Consulting firms use case study questions in interviews to assess whether you can think commercially. It's not something you're trained in at university, and it's hard to tell from your exam results and extracurricular activities whether you have the ability to do it. Could you develop the judgement and expertise to advise clients on whether it's a good idea to enter a new market, how to respond to changes in their competitors' strategies, or simply where they can most efficiently cut costs?
As candidates are becoming increasingly familiar with the concept of case studies, employers are responding by making them more elaborate. But the questions you'll be asked are still very likely to fall into one of the following categories:
The Business Case Study
A typical brainteaser would be: ï¿½Why are manhole covers round?" As a general rule, they'll pose questions you've never thought about before and they're designed to test how quickly you can think on your feet. However, they're quite rare now, so you don't need to worry too much about them. If you do get thrown one, stay calm, think for a moment before answering, then articulate your thought processes clearly to your interviewer.
Guesstimates come in all shapes and sizes - you might be asked how many apple trees there are in the UK, how many bottles of champagne are consumed in the UK annually, or how many solar panels have been put on British roofs during the past year. What they all have in common is that they are all quantitative questions.
When coming up with your response, always consider why the answer might be important to a business operating in the area, as your interviewers may go on to ask you questions like: ï¿½Is is worth expanding into this area or should the client exit the market?" or: ï¿½Given the current economic climate, how can the client capitalise on its market share most effectively?"
Guesstimates come in four forms:
1. Population-based: ï¿½How many post offices are there in the UK?"
Best way of answering: ï¿½I live in a town of 12,000 people, and we've got three post offices. Taking this rate as the average, I'll assume that one post office serves about 4,000 people. The UK population is 60 million, so there are 15,000 post offices in the UK."
2. Household-based: ï¿½How many toasters were sold in the UK last year?"
Best way of answering: ï¿½One household has about one toaster. The average British household consists of three people. Given that the UK population is 60 million, there are 20,000,000 households. Assuming a toaster needs to be replaced every four years, one quarter of all households are going to buy a toaster every year. So five million toasters are sold in the UK each year."
You might also consider other places using toasters, such as hospitals, food courts and offices. If you estimate that these places buy approximately 500,000 toasters each year, there are 5,500,000 toasters sold in Britain each year.
3. Individual-based: ï¿½How many novels are sold in the UK each year?"
Best way of answering: ï¿½Taking the UK's population to be 60 million, and estimating average life expectancy in this country to be 80 years, we can calculate how many people there are of any particular age. In reality, there are fewer old people than young people, but to keep things simple we'll just assume that there are 750,000 people of each age. Assuming that people between the ages of 15 and 80 are going to read novels (children are going to read children's books while elderly people might have difficulty reading as their eyesight deteriorates), there are 65 relevant year groups of 750,000 people each, making a total of 48,750,000 people who read books. To simplify, I'll assume that 50 million people read books every year. I'll suppose that on average each adult buys three novels a year. Multiplied by 50 million, that means 150 million novels are sold each year."
4. ï¿½What do you think?" questions: These questions can range from: ï¿½How heavy is a car?" to: ï¿½How long would it take to evacuate London?"
As a general rule, it's best to answer these by breaking the problem into smaller components. To use the car example, think of all of its parts, for example, the steel exterior, windows, wheels, engine, and interior, as well as variable weights (for example, number of passengers, fuel, luggage). Assign weights to each of them, making sure that you base your assumptions on some kind of logic (for example, fuel will weigh less than water as it has a lower density). Then add up your values to reach an approximate total.
The Business Case Study
As with the Guesstimate questions, the way to tackle these is to go through the problem step by step - we recommend starting with general issues that affect all companies, then drilling down into the factors that are relevant to the company's industry and finally thinking specifically about the business at which you've been asked to look.
For example, if asked to dissect Gap, you could start with general economic factors and make some observations about consumer confidence, whether incomes are rising or falling, the availability of finance, and interest rates.
Next, zoom in a little to focus on the industry in which Gap operates - that is, the rag trade. Selling clothing to the general public is a highly competitive business where the consumer is king. There is an almost infinite choice of substitute products from rival firms, so sourcing cheap supplies to maintain profit margins is important.
Then you could move on to look at Gap itself. You might think you don't know much about its business model, but anyone who shops regularly there would be able to produce some insights and if you don't, you could compare your impressions of the chain with what you know about the outlets where you do buy your clothes. You could think about Gap's marketing and branding, locations, ambience of its stores, and customer service.
Finally, you should also consider any factors relating to the geographies in which the company operates. Gap is American, but sources its clothes from China. So, for example, if Chinese workers were to ask for wage rises, Gap would face higher costs and pressure on its profit margins.