IESE Case Book 2021

I E S E C O N S U L T I N G C L U B
INTERNAL C A S E B O O K
2021
IESE CONSULTING CLUB IESE CASE BOOK 2021 |

❖ INTRODUCTION TO CONSULTING
CONTENT ❖ IESE STATISTICS
❖ INDUSTRY KNOW HOW
❖ OFFICE SELECTION & REGIONS INFO
❖ CASES
❖ BCG CASE COMPETITION WINNERS (2nd EDITION)
❖ BCG CASE COMPETITION FINALISTS (2nd EDITION)
❖ PREVIOUS CASEBOOK CASES
IESE CONSULTING CLUB IESE CASE BOOK 2021 | 2

The Management Consulting Landscape
General Management Consulting Internal Consulting

McKinsey and Company BASF (Chemicals)
Bain and Company DHL Consulting
Boston Consulting Group AMEX Strategic Planning Group
AT Kearney Disney Internal Consulting
Roland Berger
Strategy&
L.E.K. Consulting
Capability Specific Consulting Firms Industry Specific Consulting Firms

McKinsey Digital Delta Partners (TMT)
McKinsey Operations (within McKinsey) ZS Associates (Pharma / Healthcare)
Deloitte Digital
BCG DV

Consulting Journey
CV/CL Interview
Career Forum Interview R1 Interview R2 Offer
Submissions Selection

Consulting Interview Process
Case interviews take very similar formats across the various consultancies where they are used. Before landing your dream role with any consulting firm,
you will need to complete between four and six case interviews, divided between 2 rounds in most cases, with each interview lasting approximately 50-
60 minutes. Over the past few years, consulting firms are also increasingly using logical reasoning tests or gamified assessments as the first step of the
interview process.
Interview Format
1. Fit Interview: 15-20 minutes
2. Case Interview: 25-35 minutes
What do the firms look for?

“While there’s no exact template for success at McKinsey, our people share some qualities that help make us successful–and that make working here fun:
Personal Impact, Entrepreneurial Drive, Problem Solving Skills, Inclusive Leadership” - Mckinsey & Company
“We seek passionate, open-minded individuals with a wide range of academic backgrounds, work experiences, perspectives, thinking styles, and
expertise. Excellent academic credentials are a necessary, but not sufficient, requirement. You also must demonstrate the curiosity to ask the right
questions, the courage and creativity to blaze new paths, the ability to collaborate with colleagues and clients, and the leadership skills to transform your
ideas into action” – Boston Consulting Group
“ We seek individuals demonstrating the following attributes: Problem solving skills, The Ability to Lead, Results Delivery, Passion” – Bain & Company
“If you’re reading this, you’re smart enough to already know what we’re looking for. Insightful, yes. Inquisitive, naturally. Collaborative, of course. But
we’re also looking for people who think further than that, who don’t accept the first thing in front of them, and who are always unapologetically
themselves.” - Kearney

What does a case interview consist off?
A case interview can be thought of as a simplified and shortened version of an actual consulting project. The candidate is presented with a business
problem, after which he or she will need to segment the information provided, navigate his or her structure, identify key factors which are driving the
issue that is being addressed, lead a hypothesis driven analysis and ultimately suggest a recommendation to solve the issue.
Skills Tested
Quantitative Capabilities
How comfortable are you with numbers? You need to not only do quick and accurate calculations but also clearly communicate business insights and
other implications of your quantitative analysis.
Listening and Synthesizing

Are you able to listen to the question prompt, understand the company and the overall business environment, and ask the right kind of questions to
elicit more relevant information?
Business Sense
Can you identify how the business operates? What the pain points or synergies within the business are? Are you able to create solutions to help resolve
it?
Structured Thinking
Are you able to break down your thought process in a structured manner and follow a hypothesis-driven analysis of the problem that needs to be
solved?
Synthesizing and communication

Can you synthesize all the analysis done in a clear, concise and actionable manner for your client? Can you then communicate it in the same way?
Common Types of Cases:

Profitability, Market Entry, New Product Development, Pricing, Valuation , Competitive Interaction, Estimates/Market Sizing

Fit Interview
Consultancy firms use the Fit or Personal Experience Interviews to learn about the candidate’s personal interests and passions, gauge the candidate’s
interpersonal skills and ability to successfully work in diverse teams, and most importantly assess how well the candidate understands the firm and its
values.
Examples of questions asked during Fit interviews:
General Questions: Competency Based Questions: Forward looking Questions:
• Tell me about yourself / Walk me • Tell me about a time when you • Suppose we hire you and you need to
through your CV demonstrated entrepreneurial drive manage a team of 5 analysts who know
• Tell me something about yourself that • Tell me about a time you worked in a more about consulting that you – what
is not on your CV diverse, cross functional team would be your leadership style?
• What are you most passionate about? • Describe a failure you’ve experienced • Suppose you are in a client meeting
What matters most to you and why? at work? What were the biggest and you see a competitor’s consulting
• Why Consulting? Why that specific learnings from that experience? report on the client’s desk, do you look
firm? Why that specific location? • Tell me about a time when you led a at the report?
• What are your interests outside of team and accomplished impactful • Suppose we assign you to a project in
work? results an industry you have minimal
• What is your proudest knowledge about – how do you start
accomplishment? your work?
Both the Case and Fit components of the selection process are accorded equal importance by recruiters and good performance in one will not make up
for a poor performance in the other. Ultimately, consultancy firms simply will not employ someone who they doubt will be a good fit with the company,
regardless of how great the candidate is at cracking cases.

A brief overview of the preparation
Balancing your fit and case prep, as well as updating your documents and researching/networking
Documents Fit interview preparation: 20 – 30 hours
Many are under prepared – start now!

• CV: Don’t spend too much
time adapting TMAY: Autobiographical Qs: Competency Qs:
• CL: Why consulting? Why this • Autobiographical or • Strength/weaknesses • 6 – 8 stories
firm? Why location? Why me? theme-based • Long-term plan • Brainstorm stories, not
• 2.5 – 3 minutes • Why consulting? Why answers
• Prep the most! the firm? Why location? • Practice adaptations
Research and Networking Case Prep: 40+ hours
Tips: Mocks (some might take more, Drills:

• Watch office selection video and others less): • Market sizing
• Follow partners on LinkedIn • Frameworks Use RocketBlocks
Ability
• Look for “high activity” profiles • Brainstorming
~30 mocks to complete drills,
• LinkedIn Cover Photo • Quants suggestion:
• Shares and Likes posts 5 – 10 mocks • Charts & Graphs 1 hour/day
• Premium subscription • Industry Sprints
# of mocks
• Look for similar profiles
• Learn 1-3 cases to deliver
In the session • Take good notes & synthesize
Use CaseCoach to partner up with other
• Ask questions about them findings
students and professional coaches (more
• Ask “who else” to talk to or if you can • MBA 2yrs, professional coaches,
info later). Also to review concepts.
follow-up with them alumni, and CDC

❖ CASES

Internships by Sector – Class of 2021
Finance 22%
Consulting 19%
Tech 16%
Healthcare 14%
Energy & Manufacturing 10%
Consumer Goods and Retail 8%
Other 11%

Fulltime Employment by Sector – Class of 2020
Consulting 33%
Financial Services 22%
Technology 17%
Industry 28%
23% 23% 21% 18% 14% 1%
Latin Europe (Ex Spain Asia Pacific Middle East & North
America Spain) Africa America

Average Compensation by Sector – Class of 2020
Average Of Annual Min Of Annual Max Of Annual Average Of Other Min Of Other Max Of Other
Sector
Base Salary* Base Salary Base Salary Compensation Compensation Compensation
Consulting 93,294 21,947 1,52,990 64,220 8,683 2,18,326
Finance 85,167 45,000 1,32,319 66,740 3,496 1,57,964
Industry 81,327 31,011 1,46,315 38,675 1,600 1,45,960
Technology 78,484 26,000 1,20,538 37,287 5,266 1,12,193
*In Euros

❖ CASES

Industry Know How

Industry Know How

Industry Know How

Industry Know How

Industry Know How

Industry Know How

Industry Know How

Industry Know How

Industry Know How

❖ CASES

How you apply to Consulting firms will vary based on their
recruitment structure
McKinsey, Bain, BCG Strategy&, Monitor

Deloitte, EY-Parthenon, ZS
Global Recruitment
Submit one application with
Regional Recruitment
up to three office selections, Submit one application to one
broken down by rankings and office; relationships with
percentage; global offices are individual
relationships with offices

Example “Optimal” MBB Structures
General Advice
• Try to keep the number of markets you are primarily targeting to a minimum
• Invest in local office networking in any market you are applying to, particularly non-home countries
• You do not need to have three options – very rarely will you get called from an office you mark with < 30%
• McKinsey has areas you can apply to: General, Digital, and Operations – do due diligence before choosing!
• Send out all the applications you can! Generally students will send out 7-8 application for internship, and the
average interviews is 1.9 interviews (MBA2021), 25% of students got at least one offer
Background: Finance in Atlanta, United States Background: Engineering in Spain
McKinsey Bain BCG McKinsey Bain BCG

London (60%) London (50%) London (50%) Santiago de C (60%) Mx City (60%) Mx City (60%)
Atlanta (40%) Dubai (30%) Dubai (30%) Madrid (40%) Buenos Aires (40%) Dubai (40%)
Atlanta (20%) Atlanta (20%)
Background: Oil & Gas from São Paulo Background: General Management in China
McKinsey Bain BCG McKinsey Bain BCG

São Paulo (100%) Amsterdam (60%) Dubai (60%) Shanghai (100%) Shanghai (100%) Dubai (50%)
São Paulo (40%) São Paulo (40%) Singapore (30%)
Shanghai (20%)

Example “Optimal” MBB Structures
General Advice
• KYC: Follow partners from offices, reading the content they are publishing, to gain information on the regional issues
• KYC: Ask questions to the 2nd years! Where do we have relationships? What do they wish they had done differently?
Also, use this guide to better understand.
• Personal networking can break you into other offices – every year almost all offers come from on-campus recruiting,
but one or two students will network their way into an office we do not have a relationship with!
• Understand that there is on-campus and off-campus search
Background: Finance in New Delhi

McKinsey Bain BCG Monitor RB Kearney S& Delta EY-P
London Amsterdam Dubai (60%) Amsterdam Amsterdam Dubai Dubai Dubai London
(100%) (60%)
London London
(40%) (40%)

Piece of advice in predicting hiring rate
• Begin with previous years’ FT hiring – Mexico, Brazil, and UK went up, UAE maintained,
Germany went down
• Look at internship hiring in your target offices – Did they take a big internship class? Are they
doing Fall internships? These are negative indicators for FT recruitment
• Choose the “most obvious” path to increase your success rate – Focusing on home office will
increase likelihood of interviews, without a doubt.
• Always talk to someone from your “top choice” office – Applying blind in 1st year really,
really is a bad idea!
• Understand the regional situation – How has that region handled COVID-19? Are many of
their clients in oil & gas (negative indicator)? Do they specialize in restructuring, finance, etc.
(positive indicator)?
• Don’t get over-sucked into “trends” – Occam’s Razor, the easiest answer is often the best.

Region Profile
The “IESE Big 5”: Spain
Madrid Barcelona
Relationship McKinsey, Bain, BCG, Kearney, Monitor Globalpraxis, Minsait, Delta Partners
Deloitte, EY-Parthenon, ZS
Languages Native or near-native Spanish Native or very near native Spanish (Catalan not
required)
Passport Very likely Spanish, though there are Boutiques have been more flexible, though
occasional exceptions Spanish passport is an advantage
Challenges Competitive process (high # application for MBBs usually recruits from Madrid*; boutiques
limited spots) may favor relevant experience, recruitment
timeline is later
25 25
21 23 21 22 21  Full time offers *McKinsey and BCG have recently
18
expressed interest in formalizing a Barcelona
office; however, to date there extremely few
post-IESE Barcelona placements to these
firms.
2014 2015 2016 2017 2018 2019 2020 2021
26 34 28 14  Internships
Region Profile
The “IESE Big 5”: United Kingdom + Ireland
London Ireland
Relationship McKinsey, Bain, BCG, Kearney, Monitor Deloitte, EY-Parthenon, Little MBA recruitment;
ZS, Roland Berger connected to London in MBB
Languages Native or near-native English

Passport Full sponsorship available
Challenges Very close to near native English preferred by MBB, ZS/LEK
more flexible; Competitive process (inter-IESE and with
LBS/Cambridge/Oxford/INSEAD)
13
11  Full time offers
9
6 6 7
2 2
2014 2015 2016 2017 2018 2019 2020 2021
Region Profile
The “IESE Big 5”: Middle East
Dubai Riyadh Qatar
Relationship McKinsey, Bain, BCG, Kearney, Strategy&, McKinsey, BCG McKinsey, BCG, Bain
Roland Berger, Arthur D. Little, Delta
Partners
Languages Arabic a plus, not required Arabic a plus, not Arabic a plus, not required
required
Passport Full sponsorship available Full sponsorship available Full sponsorship available
Challenges The most internationally-accessible market, Small but growing, local Small but growing, must
but recruitment will be very dependent on fit be able to answer, “Why
state of affairs in MENA, particularly in Saudi; Qatar and not Dubai?”
Bain and McKinsey typically recruit more for
full-time
16
13  Full time offers *Beirut, Cairo, Marrakech: Relationships
12
8 8 with McKinsey, Bain, and BCG: markets
5 are open to those with passport and/or
language connections, but markets are
1 1 much smaller
2014 2015 2016 2017 2018 2019 2020 2021
Region Profile
The “IESE Big 5”: Mexico
Mexico City Monterrey
Relationship McKinsey, Bain, BCG, Kearney, Accenture, Little MBA recruitment; you will likely
MasterCard Advisors, EY-Parthenon, Strategy& begin in Mexico City unless you have a
very clear reason to go to Monterrey
Languages High level Spanish required

Passport Mexican passport preferred, not required
Challenges Work authorization for Mexico could be complicated

(but there are workarounds), connection to Mexico
must be established
8
6
 Full time offers
4
3 3 3
2 2
2014 2015 2016 2017 2018 2019 2020 2021

Region Profile
The “IESE Big 5”: Brazil
São Paolo Rio de Janeiro
Relationship McKinsey, Bain, BCG, Roland Berger, Little MBA recruitment; you will likely begin
MasterCard Advisors in São Paulo
Languages High-level Portuguese required
Passport Sponsorship provided

Challenges Portuguese will typically be the major barrier;
currency devaluation provides a long-term risk
11
8
6
3 3 3
2
2014 2015 2016 2017 2018 2019 2020 2021

Region Profile
EU Markets: Nordics
Copenhagen Oslo, Stockholm, Helsinki Reykjavik
Relationship McKinsey, Bain, BCG McKinsey, Bain, BCG Little MBA recruitment
Languages Strong Danish (McK); Somewhat Flexible Local Language (McK);

(Bain & BCG) Somewhat Flexible (Bain &
BCG)
Passport Full sponsorship available Full sponsorship available
Challenges Very particular about the answer to the “Why this country?” question and
connection to these markets; smaller market means less competition, but
fewer spots
2 2 2
1 1
0 0 0
2014 2015 2016 2017 2018 2019 2020 2021
2 1  Internships
Region Profile
EU Markets: BeNeLux
Amsterdam Brussels, Antwerp Luxembourg
Relationship McKinsey, Bain, BCG, Strategy&, McKinsey, Bain, BCG Most work
Roland Berger, Monitor Deloitte performed via
other markets
Languages Dutch (McK); Somewhat Flexible Strong English; French/Germany/Dutch
(BCG); Strong English only (Bain, skills required (McKinsey);
S&, Monitor) Germany/Dutch skills preferred, but not
required (Bain/BCG); French skills also
valuable

Challenges Why this country? Competition in “Why this country/city question;” Smaller
medium-sized market will varies market means less competition but fewer
spots

4 4
3 3 3
2 2
2014 2015 2016 2017 2018 2019 2020 2021

Region Profile
EU Markets: DACH
Germany & Austria Switzerland
Relationship McKinsey, Bain, BCG, Roland Berger, DHL McKinsey, Bain, BCG
Consulting, Siemens Advanta, Accenture,
Bayer In-house Consulting
Languages High level (not native) German (MBB, RB, French and/or German (McKinsey, BCG), French
Accenture); None (Siemens, Bayer, DHL) and/or German preferred (Bain)

Challenges The market is very open, the barrier to entry Language barrier, Why this country?
for almost all students is the language

10
7 7 8
6
3 3
2014 2015 2016 2017 2018 2019 2020 2021

Region Profile
EU Markets: Rest of Europe
France Milan, Lisbon Eastern Europe & Russia
Relationship BCG McKinsey, Bain, BCG, Roland Berger, McKinsey, Bain, BCG, Kearney
Alix Partners (Milan Only) (Bucharest)
Languages Native French Native or near-native Native local languages

Italian/Portuguese
Passport EU passport Sponsorship available Local passports

Challenges The market strongly Perception of worse work/life balance; Market is open to those with
prefers graduates of top more often full-time recruiters; smaller passport and/or language
French markets connections
engineering/business
schools
5
4 4 4
3 3
2
1
2014 2015 2016 2017 2018 2019 2020 2021
IESE CONSULTING CLUB
6 4 0 3  Internships IESE CASE BOOK 2021 | 36
Region Profile
Africa & APAC: Sub-Saharan Africa
Lagos Other Cities
Relationship McKinsey, Bain, BCG McKinsey, Bain, BCG
Languages Native or near-native English Native or near-native local languages
Passport Nigerian preferred, not required Full sponsorship available
Challenges Interviews are common, but connection to the Connection to market must be established in one
Nigerian market should be well established way or another; smaller markets
1 1 1  Full time offers
0 0 0 0 0
2014 2015 2016 2017 2018 2019 2020 2021
Region Profile
Africa & APAC: Australia & South Africa
Sydney, Melbourne, Auckland Johannesburg
Relationship McKinsey, Bain, BCG McKinsey, Bain, BCG
Languages Native or near-native English Native or near-native English
Passport Australian or New Zealand passport or work Full sponsorship available

authorization
Challenges Work authorization has become more Few applicants annually, connection to at least the
restrictive in the past few years, making this a Sub-Saharan African market must be established
challenging market to target
3
2 2
1 1 1 1
0
2014 2015 2016 2017 2018 2019 2020 2021
Region Profile
Africa & APAC: Greater China Region
Shanghai, Beijing Hong Kong Taiwan
Relationship McKinsey, Bain, BCG, Kearney McKinsey, Bain, BCG McKinsey, Bain, BCG
Languages Mandarin/Cantonese required Mandarin Mandarin required
Passport Full sponsorship available Full sponsorship available Full sponsorship available
Challenges IESE’s brand is not strong in IESE’s brand is not strong in IESE’s brand is not strong in
China; candidates’ university Hong Kong, few annual Taiwan, few annual applicants
and work experiences will be applicants means little data means little data
strongly looked at
2 2 2
1 1
0 0 0
2014 2015 2016 2017 2018 2019 2020 2021
Region Profile
Africa & APAC: Rest of APAC
Tokyo Singapore Seoul, Bangkok, Manila, Jakarta)
Relationship McKinsey, Bain, BCG, McKinsey, Bain, BCG McKinsey, Bain, BCG, Kearney,
Kearney, Strategy&, Monitor Samsung GSG (full-time)
Deloitte
Languages Japanese required East Asian languages preferred, Local languages required
not required
Passport Full sponsorship available Full sponsorship available Local passports strongly preferred
Challenges Process to recruit in Japan is Few applicants annually, and First rounds will likely be in English,
very different than all other strong competition from other top out of the Singapore office – so
offices, companies come business schools English language barrier an issue
much earlier on a different
timeline; 3- to 5- week
internships
11 11
7 8
4 4 3
2
2014 2015 2016 2017 2018 2019 2020 2021
Region Profile
Americas: Canada & USA
Chicago, Miami, Boston, Atlanta, Vancouver, Toronto, New York, San Montreal
Minneapolis, LA Francisco
Relationship McKinsey, BCG; Bain (weakly) MBB, (weakly) McKinsey, Bain, BCG
Languages Native English required English required French required
Passport US passport required US passport for NY and SF Full sponsorship available
Challenges Competition with the US business Incredibly high competition from top- Few applicants annually,
schools; smart networking and strong US business schools, but our sample and strong competition
profile important size is very small from other top business
schools
4
3 3
2 2 2
1 1
2014 2015 2016 2017 2018 2019 2020 2021

Region Profile
Americas: Colombia & Peru
Bogota & Medellin Lima
Relationship McKinsey, Bain, BCG, Kearney, Virtus McKinsey, Bain, BCG
Partners, MasterCard Advisors
Languages High level Spanish required High level Spanish required
Challenges Why this country? Competition in medium- Why this country? Must establish a connection to
sized market will vary based on # of IESE a very small market
applications
5
4 4
1 1 1 1
0
2014 2015 2016 2017 2018 2019 2020 2021
Region Profile
Americas: Argentina & Chile
Santiago de Chile Buenos Aires
Relationship McKinsey, Bain, BCG, Kearney, Virtus McKinsey, Bain, BCG

Partners, MasterCard Advisors
Languages High level Spanish required High level Spanish required
Challenges Why this country? Competition in medium- Economic issues. Why this country? Competition
sized market will vary based on # of IESE in medium-sized market will vary based on # of
applications IESE applications
7
5
3
2
1 1
0 0
2014 2015 2016 2017 2018 2019 2020 2021
How To Use This Case Book
1 4 2 1
3 3
We designed this book to be practical and straightforward for both the interviewer and the interviewee. Read the following
instructions to ensure a smooth application process and to extract most value out of this case book.
•1 Red titles mean information that the interviewer has to give to the interviewee, including the prompt, clarifying questions and
exhibits.
•2 Exhibit pages provide necessary information to interviewees solve the cases and should be handed in their entirety when
instructions asked to do so
•3 Green titles mean information that can help the interviewer in guiding the case including expected takeaways, expected
considerations, calculations and sample recommendations. Interviewers should not disclose this information to candidates but
use it to guide themselves into the flow of the case and help candidates in navigating the numbers.
•4 Each case is classified by its industry, theme, and concept tested as well as by its level of difficulty.

❖ INTRODUCTION TO THE CASE INTERVIEW METHODOLOGY
CONTENT
❖ FRAMEWORKS & REGIONS INFO
❖ CASES

❖ CASES 2nd Edition
CONTENT
Eurotech By Íñigo Arteche (IESE MBA 2022)
Crunch Yo’ Burger By Pieter Swart (IESE MBA 2021)
Transantiago By Michael Stefanic (IESE MBA 2022)
California Wildfires By Alan Bleiberg (IESE MBA 2022)
South bank By Giancarlo Young (IESE MBA 2022)

Eurotech
By Íñigo Arteche
TMT Easy
M&A Medium
Profitability Hard

TMT Easy
M&A Medium
Eurotech Profitability Hard
Total time: 36-45 min

CASE FLOW – FOR INTERVIEWER
Prompt & exhibit I Structure Exhibit II & quant Risk brainstorming Recommendation
Time: 5-7 mins Time: 6-10 min Time: 12-15 min Time: 8 mins Time: 5 mins
Main Objectives: Main Objectives: Main Objectives: Main Objectives: Main Objectives:
• Understand the • Elaborate a structure • Calculate the main • Elaborate a list of • Outline target
industry & company to address the synergies risks associated with synergy
size problem • Notice one-off costs the NewCo synergy • Comment on main
• Address the problem • Use main levers (cost • Understand the implementation and synergies
to be solved: synergy and revenue) as part difference between future operations • Elaborate on risks
calculation of the structure target and potential and mitigation
synergy actions
(*) Refers to the manufacturing and installation of reception devices (antennas), transmission infrastructure (Wiring), and end-terminals (set-top-boxes, smart TVs, phones…)
TMT Easy
M&A Medium
PROMPT CLARIFYING POINTS (if asked)

• If the interviewee asks to know more about the audio-visual industry, show exhibit I
Two technologic firms within the audio- • The companies work on a per project basis, mainly for hospitality segment (75% of their revenue)
visual tech industry have decided to join
• Their operations are limited to the manufacturing & assembly of the Hardware components, the
forces. Their market*: manufacturing of installation is done by a third party
Hardware components for audio-visual • The companies are not based in the same country, one company is in France and the other in Poland
transmission has been declining at a 14% • They are both of similar size and have similar operations
rate and this has affected their • The French company owns two plants (one in Southern France and the other next to Paris) while the
profitability jeopardizing their future Polish part owns one bigger plant near Warsaw
operations. • The objective is to improve their common profitability by a 10% of the aggregated revenues
Both of their CEOs have agreed on

contracting a consulting firm to help them CASE GUIDANCE
navigate the process.
The objective of this case is to test the candidate’s ability to navigate through an M&A operation between
technological firms. It is designed to test brainstorming and focuses on a not very known industry to test
Your job is to size the potential synergies the candidate’s capacity of applying a structured approach to divide the problem into more manageable
that the operation may yield for the parts.
NewCo in the future
The case is not to test the specific knowledge on the AV infrastructure market, but to test the proficiency on
how to confront a merger operation, more concretely, how to approach the synergy calculation.
(*) Refers to the manufacturing and installation of reception devices (antennas), transmission infrastructure (Wiring), and end-terminals (set-top-boxes, smart TVs, phones…)
TMT Easy
M&A Medium
Eurotech – Exhibit 1 Profitability Hard
INDUSTRY INSIGHTS PRODUCT CATEGORIES – HW TRANSMISSION

• 80% of TAM1 depends on Hospitality
purchases
• Hotels have recently been moving to
Software services, reducing RECEPTION TRANSMISSION TERMINALS
dependence on Hardware providers Antennas, Encoders, & Wiring for different End user devices such
• Market size for HW companies has Converters* signals and network as Smart TVs, Tablets,
been declining for the last 3Y (see devices computers…
graph)
MAIN COMPETITORS AND 3Y CAGR
800
680 660 CLIENT CLIENT
Country
LY Revenue M€ 150 85 83 75 70
2018 2019 2020
3Y CAGR -20% -10% -5%** -12.5% -15%
EU Total Accessible Market (M€)
Notes: (*) An encoder/converter is a device that converts different signals (Satellite, Terrestrial, IP…) into playable content (video and/or audio). (**) The Swedish competitor has
recently acquired a SW company which is offsetting its decline in sales. | Glossary: (1) Total Accessible Market
TMT Easy
M&A Medium
GUIDANCE
This exhibit is for the candidate to understand better the industry, it is important to try to link it to the reason behind the M&A operation
The candidate should notice that:
1. The market is experiencing an overall decline ( (660-800)/800 = -140/800 = -7/40 = -17.5%). If the candidate makes the calculation, it would be
considered positive
2. This decline is caused by the fact that clients are switching traditional Hardware for Software services. If the candidate notices that the Swedish
sales have declined less due to the acquisition of a Software firm it would be considered a plus
3. The operation will create the biggest company in the market (75+80 = 155M€)
4. The Polish company initially presents a better financial outlook (lesser decline than most competitors and bigger revenues)
5. The market relies heavily on one type of client: hospitality. If the candidate links the fact that consumers now bring the content linked to their
devices (i.e. Netflix, Hulu…) to the increased importance of software services it would be considered a good understanding of the industry
behaviour
6. Finally, the candidate should try to guess that since the industry is experiencing such a decrease, the operation might help capture synergies
that help both companies survive in such a demanding market
If the candidate does not suggest the reason for the operation, the interviewer might ask him/her to brainstorm a set of possible reasons. When
synergies come up, the interviewer might suggest moving on to the structure.

TMT Easy
M&A Medium
STRUCTURE QUESTION
The interviewer will ask the candidate to create and present a structure to address the potential synergies upcoming from the
M&A operation
STRUCTURE GUIDANCE
The candidate needs to identify the information that will help him solve the problem:
• He should indicate that there are two main sources of synergies: sales and costs
• In terms of sales synergies, the candidate should indicate that there is potential due to access to new clients, countries,
and products that were exclusive to each of the companies
• In terms of cost synergies, the candidate should explain that there are potential synergies and elaborate on the
different lines where the companies can save costs from merging (i.e.. Purchase of raw materials, direct labour
reductions and/or relocations, R&D costs, and selling/administrative)
• Last, the candidate could create a bucket to assess the feasibility/risks associated with the synergy calculation

TMT Easy
M&A Medium
Eurotech – Proposed structure Profitability Hard
Products • New potential cross-selling opportunities coming from gaining access to:
SALES SYNERGIES ✓ New products
Geographies ✓ New countries
✓ New clients
Products
Raw Materials • Potential Savings in terms of purchasing and supplier optimization
Direct Labour • Cost reduction derived from optimization of production process

COST SYNERGIES
R&D • Savings associated to duplicated R&D functions
Structure Costs • Potential savings in centralizing Selling & Administrative costs
• Risk analysis for determining potential threat to synergy consecution i.e..

OTHER Risks cannibalization, high costs associated with terminations, reputational risks,
liquidity issues…
CONSIDERATIONS
• Feasibility of the merger operation: action plan, funding & liquidity, stage of the
Feasibility
industry (i.e. mature close to obsoletion…)
Notes: (*) An encoder/converter is a device that converts different signals (Satellite, Terrestrial, IP…) into playable content (video and/or audio). (**) The Swedish competitor has
recently acquired a SW company which is offsetting its decline in sales. | Glossary: (1) Total Accessible Market
TMT Easy
M&A Medium
REVENUES FY20 ADDITIONAL INFO

All Numbers in M€ French Company Polish Company
• Variable Costs have remained
Revenues 70 85
stable over the last 10 years and
Variable Costs 10 11.5 are not expected to change
Raw Materials (components, 9 9.5 since relation with the provider
wirings, hardware pieces…) is good
Transportation 1 1.5
Energy 1 0.5 • Fixed costs have been increasing
Fixed Costs 55 50.5 over the last 5 years at a slow
steady pace (no hiring nor firing
Production (Salaries of employees) 42 33.5 has occurred for the last 6 years)
Research & Development 10 15
Sales and Administration 3 2
Operational Profit 5 23

TMT Easy
M&A Medium
GUIDANCE
If the candidate asks:
1. There is enough capacity in Poland to move production from France, with the associated increase in Fix Cost (salaries)
2. Termination costs in France (associated with production employees in France) have been estimated to be 10M€ (one-off)
3. The sale of the French Plant would lead to a net profit of 2M€
4. The candidate can consider a target of 70% consecution of the potential synergy. The candidate should indicate that 100% of the synergy is
not attainable.
The candidate should notice that:

1. Raw Materials (small electronic components that both companies assemble to create their products) are being managed more efficiently in
Poland, it could be an effect of volume but with such a difference it is more likely that they are working with different providers
2. French salaries are consuming a big portion of profitability. The candidate should be able to associate this to the fact that wages in France are
much higher than in Poland, and ask if it is possible to shift production from France to Poland
3. He should also notice that Poland is spending more on R&D and state that for a technologic company this is a relevant issue, if he links it with
the lesser decline seen in Exhibit I it would be considered a plus
In conclusion, candidate should state that the Polish have a leaner operation and that this gives them the possibility to invest more in R&D and
retain sales with more advanced products.
Gathering all this information the candidate should propose to move on with the structure and start the synergies analysis.
TMT Easy
M&A Medium
QUANTITATIVE ANALYSIS
For the quantitative analysis, the interviewer will ask the candidate to calculate the synergies between the two players using the information contained in the first exhibit.
(It is important that the candidate makes the calculation with at least 2 decimals, specially for the ratios)
SOLUTION
• Sales synergies (0M€): here the candidate should brainstorm some ideas on where he thinks the synergies are (i.e. cross-selling of non-common products, access to
new countries…). He should state that this type of synergy is more uncertain and speak about the possibility of cannibalization. The interviewer should indicate the
candidate to consider zero in terms of sales synergies.
• Raw Materials: here the candidate should use the purchasing ratio from Poland to quantify the potential synergy behind Raw Materials. 9 – (70 x 9.5/85) = 1.17M€
• Production: in terms of salaries, the candidate should try to explore the possibility of moving production to Poland, as it is more cost-efficient this would yield: 42 –
(70 x 33.5 / 85) = 42 -27.588 = 14.41 M€
• Research & Development: here the candidate should notice that this cost is duplicated, with one R&D department they would be able to serve the whole organization,
and since the Polish one seems to be more effective (in terms of sales) he could propose to move all R&D to Poland maintaining the Polish budget. 10M€, all French
R&D cost
• Sales & Administration: same reasoning as before yet more unclear since Spain would need to retain some Financial controllers/administrative staff. 2-3M€
Target Recurrent Saving of:
(1.17 + 14.41 + 10 + 2.5) x 0.7 = 28.09 x 0.7 = 19.66 M€
One-off Profits/Losses:
+2 – 10 = -8 M€
TMT Easy
M&A Medium
BRAINSTORMING QUESTION
Last, the interviewer must ask the candidate to elaborate on the last point of the plan, which is risks/feasibility. The candidate
must elaborate a list of risks that could harm the synergies and the profitability of the NewCo in the future. (Broader scope)
SAMPLE ANSWERS
The candidate should explore the different risks associated with the future of the NewCo. If he proposes a structure that is
linked to profitability, it would be considered a plus, i.e.:
REVENUES VARIABLE COSTS FIX COSTS
• Substitute products • Increase in the price of • Moving production from France

• Competitive environment (i.e., components to Poland might not be possible
price-war) • Decline in bargaining power (gov. pressure, legal procedures…)
• Failure in the R&D process against suppliers (i.e., bankruptcy • Employee dismissal may harm
• Harming client relations of current providers) reputation in the French market
• … • Increase in the price of utilities… • Loss of capacity in the R&D
function…

TMT Easy
M&A Medium
RECOMMENDATION QUESTION
After this analysis, the client has called us, they want us to have a call with them and propose them our main conclusions over
the synergy analysis. You have 2 minutes to elaborate an adequate response that captures what we have been discussing during
the project.
SAMPLE RECOMMENDATION
• The response should start by first answering the question of how much potential does the operation has in terms of
synergies ( ~20M€).
• The candidate should explain that this number has been calculated using a safety coefficient that assumes that the NewCo
will be able to capture a 70% of the potential synergy
• Then he should move to explain where the synergies are mainly being captured: Production and R&D
• He should talk as well about one-off profit/losses: in Year 0 (2021) the company would experience a -8M€ loss due mainly to
the termination costs associated with the employees in the French plant
• Present a brief risk analysis, if he speaks about the French employment laws and the fact that moving production to Poland
might be difficult/costly it would also be considered a plus. Presenting risk mitigation initiatives would also be considered
positive.
• Last, he should try to establish a small action plan or suggest a follow up to the call
Crunch Yo’ Burger
By Pieter Swart
Food service Easy

Profitability Medium
Operations Hard

Food service Easy
Crunch Yo’ Burger Operations Hard
UPFRONT NOTE FOR INTERVIEWER

• This case is designed to be as long or short as you want
• There are two optional estimations to test candidate’s market sizing ability
– # Subway restaurants in the US
– # of sit-in customers per Subway per day
• If you are short on time, you can simply give the candidates the values of these inputs
• If the candidate would like to practice estimations, they can estimate these inputs

Food service Easy
INTRO PROMPT CLARIFYING POINTS (if asked)

• You are the CEO of a large • Your company sells fast food that is cooked onsite (similar price point
multinational fast food chain to McDonald’s/Subway)
• In recent years, you have noticed • Crunch Yo’ Burger operates all its own stores (i.e. no franchises)
that your profitability in the US has
• There are four major players in the market, differentiated only by the
been lagging behind competitors
type of food they offer (prices are the same)
• Your Board of Directors would like – Crunch Yo’ Burger makes hamburgers
to know: – TacoCo sells tacos and other Mexican food
– Why profitability is below that of – NoodleCo is focused on different varieties of noodles
competitors
– PizzaCo sells pizzas
– How you plan to get profitability back
in line • We are concerned only with the US operations of Crunch Yo' Burger
and its competitors
• Our customers can be either takeout or eat-in customers
• Note for interviewer: If asked for detailed figures on profit or revenue,
tell the candidate you will show an exhibit after you have seen their
IESE CONSULTING CLUB structure IESE CASE BOOK 2021 | 61
Food service Easy
EXAMPLE CANDIDATE RESPONSE: SAMPLE STRUCTURE

Trends • Are health trends negatively impacting our burgers more than other foods?
Market growth
• Has regulation affected the industry (forced players to use healthier and more expensive ingredients,
External market Regulation limited growth etc.)?
• Have competitors recently become more profitable?

Competitors Performance • Did any of our big competitors recently make any changes to their offering?
• Are there any new competitors?

New entrants • Did any existing competitors consolidate to get economies of scale?
• This is a price sensitive market, so we can assume that prices have not changed much flat, is this
Price correct?
• Have we run any excessive discounts recently?
Revenue
Quantity • Have we opened or closed any branches recently?
• Are we upselling / cross-selling enough?
• Are we selling less high-priced food products?

Profit Product mix • How are we bundling products together?
• Typical fixed costs might be rental, labour, utilities etc. – how have these evolved?
Fixed costs • Are we tied into any long-term contracts for rentals?
Costs • Variable costs are food, packaging, cooking utensils – how have these evolved?
• Are we taking advantage of bulk discounts by centralizing purchasing?
• Any changes in food (commodity) prices that have adversely affected us in particular? (e.g. beef – since
Variable costs we use more beef than competitors)
• Product mix – could we be selling more products that have higher variable costs? 62
Once the candidate has given an overview of their structure, hand them Exhibit 1 (revenues and profits) and let them use this to
decide where they should focus
Food service Easy
Crunch Yo’ Burger – Exhibit 1 Operations Hard
REVENUE AND PROFITS (ONLY FOR US)
Note: Food variable costs relate

to raw ingredients that are
actually eaten by customers,
non-food variable costs are all
other variable costs
Food service Easy
Crunch Yo’ Burger – Exhibit 1 Operations Hard
EXAMPLE CANDIDATE RESPONSE

• This chart shows 2017 and 2018 revenues of the four main players, including our own company (Crunch Yo' Burger),
as well as 2018 net profits
• We can see that Crunch Yo' Burger has the highest revenue, thus we are the market leader in fast food in the US
• Revenue growth rates for all competitors have been ~10% since 2017; hypothesis is that this is not a revenue issue
• If we divide net profit by revenues to be able to compare margins, Crunch Yo' Burger has the lowest net profit
margin out of its peer group (~1% vs competitors in range of 1.5-2%); this extra 0.5% represents ~$100M
• This issue is caused by non-food variable costs (11% of sales for Crunch Yo’ Burger vs 10% of sales for our peers),
and we should investigate these costs further
• Note for interviewer: The presentation of the chart (showing net profit in absolute terms and variable cost as % of
sales in relative terms is intentional in order to ensure that the candidate can turn these into comparable figures

Food service Easy
FOLLOW UP QUESTION AFTER EXHIBIT

• We have concluded that Crunch Yo' Burger’s cost issues lie in its non-food related variable costs
• What are some creative ways in which Crunch Yo' Burger could decrease these costs?
• Some of the major non-food costs that we would have are:
– Condiments (ketchup packets or ketchup dispenser)
– Packaging (burger wrappers, soda cups)
– Other consumables (napkins toilet paper, plastic cutlery, hand sanitizer)
• Some ways to reduce these could be:
– Limit ketchup to 1 packet per order, and charge extra for extra packets
– Use cheaper packaging (although this might pose an environmental and customer experience risk)
– Limit the number of napkins per customer by handing them out at the teller (this might cause a delay in getting orders out) or
by setting up a napkin dispensing machine
• Note for interviewer: Try steer the candidate towards napkins, in order to set up the next part of the case; if the
candidate does not arrive at this, mention it as a high potential solution

Food service Easy
CALCULATION QUESTION
• Crunch Yo' Burger is considering purchasing a machine that dispenses napkins one by one (Napkins are currently
placed a large stack, customers take a few at a time before they sit down to eat)
• 1 machine will be needed per store, and needs to be replaced every 2 years; cost is $1000 per machine
• How much money can Crunch Yo' Burger save per year by implementing this machine?
– What are the inputs you would need in the calculation and how would you structure it?
– How much money is saved?
– This solution will only apply to eat-in customers
• Note for interviewer: You should try to assess the candidate on two elements here:
– How well they structure their calculation – do they identify all the elements in a logical way?
– How well they execute the calculation

Food service Easy
Crunch Yo’ Burger Note for interviewer: remember this

case has 2 optional estimations! If you
Operations Hard
want the candidate to estimate, use

‘long version’ prompts
CALCULATION SOLUTION
Decrease in Number of Number of Cost per napkin Days per year Total gross
napkins per customers per stores in the US saving
X store per day X X X =
customer
3 960 22500 $0.005 365 ~$118M
-
• Before the • Short version of • Short version of • Napkins are • Candidate can
machine, the case: Give the case: Give purchased in assume 360 to Cost of machine
customers took figure of 960 sit- figure of 22500 boxes of 6000 make
5 napkins each in customers per stores in US napkins. A box calculations
store per day costs $28 easier
• If machine is • Long version of
implemented, it • Long version of the case: • Note: Allow • Important that ~$11M
will reduce to 2 the case: Candidate candidate to the candidate =
per customer Candidate should estimate round to $0.005 notes takes note
should estimate this (see (half a cent) if that fast food Total net saving
this (see Optional needed restaurants tend
Optional Estimation 2) to be open most
Estimation 1) days of the year
~$106M
Food service Easy
OPTIONAL ESTIMATIONS
EXAMPLE RESPONSE: ESTIMATION #1 – # OF SIT-IN EXAMPLE RESPONSE: ESTIMATION #2 –
CUSTOMERS IN TYPICAL SUBWAY RESTAURANT PER DAY # OF SUBWAY RESTAURANTS IN THE US
• Assume a typical Subway or similar takeout restaurant has ~30 tables, with ~4 chairs • We have 50 states in the US, let’s assume each state is split into rural and urban
per table; capacity of 120 sit-in customers • Urban areas mostly comprise two large cities
• Rural areas are small towns
• Assume it is typically open from 6am to 10pm to sit-in customers (16 hours a day)
• There are 150 Subways stores per city, potential way to estimate this:
• 50% of the time is peak (8/16 hours), 50% of the time is off-peak (8/16 hours), – Each large city is roughly 10 km long by 10km wide
(example breakdown in table below) – Each km has roughly 12 blocks
– Thus 120 blocks long by 120 blocks wide = 15000 blocks per city
• During peak hours, the restaurant is 80% full – Let’s assume that as you walk, you are likely to encounter a Subway store every 10 blocks, thus
150 Subways per city
• During non-peak hours, the restaurant is 20% full
• Average meal duration is 1 hour (i.e. in a 3 hour time period, a table is rotated 3 times) • Let’s assume the cities contain 2/3 of all Subway restaurants, and the towns the
remaining 1/3, Thus 2*150 = 300 Subway restaurants in cities, and 150 in towns =
Capacity 450 Subway restaurants per state
Timeslot Peak/ off-peak utilisation Calculation # customers
• 450*50 states = 22,500 Subway restaurants in the US
06:00-09:00 Peak 80% 120*3hrs*80% 288
• Note for interviewer: There are many potential ways in which the candidate could do
09:00-12:00 Off-peak 20% 120*3hrs*20% 72 this estimation (land area or Subway restaurant per person)
12:00-14:00 Peak 80% 120*2hrs*80% 192
14:00-18:00 Off-peak 20% 120*4hrs*20% 96
18:00-21:00 Peak 80% 120*3hrs*80% 288
21:00-22:00 Off-peak 20% 120*1hrs*20% 24
IESE CONSULTING CLUB Total 960 IESE CASE BOOK 2021 | 68

Food service Easy
EXAMPLE CANDIDATE RESPONSE: INTERPRETATION OF SAVINGS VALUE

• We have calculated that we will save $106M per year
• This $106M represents an additional 0.5% of net profit margin
• With this additional saving, our profit margin will increase from 1% to 1.5%, putting us within the band of our
competitors (although still at the lower end)
• We should consider other cost-saving initiatives to continue to increase profitability
PROMPT: BRAINSTORM
What are some other ways we could save on variable costs?
• Raw materials bulk discounts
• Extend useful life of consumable utensils
• Run similar initiatives with ketchup, straws etc.
• Decrease cost of napkins (cheaper napkins)
• Note for interviewer: There are many potential options here, extra points for creativity
Food service Easy
PROMPT FOR FINAL RECOMMENDATION

• You have a 45-second slot in the Board meeting tomorrow to update the Board on your progress. What will you say?
EXAMPLE CANDIDATE RESPONSE: RECOMMENDATION

• (Candidate should assume an air of authority and confidence when addressing board)
• Good day and welcome
• We have run a diagnosis and can conclude that our lower profitability is caused by high non-food variable costs, specifically in napkins
– customers are currently using excessive napkins when they enter our stores
• We have found a way of bringing our net profit margin closer in line with our competitors, increasing it from 1% to 1.5% by
implementing a new napkin dispensing machine in all of our stores
• This machine will reduce napkins taken per customer by 3 napkins (60%), and on a national scale, save Crunch Yo' Burger ~$100M per
year
• There are some implementation risks related to customer experience and ease-of-use of this new machine
• In order to mitigate these risks we will pilot the machine in 100 stores nation wide and record feedback and improvements
• Furthermore, we are investigating similar cost-saving initiatives in our ketchup and straw dispensing, in order to surpass the
profitability of competitors
70
Transantiago
By Michael Stefanic
Transportation Easy
Public Sector Hard

Transportation Easy
Transantiago Public Sector Hard

• The main goal is to see if they will be able to cover all their operating costs this year
Transantiago is the public transportation system of
Santiago de Chile. It is managed by the Ministry of • The only actual source of revenue is the transportation tickets sold
Transportation and has more than 5 million users, • Each ticket can be used in buses and subway or mixing both
integrating all the city's urban buses and subway. • The only price discrimination is if it is a student or not
Transantiago' s main source of revenue is the one
generated by the tickets sold. They have two types
of tickets. One normal ticket, that has a price of 2
dollars per trip, and one discounted tickets, that
CASE GUIDANCE
has a price of 1 dollar.
This is an interviewee-led case, where the candidate is expected to drive the case and suggest the next
With this revenue, plus a fixed subsidy of 900
course of action.
Million USD, Transantiago must cover all their
operating costs of the year. This case strongly focuses on profitability and requires the interviewee to think about the cost and revenue
Suppose it is April 2021. The Ministry of and analyse the total impact generated considering both. Also, the candidate must consider the risk behind
the forecast and the consequences if some of the forecasted numbers are not reached.
Transportation has called you because, After
Covid-19, Transantiago has been experiencing a From the quantitative aspect, the interviewee will have to connect numbers given in different stages of the
substantial decrease in the demand and is worried case.
if they to cover all their operating costs. That's Since the case is talking about a service that has a big social impact, the interviewee is expected to be aware
why they want you to investigate all the possible of the consequences of each of his decisions and try to pick the solution the impacts the less.
impacts of Covid-19 and see how they will be able
to cover all their operating costs this year.

Transportation Easy
STRUCTURE GUIDANCE
The structure for this case should be mainly about profit. The more related to transportation, the better. A good candidate should also consider all the risks and limitations
involved in this process since we are talking about a case in the public sector under a lot of uncertainty. After the candidate presented the structure, handle Exhibit 1 or 2
depending on the candidate's request.
Before handling Exhibit 2, ask the candidate to do a brainstorming of the main operating costs and possible covid-19 impact on them.
SAMPLE STRUCTURE
Price of ticket
Tickets Revenue
Number of trips
Revenue Subsidy
Publicity
Others
Profits Partnerships
Maintenance
Limitations
Electricity
Risks Operating Costs
Drivers
Fuel

Transportation Easy
Transantiago – Exhibit 1 Public Sector Hard
DEMAND FORECAST
Normal Ticket Students
Total Trips projected 2021 500 million 100 million
Expected price 2 USD 1 USD*
Scenarios Covid Impact

Optimist (30%) -10% -30%
Neutral (40%) -20% -60%
Pessimist (30%) -30% -100%
*Note: Prices for Students can not be modified during 2021

Transportation Easy
DEMAND FORECAST ANALYSIS

From Exhibit 1 the candidate should understand the differences between each passenger and each one of the scenarios. A good candidate should be
aware of the consequences of only considering an average scenario since there is a significant risk if the pessimistic scenario happens.
Also, it is expected that the candidate takes some shortcut to calculate the revenue of each type of ticket, special for the “Normal Ticket”.
NEW EXPECTED REVENUE

Revenue Normal Tickets = Normal Price * Expected Demand = 2 USD * 400 MM = 800 MM USD
Expected Demand = Projected Demand * (1+Expected Impact Covid) = 500 MM * (1-20%) = 400 MM
Expected Impact Covid = 0,3*-10% + 0,4*-20% + 0,3*-30% = -20%
Revenue Student Tickets = Students Price * Expected Demand = 1 USD * 37 MM = 37 MM USD

Expected Demand = Projected Demand * (1+Expected Impact Covid) = 100 MM * (1-63%) = 37 MM
Expected Impact Covid = 0,3*-30% + 0,4*-60% + 0,3*-100% = -63%
TOTAL REVENUE = Revenue Normal Tickets + Revenue Student Tickets = 837 MM USD

Transportation Easy
Transantiago – Exhibit 2 Public Sector Hard
INITIAL COSTS PROJECTION

Total Costs* MM USD 2,000
Covid-19 Effects
Buses 1,500 • Average price of oil is expected to decrease 20% versus the
Maintenance 300 initial projected price
Fuel 500
Total Kilometres MM km 1000
Consumption Lt/km 0,5 • Average price of electricity is expected to decrease 10%
Price of oil USD/lt 1
versus the initial projected price
Bus drivers 500
Other costs 200
• Night curfews we will have two effects (only for buses):
Subway 500
Maintenance 100 • Bus driver's cost will decrease 10% because fewer part-
Electricity 100 time drivers will be required
Total Kilometres MM km 200
• The total amount of kilometres of buses will be
Consumption Kwh/km 1
Price of electricity USD/Kwh 0,5 reduced by 10%
Subway drivers 200
Other costs 100
*Note: This cost where projected before Covid-19 effects

Transportation Easy
COSTS ANALYSIS
Brainstorm - Before handling Exhibit 2, the candidate is asked to do a brainstorming of the main operating costs and possible covid-19 impact on them.
For the brainstorm, the candidate is expected to mention most of the costs shown in the exhibit and some of the covid effects.
From Exhibit 2 the candidate is challenged to quickly understand all the information and see the relationship between each of the numbers with the
covid-19 effect mentioned. Also, the candidate must understand the different types of units shown on the table.
NEW EXPECTED COST

New Fuel Cost = New Total Kilometres * Consumption * New Oil Price = 900 MM * 0.5 * 0.8 = 360 MM USD
New Total Kilometres = Original Total Kilometres * (1 – Night Reduction) = 1000 MM * (1-10%) = 900 MM
New Oil Price = Original Oil Price *(1 - Oil Price Change) = 1 * (1-20%) = 0.8
New Electricity Cost = Total Kilometres * Consumption * New Electricity Price = 200 MM * 1 * 0.45 = 90 MM USD
New Electricity Price = Original Electricity Price *(1 - Electricity Price Change) = 0.5 * (1-10%) = 0.45
New Bus Drivers Cost = Original Bus Drivers Cost * (1 – Night Reduction) = 500 MM * (1-10%) = 450 MM USD
TOTAL COSTS = Original Total Cost – Change in Fuel Cost – Change in Electricity Cost – Change in Bus Drivers Cost = 2000 MM – 140 MM – 10 MM – 50 MM = 1800 MM USD
Change in Fuel Cost = Original Fuel Cost – New Fuel Cost = 500 MM – 360 MM = 140 MM USD
Change in Electricity Cost = Original Electricity Cost – New Electricity Cost = 100 MM – 90 MM = 10 MM USD
Change in Bus Drivers Cost = Original Bus Drivers Cost – New Bus Drivers Cost = 500 MM – 450 MM = 50 MM USD

Transportation Easy
PROFIT ANALYSIS
After analysing all the revenue and costs, the candidate should be able to link both and conclude that there will be a deficit of -63 MM USD. The
candidate is expected to start thinking about options to cover the expected deficit for this year. A good candidate will also mention that all these
numbers are based on an average scenario and that the final difference could be covered or even increase depending on many of the variables.
Ask the candidate to do a brainstorm of possible solutions and, if there is time, ask him to quantify one of them.
A good candidate would deliver his brainstorm in a structured way.
POSSIBLE SOLUTIONS
Revenue solutions
Tickets Revenue 837 MM • Increase the price of the “Normal Ticket” – the price should be increased by 13 cents (6%)
Revenue • Increase safety measures to generate more demand – it would be required an increase of
Subsidy 900 MM 31,5 MM “normal tickets”
-63 MM • Ask for more Subsidy – An increase of 63 MM USD (7%)
Profits
• Create other source of revenue
Cost solutions
Operating Costs 1800 MM • Decrease the kilometres to reduce costs – it would be required a decrease of 160 MM
kilometres of Bus (17%)
Other
• Wait until July to see which of the scenarios occur before taking actions that may not be
necessary

Transportation Easy
The Ministry of Transportation has entered the room and is asking you for your analysis and recommendation.
The recommendation should be given in a structured way. Starting with the concrete action, then the reason behind that action, and after that,
mention the risks involved. A possible recommendation structure would be:
1) Action/conclusion: Mention that, after the analysis, we will have a gap of 63 million and bring up one of the possible solutions from the final
brainstorm.
2) Reason: Give two or three reasons why he thinks that is a good solution for the problem.
3) Risks: Assess the possible negative impacts of the recommendation. A good candidate should also mention the risk behind all the numbers analysed,
since they are all based on forecasts and could have high variability.
4) Recommendation: Give a future recommendation to improve the analysis or to increase the action's probabilities of success.

California Wildfires
By Alan Bleiberg
Public Sector Easy

Climate Change Medium
Strategic Response Hard

Public Sector Easy
California Wildfires Strategic Response Hard
PROMPT
The state of California has experienced devastating wildfires in recent years, causing deaths and billions of dollars worth of damage.
The disasters are only projected to intensify, and the government needs to act fast. The governor has hired you to propose an action
plan for prevention and mitigation. What factors would you analyse?
STRUCTURE GUIDANCE
Given the open-ended nature and scale of the problem, there are a variety of approaches. However, the candidate’s structure should cover the
following key aspects of the problem. Push the candidate to brainstorm and elaborate on ideas, as the rest of the case is speculative.
Diagnosing Crisis Action Measures Feasibility
Geographic Trends Over Ability to Legal and

Causes of Fire Prevention Response Time Horizon Financial Cost
Spread Time Implement Regulatory
• Understand what are current prevention methods and • What are the costs and ability to implement the proposed
• What are the causes of wildfires and where do they what are addressable gaps? solutions?
occur? • What are the current response tactics? What new or • Are there legal barriers from stakeholders (lawmakers,
• Are certain causes more preventable than others? existing tactics should be implemented? utility companies, private sector)?
• Are come types of wildfires more devastating than others? • Action measures should be categorized by time-horizon: • Given scale, feasibility should be factor considered for each
• Understand any trends (time of year, certain geography, short-term quick fixes and long-term infrastructure solution.
identifiable causes)? changes
• What is the effectiveness of various strategies?

Public Sector Easy
California Wildfires – Exhibit 1 Strategic Response Hard
CALIFORNIA HISTORICAL WILDFIRE REPORT

Number of Fires by Source Total Area Burned by Source (Thousand Acres)
6.400 460
4.500
270
3.000 220
1.200 1.250 1.400 100 95

80 70
40 50
350 500 450
2000 2010 2020 2000 2010 2020

Utilities Failure Human Error (campfires, cigarettes, gender reveals) Natural Causes (lightning)

Public Sector Easy
INSIGHT ANALYSIS
Hand over Exhibit 1 if the interviewee asks about causes of wildfires or trends over time
EXPECTED TAKEWAYS FROM EXHIBIT

Candidate should note the temporal data set and identify trends and outliers
• Candidate should explain that fires due to human error have increased over the last 20 years (2x), while other causes of fires are relatively constant
• Next, candidate should note two observations on the quantity of acres burned:
1. In-line with increased quantities of fires, acres burned due to human error has steadily increased over the last 20 years
a) Candidate should note these are likely frequent but smaller fires, hence the relative magnitude is not extremely high
b) Candidate should highlight this is an area to focus on prevention, as the cause is avoidable and various policies should be able to
reverse the increase
2. The candidate should also note outlier years, 2010 (natural causes) and 2021 (utilities)
a) Candidate should speculate these were likely single “disaster” fires that inflate the year’s statistics
b) Candidate should think these are likely impossible to prevent in the short-term due to the nature of the cause, but could suggest long-
term prevention or mitigation measures
• Let the candidate think out loud and drive ideas, but next present Exhibit 2
83
Public Sector Easy
2022 CALIFORNIA DEPARTMENT OF FORESTRY ANALYSIS
% of
Cost to Build Residential Annual % that are Avg Property
City Structures
SafeWall 1 ($M) Structures Wildfires catastrophic 2 Value ($M)
At-Risk
Oakland 6.4 400,000 2% 10 5% 1.00
Santa Barbara 7.0 100,000 4% 15 15% 2.50
Sacramento 5.8 250,000 3% 12 10% 0.50
Notes
1. SafeWall reduces the probability of a catastrophic fire by 50%
2. “Catastrophic” defined as destroying 10% of at-risk structures

Public Sector Easy
An environmental minister has suggested that a fireproof structure, SafeWall, could be built and would reduce the
probability of a catastrophic wildfire. To start, they can only build around one city – which should they build and why?
SOLUTION
Candidate should assess each option and systematically compare the expected outcomes
Step 1: Calculate the at-risk value in each location: Residential % of Structures Total At-Risk Avg Property Total At-Risk
City
Residential Structures * % At Risk * Avg Property Value Structures At-Risk Structures Value ($M) Value ($B)
#1 Oakland 400,000 2% 8,000 1.00 8.00
Step 2: Calculate the likelihood of catastrophic fire in each location Santa Barbara 100,000 4% 4,000 2.50 10.00
Annual Wildfires * % that are catastrophic Sacramento 250,000 3% 7,500 0.50 3.75
Step 3 Multiply the probability of a catastrophic fire by the at-risk value in each location Annual % that are Expected
City
by 10% destruction. Reduce expected damage by 50% to determine Value Saved Wildfires catastrophic Catastrophic Fires
At Risk Value * Expected Wildfires * 10% Destruction; → * 50% reduction and Compare Values #2 Oakland 10 5% 0.5
Santa Barbara 15 15% 2.25
Expected Insight:
• Candidate should note that SafeWall in Santa Barbara would save the most Sacramento 12 10% 1.2
value ($1B) compared to the other locations (~5x)
Total At- Expected Damage of Expected Cost,
• Candidate should take a stance on basing the decision on financial Impact of Expected Cost, Value Saved
City Risk Value Catastrophic Catastrophic No SafeWall
considerations compared to population or at-risk structures. SafeWall SafeWall ($M) ($M)
($B) Fires Fire ($M)
Candidate should note more data is needed on population.
• Should note that construction costs are not a factor given #3 Oakland 8.00 0.5 10% 400 50% 200 200
relatively similar in all locations Santa Barbara 10.00 2.25 10% 2,250 50% 1,125 1,125
Sacramento 3.75 1.2 10% 450 50% 225 225

Public Sector Easy
California Wildfires Strategic Response Hard
Between your structured approach & data provided, what are your recommendations for the governor?
Allow for flexibility based on the candidate’s structure. A balance of creativity and practicality should be embraced
• Based on data trends, action should be taken to reduce the frequency of wildfires from human error
• Long-term solutions should also be implemented to mitigate “disaster” fires that cause more damage
• Building SafeWall around Santa Barbara is expected to save over $1B in real estate value, 5x the value of other locations
• Overall response risks are plentiful, namely effectiveness, cost, and ability to implement
• Action steps should be relevant to the prior conclusions and include other proposed solutions, such as:
Short-Term Actions Long-Term Changes (Infrastructure)

• Station more firefighters
• Update high-risk power lines
• Purchase more water-planes
• Clear break-lines in forests
• Ban the use of campfires
• Implement drone detection fleet
• More frequent forest management

South bank
By Giancarlo Young
Financial Services Easy

Product launch Medium
Profitability Hard

South bank Profitability Hard

South Bank (SB) is the leading retail bank in • Peru has 35 M inhabitants. The local currency is PEN. Adults represent 70% of population.
Peru, an emerging South American country. • Country has 3 main economic segments, with clear different behaviours in credit card use.
SB has a dominant performance on high- • Consider Credit Card business as an independent unit of analysis.
income and a very good performance in • Revenues are only generated by merchant fee, a percentage of the amount paid with the
medium-income customers but has not been card. During the last years has been stable at 2%.
capable of entering to low-income market. • Each client can only have 1 credit card at the same time.
CMO has told us that his team has been • To be approved, a project is required to have a payback period of 3 years. As a secondary
evaluating the option to launch a new credit metric, CMO prefers to generate the highest possible net cash flow in the first 3 years.
card with cashback benefits, which are
perceived as much more valuable in this
segment, and the product has already shown CASE GUIDANCE
some results in competitors.
The case requires the candidate to financially estimate (using payback period) the feasibility
Currently, SB has a credit card with a loyalty of launching this new product and assess the option of a new sales channel. After calculating
program based on airline miles. This program both results, as a counterbalance, there are qualitative, country-related situations that have
is considered part of a strategic alliance with to be considered and open a chance to brainstorm, and even propose a different
an important regional airline. recommendation.
The candidate will need to ask for information to create a market sizing logic. Then, the
The CMO would like you to evaluate if it is interviewer can start showing exhibits. Is expected to work with order to avoid reprocessing
convenient to invest in this project. and don’t get confused with numbers.

STRUCTURE GUIDANCE
• Candidate should focus on main aspects that imply to release a new product: financial impact, market situation, risks involved, and capabilities that
the company has.
SAMPLE STRUCTURE
I) Revenues: # customers, frequency of use, size of ticket, merchant fee value.

FINANCIALS II) Costs: variable -> sales commissions, plastic cards, loyalty program; fixed -> wages, system maintenance
I) Competitors: BS market share, positioning, value proposition

MARKET II) Clients: segments, purchase behaviours and perceptions
III) Ecosystem: availability of POS, trends in cashless options
I) Commercial: brand awareness, know how of regional needs and customs

CAPABILITIES II) Financial: Budget for investment, need of additional CAPEX/OPEX
III) Operational: scale and granularity of sales force, logistics for credit card supply
I) Financial: small ROI

RISKS II) Commercial: bad experience of user because of lack of knowledge regarding credit cards or not enough
POS to pay, cannibalization vs current credit card
QUANTITATIVE ANALYSIS, PART 1

• Candidate should propose a market sizing as first action, explaining the reasoning before doing numbers. Interviewer should show EXHIBIT 1 once
the candidate has identified many variables implied. Candidate should mention macro features (e.g. large market vs small ticket and small
penetration)
• After having calculated revenue per segment, challenge the idea (so what?) of entering low income since is a very small market (3% of total, 0.3% of
BS revenues).
• If the candidate only considers calculating values for low-income segment, is adequate. Still, he/she should calculate all segments in order to
compare them and find some insights of the whole potential.
SOLUTION, PART 1
Credit Card Spending per Merchant fee
Total Adult Population, by Market share
penetration year 2%
population population % income (# cards)
(# cards) (PEN) (PEN)
high = 10% 80% 60% 100 K

2.45 M 1.96 M 1.176 M 117.6 B 2.352 B
70%
medium = 30% 50% 30% 30 K
35 M 24.5 M 7.35 M 3.675 M 1.102 M 33.075 B 661.5 M
low = 60% 10% 5% 6K
14.5 M 1.47 M 0.0735 M 441 M 8.82 M
South bank – Exhibit 1 Profitability Hard
CREDIT CARD MARKET MAIN INDICATORS
% of Credit card SB market Avg. spending

Segments
population penetration share per year
High-income 10% 80% 60% 100,000
Medium-income 30% 50% 30% 30,000
Low-income 60% 10% 5% 6,000

QUANTITATIVE ANALYSIS, PART 2

• Once the interviewee calculates the revenues, the interviewer has to indicate that we have receive additional information about 2 options of sales
channels: traditional (branches) or online. Criteria for choosing an alternative remain the same as indicated during clarifying questions.
• Interviewer mentions main revenues and costs (see SOLUTION, PART 2).
• Once cash flows have been calculated, show (in EXHIBIT 2) that we don’t have branches in the majority of low-income regions.
SOLUTION, PART 2
• Compare marginal impact on branches vs online sales:
o Market share growth (# cards) -> branches: from 5% to 15%; online: from 5% to 8%. Average spending and merchant fee remains the same.
o Variable costs (paid only at year 0) -> plastic card emission = PEN 5 // sales commission (per card sold) = PEN 50
o Variable costs (paid every period) -> cashback = 1% of payments, per year
o Fixed costs (paid every period) -> online channel maintenance = PEN 200 K per year
o Net cash flow after 3 years (PEN) -> Branches = 18.4 M vs. Online = 7.2 M. Payback time = 1 year for both options.
Branches // # new cards = 147 K 0 1-3 Online sales // # new cards = 44.1 K 0 1-3
Payments 882 M Payments 264.6 M
Revenue 17.64 M Revenue 5.29 M
Costs (plastic & sales) (8.085 M) 0 Costs (plastic & online) (0.735 M) (0.200 M)
Cashback (8.82 M) Cashback (2.65 M)
Margin (8.085 M) 8.82 M Margin (0.735 M) 2.65 M
PERU’S POLITICAL MAP
• Lima City concentrates around 10M inhabitants (disregard the segment), medium-
income regions represent other 10M inhabitants, and 15M inhabitants live in low-
income regions.
• Branch penetration is usually preceded by a developed POS ecosystem,
implemented by a Credit Card global company.
• Technologies adopted by low-income segment: 65% has a smartphone, 65% has
Internet access.
Lima City High penetration of SB branches

High income regions
Medium income regions
Low income regions

TAKEAWAYS
• The candidate should recognize that we don’t have any presence in the majority of low-income regions. Thus, it would imply an additional
investment in building branches.
• A good candidate should also consider the cash flow differences between sales channels (PEN 18.4M – 7.2M = 11.2M) as additional CAPEX that
could be used for building branches and still generating higher cash flows vs online.
• Since Lima City has the third part of Peru’s population, is probable that there is a hidden low-income segment that we can prioritize. The same for
other high-income, medium-income regions.
• Leverage on technologies could help to foster financial literacy or as payment methods.

1. What are the main potential problems/risks that we have in order to launch the new product?
2. What would you suggest to do to hedge these risks?
SAMPLE ANSWERS
1. Candidate should bundle possible risks:
• Commercial: acquiring the card through online sales could be daunting, clients don’t understand how to use the card, 1% cashback could
not be perceived as attractive, erosion of partnership with airline.
• Financial: clients show high default levels, high-income clients turn to cashback credit card (cannibalization).
• Operational: there are not enough POS nor branches in the majority of low-income regions, low density of population in low-income
regions.
2. Bundling is, again, a good practice:

• Commercial: partner with local authorities or leaders to give financial education and training, focus on capture competitors’ clients using
higher cashback or other discounts, revisit analysis and focus on high-density, higher-income regions.
• Financial: evaluate if opening mini-branches (less CAPEX).
• Operational: deliver credit cards by courier, negotiate with Credit Card provider/competitors/government to accelerate POS instalment,
evaluate other technologies as Digital Credit Card (in smartphones).

What is your recommendation to South Bank CMO?
• The candidate should recommend implementing the project. Payback period is only 1 year regardless of sales channel. Ideally, he/she should
suggest implementing branches, because they generate higher net cash flows in the first 3 years.
• Consider that, if we have to invest more than PEN 11.2 M in opening new branches, is better to go online.
• As possible risks to consider: low adoption of product (due to access, lack of knowledge, or small POS network), potential cannibalization, and
erosion on airline partnership.
• Finally, mention next steps: consider push POS penetration with Credit Card provider or even with competitors, work on financial education, etc.
A good candidate will:

• Recognize that there is an underlying, structural problem that has to be solved to increase probability of success. He/she explains that the project
is a long-run bet, since these markets have to be developed.
• Consider other costs/losses as defaults or frauds, and suggest a sensitivity analysis (e.g. % of market captured, payback period required = 1 year,
higher cashback %).
• Size how many low-income clients are in medium or high-income regions. For instance, Lima City probably has a relevant low-income population,
and already counts with a high branch penetration.
• Ponder to explore medium-income segment, since the size, penetration and market share put SB in a better position.
CONTENT
❖ CASES

SEMI MATERIALS CO.
By CB2
Manufacturing Easy
Growth Strategy Medium
Profitability Hard

KPI 2020 (F) 2019 2018
Industry OP 11.0% 8.8% 7.3% Manufacturing Easy
Average Growth 0% (6.9%) 7.7% Growth Strategy Medium
SEMI MATERIALS CO. Goal
Client
OP
Growth
OP
13.0%
2.0%
11.0%
10.8%
(4.9%)
9.5%
9.3%
9.7%
6.0%
Profitability Hard
Growth 0.9% (6.4%) 9.0%

• What is the goal? 2pp over the industry average (for OP and Revenue Growth)
Your client is the CEO of a semiconductor
• What is 2020 goal? What was the previous year’s goal/actuals? (refer to table above)
material manufacturer. The product they sell
are ‘lead frames’, which is a technology that *The time of this case is late 2019, so COVID-19 was not a thing. The case ignores the effect of COVID-19.
emerged in the 1970s and is a core component **2019 shows minus growth due to the downturn of the semiconductor industry (no relations with COVID-19)
to build electronic components such as ICs used • Global presence: Client main office located in Taiwan, global business (80% of their revenue) done through local
in automotive solutions. The client is in Asia agents and distributors (commissions to these agents and distributors are 3% of the final price)
and most of their customers are global chip • Factory: one factory only in Taiwan (20~30% idle capacity, so they did not see the need of another factory)
manufacturers for automotive and consumer
• Main costs? 50% materials (Copper), 30% labor, 10% SG&A (including agent/distribution fees)
electronics (NXP, IDT, etc.…).
The client’s company is a subsidiary of a global • Diversification: they are looking into new technologies/businesses, but it is forecasted to take at least 5 years for
the revenue to materialize (currently new businesses is less than 0.5% of revenue)
conglomerate, and the conglomerate’s HQ sets
annual goals for all subsidiaries. among many
parameters the most weight is given to OP CASE GUIDANCE
(operating profit) and Revenue Growth.
The client did not meet last year’s goal and is This case is a profitability case with an extra emphasis on revenue growth.
asking you, the main consultant, for ways to Semiconductor materials business is something that most candidates are not familiar with, and this is
achieve this year’s (2020) goal. intentional to gauge the candidate’s ability to produce ideas within uncertainty. So, If the candidate asks
about technical aspects you can respond by saying that the industry and technology is very mature and
technical details are not relevant.
Lead frames are basically a thin plate of copper where a chip is mounted. Think of a PCB made of copper.

Manufacturing Easy
SEMI MATERIALS CO. Profitability Hard
STRUCTURE GUIDANCE SAMPLE STRUCTURE

Good structure should branch out from the client’s goal: revenue growth
and operating profit and touch upon the below points
Current customers
• No overlap on revenue growth and increase OP (core businesses)
• Increase in OP should be focused on cutting costs as revenue growth Increase revenue
is already another bucket New customers
(new business)
Meet client’s goal
• Increase Revenue Growth
- clear distinction of the next buckets (go by customers // regions // Material costs
product segments // price & volume, etc.…) Increase OP
(cut costs)
Labor costs
• Operating Profit (cutting costs)
- clear separate buckets regarding costs Logistics costs
Agent costs*
(extra points!!)
IESE CONSULTING CLUB IESE CASE BOOK 2021 |100

Manufacturing Easy
EXHIBIT ANALYSIS QUESTION

The candidate should be presented with the following Exhibit (next page) and be asked to analyze it.
Answers to clarifying questions

• Client’s forecasted revenue growth? 1%
• Client’s forecasted operating profit? 11%
• The bubbles represent the top 6 players (including our client) in the Lead frame market
• Biggest bubble (competitor A) revenue is $352M
• The revenues and operating profit is for the Lead frame business only
EXHIBIT ANALYSIS SAMPLE SOLUTION

A good analysis of the Exhibit will start by explaining the goal of the client then breaking down the Exhibit into smaller parts
• Goal and general explanation

- Client is above industry average in terms of revenue growth (1pp), but in on par in terms of operating profits.
- However, as the client’s goal is 2pp over the industry average, the client is failing to achieve the goal
• Breakdown
- Bubble Size: All 6 players have a very similar Bubble Size, but it seems our client is one of the smallest players among the top 6
- YoY Revenue : Revenue growth in the market ranges from -0.5% to 5%, which seems to be a narrow/wide range (depending on what they back up with)
(extra points: as most of the top industry players are over the average in terms of growth, smaller players must be showing negative growth)
- Operating Profit: Most top 6 players are around the industry average, which makes sense as it is a materials business (upstream, little differentiation)
IESE CONSULTING CLUB Operating Costs = COGS + Operating Expenditure [Revenue*(1 – Operating Profit)] IESE CASE BOOK 2021 |101
Manufacturing Easy
EXHIBIT (2020 Lead frame Forecasted Revenue and Operating Profit)

Operating Profit (%) Bubble Size = Revenue ($M)
Industry Average Growth : 0.0%
15
14
13 E A
12 Client C
Industry Average OP:
11.0% 11 $237M
D
10
B
9
8
7
6
-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0%
*Client’s target is 2pp over industry average YoY Revenue
**YoY = Year over Year Growth(%)
Manufacturing Easy
QUANTATIVE ANALYSIS QUESTION (from the same Exhibit)

Assuming that the client meets the revenue growth target, and keeping the absolute value of Operating Costs constant, how much additional costs does
the client have to save in order to meet the operating profit target? Operating cost are COGS and operating expenditures combined.
• After the prompt, share with the candidate to think of the information they need and ask freely
• If the candidate has a hard time, tell guide them to start with the revenue then the operating costs
• If the candidate still struggles, tell him/her that the $237M revenue in 2020 is assuming 1% growth, and guide them through reaching the revenue if the
growth was 2%
QUANTATIVE ANALYSIS SOLUTION

2020 Revenue : $237.0M (Given) 2020 Operating Costs (OP of 11%) : $211M ($237 * 0.89)
2019 Revenue : $234.7M (237 / 1.01) 2020 Target Operating Costs (OP of 13%) assuming 2% revenue growth:
2020 Revenue IF target growth of 2% reached : $239.4M (234.7 * 1.02) $208.3M (239.4 * 0.87)
Additional OPEX reduction required: $2.7M (221 – 208.3)
IESE CONSULTING CLUB Operating Costs = COGS + Operating Expenditure [Revenue*(1 – Operating Profit)] IESE CASE BOOK 2021 |103
Manufacturing Easy
It is mid March 2020. Just as you are about to submit your proposal to the client, you hear that industry specialists are revising their forecasts due to
the pandemic (COVID-19) having real global impact. While most industry growth rates are revised to ‘minus growth’, you find out that the
semiconductor industry’s growth rates are being forecasted higher than before. Especially for Lead frames, the forecast has been revised from 0% to
+5% revenue growth. What do you think may be the reason of this phenomenon?
OPTIONAL QUESTION (if there is time left): how would this increased growth rate change your proposal to the client?
SAMPLE ANSWERS
Many answers are possible, but structure wise value chain analysis can be a good starting point
- Value Chain: Materials (copper) → client (Lead Frames) → client’s customers (semiconductors) → end customers (electronics)
1) Materials: price of copper might have gone down, due to decreased demand, pulling the price of copper down.
2) Client’s customers: disruption of the supply chain might have caused the client’s customers to hoard materials to keep their manufacturing lines
running and make sure there is no shortage of materials
3) End customers: Huge demand increase due to going virtual (from PCs, webcams, to data centers and servers)
Other answers may include:

1) Automotive and electronic industry are less sensitive to changes compared to retail and tourism (especially from effects of social distancing)
*Electric components in vehicles are increasing rapidly (also may mention Electric Vehicles and Autonomous Driving)
2) As Lead frames are upstream, the effects of COVID-19 might come later (but the candidate must still add a reason of the upward trend)

Manufacturing Easy
You must present your findings to the client, what would you recommend?
The client is close to their target. A 1pp in revenue growth and 2pp reduction of Operating Cost (2pp increase in operating profit) is doable.
If the candidate went through the case step by step the recommendation would be pretty clear.
A good answer may include:
• The candidate must reiterate the target and the current forecast (which is close to the goal)
• Includes absolute values (if in percentages even better) of the revenue increase and operating cost reduction required
• Comments on the change in forecast due to COVID and its implications (from brainstorming)

Thunder, Lightning, Strike
By CB3
Industry: Aerospace Easy

Operations Medium
Commercialization Hard

Operations Medium
Thunder, Lightning, Strike Commercialization Hard

• AirChief is heavily vertically integrated and intends to manufacture the product themselves.
Our client, AirChief, is a small industrial
• AirChief is one of two suppliers that sells the vast majority of specialized equipment for repairing aircraft,
company in Kansas, USA that manufactures including the leading current lightning strike repair solution (although all current solutions are vastly similar)
aircraft maintenance and repair equipment.
• AirChief’s goal is to achieve a profit by selling the technology they have developed.
Their clients include (1) commercial airlines • AirChief operates solely in the United States.
and (2) maintenance companies which • Lightning strike repair products are a small (think 4-6% revenue) part of their overall catalog. As a result
airlines outsource aircraft maintenance to. they are willing to wait a long time (5+ years) to see returns from a truly revolutionary product in the space
AirChief has developed a proprietary

chemical technology that allows airlines to CASE GUIDANCE
repair lightning strike damage much faster
than they currently can. They want to know The heart of this case is a rigorous test of the candidate’s ability to balance precise quantitative analysis with
whether they should commercialize said pure business sense and logical reasoning. Successful candidates will demonstrate not only an ability to
perform quant, but also to understand what it drives.
technology.
This case is designed to be primarily interviewee-led. Given the prompt and any clarifying points, the
interviewee shall prioritize areas of enquiry.
Candidates will need to ask questions to understand the dynamics of aircraft lightning strike damage and
the current and new proposed technologies, rather than making assumptions about a niche industry.

Operations Medium
STRUCTURE
A suitable structure should include, but is not limited to, the following elements:
• Market size: How large is the market that this technology could serve – how much lightning strike repair activity occurs?
• Value proposition to customer/pricing: How compelling is the technology to the end customers and what impact would it have on them? How
much would customers be prepared to pay if the technology was available to them?
• Cost to AirChief: What does AirChief have to spend on in order to manufacture and sell the technology?
• Risks: Could this cannibalize sales of other AirChief products? What are some competitive responses that should be anticipated?
STRUCTURE GUIDANCE
The structure could be in the format of Revenues and Costs to AirChief, incorporating the points above into either the “Revenue” or “Cost” buckets.
Other structures that demonstrate a clear grasp of the problem space are also acceptable.
The overall approach the candidate’s structure should “set up” is: evaluating the implications the technology has on the customer, and seeing whether
that is something the company would be able to capitalize on.
After the candidate presents their structure, allow them to go to any of the above steps, but ask why they have selected that step to do first
(later on, interviewer may direct the candidate to focus on market size and value proposition if they do not self-initiate those)

Operations Medium
TECHNICAL INFORMATION
At this point or later in the case, the candidate will need information on the nature of the new technology as well as the current lightning strike repair
process. Give the following information to the candidate if/when it is asked for.
Note: lightning strikes are a routine occurrence in commercial flights and typically do not pose a danger to aircraft or passengers.
CURRENT REPAIR NEW TECHNOLOGY

Lightning strikes typically cause small burns on the fuselage of an aircraft AirChief’s innovation builds on the current repair with a premade,
about the diameter of a shot glass. reusable vacuum bag containing a pouch with two chemicals that, when
mixed, consistently generates the exact heating the adhesive requires.
As part of the repair process, the damaged area must be placed under
vacuum pressure and heated according to a set temperature/time curve With AirChief’s device, technicians simply install the premade vacuum
to precisely activate a heat-sensitive adhesive. bag over the repair, break a seal within the pouch to mix the chemicals –
activating their exothermic* reaction – and walk away.
Currently, technicians must set up and program a complex heating device
and microcontroller to control the heating adequately, in addition to If the adhesive’s temperature/time curve is not met, the repair must be
making a one-use vacuum bag. Both are time-consuming processes. re-done, so the predictability a chemical reaction gives is a major draw.
*Exothermic reaction: a reaction that generates heat.

Operations Medium
MARKET SIZING
How would you determine the number of repairs that this technology could benefit?
DATA SOLUTION
Ask the candidate what components they would need to estimate the Number of lightning strikes per day:
market size. Then, the following may be provided: 3,000 flights * 0.1% struck by lightning = 3 lightning strikes per day
• 3,000 commercial flights occur per day in the US 1/3 of strikes result in both entry and exit burns:
• 0.1% of those flights get struck by lightning 3 lightning strikes per day * 1/3 = 1 “double burn” strike per day
• Aircraft are designed so that lightning travels through them and 2/ 3 of strikes result in only entry burn:
continues to the ground; this is their protection mechanism. 3 lightning strikes per day * 2/3 = 2 “single burn” strikes per day
On 1/3 of aircraft struck by lightning, the strike is strong enough that Total burns caused by lightning per day:
both the entry and exit points are burned (otherwise, only the entry 1 “double burn” + 2 “single burns” = 4 burns caused per day
point is burned) Total lightning strike burns that must be repaired per year:
• We need to know the number of repairs per year 4 per day * 350 days (approximation) = 1,400 repairs needed per year

Operations Medium
VALUE PROPOSITION TO CUSTOMER

Why may an airline prefer AirChief’s new technology to the current process?
The candidate should brainstorm reasons it may be compelling to airlines. Possible responses:
Allows airlines to avoid cost More repeatable and More environmentally
Saves airlines repair time of vacuum bag/heating reliable than current friendly as it’s reusable Saves technician labor cost
equipment process rather than one-use
Following brainstorm, direct candidate to focus on this point.
“Could we quantify the value of the time saved? How?”
DATA SOLUTION
US airlines typically fly their planes from 6am – midnight (6:00-24:00) daily. “The main savings is in avoidance of missed ticket revenue. The new tech would
allow airlines to fly a damaged airplane for 2 more hours than they would have
Lightning strike repairs are typically done overnight; airlines are allowed to fly for up to
been able to before, at either the beginning or end of a day.
24 hours before repairing damage.
I need to find out how much these 2 extra hours are worth to the airline”
In internal testing, AirChief technicians who take 8 hours to perform the current repair
Number of passengers on a plane:
process manage to complete repairs in 5 hours using a prototype of the new tech.
150 seats * 80% load factor = 120 passengers per flight
The typical airplane used in this market is a Boeing 737/Airbus A320, which seats 150.
Revenue generated by 2 hours of flying passengers:
Across flights of all durations, airplane tickets average $50/flight hour 120 passengers per flight * $50/ticket/flight hour * 2 hrs. = $12,000 in ticket sales
US airlines achieve a load factor of 80% (i.e. flights are 80% full) and a 7.5% margin on Margin airline collects from the generated revenue:
ticket sales $12,000 of ticket sales * 7.5% margin on tickets = $900 in profit

Operations Medium
COSTS
The following are costs that can be provided to the candidate if they ask.
• AirChief estimates $250,000 in fixed costs are needed to get regulatory approvals and purchase the manufacturing equipment needed to begin
producing the new product.
• Once the production line is up and running, unit production costs are estimated to be $1,200/unit (one unit repairs one instance of damage) and
there are no fixed production costs. Also, unit costs do not scale.
If the candidate has done the market sizing and value proposition analysis already, they should identify at this point that the business case is negative
(if not, direct them to do those steps)

Operations Medium
Can you think of any reasons AirChief may be able to command a higher price, that our analysis thus far hasn’t covered?
If needed, interviewer should eventually cue candidate to consider the question from the perspective of the airline, e.g.:
“We’ve determined that the new tech lets airlines avoid removing a damaged plane from service for 2 hours. From an airline’s point of view, what
happens when an airplane is unexpectedly unavailable for 2 hours?”
Candidate should identify that such a disruption would send a shock through a tightly coordinated flight network, causing missed transfers and
necessitating rerouting of passengers as well as potential financial compensation for cancelled tickets, etc. Such events also negatively impact the
airline’s brand reputation.
Follow-up question: “Qualitatively, how much do you think the cost of this disruption is compared to the other costs we’ve discussed up to now?”

Operations Medium
The AirChief executive team is about to return from attending a new plant opening in Alabama. They will be looking to know whether they should
set aside space in the new plant for this product. Could you prepare them a recommendation?
We recommend commercializing the chemical heating vacuum bag for lightning strike repairs. After studying airlines’ operations and how lighting
strikes affect them today, we believe airlines would be willing to pay a sum far exceeding the product’s cost. The 3 hours of repair time the product
saves allows airlines to avoid a disruption to their flight schedules altogether, as they could fully repair lightning strikes within regularly scheduled
overnight pauses, unlike before.
We have found the market size in lightning strikes occurring per year, and calculated the product’s impact on airline revenue per use. In order to
determine a fair price for the product, more analysis is now needed on the exact cost of airline flight disruptions, and we are prepared to support you
with this. However, given how attractive it is for airlines to be able to eliminate schedule disruptions due to unexpected lightning strikes, it is clearly
worth bringing this product to light.

Ganbei
By Participant CB4
FMCG Easy
Operations Hard

FMCG Easy
Ganbei Operations Hard

• Revenue in 2018 was £220 million, and the net profit margin was 50%.
Your client, Salford Breweries, is a medium
• The client currently has three breweries, all of which are in the United Kingdom.
sized brewer who has recently experienced
sales growth in the Chinese market. While • Sales in China is currently 360,000 hectolitres (hL), and 1.1M hL for the whole business (1 hL = 100L).
this is excellent news, Salford Breweries is • Salford Breweries currently only sells to the China and United Kingdom markets.
facing difficulty growing in a profitable • Salford Breweries sells a Lager, an IPA, and a Wheat Beer. The IPA became their best-seller in 2017.
manner.
The CEO of Salford Breweries has been

instructed by the board to improve the
CASE GUIDANCE
company’s net profit by 10% in 2019. She has This is an interviewee led case, the candidate should suggest the next steps as much as possible.
asked for your help in achieving this target.
The case focuses on the cost side of a profitability framework.
The case focuses largely on quantitative ability, but a good candidate will also discuss the qualitative risks.
Once the candidate has completed a structure, direct them to investigate costs first, then provide them
with Exhibit One. Once the candidate asks for more detail regarding sales, provide them with Exhibit Two.
If required, the candidate should be guided to assume that revenues will remain flat from 2018 to 2019.
Following Exhibits One and Two, candidates should realise that they are still short of target, and probe for
opportunities to reduce fixed costs. If the candidate asks for information regarding the client’s production
capacity, production capability, or fixed costs by brewery, provide them with Exhibit Three.
Guidance regarding the quantitative and qualitative aspects of this case have been included following the
exhibits, and as part of the brainstorming element.
FMCG Easy
STRUCTURE GUIDANCE
A good structure would, at minimum, touch on revenue and cost. The structure should also contain considerations regarding potential risks and
capability challenges, given the international context of this case.
SAMPLE STRUCTURE
A good candidate should touch on the key elements of a standard profitability framework, inclusive of:
• Revenue
• Quantity sold
• Revenue per unit
• Cost
• Variable costs, inclusive of production and logistics costs per unit
• Fixed costs, inclusive of brewery fixed costs, and other administrative and operational fixed costs
A strong candidate would expand into considerations such as:
• Capabilities required to export from the United Kingdom and import into China
• Capabilities required to manage a Chinese division, with regards to sales, marketing, and other business units
• Regulatory challenges, especially pertaining to the right to operate in an overseas market
117
FMCG Easy
QUANTITATIVE ANALYSIS – EXHIBITS ONE AND TWO

The candidate should proactively calculate the benefit of transitioning Chinese sales to a new brewery in China. Only the IPA should be produced in
China, as adding capability to produce Wheat Beer is not cost optimal, and there is currently no sales in China for Salford Breweries’ Lager.
As such, the benefit of supplying Chinese sales for IPA from a new Chinese brewery is equal to the variable production cost differential, less ongoing
fixed costs and less the investment required.
The candidate should be encouraged to determine if this will achieve the CEO’s profit target. The £5M cost saving does not satisfy the target of £11M.
SOLUTION
China Brewery Calculation
UK VC China VC Variable Cost Investment Fixed Cost Net Cost Total Cost
Beer Type per hL per hL China Demand Impact Required Impact Impact Decision Impact
IPA £85 £45 350,000 -£14,000,000 -£5,000,000 Proceed
£5,000,000
Lager £75 £40 0 £0 £4,000,000 0 Proceed -£5,000,000
Wheat Beer £105 £75 10,000 -£300,000 £5,000,000 £4,700,000 Do not proceed
CEO Target Calculation

2018 2018 2018 2019 2019 Profit Cost Reduction
Revenue Margin Profit Revenue Target Target
£220M 50% £110M £220M £121M £11M
FMCG Easy
EXHIBIT ONE
* Includes logistics costs to China
Notes: Opening a production facility in China would require an upfront investment of £5 million for a 500,000 hL
capacity brewery, with capability to produce both Lager and IPA. Capability to produce Wheat Beer is estimated to
cost an additional £5 million. Fixed costs are estimated to be £4M per annum.
FMCG Easy
EXHIBIT TWO

FMCG Easy
QUANTITATIVE ANALYSIS – EXHIBIT THREE

A strong candidate will seek to understand the impact of opening a new brewery in China on the remainder of the client’s production network. Per case
guidance, if a candidate asks for more detail regarding the capacity and/or capability of the client’s existing network, provide them with Exhibit Three.
The candidate should then identify the opportunity to close the Manchester brewery, and calculate the benefit of doing so with consideration for fixed
cost reduction, offset by the expenditure required to install IPA production capability at the Sheffield brewery. The total benefit of doing so is £6.5M,
bringing the total benefit of proposed changed to £11.5M, exceeding the target of £11M.
SOLUTION
Brewery Footprint Rationalization Calculation

Capacity Utilized Capacity Utilized Post- Capacity Utilized Capability Expenditure Fixed Cost Total Cost Impact of
Brewery Capacity Now China Transition Post-Closure to Produce IPA Impact Brewery Closure
Sheffield 750,000 410,000 410,000 710,000 £1,000,000 0
Manchester 650,000 650,000 300,000 -£7,500,000
-£6,500,000
Hackney 50,000 40,000 40,000 40,000 £0 0
China 500,000 0 350,000 350,000 £0 0

FMCG Easy
EXHIBIT THREE
Production Capability by Brewery, CapEx required

Fixed Costs
Brewery Lager IPA Wheat Beer Per Annum
Sheffield £1M £5M £10M
Manchester £5M £7.5M
Hackney £2.7M
£5M, £0 if IPA
China (Estimate) capability exists £5M £5M £4M
Capability already exists

FMCG Easy
What risks do you foresee regarding this change to Salford Breweries’ production network?
SAMPLE ANSWERS
Operational:
• Product quality
• Commissioning of Chinese brewery
Financial:
• Accuracy of fixed and variable cost estimates
• Potential remediation/closure costs of Manchester brewery, including staff redundancies
Public relations and regulatory:
• Union/labour force reaction to brewery closure
• Chinese consumer perception of Chinese produced beer
• Will a joint venture be required to expand the client’s presence in China?

FMCG Easy
The CEO will join us in one minute to discuss our findings, how would you recommend she achieve her 2019 profit target?
The candidate should recommend that:
• Salford Breweries should open a brewery in China, which should have the capability to produce IPA and Lager, but not Wheat Beer.
• Salford Breweries should close their existing Manchester brewery, and add capability to produce Lager at the Sheffield brewery.
• The above changes will result in a cost saving of £11.5M, which exceeds the CEO’s target of £11M profit improvement.
A great candidate would also briefly discuss relevant risks and next steps, including:
• Operational risks, including potential challenges ensuring product quality and efficient scale-up of Chinese operations.
• Financial risks, including accuracy of variable and fixed cost estimates of new brewery.
• Risks pertaining to public relations, including impact of closing Manchester brewery.
• Next steps: Determine feasibility of opening a brewery in China and scaling up operations in the country, quantify opportunity to introduce Salford
Breweries’ Lager into the Chinese market.
7SHIRTS – ONLINE APPAREL BRAND
CB7
Apparel Easy
E-commerce Medium
Profitability Hard

Apparel Easy
E-commerce Medium
7SHIRTS – ONLINE APPAREL BRAND Profitability Hard

• The company has a turnover of about 1,5M with a growth of 20% in the last two
Our client is an Italian online years. The net profit is still positive but it went down by 21% in 2020 after a
apparel store called 7SHIRTS. The stable growth.
company sells casual pants, polo • There is no specific profitability goal.
shirts, sweaters but it is famous for • The company does not manufacture the products directly. It buys them from a
its unique trendy patterned shirts. supplier and sells them online under its own 7SHIRTS brand.
The value proposition is to have the • The company sells in five European countries: Italy, France, Spain, UK, Germany
perfect shirt for each day of the
week. The company has CASE GUIDANCE
experienced a strong growth in the This is an interviewee-led case and the candidate should drive the case and
last two years but the profitability suggest the next course of action.
has declined in the last year. This is a profitability case focused on the cost side and optimization of the
marketing channels. The candidate should identify that the strong growth in the
The CEO has hired us to understand marketing spending has reduced the profitability due to the focus on the least
the reason of the decline and to profitable marketing tool and on lower margin product. Market and competitors
receive suggestions on how to can have an impact on the marketing tool profitability, but the main focus of the
improve profitability. case is on internal actions.

Apparel Easy
E-commerce Medium
STRUCTURE GUIDANCE
The candidate should have a form of profitability tree with a focus on the cost side and product mix. The candidate should ideally
brainstorm about all the possible costs in an online apparel company. In terms of costs, the candidate should mention the basics:
COGS, shipping, marketing, salary.
When it is done, direct the candidate on Exhibit 1
EXHIBIT 1 - TAKEAWAYS EXHIBIT 2 - TAKEAWAYS

The Exhibit 1 shows the revenue from 2017 to 2020 divided The Exhibit 2 is full of information to understand if the
by category product. The candidate should identify that the candidate can connect different sources of information.
growth has led to a shift of product mix toward shirts. Eventually, the candidate should notice that the marketing
cost is driving the increase of cost. The focus of the marketing
budget on shirts, namely the product with less margin, is one
of the main drivers causing the shift in the product mix and
the consequent increase of COGS.

Apparel Easy
E-commerce Medium
The candidate should calculate the difference between the customer lifetime value and the acquisition cost to understand the
profitability of each marketing tool. The candidate should identify Facebook as an unprofitable channel.
Total number of purchases for the entire lifetime= Average length of customer relationship*Average number of purchases in a year
Customer lifetime value (CLTV)= average order value* total number of purchases for the entire life
Cost per customer= Total spend/ (Unique visitors* conversion )
Profit/loss per customer= CLTV – cost per customer
SOLUTION
Facebook Google Ads Newsletter Affiliate Marketing Facebook: paid advertising on Facebook
social network platform
Number of acquired Google: paid advertising on Google
1,500 1,000 2,000 2,100
customers search engine
Cost per customer 100 € 30 € 10 € 20 € Newsletter: product-focused content
email sent to customers signed-up for
CLTV 90 € 90 € 105 € 90 €
the newsletter
Profit/Loss per Affiliate marketing: banner adverting
-10 € 60 € 95 € 70 €
customer on third party websites
Apparel Easy
E-commerce Medium
EXHIBIT 1 – REVENUE BY PRODUCT

Polo Shirts Casual pants Sweaters Shirts
1.600.000 €
1.400.000 €
1.200.000 €
1.000.000 €
800.000 €
600.000 €
400.000 €
200.000 €
0€
'17 '18 '19 '20

Apparel Easy
E-commerce Medium
EXHIBIT 2
Margin by product Marketing budget by product
Shirts 65% Casual pants Polo shirts
2% 3%
Sweaters 85%
Casual pants 80%
Polo Shirts 80% Shirts

95%
COSTS VARIATION YOY AT 7CAMICIE

‘17 ‘18 ‘19 ‘20
COGS 1% 5% 25% 33%
Shipping 0% 1% 1% 2%
Marketing 0% 5% 20% 30%
Salary 2% 0% 1% 3%
Other 5% 0% 0% 3%
Apparel Easy
E-commerce Medium
EXHIBIT 3
Marketing tool performance in 2020
Facebook Google Ads Newsletter Affiliate
Marketing
Total spend 150,000 € 30,000 € 20,000 € 42,000 €
Unique visitors 150,000 50,000 100,000 70,000
Conversion 1% 2% 2% 3%
Average order
60 € 60 € 70 € 60 €
value
Additional data
Average number of purchases in a year 0,5
Average length of customer relationship 3 years

Apparel Easy
E-commerce Medium
BRAINSTORMING QUESTION 1 BRAINSTORMING QUESTION 2

Possible reasons for why the Facebook marketing tool is not How would you improve the profitability of the Facebook
profitable marketing tool?
SAMPLE ANSWER 1 SAMPLE ANSWER 2

External Factors Focus on the different elements of the funnel’s conversion:
• Stronger competitors pushing the cost per conversion • Unique visitors: attract more visitors maintaining the same
• Macroeconomic conditions cost per click. Potential examples: change geography,
demography, the product or the category (sweater, casual
• Consumer behavior
pants, polo shirts) )
Internal Factors
• Conversion: change the copy and/or the image of the
• Wrong Audience advertising, change the audience
• Products are not appealing • Average order value: push for products with higher selling
• Incorrect Ad content price, cross-selling, improve the price
• Wrong Timing • Customer life time value: improve the purchases per year
or the length of the relationship (loyalty programs)

Apparel Easy
E-commerce Medium
You are meeting the CEO. What are you going to tell him?
The recommendation should be well structured and precise on addressing the inefficiency of the marketing spending as a source of
the decline of profitability. The candidate can focus on improving the efficiency of the Facebook marketing tool or recommend to
shift the budget towards more profitable channels such as Google or Affiliate Marketing. In terms of product, it makes sense to push
shirts on the marketing channels due to the uniqueness of the product and the company’s value proposition. In other categories
(sweater, casual pants, polo shirts), with higher margin, it can be useful to increase the average spending (cross-selling) and the
customer lifetime value.
Risks: shifting the budget to other marketing tools does not guarantee the same profitability as last year. Competitors can also
increase the investment with a direct impact on the cost per conversion.
Potential next steps: investigating the main competitors, their trends and their digital strategy. Start analyzing customer and their
behavior to explore new emerging marketing tools, for example TikTok for Business, or launch new product lines.

BLUE & RED AIRLINES GROUP
CB8
Airline Industry Easy
Operations Medium
Customer Experience Hard

Operations Medium
BLUE & RED AIRLINES GROUP Customer Experience Hard

• Revenue sources: Passengers and Cargo.
Our client, Red & Blue Airlines Group, • The company operates this market for 10 years and it has no competition.
• The market has a premium leisure component, who are corporate passengers during the
it’s based in Santiago, Chile and has rest of the year.
operations to many cities in the globe. • During the last two years, there has been an increase in Cargo but a decrease in customers.
There are some internal causes but also others means. The idea is to increase the customer
Its most iconic route is Santiago – experience.
Puerto Natales.
CASE GUIDANCE
This is an interviewee-led case, where the candidate is expected to drive the case and
Today, the managing director of suggest the next course of action
Network Planning needs your help, he This case is designed to test brainstorming, business decision making skills and logic. The
case focus in the customer journey and include a small market sizing, chart interpretation,
wants to increase quality in this and small calculations. The idea is to stress a bit the candidate with an unconventional
market. problem.
The idea is to analyze how a bad experience during the customer journey can impact the
results of a company. In this case, the impact during a leisure travel can discourage
costumers not only from buying tickets in this markets but also from the of the network.

Operations Medium
STRUCTURE GUIDANCE
A good framework would touch on:
• Different ideas to increase the customer experience with the • If the candidate is having trouble to structure the problem, you
objective to understand what triggers the problem of client. can hive some hints about the customer journey during a travel.
• Ability to focus on the operations of the company and implement Also, you can push him/her to walk you through his/her thoughts
changes, focusing on the implications and impact of the
decisions.
SAMPLE STRUCTURE
Interest Pre-Trip On trip Post trip

• Awareness • Information • Safety • Customer service
• Price • Customer service • Punctuality • Customer retention
• Booking experience • In-flight experience

Operations Medium
CUSTOMER SATISFACTION ANALYSIS BRAINSTORMING QUESTION

Regarding the customer experience, our client has done some
Where do you think we should focus our attention on and how
analysis. Here is a chart of the Net Promoter Score evolution in the
would you prioritize?
last two years (Show Exhibit 1).
Suggest solutions. What are the implications?
What do you think are the main drivers of the decrease in
In this section, the candidate should brainstorm a way to prioritize
customers?
such as an Impact – Complexity matrix and make assumptions of
which pain points should the company focus. The implications could
be in line with: Financial (CAPEX, OPEX), Operations, Marketing or
TAKE AWAY – EXHIBIT 1 others. No prior knowledge of the airline industry is required hire.
From Exhibit 1, the interviewee should understand that the main Push the candidate to focus on the punctuality issue (Seat
drives of rejection in the NPS are Punctuality, Seat comfort, and configuration needs investment, and brand perception is a complex
Brand reputation. matter and could be in line with punctuality. Once this is finished,
the interviewee should be given Exhibit 2 Part 1.

Operations Medium
PUNCTUALITY ANALYSIS QUANTITATIVE ANALYSIS

From the chart on the left, the interviewee should create a 9-segment Once the candidate understood the chart on the left on exhibit 2, he
matrix, high impact (hrs.) and high affectation (#pax) to low impact and low need to start making some calculations. You can deliver Exhibit 2 Part
affectation. The candidate should understand that there are some quick 2. The candidate can make some approximations.
wins (internal problems) and that there are some problems that needs a
third party (external problems). The candidate should focus on the internal
ANALYSIS CALCULATION
MARKET CUSTOMERS= 24M x 10% = 2,4M
problems first and propose some solutions. Once the candidate understood
AM PAX= 30% x 2,4M = 720K AM PRIME PAX=70% x 2,4= 1680K
the problem, he/she should move to the second chart.
PAX ON TIME
TAKE AWAY – EXHIBIT 2 AM= 50% x 720K=360K AM PRIME= 70% x 1680K = 1176K
Left chart: In here we have internal and external causes, in which the main
PAX IMPROVEMENT
problematic are weather conditions (external) and unscheduled
AM= 5% x 720K = 36K AM PRIME= 14% x 1176K = 235K
maintenance (internal). From this chart, we can see that most of the
problems can be improved with some internal improvements.
Percentual Improvement ~18%
Right chart: In this chart, there are 2 periods of time that represent the
punctuality problem of the company. In here we can find the number of
flights affected.

Operations Medium
EXHIBIT 1 – Net Promoter Score

33
3 1 2
7 5
20
3
10
4
2018 Price Booking Brand Customer Cabin crew* Punctuality IFE** Seat Comfort 2020
process perception service
*Cabin crew friendliness, attention, efficiency, and attitude

**IFE: In-flight entertainment

Operations Medium
EXHIBIT 2 – PUNCTUALITY ANALYSIS (PART 1)

Delays (Hrs)
4,0 Weather
3,5
Unschedule Mantainance 100% 100% 100% 100%
3,0 Fleet availability
% of Flight in time
2,5
Crew expiration 70%
2,0
50%
1,5 Infrastructure Operational Planning
1,0 Airport Capacity

Suppliers Airport Disruptions
0,5
Workshop management Boarding
0,0
Customers affected (#) Night AM AM Noon PM PM
Prime Prime
External causes Internal causes
Notes Time block
• Passengers affected 3 hours or more need to be compensated, generating additional costs

Operations Medium
EXHIBIT 2 – PUNCTUALITY ANALYSIS (PART 2)
Company Customers (PAX) 24 Millions
Market weight 10%
Customer schedule AM: 50% AM Prime: 70%
Punctuality improvements AM: 10% AM Prime: 20%

Operations Medium
Great, our customer is about to join us, can you please provide a brief summary and your feedback about what we have discussed today?
The candidate should summarize that:
• The 3 main reasons that could explain the decrease in customers in the market (Punctuality, Seat comfort, and Brand reputation).
• Our Client has some internal facts that could improve punctuality, therefore increase the number of customers.
• There are some external conditions such as weather that could be difficult work on.
A great candidate should also discuss any risks or next steps:
Risks
• Any change in the schedule could impact the rest of the operation
• Some improvement needs some investment that depends on the company financial situation
Next Steps
• Understand the trade off the solutions
• Change operations to a time slot in which punctuality could increase to 100%
• Quantify the investment needed to improve seat comfort
142

Cricket Mania
By Participation Code - CB11
Sports Easy
Investment Decision Medium
Profitability Hard

Sports Easy
Cricket Mania Profitability Hard

PCC is one of the cricket franchise in • Success here would be defined based on improved profitability
worlds largest cricket league, LPI. • The team has been relatively stable with no abnormal changes
Despite having one of the strongest • The owners are willing to incur Capex to attract up to two star-performers in the auction
teams in league, PCC has continuously • PCC lacks brand recall, amongst the lowest in the league
disappointed its fans and owners and
• All franchisees in the league are profit making
has failed to live up to its true potential.
• The overall cricket viewership and popularity has been on the rise (assume pre-covid time)
Mr. Gandhi, has recently replaced Mr.
Modi as the new CEO of PCC. Mr.
CASE GUIDANCE
Gandhi has been handed the task of In this case the candidate should not rely on any pre-knowledge of the game and think of the
turning around the fortunes or PCC. Mr. problem as a classical profitability issue.
Gandhi has been an ardent cricket fan The candidate should ask the right questions and aim to grow the existing revenue streams
and player of the sport all his life. He and add new revenue streams to improve profitability. The interviewer should guide the
also has a track record of turning around candidate towards focusing on improving revenues and not get stuck on reducing costs.
Given, that a franchisee’s brand has a high impact on revenues, the candidate should be
corporates. conscious of making recommendations to improve the brand as well.
For Interviewer’s understanding ONLY (to understand the business model):
Mr. Gandhi has hired you to investigate
and recommend on the action plan. • Key revenue streams - Broadcasting Rights, Sponsorship, Ticket Sales, Merchandize Sale,
Player trading
• Major Costs heads – Player Fee (30-35%), Franchise Fee (20%)
Sports Easy
SAMPLE STRUCTURE INTERVIEWER GUIDANCE

The interviewer should allow the Candidate
Increase Ticket to share different ideas but eventually guide
Sales
Improve Existing the Candidate to focus on improving the
Revenue Revenues
Increase Non-
Ticket Income
Increase Revenue The next exercises, focuses on increasing
existing revenues streams by improving team
Add New Add ancillary performance and brand-rating, thereby
Revenue Streams businesses
charging more for tickets, merchandize, etc.
The Interviewer should try to guide the
Improve Profit Improve success
linked fee
Candidate towards identifying that both
Reduce Player these objectives can be achieved through
Fee
Trade/Fire non- acquiring Star players.
performing
Staff and expensive players Once the Candidate takes that path, the
Reduce Costs Corporate
Expenses interviewer should share Exhibit-1 & Exhibit-2
with the candidate and let them make the
Other choice
Operational
Expenses

Sports Easy
Exhibit-1 (INTERVIEWER VERSION) Profitability Hard
LPI TEAM RANKINGS FOR THE LAST 3 YEARS AVERAGE STAR RATING SCORE
League Rankings Average Star-Rating
CSC
DDC
HYC
KKC
MMC
PCC
2020 2019 2018
CSC DDC HYC KKC MMC PCC RBC RJC

RBC
RJC
INTERVIEWER GUIDANCE
The Candidate should be able to identify that while the performance for most team typically varies, PCC has consistently performed poor. A great
candidate would even calculate average ranking over the 3 years and see PCC as the lowest average ranking.
At this point, Interviewer should ask the Candidate that could be the potential reason for this and then guide the candidate towards looking to
acquire new Start Players, to improve the team “Star-Rating”. Once the Candidate has gotten there, the Interviewer should show Exhibit-2
Note: Rankings and reflect the team’s performance i.e., highest bar indicates the winning team and the lowest reflects the last finishing team
Sports Easy
Exhibit-1 (CANDIDATE VERSION) Profitability Hard
LPI TEAM RANKINGS FOR THE LAST 3 YEARS AVERAGE STAR RATING SCORE
League Rankings Average Star-Rating
0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0
CSC
DDC
HYC
KKC
MMC
PCC
RBC
2020 2019 2018
RJC
CSC DDC HYC KKC MMC PCC RBC RJC
Note: Rankings and reflect the team’s performance i.e., highest bar indicates the winning team and the lowest reflects the last finishing team

Sports Easy
EXHIBITS-2 (INTERVIEWER VERSION) Profitability Hard
Star batsmen available for auction Star bowlers available for auction
Signing Fee Games Avg. Score / Start Rating Signing Fee Games Wickets Avg. Wicket / Start Rating
Runs Scored
(USD Mn) Played Game (out of 10) (USD Mn) Played Taken Match (out of 10)
VK 15.0 200 6000 30 10 LM 7.0 125 200 1.6 7
MD 15.0 200 4800 24 9 YC 5.5 100 121 1.2 6
RS 12.0 200 6000 30 8 JB 8.0 75 140 1.9 9
DW 10.5 150 5250 35 7 AM 5.5 150 175 1.2 6
CG 12.0 130 5200 40 9 DS 10.0 70 97 1.4 8
Note: Maximum permitted budget for acquisitions is $20mn
The Interviewer should explain that a Batsmen’s success is linked to scoring more, whereas the Bowlers success is linked to maximum wickets – a great Candidate would suggest
and analyse additional metrics such as bowling economy, strike-rate, run-rate etc to refine his model. (although not necessary for people who don’t understand the game)
The Interviewer should assess the Candidate’s decision making on the basis of his/her ability to derive some kind of mechanism to put the data into perspective and make an
objective decision. The ideal decision would be based on “highest average runs” and “highest average wickets” (which they do not have in their version). If the Candidate doesn’t
get to calculating average, the Interviewer should guide the Candidate to it.
The most ideal combination is “CG as the batsmen” and “JB as the bowler” – a) highest averages, b) together add up to the allowed budget and c) highest combined Star rating

Sports Easy
EXHIBITS-2 (CANDIDATE VERSION) Profitability Hard
Star batsmen available for auction Star bowlers available for auction
Games Start Rating Games Wickets Start Rating

USD Mn Runs Scored USD Mn
Played (out of 10) Played Taken (out of 10)
VK 15.0 200 6000 10 LM 7.0 125 200 7
MD 15.0 200 4800 9 YC 5.5 100 121 6
RS 12.0 200 6000 8 JB 8.0 75 140 9
DW 10.5 150 5250 7 AM 5.5 150 175 6
CG 12.0 130 5200 9 DS 10.0 70 97 8
Note: Maximum permitted budget for acquisitions is $20mn

Sports Easy
ACQUISITION DECISION
Would you spend money on acquiring the Star-Players?
INTERVIEWER GUIDE
At this stage Candidate can take the decision of acquiring the two star-players given that the budget allows them to spend $20mn. In
this case, the Interviewer has two options -:
a) Skip the Exhibit-3 and straight move to Brain-Storming exercise
b) Challenge the Candidate by trying to quantify the financial impact of the decision in terms of additional profitability
However, a great candidate would proactively ask if we have any data or predictive analysis of the likely impact of the acquisitions.
Given the aim is to improve profits, Candidate should try to assess the impact in terms of numbers and not just direction.
Interviewer should share Exhibit-3 if the Candidate asks for additional data to quantify the impact

Sports Easy
EXHIBIT-3 Profitability Hard
PCC PPREDICTED YEARLY LEAGUE RANKING (3 YEARS) LPI PRIZE MONEY DISTRIBUTION BASIS
70% 65% Rank Prize (USD Mn)
60% 55%
50% Below-5 0.0
40% 35%
30% Top-5 10.0
30%
20% Top-3 20.0
10%
10% 5%
0% 0% Top-2 50.0
0%
Below-5 Top-5 Top-3 Top-2
With Acquisitons Without Acquisitons
➢ Predicted Yearly Profit with acquisition (USD Mn) = 65%*10.0 + 30%*20.0 + 5%*50.0 = $15.0mn (for 3 years)
➢ Predicted Yearly Profit without acquisition (USD Mn) = 55%*0.0 + 35%*10.0 + 10%*20.0 = $5.5mn (for 3 years)
➢ Additional Profit of ~10Mn/year for next 3 years just from Prize money. The investment of $20mn will get covered in two years. A great candidate
would remember that the Star-Ranking of the team would also improve and thus lead to additional Revenues and hence even higher profits

Sports Easy
BRAIN STORMING EXERCISE – NEW REVENUE STREAMS

What are some of the additional revenues streams that PCC can look to add to their operations in order to support
the company turnaround and profitability?
SOME SAMPLE IDEAS

✓ Merchandizing revenue ✓ Launch a sport magazine, sport website, online talk
show for ad-revenues
✓ Start a junior training academy
✓ Launch co-branded credit/debit cards for fans to make
✓ Launch a mobile gamming app
commission income
✓ Create a paid fan club with special privileges like
✓ Ultra-Premium Membership for seats close to players,
priority access for tickets, lunch with players, etc.
allowing hotel access to fans, and similar incentives
✓ Partner with a co-branded cafes and sports bars

Sports Easy
FINAL RECOMMENDATION (SAMPLE RECOMMENDATION)

Acquire the two-star players, because:
• The acquisition improves the probability of winning
• The Probability adjusted winning prize money increases profits by ~$10mn/year for the next three years
• The additional profits cover for the upfront investment of ~20mn
• The other revenue streams can add a significant headroom to the profits, given the non-prize revenues (typically a major
chunk of income), will be directly related to the brand-value of the franchise and the star players. Which would improve a lot
given the better performance in the league and the presence of Star players
Risks:
• Players come with high chances of injury, which means the winning probability may not be accurate
• Team sports also depend a lot on the team dynamics, maybe the players are not able to perform well with the franchise

BizAvi Company
By CB12
Aviation Easy
Product Launch Medium
Operations Hard

Aviation Easy
BizAvi Company Operations Hard
Prompt Clarifying points (if asked)

- The company operates in Brazil, and most of its clients are also Brazilian;
Due to recent downturn in the Brazilian - The maintenance service consists in providing technical support to aircraft preventive and corrective maintenance,
economy, BizAvi Company is currently seeking which includes the supply of specialized labor and parts;
to diversify its portfolio of products and - The main objective of the CEO is to increase financial gain;
improve profitability. The Maintenance BU - The Aircraft Chartering Unit currently outsources the service to the aircraft manufacturer’ service center;
- The company currently owns and operates three Embraer aircraft, with no plans to change the size of the fleet;
currently supports third party clients and the
- BizAvi Company company is a very renowed company in the country, and is well known by the technical expertise of
company’s owned business jets, which are its maintenance personnel;
operated by the Aircraft Chartering Unit. - The company has a VP for the Maintenance BU and a VP for the Air Chartering Unit;
- A repair station holds a licence to work on a list of determined aicraft models. This list is dependant upon having the
BizAvi Company has recently acquired three appropriate resources to conduct the service (such as trained labor, specialized equipment and technical publications)
new units of Embraer aircraft, and currently
outsources the maintenance services to the Case guidance
manufacturer.
The CEO sees in the Embraer models also an This case has been designed to test the candidate’s ability on providing a relevant framework to a new
opportunity for the Maintenance Business product launch.
Unit, and has asked your help to assess the After drawing the structure the candidate will have to process a big amount of information and choose
quality of this project. what’s relevant to solve the case.
The case will also test his/her ability to synthetize this information in a coherent conclusion.

Aviation Easy
Interviewer guidance - Structure

Suggested items to consider are:
- Strategy: What’s the impact of insourcing this new model? Is it aligned with the company’s long-term vision? Does this certification strengthen the
position of the Air chartering business unit? How many third-party aircrafts could be serviced? Does the company have money to fund this investment?
- Market (instead of Strategy): How attractive is this Market? What’s the size? How does BizAvi Company performs compared to its competitors?
- Financials: What’s the necessary investment to develop this project? What are the estimated revenues? What are the costs? What’s the NPV?
- Internal capabilities: Does BizAvi Company currently have the resources to proceed with this project? If not, are they available in the market?
- Risks/Alternatives: What could go wrong with this project? Does any of the parts bear more risk (Air-Chartering unit or Maintenance Unit)?
If the candidate asks information about strategy alignment, handle him/her Exhibit 1;
If the candidate asks information about the market, handle him/her Exhibit 2;
If the candidate asks about the financials, handle the information provided in the “Investment Analysis” section;

Aviation Easy
Exhibit 1: BizAvi Company Portfolio
Model HH / aircraft $ / HH COGS Markup Days in hangar Spots used in the hangar Total market Current Market share
Embraer* 300 50 $40.000,00 10% 20 1 150 0%
Model 1 200 40 $20.000,00 20% 10 1 20 50%
Model 2 500 90 $90.000,00 20% 21 2 15 70%
Model 3 300 50 $30.000,00 25% 10 1 5 100%
*The Embraer model has not been included in the portfolio yet

Aviation Easy
Interviewer guidance – Exhibit 1 Interviewer guidance

Give some time for the candidate analyze the information provided. If The candidate should realize that the Embraer model is worse than
he/she doesn’t raise concerns about the Contribution Margin of this new the models in the current portfolio of the company, and he/she
model, ask him/her how does the CM compare with the other models that should speculate on the viability of this project.
BizAvi Company currently supports.
A good candidate should remember from the prompt that the
company owns 3 aircraft of that model, and still it could make
Expected Calculations sense to go ahead with this project. If he/she asks information on
the Market, go to Exhibit 2. If he/she asks to see the financials, go
Contribution Margin / Spot* / to “Investment Analysis”.
Model Contribution Margin Day
Embraer $50*300 + 10%*$40.000,00 = $19.000,00 $19.000,00 / 20 = $950,00
Model 1 $40*200 + 20%*$20.000,00 = $12.000,00 $12.000,00 / 10 = $1.200,00
Model 2 $90*500 + 20%*$90.000,00 = $63.000,00 $63.000,00 / 21 / 2 = $1.500,00
Model 3 $50*300 + 25%*$30.000,00 = $22.500,00 $22.500,00 = $2.250,00

*Spot is the place in the hangar in which the aircraft is parked during maintenance

Aviation Easy
Exhibit 2: Embraer aircraft - Maintenance Market in Brazil

Embraer models Market Share
3%
7%
10%
Service provider Price charged per hour* Markup on parts**

Embraer Service Center
Embraer Service Center $50 10%
Service Center 1 $45 8% Service Center 1
Service Center 2 $40 10%
Service Center 2
Service Center 3 $45 10%
Service Center 3
80%
*Each aircraft uses on average 400HH / year

**Markup is how much one should add to COGS to calculate the customer’s final price

Aviation Easy
Brainstorming Interviewer guidance

What do you believe to be the client’s main drivers when choosing a The candidate should soon realize that price is not the main driver in
maintenance provider? this market, and an entry would pose difficult challenges for BizAvi
Company.
Expected Brainstorming A good candidate should remember from the prompt that the
company owns 3 aircraft of that model, and still it could make sense
The answer should include some of the following: to go ahead with this project. If he/she asks to see the financials, go
Technical to the next section, “Investment Analysis”;
- Quality of service provided (no reworks, for example);
- Minimum aircraft downtime (the smallest, the better and no delays)
Non technical
- Price;
- Availability of technicians in emergency situations;
- Customer support;
- Location of the service center;
- Warranty on parts;
- Branding;

Aviation Easy
Investment Analysis
State the following information to the candidate:
Calculations
Revenues
Revenues:
Price of labor $ 50,00 /HH ($50,00 * 400 + $44.000,00)*3 = $64,000 * 3 = $192.000,00 / year
Costs:
Total labor 400 HH/year/aircraft
1st: calculation of how many employes are necessary
Parts (materials) $44.000,00 /year/aircraft 400 * 3 = 1200HH necessary
Number of aircraft in the fleet 3 aircraft Using the productivity of 75%: 1200 / 0,75 = 1600HH
1600 / 40 / 40 = 1 employee
Costs 2nd: calculation of costs
$40.000*3 + $24.000 + 0,1*192.000,00 = $ 163.200,00 / year
COGS (materials) $40.000,00 /year/aircraft
Profits:
Labor costs $24.000,00 /year/employee
=192.000,00 – 163.200,00 = $ 28.800,00 / year
Other costs* 10% of revenues NPV (expecting the Net profit as a perpetuity):
$28.800.00/10% - $100.000,00 = $188.000,00
Investment
One time investment $ 100.000,00 in Year 0 Note: The candidate should ask how many additional employees are necessary to
Discount rate 10% /year hire. Tell him/her to estimate the number based on the information provided,
and say that the productivity of an employee is 75%. Each employee effectively
*includes training, increase in utilities consumption and all other related costs
works only 40 weeks / year due to vacation and mandatory trainings, and each
IESE CONSULTING CLUB week this is made of 40HH; IESE CASE BOOK 2021 |161
Aviation Easy
Clarifying points (if asked)

- The company intends to operate the three aircraft for at least 10 years, and it has been operating some aicraft models for more than 20 years. From
this comment the candidate should grasp that he can calculate the NPV using the perpetuity formula;
- If the candidate asks for other clients, for simplicity consider only the 3 aircraft in the fleet;
- The Maintenance BU would charge the Air Chartering Unit the same prices of Embraer;
- The company needs to hire additional technicians and acquire some equipment (already accounted in the “One time investment” value). Appart
from that, no other extra resources are necessary;
- Diregard amortization and taxes;
Key takeaways
- Payback will be between 3-4 year and NPV is positive, indicating that the company has reasons to pursue this initiave;
- Even though the project is viable, it’s worse than the current aircraft supported by the company. A distinctive candidate that has analyzed Exhibit 1
will ponder that CM will reduce (in %);
- The company will make more Money with labor than by selling parts. The candidate should especulate on the sensitivity of each parameter and
how it would affect the profitability of the business;

Aviation Easy
Brainstorming (optional)
Right after the candidate finishes his/her calculations, you should state that this project also entails financial risks to other business units.
In a conversation with the VP of the Air Chartering division, he mentioned the following numbers.
Financial data of Embraer models – Air Chartering Unit
Price per hour $10.000,00

Expected Brainstorming
Gross Margin 50% Question 1
Average duration of flight 2 hours $10.000,00*50%*2*3/2*2 = $30.000,00 / day
Frequency of flight 3 flights every 2 days Question 2
Technical
Question 1 - Unforseen maintenance (not scheduled in the regular check);
What would be the impact of 2 day a delay in the Air Chartering Unit PL? - Difficulty when performing a procedure;
Questions 2 - Lack of tooling or equipment at the moment of the inspection;
What would you see as the main reasons for a delay in aircraft Non-Technical
maintenance?
- Delay in materials delivery;
- Delay in quote approval for additional services;
- Incidents with the technicians that prevents him/her from working;
Industry Easy
Case Type Medium
BizAvi Company Function Hard
Recommendation
Great, the CEO is about to join us. Can you please provide a final recommendation on the Embraer project?
Sample recommendation
The candidate should sumarize that:
- From the financial point of view, the project is attractive, with an expected NPV of around $190k and a yearly profit of approximately $30k (only
considering the owned fleet);
- There’s an opportunity of capturing Third-Party clients on the new model, improving even further the profits and NPV;
- Among the risks, there’s a considerable one on the Air Chartering unit PL due to delays in maintenance. The company should make sure to employ
all resources to deliver the aircraft on the same time as Embraer;
A great candidate will also

- Restate the this new model may possible reduce the Gross Margin (in %) of the Maintenance Business Unit (when comparing to the current
portfolio), but this may still be a good solution because of the downturn in the Brazilian economy;
- Compare the CM of this new product and the GM of 2 day of operations to assess the priorities of the company;
*includes training, increase in utilities consumption and all other related costs

JoinTech
CB14
Manufacturing/ Automotive Easy

Problem Solving Medium
Operations Hard

Industry Easy
Case Type Medium
JoinTech Function Hard

JoinTech, a German automotive supplier for • Size of the company: 400M Sales/ year
engineered joining technology, is in backlog • Size of product group: 50M Sales/ year (12.5% → significant portion)
with its cash cow product group. Customer • Current Backlog: €1M Backlog → roughly 1 week of production (~2.7M parts)
satisfaction is plummeting as a result of a • Cause for Backlog: our manufacturing is late, supplier is late
drop in on-time delivery; costs are increasing • Backlog mainly coming from big sizes and specialized products
because of overtime and special deliveries, • Affected Product: Clamping product, BOM: band material with threads, screw, housing
and the atmosphere in the company is tense for screw, pre-positioner, spring
due to high pressure from senior
• Capabilities company: 15 major product groups, metal and plastics products, Plastics:
management.
injection moulding + assembly, metal: stamping and bending, rolling, heat treating,
The plant manager hired you to develop a assembly, semi-part production
strategy that resolves the backlog. • Production: Shifts: 15 shifts/week
• Equipment: 30 machines: 4 small sizes, 5 big sizes, 16 regular sizes, 5 specialized
machines
CASE GUIDANCE • Supply Chain:
This Operations case is multifaceted. For the o Supplied: Raw material + housings, pre-positioner, spring from supplier
purpose of solving it on time not all possible o Screws from sister plant (intercompany)
root-causes need to be solved, however • Customers that cause the biggest pain points are OEMs that manufacture abroad → air
ideally they are mentioned in the structure. freight
Industry Easy
Case Type Medium
STRUCTURE GUIDANCE
Support Root cause analysis utilizing 5 Why analysis
What is the problem? Who is the problem? What has impact? What are the levers?
SAMPLE STRUCTURE
Product Customer Production Supply Chain Other
Who is the customer? Supplier issue?

Product-group Shifts/ week External influences?
OEM? Tier? Internal/ external
Alignment within
How does the order Process Availability?
Part-numbers Multi Sourcing? organization (Sales –
pattern behave? Machines? OEE?
Operations)
Do customers send an Personal Availability?

Special products Make or Buy?
accurate Forecast? Qualification/ Training

Industry Easy
Case Type Medium
You have identified possible root-cause to the problem. What would you do to tackle those?
SAMPLE ANSWERS
Product Customer Production Supply Chain
• Substitutes? • Segmentation • Increase shifts • Double sourcing

• Buy from • Prioritization • Increase headcount • Make or buy
competitor • Forecast? • Increase machines → build, • Backwards integration
• Reduce • Sales agreements? buy or transform • Bottle-neck management
variability • Push orders to • Find external manufacturer • Closer communication with supplier
later date with capabilities • Improved forecast
• Cancel orders? • Increase productivity (OEE) • Install additional capacity
• Improve production • Send team to optimize at supplier
planning and focus backlog (operational excellence)

Industry Easy
Case Type Medium
Interviewee will be given Exhibit 1 to perform a capacity analysis and come up solution proposal for internal production and SCM improvements.
Before giving the Exhibit, test interviewee if he understood what he should be looking for: Capacity, Demand, Backlog, possible bottlenecks
SOLUTION
Regular Small Big Specialized Regular: no problem
Current Output per week [utilization] 3,456,000 1,404,000 864,000 918,000 Small: increase OEE to meet target
Run rate backlog [additional backlog/week] 0 100-400k 550k 500k Q: What is the root cause for the low OEE →
need to investigate further.
Parts per week [current OEE] 4,608,000 1,404,000 864,000 1,530,000 Short run solution: Hire additional operator →
Max parts per week 5,760,000 2,160,000 1,080,000 1,800,000 increases OEE by 20% (given by interviewer)
Big: Not enough machine capacity. Purchase
Min OEE to meet target [%] 56% 83% 93% 78%
new machine or if possible rebuild
New Output/ week [parts] 3,240,000 1,836,000 1,036,800 1,530,000
machine(s) to Big Sizes.
Saturday Work 367,200 207,360 306,000 Specialized: The issue is not the machine-
park but the low utilization. Why: share on
Number of operators per shift 4 2 2 2
request that there is the lack of semi-parts.
Cost per operator 50,000 50,000 50,000 50,000
One of the suppliers is not providing enough
Cost of new machine 250,000 250,000 350,000 400,000 pre-positioners and springs and he has a
Cost of rebuild 100,000 100,000 125,000 175,000 bottleneck in his production.
Industry Easy
Case Type Medium
Machine Park Overview – Exhibit 1

Regular Small Big Specialized
Regular Small Big Specialized

Parts/min 50 75 25 50
OEE (Overall Equipment Effectiveness) 80% 65% 80% 85%
Utilization 75% 100% 100% 60%
Shift-system 8h/shift | 3 shifts/day |5 days/week
Demand per week [parts] 3-3.5M 1.5-1.8M 1M 1.4M
Backlog [parts] 0 500k 1M 1.2M
Industry Easy
Case Type Medium
The managing director has to report to the VP Ops this afternoon and would like to take your recommendation to that meeting.
You have 3 minutes to give him and overview and your recommendation.
• Thank you for trusting me to solve this operational challenge to resolve the backlog situation.
• I was able to identify 3 main reasons that cause the backlog situation:
• For the small clamps the OEE is below the benchmark
• For the big clamps there is not enough machine capacity
• For the specialized clamps we are missing semi-parts from our external supplier
• As a temporary countermeasure I recommend to hire and additional operator which will reduce downtimes of the small machine and
increase OEE by 20%. We can then fulfil the weekly demand. Current Backlog will be reduce within XY weeks.
• For the big clamps I suggest to purchase a machine or rebuild one of the regular ones. This would cost 350k or 125k respectively. In
general it is possible but we would have to detail this with the process engineering and machine building as well as purchasing
department. It would also take roughly 2 months to complete this project.
• For the specialized clamps we are facing a supply chain issue. Installing additional capacity at the supplier is one idea. In order to better
assess the scenario I would like to visit the supplier to understand his production, part allocation and challenges. Building up a second
source or insourcing part of his production could be possible solutions that I would like to explore as a next step.
• To reduce the current backlog I suggest to install special shifts on Saturdays. Once OEE/ capacity/ utilization have been increased the
backlog can be reduced by at least 360k, 210k and 310k for small, big and specialized clamps per week.
LOL much?
CB15
Electronic sports Easy
Strategy Medium
M&A Hard

Strategy Medium
LOL much? M&A Hard

Our client, SW (Sport Wear) is a famous • Lol Pro League is the Lol league in China. It has 21 teams and just like La Liga, each
sportswear company with 20 Billion RMB team has its own stadium and plays against each other team twice a season (Home
(Chinese currency) in revenue in 2020. match and Away match)
Growth potential in the current business is • Lol Pro League in China started in 2015 and quickly became popular across the
limited, so SW wanted to explore other country. Average 50 million audiences watched each match online/offline last year.
opportunities adjacent to its core business. • Lol (League of Legends) is the most popular multiplayer online battle arena video
Impressed by the prosperous e-sports in game, during which two teams of five players play online to battle to win.
China, SW is very interest in exploring the • Typically, each Lol pro League club has six players and one coach.
possibilities in that area.
• Budget for the acquisition is 45 million RMB and the CEO wants to recover investment
Recently, the CEO of SW has been given an within 5 years.
opportunity to acquire a club named Play
Hard Gaming (PHG), which is one of the top
teams of the PC game Lol (League of CASE GUIDANCE
Legends) in China, at price of 45 million RMB.
• The case is designed to test candidate’s business acumen and logical thinking in an
Just like other traditional sports, Lol now is
unfamiliar industry. This case is also highly demanded quantitively.
leagued in many countries. PGH won fourth
place of Lol Pro League in China last year. • When the candidate is having trouble understanding the e-sports industry, please
guide him/her to compare the industry to football league (e.g. La Liga) or basketball
The CEO has hired us to determine whether league (e.g. NBA).
this could be an attractive opportunity.
• For simplicity, the time value of money could be ignored in this case.

Strategy Medium
LOL much? M&A Hard
STRUCTURE GUIDANCE SAMPLE STRUCTURE

This is an interviewee-led case and the candidate should always 1. Is the industry in general attractive/growing?
drive the case and suggest the next course of action. 2. If yes, how is the performance of PHG? What are the key
A good structure would touch on following points: drivers for revenue and cost? What are the numbers?
1. Profitability of running the club PHG, including key revenue 3. Can the acquisition generate any synergy that might lead to
drivers and cost drivers. cost saving/additional revenue?
2. Market potential of the e-sports industry 4. If the acquisition, from financial perspective, makes sense,
3. Synergies between the Lol club and the current business does SW has the ability to operate?
4. SW’s ability to operate the business 5. What risks are associated and what might be solutions? Can
SW mitigate them?
5. Risks of running the business

Strategy Medium
LOL much? M&A Hard
Market size analysis

To understand the business, the candidate should start by understanding the market overall.
If the candidate asks the market trend, present Exhibit 1
Exhibit 1: Key takeaways

• Overall market for e-sports has been increasing from 2015, with the market size tripled till 2021
• The main driver of increase is the Mobile segment, while the PC segment is quite stable in the past years.
• However, within the PC segment, Lol is dominating and growing in the past three years, showing big market potential
• The Lol market is therefore attractive, but the risk of business cycle (life cycle of the game) should be taken care of.
• Note that even mobile segment is growing fast, there is no club available to acquire and establishing one from scratch is of
high cost.

Strategy Medium
LOL much? M&A Hard
Revenue Description Annual amount
Profitability of the business Sponsorship fee average 5 sponsors; each pays 1 million per year 5.000.000,00
40 matches (20 Home matches & 20 Away matches

Ask candidate to brainstorm the revenue and cost drivers Broadcasting
per year / each match with 0,5 million broadcasting
20.000.000,00
and the guide him/her to do the calculation, using the 80% seats sold / max. 1500 seats / each seat 100RMB
Ticket sale 2.400.000,00
information of year 2021 on the right side / no seasonal ticket / 20 Home matches
average 50 RMB/person for those who come to
Examples of key revenue drivers Merchandise
stadium during home matches
1.200.000,00
• Sponsorship fee of the club Streaming revenue 6 players & 100 hours/year & 10000 RMB/hours 6.000.000,00
• Broadcasting fee of the games Total 34.600.000,00
• Ticket sales and merchandise revenue at the stadium Cost
• Streaming revenue from the players (normally the players Stadium rental + facility 150K per match / 20 home matches 3.000.000,00
should stream online, just like club-organized commercial Other fixed cost (including
event of football players, which will give revenues to the club all other cost combined together 3.000.000,00
labour, marketing, etc)
by advertising & tips. This info could provide to candidate average 3,5 million / year & 6 players (including buy &
Players 21.000.000,00
if he/she is not familiar with the industry) sell players among the league)
Cost of merchandise 50% of revenue 600.000,00

Examples of key cost drivers Total 27.600.000,00
Profit 7.000.000 RMB/year
• Fixed cost: Rent cost of the stadium/labor cost
• Variable cost of stadium when hosting game After calculating the profit in 2021, the candidate should justify
whether the number will increase in the following years. If asked,
• Player’s salary assumption is that each year the profit will increase by 0,5 million.
• Cost of the merchandise and derivatives In total, 5-years profit will be 40 million.
Strategy Medium
LOL much? M&A Hard
Synergies & Feasibility Risks

Since the 5-year profit is less that 45 million investment, A good candidate should touch on following risks:
candidate should explore whether the acquisition would • The e-sports industry is mostly driven by mobile. Hence,
generate any new revenue / cost saving for SW. SW should also try to explore the possibility in that area by
Some examples of possible synergies: leveraging the experience of running PHG
• Free advertising for SW through PHG’s matches (average • The life cycle of a video game (how long does it stay
50 million audiences per match) popular among players) might not be 5 years long
• Sales of sportwear with PHG logo • The players are key to the performance of the club.
• Cost saving initiatives leveraged from SW to PHG Regular refresh/upgrade is necessary and comes with
additional cost.
If this topic is discussed, provide candidate information that
study shows that these synergies could provide 2 millions • Time value of money is not considered
saving for SW and PHG.
With this, the 5-years profit (earning) would be 40+2*5 = 50
millions
Even though SW has bot experience running a e-sports club,

Professional manager is available and quite normal in the
industry. So, there won’t be issue in terms of the feasibility of
running the business.

Strategy Medium
LOL much? M&A Hard
Recommendation
You meet CEO at the gate of the building. During the 1 minute walking to the CEO office, he asks you to briefly introduce
your findings about the acquisition.
Sample recommendation
• The acquisition is a good idea.
• With 45 million investment, the acquisition will generate 40 million profit and 10 million cost saving within 5 years.
• The acquisition will provide SW with experiencing in exploring other possibilities in e-sport industry.
And then, some of following risks should be taken into consideration:
• Life cycle of Lol
• Perspective of fans and players
• Ability to maintain competitive within the league to attract sponsors
Next step:
• Start the negotiation and evaluate the risks

Strategy Medium
LOL much? M&A Hard
EXHIBITS 1: market size development for e-sports in China

Market size development of e-sports in China
as of annual revenue; in million RMB
7080 Others Lol Dota
348
Others 6108
Mobile 340 16,4%
22,8% 21,1%
PC 4948
380
4172
392 5332
3280 4400 60,0%
50,3% 52,6%
2864
520 3156
2328 572 2400
580 1320
960
468
26,9% 26,3% 23,6%
1280 1332 1440 1380 1412 1368 1400
2015 2016 2017 2018 2019 2020 2021 (estimated) 2019 2020 2021 (estimated)

Investment Bank Spin-off
By CB16

Investment Bank Hard

Investment Bank Spin-off Investment Bank Hard

• The main reason behind the VP’s request is financial – i.e. end goal is additional profits for the IB
Your client is a leading retail bank in a South
• IBs operate on a fee-based model. They are remunerated as a percentage of the total transaction in which
American country, with over 3,000 branches they facilitated for the company (e.g. 2% fee of a USD 100M transaction means USD 2M in revenues for the IB)
across the country. In addition to the retail
• She suspects that even though being attached to the retail bank provides benefits (e.g. shared systems and
business, the bank also has an Investment
services, access to clients), the IB unit is unable to tap additional sources of revenues (e.g. through Joint
Banking (IB) unit, which acts as an Ventures with other Investment Banks)
intermediary and/or advisor when
• She is also worried about the bureaucracy imposed by the conglomerate, which slows down relevant (and
corporations want to engage in complex sometimes urgent) decisions for the IB unit
financial transactions (for example M&A,
• For simplicity, you can assume that there is no discount rate, time value of money and required NPV
raising capital, initial public offering (IPO),
calculations for the case
etc.).
• Considerations regarding the momentum of the Investment Banking industry are not relevant for this case
The IB unit of this bank is headed by a Vice
President who reports to the bank’s CEO. CASE GUIDANCE
This IB VP hired you to evaluate whether the • This is an interviewee-led case and the candidate should always drive the case and suggest the next
course of action
IB should spin off from the retail bank,
becoming fully independent from the • This is a profitability case on its essence, nevertheless it touches significantly on qualitative aspects of the
Investment Bank spin off
conglomerate.
• It is not expected any prior knowledge of the Investment Bank industry, due to the sector’s specificity,
and candidates with previous knowledge should not benefit from it in this case

STRUCTURE GUIDANCE
A good structure would touch on:
• The financials of the spin off: (i) additional revenues (ii) expected higher costs and (iii) potential lost revenues due to previous cross-sold customers from the retail bank
• Considering break even period, NPV and other metrics related to the financial return of the spin off is a nice plus of the structure (although not used for case’s calculations)
• Consideration of several qualitative aspects regarding the newly created IB is crucial: new IB strategy, legal entity, culture, organizational structure, operational model,
governance, positioning against competitors, etc.
SAMPLE STRUCTURE
• Revenues impact: impact on transaction volume and average fee by business line (M&A and Advisory, Sales, etc.). When the candidate asks for data on revenues, please
show them Exhibit 1
• The candidate is not expected to know that revenues for an Investment Bank are generated, in general, based on a fee of the total transaction. The information
should be given to the candidate if he/she does not mention this aspect
• Cost impact: in general, costs are expected to grow because the Investment Bank benefitted from sharing structure and services with the retail bank conglomerate. When
the candidate asks for data on costs, please show them Exhibit 2
• Qualitative aspects of the spin off:
• IB Strategy
• Governance
• Organizational structure
• Operational model
• Capabilities to become standalone
• Competitive landscape 182
• …
Revenues: when the candidate asks for data on revenues, show them Exhibit 1 and ask for insights. It will be then expected that the candidate starts the revenue calculation
• The fastest way of calculating is to compute the revenue differential by the difference of market share between the current and expected scenario.
• A slower calculation would be to calculate the current revenues, expected revenues and subtract one from the other. One benefit of using this approach is that the expected
revenues will be used for the Costs calculations
Costs: likewise for revenues, show Exhibit 2 and ask for insights. Then, the candidate should be prompted for starting the calculation (please refer to Exhibit 2)
• It is expected that the current cost structure of the IB will change because it benefitted from shared services with the retail bank (e.g. IT, rent, etc.). The IB would now have
to, for example, rent a building, hire an IT provider and other extra expenditures that were not previously needed
• Here the candidate should make fair assumptions on what is the fair share of cost items (as % of revenues) based on benchmarks of Investment Banks similar to our client,
shown in Exhibit 2 (which are separated standalone Investment Banks)
SOLUTION
Revenues:
• Current revenues: Transaction market * Average fee * Current market share = 500M * 5% * 10% + 600M * 4% * 35% + 400M * 8% * 20% + 1,500M * 2% * 5% = USD 18.8 M
• Expected revenues: : Transaction market * Average fee * Expected market share = 500M * 5% * 20% + 600M * 4% * 25% + 400M * 8% * 30% + 1,500M * 2% * 15% = USD 25.1 M
• Thus, incremental revenues of USD 25.1 – 18.8 = 6.3 M - One good insight is that the USD 6.3M revenue increase is precisely a 1/3 increase in total revenues
Costs: the items that the client, when associated with the Retail Bank, paid apparently less than peers were IT and systems, and Rent & Maintenance (likely due to shared services,
premises and systems). For IT, the cost representativeness will increase from 1% to 5% of total revenues and Rent from 2% to 6%
• Current IT Costs: USD 200k ; current Rent & Maintenance costs: USD 400k
• New IT Costs = 5% * 25M = 1.25M ; New Rent & Maintenance costs = 6% * 25M = 1.5M → Incremental costs of USD 2.75M – 600k = 2.15M
Profit: in summary, the new bank will have a greater profit of USD 6.3 – 2.15 M = USD 4.15 M (meaning that financially speaking, it makes sense to spin off)

EXHIBIT 1 – CURRENT AND EXPECTED REVENUES BY BUSINESS LINE
Business Line Total transaction Average fee1 Current market Expected market
market share share2
Equity Capital Market (ECM) USD 500 M 5% 10% 20%
Debt Capital Market (DCM)3 USD 600 M 4% 35% 25%
M&A and advisory USD 400 M 8% 20% 30%
Sales and trading USD 1,500 M 2% 5% 15%
1. Revenues of Investment Banks are generally calculated as a standard fee that is a percentage of the total value of a determined transaction (e.g. an IPO)
2. After the spin off from the retail bank. Estimates provided by the client
3. The market share in DCM is expected to drop because the Retail Bank cross-sells DCM deals to the Investment Bank, which will not happen if they are separate

EXHIBIT 2 – INVESTMENT BANKS COST STRUCTURE BENCHMARK (P&L)

Sales (USD M):
The two benchmarked banks are comparable to our client’s bank in
operations, sales mix, geography and other aspects relevant to the P&L 19 55 40
Both banks are purely standalone IBs, with no Retail Bank unit
Our client understands that front office and back office staff will not
change their representativeness on total costs with the spin-off
35% 37%
39%
P&L Summary USD’000 % sales
(+) Sales 18,800 100%
(-) Personnel - Front office 7,300 39%
6%
(-) Personnel - Back office 1,500 8% 7%
8% 5%
(-) IT and systems 200 1% 1% 4%
2% 6%
6%
(-) Rent & Maintenance 400 2%
49% 47% 45%
(-) Other expenses 150 1%
Operating profit 9,250 49%
Our client’s bank Benchmark bank 1 Benchmark bank 2
Front office staff Back office staff IT & systems Rent & maintenance Other expenses Operating profit

Aside from financial considerations, what are other pros and cons of spinning off the Investment Banking unit from the rest of the conglomerate?
SAMPLE ANSWERS
Here there is no right answer, but the idea is rather to test the candidate’s creativity on this type of business situation
Pros
• Reduced bureaucracy with no formal ties with conglomerate
• Greater organizational “identity” - new IB culture
• Possibility of more flexible work arrangements typical of Investment Banks
• Openness for engaging with other institutions (for example establishing a Joint Venture with another Investment Bank)
Cons
• Increased costs (IT & systems, Rent & maintenance) end up higher than expected
• Cross sell with retail bank is significantly reduced or clients leave the IB bank after spin off non mapped reasons
• In the future, the Retail Bank may create another IB unit (new competitors)
• Lack of strategic perspective previously provided by other areas of the bank
• Limitation on talent transfer between bank areas
• Legal aspects not considered

Our client just messaged you saying that she is now free and would like to hear your current viewpoint on the project. What is your recommendation?
Being concise, structured, and mentioning only relevant points mentioned in the case are crucial for a good recommendation.
Based on the financial calculation, the recommendation should be to pursue the spin off. When explaining the reasoning, the candidate should bring critical numbers calculated
during the case
It is also important that the candidate mentions the pros, cons and risks associated with the recommended spin off
A great plus from the recommendation would be to suggest potential next steps for implementing the spin off

OncoCo
CB21
PE / Pharmaceuticals Easy
M&A Hard

OncoCo M&A Hard

• PE target: EBITDA margin > 20%
A private equity client owns a specialized • Liquid Morphine: Used to treat severe pain, for example after an operation or a serious injury, or pain from
pharma manufacturer called OncoCo which cancer or a heart attack. Morphine liquid is fast acting and used for pain which is expected to last for a
focuses on cancer treatments. OncoCo is not short time, e.g. when you start taking other forms of morphine to help find the right dose. Usually
only profitable, but also experienced steady morphine is prescribed by pain specialists
growth in the past years. Hence, the PE fund • Commercial rights means that OncoCo will be able to produce and sell the product under its name. Often
was surprised when the management board pharma companies purchase existing stocks and have the opportunity to either renegotiate the contracts
of OncoCo stated that they expect declining with raw material suppliers or continue under existing conditions
profits in the future. OncoCo’s management • Declining revenue: expect a drop in revenues of 100m€
board has also suggested, to cushion the • BM: OncoCo’s income stems from one drug to treat a very niche, late stage cancer
decline with the acquisition of an additional • Price (treatment costs) per year: 10k€
asset. In particular, OncoCo’s board received • Location: EU
the opportunity to purchase the commercial
rights of liquid morphine. CASE GUIDANCE
The PE fund has asked us to figure out why a • Ask value added question: Its is a complex industry, candidates might feel tempted to ask unimportant
decline is expected and whether they questions because they don’t know the industry
should move forward with the acquisition. • Don’t boil the ocean: Despite being a PE case, we don’t get into the business model of the PE itself and
despite being an M&A case, we focus only on the target product (asset in pharma language).
• Acquisition price is irrelevant in this case
• Case duration: ~35 mins
OncoCo M&A Hard
SAMPLE STRUCTURE
The main focus of the case is the acquisition,
hence the structure should emphasize the
Total yearly revenue of the
deal over the decline in revenue (or even target asset
exclude). Creating two structures to answer
both business questions is totally fine as long Can the PE achieve >20%
as the M&A structure is more thorough. EBITDA margin Total yearly costs of the
Either way, both questions have to get target asset
answered. Ideally, the candidate starts with
the OncoCo’s current business first before Should OncoCo acquire
diving into the acquisition. the commercial rights for Strategic fit of the
acquisition
liquid morphine?
Simplicity and specificity wins!
Does OncoCo have the
Can OncoCo mitigate the capacity and capability to
potential risks produce and sell the new
drug
Are there less risky

opportunities to pursue

OncoCo M&A Hard
Profit analysis of OncoCo

Begin by investigating why profits are expected to fall and hand out Exhibit 1: profit analysis OncoCo. The candidate can spend a few moments to
digest the information but is expected to comment on the insights fairly quickly as all the math can be done mentally.
Expected takeaways from Exhibit 1

A good candidate will mention:
• Expected drop in revenue in 2022? 100m€, loss of 2/3
• Price of the drug? 10k€
• Profit in 2020? 40m€
A very good candidate will mention:

• EBITDA margin is not only >20% (26.7%) but also very high in general in 2020 & 2021
• However, margin drops to 0% in 2022
• Possible reasons for the expected price drop?
• E.g. new entrant of a better performing drug, no longer owning the commercial rights to sell it in certain geographies
• Real answer: patent expiration and with that entry of generics
• Once the candidate understood why the decline is happening, he / she should suggest to look into the acquisition next, e.g. getting a better
understanding of the morphine market

OncoCo M&A Hard
EXHIBIT 1 – Profit analysis

OncoCo profit development from 2018 – 2022 [in M€]
Forecast
160 M€ 150 150 30,0%
140 M€
125 25,0%
120 M€ 110 110
100 20,0%
100 M€ 95
80 Revenues
80 M€ 15,0%
Total Costs
60 M€ 50 50 EBITDA Margin
10,0%
40 M€
5,0%
20 M€
0 M€ 0,0%
2018 2019 2020 2021 2022
Volumes
10 12.5 15 15 5
[in K]

OncoCo M&A Hard
Market analysis of liquid morphine

Continue with the analysis of the morphine market and hand out Exhibit 2: morphine market. The candidate is expected to request the missing
information proactively. This slide has some more complicated calculations, hence the candidate can spend more time on the math part. Ensure that
the candidate receives all the quantitative information mentioned and bolded below (ask questions if the candidate does not pro-actively requests it).

• Some data is missing, ideally the candidate asks for the total revenue of the morphine market. 6,25bn€
• Quantify and comment on the fact that liquid morphine is a rather small part of the morphine market. 8% (500m€)
• The target assets represents the category leader with a share of 25 % of the liquid morphine market (125m€ revenue)

• Comment more on the fact that the target is category leader: Most likely originator & the strongest brand and hence can influence the market
• Asks for the average EBITDA margin of the industry: 20%
• With this information, the candidate should directly mention that it meet’s the PE fund’s target margin of 20%, but also highlight that profit
is lower than the profit from OncoCo’s current product (25m€, 15m€ less)
• An outstanding candidate will calculate the market share required to achieve the same profit (40m€), suggested approach:
• Required revenues: 40m€ / 0.2 margin = 200m€ revenues
• Required market share: (0.25+x)500=200 → x = 0.15, required market share = 40%
• The candidate should finish by arguing whether achieving 40% is possible. There are good reasons for and against it, e.g.: Adding 15% more
market share is doable as target asset is the category leader and there seem to be many very small players that could be consolidated.
• Either way, the candidate should request more details on the target asset’s performance or company
OncoCo M&A Hard
EXHIBIT 2 – Morphine market

Morphine market by formulation in 2020 [in % of sales] Liquid Morphine market in 2020 [in % of sales]
40%
25%
4%
8%
55%
10%
16%
32% 10%
Intravenous Liquid Injection Capsules Tablet Target Asset Drug A Drug B Others

OncoCo M&A Hard
Profit analysis of target asset

The candidate might wants to rush and analyze competition or other external factors. However, we still know very little about the actual target and
should investigate further, hand out Exhibit 3: profit analysis of target asset. The chart looks very similar to the first exhibit, but the difficulty here is to
identify the differences correctly (and not fall for the traps).

• Profit has decreased after 2017, but it looks like the company was able to get back on track and previous performance
• Since we talked about price before, the candidate should calculate it here too. Exhibit 1 and 3 show [volumes in K] but given the figures in exhibit
3 are in thousands, a careless candidate might ignore it and compute 10k as result. Correct answer, 10€

• Suggestions as to why profit decreases and identifies possible explanations for the decrease in revenues and increase in costs:
• Revenues down: competitor entry, stock-outs, scandal that led to bad perception of product
• Costs up: production issues, investments in new technology directly related to product, legal costs
• Correct Answer: Opioid crisis -> physicians used morphine much less (revenues down) and had to settle several legal lawsuits (costs up)
• However, morphine sales recovered as it is a basic medicine, but manufacturers has to stick to tighter guidelines (Fixed costs up)
• Realize that this is a mass product which requires a total different business model than OncoCo’s existing ones
• The candidate should end this slide by computing the EBITDA margin (32%) and highlight that: (i) it is higher than market average, presumably
based on higher price since originator or economies of scale, (ii) margin meets the PE funds requirements
• Despite meeting PE fund’s target margin, the candidate should suggest to assess more qualitative aspects of the acquisition
OncoCo M&A Hard
EXHIBIT 3 – Profit analysis target asset

Profit development of target asset from 2016 – 2022 [in M€] Forecast
160 M€ 150
140 M€
125 125 125 125
120 M€ 110
100
100 M€
82 85 85 85
80
80 M€ Revenues
Total Costs
60 M€ 50
45
40 M€
20 M€
0 M€
2016 2017 2018 2019 2020 2021 2022
Volumes
12,500 15,000 10,000 11,000 12,500 12,500 12,500
[in K]

OncoCo M&A Hard
What other aspects than the EBITDA margin should the PE fund consider, before acquiring the commercial rights? Ideally, this part is covered by the
rest of the candidates framework and hence the candidate can quickly come up with a structure. Either way, a very good candidate will be able to
structure the points and have a meaningful discussion with the interviewer about the pros and cons of each point. The discussions does not need to
capture all points mentioned below and should not last longer than 5 minutes.
SAMPLE ANSWERS
Strategic Operational Other opportunities
Is pain medicine a strategic reasonable addition to the Is OncoCo able to serve a mass market? Lawsuit to extend patent
portfolio? + ”Simple” product that does not require a lot of + Requires little “extra” effort since it can be outsourced
+ Diversification marketing efforts - High uncertainty until lawsuit is settled (which probably
- Different business model - Likely a need to build up production facilities and sales will take some time)
team from scratch
Does OncoCo want to get associated with Opioids and Are there any synergies in our production facility we can Change formulation
their negative reputation? use to reduce costs? + Allows to extend patent for another 5-10 years
+ Morphine has the “best” reputation + Lots of spare capacity starting 2022 - Likely too late as R&D phase has to be initiated
- Can harm the other product as well, image issues - Totally different production process and magnitude
Switch from specialized product with few patients to Acquire another asset
mass products with many patients + Identify a more similar asset
+ Enter a larger market - Assessment has to be repeated
- Management might not know how to play in that
market
OncoCo M&A Hard
We have the Zoom call with the PE fund in 3 minutes, could you please present our findings?
There are good reasons for and against an acquisition. A good answer answers the initial questions first and then presents the findings:
[Recommendation] OncoCo’s board expects a 2/3 drop in revenues because of the loss of exclusivity of its only product and suggests to acquire the
commercial rights of liquid morphine to cushion the profit decline. However, despite the attractive EBITDA margin of 32%, we do not recommend to
proceed with the acquisition as the risks outweigh the potential financial benefits.
[Risks] In particular, we think that OncoCo’s current business model is in stark contrast to the ones of the target asset, making it very questionable
whether the PE fund will be able to achieve the financial return without heavy investments in their production facilities and sales team. Further, it has
to factor in the negative reputation of Opioids that might affect OncoCo’s enterprise value in the long term.
[Next steps] We propose to look for another asset that fits better to OncoCo’s current portfolio, potentially within the same therapeutic area
(Oncology).

CONTENT
❖ CASES

Cowbon Emissions
By Emily Hinton (IESE MBA 2021)
Agriculture Easy
Sustainability Medium
Operations Hard

Agriculture Easy
Cowbon Emissions Sustainability

Operations
Medium
Hard

Our client is a major milk producer in New • MIC produces approximately 100% of New Cowland’s milk supply
Cowland, Milking it Co., MIC. New • MIC does not have plans for expansion, but reducing volumes is not an option
Cowland has recently introduced a law • They only produce milk and have no plans to diversify
that means MIC has to reduce its GHG • Budget for this project is $750m/year for the next five years (for perspective, current revenues are
emissions by 45% of 2019 levels within $15billion)
the next five years or face being shut • MIC owns the entire production chain – from farms, production and transport, they sell to a variety of
down or heavily fined. They currently clients
produce 20% of New Cowland’s GHG The candidate might ask what the breakdown of where GHG comes from within the business, this is shown in
emissions. Exhibit 1
• 5% of their market is local, the rest is foreign
The CSO has hired us to figure out a way • Only need to reduce GHG directly produced by MIC
to reach this target.
CASE GUIDANCE
This case is designed to test brainstorming, business decision-making skills and logic. It will help candidates
wanting to practice market sizing and working on unconventional problems. For calculations ignore the time
value of money.
It is a long case designed for advanced candidates; some aspects can be removed for the sake of time – these
are clearly marked.
Interviewer guidance has been provided at various stages.

Agriculture Easy

Operations
Medium
Hard
INTERVIEWER GUIDANCE - STRUCTURE

A good framework would touch on:
• Different ideas to reduce GHG emissions in the different segments of • Non-financial implications – PR, risks (e.g., change in government, a
the business (farming, processing, transportation, overheads, etc.) backlash from farmers)
• Ability to implement changes The candidate should lead the case towards understanding the current
• Financial implications breakdown of GHG emissions – if not, the interviewer should gently nudge
toward this path.
GHG EMISSIONS ANALYSIS EXHIBIT 1 TAKEAWAYS

• GHG emissions have been increasing over the last three years with farming
The candidate should be presented with Exhibit 1 if s/he asks about being the key driver
the breakdown of GHG in each business segment. Candidate should
be told that MIC has already taken measures to reduce Overheads • Farming is the largest emitter followed by production
Emissions and MIC believes that there is no further that can be done • From farming, cows are by far the largest emitter producing 63% of 2019’s
to reduce these. emissions – this would be the key thing to look into first as it can make the
biggest difference (it is the only value that is over 50% of the emissions by
itself)
• Processing is the second biggest emitter so that should be focused on next
(20% of total emissions)
The candidate should identify cows as the first logical step to explore in
reducing emissions.
Agriculture Easy

Operations
Medium
Hard
EXHIBIT 1 - TRENDS OF GHG EMISSIONS OF MIC

Total GHG emissions (millions of tons) 5,0
19,5 20,0
19,0 5%
5% 80% Processing
Overheads 10%
25% 25% 20% Transportation
Production 25% Production (2019)
14,0
70% 70%
Farming 65%
90% Cows
10% Other
2017 2018 2019 Farming (2019)

Agriculture Easy

Operations
Medium
Hard
COW EMISSION ANALYSIS ESTIMATION DATA

There is a new breed of cow that MIC is interested in to replace their Provide only if requested:
current herd. All characteristics are the same as the current herd, but • Population of New Cowland: 5 million
they produce 33% less GHG emissions.
• Milk produced per cow: 10L/days
As MIC owns farms all over New Cowland, they want us to approximate
how many cows they have in total. • Number of days in a year: 300
• Domestic market: 5% of sales
• Domestic market share: 100%
• Average milk consumption per person: 150L/year
SUGGESTED CALCULATION
** if the interview is progressing slowly, skip this estimation and give the number Total annual domestic consumption:
of cows of 5 million, then move straight to part 2 after reading the prompt [Milk consumption per person]*[population of NZ]
below** = 750 million L/year
Cows required for domestic consumption:
This is an estimation problem – the candidate should recognize the need to size the [Annual dom. Cons.]/([Daily pro./cow]*[days in a year])
herd using suitable assumptions, provide the estimation data only if the candidate = 250,000 cows
asks. Total cows:
[domestics cows]/[% of market]
= 5 million cows

Agriculture Easy

Operations
Medium
Hard
COW EMISSION ANALYSIS

Knowing that there are 5 million cows in the MIC herd and the average life of a dairy cow is 5 years. Calculate the total cost of replacing the herd
and the total emissions saved from this replacement.
• The old breed cost $2000 and the new breed costs $2500 to purchase
• The old breed emits 2.5 ton/year and the new breed emits 33% less GHG
SUGGESTED CALCULATION & TAKEAWAYS

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Cost [1 million cows] [1 million cows] [1 million cows] [1 million cows] [1 million cows]
*[$500/cow] *[$500/cow] *[$500/cow] *[$500/cow] *[$500/cow]
= $500 million = $500 million = $500 million = $500 million = $500 million
GHG ton reduction [1 million cows]* [2 million cows]* [3 million cows]* [4 million cows]* [5 million cows]*
[0.33*2.5t] [0.33*2.5t] [0.33*2.5t] [0.33*2.5t] [0.33*2.5t]
Or Or Or Or Or
[12.6million tons]* [12.6million tons]* [12.6million tons]* [12.6million tons]* [12.6million tons]*
[33%]/[5/1] [33%]/[5/2] [33%]/[5/3] [33%]/[5/4] [33%]/[5/5]
= 0.825 mil tons = 1.65 mil tons = 2.475 mil tons = 3.3 million tons = 4.125 mil tons
% GHG reduction 4.125% 8.25% 12.375% 16.5% 20.625% (~21%)
Candidate can calculate only Year 5 as this is the final number required but must check that the annual budget is not exceeded.
Candidate should conclude that this is approximately halfway to our goal, spending 67% of our budget.
Next should look at reducing emissions from production.

Agriculture Easy

Operations
Medium
Hard
PRODUCTION EMSSIONS ANALYSIS

What are some ways that the GHG emissions can be reduced during the production phase?
BRAINSTROMING SAMPLE
** if the interview is progressing slowly, skip this brainstorming and move straight to part 2 after reading prompt 2 on this page**
This brainstorm is a chance for the candidate to be creative. No structure is superior but looking at options split between processes and transportation is one way to go. Keep
pushing until you are satisfied with the ideas generated.
PROCESSES TRANSPORTATION
Alternative power sources (all renewable) Larger trucks (i.e. less GHG/L transported)
Carbon capture of emissions Electric vehicles
More energy-efficient processes Shorter routes of transportation
R&D into different ways to process milk Regular maintenance to increase efficiency
Outsource production Outsource transportation
Shutdown inefficient plants

Agriculture Easy

Operations
Medium
Hard
PRODUCTION EMSSIONS ANALYSIS

MIC has been looking into different ways to reduce GHG emissions in both processes and transportation and they have identified these options
(show Exhibit 2).
CALCULATION AND TAKEAWAYS – EXHIBIT 2

This exhibit is intentionally challenging to understand, point
the candidate towards the footnotes if they are struggling to TOTAL GHG
COST PER TOTAL COST GHG REDUCTION
understand the meaning of each column. REDUCTION (5
YEAR (5 YEARS) PER YEAR
YEARS)
Key insights from Exhibit 2:
Renewable $150 [$150m] * [25%]*[80%]*[70%] [2.8%] * [5 years]
• Conversion to renewable energy has the largest emissions
energy million [5years] *[20%]= 2.8% (0.56 = 14% (2.8 mil
savings (potential reduction of 14% of GHG) and can be
source =$750 million mil tons) tons)
completely replaced within the 5-year period
• Replacing sterilizing units will only reduce emissions by 4% New $100 [$100m] * [25%]*[80%]*[20%] [0.2%] * [5 years]
total and will take 20 years to carry out Sterilizing million [5years] *[5%]= 0.2% (0.04 = 0.8% (0.2 mil
Process =$500 million mil tons) tons)
• The other processes are also not cost-effective and should
be written off straight away Transport $50 [$50m] * [25%]*[20%]*[100% [2.8%] * [5 years]
electrification million [5years] ]*[20%]= 1% (0.2 = 5% (1 mil tons)
• Transportation is a cost-effective method of GHG reduction
=$250 million mil tons)
which can be completed within 5 years and will reduce
emissions by 5% total
The candidate should conclude that conversion to renewable energy and electrifying the transport
fleet will be the most efficient costing $200m/year and reducing the GHG emissions by 19% in total
by year 5

Agriculture Easy

Operations
Medium
Hard
EXHIBIT 2 - ALTERNATIVES TO REDUCE GHG EMISSIONS OF MIC

PROPOSED TOTAL %
MAX. % ANNUAL UNIT ANNUAL TOTAL COST
CHANGE TO REDUCTION OF # OF UNITS2
REPLACEMENT 3 OF MAX REPLACEMENT4
PRODUCTION EMISSIONS1
Renewable energy 70% 10 20% $150m

source
New Sterilizing 20% 20 5% $100m

Process
Process
New Packaging 2% 50 20% $50m
process + material
Other 0.1% 500 10% $1m
Transport Electrification of 100% 500 20% $50m

fleet
1 % of reduction in GHG emissions that the process or transportation will emit, based on the current emissions shown in Exhibit 1, once 100% of the units have been replaced
2 number of units MIC currently owns that can be replaced in a 1:1 ratio with the new alternatives
3 % of units that can be replaced annually (due to end of life requirements) e.g. a total of 2 units can be replaced per year for ‘renewable energy source’
4 How much it will cost MIC annually to replace the maximum allowable units e.g. will cost MIC $150m to replace 2 units of ‘renewable energy source’ per year

Agriculture Easy

Operations
Medium
Hard
RECOMMENDATION
Great, the CSO is about to join us, can you please provide her with a brief summary of what we have discussed today?
• We should replace the herd with the new breed to reduce emissions by 21% in year 5, costing $2.5 billion
• We should convert to renewable energy and replace our transport fleet reducing our emissions by 19% in year 5, costing $1 billion
• These actions will get us 90% towards our target of 45% reduction
• We have $50m/year of our budget left to figure out the last 10% which could include.... (any ideas that you have discussed e.g., carbon credits, hiring a lawyer to reduce
potential fines, other emission reductions)
A great candidate would also briefly discuss any risks or next steps:
• Adaption to new technology
• Chance new breed has challenges
• Views from employees and farmers about changes
• Chance of lobbying government so the law is reversed
• Next steps: contact breeders to make sure they have enough cows, look for other reduction methods, etc.

African Gold Mines Co.
By Marc-Olivier Granger (IESE MBA 2021)
Mining Easy
Operations Medium
Profitability Hard

Mining Easy
African Gold Mines Co. Operations

Profitability
Medium
Hard

African Gold Mines Co. (AGM) is a junior gold • Costs have increased by 20% over the past 5 years
producer with one open-pit mine currently in • Mining department costs in 2019 were $36m
production in Cameroon. The mine was • Revenues for the entire company in 2019 were $375m
established 10 years ago, and forecasts
• Target is to return to profitability level of 5 years ago meaning reducing costs by 6m.
predict at least another 10 years of
consistent gold production. Last year, AGM • Cost 5 years ago = 36/1.2=30 Cost reduction= 36-30 =6m
produced 250k oz of gold from their mine.
They have come to us as their profit level has
been slowly decreasing over the past five
CASE GUIDANCE
years. They had numerous operational issues This is an interviewee-led case and the candidate should always drive the case and suggest the next course
with the mining equipment, problems with of action.
the workers’ union and issues with This a profitability case that focuses on the cost side. Some information can be given first regarding
community relations notably. revenues, but no conclusion can be drawn.
They want us to investigate what is the best The candidate should have some form of a profitability tree as a structure. The more specific to mining, the
course of action for their operation to better.
return to their previous level of profitability Once the structure is done, direct the interviewee to look into revenues first, then, hand over Exhibit 1.
within 12 to 24 months. They want us to Looking at costs, the candidate should identify that the best opportunity to reduce cost is to examine
specifically focus our attention to the mining equipment maintenance & fuel consumption.
department of the company. From there, the candidate will be informed that AGM has been looking at changing its fleet of trucks and be
given the four alternatives to choose from.

Mining Easy

Profitability
Medium
Hard
REVENUE ANALYSIS REVENUE ANALYSIS

Regarding revenues, our client has done some analysis. Here is a What do you think are the biggest costs drivers as part of such
chart of AGM’s historical gold production and yearly average gold mining operations? What do you think we should focus our
price (Show Exhibit 1). attention on?
TAKEAWAYS – EXHIBIT 1 BRAINSTORMING SAMPLE

From Exhibit 1, the interviewee should understand that despite the In this section, the candidate should brainstorm any type of costs
variation in price and production the total revenues have remained related to mining and prioritize which one should be focused on.
about the same. Furthermore, gold prices, like for any other Many structures could be appropriate here, variable/fixed, or by cost
commodities, are decided on the markets and there is very little that item (salary, maintenance, overheard, etc.) The interviewer should try
AGM can do to influence the prices. In addition, geology dictates the to keep the interviewee focused on mining costs. The interviewee
volume of gold that can be mined each year, this is part of the long- should also come up with a priority list and explain why. No prior
term plan of the company and cannot be altered. From this knowledge of the mining industry is required here. It is the same
conclusion, the candidate should push the case into the cost branch principle as any big industrial process i.e., Airlines, Manufacturing,
of the tree. etc.
Once this is finished, the interviewee should be given Exhibit 2

Mining Easy

Profitability
Medium
Hard
EXHIBIT 1 - REVENUE STRUCTURE OF AGM

$ per ounce of gold
Tones of gold
375.000 $1.550
350.000
$1.500
325.000
300.000 $1.450
275.000 $1.400
250.000
$1.350
225.000
200.000 $1.300
175.000 $1.250
150.000
$1.200
125.000
100.000 $1.150
75.000 $1.100
50.000
$1.050
25.000
0 $1.000
'13 '14 '15 '16 '17 '18 '19
Gold Production Gold Price

Mining Easy

Profitability
Medium
Hard
EXHIBIT 2 - COST STRUCTURE OF AGM MINING DEPARTMENT

Cost of Mining Operations at AGM Average Brent Crude Oil Price Annually
Other Expenses; 5% $120,00
Overhead;
10% $100,00
Equipment
Maintenance; 30% $80,00
$60,00
$40,00
Salary; 28%
$20,00
$0,00
Fuel; 27% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
COSTS VARIATION YoY AT AGM MINING OPERATIONS

Costs ‘15 ‘16 ‘17 ‘18 ‘19
Salary 1% 0% -2% -1% 1%
Maintenance 3% 9% 9% 12% 19%
Fuel 3% 3% 5% 9% 13%
Overhead 1% 1% 2% 0% 1%
Other 1% 5% 5% 0% 0%

Mining Easy

Profitability
Medium
Hard
TAKEAWAYS – EXHIBIT 2
Exhibit 2 is purposely very busy to evaluate how the candidate can associate information from different sources together.
In the end, the candidate should quickly identify maintenance costs and fuel costs as the two main drivers of the drop in profitability of AGM, but
also acknowledge that salary is a big cost.
Once the candidate has indicated s/he would like to investigate maintenance/fuel, hand over Exhibit 3.
TRUCK SELECTION ALTERNATIVES ANALYSIS

Our client has been looking at replacing its fleet of mining trucks as the fleet is getting very close to the end of its useful life. They have done
some analysis and found four possible alternatives. Show Exhibit 3.
TAKEAWAYS – EXHIBIT 3
The interviewee should compare the financials of the four alternatives. The exhibit also gives the state of the current situation for comparison
purposes. The four alternatives are:
1. Overhaul of the current fleet by keeping the same trucks but changing major components.
2. Buying a new fleet of the exact same truck.
3. Buying a fleet of a new model of diesel trucks from a different supplier.
4. Buying a fleet of new semi-electric autonomous trucks from the same supplier that require less fuel and no driver to operate.

Mining Easy

Profitability
Medium
Hard
CALCULATION – EXHIBIT 3
ALTERNATIVES FUEL COST PER YEAR MAINTENANCE PER YEAR CAPEX PER YEAR TOTAL COST PER YEAR
Current Situation
20*300*95 = $570k $540k $100k 570+540+100=$1210k
Caterpillar 777E
Overhaul of Current
20*300*80 = $480k $500k 600/5= $120k 480+500+120=$1100k
Caterpillar 777E
New Caterpillar 777E 20*300*60 = $360k $340k 1000/10= $100k 360+340+100=$800k
Komatsu HD785-7 20*300*70 = $420k $450k 1200/12= $100k 420+450+100=$970k
Caterpillar 780D
20*300*40 = $240k $360k 1600/8= $200k 240+360+200=$800k
Autonomous Semi-Electric
FURTHER INFORMATION (if requested)

• Trucks are working 20 hours per day • Assume straight-line depreciation
• Trucks work 300 days per year • Candidate should also compare the new alternative to the current to see if it
fulfills our client requirement of reducing cost by 6m.
• Price of Fuel is 1$/L
Old situation – New = $1210k-$800k = $410k per truck x 20 trucks =Savings of
• The mine uses 20 trucks 8.2m per year. Regardless of which option the candidate chooses, it meets our
• Specification and capacity of all trucks are similar. They all can do the job client requirement
• Ignore the time value of money

Mining Easy

Profitability
Medium
Hard
EXHIBIT 3 - TRUCK SELECTION ALTERNATIVES FOR AGM

MAINTENANCE COSTS
ALTERNATIVES CAPEX FUEL CONSUMPTION EXPECTED LIFE
PER YEAR
Current Situation:
$0.1m $540k 95 L/hr 1 yr
Caterpillar 777E
Overhaul of Current
$0.6m $500k 80 L/hr 5 yrs
Caterpillar 777E
New Caterpillar 777E $1.0m $340k 60 L/hr 10 yrs
Komatsu HD785-7 $1.2m $450k 70 L/hr 12 yrs
Caterpillar 780D
Autonomous Semi- $1.6m $360k 40 L/hr 8 yrs
Electric

Mining Easy

Profitability
Medium
Hard
TRUCK SELECTION CRITERIA/RISKS - BRAINSTORMING

From the calculation of the four alternatives, the interviewee should understand that both the new 777E trucks or 780D autonomous trucks are
financially the same. The interviewer should prompt the interviewee to brainstorm on criteria/risks that our client should consider when making
the decision. This brainstorming could be structured in many forms, but Pros & Cons would be appropriate.
SAMPLE BRAINSTORMING
PROS CONS
• Same model the client has been using • Possible higher wage costs
• Same spare parts / supply chain • Possible higher operation costs if fuel prices increase
777E
• Same maintenance processes • Potentially more dangerous options

• Good training of employees • Operational efficiency might be less
• Longer life 10 years • Require continuous training of operators
• Lower fuel consumption, costs saving could be more important if fuel • New technology which might be harder to implement in a very
prices go up remote site in Africa.
780D Autonomous
• Further cost saving possible if employees can be laid off • Technical support might be harder to obtain
• Increased safety benefits • Maintenance and operation personnel will require training, and
• Potential increased operational benefits since these trucks could be this might be hard to obtain in a remote setting
more efficient • New spare parts / supply chain required
• No training required for operators • Old inventory might not be usable
• Lower fuel consumption = Lower GHG emissions, a more • Laying-off employees in a small village in Africa might not be
environmentally friendly option appreciated by the communities
• Shorter life 8 years
Mining Easy

Profitability
Medium
Hard
RECOMMENDATION
Our client is coming to our office in a couple of minutes and we need you to make a recommendation.
In this case, there is no one good answer. Both the 777E and the 780D options are financially equal and both could be defended. The interviewee
should use the result of the financial analysis and the brainstorming to make a sound and logical argument for which option is chosen.
The recommendation should include:
• The interviewee should structure the recommendation by stating that the AGM has a cost problem mainly based on the high maintenance cost
and fuel consumption of the old trucks.
• To reduce their costs to their previous level, the company should change its fleet of mining trucks.
• Indicate which option s/he chooses and back that up with logical arguments from the brainstorming.
• Acknowledge some of the risks related to that option.

Nica Productions
By Alfonso Tomás Durandeu (IESE MBA 2021)
Media & Entertainment Easy

Operations Cost Hard

Nica Productions Profitability

Operations Cost
Medium
Hard

Nica Productions is an American Media • There is no specific profitability goal
company that is trying to figure out its next • The company is known worldwide, with access to top star directors, actors and technical
project. This company has an extensive staff
experience producing series and movies • It has not budget limitation
for all types of audiences and has got many
awards doing so. This company has two • Both alternatives look for a worldwide reach but target different type of customers
alternatives: to produce a series for a • Production of any alternative will last one year
streaming company or a movie to be • There is no alternative project
projected in cinemas worldwide.
• The main source of revenue of both projects depends on audience
Producing media content implies big
investments and low certainty about CASE GUIDANCE
potential incomes, which depends on
This is a quantitative case that requires the candidate to estimate the potential cashflow of
many factors; for that reason, our client
different alternatives in order to get the NPV and decide the best option for the client.
has hired us to help her decide which is
the best alternative for her. The candidate will need to ask for additional information that is necessary to solve the
problem, rather than relying on the interviewer to dispense it.
Especially for less finance-read candidates, you may have to help nudge trough the math and
formulae.


Operations Cost
Medium
Hard
INTERVIEWER GUIDANCE – STRUCTURE

The candidate should express that the company will pursue the project that generates the higher positive profits and show that in his/her
Framework.
• A good candidate will take into consideration uncertainties related to production and revenues streams and express the intention to estimate NPV
of each project.
• Other aspects to bear in mind are competition, market trends, company’s strategy, etc.
If asked for information about REVENUES and COST, make him/her BRAINSTORM about it.
• A good candidate would understand that revenues come not only from tickets or broadcasting royalties but also from merchandising, games,
DVD/Blu-rays, etc. In terms of cost, the candidate should mention the basics: director, actors, production, marketing, etc.


Operations Cost
Medium
Hard
PROJECT ALTERNATIVES ANALYSIS – MOVIE

The company is not sure about which type of movie they want to produce and if it will be able to hire the director and actors for the desired
alternative. However it was able to assign probabilities for each scenario. Income will depend on the size of audience movie attracts, which further
depends on the critics received. Which project (movie or series) should our client choose? (Show Exhibit 1).
ANALYSIS TAKEWAYS - MOVIE

In order to estimate the NPV of this alternative, the candidate should calculate the corresponding Cash Flows and request for a Discount Rate (20%).
The investment are made at the beginning of the project and incomes are received at the end of year 1 (Solution in the following slide).

- read the note to get the information about how much money the company receives from Cinema chains
- be structured and present the calculation with clarity (ideally, in the form of a decision tree)


Operations Cost
Medium
Hard
ANALYSIS CALCULATION - MOVIE

TOTAL AUDIENCE (TA):
TA = [ (AudienceGood * %Good ) + (AudienceBad * %Bad) ] (M USD) ALTERNATIVE 1 ALTERNATIVE 2
TA NOLAN = [ (600M * 70%) + (400M * 30%)] = [ 420M + 120M ] = 540M Year 0 1 0 1
TA BAY = [ (400M * 80%) + (200M * 20%)] = [ 320M + 40M ] = 360M
Investment -150 0 -100 0
INCOME:
1ST YEAR (Year 0) Income 0 540 0 360
There is no income Cash Flow -150 540 -100 360
2ND YEAR (Year 1) NPV -150 450 -100 300
Income = Total Audience * Ticket Price * %Commission
Income NOLAN = 540M * 10 USD/t * 10% = 540M USD Accumulated NPV 300 200
Income BAY = 360M * 10 USD/t * 10% = 360M USD
INVESTMENT:
Each alternative has its own cost structure (See exhibit 2)
ALTENATIVE 1 ALTERNATIVE 2
GOOD BAD GOOD BAD ALTERNATIVE 1 ALTERNATIVE 2
Probability (%) 70% 30% 80% 20% Probability (%) 60% 40%
Audience (M) 600 400 400 200 NPV (M USD) 300 200
Contribution (M) 420 120 320 40 Contribution (M) 180 80
Average audience 540 360 Average NPV (M USD) 260 -


Operations Cost
Medium
Hard
EXHIBIT 1: MOVIES ALTERNATIVES

Alternative 1 Alternative 2
Target Audience Teenagers and Young Adults Kids and Teenagers
Probability (%) 60% 40%
Director Christopher Nolan 25M USD Michael Bay 10M USD
Main Actor Tom Hardy 50M USD Mark Walhberg 25M USD
Support Actor Michael Cain 25M USD Tyrese Gibson 5M USD
Others Production & Marketing 50M USD Production & Marketing 60M USD
Critics Critics
Good 70% chance of getting 600M audience 80% chance of getting 400M audience
Bad 30% chance of getting 400M audience 20% chance of getting 200M audience
Note: Filmmakers receive as income 10% of the ticket sales (10 USD/ticket);


Operations Cost
Medium
Hard
PROJECT ALTERNATIVES ANALYSIS - SERIES

The company already has the script for a potential Series, and in case of choosing this alternative, it will receive an upfront payment from the
Streaming company. Income will be based on the Audience per episode in the first year (Show Exhibit 2).
ANALYSIS TAKEWAYS - SERIES

In order to estimate the NPV of this alternative, the candidate should calculate the corresponding Cash Flows and request for a Discount Rate (20%).
The investment is made at the beginning of the project and incomes are received at the end of year 1 (Solution in the following slide)

- understand that the Script expense (10M USD) is a sunk cost and it should not be taken into consideration to make the decision
- be structured and present the calculation with clarity (ideally, in the form of a decision tree)
If the candidate realizes about the sunk cost, she/he will choose to produce a Series. If not, make him/her identify the mistake
NPV NPV (with sunk cost)
Movies 260 260
Series 270 260


Operations Cost
Medium
Hard
ANALYSIS CALCULATION - SERIES

TOTAL AUDIENCE (TA):
TA = [ (AudienceGood * %Good ) + (AudienceMedium * %Medium) + (AudienceBad * %Bad) ] * GOOD MEDIUM BAD
#Episodes
TA = [ (100M * 30%) + (70M * 40%) + (40M * 30%)] * 10 = [ 30M + 28M + 12M ] * 10 = 700 M Probability (%) 30% 40% 30%
INCOME:
Audience (M) 100 70 40
1ST YEAR (Year 0)
The income in the first year is the Upfront = 20M USD Contribution (M) 30 28 12
2ND YEAR (Year 1)
Income = Total Audience * Income per episode (PMV) = 700M * 600k USD = 420M USD
INVESTMENT:
If the company chooses this alternative, it should make an additional Investment of 100M USD
(The Script is a sunk cost)
(M USD) SERIES
Year 0 1
Investment --100 0
ADDITIONAL DATA INVESTMENT (USD)
Income 20 420
Upfront (M USD) 20 Cost (M USD) 100
Cash Flow --80 420
# episodes 10
Upfront income (M USD) 20 NPV --80 350
Income per episode
600,000 Investment (M USD) 80
(PMV) (USD) Accumulated NPV 270 -


Operations Cost
Medium
Hard
EXHIBIT 2: SERIES
EXPENSES ADDITIONAL DATA
Script (already bought) 10 Upfront income (M USD) 20
Actors 60 # episodes 10
Production 40 Income per episode (PMV) 600,000
AUDIENCE PER
AUDIENCE LEVEL PROBABILITY
EPISODE (M USD)
High 100 30%
Medium 70 40%
Bad 40 30%
PMV: per million views


Operations Cost
Medium
Hard
PROJECT ALTERNATIVES ANALYSIS – ADDITIONAL INFO

Would your decision change with this new information? (Show Exhibit 3)
TAKEWAYS – EXHBIT 3
Show the candidate Exhibit 3, which contains an additional cash flow for Michael Bay movie from merchandising and other incomes.
The candidate should identify the tendency in the cashflow (CAGR -10%) and calculate a perpetuity.
Adding those Cash Flows to Alternative 2 will affect the NPV.
As a result of this information, the final decision will change.
ALTERNATIVE 1 ALTERNATIVE 2
PERPETUITY
Probability (%) 60% 40%
Initial Cash Flow (M USD) 20
NPV (M USD) 300 266.6
Growth (%) -10%
Contribution (M) 180 107
Discount Rate (%) 20%
Average NPV (M US) 287 -
NPV (M US) 66.7


Operations Cost
Medium
Hard
EXHIBIT 3 – MOVIES ALTERNATIVE 2

Cash Flow (M USD)
20,00
20
18,00
16,20
15 14,58
13,12
11,81
10,63
10 9,57
8,61
7,75
5 4,58
2,70
1,60
0,00
0
0 1 2 3 4 5 6 7 8 9 10 15 20 25
Year


Operations Cost
Medium
Hard
PROJECT ALTERNATIVES ANALYSIS – OTHER FACTORS

Which other factor would you take into consideration?
EXPECTED CONSIDERATION
The candidate should quickly identify the uncertainty and our capability to assess it as the main risk.
Factors that can influence:
• Production is not finished on time and target launch is missed
• The launch of a good movie made by a competitor
• An economic crisis that affects the consumption
• Others
This question is to test the candidate’s business sense and creativity. There is room for the candidate to discuss other factors, including other
revenue streams and intangible factors, always justifying his/her answer.


Operations Cost
Medium
Hard
RECOMMENDATION
Great, our client is coming and will request a recommendation.
RECOMMENDATION – SUGGESTION
The candidate should be concise and structured, without mentioning topics that were not discussed.
It is important to highlight the uncertainty of the decision process and he/she should suggest potential ways to reduce it.

Pipeline Oil Technology
By Roberto Carlos De Araujo (IESE MBA 2021)
Oil & Gas Easy

Operations Medium
Pricing Hard

Oil & Gas Easy
Pipeline Oil Technology Operations

Pricing
Medium
Hard

Minerva’s University Fluids Research Lab What is the market? such as rail car, barge and truck.
has discovered a more efficient way to - Mexico. How is the demand for crude oil?
transport crude petroleum oil inside How big is the market? - NOC sells all the crude oil it buys. See Exhibit 2 for the next
pipelines. This new technology can be - 4,800 km of pipeline. years’ forecast.
used in midstream applications where Who are the competitors and market share? Can NOC build more pipelines to substitute other means of
the oil is acquired from the extraction - National Oil Company (NOC) is the only player. However, the transportation?
plant and delivered to the refinery plant. market is open for the last two years. - Yes, it is an alternative. However, there are costs involved. See
The university invested $ 1,200M in this Which are the potential buyers? “4. Given Data - Alternative: Expand Pipeline Network”
project during the last 12 years. - Primarily, NOC. However, the other two prospects are How long does it take to implement this technology?
interested in entering the market. - Minerva’s University estimates that the technology would be
The new technology mixes water and oil Does the University have a patent? How long does it last? running in 100% of the pipelines in one year at $2,000 M
under certain conditions to reduce the - The University has already filed for a patent, which lasts for installation cost.
loss of energy, caused by the friction 20 years.
between the oil and the pipeline surface What is NOC pipelines current capacity?
while being transported. As a result, the - Full capacity. Surplus is transported by more expensive means
CASE GUIDANCE
transport between two given points gets
15% faster and the useful lifetime of the
pipelines increases by 20%.
Crude oil Value chain Midstream Business Model
Minerva’s University asked our help to Downstream: 1) Buy from the extractors (*)
determine the value at which they - Exploration - Extraction 2) Transport crude oil from the extractor to the refinery
should sell the technology. Midstream: 3) Sell to the refineries at $10 per barrel
- Transportation
Upstream: (*) Assume that Cost of transportation already
- Refinery - Marketing/Sales incorporates the buying price from the extractors.

Oil & Gas Easy

Pricing
Medium
Hard

Identify the main drivers of the pricing and evaluate the results by comparing to other investments.
A) PRICING:
Value = (1) Savings Costs of transportation + (2) Savings Cost of replacing pipelines – (3) Cost to implement
(1) Savings in Cost of transportation

- Increase in flow speed leads to increase in the pipeline’s delivery capacity
- Save costs of sales by switching from other means of transportation to pipelines
(2) Savings in Cost of replacing pipelines

- Save Costs by using the pipelines for longer, reducing the replacement
(3) Cost of installation

- $2,000 M
B) COMPARISON: Compare the value of the technology to other investments to validate the final pricing
(4) Research Investment (by Minerva’s University):

- $1,200 M (spent in the last 12 years by Minerva’s University)
(5) Alternative investment (for National Oil Company):

- Investment to expand the pipeline network from 2 M to 2.5 M barrels per day

Oil & Gas Easy

Pricing
Medium
Hard
REVENUE ANALYSIS DEMAND ANALYSIS

Hand over Exhibit 1 if the candidate asks for revenues Hand over Exhibit 2 if the candidate asks about the demand
and/or costs breakdown for the next years
PRICING CALCULATION
(1) Savings in cost of transportations (SCOT):
SCOT = (I) Sales for 20 years * (II) Savings in switching transportation = $162,000 M * 0.035 = $5,670 M ~ $6,000 M in 20 years (or $300 M / year)
(I) Sales for 20 years = Chart area (trapezoid) * 360 days * price per barrel: = [(2+2.5) * (20) x (1/2)] * 360 * 10 = $162,000 M
(II) Savings in switching transportation = % increase pipeline use * proportional savings = 10% * 0.35 = 0.035
Switching from truck (5%) and rail (5%) to pipeline: % increase pipeline use = 15% * 70% = 10.5% ~ 10%
Proportional Savings:= [% truck * (cost truck – cost pipeline) + % rail * (cost rail – cost pipeline)] = 5% * ($6 - $2) + 5% * ($5 - $2) = 0.35
TIP: ROUND OFF NUMBERS

Suggest the candidate to round off numbers to facilitate easier calculations. Some suggestions are underlined in the case. Nonetheless, strong candidates figure out these
opportunities by themselves.

Oil & Gas Easy

Pricing
Medium
Hard
EXHIBIT 1
Income Statement
+ Sales $7,200 M
- Cost of transportation (*) $1,980 M
- Cost of replacing pipelines $1,000 M
- Other operating costs (**) $3,500 M Table 1: Income statement for Year 0,
assuming sales of 2M barrels per day.
Operating profit $720 M
Means Cost Barrels
Pipeline $2 per barrel 70%
Truck $6 per barrel 5%
Barge $3 per barrel 10% Table 2: Cost of Sales breakdown

per means of transportation
Rail $5 per barrel 15%
(*) Cost of transportation already includes the buying price from the extractors.
(**) Assume that Other Operating Costs do not change over the years.

Oil & Gas Easy

Pricing
Medium
Hard
EXHIBIT 2
Crude oil demand forecast
(*) Demand in millions

2,5
2
Barrels per day
1,5
1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year
(*) In a given year, assume that the demand per day is the same for all the 360 days.

Oil & Gas Easy

Pricing
Medium
Hard
PRICING CALCULATION GIVEN DATA:

(2) Savings in Cost of replacing pipelines (SCRP): - Cost of replacing pipelines: $1,000M per year
= Cost of replacing pipelines per year * 20 years * (1 - new lifetime/current lifetime) - Lifetime of regular pipeline: 5 years
= $1,000M * 20 * [1 - 4/5 years] = $4,000M in 20 years (or $200M per year)
ALTERNATIVE ANALYSIS GIVEN DATA:

Expand network pipeline - Additional capacity: 50,000 barrels per day
Investment to expand the pipeline network: - Time to implement: 2 years
= (Additional capacity in 20 years / Additional Capacity) * cost to implement - Cost per additional capacity = $ 700 M
= (2.5 M – 2M) / 0.05 M * $700 M = $7,000 M

Oil & Gas Easy

Pricing
Medium
Hard
COMPARISON ANALYSIS
PRICING $8,000 M INVESTMENTS
(+) Savings in Cost of transportation $6,000 M (-) Research Investment

(University) $1,200 M
(+) Savings in Cost of replacing
$4,000 M
pipelines (-) Alternative investment
(National Oil Company) $7,000 M
(-) Cost of installation $2,000 M
NEGOTIATION
The University can recover its investment by selling the technology for any price over $1,200 M. Given the estimated savings and cost of installation, NOC will pay less
than $ 8,000 M to guarantee profits/savings.
Alternatively, NOC can construct its own pipeline network for a total investment of $7,000 M. Then, it is better to buy the technology for $ 7,000 or less than to go forth
with this alternative investment. Note that the alternative investment is limited by additional 50,000 barrels/day capacity in two years, while the new technology can be
put in operation in just one year.
Therefore, a reasonable price for selling this technology would be between $1,200 M and $7,000 M.

Oil & Gas Easy

Pricing
Medium
Hard
RECOMMENDATION
What would be your final recommendation to Minerva’s University?
The general recommendation is open. One of the possibilities is to sell the new technology for a price of $1,500 M plus a 30% participation in the additional revenue while
the University holds the patent (40% of $10,000M = $3,000M in 20 years, disregarding cost of installation). There are three reasons that support this proposal:
1) Cost savings by increasing the volume of crude oil transported in pipelines. According to the calculations, $300 M per year (around 40% of the current Operating
Profits)
2) The improvement in the pipeline lifetime is also relevant accounting for $200 M per year (around 25% to 30% of the current Operating Profits)
3) The alternative of expanding the pipeline network is a higher investment than the cost savings generated by the new technology. Besides that, expanding the
pipelines is limited by additional 50,000 barrels/day in two years, while the new technology can be put in operation in just one year.
A great candidate would also briefly discuss any risks or next steps:
Next steps:
- Verify calculations with NOC’s calculations/data to validate
Main risks / sensitive assumptions:
the assumptions
- Delay in installation of the new technology
- Define a negotiation strategy based on the
- Limitation in reaching some regions, since it can be done only by a specific means of transportation
calculations/assumptions
- High investment ($2,000M). Options: cash surplus, bank loan, increase in equity
- If the negotiation fails, look for other prospective buyers
- Crude oil price fluctuation -> Use future contracts to guarantee buying and selling prices
- Demand fluctuations because of crisis or other external factor

The Bookstore
By Víctor Manzanares Bonilla (IESE MBA 2021)
Retail Easy
E-commerce Medium
Market Entry Hard

Retail Easy
The Bookstore E-commerce

Market Entry
Medium
Hard

Our client, Classic Bookstore (CB), is a • CB only sells to customers through physical stores, no online business is available.
traditional bookstore chain in Spain, • CB has stores in the largest cities in Spain.
specialized in non-technical books. CB’s • CB has 3 types of customers: AVID READERS (2 books/month), OCCASIONAL READERS (1 book/2 months)
and RARE READERS (1 book/6 months).
revenue has stagnated for the past 3
years, with a stable and loyal customer • Non-technical physical book market in Spain has been stagnated for the past 3 years.
base. Now, as part of its new growth • CB has reached an agreement with an e-Reader manufacturer in China. Total cost per device would be 60€.
These devices can only support the e-books sold on CB’s new website.
strategy, CB is considering whether to
• CB has no specific growth rate in mind and are open to suggestions from us.
enter the electronic books market.
The client is considering to sell a CB

branded reading device and develop a
website to sell e-books for it. CASE GUIDANCE
This is a case designed to be led by the candidate. Start by reading the case question and let the candidate
Our client asked us to analyze this drive the analysis. Do not provide any information until it is asked.
opportunity and provide a
recommendation. This case primarily tests the understanding of market entry and its implications on the current business model.
For simplicity, taxes and value of money over time have been ignored in this case, although excellent
candidates should mention them during the case.

Retail Easy

Market Entry
Medium
Hard

Candidate’s structure should cover the following key aspects of the problem.
MARKET OPPORTUNITY: What is the market size of generic e-books in Spain? What is this market’s growth?
POTENTIAL SHARE: What would be our market share? How many competitors are we facing in this market?
POTENTIAL PROFIT: What is the potential profit of this new market? Expected revenues vs expected costs? What investment is required to enter
in this new market? What is the expected return on investment of our client? Payback period?
CAPABILITIES & RISKS: Does this new market align with our client’s strategy and capabilities? Do they have the know-how required? Have they got
the financial capabilities to undertake this investment? What is the potential cannibalization of this new business model with the current one?
The analysis should be led by the candidate, starting for the market size. When the candidate requests information about the market and size,
ask him to estimate the size of the non-technical books in Spain, both in paper and e-books.

Retail Easy

Market Entry
Medium
Hard
INTERVIEWER GUIDANCE – MARKET SIZING

(Suggested approach) Total books: 24 + 30 + 30 = 84M books
1. Population of Spain: 45M 5. Percentage of paper books and e-books and average prices:
PAPER BOOKS (93% of books): 78M books x 15€/book = 1,170M€
2. Target population that reads: We assume people from 15 to 80 E-BOOKS (7% of books): 6M books x 8€/book = 48M€
years old.
Population 0 – 20 (25%): 11.25M (Population 15-20: 11.25/4=2.8M) TOTAL MARKET: 1,170 + 48 = 1,220M €
Population 21 - 40 (25%): 11.25M
Population 41 – 60 (25%): 11.25M
Population 61 – 80 (25%): 11.25M
Total target population = 2.8 + 11.25 + 11.25 + 11.25 = 36.5 M
3. Percentage of population that buys books: We assume 60% of

people between 15 and 80.
Total target population = 36.5M x 0.60 = 22M people
4. Type of readers: We assume the following categories and quantities

Avid Readers: 12 books/year x 2M readers = 24M books/year
Occasional Readers: 6 books/year x 5M readers = 30M books/year
Rare Readers: 2 books/year x 15M readers = 30M books/year

Retail Easy

Market Entry
Medium
Hard
PROFITABILITY ANALYSIS – GIVEN DATA

In the next step, the candidate should focus on profitability. Hand Exhibit 1 for this part and provide the following information if requested:
REVENUE COSTS
• Market Annual Growth: 5% • Webpage Investment: 150,000€
• Expected Market Share: 1% • General Expenses website: 50,000€
• Paper book Gross Margin: 33% • Cannibalization: Candidate needs to calculate the number of users that will
switch from paper to e-reader with Exhibits 1 & 3
• E-book Gross Margin: 40%
• E-reader price: To be determined by the candidate with

Exhibit 2. Price range should be between 60 and 100€
to compete against Kindle.
• No customers change from paper to e-book after year 1.

New readers are coming from new customers.

Retail Easy

Market Entry
Medium
Hard
PROFITABILITY CALCULATION
YEAR 1 2 3 4 5
Market Size 48M € 50.4M € 52.92M € 55.6M € 58.38M €
Revenue e-books 480,000 € 504,000 € 530,000 € 560,000 € 584,000 €
Gross Margin 190,000 € 201,600 € 212,000 € 224,000 € 232,000 €
Profit from e-readers 120,000 € * 3,000 € ** 3,250 € 3,750 € 3,000 €
Webpage investment - 150,000 € - - - -
General Expenses -50,000 € -50,000 € -50,000 € -50,000 € -50,000 €
-90,000 € (50,000
Cannibalization -90,000 € -90,000 € -90,000 € -90,000 €
books x -1.8€)
TOTAL PROFIT 20,000 € 64,600 € 75,250 € 87,750 € 95,000 €
(*) This calculation has taken into account a gross margin of 10€ per e-reader. Candidate will have to pick the price in each case. 12,000 readers are sold the first year, 11,000 to
customers switching from paper to e-book and 1,000 to new customers.
(**) No customers switch from paper to e-book after 1st year. New readers are sold to new customers acquired by market growth.

Retail Easy

Market Entry
Medium
Hard
EXHIBIT 1: NON-TECHNICAL BOOKS MARKET IN SPAIN

PAPER BOOKS MARKET IN SPAIN E-BOOKS MARKET IN SPAIN
Subscription Google
Competitor Chain
Others Apple
7% 10% 5%
Telephone 5% 9%
CB 2%
2%
Specialized Store Others
20% 11%
28%
Department Stores
75%
27% Amazon
Internet
Market Size: 1,170M€ Market Size: 48M€
Annual Growth = 0% Annual Growth = 5%
Average price per book: 15€ Average price per e-book: 8€
Average consumption per reader: 10 e-books/year

Retail Easy

Market Entry
Medium
Hard
EXHIBIT 2: ELECTRONIC READERS

Amazon Kindle
CB e-Reader Sony e-Reader Amazon Kindle
PRO
Price TBD 120€ 100€ 150€
Cost 60€ - - -
Formats accepted CB All formats All formats All formats
Storage Up to 1,000 Up to 1,500 Up to 750 books Up to 2,000
books books books
Extra Features Medium Medium Low High

Retail Easy

Market Entry
Medium
Hard
EXHIBIT 3: CB’S CUSTOMERS INFORMATION

What do you value the most about CB?
50%
TOTAL CUSTOMERS: 390,000
Avid Readers 22%

18%
13% 10%
Customer Quality of Variety of Promotions

Occasional Service products stock
18% Readers
Would you consider switching to an electronic reader?
96% 97% 97.4%
69%
Rare Readers No
Yes
4% 3% 2.6%
Avid Occasional Rare
Readers Readers Readers

Retail Easy

Market Entry
Medium
Hard
BRAINSTORMING 1 BRAINSTORMING 2
How would you launch this product? What other measure could our client implement in order to
increase revenues?
EXPECTED EXPECTED
BRAINSTORMING 1 BRAINSTORMING 2
In this question, the analysis should be carried out by focusing on the following In this question, the candidate should come up with additional measures to
main aspects: increase the current revenue streams. This measures should include:
• Segmentation: What users are we targeting? What could be our main target • Increase number of products. Maybe including technical books in our
considering the company’s strategy and client base? offer could increase the number of customers.
• Product: How can we highlight the strong aspects of our product? What do • Creation of a loyalty scheme to try to increase average spending per
the customers want and how can we meet their demands? customer.
• Price: Although the price has been set before, additional measures can be • Creation a referral program to increase our customer base.
explored, such as promotions, free gifts to great customers, etc. • Negotiate with e-reader supplier to include additional features.
• Promotion: How should this product be marketed? What promotions
should be used?
• Place: Through which channels should this reader be sold?

Retail Easy

Market Entry
Medium
Hard
RECOMMENDATION
What is your final recommendation for Classic Bookstore?
• The candidate should recommend to enter in this new market of electronic readers and e-books.
• Based on our calculations and projections, our client should expect a return of 342,600€ over 5 years from an initial investment of 150,000€.
• RISKS: 1) Calculations have been based on projections of market share and a survey given by the client. Any deviation from this data could affect the profitability of
the investment. 2) Similar book chains to CB could enter this market and reduce our client’s potential market share. 3) Cannibalization with our client’s current
business model could damage the company’s results and image.
• POTENTIAL NEXT STEPS: These risks could be mitigated by producing a deeper market analysis and carrying out further surveys among customers to have a more
accurate prediction of the market behavior. Different programs could be explored to increase customer loyalty and new customers acquisition.
Excellent candidate:
• A candidate who points out that taxes and time value of money have not been considered during the profitability analysis and this would reduce the profitability of
the investment.
• A candidate who mentions the lack of experience and knowledge of our client in this new business as part of the risks. This could lead to a reduction in customer
service, which is very valued by our CB’s clients.

Gymco
By Pieter Swart (IESE MBA 2021)
Sports Easy
Wellbeing Medium
Growth Strategy Hard

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard

Your client is an international chain of • There are 2 major gym chains, GymCo has 60% market share, FitnessCo has
fitness centers, operating in Sub- 30%, and a few small chains the remaining 10%
Saharan Africa, Europe and Southeast • GymCo members pay a monthly membership fee of ~ZAR700 pm
Asia
• Market trends are in favour of gyms – consumers are switching to have more
healthy habits
GymCo missed its 2013 growth target
of ZAR600M • There are a few smaller competitors that have recently entered the market –
these are smaller gyms offering more classes, with less focus on free weights
and cardio sections
The CEO would like you to
investigate what is going on • No other competitors have noticed any decline in revenues; in fact, they have
had strong increases over the past 12 months

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard

Structure example
Existing members
# Members
Churn
Revenue New members
Signing discount
Revenue per member
Initial quoted price per

month

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard
REVENUE AND/OR VOLUME ANALYSIS

Hand over Exhibit 1 if the interviewee asks for revenues and/or members volume
EXPECTED TAKEWAYS FROM EXHIBIT

• # members is increasing, but revenue is not increasing by the same rate – therefore revenue per member must be decreasing
• I see that churn and # of new members jump up as revenue starts declining (early 2013), did a lot of people leave and rejoin for some reason? I’d like to explore that
more
• The overall takeaway is that it seems that we offered some sort of discount package that caused more people to join / rejoin
FURTHER INFO FOR CANDIDATE (if asked)

• Yes, indeed – GymCo partnered with a big health insurer (HealthCo) in 2012, where they would offer 40% off to HealthCo members – the intention was to increase sign-
ups (Normal price ZAR700 pm, HealthCo price ZAR400 pm)
• However, during 2013, GymCo management started noticing that some members were leaving the gym, switching healthcare providers to HealthCo, and rejoining at
the new discounted rate; the estimation is that 50% of people who left the gym during 2013, rejoined at the lower rate
• Effectively, GymCo was now making less revenue from its existing members, and only some new revenue from new sign-ups

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard
EXHIBIT 1: REVENUE AND #MEMBERS OVER TIME

#Members (’000) Revenue (ZAR M)
500 489 1.000

454 466 478 455 459 463 468
472 476
442 441 445 450
417 430 426 431 436
404
400
364 378 391 800
350
300 600
200 400
100 200
0 0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012 2013
# new members (‘000) – 30 30 30 30 30 30 30 30 30 30 30 205 30 30 30 30 30 30 30 30 30 30 30 30
end of month
Churn rate (at end of 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 30% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

month)

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard
ASSESSMENT OF CONTRACT ANALYSIS

The GymCo CEO wants to know the real financial impact of the contract – has it been beneficial? If not, how much has GymCo lost as a result?
EXPECTED CONSIDERATION
Use this to prompt candidate and frame calculation
In order to assess the decision, we need to consider the incremental revenues from the contract
Additional revenues:
• # Brand new members who joined because of the discount, and would not have joined without the discount
Foregone revenues:
• # of existing members who switched to the HealthCo discount (i.e. who would have paid R700, but now only pay R400)
• # of new members who joined on HealthCo discount who would have joined at full price irrespective of the discount
Provide Exhibit 2 when the candidate points out the above considerations. If they do not explain the above, explain it to them and then provide them with Exhibit 2

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard
EXHIBIT 2 CALCULATION INFO

• Normal members pay ZAR700 pm, HealthCo Discount
2013 figures - All figures in ‘000 2013 members pay ZAR400 pm
# Normal members at start of year 699 • At the start of 2013, 200K normal members left and rejoined
with HealthCo discount (i.e. they would be willing to pay the
# Normal members joining during year 60 full price, but rejoined to get the R400 discount)
# Normal members leaving during year 313 • Of the brand new sign-ups, 30% would have joined GymCo at
full price anyway (irrespective of the discount, i.e. they
# Normal members at end of year 446 would have paid ZAR700pm instead of the discounted
ZAR400pm)
# HealthCo Discount members at start of year 0
# New HealthCo discount members during year 475
# HealthCo discount members leaving during year 66
# HealthCo Discount members at end of year 409

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard
CALCULATION
How much revenue is GymCo foregoing from existing members that are switching providers?
We need to segment the # of new HealthCo members into three groups –

• Group 1: those that were existing members who rejoined,
• Group 2: Those who would have joined anyway, regardless of discount
• Group 3: Those that are completely new members, joining as a result of discount
Group 1: # Existing members who rejoined = 200K;

• lost revenue = 200K (700-400) pm *12 months (since they all rejoined at the start of the year) = ZAR720M revenue foregone
Group 2: # of HealthCo members who would have joined GymCo irrespective of the HealthCo deal = 475K – 200K (existing GymCo members) = 275K * 30% = 82.5K
• Revenue foregone on these members who would have joined anyway = 82.5K * (700-400) * 6 months (average duration, assuming joining throughout the year) =
ZAR297M revenue foregone
Group 3: # of members acquired as a result of HealthCo deal = 475K – 200K (existing GymCo members) – 82.5K = 192.5K new members
• Additional revenue = 192.5 * ZAR400 per month (HealthCo rate) * 6 months (average duration, assuming joining throughout the year) = ZAR462M
Therefore additional revenue of ZAR 462M minus foregone revenue of ZAR1017M (297M + 720M) = net negative effect of 555M
The contract is very detrimental to GymCo
Expected Insight:
Furthermore, the impact in 2013 seems to have been even greater, and this new contract with HealthCo is putting a strain on GymCo’s business model – too much
reliance on HealthCo for new members, unable to get new members organically
Therefore, GymCo should try and renegotiate or cancel the contract

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard
WHAT SHOULD GYMCO DO?

What are the options available to GymCo with regards to the contract?
EXAMPLE RESPONSE
GymCo has a few options available:
• Get out of the deal with HealthCo
• Reduce the discount that HealthCo is giving members
• Change policies to prevent members from rejoining for a certain time period (e.g. 12 months) if they have left the gym
Option Benefits Drawbacks

Get out of the deal No loss in revenue due to no more switching • Potential loss in future # of clients
• What to do about existing discounted members? If we charge full
price, they might leave
Reduce discount Discourage switching • Likely reduced # of new members
Still incentive for brand new members to join • What to do about existing discounted members? If we change
their price, they might leave
Change policy No impact on # of new sign-ups • Long-term, perverse incentive still exists
Change to limited offer (i.e. discount only lasts Likely to get the same number of new sign- • Discounted clients might leave at the end of the discounted
for the first 6 months) ups period

Sports Easy
Gymco Wellbeing
Growth Strategy
Medium
Hard
RECOMMENDATION
The CEO wants to meet with us in a few minutes to discuss our findings as well as the way forward – what will you tell him?
• GymCo is currently in a very onerous contract with HealthCo, and it should cancel it. The contract was having a negative impact of ZAR555M
per annum
• Furthermore, this contract places too much reliance on and gives too much power to HealthCo
• GymCo should find a way to get new members organically, while retaining existing HealthCo members
• Offering discounts for yearly subscriptions
• Marketing ideas
• Offering competing classes (to compete with the smaller gyms)
• Promotions on new members (bags / towels etc.)
• In order to decide on the best strategy, I would like to quantify the above options (cost vs. benefit)

Green Airlines
By Antonio Niemeyer (IESE MBA 2021)
Airlines Easy
Investment Decision Hard

Airlines Easy
Green Airlines Growth Strategy

Investment Decision
Medium
Hard

Due to the recent bankruptcy of a major • An airport slot is a permission granted by the owner of an airport, which allows the grantee to
airline, the aviation authority of Brazil recently schedule a landing or departure at that airport during a specific time period
• Green airlines currently does not operate in the airport that is being discussed
opened an auction for landing and takeoff
• Green airlines currently only flies regional flights and has no plans to include international flights in its
slots in one of the country’s biggest airports. offerings
A slot is the right to land and depart from an • Green airlines currently does not have the necessary planes to operate the slot. Management will
airport during a given time period. need to lease 5 airplanes to operate the 10 slots
• The $100M that Green Airlines would have to pay is a one-off payment, due before operations start
Green Airlines, a small, regional airline • The main objective of the owner/CEO is financial gain
• Green Airlines can sell the slots, but only after five years of operation
operating in the North part of the country,
• If Green Airlines does not buy the slots, they will be sold to another airline
was offered 10 slots, for the total price of
$100M. If Green accepts to buy the slots, it
will have to operate them for at least 5 years.
The owner and CEO of Green Airlines
approached your firm looking for an
CASE GUIDANCE
In this case, the candidate will need to lead through directive questioning. Although the answer may
advice on whether they should buy the seem straightforward, the case will force the candidate to analyze the problem from different
slots or not. perspectives; it will demand not only math and problem-solving skills, but also, creativity.
A strong candidate will quickly realize that in order to answer the questions of Green Airlines' CEO,
it will be necessary to understand the strategic fit and the financial implications of buying the slots.
After realizing that it does not make sense to buy the slots to operate them, the candidate should
explore alternative way to explore the opportunity that has emerged.

Airlines Easy

Investment Decision
Medium
Hard

The candidate should realize that this is an opportunity for Green Airlines to expand its business into one of the country’s main airport.
Suggested items-to-consider are:
Market - What’s the trend for the demand of flights in the airport’s region? What’s the profile of travelers (business or leisure)? Are the other airlines going through
financial difficulties? Is the industry suffering in general or was the bankruptcy a one-off event?
Competition - How many companies operate at this airport? Are the slots currently concentrated in the hands of a few companies or are they split among several
companies? Do Low Cost Carriers operate in the airport? What’s competitor’s price?
Revenues/Costs - What’s the expected number of passengers per day per slot (plane size, load factor, flights/day)? What’s the expected price per passenger? What are the
fixed costs? What are the variable costs?
Internal Capabilities - Does Green Airlines have the operational capabilities necessary to operate the slots (planes, overhead, sales system, suppliers)? Does operating in a
big airport demand a different strategy than operating small, regional airports? Does Green Airlines have the financial capabilities necessary to pay for the slots? If not, what
are its options?
Risks/Alternatives - Cultural issues of setting up operations in a different area. Are there other regions that might be more attractive?

Airlines Easy

Investment Decision
Medium
Hard
INTERVIEWER GUIDANCE – PART 1

If the candidate raises concerns related to competition, operational challenges or the aviation market in Brazil, hand Exhibit 1 (next page) to clarify these points.
KEY TAKEWAYS – EXHIBIT 1

• The candidate should notice that Green Airlines operates in a very distinct region of Brazil and is much smaller than the main players of the Sao Paulo region
• Buying the 5 planes would mean almost doubling Green Airlines fleet, and represents a significant strategic shift
• Airlines A and C are big players located in Sao Paulo, and they currently operate planes bigger than the other airlines, however, the price per ticket is lower (this may be
due to shorter flights and high competition)
• The average load factor in Sao Paulo is significantly higher than the average for Green Airlines
• If Green Airlines were to buy the slots, it would most likely need to have bigger planes and keep prices low

Airlines Easy

Investment Decision
Medium
Hard
EXHIBIT 1
Green
Current Operations Airlines A Airlines B Airlines C
Airlines
City Hub São Paulo Santa Catarina São Paulo Pará
G Total # of planes 100 80 70 6
Avg plane size (# seats) 300 200 300 100
Avg Load Factor (%) 80% 70% 80% 60%
Avg Ticket Price ($) 200 250 200 300
Airport selling slots
A Airlines A Main Hub
A B Airlines B Main Hub
B C C Airlines C Main Hub
G Green Airlines Main Hub

Airlines Easy

Investment Decision
Medium
Hard
REVENUE ANALYSIS
First step is to estimate the potential revenues of the slot operation. Ask the candidate what factors s/he would use to estimate the revenues. When asked, provide the
following information in the table:
Revenues – For operation of 10 slots
# of planes 5
REVENUE CALCULATION
Revenue per month = # of planes * # flights/plane * # seats * load factor * ticket price
flights / plane / month 50 flights
= 5 * 50 * 250 * 80% * 200 = 50,000 passengers * $200/passenger
Seats / plane 250 seats = $10 million/month
Average Load Factor (%) 80%
Average Ticket Price $ 200

Airlines Easy

Investment Decision
Medium
Hard
COST ANALYSIS
Second, the candidate should estimate the costs of operating the slots. Ask her/him what s/he believes to be the main costs of an airline (fuel, crew, maintenance,
insurance, leasing, fees, overhead, etc.). After discussing the main lines of cost, provide the following information in the table:
Costs – for operation of 10 slots

COST CALCULATION
Initial Investment $5M (to set up Fuel: $14k * 50 * 5 = $ 3,5M/month Expected Insight:
operations) Other Variable Costs: $4k * 50 * 5 = $ 1,0M/month The candidate should realize that
the expected operational result is
Fuel $14k per flight Salaries: $ 1,5M/month
-$5M in Year 1, and zero in the
Maintenance & Leasing: $400k * 5 = $ 2,0M/month following years for the 10 slots on
Other Variable Costs $4k per flight Insurance, Fees & Others: $ 2,0M/month sale.
Total Cost: $10M/month

Salaries $1,5M per month
Maintenance & Leasing $400k per Expected Profit:

plane/month
Year 1: -$5M + $120M - $120M = -$5M
Insurance, Fees & Others $2M per month Following years: $120M - $120M = $0

Airlines Easy

Investment Decision
Medium
Hard
ALTERNATIVE ANALYSIS
After concluding that the operating profit would be zero for the slots, ask the candidate what additional analyses s/he would make in order to decide whether to buy the
slot or not.
POTENTIAL ALTERNATIVES
The candidate should come up with potential alternatives:
Improve operational metrics
• Possibility to increase revenues (increase ticket price, include non-ticket revenues, offer packages, shuttle services, etc.)
• Possibility to reduce costs (use bigger planes to reduce fixed costs, negotiate lease terms, exclude food inflight, automatization of processes, change fuel supplier, etc.)
Buy slots and sell to other company
• Airlines A and Airlines C have their Hubs in Sao Paulo. The slots are probably worth a lot for them.
• How much is the market value of a Slot?

Airlines Easy

Investment Decision
Medium
Hard

After discussing the potential alternatives, state that management has already explored all alternative ways to improve the operational result, and the numbers
presented are already considering all operational improvements possible.
EXPECTED TAKEWAYS
If the candidate does not reach this solution by herself/himself, say that the slots are very valuable for the big airlines operating in the region.
The big airlines have operational advantages related to scale. They operate bigger planes (300 seats) than Green Airlines, so their potential revenues are higher (all other
assumptions remain the same, including costs).
Ask the candidate to calculate the value of the 10 slots for the big airlines, considering planes with 300 seats.
Expected Calculation:
New Revenue per month = 5 * 50 * 300 * 80% * 200 = $12M/month

New Monthly profit = $2 million/month
= $24 million/year

Airlines Easy

Investment Decision
Medium
Hard

Now that we know the operational results for a big company utilizing these 10 slots, ask the candidate to estimate the value of the slot for a big company such as Airlines
A. Provide the following information if requested
Discount Rate
Valuation of Slots
10% per year

CALCULATION
Expected calculation (assuming the Net Profit as a perpetuity):
Right to use perpetual
Value of slots = $24M / 10% = $240M
Expected Insight:
The candidate should identify that the 10 slots have a total value of approx. $ 240M for the big
airlines, and that the best choice is to buy the slots, operate them for 5 years at zero profit, and sell
them to a big airlines for a value between $105M and $240M.
RECOMMENDATION SAMPLE RECOMMENDATION

Ask the candidate her/his final recommendation The recommendation should be that Green Airlines buy the 10 slots, operate them for the
mandatory 5 years and then sell them at a potential profit of approx. $135M

SPECIAL THANKS
IESE CONSULTING CLUB CASE BOOK COMMITTEE BCG DIRECT SUPPORT AND JUDGES
Miguel Cano Garine Arabian Enrique González
miguel.canodlc@iese.net garine.arabian@iese.net Udit Pandey
Xavier Pérez Anjori Jain Nada Ngaotheppitak
xavier.perezoller@iese.net Anjori.jain@iese.net
Anita Sharma Gaurav Rohatgi
anita.sharma@iese.net gaurav.rohatgi@iese.net
Daran Lima Aitor Benavente
daran.lima@iese.net aitor.benavente@iese.net

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I E S E C O N S U L T I N G C L U B

IESE CONSULTING CLUB IESE CASE BOOK 2021 |

❖ BCG CASE COMPETITION FINALISTS (2nd EDITION)

❖ PREVIOUS CASEBOOK CASES

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 2

General Management Consulting Internal Consulting

Capability Specific Consulting Firms Industry Specific Consulting Firms

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 3

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 4

What do the firms look for?

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 5

Listening and Synthesizing

Synthesizing and communication

Common Types of Cases:

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 6

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 7

Documents Fit interview preparation: 20 – 30 hours

Many are under prepared – start now!

Research and Networking Case Prep: 40+ hours

Tips: Mocks (some might take more, Drills:

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 8

❖ BCG CASE COMPETITION FINALISTS (2nd EDITION)

❖ PREVIOUS CASEBOOK CASES

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 9

Energy & Manufacturing 10%

Consumer Goods and Retail 8%

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 10

Financial Services 22%

23% 23% 21% 18% 14% 1%

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 11

Consulting 93,294 21,947 1,52,990 64,220 8,683 2,18,326

Finance 85,167 45,000 1,32,319 66,740 3,496 1,57,964

Industry 81,327 31,011 1,46,315 38,675 1,600 1,45,960

Technology 78,484 26,000 1,20,538 37,287 5,266 1,12,193

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 12

❖ BCG CASE COMPETITION FINALISTS (2nd EDITION)

❖ PREVIOUS CASEBOOK CASES

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 13

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 14

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 15

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 16

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 17

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 18

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 19

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 20

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 21

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 22

❖ BCG CASE COMPETITION FINALISTS (2nd EDITION)

❖ PREVIOUS CASEBOOK CASES

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 23

McKinsey, Bain, BCG Strategy&, Monitor

Submit one application with

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 24

Background: Finance in Atlanta, United States Background: Engineering in Spain

McKinsey Bain BCG McKinsey Bain BCG

Atlanta (20%) Atlanta (20%)

McKinsey Bain BCG McKinsey Bain BCG

IESE CONSULTING CLUB IESE CASE BOOK 2021 | 25

Background: Finance in New Delhi

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