BCG Consultant Interview Questions, Process, and Tips

Q1. Tell me about yourself.
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The client is a hotel company, setting up a new hotel in a metro town. Estimate the number of water bottles consumed in the hotel in a month. (Pre-COVID-19)
[Please note that I stands for Interviewer and C stands for Candidate]

C: What kind of hotel is it and how many rooms are we looking at. What is the size of the bottle we are talking about and does the hotel also have halls given for corporate and other events?

I: It is a 100-room hotel, mostly for business use. Looking at 500ml bottles and yes, the hotel has halls rented out for events.

C: I would like to estimate room demand, restaurant demand and corporate event demand separately.

For rooms = No of rooms*Occupancy rate per day*No of days (30)*People per room*bottles per person per day.

For restaurants = Operation hours of restaurant*no of tables*seating capacity per table*occupancy of tables by the various operational hours*No of bottles per person (also accounted for avg time spent per person per table).

The business center/ hall part will be fairly similar to the restaurant part. So, I would focus on factors which would affect the booking of these corporate halls. Some of the factors were location of the hotel (if closer to a business park or the airport), the package offered by the hotel, the service provided and the reputation, seasonality (for instance year ends would have more bookings).

You have been hired by a textile firm to create a post COVID-19 recovery road map to improve their margins. Help them out.
[Please note that I stands for Interviewer and C stands for Candidate]

C: I would like to start by understanding about the client’s textile business, their location of operations. What margins they are looking at and how the same have been in the past. By when they want to achieve this target and if there is any budgetary constraint. Also, I want to understand about the industry and the present competition.

I: In the textile industry there are 4 major steps:

a. Getting the fiber, cotton, or polyester.
b. Spinning fiber into yarn.
c. Weaving or Knitting.
d. Garment Manufacturing.

The client is in the 2nd step. They have 1000+ SKU's with plants in Europe, South East Asia, and India. They ship to 60 countries globally. They were looking at a 7-8% EBIDTA margin by 2021 or asap and no such budgetary constraints. The industry is extremely competitive with a lot of players.

C: Since we want to improve our earnings, I want to focus both on how we can increase our revenue and reduce our costs. Is there any particular bucket I should start with?

I: You can start with revenues.

C: I want to understand how the quantity of production has changed from pre Covid-19 to post Covid-19 and if we were able to sell our produce.

I: Initially the quantity had dropped but now it has been restored to pre Covid-19 levels. We are operating at full capacity now so a lot cannot be done on this front.

C: I want to understand about the pricing and how it fared against competitors.

I: Because of a lot of competition there was a lot of undercutting and the client had to reduce prices to sell.

C: I would look at some methods to improve our revenues. For instance, out of the 1000+ SKU got to know all do not sell well, so the focus can be on the ones that do sell well. For some SKU’s, the client was known well in the market and had an advantage over competitors so it could establish itself more in those areas. It could also enter long term contracts with the weavers so that price-cutting would not be required to be able to sell.

(The interviewer was very satisfied and stopped me midway. Asked to focus on the next bucket.)

The major cost buckets starting from raw materials, inbound logistics, plant related costs (labor, machinery, utility etc.) outbound logistics and any storage costs.

I: Due to paucity of time, choose any 2 buckets myself and analyze them further.

C: I would like to choose transportation and plant because I feel after Covid-19 this was an area which could be focused on first.

(I Suggested methods on labor management, analyzed the wage structure as well. Also spoke about ensuring that while transportation the most optimal routes were chosen in terms of time and costs. Was more of a discussion with the interviewer.)

Q1. Introduce yourself.
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Q2. General conversation on my undergrad subject.
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A family has lost a member to Covid-19. They are suing the hospital where the patient was admitted on the grounds of malpractice. Two questions:

(i) From the point of view of the hospital management, how much should they pay as lawsuit amount in this case?

(ii) (Would it be better for the hospital to improve their processes instead of risking being sued repeatedly? Give me a cost-benefit analysis.
[Please note that I stands for Interviewer and C stands for Candidate] 

C: (Repeated case statement & clarified basic case facts like type of hospital, type of patient etc.)

I: Consider it a premium private hospital situated in Delhi. Patient was a 50-year-old male who was the head of the family.

C: I wanted to understand what all we are covering in lawsuit amount while doing a cost benefit analysis. Should I account for costs like lawyer fees, logistical costs, settlement amount, loss of brand value etc.?

I: Good points but consider that the lawyer fee and logistical costs are negligible, assume we have an efficient judicial system, so we are expecting a quick settlement. Moreover, brand value is something we are not currently concerned with since covid is a national emergency and there is plenty of demand.

This may be a somewhat morbid scenario, but I only want you to look at what would be fair compensation for the life loss, i.e., the settlement amount.

C: (Asked for some time to think)

Although a person’s life would be invaluable, I can think of two ways of assigning a cost to life. First is the direct monetary cost of life (in terms of the person’s income and assets that will now be lost for the family), and second is the value of the time the deceased individual would have spent with the family. May I proceed with this approach?

I: Sure, go ahead.

C: So, the direct monetary value lost is relatively easy to measure. We can calculate it as:

(Average Annual Income) x (No. of working years left)

Within this we can also account for annual income growth rate, and any other investments / indirect income sources that may now cease to exist.

I: Makes sense. Consider that the retirement age is 62 years, and the net income is 1.5 Lakh per month.

C: Okay, that gives me the remaining 12 years of earning lost.

1.5 L x 12 months x 12 years ≈ Rs. 2.2 Cr of direct monetary impact on the family.

(Realized I did not account for medical expenses) Should I also account for the hospital fee and medical expenses that went into the treatment of the individual?

I: No, that will have a negligible impact. Can you tell me how you will value the time that the family has lost with their loved one?

C: (Asked for some time to delve further)

Objectively, I can break down the time spent into smaller activities and value their replacement costs. For example, I can break down the daily activities that the person used to do like household chores, driving around the family, taking family members for outings, buying things for the family, contributing to the children’s education and so on. These respective activities will have to be replaced by alternatives (like house help for chores, tutors for education, drivers for driving etc.) or will have to be borne by another family member.

It would be simple to calculate these replacement costs. May I proceed with this approach to value the time lost with the family member?

I: Fair enough, I like the thought process. Assume that you know each of these replacement costs, how will you arrive at the final figure?

C: Considering that the person would have lived to the full life expectancy age if the mishap had not happened, I could break down the cost as follows:

(Years left to live) x (Number of family members) x (Annual replacement cost per member)

While determining the replacement costs, we can also account for the ages/stage of life of the family members, i.e., if the father has died while his children are very young, replacement costs will be relatively higher. Should I delve into the calculations?

I: Sure, consider 3 other family members and annual replacement cost of 5 Lakhs per member.

C: (Performed calculation)

Year left to live = 70: 50 = 20 years (life expectancy in India = 70 years)

Value of time lost = (20 years) x (3 family members) x (5 lakhs p.a. replacement cost) = 3 Crores

So, we arrive at the total settlement amount = direct monetary loss of family + replacement costs

= 2.2 Cr + 3 Cr

= 5.2 Cr

I: Fair enough. Now quickly tell me if it would be better for the hospital to improve their processes instead of risking being sued again.

C: I think we can answer that by comparing the cost of process improvement to the annual cost of lawsuits.

I: How would you do that?

C: For the cost analysis, I would break down the net annual cost for lawsuits such as:

(Annual Volume of Lawsuits) x (Settlement Cost per lawsuit)

Further, I will break down the Annual Volume of Lawsuits as:

(Average number of Covid Patients admitted per day) x (365 days)) x (% of patient deaths) x (% of patient families filing a lawsuit).

I: Alright, consider that we admit 100 Covid patients on the daily, out of which patient deaths are 1%. Out of these deaths, 10% of the families file a lawsuit against us for malpractice.

C: (performed the calculation: 100 x 365 x 0.01 x 0.1)

As per this data, we will have nearly 37 lawsuits to deal with every year. Moreover, settlement amount for each lawsuit can be benchmarked to around 5.2 crores, as calculated. Therefore:

Annual Cost for Lawsuits = 37 x 5.2 ≈ 190 Crores

So, if the process improvement costs are less than 190 Crores, we should go with that.

Otherwise, it is cheaper to pay for lawsuits.

Q1. Introduce yourself (Was also asked about my academic achievements).
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Our client is a manufacturer of glass bottles in Germany. These bottles are used to keep juice. The client has seen a sudden rise in the demand for these bottles. The client has 3 options

1. Expand capacity by setting up another manufacturing plant in Germany

2. Source these bottles from Indian manufacturers

3. Source these bottles from Vietnamese manufacturers
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Are there any constraints in terms of budget or time?

I: The client wants the capital efficient option as soon as possible.

C: Can you tell me more about these bottles? Are all of these of a similar size?

I: Yes, there's only one kind of bottle.

C: We should evaluate all the 3 options one by one and see which one seems to be the best one. For setting up our own unit, we can see the budget and time considerations.

For India and Vietnam, we can compare both by firstly evaluating the macro-economic environment, then by evaluating the industry in both countries, and then we can do a cost-benefit analysis.

I: I don't want you to give me a framework, rather just focus on a few factors that you'd like to evaluate. Like you mentioned, budget can be one factor, what else can be there?

C: We can have a few factors like:

1. Time- setting up our own unit will take more time

2. Budget- own unit will require huge capital investment

3. Rules and Regulations

4. Taxes and tariffs

5. Supply chain efficiency- We can consider the Economic Order quantity, Re-order Level, Danger level, lead time in this. Since getting the bottles from Vietnam or India might require us to evaluate all these things thoroughly, otherwise we might not have the bottles when needed.

6. Social Factors- whether the people are comfortable buying bottles which are manufactured in some other country

7. Quality of bottles

8. Environmental concerns if we set up our own unit

I: That was quite comprehensive. Now suppose we have decided to go ahead with India even though the bottles over there are 5% more expensive than Vietnam. Why do you think we might have taken this decision?

C: That might have been because of the few possible reasons listed earlier.

I was not able to think of anything apart from foreign exchange rate fluctuation, but thought it is already covered in the 5% more expensive part.

Tell me a little about your life journey.

How has your IIM Lucknow journey been till now?

Why Consulting?

Asked to explain the work I did at Deloitte.

Case- The client is the ministry of Logistics of India. Develop a cost optimization strategy for the Indian logistics.
[Please note that I stands for Interviewer and C stands for Candidate]

C- Started with clarifying questions- Why cost optimization is required? Do we have any constraints in terms of time and resources? Are we looking at both domestic or international logistics? (Asked one by one)

I- India is spending a large percentage of its GDP on logistics if compared to US. Thus, we need to find a way to reduce costs. We can look at both short term and long-term ways. No constraints in terms of budget. Look at only domestic logistics.

C- (After taking around 30 seconds) I told her about my structure -logistics consisted of two main components (Transportation and Warehousing) I would look at each of them separately.

Under transportation. I would first divide it into modes of transportation and separately look at each of the modes. Under warehousing again i would look at the current process that is being followed. Under each of them I would try to identify the issues and from that I would develop a cost optimization strategy.

I- She told me that in India the most frequent mode of transport used was railways and buses whereas US used waterways. She asked me to identify the reason for the same. Also, she told me to concentrate on land as a mode of transport and take the case of a cement industry.

C- For the difference between US and India - I spoke about connectivity, the difference in the geographical area, time, and cost. Taking land as a mode of transport I drew a value chain of the inbound and outbound logistics for a cement factory.

I started analyzing each aspect of the value chain and identifying the problems. I spoke about the time, cost, wastage, the condition of the transport system and the efficiency of the labor etc. The interviewer helped me with the required information from time to time. I identified that in land transport - even though railways were cheaper the factories were using trucks to transport their raw materials and finished goods because of time. I suggested we could use a mix of both trucks and railways to achieve an optimum in terms of cost and time.

Discussed a few more problems and solutions at each step of the value chain. Then she suddenly stopped the case.

Which committee are you a part of?

Which Industry are you efficiency comfortable with?
[Please note that I stands for Interviewer and C stands for Candidate]

C- Sir, pharmaceuticals.

I- Then of course I am not giving you a case related to that.

Case- The client is a school conglomerate. It was growing at a good rate till a few years back but suddenly it has no money left. Help me identify the following.

a, Why is the conglomerate in this condition?

b, Where did the money go?

c, Help design a growth strategy for the conglomerate.
Started with clarifying questions. What does the conglomerate comprise of?(schools, smart classes, tuition centers, and stationery and uniform business) How long it has been operating? Where is it located? Whom does it cater to? About the competition it is facing. (Interviewer told me that he would tell me about the competitors once I had answered the first two questions)

Then I told him, there could be an issue with the revenue, cost, or both. I spoke about how we can improve on revenues through current operations or by finding an alternative (Like renting out the school space in after hours) He agreed and then asked me to focus on the cost side. He had assumed that I had studied MANAC in term 1 and wanted me to use those concepts.

When I clarified that I hadn't studied MANAC, yet he asked me to draw a cash flow statement. I started identifying the operating, investing, and financing expenses and income for the conglomerate.

He suddenly stopped me and asked me to draw a cashflow statement for the conglomerate in case it was planning to set up a new school. I spoke of the basic costs and income that I could identify under each of the cashflow heads at that moment.

Additionally, I told that if the school is set up in a rural area where there are no government schools, we can ask the govt to fund us since we are helping in right to education.

I also said that if the school is planning to use rainwater harvesting (my school had planned to do so - I suddenly remembered) or solar energy then it would incur additional investment costs. He said good and ended the case.

After going to the waiting room, I was called out by an interviewer and we started to go to CR 207. In the meanwhile, I asked her about her background to have an informal chat. I asked her about her practice area and related my interest in BCG because of that particular practice area.

Tell me about yourself.
Good Morning! I am Dhanushmanth. I come from an industrial town in Telangana known as Palvancha. Its specialty is that apart from being an industrial hub hosting industries of steel, thermal energy, and heavy water, it also is close to the place where according to mythologies, Lor Ram has spent his exile. This had a profound impact on me in that I was fascinated as to how so many small units come together to make the universe work.

Thus, it invigorated both scientific and philosophical sense in me. My parents were teachers in Mathematics and Physics. It is because of them that I have developed a passion for science and problem-solving.

[Please note that I stands for Interviewer and C stands for Candidate]

C- At this point, I was kind of asked why I was interested in Consulting.

I broadly answered it by saying that it is due to my interest in the field of energy, education, and health and consulting would be the only Geld that would allow me to work hands-on in that regard,. I also mentioned that I took an MBA instead of a Ph.D. opportunity, I had abroad because I want to help industries grow and solutions are implemented rather than leaving the critical implementation to someone else.

Case- Calculate annual revenue of BCG in India.
[Please note that I stands for Interviewer and C stands for Candidate]

C- To understand the objective, we would like to estimate the annual revenue of BCG in India.

May I know the sources of Revenue BCG has? Like anything other than cases such as publications or any other.

I- : Only cases.

C- Then, the best way is to estimate the total number of cases we solve in a year and multiply them with the respective prices at which we undertake them. But looking at each case is difficult. Is there any commonality among the cases such as an average price or any other classification through which we can simplify our calculation?

I- Actually, we charge our cases based on the teams involved.

C- Can you please elaborate on this?

I- Each team will have 3 Associate consultants; 1 Project Leader and a partner looks after 3-4 cases at a time. And we have 700 Associate Consultants, 200 Project Leaders and 100 Partners in BCG India. (These are rough figures. I cannot recollect the exact figures, but it was like the total number of teams formed considering the Associate Consultants> the number of teams that can be served by Project Leaders and Partners.)

C- Here, I asked about the duration of each project.

I- It can range from 3 months-1 year.

C- Our focus must now be to estimate how many cases in each category we can solve in a year since we already know the prices. (At this point, I was puzzled as to how to do this since all cases need not begin at the same time in a year and hence, I was not sure as to how I could calculate the sure.)

I- To make things simpler, calculate the profits instead of revenue.

C- Okay, for that we need to calculate the costs as well. Can you kindly tell me what are the various factors of the cost we have?

I- The interviewer went on to mention that apart from the personnel, we have some backend support team providing us with all the relevant information.

C- Here, I tried to apportion these costs to the case. I was struggling.

I- Okay, let us end the case here. Let me have a look at your structure.

I- What is the reason for your interest in BCG?

C- During my entire internship process, BCG was the only rm that has put efforts to make the candidates comfortable and spent time to help them, know them better and provide guidance. This makes me believe in the people-centric the approach of BCG. Apart from that, your focus on Government projects and Social Impact vertical is another reason behind my interest.

I- Do you have any questions?

C- I asked her about the practice area she works in especially the kind of projects she worked on and the challenges she faced during that.

This time I was accompanied by another interviewee.

Tell me about yourself.

Let us do a case.
[Please note that I stands for Interviewer and C stands for Candidate]

I- I want you to calculate the total number of golf balls in the air, in the world, right now.

C- : (I took a moment to understand what he asked). So, the objective is to estimate how many golf balls out of the total golf balls in the world are in air right now, right?

C- That's interesting. For this purpose, we would first need to understand where all there is a possibility of golf to be played and then we can estimate how many are there in the air. (In retrospect, maybe I should also have included golf balls being transported over the air.)

C- Golf can be played as part of a professional tournament, as practice for a professional tournament, as part of clubs where wealthy people
take part. Is there any other place where Golf could be played?

I- No, you covered everything.

C- Then, we will have to understand how many people can play at a time in the fields used for each of these purposes. This is because this will lead us to make an estimation of how many balls can be hit at a time and from there, we can try to use some common figure to denote the time taken by each ball between its take-off and landing.

(I drew this on the piece of paper he gave me.) Thereafter, he asked me some questions on my approach which I can't remember precisely. Mostly, it was on how I would estimate based on the data I asked for.

I- Okay, I understood your approach. You can wait in the waiting room. Do you have any questions for me?

C- I asked him about the practice area he was working in. Since he was working on a project in Hyderabad and as I too am from that place, I asked him some more questions based on that.

Q1. Why BCG?
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Q1. Guesstimate: Number of Ola and Uber cabs in Delhi.
Ans. 
Guesstimate the number of Ola and Uber cabs in Delhi.
• Estimate the total number of cabs in Delhi

• Determine the market share of Ola and Uber

• Calculate the number of Ola and Uber cabs based on their market share

• Consider factors like peak hours, off-peak hours, and demand-supply ratio

• Use data from Ola and Uber's official reports, surveys, and industry research
Answered by AI
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Your client is a cement manufacturer, and they are targeting 10% growth but currently they are facing declining profits. Identify the problems and recommend some changes.
[Please note that I stands for Interviewer and C stands for Candidate] 

C: Repeated the case and started with basic CPCC.

Where is the client located? What kind of growth are they targeting (Revenue/Profit)? How many products do they have and what is their revenue share?

I: Client operates in India and is targeting revenue growth. They have 2 products and decline is across both.

C: Do you want me to identify why profits are declining first or suggest how to grow revenue?

I: Let’s start with growth.

C: Made the Ansoff Matrix and recommended some ideas across all the segments:

1. Exclusive contracts with suppliers, discounts for customers, targeting B2B segment

2. New variety of cements- fast drying, cement cubes

Diversification- Entering logistics industry since the client already has a strong distribution network.

I: Let’s see why profits are declining now.

C: Started with basic framework and identified that costs were increasing.

I: Identify all the areas where costs could go up and what could be the causes.

C: Laid down the value chain and under each head mentioned the problems that client could be facing.