How to answer this Analytical interview question about Cost Reduction for Senior-Level Strategy Consultant?

What steps would you take to design a cost reduction strategy for a client operating in a declining industry?

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Strategy Consultant

Analytical

Asked at

Bain & Company

Difficulty :

Hard

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Explanation

This question evaluates your ability to create cost reduction strategies under challenging conditions. Recruiters assess your analytical skills, industry knowledge, and ability to balance short-term savings with long-term sustainability. Common pitfalls include proposing generic solutions or not addressing the unique challenges of a declining industry. A strong answer demonstrates a structured approach, including cost analysis, process optimization, and strategic trade-offs. Preparation involves studying cost reduction frameworks and case studies.

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Answer Example

I would start by conducting a detailed cost analysis to identify inefficiencies and prioritize high-impact areas. Next, I would recommend process optimizations, such as automating manual tasks or renegotiating supplier contracts. For example, I helped a manufacturing client reduce costs by 15% within a year by streamlining production processes and consolidating supplier agreements.

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