McKinsey & Company Interview Questions, Process, and Tips

Q1. Tell me about yourself.
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Q2. Why the trajectory of going to IIM Lucknow after Matrix?
Ans. 
IIM Lucknow is a prestigious institution for management studies and will provide me with the necessary skills and knowledge to excel in the consulting field.
• IIM Lucknow has a rigorous curriculum that focuses on developing analytical and problem-solving skills, which are essential for consulting.

• The institute has a strong network of alumni who are successful in the consulting industry, providing valuable connections and...read more
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Q3. What did you do yesterday apart from preparation?
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Your client is "CFA" a credit card issuer based in UK & West Europe. They are involved in issuing & servicing of credit cards. Currently are the 2nd largest player. 90% of the customers are retail consumers and 10% are small businesses. Further, CFA divides the customers as 'revolvers' and 'convenience'. Revolvers carry a balance & pay interest; Convenience customers pay the balance every month (i.e., do not default). They have built a strong reputation for consumer service. However, they are currently facing a decline in profitability over past 5 years.

We need to look into the reason and suggest a strategy for the same.
[Please note that I stands for Interviewer and C stands for Candidate] 

C: (Clarified the problem statement, all the points mentioned by the interviewer and the objective)

I would like to understand what function comes under servicing of a credit card: is it payments, partnerships?

I: Yes, servicing is basically end-to-end payments.

C: Alright, also, do they offer multiple types of credit cards for example a premium version, exclusive version etc.?

I: No, just one credit card.

C: Okay. The decline in profitability was seen just by CFA or was it an industry wide issue?

I: This was just limited to CFA.

C: Got it. I think I have all information I need to approach the case at hand. In case I need more information, I'll ask that as and when we are solving.

Now, I would like to take a minute to lay down my approach.

I: Sounds good.

C: (Made my approach chart, laid down the revenue & cost approach)

I: This looks good. However, I have some numbers with me that I would like for you to look and make sense out of it.

(Showed the following Exhibit)

Avg. customer tenure: 3 (5 years ago)
2 (Now)

Customer servicing cost: $3/customer/month (5 years ago)
$3/customer/month (Now)

Revolvers:-

Revenue: $1800 (5 years ago)
$1200 (Now)

Percentage of total customer: 50% (5 years ago)
40% (Now)

Acquisition cost: $50 (5 years ago)
$100 (Now)

Convenience:-

Revenue: $360 (5 years ago)
$240 (Now)

Percentage: 50% (5 years ago)
60% (Now)

Acquisition cost: $50 (5 years ago)
$100 (Now)

C: I'll just take a moment to note down these numbers & analyze these numbers.

Are these revenue & cost numbers per customer?

I: Yes.

C: Alright, so what I can see is that Avg. customer tenure has reduced and so has the Revenue across segment.

However, the CAC (customer acquisition cost) has increased. Even the share of the customer segment has changed. With this data, I would like to calculate the difference in profit from a customer 5 years ago vs today.

(Calculated profit for revolver & convenience individually 5 years ago, then took an avg.
Similarly, for today and took a weighted avg.)

(Numbers: 5 years ago, average profit CFA was earning: $922; Today: $452)

(Made sure to keep the interviewer in loop with my formula and then calculations)

I: This looks great! Let's sum up the case.

C: Yes, sure. So, we can see that overall, the profits have gone down. The points of issue seem to be the following: 2x increase in overall CAC, 33% decrease in the average tenure of a typical customer and percentage of convenience customers has increased. All this affects the profitability.

Excel test
Logical Reasoning test
Quantitative aptitude test

An extensive case study for the corporate tax team that includes knowledge of US GAAP and transfer pricing.

Q1. What are the fundamental accounting concepts, accounting entries, and the applicable tax rates for various services?
Ans. 
Fundamental accounting concepts, entries, and tax rates for various services.
• Fundamental accounting concepts include accrual basis, matching principle, and consistency.

• Accounting entries for services typically involve recognizing revenue and recording expenses.

• Applicable tax rates vary depending on the type of service and the jurisdiction.

• For example, consulting services may be subject to a different tax rate than soft
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Q2. What is your understanding of transfer pricing and its applicability?
Ans. 
Transfer pricing is the setting of prices for goods and services sold between related entities within a company.
• Transfer pricing is used to determine the cost of goods and services transferred between different divisions or subsidiaries of a company.

• It is important for multinational companies to establish transfer pricing to ensure fair pricing and compliance with tax regulations.

• Transfer pricing can impact a company's...read more
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Q1. What is the amount of data you have managed in your previous roles?
Ans. 
I have managed large volumes of data in my previous roles, ranging from terabytes to petabytes.
• Managed terabytes of data in previous roles

• Handled petabytes of data in data analysis projects

• Experience with data storage and retrieval systems

• Utilized data management tools and techniques

• Implemented data governance policies and procedures
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Q2. Which ERP software have you worked with?
Ans. 
I have worked with SAP ERP software extensively in my previous roles.
• Extensive experience with SAP ERP software

• Proficient in modules such as Finance, Supply Chain, and HR

• Implemented custom solutions and integrations with SAP ERP

• Trained team members on using SAP ERP effectively
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Q1. What are your salary expectations and how do you approach negotiations?
Ans. 
I approach negotiations by researching industry standards and emphasizing my value to the company.
• Research industry standards for the position to determine a reasonable salary range.

• Highlight your skills, experience, and achievements that make you a valuable asset to the company.

• Be prepared to discuss and negotiate benefits and other perks in addition to salary.

• Stay professional and respectful during negotiations to ma...read more
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Q2. What is your preferred joining date and the notice period required by your current organization?
Ans. 
My preferred joining date is in one month and my notice period is two weeks.
• Preferred joining date: one month from now

• Notice period required by current organization: two weeks

• Flexible with joining date if needed
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The aptitude test was interesting, Had a bunch of fun puzzles

Q1. Tell me about yourself
Ans. 
I am a detail-oriented business analyst with a strong background in data analysis and problem-solving.
• Experienced in gathering and analyzing business requirements

• Skilled in creating data models and visualizations

• Proficient in using tools like SQL, Excel, and Tableau

• Strong communication and presentation skills

• Certified in business analysis (e.g. CBAP)
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Q2. Where do you see yourself in 5 years
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Q1. Fit interview with PEI
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