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Mock Case Interview at Bain | Bain & Company | YouTubeToText
YouTube Transcript: Mock Case Interview at Bain
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This content provides a detailed walkthrough of a Bain case interview, demonstrating how a candidate should structure their analysis, interact with the interviewer, perform calculations, and synthesize a recommendation for a client considering an acquisition in the alternative milk market.
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what's a case interview like how should
you interact with their interviewer how
long should a case interview take these
are some of the questions that we get as
people are preparing for their case
interviews with Bay in this video you'll
get a chance to see someone set up their
analysis and their framework work
through their analysis including doing
some math and synthesize their
recommendation at the end we hope this
interview example helps you feel
prepared and confident heading into your
interviews so let's take a look at a cas
interview hi Eric great to meet you
great to meet you so glad to have you
here today excited to be here a little
nervous but excited yeah how are you
doing just more generally I'm good I'm
good yeah office is beautiful
everybody's been great so far and just
yeah excited to get going with the case
I'm so glad well I'll be the one pushing
us along don't worry if I finish us up
move us to another area I'll be in
charge in terms of the time management
good to know thank you great so should
we jump in yeah let's do it all right so
let me give you a little bit of the
context of the case now one thing I love
about this one is I do all consumer
products and Retail work for you know my
normal job here at ban and so this is
one of those consumer products types of
cases and it's based off of a real Bane
case okay and so let me give you a
little bit of the situation we're going
to Blind all of the company names for
the purposes of
confidentiality so our client is foodco
they're a multi-billion dollar client
that has leading Brands across many
different food categories right now
they've narrowed in on the alternative
milk category they believe it's growing
quickly has some attractive elements to
it and alternative milk you can Define
as anything that's non-dairy plant-based
so things like almond oat coconut soy
you name it all goes within alternative
milk I think I used almond in my latte
this morning so there you go so you're
you're familiar already they've
partnered with Bane to determine how
they want to enter and whether or not
they think this asset is the right way
to enter the space okay because they're
pretty familiar with this Market they've
narrowed in on a Target named smilk and
smilk in terms of its profile it's
pretty attractive profile that's why
they're interested in it okay to give
you some facts on it it has over the
past three years been doubling its
profit each year oh wow it's impressive
very very strong performance overall it
has about 6% share of the alternative
milk market and um is expected to grow
to 8% okay so moderate modest growth
right now this smk has been able to
expand across Europe and the us but
foodco for this particular piece of work
is only interested in the US market okay
good to know so we'll be focusing on
that now here's the real complicating
element of it they expect that smk
should be able to increase its profit by
6X over the next 5 years okay so as we
think about this overall I'd love to
have you tell me a little bit about how
you would approach assessing this
question and in particular we need need
to understand whether or not this 6X
profitability growth is feasible okay
great I think I understand the situation
can I ask a couple clarifying questions
sure absolutely awesome I imagine they
have different business units like Al
men soy oat any gaps in their portfolio
that should be aware of not that it's
relevant to the case currently gotcha
and then finally just in terms of
understanding does spco have any other
specific acquisition thesis that I
should be aware of any metrics that they
want to hit or is just broad assessment
get our opinion whether it's good or not
you know that's a good question so
mostly they're focused on whether or not
they can achieve the profit okay but
what's equally important is thinking
about share and the trade-offs between
the two of those okay awesome I think I
understand the problem excited to get
into it you might have to take a couple
awesome so as I think through this
problem of how to assess uh smilk from
food Coast perspective and think through
whether the profitability target is
achievable there's really three buckets
that I want to look into first is the
alt uh milk Market itself great second
is a deep dive into smilk and their
internal operations perfect and then
finally I have some other considerations
and RIS that I want to look at Great
before we jump into your framework can
you tell me why you thought about these
three as being the main buckets that you
wanted to focus on for sure so I wanted
to first start looking at the market
because I think a core tenant of any
good acquisition or investment is that
the asset is positioned in a market that
is favorable growing has Tailwinds and
headwinds Etc then once we feel
comfortable about that that's a large
and growing Market smilk is well
positioned within it making sure that
smilk has everything that they need to
to be able to succeed capture share grow
Revenue decrease costs which will
ultimately help us to improve
profitability great and then finally
these like other risks are
considerations are more kind of deal
specific in terms of you know how might
we Finance it uh what is the balance
sheet of Food Co look like can they
bring on debt um because I think that
will impact what the ROI could look like
moving forward in terms of opportunity
cost I know that there's zero datea on
smilk right now but are there perhaps
other ways that they could enter the
market um should they do a joint venture
with somebody should they just build it
organically themselves or could there be
a better Target and then finally with
any acquisition I think making sure that
we don't lose sight of culture to make
sure that it'll fold in nicely and that
that transition plan would go smoothly
but unless there's any other questions
on kind of how I've I've thought through
this I think I want to start with the
initial hypothesis that yes this asset
would be a good acquisition for uh food
Cod to make and that they will be able
to achieve the The Profit Target
of just remind myself 6X in in the next
5 years MH and so in order to start
testing that we' really start to like
looking at this first bucket in terms of
what the overall alternative milk Market
looks like and ideally Broken Out by
segment perfect is that where you'd like
to start yes it would be great and then
after we look at that what are the most
important elements within smilk So
within smilk what I would love to
understand is looking at their
historical performance broken out
ideally by business unit um the reason I
want to look at that is to get a sense
of how they've gotten to where they are
today I know that they have doubled
profit every year for the past three
years which is really incredible growth
right and obviously there's multiple
ways that they could do that they could
be gaining market share they could be
introducing new products or they could
be cutting cost or some combination of
all of that and I think how they've
gotten to where they are today will give
us a good insight into what future
growth opportunities they might have and
help us to get a really good
understanding of whether or not that 6X
Target is achievable fantastic I like
how you're thinking about it I also like
how you're bringing it back to the
objective around this 6X so let's start
where you suggested okay and I have a
slide here that gives you a picture of
the market I would love for you to tell
me what does this tell you about the
Dynamics of the milk Market okay if I
can just take a couple moments to orient
myself so what I'm seeing is a chart of
kind of the US milk sales over the past
10 years forecasted uh into the future
for 5 years from now and the first thing
that immediately jumps out to me is you
can see that the overall Market has been
in Decline and forcasted going forward
it's at best going to remain roughly
flat that's right so from the overall
perspective not great but what is
exciting for smilk is when you do a deep
dive into the alternative milk segment
that is actually expected to grow and
and quite considerably over the next 5
years a low double digit ker is actually
pretty exciting to me and so feeling
feeling good about that and looking
closer at the data row I'm seeing some
numbers that we can manipulate in order
to get a sense of exactly what the size
of the alt milk Market is today and then
what it's going to grow to five years
from now which I think will be a good
starting point to help us understand the
feasibility of the 6X Target agree let's
go ahead and do that okay so uh in order
to combine these variables I'm thinking
we first take the alt milk share uh
today multiply that by the overall
Market size which will give us the alt
milk Market uh in dollar today and 5
years from now putting some numbers 19
billion is okay if I round that yes 19
billion times
11% that is roughly 2 billion 2.1
billion so that is today and then in 5
years we are going to uh
19.2 billion time
20% Which is 3
.8 billion but I'm going to go ahead and
round that to 4 billion so like I said
um we now have a better sense of what
might be achievable if schil just kind
of maintains market share maintains
status quo going forward it's exciting
it's 2x um but it is a far cry from
their 6X Target and so to update my
hypothesis I still think that there is
reason to believe that this would be a
good acquisition for foodco however I'm
more bearish about the achievability of
the 6X profit Target in order to get a
better sense of that achievability I
would love to look at any internal
financials that we have from smoke to
see how they've grown over the past I'm
so glad that you asked and and had us go
there because I'd love to think a little
bit about the feasibility of this share
gain now that we've isolated that they
will need to gain share to reach their
targets potentially or other levers I'd
love you to tell me a little bit about
what this competitor Market view tells
you about their ability to gain share
okay just orienting myself quickly so
what I'm seeing like right off the bat
is not too long ago only a year and a
half um there weren't that many players
and smilk was still very ncent but over
time smilk has moderately grown its
market share seems like they've
plateaued very recently and they are the
smallest player in an ever increasing
competitive and crowded Market correct
and and then just interpreting uh the
names here large snackco looks like the
market leader which could potentially be
not great for smoke if they're going up
against somebody that is very well
financed uh and very entrenched in the
market and so uh from looking at this
I'm feeling even better about the view
that the 6X uh profit might not be
achievable simply because I don't see an
easy win here in order to gain share
however I'm not going to give up um I
think some things that could help them
achieve that if any of these competitors
are potentially acquisition targets and
food co could do a quasi like roll up
strategy that's great that could be a
way um but uh what else would you need
to know about smilk to gain confidence
that they could gain share I think in
order to to gain confidence about how
they could gain share I want to know a
couple of things one is I guess I would
bucket this kind of external and
internal um considerations externally I
would love to know how customers view
them are they differentiated in any way
from a product standpoint or a
capability standpoint such that they
could steal share and then second um
from the internal perspective I would
love to know what products they offer
today are there any untapped geographies
that they're not in for example are
there any products that competitors
offer that they simply lack and then I
know we're focusing on grocery but
there's always opportunity for
partnership there's always opportunity
for um you know selling your brand
outside of grocery stores like coffee
shops um you know airport lounges Etc so
that's great so to update my hypothesis
I still think that this is a good asset
so I feel good about um the acquisition
thesis there however I'm increasingly
bearish on the ability to hit that 6X uh
rep or profitability increase over the
next 5 years in order to feel more
comfortable about that part I would love
to look internally to smoke in terms of
their financials to understand how
they've grown and like you just
suggested are there any opportunities
that they could uh kind of untap
potential to steal share that's great I
think we're going to explore both the
internal and the external that you
mentioned so first let's go to the
internal I have some data on the company
okay could you first Orient me to what
you see in terms of the data you do have
and what you would need in order to
answer this Sixx profit question so what
I'm seeing like you said we have
financial data for smilk broken out uh
from their us business and their
European business and looks like it's a
little bit of a puzzle to solve in terms
of uh some some blanks that we need to
fill in love some logic games yeah love
love some logic games and so what I'm
seeing in terms of how to well just to
react like very quickly to this it's
interesting that the US business is only
uh a quarter of overall profit
profitability compared to the European
business which is observation which is
important because we're only focused on
the US from food Coast perspective the
second thing that sticks out to me is
there's quite a a delta in terms of the
margin between the two geographies and
so you know to keep this on our radar
moving forward would' love to understand
why that Delta exists and if there's any
way that we could potentially bring the
US business up to up to Snuff with what
they're seeing in Europe but to get to
your question in terms of how to fill
this chart out out what I'm seeing is we
have Revenue today and we have the
margin so we can back solve for this
profit figure right here and then we
know in the US what the market size is
today we know what their share is so
that'll give us this value and then same
approach knowing the margin we can back
calculate what profit is that'll leave
this hole and then we can kind of fill
in from there now before we do that
going through that process what is it
going to tell you about whether or not
they can achieve that 6X profitability
so what it's going to tell me is it's
going to tell me what profit is today
and then we know what profit is today we
know what the market is expected to be 5
years from now what their market share
is expected so that'll give us Revenue
right then if we multiply by a margin
that'll give us what if everything goes
as we're forecasting no changes in
margin what profitability would be right
just looking at these numbers if we do
that like we said from before with no
material change and share they're only
expected to gain two points that's not
going to close the gap unless we see
some sort of margin increase like that's
also not going to close the gap but I do
think that there are still ways that we
could achieve this one would be if we
could increase the profitability of the
US segment to get to Europe that'll get
us some of the way my intuition is not
going to get us all the way but there
also could be some margin Improvement
that you would see from synergies
rolling into Food Co I would expect that
distribution Logistics Etc would get
cheaper also purchasing power of a
really large company could help get the
cost of goods down for these different
types of milks materials Plastics
Etc um and so I'm kind of imagining a
sensitivity Table to where if like if we
know what the market would need to would
look like in the future there's some
implied share that they would have to
get to assuming profitability Remains
the Same and and then vice versa if we
assume no share gain but uh calculate
what profitability the margin would need
to increase to hit the target that'll
help us understand the extremes of the
sensitivity table and then help us get a
better sense of could reality exist
somewhere in the middle great and bound
the potential outcomes I really like how
you're thinking about this especially
because there's a lot of things that
could go right to reduce costs overall
and help them hit their margin targets
how are you thinking about the
trade-offs though some of the headwinds
they might face great fall out there are
natural tensions between trying to
increase market share and thus increase
Revenue as well at the same time as
trying to decrease costs on one hand you
usually need to invest for growth but on
the latter situation of trying to
improve profitability that often times
comes with finding places to get better
more optimized with your budget and
maybe requires less investment um just
to protect that that margin yeah so glad
you're acknowledging that why don't we
go ahead and do the exercise us
suggested so that we can really get our
arms around what the real potential
might be to increase profit is it okay
if I just write on please do so um
revenue is 320 million profit margin is
15% so to arrive at this profit figure
is just 320 million time 15% and that
will give us the dollar value so 10% of
320 is 32 half of that is 16 which means
that this is 48 million great um what I
said earlier for the US business we know
that the market is 2 billion today and
they have six% share so that is 120
million which means 320 - 120 is 200
million we know that if this is 10% um
10% of 120 is 12 and then 18% of 200
is 36 million which checks because 12 +
36 is 48 so now that we have all of this
mapped out we can put some specific
numbers to what their actual profit
Target is great and so if they are
at 12 million
today and they need to 6X that means
they need to get to 72 million mhm and
so like I was saying in terms of
understanding how they might get there
we know that that there's going to be
some latent growth assuming they hit
their market share targets and the
market grows like we expected right so I
can figure out what that contribution
would be and then the Delta would
essentially come from the sensitivity
table that I outlined that's plan great
okay let's go ahead and do it so um we
know that go ahead and transfer over
here Market 5 years from now is going to
be 4 billion and they're going to have
8% share
which translates
to $320 million in in revenue and then
so just from that if they keep the 10%
profitability margin that means that
they are getting to 32 million so that's
good like we we've already talked about
but it is still cry $40 million short we
we need to more than double this and so
that let's go find how we might do that
and so from the revenue marketshare
perspective uh and then looking at it
from the profitability
perspective so when I look at how much
they would need to achieve we'll we'll
solve backwards here so we know that
they need 72 million if we are going to
assume the 10% profitability mhm that's
simple math we know that they need to to
grow um to $720 million of Revenue right
at that profit level at that profit
level that seems like quite a bit um if
we go ahead and figure out what that
implied market share would be uh very
quickly so we know it's a
4072 so that would be
one 4 3 2 18
18% market share MH
which is triple from what they are at
today um which is a lot to gain
especially since they plateaued out over
time did so again I think we're going to
need to dip into this profitability
perspective yes and so where I'm
thinking about here is we'll assume that
they maintain share uh that we're
forecasting of 8% so we know that
they'll be starting with
$320 million of Topline mhm again we're
trying to solve for this 72 million and
so now it is just figuring out what the
margin is and if I do this it looks like
20% but to put some math to it
it
22 2 64 and that leaves us eight
so it's like 22 to 23% great so 23%
again that's big but if we look at the
European business as potentially where
we might get to so upper bounds 18% call
it 20 maybe if we get some synergies
from foodco I think we need to do some
further analysis to see if we can unlock
fully unlock this 23% but I'm now
getting a little less bearish than I was
originally so I'm going to update my
hypothesis that this is a good asset I
like the market that they're in um I
like the growth potential from the
profitability perspective perspective
the the lever that exists particularly
here in terms of matching the European
business um and I think a combination of
these two could make the 6X profit uh
Target achievable we might not get all
the way there but I think we might get
pretty close which I think would be
exciting to Fuko right could still make
it attractive and and I like your
sensitivity because you know you don't
need it to be on either end of these
extremes but we are asking for a lot to
go right share gain and margin so why
don't we take a look at some of the
external factors that you had mentioned
um so I'd love you to take a look at
this and tell me what it it tells you
about the competitive market okay so
there's a lot of information here if I
could just Orient myself quickly so what
I'm seeing is smil compared to um looks
like a lot of the major players from
this early market share map that we
looked at earlier and what I'm seeing is
first validating that you know smilk is
that where they are today they a smaller
player in the market and then you know
alt milk 5 and large snackco are kind of
the Behemoth right which it's exciting
that in the last 18 months they've been
able to do this again I think points to
the attractiveness of this Market but
also paints a potentially negative light
from the competitive landscape I love
seeing for smilk some of the word
associations here fun delicious premium
like that sounds like a really good
brand that could be you know kind of the
core tenants and assets that we could
leverage for for future growth again
this High customer satisfaction I think
is only solidifying that this might be
bad right now the fact that customer
awareness is low but if we're starting
from a low base I think there's
opportunity that we could use to
increase um that going forward which
would help us increase sales help us
improve the market share that we have
and then the pricing difference is quite
interesting as well it looks like we're
roughly kind of middle of the road
whereas you know there might be some
upward Potential from pricing that we
see um you know alt milk has gained a
ton of share yes people do view it as
overpriced but um you know there might
maybe we don't go all the way to $6 but
it I think there might be some room
especially because we're seeing as
premium and that's not a word
association I see here so maybe the
willingness to pay for a premium product
should be there and so again I think
going back to the math that we just did
in terms of how to steal market share
this could be an Avenue and pricing is
really exciting because it is a lever
that is not intention it flows to the
bottom line and so um with this again
hypothesis I feel even better about this
asset after seeing this table and I also
feel a little bit better about the
profitability target do we have
information on customers willingness to
pay or the potential to run a pilot in
terms of to get some data of How High we
could take prices without damaging
volume that's a great question
absolutely something that we would do
and did do Under the course of this but
one thing that I you know would love to
know quickly is as we think about
deepening our insights and analysis for
Food Co and we know that they are
fantastic in terms of building platforms
and acquiring and I think it was a
comment that you made earlier as well
that they could start to think about
that where do you think that they could
go here in terms of their their overall
portfolio yeah so I I think it was one
of the when we were looking at the
market share map like potentially a
quasi rollup uh strategy and if I if I
go back to the math that we calculated
earlier 18% total market share would
help him get to that Top Line and
looking at this um you know alt milk one
adding on would help us get there and
then these other three targets if we
were to uh incorporate them into food
Coast portfolio that would help us to
reach the Target and exceed it obviously
becomes the question of are they viable
are they up for sale um and again all of
the other considerations that we
outlined in the original framework of
like culture um how we would Finance it
Etc come com to mind and if they are you
know adding to their profit profile
overall that great point cuz we don't
know what the the profitability of these
companies look like 20% share gain in
the last 18 months I imagine that came
with quite a bit investment and maybe
their margins look very negative very
likely well this has been fantastic I'd
love to take a step back and and just
ask you at this point knowing we don't
have all the information that we
typically would have where where is your
recommendation and your hypothesis at
this point my recommendation to foodco
is that they acquire smk for the
following reasons one I think the
alternative milk Market segment is
exciting expected to double over the
next 5 years and second I think smilk in
terms of the assets that it is bringing
is a great platform to be able to grow
and get close to the 6X profitability
Target customers love it it's seen as a
premium brand and there's a lot of
potential that we could tap into there
especially if we consider synergies that
food co will bring however this
recommendation is not without risk like
I alluded to the 6X profitability Target
is quite ambitious we've run the numbers
and there's going to need to be both
Market um share gain as well as
improving profitability in order to hit
that Target but understanding we might
not get all the way there I would love
to for next steps start looking into
different pricing strategies that we
could employ uh in order to prove
Revenue improve market share moving
forward and then there's always the uh
ability to negotiate with smilk on the
acquisition price understanding that
their expectations might not be grounded
fully in reality that's fantastic I'm I
your rationale makes so much sense and
I'm so glad that you've highlighted some
of the key considerations and risks
especially around pricing because to
give you a little bit of insight this
project was based off of a real case and
there wasn't a willingness to pay that
higher price so made that profit Target
even more tricky but you you absolutely
targeted the right next steps here for
this project awesome so very nicely done
and it was wonderful to meet you yeah
thank you for working through the cas me
take care I hope this video is giving
you valuable insights into the mindset
the preparation and the approach you can
take to case interviews I'd also
encourage you to take advantage of the
tips and tricks video that you can find
on our YouTube channel or our website
and there's a lot of other resources at
bane.com careers to help you prepare for
a successful interview [Music]
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