Is it fair to ask about the value chain as a clarifying question in the beginning of the case?

Clarifying questions Value Chain
New answer on Dec 31, 2020
7 Answers
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Anonymous A asked on Oct 15, 2018

I am usually always able to come up with more ideas to brainstorming questions if I know the value chain of the company. Is it fair to ask about it before you draw out your structure?

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Francesco
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replied on Oct 15, 2018
#1 Expert for Coaching Sessions (3.600+) | 1.300+ Reviews with 100% Recommendation Rate | Ex BCG | 8+ Years of Coaching

Hi Anonymous,

in general you can ask three type of questions at the beginning of the case:

  1. Those to understand how the business model of the client works
  2. Clarification of all the elements that were not clear to you in the prompt
  3. Goal clarification and constraints of the client to achieve it

Theoretically, the value chain can help you to understand better the first point, but most of the time an analysis of the full value chain is not strictly necessary for that. Moreover, a value chain analysis is usually already present in a good cost or operation structure.

As a consequence, unless you are completely unfamiliar with the industry/market, I would recommend to consider it as part of your structure later on, and ask at the beginning only what strictly required to understand the business model.

Best,
Francesco

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Vlad
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replied on Oct 15, 2018
McKinsey / Accenture Alum / Got all BIG3 offers / Harvard Business School

Hi,

You definitely can

You would recommend asking the following questions:

1) Clarify the business model. Ask how the company actually makes the money. For several reasons:

  1. Even if you think you understand the business model, you need to make sure that you understand it correctly.
  2. Some cases have pitfalls related to a business model (re profitability cases with several revenue streams
  3. You need to understand the revenue streams to make a proper structure. E.g. if the case is about oil&gas company which revenues are declining, ask if it is Up / mid / down-stream problem. In this case, defining a revenue stream is critical to setting up the right structure. (At the end of the day it may be the decline of snack sales at the gas stations:). In case of telecom company it may be the problem of the core business (wireless) or non-core (landlines, internet)

2) Clarify the objective. Here make sure that your goal is:

  • Measurable
  • Has a time-framed
  • Has / has no limitations

e.g. Should I invest 100k in this business for 1 year if I want to get 15% return?

3) Ask the questions that will help you build a relevant structure and remove ambiguity.

E.g. in the market entry case ask whether we are entering the country organically or non-organically

!!! Finally - do the recap after asking the clarifying questions. Although most of the case books suggest to do it immediately at the beginning of the interview, it makes much more sense to clarify the situation first and then to make sure that you understand everything correctly.

Best!

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Anonymous replied on Aug 13, 2020

Dear A,

Yes, you can. Unles this question is appropriate to ask, you will be replied smth like this: we don't know, we'll see later, it'’ ot relevant.

Also I would like to share with you 3 types of clarifying question which you can ask before structuring the interview:

questions that clarify the objective of the case interview

Here the basic things you have to know about the case objective:

  • What is the measurable metric of success?

  • What is the time frame?

  • What are potential restrictions or limitations?

2. questions about information that strengthens your understanding of the company

In this chapter the main things you have to know are:

  • Business model: How does the company make money? Do they sell directly to customers or do they sell through retailers or partners?

  • Products and services: What products and services does the company sell? What benefits do these products and services provide?

  • Geographic location: Does the company have one location or are they a national chain? Does the company operate in just one country or do they have an international presence?

3. question about definition of a term you are unfamiliar with

Most consulting interviews do not require you to have specialized knowledge or expertise in an industry. Therefore, if you come across a term that you are unfamiliar with, it is completely acceptable to ask the interviewer for the definition.

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Ian
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replied on Dec 31, 2020
BCG | 100% personal interview success rate (8/8) and 95% candidate success rate | Personalized interview prep

Hi,

There is always more that you can understand. For example, if you understand the goal as improving profits, there's so much more you can ask - do they have a % change target in mind, how long do we have to turn this around, do they prefer this to be done through raising revenue or cutting costs, etc.

I always write BOTMG at the bottom of my framework page to help myself think of things I'm missing in case I'm stuck.

This helps "trigger" you to consider questions around B = Business Model, O = Objective, T = Timing, M = Market, G = Geography.

However, you should never just say "so, what is their business model?" Obviously, ask questions that help you frame your hypothesis, understand the situation, and ultimately drive your case better.

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Gaurav
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replied on Nov 25, 2020
Ex-Mckinsey|Certified Career Coach |Placed 500+ candidates at MBB & other consultancies

Hi there,

there's no need to clarify every detail, I guess there would be something more important to ask, but if the case requires this type of information, you definitely can. Don't forget to have a clear understanding of the case objective and information about the company.

Good luck!

If you need any further help, feel free to contact me.

GB

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Benjamin
Expert
replied on Oct 15, 2018
ex-Manager - Natural and challenging teacher - Taylor case solving, no framework

HI,

It's crucial that you understand the business your will work on, and value chain is indeed a good way to proceed.
So it can ben done either in clarification question or in a dedicated section of your structure : this will depend on how specific / exotic is the business or vague is the initial case statement


Best
Benjamin

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Anonymous replied on Oct 15, 2018

As usual: It depends.

If it's some relatively exotic industry, that's ok. Like prosthetics, or some strange manufacturing ingredients or what not. (spitballing here...)

But if it's a bread-and-butter industry (like bakeries or dairy ;-) ) you should be able to come up with a relatively straightforward value chain configuration on your own.

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Francesco gave the best answer

Francesco

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