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Consulting Case Study 101: An Introduction to Frameworks | Street Of Walls

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Consulting case
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  STREET OF  WALLS Update: Find a job you love at Vettery  CONSULTING CASE STUDY 101: ANINTRODUCTION TO FRAMEWORKS of Consulting Case Study TrainingBefore we look at individual Cases, it is important to begin by looking at analysis frameworks thatcommonly can be used to address Case Study questions. In this chapter, we will outline some of thecore frameworks and some additional Consulting concepts that are important to grasp and will formpart of many interviews. The frameworks will be helpful to answer certain types of cases, dependingon the type of case. In reality, few case interviews or real-life business situations cover just oneconcept 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 amarket 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 usedspecific business frameworks to answer cases. Frameworks remain important as concepts to answerCase Studies, but you should absolutely avoid any rigid use of a specific framework . In reality, the main purpose  of learning the frameworks is to help you to structure your answers , just as the casesituations 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 herown framework/structure for evaluating the Case as it progresses,  often drawing from many of theframeworks 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 aboutreferencing them as you dive into the specifics of the Case Study you’re evaluating.  Porter’s Five Forces  ARTICLESTRAINING  Porter’s Five Forces has become an incredibly well known framework in the business strategy world.It is probably the most famous of all of them. It was introduced by Harvard Professor and MonitorConsulting firm founder Michael Porter. Porter’s Five Forces is a high-level framework that you candraw upon to perform a market landscape and competitor dynamics analysis. It can help determine whether a market or company is attractive, whether the client for whom the analysis is beingperformed is a private equity firm thinking about buying a company, or a major company thinkingabout entering or exiting a certain market segment. In most cases, a Case Study will address at leastsome of the components found in this framework.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 scalec. Cost advantage (for example, unique access to lower raw material costs)d. Access to distribution channelse. Product differentiation (for example, how is this product different?)2. Competitive Dynamicsa. Industry growth rate b. Industry fragmentationc. Level of switching costsd. Motivation to reduce prices (for example, from excess capacity)3. Supplier Powera. Level of substitute products b. Buyer’s decision influenced by supplierc. Supplier inputs/products have high switching costsd. Supplier has potential to forward integratee. Supplier accounts for large share of the inputs/products4. Buyer Powera. High customer/client concentration   b. Level of commoditization of product/inputc. Level of switching costs for buyerd. Buyer has significant product/market information5. Threat of Substitutesa. Substitute products/services that can compete on price and/or quality  b. Switching costs to shift to substitute products The 3 Cs This simple framework has been around for a long time as a way to think about any industry orcompany, and applies broadly to a wide range of Case Study questions. If you compare thedescription 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. Competitors3. Customers/clients THE 3 C’S 1. Company: the first C is about understanding the operations of the Company itself and how the Company makes money.Product/service offeringPros and cons of product/service Value chainProfitability analysisRevenue (price !  volume) and expensesOther Company factorsCapacity Core competenciesRegulatory environmentDistribution network Management and core employeesOther  2. Competition: the second C is about understanding how the competitors impact your clientand how the competitive dynamics will change over time.Competitor mix/make-upMarket shareFragmentationFinancial situation (for example, deep pocket competitors?)ManagementOther competencies (for example, marketing or distribution channels)Competitor products/services Value proposition versus client Value chain3. Customers/Clients: the third C is often overlooked but is fundamental, and consists of knowing your clients/customers. Always ask for available customer information, as knowing what your customer wants/needs is important to winning in business.Customer mixDemographics (age, gender, etc.) Value of core customers/clients Wants and needs of customers/clientsPosition with customer/client segmentsCustomer/client segment sizesCustomer/client segment sharesCustomer/client segment growth rateKey drivers of customer/client decisionsPriceProduct characteristicsBrandPersonnel (especially for B2B) The 4 Ps This framework is often used specifically whenever there is a marketing component   involved in acase (for example: how to increase sales resulting from any profitability optimization case, decidingon an approach to enter a market, etc.). When combined with the 3 Cs, this framework can covermany topics and as you practice more Case Study questions, you’ll develop a better sense of whenand how to draw from these frameworks.
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