What is a case interview?

The Case Interview What is a case interview? The Case Interview What specific skills does it assess? How to prepare for a case interview? An Interactive example. What Is a “Case Interview” anyway? The Case Interview Simulation of a business problem. Similar to what our associates encounter every day.

Series of open-ended questions. They’re designed to stimulate your conceptual, quantitative, analytical and – most Importantly – creative ablest. There are several types of cases. Each Is designed to assess different skills.

Classic Case The Case Interview Should an organization add capacity? How should an organization react to a new competitor? Should an organization enter/exit a new/old market? Measures Your broad functional skills Your big-picture perspective Your comfort with detail and analysis Special Case The Case Interview Why are manhole covers round? What’s the estimated weight of a Boeing 747? What will interest rates do next? Your comfort with ambiguous challenges Your level of creativity What are we looking for? Logical skills Analytical/reasoning skills Conceptual problem-solving ablest Critical path thinking Flexibility What do we mean problem-solving ability? Can you Identity the key Issues of the case while accurately and methodically reaching the solution? Critical path thinking? Can you use the clues that build on each other while staying on track and focusing on what’s relevant? Flexibility? .

Can you adapt your answers to a changing situation? I née case Interview What do you need to bring?

Your logical business sense The Case Interview How do decreasing marginal costs affect profitability? What effect will fixed costs have on the result? Your mathematical aptitude From basic mathematics to…. Algebra Probability Weighted averages conversion Your strategic interpretation skills The Case Interview Unit Can you..

…. Interpret your answer’s impact? Assess alternatives? Keep a grasp on the “big picture” as well as the minor details? Your presentation skills Can you.

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. Clearly state your thoughts and synthesize information? Explain how your answer changes in the face of changing variables? Defend your answer? Be prepared! Let’s work through a case together. Background Information You are a manager at a company that markets various products and services and that is looking to diversify You receive some information indicating magazine publishing may be interesting You are considering developing a new magazine but are not sure how profitable it might be What are some of the issues you must consider when evaluating the magazine business?

Things to consider Defining the target market Competition – # of competitors, fragmentation, brand name Build off of core competencies Barriers to entry Business cycle stage Method of assuring viability Opportunity cost Our next step is to understand the economics of the business. What are the profit drivers in the magazine publishing business?

Main profit drivers of the publishing business include Revenue Sources Subscriptions Newsstand sales Advertising Customer lists Internet Costs Printing Distribution Content Development Marketing/promotions Through some initial research you have been able to determine the following You can charge EYE for an annual subscription of 50 issues You can generate El in advertising revenue per issue for each subscription Printing and distribution costs are El per copy per issue Content development costs run El million per year Let’s ignore newsstand sales for now Let’s ignore marketing expenses for now How much profit will you generate a year from one incremental subscription? Let’s figure it out together…

…. Subscription revenue per year = EYE Advertising revenue per year = EYE El /issue x 50 issues Yearly production and distribution costs = EYE Profit from one incremental subscription = EYE EYE + EYE – EYE How many subscriptions would we need to sell in order to breakable on this venture? How many subscriptions do we need to sell to break even?

Profit (contribution margin) = EYE per subscription Magazine content development = El million per year Breakable = El million/EYE = 40,000 subscriptions Given you need 40,000 subscriptions to breakable, do you move forward? What about marketing costs? The Case Interview Your company has expertise in direct mail solicitation so you decide to use that method to market your new magazine. Each piece of mail costs E.

50. You are able to achieve a 2% response rate. How much does it cost you to sign up a subscriber? Cost per subscriber calculation The Case Interview Cost of mailing/response rate = Cost to sign up one subscriber E. 50/2% = EYE per subscriber Another way to calculate cost per subscriber: Assume you mail offer to 100 people Costs = EYE (E. 0 x 100 people) Responders = 2 (2% of 100) Cost per responder = EYE/2 or EYE How will this affect your breakable calculation? New break even calculation The Case Interview Old contribution margin Marketing costs New contribution margin New contribution margin = What can we do to make this venture better? Some possible considerations: The Case Interview Raise subscription prices Raise advertising rates Reduce production costs Increase response rate Make each response matter more – Consider renewals and multi-year subscriptions Renewals look like an obvious avenue to explore..

. In the best case scenario, zero cost to acquire with no drop in revenues How might you encourage renewals?