Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Sidi

99% Recommendation Rate

428 Meetings

4,307 Q&A Upvotes

USD 539 / Coaching

4

Case Structuring: Broad (All Angles) vs Specific (Targeted)

Case Prompt
A global foods maker and marketer, which is based in the US, is contemplating a strategic acquisition of a smaller British confectionery company to bolster its presence in emerging markets and establish a footprint in additional businesses, such as gum and candy. They've hired our team to help them evaluate this potential acquisition and help the senior leadership make a decision. Which key pieces of analysis would you look at to guide them?

Structure 1 (Specific)
Case structure

Structure 2 (Broad)

Which of the case structures above would an interviewer prefer?

Case Prompt
A global foods maker and marketer, which is based in the US, is contemplating a strategic acquisition of a smaller British confectionery company to bolster its presence in emerging markets and establish a footprint in additional businesses, such as gum and candy. They've hired our team to help them evaluate this potential acquisition and help the senior leadership make a decision. Which key pieces of analysis would you look at to guide them?

Structure 1 (Specific)
Case structure

Structure 2 (Broad)

Which of the case structures above would an interviewer prefer?

(edited)

4 answers

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

99% Recommendation Rate

428 Meetings

4,307 Q&A Upvotes

USD 539 / Coaching

Hi Anonymous!

I believe the first structure is a better starting point. However, it still needs significant improvement.

Structuring a case does not primarily mean to explain the interviewer WHAT you want to look into (the "buckets")! Structuring a case primarily means to explain the interviewer HOW you are going to answer the specific question that has been asked!

So your structue needs to be a LOGIC, not a set of qualitative buckets! Such qualitative elements (Customers, Market, Product, Competition, etc.) are nothing more than influencing factos that determine the answer to the question THROUGH the logic that you have outlined. This is how you think as a strategy consultant, and this is how you work out the approach towards strategic problems on real engagements. And you might not be surprised that this is also by far the best way to approach case questions in a rigorous way.

So the most important part you need to verify in such a case is whether the strategic move (the acquisition) will help reach the client's objective. If this objective is of financial nature (e.g., profit), then your structure needs to verify whether the target profit increase can be reached or not. This is operationalized by a clear criterion according to which the answer to the client's question is YES or NO. For example, it could be:

"If the additional profit generated by the acquisition exceeds the corresponding investment costs by at least 25% (the required return; to be verified with interviewer) over X years (the investment horizon; to be verified with interviewer), then it makes financial sense."

--> [additional yearly profit] x [investment horizon in years] > [investment cost] x 1.25

This is the core part of the structure - the financial analysis. You then need to quantify the elements of this inequality and check whether the inequality can be met or not. This is usually done by driver trees to which you then attach the typical qualitative buckets as outlined in your second structure.

But it does not make sense to have a seperate bucket like synergies on the same level as financial analysis, since synergies drive the financial analysis! The same is true for what you call "Benefits". These need to sit on a deeper logical layer, since they influence the financial result. The other elements such as capabilities and risks are side conditions which you also need to outline in the beginning, but they will not be the main focus of the analysis and usually only get scrutinized towards the end of the case to outline next steps/additional analysis required.

Cheers, Sidi

Hi Anonymous!

I believe the first structure is a better starting point. However, it still needs significant improvement.

Structuring a case does not primarily mean to explain the interviewer WHAT you want to look into (the "buckets")! Structuring a case primarily means to explain the interviewer HOW you are going to answer the specific question that has been asked!

So your structue needs to be a LOGIC, not a set of qualitative buckets! Such qualitative elements (Customers, Market, Product, Competition, etc.) are nothing more than influencing factos that determine the answer to the question THROUGH the logic that you have outlined. This is how you think as a strategy consultant, and this is how you work out the approach towards strategic problems on real engagements. And you might not be surprised that this is also by far the best way to approach case questions in a rigorous way.

So the most important part you need to verify in such a case is whether the strategic move (the acquisition) will help reach the client's objective. If this objective is of financial nature (e.g., profit), then your structure needs to verify whether the target profit increase can be reached or not. This is operationalized by a clear criterion according to which the answer to the client's question is YES or NO. For example, it could be:

"If the additional profit generated by the acquisition exceeds the corresponding investment costs by at least 25% (the required return; to be verified with interviewer) over X years (the investment horizon; to be verified with interviewer), then it makes financial sense."

--> [additional yearly profit] x [investment horizon in years] > [investment cost] x 1.25

This is the core part of the structure - the financial analysis. You then need to quantify the elements of this inequality and check whether the inequality can be met or not. This is usually done by driver trees to which you then attach the typical qualitative buckets as outlined in your second structure.

But it does not make sense to have a seperate bucket like synergies on the same level as financial analysis, since synergies drive the financial analysis! The same is true for what you call "Benefits". These need to sit on a deeper logical layer, since they influence the financial result. The other elements such as capabilities and risks are side conditions which you also need to outline in the beginning, but they will not be the main focus of the analysis and usually only get scrutinized towards the end of the case to outline next steps/additional analysis required.

Cheers, Sidi

(edited)

Book a coaching with Axel

100% Recommendation Rate

54 Meetings

813 Q&A Upvotes

USD 249 / Coaching

From my perspective, both frameworks are pretty weak and have some relatively big issues. General, I would prefer a specific framework but it needs to target the key questions and objective for the client.

Framework 1:

- Not all the buckets are specific drivers of the decision on whether or not they should acquire the British confectionery company (especially risks, benefits)

- Not MECE (the content you have in synergies could also be under benefits and vice versa)

- Pretty generic in the sense that the framework could be applied to almost any industry

Framework 2:

- Very generic M&A framework

- The "buckets" are not tailored to the situation or achieving the client's specific objectives (increase exposure to emerging markets, establish a footprint in confectionary)

I would frame something to the tune of:

1. Would acquisition improve market presence in attractive market segments (emerging markets, fast growing verticals)?

2. Is the British confectionary company an attractive asset?

3. What are the synergies / dysynergies of acquiring the company?

4. Does the acquisition make financial sense from a valuation perspective?

I can let you think about what the sub drivers would be from each of those questions.

Hopefully useful!

-A

From my perspective, both frameworks are pretty weak and have some relatively big issues. General, I would prefer a specific framework but it needs to target the key questions and objective for the client.

Framework 1:

- Not all the buckets are specific drivers of the decision on whether or not they should acquire the British confectionery company (especially risks, benefits)

- Not MECE (the content you have in synergies could also be under benefits and vice versa)

- Pretty generic in the sense that the framework could be applied to almost any industry

Framework 2:

- Very generic M&A framework

- The "buckets" are not tailored to the situation or achieving the client's specific objectives (increase exposure to emerging markets, establish a footprint in confectionary)

I would frame something to the tune of:

1. Would acquisition improve market presence in attractive market segments (emerging markets, fast growing verticals)?

2. Is the British confectionary company an attractive asset?

3. What are the synergies / dysynergies of acquiring the company?

4. Does the acquisition make financial sense from a valuation perspective?

I can let you think about what the sub drivers would be from each of those questions.

Hopefully useful!

-A

Book a coaching with Ian

100% Recommendation Rate

335 Meetings

29,641 Q&A Upvotes

USD 289 / Coaching

Hi there,

A few thoughts

1) Risks is not a bucket

2) Benefits is not a bucket

(Both of these should generally be embedded in your analysis and are implicit).

I like

The Market Bucket in exhibit 2

The Target Company in exihibit 2 PLUS financial performance in exhibit 1 (they're the same concept)

Synergies (And dis-syngeries btw) in exhibit 1 PLUS Client in exihibit 2

In summary, you are saying:

  • Is the market big and attractive and growing overall? (If yes, great, let's keep digging. If no, maybe the company is still good within a bad market, but this isn't a good sign)
  • Is the target company attractive and growing overall? (If yes, great, let's see what it's worth today. If no, let's still see if we can change this)
  • What happens once we acquire (Will it grow in value because of synergies? Or will it be worth less? Can we actually do this - financially and logistically)

Hi there,

A few thoughts

1) Risks is not a bucket

2) Benefits is not a bucket

(Both of these should generally be embedded in your analysis and are implicit).

I like

The Market Bucket in exhibit 2

The Target Company in exihibit 2 PLUS financial performance in exhibit 1 (they're the same concept)

Synergies (And dis-syngeries btw) in exhibit 1 PLUS Client in exihibit 2

In summary, you are saying:

  • Is the market big and attractive and growing overall? (If yes, great, let's keep digging. If no, maybe the company is still good within a bad market, but this isn't a good sign)
  • Is the target company attractive and growing overall? (If yes, great, let's see what it's worth today. If no, let's still see if we can change this)
  • What happens once we acquire (Will it grow in value because of synergies? Or will it be worth less? Can we actually do this - financially and logistically)
Book a coaching with Clara

100% Recommendation Rate

62 Meetings

16,625 Q&A Upvotes

USD 229 / Coaching

Hello!

I am not in love with any of the 2 since they are missing details -agreeing with the last posts-.

However, if I had to choose one, I would prefer the 1st one. At least, it lands quicker on the points.

HOpe it helps!

Cheers,

Clara

Hello!

I am not in love with any of the 2 since they are missing details -agreeing with the last posts-.

However, if I had to choose one, I would prefer the 1st one. At least, it lands quicker on the points.

HOpe it helps!

Cheers,

Clara

Related case(s)

MBB Final Round Case - Smart Education

Solved 19.4k times
MBB Final Round Case - Smart Education Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvantaged areas. The client is considering starting operations for its services in the Chicago area. They hired us to understand if that makes sense. Due to the nonprofit regulation, SmartBridge should operate on its own in the market, without any partnership. How would you help our client?
4.6 5 649
| Rating: (4.6 / 5.0)

Our client is SmartBridge, a nonprofit educational institution offering face-to-face tutoring services. The client operates in the US. The mission of SmartBridge is to help as many students as possible to complete studies and prevent that they drop from the school system, in particular in disadvant ... Open whole case

Hot Wheels

Solved 6.1k times
Hot Wheels Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability.
4.6 5 305
| Rating: (4.6 / 5.0)

Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability. Open whole case

Chinese Chess - Airline Business During COVID-19

Solved 4.4k times
Chinese Chess - Airline Business During COVID-19 Sky China, a government-backed Chinese airline, has recently seen profits plummet due to COVID-19. Profits are down 80% in the months of February and March, but are showing early signs of a rebound in April.  They've brought you in to first investigate what can be done immediatedly to prevent hemorrhaging cash and surive in the short-term. They are also looking to see how the current situation can be viewed as an opportunity, and what can be done to prepare for the future. 
4.3 5 121
| Rating: (4.3 / 5.0)

Sky China, a government-backed Chinese airline, has recently seen profits plummet due to COVID-19. Profits are down 80% in the months of February and March, but are showing early signs of a rebound in April. They've brought you in to first investigate what can be done immediatedly to prevent hemor ... Open whole case

YodaPhone

Solved 3.4k times
YodaPhone Our client is Yoda's Phones, a national telecommunications company. They have embarked on a three-year, multi-million dollar digitization program. Unfortunately, two years into the program, they realize they are significantly behind schedule and over budget. You have been brought in to right the ship and ensure the digitization program is delivered as planned.
4.5 5 71
| Rating: (4.5 / 5.0)

Our client is Yoda's Phones, a national telecommunications company. They have embarked on a three-year, multi-million dollar digitization program. Unfortunately, two years into the program, they realize they are significantly behind schedule and over budget. You have been brought in to right the sh ... Open whole case

Bain 1st Round Case – BlissOttica

Solved 3.2k times
Bain 1st Round Case – BlissOttica Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client?
4.3 5 134
| Rating: (4.3 / 5.0)

Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client? Open whole case