Case Practicing Duke APD Consulting Club - PowerPoint Presentation

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Case Practicing

Duke APD Consulting Club

2/2/2016

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Meeting Agenda

Introduction to Case Practicing series, and our plan

Sample CaseBasic steps for case solvingHow do give feedbackSkills for today:Mental mathFramework No.1Case practice

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Meeting Agenda

Introduction to Case Practicing series, and our plan

Sample CaseBasic steps for case solvingHow do give feedback

Skills for today:Mental math

Framework No.1

Case practice

2/2/2016

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Introduction to Case Practice series

Number of meetings:

6

Goal for 6 meetings:

go

over Level 1 items in the spreadsheet, and prepare for basic case solving

skills

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Introduction to Case Practice series

Items to cover:

Mental math,

Market size estimation,

C

ase interview frameworks,

B

asic case interview skills,

C

ase practice with peers

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Meeting Agenda

Introduction to Case Practicing series, and our plan

Sample CaseBasic steps for case solvingHow do give feedbackSkills for today:

Mental mathFramework No.1

Case practice

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Sample case

Bubble Gum Manufacturer

You are a consultant working for a bubble gum manufacturer. The CEO of the gum manufacturing company is concerned because his company is experiencing declining margin. My questions to you are: 1, the reasons behind declining profitability;2, your suggestions for improving profitability.

Wharton Consulting Casebook 2007-2008 Edition

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Steps to solve a case

Step one: Summarize the case and clarify the objectives

Bubble Gum Manufacturer

You are a consultant working for a

bubble gum manufacturer

. The CEO of the gum manufacturing company is concerned because his company is experiencing

declining margin

. My questions to you are:

1,

the

reasons

behind declining profitability;

2,

your

suggestions

for improving profitability.

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Steps to solve a case

Step two: Make hypothesis and develop “issue trees”

Hypothesis:

This is a

profitability problem

, the company needs to reduce their product cost

Issue tree:

typical

profitability structure

Revenue

Price per unit

The number of unit sold

Cost

Fixed cost

Variable cost

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Steps to solve a case

Step three: drill down to each topic

RevenuePrice per unit-----------------------------------No infoThe number of unit sold---------------------Has been increased

CostFixed cost----------------------------------------No infoVariable cost------------------------------------Components of the cost

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Steps to solve a case

Variable cost:

Components of the cost:Cost of goods sold (COGS): ------------------------------------------No changegum, sugar, flavor, smell, color…

Labor-----------------------------------------------------------------------No info

Selling, General and Administrative expenses (SG&A

)------------

No info

! Product mix: There are some more profitable products and less profitable products. If the selling of a low profit product counting more, the profit margin will decline.

Step three: drill down to each topic

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Steps to solve a case

Variable cost:

Two types of products: flavored and flavorless gumBoth products are sold at the same price pointComposition products:

Flavored gum: gum, sugar, color dye, and flavor

Flavorless gum: gum, sugar, color dye

Note that the gum, sugar and color day raw materials are same in size for each of the two products.

Conclusion for problem1: Because the increasing sales of the flavored gum, the profit margin declined despite of an increasing total sales.

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Steps to solve a case

2, suggestions for improve profitability:

Reduce the cost: negotiate with raw material providers (esp. flavor)Increase the revenue: the price of flavored gum…2/2/2016

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Steps to solve a case

Step four:

wrap up the analysis1, After our analysis on this case, we think the main reason for the declining profitability is the increasing in the sales of flavored gum, which has the same price with the flavorless gum while cost more to produce.2, Our suggestions to improve the profitability are:

Reduce the raw material cost by negotiating with raw material provider

Or try lifting the price of the flavored gum

…

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Basic steps for case solving

Basic steps for case solving:

Summarize the case and clarify the objectivesMake hypothesis and develop issue treeDrill down on each topicSummarize the results

First five steps:

Summarize the question

Verify the objective(s)

Ask clarifying questions

Label the case and lay out your structure

State your hypothesis

case in point 8

th

edition, 4: IVY CASE SYSTEM

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How to give a feedback

Time: usually 20 to 30 min. It can be extended for beginners

Track down the partners performance during the practicing, where they did good and where they got stuckSummarize their strong points and weak points

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Meeting Agenda

Introduction to Case Practicing series, and our plan

Sample CaseBasic steps for case solvingHow do give feedback

Skills for today:Mental math

Framework No.1

Case practice

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Skills for today

Tips for mental math:

Round up or round down: keep it in mind, you don’t have to be precise, just be accuracy enoughBe sensitive to some relations: like 1/4=0.25, 1/6= 0.16, 1/7=0.14 or 0.15, 1/8=0.125, 1/9=0.1Break it down to several easier parts:

10/6 * 24, 24*25To avoid unnecessary calculation:

25*40,000 and 65*20,000, which is bigger

Practice more:

www.caseinterviewmath.com

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Skills for today

Mental math practice: (1 min, error should be controlled under 20%)

12% of 9,956 =

579 * 123,140,408 =425,821 + 90,597,756 =

1,364 * 194 =

119,181,400 - 55,981,641 =

53,165,916 / 5,463 =

7,415 * 875 =

950,372,836 / 26,852 =

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Skills for today

Framework 1: profitability

Case interview secretes, by Victor Cheng

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Meeting Agenda

Introduction to Case Practicing series, and our plan

Sample CaseBasic steps for case solvingHow do give feedback

Skills for today:

Mental math

Framework No.1

Case practice

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Case Practicing

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