Crack the Case. D. Ohrvall

Candidate Review Sheets

Pack: 008 page 28 of 29

A Logical Flow Using the FRAME Method™ A Logical Flow Using the FRAME Method™

E– End the Case

What is the candidate’s final conclusion? This should come within five minutes of the end of the interview so that you have time to discuss it. If s/he is not getting to a clear answer or if you’re running out of time, ask:

•How would you wrap this up?

•So, what’s your conclusion? Which four shoes would you eliminate?

•I just got a call from the CEO; she’s going to drop by in a few minutes and wants to hear your thoughts on our new line. What do you want to tell her?

Additional Discussion Points

•By eliminating some shoes we make room for others, but what if the new shoes perform worse than expected?

•Do you believe you have determined the most optimized combination of shoes?

SuggestedSuggestedAnswers,Answers,DiagramsDiagramsandandBehaviorsBehaviors

Good Ending: “Eliminating the following four shoes is the best solution for Clark & Gable: Everyday Camel, the Sierra, the Randy and Neuman. I’m basing my decision on historical measures of success for new products. These shoes represent one-third of our total gross margin from the first six months, but because they do not meet our six month benchmark of 2,950 units, I don’t think they have long term potential. Most of them turned off our loyal customers as well. I want to look into the new line and ensure that the gaps left by these eliminations are filled.”

(Good reasoning for eliminating the four shoes. I like the use of numbers to back up your answer. You are obviously ready to follow up as well.)

OK Ending: “Eliminating the following four shoes is the optimal solution for Clark & Gable given the data I have: Everyday Camel, the Sierra, the Randy and Neuman. Two of these shoes are liked less by loyal customers and most importantly do not meet the historical unit threshold for successful products. Their removal will create somewhat of a gap in the “beach” and “hip” niches, but Wave 2 will likely fill those holes.”

(Good reasoning for eliminating the four shoes. If you say “optimal,” be sure you have compared it numerically to some other options. I don’t sense that you did.)

Poor Ending: “Everyday Camel, the Sierra, the Randy and Neuman all need to go for a variety of reasons. Mainly, the customers don’t seem to be buying them, and our loyal customers don’t really like them. Wave 2 will hopefully give us some better options.”

(You could spend a little more time expounding on your reasoning.”

Candidate Self Assessment

Pack: 008 page 29 of 29

Analytics

7. I analyzed the data well on a piece by piece basis.

8. I integrated data well and reached insights (saw the big picture).

Recommendation

9. My final recommendation was to the point and data driven.

10. I was persuasive in making my final points.

Total Score:

(10-60)

Do this self assessment before asking the interviewer for feedback. How did your numeric score compare to the one the interviewer gave you? What is your top priority going forward?

C

Pages 21 - 28

Candidate

•Working with an interviewer: Remove pages 3 through 6 to take notes and do your

work. Give the rest of the pack to your interviewer. Interviewer prep is about 10-15 minutes for this case.

•After the Interview: Rate yourself using the Self Assessment sheet in the back of the case pack. Review the feedback score and comments from your interviewer and discuss ways to improve. Review the suggested answers in the case.

•Self-study: Remove pages 3 through 6 to take notes and do your work. Remove any data handouts and place them face down. Follow the three Self Study Steps listed on these sheets. This self study method will help you form your plan, practice asking good questions and improve your ability to pull insights from the data slides. Keep in mind that you will benefit most from working with an interviewer who can evaluate your performance objectively.

Throughout these notes references will be made to the MVM™ (Maximum Value Model) and the FRAME Method™, the building blocks of the One Model/One Method™ approach to case interviews. Full descriptions of these unique tools, as well as additional cases, can be found in the book, Crack the Case: How to Conquer Your Case Interviews, available at www.consultingcase.com.

Interviewer Fact Sheet

Pack: 009 page 7 of 28

IntroIntroFactsFacts

(Tell(Te lthetheCandidateCandidateififAsked)Asked)

•Products: pretzel twists, ties and rods

•Products: pretzel twists, ties and rods

packaged in party-sized bags packaged in party-sized bags

•Competitors: Houdini Pretzel and Smith’s

•Competitors: Houdini Pretzel and Smith’s

make up over 70% of industry revenue. make up over 70% of industry revenue.

Private label products contribute an Private label products contribute an

additional 15%. additional 15%.

•How Private Label (PL) Works: Private

•How Private Label (PL) Works: Private

label products are the “generic” brand label products are the “generic” brand

products you find in your grocery stores. products you find in your grocery stores.

They typically are sold under a brand name They typica ly are sold under a brand name

that matches the store name (e.g. “Acme that matches the store name (e.g. “Acme

Foods”). Grocery stores get their generic Foods”). Grocery stores get their generic products produced by the same products produced by the same

manufacturers that make branded product. manufacturers that make branded product.

Usually the generic recipes are slightly Usua ly the generic recipes are slightly

different and often of lesser quality. different and often of lesser quality.

•Branded Company Perspective on PL:

•Branded Company Perspective on PL:

Companies that have branded products like Companies that have branded products like

to fill the excess capacity in their plants with to fi l the excess capacity in their plants with

private label products. They don’t like to private label products. They don’t like to

compete with these private label products, compete with these private label products,

but often regard them as a necessary evil. but often regard them as a necessary evil.

On-Track Indicators

Establishes a baseline early – asks for historical pricing to assess the problem

Recognizes the complexity of the problem – outlines the competing and symbiotic elements

Thinks like an owner – comes up with solutions that are more than theoretical, but instead tries to practically take advantage of Houdini’s strengths

KeyKeyInsightsInsights

(Do(DoNotNotTellTe lthetheCandidate)Candidate)

Historical Pricing: In slide Handout A, prices Historical Pricing: In slide Handout A, prices

for private label have begun to fall since for private label have begun to fa l since

October ’02. Houdini and Smith have October ’02. Houdini and Smith have

stayed relatively constant. stayed relatively constant.

Pricing Gap: Since October ’02, the pricing Pricing Gap: Since October ’02, the pricing

gap between Houdini’s pretzels and private gap between Houdini’s pretzels and private

labels has exceeded 15 cents. When the labels has exceeded 15 cents. When the

savings per unit is this large, consumers savings per unit is this large, consumers

switch from Houdini’s to private label switch from Houdini’s to private label

products.

products.

Volume Change: The shift in pricing gap has Volume Change: The shift in pricing gap has

caused a reduction in the volume of caused a reduction in the volume of pretzels Houdini sells.

pretzels Houdini se ls.

Plant Manger Incentives: Plant managers Plant Manger Incentives: Plant managers have an incentive structure that affects have an incentive structure that affects

their personal bonus. If they keep plant their personal bonus. If they keep plant

capacity above 90% then there are no capacity above 90% then there are no

“losses” to the company. If the plant “losses” to the company. If the plant

utilization falls below 90% then the utilization fa ls below 90% then the

company loses money. These “losses” are company loses money. These “losses” are

accounting measures though, and are not accounting measures though, and are not

necessarily actual bottom line dollars. necessarily actual bottom line do lars.

Off-Track Indicators

Does not build a fact base – this case cannot be solved without establishing a pricing trend over time

Oversimplifies Houdini’s role – pricing strategy requires consideration of both customers and competitors

Misses critical supporting elements –

Houdini has to ensure that changing its pricing structure will not hurt other areas of its business

Case at a Glance

Pack: 009 page 8 of 28

Case at a Glance

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