Hi!
I believe you confuse the objective with the case question! "Investing 5m $ in his business" is not the objective! It is most probably the starting point of the question (e.g., "Should our client invest the 5m $ in his business?" or "How much return will a 5m $ in his business yield?").
Now depending on what the actual question is, the underlying objective may need to be clarified and quantified in order to be even able to even start crafting approach for the required analyses.
For example, if the question is indeed "Should our client invest the 5m $ in his business?", we first need to understand, what the client wants to achieve at all! So under which condition would this investment be seen as beneficial? If, for example, the client needs a 50% ROI over 5 years, (THIS is the objective!) then this means we will have to verify whether this investment would yield an additional operational profit of at least 12.5m $ (5m $ x 1.5 - 5m $). To run this analysis, we need to disaggregate the business into its value levers and quantify, which levers would/could be impacted by the investment.
Rigorously disaggregating the value drivers of a business is indeed one of the fundamental things that candidates need to learn in order to approach cases in a mature way (avoiding to look through the junior lens of "buckets" and "factors"). The driver tree allows you to identify the logical drivers and sub-drivers of the value metric. The qualitative elements (such as consumer demand, market structure, company operations, etc.) then have to be mapped to the sub-branches of this tree.
Cheers, Sidi
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Dr. Sidi Koné
(Former Senior Engagement Manager and Interviewer at McKinsey | Former Senior Consultant and Interviewer at BCG)
(edited)
