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Case Interview Fundamentals: Lesson 25 [Drill: Drink flavoring manufacturer] — Transcript

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0:01All right, let's get to the case. Just
0:03before we start with the case question,
0:06remember to
0:07follow the four steps from the four step
0:10approach strictly here. I'll tell you
0:12when to stop to
0:15craft your answer for each one of the
0:17four steps so you're not lost, but
0:19follow them strictly so that you
0:20practice the form, right? This is what
0:22we want to get right now. It doesn't
0:24matter if you get the case right or
0:26wrong, it matters that you get the four
0:29steps incorporated into your
0:31problem-solving techniques so that when
0:33you get an an analysis in your case,
0:36doesn't matter if it's similar to this
0:38one or if it's different, you can solve
0:41it. You can apply the four steps and
0:44separate structuring from asking
0:46questions from calculating from giving
0:49insights and leading from them so that
0:51you can actually solve the question
0:52correctly and impress your interviewer.
0:54All right. So, about to go into
0:57interviewer mode. So, most of the time
1:00I'll be speaking as I would to an
1:02interviewer. Sometimes here or there I
1:04might make a comment and it'll be clear
1:07to you that it's a comment for you.
1:09And of course, I'm going to slow down
1:12the math. You're probably going to go
1:13faster than myself, but I want to make
1:15sure that I don't miss anyone while
1:17doing the math and that you can
1:20go back to the math and compare yours if
1:22there's anything different and figure
1:24out if it's your mistake or if it's my
1:25mistake. Could be. Okay?
1:28Now, let's go on to the case question.
1:32It seems like my client is a French
1:34manufacturer of drink flavoring
1:36chemicals. So, I assume B2B. We're
1:39selling this to
1:41whoever manufactures consumer drinks,
1:43which are inputs to several consumer
1:45drinks. They manufacture and distribute
1:48their products in three different
1:49formats: powder, paste, and puree.
1:51The client is a family business known
1:53for its product's high quality and the
1:55owner is planning to retire soon. He
1:58does not have any children and plans on
1:59selling the company in 5 years. Your
2:02firm has been hired to help the client
2:04maximize the value of the company when
2:06selling.
2:07You got a table with several of the
2:09company's costs and concluded that the
2:10best area to focus right now would be on
2:13saving costs with raw materials. Your
2:15team divided the work fronts and you
2:17were designed with finding new
2:19strawberry suppliers and here's some of
2:21the data you found. Okay, so basically
2:24this guy wants to sell the company hired
2:25us to maximize value.
2:27What one of the ways that we're doing
2:29this is saving costs.
2:31Since I got a table and concluded that
2:33the best area to focus is raw materials,
2:35it seems like this is not the first
2:37question of the case, which makes sense
2:39as an analysis question usually in the
2:41middle of the case. All right. Now,
2:44they want to know how much we could save
2:46in costs by switching from the French
2:48supplier to the foreign one and they've
2:50given me this table with
2:53uh cost per ton of strawberry for the
2:55French supplier, for the foreign
2:56supplier, import costs, which is
3:00apparently 8% fee, logistics costs and
3:02losses in factories. Okay. Now, I'm
3:05asking the interviewer this,
3:07"Would it be okay if I just took a
3:09minute to structure my thoughts and
3:11figure out how I'm going to go about
3:12solving this case?" And let's say the
3:14interviewer says this is fine. Now is
3:16the moment when you should pause the
3:17video, structure your answer, present it
3:20like you would to an interviewer, so
3:22make sure you actually say it out loud
3:24so that you can listen to yourself and
3:26hear what's confusing, what's not,
3:28what's clear and how much in depth you
3:31actually went in presenting. Okay? And
3:34then,
3:35after you do this, you can unpause and
3:37listen to my answer, which I'll give
3:38right now. So,
3:40here's how I'm thinking about solving
3:42this case. Just so we're on the same
3:43page, I'm going to give you an overview
3:45of what what I want to do.
3:46I can see from the table that there are
3:48four major
3:50uh uh cost components, right? Strawberry
3:52costs, the import fee, transport costs
3:56and losses. And
3:58what I want to do is find the difference
4:01between the cost for each supplier for
4:03each one of those cost components and
4:05then add them all up. All right? And
4:08what I can see here is that strawberry
4:10cost and import fee is going to be
4:11fairly straightforward to do. Transport
4:13costs, there are a few pieces of data
4:17that are missing that I'm going to need
4:19and hopefully you have them, otherwise
4:20we can just choose some assumptions for
4:23them.
4:23And losses is going to be a little bit
4:26tricky. I have a couple of questions
4:28that I need to ask before I can actually
4:30structure how I'm going to do this cuz
4:32I'm not sure I understand the data.
4:34So, I have some questions to ask. Would
4:36it be okay if I ask those questions
4:38right now?
4:39And then let's say the interviewer says,
4:41"Yeah, that's fine. You can ask your
4:42questions."
4:43So, before you student pause your video
4:47and
4:48outline the questions you want to ask
4:49and ask them. I want to make a quick
4:51comment here. You might have noticed
4:53that part of my step one structuring
4:57will happen after
4:59my step two, which are the questions,
5:01because I need to ask a few questions
5:03before I can actually structure how I'm
5:05going to get to the losses cost
5:08difference. Okay? And that is okay. That
5:10is fine. That happens often.
5:12I already have an idea of how I'm going
5:14to do this and you should as well during
5:16structuring, but I still need to know
5:19stuff. So, part of it's going to be
5:21after the second step. All right? Now,
5:23you may pause your video,
5:25ask the questions that you need to ask
5:27and then see if they are the same that
5:30I've asked, see if you have any blind
5:31spots. All right. First question.
5:34Do we know how many tons of strawberry
5:37we purchase each year? This is a piece
5:39of data that I'm going to need. And then
5:41let's say the interviewer tells me it's
5:4210,000 tons every year that we purchase.
5:46Oh, regarding the import fee,
5:50does this fee happen over
5:53only the strawberry cost? So, it's 6%
5:57over
5:58all of my strawberry purchases, or does
6:00it include freight costs as well? And
6:03let's say the interviewer tells me,
6:04"It's only over the strawberry costs.
6:07You don't pay import fee on the
6:09transport costs."
6:10All right. Next, do we know how many
6:13trucks we use? Cuz for transport costs,
6:16I have the data of number of
6:19euros spent per kilometer per truck. So,
6:23I need to know the number of trucks and
6:24the number of kilometers per truck. And
6:26let's say the interviewer tells me that
6:29we do have data for this. We know that
6:31each truck can carry 12.5 tons of
6:34strawberry.
6:35That's okay by me. That's enough. I have
6:37the number of tons that we purchase
6:39every year. So, with that and the number
6:41of tons per truck, I can get you the
6:43number of trucks. Is that the number for
6:46both suppliers, or is it different for
6:48the new supplier? You know, let's say
6:50the interviewer tells me it's the number
6:52for both suppliers.
6:54And how about the number of kilometers
6:55per truck for each supplier? I assume
6:58that the
6:59foreign supplier is farther away. And
7:01let's say the interviewer tells me that
7:03it's
7:04100 kilometers per truck on average and
7:08250 for the foreign supplier. So, it'll
7:11be much farther away.
7:14All right. Now,
7:16my next question for losses is
7:19So, it seems like they are losses in the
7:22factory, right?
7:24So, I assume that anything that goes
7:26lost, we need to buy again, and we're
7:28probably going to have to pay import
7:29fees and transport costs on it. Yes, and
7:32that's right.
7:33Now,
7:34why do these losses happen? What's the
7:36cause of them? And let's say the
7:38interviewer says,
7:39"Oh, it's strawberries that go bad, and
7:41strawberries that come from abroad,
7:43they're a little bit lower quality, and
7:45so more of them go bad and we can't use.
7:48Okay.
7:49Now, next question.
7:51The 5% of losses in the current
7:54supplier, you said that we purchase 10
7:57tons, and I'm not sure if that's all of
7:59the tons that we use, and then we
8:01purchase more, which is the ones that we
8:03lose,
8:04or do we purchase 10,000 tons, but we
8:07also only use 9.5 thousand tons because
8:115% are losses. And let's say the
8:14interviewer tells me that this is the
8:15case. We purchase 10,000 tons, but we
8:18only use 9.5 thousand tons because
8:215% go to waste. Okay, so this is more
8:24clear to me now. I'm probably going to
8:27have to find the volume of strawberries
8:29that we use, or the weight of
8:30strawberries that we use.
8:32And given that, and how much we're going
8:35to lose, which is 9% of everything we
8:37purchase,
8:39I'm going to find out how much more
8:41we're going to have to buy. And once I
8:43find that out, I'm also going to have to
8:44account for import and transport costs.
8:48All right. Now, you may pause your video
8:50and start step three, which is, given
8:53the structure that you built, calculate
8:56the numbers. I'm going to do this as
8:58well. Going to calculate right now, so
8:59pause your video and go ahead.
9:02I'm going to start off calculating the
9:04strawberry costs, the difference in
9:06strawberry costs between each suppliers.
9:08Okay? Basically, what I'm going to do is
9:11multiply the difference in the cost
9:15euros per ton of strawberries
9:17by the number of tons that we purchase
9:19every year. So, the difference is
9:223,000 euros for the current supplier
9:25minus
9:262.2 thousand euros for the foreign
9:29supplier. So, that gives me 0.8 thousand
9:32euros
9:33per ton of strawberry.
9:36And that times 10,000 tons,
9:39.8 * 10 is 8.
9:42Thousand times thousand is million. So,
9:45I got 8 million. Okay?
9:48Now, let's move on to the import fee.
9:51What I'm going to do here is So, this is
9:53only for the foreign supplier. This is
9:55simpler. I'm going to multiply the total
9:57strawberry costs by the import fee,
10:00which is 6%. So,
10:02total strawberry costs is the price per
10:05ton of strawberries, 2.2 thousand,
10:08times the number of tons that we
10:09purchased, 10,000. So, 2.2 * 10 is 22.
10:13Thousand times thousand is million. This
10:16gives me 22 million times 6%.
10:19So, I'm going to break down
10:22uh 6% into 5% + 1%. This breakdown of
10:27percentages into simpler percentages
10:29that I know how to deal with, like 5%,
10:311%, 10%, is something that I do very
10:34often. And I recommend that you do this
10:36as well. So, uh stay tuned for it. I'm
10:38going to do it a lot, not only in this
10:40drill, but in every single other drill
10:42that you see. Just consulting interview
10:44cases always have percentages.
10:47All right. So, I'm going to break down
10:486% into 5% and 1%.
10:51Uh and then I'm going to add them up,
10:53and it's going to give me 6% of 22
10:55million. So, basically, 5% of 22
10:58million.
10:5910% of 22 million is 2.2 million. This
11:02is easy. Half of that to get to 5%, 1.1
11:06million.
11:081% of 22 million. 10% is 2.2 million.
11:1210% of that, which will bring me to 1%,
11:15is .22 million.
11:17So, I have 1.1 million plus 0.22
11:21million, 1.32
11:23million euros.
11:25Moving on to transport costs. What I'm
11:27going to do here is find the number of
11:30trucks, which I know is the same for
11:33both suppliers. And then I'm going to
11:34find the difference between the total
11:36euro amount spent per truck.
11:39Because
11:40for each supplier, there's a different
11:43cost per kilometer per truck and a
11:45different average length per truck or
11:48distance
11:49that the truck goes per truck. So,
11:53I can get to a different value of euros
11:55per truck, which puts both together. All
11:58right?
11:59So, to get to the number of trucks,
12:01I will divide the number of tons we
12:03purchase by the number of tons that go
12:06into each truck. So,
12:0810,000 divided by 12.5.
12:1112.5, I know that is half of 25, which
12:14is 1/4 of 100.
12:16So,
12:1712.5 is 1/8 of 100 or 12.5 fits eight
12:22times into 100. So,
12:26what this gives me is 12.5 equals 100
12:29over eight. So, 10,000 over 100 divided
12:32by eight is 10,000 times eight over 100.
12:38So, this gives me 800 trucks.
12:41Now, let's get to the difference in euro
12:44amount per truck spent in a year.
12:46I have that for the French supplier,
12:50we spend 10 euros per kilometer per
12:52truck and each truck goes 100
12:55kilometers. So, this gives me 1,000
12:58euros per truck.
13:00For the foreign supplier, I have 22
13:04euros per truck and 250 kilometers per
13:08truck. So,
13:10I'm going to break 22 down into 20 plus
13:1310% and I'm going to
13:16do the calculations with 20 and then I'm
13:17going to add 10% back in the end cuz 20
13:20plus 10% of 20 is 22. So, 250 * 20, this
13:25is 50 and then I'll add two zeros. This
13:28gives me 5,000. Add 10% to it, I get
13:325.5 thousand euros per truck.
13:37Okay?
13:38So, the difference between those 5.5
13:40thousand minus 1,000, 4.5 thousand euros
13:43per truck in extra costs.
13:46Now, I'm going to multiply
13:49800 trucks times the extra costs of 4.5
13:53thousand euros.
13:55What I'm going to do with this 800 is
13:56I'm going to call it 0.8 thousand cuz
13:590.8 is same as 80% and I like dealing
14:03with the zeros in letters, K, M, and B.
14:07So,
14:090.8 thousand times 4.5 thousand. As I've
14:12said before, thousand times thousand is
14:15million, so I'm going to leave the
14:16million aside.
14:18And
14:200.8 is the same as 80%, so I can just
14:23take away 20% of the other number. So,
14:264.5, 20% of that is easy to get to 0.9,
14:30right? Cuz nine is 1/5 of 45. 9 * 5 is
14:3445.
14:364.5 minus 0.9 is 3.6. So,
14:41the difference is 3.6 million euros.
14:45This is an increase in cost. Now, on to
14:47the tricky bit, losses. So,
14:50basically I'm going to do this in four
14:52steps. First, I'm going to find how many
14:54tons of strawberries I actually use
14:56every year,
14:57how much I need to purchase based on
14:59that,
15:01given the 9% losses on total purchase.
15:05Note that it's 9% losses on total
15:07purchase and not on use. So, I can't
15:10just multiply my
15:12use by 9% and add that. What I need to
15:15do is have the
15:17purchase minus 9% is
15:20the amount that I use.
15:23Now, step three is finding what increase
15:26in percentage that is versus what I used
15:29to purchase.
15:30And then I'm going to multiply that
15:32increase in percentage by the total
15:33costs. The reason I'm doing this is that
15:36I want to take into account the import
15:38and transport costs as well. Okay, let's
15:40do it. So,
15:42basically, I purchase 10,000 tons every
15:45year, but I lose 5% of that and I use
15:489.5 thousand tons. Okay?
15:52What I have here is that
15:54the amount that I purchase minus 9%
15:57gives me the amount that I use. So, I'm
15:58going to write out a little equation
16:01here.
16:02X, which is the amount I need to
16:03purchase, times 91%
16:06equals 9.5 thousand tons.
16:09So,
16:10what is X? It's 9.5 thousand tons
16:12divided by
16:14.91 or 91%.
16:18So, I'm going to divide it here. 9.5
16:21divided by .91 is the same as 950
16:25divided by 91.
16:26Uh
16:27and this gives me
16:2910.44. So, 10.44
16:33thousand. Okay? Now,
16:3610.44 thousand is a 4.4% increase over
16:42the 10,000 that we used to purchase.
16:44Now, I just need to multiply 4.4% by the
16:47total costs.
16:49All right, so let's get to the total
16:51costs.
16:52I have that
16:54the strawberry costs are 22 million.
16:56I've already calculated that.
16:58The
17:00import costs are 1.32 million. Already
17:03calculated that.
17:05And transport costs is
17:095.5 thousand. That is cost per truck
17:12times 800 trucks. Okay? And so, 5.5 * 8
17:18is 44. So, this gives me
17:224.4 million. Okay? Adding these up, 22 +
17:274.4 26.4.
17:3026.4 + 1.32
17:33gives me 27.72
17:36million. Now, I just need to calculate
17:394.4%
17:40of this.
17:42Would it be okay if I rounded this 27.72
17:48to 28 just to calculate the losses? Cuz
17:52this would make
17:54just around 1% difference in the final
17:57losses result, but it'd be so much
17:59easier for me to calculate. And let's
18:01say the interviewer says that's okay.
18:02So, I'm going to calculate 4.4%
18:05of 28 million.
18:06I'm going to break the 4.4% into
18:104%, which I'm going to break into 5%
18:13minus 1%, and then I'm going to add 10%
18:16of the 4% to itself, and it's going to
18:19give me 4.4%. So,
18:225% of 20 is 1 million. 5% of 8 is .4
18:28million. So, 5% is 1.4 million.
18:321% is
18:35.28 million. So, the 4% will be 1.4
18:39million minus .28 million. This is 1.12
18:43million.
18:44I'm going to add back 10% of this. So,
18:4710% of 1.12 is 0.112.
18:511.12 + 0.112 is 1.232.
18:57Okay? Now,
18:59let's say the interviewer tells me just
19:01round this to 1.23. Okay?
19:04Now, it's time to add up all of those
19:06cost differences, right? So, what I'm
19:08going to do is I'm going to take the
19:10cost saving from strawberry cost, and
19:12I'm going to subtract the sum of the
19:14cost increases from import costs,
19:17transport costs, and losses. So, I have
19:218 million minus the sum of 1.32,
19:253.6, and 1.23.
19:281.32 + 1.23 is 2.55. 3.6 + 2.55 is 6.15.
19:388 million minus 6.15 million is 1.85
19:43million euros. Now, I'm going to start
19:45step four, uh which is coming up with
19:49insights and next steps. And so, you
19:51should pause your video and come up with
19:53your step four if you haven't yet. Say
19:55it out loud and then listen to mine.
19:57Okay? And I would look at this number in
19:59two ways.
20:01First, if we know the
20:04total profits for this company in a
20:06year, then I could tell what percentage
20:08of profits this is. And from that,
20:11probably what the percentage of sale
20:14would value would increase because
20:16if the profits if this is 10% of profit,
20:19for example, then it's probably going to
20:21increase the sales of the sale in around
20:2410% cuz it would it would increase the
20:27free cash flow of the company in the
20:29same value.
20:30And
20:32another thing that I could do with this
20:33number, another way to look at it, is
20:35taking a valuation multiple. So, let's
20:37say the owner expects to sell this
20:40company at five times the profits. If
20:43we're saving 1.85 million, then the
20:48increase in the total value of the sale
20:49is probably going to be five times 1.85
20:53million, which is
20:55close to 10 million,
20:58around 9. Let's see. 9.25 million, I
21:02think. So,
21:04yeah, those are two ways that I'd look
21:05at it as a percentage of the value of
21:08the sale that would increase and as a
21:11total number of euros increase in sale.
21:15But, there's
21:16another thing that still leaves me wary
21:18about this number.
21:20And that is
21:21the owner intends on selling this in 5
21:23years.
21:24And there are a few things that could go
21:26wrong that I can see in this change of
21:29supplier that could be
21:32risky. So, there are revenue risks and
21:35cost risks. If any of those happen, we
21:38might actually decrease the value of the
21:40sale rather than increase. For example,
21:42on the revenue side, the the supplier
21:44could be less reliable and we could have
21:46shortages.
21:47The quality of the strawberries could
21:49affect the quality of our product and
21:51thus we could lose clients.
21:53Or there could be
21:55delays in manufacturing because we're
21:58still learning to deal with this new
22:01supplier, the times that they come, or
22:03the uh quality of the strawberries as it
22:07was mentioned that the quality is a
22:08little bit lower. Oh, if any of the any
22:10of these things happen, it'll probably
22:12offset the increase in profits from the
22:15savings in costs and actually
22:18decrease profits and of course
22:20the buyer would see that in their due
22:22diligence and they could decrease the
22:24value of the sale for that. On the cost
22:27side, we could
22:29need to have changes in manufacturing
22:31due to the low quality of the product.
22:33We might need to buy some more stuff,
22:35some kind of input that would reduce the
22:39total increase in profit that we're
22:40seeing. We could need to invest in a
22:43different type of machine because of
22:45this for some reason. Or maybe there's
22:48just a learning curve in manufacturing
22:50in whatever labor we do. And then that
22:53might increase costs for a while because
22:55it could decrease our productivity or
22:57could even
22:59decrease our output or something like
23:01that. Anything could happen. So, I would
23:03be wary. Next thing that I would do is
23:06figure out if those risks are feasible.
23:09Try to do some research on them. If I
23:11find out that these risks are not
23:13relevant, then I just go on with the
23:14change. If I find out that they are
23:17relevant, then of course I'd have to
23:19weigh this to see if we should go on
23:22with the change or not. But,
23:24if they are very large, most likely not,
23:27and then I'd move on to the next
23:29cost-saving opportunity. All right,
23:31guys. This is it for today's drill. Now,
23:34if you're advanced, you might have found
23:36this case a little bit too easy, and
23:39that's expected because
23:41I've built this module to have a skill
23:44progression.
23:45So, you want to go from easiest to
23:48hardest. But, if you want to get
23:51practice that's a little bit tougher, I
23:54recommend you do this very same drill,
23:57but not have the number of tons
24:00purchased. So, assume that in the
24:01beginning when I asked, "Do we know how
24:04many tons we purchase every year?" We
24:06don't have that answer. And what that
24:08means is that you need to find the cost
24:11decrease in percentage rather than in
24:14absolute euro value. Okay? This is just
24:18significantly tougher in the structure
24:21side, in the math side, not in the
24:24business side, of course, cuz the
24:25business is all the same, but it is
24:27going to be some good practice for you
24:29if you're advanced. Now, I want to talk
24:32about a few insights that I want you to
24:35take home from this drill because
24:37they're going to be helpful to you in so
24:40many other cases. So, first,
24:42I know that many of you like seeing
24:44alternative structures for all cases
24:46that we do. And so, I'm going to tell
24:48you that in this specific case, there is
24:51an alternative structure that would be
24:53very popular among candidates. So,
24:56basically, in this case, I did a
24:58structure that went for the
25:01difference
25:03of costs in each cost component. And
25:05then, I summed all of them up into a
25:07total of differences. You could have
25:09taken a different approach, which I will
25:11call the difference of totals. What that
25:14means is
25:15you find the entire cost we have
25:18for all cost components for one
25:20supplier, so for the French supplier,
25:22and then for the foreign supplier, and
25:24then you subtract one from the other.
25:26That's a different structure you could
25:28have done. It would have worked out the
25:30same.
25:31This is actually a quite common theme in
25:34quantitative analysis in case
25:35interviews. Cases where you can find the
25:39difference in totals, or you can add up
25:43the difference in the components of a
25:45total. That's going to happen in several
25:47different times. And most of the times
25:50you have the two possible paths to go
25:52through.
25:53And sometimes, like in this case, there
25:56isn't a clear better path.
25:59Sometimes the the path where you go
26:02straight to the difference in the
26:03components and then add them up is
26:05better because it's more efficient, but
26:08sometimes it isn't. In this case, it
26:09isn't because
26:11I had to add up all of the costs anyway
26:13to get to some of the cost components.
26:15So, it doesn't really make a difference.
26:18But, in other cases, it does make a
26:19difference. In some cases, it's just
26:21impressive if you can take the more
26:24efficient route. So, while you're
26:26practicing, I highly suggest that you
26:28look for both ways, so that you make it
26:30a habit to figure out on your own which
26:32one's the most efficient structure
26:34before starting the case. And then, once
26:37you get a case that has two different
26:39paths, two possible paths, you can even
26:43tell the interviewer, "Oh, I see these
26:45two possible paths. I'm thinking of
26:47going through this one. Do you have any
26:49preferences?" And And
26:50that gets them involved in the case.
26:52That shows them that you can discuss an
26:54analysis rather than do it on your own.
26:56It's always a good thing, okay? But,
26:58that's not the main reason why you
27:00should practice this. The main reason is
27:02so that you can find different possible
27:05structures and then pick the best one
27:07while you're doing any case.
27:09Okay, now I want to talk to you about
27:11the most common mistake in this case.
27:14And the most common mistake in this case
27:15is the following. You might have noticed
27:17that this is a fairly simple case. Once
27:21you look at the numbers that you have
27:23and what the question is,
27:25you get the feeling that you are going
27:27to be able to solve it. I highly doubt
27:28that many of you had problems and got
27:31stuck and weren't able to finish this
27:33case.
27:34Okay, and the mistake here is that once
27:37you see that, you start doing the math
27:39right away because you're nervous and
27:42you want to finish quickly or because
27:44you want to impress your interviewer
27:46that you're able to do it quickly or
27:47that you could do it right off the bat.
27:51And the truth is,
27:53you should
27:55always impress with your structure, with
27:58your communication clarity, or with the
28:00quality of your insights or next steps.
28:03You should never try to impress your
28:04interviewer on speed, and especially if
28:07that means sacrificing structure. And
28:09this is very, very common. You might be
28:11thinking, "Oh, no one would do this."
28:13This is very common, and
28:15I would not be surprised if you did it
28:17yourself, and you thought, "Oh, but I'm
28:20not going to do this in the interview."
28:21And the truth is, you are going to do in
28:23the interview exactly what you do during
28:25practice. So, you need to practice doing
28:28the steps separately.
28:29What happens if you just look at the
28:31numbers and think to yourself, "I can do
28:34this." and then you start doing it is,
28:36number one, you get the interviewer
28:37confused.
28:39They won't know where you are at all
28:41given times, and that means that if they
28:43don't understand something, they might
28:45need to assume that you're doing it
28:47wrong. That also means that if you make
28:49a mistake, you won't know where to go
28:51back to. You might need to start the
28:53case all over again, or you might even
28:55get yourself in that terrible situation
28:57where you blank out and you can't move
28:59forward or go back, and you can't really
29:02understand the help that interviewer is
29:03giving you cuz they're not sure where
29:05you are. And they're saying something,
29:06you're somewhere else, and you don't
29:08really understand it. And so, the
29:10interviewer's help starts sounding like
29:11more pressure. And
29:14even if you get everything right but
29:17doing the case without a structure, the
29:19signal that you're giving to the
29:20interviewer is not one you want to give.
29:22What you're signaling to them is that
29:25you won't be able to discuss this kind
29:27of analysis with the client because you
29:30just go and do it because you're smart
29:32and you're fast and you're going to give
29:34them a number, but you can't discuss it
29:36with the client, and that is crucial to
29:38the consulting job. What this tells the
29:40interviewer is that you have a cap in
29:43your growth inside the consulting firm.
29:45You can't be a manager. You can't be a
29:46partner because you can only do
29:49analysis, but you can't discuss them,
29:51which is absolutely necessary to getting
29:54clients and the team on board on your
29:56analysis.
29:57And also, if they see that you get it
30:00right, but they don't really understand
30:02how you got there, they can never be
30:04sure that you would have gotten it right
30:06in other cases. So, you will never get
30:08the benefit of the doubt from that
30:09interviewer. All you'll get is that
30:12he did this right, but let's say the the
30:15two interviewers are talking after your
30:17round of interviews. One of them will
30:18say, "He got this right,
30:21but I can't be sure. Like, if if this
30:24candidate got it wrong in your case,
30:25then we can't pass them." But if you do
30:28get it right in the case, and you show
30:30your structure, you convince the
30:31interviewer that you'd get it right in
30:33any case, if the other interviewer says,
30:35"Oh, this candidate didn't do it didn't
30:37do so well," they might say, "Oh, it
30:39might have been bad luck." But if you
30:40can't prove to them that you'd get it
30:42right in any case, then you're never
30:44going to get the benefit of the doubt.
30:46Now,
30:46another thing that I want to point out,
30:48and this one's from this very specific
30:50case. Notice how the interviewer didn't
30:53give me most data on transport. They
30:56only gave me a hint, which was the cost
31:00in euros per kilometer per truck. And so
31:03that's not the data that I wanted,
31:05that's not the data that I asked for,
31:06but it hinted to me that I needed the
31:08number of trucks and that I needed the
31:10number of kilometers that each truck
31:12would do in a trip. Right? And then, at
31:15that moment, I had to restructure and
31:18use that number, but ask for other
31:20numbers,
31:21uh so that I could get to my final
31:23answer.
31:24What they're doing is intentional. You
31:26are going to see that happen in so many
31:28cases, cuz they want to see
31:31that I don't get destabilized when that
31:34happens. They want to see that I can
31:35just get the number, understand where it
31:38fits, and restructure so that I can ask
31:41for the right pieces of data and do my
31:44analysis. Because this happens all the
31:46time. Like you're in a client, you're
31:48trying to do a specific certain
31:49analysis, and you figure out that the
31:51number you want doesn't exist. And then
31:53they'll tell you some other number, and
31:55if you need to go home, think about it,
31:57get yourself ready, and then go back and
31:58see if that number fits or not, then the
32:01project is going to take forever. What
32:04they want you to be able to do is once
32:06you get that number that's different
32:08than what you want, you just
32:09restructure, see where it fits, and ask
32:11for the new info that you need. Okay?
32:15And the last point that I want to point
32:17out here to you that's useful in every
32:19single case, is that there are clues
32:22from the case question and from the data
32:25that you get to what structure you want
32:28to do. All right? If you're struggling
32:29with doing analysis questions,
32:32especially
32:33structuring analysis questions,
32:36every time you get a new question,
32:37especially the tough ones, especially in
32:39practice, look at it and try to
32:41highlight what are the
32:44hints that the case question is giving
32:46you. In this case, there are many. So,
32:48each piece of data was a hint, right?
32:51They hinted in the table that I got that
32:53there were these four different cost
32:56components. And there are always these
32:59kinds of hints in case questions. So, if
33:01you just start the case before you
33:03structure, before you do anything, you
33:05highlight what those hints probably are,
33:08what look like hints to you,
33:10then you might be able to come up with
33:12the structure with the structure
33:13instinctively given that. Or at least
33:16you're going to make sure that you're
33:17not ignoring anything. Cuz once you've
33:19highlighted all the hints, you just need
33:21to make sure that every one of those is
33:24going to appear somehow in your answer.
33:26It could be in the structure, it could
33:27be in the questions that you ask, or it
33:29could be in your insights and next steps
33:32by the end of the case.
33:33All right. All right, guys, this is it
33:35for today. I'll see you in the next
33:37video.

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