I really liked how the guy is not only structurally, but emotionally consistent as well. No ups at familiar stuff or downs with the unfamiliar
@tigerrx7
5 жыл бұрын
What I like about this one is the interviewee did not take the “simple” maths for granted. You can easily mess up, like he did with the 7.36B. Lay it out point for point! 👍🏼
@spigbungus
2 жыл бұрын
Bruno is a machine, pumps out framework branches like factory
@bryanmuniz3561
3 жыл бұрын
This is a great business and consulting class. I liked so much this case. You've came up with issues relating market problems, finance and costs, macroeconomics, geopolitics and supply chain issues. That is a really classroom of "brainstorming" in a business environment. Thanks so much for the work and I'm looking forward to have some classes with you guys. Cheers.
@PaulMwongela
5 жыл бұрын
This is just beyond excellent! Totally inspired and will keep coming back to your channel for more, please keep 'em coming.
@scrum7
4 жыл бұрын
The guy didn’t inspire much confidence at the beginning when he incorrectly summarised the facts, but this actually was a masterful job. Really well done and thank you for your insight
@franciswarutumo1627
3 жыл бұрын
This shows reality, not scripted. this is what happens
@ThePorschefan
5 жыл бұрын
This is amazing! I once had a consulting interview and I loved how they where more interested in hearing how I think about solving a problem, today I'm starting a consulting for small businesses and this video is a great feedback of how to break down problems, pretty much like Ray Dalio see's everything as a machine
@CraftingCases
5 жыл бұрын
Hey Juan, So true that Ray Dalio has a similar thought pattern. I see the same in Elon Musk, who sees most problems as a basic "first principles" formula. Most people don't realize this, but the same thought pattern is embedded in the thinking of a ton of successful people. My guess is that no one realizes this because this type of thinking doesn't really have an accurate name (structured-thinking is one of many facets of this).
@anandvyavahare2031
2 жыл бұрын
The last question was pretty amazingly answered. I can imagine even if I have some great understanding of automotive industry, I would have struggled to come up with a structure and some points as good as him.
@ramitarora91
5 жыл бұрын
Really good. Thanks a lot. I am a Product Manager in big tech, not looking to be a consultant, but find this stuff to be super helpful for in-house strategy work.
@cakaisjsd
5 жыл бұрын
Just a little feedback, if you had 2 mics, one on each person, the audio would've been much more clean! Anyway, congratz to the good content.
@CraftingCases
5 жыл бұрын
Thanks Marco! We will buy a couple of lav mics and do just that. We might even have them available before the next shooting!
@markgtownsend
5 жыл бұрын
Or if your condenser mic had a “figure 8” pattern setting you could put it between you and it will pick up front and back equally. Right now it’s picking up a lot of room noise. Great video by the way👍🏼
@CraftingCases
5 жыл бұрын
@@markgtownsend It is a figure 8 pattern, but the Mic had to be a bit far from both of us and the room was echo-y. We've bought ourselves more gear for future videos. Glad you liked it!
@scottm4975
3 жыл бұрын
Really great in the structure of the case. I have one issue with the math part of the problem though. Bruno was focused on trying to explain a $2Billion gap in cost. But the real gap wasn't that high. Since revenues also went up by 1.5B the real gap wasn't the full $2Billion amount. You need to compare the cost if profitability remained at 5% vs. the new 2.5%. So for revenue of 22.5B and a profit of 5% the costs should have been $21.375B. When you subtract that from the $22B of actual costs you find the gap to bring profitability back to 5% was only $0.625B. Then you have to do the same thing with the materials cost and you find that materials costs actually explains $0.7525 B of cost increase, which means the materials were actually offset a little by other decreasing costs. Then you do the same for the auto parts and find again that auto parts explained $1.024 B in costs and were offset by other costs. It doesn't change the answer to the case, other than it seemed like in this case he was saying materials only explained a portion of the cost difference, when really it explained more than the full amount of the cost difference. And the logic behind the calculations were flawed because they didn't normalize the cost for the revenue increase. I'm pretty sure this is the right way to do it, but please correct me if I'm wrong. Thanks a ton for all the help on this channel, overall really great stuff!
@kennethskjttstagistoft7203
2 жыл бұрын
Actually I do not agree. I understand how you are thinking but you are most likely simplyfying the issue. The real key indicator you should be looking for is hidden in the product mix, i,e which cars or category of cars are profitable and which are not. Once you get that insight you have a much more firm platform to guide your decisions moving forward as this will allow you to bring the pricing component to bear as well.
@alexlejd6601
2 жыл бұрын
@@kennethskjttstagistoft7203 He is not simplifying the issue, he's making the issue at hand more advanced than it needs to be. And if I'm interpreting what you are writing, you are talking about the start of the case, which is not what Scott M was referring too.
@kennethskjttstagistoft7203
2 жыл бұрын
@@alexlejd6601 Thanks for your comment. In the real world ensuring that you have the right data and breaking those down to operationally viable and transparent cost ratio´s rather than focusing on cost categories would be the way to go. In fact much like the approach which made Toyota the most profitable car manufacturer in the world for many years. The trick is to look at the value chain as a whole.
@yoshitasahishnamanne9430
2 жыл бұрын
@@kennethskjttstagistoft7203 I think what Scott M is trying to say is that while the revenue of the company has increased, the cost needs will increase (ideally % cost increase must be lower than the % increase in revenue or worst case equal to the % increase in revenue) but in this case specifically the cost increased disproportionately by 0.625 billion dollars. We need to explain what's triggering these 0.625 billion dollars first and not look at the overall 2 billion cost increase. The trigger is the material costs, but some part of the increase in material costs is being offset by decreases in other costs ( case in point, factory).
@alexandertronin8496
Жыл бұрын
I liked your way of calculation of the "should have been" costs. It could be improved a bit by taking into consideration the share of the fixed costs
@alishaparveen5424
2 жыл бұрын
The way the interviewee structures and answers with poise is beyond excellent
@francis.valencia
3 жыл бұрын
brilliant exchange between you two. good work. I like how Bruno didn't just accept the recommendation, but went ahead and said "let's work on that now"
@shreyasverma2614
4 жыл бұрын
Awesome add-on to a seemingly straightforward profitability case! Great content guys
@CraftingCases
4 жыл бұрын
Glad you liked it!
@sultansaad2555
3 жыл бұрын
I love this I wrote this comment so the algorithm recommends more of this content
@rome229
4 жыл бұрын
I am so inlove with this channel and all content. Its so structured, everything makes sense, and its relatively simple!
@CraftingCases
4 жыл бұрын
Glad you like it Rome!
@ViniciusPessin-n3t
25 күн бұрын
Vocês são excelentes, obrigado por cada vídeo e material disponibilizado online. Além disso, é muito gratificante ter dois BRs ensinando um conteúdo tão importante não somente para consultoria, mas para vida, esse tipo de pensamento/análise vou levar para qualquer lugar/empresa que eu passar.
@panda007
5 жыл бұрын
Thx for sharing. The basics are all about drilling down to the constituents level. What I’d love to learn is the basic fundamental constituents of how businesses work - and I believe the first level drill down helped paint the picture.
@user-kl4oh2co2y
4 жыл бұрын
thank you for ending my MBB internship dreams. I can't do that problem that quick, not even close. It's over.
@CraftingCases
4 жыл бұрын
Just learn to do it. I couldn't either before I ever prepared. Acceptance rates are low -- I know no one who can do this without thorough preparation, yet a ton of people who learn to do this well.
@Cz-hd3vu
3 жыл бұрын
Seen so many ex MBB consultants’ case prep channels. This one is so far the best. Also bit curious about why so many consultants enter this business
@MrKorimco
3 жыл бұрын
This channel is amazing and these guys are awesome teachers. As somebody with an Arts/non-business degree, their videos helped me prepare for several rounds of case interviews and successfully land an MC offer. P.S. they also have a podcast (I used to listen in the shower lol)
@usamah346
3 жыл бұрын
Where can i find the podcast?
@mali2640
5 жыл бұрын
My first time watching from case study and I really enjoyed it. Thanks!
@subramaniamiyer2432
4 жыл бұрын
why not just give him a calci? I mean at such a professional level, do you think we should waste time on calculating 65 % of 11.44. the case and his line of thinking is just amazing. edited: ohh am sorry, just checked and found that most of the consulting firms don't allow calculator. Amazing content team craftingcases. pls go on and make more on other sectors/industries.
@avidlyviewed
4 жыл бұрын
This was an excellent case study to understand how to drill down into factors. I also liked that you are showing how the candidate writes down the alternatives, profitability blocks, captures new information etc. I was curious to see if the company did not pass the cost to their customers, as the competition profitability went up, and our sales went up, any potential in increasing price was possible. It might still point to it being only a cost problem, but understanding if competition increased prices and hence their profitability I think was not covered. Am I chasing an irrelevant factor? Curious to know. Very very informative and helpful. Thank you guys..
@olavolsenaamlid2260
4 жыл бұрын
Really enjoy your videos. It teaches me a lot and I have been watching all of your videoes multiple times. I am aspiring to work in the consultant industry (McKinsey, BCG, Bain, etc.), so this really helps me a lot. Thank you!
@Janosik_Janosikowy
Жыл бұрын
Did you get your job in consulting?
@Dracogame
2 жыл бұрын
27:45 the fact that I did that while practicing this case makes me so happy. At first I thought I made a mistake!
@Holy_hand-grenade
3 жыл бұрын
It was always going to come down to domestic supply chain vs international supply chain whether it was forex fluctuations or domestic cost increases. The unionizing was a nice spin.
@larrygerry985
4 жыл бұрын
And thus 6 months later they go into a company and say "lay off 30%"
@vio1583
4 жыл бұрын
Lol'ed
@vio1583
4 жыл бұрын
Everything theyll be doing is drawing pp slides for 3 years.. And I am saying that even though I want to get there
@Dubinski2382
Жыл бұрын
I feel that having an accent that makes it more natural for you to talk slow and clear when explaining simple concepts is a requirement for passing a case interview. If the interviewee had no accent in this example he would sound ridiculous talking so slow and using such simple phrasing.
@adityaarora6753
5 жыл бұрын
So making a simple arithmetic error while trying to do 0.65*11.44 which we generally stop doing by hand around the age of 12 could have meaningfully affected the outcome of this interview?
@Prediculous
4 жыл бұрын
I find that ridiculous. In no situation would I leave this to mental math regardless of how talented the person would be. I would argue that we have left the age of memorization behind. Understand the problem is much more critical.
@eduardchante
4 жыл бұрын
@@Prediculous that's right man, I found that extremely picky.
@leonh2242
3 жыл бұрын
I would just use 0.6*12 to get an estimate, after all what matters is why the costs increased and offer potential solutions
@juliay3833
5 жыл бұрын
Julio's time out alert made me laugh - prob because I got the $7.4bn right by rocking the math part and did notice Bruno's mistake. I missed the supply chain risk analysis but picked on the sustainability of supply chain point. Very realistic performance from bruno, which I love it.
@raa7420
2 жыл бұрын
This was such a wonderful case to learn from, I loved the professionalism in your discussion
@alexandertronin8496
Жыл бұрын
2:50 - based on the revenues and cost provided, profit margins are not 5% and 2.5% 3:42 - at this point, it cannot be concluded that we do not have a pricing problem, as it could be that the competitors simply increased their prices, while we did not
@DaveyboyCain
4 жыл бұрын
This is a brilliant breakdown and helps a lot for case prep - esp for cost analysis. Thanks!
@christospapanikolaou222
2 жыл бұрын
I like how the guy structured the answer if they should outsource, however, I believe that he should have selected some more generic buckets, like: Financial / Technical / Supply Chain / Social / Geopolitical / Market (i.e. if that place may be potential market so that the outsourcing could be considered local content)
@Varghese1991
5 жыл бұрын
You guys are great, love these videos. Very educational content.
@pb4012
10 ай бұрын
What I find frustrating about modern day consultancy is that the strategy nearly ALWAYS focuses on only reducing costs. The clients are at fault too because they have a preconceived idea of how to improve their profitability when they call in the consultants. Invariably that results in either reducing production and product quality or cutting conditions for staff, who unfortunately are just seen as a cost rather than an asset. This is even referenced here in this mock interview when it comes to salaries/unions. Very rarely do consultants get asked to or advise on how to improve product/service quality and appeal as a priority or simply advise on keeping a sustainably profitable business. Instead, directors and senior managers, with the aid of the consultants, cut costs to the extreme to make good profits for their share holders in the short term before they move onto their next high profile post, leaving the company’s reputation damaged in the long run and the staff poorer and unmotivated. The bane of impatient and selfish modern capitalism.
@CraftingCases
10 ай бұрын
Well, this is a cost reduction case so it leaves that impression for sure. No one goes to the revenue growth case and make a comment on it saying that it’s nice that consultants help companies grow, nor do they go to the public sector case and say it’s nice that they help with vaccine distribution or literacy rates. As for the real job, in my experience there are cost cutting projects and projects focused on growth. Usually when the economy is down most clients want to cut costs and when the economy is up they care more about growth. Of course, the media doesn’t give headlines to the later, only to the former. I was once in a cost cutting project where the explicit goal of the “evil capitalists” running the company was to cut costs without having to do lay-offs. We got to help them achieve this goal and helped keep everyone’s jobs. Again, no headlines of this anywhere. Not saying that all consultants are saints and that everything is roses and rainbows. There are things to be improved in consulting, as there are things to improve in medicine, law, academia, government, NGOs. The list goes on. Just saying that there are HUGE biases in public perception (availability bias being the main one) because the nice outcomes of the work are very private and lay-offs are are public (and also make clickable, rage-inducing headlines).
@pb4012
10 ай бұрын
@@CraftingCases I completely appreciate your reply and my comment wasn’t meant to criticise any individuals or demean the work of consultants. I was just expressing that there is a big culture these days of blindly cutting costs to make a quick dollar that extends far beyond the “bad times”. Although I’m not in the sector directly, my ex associates who are have honestly expressed that all they are ever asked is “where can we cut costs”. I now work for a company where leadership has changed every few years with only short term goals in mind, which as I said, has led to damaged brand reputation and poor staff morale. I hope for a more refreshing approach in the future. I have no doubt that consultants are a necessity and help create a lot of positive outcomes for companies and society. As an ex banker, I’m more than aware of the unfairness of everyone being tarnished with the same brush. No offence was intended and thanks again for your reply
@CraftingCases
10 ай бұрын
@@pb4012Oh, not personally offended at all. I've been out of consulting for 8 years now, so not attached to the profession. I just commented because there's been a surge of comments criticizing the profession in my channel in the last few months (probably because of that skit on John Oliver and the second order effects of that). Now, my channel isn't even defending the consulting industry (not more than an SAT prep channel is "defending" the university system in the US), so I find that both odd and a bit unfair given my experience. As for the culture of blindly cutting costs, I partially agree with you. I think many companies (and consultants) do indeed have poorly structured incentives that make them do "dumb" cost cutting (aka: long-term unwise), but at the same time I think there's more bloat than ever in the average corporation. It's a weird conundrum.
@kkw9160
5 жыл бұрын
To cut out the revenue Problem @3:51 was inaccurate. Revenue is x • p - so it could be the pricing but it is not - but it could also be the (x) the amount of Sales. It is possible to optimize sales or marketing strategy, you have to look at the activitys regarding Marketing & Sales from your competitors. It could also be a production Problem in Terms of undercapacitive manufacturing....
@VinitTibrewal
5 жыл бұрын
Taking sales into consideration would have been ideal if they were discussing revenue problem. But revenue has actually increased. So sales is not a problem. They are discussing the shrinking profit margin problem, which is dependent on cost, unless you've lowered your prices.
@kkw9160
5 жыл бұрын
Vinit Tibrewal It could also be caused by undercapacitive manufacturing.
@joannerizkallah176
4 жыл бұрын
@@VinitTibrewal how does decreasing price affect the cost
@BM10543
3 жыл бұрын
Great video, this seems like cost accounting.
@sauravraychaudhuri7474
3 жыл бұрын
This is really great! I would love to learn more from these case studies.
@glebkarpenko6467
5 жыл бұрын
Thanks so much guys for all the stuff you do! Hopefully will see more in a nearest future
@CraftingCases
5 жыл бұрын
You're welcome! We will publish more videos from time to time, but for now, check out our free course as there's a ton of content there!
@romyhaidar7781
5 жыл бұрын
I really apreciate what hv u done! Telling us profitability case study. Hopefully i can join McKinsey Consultan for my journey. Amin
@hellghard
5 жыл бұрын
Great video, great content! Keep up the good work!
@CraftingCases
5 жыл бұрын
Thank you hellghard. We'll keep doing more videos such as this one. If you have any suggestions on what other topics we can tackle, let us know!
@ericdew2021
4 жыл бұрын
I question why the automobile company would ever need the help of a consulting company, such as McKinsey or Bain to help figure out this situation. This is something that the company should be looking at, and not just at that time. It would be monitored day-in, day-out, quarterly and yearly. There should be no entity understanding this more than the automobile themselves. Cost containment is definitely something that companies can do. What's usually harder is understanding revenue. That's often where an outside consultant can come in to give fresh insight to buying preferences of the market.
@CraftingCases
4 жыл бұрын
Hey Eric, You're right in the sense that nowadays companies rarely need help to figure that out. In the past, it used to be more common to call in management consultants for these tasks as data storage, collection and analysis was trickier. Still, firms still use these cases as they're good to test a candidate's reasoning skills (think of it this way: if you can't work your way through a problem like this in a structured, methodical and efficient fashion, you likely won't be able to solve more complicated problems). And one more thing: you'd be surprised how many companies (even big ones) have their cost accounting messed up. I've personally seen it a couple times and heard of about a dozen situations where companies thought a certain line of product was highly profitable, only to hire McKinsey and find out they were losing money on every sale. It's not common, but far from unheard of.
@ericdew2021
4 жыл бұрын
@@CraftingCases For sure. Often, for large companies, especially ones that grew quickly, when they grow so fast and their expenses also grow fast, they don't recognize the forest because of the trees. Also, they don't know whether they're off or not if they don't have other similar companies to compare to, and unfortunately, other companies aren't going to offer their internal cost data to let you compare. Consulting companies can offer generic data that they collected to help identify where costs are higher than they should be. In that aspect, consultants can bring value.
@CraftingCases
4 жыл бұрын
@@ericdew2021 Yep, what's also common is companies that do their accounting focused on minimizing taxes. That usually has attribution models that are less than optimal for managerial purposes. Only the best companies have both types of accounting in parallel and that misleads decision-makers.
@ericdew2021
4 жыл бұрын
@@CraftingCases Sort of like Robert McNamara's folly of applying operational discipline in automotive manufacturing and sales to prosecuting a war in the Southeast jungles.
@Aig182
5 жыл бұрын
Thank you so much!!!! Very good case interview!!! Really impressed!!!!
@CraftingCases
5 жыл бұрын
Glad it helped Aigulya!
@juliocesar48
3 жыл бұрын
Great material, congratulations! And of course, thanks for sharing.
@Regina1800
4 жыл бұрын
Initial assessment should focus on units produced vs increase in costs , then he should check the cost per unit not just the absolute numbers. If cost per unit is going up then focus should be on supply chain/ cost reduction measures.
@gajendrakc813
4 жыл бұрын
It's an excellent video and was really insightful. One thing I would like to say is, since the interview is based on a real life business scenario , addition mistake shouldn't "put him in trouble" as said in the video. In real life, such problem solving is done using a computer or a calculator after collecting all relevant data. Also, we are so used to doing our calculation using electronic devices that an addition error should be that much of an issue. At this level , that shouldn't be that big a deal coz in real world we no longer do the calculations using just pen and a paper.
@blakelee2913
5 жыл бұрын
Great video, and it's a very good decision tree process that you've gone through. I would suggest however for future videos to pick numbers that are actually representative of what the figures you describe, i.e. the increase in profitability from 21 to 22.5 and costs from 20 to 22, does not actually represent a starting profitability of 5% and 2.5% respectively, but rather slightly less.
@liangyang9144
Жыл бұрын
Exactly, that would be from 4.8% to 2.2%
@sanghamitradhara8330
5 жыл бұрын
You guys are just awesome! Very insightful. Could you please do some cases on business model and financial models?
@CraftingCases
5 жыл бұрын
Glad you liked it! What do you mean by cases on business model/financial model? We're not currently recording anything, but once we go back to it we may incorporate.
@ishitam2406
4 жыл бұрын
Can't we directly ask the interviewer about the segments. Instead of predicting the segments and the interviewer giving us the actual one
@juanmanuelsantamaria2280
5 жыл бұрын
Clever! Suppliers increased costs and they're being transfered to us, not obvious
@CraftingCases
5 жыл бұрын
Glad you liked it juan!
@olegviatkin5674
Жыл бұрын
These guys are legit, diamonds on youtube
@tulsimahanto5539
4 жыл бұрын
Now i understood why math is asked in MBA entrance exams
@conlomerate4841
4 жыл бұрын
Why did you guys stop making videos? This was golden. Please keep it on.
@CraftingCases
4 жыл бұрын
We still make videos, but mostly in our own platform. Highly recommend you join our free course. There are 30-40 videos there organized in a way that will actually help you improve your skills!
@AyushBehlPGP-Batch
2 жыл бұрын
Very informative and structured video. Really good.😀
@fishyfact7260
3 жыл бұрын
Just a few thoughts on it: why did he made all this calculations? Material costs in absolute numbers gives us nothing useful. Why just not to calculate material costs per unit sold?
@listigerlurch2575
3 жыл бұрын
Thank you very much, this helps me a lot! However, I think it's kind of ridiculous that he has to calculate 65% of 11.44 in his head. No one would do that in reality... Of course you should be able to do simple math without using a calculator - like 5% of 42 etc. But telling that he would be "in trouble" if he wouldn't correct it after you would have given him a hint is just punctilious. Are you looking for a consultant or a new member in your "Mathematical Olympiad" team?
@mohitforimprovement
3 жыл бұрын
You know what they say...maths and logic is something that you need to master in order to sit it consulting companies
@kyrieloberiza6923
4 жыл бұрын
what's the point of not using a calculator?
@dhidhi1000
4 жыл бұрын
To amuse the interviewer and feed his ego with feelings of superiority while he watches the interviewee struggles and humiliates himself with meaningless math? Just kidding, they probably initially thought it was good to test mathematical intuition but it's actually a terrible idea, plus they just don't care.
@kyrieloberiza6923
4 жыл бұрын
@@dhidhi1000 probably thinking the chinese are good at business while using the abacus. so then there would not be any way of becoming better than the chinese than not using any instrument at all.
@jimmyjames2980
3 жыл бұрын
thank you guys, these are extremely helpful!!
@ved.shankar
3 жыл бұрын
Hey guys great case! One doubt when Bruno was presenting his structure though. He had clarified that revenue was not a focus for the case and costs were important instead. Can we do that in the beginning of the case itself? I guess he was scoping out what to focus on in his structure
@kennethskjttstagistoft7203
2 жыл бұрын
Inventory increase can alleviate the supply chain uncertainty. And the good news is that this can be done cheaply as the cost of capital these days are negliable.
@johannEZ-lv7ol
4 жыл бұрын
so much value here! Thank you!
@sancharighosh2817
11 ай бұрын
Is there a reason why the candidate here is calculating the exact numbers? Because from the data it is clear that auto part is the pain point here as it is the only one whose price increased. Without calculating the exact amount also we could have figured out that auto part is the problem here. Kindly explain.
@shubhamkanodia2897
4 жыл бұрын
Not just consultants, they are bloody good actors
@tusharprasad2734
3 жыл бұрын
Starts at 0:47
@ngedwin6174
3 жыл бұрын
Damn... I have never get on such interview but thank god, it didn't happen to me yet. Structured thinker or not, this is going to take much practice to hit it right. I don't see why mental calculation part should be a big problem, in fact I would have use my mobile calculator app,(or my financial calculator in the bag) not great for impression but better than making mistakes? Thanks for this video.
@arwinderveersingh3969
3 жыл бұрын
I couldn't understand "fixed costs of developing new suppliers". If we're going to outsource our supplies then won't it be a variable cost? Because outsourcing manufacturing is normally done to change fixed costs into variable costs. Please tell me where I'm wrong.
@Sergeo333
5 жыл бұрын
This is sooo fun!!! Like D&D
@Anonymus54742
4 жыл бұрын
Material cost has increased because number of cars sold has increased!! Revenue increased --> price and product mix remains same--> so car sales has increased. Require more material to produce more cars. Do we need further investigation around material costs?? Any opinion!
@CraftingCases
4 жыл бұрын
If that were the only reason, profit margins would’ve gone up, not down.
@ayobamimarcusolasupo6783
4 жыл бұрын
Excellent! Thanks for doing this.
@kamarthikarthik
4 жыл бұрын
one thing was missed in this discussion though. He tried working on cost reduction which is a viable one. However they could have concentrated on increasing revenues through various ways
@CraftingCases
4 жыл бұрын
The idea is to prioritize the most effective action. Increasing revenue is great but not that effective if your margins are low due to higher variable costs
@yunqiangtan2147
4 жыл бұрын
I’m unsure but didn’t the labour cost not increase ? Still at 20% and why will the interviewer say the union came in and cost increase all throughout the USA??
@Flowerlifts111
3 жыл бұрын
If i was asked how I would improve the interviewee's performance.. would be general body language, and more firmer toner in his speech. As consultants, we should exert a more leader like aura
@user-vw7bx9ll8n
3 жыл бұрын
agree, i don't think his manner or demeanour was attractive to a potential employer. His speech also seemed slow and monotonous. no personality in his delivery. In an Australian or UK MC interview he would be marked down
@muneebahmad6518
3 жыл бұрын
If the problem statement included profitability why did you go with profits? Aren't those two different?
@thedevilsadvocate3710
4 жыл бұрын
Interesting, it's all accounting. It's a lot simpler than I thought! I always thought that well run companies would be doing audits of its financials on a quarterly or semi-annual or annual basis. It seems that some businesses don't have the resources or foresight to employ such procedures in their company.
@CraftingCases
4 жыл бұрын
All business do to a certain extent. It so happens that accounting doesn't necessarily give you what you need for managerial purposes. Most importantly, this is an interview, so it's a test of your ability to get the relevant data at the expense of everything that doesn't matter. It doesn't mean that real engagements don't go deeper than this.
@mab06
4 жыл бұрын
Not really. I got bored and didn't watch it all but if I was hiring a consultant it wouldn't be for their ability to do simple mental arithmetic to 2DP. I wouldn't need a consultant if that was the issue.
@ericromano5382
3 жыл бұрын
Great job! Very reallistic!
@usmanwaqar8737
5 жыл бұрын
Best video - please make more case videos.
@danielpintjuk
5 жыл бұрын
Why do you need a business consultant to do this, couldn't any C-suit do this analysis? If they can't, what good are they?
@CraftingCases
5 жыл бұрын
Most can, but it’s not worth their time so they’d rather hire someone to do it for them. Plus the fact that they can doesn’t imply consulting firms should hire people who can’t. Plus real projects involve more things than a 30 minute case, but they still have to check your skills somehow before they hire you. In other words, you’re right, but that’s not the right question.
@CraftingCases
3 жыл бұрын
The quickest way to learn to solve cases better is by taking our free course at www.craftingcases.com/freecourse. You'll learn the 6 Building Blocks to solve any case, learn a step-by-step process to solve each of them, and get tons of video practice drills to internalize the techniques.
@reza3275
3 жыл бұрын
The guy with white shirt is born to be a consultant
@marinacarvalho6433
5 жыл бұрын
Muito bom!
@nasiahuma6748
2 жыл бұрын
excellent video and a very nice approach to solving. I would like it if I am allowed to use a calculator in the age of technology and data science :)
@CraftingCases
2 жыл бұрын
On the job you can use it if the situation allows. In the interview, they want to test your numeracy/comfort with numbers because the situation doesn't always allow it. Two examples: #1: You're in a meeting with finance execs who all do mental math, and you don't want to be the expensive consultant who slows the meeting down because you can't do it. #2: You're reviewing a presentation filled with tables/charts and want to do quick math with the numbers to reality check them and potentially catch any mistakes (you could use a calculator, but it's faster if you can do it in your mind and fast matters when you're reviewing a large doc especially if it's in a room with other people). I know it's a bit frustrating, but it's a bit like business sense -- you could, on the age of Google, learn about all sorts of industry-specific facts/practices at the tip of your fingers, but there's something to be said about having it in your mind and there's value in being fast.
@rishikamalik4752
5 жыл бұрын
What about time taken in setting up production in China? And training the Chinese factories in the production process could be a fixed cost
@CraftingCases
5 жыл бұрын
This could be an issue and it would've been a good idea to raise that in the interview. The suppliers can probably produce parts already as they do so to this company's competitors, but it could be the case that we have some slightly different parts that need different production facilities and/or different training.
@rishikamalik4752
5 жыл бұрын
@@CraftingCases yes thanks I was just building further on the fixed costs and operational consideration you mentioned would be required to be taken into account while deciding whether to go to China. Thank you so much
@charlietindill6430
2 жыл бұрын
Excellent, thank you for sharing
@yuthpatirathi2719
5 жыл бұрын
Fantatstic Job man ! really helpful
@pidansolo
2 жыл бұрын
This is an amazing video!!! TY!!!
@andreacostanzo1632
3 жыл бұрын
What’s the point of not having a calculator like there is on any desk in any office? Or open a spreadsheet like in any office? 🤌🏻
@sarathgopinath3096
4 жыл бұрын
Total costs have increased by 2bn. But in the breakdown, the only cost increase is 1.44bn. So what about the rest? Am I missing something?
@mathieugiordano1003
5 жыл бұрын
Is being that precise in the calculation is a must-do? can't we just assume that for example 11.44 = 11.5 or 1.144 = 1 ?
@CraftingCases
5 жыл бұрын
You can always ask the interviewer. There is a nuance, though... Most would be ok with rounding 11.44 to 11.5 (tiny difference) but wouldn’t really like that you even asked to round from 1.144 to 1 as that is a 14.4% difference and will most likely change the results and recommendations. They’d expect you to see that this was the case before asking. The fact that you wouldn’t do this mental assessment of whether the difference was likely to change the recommendation before asking signals to them that you’re only trying to make your life easier, not giving the best advice possible while being 80/20.
@coffeestrudel225
2 жыл бұрын
Its insane to think about these in a matter of minutes
@CraftingCases
2 жыл бұрын
I thought so too when I was starting out. It’s a mix of technique, practice and pattern recognition.
@coffeestrudel225
2 жыл бұрын
@@CraftingCases getting my hands on every resource i can find to get to where you guys are. Is there a MECE framework for the types of case studies used by consulting firms?
@yizhouz6825
2 жыл бұрын
super great content thanks guys. I have one question. someone advised me to lay out a framework rather than an issue tree in the beginning for the profitability problems. so that framework would include financial factors (revenue/cost) and non-financial factors (supplier, company etc). My concern is that if I lay out this extensive framework before I tackle the problem, wouldn't the framework be not specific enough as I haven't identified it's a revenue or cost problem or not? what are your thoughts? thanks in advance!
@christhames8731
Жыл бұрын
Well yeah mate surely laying out the framework first nd then rooting the issue tree in it helps us configure the fine tune in analysis nd thus give us a deep insight into aggregate modular factors allowing us to rectify or transform it with near perfection and also a robust workout on multi dimensional approaches of the mega factors like audit assurances taxes finances supply resiliency on a quantum celluloid quantum deriving fluid efficiencies too..
@proudlycanadian3023
2 жыл бұрын
Great interview!
@counterpoint9260
5 ай бұрын
you dont need a MBA from Sloan to solve this..just common sense..i didnt see any technical wizardry here, just progressive narrowing down to the root cause
@CraftingCases
Ай бұрын
Absolutely true. All you need is structuring skills, a data-driven thought process, and reasonable business judgement. In reality, even the MBAs have to train to hone these skills.
@CimolOk-nz5yj
2 ай бұрын
🎯 Key points for quick navigation: 00:00:00 *🎥 Introduction and Case Overview* - Introduction of the consultants and the case scenario, - Explanation of the case: a U.S. auto manufacturer facing profitability decline. 00:02:05 *🔍 Initial Clarifying Questions* - Clarifying competitors' profitability and industry context, - Establishing the client's market and product range. 00:04:02 *📊 Identifying the Core Problem* - Differentiating between revenue and cost problems, - Reviewing revenue and cost trends to identify cost increase as the core issue. 00:06:57 *🏭 Cost Structure Analysis* - Breaking down cost categories (materials, labor, factory, indirect costs), - Noting specific changes in cost percentages and identifying materials as the main area of concern. 00:09:08 *🧮 Deep Dive into Material Costs* - Analyzing which materials contributed most to the cost increase, - Performing calculations to confirm the significant rise in auto parts costs. 00:12:56 *🛠️ Investigating Auto Parts Costs* - Generating hypotheses on why auto parts costs increased, - Exploring factors such as supplier pricing, negotiation, and supply chain changes. 00:17:40 *🌍 Considering Outsourcing to China* - Discussing the potential shift to Chinese suppliers, - Factors to consider: cost, quality, supply chain predictability, risks, and alternatives. 00:24:42 *✅ Evaluation and Feedback* - Feedback on the analysis and recommendations, - Emphasizing key learnings and areas for improvement in problem-solving approach.- 00:00:00 🎥 Introduction to the Case - Giulio introduces the purpose of the video: showcasing a real case interview scenario, - Bruno is introduced as an ex-McKinsey consultant. 00:00:52 *📉 Problem Statement* - The client is an auto manufacturer in the U.S. facing profitability issues, - Competitors' profitability has increased while the client's has decreased. 00:02:14 *❓ Initial Clarifying Questions* - Bruno asks about competitors' profitability trends, - He inquires about the client's market segment and geographic focus. 00:04:02 *💲 Revenue vs. Cost Analysis* - Bruno determines whether the problem is due to revenue or costs, - It is identified that revenues have increased slightly, but costs have risen significantly. 00:06:14 *🔍 Cost Breakdown* - Detailed examination of cost categories: materials, labor, factory, and indirect costs, - Material costs have notably increased, identified as the primary area of concern. 00:08:00 *🛠️ Analysis of Material Costs* - Bruno breaks down material costs into specific components like steel, auto parts, plastics, and others, - Auto parts are identified as the major contributor to increased material costs. 00:12:56 *🔍 Focus on Auto Parts* - Deep dive into why auto parts costs have increased, - Hypotheses include increased quantity of parts, higher costs per part, and changes in suppliers. 00:17:40 *🌐 Considering Outsourcing to China* - Evaluating the possibility of outsourcing auto parts to China, - Factors include cost, quality, supply chain predictability, and risks. 00:24:42 *🎯 Final Analysis and Recommendations* - Comprehensive evaluation of outsourcing factors, - Considering alternatives like developing American suppliers, negotiating with unions, and other countries. 00:26:02 *💡 Feedback and Lessons* - Feedback on Bruno’s performance and areas for improvement, - Emphasis on understanding the client's problem before diving into solutions. 00:27:52 *🎯 Approach to Solving Profitability Issues* - Step-by-step method to address profitability issues, - Identify root causes: whether it's a cost problem or a revenue problem and pinpoint the specific product line or region, - Develop solutions for identified problems and explore other drivers if direct solutions aren't found, - Quantify the potential impact of each solution and assess its practicality and strategic fit. 00:29:24 *📚 Additional Resources and Course Promotion* - Mention of a video specifically addressing profitability case interview tactics, - Introduction of a free course on case interview fundamentals, focusing on teaching candidates to think like consultants rather than memorizing frameworks, - Encouragement to subscribe to the channel for more content on case interviews and consulting strategies. Made with HARPA AI
@rachelwatsky683
4 ай бұрын
Is doing the math for steel, plastics, and other really necessary considering how they all decreased in percentage?
@CraftingCases
Ай бұрын
You could get away with not doing the math, but you'd need some reasoning. They decreased in % but still might have increased in absolute. So you'd need to indicate that you can see the cost increase from the other already covers the profit decrease.
@RubenGonzalez-nr6bz
4 жыл бұрын
Could someone explain what he means at 14:45 when he says The company is paying more per part because of the supplier making more money? Isn’t it obvious that if the supplier increases the prices they charge to us they will increase their margin? Or does he mean the supplier increased their margin and THEN they increased their prices? That second scenario is what can’t make sense of.
@guilhermehambrusch7064
4 жыл бұрын
Hey Julio and Bruno, I have a question for you guys. In the course, you explain that we should take some time to structure the issue tree or conceptual framework. So, in case it is an algebraic structure like in profitability cases, it is better to structure it along with the interviewer like Bruno did rather than take some minutes to structure it all? I mean, asking data on CostXRev before structuring the whole tree?
@CraftingCases
4 жыл бұрын
Both work well for issue tree drill-downs if it's a candidate-led case.
@annromey4963
5 жыл бұрын
This is great! Thanks so much!
@2007vivek
3 жыл бұрын
Nice Video. Can you also share some case study on e-commerce category selection ?
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