Can you have an m&a analysis embedded in a market entry case?
So let's say I had a market entry case and I asked as a clarifying question if the client had any favourable way to enter the market? The interviewer pointed out that the client prefers to enter through m&a. So should my structure revolve around an m&a framework?
Thanks
(edited)
Hi!
No! You should not structure “around an M&A framework”. Structuring a question does not mean to define a certain number of buckets and bullet points to look at! This is what people do who have not learned how to properly think through strategic issues, and it would become extremely hard (or even impossible) to exhibit the traits of a mature thinker if you approach a question like this.
A structure is NOT a framework! A structure should outline the precise logic according to which you will answer the question. And this is something completely different from saying “I want to look at the following 5 buckets…”
So if the question is “Should the client enter this market?”, then you have to create a logic according to which this “Go-or-NoGo decision” can be answered. For this, you need to be clear on the underlying objective, and then translate it into a clear and measurable criterion. The mode of entry is then a peripheral aspect (or secondary condition) by which you need to check whether an acquisition would be possible and viable for the client.
If the question is “How to enter this market?”, and the M&A preference is known, then you need to outline the dimensions that will warrant a successful acquisitorial move, then build a logic tree for each dimension to make explicit the sub aspects, and then check the client capabilities against each aspect.
This is just a quick and dirty outline, but I hope this already shows you how superior a candidate is wo has built the skill of rigorous thinking instead of using a framework. In MBB interviews, rigorous thinkers will ALWAYS be preferred to framework addicts. So my advice would be to invest the necessary time and resources to learn from an experienced senior consultant (Project leader and upwards) how they structured such issues in REALITY.
Cheers, Sidi
_______________________
Dr. Sidi Koné
(Former Senior Engagement Manager and Interviewer at McKinsey | Former Senior Consultant and Interviewer at BCG)
(edited)
You are not thinking in the right direction with that approach.
In a market entry case, generally there are 2 key questions that need to be answered:
Hi!
Yes, your initial structure should consider the key points behind an M&A, e.g. synergies, company valuation, acquisition cost, etc.
Do not forget to include all the other important buckets that relate to the case prompt (i.e. market entry considerations).
Hope this helps.
Best,
Anto
Hi there.
Short answer: Frameworks don't work.
First of all, you are already starting the case with the wrong foot. If the question is on whether you should enter the market, it makes no sense to ask if there is a preferred way to enter the market. No sense, since you don't know yet if they will want to enter the market. So the question you are asking is not really connected to the problem you are trying to solve. Be aware: that is not a clarifying question ("clarifying question" applies to questions regarding case objectives or context).
A real case interviewer would either reply with another question (i.e. why do you think that is relevant to decide on whether to enter the market?) or actually answer, but in that case… he is “giving you rope” (i.e., answering your exact question but actually letting you follow a path that leads to nowhere).
If after this you setup a “structure” to answer a question that wasn't asked (i.e., should they do the M&A), then it's game over. No way you can reach the right answer when asking the wrong question.
You need to setup a structure that answers the specific question, i.e., what needs to be true so that XYZ is a good idea? You don't do this with buckets or “frameworks”. You do this with specific questions and specific analysis supporting those questions.
Hope this helps. And feel free to reach out.
(edited)
Sidi has a great explanation here - the core point is that the M&A is one of the approaches that can be used to enter the market. Just because it is the preferred approach does not mean you now go ahead and create an entirely new structure for it. You never get asked to create an embedded structure in a case.
Hi there,
In a sense yes, but also not literally.
Most cases are some combination of case types, so you'll need to incorporate elements within.
That said, while M&A should be flagged in your market entry framework (likely under a “how to enter” bucket) it's not like you should have 3 additional buckets specifically for M&A!
Make sense?
Hello!
That is a perfectly reasonable follow up question, sure.
However, why do you assume that they would ask you for a structure again? It´s not typically the case in follow up questions, they are more to deep dive or challenge.
Hope it helps!
Cheers,
Clara
