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Mastering BCG Case Interview Techniques

Oct 31, 2024

Consulting Case Interview Walkthrough

Introduction

  • Presenter: Matt, Associate at BCG (Boston Consulting Group)
  • Audience: Students/professionals interested in consulting
  • Focus: Walkthrough of a BCG round two case interview

Case Scenario: "The Styrofoam Situation"

  • Client: Cupco, a national supplier of styrofoam cups to restaurants
  • Challenge: New low-cost competitor, Chalice from China, entering the market
  • Objective: Provide recommendations to ensure continued profitability amidst competition

Initial Steps

  1. Note-taking: Quickly jot down essential details from the prompt.
  2. Clarifying Questions: Demonstrate understanding and thoughtfulness:
    • Is Cupco only US-based?
    • Have any strategies been attempted before?
    • Do they only serve restaurants?

Framework for Analysis

  • Structure Thoughts: Use the Business Situation Framework by Victor Cheng
  • Four Buckets:
    1. Competition: Market size, competitor landscape
    2. Company: Strengths, differentiators, financials
    3. Customer: Preferences, price elasticity
    4. Product: Unit economics, differentiation potential
  • Key Questions: Develop 2-3 questions per bucket for deeper understanding

Framework Application

  • Competition:
    • Market size and growth
    • Competitor analysis (fragmented vs. dominated)
  • Company Analysis:
    • Key strengths (e.g., supply chain, R&D)
    • Financial capability to adjust pricing
  • Customer Analysis:
    • Importance of product features
    • Sensitivity to price changes
  • Product Analysis:
    • Unit price, cost, and profitability
    • Differentiation possibilities

Findings from Exhibits

  1. Product Economics (Exhibit 1):
    • Cupco charges 10 cents/unit; Chalice charges 7 cents/unit
    • Chalice incurs losses (operating at loss possibly for market entry)
    • Cupco can't match Chalice's price without losing profit
  2. Customer Preferences (Exhibit 2):
    • Service reliability is the top customer priority
    • Cupco excels in this area compared to Chalice

Brainstorming Solutions

  • Strengthen Service:
    • Offer expedited shipping
    • Leverage strong supply chain for superior customer experience
  • Adjust Pricing Cautiously:
    • Lower price incrementally (not to Chalice's level)
  • Long-term Contracts:
    • Lock in current customers with longer contracts

Synthesis and Recommendation

  • Context: Address Chalice's market entry threat
  • Findings: Chalice operates at a loss; service reliability is Cupco's strength
  • Recommendations: Focus on service, cautious price adjustment, explore logistics
  • Risks: Price cuts affecting margins
  • Next Steps: Further customer research on price elasticity

Conclusion

  • Skill Development: Practice improves case interview performance
  • Networking: Case with friends and consultants for feedback

Note: Casing involves adapting frameworks based on the case context. The business situation framework is a strong base for business-oriented strategy cases but may require modification for other scenarios.

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