Hell Week is a time when students are frantically interviewing with numerous companies for jobs. For many of my RC classmates and me, Hell week was more like Heck Week because our resumes were simply used as fuel to heat the homes of recruiters. However, I will admit that I did receive a few interview invites (0.000003% yield). Unfortunately, I’m still jobless, like many of my friends, despite cracking the following case.
Interviewer: You are a consultant. Our client, an MBA student, is a job applicant. Please analyze our client’s position in the job market and advise our client what steps to take next.
Me: Sure, no problem. Let’s look at barriers to entry, rivalry, substitutes, suppliers and customers. (Of course, I’m applying Porter’s five forces, but it’s a no-no to mention the framework by name.)
Barriers to Entry
There aren’t any. Anyone can make 12 versions of their resume and use the same cover letter (with company name changed, of course) for every application. In contrast, there is a high barrier to exit: an applicant’s BATNA to searching for a job is making no money and gaining no experience.
The rivalry in this market is fierce. Each of the players is of similar strength and is willing to put in maximum effort to get an offer. In addition to the typical begging and butt-kissing, applicants actually go to numerous company presentations, act interested in jobs they would rather not have, and send thank you letters.
There are a lot of substitutes with little differentiation. Is there much difference between the students at the top 5 business schools? In any case, let’s size the market. The MBA student segment size is about 1875 applicants per job opening (top 5 business schools x average class size of 500 x 75% of students applying to the same position). Wow.
There are a lot of suppliers. In fact, it’s not uncommon for an applicant and all her classmates to receive interview requests. However, they’ll find out during the interview that they are all interviewing for the one position at the office located in Antarctica. Clearly, the demand far outweighs the supply and hence the suppliers have a lot of power.
There are a lot of customers. In fact, there seems to be a conflict of interest because the supplier (of a job) to the job applicant is also the job applicant’s customer (gets the labor of the applicant)! Clearly, customers have a lot of power.
In conclusion, this industry is a 5 star “turkey”. The job market is a low margin industry for our client. In fact, there may not even be any profits left, as some players may be selling their services for less than their marginal costs by offering to work for free!
Interviewer: Excellent analysis! What’s your recommendation to our client?
Me: This market sucks. Our client is already in the industry, but because the exit barriers are high, our client will continue to get screwed.
Interviewer: Uh, would you say that to our client’s face?
Me: Sorry, of course I would not! I would say: We’re very impressed by your background! Unfortunately, there were many qualified applicants this year so we cannot offer you…
Interviewer: Great — you’ve cracked the case! I think you understand the next step in your interview process.