Structure the case conclusion recipient-friendly by applying the Pyramid Principle

Use the pyramid structure to provide syntheses and recommendations at the end or in-between your case interviews

The Pyramid Principle is a structure to present your synthesis in an effective and convincing manner. Here, you present your results first and then how you got there. This principle is of crucial importance in a consulting context where you need to bring across the most important messages as quickly as possible. Remember that due to time constraints a CEO is primarily interested in the "answer" and not about the process behind the answer.

The Pyramid Principle consists of three parts:

What – Why – How

  • What: Theory, hypothesis, recommendation or conclusion
  • Why: The reasons
  • How: Elaborate on how you want to implement it

The Pyramid Principle to synthesize conclusions and recommendations

Structure of a recommendation in a pyramid format

Try to have 3 explanations for your recommendation supported by data. First, state the recommendation. Second, provide 3 reasons. Third, provide information on how to implement the recommendation.

Example 1

Question: our client wants to increase profits, how should they do it? [Assume you have gone through the case and the analysis is complete]

Conclusion, after analysis in a pyramid format:

What:

Our initial analysis suggests a cost reduction for your supplies

Why:

(1) Benchmarking with competition shows lower purchasing costs in the industry

(2) For the basic products, cheaper and lower quality supplies are sufficient

(3) Market outlook and the current products do not allow higher prices

How (next steps):

  • Benchmarking/sourcing: A detailed analysis of competitors' suppliers and costs should be conducted that would allow to find cheaper suppliers. This information could also allow you to renegotiate with current suppliers. Bulk orders are another option because you have high storage capacity
  • Supplies: The suppliers’ quality has improved over the last years. Low cost suppliers have products with sufficient quality to fulfill our needs. Furthermore, customers do not require or expect the longevity provided by the current products
  • Pricing: The current products are not sufficiently differentiated for higher prices. Also, the current brand positioning hinders premium pricing. Therefore, a cost leadership position would make more sense as supported by the analysis

Example 2

Just as the above example, assume we have completed the analysis [note that the numbers in the example are hypothetical]

Question: Should the Whole Foods Market enter India?

Conclusion, after analysis in a pyramid format:

What:

Yes (notice that it is extremely important to answer the clients’ question which is primarily a YES/NO answer, be direct!)

Our initial analyses show that the Whole foods Market should enter the Indian market, specifically, they should concentrate on the urban areas of India.

Why:

(1) Market for organic/healthy food is growing at a rate of 10 % annually, which is faster than most developing countries of the world

(2) Increasing disposable incomes of the customers aligns well with the premium pricing of the company’s products

(3) The concept of organic food is getting a lot of influence from the western world, leaving more than ~1.5 billion dollars of untapped opportunity in India

How (next steps):

  • Partnership with locals
  • Analysis of governmental regulations
  • Pilot study

You can also mention that the next steps would need further analysis to determine the most attractive option

Key takeaway for the Pyramid Principle

Remember: What – Why – How

2 Comment(s)
March 08, 2015 21:19 -
ritika

Hi Thuy, we have added a couple of additional examples to ensure the non business background candidates also understand the concept. Let us know if you have more questions.

September 08, 2014 20:39 -
thuy

I think that the "Pyramid principle" presented here is very useful in many situations, yes, especially, in structuring a case. I really appreciate that "preplounge" summarized and presented it in a concise way. Personally, I also very much like the example given above. On the other hand, as a person with non-business background, I would feel more "Got it", if there are more examples of how the principle works in more cases. But thanks a lot for outlining the principle here :)