How to approach this case: “what is the profitability of a new podcast subscription model for a well known tech company”

That's not a framework. That's just a set of investigation areas. This is a quantitative question, and there is not a direct link between your framework and the question being asked.
 There is no “why” nor “what” in your framework - if you don't explain why you want some information and what you plan to do with it, you don't really have a framework.

First of all, I would want to clarify the context. What do you mean by “new podcast subscription model”. It is difficult to develop a structure without knowing the business model… Everything I say after this may be completely wrong, based on what that model is or is not. I am assuming they are producing their podcasts, but it could be that they are just distributing podcasts made by others… can't tell by the prompt.

You need to understand revenue sources (is it just a monthly subscription fee or are there other revenues?). 

If there's a monthly subscription fee you need to know the pricing (and compare it with alternatives and willingness to pay).

You will need to estimate volumes (how large is the potential customer base and how “attractive” is that podcast topic for the target customer base, in which channels will they distribute and what's their market share, and what are the alternatives and how they will compare) –> with this you should be able to calculate the addresseable market and your piece of the pie (potencial market * channels share * market share) - of course making a judgement call here based on price.

Then you need to understand costs. Think about how you would break down costs here. You should consider the upfront costs of producing the podcasts (these are fixed costs, i.e., irrespective of volume), as well as marketing costs (would probably want to know what's the effectiveness and “sweet spot” of spending) and distribution costs (which are likely to be variable on volume, and may be different per channel, but may also have a fixed component).

Hi there,

I'm sorry but you need a crash course on frameworking. Remember that a framework is more like a project plan than anything else.

I'm going to take a step back and answer the question you're really asking: How do I use frameworks in a case?

If there's anything to remember in this process, is that cases don't exist just because. They have come about because of a real need to simulate the world you will be in when you are hopefully hired. As such, remember that they are a simplified version of what we do, and they test you in those areas.

As such, remember that a framework is a guide, not a mandate. In the real-world, we do not go into a client and say "right, we have a framework that says we need to look at x, y, and z and that's exactly what we're going to do". Rather, we come in with a view, a hypothesis, a plan of attack. The moment this view is created, it's wrong! Same with your framework. The point is that it gives us and you a starting point. We can say "right, part 1 of framework is around this. Let's dig around and see if it helps us get to the answer". If it does, great, we go further (but specific elements of it will certainly be wrong). If it doesn't, we move on.

So, in summary, learn your frameworks, use the ones you like, add/remove to them if the specific case calls for it, and always be prepared to be wrong. Focus rather on having a view, refering back to the initial view to see what is still there and where you need to dive into next to solve the problem.

Hi there, 

I would recommend checking out the articles available at Bootcamp here for the theory https://www.preplounge.com/en/bootcamp.php/case-cracking-toolbox/identify-your-case-type/profitability-case, you can find frameworks as well as tips on how to solve a specific type of case..... 

From my point of view, there are many frameworks available, but the error that many candidates do is trying to follow one/another without customizing it. You should understand those frameworks, but you need to be able to develop your customized approach for the specific client, situation, and context. This is the reason why when entering to MBB you won't learn frameworks… each client is unique and our approach must solve THEIR problem. 

I would recommend starting familiarizing yourself with the frameworks and practicing only case structuring.

Lucie

Was this answer helpful?

Here's my personal perspective: when the question is about profitability, try to focus on that for your initial structure. I see a tendency in most candidates to overcomplicate at this point.

Once you break open profitability into its component parts, you will see that most of the other things you mention can be accommodated here as drivers/areas of investigation i.e. the end-points of a tidy MECE structure.

For example, when you're considering revenue on the basis of # of active subscriptions x $ cost of subscription, you could address market forces from competitors here. What impact do competitors have on my pricing/discount strategy or my ability to grow and retain a loyal customer base?

Bottom line is that you have some important elements in your structure but the structure itself leads you down a somewhat chaotic path.

In some cases where profitability is primary it may be appropriate to have a more comprehensive structure to begin with, but your buckets need to be super MECE e.g. financial and non-financial considerations. Financial would essentially be profits (+ sometimes investments, which turns it into an ROI exercise). In non-financial, you could address things such as reputation, risk, etc. However, in your example, everything fits into a profitability tree.

Hope this helps! Best of luck!