Latest / Interview Prep with Fexingo: Behavioral Questions, Case Studies, and Hiring Manager Insights / How to Answer the Case Interview Question
Transcript
- Lucas: You're sitting across from a partner at a top consulting firm. She slides a single sheet of paper across the table. It says: 'A regional coffee chain wants to enter the Chicago market. Should they do it?' What happens next determines whether you get an offer. Luna: And if you've never done a case interview before, that sheet of paper might as well be in ancient Greek. Lucas: Right. So today we're going to demystify the case interview—specifically, how to structure your answer so you sound like a consultant, not a deer in headlights. Luna: And we'll use a real example—the coffee chain case. I actually used this one when I was prepping for consulting interviews a few years ago. Lucas: Perfect. So let's start at the beginning. The first thing you do when you get that case is not start talking. What do you do? Luna: You ask clarifying questions. You need to understand the objective. Is 'should they enter' about profitability? Market share? Something else? Lucas: Exactly. And in this case, you'd ask: 'What's the chain's current footprint? Are they premium or value? Are we looking at a five-year horizon or a ten-year horizon?' The interviewer will give you the parameters. Most candidates skip this step and jump straight into analysis. Luna: And that's a red flag. So let's say the interviewer tells you: the chain has 50 locations in the Midwest, they're mid-tier pricing, and they want to know if entering Chicago will be profitable within three years. Lucas: Now you structure your approach. The classic framework here is Porter's Five Forces. Let's walk through it. First force: threat of new entrants. Luna: In Chicago coffee, that's high. Anyone with a roaster and a storefront can open up. Lucas: Right. But you need to be specific. In Chicago, the barrier to entry is low—real estate is expensive, but not prohibitive. So you'd note that as a negative for our chain. Second force: supplier power. Luna: Coffee beans are a commodity, so supplier power is low. Unless you're using a single-origin specialty bean, but that's a cost issue. Lucas: Exactly. Third force: buyer power. In Chicago, customers have tons of choices—Starbucks, Dunkin', local shops. So buyer power is high. That means you need a differentiation strategy. Luna: Fourth force: threat of substitutes. Not just other coffee shops, but tea, energy drinks, even home brewing. Lucas: Right. That's high too. And fifth: competitive rivalry. Chicago is saturated. You've got national chains and beloved independents. So overall, the industry is unattractive—but that's just the macro view. Luna: Which is why you don't stop there. You have to dive into the specific company's capabilities. Lucas: Exactly. That's the next step. After the industry analysis, you look at the company's internal strengths. What's their brand recognition? Do they have a loyal customer base? What's their cost structure? Let's say they have a unique loyalty app that drives repeat business—that's a strength. Luna: And then you do a financial analysis. Estimate the market size in Chicago, the expected market share, revenue per store, costs. You need to see if the numbers work. Lucas: And here's where many candidates get stuck: market sizing. They freeze because they don't know the exact population of Chicago. But the interviewer doesn't expect exact numbers—they want to see your logic. Luna: So walk us through a quick market sizing for Chicago coffee. Lucas: Okay. Chicago metro area: roughly 9.5 million people. Assume 80% are adults—so about 7.6 million. How many drink coffee? Let's say 60%—that's 4.6 million coffee drinkers. How often do they buy? Average maybe 3 times a week. That's 13.8 million purchases per week. Average spend per purchase: $5. So weekly market size is $69 million. Annual: about $3.6 billion. Now, our chain targets 1% market share in three years—that's $36 million in revenue. If each store does $1 million annually, they need 36 stores. Can they open 36 stores in Chicago profitably? That's the question. Luna: And you just did that in about 30 seconds. The key is being comfortable with rough numbers and stating your assumptions clearly. Lucas: Exactly. Now, a common mistake is to present your analysis without a recommendation. At the end, you need to say: 'Based on this, I recommend they enter Chicago, but with a phased approach—start with 10 stores in high-traffic areas, then expand.' Luna: And be ready for pushback. The interviewer might say: 'But what if the cost of real estate is 20% higher than you estimated?' You need to show you can adjust your analysis on the fly. Lucas: That's the stress test. So let's recap the formula: one, clarify the objective. Two, structure your approach using a framework like Porter's Five Forces. Three, do the market sizing. Four, synthesize into a recommendation. Luna: And practice it out loud. The first time I did a case, I stumbled through the market sizing. After 10 practice runs, it became automatic. Lucas: That's the takeaway. You don't need to be a math genius. You need to be structured, calm, and conversational. The case isn't about the right answer—it's about how you think. Luna: So if you have an interview coming up, grab a friend, pick a framework, and run through a case tonight. You'll be amazed how quickly it clicks. Lucas: And if you don't have a friend, talk to yourself. Seriously. Record your voice and listen back. You'll hear where you ramble or lose the thread. Luna: That's good advice. Next episode, we'll tackle the 'brainteaser' question—like why are manhole covers round? Lucas: I'll bring my geometry hat. For now, start practicing those cases.