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Flashcards in Frameworks Deck (16):
1

Profitability Framework

Revenue
 Price per unit
 No. of units sold

Costs
 Fixed Cost
 Variable Cost

2

3C and P

Customers Company Competition Product

Customers:
o How are your customers segmented?
o What are your target customers?
o What are the customers’ needs and wants?

Company
o What are your company’s capabilities and expertise? o What is the company’s brand and culture?
o How is its financial situation?

Competition
o What is the market share and growth potential of each competitor?
o How have the competitors performed?

Product
o What is the nature of your products or services?
o Do they meet the needs and wants of the customers?
o What are the complementary goods and the substitutes?

Best for cases like new business, new product, new market entry, growth strategy, and company assessment

3

4P

Product Place Promotion Price

Product:
o What do your customers need and want from your product or service? o What features does it have to meet these needs and wants?
o How is it differentiated versus the competitors?

Place:
o Where do the customers look for your product or service? o How can you access the right distribution channels?
o How do your competitors distribute their products?

Promotion:
o Where and when you can get across your marketing messages to your target market?
o How do your competitors do their promotions?

Price:
o What is the value of the product or service to the customers? o Are there established price points in this area?
o Are the customers price-sensitive?
o How is your price compared to your competitors’?

Best for marketing cases

4

M and A McKinsey

Stand-alone value of the targeting company:
 Financial factors: profitability, growth, cash flow, etc.
 Non-financial factors: capabilities and expertise, brand name, etc.

Synergy of the two companies:
How are the two companies combined better than sum of each (in terms of customers, product, distribution, etc.)?

Other factors:
 Feasibility
 Culture
 Legal issues
 Etc.

Best for Merge & Acquisition cases

5

McKinsey 7-S Model

Structure Strategy Systems
Style Staffing Skills Shared Values

Hard Ss:
 Structure:
o How is your company/team divided?
o How do the different departments coordinate activities?
o How do the team members organize and align themselves?
 Strategy:
o How does your team intend to achieve the objectives?
o How does your team deal with market changes?
 Systems:
o What are the main systems that run the organization?
o Where are the controls and how are they monitored and evaluated?
o What internal rules and processes does the team use to keep on track?

Soft Ss:
 Style:
o How participative is the management/leadership style?
o How effective is that leadership?
o Do employees/team members tend to be competitive or cooperative?
 Staffing:
o What positions or specializations are represented within the team?
o What positions need to be filled?
o Are there gaps in required competencies?
 Skills:
o What are the strongest skills represented within your company/team?
o Do the current employees/team members have the ability to do the job? o Are there any skills gaps? o How are skills monitored and assessed?
 Shared Values:
o What is the corporate/team culture?
o What are the fundamental values that the company/team was built on?
o How strong are the values?

Best for cases of company improvement, strategy implementation, alignment for companies during changes (restructuring, new systems, organizational merger, etc.)

6

Porter’s Five Forces

Threat of New Entrants:
Is it easy or difficult to enter the market?
o What are time and cost of entry?
o What are the barriers to enter the market?
o Does your company have any advantages (cost advantage, economics of scale, etc.)?
o Does it have protection for its key technologies?

Threat of Substitute Products or Services:
Do your customers find substitutes easily?
o How about the substitutes’ performance?
o What is the perceived level of product differentiation?
o What is the cost of change?

Bargaining Power of Suppliers:
How easy is it for the suppliers to drive up prices?
o How many suppliers are there?
o What is the size of each supplier?
o How about the differentiation of inputs?
o Does your company have ability to substitute the suppliers?

Bargaining Power of Buyers:
How easy is it for the buyers to drive prices down?
o How many customers are there?
o What is the size of each purchase?
o How is the customers’ price sensitivity?
o Do they have ability to substitute?


Rivalry Competition:
How intense is the competition in your market?
o How have the competitors performed?
o Does your company have any competitive advantages?
o Etc.

Best for cases of new market entry, business strategy development, industry analysis

7

STP

Segmenting Targeting Positioning

Segmenting:
o What are your customers’ segments?
o What are important characteristics of each market segment?

Targeting:
o What is the potential of each segment?
o Which segment(s) should your company focus on?

Positioning:
o Which marketing mix should be used for the selected segment(s)?

Best for market research cases

8

SWOT

Strengths Weaknesses Opportunities Threats

Strengths: What are the characteristics that give your organization an advantage over others?

Weaknesses: What are the characteristics that place your organization at a disadvantage relative to others?

Opportunities: What are the opportunities or favorable trends in the market?

Threats: What are the elements in the environment that could cause trouble for the business or project?

Best for cases of new business, new product, new trends and changes, strategic planning

9

Value Chain framework

Inbound Logistics:
These are all the processes related to receiving, storing, and distributing inputs internally

Operations:
These are the transformation activities that change inputs into finished products and services

Outbound Logistics:
These activities deliver your finished product or service to your customer

Marketing and Sales:
These are the processes you use to persuade clients to purchase from you instead of your competitors

Service:
These are the activities related to maintaining the value of your product or service to your customers, once it has been purchased

Note: The above framework is just a typical value chain for general cases. For each actual case, the value chain can vary a lot depending on each specific industry. For example, value chain of the cement industry would be: Limestone – Clinker – Cement – Concrete – Construction.

Best for cases of product analysis, cost analysis, competitive advantage, management strategy

10

Supply and Demand framework

Supply:
o What is the quantity of a product or service desired by buyers?
o Is supply increasing, decreasing, or unchanged?
o How do you segment suppliers?

Demand:
o What is the quantity of a product or service that people are willing to buy?
o Is demand increasing, decreasing, or unchanged?
o How do you segment buyers?

Best for cases of market research, market entry, price setting

11

Internal and External

Best for starting a case for instant structure
 Internal factors: company, product, etc.
 External factors: industry, competition, etc.

12

Qualitative & Quantitative

Best for starting a case for instant structure and for structuring reasons and evaluations
 Quantitative factors: factors that are quantified in numbers such as unit sales, number of stores, etc.
 Qualitative factors: intangibles factors such as brand name, environmental factors, etc.

13

Cost and Benefit framework

Best for decision making process
 Costs: what you have to spend on
 Benefits: what you can achieve

14

BCG 2x2

Best for identifying product development opportunities

on x-axis: Market share -> low-high
on y-axis: Market growth -> low-high
1-4 quadrants -> stars; question marks; dogs; cash cows.

15

E(P=R-C)M

External Profitability(Revenues-Costs) Market

16

BCG demonstration

Wine brand needs increase in profit, change in portfolio

Revenue: price, volume, elasticity
Cost: fx, var
Product: mix, kind, brand perception, ladder, trends, competitor
Market: overall trend, competition, market share