Hi everyone,
When it comes to brainstorming ideas for increasing market share, I can think of: decreasing price to increase sales volume, adding new distribution channels, increasing production, acquiring new competitors, marketing campaigns, targeting new customer segment, etc.
However, I'm having a hard time finding a MECE way to structure these ideas.
I'm curious to hear what you think are the best ways to come up with MECE ways to grow market share.
Thanks in advance for sharing your ideas!
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:
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!
Here´s an example of a MECE structure with the objective of growing revenues:
MECE is quite simple concept - think of it as of 5 fingers on a hand - you need to check them all. The same story is with market share question.
Basically, you may have the next structure:
* Sell the same amount, but Improve pricing or stimulate sales with decreased prices
* Spur sales (by hiring new salesmen, expand geo/segment/channel coverage)
* Launch new products
* Come to another customers
* Increase value proposition of your product (e.g. sell together pipes + transportation services)
I believe you can think of another 5-10 examples, but they will be less common. However if your answer covers abovementioned points - you're a strong candidate for sure.
How about these? Warm regards, Frederic
Market Penetration:
Product/Service Strategy:
Distribution Optimization:
Strategic Partnerships and Growth:
Operational Excellence:
One way to come up with a MECE structure is to go back to the formula of whatever you are trying to structure.
Market share is basically the revenue generated by your clients divided by the total revenue in the market (i.e., market value).
Let's assume that you cannot touch the market value since it's not something you can directly control.
So the way you can influence the market share of the client is only through its own revenue.
Then, practically you can increase that revenue / value of the client's company either organically (growing through internal initiatives) or inorganically (acquisitions which would entail immediately increasing the market share of the client's organisation).
And that's how we've now arrived at a MECE structure - organic / inorganic.
Needless to say, there would be many other ways of looking at it, not only this one.
Best,
Cristian
There are some really good answers below, however for completeness, I would like to add the inorganic growth options:
Hope it helps!
This thread has some great tips. In the interview I would add two clarifications:
Dear A,
in general a good structure can be evaluated by a certain depth and breadth. The “depth” should be at least 3-4 levels while the “breadth” should cover the entire solution space. You can cross-check this with the MECE principles (For details see respective article on Preplounge), but the CE (collectively exhaustive) part is basically defining your breadth.
Finally, make sure to check for inter-linkages in your structure and point them out.
Simon
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