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Case on Framework Structure - Market Entry

Case Interview Framework market entry MECE problems
New answer on May 09, 2024
5 Answers
197 Views
Anonymous A asked on May 07, 2024

Case is from Bain Website for friend to enter the coffee shop Industry in Cambridge, what to consider before go or no go…

My Buckets:

 

1) Coffee Shop market :

a) Growth Rates / Size

b) Competition 

c) Customers (preferences, what they like, etc.)

 

2) Financials (predicted rev, cost, investment)

 

3) Capabailities (her experience, why she is suited to open this)

 

4) Risks (financial and other)

 

I have been told that Competition should always be its on bucket - surely not it is part of the market though? Same with also Customers? 

If someone could explain would really appreciate it - this has really been confusing me.

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Best answer
Tiago
Expert
replied on May 08, 2024
ex-BCG Consultant & Interviewer | +150 interviews | Tackle any case w/o memorizing frameworks | Harvard MBA

Hi,

I think you should split them into 1. Coffee Shop Consumers and 2. Coffee Shop Competition, because of the importance of each block independently in this case. However, I want to highlight that I don't joining them is a no-go - you could probably get away with your joint structure in a real interview, as long as you were able to clearly justify your reasoning and identify the key questions you want to answer.

Let me materialize why I would split them by showing the questions I would ask inside each dimension:

  1. Coffee Shop Consumers: what is the overall market size and growth, what are the key trends in this sector, what is my target audience (only students, or other people as well), what are their preferences/demographics/habits, what is their willingness to pay
  2. Coffee Shop Competition: who are my direct (other coffee shops) and indirect (other venues like brunch places, etc.), what is their size (multinational or local players - important to measure their firepower reacting to a new entrant like our friend) what are they offering to my target audience and how (loyalty programs?), what is the satisfaction of consumers with our competitors (e.g., google ratings), what is their price point, how strong is their brand (starbucks is difficult to compete with)

In summary: as a rule of thumb, if you the bucket is very large (meaning, having many questions you want to answer), consider spliting. If not, leave them together. There's no right or wrong as long as you can clearly justify your rationale.

Best,

Tiago

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Pedro
Expert
updated an answer on May 08, 2024
Bain | Roland Berger | EY-Parthenon | Mentoring Approach | 30% off first 10 sessions in May| Market Sizing | DARDEN MBA

Hi there,

This is super-generic. As I read it, you may be boiling the ocean and at the same time missing critical things. 

Boiling the ocean:

  • Which market are you sizing? Whole Cambridge, a specific location?
  • What specifically do you want to know about competition? Everything?
  • Customers - you mention specific questions but… what are you going to do with that information? “preferences” and “what they like” is the same thing. Let's say 80% like latte and 20% caramel macchiato. How does it impact your recommendation? Does it even impact your recommendation? What about customer segmentation - no question on target customers, are they all the same? You could have mentioned student population, local population, etc…
  • Financials: how are you going to estimate all of these?
  • Capabilities? Only considering the entrepreneur capabilities? You want to evaluate whether she's suited but… you don't mention any criteria.
  • Risks: financial and other. What is “other" specifically? As I read it, this is everything again. By the way, you don't need a specific bucket for this. You may just mention a sensitivity analysis in the financial part, but  otherwise consider risk in every other analysis

What you are missing in a big way:

  • The coffee shop itself. You have no questions on the target location, value proposition and positioning, offering, brand, communication strategy, size/capacity, … If you have no “store concept” how are you going to evaluate if that concept may be successful?
  • Your structure could be used for any other industry, and even for different business problems. There's nothing problem nor business-specific in there.

You need to go deeper, not just deeper but much much deeper, be specific on your questions, and relate the questions to the problem at hand.

(edited)

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Hagen
Expert
Content Creator
replied on May 09, 2024
#1 Bain coach | >95% success rate | interviewer for 8+ years | mentor and coach for 7+ years

Hi there,

I would be happy to share my thoughts on your question:

  • First of all, your proposal for the initial structure is OK, but unfortunately it is not well adapted to the question at hand and thus is generic.
  • Moreover, I would advise you to reach out to an experienced coach to improve on the skill of structuring case studies. I have designed the Case Structuring Program specifically for candidates who struggle with structuring a case study like a consultant would do.

If you would like a more detailed discussion on how to best prepare for your upcoming Bain interviews, please don't hesitate to contact me directly.

Best,

Hagen

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Cristian
Expert
Content Creator
replied on May 08, 2024
#1 rated MBB & McKinsey Coach

Hi there

This is almost a template structure, so it's not going to fly in the interview. 

Think about it this way - 80% of the people who will go to the interview will provide the same thing. 

It doesn't show creativity, an ability to think through the client's situation and to tailor the structure specifically to the question. 

For instance, one practical thing you can improve is to make the structure more operational. 

Meaning have a set of areas or questions that, if resolved and investigated, could lead the client to an answer as to whether or not they should enter that market. 

Sharing here another material on structuring that you might find useful: 

And in case you need more help, I run a masterclass on first principles structuring that helps candidates handle any type of case: 

Best,
Cristian

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Oliver
Expert
replied on May 08, 2024
Former BCG interviewer (75+ interviews for associates, consultants and MBA hires) | I will make your practice perfect

Hi,

I haven't encountered this case before, but I think your framework can work well with some refinements. It's crucial, especially in this scenario, to tailor your framework specifically to the case at hand. The current structure appears a bit generic.

For instance, assuming the case involves an individual opening a coffee shop in Cambridge, the focus shouldn't be on the overall market size and growth rates of the UK coffee shop industry. Instead, the assessment should revolve around the individual's ability to:

a. Attract existing coffee consumers to choose their shop over local competitors.

b. Convert non-coffee consumers into customers.

Therefore, emphasize understanding local consumer preferences, purchasing behaviors, how competitors are meeting these preferences, and how this individual plans to cater to these specific consumers.

Best regards,

Oliver

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Tiago gave the best answer

Tiago

ex-BCG Consultant & Interviewer | +150 interviews | Tackle any case w/o memorizing frameworks | Harvard MBA
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