expert
Expert with best answer

Francesco

100% Recommendation Rate

2,867 Meetings

5,815 Q&A Upvotes

USD 349 / Coaching

1

Business situation framework

Hello.

I'm trying to develop my own business situation framework, which will be easy to follow and will be broad enough for really tough cases.

I used to apply standard one (Customers, Competition, Company, Product), but sometimes I realize that this framework is really tight and there are situations when I'm trying to "insert" the case in this frame. What I don't like about it:

1) Where can we put really important market metrics (e.g. market size, growth, profits for entry strategy)? If it's a geographical expansion, where can we put comparisson of different locations?

Thus, I see it's logical to add a different block, which is Market(s) metrics, where I can ask straightforwardly what are the revenues (or interviewer can ask me to calculate market sizing), growh, profits, etc.

2) Where can we put barriers to entry? Usually it's not only related to competition, so it also can be a separate block (e.g. legislation, capital requirement, cultural gap etc.)

3) I understand why we separate product and company, and usually I put price to the "product" part. Is it better to uncover pricing part in the "company block"?

For now, what do you think about following structure for business situation (of course it is still situational):

External factors:

- Market(s) metrics (size, growth, profits)

- Customers (segments, preferences, price sensitivity)

- Competition (fragmentation, best practise, core capabilities, possible M&A?)

Internal Factors:

- Company (revenue, profit, growth, costs structure, resources, management, marketing, core capabilities, distribution channels)

- Product (product lines, pricing, how does it match consumer preferences, USP's etc.)

Hello.

I'm trying to develop my own business situation framework, which will be easy to follow and will be broad enough for really tough cases.

I used to apply standard one (Customers, Competition, Company, Product), but sometimes I realize that this framework is really tight and there are situations when I'm trying to "insert" the case in this frame. What I don't like about it:

1) Where can we put really important market metrics (e.g. market size, growth, profits for entry strategy)? If it's a geographical expansion, where can we put comparisson of different locations?

Thus, I see it's logical to add a different block, which is Market(s) metrics, where I can ask straightforwardly what are the revenues (or interviewer can ask me to calculate market sizing), growh, profits, etc.

2) Where can we put barriers to entry? Usually it's not only related to competition, so it also can be a separate block (e.g. legislation, capital requirement, cultural gap etc.)

3) I understand why we separate product and company, and usually I put price to the "product" part. Is it better to uncover pricing part in the "company block"?

For now, what do you think about following structure for business situation (of course it is still situational):

External factors:

- Market(s) metrics (size, growth, profits)

- Customers (segments, preferences, price sensitivity)

- Competition (fragmentation, best practise, core capabilities, possible M&A?)

Internal Factors:

- Company (revenue, profit, growth, costs structure, resources, management, marketing, core capabilities, distribution channels)

- Product (product lines, pricing, how does it match consumer preferences, USP's etc.)

1 answer

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Francesco

100% Recommendation Rate

2,867 Meetings

5,815 Q&A Upvotes

USD 349 / Coaching

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 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

(edited)

Related BootCamp article(s)

Growth Strategy

Growth questions are among the most common questions in consulting case interviews: gather the necessary Information about volume and price to find the best growth lever

4C Framework

Get an overview over a company’s customers, competition, cost and capabilities by conducting a 4 C analysis in your case interviews

Competitive Response

In a competitive response case study, your job is either to analyze what your client should do in response to a move performed by a major competitor or to anticipate what competitors will do in response to a move performed by the client

Case Studies

The case study is the most important element of the case interview, which you'll have to nail in order to get into strategic consulting. Here you can learn the specific skills and concepts necessary to solve them.

Focusing on The Core: Mock Interviews

It is to practice as many cases as possible - both as interviewee and as interviewee. Here are a couple of guidelines to help you get started

Related case(s)

Bain case: Asian lubricants producer

Solved 126.3k times
Bain case: Asian lubricants producer LubricantsCo, a very successful Asian premium producer of lubricants in their native region, would like to further increase their revenue and profit. The product range ranges from lubricants in the automotive sector (e.g. motor and gear oil) to industrial applications (e.g. fats, heavy-duty oils). According to preliminary examinations, further growth potentials in the Asian core market are rather limited. Thus LubricantsCo would like to investigate options to internationalize in the passenger car business – also outside the premium segment which is given priority. Therefore your consulting firm was instructed to elaborate a market entry strategy for the European market.  
4.6 5 28265
| Rating: (4.6 / 5.0)

LubricantsCo, a very successful Asian premium producer of lubricants in their native region, would like to further increase their revenue and profit. The product range ranges from lubricants in the automotive sector (e.g. motor and gear oil) to industrial applications (e.g. fats, heavy-duty oils). ... Open whole case

Oliver Wyman case: Full Electrons Ahead

Solved 79.9k times
Oliver Wyman case: Full Electrons Ahead Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise them on how to adjust the product offering.
4.6 5 5654
| Rating: (4.6 / 5.0)

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case

Roland Berger case: Light on!

Solved 65.1k times
Roland Berger case: Light on! LumCO, a company producing injection-molded components for lighting applications, has operated successfully in its native European market. The company wants to open up one production facility each in China and the United States and establish their own distribution network in both countries to serve as a hub for the entire region. The products LumCO manufactures can be categorized into Specialties, which are designed and produced by LumCO according to customer specifications (e.g. head lamp casing and lenses in vehicles, luminaires for design lighting applications) and Standards, which encompasses an assortment of components for multiple lighting applications for different industries (fixtures, lenses, luminaires). Based on the only slight but stable growth outlook in Europe, LumCO is eager to establish the production sites in China and the U.S. as soon as possible and also to begin to distribute their products directly. As a consultant, you are asked by the board of management to assess this plan considering your knowledge of each region and the lighting market in particular.
4.6 5 14204
| Rating: (4.6 / 5.0)

LumCO, a company producing injection-molded components for lighting applications, has operated successfully in its native European market. The company wants to open up one production facility each in China and the United States and establish their own distribution network in both countries to serve ... Open whole case

Deloitte Consulting case: Footloose

Solved 63.5k times
Deloitte Consulting case: Footloose Duraflex is a German footwear company with annual men’s footwear sales of approximately €1 b. They have always relied on the boot market for the majority of their volume. In this market they compete with three other major competitors. In the fall of 2019, Badger – one of Duraflex’s competitiors – launched a new line of aggressively priced work boots. The strong success of this line has caused Duraflex’s management to re-evaluate their position in work boots. With limited additional resources, the management must now decide if they should focus their efforts on competing with Badger in the work boot sector, or allocate their resources on further strengthening their position with casual boots. The management team approached you and asked for your advice. In order to advise them on their future work boot strategy please prepare first some insights regarding market size and competitive landscape.
4.5 5 12904
| Rating: (4.5 / 5.0)

Duraflex is a German footwear company with annual men’s footwear sales of approximately €1 b. They have always relied on the boot market for the majority of their volume. In this market they compete with three other major competitors. In the fall of 2019, Badger – one of Duraflex’s competitiors – ... Open whole case

DHL Consulting case: Books & Codes

Solved 55.4k times
DHL Consulting case: Books & Codes A friend of yours recently got promoted to the position of director of a university library. Yesterday, your friend received a call from the Ministry of Education, who offered him to be part of a national RFID pilot with his library. As your friend is unsure if he should pursue this option, he asks you for your advice. Your task is to assess the RFID technology for his library. How would you approach such a request?
4.6 5 4528
| Rating: (4.6 / 5.0)

A friend of yours recently got promoted to the position of director of a university library. Yesterday, your friend received a call from the Ministry of Education, who offered him to be part of a national RFID pilot with his library. As your friend is unsure if he should pursue this option, he asks ... Open whole case