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How can a revenue growth framework be MECE?

I struggle very hard with that. 

Revenue growth is super hard to nail down to be MECE. 

Think of it along the lines of the ansoff market 

1 Branch: Grow in core segment

- existing customers (old products, more spend) 

- new customers (old products, convert to sale)

2 Branch: Grow in new segments

- new geographies 

- new products 

---

In this example:

new products again can be catered to existing customers (thus again being in branch one). 

No matter how I spin it there are so many different options to grow … i.e.: 

- existing customers buy more of existing product

- existing customers buy a new product

- new customers start buying existing product

- new customers start buying new product

on top of that there are tweaks such as: 

focus the company on fast growing segments in the current market 

etc.

How should I bring this in one proper MECE framework?

- existing customers switch spending to higher margin product or pay more for additional services

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Top answer
Emily
Coach
on Nov 07, 2022
Ex McKinsey EM & interviewer (5 yrs) USA & UK| Coached / interviewed 300 +|Free 15 min intro| Stanford MBA|Non-trad

I echo what a lot of other people say - there is no ‘one size fits all' approach for a revenue growth framework. When it comes to frameworks you need to learn a few buckets of things that you might want to think about, and then learn how to use them appropriately in cases. 

For example, when it comes to revenue growth you may want to think about:

1. Increasing price / quantity

2. Opening new markets / launching new products 

3. Mergers / JVs / acquisitions

All of these would require a different approach to the case. So I suggest listening very carefully to the question and formulating a response based on the question being asked. 

Ian
Coach
on Nov 07, 2022
Top US BCG / MBB Coach - 5,000 sessions |Tech, Platinion, Big 4 | 9/9 personal interviews passed | 95% candidate success

Hi there,

Please try to not boil these cases into 1 set approach. Everything depends on the case prompt, the scenario, the specific objective, the industry etc.

If you have a boutique hotel in Paris looking to grow 5% in 1 year, you're going to have a completely different framework than a $1T valuation multinational tech company looking to grow 100% over 10 years…

Please learn how to framework and then the rest will follow!

Maikol
Coach
on Nov 07, 2022
BCG Project Leader | Former Bain, AlixPartner, and PE | INSEAD MBA | GMAT 780

I think you are overcomplicating simple things and looking at structures just for the sake of it. 

If the goal is to increase revenues, you can increase revenues in existing markets and new markets. 
For each of those you can work on volumes and prices of existing products/services, and new products/services. 

Remember: what is important is to craft a structure that is specific to the problem. Narrowing down a problem through clarification questions helps to make the structure as specific as possible. 
 

Sidi
Coach
on Nov 07, 2022
McKinsey Senior EM & BCG Consultant | Interviewer at McK & BCG for 7 years | Coached 400+ candidates secure MBB offers

Simple answer: NEVER. Because Revenue drivers themselves are not MECE (even without looking at new markets etc!). If you break revenue down, you have volume and price - both are not MECE, because the price is in turn a sub driver of volume. You can never completely seperate the two. But in the spirit of 80:20, you still do it to come to a pragmatic answer to the question.

And now let me also break a secret to you: the world is NOT MECE. So pure MECEness is a completely impossible and artificial concept! It is merely meant to bring some order into your thinking, but I see so many candidates who completely over-obsess about this, and while doing this are failing to see the most obvious things.

So please change your view of MECE. It is NOT an 100% attainable thing in the real world, and obsessing over it will hence not help you in any way - it will just block you.

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