Consulting-Case-Study-101--An-Introduction-to-Fram

    CONSULTINGCASESTUDY101:ANINTRODUCTIONTOFRAMEWORKSofConsultingCaseStudyTrainingBeforewelookatindividualCases,itisimportanttobeginbylookingatanalysisframeworksthatcommonlycanbeusedtoaddressCaseStudyquestions.Inthischapter,wewilloutlinesomeofthecoreframeworksandsomeadditionalConsultingconceptsthatareimportanttograspandwillformpartofmanyinterviews.Theframeworkswillbehelpfultoanswercertaintypesofcases,dependingonthetypeofcase.Inreality,fewcaseinterviewsorreal-lifebusinesssituationscoverjustoneconceptorbusinessproblem,soyouhavetohavetheflexibilitytoapplyarangeofconcepts/structures.Forexample,aCompanybringinganewproducttomarketwouldrequireamarketsizeanalysis,competitoranalysis,aswellasunderstandingthekeycustomersegments.Themoreyoupractice,theeasierthecaseswillbecomeandthemorearticulateandstructuredyou’llbeinyouranswers.Animportantnoteonthis:historically,thevastmajorityofConsultingcandidateshaveusedspecificbusinessframeworkstoanswercases.FrameworksremainimportantasconceptstoanswerCaseStudies,butyoushouldabsolutelyavoidanyrigiduseofaspecificframework.Inreality,themainpurposeof    learningtheframeworksistohelpyoutostructureyouranswers,justasthecasesituationsinourlaterexamplesshoulddo.ThekeyframeworksthatfollowshouldbeuseddirectlyincertainCasesituations,butmorebroadlytheyshouldbeusedasawaytoexpandyourstrategicthinking,whichisthecriticalcomponentofsuccessintheCaseStudyinterviewprocess.Ultimately,atop-flightcandidatewillbuildhisorherownframework/structureforevaluatingtheCaseasitprogresses,oftendrawingfrommanyoftheframeworksandconceptsinthismodule,andpotentiallyothers.Inotherwords,youshouldabsolutelyavoidusingthephrase,“IwillapplyframeworkXtothiscase.”However,beawareofthe“famous”frameworksincasetheyarementionedinaninterviewsetting,anddon’tbeshyaboutreferencingthemasyoudiveintothespecificsoftheCaseStudyyou’reevaluating.Porter’sFiveForcesPorter’sFiveForceshasbecomeanincrediblywellknownframeworkinthebusinessstrategyworld.Itisprobablythemostfamousofallofthem.ItwasintroducedbyHarvardProfessorandMonitorConsultingfirmfounderMichaelPorter.Porter’sFiveForcesisahigh-levelframeworkthatyoucandrawupontoperformamarketlandscapeandcompetitordynamicsanalysis.Itcanhelpdeterminewhetheramarketorcompanyisattractive,whethertheclientforwhomtheanalysisisbeingperformedisaprivateequityfirmthinkingaboutbuyingacompany,oramajorcompanythinkingaboutenteringorexitingacertainmarketsegment.Inmostcases,aCaseStudywilladdressatleastsomeofthecomponentsfoundinthisframework.    HerearetheFiveForcesindetail:PORTER’SFIVEFORCES1.ThreatofNewEntrants(effectively,thisis“BarrierstoEntry”)a.Legalorregulatorybarriers(forexample,patentsorgovernmentcontracts)b.Economiesofscalec.Costadvantage(forexample,uniqueaccesstolowerrawmaterialcosts)d.Accesstodistributionchannelse.Productdifferentiation(forexample,howisthisproductdifferent?)2.CompetitiveDynamicsa.Industrygrowthrateb.Industryfragmentationc.Levelofswitchingcostsd.Motivationtoreduceprices(forexample,fromexcesscapacity)3.SupplierPowera.Levelofsubstituteproductsb.Buyer’sdecisioninfluencedbysupplierc.Supplierinputs/productshavehighswitchingcostsd.Supplierhaspotentialtoforwardintegratee.Supplieraccountsforlargeshareoftheinputs/products4.BuyerPowera.Highcustomer/clientconcentrationb.Levelofcommoditizationofproduct/inputc.Levelofswitchingcostsforbuyer    d.Buyerhassignificantproduct/marketinformation5.ThreatofSubstitutesa.Substituteproducts/servicesthatcancompeteonpriceand/orqualityb.SwitchingcoststoshifttosubstituteproductsThe3CsThissimpleframeworkhasbeenaroundforalongtimeasawaytothinkaboutanyindustryorcompany,andappliesbroadlytoawiderangeofCaseStudyquestions.IfyoucomparethedescriptionbelowtothatofPorter’sFiveForcesabove,youwillseethatthereissubstantialoverlap.The“3Cs”approachistoaddressanyCasesituationbyassessingthe:1.Company2.Competitors3.Customers/clientsTHE3C’S1.Company:thefirstCisaboutunderstandingtheoperationsoftheCompanyitselfandhowtheCompanymakesmoney.oProduct/serviceoffering§Prosandconsofproduct/service§ValuechainoProfitabilityanalysis§Revenue(price×volume)andexpensesoOtherCompanyfactors    §Capacity§Corecompetencies§Regulatoryenvironment§Distributionnetwork§Managementandcoreemployees§Other2.Competition:thesecondCisaboutunderstandinghowthecompetitorsimpactyourclientandhowthecompetitivedynamicswillchangeovertime.oCompetitormix/make-up§Marketshare§Fragmentation§Financialsituation(forexample,deeppocketcompetitors?)§Management§Othercompetencies(forexample,marketingordistributionchannels)oCompetitorproducts/services§Valuepropositionversusclient§Valuechain3.Customers/Clients:thethirdCisoftenoverlookedbutisfundamental,andconsistsofknowingyourclients/customers.Alwaysaskforavailablecustomerinformation,asknowingwhatyourcustomerwants/needsisimportanttowinninginbusiness.oCustomermix§Demographics(age,gender,etc.)§Valueofcorecustomers/clients§Wantsandneedsofcustomers/clientsoPositionwithcustomer/clientsegments§Customer/clientsegmentsizes    §Customer/clientsegmentshares§Customer/clientsegmentgrowthrateo