Frameworks Flashcards
(18 cards)
Market sizing framework step 1
Ask Clarification questions
Market sizing framework step 2
Map out your calculations (e.g. with an issue tree)
Market sizing framework step 3
Round numbers and calculate (always pick simple numbers)
Market sizing framework step 4
Sense-check your results
Step 1 of the Replacement Concept
Calculate the quantity of the product REPLACED annually by using the lifetime of the product.
Step 2 of the Replacement Concept
You also need to take into account the growth of the market
Step 3 of the Replacement Concept
Combine both numbers for the total annual market size (replacement and growth numbers)
Categories for ‘picking an easy segmentation’
- Product/Service types (e.g. Uber vs Black Cab)
- Different ways that product/service will be used (Airport journeys vs London Journeys vs inter-city journeys)
- Customer types (segmented by age)
Common lists to be MECE
- Products
- Countries
- Business entities (e.g. suppliers, clients, competitors, regulator, company itself)
- Distribution channels (retail stores, restauarants, wholesalers, etc)
The 8 steps to break down a Case Interview
- The Background
- The Recap (back to them)
- The case and objective clarification (clarifying Qs)
- The grand pause (2 mins)
- The Game Plan (explaining thought process)
- Creative Questions
- Quantitative questions
- Case summary and next steps
The two types of market sizing exercises
- Top down (uses a population approach, then pares it down to a smaller issue)
- Bottom up (a channel of distribution - how much of something is sold in a day. This is then rolled up to annual and county-wide numbers).
Profitability Framework (the two elements of it)
- Revenue side of equation (break down revenues into prices and volumes)
- Cost side of equation: fixed costs and variable costs
Difference between fixed and variable costs
- Variable costs vary based on the amount of output produced.
- Variable costs may include labor, commissions, and raw materials.
- Fixed costs remain the same regardless of production output. - Fixed costs may include lease and rental payments, insurance, and interest payments.
Further things to consider for a profitability question (basically, think about all the elements of profitability)
i. What changes prices
ii. What changes volumes
iii. What affects fixed costs
iv. What drives variable costs in a business
Market Study framework (flip of profitability framework) - the two sides of it
- External side*:
- Market, competitors and customers
- Internal side*
- Company + product/service (this addresses the fixed costs associated with the company
The four-point framework for mergers and acquisitions
- Market - is it attractive
- Company - is our company picking the right company to merge with or acquire (look at operating revenues and profits)
- Post-acquisition strategy (how are you going to make money than you purchased the original company for)
- Risks and benefits (valuing intangible assets)
Business Situation Framework (Four factors)
CCCP
- Customer (identify segments, and their willingness to pay)
- Product (complimentary goods, substitutes, product lifecycle, razer blade model)
- Company (capabilites and expertise, distribution channels, intangibles like brand loyalty)
- Competition (monopoly/oligopoly, barriers to entry, supplier concentration, industry regulatory environment)
Trending topics to try and fit in
#Artificial Intelligence (human-machine collaboration) #Digital (harnessing technology to drive value) #Data Analytics (predictive) #Design Thinking (learning from the creative) #Sustainability (planet is in tears)
