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How detailed should the initial structure be for broader cases like M&A, PE, Market Entry?

For broad cases like PE invetment, M&A, Market Entry etc. what level of details should be included in the initial structure shown to the interviewer. Let's say it's PE invetment case should I include all the buckets (PE characteritics, market structure , target company, valuation, way to improve operations, profitability, revenue, multiple etc.) with 5-6 points under each bucket? My worry is such broad structure looks generic and rehearsed with lack of clarity of purpose plus it takes almost 7-8 min to walk through it, on the other hand if I try to use some customization there is a probability that I might miss out on most crucial part of the case.

Thanks

For broad cases like PE invetment, M&A, Market Entry etc. what level of details should be included in the initial structure shown to the interviewer. Let's say it's PE invetment case should I include all the buckets (PE characteritics, market structure , target company, valuation, way to improve operations, profitability, revenue, multiple etc.) with 5-6 points under each bucket? My worry is such broad structure looks generic and rehearsed with lack of clarity of purpose plus it takes almost 7-8 min to walk through it, on the other hand if I try to use some customization there is a probability that I might miss out on most crucial part of the case.

Thanks

(edited)

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Hi!

You are right - such a laundry list of buckets to look into feels (and actually is!) completely arbitrary.

A structure to approach a case should be rooted in the actual question that you need to address. From there, you should define the criterion to answer this question, and build a corresponding value driver tree with branches and sub branches. All the elements that you have listed above (market structure, target company operations/capabilities, synergy levers, etc.) should be mapped to the different sub branches of your value driver tree. This is true, regardless of whether you are looking at a PE/M&A scenario, or market entry, or capacity expansion, or new product launch, etc. etc.

The crucial point is that, thereby, you create a rigorous thinking frame which organizes all relevant elements into a structure by which you can link the analysis of every element back to the core question you need to answer by means of logic.

Unfortunately, no case books are revealing this to candidates, creating the illusion to candidates that "learning frameworks" is an acceptable approach towards cases.

Cheers, Sidi

Hi!

You are right - such a laundry list of buckets to look into feels (and actually is!) completely arbitrary.

A structure to approach a case should be rooted in the actual question that you need to address. From there, you should define the criterion to answer this question, and build a corresponding value driver tree with branches and sub branches. All the elements that you have listed above (market structure, target company operations/capabilities, synergy levers, etc.) should be mapped to the different sub branches of your value driver tree. This is true, regardless of whether you are looking at a PE/M&A scenario, or market entry, or capacity expansion, or new product launch, etc. etc.

The crucial point is that, thereby, you create a rigorous thinking frame which organizes all relevant elements into a structure by which you can link the analysis of every element back to the core question you need to answer by means of logic.

Unfortunately, no case books are revealing this to candidates, creating the illusion to candidates that "learning frameworks" is an acceptable approach towards cases.

Cheers, Sidi

(edited)

Are you able to give an example of this please? — Anonymous on Jul 11, 2018

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Hi,

4 buckets with 3-5 bullet points are enough. For example for the private equity case:

Market

  • Size
  • Growth rates
  • Profitability
  • Segments
  • Distribution channels

Competition

  • Market shares of competitors and their segments (see the next point)
  • Concentration / fragmentation (Fragmented market with lots of small players is less mature and easier to enter from a scratch. Concentrated market is hard to enter but has potential acquisition targets)
  • Unit economics of the players (Margins, relative cost position)
  • Key capabilities of the players (e.g. suppliers, assets, IP, etc)

Company

  • Unit economics (Margins, costs) in current or target markets
  • Brand
  • Product mix
  • Key capabilities

Feasibility of exit:

  • Exit multiples
  • Exit time
  • Existence of buyers

Best!

Hi,

4 buckets with 3-5 bullet points are enough. For example for the private equity case:

Market

  • Size
  • Growth rates
  • Profitability
  • Segments
  • Distribution channels

Competition

  • Market shares of competitors and their segments (see the next point)
  • Concentration / fragmentation (Fragmented market with lots of small players is less mature and easier to enter from a scratch. Concentrated market is hard to enter but has potential acquisition targets)
  • Unit economics of the players (Margins, relative cost position)
  • Key capabilities of the players (e.g. suppliers, assets, IP, etc)

Company

  • Unit economics (Margins, costs) in current or target markets
  • Brand
  • Product mix
  • Key capabilities

Feasibility of exit:

  • Exit multiples
  • Exit time
  • Existence of buyers

Best!

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Mergers and Acquisitions

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Market Entry Strategy Frameworks may be a great solution to apply in your Case Interview if your client is searching for growth alternatives.

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