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Non Traditional Approach to Solving a Strategy Case

daria

"A leading manufacturer of instant cameras and one-hour photo finishing machines is facing a dramatic downturn in business due to the rapid increase in digital photography and sharing photos over the Internet. What should it do?"

I stumbled across the above question in another post. The traditional case approach as I see it is one of drivers i.e clarifying questions to crystalize the problem, then a "bucketed" driver approach to build a decision tree, then recommendations following prioritization of the drivers.

When I was thinking about the above problem, however, I came up with a different approach. Firstly, my clarifying questions were designed to give an unambiguous problem statement to conclude that the drop in sales is purely due to the adoption of digital photography (i.e. no management team problems, no marketing/brand problems, no distribution problems etc). This is plausible given the nature of the problem (VHS vs CD - adapt to the new technology or dissapear). Secondly, identify how the client can get a piece of the new digital photgraphy value chain - 3 buckets here; digital camera production, digital photorgraphy finishing software (eg. photoshop type of product), digital photo platform for storing and sharing (e.g. Flickr type of product). I am in effect identifying 3 possible courses of action upfront (rather than firstly building a decision tree to identify drivers of the problem). Thirdly, I will then build a decision tree off these buckets (build, buy or partner) to identify what is possible and what is executable. Fourthly, give recommendations based off capabilities and what will have the biggest short to mid term impact.

Correct me if I am wrong, but this would be a bottom up approach. I start off identifying potential solutions then work provide recommendations dependant on whether they executable in the given time frame. Would this approach be acceptable in a real MBB case interview on the proviso that I make it very clear up front that I am approaching it like this?

(edited)

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Vlad replied on 11/11/2017
McKinsey / Accenture / More than 300 real MBB cases / Collected all Big 3 offers / Harvard Business School

Hi Daria,

Seems like you came up with a solution even before studying the problem properly. Several examples:

  • What if the downturn is in a particular country but we can still sell the machines in less-developed countries?
  • What if we just sell this company if it is not too late? Merge with someone?
  • What if the b2c demand is declining but there is a b2b market?
  • What if the company has no software capabilities? In this case, building a software product equals starting an entirely new company.

I know that most of the case books recommend you to start with the hypothesis. But I think you are going a bit too far and your value chain is, in fact, a mix of different solutions. Moreover, I am not sure if all the solutions you've mentioned appeared simultaneously with the launch of digital cameras.

I will provide just one example: When Google is thinking of launching a new product - they always start with identifying customer needs and what are the gaps in existing products to satisfy these needs.

I like your clarifying questions, but with the structure, I will use the following:

  • Market - identifying if there is still demand for these or related products in other countries / b2b space
  • Customers - to understand what are the new trends and which products came as a replacement
  • Company - to understand our capabilities and find out whether we can satisfy this new demand
  • Benefits and costs of the proposed solution

Best,

Vlad

Cameron
Expert
replied on 11/09/2017
Ex-McKinsey BA/Associate across Australia and UK // Graduate and MBA case experience

Daria,

Great Question and not an unusual case by any means. I think your approach is very logical and would be happy seeing that as an interviewer. There is really no right answer and you have clearly thought about the problem and structured it in a logical way (what the case interviewer is looking for). What you have highlighted here is a hypothesis tree rather than an issue tree, which is absolutely fine.

one comment - I would suggest trying to explain a little further why the three stages of the value chain you identified are the best possible course - what about accessories, etc. You can also things like the Kodak case (worth a read irrespective). I would also encourage you to outline the criteria you would use to assess which option to pursue instead of heading straight down the route of identifying paths to achieve each.

Finally, it is much harder to build a hypothesis tree than an issue tree, so I would suggest going down the issue tree route unless you are really confident on the options (like you are in this case).

thanks

Cameron