©2014MConsultingPrep,Inc.CaseInterviewFrameworksDictionaryPLEASEGOONTOTHENEXTPAGE2COMPLETEFRAMEWORKS1.ProfitabilityFrameworkBestforprofit-relatedcasesGiventhatprofitisdefinedasRevenue–Costs,wehaveaprofitabilityframeworkasfollows:RevenuePriceperunitNo.ofunitssoldCostsFixedCostVariableCostNote:Therecanbevariouswaystobreakrevenueandcostsintosmallerpieces:Revenuecanbebrokendownbasedondemographic,location,orproductline,etc.Costscanbesplitintocomponentssuchasoverhead,salary,rental,etc.CaseInterviewFrameworksDictionaryPLEASEGOONTOTHENEXTPAGE32.3C&PBestforcaseslikenewbusiness,newproduct,newmarketentry,growthstrategy,andcompanyassessmentCustomers:oHowareyourcustomerssegmented?oWhatareyourtargetcustomers?oWhatarethecustomers’needsandwants?CompanyoWhatareyourcompany’scapabilitiesandexpertise?oWhatisthecompany’sbrandandculture?oHowisitsfinancialsituation?CompetitionoWhatisthemarketshareandgrowthpotentialofeachcompetitor?oHowhavethecompetitorsperformed?ProductoWhatisthenatureofyourproductsorservices?oDotheymeettheneedsandwantsofthecustomers?oWhatarethecomplementarygoodsandthesubstitutes?Note:Thequestionsundereachsectiononlydealwithsomebasicaspectsoftheframework.Inactualcaseinterviews,therecanbemanyotherthingsinvolveddependingonthecontextgivenandthecaseobjective.CaseInterviewFrameworksDictionaryPLEASEGOONTOTHENEXTPAGE43.4PBestformarketingcasesProduct:oWhatdoyourcustomersneedandwantfromyourproductorservice?oWhatfeaturesdoesithavetomeettheseneedsandwants?oHowisitdifferentiatedversusthecompetitors?Place:oWheredothecustomerslookforyourproductorservice?oHowcanyouaccesstherightdistributionchannels?oHowdoyourcompetitorsdistributetheirproducts?Promotion:oWhereandwhenyoucangetacrossyourmarketingmessagestoyourtargetmarket?oHowdoyourcompetitorsdotheirpromotions?Price:oWhatisthevalueoftheproductorservicetothecustomers?oArethereestablishedpricepointsinthisarea?oArethecustomersprice-sensitive?oHowisyourpricecomparedtoyourcompetitors’?Note:Thequestionsundereachsectiononlydealwithsomebasicaspectsoftheframework.Inactualcaseinterviews,therecanbemanyotherthingsinvolveddependingonthecontextgivenandthecaseobjective.CaseInterviewFrameworksDictionaryPLEASEGOONTOTHENEXTPAGE54.M&AMcKinseyBestforMerge&AcquisitioncasesStand-alonevalueofthetargetingcompany:Financialfactors:profitability,growth,cashflow,etc.Non-financialfactors:capabilitiesandexpertise,brandname,etc.Synergyofthetwocompanies:Howarethetwocompaniescombinedbetterthansumofeach(intermsofcustomers,product,distribution,etc.)?Otherfactors:FeasibilityCultureLegalissuesEtc.CaseInterviewFrameworksDictionaryPLEASEGOONTOTHENEXTPAGE65.McKinsey7-SModelBestforcasesofcompanyimprovement,strategyimplementation,alignmentforcompaniesduringchanges(restructuring,newsystems,organizationalmerger,etc.)HardSs:Structure:oHowisyourcompany/teamdivided?oHowdothedifferentdepartmentscoordinateactivities?oHowdotheteammembersorganizeandalignthemselves?Strategy:oHowdoesyourteamintendtoachievetheobjectives?oHowdoesyourteamdealwithmarketchanges?Systems:oWhatarethemainsystemsthatruntheorganization?oWherearethecontrolsandhowaretheymonitoredandevaluated?oWhatinternalrulesandprocessesdoestheteamusetokeepontrack?SoftSs:Style:oHowparticipativeisthemanagement/leadershipstyle?oHoweffectiveisthatleadership?oDoemployees/teammemberstendtobecompetitiveorcooperative?Staffing:oWhatpositionsorspecializationsarerepresentedwithintheteam?oWhatpositionsneedtobefilled?oAretheregapsinrequiredcompetencies?Skills:oWhatarethestrongestskillsrepresentedwithinyourcompany/team?oDothecurrentemployees/teammembershavetheabilitytodothejob?oArethereanyskillsgaps?oHowareskillsmonitoredandassessed?SharedValues:oWhatisthecorporate/teamculture?oWhatarethefundamentalvaluesthatthecompany/teamwasbuilton?oHowstrongarethevalues?CaseInterviewFrameworksDictionaryPLEASEGOONTOTHENEXTPAGE76.Porter’sFiveForcesBestforcasesofnewmarketentry,businessstrategydevelopment,industryanalysisThreatofNewEntrants:Isiteasyordifficulttoenterthemarket?oWhataretimeandcostofentry?oWhatarethebarrierstoenterthemarket?oDoesyourcompanyhaveanyadvantages(costadvantage,economicsofscale,etc.)?oDoesithaveprotectionforitskeytechnologies?ThreatofSubstituteProductsorServices:Doyourcustomersfindsubstituteseasily?oHowaboutthesubstitutes’performance?oWhatistheperceivedlevelofproductdifferentiation?oWhatisthecostofchange?BargainingPowerofSuppliers:Howeasyisitforthesupplierstodriveupprices?oHowmanysuppliersarethere?oWhatisthesizeofeachsupplier?oHowaboutthedifferentiationofinputs?oDoesyourcompanyhaveabilitytosubstitutethesuppliers?BargainingPowerofBuyers:Howeasyisitforthebuyerstodrivepricesdown?oHowmanycustomersarethere?oWhatisthesizeofeachpurchase?oHowisthecustomers’pricesensitivity?oDotheyhaveabilitytosubstitute?RivalryCompetition:Howintenseisthecompetitioninyourmarket?oHowhavethecompetitorsperformed?oDoesyourcompanyhaveanycompetitiveadvantages?