Consulting Case Study 101- An Introduction to Frameworks

The 3 Cs
This simple framework has been around for a long time as a way to think about any industry or company, and applies broadly to a wide range of Case Study questions. If you compare the description below to that of Porter’s Five Forces above, you will see that there is substantial overlap. The “3 Cs” approach is to address any Case situation by assessing the: 1. Company 2. Competitors 3. Customers/clients
d. Buyer has significant product/market information 5. Threat of Substitutes a. Substitute products/services that can compete on price and/or quality b. Switching costs to shift to substitute products
Here are the Five Forces in detail:
PORTER’S FIVE FORCES
1. Threat of New Entrants (effectively, this is “Barriers to Entry”) a. Legal or regulatory barriers (for example, patents or government contracts) b. Economies of scale c. Cost advantage (for example, unique access to lower raw material costs) d. Access to distribution channels e. Product differentiation (for example, how is this product different?) 2. Competitive Dynamics a. Industry growth rate b. Industry fragmentation c. Level of switching costs d. Motivation to reduce prices (for example, from excess capacity) 3. Supplier Power a. Level of substitute products b. Buyer’s decision influenced by supplier c. Supplier inputs/products have high switching costs d. Supplier has potential to forward integrate e. Supplier accounts for large share of the inputs/products 4. Buyer Power a. High customer/client concentration b. Level of commoditization of product/input c. Level of switching costs for buyer
learning the frameworks is to help you to structure your answers, just as the case situations in our later examples should do. The key frameworks that follow should be used directly in certain Case situations, but more broadly they should be used as a way to expand your strategic thinking, which is the critical component of success in the Case Study interview process. Ultimately, a top-flight candidate will build his or her own framework/structure for evaluating the Case as it progresses, often drawing from many of the frameworks and concepts in this module, and potentially others. In other words, you should absolutely avoid using the phrase, “I will apply framework X to this case.” However, be aware of the “famous” frameworks in case they are mentioned in an interview setting, and don’t be shy about referencing them as you dive into the specifics of the Case Study you’re evaluating.
THE 3 C’S
1. Company: the first C is about understanding the operations of the Company itself and how the Company makes money.vice offering Pros and cons of product/service Value chain Profitability analysis Revenue (price × volume) and expenses Other Company factors
§ § § § § §
Capacity Core competencies Regulatory environment Distribution network Management and core employees Other
2. Competition: the second C is about understanding how the competitors impact your client and how the competitive dynamics will change over time.
CONSULTING CASE STUDY 101: AN INTRODUCTION TO FRAMEWORKS
of Consulting Case Study Training
Before we look at individual Cases, it is important to begin by looking at analysis frameworks that commonly can be used to address Case Study questions. In this chapter, we will outline some of the core frameworks and some additional Consulting concepts that are important to grasp and will form part of many interviews. The frameworks will be helpful to answer certain types of cases, depending on the type of case. In reality, few case interviews or real-life business situations cover just one concept or business problem, so you have to have the flexibility to apply a range of concepts/structures. For example, a Company bringing a new product to market would require a market size analysis, competitor analysis, as well as understanding the key customer segments. The more you practice, the easier the cases will become and the more articulate and structured you’ll be in your answers. An important note on this: historically, the vast majority of Consulting candidates have used specific business frameworks to answer cases. Frameworks remain important as concepts to answer Case Studies, but you should absolutely avoid any rigid use of a specific framework. In reality, the main purpose of
Porter’s Five Forces