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Vlad

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2

Structure for growth strategy cases

For growth strategy cases, should we look at the current industry size/growth rates first, compare it to our client's, before deciding on a strategy? To me, it seems like a very slow and inefficient way of doing so, but it is definitely MECE.

I prefer a more direct approach. As an example, is it okay if I open the case directly and say:

"I'd like to look at two branches - organic and inorganic growth.

For organic growth, I have 5 strategies in mind and look to test them accordingly. First, I want to look at the possibility of entering a new market - to determine this, I will look at which markets our client is strong in and decide where to expand based off that. Next, I want to look at increasing distribution channels - to determine this, ..... . Third, I want to look at our product offerings and see if we can introduce new products or further differentiate - to determine this, .... . Fourth, I want to look at our pricing model and see if we can optimise it by increasing/decreasing it to drive up revenue - to determine this, .... . Lastly, I want to look at our promotion/marketing efforts and whether it has been useful in driving sales - to determine this .... .

For inorganic, I'd like to look at the possibility of a horizontal M&A, vertical M&A, and a JV"

My concern is that it is not MECE, or I may miss out on very important information such as a certain revenue stream that our client isn't growing very quickly in.

I will appreciate any advice on how to structure better for growth strategy cases.

For growth strategy cases, should we look at the current industry size/growth rates first, compare it to our client's, before deciding on a strategy? To me, it seems like a very slow and inefficient way of doing so, but it is definitely MECE.

I prefer a more direct approach. As an example, is it okay if I open the case directly and say:

"I'd like to look at two branches - organic and inorganic growth.

For organic growth, I have 5 strategies in mind and look to test them accordingly. First, I want to look at the possibility of entering a new market - to determine this, I will look at which markets our client is strong in and decide where to expand based off that. Next, I want to look at increasing distribution channels - to determine this, ..... . Third, I want to look at our product offerings and see if we can introduce new products or further differentiate - to determine this, .... . Fourth, I want to look at our pricing model and see if we can optimise it by increasing/decreasing it to drive up revenue - to determine this, .... . Lastly, I want to look at our promotion/marketing efforts and whether it has been useful in driving sales - to determine this .... .

For inorganic, I'd like to look at the possibility of a horizontal M&A, vertical M&A, and a JV"

My concern is that it is not MECE, or I may miss out on very important information such as a certain revenue stream that our client isn't growing very quickly in.

I will appreciate any advice on how to structure better for growth strategy cases.

(edited)

2 answers

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Hi,

The problem with your 2nd structure is that it is more solution oriented and you have no chance to ask questions. So its more important when the question is being asked:

  • In the beginning of the case as the main objective
  • In the middle of the case as a question on creativity

In the beginning of the case I would use the following broad structure:

Analyze the market:

  • Size and growth rates
  • Segments (geographical, customer, product)
  • Distributors / Suppliers
  • Regulation
  • Key market trends

Analyze the competitors:

  • Market shares, growth rates, profits
  • Product / customer / geographical mix
  • Products (Value proposition)
  • Unit economics (Value proposition vs. price vs. costs)
  • Key capabilities (Distribution, supply, assets, knowledge, etc)

Analyze our company:

  • Market share, growth rates, profit
  • Product / customer / geographical mix
  • Products (Value proposition)
  • Unit economics (Value proposition vs. price vs. costs)
  • Key capabilities (Distribution, supply, assets, knowledge, etc)

How to increase revenues:

  • How to increase the scope: Product / customer scope, geographical scope
  • How to improve value proposition (How to fix your weaknesses and improve your strengths; Potential increase in price and volumes)
  • How to answer the competitors (Unique or hard to build property and contracts; Customers / suppliers / complements with lock-in; Reputation and relationships; Organizational capabilities; Product features and know-how)
  • Other benefits of scale (Spreading Fixed costs, Change in technology, Bragaining power)

However, if it is the questions on creativity in the middle of the case as the question on creativity I would use the following framework:

Organic growth

  • Vertical integration
  • Horizontal integration

Non-organic growth

  • Existing product (Value proposition, price, volume, Revenue models (one-time payment, subscription), Channels (Online, offline), etc)
  • New markets / New segments (Geographical markets. Types of customers: B2B, B2C, B2G, etc. E.g. Female magazine may sell magazines to customers and advertising services to business)
  • New products (Product mix - you may have multiple products and variation of products. Think of breadth (e.g. collection size in fashion) and depth (e.g. sizes and colors of dress) of your product line. Croselling opportunities - e.g. selling accessories)

Best!

Hi,

The problem with your 2nd structure is that it is more solution oriented and you have no chance to ask questions. So its more important when the question is being asked:

  • In the beginning of the case as the main objective
  • In the middle of the case as a question on creativity

In the beginning of the case I would use the following broad structure:

Analyze the market:

  • Size and growth rates
  • Segments (geographical, customer, product)
  • Distributors / Suppliers
  • Regulation
  • Key market trends

Analyze the competitors:

  • Market shares, growth rates, profits
  • Product / customer / geographical mix
  • Products (Value proposition)
  • Unit economics (Value proposition vs. price vs. costs)
  • Key capabilities (Distribution, supply, assets, knowledge, etc)

Analyze our company:

  • Market share, growth rates, profit
  • Product / customer / geographical mix
  • Products (Value proposition)
  • Unit economics (Value proposition vs. price vs. costs)
  • Key capabilities (Distribution, supply, assets, knowledge, etc)

How to increase revenues:

  • How to increase the scope: Product / customer scope, geographical scope
  • How to improve value proposition (How to fix your weaknesses and improve your strengths; Potential increase in price and volumes)
  • How to answer the competitors (Unique or hard to build property and contracts; Customers / suppliers / complements with lock-in; Reputation and relationships; Organizational capabilities; Product features and know-how)
  • Other benefits of scale (Spreading Fixed costs, Change in technology, Bragaining power)

However, if it is the questions on creativity in the middle of the case as the question on creativity I would use the following framework:

Organic growth

  • Vertical integration
  • Horizontal integration

Non-organic growth

  • Existing product (Value proposition, price, volume, Revenue models (one-time payment, subscription), Channels (Online, offline), etc)
  • New markets / New segments (Geographical markets. Types of customers: B2B, B2C, B2G, etc. E.g. Female magazine may sell magazines to customers and advertising services to business)
  • New products (Product mix - you may have multiple products and variation of products. Think of breadth (e.g. collection size in fashion) and depth (e.g. sizes and colors of dress) of your product line. Croselling opportunities - e.g. selling accessories)

Best!

. — Gi on Oct 16, 2018 (edited)

. — Gi on Oct 16, 2018 (edited)

Hi Vlad, unless mistaken you mixed-up organic and inorganic, organic being the the things you can do internally, and inorganic being acquisitions? — Gi on Oct 16, 2018

Normally you should test these frameworks to see which one do you feel more comfortable with, or more efficient.

To me, I don't really like your 2nd approach. You have 7 strategiess: 1. New market 2. Improve distribution channel 3.New / improve products 4. Change price 5. Improve marketing & sales 6. M&A 7. JV.

This is a lot, and it isn't MECE as well, probably there are more ways to grow. But the big question is How would you really start/prioritize the case after saying this framework? My hypothesis that you'll based on your real experiences about different industries and prioritize the 7 strats differently. But I think industry experiences aren't valued in case interview.

I would prefer gathering datas first, then based on that create hypothesises. For the growth case, I prefer identifying the potential sources of growth before thinking about potential ways to grow.

Let me try combining your two mentioned frameworks into one.

In order to help the client grow the revenue by X% in Y years, I would like to look at:
1. Customer 2. Product 3. Company 4. Competition

1. Customer:
I would first want to have more insights about the customers by looking at. a. Who are they and what are their preferences? b. How big each customer groups are in term of revenue potential and their potential growth? and c. Our market shares in each customer group.

My goal in analyzing the customers is to figure out if we can a identify a new fast growing customer segment (1.New market), or if the growth is not very attractive, we can try growing in the segment that our client have the least share in (This can be 2. improve distribution, 5. improve marketing, or improve blah blah...)

2. Product
In term of the product, I would like to consider: a. Existing proucts b. New products.
For existing products, I want to understand 1. characteristics 2. pricing 3. marketing 4. distribution 5. compare all that with customer preferences to see is there any opportunity for us to grow existing products by either selling it to existing customers or potential new customers.

3. Competition
a. Competitor in diferent segments (share, strength, weakness, their reaction)
b. Potential M&A opportunities

4. Company
a. Capacity & operation. (Is our growth surpressed by capacity & operation constraints? Do we have the required capacity for growth?...)
b. Cost structure (What is our current cost structure? Can we reduce the price to improve revenue?...)

Normally you should test these frameworks to see which one do you feel more comfortable with, or more efficient.

To me, I don't really like your 2nd approach. You have 7 strategiess: 1. New market 2. Improve distribution channel 3.New / improve products 4. Change price 5. Improve marketing & sales 6. M&A 7. JV.

This is a lot, and it isn't MECE as well, probably there are more ways to grow. But the big question is How would you really start/prioritize the case after saying this framework? My hypothesis that you'll based on your real experiences about different industries and prioritize the 7 strats differently. But I think industry experiences aren't valued in case interview.

I would prefer gathering datas first, then based on that create hypothesises. For the growth case, I prefer identifying the potential sources of growth before thinking about potential ways to grow.

Let me try combining your two mentioned frameworks into one.

In order to help the client grow the revenue by X% in Y years, I would like to look at:
1. Customer 2. Product 3. Company 4. Competition

1. Customer:
I would first want to have more insights about the customers by looking at. a. Who are they and what are their preferences? b. How big each customer groups are in term of revenue potential and their potential growth? and c. Our market shares in each customer group.

My goal in analyzing the customers is to figure out if we can a identify a new fast growing customer segment (1.New market), or if the growth is not very attractive, we can try growing in the segment that our client have the least share in (This can be 2. improve distribution, 5. improve marketing, or improve blah blah...)

2. Product
In term of the product, I would like to consider: a. Existing proucts b. New products.
For existing products, I want to understand 1. characteristics 2. pricing 3. marketing 4. distribution 5. compare all that with customer preferences to see is there any opportunity for us to grow existing products by either selling it to existing customers or potential new customers.

3. Competition
a. Competitor in diferent segments (share, strength, weakness, their reaction)
b. Potential M&A opportunities

4. Company
a. Capacity & operation. (Is our growth surpressed by capacity & operation constraints? Do we have the required capacity for growth?...)
b. Cost structure (What is our current cost structure? Can we reduce the price to improve revenue?...)

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