Financials in market entry cases

financial market entry New Market Entry
Recent activity on Jan 03, 2019
1 Answer
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Anonymous A asked on Jan 02, 2019

Hi everyone!

I have a doubt regarding the market entry cases. In a market entry case why most of the people analyze financials before the entry way? I feel that the financials should be regarded for each way as it will change depending on the entering strategy.

What is the sense of doing that way?

Thank you for your help!

(edited)

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Sidi
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replied on Jan 03, 2019
McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 300+ candidates secure MBB offers

Hi Anonymous,

you are right. However, one of the main points tested during case interviews is the candidate's ability to be efficient in his/her approach. Of course the entry mode influences the financials. Nevertheless, it is much more efficient to get a quick understanding of whether entering the market harbors enough value potential to outweigh the corresponding investments or not. If it is the case, then we already know that it makes snese in principle and, hence, have already answered part 1 of the questions in a much more time efficient manner than if we would boil the ocean and repeat the analysis for every possible mode of entry. This ability to identify the most important bits of analysis quickly and getting a high level undertanding of what the answer will be is a core quality that MBB are looking for.

Cheers, Sidi

Was this answer helpful?
Jon on Jan 03, 2019
Thank you very much Sidi!
Carl on Jul 29, 2019
Hi Sidi, I stumbled upon this issue as well today during a case. Just to clarify, when you say that it is more efficient to get a quick understanding of whether it gives enough value to outweigh the investment or not, how excactly do you mean. How would I know what the investment would be without knowing the way of entry and how would I know the corresponding costs with this decision? I do agree with you that it makes scence to first look at the financials, I'm just not really sure on excactly how to do it..
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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