MECE ways to grow market share

growth Market share MECE
Neue Antwort am 10. Nov. 2023
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Anonym A fragte am 23. Juni 2016

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!

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Anonym antwortete am 24. Juni 2016

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!

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Alice am 14. Juni 2017

super helpful! Thanks for sharing!

Mario am 26. Juli 2017

Hi Dolf, would use the structure layed out under 3) as the whole case strucutre for the case or just for the recommendated strategies?

(editiert)

Jake am 30. Aug. 2017

Guess Candidate 1 can answer 'should we?'. Candidate 3 can answer 'How?'

(editiert)

Will antwortete am 3. Juli 2016

Here´s an example of a MECE structure with the objective of growing revenues:

  • Grow EXISTING revenue streams
    • INCREASE PRICE
      • Increase price (premium luxury value)
      • Change Pricing Matrix
      • Decrease Price (get higher volume)
    • INCREASE VOLUME (SELL MORE PRODUCTS) OR CHANGE VOLUME MIX
      • Increase Avg Customer Value: Loyaltiy, discount offers, sell more products at higher volume
      • Acquire New Customers of Same Segments: Focus on marketing campaigns
      • Change Mix of Volumes Sold: Promote products that are higher-margin, buy high-end car vs. low-end car, incentivize sales team to focus on higher-margin products
  • Grow NEW revenue streams
    • Expand into New products in-house
      • At home hair care line
      • Conditioner to hydrate hair
      • New Shampoo line
    • Generate new revenue streams from existing products
      • Develop new (or Better Utilize Current) Distribution Channels : internet commerce or direct marketing, new geographic markets,
      • Expand into NEW Customer Segments: expand into new customer segments of same products (men and kids, old people, pets hair dye, new geographic areas)
    • Acquire another business to expand geographic footprint
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Dennis am 29. Jan. 2019

As an interviewer I would definitely challenge you on having "Decrease Price" as a sub-branch of "Increase Price". Would maybe split the NEW rev. streams into "new types of Customers", "new types of Products" and "new types of markets"

Adi am 16. Feb. 2019

How are price and volume ME? they are quite dependent on each other

Oleksandr (Alex)
Experte
antwortete am 24. Juni 2016
Very experienced ex-McKinsey consultant with cross-country expertise

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.

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Frederic
Experte
Content Creator
antwortete am 10. Nov. 2023
ex Jr. Partner McKinsey |Senior Interviewer| Real Feedback & Free Homework between sessions|Harvard Coach|10+ Experience

How about these? Warm regards, Frederic

Market Penetration:

  • Price Reduction
  • Promotional Campaigns
  • Customer Loyalty Programs

Product/Service Strategy:

  • Diversification
  • Innovation
  • Market Development

Distribution Optimization:

  • New Distribution Channels
  • Retail Partnerships
  • E-commerce Strategies

Strategic Partnerships and Growth:

  • Competitor Acquisition
  • Strategic Alliances
  • Merger Strategies

Operational Excellence:

  • Increased Production
  • Operational Efficiency
  • Supply Chain Optimization
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Ben
Experte
Content Creator
antwortete am 10. Sept. 2018
Ex-McKinsey EM | Experienced interview coach (1,000+ sessions) | Discount on 1st session | LBS MBA

There are some really good answers below, however for completeness, I would like to add the inorganic growth options:

  1. Horizontal M&A: the most obvious option to grow market share and enjoy scale benefits is to acquire one or more competitors
  2. Vertical M&A: acquire a player up or down the value chain to create a competitive advantage, potentially making it harder for other competitors to grow / maintain their market share (within the allowed by the competition laws of course). For example, manufacturer that acquires a retail network and can now prioritise sale of its products vs competition
  3. Joint Venture: form a partnership with either a competitor or a supplier / customer to again create a competitive advantage. For example, large banks forming a consortium to share customer data to avoid fraud, making it harder for challenger banks to compete

Hope it helps!

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Anonym antwortete am 24. Dez. 2022

This thread has some great tips. In the interview I would add two clarifications:

  • Is it volume or value share? This is key if one option is to look at pricing and promotions.
  • What is the market definition? This is key when thinking about potential JVs and M&A
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Simon
Experte
Content Creator
antwortete am 31. Aug. 2022
50+ successful coachings / Ex-Mckinsey JEM & Interviewer / Industry + Engineering background

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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Anonym B antwortete am 15. Aug. 2018

I had a lot of trouble with the MECE concept for a while, but I found one article that helped a lot because it shows 5 ways to be MECE. I think it's highly relevant to your question because it even gives examples on how Nespresso can increase its market share in the London market.

The website seems to be new, not fully finished yet, but the content is outstanding... Here's the link:

https://www.craftingcases.com/the-5-ways-to-be-mece-part-2/

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