Guide to a future in consulting
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Olympic ProblemsFirm: AT Kearney Interviewee: Kisha Green KFBS ’97 Round: First Location: Atlanta Date: 1996 You are in Atlanta during the Olympics. You work in a place like Centennial Park, where vendors sell different items, memorabilia, refreshments, etc. The area is divided into four regions, each of which has a region manager. You are a region manager. The middle of the park is on a very steeply sloped hill, and your region has an escalator that transports people from your region to the region adjacent to (and above) you. You are halfway through the Olympics, at the beginning of the second week, and throughout the first week the elevator has broken down quite often. This has been a major headache for you. Q1: What are your alternatives for dealing with the escalator breakdown? (Think how to get people where they need to go, manage traffic, and fix the escalator) Now you've called in the manufacturer of the escalator company to look at the elevator, because you want it fixed. Q2: What are some of the issues you must consider in determining how best to solve this problem, once the manufacturer gives you some recommendations? Now the escalator people come in, look at the escalator, and determine that a super-duper motor is specified for this escalator, but the one currently in use is a regular motor. He can get you a super-duper motor in and installed by the first thing the next morning. The cost is $4000, but your entire budget is only $3000. Q3: What are your alternatives for funding this motor? Q4: Which would you choose and why? Q5: Given that this is your choice, how will you persuade the appropriate party to do what you need done? Let's mock it. Say I am that person and you have to persuade me. RingsFirm: AT Kearney Interviewee: Kisha Green KFBS ’97 Round: Second Location: Atlanta Date: 1996 The client is a class ring manufacturer. It is a national company, like Jostens, and it is organized into regions. It is the leader in the industry, with a 20% market share, followed by 3 other competitors that have 15% each. The remainder of the market has many smaller players. The company divides the U.S. into regions. The Southeast region is having a problem because its sales, on a per capita basis, are lower than in the rest of the country. He wants to know how he can increase his sales. Company How do they sell the rings? 90% of their sales are done through independent, "mom and pop" distributors who initially approach the principals. The principal will either allow them to sell in the hallways/foyers of the school or he won't. There are two ways that the distributor will sell these rings. Either exclusively, meaning he is the only one selling in that school (this is 90% of the time) or a dual arrangement, where another distributor selling another brand may also sell at the same time (10% of the time). The other 10% of the sales are direct sales through our client's salespeople. Do the distributors sell several different brands of rings? No. Any single distributor will only sell our client's rings; but the distributors may sell other items like tee-shirts or bumper stickers. How does that compare to how they sell them in the rest of the country In the rest of the country, they are sold almost exclusively through direct sales. Are their prices consistent across the country? The client's direct sales force follows the price list very closely. The distributors, however, are free to set their own pricing. This probably does affect the sales levels there, because the distributors are probably acting like mini-monopolies, setting price to maximize their own profit, rather than that of the company as a whole. Competition How does the competition do in the South East? Our market share in the Southeast is very similar to that of the country overall. Competitive pressures are not very strong. Customer What is the nature of the customer? You tell me. The customers are high school seniors, graduating. They may or may not be going onto college. What is the typical yield for selling in the schools? It is about 50%. That seems fairly low, given that the students are kind of a captive audience. Why do the customers buy their rings vs. Someone else's rings? What do you see as differentiators among rings? They are probably somewhat of a commodity. Brand name recognition may influence it, but largely, a class ring is a class ring. Price must be a key consideration. Those students that they lose will probably go to a jewelry store with a parent and buy a cheaper ring, if the distributors are pricing like monopolies. So what are the client's options? The company could change to direct sales in the Southeast. However, this seems like a relationship-based sale. The initial sale is really to the principal, and the distributors probably have strong relationships with the principals that they return to each year. This could have serious repercussions. However, something has to be done to increase the sales levels in the region. What could the company do to improve sales with the existing distributors? SearsFirm: AT Kearney Interviewee: Kisha Green KFBS ’97 Round: Second Location: Atlanta Date: 1996 The client is a national retailer, like Sears, with 800 stores in the US plus service facilities in business to repair sold merchandise. The service facilities are not located with the store, but are usually nearby, like across the parking lot. The client wants us to give him a pricing strategy for the provision of these services. Give me your approach, your hypotheses, and the types of data you would need to collect. DistributionFirm: Booz- Allen & Hamilton Interviewee: Kisha Green KFBS ’97 Round: First Location: Atlanta Date: 1996 The client is a dish manufacturer. This company sells dishes and nice pots/pans to stores like Williams-Sonoma and large department stores (Macy's, Hecht's). The client has its own trucking/logistics organization that delivers the product throughout the country. The client thinks that his distribution costs are out of line. How will we determine if they are? How does distribution take place. Are there several manufacturing facilities and distribution centers throughout the United States? The client has one manufacturing facility in Tennessee. From there, the product is shipped to one of 10 distribution centers throughout the U.S. The product is then delivered, either on a truck, or if it's too far to deliver by truck, via air freight, to the retailer. Wall BoredCOMPANY: McKinsey & Co. LOCATION: Interviewer from Charlotte, NC office INTERVIEWEE: Will Wolf ‘97 CASE: Our client is a $700 million manufacturer of building products. The vast majority of their unit sales, revenues and profitability stems from the manufacture of wall board -- the gypsum and paper material used in building construction. The client is troubled by the cyclical nature of the wall board industry. They typically will experience eight years of happy profitability followed by four to five years of misery. Our goal is twofold. First, we want to reduce the cyclicality of the client’s cash flows, then we want to grow the business profitably. If you were leading the engagement team working with this client, how would you design the study? What issues would you want to examine? COMMENTS: Your basic commodity industry case. Please apply microeconomics and a dash of management accounting. I approached the first half of the question with the three C’s framework - customers, competition, and company. Stated a hypothesis that went something like “sounds like a commodity case. As such I’ll be looking for ways we can de-commoditize the product...” Or something. Customers: drilling down this hole revealed that the company mainly supplied construction firms, customers totally vulnerable to the building cycle. They were weak in the retail building products channel and there seemed to be some opportunity there. Competition: turns out the U.S. is divided into five building regions and our client dominates three. We discussed the possibility of penetrating the remaining two should the building cycle vary from region to region. Company: used these questions to learn more about their distribution system and the relative cost of transportation. Discussed the possibility of having the construction firms cash and carry their own wall board since they seemed to have their own trucks. And the firm had plants virtually everywhere. This would keep the firm from carrying too many delivery trucks in the lean times. Also talked about flexible manufacturing. The second half of the problem involved growth through geographical expansion vs. product diversification. New Money or No Money?COMPANY: McKinsey & Co. LOCATION: Pittsburgh, PA INTERVIEWEE: Will Wolf ‘97 CASE: Our client is the CEO of a major regional bank. The bank owns a data processing company. Recently the president of the data processing company asked our client to invest $100 million in new processing technology for the firm. The president felt that this investment would make them much more competitive. At this time our client approached us and said “$100 million is a lot of money. Should I do this?” If you were leading the engagement team working with this client, how would you design the study? What issues would you want to examine? COMMENTS: Question number one, before coming up with a hypothesis, should be “what’s a data processing firm?” Turns out they mostly process checks for small banks within the region. The president believes they can gain a greater share of these small banks with the new investment. We know from reading the newspaper that small banks are disappearing so immediately we have to be concerned about the customer base. Work this into a hypothesis. My hypothesis was that this would be a bad idea because of concerns about the customer base. This question would ultimately lead to a basic NPV analysis. But, to reasonably determine the cash flows we have to know more about the three C’s: customers, competition, and company. It turned out that the customer base was shriveling, that the competitors for the smaller number of banks were huge and low, low cost providers, and that the companies cost structure and particular strengths would keep them from being competitive with larger players like TRW and Equifax no matter how much they invested in technology. Recommendation: don’t spend the $100 million, sell the data processing firm. Truth in AdvertisingCOMPANY: McKinsey & Co. LOCATION: Interviewer from Atlanta, GA office INTERVIEWEE: Will Wolf ‘97 CASE: Interviewer: “I’m shopping for a new car. I’m not really concerned about price. Instead, my number one concern is safety. I have kids and I want to know that they are riding in the safest possible car available. Last week I saw a Volvo advertisement in the Wall Street Journal that proclaimed that Volvo made the safest cars in the world. Given this information, should I buy a Volvo for my next car? If yes, why. If no, why not?” COMMENTS: The interviewer wants to know how attuned you are to the drivers behind an analysis. A natural first line of questioning would be to ask, “did the newspaper ad mention how they had arrived at the safest car conclusion?” Turns out that in the fine print they describe the study. Volvo, or the National Transportation Safety Board, or the National Highway Administration, or someone else who might care about this stuff used motor vehicle registrations to determine the active fleet size of each make of car in the United States. Then they compiled data on the numbers of serious injuries and deaths that occurred on the roads for the previous year in which make of car. By dividing the numbers of casualties and deaths by the size of the fleet they arrived at a ratio. Volvo had the smallest ratio. So is Volvo the safest car? Maybe. Or maybe Volvo drivers are the safest drivers. Or maybe all Volvos are registered in states where it never snows or freezes and the roads are all safe. Does the interviewer like to drive drunk, at high speeds? Maybe he needs a car that performs well under those circumstances -- a tank, for example. Having established that Volvos are not necessarily the safest cars, the interviewer then wanted to know how I might design a study to determine the safest car. I explained that I’d want to evaluate his personal driving habits. If he drives mostly around town in a place where it snows all the time, then I’d want to run a bunch of cars full of crash test dummies up to a wall at 40 mph with ice on the road and hit the brakes at the last minute. The D&T WayCOMPANY: Deloitte & Touche LOCATION: Interviewer from New York, NY office INTERVIEWEE: Will Wolf ‘97 CASE: My recollection of the actual case is sketchy. It involved a manufacturing company that was losing profitability. Make one up. The reason I include my notes here was because the interviewer was not only interested in my ability to crack the case, he wanted to know how I would tackle the assignment as a senior consultant at Deloitte & Touche. COMMENTS: This was a two part question: how would you crack the case, and, how would you proceed as a Deloitte & Touche consultant. To crack the case you’d want to look at revenue and cost drivers. As a D&T consultant you would begin by tapping into the network of contacts you’ve got within the firm. What other projects resemble this one and who are the resident experts? Etc... Push vs. PullCOMPANY: Mercer Management Consulting LOCATION: Washington, DC INTERVIEWEE: Will Wolf ‘97 CASE: Our client is thinking of integrating into manufacturing desktop computers. Given that they have decided to enter the market would you recommend they use a push strategy or a pull strategy? COMMENTS: A great approach would have been to make two columns with plusses and minuses for each approach. A great hypothesis would have been: “Given the high cost and quick spoilage of inventory in this industry I would most likely advocate a pull strategy. Dell computer does this with great success. They don’t make a computer until it’s sold.” Then a methodical stepping through push and pull implications on promotion, channel management, inventory costs, supplier relationships and so on would have strengthened my case. I did none of these things. Directory: 2012 2012 -> The Case Against the nypd’s Quota-Driven ‘Broken Windows’ Policing What Is It? 2012 -> Annual InStructional unit plan 2012 -> University of Hawai‘i Maui College dental assisting program review october 21, 2013 2012 -> Committee on the rights of the child the rights of all children in the context of international migration 2012 -> Background on the Haitian Earthquake 2012 -> The Collected Wisdom of Science Olympiad Coaches 2012 -> Federal Communications Commission fcc 12-81 Before the Federal Communications Commission 2012 -> Aa and na members Dying from Tobacco 2012 -> [Baby Crying] 01: 04 [Ching Download 0.9 Mb. Share with your friends:
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