Getting industry-aware fast: the 10-minute industry scan
A ten-question template to run before any interview, and how to use annual reports and earnings calls for free, with a worked scan of cement.
Firm processes and online tests change from year to year and differ by office. Use this to prepare, and confirm the exact current steps on the firm's own careers page.
Key takeaways
- Ten focused minutes on who the customers are, how the money flows, what the costs are and which numbers matter give you enough industry sense to structure a case in that industry.
- Annual reports. The business overview explains products and customers.
- Earnings calls and investor presentations. Listed companies present results every quarter or half year.
- Industry associations and regulators. They publish free statistics: for example IATA for airlines, the GSMA for mobile operators, and national regulators for approved medicines or licensed banks.
Key idea
Ten focused minutes on who the customers are, how the money flows, what the costs are and which numbers matter give you enough industry sense to structure a case in that industry.
You will not become an industry expert before an interview, and you do not need to. Interviewers want to see that you ask sensible questions and reason from how the business works. A short scan, done the same way every time, gives you that. Run it on the two or three industries your target office works on most, and on any industry named in your invitation.
| Minute | Question | What to write down |
|---|---|---|
| 1 | Who are the customers? | Who pays, who uses and who decides (in healthcare these are often different people) |
| 2 | What are the products? | The main product lines and how customers choose between them |
| 3 | What is the value chain? | The 4 to 6 steps from inputs to customer, and which step the client is in |
| 4 | How does the industry make money? | The revenue equation, such as volume x price, or users x ARPU |
| 5 | What is the cost structure? | The 2 or 3 biggest costs, and whether each is fixed or variable |
| 6 | What are the key metrics? | The 3 numbers managers watch, each with a plain definition |
| 7 | Who are the main players, by region? | 2 or 3 names per region from a reliable source. Never rank without a source. |
| 8 | What are 3 trends? | Each dated and sourced, with how it changes profit |
| 9 | What are typical case questions? | 2 or 3 prompts, and the driver you would check first in each |
| 10 | What is your one-line summary? | "This industry makes money by ..., and its profit depends mostly on ..." |
So-what
Fill one page per industry. Reread it on the morning of the interview.
Where to find the answers for free
- Annual reports. The business overview explains products and customers. The segment note splits revenue and profit by business line and region. The management discussion explains what changed and why. The risk factors list what could go wrong. US companies file a 10-K on SEC EDGAR. UK companies publish a strategic report, and their accounts are on Companies House. Indian listed companies publish annual reports and investor presentations on the NSE and BSE websites. Saudi companies publish on the Saudi Exchange (Tadawul), and Singapore companies on SGX.
- Earnings calls and investor presentations. Listed companies present results every quarter or half year. The slides and transcripts on the investor relations page show which metrics management thinks matter (for example, load factor for an airline or same-store sales for a retailer). The analysts' questions at the end are often the best short list of what worries the industry.
- Industry associations and regulators. They publish free statistics: for example IATA for airlines, the GSMA for mobile operators, and national regulators for approved medicines or licensed banks.
- Government statistics and international bodies. National statistics offices, the World Bank, the OECD and the IMF publish free data on markets, prices and spending.
- Benchmarks. Aswath Damodaran's free datasets at NYU Stern give margins and capital intensity by industry for the US, Europe, Japan, emerging markets and more, updated each January.
- Consulting firms' free articles. Their industry reports also show you how consultants frame the issues.
Worked case
A 10-minute scan: cement
The prompt
Your interview tomorrow is with an office that works on building materials. Run the scan for cement. Then check the core unit economics: a plant in India sells cement at INR 5,000 per tonne (illustrative). Its costs per tonne are power and fuel INR 1,200, freight INR 1,100, raw materials INR 800 and other costs INR 1,100. What is EBITDA per tonne (earnings before interest, tax, depreciation and amortization; here, price minus these cash operating costs), and what is yearly EBITDA for a plant with 5 million tonnes of capacity running at 70 percent utilization?
The structure
- Cement: the scan on one page
- CustomersHome builders (often buying through dealers), construction firms, infrastructure projects, ready-mix concrete makers
- Value chainLimestone quarry, kiln makes clinker, grinding into cement, bagging, dealers or direct delivery, customer
- Revenue modelTonnes sold x price per tonne (often called realization)
- CostsPower and fuel, freight (cement is heavy and cheap, so it rarely travels far), raw materials
- Key metricsCapacity utilization, EBITDA per tonne, freight cost per tonne, carbon emissions per tonne
- Players (unranked examples)UltraTech Cement (India), Holcim (Switzerland), Heidelberg Materials (Germany), CEMEX (Mexico), Dangote Cement (Nigeria)
- TrendsCutting carbon emissions from kilns, consolidation through acquisitions, demand tied to housing and infrastructure spending
- Key: Typical casesShould we build a new plant here? Why did margins fall? Should we buy a regional rival?
Working it through
1. Cost per tonne
Add the four cost lines.
Cost per tonne (INR):1,200 + 1,100 + 800 + 1,100 = 4,2002. EBITDA per tonne
Price minus cost.
EBITDA per tonne (INR):5,000 - 4,200 = 8003. Tonnes sold
5 million tonnes of capacity at 70 percent.
Tonnes sold (millions):5 × 0.7 = 3.54. Yearly EBITDA
3.5 million tonnes at INR 800 each.
Yearly EBITDA (INR millions):5 × 0.7 × 800 = 2,8005. In crore
1 crore is 10 million.
Yearly EBITDA (INR crore):5 × 0.7 × 800 ÷ 10 = 280
The recommendation
EBITDA is INR 800 per tonne, about INR 2,800 million (INR 280 crore) a year at 70 percent utilization. With this scan you can already say where a cement case will go: utilization (because plant costs are fixed), power and fuel prices, and the freight distance to customers. Because cement is heavy and low in value, markets are regional: a plant competes mostly with plants within a few hundred kilometres.
"Before I structure, let me check that I understand how this industry makes money. A cement maker earns tonnes times price, its biggest costs are energy and freight, and because freight is expensive, competition is regional. Is that right for this client?" This takes 20 seconds and shows the interviewer you think like a business person.
An airline's annual report shows revenue of USD 12 billion and a fleet of 240 aircraft. What is its revenue per aircraft, in USD millions?
A company's revenue grew from INR 800 crore to INR 1,000 crore in one year. What was its growth rate, in percent?
You want to know how much of a company's profit comes from each region. Which part of the annual report do you read first?
Which free source usually shows the metrics that management thinks matter most?
You want to name the top three players in a market during a case. What should you do?
Why do cement markets tend to be regional?
Sources for this lesson (12)
- Recognized public explanations of case-interview concepts and frameworks
- US SEC EDGAR full-text search for company filings (10-K, 10-Q)
- UK Companies House: find and update company information
- National Stock Exchange of India: company filings and annual reports
- Saudi Exchange (Tadawul): issuer financial reports
- Singapore Exchange (SGX): company announcements
- Aswath Damodaran, NYU Stern: data page with US, Europe, Japan, emerging markets and global industry datasets
- UltraTech Cement (India)
- Holcim (Switzerland)
- Heidelberg Materials (Germany)
- CEMEX (Mexico)
- Dangote Cement (Nigeria)
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