number right now for $100K in cash. Should your
law firm purchase this 1-800 telephone number at a price of $100K? Yes or no, and why?
Possible Answers:
This is a traditional market-sizing case question. The key here is to be systematic, gradually growing from
the case level and taking a bottom-up approach to determining the total value of having the designer
telephone number. Unless the case question is fairly unambiguous, you probably should ask some
clarifying questions. Examples of discrete elements you’ll need to answer include:
 How many potential new divorce cases will a designated phone number generate?
 For what proportion is the phone number itself likely to influence the selection of their attorney?
 What other factors might affect your estimate on the potential?
 How much new revenue and income will this increased demand generate?
 How many cases can the firm handle now?
 How will this new number affect costs and resource requirements at the firm?
 How many lawyers are there in the firm right now?
For example, you know this is a small law firm. Does that mean 3 lawyers? 20? 100? Obviously, the
answer will affect the economic viability of buying the phone number. When you have blanks like this to
fill, you have a choice about whether you want to ask your interviewer for additional information or just
make assumptions. If you’re going to ask for more information, be careful that your questions are
germane to clarifying the major ambiguities, and that you do not spend the first half of the interview asking
for data.
Once you have built up the total yearly increase in profit from the number, it is easy to calculate what the
number should be worth to you. But remember what was asked: “would you pay $100k for the number?” If
you’ve made reasonable assumptions, you should have more than enough fodder to say “yes” or “no.”
Part 2 of the case: What would be your highest offer for the 1-800-DIVORCE FREE number?
Since you jump too quickly at the $100K offer, the shoemaker says, “Oh, did I say $100k? What I MEANT
to say is that I’m going to call 3 divorce law firms and take bids from each of them. Since you called me
first, I’ll let you make the first bid. What’s the number WORTH to you?” (Ignore game theory and bidding
strategies here–we just want a straight answer as to the number’s worth to your firm.)
This should be easy to tackle based on the thought process for Part I. In this case, you also need to
remember that the phone number doesn’t magically disappear at the end of the year. It will be around for
the life of the firm, and you will therefore derive benefit from it for years to come. This also means you can
amortize your purchase cost over several years.
Your interviewer will be looking for creative thinking as well as how well you use analytical techniques to
solve the problem. For example, knowing that the number will continue to provide benefits to the firm is
creative. Knowing how to estimate the long-term value of a stream of benefits through a Net Present
Value (NPV) analysis is both creative and analytical. Try to demonstrate both whenever possible.
Final Answer: Most answers for a 20-lawyer firm turn out to be between $500k and $1.5mm, largely
driven by assumptions about the effect of the number on case demand.
How Much Tea is There in China?
Case Type: estimate/guesstimate; market sizing.
Consulting Firm: IMS Consulting Group 1st round job interview.
Industry Coverage: Food and Beverage.
Case Interview Question #00105: How much tea is there in China?
Possible Answers:
The following is only one of many possible approaches to answering this estimate/guesstimate case.
First, ask the interviewer if she/he minds if you use a pen and paper to assist in your calculations.
Making Assumptions:
1. Assume that you will give the answer in total number of tea bags in the country.
2. Start off by making some assumptions about China’s population, tea imports versus exports, and
tea storage, etc.
3. Assume total population of China is 1 billion people (Tips: use round number to simplify the
calculations).
4. Assume maybe that they export half as much as they have in the country at any given time.
5. Assume that you are calculating the daily total and that the Chinese keep a weeks worth of tea at
any given time (so multiply your total by 7).
Calculations:
1. Segment the total population into 3 age groups to calculate total consumption/amount. Say ages
0-20, 20-40, and 40 and above that constitute 400, 400, and 200 million people each.
2. Now make assumptions as to how many tea bags each group consumes a day, say 1, 3, and 3.
This gives you a total daily consumption of 400×1 + 400×3 + 200×3 = 2,200 million = 2.2 billion tea
bags times 7 days a week plus half that amount for exports for a grand total of 2.2 x 7 x 1.5 = 23.1
billion tea bags in China on any given day.
3. Finally, your interviewer may ask you which of your assumptions you would challenge or question
if you had more time for analysis.
How Many Mazda Dealers Are There in the U.S.?
Case Type: market sizing; industry analysis.
Consulting Firm: Boston Consulting Group (BCG) 2nd round job interview.
Industry Coverage: automotive, motor vehicles.
Case Interview Questions #00088: Q1. Estimate how many Mazda dealers there are in the United
States.
Possible Answers:
1. Let’s assume 10 million new cars/light trucks are sold in the US every year.
2. Assume Japanese car makers have 25% market share in the US.
3. The “big three” Toyota, Honda, and Nissan each has 25% of that; five secondary manufacturers (Isuzu,
Mazda, Mitsubishi, Subaru, Daihatsu) have 5% each.
4. So Mazda sells about 10 million * 25% * 5% = 125,000 cars in the US per year.
5. Assume profit for each car is $400 for the dealer, so total dealer profit is $400 * 125,000 = $50 million.
6. Assume normal profit margin is about 10% for car dealers, i.e., total dealer operating cost is about $50
million/10% = $500 million.
7. Assume operating cost for each dealership is $2.5 million/year.
8. Then there should be around $500 million/$2.5 million = 200 dealers.
So, there are about 200 Mazda dealers in the United States.
Q2. Next, the interviewer stated that Mazda North America wants to know why certain dealers have a
much higher profit than other dealers do.
Possible Answer:
I used Porter’s Five-Forces model to analyze the market. Issues covered included:
 Difference in consumer taste in different regions
 Difference in household income in different regions
 Different levels of competition
 Consumer buying habits
 Different dealer size (scale of economies)
Q3. Then the interviewer asked what if there are two dealers located close to each other and everything
else is very similar, except one dealer is a lot more profitable than another.
The solution is that the one with high inventory turnover would be much more profitable.
Q4. Finally, the interviewer asked me to list all sources of dealership revenue and rank them by
profitability:
 Parts – it is a captive market where dealers can charge high prices. Also, once the dealership is
set up, there is no fixed cost. And dealers buy on credit, so very little working capital is required.
 Accessories, add-on insurance, and others – same reason as above.
 Car sales – high competition and high fixed cost prevent dealers from making economic profit.
 Services – high competition and high fixed cost prevent dealers from making economic profit.
American Express May Drop Credit Card Annual Fee
Case Type: market sizing; math problem.
Consulting Firm: Capital One 2nd round job interview.
Industry Coverage: Financial Services.
Case Interview Questions #00078: Suppose your consulting team has been retained by American
Express Company (NYSE: AXP). American Express (a.k.a. Amex) is a diversified global financial services
company headquartered in New York City. Founded in 1850, it is one of the 30 components of the Dow
Jones Industrial Average. The company is best known for its credit card, charge
card, and traveler’s cheque businesses. Amex cards account for approximately 24% of the total dollar
volume of credit card transactions in the US, the highest of any card issuer.
Business Week and Interbrand ranked American Express as the 22nd most valuable brand in the world,
estimating the brand to be worth US$14.97 billion. Fortune listed Amex as one of the top 30 Most
Admired Companies in the World.
Recently, American Express has faced strong competition from new credit cards issuers (in addition to
the competition from Discover, Mastercard, and Visa) entering the market. The CEO of Amex is
considering dropping the $50 annual fee for their major credit cards. He needs your advice to help him
make the decision. What are the “economics” of such a decision and should Amex drop the fee or not?
Possible Answers:
One possible approach is outlined below:
1. Determine how American Express makes money.

2. Cost-benefit analysis: evaluate the pros and cons of dropping annual fee.
3. Make a recommendation.
I. Revenue Drivers
Key Assumptions:
1. $50 annual fee multiplied the number of members.
2. No additional revenue from consumers because they pay-off monthly.
3. Amex receives 1% of the transactions from retailers who honor the Amex card. (Reality check:
currently, American Express’ average US merchant rate is about 2.5%, while the average Discover,
Mastercard, and Visa U.S. merchant rate is about 2%)
II. Cost-benefit analysis:
1. Key issues:
If the annual fee is dropped, Amex loses ($50 x # of members). To overcome this loss, they have to
increase the revenues from consumer purchases (1% from the retailer). Is it likely that current cardholders
will spend more per year if the annual fee is dropped?
Reality check: Not likely. They would still have to pay off their balance every month.
Therefore, the only way to increase revenues from consumer purchases is to increase the number of
Amex cardholders
2. Assumptions:
Number of current cardholders = 4% of the U.S. population (Just a guess): 250MM x 4% = 10MM current
cardholders, $50 x 10MM = Annual loss of $500MM by dropping the fee.
Current percentage revenue: 10MM members x $1000 annual purchase (average), [10MM x (1000 x 1%)]
= $100MM (Estimate of current percentage revenue)
3. Key Question:
Can Amex attract enough new members (without a fee) to offset a $500MM loss?
Each new member contributes $10 (1% of $1000 annual purchase).

Thus, (500MM/$10) = 50MM new members are needed to offset the loss of dropping the annual fee.
50MM new members is approximately equivalent to 20% of the U.S. population (gut check).
III. Assessment and Recommendation:

Based on these assumptions, increased membership equivalent to 20% of the population is probably not
likely. Thus, do not drop the annual fee! Amex may have to consider varying the fee (sensitivity vs. new
members).
CNH Forecast World Demand for Agricultural Machinery

Consulting Firm: Huron Consulting Group 1st round job interview.
Industry Coverage: Agriculture, Farming & Aquaculture; Industrial Equipment; Construction.
Case Interview Questions #00075: Your client CNH Global N.V. (NYSE: CNH) is a global, full line
company operating in both the agricultural and construction equipment industries. CNH’s scope includes
integrated engineering, manufacturing, marketing and distribution of agricultural machinery and
equipment on five continents. CNH’s operations are organized into three
business segments: agricultural equipment, construction equipment and financial services. As of
December, 2009, CNH manufactures its products in 38 facilities throughout the world and distributes its
products in approximately 170 countries through approximately 11,600 full line dealers and distributors.
CNH Global N.V. is incorporated in and under the laws of The Netherlands. The company was created on
November 12, 1999 though the merger of New Holland N.V. and Case Corporation.
CNH has hired you to help them forecast the demand for their advanced agricultural machine products
(agricultural tractors and combine harvesters). How would you assess the world demand for these
machines?
Possible Answers:
Essentially this is a market sizing case in which the candidate has to size the worldwide market for
advanced agricultural machines. A few special issues need to be taken into account though:
1. The world demand for advanced agricultural machines depends upon the world demand for higher
yield from farming acreage.
2. What is the current ratio of machines to acreage in the world?
3. What is the average life of an agricultural machine? What is the speed of replacement?
4. What are the machinery substitutes for farming?

The demand for advanced agricultural machine products would vary by country (or segment) based on
wealth to afford such machines. The job candidate should draw a graph of agricultural machine demand
vs. wealth, noting that the relationship is not linear (See above graph).
What is the Percentage of Disposable Diaper in US?

Consulting Firm: NERA Economic Consulting 1st round job interview.
Industry Coverage: Household Goods & Consumer Products; Environment & Waste Management.
Case Interview Questions #00068: You have been retained jointly by Pampers, a brand of disposable
diaper products marketed by consumer goods giant Procter & Gamble (NYSE: PG), and the United
States Environmental Protection Agency (EPA), a federal agency in charge of waste management
and environmental protection, to estimate the volume percentage of disposable

diapers in the total US household garbage. How would you go about it?
Possible Approach:
This market sizing or estimation/guesstimate case is strictly a mathematical, number crunching exercise.
You need a numerator (diapers) and a denominator (total US household garbage) to figure out a
percentage.
For the numerator, let’s assume this will be done in pounds. For diapers you could take the total sales
revenue of disposable diapers and divide by the average price per total unit (box, etc.). Multiply this
number by the average weight per unit, yielding the estimate of total diaper weight (numerator).
As to the denominator, figures on garbage tonnage are probably already available in some obscure
federal report stored in one of the EPA offices.
How Many Stories in Trump Tower Chicago?

Case Type: market sizing; finance/economics.
Consulting Firm: Cambridge Associates 1st round job interview.
Industry Coverage: Property & Real Estate.
Case Interview Questions #00063: Your client for this case is American business magnate, real estate
developer, chairman and president of The Trump Organization Mr. Donald Trump. Trump is also the
founder of Trump Entertainment Resorts, which operates numerous casinos and hotels all over the world.
The year is 2001. Donald Trump just announced that he is going to build a new skyscraper in downtown
Chicago (Trump International Hotel and Tower), but he is not sure how many stories to make it. How
would you help him decide?
Possible Answer:
Note: This case is very similar to the “How Many Stories to Build Manhattan Apartments” case, so look at
those suggestions also.
Essentially, this is a market sizing and financing decision case that requires the job candidate to analyze
economic supply and demand. Clearly you don’t want to lose money on the deal. Rebuilding will house
tenants, who will pay to reside there. The costs of building and maintaining the structure (both fixed and
incremental by story) need to be compared to revenue generating capacity of the project. When marginal
revenue equals marginal cost you stop adding stories.
By the way, stood at a height of 1,389 feet (423 m) including its spire, Trump Tower Chicago ended up
having 98 stories with 2 floors below ground.
How Many Piano Tuners Are There in Chicago?

Consulting Firm: ZS Associates 1st round job interview.
Industry Coverage: Small Business.
Case Interview Questions #00062: How many piano tuners (piano technicians who make their living by
making minute adjustments to the tensions of the strings of a piano to properly align the intervals between
their tones so that the instrument is in tune) are there in the city of Chicago?
Possible Answers:
This is a market sizing case. Its purpose is to test a job candidate’s logical and quick mathematical
thinking. There is no right or wrong answer here, and the case is to see if you can come up with a
reasonable answer based on the assumptions you make and information you estimate.
You need to start by asking questions about the key factors. One way to solve it is to estimate the number
of households in the Chicagoland area. The interviewer gave this piece of information at 2,000,000
households. Next, you can break the income of the households into four quarters (500,000 each). Make
an estimate of 20% of highest income quarter have pianos, 10% of second quarter, 5% of third, and 0% of
fourth.
Thus, the total number of pianos in Chicago:

Income % with
quarter Population Pianos # of Pianos
1st 500,000 20% 100,000
2nd 500,000 10% 50,000
3rd 500,000 5% 25,000
4th 500,000 0% 0
With 175,000 pianos to tune you can estimate how often these pianos need to be tuned. You can
estimate top income quarter tunes their pianos once a year, second quarter once every three years, third
quarter once every 10 years. This gives you (100,000 + 50,000/3 + 25,000/10) = 119,167 or
approximately 120,000.
Estimate a piano tuner an do four a day, 250 days a year, therefore: 120000/250=480 pianos a day to
tune and 480/4 = 120 pianos tuners needed.
Reality Check: How could you check whether your number is reasonable? Look in the yellow pages.
Would all the piano turners be in there? You can guess half. By the way there are 72 piano tuners listed in
the Chicago Yellow pages as of August 2010.
BP Assesses Operation Status of Machinery Division
Consulting Firm: Mars & Co 1st round job interview.
Industry Coverage: Oil, Gas & Petroleum Industry; Industrial Equipment.
Case Interview Questions #00042: Your client BP p.l.c. (British Petroleum, LSE: BP, NYSE: BP) is a
global oil and gas company headquartered in London, United Kingdom. It is the third largest energy
company and fourth-largest company in the world measured by revenues. BP has 25% world wide
market share of the oil industry. It is vertically integrated and is active in every
area of the oil and gas industry, including exploration and production, refining, distribution and marketing,
petrochemicals, power generation and trading.
BP generates about $400M annually in revenues through its machinery division, which supplies oil and
gas production machinery to other refineries (not owned by BP) around the world. You have been hired
by BP to help them assess the current operating status of their machinery division. How would you
approach the case? What information would you try to obtain first?
Possible Answer:
Define “assess current operating status” first. Ask the interviewer what exactly is expected from the
“operating status”. Most likely, you’re required to conduct a comparison of two dissimilar pieces of
information: 25% market share of the oil industry and $400M annual revenues in machinery division (but
no idea what % of the market this $400M represents).
The key is to figure out what % of the market $400M represents. Assume this is unknown. Therefore, an
estimate of the total market size of the oil and gas refining machinery needs to be done. The way to do
this is to ask how many oil refineries there are, how much does each cost to build, how long they last
(actual life, not dependent life) and what the machinery replacement costs are. From this, one can
estimate what the industry spends per year on machinery.
Divide the above mentioned $400M into total market size and BP’s oil refining machinery division’s
market share can be assessed. This % can then be compared to the 25% overall market share of the
parent company BP.
Condé Nast Publications to Enter Men’s Magazines Business

Case Type: market sizing; new product.
Consulting Firm: Strategos 2nd round job interview.
Industry Coverage: Publishing, Mass Media & Communications.
Case Interview Questions #00037: Your client is the CEO of Condé Nast Publications, a worldwide
magazine publishing company with main offices located in New York, Chicago, Miami, Madrid, Milan,
Tokyo, London, Paris, and Moscow. Condé Nast produces a line of educational magazines as well as a
line of women’s magazines such as Vogue, Glamour, W, Allure, Self, etc. Both
businesses are profitable but are not growing quickly. The CEO wants to start a third line of monthly
magazine in the US targeted at 30-50 year old men (e.g. GQ Magazine, Maxim, Esquire, etc). His stated
goal is to generate circulation revenues of $10 million in the first year. He has hired you to figure out
whether this goal is possible. How would you go about it?
Possible Solution:
This is an estimation/market sizing case. The key here is to clearly define your assumptions. The specific
answer is not important as long as you are making reasonable assumptions. For example:
Target Customers
Assume the total US population is approximately 320 million. Based on a normal distribution with the
average life span of 80 years, approximately 1/2 of the population falls between 30-50 or about 160
million people. Approximately 1/2 are male or 80 million.
Of the 80 million 30-50 year old men in the country, assume that at least 1/2 would read a magazine or 40
million. Given the wide range of magazines on the market assume that only 10% of magazine readers
would want to read a men’s magazine or 4 million target customers.
Market Share:
As a new magazine assume that you can generate a 5% share of the men’s magazine market in year one
or 4 million * 5% = 200,000 customers.
Revenues:
Based on what other magazines sell for ($2.50-$5.00) assume a cover price. Lets say $3/magazine at the
news stand and $2/magazine for a yearly subscription. Now make some assumptions on how many
customers will buy on the news stand versus subscription, lets say 50% subscribe (100,000) and 50%
buy at the news stand (100,000). This comes out to 100,000 * $3 + 100,000 * $2 = $300,000 + $200,000
= $500,000. Finally, this is a monthly magazine. For simplicity assume that all target customers buy a
magazine every month. This would generate total revenues of $500,000 * 12 or $6 million.
Conclusion:
In this case, given Condé Nast CEO’s stated goal of $10 million in circulation revenues in the first year, it
would not make sense to launch the magazine.
How to Assess World Demand for Knitting Machines
Consulting Firm: LEK Consulting 1st round job interview.
Industry Coverage: Industrial Equipment; Clothing & Textiles.
Case Interview Questions #00032: How would you assess the world demand for knitting machines?
Possible Answer:
The world demand for knitting machines basically depends on the world demand for cloth.
In order to evaluate the world demand for cloth, we need to know how much
cloth (measured in square meters, for instance) is being purchased per unit time
per inhabitant of the world. In order to refine our appraisal, we may segment the world population by level
of personal wealth. Note that this may not be a linear relationship.
Furthermore, you may need to consider three other factors:
 The current level of the ratio: amount of cloth manufactured per working year / number of
machines.
 The expected usable life of an average machine.
 The existence of substitutes for knitting machines and the consequences of this on our expected
demand.
Another way to approach this market sizing case is to directly analyze the world market for knitting
machines. This would involve examining the following questions/issues:
 Who is the world market (segmented by country, region, ethnicity, per capita income, etc.)?
 What does historical business data for the knitting industry tell us about world demand? (This
information may be found from industry sources, trade journals, government agencies like
Department of Agriculture and Commerce.)
 Which people/countries make up the consumer demand for knitting machines? (Who are the
customers?)
 What companies are the major suppliers of knitting machines?
 What are the drivers of change in this industry? Technology? If so, what new technological
advances in equipment have made the knitting machine obsolete and how fast is this development
spreading across the world markets?
What is the Market Size for Golf Balls in the U.S.?
Consulting Firm: McKinsey & Company internship 1st round interview.
Industry Coverage: Sports, Leisure & Recreation.
Case Interview Questions #00013: You are visiting your client Bridgestone Golf who sells golf balls in
the United States. The company is a subsidiary of Bridgestone Sports Ltd, and is based in Covington,
Georgia, United States. Its parent company is multinational rubber conglomerate Bridgestone
Corporation. The client is primarily known for their golf balls, and claim to be the
number one golf ball producer in the world.
Having had no time to do background research, you sit on the plane wondering what is the annual market
size for golf balls in the U.S. and what factors drive demand for gold balls. Your plane will land in less
than fifteen minutes. How do you go about figuring out these questions?
Possible Solution:
Golf ball sales are mostly driven by end-users.
1. In order to estimate the number of end users:

Take the US population of 300 million; assume that people between 20 and 70 play golf (about 2/3 of the
population, or 200 million) and estimate what proportion of these people ever learn to play golf (guess
1/4) which reduces the pool to 50 million.
2. Now, estimate the frequency of purchase:
If the average golfer plays twenty times per year, and requires two balls per time, that’s 40 balls per
person. Multiply that number by the 50 million people, resulting in a 2 billion gold ball market.
Pizza Hut Entering Home Pizza Delivery Business in Paris

Case Type: market entry/new market; business competition; market sizing.
Consulting Firm: Capgemini 2nd round job interview.
Industry Coverage: Restaurant & Food Service.
Case Interview Questions #00012: Your client Pizza Hut is an American restaurant chain and
international franchise that offers different styles of pizza along with side dishes including pasta, buffalo
wings, breadsticks, and garlic bread. Pizza Hut is a subsidiary of Louisville, Kentucky based fast food
restaurant company Yum! Brands Inc. (NYSE: YUM).

Pizza Hut has recently entered the home pizza delivery business in Paris. The market for pizza home
delivery is currently dominated by Domino’s Pizza (NYSE: DPZ). Pizza Hut has asked your consulting
firm to help it analyze issues that will determine its likelihood of success in the Parisian pizza market.
First, what information would you need and second, how would you analyze the pizza delivery market in
Paris?
Additional Information: (to be given to you if asked)
An estimate of the size of the Parisian home pizza delivery market. This could be obtained by knowing the
population of Paris (10 million in urban area) and making some educated guesses about factors that
determine pizza market size.
You may also want to know the size of Domino’s Pizza, the current major competitor, including sales,
number of stores, and proportion of Paris that is currently served by Domino’s.
Other useful information: market segments targeted and served by Domino’s; market segments that are
neglected by Domino’s; what type of product do they offer; what do they charge for their product; what is
the cost structure of their business and what products are most profitable.
Possible Solution:
The best method of analysis would start by determining if any part of the market is not well served
currently by Domino’s. Determine what are the needs of any neglected market, and understand if your
client could profitably serve this market.
Also, try to understand the likely competitive response of Domino’s to your client’s entry. How will you
defend your position if Domino’s decides to fight for market share?
How to Estimate the Size of Chewing Gum Market?

Industry Coverage: Food & Beverages; Consumer Products.
Case Interview Question #00011: How would you estimate the size of the annual U.S. chewing gum
market? Walk me (the interviewer) through your thinking and give me a final number in the end. Be sure
to check your answer for reasonableness.
Possible Answer:
This is a typical population-based market sizing case. One of the many possible approaches is to start by
looking at the total US population, divide total US population into different groups based on age,
consuming habit, etc, and assign a consuming frequency or usage rate for chewing gum to each group.
Then, sum them up to get the final total market size. Also, remember to use round numbers to simplify
your calculations.
First, estimate the number of people who chew gum: of the 300 million US population, assume 15% are
between the ages of 10 and 20 (the heaviest users), for a total of 45 million.
Estimate that these people chew two packs per week, for annual sales of 45 million x 2 packs/week x 50
week = 4,500 million packs per year.
For the other users over age 20, (70% of the 300 million population, or 210 million) estimate a usage rate
of only one half pack per week, for a total of 210 million x 0.5 packs/week x 50 week = 5,250 million packs
per year.
Thus, total packs of gum chewed per year is 4,500 million + 5,250 million = 9,750 million.
Sanity Check: To check for reasonableness, figure the dollar sales that these packs represent: at 25
cents per pack, annual sales would be $2.4 billion. This seems like a reasonable figure.
How Many Checking Accounts in the United States?
Consulting Firm: LEK Consulting 1st round job interview.
Industry Coverage: Banking.
Case Interview Questions #00001: Please estimate how many checking accounts there are in the
United States. Walk me (the interviewer) through your thinking and give me a final number in the end. Be
sure to check your answer for reasonableness.
Potential clarifying questions to ask the interviewer:
What kind of checking accounts – Personal? Business/Institution? or Both? For

the purposes of simplifying the case, let’s assume both personal and business checking accounts.
Possible Answer:
1. Key Assumptions:
 Assume 300 million people in the U.S, 80% or 240 million are over the age of 18.
 Let’s make an assumption that all married couples have only a joint account and 50% of those
over 18 are married.
 Every single person over 18 has one account and no one under 18 does.
 That 60% of the population is in the workforce, 30% of those in the workforce are self-employed
and 70% are employed by a firm.
 The average firm (excluding those that are self-employed) has 10 workers, there is only one
account per firm and those who are self-employed have one business account as well.
2. Calculations:
 Personal accounts: 240 million people over 18
 50% are unmarried and have one account = 120 million accounts
 50% are married and share one account = 60 million accounts
 Business Self-Employed: 180 million people are in the workforce, of which, 30% are self-
employed = 180 * 30% = 54 million accounts
 Business Employed by Company: 180 million people are in the workforce, of which 70% are
employed by companies with an average of 10 people per company = 180 * 70% = 126 million
divided by 10 people per firm = 12.6 million accounts.
Conclusion: Therefore our approach yields an estimate of 120 + 60 + 54 + 12.6 ~= 250 million checking
accounts in the U.S.
Sanity Check: How would you check whether the final number 250 million makes sense or not?

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Will People Buy Ice Cream Online?

 Rely on local shops (similar to online florists)

 Rely on local ice cream shops {similar to online florists)

2. Calculate the portion of population that eats ice cream

Revenue factors may be:

 Maintenance of the website

Yearly car insurance fee in Germany is around 1400 Euros on average.

a. Assume average life expectancy is 80

b. Segment market by urban vs. rural:

 Urban: (60 million people)

d. Car ownership per family: 100% in rural, 70% urban

4. Population who will shop for car insurance online:

 Assume people under age 20 don’t own cars

5. People who change car insurance each year

31 million * 10% = 3.1 million

6. People who would be willing to buy car insurance online

3.1 million * (3/8) * 90% = 1 million

Revenue = 1 million * 1,400 Euro = approximately 1.4 billion Euro

 Capital requirements are low

Delivery Hero Raises $110M in New Round of Funding

evaluate the feasibility of the idea.

Population of Germany is approximately 80 million as of 2014.

% Population that buys food online (segment by age, location distribution)

 Age 0-10: approx. 10 million

 Age 10-20 = 10M * 0.2 * €12 * 12 orders/year = €288M

 Business model is easy to copy.

a processing center is located in Carlsbad, California. Its major competitors in

 0 – 10: 8 million, 0% premium and basic

 Premium: (8 M * 0.01) + (48 M * 0.02) = 1.04M

 Premium membership: 60￡/month = 720￡/year

 Premium: 1.04M * 720￡ = ￡749 M

Scientist Invents Magic Eye Drops That Cure Eye Problems

The Magic Eye Drops have no known side effects or risks.

Direct the candidate to focus only on the U.S. market.

0-15 50M 20% 10% 1M

16-30 50M 30% 50% 7.5M

31-40 50M 40% 50% 10M

41-60 50M 50% 50% 12.5M

61-75 50M 60% 40% 12M

75+ 50M 75% 20% 7.5M

3. Pricing & Revenue

Exhibit 1: List of Cost Driver

Costs Driver Cost

Production $20 per drop

Distribution $100M per year

Costs Driver Cost Total

Marketing $150M * 10 years + $50M * 10 years $2B

Production $20 per drop * 2 eyes * 50M customers $2B

Operating Costs $6B

 Solicit buyers: Focus on strategic acquirers

Originally founded in Boston, Massachusetts, Advent currently operates from

 Different product lines for high-end and mass market.

 Specialty stores, Sports Authority, Wal-Mart, Target

 Squeezed on the prices

Sizing the market:

Toyota Develops Next-Gen Hydrogen Fueled Car Engine

 Gas station can be switched to water easily.

A. Sell the technology/patent to whom? Specific industry:

 car vs. airplanes vs. boats, etc.

Size of U.S. car market:

 300 million people in the U.S.

 Penthouse Suite: 2035075% = 5,250, ~5,000 Room Days/Year