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Preface
Consulting Case Book, ConQuest. © 2021, ConQuest All rights reserved. Third Edition: August 2021. Authors: Aditya Agarwal, Anurag Kumar Thakur, Avni Dhingra, Sanyam Jain, Satyam Goyal, Saurabh Aggarwal, Suraj Agarwal, Vidhi Mundhra
No part of this document may be reproduced or transmitted in part or in full, in any form or by any means electronic or mechanical, including photocopy, recording, transcription or any information storage and retrieval system without full and formal approval from ConQuest, IIM Shillong.
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2021-22
Acknowledgement
The third edition of Consulting Case Book by ConQuest – the Consulting and Strategy club of IIM Shillong, is the outcome of year-round hard work by all the members. But such a broad idea starts with a vision, the vision was inculcated in us by our immediate seniors, the ConQuest 2019-21 team consisting of Ankita Mittal, Asawari Joshi, Dhruv Anand, Kanika Gupta, Raksha Shetty, Summit Gupta and Yash Jain. We would like to extend our sincere gratitude to Prof. Debasisha Mishra and Prof. Subhadip Mukherjee for their constant guidance as our faculty mentors. We would also like to thank the PGP batches of 2019-21 and 2020-22, for sharing their valuable interview experiences and helping us make the case transcripts as close to reality as possible. We would like to convey our special thanks to Akshay Krishnan, Ankan Dutta, Akash Pandey, Jhansi Ravali Kanduri, Nihar Mehta, Soham Chaudhuri and Vaidehi Srivastava for the extensive support they provided with the content of the Consulting Case Book. We would also like to thank all of our alumni and readers for all their suggestions and feedback.
Team ConQuest 2020-22
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2021-22
Editor’s Desk ConQuest, the Consulting and Strategy Club of IIM Shillong is delighted to present the Consulting Case Book, your ultimate guide to prepare for and crack your Consulting interviews. The third edition of the Consulting Case Book looks to build on the success of the past editions and incorporate the feedbacks received regarding them. The document requires year-round hard work with an aim to provide a holistic view to the readers about the types of cases that usually show up in a consulting interview and also equip them with resources. It contains a collection of real-life interview experiences of candidates with some of the leading consulting firms. These interview experiences were collected, analyzed and sanitized. We also have provided all the major frameworks that help the students in analyzing and successfully cracking any case. During our interaction with the successful candidates, we realized that another key factor of success is to have an overview of industries, particularly the knowledge of key elements like segments, growth drivers, major players and government policies. Therefore, we decided to dedicate an entire section to analysis of 10 industries that most frequently show up in interviews. The domain knowledge about the career trajectory and organizational hierarchy is really important to excel in any interview. Hence, we have provided a Consulting Primer to cover you on this base. This will also help to alleviate some of the grey area associated with consulting domain. Lastly, in any interview it is really important to know your way around domain related terminology that are used, you can find a list of all such major terms in our Glossary section. At IIM Shillong, the vision of greater good is inculcated in students since day one, we believe that the benefits of the work put in by our team should not be bound by campus. We hope anyone who reads the case book finds it insightful. Wishing you the best! Team ConQuest
2020-22 ConQuest, IIM Shillong
2021-22
Contents S. No
Particulars
Page No
S. No
Particulars
Page No
3(a)
Aviation Industry
18
1-2
3(b)
Automobile Industry
19
Pros and Cons of Consulting
3
3(c)
Retail Industry
20
1(c)
Roles in Consulting & Career Ahead
4
3(d)
Banking Industry
21
1(d)
Hiring Process & Skills Required
5
3(e)
Healthcare Industry
22
2
Business Frameworks
3(f)
FMCG Industry
23
2(a)
PESTEL Analysis & Example
6-7
3(g)
IT and ITes Industry
24
2(b)
Porter’s Five Forces & Example
8-9
3(h)
E-Commerce Industry
25
2(c)
BCG Matrix & Example
10-11
3(i)
Oil and Gas Industry
26
2(d) 5
SWOT Analysis & Example Case Interviews
12-13
3(j)
Telecom Industry
27
2(e)
5 C’s Analysis & Example
14-15
4
Case Frameworks
2(f)
Business Model Canvas & Example
16-17
4(a)
Profitability Framework
28
3
Industry Snapshot
4(b)
New Market Entry Framework
29
1
Consulting Primer
1(a)
Introduction to Consulting
1(b)
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2021-22
Contents S. No
Particulars
Page No
S. No
Particulars
Page No
4(c)
Pricing Framework
30
6(a)
Guesstimate Data Points
4(d)
Mergers & Acquisitions Framework
31
7
Guesstimates
4(e)
Unconventional Cases
32
7(a)
Number of movie screens in Delhi
53
5
Case Interviews
7(b)
No. of Athletics Gym customers for nutrition food
54
5(a)
Water Purifying Powder | Market Entry
33-35
7(c)
Non- transport revenue for a Ferry Transport Co.
55
5(b)
Snack & Beverages Co. | Market Share Decline
36-38
7(d)
No. of calls received by customer care in Delhi
56
5(c)
Furniture E-Commerce Co. | Unconventional
39-40
7(e)
Household demand for Natural Gas in India
57
5(d)
North Western State Transport | Profitability
41-42
7(f)
Number of Airplanes flying out of Delhi
58
5(e)
Travel Aggregator | Social Impact
43-44
7(g)
Annual Market Size of Diapers in India
59
5(f)
Beer Manufacturing Co. | Market Sizing
45-47
7(h)
Demand for Televisions in India in a year
60
7(i)
No. of Ketchup sachet sold by a McDonalds store
61
5(g)
Travel Co. BPO | Crisis Management
48-49
7(j)
No. of Household broadband connections in India
62
5(h)
ATM Business | Profitability
50-51
8
Consulting Glossary
6
Data Sheet
8(a)
Glossary
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63-76
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Introduction to Consulting Types of Consulting
What is Consulting? Consulting is a process of helping clients solve a business problem
Strategy Consulting: An upper level decision making showing broader picture, helps in M&A decisions, market entry or exit, etc.
Problem Solvers are what we call Consultants Consultants use various approaches to help the business, it could be in the form of primary and secondary research, logic and business sense and provide an insight on how to approach and solve a business problem Consultants work across a wide range of roles, projects, industries, sectors, geographies to analyse information, and help the client to achieve desired goal It requires both analytical and people skills. The consulting process involves understanding and comprehending a client’s problem, using tools like Excel and PPT to analyse and then present in front of client
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Financial Consulting: Providing information and advice on investment strategies, audits, taxes, actuarial, valuation and risk management, etc.
IT Consulting: Tech consulting, IT advisory, business technology, cyber security, data analytics, designing, advising best use of tech
Operation Consulting: Improve operational efficiency, supply chain, distribution. It includes HR, Marketing operations too
Human Resource Consulting: Employee Management, compensation and recruitment, outsourcing roles, employee satisfaction
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Page 1
Introduction to Consulting Although there are cross domains in which consulting companies operates. Of the large pool of firms these are few ones:
Management and Strategy Consulting
Technology Consulting
Finance Consulting
Operation Consulting
Human Resource Consulting
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Health care Consulting
2021-22
Social Impact Consulting
Page 2
Pros and Cons of Consulting
Cons of Consulting
Pros of Consulting Networking:
Hard work:
• Working with multiple teams • Interaction with several different stakeholders • Solving a problem requires inputs from people working in several domains, good number of connections in a smaller amount of time
Diversity in work: • Exposure in several industry/fields • Type of projects like operations, entry/exit, growth strategy
Steep Learning Curve:
Travel:
• Working on complex business problems • Developing strong analytical and communication skills
Frequent travelling within smaller time span affects the efficiency and could be stressful for anyone
Better exit opportunities:
Problems like staying away from family and travelling to remote locations are frequent issues that come while working in this domain
• More leadership position • VC • Policy making
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When you work in the consulting domain, it generally entails: • Long working hours-can span more than 12 hours per day • High Pressure environment with stricter deadlines • Diversified project means that you have to put an effort in learning while doing job
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Roles in Consulting and Career Ahead Roles in Consulting
Career Progression in Consulting
Roles offered in B-schools
Front End People: • Directly in touch with clients • Have the responsibility to present the work done by the team Partner Back End Support Team:
Director
• Specialization in specific skills like domain knowledge, data analytics, etc. Principal Manager
Knowledge Team: • Release papers, sectoral issues, general knowledge and research • Monitor economic and other macro factors and provide inputs to firm Support Staff:
Associate Better client interaction, deriving insights from in depth analysis, etc.
• Create stuff like PPTs, Videos, Promotional activities etc.
Expert Support:
Analyst Data collection, documentation, problem solving, etc.
• Industry experts like food, automobile, etc.
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Consultant Building corporate strategy like restructuring, business assessment, etc.
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Page 4
Hiring Process and Skills Required Hiring Process
What do companies look for?
CV Shortlist
Soft Skills:
Case Interview: • Candidate will be given a case problem, guesstimates, etc. • It judges verbal, quant, business, communication skills of the candidate • Books and Mock Interviews are the way to prepare
• Good communication skills • Team work • Generally, in interviews asking right questions reflect these abilities • Participation in extra-curricular activities like sports, shows team work
Fit Interview: Practicality and effectiveness:
• Matching candidates personality, skills, with that of firm • Leadership and other soft skills are measured
Modularity: Can you break the problem into smaller modules which could be easily understood and helps in solving the problem
Hiring Decision
Feasibility: Are you making assumptions which are making sense? - like assuming there are 10 states in India, only 10 universities in the country, doesn’t bode well in front of interviewer
CV and Cover Letter tips: • Should show your leadership skills • Ability to work in diverse teams • Quick learning ability
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Page 5
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PESTEL ANALYSIS To understand the Macro environment in which the industry is situated in terms of Six major factors that impact the industry. Each of these factors has the potential to impact the firm and its competitive environment
Environmental Factors Weather, climate change and their associated factors. These factors, impact industries such as insurance, farming, tourism, energy productions, etc., Political Factors: Public Policies, Tax, Fiscal Policy, Tariffs, Political Climate, foreign direct investment policy, etc.
Technical Factors: Technical changes and developments, genetic engineering, nanotechnology, patents and copyrights law in these areas, etc.
P
T
E E
S L
Socio-culture Factors: Societal values, attitudes, culture, lifestyle, demographic factors, etc.
Legal Factors: Laws and regulations complied by the company like labor laws, antitrust laws, health and safety. Other laws that impact the firm directly or indirectly
Economic Factors Interest rates, Exchanges, inflation, unemployment rates, growth rate, per capita consumptions. Also, includes market for stocks and bonds, consumer confidence, interest rates, etc.
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PESTEL ANALYSIS - ITC Example To understand the Macro environment in which the industry is situated in terms of Six major factors that impact the industry. Each of these factors has the potential to impact the firm and its competitive environment
Environmental Factors Increased rules and regulations in the packaging, operations of the FMCG industry Water reusage facilities Rain water harvesting and treatment facilities Political Factors: High taxation in Cigarettes Advertisement Ban on Cigarettes 100% FDI allowed in Food Processing Production linked scheme in FMCG sector Technical Factors: E-Choupal 4.0 to target Agri-tech startups Growth in adoption of Digital Supply chain Operational, Logistic efficiency in manufacturing facilities
P
E
S
T
E
L
Socio-culture Factors: Increased Consumption of packaged foods Increased Awareness for ill-effects of tobacco Status symbol works in favour of ITC Hotels
Legal Factors: Cigarettes are highly legalized and most debatable sector in country Health and safety issues in the business
Economic Factors India among the top 3 tobacco producers in world, 77% of ITC in Cigarettes in India 20,000 employees with indirect employment to 5 Million employees FMCG is 4rth largest sector in India
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Page 7
Porter’s Five Forces To analyze the competitive market forces and the industry landscape. It helps determine whether the particular industry or a company is attractive.
Suppliers power
Barriers to entry • • • •
• • • •
Economies of scale Legal or regulatory barriers Capital requirements Cost advantage ( i.e. unique access to raw materials) Government policy Strong brand identity Access to distribution channels and shelf space Trade Policies
Intensity of rivalry • • • • •
• • •
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Shorter supply of supplier’s product or services Differentiation of inputs or presence of substitute inputs Switching costs of suppliers Cost relative to total purchases in the industry Industry members do not account for big fraction of supplier’s sale Suppliers concentration
• • • • • •
Industry growth Product differentiation Low switching cost Fixed costs/value added Brand identity
• • • •
Excess Production Capacity Diversity of competitors Corporate stakes High Exit barriers
Threat of substitutes Relative price performance of substitutes Switching costs Buyer propensity to substitute
2021-22
Buyers power • • • • • • • • •
Buyer are fewer in numbers as compared to manufacturers Buyer purchase volume Lower switching costs Buyer high information Substitute products Less differentiation among products available Brand identity impact on quality/performance Buyer profits Decision maker’s incentives
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Porter’s Five Forces- ITC Example To analyze the competitive market forces and the industry landscape. It helps determine whether the particular industry or a company is attractive.
Suppliers power- Low
Barriers to entry- High •
• •
•
Market filled with brands like HUL, P&G, ITC which have strong brand image and hence anyone coming from outside has huge disadvantage Sector requires massive capital investments Entry into tobacco is very difficult due to high regulations as well as raising capital is difficult to increased awareness in the sector Industry works on distributor model and hence quality distribution channel is very difficult to achieve
• • • •
Buyers power- Medium to High •
• Intensity of rivalry- High • Enough varieties and production differentiation available in the • market • Strong R&D, marketing strategies, adopted by the rivals
• • •
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Less concentration of suppliers Direct distribution has reduced bargaining power of supplier Switching costs are low since product differentiation is low, ITC uses standardized raw materials for production Plenty of suppliers available for the same type of materials
to gain market share Substitutes available for each and every product in each category
•
•
Easy to switch between products in FMCG category Strong brand image in Cigarettes, Aashirvaad Atta, Classmate, Savlon, etc. Above brands run on customer loyalty and hence brand runs on premium in these segments Market potential of the FMCG and tobacco business is higher and hence plenty of customer available
Threat of substitutes- High Herbal products from Himalaya, Patanjali and even from HUL, P&G, etc. ITC hotels – Oberoi Groups, Leela hotels, Taj hotels Tobacco- Kothari products, Godfrey Phillips, VST industry, Golden Tobacco company
2021-22
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BCG Matrix To analyze the competitive market forces and the industry landscape. It helps determine whether the particular industry or a company is attractive.
High
Market Share Growth
? • • •
STAR
QUESTION MARK
High Growth and Low market share products These are generally new products These products could be invested or let go, depend upon future prospects
• •
DOG • • •
High growth high market share products Companies should invest heavily in these products
$
Low growth low market share products These products are considered to be failures Hence companies could either reposition it or stop investing in them
• • •
CASH COW
Low growth high market share products They bring in cash To fund investment in stars
Low
High Current Market Share
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BCG Matrix – ITC Example To analyze the competitive market forces and the industry landscape. It helps determine whether the particular industry or a company is attractive.
High
Market Share Growth
? • • • •
STAR
QUESTION MARK • • •
FMCG Food Processing Personal Care Lifestyle
DOG •
Hotels Agri- Business Paperboard and Packaging Products
$
Infotech
• •
CASH COW
Cigarettes Tobacco Products
Low
High Current Market Share
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Page 11
SWOT Analysis
Internal (Attribute of environment)
Examines the strengths and weakness of the organization. This is basically the summary of the analysis that has been done before.
Helpful
Harmful
Strength
Weakness
• Internal factors that gives the firm an edge in the industry • It could be brand reputation, economies of scale, knowledge skills, etc.
• Internal factors that are proving to be a weak link in the firm’s competitiveness in the industry • It could be high attrition rates, lesser returns, etc.
SWOT External (Attribute of environment)
Opportunities
Threat
• Any external factors or conditions that are favourable to organization for achieving goals and its missions • It could be growth opportunities, in the form of organic or inorganic growth
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• Any external factor that might not favour the company’s growth or profitability • It could be newer legislations, restrictions, etc.
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SWOT Analysis – ITC Example
Internal (Attribute of environment)
Examines the strengths and weakness of the organization. This is basically the summary of the analysis that has been done before
• • • • •
Helpful
Harmful
Strength
Weakness
Strong Brand image in the cigarettes, FMCG, hotel sector Well diversified range of product and services Increasing year on year revenues Company with low debt High CSR presence
• Highly depend upon on tobacco segment despite foraying in several segment. • Brand is still associated with the cigarette business • Hotel, FMCG business in lot of pressure due to current times
SWOT External (Attribute of environment)
Opportunities
Threat
• Growth opportunities due to acquisitions like Savlon from J&J, B Natural from Balan Natural Foods • Increasing purchasing power of middle class in India provides growth opportunities in FMCG, Hotel sector • Rising consumptions in rural segment • Growth in hygiene, personal care and beauty products
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• Increasing competition in hotel due to entry of foreign players in market • Increasing rules and regulations in tobacco and packaging business • Intense competition in FMCG sector and with 100% FDI policy, intensity is going to increase only
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Five C’s
• • • • •
1
2
3
4
5
Company
Competition
Customer
Collaborator
Context
What is the business Growth drivers Segments Business Model Recent Trends
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• • • •
Major Players Market share Major competencies Value proposition
• • • • •
Demographics Customer Attitude Customer Segmentation Brand image Characteristics of product
2021-22
• How robust the company supply chain is ? • Upstream and downstream suppliers
• Landscape of business operations
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Five C’s - ITC Example
1
2
3
4
5
Company
Competition
Customer
Collaborator
Context
• Majorly operates in Cigarette, FMCG, Hotel, stationary, Agri product, Incense sticks, etc. • Increase in disposable incomes, brand image, operational efficiency are few of the growth drivers for the company • Herbal product, nicotine products, holiday package
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• HUL, Taj Hotels, Godfrey, etc. are few of many competitors • Hindustan Unilever, Colgate Palmolive, Britannia are the major players in these segments
• Trust is built in Aashirvaad atta, customer loyalty in Gold Flake, etc. • Target segment from 15yrs in baby care products • Strong Brand Image
2021-22
• Company is reducing its dependence upon limited suppliers by diversifying • Going for local procurement to maintain continuity in the supply • 20+ distribution centres PAN India • 25,000 employees, 60+ locations for material procurement
This is majorly what we had done in the PESTEL analysis: • Political factors • Environmental Factors, • Socio-Economic Factors • Technological Factors • Economical Factors • Legal Environment
Page 15
Business Model Canvas It is basically a template to understand the business model of the firm.
Key Partners
• What are the key partners that motivates them and supports them in their business • Who are our key suppliers • What are the materials we are acquiring from them
Key Activities
• What are the activities you do everyday to run the organization
Value Propositions
• What are the product and services offered by the company
Key Resources
• What are the customer segments which are targeted for our product and services
• What are the channels through which we are communicating with the customers
Revenue Streams
• What is the cost structure of the company: is it fixed or variable? • What are the major cost consuming activities which are resources
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• How does this show up and how do they maintain relationships
Customer Segments
Channels
• What are the key resources consumed for the product, manufacturing and daily operations of the company
Cost Structure
Customer Relationship
• Major and minor products and services through which firm is earning revenues
2021-22
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Business Model Canvas – ITC Example It is basically a template to understand the business model of the firm.
Key Partners • Major Joint Partners: ITC Essentra Ltd, Gujrat Hotels, International House Ltd, • Subsidiaries- ITC infotech, Russell Credit LTD, etc. • Investors • Suppliers • Distributors • Customers • Employees
Cost Structure
Key Activities • Product development • Marketing and promotional activities • R&D activities • CSR activities Key Resources • Tangible resourcesFinancial, intellectual, raw material like wheat, paper, tobacco, etc. • Intangible- Human Resources, skills, etc.
Value Propositions • Hotel business- ITC hotel • FMCG- Foods, Personal care, education and stationary, Lifestyle retailing, agarbattis, etc. • Agri- Commodities and services, e-choupal, ITC analytics • ITC brand world • Information Technology
• • • •
Marketing Campaigns Advertisements Customer Safety CSR activities
Customer Segments
• B2B Customers • Age group: 5-60 years • Location: PAN IndiaRural, semi-urban, urban • Gender: Men, Women
Channels • Distributions networks • ITC app • Retail Stores
Revenue Streams
Cost of raw materials Employee benefit expenses Stock- in trade purchase Finance Cost Depreciation cost
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Customer Relationship
Revenue from operations: Cigarette business Other FMCG business Agri Business Hotel Business Paper & Packaging business
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Aviation Industry Value Chain Inbound
Operations
Market Share
Outbound
Marketing
Services
Go Air Air 8.90% Indi 10.20% a
Spice • • • • •
Aircraft Lease Fuel Route Selection Facilities Planning Flight, Support Crew
• • • •
Ticket, Gate counter Aircraft operations In-flight services Baggage and cargo handling
• •
Luggage delivery Cab and hotel reservation
Infrastructure development
GIFT City
M&A activities
Growth
$ 120 bn investment in airport infrastructure
Advantage for Aviation Sector
The significant increase in M&A activities like Etihad-Jet, TataSingapore Airlines, Tata-Air Asia
Revenue Passenger Service and inflight sales
Cost
Employee Cost
Tour and Packages
Fuel and Maintenance
Freight Services
Other cost drivers- Lease, advertising, etc.
Segment
Size
Passenger-Domestic
140 Mn passengers
International
26 Mn passengers
Government Initiative- Budget 2020-21 Scheme
About Domestic and international routes – help farmers in transporting agricultural products improving product value Approved 78 new routesEnhance connectivity to remote and regional areas of the country Under Regional Connectivity-34,74,000 passengers were flown during 2019
Krishi UDAN
UDAN 4.0 RCS-UDAN
Freight
2.56 Mn tonnes
Low cost carriers
108 Mn passengers
Asset Monetization through PPP model
Monetization of the next lot of airports for operations and management concession
Tax
Incentives for aircraft leasing and financing
Important News •
Expenditure in MRO accounts for 12-15% of the total revenues - it is the second-highest expense after fuel cost
•
In January 2020, IndiGo became first Indian carrier to have an aircraft fleet size of 250 planes and operate 1,500 flights per day
•
The expenditure of Indian travellers is expected to grow up to Rs. 9.5 lakh crore (US$ 136 billion) by 2021. Due to rise in demand in air travel, India will need 2,380 new commercial airplanes by 2038
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53.90%
Customer Support
Major Segments
Key Growth Drivers Driver
•
Tickets Advertisements Travel agencies
• • •
Indigo 13%
Air Passenger Traffic: 115.37 millions(FY21)
Cargo Handled: 3.33MMT
No. of Aircrafts: 680
No. of Airports: 153
Facts
2021-22
Page 18
Automobile Industry Major Players
Value Chain Inbound
• • •
Operations
Raw Material Procurement Supplier Management Warehouse management
• • •
Outbound
Production Process Paint shop Testing and other safety norms
• • •
Franchisee Management Dealer Relationship Delivery
Growing income
Expanding R&D hub Atmanirbhar Bharat Abhiyaan
Growth 3X increase in average household income from $6,393 in 2010 to $18,448 in 2020 India accounts for 40% of total $31 bn of global engineering and R&D spend. 8% of the country’s R&D expenditure is in the automotive sector Special economic and comprehensive package of INR 20 lakh crores towards promoting manufacturing in India
• •
Print and Content Advertisement Prom0tional Events
Services
• • • • •
Customer service Warranty and repairs Pick and drop Insurance Financing
Major Segments
Key Growth Drivers Driver
Marketing
Revenue
Automobile Sales
Financing Services
After-sale service
Cost
Raw Materials
R&D and wages
Advertisement
Segment
Share in Production
Two Wheelers
80.8%
Passenger Vehicles
12.9%
Commercial Vehicles
3.3%
Three Wheelers
3.0%
•
In February 2021, the Delhi government started the process to set up 100 vehicle battery charging points across the state to push adoption of electric vehicles
•
In January 2021, Fiat Chrysler Automobiles (FCA) announced an investment of US$ 250 million to expand its local product line-up in India
•
In January 2021, Tesla, the electric car maker, set up a R&D centre in Bengaluru and registered its subsidiary as Tesla India Motors and Energy Private Limited
2021-22
Market Share
Market Cap (INR)
Segment
Maruti Suzuki
47%
2,27,040
(Passenger)
Bajaj
51%
1,19,620
(Threewheeler)
Tata Motors
45%
1,12,757
(Commercial)
Hero MotoCorp
35%
57,991
(Two-wheeler)
Government Initiative Scheme
About
Foreign direct investment
Allowed 100% (FDI) in Automobile industry under the automatic route
Vehicle scrappage policy
Likely to boost demand for new vehicles after removing old unfit vehicles
Research and Development hub
Under NATRIP, the GOI is planning to set up R&D centres at a total cost of US$ 388.5 million
FAME scheme
Ministry of Heavy Industries has shortlisted 11 cities in the country for introduction of EVs in their public transport systems under the scheme
Incubation centre
For start-ups working in the EVs space
Important News
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Company
Market Size: 26.36M vehicles
Growth Rate: 3.6% CAGR (FY21)
FDI(Apr”00-Dec”20) : 25.40 billion USD
Vehicle Sales: 2.8M units (FY20)
Facts
Page 19
Retail Industry Major Players
Value Chain Inbound Logistics
Sourcing
• • •
Vendor management Demand forecasting Price and trend forecasting
• • •
Inventory
Network optimization Cold chain management Carrier provider
• •
•
Storage and warehousing Allotment and scheduling to stores Merchandise analysis
Growth
3X increase in average household Growing income income to reach $18,448 in 2020, from $6,393 in 2010
Revenue Loyalty and Reward programs
Cost
Retail Lease
Online shoppers are expected to increase to 300Mn – 350Mn by 2025 from current number of ~100Mn
Channels of transport Route analysis
• • • •
In-store replenishment Discounting policy Salesforce management Loyalty programs
Own brand (label) sales
Companies
Market Cap (INR)
Avenue Supermarkets
D Mart, D Mart Minimax, D Homes
2,14,691
Future Retail
Big Bazaar, FBB, Easyday, WH Smith
3,562
Aditya Birla Fashion
Pantaloons, Louis Phillipe, Van Heusen Westside, Start Bazaar, Landmark
Trent
19,181 31,986
Government Initiative
Segment
Share
Scheme
About
Food & grocery
20.61%
Foreign direct investment
Apparel
21.86%
In Food processing in a bid to permit Ecommerce companies and foreign retailers to sell Made in India consumer products
Foreign direct investment
100% in single brand retail 51% Multi Brand Retail
Digital infrastructure
In Tier 2 and Tier 3 markets
24.18%
Pharmacy
1.38%
Furniture & Furnishing
2.01%
GST
Unified Tax rate for everyone
Footwear
4.03%
Single Policy Framework
Retail, FMCG, E-commerce
Employee Cost
Important News •
Retail sales slowdown by 49% in April of this year against pre pandemic level of April 2019
•
Retail Inflation (CPI) moderated to 4.29% in April from a four-month high of 5.52% in March. RBI projects retail inflation at 5.1% in 2021-22
•
Reliance Retail buys Future Group's businesses for 24,713 crore and provides operational support
ConQuest, IIM Shillong
Company
Consumer durables, mobile and IT Rural per capita consumption will grow Growth of rural Stock in trade 4.3 times by 2030, compared to 3.5 Cross Selling consumption and material cost times in urban areas
Increased online spending
• •
In store Operations
Major Segments
Key Growth Drivers Driver
Outbound Logistics
Market Size Prediction in FY21: 57,15,700 crores
Growth Rate Prediction: -7.47% CAGR (FY 21)
90% business controlled by Family Run small shops
GDP share: 10%
Facts
2021-22
Page 20
Banking Industry Major Players
Value Chain Sales
Marketing
• • •
Advertisement Branding Sales Support
• • •
Product
Human Capital Offering Multi-channel management
• • •
Key Growth Drivers Driver
Income Level
Growth
Rising per capita income and rural income
Net interest rate margin
8.82
Digital Infrastructure
Loan Books
Soaring tele density in rural areas
Both corporate and retail loan books have seen increasing demand.
Transaction fees and agency fees
16…
Physical Infrastructure
Speculative positioning based on flow of information(hedging)
SBI
23.90%
22.50%
3,86,123
ICICI
5.70%
6.30%
4,48,638
HDFC
8.50%
9.60%
8,26,493
Axis Bank
4.70%
5.50%
2,33,067
Commissions Trading Clearing and settlement
Government Initiative Scheme
About
Public Sector Banks
Pradhan Mantri Suraksha Bima Yojana
Accidental death insurance cover for up to Rs. 2 lakhs. . Gross enrolment under the scheme reached 154 million in FY19.
Private Sector Banks
Pradhan Mantri Jeevan Jyoti Bima Yojana
Life insurance cover of Rs. 2 Lakhs . Gross enrolment under the scheme reached 59 million in FY19
Pradhan Mantri Jan Dhan Yojana
Under the scheme, each & every citizen will be enrolled in a bank for opening a No-Frills account and is eligible for Rs. 5000/- overdraft
Atal Pension Yojana
Under the scheme, subscribers would receive fixed pension up to Rs. 5,000 from the age of 60 based on their contribution
Cost
41.18 Tele density
• • •
Revenue Breakup (FY’20)
Revenue
Market Share in Deposit
Transactions
Commercial Banking: Deposits, Loans, Treasury, credit card Investment: Underwriting, IB services, research Services: Asset Management, book building, Account Management
33.82
Foreign Banks
Important News •
On November 6, 2020, WhatsApp started UPI payments service in India on receiving the National Payments Corporation of India (NPCI) approval to ‘Go Live’ on UPI in a graded manner
•
To improve infrastructure in villages, 204,000 point of sale (PoS) terminals have been sanctioned from the Financial Inclusion Fund by National Bank for Agriculture & Rural Development (NABARD)
•
In 2019, banking and financial services witnessed 32 M&A (merger and acquisition) activities worth US$ 1.72 billion
ConQuest, IIM Shillong
2021-22
Market Market Capitalizati Share in on Credit (INR CR)
Company
Facts
Asset of public sector banks stood at Rs. 107.83 lakh crore (US$ 1.52 trillion) in FY20
April 2021: Bank Credit – Rs. 108.02 trillion Deposit – Rs. 151.34 trillion
Page 21
Healthcare Industry Value Chain Diagnostics
Consulting
• •
Understanding the patient's problem through verbal communication Recommendations and basic check up
• •
Major Players
Admission
Medical tests and screening Understanding the root cause of disease
• • • •
Post Treatment
Treatment
OPD, ICU depending upon condition Emergency patients Referrals Payment collection
• • • •
• • •
Specialized doctors Nurses and other staff Medical supplies Medical Equipment
Follow up Routine check-ups Insurance Claims
Healthcare Sector Growth Trend (US$ billion)
Key Growth Drivers Growth
Revenue
Cost
Robotic process automation (RPA)
Healthcare Services
Capex in equipment and construction
372
140 Diagnostic Services
Employee or staff salary
Life Expectancy is going to exceed 70 years by 2022
Sales of Drugs
Maintenance and utilities
2016
2017
2022F
53,290
Fortis Healthcare
18,413
Narayana Hridalaya
9,802
Aster DM
7,695
About
194
2020F
Apollo Hospitals
Scheme
Union Budget 2021 Rise in Medical Tourism
Market Cap (INR)
Government Initiative
Mission Poshan 2.0
160
Company
Policy
GOI plans to launch ‘Mission Poshan 2.0’ to merge ‘Supplementary Nutrition Programme’ with ‘Poshan Abhiyan’ (Nutrition Mission) in order to improve nutritional outcomes across 112 aspirational districts Investment in health infrastructure expanded 2.37x, or 137% YoY; the total health sector allocation for FY22 stood at Rs. 223,846 crore Parliament passed the National Commission for Allied, Healthcare Professions Bill 2021, which aims to create a body that will regulate and maintain educational and service standards for healthcare professionals
Important News •
In April 2021, Tata Digital infused Rs. 100 crore (US$ 13.45 million) debt in 1mg, the online medicine start-up, and was in the final stages of acquiring a controlling stake in the company
•
In March 2021, gross written premiums of health insurance companies in the non-life insurance sector increased by 41% YoY to Rs. 2,185.05 crore (US$ 294 million), driven by rising demand for health insurance products amid COVID-19 surge
•
In February 2021, the Competition Commission of India (CCI) approved acquisition of Varian Medical Systems, Inc. by Siemens Healthineers Holding I Gmb (SHS GmbH).
ConQuest, IIM Shillong
2021-22
Facts
Government Healthcare expenditure was 1.8% of GDP in FY’20
In FY21, gross written premiums in the health segment grew at 13.7% YoY to Rs. 58,584.36 crore
Page 22
FMCG Industry Value Chain Procurement
R&D
• •
New products Improvement in existing products
• • •
Sourcing raw materials Quality tests and release Storage
Manufacturing
• • • •
Production Packaging Storage Grammage testing/ quality
Growth
Revenue
Cost
Rising demand for premium products
Pricing
Inventory and processing cost
E-commerce and digitalisation
Promotion
Distribution
Sales/ Marketing
Distribution
• •
Distribution centres and warehouses Distribution channels – distributor, retailer, ecommerce
• • • •
Promotion Advertising Branding Complaints and feedback
Major Segments
Key Growth Drivers
Increased packed food consumption
Major Players
Labour
Promotion and distribution
Share
Food & Beverages
19%
Household and Personal Care
5,80,935
ITC
2,49,254
Nestle India
1,68,439
Britannia
84,761
About
GST
Products such as soap, toothpaste and hair oil now come under the 18% tax bracket against the previous rate of 23-24%. GST on food products & hygiene products have been reduced to 0-5% and 12-18% respectively
Foreign direct investment
The Government of India has approved 100% FDI in the cash and carry segment and in singlebrand retail along with 51% FDI in multi-brand retail
31%%
50%
•
In February 2021, Food and snack company, Haldiram's partnered with Africa's Futurelife to bring its nutritional food product range to India
•
Nestle India announced plans to reach ~1.2 lakh villages (with each having population of over 5,000) over the next 2-3 years
•
FMCG businesses in India are planning to expand their oral care portfolio by entering new and niche categories such as mouth sprays, ayurvedic mouth cleansers and mouthwashes to meet the rising consumer demand for hygiene products
2021-22
Hindustan Unilever
Scheme
Important News
ConQuest, IIM Shillong
Market Cap (INR)
Government Initiative
Segment
Healthcare
Company
Facts
The sector witnessed healthy FDI inflows of US$ 17.8 billion from April 2000 to September 2020
Page 23
IT and ITes Industry Major Players
Value Chain Customer Acquisition
Operations Setup
• • • • •
Infrastructure Setup Talent Acquisition Employee Training Talent Retention Visa Handling
• •
CRM
Pitching and acquiring new clients Cross-selling products to existing clients
• • •
Understanding client requirements Communicating it to the software team Conflict resolution
Blockchain
Revenue
Cloud Infrastructure
• • • •
After-sales Services •
Product development Live testing at client’s end Bug fixes Full deployment
•
Provide software updates and IT support Maintain relationship for repeat business
Major Segments
Key Growth Drivers Growth
Service Delivery
Cost
Segment
Software sales/ services
US$ billion
IT Services
86.0
Business Process Management
32
Employee cost
Admin and other costs
Hardware leasing
R&D Spend
TCS
12,05,335
Infosys
6,65,077
HCL
2,65,070
Wipro
2,90,947
Scheme
About
Centre for Development of Advanced Computing (C-DAC)
In Food processing in a bid to permit Ecommerce companies and foreign retailers to sell Made in India consumer products
Software products and engineering services
33 MOU
Artificial Intelligence and machine learning
Market Cap (INR Cr)
Government Initiative
Guidelines Start-up revolution, IOT and healthcare
Company
Hardware
15.4
Budget 2021
In 2020, the government released “Simplified Other Service Provider” (OSP) guidelines to improve the ease of doing business in the IT Industry, Business Process Outsourcing (BPO) and IT-enabled Services Signed MOU with Japan to enhance cooperation in areas of 5G technologies, telecom security and submarine optical fibre cable system. Allocated Rs. 53,108 Crore to IT & Telecom industry
Important News •
Accenture acquired Pollux (a provider of industrial robotics and automation solutions) to further expand its technological capabilities
•
TCS partnered with Ericsson to assist the company in the establishment and growth of its cloud-based R&D digital workplace
•
Microsoft launched ‘Dynamics 365 Business Central’, a cloud business management solution for Indian small and midsized businesses (SMEs).
ConQuest, IIM Shillong
2021-22
Facts
IT & BPM, revenue is estimated at ~US$ 194 billion in FY21, an increase of 2.3% YoY.
Revenue Estimation for FY21 Domestic Revenue US$45 billion Export – US$ 150 billion
Page 24
E- Commerce Industry Value Chain Inventory Management
Sourcing
• • • •
B2B Co-sourcing Modular production Mass customization
• • •
Demand planning Warehousing Unified offline & online inventory management
Marketing
• • •
Targeted marketing Dynamic content Multi-channel attribution & end to end ROI
Smartphone & internet penetration
Revenue
Advertising
Sales
• • •
Delivery
• • •
Customer retention Payment methodology Unified experience
Delivery planning Logistics partners Omnichannel fulfilment
Major Segments
Key Growth Drivers Growth
Major Players
Marketing
Improved Digital Infrastructure
Subscription & transaction fees
Supply chain logistics
Surge in demand in grocery, education and pharmacy
Affiliate revenue
Technology Investment
Market Share (2018)
Flipkart
31.9%
Amazon
32.1%
Myntra
4.7%
Paytm Mall
3.3%
Snapdeal
1.9%
Big Basket
1.8%
Others
26.2%
Government Initiative
Segment
Share in retail by value
Consumer Electronics
40.0%
Apparels
40.0%
Food & grocery
7.0%
Jewellery
7.0%
Digital India
Furniture
4%
Others
2%
Consumer Protection (E-Commerce) Rules, 2020
Cost
Company
Scheme
About
Digital payments
5G Networks
GOI has distributed rewards worth around $23.8 Mn to 1 million customers for embracing digital payments Heavy investment made by the GOI in rolling out fibre network for 5G will help boost Ecommerce Aims to create a trillion dollar online economy by 2025 by enabling initiatives such as Bharat Net, Jan-Dhan-Aadhar-Mobile (JAM) trinity, and Bharat Interface for Money (BHIM) Rules delineate roles and responsibilities for marketplace and sellers, and will reinforce competition and efficiency within the Indian ecommerce market
Important News •
Expected trends in market are Omni-channel fulfilment, vernacular-language searches, niche-tailers, hyper-locale-commerce post COVID
•
E-commerce in India continues to gain traction, with total market size expected to reach USD 188 billion by 2025
ConQuest, IIM Shillong
2021-22
Facts
Market size of Ecommerce in 2020 was USD 64 billion dollars
974 million internet users, 220 million online shoppers in India by 2025
Page 25
Oil and Gas Industry Value Chain Production
Exploration
• • •
Identification of on-shore/ off-shores site Seismic surveys to assess potential Develop suitable FDP
• • • •
Project sanctioning Create Infrastructure Strike ‘First Oil’ Platform at sea to split oil, gas & water
Key Growth Drivers Growth City Gas Distribution Coverage area has gone up from 20% to 70%
Revenue
Major Players
Transportation
• •
Crude: Transported by oil (super) tankers Gas: Liquified gas is transferred to plant terminal
Storage
• •
Marketing
Crude: Storage at ports in large tanks Gas: Preserved in reservoirs (artificial or natural)
• • •
Refines raw material: Petrol, Diesel & LPG Distil & convert by BP Products marketed via B2B & B2C channels
Oil Reserve Categorization Cost Material
Crude Oil
Government incentives. Early production royalty concession of 10%, 20% and 30% for Category I, II and III basins
Others
Allowances
ONGC
1,48,321
Bharat Petroleum
99,113
Reliance
58,928
About
Oil and natural gas that can be extracted in future year under existing economic condition
Government Investment
In February 2021, Prime Minister Mr. Narendra Modi announced that the Government of India plans to invest ~Rs. 7.5 trillion (US$ 102.49 billion) on oil and gas infrastructure in the next five years.
CBG
The Government is planning to set up around 5,000 compressed biogas (CBG) plants by 2023
Fund Allocation
In Union Budget 2021, the government allocated funds worth Rs. 12,480 crore (US$ 1.71 billion) for direct benefit transfer of LPG (liquefied petroleum gas) and Rs. 1,078 crore (US$ 147.31 million) to feedstock subsidy to BCPL/Assam Gas Cracker Complex
Probable Resource (2P)
50% probability that reserve quantities will be higher than estimated
Possible Resource (3P)
10% probability that reserves quantities are higher than estimated and a 90% probability that reserves will be lower than estimated
Import & Domestic Oil Production in India (MBPD)
Important News •
India is expected to be one of the largest contributors to non-OECD petroleum consumption growth globally. Crude Oil import rose sharply to US$ 101.4 billion in 2019-20 from US$ 70.72 billion in 2016-17
•
According to government data, India's natural gas production increased by 22.7% YoY in April 2021, as Reliance Industries Ltd. and its partner, BP plc, increased production in the KG-D6 block on the east coast
•
As of May 01, 2021, the sector’s total installed provisional refinery capacity stood at 249.9 MMT; and IOC emerged as the largest domestic refiner, with a capacity of 69.7 MMT
ConQuest, IIM Shillong
1,01,013
Scheme
Labour
Natural Gas
IOLC
Government Initiative
Unproved Resource Abundant raw material. Natural Gas Reserve at 1.3 TCM
Market Cap (INR)
Share
Segment
Proved Resource (P1)
Company
2021-22
Domestic Gas Production (BCM)
Facts
Page 26
Telecom Industry Composition of Telecom Subscribers (Feb 2021)
Value Chain Network Equipment
Tower Infrastructure • • •
Infrastructure sharing Tower Deployment & operations Energy Management
• • • •
Device Manufacturers
Switches, Routers, Firewalls Network consulting Integration & Deployment Support, Maintenance
• •
Build mobile phones, handsets which are used by consumers Tech & chip makers develop tech & hardware
Growth
Revenue
Cost
Increasing Internet Users
Internet Services
Operation Expenditure
Mobile Penetration
Telephone Services
Network connectivity to other telco firms
•
Provide telecom services: Voice, Messaging, Internet, Value Added Services
Customer
• • •
Recharge Plans Customer Care Centres Engagement through online & offline advertising
Major Players
Key Growth Drivers
Untapped Rural market
Network Operators
Government Initiative
Company
Market Capitalization (INR Cr)
Reliance
4,90,000
Bharti Airtel
2,90,885
Vodafone Idea
25,861
BSNL
NA
Scheme
About
Policy Support
Union Cabinet approved Rs. 12,195 crore (US $ 1.65 billion) production linked incentive (PLI) scheme for telecom & networking products under the Department of Telecom
Prime Minister Wi-Fi Access Network Interface (PM-WANI)
Provision of public Wi-Fi service through Public Data Offices (PDOs) spread across the country to accelerate the expansion of broadband internet services
Spectrum Auctions
Network Investments
Important News •
FDI cap in the telecom sector has been increased to 100% from 74%; out of 100%, 49% will be done through the automatic route and the rest will be done through the FIPB approval route
•
Payments on unified payments interface (UPI) hit an all-time high of 2.30 billion (by volume), with transactions worth ~Rs. 4.31 lakh crore (US$ 59.08 billion) in January 2021
•
Over 75% increase in internet coverage from 251 million users to 446 million
ConQuest, IIM Shillong
2021-22
Facts
Subscriber base of 1187.9 million as of February 2021
Gross revenue of the telecom sector stood at Rs. 68,228 crore (US$ 9.35 billion) in the third quarter of FY21
Page 27
Profitability Framework A profitability case could deal with revenue side issues, cost side issues or both. The key here is “Problem Isolation”. The candidate is expected to SEGMENT under various heads, ISOLATE the key driver causing the problem and then EXPLORE possible resolutions
Initial Questions • Get basic understanding of the company. For e.g.- its products/ services, geographical presence etc • Try to understand if it is a company specific problem or an industry- wide phenomenon • Consider the quantum of losses and the time period for easy comparison
Price Revenue
# Units sold
ConQuest, IIM Shillong
• By customer type (new/old, big/small) • By industry vertical
Profits Fixed Cost
Alternate Approaches Cost: While segregating cost, we can break down cost as fixed and variable Revenue: • Problem with units sold can be looked at from the demand and supply side lens • Factors affecting revenue can be bucketed as internal (Production, Distribution/Push factors or Consumer/ Pull factors) and External factors (identified by PESTEL analysis)
Possible Segments to get data for, isolation & exploration • By product/product line • By distribution channel • By region
Profit Vs Profitability Profits are merely a difference of Revenues and Cost, while Profitability refers to profit as a proportion of sales Many students start thinking about immediate profitability. Whereas in real world it's about breakeven
For the problem branch (e.g. Price or # units sold) 1. SEGMENT the number, break it up into its component parts, compare to historical metrics to find where the shift is coming 2. ISOLATE the key driver causing bulk of problem 3. EXPLORE possible resolutions
Cost per Unit Variable Cost
Cost
# Units sold 2021-22
For problem branch (e.g., fixed or variable cost) SEGMENT into its component parts • Segment cost by logical components • Segment costs by value chain Value Chain Example: Identify fixed costs in each of the following: Raw Materials -> Factory -> Distribution ->Customers Compare to component.
historical.
Find
the
problem
Page 28
New Market Entry A market entry case ( for a new product or new geography or simple growth strategy) pertains to two important questions- Is it economically & strategically worthwhile to enter the market and if yes, what would be the best strategy to enter the market. •
•
Initial Questions Ask about the company’s objective to enter that particular market/ product Get basic understanding of the company. For e.g.- its products/ services, geographical presence, presence history with launches and why this particular geography/ product launch?
Important points for Economic Analysis • For market size, run the approach through the interviewer • For market size, always look for clues from the interviewer and decide an appropriate approach Important points for Strategic Analysis Always set up the value chain & analyse each bucket. Example:
FMCG Company
Regulatory Barriers
Goods Production
Approach/ Framework to check Strategic Feasibility
Customer • • • •
Product
Identify the key needs Determine the price points & price sensitivity Preferred distribution channel Customer concentration & power (does one customer control all the demand, the “Wal-Mart” effect) Identify segments & look for trends
• • • • •
Company
Nature/ benefits of the product Is it a commodity or a differentiable good? Identify the complimentary goods Identify substitutes (i.e., indirect competitors) Determine the product’s lifecycle Explore options like bundling, packaging etc
• • • • •
Competition
Capabilities and expertise Distribution channel used Cost structure & Investment Cost Intangibles (e.g. brands, customer loyalty etc.) Existing financial situation Try to leverage existing expertise
•
• • • •
Competitor concentration (low means that the market is highly competitive) Competitor Structure (monopoly, oligopoly) Competitor behaviors and best practice Barriers to entry Regulatory environment Analyze the life cycle of the industry
Approach/ Framework to check Economic Feasibility Fixed Cost
Market Size
Market Share Should they enter ?
Price – Variable Cost Why No? Suggestions
If Yes How? Customer Acquisition
ConQuest, IIM Shillong
Distribution Network
Entry Options (Start Own, Acquire, JV)
Operational Decisions 2021-22
Marketing Strategy
Growth Plan (how to scale up)
Conclusion Page 29
Pricing Framework Pricing decision should be taken to maximise the revenue potential by understanding product competitiveness in the market. In order to take a good pricing decision, it is important to understand the competitive products, possible substitutes, price elasticity and cost structure Initial Questions • It is imperative to consider the objective of the company, since it directly affects the price strategy to be followed. • Candidate should understand the product characteristics and the market environment to apply a prudent pricing methodology. In case the pricing needs to be done for an old product, the utility of the product w.r.t to a new product and the depreciation/salvage value need to be taken into consideration
Pricing Factors
Product • • •
Radical Vs Incremental changes Uses/ Characteristics Advantages/ Disadvantages
Costing
Competitors •
• • •
R&D Cost Manufacturing cost Other Cost
• •
Possible Scenarios • Radical Invention • Modification of an existing product • Similar to existing product • Pricing w.r.t another product
• • •
Available substitute Indirect substitutes Future Substitutes
• •
Target segment and its characteristics Perceived Value
Pricing Options
• •
Price Based Costing
Cost Based Pricing
Competitive Pricing
ConQuest, IIM Shillong
Competitive Products Product differentiation Price benchmarking
Customer
Substitutes
•
Competitor’s Price +/- Premium/ Discount
2021-22
Cost of production + Margin
• •
How much is the customer willing to pay Supply Vs Demand trade off Page 30
Merger & Acquisitions M&A cases are focused on decisions regarding a potential merger or acquisition opportunity. It is important to understand the synergies involved, do cost vs benefit analysis & due diligence, and recommend whether to take the opportunity or not. Business Benefits
Deal Rationale What is the firm’s objective? • Target • New Markets/ Channels • Cost Reduction • Market Share/ Competition • Investment
How the target fits ? • Business Synergies • Market Reach (New/ Existing) • Competition/ Survival • Cost Savings/ Tax Benefits • Portfolio Expansion
Due Diligence Checks & Confirmations • Strategic Options • Commercial (Market Related) • Operational (Target Related) • Financial (Target’s data, Valuation) • Legal (Regulatory Norms)
ConQuest, IIM Shillong
Deal Price
• •
Fair Price? • Valuation • Is it fair? Can we afford? • Transaction Type • Post M&A cost
Potential Risks Challenges/ Risk in M&A • Synergy realization • Integration • Cultural Aspects • Macro-economic risks
Implementation
Exit Strategies
How can the merger or acquisition be effectively implemented Issues related to cultural integration and operational aspects and targeted benefits
How, When & Why to exit? • Strategic Options • Commercial (Market Related) • Operational (Target Related) • Financial (Target’s data, Valuation) • Legal (Regulatory Norms)
2021-22
Page 31
When Nothing Works || Unconventional Cases Sometimes, it may be the case that none of the standard case frameworks can be applied to the business situation at hand. There is no need to panic, just focus on the details and try to ISOLATE the problems Pointers To Remember
Easy Wins
Never try to force fit a framework Understand the situation given and try to break the details down in order to isolate the problem Don’t hesitate to ask the interviewer for more details if you are unaware of the particular industry Be as comprehensive as possible, bucketing the problems into different sections will help in structured thinking Using 3CP i.e. Company, Customer, Competitor and Product approach works in certain cases, but focus on keeping the approach MECE • If the scope of the case is broad, the interviewee should ask if the focus needs to be on a specific aspect to structure the thoughts in a particular direction • If the industry is familiar, comparisons with companies you know about would help in providing recommendations • • • • •
• Breakdown into a mathematical formula • Always remember Demand and supply • Any problem can have an internal cause (in control of company) or external cause (use PESTLE to analyse the possible issues)
Chart out the entire process flow/ customer journey Example: E-Commerce Discovery and Ordering process Map
Fixed Cost
• • •
SEO? Ads? Social Media? Email?
Landing Page
• • • •
Navigation? Products/ Page Description? Options?
Look for Bottlenecks ConQuest, IIM Shillong
Evaluation
• • • •
Product Page? Reviews? Use? Bundling?
Ordering
• • •
Call Options? Wishlist? Payment Modes?
Delivery
• • •
Sellers Shipping? Dates? Experience
Unboxing
• •
Condition of Package? Breakage?
Unboxing
• •
Condition of Package? Breakage?
• A bottleneck is any area along the production line where work can get backed up for one reason or another • Performing a bottleneck analysis can help to identify the cause of a bottleneck, & lead to a potential solutions to get a smooth, continuous and even work flow 2021-22
Page 32
Water Purifying Powder | Market Entry
Problem statement Your client is leading water purifier company and has recently launched water purifying powder in India that will remove all the impurities when mixed with tap/ground water. Design a market launch strategy
IIM-S | BCN | SIP
Customer- New Market
Product
Company
Competition
Segments : Urban & Rural
Customer Expectation
Product Offering
Direct/ Indirect Competitors
Needs : Potable water
Available Products
Price
Barriers to entry/ exit
Profiling : basis of income
Identify the gap of above 2
Strengths & Strategic alliances
Our estimate of Market share
Size & Growth
Case Overview • For the sake of simplicity, interviewer asked to assume that water purifying powder does not produce any waste • Promotion strategy is similar to ORS Sachets • Selling price is Rs 10 per sachet to be used for 3 litres of water
ConQuest, IIM Shillong
Market share
Entry Strategy If yes, How?
No
Start from scratch Promotion strategy
Joint Venture Acquisitio n
Target Market Share
Tips/ Suggestions
Noteworthy Excerpt
• It is important to listen to the interviewer, he/she Q. Okay. Are there any other customers you want to target? usually has a given structure in mind and your task is to A. As our product does not leave any waste in the process, I decode that by asking logical questions would also market it in the areas with high water scarcity in • If possible use numbers while proposing a solution (for places like Chennai as it saves water. This product has high e.g.; calculate the market size, arrive at a price after scope in the coming years with groundwater reserves emptied considering all the factor such as production. in major cities, and as people cannot use water purifiers due to promotion, distribution etc) high water wastage. We can target all segments of people in these areas. Also, this product can be beneficial while • Effective communication is the key while solving any case interview traveling, and we want pure water. 2021-22
Page 33
Water Purifying Powder | Market Entry
IIM-S | BCN | SIP
Your client is leading water purifier company and has recently launched water purifying powder in India that will remove all the impurities when mixed with tap/ground water. Design a market launch strategy I would like to ask some questions regarding the product to decide on the target segment Sure, go ahead. You can take 5-6 minutes to come up with the target segment How does the process work? Will the powder purify any water?
our product? What should be the price of the product and quantity?
I think the price should be less enough for them not to think twice while paying. As our primary target segment is low-income groups, we should provide enough power to purify 3 liters of water for one person per day. I think we should launch it in small sachets and price it around 10 Rs. which is not a burden on them. Assuming a family of 4 needs 15 liters of water per day for drinking and cooking, they will need to spend less than 50 Rs for clean water
It will purify the tap water and the groundwater
Yes, I thought that we should launch in a similar way like ORS Sachets. What are the costs you anticipate during the manufacturing?
In the entire process, is any waste generated?
Mentioned the different costs production, Marketing, Distribution, etc.
For our convenience, let us assume that no waste is generated.
Okay, assume that we are setting the selling price at Rs 10 Per 3 liters. What will be the revenue generated per day?
I would like to divide the target market into urban and rural segments and Highincome, mid-income, and lower-income. In Urban areas, our target should be the lowincome segment to Lower middle-class segment as an upper-middle class and HighIncome people in both areas will already have automatic purifiers installed. Fair enough, what do you think about the rural areas? I suppose similar logic applies for rural areas, so our target should be Lower middle class and poor Okay. Are there any other customers you want to target?
Yes, as our product does not leave any waste in the process, I would also market it in the areas with high water scarcity in places like Chennai as it saves water. This product has high scope in the coming years with groundwater reserves emptied in major cities, and as people cannot use water purifiers due to high water wastage. We can target all segments of people in these areas Also, this product can be beneficial while traveling, and we want pure water. Great, so we have decided on our target segment? How do you think we should launch ConQuest, IIM Shillong
I assume that around 50% of the Indian population will come under the lower middle and poor segments. Assuming that the Indian population is 120 crores, 60 crore people will come under our target segment. I think 50% market penetration for our product with 30 crore people using it. So, assuming a single person needs 3 liters of water per day, if 30 crore people use it, our revenue will be 300 crores. Amazing. Now coming to the final question. I want you to think about pitching the product to your manager. Think about five aspects that you think are most prominent for this product? I Suggest you take around 5 minutes to get your thoughts together and answer the question? The five reasons why this product should be launched are: 1. There is an immediate need for a disruptive product like this that will change the hygiene system in the country 2. The product is portable and efficient 3. Will have an enormous impact on the health of lower middle class and poor people,
2021-22
Page 34
Water Purifying Powder | Market Entry
IIM-S | BCN | SIP
and positive advertising for the company 4. Increased customer reach with water shortages looming in the near future and RO not being an option as it generates more wastewater for water purified 5. High sales expected with the low price of the product
ConQuest, IIM Shillong
2021-22
Page 35
Furniture E-Commerce Company | Unconventional Case
IIM-S | Deloitte USI | SIP
Factors for selecting a supplier
Problem statement The company has faced problems delivering orders on time to its customers post the lockdown, mainly due to its suppliers not fulfilling orders on time. It plans to expand its supplier base. What are the factors you should keep in mind during supplier selection for such a vendor?
Case Overview Your client is a major furniture E-commerce company. It has been severely affected recently by the COVID 19 lockdown. The company outsources all its manufacturing to third-party furniture manufacturers, and it only handles the supply chain, marketing, and sales of the furniture. All manufacturers are based in South India. There are multiple SKUs, and the stock is transferred directly from the manufacturing site to company-owned warehouses as per order requirements.
ConQuest, IIM Shillong
Quality
Price
Location
Flexibility
✓ Style, Design & additional features ✓ Prior customer testimonials can be checked
✓ Find a supplier with better average products at an average price
✓ Impacts delivery time & cost ✓ Able to deliver consistently & at the lowest price
✓ Able to cope up with any demand fluctuation/ seasonalities
Reorder Point
=
Size of the Supplier ✓ Order size depends upon this factor
(Average rate of consumption x Delivery Lead time) + Safety Stock
Noteworthy Excerpt
Tips/ Suggestions
Q. Do you have any questions for me? • In Deloitte interviews, no additional information will A. What kind of projects the Supply Chain & Network be provided for a question, and you need to answer it Operations (the interviewer was from the SCNO team) based on the information provided in the question practice takes up? itself • Do not try to cross check or look for validation of your (This shows your interest in the given profile and highlights approach as it is different from the conventional case the zeal to learn more) interviews • Listen carefully and suggest a solution basis the limited information given 2021-22
Page 36
Furniture E-Commerce Company | Unconventional Case Your client is a major furniture E-commerce company. It has been severely affected recently by the COVID 19 lockdown. The company outsources all its manufacturing to third-party furniture manufacturers, and it only handles the supply chain, marketing, and sales of the furniture. All manufacturers are based in South India. There are multiple SKUs, and the stock is transferred directly from the manufacturing site to company-owned warehouses as per order requirements. The company has faced problems delivering orders on time to its customers post the lockdown, mainly due to its suppliers not fulfilling orders on time. It plans to expand its supplier base. What are the factors you should keep in mind during supplier selection for such a vendor? We need to keep in mind multiple factors before we select a supplier for such a company. Some of them are• Quality- I define it as fitness for the intended use. For a furniture manufacturer, the furniture must be able to meet the desired specifications. This will also include the style, design, and overall finish of the product. We can also consider prior customers’ testimonials, their previous quality check/control records (if any), and a quality audit performed on-site (if possible) • Price - Normally, quality does not always go side by side with price, but we must try to find out those suppliers who make better than average products at an average price. However, sub-standard and poor quality purchases should not be made at the cost of a low price • Location- The location of our supplier would vastly affect our delivery time and cost. Hence the ideal supplier should be located near our warehouses/ be able to deliver consistently on time at the lowest possible price • Flexibility- The supplier must be able to cope up with any demand fluctuations/ seasonality's involved • Size of the supplier – This would affect the order size that can be placed with the supplier. For fast-moving items/ items ordered in large quantities, we need the supplier to have a large manufacturing capacity
ConQuest, IIM Shillong
IIM-S | Deloitte USI | SIP Derive a formula to estimate the inventory level of their supplier. List all factors that need to keep in mind while determining inventory level? The following factors need to be kept into account while deriving a formula for average inventory level• Lead time • Rate of consumption • Type of materials (special order or regular order) • Reordering level • Safety Stock Using these, I derived a formula as - Reorder point = (Average rate of consumption * Delivery lead time) + Safety Stock Do you have any questions for me? What kind of projects the Supply Chain & Network Operations (the interviewer was from the SCNO team) practice takes up?
2021-22
Page 37
Snack & Beverages company | Market Share Decline
Case Overview •
• •
The client historically had a 60% market share Two other players held the remaining 40% share Recently, a new entrant released a healthier version of soya chips and captured 60%+ market share
ConQuest, IIM Shillong
Solutions
Approach Chart
Problem statement Your client has been the market leader in the soya chips category in India for the past ten years. Recently, their market share has declined from 60% to 20%. You are asked to evaluate the potential reasons for the decline and suggest measures.
IIM-S | BCN | SIP
Player
Market Share (Volume) 2019
2020
Client
60%
20%
A
20%
6.6%
B
20%
6.6%
X
0%
66.8%
Production
Sales
R&D
Marketing
Manufacturing
Consumer Preferences Distribution channels
Noteworthy Excerpt
Tips/ Suggestions
Q: You can proceed to suggest possible solutions for the issue A: We observe that the customer preference for our market has changed towards a healthier variant of snacks. So, I would break down the potential measures into short term and longterm actions. In the shorter term, the company should try to regain some of its lost market share through a promotional campaign and by offering discounts on our existing SKUs. In parallel the company should focus on analyzing the healthier variant market of soya chips and focus on developing a healthier variant of soya chips. They could also introduce different flavours to differentiate in the market.
• It is really important to listen to the interviewer. More often than not, they are there to help you. • Don't jump to conclusions. The given case doesn't really have one universal solution. You are expected to ask questions and drill down to the various possibilities. • The evaluation will primarily depend on your ability to structure your thoughts and consider the possibilities.
2021-22
Page 38
Snack & Beverages company | Market Share Decline
IIM-S | BCN | SIP
Your client has been the market leader in soya chips category in India for the past ten years. However, recently, their market share has declined from 60% to 20%. You are asked to evaluate the potential reasons for the decline and suggest measures. I would like to begin by asking a few preliminary questions about the company and the market. Sure, go ahead. Which area does the client service, and what customer segment does it cater to?
Let me help you with some data based on which you can proceed forward. In 2019, our client sold 12,000 units, and the rest of the market consists of two players A & B. In 2020, the 9-month sales of our client are 10,000 units, and the A & B grew their volume by 10%. Ok, let’s calculate the market structure in 2019. Since our client sold 12,000 units which represented 60% of the market share (by volume), this implies that the total market was 20,000 units. So, how is the balance of 8,000 units split between A & B? They are split equally.
The product operates PAN India and caters across customer segments. I would like to evaluate the potential macro-environment variables that may have caused the market share decline
Ok So, has there been any disruption in the supply chain impacting our production & sales? No How does our pricing stand compared to the competitors and have there been any changes in the previous year? There has been no differentiation when it comes to price. Has any new player entered the market?
Ok, so that implies the market structure in 2019 was Our client: 12,000 units A: 4,000 units & B: 4,000 units. Now, moving to 2020, 10,000 units sold by our client represents 20% market share. So this implies if we take it on an annual level, the client will sell 13,333 units this year, and the total market volume shall be 66,666. You can round off the figures to 13,000 and 65,000, respectively Ok, now considering the growth rate of A & B. They will be selling 4,400 units each this year. So, how is the balance volume of 43,200 units distributed? A single-player captures it.
Since a new player has been able to capture a significant share of the market. Can you provide me with the details of the company and its product offering? The competitor has come with a healthier variant of soya chip, gaining a significant demand amongst the customers.
Yes So, I assume the change in market share is due to the new players entering the market. Is this a fair assumption?
Ok, so can we imply that the decline in our client’s market share is attributed to the market entry of a new player who has developed a healthier variant of soya chips.
Yes, that’s correct. You can now proceed to suggest possible solutions.
Yes So is the market share captured by a single player, or is it fragmented across multiple companies? ConQuest, IIM Shillong
2021-22
Page 39
Snack & Beverages company | Market Share Decline
IIM-S | BCN | SIP
We observe that the customer preference for our market has changed, and they have now preferred a healthier variant of snacks. So, I would break down the potential measures into short term and long-term actions. In the shorter term, the company should try to regain some of its lost market share by a promotional campaign and by offering discounts or benefits on our existing SKUs. While this can be piloted in the near term, in parallel the company should focus on analyzing the healthier variant market of soya chips. They should focus on developing a healthier variant of soya chips and come up with different flavors. In the end, have a promotional campaign for its launch. What is the timeline you are expecting for these actions? We can expect the short-term action to pilot in a couple of months, whereas the longterm action can be piloted end-to-end in the next 12 months. Ok, can you think of any other measure? We can think of acquiring the other company. Ok, so can you, in brief, tell me about the factors you will consider before the acquisition? During the acquisition, we must first consider the synergistic capabilities of the combined entity and the strategic advantage the company brings on board. The factors in evaluating these could be the manufacturing capabilities, product portfolio, supply chain partners, market reputation and lastly, the valuation of the acquiree. Thank you, that was helpful. Any questions that you have about BCN?
ConQuest, IIM Shillong
2021-22
Page 40
North Western State Transport | Profitability
IIM-S | Deloitte USI | SIP
Approach Chart Problem statement
Ticket Sales
The State Transport Department of USA is exploring ways to increase their profits after a few years of dip
Revenue
Approach in brief Concession stands
Profit Wages
• •
•
North Western State Transport (NWST) wants to increase profit of ferry operations Focus is on increasing non-operating revenue and reducing operating expenses Non-operating revenue relies only on concession stands Wages, primarily driven by back-office operations drive expenses
Other
Tips/ Suggestions
Noteworthy Excerpt Q: Back-office team drives majority of the wages, what would you recommend to cut costs? A: Seeing as it is mostly staff costs, this may lead to layoffs. I think there are ways to trim the team down by leveraging technology, like by using ERP systems
ConQuest, IIM Shillong
•
Identify focus areas Dive deeper in focus area to identify problems Provide viable solutions addressing identified gaps/ problems
Cost
Case Overview •
• •
2021-22
• Don't ask for too much data, just make clear, rational assumptions and expressly state them before proceeding with the solution • Maintain the required structure in mind to not lose track of the original ask • Consider feedback as an opportunity and explore alternative approach/ solution Page 41
North Western State Transport | Profitability
IIM-S | Deloitte USI | SIP
The State Transport Department of the United States of America is exploring ways to increase their profits after a few years of dip
That looks good, we now have some data on the cost side (Gives the breakup of the expenses)
Is there a particular mode of transportation that they want to focus on?
Okay so it looks like close to 80% of all ferry expenses are for staff wages – does that include the crew?
Yes. Ferry.
Yes – but it is only a small percentage
Do we have any recent Top-Line or Bottom-Line figures for Ferry department?
Okay so may I ask what is the remaining percentage? Maintenance staff? Back-office team?
(Data for only one year provided, no trends. Data indicates marginal profits) Would the department like to focus on increasing revenue or decreasing costs?
Yes – back-office team has majority of the staff
Let’s look at revenue for now
Do we want to cut costs?
Sure. Do we want to increase non-transport related revenue or ticket volume?
What would you recommend?
Can you elaborate further?
So, I am guessing there will one revenue stream coming from the ferry tickets, and another from non-transport activities like concession stands
Seeing as it is mostly staff costs, this may lead to layoffs. I think there are ways to trim the team down by leveraging technology, like by using ERP systems – we can explore that if you want
Yes sure, lets look at the non-transport revenues
Okay sure
What are your current sources of non-transport revenues?
What is the primary operation of the Back-office?
Only concession stands at the docks – say we wanted to branch out, what other sources would you recommend?
Primary functions include Booking tickets, scheduling, etc.
Well, renting out the ferries for private parties, hosting birthdays and weddings, that could be an avenue to explore. We could also consider vending machines on the ferries. That sounds good – could you give us an estimate of the revenue we can generate from this
I think most of these functions can be fulfilled by websites and self-service kiosks. However, we may need a small technical team for its maintenance. Okay sounds good – can you summarize the case for us? (Gives summary, highlight the conclusions reached and tentative way forward)
Solves Guesstimate- Refer Guesstimate 7(c) on Page 53 ConQuest, IIM Shillong
2021-22
Page 42
Travel Aggregator | Social Impact
IIM-S | Deloitte USI | SIP
Approach Chart Problem statement
Increase no. of calls
Problems faced by a travel aggregator’s customer service team (call center) and recommendations to deal with the same.
Unprecedented Requests
External
Lack of clarity on government policies
Problems
Case Overview • • •
•
XYZ a travel aggregator wants to enter Indian market It wants to develop to cope up with problems that may arise due to pandemic Customer service team(Call centre) would be affected the most Focus is on internal and external factors both
Internal
Remote working arrangements
• • •
•
Identify problems Bifurcate into external and internal factors Dive deeper into each factor Provide viable solutions addressing identified gaps/ problems
Employee training
Noteworthy Excerpt
Tips/ Suggestions
Q: Calls have rapidly increased but due to WFH, only 50% of the workforce is effective, what are the solutions that can be rapidly implemented to tackle this? Infrastructure addition is not possible to due to logistical issues
• Flawless communication and showing your capabilities in soft skills can be of value. • The interview process in some ways is a mock-up of a consultant – client interaction, so remember to be clear, confident, concise and professional with the statements made.
A: Dashboard providing live status updates on important themes – with most frequently asked queries in that theme ConQuest, IIM Shillong
Approach in brief
2021-22
Page 43
Travel Aggregator | Social Impact
IIM-S | Deloitte USI | SIP
Our client XYZ is an online travel aggregator. They provide online ticket booking and hotel booking services. COVID-19 has started spreading across the world and is just about to strike India. The company is developing strategies to effectively cope with the various problems that may arise due to the pandemic. The customer service team (call center) is expected to be strained the most during this period. The client has asked us to present a report on the variety of problems that this department can face and a set of recommendations to deal with the same. List of expected problems: 1. Increase in number of calls 2. Unprecedented requests (cancellations, queries on safety measures etc.) 3. Lack of clarity on local govt policies and hotel policies 4. Remote working arrangements for call center employees 5. Training for call center employees for the right responses
How would the users know about the dashboard? a. Notification trigger via mobile app to redirect customers to the dashboard b. Social media advertisements like Instagram sponsored ads with a link to the dashboard targeted to XYZ customers Does this capture the entire audience, what else can be done? Email push notification as a catch all for all segments – as elders may not be using the app or be active on social media Some questions on contingency planning.
Bucket these in internal and external factors External Factors: 1. Increase in number of calls 2. Unprecedented requests (cancellations, queries on safety measures etc.) 3. Lack of clarity on local govt policies and hotel policies Internal Factors: 1. Remote working arrangements for call center employees 2. Training for call center employees for the right responses Calls have rapidly increased but due to WFH, only 50% of the workforce is effective, what are the solutions that can be rapidly implemented to tackle this? Infrastructure addition is not possible to due to logistical issues a. Prioritization of most frequent queries and aggregation of the common queries into themes b. Dashboard providing live status updates on important themes – with most frequently asked queries in that theme ConQuest, IIM Shillong
2021-22
Page 44
Beer Manufacturing Company | Market Sizing
IIM-S | BCN| SIP
Approach Chart Problem statement
Approach in brief
A company manufacturing beer wants to enter the Kolkata market. They want you to estimate the market size of beer in Kolkata.
•
18-30
Population Split
30-50
Penetration basis behavioural patterns
• •
50+
Case Overview • •
•
Beer Manufacturing company wants to estimate the size of market in Kolkata and perhaps enter the same Currently, they are operating a chain in Bangalore and Mumbai and wants to increase their footprint in Eastern India Due to massive capital investment, client would like to go ahead with only one location for now
ConQuest, IIM Shillong
Identify a parameter or a segment through which you can break down the number Make reasonable assumptions if any datapoint(s) is missing Provide viable solutions addressing identified gaps/ problems
Noteworthy Excerpt
Tips/ Suggestions
Q: Legal age for consuming Beer (21 or 18)?
• Don't ask for too much data, just make clear, rational assumptions. • Candidates should know about the population area and such statistics of their home town or state • The interviewee should take a couple of minutes at the beginning to structure their response instead of diving in from the get go
A: Even though the legal age for alcohol consumption is 21, college students who in turn are below 21 years of age are one of the heaviest drinkers of beer so leaving them out would not give a very accurate result.
2021-22
Page 45
Beer Manufacturing Company| Market Sizing
IIM-S | BCN| SIP
A company manufacturing beer wants to enter the Kolkata market. They want you to estimate the market size of beer in Kolkata. Does the company manufacture premium or regular beer?
They have products in both segments. Do you want the market size in terms of units or sales? First estimate the number of units from there maybe we can look at sales The population of the Kolkata Metro area is around 15 Million. I would split them into different age groups: less than 18(who don't drink beer), 1830(students and young professionals), 31-50 (older professionals) and 50+. These age groups will have different behaviour in terms of beer consumption You took the minimum age of beer drinkers to be 18, isn't the legal age 21? Even though that is the case, college students are one of the heaviest drinkers of beer so leaving them out would not give a very accurate result.
Weekly Weekly Consumption Consumption (Male) (Female)
Population Split
% Population (Assumption)
Population (Number)
18-30
25%
3.75M
2
1
2.47M
30-50
25%
3.75M
2
0.5
1.71M
50+
30%
3M
0.5
0.2
0.17M
Please note that gender ratio is taken as 1:1
Total
Total Weekly Consumption
4.35M
Annual Consumption = 4.35M X 50 = 217.5M
Okay then, go ahead. I would divide each age group by gender having a 50:50 split. Assign values to the percentage penetration to each group and the number of bottles of beer they drink in a week this would give me the weekly consumption. You have not considered the income levels of the population. Do you think it is not a major factor in this calculation? I do not believe it does. Because beer drinkers will consume beer irrespective of how much they earn. Also since the company manufactures beer in different price ranges, they will be able to cater to consumers from all income levels. That seems like a fair assessment. You can go ahead with the calculation. ConQuest, IIM Shillong
2021-22
Page 46
Beer Manufacturing Company| Market Sizing
IIM-S | BCN | SIP
Do you want me to calculate sales? No, I think the client is satisfied with your answer. but they have a follow up question. They operate a chain of microbreweries in Bangalore and Mumbai and they want to expand their footprint into eastern India. They want you to suggest 3 locations in Kolkata where they could set up their breweries. Microbreweries are mostly frequented by young professionals and college students who are from an affluent background. So we need to identify locations which have a high concentration of potential visitors. The 3 localities that come to mind are: 1. Park Street Area: Affluent locality, many colleges nearby, many office buildings nearby but mostly traditional companies with an ageing workforce. Threats: High concentration of rival pubs. 2. Sector V: Many colleges and IT Parks nearby with young workforce. Large potential market. Threats: Lots of pubs around. 3. Newtown: Some colleges and IT parks around but not as concentrated as Sector V. Growing Rapidly. Very few competitors, IT crowd from Newtown frequent Sector V pubs on Friday evenings. I think these are really good options. But where should the client set up their first brewery? What profitability and growth targets does the client have in mind? The client need not break even immediately but are looking at a longer term picture. Then they should set up a brewery in Newtown which would help them the most in achieving their longer term strategy. Thank you. The client certainly will take your recommendations into consideration when making their decision. ConQuest, IIM Shillong
2021-22
Page 47
Travel Company – BPO | Crisis Management
IIM-S | BCN| SIP
Approach Chart Problem statement Approach in brief
Available Options
Given the pandemic situation, a Travel company BPO wants to start work from home. What all factors to be included for such situation?
• •
Chatbots
Autoreply Reply
Automated Calling Schedule
•
Identify a parameter or a segment through which you can break down the number Make reasonable assumptions if any datapoint(s) is missing Provide viable solutions addressing identified gaps/ problems
Case Overview • •
•
Owing to the pandemic situation, a travel company wants to start work from home. Support is provided to people in USA, BPO centres are setup in Bangalore, Hyderabad and New Delhi. Presence in Korea is also there Due to massive capital investment, client would like to go ahead with only one location for now
ConQuest, IIM Shillong
Noteworthy Excerpt
Tips/ Suggestions
Q: What are some factors which will affect any travel company in the next few months, till when lockdown is imposed?
• Don't ask for too much data, just make clear, rational assumptions. • Candidates should know about the cause and effect relation of any solution which they are proposing • The interviewee should take a couple of minutes at the beginning to structure their response instead of diving in from the get go
A: Since, our client is a travel company catering to people in US and we are amidst global lockdown, we have to be aware about the cancellations and alter policies revolving around refund. If we are to continue with the same policies which were there in the normal course of business, our customer base might get affected by the same
2021-22
Page 48
Travel Company- BPO | Crisis Management
IIM-S | BCN | SIP
Given the pandemic situation, a Travel company BPO wants to start work from home. What all factors to be included for such situation Just to clarify how many places this company is operating in India and abroad. Let’s say they give support to people in USA and operates from Hyderabad, Bangalore and New Delhi in India. Abroad they also have presence in Korea, setup of BPO is same. Considering the situation like India, when the whole country went into lockdown at one go. We have to transfer all the calls to Korea for a few days, not only that we also have to setup a chatbot on the website. More details about chatbot.
So, chatbots are the bots used on a website as an instant messenger and solve basics question which are pre-set. In this situation since it’s a travel company, in the initial days the calls would be mostly about the cancellations, so if we setup a bot with such message on website, it will reduce the traffic on the call centre. This will help us to handle calls and make India office to function for work from home by then Not only that the other solution can be being proactive, before customer reaches us we can send them a mail about the cancellation details and steps to follow, so they do not reach to call centre with basic queries. Make sense, what if India closes one by one, like Bangalore first then Delhi. This situation would be much better, lets assume Bangalore went for lockdown 15 days prior than Delhi. Then these 15 days the call can be transferred to Delhi and Hyderabad centre and Bangalore work from home infrastructure can be prepared by then. Same bots and email can also help to reduce the traffic on call centres. Once Bangalore work from home setup is done that centre can handle the pressure when Delhi goes under lockdown and infrastructure is being built
ConQuest, IIM Shillong
2021-22
Page 49
ATM Business | Profitability
IIM-S | BCG | SIP
Approach Chart Fee charged from own customers
Problem statement Revenue
A Public Sector bank is facing declining profits in ATM business
Approach in brief Fee charged from other bank customers
Profit
• Fixed Cost Cost
Case Overview • • •
•
The ATM business of a Public sector bank is facing declining profits Focus is on strategic way of increasing revenue and not on technical Understanding the revenue model of ATM business is important Revenue and cost both depend on from where the customer performs transaction
ConQuest, IIM Shillong
• •
Identify key focus areas Consider all possible reasons for losses Provide structured solution covering identified gaps and address any major innovation in the sector
Payment for transactions by our customers at other bank ATMs
Noteworthy Excerpt
Tips/ Suggestions (if any)
Q: You are missing on one-line item that is crucial for profitability? A: In ATM business, your revenue loss becomes your cost and has a double impact on your income statement, which means if your customer uses other bank ATM, you loose out on revenue and you also have to pay a cost to the other bank for that transaction
• Feel free to ask about business model if you are not sure about that • Bifurcate the multiple reasons for declining profits • Consider feedback as an opportunity and explore alternative approach/ solution
2021-22
Page 50
ATM Business | Profitability
IIM-S | BCG | SIP
Your client is a public sector bank. It has been facing declining profits from its ATM business. Help them in finding solutions to their problem I would like to begin with confirming the problem statement and would also like to ask few clarifying questions. Also, I would like you to please help me with a brief understanding on how ATM business works for the banks there a particular mode of transportation that they want to focus on?
Yes sure, go ahead. So our objective is to just focus on profits or profitability of ATM business
Thanks. And any information on how is our profitability is as compared to the peers Our profits have dropped by 25% in the last 3 years. Other public sector banks have either maintained profitability numbers or have seen a drop of maximum 5-7% in the last years. Private sector banks are having highly profitable ATM business Are the inter-bank commissions standard – meaning is this same for all the banks?
Yes, you may focus on absolute profits So as per my understanding, the revenue for ATM business comprises of the fee that is charged for transactions of own bank customers (over and above the free transactions) plus the fee charged by other banks for other bank customers using our ATM Yes, that’s correct but you are missing on one-line item that is crucial for profitability Is it related to fixed costs or variable costs? No, so in ATM business, your revenue loss becomes your cost and has a double impact on your income statement, which means if your customer uses other bank ATM, you loose out on revenue and you also have to pay a cost to the other bank for that transaction Correct thanks for helping me there. So, this burden is high mostly in cases of free transactions Right So, few more questions I have – How many ATMs do we have, any major split in terms of branch/non-branch, geography etc. How do we stand in terms of the number of ATMs with respect to other banks? ConQuest, IIM Shillong
Okay. So our client has around 3500 ATMs spread across the country at present. Last year they closed 500 ATMs on account of losses. As far as industry is concerned, we have the second largest number of ATMs in India. Highest number of ATMs operated by a single bank is 5000
Yes, it is regulated by RBI Okay, what I can think of here is that we are losing out on revenue which in turn is impacting us with additional costs as explained by you earlier. The reason I feel this can happen is majorly because of 2 reasons – 1. More technical downtime and unavailability of cash in our ATMs, 2. ATMs not located in appropriate places or competition have ATMs strategically located which reduces ATM transactions for us – both own customers as well as other bank customers You may focus on the second hypothesis of yours. Okay, so for approaching this side of the problem, we need to first understand the 3500 ATMs we have and which are the ones that are loss making in terms of no of transactions. We need to have case by case analysis of each ATM or clusters and decide based on profitability, location etc. and a decide to shut down loss making ATMs. Further we need to find out locations which bring high number of ATM transactions like metro stations, IT parks, Residential societies etc. and we need to capture those places where competition is less or is not present. A future driven approach has been applied. Further we can explore option of mobile ATMs and can provide portable ATM machines to shops in residential localities where people can withdraw money using that machine and can collect cash from the shopkeeper. IDFC has been using this model lately That’s good enough. This was a constructive interactive. Thank you and all the very best
2021-22
Page 51
Guesstimate Data Points Population of India is 1400 Million Gender
Rural- Urban Split
Area of major cities (in km2)
Male
52%
Rural
70%
Female
48%
Urban
30%
Age Distribution 0-15
Household Size 30%
15-35
40%
35-60
25%
60+
5%
Population
Hindu
Muslim
80%
15%
Christian Others
2%
3%
Note: These data-points are approximate figures for the purpose of guestimates and are valid as of 2021. ConQuest, IIM Shillong
5
Urban
4
Household Income Distribution
Distribution by Religion Religion
Rural
Delhi
1500
Mumbai
600
Bangalore
700
Hyderabad
625
Chennai
425
Kolkata
200
Category
Annual Household Income (in INR)
%
Approximate Population for Indian Cities
Elite
Greater than 20 lakh
3%
Mumbai
20 Million
Affluent
10 lakhs - 20 lakhs
7%
Delhi/Kolkata/Bangalore
15 Million
Aspirers
5 lakhs - 10 lakhs
15%
Chennai/Hyderabad
10 Million
Next Billion
1.5 lakhs - 5 lakhs
45%
Strugglers
Less than 1.5 lakhs
30%
Lucknow/Patna/Jaipur/Bhopal
3 Million
2021-22
Page 521 Page
ConQuest, IIM Shillong
Estimate the number of movie screens in Delhi Assumptions
IIM-S | Practice Question Conclusion
Splitting Population into different Income groups
Average Number seats in a screen = 300 seats Let’s assume that the percentage split of these categories in each of the income group is 10%, 25% respectively
Therefore, we can say that Delhi has 97.5L/ 32,000 screens i.e., 300 screens
High 30% = 60L
Low 25% = 50L Middle 45% = 90L
Operational Hours in a day = 15 hours i.e., 5 shows per day
Weekdays- Out of 15 hours, generally night time (5 hours) has higher occupancy rate since people return from office and other obligations. Therefore, we can say that 2 shows operate at 70% occupancy rate and 3 shows function at a 60% occupancy rate Weekends – Out of 15 hours, apart from morning and lunch time (5-6 hours), which generally sees some idle seats, the other time can be considered peak hours. . Therefore, we can say that 3 shows operate at 100% occupancy rate and 2 shows function at a 70% occupancy rate
Calculations • • •
Low Income Group = 0L Middle Income Group = 90L* 10%* 4 + 90L* 25%* 1 = 58.5L High Income Group = 60L* 10%* 4 + 60L* 25%* 1 = 39L
Bifurcating population on the basis of movie watching behavior Generally, Low Income group don’t have the luxury to watch movies in cinemas
Movie Buffs
Casual Watchers
Movie Buffs
Casual Watchers
Number of seats required in a month in Delhi = 97.5L (See Calculations) Now, coming to the screen side. Let’s assume that a movie screen operates from 10AM to 1AM, i.e. for 15 hours and caters 5 shows in a day.
Comments/ Suggestions 1 Week Weekdays = 5 days
Consider all types of seats offered in a movie hall.
Weekend = 2 days
3 Shows
X
300 Seating Capacity
X 60% Occupancy
3 Shows
X
300 Seating Capacity
X 100% Occupancy
2 Shows
X
300 Seating Capacity
X
70% Occupancy Rate
2 Shows
X
300 Seating Capacity
X
Rate
Rate
70% Occupancy Rate
Common mistakes would be to consider Friday as part of weekend.
After calculating, we can say that, in a month one screen can cater to (4800(Weekdays)+ 2640)(Weekends) = 7440* (30/7) = 32000 seats Approx.
ConQuest, IIM Shillong
2021-22
Page 531 Page
Estimate the no. of Athletics Inc. gym (Posh areas, high income consumers) customers whom we can sell nutrition food Assumptions
Percentage of people going to gym = 10% Market share = 20% Customers per outlet = 2000 Per outlet Segment customers on basis of age groups 20-35 yrs - 50%, Fitness - 70%, non - 30% 35-50 yrs - 35%, Fitness - 40%, non - 60% 50+ yrs - 15%, Fitness – 10%, non – 90% % of fitness freaks buying our nutrition food – 60% (assuming some people don’t buy nutrition food at all) % of non fitness freaks buying our nutrition food – 20%
Calculations • • •
Posh area customers = 120* 25K* 0.3 = 60,000 Total Fitness Freaks = 0.7* 1000+0.4* 700+0.1* 300 = 1010 Non-fitness freaks = 2000-1010 = 990
ConQuest, IIM Shillong
Posh 30% = 120 sq. km.
Suburbs/Slums 25% = 100 sq. km. Middle 45% = 180 sq. km.
Assuming high income people live in posh area Population density = 25,000 per sq. km
Conclusion
Splitting Total area into different segments
Area of Chennai = 400 sq. kms. Let’s assume that the percentage split of total area into Posh, middle income, suburbs/slums categories is 30%, 45%, 25% respectively
IIM-S | Deloitte | SIP
Population Density 25K per sq. km. = 30L
Finding the numbers of Athletics Inc. gyms in posh areas depending people going to gym and market share
Therefore, we can say that in Chennai 0.6* 1010 + 0.2* 990 = 705 people per store and 705* 30 = 21,150 customers in all will buy nutrition food
People going to gym 10% = 3L
Number of Athletic Inc. customers (20% market share) = 60,000 Number of stores (2000 customers per outlet) = 30 Now, coming to the calculation of potential customers for nutrition food
Comments/ Suggestions 1 store 20-35 years of age 50% = 1000 Fitness Freak 70% = 700
Fitness freaks buying nutrition food – 60% Non-fitness freak buying nutrition food – 20%
Non Fitness Freak 30% = 300
35-50 years of age 35% = 700 Fitness Freak 40% = 280
Non Fitness Freak 60% = 420
50+ years of age 15% = 300 Fitness Freak 10% = 30
Non Fitness Freak 90% = 270
Identify all customers
types
of
Common mistake would be to neglect gym goers who don’t consume nutrition supplement
Estimate the addressable market and convertible market carefully
Total Fitness freaks = 1010, Total Non-fitness freaks = 990
2021-22
Page Page54 1
Estimate the Potential non-transport revenue for a ferry transport company Assumptions
IIM-S | Deloitte USI | SIP Conclusion
Sources of Revenue
Ferry season comprises of Peak season lasting 4 months rest of the months Non peak season
Advertising
Outsourcing
Party Hosting
Total Revenue for ferry transport Rs 3,20,00,000
Fleet size is 10
Ferry Season
Number of weeks per month is 4
Peak Season
% of Ferries used
Revenue per Ferry (INR per week)
Non Peak Season
Ferry season
Advertising
Outsourcing
Party Hosting
Peak Season
100%
20%
40%
Non-peak season
100%
80%
60%
Ferry season
Advertising
Outsourcing
Party Hosting
Peak Season
40,000
80,000
40,000
Non-peak season
20,000
40,000
20,000
Advertising
Outsourcing
Party Hosting
Peak Season
64,00,000
25,60,000
25,60,000
Non-peak season
64,00,000
1,02,40,000
38,40,000
1,28,00,000
64,00,000
Calculations Total Revenue for advertising = 40,000* 10* 4* 4 = 64,00,000 Similarly for the outsourcing, party hosting for peak and non peak seasons Total revenue = 1,28,00,000 + 1,28,00,000 + 64,00,000 = 3,20,00,000 rupees
ConQuest, IIM Shillong
Ferry season Total Revenue
Total
1,28,00,000
2021-22
Comments/ Suggestions Consider all possible channels of revenue Common mistake would be to neglect the seasonal effect on ferry business
Page Page55 1
Number of calls received by all the customer care centres in Delhi in a month Assumptions
IIM-S | Deloitte USI | SIP Conclusion
Splitting Population of Delhi into different Age groups
1.
Total Population of Delhi is 2 Cr 2. Population below 18 years of age and above 60 years are assumed to be not working 3. % of people working in customer care centres is 15%
Total calls received by Customer care centres in Delhi in a month = 2,52,00,00,000
Above 60 years 5% = 10L
Up to 18 years 25% = 50L 18- 60 years 70% =140 L
Bifurcating population on the basis of nature of work done
% of people working in other profiles
% of people working in customer care centres
Population working in Customer care centres = 21,oo,ooo Let’s assume that the working hours in a call centre are from 9am to 6pm with 1 hr break time.
Comments/ Suggestions Total Working Hours
Calculations Up to 18 years of Age = 0.25* 2,00,00,000 18 – 60 years of Age = 0.7* 2,00,00,000 Above 60 years of Age = 0.05* 2,00,00,000
No. of working days in a week (B)
8
5
Less : Idle Time per day (Non call Time)
2
No. of weeks in a month (C)
4
Effective Hours (A)
6
Total Calls hours per person (A x B x C)
120
Consider both BPO and in house customer care centers
Common mistake would be to neglect the cooling period between calls
Total Hours spent on calls in Delhi (Working population x Total calls per person) = 25,20,00,000 Total Time spent on 1 Call (in mins)
6
No. of calls per hour
10
Total calls received by Customer care centres in Delhi in a month = 2,52,00,00,000
ConQuest, IIM Shillong
2021-22
Page Page56 1
Estimate the household demand for Natural Gas in India Assumptions 1.
BPL population assumed to not have any natural gas connections 2. Rural : Urban split is 70:30 3. Unit of measurement is assumed as Standard Cubic Metres (SCM)
Total Population of India = 140 Crore
IIM-S | Practice Question
Rural Population = 74 Crore
Urban Population = 31 Crore
Assuming 5 members per household
Assuming 4 members per household
Rural Households = 15 Crore Rural Households Low (40%)
Percentage of Households having gas pipelines Households using Natural Gas
• •
Rural Households = 74/5 Urban households = 31/4
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Middle (40%)
Urban Households High (20%)
Low (20%)
Middle (60%)
High (20%)
6,00,00,000
6,00,00,000
3,00,00,000
1,55,00,000
4,65,00,000
1,55,00,000
1%
5%
10%
20%
40%
70%
6,00,000
30,00,000
30,00,000
Avg. Annual
31,00,000
Households
X consumption =
Total Consumption
Rural Households
66 Lakh Households
X
180 SCM
=
119 Crore SCM (approx.)
Urban Households
326 Lakh Households
X
200 SCM
=
652 Crore SCM (approx.)
Calculations
We can say that total household demand for natural gas is 771 Crore SCM, primarily driven by increase in gas pipeline adoption in urban areas
Urban Households = 7.75 Crore
Particulars
Number of households
Conclusion
Population above poverty line = 105 Crore
BPL 25% = 35 Cr
2021-22
1,86,00,000
1,08,50,000
Total House Hold demand for Natural Gas in India = 119 + 652 = 771 crore SCM
Comments/ Suggestions Break down the problem in all possible consumer segments
Be aware about the unit in which natural gas is measured
Page Page57 1
Estimate the number of Airplanes flying out of Delhi Assumptions 1.
Yearly load taken by cargo planes = 1000 Kilo tones. Dividing the types of planes in three part small, medium and heavy with share of 30%,50% and 20% respectively. Load carrying capacity of 50, 100 and 200 tones respectively
IIM-S | Practice Question Conclusion
Type of Flight Passenger Planes
The number of planes taking off from the airport is 945 per day
Cargo Planes
Peak Traffic
Medium Traffic
Low Traffic
Time on runway
30 sec
30 sec
30 sec
2. Time taken by plane to take off is 30 sec with time between the two flights depend upon peak, medium and low traffic demand at 2m,4m,6m respectively. Rush hour, medium traffic, low traffic have time span of 10,8,6 hours respectively.
Time between two flights
2 min
4 min
6 min
Total time taken
2.5 min
4.5 min
6.5 min
Number of hours
10 hrs
8 hrs
6 hrs
3. Number of lanes in airport is 3, airport is running 24X7 and there are no other types of planes flying out from the airport
Step 1: We start by assuming the type of planes which fly out of the airport. Two major type passenger planes and cargo planes are taking off from the Delhi airport
Calculations Number of passenger flights = (10* 60 / 2.5) + (8*60/4.5) + (6* 60 / 6.5) = 402 Number of flights: 402*50%*3 = 603 flights Cargo Flights = 342 flights Total flights per day= 945
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Light Capacity
Medium Capacity
Heavy weight capacity
Average Capacity
50 tones
100 tones
150 tones
Load sharing
30%
50%
20%
Approach
Step 2: Generally, the time taken by flight to take off will be same. So, the time between two flights will vary depending upon the flight traffic. If it is a rush hour then there should be minimum time difference between two flights which is 2 min.
Step 3: Now, we can assume how many hours are rush and how may are not. Do the respective calculations to reach the number for three laned in airport. And hence get the total number of passenger flights. Step 4: Cargo flights are also taking off from the airport. Now, due to varying size of cargo planes from 10 tones to 200 tonnes. So, assuming a ball park range of 50 ton, 100 ton and 150 ton load capacity for light, medium and heavy capacity cargo planes. Also, the load sharing would be different i.e. assuming 30% for light, 50% for medium and 20% for heavy capacity planes. Earlier assumption at 1000 kilo tones for the yearly capacity of the airport we can get the total number of cargo planes per day.
Comments/ Suggestions Consider cooling period between two flights Common mistake would be to neglect the cargo planes in your calculations
Step 5: Adding the number of planes for cargo and passenger planes will give the total number of airplanes taking off from the airport
2021-22
Page Page58 1
Estimate the annual market size of diapers in India Assumptions 1. 2. 3. 4.
5. 6. 7.
Assuming the size of population 100M Dividing into 40% urban and 60% rural Family size for urban 4 and rural 6 Assuming each family has 2 parents and hence kids in rural 2 per family and 4 per family in rural 3 years maximum age for child using diapers Rural has 70% access to diapers while urban has 100% Number of days in year 360 and number of diapers consumed is 4 per day
IIM-S | Practice Question
Total Population 40%
(100 M) 60%
Urban
Rural
Family Size =4
Family Size=6
10 M Families
10 M Families
20 M Children
40 M Children
2% child below 3 yrs
4% child below 3 yrs
0.4 M children
Market Size
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100% access to diapers
2189 M diapers is annual consumption
the
Comments/ Suggestions Discount for families who don’t use diapers
1.6 M children
Calculations Market Size: (0.4*100%) + (1.6* 70% ) = 1.52M Average consumption per day = 4 No. of days in Year =360 Total no of diaper consumed= 1.52*4*360=2189 M per year
Conclusion
70% access to diapers
Common mistake would be to assume equal family size in rural and urban
Target Market Size- 1.52M
2021-22
Page Page59 1
Estimate demand for the Television market in India in a year Assumptions 1.
BPL population assumed to not have any Televisions 2. Rural : Urban split is 70:30 3. Average Life of a TV = 5 Years 4. Growth Rate of the Market = 5%
Total Population of India = 140 Crore
IIM-S | Practice Question
Rural Population = 74 Crore
Urban Population = 31 Crore
Assuming 5 members per household
Assuming 4 members per household
Rural Households = 15 Crore Rural Households Low (40%)
Middle (40%)
Urban Households High (20%)
Low (20%)
Middle (60%)
High (20%)
Number of households
60,000,000
60,000,000
30,000,000
15,500,000
46,500,000
15,500,000
Average TV Per Family
0.5
1
1.5
0.75
2
3
30,000,000
60,000,000
45,000,000
11,625,000
93,000,000
46,500,000
Total TV
Total TVs in India= 28.5 crores Approximately Calculations Rural Households = 74/5 Urban households = 31/4
We can say that total demand for Televisions is 6 crores per year
Urban Households = 7.75 Crore
Particulars
• •
Conclusion
Population above poverty line = 105 Crore
BPL 25% = 35 Cr
Total TVs = 28.5 crores Total Demand of TV
=
Average Life of a TV = 5 Years
=
5.7 crores approximately
Comments/ Suggestions Discount population products
for BPL in luxury
Common mistake would be to assume only whole numbers as a possible unit of TV owned by a family
Considering growth Rate of 5% for Television Market, we can say that Total Demand would be 6 crores
ConQuest, IIM Shillong
2021-22
Page 60 Page 1
Estimate the number of Ketchup sachets sold/distributed by a single McDonalds store in a day Assumptions Number of counters McDonalds Store = 5
IIM-S | Practice Question Conclusion
Maximum Orders which the store can cater to in
the
Time Taken to complete 1 Order = 4 mins
Operational Hours = 8AM to 11 PM. i.e., 15 hours
5 Counters
X
15 Operational Hours
X
15 Orders in 1 Hour
1125 Orders
=
Now ,coming to the demand side. We will divide the day into various time slots and accordingly, occupancy can be assumed
Time Slot
Number of Hours
Maximum Orders
Occupancy Rate
Reasons
Orders Taken
8AM to 11 AM
3
225
65%
Breakfast time
146
11 AM to 2PM
3
225
60%
Lunch Time
135
2PM to 6 PM
4
300
40%
Post Lunch (Idle Time)
120
6PM to 9PM
3
225
80%
(Evening Snack Time)
180
9PM to 11 PM
2
150
70%
(Dinner and closing time)
105
Total Orders Executed in a day = 685 Approximately
Calculations Orders which can be completed in 1 Hour = 60Mins/4 Mins = 15 Orders
Total ketchup sachets sold/ distributed by a single McDonalds store in a day are 2740 sachets
Since, Burger and Fries are the most dominant items sold by McDonalds. It is assumed that each order has 2 Burgers and 1 Fries on an average. Further, to order 2 burgers, 3 ketchups are required and for 1 fries, 1 ketchup would be required i.e., 4 Ketchup Sachets per order
Comments/ Suggestions Approach with proper division of time slots Don’t forget to take appropriate assumption and explain your rationale behind the occupancy rate taken for each time slot
Total Sachets Sold/Distributed are= 685 x 4 = 2740 Sachets
ConQuest, IIM Shillong
2021-22
Page Page611
Estimate the household broadband connections in India Assumptions 1.
BPL population assumed to not have any broadband connections 2. Rural : Urban split is 70:30
Total Population of India = 140 Crore
IIM-S | Practice Question
Rural Population = 74 Crore
Urban Population = 31 Crore
Assuming 5 members per household
Assuming 4 members per household
Particulars
Rural Households
Low (40%)
Average broadband connections per household Broadband connections
We can say that total household broadband connections in India are 1.68 Crores approx. with higher penetration in urban areas
Urban Households = 7.75 Crore
Rural Households = 15 Crore
Number of households
Conclusion
Population above poverty line = 105 Crore
BPL 25% = 35 Cr
Middle (40%)
Urban Households
High (20%)
Low (20%)
Middle (60%)
High (20%)
6,00,00,000
6,00,00,000
3,00,00,000
1,55,00,000
4,65,00,000
1,55,00,000
0.25
0.50
1.25
0.50
1.00
2.00
1,50,00,000
3,00,00,000
3,75,00,000
77,50,000
4,65,00,000
3,10,00,000
Calculations • •
Rural Households = 74/5 Urban households = 31/4 Broadband Connections
ConQuest, IIM Shillong
Rural Connections 825 Lakh Connections
+
Urban Connections
=
Total Connections
+
853 Lakh Connections
=
1,678 Lakh Connections
2021-22
Total house hold broad band connections in India are 1.6 Crore
Comments/ Suggestions Approach with household estimation not per person approach Discount for BPL families Common mistake would be to assume only whole numbers as a possible unit of broadband connection owned by a family
Page 62 Page 1
ConQuest, IIM Shillong
Glossary
20,000 Feet
80/20 Rule or Pareto Principle
AOB: Any other Business
Acquisition
Actionable
The big picture—For example: “ The view from 20,000 feet.” Other variant include “30,000 feet,” “bird’s eye view,” and “the 1,000-mile view.”
This guideline suggests that 80% of the value of effort can be achieved in 20% of the time. It is a constant reminder in the industry to focus on the most important aspects of a project, rather than getting mired in the details, trying to achieve 100% of the results in far less time.
Term generally used while developing an agenda for the team meet. Denotes time schedule to discuss miscellaneous topics in a meeting.
When a company, acquirer, purchases and absorbs the operation of another, i.e. the acquired. The acquirer gets control of acquired company
Can be acted upon or can be done.
Adding Value
A general phrase that can mean a number of things, but all of them revolve around the idea of being productive. Evolved from the concept of “value added.”
ConQuest, IIM Shillong
Alignment Model of Strategic Planning
B2B
B2C
Balanced Scorecard
Focuses especially on aligning the internal operations to work effectively & efficiently towards the mission and goals of the organization.
Business to Business, referring to a company’s primary audience for sales and marketing.
Business to Consumer refers to a company’s primary audience for sales and marketing.
A strategic framework for categorizing your strategy into four interdependent balanced areas financial, customer, internal business processes, and employee learning & growth.
2021-22
Page 63
Glossary
Bandwidth
Baseline
Benchmarks
Beach
Best of Breed
Availability. For e.g. : “I will have band width to take on that project if I complete this month customer attrition model.”
Base level of previous or current performance that can be used to set improvement goals and provide a basis for assessing future progress.
Metrics or standards that competitors in the client market attain. Used usually for operational efficiency.
It refers to a Consultant that is not actively enrolled in any project and therefore not on a billable project.
Something that is considered superior to its substitutes; can apply to many things in Consulting. See “Best Practices.”
Best Practices Developing benchmarks for practice or techniques that have shown superior results relative to other practices or techniques.
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Big 3
aka “MBB” 1- McKinsey 2- Bain 3- BCG
Big 4
Blanks
Deloitte Ernst & Young KPMG PriceWaterhouseCoopers
PowerPoint slides that are drawn on a notepad. More senior Consultants often describe a presentation yet to be drafted by “blanking” a series of slides and giving them to a junior Consultant to perform the work required to complete them.
2021-22
Page 64
Glossary
Boil the Ocean
Bottoms Up
Business Plan
An idiomatic phrase meaning to undertake an impossible task or project or to make a job or project unnecessarily difficult. The phrase appears in business as well as in other group settings and is considered to be a negative phrase in relation to how one approaches a task.. For example: “We don’t need to boil the ocean to get the exact number on this. Just make an estimate based on historical data for one product line.”
Developing an estimate by starting with the lowest-level assumptions and building those all the way up to an estimate. For example, estimating market size by starting with individual products and prices and adding up to a total industry size. Contrast with “Topdown.”
A formal guide outlining your business goals and plans to achieve the goals. It may also include background information on the organization attempting to achieve these goals.
Buttoned Down
Bypass Attack
Completed thoroughly and professionally. For example: “Get this customer acquisition model buttoned-down and then we’ll move on to international market sizing.”
It avoids any belligerent move directed against the competitors’ territory. It involves bypassing competitors and attacking easier markets.
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Buckets
2021-22
Categories
CAGR
Acronym for Compound Annual Growth Rate. For example, if a market grows from $100 billion to $230 billion over the course of 9 years, the CAGR is 9.70%. This is analogous to the Internal Rate of Return in Finance.
Page 65
Glossary
Capacity Building
Cascading
It is the process of creating, improving and retaining core skills, knowledge and capabilities of an organization’s people and processes.
The process of aligning the various KPIs, goals, and projects in an organization to the higher strategy. All actions taken should be contributing to a higherlevel goal or strategy.
Campus Hire
Case
Capacity
A consultant hired directly from under graduate or business schools, as opposed to “experienced hire”
A consulting project. (Also called as a Study or an Engagement)
Your available time and energy for additional tasks
Cause and Effect
Charge Code
Change Management
Circle Back
Core
The process of identifying the relationship between things or events. The purpose is to identify if one event or action caused another to occur.
An unique code provided with each project/ assignment to which you can charge work-related expenses
A service provided by consulting firms to help with a period of major company change, such as an acquisition or a major shift in strategic priorities.
To catch up again later, but used to indicate that now is not the right time. For example: “Let’s circle up after the 6 p.m. call. I have a few tweaks to make to my model.” Compare with “Touch base.”
The chief concerns of a company or business unit.
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2021-22
Page 66
Glossary
C-Suite
Core Client
Core Competencies
Refers to any number of executives with a capital C at the beginning of their title (the C stands for “Chief.” For example: COO, CFO, CEO, CIO, CMO, etc.
A client with a longstanding firm relationship, and one in which there is continual dialogue between senior executives even if there are no ongoing projects
Similar to Core, but usually used to address areas where a company performs very well compared to competitors or similar companies. For example: “Our core competencies in procurement have led to larger gross margins than other manufacturers.”
Cultural Competence
Cost Leadership
Crisp
It is one of the three competitive strategies an organization may choose to focus on to gain a competitive advantage over their competitors. It requires the organization to offer the lowest prices on goods/services in the marketplace.
An adjective indicating that the referenced work or analysis is thorough and complete, perhaps by gastronomical allusion to food that is fully prepared; it is duly noted that crisp objects, while ostensibly finished, are also far more brittle and prone to shattering
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A set of values, behaviors, attitudes, and practices which enable people to work effectively across racial/ethnic and cultural lines.
2021-22
Cost Benefit Analysis
Critical Success Factor
A management tool that involves calculating or estimating the monetary costs and the potential benefits of a proposed course of action.
The term used to describe an element that is required to reach business goals & vision.
CriticalPath Path Critical The key tasks needed in order for a process to achieve a desired result.
Customer Perspective The external customer’s point of view on an organization, & the value they place on the product/services offered by the organization. Page 67
Glossary
Dashboard
Due Diligence
Differentiation
Deep Dive
Deck
A reporting tool used to consolidate important metrics & information to display in one concise layout to inform the viewer at a glance of current data.
Comprehensive study / survey of a business model with an aim to set clear expectations, risks, etc. as part of a business proposal.
Differentiation is a competitive strategy used by organizations to gain a competitive advantage over its competitors. The organization using this strategy will focus on offering unique products/services to different customer segments.
Similar to “double click”, this means a thorough and in - depth exploration of particular topic.
Slide presentation ,typically in MS PowerPoint.
Drill Down To get beyond the higherlevel summary in to the details.
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Critical Deliverable Path Anything that is owed by you to your manager/ team, or owed by team to client
Double click
Economic Value Added
Elevator Pitch
Similar to “deep dive”, this means a thorough in-depth exploration of a particular topic
Method to measure the financial performance which assesses actions and activities of an organization as to whether they have created value and how much for shareholders.
The results and key conclusions in roughly a paragraph. Derived from the idea of being able to convince someone of something important within the span of a shared ride in an elevator.
2021-22
Page 68
Glossary
Experience Curve Analysis
Empowerment Evaluation
The experience curve analysis is a model which can be used to understand the trend between production output and production costs.
An evaluation approach that aims to improve the organization’s people to help them achieve their goals.
Facetime Meeting in virtually.
person
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Critical Fact Pack Path or
Typically, a “pack” of information that provides essential “facts” on a project or an industry or a company.
Elevator Test
Encirclement Attack
Experienced Hire
A test of one’s ability to explain concepts in a short-period of time (typically 60 seconds or less). The elevator test represents a hypothetical situation where you are sharing the elevator with a VIP and need to give them a quick summary/presentation during the ride
Only well-financed firm use it. It involves an attempt to capture a wide slice of the competitors’ market through a grand offensive on several broad fronts.
A consultant hired from an other company, typically with a higher starting position and salary than 1st year consultants.
Flank Attack
Focus Areas
Focus Group
This strategy is used when the challenger sets its sights on its target weakest points.
Focus areas describe the things that you want to accomplish to deliver your vision - summarized into distinct themes. When all of your focus areas have been achieved you should also have achieved your vision.
A form of qualitative research which engages a group of people (usually 3 or more) in an interview-like process in order to gauge their perceptions, opinions, beliefs, and attitudes to a particular product, service or topic.
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Forecast
Frontal Attack
Gain Traction
Gantt Chart
Guesstimate
The estimated value of a metric at a future point in time. Different from the target amount of a metric, a forecast estimate what the metric will likely be based on historical data.
This strategy is used when the challenger masses its competitive forces right up against those of the opponent by attacking its competitors’ strengths rather than its weaknesses. For this to succeed, the challenger needs a strength advantage over its opponent.
Have a client or senior person engaged in an idea. This is an important concept for selling new Consulting projects, and/or for suggesting an addition or change to a Consulting work plan.
Type of bar chart that illustrates a project schedule with start and finish dates, deliverable, etc.
An educated guess.
Gap Analysis
GMC
Greenfield
Granular
Guerrilla Attack
Gap analysis is a technique used by businesses to determine the difference between actual results and expected results.
Global Management Consultancy, some times referring to just the Big 3, sometimes referring to the Big 3 plus the Big 4 accounting firms.
New opportunity. For example: “Entering the Indonesian insurance market is a true Green field opportunity for the Company.”
A detailed level of abstraction; often used in the context of increasing the fineness of the analysis, as in: “We need to get more granular here”
It involves making small, intermittent attacks on different territories of the opponent. A guerilla attacker uses both conventional and unconventional means of attacking the opponent.
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Glossary
Hands
Hard Data
Hard Stop
High Level
Human Capital
Often prefaced with ‘client,’ indicates the interpersonal skills of an individual in relation to a particular group of people, as in, “That manager sure has great client hands”
Hard data describes data in a numerical form that can be precisely measured and quantified. It represents objective measures of data such as revenue, costs, profit etc.
Used to indicate that after the time indicated, the listeners are on their own, because the person stating that they have a hard stop sure isn’t going to be around to help after then
Similar to 5,000-mile view, but high-level can also mean a very rudimentary analysis (often lacking in detail)
Describes the skill, knowledge, and output of employees as physical assets to organization.
Hit the Ground Running The ability to add value in a project quickly, meaning getting up to speed on the important details and understanding and taking on next steps quickly.
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Hybrid Strategy
Joint Venture
KPI
Litmus Test
It is a term used to describe organization applying combination of two or more competitive strategies
A joint venture is a form of strategic partnership formed between a foreign organization and a domestic organization
A KPI is a stable indicator that helps to determine whether a goal has been accomplished (KPIs can apply equally to your vision, focus areas, organizational goals)
A test that is an effective and definitive way of proving something or measuring it. A litmus test is only determined by a single key factor.
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Glossary
Lagging Indicator
Leading Indicator
Leverage
A measurable fact that records the actual performance of an organization. A lagging indicator includes the following- annual sales, growth in annual sales, gross margin, annual net income and growth in annual net income- these all represent facts of the organization.
A measurable factor that changes before the company starts to follow a particular pattern or trend. Leading indicators are used to predict changes in the company, but they are not always accurate. Leading indicators can include- % growth in sales pipeline, % growth in new markets, number of new patents.
Make use of; translate into additional gains. This is an extremely common Consulting word. For example: “We just need to leverage the core competencies we have in the mortgage lending business to our other product lines.”
Low Hanging Fruits The things that can easily get done.
Managing Up
Market Segmentation
MECE
Megatrends
Helping superiors to do their job better by giving them feedback, keeping them in the loop, and anticipating problems they may have and helping them resolve them. Managing up is an incredibly valuable skill for junior Consultants.
Market segmentation describes the process of breaking up a market into clearly distinguishable and relevant subgroups based on a common factor, such as interests, demographics, sociographic etc.
Stands for Mutually Exclusive, Collectively Exhaustive. A standard for developing communications that cover all of the relevant issues effectively without redundancy. Very prominent concept at Mc Kinsey.
Megatrend is a term given to global economic transformations that are persistent and affect businesses, society, politics, technology, and environment.
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Glossary
Mission Critical
Mission Statement
A product, concept, analysis, or service that is irreplaceable. For example: “Do we really need this expensive item? Is it mission-critical?”
A mission statement describes an organization’s core purpose for existing. A mission statement is not a goal and does not usually have a time-frame attached to it.
Near-Shore Outsourcing
Offshoring
Near-shore outsourcing is the strategy of moving certain business operation or functions to low-cost countries that are close to the home country of the organization.
It is the term given to the process of moving business operation or functions of an organization to a low-cost country in order to reduce costs.
Onboard
Operating Costs
Outsourcing
Paradigm
The status of being assigned to a case, engagement, or project·
Operating costs are the expenses incurred on a day-to- day basis when running an organization or project, as opposed to costs associated with production.
Outsourcing is the process of handing over certain business operations to an other organization to take care of on a contractual basis. This generally occurs when businesses make the decision that contracting out a specific function to another company would be more cost effective than carrying it out internally.
“Pattern” or “model” or “framework”
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Glossary
Parallel Hire
Performance Driver
Pipe or Pipeline
PIOUTA
POA
A consultant hired from another company, typically with a more senior position and higher starting salary than 1st year consultants. See also “experienced hire”
A performance driver is a metric used generally as a key indicator or early warning that an issue is present.
Short for pipeline and refers to upcoming projects the Consulting firm may have available (e.g. Supervisor, what is in the pipe?)
Pulled it out of thin air
Plan of Action
Push Back
Progress Review
Qualitative
QC
To indicate to a superior Consultant that something is difficult or challenging and may not be realistic. Being able to push back effectively when a manager may be overpromising or unrealistic is an important, delicate skill. Pushing back can also be done if the Consultant is being overworked and feels “stretched too thin.”
A periodic meeting to review progress made and results from time to time. Can also refer to a professional performance review for Consulting.
A subjective form of measurement. Examples of qualitative measurement are surveys and customer feedback forms.
Quality control, typically referring to need to check for typos, grammar mistakes, calculation errors, etc.
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Glossary
Space
Stand Up Call
Straw Man
Thinking Out of the Box
A market, arena, field of endeavor, or general area
A ‘quick’ round table team call to update status from each team member/lead.
A construct presented purely for the sake of argument, with the implication that it is not designed to withstand repeated attacks
The ability to be creative or innovative in solving a difficult problem. “Thinking out of the box” typically is a blanket solution to a difficult problem that no one has solved yet.
Top Down
Touch Base
Developing an estimate by starting with the highest-level assumptions and using estimates to drill down to a smaller-level estimate. For example, estimating market size by starting with the number of potential customers and estimating how many purchases the product, how frequently, and at what price points. Contrast with “Bottomsup.”
To catch up with someone, typically a person with whom you’ve not had much contact lately. For example: “I’ve been dealing with another client all week and I know I owe you some numbers. We’ll touch base after my afternoon conference call.”
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Unique Selling Proposition
Up or Out
USP is a marketing technique used to highlight how a business’ products/ services are unique from competitors.
Employee promotion policy where if you’re not promoted “up”, you’re counseled “out” of the company.
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Glossary
Upward Feedback
Value Chain
Value Add
Value Proposition
The process of providing feedback “upward” to more senior employees, from managers to partners
The overall process or actions that an organization completes in order to add value to an item. This may include marketing, promotion and after-sales support
A takeoff on “value added,” which is based on the notion of increasing shareholder wealth by contributing to the profitability and therefore value of a firm. Now used to describe anything that “adds value,” i.e., is positive, productive, and helpful. For example: “Consultants are clearly value-add professionals.”
A statement that outlines how an organization intends to differentiate themselves from their competition and provide value to its customers.
Vision Statement
White Space
Work Plan
Weeds
Workstream
Writing a Deck
Vision statement is an aspirational description of what an organization wants to achieve or accomplish in the mid to long term.
An opportunity for a company to generate revenue where it is not currently. For ex: generating revenue from an existing product in a new market.
It is a schedule for completing a project or set of tasks for a project. The work plan is a dominant issue in all Consulting projects.
The intricate details of an analysis which some times might not be necessary for the solution.
A group of tasks that make up a project.
Compiling a slide presentation, in Microsoft PPT
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