Darden Casebook 2020

Darden 2020-2021
Casebook
Not for External Distribution
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C O N S U LT I N G C L U B AT D A R D E N – C A S E B O O K
TABLE OF CONTENTS
Second Year Recruiting Overview 3 Case Name Firm Style Round Industry Page
Alpha Aviation McKinsey 2 Aviation 9
Industry Overview 9
The Big Shot Bain 1 Entertainment 22
Darden Casebook 19 Food Frenzy IDEO N/A Retail 34

A Hairy Ordeal Bain 1 Retail 44
Acknowledgements 124
Lizard Insurance Bain 1 Insurance 55
Met With Problems BCG 1 Non-Profit 65
A Messi Decision BCG 1 Sports 74

New Rubber Plant AT Kearney 2 Industrial 83
Investment
PubU McKinsey 1 Oil + Gas 92
Whale Hotel McKinsey 2 Real Estate 101
2
Second Year Recruiting
Overview
3
SECOND YEAR RECRUITING
THOUGHTS ON FALL RECRUITING
• Expect Competition – very high intern conversion rates this summer;

limited spots available and only in specific offices (for certain firms); but
other firms only recruit for full-time positions
• Know your Value Proposition – create your personal brand to be

adaptable (think practice areas, boutiques, etc.) so you can pivot as a
variety of opportunities arise for which you may be a strong fit given your
interests and experiences
• Stay flexible – expect excellent opportunities (through job postings or

OGR) coming in the winter/spring as companies decide to wait until they
have a clearer financial picture before hiring
4
OVERVIEW OF FALL
ON-GROUNDS RECRUITING
(CONTINUED)
Full-Time MBA Recruiting Fall 2020
Student Employer Schedule
Interview Student Bid
Fall 2020 Day: Resume Day: Invite List Day: Day: Available to
Dates Deadline
Deadline Due Employer
Week 1 Oct 5 - 6 MO 21-Sep TH 24-Sep TU 29-Sep TH 1-Oct
EXAMS Oct 7-11
Week 2 Oct. 12 - 15 MO 28-Sep TH 1-Oct MO 5-Oct TH 8-Oct
Week 3 Oct. 19 - 22 WE 30-Sep TU 6-Oct MO 12 Oct. TH 15-Oct
Week 4 Oct. 26 - 29 TU 6-Oct TH 15-Oct TU 20-Oct TH 22-Oct
Week 5 Nov. 2 - 6 WE 14 Oct. TU 20-Oct TU 27-Oct TH 29-Oct

Week 6 Nov. 9 - 13 WE 21-Oct TH 29-Oct TU 3-Nov TH 5-Nov
Week 7 Nov. 16 - 19 WE 21-Oct TH 29-Oct TU 3-Nov TH 5-Nov
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WHO’S INTERVIEWING?
On-Ground Interviews Key Considerations (check DCL for latest information)
Accenture • Office hours 9/10; SY Career Fair 9/10; interviews on 10/5
Alix Partners • Well known in the restructuring/turnaround space

• SY company briefing 9/21; office hours 9/24
Bain • Application deadline 9/15; virtual first round interviews managed by offices
BCG • Application deadline 9/1; virtual first round interviews managed by offices
DHL Consulting • DCL job posting
Everest Group • SY Virtual Connect 9/9; job posting on DCL

• Known for IT-enabled business breakthroughs in strategy, execution, and digital transformation
EY (SC&O and TT) • SY Virtual Connect 9/1; Tech Transformation and Supply Chain are typical roles available; Interviews 10/1
Note: All events subject to change so check DCL often!

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WHO’S HIRING? (CONTINUED)

On-Ground Interviews Key Considerations (check DCL for latest information)
Fidelity Business Consulting • SY Office Hours 9/14; Interviews 10/20
Innosight • SY Office Hours 9/28; Interviews 10/20; Boston-based innovation consulting boutique
L.E.K. Consulting • SY webinar on Aug 26th; Current posting in DCL
McKinsey • No events prior to 10/5 interviews
Oliver Wyman • Hires into functional areas; current posting for Life Sciences/Healthcare and Energy practice
Samsung Global Strategy • ~ 4 yr. rotational program based in Korea and then regional HQs; strategic project-based work
• SY Virtual Connect 9/22; interviews likely in Oct.
Siemens Advanta Consulting • FY and SY Company Briefing 9/29
ZS Associates • FY and SY Company Briefing 9/24; Office Hours on 9/24; interviews 10/20
• Research-oriented marketing/research/analysis service offerings across multiple industries
Note: All events subject to change so check DCL often!

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WHICH FIRMS HAVE ROLES OPEN TO

INTERNATIONAL STUDENTS THIS YEAR?
International International
Company Name Company Name
Hiring? Hiring?
AlixPartners Yes Accenture No
Bain Yes Innosight No
BCG Yes Oliver Wyman No
DHL Consulting Yes ZS Associates No
Ernst & Young Yes
Everest Group Yes
Fidelity Business Consulting Yes
LEK Consulting Yes
McKinsey & Company Yes
Samsung Global Strategy Group Yes
Siemens Advanta Consulting Yes
Note: Subject to change so check DCL

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Industry Overview
Please note that these are commonly tested industries; This list is not exhaustive
of all the industries tested
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Industry Overview – Consumer / Retail
Key Industry Trends Important Calculations
• Digital Marketing: CPG (Consumer Packaged Goods) companies are pivoting to digital marketing
solutions like Facebook and YouTube more than ever for smarter and more targeted advertising. 1. Inventory Turnover:
• Big Data: Consumer companies & retailers are ramping up the use of consumer shopping behavior data
now more than ever to create curated/ personalized shopping experiences and targeted advertisements = (Sales / Inventory)
• Retail Omnichannel: Large brick & Mortar retailers are pivoting to an “order online, pick-up in store” mix
while also building out their online fulfillment capabilities to cater to the consumer. and keep up with
Amazon). Store foot-prints are also getting smaller to reduce inventory
• Private Label & Amazon Effect: Private label consumer products are eroding market share of large name
2. Gross Margin:
brand products. This is partially driven by “the Amazon effect” of quick and cheap replacement
fulfillments. -Brand loyalty is getting harder and harder to win.
• Direct to Consumer vs. In-store Experience: Brand names are slowly shifting resources to sell directly to = (Revenues – COGS)
consumers as some retailers struggle. Retailers with large brick & mortar footprints are focusing on in- Revenues
store experiences to attract customers
Important Terminology
3. Contribution Margin (CM):
• SKU: Stock Keeping Unit – Refers to a unique item sold in a store
• In-stock: Percent of items that are on the shelves and available for sale vs. what the total display can = (Sales – Variable Costs)
hold
• CRM: Customer Relationship Management: Strategy & tools designed to boost profitability and
CM Rate = (CM)
strengthen customer loyalty by using data – also the name for software that facilitates this
• Loss Leader: Merchandise sold at a loss to attract new customers or stimulate other profitable sales
(Sales)
• Mark-up: Percentage added to the cost of product to get selling price
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*Please note that not all trends, terminologies, and calculations are listed above
Industry Overview – Energy
• Clean Renewable Energy: Wind, solar, and biomass power are increasingly replacing the use of fossil
fuels in developed and developing countries with some projections indicating 80% of the worlds energy 1. Return on Investment (ROI)
needs being met by renewable energy by 2050
• Technology: Advancements in drilling techniques like “fracking” and horizontal drilling have significantly = (Profits – Cost of Investment)
boosted the output of US oil companies and substantially reduced the cost and risks associated with Cost of Investment
drilling for oil
• Shale: Newly found abundance of shale basins in the USA has helped to boost US oil production output
and has almost eliminated US dependence on foreign oil
2. Breakeven Point
• Natural Gas: Given its cheap and abundant supply, natural gas has become the primary source of energy
in the US, replacing crude oil and coal
• (Important) Petroleum Products: Gasoline, jet fuel, natural gas, fertilizer, plastics, detergent, propane, = ______(Fixed Costs)____
diesel, lubricant Contribution Margin (CM)
Important Considerations:
• Upstream (E&P): Exploration and Production – Process involving the finding, drilling, and producing
of crude oil and natural gas or liquified natural gas (LNG) • Transportation / Distribution costs
• Midstream: Focuses on the processing, storage, marketing, and transportation of oil and natural gas. • Storage Costs
(Most pipe-line companies fall in this category) • Production Costs: Labor + Materials
• Downstream: Includes oil refineries, petrochemical plants, petroleum products distributors, retail • Plant Development Costs
outlets and natural gas distribution companies • Depreciation & Taxes
• OPEC: Organization of Petroleum Exporting Countries – Cartel of 14 nations that coordinate • Overhead
petroleum policies. –Often influences output and thus oil prices
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Industry Overview – Transportation
• Airline Capacity Additions: Airline ticket prices have been steadily on the decline driven by companies
adding more routes to cities across the globe –led by low-cost carriers such as JetBlue, Southwest 1. Potential Savings by Switching
• Fuel Efficiency: Airline companies have been investing heavily in upgrading their fleet to more fuel Equipment
efficient aircrafts to reduce their biggest cost driver
• EV (Electric Vehicles): Auto manufacturers are all racing to create battery powered vehicles = {New Profit – Old Profit} or
• Autonomous Vehicles: Autonomous vehicles are expected to hit the road as early as 2019 and will cause
major disruption to auto manufacturers, bus systems, taxis, insurance companies
{ [(New Capacity x Price) – (New
• Shortage of Truckers: Transportation companies have been struggling to keep up with the booming
efficiency x cost)] – [(Old Capacity x
demand for cargo shipments due to a massive shortage of truck drivers –thus causing significant
increases in labor costs
Price) – (Old efficiency x cost)]}
• Load Factor: Measures the capacity utilization of transportation services and is equal to the average
actual utilization divided by the maximum capacity Important Considerations:
• PRASM: Passenger Revenue per Average Seat Mile –Or RASM (revenue) is the revenue generated per
available set miles in which ASM = number of seats available x number of miles flown. • Gasoline / Fuel Prices
• Logistics: The detailed coordination of complex operations involving many people, facilities, or supplies. • Carrying Capacity
• FOB: Free On Board –Represents the point at which the sale of a freight cargo is considered complete. • Range / Distance
“FOB shipping” means ownership is transferred once the product is shipped of, “FOB shipping point” • Destination Routes
means ownership is transferred once the product is delivered • Maintenance Costs
• LTL & FTL: LTL (Less than Load) – Small freight that doesn’t fill a truck which is generally more expensive • Depreciation
to ship, (FTL) Full Truck Load) – Large shipments that fill a trailer and are thus cheaper to ship
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Industry Overview – Manufacturing / Agriculture
• D2C: Direct to Consumer: More manufacturers are leveraging their own sales platform to market, sell,
and ship their products to the customer rather than use third party distributers or retailers to boost 1. Potential Savings with New
profitability Equipment
• Data Driven Analytics: Manufacturers are using predictive analytics and algorithms to improve product
design, optimize production cycles, and improve demand forecasting = (New Equip. Expenses – Old Equip.
• Trade-war & Tariffs: In response to the US tariff on steel and more, Canada, the European Union, and Expenses)
China have all implemented retaliatory tariffs of close to 25% on agricultural and automobile goods
produced in the US. [(Old Time x Old Labor) + (Raw Material
• Sustainable Food Systems: Vertical farming has been a growing trend in urban locations to minimize Cost x Old Quantity) + Old Depreciation)]
environmental foot-prints and bring produce to major cities
- [(New Time x New Labor) + (Raw Material
Important Terminology Cost x New Quantity) + New Depreciation)
• (JIT) Just-in Time Inventory: “Pull demand” inventory system in which assembly materials and support
items are delivered as needed to minimize raw material inventory Important Considerations:
• Commodity: An interchangeable non-differentiated product or material that is sold freely. (Most
agricultural products are commodities) • Raw Material Costs
• Bottleneck: The resource in a manufacturing process that is working at max capacity and thus limits the • Labor & Wages
output of the entire production • Capacity Constraints / Bottlenecks
• Bushel: A unit of dry measure (1 cubic foot) for grain, fruit, etc., equivalent to 8 gallons of liquid • Commodity or Not?
• Out-source: Process of contracting an outside party to complete a production or service task for a • Overhead Costs
business. –Typically done to save cost or due to a lack of expertise • Supplier & Buyer Relationships
• Depreciation
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Industry Overview – Financial Services
• AI, Block-Chain & Crypto Currencies: Digital distributed ledgers offer a cheaper and more efficient way
for firms to verify and facilitate transactions. Crypto currencies have proven themselves to be an 1. NPV (Net Present Value)
alternative set of asset investments that rival equities, precious metals, and debt holdings
• Digital-Only Banks & Payments: The prevalence of more digital transactions have eroded the need for = (CF) x ___1 ___
cash for most daily use, which has in turn lead to the proliferation of online banks that offer higher (1+i)n Where n = # of periods
savings account interest rates and comparable services
• Financial De-regulation: Congress passed legislation easing some of the restrictions from Dodd- Frank
2. Pay Back Period
that exempts smaller banks from certain capital requirements which frees up room for more loans
• More Transparency in PE Funds: With greater pressure to produce results that outperform their
benchmarks, more PE investors have been demanding greater transparency within their funds and firms
= _____(Fixed Costs)_______
have been using transparency to attract investors Contribution Margin (CM)
• AUM: Assets Under Management: Market value of all the financial assets that a firm manages on
behalf of all of their clients and themselves. –Includes capital raised by investors and leaders of a firm • Current Portfolio
• Private Equity: Composed of investors and funds that invest directly into private companies or • Exit Strategy & Time Horizon
convert public companies to private companies to improve the target company’s operations and • Acquisition Price
financials with the goal of extracting a financial return from the company and reselling it another firm • Employee & Customer Relationships
or the public at a profit • Market Trends
• M&A: Mergers & Acquisition: Mergers are when two companies comes together to make a new • Tax & Regulatory Implications
entity (Dow Chemical & Dupont) = DowDuPont, while an acquisition is where the smaller company is • Client Risk Profile
consumed by the larger company (Amazon + Wholefoods) = Amazon
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Industry Overview – Information Technology
Key Industry Trends
• Artificial Intelligence (AI)/ Machine Learning: Artificial intelligence is the ability for a computer program
Important Calculations
to think and learn. The emergence of AI has enabled the rise of self-driving cars, smart homes, advanced
search algorithms, and smart digital assistants 1. Addressable Market size:
• Cloud Computing: Is the practice of using a network of remote servers hosted on the Internet to store,
manage, and process data, rather than a local server or a personal computer. More companies are Top-Down: Total Population >>> Number
moving to this platform for security, convenience, and cost savings of users >>> Market share >>> # of Units
• Internet of Things (IOT): Smart devices that are all connected and communicate with each other via the per User x Price per Unit
internet are rising in demand due to value of strategic data that they provide
• Blockchain: a digital ledger in which transactions made and recorded chronologically and publicly. –
Bottom-Up: Current Customer Population
Important for security and transfer verification purposes. Ex. include Bitcoin, and other cryptocurrencies
>>> Potential Customer Base (Estimated
• GDPR: General Data Protection Regulation: Data protection regulation protecting privacy for all
using consensus data or industry info) >>>
individuals in the European Union. Future user base x units per user x price
• IP (Intellectual Property): A category of property that includes intangible creations protected by
trademarks and copyrights (e.g. software, code, algorithms, etc.)
2. Customer Acquisition Cost:
• Unicorn: a start-up company valued at more than a billion dollars, typically in the software or
technology sector _______Marketing Expenses_____
• Freemium: A pricing model used by many digital services, a “freemium” model is one where the Newly Acquired Customers (Yearly)
majority of users are able to engage with a product or service entirely for free (perhaps in exchange
for data collection or being served advertisements)
• SaaS: “Software as a service” - a software distribution model in which a third-party provider hosts
applications and makes them available to customers over the Internet –Like Salesforce or Workday
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Industry Overview – Media & Entertainment
Key Industry Trends
• Cord Cutting / Over the Top Streaming: The rise of Hulu, Netflix, YouTube, & Amazon Prime video has left
many to abandon traditional cable and opt for online streaming services to get the content they want
1. Profitability
• Content is King: Media giants have been spending heavily to curate high quality content to hook
subscribers to their service and maintain and grow their subscriber base
(Revenues – Costs)
• Ad-model Shift: Cable advertisement has been trending downward while digital online advertisements
have been trending up. As online viewers opt for ad-blockers, AI and big data are helping marketing (Price x Quantity) – (Quantity x Var. Cost)
agencies personalize advertisements and increase user engagement – (Fixed Costs)
• Augmented Realty (AR)/ Virtual Reality (VR): While still in their early stages, AR and VR capabilities have
been gaining traction in the industry as a way to enhance storytelling and improve sporting coverage
• Music Streaming: The rise of Spotify, Apple Music, & YouTube Music has almost eliminated the physical
disc music market as most artist now prioritize online platforms to release albums and new songs Important Considerations:
• Gaming & E-Sports: The video gaming industry has been one of the fastest growing segments in
entertainment led by mobile gaming and game streaming experiences via Twitch and E-sports. Many • Revenue Factors
video game creators are focused on a “games as a service model” as they monetize video games • Advertising Rev.
overtime by selling in-game customizable perks • Ticket sales (Price x Quantity)
• Merchandising
Important Terminology • Tours / licensing / Endorsements
• Cost Factors
• Digital vs. Linear: Linear is traditional broadcast or cable television. Digital is online (streaming, etc.) • Artist fees
• Ratings: A measure of viewers of a particular program or time segment in television. Nielsen is the • Commission
largest provider of ratings data in the US, but has been slow to provide digital ratings • Promotion advertising
• Box-Office: The total revenue generated by movies shown at theaters • Venues
• Content creation costs
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Industry Overview – Healthcare & Life Sciences
Key Industry Trends
• Wearable Medical Devices: Activity trackers help patients stay more active and healthier on their own
while also monitoring health metrics reducing the need to visit doctors frequently 1. Market sizing:
• Smart Technology & Data: Data on a patient’s background and conditions allow more personalization
options, targeted treatments, and faster recommendations at hospitals Top-Down: Total Population >>> Number
• Gene Therapy: The transplantation of normal genes into cells in place of missing or defective ones in with Illness >>> Number Diagnosed >>>
order to correct genetic disorders. –Growing trend using CRISPR to treat previously uncurable diseases Market share of Drug >>>> (Dosage per
• Price Transparency: As drug companies receive criticism on the rising cost of their drugs, more states are Time Frame) x Price per Dosage = Market
considering independent efforts to improve transparency in drug pricing and cost controls Size per Time Frame
• Government: With the repeal of the Affordable Care Act (ACA), legislation has stagnated on fixing the
rising cost of healthcare and Medicaid in the US, thus leaving a continued rise in insurance premiums
• Bundled payment, episode-of-care payment, etc.: Generally describes paying for the whole treatment at Important Considerations:
once, rather than by individual tests or visits – an attempt to incentivize improved outcomes
• Regulations
Important Terminology • FDA Approvals
• Orphan Drug: A pharmaceutical drug that remains commercially undeveloped due limited potential for • Patent Rights
profitability as a result of a small curable population size • Foreign Government Laws
• FDA: “Food & Drug Administration” Federal organization tasked with protecting and promoting the • Competition / Cannibalization
safety of food and pharmaceuticals in the US. FDA approval is needed for almost all drugs sold in the US • Drug Effectiveness
• Generic Drugs: A prescription drug that has the same active-ingredient formula as a brand-name drug • Cure vs. Treatment
• Time to Market
but sold at a cheaper cost. –Typically occurs when name branded drugs lose patents
• Side Effects
• Biotech vs. Pharmaceutical: Biotech firms use live organisms like bacteria and enzymes to manufacture
• Manufacturing Capabilities
their medicines while pharmaceutical companies primarily use chemicals synthesis • Pricing, Costs (Fixed / Var.), Dosage
• Auto-immune Diseases: A disease in which the body's immune system attacks healthy cells
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Industry Overview – Telecommunications
Key Industry Trends
• 5G Network Service: Next generation of mobile internet connectivity with faster speeds, more reliable
connections, and 100x more bandwidth capacity than 4G. 1. Return on Investment (ROI):
• Network operates mainly on the cloud
• Allows for “network slicing:” Creates separate wireless networks on the cloud for users to have (Future Profits – Cost of Investment)
their own personalized network (Cost of Investment)
• Roll-out may be 2020 in North America due to high infrastructure costs associated with
development
• Network Consolidation: The third and fourth largest cell phone carriers T-Mobile and Sprint are in the 2. Customer Acquisition Cost:
process of merging, a move that will consolidate the telecom market to 3 major players
• Content Integration: High profile acquisition like AT&T of Time Warner and Verizon of Yahoo illustrate a
_______Marketing Expenses_____
push to either get into the content creation game or to build out their advertising network
Newly Acquired Customers (Yearly)
• Carrier: A company that is authorized by regulatory agencies to operate a telecommunications service
system: AT&T, Verizon, T-Mobile
• OEM: Original Equipment Manufacturer – A company whose goods are used as components in the • Regional Competition
• Competitors
product of another company that sells the finished goods to users
• New Entrants
• LAN: Local Area Network: Locally owned and administered data network that runs primarily through
• Barriers to Entry
cables –ex. Ethernet connection • Substitutability
• Fiber Optic: Transmission connectivity via glass strands which are 100x more faster than traditional • Contract lengths & stipulations
copper wires for more efficient cell phone and internet connections • Infrastructure
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Darden Casebook
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C O N S U LT I N G C L U B AT D A R D E N
CASEBOOK INDEX
Case Name Firm Style Round Industry Page
Alpha Aviation McKinsey 2 Aviation 9
The Big Shot Bain 1 Entertainment 22
Food Frenzy IDEO N/A Retail 34
A Hairy Ordeal Bain 1 Retail 44
Lizard Insurance EY – Parthenon 2 Insurance 55
Met With Problems BCG 1 Non-Profit 65
A Messi Decision BCG 1 Sports 74

New Rubber Plant Investment AT Kearney 2 Industrial 83
PubU McKinsey 2 Oil + Gas 92
Whale Hotel McKinsey 2 Real Estate 101
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Alpha Aviation
McKinsey | Round 2 | Aviation
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0 1 | C A S E : A L P H A AV I A T I O N
CASE NAME
McKinsey | Round 2 | Aviation B E H AV I O R A L
INTERVIEW
Prompt: QUESTION:
Your client is a large US-based commercial airline that has lost profitability
and market share. The company is under pressure to regain its foothold in
the industry and grow its balance sheet. Can you brainstorm some areas you 1. Why
would like to investigate on behalf of the airline? McKinsey?
2. What’s your
Clarifying Information: Note: Provide this only if corresponding questions are asked. proudest
achievement?
1. What is the timeline for the project? ASAP – financial investments for the airline typically warrant a payback
period of 3 years.
2. How is the rest of the airline industry performing? Our client’s profitability is declining slightly faster than the
industry – but is in line with other airlines within its class of service.
3. Any specific goals? Take operating margin positive.
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UVA Darden School of Business 2019-20 Casebook
Framework Guidance:
Note: There are many possible alternatives to this framework. These are only provided as possible suggestions.
Revenue Opportunities Cost Management Other Considerations
• Ticket Fares • Upfront Investment • Creation of a new domestic

• Upselling Opportunities • Airport Investment hub
• Cargo Fees • Equipment • Seasonal Risk
• Airline partnerships • Initial Training • Competitive Response
• Credit Card sponsors • Marketing & Advertising • Fuel Efficiency + Prices
• Variable Costs
• Fuel Costs
• SG&A
• Maintenance
How to Move Forward:

The interviewer should identify key revenue and cost considerations for route planning and highlight other potential strategic considerations.
To move forward, the interviewee should call out the existing financial forecasts or market research provided.
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Question 1
The airline has evaluated your options and decided to re-examine and add additional routes. The flight
dispatch office has presented three routes and would like your guidance on which to choose.
Exhibit or Question Guidance:

Show candidate Exhibits 1 and 2 and ask for key strategic takeaways or pros/cons. Interviewer guidance below.
Route 1 Route 2 Route 3
SEA - MINN FAY - DALL NYC - DC
PRO
Potential for Growth PRO
Key: there is no automatic choice – each route
Risk of Disruption PRO has major tradeoffs. You can urge the interviewer
Competition for Route PRO to pick a route and rationalize their choice, OR ask
Time to Establish Operations PRO PRO about any additional data they would want/need to
CON make the best decision. At that point, provide
Potential for Growth CON Exhibits 3 and 4.
Risk of Disruption CON
Competition for Route CON CON
Time to Establish Operations CON
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EXHIBIT 1
Route Map
Route 3
New York → DC
Route 1
200 mi
3 roundtrips/day
Seattle → Minneapolis
120 passenger capacity
1,400 mi
1 roundtrip/day
Route 2
Fayetteville → Dallas
550 mi
1 roundtrip/day
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EXHIBIT 2
Route Research

Seattle → Minneapolis Fayetteville → Dallas NYC → DC
Potential for Growth* Low High Medium
Risk of Flight Disruption** Low High Medium
Competition for Route*** High Low High
Time to Establish Operations 3 months 2 months 12 months
* Projected 5-year increase in passenger volume

** Historical data on flight cancellations due to weather and operations
*** Current competitors flying the same route
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Question 2
Keeping in mind your strategic analysis, the airline has provided financial projections and for each route.
What are your initial reactions to their data? And can you quantify each route’s profitability?

Show candidate Exhibits 3 and 4 and guide them toward creating a financial forecast. Interviewer guidance below.
Exhibit 3 – If time allows, have the interviewer brainstorm potential upfront costs.
Exhibit 4 – Best practice is to combine revenue and cost to get CM/ASM for each route. Interviewee can either weight the
CM based on the projected fill rate OR reference the passenger capacity in Exhibit 1 to get average passengers per route.
Note: ASM stands for Available Seat Miles; standard aviation practice to denote financial metrics.
Forecast calculations on next page.
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EXHIBIT 5 – CALCULATIONS FOR INTERVIEWER

What is the CM potential of each route? What is the payback period?
Route 1 Route 2 Route 3 Route 1 Route 2 Route 3
SEA - MINN FAY - DALL NYC - DC SEA - MINN FAY - DALL NYC - DC
# of Seats per Plane 240 120 120 Terminal Construction $ 100,000 $ 2,500,000 $ 5,000,000
x Average % Filled 90% 60% 80% + Equipment Purchase $ 1,000,000 $ 3,000,000 $ 1,000,000
Average # of Passengers 216 72 96 + Additional Staff Required 10.00 100.00 50.00
x Average Flight Distance (mi) 1,400 550 200 * Training per Staff Member $ 100,000 $ 1,000,000 $ 500,000
A Available Seat Miles (ASM) 302,400 39,600 19,200 D Total Upfront Cost $ 1,200,000 $ 6,500,000 $ 6,500,000
Revenue/ASM $ 0.12 $ 0.22 $ 0.18 Total Upfront Cost $ 1,200,000 $ 6,500,000 $ 6,500,000
- Cost/ASM $ 0.11 $ 0.09 $ 0.12 / Annual CM/route $ 1,814,400 $ 3,088,800 $ 2,073,600
B CM/ASM $ 0.01 $ 0.13 $ 0.06 D / C Payback (Years) 0.7 2.1 3.1
Payback (Months) 8 25 38
ASM 302,400 39,600 19,200
x CM/ASM $ 0.01 $ 0.13 $ 0.06
AxB CM/flight $ 3,024 $ 5,148 $ 1,152
Key: weigh the shorter payback period with the
x Flights per day 2 2 6
riskiness of the investment (passenger availability,
x Flying days per year 300 300 300
competition, start-up time, operational considerations)
C Annual CM/route $ 1,814,400 $ 3,088,800 $ 2,073,600
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EXHIBIT 3
Upfront Costs

Seattle → Minneapolis Fayetteville → Dallas NYC → DC
Terminal Construction 100k 2.5M 5M
Equipment Purchase 1M 3M 1M
Additional Staff Required* 10 100 50
* 10k/person will be required for training
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EXHIBIT 4
Route Financials (Per ASM)
Route Financials per Filled Seat

Revenue Cost
$0.22
$0.18
$0.12 $0.11 $0.09 $0.12

Seattle – Minneapolis Fayetteville – Dallas NYC - DC
Route’s Average
90% 60% 80%
% Seat Fill Rate
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BRAINSTORMING
Your client has identified that attracting business travelers will be key to long-term growth and profitability.
Please brainstorm some ideas on how your client can increase business travelers in the next 3 years.
Brainstorming Guidance:
Note: This is just one possible set of categories and answers. Many more are possible, and interviewers should assess both the volume and relevance of answers.
In-flight amenities External partnerships Flight structure Misc.

• Upgraded WiFi • Preferred status with Concur and • Early morning and late afternoon • Revenue-based loyalty program
other corporate booking sites time slots to accommodate
• Extra legroom and business class business schedule • Perks for Elite Status
cabins (lower price sensitivity) • Alliance networks with smaller,
regional airlines (continuous • No penalty rebook or cancellation
• Priority boarding for business service)
travelers
Best candidates display:

Ability to integrate disparate data on route mapping with brainstorming ideas – i.e. how can the client best design the selected route to appeal
to business travelers in that destination. If time allows, the interviewer should ask the candidate why an airline would grow its base of business
travelers.
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CONCLUSION
To conclude, the interviewee should provide the following:
Recommendation:
• No clear “right answer” – the case is meant to test a candidate’s ability to deal with ambiguity. A good answer will consider
both the quantitative and qualitative advantages of the three routes, and how each aligns with the client’s long-term goals.
The information in the case is purposely spread out and difficult to interpret, so candidates should maintain composure
and organization when providing their final recommendation.
Risks:
• Competitive activity at destination airport – possibility of a price war
• Pending local legislation at destination city – could prevent or hinder monopolistic activity or make airline travel
prohibitively expensive for carriers and passengers
• Decrease in passenger interest in destination cities
Next Steps:
• Regulatory and operational planning schedule to implement route.
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INTERVIEWER FEEDBACK FORM Case Name _________________________ Interviewer ___________________________
Case Book ____________________ Case Type ____________ Difficulty ____________
Case Execution:
❑ Clarifying Questions + Framework
❑ Good Questions
Feedback:
1 2 3 4 5
❑ Structured
❑ MECE
❑ Creativity
❑ Exhibits + Quantitative Ability
❑ Accuracy Feedback:
❑ Speed 1 2 3 4 5
❑ Insights Presented
❑ Errors / Guidance Needed
❑ Brainstorm + Conclusion
❑ Creative & Structured 1 2 3 4 5 Feedback:
❑ Good Business Judgment
❑ Recommendation Strength
❑ Presence & Non-Verbal

❑ Confidence
❑ Poise / Posture
Feedback:
1 2 3 4 5
❑ Clear & Concise
❑ Body Language
❑ Coachability
Total: _____ / 20
33
The Big Shot
Bain | Round 1 | Media/Entertainment
34
02 | CASE: THE BIG SHOT
THE BIG SHOT B E H AV I O R A L

INTERVIEW
Bain | Round 1 | Media/Entertainment QUESTION:
Prompt:
Our client, Lights Camera Action Entertainment (LCA), is a major movie 1. Describe the
production house. After a disappointing summer filled with numerous box best leader with
office flops, the CEO of LCA has approached us to decide which movie the whom
company should release next. you've worked.
Clarifying Information: Note: Provide this only if corresponding questions are asked. 2 . Te l l m e a b o u t
a time when you
1. What is LCA’s business model? LCA is a production house in the US but release movies across major global
markets. They have a distribution network of single and multi-screen theatres and get a share of the ticket sales.
worked on a
2. What movies do they produce? They've been in the business for the past decade and have a good mix of movies project with an
across different genres. undefined goal
3. What happened over summer? The COVID-19 pandemic has wreaked havoc on the movie industry.
4. What is the financial situation of the company? Even though the company did not have a major hit over summer,
or scope.
the company has ample cash reserves from investors. The board has indicated, however, that they expect a hit soon,
or else the CEO will be looking for a new job.
5. Do they have any financial target? The board is concerned about ROI after the recent flops and has classified a hit
as a movie that has an ROI > 50%.
35
Framework Guidance:
Financial Non-Financial
Revenues Costs Internal External
• Number of theaters at • Actors • Sequel of prior hit • Macroeconomic trends
release • Sets • Saturation of series • Actor popularity
• Price of tickets • Special effects • Expertise in a genre • Genre reach
• Fill rate at theater • Advertising • Exclusive deals with actors • Trending theme for the season/pop culture
• Merchandise licensing • Editing • Adaption from popular novels/books • Clashes with other movie release dates
• Sequel potential • Sound • Competition from Netflix and other
• Production Design streaming media

The candidate should recognize that this is a profitability case. Good candidates will also realize that there are other factors
that determine the success of movies.
A good understanding of the breakdown of tickets sales at a theatre level is key to moving forward – the interviewer should
push candidates to get granular while calculating revenue (theaters * seats * fill rate * ticket sales).
Once you get to this point, hand the student Exhibit 1 and 2.
36
EXHIBIT 1
LCA movie options
Total Production Costs Forecasted Theatre

Movie Name Genre
(Millions $) Attendance (%)
Project Huntington Comedy 50 80
Life at Ivy Drama 100 60
Case Wars Action 75 75
Paws at Pav Animation 90 80
37
EXHIBIT 2
Global Movie Industry Statistics
Anticipated Theater Demand By Genre*
Comedy
Drama
Action
Animated
0 500 1000 1500 2000 2500

Domestic International
*Average theater run of 30 days
38
Question 1
• Which of the genres is the most profitable option for the production house?

Hand the student Exhibits 1 and 2. The candidate should realize that they cannot do a profitability analysis without number of seats in a
theatre and price of a ticket. Provide Exhibit 3, when the candidate asks for the above information.
Provide only when asked – Assume 30 days of revenue.
LCA revenue from each theatre type:
LCA No. of No. of

Theatre type Monthly earnings
revenues/ticket shows/day seats/show
Single screen $1 5 400 $1 * 5 * 400 * 30 = $60,000
Multi-screen $1.5 10 200 $1.5 * 10 * 200 * 30 = $90,000
39
EXHIBIT 3
Global Theatres Statistics
Theatre type LCA revenues/ticket No. of shows/day No. of seats/show

International $1 5 400
Domestic $1.5 10 200
40
Exhibit/Question Solution Guidance:

Total Monthly earnings
Genres Single Screen Multi-Screen Total
80%*1,000*60,000 = 80%*1,500*90,000 =
Comedy 48M + 108M = 156M
48,000,000 108,000,000
60%*500*60,000 = 60%*1000*90,000 =
Drama 18M + 54M = 72M
18,000,000 54,000,000
75%*1,500*60,000 = 75%*2,000*90,000 =
Action 67.5M + 135M = 202.5M
67,500,000 135,000,000
80%*750*60,000 = 80%*1,000*90,000 =
Animation 36M + 72M = 108M
36,000,000 72,000,000
41

Profit for one month:
Genre Revenue ($) Costs ($) Profit ($)
Comedy 156,000,000 50,000,000 106,000,000
Drama 72,000,000 100,000,000 -28,000,000
Action 202,500,000 75,000,000 127,500,000
Animation 108,000,000 90,000,000 18,000,000
Exhibit Analysis:
ROI for each genre:
Good candidates should not calculate the profitability for all the 4 movies. From
Genre ROI (Millions $) the Exhibit 1, it is clear that “Life at Ivy” will be the least successful and can be
disregarded.
Comedy 106/50 = 2.12
From Exhibit 2, a great candidate should disregard “Paws at Pav” as it is
Drama -28/100 = -0.28 screened at fewer theatres.
Action 127.5/75 = 1.7 After calculations:
Animation 18/90 = 0.2 2 movies stand out – however, even though the comedy movie makes less profits,
it has a greater ROI which is what LCA needs.
42
BRAINSTORMING
Other than the profitability analysis, what are the other strategic decisions that LCA should consider for the success of their next
movie?
Release Timing: Monetization: Content/Marketing:

• Strategic release dates to coincide with • Merchandise sales from these movie category, • Using the marketing budget to drive
holidays/popular events, such as romcom during e.g.: water tumblers, limited edition gadgets, t- awareness and buzz for the movie using
Valentine’s weekend, Holiday films over Christmas shirts etc. appropriate channels
• Avoiding clashes with other popular movies or large • Potential for movie sequels based on popularity • Casting the right actors, production and
sporting events during the release direction, sound crew
• Releasing the movie on other platforms such as
Netflix, Hulu, and obtaining television streaming • Theme/story of the movie to align with
rights. ongoing social and pop culture, macro-
economic trends
• Impact of initial reviews on the theatre fill rates
for subsequent weeks.
43
CONCLUSION
Recommendation:
• Recommend “Project Huntington”
• Analysis to support the recommendation – walk through the math, and recognize the lower cost to produce and higher
ROI
Risks:
Any concerns with the plan, example:
• The impact of the critics and popular reviews on the theatre fill rates for subsequent periods.
• Audience preferences might change, and theatres might change their genre preferences
Next Steps:
• Investing in releasing the movie from the category selected, choosing an appropriate release date and launching an ad
campaign.
• Analyzing the scope of the future revenues from sequels or partners for sale of merchandise.
44
Case Execution:
❑ Good Questions
Feedback:
1 2 3 4 5
❑ Structured
❑ MECE
❑ Creativity
❑ Speed 1 2 3 4 5

❑ Confidence
❑ Poise / Posture
Feedback:
1 2 3 4 5
❑ Clear & Concise
❑ Body Language
❑ Coachability
Total: _____ / 20
45
Food Frenzy*
IDEO/frog | N/A | Food Accessibility & Design
*Note – this case is designed for IDEO / Mural style interviews. It is different from a classic case.
46
03 | CASE: FOOD FRENZY
DESIGN FOR FOOD B E H AV I O R A L

INTERVIEW
IDEO | Round 2 | Food Accessibility & Design QUESTION:
Prompt:
Mercado Reforma is a large B2B grocery supplier in Latin America that wants 1 . Te l l m e a b o u t
to expand into the B2C space. You are the project leader, ideate ways to a time you have
received a tough
investigate the opportunity and bring the concept to life. Walk me through
piece of
how you would approach the project. feedback. How
Suggested interview length: ~45 minutes due to the amount of brainstorming and Q&A did you
respond?
Clarifying Information: Note: Provide this only if corresponding questions are asked.
1. Reforma has no history or experience in the B2C space but has extensive distribution networks and expects 2. What do you
refining their operations and scaling will not be insurmountable challenges.
hope to gain
2. Reforma currently operates in Mexico, Chile, and Colombia. While the company operates across the entirety of from your
these countries, the majority of their distribution capabilities are concentrated in Mexico City, Santiago, and Bogota. internship this
3. Their goal is to enter the market in an innovative way. Reforma believes there is whitespace in the food services
summer?
industry for an unmet customer need, but is currently unsure what that looks like in practice.
4. A primary focus of the engagement should be to ensure the proposed market entry strategy embodies the voice
of the customer, addressing customer needs and frustrations.
47
Framework Guidance:
Candidates should propose a project plan – if they begin to structure a traditional framework, prompt them to structure a project plan. If they
still struggle, prompt them to explain why they are structuring the project in such a manner. This should be all verbal and very collaborative –
writing during this phase is not required as this could be verbally delivered if they want.
Research Synthesis & Design Products Co-Creation Prototyping & Scaling
Customer engagement strategy – Putting the pieces together – candidate Insights & ideation with clients/users – Iterate, refine, and scale – candidates
address how the voice of the should be able to address how each of candidates should be able to build should be able to outline a scrappy
customer would be captured. the research inputs is used to distill workshop ideas for presenting to and rough strategy for testing
Candidate should be able to expound insights, create design artifacts, and clients/users and facilitating an ideation solutions they discover through
on a strategy for each of the following describe the use cases of each artifact session. research and co-creation
as well as note their different uses:
• Synthesis process and collaboration • Empathy building exercises • Low budget, easy ideas
• Ethnographic interviewing practices for processing research • Creative presentation of research • Service design simulation
• Focus group execution outputs • Rapid synthesis ideas for reactions or • Wire frame testing
• Ethnographic observation • Artifact examples: CX journey map, insights from research • A/B testing
• Stakeholder interviews service design blueprint, personas • Small group solutioning/brain storming • Pilot market testing
Sample Questions for Framework Drilldown: How to Move Forward

• Tell me more about your research plan – how do you plan to source 1. Press the candidate extensively on their framework using the sample
users/customers? questions.
• What kind of questions will you ask them? 2. Prompt the candidate to begin a brainstorm of insights they might uncover
• How do you envision using your design artifacts? from their research and synthesis products
• Describe how you would lead a synthesis process with a team? How would 3. Stress test candidates and continue to ask for additional hypotheses.
you make sure it is collaborative?
48
EXHIBIT 1
Customer Persona: Millennials on the Move
Millennial customers in Latin American megacities are moving into positions of leadership within the
economy and are increasingly pressed for time due the demands of their professional, personal,
and social lives. These customers crave an efficient option that will satisfy their needs within the
structure of their current commuting and professional routine during the work week.
NEEDS
• Accessible food options when on the go out in the city

• Food options that better cater to their dietary preferences
• Ability to pick-up up cooked food or bundled ingredients when pressed for time
• Options that allow for a quick and efficient shopping or pick-up experience
FRUSTRATIONS
• Feeling pressed for time and unable to attend to little chores like grocery
shopping, laundry, or cleaning their apartments
• Feeling unable to find the specialty food items they like in convenient places
• Lack of diversity of food options around their office
Millennial urban customers. This segment typically works in

professional services (CDMX residents pictured here).
49
EXHIBIT 1 GUIDE Question 1

After pushing the candidate to explain their project execution plan provide the following exhibit
and share the following:
“Your research team conducted extensive field research in Santiago and Mexico City
distilled insights to identify millennial, young professionals as an underserved market
in the food space. Given this – what ideas do you have for serving this market?”
Exhibit Guidance
• This is meant to kick-off a brainstorm with the candidate.
• Prompt the candidate to provide solutions to the millennial consumers’ needs and
frustrations
• Ask the Candidate to continue providing additional solutions 1-3 times after they stop
providing solutions
• When candidates run out of solution ideas ask them how they might find new ideas for
solutions, down select their ideas, or test the validity of their ideas.
How to Move Forward

1. Select one – or two if the candidate is doing very well – ideas and ask how the idea would be prototyped and what the research plan would be.
2. Or ask them to select the idea they think is the best and structure the question around that idea.
3. See below for a sample question for moving forward:
• “Given idea [XYZ provided by candidate], how would you test such an idea in a scrappy, cost effective way? How would you ensure the
product or service meets the needs of our target customers?”
50
Question 2 (The location of these question slides in your case is completely up to you)
• “Given idea [XYZ provided by candidate], how would you test such an idea in a scrappy, cost effective way? How
would you ensure the product or service meets the needs of our target customers?”
• Provide Exhibit 2 to candidates only if they struggle to generate ideas.
Exhibit or Question Guidance: Tools & Tactics

• Wireframe mock ups and interaction simulations for app or digital based solutions
Candidates should recognize this as a request for a prototyping
strategy and identify that to successfully conduct a usability test of a • Paper prototypes for low fidelity digital product simulation, cardboard prototypes for
prototype the following are required: physical product prototypes, A/B testing for either of these ideas
• Sample users • Facilitators acting to simulate service interactions
• Interactive prototype with test-friendly features • Other examples: Sketches, hand made constructions, virtual models, role play,
videos
• A facilitator
Example answer
• Observers
Idea: small, express, organic markets positioned in/around metro stations in Mexico
The best candidates will note on their own that outputs from the
City
prototyping exercise with customers will be used to improve the idea.
Excellent candidates will also note that feedback from usability testing Prototype: Build a simulated cardboard storefront and have a sampling of food
could cause the team to throw out the idea. products you believe the target customers would enjoy. Position 2 facilitators to
provide service while a team of 2-3 observers note how selected customers interact
Decision point following the test can be thought of as – Adapt,
with the service from afar and record video of the interactions. Collect feedback on
Adopt, or Abandon?
the service, food selection, and positioning of the store. Test idea with volunteers
during off-peak hours. (See next page for a similar test situation from IDEO for a
bakery)
51
EXHIBIT 2
Prototyping examples
Paper interaction testing for apps.

Cardboard boxes designed to create a fake “store”
with facilitators acting as employees to simulate and
test a new service design.
Cardboard prototype for a Dyson

vacuum cleaner.
2nd iteration IDEO service design prototype for a new bakery/restaurant concept.
52
Question 3
• Given your idea and the target customer for such an idea, please size the market for the opportunity in Reforma’s
major urban markets. Once you size the opportunity, what do you think about these numbers?

Candidates should either ask you for information to be able to size the market or ask to make assumptions and create their own numbers based off some logic,
either is fine as long as they work with you to confirm assumptions.
Anticipated Millennial Pop. % x Pop. x (Penetration x

City Total Population Millennial Population
Penetration Rate Penetration Millennial Pop. %)
Bogota 7,500,000 30% 50% 15.0% 1,125,000 (round to 1.1M)
Mexico City 8,500,000 27% 20% 5.4% 459,000 (round to 0.5M)
Santiago 5,500,000 30% 65% 19.5% 1,072,500 (round to 1M)
Once candidates arrive at the millennial City Rounded Pop. Monthly Spend Monthly Revenue
population number and penetration number, Bogota 1.1 M $50 $55 M
they should ask for some kind of estimated Mexico City 0.5 M $300 $150 M
spend, provide the following Santiago 1M $220 $220 M
53
CONCLUSION
Recommendation:
• Reforma should continue prototyping and testing their new product/service for B2C grocery services and work to test the
ideas as much as possible in the Santiago market given the large size of the opportunity.
Risks:
• Penetration rate is purely and estimate and the calculations are particularly sensitive to this percentage
• Santiago’s population is the smallest as compared to Mexico City and Bogota
• Distribution costs could be higher in Santiago given its positioning in the Andes Mountains
Next Steps:
• Prototype the service in all three cities to identify nuanced differences between consumers
• Investigate how consumer needs vary across the cities
• Deploy research team to Santiago, Mexico City, and Bogota to conduct further prototyping
54
00 | CASE: FOOD FRENZY Case Name _________________________ Interviewer ___________________________
Case Execution:
❑ Good Questions
Feedback:
1 2 3 4 5
❑ Structured
❑ MECE
❑ Creativity
❑ Speed 1 2 3 4 5

❑ Confidence
❑ Poise / Posture
Feedback:
1 2 3 4 5
❑ Clear & Concise
❑ Body Language
❑ Coachability
Total: _____ / 20
55
A Hairy Ordeal
Bain | Round 1 | Consumer
56
04 | CASE: A HAIRY ORDEAL
A HAIRY ORDEAL
Bain | Round 1 | Retail B E H AV I O R A L
INTERVIEW
Prompt: QUESTION:
Your friend Megan Black calls you to ask for your advice. Megan had been working in
the beauty industry as an independent hair stylist for 2 years when the owner of Salon
Deluxe approached her and asked her to buy the salon. It has always been her dream 1. What is the
to own a hair salon, but she isn’t sure if she should do it, or focus on her current greatest asset
business, Megan Black Balayage (MBB). She wants your help to figure out what she that you will
should do. bring to our
firm?
1. What is balayage? Balayage is a technique that “paints” the hair to achieve a more natural looking hair dye 2. Why
experience. consulting?
2. What Is Salon Deluxe’s business model? The salon is a high-end hair salon that specializes in balayage. The
business has two segments, services and products. Appointments are booked centrally, through the salon’s booking
portal, and clients see 1 of 4 contractor employee stylists.
2. What does a balayage appointment consist of? A balayage appointment has 3 parts: hair & product prep (10
mins), hair painting (90 minutes), drying & styling (50 minutes)
3. Does Megan have specific metrics or goals related to this project? Her goal is primarily to evaluate which
business has the greatest NPV.
57
Framework Guidance:
NPV Meg Black Balayage NPV Salon Deluxe Other Considerations (Internal) Other Considerations
(External)
• Profit • Profit • Buy vs build new salon
• # of clients • Selling Price/Service • Initiatives to improve NPV • Local competition
• Average price/service • # of chairs • Grow clientele through • Customer preferences
• Product Sales • Avg. Revenue/stylist physical • Local talent pool
• Product Sales expansion/marketing
• Product Costs • Increased efficiencies,
• Rent • Rent /lower costs
• Labor • Inventory • Megan’s risk profile
• Managerial experience
• Discount rate • Interest • Culture fit with new team and
• Discount rate clients

To move forward, the interviewee should talk about wanting to understand the client’s current business. If the candidate asks about the new Salon (Salon Deluxe) tell
them that the client is still collecting data on Salon Deluxe, and we can review the information later.
58
EXHIBIT 1: MEGAN BLACK BALAYAGE P&L
Services Revenue Product Prices
70
60
60 55
# of clients 200
50
Visit frequency Quarterly 40
Average spend per visit $150 30
20
Services Margin 60%
10
Rent $500 monthly 0
Products
Shampoo Conditioner
*Product margins all 50%

59
Question 1 (The location of these question slides in your case is completely up to you)
• What is MBB’s (Megan Black Balayage’s) NPV?

Exhibit 1 provides revenue and margin details for the services and product segments of the existing business. The candidate should perform the calculations to find
out the client’s bottom line. Provide missing information when prompted by candidates:
Services:
200 clients X 4 visits per year (quarterly) = 800 X $150 per visit = 120,000 X 60% margins = $72,000
Products:
The candidate does not have enough information to solve the question. Great candidates will recognize this and ask how many units of the products are sold, or the
percentage penetration on average. When prompted, provide the following figures:
Shampoo: 25%, Conditioner: 20%, Hurdle rate: 5%
Calculations:
Shampoo: 800 visits (200 X 4) X 25% = 200 bottles X $60/bottle = $12,000 X 50% margin = $6,000
Conditioner: 800 visits X 20% = 160 bottles X $55/bottle = $8,800 X 50% margin = $4,400
Total product profit = $10,400
Sum total: $72,000 + $10,400 - $6,000 (rent) = 76,400

NPV: $76,400/.05 = $1,52,800 OR $1.52MM
So what?: Candidates should recognize that the current net income serves only as a benchmark against the value of the potential acquisition. Proceed to exh. 2
60
Question 2
• What is the NPV of owning Salon Deluxe?

When the candidate asks for information about the salon, provide BOTH Exhibits 2 and 3 and ask them to tell you what they think. Many candidates will be drawn to
the second exhibit, exceptional candidates will note that the floor plan shows unused space within the salon that could be used to increase revenues. Other
observations may include the difference in profit from product sales, or the difference in rent between the 2 businesses (8X). Note: If candidate asks what happens to
Megan’s current customers, tell them she will need to give up her clients to focus on operating the Salon Deluxe
NPV Calculation: Service Profit + Product Profit/Discount Rate

Services:
(Salon Capacity x Occupancy Rate x Rev. per appt x Profit Margin) – Rent
- To determine salon capacity and occupancy rate, candidate will need to perform calculations from the information given. For salon capacity:
8 hours per day / 2.5 hours per appt = 3.2 appt/day (on average) x 250 days = 800 appt per year x 4 stylists = 3200 appt capacity
- For occupancy rate: 6,000 appt > 2,800 appts OR 100% capacity
- Rev. per appt x profit margin – ($150 x 35% margin)
- Services total – (3200 x $150 x 35% - 48,000 (4,000 x 12 months)) = $120,000
Products
$10,000
NPV Calculation
$120k + $10k / 10% = $1.3M
The candidate should note that the current NPV of the business is lower than that of the original business. The candidate should also note that there may be
opportunities to improve the NPV of the business. If the candidate does not, prompt them to think about what they might do next. Excellent candidates will note that
requested appointments are nearly 2x the current capacity, which would nearly double NPV by repurposing storage rooms.
61
EXHIBIT 2: SELECTED SALON INFORMATION
Salon Hours Total requested appts

10 AM – 7 PM*, 5 days per week 6,000
Average appt. duration Rent

2.5 hours $4k/month
Average spend per appt Net Profit from Product Sales

$150 $10k/year
Stylist Profit Share Salon Discount Rate

65% of service revenue 10%
*Stylists take daily 1 hour break

62
EXHIBIT 3: SALON DELUXE FLOOR PLAN
STORAGE STORAGE
WAITING
HAIR STATIONS AREA/RECEPTION
BREAK ROOM
63
BRAINSTORMING
Insert brainstorming question here. What are some levers we could pull to make Salon Deluxe a more attractive business? Which of these
ideas might have the largest impact?
Increase Service Revenue Decrease Service Costs Increase Product Profitability Financing
• Increase salon capacity • Cut low margin services • Discounts (more sales) • Pay down debt
• Loyalty program (more frequent • New product vendor (lower COGS) • Add complementary • Refinance at lower rate
visits) products/bundle (hairspray, styling
• Renegotiate rent prices creams)
• Raise prices (more spend per visit)
• Evaluate profit share labor costs • Smaller bottle sizes (lower costs)
• Build or buy 2nd salon
• New vendors (lower costs)
• Website SEO investments

The best candidates will examine the levers with the largest potential impact. This would include increasing revenues and decreasing costs for
the service portion of the business. Good candidates should look at renegotiating rent prices, increasing salon capacity to fit more customers,
and great candidates will mention looking at borrowing rates, to see if the salon can lower its interest expense.
64
Question 3 (optional)
• What are some levers we could pull to make Salon Deluxe a more attractive business?

Engage in a conversation about which levers the client could pull to make it more profitable. Here are a few ideas, and potential responses:
- Decreasing costs, Rent, Margin, etc. Response: We’re locked into a long-term contract, we will not be able to consider it at this time
- Increasing Service revenues, Price. Response: This is a competitive marketplace, and we believe will be difficult in the market.
- Increasing Service revenues, quantity: Response: Salon Deluxe is currently turning away clients, and does not feel it makes sense to increase marketing, offer
discounts for more frequent appts, offer loyalty programs, etc.
The candidate should realize that the salon is currently offering services at its full capacity, and cannot accommodate more customers. If the candidate does not
inquire about unused space in the salon, guide them to mention it. When the candidate mentions utilizing the excess space, tell them the following:
• Our client believes she can transform the unused space to create a drying and styling station. This will allow stylists to perform the prep and painting portions of
the appointment, before sending their customers to the drying station to wait. After their hair dries, the clients are styled by an assistant, before finishing the
appointment. She projects this change will allow each stylist to increase capacity by 37.5%. She estimates it will cost $100k to renovate the space and hire an
assistant for styling.
• Question 4: What is the new projected NPV of the business?

- $168k (service revenue) x 1.375 = $231k + $10k (product profit) - $10k (interest) - $48k (rent) = $183k / 10% = $1.83M - $100k = $1.73M
- BONUS: $1.73M - $1.52M = $210k (Maximum price that she should pay for the salon)
65
Case Execution:
❑ Good Questions
Feedback:
1 2 3 4 5
❑ Structured
❑ MECE
❑ Creativity
❑ Speed 1 2 3 4 5

❑ Confidence
❑ Poise / Posture
Feedback:
1 2 3 4 5
❑ Clear & Concise
❑ Body Language
❑ Coachability
Total: _____ / 20
66
Lizard Insurance
Bain | Round 2 | Acquisition
67
05 | CASE: LIZARD INSURANCE
LIZARD INSURANCE B E H AV I O R A L
Bain | Round 2 | Acquisition INTERVIEW
QUESTION:
Prompt:
Our client, Lizard Insurance, is a US. based auto insurance provider that recently
acquired a rival auto-insurance company MediumSure. As a part of the acquisition, 1. What is the
Lizard Insurance also acquired a subsidiary of MediumSure named TechSize, that greatest asset
provides software for many insurance companies. Lizard Insurance wants to know that you will
what they should do with TechSize, and they’ve brought us in to help. bring to our
firm?
2. Where do you
1. Does Lizard Insurance have any experience in the software space? No – they would need to develop see yourself
capability. in 5 years?
2. What is TechSize? The techsize software makes it easier to comply with government regulations when a
customer moves from state to state
3. Does Lizard Insurance have plans for TechSize? No – they bought MediumSure for other reasons and don’t
have plans for TechSize.
4. How does Lizard Insurance make money? They sell auto-insurance direct to consumer and collect monthly
premiums.
5. How does TechSize make money? They sell B2B services helping insurance providers comply with
government regulations.
68
Framework Guidance: There are other ways to approach this framework but a strong candidate will
realize that there is a binary choice with this asset – to hold it or to sell it.
• Keep – and invest or hold

Keep Sell
• Sell – either spinning off part or all of TechSize
Do Nothing
Try to Grow Partial Sale Full Sell
Grow Grow Spin off into

License IP
Inorganically Organically new company
Acquire
Cross-sell / up-
Additional Joint Venture Find a buyer
sell
Players

• If the candidate has a more traditional profitability framework, lead them to the initial question of Keep or Sell. Then ask the candidate to analyze the keep option.
69
Discussing the keep option:

• Present the following information if/when asked:
• TechSize requires substantial investments and upgrades in the next 2 years to maintain market position
• Given the vastly different nature of the subsidiary’s product, there are no cross-selling or up-selling
opportunities between TechSize (a B2B business) and Lizard Insurance Co. (a B2C business).
• Switching our services over to utilize TechSize would be costly, and would not reduce processing costs by
any significant amount (no real cost synergies introduced with TechSize).
• There is no appetite for additional acquisitions by Lizard Insurance of companies in TechSize’s industry.
• There was a recent acquisition by a competitor for a company in the same industry as TechSize
• If the candidate asks for market information – give them exhibits 1 and 2
• From the exhibits, the candidate should realize that the market is not attractive, as it is stagnant and
fragmented.

At this point, the candidate should realize that the Keep option is unpalatable and decide to move into sale. .
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EXHIBIT 1: INSURANCE SOFTWARE MARKET

SHARE
Insurance Software Market Share
30%
25%
20%
15%
10%
5%
0%
Software Guru Insurance App Co TechSize Goggle Next Ten Players
Services Revenue
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EXHIBIT 2: INSURANCE SOFTWARE MARKET

SIZE
Insurance Software Market Size ($B)
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
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Discussing the sale option:

• Ask the candidate to brainstorm some ways they might be able to determine a sale value for TechSize,
options should include:
• DCF
• Industry Multiples
• Comparable transactions
• Lead them to ask for company values. Once they do, present them with Exhibit 3.

At this point, the candidate should realize that the Keep option is fairly unpalatable and decide to move into sale. .
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EXHIBIT 3: INFORMATION ON 2020

ACQUISITIONS
Company Name Description 2020 EBITDA Selling Price
Fill-Your-Forms A personalized service for $25 Million $125 Million
high net worth individuals
where a lawyer can be
contracted to fill out forms
on demand.
Tech Toy Company Children’s toy company $1.5 Billion $20 Billion
specializing in developing
educational toys for use
in schools
Insurance App Co. Insurance software that $300 Million $1.5 Billion
automates elements of
the insurance application
process
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Guidance on Exhibit 3:
• The candidate should realize that they can use the information in exhibit 3 to find EBITDA multiples.
• A great candidate will also recognize that Tech Toys Co is not a comparable company and exclude that from
any analysis.
• Using the remaining information, the candidate should deduce that they can sell TechSize for 5 x EBITDA.
• A great candidate will realize that they can find TechSize’s revenue using Exhibits 1 and 2. By taking 15%
market share * the total market of $5.5B in 2020, they can get a revenue of $825M.
• The candidate will need to ask for an operating margin (or EBITDA as a % of revenue) – tell them 25%
• EBITDA = $825 * 25% = $206M
• Sale value @ 5x EBITDA = $206 * 5 = $1.03B

• Ask the candidate to provide their recommendation
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CONCLUSION
“The client’s CEO is heading up the elevator, what do you recommend?”
Recommendation:
• Candidate should recommend selling off TechSize due to limited market potential and lack of synergies
• Analysis shows the company could be worth $1B based on comparable multiples and 2020 EBITDA
Risks include:
• Lack of buyers
• Small sample size of multiples
Next Steps:
• Due diligence on buyers
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Met with Problems
BCG | Round 1 | Non-profit
77
06 | CASE: MET WITH PROBLEMS
MET WITH PROBLEMS

B E H AV I O R A L
Round 1 | Human Capital | Non-profit INTERVIEW
QUESTION:
Prompt:
Your client is Amy Sherald, the Chief People Officer at the Metropolitan Museum of Art
(“The Met”). Located in New York City, the Met is one of the world’s largest art museum 1 . Te l l m e a b o u t
with 250 gallery rooms and a collection of more than 2 million works of art. This mega- a time when you
museum welcomes over 6 million visitors annually. Your client’s department reported had a difficult
unusually high human resources (HR) costs last year and has come under scrutiny by conversation
the Executive team and Board of Directors. Amy has hired your team to help her with a direct
address this problem. manager or
Clarifying Information: Note: Provide this only if corresponding questions are asked. direct report.
1. What is the current structure of The Met’s staff? There are four main staff departments at the Met: 1) artistic, 2)
security, 3) administrative and 4) executive. The artistic staff are salaried and responsible for the art collection. They
decide what works of art to show each season. The security staff are hired on a part-time, hourly basis and are 2. Why
responsible for protecting the art 24/7. The administrative staff are salaried and work behind the scenes to ensure the
museum operations run smoothly. The executive staff are the museums’ top leaders and includes C-suite staff.
consulting?
2. How does The Met hire staff? Your client uses a mix of online postings, direct referrals and occasionally hires an
executive search firm. Amy describes the process as sourcing, interviewing, onboarding, retaining then turnover.
3. Does the client have a specific goal? Not really. For now, the client wants to know where to focus and how to plan
for cost reductions in the short term.
4. How does The Met make money? The Met is a non-profit and generates revenue from government grants, donations
and admission tickets. The client does not want your insight on improving these revenue streams.
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Framework Guidance:
Direct Costs Indirect Costs External Factors
• Wages and Benefits • Opportunity cost • Economic Cycle
• Recruiting (ex. applicant tracking (underperformance of hired staff) • Competition
system) • Loss of knowledge with turnover • New museum openings?
• Training/education • Decline in morale with turnover or • Labor Force (supply vs. demand)
• Retention/enrichment poor management • Education patterns?
• Turnover/severance packages • Union?
• Overhead and HR team capacity
A good candidate will focus on costs and will not build in revenue considerations into their framework.
A great candidate will build incorporate differences between salary/hourly employees or even differences among the four types of staff (from
the clarifying questions). Another framework option below. Candidate could fill in the table as case unfolds.
People Cost Considerations External Factors
Direct: Indirect: • Economic Cycle
Artistic Executive Administrative Security • Opportunity cost (hours • Competition
Department Size Medium Small Medium Big sunk)
Wages and Benefits $$ $$$ $ $
• Labor Force
Training/education High High Medium Low
• Loss of knowledge
Turnover/retention • Decline in morale
Severance Low High Low N/A

To move forward, the candidate should call out different types of staff the client must hire for The Met. Ideally, the candidate points to turnover costs or cost of hiring as
a potential lever to investigate further. Provide Exhibit 1 and let candidate respond to the table.
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EXHIBIT 1
2019 Museum Department Snapshot
Artistic Executive Administrative Security

Cost per Staff Turnover $30,000 $95,000 $10,000 $5,000
Average Time-to-fill1 3 months 6 months 2 months 2 weeks
Staff Count2 500 20 1,000 1,200
% Turnover 2.2% 10% 5.7% ~16.67%
Compensation Type Salary Salary + Bonus Salary Hourly
1. Time-to-fill counts the days from the date when you’ve published your new job opening. This metric answers the question: How long is your whole recruitment process?
2. Numbers as of 01/01/2019
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Question 1
• How much did turnover cost The Met in 2019? We know that turnover cost $1.5M in 2018.

A good candidate will compare and contrast the departments then quickly realize the table provides unnecessary information for answering
the question at hand. He/she should use staff count, % turnover and cost per staff turnover to solve for the turnover costs per department.
Solution below (note, 16.67% = 1/6)
A great candidate will build out a clear structure for solving for each department’s costs. He/she will also connect the total cost to the $1.5M
in 2018 - pointing out a 39% or ~33% increase in turnover costs.
Artistic Executive Administrative Security

Staff Count 500 20 1,000 1,200
% Turnover 2.2% 10% 5.7% 16.67%
Turnover Count 11 2 57 200
Cost per Staff Turnover $30K $95K $10K $5K
Turnover Cost per Department $330K $190K $570K $1M
Total Turnover Cost $2.09M (or ~$2M)

The candidate should call out the security department as the most expensive and recommend focusing on turnover cost reductions there. If the candidate does not
suggest the security department, ask “where would you like the client to focus in 2020?”
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BRAINSTORMING
“Amy wants to explore ways to cut HR cost in the security department overall. Brainstorm some ideas for
her.”
Brainstorming Guidance: Note: This is just one possible set of categories and answers.
Sourcing Interviewing/Onboarding Retaining/Turnover

• Cut unnecessary advertising (cut subscriptions to • Streamline applicant tracking system (across • Fire underperforming (or surplus) of security staff
channels that do not result in applications) departments) for efficiency in long-term • Less security staff per gallery during slower days/seasons
• Optimize criteria (for faster and more effective • First-round phone interviews • No severance and limit overtime pay
screening) • University/community college partnerships (security • Good management and predictability in schedule
• Employee referral program (to save search costs) staff for credit)
• Tiered benefits based on tenure
• Online training for onboarding (upfront cost but long-
term savings and consistency) • Low-cost staff perks (museum pass, gift store discount,
exclusive tours of new exhibitions, family day, awards)
• Priority consideration for other full-time, salaried positions in
artistic and administrative departments

The candidate should come up with distinct buckets (example above uses hiring pipeline for structure) and 2-3 items under each bucket. Variable costs/fixed costs vs.
short-term/long-term is one example of a 2x2 structure for this brainstorm. If candidate falls short, ask “how else could you cut costs in the security department.” A
great candidate will mention some risks behind their cost cutting ideas and may even star low risk options the client should prioritize.
At this point, the interviewer may move to the end recommendation or they may ask a follow-up question (to further test math analysis).
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Question 2 (OPTIONAL IF TIME ALLOWS)

• Does Amy have the optimal number of security staff members?
Supply only when asked:
- Security staff only allowed to work 35 hours max (or average of 5 hours per day)
- 250 galleries under surveillance (also stated in the prompt)
- Museum hours 10am-6pm
- Museum open 350 days/year
- 2 security staff needed per gallery rooms when museum is open
- 1 security staff needed per 4 gallery rooms when museum is closed
Exhibit or Question Guidance: There are a number of ways to calculate 1,000. Math could be done on weekly or
Calculations on Daily Basis
annual basis. Encourage candidate to stick with a daily basis (or weekly basis).
When Open When Closed • A good candidate will calculate 1,000 security staff as the optimal number
Security staff/room 2 0.25
and realize Amy has too many people staffed in that department. A candidate
# of gallery rooms 250 250
may mention that having The Met should consider having a “reserve” of staff
# security staff positioned 500 62.5
Hrs/day 8 open 16 closed beyond the 1,000 required under the current assumptions.
Security hrs/day needed 4,000 1,000
• A great candidate will state that the Met has overstaffed the security
Average hrs/day per staff 35/7 = 5 35/7 = 5
department by 200 people (1,200-1,000) and realize this number equals the
Security staff needed 800 200
Total security staff needed 1,000 2019 turnover number for security staff – and recommend not filling vacant
security positions in 2020 to save on costs.
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CONCLUSION
“The phone is ringing. Amy has called to ask for your recommendation. What would you say?”
Recommendation:
• The Met faced an overall ~33% increase in turnover costs from 2018 to 2019. Through analyzing the turnover costs per
department, I’ve identified some opportunities for cost savings in the security department, which is responsible for almost half of
2019’s turnover cost. I propose Amy…
• Lower the minimum # of security staff per room on low visitation hours/days (ex. weekday mornings)
• Disregard replacing 100-200 security staff positions in 2020 (Question 2 reveals Amy only needs 1,000 people staffed in the
security department)
Risks with decreasing security staff concentration or size:
• Less oversight (potential damage from visitors or even art theft)
• Decreased job satisfaction (job becomes more stressful if security staff must cover more gallery rooms)
Next Steps:
• Quantify cost savings at different reductions of the security staff and weigh those savings against potential risks
• Schedule an in-person meeting on Monday to prioritize cost-savings options for the Executive team and Board of Directors
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Case Execution:
❑ Good Questions
Feedback:
1 2 3 4 5
❑ Structured
❑ MECE
❑ Creativity
❑ Speed 1 2 3 4 5

❑ Confidence
❑ Poise / Posture
Feedback:
1 2 3 4 5
❑ Clear & Concise
❑ Body Language
❑ Coachability
Total: _____ / 20
85
A Messi Situation
BCG | Round 1 | Sports and Entertainment
86
07 | CASE: A MESSI DECISION
A MESSI DECISION
BCG | Round 1 | Sports
Prompt:
Your client is the CEO of a major English soccer team. He’s called you while B E H AV I O R A L
brimming with excitement after receiving news that Lionel Messi was looking INTERVIEW
for a new team. Players of Messi’s quality rarely became available, and QUESTION:
would surely improve any team. However, with COVID-19 restricting budgets,
money would be tight and would need to generate a return. He would like
you to figure out what the right amount of money to offer would be. 1. Describe your
working style.
1. What is the team’s goal? To win the European Championship within 3 seasons. Due to recent financial restrictions,
all of their player acquisitions must be offset with new revenue within 5 years. 2. What’s your
2. How do soccer teams acquire players? In soccer transfers, the acquiring team buys out the new player for an favorite thing
agreed upon fee. After they pay that fee, they then agree a new annual contract with the player.
3. How does the team make money? If asked this question, have the candidate brainstorm revenue streams. Full about Darden?
guidance appears later on.
4. What is soccer? Soccer is a global sport where a team strives to score more goals then their opponent.
5. How good is Messi? He is in the conversation for greatest of all time. He contributed (scored or assisted) 55 goals
last season.
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Framework Guidance:
Financials Competitors Messi Risks
Revenue • How will they respond? • How good is he? • Injury risk (could increase with
• Incremental Ticket Sales • Could this start a talent • Age / Career Arc? – How many age)
• Jersey sales arms race? years • Could he ask to leave our club
• TV/AD Revenue • Will he want to come? in a few years?
• Are there cheaper • Style of play doesn’t adjust to
• Costs alternatives? our league
• Acquisition Fee • Language barriers?
• Salary Cost

A great candidate should recognize that they can value Messi like any type of asset, through a number of approaches including incremental cash flows or comparable
players.
If the candidate gets stuck, encourage them to think about how they would value a different type of asset. Have them brainstorm cash flows and comps.
Ask the candidate to review Exhibit 1.
88
EXHIBIT 1
Recent Transfers of Top Forwards
Name Age (at time of Goal Transfer Fee Transfer Year

transfer) Contributions*
Christiano Ronaldo 33 62 $117M 2018
Neymar 25 24 $225M 2017
Kylian Mbappe 19 31 $310M 2017
Pierre Emerick 29 28 $56M 2018

Aubameyang
Diego Costa 27 28 $62M 2018
*Goal contributions include goals and assists – key offensive metrics. The European average for attacking players is 12, over 30 is considered elite.
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EXHIBIT 1 – INTERVIEWER GUIDANCE

Recent Transfers of Top Forwards
Name Age (at time of Goal Transfer Fee Transfer Year Multiple
transfer) Contributions
Christiano Ronaldo 33 62 $117M 2018 ~2x
Neymar 25 24 $225M 2017 ~10x

Kylian Mbappe 19 31 $310M 2017 10x
Pierre Emerick 29 28 $56M 2018 ~2x
Aubameyang
Diego Costa 27 28 $62M 2018 ~2x
Exhibit Analysis:
A good candidate should recognize that they can use market multiples to approximate a value. They should try to calculate a multiple of
Transfer Fee to Goal Contributions. An average multiple would be 5x.
A great candidate will recognize that older players trade at lower multiples, and suggest a more conservative multiple of 2x.
How to Move Forward: With a multiple in mind, the candidate should ask for Messi’s goal contributions. Tell them 55, and suggest that
he will sell for a multiple of 2.6x – giving a value of $143M
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ROI Calculation:
With the value of $143M on the table, the candidate should pivot towards looking at the incremental revenue Messi will bring in and whether
the transfer will break even. Ask the candidate to brainstorm how the client makes money. Push them until they find the following:
• Ticket revenue
• Food + Beverage Revenue
• TV and streaming broadcast revenue
• Sponsorship & partnership revenue
• Jersey and merchandise sales
Once the candidate has established the revenue streams – they should ask for information on current performance of each channel. When they
do, provide them with the following information:
• The team plays 25 home matches per year, with an average ticket price of $50. The stadium has 60,000 seats and is 83.33% full.
• Each fan typically spends $10 on food and beverages.
• TV rights are assigned based on popularity – the team currently receives $150M per year in revenue.
• Sponsors currently pay $50M a year
• In the past, the team has sold 1M jerseys at a price of $100 each, but only receives a 25% margin
• Given that information, the candidate should attempt to calculate the current revenue.
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ROI Calculation (continued):

• Current revenue calculations:
• 60,000 seats * 83.33% (5/6) fill rate * $50 ticket * 25 games = $62.5M
• 60,000 seats * 83.33% * $10 food and beverage * 25 games = $12.5M
• Broadcast ($150M) + Sponsorship ($50M) = $200M
• 1M jerseys * $100 jersey * 25% margin = $25 M
• Total Revenue = $300M
Once the candidate has completed those calculations, they should ask for the incremental costs and benefits associated the transfer. Give
them the following.
• Given Messi’s significant commercial draw, the team would expect to sell out every home game, and charge $15 more per ticket.
• Broadcast revenue would increase by 10% and sponsorship would double
• Last year, Messi had the highest selling jersey in the world. Selling 2M units. The team expects to sell that many each year of his contract,
but it would cannibalize 50% of their current jersey sales. Pricing and margins would remain the same.
• Messi is the second highest player in the world, with a salary of $100M per year. His agents take a 10% fee annually.
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ROI Calculation (continued):

• Future revenue calculations:
• 60,000 seats * 100% fill rate * $65 ticket * 25 games = $97.5M

• 60,000 seats * 100% * $10 food and beverage * 25 games = $15M
• Broadcast ($150M*110% = $165M) + Sponsorship ($100M) = $265M
• 2M new jerseys + 1M old jerseys * (50% cannibalization rate) = 2.5M total jerseys * $100 * 25% margin = $62.5M
• Total New Revenue = $440M
• New Revenue($440M) – Old Revenue ($300M) = $140M incremental per year
• Incremental Costs = $110M in new salary and fees
• Incremental Profit = $140M - $110M = $30M
• Upfront costs = $143M
• Payback period is just under 5 years
• A good candidate will realize that this investment will break even in just under five years.
• A great candidate will realize that the transfer breaks even but will want to dive into the risks. S/he might suggest that
there might be issues with high wages for an older player, risk of injury, etc.
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CONCLUSION
“The CEO and the world soccer community are waiting, what will you tell them”
Recommendation:
• Our client is interested in determining a fair market value for Lionel Messi
• Based on a market multiples approach, we found it fair to offer ~$140M for his contract
• Even with an annual salary of $100M, incremental revenues will allow this transfer to break even in 5 years
• Players of Messi’s quality are rare, and he could help the client achieve their goal of a European championship
Risks:
• Financial projections show an aggressive uptick in revenue that could be hard to obtain.
• Huge investment for an older player who may not have lasting value on the field
Next Steps:
• Do further diligence on the feasibility and sensitivity on the revenue model
• Lock in additional sponsorship dollars from corporations who might want to align their brand with Messi
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New Rubber Plant Investment
BCG | Round 2 | Industrial
95
08 | CASE: NEW RUBBER PLANT
NEW RUBBER PLANT INVESTMENT

B E H AV I O R A L
BCG | Round 2 | Industrial INTERVIEW
QUESTION:
Prompt:
The federal government of a foreign country is investigating whether to
reopen a rubber factory in a western part of the country. The factory was 1. How do you
operational in the past, but has not been used for 7 years. The plant was think about
closed due to terrorism in the area. If rejuvenated, it may become a target for ranking
the rebels. All the equipment is usable, but the government would need to competing
spend $12M on upgrades, which would allow the plant to produce 10M lbs of priorities during
stressful time
rubber per month. The demand for rubber is strong, but rubber must be
periods?
transported by train to a port. Two trains a day can be used for this.
2. Why
1. How is rubber made? Gum resin is refined. Need 3lbs of gum resin to produce 1 lb of rubber
2. How do we get resin? By train from the capital. Up to 4 trains can be used for this purpose.
consulting?
3. How much can we sell rubber for? $20 per pound. Gum resin costs $5 per pound.
4. How many suppliers are there? We have identified one gum supplier
5. Who are our customers? Rubber is highly commoditized. We would sell on the global markets.
6. What is the government’s goal? Profitability, job creation, and economic development.
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Framework Guidance:
Financials Operational Considerations Non-Financial Benefits Risks
Revenue • Can we ship and receive the • Job creation • Supply chain
• Rubber pounds required amount of finished • Economic development • Labor shortage
• Rubber price goods and raw materials • Community improvement • Terrorism
• Positive PR • Commodity price changes
• Costs • Improved trade relations
• Up front investment
• Variable costs
• Gum resin
• Fixed costs
• Overhead
• SG & A

• Push the candidate to calculate the ROI of the plant.
• If the candidate asks for demand, tell them that rubber demand worldwide is strong enough that all rubber produced by the plant can get sold.
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ROI Calculation Guidance:

• Before the candidate starts calculating, encourage them to think about where the bottleneck lies. If they start to use the 10M pounds per
month figure, ask them about the trains.
• Once the candidate asks you how much rubber the train can carry, give them the following:
• 25 operating days a month

• 2 trains / day
• 8 bogies / train
• 25 cases / bogie
• 500 lbs / case
• Expected calculation:
• 2 * 8 * 25 * 500 = 200,000 lbs a day
• 200,000 * 25 = 5 M lbs a month
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ROI Calculation Guidance:

• Before the candidate starts calculating, encourage them to think about where the bottleneck lies. If they start to use the 10M pounds per
month figure, ask them about the trains.
• Once the candidate asks you how much rubber the train can carry, give them the following:

• 2 trains / day
• 25 cases / bogie
• 500 lbs / case
• 2 * 8 * 25 * 500 = 200,000 lbs a day
• 200,000 * 25 = 5 M lbs a month
99
ROI Calculation Guidance (continued):

• Now that the candidate has realized that there production is limited by the amount of rubber they can ship out – they should also realize
there is a limit to the raw material they can bring in. An astute candidate will ask about the capacity of the trains bringing resin in.
• Resin train information:

• 4 trains / day
• 25 barrels / bogie
• 640 lbs / barrel
• 4 * 10 * 25 * 640 = 6400,000 lbs a day
• 640,000 * 25 = 16 M lbs of resin a month – since it takes 3 lbs of resin to produce 1 lb of rubber – they can produce
$5.3 M lbs of rubber from raw materials
• The candidate should realize that they can produce 5M barrels a month based on the limiting factor – the
outbound trains
100

• Other Financial Information:
- Labor - $8M per month
- Other overhead - $10M per month
- Trains - $40k per trip
• Transport Cost:
• $40K * (4 + 2) [trains per day] * 25 [days per month] = $6M
• Revenue
• 5M lbs rubber * $20 per pound = $100M
• Material Cost
• 15M lbs resin * $5 per pound = $75M
101

• Final Income Statement (monthly)
• Revenue - $100M
• COGS - $75M
• Labor - $8M
• Overhead - $10M
• Transport - $6M
• Operating Profit - $1M (or 1% margin)
• Given the above, a good candidate will recognize the plant has an operating profit of $1M monthly. Given an initial
investment of $12M, that would have a payback period of 1 year.
• A great candidate will notice that the margins are wafer thin at 1%. Given that rubber is a commodity, a small dip in price
could easily force this investment into the negative territory.
• Ask them what additional factors they should consider.
102
BRAINSTORMING
“What other factors could we consider when making a decision with this investment?
Brainstorming Guidance: Note: This is just one possible set of categories and answers.
Cash Flow Improvements Economic Development Risks

• Plant is at 50% capacity, if we improve • Can we utilize an uptick in local wages to support • Terrorism
transportation – can we bolster profit other development priorities • Fall in the rubber market price
• Can we lock in a long-term price or hedge on • Could be used to help with reelection message • Scarcity of gum resin
resin prices
• Mechanical failures on train tracks cause a shut down
• Local pushback against the project

Feel free to push the candidate on any of their brainstorming ideas. Make sure they at least touch on the fact that the government has multiple criteria for
success, including ROI, job creation, and economic developments. This could also be a good time to ask them to detail some of the risks involved.
103
PubU Footprint
McKinsey | Round 2 | Energy
104
09 | CASE: PUBU FOOTPRINT
B E H AV I O R A L
PUBU FOOTPRINT INTERVIEW
QUESTION:
McKinsey | Round 2 | Energy
Prompt:
1. As a
You are the Dean of a large public university in the Midwest. Your tenure has focused
consulting
on raising the profile of the university through various initiatives. Recently, the Board
professional,
of Regents has requested a plan that outlines the university’s environmental footprint
you will often
and a goal to reach net-zero waste by 2040. As a former business executive, you are
have to resolve
familiar with the principles of ESG, but need to understand what the major drivers of
conflict within
environmental impact at PubU.
t e a m s . Te l l m e
about a time you
Clarifying Information: Note: Provide this only if corresponding questions are asked. successfully
1. How big is PubU? PubU is a large research institution consisting of an undergrad (35k students), graduate
school (10k) and various professional schools (~2k). Number in student body is expected to be stable. The
resolved conflict
university is very large and requires an extensive diesel-powered bus system for students to commute all over in a team
campus. setting.
2. How much money does PubU have available / where does it come from? The average operating budget of
PubU is $2B. Of that $2B, roughly 30% comes from the state, 10% from alumni donations, 20% from the university
endowment (fund that pays out money each year) and 40% from student fees.
3. How does PubU currently get electricity? From the local grid (which uses a mix of coal, gas, wind, and solar). 2. Why should I
The local utility is transitioning to 100% carbon-free by 2030.
4. What does net-zero waste mean? Net Zero means consuming only as much energy as produced, achieving a
hire you?
sustainable balance between water availability and demand, and eliminating solid waste sent to landfills.
5. What is PubU’s goal? As noted in the prompt, a plan to reach net-zero by 2040.
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Framework Guidance:
Solid Waste Energy Water Other Considerations
• Sources • Electricity • Landscaping • State funding for waste-

• Dining halls • Add renewable • Plumbing and other Uses reduction efforts?
• Dormitories generation • Athletic Facilities including golf • Use current budget / re-
• Laboratories • Negotiate with local courses, athletic fields allocate budget
• University Building utilities • Fountains throughout campus • Positive impact on university
• Possible Strategies • Reduce usage recruiting both students and
• Reduction • University Transit faculty.
• Recycling • Bus fleet – diesel • Leverage existing faculty
• Elimination know-how to get
recommendations
A good framework here will hypothesize sources of waste and make preliminary estimates of relative size. A great framework will begin to hypothesize possible solutions and the
considerations that a public university must have when evaluating these projects, particularly regarding impact on reputation / rankings and ability to fund initiatives.

The interviewee should call out the many possible sources of waste and make a justified guess as to which waste stream has the largest impact for the university.
Push the interviewee to flesh out the framework to include specific details to the university (for instance, dining halls) during framework discussion. While cost is
certainly a consideration, this case does not revolve around the estimated return.
To move forward, the interviewee should call out the public transit system of the university. A great answer will include mentioning the inefficiency of diesel buses and
the possibility of electrification.
106
Question 1
• One of the most promising areas identified by PubU is converting the diesel bus fleet to an electric fleet. The Board of
Regents typically evaluates projects on a 5-year basis and have the goal of emitting less carbon dioxide. For the
current diesel fleet, we would like to know the current cost and environmental impact of the diesel fleet?
• Give the candidate Exhibit 1

• Provide the info below for diesel costs when asked, prompt candidate until all information comes out.:
• 1 bus per route, 2 miles per gallon, each route runs on average, four times an hour, for 15 hours a day, seven days a week, 50 weeks a year.
• $6 / gallon of diesel. Other maintenance costs include $20,000 per bus in annual maintenance
• 20 lbs CO2 / gallon of diesel
• Answers:
• Total Annual Cost of Diesel (Round 104 miles to 100 miles, math will be significantly easier if structured as below):
• Miles: 100 miles of routes x 4 routes / hour x 15 hours / day x 7 days / week x 50 weeks / year = 2.1M miles
• Fuel Usage: 2.1M Miles / 2 miles per gallon = 1.05M gallons of diesel Cost = 1.05M x $6 / gallon of diesel = $6.3M
• Maintenance: 25 buses x $20k per year = $0.5M Total Cost: $6.8M per year
• Emissions: 1.05M gallons x 20 lbs CO2 = 21M lbs of CO2

107
EXHIBIT 1
Current Bus Routes and Costs
Area of Campus # of Routes Average Miles Per

Route
Main Campus 8 6
Athletic Fields 8 3
Med Center 4 3
Downtown Mall 5 4
Note: Buses run each route 4 times per hour, 15 hours per day.
108
Question 2
• PubU has received preliminary information from an electric bus manufacturer and the company has promised that their
internal calculations show PubU will save significant amounts of money by switching to electric. We would like to
independently verify the company’s claims. How much money will PubU save by switching to electric?

Interviewee should ask about the following:
Cost per bus: $1M
Annual Maintenance Cost: $4,000 / bus
Bus Efficiency: 4 miles / gallon of diesel equivalent (gallon of diesel equivalent is a measure of energy)
Electric to Diesel Conversion: 25 gallon of diesel equivalent / megawatt-hour (MW-h)
Grid Stats: $100 / MW-h generated, 1000 lbs CO2 / MW-h generated (currently, future is 0)
A great caser should recognize that maintenance cost is 1/5th the diesel cost. The bus efficiency is 2x. This will simplify math. Interviewee should drive case
towards five-year savings and recognize a negative ROI. From an emissions standpoint, this won’t immediately affect carbon emissions. But as mentioned earlier,
the grid is moving to a zero-carbon state.
Answers:
Electricity: 2.1M Miles / 4 miles per gallon of diesel equivalent = 525k gallons of diesel equivalent
525k gallons of diesel equivalent (gde) / 25 gde / MW-h = 21k MW-h
21k MW-h x $100 MW-h =$2.1M / year
Annual Maintenance: 25 buses x $4000 / bus = $100,000 per year
Total Cost = $2.2M / year
Emissions:
21k MW-H x 1000 = 21M lbs of CO2
Cost Savings Per Year: $6.8M – $2.2M = $4.6M Total Investment = $25M…over five years, Save $23M, ROI of (23-25)/25 = -8%.
109
BRAINSTORMING
It seems like the electric bus fleet might not successfully lower emissions. What are some other benefits of switching to an electric bus fleet
outside the framework of carbon emissions?
Local Impact Reputation Boost Future Impacts

• Reduced noise • Increased Student Attraction • Reduced maintenance staff
• Reduced fumes • Increased Faculty Attraction • Opportunity to automate
• Increased student wellness • Increased Research funding • Buses as energy storage

(improved air quality
• Increased public safety (more

advanced, sensors ala Tesla)

Candidate should provide a structure to their thinking and focus on other potential impacts on the university. Universities have multiple
stakeholders including the students, faculty, employees, community and state and local governments. The best candidates will think about
impact on multiple stakeholders.
110
CONCLUSION
Recommendation:
• Either PubU should invest in electric buses or not. Either decision can be justified.
• Should Not Invest: ROI in 5 years is negative, no major change in emissions in short-term. Technology likely to get
cheaper in coming years.
• Should Invest: In 6 years, ROI becomes positive. Eventual path to zero emissions. Significant other benefits.
Risks:
• First Adopter Risk – What are unknowns around the technology that have yet to be identified?
• Infrastructure Requirements – Need to build out significant other infrastructure and training (charging infrastructure, new
maintenance training)
Next Steps:
• Prepare bid documentation and go forward with project.
111
Case Execution:
❑ Good Questions
Feedback:
1 2 3 4 5
❑ Structured
❑ MECE
❑ Creativity
❑ Speed 1 2 3 4 5

❑ Confidence
❑ Poise / Posture
Feedback:
1 2 3 4 5
❑ Clear & Concise
❑ Body Language
❑ Coachability
Total: _____ / 20
112
Whale Hotel
McKinsey | Round 2 | Consumer
113
10 | CASE: WHALE HOTEL B E H AV I O R A L
INTERVIEW
QUESTION:
WHALE HOTEL
McKinsey | Round 2 | Retail 1. As a
consulting
Prompt:
professional,
Our client is a real estate company that owns and operates luxury hotels around the
you will often
world. They’ve previously owned 3 resorts in Dubai and are considering building a
have to resolve
fourth, targeted specifically at high net worth individuals – called whales.
conflict within
t e a m s . Te l l m e
about a time you
successfully
resolved conflict
Clarifying Information: Note: Provide this only if corresponding questions are asked. in a team
1. What’s the payback period? 5 years
2. How long is the construction period? 2 years
setting.
3. What is the tourism industry in Dubai like? Very ritzy and highly seasonal (25% increase in the summer)
4. Does the company currently own hotels in Dubai? No – ignore cannibilization
5. Are there any similar resorts in Dubai? Yes, the King’s Palace, the Belzor, and the Egyptian
2. What would
your learning
team mates say
about you?
114
10 | CASE: WHALE HOTEL
Question 1 – Hand the candidate Exhibit 1

• After looking at Exhibit 1, calculate the total number of whales at expected at each hotel each night.
• Prompt the candidate to do Peak and Off-Peak separately
Exhibit Guidance: Whales Per Night, Off-Peak Whales Per Night, Peak
King’s Palace 5000 * 80% * 25% = 1000 5000 * 80% * 25% = 1000
Egyptian 4000 * 75% * 25% = 750 4000 * 95% * 37.5% = 1425
Belzor 8000 * 75% * 33.3% = 2000 8000 * 100% * 50% = 4000
Total 3750 6425
• Interviewee should identify that:

• Correlation between whale % and swimming pool quality
• Impact of seasonality on overall demand (great candidates will notice that Belzor is at 100% utilization, meaning that there could be
additional demand (for a hotel with an excellent pool) that is not being met
• Steer the interviewee towards the conclusion that the hotel must have an excellent quality pool
• Ask the interviewee what a reasonable rate to charge a whale for a new hotel would be – any rate is acceptable as long as it is supported
logically
115
Question 2 : Market research indicates that a hotel with an excellent quality pool charging $2,500 a night would capture
100% of the whales who stay at the King’s Palace and the Egyptian as well as an additional 250 whales per night during the
off-season and 1575 during the peak season. What is the expected demand for the potential new hotel?
Exhibit Guidance:
• Nightly Whale Demand, Off-Peak = 2000

• 1000 (King’s Palace) + 750 (Egyptian) = 2000
• Nightly Whale Demand, Peak = 4000
• 1000 (King’s Palace) + 1425 (Egyptian) + 1575 (new) = 4000
116
Question 3 – Hand the Candidate Exhibit 2

How many stories will the new hotel require?
Exhibit Guidance:
• Interviewee should recognize that, in order to meet demand of 4000 rooms per night in peak season, the hotel must be at
least 3 stories tall
117
Question 4: Annual operating expenses are $250M per 1500 rooms. Land acquisition is $2B. What is the total initial
investment and would you recommend moving forward with the hotel.
Exhibit Guidance:
• Initial investment:
• Land - $2B
• Rooms - $3B – (3 stories)
• Pool - $.5B – (excellent quality)
• Total - $5.5B
• Annual Revenue:
• $2,500/night * 30 nights = $75K per whale monthly
• 4000 whales * $75K per whale = $300M (peak, monthly) * 3 Month Peak Season = $900M Peak
• 2000 whales * $75k per whale = $150M (off – peak, monthly * 9 Months = $1.35B Off – Peak
• Total Annual Revenue = $2.25B Annually
118
Question 4 (continued): Annual operating expenses are $250M per 1500 rooms. Land acquisition is $2B. What is the total
initial investment and would you recommend moving forward with the hotel.
Exhibit Guidance: • A good candidate will realize that:

• Annual Profit:
• We don’t break even in 5-years
• Annual Revenue - $2.25B
• We will turn a profit, 8 months into year 5
• Annual Opex - $750M ($250M per 1500 rooms * 3)
• We haven’t considered additional revenue
• Annual Operating Profit - $1.5B sources or a potential exit opportunity
• Payback Period: • If time allows – consider asking them how to
raise additional revenue
• 2 years of construction
• 3 years of revenue (3*$1.5B) = $4.5B
• After 5 – years, $5.5B cost - $4.5B revenue
119
Question 5: The real estate company’s CEO is on his way in – what do you recommend?
Exhibit Guidance:
• A candidate can recommend either moving forward with the deal or foregoing the opportunity,
• If they recommend moving forward, they should include that they are evaluating additional revenue streams that will
bring the company closer to a 5-year payback period
• A candidate might choose to turn-down the hotel because of:
• Issues with the payback period
• Competitive response from the King’s Palace, Egyptian, or Belzor
120
EXHIBIT 1
Resort # of Off-Peak Off-Peak Rate Pool Peak* Peak*

Rooms Utilization Whales % Quality Utilization Whales %
King’s 5000 80% 25% $2000/night Poor 80% 25%

Palace
Egyptian 4000 75% 25% $2000/night Good 95% 37.5%
Belzor 8000 75% 33.3% $2500/night Excellent 100% 50%
Note: Peak season runs from June – August 121

EXHIBIT 2
122
Case Execution:
❑ Good Questions
Feedback:
1 2 3 4 5
❑ Structured
❑ MECE
❑ Creativity
❑ Speed 1 2 3 4 5

❑ Confidence
❑ Poise / Posture
Feedback:
1 2 3 4 5
❑ Clear & Concise
❑ Body Language
❑ Coachability
Total: _____ / 20
123
C O N S U LT I N G C L U B AT D A R D E N – C A S E B O O K
ACKNOWLEDGEMENTS
Thank you to everyone who wrote or submitted cases for their year’s book including: Chai Lu Clark, Adele Hunter,
Tejaswi Kambalapally, Robby O’Brien, Adam Potrzebowski, Greg Schwartz, Rohan Sehgal, Supriya Shah Deo, Dan Shi,
Kathryn Sullivan, Casey Ward, Parke Whitley, Jesse Wilkinson
124

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Darden 2020-2021

Darden Casebook 19 Food Frenzy IDEO N/A Retail 34

A Messi Decision BCG 1 Sports 74

THOUGHTS ON FALL RECRUITING

• Expect Competition – very high intern conversion rates this summer;

• Know your Value Proposition – create your personal brand to be

• Stay flexible – expect excellent opportunities (through job postings or

Week 2 Oct. 12 - 15 MO 28-Sep TH 1-Oct MO 5-Oct TH 8-Oct

Week 3 Oct. 19 - 22 WE 30-Sep TU 6-Oct MO 12 Oct. TH 15-Oct

Week 4 Oct. 26 - 29 TU 6-Oct TH 15-Oct TU 20-Oct TH 22-Oct

Week 5 Nov. 2 - 6 WE 14 Oct. TU 20-Oct TU 27-Oct TH 29-Oct

Week 7 Nov. 16 - 19 WE 21-Oct TH 29-Oct TU 3-Nov TH 5-Nov

Alix Partners • Well known in the restructuring/turnaround space

DHL Consulting • DCL job posting

Everest Group • SY Virtual Connect 9/9; job posting on DCL

Note: All events subject to change so check DCL often!

WHO’S HIRING? (CONTINUED)

L.E.K. Consulting • SY webinar on Aug 26th; Current posting in DCL

McKinsey • No events prior to 10/5 interviews

Note: All events subject to change so check DCL often!

WHICH FIRMS HAVE ROLES OPEN TO

Note: Subject to change so check DCL

A Messi Decision BCG 1 Sports 74

3. Any specific goals? Take operating margin positive.

Revenue Opportunities Cost Management Other Considerations

• Ticket Fares • Upfront Investment • Creation of a new domestic

How to Move Forward:

Exhibit or Question Guidance:

Route 1 Route 2 Route 3

* Projected 5-year increase in passenger volume

Exhibit or Question Guidance:

Forecast calculations on next page.

EXHIBIT 5 – CALCULATIONS FOR INTERVIEWER

Route 1 Route 2 Route 3

* 10k/person will be required for training

Route Financials per Filled Seat

Route 1 Route 2 Route 3

In-flight amenities External partnerships Flight structure Misc.

Best candidates display:

Case Book ____________________ Case Type ____________ Difficulty ____________

❑ Presence & Non-Verbal

THE BIG SHOT B E H AV I O R A L

How to Move Forward:

Total Production Costs Forecasted Theatre

Project Huntington Comedy​ 50​ 80​

Life at Ivy Drama​ 100​ 60​

Case Wars Action​ 75​ 75​

Paws at Pav Animation​ 90​ 80​

Anticipated Theater Demand By Genre*

0 500 1000 1500 2000 2500

Exhibit or Question Guidance:

LCA No. of No. of

Single screen $1 5 400 $1 * 5 * 400 * 30 = $60,000

Multi-screen $1.5 10 200 $1.5 * 10 * 200 * 30 = $90,000

Theatre type​ LCA revenues/ticket​ No. of shows/day​ No. of seats/show​

Exhibit/Question Solution Guidance:

Genres​ Single Screen Multi-Screen Total

Exhibit or Question Guidance:

Action 127.5/75 = 1.7 After calculations:

Case Book ________ Case Type Difficulty

Project Huntington Comedy 50 80

Life at Ivy Drama 100 60

Case Wars Action 75 75

Paws at Pav Animation 90 80

Theatre type LCA revenues/ticket No. of shows/day No. of seats/show

Genres Single Screen Multi-Screen Total

Case Book ________ Case Type Difficulty

Case Book ________ Case Type Difficulty

Case Book ________ Case Type Difficulty

Case Book ________ Case Type Difficulty