The Fms Consulting Casebook 2021 22

Consulting Case Book

2021-22

Foreword
Thee FM
Th FMS
S Ca
Case
sebo
book
ok issu
issuee of De
Dece
cemb
mber
er 2021
2021 do
docu
cume
ment
ntss th
thee in
inte
tervi
rview
ew expe
experi
rien
ence
cess of st
stud
uden
ents
ts acro
across
ss co
cons
nsul
ulti
ting
ng fir
firms
ms
to as
assis
sistt the
the stud
studen
ents
ts of FM
FMS
S De
Delh
lhii in th
thei
eirr pr
prep
epar
arat
atio
ion
n fo
forr ca
case
se in
inte
tervi
rview
ewss du
duri
ring
ng pl
plac
acem
emen
ents
ts..
Thee ai
Th aim
m of sh
shar
arin
ing
g th
thes
esee ex
expe
peri
rien
encces is to in
info
form
rm st
stud
uden
ents
ts ab
abou
outt th
thee case
case in
inttervi
erview
ew expe
experi
rien
ence
cess of pa
past
st bat
batches
ches an
and
d to
help
help the
them
m pre
prepar
paree for the
their
ir pla
place
cemen
ments
ts ac
acco
cordi
rdingl
nglyy.
The experience
nces liste
sted below are no
nott nec
necessarily the best way to handle case intervi
rviews. They only serve
rve to give
st
stud
uden
ents
ts an id
idea
ea as to what
what to ex
expe
pect
ct wh
when
en th
they
ey wa
walk
lk in
into
to a ca
case
se in
inte
terv
rvie
iew
w. Ev
Ever
eryy in
indi
divi
vidu
dual
al cou
ould
ld hav
have hi
his/
s/he
herr un
uniq
ique
ue
way of tackling consulting interviews, each of which could be correct.
This
This do
docu
cume
ment
nt has
has cont
contri
ribu
buti
tion
onss fr
from
om st
stud
uden
ents
ts wh
who
o appe
appear
ared
ed fo
forr camp
campus
us in
inte
tervi
rview
ewss co
cond
nduc
ucte
ted
d by co
cons
nsul
ulti
ting
ng fir
firms
ms
duri
during
ng the
the plac
placem
emen
entt pr
proc
oces
esss over
over th
thee pa
past
st yea
ears
rs..
Casebook 202
Casebook 2021-22
1-22 Issue 3
The Consulting Club, FMS Delhi Decembe
Decemberr 2021
© The Consulting Club, FMS Delhi 2021-22 1

Acknowledg
Acknowledgement
ement
Thee Club
Th Club is gr
grat
atef
eful
ul to al
alll th
thee pe
peop
ople
le wh
who
o ha
havve he
help
lped
ed us by shar
sharin
ing
g th
thei
eirr case
casess an
and
d in
inte
terv
rvie
iew
w expe
experi
rien
encces
es,, wh
whic
ich
h has
has
enab
enable
led
d us to put tog
togethe
etherr a co
compr
mpreh
ehen
ensi
sive
ve pr
prepa
epara
rati
tion
on re
reso
sour
urce
ce fo
forr th
thee fu
futu
ture
re batc
batche
hes.
s.
Wee would also like to acknowledg
W acknowledgee the efforts of our entire batch as well, and thank the senior batches for their help
in putting together this case book. They have ensured breadth and depth in the cases to give the reader a
co
comp
mpre
rehe
hens
nsiv
ivee view
view of the
the ki
kind
nd of ca
case
sess th
they
ey ma
mayy be admi
admini
nist
ster
ered
ed..
Wee are also grateful to the alumni of the Consulting Club, FMS Delhi for their valuable feedback on the cases which
W
has helped us further enhance the overall quality of the book. We would also like to extend a special
ackn
acknow
owle
ledg
dgem
emen
entt to the
the co
cont
ntri
ribu
buto
tors
rs of th
thee pr
prev
evio
ious
us edit
editio
ions
ns of th
this
is FM
FMS
S Ca
Case
se Book.
Book
Copyright © 2021
The Consulting Club,
FMS Delhi

President ’s Desk
The President’s
Thee te
Th team
am is ver
eryy deli
deligh
ghte
ted
d to shar
sharee Th
Thee FM
FMS
S Co
Cons
nsul
ulti
ting
ng Ca
Case
sebo
book
ok fo
forr th
thee acad
academ
emic
ic year
ear 2021
2021-2
-222 with
with you
ou.. Wi
With
th ev
ever
ery
y
edit
editio
ion,
n, the
the club
club lo
loo
oks to mo
movve from st
strren
engt
gth
h to st
strren
engt
gth
h and fos
ostter a cult
cultur
uree of cons
nsul
ulti
ting
ng.. Th
This
is edit
ditio
ion,
n, like
ike th
thee
pr
prev
eviiou
ouss on
ones
es,, wi
willl no
nott on
onlly help
help you pr
preepar
pare for cons
nsul
ulti
ting
ng case
case in
inttervie
rview
ws, bu
butt wi
willl also pro
provi
vide
de an app
pprroa
oach
ch fo
forr
developing an analytical mindset, and the casebook'
k'ss universal applicability will help st
stu
udents
nts formulate and
impleme
implement
nt str
strat
ategy
egy in the
their
ir pro
profe
fessio
ssional
nal ro
roles
les..
In line with the feedback and intervi
rview requirements, this edition has been revised to increase the industry
ov
over
ervi
view
ewss an
and
d ca
case
se stud
studie
iess fr
from
om rec
ecen
entt in
inte
terv
rvie
iew
w proc
proces
esse
sess while
hile a new
new ap
appe
pend
ndix
ix se
sect
ctio
ion
n has
has be
been
en ad
adde
ded
d to en
ensu
sure
re
th
thor
orou
ough
gh pr
prep
epar
arat
atio
ion.
n. We ho
hope
pe th
that
at th
this
is ca
case
sebo
book
ok no
nott on
only
ly he
help
lpss you land
land you
ourr drea
dream
m con
onsu
sult
ltin
ing
g job
job, bu
butt also
also help
helpss
you create a long and successful career in management consulting.
All the best!
Karan Singhal

Contents
Par t Item Page # Par t
Pa Item Page #
A Basics about Consulting 6-9 C Basics of Guesstimates

Guesstimates & Case Solving 23-34
• What is consulting? 7 • MECE Segmentation 24-25
• Roles in a Consulting Firm 8 • Pareto Principle 26
• How to get into consulting ? 9 • Basics of Guessti
Guesstimates
mates 27-29
•
B Basic Concepts 10-22 Basic of P2P Case Solving

Solving 30-34
• 3C’s 11 D Basic Frameworks 35-41
• 4P’s and & 7P’s 12 • Market Entry Strategy 36
• Porter’ss 5 Forces
Porter’ 13 • Growth Strategy 37
• BCG Matrix 14 • Pricing Strategies 38
• Value Chain/Process Mapping 15-16 • GTM/New Product Launch 39
• ANSOFF Matrix 17-18 • Mergers & Acquisitions 40
• Company Environment & PESTEL 19-20 • Case Cheat Sheet 41
• Basics of Economi
Economics
cs 21 E Understanding Industries 42-65
• Basics of Finance 22 F Practice Guesstimates 66-98

Contents
Par t Item Page #
G Practice Cases
Cases 99-189
H Appendix 190-195
• Primer to Behavioral Prep 191-192
• Supplementary Frameworks 193-194
•
Guesstimate Cheat Sheet 195

• Fit Interview Questions 196
• Non-Verbal Communication
Communication 197
The Team
Team 198
Follow Us 199
Par
Partt A - About Con
Consulti
sulting
ng

What is Consulting?
Consulting?
What is it? How is it helpful?
In very crude terms, Objectives could be of various types-

“It is an outsourcing of business objectives
objectives,, to people with huge • Ofte
Oftenn it is prob
proble lemm wi
with
thin
in a bu
busi
sine
ness
ss that
that the
the clie
client
nt is unab
unable
le to ad
addr
dres
esss or
accumulated expertise in relevant field who offer customized solutions to even
even iden
identif
tifyy, ma
manyny a time
timess du
duee to lack
lack of qu qualalif
ifie
ied
d pers
person
onne
nel.
l.
the client’s stated objectives.” • It can
can be rela
relateted
d to busi
busine
ness
ss expe
expertrtis
isee that
that a clie
client
nt doesn’t have
have but requir
requires
es
for planne
planned d task
taskss in presen
presentt and
and/or
/or fut
future
ure..
• Also it could be targeted at improving business performance and/or
pro
profit
fitabi
ability
lity by explor
exploring
ing opp
opportu
ortunit
nities
ies to imp
improv
rove,
e, grow
grow or div
divest
est..
Top Players Why is it so sought after?
• With enormous amounts of subject knowledge of accumulated expertise • With enormous amounts of subject knowledge of accumulated expertise
that
th at th
they
ey po
poss
sses
esss, co
cons
nsul
ulta
tant
ntss ca
can
n dr
dras
asti
tica
call
llyy tr
tran
ansf
sfor
orm
m a bu
busi
sine
ness
sses
es in a that
that the
they poss
posseess
ss,, consul
nsulta
tant
ntss can dr
dras
asti
tica
call
llyy tran
transf
sfor
orm
m a busi
busin
ness
ess in a
rela
relati
tive
vely
ly qu
quic
ickk sp
span
an of tim
time.
e. relat
relativ
ivel
elyy qu
quic
ickk span
span of time
time..
Revenue = $ 10.5 billion Revenue = $ 8.6 billion Revenue = $ 4.5 billion
• From tu
From turn
rnin
ingg ar
arou
ound
nd lo
loss
ss ma
maki
king
ng bu
busi
sine
ness
sses
es to ma
mana
nagi
ging
ng hi
high
ghly
ly im
impo
porta
rtant
nt • Fr
From
om turn
turnin
ingg ar
arou
ound
nd loss
loss ma
makin
kingg busi
busine
ness
sses
es to ma
mana
nagi
ging
ng high
highly
ly impo
importa
rtant
nt
pol
olit
itic
ical
al el
eleect
ctio
ionn st
stra
rate
tegi
giees, th
theey of
offe
ferr cust
stom
omiz
izeed so
solu
luti
tion
onss for ev
eveery poli
politi
tica
call elec
electi
tio
on stra
strate
tegi
giees, they
they off
offer custom
stomiz
izeed solu
soluti
tion
onss for every
ery
problem. problem.
Revenue = $ 1.4 billion Revenue = $ 50.5 billion Revenue = $ 40 billion
• Consul
Cons ulta
tant
ntss ca
can n pi
pinp
npoi
oint
nt th
thee ch
chal
alle
leng
nges
es th
that
at ar
aree be
bein
ingg fa
face
ced
d by th
thei
eirr cl
clie
ient
ntss • Co
Cons
nsul
ulta
tant
ntss can
can pinp
pinpoioint
nt the
the ch
chal
alle
lenge
ngess that
that ar
aree bein
beingg face
faced
d by thei
theirr clie
client
ntss
today or anti ticcip
ipaate th
thee ones that might be in future. This proves them today or anticticipat
ipatee the
the ones that might be in futur ture. This proves them
effect
effectiv
ivee in fin
findin
dingg and imp
implem
lement
enting
ing sol
soluti
utions
ons tha
thatt are con
concu
curre
rrent
nt wit
with
h the effect
effectiv
ivee in findin
findingg and imp
implem
lement
enting
ing sol
soluti
utions
ons that
that are con
concur
curren
rentt with
with the
client’s
Revenue defini
def
= $ 1.2 initio
tion
billion n of succes
success.
s.
Revenue = $ 1.19 billion Revenue = $ 2.1 billion client’s defini
definitio
tion
n of succes
success.
s.

Roles/Hierarchy of a Consulting Firm

Almost all consulting firms follow
follow a flat hierarchy and up or out kind of career trajectory
trajectory..
Partner/Director
Principal/Sr. Manager
Manager/Project
Manager/Project Leader
Senior Consultant
Consultant/Associate Post MBA
Analyst

How
How to Get into Consulting from
from Here?
Resume & behavioural preparation
Use next 3 months to improve your skills
Prepare for the interview process
Prepare Hard Prepare Smart
Guesstimates Communication
Case Interview Business Acumen
HR Answers General Awareness
Crack the interview
It’s a rigorous selection process which requires str uctured preparation plan and serious efforts. Both the hard part
and the smart preparation part are equally important and wo
would
uld requi
require
re efforts at the individual level.
Part B – Basic Concepts


3C’s

• What is the Business?

•
•
Where is itTrends?
Scale and present?
Government Industry
Company
• Who are the customers? • Major Players & Market Share

• Where are they present? • Benchmarking with competitors
• How do they buy? • How is the Industry doing?
• Segmentation ?
Customer Competition
Other C’s: Collaborators Channels Costs Competencies Culture
Understanding the layer/level

layer/level of business at which you are doing the analysis is very important and it sets the context of the case. Useful
while opening a case to set context for problem at hand. Other C’s could be useful in further analysis of case .

4P’s and 7P’s

• What are the product characteristics

• Product differentiation
• Product segments
• Price in the market Product

• Price Benchmarking • Marketing Activities
• Changes in Pricing • Promotion Mediums
• Ad Strategies
Price Promotion
Other 3 P’s:
• People: Staff involved in entire value
value chain
Placement • Processes: Processes involved in value chain
• Physical Evidence: Tangible component of
• How is the product distributed to customers product/service
• Inventory-Transportation-Channels
Useful in the market entry

entr y and GTM category. E.g. revenue related problems, new product launch etc.

Porter’s Five Forces

Power of Buyers increases with:

Bargaining Power Barriers to Entry increase with:
• Concentration of buyers –
buyers – lesser
lesser number of buyers Threat of New • Economies of Scale
•
Lower switching cost for buyer Entrants (or •
Proprietary Product Differentiation
• Buyer’ss ability to integrate backward
Buyer’ • Brand Recognition
• Availability of substitutes Barriers to Entry) • High Switching Costs for Customers
• High Price Elasticity • Capital Requirements
• Lower Product Differentiation • Hard to access distribution channels
• Lower Impact on Buyer’s product Quality • Regulatory constraints and restrictions
Bargaining Power Bargaining Power of

of Buyers Industry Suppliers
Rivalry
Industry Rivalry Increases with: Power of Suppliers increases with

Bargaining Power
• Industry Growth & Number of Competitors • Input differentiation
•
High Fixed Costs and Barriers to Exit •
Degree of importance of supplier’
supplier’ss product/service
• Lower product differentiation & brand recognition – Impact
– Impact on cost or differentiation
• Highly Specialised Assets • Lower switching cost for suppliers –
suppliers – lower
lower
importance of volume sold
Threat of Substitutes increases with: Threat of
• Lower number of substitutes available –
available – less
less supplier
• Relative performance
performance of Substitutes Substitutes concentration
• Lower Switching Costs
• Higher Buyer Propensity to Substitute
Useful in various types of cases like market entry, growth strategies, new product launch.

BCG Matrix
High Low
High
Growth
Low
Market
Share
Dogs They are weak in markets

markets and difficult to m
make
ake profits
Question Marks Confused state as they are not clear about decisions on opportunities
Stars Monopolies and first-to-market products
Cash cows Doing well with no growth with limited opportunities
Useful while analyzing costs related problems, also in new business setup

Value
Value Chain/Proc
Chain/Process
ess Mapping
Mapping
Useful for portfolio analysis, investment decisions, growth strategies.


Value
Value Chain/Proc
Chain/Process
ess Mapping
Mapping
R&D Raw
Material Processing Storage &
Transportation Distribution Marketing Customer
Service
Equipment Cost of RM Machinery Transport for Sales Channel Marketing Repairs

Warehouse
Warehouse Channel
Human Contracts/Bulk Factory Rent Sales Force Spare Parts
Capital Deals Storage (Rent, Sales Force
Labour Hours Labour, Inventory) Training Returns
Cost of Quantity Used
Finance Technology Transport to Service
Customer Contracts
Capacity
Utilization
Packaging
Useful for cost analysis.


Ansoff Matrix
g
n
i
t
s Market
i Market Penetration
x
E Development
t
c
u
d
o
r
P
Product
w
Diversification
e
N Development
Existing Market New
Best suitable for Growth Strategy cases, also handy for Market Entry, Revenue Expansion etc.

Ansoff Matrix Example: Coca Cola


The Company Environment

A good strategy aligns a business' internal attributes,
attributes, things Macro Environment
like
ike its mis
issi
sio
on, visi
sio
on, cap
apaabiliti
ities in org
rgaaniza
nizati
tio
on with its
external
exte rnal environ
environmen
ment.
t.
Every compa
Eve mpany opeperarate
tess with
withiin a matri
atrixx of natur
atural
al,, soc
social,
al,
and institutional str uctures. It acts on these external
st
stru
ruccture
turess an
and
d entitie
itiess and they in tuturn
rn have an effect on the
company.
Company
A useful way to think about the relationship
relationship between
between a
company and its environment is that it is nested in multiple
layers.
1. In the outer most layer, furthest from the company
itse
tself, is th
thee mac
acro
ro environ
ronment, consnsis
istting
ing of soc
societ
ietal
institutions and trends in the broadest sense which
bu
busisine
ness
sses
es ne
need
ed to take
take into
into ac
acco
coun
unt.
t.
2. The middle layer is the entire industry to which a
Industry
co
compa
mpany
ny be
belon
longs
gs to.
to.
3. The
The inne
nerr mos
ostt layer is the compa
pan
ny.

PESTEL
Best suitable for market entry cases for macro analysis etc.

Basics of Economics
Supply-Demand Price Elasticities
Sensitivity of demand to price

changes
/
=−
/
Market Characteristics
Price Discrimination 4 Types of Market Structure
First Degree Second Degree Third Degree Perfect Monopolistic Oligopoly Monopoly
Competition Competition
With first-degree Second-degree Third-degree
discrimination, the discrimination discriminati
discrimination
on reflec
reflects
ts
company charges involves discounts differ
different
ent pri
prices
ces for Most Competitive Less Competitive
the maximum for products or different consumer
possib
possible
le pri
price
ce for services bought in groups
each unit bulk.
consumed.

Basics of Finance
Essential Useful Optional
Ratios
Time Value of Money Discounted Cash Flow

Profit & Loss Statement
Capital Budgeting Trading Multiples
Balance Sheet Terms
Annuity Transaction Multiples
Perpetuity
ℎ 
 
Part C – Basic of Guesstimates

and Case Solving

MECE Segmentation
MECE = Mutually Exclusive Collectively Exhaustive
Mutually Exclusive Collectively Exhaustive Using MECE segmentation is extremely effective in

Contents of the segments does Together, the statements answer
Together, structuring one’s analysis, in a case interview,
not overlap. the question or fully describe guesstimate or otherwise.
the overall idea.
Example 1: Unstructured
Unstructured grocery list: apples, milk, bananas,
bananas, Example 2: Profit Structure
spinach, carrots, grapes, butter, okra, eggs
eggs becomes:
Profits
Groceries
Revenues Costs
Dairy Fruits Vegetables
Can be further segmented based on: Can be further segmented
• Milk • Apple • Spinach
• Geography (Regional/Country Wise) based on:
• Butter • Grapes • Carrots
• Customer Segments • Fixed Costs/Variable
• Egg • Banana • Okra
(Income/B2B/B2C) Costs
• Revenue
Reven ue Streams (Ads/Distribution) • Costs across the Value
• Distribution Channel (Online/Retail) Chain

MECE Segmentation
Example 3: Customer Segmentation Example 4: Increasing Sales
Customer Clients Increase Sales
Individuals/ Institutions/ Increase Sales Increase #

Households (B2C) Organizations per Customer Customer
Increase Increase New Segments in the

Low Income Public Sector Private Sector Price Quantity same market
Medium New Markets

Income Inc. # Visits
(Market Development)
Inc. Quantity
High Income per consumption
The MECE principle suggests that to understand and fix any large problem, you need to understand your options by sorting them
into categories.
categories. Doing
Doing so will help you avoi
avoid
d dependencies
dependencies betwee
betweenn different branche
branchess of the tree and thus sub-pr
sub-problems
oblems can be
properly isolated.
isol ated.

Pareto Principle (80/20 Principle)

• As per the 80/20 Rule (aka Pareto Principle) a small number of causes (the "vital" or "critical" few) drive the vast majority of the
results, with roughly 20% of the causes driving 80% of the results.
• It is a ubiquitous phenomenon with examples across multiple industries:
Sales
Manufacturer organisation Service
~20% of the facility
~20% of the
product lines ~20%
~20 % of
product
generate ~80% tickets take
categories
of scrap up ~80% of
account for
time
~80% of sales
• The primary implication

implicati on of this concept is that you can realize a lot of impact by investing your effort in addressing a relatively small
number of issues
is sues and hence, prioritizing of issues is important.
•
The key takeaway from this principle in the context of interviews is that while constructing an issue tree or making recommendations
recommenda tions
(using the pyramid principle) one must prioritize the bigger issues by stating them first.

Introduction to Guesstimates
What is evaluated
evaluated through necessary to solve
What is necessary solve a good
Guesstimates? Guesstimate?
Ability to thin
think
k on Approach & Quantitative Communication
Communication&
Logical Thinking
Structure Skills
your feet Presentation
Guesstimates:
Guesstimates: Short,
Shor t, number –
–intensive
i ntensive estimation Cases
Ideal Time Limit: 15-20 minutes
Top Down and Bottom Up Supply Side and Demand Side

Approach Approach

Guesstim ates Do’s & Don’ts

Guesstimates

Do’s Ideal Flow Don’ts
Confirm Objective
• Take about a minute to • Ask too many clarifying
gather your thoughts and Think logically and come up with possible set of questions
decide approach approaches
• Questions about approach
Explain the best approach & confirm if you should go
• Use tree diagrams, normal
ahead with it
•
diagrams, anything that Start solving without
explains your thoughts State your assumptions first hand discussing the approach
clearly in a visual way
Lay down structure neatly on paper and solve it step by step • Start with a population set
• Relate your assumptions to every time
Make logical assumptions and always confirm them with
facts, experiences and Interviewer
•
sellable logic Be text heavy on your sheet
Keep communicating & asking the interviewer for buy-ins
• Keep talking as you write, • Unreadable writing
Calculate your answer. Be ready for a conversation
conversati on around
engage the interviewer
error estimate, other approaches etc.
• Guessing the numbers
If possible, reconfirm & triangulate your answer with a
•
ballpark estimate from another approach Solving

what youwithout explaining
are doing

Top Down & Bottom Up Approach

Top down approach Bottom up approach
• Startt wi
Star with
th an en
enti
tire
re po
popu
pula
lati
tion
on (i (in
n oth
ther
er worords
ds,, th
thee to
topp le
levvel
el)) • Start from the bottom — some low-level statistic, such as
and
and th
then
en br
brea
eaki
king
ng it do
down
wn un
unti
till yo
youu ar
arri
rivve at an an
answ
swerer.. Revven
Re enue
ue peperr st
stor
ore,
e, wh
whic
ich
h do
doeses no
nott ch
chan
ange
ge ac
acro
ross
ss yo
your
ur un
univ
iver
erse
se
and
and bu
buil
ild
d you
ourr way up to th
thee an
answ
swer
er..
Identify a Starting
d Universe
n
a
s
r
e
t
l
i
f Identify the smallest replicable block
/
s
n
o s
i
t t
i
d n Segment A Segment B
n e
o m
c g
t e
Estimate for a single identified block
n s
a
v
e
l
e
r
y
f Scale up!
i
t Segment Segment Segment Segment Segment
n
e
d
I
A1 A2 A3 A2 A3
Guesstimate = A1 + A2 + B1 + B2 +B3 • Bottom up approach is much more subjective than top down
approach.
• Segments: • Esp
speecial
allly rep
epllicab
ablele bloc
ocks
ks dedeppend on the case in ha han
nd, it can be
• Demographics (age, sex, income) one single store, one family to a single person. Be careful while
• Psychographics(attitudes, behaviors, values etc.) pick
pickin
ingg yo
yourur bl
bloc
ockk an
andd wh
whil
ilee sc
scal
alin
ingg up
up..
• Geography (city/country, urban vs. rural etc.) • Bott
Bo ttom
om up ap appr
proaoacch th
thou
oughgh gives ac accu
cura
rate
te re
resu
sult
ltss pr
pro
ovi
vide
dedd you
• And many more depending on the case! scalee up pro
scal proper
perlyly..

Case Interview Process

Flow of a Consulting Interview
1-2 min 5-15 min 10-15 min 20-40 min 3-5 min
General Behavioural
Guesstimate Cases Wrap up
Discussion Questions
Case Interview:
• Cases form the crux of a consulting interview
interview..
•
•
There could
They are be multiple
be
trying multip
test le
to test case
you forrounds
round
your:s with different
your: different partners.
partners.
• Analytical
Analytical ability
• Quantitative skills
• Structured problem solving and insight generation
• Communication and presence
•
Impact and Effectiveness

Interviewer Expectations
It’s not about being right. It’s about being right in an client friendly way
way..
How you are right matters a lot.
Things which are not client friendly:
❑ Jumping to conclusions
conclusions
❑ Scattered ideas, shooting arrows in the dark
❑ Can't be justified by data/facts
❑ Logically correct but practically unfeasible
❑ Being rude
❑ Poor communication

P2P Case Practice
Peer to Peer Case Practice

For Interviewer For Interviewee
• Understand the case properly • Understand the Question
• Provide information at right time • Clarify Objectives

after right questions
• Why?
• Set Context to Case
• Interview simulation
• Be open to different approaches
• Get used to speaking
• Define a framework
• Instant Feedback
• Guide the interview in such a way
•
that there is relevant and fruitful Two-way

Two-way learning •
Analyze, identify, discuss
discussion
• Solutions/Suggestions
• Feedback
Feedback and self learning
• Discuss improvements

Approaching
Approaching a Case
1 Repeat the question and clarify the objectives
2 Think and understand what more you need to know
Set context to the case by asking questions. Be very careful about what you
3
are asking and why.
4 Take time to think and lay down an structure for analysis
Involve interviewer in your analysis. Ask relevant question to process down

5
your structure.
Make good and relevant suggestions which are specific to the case. Always
6
have a rationale ready for Why?
7 Summarize the case properly. Be brief yet effective.


Case Interview
Inter view Do’s & Don’ts
Don’ts

Do’s Don’ts
• Listen and Interact with the Interviewer. • Incorrect interpretation of case objectives.
objectives.
• Develop your own framework to structure the problem. • Jumping straight to conclusions.
• Focus on high impact issues. • Not taking time to think, answering in hurry.
• Explore variety of options with creative thinking.

thinking. • Panicking if the answer is not apparent.
• Demonstrate Business Judgement. • Vehemently

Vehemently defending your analysis/suggestions.
analysis/sug gestions.
• Make quick and accurate calculations. • Internalizing the thought process.
• Make a good conclusion to your analysis. • Sticking to artificial framework.

Part D – Basic Frameworks


Market Entry Framework

Understand the question and clarify the Objectives
A market entry case is a relatively

relatively open ended case where in yyou
ou need to un
understand
derstand the rationale behind entering a new ma
market;
rket; and if that rationale can be prof
profitably
itably
achieved or not. If the decision of entry is made how should it be implemented.
Set context Know about company? What Business? Entry where? Which Product? Why enter? Target/objective? Decided to enter?
Should they Enter?
New Market Product Customers Capabilities Regulations
• Scale and Growth • Product differentiation • Target segment • Manufacturing • Government Norms
• Major Players • Positioning Plans • Customer Habits • Financials • Resources Av
Availability
ailability
• Market Share • Price/Features • Segmentation • Sales and Distribution
• Advantages/Disadvantages
Advantages/Disadvantages • Other attributes
Yes/No
Yes/No Why No?
No? Suggestions
If Yes How?
Entry Options Operationall Decisions

Operationa Marketing Growth Plan Conclusion
•
Start on own •
Raw Materials, Workforce
Workforce •
Promotion Strategies •
How to scale up
• Acquire • Manufacturing • Product/Geography expansion
• Joint Venture
Venture • Distribution Channels

Growth Strategy
Understand
Understand the Question and
and Clari
Clarify
fy the Obje
Objectiv
ctives
es
Growth Strategy related cases are comparatively easier to analyze because avenues for growth are unlimited. You
You need to understand the current state
stat e of business and
then come up with practically feasible growth opportunities. Each opportunity needs to be assessed for potential impact vs financial and practical feasibility.
Set context What Business? Current Performance?

Performance? Competitive Benchmarking? Growth T
Targets?
argets? Capabilities? Bottlenecks?
Growth
Growth Stra
Strategie
tegiess
Existing
Existing Market
Market Geographic Expansion Portfolio
Portfolio Expansion In-Organic
In-Organic Growth
Growth Business Integration
• Customer Satisfaction • Domestic expansion • New Product line • Acquire competitors • Outsourcing
• • • • •
Marketing Global expansion Additional services Acquire in new Backward/Forward

• New distribution • Rural expansion geographies Integration
Channels
• Pricing
Summary Proposed growth path, Potential growth prospects, Threats & Challenges etc.

Pricing Strategy
Understand the Question and Clarify the Objectives
Pricing decisions should be taken to maximize the revenue potential by understanding product competitiveness in the market. U nderstanding competitive products
products,,
possible substitutes, price elasticity,
elasticity, cost structures is essential to take a good pricing decision.
Set context Product/Service characteristics? Product use? Capital Investments? Competitors? Substitutes?
Pricing Factors
Product Costing Competitors Substitutes Customer
• Radical vs Incremental • R&D cost • Competitive products • Available substitute • Who is buying
change • Manufacturing Cost • Product differentiation • Substitute use triggers • Their characteristics
• Uses/ Characteristics • Other costs • Price benchmarking • Future substitutes • Perceived Value
•
Advantages/Disadvantages
Pricing Options
Competitive Pricing Cost Based Pricing Price based Costing
• Competitors’ price • Cost of production + M

Margin
argin • How much is customer
• +/- Prem
Premium/D
ium/Discou
iscount
nt willing to pay

Go To Market
Market Strategy/New Product
Product Launch
Clarify
Understand the Question and Clarif y the Objectives
Provide a blueprint for launching a product in a market, positioning it to achieve competitive advantage. You
You would typically look at defining the 4Ps after deciding on
the target segment. Touching
Touching upon all relevant aspects of the problem is much more important that the correct answer. The idea is to identify one/a few issue(s)
examining the trade-offs.
Objectives, Capabilities, Competition (How many

Objectives, many,, who all, Market Share, Growth Rate), Customers (Growth Rate, Potential Segments),
Set Context
Products (Existing Products, Substitutes).
Idea
Product Distribution Communication GTM strategies are supposed to be

Segmentation
Development Strategy Strategy integrated in nature and thus the
processes strongly follow from each
Whom to Sell? What to Sell? Where to Sell? What to Say? other.
Use only relevant bases • Features • Distribution Channel • Positioning
from the following: • Packaging • Distribution Model • Communication Strategy Be Selective
• Geographic • Use-cases
Use-cases • WC Turnover o Advertising
• Demographic • Size (SKU) • Margins o Personal Selling The idea is to not do everything,
everything,
• Psychographic • Product Name • Sales Force T&D o Sales Promotion rather to focus on one issue and nail
• o
it. E.g. Too many sales channels can
Behavioural •• Differentiation
Pricing o
Direct Mktg
Public Relations lead to channel conflict, Too much
communication is expensive
expensive..

Merg
Merger
er & Acquisitions
Acquisit ions
Clarif y the Objectives
Understand the Question and Clarify
M&A cases are focused on decisions regarding a potential merger or acquisition opportunity. You
You need to understand the synergies involved, do cost vs benefit analysis
& due diligence, and recommend whether to take the opportunity or not.
Set context Company business? Current Performance? Target Company ? Past M&A history in similar
simila r space ? Industr
Industryy Trend ?
Deal Rationale Business Benefits

Implementation
What is the firm’s objective?
objective? How the Target fits for Objective?
• Target? • Business Synergies? • How can the merger or
• New Markets/Channels • Market Reach (New/Existing) acquisition be effectively
• Cost reduction • Competition/Survival Due Diligence
implemented.
• Market Share/Competition • Cost Savings/Tax Benefits • Issues related to cultural
Checks and Confirmations
• •
Investment Portfolio Expansion •

Strategic Options integration and operational
• Commercial (Market related) aspects and targeted benefits
Deal Price Potential Risks • Operational (Target related)
• Financial (Target’s data, Exit Strategies
Fair Price? Challenges/ Risk in M&A Valuation)
• Valuation • Synergy realization • Legal (Regulatory norms) How, When, why to exit?
• Is it fair? Can we afford? • Integration • How long to Hold on?
•
•
Transaction Typ
Typee •
Cultural Aspects •
Strategic
V
Very Options?
ery important in Private Eq
Equity
uity
• Post M&A costs • Macro-economic risks

Case Framework Cheat Sheet-When

Sheet -When Nothing Works
Works
Sometimes, it may be the case that none of the standard case frameworks can be applied to the business situation at hand. The re are certain other approaches you can
explore to solve the case in that case.
Go through the entire Value Chain or Process Undergone (For

(For Process Flow Cases). Drill down into each stage or step to llook
ook for
Set context
inefficiencies, issues or bottlenecks.
Demand Procurement Inbound Sales and

Va
Value
lue Chain
Chain Storage and Outbound After-Sales
Planning & of Raw Logistics Manufacturing Marketing/
Warehousing Logistics Services
Forecasting Materials Distribution
Volatility? Price? Wastage? Transportation Direct Costs?

Analytics & Suppliers? Costs? Modes? Machines? Tech? Capacity
Constraints? Transportation
Costs? Modes? Channels? Share
& Penetration? Quality?
Cost? Variety?
Forecasting? Contracts? Network Overheads? SKUs? Network Marketing Benchmarking?
Discounts? Optimization? Benchmarking? Technology? Optimization? Strategy? B2B? Accessibility?
Substitutes? Efficiency? Outsourcing? Inventory? Efficiency? B2C? Frequency?
Chart out the entire process journey. Sample Use Cases

Cases –
– Look for Bottlenecks
1) Ecommerce Ordering Dissatisfaction
Process Flow / Customer Journey 2) Toll Plaza inefficiencies • A bottleneck is any area along the production
production line where
3) Getting late to office/home work can get backed
backed up for one reason
reason or another.
• Performing a bottleneck analysis can help to identify the
Example: E-Commerce Discovery and Ordering Process Map cause of a bottleneck, and lead to pot
potential
ential solutions to get a
smooth, continuous, even work-flow.
Landing Usage &
Search Evaluation Ordering Delivery Unboxing
Page After Sales Example: Teeth Check-up and Cleaning Process
Cleaning
(24mins/unit)
SEO? Ads? Navigation? Customer Develop X-
Social Products/page Product Page?
Reviews? Use? Cart options?
Wishlist? Sellers?
Shipping Condition of
Package? Care? Refund/ Take X-Ray Ray Dentist
(2mins/unit) (8mins/unit)
Media? Description? Graphics? Payment Dates? Breakage? Exchange/ (4mins/unit)
X-Ray Exam
Emails? Options? Bundling? Modes? Experience? Return? (5mins/unit)
Part E – Sector Overview


Industry Analysis: Table of Contents

Par t Item Page # Par t
Pa Item Page #
1. Indian Automotive Industry 44 15. Indian Power Industry 58
2. Indian Aviation Industry 45 16. Indian Telecom Industry 59
3. Global Aerospace Industry 46 17. Indian Tyre Industry 60
4. Indian Banking Industry 47 18. Indian Cement Industry 61
5. Global Cloud Industry 48 19. Indian EV Industry 62

6. Indian E-Commerce Industr y 49 20. Indian Healthcare Industry 63
7. Indian Ed-Tech Industr y 50 21. Indian Defence Manufacturing Industry 64
8. Indian FMCG Industry 51 22. Indian Food Delivery Industry 65
9. Indian IT Industry 52
10. Google as an Industry 53
11. Indian Hospitality & Tourism Industry 54
12. Indian NBFC Industry 55
13. Indian Petrochemical Industry 56

14. Indian Pharma Industry 57

Understanding Indian Automotive Industry

Industry Product Types Market Share & Major Players KPI Growth Factors Cost Factors
Average Prodn. Downtime. • Favorable demographic
5ththLargest Car Manufacturer 2 Wheeler –
Wheeler – 81.2%(units)
81.2%(units) Tata Motors Inventory Turnover, trends
7 in Commercial Vehicles Passenger Vehicle –
Vehicle – 14.6%
14.6% 3 Wheelers 3 Maruti Suzuki Others 7%
Utilization Rate • Continued government Depreciation 6%
Industry Size –
Size – 7.1%
7.1% of GDP Commercial –
Commercial – 3.1%
3.1% M&M SG&A
Commercial 4 support to the industry 10%
Jobs –
Jobs – 35
35 million jobs Three Wheeler –
Wheeler – 1.2%
1.2% Hero MotoCorp Largest Importers R&D 3%
Automotive Parts • Develop India as Logistics 6%
CAGR –
CAGR – 2.36%
2.36% (2016-20) 4 Wheelers 13 Bajaj Auto Direct Labour 21%
United States Brazil manufacturing hub
Target –
Target – US$
US$ 251.4-282.4bn) Ashok Leyland Raw Materials 47%
Turkey Germany • The potential of EV
by 2026 2 Wheelers 80 TVS, Eicher
Bangladesh
Value Chain SWOT Analysis Barriers to Entry Current Trends

Inbound log Raw materials, warehousing handling Strength Weakness • Deep diving sales –
sales – due
due to
• Economies of Scale
increasing fuel cost &
Operations Machining, Assembling, Testing product • Large domestic market • Low labor productivity • Product Differentiation
liquidity tightening post
• Increase in the exports level • High interest rate and overheads • Capital Expenditure
Outbound log Warehousing and distribution ILFS crisis
• Sustainable labor cost • Various forms of taxes • Access to Distribution
Competitive auto component vendor
• Recent Job losses
Marketing & •
• Inadequate investment in R&D • Govt. Guidelines
Advertising, pricing and promotion • Recent tax cut
Sales base • Supply Chain infrastructure • Dynamic Environment
• Add. tax reduction, on
• Govt. incentives in manufacturing bottlenecks • Jockeying for Position
Service Installation and repair parts • Upcoming bases for R&D • Lack of Economies of Scale • Lack of Substitutes loans for EV
• Shift to BS-VI
• Growth IT Capability in design,
Factors impacting value chain development and simulation
Production Clusters Future Trends
Suppliers Change in vehicle tech, discontinuation • Market proximity
Trade After sales, sales & service discontinue

discontinue Opportunities Threats
• Changing consumer
• Commercial Vehicle Segment • Rising Input costs of raw materials
Legislation New standards, autonomous driving mobility
• Increase in income level • Rising interest rates
• Electric Mobility
• Cut in excise duties • Cut-throat competition
•
Fin. service Funding required for transportation • Rising demands in rural areas •
Increase in fuel prices •
Digital Marketing
Ride pooling
• Export projected to grow at 30% p.a. • Import of components from
Manufacturer Collaboration, Change in drive systems • Autonomous Vehicles
• NATRIP – US$
NATRIP – US$ 388.5mn ASEAN and China
Insurance New tariff structures, Autonomous cars • FAME for EV

Understanding Indian Aviation Industry

Industry Overview Services Stakeholders Market share Major Constraints
Re
Reve
venu
nuee : USD
USD 72 Bill
Billio
ion
n In
Insu
sura
ranc
nce,
e, Fina
Financ
nce,
e, Di
Dist
stri
ribu
buti
tion
on,, Fi
Firmrm Infr
In fras
astr
truc
uctu
ture re:: Finance., • Dynamic Labour Situation
In
Indi
diaa c urr
urree ntl
ntlyy has 464644 Airp
Airpoorts
rts an d Telecomm, Maintenance repair & Accounting, Legal Compliance Market share of major players (2021) • High taxes, fee, regulatory costs
airstri
airstrips;125
ps;125 ow owned
ned by AAI overhaul
overhaul (MRO),
(MRO), Fuel HRM:: Flight r o
HRM ou
u ttee, yield analyst , • Inadequate future plans for air &
Currently
Curren tly 3rd larges
largestt civil aviation
aviation market IndiGo: 57%
pi
pilo
lot,
t, sa
safe
fety
ty,, ba
bagg
ggag
agee ha hand
ndli
ling
ng,, in-
in- ground infra
Predict
Pred icted
ed to be the 3rd larges
largestt passen
passenger
ger SpiceJet: 8.7%
Suppliers flight
flight and agent
agent tra
traini
ining
ng • Restriction on airline consolidation
volume market by 2024 Air India: 20.3%
Tech Developme
Development nt:: Reserv
Reservati
ation,
on, in- & foreign investment
Fastest
Fastest grogrowin
wingg domest
domesticic market
market @18
@18% % Aircraft, Go Air: 6.8%
Engines, Electronics, flight
flight and yie
yield
ld manage
managemen mentt system
system • Volatility in ATF rates making
Air Asia: 5.2%
5.2%
Computer,
Compu ter, Chemicals
Chemicals IT Communicati
Communications ons profitability uncertain for airlines
Vistara: 8.3%
Value
Value Chain The Indian Advantage Cost Drivers
R out
outee S eell eecc titi o
on
n ; Pas
Pas se
sen ge
ger S erv
ervii ccee; Robust Demand Opportunities in MRO • As 2/3rd of the costs of flying an airplane are fixed, so
Inbound log Yield Management system; chan
change
gess in fuel
fuel co
cost
stss ca
can
n swin
swingg a flig
flight
ht from
from prprof
ofit
it to loss
loss
Fuel;
Fuel; Sch
Schedu
edulin ling; g; Cre
Crew
w Sch
Schedu
edulin
ling
g • Expect ed
ed demand boost from • Growth in ser
Growth servic
vices
es mai
mainly
nly for MRO de
depe
pend
ndin
ingg on how
how mamany ny pe
peop
ople
le are
are on the
the flig
flight
ht as it co
cost
stss
rising middle class with more • Expe
Expend
ndit
itur
ure:
e: 1313-1
-15%
5% of re reve
venu
nue:
e: around
around 10-12%.
10-12%. But labor
labor accoun
accounts ts for app
approx
roxima
imatel
telyy 35%
Ticket Counter operations; gate disposable
dispo sable inco
incomeme Second
Second hig
highes
hestt aft
after
er fue
fuell of the total
total of airlin
airlines'
es' ope
operati
rating
ng expen
expenses
ses..
ope rrat
atiio ns;
ns; Airc
Aircra
raff t ope rrat
atii o
on
n s;
s; O n • No o f ai
airp
rpoort
rtss to ex pan
pand
d to 25
2500 • By 2020 MRO industry likely to • Ot
Othe
herr expe
expens
nses
es incl
includ
udee main
maintetena
nanc
nce,
e, papart
rtss and
and labolabor,
r,
Operations
Board Service; Ticket oper at
ations; •
by
Frei
Fr 2030
203
ghtt0 tr
eigh traf
affi
ficc al
also
so to in
incr
crea
ease
se fo
forr tripl
triplee it
itss re
reve
venu
nuee to US
USD
D 1.5Bn handling luggage, airport fees, taxes, marketing,
Baggagee handl
Baggag handling
ing pr
prom
omot
otio
ions
ns,, trav
travel
el ag
agen
entt comm
commis
issi
sion
onss and
and pa
pass
ssen
enge
gerr
trade expe
expenses
nses etc.
Ba
Bagg
ggag
agee Syst
System
em;; Flig
Flight
ht Conn
Connececti
tion
ons;
s;
Ren
Rental
tal Car and Hotel
Hotel res
reserv
ervati
ation
on system
system Increasing Investments Policy Support
Outbound log New Revenue Streams
• USD 12.1 Bn invested in from • Enc our
Enc ourag
agee me
men t of PvPvtt. Sec to
tor by
2012
2012 to 201
2017:
7: US
USDD 9.
9.3B
3Bnn in pr
priv
ivatatee Govt. Airline passengers represent a huge potential market for food,
Pr
Prom
omot
otio
ion;
n; Adve
Advert
rtis
isin
ing;
g; Adva
Advant
ntag
agee
Marketing & sector • Foreig
For eignn inv
invest
estmen
mentt (~4
(~49%)
9%) all
allowe
owed
d insura
insurance
nce,, package
package tou
tours,
rs, and oth
other
er produc
products
ts tha
thatt are adj
adjace
acent
nt
Program; Travel Agent Program;
Sales • Growing private sector unde
un derr au
auto
tomamati
ticc ro
route
ute in sc
sche
hedul
duled
ed,,
Group Sales parti
partici
cipa
pati
tion
on th
thro
roug
ughh th
thee Pub
Publi
licc - regional & domestic scheduled to
grothe
groth
wetth
hco
core
creanpr
prod
oduc
uluct
culti t of
tiva te a thi
vate seat
seiat.
th s . mark
Ca
Carr
marrie
iers
rkeetrs binysear
sebarch
uch
ui
i ldiof
ng high
ldin hiawar
gh-ma
aw-marg
enrgin
are in,
eess
ss,
Priv
Privat
atee Pa
Part
rtne
ners
rshi
hip
p (P
(PPP
PP)) ro
rout
ute;
e; passenger
passenger airlin
airline.
e. ge
gen
ne rrat
atii ng
ng traf
trafff ic
ic , c lo
losin
sing tra
tran sac
sacti
tio
o ns,
ns, and
and f ilil lili ng
ng the
the
Lost
Lost Baggag
Baggagee servic
service;
e; Compla
Complaint
int fol
follow
low
Service Also promotion of FDI "shopping basket“
"shopping basket“..
up

Understanding Global Aerospace Industry

Industry Product Types Major Players & Revenue in $Bn KPI Distribution Biggest Airline Fleets(#
Fleets(# of
USD (2019) Planes)
Plane s) - 2019
• •
•
Manufacturing
military of civil
aerospace and
vehicles Civillarge
and Aircrvehicles
Aircrafts
afts - Small Total Revenue by
Category(Military/Civil) Full aviation vehicles
manufactured and – 1317
1317
GE Aviation 32.9 • American Airlines
Airlines –
• Services –
Services – 100+
100+ • Helicopters General Dynamics Corp. 39.4
• Average Monthly Aircraft distributed by a handful of • Airlines – 1069
Delta Airlines – 1069
• Total Revenue –
Revenue – $760
$760 Bi. • Military Aircrafts and Production Rate large key players. • China Southern Air. – 809
– 809
Lockheed Martin 59.8
(2018) Fighter jets • Monthly Delivery Value • – 783
Lufthansa –
Lufthansa 783
Airbus SE 70.5
• CAGR –
CAGR – 9-11%
9-11% (2014-18) • Parts and additional • Value of Backlogs Other smaller players • Airlines – 758
United Airlines – 758
support systems Boeing 76.6 Annual R&D Spending
• Players –
Players – 20+
20+ • across regions to • Airlines – 719
Southwest Airlines – 719
• Big Players
Players - 8 UTC 77 manufacture and sell parts. • Airlines – 697
China Eastern Airlines – 697
Value
Value Chain Major Aerospace Deals in 2019 Current Trends in the Industry
• Raytheon
Raytheon Co. –
Co. – Unite
Unitedd Technolo
Technologiesgies Corp. - $52
$52 Bi • Improvements in ope ra rating efficiency, advanced
Conceptual Design, Preliminary Design, Guangzhou Shipyard
Guangzhou Shipyard Intern
Internation
ationalal Co. Ltd –
Ltd – Chi
Chinana CSSC
CSSC Hol
Holdindings
gs - $8.
$8.66 Bi
Design • avio
avioni
nics
cs,, im
impr
pres
essi
sivve in
inte
teri
rior
or cabi
cabinn de
desi
sign
gnss an
and
d no
nois
isee
Detailed Design Cobham
Cobh am PLC
PLC –
– Al
Al Convoy Bidco Ltd. - $4.9 $4.9 Bi
•
redu
reduct
ctio
ionn capa
capabi
bili
liti
ties
es ar
aree dr
driv
ivin
ingg in
incr
crea
ease
sed
d co
cons
nsum
umer
er
• Kep
Keppel
pel Cor
Corp.
p. Ltd
Ltd.. –
– Kya
Kyanit
nitee Investme
Investment nt Hol
Holdin
dings
gs Pte Ltd
Ltd.. - $3Bi demand.
Airframe/Structural Components, • Mitsubishi
Mitsub ishi Hitachi
Hitachi Power Syste
Systemsms –
– Mit
Mitsub
subish
ishii Hea
Heavyvy Ind
Industr
ustriesLtd.
iesLtd. - $2
$2.3
.3 Bi
Component • Daewood
Daewo od Shipbuildin
Shipbuildingg and Marine Engg. Engg. –
– Hyu
Hyundandaii Hea
Heavy
vy Ind
Industr
ustries-
ies- $2Bi
Onboard Avionics Components, • Cust
Custom
omer
erss ar
aree no
now
w foc
focus
used
ed on repl
replac
acin
ingg th
thei
eirr ol
old
der
Production • Exotic
Exotic Met
Metals
als Formin
Formingg Co. LLCLLC – – Par
Parker
ker Hannif
Hannifin in Cor
Corp.
p. - $1
$1.7
.7 Bi
Propulsion System Components
•
Dynetics
Dyne tics Inc.
Inc. –
– Lei
LeidosHoldi
dosHoldingsInc.
ngsInc. - $1.7
• Ontic
Ontic Engg.
Engg. And Man Manufaufactu
cturin
ringg Inc
$1.7 Bi
Inc.. –
– CV
CVC C Capi
Capitatall Partn
Partner
erss VI
VIII LP - $1.
$1.44 Bi 4flee
fl0eets
%ts.. oOver
Ov
f er
aircne
next
raxt
ft 20
delyear
ye
ivears
rise,s itwisill es
esti
btima
emate
fted
ord rth
that
epatlacar
arou
eound
mend
nt
Airframe/Structural Subsystems, Onboard purposes.
Subassembly Avionics Subsystems, Propulsion
Subsystems Lower oi
oill pr
pric
icees si
sin
nce 201
2014 ha
havve le
led
d to an in
incr
creeas
asee in
Key Growth Drivers •
dema
demand
nd for
for ci
civi
vill avia
aviati
tion
on,, wh
whic
ich
h has
has caus
caused
ed for
for ai
airl
rlin
ines
es
Airframe Assembly, Onboard Avionics
Avionics
Final • GDP
GDP GrowGrowth
th of em
emer
ergi
ging
ng ma
mark
rket
et • Air Traffic Growth Rate to buy more aircrafts, and this trend is expected to
Integration, Propulsion System
Assembly economies • Chan
Changiging
ng DyDyna
namimics
cs of Air
Air Tr
Trav
avel
el con
contin
tinue
ue wit
withh oil pro
produc
ductio
tion
n being
being ramped
ramped up.
up.
Integration
• Replac
Replaceme
ement
nt Demand
Demand (Ba
(Based
sed on age (Privat
(Privatee vs Civil)
Civil)
of flee
fleet)
t) • Risingg Geopolitic
Risin Geopoliticalal Conc
Concerns
erns • The current imbalance in demand and supply will shift
Post
Glo
Global
bal Aviatio
Aviation
n FuelPrices Growth of allied industries as an
anal
alys
ysts
ts exp
expect
ect Bo
Boeein
ingg an
and
d Airirb
bus cut ba bacck bui
uild
ld
Production Installation and repair parts
• Globall Defence
Globa Defence Budgets
Budgets (Hospitali
(Hospitality,
ty, Tech
Tech.)
.) ra
rate
tess to matc
match
h wi
with
th th
thee dema
demandnd in th
thee se
sect
ctor
or..
Services

Understanding Indian Banking Industry

Understanding
Industry Trends Type of Banks Liabilities Regulator
12 public sector banks Total credit extended by Current Accounts RBI for all
Schedule
Sche duled Banks –
d Banks – Accounted
Accounted for in RBI Act and governed by the general rules like CRR
22 private sector banks commercial banks in FY20 requirements etc.
requirements Savings Accounts banks except
46 foreign banks ~ US$1.7
US$1.7 tn, Fixed Deposits non-
Non-Scheduled
Non-Schedule d Banks
Banks – Bank
– Bankss th
that
at do not
not have
have to co
comp
mply
ly with
with any
any RB
RBII re
regu
gula
lati
tion
ons.
s.
56 regional rural banks Deposits
Depos its - US$ 1.93 tn Small
Small Fin ancee - Banks
Financ Banks aimed
aimed to pro
provid
videe fin
financ
ancial
ial inc
inclus
lusionto
ionto weake
weakerr sectio
sections
ns of the societ
society.
y. scheduled.
1,485 urban (Grew at 13.93% CAGR)
Assets / Revenues
Revenues
Payments
Paym Bankss – A
ents Bank A new model of bank that is allowed to accept a restricted deposit. SEBI for
cooperative banks Public Secor Bank Asset –
Asset – NBFC –
NBFC – A
A company registered under the Companies Act, 2013 engaged in the business of loans Loan Mutual Funds
96,000 rural US$ 1.52 tn. and adv
advanc
ances,
es, acquis
acquisiti
ition
on of shares
shares,, sto
stock,
ck, bon
bonds,
ds, hir
hire-p
e-purc
urchas
hasee ins.
ins. busine
business.
ss. Overdraft Fees, ATM and Capital
cooperative banks Bank credit –
credit – US$
US$ 1.47 tn Fees, other charges. Markets
Value
Value Chain Key Players Innovations COVID Impact
Marketing Advertising, Branding, Sales Support ▪ PNB ▪ SBI ▪ IDBI ▪ RBS
• Hyper-personalisation • Increased reliance
Increased reliance on digita
digitall
▪ ICICI ▪ Canara Bank ▪ Deutsche Bank ▪ HSBC
Sales Acquisition, Offering, Multitech Mgmt. • Open banking
banking channels
▪ HDFC ▪ Axis Bank ▪ Yes Bank ▪ Citi Bank
• Phygital
Phygit al Deliv
Delivery
ery • Financial
Finan cial loss
Funding Deposits, Securitization, Credits KPIs • Predictive
Predic tive Banki
Banking
ng • Lowerr reco
Lowe recoveries
veries
• Robotic
Robo tic Automation
Automation • Reduced cash-inflows
Investments Credits, Securities, Products, Invest. Loan growth rate indicates ease of Deposit growth rate gives • Instantt Payme
Instan Payments
nts • Board procedure
procedure
venture into attractive new markets or a investors a sense of how much • Blockchain/IoT • Cyberr fraud
Cybe
Services Account & Asset Mgmt, IPO, M&A
low-cost capital base lending a bank can do.
Transactions Payment, Trading, Settlement, Cust. Loan-Deposit Ratio helps assess a Efficiency ratio measures how Advantage India Government Initiatives
bank's liquidity, and hence, its much the bank pays operating
Porter 5 Forces Analysis aggressiveness. expenses • Demand will increase as • Laun
Launchch of e-RU
e-RUPI PI digi
digita
tall
working population and payments
payme nts soluti
solution.
on.
Suppliers Power Liquidity is controlled by the RBI. CASA ratio is the ratio of deposits in Capital Ratio is degree to which
disposable
dispo sable inco
income
me increase.
increase. • L in
inkin
kin g di gi
gi tal
tal p ay ayme
men nt
current and saving accounts to total the bank is vulnerable to an
Demand Rising incomes, rural inclusion • Services like mobile and syst
system
emss of Cent
Centra rall Ba
Banknkss
deposits. unexpected increase in bad loans
inte
intern
rnet
et ba
bank
nkin
ingg will
will lead
lead to of In
Indi
diaa and
and Sing
Singap apor
oree for
for
Barriers to Licensing requirement, investment in tech Net Interest Income (NII) is the Net Interest Margin is NII when betterr oper
bette operation
ational
al efficienc
efficiency.
y. low cos
costt fun
fund
d tra
transf
nsfers
ers..
Entry & branch network, cap. & regulatory req. • •
income earned due to difference in

interest rate calculated as book.
average loan a percentage of the Rising fee income will Gover nm
nment propos ed
ed
Competition High. Public, private, NBFC etc improve the bank r eevvenue fully automated GST
If a bank's Credit Quality is in decline because of non-performing loans and mix. ref
refund
und mod
module
ule elimin
eliminati
ating
ng
Bargaining For good creditworthy borrowers
assets and/or charge-offs increases, the bank's earnings are r isked. • RBI pol
polici
icies
es lead
lead to stabil
stability
ity.. nee
needd for e-way
e-way bills.
bills.
Power, buyers bargaining power is high.

Understanding
Understanding Global Cloud Industry
Industry Product Types Market Share & Major Players Distribution Growth Factors Global IT Service Revenue, by model
Infrastructure as a service Platform as a service
Others Marginality & Scalability
On Demand Cloud
(Infrastructure IaaS
as a Service)
Virtual
SimpleMachine Service
Storage System Google Cloud 8 39 Divided into no. of global Network Effect s
a
r
l
l
o 300
Software as a service
regions, each has multiple Demand for Remote
d
.
S
Services –
Services – 100+
100+ RDBMS Azure 22 availability zones.
.
U
197.60
Isolated Cloud Resources AWS 31 Desktops n

200
148.50
Industry Size –
Size – $440+
$440+ Billion Allow users to set
o
i
l
l
i 123.90
VPNs Start-up
Start-up Ecosystem
Ecosystem b
(2021), CAGR –
CAGR – 16.3%
16.3% 2021 geographical limits on their n
i 100 100.38
47.60
Increased Data g
n
61.11
25.80 35.90
(2021-26), Players –
Players – 30+
30+ * Others includes major players like Al ibaba services.
i
d 11.57 18.05
24.8 35.4 49.0 67.2
Consumption n
e 0
17.8
Big Players
Players - 5 Cloud & IBM Cloud p
S 2016 2017 2018 2019 2020
Cloud Computing Market Share Pricing Models Major Services over Cloud
Global Cloud Computing Market Share by Industry, 2020 On Demand Spot Instances • Compute • Management & monitoring
7%
• Storage • Security, Identity, &
IT&Telecom • You pay for compute capacity
capacity by
23% • Spot instances allow you to bid on • Data management Compliance
10% Manufacturing the hour or the second
spare computing capacity for up to • Migration • Analytics
BFSI
depending on which instances • Networking & Content • Artificial intelligence & IoT
12% ConsumerGoods &Retail
you run. 90% off the On-Demand price.
delivery • Mobile development
17% Government
• Yan increase or decrease your • Development tools & • Notifications
15% Healthcare
compute capacity depending on application services • Business Productivity
16%
Others Dedicated Hosts
•
the demands
Only pay the of your application
specified per hourly Advantages of Cloud
• A Dedicated Host is a physical
physical
Fees rates for the instance you use.
server dedicated for use. • Tr ading
Trad ing Capex for variable Opex : Minimize overhead for
• “Pay -as-you
-as-you go" model. • Reduce costs by bundling software investment, maintenance, and management.
Savings Plan licenses, including Windows Server,
• Based on hardwa
hardware/OS
re/OS/netw
/networkin
orkingg feature
featuress chose
chosen.n. • Economies of Scale
• Payy fo
Pa forr a si
sing
ngle
le vi
virtu
rtual
al co
comp
mpute
uter,
r, a de
dedi
dica
cate
ted
d ph
physysic
ical
al SQL Server. • Agility: As a company grows, Cloud
Flexible Capacity & Agility: As
computer,
compu ter, or cluste
clusters.
rs. • Savings Plans are a flexible pricing provides resources to aid in expansion and as the business
The customer gets free ”credits” in th thee be
begi
ginn
nnin
ingg to se
sett Reserved Spots
•
model that offer low prices in model allows for flexible usage,
up the
their
ir clo
cloud
ud com
computputing
ing stru
structu
cture
re on clo
cloud
ud pla
platfo
tforms
rms exchange for a commitment to a • Guaranteed 24*7 services and support.
•
Once thes
Once thesee cr
cred
edit
itss ar
aree us
used
ed up an andd th
thee cu
cust
stom
omerer ha
hass consistent amount of usage • For applications that have steady •
Security:: Ensure security with modern cloud security
Security
n ee
ee ds
ds mo
more
re s erv
erveer cap
apac
acii titi es
es , h e c an
an f le
lex ib
ibl y us
usee as
n ee
ee ds
ds mo
more
re s erv
erveer cap
apac
acii titi es
es , h e c an
an f le
lex ib
ibl y use
use as (measured in $/hour) for a 1 or 3 state or predictable usage. standards and diversifying the physical locations in which data
much server capacity as he needs and is billed year term. • Annual & prepaid service is held.
accordingly. • Global Reach & Scalability

Understanding Indian E-Commerce Industry

Industry Product Types Major Players Key Success Factors Cost Factors
•
•
•
Indian E-Commerce
billion by end of 2024market expected to reach US$99 40% 40% Wide & diversified product
portfolio Technology costs
• Software costs
• Online shoppers expected
expected to reach 220 million in 2025 • Multi-channel marketing • Marketing costs
• Sales growth expected - 27% CAGR (2019-2024) 7% 7% 4% • Conversion rate • Management costs
100% FDI allowed in B2B E-Commerce 2%
•
• Efficient supply chain • Logistics costs
• Online penetration of retail is expected to reach 10. 7% management
by 2024, versus 4.7% in 2019 • Low acquisition costs
• Grocery and fashion/apparel category to be key drivers
of incremental growth
Value Chain Key Performance Indicator Latest Developments

Developments
Inbound Receiving, Warehousing & Sales KPI Marketing KPI • E-commerce conglomerate Amazon opened its first Digital
logistics Inventory control of input Kendra - physical resource centres for
for MSMEs to learn about the
• Total sales • Time on site
Average Order Size advantages of e-commerce, in Surat, Gujarat
Inventory handling, warehouse •
• Bounce Rate
Operations Conversion rate • In April 2021, Flipkart announced to acquire Cleartrip, an online
management, packaging of products •
• Page views per visit
• Shopping cart abandonment rate travel technology firm
• Average session duration
Outbound Order handling, Dispatch, Delivery, • New Customer orders v/s • In June 2021, Grofers, the grocery delivery start-up, reportedly
• Traffic source
logistics Invoicing returning orders entered the unicorn club, after raising US$ 120 million from
•
• Revenue per visit •

Mobile
Day partsite traffic
monitoring Zomato, the food delivery platform.
Marketing & Customer mgt, payment methods, • Churn Rate • Average Click through rate Production Clusters Government Initiatives
Sales promotion, sales analysis
Handling, defect, products, returns, Performance based marketing

Service •
queries efforts to boom

Customer Service KPI Project MGT KPI
• Wallets & payment channels
channels
• Customer satisfaction score • Budget to grow manifold
Competitivee Advantage
Competitiv
• Net promoter score • Return on investment • Introduction of new categories
• •
Hit rate Cost performance index apart from fashion &

• First response time
Low fixed costs, innovation based, mass reach electronics
• Use of AI for providing virtual
shopping experiences

Understanding Indian Ed-tech Industry

Industry Product Types Major Players Distribution Growth Factors Strategic Levers
•
Currently $ 1 Billion Offline Coaching

Integrated and Systems
Classroom Tech. Byjus
Unacademy InterviewBit
Vedantu Mobile Apps and Website Technical TalentUser Base
Large Domestic Pricing
Offering
45 million users •
Expected to grow to $3.5 Billion Primary & Secondary Tuition EduComp Toppr B2B • English as a Language Coverage
and 90 million users by 2022. Skill Development UpGrad Edx B2B2C • Fastest Rising Consumer Spend Delivery
Second highest # of EdTech Entrance Exam Prep Testbook Udemy B2C on Education Offline support
startups in the World –
World – 4500
4500 Review Sites Simpl Learn Pesto • 850 M mobile phone users elements
MOOCs White Hat Jr MeritNation • COVID Boost Teacher training
Porter’s Analysis Market Segment & Size Latest Developments

Developments
Supplier’s 499 • COVID has a positive impact on the industry. VC funding in the
Power
High, Good quality teachers are hard to find. 467 segment has grown about ten times — from
from $245m in 2016 to $2.3b
353
196 in 2020.
High, too many options available to choose from 93 • Byju’s acquired Great Learning, Toppr, Epic, Tynker and others.
Buyer’s Power 73 43 55 33 5
and low switching cost. • 95% of higher secondary students take private tuitions. 11% of
Primary & Test Prep Reskilling Higher Ed Language aand
nd household expenditure in India is on private tuitions.
Very High, new industry, seeing
seeing a lot of new • The share of video consumption
consumption to total internet traffic is expected
Competition Secondary Ed Casual
players. Learning
to rise from 58% in 2017 to 77% in 2022.
Size ($ M) Paid Users ('000)
Barrier to Low, No regulations at the moment. Low capital • Indian EdTech startups have raised about $4 billion since 2020.
Entry requirement to setup a ed-tech company.
Division as per Type
Trends Government Initiatives
Moderate, physical coaching have their own B2B B2B2C B2C
Substitute • Personalization of learning and
market and is a big player. Age Group • Programmes such as Skill
Programmes
Infra Platform Content Content. India Mission, SWAYAM
• AI/ML technology is making
making (Study Webs of Active
Important KPIs
Upskilling Simpl Learn upGrad Pesto learning sessions interactive and Learning for Young Aspiring
allow for real-time customized Minds), NDL (National
• Time-on-app • Client Acquisition Cost Higher Ed Moodle Interviewbit edX
•
Engagement level: MAU/DAU •
ARPU •
Q&A.
Automated Doubt Solving –
Solving – Digital Library).
• Digitization of classrooms of
Revenue Growth • CLV Competitive TCS Ion Unacademy Testbook Digitization of classrooms of
Doubtnut and Brainly
Doubtnut government schools
• Activation Range • Students served as a %
K12 Educomp Vedantu Byju • Subscription based models. Online conduction of exams
• Churn Rate of potential customers •

Understanding Indian FMCG Industry

Industry Overview KPIs Major Players & Market Share Sector Composition Market Share by Revenue
th
•
4 Largest
Market Size:Sector
110 bnin USD
India (2020) Ou
Outt of St
Stoc
ockk Ra
Rate
te Toothpaste
Toothpaste – – Colgate(48%),
Pepsodent (16%), Colgate(48%),
Close Up, Patanjali By Product By Region GSK 1
• Del
Delive
ivered
red On-
On-Tim
Timee & In-Full
In-Full Godrej 2
220 bn USD (2025E) 9%
• Average Time To Sell Products –
Chocolate and Milk Products – 19%
Growth rate : 14.9% (2021) Nes
Nestle
tle(14%
(14%),
), Mondel
Mondelezez (65
(65%)
%)
Dabur 2
• Sol
Sold
d Produc
Products
ts Wit
Within
hin Freshn
Freshness
ess Date
Date 50% 36% 55% Britannia 3
Key growth drivers: Growing Sof Drink – Pep
Softt Drink – Pepsi
si (25
(25%),
%), Coc
Cocaa Cola
Cola 31%
• Cash-to-Cash Cycle Time Nestle 3
awareness, easier access and changing • Supply Chain Costs (55%)
lifestyles Detergents, Soaps & Shampoos –
Shampoos –
Marico 5
• Supply Chain Costs vs Sales Colgate 7
India’s Global Consumption %: 5.8 HUL(Dove, Axe, Tresemme), P&G Urban
• Carrying Cost of Inventory Household
Rural HUL 12
(2020E) • On-Shelf Availability (Head & Shoulders, Old Spice, Olay) Healthcare
FDI: 18.59bn USD (2000-2021)
Semi Urban ITC 14
•
Food & Beverages
Margin by Product Category
Marketing/Sales The Indian Advantage Porter 5 Forces Analysis

Digital Analytics, Brand Analysis, Marketing Mix • Substitute
Subs titutes: High,, Narrow Product
s: High Product Differenti
Differentiation
ation
ROI, Pricing Strategy, Trade promotion & Healthcare Brands and Products Rural Demand
k
r • New
Ne w pr
prem
emiu
iumm pr
prod
oduc
uctt cocomp
mpananie
iess • Rur al
al seg m
meent is gr ow
owing at a r ap apid • Power:: Low, Big FMCGdicta
Supplier’s Power FMCGdictate te prices
prices..
o effectiveness, Competitor Intelligence New
New EntrEntran
ant:
t: MoMode
dera te,, Hi
rate High
gh Ca
Capi
pita
tall inve
invest
stme
ment
nt,,
w li
like
ke Too
Too Yum,
Yum, Epig
Epigam
amiaia,, Yoga
Yoga Bar,
Bar, pace and accounted for a revenue •
e Se
Sett
ttin
ingg up dist
distri
rib
butio
ution
n is cost
costly
ly and
and time
time cons
consum
umin ing;
g;
m Manufacturing Raw Presse
Presseryry are brands
brands specif
specifica
ically
lly sh
shar
aree of 45%
45% in the
the over
overal
alll re
reve
venu
nues
es
a
r focussing on health conscious rec
record
orded
ed by FMCGsector
FMCGsector in Ind India.
ia. high advert
advertiseme
isement
nt costs
F
l Production Forecasting, Production Efficiency, co
consum
nsumers
ers and are gai
gainin
ningg trac
tractio
tion
n • FM
FMCG CG prprod
oduc
ucts
ts acco
accoun
untt for
for 50 % of •
Competition:: High, high
Competition highly
ly fragme
fragment
nted
ed with
with mumult ltip
iple
le
a Asset Analytics, Workforce Safety, Production
c
i • Curren
Currently
tly in Tier-1
Tier-1 cit
cities
ies.. Channe
Channell is tot al
al r ur
ural spending. Thus , FMCG MNCss and Ind
MNC Indiangiants
iangiants..
t
y
l
Planning, Quality Assurance, Compliance and generally e-commerce. ind
industr
ustryy depend
depend a lot upo
upon n mon
monsoosoon.n. • Consumer’s Power High, low switc
Power:: High, switching
hing costs
a Analytics
n
A Current Trends
n
i Logistics Modern Trade and Ecommerce Policy Support
a Gro
Growin
wingg sma
smartp
rtphon
honee pen
penetr
etrati
ation,
on, Government’s introduction of
h Location Analytics, Inventory Diagnostics, Resource • •
• Use of technology to create hyper segmentation and
C in
incr
crea
ease
sed
d da
data
ta co
cons
nsum
umptptio
ion,
n, and
and Relaxation of license rules and target groups for advertisements.
e & Route Optimization, Supply Chain Diagnostics,
u
l Fulfillment, Reverse Logistics effo
effort
rtss by la
large
rge co
comp
mpananie
iess to ma
makeke appr
approv
oval
al of 100%
100% FD
FDII in sing
single
le-b
-bra
rand
nd • Increasing % of modern trade and e-commerce.
a
V the
their
ir pro
produc
ducts
ts availa
available
ble on
onlin
linee hav
havee retail stores and 51% in the mu ltlti- •
Exclusive trade deals with e-commerce giants for
Business Management & Support in
incr
crea
ease
se sa
sale
less of th
thro
roug
ughh mo
modedern
rn brands
brands stores
stores are some
some of the inv
invest
esting
ing exclusivity.
exclusivity.
trade and e-commerce
e-commerce.. opp
opport
ortuni
unitie
tiess for glo
global
bal com
compan
panies
ies to • Subscription based revenue model type companies
Workforce analytics, sustainability analytics, finance
establ
establish
ish their
their base
base in Ind
India.
ia. coming up. E.g. Dollar Shave Club
analytics, business process analytics

Understanding Indian IT Industry

Industry Product Types and Services KPIs Major Players & Revenue in Rs’000 Cr NASSCOM’s Digital India for trillion-
trillion-
• IT Software: Software for documentation, (2019) dollar economy
The IT-BPM sector in India banking services, security etc. •
Average Handle Time
stood at US$191 billion in 2020 • Number of Critical • Digital Payments –
Payments – Digital
Digital transactions
• ITeS Business Process Outsourcing –
Outsourcing – Back
Back office expected to increase to 20%(FY 2027)
Estimated size of the industry Bugs
operations which are outsourced elsewhere than from (5% FY 2017)
to be US$ 350 billion by 2025 • Server Downtime
done in house • Digital Skilling –
Skilling – Swayam,
Swayam, IT Platform
YoY 6% growth rate • Estimates accuracy
• IT Hardware & Peripherals –
Peripherals – Tangible
Tangible • Digital Business –
Business – E-Way
E-Way Bill, etc.
Low cost advantage (about 5-6 • IT ROI
components like laptop, desktop etc. • Digital Infrastructure- 4th largest apps
times less expensive than US) • Mean time to Repair
• IT Education –
Education – Training
Training and certification economy
courses
Geographic breakup of IT
IT export revenue in FY19 (%) Value Chain Industry Trends
8% 2% Strategy to 1. Artific
Artificial
ial Int
Intellig
elligence
ence:: 40 Milli
Million+
on+ jjobs
obs by 22023
023
Drive IT Portfolio to business innovation
Portfolio
11% 2. Machi
Machine
ne Learning
Learning : Market
Market expec
expected
ted to grow to $8
$8.81
.81 bill
billion
ion by
Requirement Build what the business needs, when it 2022.
to Display needs it
3. Robo
Robotic
tic Process
Process Automat
Automation:
ion: The ave
average
rage RPA Sala
Salary
ry is within the
the
17% 62% Request to top 10 percent earning over $141,000 annually
Catalog, fulfill & manage services usage
Fulfill
Detect to 4. Edge Com
Computin
puting:
g: By 2022, the
the global eedge
dge com
computing
puting market
market is
Anticipate & resolve production issues expected to reach $6.72 billion
Correct
US UK Europe (ex-UK) Asia RoW 5. Virtual Re
Reality
ality:: Major pla
players
yers like G
Google
oogle,, Samsun
Samsung,
g, Oculu
Oculuss and
Key Growth Drivers plenty of startups expanding
Key Emerging Tech Growth Categories : 6. Cybe
Cybersecuri
rsecurity:
ty: Predic
Predicted
ted that we will ha
have
ve 3.5 millio
million
n unfill
unfilled
ed
• IoT Software, IoT Hardware • Low cost of operation and tax advantages
SaaS+PaaS+IaaS • Supportive government policies, Government established cybersecurity jobs by 2021
•
• IoT Connectivity SEZs 7. Blockc

Blockchain:
hain: Blockcha
Blockchain
in is the second
second fastes
fastestt growin
growingg catego
category
ry in
• Robotic/Drones • Availability of technically
technically skilled manpower terms of employment
•
AR/VR •
Rapid introduction of IT Technologies in major sectors such 8. Intern
Internet
et of Things:
Things: The numb
number
er of IoT Devices
Devices reached
reached 8.4 billion
• AI Platforms/Applications/Big Data Analytics
Analytics as Telecom, BFSI, and more
• Strong Growth in Export Demand in 2017, expected to reach 30 billion devices by 2020 and in need of
• Enterprise Social Software
• Next Gen Security • Adoption of new technologies like cloud computing,
computing, AI/ML 20,000 more IT Workers

Understanding Google as an Industry

Overview Model Type Revenue Stream
Market Cap - $1.5 Trill
Trillion
ion Follows hidden
Follows hidden revenue
revenue business
business
Revenues –
Revenues – $182
$182 Bn (2020) model, where users are kept out Others 11.9% Cloud Hardware
Ads
Net Income
Income - $40 Bn (2020) of the equation so they don’t pay G-Suite Phones
Cloud 7.2%
Google India’s Revenue-$56
Revenue-$56 Bn for the product or service Ad-words Maps Home Assistant
Processes 3.5 Bn search everyday offered. Ads 80.5%
Ad-Sense Docs Chromecast
Pricing Types Google Phones

• # of android users • Real-time mobile-based • Ads are the major • Pixel 4 & 4a
• Cost Per Click – Based
Click – Based
worldwide –
worldwide – 2.8
2.8 payments system. (UPI) source of revenue. • Accessories: Stand,
on interests/clicks.
• Most downloade
downloaded d •
•
Cost per mile/views –
mile/views – billion monthly
active users fintech app globally in 2 types of Ads Cases,
cables Headphones,
& Adaptors
Based on impressions 1. Loca
Locall sea
searc
rch ha ds are featured
ads
• # Apps –
Apps – 3.5
3.5 Million 2018.
• Ad-words - Helps advertisers display • Mobile advertising -main source Market Share in India –
India – 36%
36% businesses which appear as top
•
Chrome Cast
advertisements in the Google content • Google pays Apple billions to be Revenue Potential –
Potential – $2-4
$2-4 billion results when searched on Maps
•
Chromecast is
network. default search engine on iPhone • About 80% of all online search 2. Prom
Promot oted Pins:: Google Maps
ed Pins a stream
streaming
ing media
• Constitutes 80% of the ads revenue. • App Store – A 35% commission of
Store – A volume, & revenue, come from uses a ‘pin’ like symbol to indicate
adapter
adapt er that allows
• Ad-Sense - Helps other website every purchase of App and even in- commerce-related searches. Up till the location of a place. For e.g., users to play online content such as
owners display advertisements on app purchases. now, most of the information McDonald’s in US pays a fee to videos and music on a digital
their own website. • In exchange offers the platform and Google has on its users only helped Google to have its signature ‘M’ television.
• This time allows small businesses
businesses and cloud infrastructure for delivering it map their intent,
intent, not their spends. logo to be embedded in each map.
blogs to generate ads revenue on their notifications. Payments bridges this gap. Nest Hub
• Google Maps API - CustomCustomized
ized
own. • Media side of the Play Store - • Payments unlocks potential in Voice-control multiple
API is geared towards businesses
• In return, Google gets one-third of Paid music, movies, books, and revenue by tapping merchants compatible devices, all
that benefit from having a tailored
the revenue generated.
generated. subscriptions on Google Apps through Maps & advertising. from a single
single dashboard.
dashboard.
version of the Maps in their online
• Constitutes 20% of ads revenue. like Play Music, Play Movies etc. • UPI sees about 30% transactions or mobile applications. E.g. Ola,
Google Analytics: Shows website Android has no licensing
licensing fees & it is being made to merchants. Uber, Pokémon Go etc. Google Home
owners track of visitors to their sites and beneficial because every phone user • For online merchant transactions, Partnerships –
Partnerships – They
They partnered
•
Smart speaker and
how people use them. Costings for web Google Pay is the market leader
search and android search varies but due sign in with their unique account when (60% share). with cab-hailing companies
companies and voice Assistant.
setting up a phone. This helps in added the option of discovering
setting up a phone. This helps in Play your music. Call
to sheer volume of android devices, it is analyzing user data to improve the • It has 33% share in offline merchant available cabs and their pricing your friends. Ask it
extremely profitable. relevancy of the ads . transactions. (1st PhonePe) within the Google Maps App. questions.

Understanding Indian Hospitality & Tourism Industry

Industry Overview KPIs India at a Glance Sector Composition Popular States (T
(Tourist
ourist Visits)
rd Domestic Tourists Foreign Tourists
• •
Number of Foreign Tourist arrivals Foreign TouristArrivals (FTAs)

Foreign India ranked 3 by WTCC in terms Mode of Tourist arrivals Top Source
Source Markets
(FTA) in 2020 : 2.68mn (-75.5 % YoY) • Internation
International
al Tourist Arrivals
Arrivals (ITAs) of Tourism contribution to GDP Sea
21.9
FT
FTA A (
Jan’21-- Apr’21
Jan’21 Apr’21 ) : 376,083 • Foreign
Foreign Excha
Exchangenge Earnings
Earnings (FEEs) • India ranked 34 th by WEF in Travel Land 1%
29.2
21.3
30.8
19% Bangladesh
Market Size: US$ 268bn (2019) • # of Domest
Domestic ic Tou
TouristVisit
ristVisitss & Tourism Competitiveness Others
41% 24%
US$ 512bn (expected in 2029) • # of Tour Operators • India is 3rd in terms of investment in US 5.1
17.6
6.4 23.1
Number of of Jobs : • International Tourism Receipts Tourism & hospitality sector 14%
9.5
Air 10.2 15.1
39 mn (2020) (8% of total jobs) • # of approved Hotel & rooms • International Hotel chains presence 80% 9.8
53 mn (expected
(expected in 2029) • Revenue Per available room in India: 47% share (2020) TN UP
TN Maharashtra
Sri
Hotel chains : 50% of industry • Average daily Hotel Rate • 37 world heritage sites, 10 China Australia Canada
3% 3%
Lanka UK
Karnataka AP
UP Delhi
3% 3% 9%
•
(expected in 2022) Hotel Occupancy Rate biogeographic zones in India M ah

ahar as
ash tr
tr a Oth er
er s R aj as
as th an
an Ot he rs
rs
Value Chain Framework

Framework The Indian Advantage Porter’s 5 Forces Analysis
Advising
Provide Organize
Diversity Demand Drivers High, Large availability of
Substitutes: High,
Tourist on Transport to Transport
Accommodati experience
from Site • Di
Dive
vers
rsee ni
nichchee to
tour
uris
ism
m prprod
oduc
ucts
ts-- attractions & Packages
Product Site • By 2029
2029,, sect
sector
or expe
expect
cted
ed to
on, food, etc. event Supplier’s Power: Low, Large # of service
Contract cruise,, adventure,
cruise adventure, medical,
medical, wellness,
wellness, gr
grow
ow 6.7%
6.7% to re reac
ach
h Rs.3
Rs.35t
5trr providers, Demand-driven industry
sport,
sport, eco
eco,, fil
film
m & rel
religi
igioustouris
oustourism m (9.2%
(9.2% of GD
GDP)P)
Transport Site Operator Transport • Diverse attractions- 37 World New Entrant: High, Less barriers to entry,
•
Travel Agent Company Hotel Cultural Group Company By 2028, International investment needed depends upon location &
He
Heri
rita
tage
ge sisite
tes,
s, 10 bibio-
o-ge
geog
ogra
raph
phic
ic Tourists arrival expected to
zones services .
reach 30.5mn Competition:: High, Large # of Tour
Competition
• Big Coa
Coastlstline
ine dotted
dotted wit
with
h attrac
attractiv
tivee
beaches operators, agents, Hotels, Transporters, etc.
Coordination
Coordination of Services Consumer’s Power: High, Demand driven
Increasing Investments Policy Support
Tour Operator
Operator Current Trends
• In 2018, India was 3rd glob global
ally
ly in • GOI to develop 17 iconic
te
term
rmss of in
inve
vest
stme
ment
nt in this
this sect
sector
or touri
tourist
st site
sitess into
into wo
world
rld clas
classs • Catering to millennials: Eco-Tourism, Sport
with inflow of US$ 45.7bn de
dest
stin
inat
atio
ions
ns as pe perr Bu
Budg
dget
et tourism & Film tourism
• H ote
otell & Tour
Touriism s ec
ec tto
or re
recce ive
ived
d 2019-20 • Tech explosion increasing coordination
cumulative FDI inflow of US$ • Campaigns lik e Swadesh among industry stakeholders.
Local Tourism Board 15 ..228bn between M ar
ar cch
h,20 20
20 & Darshan launch
launched
ed to suppor
supportt • Influx of International visitors & emphasis
April,2020. the indust
industry
ry on heath & well-being

Understanding Indian NBFC Industry

About the Institution Growth Drivers Opportunities to boost revenue
•
• Stress on PSUs
NBFCs
banking are financial institutions that offer banking services without a
license • Latent Credit Demand
• They cannot demand deposits
deposits • Digital Disruption, especially in MSMEs & SMEs
• They do not form a part
part of the payment and settlement system and cannot • Increased Consumption
issue cheques drawn on itself • Distribution reach & sectors where banks don’t lend
• Unlike banks, they don’t have a deposit insurance facility from the Deposit
insurance and Guarantor organization Governance & Risk Mgmt KPI
• Asset Liability Mgmt • RoA vs RoE

RoE
•
Liquidity Coverage Raito •
Price to Book Ratio (P/B)
Key Statistics over the years • Arm’s length transaction • Spread
• Reporting Standards • Opex as % of AuM
AuM
NBFC Public Funds in USD 1B # of NBFC Banks in India • Concentration Risk growth
1851
• Audit & Compliance • Gross NPAs
Registrations
500 407 471 471
278 332 Growing in Prominence Cause of
of NBFC C
Collap
ollapses
ses
Cancellations
• Rapidly gaining prominence as intermediaries in the retail • Asset liability mismatch, resulting from short-term market
224 298 finance space. NBFCs finance more than 80% of
0 2016 2017 2018 2019 2020
125 166 116 10 32 equipment leasing and hire purchase activities in I ndia. •
borrowings
Absence of & long-term
robust loancetenures
governan
governance controls and due-diligenc
due-diligencee
NBFC Public Funds in USD 1B • There were 9,425 NBFCs registered with the RBI as of mechanisms to match aggressive credit build-up
FY18 FY19 FY20 FY21 (so
far) January 22, 2021. • Low corporate governance and risk standards, resulting in s lip-ups
• December 2020 - RBI proposed that NBFCs should have have like intra-group lending
NBFCs-ND-SI 16.7% at least 15% CRAR for the last 3 years. • Lower regulatory supervision compared to the banking sector
13.0%
• July 2021 - Rajya Sabha approved
approved the Factoring
NBFCs-D 9.6% 9.8%
Regulation (Amendment) Bill in 2020, enabling ~9,000
Emerging Tech. in NBFC Governance
4.9% 5.3% 5.1%
2.7% 2.3% NBFCs to participate in the factoring market. • Analytics – Stress testing and Simulations for better understanding
Analytics –
0.2% 1.2% 0.9%
• September 2021 - RBI communicated that the applicable
Mar-19 Mar-20 Mar-19 Mar-20 Mar-19 Mar-20 average base rate to be charged by NBFC-MFIs to their •
of – Rules
AI liquidity
AI – risks Engines for data driven decision making and fraud
Rules Based
ROA ROE NIM borrowers will be 7.95%. SBI announced an agreement management
with three NBFC-MFIs for co-lending
co-lending to joint liability • – Convenient
Mobility –
Mobility Convenient on demand dashboard for risk management
Profitability Ratio of NBFCs groups (JLGs). • – Always-on
Cloud –
Cloud Always-on environment with
with real time data access

Understanding Indian Petrochemical Industry

Industry Value Chain
Upstream Downstream Upstream Middle-stream Downstream
Searching, drilling and Refining, processing and EXPLORATION PRODUCTION TRANSPORTATION REFINING MARKETING
producing oil from wells purifying Oil & Gas • Geophysical • Further development • Storage of oil • Refining of crude oil • Retailing
Crude oil production in FY Refinery Crude Output in FY Evaluation & Design of fields • Transportation of oil through
through into petroleum • Trading
2018-19 34.20 MMT 2018-19 252 MMT • Field Development • Bringing oil to the pipelines, trucks, tankers etc. products
Natural gas production in Light/Middle/Heavy splits: • Drilling Operations surface • Maintenance of tankers, pipes • Product Blending
FY2018-19 13,163 MMSC 30/46/24% etc.
KEY DOMESTIC COMPANIES IMPORTS BY COUNTRY

Growth Drivers REFINERY THROUGHPUT (MMT) REVENUE BY OPERATIONS (US$ BN) OTHERS
14% IRAQ
8 20%
Growing Demand Expansion PSU Pvt /J
/JV 6
. USA
6 7
.
8 1 2%
8 ANGOLA
World’s 3rd lar. energy consumer, To attract US$25 Billion investments
investments in 3%
88 MEXICO
demand to 3X by ‘35 to 1516 MT exploration and production by 2022 91 91 3
89 7
. 5 3%
Diesel demand to 2X (163 MT) by ‘30 Refining capacity to increase to 667 88 88 8
4 7
.
2 KUWAIT
4
Demand for nat. gas to 4X in 10 years MTPA by 2040. 5%
SAUDI
6 4 VENEZUEL
144 154 160 169 1
. 7
.
ARABIA
FDI Policy Support 134 134 2
1 0
1 2
A 19%
5
. 7%
1 UAE
1. 100% FDI in upstream and private 1. Policies such as the OALP and CBM 8%NIGERIA IRAN
sector refining projects policy to encourage investments FY14 FY15 FY16 FY17 FY18 FY19 I OC
OC L R IL
IL B P CL
CL H PC
PC LO
L O NG
NG C GA
GA IL
IL O IL
IL 8% 11%
2. FDI limit for PSU Refining projects 2. Incentives for technologies to CRUDE OIL PRODUCTION (MMT) EXPORTS BY COUNTRY
raised to 49 % without any improve oil field recovery worth Rs. 50 Opportunities Others
ONGC OIL USA 7%
disinvestment lakh Cr. Singapore
1. New fields for exploration, 78% of 7% 22%
Notable Trends sedimentary area yet to be explored

12.08 11.79 11.36 10.53
9.9 2. Expansion in the transmission network Sri Lanka
1. Coal Bed Methane:
Methane: For development of clean & renewable energy, designed to 9.6 11%
3.47 3.4 3.41 3.3 of gas pipelines and Development of City
be liberal and investor friendly, production in 2018-19 stood at 596 mil cubic mt. 3.4
3.3 Gas 3. Distribution (CGD) networks
2. Underground Coal Gasification:
Gasification: For harnessing energy from deep uninable
similar to Delhi and Mumbai’s
coal seams
3. Gas economically
hydrates in an eco-friendly
and biofuels: For mappingmanner, reduces
gas hydrates forexpenses
use as anbyalternate
20-25% 22.25 22.26 22.36 22.22 20.8 19.6 4. Expansion of the country’s petroleum UAE
11%
Nepal
18%
18%
source of energy, Bio-fuels as alternate sources of energy having lower emissions product distribution network
4. Open Acreage Licensing Policy: (OALP) allows an explorer to study data 5. Recoverable shale gas resources of
Bhutan Ethiopia
available and bid for blocks to increase foreign participation, FY14 FY15 FY16 FY17 FY18 FY19 nearly 96 tcf. 12% 12%

Understanding Indian Pharma Industry

Overview Products Key Segments Key Drivers API/Bulk Value Chain C&F Agent
• • • •
Drug
Valuation: Estimated US Bulk drugs
Intermediates API
Manufacturer/Traders Knowledge
Skill &
$42 Bn (2021) • • Manufacturer Distributor
Drug Formulation Infrastructure Chemicals/
• Projected: US $ 65 Bn • •
(API/Formulation Drugs/Medicine
formulation Manufacturer Low production Excipient
(2024) • ) Chemist
• 3rd largest in Volume,14th • OTC drugs • Contractual Research cost
Manufacturing Service Packaging
largest in Value • • Quality
Biotechnological Co. Material Exports
• Exports: $20.70B in FY20 • • Huge Market
Component Cost incurred Value Added Porter 5 Forces Analysis

RORC (Grossexpense
Profit of
ofcurrent year)/(R&D
previous year)
▪ R&D ▪ Innovation
Certain chemicals are
are rare,
Manufacture ▪ Manufacturin
Manufa cturingg Costs ▪ Regulatory Suppliers Moderate
some are generic Profitability ratios Operating Margin & Net Margin
of drug
drugss ▪ Import Duties
Duties ▪ Quality Assurance
▪ Promotion/Education ▪ Education Biotech, Ayurvedic, Liquidity & Debt
Substitute Low Adequate liquidity and manage debt well
Homeopathic coverage ratios
▪ Medicine Acquisition
Medicine Acquisition ▪ Ensuring supply
Ensuring supply
▪ Handling
Handl ing & Delivery ▪ Waste Management R&D costs, regulation,
▪ ▪
Entry Barrier High
Trends
Distribution Obsolescence Cost Order Processing distribution network
▪ Capital Cost ▪ Education
▪ Promotion/Education Competition High Many Small plplayers ▪ Increase in turnover spend on ▪ Tapping new international
international
Brand identity governed by R&D market like Africa
▪ Medicine Acquisition
Medicine Acquisition ▪ Medicine Availability Buyers Low
doctors, low
low price sensitive ▪ New drug discovery focus ▪ Strategic M&A
▪ Labour,
Labou r, facil
facilities
ities ▪ Pharmacist advice
Dispensing ▪ Exports increase in generic ▪ Advanced Analytics
▪ Medicine Wastage ▪ Patient Convenience
Key players drug space ▪ Specialty drug business model
▪ Capital Cost ▪ Additional services
▪ FDI and collaborations ▪ Health spending focus of govt.
Pricing Factors ▪ Sun Pharma ▪ Sanofi ▪ BM Squibb

▪ Dr. Reddy ▪ Merck ▪ Wyeth Future Trends
▪ ▪ ▪
Manufacturer Insurance, Importer Margin Import tariff and Cipla J&J Eli Lilly
Selling Price freight charges Zydus Amgen Schering Plough ▪ Evolving regulatory landscape ▪ Increased patient involvement
▪ Pfizer ▪ Novartis ▪ Abbott ▪ Tech-enabled healthcare
healthcare and in healthcare choices
Taxes Retailer Mgn. Distributor Mgn. Promotion ▪ GSK ▪ Roche ▪ Takeda engagement with doctors ▪ Rise of the role of pharmacy

Understanding Indian Power Industry

Industry Overview KPIs Capacity & Consumption % Capacity (Renewable) Cost Factors
• • •
In
Indi
dian
CAGR
CAG an
R po
powe
of werr se
sect
%ctor
5.69%
5.69 or ng
duri is gr
during grow
owin
ing
g at 8a
FY10-FY1
FY10 -FY18 Guaranteed
Go
Govt
vt.. guar
guaranReturns:
ante
tees
es a ce
cert
rtai
ain
n RoCE
RoCE on India iserthe
producer
produc world's
and third tlargest
third larges
largest Raw Material availability
(Coal/renewable energy) and cost.
• With – ve growth in Covid, it is generation. • Consumer of electricity
electricity - • Transmission Losses (21% in
expe
expect
cted
ed to grgrow
ow at 15%in FY22FY22 Cost: Expenses
Maintenance Cost: 383.
383.37
37 GW India, World –
World – 8%)
8%)
• India’s Powe
Powerr sesect
ctor
or ha
hass ge
gene
nera
rate
ted
d incurred, efficiency indicator, Per • Non Renewable –
Renewable – 75% 75% • Government Regulations
1252.61BU
1252.61BU of ele electr
ctrici
icity
ty in FY21.
FY21. capita power consumption, Total • Renewable –
Renewable – 25%
25% • Demand and cost of unit
• Total installed capacity of power energy consumption, Renewable • Residential Consumption –
Consumption – 25% 25% • Weather Forecasts
stations in India stood at 390 energy consp. %, Power Cuts & • Industrial Consumption –
Consumption – 43% 43% • Transmission Costs
Gig
Gigawa
awatttt (GW)
(GW) as on March,
March, 2021.
2021. Average Duration, Energy Production • Agricultural Consumption –
Consumption – 18% 18% • Capital Costs,
• •
Per Capita
Capita pow
power
er cons.
cons. –
– 1208kWh
1208kWh Distribution, NAV Commercial Consumption –
Consumption – 8%
8% including
including waste dispo
disposal
sal
Power Generation The Indian Advantage Porter 5 Forces Analysis

Supplier’s
70% share of PSUs. • Robust
RobustDemand
Demand Demand Drivers High, COAL India isis the on
only
ly supplier
supplier..
Power
Thermal based generation predominant
predominant (60%).
High gestation period, capital intensive. • 100% electricity produced • Rapidly growing economy, Substitutes High dependence on Coal for energy
is consumed.
consumed. rising exports, improving High Capital investment,
investment, distribution and
Power Transmission Barriers to
• Huge demand expected in near infrastructure and increasing transmission dominated
dominated by PSU, high red-
n
i 200kV and 400kV transmission lines-40%. future. household inco
household incomes.
mes. Entry tapeism.
a 250k+ circuit kilometers in grid. • 100% electrification opens up new • India pledged to increase its share of
h avenues for distribution companies. renewable energy to 40% in Paris
Competition Low, all power generated is used up.
C High commission period (6-7 years), less upgradation
e in technology Climate agreement. Bargaining
u
l Low, limited distributors
a Power, buyers
V Power Distribution Policy Support
Increasing Investments Current Trends
Major bottleneck
bottleneck - loss making PSUs
The industry attracted US$ 15.36 • Encouragement of Pvt. Sector
T&D losses> 20% of power
power generation; 2.5X of •
The per capita consumption has been increasing at an average

billion in FDI (2000-2021) by Govt. 46% ofof distri
distributio
bution
n is
global average of 6% every
every year.
•
now private.
private.
Growing private
private sector participation • Deen Dayal Upadhyaya
Upadhyaya Gram Jyoti Direct Benefit Transfer (DBT) scheme
scheme in the electricity
Power Trading through the Public - Private
through
Yojana (DDUGJY) with the objective sector for better
better targeting of subsidies.
10% of power generated is traded. Partnership (PPP) route; Also
of 100% rural electrification. GoI Roadmap to achieve 175 GW capacity by 2022, 100 GW
Lack of long term power contracts promo tion of FDI .
promotion
of solar power & 60 GW wind.

Understanding Indian Telecom Industry

Industry Product Types Urban and Rural Tele- Market Share in Terms of Subscribers (Sept 2021) KPIs
• 2nd Largest Telecom Market Density
• 1.2 Bn subscriber base –
base – 2.7%
2.7% •
Average Revenue per user (ARPU)
CAGR growth (2016-19) • Subscriber Acquisition Cost
Mobile (wireless) • Churn
• Industry Size –
Size – US$17.4
US$17.4bn with 2nd
bn with Fixed line (wireline)
largest market of internet users • Network Operating Cost
Internet Services • Minutes of usage
• Tele-density of 83.4%
• Wireless segment - 98.3% • Tele-density
• Average Data Usage = 11
GB/person in FY20

Telecom Network equipment, towers, test • Reducing tariffs
equipment Strength Weakness • Economies of Scale
Infrastructure • Expansion to rural markets
• Huge capital investment
Network/Serv Network owners, also provide services to • Robust and huge demand • Cutthroat competition • Mobile banking
• Government policies and
ice Provider end customer • Highest data usage per mobile • Increasing debt and financing cost • Emergence of BWA
regulations
phone • Late adoption of 5G technologies technologies
Content • Specialized equipment are
Provides content to the user to view/use • Good telecom infrastructure • Low switching cost • Investment in optical fibre
Provider needed
• Relaxed FDI norms • Equipment become obsolete network
Low tariffs
Provides software, spectrums, chipsets, •
Strong government support quickly •• Established players • Consolidation in industry
Technology • Growing tele density • Increasing FDI
technology (4G/5G)
Government Initiatives Future Trends
Devices Mobile, handset, router manufactures
Opportunities Threats
Growth Factors • National Digital • Internet of things
• Untapped rural market • Reducing tariffs & narrow margins Communications Policy • Growing number of
• Growing demand • Drastic growth in internet subscribers • Spectrum Auction 2018 mobile application
• Higher income • Growing subscriber base • Zero interconnection charges • Phased Manufacturing • Cashless transaction
•
Increasing minute of usage & data usage •
Increasing mobile banking and Programme (PMP) • Internet of things
• Reducing license fee cashless transaction
• 100% FDI • Increase in data
• Relaxed FDI norms • Growth in MVAS & cloud
• Digital India Program usage/mobile
• Increasing rural penetration computing

Understanding
Understanding Indian Tyre Industry
Key Industry Statistics Market Segmentation Cost Drivers
•
th Raw Material Costs (by Value)
4 largest in the world after China, Europe and USA (in no. Industry Segmentation
Product by End Industry Segmentation by Type •
Highly Capital Intensive
of units produced annually) 10% • Raw Materials cost 60-65% of 10% Natural Rubber
• No. produced in FY2020 –
FY2020 – 177
177 Million Units 13% revenues
• ~3% Manufacturing GDP of India & ~0.5% of total GDP 22%
• SG&A –
SG&A – 6-12%
6-12% 35% Synthetic
• Export Volume is also on the rise. 53% 22% 55% 25% Rubber
25%
• Employee Costs –
Costs – 7-14%
7-14%
• CAGR –
CAGR – 7-9%
7-9% (2022-25) • Negative correlation with Crude Other Crude
Market Size ~$8.5 Billion (2019-20) 15%
•
Oil prices as raw material like Derivatives
Truck and Bus PCR + LCV
Replacement OEM Export 2/3 Wheeler Other carbon black are derivatives. Others
Tyre Production Trends

Trends (in Mns) Key Growth Drivers Original Equipment(OE) vs Replacement Demand
Comparison (2019-20)
FY20 177 • Increasing radialization
radialization of tyres, especially in buses and trucks:
FY19 192 • Most technologically
technologically superior design
80%
FY18 • Provide better mileage and improved driving
178
• Now being introduces in buses, trucks and Light Consumer
FY17 167 66%
Vehicles
FY16 152
• Therefore, increasing demand for new tyres and bo
boosting
osting growth 59%
FY15 146 • Growing consumer base 54%
• No. of consumers increasing 46%
Factors impacting value chain • As no. of produced automobiles
automobiles is increasing 41%
34%
Suppliers Δ veh. platforms, Δ tech., discontinuation
Recent Developments & Future Outlook
Trade After sales, Sales, service discontinue
discontinue 20%
• Vehicle production levels are currently at multiyear lows declining by
Vehicle
Legislation New standards, autonomous driving over 13% during 11m FY2020 and this has sharply affected the
orig
original
inal equip
equipment
ment (OE)
(OE) tyre deman
demand d
Fin. service Funding req. for transportation •
BS-vii enforcemen
BS-v enforcementt – Com
– Compli
pliant
ant ve
vehic
hicles
les wil
willl be mor
moree expens
expensiv
ive,
e, may
may
Manufacturer Collaboration, Chang. Drive systems ke
keep
ep bu
buye
yers
rs away
away for
for some
some time
time M&HCV LCV PV Motorcycle
• According to ICRA, the India tyre demand is estimated to grow by
Insurance New Tariff structures, Autonomous cars 13-
13-15%
15% in Y21
Y21-22
-22 OE Replacement

Understanding Indian Cement Industry

Industry Overview KPIs Sector Composition Market share Major Constraints
•
•
R eve0.
FY2
FY20. nuCurren
e: rently
Cur UStly
D 2rd9.0larges
5 Bitllcement
largest ion nt
ceme in •
Capac
Capacity
Cement
Ceme ityFactor
nt Utili
Utilization
Factozation
r By Cement
13.00%
Demand Market share of major players (2019) •
Coal
Fleet price variation
utilization and route selection
India… 3.00%
producer • Clinker
Clinker Factor
Factor • Efficiency of manufacturing plant
Birla 3%
Curren
Currentt produc
productio
tion
n capaci
capacity
ty of 545 10% Cash discounts and debtors
• EBITDA/ton Dalmia… 5.50% •
55%
mi
mill
llio
ion
n to
tonn
nnes
es,, ac
acco
coun
unts
ts fo
forr 8% • Carryi
Carrying
ng cos
costt of inv
invent
entory
ory 22% ACC 6% performance
globall capacity
globa capacity • Sup
Supply
ply cha
chain
in cos
costs
ts vs Sales
Sales Ambuja 6.20% • High cost of transportation and
Demand expected to grow at • Cash-to-Cas
Cash- to-Cashh cycl
cyclee time Housing and Real estate Shree 7% impact of fuel costs
Infrastructure UltraTech 21.40%
5.68
5.68%% CAGR
CAGR till
till FY22
FY22.. Expo
Export rt of • Inventory
Inven tory turnov
turnoverer • Volatility due to geographical and
Industrial development
cement
cement inc
increa
reased
sed by 1.6
1.68%
8% CAGR
CAGR • Average production downtime Low-cost housing regulatory constraints
Value
Value Chain The Indian Advantage Revenue and Cost Drivers
Long-term leasing contracts of Robust Demand Opportunities • Freight cost accounts for approximately 38% of the total
Raw Materials lime
limest
ston
onee qu
quar
arri
ries
es,, pa
part
rtne
ners
rshi
hip
p wi
with
th of cement company’s operating expenses.
coal,
coal, gypsum suppliers
suppliers • High demand to be driven by • Growth opportunities available in
• Power and fuel account for 25% of the cost and raw
government’s focus on areas such as housing, dedicated
materials account for 19% of the costs for a
Mos
Mostly
tly railwa
railways
ys and road
road based
based log
logisti
istics,
cs, infrastructure and housing for all freight corridors, ports and other
manufacturing unit. Maintenance cost for the machinery
Inbound log has
has smal
smalle
lerr valu
valuee si
sinc
ncee the
the pr
prod
oduc
ucti
tion
on by 2022. infrastructure projects.
is about 5% and the rest is accounted by packing related
• •
un
unit
it is cl
clos
osee to the
the qua
quarr
rry.
y. Demand expected to grow at Construction of 100 smart cities will expenses.
5.68% CAGR between FY16 and further increase the demand.
• Revenue stream is dominated by sales ( 98% of the total
Produc
Productio
tion
n of Lim
Limest
estone
one  Clinker  FY22.
revenue) and the rest 2% is associated with interest
Operations Cement. Operations are highly income.
automated and leads to waste Increasing Investments Long-term Potential
generation
generation too. Recent Trends
• FDI
FDI in
infl
flow
ow in in indu
dustr
stryy re
rela
late
ted
d to • Oligopoly market
Oligopoly
Mix of rail and road, presence of manufact ur
ur iin
ng of cement and • Long-term cement growth is In
nd dia expected to be t he he lar ggeest exporter of clinker and
gyps
gypsum
um pr prod
oduc ucts
ts re
reac
ache
hedd USD
USD estimated at 1.2 times of GDP c eeme
menn t to Mi
Midd
ddll e-e
e-eas
ast,
t, Af
Afri
ricc a an
andd As
Asii an
an coun
untr
trii es
es i n the
the
Outbound log warehouses and direct deliveries to
big
bigger
ger clien
clients.
ts. Majo
Majorr com
compon
ponent
ent of cost.
cost. $5
$5.2
.288 bi
bill
llio
ion
n betw
betwee
een
n Ap
April
ril 2000
2000 growth rate. upcoming 10 years. Zero carbon cement to be the way
and March
March 2020 2020.. • Decarboniz
Decar bonization
ation and zero emissi
emissions
ons forwar
forward
d in accord
accordancancee with
with reg
regula
ulator
toryy mea
measure
sures.
s. Easter
Eastern n Ind
India
ia
• Ma
Majj o
orr p llaay eers
rs i n
nve
vest
stii n
ngg i n ne w to be pr
prac
acti
tice
cedd by 2050.
2050. to be the
the ep ic
ic een
n tre
tre of mamajj or
or c on
on str
struc
ucti
tio
on acacti
tivi
viti
tiees an
andd
Di
Dist
stri
ribu
buto
tor-
r-de
deal
aler
er ne
netw
twor
orkk for
for po
post
st
Service manufacturi
manuf acturing ng units across India. dem
demand
and expect
expected
ed to rise
rise the
there.
re.
sal
sales
es followup
followup

Understanding Indian EV Industry

Industry Product Types Major Players KPI Electric Vehicle
Vehicle Sales as % of Total
Total Sales
5thLargest Automobile market
2.36 lakh E-vehicles sold in 2 Wheeler –
Wheeler – 90%(units)
90%(units) Tata Motors –
Motors – Nexon
Nexon EV, Tigor, Electric Bus Average Prodn..
Inventory Downtime.
Turnover, s 30000
d s
200 d
Three Wheeler –
Wheeler – 7%7% n 150 n
Mahindra –
Mahindra – E20,
E20, eVerito, eKUV100 a
s 20000 a
s
2020-21. Utilization Rate u u
Passenger Vehicle –
Vehicle – 2%
2% Hyundai –
Hyundai – Kona
Kona Electric SUV o 100 o
90% of the sold vehicles are 2 h h
Commercial ~ 1% Hero Electric –
Electric – Photon,
Photon, Flash la, Nyx T10000 T
wheelers, aim is to increase the
the Indian Startups 50
Automotive Parts Kia Motors –
Motors – KIA
KIA e-soul, Niro EV 0 0
demand to 10 lakhs
Batteries and Charging Ashok Leyland –
Leyland – iBus,
iBus, HYBUS, Euro 6 Truck Okinawa Revolt 2017-18 2018-19 2019-20 2020-21 2021-22
Rs. 50,000 crore billion
infrastructure MG Hector Ola Electric BattRE
opportunity by 2025. All vehicles Electric vehicles
vehicles
Revolt Tork motors Ather Energy

Inbound log Raw materials, warehousing handling Strengths Weakness • Charging infrastructure • Nascent market stage
Eco-friendly • Cost compared to • Active balancing of
Operations Machining, Assembling, Testing prod •
• Costlier vehicles
• Low cost of ownership traditional substitutes batteries
• Time taken for recharging
Outbound log Warehousing and distribution • Cheaper to run • Import of batteries from • Grid easy fast charging
• Lack of charging infrastructure
• Less Noise China • R&D for alternatives to Li-
Marketing & • Lack of electric power
Advertising, pricing and promotion • R&D being done by Indian startups • Heavy R&D cost ion batteries
Sales • Li-ion is costly and imported
• Govt. incentives in manufacturing • Electricity Prices • E-rickshaws found to be
Service Installation and repair parts • Upcoming bases for R&D •
from China and low inv. in R&D
Inadequate • Rigid consumer behaviour most receptive in the
• Growth IT Capability in design, • High cost of Li-ion battery Indian market
• Adoption shown only
only in 2-
Government Initiatives development and simulation wheeler and 3-wheeler Li-ion Production Clusters Future Trends
• Market proximity
• National Electric Mobility Mission Plan, 2015 aimed to
• India expected to be the
increase the sales of electric vehicles by 2020 through Opportunities Threats 4th largest market for EV
an initial investment of Rs 20000 Crores.
• Increase in income level vehicles in 20 years.
• FAME-1, 2015 set aside Rs 15000 Crores for • Competition from electric hybrids,
• Lower taxes • 9%-16% penetration
technological development, demand creation, pilot hydrogen-powered cars and
• Government subsidies expected in 2-wheeler
projects and Charging infrastructure alternative fuel
projects and Charging infrastructure • Increasing petrol and diesel prices alternative fuel market for EV
• FAME-2, 2019 allocated Rs 10000 Crores for 3 years • Electricity Cost
• Rising concern for pollution caused • Cheaper and indigenous
with 86% of it focused towards
towards demand creation and • Availability of Li-ion batteries
batteries
• FAME Act by GOI vehicles to be available by
by
infrastructural development
2025.

Understanding Indian Healthcare Industry

Industry Overview Services Government Initiatives Market share Major Constraints
• •
• Heal
Health
thca
care
re se
sect
ctor
or exexpe
pect
cted
ed to P riener
(Gen
(G maeral
ryal orCaSpeci
reecial
Sp , alit
Sity)
ey)
conan
dadryTerti
and Cary
ary
Tertiare R s AY
PMJ
PMJAY 690schemeby
00 emeby
sch CroreGOI.
GOI in.vested in Market share of major players (2021) High
settingcapital expenditure
up medical needed for
services.
reac
reach
h USD372 bil billio
lion
n by 2022
2022 (No. of beds in organized sector)
Care(Single or Multi-Special
Multi-Speciality)
ity) • Rs 90
904646 cr
cror
oree inve
invest
sted
ed in Natio
Nationa
nall • Lack of infrastructure and
• Government’s expen
expendiditur
turee on Nutriti
Nutr ition
on Missio
Mission n for3 yea
years.
rs. awareness in rural areas
Healthc
Heal thcareis
areis 1.6
1.6%% of GDP.
GDP. KPIs • Rs 1299 crore invested in new Aster DM 13%
• Insufficient manpower owing to the
• In Union Budget 2021, the AIIMS set up at Rewari, Haryana Naryana… 22.20% rising population of the country.
government
gover nment alloca
allocated
ted Rs. 35,0
35,000
00 Average Revenue per Occupied Bed,
Average length of stay, Bed • GOI partnered with Serum Fortis… 16% • High attrition rate for government
crore (US$ 4.80 billion) for Institut e f oorr de ve
ve lo
lopment and Apollo… 30.10% doctors and regulatory concerns.
COVID-19
COVID -19 vaccines
vaccines in 2021-22.
2021-22. Oc
Occu
cupa
panc
ncyy Rate,
Rate, St
Staf
afff av
avai
ailab
lable
le per
patient,Recovery rate manufacturingof
manufac turingof COVIDvaccine.
Value
Value Chain The Indian Advantage Cost Drivers
Person withillness approachesthe

Person approachesthe doctor Robust Demand Increasing Manpower • Salar
Salarie
iess of doct
doctorsand
orsand ho hosp
spit
ital
al staff
staff acco
accountfor
untfor 30%
30% of ththee
Consulting or hospital as per their awar een
n es
ess or total
total cos
costt forhospitals
forhospitals..
accessibility. • Heaealt
lth
h ca
care ma
mark
rket
et ex
exp
pec
ecte
ted
d to • 16085 hospitals enrolled in
• Raw materi
materials
als in terms
terms of bed
beds, s, equipme
equipment,
nt, infr
infrast
astruc
ructur
turee
reach US D 372 billion by 2022 Ayushman Bharat Scheme for
cov
cover
er theremaining30%
theremaining30% of thecosts.
thecosts.
Pathol og
ogical te sstts, gene titic histor yy,, owin g to increased awar en en es
ess, treatment.
• Po
Powe
werr anandd back
backup
up acco
accoununts
ts for
for the
the rema
remain
inin
ingg 30
30%% of th
thee
Diagnostics me
medic
dical
al scre
screeni
ening
ng,, cont
contac
actt hi
hist
stor
oryy an
and
d life
lifest
styl
ylee ch
chan
ange
gess an
and
d inincr
crea
easi
sing
ng • Numberr of medica
Numbe medicall colleg
colleges
es increa
increased
sed
costs.
past recordsare asses
assessed.
sed. access to insura
access insurance.
nce. to558 inJuly202
inJuly2021. 1. • Ress ea
Re earc
rchh and De Devv elo
elop
pme
ment
nt i n ne new
w av enu
enues
es li
like
ke Tele-
ele-
• Sect
Sector
or ex
expe
pect
cted
ed to ge
gene
nerat
ratee 2.
2.7M
7M • Ind
ndiia h ad
ad 1.
1.227 mi
mill
llii on
on re
regg isis ter
tered
ed
OP
OPD,D, Gene
Generarall Wa
Ward
rd,, IC
ICU,
U, Emerg
Emergenc
ency
y med
medic icin
ine,
e, AI appli
applica
catio
tions
ns an
and d med
medicical
al to
tour
uris
ism
m cocove
verr th
thee
newjobsbetween
newjobsbetwe en 201
20177 and2022 allopath
allopathic
ic doct
doctorsin
orsin Jul
Julyy 202
2021.
1.
Se
Secti
ction
on ba
base
sed
d onlevel
onlevel of care
care ne
neede
ededd an
and
d remaining
remaini ng costs
Admission
typ
typee of dis
diseas
ease,Availa
e,Availabil
bilityof
ityof beds.
beds. Increasing Investments Policy Support
Revenue Streams
Quality of doctors and procedure. • Govern
Gove rnme
ment
nt pl
plan
anss to in
incr
crea
ease
se th
thee • World’s lalarg
rges
estt go
gove
vernrnme
ment
nt fu
funde
nded
d
Equipmen t neede d, d, medicines an d spen
spendi
ding
ng on he
heal
alth
thca
care
re to 3% of health
healthcar
caree sch
scheme
eme,, Ayu
Ayushmshman
an Bha
Bharat
rat • Health
Healthcar
caree servic
services
es cov
cover
er 45%of therevenu
therevenuee str
stream.
eam.
Treatment re
regg u
ula
larr ch
chec
eckk o n vi ttaa llss , i n
nfo
forrma
mati
tioon GDPby 202
2022.
2. was laun
launchedin
chedin Sept
Sept.. 2018. • Dia
Diagno
gnosticserv
sticservice
icess accoun
accountt for30% of therevenu
therevenues.
es.
• •
•
sharing, 24 7 assis
sharing, assistance.
tance. In
Indi
dian
was
wa s an
valu
va medi
me
ed dica
lued atcal
l $to
US$
US tour
uris
ism
2.89
2.89 mbi mark
ma
bill
llionrket
ion et
in Na
Nati
tioo na
ncare
a l Co
Healthcare
Health Comm
mmisions
i ss
ss io
Professions
Profes io nBillfo
for
r Al
Alli
lied
2021-aimsed,, Dr
Drug
ug sales
sales and
and me
medic
dicine
iness pr
provi
ovide
de the re
remai
maini
ning
ng 25% of the
revenuefor health
healthcare
care industr
industry.y.
Post- P aayy m
men
entt proproces
cess iing
ng,, comm
commii ssss iioons
ns,, 2020
2020 an
and
d is exp
expec
ecte
ted
d to re
reac
achh US$ to cr
creaeate
te a b ody
ody to re regg ula
ulate
te s erv
erviice • New revenu
revenuee str
stream
eamss develo
developin
pingg in Medical
Medical tou
touris
rism,
m, dru
drug
g
Treatment insu
insura ranc
ncee cl
clai
aims
ms,, re regu
gula
larr foll
follow
ow-u -ups ps,, 13.42
13.42 bil
billio
lion
n by 202
20266 standards
standar ds for health
healthcareprofessiona
careprofessionals. ls. development
develop ment and diagnosticservices.
diagnosticservices.
redressal
redress al of queries.
queries.

Understanding Indian Defence Manufacturing Industry

Key Industry Statistics Market Segmentation Products and Services Key Players
• •
•
Defence production target at US$ 25.00 billion by 2025 Defence Production Hindustan Aeronautics Limited (HAL)
Sector in India by
Armored and Defence
Defence Logistics Bharat Electronics (BEL)
• 100% FDI allowed, 74% und er automatic route and beyond Vehicles •
74% through government route 21% • Arms and Ammunitions • Bharat Earth Movers Limited (BEML)
• CAGR of 3.9% between 2016 and 2020 • Electronics and Communication • Bharat Dynamics Ltd. (BDL)
• Top importers of defence equipment
equipment Systems
• Government approved US$ 130.00 billion on military • Shipbuilding
79%
modernisation and US$ 67.00 million budgetary ssupport
upport for
R&D Stat
Statee Own
Owned
ed Priv
Privat
atee Sec
Secto
torr
Value Chain Opportunities and The Indian Advantage Key Growth Drivers
Conceptual Design, Design of Make in Ind

India
ia Government Policy • Ongoing territorial disputes with Pakistan and China.
R&D subassemblies, Detailed design, Testing, • External dependence for defence procurement
Validation • Em
Emphphaas isis o n ‘Make in India’ • 74%FDI in defe
defencemanufa
ncemanufactu
cturin
ring
g • Favourable FDI climate
init
initiat
iativein
ivein theDefence
theDefence sector
sector • ‘Import embargo’ on 101
101 mil
milit
itar
ary
y • ‘Import embargo’ on 101 military items.
Software, Electronic Component,
Component • Foreign players to invest and items • High budgetary allocation to the defence sector.
Mechanical component, Composite
Manufacturing capitalise
capita lise on the opport
opportunity
unity • Defe
Defenc
ncee Pr
Prod
oduc
ucti
tion
on and
and Ex
Expo
portrt • Expanding production and distribution facilities in India.
components, wiring
• Self-reliance in defence Promotion
Promoti on Policy2020 • Increased R&D activities
Assembly & manufacturing under the • DRDO Procur
Procurement
ement Manual’ 20
Assembling structural and system
Aatmanirbhar Bharat Scheme
Integration components together
Defence Production
Self-reliance Target Start-up India
Marketing & Export, Cross-sector opportunity, Technical Indian Defence Production (US$ Billion)
Sales publications • The Def en
en ce
ce Min isistr y has set a • Indi
Indian
an governm
government
ent pus
push
h for start-
start- 15 12.2
target of 70% self-reliance in upsin Ind
India
ia 11 11.5
weaponry
weapo nry by 2027 • Collaborations to develop 10
Post Sales
Maintenance, Repair and Customer Service • Indian military’s technological innovative solutions
•
Service mo
mode
dern
rnis
isat
atio
ion
n via
via publ
public
ic pr
privivat
atee Pot
Potenti
ential
al growth
growth opportu
opportunity
nity for 5 2.2
part
partne
ners
rsh
h ip
ip w ith
ith th
thee I ndi
ndiaan I T the defe
defence
nce product
production
ion in terms
terms of
Storage, Decommissioning & Disassembly, companies
compa nies such as Tech Mahi
Mahindra,
ndra, operational capabilities 0
End of Life
Recycling, Disposal. TCS 2016-1
2016-17
7 2017-1
2017-18
8 2018-
2018-19
19 2019-2
2019-20
0

Understanding Indian Food Delivery Industry

Industry Overview Cost Drivers Revenue Streams Major Players Key Performance Indicators
• • •
• •
In
Indu
dust
stry
ry size
size-- US
US$$ 4.35
4.35 Bil
Billi
lion
on in Vehi
Ve
costhicl
cle/
e/de
deliv
liver
eryy tra
trans
nspo
port
rtat
atio
ionn •
Listing Services
Third party advertisements on the Zomato, Swiggy , Domino’s Pizza, •
Average
Average number of deliveries
Order delivery time
2020 Faasos, KFC, Pizza Hut among
• CAGR
CAGR of 30 30.1.1%
% expec
expected
ted durin
during
g • Ca rrdb
dbooa rrd
d b ooxe
xess , ba gs
gs et
etc.
c. fo
forr food delivery application major players. • Total Amount per order
2021-2026 packaging • Delivery Fee charged from customers • Swiggyy and Zomato
Swigg Zomato are • %of driver idle time
• Exp
Expec
ected
ted to rereac
ach
h US$ 13 Bil
Billi
lion
on • Gas, mileage an d cost of hiring • Paid subscriptions and loyalty dominating the food delivery • No. of support tickets raised by
by 2025
2025 driver/delivery
driver/deliv ery person programs for additional services market with almost 90% of the restaurants and delivery agents
• Industry Size: less than 1% of • R&D for deli deliver
veryy pla
platfor
tform
m design
design • Commissions charged from partners market share. In January 2021, they • Churn Ratio
& maintenance
maintenance per order recorded orders in volume of 1.8-2 • Customer Lifetime Value
Grosss DomesticProduct
Gros DomesticProduct
million per day • Ratings given by customers
Value
Value Chain Porter’s 5 Forces Analysis Growth Drivers
Research & Planning & forecasting, Design, Establish Low

Low - Sta
Sta n nda
dard
rdiiz aati
tioon i s th
thee key
key o bj
bj eect
ctii ve
ve wh iile
le enro
enroll
lliing • Growingg working
Growin working population
population & inflating
inflating incomelevels
online presence, Menu & promotion Suppliers Int rrooduction of con ttaactl es
ess del iivver y services due t o
Development s upp
uppli
lier
erss , Ma in
in res
res oour
urce
ce i .e.
.e. te
tech
chno
nolo
loggy th thaat is no
nott alw
lwaa ys
ys •
Pow. COVID-19
COVID -19 and new safetystandards-better quality
developed
develop ed interna
internally
lly
Logistics & Suppliers value chain, Raw materials for • Vendorstarge
Vend orstargetin
tingg sma
smallerciti
llercities
es incl
includin
udingg Tier
Tier 3 and4
Supply Chain preparing meals High-Customersrequest lowerprices and higher
higher quality • Ris
Risingtrendof
ingtrendof rea
ready-t
dy-to-e
o-eat
at (RT
(RTE)E) andquickhome deli delivery
very
Bargaining Verylittle room for differentiation
differentiation • Increasing
Increas ing accessto high-speedinternet
high-speedinternet facilities
facilities
Ordering & Ordering Platform, Delivery arrangements, Power, buyers Absence of switching costs for customers
Delivery Payment, CRM management Market Segmentation
High
High-- Tier3,
Tier3, 4 & 5 citi
citiesareyet
esareyet tobe tapp
tapped
ed
Additional Services to improve performance, Threat from
Other Services Opportu
Opportunity
nity for inorga
inorganic
nic gro
growth
wth throug
through h private
private brands
brands from
from Single-brand Cloud Delivery Aggregators
Complaints & Queries, new entrants
& feedback the
their
ir owncloudkitchens,partne
owncloudkitchens,partnerin ringg wit
with
h food
food joi
joints
nts Kitchens (Full Stack)
Customer ratings
Key offering- Quality food in Key offering-
offering- On time
Latest in the industry High- The main substit u utte are del iivver iiees perf or
ormed by particular cuisine delivery of food
Substitutes rest
restau
aura
rants
nts direc
directly
tly whic
which
h is slowl
slowlyy fadi
fading
ng due to th thee ong
ongoi
oing
ng Market size-Limited for any Market size-Large as a lot of
• Zomato has taken the company public with the first round
of the IPO pandemicand
pandemicand late
latest
st tren
trends
ds in theindustry Grosssingle brand to
Margins-High brands
Gross Margins- Moderate
• Amazon started
started food delivery ser
service
vice – Amazon Foods High
High-- Beca
Becaus
usee of th
thee high
high barg
bargai
aini
ning
ng po
powe
werr of bu
buye
yers
rs and
and lo
low
w moderate to low
• Swiggyy has introduced
Swigg introduced the Swigg
Swiggyy genie and SwiggyCOVID Competition productt differe
produc differentiati
ntiation,
on, the rivalr
rivalryy betwee
between
n existing
existing competitors
competitors Orderfrequency- Moderate
Moderate Order frequency-
frequency- Very high
care package along with grocery delivery services is high
high to low
Part F – Practice Guesstimates


Practice Guesstimates: Table of Contents

S.No. Item Page # S.No. Item Page #
1. Gurgaon Delhi Toll plaza 68 16. Market Size of
of EV in India 86
2. Revenues for TOI 69 17. DTC buses in Delhi 87
3. Smart watches in India 70 18. Revenue of Flat screen TVs 88
4. T
Toothbrushes
oothbrushes in India 71 19. Daily Amazon Orders 89
5. E-Rickshaw Earnings 72 20. Daily Revenue

Revenue of an Airport 90
6. Number of Smoke
Smokers
rs 73 21. Daily Revenue
Revenue of 24*7 chain 91
7. Number of Cheese Burst Pizzas 74 22. Automobile Tire Market Size 92
8. Petrol Pumps in India 75-77 23. Wine Consumption in India 93
9. TT balls in Delhi 78-79 24. Users of Bisleri Water Bottles in Delhi 94-95
10. White Shirts in Delhi 80 25. Sanitizer Demand in Delhi 96
12. Schools in Delhi 81 26. BCom Admissions in Delhi University 97
13. Daily Departing Flights 82 27. Credit Cards Issued 98
14. People you have met 83
15. Tractors in India 84-85

Toll Plaza
revenues of Delhi-Gurgaon toll plaza
Estimate daily revenues
Assumptions Methodology
• Toll plaza operates
operates 24x7 • Daily revenue = (Daily revenue per toll booth) x (# toll booths)
• 2/3 wheelers do not have to pay toll fare • For one toll booth, the # vehicles crossing it will vary with time of the day (peak / non-peak hours)
• Toll fare is the only revenue source • Average
Average time for a car to pass tthe
he booth = 15 secs; Hence, 4 cars can cross the booth in a minute
minute
• Traffic across booths is uniform • Therefore, capacity = max. vehicles that can cross a booth in an hour
hour = 240 vehicles / hour
Traffic Distribution Revenue per toll booth We are treating the ttoll
oll booth as a bottleneck
bottleneck
to estimate traffic throughout the day
1
y
t
i # vehicle per booth Fare per vehicle
c0.5
a Noon
p
a
C
Midnight
0
Time
High traffic hours Medium traffic hours Low traffic hours 4 wheelers > 4 wheelers (trucks)
‘High traffic hours’ include

8 hours /day 8 hours /day 8 hours /day 70% of daily traffic 30% of daily traffic
morning and evening office Full capacity 60 % capacity 30 % capacity Fare –
Fare – INR
INR 30 Fare –
Fare – INR
INR 70
peak hours. ‘Medium traffic
hours’ include afternoon Total
Total # vehicles per booth = (8)x(240)x(1+0.6+0.3) ~ 3600 W
Weighted
eighted Fare = (0.7)x(30) + (0.3)x(70) = INR 42
and late night hours. ‘Low
traffic hours’ include hours
from ~11 PM to 7 AM.
Daily revenue = (3600)x(42)x(20) ~ INR 30 lacs

TOI Revenues
Estimate daily revenues
revenues of Times of India
• Households order 1 copy of ToI each • Revenue Streams = Revenue from newspaper circulation + Advertising Revenue
• No online subscription model for ToI • Newspapers can be bought by individuals/households or organizations (libraries, offices, schools)
• Print ads are priced only on area basis • Advertising Revenue Streams = Printed Ads on the paper + Ads on website/mobile
website/mobile apps
• Digital ads are priced on CTR basis • Digital revenue is calculated based on the number of online users who click the advertisement
Daily Revenue We have assumed that the online ad revenue

revenue
model is based on #clicks. It can also be based
on #impressions or #conversions.
Subscriptions Advertisements
Newspaper penetration
can be assumed based on
literacy rate and income #Buyers Price Print Digital Print Revenue
levels (#Pages)*(Area per page)*(% area for
ads) *(Price per unit area)
= 25*(60*40)*25%*5000
Households Organizations Ad Area Price per unit Area = Rs. 75 million
Digital Revenue
#Household Buyers = (#Households)*(English Newspaper penetration)*(
ToI’s
ToI’s Mkt. Share) (#Users)*(Number
(#Users)*(N umber of ads)*(Click Through Rate)*(Cost per click) =
25 mil *10*0.5%*10= Rs. 12.5 million
#Households
#Organizational Buyers
Buyers = 300
= 50% mil * (50%*20%)*25%
of Household = million
buyers = 3.75 7.5 million
#Revenue = 7.5 + 3.75 = 11.25 * 5 = Rs. 56.25 million Total
Total Revenue = 56.25 + 75 + 12.5 = Rs. 144 million

Smart Watches
Estimate the market size of Smart Watches in India
• Average price of Smart Watch is Rs.
Average Rs. 10k • Population of India = 130 Cr; Urban = 30%; Rural = 70%
(considering watches range from 3k-30k) • Age Group classification: 0-25 = 50%; 25-50= 30%; 50+= 20%
• Penetration in rural area will be much lower • Income Spread: BPL = 20%; Low Income= 40%; Middle Income= 30%; High Income= 10%
than in urban area • In Urban India 1% of 0-25 will own one, 10% of 25-50 will own one and roughly 0.5% of 50+ will own one in the middle-
• Market exists only in middle & high income income population while in the higher income population, the penetration would be roughly double.
double. In Rural India, 0.5% will
groups own one in age group 0-25, 1% will own one in 25-50 and 0.1% will own one in 50+
•
Income Spread is uniform in Rural & Urban
Market Size of Smart Wat
Watches
ches
Rural 0.70*130cr = 91cr Urban 0.30*130cr = 39cr
Middle
Income Spread Middle Income 0.30*91cr = 27.3cr High Income 0.10*91cr = 9.1cr Income 0.30*39cr = 11.7cr High Income 0.10*39cr = 3.9cr
Age Spread 0-25 25-50 50+ 0-25 25-50 50+ 0-25 25-50 50+ 0-25 25-50 50+
0.50*27.3cr = 0.30*27.3cr 0.20*27.3cr 0.50*9.1cr 0.30*9.1cr 0.20*9.1cr 0.50*11.7cr 0.30*11.7c 0.20*11.7c 0.50*3.9cr 0.30*3.9cr 0.20*3.9cr
13.65cr = 8.19cr = 5.46cr = 4.55cr = 2.73cr = 1.82cr = 5.85cr r = 3.51cr r = 2.34cr = 2.95cr = 1.17cr = 0.78cr
0.005*13.65cr 0.01*8.19cr 0.001*5.46c 0.005*4.55cr 0.01*2.73cr 0.001*1.82cr 0.01*5.85cr 0.1*3.51cr 0.005*2.34cr 0.02*2.85cr 0.2*1.17cr 0.01*0.78cr =
Penetration
= .0683cr = 0.0819cr r = 0.0055cr = 0.0228cr = 0.0273cr = 0.0018cr = 0.0585cr = 0.351cr = 0.0117cr = 0.057cr = 0.234cr 0.078cr
Markett Size of smart watch

Marke watches
es = 0.998 cr * Rs 1000
100000 = 9980 cr ~ 10,000
10,000cr
cr

Toothbrushes
If a UFO sucked all the toothbrushes in India, how many would it have?
• Toothbrush
Toothbrush penetration-90% uurban
rban and 80% • Total
Total no of toothbr ushes = No of toothbrushes in Househo
Households
lds + No of toothbrushes in supply
rural chain(retailers/distributors)
• Replacement frequency-
frequency- 2 months Urban; 4 • No of toothbrushes in the supply chain can be assumed to be equal to 1 replacement cycle.
Months Rural • Therefore just double the no of toothbrushes in households to accoun
accountt for the total nu
number.
mber.
T
Total
otal No of toothbrushes
Urban Rural
#Population Penetration #Population Penetration
400 million 0.9 900 million 0.8

No of toothbrushes in households = 360+720=1.08 billion
T
Total
otal Number of toothbrushes
toothbrushe s = 2.16 billion

E-Rickshaw
Revenue of a typical e-rickshaw driver per day
• Driver operate on full capacity • For each round trip the e-rickshaw
e-rickshaw travels a fixed distanc
distance-
e- Ex -between Metro and Mallkaganj
• They operate on fixed routes and fare • Average
Average time per round trip = 30 mins with a waiting time of 5 minutes on each side of trip
• Fare is the only revenue source • For further segmentation-can assume different waiting period for peak and non-peak
non -peak hours, though average round trip time can be
• Traffic across trips is uniform assumed constant assuming normal traffic
Daily Revenue
Round trips 2 * Fare/trip
10 hours/day 1.5 round

Rs. 40/trip
100% capacity trips/hr
Daily revenue = 10*1.5*40*2 = Rs. 1200


Smokers in India
Estimate the number of Smokers in India
• Smokers can be divided
divided into 4 categories- Chain smoker,
• T
Total
otal smokers= Smokers in urban area + Smokers in rural area
Regular smoker, smoking with alcohol and occasional smoker
• Urban and Rural areas to be divided into 3 classes
classes each- High income , Middle income & low income
• Cigarettes can be filtered and non-filtered
• Every class will have different proportion of male & female smoking cigarettes
• Population having filtered cigarettes to be estimated
• Probability of smoking will depend on the respective age group
• Sex Ratio –
Ratio – 1:1
1:1
• Low income group will not consume filtered cigarettes
Total
Total Populat
Population
ion
Total
Total Smokers=
Rural (60%) Urban (40%) = 68.35mn
High Income (15%) Mid Income (35%) Low Income (50%) High Income (30%) Mid Income (50%) Low Income (20%)
(Non-filtered) (Non-filtered) (Non-filtered)

Rural High Urban High Urban Mid
Income Group Male Female Income Group Male Female Income Group Male Female
Age Group % Prob Total % Prob Total Age Group % Prob Total % Prob Total Age Group % Prob Total % Prob Total
0-18 10% - - 10% - - 0-18 10% 0.05 0.5% 10% - - 0- 18 10% - - 10% - -
18-30 15% 0.3 4.5% 15% 0.15 2.25% 18- 30 15% 0. 5 7.5% 15% 0.25 3.75% 18-30 15% 0.3 4.5% 15% 0. 15 2.25%
2.25 30-50 15% 0.2 3% 15% 0. 05 0.75%
30-50 15% 0.15 15% 0.05 0.75% 30- 50 15% 0. 3 4.5% 15% 0.15 2.25%
%
>50 10% - - 10% - - >50 10% 0.05 0.5% 10% - - >50 10% - - 10% - -

Cheese Burst Pizzas

Estimate the number of cheese bursts pizzas sold by Dominos daily
• Working
Working hours from 11AM to 11 PM • Daily orders from one outlet= 0.4*3*[(Peak
0.4*3*[(Peak hrs/20mins)*0.8+(N
hrs/20mins)*0.8+(Non on peak hrs/20)*0.5]+50% of calculated figure for online and
• Peak hrs - 2-4PM & 7-10PM(occupancy
7-10PM(occupancy rate-80%),
rate-80%), Non home delivery orders]
Peak- 7 hrs(occu
hrs(occupancy
pancy rate-50%) • No. of Cheese bursts can be calculated for one city i.e. Delhi and then extrapolated to arrive at a national figure
• An outlet is able to serve
serve in a 4 km radius on av
average.
erage. • Area of Delhi= 1600 sq.sq.km.
km. and one outlet serves
serves 4 km radius
• Services available- Dine in or Home Delivery
Delivery • Therefore no. of
of outlets in Delhi= 160
1600/3.14*4*4=
0/3.14*4*4= 32
• 40% of Pizza orders are Cheese burst orders.
orders. • Consumption of pizzas in urban and suburban areas = 50% of that of metropolitan areas
•
1On
Order
avg. has approximately
it takes
take 1.5 pizzas.
s 5min to receive & 15 to process = 20mins
•
Number of Cheese Bursts
• 3 orders can be processed in parallel. per outlet
• Delhi constitutes 10% of total metropolitan area
• No Dominos outlets in rural areas.
We’ll divide country in 3 categories:
categories: Non Peak (7 hours) Peak (5 hours)
Metropolitans(20%)
•
Urban and Suburban areas(30%)

•
Rural Areas(50%) In Store Purchase Online & Home Delivery In Store Purchase Online & Home Delivery
Orders = Online orders= Orders = Online orders=

3*(420/20)*0.5 = ~ 32 0.5*32= 16 3*(300/20)*0.8= 36
3*(300/20)*0.8= 0.5*36= 18
Cheese bursts orders = Pizzas per orders = All over Delhi

Delhi = stores *
Total
Total Cheese 0.4*102 = ~ 41 41*1.5 = 61 per store= 32*61= 1952
bursts sold daily
= 34160 Since Delhi’s area = 10%
10% of total metropolitan
metropolitan area, no. of Cheese bursts sold daily in urban and suburban areas=
cheese bursts sold in metropolitans= 10* 1952 = 19520 0.5*(19520)*1.55 = 14640
0.5*(19520)*1.

Petrol Pumps
Estimate the number of Petrol Pumps in Delhi (Approach 1)
• High Traffic Zone = 30%; Medium Traffic Zone = 40%; • Area of Delhi = 1600 sq. km
Low Traffic Zone = 30% • Area served by 1 petrol pump in:
• Distance between petrol pumps in: • High traffic Zone = 2x2 sq. km = 4 sq. km
• High traffic zone = 2km; Medium Traffic Zone = 3km; • Medium traffic Zone = 3x3 sq. km = 9 sq. km
Low Traffic Zone = 4km • Low traffic Zone = 4x4 sq. km = 16 sq. km
No. of petrol pumps

in Delhi
High Traffic Zone Medium Traffic Zone Low Traffic Zone
Area # of petrol pumps Area # of petrol pumps Area # of petrol pumps
0.30*1600 = 480 sq
sq km / 4 0.40*1600 = 640 sq km / 9 0.30*1600 = 480 sq
sq km / 1166
480
480 sq km sq km = 120 640
640 sq km sq km = 71 480
480 sq km sq km = 30
Total
Total No.
No. of petrol pumps = 120 + 71
71 + 30 = 221

Petrol Pumps
Estimate the number of Petrol Pumps in India (Approach 2)
• Avg.. distance travelled by user does not vary across
Avg • We use a demand side approach for this
vehicles and = 30 km/day
km/day • Number of Petrol Pumps = Demand of Petrol / Petrol supplied by a pump (avg)
• Non-peak time hours of a petrol pump can be • Demand of Petrol = Distance travelled
travelled by a vehicle
vehicle user (avg) * ( Number of bike users /Bike mileage + Number of
surmised in a single number = 50% in this case Car users / Car mileage)
• Pooling usage internalized in distance assumption • Petrol Supplied by a pump = Overall Petrol Suppling Capacity * Weighted Average
Average of Usage ratio
Number of Petrol Pumps
Demand of Petrol Petrol Pump usage ratio Petrol Pump Capacity
2 wheeler 4 wheeler Peak Time Non-Peak Time Avg time to fill 15 l petrol = 3 min
Avg booths = 4
Empirical 25 crore users 15 crore users 4 hours 10 hours Capacity = 15*4*(4*60/3 = 16800 l
Assumptions 70 km/l mileage 10 km/l mileage 100% 50%
Demand of Petrol = [Avg distance = 30 km] * Petrol Supplied per pump = [Avg
[Avg Usage Ratio = (1*4+0.5*10)/14 = 0.64]*[
0.64]*[Capacity
Capacity =
[25cr/70 km/l + 15cr/10 km/l] = 55.7 crore litre 16,800 l] = 10,800 litre
Number of Petrol Pumps = [Demand = 55.7 Cr ltr] / [Per Pump Supply = 10,800 ltr]
l tr] = 51,587 = 51,500 (approx.)

Petrol Pumps
Estimate the number of Petrol Pumps in India
I ndia (Approach 3)
• Petrol pump operated 12 hours a day • # of pumps in India = (# of cars in India) / (number of cars serviced by a petrol pump) * (frequency
(frequency of
• Uniform petrol consumption
consumption by a car visits to a petrol pump by a car)
• Arrival rate uniform across peak hours • For a petrol pump , peak hours ( 7 am to 11 am ) and ( 4 pm to 8 pm) = 8 hours
• Arrival rate different across non peak hours • Car arrival rate in peak hours = 4 cars in 5 minutes
• Considering only 4 wheelers in the analysis • Car arrival rate in non-peak hours = 4 cars in 10 minutes
•
•
Assuming average size of a household = 5 members. •
This implies
Assuming antotal carscar
average serviced
needs daily
petrol=twice
8*(4/5)*60 + 4*(4/10)*60=
4*(4/1
in a month
month 0)*60= 384+96= 480 cars serviced a day
day..
• Total
Total population of India = 1.25 Billion
• 50% households = 0 vehicles 0.7 vehicles Assuming commercial vehicles form 20% of
Total
Total number of cars in India = +
• 30% households = 1 vehicle per the total private vehicles = 35 million
250*0.7 = 175 million
milli on private vehicles.
• 20% households = 2 vehicles household commercial vehicles
# of cars in India
India Total 210 million vehicles
vehicles in India . Assuming each vehicle needs fuel twice in a
month we get = (2/30)*210= 14 million vehicles using fuel daily
Total
Total households in
Av
Average
erage number of
India = ( 1250/5) = × cars in each household Number of petrol pumps = (# of cars 14million/480= 30000 petrol stations in
250 million visiting a petrol pump) / (# of cars India . Asuming each station has 4 pumps
serviced by a petrol pump = 120000 pumps

TT Balls
Estimate the number of TT balls used in a day in Delhi
• Considering only matches in commercial spaces for calculation • Solved from demand side
• Using a factor of 20% for private spaces • #Matches per hour = 1/(Time per match + Idle time)
time)
• Considering all matches to be similar (for avg. life of a ball) • Time per match = 14 minutes (for simplicity;
simplicity; assuming 11-point match)
• Avg.. Life of a ball = 5 matches
Avg
# of TT bal
balls
ls
G1 –
G1 – Guesstimate
Guesstimate the number of TT balls
used in a day in Delhi 14208
G2 –
G2 – Estimate
Estimate the number of TT matches
played everyday
G3 –
G3 – Estimate
Estimate the number of TT racquets # of matches/day # of balls/match
used in a lifetime by an international player
& many more 71040 1/5
Commercial Private Average

Average life of ball
148000 x 4 = 5920
1480 592000 59200 x 0.2 = 11840 5 matches
Basic Thoughts:-
Approaches –
Approaches – Demand
Demand side and Supply
# of table hours
hours Matches/ hour
Side (try both)
Be ready with enough information about 14800* 60/15 = 4
the manufacturing aspects of the sport or
make assumptions
Time/match Idle time
*Refer to the next Slide for calculations 14 mins 1 min Cont. on next slide:-

TT Balls
Estimate the number of TT balls used in a day in Delhi
# of Table Hours Available
14800
Large Spaces Medium Spaces Small Spaces

100*60 = 6000 4800 4000
# of Space
Spacess Hours per Space # of Spaces
Spaces Hours per Space # of Space
Spacess Hours per Space
200*1/2 = 100 60 200*1 = 200 24 200*2 = 400 10
# Regions
Regions - 200 # Tables
Tables - 5 # Regions
Regions - 200 # Table
Tabless - 3 # Regions
Regions - 200 # Table
Tabless - 2
# of Spaces
Spaces –
– 1/2
1/2 # Hours
Hours Open - 12 # of Spac
Spaces
es –
– 11 # Hours
Hours Ope
Open
n -8 # of Space
Spacess – 2
– 2 # Hours
Hours Op
Open
en - 5
Methodology:- Methodology:- Methodology:-
Need proxy for #regions –
#regions – Use
Use metro stations # Tables per space=> Total number
number of table hours available = Hours available
available
Tot
Total
al metro stations = 200
200 For Large spaces = 5 tables in :-
# commercial spaces per region=> For Medium spaces = 3 tables Large Spaces + Medium Spaces + Small Spaces
For Large spaces = 1 space per 2 regions For small spaces = 2 tables
For Medium spaces = 1 space per 1 region For any space:-
For small spaces = 2 spaces per 1 regions Hours available = Number
Number of spaces * Hours per space
Number of spaces = (Number of regions * number of
# Hours available per space => spaces per region)
For Large spaces = 12 hours Hours per space = (Number
(Number of tables * number of hours
For Medium spaces = 8 hours open)
For small spaces = 5 hours
(Assuming full capacity utilization) T
Total
otal number of TT balls used in a day = 14800 * 4 * 1.2 * (1/5) = 14208 ~14200 TT Balls

White Shirts in Delhi

Estimate the number of people wearing a white shirt (WS) in Delhi on any particular day.
• Calculations are done for a working weekday i.e. assuming • Population segmentation
segmentation has been done across various age groups.
offices, schools and various institutions are open • Calculation for each age group is done on the basis of observed/experienced
observed/experienced characteristics
characteristics..
• One person is wearing one shirt a day
day.. • Various percentages are used
used based either on memorised
memorised or experienced statistics.
statistics.
• No considering School going children a nd their shirts.
• Population of Delhi = 20 million Population (Age
Segmentation)
25-59: 60+ :
30% = 8 million 20% = 2 million
Student 5% = 0.4 M Employed (Formal): Employed (Informal): Unemployed: Females : Males :

20%= 1.6 M 70%= 5.6 M 5% = 0.4 M 50% = 1M 50% = 1 M
Non Professional Assuming don’t

don’t wear
wear
Courses 95%
20% wear 10% wear WS: 0
Males 60% Female 40%
10% wear WS. ~ white shirt white shirt
0.038 M Employed/Self Retired:
40% wear WS. ~ 20% wear WS ~ Employed:20%= 0.2 M 80%= 0.8 M
1.12 million 0.04 million
Professional 0.384 M 0.128 M
Courses 5% 50% wear white shirts 5% wear white shirts
~ 0.1 M ~ 0.04 M
0.1 M 0.04 M
30% wear WS
~ 0.006 M
T
Total
otal numb
number
er of people wearing
wearing white shirts in Delhi
Delhi =5.76 million=
million= 6 million
million (approximately)
(approximately)

Delhi Schools
Estimate the number of Schools in Delhi
T
Total
otal Number of Schools = School going children in Delhi / Avg.. children in one school
Avg
Part 1: Estimating no. of school going children in Delhi Part 2: Avg. children in one school
We know
know that the population of Delhi is around 20 million. Since India is a young country
country,, we can assume 50%
Schools
is under 25. So population under 25 would be 10 million. Let’s equally divide the population under 25 across
every year, which would be equal to 400,000.
Small schools
schools Medium Schoo
Medium Schools
ls Large Scho
Large Schools
ols
Population (40%) (40%) (20%)
Middle & Small Medium Large

Kindergarten & Senior Secondary Age 18+ (out
Age 0-3 Secondary School Class Size/Section 20/3 30/4 40/6
Primary School School (Class 11- of scho
school)
ol)
(Class 6-10) -
(Class 1-5) - 2.8m 12) - 0.8m
0.8m Standards Up till 10 Up till 12 Up till 12
2.0m
Avg Student
Student in one school
school = (20 * 3 * 10) * 0.4 + (30 * 4 *12) * 0.4 +
% Going to School (40 * 6 * 12) * 0.2
= 600 * 0.4 + 1440 * 0.4 + 2880 * 0.2
Middle Class & Ab ove (40%) 100% 100% 100%
= 240 + 576 + 576 = 1392
Lower Class (40%) 90% 75% 50%
BPL (20%) 50% 25% 0% T
Total
otal Number of Schools in Delhi = 43,88,000 / 1392
Total: (1.0 * 2.8 + 1.0 * 2.0 + 1.0 * 0.8) * 0.4 + (0.9 * 2.8 + 0.75 * 2.0 + 0.
0.55 * 0.8) * 0.4 + (0.5
(0.5 * 2.8 + 0.25 * 2.0
2.0 + 0) *
~ 4,400,000 / 1400 = 3142 ~3150
0.2 = 4.388 To triangulate
triangulate this number, you can take a 5km sq. area, estimate
estimate
Hence estimated school going children = 4.388 million the number of schools and extend it for the entire city

Daily Departing Flights

f lights departing from Delhi Airport in a Day
Estimate number of flights
• Airport doesn’t
doesn’t operate at max. utilisation
utilisation • Tot
Total
al departing flights (total out-bound
out-bound flights) in a day = Total In-Bound
In-Bound Flights in a day = Total
Total Flights Operating from an airport
• Turnaround time
time –
• No of flights operating from one hangar = (24hrs/avg
(24hrs/avg.. turnaround time) [Turnaround timetime is the time a flight would
would stay in a hangar]
• Domestic flight –
flight – 1.5hr
1.5hr
• No of flights operating from one terminal = 2 x (No of flights operating from one hangar)
• International Flight –
Flight – 3hrs
3hrs
• There is a possibility that a flight landing in Delhi, might not depart that day its
itself.
elf. But there would
would also be flight which depart on a day that did
did
• Terminal at IGI –
IGI – 30
30 (Domestic), 40 (Intl.)
not land on that particular day
day.. Hence it should have a balancing effect.
• Every terminal has 2 hangars
No. of domestic terminals 30 Max. Domestic

Domestic Flights Flights =
No. of domestic flights operating from one 32 x 30 = 960
terminal 2 x (24/1.5) = 32
Maximum Operating Flights
No. of international terminals 40 Max. Intl. Flights
International Flights =
No. of international flights operating from one 16 x 40 = 640
terminal 2 x (24/3) = 16
Utilisation rates have been
considered to be different for To triangulate the number,
number, we can use the alternate
alternate approach from the
different hours for domestic Hours of the day demand side, by figuring out how many people would be departing from
Delhi on one day divided by the avg. number of people in one flight
flights only. For international
flights, uniform rusk of
of 50%
has been assumed
6:00am –
6:00am – 9:00
9:00 am 9:00am –
9:00am – 6:00
6:00 pm 6:00pm –
6:00pm – 9:00
9:00 pm 9:00pm –
9:00pm – 12:00
12:00 am 12:00am
12:00am –
– 6:00
6:00 am
Domestic Flight Rush 100% 60% 100% 60%

20%
Avg.. Utilisation for Domestic
Avg Domestic Flights = (6 x 100 + 12 x 60
60 + 6 x 20) = 60%
60%
T
Total
otal flight departures = Operati
Operating
ng Domestic Flights + Operating Intl. Flig
Flights
hts = (0.6 x 960) + ((0.5
0.5 x 640) = 896 flights

People you met

Estimate the number of people you interacted with over the last year
Family Probability of
Probability
Total
Total People People interacted with
Interaction
Informal
Friend Circle
Interaction 10 (Family) 1.0 10 * 1.0 = 10
Offline Strangers 50 (Friends) 0.9 50 * 0.9 = 45

Interactions
Formal Colleagues 250 (Strangers) 1.0 250 * 1.0 = 250

Interaction 200 (Colleagues) 0.75 200 * 0.75 = 150
Managers
Interactions 10 (Managers) 1.0 10 * 1.0 = 10
Facebook
500 (Facebook) 0.1 500 * 0.1 = 50
Social
LinkedIn
Media 200 (LinkedIn) 0.2 200 * 0.2 = 40
Online WhatsApp
Interactions 250 (WhatsApp) 0.8 250 * 0.8 = 200
Video 50 (Zoom) 1.0 50 * 1.0 = 50
Zoom
Conference
Total
Total people interacted with = 10 + 45 + 250 + 150 + 10 + 50 + 40 + 200 + 50 = 805 ~ 800
However,
However
of , there
let's say 0.75 would be potential
to discount overlaps,
the potential e.
e.g.
g. Friends
overlaps
overlaps. . and Colleagues, Fac
Facebook
ebook friends and LinkedIn connections, So we can introduce a normalizi
normalizing
ng factor,
Hence normalized value for people interacted with = 800 * 0.75 = 600

Tractors in India
Estimate the number of tractors in India
• Tractors are only being used for agricultural purposes in the primary sector • The population of India = 130cr.; Rural=
Rural= 70% & Urban= 30%; AAvg.
vg.
• There is uniform supply of tractors around the country household size= 5
• All the tractors in consideration are functional and others have been disposed off • Avg.. life of tractor is 5 years (approx.)
Avg
effectively. • Methodology = [# of tractors in rural areas + # of tractors in urban areas
• Each farmrm--owner has only one tratracto
torr for her lan
and
d/ one tractor per farm
rmiing (10% of figure from rural areas)] / (avg
(avg.. life)
•
household Applying 80/20 rule to estimate figures

figures that are not co
commonly
mmonly known
Population of India Rural (70%)
Urban (30%) Rural (70%) Secondary Se

Sector ((220%) Primar y Sector (8
(80%)
10% of r ural area figure Other p

prrimar y occupations ((220%) Far mi
ming (8
(80%)
Farm Owners (20%) Wage Earners (80%)

To filter down to target
population, See the Financially capable of owning tractor & tractable
tractable Poor Finances and/or non-
need, accessibility, farming area (20%) tractable farm area (80%)
affordability,, preference
affordability
for tractors Limited/No
Limi accesss to markets
ted/No acces Access to markets
markets
(20%) (80%)
Cont. on next slide:-

Tractors in India
Estimate the number of tractors in India
Limited/No access to Access to markets (80%)

(80%)
markets (20%)
Willing to buy (80%) Unwilling to buy (20%)
Final Calculation
Number of tractors = [# of tractors in rural areas + # of tractors in urban areas (10% of figure from rural areas)] / (avg
(avg.. life)
= [(# of tractors in rural area) * 1.1] / 5
= [(26 cr. *0.7*0.8*0.8*0.2*0.2*0.8*0.8 ) * 1.1] / 5
= 6.56 lac.
Area of India = 32.9 lac sq

sq.. km Triangulation
Triangulation & Sanity Check (Area bas
based
ed approach) Alternate Approach
= 32.9 cr. hectares
Number of = [Area of India * %Arable land * %T
%Tractable
ractable area]/[Tractor usage per day * days of har vest]
Arable land ~ 50% tractors
Tractable area
area ~ 40% of arable area = [32.9 * 107 * 0.5 * 0.4]
0.4] / [5 * 21]
Average
Average usage of tractor ~ 5 hectares = 6.27 lac.
daily
Average
Average 3 weeks of harvest per season

EV Market Size
Estimate the market size of EV in India
• Considering market for only 4 wheeler passenger vehicles. • Population of 5 major tier 1 cities in India –
India – Approx.
Approx. 90 million.
million.
• Only available in tier 1 cities. • Average household size
Average size –
– 4.5
4.5 member/family.
• Premium Car Segment –
Segment – Price
Price > Rs. 10,00,000. • Poor wont choose a costly EV.
• Average
Average years a car is used by rich people
people –
– 55 years. • In middle class, 50% families will have a car. Among them, 80% will buy normal cars, and 20% premium cars.
• Average
Average years a car is used by middle class
class –
– 77 years. • In elite class 100% population will have a car, all will be buying premium cars.
• EV is currently in introduction stage in India, so not • Innovators/Environmentalist
Innovators/ Environmentalist among rich - 10%, who will adopt to EV. Inno
Innovators/En
vators/Environmentalist
vironmentalist among middle class- 5%,
considering second hand EV. who will adopt to EV.

• All families in rich sector
sector own a car, 50%
50% middle class
families own a car.
Population – 90
Population – 90 million
• Demographic Divide: Uber Uber Rich = 2%, Middle Class = Tier 1 Cities
#families ~ 20 million
38%, Poor = 60%.
Population = 2%
Income Spread
#families =
Population = 60%
400,000
and product #families = 12 million Poor Middle Class Uber Rich
lifecycle factor Car buyers ~ 100%
Car buyers = 0 Population = 38% All Premium
Lifecycle ~ 5 years
#families = 7.6 million
#families ~ 440,000 Car buyers ~ 50%
Average
Average Price = Rs
Rs.. 6,00,000 Normal Cars Lifecycle ~ 7 years Normal Cars
Penetration Pen
Penetrat
etration
ion - 5%
Factors/Acceptability #families ~ 80,000
#families ~ 110,000
Factor Average
Average Price =
Average
Average Price = Rs
Rs.. 22,00,000 Premium Cars Premium Cars
Rs. 22,00,000
Penetration –
Penetration – 5%
5%
Penetration –
Penetration – 10%
10%
Markett Size of electric
Marke electric vehicles
vehicles = # of normal EV*Avg
EV*Avg.. cost of non-premium
non-premium EV + # of premium EV*avg
EV*avg.. cost of premiu
premium
m EV
= 22,000*5,00,000 + 13,500*22,00,000 ~ Rs. 40 billion

DTC Bus
Estimate the number of DTC buses in Delhi
1. Only Work
Working
ing p
population
opulation uses b
buses
uses in consideration. 1. Po
Popu
pula
lati
tion
on of Delh
Delhii ~ 3 Cr
2. Only bbuses
uses that
that are operating
operating are
are counted.
counted. 2. Dividing
Dividing by age,
age, inco
income
me group an
andd preference
preference ooff tran
transport
sport..
3. Calcu
Calculatio
lation
n on the basis
basis of buses
buses running o
on
n a normal weekday
weekday 3. In Middle Income group,
group, Metro aand
nd Motor Cycle are comparatively
comparatively affordable and thus lesser
lesser people use buses.
buses.
morning. 4. Total no. of buses = No. of people using buses on a busy busy morning simultaneously/5
simultaneously/500
4. No.
No. of peo
people
ple per bus = 50 5. At any given
given time only
only,, 10% peop
people
le will be able to use the buses.
5. High Income people do not use buses and include upperupper middle and 6. DTC buses
buses = 70% of total buses plying
plying i.e.
i.e. 30%
30% priv
private.
ate.
high class.
Number of people using

buses in Delhi
Children (0-15 yrs) Working

Working Pop. (16-65) yrs Geriatric (65 and above)
Low Income (40%) Middle Income (40%) High Income (20%)
Cycle Bus Metro Bus

2 Wheelers (30%) Metro (40%)
(20% (60%) (20%) (30%)
No. of people using buses regularly = ((0.4 X 0.6) + (0.4 X 0.3)) X 0.4 X 3 Cr = 43,20,000
At peak hour,
hour, considering 10% in buses at any ggiven
iven time = 0.1 X 43,
43,20,000
20,000 = 4,32,000
No. of Buses = 4,32,000/50 = 8,640
DTC : PRIVATE = 70 : 30
=> No. of DTC Buses in Delhi = 0.7 X 8,640 = 6,048

Screen
Flat S creen Televis
Televisions
ions
Estimate the revenue of flat screen televisions sold in Australia in the past 12 months
• Population: 25 million people • No of households = T Total

otal Population/A
Population/Average
verage size of household
• Size of average household : 3 people • No of TVs per household is considered by taking an average
average of all the households (Across all categories)
• Aver
Average
age llife
ife of TVs = 4 ye
years
ars • Calculating the average price of 1 TV,
TV, assuming price under each category
• Avera
Average
ge number
number of TVs / house
household
hold = 1 • Here we are not considering reused TVs; only fresh purchases
Revenues
Total
Total No. of
Price of
of 1 TV
TVs
Premium Medium Low End No. of Households No. of TV/Household
25 million
Share and 20% of Total 60% of Total 20% of Total
3 member/family
1 TV per
Cost Cost = $1000 Cost = $600 Cost = $200 household/4 years
~ 8 million
Av
Average
erage Price of 1 TV = (0.2*1000+0.6*600+0.2*200)
= $600 T
Tota
otall no
no of
of TVs sold
sold = 8 / 4= 2 mill
million
ion
Total
Total Revenues = Average Price of 1 TV * Tota
Totall no
no of TVs sold
sold = $1.2 Billion

Amazon India
Guesstimate the number
number of daily orders
orders of Amazon India
• No of mobile users in India –
India – 800
800 million. • Population of India –
India – 1.3
1.3 billion. No of mobile users –
users – 800
800 million.
• No. of internet users –
users – 70%
70% of mobile users. • Frequency of buying varies across age groups and income.
• Urban Internet Users –
Users – 60%
60% • Considering just the sales of Amazon I ndia, not its grocery or any other chain.
• Rural Internet Users –
Users – 40%
40% • Amazon has around 35% market share in India e-commerce industry. Flipkart
Flipkart –
– 45%,
45%, rest others.
• Users belong to Age group 10-55. • Considering 50% of the population is aged below 25 and uniform distribution of population across ages.
• Rural low income group’s buying pattern is negligible. • Considering life expectancy of 65 years.
# of interne
internett users
users –
– 560
560 million
Location Basis 40% Rural Urban 60%
60% 30% 10% 40% 40% 20%

Low Income Medium Income High Income Low Income Medium Income High Income
Income Group Rural – M

– Medium Income Rural – H
– High Income Urban – L
– Low Income Urban – M
– Medium Income Urban – High
– High Income
Age 10-25 25-40 40-55 10-25 25-40 40-55 10-25 25-40 40-55 10-25 25-40 40-55 10-25 25-40 40-55
Orders/Yr 2 2 0 4 6 3 2 4 0 4 6 3 9 1122 6
To
Total
tal Orders/day 1.1L 69K 0 73K 69K 35K 2.2L 2.7L 35K 4.4L 4.2L 2L 5L 4.1L 2L
Summing all order values gives the total orders delivered in a day around 30 lacs. Out of this around 35% belongs to Amazon,
that would give a figure of around 10 lakh packages per day.
day.

Daily rev
revenue
enue of Airport
Airport
Estimate the daily revenue of an airport
• 1. Considering only the most substantial revenue str eams. • Advertisement Revenue= revenue from billboards & experience
experience areas.
2. Assuming that shops pay only a fixed rent. • Area of billboards * price/m2. Assuming Price/m2 is 200 for a day. Assuming 6 experience
experience areas and 75k/day as charge.
3. Number of flights per hour is a function of the kind of rush. • Airline charges: Fixed charges (domestic)
(domestic) : 50k, Fixed charges (international) : 100k.
4. Assume that the primary revenue source from advertisements are • Average shop charges = 4000/day; parking chargescharges = 100.
billboards. • No of airstrips –
airstrips – 3,
3, Low rush –
rush – 11 flight per strip ; Medium –
Medium – 22 flights per strip High –
High – 44 flights per strip
5. No. of Flights per hour is a function of the no. of airstrips.
Revenues of
of an airport
Area of
Airlines Shops Parking Advertisement
billboards
Fixed Fees Per Landing revenues # of shop

shopss x Rent/shop # of vveehicles x Fees/vehicle Experience Areas Billboards
250*4000 = 10 lacs Taking 6 experience areas
# of pe
people people/vehicle 3
Domestic International Domestic International / Type Small Medium Large
= # airlines* fees/airline Rush Hour Low Medium High Number 500 250 50
# of flights x people/flight
Hours 6 6 12 Size (sq. ft) 2*2 3*5 8*10
= 10 * 50000 = 15*100000
= 396*200/3*100 Total 2000 3750 4000
= 5 lacs = 15 lacs Flights/hr 6 12 24
= 2.64 lacs (Assuming 10%
Flights/da 36 72 288 vehicles are parked) =9750*200 = 19.5 lacs
Flights/da 36 72 288
Flights Domestic Int. y = 4.5 + 19.5 =24 lacs
# flights 297 99
Flights/hr 2500 7500 Summing all values gives the total revenue as 20 + 14.85 + 2.64 + 24
Total 7.425 7.425
= Rs. 61.5 lacs/day.

Daily Revenue of 24x7 Retail Store Chain

revenue of 24x7 chain of Retail Store
Estimate the daily revenue
• Currently the brand has around 50 stores in Delhi NCR out of which only • Pea
eakk ca
can
n be 12 ho hour
urss fr
from
om 8 PM to 8AM 8AM fo forr of
offl
flin
inee stor
stores
es;; wh
when
en othe
otherr co
conv
nven
enie
ienc
ncee stor
stores
es
20(40%) are in NCR are not ope
operat
rating
ing
• Considering a normal working day • Non
Non Peaeakk ho
hour
urss re
repo
portrt a sale
saless of 50%
50% co comp
mpar
ared
ed to pe
peak
ak ho
hour
urss
• Here we are considering both online and offline stores • Onli
Online
ne or
orde
derr are
are almo
almost st 50%
50% of of offl
flin
inee in NC
NCR R
• 3 counters in each store with an average footfall of 60 (peak hour) • Three broad product categories present.
Note: The stores in Gurgaon and other

Total
Total Revenue
NCR
NCR are areas ha
havve an on
onli
line
ne pre
presenc
sencee and
and
can del
deliv
iver
er using
using Zomato
Zomato/ / Swiggy Stores
Stores,,
hence we need to account for them as Avg.. Revenue per store
Avg No of stores (50)
well
During Peak
During Peak hou
hours:
rs:
1 bi
bill
llin
ingg every
every 6 mi
mins
ns/c
/cou
ount
nter
er :3
:300 or
orde
ders
rs per
per
hour Peak Hours (12) Non Peak Hours (12) Delhi (30) Gurgaon/NCR (20)
Hence
Hence total
total rev
revenu
enuee per sto
store(
re(offl
offline
ine dur
during
ing
peak hour)
= (0.3
(0.3*300+
*300+0.5*
0.5*250+0
250+0.2*2
.2*200)*3
00)*300 = 6810
Ext
Extend
endinging this
this to daily
daily rev
reven
enue
ue : Avg.
Type of Order
18X6810= ₹ 1,22,580 Purchase(Rs.)
Food and other
Confectionaries, Bill Payments, Recharge, Food & other 300
No
Now
ov
w we in
over
incl
clud
udee the
er the comple
complete
the onli
online
te Delhi
ne an
and
d of
Delhi NCR reg
offl
flin
region
ion
inee sa
sale
less (30%) Groceries (50%) Tickets etc. (20%) Conf. & Groceries 250
Total
Total Revenue = (50+20*0.5) *122580 Bill Payment etc. 200
= ₹ 73,54,800 Hence,, the daily revenue of 24X7 chain of retail store
Hence storess is ₹ 73,54,800

Automobile
Automobile Tire Mark
Market
et
What is the size of automobile
automobile tire market in India
India in 2020?
• By size we mean the number of automobile tires • Tot
Total
al number of 4 wheelers = Number of cars owned by rural + urban households
• Consider only 4 wheeler passenger vehicles • Urban and Rural areas to be divided into 3 classes
classes each- High income , Middle income & low income
• Average
Average household size is 6 for rural and 4 for urban • Every class will have different
different proportion of families owning the car
• Lower income segment don’t own cars and Urban high incomes • Tot
Total
al Number of 4-wheelers(N) owned can be di divided
vided in New (N/12) and Old (11 (11N/12)
N/12)
own 2 cars per
p er family, • New cars will have 5 new tires and old cars will have 5 old tires replaced over 5 years
•
•
Average
Average
Each newlife
carofhas
125years
tires for cars and 5 years
(4 operational for tires
+ 1 spare)
Total
Total Populat
Population
ion (1.4 bn)
Rural (70%) Urban (30%)
High Income (15%) Mid Income (35%) Low In

Income (5
(50%) High In
Income (3
(30%) Mid In
Income ((550%) Low Income (20%)
#Households =1.4*0.7*0.15/6 = 24mn =1.4*0.7*0.35/6 = 57mn =1.4*0.7*0.5/6 = 81mn =1.4*0.3*0.3/4 = 31mn =1.4*0.3*0.5/4 = 52mn =1.4*0.3*0.5/4 = 52mn
Penetration of 4-
80% 10% 0% 95% 60% 0%
wheelers
# 4-wheelers
1 1 0 2 1 0
per household
New 4-wheelers ~ 10 mn Number of tires per year = 10*5 = 50
Total
Total # Tires
Total
Total #4-wheelers = 115 mn ~ 155mn
Old 4-wheelers ~ 105 mn Number of tires per year = 105*5/5 = 105

Wine Consumption
Estimate the number of bottles of wine consumed in India in a week.
• Rural, older and urban-lower
urban- lower income group people don’t consume
• Demand side approach is used
wine. • Number of bottles of wine consumed (dr
(drinking)
inking) = Number of glass of wine consumed per week/ Number of
of
• Wine in India is consumed for both drinking and cooking purposes. glasses in an average wine bottle
• Penetration of wine drinkers in India is 40% of the total alcohol • Number of glass of wine consumer (per week) = T
Total
otal wine drinkers * #glasses of wine consumed by an average
drinkers. drinker per week
• Wine consumed for cooking purposes would be 5% of the total wine • Number of bottles of wine consumed = TTotal
otal bottles of wine consumed for drinking + cooking purposes
purposes
consumed for drinking purpose.
Total
Total Populat
Population
ion (1.4 bn)
Rural people
won’tt drink wine
won’ Rural (70%) Urban (30%)
Children (0-19 yrs) Older population
#People who drink =1.4*0.3*0.7*(0.4*0.7+0.2*0.9) (20%) (65yrs+) (10%)
Working
Working Populatio
Population
n (19-
alcohol (Urban area) =13mn
65 yrs) (70%)
% of wine drinkers in In
India 40%
Lower Income Middle Income High Income
Total wine drinkers in India 13mn * 0.4 = ~5mn (40%) (40%) (20%)
#Wine Glasses
Glasses consumed by
2 glasses/week #Bottles of wine
#Bottles
an average w
wine
ine drinker #Bottles of wine 70% drink alcohol 90% drink alcohol
consumed for
consumed for
#Glass
week in of wine consumed per
India ~10mn drinking purpose = cooking purposes
5%*1.25mn = = Total
Total #Bottle of wine consumed
1.25mn in India in a week
#Glasses in an average wine
~0.05mn
8 glasses ~1.3mn
bottle

Bisleri Water Bottle (Part 1)

Predict the user base of 1 litre Bisleri water bottle
bottle in Delhi
• Yearly
Yearly tourists will be oour
ur potential customer
customer base and • User Base = Tourists in a year + restaurants in Delhi
restaurants will be potential business
business that buys Bisleri Bottle • Tourists that Delhi experie
Tourists experience
nce in a year = Domes
Domestic
tic Tourists
Tourists + Foreign
Foreign Tourists
Tourists
• Tourists
Tou rists and Rest
Restaurants
aurants are Direct Cu
Customers
stomers • Domestic Tourists
Tourists in Delhi = # People who go on trip somewhere in India/# Tourists Spots
• Foreign tourists
tourists are 1% of domestic tourists in Delhi • Foreign Tourists
Tourists = 20% of Domestic TourTourists
ists
• High Income Indians prefer to travel internationally
Income Group % Penetration Total Tourists

Tourists in Delh
Delhii in a year
High 10% 40% 0.04 Percentage of tourists buying
Medium 30% 80% 0.24 mineral water bottle
bottle = 50% of
Domestic Tourists Foreign Tourists Domestic Tourists
Tourists + 100% of
Low 60% 10% 0.06
Foreign Tourists
= 0.5*20 million
= 10.2 + 200K
million
Foreign Tourists =
T
Total
otal T
Tourists
ourists in India #T
Tourist
ourist Spots Domestic * 0.01
= 200K Percentage of tourists buying
Age Group: 18-50 yrs (65% of 1.4bn) 15 Bisleri
Bisleri = 50%
50%
# Potential Customer base in a

Domestic Tourist = Total Tourist in India/ Tourists Spots year = 5.1 million
= (0.04+0.24+0.06)*0.65*1.4bn / 15
~ 20 million

Bisleri Water Bottle (Part 2)

Predict the user base of 1 litre Bisleri water bottle
bottle in Delhi
• 3,4,5 Star and Mall restaurants = 50% 1 & 2 star • # Restaurants in Delhi = # People who dine out per day/A
day/Average
verage daily capacity of a restaurant
• Bachelors prefer to order and dine out only during special
occasion
• W
Working
orking Hour of a restaurant = 8
# Restaurants in Delhi
Category % Penetration Frequency

Office Goer Oncee in 2
Onc 1 & 2 Star 3, 4 & 5 Star & Mall restaurant
30% 50%
s Parti
Parties
es weeks
Bachelors 30% 50% Once a week
Total
Total # 3,4, 5 star & Mall
Once # People who dine out daily Avg. Daily Capacity
Family 20/4 50%
a mo
mont
nthh
restaurant = 0.5*10.2K
= 5.1K
Total
Total = 0.3*0.5*20million/14 + 0.3*0.5*20 Seating capacity * occupancy rate
Population of Delhi = 20 million * working hours
million/7 + 5million*0.5*4/30 ~ 980K
= 40*0.4*8 = 96
Total
Total # 1 & 2 star restaurant =
Total
Total restaurants iin
n Delhi = 15.3k
980k/96 = 10,200K
User base of Bisle
Bisleriri Water BBottle
ottle =
Tourists
Tourists + 50% o off all restaurants =
5.1 million tourists & 7,650 restaurants

Sanitizer Demand
Estimate the amount of sanitizers used in Delhi in a month
• Only personal use sanitizers estimated. • Amount of sanitizers used = Consumption/ family * number of families using sanitizers
•If a family uses sanitizers, the usage remains same across all • To estimate
estimate number of families using sanitizers, we start with the population of Delhi and divide it into income
income segments. (usage = 100ml/month/family segments
•Family size remains the same across all income segments (=4) • Number of families in each segment is calculate
calculatedd
• Penetration of sanitizers is 0% in below poverty line section of •Based on observation, penetration in each segment is decided and then number of families using sanitizers in
each segment is estimated
economy as increases as income increases •Number of families is multiplied by average consumption
consumption to get the sanitizer demand in a month
Population (19m) Let avg monthly usage

usage of
household = 100ml
Below Poverty Line Low Income Mid Income High Income

Monthly Demand = No.
No. of
households * avg monthly
Proportion of population 10% (1.9m) 30% (5.7m) 40% (7.6m) 20% (3.8m) usage/ household
No. of
of famil
families
ies (if size =4) 0.47 m 1.4 m 1.9 m 0.95 m
Monthly Sanitizer
Demand = 25.1m
Penetration 0% (0m) 30% (0.42 m) 60% (1.14 m) ~100% (0.95 m) L/month
2.51m

BCom
BCom(H
(H)) ad
admi
miss
ssio
ions
ns in Del
Delhi
hi Uni
nivver
ersi
sity
ty
Estimat
Estimate
e the tot
Estimate total
al num
numbernumberof
ofberof
BCom BCom(
BCom(H)
(H) H) adm
admissi
issions
admissions ons
in DUin De
Delhi
lhi Un
Univ
iver
ersit
sity
y in a yea
earr.
• Eq
Equauall nu
numb
mber er of Tier
Tier 1, 2 & 3 collcolleege
gess offe
offeri
ring
ng BC
BComom • DU coll
colleg
eges
es ar
aree to be divi
divide
ded
d into
into 3 cate
categor
gorie
iess – Tier
Tier 1, Tier 2 and Tier 3 coll
colleges
eges
• 80 co
collllege
egess unde
underr DU,DU, 70%
70% offers
offers BC
BCom om • T
Tota
otall number of BCom (H) admis admissions
sions = Number of students
students in Tier 1 + Tier 2 + Tier 3 coll
colleges
eges
Tier 1, 2 & 3 college
• collegess reserv
reserves es 80%
80%,, 60% and 40% of thei theirr BCom •Number of admissions in a ccolle ollege
ge = Total #seats
#seat s * % seats reserved for specific
specific course * {1-% seats that
seat
seatss respec
respecti tive
vely
ly for BCom (H) admi admissions
ssions will
will remain
remain vacant}
vacant}
• Le
Less
ss nu
numbemberr of seat seatss wil
illl re
rema
mainin vaca
vacant
nt in top tier
tier coll
colleg
eges
es at the end
end • There are two different
different cours
courses
es offered under BCom –
BCom – BCoBCom m (Honors)
(Honors) & BCom
BCom (Progra
(Program)
m)
of admiss
admission ion cy
cycl
clee • T
Top
op tier coll
colleges
eges wi
willll have
have more BCom (H) seatseatss as compa
compared
red to the other tier college
collegess
Colleges
Colleges offe
offerin
ring
g BCom(H) (80*
(80*0.6)
0.6)
Tierr 1 (16)
Tie (16) Tierr 2 (16
Tie (16)) Tierr 3 (16
Tie (16))
#BCom Seats =16*500 = 8000 =16*500 = 8000 =16*500 = 8000

% of BCom (H) seats 80% 60% 40%
% of vac
acan
antt BCom
BCom (H
(H)) se
seat
atss at
the end of admission cycle 5% 15% 20%
BCom(H)
BCom(H) se
seat
atss (T
(Tie
ierr 1)~ 64
6400
00 Numb
Number
er of st
stud
uden
ents
ts = 64
6400
00*
*0.9
.955 = ~608
~60800
Tota
Totall #BCom
Tota
Totall #BCom seats = 2400
240000 BCom
BCom (H) se
seat
atss (Ti
(Tier
er 2) ~4800
~4800 Nu
Numb
mber
er of st
stud
uden
ents
ts = 48
48000*
0*0.
0.885 = ~408
~40800 (H) stu
studen
dents
ts
~ 12,720
BCom
BCom (H) se
seats
ats (Ti
(Tier
er 3) ~320
~32000 Numb
Number
er of st
stud
uden
ents
ts = 320
200*
0*00.8 = ~256
~25600

Credit Cards Issued

Estimate the number of credit cards issued in Delhi per annum
• Population of Delhi : 20 million • No of households = T Total

otal Population/A
Population/Average
verage size of household
• Size of average household : 4 people • No of cards per household is considered by taking an avera
average
ge of all the households (Across all categories)
• Aver
Average
age llife
ife of card = 3 years
years • Considering that all households of high income group of rural population own a card would compensate for multiple
multiple
• Avera
Average
ge number
number of cards / house
household
hold = 1 cards in households
households of high income group of urban population.
• High income and Middle income groups of Urban population • Considering only upper middle income group of urban population owning cards, we ta take
ke 50% of the middle income
and High income group of Rural population own cred
credit
it cards segment for simplicity.
Population of Delhi
Urban (70%) Rural (30%)
High Income Middle Income Low Income High Income Middle Income Low Income
(25%) (55%) (20%) (15%) (30%) (55%)
Population owning credit cards 4 member/family 1 card works for 3 years

= 20 million [ 0.70 ( 0.25 + 0.55 * 0.50 ) + 0.30 ( 0.15 ) ] So, 8.25/4 So, 2.0625/3
= 8.25 million =2.0625 =0.6875
Total
Total Credit cards issued in Delh
Delhii per annum = 6875
687500
00
Part G – Practice Cases


Practice Cases: Table of Contents

S.No. Item Type Page # S.No. Item Type Page #
1. Orchard Farmer Profitability 102 15. Steel Manufacturer Cost Reduction 131
2. Retail Chain Profitability 104 16. Women Apparel Retail
Retail Chain Cost reduction 133
3. Steel Manufacturer Profitability 106 17. Golf Course Pricing 135
4. Pharmaceutical Analysis Profitability 108 18. Paint Manufacturer Pricing 137
5. Power Plant
Plant Profitability 110 19. Hepatitis-B Drug Pricing 139
6. 2024 Olympics Rights Profitability 113 20. Truck Platform
Platform Pricing 141
7. Automobile Company Sales Revenues 115 21. Ride Hailing Helicopter Service Pricing 143
8. Auto Dealership Revenues 117 22. 5G Launch Pricing 145
9. Kids TV Channel Revenues 119 23. Home Automation Market Entry 147
10. Shopping Mall Revenues 121 24. Home Insurance Market Entry 149
11. Apparel Company Cost Reduction 123 25. Gold Mine in Mongolia Market Entry 151
12. Quick Service Restaurant Cost Reduction 125 26. Skin Care Manufacturer Market Entry 153
13. Food Manufacturer
Manufacturer Cost Reduction 127 27. Smart Phone Market Market Entry 155
14. IT Services Cost Reduction 129 28. South African PE Firm Market Entry 157

Practice Cases: Table of Contents

S.No. Item Type Page #
29. Apparel Business Topline Growth 159
30. Appliance Distribution Company Growth 161
31. Gift Card Firm Growth 163
32. Light Bulb Company CS 165
33. Bottling Plant CS 167
34. Telecom Provider CS 169
35. Airline Acquisition M&A 171
36. PE Cosmetics Chain M&A 173
37. FMS Students Falling Ill Unconventional 175

38. Logistics Efficiency Unconventional 177
39. Increase in Road Accidents Unconventional 179
40. Swedish Government Unconventional 182
41. Coffee Shop
Shop Due Diligence 184
42. Fantasy Sports App Due Diligence 187

Apple Orchar
Orchard
d Farmer Profitability | Easy | Bain & Co.
Your
Your client is a farmer who owns an apple orchard. He has seen a reduction in profit in the past year.
year. Find the reasons and recommend
recommend solutions.
Ma
Ma'a
'am,
m, if I unde
unders
rsta
tand
nd corr
correc
ectl
tly,
y, our
our clie
client
nt is a fa
farm
rmer
er wh
who
o owns
owns an ap
appl
plee orch
orchar
ard.
d. He has
has se
seen
en Has there been a major change in the supply demand equilibrium recently?
redu
reduct
ctio
ion
n in prof
profit
it in th
thee past
past ye
yearand
arand I have
have been
been apappr
proa
oach
chedto
edto fi
find
nd the
the reas
reason
onss behi
behind
nd this
this..
As matter of fact, supply has remained same but the demand is decreasing due to unknown reasons.
Yes, you are right. Please go ahead!
I wo
woul
uldd li
like
ke to know
know mor
oree ab
abou
outt the
the fa
farm
rmer
er an
and
d pr
prod
oduc
uctt to un
unde
ders
rsta
tand
nd the
the bu
busi
sine
ness
ss in de
deta
tail
il.. Let me analyse the demand from 4 angles: Awareness, Accessibility,
Accessibility, Affordability, Acceptability. I
Where is he operating? How much land does he own or rent? And is he following any parallel would like to know ifif there have bee
been
n any major changes
changes in these factors.
factors.
sourcee of reve
sourc revenue?
nue?
That’s an impressive way to
way to look at the demand. The farmer is not able to reach the market fluently.
The farmer is located in Northern India and owns 30 acres of land
land dedicated to apple production o
only.
nly.
Oh that seems like there is a problem in the accessibility component of the demand. The major
Okay! To understand the business
business better, I would like to know about competitors and their stakeholders here are the farmer, distributors, retailers and customers. How are the distributors
practices, and understand
understand the chain from the farm to final customers. and retailers performing compared to the previously set benchmark?
Although there are no new regulations in the industry, all farmers have been impacted
impacted and are having a
There seems to be a falling respon
response
se from retailers. Can you think
think of potential reasons fo
forr the same?
tough time. I would like you to list out who the members of the chain in this business could be..
That would be my pleasure,
That would pleasure, Ma’am. I think there would be a system of Distributors to take the Sure, Ma’am. I think there can a be wide array of reasons for potential fall in response. I would like
produce to the retailers
retailers who finally sell
sell it to customers. Or there can be
be wholesalers as well. But to classify them into 2 buckets –
buckets – Direct
Direct Industry and Processing Industry. The direct industry
since apples expire after a short duration, I think they would be directly sold to the customers. would include Modern
Modern Trade, Hotels,
Hotels, Export, Gifting while
while the process
processing
ing industry, includes
includes
That’s right. There are no wholesalers and there are 2 distributors in the chain as well. candies, jam & beverages. Are there any particular complains about any particular product line?
Okay. Apart from direct consumption in raw form, are there any other usage of apple like juices? Yeah, the apple based beverage industry has been hit because o
off the false rumours of alcoh
alcohol
ol present in the
drink. The loyal customer base has decided to move away from the beverages as a result.
Yes, they are widely used in gifting, candies, sweets, jams and beverages.
Well, that’s unfortunate. Have there been
been any steps taken
taken to counter this situation?
That seems to be a really important piece of information
information for the problem.
problem. I think since
since the
Since we couldn’t identify the problem earlier, there were no plans in place. Can you suggest some?
company has observed reduction in profits, I would like to break the profit structure into
Revenues and Costs. Do you want me to look at any particular component first? Since farmer is running the business on his own and the complete industry is fragmented so a
Since farmer is running the business on his own and the complete industry is fragmented so a
common action is less feasible. We can definitely salvage to sustain. Hence we should try finding
I think you can start with revenues as there hasn’t been much changes on the cost side.
other places to sell apples. Maybe export more apples. Assuming apples are unsold, stock apple in
Okay. Revenues can be expresse
expressed
d as Price/unit and total units. Have the prices changed in cold storages for next year. A far reached solution could be having a detailed test done and
recent? publishing results
results in media.
No, the prices have been fairly constant for past 3-4 years. Those are really helpful suggestions. Thank you for your analysis.

Apple Orchar
Orchard
d Farmer Profitability | Easy | Bain & Co.
Your
Your client is a farmer who owns an apple orchard. He has seen reduction in profit in the past
past year.
year. Find reasons and recommend solutions.
Case Facts & Notes Approach Profits
• Context - Farmer in north

India. Owns 30 acre of land Revenues Costs
for apple production only.
• Industry Scenario – All
All
players in the industry
Price/Unit Vol
Volume
ume
impacted.
• Change in Regulation –
Regulation –
None
• Uses - Gifting, Candies, Demand Supply
Sweets, Jams, Beverages
• V
Value
alue Chain
Awareness Accessibility Affordability Acceptability
2 Distributors
Retailers
Customers Far mer Distributors Retailers Customers
Apple based Beverage

Direct Processing industry hit
Recommendations industries Industry
industries Industry
Rumors of alcohol in
•
Try finding other places to sell apple
apple.. Export more apple. •
Modern Trade •
Candies drink have impacted
• Since apples are unsold, stock in cold storage for next year. • Hotels • Jams demand of these
• Export • Beverage beverages.
• Gifting

Retail Chain Profitability | Easy | Bain & Co.
of stores. However,
A chain of retail stores recently increased the number of However, with increase
increase in the stores, the profitability has
has dropped.
I would like to clarify a few things before I start analyzing the case. Average ticket size has remained same though the
the number of customers per store has reduced
Sure. The reduction in number
number of custome
customers
rs could be due to our inability to supply the products or
Can you tell me the type of retail stores we are taking about? Where are they located? And the demand has reduced?
number of stores the chain has with a break-up of new vs old stores? There are no concerns
concerns on supply side, can yo
you
u further investigate demand side of it?
It is general retail store which is operational round the clock just like the chain of 24Seven. All the stores Demand can be impacted due to internal or external factors. Any change in internal policies of the
are in Delhi with 35 stores out of which 5 are new and 30 are existing stores. store?
I follow that the store is in the process of expansion. What are the products being offered by the No change.
old stores? Also, are the products offered in new stores same or different?
The offerings of old
old and new stores are the same. The products offered are packaged
packaged foods, groceries and Any change in landscape?
new player/new Industry
Industry
stores by current has stagnated
players orinchange
or change change in competition
compe
customer’s tition landscape
perception like
like entry of
of the stores?
personal care Industry is fairly growing at 5%. No changes in both competitive landscape and customer’s perception.
Can you tell me about the target customer segment the stores aims to serve? The younger or There is no major change
change in the total number of customers visiting the chain, but 80% of th
thee sales take place
older generation? I believe if its operational 24*7, it is targeted more towards younger generation between 6pm-2 am
Yes, the customers visiting the store are 20-30 years old.
old. That is interesting. Total # of customers visiting
visiting the chain is ssame
ame but # of custome
customerr per store has
Okay. Have the profits gone down or profitability per store reduced? Also, is it just for new stores reduced which means the customers are getting divided into increased stores. Also, the timeline of
or are all the stores facing the same issue? 6PM- 2AM suggest that Stores essentially used for emergency buying post 6pm or for midnight
Profits have gone down, and the problem is with all the stores. cravings.
Are there any recent regulatory changes which
which would hinder operations
operations of retail stores? That’s correct
No change. Do you want to me explore the cost side of it?
I would like to proceed with dividing profit in revenue and cost. Revenue can be further broken Not required as of now. Can you suggest ways to increase the revenue?
down into # of stores and revenue per store. Since the problem is across all the stores, I would Are we open to idea
idea of changes wh
which
ich would require major expenses?
expenses?
not delve on old vs new stores separately. Cost can be broken down into # of stores and cost per No, the client doesn’t want to incur major expenses
store, which could be further broken into fixed and variable cost. Is the structure good to proceed
So, the client can either increase the average ticket size or increase number of customers/store. To
or am I missing something? Also, would you like me to investigate revenue side or cost side first?
increase the average ticket size, We can introduce new product categories like stationery, fresh
The structure looks fine to me. Kindly
Kindly investigate the revenue side.
I can see number of stores have gone up; I believe revenue per store has reduced over time? groceries;To
shopper. start home the
increase delivery in nearby areas
# of customers, for bigger
the client needsorders; & on
to work addmarketing
loyalty programs to regular
campaign &
Yes, the revenue per store has gone down. promote the chain as a day store similar
similar to a kirana store to increase
increase revenu
revenuee during daytime
daytime & to
Revenue can be further broken down into Average ticket size and # of customers? Has there increase revenue post daylight, highlight safety aspects & provide home deliveries.
been a reduction in either of these or both? Sounds good to me. We shall move to the next r ounds now. Thanks for your time.

Retail Chain Profitability | Easy | Bain & Co.
A chain of retail stores recently increased the number of

of stores. However,
However, with increase
increase in the stores the profitability has
has dropped.
Case Facts & Notes Approach Profit
• Company- It is general retail store

chain like 24Seven. All the stores are Revenues Costs
in Delhi with 35 stores out of which
5 are new and 30 are existing stores
stores..
• Products - Packaged foods,
groceries and personal care. # of Stores
Stores ( ) Revenue Per Store ( )
• Customers –
Customers – 20-30 years old
• Regulatory Changes - No Nonene
Average Ticket
Ticket Size Revenue Per Customer (
)
Demand ( ) Supply
External Internal
• New Entrant • Customer Service
• Regulatory Challenges • Product quality & Variety
Recommendations • Industry wide downturn • Interior
• Customer perception • Customer service time
• T
To
o increase the ave
average size, we can
rage ticket size • T
To of customers, we can
o increase the number of • Accessibility • Redistribution of customer
• Introduce new product categories like • W
Work
ork on marketing campaign
stationery, fresh groceries. • Promote the chain as a day store similar to a
• Start home delivery in nearby areas for kirana store to increase revenue during
during daytime
bigger orders. • To increase
increase revenu
revenuee post daylight, highlight safety
• Add loyalty programs to regular shopp
shopper.
er. aspects & provide home deliveries.

Steel Manufacturer Declining Profits Profitability | Moderate | BCG
Your
Your client is a Steel manufacturer observing
observing declining profits from
from the past 2 years.
years. They want you to figure out what is going wrong
So, just to be on the same page, I would re-iterate the problem statement. Our client is a Steel Sir, since the problem is r egarding declining profits, it will involve Micro factors of Revenue & Costs for our
manufacturer facing declining profits from the last 2 years and wants us to figure out the problem. Client & Also other Macro factors such as Political, Economic & Technological affecting the entire industry. I
would first like to look into Macro factors which are affecting the entire industry as a who
whole
le & then narrow
Yes, absolutely right. Go
Go ahead!
down to the Revenue & Cost factors for our client.
Before delving deeper into the Case, I wou ld like to ask a few clarifying questions. Is that fine? Sure, Go ahead!
Sure, go ahead!
Has there been any recent Political, economic or technological change impacting entire steel industry?
In which Geography does the client ope rate? Is there a single plant or multiple plant s?
Yes, indeed. There have been sanctions
sanctions on Iran leading to higher fuel costs & reduced exports & due to cheaper
So, our client operates in India with multiple plants in North, East & South-West. manufacturing , China has flooded International markets with its steel, leading to further reduced demand. There has been
no major economic change in last 2 years.
Also, does the client operate in Upstream, mid-stream or downstream segments of
of Steel
manufacturing? I see. This has led to 10% decline in profits for the steel industry players. But since our client is facing more
T
That’s
hat’s a really nice question. So, our Client is involved in both Upstream & downstream manufacturing. In decline, there are some others factors affecting our client specifically.
Upstream, it manufactures Hot Rolled Steel (HRS) Coils & in Downstream operations, it uses HRS Coils to Yes, indeed.
manufacture further items.
Thank you sir! Do we have any information regarding our Customer segments & their proportion in Since, Profits is Revenue minus Costs. Can you tell me which of these is increasing, decreasing or constant
our business? leading to overall declining Profits.
Yes. So, we have 3 Customer

Customer segments: OEMs (Auto, Appliances)
Appliances),, Trade ( Distrib
Distributors,
utors, SMEs & Retailers) & So, Revenue is declining & Costs are increasing.
Export with a proportion
proportion of 50%, 40% & 10% each respectively.
Sure. I would like to delve first into cost side & like to look into the entire value chain of our client to see what
Moreover, what is happening with our competitors & how is the Overall in dustry performing? are the factors leading to increasing costs. Give me a few seconds to make the value Chain.
Good question! We don’t have data specific to any particular competitor, but the industry is experiencing a
decline of around 10% as compared to 30% decline in profits for our client. Is there anything else you would Yes, the value chain you have made is absolutely
absolutely right. Due to decline in demand for our client, we started defaulting on
our payments 1 year ago. We have 3-4 major Contractual suppliers. The payment has also changed from credit-based to
want to ask at this stage?
advance-based leading to declining inputs, reputation & working capital.
No sir, thank you! Just provide me a couple of minutes to gather my thoughts and analyse the problem.
Sure! I thinks
Unit that’s theAlso,
production. specific problem
since for ourhas
the demand client. Increasing
dipped fuel
our client is &
notfinancing costs have
able to overcome led to increased
increasing cost/
costs. Which
has led to higher declining profits for them. Give me few seconds to come up with recommendations.
Sure. Good job!

Steel Manufacturer Declining Profits Profitability | Moderate | BCG
Your
Your client is a Steel manufacturer observing
observing declining profits from
from the past 2 years.
years. They want you to figure out what is going wrong
wrong..
Case Facts & Notes Approach Profits 30%
• Company - OperOperation
ationss in
India. Plants in North, East, Micro Factors Macro Factors
South-West
• Product - Hot rolled
rolled steel
Revenue Costs Political Economical Technological
Technological
coils. Downstream uses HRS
coils.
• Customers Volume
Volume Price Fuel Costs
Trade Regulation
Regulation Regular global demand China leading due
• OEMs. (Auto, to technological
Major supplies to: Asia
appliances) innovation.
OEMs (50%) Financing Costs/ Pacific, Middle East,
• Trade (Distributors
(Distributors,, Sanctions on Iran Canada Cheaper
Trade (40%) Interest Payments
SMEs, Retailers) manufacturing.
• Export (Distributors)
(Distributors) Exports (10%) Dumping in
• Market is experiencing a 10% Increasing per international
Company started defaulting 1 year ago markets.
decline in comparison to 30% unit cost of prod.
decline to our company. Lead to loss
Working in confidence
Capital depleted in the market
Recommendations Sourcing Inbound Logistics Production Outbound Logistics Customer Pull

• 3-4 Major suppliers
• Focus on customers with higher margins & • Smooth Flow • Capacity: 5.4 MT • Smooth Flow • Down to 3.2MT from 4.3MT
• Raw Materials: Coal, Iron Ore,
• Optimized • No bottlenecks • Optimized • Approx. 25% decline in
lower advance requirements
requirements.. Limestone
• Increasing fuel costs • Under-production • Increasing fuel costs demand
• Contractual Relationship Under production Increasing fuel costs
• Consider changing prices to remain profitable • Increasing per unit production • Reputation on decline
• Declining inputs
•
costs • Credit payment (1 month
Govt. lobbying to curb steel dumping by China. • Declining
suppliers reputation among • Low capacity utilization cycle)
• Moved from credit based to
advance based payment Bigger players have Lower production costs for Competitor
system
their own mines competition due to economies of scale Benchmarking

Pharmaceutical Profit Analysis Profitability | Moderate | Kearney
Your
Your client is a Pharma
Pharma company with $100 million cost of
of operation, distribution
distribution for
for which is Procurement
Procurement cost - $80 million and Overhead
Overhead cost - $20
million. The current profit margin is 5% over cost. The CEO has asked us to increase the absolute profit.
Before we begin, I’d like to confirm my understanding. Our client is a pharma company and
Thank You Sir. I will
will take some time
time to write the equation. Now, our target profit
profit = $13 milli
million
on
wants to increase absolute
absolute profits. Is my understanding correct?
correct?
which can also be written as New Revenue –
Revenue – New
New Cost. If we assume that increase inin revenue is
Yes. First, I would like you to tell me what are the various options to increase profit? x%, there will be a x% increase in variable cost as well. Hence New Revenue = Old Revenue (1+x) (1+x)
= 105(1+x) and New Cost = Fixed Cost + Variable Cost(1+x) = 25 + 75(1+x). RHS = 105(1+x)-
105(1+x)-25-
25-
Sure. Since Profit is Revenue –
Revenue – Cost,
Cost, we can either increase revenue, decrease
decrease cost or 75(1+x) = 5 + 30x. LHS = Target Profit = $13 million. Equating RHS = LHS we get x = 8/30 and
increase revenue and decrease cost simultaneously.
simultaneously. hence new Revenue = $133 million.
Good. Now that you have explored both the option, I would like you to tell me which is the best option for
Good, Let’s say in the firs t scenario we explored the second option and were able to decrease the the company to implement.
procurement cost by 10% while keeping the revenue constant. Now I want you to give me the increase in
Revenue that will lead to same increase in profit as in the first scenario.
I would suggest the company to go with decreasing the cost, since decreasing cost is
something that company can control. On the other hand, increasing revenue depends upon market
From the question we can calculate the current absolute profit as 5% of $100 million = $5 and
and various
various other conditions
conditions which are not in company’s
company’s control.
million. After the procurement cost decreased by 10% i.e $8 million, there will be a net increase in
Profit leading to the total absolute profit of ($5 million) + ($8 million
million)) = $13 million. Now for the
How will you suggest the company go with reducing the cost?
second scenario
million. Revenuewe
Revenue need per
is price to increase the revenue
unit * number insold.
of unit a wayHence
that the
wefinal
can profit
eitherequals to price
increase $13 or
we can increase
increase the number of units sold
sold.. Which option would you like me to explore.
explore. A pharmaceutical company incurs
incurs different cost lik
likee R&D, manufac
manufacturing,
turing, distribution,
sales promotion, administrative and external serservice
vice cost. Since, I have had an experience of
working on sales strategy for Pharma client; I would like like to start with sugges
suggesting
ting cost reduction in
As you know price of drugs are regulated by governme
government
nt and other bodies it w
will
ill be difficult for us
sales promotion. We can look into 1) retargeting the physicians reachedreached to make sure we are
to implement. Let us explore the
the second option.
reaching the physicians who have higher potential for writing our drugs 2) resizing the number of
sales representative on field to ensure optimal expenditure 3) realigning
realigning the representatives to
When we look into
into increasing the revenue
revenue by increasing
increasing units sold,
sold, our variable cost will
will ensure maximum and more effec
effective
tive reach to the physicians.
also increase. Hence,
Hence, in order to evaluate the same I would like to know the distribution of cost
across variable and fixed costs.
Good. I think we can wrap up the case here. Thank You.
Variable cost is 75% and Fixed is 25% of total cost.

Pharmaceutical Profit Analysis Profitability | Moderate | Kearney
Your
Your client is a Pharma
Pharma company with $100 million cost of
of operation, distribution
distribution for
for which is Procurement
Procurement cost - $80 million and Overhead
Overhead cost - $20
million. The current profit margin is 5% over cost. The CEO has asked us to increase the absolute profit.
Case Facts & Notes Approach
Old Profit = $5 million New Profit = $13 million
• Context – CEO of a
Context – CEO
Pharmaceutical company
wants to analyze options for Old Revenues = $105 million Old Costs = $100 million
increasing profit
• Cost – Procurement
– Procurement Cost =
$80 million and Overhead
Cost = $72 million Price/Unit Volume
Volume Overhead Procurement
• 1st scenario: Cost Cost Cost
– 10% decrease in
reduction – 10%
2nd Scenario
Scenario –
– Revenue
Revenue Increase keeping Fixed Cost constant
procurement cost
• Final Target Profit – ($5 +
Profit – ($5
= $20 million = $80 million
$8) million = $13 million Target Profit = New
New Reven
Revenue
ue –
– New
New Cost (10% decrease)
Revenue Increase – x%
Increase – x% 13 million = Old Revenue (1+x)
(1+x) –
– Fixed
Fixed Cost –
Cost – Variable
Variable Cost (1+x)
•
13 million = 105(1+x) –
105(1+x) – 25
25 –
– 75
75 (1+x)
= $72 million
increase in revenue leads to
x% increase in variable cost 13 million = (5 + 30x) million
• Fixed Cost = $25 million x = 88/30
/30
• Variable Cost = $75 million Hence, New Revenue = 105(1+8/30) = $133 million 1st scenario
scenario –
– Cost
Cost decrease keeping Revenue Constant
Recommendations
• The new revenue to reach target pro

profit
fit of $13 million is $13
$1333 million
• Cost reduction (in company’s control) is a better alternative than increasing revenue (which depends on market)
• In order to reduce cost –
cost – reduce
reduce cost incurred
incurred in sales promotion - Retargeting, Resizing and Realignment

Power Plant Declining Profits Profitability | Moderate | BCG
Your
Your client is an Electricity Power
Power plant that
that has been experiencing
experiencing a dip in profit for the last
last 3 months. Find
Find out the reason and provide solutions.
solutions.
I would like to ask a few clarifying questions.
questions. What kind of electricity generation
generation plant is charged for coal, increase in quantity of coal bought or increase in any shipping cost incurred
it? Thermal, Solar, Hydro
Hydro or any other kind. Where is the plant located? Is it facing this problem to bring in the coal to the plant.
in multiple locations? Who are the customers? Is there any competition? If yes, are they also facing
a decline?
decline? Yes, the plant has been buying
buying extra coal for the last 3 months.
It is a coal gasification plant located in Pune. The direct customer is the government, which then distributes
the electricity to all the customers of Pune. There is no competition. That is interesting. I observe that there is no increase in revenue
revenue which means the amount
amount
of electricity the client is producing has remained
remained same but the amount of coal coming in has
Okay. I have two questions here. What is the difference between a thermal plant where coal increased. Am I correct in my assumption? If yes, may I know where is this extra coal being used?
is burnt and the heat is used to cre
create
ate steam which
which then rotates the turbine and a coal
gasification plant? Is the company under any contract with the government for providing electricity
You are right. We were not able to produce
produce the same amount of electricity
electricity with the initial amount of coal
coal
and if so, have there been any changes
changes in the contract in the last 3 months.
that was coming in. Hence, we have started buying more coal. Can you find out the reason behind this
increased requirement of coal used in the plant?
In a coal gasification plant,
plant, the ashes or small sized coal is removed and the remaining coal is burnt slowly at
a controlled temperature. The gas generated through this is used to rotate the turbine. The company is in a
yearly fixed
yearly fixed contract with the government. However, there haven’t been any changes in the contract. Sure. I could think of three possible reasons. 1. The quality of coal incoming has deteriorated
Thank you for the information.
information. When we talk about declining profits, we relate it to either increase which can probably be due to the increased humidity in Pune, 2. The electricity
electricity generation
procedure has lost its efficiency because of mal
malfunctioning
functioning of a machine
machine or reduce
reducedd capabilities of
in revenues, decrease
months? decrease in costs or both. May I know the status of the revenue and cost in the last 3 the labor employed or 3. There could be an increase in wastage of coal in any stage of electricity
generation starting from procuring raw material to distributing the electricity. Let me know if
Revenue has remained the same but the Cost has increased. there is any other reason
reason that I should explore.
Okay, so I would like to branch out different types of costs and analyze the area where we have
seen an increase in cost. The quality of the coal procured and the efficiency of
of process is intact. However,
However, we have observed
Sure, go ahead. wastage in the coal.
The different types
types of costs are Raw Material Cost which is coal in this case,
case, Manufacturing cost
cost or Okay. So now, I would like to analyze the journey of coal. The stages that the coal goes through
cost involved in producing electricity, Labor
Labor cost, Rent and Utilities cost and other miscellaneous
miscellaneous
costs which include administrative, selling and advertising expenses. Have we observed increase in before finally
station getting
to other converted.into
and Processing
Processing. Mayelectricity
I know inare Procurement,
h particular Storage,
which
whic stag Transportation
stagee have from one
we observed an
any of these costs? increase in coal wastage?
Yes, the total raw material cost has increased.
increased.
Okay, so if there is an increase in Raw material cost then it can be either due to increase in Price Please focus on the storage stage.

Your
Power plant that
last 3 months. Find
solutions.
Alright. If there has been an increase

increase in wastage of coal in the storage stage, I would li
like
ke to
know how do we store the coal, what is the process followed to put in and then retrieve the coal
and if there has been any significant
significant changes to the way the coal is stored as compared to how it
was stored 3 months back.
The coal is stacked one above

above the other in a warehouse. 3 mo
months
nths back the way the coal is taken
out changed from LIFO to FIFO. Can you think of a problem arising due to this change?
Since coal is not a perishable commodity, I don’t think there will be any affect on the quality
of coal even if it gets stored for extra time. Considering
Considering that the coal is stacked one above the
other, changing the process of retrieving the coal from LIFO to FIFO can probably lead to
breaking or crushing of coal at the lower end due to more unnecessary mov movement.
ement.
Yes, you are right. Crushing of coal

coal is leading to an increase in wastage of coal. Can you provide some
solution
solution for the same.
Sure. I have 3 recommendations on how to reduce the wastage of coal - 1. If it is possible, let
us change the procedure of retrieving coal back to LIFO, 2. We can change the way coal is stored
like creating separate bunches of coal to avoid breakage of coal, 3. Optimize the amount of
coal ordered every day, so that the amount of coal stored everyday decreases. I have one
more recommendation which
which will help us increase the revenue.
Sure, What do you have in mind?
The ashes or small

small sized coal due to breaking or crushing
crushing can be sold to thermal power plants
as their process of electric generation includes
includes crushing of coal.
Amazing! We can wrap up the case now.

now. Thank you.

Your
Power plant that
last 3 months. Find
solutions.
• Company – Power
Power Plant in
Pune Revenue Cost
• Customers –
Customers – Direct customer
is government which
distributes to the city of Pune. Raw Material Manufacturing Labor Rent & Utility Miscellaneous
•
Fixed yearly contract.
Competition
Competition – – No
competition. Monopoly Price Quantity Shipping Selling
• Procedure –
Procedure – Coal Administration
Gasification plant burns ash- As initial quantity was not enough to Advertisement
produce same amount of electricity
free, big lumps of coal in a gas
fire at a controlled
temperature.
Quality deteriorated Efficiency of procedure decreased Wastage o
off coal increased
Procurement Storage Transfer Processing
Recommendations • Buying the coal • Coal stored in warehouses • Moving the coal from • Remove ash content.
• Unloading the • Coal is stacked up one one station to other Minus sized coal is
coal above the other • Conveyor belts used to removed
• Change the procedure of retrieving coal back to LIFO if the • Moving to storage • Process of retrieving the transfer the coal • Gasifier –
Gasifier – Burn
Burn the coal
reason for change is not a constraint. • No issues in this coal changed from LIFO • Smooth process, No at a low temperature
temperature in
• Change the way coal is stored, like creating separate bunches of stage to FIFO issues here a controlled way to get
coal to avoid breakage of coal the maximum gas to run
turbine
• Optimize the amount of coal ordered every day day,, so that the amount Coal at the lower end of stack
of coal stored everyday decreases.
decreases. gets crushed and breaks.
• Sell the broken or minus sized coal to other thermal plants Hence more wastage

2024 Olympic TV Rights Profitability | Hard | McKinsey
Your
Your client is a major TV Network,
Network, wants to know how much to bid on the TV rights
rights for the 2024 Olympic
Olympic Games. Bid is to be paid in 2019.
Sir, just to be on the same page, our client is a TV network company, which wishes to bid for the The duration of the Games is 16 days. This comprises of one
one day each for open
opening
ing and closing ceremo
ceremony
ny
2024 Olympics Games
Games TV rights. I have to help them figure this amount in 2019. I would like to and 14 days of events.
ask some clarifying questions.
And can I assume
assume that Opening an and
d closing ceremony
ceremony will have
have higher vie
viewership.
wership. Even certain
Yes, you are right. Go ahead! times of the day and events will have higher viewership than other and we consider that in our
pricing model?
model?
What is the objective of this bidding?
Yes, you are right. Event Broadcast timings- a) Weekdays: 9am –
9am – 12
12 pm
pm,, 2pm
2pm – 5pm,
– 5pm, and 11 pm. b)
For a TV network the objective is to maximise profits.
Weekends: 11am –
11am – 9pm.
9pm. Duration of opening & closing ceremony: 3 hrs each
Okay, then we will have to look at costs of bidding and revenues we can generate from the
Okay, and how much are we charging per ad to customers. Also, since its Olympics I will assume
telecast. Can I assume that advertisements on the channel is the major source of revenue?
all slots will be filled.
Yes, they will only show the Olympics on their
their one flagship channel.
channel.
• Ad costs:
costs: $400K/30 seconds during prime time and half of this ($200K/30) during non-prime time.
And in what region are we planning to telecast the Olympics.
Olympics. • Prime Time is considered anytime after 7pm on a weekday, and all day during the weekends.
• Ad duration: 10 min/hour
Good question. Consider USA. • Opening and closing ceremony ads costs 50% above primetime costs
Okay and Can I assume that Olympic programming will replace regularly
regularly scheduled
programming. Okay based on the above data, the revenue come out to be $952M. Total costs are $500 + 146 hours
* 1M/hour = $646M. Thus the profits come out to be $306M. So we can bid anything below $306M.
Yes, Go ahead!
Okay for exact calculation of the advertisement revenue I will need specific data related to Are you forgetting something?
Olympics, so we will come back to it again. I would like to explore costs first. Do we have any
Oh yes, the bid is to be made in 2019. These profits are in 2024. So we will have to discount them to
data for coverage costs?
present value. Do we have the value
value for cost of capital?
Consider all costs associated with coverage are $500 Million
Take Cost of Capital as 10%.
10%.
Okay. Should I consider other costs too? Like opportunity costs of missing out on other content
and revenue from them? Based on this, the bid price shouldn’t be greater than $190M in 2019.
Yes, consider opportunity costs too. The value is $1M/hour. Good! It was nice doing a case with you. You may go now!
If that all on the cost side. I would to move to revenue side. How long are the Olympic game
games?
s? Thank You!

2024 Olympic TV Rights Profitability | Hard | McKinsey
Y
Your
our client is a major TV Network,
Network, wants to know how much to bid on the TV rights
rights for the 2024 Olympic
Olympic Games. Bid is to be paid in 2019.
Case Facts & Notes • Opportunity Costs from Approach Evaluating the costs Costs will also include opportunity Using Time Value of Money(TVM) concept
and the revenues. cost arising from other programs to adjust for prepayment in 2019
other programming: $1M
• Objective – For
– For a TV network / hour
the objective is profits. • Ad costs: $400K/30 Profits
• Revenue Sources-a) seconds during prime time
Advertisements
Advertisem ents on the channel and half of this ($200K/
($200K/30)
30)
Costs Revenues
is the major source of revenue during non-prime time.
• •
•
Region - USA
Duration of the Games- 16 Prime
anytimeTime
afteris7pm
considered
on a
days. This comprises
comprises of one weekday, and all day during
weekday, during Coverage Cost Opportunity Costs Advertisement Revenue
Revenue
day each for opening and the weekends.
closing ceremony and 14 days • They will only show the Million: includes all fixed and
$500 Million: Million/hour: Total opportunity
$1 Million/hour: Total Revenue from primetime + Non
variables costs for travel, equipment, costs= 146 hours* $1 million primetime + Ceremony hours =
of events.
events. Olympics on their one
salaries, etc. =$146
=$146 Million $640M+$240M+$72M= $952M
• Event Broadcast
Broadcast ttimings-
imings- a) flagship channel
W
Weekdays:
eekdays: 9am –
9am – 1212 pm, 2pm • Ad duration: 10 min/hour
– 5pm,
– 5pm, and 7-11 pm. b) • Opening and closing
W
Weekends:
eekends: 11am
11am –
– 9pm
9pm ceremony ads costs 50% Slot Total no. of hours Re
Reve Aed (per
venu
nue (per Ad
Minutes Total Ad revenue
• Olympic programming will above primetime costs min.)
replace regularly scheduled • Duration of opening &
Primetime 4*10+4*10=80 $800K 800 800*0.8=$640M
programming. closing ceremony: 3 hrs
• Costs associated with each Non Primetime 6*10= 60 $400K 600 600*0.4=$240M
coverage: $500 Million • Cost of Capital : 10%
Ceremony 3+3=6 $1200K 60 60*1.2=$72M
Total
Total Expected Profits
Recommendations TVM concept: Profit Calculation in 2019:
= Revenue
Revenue - Costs Profits have been calculated in 2024 Profits in 2019 = Profit in 2024
To earn a profit, the bid amount should be less than = $952M-$146M-$500M= $306M Since bid amount paid in 2019, these discounted 5 times
$190M. need to be discounted to present value. =$306M/(1.1^5) =$190M

Automobile
Automobile Compan
Companyy Declining
Declining Sales Revenues | Easy | Bain & Co.
You client is an automobile company

You company experiencing
experiencing lower sales recently.
recently. Figure
Figure out the problem
problem & suggest
suggest ways to increases
increases sales in the next 3 months
months
So, just to clarify, I would re-iterate the problem statement. Our client is an automobile company
facing declining sales recently
recently & they want us to find out the problem & suggest ways to increase Sir, since this is a case of declining sales, it will have two components: Quantity sold & Price/Unit.
sales in next 3 months. Do we have any information regarding which of these have changed, i.e., either increased, decreased
or remained constant in last 3 months?
Yes, absolutely right. Go ahead!
Sure! So, the quantity sold has gone down in last 3 months & the Price/ Unit has remained unchanged.
Before delving deeper
deeper into the Case, I would like t o ask a few clarifying questions. Is that fine?
Since the quantity sold has declined, it can be due to either a supply side issue or a demand side
Sure, go ahead! issue. What is the case with our client?
Does the client operate only in India & are there any other operations run by the client? Yes, good observation. You can consider
consider it a demand side issue.
So, the client only manufactures personal cars. It is based out of India & serves Indian market. Thank you sir! So, the demand side issue
issue can be further segmented into
into 2 segments of M
Marketing
arketing &
Customer pull. Do we know on which of these two fronts our client has not been performing well in
Also, since when
when is the client facing
facing this problem? last 3 months?
Since last 3 months. Yes! Consider it to be related to Customer

Customer pull issue.
Thank you sir! Do we have any information regarding what kind

kind of different products our client So, we can divide Customer pull issue into four issue of Product visibility, Product likability,
manufactures? Affordability & feasibility.
feasibility. So, doe know
know which of these four factors related our client’s product is
affecting the client’s customer segment?
Yes! So, the client manufactures only
only a single product, i.e., Single model
model of a Single type of car.
That is quite insightful. Yes, the issue is related
related with the product feasibility.
One last question. Do we know about the presence of the client in its value chain? I mean in
which all segments
segments of the automobile
automobile value segment
segment the client
client operates? Since the automobile sector is highly regulated, is t here any regulatory issue that our client is facing
Good question! So you can consider that the client operates all across a general automobile value chain due to which the product feasibility is impacted?
from manufacturing till after sales services. Yes, the Government has announced
announced to introduce BS VI regulations soo
soon
n encouraging peopl
peoplee to stop buying
Sure sir, thank you! Just provide me a couple of minutes to gather my thoughts and analyse the for now and wait till later when the company will give heavy discounts. Do you have any r ecommendations?
problem. Yes Sir! Since we have a target to increase sales in next 3 months, I can come up with
with following two
Sure! recommendations.
recommendation s. First, Client shalland
focus on exporting
making sales through billing earlier receiving moneyitslater.
product
This& second,
will result it
t oshall focus
increase inon
sales
Good job! Looks good to me. Hope to see you in the next round.

Automobile
Automobile Company
Company Declining Sales Revenues | Easy | Bain & Co.
Y
You
ou client is an automobile company
company experiencing
experiencing lower sales recently.
recently. Figure
Figure out the problem
problem & suggest
suggest ways to increases
increases sales in the next 3 months
months
Case Facts & Notes Approach Sales
• Client-
Manufactures Personal Cars
•
Quantity Price
Based out of India, serves
•
India
• Product- Supply Side issue Demand Side
•
Single Product, i.e., Single issue
Model of a Single Car
Marketing Customer Pull
• Period- Since last 3 months
• Value
Value Chain- Visibility Likability Affordability Feasibility
Present across the general
•
automobile value chain Regulations
Government has announced to introduce BS IV regulations soon encouraging people

to stop buying for now and wait till later when the company will give heavy discounts.
Analysis Recommendations
• The company can improve

improve sales by foc
focusing
using on the 4Ps
• Focus on exporting the Products
• Product: Modifying the product to conform to BS IV nor ms
• Making sales through billing earlier and receiving money later. This will result to increase
• Price: Introducing discounts
discounts right now on non BS IV compliant models
• Promotion: No change in sales.
• Place: Reaching more dealerships,
dealerships, if possible
• Also current strategy
strategy is not able to make the product reach th thee people in time.
• Problem is stock is present but it is difficult to make the stock reach people in short amount of time.

Auto
Automobile
mobile Dealership
Dealership Revenues
Revenues | Easy | BCG
Your
Your client is an owner of automobile dealership in Delhi NCR
NCR and is experiencing
experiencing flat sales. Find reasons and give recommendations.
So, our client is an owner of automobile dealership

dealership in Delhi NCR who is experiencing flat sales
sales Is this a supply side problem or a demand side problem, as in is our client not being able to serve
and I need to find reasons for the same and give recommendations to solve the problem? customers because of constraints or there are not enough customers in the first place?
Yes It’s a demand side problem, number of customers of the client has not been growing
Sir I would like to ask a few clarifying questions. Since we already know that the demand for these particular brands is high and other distributors are
doing well, the problem has to be internal. So should I look into these factors?
Sure, go ahead!
Yes
What does
where is thethe client’s
dealershipbusiness
dealership look
located and
an like,is
d what what
the kind ofdealership?
size of services are provided by the client and Well, the different
different factors that can effect
effect the customer experience
experience in
in a premium car dealership can
include things like the location, aesthetics, operational hours of the showroom, sales personnel skills,
Apart from selling cars in the showrooms
showrooms the client provides post sales car
car servicing and the client ha
hass 10 quality of post sales services. Do we have a measure of these things for our client?
sales showrooms and 4 service showrooms spread across Delhi NCR.
The client has a customer feedbac
feedbackk program and customer feedback has dropp
dropped
ed and post sales
What is the product mix of the client? servicee quality has dropped
servic dropped acco
according
rding to the feedback.
feedback.
The sell Skoda and Audi cars, both Volkswage

Volkswagen
n brands and they deal in th
thee premium segment of car Scores on surveys taken at the dealership have droppe
droppedd and post sales service quality has dropped.
dropped.
market This could be due to multiple reasons,
reasons, like Quality of salespeople h
has
as dropped or they have not been
trained
trained properly
properly or process of providing
providing se
service
rvice ha
hass become
become obsolete
obsolete or has been altered
altered wrongly
wrongly
How longwide
industry the client hashas
problem, been facing
there this
been problem
changes
change s in and how is the
government competitive landscape, is it a
regulations/laws?
regulations/laws? Yes, these are the reasons the quality of po
post
st sales services has dropped, can
can you suggest ways to improve this?
The client has been facing this problem since the past two years and it’s not an industry wide problem,
To increase the quality
quality of after sales service the cclient
lient can retrain sales and service
service staff, the client
client
there has not been any change in the government regulations/laws.
can link bonuses/
bonuses/ incentives to deale
dealership
rship survey scores
scores for all employees of dealership, so that they
Is our client the only distributor of these cars in the city or are there other dealers as well
well,, and have a stake in the overall performance of the dealership. The client can review the current practices
how are these brands performing in the market, if there are other dealers for these brands as well for after sales services and compare them with historical trends, if they are not upto the industry
are they facing the same problem? standards the client should improve that as well
Yes, these recommendations sound good.
There are other
other dealers aredealers as well
not facingwe ll insame
the Delhi NCR, the brands themsel
problem. themselves
ves are strong and performing well and
Thank you! Just provide me a couple of minute of gather m

myy thoughts and analyse
analyse the problem.

Automobile Dealership
Automobile Dealership Revenues
Revenues | Easy | BCG
Your
Your client is an owner of automobile dealership in Delhi NCR
NCR and is experiencing
experiencing flat sales. Find reasons and give recommendations.
Case Facts & Notes Approach Factors that contribute towards Sales
• 10 Sales Showrooms and 4
Service Showrooms
Internal factors
External Factors ( Macro)
• Sells cars of Volks
Volkswagen,
wagen, Sko
Skoda
da (specific/micro)
and Audi (premium) Surveys( paper forms/ at the showroom)*
Customer Feedback Demand of Cars
Tele-calling ( 7-14 days
days after sale)
• 2Sales flat across the board from
years Doing things differently: payme
payment
nt
Sales Personnel Skills Questionnaires through mobile/email Competitions options, margins, skills
• Not an industry
industry wide problem Post sales maintenance support (car service)
Aesthetics Customers Target group, buying patterns
and no change in fuel prices. Online Reviews: Justdial, Sulekha etc.
• No Regulatory Changes have Location
taken place
Hours of Operations
• Identify Reasons/caus
Reasons/causes
es and
give recommendations Employee
Compensation
s Possible Reasons
e
s
u 2nd Level: Quality of sales people has dropped/ have not been
a 1st Level:
C Scores on surveys
surveys taken at the trained properly
t Customer Feedback has
o dealership have dropped. Change in process of providing service has become
o dropped
R Post sales service quality has dropped obsolete/ has been altered wrongly
Recommendations
• Retraining of sales and service staff
• Linking bonuses/ incentives
incentives to dealership
dealership survey scores for all employees of dealership
• Review of service process and quality with comparison
comparison to history and current trends

Kids’ TV Channel

Revenues
Revenues | Easy | Kearney
Our client is a Kids’ TV Channel that is facing a dip in revenues and advertisers are moving out of contracts. Help them fix their problems.
Okay, so just before we begin, I’d like to confirm my understanding. Our client is a Kids TV Yes, that’s absolutely right! You can divide fee
fee you mentioned regarding subscrib
subscribers
ers and time into two. One
Channel that has declining revenues & advertisers are moving out of contacts. We’ve been hired to is a regular TV Show fee that has to be given to a channel for choosing a particular slot, while the other is a
solve this issue? Right? distributor fee charged per subscriber.
Yes, that’s right. Okay, thank you. In the past few years has any one of these streams specifically taken a hit?
Okay, then in that case I would like to ask a few clarifying questions. Yes, distributor fee has reduced.
Sure, go ahead! I can think of t wo reasons for that to happen. Either our subscribers have decline
declined
d in number or
we’ve reduced
reduced our distribution fee per
per subscriber.
Where is the Channel
Channel based out of and vi
viewed?
ewed? Since when are they facing
facing these issues?
issues?
Yes, you’re right. Our subscriber-base
subscriber-base has declined.
The channel is based in the US and it’s an add
add--on channel that doesn’t come with the regular package. This
issue of declining revenues has been prevailing since the past couple of years. Okay, so I will try and enlist the reasons for this. These can be internal or external. By internal, I
mean it can be that our content quality has reduced or we’re having too many ads causing viewers
Thank you sir! Regarding
Regarding the problem
problem – Are
Are our competitors
competitors also facing the same issue
issue?? to shift while by external, probably our competitors have launched a new show or service or
customer preferences are changing.
Not really. Some of our competitors are doing fine while some have also faced a hit like us.
Internally, nothing has changed. But you’re r ight about the competitors doing things differently. They’ve
Okay, then in that case I think we should see what are the different revenue streams for our
channel that have taken a hit and then view what are the competitors are doing differently in terms launched an On Demand Video Service
of those revenue streams. Is that fine? That explains a lot. It could
could be the case that subscribers
subscribers must have shifted to this new service.
service. Not
only this, the general shift of preferences is also towards internet based entertainment. If we could
Yes, that seems to be a fair approach.
approach. Go ahead. also launch such a service, our revenues might regain momentum. We could also compensate lost
Thank you! Then first,
first, I’d lay out the different
different revenue streams
streams I believe
believe the channel has and then revenue by focussing on other things like merchandising, altering the show mix and increasing
we could look into the specifics? advertisements on different areas of the screen.
Yes, that’s absolutely right. These sound like good suggestions. Could yo
you
u calculate what monetary benefit
Sure
we might gain on launching
launching this new service?
Okay, so according to me, I can currently think of four different areas from where the channel Sure, sir. If I consider one show with 9 seasons and 22 episodes per season which is the general
could earn money. Please correct me if I’m wrong. I think there is advertising revenue for sure also
case, we can multiply that to the average viewers per episode and per subscriber fee to get total
a fee must be charged from the channel’s end to package and air the content based on t he no. of
benefit. Is that sufficient or I should get into the specifics?
subscribers and timing of the show. Lastly I think there must be some indirect sources too like
merchandising etc. That sounds good, it should suffice.
suffice. Thank you!

Kids’ TV Channel

Revenues
Revenues | Easy | Kearney
Our client is a Kids TV Channel that is facing a dip in revenues and advertisers are moving out of contracts. Help them fix their problems.
Case Facts & Notes Approach Advertising

# of subscribers
• Kids TV Channel based in US
• Facing these problems for past Distributor fees
Distribution fees per
couple of years Revenues
subscriber One of the direct competitor has
• Add-on channel
channel (not a part of Merchandising
regular channel package) started an on-demand video
service which has captured some
TV show fees of our client’s viewership onto its
Channel Roles:
Relevance own channel (root cause).
Related to content
Content Creation Internal factors Quality
(company specific) There is a general trend of
Content Packag
Packaging
ing Not re
related to
to cco
ontent Ad vveer ti
tisements shift of preferences of today’s
# of subscribers kids towards other sources of
Content Distribution Direct (related to other entertainment like Xbox,
External factors competitors) internet-based entertainment
(industry specific) sources like Netflix, YouTube
Indirect (PESTLE) etc.
Recommendations Benefit of Introducing an on-demand video channe

channel:
l:
Total
Total benefit = (Price char
charged)
ged) × (Average viewership per
per episode) × (No. of
1. To tackle the root problem, w wee can launch a on-demand video
video service on our
our channel episodes/Season)* (No
(No of Seasons)
2. We can also circumv
circumvent
ent the root problem by compensating the lost revenu
revenuee from other .
sources of revenues
revenues.. Suggestions for this could be Price charged: $4 per subscriber Average viewership: 10000 per episode
a. Focus
Focus on merc
merchandi
handising
sing revenues
revenues No. of episode in one season: 22 No. of seasons: 9
b. Changing show
show mix by introdu
introducing
cing popular shows at prime time
c. Intr
Introduc
oducing
ing adve
advertise
rtisement
mentss in screen heade
headers
rs and footers
footers Total
Total benefit: $7.92 m
million.
illion.

Shopping Mall in South Delhi Revenues

Revenues | Moderate | BCG
Your
Your client operates
operates a shopping mall in South Delhi. They want to increase their advertisement
advertisement revenue
So, just to be on the same page, I would re-iterate the problem statement. Our clie
client
nt operates Allotted space can
can be divided into space
space optimization & new space. WeWe consider gross revenue/space
a shopping mall in South Delhi & wants to increase their ad revenue. from existing spaces used for advertising & optimize use looking in visibility & footfall. We can optimize
ad mix/year & charge more for spaces with high visibility & footfall. For new space, we look into
internal (elevators, washroom, etc) & external spaces (Parking lots, rooftops, etc.)
deeper into the case, I would like to ask a few clarifying questions. Is that fine? This looks good. Go ahead!
ahead!
Sure, go ahead! Ad revenue/unit

revenue/unit space can be divided into new categories,
categories, new methods & pricing models. We can
hold entertainment/ festival events. We can advertise on kiosks, uniforms, sign boards, foot-maps, etc.
How big or popular is this shopping mall & what is the proportion of ads in its revenue? This looks interesting.
So, it is one of the largest & most popular malls in all of Delhi & ads have currently 8% revenue share. In new methods we can include digital screens. Ads will be replaced easily & take less space. We can
use customized kiosks to handle basic level exhibitions. This will take less space & increase revenue
Also, What are the
the various categories
categories of Ads that our client
client indulges in & who are its clients /space. We can look into pricing model too. It has 2 challenges: right price & convincing clients. We
for these ads? shall link prices to response of mall consumers to extract maximum revenue potential of ads.
That’s
That’s a good question. So, you can consider the ads categories to be firstly, Displays which are either These are really good insights.
insights. What about the % utilization?
billboards or standees & secondly, some events/exhibitions held in the mall. We have both internal as
well as external clients.
clients. Internal clients are in-mall outlets. External clien
clients
ts include exhibitions held by Yes sir. So, % utilization can be further segme
segmented
nted into client management
management & maintenance
maintenance of sspaces.
paces.
car or other vehicle dealers & other events being held by some various fir ms & organizations. In mall- Under client management, we can start doing e-listing of spaces for external clients & use separate
outlets are more frequents clients & events are least frequent. internal platform for internal clients. We can offer packaged offerings to our clients such as fully
managed events/exhibitions
events/exhibitions etc. We also shall look into data with respect to client exposure.
Thank you sir! One
One last question. How do we benchmark our ad revenues?
revenues?
This looks good to me. On
On what factors do you think choice
choice of ads for our cli
client
ent will depend?
So, we benchmark it with similar businesses, Past ad revenue numbers & also compare ad revenue
between different ad categories. So the choice will depend upon various like medium of advertisement, associated cost, potential
exposure to the customers, relevance of ad for the mall audience, middle agencies involved & ease of
Ok Sir. Just provide me a couple of minute of gather my thoughts and analyse the problem. implementation.
Sure! Good Job! Hope to see you in the next round.
So, Ads revenue will depend upon 3 factors: Allotted space, average revenue/ unit space & %
utilization. I would like to look into t hese factors one by one & suggest ways of increasing
overall revenue using these. Is that fine with you?
Sure! Go ahead.

Shopping Mall in South Delhi Revenues

Revenues | Moderate | BCG
Your
Your client operates
operates a shopping mall in South Delhi. They want to increase their advertisement revenue
Case Facts & Notes Approach Ad Revenue
• Shopping Mall – One
– One of the
largest & most popular in Delhi. 
Categories
Allotted Space  Average Rev
Revenue/
enue/ Unit Space  % Utilization
Facilities,, Customer base, etc.
Facilities
• Current Status – 8%
– 8% revenue
share for ads. Categories: Space Optimization New Space New New Pricing Client Mgmt. Maintenance
Displays (Billboards /Standees).
Events/Exhibitions. Categories Methods Models
• Benchmarking with: Basis gross Entertainment/Festi Digital screens Two challenges: E-listing of spaces: Reduce
Inside Outside
Competitors,, Similar businesses
Competitors businesses,, revenue/area val Events to replace Understanding External clients downtime
Past numbers, Between (Sponsors to cover billboards right Price & between
Optimum mix across Elevators Parking Lots cost plus margin) Convincing Internal Platform: In- switching ads
Categories Road facing billboard
year that takes into Washrooms Kiosks Kiosks clients house clients (e.g. digital
account latest revenue Escalators spaces Uniforms/ customized to instead of flex
• Clients: performance, seasons Security check Rooftops Supplementary handle basic Link pricing to Packaged offerings. e.g. boards)
•Mainly In-mall outlets e.g. festivals External Walls consumer goods e.g. level consumer fully managed
Employee Uniforms
•Car dealers in exhibition These are areas Parking lots are bags/water glasses/ exhibitions response to events/exhibitions Keep spaces
Space categorization: underutilized. Road receipt slips etc. extract revenue clean,
•Events: wide base, less which are tricky to facing billboards
Basis visibility, Foot-maps, to max potential. Reporting impact: Data decorated,
frequent Footfall etc. use but see high attract maximum Signboards etc. wrt. Client exposure. accessible etc.
footfall too revenue Ad/ forecasts for same
Supplementary Aspects How clients choose between two Ad options Analytical Pricing Model for
for an Advertisement
space
Important Factors Price = f internal (Location, Size, Medium, Function relating these parameters can be derived based on:
Nature of offering: Medium of advertising Internal cost,

f external Time,Mall
(Season, Special Features) +
popularity, Existing data such as footfall etc. ( Better collection of data
Price: Cost associated with options
Competition) is essential)
Reach: Potential exposure to consumers
Competitive Benchmarking with similar businesses e.g.
Relevance: Between their business & mall audience
Gaming Arcades
Middle Agencies: Have significant influence on their final choice
Understanding Elasticities basis operational experience
Ease of implementation: Critical when it comes to events

Cost Reduction for Apparel Company Cost Reduction | Easy | Kearney
Y
Your
our client is an apparel company in the Middle-East, and has a trade
trade mindset. Following
Following the
the oil crisis they want to reduce the prices of their goods and
and want
to reduce their costs to be able to do the same. Suggest how they should go about it.
So our client is an apparel compan
companyy operating in the middle eas
eastt and wants us to come up How can you reduce costs for these?
with a strategy to reduce their costs? What exactly
exactly is implied by trade mindset?
Our client can reduce their costs drastically if they change their raw material, which from
Yes, so our client procures finished
finished goods from manufacturing
manufacturing hubs and then supplies it to retail stores in my understanding would make up a large portion of the costs. If they have been using higher
the middle east, primarily UAE
UAE and Saudi Arabia. quality of cotton, shifting to a lower gsm fabric would be effec
effective.
tive. This is also likely to not have
Okay, so they provide their specific requireme
requirements nts to manufacturers and then sell the same to that great an effect on the demand, as the oil crisis would also change the consumer preferences,
their clients, which
which are other stores? If that is
is the case I’d like to know about t he types of product who would now be willing
willing to purchase cl
clothes
othes of lower quality than before. They can reduce the
and from where they procure design complexities
complexities of their orders, which would reduce the labour requirements. FurtheFurtherr the
That’s right. They sell cotton apparel
apparel and source from manufacturing h
hubs
ubs in China, India, Bangladesh company can look to procure from manufacturers which which charge lower margins or in locations with
etc. lower associated costs, even if it affects the final quality as due to changing preferencpreferences,
es, customers
would now be satisfied
satisfied with lower quality apparel as well. well.
Thank you. Before I analyse the operations of our client, I’d like to understand their
motivation behind reducing prices and why they want to reduce costs to achieve it? I’d also like These seem like good suggestions, especially factoring in how each would effect the end consumers of
to know if there is any specific tim
timeline
eline across which they want to reduce costs. our products.
products. You were also
also right abo
about
ut raw material,
material, it is actual
actually
ly 60% of the proc
procuremen
urementt cost to our
client. Is there any other way that you can think
think of to reduce costs?
Demand in these countries has gone down due to the crisis and the client feels reducing prices would Yes we can also look at the inbound logistics cos
costs.
ts. Assuming that the quantity we procu
procure
re
work in their favor. They do not want to substantially reduce their profit margins and
and hence would like to does not change, this cost will depend on distance
distance of shipment and mode of shipment
shipment (to
reduce costs. The
Theyy would prefer
prefer quick reductions,
reductions, but are open to both short and long term
term solutions.
solutions. determine price). One solution to reduce this would be to procure from locations within or near the
Middle East. This will not only reduce the transportation costs,
costs, but also the storage costs as
So, I’m trying to think of the entire value chain for the company and the various cost heads. What
lesser inventory would need
need to be maintained owing to reduced lead lead times. However these
I’ve come up with now is that the company first procures the clothes from
countries will have higher raw material
material cost (India, Bangladesh
Bangladesh have cheapes
cheapestt cotton), so the trade
manufacturers i.e. inbound logistics,
logistics, then it is brought to the country of sale, where the produc
products
ts
off between decreased logistics
logistics cost and increased raw material
material costs would have to be evaluated.
will be stored, post which
which there is distribution,
distribution, followed by retailing.
retailing. The client
client would also incur
marketing & admin costs. Should I go ahead with analysing the associated costs in each head, if Lets assume the decrease in logistics cost is higher than increase in raw materials cost. Can you now give
it can be lowered and how? your final recommendations
recommendations to the client?
client?
Okay, that seems like a fair approach. Lets only analyse till the distribution, as our client is only limited In the short term the client should look to shift lower quality and hence
hence lower cost raw material. In
to that. Lets assume that the marketing and administrative costs are optimised. the long term they should begin procurement from manufacturing hubs in the Middle East
I’ll begin with the costs related to procurement, which I think would be dependent on 3 factors – or develop capabilitie
capabilitiess do so if their finances allow. This would reduce both transportation
raw material used, design complexity and manufacturer chosen. The design complexity and ware
warehouse
house costs.
would affect the labour requirements
requirements and the machine requirements,
requirements, whereas
whereas the man
manufacturer
ufacturer
would affect the margin they take over their
their costs, the operational efficiency of the
manufacturing plants, labour cost, rent etc. which would
would be specific to the location.

Cost Reduction for Apparel Company Cost Reduction | Easy | Kearney
Your
Your client is an apparel company in the Middle-East, and has a trade
trade mindset. Following
Following the
the oil crisis they want to reduce the prices of their goods and
and want
to reduce their costs to be able to do the same. Suggest how they should go about it.
Inbound Marketing &

Procurement Warehousing Distribution
• Wants to decrease cost in Logistics Admin Costs
light of recent oil crisis (to
decrease price to customers
and drive sales) Manufacturing Distance Cost per km
Raw Material
• Sells cotton apparel to large
Costs Unit Costs
scale retailers in UAE and • Explore options of procuring • Cost per km is
Saudi Arabia from manufacturing hubs in highest for air
• Procures final products Raw Material Labor • Shift to lower complexity designs
makes up 60% • Will decrease laborcosts and usage of nearby countries freight followed
from manufacturing hubs • Will reduce the transportation by ships and
in India, China, Bangladesh of the Machining complex machinery/ machining processes
procurement cost and warehousing cost lowest for road
etc. (lesser inventory to be transport.
•
•
Not involved in cost. Shifting to Rent Client can try to negotiate rent terms maintained due to lower lead • Can shift to road
manufacturing (gives design lower GSM • Can not change utility costs (electricity, fuel
cotton would etc.) as it would be fixed for a location times) transport when
to factories and then picks • Reduction in transportation procuring from
up final products) and drastically bring Utilities • Procure from a manufacturing unit with
down costs lower utility and rent costs cost would have to be higher nearby countries
retailing than increase in raw material
Manufacturers • Negotiate with existing manufacturers to costs (India, Bangladesh have
Margin reduce their profit margin. cheapest cotton)
Short Term: Long Term:

Recommendations • Shift to lower quality (GSM) fabric • Start Procuring from nearby locations
• Use simple designs to reduce labour and machinery costs. • Change mode of transportation to road transportation

Quick Service Restaurant Cost Reduction | Easy | Kearney
Your
Your client is a quick service restaurant and is experiencing high manpower operating
operating costs. Find reasons and
and give recommendations.
recommendations.
Sir, just to be on the same page, I will repeat what I understood from the question. So our client is Sir, considering a store, manpower costs can be divided into chefs/cooks, servers,
a quick service restaurant and wants to reduce its manpower operating costs. managers, billing, delivery,
delivery, maintenance & security. Is there a particular head you would like me
to look into?
Yes, go ahead!
Let’s assume the problem is the store level only and I would like you to dive in delivery costs. What factors
Sir I would like to ask a few clarifying questions. make delivery costs?
Sure, go ahead! Delivery costs would include wages, insurance, spillage, and probably vehicle maintenance. Are
any of these heads changed?
What is a quick service
service restaurant? Geography?
Geography? What does
does it serve? Standalone
Standalone or a chain? Are you sure vehicle maintenance
maintenance will come in manpower
manpower costs? The company wages
wages of employees have
increased.
Consider fast food chains. It’s a pizza chain spread across India. They make and deliver pizzas.
Has the pay structure changed?
Regarding the problem
problem –
– Since
Since when is the restaurant experiencing this problem?
Is it concentrated in a particular geography? Are only we suffering or are competitors are also Yes, it was earlier fixed pay model.
model. Now its changed to fixed + variable kind of structure. Why do you
you think
impacted? this happened?
Well they have been experiencing
experiencing this problem for the past 2-3 years. They are experiencing
experiencing this problem Maybe industry model has changed sir. Or competitors introduced new pay structure and to keep
pan India but its majorly concentrated to Metro and Tier-1 cities. As far as we know, the competitors are
also impacted by it. up the company had to change its pay structure too. Maybe due to entry of food aggregators.
Yes, due to entry of food aggregators,
aggregators, the delivery employees
employees were leaving the client for be
better
tter pay. Thus
Thank you sir! How is the competitive landscape and has there been a change
change in governm
government
ent they had to increase the pay. I want you to analyse the change in pay.
regulations/laws regarding manpower that might be impacting the industry?
Sure sit, fixed pay would be factor of no. of working days, working hours and hour rate. Variable
Variable
No, there has been no change related to labour laws. The industry is fragmented with 2 big players and lot pay would depend on number of deliveries.
deliveries. Do we have the data reg
regarding
arding this.
of small players. Plus each city have local chains and eateries that add to the competition. We have 30%
market share in Tier-1 and Metro cities and 40% in Tier-2 cities, where we exist. Yes, a delivery employee on an average has 24 working days, has a 8 hour w workday,
orkday, and is paid ₹ 50 per
hour. Apart from it, they are paid ₹ 5/delivery and can deliver 30 order per day. Also suggest ways to
Regarding service,
service, what all kind
kind of service are we providing? reduce costs. Earlier pay - ₹ 10000/month
Good question! The restaurant provide dine-in, drive-by and delivery service. Anything else you would like New costs: ₹ 13200. That’s an increase of 32%. Regarding solutions: We can o outsource delivery
to know? activity to Swiggy and Zomato after doing a cost benefit analysis. That might save on the delivery
No sir, thank you! Just provide me a couple of minute of gather my thoughts and analyse the charges. We can also introduce a loyalty bonus to retain employees, or we can introduce/increase
problem. delivery charges to recover the costs.

Quick Service Restaurant Cost Reduction | Easy | Kearney
Your
Your client is a quick service restaurant and is experiencing high manpower operating
operating costs. Find reasons and
and give recommendations.
recommendations.
Case Facts & Notes Approach Manpower Costs

• It is a Quick Service
• Restaurant chain of Pizzas -
Make & Deliver Pizza
Chefs/Cooks Servers Managers Billing Delivery Maintenance Security
• Experiencing problem since
past 2-3 years
•
Problem visible in 40% of the Spillage

restaurants across chain. Pan Pay structure have changed
changed from only Wages Insu rra
ance Vehicle M a
aiin tteenan ccee
India –
India – Tier
Tier 1 cities Fixed to Fixed + Variable.
• No changes in g overnment Pay – ₹ 10000
Earlier Fixed Pay –
regulations.
• Impacting competitors too. Fixed Pay Variable
Variable Pay
Activities Factor of # of deliveries

# working days X Hour Rate X # of Hours
Dine-In # of deliveries have increased over
Pay Structure had changes due to 24 working days
entry of hyperlocal delivery players the years.
Drive By ₹ 50/hour
(Swiggy, Zomato), thus increasing 8 Hours Work Day
delivery boys’ demand. Currently paying ₹ 5/delivery.
Delivery Can deliver 30 order per day.
Recommendations Now – ₹ 9600
Fixed Pay Now –
• Outsourcing delivery
delivery activity to Swiggy and Zomato after doing a cost benefit analysis. That can save on the delivery charges. Variable Potent
Variable Potential – ₹ 3600
ial –
• Introducing a loyalty bonus to retain employees.
employees. Total pay = ₹ 13200
Total
• Start charging delivery charges for Pizza delivery to recover costs. Currently, they don’t charge Increment of 32% per person.
• Increase prices of pizza by a little amount(1-
amount(1-2%)
2%) to cover for the increased costs. People won’t mind paying Rs. 410 for a Rs.40 0 pizza.

Food Manufacturer Case Cost Reduction | Moderate | BCG
Your
Your client is a food product manufacturing corporation
corporation and has observed a decline in profits.
profits. Figure out the
the problem.
Sir, just to be on the same page, our client is a food manufacturing corporation and they are So we break the value chain into raw material, transportation, manufacturing, pack
packaging,
aging,
observing a decline in profits and I have to help in figuring out the problem. warehousing, outbound logistics,
logistics, sales a
and
nd marketing. W
Would
ould you like m
mee to look into a particular
head.
Yes, that’s right.
I want you to look into Warehousing costs.
Can I ask a few clarifying questions regarding the case?
Okay. Warehousing costs can be broken into rent, labour and food wastage costs. Since biscuit is
Sure, go ahead! product that comes with
with expiry, wastage costs might be a big
big risk.
In which geography are we based? What markets do we serve? Yes, you are right! We are facing issues in food losses only.
Okay, so losses in food can be due to pests or due our own system of inventory management. Are
We are based out of India, and serve the entire country.
we facing some
some kind of pests related issues?
What is our product? Are
Are we just into manufacturing
manufacturing or other parts of the value chain too? No
We are a Biscuit manufacturing company and present across the entire value chain.
chain. Consider Parle. So the problem can be in our own managemen
management.
t. Can you help me understand the logistics process
of this company?
Thank you! And do we have multiple products? Or just a sin
single
gle type of biscuit.
biscuit.
Now that inventory management has been identified as the problem area, consider this. The warehouse
For this particular case, Consider we are a single product company. Take Parle-G as proxy. used to have 2 doors (entry and exit door). The exit door no longer exists. How could this be a problem?
Also suggest solution/s.
Thank you sir! And since when have
have we been facing
facing this problem? Sure sir! Just give me a minute to think. It is possible that the goods are stored away from the
entry door first and near the exit door in the end. During distribution, goods are collected from
Almost 6 months.
near the entry door first and away from the entry door last i.e. LIFO model of inventory
Is it an industry-wide problem
problem?? management is in place. LIFO model will result in losses since biscuit is a perishable good and
has a limited shelf life.
Good question! It seems that the industry has been immune to this issue.
Good! What will you recommend?
Okay Sir! I would like to take a few moments to structure my thoughts before we move ahead.
I will approach this problem by dividing profits into revenues and costs. What would you like me There are 2 immediate
immediate solutions
solutions that I can think of. One is to shift to FIFO type of inventory
inventory
to approach first? management. Second
Second would be open the previously closed door to facilitate FIFO.
Since there are no changes in revenues, I would like you to look into costs. Okay! Thank you. You can leave now!
Okay, then I will breakdown costs using value chain based approach.

Food Manufacturer Case Cost Reduction | Moderate | BCG
Your
Your client is a food product manufacturing corporation
corporation and has observed decline in profits.
profits. Figure out the problem.
• Company – Biscuit
Biscuit
manufacturing company
• Geography- Based out of Costs Revenues
India, serves India
• Product- Single product. Cost Breakdown using Value Chain No change
Proxy-Parle G based approach
• V
Value
alue Chain – Present across
Chain –
the entire value chain Raw
• Duration of the Problem - 6 Transportation Manufacturing Packaging Warehousing Distribution Sales
Material
months
• Just Us
Costs changes that can occur during Pests
Warehousing
Ware housing can be related
related to
Rent Food Labour Inventory Management

Losses
Now that inventory management has been identified as the
Losses related to expiry of product in warehouse sinc
sincee problem area, consider this. The warehouse used to have 2
our product is a perishable good. doors (entry and exit door). The exit door no longer exists.
Recommendations • It is possible that the goods are stored away from the entry door first and near the entry door in the end.
• During distribution, goods are collected from near the entry door first and away from the entry door last i.e. LIFO model of
Shift to FIFO model of inventory management. inventory management is in place
Open the closed date. • LIFO model will result in losses since biscuit
biscuit is a perishable good and has a limited shelf life.

IT Services Client Cost Reduction | Moderate | Kearney
The client is an IT Services firm, interested in improving the

the bottom-line of
of the India Region,
Region, help them chart
chart their way forward
forward
Thank you sir, so just

just to reiterate and confirm,
confirm, our client is an IT Services firm and they want
want to Sure, so you can have a look at these data points for number of employees, utilisation rates and number of
improve their bottom-line in India. employees in both New Delhi and New York. (Provides datasheet)
Numberr of Employ
Numbe Employees:
ees: 1) New Delhi
Delhi –
– 5000
5000 Employees, 75% utilization, 2) New York –
York – 10,000
10,000
Yes, that’s right
Employees, 85% utilization
Avg Cost Per Employees: 1) New Delhi - $700 each, 2) New York - $800 each
Okay, so I had a few questions to clarify my thoughts.
Thanks! So analysing
analysing this sheet, I can
can see that in New Delhi, utilisation levels
levels are lowe
lowerr than New
Sure, go ahead. York and there seems
seems to be a clear
clear case of overstaffing.
overstaffing.
Where are we located apart from India, and are there
there any benchmarks
benchmarks we have in mind compared
compared Yes, so what would you suggest to the firm in this case.
to other locations or companies about increasing the bottom-line?
I believe to increase worker utilisation rates should be the firm’s first priority and as a benchmark
In India, we’re located in New Delhi, Apart from that, we’re located in New York, US. There isn’t any we can keep the New York office numbers a first target.
benchmark but we’re not doing as well as New York on some parameters.
Alright, that sounds good, how do you aim to achieve those increased
increased rates.
Okay, thank you. So, I believe to improve bottom-line, we need to either increase our revenues or
decrease our costs and spending? Is there any which you want me to focus on? That could be done in two ways, either we could take the hard
hard decision of laying
laying off people or we
we
can try and get more projects for the firm, which I’m sure the company would anyway have been
There isn't much scope to increase
increase revenue. Let's look at the co
cost
st side.
trying to do.
Alright, so for an IT
IT Services firm,
firm, if I think of costs,
costs, major would be infrastructural and
Yes, that’s right. If you were to layoff,
layoff, how many would you need
need to?
administrative, software development costs, and the employee costs.
Yes, that’s right. You can explore more
more on each of these. We lab
label
el them as SG&A and employee costs
costs (Performs calculations)
calculations) Given the data at hand, I think we would need to layoff a little less than 600
respectively. workers from the New Delh
Delhii office, saving on major costs and iimproving
mproving the bottom-lin
bottom-line.e.
Okay, that seems fair. Anything you would want to suggest the company before taking such a move?
Okay, talking about SG&A, it would include I believe it would include hardware, software costs,
and also all the Outsourcing costs while the employee costs would depend on the number of
Well, these are
are decisions that might
might cause a hit on the brand image of the company sso
o they should
employees, their utilisation and wages. Should I discover if t here is scope to improve any of these?
be done keeping in mind the employees’ futures in terms of the negotiation or settlement that is
Yes, that’s true. SG&A does not have much scope
scope to reduce costs while I w
would
ould definitely want you to made when they’re asked to leave and also while being conscious of the negative press we might
explore the employee related costs. The factors you’ve mentioned are fine. accumulate. If we can get over these two important considerations carefully, I think this would be
in the right interest of the firm.
Okay, thank you. So in that case, I would want to ask if we have any information about how many
employees we have and also about their utilisation rates to see if they are over or under staffed. Alright, that should be good to go!
go!

IT Services Client Cost Reduction | Moderate | Kearney
The client is an IT Services firm, interested in improving

improving the bottom-line of the India Region,
Region, help them chart
chart their way forward
forward
Case Facts & Notes Approach Bottomline Improvement

• It is an IT Services Player
present in India (New Delhi)
and US (New York) Increase in Revenues Decrease in Major Costs
• Provide BPO Services and
customized Software
Development Employee Costs Selling, General
• Clients are present across all Basic Facts: and Administrative
sectors No of Employees: Expenses
• Objective: Improve Bottom- • New Delhi –
Delhi – 5000
5000 Employees,
line as soon as possible 75% utilization • Critical component as
• New York –
York – 10,000
10,000 Employees, Average Cost per
per No of
of Employee acquiring clients for both
85% utilization
Employee Employees Utilization Factor BPO and Software
Avg Cost Per Employees:
Development is the driver of
• New Delhi
Delhi - $700 each
As per industry Higher utilization topline
•
New York - $800 each standards Problem

restricted notone
to any would lead to lower • No Scope of Improvement
employee cost per
department
project
Recommendations There needs to be increase

increase in employee util
utilization
ization at New Delhi
Recommendations
Office. For this, if layoffs are considered, total lay
layoffs
offs required
Layoffs would be 5000(1- (75%/85%) ) i.e. 588 employee
employees,s, saving Rs 411,0
411,000
00
Cost Savings approx.

If projects increase, an increase in topline could lead to an increase
Increase in Projects in bottom-line too. But economics
economics and impact of employee
utilization should still be taken into consideration

Steel Manufacturer High Costs Cost Reduction | Moderate | BCG
Your
Your client is the
the CEO of a Steel Manufacturing
Manufacturing Company and he thinks that his transportation
transportation costs are very high. Help him understand if he is correct.
So, just to be on the same page, I would re-iterate the problem statement. Our clien
clientt is CEO of a Sure sir, thank you! Just give me a couple of minutes to gather my thoughts and analyse the
Steel manufacturing company
company and he thinks that his transportation costs are very high & we have problem.
to help him understand if he is correct.
Sure, Go ahead!
Because this is related to costs, I would like to look into the value chain of our client’s business. I
deeper into the Case, I would like t o ask a few clarifying questions. Is that fine? have drawn the value chain from Inbound Logistics to Final delivery. But, since our client controls
only outbound logistics, I would like to focus on that.
Sure, go ahead!
In which Geography does the client operate? Is there a single plant or multiple plants? Sure!
Does our client owns its own vehicles for transportation & distribution or does it rent them? Do we
So, our client operates across Delhi, Kolkata, Chennai, Mumbai & Pune. They have 2 plants. have any data regarding that?
Also, does the client

client operate any other
other operation apart from that of Steel manufacturing?
manufacturing? Yes, we have. So, our client uses 3rd Party vendors to rent trucks. The average truck rental is Rs.25/Km.
Average route length is around 1000 Km & on an average there are 30 trips annually.
Yes, they operate in transportation & distribution segment apart from steel manufacturing.
Thank you for this data. So, this comes to a cos
costt of around Rs. 7. L
Lacs/year
acs/year for a single
single truck. But
But to
Thank you sir! Do we have any information regarding our Customer
Customer segments
segments & their see how the client is doing on the cost front, we need some data to benchmark. If the client wishes
proportion in our business?
business? to own his own truck, the cost that he incurs annually in that case can be a good benchmark for us
to see how is he doing right now on cost front. Do we have any data regarding that?
Our client operates in B2B segment, but we don’t have any customer segment wise data.
Yes. (Interviewer gives a data sheet mentioning
mentioning all the relevant costs)
Moreover, what do we know about the competition in the industry?
In this case, the annual cost/truck comes to around Rs. 13,30,000 which is a lot more than current.
So, it is a fragmented market with many competitors. Our client is one of the major players.
Yes. So what do you recommend?
Also, what are the Products
Products that our client makes?
makes?
I think owning trucks doesn’t look like a relevant option for our client. But, to further reduce the
So, the Client makes Steel rods & nails & uses finished steel as the raw material. But the client controls cost I have following recommendations: We can try to negotiate cost with the current vendor or
change the vendor if we get lower bid. We can try to utilize the full capacity of trucks in each trip so
only the outbound logistics. that number of trips can be reduced annually. Further, we can also look into the option of Route
Since, the client is also involved in the transportation & distribution apart from manufacturing, optimization which would reduce the average route length
length in each trip for our client. Also, if it’s
do we have any information related to any regulation which affects our client’s business? possible we can look into the cheaper modes of transport such
such as railways for bulk transport of our
Yes, so the client has to pay Toll/State tax at each border for in
inter-
ter-state
state travel. That’s all we have.
have . items which might help us to reduce our costs.
These recommendations
recommendations look good
good to me. Well done!

Steel Manufacturer High Costs Cost Reduction | Moderate | BCG
Your
Your client is the
the CEO of a Steel Manufacturing
Manufacturing Company and he thinks that his transportation
transportation costs are very high. Help him understand if he is correct.
Case Facts & Notes Approach Value

Value Chain
• Clientt - Steel Manufacturer-
Clien Manufacturer-
Major Player. Transportation/ Inbound Logistics Manufacturing/ Warehousing
Warehousing Outbound Final
Distribution along with (Raw Materials) Processing Logistics Delivery
Manufacturing.. 2 Plants
Manufacturing
• Customers - Mainly B2B across
Client is using 3rd Party
Delhi, Mumbai, Pune, Chennai, Vendors (Truck Rentals)
Kolkata.
Truck Rental: Rs. 25/Km
• Product - Finished steel as raw
Route Distance: 1000 Km
material. Steel rods & nails. We No. of trips: 30 (Annually)
only control Outbound logistics. Total Cost: Rs. 30*1000*25
• Competitors - Fragmented Mkt. = Rs. 7,50,000/yr.
7,50,000/yr.
Client is one of major players
making steel rods & nails. Note: Since we only have to concentrate
• Regulation/Route
Regulation/Ro ute - Toll/
Toll/State
State
tax at each border for inter-state only on Outbound
it further Logistics,
(confirm with w
wee analyse
interviewer)
travel.
To assess
assess whether this figure
figure is high, we ne
need
ed a Description Value (Rs.) Amount (Annual) Recommendations
benchmark, Fuel 50/Ltr. 3,00,000
What if the client wishes tto
o purchase his own Driver Salar y 10000/trip 3,00,000 • Change
Change of Vend endor or OR Negoti
Negotiate
ate wit
with
h curren
currentt vendo
vendorr
transport and own up the complete outbound Ut
Util
ilis
isee th
thee full
full tr
truc
uckk lo
load
ad capa
capaci
city
ty to redu
reduce
ce th
thee numb
numberer of tr
trip
ipss
Toll 100/100 km 30,000 •
logistics: •
Cost of Truck Rs.

Rs. 30 Lakhs ; Life 10 yrs. Depreciation 3,00,000/yr. 3,00,000 •
Route
Rout
Use e optim
optimizati
Use cheaperr ization
cheape meaon
meansns of transp
transport
ort:: Rai
Railwa
lways
ys for bul
bulkk tra
transp
nsport
ort
(Salvage value 0); Mileage 5km/ltr. Maintenance 3,00,000
Tyr
Tyree Replacement 1,00,000
Total
Total 13,30,000

W
Women
omen Apparel Retail
Retail Chain Cost Reduction | Moderate | Bain & Co.
Your
Your Client is a big ‘women apparel’ retailer is facing
facing margins problem. They
They are experiencing a constant
constant sales growth but there
there is a cost problem
problem in the
the
retail side. They want you to find out the problem & give recommendations.
I would re-iterate the problem statement first to be on the same page. Our Client is a big ‘women Yes! I would like you to look into the fixed cost compon
component
ent of Salaries.
apparel’ retailer facing margins problem. They are experiencing
experiencing constant sales growth but there
Sure sir! I would like to look into the structure of the retail side of our business as in where all do we
is a cost problem in the retail side & they want us to find out the problem & give
pay salaries. I can think of Retail sshop
hop service staff
staff,, maintenance staff, etc. Do we have
have any
recommendations
information on what are the various layers at which we pay salaries & how much?
Yes, absolutely right. Go ahead! That’ a nice observation. I would like to give you some data regarding our salary structure. We have 4 layers in
our value Chain: Regional Sales Heads (4), Divisional Sales Heads (10), Territorial Heads (16) & Shop Sales
deeper into the Case, I would like t o ask a few clarifying questions. Is that fine?
Heads (60). The per employee salary at these 4 layers are: $350, $300, $280 & $100 respectively. Looking at this
Sure, go ahead! data can you tell me your observations?
Where is the client

client based out of & where does it operate? Thank you sir! So, Total
Total Salaries at these 4 layers are : $1400, $3000,
$3000, $4480
$4480 & $6000
$6000 respectively.
respectively. What
I can see is the salary expenditures at Territorial Head & Shop Sales Head levels are relatively higher.
The client is based out of USA & owns a retail chain op
operating
erating in USA. So, I am thinking of looking into these.
Also, does the client
client sell its products only via its own stores or through some other channels as Sure! Go ahead.
well?
I would want to benchmark our Salary expen
expenditure
diture at these levels with our competitors to check
They sell only via their own
own retail stores. whether the compensation
compensation that we are paying
paying at these le
levels
vels are fair or not
not & also if our staffs are
Thank you sir! Do we have any information regarding what kind
kind of different products our client working at comparable
comparable efficiency
efficiency or not. Do we hav
havee any information regarding these
these factors?
sells? That is quite insightful. Yes,
Yes, I have some data for you. Our competitor
competitor has 5 people manning
each store whereas we have 6 people manning each store. What do you understand out of this?
You can consider the client
client sells Women merchandise. That
That shall suffice the requirements of
of this case.
I think then we have identified the problem. There are two situations possible. Either the efficiency is not up
Sure sir, thank you! Just provide me a couple of minutes to gather my thoughts and analyse the to the mark or there is some problem in the training
problem.
So, what do you recommend then?
Sure!
Sir! I have two recommendations. Firstly, our client shall look into why we need 6 people as compared
Sir, Since this is a Cost problem, I would like to divide the Costs into two components, Fixed & to 5. We shall take into account # of customer walk-ins & shift durations & act accordingly.
Variable costs. Fixed
Fixed costs can be further
further segmented
segmented into 5 types: Rent,
Rent, Utilities, Salary,
Salary, Secondly, We Shall also analyze our Training process & look into Curriculum, duration & evaluation
Machinery & Administration costs. Variable costs can be segmented into 3 types: Raw materials, criteria & take corrective measures
Transportation & Miscellaneous
Miscellaneous costs. Do we have any information
information regarding which cost Good job! This looks perfect. We are done.
segment is a cause of concern for our client?

W
Women
omen Apparel Retail
Retail Chain Cost Reduction | Moderate | Bain & Co.
Your
Your Client is a big ‘women apparel’ retailer is facing
facing margins problem. They
They are experiencing a constant
constant sales growth but there
there is a cost problem
problem in the
the
retail side. They want you to find out the problem & give recommendations.
Case Facts & Notes Approach Cost
• Client-
• Owns a retail chain Fixed Variable
Variable
operating in USA
• Sells only via own stores
Rent Utilities Salary Machiner y Admin. Cost Raw Material Transport Miscellaneous
• Product-
Regional Sales
Sells Women
• Number: 4, Salary: $350 each
Head
Merchandise
Divisional
Number: 10, Salary: $300 each
Sales Head
Territory
Territory Head Number: 16, Salary: $280 each
Shop Sales
Number: 60, Salary: $100 each
Head
Analysis Recommendation
Regional Sales
head
head - 1400
1400 • Client shall look into why we need 6
Divisional sales - people as compared to 5. We shall take
3000 Compensation
Territory sales - into
shift account
durations#&
ofact
customer walk-ins &
accordingly.
4480 Benchmark with Competitor has 5 people
Higher • W
Wee Shall also analyze our Training
Training
Competitors manning/store whereas we
Shop sales
sales - 6000 process & look into Curriculum,
have 6 people
Efficiency manning/store duration & evaluation criteria & take
corrective measures.

Golf Course Pricing | Moderate | McKinsey
The client wants

wants to setup a new golf course. They have hired you to
to come up with
with a pricing strategy
strategy for the same
Our client possess a huge field. They want to set up a golf course there, and they’ve hired you to help Do we have numbers/data regarding these costs?
them come up with a price that they should keep for their customers to come and play golf. Currently, no. You can consider that you have a very short time to spend with your client and this is a
Alright, so I’ll
I’ll just start by clarifyin
clarifying
g a few aspects
aspects and the objective, and then we could go into conversation over coffee, hence an in-depth
in-depth cost analysis and calculations aren’t possible. You need to
how we can arrive at the right price point. Is that fine? think of something quickly & produce an approach that is simple & easy to convince the client
Yes, that sounds good Alright, in that case I think we should go by
by considering w
what
hat our value proposition is
is..
Firstly, I will want to know if we have any prior experience in setting up this kind of a complex or Okay, tell me more about what you’re thinking
golf-course? Since we’re trying to reach to an affordable price, to tap into the mid
mid-income
-income golf-lovers market,
No, this is the first time we’re thinking of setting up such an entertainment/sports facility we should consider
consider what are proxies for such an activity be
be,, i.e. those activities
activities that they
undertake in place of playing golf as currently, it is too expensive.
Okay, so are there any competitors we have in this space?
Okay, that sounds interesting, carry on.
Yes, this field is in Gurgaon, and as you may be knowing sinc
sincee you’ve worked there, there is a Golf
Course nearby on the Golf Course road, owned by DLF. As an example, we can consider
consider that currently, to indulge
indulge in a two/three-hour recreation, they can
plan to go for a movie.
movie.
Yes, right, I know about that. So, what is our aim i.e. what do we
we plan to achieve with the price?
Profitability first or Market Share first? Right.
The DLF Golf Course that is our competitor, charges a very high membership
membership fee to its customers, i.e. There, they spend
spend about Rs. 500 on an average for a three-hour long engagement.
engagement. So, here, ifif we
around Rs 8000 per year. This doesn’t allow a huge group of golf -lovers
-lovers to come and enroll themselves. consider that they want to come and play golf instead, they would be willing to pay at least that
So, our aim is to capture that share of people. amount

pay for a 2/3hr
on-demand play, whenever
instead, given that
wheneve there’s
r they wishantooption
come of noplay.
and annual membershi
membership
p fee and they can
Do we also want to keep an annual membership-fee
membership-fee based structure?
Yes, that seems right.
No, we do not have any rigid structure in mind. Whichever pricing plan you think will attract the target
Now, since this option provides a whole new elite experience altogether because of the kind of
customers would be fine with us.
sport golf is, we can attach a premium to it. Additionally, we can appeal to the people based on
Alright. When
When we talk about pricing strategy, we can
can come up with three kinds of methods
methods to the fact that they are now able to indulge in their favorite activity at an affordable price, contrary to
arrive at a fair price. They are Cost Based, Competitor Based, and Value Based Pricing. the prior scenario when they couldn’t afford it due to the high fixed-fee
fixed-fee subscription
Okay, seems fair. Okay, that’s great. How much premium due you intend to charge?
If we look at competitor-based pricing, we have the price of the DLF Course at hand, hence, we I believe we can ramp up the fee to be about 50% greater than the movie ticket prices, giving us a
would be similarly
similarly priced or lower to tap into the economy
economy segm
segment.
ent. We can com
comee back to this total of around Rs 750 for every 2 or 3 hrs spent. Also, since there’s flexibility now around choosing
later, but first, I would want to know the costs involved in this effort so that I can achieve a your frequency of visit and paying on site,
site, people would n not
ot be hesitant in spending
spending this amount
minimum price using the cost-based approach that we can charge of money.
Since we own the land ourselves, there is no cost involved there, Although there are maintenance and Great, that sounds like a perfect price. We too arrived at a range of around Rs. 700 -800 for the fee without
upkeep fee along with the expenditure for the initial construction of the facility. a subscription model.

Golf Course Pricing | Moderate | McKinsey
The client wants

wants to setup a new golf course. They have hired you to
to come up with
with a pricing strategy
strategy for the same

Pricing
• Objective
• Access to Golf to
maximum people Competitive Cost Plus Value
Value Based
Previous Experience Use as benchmark later Construction, Maintenance & Perceived Value to be evaluated
•None Upkeep.
No time for detailed analysis
• Location - Gurgao
Gurgaon
n
Factor
• Competition
DLF Golf Course
•
s
Subscription –
Subscription
• – Rs.
Rs. 8000
Targett Segment
Targe Proxy Premium Model
per annum
• Mid- Incom
Incomee Go
Golf
lf • Movie which is 2-3 hours • Golf being an elite On demand pricing model
• Constraints - No
None
ne
lovers who can’t afford engagement experience, premium can
annual membership fees • Rs 500/person on average be charge
charged
d of aro
around
und 50
50%
%
for the experience
Recommendation
• Price based on value derived from the experience.
• Keep On- demand mode
modell to reduce hesitat
hesitation
ion of initial Price = 1.5 * 500 = ~INR 750/session
spending

Paint Manufacturer Pricing | Moderate | Kearney
Your
Your client is a paint manufacturer who has developed
developed a new paint
paint that lasts
lasts three times longer than the original paint.
paint. Help them to
to price it.
Sir, if I understand correctly, our client is a paint manufacturer who has developed a new paint So, I’ll calculate the cost needed to paint a 10,000 sq. ft area. I am assuming that 1 Ltr of paint can
that lasts 3 times than the current paint that they sell. I have to figure out a price at which they paint an area of 100
100 sq. ft. Hence 100 Ltr of paint
paint will be used here.
here.
should sell. Next cost head will be wages of the painter. Assuming 1 person can paint an area of 100 sq. ft. in 1
Yes, you are right. Please go ahead! day
And charges Rs 1000/day
1000/day.. This brings the cost
cost to Rs. 100,000/day.
100,000/day. Are these estimates correct or
I would like to understand a few important details ab
about
out our client. What is the geography we are they need to be altered?
operating in and how is our client’s performance against competitors.
The client is Indian-based and has services across the country. They are a leading manufacturer of paint in These seem correct, you can continue with your approach.
the exterior paint category and enjoys a market share of 20% which makes them 3rd in the list.
Okay, thank you. I would like to see the cost to be paid by the customer with earlier product over 9
Okay! Since this is a new product I would like to understand this as well as the old produc
productt from years as new paint will last 3 time
timess the duration of older paint. The major cost heads are
are –
– paint,
paint,
pricing, features
features like shades and durability. painter, overheads,
overheads, convenience.
convenience. Out of this paint and painter are the ones impacted in new
new product.
The new product is 3 times as durable as the older paint. The old pain
paintt costs Rs 500/Litre and the new Earlier, total cost of paint would be 3x500x100 = 150k.
product is an innovative product and no substitute exist in the market. Both the paints are available in all Cost of painter would be 3x100k = 300k
major shades and kinds. Total cost = 450k
Oh!
Oh! That’s
That’s sounds like a great
great product for a TG which
which looks forward to a long duration product. Now, let the
Therefore p=new
Rs.price be p, then total cost will be px100+100k
3500/ltr
Is there a pattern or target group t hat the company cater to or it has all kinds of customer?
The major customers belong to tier 1 and 2 cities and have an affinity to
towards
wards durability. That seems like a fair price. Thank you
you for your analysis.
Since we have to price this brand new product, so I wanted to know if there are any regulations?
regulations? Thank you Sir for your time.
time.
There are no regulations and barrier in launc

launch
h a new product and pricing it.
Okay! I would like to use Value Based Pricing since we are introducing a new product having
superiority over existing products. I would calculate price based on the value addition provided by
the new paint over the existing one. Does this approach sounds good to you?
Yes, this sounds good for a new product. You can proceed.

Paint Manufacturer Pricing | Moderate | Kearney
Your
Your client is a paint manufacturer who has developed
developed a new paint
paint that lasts
lasts three times longer than original
original paint. Help them to price it.

Pricing
• Market/Client - Leading
Exterior Paint Manufacturer
Manufacturer..
Current Market share of 20%. Competitive Cost Plus Value
Value Based
Top 3 manufacturers
Use as benchmark later Maintenance and Upkeep. Perceived Value to be evaluated
• Product - New
New,, durable- thrice No time for detailed analysis
of current paint available. No
benchmark available; Old paint
Costs to Customer
cost Rs. 500/Ltr. Available in all
shades and kinds. (Regular Paint Case)
• Customers - Tier-1 &2 cities.

cities. Paint Overheads Painter Convenience
Would
Would prefer durability due to
obvious reasons. • 1st yr-500x • Rs. 1,00,000/-(one
• Regulations - No price • 4th yr-500x time)|will be used thrice
ceiling/floor for paints. No • 7th yr-500x in the 9 year period
barrier related to entry of any • where qty x= 100 ltr.
ltr.
player or introduction of any
new product • Total
Total cost is 1500x = Rs. 150,000
150,000 Suppose we need to to paint 10,000 Sq. ft.
ft. :
Costs involved:
1 Ltr. Can paint 100 Sq. ft; Hence 100 Ltr. will be used
Recommendation Wages: 1 Person can paint 100

Charges : Rs. 1000/day
100 Sq. ft.;
Hence total cost to customer in original paint case is 150k +3*100k = 450 k; which the customer
can pay one time provided the paint lasts for 9 years. Hence Total cost of getting painting done: Rs. 1,00,000/-
Hence, total price = (450k-100k)/100 litre = Rs. 3500/Ltr Note: Normal Paint Lasts 3 years, hence this will last 9 years

Hepatitis-B Drug Pricing | Hard | McKinsey
Our client is a pharmaceutical company.

company. They recently invented a drug to cure Hepatitis-B. They have hired you to find the annual price range of treatment.
Before I dwell into the analysis, I would like to ask few clarifying questions in order to better There are 2 kind of existing drugs:
understand the client, the product and the market. May I know the geography where our client is - Generic
Gene ric drug - $1,000
$1,000 –
– 80%
80% market share
operating. - Niche drug for pregnant women - $10,000 –
$10,000 – 20%
20% market share
Yes, the client is based out of the US. Do we have data from some credible source about the number of patients going for treatment?
There are close to 150,000 going for

for treatment each year according to Public Health
Health Department.
Can you tell me about the treatment?
The treatment goes on for 1 year.

year. The cost of the treatment is bo
borne
rne by the health insurance cover provided I think to decide about the price, I’ll use a mix of cost
cost-based
-based and value-based
value-based method. I’ll find the
base and add price of value created in the form of no risk of LT. The expected cost should be
by the government. (20%*$300,000 = $60,000). The price range for the treatment hence should be $61,000-$70,000.
Does it have a substitute? I would also want to know the success rate of our drug compared to the This figure matches the expectation
expectation of the client. Can yyou
ou try to find out the total money spe
spent
nt by the
existing drug. government? Take adoption rate to be 50%.
Both are equally effective. They cure the patient completely in the given time-frame (1 year). Can you tell me I am assuming a 80-20 split in the generic and innovative niche treatment in the 50% adoption rate
about the parameters on which drugs can differ? scenario. In one year, following are the major cost brackets for the government
- Investments (assumed $1Bn)
I think these the parameters on which drugs can differ are side-effects, effectivene
effectiveness,
ss, mode of - 50% adoption rate implies 75,000 people to be t reated
delivery, frequency of delivery - Assuming price
price of $65,0
$65,000
00 for the treatment
treatment
Total spending = 1Bn
1Bn + 75K*65K = $5.875Bn
$5.875Bn
Great! The drugs primarily differ on “side-
“side-effects”. While using the existing drug there is a 20% chance of
going for a Liver Transplant (LT) whereas the new drug is free of all such risky side-effects. What are the risks involved if the client
client decides to launch this new drug?

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Consulting Case Book

you create a long and successful career in management consulting.

All the best!

A Basics about Consulting 6-9 C Basics of Guesstimates

B Basic Concepts 10-22 Basic of P2P Case Solving

Guesstimate Cheat Sheet 195

In very crude terms, Objectives could be of various types-

Top Players Why is it so sought after?

Roles/Hierarchy of a Consulting Firm

Consultant/Associate Post MBA

Use next 3 months to improve your skills

Prepare for the interview process

Prepare Hard Prepare Smart

Case Interview Business Acumen

HR Answers General Awareness

Crack the interview

Part B – Basic Concepts

• What is the Business?

• Who are the customers? • Major Players & Market Share

Other C’s: Collaborators Channels Costs Competencies Culture

Understanding the layer/level

4P’s and 7P’s

• What are the product characteristics

• Price in the market Product

Useful in the market entry

Porter’s Five Forces

Power of Buyers increases with:

Bargaining Power Bargaining Power of

Industry Rivalry Increases with: Power of Suppliers increases with

Dogs They are weak in markets

Stars Monopolies and first-to-market products

Cash cows Doing well with no growth with limited opportunities

Useful for portfolio analysis, investment decisions, growth strategies.

Equipment Cost of RM Machinery Transport for Sales Channel Marketing Repairs

Useful for cost analysis.

Existing Market New

Ansoff Matrix Example: Coca Cola

The Company Environment

Sensitivity of demand to price

Price Discrimination 4 Types of Market Structure

Essential Useful Optional

Time Value of Money Discounted Cash Flow

Part C – Basic of Guesstimates

Mutually Exclusive Collectively Exhaustive Using MECE segmentation is extremely effective in

Customer Clients Increase Sales

Individuals/ Institutions/ Increase Sales Increase #

Increase Increase New Segments in the

Medium New Markets

Pareto Principle (80/20 Principle)

• The primary implication

Top Down and Bottom Up Supply Side and Demand Side

Guesstim ates Do’s & Don’ts

Do’s Ideal Flow Don’ts

ballpark estimate from another approach Solving

Top Down & Bottom Up Approach

Case Interview Process

Things which are not client friendly:

P2P Case Practice

Peer to Peer Case Practice

• Understand the case properly • Understand the Question

• Provide information at right time • Clarify Objectives

that there is relevant and fruitful Two-way

2 Think and understand what more you need to know