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Former Accenture
The 3 C’s, the 4 P’s – using business frameworks to crack a case can feel as muddled as alphabet soup. Walk through the Business Situation Framework step-by-step with us in this case example. We’ll make using this framework crystal clear.
In this article, we’ll:
Let’s get started!
A business framework is a structured way of thinking about a business problem so that you can solve it.
The Business Situation Framework helps with analyzing a business’s current situation to improve its performance. The 4 components of analysis in this framework are:
The Business Situation Framework was derived from a classic framework developed by Kenichi Ohmae, a Japanese organizational theorist. Ohmae believed that — to be successful — business strategy should concentrate on the customer, the competitors, and the company. The Business Situation Framework simply adds product onto this model.
The Business Situation Framework is most useful when exploiting a business opportunity such as scaling the existing business, entering a new market, or developing a new product.
So if your consulting case is about any of these areas, it makes sense to take these factors into consideration.
Let’s quickly look at each factor in more detail.
Nail the case & fit interview with strategies from former MBB Interviewers that have helped 85% of our clients pass the case interview.
In this part of the analysis, you want to get really clear about who is the customer and what exactly they want.
You’ll need to consider demographics, market segments (groups of customers with similar likes), what influences their buying decisions, and trends in segment growth.
You’ll also need to understand the customer needs your product could satisfy and how much they’d be willing to pay.
Next, you’ll need to consider business competitors.
In this part of the analysis, examine what features the product should have to meet customer requirements, its unique selling point, and how it should be branded, priced, and distributed.
Finally, you need to analyze the company itself.
Let’s move on to the bit you really care about — how to apply the Business Situation Framework during a consulting case interview.
Consider this problem statement from the UCLA Anderson School of Management’s case book:
There are 3 key elements you need to answer in this question:
Using the business situation framework gives us issues to consider.
In case interviews you may not be initially given all the information you need to solve the case. Asking your interviewer logical questions will get you more information.
In this case, when you ask your interviewer questions from the ‘Competition’ element of the model — “What is the size and breakdown of the flavored water market?”, and “How much market share do our main competitors hold?”— you’ll be provided with the following information.
From these charts it’s clear to see that the non-sparkling water category represents just a small amount of the overall market.
Within that category, there are 2 main competitors with a large amount of the market share captured by multiple, smaller competitors.
This provides an opportunity for the client to capture market share from smaller competitors and become a 3rd large competitor in this category.
Once you’ve grasped the current market situation you need to estimate the size of the opportunity for the client to decide whether it’s worth pursuing. Here comes the math!
The market share of non-sparkling flavored water is 10% of the total market for flavored water so there are:
Each drink is packaged in 16oz bottles and there are 128 oz in a gallon:
800,000 gallons are sold each year therefore:
Each bottle costs, on average, $1 a bottle therefore:
The information above suggests there’s a potential opportunity for the client so now you should consider costs and potential risks before offering your conclusion.
For example, how long would it take to break-even should the client launch a new product?
Let’s assume the following:
$400,000 investment /10 cents profit per bottle = 4 million bottles need to be sold to break-even.
To work out the number of years it will take to break even, you need to make an assumption about % of market share the client could capture. This assumption should be backed up by a logical argument.
For example:
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Given this information and any other risks identified — such as changing customer preferences and competitive response to our client’s entry into the market — you should recommend that the client launch the product but put in place a marketing plan to exceed 15% market share and get the payback period down.
In deciding how to launch the product, you should focus on:
Using the ‘Customer’ questions in the Business Situation Framework, you should consider consumer trends and how other competitors are marketing to them. When you ask your interviewer for information on this, you’ll get the following information:
From this you should identify the following insights before offering your final recommendation:
Hopefully, you’re now crystal clear on how using the Business Situation Framework can help you solve a case interview question. Read our article on other case interview frameworks to find more tools to help you solve your consulting case interviews. This article also discusses making your own tailored case framework, which will set you apart from other candidates.
Our article on case interview examples provides links to tons of case interview questions you can use to practice.
In this article, we’ve covered:
If you have more questions about the Business Situation Framework, leave them in the comments below. One of My Consulting Offer’s case coaches will answer them.
Other people prepping for consulting case interviews found the following pages helpful:
Thanks for turning to My Consulting Offer for advice on case study interview prep. My Consulting Offer has helped almost 85% of the people we’ve worked with to get a job in management consulting. We want you to be successful in your consulting interviews too. For example, here is how Matt was able to get his offer from BCG.
Nail the case & fit interview with strategies from former MBB Interviewers that have helped 85% of our clients pass the case interview.
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