McKinsey Case Interview Example – Solved by Consulting Candidate

This McKinsey case interview example features a real consulting candidate attempting to solve a tough McKinsey case. Jenny Rae (ex-Bain) is the interviewer, and the interviewee is MBA candidate Simon Popkin. This is a McKinsey-style Market Study case example similar to what you’d see in a second-round interview. You’re sure to gain valuable insights from this McKinsey case interview example – so be sure to take notes as you follow along!

 

Table of Contents:

1. Case Brief
2. Case Structure
3. Selecting Data
4. Case Math
5. Additional Data
6. Mental Math
7. Pricing & Profit
8. Insights
9. Recommendation
10. Self Assessment
11. Feedback
12. Helpful Tips

McKinsey Case Interview Example Transcription:

Jenny Rae:

I will give a very brief introduction to our guest for today. I’ve known Simon since I met him in person last year. So it’s been over 12 months that we have known each other. He was in a session of mine on an on-campus session. Back when we did those. Back in the day, remember? And it was a really, really great session, and we’ve stayed in touch since then. Simon has some upcoming interviews that are pretty important that he is going to share with you about today, so as we talk about what we are going to focus on in the case. So Simon, I’ll let you introduce yourself before I introduce what we’ll do in the case and what we’ll do today.

Simon Popkin:

Great. So hi everyone. I’m Simon. I’m a JD MBA student at Fordham, and I have a McKinsey interview on the 16th, and I’m interviewing with KPMG on the 8th. So looking forward to those two.

Jenny Rae:

Absolutely. Me too. And so our focus for today is going to be on the McKinsey interview, even though KPMG is no slacker. I’m going to work through this in a way that I think is going to be maybe a little bit more intense. I’m going to be a little bit more abrupt in the way that I’m thinking about things to push to another level of insight. So Simon, I think that this will feel like somewhere between a McKinsey first round and a KPMG second round based on what we’re going to do in the session today. And so I’m going to introduce the case. I’ll walk through the intro of the case. I’ll set a timer, and I will walk through how long it takes you to do each part of the case. At the end, I’m going to give a reflection on both the timing for each of the pieces, as well as segmented performance. So we’ll highlight what was happening in each part of the case.

And overall, your mission is to solve the case, but probably most importantly have a really good time. So we’ll keep it lighthearted and fun. Everyone who’s watching you, you know, you guys have the opportunity to do one half of the case, which is to work in your head and on paper with what you would do. You are also on mute, so as long as you are on mute, you can keep yourself accountable by talking through it. When you’re talking through a structure, you could walk through the math assignments walking through the math. You can also do that later on. But please, work along with us. It creates a better experience for you from the learning side. So Simon, are you ready?

Simon Popkin:

I’m ready when you are.

Case Brief

Jenny Rae:

I’ve always been ready. Born ready. So, great. We’re going to get started in just a second. Great. Our client today is a company called Agrochem, and the case is named Mango Maker. Agrochem is an agricultural chemicals producer based in North America. The company manages a wide portfolio of goods that includes specialty seeds for commercial producers, pest-control and soil additives. An R&D, this company developed a slow-release fertilizer that helps accelerate the ripening of produce. When produce goes to market off cycle, it provides farmers with more assurance that it will be purchased and can even achieve a price premium.

The product was patented 10 years ago but has recently come back up into development as something that they would like to finish and commercialize. In testing, the chemical worked especially well with tropical fruits, and one of those tropical fruits is mangoes. So the company decided to call the product, for now, Mango Maker. The majority of mangoes sold in the world are produced in tropical regions. Non-frost zones, and Mexico is one of the top 10 producers, with 2.2 million tons produced a year. Your client would like to know if they should attempt to commercialize the chemical Mango Maker, specifically in Mexico. Do you have any questions about the background?

Simon Popkin:

Great. I’m first going to run through what I heard from you to make sure that I heard everything correctly.

Jenny Rae:

Sounds good.

Simon Popkin:

So our client is Agrochem. They produce agricultural and chemical products special – pretty much specialty seeds, pest-control and soil additives. They sell these to commercial clients in North America, and they are looking at bringing to market a fertilizer which works very well with mangoes, and they are specifically going to launch that product in Mexico because that’s one of the largest mango markets. And so the goal is sort of to see whether or not they should enter this – whether or not they should bring this product to development. Is that correct?

Jenny Rae:

Absolutely. That’s it. Anything you think you missed, or any questions that you have about that?

Simon Popkin:

Sure. So just wondering sort of the size of Agrochem and their current size and generally how big they are so I can understand how big of a deal this product is to their overall business.

Jenny Rae:

Yeah. I don’t have data on it, actually. And, you know, normally I would, but I didn’t pull it together. I think we can assume that it’s big. This isn’t necessarily a complete deal changer for them, so it would be a part of a portfolio of products. So I wouldn’t assume that it’s everything. I also wouldn’t assume that it’s nothing. How’s that for a non-answer.

Simon Popkin:

That’s great. And do they sort of have a timeline of when they’re expecting the product will be fully ready to launch?

Jenny Rae:

I think that right now, it’s gone through all of the testing that they would need, so I think we can assume under a year would make sense.

Simon Popkin:

Great. I’m going to take a moment to structure my thoughts and I’ll let you know when I’m ready to work on this question.

Jenny Rae:

Sounds great. Can’t wait.

Simon Popkin:

All right, Jenny Rae, I’m ready.

Jenny Rae:

Sounds good. Ready for you.

Case Structure

Simon Popkin:

So there are 3 main things that I would want to look at. The first one being the mango market, the second being deciding whether Agrochem is the right – has the right capabilities, so looking at the company, and then the third is thinking about how to enter the market. And so starting off with the – with the mango market, I want to look at the overall size and growth of the mango market in different countries. I think that that would help Agrochem understand whether or not Mexico is right market for them. And then I also want to look at competing fertilizers to see if their market share and see if this is a very fragmented or centralized consolidated market. That will impact how easy it is for Agrochem to break in.

And then the third thing in the mango market that I would want to look at is whether – who the major producers are of mangoes, and see if there’s, let’s say very few mango producers, and then it’s – you got to try to win contracts from them, or if it’s a very fragmented market and it needs a wide – a diverse marketing team, something like that. And so that’s what I want to look at in the overall mango market. And to look at Agrochem as a company, I want to look first at their financials and see how been doing recently, and also importantly look at their cash position to see if they have enough money to make this investment, or if it would – if they would need to take out debt, and that would then sort of make the investment more risky. The second thing I would want to look at is their current capabilities in, in manufacturing, distribution and marketing to see if they can use the same capabilities with this new product, or if they would have to create new capabilities. For example, if their Mexican distribution is not very strong, then they would need to build that up and that would be an additional cost. And it would also affect the timeline.

And the third thing I would want to look at in the company is their current portfolio of – of fertilizers to see if this would cannibalize from other sales. If they are – if Agrochem is already the main player in this market, it, they would be taking away from their current revenue. And that’s what I want to look at in the company. And the third thing, looking at how to enter. There’s two main ways I would think about right now of entering this market. First is to organically go in with distribution and marketing teams, and then the second way would be to license the product to a major player in the Mexican market. And so this deciding whether to do an organic entry or licensing approach would – would sort of be based on the barriers to entry in that market and see if, if they’re very high, then maybe licensing is better. And some barriers for entry could be, let’s say, the government’s regulation on fertilizers, and if it’s really strict, and the current product doesn’t need it, then maybe you license the product and have that company figure it out.

Jenny Rae:

Sounds good. Where do you want to start?

Selecting Data

Simon Popkin:

So I would first want to look at the mango market and try to figure out if it’s an attractive market to enter.

Jenny Rae:

Great. I want to do the same thing. What data do you want? What kind of data do you think would be interesting and powerful here?

Simon Popkin:

So one of the – the biggest data point would be to look at the size of the market, and the overall trend recently. And then compare that to Agrochem’s like expectations for their – for their return on an investment to make sure that the market is big enough for them to actually – for it to be worth their time.

Jenny Rae:

Okay. And how are we going to actually – what are the metrics that are going to tell us if it’s big enough for us specifically?

Simon Popkin:

Sure. So some metrics would be market size in dollars, percentage change in market size from the previous year, and then also looking at the number of competitors and their market share to see if it’s a fragmented market. So easy it would be – how much market share we can reasonably expect Agrochem to be able to take.

Jenny Rae:

Good. So I do have some data on the overall market. Let me give it to you now. Mangoes are grown throughout the world, and the top five production countries control over 65% of the market. In total it’s 36 million tons out of a 55 million that are total globally. Our client for the moment is only concerned with Mexico as a test market. What they figured out is some of the data on the market. So their Mexican producers can make average revenue of $6000 per acre for mango orchards in the given year. The market is growing at about 7% per year. There are approximately 125 orchards in Mexico, and there are 250,000 acres that are devoted to mango orchards in Mexico. So how would you identify how big the farm market for mangoes is in Mexico?

Simon Popkin:

Great. So I think I heard all of the information correctly. There was one data point at the end that I would like to clarify. There’s overall about 250,000 acres dedicated towards mango production. Is that correct?

Jenny Rae:

That’s right, yep.

Simon Popkin:

All right. And the question that you asked was to see how – how much revenue is sort of produced in a single orchard?

Jenny Rae:

No. The question I asked was just how big is the mango farm market in Mexico.

Simon Popkin:

Oh, how big the mango farm market overall. Okay, great. So may I take a moment to structure the logic of this math?

Jenny Rae:

Sure, a quick moment.

Case Math

Simon Popkin:

Okay, sure. So overall, the market would be the number of acres available for production, which it was 250,000 acres, and then $6000 per acre for the overall size of the market.

Jenny Rae:

Okay.

Simon Popkin:

And so the overall size of the market would be $1.5 billion per year.

Jenny Rae:

Okay. What do you think about that?

Simon Popkin:

So that – that number is quite large. And it’s also very – it’s a good number because Mexico is just a very – is a small part of the overall mango market in the whole world. And so for a test market, this is quite a significant size. And it also would likely mean that it’s worth the Agrochem’s time and effort to – to launch it because this – my guess is that this is larger than most markets that they are currently in, but without more information on the company, it would be hard to know.

Jenny Rae:

So let’s just be clear. What is this market, the market for? And is at the market that we are thinking about entering?

Simon Popkin:

So this – this is the market for overall mango sales, and we are looking to – we’re looking to – or the client is looking to sell a fertilizer, which would help and improve the off-cycle production of mangoes, generally. And so the – the size of this market is good for the client because it means that mango producers in this market are going to be willing to spend money to improve their mango production.

Jenny Rae:

Gotcha. Okay. And so tell me what else you can see from this data on the kind of market that this is for us?

Simon Popkin:

So this is –

Jenny Rae:

For us, for Agrochem. Not of mangoes. Yep.

Simon Popkin:

This is generally a fragmented market because there’s 125 different orchards, and so for the client to then go into this market, they would need to consider how to target many different orchards in Mexico, rather than if there were only five orchards, they would need to look at – it would be a different sales and marketing approach. And so probably 125 orchards is probably a good thing for the client though, because it likely means that the – it – there’s more clients to be able to take. If there were only five – let’s say five orchards, they would probably already be locked up in contracts with other major Agrochem players. And so with 125 orchards, it’s probably more room to start to develop market share.

Jenny Rae:

Okay. So interesting – interesting insights there. So based on this, is there more data that you would want before you are ready to say let’s enter the market? If so, what would it be?

Additional Data

Simon Popkin:

Sure. So there’s probably three different types of data that I would want to look at. First is the competitors, the second is the overall financials of the of the entry, and then third would be the general, I guess, what we are expecting the customers to – the customer benefits and their willingness to pay for this product. And so, yeah.

Jenny Rae:

I have – I have some data on that. There are no competitors right now. This is a patented product. Because we issued the patent 10 years of go, no competitors have worked on developing anything that similar to it or like it. So, so that’s, I would say in general good news. But then in terms of the customer benefits, we might calculate that in just a minute. Before we do that, I have a question for you. This is related to the customers, right? What do you expect the sales process would be like if we decide to pursue this product. You mentioned just a little bit about the fragmentation of the market. What factors should the client consider specifically when they’re thinking about building a sales pipeline for this product?

Simon Popkin:

Sure. So with 125 orchards in then, then each orchard is – none of the orchards are going to be in the billions, or likely none of them are even in the $100 million. So this is small, I, I imagine that their, I guess, procurement teams are very small as well. And so I imagine that the sales process would be first developing a, a marketing team that’s pretty, pretty large because we’re going to need multiple sales reps. And then developing marketing materials that are tailored towards the products and towards the local, the needs of the customer. And then it would probably be going from sending the sales reps out, trying to convince them that this product is worth it, and that would probably need some forecasting on potential increased revenue for the customer, and then securing hopefully long-term contracts, or at least annual contracts with the – with the orchards.

Jenny Rae:

Sounds good. Anything else?

Simon Popkin:

Yeah. So the – the sales team would definitely have to consider the, the length of the patent when considering contracts, negotiations and the marketing materials because depending on how much longer the patent is, the patent has, then competitors may enter the market very soon. I imagine since the patent was 10 years ago, I think patents are normally around 20 years, and so there’s probably plenty of time. And so the sales team would be able to tell the different orchards that this is going to be the only product on the market for many years, and all your competitors are going to be using it. So you should use it.

Jenny Rae:

Okay. Awesome. Well, you mentioned a little bit about the benefits to the orchard owners. But let’s talk about that next. So there are two primary benefits that orchard owners get from this product. The first one is better consistency of the mangoes. The orchards split their harvest between the whole mango market, which is 75% of a crop, and the commercial food market, which is 25% of the crop. That includes juices, baby foods, and canned and frozen pieces. For the whole mango market, the farm’s staff sort through the harvested mangoes and separate any mangoes that are not ripe, or that are deformed by pests.

Our client’s product protects whole mangoes from pest damage and improves the yield of the whole mango market by 6%. The second benefit is increased sweetness. For mangoes dedicated to the commercial market, this product improves the overall sweetness. The sweetness does not seem to make a big difference to the whole mango market. Therefore, it takes fewer mangoes to make pressed products. About 50% of the commercial food options are pressed. It’s estimated that the sweetness factor improves the yield by 10%. So what is the estimated incremental value for a farmer by using this product?

Simon Popkin:

I’m just going to repeat some of the information that you gave me to make sure that I heard it correctly. The – there’s two main benefits to the – to the fertilizer. One is that it improves, that it has better consistency. It protects from damage from pests and improves the yield by 6%. And then for the – the second benefit is that it improves the sweetness, which is mostly for commercial use. And so, and that was for 10%.

Jenny Rae:

It improves it by 10%.

Simon Popkin:

By 10%. Okay. So the – I would – in order to try to quantify the benefit, I would – I would try to convince the orchards that since it improves the yield by 6%, and improves the sweetness for commercial use by 10%, that it would increase their – that the first benefit would increase their yield – would increase their revenue by 6%, and then the second benefit would increase the commercial use by 10%.

Jenny Rae:

So Simon, does that apply to the – 6% and the 10% apply to the whole yield and the whole revenue therefore?

Simon Popkin:

The 10% definitely only applies to commercial. I imagine that the 6% may only apply to general because the mangoes that are for the commercial use don’t have to be as perfect, and so I would actually only use the 6% for the general.

Jenny Rae:

That seems to make sense to me. In addition, for the commercial market, there’s, the only part that it really makes a difference for is pressed products.

Simon Popkin:

Okay.

Jenny Rae:

So which is only 50% of the commercial market.

Mental Math

Simon Popkin:

Got it. So the 6% addition to the general – to the general market is an increase of 4.5% of – of the total.

Jenny Rae:

How did you get that? Just walk me through the numbers.

Simon Popkin:

Sure. So I multiplied 75 x 6%, or by six, and, or by 6% and got 4.5%. And then for the commercial, I would multiply the 10% times half of the commercial, which is 12%, and that would be an additional 1.25% overall. And so the general benefit of the fertilizer would be 5.75% additional revenue for the – for the orchard. And I think that that would be generally a significant amount. I think –

Jenny Rae:

What is that actual number?

Simon Popkin:

The, so I could turn it into, I could do 5.75% times the 6000 per acre and get a – get additional revenue per acre, if that’s what you’re looking for?

Jenny Rae:

Sounds good.

Simon Popkin:

Okay. So then 5.75% times 6000. That should be an extra $345 per acre. And so depending on the – on what the client – what Agrochem is expecting to sell the fertilizer for, this could be a benefit to the – to the orchards and so I would next want to look at the general pricing to understand whether the orchards would find any benefit from this.

Pricing & Profit

Jenny Rae:

Okay. So we do need to determine the potential pricing as well as the profit of the product. Specifically, we are interested in identifying a kind of an additional benefit that’s related to that. So I have some more data for you. The, the other benefit that is included is earlier harvesting. And we mentioned before that there was a potential price increase related to being able to harvest earlier, and basically getting your product to the market off-cycle. So our client gave a sample of the product to a farmer that produces only locally. It’s a small acreage of about 200 acres. The farmer was really able to harvest his crop about 30 days earlier by using the product. 10 of those days are within what we call the price premium capture window, where the farmer gets a 4% price boost.

A study of technology innovation in the agriculture industry have shown that new products typically capture some portion of total benefits created for users. The standard median percentage is about one-half. In addition, it’s estimated that the product will cost us about $3000 per kilogram to produce fully loaded. And that fully loaded cost includes transportation, warehousing, as well as sales and marketing. Tests indicate that 1 kg of the product can support 12 acres of mango crop. So now my question is how should we price it and what is our profit?

Simon Popkin:

Great. So there was a lot of data there and I think I heard most of it, but I’m not – I’m honestly not sure that I heard 100%. So the additional benefit is early harvesting where the orchards could harvest 30 days earlier based on the research that our client did. But only 10 of those days is in the price premium window, which was 4%. Then there was – there is a 1.5% in there, and I honestly didn’t catch what that study was.

Jenny Rae:

Yep. So basically a study of technology innovation in the ag industry, and there is a wide range of percentages. Basically there’s a benefit to the user, but then how do we price it is the question. And so the median number is one-half.

Simon Popkin:

Okay, so the overall price premium for the orchard would be 4%, but then the – our client would look to take about 1.5% of that premium?

Jenny Rae:

Not of the premium, of the total benefit.

Simon Popkin:

Okay. Total benefit. Great. And then the – the cost to produce was $3000 per kilogram, and one kilogram supports 12 acres.

Jenny Rae:

Correct.

Simon Popkin:

Great. So here we have two separate calculations. One would be the cost to produce, and then the second calculation is the additional benefit to the orchard.

Jenny Rae:

Okay.

Simon Popkin:

And so the addition – I’m going to start with the cost to produce, and so we said that one acre, the benefit was $345. No. The cost to produce, we have 1 kilogram being 3K, so the – the calculation isn’t cost to produce, it’s overall like profit driven from it. And so I would want to look at the 12 acres multiplied by the $345 per acre to get the benefit of 1 kg of, and then subtract that from the 3K to get the potential profit from 1 kg.

Jenny Rae:

We could do it that way.

Simon Popkin:

Okay. So 345 times the 12 acres gets us a total of three – $3840 as the benefit from 1 kg of fertilizer. We subtract that from 3000, we get $840 in benefit from the 1 kg of fertilizer to the – to the orchard. And then, okay. And then the second thing is the additional benefit of earlier harvesting to the orchard. And we have a price premium of 4%. And so we can increase the – we increase the total yield from the acre by 4%, or the total price by 4%. And so for 1 acre that was selling was we had $6000, we increase that by 4%, you get an extra $240. And then 1.5, the tech innovation from that, the 1.5% that most people in this area are selling for is 1.5% of the benefit of that 240 to the – to the acre, and so that would be a total of $90.

Jenny Rae:

Where’d you get the 1.5?

Simon Popkin:

So that was the average number from the – from the data that you gave me about general tech innovation.

Jenny Rae:

It was one-half. One-half.

Simon Popkin:

Oh, one-half. Okay. So –

Jenny Rae:

And basically Simon, to explain that. Basically what it means is that there is a value that’s a benefit to the client, and we’re going to give them half of the value, and we’re going to take half the value, right? We’re going to price at what we believe half of the value is so that they get some of that residual value.

Simon Popkin:

Okay, that’s fair. That’s fair. So in a general acre, the average benefit is 240.

Jenny Rae:

Is that for all general acres? Is that across the whole portfolio, or is that for some general acres?

Simon Popkin:

I think that was on the average acre of the – of the market was six, was 6000, so I took 4% of the 6000 to get 240.

Jenny Rae:

And that would be true if we could price all of them at the premium. Can we price all of them at the premium?

Simon Popkin:

We can price the ones that are 10 days that are in the price premium window, which would be 10 days of the price window times 30 days and that means divided by 30 days earlier is one third. Is there some other factor that is preventing us from pricing all of them at the price premium window?

Jenny Rae:

It’s just that if they – we can’t – we can’t actually get them all to the market during that period. So the other 20 days will have to be at the original price. So only one-third will be able to make it into the price premium window.

Simon Popkin:

Okay, so then we can divide 240 x 1/3 to sort of add the average benefit for all acres, and so that would be $80.

Jenny Rae:

Okay.

Simon Popkin:

And then the average benefit or taking half of that benefit for the – for the com – for the client would be $40 per acre.

Jenny Rae:

Okay.

Simon Popkin:

And so the – since 1 kg can provide for 12 acres, we would multiply that 40 x 12 and we get 480.

Jenny Rae:

Okay.

Simon Popkin:

And so the – we could price it somewhere I would think between 800 – we would price it around $480.

Jenny Rae:

Okay. Walk me through the pricing just in sum.

Simon Popkin:

Sure. So the average benefit is – is $80 per acre because to and then taking half of that is $40 per acre. If we were to – oh, we would have to sell it at $3480 to cover the cost and take the benefit for the client.

Jenny Rae:

Okay. $3480, but, but so far, like where does the $3000 come from? Where does the coverage for that come from?

Simon Popkin:

I did this earlier. Okay, so the other parts, the other benefits for the – for using the fertilizer. So the – the – the benefit of better consistency and improved sweetness, that was going to lead to $840 in benefit, plus the $480 in benefit from the earlier harvesting. Those combined to $1320, $1320 in benefit. So actually our client should be taking $680 in benefit.

Jenny Rae:

Walk me through that 840 one more time.

Simon Popkin:

So the 840 we got from using $345 of benefit per acre times the 12 acres. So that was a total of $3840. Maybe there was no reason for me to subtract it from 3000, and so the actual benefit was going to be $4320, and then half of that is – now I understand. Half of that is 21 – 2160, which is below our cost to produce.

Jenny Rae:

There we go. What you think?

Simon Popkin:

So it seems like we wouldn’t be able to price at high enough to produce it.

Jenny Rae:

You sure?

Simon Popkin:

No.

Jenny Rae:

You’re not sure of anything anymore, are you?

Simon Popkin:

That’s a hard fast. So 3 kg. I’m going to take a moment to double check my math and logic here.

Insights

Jenny Rae:

I like your math. I’m looking for insights.

Simon Popkin:

So – so the client could price it higher. This 1.5% here is just an average. And so if we were to try to take more of the benefit, then if the client was trying to take more of the benefit from the tech innovation, then it could price it over the 3K mark. But then –

Jenny Rae:

What percentage would we have to be at? Right now it’s 50/50. What percentage would we have to take of benefit?

Simon Popkin:

Sure. So I’m going to divide 4320 by 3000. No. I’m going to actually subtract it, then divide. So the – I think 1320 over – we need to be taking closer to two-thirds of the – of the total benefit. And that’s just to break even. We definitely need to be taking closer – more than two-thirds in order to have a profit from this. And that is – it may not be likely to get that. Also considering all the upfront costs of entering a new market, the client would probably be taking almost all the benefit for it to cover all the other costs involved in selling the fertilizer.

Jenny Rae:

Okay. Can you think of anything else that we should do? Based on the restrictions that we placed on the concept so far, is there anything that we should remove, any other alternatives that we should look at, etc.?

Simon Popkin:

A main alternative that I had back in my structure was licensing the product and trying to find potentially a different company that could sell this. Maybe they could produce it cheaper, and so they would get the benefit. Additionally, our client could try to produce it for cheaper. And a third option would be to and to look at different markets other than Mexico where they may have a higher yield per acre.

Jenny Rae:

All right. Like where?

Simon Popkin:

So there was tropical – it’s a tropical fruit produced in tropical areas, and so also considering the size of general economies, Brazil would be a very large economy to look at that hopefully – that likely fits the climate that would be necessary for this type of – for it to produce mangoes.

Jenny Rae:

Okay, awesome. Anything else?

Simon Popkin:

Another option would be to test the – to test the Mango Maker on other fruits that have a higher yield per acre. There’s no reason that I see to stick to mangoes except there’s been a lot of effort that’s already been put into that. And so if, let’s say a lot – if this works well with other tropical fruits that have a higher yield, then that would make sense to me.

Jenny Rae:

What would be some examples of those?

Simon Popkin:

Other tropical fruits. Papaya. I think it dragon fruit is a fruit.

Jenny Rae:

I love papaya.

Simon Popkin:

Anything that would fit this sort of – this chemical without knowing all the details of the chemicals, this would likely be the other tropical fruits are the most likely candidates. There could also be fruits that would benefit from the – from the benefits of the Mango Maker in ways that are larger than other tropical fruits. For example, earlier harvesting. This doesn’t seem to be a big benefit for mangoes, but if it’s a big benefit for a specific other fruit and its fertilizer could prove to give that option to that fruit, or the orchards of that fruit, then you could try to position this product in other markets based on the benefits to mangoes.

Jenny Rae:

Sounds reasonable to me. Okay. Well, at this point our CEO of Agrochem is interested in an update. What would you say to the CEO?

Simon Popkin:

Can I take a moment to structure my recommendation?

Jenny Rae:

Sure.

Recommendation

Simon Popkin:

So the, unfortunately the – we’ve ran the numbers and it doesn’t seem like – it would be very difficult to sell the Mango Maker in Mexico because the benefit that the orchards get is not – is not significantly higher than the – than the client’s cost to produce the fertilizer. And so trying to take – there trying to get profit there, it would be hard to convince orchards to buy it. So the recommendation is to look at other markets where Mango Maker could be more successful. And those other markets being other tropical fruits, or other regions where they sell – where they produce mangoes. And so the – the next steps would be to try to identify which markets to enter. One of the markets that we were talking about in our discussions was Brazil. And then try to do some test and market research in those markets to make sure that it’s a profitable market center.

Jenny Rae:

Awesome. You ready to be done?

Simon Popkin:

Yes.

Jenny Rae:

Awesome, Simon. Thank you so much. That was – that was maybe better than you thought, but I’m sure that people will kind of pop some thoughts for you in the chat bar. I’m excited to go through the background and the recap and talk through each of the pieces of the case. Before we do that, I’m curious what you think. What were your thoughts about it?

Self Assessment

Simon Popkin:

So I thought my structuring was generally okay. I was – I was – I’m generally nervous about my math, and so I’m looking. So I’m not sure – I – while I’m going through these, I’m never sure that my math is right, unfortunately. It was – it was nice to hear that – that you liked my math.

Jenny Rae:

I could tell that you had some uncertainty about your math.

Simon Popkin:

The question about the sales process, I think I wasn’t giving what you were looking for. So I’d be interested in and hearing about that. And then I didn’t quite understand the trying to do that calculation at the end. But I got there in a little under 40 minutes. So maybe it wasn’t – it wasn’t too late.

Jenny Rae:

Exactly. It wasn’t too late for you. Yeah. So I think that’s really great feedback. Just – just question for you. What about the experience of doing the case like that, and with me. Did you notice anything different about that versus maybe other practices that you done?

Simon Popkin:

So there was definitely a lot of what else for some of my – when I was thinking about like brainstorming. Yeah, that was the main difference. And I yeah, I guess it’s hard to stay structured in it when you get what else because you want to just respond with the first thing that comes through your mind. And I don’t know if that’s correct or not.

Feedback

Jenny Rae:

Great. I want to talk about that specifically. So overall, I just want to let you know if that was a first round interview I would’ve passed you on. I thought overall it was a really strong performance. I felt like you did, you know, quickly get the points, got the math. Was it we were able to capture everything, there was an appropriate amount of dialogue, a decent amount of structure. It was still a B. I want to get you to an A, right, because we want to – we, we need you in that final-round and we need you to be able to play in the final round. So let’s – let’s get the A. That’s what we’re going for. There – it actually started at the beginning. There were just like little tweaks in a lot of the different sections. So I don’t have any major like you have to just burn this house down and build it back up again. But I do have tweaks in almost every piece. So for the first part, the recap it was great. Took 41 seconds. Super clear, kind of high level. I felt a slight lack of enthusiasm. I don’t know if you were like “oh crap, the case,” or “oh crap the audience.” Or just oh crap what.

But I just want to really get a sense of your confidence in solving the case right from the very beginning. And I feel like you could have built that in just a little bit more in the early recap. So you kind of talked about it at the high level. And there’s actually one thing that happened right at the very beginning that was an insight that I was looking for that I would look for in the second round. And you never picked up on it in the case, and I wouldn’t have expected you to in the first round, but I just want to tell you what it was. So Mexico was the fifth largest producer, and I gave you some numbers right at the very beginning. I said that they are 2.2 million tons a year. You didn’t actually recap that number. And so later I gave you other data inside the case that said that the top five producers produced 36 million out of a 5.5 million total globally. And that probably would have been a clue to you that there are bigger producers of mangoes other than Mexico.

And so that was a secondary insight that I just want you to start watching out for as you are practicing cases. Because the more that you can pick up on those, the more that you can come up with alternatives, or new ideas, or the big picture insights that are really the game changers. When you talked about the two clarifying questions, they were good, but not great. The good was that you asked them, the great would’ve been if you would’ve told me what you thought and asked me to verify. So you were like how big is Agrochem. Instead, I would have wanted you to say it sounds like Agrochem is pretty diversified. I would imagine that this product is not a deal breaker or a game changer for them. It’s something just like that they’re going through a standard process for, but I want to make sure that that’s something that is appropriate in my set of assumptions as I’m thinking about it. So I make sure there is nothing that’s kind of like grave, right. The whole success of the business or the failure of the business is on the line. I could just say yes to that instead of kind of like explaining a bunch of stuff. I also get more from you.

The second question was the timeline for the product. So I told you in the background that there were 10 years on the patent. I don’t know if you know this, most patents are 20 years in duration. So if you had just told me I think we’re a little bit under the gun here to make the best use of the remaining 10 years on that patent, so I would probably look at a one-year launch process. Is that okay? Too aggressive, anything else that I should be thinking about. So again, like just add a little more color right there in the dialogue at the very beginning. Your structure took you one minute and 39 seconds. It was a little too short. And the only difference that I would have made in what the content of your structure was was specifically focused on a few more metrics. So I felt like you really hit a very good diversity of the concepts that you wanted to cover, and as you notice, we fairly clearly walked through some of the structure that you had developed.

But you said, for example, competing fertilizers, right? Are they fragmented or consolidated? So just start that by what’s the percentage of all of the competitors of fertilizer. For producers, are there very few, right? And I think like one of the other insights that you didn’t pick up on inside the case I was looking for you to mention at some point was that like if there are 125 producers, there are probably only 20% of those that are like big enough for us to sell to, or that would make a big enough difference for them to add a new product to their process or their time – their pipeline. And so you kept talking about the how the market was fragmented but didn’t really highlight like what percentage that would end up meaning in terms of you know, it would basically reduce some of the value overall in the market. And then you – when you were talking about the like distribution and marketing teams versus licensing, I just wanted a little bit more detail on the data.

And here’s what happened. It took you three minutes – let me actually just confirm this. Three minutes and 22 seconds to read out your structure, which is actually too long. So what I would do as a next step right after this case, after we get off the call is go read out your structure under a two-minute timer and try to get it all out there. But one – the other final thing is that you numbered your categories very well. You did not number your data. And so I wasn’t totally sure. I think I got it because you were fairly clear about it, but just as a safeguard, write data point 1, data point 2, data point 3 when you are walking through your data. Because otherwise it could sound like this big glob of data. So just make that super, super explicit, especially for McKinsey. That – great. And then we kind of go into some of the math questions.

So the first – first math question, I would say that you got through to the level two insight, but not the level three. So that one was the size of the market question. And so you are like it’s a big market, and then you kind of heard me. I was like but is it? You know, because if you – you are sizing the market for mangoes, and that is – that’s not the wrong way to size it, but then like what we really could have sized on top of that, there was a second calculation which would’ve been the number of acres per orchard on average. And identifying, right, there’s 125 orchards, or orchards, 2000 acres per orchard probably would’ve made more difference rather than the 1.5 billion of the total market size. So I just pushed you on those insights there. I want you to do those on your own. I would also, as just a tip for all of the math, you did an amazing job of structuring all three of the math questions. Although the last one the structure I kind of like interrupted because it wasn’t the structure that I was looking for. But I still liked that you did it across the board.

One thing I would add to your structure is just like why are we doing this, right? Like so tell me, you know, I’m going to do this math and this math, and here’s what we’re going to find. We’re going to discover whether the market is big enough for us to enter. We’re going to identify if the revenue in the market, you know, with some upside would be material enough for these Mango Makers to actually, you know, change their production processes, right? Like tell me what you’re looking for in the data before you even get there. I think your biggest opportunity for improvement is on the creative questions. And so for the first one, at – what – what you did was what I would consider to be the old-school, nonvirtual way of doing creative questions. You came up with a list where like develop a marketing team, multiple sales reps. Tailored toward the local market needs of the customers. Focus on long-term contracts. And it was just like this like kind of rambling list. What I would rather have had you do, whether you take time, which you can in McKinsey, and whether you don’t which is better for KPMG, I would have rather had you say there are a couple of things that I would want to do with the structure. And I wanted more up front structure categories that you then filled in information with, rather than a list.

You also never recapped and never prioritized at the end of it. So it kind of just felt like you were going through the motions rather than using it as a thought exercise to get new ideas on the table. The second one, the what should we do different, was a little bit better, but it was the same. It was super linear. So if you kind of said hey, I think we’ve got three options, right? Produce cheaper, you know, give someone else a license and they could produce it cheaper, focus on a higher like price point, and then you kind of added the fourth one, which is the higher yield per maker. But like I would’ve liked some sub bullets under each one of those, and I would’ve liked for you to tell me that that was your kind of across the paper structure, and then build it out a little bit further down. Does that make sense to you? Because I really want to make sure you catch that specific feedback.

Simon Popkin:

Yeah. If the case was easier I think I would have done that.

Jenny Rae:

That’s such a copout.

Simon Popkin:

I know – no, I know to do that just when, when the questions are hard, it’s harder to come with the categories. It’s easier to come up with one-off ideas, I think.

Jenny Rae:

Yep. Yep. And so, so if you do it that way, then kind of come up with one or two, and then when you feel like you’re starting to diverge from it, call that category like okay, so those are ideas for marketing. Let’s talk about the sales team, right? Let’s talk about partnerships. Let’s talk about capabilities of the sales team. Like once – once you like build the first one, that’s okay. Name it something, but then go on and build some other ones as well. So your brainstorming for each time was like under two minutes. That’s why I “what-elsed” it so much.

Simon Popkin:

Okay.

Jenny Rae:

And so you’re going to get fewer what else’s if you are more comprehensive in the first place. Great. And then the final math question, oh sorry, the two benefits to the orchard owners, I thought you just nailed that one. I just want to make sure that you know you can do as much recapping as you need to, so that was the one where I had to clarify that it was like 6% of the 75%, and then 10% of the 50%. Of which was also of the 25%. So you actually kept really good clear record of your math at that point, but I just would want to make sure that you recapped it adequately so the fact that I had to jump in there was like a little ding, not – not bad, but that would’ve been better if you didn’t need to do that.

And then finally, on the final math question, this one was the doozy, right? The – the kind of like I gave you both costing and a pricing benefit both in the same thing. And so you got a little bit lost in that one. What do you think happened there? Was that note taking, was that recapping, what – what you know, what was kind of the – was it I – I intentionally, by the way, because this is a McKinsey style case, I mixed up the per kilogram and the per acre to make you put them into the same metric sizes. So was that the funky thing that happened there? Or was there something else going on?

Simon Popkin:

I think realizing that the first math I did was for the first two benefit – or adding all three benefits together, that that’s what took me the longest. And then realizing that some of the math was only for the first two benefits maybe it was also about staying organized. And honestly I may not have 100% understood the business model and what was going on.

Jenny Rae:

I felt like that at the beginning, yeah. Totally. Totally. I’m a hobby farmer, so.

Simon Popkin:

I haven’t done a tropical – I haven’t done a tropical fruits case.

Jenny Rae:

Weird, right? Weird. You know, that’s – that’s one of the reasons why this once such a fun one. It’s quite an equalizer because there’s not a lot of people that are like I had an internship in agricultural chemicals last summer, right? You know, so it doesn’t necessarily apply. This would be the one that I would go back and redo again. And just, you know, you can either listen to the recording, or you can just do it on your own now that you have the data. And just work on kind of walking through the interpretation again of it, and then like telling me again why are we calculating this. I think if you add that to each one of your math questions, it’s going to help clear up what you do. So that one took a really long time. I think that one took us right over – over eight minutes. And that was like – that was back and forth. And this number and what about this one, and what about the insights. And I was like really, you know, not letting you go on and that one.

That’s one of the ways that, by the way, if that’s happening, you can know that you’re doing well in the case. If somebody wasn’t performing as well in that, I would be like oh, what an interesting number. Let’s move on. So the fact that I was kind of pushing back on you was not a bad thing. Well the second question around like what else should we think about doing, and then I thought your final recommendation was strong. The one improvement I would of made to that is just provide what I believed could have been a more adequate recap of what we’ve done in the case. You kind of dove pretty strongly into the recommendation and then the next steps, and really missed out on like here’s what you looked at. So I would have either put that before or after the recommendation. And prior to the next steps. So I hope that that insight and feedback and those tweaks are helpful and productive for you. Do you have any questions about this?

Simon Popkin:

This was a great learning experience. And no, I – I understand the feedback, and I’m looking forward to hearing the recording. Also not so looking forward to it. But this was very interesting and something new, which I’m glad I got to do.

Jenny Rae:

Good. Simon, I have a question for you. So now you can reveal to us how long have you been prepping, what if you been doing. Because I, you know, I think that was a great example for a lot of people to see. So what are some of the things that you found successful as we move into the final Q&A with the rest of the group?

Helpful Tips

Simon Popkin:

Yeah. So I did the Black Belt program last summer, and then I sort of took the – from October to April, May off, and then I honestly didn’t put in enough time last summer into the Black Belt program. It still needs to do stuff outside of just working with the coach. And so I learned that for this year, and so I’ve been doing some practice cases with other people who have interviews. I – I’ve been working with the coach this – this round for this recruiting cycle. And then I’ve been trying to write out different, different frameworks and not to memorize them, but I think it helps to have like a really broad sense of what your – of what you’re doing and why. For example, for – for this case, I, the really broad idea is is this the right market and then can we do it. Does it make sense. Is it feasible, and then how should we do it. And yeah, so.

Jenny Rae:

And I love this one. This is a very like business fundamental case, right? If we can create value for someone else, we can capture some of that value. It’s kind of one of those like very basic concepts. One of the reasons I love business, right? You know, the whole reason that business should exist is that it’s creating value for somebody that they are willing to pay for. Great, awesome. I think those are awesome tips. Well, I don’t know if some people might of questions for you, but now I’ll open up the floor to questions. You guys can put them into the chat bar, or you are welcome to unmute. But thank you, everyone, for coming, watching, and I will stick around for about 15 minutes to answer questions. Thank you Simon, so much. Appreciate you.

Simon Popkin:

Thank you.

Summary

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