Victor Cheng > Quotes

“using the profitability framework, you might be able to determine that a client’s profits have declined due to an industry-wide price war. But the framework can’t explain why the price war is happening and why it is happening now. To understand the latter, you need to develop a qualitative understanding of the client’s business.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Because the profitability framework won’t give me the additional information I need about customers and competitors, I’ve officially exhausted its usefulness. My working hypothesis has evolved and the current framework doesn’t cover the data needed to test that hypothesis,”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“In the market you’re analyzing, it’s useful to know if there are a lot of small customers or only one or two big ones. Even if the total spending is the same, the dynamic can be quite different. Once you know how concentrated the customers are, you want to compare this to the concentration of suppliers (your client’s competitors, typically). If an enormous discrepancy in concentration exists between customers and suppliers, then whichever is more concentrated tends to have more power in the industry value chain—the link of relationships between raw-goods provider to manufacturer to retailer to consumer. And quite often the most powerful player in an industry’s value chain will benefit economically at the expense of the weakest participants in the value chain.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“I recently took a client through this process, and one of the team members said to me, “It was very interesting that you did not just tell us the answer, but rather you led us to the answer.” I did so deliberately. People support what they help build, so if you involve all client team members in the process, they’re more likely to support the conclusion.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“You will do one of two things as soon as you’ve exhausted what you can determine mathematically in the case: (1) Refine your hypothesis and create a custom issue tree to drive the rest of your analysis, or (2) shift to understand qualitatively what you’ve determined quantitatively as the root cause of the client’s problem.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Candidate: Aha! Interesting. So industry growth is really being driven by a single segment that is offsetting flat and declining sales in other segments. (Note the effective use of a mini-synthesis.)”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“This structure synthesizes what you know, indicates what else you need to know, and lays out your plan to address those remaining issues. Use this approach anytime you think you’ve run out of time or when you have a pretty clear idea what your conclusion is but don’t have time to address one or two areas.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“How Is It Packaged? Packaging refers to what products and services are sold together. For example, years ago McDonald’s noticed that many customers ordered french fries and a soft drink with their hamburgers, so the restaurant shifted from selling hamburgers to selling “meal deals”—bundles of a hamburger or other sandwich, french fries, and a soft drink. The rest of the fast-food industry shifted dramatically in this direction too because other restaurants discovered that selling meal deals instead of separate items increased sales by 30 percent.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“The more concentrated the competition, the more you have to worry about it. If you don’t realize when a case involves high competitor concentration, you could easily make a strategic recommendation that’s flat-out wrong. The easiest way to assess competitor concentration is to ask the following questions: How many competitors are there? How big are they (in terms of sales or market share)?”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“The companies that win in commodity markets tend to be large and have incredible operational efficiencies or some type of cost advantage. Walmart is a perfect example of a winner in retail. Company size is a less-relevant factor for unique products as compared to commodity products, so you focus on other factors for unique products to determine which company will win over customers.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Nothing you said in your synthesis supported your point on unwinding Program B. You need to say, “After the short-term crisis has passed, it would be worth examining if Program B—the temporary solution— should be canceled ...” or something like that.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“To an outsider, it seems like a client paid a lot of money to a consultant, only to have the consultant repackage the client’s own insights in a different box. There is some truth to this criticism, but it misses an underlying point: Before the consultant entered the picture, many of these opinions were simply nebulous thoughts floating around the organization, and the CEO didn’t know whose opinions to value. More important, the CEO didn’t know which opinion to bet his or her entire career on.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Never, ever propose a solution to a case until you’ve isolated and defined the problem. Then and only then can you propose a solution.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“In my experience, the two most useful comparisons to make are the following: Compare a metric to itself in a previous time period. Compare a metric to the rest of the industry.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“The rest of the industry appears to have grown sales by 10 percent, with profits growing proportionally. This indicates that the industry-wide profit margin percentages have remained unchanged and that the primary driver of increased profits is sales growth. It also suggests the rest of the industry has not undertaken any major cost-reduction initiatives. If we solve the sales problem for the client, the data suggests that the profit problem will solve itself.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“If there isn’t any obvious segmentation pattern, avoid stating the segmentation pattern you want to see. Instead, phrase your question such that the interviewer tells you which segmentation pattern is the right one to use.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Competitor Behaviors Answer these questions: What strategic choices do key competitors make? Who are their customers? What products do they offer? What distribution channels do they use?”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“the candidate who stands out the most in an interview is the one who acts like a consultant already.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“many clients’ companies lose money, and typically one of a dozen or so common reasons can explain why. Thus, one commonly used issue tree deconstructs profits into component parts, enabling you to analyze each component to identify the root, or underlying, cause of the profitability problem. Because this is a somewhat standard analysis, we call this the profitability framework.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Candidate: Well, this is really interesting. So far we’ve established that digital advertising is the spending category that’s growing, and the most recent information shows us that the big companies spend the most on advertising. My hypothesis is that the big companies are the ones shifting toward digital advertising in their marketing plans. To test this, I need to see a breakdown of advertising spending for the big companies over the past three years. Are the big companies the ones driving spending in digital advertising?”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“If you start a case with absolutely no background information, this framework is used initially as an information-gathering tool. The questions in the diagram are what I call high-probability questions. When answered, these questions give you a very high probability of discovering some insight about the case—enough insight to prompt you to refine your hypothesis.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Based on this, my working hypothesis is that Omega & Omega must participate more effectively in this market segment if it wants to grow.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“the consultant’s process was the exact process consulting firms value. It was linear, logical, and based on facts (and reasonable estimates of them); it used numbers to quantify; and most important, other people could follow the line of reasoning easily.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“If I do any company analysis at all, I almost always ask two specific questions related to this topic: What does this company do well? What does this company do differently than its competitors?”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Hypothesis: Introducing XYZ product makes sense. Favorable customer factors Favorable competitive environment Favorable company operations factor Favorable aspects related to the product”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Sometimes there’s more than one type of customer, so you need to identify not only the customer but also the key customer segments. Once you know this information, you need to quantify it. If there are three customer segments, how big is each segment? Which ones are growing or shrinking?”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“Candidate: To better understand what’s going on for Omega & Omega and its industry, we need to look at four key areas: the customers, the products, the company itself, and the competitors.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“What Are Each Segment’s Distribution Channel Preferences? A distribution channel, or sales channel, is a company’s means of reaching and selling to customers. For example, websites and mail-order catalogs are distribution channels. Selling through a reseller such as Walmart is another, as is having a sales force that visits clients in person. Different segments of customers prefer to buy through different distribution channels. A client sometimes wants to serve a particular customer segment, but the client’s primary distribution channel is one that customers in that segment refuse to use. This conflict needs to be resolved in order for the client to have an effective strategy.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“A variable cost changes, typically linearly, with the number of units sold.”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting

“If your client isn’t winning in the marketplace, ask, “What is the competitor doing that we aren’t?”
― Victor Cheng, Case Interview Secrets: A Former McKinsey Interviewer Reveals How to Get Multiple Job Offers in Consulting