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The case interview is a type of interview used by management consulting where the interviewers work with the candidates to solve business problems. The interview questions may vary from addressing organization profitability issues, analyzing the possibility of a merger and acquisition (M&A), and evaluating a new market entry. Case interviews do not emphasize the result but the problem-solving process, including clarifying and defining the problem, business judgment, decomposing the situation with the MECE (Mutual Exclusivity and Collective Exhaustion) method, and structuring the case to find the root causes. We can learn and practice our business skills by studying these interview questions. Let's look at some examples. Example 1: Profitability Case A restaurant called Pizza Hut has had a falling profit recently. How can you help? This is a profitability case. To solve this type of case [1] [3], we need to start with the profit=revenue-cost formula and analyze the company's revenue and cost. Breaking down the issue into revenue and cost is the MECE approach (Mutually exclusive and collectively exhausted). The analysis is followed by creating a hypothesis-driven issue tree. Because the question asks about a failing profit, the problem must either be a revenue drop or cost increases.
The solution presentation can start with explaining the problem and the root causes and end with providing the solution and a risk management strategy. Example 2: Operation Case - HR Cost Reduction An HR department needs to reduce its cost. How can you help? (HR - Cost Reduction) Cost reduction requires starting with listing all the costs, where the cost can be divided into fixed or variable costs. Fix vs. variable costs are related to if the cost is relevant to the number of people in the department. Fix costs can be training costs, law department, and recruiting costs. The variable cost can be labor costs, including salary, bonus, and benefits. The labor cost saving means lowering the headcount by examining the manager and employee ratio [6]. Example 3: ROI Investment Assessment Is building a new train construction investment from the airport to downtown worthwhile with grater than 15% profit? (ROI) The ROI cases [4] require assessing the investment and returns. The central part is the return which is the project's profit, that is, revenue minus cost.
Example 4: (Operation - Cost Reduction) An IT department is looking at reducing the cost with contractors. How can you help? We would check the project and nonproject costs for contractor cost reduction.
We can practice case interviews to improve business analysis skills and the ability to make sound business judgments. Resources
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