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  • {MUSIC} [NARRATOR] The following video is intended for candidates

  • interviewing for Business, Operations, Data, or Financial Analyst roles.

  • Your recruiter will let you know if your interviews will include case

  • interviews. This video is designed to show you what an Analyst case at

  • Capital One may look like. Candidates should not expect the same content

  • in their on-site interviews. Capital One has conducted case interviews for

  • analyst hiring since our founding in the 1990's. As Capital One continues

  • to challenge the status quo in financial services, we keep drawing from

  • what has made us great in the past: hiring great people and giving them

  • the chance to be great. In our Analyst casing process we look for candidates

  • who think powerfully. Our Analyst roles require rigorous problem solving skills.

  • Our cases evaluate HOW you go about solving problems, not just the specific

  • answers you come up with. We assess how well you grasp the concepts; how

  • well you analyze the data you have; and how well you communicate your results.

  • This video demonstrates a case Capital One once administered for Analyst roles.

  • The example gives you a sense of how our interviews work and what may make someone

  • successful in a Capital One case interview. You may note that Capital One cases tend

  • to be more quantitative than the standard case interview, given the nature of the

  • Capital One Analyst's role. This example showcases the three parts you would see in a

  • typical case: Introduction of the business situation and case framework. Calculations

  • based on key concepts and drivers of the case. Your recommendation

  • what is the business decision you would make?

  • Some helpful tips to keep in mind during the case.

  • Take notes on the key information.

  • Ask questions.

  • Show your work as you do it.

  • Talk through your thought process.

  • Let's begin.

  • [ CASER] Shall we start the case?

  • [CANDIDATE 1] That'd be great.

  • [ CASER] In this case, we will be talking about Ice Cream.

  • [CANDIDATE 1] Ice Cream?

  • [ CASER] Yes, this case is not about financial services. A lot of the

  • cases we deal with are not. We find it gives us a better idea of how you

  • think vs. how much you know about a specific industry. A lot of problems

  • we deal with on a daily basis are broader than banking.

  • [CANDIDATE 1] Interesting...

  • [CASER] In this case you are president and CEO for our ice cream corporation.

  • There's a CFO and COO, but you determine the business because you own the

  • product and sales. First question: What are the key factors you would take

  • into consideration as you build strategies to grow profits for this company?

  • [CANDIDATE 1] Let me take a second to gather my thoughts.

  • Ok... I think I have an idea of some of the key factors.

  • But first, can I ask a couple clarifying questions?

  • [NARRATOR] It's a good idea to write down your thoughts and ask questions a

  • long the way.

  • [ CASER] Sure thing.

  • [CANDIDATE 1] When you say I "own product" - I assume that means I essentially

  • own the products we offer? For example -- we have chocolate

  • and vanilla, but we could also add swirl?

  • [ CASER] Yes. Keeping in mind that ice cream flavors are well established..

  • [CANDIDATE 1] Of course. One more question: you mentioned I would be responsible

  • for sales. So, my job would be to maximize the amount of ice cream we sell?

  • [ CASER] Yeskeeping in mind that your job is

  • to maximize profit, not just sales.

  • [CANDIDATE 1] So I'd be responsible for setting up prices as well?

  • [ CASER] Yes.

  • [CANDIDATE 1] Got it. So, to answer your question: "what are the key

  • factors I have in mind?": I think the key things I think of are the

  • number of sales we have today; the prices we charge; the cost of making

  • ice cream; the number of sales in the market overall.

  • [NARRATOR] This candidate clearly shows his perspective on the concepts.

  • Writing down his answers helps him communicate and recall these later in

  • the case. Let's see how other candidates may have answered this question.

  • [CANDIDATE 2] I'd think about the level of competition and the chance

  • we have to increase sales & profits by changing prices.

  • [NARRATOR] This candidate gave a shorter answer.

  • [CANDIDATE 3] There are a lot of factors I have in mind.

  • I'd think about what markets we're in, and

  • the sizes of those markets.

  • I'd want to know how many competitors we have, and their size.

  • Lastly, I'd like to understand what our price is and how that compares

  • to our competitors and to other comparable goods... like cookies for example.

  • [NARRATOR] This candidate mentioned a broad list of items.

  • The caser will ask more questions and the candidate should try to

  • focus his answers to identify the most important factors.

  • [CASER] That's a pretty broad listkind of everything that the CFO and COO

  • wouldn't be concerned about. That's a great start. Can you talk to me a

  • little about how you might prioritize these, since it might be difficult to

  • keep everything in mind at once?

  • [CANDIDATE 3] Sure. The order I listed them is pretty much the order of

  • importance. What's our number of markets; what's our penetration in each

  • of those markets, and what would happen if we change price?

  • [CASER] Let me give you a little background on this: We're already a leading

  • domestic supplierwe're in every market, and not looking to add any.

  • We know the competition's fierce, but defined: there are national and regional

  • players, we're not expecting any new entrants into the market or much

  • innovation. Just steady competition.

  • [CANDIDATE 3] Then pricing would be the most important driver.

  • [CASER] I'm glad you mentioned pricingpricing is the one factor we can

  • control, we're not looking to enter any new markets, and we know the

  • competition's going to make up their minds... But we can control pricing.

  • [NARRATOR] If you have a long list, we may try to focus you

  • in order to dive deep on one dimension of the case and to get to a

  • recommendation. This is very common and not something to worry about.

  • Here is an example of how that might happen in an interview.

  • [CANDIDATE 1] So... of everything we discussed, changing price is the key factor?

  • Because if we changeour price, it'll affect our volume of sales and our total profit...

  • [CASER] Ok, that makes sense.

  • [CANDIDATE 1] So pricing is a key leversince we own that decision.

  • But I have to highlight the role of competition. Not so much who and

  • how many competitors there are, but just the fact that there is competition.

  • If we raise our price people will switch to other brands. And, if we lower our

  • price, competition will react. So we need to understand how that will play out.

  • [CASER] Ok so let's talk about the risk in that strategy.

  • [NARRATOR] The conceptual section discusses the key levers that drive upside.

  • There are also risks to any option that you should talk about.

  • [CANDIDATE 1] Well the risk here is a price war. If we lower our price

  • and consumers switch to our brand, competition will just lower price

  • and those consumers will switch back.

  • [CASER] What would you do to mitigate this risk?

  • I'd focus on promotional pricing rather than a permanent price change.

  • Run a discount for a period of time, and then return to normal pricing

  • before competition reacts.

  • [CASER] So we've gotten most of this situation figured out. Are there any other

  • factors you can think of?

  • On top of pricing? I don't know; I think there is an upside to Brand

  • loyalty after the promotion ends. People tried our brand when it was

  • priced lower, and now they prefer it.

  • [NARRATOR] There's one additional concept here, but this candidate is

  • struggling with it. Asking questions helps get the candidate back on track.

  • [CANDIDATE 1] One thing I'd like to clarify. Are we assuming that ice cream

  • is a non-perishable?

  • [CASER] Yes, it is non-perishable.

  • [CANDIDATE 1] So, there could be a post-sale effect?

  • [CASER] Please explain.

  • [CANDIDATE 1] Well during the promotion, sales go up. But after the

  • promotion, maybe sales go down. People took advantage of the sale and don't

  • have to buy as much once it ends. Does that make sense?

  • [CASER] That makes sense.

  • [CANDIDATE 1] So, then there's a risk that our promotion eats away future sales

  • and profits. People buy extra while prices are low, and then buy less when prices

  • return to normal. Then the promotion doesn't drive as much profit as we think.

  • [NARRATOR] When you reach a conclusion, there's no need

  • to continue to ask questions. Assert the insight that you have.

  • [CASER] Yes, this is an important risk. Your actions have a pulling

  • forward effect, and through the cycle your net profits even out some.

  • We'll call this factor "stocking-up" from now on.

  • [NARRATOR] This candidate realized a key assumption and quickly reached

  • this concept by discussing it with the caser. Not every candidate will realize

  • this as quickly as this one. As we'll see in the analytical section, some

  • problems are easy and some are more complex. Some have long answers and

  • some have shortcuts. Some candidates get the solution right away, while some

  • candidates need to ask questions. The key is showing the caser you grasp each

  • new concept as the case continues. To recap what the key concepts are:

  • Role of promotional pricing.

  • Temporary to avoid price war.

  • Risk of the stocking-up effect.

  • [CASER] So far, we've laid out the key concepts in this case.

  • Let's go into some calculations. I'll give you some data and ask

  • you to calculate total monthly profit. Today, we sell cartons of

  • ice cream for five dollars.

  • [CANDIDATE 1] Five dollars a carton.

  • [CASER] Our cost is one dollar per carton.

  • [CANDIDATE 1] How much of that is fixed or variable cost?

  • [CASER] Assume that fixed cost is negligible and this is all variable cost.

  • [CANDIDATE 1] Cost is one dollar per carton.

  • [CASER] Also, we'll use a very simplified number to make the calculations

  • easier. Assume we sell just one hundred cartons each month.

  • [CANDIDATE 1] Demand is one hundred cartons per month. I should be

  • able to calculate the current profit from this. Five dollars per carton, times

  • one hundred cartons is five hundred dollars total revenue.

  • One dollar cost times one hundred cartons is a hundred dollars

  • total cost. Subtracting out five hundred dollars revenue minus one

  • hundred dollars cost is four hundred dollars total profit.

  • [NARRATOR] Make sure to clearly write equations & calculations.

  • There are often multiple ways to get to a result in a case.

  • [CANDIDATE 2] I can calculate per unit profitfive dollars minus

  • one dollar. That's four dollars profit per unit. With one hundred

  • units, our monthly profit is four hundred dollars.

  • [NARRATOR] There are multiple ways to answer this.

  • Think creatively and solve in the way you think is best.

  • [CASER] Now calculate the monthly profit if we run a 10% off promotion.

  • [CANDIDATE 2] I think I need more information.

  • [NARRATOR] Think proactively about what you need to solve

  • a problem. If you don't have it, the caser might.

  • [CANDIDATE 2] How does quantity of sales change when we change prices?

  • [CASER] Great question. I have one more piece of data that might help.

  • The elasticity of demand is negative four.

  • [CANDIDATE 2] Can you explain that please?

  • [NARRATOR] If you don't understand a concept, ask. And if you think you

  • understand it but aren't sure, then explain your view and ask the caser to

  • confirm. The caser wants to work through this with you.

  • [CASER] Sure. What do you need to know?

  • [CANDIDATE 2] Can you define elasticity please?

  • [CASER] Elasticity is defined as percent change in quantity over percent change in price.

  • [CANDIDATE 2] Ok. So, if price increases by one percent, quantity would

  • decrease four percent, and vice-versa for a price decrease.

  • For this example, if we drop price by 10%, quantity increases by 40%?

  • [CASER] You got it.

  • [CANDIDATE 2] Ok, that makes sense. I should be able to calculate

  • the new profit now. First is the new price per carton. Five dollars was

  • our original price per carton, we reduce price by ten percent so the new

  • price is four dollars and fifty cents. This makes total revenue of four-fifty,

  • times one hundred and forty cartons, and total cost one dollar times one

  • hundred and forty cartons. Let me just calculate this... That's six thousand

  • three hundred revenue minus one hundred forty cost. So, six thousand

  • one hundred and sixty is our new total profit. Let me double-check that...

  • it should not have gotten so much bigger. Let‘s seeone hundred and forty

  • times four point five is six hundred and thirty dollars. Ok that makes more

  • sense. So, monthly profit in the promotion is four hundred and ninety dollars.

  • [CASER] That makes a lot more sense.

  • [NARRATOR] Stay organized to avoid mistakes in calculations.

  • Listen to your caser, double-check your work, and correct as quickly as

  • possible and keep in mind: there's a shortcut here that makes this a lot easier.

  • [CANDIDATE 2] Per-carton profit is now three dollars and fifty cents. With

  • one hundred forty cartons sold, this isthree point five times one hundred

  • and forty, or four hundred and ninety dollars profit.

  • [CASER] So would you recommend we do the promotion?

  • [CANDIDATE 2] There's another factor we discussed beforethe

  • stocking up effect. Do you have any data about historic stock-up rate?

  • I mean, that might help my decision...

  • [NARRATOR] For this candidate, having information

  • written down helped to recall an important factor.

  • [CASER] We actually don't have any data on this, because we have not

  • tracked it for previous promotions. How will you figure out what to do?

  • [CANDIDATE 2] Well, I'd think about a break-even calculation.

  • [NARRATOR] This candidate recognized that a break-even calculation

  • is common in a case where you lack specific data and need to make a

  • recommendation. For some candidates, this part is much harder and

  • they may not get to this answer as quickly. They may need to ask

  • the caser questions to get to this portion that links the stocking-up

  • concept to the analytic questions.

  • To set up this break-even, a profit increase in a discount month is offset

  • by a profit decrease post-discount due to stock-up. Where these equal each

  • other, we break-even. Let's say this is a one month promotion.

  • With forty additional units sold one month, what's the maximum number of

  • those forty that can be stocked-up so that we break-even post-promotion?

  • That's basically what I am trying to solve...

  • [CASER] Can you set-up and work through this for me?

  • [CANDIDATE 2] Sure. Let's call the number of stocked-up units N.

  • So N out of forty will be the stocked-up rate. We made ninety dollars extra

  • during the promotion, and would break even if profit is ninety dollars lower

  • after the promotion ends. So, plugging in numbers and solving

  • I know that post-promotion our profit goes back to four dollars

  • per carton. Dividing the ninety dollar profit decrease by four dollars per

  • carton means that N is equal to twenty two point five. So, we break-even if

  • twenty-two point five of the increased sales are from stocking-up.

  • [CASER] Ok.

  • [NARRATOR] The candidates have solved all the lead up questions and are

  • now at the last step in the case. When they combine their intuition and the

  • data before themwhat do they recommend? Why do they recommend this?

  • Let's see what some of our candidates have to say.

  • [CASER] Back to my last questionwhat do you recommend?

  • [CANDIDATE 2] I may be wary of a situation where we don't have a lot of

  • information on a key driver like stock-up rate. I don't think it's unreasonable

  • that most or even all of the demand changes come from stocking-up. I might

  • evaluate other innovation opportunities or maybe a smaller scale promotion,

  • just to compare before we launch.

  • [CASER] That's reasonable, it's up to you to make the decision in this case.

  • Can we talk about what information you'd like to gather to help inform

  • your decision on how to grow?

  • [NARRATOR] This candidate took a more conservative approach. That's ok,

  • as long as they can explain why. From here, the caser will challenge them to

  • push their thinking and come up with ways to get behind a growth strategy.

  • How might other candidates think about this?

  • [CANDIDATE 3] I'd feel pretty good about doing this promotion. It just seems

  • unlikely to me that more than half of the change in quantity would be

  • stocked-up. I'd recommend moving forward with this promotion, and just

  • keeping an eye on competition just to make sure we don't start a price war.

  • [CASER] So you would go all out on running this promotion?

  • [CANDIDATE 3] I'd run it on a smaller scale, maybe regionally, but I'd expect good results.

  • [CASER] How would you structure that?

  • [NARRATOR] This candidate took a more bullish approach, and that is ok too.

  • [CANDIDATE 1] I'd definitely like more information about what the stock-up rate

  • would be. I know we don't have it, but I'd think about ways that we can get that.

  • Either all of the quantity change can be stocked-up, or none of it can be, or it can

  • be somewhere in the middle. Our break even is near the half-way point. So I'd

  • really like more information.

  • [CASER] How would you go about getting that information?

  • [CANDIDATE 1] We could do some research, or ask other firms. We might

  • think about doing a small test. We can do that to limit cost and risks in a

  • few regions or a few stores. We can look over those the next quarter, and

  • then make a decision on where to roll-out from there.

  • [CASER] So, you recommend moving forward, but on a small-scale testing

  • basis and then have plans to grow in the future?

  • [CANDIDATE 1] Yes.

  • [CASER] That's actually really interesting. Tests of this sort are something

  • that we actually often do at Capital One. I'd like to hear you talk about how

  • you'd structure this test.

  • [NARRATOR] This brings us to the end of this example Analyst case interview.

  • We hope that you found this example of conceptual setup, analytic problem

  • solving, and forming a recommendation helpful. Remember to come prepared

  • to think both qualitatively and quantitatively for your case. Ask questions,

  • write key information, and explain everything as clearly as you can.

  • Thanks for watching, and good luck!

  • {MUSIC}

{MUSIC} [NARRATOR] The following video is intended for candidates

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