BCG Case Interview Example: Product Launch in Healthcare

In this video, watch a live case interview as a former BCG consultant tackles a product/service launch case for a healthcare client. The case focuses on evaluating whether the hospital should terminate its contract with a third-party pathology service provider and offer that service in-house.
Throughout the case interview, the candidate demonstrates a structured approach to solving the problem, dividing their analysis into three main sections: strategic fit, financial assessment, and potential risks.
The format of this case interview is quite similar to leading management consulting companies, such as McKinsey, BCG, Bain, Kearney, Strategy&, and Oliver Wyman.
Chapters are provided in this video for easier search:
[00:00] Introduction
[00:11] Case Prompt
[01:40] Clarifying Questions
[04:16] Framework
[08:09] Strategic Fit
[18:23] Financial Assessment
[28:20] Risks
[31:09] Conclusion
[32:13] Final Feedback
You can download the written version of the case for free here: prepmatter.com/course/get-the...
Please leave a comment if you have any questions. Our Prepmatter team will be more than happy to answer them!
RESOURCES:
1. See the Get the Offer course at prepmatter.com/get-the-offer
Get access to our exclusive case and fit interview content, including over 41 animated videos, 10 live cases and 26 live fit interview examples, over 40 case studies, exhibits, and structuring drills.
2. Avail of the FREE Secure the Interview course at prepmatter.com/secure-the-int...
This can help you create that perfect resume and cover letter that will leave a good impression.
3. Take the Online Assessment Guide at prepmatter.com/online-assessm...
Practice solving test tasks that companies usually ask before inviting you over for interviews.
4. Learn more about our Case Interview Coaching at prepmatter.com/case-interview...
You can work with Prepmatter coaches on a 1-on-1 basis to accelerate your learning.
Subscribe to our KZbin channel: / @prepmatter
#prepmatter #managementconsulting #caseinterview

[@edanicole7876]

super helpful thank you

[@user-xu9bn6tv7f]

I am an engineer working in chemical company, case study framework is really useful and adaptible to all kinds of jobs.

[@Prepmatter]

You can download the written version of the case for free here: prepmatter.com/course/get-the-offer?lesson_uuid=67c440e9-ad0a-4c18-9082-2b84424ed51c

[@sophiaho3591]

Would this be considered MECE if the points under the Risks bucket mirror a lot of the points under the Strategic Fit bucket i.e. adoption of new processes and customer demand? Would it not be better to instead split the first bucket into Capabilities and then Market (which would incorporate customers and competitors), so along with the Finance bucket gives you 3 buckets?

[@Prepmatter]

I agree that the candidate could've had a more MECE framework if he hadn't touched on the processes under the risks (as eventually, he proposed looking at similar things). We recommend having a risk bucket so that candidates can brainstorm ideas not yet covered in the first and second columns of the framework. It's also a good way to show the interviewer that you can and plan to look at some downsides/caveats as you find a solution to the client's problem. It's often difficult to mention risks embedded in the capabilities, market, and financial assessment columns. But in practice, as you move along the case, you can refer to risks here and there, based on your assessment. You don't always need to wait until the end of the case.

[@ruchit856]

I have one question, why are we deducting Capex from net profit? If we were to compare Capex to profit wouldn't ROI be a better measure?

[@Prepmatter]

Good question. In this case, the candidate deducts CAPEX from the operating profit, not the net profit. But he could've been more clear with the definition of profit during the financial assessment. In terms of using ROI as a better measure: I'd say it depends on the client's initial financial objectives. In this case, they're looking for a $30M total profit. Hence, he didn't need to use the ROI formula. But if the client didn't state a quantifiable objective at the start, then as a candidate, you can certainly propose to use ROI!

[@fidanmuradova5299]

Hi, hope you are doing well. I have a question. why do we add 10 K on 100K in the second part of calculation? we have already considered profit from this 10 K in the first part separetely.

[@james37959]

I also don't understand the calculation. Did you come to 95 million or 145 million?

[@Prepmatter]

Happy to elaborate! The candidate structured his analysis by revenue stream. In the first approach, he focused on the incremental profits generated by cancer treatment services. The client already serves 100K patients; however, thanks to a full-suite service, there will be an influx of an additional 10K patients. This is why he incorporated the figure of 10K in the first approach. In the second approach, the focus shifts to profits derived specifically from the new pathology services. He discovered that 110K patients would require this service, hence the inclusion of the 110K figure. In summary, the client is experiencing increased profits from two sources: a 10K-patient increase for cancer treatment and 110K patients for the pathology service. I hope this explanation is helpful!

[@Prepmatter]

​@@james37959 An additional profit of $50M comes from cancer treatment and $95M from pathology services, hence $145M in total. However, due to the $100M initial investment cost, the NPV comes down to $45M.

[@james37959]

Thank you for your reply, wouldn't the cancer patient treatment services just fall under the pathology services? As the cancer patients are using the pathology service If that makes sense. The additional cancer patients using the service would end up paying 1000k for both cancer treatments and the pathology service. Or are the cancer patient services and pathology services separate. @@Prepmatter

[@arjungutta7762]

@@Prepmatter why is the $100M initial investment cost not included in the earlier cost calculation, when the $91M/year cost is calculated? as in, how does that $5M/hospital cost differ from the costs included in that other figure?

[@rikes-lh3cy]

Just a quick q! Why is the candidate directly using profit margin to calculate the profit from the additional customers but using the revenue-cost framework for the profit from the existing customers? Got a bit confused here

[@Prepmatter]

Good observation; both methods are acceptable. Doga must have chosen to use gross margin because the additional number of patients would not increase the fixed costs, only the variable costs. In these instances, we often refer to gross margin for ease of calculations. Whereas in the other scenario (revenues from pathology services), it's a totally new business, hence it makes sense to lay out in detail the entire cost structure. Hope that helps!

[@user-ne1xt5eb3b]

They didn't use discounted cash flow in projecting the financials, is this accepted or even the expectation in case interviews? In addition, is it overkill to account for the % utilization of hospital facilities and personnel? They mentioned an additional 10k patients that would generate profits to justify the investment. On the other hand, the hospital must already have this slack to absorb the expected new demand and realize the additional profits. Otherwise, they would have a parallel investment on increasing hospital capacity.

[@Prepmatter]

Thanks for your questions! 1) DCF: In real-world scenarios, DCF is the best method to project financial feasibility. In case studies, working at the DCF level isn't that common; candidates mostly work at the operating profit level. However, as a candidate, you can propose working at the DCF level and see if the interviewer is open to it. 2) % utilization: You are absolutely correct. The candidate assumed that the hospital group has the capacity to serve additional cancer patients. This assumption could have been verified during the interview. It's not overkill; verifying such assumptions with the interviewer can earn you bonus points!

[@kaijieyang6051]

the profit calculation assumes that profit factor remain the same over 5 years period.. what will be a good multiplier factor? Profit margin expected to increase or decrease YoY?

[@Prepmatter]

In a real-life scenario, the revenue and costs would increase at around the same rate, and margins would likely stay the same. In the actual case interview, it might be a good idea to check with the interviewer if we should keep price, quantity, and costs constant over the next 5 years. In most cases, for simplicity, you can keep them constant. However, if the interviewer pushes you to consider a different solution, you could run an NPV analysis for 5 years with a discount rate of 10% (which is the most common WACC rate).

[@pedroalbano7007]

curious, why didnt you discussed about the loss in income from existing third party pathology services? dont the hospital profit from this third party services as well?

[@Prepmatter]

Great point! I'm not sure if the interviewer mentioned it in the case, but we assumed that Pudong Hospital does not generate any revenue from their pathology referrals. Of course, the candidate should have clarified this.

[@GoO0f]

My view: Clarify the objectives and lay out the framework as you do nicely, but focus on the financials. You waste way too much time in the first 30% of the case - in the real world you will not have that much time.

[@SimonJack94]

What office is this interview for?

[@Prepmatter]

This is a mock case created by the Prepmatter team. It represents a typical case study asked by BCG and other consulting firms.

[@ShadE97]

just reading from a script

[@Prepmatter]

If you are referring to Visha, the interviewer, she refers to the case study occasionally to provide data points, which is quite common in real-life case interviews. However, Doga, the interviewee, is performing the case live. His polished performance might give the impression of a script, but considering he is a former BCG consultant with 4 years of experience, it's expected that he would perform above the level of an average candidate.

[@ShadE97]

@@Prepmatter in that case hats off to him :)

[@harshdesai4906]

honestly doesnt look to be a "live" case interview. Every question he asks leads to a new data ??

[@Prepmatter]

Doga, the interviewee, is actually performing the case live. Considering he is a former BCG consultant with four years of experience, it may feel as if he's walking through a script. However, he's just a good performer :)

[@Ansh.Varma.Career]

This is not live 😂😂

[@Prepmatter]

Hi Ansh, it is indeed a live case interview. We've made several edits, such as adding feedback and framework visuals, to ensure that it's easy to follow.