all right so why should you listen to some random dude in a white T-shirt standing in front of a whiteboard my name is Matt I'm a current strategy associate at Google prior to that was a consultant at BCG and today I'm going to walk you through a McKenzie style case and how I would solve it now keep in mind that there are multiple ways to get to the right solution in a case and so what I'm going to show you today is just my Approach feel free to take a different approach if you think that is more appropriate but the reason why I'm making this video today is because I've made similar case walkthroughs in the past and have received really good feedback and so today we're going to do a McKenzie style case interview and I'm going to walk you through my thought process so that you can understand a little bit better what to expect from a case interview and what the typical flow of a case should sound like hope this helps let's get right into it all right so the case we're going to do today is about a company called super soda so our client is super soda a top three beverage producer in the United States that has approached McKenzie for help designing its product launch strategy so as an integrated Beverage Company super leads its own brand design marketing and sales efforts the company also owns its entire beverage supply chain including production of concentrates bottling and packaging and distribution to retail outlets superp soda has a considerable number of Brands across carbonated and non-carbonated drinks five large bottling plants throughout the country and distribution agreements with most major retailers super soda is a valuating the launch of a new product a flavored sports drink called electrolyte sports drinks are usually designed to replenish energy with sugar and electrolytes or salts in the body however electrolyte has been formulated to focus more on the replenishment of electrolytes and has a lower sugar content compared to most other sport drings the company expects this new beverage to capitalize on the recent Trend away from high sugar products vice president of marketing has asked McKenzie to help analyze key factors surrounding the launch of electrolyte and its own internal capabilities to support that effort okay so the first question is what key factors should super soda consider when deciding whether or not to launch electrolyte all right so the first thing that we always want to do when we are given a case prompt is we want to obviously take quick notes while the interviewer is giving you the prompt and so I'm just going to write down really quickly some Keynotes that I heard during the initial readout of the prompt okay so basically what I've done here is I have written down a quick summary of what I heard so I wrote that super soda is a beverage producer they are evaluating the launch of a new drink called electrolyte and the overarching question here is what should they consider when thinking about whether or not to launch this new product and I've also noted here that electrolyte has a lower sugar content than most other sports drinks in the market okay so don't overthink this part just take quick notes and immediately after you take notes you want to basically restate to the interviewer what you heard to make sure that you understand it fully and also ask a few clarifying questions now the reason why you want to ask clarifying questions is not only to make sure that you understand the prompt correctly and to dig maybe a little bit deeper but also because you really need to demonstrate to the interviewer that you are listening and thinking thoughtfully about the prompt and the company and so even if you don't really have any major questions I highly recommend that you still come up with at least one or two questions that you can ask the interviewer before you start thinking about your framework okay so I've just put together three quick clarifying questions now I want to caveat that you do not need to ask the questions that I've come up with you can come up with different ones these are just the ones that came to mind for me and I'll just walk you through each so the first one is have they tried anything already this basically just means has the company done any research or has management tried anything to test whether or not launching this new product into the market would be a success or not and this is just really to see if they have any sort of like pre-existing information that could potentially help you out in the case now often times you're interviewer is probably just going to say no they haven't done anything and which is why they've hired you but it's just a good question to ask that I view as really no regrets the second question that I've put together is What markets are they targeting and so this is a good question to ask because whenever we're thinking about launching a new product one of the biggest questions is where are we going to launch it right is it going to be localized to the east coast in the US or is it going to be across the entire nation is it going to be in multiple countries are we going to be focused on North America America only or are we also going to go into APAC and emia thinking about these things is really important which is why I've asked here if they're targeting any specific markets because depending on what Market that they want to launch the new product in this is going to dictate their strategy now the third question that I've also mentioned is have any competitors launched similar products now I know that the initial prompt said that this new product was supposed to be differentiated based on the fact that it had lower sugar content but a question that I still have is has anyone already launched a similar low sugar energy drink into the market it's very possible that one of their competitors could have already beat them to the punch and so you know this might not mean that they shouldn't launch the product but it would mean that we would have to be thoughtful about how we position our product against the competitor's existing product but anyways after you come up with your clarifying questions and you ask the interviewer the next thing you're going to do is you are going to start building your framework and so what is a framework well I know a lot of you probably already know but if you don't a framework is just a set of key buckets that you as the interviewer would like to investigate and learn a little bit more in order to get to the root cause of the problem or in this case learning a little bit more about what might inform our product launch strategy and so some general rules of thumb with Frameworks is you want to make them as Mei as possible which means mutually exclusive and collectively exhaustive simply meaning that the buckets the topics in your framework should not have any kind of overlap if possible and also they should Encompass the entire universe of possibilities because the last thing you want is to miss out on a option that just simply wasn't included in your framework but potentially could be the key to the case and so the way you want to go about creating your framework is you want to tell the interviewer okay great can I take 30 seconds or a minute to just structure my thoughts and they will always say yes and this is your cue to kind of go ahead and start building out a framework now in practice how do you do this well the typical way that you want to build a framework is you want to make a list with multiple buckets as I mentioned and so for example even something as simple as this 1 2 3 could function as a framework now obviously you're going to need to put some thought into what goes into each of these rows but at the core this in and of itself could be a framework I would highly recommend that you have at least three buckets when coming up with the framework but no more than five because less than three is a little bit too simplistic sometimes and greater than five can be a little bit too much and so I'm just going to go ahead and put together a quick framework here okay so I've put together a quick framework right here and see if you can even see that basically what I've taken here is what's known as the business situation framework it's a very common framework but it works very well with a lot of Consulting cases and to walk you through each of the buckets the way that I would present this to an interviewer is I would say okay great so there are broadly speaking four buckets that I would want to consider when thinking about the product launch strategy for this business for this new product the first is going to be the customer the second is going to be the competition the third is going to be the company itself and the fourth is going to be the product and I'll now talk a little bit about each of these buckets so going back to my first bucket which is the customer here I would be most interested in one the customer segmentation otherwise known as you know the different customer groups that we are going to be going after for example are we going after wealthy individuals with a lot of income that would be interested in this kind of product or are we going after the lower income consumer and second customer preferences what does our Target customer value and what do they care about because this is going to inform how we actually think about launching the product second competition talking a little bit here there's two things that I'm most interested in the first is the market for these kinds of quote unquote healthy low sugar energy drinks is it a large Market is it a small Market if it's a large market then maybe it's a good idea to enter this Market if it's small maybe not so much we can't really make this decision in isolation but it will inform our ultimate recommendation and kind of tied to that is the growth of the market is this Market growing or is it shrinking if it is a small Market but it is growing then that is a good sign but conversely if it is a large Market but shrinking then maybe we need to be a little bit more careful about this and secondly under competition who are the competitors that currently play I'm sure there are other beverage companies out there who have tried something similar or are currently competing with us in the energy drink Market who are they how many of them are there how big are they is this a market with a lot of small players AKA a fragmented Market or is it a market with a few key players that dominate the space which would make it quite difficult for a new entrant to come in now thirdly the company I'm interested in two things what do our supply chain capabilities look like and two what about our sales and marketing capabilities and specifically when I talk about supply chain I'm talking about the strength of our supply chain because if we have a very strong supply chain this will make it easier for us to launch a new product now it sounds like we do have a very strong supply chain given the information at the beginning of the case that was given to us right they own end to-end the distribution and Bing which gives them a lot of control they also have five very large bottling plants that is a very good sign for us because then we don't have to depend on thirdparty providers or other partners basically to help us with launching this new product and then with sales and marketing here I want to just better understand hey how strong is our sales and marketing team and do they have experience in the past with launching a new product in this manner finally moving to the product there's three buckets here that I've put down the first is what is our cost to produce this new new product second is what are we pricing it at because again very important to consider because our pricing is going to ultimately also influence our product positioning which is the third bucket and the product positioning is a fancy word for basically when a consumer sees our product on the shelves what do we want them to think what associations do we want people to have with our new product you know when you see a bottle of coke at Walmart what sort of associations do you get from that in that same way we also really want to care about our product positioning because especially if this is a new market it the positioning is going to heavily dictate the reaction that we get and also whether or not we end up targeting the right people right so this is the framework that I've put together I want to caveat that this is not the only thing that could work this is just a easy framework for people to use that works with probably 90% of business strategy cases and so that's why I use it to teach but in reality you could technically come up with an unlimited number of Frameworks that could hypothetically work for this kind of a question but basically you want to present the framework to your interviewer and walk them through those buckets as I just did to you and from there there's two things that could happen one is the interviewer could point you towards a certain bucket which is what's known as interviewer-led cases where the interviewer is sort of guiding you towards the right approach or if you're doing an interview El Le case they might ask you okay so which bucket do you think is most interesting and that you want to look into first and then the onus is on you to then identify the bucket in your framework that you think is most relevant and ask some more questions related to that but in this case because this is a McKenzie style case McKenzie cases are usually interviewer Le and so the interviewer is basically going to lead us to the second question which is after reviewing the factors that supera should consider when deciding whether to launch electrolyte your team wants to understand the beverage market and consumer preferences to gauge the potential success of your team has gathered the following information about the US sports drink Market the information shows an estimated share of electrolyte drinks as well as the current share for the two main electrolyte products Cool sweat and recover plus okay so now they're going to give us an exhibit basically showing us the share of the US Sports string market and so a quick rule of thumb is that whenever you are given any kind of exhibit in a case interview the first thing that your brain is often going to want to do is you're going to start wanting to think about like things that you should say right you know you want to sound smart or something and so you want to tell the interviewer some insight that you just thought of but before you do that I implore you my recommendation is that you should actually first just talk aloud and describe what you are seeing to the interviewer and so the way I would go about this is I would say okay so this is really interesting so it looks like we've been given some information related to the total market for us sports drinks which is about 8 billion gallons and we've also been given some detail about the electrolyte drinks Market which is only about 5% of the total us sports drink market and I can see here that there's a few key competitors in the electrolyte drinks Market Cool sweat and recover plus that we might need to watch out for and so the reason why I recommend just restating what you see is because this often buys you time and allows you to sort of process the information a little bit easier and I've often found that by speaking aloud my brain just understands what I'm seeing a little bit better than if I were to just silently stare at this exhibit and then suddenly try to come up with some key Insight now in this scenario the interviewer is going to actually start giving us more information because there's a Quant question coming up and they're going to tell us based on the Target price and upfront fixed costs what share of the electrolyte drink Market would electrolyte need to capture to break even here is some additional information for you to consider as you form your response so electrolyte would launch in a 16 ooun format or 1/8 of a gallon at a price of $2 to retailers to be able to launch electrolyt super soda needs to Bear $40 million in total fixed costs including marketing expenses and increased costs across its production and distribution Network and finally the vice president of Ops operations estimates that each bottle would cost $1.90 to produce and deliver in the new process okay so what I'm about going to do here is just write down what I heard ideally in a case scenario you should be like taking notes so that like as they're saying it you're getting these numbers down but because I'm for the purposes of today I'm literally just writing on a whiteboard I'm I'm going to go ahead and write some stuff down here okay so here I've basically just summarized the information that was given at the beginning of this problem which is we have a 16 oz format it's going to be priced at $2 a bottle and it's going to cost us $1.90 to produce and there's also going to be $40 million in fixed costs associated with this new product um and then finally we're given some Market data as well so we can see the total market for energy drinks is 8 billion gallons and 5% of that is the electrolyte drinks Market of which 20% is Cool sweat and 10% is recover plus now the question we were asked is what share do we need as electrolyte in order to break even and so when you hear the word break even the first thing you should be thinking of is profit okay and costs because Break Even basically means how much do we need to make in order to recoup our upfront investment and so the way I would go about this is basically I would first try to calculate the per unit profit that we're getting from each sale of this new drink right so unit profit is basically what we're selling it for which is the price of $2 per bottle minus the cost per bottle which we were given was $11.90 and so how many units do we basically need to sell in order to recoup this $40 million well the way you should do this is divide that 40 million by this profit per bottle so like I'm just going to be super clear here and say 10 cents per bottle that's the unit that we're dealing with here and so number of bottles to break even equals $40 million in fixed costs divided by 10 cents per bottle okay so and now some of you might be wondering how am I supposed to do this math in my head well I'll show you so 40 million is a pretty big and round number which is good for us um but then when we divide by 10 cents some of you might be feeling a little bit uncomfortable with this math now what we have to remember is that 0.1 is the same as 1 over 10 right and if you guys paid attention in basic division and multiplication class or in basic math class then you should know that when you divide by a fraction you flip it and you multiply by the denominator and so this is the same thing as 40 million * 10 which actually gets us to 400 million now you have to be careful here though because 400 million what is that is that dollars or bottles it's bottles because the dollar signs here cancel out and so it's actually 40 million bottles that you need to sell in order to break even now some of you may have gotten to this number without having to watch me do it you might be patting yourself on the back right now but we're not done yet the question if you remember was what share of the electrolyte drink Market do we need to break even and so I actually forgot to write this earlier but we were also given an important detail in the beginning of this question which is that okay the bottles are launched in a 16 oz format otherwise known as as 1/8 of a gallon now why is this important well we need to somehow now convert the 400 million bottles into like a volume unit so what does 400 million bottles mean in terms of gallons how many gallons is that and the way that we're going to get to that is we're going to multiply the 400 million bottles times 1/8 of a gallon and so 400 million bottles time 1/8 of a gallon is just 50 million gallons okay and the reason why I wanted to convert this to gallons is because the market Shar data that we have is in gallons and so we know that the total market for sports drinks is 8 billion gallons now 5% of that 8 billion is electrolytes right and so I'm going to start squatting and so 8 billion gallons times 5% is going to equal whatever the electrolyte drinks Market is now again some of you might be feeling a little bit intimidated by this multiplication here because you're multiplying a massive number by a percentage now the easy way to do this is you can easily take 10% of any number right because you just literally take one zero off of the right side you move the decimal place by one position when you multiply by 10% and 5% is just half of 10% so first let's take 10% of 8 billion and then let's just divide it by two easy right so 10% of 8 billion is 800 million half of 800 million is 400 million and so that's an easy way so now you know that the entire electrolyte drinks Market is 400 million gallons okay and so let's take a step back now cuz I've done a lot of math why did I want to figure out what this 5% was in gallons well the question that we're trying to get to is what share of the electrolyte drinks Market do we need to break even and we figured out how many bottles we're going to produce to break even it's that 50 million gallons worth of drink but the last thing we need is to divide it by the total market for electrolyte drinks which we've now learned is $400 million so 50 ID 400 is going to be our answer now 50 divid 400 is the same as 1/8 1/8 is the same as roughly 12.5% I think and so the answer very small down there is 12.5% we need 12.5% of the electrolyte drinks Market in order to break even now I know that this was a absolute ton of math and if you're feeling a little bit overwhelmed right now don't worry these kinds of quantitative questions get much easier with practice and so the next thing that you always want to do after completing the Quant portion of a case is you want to take a step back absorb what you've just learned and think about what this means in the context of the case and whether or not you think this is realistic or not so for example I would say to the interviewer okay so I've learned now that we need roughly 12.5% of the market in order to break even now does this number feel attainable to me well given what we know about this Market it looks like only about 30% is dominated by these major two players 70% is taken up by other which I would assume would be smaller players with less than 10% market share and so given that I would think it would be reasonable to assume that a competent new entrant with the right marketing strategy and the right product positioning would be able to capture 12.5% of this market now under what time frame I don't know that would depend but seeing this 12.5% and seeing that only 30% is taken up by the top two competitors gives me a lot of comfort around that okay so you just want to give your reaction demonstrate some critical thinking and show that you're thinking about what the numbers even mean in the context of the project okay but now we're going to move to the third question and so the interviewer would basically react to whatever you discussed in the second question and then push you towards the third question because this is an interviewer-led case and so the third question is subota Executives believe that the company's position as a top three beverage company gives it strategic impetus towards achieving the desired market share however they ask the team to outline What would be needed to achieve the target 12.5% market share of the electrolytes drink Market what would super soda need to do to gain the required market share for electrolyte following its launch okay so basically this third part of the case is what's known as a brainstorming section and typically in a brainstorming section you're just trying to come up with as many ideas as possible to the question which in this case is what would they need to do in order to actually get that 12.5% market share and so it's also okay here to ask for just 30 seconds if you don't have have any ideas in mind but if you do have a few ideas already in mind feel free to just go ahead and start listing out ideas to your interviewer because this this part of the case tends to be a little bit more casual so I'm actually going to move over here because I'm running out of real estate okay so I've just taken some time to put together a few quick ideas and basically I'll just walk you through what I am thinking the first thing I put was competitive pricing now why did I put this well pricing is one of the most effective strategies when it comes to capturing market share and if we're only thinking about about capturing as much market share as possible one of the most direct ways that the company can try and capture more customers is by lowering their prices to a very competitive price point now there's a whole set of considerations that go into doing this because you don't want to completely obliterate your profit margins by lowering the price too much but that is one lever that the company has at its disposal the second thing is robust distribution now the reason I bring this up is because distribution especially when we're talking about cpg consumer package Goods companies is extremely extremely important because if you aren't able to get your products into stores where your customers are then how are you going to maximize your chances of making a sale and so making sure that their distribution channels are set up properly so that they don't have any kind of bottlenecks whether it be like at the bottling facility or with how many Trucking shipments they can accomplish or even like how many of the inputs needed for the drink they can get in their factories these are really important things to consider to make sure that you are able to properly meet demand and not have a supply constraint now finally I've put sales and marketing campaigns and I think this is a little bit self-explanatory but again sales and marketing is super important when we are launching a new product we need to get the word out there that we are launching this new product and we need to properly build awareness in the consumer's mind about this product so that they actually get off the couch and go and buy the product or if they're walking through a convenience store for example they see this produ in the shelves and they're and they think to themselves oh hey I've seen this somewhere let me try it and so basically these three things I think are critically important to consider now are these the only three things that you should consider when thinking about can we capture 12.5% market share absolutely not you can come up with a much bigger list than I did but in the context of a case I would try to come up with at least three good solid reasons that you can then discuss with your interviewer now this brings us to the end of the case which is simply the recommendation and synthesis synthesis is just a fancy word for summing up everything that you've learned today and bundling it up into a nice concise presentable answer and so the typical way that this is asked in case interviews is the interviewer will say awesome so the CEO of the company is now walking down the hall to the conference room where you and your team are posted up and you have about 30 seconds before she walks in and she's going to ask for an update what would you tell her based on what you've learned today and so the way you always want to go about this is I would recommend taking like 30 seconds okay don't just dive right into it and just take a second to look over everything that you've learned today okay and think through what the key insights are and what they mean in terms of the product strategy and whether or not they should launch this product and then come up with a few bullet points and the structure that you generally want to follow is you want to first start with either restating the context and make this super quick because you don't need to belabor the point here they already the CEO already know knows what's going on at the company but you might want to restate it quickly and then you want to give your recommendation this is the meat of it you want to follow up with some potential risks and then you want to end with some next steps and so broadly speaking this structure works pretty well I had a few people comment on one of my past videos asking whether or not restating the context was necessary I would say no it's not necessary although I personally do appreciate restating the context just because it helps to ground yourself before you give the recommendation and I think as long as you are keeping it very brief like literally 10 seconds or less then there's no problem with restating the context and so basically an example of how I would give this recommendation and synthesize what I've learned from this case today is I would say something along the lines of awesome thanks so much for joining us as a reminder we've been working through the considerations for the product strategy for electrolyte and our recommendation at this moment is to proceed with the launch but also to give heavy consideration to how we go about the launch because we've found through our analysis that we need to capture about 12.5% market share in order to break even and and some levers that we've thought about to achieve this 12.5% market share are ensuring that our pricing is competitive making sure that our distribution channels are robust and able to meet demand and finally just dialing in our sales and marketing campaigns so that we are targeting the right customers where they are now despite our optimistic Outlook there are obviously some risks as well including the fact that our product launch strategy may not succeed as much as we anticipated due to the strength of our competitors or perhaps our inability to execute effectively on our distribution but as a next step I would recommend potentially doing some further research into what our competition is currently doing and also understanding a little bit better what the potential demand for this new product will be so that our supply chain is prepared when the launch comes okay so I hope that this video is helpful and if you are currently working on your case interview prep and you've looked through a lot of different resources and maybe you're still stuck you might want to also consider some one-on-one coaching with me as well where I can walk you through the case and pinpoint exactly the areas that you can improve on if that sounds interesting to you then make sure to check out the link in the description below but otherwise thanks so much for being here I'll see you guys in the next one peace