Excel in the case interview
Case interview preparation
To help candidates prepare for the case study interview, we introduce two example cases that have previously been used in our recruitment interviews.
Our first case, "Scandinavian Sandwiches", is a typical first round case that is used to assess the candidate's ability to identify key parameters for market sizing, quantify information based on given assumptions, and form hypotheses based on financial data.
Our second case, "Ferris Wheel", is a more advanced investment calculation assignment typically used in later interview rounds. Specifically, the case is used to evaluate the aptitude for breaking larger issues into manageable entities and forming financially sound recommendations based on fact-based analysis.
Both cases are divided into easy-to-follow steps with clear instructions presented below. Please click on the (+) sign for case parameter data or model answers for each step. Our real-life case interviews follow a similar format of breaking down each case into approximately three to five steps.
1. Scandinavian Sandwiches: Evaluating market size and profitability
Typically it is a good approach to start solving a market sizing case by structuring what you need to know, that is considering the key parameters before rushing into assumptions with insufficient data. Sometimes the interviewer may not give you all the data but encourage you to make an educated assumption. For this you should use your own experience. Also here having a structured approach helps, because it ensures your solving method is transparent, and you can return to adjust your assumptions if needed.
The exact answer you end up with depends heavily on your assumptions. This case tests your comfort level with large numbers and percentage calculations.
With the parameters given above, the our model answer is 210MEUR. More broadly, a realistic market size range would be from 200MEUR to 250MEUR.
Regardless of your result, it is always good to conduct a sanity check and communicate this to your interviewer. Given the Norwegian population, with this market size, an average person would spend approximately 40EUR on filled rolls annually (equivalent to 8 filled rolls). This appears to be on a reasonable ballpark as an average.
Revenue represents the sales of the company.
Variable costs represent the costs related to the number sold products (direct materials)
Fixed costs represent the costs independent of the number of sold products (facilities, personnel costs, marketing, administration)
EBIT = Revenue - Variable costs - Fixed costs
Net result = EBIT - Depreciation - Taxes
- The company has grown rapidly over the three years, but its profitability is fluctuating
- During the last year of the period, the company was unprofitable
- The variable costs have stayed stable, accounting for approx. 30% of the revenue
- The fixed costs seem significant, accounting for approx. 70% of the revenue - this seems high but should be validated with industry standards
Now you have the chance to compare Scandinavian Sandwiches to its competitors. Pay attention to leverage all the information provided and make 3-4 well defined statements.
- Revenue-wise Scandinavian Sandwiches is approaching its second biggest competitor
- Scandinavian Sandwiches' cost structure and profitability are weaker in comparison to its competitors
- The most profitable competitor has a cost structure with significantly lower fixed costs, but also two other competitors have 10% lower fixed costs in comparison to Scandinavian Sandwiches (which seems to fall directly into profitability)
- Scandinavian Sandwiches should focus on continuing its growth in a more healthy manner
- The management should analyze the company's fixed costs, benchmark with competitors in further detail and proactively seek ways to decrease these
- Fixed costs contain items such as facilities, personnel costs (on short term), marketing, administration - the largest drivers for fixed costs should be identified and addressed
- The marginal increase in variable costs could be addressed, for example, through better due diligence of suppliers
- Also the recent investments should be mapped to understand impact on net income
In our typical cases we ask the interviewee to provide concrete recommendations to the case company's management to reflect our real-life way of working. A recommendation is a summary or an "elevator pitch" of the case study you have conducted. Now we ask you to summarize your findings in 3-4 actions that you would recommend for Scandinavian Sandwiches' management in order to improve their competitiveness and profitability.
