Indian Institute of Management (IIM), Lucknow Placement Interview Questions

• Q1. Hi Bhavya, how has your day been so far?
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• Q2. Tell me about yourself.
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• Q3. How was your experience at Bain earlier this year?
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• Q4. How do you like to spend your weekends prior to IIML?
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• Q5. What projects did you work on during your time at Deloitte?
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An IT company is seeing decline in profits. Diagnose the issue & provide recommendations.
[Please note that I stands for Interviewer and C stands for Candidate] 

I: (Interviewer realized I was a bit anxious and stressed, so had a candid conversation about Bain, her work there and general stuff about IIML for 5-7 minutes).

Okay Bhavya, let's get started with a case. Our client is one of the top 3 IT service providers, you can imagine it to be a Wipro/Infosys. It has 5 verticals: CPR, Manufacturing, Tech, Media and Financial Services. Of these, CPR, Manufacturing and Financial Services have a sales Department. The work of the IT company involves building applications, infra maintenance or building of servers, app maintenance, data work (e.g., Cloud) and IT consulting work. Now the focus here has to be on IT Consulting.

For procuring these projects, the company has salespeople. They have targets they have to meet based on which their salary is dependent.

Now, it has been observed that our sales have decreased while the salesforce commissions based on the targets have remained the same. It has also been observed that the average time period per project has decreased. Can you help us diagnose this?

C: Sure! Firstly, could I know since when this decline has been there and whether it has been there across the verticals?

I: It's a secular decline, taking place for the last 1 year.

C: Alright, secondly, I'd like to understand the salespersons' salary structure a little better. I'd imagine there would be a fixed and variable component, and the variable component is based on them meeting the sales targets?

I: Yes, and let's assume the variable component makes up most of the salary.

C: Great, could you explain how the commission structure is designed?

I: The structure is designed as No. Of projects * Conversion Factor.

C: Oh okay, what exactly is the conversion factor?

I: Good question. The conversion factor is defined two ways: 1) Number of projects won/ Number of projects bid or 2) value of projects won/value of projects bid.

C: Oh, so if I get this correctly, there's one based on no. of projects while the other is based on the sales value of projects?

I: Yes, that is correct.

C: Oh alright, I'd want to dig deeper into this a little bit before I proceed. Have both metrics seen a decline?

I: No, so while number of projects won is at par, the value won has declined.

C: Understood. So here I'd want to explore potentially something were doing wrong because of which the value we're winning is low.

I: Go ahead.

C: So, I believe there could be a couple of things. Either there's some problem with the projects itself, with the way they're being pitched by salespeople, or the competition is offering something better.

I: Hmm, well the pitch is fine. But the competition is largely providing longer term projects while we aren't.

C: Understood, so in that case, that seems to be the issue. We aren't able to pitch longer term projects which might have higher dollar value. Now, I'd want to understand differences between the competition and us in terms of securing these longer-term projects. Can I assume similar types of projects and similar salespersons?

I: Yes.

C: Okay, in that case, if the salespersons are similar and so are the projects, there might be an issue in pushing the projects from our salespersons. Is the conversion factor we talked about linked to Number of Projects or Value of Projects?

I: Yes, the conversion factor is largely linked to number of projects.

C: Understood. In that case, it's apparent that pushing longer term projects isn't incentivized adequately, is that fair?

I: Yes. However, there are other factors at play too, since till last year the value of projects was at par.

C: Understood. Are there other attributes of longer-term projects that differentiate themselves from the short-term projects? Potentially in terms of nature of projects, time to convert for salespersons or effort involved even in shorter time periods?

I: Yes, the second is the case. It takes more time on average to close the project which is causing the issue. Do you have any recommendations for this issue?

C: Yes, for our current sales,

1) We could incentivize longer term projects better through value-based approach

2) We could train the salesforce to pitch the projects in a shorter time period and close it earlier

3) We could increase the quality/composition of Salesforce that could be more equipped to deal longer term projects. Alternatively, we could think of identifying new areas of sales that could compensate for lost sales through longer term projects, potentially specializing in short term projects and increasing volume there.

I: Great, thanks Bhavya. How do you think it went?

C: Umm, I think I diagnosed the problem, but it took a lot of time to reach there. Could've been more efficient.

I: Yep, I felt it was alright as well, you could've been more efficient. But thanks for your time, and best of luck!

Havells Chief Logistics Head is thinking of employing Bain. What ideas can we propose? (I had worked in the Transportation & Logistics space during Deloitte Consulting, so case made potentially keeping that in mind)
[Please note that I stands for Interviewer and C stands for Candidate] 

(Interviewer proceeded to tell me about himself and experience at Bain. He asked me questions including why don't you tell me about yourself, what was your work like at Deloitte, how do you spend your weekends, post that to ease me into the case)

I: So, you know how these interviews go, I am obligated to give you a case while I'd like to keep chatting. Let me give you something maybe slightly related to what you've worked on.

Your client is head of logistics of Havells. This is our 1st meeting with him, and we're supposed to have a conversation to pitch ideas.

C: Great, just so I understand this correctly, we have to pitch some ideas to Havells' Logistics head regarding potential improvements in their department for reducing logistics costs?

I: Yes.

C: I'd like to understand Havells a bit better before I proceed. Is it the electrical goods company? What sort of products does it have and what is its value chain like?

I: So yes, Havells has multiple factories and produces wires, switches, etc. They manage their own logistics.

C: Okay, and just to be sure about this, they procure raw material, there's inbound logistics, they manufacture the goods, there’s out outbound logistics, they store goods at their own warehouses and sell it to distributors?

I: Yes. You can ignore inbound logistics, however. Just focus on factories to distributors.

C: Great, also are there any specific objectives Havells has, going into this meeting?

I: Yeah, so you can assume they want to improve cost of logistics as a % of revenue. So even a 5% improvement for 10K crore company is high.

C: So, the structure I'd like to proceed with involves assessing Transportation & Warehousing. I can potentially proceed with transportation here.

I: Go ahead

C: Under transportation, aspects I'd want to look at include 1) The Modal Mix 2) The Route design 3) Effectiveness of covering routes.

I: What do you mean by Modal Mix? Havells just uses Road.

C: Oh okay, I could have looked into any scope for efficiency from transports mix that could reduce costs. Is there a constraint only on using roads on?

I: Yes, go ahead with route design?

C: Sure. So, there we could explore the potential routes decided at a network level between plants to minimize time and cost. The permutations could be explored that work best for Havells.

I: How can a consulting firm here provide value? Havells must know it's routes well already.

C: I understand, but:

1) Consulting firms typically have access to huge amounts of data and analytics tools that are unique solutions for such kinds of problems. We could leverage them to optimize route design for them.

2) Business owners/heads have their own biases while approaching such issues, an objective route mapping could help check for any bottlenecks.

I: Okay, go ahead?

C: Under route effectiveness, I'd want to look at if there's any internal or external factors that inhibit truck owners from covering these routes adequately. In internal issues, aspects such as truck capacity/truck effectiveness in carrying goods, driver issues can be explored. In external issues, aspects such as stoppages, bribery etc. could be explored.

I: Okay, but why does this even matter?

C: Improving effectiveness in routes would mean lesser time taken on these routes.

I: And how does that help? They pay fixed amount per ton to drivers.

C: Well time saved would mean more tons delivered in the total time present. Then the incremental revenues in the time saved would be the benefit to Havells.

I: Hmm, let's move forward.

C: Right, I'll move to warehousing now. Herein, I believe again either optimization at the network level can be done or within warehouses can be done.

I: What sort of optimization at network level are you talking about? And how would we do it?

C: This would involve the ideal placement of warehouses on the routes to minimize time and costs, as discussed earlier for route design using data and analytics. Herein the aspects to optimize would include:

1) Number of warehouses

2) Location of warehouses.

I: Hmm. Can you provide aspects within warehouse improvements?

C: Sure, this would include aspects such as improving turnaround time of trucks at warehouses and improving logistics operations within the warehouse.

I: Examples of within warehouse improvements?

C: Few that come to mind include improving inventory management, assembly and roll out of goods in shortest time. Labor and Role of automation here could be explored for improvements in time.

I: Hmm. Alright, we can stop here. How do you think it went?

C: I think it was alright, I tried to cover the board but there could've been improvements.

I: Right, I think you largely covered everything. Just could've taken more pauses and been more concise. But that's fine. Alright, best of luck and take care Bhavya!

• Q1. Tell me something about yourself apart from your resume.
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• Q2. Why consulting? Why Bain?
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• Q3. Are you a team player or an individual player (asked to give an example of both)?
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• Q4. What is your biggest fear about consulting?
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• Q5. Tell me about your experience in filmmaking, how did you go about making a 12M+ views video?
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• Q6. Roles and responsibilities at Texas Instruments.
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My friend is a Financial Advisor. He is looking to buy a smart gallery. How will you value it?
[Please note that I stands for Interviewer and C stands for Candidate]

C: What is a smart gallery?

I: Smart Gallery is an art gallery portraying works of upcoming as well as local artists.

C: What are the revenue streams for the art gallery and where is it located?

I: Located in Mumbai. It has three kinds of revenue streams:
1) Buying & Selling of Paintings
2) Commission from tickets on Exhibitions organized
3) Renting the space for private events like corporate parties.

C: Number of paintings the art gallery currently has, the number of exhibitions and private events that are organized each year and the revenue from each?

I: Lets focus on the paintings for now, the art gallery currently has 50 paintings.

C: We can value these paintings by looking at Competitors' prices of similar paintings or find out the cost of acquisition and use cost plus method or even use value-based method depending on the product attributes to value the paintings.

I: How will you use the value-based method?

C: We can start with a Base price of paintings and add value to the painting based on factors such as: price of artist's similar works, price of similar style of paintings, price of paintings at similar art galleries.

I: Any other lever to value the painting.

C: I am not sure which one I am missing.

I: You have covered all, apart from this there could be an X-factor to each painting.

C: Yes surely, it could be possible if the painting has some story or historical incidence related to it.

Bain has been hired by a PE firm who is evaluating investing in a hospital in Gurgaon. Help them decide how much they should value the business if they are looking at a 25% IRR in a 5-year horizon.
[Please note that I stands for Interviewer and C stands for Candidate]

C: What kind of investments have the PE firm made before and how long have they been operating?

I: Mostly in Healthcare industries only, have several ventures.

C: Can you help me understand more about the hospital they are currently evaluating; in terms of the services, it provides and customers it caters to.

I: It is a specialty hospital with premium services and serving high-income individuals.

C: What are the sources of revenues for the hospital?

I: It is a 1000 bed hospital with 80% utilization factor and 2 Crores p.a. revenue from each bed, having a 20% EBITDA. We can explore other revenue sources.

C: Based on the data given, I calculated the initial investment cost to be done using NPV and discounting. I would next want to evaluate the decision based on some Macro and Industry level factors.

I: Macro parameters are good, let us look at the Industry level factors.

C: (Asked about the competitors, supplier buying powers and customers.)

I: Faces competition from some of the known brands like Apollo, Vedanta, etc. prices are similar. How do you think we can increase the revenue of the hospital?

C: We can break it down into factors such as No. of customers, the customer mix, Average duration of stay for a customer and the price per customer.

I: What can be some of the other sources of revenue for the hospital?

C: We can list down other services that the hostel can start, explore treatment of diseases that are not covered till now, establish a loyalty program with customers for consultations, launch health checkup packages, extend the pathology services of the hospital, increase revenues from the canteen, parking space.

• Q1. Tell me something about yourself.
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• Q2. What do you want to do in the future? What are your short term and long-term goals?
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• Q3. Can you explain to me the major decision you have taken in your life and the rationale behind those choices?
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• Q4. Tell me about your professional experiences.
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Our client is in the IT industry, primarily working in the USA, with $1Bn of annual revenue
(75% from the USA itself). They operate software development, maintenance, and data
center management for BFSI clients, which provides 80% of the revenue. They have recently
acquired a software company working in the USA for five years, and its revenue has been
constant at $20 Mn. We must decide whether we should sell this company and invest further
in it.
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Understood. There are a few questions I have with respect to the problem statement itself as well as some clarifying questions. Why did we invest in this specific company? Were we looking for any synergies?

I: This new company is operating in an emerging industry, with a lot of potential. We acquired it at a reasonable market price and were looking for long-term profits and not synergies.

I: Is the company profitable? Did we focus on improving the revenue in the last five years?

I: Yes, it's profitable, and we haven't made any investment till now.

C: Can I know about the market landscape in terms of market share and revenue growth?

I: The market is dominated by 5-6 large players having 70% of the market share. They are growing at the industry growth rate of 7-8%.

C: I would also like to understand this new company we acquired, specifically their business model and major revenue streams.

I: Let's not focus much on the company because the IT sector and the company will be very new to you, but to give a basic understanding, this new company provides core software solutions to insurance clients in the USA, helping them to serve the clients. (He talked about CRM/ERP, which I could not follow up on completely).

C: Should I also exclude the product-related aspect and take it up further in the case?

I: Yes, you can assume a standardized product for the time being.

C: Also, who runs this company, separate management?

I: Yes, they are run independently as a subsidiary.

C: Since it's in B2B, what are the primary customer segments we are serving?

I: We price the product at a premium. There are four major customer segments: Large private players (50%). Govt (20%), regional players (20%) and local players (10%). We primarily serve the local players, which are geography-specific, which have a niche client need.

C: I think I have a fair bit of understanding of the business problem.

My decision to invest or not invest will be based on three factors: Current market value of the firm, future market value with investment, future market value without investments but with better management or operations.

I: Okay, and how will you go about doing this?

C: I will try estimating the revenue/incremental revenue under each of this category and compare it with the additional investments.

I: Okay, Emil, that's a sound approach. Let's focus on the investment bucket, assuming the current market value is only $18 Mn. How will you proceed with the same?

C: Also, I want to understand the quantum of investment we are making because it will affect my future value and growth.

I: Let's take a step back here, Emil. If you exclude the investment amount, how will you approach this?

C: I will look at the future value and growth potential. What are the avenues for the firm to increase the revenue in the future specifically?

I: Yes, perfect. Let's focus on this.

C: I think we can focus on our current operation, looking at the revenue from the existing and new clients, or looking at new operations concentrating on new products or new geographies.

I: Let's exclude the new geographies since we want to focus on the USA. What do you mean by new products?

C: New products for our current customers or targeting a new customer segment.

I: Okay, and would you like to add anything?

C: Can I take a few moments to think through this situation?

I: Yes, take your time.

C: For our current clients, we can focus on any cross-selling opportunity with respect to our parents' offerings, bundling of our products, and customization.

I: Yes, useful suggestions, let's focus on new clients now.

C: We can focus on new customers from the current segments or try serving govt or large private players. For the former, we can focus on S&M techniques along with better product differentiation. For the latter, since there are larger players than us, it won't be easy to compete. We need to look for a niche product/space we can enter initially.

I: Okay, make sense. Let's assume we have decided to enter the larger private players segments. How will you go about doing this?

C: I will approach this from the demand and supply side. From the supply side, I will look at my current and potential capabilities in terms of servers and software developments, R&D and the quality of my employees, sales team and their reach, and marketing techniques. I will focus on these larger clients' product and price requirements from the demand side, offering customized/niche products, value-added service and long-term contracts, and differentiation from current market players.

I: Good points. Now let's try estimating the value of the company if we incorporate all these suggestions.

C: Do you want me to estimate the future revenue of the company?

I: Let's try focusing on your approach here first, specifically for the new segment we are entering.\

C: To estimate revenue, I need to know the price, the product mix/range of offerings, and the number of clients we will have. For estimating the price, I will look at our competitors' current market price, our cost of entry, and the future price growth/bargaining power using inflation, GDP growth rate, and industry growth rate as proxies. Also, due to the Covid outbreak and boom of the insurance sector, we might be able to price our products better in the future. To estimate the number of clients, I will start calculating the total number of local insurance players in the local market by assessing the need for insurance products (using proxies like population, age, income, insurance affinity, average customer base per insurance player) and multiply it by expected market share.

I: Emil, this is the bottoms-up approach. Let's focus on the top-down approach, and for the new segment we are entering, the potential market or the projected market share.

C: I will start with the current market for large private players and estimate how much we can acquire while competing with other similar B2B players. Since there are large established players in the market, it won't be easy to get a fair market share initially. I would like to look at proxies that will help me understand the market we can capture.

I: What are those?

C: Since IT is a sales team-based industry, revenue/employee can be one metric. Also, the server capability or any patent-related information can be useful. Marketing expenses can also indicate how aggressive the competitors are. And finally, since we are looking for at large players, data regarding long-term contracts and customer retention is critical.

I: Thank you, Emil. Can you explain the approach you have taken to solve the problem?

C: Yes (I then summarized the case, and the interview ended there).

Our client is a manufacturer of nets used in the fishing industry, agriculture, and construction. Their revenue has been growing at the rate of 3-4% for the last five years.

They would like to accelerate their growth to 15% YoY. Can you help them?
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Why precisely 15% here? Does the client think they have the potential to grow at this level in the future?

I: That's something we must decide internally. So, you have a dual problem here: understanding our company's potential and finding out ways to grow the revenue! Also, let's focus only on the fishing net industry for the time being.

C: What is the timeline for the same? Also, any specific budgetary constraint I should keep in mind?

I: Probably as soon as possible. Also, we have enough cash in our account.

C: Understood. Where does our client operate in the value-chain? Do they have their production and distribution facility?

I: Yes, the client operates across the value chain, from production to distribution through 3rd party dealers. Retailers buy it from them and sell it in the market.

C: What are the major product segments we are having?

I: We are into all product categories that the industry requires.

C: How is our product priced with respect to our competitors?

I: There is a 5% premium on our product, mainly because of the quality. It is the best in the industry in terms of quality.

C: What is the market share of our company? And what has been the industry growth rate?

I: We are the market leaders with 70% of the market share. The rest of the market is captured by the unorganized sector. The industry is also growing at a rate of 3-4%.

C: What are our primary customer segments? I believe organized fishers buy the products from the dealers and unorganized fishers from retailers in rural areas.

I: Yes, this is how the industry operates.

C: The approach I want to follow is to look at our company's potential in terms of production and supply chain specifics to see if we can support a 15% YoY revenue growth (focusing on the volume part) and looking at the current capabilities and capacity utilization. And then try to understand avenues available for us to increase the revenue through organic and inorganic routes.

I: Let's focus on revenue maximization first and focus only on organic growth.

C: I want to focus on three aspects here: Customers, dealers, and logistics/supply chain.

I: Let's focus on customers first.

C: There are two kinds of customers: Bigger organized players and smaller unorganized ones. For the more prominent players, we can look at establishing a long-standing relationship with them. Customize nets according to their needs, in-house maintenance and repairing of the nets, bundling of the products, or discounting since purchasing in bulk quantities.

For the smaller players, we can try getting closer to the end-user, probably the D2C model. For them, word of mouth matters a lot and bases their purchase decision on historical purchase experience and usage. We can set up small retail shops along the coastal lines, trade fairs or discount periods during the major festival season, and some engagement activities for the local people sponsored by us.

I: Anything else?

C: Since our product is at a premium price, there is an internal trade-off we must make between price and quality. Since the customer and the local players are price-sensitive, we can help them buy the net with suitable price incentives like EMI, partnership with local panchayats or banks, and replacement of old nets.

I: Okay, agreed. What about the distributors?

C: We can integrate forward to have our exclusive distributors or increase our presence in areas where we are not a market leader.

I: How do you assess and bridge the gap in the current distribution network?

C: For assessing the gap, we can look at proxies like the number of dealers per area or the number of retail customers per dealer. Also, revenue per dealer or total orders served, along with the growth rate in orders, can be used here.

For bridging the gap, you can look at the hub and spoke model, like having regional centers on major shores. Also, you can focus on an exclusive dealership, a better incentive structure for the dealers to push our products and focus on areas where we currently don't have any presence.

I: Okay, that is it, Emil. How will you estimate the annual revenue for the client?

C: After taking time to structure my thoughts, I gave my approach to estimate the total units sold per year.

I started from the total population and then used filters like age, average employment rate, and percentage of workers in the primary and fishing industries. Then I took an estimate of people working as fisherman among the people working in the value chain. Then I estimated the total number of fishing boats by segmenting the customers into organized and unorganized. I also incorporated product lifecycle and reserve nets per boats within the model.

He was also looking for the numbers and my rationale for each assumption I made.

• Q1. Tell me about yourself.
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• Q2. Where are you from?
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• Q3. How have you been coping with COVID's impact in Delhi?
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• Q4. What's a Startup Studio's business model like?
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The client is a billion-dollar IT services player (application and infrastructure management). They have been lagging behind in profitability and need help with this problem.
[Please note that I stands for Interviewer and C stands for Candidate]

C: What is the quantum of the lag in profitability? Is there any data available for how short is the company falling of its targets? Also, since when has the company been facing this issue?

I: Yes, the company has been clocking 12-13% EBITDA compared to a 15-16% expectation. The issue has come to light in the last 3-4 years.

C: Thank you. As I am not too aware of the concerned industry here, could you help me understand what do we exactly mean by ‘application and infrastructure management’ services?

I: Application services are simply app development and maintenance while infrastructure management services range from cloud-based data management to ERP solutions to core system maintenance and a few other add-ons.

C: I would like to know a bit about the client to establish some context here. Can you help me the following details? Location, Areas of operations (client bases), age/maturity of company, size of the company (in terms of workforce- as it is an IT services company).

I: Sure! The company is based in India and has offices in Bangalore, Chennai, Pune, and Trivandrum. It is a mid-90s company and has approx. 2500 employees. 80% of the client base is in US.

C: Sounds good. To understand the offering better, is it safe to assume that the company offers customized solutions to every client given different scales of client firms?

I: Yes absolutely. The requirements of every client would differ based on its scale and specific solution needs.

C: Also, I would assume that there would be a fair amount of competition in India in this industry. Can I get some information on the competitive landscape here?

I: Yes, that is correct. There are 3 tiers of companies serving as good competition. Tier-I would be the likes of TCS & Infosys, we would be a part of Tier-II followed by smaller local players.

C: Thank you. I have sufficient information to dive into the issue. As the company is experiencing a profitability issue, I can define profits as Revenues - Cost considering a single stream of revenue which is service fees.

I: Yes, ignore revenues for now, let us look at costs for the client.

C: Sure! As it is an IT services company servicing mostly US-based clients, people’s costs would be a major component of total costs for the client apart from other operational and non-operational costs like.

I: Yes, ignore other costs for now. Let us focus on personnel costs which forms 80% of total costs.

C: To ascertain personnel costs, I would like to use the following equation = No. of offices x No. of projects x Avg. no. of people per project x Avg. CTC.

Moreover, Avg. no. of people and CTC will be different for different tiers of employees.

I: Yes, that seems fine but on what other ‘lever’ would the costs depend?

C: Further, the projects would have different tiers of personnel and their CTCs will be different based on level of skill/seniority.

I: Yes correct. Can you think of any other ‘lever’ that could vary costs in this context?

C: I have a few questions which I need more clarity on. Is the employee structure top-heavy or bottom-heavy? Moreover, could efficiency of certain tiers of employees also be a cost driver here?

I: In such a firm, the structure is almost always bottom-heavy. Also, what do you mean by efficiency, can you explain your thought process behind this. You can also consider the office space available as a factor of personnel costs in this context.

C: Sure. By efficiency I meant the amount of time that an average team would take to complete a project and benchmarking that with that of other competitors, we could get an idea about the relative efficiency of the workforce. Also, I think I missed the space aspect earlier. Different office locations would have different office space available and hence, the costs could vary across these locations. Would you want me to explore this further?

I: Yes, that sounds good. How would you benchmark the efficiency of employees when projects are customized and not uniform across various clients in different industries?

C: Yes, I agree that benchmarking would not be fully accurate, but it is just to get an idea of relative costs. If we take a hypothetical project and allocate a group of employees and compare across competitors for the same, we might be able to assess if we are less or more efficient than them and get an idea of relatively higher/lower costs.

I: Alright, that makes sense but like you said, it is not possible to have this data and hence is a hypothetical scenario. Also, we have ¾ mins. left with us. Can you quickly think of some additional points that could drive personnel costs?

C: I have a few more points which could be cost drivers. Firstly, we could look at benchmarking the salaries of different tiers of employees with that of the competitors. Secondly, we can compare the utilization of employees per annum and compare it with that of competitors.

The client is a specialized chemicals manufacturer and is facing issues with its profitability. They need us to help them figure the problem and recommend solutions.
[Please note that I stands for Interviewer and C stands for Candidate]

I: Focus only on structure and idea generation.

C: Sure! Since how long has the client been facing these issues? Also, I would like to know a bit about the client and the industry it operates in and the timeline in which the client is looking to resolve the issue.

I: Let me help you with some initial information. The client manufactures chemicals used further to produce plastics, paints, textiles, and leather goods. It has 400 different SKUs and clocked revenues of INR 160 Cr. last year. They require quick solutions which can be implemented within a 2-3-week period.

C: Thank you for that information. (Made some assumptions and confirmed with the interviewer: B2B clients pan-India and business model/value chain were from Sourcing-Manufacturing-Sales & Distribution). Asked a few more questions about the competitive landscape.

I: Yes, you can go ahead with that understanding. Ignore the competitive landscape. Although could you tell me the kind of clients this company could have?

C: Yes, I would assume consumer durables, apparel, lifestyle brands to be key clients. Is that a good assumption?

I: Yes, that sounds good. Go ahead!

C: I will break down profits into Revenue-Cost. Assuming multiple revenue streams and cost centers for 4 different types of products, would you like me to focus on any of these specifically or can I explore each one by one?

I: Yes, that is a good point. Leather products are driving down the profitability primarily. Can you explain about the cost structure/heads of this company?

C: Sure. On the nature of costs, I could divide them into Operational & Non-operational costs. On the basis of behavior, I could use a Fixed, Variable & Semi: variable classification.

I: Good. Name a few operational & non-operational costs here and let us proceed with it then.

C: Under operational costs, I would list down raw material costs, labor costs, in-bound logistics cost, production process costs, warehousing & storage costs and distribution costs including outbound logistics, R&D costs, Administrative costs, and technology costs. Under non-operational I would consider depreciation and finance costs.

I: Alright, let us move to the revenue aspect now. How would you proceed?

C: Before I dive into it, could you help me with an SKU distribution across all 400. This is to determine how heavy is the leather products’ SKU share among the overall SKUs offered.

I: Sure. Consider it as 50, 70, 120 & 160 SKUs for plastics, paints, textiles, and leather goods, respectively.

C: Thank you. As we can observe that leather goods for the highest share of the overall SKU mix, the top line can be majorly affected by leather goods. Following this, I would break the revenue as no. of leather goods’ units produced avg. price of leather SKUs. Do we have any information on the quantity produced or the pricing policy/trends that the client has observed for their goods in the past?

I: Good observation. So, the client follows a cost + mark-up pricing model. The quantity of production has not changed. Anyway, can you quickly suggest some ideas for a company like this to improve profitability?

C: As we have a short timeline to improve profitability, I would look at the SKU mix offered. We would have to increase sales effort on certain SKUs and reduce or phase out a few. Producing and selling larger SKUs could reduce carrying costs and packaging costs. Since our clients are all B2B, if the smaller SKUs are not truly relevant, we could look at reducing sales of these and reallocate resources towards larger SKUs. Would that be a fair suggestion?

I: Yes, although the cost of producing the primary material is the same across all SKUs, the other product costs could be tweaked. I like the idea of pushing large SKU sales although phasing those out would not be recommended as there are certain buyers for its who would not purchase beyond a certain limit due to many reasons. If phased out, the revenue and profits from that segment could get totally wiped out.

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Your client is a Brick Manufacturer. A new player has entered the market and slashed the price by 10%. The client is asking us what they should do.
[Please note that I stands for Interviewer and C stands for Candidate]

C: To understand our client better, can you tell me how old is the company?

I: The client is an old company in this line.

C: Does the client also have other lines of business?

I: No. The client only manufactures bricks and sells it directly to customers.

C: As we are selling directly to customers, can I assume that most of our customer base is builders?

I: Yes. Most of our customers are small builders.

C: Okay. Where is the Client located? Also, what is our scale of operation?

I: The Client is located in East India. It has a single plant in a catchment. It is one of the biggest players in East India.

C: Who are our competitors? Also, is it a fragmented industry?

I: Yes. It is a fragmented market with 30 odd players in the market. There are 2-3 big players in the market and our client is one of them.

C: Okay. What is the price that we are currently charging for the brick? Is that the price that our competitors are charging as well?

I: We are currently charging Rs. 10 per brick. Yes, the price throughout the market currently is more or less similar. However, the new player has entered and cut price by 10%.

C: As we have to decide if we should cut the price by 10% or not, we can consider the following before taking a decision. Our Market Share in the current market, the current pricing of the product, the process of manufacturing, our customer base and their perception of a price cut, the quality of our product vis a vis our competitors.

I: This sounds good. Let us look at the market share but I want you do a few calculations for me first.

C: Sure.

I: Let us say we are selling 100 thousand bricks. Should we reduce our price? Is it feasible?

C: I would like to decide the feasibility of price reduction on the basis of our profitability. To understand more about it, do we have any information about the costs incurred for production as well as the fixed costs?

I: Yes. The variable costs are around Rs. 3 per brick and the fixed cost is Rs. 20000 currently.

C: (Asked for some time for calculating profit) Currently, we are selling a 100 thousand bricks at Rs. 10 per brick. Thus, our sales are Rs. 10 Lakhs. The variable cost of producing 100 thousand bricks is Rs. 3L. Contribution is 10L minus 3L i.e., 7L. The fixed costs are 2L thus our profit is Rs. 5 Lakh. We have a profit margin of 50% currently. If we reduce the price 10% per brick for the same sale quantity, the sales would be 9L and the profit would be 4L. Although our profit margin would reduce from 50% currently to around 45%, it still seems a feasible option.

I: Sounds Fair. How many bricks will I have to produce and sell if I still want to earn a profit of Rs. 4L without reducing the price by 10%.

C: In this scenario, the price of the brick is Rs. 10. We need to earn a profit of Rs. 4L. The fixed costs will not change due to change in quantity of sales and production. Thus, the contribution will be 6L. Per brick contribution is Rs. 7, thus, I will have to produce and sell around 85,000 bricks.

I: Yes, that makes sense. What does the contribution signify?

C: The contribution is that portion of revenue which is not used up by variable costs and used to cover the fixed costs. Contribution is also considered while calculating the break-even quantity essential to keep the business running in the short term.

I: Good. All the factors you listed while considering a price cut make sense. However, as we are short of time, can you tell me why would you consider customers while deciding a price cut?

C: As we are an established player manufacturing since many years and amongst the Top 3 players, can I assume we would be having a specific loyal customer base since many years?

I: Yes, we do have some loyal customers who value our quality.

C: Customers might perceive price cut as reduction in our quality of bricks. It can create a lower perceived value for the product and buyers might consider our product less valuable.

I: That sounds fair. So, what do you think should we do?

C: As currently the pricing in the market is more or less similar, 10% reduction by one player will affect the pricing of other competitors as well. Based on the calculations, a 10% price reduction will affect our profitability by 5%. We are a big player in the market, and we have the capacity to reduce our prices and focus on increasing our volume to compensate for the reduction in profit. Also, since most of our customers are small builders, a 10% saving in brick cost might also be an attractive opportunity for them to shift to another manufacturer since the product offered by all players is similar. Thus, we can also go ahead with reducing our price by 10%.

I: Correct. Seems good. That will be all.

Your Client is the manufacturer of fishing nets. These nets are used in agriculture, fishing, and construction. The growth has slowed down. It wants to grow at 15%.
[Please note that I stands for Interviewer and C stands for Candidate]

C: (Clarified the problem statement). What is the current growth rate of our client? Has there been a fall in our growth rate?

I: The client is currently growing at 5%. It is a well-established player and was growing at 10% earlier but the growth has gradually reduced to 5% over the last few years.

C: What is time period within which we need to achieve this target of 15% growth?

I: We need to achieve this target in the next 3 years. Let us only consider the fishing industry for this problem.

C: Okay. I would like to understand at what rate is the fishing industry growing.

I: The industry is also growing at 4-5% and our growth currently is in line with the growth of the industry.

C: Okay. Where is the client located? Also, what is the distribution channel that the client uses?

I: The client is located in India. It operates through dealerships and has a distribution network all over India.

C: I would like to understand a little more about our competitors and their share in the market.

I: We are one of the major players in the market. Our market share is about 70%. We have not been able to grow much as the market has now stagnated.

C: Okay. In order to grow at 15%, I would like to explore the existing market and also explore new geography or businesses.

I: Let us consider the existing market for now.

C: While exploring the existing market, I would look at increasing the volume of sales or increasing the price of our nets.

I: I would like you to look at increasing the volume of sales first.

C: The volume of sales can be increased by increasing our customer base or increasing the quantity sold to a particular customer.

I: Can you help me estimate the size of the market for fishing net?

C: Sure. Fishing net can be used for sea water as well as freshwater fishing. I would divide the population of the country on the basis of access to coast or river and those with no water body around for fishing.

I: Let us consider only seawater fishing here. Since we are short of time, tell me the approach first and then you can calculate.

C: Sure. I would divide population of India who live along the coast and those who live in landlocked areas. Out of the people living along the coast, I would divide them into those living in rural areas and those in urban. The population practicing fishing as a profession in urban areas would not be much thus, I would first look at the professions practiced in rural areas along the coast. On the basis of their professions, I would divide the population majorly between agriculture/farming, poultry/animal husbandry, fishing and other. Out of the population that practices fishing, I would consider the number of households here and divide the population assuming 5 people per household. This would give me a number of fisherman and assuming every fisherman buys his own net, that would be the number of nets required. However, the fishermen would not buy a new net every year so we also need to factor in the number of years after which they would buy a new net.

I: This is a good approach. Can you also tell me what other strategies can we look at to grow in the existing market?

C: Firstly, we can increase the overall distribution network that we have. Currently, we are only selling through dealership. We can increase our distribution channels and also venture into setting up our own retail stores. Or we can also increase the number of dealerships we have within the same channel.

Second, we can analyze the current market and try to onboard more customers.

Third, we can diversify our product. We can introduce different sizes for the fishing net. We can also introduce a variety in the shapes of the mesh.

Fourth, we can market our product better. As most of the customers we are targeting are from rural areas, we can market our product through radio or local bazaars and trade fairs.

Fifth, we can also consider acquiring other players in the market. However, that depends on two factors – their willingness to sell and our capacity to buy.

Sixth, we can look at the pricing of the product.

I: This sounds good. I think you have covered all. We can stop here. Do you have any questions for me?

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Client is global IT company who is facing problem with revenues from new client. Please help.
[Please note that I stands for Interviewer and C stands for Candidate]

After the initial introduction, there was a small conversation on industries which she works on.

I: I have given a case from the industry which I specialize. If you want, we can do a case from some other industry.

C: I can try. Can I ask questions about processes specific to the industry, wherever relevant?

I: Sure, I will help you with industry specific practices.

C: Reiterated the problem statement and asked Preliminary questions (CPCC), questions relevant to the case, how long the problem has persisted? The definition of revenue from new clients (First year revenue). Any particular geography which is facing the issue? Revenue generation from old client’s v/s new clients? Any particular service industry facing this problem and Competitive landscape.

I: Problem has been there for 6 years now. No specific location assumes any one region and team working there. The revenue generation is 99% from existing clients and 1% from new logos. Problem with every vertical (Industry served by the IT company). Company is growing with the market, but new client revenue is sub-par comparing with the major Competitors.

C: My overall approach would be look at the client acquisition team as a separate entity from the company and look at the structure and hierarchy of the team and the human resources (Ability and Willingness), approach followed by the team while dealing with the prospective clients, and lastly the integration between the both the teams.

I: Sounds fair. Client acquisition employees are generally called hunters. So, the team has Junior hunters, Senior hunters, and Team leader. The team leader reports to the vertical heads.

C: Talking about the division of work, I assume that the junior hunter generally research on the prospective clients, prepares pitches and the senior hunter leads the client interactions? Further, talking about the Ability in terms of qualification, job fit and attrition and also in terms of number of hunters & Willingness in terms of monetary and non-monetary factors. Do you want me to dive deep into either of the factors?

I: Junior hunters are involved in client interactions too. No problem with Ability. We can discuss about the willingness aspect later in the case.

C: Sure, Should I look at the approach followed by the team?

I: Can you elaborate?

C: I will try to analyze the buckets such as Lead generation and targets, vertical expertise of the hunters, resources allocation and sharing with the main team (Integration).

I: There is no set procedure for lead generation. The hunters get leads from farmers (Who have contacts and leads). The farmers are not formal employees of the company but are friends with the hunters. No problem with resource sharing, but the integration is a problem.

C: I could identify few problems here. 1) Lack of formal structure in place which leads to haphazard targeting. 2) Single channel of lead generation and that too informal, 3) Integration problem could be that the client acquisition team is neglected by the vertical heads as they might concentrate on the existing clientele since the revenue share is pretty high.

I: Right, these are few of the problems. However, I want to you to find the reason why the same is happening.

C: Okay, sure. (Confused, as the interview was going well and now the interviewer wanted me to change the course of thinking).

I: Think on a considerably basic level, one aspect which has led to the problems mentioned above.

C: Any particular aspect?

I: Revenue formula.

C: So the Revenue would number of clients multiplied by the average revenue. Has there been a dip in the number of clients through these years?

I: There has been an increase, in fact.

C: Bringing in the quality aspect here. New logos have been increasing but total revenue is not picking up which might be due to the ticket size from new clients.

I: Right, link it to the salary aspects of the hunters.

C: The salary of the hunters would be comprising of fixed, variable and bonus component. Starting with variable and bonus component. Looking at the trend and revenue generation from the new clients, I assume that the bonus component is linked with the number of clients rather than the size?

I: Great, can you give few recommendations?

C: Streamlining the process, information sharing from the teams working with the existing clients to know the industry trends which might help in targeting new clients, Salary structure, where bonus and also the variable component is linked to the size, progressive variable pay policy. (Tried explaining which would be applicable in the short term and long term but interrupted as the interview was already over 45 minutes)

Growth Strategy for a net manufacturer.

The case was more in terms of idea generation and also the approach followed during a guesstimate.
[Please note that I stands for Interviewer and C stands for Candidate]

C: Asked the Preliminary questions. The relevant facts were that the major product line was the fishing nets, and the case was about fishing nets.

I would approach the problem by looking at the equation, Revenue= Quantity sold X Average Price, I would first look at the Pricing Strategy in terms of demand elasticity of the agricultural nets.

I: Explain more on Elasticity.

C: If the demand for our product is inelastic, an increase in price would increase our revenue and if the demand is elastic, a decrease would increase our overall revenue.

I: Fair enough. Go ahead.

C: In terms of quantity sold, I would evaluate the options in terms of a 2x2 matrix, keeping product offering on one axis and market on another axis (Ansoff matrix). Further, I would analyze the value chain from production to distribution to check for any bottlenecks.

I: Why Value chain? Cost is never a problem; we just have to look at the top line.

C: Analyzing the value chain to see if there are ways to enhance production capacity to meet demands which are not satisfied currently.

I: Right, no problem with fulfilment of demand. And now we are talking about demand, can you estimate the market size for fishing nets in India.

C: Sure, I would first try to lay out the approach and look for reduction factors and come up with a number.

I: Okay.

C: Since our target audience are fishermen, from the 130 million population, I would eliminate half of the population looking at the geography of the country (southern half) assuming symmetry. Out of the remaining area, assuming 25% being the coastal region where fishing is done. I would add 20% of the fishing in coastal region to arrive at inland fishing.

I: You can ignore inland fishing.

C: Of the population, I would split it in terms of occupation. (Agriculture, Manufacturing, and Services). Around 60% of the population is involved in agriculture and similar activities. Out of which I am again assuming around 60% to be involved in Fishing and related activities. Now I would divide the population in terms of number of people per household and arrive at the households involved in fishing. Calculating this...

I: That is fine. We are short on time, summarize the case.

C: Summarized.

Client is Pipe manufacturer. We need to reduce the cost by 150 crores. A. Growth Objects: Historically, the company had 8 - 10% growth. New target is 5%.
[Please note that I stands for Interviewer and C stands for Candidate]

C: Before asking question would want to know which type of pipes and the base which we are looking at.

I: Good Question. We produce pipes to transport oil and gas to consumers and hence the costs are extremely high, around 6000 cr.

C: Asked the preliminary questions. No important facts as such.

I: What are the heads under which you would categorize the costs.

C: Material, labor, machine, production methods. Any particular category to focus upon.

I: Let us talk about material. Our raw material constitutes around 60% of the cost. Steel which we bend and make the rolls for our pipe is 95% of our raw material.

C: I will start looking at the procurement process currently and try to find potential optimization methods.

I: We procure for the entire year in one shipment currently.

C: Do we have possibility to alter this, as we might be saving on inventory costs.

I: Inventory is not a problem. But we can break the total order in multiple orders. Efficiency and utilization are an issue. But if we have the liberty to order as many times as possible, we like, what should be the number according to you. Like 1,2,3, 4 or maybe even more?

C: I would go with 2 as we can assess efficiency from the first order and order according and saving on transportation.

I: Great. Should I order 80% in the first or 20% in the first?

C: Should be 80% as would have safety margins and reduce stock out costs as it might disrupt the entire process.

I: Sure. Doing this we can reduce the steel cost by 2%. Can you come up the number?

C: Sure. 60% of 6000 would be the cost of raw material, which is 3600 and 2% of which is 72cr. (Instantly realizing that I missed the 95% part). Sorry, did not factor the 95%, factoring in would come to be around...

I: That is completely fine. Number is secondary.

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Client is a ropes and nets manufacturer. Their growth has slowed down while their margins are improving. They want to achieve full potential. Help them.
[Please note that I stands for Interviewer and C stands for Candidate]

C: What is the current growth level?

I: Single digit.

C: What is the KRA for achieving full potential?

I: Sales acceleration- double business in 5 years.

C: Who are primary clients and what is our product mix?

I: Primary industries are fishing, construction and agriculture. Let us restrict our analysis to nets.

C: Is it correct to assume our products include safety nets, fishing nets and shade nets predominantly across the three industries?

I: Yes

C: Is it safe to assume that we operate across the value chain and the distribution network is dealership module with region wise traders in place?

I: Yes, distribution module is the most critical and works in the dealership mechanism.

C: How much market share is captured by us and how is the competitive landscape?

I: We are a dominant player.

C: Shall I analyze all the 3 industries and layout their sales acceleration strategy or focus on any particular industry?

I: Let us start with fishing industry.

C: How many types of fishing net do we have? What is the quality, material, and life of these nets?

I: Nylon and rayon nets. Average life 7 years

C: I would like to analyze the product mix, pricing, and distribution aspects across the existing and new potential markets.

I: That is good. Asked follow up questions on what in each bucket would you analyze. Asked to guesstimate the size of the fisherman market.

C: Discussed broad approach. Extrapolated Bengal population to average out the population of coastal states. Divided population by income levels and assumed proportion of population in the segment involved in fishing industry. Estimated overall market demand considering initial and replacement demand based on average years mentioned. Considered market growth @ 5% lower than GDP owing to nature of product. Selling Price of net given by interviewer.

I: Summarize the case and give key next steps to achieve full potential.

C: Checked for any time or spending limit. Suggested recommendations across product, contract-strategy, and distribution network. Product diversification into relatively lower grade and life of net. Increase variants other than rayon and nylon and other use cases for the product. Recommended long-term contracts with fisherman and rental option. Streamline Distribution network across operations. With dealership restricted to one player across prominent regions. Reduce overheads and increases sales.

Your client is an OTA aggregator. It is growing really well at 20-30% over the last 5-6 years. It wants to be IPO ready in 5 years but has negative EBITDA. Chart out the strategy.
[Please note that I stands for Interviewer and C stands for Candidate]

C: Since when is the client operating?

I: 10 years.

C: What is its current market share and how many competitors exist?

I: 30% share and it is the 3rd largest player among the few competitors.

C: What are key services. Are we like MMT with flights and hotels as are key product offerings? Do we offer any other product?

I: Yes, while flights and hotels capture 80% and 15% of revenue mix. We also offer train/bus booking and experiences with experiences captures less than 1%.

C: Are we facing negative EBITDA across all segments?

I: Yes.

C: Primary revenue sources would be commissions. Is my understanding correct?

I: Yes.

C: Is it safe to assume we are primarily catering to the upper middle class and the rich?

I: Yes.

C: Since a path to EBITDA positive is key consideration. I would like to divide my analysis into understanding revenue growth opportunities and secondly look at areas of cost minimization. Is that ok and would you like me to focus on any of the above analysis?

I: Yes, let us focus on revenue.

C: As our revenue model is commission based, I would like to confirm if it is safe to assume that the commission is based on both value and volume of transactions?

I: No, it is based only on value.

C: Since this is a B2B2C operations, I would like to analyze revenue growth opportunities through 2 key stakeholders the customers and the retailers.

I: Let us start with retailers.

C: Shall I focus on flight and hotel segment as they comprise 95% of our revenue?

I: Yes, can you give me suggestions on revenue improvement for these two segments.

C: Laid out my analysis across 3 segments: existing revenue model and scope, and contract strategy, promotions. Suggested enhancing existing revenue model by transition to commission model based on value and volume to benefit from both open and click rates. Suggested push marketing for low ticket purchases increase experience segment contribution. Revamp contract strategy to ensure increase product placement and bundled offers for improving commission paid by retailers.

Focus on revenue from advertisements on desktop, mobile website, and mobile application. Enter new segment and deprioritize segments with low revenue potential. Discussed on bus and train segment. Increase experience offerings to include products offered by likes of Thrillophilia.

I: We are planning on entering car rental. Should we do that?

C: Broke down the cab rental space talked about existing players like Zoomcar predominantly which has captured the market. Discussed about time and resource constraint given negative EBITDA of existing operations.

I: Agreed and asked if we should acquire something like Zoomcar?

C: Suggested no and substantiated based on disadvantages despite the benefits of the strategy keeping in mind the objective of IPO in 5 years.

I: Agreed with recommendation. Please summarize the case.

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Client is a hospitality chain with properties in Chennai and Kolkata. The chain has been operational for the past 40 years. Due to Covid-19, the chain has witnessed a drop in number of hotel bookings leading to a capacity utilization of 50- 55% which is below the normal level of 60-70% that the chain expects. Keeping in mind the effect of the pandemic, help them in formulating a strategy to improve their capacity utilization.
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Does the client have any operational or budgetary constraints? Do we have any specific timeline or metrics in place to evaluate any strategic option?

I: The client does not have any operational and budget constraints. However, the client would like to see improvement in utilization to the normal levels of around 60-70%.

C: Okay. Can you tell me a bit about the hotels that the client operates, how many hotels the client has in each city, what kind of services are offered?

I: Sure, the client has 2-3 hotels in Chennai and 2 in Kolkata. All the client properties are 5-star hotels under the same brand. The hotels offer a full range of services that would be expected in a normal premium hotel.

C: Can you tell me about the kind of customers who visit the hotel?

I: 70% of the customers for the hotel are business travelers, rest of 30% are primarily foreign tourists.

C: I am assuming that the decrease in the number of customers would be across the two major customer segments. Business travel might have decreased due to increased prevalence of virtual ways of working. Tourism sector has taken a hit which might have resulted in a reduction in the number of visitors coming to the hotel.

I: That is correct. The decline has been across both the customer segments.

C: The utilization of rooms in a hotel is dependent on price. In order to increase utilization, we can look at decreasing the prices. However, such an option can led to dilution of premium image of the hotel. Also, the price elasticity might be very low considering the kind of customers that the hotel caters to.

I: Yes, lowering the prices is not an option.

C: Is the hotel following dynamic pricing?

I: Okay, this can be one option that can be looked at. What else can the client do?

I would like to look at the issue of increasing utilization from two perspectives, one would be to look at ways to increase the hotel bookings by the current Target Group and the second would be to look at ways to attract different set of consumers to the hotel.

I: Let us look at different customer segments that can be attracted by the hotel.

C: We can divide customers into two groups primarily: Business Customers and Non-Business Customers.

I: Let us look at the business customers.

C: For the business customers we can further divide these according to the needs that the hotel can serve. Historically, majority of the business customers would be those staying at the hotel for 2-3 days while being on a corporate visit. Apart from this, the hotel can be used to organize corporate events or industry conferences, conventions etc.

I: Okay, let us look at the non-business customer segment.

C: The non-business customers can be divided into three major buckets: First, tourists or travelers which will include both domestic and foreign. Second, people who come for weddings, art exhibitions or other cultural events and third, people who come to the hotel for dining or entertainment purposes.

I: Okay, now that we have identified different kinds of customers: can you tell me which of these customer segments should be targeted?

C: The number of business customers will remain low as a lot of companies are starting to adapt to a virtual workplace setup. The hotel premises can be optimized for hosting weddings and other cultural events, but this segment will not really grow significantly in size in the future. I would focus on tourist segment of customers which would be expected to increase once the effects of Covid-19 subside.

I: Fine. How would you go about ensuring that this new segment of customers goes for our client’s hotels?

C: We can break down the issue into 4 aspects: Customer Need, Promotion, Accessibility and Service Experience.

I: Can you elaborate on these?

C: Sure, starting with the customer's need. Over the world, tourists seem to be attracted by the value proposition of hotels that give them a flavor of the local culture and lifestyles.

Kolkata and Chennai are two cities that are rich in their heritage and the hotels that our clients have can be shaped to reflect the cultural heritage of these cities. On top of this, tourists prefer authentic experiences and hotels which are technologically advanced.

We can have a different sub-brand for properties offering this new value proposition.

I: This seems fair. What about the other aspects?

C: Under promotion, we need to ensure that our advertising is consistent with the new proposition in terms of the message and the media on which we promote the client’s hotel brands.

Digital presence can be optimized using SEO and digital analytics can be used to target high propensity customers. Under accessibility, we need to ensure that our hotel is listed on all the major OTAs such as Expedia along with optimizing our own website.

The service experience needs to reflect the new value proposition and changes would be required in terms of tangibles, employees, and the ambience.

Our client is a 2-wheeler manufacturer based out of India for the past 35 years. In the past 3 years, it has witnessed a drop in market share from 20% to 15% and drop in EBITDA from 18% to 13%. Help the client.
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Can you tell me about the scale of operations of the client in terms of geography and the distribution channels of the client? What is the current capacity under which it is operating?

I: The client is a Pan-India player operating at 85% capacity. It has a 3rd party distribution and dealer network.

C: Can you talk about the kind of vehicles that the client manufactures? How many different SKUs does the client have?

I: The client manufactures motorcycles in the mid-price segment and has 5 different SKUs.

C: I am assuming the client would be catering to the middle–income segment.

I: Yes, that is a fair assumption.

C: Can you tell me about the competition faced by our client? Are they facing a similar issue in terms of the drop in EBITDA?

I: There are 4 major competitors including 2 emerging players who have taken the bulk of the market share that we have lost. The competitors have not seen a drop in their EBITDA margins.

C: I would like to focus upon the market share issue first. Is the market share in terms of volume or value?

I: It is in terms of value.

C: The market share decline in this can be due to two factors: First, the market share of the higher-priced segments in which our client does not operate has increased at the expense of mid-price segment. Second, our own share within the mid-price segment has decreased.

I: It is a case of both. Let me give you some data:

Segment: Premium
Share: 10
Price Range: >95000
Growth Rate: 30%

Segment: High
Share: 20
Price Range: 65000: 95000
Growth Rate: 25%

Segment: Mid
Share: 35
Price Range: 40000: 65000
Growth Rate:12%

Segment: Low
Share: 35
Price Range: <40000
Growth Rate:15%

C: The mid-price segment has grown at a below average rate of 12% which is one of the reasons for the falling market share of our client.

I: Can we do something about this?

C: Probably enter a new segment.

I: Let us say the client is confused between low and high segment, which one should he choose?

C: It will depend on 4 factors: Size and growth of the segments, profit margin in each segment, level of competition within each segment, client’s expected segment share in each segment.

I: Looking at the numbers that I provided, where do you see greater potential?

C: The high-priced segment is more attractive due to its superior growth rate. Keeping the macro-economic trends in mind, this segment will remain highly lucrative for the future. Also, it might be possible for us to upsell the existing customer base.

I: Seems right, the client has also faced declining share within the mid-priced segment. Can we explore what could be the possibilities in this case?

C: Sure, it can be a function of prices and volume of motorcycles sold. Do you want me to look at any one issue in particular?

I: Let us focus on quantity.

C: The quantity can be constrained at either the supply side, at the dealer stage or at the customer end. I am assuming that since we are running at below capacity at 85%, supply side is not an issue.

I: Yes, leave the supply side. Let us look at the dealers first. What could be the possible issues?

C: There could be two levels of issues: The first could be that the number of customers visiting the dealers themselves has decreased due to some factors such as alternate D2C channels or other dealers in the area. The second could be that the dealer is not pushing our product due to a lack of monetary or non-monetary incentives.

I: What can be done about incentives assuming we cannot increase prices or reduce the client margins?

C: Increase the margins for our dealers. We can use our excess capacity to reduce fixed cost per unit leading to a lower overall cost which can result in higher margins for the dealers assuming we do not pass the benefit to the consumers. The other option could be to offer attractive credit support to the dealers.

I: Okay, let us move on to the issue of customer demand. What could be the possible issues here?

C: We can look at 4 things here: Customer Need, Promotion, Purchase and Post-Purchase. For the first issue, Customer Need, do we have some data on how the client products fare against our competitors in terms of Performance, Features and Durability?

I: The product is competitive in these aspects. Do you think the client can introduce a greater number of SKUs?

C: It depends on how heterogeneous the customer segment is. If it is not heterogeneous, an increase in the number of SKUs will lead to an increase in operational costs with no substantial increase in revenues resulting in lower profits.

I: Seems fair. Let us look at the other issues.

C: Yes, assuming that the product is suited to the customer needs, we can look at Promotion which includes both Push-based and Pull-based promotion. Pull-based promotion will consist of advertising and use of digital marketing to ensure that the client product is within the Initial Consideration Set for the customer. The Purchase experience needs to be seamless and the availability of affordable payment options such as EMIs is extremely important. The Post-Purchase aspect consists of servicing/maintenance, warranties and response to customer feedback.

Devise a Go-To-Market Strategy for a smart watch manufacturer.
[Please note that I stands for Interviewer and C stands for Candidate] 

C: What is the objective behind this move? Does Titan have any budgetary or operational constraints?

I: The share of conventional watches is stagnating, and the client expects huge potential for the smartwatch as an upcoming segment. The objective is to increase market share. There are no budgetary or operational constraints.

C: What is the price range in which its Titan is planning to launch the product.

I: There are two segments that we are looking at: Rs 5K-10K and Rs 10K-20K.

C: Who are the current major players in the smart watch market? What are their current shares?

I: The major players are Apple, Xiaomi and Samsung. The smart watch segment is still in the growth phase.

C: Sure, we can look at any GTM strategy in terms of 4 aspects: Customer TG, Product, Promotions and Distribution/Retail Channels.

I: Let us look at customers. How do we define them?

C: We can define the customers by looking at the needs that a smartwatch can cater to. These needs can be divided into two broad aspects: Functional and Psychological.

I: What will come under each of those broad aspects?

C: Functional needs would include Fitness tracking and Health monitoring, Environment Sensing, Sync capabilities with other devices and Smart Home applications. Psychological needs would include aspects such as Social Status, desire to be seen as cool for having a high-tech product of a brand such as Apple.

I: How do we go forward from here?

C: We need to decide which one of these different needs is going to lead to a significant customer segment. Do we have any data on this?

I: No.

C: I feel that among the functional needs, fitness is going to be a major driver. We can target this segment.

I: How do we define and target such a segment?

C: The customer segment can be largely described in terms of demographics and geography as most technologically oriented fitness-conscious people would be of a younger age group. Use of online channels for promotion and use of e-commerce platforms as well as D2C channels for distribution would be critical to reaching this customer segment. One way to increase the penetration would be to have tie-ups with certain fitness-based apps such as CultFit.

I: How can we ensure that our client gets a decent market share in this segment?

C: One major aspect in this segment would be the ecosystem effect: the greater the number of smart devices that can be connected to the watch, the greater would be its utility. The second major aspect would be the brand image, and this is where competitors such as Apple have an edge over our client due to their technological prowess.

I: But our client also has some complementary assets such as its retail stores like Croma and appliance brands like Voltas.

C: Yes, and it can also leverage some expertise in software from TCS. In addition, the Titan might be the only Indian brand in the segment giving it a unique advantage over others in this regard.

I: How should our client compete against its competitors, on what basis: Brand or Product?

C: The brand of competitors like Apple, Xiaomi and Samsung is too strong to be countered by Titan which is new in this segment. In such a situation, it is always better to compete for product superiority.

I: Interesting. If I were to estimate the size of the smart watches market, how would I do?

C: I would like to use a top-down approach. We can start with India’s population. (I proceeded to use factors in the order: Rural/Urban -> Economic Classification -> Age profile -> Propensity to purchase smart watch. I also mentioned the replacement period).

I: What are the factors that can affect the replacement period?

C: Economic prosperity leading to an upgrade in model, Technological Obsolescence, Desire to own new features and aspiration to own a smart watch from a well-known brand.

• Q1. Give me a quick introduction about yourself.
  Add Answer

Client is an Indonesian food delivery startup, like Swiggy and Zomato. It is a market leader in South Asia. Now it wants to enter India. Chart out a Market Entry strategy.
[Please note that I stands for Interviewer and C stands for Candidate]

C: Before starting with the analysis, I have some clarifying questions that I would like to ask.

I: Sure, go ahead.

C: I see that the client wants to enter India, is there specific purpose for this move?

I: Yes, the purpose is growth.

C: Okay. Fair enough. And how can we help our client here?

I: The client would like to know if we will be able to make unit economic profit in India.

C: Sure. I would love to help him with the best of my abilities. (Understood about the company, its USP and specifics about the revenue model, consumer, and competitors. Applied PESTLE to understand market attractiveness. I was asked to focus on unit economic profit and profit is function of revenue and cost. Therefore, I decided to deal with revenue and cost separately).

C: We can do a market estimate to determine potential unit revenue. (The major revenue streams considered were delivery charges and commissions from restaurants. After a detailed discussion, the interviewer asked me to consider 20% of bill value as commission and 25 Rupees as delivery fee. We also talked a little bit about the recent hike in delivery fee by Swiggy and Zomato. I finished the market estimation and the Interviewer nodded in approval after hearing the final number. Then we moved to cost analysis).

I: What type of costs would you consider while doing cost analysis?

C: For unit cost, I would like to focus on labor cost and fuel cost.

I: You can ignore fuel cost for now. How would you go about the labor cost?

C: We have calculated total demand in the guesstimate. From there, we can compute the total number of delivery persons by dividing demand by total number of orders per driver per day. Total number of orders per driver in a day can be found by incorporating peak and non-peak hours.

I: You can continue with this approach.
(I calculated the total number of delivery persons which came out to be a reasonable number.)

C: Do we have any information about the salary given to delivery persons?
(The Interviewer gave me an average salary paid to a delivery person. After doing necessary calculations, I found that the company will incur losses if it enters Indian market.)

Let us begin our case. Client has a diagnostic lab, one of the largest in the world. He wishes to get a good assessment of market in India.
[Please note that I stands for Interviewer and C stands for Candidate]

C: The client wants to enter the Indian market, I presume.

I: That is correct.

C: Before we start, I would like to ask some clarifying questions.

I: Sure, go ahead.

C: What kind of operations does the lab undertake? Does it specialize in certain areas or is it a general-purpose health lab?

I: It is a general-purpose health laboratory. It conducts 2 types of tests – Prevention tests and tests prescribed by doctors.

C: Okay. And what is the nature of technology used in these labs?

I: It is a high-end laboratory; they use the latest technology.

C: To assess the market, we can look into the potential revenue generated from these tests. I would like to analyze Prevention tests and Prescribed tests separately.

I: We can focus on the prescribed tests for the time being.

C: Sure. Since we are talking about one of the largest companies, do we have any data available on the proportion of revenue generated by prescribed tests.

I: Yes, the past data shows that prescribed tests form 80% of the revenues for the company.

C: That is great. That means analyzing the potential revenue from prescribed tests may give us a good idea about the Indian market!

I: That is correct!

C: For prescribed tests, we can analyze the market India possesses by dividing it into urban and rural areas. Rural areas have a huge scope, mainly because of two reasons. First, high percentage of population residing in rural areas. Second, rural healthcare has seen huge investments coming in in the past few years. However, there are some issues about operating a high-end laboratory chain in rural areas.

I: And what are these issues?

C: To start with, currently, there are very a smaller number of functional hospitals in rural areas. That means the number of doctors prescribing the tests would be much less than in urban areas. In addition to this, the sourcing of laboratory equipment and medical supplies would need a well-developed road connectivity. These facilities may be available in rural areas in future, say, in the next 10-15 years? However, if we are assessing the current Indian market, we can ignore rural areas.

I: Good analysis. Let us focus on urban areas.

C: Great! When we are talking about prescribed tests, we mean the tests prescribed to patients by doctors in case the former needs the test to be performed, is that correct? I mean, here we are considering all doctors, working at hospitals or clinics.

I: Yes. You have got it right!

C: Okay. We can do a guesstimate to find the number of doctors in urban areas.

I: No need to delve into that. You can assume that the number of doctors is 0.7 per people pan India.

C: Thank you! That will make the calculation much easier. We know that the current population of India is around 1.3 billion people. Using the data, you just provided, it seems like there are around 9.1 lakh doctors all over India. As number of doctors in urban areas are much more than in rural areas, we can safely say that around 60% of the doctors are working in cities.

I: That is a reasonable assumption. And how many of them would be eligible to prescribe laboratory tests?

C: I believe a huge percentage of urban doctors in India would be eligible to prescribe laboratory tests. Let us say, around 60% doctors fulfil this criterion. The final number comes out to be around 3.3 lakh doctors.

I: Good work. The number seems to be fair. How would you calculate revenue from this number? (This was followed by a discussion on average number of patients attended by a doctor in a day, the number of tests prescribed per day and an average cost of these tests in India. Both Interviewer and I were picking instances from day-to-day life to back our values. We came to an agreement that on an average a doctor prescribes 8 tests in a day with an average cost of 100 Rupees per test.)

C: From this data, the revenue derived from prescribed tests per day is around 24 crores. Say, the laboratory is open 300 days a year, the net revenue per year comes out to be 7200 crores. I presume that the client would require the potential revenue in USD.

I: That is correct. You can do the necessary conversion.

C: Taking the current conversion rate as 1 USD = 72 Rupees, the potential revenue derived from prescribed tests is around 1 Billion dollars. Do we have any data on the present revenue generated by the laboratory chain?

I: Sure, it generates around 7 Billion dollars a year. What do you think, should the client enter the Indian market?

C: India has always been a huge market for healthcare sector. A market with a potential revenue capacity of 1 Billion is an attractive option. It would also result in 14% increase in the global revenue. Moreover, this market is growing at a fast pace of 20% in India. I believe the client should consider this option. (Always back your opinion with number and current scenarios.)

I: Very well. A comprehensive analysis overall. We can close the case now. Thank you.

Let us take a small case. Client is the CEO of PVR Cinemas. Help him in understanding the unit revenue of PVR Setup.
[Please note that I stands for Interviewer and C stands for Candidate]

C: The revenue stream would include revenue from tickets, food and beverages, and advertisements shown before the movie or during the interval.

I: That seems right.

C: The size of a PVR Setup may vary with the size of the city/town it is being introduced in. Are we talking about a PVR Setup in a metropolitan area?

I: That is correct.

C: Okay. A general PVR Setup in a metropolitan area has 4 screens. Each screen has a capacity of 150 people. The price varies from place to place but we can take an average of around 100 Rupees. Do these assumptions seem valid?

I: The numbers seem fair. You can move forward with these values.

C: Thank you. The next step would be to calculate revenue generated from screenings.

I: And how would you go about that?

C: We can use the simple relation that revenue generated per show will be equal to (average number of screens) *(Percentage occupancy) *(average price of each ticket). (It was followed by a detailed discussion on how we would calculate percentage occupancy as it will depend on various factors like - day of the week, any new release, holidays, festivals etc.)

I: You can take an average percentage occupancy of 60%.

C: That is great! So, the number comes out to be around 150*0.6*100*4 = 36000 Rupees per show. We can multiply it by number of shows in a day. (We discussed the various factors to incorporate while calculating the number of shows. I was coming up with values based on my experience. For example, the length of English movies is around 1.5-2 hours whereas Hindi movies are generally of 2.5-3 hours. Further, around 20-30 minutes are allotted between the shows to clean the theatre and allow people to settle in for the next show.)

C: We can take the average length of movie as 2.5 hours. As per my experience, PVR Cinemas are generally operational for 14 hours in a day. Also, around 20 minutes break is given between shows for cleaning. After taking all this into account, we can say that around 5 shows are run on each screen in a PVR Setup. That means, in total, around 20 movies are shown in a day in a PVR Setup.

I: That seems fairly accurate. No need to calculate the final revenue. We can close the case here.