Before we look at individual Cases, it is important to begin by looking at analysis frameworks that commonly can be used to address Case Study questions. In this chapter, we will outline some of the core frameworks and some additional Consulting concepts that are important to grasp and will form part of many interviews. The frameworks will be helpful to answer certain types of cases, depending on the type of case. In reality, few case interviews or real-life business situations cover just one concept or business problem, so you have to have the flexibility to apply a range of concepts/structures. For example, a Company bringing a new product to market would require a market size analysis, competitor analysis, as well as understanding the key customer segments.
The more you practice, the easier the cases will become and the more articulate and structured you’ll be in your answers.
An important note on this: historically, the vast majority of Consulting candidates have used specific business frameworks to answer cases. Frameworks remain important as concepts to answer Case Studies, but you should absolutely avoid any rigid use of a specific framework. In reality, the main purpose of learning the frameworks is to help you to structure your answers, just as the case situations in our later examples should do.
The key frameworks that follow should be used directly in certain Case situations, but more broadly they should be used as a way to expand your strategic thinking, which is the critical component of success in the Case Study interview process. Ultimately, a top-flight candidate will build his or her own framework/structure for evaluating the Case as it progresses, often drawing from many of the frameworks and concepts in this module, and potentially others. In other words, you should absolutely avoid using the phrase, “I will apply framework X to this case.” However, be aware of the “famous” frameworks in case they are mentioned in an interview setting, and don’t be shy about referencing them as you dive into the specifics of the Case Study you’re evaluating.
Porter’s Five Forces
Porter’s Five Forces has become an incredibly well known framework in the business strategy world. It is probably the most famous of all of them. It was introduced by Harvard Professor and Monitor Consulting firm founder Michael Porter. Porter’s Five Forces is a high-level framework that you can draw upon to perform a market landscape and competitor dynamics analysis. It can help determine whether a market or company is attractive, whether the client for whom the analysis is being performed is a private equity firm thinking about buying a company, or a major company thinking about entering or exiting a certain market segment. In most cases, a Case Study will address at least some of the components found in this framework.
Here are the Five Forces in detail:
Porter’s Five Forces
- Threat of New Entrants (effectively, this is “Barriers to Entry”)
- Legal or regulatory barriers (for example, patents or government contracts)
- Economies of scale
- Cost advantage (for example, unique access to lower raw material costs)
- Access to distribution channels
- Product differentiation (for example, how is this product different?)
- Competitive Dynamics
- Industry growth rate
- Industry fragmentation
- Level of switching costs
- Motivation to reduce prices (for example, from excess capacity)
- Supplier Power
- Level of substitute products
- Buyer’s decision influenced by supplier
- Supplier inputs/products have high switching costs
- Supplier has potential to forward integrate
- Supplier accounts for large share of the inputs/products
- Buyer Power
- High customer/client concentration
- Level of commoditization of product/input
- Level of switching costs for buyer
- Buyer has significant product/market information
- Threat of Substitutes
- Substitute products/services that can compete on price and/or quality
- Switching costs to shift to substitute products
The 3 Cs
This simple framework has been around for a long time as a way to think about any industry or company, and applies broadly to a wide range of Case Study questions. If you compare the description below to that of Porter’s Five Forces above, you will see that there is substantial overlap.
The “3 Cs” approach is to address any Case situation by assessing the:
The 3 C’s
- Company: the first C is about understanding the operations of the Company itself and how the Company makes money.
- Product/service offering
- Pros and cons of product/service
- Value chain
- Profitability analysis
- Revenue (price × volume) and expenses
- Other Company factors
- Core competencies
- Regulatory environment
- Distribution network
- Management and core employees
- Product/service offering
- Competition: the second C is about understanding how the competitors impact your client and how the competitive dynamics will change over time.
- Competitor mix/make-up
- Market share
- Financial situation (for example, deep pocket competitors?)
- Other competencies (for example, marketing or distribution channels)
- Competitor products/services
- Value proposition versus client
- Value chain
- Competitor mix/make-up
- Customers/Clients: the third C is often overlooked but is fundamental, and consists of knowing your clients/customers. Always ask for available customer information, as knowing what your customer wants/needs is important to winning in business.
- Customer mix
- Demographics (age, gender, etc.)
- Value of core customers/clients
- Wants and needs of customers/clients
- Position with customer/client segments
- Customer/client segment sizes
- Customer/client segment shares
- Customer/client segment growth rate
- Key drivers of customer/client decisions
- Product characteristics
- Personnel (especially for B2B)
- Customer mix
The 4 Ps
This framework is often used specifically whenever there is a marketing component involved in a case (for example: how to increase sales resulting from any profitability optimization case, deciding on an approach to enter a market, etc.). When combined with the 3 Cs, this framework can cover many topics and as you practice more Case Study questions, you’ll develop a better sense of when and how to draw from these frameworks.
The “4 Ps” approach is to address a marketing-oriented Case situation by assessing the:
The 4 P’s
- Product: it is critical to understand the Company’s product/service and its value proposition.
- Company product/service qualities, features, attributes
- Commoditized or differentiated?
- Competitor product/service qualities, features, attributes
- Commoditized or differentiated?
- Substitute product options
- How close are the substitutes?
- Value proposition versus substitutes (price, quality, etc.)
- Switching costs
- Customer value proposition
- Why are clients/customers purchasing the product?
- Brand, availability, service, value, reliability, aesthetic, etc.
- Company product/service qualities, features, attributes
- Price: it is critical to understand the Company’s optimal pricing strategy. Price is often the key driver of profitability and success. Review the pricing optimization section for more points on pricing— this also offers a good approach of the key issues to consider on price.
- Price elasticity
- Is our product sufficiently better to justify a higher price? Or is it somewhat commoditized?
- Customer loyalty/lock-in
- Supply/demand: current state of demand and supply for the product or service
- Price of substitute products/services
- Price of competitor products/services
- Market positioning
- Brand position and perception
- What is the cost for the client to produce the product or offer the service?
- Price elasticity
- Placement: this is about getting the products to the customers/clients and how the Company does so.
- Which distribution channels to use?
- Select/exclusive channels or wide distribution network?
- Seamless delivery to customers
- Internal transport or outsource?
- Specific location within the channels
- Specific areas of a site online
- Product placement in stores
- Which distribution channels to use?
- Promotion: This aspect (which could be called “marketing strategy,” if only the word “marketing” started with the letter “p”) is about reaching and attracting the customer/client. There is overlap here with other areas, especially product, because a big part of product is understanding customer wants and needs which helps determine the promotional aspects.
- Which markets/customers should the Company target?
- Customer/client awareness
- Is the Company reaching and attracting its target market?
- What are the most effective marketing campaign strategies?
- Return on marketing spend
- Are we retaining our customers/clients?
- Can we up-sell or cross-sell to our current customers/clients?
- Which markets/customers should the Company target?
SWOT (Strengths, Weaknesses, Opportunities, Threats)
SWOT analysis is more of a mini-framework, specifically for quickly evaluating a single company in an industry. In that regard, it’s far less complete than other frameworks, and can often miss important details. However an interviewer could potentially ask you for a SWOT analysis, and you should be prepared to apply it in that case.
SWOT is effectively a quick, high-level market landscape/competitive dynamics analysis arranged using the following terminology:
- Strengths: Company strengths within an industry
- Weaknesses: Company weaknesses within an industry
- Opportunities: Company opportunities available within the industry (or potentially by branching into a new industry)
- Threats: Company threats within the industry (or potentially from companies whose primary business is in another, related industry, or from disruptive technologies that potentially threaten all companies in an industry)
It should be noted that SWOT can be extended from comparing a specific company to the others in the industry, to comparing a specific industry or sub-industry to other, related industries or sub-industries within the economy. For example, a classic SWOT analysis might entail benchmarking Delta Airlines with the airline industry as a whole; an extension could entail benchmarking the entire airline industry against the broad transportation sector.
You should be very familiar with the well-known frameworks already discussed in this chapter, although it is unlikely that an interviewer would ask you to use a particular framework in your analysis. Instead, it is typically expected that you draw on the concepts encompassed by these frameworks and/or the concepts that we will outline in the next chapter, which breaks down the common Case Study interview question types.
In addition to these frameworks, there are a number of other frameworks that you will read about on certain Consulting firm sites, but you will probably not be expected to know them in detail or apply them specifically in an interview. It does not hurt, however, to be familiar with them. Therefore, we include these example frameworks for your reference and encourage you to at least familiarize yourself with the basics of them:
Additional Analysis Concepts
There are additional, relatively simple analytical techniques that you should be prepared for in Consulting Case Study interviews. These techniques tend to be numerical, and occur frequently, although none are comprehensive or broad enough to fall into the category of a “Framework”:
- Break-Even Analysis
- Fixed vs. Variable Expenses
- Net Profit Margin
- Return on Investment (ROI)
- Compound Annual Growth Rate (CAGR)
- Lifetime Customer Value (LCV; sometimes referred to as “User Lifetime Value”)
- Product Life Cycle
- Opportunity Cost
- Elasticity (Supply or Demand)
- Financial Statements, Accounting, and Valuation
Let’s take a deeper look at each analysis category.
- The gist of Break-Even Analysis cases is that the Fixed Costs of a business—i.e., the costs that are unavoidable—need to be overcome by making profit from sales of products. Presumably, each incremental sale contributes to profit at a rate that can be determined (or at least estimated); the question that is to be answered is, “How many units do I have to sell in order to overcome my Fixed Costs, i.e., to ‘Break Even’?”
- In other words, the Break-Even Point is the number of units sold at which Revenue equals Total Expenses (Fixed Expenses plus Variable Expenses).
- Break-Even Analysis is often applied when deciding whether to develop a new product or make a capital equipment investment, as well as helping in making decisions around how to price products and service and the number of units to produce.
- Formulaically, Break-Even Number of Units = Fixed expenses ÷ (Revenue per unit – Variable Expenses per unit).
- Note that the expression (Revenue per unit – Variable Expenses per unit) is often referred to as the Unit Contribution Margin.
- An understanding of how to analyze Expenses and differentiate Fixed Expenses from Variable Expenses is useful in order to run a Break-Even Analysis of a company.
- Break-Even Analysis can get more complex, as there are microeconomic and macroeconomic considerations that can change both the Fixed and Variable Expenses, but the basic concept is an important one; therefore you will likely come across some form of Break-Even Analysis in Consulting Case Study interviews.
- Note that this concept can also be translated into a question on Break-Even Price, i.e., “Assuming a certain volume of sales, what is the sales price required in order to break even?”
- Formulaically, Break-Even Price = (Fixed Expenses ÷ Sales Volume) + Variable Expenses per unit.
- Note that the expression (Fixed Expenses ÷ Sales Volume) equates to the required Unit Contribution Margin at the assumed Sales Volume in order to break even. In other words, Break-Even Price = Required Unit Contribution Margin + Variable Expenses per Unit.
Fixed vs. Variable Expenses
- Fixed Expenses (or Fixed Costs) are expenses that do typically fluctuate regardless of the production or sales levels. These expenses can be viewed as “unavoidable,” at least in the short-term. Typical examples for Fixed Expenses include Rent, Insurance, Mortgage Payments, and Corporate Overhead Expenses.
- Variable Expenses (or Variable Costs) are impacted by changes in production or sales levels – typical examples include are Raw Materials, Direct Labor Expenses (wages and benefits), and delivery costs.
- Understanding a Company’s Fixed vs. Variable Cost structure is important in a variety of cases (such as in Break-Even Analysis, discussed above).
- When analyzing a Case, always keep in mind that total Fixed Expenses remain constant as volume rises (or falls), but Fixed Expenses per unit decline as volume rises (rise as volume falls). For example, if a computer component manufacturer has $1,000 of Fixed Expenses and produces 100 components, then the $1,000 of Fixed Expenses will be spread across 100 components (= $10 of Fixed Expenses per unit). If the Company produced 200 components, then the Fixed Expenses per unit would decrease to $5 per unit.
- Variable Expenses, meanwhile, rise proportionately as volume increases, so Variable Expenses per unit remain constant.
Net Profit Margin
- When an interviewer asks a candidate to calculate the Net Profit Margin (a.k.a. Profit Margin or Net Income Margin), he or she will usually be referring to the total Net Income of a company or business line as a percentage of its Revenue:Net Profit Margin = Net Income ÷ Total Revenue.
- The interviewer could also refer to Gross Profit Margin, which is simply Gross Profit as a percentage of revenue:Gross Profit Margin = Gross Profit ÷ Total Revenue
- Similarly, the interview may also refer to Operating Profit Margin (EBIT Margin), or EBITDA Margin. In both cases, thus is simply the figure in question (Operating Profit, a.k.a. EBIT, or EBITDA) as a percentage of Revenue.
Return on Investment (ROI)
- Return on Investment (ROI) is a ratio that determines the return, or Profit, from capital invested. ROI is used in consulting interviews as a way to evaluate the return of a particular investment or to assess the feasibility of a potential investment or acquisition. Many companies have an internal ROI metric for capital investments.
- Standard ROI is calculated as follows: Profit from the Investment (Revenue minus Costs) ÷ Capital Invested.
- Note: Return on Assets (ROA) is a variation of this concept, but instead revolves around all capital invested in a project (Liabilities + Equity), rather than just Equity invested, which is typical for an ROI calculation.
Compound Annual Growth Rate (CAGR)
- The Compound Annual Growth Rate (CAGR) is the percentage rate at which any figure, such as number of units sold, a population, or an investment must grow in each year to reach a given end value over a certain amount of time. (Note that this is not the only growth path to grow from a beginning number to an ending number, but it is the only growth path that is the same growth rate every year.)
- The formula to calculate CAGR is: [(Ending Value ÷ Beginning Value)^(1 ÷ Number of Years)] – 1.
- For example: If sales grew from $1,000 in the year 2001, when a store opened, to $2,100 in 2012, what is the CAGR?
- Answer: [(2,100 ÷ 1,000)^(1 ÷ 11)] – 1 = 2.1^(0.090909) = 7.0%
- Thus, the CAGR between 2001 and 2012 was 7.0%.
- CAGR is very similar in concept to Internal Rate of Return (IRR), which is the annual rate of return on an investment if its value grows by a specific multiple over a specific amount of time.
- Use the Rule of 72 to estimate CAGR whenever possible. The rule of 72 simply states that a quantity will roughly double in value whenever the number of years times the annual growth rate equals 72.
- Using the above example, we can see that the quantity slightly more than doubled, so the answer should be slightly above (72 ÷ 11) percent, or slightly above 6.6%. Indeed, it is!
Lifetime Customer Value (LCV)
- Lifetime Customer Value (LCV) projects the total profitability attributed to a firm’s future relationship to a typical customer.
- The idea behind this microeconomic analysis is to determine the reasonable cost to win or acquire a customer (or to maintain an existing customer, i.e., prevent him or her from “churning,” or switching to a competitor). It can also be used to determine level and type of customer service to provide, and as another way to estimate the value of a business. (In theory, the value of a business should equal the number of existing customers × the LCV per customer, plus growth opportunities.)
- The steps to calculate the LCV are as follows:
- Estimate the remaining customer years; in other words, how long is a typical customer expected to last with the company?
- Estimate future Revenue per year per customer, based on product volume per customer × price
- Estimate Total Expenses for producing those products (either separating Fixed Costs out or allocating them on a per-customer basis)
- Calculate the Net Present Value of the future profit (Revenue – Expenses) per customer (in other words, discount these future profits back into today’s equivalent dollars)
Product Life Cycle
- Important for market sizing problems, the Product Life Cycle helps to calculate and project the annual market size for a given market/industry. It is often used by companies to project their own anticipated Revenue figures.
- Formulaically, Annual Market Size = Total Revenue of a product outstanding ÷ Average life of the product. For example, “Total Revenue of a product outstanding” might represent the sticker price of all cars driven in the US, while the “Average life of the product” would be the average number of years a car is driven.
- It is also worth knowing the four steps in the Product Life Cycle Curve, as the concept could come up in a hypothetical product case.
- Emerging: A new product or technology that is in initial adoption phases and therefore has very rapid growth rates (for example: electric cars)
- Growth: Product adoption is becoming widespread but still growing at an above-average rate (for example: smartphones)
- Maturity: Product adoption is widespread, or at least stabilized; growth typically comes only from price increases and growth in GDP (for example: breakfast cereal)
- Declining: Technological obsolescence, shifting consumption patterns, or increased market competition has resulted in total growth rates that are below-average or negative (for example: dairy products or wireline telephones)
- Opportunity Cost simply refers to the concept that if a person or company does X, the person or company necessarily cannot also do Y. This is an important concept throughout business and consumer decision making, as there are only finite resources available in most cases (time, money, etc.).
- Thus, for example, it is unwise for a company to invest $1 million in a project earning $3 million if that same investment prevents it from investing the $1 million in another opportunity that would earn $10 million. In this case, the Opportunity Cost can be defined as the loss of incremental profit of $7 million ($10 million potential profit lost minus the $3 million earned).
- If X does not prevent also doing Y, then there is said to be “no Opportunity Cost” of doing X with respect to Y. In the above example, if the company had $2 million to invest and the capacity to manage both projects, it could reap the profits from both projects, i.e., $13 million.
Elasticity (Supply or Demand)
- Elasticity is a concept from microeconomics that describes the tradeoff between Quantity and Price.
- Specifically, Elasticity is the ratio of a percentage change in quantity to the percentage change in price. Formulaically, Elasticity = % Change in Quantity Demanded or Supplied ÷ % Change in Price.
- For example, if an increase in the price of oranges from $1.00 apiece to $1.50 apiece causes demand for those oranges to fall from 100 units to 80 units, then the % Change in Quantity = –20% and the % Change in Price = 50%. Therefore the Elasticity of Demand = (–20 ÷ 50) = –0.4.
- Note that for normal goods, Elasticity of Demand will always be negative (higher prices mean less quantity is purchased) while Elasticity of Supply will always be positive (higher prices mean that suppliers are willing to produce and/or supply more goods).
- The concept comes up in multiple types of cases, such as pricing optimization. Clients often ask what the impact would be on volume if they adjust the price. Usually the correct answer is to increase prices in Inelastic markets (price increases lead to a relatively small decrease in products sold) and decrease them in Highly Elastic markets (price increases lead to a large decrease in product sold).
Financial Statements, Accounting and Valuation
Unlike Investment Banking interviews, which can be detailed and highly technical in terms of Finance and Accounting, Consulting interviews and the Consulting job itself revolve much more around estimation and exercising business judgment and “what-if” analysis. Rarely would a Consultant be called upon to develop and maintain a detailed, precise financial model for Discounted Cash Flow valuation, for example.
That being said, a basic-to-moderate understanding of the Income Statement, Balance Sheet and Statement of Cash Flows, and how they work together, is very relevant to many interviews. (You might even be provided with a basic Income Statement or Balance Sheet of a company as part of a Case Study interview question.)
Rather than reinventing the wheel and writing content on Finance and Accounting in this guide, we recommend you review any standard, basic Financial Accounting textbook to familiarize yourself with the components of basic Financial Statements:
- Income Statement (Revenue, Expenses, and Profit)
- Balance Sheet (Assets, Liabilities, and Equity)
- Statement of Cash Flows (Cash Flows broken out into the following categories of sources: Operating Activities, Investing Activities and Financing Activities)
We also recommend that you familiarize yourself with some basic core Finance concepts (Net Income, EBIT (Operating Profit), EBITDA, Free Cash Flow, Internal Rate of Return, Net Present Value, and Enterprise Value are good places to start) and core Valuation techniques (Cost of Capital, Comparable Company Analysis, Precedent Transaction Analysis, Discounted Cash Flow analysis, and Leverage Buyout analysis). Although these concepts will not be tested and do not form a major part of general Consulting Case Study interviews, these topics can appear in a general discussion about a particular business situation and you should be able to discuss them at least on a basic level.
If you are applying for a job in Business Development, or for a Consulting position in a Corporate Finance group or at a firm that does a lot of Corporate Finance Consulting work, then you should definitely study up and be prepared for these core Finance and Accounting concepts, because they will likely be tested on in detail in your interviews. In addition to introductory Finance and Accounting textbooks, we highly recommend that these candidates read the Street of Walls Investment Banking Technical Training guide, which addresses complex details around Financial Statements, Accounting and Valuation at a very detailed level. (We also recommend this training guide in general to anyone who is interested in advancing their Finance and Accounting skills—particularly when it comes to Corporate Valuation.)←Consulting Case Study Interview: OverviewConsulting Case Study Types→
McKinsey interviews are among the hardest job interviews you will come across. The questions are difficult and specific to McKinsey and the interviewer can sometimes seem intimidating.
But the good news is that with the right preparation it can actually become relatively straightforward to succeed at a McKinsey interview. We have put together the ultimate list of facts and tips you need to know to maximize your chances of success.
1. One in ten interview candidates get a job offer
First, it is important that you understand the different stages of your interview process with McKinsey and your chances at each step. In most countries, McKinsey usesfour filters to select candidates:
- CV and cover letter screening
- McKinsey Problem Solving Test (PST)
- First round of interviews
- Second round of interviews
In arecent interview, Dominic Barton, McKinsey’s Global Managing Director, revealed that about 1% of the 200,000 candidates applying to the firm every year receive a job offer.
Assuming a 33% success rate at the four steps of the recruiting process described above, we estimate that McKinsey interviews about 21,000 candidates every year and that they extend a job offer to about 2,200 of them. If you have been invited to a first round interview with McKinsey, you therefore have a 10% chance of getting an offer.
- Filter 1 / CV and cover letter: 200,000 candidates
- Filter 2 / McKinsey PST: ~65,000 candidates
- Filter 3 / First round of interviews: ~21,000 candidates
- Filter 4 / Second round of interviews: ~6,800 candidates
- Job offers: 2,200 candidates
The good news is that the first and second round interviews are really manageable when you know what to prepare for. The first thing to focus on is really trying to understand what skills McKinsey is testing for in case interviews.
2. Skills tested by McKinsey case interviews
McKinsey uses case interviews to test three types of skills that are used by consultants in their daily job:
- Problem structuring and maths skills
- Creativity and business sense skills
- Communication skills
First, McKinsey already started testing your maths skills with itsProblem Solving Test. This skill will continue being tested during case interviews and you will be expected to perform mental maths both quickly and accurately. In addition, your interviewer will also ask you to solve the problem at hand in a structured way. In simple terms, that means you will be expected to solve the questions you are asked in a clear step-by-step approach that is easily understandable by your interviewer.
Second, McKinsey case interviews are designed to evaluate your business sense and creativity. That means your interviewer will assess your ability to come up with a range of ideas that make business sense to solve the client issue at hand. For instance, you could be asked to find innovative ideas for a restaurant to grow sales, or to decrease costs.
An important nuance is that interviewers will not assess your business knowledge per se. In other words, you are not expected to have any knowledge of the industry your case will be about. For instance, you could get a case about re-insurance and not know what the re-insurance industry is. This is perfectly normal. In these situations, your interviewer will expect you to ask questions about the industry and will help you understand its specificities.
The only expectation is that you know basic business concepts such as revenues, fixed and variable costs, etc. We have summarized the finance concepts you need to know for consulting interviews here.
Finally, your interviewer will also test your softer skills. This includes how you communicate your ideas and interact with others. Good soft skills are critical to deal with clients as a consultant and a lot of interviewees underestimate their importance. To put things simply, you should try to communicate your ideas in as a structured way as possible during case interviews and behave in a professional way.
Take a look at the following excerpt of one of our McKinsey live case interview videos to find out what a good, consistent approach to answering case interview questions sounds like.
3. Differences between 1st and 2nd round interviews
The second important thing to understand is the number of case interviews you will have and how they will differ. In most cases, you will have two rounds of interviews. The number of interviews by round may vary but it is usually between 2 and 4. In total, you will therefore have between 4 and 8 interviews before getting a McKinsey job offer.
First and second round interviews are similar in format and difficulty. However, your first round interviewers will usually be more junior than your second round ones. Associates (2+ years of experience) or Engagement Managers (4+ years of experience) usually lead first round interviews while the second round is led by Partners (10+ years of experience).
In theory, McKinsey takes into account your performance at both first and second round interviews when it makes the decision to make you an offer. However, in practice, your performance during the second round carries a bigger weight simply because Partners will have a stronger voice when the recruiting group will get together to make a final decision on your application. It is therefore particularly important that you do well at your second round interviews.
Let’s now look at how interviews are structured and help you prepare for each of the different sections. Your interviews will usually last between 45 and 60 minutes and consist of two parts:
- Personal Experience Interview – for 25% of the interview time
- Case Interview – for 75% of the interview time
Let’s first focus on personal experience interviews.
4. Personal Experience Interview
The PEI part of your interview will last about ten minutes. It is fairly different from a typical “CV interview” mainly because your interviewer will only assess you on a single topic. Interviewers at other firms tend to cover a large range of topics during a “CV interview” but that is not the case at McKinsey.
The good news is that the topics on which you will be assessed are very predictable. They are made relatively clear on McKinsey’s career website: personal impact, leadership abilities, entrepreneurial drive and problem solving skills. For instance you could be asked: “Tell me about a time when you led a group of people through a difficult situation” or “Tell me about a time when you had to solve an extremely difficult problem”.
Our recommended approach to prepare for these questions is to craft a story for each of the four skills McKinsey will test you on. You can then use and adapt these stories depending on the exact question your interviewer will ask. There are different structures you could use to tell your story but we recommend keeping it relatively simple:
- Context: start by giving the necessary context on the example you are using
- Problem: outline the problem you and your team were facing
- Solution: explain the solution you came up with to solve the problem outlined
- Impact: if possible, quantify the impact you had in solving the problem
- Lessons: finish by any lessons you might have learned in the process
There are two common mistakes candidates make when answering McKinsey PEI questions. First, a lot of candidates spend too much time on setting the context when telling their story. Second, some candidates forget that the question is about them. They should therefore focus on what they did, what their impact was on the situation they are telling their interviewer about. When you craft your four stories you should keep these common pitfalls in mind and try to avoid them.
For more details and example answers, you should read the following blog post on how to impress your interviewer when answering Personal Experience Interview questions.
5. McKinsey case interview structure
After thePEI question, your interviewer will then move on to the case interview.
In this part of the interview, you will be presented with a business case about a company facing an issue. For instance, your case could focus on an industrial facility facing a profit challenge, or a company that needs help to make a strategic decision on a new product. Cases are usually a simplified version of real projects your interviewer worked on in the past.
Your interviewer will tell you about the situation the company is facing and will ask you questions about the situation. She may also provide you with documents such as graphs and tables with figures about the company. You will be allowed to use scrap paper to structure your thoughts and perform calculations. However, you will not be allowed to use a calculator.
Most McKinsey case interviews use the following structure:
- Framework question
- Quantitative question
- Creativity question
First, your interviewer will introduce you to the company’s situation and the business problem they are facing. Then, the interviewer will ask you to identify the areas you would look at to solve the problem at hand -this is the framework question. You will then be asked to solve one or several quantitative questions that will help further investigate the problem faced by the company and draw some initial conclusions.
In addition, at some point during your interview, you will be asked a creativity question. These are usually open-ended question such as “what are the other areas the company could look at to increase its online sales?”. Finally, at the end of the case, your interviewer will ask you to make an overall recommendation for the company based on the analysis you have just carried out.
Although the format and order of questions may vary from one case to the next, you will almost invariably come across these types of questions during your McKinsey interviews and should therefore prepare for them. To find out more about the format of case interviews, you can download our Free McKinsey Case Prep product here.
An additional exercise we would recommend doing is to take a look at the different case interviews available on McKinsey's website. As you go through each case, you should try to map each question to the 5 types of questions we have listed above.
6. Differences between McKinsey and other cases
All consulting firms use case interviews during their recruiting process. But McKinsey interviews are different in two regards.
First, McKinsey interviewers tend to control the pace of the interview much more than other interviewers. They’ve got a list of questions about the case they want to go through with you and will take you from one question to the next. If they feel you spend too much time on one question, they might interrupt you and ask the following question. Some people call this “interviewer-led”case interviews. At other firms such as Bain or BCG, interviewers give you more control over the pace of the interview. Some people call this “interviewee-led” case interviews. The skills tested in both types of cases are the same but you should expect slightly different behaviours from your interviewers.
Second, there is a lot of competition to get into McKinsey, and your interviewer will probably challenge the quality and logic of your answers more than at other firms. That being said, interviewers are instructed to always be well intentioned and therefore will not try to “trip you up” or misguide you.
Let’s now walk through the skills you need to develop to be able to impress at these difficult case interviews.
7. Develop confident maths skills
It is almost impossible to crack case interviews without being able to perform maths calculations quickly and accurately. This is because every case interview at McKinsey includes quantitative questions and you will not be allowed to use a calculator to answer questions.
When you start preparing for case interviews, it is common to have relatively rusty maths skills. However, in our experience, successful candidates take the time to refresh their memories and learn a few maths shortcutsat the startof their preparation. This initial time investment provides them with the confidence they need to perform calculations confidently in case interviews.
We definitely encourage you to make this initial time investment. In fact, this maths preparation is the first step of the McKinsey Case Interview Training Programme we have put together. To help you refresh your maths skills, here are also a few mathsshortcutsyou should consider using.
8. Acquire a consistent answering method for each type of questions
As mentioned previously, McKinsey case interviews follow a pre-defined set of questions: situation, framework, quantitative, creativity and recommendation questions. It is therefore critical that you learn to quickly recognise these types of questions and that you develop a consistent method of answering them. Approaching each question with a pre-defined method will enable you to build stronghabits. On the day of your case interview, these habits will make a huge difference as they will reduce your stress and save you a lot of time and mistakes.
At IGotAnOffer, when we were preparing for case interviews, we were frustrated by the lack of consistent method that existed to crack case interviews. We have therefore developed a method to consistently answer McKinsey case interview questions. After being successful at case interviews, we then set out to share this “IGotAnOffer” method with future generations of candidates through ourMcKinsey case interview programme.
Having a consistent method to answer different case interview questions may feel a little mechanical at first. But trust us, if you stick to a pre-defined method you will experience a step-change in your performance that will help you get a job offer at McKinsey.
9. Practice out loud
Another key element to succeed at case interviews is practicing in real conditions. If you can practice case interviews with a partner you should definitely do so, that will help you progress faster.
However, when you practice by yourself there still is something you can do to recreate case interview conditions: practicing out loud. While this may sound a little awkward at first, in our experience, candidates who have forced themselves to use this technique have progressed much faster than others.
When you practice out loud, you should both play the role of the interviewer and the interviewee. You should ask yourself the questions your interviewer would ask you and then answer these questions out loud as if you were in the interview.
The reason this technique works so well is that it forces you to practice communicating your answer to your interviewer. As mentioned previously, communicating in a structured and simple way is a key skill assessed by McKinsey. Developing this skill as much as possible will make a big difference on the day of the interview.
10. Learn from every case
Finally, the best candidates learn as many things as possible from every case they do. In our experience, it is much better to train on 20 case interviews and to learn a lot from them than to train on 40 and not learn much.
To ensure you make the most of each case you practice on, we recommend that at the end of each case, you write down what you have learned as well as the main mistakes you have made. After a few days you should then do the case again. This approach will enable you to make sure that you apply what you have learned and to ensure you are making progress.
McKinsey interviews are challenging because there is a lot of competition for the job, interviewers can be a little intimidating and there is quite a lot of ground to cover in your preparation. However, if you follow the tips listed above it is completely feasible to get a job at McKinsey.
In addition we have put together a McKinsey Case Interview Training Programme to help you land the job. Since we launched the programme at the beginning of 2016, more than 80% of candidates who used it landed a job at McKinsey. We know this because we give 50% of their money back to people who do not get an offer.
If you would like to learn a method to consistently crack the case you can get started below:
Free Case Interview Prep
McKinsey Case Interview Training Programme
Any questions about McKinsey case interviews?
If you have any questions about McKinsey case interviews, do not hesitate to ask them below and we will be more than happy to answer them. All questions are good questions, so go ahead!
The IGotAnOffer team
Photo: Ed Gregory / Stokpic