case interview...

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

JHBCC Overview Fit Profitability

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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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Example Profitability Case: Magma Health


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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?


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.

case interview...

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