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Mock Case Interview at Bain & Company | Full Example with Feedback — Transcript

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  1. 0:00[Music]
  2. 0:05what's a case interview like how should
  3. 0:07you interact with their interviewer how
  4. 0:09long should a case interview take these
  5. 0:11are some of the questions that we get as
  6. 0:12people are preparing for their case
  7. 0:13interviews with Bay in this video you'll
  8. 0:16get a chance to see someone set up their
  9. 0:18analysis and their framework work
  10. 0:20through their analysis including doing
  11. 0:21some math and synthesize their
  12. 0:23recommendation at the end we hope this
  13. 0:25interview example helps you feel
  14. 0:27prepared and confident heading into your
  15. 0:28interviews so let's take a look at a cas
  16. 0:31interview hi Eric great to meet you
  17. 0:33great to meet you so glad to have you
  18. 0:34here today excited to be here a little
  19. 0:36nervous but excited yeah how are you
  20. 0:38doing just more generally I'm good I'm
  21. 0:40good yeah office is beautiful
  22. 0:41everybody's been great so far and just
  23. 0:43yeah excited to get going with the case
  24. 0:44I'm so glad well I'll be the one pushing
  25. 0:46us along don't worry if I finish us up
  26. 0:49move us to another area I'll be in
  27. 0:51charge in terms of the time management
  28. 0:53good to know thank you great so should
  29. 0:54we jump in yeah let's do it all right so
  30. 0:56let me give you a little bit of the
  31. 0:57context of the case now one thing I love
  32. 1:00about this one is I do all consumer
  33. 1:03products and Retail work for you know my
  34. 1:05normal job here at ban and so this is
  35. 1:08one of those consumer products types of
  36. 1:10cases and it's based off of a real Bane
  37. 1:12case okay and so let me give you a
  38. 1:14little bit of the situation we're going
  39. 1:15to Blind all of the company names for
  40. 1:17the purposes of
  41. 1:18confidentiality so our client is foodco
  42. 1:21they're a multi-billion dollar client
  43. 1:24that has leading Brands across many
  44. 1:26different food categories right now
  45. 1:28they've narrowed in on the alternative
  46. 1:29milk category they believe it's growing
  47. 1:32quickly has some attractive elements to
  48. 1:34it and alternative milk you can Define
  49. 1:36as anything that's non-dairy plant-based
  50. 1:39so things like almond oat coconut soy
  51. 1:42you name it all goes within alternative
  52. 1:45milk I think I used almond in my latte
  53. 1:46this morning so there you go so you're
  54. 1:48you're familiar already they've
  55. 1:51partnered with Bane to determine how
  56. 1:53they want to enter and whether or not
  57. 1:55they think this asset is the right way
  58. 1:56to enter the space okay because they're
  59. 1:59pretty familiar with this Market they've
  60. 2:00narrowed in on a Target named smilk and
  61. 2:03smilk in terms of its profile it's
  62. 2:06pretty attractive profile that's why
  63. 2:07they're interested in it okay to give
  64. 2:09you some facts on it it has over the
  65. 2:11past three years been doubling its
  66. 2:13profit each year oh wow it's impressive
  67. 2:16very very strong performance overall it
  68. 2:18has about 6% share of the alternative
  69. 2:21milk market and um is expected to grow
  70. 2:24to 8% okay so moderate modest growth
  71. 2:27right now this smk has been able to
  72. 2:30expand across Europe and the us but
  73. 2:33foodco for this particular piece of work
  74. 2:36is only interested in the US market okay
  75. 2:39good to know so we'll be focusing on
  76. 2:40that now here's the real complicating
  77. 2:43element of it they expect that smk
  78. 2:45should be able to increase its profit by
  79. 2:486X over the next 5 years okay so as we
  80. 2:51think about this overall I'd love to
  81. 2:53have you tell me a little bit about how
  82. 2:55you would approach assessing this
  83. 2:57question and in particular we need need
  84. 2:59to understand whether or not this 6X
  85. 3:02profitability growth is feasible okay
  86. 3:04great I think I understand the situation
  87. 3:06can I ask a couple clarifying questions
  88. 3:08sure absolutely awesome I imagine they
  89. 3:10have different business units like Al
  90. 3:12men soy oat any gaps in their portfolio
  91. 3:15that should be aware of not that it's
  92. 3:17relevant to the case currently gotcha
  93. 3:19and then finally just in terms of
  94. 3:23understanding does spco have any other
  95. 3:25specific acquisition thesis that I
  96. 3:27should be aware of any metrics that they
  97. 3:28want to hit or is just broad assessment
  98. 3:31get our opinion whether it's good or not
  99. 3:33you know that's a good question so
  100. 3:35mostly they're focused on whether or not
  101. 3:36they can achieve the profit okay but
  102. 3:39what's equally important is thinking
  103. 3:41about share and the trade-offs between
  104. 3:43the two of those okay awesome I think I
  105. 3:46understand the problem excited to get
  106. 3:47into it you might have to take a couple
  107. 3:48moments to structure my
  108. 3:58thoughts
  109. 4:03awesome so as I think through this
  110. 4:05problem of how to assess uh smilk from
  111. 4:08food Coast perspective and think through
  112. 4:10whether the profitability target is
  113. 4:12achievable there's really three buckets
  114. 4:14that I want to look into first is the
  115. 4:17alt uh milk Market itself great second
  116. 4:20is a deep dive into smilk and their
  117. 4:22internal operations perfect and then
  118. 4:24finally I have some other considerations
  119. 4:25and RIS that I want to look at Great
  120. 4:27before we jump into your framework can
  121. 4:29you tell me why you thought about these
  122. 4:30three as being the main buckets that you
  123. 4:32wanted to focus on for sure so I wanted
  124. 4:34to first start looking at the market
  125. 4:36because I think a core tenant of any
  126. 4:39good acquisition or investment is that
  127. 4:41the asset is positioned in a market that
  128. 4:43is favorable growing has Tailwinds and
  129. 4:46headwinds Etc then once we feel
  130. 4:49comfortable about that that's a large
  131. 4:51and growing Market smilk is well
  132. 4:52positioned within it making sure that
  133. 4:54smilk has everything that they need to
  134. 4:57to be able to succeed capture share grow
  135. 5:00Revenue decrease costs which will
  136. 5:02ultimately help us to improve
  137. 5:03profitability great and then finally
  138. 5:06these like other risks are
  139. 5:07considerations are more kind of deal
  140. 5:09specific in terms of you know how might
  141. 5:12we Finance it uh what is the balance
  142. 5:14sheet of Food Co look like can they
  143. 5:16bring on debt um because I think that
  144. 5:18will impact what the ROI could look like
  145. 5:20moving forward in terms of opportunity
  146. 5:23cost I know that there's zero datea on
  147. 5:25smilk right now but are there perhaps
  148. 5:27other ways that they could enter the
  149. 5:28market um should they do a joint venture
  150. 5:31with somebody should they just build it
  151. 5:32organically themselves or could there be
  152. 5:34a better Target and then finally with
  153. 5:36any acquisition I think making sure that
  154. 5:38we don't lose sight of culture to make
  155. 5:40sure that it'll fold in nicely and that
  156. 5:42that transition plan would go smoothly
  157. 5:44but unless there's any other questions
  158. 5:46on kind of how I've I've thought through
  159. 5:47this I think I want to start with the
  160. 5:49initial hypothesis that yes this asset
  161. 5:52would be a good acquisition for uh food
  162. 5:55Cod to make and that they will be able
  163. 5:57to achieve the The Profit Target
  164. 6:00of just remind myself 6X in in the next
  165. 6:035 years MH and so in order to start
  166. 6:04testing that we' really start to like
  167. 6:06looking at this first bucket in terms of
  168. 6:09what the overall alternative milk Market
  169. 6:11looks like and ideally Broken Out by
  170. 6:13segment perfect is that where you'd like
  171. 6:15to start yes it would be great and then
  172. 6:16after we look at that what are the most
  173. 6:18important elements within smilk So
  174. 6:20within smilk what I would love to
  175. 6:22understand is looking at their
  176. 6:25historical performance broken out
  177. 6:27ideally by business unit um the reason I
  178. 6:29want to look at that is to get a sense
  179. 6:32of how they've gotten to where they are
  180. 6:33today I know that they have doubled
  181. 6:36profit every year for the past three
  182. 6:37years which is really incredible growth
  183. 6:39right and obviously there's multiple
  184. 6:40ways that they could do that they could
  185. 6:42be gaining market share they could be
  186. 6:44introducing new products or they could
  187. 6:46be cutting cost or some combination of
  188. 6:48all of that and I think how they've
  189. 6:50gotten to where they are today will give
  190. 6:52us a good insight into what future
  191. 6:54growth opportunities they might have and
  192. 6:55help us to get a really good
  193. 6:56understanding of whether or not that 6X
  194. 6:58Target is achievable fantastic I like
  195. 7:00how you're thinking about it I also like
  196. 7:01how you're bringing it back to the
  197. 7:03objective around this 6X so let's start
  198. 7:05where you suggested okay and I have a
  199. 7:07slide here that gives you a picture of
  200. 7:09the market I would love for you to tell
  201. 7:11me what does this tell you about the
  202. 7:13Dynamics of the milk Market okay if I
  203. 7:16can just take a couple moments to orient
  204. 7:19myself so what I'm seeing is a chart of
  205. 7:24kind of the US milk sales over the past
  206. 7:2710 years forecasted uh into the future
  207. 7:29for 5 years from now and the first thing
  208. 7:31that immediately jumps out to me is you
  209. 7:33can see that the overall Market has been
  210. 7:35in Decline and forcasted going forward
  211. 7:38it's at best going to remain roughly
  212. 7:41flat that's right so from the overall
  213. 7:43perspective not great but what is
  214. 7:45exciting for smilk is when you do a deep
  215. 7:47dive into the alternative milk segment
  216. 7:49that is actually expected to grow and
  217. 7:52and quite considerably over the next 5
  218. 7:54years a low double digit ker is actually
  219. 7:56pretty exciting to me and so feeling
  220. 7:59feeling good about that and looking
  221. 8:01closer at the data row I'm seeing some
  222. 8:03numbers that we can manipulate in order
  223. 8:06to get a sense of exactly what the size
  224. 8:08of the alt milk Market is today and then
  225. 8:10what it's going to grow to five years
  226. 8:12from now which I think will be a good
  227. 8:13starting point to help us understand the
  228. 8:15feasibility of the 6X Target agree let's
  229. 8:17go ahead and do that okay so uh in order
  230. 8:20to combine these variables I'm thinking
  231. 8:21we first take the alt milk share uh
  232. 8:24today multiply that by the overall
  233. 8:26Market size which will give us the alt
  234. 8:27milk Market uh in dollar today and 5
  235. 8:30years from now putting some numbers 19
  236. 8:34billion is okay if I round that yes 19
  237. 8:36billion times
  238. 8:3911% that is roughly 2 billion 2.1
  239. 8:45billion so that is today and then in 5
  240. 8:50years we are going to uh
  241. 8:5419.2 billion time
  242. 8:5720% Which is 3
  243. 8:59.8 billion but I'm going to go ahead and
  244. 9:02round that to 4 billion so like I said
  245. 9:06um we now have a better sense of what
  246. 9:08might be achievable if schil just kind
  247. 9:09of maintains market share maintains
  248. 9:11status quo going forward it's exciting
  249. 9:13it's 2x um but it is a far cry from
  250. 9:17their 6X Target and so to update my
  251. 9:20hypothesis I still think that there is
  252. 9:22reason to believe that this would be a
  253. 9:24good acquisition for foodco however I'm
  254. 9:27more bearish about the achievability of
  255. 9:29the 6X profit Target in order to get a
  256. 9:31better sense of that achievability I
  257. 9:34would love to look at any internal
  258. 9:37financials that we have from smoke to
  259. 9:38see how they've grown over the past I'm
  260. 9:40so glad that you asked and and had us go
  261. 9:43there because I'd love to think a little
  262. 9:44bit about the feasibility of this share
  263. 9:46gain now that we've isolated that they
  264. 9:48will need to gain share to reach their
  265. 9:50targets potentially or other levers I'd
  266. 9:53love you to tell me a little bit about
  267. 9:54what this competitor Market view tells
  268. 9:57you about their ability to gain share
  269. 10:00okay just orienting myself quickly so
  270. 10:04what I'm seeing like right off the bat
  271. 10:07is not too long ago only a year and a
  272. 10:10half um there weren't that many players
  273. 10:12and smilk was still very ncent but over
  274. 10:16time smilk has moderately grown its
  275. 10:19market share seems like they've
  276. 10:21plateaued very recently and they are the
  277. 10:24smallest player in an ever increasing
  278. 10:26competitive and crowded Market correct
  279. 10:28and and then just interpreting uh the
  280. 10:31names here large snackco looks like the
  281. 10:33market leader which could potentially be
  282. 10:36not great for smoke if they're going up
  283. 10:38against somebody that is very well
  284. 10:40financed uh and very entrenched in the
  285. 10:43market and so uh from looking at this
  286. 10:47I'm feeling even better about the view
  287. 10:50that the 6X uh profit might not be
  288. 10:53achievable simply because I don't see an
  289. 10:57easy win here in order to gain share
  290. 11:00however I'm not going to give up um I
  291. 11:02think some things that could help them
  292. 11:04achieve that if any of these competitors
  293. 11:06are potentially acquisition targets and
  294. 11:08food co could do a quasi like roll up
  295. 11:11strategy that's great that could be a
  296. 11:13way um but uh what else would you need
  297. 11:16to know about smilk to gain confidence
  298. 11:19that they could gain share I think in
  299. 11:21order to to gain confidence about how
  300. 11:23they could gain share I want to know a
  301. 11:25couple of things one is I guess I would
  302. 11:29bucket this kind of external and
  303. 11:31internal um considerations externally I
  304. 11:34would love to know how customers view
  305. 11:36them are they differentiated in any way
  306. 11:39from a product standpoint or a
  307. 11:40capability standpoint such that they
  308. 11:42could steal share and then second um
  309. 11:45from the internal perspective I would
  310. 11:48love to know what products they offer
  311. 11:50today are there any untapped geographies
  312. 11:53that they're not in for example are
  313. 11:55there any products that competitors
  314. 11:56offer that they simply lack and then I
  315. 11:59know we're focusing on grocery but
  316. 12:00there's always opportunity for
  317. 12:02partnership there's always opportunity
  318. 12:03for um you know selling your brand
  319. 12:06outside of grocery stores like coffee
  320. 12:07shops um you know airport lounges Etc so
  321. 12:11that's great so to update my hypothesis
  322. 12:14I still think that this is a good asset
  323. 12:16so I feel good about um the acquisition
  324. 12:19thesis there however I'm increasingly
  325. 12:21bearish on the ability to hit that 6X uh
  326. 12:24rep or profitability increase over the
  327. 12:26next 5 years in order to feel more
  328. 12:29comfortable about that part I would love
  329. 12:32to look internally to smoke in terms of
  330. 12:35their financials to understand how
  331. 12:37they've grown and like you just
  332. 12:38suggested are there any opportunities
  333. 12:40that they could uh kind of untap
  334. 12:42potential to steal share that's great I
  335. 12:44think we're going to explore both the
  336. 12:46internal and the external that you
  337. 12:47mentioned so first let's go to the
  338. 12:49internal I have some data on the company
  339. 12:52okay could you first Orient me to what
  340. 12:54you see in terms of the data you do have
  341. 12:56and what you would need in order to
  342. 12:58answer this Sixx profit question so what
  343. 13:01I'm seeing like you said we have
  344. 13:03financial data for smilk broken out uh
  345. 13:06from their us business and their
  346. 13:08European business and looks like it's a
  347. 13:10little bit of a puzzle to solve in terms
  348. 13:13of uh some some blanks that we need to
  349. 13:14fill in love some logic games yeah love
  350. 13:17love some logic games and so what I'm
  351. 13:19seeing in terms of how to well just to
  352. 13:21react like very quickly to this it's
  353. 13:24interesting that the US business is only
  354. 13:27uh a quarter of overall profit
  355. 13:28profitability compared to the European
  356. 13:30business which is observation which is
  357. 13:32important because we're only focused on
  358. 13:33the US from food Coast perspective the
  359. 13:36second thing that sticks out to me is
  360. 13:38there's quite a a delta in terms of the
  361. 13:40margin between the two geographies and
  362. 13:43so you know to keep this on our radar
  363. 13:46moving forward would' love to understand
  364. 13:47why that Delta exists and if there's any
  365. 13:50way that we could potentially bring the
  366. 13:51US business up to up to Snuff with what
  367. 13:53they're seeing in Europe but to get to
  368. 13:55your question in terms of how to fill
  369. 13:58this chart out out what I'm seeing is we
  370. 14:01have Revenue today and we have the
  371. 14:03margin so we can back solve for this
  372. 14:06profit figure right here and then we
  373. 14:09know in the US what the market size is
  374. 14:11today we know what their share is so
  375. 14:13that'll give us this value and then same
  376. 14:16approach knowing the margin we can back
  377. 14:18calculate what profit is that'll leave
  378. 14:21this hole and then we can kind of fill
  379. 14:22in from there now before we do that
  380. 14:25going through that process what is it
  381. 14:27going to tell you about whether or not
  382. 14:29they can achieve that 6X profitability
  383. 14:31so what it's going to tell me is it's
  384. 14:32going to tell me what profit is today
  385. 14:35and then we know what profit is today we
  386. 14:38know what the market is expected to be 5
  387. 14:40years from now what their market share
  388. 14:42is expected so that'll give us Revenue
  389. 14:45right then if we multiply by a margin
  390. 14:47that'll give us what if everything goes
  391. 14:49as we're forecasting no changes in
  392. 14:51margin what profitability would be right
  393. 14:53just looking at these numbers if we do
  394. 14:56that like we said from before with no
  395. 14:58material change and share they're only
  396. 15:00expected to gain two points that's not
  397. 15:02going to close the gap unless we see
  398. 15:03some sort of margin increase like that's
  399. 15:06also not going to close the gap but I do
  400. 15:09think that there are still ways that we
  401. 15:12could achieve this one would be if we
  402. 15:14could increase the profitability of the
  403. 15:17US segment to get to Europe that'll get
  404. 15:19us some of the way my intuition is not
  405. 15:20going to get us all the way but there
  406. 15:23also could be some margin Improvement
  407. 15:25that you would see from synergies
  408. 15:26rolling into Food Co I would expect that
  409. 15:28distribution Logistics Etc would get
  410. 15:30cheaper also purchasing power of a
  411. 15:33really large company could help get the
  412. 15:35cost of goods down for these different
  413. 15:37types of milks materials Plastics
  414. 15:40Etc um and so I'm kind of imagining a
  415. 15:45sensitivity Table to where if like if we
  416. 15:49know what the market would need to would
  417. 15:52look like in the future there's some
  418. 15:54implied share that they would have to
  419. 15:55get to assuming profitability Remains
  420. 15:57the Same and and then vice versa if we
  421. 15:59assume no share gain but uh calculate
  422. 16:03what profitability the margin would need
  423. 16:05to increase to hit the target that'll
  424. 16:07help us understand the extremes of the
  425. 16:09sensitivity table and then help us get a
  426. 16:11better sense of could reality exist
  427. 16:13somewhere in the middle great and bound
  428. 16:15the potential outcomes I really like how
  429. 16:17you're thinking about this especially
  430. 16:18because there's a lot of things that
  431. 16:20could go right to reduce costs overall
  432. 16:22and help them hit their margin targets
  433. 16:24how are you thinking about the
  434. 16:25trade-offs though some of the headwinds
  435. 16:27they might face great fall out there are
  436. 16:29natural tensions between trying to
  437. 16:31increase market share and thus increase
  438. 16:33Revenue as well at the same time as
  439. 16:35trying to decrease costs on one hand you
  440. 16:39usually need to invest for growth but on
  441. 16:41the latter situation of trying to
  442. 16:43improve profitability that often times
  443. 16:45comes with finding places to get better
  444. 16:49more optimized with your budget and
  445. 16:50maybe requires less investment um just
  446. 16:53to protect that that margin yeah so glad
  447. 16:55you're acknowledging that why don't we
  448. 16:56go ahead and do the exercise us
  449. 16:58suggested so that we can really get our
  450. 17:00arms around what the real potential
  451. 17:02might be to increase profit is it okay
  452. 17:04if I just write on please do so um
  453. 17:08revenue is 320 million profit margin is
  454. 17:1015% so to arrive at this profit figure
  455. 17:13is just 320 million time 15% and that
  456. 17:16will give us the dollar value so 10% of
  457. 17:19320 is 32 half of that is 16 which means
  458. 17:22that this is 48 million great um what I
  459. 17:27said earlier for the US business we know
  460. 17:30that the market is 2 billion today and
  461. 17:34they have six% share so that is 120
  462. 17:41million which means 320 - 120 is 200
  463. 17:48million we know that if this is 10% um
  464. 17:5110% of 120 is 12 and then 18% of 200
  465. 17:58is 36 million which checks because 12 +
  466. 18:0236 is 48 so now that we have all of this
  467. 18:05mapped out we can put some specific
  468. 18:08numbers to what their actual profit
  469. 18:09Target is great and so if they are
  470. 18:12at 12 million
  471. 18:16today and they need to 6X that means
  472. 18:19they need to get to 72 million mhm and
  473. 18:23so like I was saying in terms of
  474. 18:25understanding how they might get there
  475. 18:27we know that that there's going to be
  476. 18:29some latent growth assuming they hit
  477. 18:32their market share targets and the
  478. 18:33market grows like we expected right so I
  479. 18:35can figure out what that contribution
  480. 18:36would be and then the Delta would
  481. 18:38essentially come from the sensitivity
  482. 18:41table that I outlined that's plan great
  483. 18:43okay let's go ahead and do it so um we
  484. 18:45know that go ahead and transfer over
  485. 18:48here Market 5 years from now is going to
  486. 18:52be 4 billion and they're going to have
  487. 18:568% share
  488. 18:59which translates
  489. 19:01to $320 million in in revenue and then
  490. 19:07so just from that if they keep the 10%
  491. 19:12profitability margin that means that
  492. 19:14they are getting to 32 million so that's
  493. 19:17good like we we've already talked about
  494. 19:19but it is still cry $40 million short we
  495. 19:23we need to more than double this and so
  496. 19:25that let's go find how we might do that
  497. 19:27and so from the revenue marketshare
  498. 19:31perspective uh and then looking at it
  499. 19:33from the
  500. 19:35profitability
  501. 19:39perspective so when I look at how much
  502. 19:44they would need to achieve we'll we'll
  503. 19:46solve backwards here so we know that
  504. 19:48they need 72 million if we are going to
  505. 19:51assume the 10% profitability mhm that's
  506. 19:56simple math we know that they need to to
  507. 19:58grow um to $720 million of Revenue right
  508. 20:03at that profit level at that profit
  509. 20:05level that seems like quite a bit um if
  510. 20:08we go ahead and figure out what that
  511. 20:10implied market share would be uh very
  512. 20:13quickly so we know it's a
  513. 20:174072 so that would be
  514. 20:20one 4 3 2 18
  515. 20:2518% market share MH
  516. 20:28which is triple from what they are at
  517. 20:31today um which is a lot to gain
  518. 20:33especially since they plateaued out over
  519. 20:35time did so again I think we're going to
  520. 20:37need to dip into this profitability
  521. 20:39perspective yes and so where I'm
  522. 20:41thinking about here is we'll assume that
  523. 20:44they maintain share uh that we're
  524. 20:46forecasting of 8% so we know that
  525. 20:48they'll be starting with
  526. 20:49$320 million of Topline mhm again we're
  527. 20:53trying to solve for this 72 million and
  528. 20:56so now it is just figuring out what the
  529. 20:58margin is and if I do this it looks like
  530. 21:04it is just higher than
  531. 21:0920% but to put some math to
  532. 21:14it
  533. 21:1622 2 64 and that leaves us eight
  534. 21:22so it's like 22 to 23% great so 23%
  535. 21:29again that's big but if we look at the
  536. 21:31European business as potentially where
  537. 21:33we might get to so upper bounds 18% call
  538. 21:37it 20 maybe if we get some synergies
  539. 21:39from foodco I think we need to do some
  540. 21:40further analysis to see if we can unlock
  541. 21:43fully unlock this 23% but I'm now
  542. 21:46getting a little less bearish than I was
  543. 21:48originally so I'm going to update my
  544. 21:49hypothesis that this is a good asset I
  545. 21:52like the market that they're in um I
  546. 21:54like the growth potential from the
  547. 21:57profitability perspective perspective
  548. 21:58the the lever that exists particularly
  549. 22:00here in terms of matching the European
  550. 22:01business um and I think a combination of
  551. 22:04these two could make the 6X profit uh
  552. 22:07Target achievable we might not get all
  553. 22:09the way there but I think we might get
  554. 22:11pretty close which I think would be
  555. 22:12exciting to Fuko right could still make
  556. 22:14it attractive and and I like your
  557. 22:16sensitivity because you know you don't
  558. 22:17need it to be on either end of these
  559. 22:19extremes but we are asking for a lot to
  560. 22:21go right share gain and margin so why
  561. 22:24don't we take a look at some of the
  562. 22:25external factors that you had mentioned
  563. 22:28um so I'd love you to take a look at
  564. 22:29this and tell me what it it tells you
  565. 22:31about the competitive market okay so
  566. 22:34there's a lot of information here if I
  567. 22:36could just Orient myself quickly so what
  568. 22:40I'm seeing is smil compared to um looks
  569. 22:43like a lot of the major players from
  570. 22:45this early market share map that we
  571. 22:47looked at earlier and what I'm seeing is
  572. 22:49first validating that you know smilk is
  573. 22:52that where they are today they a smaller
  574. 22:53player in the market and then you know
  575. 22:56alt milk 5 and large snackco are kind of
  576. 22:58the Behemoth right which it's exciting
  577. 23:00that in the last 18 months they've been
  578. 23:01able to do this again I think points to
  579. 23:04the attractiveness of this Market but
  580. 23:06also paints a potentially negative light
  581. 23:08from the competitive landscape I love
  582. 23:10seeing for smilk some of the word
  583. 23:12associations here fun delicious premium
  584. 23:15like that sounds like a really good
  585. 23:16brand that could be you know kind of the
  586. 23:19core tenants and assets that we could
  587. 23:20leverage for for future growth again
  588. 23:23this High customer satisfaction I think
  589. 23:25is only solidifying that this might be
  590. 23:28bad right now the fact that customer
  591. 23:30awareness is low but if we're starting
  592. 23:32from a low base I think there's
  593. 23:33opportunity that we could use to
  594. 23:35increase um that going forward which
  595. 23:37would help us increase sales help us
  596. 23:39improve the market share that we have
  597. 23:42and then the pricing difference is quite
  598. 23:45interesting as well it looks like we're
  599. 23:47roughly kind of middle of the road
  600. 23:50whereas you know there might be some
  601. 23:52upward Potential from pricing that we
  602. 23:55see um you know alt milk has gained a
  603. 23:57ton of share yes people do view it as
  604. 24:00overpriced but um you know there might
  605. 24:03maybe we don't go all the way to $6 but
  606. 24:05it I think there might be some room
  607. 24:07especially because we're seeing as
  608. 24:08premium and that's not a word
  609. 24:10association I see here so maybe the
  610. 24:11willingness to pay for a premium product
  611. 24:14should be there and so again I think
  612. 24:17going back to the math that we just did
  613. 24:18in terms of how to steal market share
  614. 24:21this could be an Avenue and pricing is
  615. 24:23really exciting because it is a lever
  616. 24:25that is not intention it flows to the
  617. 24:28bottom line and so um with this again
  618. 24:31hypothesis I feel even better about this
  619. 24:33asset after seeing this table and I also
  620. 24:35feel a little bit better about the
  621. 24:36profitability target do we have
  622. 24:38information on customers willingness to
  623. 24:40pay or the potential to run a pilot in
  624. 24:42terms of to get some data of How High we
  625. 24:44could take prices without damaging
  626. 24:46volume that's a great question
  627. 24:48absolutely something that we would do
  628. 24:49and did do Under the course of this but
  629. 24:52one thing that I you know would love to
  630. 24:53know quickly is as we think about
  631. 24:55deepening our insights and analysis for
  632. 24:58Food Co and we know that they are
  633. 25:00fantastic in terms of building platforms
  634. 25:02and acquiring and I think it was a
  635. 25:04comment that you made earlier as well
  636. 25:05that they could start to think about
  637. 25:07that where do you think that they could
  638. 25:09go here in terms of their their overall
  639. 25:11portfolio yeah so I I think it was one
  640. 25:14of the when we were looking at the
  641. 25:15market share map like potentially a
  642. 25:17quasi rollup uh strategy and if I if I
  643. 25:19go back to the math that we calculated
  644. 25:21earlier 18% total market share would
  645. 25:23help him get to that Top Line and
  646. 25:25looking at this um you know alt milk one
  647. 25:29adding on would help us get there and
  648. 25:30then these other three targets if we
  649. 25:33were to uh incorporate them into food
  650. 25:35Coast portfolio that would help us to
  651. 25:37reach the Target and exceed it obviously
  652. 25:40becomes the question of are they viable
  653. 25:42are they up for sale um and again all of
  654. 25:44the other considerations that we
  655. 25:45outlined in the original framework of
  656. 25:47like culture um how we would Finance it
  657. 25:49Etc come com to mind and if they are you
  658. 25:52know adding to their profit profile
  659. 25:55overall that great point cuz we don't
  660. 25:58know what the the profitability of these
  661. 25:59companies look like 20% share gain in
  662. 26:01the last 18 months I imagine that came
  663. 26:03with quite a bit investment and maybe
  664. 26:04their margins look very negative very
  665. 26:06likely well this has been fantastic I'd
  666. 26:09love to take a step back and and just
  667. 26:11ask you at this point knowing we don't
  668. 26:13have all the information that we
  669. 26:14typically would have where where is your
  670. 26:16recommendation and your hypothesis at
  671. 26:18this point my recommendation to foodco
  672. 26:20is that they acquire smk for the
  673. 26:22following reasons one I think the
  674. 26:24alternative milk Market segment is
  675. 26:26exciting expected to double over the
  676. 26:28next 5 years and second I think smilk in
  677. 26:30terms of the assets that it is bringing
  678. 26:32is a great platform to be able to grow
  679. 26:36and get close to the 6X profitability
  680. 26:39Target customers love it it's seen as a
  681. 26:41premium brand and there's a lot of
  682. 26:42potential that we could tap into there
  683. 26:44especially if we consider synergies that
  684. 26:46food co will bring however this
  685. 26:48recommendation is not without risk like
  686. 26:51I alluded to the 6X profitability Target
  687. 26:53is quite ambitious we've run the numbers
  688. 26:56and there's going to need to be both
  689. 26:58Market um share gain as well as
  690. 27:01improving profitability in order to hit
  691. 27:04that Target but understanding we might
  692. 27:06not get all the way there I would love
  693. 27:08to for next steps start looking into
  694. 27:11different pricing strategies that we
  695. 27:13could employ uh in order to prove
  696. 27:15Revenue improve market share moving
  697. 27:17forward and then there's always the uh
  698. 27:20ability to negotiate with smilk on the
  699. 27:22acquisition price understanding that
  700. 27:23their expectations might not be grounded
  701. 27:25fully in reality that's fantastic I'm I
  702. 27:28your rationale makes so much sense and
  703. 27:30I'm so glad that you've highlighted some
  704. 27:32of the key considerations and risks
  705. 27:34especially around pricing because to
  706. 27:36give you a little bit of insight this
  707. 27:38project was based off of a real case and
  708. 27:41there wasn't a willingness to pay that
  709. 27:42higher price so made that profit Target
  710. 27:44even more tricky but you you absolutely
  711. 27:47targeted the right next steps here for
  712. 27:50this project awesome so very nicely done
  713. 27:53and it was wonderful to meet you yeah
  714. 27:54thank you for working through the cas me
  715. 27:55take care I hope this video is giving
  716. 27:57you valuable insights into the mindset
  717. 27:59the preparation and the approach you can
  718. 28:00take to case interviews I'd also
  719. 28:02encourage you to take advantage of the
  720. 28:03tips and tricks video that you can find
  721. 28:05on our YouTube channel or our website
  722. 28:07and there's a lot of other resources at
  723. 28:08bane.com careers to help you prepare for
  724. 28:11a successful interview
  725. 28:12[Music]
  726. 28:16process

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