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Guidelines
Welcome to the first step of the recruitment process at Bain & Company, Inc. You are about to get a firsthand
experience on practical Bain casework. The test is based on modified Bain cases and is designed to assess your
approach to problem solving using strategic thinking and deductive reasoning. At Bain, we are more interested in
‘how you think’ rather than ‘what you’ve learnt’.We work on diverse complex situations spanning across multiple
industries and sectors, but present only concise, relevant information to our clients. In order to do the same, we
understand the data, interpret the insights, and finally present what we infer in an organized manner. Thistest is
designed to simulate the same experience for you!
While attempting this paper:
! Understand:Read the case studies carefully and identify the underlying problem. Make sure you do not
leave out any inputs or key data points
! Interpret:Focuson detailsin the text and charts. Pay attention to the period of analyses and units used
! Structure your approach: Manage your time by answering the questions smartly. For instance, some
questions do not require calculations but only involve simple elimination of choices. Always do a quick check
before answering
Instructions
! This booklet consists of 25questionswithmultiple choices. Each question has a single correct answer
! It not necessary to answer allquestions. You mayattempt these questionsaccording toyour strengths and
time.Read the question extremely well and attempt it only when you have fully understood what is to be
done
! Use of any electronic devices (calculators, mobile phones, etc.) is strictly prohibited while answering the
test
You have 60 minutes to complete the test. Keep your composure and best of luck!CASE STUDY 1
Our client, Energy Co., is a major integrated oil company that engages in the exploration, production, refinement
and distribution of oil and gas present in 70 countries. Although they enjoy a relatively good position in the
market, they have witnessed increasing costs and internal inefficiencies in the organization. This has resulted in flat
returns in a growing market.
The global market is becoming increasingly challenging for the company, especially given the fact that they are
playing across a huge number of geographies. Although having strong market share, other strong players have
emerged with greater cost reduction capabilities, pushing the CEO to become apprehensive. This has forced him into
action and he has expressed to Bain that he is seriously contemplating serious cost reduction measures and establish
newer synergistic relationships with other organizations for the same.
Energy Co, like other MNCs,also wants to capitalize on their superior technology and market dominance to further
their presence in the Oil and Gas industry.
Q1. Based on the information given in the paragraph, which of the following statements aptly describe one of Bain
and Co.’s objectives?
a. Expand client’s footprint in fast growing geographies
b. Cost cutting by adopting cheaper methods of production
c. Find cost savings by reducing organizational complexity and optimizing geographic portfolio
d. Tap into complimentary business segments to drive profitability
Chart 1-3
Q2. Which charts would Bain have to make to validate the CEO’s apprehension?oa. 1& 3
b. 2and 3
c. 2only
d. 1only
Q3. If fixed cost = ¥3M in 2011 and assuming overhead to be the only cost, we want to find profitability of the
company in 2013. Which of the following data points wouldbe sufficientto calculate this?
oa. Revenue across years
b. Profit % in 2011 and revenue growth between 2011-13
c. Revenue growth in 2011-13 and growth in “fixed cost% of total”
d. None of the above
Q4. Bain studied all the markets that Energy Co. was present in and was able to make the chart 4below. What is the
most important inference of this chart?
Chart 4
a. Emerging markets are the most profitable levers for the company
ob. Total profit is spread out over 70% of countries
c. Top ten countries account for >90% of profitability
d. 20% of countries are unprofitableChart 5: Energy Co was benchmarked against comparable competitors and they made this chart
o o o
Q5.From the data above, manpower is the most productive in which of the following options?
a. G
b. K
c. M
d. None of the above
Q6. Which of the following statements can be concluded about Energy Co.from the data in chart 5?
a. There are more managers in the company than people to be managed
b. Drop in profitability due to over-hiring
c. High number of organizational layers leading to internal complexity
d. None of the above
Q7. The CEO said that few years back, they formed multiple joint ventures and partnerships with companies to
expand across geographies, since then complexity in the organizational structure has increased. To validate this what
should Bain consultants do to validate such a statementa. Revenue trends across business units and geographies
b. Look at how “Revenue per unit employee” has changed
c. Check how general and administration (G&A) costs have changed over the years across geographies
d. Send employees an online questionnaire to ask their thoughts
Q8. The Bain team recommended the following strategies to the executive board:
1. Focus on increasing scale and revenue in markets where they are small
2. Divest from the multiple sub-scale countries which do not contribute to profitability
3. Reduce number of work levels in the organizations and avoid duplication in role
4. Introduce reforms and legal revisions and update obsolete manufacturing procedures
From the above information which course of action should the company go ahead with according to you?
a. 1only
b. 1and 3
c. 2and 3
d. 1and 4CASE STUDY 2
Apparel Co. is a leadingapparel retailer concentrated on men, women and kids wear in Shanghai. Having been in
existence for several decades, it has earned solid reputation for itself and commands a loyal set of customers in
the region. Apparel Co. has 10 stores in four differentlocations. Recently, it also made foray into offering its
products through online channels as well.
The CEO of Apparel Co.has been informed that though the top lines have remained stable in comparison to
competitors, the profitability has been declining.
To promote its online channel, the company has recently set up a comprehensive website for its customers and is
engaging itself in actively advertising it through print and social media. The plan is to drive ~50% of total sales
through online channels by 2020.
Out of the four locations that Apparel Co. runs its stores from, some of them have multiple stores located within a
short driving distance of each other and are not contributing much to the profitability. In addition, the rentpaid for
some of the stores is relatively higher due to the store being located in a posh locality. However, Apparel Co. has
been doing a good job at controlling its distribution costs due to company stores spread across the city.
The CEO wants Bain to investigate the issue in detail and devise a blueprint for the future. Bain has a team of five
members on the case and you are the Associate Consultant on the team. In your opinion:
Q9. Which of the following most accurately describes why Apparel Co.approached Bain?
a. To chalk out a plan for the company on how to increase profitability by driving revenues
b. To understand the scope for further development of sales through online channel
c. To re-evaluate their brand image to create prime product perception
d. To devise a profitability plan by understanding the company’s operating costs
Q10. Which of the following do you think is the most relevant step that the client should take to address the issue?
a. Develop its online platform to drive total revenues and henceimprove profitability
b. Close its online channel as significant costs are being incurred in advertising its website
c. Optimize its current store foot print by identifying store clusters with low contribution to profitability
d. Open new stores across the city to drive revenues and hence improve profitability
Q11.Which of the following information will be least useful for Bain in addressing the client’s needs?
a. Benchmarking metrics and data on its competitors’ profitability
b. Market attractiveness of the variousstore locationsc. Financials of individual stores
od. Overall profitability figures of Apparel Co. for the last 5 years
Chart 6summarizes some of the fundamental information that we received from the client.
Store Area Revenue (RMB M) Profitability(%) Market Share(%)
I A 45 30% 1.6%
II B 30 20% 1.1%
III B 50 20% 1.8%
IV C 120 5% 4.4%
V D 20 -10% 0.7%
VI B 40 ii -2I0% 1.5%
VII A 50 -15% 1.8%
VIII A 70 20% 2.5%
IX B 95 12% 3.5%
X D 30 10% 1.1%
(cid:38893)
Chart6
Q12. Out of the 4 locations, that Apparel Co. runs its stores from, which of the following contribute the most to
company profitability? In addition, which location stores contribute highest to the total market share of the
company?
A 30t a 15 35 1.61.8125 5.9
a. Location A, Location B
B rot so hot12 32 1.1 1.8 1.5 3.5 7.9
b. Location B, Location B
c. Location C, Location A
d. Location A, Location A
Q13. Which of the following is correct based on data given in Chart 6?
a. Store IX earns maximum profits in absolute terms
b. Company’s overall profitability is 8-9%
7.2
c. Total losses being incurred by stores V, VI & VII is more than RMB 20M 2 8 7.5 17.5
0d. Current market share for overall company is ~25%
Q14. If we shut down Store V, Store VI and Store VII, what will be the total profitability?
a. ~10%
b. ~14% 2.71
c. ~20% 6.71
d. ~25%
3.29The team took a closer look at Apparel Co.’s revenues by business segments (i.e. Men, Women and Kids) to gain a
broader view on the financials of the company. Chart 7summarizes the information that the team received from the
CFO of Apparel Co.
Chart 7
Q15. Which of the following youCAN NOTimply from the data given in Chart 7?
a. Apparel Co. is earning maximum revenue from Store IV Kids segment
b. Store X needs to focus on Men segment to increase its revenues
oc. Location C stores are giving maximum revenue in Kid segment among all locations
d. Store V earns least revenue in Kids segment amongst all stores
To investigate further, Bain team also visited the Apparel Co. headquarters and various stores to get a view on
success drivers for each of them and incorporate other store level inputs in to its findings. Chart 8summarizes
some of the inputs that Bain received from expert interviews conducted with the store managers.
Q16. Based on these excerpts from the interviews with store managers, which one of the following factorsis
driving profitability?Chart 8
a. Number of customer visiting store
b. Conversion rate (% of customers who end up making a purchase out of total customers visiting the store)
c. Store size
od. Store closeness to the warehouseCASE STUDY 3
It is 2010 and the automobile Industry is one of the fastest growing industries in the world as the disposable incomes
around the world has been increasing. Every company has devised elaborate strategies to strengthen their foothold.
Car Co. is active in China, but the company is lagging behind direct competitors and losing share. Global volume
ambitions require Car Co. to grow over-proportionally in China, the biggest vehicle market worldwide. Car Co. has
ambitious plans of expanding in China, which is one of the biggest economies in the world. The regional China market
has seen entrance of several major international players and consequently a lot of joint venture and local partnership
activity.
There has been a big shift in the demand for more expensive luxury vehicles in China. Analysts speculate this is still
very short of full potential. Different provinces of China market have different growth cycles due to the unique
regional demographics.Affluence level is an important metric for this industry and China has seen a rise in affluence
levels majorly driven by the expansion of high paying white collar jobs from new players that have entered the
manufacturing and service sector in the country.
Within the Tier 1 cities, the Eastern cities have seen more of these high paying affluent jobs. Consequently some of
these cities have become big targets for luxury vehicle players and the trend is said to continue
Given the activity, Car Co also wants to look at local players and their capabilities, with the aim of integration to scale
production, sales and services. The CEO wants to investigate and scan the market and understand its dynamics and
has called in Bain.
Q17. What could be the eventual objectives of Bain’s engagement with Car Co.?
a. Technological development of Car Co’s manufacturing facilities
b. Entry into the Chinese fast growing automobile market
oc. Expansion strategy into newer market segments in the Chinese automobile industry
d. The client wants Bain to devise a new supply chain management strategy in ChinaChart 9
Q18. In 2021, what will be the % of “90-150K” households, if the total and segment households are to grow from
2020 at the same rate as they grew in 2015-16?
77.76
72
a. <15%
307
b. 18-20%
(cid:2191)
c. 23-25%24.59
d. >30%
31621
8
Q19. What could be the reason for the high growth of >150K market segment?
a. Drop in automobile prices and car theft cases in last two years
b. Industrialization and entry of large multinationals
c. Political stability and reduction in costof education
d. Increase in the maximum permissible work ageChart 10
Q20. After seeing chart 9and the above chart in a client meeting, which of the following options is the most practical
inference?
a. Korea and Japan may serve as more cost-effective sites
b. Focus of Car Co should be shifted to developed markets
oc. Luxury vehicles has future potential in China
d. None of the above
Chart 11
Luxury premium vehicles in China (K)
V20
140.2
inQ21. In Chart 11, in how many years can Mercedes Benz take over Audi as the market leader (assuming the annual
growth remains the same)?
a. 1 year
b. 2 years4798(cid:1382)
400.5
c. 3 years
d. 5 years
Chart 12
Q22. From the above chart, which of the following statements is LEASTjustifiable?
a. Luxury premium vehicles sell more in regions with higher affluence penetration
b. Nascent Eastern citieshave significant potential in future
c. “Car parc” (number of cars in an area) is higher in mature tier I cities than in developing cities
d. Most Mid-west cities have low affluence potentialChart13
Q23.According to Chart 13, what critical information can be inferred?
(cid:3659)(cid:5233)(cid:1674)(cid:1319)(cid:7054)(cid:1275)
a. Foreign brands for premium cars are important
b. Foreign brands for premium is NOT very important and foreign production is NOT important
c. Foreign production for premium cars is NOT important but foreign brand is important
d. Foreign brands and production for premium cars is importantChart 14
Q24. What can be inferred from the above statements, in Chart 14?
a. There is a rising segment lead by young consumers in the Chinese market
b. The clients are increasingly preferring larger premium cars such as SUVs
c. Increase in number of road accidents has led to higher demand for bigger cars
d. The demand for automobiles in China primarily driven on family size
Q25. What would be one of Bain’s likely recommendations to Car Co in their growth strategy?
a. Focus on other fast growing markets like India and Brazil and diversify their investments to reduce risk of
failure in a fast changing environment like that of China’s
b. Set-up new manufacturing facilities to exploit economies of scale
c. Should enter the luxury premium car segment as consumers find it attractive and it is gaining traction
especially in nascent Eastern cities
d. Invest in sales and marketing to push their products to the fast growing and impressionable luxury segment
