McKenzie Style Case Interview: Super Soda Launching Electrolyte

Jul 10, 2024

Lecture Notes: McKenzie Style Case Interview by Matt

Introduction

  • Presented by Matt, Strategy Associate at Google, former Consultant at BCG.
  • Focus: McKenzie style case interview, particularly around a case with Super Soda, a beverage producer.
  • Multiple ways to solve a case; this is Matt's approach.

Case Summary: Super Soda Launching Electrolyte

  • Client: Super Soda, top 3 beverage producer in the US.
  • Product: Electrolyte - new flavored sports drink with lower sugar content focused on replenishing electrolytes.
  • Company Profile: Integrated beverage company owning end-to-end supply chain, numerous brands, 5 large bottling plants, and distribution agreements.
  • Objective: Evaluate the launch strategy for Electrolyte.

Key Considerations for Electrolyte Launch

  • Note-taking: Quickly jot down key info during prompt reading.
    • Super Soda: Beverage producer evaluating electrolyte launch.
    • Electrolyte: Low sugar sports drink.
    • Key Question: Factors to consider for launching Electrolyte.
  • Restate & Clarify: Restate problem and ask clarifying questions to show understanding and thoughtfulness.

Clarifying Questions

  1. Has the company tried anything already? (Existing research or tests done).
  2. What markets are targeted? (Geographical focus, US, North America, or other regions).
  3. Have any competitors launched similar products? (Understanding competitive landscape).

Building a Framework

  • Framework: Set of key investigation buckets to understand the problem better.
  • Attributes: Mutually exclusive and collectively exhaustive.
  • Structure: Request 30 seconds to organize thoughts, create 3-5 key buckets.

Example Framework: Business Situation

  1. Customer: Segmentation and preferences.
  2. Competition: Market size & growth, competitors.
  3. Company: Supply chain and sales/marketing capabilities.
  4. Product: Cost, pricing, and positioning.

Quantitative Analysis

  • Given data: Market share, product cost/price, and production costs.
  • Approach:
    • Calculate per unit profit: $2.00 (price) - $1.90 (cost) = $0.10.
    • Determine break-even units: $40M fixed costs / $0.10 profit per unit = 400M bottles.
    • Convert to gallons: 400M bottles * 1/8 gallon/bottle = 50M gallons.
    • Calculate market share needed: 50M gallons / 400M gallons (market) = 12.5%.

Break-Even Analysis

  • Understand market size: Electrolyte market is 5% of total 8B gallon sports drink market = 400M gallons.
  • Conclusion: Electrolyte needs 12.5% market share to break even.

Strategy to Achieve Market Share

Brainstorming Ideas

  1. Competitive Pricing: Lower prices to attract customers.
  2. Robust Distribution: Ensure no bottlenecks and meet demand efficiently.
  3. Sales and Marketing Campaigns: Create awareness and drive customer interest.

Final Recommendations

Structure for CEO Update

  1. Restate Context: Brief background to set the stage.
  2. Recommendation: Proceed with launch, focus on market capture strategies.
  3. Risks: Potential oversights in marketing competition and execution ability.
  4. Next Steps: Conduct detailed competitor analysis and demand forecasting.

Example Synthesis

  • Formulate clear, concise summary for the CEO emphasizing need for competitive pricing, distribution, and marketing to achieve the required market share.
  • Highlight potential risks and recommend further research on competition and market demand.

Conclusion: Practice & Preparation

  • Practice mock interviews, refine frameworks, and improve quantitative skills to excel in case interviews.

Tip: Consider one-on-one coaching for personalized feedback and improvements.