Confusing case study - help ?

Hi,

I am applying for a strategy role in a large private company ($5bn+ valuation, US based but operating in 30+ countries). So far, interviews have been similar to what you'd get for an MBB role, but I now have this home assignment which is basically asking me to explain (in a detailed memo) what I would do if the company raised more money (keeping it at a strategic level, no need to detail exactly how I would spend every dollar).

What is confusing is that I have absolutely no information about their operations/market studies/etc. And being a private company, there's very little info available online. 

Anyone been through that before? Any advice? Any mistakes to avoid?

I'll try to come up with a structure that kind of make sense, like:

  1. "here's my understanding of the current state of operations/context"  
  2. "here's our goal" (I'll just assume one)  
  3. "here's a smart way to get to it" (by selecting 2 or 3 possible actions that make sense),

But there are a lot of wild guesses involved in here and that could be completely off/irrelevant, which is quite worrying !! Also not sure how to quantify M&A operations

Any help is welcomed!
Thanks

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Comments (3)

Jun 3, 2021 - 9:56pm

I'm not in consulting (am actually thinking of making a career switch into consulting) but this may help get the ball rolling for you:

15% into "R&D" for the purpose of engaging a third party to update any software / systems the company uses to gain a 15% tax credit. (Read up on qualifying R&D expenditures with third parties). So right off the bat we are increasing our service capability while reducing tax liability.

5% goes straight to reserves to cover the ebbs and flows of the overall business if it's a boutique firm. This can be justified to investors by gaining the 15% R&D tax credit (show the math to which this is appropriate based on approximation of how much the firm may pay in taxes each year at x revenue)

50% goes towards expanding the firms footprint into either:

A.) Existing markets at a deeper more holistic level, maybe with more adjacency to other companies that are somehow related (suppliers, raw materials, etc.)

B.) New markets the firm finds attractive in their analysis

  • be prepared to discuss either strategy and how you would arrive to your conclusion.

15% can be appropriated towards actual training of employees. Sell it as an academy of sort where employees must attend each year to work on technical skills, industry knowledge, leadership skills, network within the company. This also acts as a culture building framework and promotes employees to stay within the company for longer reducing turnover, hiring expenditures, and better team collaboration which ultimately provides a better product for the client.

15% goes towards retaining talent over x amount of years to reinforce the overall strategy of going deeper into existing markets or servicing new markets as well as the previous 15% spent on training.

Now that I think about it, you may want to flip around the first and second paragraph (5% to reserves then 15% software / systems upgrade) just to make it flow better, I'm lazy and don't feel like retyping all of that. Anyway, you get the picture - build the story.

Am I ready for consulting?

Jun 4, 2021 - 3:06am

Thanks for replying. 

Never been in consulting so probably not the most qualify to judge, but I'm pretty sure they would ask for justification if I did that. Like why 15% into this and 50% into that and not the other way around? What's the impact / return on investment of each strategy ?

For R&D, good point on the tax rebate but they're a tech company (sorry I should have mentioned that in my first post) that doesn't make profit yet (not sure if they'd still get a DTA for that), and given that they have hundreds of engineers/data scientists etc., I'm not sure how much software updates can be done by a third party. 

I agree on expanding the firm's footprint, although I'm not sure what's more important to them (as I don't know their exact situation): become profitable or expand (I know both would be better, but launching new countries isn't generally good for your profitability in year 1). From what I read online they want to do both. Also, the only info I have is that they are present on some markets, but I have no clue how strong they are on these markets - there's very little information on that. 

30% on training / retaining talent sounds like a lot, and same as everything, I have no clue of what the current situation is but if I had to take a guess I'd say they're already doing a good job at both and probably don't need to reinforce that. 

It's such a frustrating exercise... Why don't they give data (even fake data) on the company and different markets? They expect me to work a full week to give them a free market research ?! 

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