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

• Q1. How are you feeling?
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• Q2. Where are you from?
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• Q3. What are some of the interesting insights you found during your work at Axis?
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Client has a hotel chain with hotels across America and Europe. It also has 10-12 hotels in India. Growth is stagnated in America and European markets, so the client wants to explore whether to expand in India.
[Please note that I stands for Interviewer and C stands for Candidate]

C: (Laid down a broad level structure of a typical market entry disguised in a 2*2 matrix.)

I: Can you explore different customers segments and value proposition for each of them?

C: I gave a basic overview of customer segments in each part.

Your client is a dairy product manufacturer. It wants to double revenues in 3 years. How to go about it? Structure it.
Asked few clarifying questions about current operations of the company and used a standard growth strategy framework and explained each of the buckets and ideas in each of it.

Client is the CEO of an automobile manufacturer (assume a company like Hyundai). Government has just announced a lockdown due to COVID-19. What should be his priority for next 30 days?
The interviewer explicitly mentioned he just wants a structure and not ideas.

1. Business continuity:

a. Supply (Split the value chain and highlighted the impacted areas),
b. Demand (Drew a Customer journey).

2. Safety of People:

a. Own Employees,
b. Factory employees,
c. Management/Central office employees,
d. Distributors/Retail Stores.

• Q1. Asked some details about under graduation PORs.
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• Q2. What was your role at Siemens?
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• Q3. Any special project that you worked on? What was the methodology adopted? How did you contribute?
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Your client is a manufacturer (Assume industry of your choice), and it wants to improve its productivity.

Find areas of improvements and make recommendations to the client.
[Please note that I stands for Interviewer and C stands for Candidate]

C: Clarified the problem statement and the objective. Defined the industry type. Asked few questions on company profile.

I: Agreed to all the assumptions.

C: Followed the profitability structure - revenue and costs.

I: Focus on operational perspective.

C: Mentioned the major buckets involved in manufacturing in order: procurement of raw material, inbound logistics, loading, manufacturing/production process, testing, storage of final goods, dispatch, distribution channels. Asked if I should focus on any specific bucket.

I: Start with procurement.

C: Suggested probable issues and recommended ways to improve.

Further, identified gaps in every bucked and suggested ways of improvements.

(At every stage I linked circumstances with my work experience and mentioned how we used to handle it and suggested better ways of handling. Mentioned lean manufacturing, six sigma, 6S, Kanban, Kaizen and tools used for operational efficiency)

I: Good. Liked your suggestions. Do you have any questions for me?

C: Asked a question curiously on report released by KPMG a week ago. (I had read the report from company website and coincidently the report was from Partner’s vertical)

I: Explained challenges and gave some tips on how one should analyze segments like food and agriculture.

• Q1. Illustrate (in not more than a minute) as to why you are good at teamwork/ drive/ leadership.
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Our client is a wall paints manufacturer. They have 12% market share (by volume) and want to achieve a 20% market share over next 5 years. They want to grow organically; M&A is not an option. Advise the client.
[Please note that I stands for Interviewer and C stands for Candidate] 

(Reiterated the problem statement to ensure it is noted down correctly and started the discussion with a few clarifying questions to scope the problem)

C: Where does the company operate?

I: The company manufactures and has a sales footprint all over India.

C: How old is the company? Is Asian paints a good proxy?

I: Yes, you can assume it to be of similar size.

C: What kind of paints does the company manufacture?

I: The company manufactures different varieties of decorative wall paints for residential use.

C: How does the competitive landscape look like?

I: There are 4 main players including us with the following market shares:

A: 40%
B: 17%
C (us): 12%
D: 7%
Others: 24%

C: What are the channels of distribution?

I: We typically distribute through a network of over 25K multi-brand retailers.

C: What is are USP?

I: Quality of paints.

C: In order to grow its market share, the client can explore the following options:

1. Market penetration through improvements in product, change in price or channels of distribution

2. Expansion into new market (geography/customer segment)

3. New product development

I: This is an exhaustive list. We have the following data about the market size and respective market shares of each player in each category:

Paint segment: Premium
Market size: 20%
Market share: A 40%, B 5%, C(us) 40%, D 5-8%

Paint segment: Mid
Market size: 40%
Market share: A 40%, B 30%, C(us) 10%, D 7%

Paint segment: Economy
Market size: 40%
Market share: A 40%, B 20%, C(us) 0%, D 0%

C: From the data it is evident that top 2 players in the market, A & B are penetrated into the market for economy range of paints, and we are absent in this category.

I: Yes. There is no scope for expanding the product portfolio, but the company can penetrate into the economy segment. We have two options:

1. Plan A: Enter economy segment while retaining market share in existing segments

2. Plan B: Increase market share in premium and mid-range segment

Why don't you run some quick calculations to decipher how much expansion would be necessary?

C: In order to increase market share by going into the economy segment, the company will have to capture 20% of the market.

Alternately, it can increase market share in premium and midrange paints by 50% and 25% respectively.

I: Good. What do you think are the challenges the company will face if it goes ahead with plan A (expansion into economy)?

C: Since A & B have reasonable market share in the economy category, they have a strong hold over the distribution. We can expect the company to experience a challenge in establishing its distribution network in this category.

I: That is a good insight, distribution indeed is a challenge in the paints industry.

• Q1. Tell me something about yourself.
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• Q2. Share instances demonstrating your strengths and weaknesses.
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Your client is a non-profit organization that hires young graduates to teach in local schools is not able to meet their recruitment needs i.e., hire enough numbers. Can you help them chart out an effective strategy?
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Asked scoping questions (how established is the organization, where are we based out of, profiles & number of hires; how and where we currently hire from, expectations from hires, how long have we been facing this problem and any major increases in hiring needs etc.).

I: We are a well-known organization, 12+ years since establishment. Tied up with schools across the country, across multiple cities: both Tier 1 & Tier 2. We hire fresh undergraduate students from diverse academic backgrounds, the expectation is that they are required to teach for 2 years, a post which they will have to move on to other career prospects.

The pay is at par with their peers who work in the industry. We have a grassroots approach to hiring; we engage in physical outreach; our team has tied up with multiple campuses. There has been no major jump in hiring needs, steady increase but we have been increasingly lagging in fulfilling requirements over the last 2 years.

C: I’ll divide the recruitment funnel into 4 broad buckets: number of candidates we reach out to, number of applications we receive, number of selections made, number of final joiners. Do you want me to focus on any specific bucket?

I: These are exhaustive, let’s explore each of these factors and figure out what are possible problems and recommendations could be under each of them.

C: I’ll start with the first bucket. I’m assuming there have been no major demographics and psychographics of our target segments. Number of students made aware through.

1. Campus relations- target more universities/ change the portfolio mix based on the application to engagement ratio: determine which segments are performing better basis discipline (science, arts, engineering colleges) or city (metro, tier 1, tier 2 cities) / increase frequency of engagements

2. PR activities to improve awareness in the larger student population: such as webinars with alums, news reports etc.

I: We don’t want to target more universities, but the portfolio mix makes sense. We are also lagging on PR. We can explore the next bucket.

C: Number of applications we receive will depend on willingness of those who are aware about the join program and the ease of application.

I: Can you explore what can be done to have more people interested?

C: Given that the participants in the program will be expected to find other opportunities in the future, they’ll either work in the industry, pursue higher education or start up. So, promotional material should involve messaging catering to these three segments, leveraging the alumni network providing information and alumni who have gone on any of these paths.

1. Industries looking for candidates with this background

2. Higher education prospects

3. Access to a network for those interested in starting up.

I: Yes, messaging is a major area we’ll have to work on, are there any other factors outside these you want to explore that may affect willingness?

C: (Thinking out aloud for other factors to improve number of applications).

I: (Cue from the interviewer) I didn’t say that number of applications is the problem.

C: Can we explore the other factors like improving acceptance % among those selected: reducing those dropping off by ensuring selection happens early on: before application cycle for master’s programs/ negotiating exclusivity in acceptance of offers with the campus/ letting them know of location mapping early on, so drop offs can be covered with buffer offers early on.

A&B are two cities at 30 Kms distance from each other. An established structure player wants to see if we can build a bridge over the river reducing the distance to 7 Kms. What are the factors you'll consider while evaluating this proposal?
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Can I have more information on the type of cities, purpose of travel to these cities, both number of vehicles passing: passengers and commercial vehicles; model used: BOT?

I: 100,000 vehicles pass through the road each day, 60% passenger & 40% commercial, passenger travel mostly involves travelling to workplaces and visiting friends & family, model is Build Operate Transfer, for the first 30 years the company will receive toll revenue, post which it will be transferred to the government.

C: We’ll have to analyze this both from a financial as well as qualitative.

I: Let’s start with financials.

C: Do we have a target rate of return in mind?

I: Assume 12% hurdle rate.

C: We’ll need a fixed investment and operating costs, and we will have to project cash flow for the 30 years.

I: What are the different revenue streams?

C: Tolls, rent from petrol pump, commissions from shopping and retail establishments: restaurants, bars, advertisements billboards, signage by the government.

I: How will you price tolls?

C: We could use value-based pricing

i) using fuel costs saved from travelling 23 kms less each
way.

ii) Time value of money saved: assuming that average speed is 60 kmph, a person would save 40 minutes both ways (since most of them travel for work) and this would improve their productivity by a certain %.

So, if an average employee is billed Rs. 2000 per hour, we can calculate the costs saved due to improved productivity.

I: Fuel costs are easy to calculate, but time value of money will be difficult. Now let’s say we’ve priced toll; is there any important consideration you want to make while projecting revenue?

C: Due to reduced distance (from 30 km to 7 km), this will lead to increased economic activity, we may have to revisit our initial assumption about the number of vehicles: it could be much higher, a multiple of the current figure: 100,000.

I: True, I don’t know what that figure will be, but it'll be much higher now that they won’t behave like two different cities. That’ll be it. Do you have any questions for me?

We are a large pharmaceutical company, into innovative large molecule drugs for cancer, arthritis, nephron-disorders. Our drug can cure a certain type of breast cancer but is not patented in India. So far, we have enjoyed a monopoly, but our competitor has managed to copy the formulation in Phase 2 of trials and will launch in 3 months. What should our defense strategy be?
[Please note that I stands for Interviewer and C stands for Candidate] 

I: We don’t have much time (courtesy zoom link expiring), I just want to see your approach to the problem.

C: How is our competitor’s product priced, and does the drug differ in anyway with respect to efficacy and side effects, and how is our product sold and how is it paid for?

I: Competitor is pricing at 30% discount, the drug is exactly like ours. Sold through oncologists’ prescriptions in hospitals. It could be subsidized by the government or self-funded.

C: Since the competitor has priced this at a 30% discount, we will have to find ways to reduce switching:

1. Not altering product mix: leverage existing salesforce' existing relationship with oncologists to incentivise doctors to continue prescribing our drug: sponsoring conferences etc.

2. Value added services: We could explore adding new services such as tying up with hospitals for all round comprehensive cancer care: the disease influences multiple systems, and patients also suffer from psychological effects of the disease.

This will allow us to continue charging a premium. In the long run: we could invest into differentiate our product through innovations- improve potency, reduce frequency of use and side-effects further.

3. Do we know what our current margins are, is price reduction an option?

I: Comprehensive services with premium pricing is a good point. Reducing prices is not an option as it may lead to a price war. Anything else you’d want to add since we’re almost out of time?

C: Improve accessibility for the existing drug by obtaining insurance covers that can cover at least part of costs.

• Q1. So, I have had a brief look at your profile. Can you please take me through the motivations behind your career choices till now?
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Your client is in the hospitality industry. They have 2 landmark 5-star hotels in Chennai and Kolkata which have been there established since the last 30-40 years.

After COVID, the hotels have been operating at only 70% capacity utilization. Can you help them by creating a sustainable revenue strategy going forward? Focus on making new use cases
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Conducted CPCC, found out that 70% of the customers were from the Business segment. The drop in Business customers was more than the drop in Leisure customers.

I: Why do you think that may be?

C: Because of the whole remote working model? Travel by business travelers has decreased.

I: Precisely! Meetings are conducted over Zoom now. Given that, can you help the hotel?

C: Sure, please give me a minute to structure my thoughts. I drew a first level structure by dividing the problem into two: Boosting utilization of capacity within existing use cases & defining new use uses. Divided the first bucket further into 3 different types of customers:

Business, Tourists and Locals. The second bucket I divided further into revenue sources: Rooms, Restaurant, Spa, Gyms, Conference Hall etc.

I explored various ideas with each bucket. For example, (First Bucket) Corporate Partnerships, tying up with more tour operators, offering anniversary or birthday packages etc.

(Second Bucket) promoting staycations, opening the spa and the gym to outsiders, movie screenings or other ticketed events at the Conference Hall etc.

I: That is all valid and fine. But can you think something for the business customers specifically? Since their need to travel itself has gone down. A different kind of value proposition maybe.

C: I feel that shared capacity might result in a drop in our brand image. Since this is a luxury hotel.

I: Okay, what else?

C: I tried to explore more options but wasn't able to get to what the recruiter wanted. At each step I was letting him know what I was thinking. As soon as I repeated the point about shared capacity.

I: What exactly do you mean by shared capacity?

C: The hotel could save out on fixed costs by leasing out part of the property to a third party!

I: Correct, in terms of business customers this would mean?

C: A co-working space where the remote part of the office could work.

I: Exactly! Can you craft a value proposition for this offering? Also focus on how you will price it.

C: Did a basic STP analysis.

I: Great, and now pricing?

C: Outlined how we will arrive at value-based pricing based on the incremental change in cashflows to the corporate with which we will share capacity: We should focus on two aspects: fixed cost saved by the business & the value of the increased productivity the employees will deliver due to working in comfortable settings.

I: Sounds good. Now, Aditi can you please deliver an elevator pitch to the client about your proposed solution.

Your client is a manufacturer of Diesel Generator sets. They were pre-dominantly in the industrial space where they were #1, and they’ve recently ventured into the retail space (say for individual big houses, shopping complexes, nursing homes etc.) They are #3 in this industry with only 10% market share. They want to go to #1 in 3-5 years. Help them out.
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Conducted CPCC. Major points were that our sets were priced at Rs 2.2 L while the rest of the market was priced at Rs 2 L. This was because we had a better performance in certain aspects.

Can you please tell me how are we performing better? Which metric is this measured on?

I: Why don't you tell me how one diesel generator set can be better than the other?

C: Latest technology, brand image, longer shelf-life, per liter fuel efficiency.

I: Okay, what else?

C: The number of variants offered, safety, ease of usage & installation.

I: Okay, & what else?

C: If it makes any sound or air pollution, how the generator looks, how compact is it for a residential setting.

I: Okay, what else?

C: (Struggling at this point) Availability of service centers, time taken for the generator to start, repair & maintenance cost, if the repair parts are easily available.

I: (Smiles) Good. We can stop now. So, what should the client do?

C: Started talking about increasing revenue through a loose consumer journey approach. E.g.: Commissioning influencers (electricians) etc.

I: You won't look at the costs?

C: Of course! The consumers are not valuing our product enough to account for the difference of Rs. 20,000. We should try to come down to the Rs 2 Lakh price tag so that we can have a distinct competitive advantage in terms of quality for money.

I: Yes, that is right. Now, you have walked into a lift at Bain, and you see the client standing there. He asks you for a solution. You only have this preliminary discussion worth of information. What would you tell him?

C: (Understood that he was also asking for an elevator pitch. Summarized the case as if I was
pitching to a client)

I: Good.


We had about 3-4 minutes of discussion after this about any questions I had. The Partner then
left the zoom call.

• Q1. Tell me about yourself.
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The client is in the industrial sector and is a manufacturer of ropes and nets for the agricultural, fishing, and construction industries. It is a mid-size firm, and its growth has stagnated at 3-5% over the last few years and has margins in excess of 15%. Help the client realize its full potential.
[Please note that I stands for Interviewer and C stands for Candidate] 

I: This was an actual problem faced by one of our clients that we solved a few years ago.

C: Reiterated the problem statement and got it confirmed to ensure that I didn’t miss out on anything specified by the interviewer. Dissected the problem statement and got a few things clarified before proceeding further.

C: Before we start off, I want a little more clarity on the problem we are staring at. Could you please help me with a few points here?

1. What growth are we referring to, topline/bottom-line/others?

2. How do we define full potential? Is there any specific metric and quantum that we are looking at?

3. What is the timeline that we are looking at?

I: We are referring to stagnation of topline growth and by full potential, there’s no specific number, but we want to improve our business scale and grow rapidly in the short term, say two years.

C: So, it’s essentially the topline that we’re focusing on. I’d then like to get a little idea about the firm, the products they deal in, its customers, and the competitive scenario before I delve deeper into the analysis (basically, I asked the clarifying questions).

I: Sure, go ahead.

C: Firstly, can I get a little information about how established the firm is?

I: It’s an established firm and has been operating for quite a few years.

C: Where do they operate?

I: Pan India.

C: Does that mean that they only manufacture in India or is their market also restricted to India.

I: They serve only the Indian market currently.

C: Are they facing any issue with a specific geography within India or is it across?

I: It’s a firm level issue.

C: How many different variants/SKUs of fishing nets do they deal in?

I: They have all variants of fishing nets: size, shape etc., approximately 100 SKUs.

C: How about the customers that they cater to? Broadly I can think of two types of customers: one, the unorganized and second, the organized. Would that be right?

I: What do you mean by unorganized and organized?

C: Unorganized would be the local fishermen, while organized would be commercial fishing.

I: Yeah, so they deal with both B2C and B2B customers.

C: So, how is the competitive scenario?

I: Our client is the dominant player in the market, with a 70-80% market share.

C: Ok, how is the remaining market, are there any major players or is it fragmented?

I: There are 3-4 other players.

C: Jotted down a broad approach and checked with the interviewer for his buy-in. So, here we are looking at topline growth of fishing nets. We can break it down into two aspects, one, the market potential and second, the firm’s growth.

I: Lets come to market potential later. Before that let’s explore what can be done around the firm’s growth.

C: Sure, just one more piece of information before I dive deep. At what rate is the industry growing?

I: Around 5%.

C: Ok, and how was the firm fairing in the past?

I: It was growing at 10-15% earlier.

C: Ok. Sure, getting back to evaluating the firm’s topline growth prospects, there are again two ways to start off with: one, the organic and second, inorganic ways. Do you want me to evaluate any specific area?

I: Let's start off with organic and then come to inorganic later.

C: Ok. Under organic ways of growing, the client can focus on 2 things again, existing, and new. When I talk of existing/new, it could be both in terms of the market or product. Do you want me to look at any specific aspect?

I: Let's take some time here and quickly figure out the market potential for fishing nets in the unorganized sector that you had spoken about earlier.

C: Sure. Can I take a minute again to lay down my approach and we can then proceed with the calculations?

I: Sure.

C: Jotted down the factors I would be considering estimating the market size of fishing nets and then discussed it with the interviewer.

Firstly, I’d look at the geography: there can be coastal areas such as the seas/Indian ocean on one hand, and inland waterways on the other.

Then rural vs urban, followed by the income split, which would in-turn determine the various professions that people could be engaged in these areas (largely agriculture, fishing, labor, street vendors etc.), take a factor for the number of people involved in fishing which can be divided by the average number of people per household, to arrive at the number of households.

Then consider the number of people per household involved in fishing. Usually, from what I’ve seen around beaches in Chennai, they do not go individually for fishing. Rather, a group of 4-5 fishermen go together. So, we would have to divide the fishermen by this factor to arrive at the number of boats.

Then a factor for number of fishing nets used per boat, life of a fishing net, which would determine the replacement factor and then finally incorporate the average price of a fishing net to arrive at the market potential.

I: Sounds good. Proceed. Take simplistic assumptions and arrive at a number.

C: Was asked to consider only the coastal areas and not inland waterways. Went on to calculate the number. Arrived at the coastline length basis India’s dimensions (length and breadth of 3000 and 2500 km approx. basis some facts I had gathered beforehand). Then went down the wrong way in calculating and arrived at 14000. Quickly realized that there was something wrong with it. The interviewer also asked if it seemed right given India’s population of 140 crore. Took a step back, sought a minute and recalculated ~2 million fishermen.

I: So, let us consider whatever is the number you have arrived at: 2 million fishermen. How will you arrive at the market potential from here?

C: Specified the factors stated before.

I: Ok. So, what would you do to address the growth stagnation issue now?

C: Ok. So, broadly we can look at expanding to new markets: basically, going international. Within existing geographies, can evaluate from 4 different standpoints

a. Price

b. Product

c. Place/distribution

d. Promotion

Do you think this is a fair approach to follow?

I: Sure, go ahead.

C: From a pricing standpoint, we can evaluate the quantum by which we can reduce prices depending on the price elasticity of the product. This could help us gain significant volume without compromising on absolute profits earned, since volume could offset the reduction in price.

From a product standpoint, we can look at the type of material used, if there’s any betterquality material which could hold a better value proposition to customers, be it in terms of the life of the net for example (didn’t have much scope from a shape/size perspective, given the wide presence with about 100 SKUs).

From a distribution standpoint, [realized I had not asked the current distribution mechanism in place] if we currently reach out through distributors, we can evaluate our distributor'spresence, whether there is any geography that we are not catering to currently. We can also engage in direct selling instead of the distributor route. However, that would involve an evaluation of how it could pan out. Since the distributors could hold some influence on the unorganized sector where the buying behavior of customers is person dependent. This leads us to our last leg, promotions.In the B2C sector, there could be certain local influencers in the fishermen colonies. So, targeting them could help receive our products better. In the B2B sector, it is all about personal selling.

I: Ok. So, by doing all of this how much do you think that you can push the growth to?

C: Well, that’s a very subjective evaluation, and to attribute a number basis this would be a long shot. However, if we still want to look at a possible number, I might consider anything between 15-20%.

I: Ok. We have 3-4 minutes left. Let’s do a quick calculation here. You said that the client who holds a market share of 70% is likely to grow at 15%, while the market is growing at 5%. What would be the potential market share that it would hold after 3 years.

C: Arrived at a number in excess of 90% [helps to round numbers. I was calculating up to 5 decimals, which isn’t required. Will save a few seconds].

I: Ok. So, what do you think will happen in this scenario where the client might end up with a market share in excess of 90%?

C: Is the market regulated? If so, there could be restrictions from regulatory bodies.

I: No. The market is not regulated. What else?

C: There could be two other things that might happen. One, the competition could grow weaker and find it difficult to survive, resulting in scope for the client to acquire these players.

I: Do you think that would be possible?

C: Well, given the scenario and the projected market share, there could be concerns that might be raised by the competition commission.

I: What else?

C: The other possibility could be that the market consolidates with competitors coming together, basically merge like what Vodafone and Idea did to survive competition from Jio.

A well-established client is in the hospitality sector and basically operates hotels in South and East India. These hotels are in landmark locations, bang in the middle of the city and are about 30-40 years old. Post COVID-19, the company believes that it needs to achieve at least 35% occupancy to break even (i.e., to cover employee and operational costs). Usually, the utilization is in the range of 65-70%. Given the aftermath of COVID and associated lockdown restrictions, travel has reduced resulting in reduced utilization, especially the business segment (dominant segment) is down by 50%.

To clarify, if there are 100 rooms in total, about 70 rooms used to be occupied, 50 by business travelers and 35 rooms have to be occupied to break even.

How do we solve this problem and help bring the utilization back to pre-COVID levels?

Also, can they continue with the current business model?
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Reiterated the problem statement. A few questions before we commence the case: first, what is the timeline we are staring at, i.e., should I consider that we are in the initial phase of lockdown / otherwise?

I: You can consider a timeline where we are beginning to get out of lockdown.

C: What restrictions are in place for commercial activities?

I: Commercial activities can take place without any major restrictions.

C: The second question would be on what timelines we are looking at for implementing the solution/ideas and whether we have any financial constraint?

I: 5 years, no capex constraint.

C: Ok. Now, to start off with, I’d like to understand a few aspects of the company, its offerings, customer segments and competition.

I: Sure, go ahead!

C: So, what type of hotel are we looking at: a basic one or luxury?

I: It’s a 5-star hotel.

C: What are its offerings and revenue streams?

I: Room rent obviously is the major source of revenue, while the other broad segments are broadly classified as F&B, comprising of bar, restaurant with various cuisines, events & conference revenue.

C: What is the customer mix that we have?

I: 70% business travelers, 30% leisure (foreign travelers, i.e., from abroad).

C: How is the competitive position in the market?

I: Overall, the demand and number of rooms have increased over a period of time pre-covid, given that our hotels are in the center of the city.

C: Sure, one last question before we deep-dive into the analysis, how many hotels do we have in total, and have we faced an issue in any specific ones or across the board?

I: They run 10-12 hotels, all owned, of which 4-5 are important and in major cities. We can focus on these for now.

C: Sure, can I take say Chennai as the reference for subsequent analysis.

I: Sure.

C: Given it was an issue with scaling up topline, jotted down my broad approach by splitting it into room and ancillary revenue (the F&B / events), further split room revenue mathematically considering that it would be the major revenue stream and laid it down to the interviewer for his buy-in.

I: That’s fine. But let us first focus on the customer segments and their use cases before getting deeper into this.

C: Split it into business travelers and other individuals and then wanted to evaluate the need, availability, affordability, awareness, and contractual arrangements that they might have in this setup.

Emphasized more on the need and contractual legs, given the new normal working style post covid (basically resulting in reduced travel). Specified a few options such as:

a. Having contractual arrangements with a minimum commitment from the companies in return for more favorable offerings/services.

b. Conversion of the facilities basis the space available: split the analysis into two aspects, something inside the hotel building and the second, any open area outside the building.

Within the hotel building, we can convert the rooms and offer them for people to work out of it (co-working spaces), improve the revenue from restaurants by making it more affordable, have more variety or a new model of home-delivery of food, which ITC, Marriott started during lockdown (ancillary revenue).

Outside the building, the options would be depending on the area available, to make the hotel more attractive.

c. Leasing out certain facilities altogether.

d. Demolishing the current setup and redesigning the hotel rooms to make them more friendly in terms of pricing, so that the rooms are more attractive.

e. Another converting a few locations basis the demand into a quarantine facility, subject to the timelines we’re looking at, given this may not be a long-term fix in light of the covid scenario.

I: Ok. So, one of the things that you mentioned is what is happening, i.e., conversion of facilities into co-working spaces model where companies are moving away from having their own facility (owned/leased). How about the other individuals, whom will you target?

C: So, here firstly, we need to focus on domestic travelers too, given the restriction on international travel. Although it would be less to start off with, given the timeline we are looking at, could be a good proposition in the long term.

I: Ok. But how would you go about attracting localities to stay in hotels, say people from Chennai to stay in Chennai?

C: Well, there are two things to consider here:

a. I may be wrong here, but I believe there are certain police restrictions on localities checking in to hotels.

b. Typically in the Indian scenario customers are price sensitive, so, for localities to check in to 5-star hotels, seems a distant possibility. However, if I relate it to a personal experience, we can have rooms booked for guests attending a wedding, that would be a feasible option.

We can change the customer behavioral pattern/mindset in the long run to promote localities checking in to hotels (subject to there being no regulatory restrictions), like Kellogg’s had taken 13 years to change the breakfast pattern in Japan.

I: Ok. Now, how would you go about pricing this for the workplace model and what would be your TG?

C: TG would be tech companies as we had discussed earlier.

I: But what size would you target?

C: We can target large companies and get the rooms booked upfront for a defined period.

I: Don’t you think that will change the core of the co-working space model in itself?

C: Well, yeah. I agree. It will become more of a lease than a co-working space setup. In that case, I would target mid-size firms and startups since they might be looking to save on facility costs in the aftermath of the pandemic and go for co-working spaces on a need basis.

I: Right, so, let's wrap it up quickly. How would you price it? Let’s only discuss the approach.

C: Specified the different pricing models with cost plus providing the base price and value based the ceiling.

Went ahead with value-based pricing: essentially how do the customers gain value from the services offered. Specified the different costs that tech cos would otherwise be incurring like facility & maintenance (including operating charges such as rental, electricity), staff: admin & maintenance, internet & telephone connectivity.

The other aspect would be a convenience factor that the companies would not have to spend their efforts any more in managing the infrastructure and upgrading it.

• Q1. Tell me about yourself.
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• Q2. Why Accenture?
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• Q3. Why Consulting?
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• Q4. Tell me about yourself including your family.
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• Q5. What motivates you in life?
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• Q6. If given a choice, which domain you would be interested in working in Accenture and why?
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Guesstimate the total number of dinner sets in Lucknow.
[Please note that I stands for Interviewer and C stands for Candidate]

C: Started by stating population and segmenting them.

I: Do not worry about the numbers. Just go with the approach quickly.

C: Here are we talking about the dinner sets in shops or in homes.

I: Take your assumptions.

C: Ignoring the dinner sets in shops. I will divide the population in Lucknow in lower income, middle income, and high-income family groups with a family size of approximately four.

Additionally, assuming lower income group to have almost nil percentage, I will assign percentages of middle and high-income group families in Lucknow.

Now considering that a middle-income family have approximately 1 dinner set at home and high-income family to have approximately 2 sets, I will find out the number of dinner sets in Lucknow homes.

I: The approach is good. You correctly segmented them. Just a little thing, try not to ignore the lower income segment. Consider them even if they are in small percentage.

C: Asked questions related to her experience.

• Q1. Tell me something about yourself? Why consulting?
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How will you value a broking / wealth management firm?
[Please note that I stands for Interviewer and C stands for Candidate]

C: As a financial services firm, we will have a number of services offered.

I: Let us consider a broking firm. What business verticals can you consider?

C: Major services offered would include the following:
1. Broking services
2. Debt syndication
3. Commodities
4. Advisory - Investment banking, Portfolio services etc.

I: Good, let us consider broking firm into equities.

C: What is the geography where the broking firm is located?

I: Bombay and has clients with NSE.

C: Do we operate in stock exchange across India?

I: Let us consider clients across India, operating in NSE.

C: What is the client base that we cater to?

I: HNI + General public.

C: When we are considering valuation of a broking firm, we can evaluate the revenue and cost to determine the cash inflows.

Revenue is based on value and % of brokerage. (Value = Price of shares * Quantity of shares * Mix of shares).

I: Which parameters affect the quantity?

C: No. of customers, type of customers (for instance - HNI will trade more than general people), exchanges traded in, we can also look at the geography, penetration, competitors, and the life cycle in stock exchange (gave relevance of 2008 stock crash leading to reduction in number of people).

I: How to evaluate price over a period of time.

C: We can assign a growth rate based on the growth rate of the economy and performance of equities related to it.

I: How will you value these?

C: As these are a series of cash flows, we can take a DCF approach.

I: This is on an ongoing basis. How about if I close the business?

C: We will also consider the terminal value. It can be calculated based on tangible and intangible assets. Tangible assets could include assets of the firm (computers, office etc.) and a broking card (important and holds great value as a license). Intangible assets could include assets - customer data and relations. The team will have access to funds of customers which is valuable.

We are a steel pipe manufacturer, and we are working on a cost transformation program and wish to reduce our cost by Rs. 150 Crs.
[Please note that I stands for Interviewer and C stands for Candidate]

C: What is the time horizon within which we would like to reduce the cost?

I: 12 months.

C: What is the product that we manufacture and whom do we cater to?

I: Large steel pipe and we cater to B2B and large customers.

C: Do we deal in separate product SKUs?

I: We have different diameters and variants depending on the process. But let us have one SKU for now.

C: What would be the location?

I: Hanjar port. We can import raw material from China and export it to the neighboring countries.

C: Would it be safe to assume that our customers are international?

I: Yes.

C: Given we are looking at reducing costs, what would our total current cost be?

I: Rs.6000 Cr. What are the various costs that I can incur?

C: Raw Material (RM), production, distribution, marketing, and support.

I: RM is my major cost, and it accounts for 60% of the overall cost.

C: RM will include purchase cost and inbound transmission.

I: Let us consider purchase cost.

C: Purchase cost = Price / tonne * Quantity

I: What parameters would affect the price?

C: The country from where we purchase - China, South Africa, Indonesia etc. It is a commodity and, thus, prices would fluctuate. We can consider domestic purchase as well. Quality, grade of the RM can also be considered. Concept of EOQ i.e., ordering cost v/s storage cost tradeoff.

I: Good, let us assume we have an order of 100 tonnes, and efficiency is 95%, so we will roughly order 105 tonnes. We have 2 options, order 105 in one go or in 2 parts, what would you recommend and why?

C: As melting steel is costly; it would be better to do so in one go. How much of it would be needed in the start?

I: Let us say 80% is needed in the start.

C: Then it is advisable to order in one go as it will help to reduce storage and transport cost and help to get a bulk discount.

I: Why would I consider ordering 20% in the start?

C: Maybe if it is a new supplier and we are not sure of the quality or the manufacture process with our infrastructure.

I: What if I have options to order, 3/4/5 times.

C: We will consider the EOQ concept and evaluate it independently based on requirement.

I: We can also consider the confidence we have on supplier to build a relationship.

C: Yes.

I: Let us do a quick calculation. If I am able to save 2% of the RM cost, what would the amount be and how am I able to justify the same with my target?

C: Total cost is 6000 cr. RM is 60%, i.e., 3600 Crs and 2% of the same is 72 Crs. Our target is 150 Crs and, thus, we will not be able to achieve it.

• Q1. As you know, McKinsey is increasingly focusing on inclusivity. Can you narrate an incident from your life where you, as a woman, had to deal with multiple stake...read more
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The client is a large two-wheeler manufacturer in India. The growth for the last 3 years has been flat, ~0-1%, while the market has been growing at 5%. How can they grow at a rate faster than the market growth rate?
[Please note that I stands for Interviewer and C stands for Candidate]

C: Just to reiterate the problem statement, our client is a large two-wheeler manufacturer growing at ~0-1%. The client wants to grow at a rate greater than the market growth rate which is 5%. So, I have to devise a growth strategy for the client. Is that correct?

I: Yes, sounds good.

C: I would like to begin with understanding the problem statement further. Could you tell me about any other geographies that the client caters to, what the value chain coverage looks like and the number and location of plants that the client has?

I: The client operates only in India and has 4 plants across the nation. They manufacture as well as sell the two-wheelers.

C: Thank you. Next, I would like to know about the revenue streams. Is the sale of two wheelers the only source of revenue? Are there different types of two-wheelers?

I: Yes, there are 3 types of two wheelers - scooters, motorcycles with less than 125 cc engine and motorcycles with greater than 125 cc engine.

C: Great, could you help me with the market growth rate of these separate segments? I would also like to know the revenue split of the client.

I: Scooter sales are growing at 28%, <125cc motorcycle growth is negligible and >125cc motorcycle growth rate is 10%. For the client, the revenue split is 25%, 70% and 5%, respectively.

C: Interesting! This is definitely an aspect we should look at while devising the growth strategy. Before that, I would like to understand the distribution channels and the level of market fragmentation.

I: The client has a large dealership channel of 1500 dealers and the market is consolidated. The client is the market leader with 3 other players having similar market share.

C: Thank you. There are 3 broad strategies we can consider here. First, I would like to focus on the existing market and offerings, and the possibility of changing the product mix and promotion tactics. Next, we can look at entering new geographies within and outside India. Lastly, we can diversify and introduce new products altogether.

I: Let us start with the first. Can you elaborate what you mean by the product mix?

C: Maximum revenue for the client comes from motorcycles with <125cc engine, for which the market growth is negligible. I would therefore suggest promoting the existing stock of products aggressively and changing the product mix to push the sales of scooters since that segment is growing at the highest rate of 28%.

I: How would you suggest promoting the sales? (Here I focused on the customer touch-point approach to suggest methods for both scooters and piled up stock, and emphasized the importance of dealership experience and incentives.)

C: Good. Let us say we come up with a new scooter for women. Can you suggest ways to leverage digital and analytics to improve the customer experience at a dealership store? I laid down the customer journey to suggest methods to digitize in-store as well as test drive experience and leverage the data collected to enhance products and services.