Framework question

Hi there,

Yes—even though each case is different I believe in what you are describing you should still include a Capabilities bucket, even if the company already runs the business model successfully at home. The reason is that entering a new country often requires adapting and redeploying capabilities, not just replicating them. For example:

• Local market knowledge and partnerships – Do they have the ability to navigate regulations, supplier relationships, cultural nuances?
• Talent and leadership mobility – Can they transfer managers or hire locally to maintain standards?
• Supply chain and operations – Even if they know how to run stores, can they replicate logistics, sourcing, and distribution in the new geography?
• Brand and marketing – Does the company have the capability to localize positioning and customer engagement?

The Risks bucket is different—it highlights uncertainties that could derail execution (e.g., geopolitical instability, regulatory changes, unexpected consumer resistance). Capabilities are what the company controls and must bring to the table; risks are external or executional factors that could go wrong.

Happy to help you prep or advice further – feel free to reach out.

Best,
Evelina

Hi there, 

Good question! This comes up often when candidates think about market entry cases. The short answer is that you don’t always need to create a separate “Capabilities” bucket, but you do need to make sure the analysis covers whether the company can successfully execute the expansion. The interviewer is less concerned with which title you choose for the bucket and more with whether you’re thinking holistically about feasibility.

If the company is simply replicating an existing model, many operational capabilities are indeed already proven. However, when moving into a new country, there are usually capability-related gaps that matter: local supply chain setup, regulatory knowledge, brand adaptation, or partnerships. These can be framed either under “Capabilities” or under “Risks,” depending on how you want to structure your framework.

Best of luck!

Hi,

Even if the business model is proven at home, I’d still include a Capabilities bucket but frame it narrow around transferability to the new market. The Risks bucket then captures external uncertainties beyond the company’s control. This way, we ensure we assess both what the company can bring and what could still go wrong.

Happy to further discuss!

Best,
Lukas

Hi,

Thanks for your question.

You do need the capabilities bucket. Even if it is the same business model, the client stills needs to support those same capabilities in the new country they want to enter.

By capabilities here, I mainly mean different commercialization and operational capabilities such as sales force capability, partnerships and relationships, contracts etc. A lot of times (example in Pharma) a company would look to license the asset to another company if they don't have the capabilities to commercialize the asset in a new country. This is especially true for smaller companies but could be true for larger companies as well.

Thus, capabilities should be part of your main framework, not under risk, since that is an important decision driver for market entry.

Feel free to reach out if you have additional questions.

Thanks,

Soh

Hey there :)

You don’t necessarily need a separate “Capabilities” bucket if the business model and core operations remain unchanged. In such a case, you can often fold those points into “Risks” (e.g. lack of local market knowledge, supply chain differences, cultural adaptation). The “Capabilities” bucket is most useful when you’re testing whether the company has the internal know-how or resources to execute at all.

Here, since the retailer already has operational expertise, you could emphasize “Risks” and maybe “Enablers” (e.g. local partnerships, hiring local talent) to cover those gaps. The key is not the exact naming of buckets, but making sure all relevant issues are addressed logically.

best,
Alessa :)

No, you don't need a capabilities bucket, and you shouldn't have a capabilities bucket. For two reasons.

First, "capabilities" is a generic and meaningless word. You can consider specific capabilities, but not "capabilities" in general.

Second, you shouldn't be using buckets. You should be answering key questions. Buckets tend to be generic laundry lists, the consulting interview equivalent of boiling the ocean.

In other words... you may need to assess brand value (e.g. if it is a consumer goods product) or distribution capabilities (can you get the product in the hands of the customer? But capabilities... one needs 100's of capabilities.

Oh, and third: You don't need a Risks bucket. You consider risks in all the relevant decision drivers. But risk in itself is rarely (if ever) a decision driver in itself. By the way, all the factors you mentioned are solved at the operational level. The fact that chinese culture is distinct from the US does not prevent american companies from entering that market... it just impacts HOW they operationalize entering the market. You have difficulties with suppliers? Make an operational plan to mitigate those risks. Impact on Strategic Decision? ZERO. NONE.

Of course, if consumer tastes are different, if foreign brands are perceived differently... sure that matters, and you should consider it, but have to consider that when you are analyzing customer demand and preferences, not within risks. In other words, EVERYTHING you analyze has a potential risk. 

That doesn't mean you shouldn't consider risks. Only that relevant risks are analyzed not as a group, but by themselves. If a product success is dependent on regulation, one needs to assess the risk of regulation changing and jeopardizing the initiative. If product cost advantage depends on an input whose price is volatile and you can't control on the long run, you need to flag that out.

Let me stress this out: you are following bad advice. I am curious about which book you are using or MBA casebook you are following (please reply in the comment section) but that is NOT how you should approach case interviews.

You need an objective driven, "answer first" approach, where you focus on DECISION DRIVERS. Avoid at all costs the generic "boil the ocean" type of buckets.

Hi there, 

It is still good to address the potential issues related to capabilities in a new country. Whether you have a separate bucket named "capabilities" or put this topic under "risks" - both way works - as along as you clearly highlight that you have thought about this and have specific points that you'd like to validate. 

Best,

Emily