Confused on Structuring a Case

BCG Case Structuring issue trees Victor Cheng
New answer on Mar 01, 2020
6 Answers
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Jagtar asked on Feb 12, 2020

I'm new to case studies but an area that I'm not fully understanding is structuring/laying out an issue tree. Do you write out a hypothesis at the top and branch out a tree from that (Victor Cheng) or do you write out the client question at the top and list MECE buckets that are drivers behind the question?

I'm interviewing with BCG and want to clarify this because I don't see the hypothesis at the start of the tree used outside Victor Cheng and I'm trying to understand why? And whether the second approach is the one they want to see.

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Sidi
Expert
replied on Feb 12, 2020
McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 300+ candidates secure MBB offers

Hi,

I believe it is a very common misconception among candidates that they need to explicitly state a hypothesis before laying out their structure. But a much better advice is the following:

Delay the explicit statement of a hypothesis until you have something to ground your hypothesis on! Just stating a hypothesis for the sake of it serves no purpose, since it is nothing more than guessing!

For example, if you are structuring a profitability case, where profits have decreased and you are asked for a diagnostic. Unless the interviewer has given you a hint in the case prompt, it does not make any sense to hypothesisze on the concrete reason before laying out your analysis/diagnostic structure! Instead, you can say:

“I would like to first identify the numerical driver of the problem, which can sit either on the revenue or on the cost side (or both). Based on this initial assessment, I would build a hypothesis on the underlying reasons for the detrimental development, then verify the hypothesis, and subsequently derive measures to address these reasons in order to reverse the trend.”

Cheers, Sidi

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Antonello
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replied on Mar 01, 2020
McKinsey | MBA professor for consulting interviews

I recommend starting practice cases without struggling with the theory of making a hypothesis. After 15+ cases it will became very logic to you

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Luca
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replied on Feb 29, 2020
BCG |NASA |20+ interviews with 100% success rate| 120+ students coached |GMAT expert 780/800 score

Hello Jagtar,

Victor Cheng's approach is super but could be a bit confusing, especially if you start from scratch. I suggest to take a look of the Cosentino's "Case In point" that is easier and less complex for the first approach with case interviews.

Best,
Luca

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Francesco
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replied on Feb 13, 2020
#1 Expert for Coaching Sessions (3.600+) | 1.300+ Reviews with 100% Recommendation Rate | Ex BCG | 8+ Years of Coaching

Hi Jagtar,

you can use a hypothesis whenever you have to verify if a part of the structure you presented is relevant. Specifically, to use a hypothesis you should:

  • Define a structure to answer the question of the interviewer
  • Define a hypothesis on one of the areas
  • Explain how you want to verify the hypothesis and ask information to the interviewer to proceed

If the interviewer for example asks where you want to start a cost analysis, you could answer:

“Well, costs can be divided in fixed and variable costs. Given the initial information I received so far, my hypothesis is that this could be a fix cost problem; to verify this hypothesis, I would like to know how fix and variable costs changed. Do we have any information on that?”

Therefore, by definition it makes sense that (1) you state the hypothesis after presenting a structure, not before and (2) you ask for data to verify the hypothesis after you stated it.

Hope this helps,

Francesco

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Vlad
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replied on Feb 12, 2020
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

First of all - Hypotheses are not mandatorily required. I would say - use the hypothesis if you are really good at solving the cases. If not - use the basic approach

There are two ways to use the hypothesis:

First - presenting a structure using the hypothesis. For example, if you are having a PE (private equity) case, you should do the following:

1) Make classic structure (market, company, competitors, feasibility of exit)

2) Make subpoints (e.g. in market: size, growth rates, profitability, segmentation, etc)

3) Present your 1st level Hypothesis:

  • - "In order to understand whether we should invest in Company A, I would like to check that the Market is Attractive, the Company is Attractive, the competition is favorable and we have good opportunities for of exit"

4) Present the main 2nd level Hypothesis:

  • "In the market, I would like to make sure that the market is big enough and growing;
  • In the company I would like to find additional opportunities for growth;
  • In competition I would like to check that the market is fragmented enough;
  • Finally, I would like to check if we have potential buyers and can achieve desired exit multiples"

Another way to use a hypothesis is by using the hypothesis to prioritize your analysis:

1) Make a structure: "Problem in sales may be related to Sales Motivation, Sales Strategy, Sales Coverage, and Sales Process:

2) Prioritize a part of the structure based on your knowledge / common sense / available data: "Taking into account that motivation is the core problem of the sales organization, I would like to prioritize this part of the analysis"

Good luck!

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Clara
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replied on Feb 12, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

It completly depends on the target of the case, type, etc. (e.g., there are "exploratory" issue trees where you want to lay out all factors that would influence a business decision, others that consist in laying out different options -such as growth ideas, for instance- and commenting pros and risks, etc.)

A priori, I would not start with laying out a hypothesis at the beggining, before even problem-solving with the interviewer. What would be the advantage of doing this?

Hope it helps!

Cheers,

Clara

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Sidi gave the best answer

Sidi

McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 300+ candidates secure MBB offers
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