Handling the Business Case Interview Question
Posted by Joe El Rady in MBA
While MBA applicants generally prepare for fit and even sometimes behavioral interview questions, there is a another, lesser known interview type that exists: the business case interview.
A business case interview question involves a brief and easily summarized business problem that an applicant must explore and explain. Generally, such questions do not have “correct” or “incorrect” answers; the interviewer seeks to hear and ascertain an applicant's ability to think through a business problem...on the spot.
In a very recent and real example of a business case question, an interviewer at Notre Dame’s MBA program asked an applicant the following:
“You are a manufacturer of golf balls. Sales are up 10% but market share is down 14%. What would you look at and do to correct this?”
The first step in answering a business case question like this is to frame the issue. Show that you understand the problem and can articulate that understanding.
The problem here is the market for your product is growing and even though your sales are growing, they are not growing fast enough to keep up. You are not maintaining your share—meaning that you are not capturing the growth rate of the market. Since your share of the market is decreasing, that means your competitors are capturing more of the growth than you are. That’s the scenario. Now you need to walk through why this may be happening, how you would learn/confirm why this is happening, and what you can do about it.
In discussing the reasons for the above situation, you must show that you understand the breadth of business and business analysis, not just particular areas. Approach the issue like a funnel, dealing with the wide, broad issues first, then narrowing to granular concerns. Ideally, your answer should be non-linear. You should explore several issues as “apex points” that spawn sub-issues that also need to be explored. The mental image you should draw in structuring your answer is that of a branch analysis (like a factor tree in mathematics).
Start very broadly.
Prior to even delving into specifics of sales or marketing, start with the supply vs. demand issue. The first issue you should raise: do we have a demand problem or a supply problem? Don’t assume that your product is not as popular as your competitors’ or that your competitors are more innovative or better at branding—all of this may be true; however, you first need to examine whether you have a supply problem or a demand problem. If you have a supply problem, this means that you are not manufacturing enough product to meet demand. You would ascertain this by learning whether your sales channels are stocked out frequently. If this is the case, then you need to find out why: either you have supply chain issues, or you have a financing problem (not enough cash flow to produce enough product).
Examine the demand side.
If you are supplying enough product to your sales channels but still losing market share, then you are probably suffering from a lack of demand. This can be due to several causes: lack of product innovation, lack of product differentiation, poor product quality, lack of product varieties, poor branding, poor marketing, inadequate or poor salesforce, or wrong sales channels. You should run through each of these and discuss how you would identify it as a problem area and then what you might do to solve it. For example, if your competitors are selling stronger than you are in the same sales channels, then you have product, marketing, branding, or consumer education problems. If this is not the case, then you should examine whether your competitors’ have different and stronger sales channels.
To ascertain this you would compare sell-through rates and overall sales volumes for your competitors’ sales channels versus your sales channels. At each point, you should discuss how you would solve these problems. For example, if your product’s sales channels are not as attractive as those of your competitors, perhaps you need new salespeople who understand or maintain relations with those sales channels.
Demonstrate “business thinking.”
Think methodically and in a structured way. Finally, remember that there really is no right or wrong answer. The interviewer seeks to determine whether you can think through a problem, so rather than worrying about the right answers, focus on thinking through the problem the way a business manager would.
We understand that interviewing can be a nerve-racking process…Especially when presented with these types of questions. Even if you can feel your heart racing and your palms sweating, try not to let anxiety get the best of you.
Take deep breaths, focus on the problem at hand, and don’t start making wild guesses or speaking impulsively. Make sure you are listening carefully to the scenario presented to you and ask relevant questions. In doing so, you will make it clear that you are being purposeful about your answer. As you collect all the facts, take notes that you can refer back to as you formulate a response.
It’s also worth noting that the business case interview question is the perfect opportunity to showcase your quant skills. Prepare in advance by practicing your math and learning shortcuts for basic calculations. However, if mental math isn’t your strong suit, don’t stress. Spend time in preparation reading business news. Your understanding of current events will be just as (if not more) impressive than quick calculations.
Throughout your interview, pay close attention to your interviewers verbal cues and body language. If you keep your cool and work through your outline slowly, you may notice hints that you’re on the right track or way out in left field. If you get the impression you’re off base, ask more questions that could help steer you back in the right direction.
Above all, think out loud to show your interviewer your thought process. Because this type of interview question isn’t about getting the right answer, it’s essential that you demonstrate how you are working through the problem and show that you’ve considered all possible solutions to the scenario at hand.
Last Updated December 10, 2018 Joe El Rady