Wohin mit den Schränken?

Two frameworks here: 4 Ps (= price, place, product, promotion), or the Ansoff Matrix (grow with existing or new products in existing or new markets). Both are quite MECE.

Word of caution however -- your interviewers have done the cases tens or hundreds of times, and when the next interviewee comes and shouts out a standard framework, they tend to get super annoyed (me included). Think about it as a real-life consulting project situation: If a CEO pays $XM on a project, and the consultant comes and presents the 4Ps, it's bad. Two ways to solve it:

• Reword it in your head and adapt terminology to the case. Examples: Don't use "product" as term for a services company. Split "place" into distribution channel and regional expansion. Maybe add customer segments if applicable.
• Rank according to priorities. "price" is rarely a lever for growth/expansion, but can be important for market share gains; probably better in both cases is a low-spec version of the product. Mention the most important topics first and quickly state why they seem most important, and name the last ones just to be MECE.

To give you a "real" case example -- let the case be a high-quality Chocolate Manufacturer from Italy who wants to gain market share in Europe.

1. Worst answer, "the researcher":

"I would analyze the market, the competition, and the customer segments in order to understand the positioning first, and then see how we gain market share".

--> This is called "boiling the ocean", asking tons of questions with no clear sense of where you want to go. You won't believe how often I saw when doing interviews at BCG and still see it on preplounge interviews, this is super, super dangerous and risks you failing the interview, even if you guess it "right" in the end.

2. Good, but bad answer, "the MBA"

"I would look at Price, Place, Product, Promotion. We can lower the price to gain share. We can sell at more places. We can change the product to better serve customer needs. We can invest in promotion and run more ads to gain share".

--> Why is this bad? Because it's 100% generic. Re-read it - it fits to ANY growth case, for literally ANY industry. And doesn't help the client at all, she can get the same level of insight by reading a textbook on business 101.

3. Good answer, "the interesting candidate"

"In order to grow market share for the Italian chocolate manufacturer, we have a few options. First, we can regionally expand our footprint into more markets. I would want to see in which markets the client is already strong to get an understanding of where we can continue to grow. Second, I would look at distribution channels and how the client is currently selling it's chocolate, e.g., via own shops, specialized sweets/chocolate shops, or via retail. As availability at the point of sale is highly important for consumers to buy chocolates, increasing the distribution footprint may offer potential to gain share. Third, I would look at the range of chocolates the clients offer, maybe there is an opportunity to further differentiate into other specialty or luxury chocolates, or offer a basic, more mass market chocolate. Fourth, let me look into customer brand awareness and whether a marketing push can increase market share. Fifth, looking at customer segments, there may be an opportunity to go into fully different segments like B2B for events or giveaways. Finally, I would review the pricing structure of the current product offer and see if there are opportunities to position the client more competitively to gain share. I would start by looking into 1, the regional footprint ..."

--> This is 200 words, or 2 minutes talk time, plus maybe 2 minutes thinking time for the structure. And, generally the content is the same as answer 2 (4P, with place split into regional footprint and distribution, and customer segments added, and reworded!). But it FEELS completely different and unique to the case, shows prioritization skills and a bit of business judgment already.

Think about it this way: As a project leader in real life, if I leave candidate 3 in a room alone for a day, I would have a really nice presentation with first hypotheses on how to grow market share with a few specific analyses already pointing into the correct direction. If I leave candidate 1 in a room for a day, I would find somebody who managed to download 50 industry reports on the chocolate industry.

Is answer 3 perfect? Of course not, I came up with it in 10 minutes. Maybe the customer segments/B2B branch is not necessary. Or the ranking is wrong, maybe price is more important. That's not the point however -- once you're at this level of discussion, you pass the interview :)

Hope this helps -- good luck with your preparation!

As you describe it, this is the longest version of this case format; normally too long for an oral interview, so it's super important to listen whether the question is about if (the client should enter the market) or how (to enter).

Let me answer your direct question 2) first, the how. This is the general "market entry strategy" case. For this strategy, you need the following:

1. Product strategy -- what are you going to sell? Your existing product as is, a high-spec or low spec version of it, or something else? (Hint: It needs to be at least adjacent, either new product for same customers or same product for new customers, otherwise it makes no sense; steel mills are rarely becoming tech cos. Compare the Ansoff-Matrix)
2. Geographical region -- where are you going to sell? Needs to be defined, often already part of the case question itself
3. Distribution strategy -- how are you going to sell or who is selling your product? Which channel? Own shops, specialty shops, big box retail, online, partnerships, etc. Depends on the product/service, for services or B2B it's Sales (inside sales, field sales, sales partners) instead of channel.
4. Promotion strategy -- how will customers know about your product? Often forgotten even by consultants :), but highly important. Marketing.
5. Pricing strategy -- what will you charge? In essence, you figure out steps 1-4, and then figure out max price point "allowed by" competition given quality of the client's offering.

Few comments:

• Customer (segment) strategy is missing. I tend not to include it, as to me it's above the framework, you need to figure it out before doing all 5 steps. Take into consideration if necessary.
• Competition - to me it's not a separate step as it's nothing you do or decide. I would bring it up as part of pricing. As consultants, you advise the client, and case result is rarely "competition is too strong, let's pack our bags and go home". One can get into any market with an attractive offer, and in 90% of cases it depends on the client's capabilities more than competition. Should be evaluated when testing market attractiveness.
• Some of these steps may be a given, i.e., part of the case question (e.g., "client wants to expand to the UK", or "Chinese solar company wants to expand to U.S."). Don't question the question, solve for the remaining variables.
• Do not overestimate clients' capabilities, clients are typically multi-billion-$ companies with lots of bureaucracy. Changing all 5 points from above won't work in practice. (New product in new region with new ...)
• The power of the status quo. One trick for you is to ask how the client is selling their current products right now in their home market. Chances are, approach in the new market will be kind of similar - if they sell detergent in supermarkets now, it's highly unlikely that selling online will be the solution in another market.
• If this sounds awfully similar to the 4P - it's because it's EXACTLY the same. Compare my answer here https://www.preplounge.com/de/consulting-fragen/mece-ways-to-grow-market-share-205 (Over time I found there are only 6 major case approaches that kill 95% of all case questions, so would be strange if this would be completely different :)

Basically memorize the 5 steps, and you're good!

Regarding your 1), you're completely correct, but I would prioritize it way more. Key points for me would be:

• (Long term) growth -- trumps everything. Power of compounding interest; even if current market size is small or (current) profitability is low
• Client capabilities - what does the client bring to the table? Should be either product capability (they can do X already so not hard to do Y, or, major R&D invention or something), or customer access (weaker, but still good -> cross-selling). Here I would compare it to the competition, as cababilities only make sense on a relative basis anyways.
• Your other points are all important, but if it's a really fast growing market and the client can play in it, you can directly go to step 2) and figure out the details.

I should shorten this answer, but rather get some sleep instead... Hope it still helps, good luck with your interviews!! :)

Hi!

It depends very much on the industry. In some cases (Growth strategy) I will use a broad structure, in others (e.g. “how to increase the excessive luggage revenues for an Airline”) I will use P, Q and the Process. Here is the broad structure that you can adapt to your industry:

Analyze the market:

• Size and growth rates
• Segments (geographical, customer, product)
• Distributors / Suppliers
• Regulation
• Key market trends

Analyze the competitors:

• Market shares, growth rates, profits
• Product / customer / geographical mix
• Products (Value proposition)
• Unit economics (Value proposition vs. price vs. costs)
• Key capabilities (Distribution, supply, assets, knowledge, etc)

Analyze our company:

• Market share, growth rates, profit
• Product / customer / geographical mix
• Products (Value proposition)
• Unit economics (Value proposition vs. price vs. costs)
• Key capabilities (Distribution, supply, assets, knowledge, etc)

How to increase revenues:

• How to increase the scope: Product / customer scope, geographical scope
• How to improve value proposition (How to fix your weaknesses and improve your strengths; Potential increase in price and volumes)
• How to answer the competitors (Unique or hard to build property and contracts; Customers / suppliers / complements with lock-in; Reputation and relationships; Organizational capabilities; Product features and know-how)
• Other benefits of scale (Spreading Fixed costs, Change in technology, Bragaining power)

Best!

Hi Elisey,

I would personally not recommend to use a single framework for all the so-called business situations (M&A, Entry, New product, Operations etc). Although this would help to more easily remember the framework, it would make more difficult to present a customized structure when the interviewer asks the initial question. Moreover, since every business situations has some peculiar key elements (eg how to enter in a market-entry case, price valuation in M&A, etc), this could lead to completely miss one core bucket.

Based on my experience, it thus make sense to make the extra effort to learn 3-4 different structures for business situations (potentially with some elements in common), and be able to present from the beginning something ad hoc when needed.

Moving to the framework per se, using as an example market entry, this is how I would structure it:

1) Goal clarification. It is always good to start with the end in mind – thus what is the specific reason why you want to enter the market? Is it revenues, profits or specific synergies?

2) Industry. There are two macrovariables here.

• Key industry numbers/facts. This includes for the market and potential subsegments the following
  • Growth
  • Size
  • Barriers to entry
• Key industry players. This includes:
  • Customers segmentation
  • Competition
  • Occasionally for some cases: suppliers and substitutes.

You should present this area connecting with the goal, and not purely listing the elements to analyse as if it was a laundry list. The best way to do so is explain how a certain variable will help you to achieve you goal. Eg, if your goal is to increase revenues, don’t simply say “I want to look at growth, size and barriers”, rather “I want to look at growth and size – this will tell me if the market has the potential to provide enough revenues for our client. I would also like to check the barriers, to understand which are the obstacles in entering such a market and thus increase revenues”.

3) Company - Target objective feasibility. Here you want to check the fit between the client and the selected industries.

• Can our specific client reach its objective in the selected market (eg profits, revenues, market share, etc)?
• Are there positive or negative synergies in such industry?

In the first point, you will probably have to go through a profitability/revenue/cost framework, to calculate the effective result.

4) Best way to enter. Once you know the industry is attractive and you can reach you goal, you should consider the entry options.

• Which are the possible ways to enter the market? Usually you should consider (i) starting from scratch; (ii) M&A; (iii) Joint Venture or licencing
• Which option meets better our capabilities to enter the market? Each specific way to enter will require some different capabilities. If you start from scratch you may need skilled people in all the phases of the value chain; if you buy another company you may need less people, but more upfront capital, etc.

5) Risks and next steps. What are the major elements that we should further analyse based on the previous points (eg regulator decision, unexpected competitor reactions, potential wrong pricing in the new market, etc)?

This would include all important market metrics, presenting barriers to entry into the industry. I would not consider the price or the product in the first or second level for a market entry, but rather as a possible third level once reached step 3, when we have to understand if/how we can meet the client's goal.

Hope this helps,

Francesco

Hi there,

I would start by asking some general questions to have a better feeling on the case:

1) Does our client provides this new service elsewhere? If not, does our client already has the capability to provide it without major investments?

2) How does this particular auction work? (i.e. it is like an "English auction"? / do we have some type of advantage for being an outside bidder? etc)

3) What dictates a good deal in the client's eyes? Does he want to breakeven in a certain timeframe? Does the contract has a timeframe?

Then I would move on to my structure:

I would like to analyze this problem in two steps: first the qualitative side and then the quantitative side. On the qual. side I would look for both external and internal conditions; external being market and competition and the internal being more about our client and the 5G technology we are going to provide.

Basically on the first step, I would like to analyze the size of the potential market, what companies will bid with us and what do they have to offer, I would look for possible barriers to enter and focus on what we can provide as well.

After gathering all the info I would focus on the quantitative side, probably through a breakeven analysis or use some type of target (i.e. client would like to see some return after X years, or the contract is only valid for a certain timeframe and our client would like to breakeven within that time).

--

The analysis I proposed could vary depending on the answers to the 3 first questions. (mostly for the bid)