Popular Frameworks for Structuring Consulting Cases

Introduction

Three decades ago, the adoption of case frameworks gained momentum, thanks to the
influential book "Case in Point." Another publication, "Case Interview Secret," took it a step
further by proposing that a universal, “one-size-fits-all” framework could tackle most consulting
cases.
Unfortunately, candidates who lean solely on these resources find themselves on the wrong
track. Leading consulting firms are increasingly posing unconventional case questions that don't
neatly fit into generic frameworks. Instead, candidates must showcase their ability to adeptly
structure a case, rather than relying on the standard framework alone.
Though it is wise to remember these frameworks as a starting point of reference, it should not
supposed to be memorized and put-it forth as it is in the case studies.
Here are the top five frameworks that candidates should familiarize themselves with:

Profitability equation

This framework is so important in any case as there is a high probability that a profitability
problem pops up in between the case interviews

Profit = Revenue - Costs

Where:

Profit represents the financial gain or net income generated by a business.

Revenue refers to the total income generated from sales of products or services. It is typically
calculated as the quantity sold multiplied by the price of the product or service.

Costs include all the expenses incurred in producing and delivering the products or services.
Costs can be further categorized into fixed costs (which remain constant regardless of the level
of production) and variable costs (which vary with production levels).
To get into deeper on this concept, it can be put this way:

Revenue Analysis:
Volume (Quantity Sold): Assess the current sales volume and any potential for growth in the
customer base or market share.
Pricing Strategy: Analyze the current pricing strategy and explore the possibility of price
increases without negatively affecting demand.
Product Mix: Consider the mix of products or services being offered and their respective profit
margins.
Market Segmentation: Evaluate different customer segments and their varying contributions to
revenue.
Cost Analysis:
Fixed Costs: Identify and examine fixed costs, such as rent, salaries, and insurance, which
remain constant regardless of production levels.
Variable Costs: Analyze variable costs, like raw materials, labor, and distribution expenses,
which vary with production or sales volume.
Economies of Scale: Investigate whether there are opportunities to reduce variable costs
through economies of scale with increased production.
Cost Reduction Strategies: Explore potential cost-cutting measure
Break-Even Analysis: Calculate the break-even point where total res without compromising
product or service quality.evenue equals total costs.
Profit Margin analysis:
Gross Profit Margin: Calculate the gross profit margin by subtracting the cost of goods sold
(COGS) from revenue. This measures the profitability of the core product or service.
Operating Profit Margin: Further deduct operating expenses (excluding interest and taxes) to
calculate the operating profit margin.
Net Profit Margin: Subtract interest and taxes to arrive at the net profit margin, representing the
bottom-line profitability.
Sensitivity Analysis:
Assess how changes in key factors, such as sales volume, pricing, or cost structures, impact
profitability. This helps in understanding the sensitivity of the business model.
Competitive Analysis:
Analyse the competitive landscape to identify how the company's profitability compares to
industry benchmarks and competitors.

During case interviews, candidates may be asked to analyse and improve profitability by
identifying ways to increase revenue, reduce costs, or both, based on the specific context of the
case. This equation serves as the foundation for structuring your analysis and making
recommendations to enhance a company's profitability.

Porter’s Five Forces model

In case interviews, Porter's Five Forces Model is often used as a framework to analyse the
competitive dynamics of a specific industry or market. It helps candidates structure their analysis
and understand the competitive environment a company operates in. Here's how Porter's Five
Forces Model can be applied in case interviews:

Threat of New Entrants:

Candidates should assess the barriers to entry for new competitors. These might include capital
requirements, economies of scale, brand loyalty, and regulatory hurdles.
They should discuss how these barriers affect the industry's overall attractiveness and what
strategies existing firms employ to deter new entrants.
Bargaining Power of Suppliers:
Interviewees should investigate the power that suppliers hold over the companies in the
industry. This involves considering factors like the number of suppliers, the uniqueness of their
products or services, and any switching costs.
They should discuss how supplier power impacts costs and potential strategies to mitigate this
influence.
Bargaining Power of Buyers:
Candidates should analyze the influence of customers (buyers) on industry firms. Factors to
examine include the number of buyers, their price sensitivity, and any standardization of
products.
They should discuss how buyer power affects pricing strategies and potential strategies to
manage buyer expectations.
Threat of Substitute Products or Services:
Interviewees should assess the availability of substitutes that could potentially lure customers
away from the industry's products or services.
They should discuss the factors contributing to the threat of substitutes and how companies can
differentiate themselves to reduce this threat.
Intensity of Competitive Rivalry:
Candidates should evaluate the level of competition among existing industry players.
Considerations include the number of competitors, industry growth rates, and exit barriers.
They should discuss how intense rivalry impacts pricing, innovation, and overall profitability in
the industry.
In case interviews, you'll typically be presented with a business scenario or problem related to a
particular industry. Your task will be to use the Five Forces Model to systematically assess the
industry's attractiveness and competitive dynamics. This analysis can help you make informed
recommendations and propose strategies for a hypothetical client or company.

The 4Ps

In case interviews, the 4Ps is a framework used to analyze and evaluate marketing strategies
for a product or service. The 4Ps represent the four key elements of marketing that a company
can control and manipulate to influence consumer behavior and achieve its marketing goals.
The 4Ps are:

Product: This refers to the actual product or service being offered to customers. In a case
interview context, you would examine aspects such as product features, quality, design, brand,
and any unique selling propositions (USPs) that differentiate the product from competitors.

Price: Price represents the amount customers are charged for the product or service. In a case
interview, you might analyze pricing strategies, pricing structures, discounts, and how the price
aligns with the perceived value of the product in the market.
Place (Distribution): Place relates to the distribution and availability of the product. This involves
assessing distribution channels, retail locations, online presence, and any partnerships or
alliances that help the product reach the target market effectively.

Promotion: Promotion involves all the marketing and communication efforts to make customers
aware of and interested in the product. In a case interview, you might discuss advertising, public
relations, social media campaigns, and other promotional activities.

Using the 4Ps framework, you can systematically analyse and develop marketing strategies to
address various business challenges. For example, you might be asked to evaluate the
marketing strategy for a new product, recommend ways to increase market share, or identify
opportunities to improve a product's profitability. By considering each of the 4Ps, you can
provide a structured and comprehensive analysis of the marketing aspects of the case.

BCG Matrix

The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic planning tool
used in case interviews to analyse a company's product portfolio. Developed by the Boston
Consulting Group, this matrix categorizes a company's products or business units into four
quadrants based on two dimensions: market growth rate and market share. Each quadrant
represents a different strategic recommendation. Here's how the BCG Matrix works:

Stars (High Market Share, High Market Growth):

Products or business units in this quadrant have a high market share in a rapidly growing
market. They are considered to be high-potential and high-performing. In case interviews, you
may need to discuss strategies for maintaining or further investing in these products to
capitalize on their growth potential.
Question Marks (Low Market Share, High Market Growth):
Products or business units in this quadrant have a low market share but operate in a
high-growth market. They have the potential to become stars if they can gain more market
share. Case interview discussions often focus on strategies for increasing market share, such
as marketing investments, product improvements, or partnerships.
Cash Cows (High Market Share, Low Market Growth):
Cash cows represent products or business units with a high market share in a slow or mature
market. These are typically cash-generating and profitable. In case interviews, you might
explore strategies for maximizing the cash flow generated by these assets, such as cost
reduction or diversification.
Dogs (Low Market Share, Low Market Growth):
Dogs are products or business units with low market share in a slow-growing market. They tend
to generate minimal profit and may be a drain on resources. In case interviews, discussions may
revolve around whether to divest, reposition, or phase out these products to focus on more
promising areas.
Using the BCG Matrix in a case interview allows you to assess a company's portfolio and make
strategic recommendations based on the characteristics of its products or business units. It
helps identify where resources should be allocated and which areas require strategic attention.
This framework is a valuable tool for assessing a company's overall strategic position and
opportunities for growth or optimization.

Victor Cheng’s Business Situation FrameworkVictor Cheng's Business Situation Framework is a

structured approach often used in case interviews to analyze and solve complex business
problems. This framework is particularly helpful when you're presented with a business scenario
and need to methodically break it down. It consists of four key components: Customers,
Company, Competitors, and Market.

Customers:
Start by examining the customers or target market. Who are they? What are their
demographics, preferences, and needs?
Consider factors like customer segments, size, growth potential, and purchasing behavior.
Analyze customer trends and identify any shifts or emerging patterns that may affect the
business.
Company:
Assess the company's internal factors, capabilities, and resources. What does the company do?
What are its strengths and weaknesses?
Examine the company's products or services, its value proposition, and its core competencies.
Investigate operational aspects, including supply chain, technology, and organizational
structure.
Competitors:
Analyze the competitive landscape. Who are the key competitors in the industry? What are their
strengths and weaknesses?
Evaluate competitor strategies, market share, pricing, and customer offerings.
Identify potential threats or opportunities posed by competitors' actions.
Market:
Explore the broader market dynamics. What is the size and growth rate of the market?
Consider market trends, regulatory factors, and any macroeconomic conditions affecting the
industry.
Assess potential entry barriers, customer loyalty, and the overall attractiveness of the market.

Victor Cheng's Business Situation Framework is a versatile tool that allows you to approach a
wide range of case interview scenarios systematically. By breaking down complex problems into
these four categories, you can gather relevant information, identify key issues, and formulate
well-structured recommendations. It helps ensure that you address all critical aspects of the
case and present a comprehensive analysis to your interviewer.
As said before in the beginning, these frameworks are a source of inspiration and a starting
point to the preparation of the case interviews. It is not supposed to be memorized and put-it
forth as it is during the case interviews.