case_interview_frameworks - Case Interview Marathon...

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© Victor Cheng Case Interview Marathon Workshop Victor Cheng’s Case Interview Core Frameworks v1.0 By Victor Cheng These materials provided on an “as is” basis with no warranty or guarantee expressed or implied. You use them at your own risk. This information is provided to you for free for non-commercial use. You are welcome to forward this to your friends provided you do not alter any of the content and keep the entire document in tact. I retain copyright ownership over these materials
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Profits Revenue Cost Revenue/ Unit # Units Sold Cost/ Unit # Units Sold Fixed Cost Variable Cost For the problem branch (e.g., Revenue/Unit or # Units Sold) 1) SEGMENT the number, break it up into its component parts, compare to historical metrics to find where the shift is coming from 2) ISOLATE the key driver causing bulk of problem 3) EXPLORE possible resolutions * By product / product line * By distribution channel * By region * By customer type (new/old, big/small) * By industry vertical Once you know mathematically what's causing the problem, you need to understand WHY the number has declined in the context of the marketplace. This may be a "compound framework" problem requiring you to use a general market analysis framework. If so, most often you will want to start with the customer (demand side) analysis and potentially may have to use the entire framework. For problem branch (e.g, fixed or variable cost) SEGMENT into its component parts * Segment cost by logical components * Segment costs by value chain Value Chain Example: Identify fixed costs in each of the following: Raw Materials -> Factory -> Distribution ->Customers Compare to historical. Find the problem component. Keep "drilling down" by finding the problem segment, and drill down on THAT segment until you ISOLATE what's mathematically causing the majority of the problem (aka. Find the LEVERAGE point) PROFITABILITY FRAMEWORK (c) Victor Cheng, Free for your personal use, free to distribute freely to others provided content and attribution left unaltered Tips: 1) Keep drilling down until you isolate the problem 2) If you realize a branch (or sub-branch) is NOT the problem come up a level and work the remaining branches 3) The name of the game is PROBLEM ISOLATION 4) When "units sold" decline, it's useful to compare the company's numbers to its competitors to determine if it's an industry-wide or company-specific issue
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This note was uploaded on 05/13/2011 for the course BUS 103 taught by Professor Opp during the Spring '10 term at University of California, Berkeley.

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case_interview_frameworks - Case Interview Marathon...

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