What I like to do is approach a case through key questions, instead of any particular framework.
This has several benefits. First, it addresses the problem with the client's concerns as the starting point. By starting a decision branch with a question, you make it clear to the interviewer exactly what problem you are trying to solve, and establish the purpose of a particular line of questioning. Second, it helps you cover all the bases. A question-led solution makes it easy to keep track of where you are in the case, and exactly what information you need in any particular sub-branch. Finally, it helps make your answer sound more natural, as you structure a framework around the questions.
For a market entry case, a question-led approach would look like this:
1. Why are we (the client) entering?
Objectives. Are they trying to maximise profit or market share? Are we trying to strengthen our brand, or transition away from a sunset industry?
2. Should we enter?
Market attractiveness. How large is the market? Is it growing? Is it profitable? What are the market segments?
3. Can we enter?
a. Entry barriers. What are the demand barriers (loyalty, switching costs)? What are the supply barriers (upstream, downstream, lateral)?
b. Capabilities. What are our financial abilities? What are our technical abilities?
4. How to enter?
a. Organic entry. Existing product mix? New product mix?
b. Inorganic entry. Acquisition? JV?
5. At what cost?
Costs and risks. What is the upfront investment? What is the operating cost? Are there any other risks to entry?
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As you can see, this style of approaching a case covers exactly the same things that a traditional framework would suggest. However, it is much more hypothesis-driven ("If the market is attractive, are there any existing barriers that may make it difficult to pull demand from existing players?")
It also makes it very easy and natural to transition to a different 'framework'. Consider for example if you decided to enter the market by organic means. You can ask the following questions:
1. What gaps might exist between the business and the market?
a. Product gap. Is there any mismatch between customer needs and what our products can offer?
b. Awareness gap. Are we marketing our product sufficiently and efficiently? Are customers able to find our products with our chosen distribution strategy?
c. Competitive strategy. Are we competing on price? What additional non-price factors may differentiate us?
d. Capability gap. Are our internal resources and processes sufficient to support this new demand?
2. Should we develop a new product?
What are the advantages and disadvantages of our new product? How replicable is our product? How substitutable is our product? (If no, abandon this branch and go inorganic)
3. Can we develop a new product?
Do we have the financial and technical abilities to develop a new product? (If no, abandon this branch and go inorganic)
4. How to grow?
Pricing strategy. Distribution strategy. Marketing. Capabilities. Use the gaps you found out earlier to create actionable conclusions.
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This approach is not perfect or fool-proof, and I am still working on refining the approach. If you have any suggestions, I'm happy to hear.
(edited)
Hi Francesco, thank you for the answer. What do you think about analyzing the client's company before delving into the target market - like this we can obtai a comprehensive overview of strengths/weaknesses/financial situation that will provide means to ends when arguing about the 'objective feasibility' as well as the 'best way to enter'. Cheers, -L.
(edited)
Hi Lorenzo, thanks for your comment. I think it’s easier to start from a market analysis for a couple of reasons: (i) if you identify size/growth not sufficient or excessive barriers you already know it won’t be possible to enter and save time in the final decision; (ii) when analysing the company you will have to compute whether you could achieve or not your goal; knowing the industry expected evolution can help you to better identify it (eg you may know already which is the expected growth rate of your revenues if growing as the industry, thus use it in the computation); (iii) since in the market part you analyse the customer segments, you could more easily calculate potential synergies when looking at the company. I agree it makes sense to know the client performance before judging the feasibility and how to enter, indeed I would consider that part as a following step after the company analysis (step 4 in the framework above). Best, Francesco