Parthenon - EY Interview Questions, Process, and Tips

Round: HR Interview
Experience: 1. Prepared answers to the basic questions in particular why firm ABC
2. Demonstrated enthusiasm. Spent over 20 minutes after he had asked his basic questions discussing Parthenon’s plans in India. It was more of a conversation and helped build connect.
Tips: 1. Do your reading about the areas of work that the Firm does so that you can engage the interviewer in a conversation [Source: Website, alums etc]
2. Prepare your basic questions and do mock PI sessions
3. Believe that you will crack the interview when you enter. The mental confidence does wonders.

Round: Case Study Interview
Experience: Started off by understanding the context to the case. A handy tool I would use to ensure I asked all the relevant questions was:
1. Did I understand every word in the problem definition e.g.: Drop in profitability by how much, since when, is it drop in absolute terms or percentage terms, what is the profitability trends for competitors in the industry
2. 5 Ws: Who, Why, When, Where, What V: What products does the retail store offer KK: Ordinary department store. Offers everything from electronic goods to vegetables to packaged foods etc
Me: Is it experiencing a fall in profitability in all products or certain segments
Interviewer: All
Me: What is the profitability trend of other competitors
Interviewer: Profitability has been stable although our chain is well below the industry average
Me: I am not very familiar with this business. Could you explain to me what the value chain would be like?
Interviewer: Standard procurement model. There are well-established suppliers for each product category. The goods are procured, markup price is applied by each store manager and goods are sold to retail customers
Me: What has the trend of costs been for the company
Interviewer: Costs have been stable
Me: Okay, so the problem as I see it is that this particular store has been seeing a drop in profits (absolute terms) over the last two years. We need to establish what it is that is causing the fall in profitability and what we can do.
Interview:er Sure go ahead
Me: I’m going to take a minute to structure how I want to think about this problem
Interviewer: Sure, go ahead V: Profitability = (P-VC)*Q – FC
Me: Broke down each leg of the equation into variables that would affect them.
Interviewer: Great I like the structure. Proceed V: Here’s where I got stumped. For the next 5 mins I made the mistake of not following my structure and asking some general questions about cost. I learnt that cost was RM was 60% of COGS, 20% labor and 10% Fixed Cost allocation. After probing I found out that costs were stable and that was no further potential to reduce the costs further. Then I touched on price and found that they had not touched ‘list price’ for a long time. Based on my questions I also learnt that volumes were actually increasing. That’s when I hit a wall. I was thinking to myself. Costs are stable. Price is stable. Quantity is increasing. How the hell is profitability falling? All the while
Interviewer is stone faced.
Me: I think I am pushing myself into a corner. Do you think there is something I am missing. KK: I think your structure was fine. Implicitly I sensed he was telling me to get back to my structure and ask him questions.
Me: I started with Price and was about to ask the first question when he said
Interviewer: Do you know what the revenue trends are like. Just thought you may want to know what revenue is like before you proceed.
Me: Sure, Can you tell me what their revenue trends have been.
Interviewer: Revenue has been falling
Interviewer: Okay. Just before we proceed I want to know whether you understand the relationship between COGS and revenue.
Me: Sure. As you sell more your COGS should increase proportionately assuming no significant changes in goods supplied, labour etc Now we are saying revenue is decreasing despite increasing COGS (absolute terms). This could mean one of two things since revenue is: Revenue = P*Q Quantity sold is falling. But we already established that volumes have been increasing evenly across the board or That effective price at which I am selling to the customer (effective being net of discounts, mark downs etc) is actually lower than the list price
Interviewer: He smiles (The first in over 20 minutes and I know I am on the right track). Great. I just wanted to establish that you understood the relationship. I think it is the latter. Proceed.
Me: Okay. So we know that a substantial part of the problem is that store managers are actually selling the products much below the list price.
Interviewer: Exactly. Why do you think this is the case?
Me: At this point I clarified whether he wanted me to finish the unasked questions in my structure and he said, “No. I think we have isolated the problem”.
Me: Since this was effectively a new problem, I asked for a minute to articulate what the potential causes could be. This is critical whenever a new question emerges in your problem. Do not answer off the cuff or it will seem like you are shooting arrows in the dark.
Me: I see three potential reasons: 1. Incentives: Retail store managers incentives are aligned to sales and not profitability and therefore he is cutting prices to increase volume 2. Buyer behavior: Customers have become more price sensitive. [On hindsight that did not make sense as this would have affected all department stores in the area] 3. Competition: Has there been any change in the competitive landscape.
Interviewer: Good points. So the store manager’s incentives are aligned to individual store performance. However let us ignore the case of manipulation. As far as your third point is concerned. Yes. Wal-Mart has opened a store recently next to this particular retail store and the store manager is being forced to compete with Wal-Mart’s ....
Me: I smile and say “Everyday low prices” [Thank you Prof. Rajiv Banker. We did a case on Wal-Mart twice with Prof. Banker]
Interviewer: Smiles right back and says yes. Whenever you are looking at a decision see the influence of your 4 Cs. Customer, Channel, Cost and Competition.
Me: Would you like me to explore potential solutions.
Interviewer: No. That’s fine. Let’s proceed to the next part of the question.
Interviewer: A software product company approaches the store manager with customer relationship management software that will enable the store to run a promotions and loyalty program. The store manager wants to know whether he should make the investment.
Me: Clarificatory questions. 1. Over what time frame are we evaluating this decision – 1 year 2. Are we considering only the acquisition cost in the decision or do we have to include operating expenses and training costs etc – Only acquisition cost. Assume it to be a onetime flat fee.
Me: We need to do break-even analysis and see whether we are likely to generate additional sales over the next year that will cover the acquisition cost.
Me: BEV Sales (units) = Acquisition cost/P-VC
Me: We need to compare this number with our expected increase in sales over the next year on account of this investment and see whether there is consistency.
Tips: Interviewer likes standard frameworks/equations. Don’t water down your structure with variations like the Internal vs. External factors.

Skills:
College Name: Indian School Of Business (ISB)