Market leader case McKinsey

1. Don't think about “factors to consider”. 

What you have is a very generic structure (you are boiling the ocean), and most of the information you are asking for is actually useless (sorry for being  blunt). If there's no actionable way to use the information, it shouldn't be in your structure. 

For example, on revenue: What will you do with “average price”?  What will you do with number of bulbs sold? 

Then why are you only comparing with #1? This assumes a strategy aimed specifically at “stealing” market share from them. Why aren't you considering the option of getting market share from other players?

Howcome you look at customers and don't even consider performing segmentation?

But most importantly, this doesn't show how you will solve the problem. It shows you know some of the areas that will be relevant to solve it, but not how to solve it.


2. Think about a structure to solve the problem.

This is actually a quantitative problem (getting a certain market share). First solve the quantitative problem, then address it qualitatively.

First you need to know how far you are from #1 (#1 Market Share - #2 Market Share). Then you consider options to bridge the gap. This can be about:

1) gaining market share on current offering / market presence 2) widening your offer to new customer segments and markets:

To answer this you need to perform a market breakdown in terms of customer segments, product categories, and countries, and then your market share according to those. You should go for those where you underperform or its easier to bridge the gap.

Once you know where to deep dive, you have to consider whether you want to do it 

a) Organically (explore this first)
b) M&A (explore this later)

To grow organically in option 1, you have to look at customer segments, their Key purchase criteria (KPC), and then how you perform vs. competitors on those KPC; same thing on channels (i.e. also look at KPC and how you compere) and finally decide which 4P's (Product, Price, Place, Promotion) to use to improve your value proposition.

To grow organically in option 2, you need to explore specific market entry on specific countries or new product development, for example. No need to do a deep dive here at this point, but a detailed analysis would need to be done.

Regarding M&A, one should look at available targets, and what would be the implication of acquiring them (e.g. additional market share + potencial synergies from cross selling - cannibalization).

This is not necessarily a complete structure - but in every point I am bringing up I believe it is clear why the information is being requested and what would be the required action).

1) Drivers of revenue (ask for revenue of the #1 market leader)

Price: increase price (dependent on price sensitivity) or decrease price to take part in predatory pricing 

Volume: Organic growth: introduce new products whilst offering some differentiation (launch new products), sell in other geographies (market entry), improve current products

Inorganic growth: acquire a player in the market to increase market share, partnership? joint ventures? 

2) Competitive landscape (especially that of the #1 in the market) 

Market share of competitors, any differentiation or competitive advantage? how will they react? is the market fragmented or concentrated?

3) Customer needs and preferences 

Has purchasing behavior changed? Are there are other alternatives that people are purchasing instead? Have our customer segments changed? Has our product mix changed or does it need to change to adapt to new preferences? Do they have an online presence? Customers willingness to pay?

4) Capabilities 

Operational: required capital to increase production, ability to increase their revenues to a level above #1 

Hi there,

I'm sorry but you're not MECE at all!

Your first bucket Revenue implies that revenue has nothing to do with buckets 2, 3, and 4! Ultimately, everything you're doing is to increase revenue so this is a pretty silly bucket to have.

Careful with the overlap in your buckets. When you're saying Product as often as you are, maybe it's more worthwhile to have a Product bucket! (i.e. look at our customers to determine what they want in a product, assess how well our competitors perform there and where they don't, then look to see what we can do to attack that). Now that's a good bucket!

Personally, I would 1) Look to grow revenues in our existing product base and 2) Look to launch new products in areas where we see opportunity (could be organic or inorganic)

That's perfectly MECE…

You need some frameworking mindset shifts! Feel free to reach out for help.

Hi there, 

On a quick look, I would for sure also look at the market as a whole, or you could potentially merge this together with ‘Customers’. In market it would be essential to understand what are some of the main trends, segments and growth rates. This would help you then contextualise the recommendation to the client within the overall market situation. 

You made a common mistake I see in many candidates and that will get you rejected at MBB. Your structure is not MECE.

Items 2 to 4 in your list cover topics related to your products. 
So go for products you already sell to current customers, you may sell to new customers, new products on your current customers and to attract new customers. Then add complementary services to add to products you sell. 

There could be even more, but I suggest that you should start from here.