CORNERSTONE RESEARCH

Economic and Financial Consulting and Expert Testimony

CORNERSTONE RESEARCH CASE COMPETITION

SCHEDULE
Monday, November 2
12:00 pm

Registration Opens

Monday, November 9
12:00 pm

Case Prompt and Materials Are Released

Monday, November 16
9:00 am

Round 1 Deadline: Executive Summaries Are Due

Tuesday, November 17
12:00 pm

Finalists Announced

Friday, November 20
5:00 pm

Round 2 Deadline: PowerPoint Presentations Are Due

Friday, November 20
5:30 pm 6:30 pm

Cornerstone Research Information Session at the Statler Hotel

Saturday, November 21
9:00 am 1:00 pm
The Statler Hotel

Breakfast with Finalists

Finalist Presentations
Winners Announced
Winning Team Lunch with Cornerstone Researchs Recruiting Team

PRIZES
First Place:
$500 and lunch with Cornerstone Researchs Recruiting Team Leadership (all competitors eligible)
Second Place: $300
Third Place: $100

ASSIGNMENT
Cornerstone Research has been hired by Wellness Solutions, a pharmaceutical company, to analyze the competitive effects of a proposed merger with one of its competitors, Holistic Health. Cornerstone Research has been
asked to provide an opinion as to whether the Federal Trade Commission (FTC) should allow the two companies to merge. Please assess the issue and prepare an executive summary detailing your findings and recommendations. Your summary should be no longer than three pages, including supporting exhibits, tables, and charts,
and it should be designed as if you were presenting to a group of individuals without an extensive background in
economics or statistics, and with minimal background knowledge about the case at hand.

CASE BACKGROUND:
PROPOSED MERGER OF WELLNESS SOLUTIONS AND HOLISTIC HEALTH
Wellness Solutions (WS) and Holistic Health, LLC (HH) are two major players in the healthcare market. Both
companies are privately held and sell medical diagnostic tools to customers across the United States. In March
2015, WS proposed a merger with HH that would combine their operations, workforce, and client services.
The healthcare diagnostics market involves researching and developing products such as bloodwork kits and
infectious disease testing kits, and selling these products to hospitals and other healthcare professionals. WS
and HH both sell a full line of products; however, a majority of their revenue is derived from sales of blood glucose meters. Blood glucose meters are medical devices which allow people to determine the concentration of
glucose present in blood, and are used regularly by patients with diabetes mellitus or hypoglycemia. The global
blood glucose meter market is approximately $8.8 billion; the U.S. comprises approximately 40% of this market.
Both WS and HH serve clients across the United States. WS is based in Atlanta and HH is based in Palo Alto.
Both have offices in Washington D.C., Boston, San Francisco, and New York. In both firms, sales representatives
visit customers in order to educate them about the products. Sales representatives are given some autonomy
over pricing and discounts, so customers are able to negotiate. Customers include healthcare providers and
retailers (such as pharmacies and superstores). Both firms are actively seeking new customers and expanding
their businesses.
Besides WS and HH, there are eight other national players in the U.S. blood glucose meter market, and several
smaller firms that only distribute to a limited region.

INCLUDED MATERIALS
1. Competitors in the U.S. Blood Glucose Meter Market
2. WS Blood Glucose Meter Sales Data
3. WS Customer Key
4. HH Blood Glucose Meter Sales Data
5. HH Customer Key
6. DOJ and FTC Horizontal Merger Guidelines
7. Executive Summary Rubric

SUGGESTED CONSIDERATIONS
The executive summary your team prepares should include the following sections:

Guiding assumptions
Methodology used in quantitative analysis
Discussion of results
Caveats and limitations to analysis
Final recommendations and next steps

The following questions are provided to help guide your analysis. You are not required (nor are you expected) to
provide answers to all of these. It may be more effective to provide a thorough analysis of one or two of these
questions than to endeavor to answer all of them briefly.
1. How would you characterize the competitive landscape of the industry? How might this merger be anticompetitive? How might it be pro-competitive?
2. What is the relevant market in this industry (e.g., national, local, etc.)?
3. What factors affect revenues and profits? Can you determine their relative importance?
4. How will the merger affect market concentration? (Refer to the document on market concentration from the
FTC for details on calculating HHI, a measure of market concentration.)

5. How might this merger affect different types of customers?

6. Are some areas or regions more likely to see an effect than others? What are some possible solutions?
7. Is it possible to estimate how the combined companys prices might change after the merger (e.g., using HHI
before and after)? If so, how will prices change? How will profit margins change?
[Margin = (Price Cost) / Price]
8. What additional information, if any, would be helpful in answering the above questions? How would you go
about finding this information?
You may not access or include data other than what is provided in the additional materials. You may, however,
research relevant topics using public sources in support of your analyses. Please include citations to these
sources if used.

ABOUT CORNERSTONE RESEARCH

Cornerstone Research is a consulting firm specializing in the analysis of complex finance, economics, accounting,
and marketing issues.
Our consultants apply innovative, cutting-edge problem solving approaches to address high-profile issues with
unparalleled analytical depth. Client companieswhich span a broad range of industriesoften have a large
percentage of their enterprise value at stake when they seek our services. Our cases are often front page news,
and working on such projects offers analysts a unique perspective into the most pertinent economic and financial topics of the day.
Our diverse experience enables analysts to gain valuable analytical skills and extensive knowledge of a wide variety of industries. For example, in securities projects we may analyze stock prices or the valuation of derivatives
and debt instruments. In antitrust and intellectual property cases, we may assess industry structure, the nature
of purchase decisions, and the commercial value of innovation and technology.
Cornerstone Research analysts take leadership roles both on consulting teams and on crucial firm-development
projects. In addition to the firms focus on providing professional development opportunities for analysts, our
culture retains many of the positive aspects of our start-up roots: a relatively flat team structure, open-door
environment, and a collegial atmosphere to name a few.

REGISTER BY NOVEMBER 9
Please submit all competition materials to consultingclub@cornell.edu

QUESTIONS?
Contact: cgangi@cornerstone.com