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Anonymous A

on May 16, 2018

Global

How hypothesis-driven should you be?

Hello,

how hypothesis-driven does the McK-Case need to be?
Since many questions involve brainstorming, diagrams or calculations, I am wondering how important it is to use a stringent hypothesis-driven approach.

Besides, how would you approach a product-launch or pricing-Case with a hypothesis? In these two cases, I think the how is more important than whether something is true or not.

Are hypothesises most important for finding problems, e.g. in declining profit-Cases?

Thanks!

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Top answer

Vlad

Coach

on May 16, 2018

McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

First of all - it's not mandatorily required. I would say - use the hypothesis if you are really good at solving the cases. If not - use the basic approach

There are two ways to use the hypothesis:

First - presenting a structure using the hypothesis. For example, if you are having a PE (private equity) case, you should do the following:

1) Make classic structure (market, company, competitors, feasibility of exit)

2) Make subpoints (e.g. in market: size, growth rates, profitability, segmentation, etc)

3) Present your 1st level Hypothesis:

- "In order to understand whether we should invest in Company A, I would like to check that the Market is Attractive, the Company is Attractive, the competition is favorable and we have good opportunities for of exit"

4) Present the main 2nd level Hypothesis:

"In the market, I would like to make sure that the market is big enough and growing;
In the company I would like to find additional opportunities for growth;
In competition I would like to check that the market is fragmented enough;
Finally, I would like to check if we have potential buyers and can achieve desired exit multiples"

Another way to use hypothesis is using the hypothesis to prioritize your analysis:

1) Make a structure: "Problem in sales may be related to Sales Motivation, Sales Strategy, Sales Coverage, and Sales Process:

2) Prioritize a part of the structure based on your knowledge / common sense / available data: "Taking into account that motivation is the core problem of the sales organization, I would like to prioritize this part of the analysis"

Good luck!