Evaluate my Frameworking (MBB)

Holdthedoor's picture
Rank: Gorilla | 673

Interview coming up with MBB. Not much experience with case interviews. Any insight appreciated:

Prompt: Over the last 6 months, Apple Inc. recently lost 10%, or $74.6B from its market capitalization. In the process, the iPhone maker fell to the fourth-biggest U.S. company with a valuation of $674.8B, trailing Microsoft Corp., Amazon.com Inc. and Google parent Alphabet Inc. Apple CEO, Tim Cook is asking you to evaluate their business and provide an answer as to why the company is losing money.

Candidate: Let me make sure I understand the problem. Apple has lost a substantial portion of their market share. They're in a hypercompetitive ecosystem with large players like Microsoft, Amazon, and Google. Our objective is to figure out why Apple is losing money?
Interviewer: Yes, that's correct.
Candidate: What exactly does Apple do?
Interviewer: Apple is a multi-disciplinary technology company specializing in consumer products ranging from hardware, software, computers, and cell phones.
Candidate: Great, can I have a few minutes to jot down my thoughts?
Interviewer: Sure.

Problem Statement: Apple was previously the largest company in the world by market share, but they are losing it too quickly.

Branch 1: Market Analysis
* Who are the main competitors within each vertical?
o What are the historical growth rates for each company and vertical?
* Has there been any inorganic growth among competitors that would impact Apple?
* Are there any market trends I should be aware of?
* Who are Apples, customers?

Branch 2: Profitability
* Look at revenues vs. costs within Apple's verticals
* Regulation, tariff, or tax that would cause such a large decline in market share?

Branch 3: Consumer Behavior
* Have there been historic shifts in consumer preferences from one company to another?
* Have there been any recent product innovations we should know about?
* Publicity issues for Apple (lawsuits, brand, high-profile exits, etc.)?

Branch 4: Distribution and Logistics
* What are Apple's distribution channels like? Are they vertically integrated?'
* Is there any geopolitical tension causing Apple to lose money?

Comments (3)

Jan 10, 2019

I would first determine if Apple is losing money because Revenue is down, or cost is up, and in which product or service line. Then, understand why one or the other is occurring. Are revenues down because of competition, change in consumer behavior, lower marketing spend, etc. Are costs up because fixed or variable costs?
You are asking a lot of the right questions, but many could potentially be eliminated from analysis simply by asking first about revenue and cost.

Jan 12, 2019

"losing money" is too broad a term
i would say a fall in market cap doesn't have to reflect a fall in profit/revenue either. could result from a scandal, death of Steve Jobs, etc.

so yeah, first clarify the goal of the case

Jan 13, 2019
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