Fourth-year Commerce student Jerry Pan entered the 10th annual Navigant-McIntire Case Competition with something to prove. Pan’s team had earned second place in last year’s competition and this year, he was determined to win.
Of the five members on his team — which included third-year Commerce students Kevin Chang and Ram Nayak, fourth-year Commerce student Anastasia Prado and fourth-year Engineering student Jenna Zhang — Pan was the only student who previously participated in the competition.
This year’s competition took place March 19 to 20. The Case Competition allows Commerce students to gain valuable experience by solving real problems from Navigant, an international consulting firm. This year’s case was loosely based on an advanced radiosurgery laser system designed to treat various forms of cancer painlessly and without surgery. The challenge posed to the students by Navigant consultant Kevin Stephens was to develop a plan through which this technology’s investors could generate a positive return on their venture. Students had to assess the overall financial attractiveness of installing the system in hospitals.
Because Pan participated in the competition last year, he said he knew what to expect and how to go about solving the challenge.
“I had a general mindset ... to search for information, [then] just let the answer come out of the numbers,” Pan said. “I think it
helped us.”
His previous experience, coupled with the team’s hard work, earned them a first-place victory against 11 other teams.
After receiving the case at about 6 p.m., each team was assigned to a random study room to begin brainstorming ideas. Students were then allowed a 10-minute question-and-answer session with the panel of Navigant consultants to try and gain more information. Pan said, however, the Navigant consultants were “pretty limited in their responses.” The students were then left on their own to draft a solution.
After deliberating and drafting a solution, teams presented the next day.
“We didn’t sleep,” Pan said. “I don’t think many teams did.”
Pan said there were several explanations why the company was unable to make a profit off its high-tech device. From a financial point of view, the company that owned the technology was getting paid by the hospital to use the machines yearly instead of monthly. Thus the firm was unable to collect money fast enough to pay off its interest payments.
“That was how the company was bleeding money,” Pan said.
Technologically, hospitals could only use the machine up to 10 times per day because it had to recharge for the next day. When used for 30 minutes or less, hospitals would generate about $1000. If the procedure lasted between 30 minutes to one hour, the hospital made about $4000, and a procedure that lasted more than one hour earned about $8000.
Each team presented to one of two panels of three judges. After all 12 teams had presented, each panel voted for one finalist to present in front of everyone, including the other student teams. Pan’s team and third-year Commerce student Varoon Jain and his team were selected as the two finalists to participate in the face-off. After winning a coin toss, Jain and his team opted to present first.
Jain and his team proposed four ideas. They suggested investors employ celebrity endorsements, partnerships with other hospitals, high profile pro-bono procedures and re-negotiation contracts. After a brief question-and-answer session with the team, Pan’s team was up.
He opened the presentation with a break-down of the company’s current fiscal gains and losses. His team suggested analyzing data between patient type and procedure type to see if there was a correlation between a certain type of cancer and a procedure duration. If a correlation was found, investors could market the machine to doctors who specialize in the longer procedures so that the machine would receive optimal use each day and would generate its maximum revenue.
The team also proposed marketing the machine toward insurance companies that would pay a higher percentage of treatment costs so that more money would be available to pay the doctors, hospitals and machine’s investors.
Finally, the team suggested that the investors restructure their interest payments and ask the hospitals to pay in monthly interest installments instead of yearly ones, so the company would not accumulate interest on debt.
“It sounds the least technical, but it’s one of the most important things,” Pan said.
Although Pan and his team were fairly confident about their presentation, they were still nervous as they waited for the final results. So, when Pan, Chang, Nayak, Prado and Zhang were announced as the winners of the competition and its $1,000 prize, they were somewhat surprised, Pan said.
“I don’t think anyone really ever expects to win,” Pan said. “I was really happy with our team. Our team worked really well together.”
While the prize money is an incentive for students, Elizabeth Thurston, assistant commerce professor and chair of the Consulting Club at McIntire said the competition’s ultimate goal is “to help students ... [learn] to work smarter.”
Thurston said the competition is valuable practice for aspiring business consultants, as it frequently helps students determine if consulting is a viable future career path. In the real world, however, information is not always as prepared for you and up front as it was for the teams, she said.
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