Cookie and Privacy Settings

This website uses cookies to enable essential functions like the user login and sessions. We also use cookies and third-party tools to improve your surfing experience on preplounge.com. You can choose to activate only essential cookies or all cookies. You can always change your preference in the cookie and privacy settings. This link can also be found in the footer of the site. If you need more information, please visit our privacy policy.

Data processing in the USA: By clicking on "I accept", you also consent, in accordance with article 49 paragraph 1 sentence 1 lit. GDPR, to your data being processed in the USA (by Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Manage settings individually I accept
expert
Expert with best answer

Sidi

99% Recommendation Rate

423 Meetings

4,089 Q&A Upvotes

USD 449 / Coaching

6

Stating the hypothesis

Hi. I am wondering in which cases, stating hypothesis is appropriate and in which cases do not need hypothesis before a framework. Or, do we state a hypothesis for every case? Thanks.

Hi. I am wondering in which cases, stating hypothesis is appropriate and in which cases do not need hypothesis before a framework. Or, do we state a hypothesis for every case? Thanks.

6 answers

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Book a coaching with Sidi

99% Recommendation Rate

423 Meetings

4,089 Q&A Upvotes

USD 449 / Coaching

Hi!

And another round of the ever-repeated identical question... ;) So let me repeat what I already explained in multiple posts before:

Stating a hypothesis for the overall problem only makes sense if you really have something to ground your hypothesis on! This is very rarely the case, since case prompts tend to be quite vague at the beginning. Just stating a hypothesis for the sake of it serves no purpose! It would just be a shot from the hip - and this is something you should avoid at all cost during an MBB interview!

If the question is about finding the reasons for an observed phenomenen (e.g., fallen profits), then you can rather say “I would like to first identify the numerical driver of the problem, which can sit either on the revenue or on the cost side (or both). Based on this initial assessment, I would build a hypothesis on the underlying reasons for the detrimental development, then verify the hypothesis, and subsequently derive measures to address these reasons in order to reverse the trend.”

If the question is eseentially a go- or no-go-decision (e.g., "Should we enter the Brazilian market?"), then a MUCH better approach than a blank "Yes/No"-Hypothesis (which feels stupid anyway, right?) is to define the criterion according to which the question can be answered. This implicitly comprises hypothesis-thinking, but in a much cleaner way. All you have to do is to

(1) narrow down the question,

(2) define the criterion according to which the question can be answered with "yes",

(3) outline how you can test whether the criterion is met.

That's it! This is how you address strategic questions without shooting out non-substantiated hypotheses (or rather wild guesses!), while still being super top-down and super efficient.

Hypotheses then are used all along the way of performing the actual analyses! But it is not hypotheses on the overall question, but hypotheses on the various sub-aspects which you need to test in order to eventually answer the overall question.

I hope this helps.

Cheers, Sidi

Hi!

And another round of the ever-repeated identical question... ;) So let me repeat what I already explained in multiple posts before:

Stating a hypothesis for the overall problem only makes sense if you really have something to ground your hypothesis on! This is very rarely the case, since case prompts tend to be quite vague at the beginning. Just stating a hypothesis for the sake of it serves no purpose! It would just be a shot from the hip - and this is something you should avoid at all cost during an MBB interview!

If the question is about finding the reasons for an observed phenomenen (e.g., fallen profits), then you can rather say “I would like to first identify the numerical driver of the problem, which can sit either on the revenue or on the cost side (or both). Based on this initial assessment, I would build a hypothesis on the underlying reasons for the detrimental development, then verify the hypothesis, and subsequently derive measures to address these reasons in order to reverse the trend.”

If the question is eseentially a go- or no-go-decision (e.g., "Should we enter the Brazilian market?"), then a MUCH better approach than a blank "Yes/No"-Hypothesis (which feels stupid anyway, right?) is to define the criterion according to which the question can be answered. This implicitly comprises hypothesis-thinking, but in a much cleaner way. All you have to do is to

(1) narrow down the question,

(2) define the criterion according to which the question can be answered with "yes",

(3) outline how you can test whether the criterion is met.

That's it! This is how you address strategic questions without shooting out non-substantiated hypotheses (or rather wild guesses!), while still being super top-down and super efficient.

Hypotheses then are used all along the way of performing the actual analyses! But it is not hypotheses on the overall question, but hypotheses on the various sub-aspects which you need to test in order to eventually answer the overall question.

I hope this helps.

Cheers, Sidi

Book a coaching with Ian

100% Recommendation Rate

200 Meetings

16,277 Q&A Upvotes

USD 289 / Coaching

My view is that your framework is actually your hypothesis. It's a bit nuanced, but bear with me :)

Your framework is your structure for approaching the problem. It consits of a few main areas you'd like to look at. Inherent in your framework is a view that "If I answer A, B, and C, then we have an answer"

So, for market entry:

1) If the market is big, and it's growing, then we still want to considering entering

2) If #1 = yes, then let's see if it's attractive...can we win there? Is our product good/better than our competition's? Etc. If yes, let's definitely consider entering.

3) If #1 and #2 = yes, then, when we do enter, are we sure we can win? I.e. do we have the right plans. Will implementation actually pan out? Do we have the expertise, capital, etc.? In other words, if #2 is the thearectical, #3 is the reality.

Then, your summary becomes "I believe we should enter the market, if we can prove it's a good market, the it's attractive to us specifically, and that we will win it".

^Now this is a hypothesis :)

Read these 2 Q&As for some great context + discussion:

https://www.preplounge.com/en/consulting-forum/interviewer-led-case-interview-hyposthesis-and-ideas-7390

https://www.preplounge.com/en/consulting-forum/forming-a-hypothesis-case-in-point-vs-victor-cheng-7311

My view is that your framework is actually your hypothesis. It's a bit nuanced, but bear with me :)

Your framework is your structure for approaching the problem. It consits of a few main areas you'd like to look at. Inherent in your framework is a view that "If I answer A, B, and C, then we have an answer"

So, for market entry:

1) If the market is big, and it's growing, then we still want to considering entering

2) If #1 = yes, then let's see if it's attractive...can we win there? Is our product good/better than our competition's? Etc. If yes, let's definitely consider entering.

3) If #1 and #2 = yes, then, when we do enter, are we sure we can win? I.e. do we have the right plans. Will implementation actually pan out? Do we have the expertise, capital, etc.? In other words, if #2 is the thearectical, #3 is the reality.

Then, your summary becomes "I believe we should enter the market, if we can prove it's a good market, the it's attractive to us specifically, and that we will win it".

^Now this is a hypothesis :)

Read these 2 Q&As for some great context + discussion:

https://www.preplounge.com/en/consulting-forum/interviewer-led-case-interview-hyposthesis-and-ideas-7390

https://www.preplounge.com/en/consulting-forum/forming-a-hypothesis-case-in-point-vs-victor-cheng-7311

Book a coaching with Allen

100% Recommendation Rate

46 Meetings

802 Q&A Upvotes

USD 259 / Coaching

Love this question!

I have two thoughts here.

Firstly, if the initial evidence is pretty clear as to what the answer is, you can make that your hypothesis. Example: The question is whether to invest in new equipment that will lower costs. Makes sense to say yes we should because XYZ. That shoudl be your hypotheses and you should state it.

Secondly, if the evidence is not clear, your structure needs to test a hypothesis. Example: The question is whether I should enter a new market? Answer is I would enter this new market if a) I can forecast profitability b) I have internal capabilities and c) the market is attractive (customers, competition). Here the hypothesis is not yes or no b/c at the beginning I don't know yet, rather the hypothesis is that these are the important factors that need to be analyzed.

Does that make sense?

Crucial to get this right when you are learning how to solve cases. I'm happy to explain more if you like.

Love this question!

I have two thoughts here.

Firstly, if the initial evidence is pretty clear as to what the answer is, you can make that your hypothesis. Example: The question is whether to invest in new equipment that will lower costs. Makes sense to say yes we should because XYZ. That shoudl be your hypotheses and you should state it.

Secondly, if the evidence is not clear, your structure needs to test a hypothesis. Example: The question is whether I should enter a new market? Answer is I would enter this new market if a) I can forecast profitability b) I have internal capabilities and c) the market is attractive (customers, competition). Here the hypothesis is not yes or no b/c at the beginning I don't know yet, rather the hypothesis is that these are the important factors that need to be analyzed.

Does that make sense?

Crucial to get this right when you are learning how to solve cases. I'm happy to explain more if you like.

Book a coaching with Antonello

99% Recommendation Rate

142 Meetings

4,826 Q&A Upvotes

USD 219 / Coaching

Hi, I confirm stating a hypothesis is not always required, even if it often helps you in prioritizing the branches of your issue tree and lead the case

Best,
Antonello

Hi, I confirm stating a hypothesis is not always required, even if it often helps you in prioritizing the branches of your issue tree and lead the case

Best,
Antonello

Book a coaching with Robert

96% Recommendation Rate

317 Meetings

3,640 Q&A Upvotes

USD 219 / Coaching

Hi Anonymous,

Even though Victor Cheng offers a lot of excellent advice, including a strong focus on the hypothesis-driven approach (which really helps many candidates sharpening and focusing their thinking along the case!), stating a hypothesis at the very beginning of the case usually turns out to be more counterproductive than helpful.

Unless you are an experienced hire with a strong focus on exactly that one case question to discuss, stating a hypothesis right at the beginning of the case interview is essentially nothing else than poaching with a stick in the dark and guessing around. And here you are: you are perfectly set for a highly unstructured and confusing start into your case! (Please note that even as experienced hire, you might be completely wrong with your hypothesis, especially in the slightly artificial case interview world - so I would not even strongly recommend the early hypothesis there)

However, at the same time it's also a matter of defining 'hypothesis'. If you look at your structure at the beginning of the case interview, it is basically the connection between the current client situation and a specific goal you want to achieve. In other words, this initial structure is also a kind of hypothesis which elements you need to consider and analyze in order to clearly understand the root cause and develop a solution for that. So essentially you can also consider your structure as some kind of hypothesis.

Apart from that technicality, the correct time to explicitly state a hypothesis during your analysis phase is when you have collected some initial data and you start 'connecting the dots'. Once some distinct pieces of your analysis guide you into one specific direction, then it's the correct time to explicitly state your hypothesis and focus in on 'verifying' (in the non-scientific way) your hypothesis!

Hope that helps - if so, please be so kind to give it a thumbs-up with the green upvote button below!

Robert

Hi Anonymous,

Even though Victor Cheng offers a lot of excellent advice, including a strong focus on the hypothesis-driven approach (which really helps many candidates sharpening and focusing their thinking along the case!), stating a hypothesis at the very beginning of the case usually turns out to be more counterproductive than helpful.

Unless you are an experienced hire with a strong focus on exactly that one case question to discuss, stating a hypothesis right at the beginning of the case interview is essentially nothing else than poaching with a stick in the dark and guessing around. And here you are: you are perfectly set for a highly unstructured and confusing start into your case! (Please note that even as experienced hire, you might be completely wrong with your hypothesis, especially in the slightly artificial case interview world - so I would not even strongly recommend the early hypothesis there)

However, at the same time it's also a matter of defining 'hypothesis'. If you look at your structure at the beginning of the case interview, it is basically the connection between the current client situation and a specific goal you want to achieve. In other words, this initial structure is also a kind of hypothesis which elements you need to consider and analyze in order to clearly understand the root cause and develop a solution for that. So essentially you can also consider your structure as some kind of hypothesis.

Apart from that technicality, the correct time to explicitly state a hypothesis during your analysis phase is when you have collected some initial data and you start 'connecting the dots'. Once some distinct pieces of your analysis guide you into one specific direction, then it's the correct time to explicitly state your hypothesis and focus in on 'verifying' (in the non-scientific way) your hypothesis!

Hope that helps - if so, please be so kind to give it a thumbs-up with the green upvote button below!

Robert

Hi A,

Hypothesis depends on the case. So it's a case by case desicion.

Generally speaking, stating the hypothesis explicitly is not mandatoru to solve the case, however, it's always good to have one.

Best,
André

Hi A,

Hypothesis depends on the case. So it's a case by case desicion.

Generally speaking, stating the hypothesis explicitly is not mandatoru to solve the case, however, it's always good to have one.

Best,
André

Related case(s)

Hot Wheels

Solved 4.8k times
Hot Wheels Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability.
4.6 5 284
| Rating: (4.6 / 5.0)

Problem definition: Our client is Korean Car Parts (KCP), a multi-national original equipment manufacturer (OEM) of car parts based in Korea. They've recently seen a decline in profits and have brought us in to understand how to address this falling profitability. Open whole case

Chinese Chess - Airline Business During COVID-19

Solved 3.4k times
Chinese Chess - Airline Business During COVID-19 Sky China, a government-backed Chinese airline, has recently seen profits plummet due to COVID-19. Profits are down 80% in the months of February and March, but are showing early signs of a rebound in April.  They've brought you in to first investigate what can be done immediatedly to prevent hemorrhaging cash and surive in the short-term. They are also looking to see how the current situation can be viewed as an opportunity, and what can be done to prepare for the future. 
4.3 5 102
| Rating: (4.3 / 5.0)

Sky China, a government-backed Chinese airline, has recently seen profits plummet due to COVID-19. Profits are down 80% in the months of February and March, but are showing early signs of a rebound in April. They've brought you in to first investigate what can be done immediatedly to prevent hemor ... Open whole case

Coronavirus Times - COVID-19 Brainteaser

Solved 3.0k times
Coronavirus Times - COVID-19 Brainteaser You and your family are faced with a challenging set of decisions. Due to coronavirus, your partner has taken a 20% paycut and you are worried you may lose your job. In addition, while daycare is still open, you are worried that sending your two children there will increase the risk of them bringing the virus back to your house, where your elderly grandparents are also staying. How would you go about thinking about this problem, and what would you recommend?
4.6 5 36
| Rating: (4.6 / 5.0)
Difficulty: Beginner | Style: Brain Teaser | Topics: Brain teaser

You and your family are faced with a challenging set of decisions. Due to coronavirus, your partner has taken a 20% paycut and you are worried you may lose your job. In addition, while daycare is still open, you are worried that sending your two children there will increase the risk of them bringing ... Open whole case

McKinsey Digital / BCG Platinion: Oil & Gas Upstream Technology

Solved 3.0k times
McKinsey Digital / BCG Platinion: Oil & Gas Upstream Technology [PLEASE NOTE: This is a technically difficult case and should only be completed by those coming in as a Technology specialist, i.e. recruiting for McKinsey Digital, BCG Platinion, etc.] Our client is a multinational oil and gas company. While they are vertically integrated and have upstream, midstream, and downstream divisions, they have recently been experiencing competitivity issues in the upstream gas division, which brings in $1B in profits annually. Our client’s upstream division has offices in Australia and Indonesia. Their work is highly dependent on their IT systems, as they have to constantly monitor wells and pipes (pressure, hydrocarbon count, fluid makeup, etc.) The upstream division has two large legacy IT systems that are primarily used for downstream operations but have been modified for upstream purposes. These systems are managed by a central team in the US which is responsible for all IT issues across the business. They triage issues/enhancements and then manage development teams in India and Finland who complete the work.
4.5 5 60
| Rating: (4.5 / 5.0)

[PLEASE NOTE: This is a technically difficult case and should only be completed by those coming in as a Technology specialist, i.e. recruiting for McKinsey Digital, BCG Platinion, etc.] Our client is a multinational oil and gas company. While they are vertically integrated and have upstream, midstr ... Open whole case

YodaPhone

Solved 2.3k times
YodaPhone Our client is Yoda's Phones, a national telecommunications company. They have embarked on a three-year, multi-million dollar digitization program. Unfortunately, two years into the program, they realize they are significantly behind schedule and over budget. You have been brought in to right the ship and ensure the digitization program is delivered as planned.
4.5 5 61
| Rating: (4.5 / 5.0)

Our client is Yoda's Phones, a national telecommunications company. They have embarked on a three-year, multi-million dollar digitization program. Unfortunately, two years into the program, they realize they are significantly behind schedule and over budget. You have been brought in to right the sh ... Open whole case