McKinsey & Company Consultant Interview Questions, Process, and Tips

• Q1. Tell me about your prior work experience.
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• Q2. Challenges faced in JPM.
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You have been approached by the CEO of a gym chain, currently having 5-6 outlets in India.

Due to COVID, they are experiencing lower footfall, with their revenues falling. You have been hired to help the company adapt to the new normal.
[Please note that I stands for Interviewer and C stands for Candidate] 

[The flow was conversational. It started with calculating revenue numbers, explored various streams of revenue and potential areas of improvement. Concluded the case with recommendations for increased subscription and retention]

C: Started with asking questions about the location of the gym, capacity, target customer segment (Low, medium or high-income brackets)

I: Location: Metro cities; capacity: 50 people; Income bracket: Medium to high.

C: What are the services currently provided by them apart from gym equipment and professional trainer? Do they have planned alternate sessions on say, Yoga or Zumba as well?

I: No, just traditional gym facilities.

C: Since we are considering the covid era, were there any restrictions imposed by the state/central government?

I: Yes, strict regulations on sanitization, temperature check and 50% capacity utilization were imposed. All of which has been duly obliged by the chain.

C: What was the fall in revenue and was the decline evident before Covid or sudden due to Covid restrictions?

I: The decline was sudden. Let me provide you with some case facts to better evaluate the situation. Current revenue: 10,000 per customer per month, average capacity utilization pre covid 80% and post covid 10%.

C: Based on the data, pre-covid revenue: 10,000*12*50*0.8*5 = Rs 24 crore across 5 outlets.

Post-covid: 10,000*12*50*0.1*5 = Rs 30 lakhs i.e., 85-90% fall in revenue.

For our analysis, should we also consider the cost aspect as some of the trainers may not be full time employees or were laid-off due to low footfall at the gym?

I: Assume all trainer to be full-time employees and no lay-off as it was against the company policy. We can focus only on the revenue aspect for now.

C: Since they have a traditional setup, can we explore potential avenues for revenue generation?

Gym has 2 targets currently, to acquire new customers and retain existing ones.

Recommendations to address both are:

• Starting transport facility: pickup and drop facility from home to gym

• Invite celebrity star to the gym and use social media handles to promote assurance and safety in opting for their services

• Personal reminder and motivation calls from trainers

• Develop online platform like Cult fitness and offer services like Yoga, Zumba and Mindful meditation sessions

• In-house restaurant: providing healthy food alternatives

• Q1. Tell me about yourself.
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• Q2. Why McKinsey?
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Case 1: Guesstimate the amount of cash withdrawn from an ATM in a day in BITS' Pilani campus.
[Please note that I stands for Interviewer and C stands for Candidate] 

[The original case was to estimate the money withdrawn from an ATM in a day at IIM-L but was changed since I had never been to campus. A few facts to be known about Pilani before we start: The population of Pilani is very low, and a huge chunk of the town’s population is students of BITS. There is only 1 ATM on campus (ICICI Bank): This question was asked to I in his interview at IIM-C]

C: Great! Wanted to clarify a few things: Are we speaking about a Covid scenario? Also, since BITS is a college campus, I wanted to understand whether we are speaking about any particular time period: vacations/ or should we consider it to be a time period during the semester?

I: Let’s take a pre-Covid scenario and you can consider that all students are on campus.

C: Great! I’d also like to know whether I should consider a normal day: i.e., no festival/ college event etc.? and whether we are looking at a weekday or a weekend as trends might be slightly different.

I: Consider a normal day on campus, and if there are any other factors you would like to scope, feel free to make assumptions and state them.

C: Awesome. There are two ways to approach this problem: First, we can look at the traffic at the ATM, and try to guesstimate the daily volume by analyzing the number of transactions and their ticket size.

I’d like to take a second approach though, i.e., estimate the total cash spent on campus/ by the campus population in a month. I’d then try to figure out how much of that cash is withdrawn from the ATM on campus and get a daily value by dividing by the no. of days in a month. Does that seem like a fair approach?

I: Sounds good. Let’s proceed.

C: There are two sets of people who would withdraw money from the ATM.

Those residing on campus and those residing outside campus.

Those residing on campus would be students, faculty and support staff, and restaurant and shop owners who transact heavily in cash. Those from outside campus, would be residents of Pilani who would come to withdraw cash from the ATM because there is no other ICICI ATM in the town.

There would also be speakers/ guests visiting the campus, and a small set of other people. For the sake of this discussion, I wouldn’t consider the last 2 cohorts of people as their relative size would be very small.

Does this breakdown seem fair and is there a particular cohort you would like me to analyse first?

I: Fair. Let’s proceed: choose any cohort you would like to analyze further.

C: Sure, let me start with students. I would break them down year-wise and also break them on the basis of low and high spending capacity. I would factor in whether someone’s family had to take a loan to fund the education as a proxy for whether someone would have a low or high spending capacity.

1st, 2nd and 3rd year students would have a certain spending habit. I would estimate this at a low and high level. 4th year students (since they have savings from a 6-month internship) and master’s students would have higher spending patterns, so I would take in different multiplier factors over the base numbers to estimate their spends.

I: Sounds good.

C: I would now break down the spends into major buckets: Food, travel, utilities, stationery & merchandise, alcohol & cigarettes, and luxury spends/ indulgences.

[Broke down the values: also mentioned that most students budget their expenditure, so the individual breakdown didn’t matter as much as the total value.

Used my personal budget and spending patterns as a benchmark. Used a friend’s spending patterns as a benchmark for the other spending capacity cohort]

C: There is one major difference now though, from when this question was asked to you during your interview. BITS has an ID card system, where a lot of Food, travel, and merchandise spends are loaded onto the ID card and paid at the end of the semester, thus
requiring no cash.

Furthermore, a lot of tuck shops also use Paytm/UPI. So, I would factor in cash transactions as a percentage of total spend for each of the buckets.

[Broke down numbers: Gave a rough figure for students]

Case 2: Chelsea Football Club is entering the Indian market: list down the possible revenue streams and then analyze some nuances it must consider while making an entry (Market Entry + Growth Strategy Case)
[Please note that I stands for Interviewer and C stands for Candidate] 

C: I want to confirm whether we are speaking of CFC as a brand, or as a football team trying to enter India over here.

I: We want to analyze revenue streams for CFC as a brand.

C: Sure. CFC already exists in India, should I assume a hypothetical situation where the brand has not yet entered the market, or should I try to drive growth for the current operations.

I also want to understand the objective are we looking at profit/ revenue maximization or are we looking to use this entry to increase our fan base. I’d also like to understand timelines and constraints.

I: You can consider a hypothetical situation, though let’s try to first list down all possible revenue streams. The objective is profit maximization and let’s not think about timelines and constraints at the moment. If there are any more questions, feel free to make assumptions and state them.

C: Sure. I would break down the revenue streams into two parts: Those coming from core football operations and those coming from other operations. Non-football operations would majorly be:

1. Merchandise (jerseys, bobbleheads, signed memorabilia, partnerships with other brands etc.)

2. Events (trophy tours, meet the legends, fan meet-ups etc.)

3. Fan Clubs

4. Infrastructure (e.g., The Chelsea Pub: sports bars for screening/ fan meets etc.)

5. Sell Exclusivity (e.g., pay for featuring on our social media handle, paid subscription on the Chelsea 5th stand app to get exclusive benefits)

6. Partnerships would be an overlapping bucket, and we could boost revenue streams by partnering with other brands.

Football led operations would be:

1. Host tournaments

2. Partner with a local club

3. Training players: Coaching/ Chelsea Academy

4. Training coaches: Certification courses etc.

[The idea generation process was conversational in nature: I laid down my L2 and L3 structures and we discussed a bit on the points that I found interesting/ wanted to probe on as I proceeded. We had a fair bit of discussion on selling exclusivity. I mentioned that I had featured on the club’s official page for free, because I had a friend handling their social media account, but I would gladly pay a bit for the same. I also, constantly benchmarked v/s Arsenal and Manchester United, both of whom had a good brand presence in India].

I: Sounds good. Now assume that the club is entering the market. What are a few things you think your client should consider before entering?

C: [Scoped a bit on what the I exactly wanted: He was looking at whether I could identify nuances in the business, especially specific to football]. Great: so, I think since Chelsea is a European club it should consider the following:

1. When entering the football operations, the positioning and brand image considerations should be clear. Would the coaches be European?

If yes, how do we handle the country change process from an HR and cost perspective. If not, how do we maintain Chelsea’s brand image if Indians will be coaching students under the CFC brand. What would certification criteria be? Are we looking at a direct strategy or a franchise model?

2. The mindset of European consumers and Indians is very different. Pricing merchandise in India would be challenging, and we would have to know whether we are targeting volume or margins.

Indians have a variety of good options in the black market. I’ve been a Chelsea fan myself and have more than 10 jerseys spanning over a decade but only 2 of them are original. The counterfeits are of great quality and range between 5%-25% of the cost of an original.

3. While we are looking at revenue streams, I would also like to analyze long term customer LTV. New fans would mean increased broadcasting revenue shares and we should factor this into feasibility calculations.

It started with the basic introduction and the interviewer gave me a mini case.

Uber wants to launch chopper service in Mumbai, should they do it and if yes, what should be the pricing strategy?

(20 minutes)
I confirmed the case by iterating the case back. I asked some preliminary questions such as if they are the first one to launch such a service, what is the range of their service. I listed the potential market barriers and clarified the operating model (Company owned chopper or leased one).

I asked him about the initial pricing to ascertain if this business would be economically viable and he provided me a figure.

Identifying the expenditure from this transport mode helped me in identifying the earnings of such customers. I concluded that consumers in that earning band would rather prefer having their own chopper and might not want to have an uber service.

A firm with retail store chain (with basically 2 set of products) wanted to increase their forecast accuracy.

(30 minutes)
They initially asked me about the causes of poor accuracy and then they provided me a list of 5 different technology providers for accuracy improvement. They had the initial investment, promised forecast accuracy, yearly charge and some more data. I was asked to recommend the best out of them.

I asked them what is the payback period the client is looking for.

I compared the expected increase in revenue due to the improved forecast and the cost of investment to identify the best solution. The process included some number crunching, so I made sure how I arrive to a particular figure by breaking them into smaller pieces and keeping them informed about each calculation.

This round tested me on my analytical, decision making, and communication skills.

• Q1. This round started with my introduction and the interviewee asked me questions from my CV mostly from my work in TSL. He deep dived into many of my CV points to...read more
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• 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. 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. 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.

• Q1. Pitch for 30 seconds as to why you are good at teamwork/drive/leadership.
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Paint manufacturer has 12% market share and wants to achieve 20% market share over next 5 years. M&A is not an option. Help the client.
[Please note that I stands for Interviewer and C stands for Candidate]

C: What kind of paints does the company manufacture?

I: Paints that go on walls.

C: Is it an established company? Can I imagine something like Asian Paints?

I: Yes, it is an established player. Asian Paints is a good comparable.

C: What are the different products/SKUs that the company offers?

I: There are a lot of variants in the premium, mid, and economy segments.

C: Who are the customers of these products? Are they based in India?

I: Yes, all our customers are based in India. 80% of the supply is to people like you and me and 20% is B2B.

C: What is the competition landscape like?

I: There are a lot of competitors, it is a fragmented market.

C: What is the objective of increasing the market share?

I: The company has hired a new CEO; he is working on growth of the company.

C: Okay, since the company wants to increase the market share to 20% in next 5 years, it should try to grow either organically or inorganically. For organic growth, it may enter new markets or launch new products for the existing ones. For inorganic growth since M&A is out of option, we can look for joint ventures with other players to build a brand in new markets or we can have franchises and retain the control.

I: Let us just focus on organic growth for now. There is not much scope to increase the portfolio of products that the company has. But we have seen that most of the sales come from premium products followed by mid category and we do not have any market share in the economy class products. We have two proposals. First is to increase premium sales as much as possible, focus a lot more on mid and mostly stay away from economy. Second is to enter the economy segment while retaining or increasing shares in the other two segments. Why don’t you run some calculations to see which one would be better?

(Gave numbers for market demand across all segments and market share of the company in each segment. Discussed the numbers with before reaching a solution.)

C: On the basis of these numbers, second option will be better. Since the company will enter a new segment it will be beneficial for the long-term growth as well.

I: But what do you think about the first option? What if the company does not have the necessary resources to delve into economy category paint production? The company’s USP is premium products and as such does not have a customer base for economy class products.

C: We can a take a look at all the aspects right from the customer segmentation, geographical areas, positioning of the product for each of these product categories to see where the efforts need to be directed.

I: What all basic metrics would you cover? Product category is one, pricing is another; what else?

C: Marketing and sales & distribution could be other areas of concern.

I: That is correct. Distribution could be an issue. Try to compare our distribution channel with that of other major players and suggest what changes can be made.

(Gave category-wise distribution for different players and number of shops in which they sell products and asked to decide if we should distribute more products in existing shops or increase the number of shops.)

C: (Based on numbers, provided pros and cons for each option and after discussing concluded that more products should be distributed using existing network.)

• Q1. Tell me about yourself.
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• Q2. What has been a challenging phase of your life and how did you handle it?
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• Q3. What aspect of dramatics do you like the best?
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What population of India would have suffered during the lockdown because they were involved in the Theatre industry? How can the Government help them (alternate sources of revenue)?
I started with the guesstimate by stating that I will look at the number of people involved in one stage play production. This would include both direct (cast and crew) and indirect (costume and prop rentals). Then I would extrapolate the number by multiplying it with the number of plays showcased in a theatre. Then further multiply this with the number of theatres in a city (dividing this into tier 1 and other cities).

For the cities, I took Delhi as a proxy since I had knowledge about the theatre circuit there. I took some time in solving this, after which he told me to stop since we were short on time. So, I asked if I could quickly tell him about the solutions that I had thought of, which were broadly on the lines of pre-recording the performances and streaming it online. I also spoke about some long-term solutions, of how to attract audiences back to the theatres post the lockdown.