English Subtitles for Matching Case Interviews to Problem Solving Frameworks (Video 5 of 12)

Subtitles / Closed Captions - English

all right we talked early on this morning about the case interview

mindsets how to open analyze and close the case where the generic steps and when we do now is talk about actual framework so what I call out matching specific case situations the specific problem solving for x we'll go through each one demonstrate those that will take sort of till lunch we'll break a lunch 1215 be about an hour so come back and afternoon finish up different kinds of cases and then finish off the day on how to practice and prepare for

interviews as well as some final tips ok any other sort of administrative questions ok ok so we talked earlier about opening a case and and the last step in opening a case of structuring it which is defining how we're going to approach the problem solving about of the case so we talk about common case types my favorite frameworks which cases go with which frameworks and then we can demonstrate

all this right here sort of in terms of the business situation cases you don't need to write this down but you're welcome to if you want to there's like a whole bunch of business problems out there ok that the general thing is a sort of fall into four categories it's more . of the categories are talking about the SEC the first one which has talked a lot about this morning as a prophet problem

it's a very common way to start off a case you know profits are in the tank what we do in our constant out of control what we do revenues down what we do ok and so you're going to have a lot of variations on those everything and if it's like an essential services industry is like different terms of revenue so you want to clarify what they mean by certain terms sometimes it'll be sort of

a pricing driven problem so places the decline or costs have gone up fixed costs have gone up their costs have gone up but basically the whole class of problems around revenues and costs so i always think about the fabric as profit equals revenue minus cost if you mention any of those three things you know usually it's it's a profitability problem

ok the next category organization and i should also mention that that might be friends i use tend to be a bit different than some of the things you see out there i mentioned earlier a lot of ways to be right this is not the only way simply a way so i just want to put that as a caveat

you'll find that I tend to like if you look at the case in the books that are out there they have like all kinds of ideas of the book a laundry list of frameworks you could use I only have like four and they're really only like three and the reason i have things because i can't remember like 10 and figure it's

better to know three really well and like sort of forget half of 10 and sort of you for the cough guard that the second category of cases is apply the most common one and I just called a business situation and that incorporates what's this company strategy what should it be incorporated entering a new market incorporates you know your your nephew ask users are starting your business because you're some hotshot Harvard MBA what you did you

how do you build a lemonade stand ok i actually have that is case that was the case i bombed by the way the only one I really bought was a lemonade stand it's because I thought it was like two simple and in fact they had at the right answer had to man curse supply curves and tired man i had like a very complicated an entire model built behind lemonade stand I sort of assumed it was a simple one so don't get caught off-guard don't assume

you know thanks use the data in the case still got the job I got that one so this situation is entering new markets introducing a new product competitive X should you do why so any sort of business situation type of a case I I sort of went into business situations

mergers and acquisitions big company once require small company should they acquire this particular small company ok that's a mergers and acquisitions it's really a variation of it isn't situation so we know the business situation approach than the merger and acquisition one works and the last one is a supply-demand framework also sort of often used as sort of a way to explore issues around industry capacity

ok so in a lot of industries with high fixed cost so airplanes for example the the behaviors in that industry sometimes seem crazy but it's because of the high fixed cost and and we'll talk about that but it's an interesting issue they probably are listed in the order that in the order of frequency so you probably see profit fairly often business situation quite often as well oftentimes cases will start off as a prophet problem and then move right into

a business situation ok because this is purely math right isolate mathematically what's the numerical driver of the problem but then you have no business context so business situations all buttons in the context of the marketplace competitors customers as well as the company's up in terms of supply demand

sometimes the supply demand capacity problems are acquisition-related ok if they're trying to like acquire a company to like eliminated sometimes a big company will eliminate my computer just to take the capacity of the market sometimes because of the weather funny way that the supply demand curves are in that industry and so if the if the acquisition is driven by the demand that by the capacity issue then you want to use the supplied man

framework it's more like that we've decided we're going to require somebody should be this company that company that's more like a business situation and that's how i started to find to any type of problem around building downtown building up building or shutting down the factory which is capacity and then any kind of capacity shift in response

to demand so if the issue is you know the markets really sort of structurally changed is contracted by twenty percent likely be contracted for a long time at twenty percent should we shut down the factory so it sounds like a business situation but i'll probably end up being supplied the man ok so what you're looking for what in this process is you're looking for this

the triggers that figure out which category of problem it is so you know which framework to match it to and and i'll just show you i'll go back and forth for fast year the forecourt friends I have matched those categories so i have a profitability framework i'll show you a business situation mergers and acquisitions and a supply-demand framework as well

I'm so i'll give you the telltale signs there is i use for your friends success like less debate as to which one to use huh you know if they mention profit revenues are costs I mean you never go along starting with the possibility of homework but you'll find that you go through the print pretty fast if you know what you're doing

so usually it's like 5-7 me 10 minutes max and if you've never seen it before you don't have a business background you'll be in profit and revenue minus cost like all day long because you won't realize profits driven by revenue cost and and so on and so forth so that's the easiest one because it's peter just pure pure math and and that's when complicated math either business situations are all is basically the

default one if you don't know what to do start with business situations to help you understand the context of the external environment internal environments and so forth mergers and acquisitions of those are very easy to tell because they'll say merge require hear the word the keyword phrase its emergency question case the only tricky one is whether it's it's sort of like a fit issue

so should be acquired this particular company versus is is it a good idea to quite someone in general given capacity constraint so that's the only one that's sort of a little tricky and and then the other ones on supply and demand are when they mentioned the word supply when I mentioned the word domain and and they give you numbers that's a big sign if they give you numbers around supply

that's usually a sign that they want to do the math and supply demand curve and literally played out curve an example might be on your clients uh I'll make it up your client is the mines coal ok and their cost to produce is no no fifty bucks per metric time I have no idea that's even remotely close and the

nearest competitor has its costs that they can produce a metric ton of forty dollars per metric time ok let's not mention was like that hey dollars dollars to produce that's like a capacity issue red flag much I think about supply and demand okay that makes sense any questions for this morning I did great all right two outs the frameworks here

you should all have a handout we don't need more hands up front I'm gonna talk first about me the profitability framework so apply your hand out and the the five pages in a handout are were essentially my I don't my crib sheet if you would things I would sort of mechanically go through before the interview it's what happened one of your own welcome to use mind it doesn't quite

work for you change it you want entirely different up to you it's good to just have one thing and what i would do is when i practice I would have in front of me so I could remind myself of the steps and then I work on memorizing the steps like to throw it out it's an issue that again I mentioned earlier that if your brand new cases it's very mechanical early on and then you start getting more flexible and by

flexible actually good example is so like someone is mechanically good at cases will like say all that the Prophet problem I must use the Prophet framework and I can only use the profit from I can't do anything else and they're going to find that has limitations because the profit from it only gives you the mathematical is my business is sort of flailing but not any context as to why ok so the flexibility that when you start getting a little more creative is

in the middle of the profitability framework you realize okay something like why are these why is revenues like wise price and falling through the floor I know that's what is mathematically but why and then all of a sudden you roll into a business situation ok and you might be as the process of going to the business situation you might realize well this is industry is really changed a lot

there is entirely growth segments that the client is not in participating at all maybe I require somebody ok and then the question is what would happen to industry supply and well that's how would that change the economics of the industry so then you always like a supply-demand framework ok so that's sort of you know

i would say the answer but sort of medium to advance is you start intermingling between this video and I like makeup frameworks - I'll show you how it's sort of a little how to do that with nothing else fits yeah sure during the interview I would you do better you should it's impossible to do it well without also often you want to them do not if you're using if they want sometimes it's something that the

interview will hand you a like a like a dry erase board marker and start asking you to sort of start doing the case while standing ok so you want to practice like you know drawing on the whiteboard or taking notes and you won't have your pen table there right so you want to take your own notes you're going to have to write numbers on the side and then if you have to do that you're going on one side and then the

official presentation if you would in the middle so there's a lot of sort of just logistical stuff you want to get used to yes combination yes around interview on moving having situations that sort of span across categories types of cases it you'll see that in the first round last one all

kinds of bounds and the most common one is really it's a part of the problem and then ok you figure out matter what's wrong but you'll know why it's wrong and then you'll know what to do about it so the end result of business that sort of by far the most common one and then the other ones much less common sometimes you move into supply demand that tends to be by the way it tends to

be in really high fixed cost industries another time so airplanes there are lines of all kinds of stupid stuff in your lies because the cut capacity structure and the the hypocaust that business is just ridiculous and i find interesting like I personally more money than entire US airline industry and its history 50 years ago i would have at least that one of a box

ok that business has not made a dollar like in half a century that they have that they keep going right because it is a bit and that's because this demand and supply issues so that's a typical one if it's what it sounds like like big heavy things are involved well then that's like a high fixed cost business and that's typically assigned that's likely to be supplied for the

possibility for it to be slide man is likely you almost never see supplied in case for our service of businesses so really high margin low fixed cost and high be able cause businesses almost never have a supplied manager sometimes demand which is more of a business situation but not really around supply because because apply can scale it very easily in that visit that's the point that it's

Video Description

Matching Case Interviews to Problem Solving Frameworks

By Victor Cheng
Author, Case Interview Secrets

For my free email newsletter on passing the case interview and to download all the handouts and slides references in this video, visit the free download members download area of www.caseinterview.com