Case Interview: Step-by-Step Guide (Updated for 2020)


Table of Contents

1. Introduction

2. Understanding the Case Background

3. Asking Clarifying Questions

4. Structuring a Framework

5. Starting the Case

6. Solving Quantitative Problems

7. Answering Qualitative Questions

8. Delivering a Recommendation

9. Summary

10. Next Steps




1. Introduction


Case interviews are a special type of interview that every single consulting firm uses. Regardless of which firm you are applying for, you will be given multiple case interviews that you are expected to pass.



 A case interview, or “case”, is simply a 30- to 60-minute exercise in which you and the interviewer work together to develop a recommendation to answer or solve a business problem.


These business problems can be anything that real companies face:

  • How can Coca-Cola increase its profitability?


  • What should Netflix do to increase customer retention?

 

  • How should Apple price its new iPhone?

 

  • Should Disney open another Disneyland theme park?


In the beginning of the interview, the interviewer will give you a business problem. At the end, you’ll present a recommendation and provide 2 – 3 reasons that support your recommendation.


These 2 – 3 reasons will likely be both quantitative and qualitative. Expect to interpret charts and graphs, perform calculations, brainstorm ideas, and have qualitative discussions to develop support for your recommendation.


The good news is that there is no right answer. As long as you have logical reasons and evidence that supports your recommendation, the interviewer will accept your answer.


The bad news is that you can be given any type of business problem. Cases can be in any industry, from pharmaceuticals to aviation. Cases can be in any function, from strategy to operations.


Regardless of the variety of business problems you could be given to solve, case interviews all follow the same format or structure. This is good news for you because you can use the same strategies for every case interview.

 

 

As a former Bain consultant and interviewer, I’ve helped 5,000+ students across 13+ countries. In this guide, I’ll work through an actual case interview step-by-step and provide you effective strategies for tackling each step.




2. Understanding the Case Background


The case interview will begin with the interviewer giving you the case background information. Let’s say that the interviewer reads you the following: 


Interviewer: Our client, Coca-Cola, is a large manufacturer and retailer of non-alcoholic beverages, such as sodas, juices, sports drinks, and teas. They have annual revenues of roughly $30 billion dollars and an operating margin of roughly 30%. Coca-Cola is looking to grow and is considering entering the beer market in the United States. Should they enter?


As the interviewer reads this, take notes. It is important to understand what the objective of the case is and keep track of information.


One strategy for taking notes effectively is to turn your paper landscape and draw a vertical line to divide your paper into two sections. The first section should be roughly two-thirds of the page while the second section will be one-third of the page.


Take notes in the second section of your page:

 

 

After the interviewer finishes giving the case background information, confirm that you understand the situation and objective. Provide a concise synthesis like the following:


You: To make sure I understand correctly, our client, Coca-Cola, is a large manufacturer and retailer of non-alcoholic beverages. They are looking to grow and our objective is to determine whether or not they should enter the U.S. beer market.


Interviewer: That sounds right.


Make sure your synthesis is concise. You do not want to regurgitate verbatim everything that the interviewer has said. Only mention the most important pieces of information.


You should also make sure you verify the objective of the case. Answering or solving the wrong case objective is the quickest way to fail a case interview.




3. Asking Clarifying Questions


Next, you’ll have the opportunity to ask questions before you begin thinking about how to solve the case.


At this point, only ask questions that are critical for you to fully understand the case background and objective. You’ll be able to ask more questions later.

 

 

You might ask a few questions like the following:


You: Is Coca-Cola looking to specifically grow revenues or profits?


Interviewer: Coca-Cola wants to grow profits.


You: Is there a particular financial goal or metric Coca-Cola is trying to reach within a certain time frame?


Interviewer: They are looking to grow annual profits by $2B within 5 years.


You: Great. Those are all the immediate questions I have for now.




4. Structuring a Framework


After you understand the case background and objective, lay out a framework of what areas you want to look into in order to answer or solve the case.


A framework is simply a tool that helps you structure and break down complex problems into simpler, smaller components. Think of a framework as brainstorming different ideas and organizing them into different categories.


When creating a framework, it is completely acceptable to ask the interviewer for a few minutes of silence to write out a framework.


You: Would you mind if I take a few minutes to structure my thoughts and develop a framework to tackle this case?


Interviewer: Of course, go ahead.


For this case example, what do you need to know in order to help Coca-Cola decide whether or not they should enter the beer market?


You might brainstorm the following questions:
 

  • Does Coca-Cola know how to produce beer?

 

  • Would people buy beer made by Coca-Cola?

 

  • Where would Coca Cola sell its beer?

 

  • How much would it cost to enter the beer market?

 

  • Will Coca-Cola be profitable from doing this?

 

  • How can Coca-Cola outcompete competitors?

 

  • What is the market size of the beer market?

 

This is not a very structured way of tackling the case, so organize these ideas into a framework that has 3 – 4 broad areas, also called “buckets”, that you want to investigate.


An easy way to develop these buckets is to ask yourself, what 3 – 4 things must be true for you to 100% recommend that Coca-Cola should enter the beer market.


In an ideal world. These four things would need to be true:

  1. The beer market is an attractive market with high profit margins

  2. Competitors are weak and Coca-Cola will be able to capture significant market share

  3. Coca-Cola has the capabilities to produce an outstanding beer product

  4. Coca-Cola will be extremely profitable

 

You can rephrase these points to be the broad categories in your framework. You can write your framework in the first section of your paper:

 

 

Next, let’s add a few bullets under each category to give more detail on exactly what information we need to know to decide whether Coca-Cola should enter the beer market.

 

 

This entire process of brainstorming ideas and developing a structured framework should only take a few minutes.


How do you come up with a framework so quickly?


Most candidates make the mistake of either using a single memorized framework for every case or memorizing multiple different frameworks for different cases.


The issue with memorized frameworks is that they aren’t tailored to the specific case you are solving for. When given an atypical business problem, your framework elements will not be entirely relevant.


Interviewers can easily tell that you are regurgitating memorized information and not thinking critically.


Instead of memorizing frameworks, I recommend memorizing a list of 8 - 10 broad business elements, such as the following:

 

 

When given a case, mentally run through this list and pick the 3-4 elements that are most relevant to the case. This will be your framework. If the list does not give you enough elements, brainstorm and add your own elements to your framework.


This strategy guarantees that your framework elements are relevant to the case. It also demonstrates that you can create unique, tailored frameworks for every business problem.


Using this strategy for this case, you would run through your list of memorized business elements and select the following:

 

 

This strategy is a shortcut for creating unique tailored frameworks for every business problem. You do not need to develop a framework entirely from scratch every time.


Now that you have your framework, turn your paper to face the interviewer and walk them through it.


You: To decide whether or not Coca-Cola should enter the market, I want to look into four main areas.


One, I want to look into the beer market attractiveness. Is this an attractive market to enter? I’d want to look into areas such as the market size, growth rate, and profit margins.


Two, I want to look into the beer competitive landscape. Is this market competitive, and will Coca-Cola be able to capture meaningful market share? I want to look into questions such as the number of competitors, how much market share each competitor has, and whether competitors have any competitive advantages.


Three, I want to look into Coca-Cola’s capabilities. Do they have the capabilities to succeed in the beer market? I want to look into things such as whether they have the expertise to produce beer, whether they have the distribution channels to sell beer, and whether there are any existing synergies they can leverage.


Four, I want to look into expected profitability. Will Coca-Cola be profitable from entering the beer market? I want to look into areas such as expected revenues, expected costs, and how long it would take to break even.


The interviewer might ask a few questions on your framework, but will otherwise indicate whether they agree or disagree with your approach.

 



5. Starting the Case

 

There are two styles of case interviews: interviewer-led cases and candidate-led cases.

 

 

If this is an interviewer-led case, the interviewer will propose which area of your framework they would like to dive deeper into. They might say something like the following:


Interviewer: Your framework makes sense to me. Why don’t we start by estimating the size of the U.S. beer market.


If this is a candidate-led case, you will be expected to propose an area to look into. There is no right or wrong area to start first. Propose any area of your framework as long as you have a reason for it.


You could say something like:


You: To start, I’d like to look into the beer market attractiveness. I’d like to first understand the market size to determine if the beer market is an attractive market.


If you end up picking an area that the interviewer does not want you to explore, they will redirect you to an area that they do want you to explore.


The two styles of case interviews are nearly identical. The only difference is whether or not you have to proactively propose what area to explore first and what area you want to explore next.

 



6. Solving Quantitative Problems


Expect to perform calculations and analyze charts and graphs during your case interview.


Market sizing questions are one type of quantitative question you may get asked. Let’s say the interviewer asks you:


Interviewer: What is the market size of beer in the U.S.?


Most candidates jump right into the math, stating the U.S. population and then performing various calculations. Doing math without laying out a structure often leads to making unnecessary calculations or reaching a dead-end.


Laying out an upfront approach helps avoid these mistakes and demonstrates that you are a logical, structured thinker.


For this market sizing problem, you could structure your approach in the following way:
 

  • Start with the U.S. population

 

  • Estimate the percentage that are legally allowed to drink alcohol

 

  • Estimate the percentage that drink beer

 

  • Estimate the frequency in which people drink beer

 

  • Estimate the average price per can or bottle of beer

 

Multiplying these steps together gives you the answer. By laying out an approach up front, the interviewer can easily understand how you are thinking about the problem. With the right structure, the rest of the problem is simple arithmetic.


Sometimes the interviewer will give you numbers to use for these calculations. Other times, you’ll be expected to make assumptions or estimates.


When performing your calculations, make sure to do them on a separate sheet of paper. Calculations often get messy and you want to keep your original paper clean and organized.


A sample answer to this question could look like this:


You: To estimate the market size of beer in the U.S., I’m going to start with the U.S. population. Then, I’ll estimate the percentage that are eligible to drink alcohol. I’ll then estimate the percentage of the remaining population that drinks beer.


If we take this and multiply it by the frequency in which people drink beer and the average price per can or bottle of beer, we will find an estimate for the market size. 


Does this approach make sense to you?


Interviewer: Makes sense to me.


You: Great. I’ll assume the U.S. population is 320M people. Assuming the average life expectancy is 80 years old and an even distribution of ages, roughly 75% of the population can legally drink alcohol.


This gives us 240M people. Of these, let’s assume 75% of people drink beer. That gives us 180M beer drinkers.


Let’s say on average, a person drinks five beers a week, or roughly 250 beers per year, assuming roughly 50 weeks per year.


This gives us 180M * 250 = 45B cans or bottles of beer.


Assuming the average can or bottle of beer costs $2, this gives a market size of $90B.


You should not only answer the question, but tie the answer to the case objective.


In other words, how does knowing the U.S. market size of beer help you decide whether or not Coca-Cola should enter the market?


You could say something like the following:


You: Given that Coca-Cola has annual revenues of $30B, a $90B beer market represents a massive opportunity. The market size makes the beer market look attractive, but I’d like to understand if beer margins are typically high and determine how much market share Coca-Cola could realistically capture.


A second type of quantitative question you could be asked is to calculate profit or profitability. The interviewer may ask you:


Interviewer: Assume that a 12-ounce can of beer sells for $2 on average. To produce a keg of beer, it costs $100 for raw materials, $95 for labor, and $75 for storage. If a keg of beer holds 1,800 oz. of beer, what is the profit margin for beer?


Make sure you structure your approach and connect your answer to the case objective.


A sample answer could look like:


You: To calculate the profit margin for beer, I will first calculate the total costs to produce a keg of beer. Next, I will divide the volume of a keg by the volume of a can to determine how many cans a keg of beer produces.


Afterwards, I will divide the total cost of producing a keg of beer by the number of cans in a keg of beer to determine the cost per can.


Finally, I can use the price and cost per can of beer to calculate the margin of beer. Does this approach make sense to you?


Interviewer: Makes sense to me.


You: Great. The total cost of a keg of beer is $100 plus $95 plus $75, or $270. The number of cans of beer in a keg is 1,800 oz. divided by 12 oz., or 150 cans.


Therefore, the cost per can of beer is $270 divided by 150 cans, or $1.80. Since the average price of beer is $2 per can, the profit is $0.20 per can. This makes the margin $0.20 divided by $2 or 10%.


Compared to Coca-Cola’s overall operating margin of 30%, the beer market profit margin of 10% is significantly lower. Although the market size for beer is large, the low margin makes the beer market less attractive.


A third type of quantitative question you could get asked is interpreting charts and graphs. The interviewer may show you the following:

 

 

A helpful strategy is to start your analysis by explaining what the axes of the chart show. This will help you understand the chart better.


Next, don’t just read what numbers the chart shows, but interpret what those numbers mean for the case objective.


A sample answer might look like the following:


You: For this chart, we have market share on the y-axis and different categories of beer on the x-axis. For each category, we see that market share is concentrated among a few large players. This implies a highly competitive market with high barriers to entry. Because of this, the beer market does not look attractive because it is so competitive.

 



7. Answering Qualitative Questions


In addition to asking quantitative questions, the interviewer will also ask qualitative questions.


One type of qualitative question you could get asked are brainstorming questions. For example, the interviewer might ask:


Interviewer: What are the barriers to entry in the beer market?


Most candidates answer by listing ideas that immediately come to mind:

  • Brewing equipment

 

  • Beer production expertise

 

  • Distribution channels

 

  • Brand name

 

This is a highly unstructured way of answering the question. Make sure to use a simple structure to organize your thoughts.


A simple structure, such as thinking about barriers to entry as either economic barriers or non-economic barriers, helps facilitate brainstorming and demonstrates logic and structure.


With this structure, you might come up with the following answer:

 

 

Have a simple structure when answering qualitative questions. Examples of other simple structures to use include the following:

 

 

Additionally, take your answer and connect it to the case objective. In this example, are these barriers to entry high or low? Do you think Coca-Cola can overcome these obstacles to enter the beer market?


You might answer this question in the following way:


You: I’m thinking of barriers to entry as economic barriers and non-economic barriers. Economic barriers include things such as equipment, raw material, and other capital. Non-economic barriers include: beer brewing expertise, brand name, and distribution channels.


Looking at these barriers, I think it will take Coca-Cola a lot of work to overcome these barriers. While Coca-Cola does have a brand name and distribution channels, they lack beer brewing expertise and would have to buy a lot of expensive equipment and machinery. These barriers make entering the beer market difficult.


Another type of question you could get asked are business opinion questions, such as the following:


Interviewer: Do you think there are significant production synergies in producing non-alcoholic beverages and producing beer?


As always, structure your answer and connect your answer to the case objective.


Here is a sample answer:


You: Production involves equipment, raw materials, and labor. There is likely some overlap in equipment, such as using the same bottling machines, but Coca-Cola will likely need new equipment for brewing beer.


Raw materials, on the other hand, are completely different. Coca-Cola will need to source barley, hops, and yeast, which it currently does not use in its existing beverages.


Finally, the same labor can be used, but employees will need new training since producing beer is fairly different from producing a non-alcoholic drink.


Overall, I think there are only a few production synergies that Coca-Cola can leverage, which makes entering the market a bit more difficult.

 



8. Delivering a Recommendation


You’ve done a ton of work and now it is time to put everything that you’ve done together into a recommendation.


Throughout the interview, you should have been making notes of key takeaways after each question you answer.


Take a look at the key takeaways you’ve accumulated so far and decide whether you want to recommend entering the beer market or not entering the beer market:

  • The U.S. beer market size is $90B compared to Coca-Cola’s annual revenue of $30B

 

  • The beer market profit margins are 10% compared to Coca-Cola’s average margin of 30%

 

  • The beer market is highly concentrated across all categories

 

  • Barriers to entry are moderate

 

  • There are some synergies with existing production

 

There is no right or wrong recommendation, as long as you support your recommendation with reasons and evidence.


Regardless of what stance you take, make sure you have a firm recommendation. You do not want to be flimsy and switch back and forth between recommending entering the market and not entering the market.


Secondly, make sure your recommendation is clear and concise. Use the following structure:
 

  1. Clearly state what your recommendation is

  2. Follow that with the 2 - 3 reasons that support your recommendation

  3. State what potential next steps would be to further validate your recommendation

 

The conclusion of the case might look like the following:


Interviewer: Let’s say that you bump into the CEO of Coca-Cola in the elevator. He asks you what your preliminary recommendation is. What do you say?


You: I recommend that Coca-Cola should not enter the U.S. beer market for the following three reasons.


One, although the market size is fairly large at $90B, the margins for beer are just 10%, significantly less than the Coca-Cola’s overall operating margin of 30%.


Two, the beer market is very competitive. In all beer segments, market share is concentrated among a few players, which implies high barriers to entry. Coca-Cola lacks beer brewing expertise to produce a great product that existing incumbents have.


Three, there are not that many production synergies that Coca-Cola can leverage with its existing products. Coca-Cola would need to buy new equipment, source new raw materials, and provide new training to employees, which will be time-consuming and costly.


For next steps, I want to look into Coca-Cola’s annual expected profits if they were to enter the U.S. beer market. I hypothesize that they will be unable to achieve an increase in annual profits of $2B within five years, but I’d like to confirm this through further analysis.

 



9. Summary


All case interviews roughly follow this same format or structure. The industry, quantitative problems, and qualitative questions will be different, but the strategy and approach will be the same.


To recap, here are all of the steps in a typical case interview.

  1. The interviewer will read the case background information to you

  2. You will take notes on the case objective and important information

  3. You will synthesize the case background and verify the case objective

  4. You will ask clarifying questions

  5. You will ask for a few minutes of silence to structure your framework

  6. You will present your framework to the interviewer

  7. Either you or the interviewer will propose an area to look into

  8. You will answer quantitative problems, such as market sizing questions, profitability calculations, or interpreting charts and graphs

  9. You will answer qualitative questions, such as brainstorming questions or business opinion questions

  10. The interviewer will ask for a recommendation

  11. You will deliver a recommendation, three reasons that support your recommendation, and potential next steps

 

We’ve covered a lot of information in this guide, so don’t feel overwhelmed about case interviews. It takes time to become comfortable and proficient.

 



10. Next Steps


You now understand what a case interview looks like and have learned basic strategies to tackle each part.


When you’re ready to take consulting interview preparation seriously, enroll in our One Week Case Interview Online Course.


For each step of the case interview, I go into further detail into explaining exactly what you need to do and say to succeed, providing more strategies, examples, and practice.


The one-week course includes:

  • 53 concise lessons

 

  • 6 hours of video

 

  • 20 full-length cases based on real interviews

 

I’ve consolidated hundreds of hours of information into a one-week course that can be completed in 10 - 15 hours. Let me save you time by teaching you only the most effective strategies.


This course will help you land the consulting job offer that will increase your salary, future earning potential, and career trajectory.


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