case interview...
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Case Interview Workshops
#1- Fit Interviews & Profitability
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The Johns Hopkins Business & Consulting Club
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The JHBCC aims to introduce the Johns Hopkins community to the world of business and consulting by helping students and staff:
The JHBCC as a resource for you to:Learn, practice, and network
Develop business knowledge and consulting skills through workshops, seminars, and bootcamps
Network with experienced professionals and established firms via case competitions and infosessions
Build valuable experiences in leadership, teamwork, & communication
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2010 2014
50
200
•PhDs
•Post-Docs
•PhDs
•MDs
•MBAs
•Post-Docs
•Masters
•Undergraduates
The JHBCC welcomes everyone!APDs, Masters, Undergrads
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The JHBCC brings you memorable experiences and lasting friendships:
Current and past members have continued to support each other as well as the large Johns Hopkins community:
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The JHBCC has accumulated a huge alumni network in the industry
Alu
mn
i
Netw
ork
2010 2014
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The JHBCC Timeline of Events:Stay tuned!
1. Bi-weekly Case Study Workshops (Fall & Spring)
2. Fall Mini-Case Competition (November 7, 2014)
3. Business and Consulting Bootcamp (February 2015)
4. Spring Biotech Case Competition (April 2015)
5. Recruiting Info-sessions (Fall & Spring)
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The JHBCC Timeline of Events:Stay tuned!
1. Case Study Workshops (Fall & Spring)
Date Style Topic Room
Sept. 10th, 2014 Tutorial General/Fit & Profitability SPH W2008
Sept. 24th, 2014 Tutorial Business Situation SPH W2008
Oct. 8th, 2014 Tutorial Business Situation SPH W2008
Oct. 22nd, 2014 Tutorial M&A SPH W2008
Nov. 5th, 2014 Demonstration Profitability SPH E9519
Nov. 19th, 2014 Demonstration Business Situation SPH E9519
Dec. 3rd, 2014 Demonstration M&A SPH E9519
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Case Interviews: Types of Questions
1. Growth:a. Top-line (revenue) growth
b. Bottom-line (profitability) growth
2. Business Situationsa. New products or services
b. Market entry
c. Competition
d. Pricing and valuation
e. Operations
3. Merger & Acquisitions
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Case Interviews: Typical Format
1. Establishing Background:1. Interviewer introduces case
2. Understanding objectives
3. Clarifying questions
2. Structuring Approach: 1. MECE
3. Analysis1. Quantitative
2. Qualitative
4. Recommendation
5 min
3-4 min
15-20 min
1-3 min
*Interviews can also be interviewer-led or interviewee-led
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Structuring & Analysis: Strategic Options
Growing Revenue
Existing Rev. Streams
Achieving Better Price
Sell more (new & old)
Better Product Mix
Expand into New
Markets
Sell to new customers
Develop new
offerings
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Structuring & Analysis: Areas to Explore
1. Market & Competitive Landscape:a. Existing market share
b. Growth rate comparisons
c. Competitive advantages or disadvantages
2. Customersa. Customer preferences (price, quality, feature, channel etc)
b. Segmentation and growth rates
3. Productsa. Product mix (compared with competitors)
b. Performance and trends
4. Companya. Capability & resources
b. Intangibles (brand considerations, management preferences etc)
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Our client, Magna Health, insures patients and provides health care services.
Employers pay a fixed premium to Magna for coverage of all necessary health
services for their employees.
Magna currently has 300,000 patients enrolled in its plan. It has 300 salaried
physician employees who provide services to patients in 6 centers. These
physicians represent a wide range of specialty areas, but not all areas. When a
patient needs medical treatment in a specialty area not covered by a Magna
physician, they are referred outside of the Magna network for care, and Magna
pays all referral costs on a fee-for-service basis.
Over the past six months, Magna has been experiencing declining profitability.
Magna’s CEO has retained McKinsey to help determine what is causing the
problem and how Magna might fix it.
How can Magna Health improve its financial situation?
Establishing Background: Case Information
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Our client, Magna Health, insures patients and provides health care services.
Employers pay a fixed premium to Magna for coverage of all necessary health
services for their employees.
Magna currently has 300,000 patients enrolled in its plan. It has 300 salaried
physician employees who provide services to patients in 6 centers. These
physicians represent a wide range of specialty areas, but not all areas. When a
patient needs medical treatment in a specialty area not covered by a Magna
physician, they are referred outside of the Magna network for care, and Magna
pays all referral costs on a fee-for-service basis.
Over the past six months, Magna has been experiencing declining profitability.
Magna’s CEO has retained McKinsey to help determine what is causing the
problem and how Magna might fix it.
How can Magna Health improve its financial situation?
Establishing Background: Case Information
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Establishing Background: Clarifying questions
A. Clarify terminologyWhat is premium?
A: The specified amount of payment required periodically by an insurer to provide
coverage under a given insurance plan for a defined period of time.
B. Clarify objectivesIs there a specific profitability goal that our client wants to achieve? By when?
A: No, at this time the CEO just wants to see how they can improve ASAP.
C. Clarify scopeIs our client in the U.S.? Should we only consider the domestic market?
A: Yes, you can just focus on our current operations, which is in the Midwest.
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Structuring Your Approach
Question 1. What key areas would you want to explore in order to
understand Magna’s decline in profitability?
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Identify Key Insights:Find the root cause/problems
Question 2. After reviewing the basics of Magna’s business, your
team believes that one of the root causes of Magna’s financial
problems is how it manages medical costs, particularly the cost of
referrals to specialists outside its physician network.
Your team has gathered the following information on Magna and
its primary competitor, Sunshine HMO:
What are the most likely reasons that the average cost of referral
at Magna is higher than at Sunshine?
Number of
patients
Average cost of referral
(per member per month)
Magna Health 300,000 $20
Sunshine HMO 500,000 $15
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Question 3. Magna’s CEO has a hypothesis that Magna is paying too
much in cardiology referral costs for its patient population. He asks
the McKinsey team to look at Magna’s cardiac patient population
more closely and tell him how many referrals he should expect on an
annual basis. Assume the following:
• Magna has 300,000 patients in any one year
• 20% of its patients are age 65 or older
• In the U.S. patients with serious heart disease visit specialists
(cardiologists) on average 5 times per year
Quantitative Analysis:Determining the scale/impact of the findings
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Question 4. When the team tells Magna’s CEO that based on Magna’s
patient population he should expect about 210,000 cardiology referrals
a year he exclaims, “We currently pay for 300,000 annual cardiology
referrals for our patient population!”
Why might Magna’s annual cardiology referrals be significantly
higher than U.S. averages?
Qualitative Analysis:Understanding the HOW and the WHY
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Question 5. After some additional investigation, your team decides that
changing the behavior of Magna’s primary care physicians has potential
to reduce cardiac referral costs while maintaining high quality care.
What should the client do?
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Developing Your Recommendation:Synthesize and Structure
Question 6. The CEO of our client is meeting with us in about 10 minutes,
why don’t you summarize what you know and make a recommendation to
him when he comes in.