How to prepare for interviewer-led cases?

Quick Guide: Interviewer led case interview

The framework for an interviewer lead case study is firmer than an interviewee lead case study. The interviewer will often have a dataset to work from which may include graphs, tables, and other supplementary information.

What you may encounter in an interview lead case study :

  • You're given allot of information and asked to draw conclusions from them
  • You’re given a hyper specific question
  • Your’e given a broad problem with little no structure
  • You’re interviewer keeps asking you “what ese?”

An important note on “what else” and broad problems. You should always have an anchor to answers. Follow a logical thought process that allows you to walk your interviewer all the way through a problem (while creating structure) to your anchor.

Don’t panic. Your interviewer may use this as an opportunity to stress test you. Adapt with each turn by pausing to collect your thought and then address each question directly.

from certified user @pfitzy"

In the interviewee led setting brainstorming bleeds into structure followed closely by data, and everything blends together contemporaneously.

The interviewer led case appears to move in sections. Brainstorm potential hypotheses; how would you structure; solve this math problem; and so on and so forth.

That being said, the best way I found to practice for them was live cases with McKinsey alumni. McKinsey folks lean more towards the interviewer led side of the spectrum from my experience.

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Honestly, if you can nail interviewee led cases, the interviewer led should be a piece of cake. I could be alone here, but I didn't feel that they highlighted any of the things you noted more so much as compartmentalized them within the case. In the interviewee led setting brainstorming bleeds into structure followed closely by data, and everything blends together contemporaneously. The interviewer led case appears to move in sections. Brainstorm potential hypotheses; how would you structure; solve this math problem; and so on and so forth.

That being said, the best way I found to practice for them was live cases with McKinsey alumni. McKinsey folks lean more towards the interviewer led side of the spectrum from my experience.

 

Interviewee led cases actually test the same type of skills that interviewer led cases test - so it is not true that a McKinsey style interview will test math, brainstorming skills, business acumen, ability to deal with a large number of data at the same time any more or less than another firm.

As pfitzy mentioned, if you can work your way through a standard case interview, you should be able to manage a McKinsey style case. Based on my experience (I interviewed with McKinsey in 2006), and the experience of a number of my students, McKinsey cases are "easier" than other types of cases, at least from a process perspective. They are easier because McKinsey will lead you through the case, so there is less pressure to come up with the right "approach."

One thing with McKinsey style cases however, is that they will push you to be "Collectively Exhaustive." For example, they may ask you something like "What are the risks you see with entering this market?" From there, they will expect a logical sub-structure or approach (so you need to come up with an approach on the fly), and they will keep asking you "what else... what else... what else." It's kind of like brainstorming, but you need to do it in a very logically structured way (so, not just blurt out ideas as they come to you.)

FYI - one of the cases I did with McK was about a Chicken farmer. The question was - how should he price white meat vs. dark meat. We spent alot of time talking about all of the operational costs associated with the business (so they asked me - what costs - and each time I offered one, they would say "what else?") The context of the case was not hard (Chicken Farming), and the approach was given to me by the Consultant. In the end, I did well because I was able to offer logically structured ideas, and questions, based on the areas they asked me to assess.

 

I agree with the above. If you're good at structuring, interview-led cases are actually easier because they lend more to you being lazy and getting away with it. When it's very open ended cases, you have to be hypothesis-driven and ask very pointed questions to do very well on it and solve it without the interviewing giving too many gimmees. With McK interviews, it can go along like You: "I'm thinking A, B, C, D are going to be important drivers. My hypothesis is that we'll learn a lot from digging deeper into B." Interview: "Actually, let's go with A. Here's what we know." And then poof, you're on the path to the next step just like that!

I've never used Victor Cheng's resources, but in a McK interview, always structure after every question. Some people structure at the start and then try to answer every question immediately afterwards, and that's NOT what they're looking for. When you get asked "what else, what else, what else" that's not necessarily because they want you to find everything; rather, it's a subtle way of being told that you didn't structure, so you've left the field open for them to keep drilling. When I did interviews and always did mid-case structuring, I was rarely asked "what else". Even if you can't think of the best buckets mid-case, doing something like "controllable" and "out of company's control" is better than just throwing out ideas randomly.

 
Acheron:
When you get asked "what else, what else, what else" that's not necessarily because they want you to find everything; rather, it's a subtle way of being told that you didn't structure, so you've left the field open for them to keep drilling.

I could never agree more. It requires a different mindset, compared to resources teaching how to master interviewee led cases. It is a more stressful environment. Practice with an experienced live partner. Look for Consulting Clubs, practicing Consultants, for sure they will reply for an email...

 

I think the most important things are to:

1) Always brainstorm with some kind of anchoring. At interviewer-led cases they could ask you something like "how to cut costs" and then you can't take a minute. So zooming out and anchoring your answer to something is key. Like "to see were it is appropriate to cut costs, I first want to look at the company's value chain", and then brainstorm initiatives in those buckets.

2) See things in perspective. In interviewer-led cases they will often jump around a lot, and the different questions could seem very isolated from each other. Here, it is up to you to put the information into context and have the full perspective.

3) Practice interviewer-led case-format instead of interviewee-led. I did a total of 16 interviews when I was interviewing and they were ALL interviewer-led!

Good luck :D

 

The 2-hour modeling test is made famous (or infamous) by Fidelity. For its equity analyst interview process, candidates are asked to look at a name and develop a buy/sell recommendation within 2 hours. The candidate is only given the latest 10-k and 10-q and a couple sell-side reports to get up to speed on the name quickly. So the key here consist of two things: the ability to get through a 10-K/10-Q quickly (knowing the sections and foot notes), and to produce a 3-statement model and a DCF in 2 hours.

I recommend you practice developing a DCF in 2 hours at home. Come up with a relatively simple template, and then work through 2 - 3 companies by looking at their filings. This will help you practice the mechanics of building a model, so you won't be spending too much time just to get the model to work on game day.

The key elements of a pitch can really boil down to 4 sections:

  1. overall recommendation / company description
  2. key drivers of your thesis
  3. valuation
  4. risks to your thesis

This would help you get started, good luck!

Kelvin

 
Best Response

Sure, I'll try to help with an example of a typical IBD Case Study. How you should prepare for it - probably by looking at some M&A transaction that already happened and understanding what exactly happened there and why. Depending on your knowledge of accounting and valuation, you might want to learn/brush up on those skills.

What you can expect is an M&A Case Study. In other words, most of the times it will be a potential acquisition of Company A by Company B.

1) This can be structured in many different ways, but you will be a part of your bank's M&A team and you will help Company B understand following:

i) Is Company A a good investment? ii) What is deal rationale? iii) What are potential concerns for Company B? iv) What will the execution process look like? v) How should Company B finance the deal?

2) You will probably be given a Binder of some 15 pages inside structured in following (or similar) fashion:

i) Your Client: Company B - Overview of Company B, their strategy, key data points, products and financials ii) The Target: Company A - Business overview, sales breakdown, recent events, products, market perception iii) Market (Sector) Data Overview - Sector size by country, regional competitive landscape, market growth, brand landscape iv) Key Trends in the Sector - Cost saving initiatives, innovations, consolidation, etc. v) Valuation Benchmarking - List of companies usually separated by regions or sub sectors, containing typical stuff such as share price, market cap, EV, EV/EBITDA, P/E, EBITA margin, CAGR, and estimates ofc. vi) Selected precedent transactions - List of transactions, containing typical stuff, ratios, dates, etc.

3) Now you should, by this time, write down key highlights and concerns relevant to the Company B in its consideration of Company A.

4) Valuation Techniques - Relative Value (Transaction, Trading Multiples) vs Intrinsic Value (DCF, LBO)

5) But first you need a business plan - in order to determine the value of the company, you need to have a view of the growth and profitability of the company. For example:

i) What will be the sales growth rate in next five years? i.i) How is the market growing? What about sub-sectors? i.ii) Why has Company A underperformed/overperformed in recent years? Structural or temporary reasons? i.iii) What can Company A do to improve top line growth? ii) What will be the profitability of Company A in the next five years? ii.i) How has the profitability been historically? ii.ii) Why do you think it decreased/increased in this year? ii.iii) What can the company do to improve its profitability? ii.iv) How fast will any initiatives to improve profitability start taking place?

6) Executive Summary:

i) I/We believe that Company A represents a compelling market opportunity to e.g. further strengthen the European footprint of Company B: i.i) Market leading sector company in Country, high market entry barriers i.ii) Diversified portfolio of sector products, recently entered in innovative, fast growing sub-category i.iii) Strong synergy potential with Company B across sourcing, production and distribution

ii) Preliminary valuation indicates EV of EUR ... to EUR ... m, I/we have used the following valuation methods to arrive at the range:

ii.i) DCF: EUR ... m ii.ii) Trading multiples: EUR ... m ii.iii) Transaction multiples: EUR ... m

7) Financing Considerations:

Pick some way to finance a transaction, for example:

i) Diversified financing structure: Bonds 33%, Shares 17%, Loans 17%, Selling Assets 17%, Balance Sheet Cash 16% or ii) Debt-heavy financing structure: Loans 44%, Bonds 33%, Selling Assets 11%, Shares 6%, Balance Sheet Cash 6%

or something like that. Just make sure you have your reasons and can back them up with some kind of data.

8) Good luck, hope this helps. Usually they want to see how you think, what are the reasons behind your recommendations and do you know basic valuation methods. The case is usually based on some transaction that actually happened.

 

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