value framework case study

Hacking the Case Interview

Case interview frameworks or consulting frameworks are arguably the most critical component of a case interview. Outstanding case frameworks   set you up for success for the case while poor frameworks make the case difficult to solve.

Struggling on how to use frameworks in your case interviews? Unsure of which frameworks to use?

Don't worry because we have you covered! We'll teach you step-by-step, how to craft tailored and unique frameworks for any case interview situation.

By the end of this article, you will learn four different strategies on how to create unique and tailored frameworks for any case interview.

Strategy #1: Creating Frameworks from Scratch

• Strategy #2: Memorizing 8 – 10 Broad Business Areas
• Strategy #3: Breaking Down Stakeholders
• Strategy #4: Breaking Down Processes
• Strategy #5: Two-Part MECE Frameworks

You will apply these strategies to learn how to create case frameworks for the six most common types of case interviews.

Profitability Framework

Market entry framework, merger and acquisition framework, pricing framework, new product framework, market sizing framework.

You will also learn six consulting frameworks that nearly every consultant knows.

Porter’s Five Forces Framework

Swot framework, 4 p’s framework, 3 c’s / business situation framework, bcg 2x2 matrix framework, mckinsey 7s framework.

If you’re looking for a step-by-step shortcut to learn case interviews quickly, enroll in our case interview course . These insider strategies from a former Bain interviewer helped 30,000+ land consulting offers while saving hundreds of hours of prep time.

What is a Case Interview Framework?

A case interview framework is simply a tool that helps you structure and break down complex problems into simpler, smaller components. Think of a framework as brainstorming different ideas and organizing them into different categories.

Let’s look at an example: Coca-Cola is a large manufacturer and retailer of non-alcoholic beverages, such as sodas, juices, sports drinks, and teas. They are looking to grow and are considering entering the beer market in the United States. Should they enter?

In order for you to decide whether Coca-Cola should enter the beer market, you likely have many different questions you’d like to ask:

• Does Coca-Cola know how to produce beer?
• Would people buy beer made by Coca-Cola?
• Where would Coca-Cola sell its beer?
• How much would it cost to enter the beer market?
• Will Coca-Cola be profitable from selling beer?
• How would Coca-Cola outcompete competitors?
• What is the size of the beer market in the United States?

This is not a very structured way of thinking through the case. The questions are listed in no particular order. Additionally, many of the questions are similar to one another and could be grouped together.

A case framework would provide a structure to organize these ideas and questions in a way that is easy to understand.

A framework for this case might look like the following.

Notice that we have simplified the list of questions we had into four main categories. These broad categories are frequently called framework “buckets.” Also notice that we have grouped similar questions together under each framework bucket.

This case framework tells us what areas we need to explore in order to make a recommendation to Coca-Cola. It also clearly shows what questions we need to answer under each area.

This is the power of a case interview framework. It simplifies a complex business problem into smaller and separate components that we can tackle one at a time.

So how do you develop a case framework? The next section will reveal four robust strategies for creating unique and tailored consulting frameworks for any case interview.

Case Interview Framework Strategies

There are four case interview framework strategies you should have in your toolkit:  

When given a case interview, you will need to decide which framework strategy you want to use. Some framework strategies will be more effective than others depending on what type of case interview you get.

Therefore, choose the case framework strategy that is easiest for you given the type of case that you get.

This case framework strategy can be used for any type of case. This is the most time-consuming strategy, but yields case frameworks that are the most tailored and unique for the given case interview.

To create a framework from scratch, ask yourself what 3 – 4 statements must be true for you to be 100% confident in your recommendation. These 3 – 4 areas will become the buckets in your framework.

Once you have your framework buckets, brainstorm a few questions for each bucket that you need answers to.

Let’s return to the Coca-Cola case example in which we are asked to determine whether or not they should enter the beer market. What 3 – 4 statements must be true for us to recommend that Coca-Cola should enter the beer market?

The four major statements that must be true are:

• The beer market is an attractive market
• Competitors in the market are weak
• Coca-Cola has the capabilities to produce outstanding beer
• Coca-Cola will be highly profitable from entering the beer market

These will be the major areas or buckets in our framework.

Next, let’s add a few bullet points under each area to add more detail to our case framework.

To determine whether the beer market is attractive, we would need to know the market size, the market growth rate, and the average profit margins in the market.

To assess whether the market is competitive, we would need to know who the competitors are, how much market share they have, and if they have any differentiation or competitive advantages.

To decide whether Coca-Cola has the capabilities to produce beer, we need to know if there are any capability gaps or if there are significant synergies that Coca-Cola can leverage.

Finally, to determine the expected profitability of entering the market, we would need to know what expected revenues are, what expected costs are, and how long it would take Coca-Cola to break even.

This gives us our case framework.

You can repeat this process for any case interview that you get to create an outstanding case framework.

Strategy #2: Memorizing 8 – 10 Broad Business Areas to Make a Framework

Creating case frameworks from scratch can be quite time-consuming. Because of this, many interview candidates make the mistake of using memorized frameworks for case interviews.

Candidates will either use a single memorized framework for every case or memorize a different framework for every type of case interview.

The issue with using memorized frameworks is that they aren’t tailored to the specific case you are solving for. When given an atypical business problem, your framework areas or buckets will not be entirely relevant.

A poor framework makes the case interview significantly more difficult to solve.

Additionally, Interviewers can easily tell that you are regurgitating memorized information and not thinking critically.

Instead of creating frameworks from scratch each time, this second case framework strategy provides a method to speed up the process while still creating frameworks that are unique and tailored to the case. Additionally, you won’t need to memorize multiple different frameworks.

First, memorize a list of 8 - 10 broad business areas, such as the following:

When given a case, mentally run through this list and pick the 3 - 5 areas that are most relevant to the case.

This will be your framework.

If the list does not give you enough areas for your framework, brainstorm and add your own ideas as areas to your framework.

Finally, add a few bullet points under each area to add more detail to your case framework.

This strategy guarantees that your framework elements are relevant to the case. It also demonstrates that you can create unique, tailored frameworks for every business problem.

Let’s return to the Coca-Cola case example in which we are asked to determine whether or not they should enter the beer market.

Running through our list of memorized framework areas, the following six areas would be relevant:

• Market attractiveness : Is the beer market attractive?
• Competitive landscape : How tough is competition?
• Company capabilities : Does Coca-Cola have the capabilities to enter the market?
• Profitability : Will Coca-Cola be profitable from entering the market?
• Risks : What are the risks of entering the market?
• Strategic alternatives : Are there other more attractive markets Coca-Cola should enter?

You can pick 3 – 5 of these areas as the basis for your framework.

This strategy is a shortcut for creating unique and tailored frameworks for every business problem. Even if you and a friend used this same strategy, you both may end up with different frameworks.

That is completely fine. As long as the buckets in your framework are major areas and are relevant to the case, your case framework will be significantly better than most candidates’ frameworks.

You do not need to develop a framework entirely from scratch every time to create outstanding case frameworks. This case framework strategy can be applied to over 90% of case interviews.

For the remaining 10% of case interviews, you will need to learn and use the next two case interview framework strategies.

Strategy #3: Breaking Down Stakeholders to Make a Framework

The first two case framework strategies can be applied to over 90% of cases. However, some cases may require you to identify and focus on various stakeholders that are involved in running or operating a business.

For these cases, the primary areas of your case framework will be these major stakeholders.

Let’s take a look at an example: Your client is a non-profit blood bank. They have volunteer nurses that go to schools and companies to collect blood from donors. They then sell this blood to hospitals, which use this blood for emergency situations when a blood transfusion is required. Currently, Hearts4Lives is not profitable because they are not able to collect enough blood to sell to their hospital partners. What can they do to fix this?

This case involves many different stakeholders:

• Volunteer nurses
• Blood donors
• Schools and companies

For cases in which many different stakeholders are involved, it will be useful to look at each stakeholder and determine what each could do to address the problem.

One potential framework could look like the following:

Strategy #4: Breaking Down Processes to make a Framework

Similar to the previous case framework strategy, some cases may require you to focus on improving or optimizing a particular process.

For these cases, the primary areas of your case framework will be each major step of the process.

Let’s take a look at an example: Your client is a waste disposal company that manages a fleet of drivers and garbage trucks that go to residential homes, collect garbage, and then dump the garbage in city landfills. They have an obligation to collect each home’s garbage once a week. Recently, they have been failing to meet this requirement and are backed up with garbage disposal requests. What is causing this issue and what should they do to fix it?

For cases involving processes and efficiencies, it can be helpful to look at the different components or steps in the process.

We can think about the process of collecting and disposing of garbage in the following steps:

• Get in a garbage truck
• Drive along a designated route
• Collect garbage at each stop
• Dispose of the garbage in the landfill

Using these steps as the primary areas of our framework, we can create the following case framework:

Once you have systematically listed all of the steps in a process, you can identify the pain points or bottlenecks that are causing the issue and determine ways to improve the process.

Strategy #5: Two-part MECE Frameworks

An easy way to make a 100% MECE framework is to use a two-part MECE framework. For the first step, start with a X and Not X framework. Some examples include:

• Internal / external
• Short-term / long-term
• Economic / non-economic
• Quantitative / qualitative
• Direct / indirect
• Supply-side / demand-side
• Upside / downside
• Benefits / cost

There are probably hundreds more frameworks that follow this pattern.

These frameworks are by definition 100% MECE. Since all of these frameworks are X or Not-X, they are mutually exclusive. There is no redundancy or overlap between X and Not-X.

Together, X and Not-X are also completely exhaustive. They cover the universe of all ideas and possibilities.

The X and Not-X framework by itself is good enough for a lot of the questions you could get asked in a case interview.

If you’re asked to brainstorm ways to decrease costs, you can create a framework consisting of decreasing variable costs and decreasing non-variable costs, also known as fixed costs.

If you’re asked to brainstorm barriers to entry, you can create a framework consisting of economic barriers to entry, such as cash and equipment, and non-economic barriers to entry, such as brand name or distribution channels.

However, to take your framework to the next level and truly impress your interviewer, we have the option of doing step two.

Step two involves adding another layer of X and Not X into your framework. What do we mean by this?

Let’s say you are trying to help a city decide whether they should host the upcoming summer Olympics. You start off with a framework consisting of benefits and costs. You can take this framework to the next level by adding another layer, such as adding in short-term and long-term.

With this additional layer, your framework now has four categories: short-term benefits, long-term benefits, short-term costs, and long-term costs. This is a 100% MECE framework that enables you to think through all possible considerations in deciding whether a city should host the Olympics.

Let’s look at another example. Suppose you are trying to figure out how to reduce a company’s costs. You start with a framework consisting of variable costs and fixed costs. You can take this framework to the next level by adding another layer, such as direct and indirect.

With this additional layer, your framework now has four categories: ways to directly reduce variable costs, ways to indirectly reduce variable costs, ways to directly reduce fixed costs, and ways to indirectly reduce fixed costs. This is another 100% MECE framework.

Case Frameworks: The 6 Most Common Frameworks

There are six common case frameworks in consulting case interviews.  

Profitability frameworks are the most common types of frameworks you’ll likely use in consulting first round interviews.

A profitability case might look like this: “An electric car manufacturer has recently been experiencing a decline in profits. What should they do?”

There are two steps to solving a profitability case.

First, you need to understand quantitatively, what is the driver causing the decline in profits?

You should know the following basic profit formulas.

Is the decline in profitability due to a decline in revenue, an increase in costs, or both?

On the revenue side, what is causing the decline? Is it from a decrease in quantity of units sold? If so, is the decrease concentrated in a particular product line, geography, or customer segment?

Or is the decline due to a decrease in price? Are we selling products at a lower price? Is there a sales mix change? In other words, are we selling more low-priced products and fewer high-priced products?

On the cost side, what is causing the increase in costs? Is it from an increase in variable costs? If so, which cost elements have gone up?

Or is the increase in costs due to an increase in fixed costs? If so, which fixed costs have gone up?

Next, you need to understand qualitatively, what factors are driving the decline in profitability that you identified in the previous step.

Looking at customers, have customer needs or preferences changed? Have their purchasing habits or behaviors changed? Have their perceptions of the company changed?

Looking at competitors, have new players entered the market? Have existing competitors made any recent strategic moves? Are competitors also experiencing a decline in profitability?

Looking at the market, are there any market trends that we should be aware of? For example, are there new technology or regulatory changes? How do these trends impact profitability?

Putting all of this together, we get the following profitability framework.

Once you have gone through this profitability framework and understand both quantitatively what is causing the decline in profits and qualitatively why this is happening, you can begin brainstorming ideas to address the profitability issue.

Among the ideas that you brainstorm, you can prioritize which recommendations to focus on based on the level of impact and ease of implementation.

See the video below for an example of how to solve a profitability case using this profitability framework.

Market entry frameworks are the second most common types of frameworks you’ll likely use in consulting first round interviews.

A market entry case might look like this: “Coca-Cola is considering entering the beer market in the United States. Should they enter?”

To create a market entry framework, there are typically four statements that need to be true in order for you to recommend entering the market:

• The market is attractive
• Competition is weak
• The company has the capabilities to enter
• The company will be highly profitable from entering the market

These statements form the foundation of our market entry framework.

Note the logical order of the buckets in the framework.

We first want to determine whether the market is attractive. Then, we need to check if competition is weak and if there is an opportunity to capture meaningful market share.

If these two conditions are true, then we need to confirm that the company actually has the capabilities to enter the market.

Finally, even if the company has the capabilities to enter the market, we need to verify that they will be profitable from entering.

This is a logical progression that your market entry framework will take you through to develop a recommendation for market entry cases.

Merger and acquisition frameworks are also common frameworks you’ll use in consulting interviews.

There are two common business situations.

The first situation is a company looking to acquire another company in order to access a new market, access new customers, or to grow its revenues and profits.

Another situation is a private equity company looking to acquire a company as an investment. Their goal is to then grow the business using their operational expertise and then sell the company years later for a high return on investment. This type of case interview is called a private equity case interview .

In either of these situations, mergers and acquisition cases typically involve acquiring an attractive, successful company.

It is rare to get a case in which a company or private equity firm is looking to acquire a poorly performing company to purchase at a discount. Nevertheless, you can always clarify the goal of the merger or acquisition with the interviewer before beginning the case.

In order to recommend making an acquisition, four statements need to be true.  

• The market that the acquisition target is in is attractive
• The acquisition target is an attractive company
• The acquisition generates meaningful synergies
• The acquisition target is at a great price and will generate high returns on investment

These statements become the basis of our merger and acquisition framework.

Synergies is an area that should absolutely be included in any merger or acquisition framework. A merger or acquisition can lead to revenue synergies and cost synergies.

Revenue synergies include:

• Having access to new customer segments
• Having access to new markets
• Having access to new distribution channels
• Cross-selling opportunities
• Up-selling opportunities

Cost synergies include:

• Eliminating cost redundancies
• Consolidating functions or groups
• Increasing buying power with suppliers, manufacturers, distributors, or retailers

Pricing frameworks are used in cases involving the pricing of a product or service. To develop a pricing framework, you should be familiar with the three different ways to price a product or service.

• Pricing based on costs : set a price by applying a profit margin on the total costs to produce or deliver the product or service
• Pricing based on competition : set a price based on what competitors are charging for products similar to yours
• Pricing based on value added : set a price by quantifying the benefits that the product provides customers

Your answer to pricing cases will likely involve a mix of all three of these pricing strategies.

Your pricing framework will look something like the following.

Pricing based on costs will determine the minimum price you can realistically set. Pricing based on value added will determine the maximum possible price. Pricing based on competition will determine which price in between these two price points you should set.

In order to get customers to purchase your product, the difference between your price point and the customer’s maximum willingness to pay must be greater than or equal to the difference between your competitor’s price point and the customer’s maximum willingness to pay for their product.

New product frameworks are used to help a company decide whether or not to launch a product or service.

New product frameworks share many similarities with market entry frameworks. In order to recommend launching a new product, the following statements would need to be true:

• The product targets an attractive market segment
• The product meets customer needs and is superior to competitor products
• The company has the capabilities to successfully launch the product
• Launching the product will be highly profitable

Expanding on these areas, your new product framework could look like the following:

A comprehensive guide to market sizing questions and market sizing frameworks can be found in our comprehensive market sizing article. You can also watch the video below:

As a summary, market sizing or estimation questions ask you to determine the size of a particular market or to estimate a particular figure.

There are two different market sizing frameworks or approaches:

• Top-down approach : start with a large number and then refine and break down the number until you get your answer
• Bottom-up approach : start with a small number and then build up and increase the number until you get your answer

To create your market sizing framework, simply write out in bullet points, the exact steps you would take to calculate the requested market size or estimation figure.

Consulting Frameworks Every Consultant Knows

There are six consulting frameworks that nearly every consultant knows.

I would not recommend using these exact frameworks during a case interview because the interviewer may think you are just regurgitating memorized information instead of thinking critically about the case.

Instead use the four framework strategies that we covered earlier in this article to create tailored and unique frameworks for each case.

Nevertheless, it is helpful to review these common consulting frameworks in order to understand the fundamental concepts and business principles behind them.

Porter’s Five Forces framework was developed by Harvard Business School professor Michael Porter. This framework is used to analyze the attractiveness of a particular industry.

There are five forces that determine whether an industry is attractive or unattractive.

Competitive rivalry:  How competitive is the industry?

The more competitive an industry is in terms of number and strength of competitors, the less attractive the industry is. The less competitive an industry is, the more attractive the industry is.

Supplier power:  How much power do suppliers have?

Suppliers are companies that provide the raw materials for your company to produce goods or services. The fewer suppliers there are, the more bargaining power suppliers have in setting prices. The more suppliers there are, the weaker bargaining power suppliers have in setting prices.

Therefore, high supplier power makes the industry less attractive while low supplier power makes the industry more attractive.   

Buyer power:  How much power do buyers have?

Buyers are customers or companies that purchase your company’s product. The more buyers there are, the weaker bargaining power buyers have in setting prices. The fewer buyers there are, the more bargaining power buyers have in setting prices.

Therefore, high buyer power makes the industry less attractive while low buyer power makes the industry more attractive.   

Threat of substitution:  How difficult is it for customers to find and use substitutes over your product?

The availability of many substitutes makes the industry less attractive while a lack of substitutes makes the industry more attractive

Threat of new entry:  How difficult is it for new players to enter the market?

If barriers to entry are high, then it is difficult for new players to enter the market and it is easier for existing players to maintain their market share.

If barriers to entry are low, then it is easy for new players to enter the market and more difficult for existing players to maintain their market share.

A low threat of new entrants makes the market more attractive while a high threat of new entrants makes the market less attractive.

A SWOT framework is used to assess a company’s strategic position. SWOT stands for strengths, weaknesses, opportunities, and threats.

Strengths : What does the company do well? What qualities separate them from competitors?

Weaknesses : What does the company do poorly? What are the things that competitors do better?

Opportunities : Where are the company’s opportunities for growth or improvement?

Threats : Who are the most threatening competitors? What are the major risks to the company’s business?

The 4 P’s framework is used to develop a marketing strategy for a product. The 4 P’s in this framework are: product, place, promotion, and price.

Product : If there are multiple products or different versions of a product, you will need to decide which product to market. To do this, you will need to fully understand the benefits and points of differentiation of each product.

Select the product that best fits customer needs for the customer segment you are focusing on.

Place : You will need to decide where the product will be sold to customers. Different customer segments have different purchasing habits and behaviors. Therefore, some distribution channels will be more effective than others.

Should the product be sold directly to the customer online? Should the product be sold in the company’s stores? Should the product be sold through retail partners instead?

Promotion : You will need to decide how to spread information about the product to customers. Different customer segments have different media consumption habits and preferences. Therefore, some promotional strategies will be more effective than others.

Promotional techniques and strategies include advertising, social media marketing, email marketing, search engine marketing, video marketing, and public relations. Select the strategies and techniques that will be the most effective.

Price : You will need to decide how to price the product. Pricing is important because it determines the profits and the quantity of units sold. Pricing can also communicate information on the quality or value of the product.

If you price the product too high, you may be pricing the product above your customer segment’s willingness to pay. This would lead to lost sales.

If you price the product too low, you may be losing potential profit from customers who were willing to pay a higher price. You may also be losing profits from customers who perceive the product as low-quality due to a low price point.

In deciding on a price, you can consider the costs to produce the product, the prices of other similar products, and the value that you are providing to customers.

The 3 C’s framework is used to develop a business strategy for a company. 3 C’s stands for customers, competition, and company.

The business situation framework was developed by a former McKinsey consultant, Victor Cheng, who added a fourth component to this framework, product.

Both of these frameworks are used to develop a business strategy for a company in a variety of situations, such as market entry, new product launch, and acquisition.

There is another similar framework called the 4C framework that expands upon the 3 C's. The 4C framework stands for customer, competition, capabilities, and cost.

The BCG 2x2 Matrix Framework was developed by BCG founder Bruce Hendersen. It is used to examine all of the different businesses of a company to determine which businesses the company should invest in and focus on.

The BCG 2x2 Matrix has two different dimensions:

• Market growth : How quickly is the market growing?
• Relative market share : How much market share does the company have compared to competitors?

Each business of the company can be assessed on these two dimensions on a scale of low to high. This is what creates the 2x2 Matrix because it creates four different quadrants.

Each quadrant has a recommended strategy.

• Stars : These are businesses that have high market growth rate and high relative market share. These businesses should be heavily invested in so they can continue to grow.
• Cows :   These are businesses that have low market growth rate, but high relative market share. These businesses should be maintained since they are stable, profitable businesses.
• Dogs :   These are businesses that have low market growth rate and low relative market share. These businesses should not be invested in and should possibly even be divested to free up cash for other businesses.
• Unknown : These are businesses that have high market growth rate and low relative market share. The strategy for these businesses is not clear. With enough investment, these businesses could become stars. However, these businesses could also become dogs if the market growth slows or declines.

The McKinsey 7S Framework was developed by two former McKinsey consultants, Tom Peters and Robert Waterman. The 7S Framework identifies seven elements that a company needs to align on in order to be successful.

These elements are:

• Strategy : The company’s plan to grow and outcompete competitors
• Structure : The organization of the company
• Systems : The company’s daily activities and processes
• Shared values : The core beliefs, values, or mission of the company
• Style : The style of leadership or management used
• Staff : The employees that are hired
• Skills : The capabilities of the company’s employees

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Top 7 case interview frameworks (and how to create your own)

Today we're going to cover the top case interview frameworks, as well as how you can create your own custom frameworks. 

Understanding frameworks has always been critical for the 8,000+ candidates who we've helped with consulting interview preparation. 

And one of the first things you'll want to know is that you should AVOID using pre-made frameworks, like those recommended in Case in Point and in Victor Cheng's LOMS programme. But more on that later. 

Let's start with the list of top frameworks.

• 1. Profitability
• 3. Porter's 5-forces
• 5. Market entry
• 7. Merger and acquisition

Don't reuse pre-existing frameworks

How to create custom frameworks, click here to practise 1-on-1 with mbb ex-interviewers, top 7 frameworks for case interviews, 1. profitability framework.

The   profitability framework   is the most basic framework in business analysis. It simply breaks down profit into its basic revenue and cost components and is commonly used to identify the root cause of profitability issues.

• Revenue   can simply be broken down into the Number of Units Sold x Price Per Unit.
• Costs   can be broken down into Variable and Fixed Costs. And Variable Costs can be further broken down into the Number of Units Produced x Cost Per Unit.

2. The 4Ps framework

The   4Ps framework   is widely used by company executives to design their marketing strategy. There are different variations of this framework, which is also sometimes referred to as the “Marketing mix” framework, but the 4Ps is the most common one.

This framework is commonly used when launching a new product or when reviewing the positioning of an existing product.

• Product : What are the key characteristics of the product sold? Key elements of the product definition could include: customer need fulfilled by product, product usage (E.g. who, where, how, etc.), good vs. service, product lifecycle (new vs. established), competing products and substitutes, etc.
• Price : At what price should the product be sold? Different considerations need to be taken into account here: the customer perceived value of the product, the price of competitive products, the customer price sensitivity, the cost of producing the product, etc.
• Promotion : Which promotion strategies should be used to sell the product? Key elements to consider include: promotion messages, media type (E.g. TV, social media, radio, etc.), best time to promote, competitors’ strategies, etc.
• Place : Through which channels should the product be distributed? Key elements to consider include: possible channels to distribute the product (E.g. in store, web, mail-to-order, etc.), customer expectations in terms of channel, requirement of a sales team or not, competitors’ strategies, etc.

3. Porter's 5 forces

Porter’s 5 forces  is a framework commonly used by CEOs to explore the competitive dynamics of industries. Indeed not all industries are structured the same way.

Some industries are really hard to get into (E.g. banking) while others have very low barriers to entry (E.g. newspapers).

Suppliers have strong bargaining power in some industries (E.g. high-end medical equipment) but little power in others (E.g. small milk producer), etc.

Understanding these dynamics is extremely important when you're considering entering a new industry or when assessing the competitive dynamics of the industry a company is already in.

• Bargaining power of customers : How much bargaining power do customers have? If there is only one buyer but multiple suppliers, then that buyer will be at a strong advantage. Key elements to consider here include: customer concentration (percentage of industry revenues from Top 3 buyers), customer price sensitivity, customer information availability, etc.
• Bargaining power of suppliers : How much bargaining power do suppliers have? Similarly to the previous point, if there is only one supplier but multiple buyers, then that supplier will be at a strong advantage. Key elements to consider include: concentration of suppliers (percentage of industry revenues to Top 3 suppliers), difficulty of switching from one supplier to another, differentiation between suppliers, etc.
• Threat of substitutes : What are the substitutes for the product and are they increasingly popular? As a reminder, water is a substitute for Coke while Pepsi is a competitive product for Coke. Key elements to consider here include: potential new substitutes, ease of substitution, evolution of customer propensity to substitute, etc.
• Threat of new entrants : How difficult is it to enter the industry for potential new players? Key elements to consider here include: regulation authorisations, capital requirements, economies of scale, network effects, etc.
• Existing rivals : How competitive are existing rivals in the industry? Key elements to consider include: number of competitors and their market shares, similarity between their products and products of the firm analysed, financial health of competitors, etc.

4. 3Cs framework

The   3Cs framework   is also commonly used to put together strategies for companies. As you will notice below, a lot of its components overlap with the Porter’s 5 forces.

• Customers : Who is the customer? Key elements to consider include: customer demographics (E.g. age, sex, income, etc.), customer needs, customer segments' size and growth rates, customer willingness to pay and price sensitivity, etc.
• Competition : What are the competitive dynamics? Key elements to consider include: competitors’ value proposition and brand, competitors’ market share and growth, competitors’ financial health, etc.
• Company : What defines the company? Key elements to consider include: product offering, profitability, core competencies, unique selling point, financial performance and resources, etc.

5. Market entry framework

The   market entry framework   is commonly used to make decisions on whether a company should enter a new market or not.

For instance, you could use it to decide if Starbucks should enter the Chinese market, or if Nike should enter the sports broadcasting business.

• Market : What are the characteristics of the market we are trying to enter? Key elements to consider include:   market size  and profitability, products already available in the market, intensity of the competition, heaviness of the regulation, etc.
• Client capabilities : Does the client have the right capabilities to enter that new market? Key elements to consider include: differences between the client's current market and the new one they are now targeting, number of times client has entered new markets and achieved success, other companies already in the new market, etc.
• Financials : Does it make financial sense to enter the new market? Key elements to consider include: current financial situation of the client, cost to enter the new market, ongoing costs once the market is entered, expected revenues and return on investment, etc.
• Entry strategy : How should the client go about entering the new market? Key elements to consider include: timing of market entry (now vs. delay), speed of market entry (test region vs. whole country), opportunity to buy competitor or do a JV, management approach (control from HQ vs. decentralise), etc.

6. Pricing case framework

Companies always face a difficult issue when launching a new product or service. What should its price be? The   pricing framework   is extremely helpful for answering that question.

• Cost-based : What price do we need to set to cover all our costs? Key elements to consider include: fixed costs and their allocation across products, variable costs and number of units produced / sold, profitability targeted, etc.
• Value-based : How much are customers willing to pay for our product? Key elements to consider include: price of the next best alternative to our product, features that make our product better than the next best alternative, value of these features, etc.
• Competitor-based : What is the competition charging for similar products? Key elements to consider include: available substitute products from the competition, price of these substitute products, value of our product vs. substitutes, etc.
• Overall strategy : Given the elements above, what should our pricing strategy be? Key elements to consider include: objective of the pricing strategy (E.g. high profitability or high market share), opportunities for upsell / cross-sell that should be taken into account (E.g. Kindle and ebooks), possibility to sell different versions of the same product (E.g. iPhone 13 and iPhone 13 Pro), etc.

7. Merger and acquisition framework

Finally, the   merger and acquisition framework   is used when companies are looking to acquire or merge with competitors.

These situations are not very frequent in a CEO's life, but they are highly stressful, which is one reason why consultants are often asked to support such initiatives.

• The market : What are the characteristics of the target company's market? Key elements to consider include:   market size  and growth, market profitability and intensity of the competition, market regulation, etc.
• The target : How attractive is the target to be acquired? Key elements to consider include: current and future financial position of the target, important assets or capabilities owned by the target, quality of the target's management team, target / buyer culture fit, etc.
• The buyer : What's driving the buyer to make the acquisition? Key elements to consider include: acquisition rationale (E.g. target undervalued, etc.), acquisition financing, buyer's acquisition experience, acquisition timing, etc.
• Synergies and risks : What are the acquisition synergies and risks? Key elements to consider include: value of individual and combined entities, cost synergies, revenue synergies, biggest risks of failure, etc.

Once you are generally familiar with frameworks, the question becomes: how do you actually use frameworks in case interviews?

There are a lot of opinions about how you should do this on the Internet. But the two main schools of thought are   Marc Cosentino’s Case In Point   and   Victor Cheng’s LOMS .

But both of these methods share the same flaw: they try to force pre-defined frameworks onto cases. In our experience, this is bound to produce average results because all cases are unique.

Not convinced? Let's cover each of these two popular methods in more detail. 

Why NOT to use the Case In Point frameworks

In Case In Point, Marc Cosentino attempts to classify case interviews into 10+ categories and then suggests that candidates should memorise a specific framework for each of them.

This is an interesting exercise as it exposes you to a range of business problems and helps you think about them in different ways. However, in our experience, learning 10+ frameworks is difficult and time consuming.

More importantly, in live case interviews, trying to recognise one of the 10+ case categories and then remembering the associated framework is a real nightmare!

Instead of focusing on solving the problem at hand, you end up trying to remember a framework that will not even perfectly fit the case you are solving. In our experience, the best candidates avoid this strategy.

Why NOT to use Victor Cheng's LOMS frameworks

In his LOMS programme, Victor Cheng advocates for a much simpler method and suggests you should only learn two frameworks: the profit framework for profitability cases, and a general framework for all other cases (Product, Consumer, Company, Competition).

The benefit of this approach is its simplicity. It gives you a starting point that’s easy to remember when you are putting a framework together.

However, in our experience, this approach has a fatal drawback. In practice, there aren’t that many profitability cases, and you basically always end up using the general framework.

Even if you adapt this general framework, it won't be perfectly tailored to the case you are trying to solve. More importantly, your interviewer will quickly realise that you are using a pre-made framework and that will reflect negatively on you.

Why to create custom frameworks instead

A good framework is a bit like a tailor-made suit: it is adapted to the problem you are trying to solve, the company, the industry, and it is also as   MECE   as possible.

If you use pre-existing frameworks, you run the risk of missing important elements of the specific problem you are trying to solve. In real life, consultants rarely use pre-defined frameworks. They are familiar with them, but they do not directly re-use them as-is on projects.

Instead, they create a customised framework or   issue tree  that addresses the specific details of each case.  To do so, they rely on conversations with their client as well as past experiences.

This might sound intimidating, but the good news is that creating custom frameworks is actually much simpler than you might think. 

Now, let's turn our attention to HOW you can create your own custom frameworks during case interviews. 

Here's a brief summary of the steps you'll need to take:

Summary - IGotAnOffer method (framework development questions)

• Step 1: Ask for time to gather your thoughts
• Extract the main elements from the case question
• Break down the main elements into components

Spin your paper around

• Begin with an overview

Highlight 3-5 considerations for each branch

Summarise your points, prioritise next steps.

Now let's cover these steps in more detail. We'll also be digging into a real case example below, in order to illustrate the framework creation process.

1. Ask for time to gather your thoughts

Regardless of the case you get, you should always ask your interviewer for some time to gather your thoughts, before you begin to develop the framework. 

This is a normal part of the interview process. Your interviewers will expect you to ask, and they'll almost always give you this time. 

But don't get carried away! 

For reference, you should only take 30-60 seconds to quietly think-through your framework. We recommend that you also sketch out your framework on a piece of paper during this time, as that will help you to organise your thoughts more clearly. 

Without practise, it's really difficult to estimate how long 30-60 seconds actually is, so we highly recommend that you practice this process with a stopwatch. This exercise will help you get a clear idea of how much time you're actually using. 

2. Create the framework

During that 30-60 second time window, you'll need to do the real work of crafting your framework. 

The essence of framework creation is actually quite simple. A framework takes the business situation presented in the case, and breaks it into smaller "bite size" pieces. 

By isolating the various components of a case, you'll be able to better identify the root cause of an issue, or find the best opportunities for improving the underlying business. 

And the best way to develop your framework creation skills is with practice on realistic case problems, so let's walk through an example together. 

Star Production case example

In this case we need to analyse the short-term profitability of a movie production company. So, you would begin crafting your framework by thinking about the different factors that would contribute to the company's overall profits.

The first two components of this framework are fairly straightforward: revenues and costs. That's because the profitability of any company is determined by a combination of their revenues and costs.

Then, we can further deconstruct both revenues and costs based on our knowledge (or perhaps some assumptions) of the movie production business. And as you break down the components further, it's important to consider the concept of MECE, which stands for Mutually Exclusive Collectively Exhaustive.

In simple terms, MECE means that you should aim to have a framework where the branches do NOT overlap with each other, and where the framework is comprehensive (i.e. no branches are missing). You can learn more about this in our separate   MECE guide . 

Now here's an example of what your draft framework might look like for the Star Production case: 

As you can see in the example above, we've broken down the revenues and costs into specific components that would make sense for a movie production business.

And we've used bullet points to highlight the information we would need in order to determine how each individual item contributes to the overall revenues or costs of the business.

For example, we would need to know the expected ticket sales, the average ticket price, and the share of the ticket revenue that Star Production would be entitled to, in order to calculate the total ticket revenue. 

Once you've drawn out a rough framework like the above example, your next task will be to explain your framework to your interviewer. 

3. Communicate the framework

Even if you created the world's best framework, it won't get you an offer if you're not able to explain it in a clear and structured way. 

Here's how we'd recommend you communicate your framework during your interviews:

Start by showing your interviewer the framework that you've drawn on paper. Having this visual structure will make it much easier to explain (and understand). 

Start with an overview

Before jumping into the details of your framework, you should start with an overview of the framework.

In our example above, you could simply explain that the profitability of Star Production will be determined by the expected revenues and costs of the business, which can be broken down into more specific categories. 

You should also tell your interviewer the order in which you plan to walk through each individual branch, so they'll know what to expect.  

Next, go through each branch of your framework and mention several considerations that came to mind while you were drafting the framework. 

For example, for the "upfront costs" branch of the Star Production case, you could explain that you'd want to find out what costs the company would incur before it can start releasing movies, like filming equipment, studio space, and post production expenses. 

And throughout your explanation of the framework, you should pause periodically to summarise your key points, and to check in with your interviewer. 

You're likely going to be covering a lot of ground in your framework, and you want to make sure that your logic doesn't get foggy in the details. 

For example, you could summarise the most important considerations that impact the revenues of Star Production, after you've walked through each individual sub-branch under revenues. 

Finally, after walking through your full framework, you should tell your interviewer the 2-3 next steps you would recommend, in priority order. 

There's a variety of ways you could rank next steps, but three good options would be based on importance, ease, or speed. 

Returning to the Star Production example, you could recommend the following next steps in priority order:

• Identify the biggest cost drivers.   Star Production's business model is focused on producing a high volume of low cost movies, so controlling costs will be essential to the profitability of the company. 
• Develop a production process that minimises costs.  Once the primary cost drivers are identified, we should develop a production process that keeps those costs as low as possible. 
• Look for opportunities to increase the hit rate.   Star Production is counting on a few box office hits to drive revenues. As a result, increasing the percentage of movies that succeed could be a big win.

Get MBB offers by mastering frameworks

To succeed in case interviews, you MUST be able to create and apply frameworks effectively. And i f you really want the best possible preparation for your case interview, you'll want to practise doing this in an interview situation, ideally with an expert consultant giving you feedback.

That's why we’ve created a coaching service where you can do mock case interviews 1-on-1 with ex-interviewers from MBB firms . Start scheduling sessions today!

Related articles:

Top 10 Case Interview Frameworks: Beginner Mistakes

“Which framework to use?” is probably among the most common questions popping up in a candidate’s mind when confronting a case.

This definitive guide will not only answer that question by introducing a few common frameworks, but also tell you HOW to use those frameworks more effectively during case interviews , and what pitfalls you should be aware of.

Table of Contents

Case interview frameworks – Overview

What are case interview frameworks.

Case interview frameworks are templates used to break down and solve business problems in case interviews. A framework can be off-the-shelf or highly customized for specific cases; it can also be tailored for certain functions/industries, or versatile enough for general problem-solving.

Common case interview frameworks include:

• Profitability Framework
• Business Situation Framework
• McKinsey M&A Framework
• 4P and 7P Frameworks
• Porter Five Forces Model

External vs Internal

Qualitative vs quantitative.

• Cost vs Benefits
• 2×2 Matrix (e.g.: BCG Growth-Share Matrix)

SWOT Analysis

All of these frameworks will be discussed later in this article.

During a case interview, you use consulting frameworks to break down the problem into smaller pieces through an issue tree and test each branch to see if the root-cause is in there. If a branch indeed contains the root-cause, you break it down further. Rinse and repeat until the root-cause is identified.

The big part of problem solving is about breaking down the problem in almost every step of the case.

What should I keep in mind when using consulting frameworks?

Templates should be treated as guidelines, and not strict rules . The same applies to case interview frameworks.

In the past, case interviews were much more predictable, and frameworks were more applicable. However, nowadays, case interviews are more similar to real business problems, where frameworks need a lot of customizations (you’ll see this word repeated a lot in this article) to be useful.

In fact, the whole consulting industry exists on the basis that consultants can customize theory to real, difficult business situations and produce positive results; nobody pays hundreds of thousands of dollars for them to recite a textbook – any college freshman can do as much.

That’s why in my Case Interview End-to-End Secrets Program , I don’t teach candidates to use frameworks – instead, the focus in on the fundamentals of case interview (problem-solving and business intuition) as well as the tips and techniques for instant performance improvement.

How can I use consulting frameworks effectively?

Here’s a problem with case interview beginners – they tend to go straight for the frameworks, before even knowing the basic mechanisms and principles of case interviews.

If you are one of those beginners, you must first grasp the basics of case interviews – the fundamentals of case interview problem-solving, the issue tree, and the MECE principle. I have written extensive, separate guides on these topics, but for starters, I advice you to read this Case Interview 101 comprehensive guide. 

Busting case interview framework myths

Myth 1: “the more frameworks i know, the better”.

Before we proceed with the popular frameworks in consulting and case interviews, here are four huge myths about frameworks you should steer clear of.

Spend your time learning to draw customized frameworks/ issue trees instead. Case interviews are getting progressively more realistic and less conforming to specific frameworks, so trying to memorize dozens of frameworks is of no use.

Additionally, you should attend to the qualitative side of things, to deeply absorb each framework and its use; skimming the surface will come back to bite you later.

Myth 2: “There must be a framework out there that fits this case”

Ready-made frameworks CANNOT cover all kinds of situations. Even regarding the ones covered, existing frameworks are often “okay-fit”, but not perfectly fit.

Just create a framework/issue tree yourself. Nobody deducts your points for not using a ready-made tool, they even give you points if you can customize it.

Myth 3: “The fancier the framework, the more impressed the interviewer”

You are definitely not wooing anyone by being fancy-schmancy here. Nobody cares about your shiny frame if it does not fit with the picture.

Consultants are very practical and result-oriented people ; what impresses them are candidates who really know what they are talking about, and actually produce good results.

What’s worse is that you also run the risk of appearing superficial; it’s not difficult for consultants with years of experience in the field to fully expose your bluffing. If that happens you may as well say goodbye to your chance of getting hired.

Myth 4: “Knowledge of frameworks is irrelevant in interviewer-led cases”

The assumption underlying this myth is that in interviewer-led cases , the candidate is not the driver of the case, so he or she does not need to actively break down the problem.

This cannot be further from the truth. Many questions in interviewer-led cases are about frameworks/issue trees (“What factors would you consider to solve this problem?”).

Even with other question types you still need to structure answers like a mini-case. Appropriate knowledge of frameworks, as such, is still a MUST.

Five common case interview frameworks

Profitability framework.

Profitability is the most common problem type in case interviews – that means the Profitability Framework is the first one to master for every prospective consultant. You have to absolutely nail it every time, there’s no way around it.

In case interviews, the Profitability Framework is used to mathematically break down the problem, before switching to more qualitative frameworks to devise solutions.

Most of the time, the framework looks like this:

What’s so good about it?

• Firstly, the Profitability Framework is a surefire way to draw a structured issue tree , as the framework is fundamentally MECE.
• Secondly, this framework is grounded in a simple mathematical basis – there’s no confusing qualitative concept to get lost in; heck, “revenues minus costs equal profits” is common sense. That’s why the Profitability Framework may as well be the easiest framework ever devised by humankind (or consultant-kind).

Are there any shortcomings I should be aware of?

• The Profitability Framework is generic; it may not reflect the nuances within the business enough to draw insightful conclusions. In businesses with wide price ranges, for example, just the total sales volume and average unit price do not tell you much.
• To extract more insightful information, either drill down quantitatively by introducing revenue/cost components not expressed in the basic framework (e.g.: revenue by product), or combine it with a qualitative framework.

Business situation framework

This is an extremely versatile template you can use in nearly every case, so make sure to learn it well. It’s not even a “should”, but a “must”.

In my video , I referred to the Business Situation Framework by the more tell-tale “3C & P”, based on it being derived from the famous 3C Framework. These four letters stand for “Company, Customers, Competitors, Products” – areas that the framework analyzes to yield solutions.

• The one big advantage of the Business Situation Framework is its comprehensiveness – covering four crucial internal and external factors in business strategy.
• This framework is quite flexible – you can use it as a template to draw customized issue trees for all kinds of cases. In our video, I demonstrated this by applying it to solve an HR problem.
• The very same comprehensiveness making the Business Situation Framework flexible, also makes it generic, hence the need for extensive modifications; in many cases (the one in our video, for example), not all four components are relevant.
• It is not a beginner-friendly framework – it does not explicitly state which factors to consider under each main branch; newbies often end up in awkward situations, not knowing what to do next and thinking in a bottom-up manner.

How do you avoid that situation then? I’m inclined to say “practice”, but that much is obvious. A less obvious solution is to equip yourself with some “ninja tips” by learning how each C and P is usually segmented, although again I have to emphasize that it’s vital to maintain a flexible mindset.

McKinsey M&A framework

I absolutely love this one because it works in almost every single M&A case.

There isn’t an official name for this framework, but since it is used by McKinsey consultants when confronting an M&A issue, I’d just call it the “McKinsey M&A Framework”.

The framework assesses a proposed M&A on three dimensions: the stand-alone value of each involving companies (values, strengths, weaknesses, etc.); their synergy, i.e. will the two companies combined be greater than the sum of its parts; and other factors, such as feasibility, culture, legal issues, etc.

• Firstly, the segmentation of stand-alone values and synergy is intrinsically MECE , helping the candidate cover all possibilities – every value of each company must fall into one of these categories.
• Secondly, the framework prompts the user to actively look for “Other factors”, increasing its suitability in unique circumstances.

Are there any shortcomings I should be aware of? 

• The framework does not tell you what to look for in each branch, especially in the “Other factors” branch; this ambiguity shouldn’t be too much of an issue for experienced consultants, but might prove troublesome for candidates.
• Again, as with the previous Business Situation Framework, having a few ninja tricks up your sleeves should help you avoid getting stuck, just don’t rely on them too much.

4P / 7P Marketing Mix

This one is perhaps the single most popular framework in marketing. In case interviews , the 4P/7P Framework is used to formulate and implement marketing strategies for the supposed client, such as in competitive situation or market entry cases.

The original Marketing Mix covers four aspects – Product, Price, Place, and Promotion – thus, “4P”; note that “Place” does not pertain to any physical location, but the channel used by the company to deliver its products to its customers.

When services are involved, the mix becomes 7P; the new additions are: People – those performing the services; Process – how those services are delivered to the customers; and Physical Evidence – the visible, physical clues about the services (think of decorations inside a restaurant).

• The best thing about this framework is its sole focus on marketing, making it very efficient for situations where marketing is the primary/only concern.
• Both the 4P and 7P variants are inherently narrow in scope; candidates must always be mindful that they are not covering the big picture with this framework. Only use them to develop marketing solutions.
• The 4P Marketing Mix, specifically, is not even comprehensive enough for some tangible products, such as high-end fashion, where People, Process and Physical Evidence make huge differences.

Porter’s five forces model

Porter’s Five Forces Model is best used when candidates ask for the case context surrounding the client company; this framework helps them know what to ask.

Michael Porter’s model analyzes how a company’s Competitors, Suppliers, Customers interact with it, as well as how New Entrants and Substitute Products might threaten its place in the industry; it produces a snapshot of the relative power the business holds over its industry environment.

• The model’s coverage of the industry landscape is extensive, giving the candidate a vivid picture of the industry surrounding and interacting with the client in the case.
• This framework doesn’t give a clear answer as to what to do – that is its primary drawback; Porter’s model is not “deep” enough to answer such questions.
• The framework is not comprehensive enough for certain industries where political and legal issues, as well as complementary products, are major factors.
• Another thing to keep in mind: Don’t ever analyze a company with the Five Forces Model – the Five Forces Model describes the industry around that business, not the business itself.

Five mini-frameworks – All-purpose tools

These powerful mini-frameworks are probably the most under-appreciated problem-solving tools ever existed.

Mini-frameworks, like the larger frameworks, are also templates to break down information in a top-down, organized fashion.

Unlike their big cousins, however, these are almost never a primary or upper-most component of an issue tree. Furthermore, while common case interview frameworks are, to varying degrees, business-oriented, mini-frameworks are universal.

In this section, I’ll introduce you to five mini-frameworks I find most helpful in consulting case interviews. They feature prominently as supplements for larger frameworks in candidate-led cases , or stand-alone templates to answer questions in interviewer-led cases.

This is a quick and easy method to segment information about a particular entity. The internal branch concerns the inside of the said entity, such as functions within a company; the external branch describes anything outside that entity.

Here’s an example of this mini-framework as an adjunct to the Profitability Framework:

South Sea – a company specializing in bottled sauces – has found its profits going down badly for the past few years. They want you to find out what’s causing the problem.

You split their profits into revenues and costs; from the data provided, it seems like a revenue problem so you’re going into that branch first. How do you proceed?

Here, a quick check can be performed by splitting the factors causing the decline into two groups – external and internal, then ask the interview if the declining profits are also experienced by other American airlines; “yes” suggests an external root cause while “no” suggests an internal one.

This method of segmentation is primarily used in evaluations. By dividing items into two MECE groups, it reduces confusion and minimizes the risk of missing an important item.

For illustration, we again look at the packaged food company in the previous example:

Turns out, South Sea has quite a few internal problems, in both their production and sales functions. Coincidentally, Wilhelm International is looking to acquire South Sea. Wilhelm controls an extensive distribution network, so the South Sea management is quite interested in the deal.

It’s your task to assess whether South Sea should accept Wilhelm’s offer of acquisition or not.

For this task, I recommend using the McKinsey M&A Framework to break down the analysis into three branches: (1) South Sea’s stand-alone value, (2) its possible synergy with Wilhelm International, and of course (3) there must be an “Other factors” branch as well.

Within each branch, it’s possible to group items into quantitative (profits, growth rates) and qualitative (brand name, capabilities). This combination makes the analysis more MECE , and easier to work with.

Costs vs Benefits

This decision-making tool is pretty straightforward – if the benefits outweigh the costs, you go with that option. Otherwise, you’d be better off keeping your money under the mattress.

The Costs-and-Benefits analysis is a somewhat-business-centric twist of the omnipotent Pros-and-Cons. Both of these approaches work even better with weights attached to each evaluating criterion to reflect its impact.

Now, let’s check up on South Sea:

The acquisition is proven to be beneficial for both sides. With the sales problem solved, South Sea turns its attention to the production issue. The management considers replacing some technologies to improve product quality, but they are not sure if the investment will pay off.

How do you know if the investment is worthwhile?

A simple Costs-and-Benefits breakdown would suffice.

For benefits you have the financial gains to consider, as well as non-financial benefits such as improved brand image (because surprisingly, people love good food!).

2×2 Matrix

The 2×2 Matrix is a decision-making tool where options are examined using two criteria, each of which forms an axis of the matrix.

How do you apply this matrix in South Sea’s case, then?

Wilhelm International, after acquiring South Sea, is looking to push the sales of South Sea’s products using its distribution chain. However, South Sea’s product portfolio is quite large, and each product line differs greatly in terms of sales, branding, and market growth rate.

You must select which product lines to focus on.

The 2×2 matrix most famous in the business world, and also suitable for this case, is BCG’s Growth-Share Matrix, which uses market growth rate and market share as decision-making criteria. The position of a business on this matrix suggests whether to invest in, maintain, or discard that business.

SWOT stands for Strengths, Weaknesses, Opportunities, Threats.

This mini-framework is seldom used in case interviews and consulting work because it’s very generic; however, for a quick and easy evaluation of a company’s positioning within the industry context, the SWOT analysis works just fine.

In most case interviews, this is where you usually turn to the Marketing Mix or the Business Situation frameworks, but even a SWOT analysis may yield some insights.

Other case interview frameworks

Besides the ones we have covered, there are some other case interview frameworks and mini-frameworks worth looking into:

• Six Forces Model: a variant of Porter’s Five Forces, introducing “Complementary Products” into the analysis.
• Lauterborn’s 4C Framework: a more consumer-oriented variant of the 4Ps, designed for niche marketing.
• McKinsey 7S Framework: a framework used in McKinsey for analyzing organizational effectiveness.
• Ansoff Matrix (Product-Market Grid): a 2×2 matrix, designed for product-market strategizing.

Applying frameworks in case interviews

Here are my five rules to effectively implement frameworks in case interviews; if you follow these rules closely, you will absolutely nail the case.

Of these five rules, the first three are about getting the right framework, while the last two are about looking smart during interviews.

• Getting to know the case: “If you know your case and know your frameworks, you need not fear the result of a hundred case interviews” – always gather as much information as possible before and when you draw your issue tree .
• Bending the frameworks: don’t ever bend reality to your frameworks; bend your frameworks to reality; remove, add, or modify elements if necessary.
• Allying with the interviewer: ask the interviewer to help you break down the problem if you get stuck . How do you get him on your side then? By displaying overwhelming consulting traits .
• 13 Reasons why: “Why do you break down the problem that way?”, “Why do you want this piece of data?” – explain all your questions and decisions as if you stand before the US Congress, and before the interviewer asks you; consultants love accountable people.
• Frameworks-which-must-not-be-named: don’t ever explicitly say the names of the frameworks (“I’m going to use the McKinsey M&A Framework”); you would sound very rigid, bookish, or worse, arrogant; consultants don’t like big words without substance.

I’ll give you a brief case sample to see how these rules work in practice:

Interviewer: Our client today is a restaurant called BurgerQueen, located on US Highway 66. The restaurant has found its profits going down last year, your task is to find out the problem and give them a solution.

Candidate: Thank you for the very interesting case, I’m quite excited to solve it. Now, before we dive in,, I would like to playback the case to make sure that we perceive it the same way, ask a few questions for clarification, then announce my approach. Does that sound good to you?

Interviewer: Okay, carry on.

Candidate: Well, let’s see… Our client is a restaurant, on a highway, specifically, Route 66. Their profits have been going bad. I am to find the cause, and solve the problem. Am I getting it right?

Interviewer: Yes, you’re right.

Candidate: Thank you. Now I’d like to clarify the case, so I have 3 questions:

(1) I assume from the name that our client focuses on burgers, and probably other kinds of fast food. Am I right? (2) Does this restaurant have a specific target customer, like truck drivers? And (3) Is it part of a rest stop?

Interviewer: I’ll answer your questions: they sell burgers, but there are many other dishes as well – although mainly fast food; the restaurant does not have a specific target customer, their customers are drivers and travelers on the highway in general; they are part of a rest stop, but they do not own other facilities in the stop, just the restaurant.

Candidate: Great, thanks for the information. Now that we’re all on the same page, and the case has been clarified, I’d like to inform you of my approach. To eliminate this problem in the long run, I think it’s best to break down the problem using an issue tree, isolate the root cause in one of the branches, and gather information until we can draw an actionable solution. Is that approach okay to you?

Interviewer: That sounds good. Continue.

Candidate: To analyze this problem, I’m breaking it down into two sides: Revenues and Costs. Unless we have information pointing in the other direction, I’ll first hypothesize that the problem comes from the revenue side. May I have some data on the restaurant’s revenue during the past year, to prove this hypothesis?

Interviewer: Well, this year their revenue went down by about 40%, but the monthly revenues followed the same pattern as the previous year.

Candidate: Thank you for the data. It’s quite a sudden decrease. I think we can confirm that at least part of this problem comes from the revenue side; I’ll come back to check on the cost side later, now I’d like to go deeper into this revenue branch. Is that okay to you?

Interviewer: Okay, go on.

Candidate: Usually, revenue is divided into sales volume and unit price, but it wouldn’t make much sense for a restaurant with many different items on the menu. My limited knowledge of the food service industry is not exactly helpful, so to draw a more spot-on issue tree, may I ask how they segment the revenue in this restaurant?

Interviewer: Okay, here’s the answer: another way they segment the revenue in a restaurant is into “number of customers” and “average ticket size”, the latter being the purchase value per customer.

What are the key takeaways here?

You can see the candidate tried to gather information on the case through the playback and clarification steps; as a result, he correctly decided that the Profitability Framework is suitable for this case.

However, he quickly found out that the conventional “revenue = volume x price” isn’t too insightful, so he knew he needed to bend the framework.

Unable to find a good way to segment, he asked for help from the interviewer – note how he showed a relevant purpose for the request, and demonstrated that he at least made an effort – these are what we call “consulting traits”.

You should also notice that throughout this brief opening part, the candidate never explicitly mentioned the name of the Profitability Framework, and he always explained his choices before being asked.

Let's practice!

EXERCISE: Develop a 2-level issue tree for this case

The Megapolis City Council is looking to solve a major problem in the city’s traffic – for the last decade, the number of traffic accidents has been rising steadily.

Which factors would you look at, to tackle this problem?

This question apparently can not be answered using any aforementioned framework. In real life, consultants rarely use pre-defined frameworks to solve their client’s issues. Rather, they create unique frameworks based on the MECE principle specific to their problems.

There are few things you should bear in mind to shortcut the way to your own framework:

• Be as MECE or structural as possible.
• Use the issue tree to sketch your framework.
• Break down your problem in a top-down style.

Practice this step-by-step with any real-life issues.

Want to learn more? Join millions of others on our Case Interview End-to-end Secret Program .

Then, to receive personalized practice, you can book a coaching session with our experienced coaches from McKinsey, BCG, or Bain. They will quickly identify your areas of improvement and help you ace your interview.

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Profitability is the most common interview case types in MBB & you will most likely face one. Thus profitability framework is a method to solve profit problems

A case interview is where candidates is asked to solve a business problem. They are used by consulting firms to evaluate problem-solving skill & soft skills

An issue tree is a breakdown method of problems into multiple levels of subsets. It will isolates the root causes and ensures impactful solutions to the problem

Mastering Case Study Frameworks: A Comprehensive Guide for Success

Note: Don’t forget to read and work through our Masterguide to Case Frameworks if you’re still struggling with your profitability case frameworks after reading this article.

Table of Contents

Case study frameworks are crucial tools for management consultants and aspiring candidates in the consulting industry. They provide a structure to analyze and solve complex business problems, helping consultants deliver valuable insights and recommendations to their clients. In this comprehensive guide, we dive into the most essential case study frameworks, their applications, and how to effectively use them in your consulting practice.

Introduction to Case Study Frameworks

Case study frameworks are structured approaches used to analyze and solve business problems during consulting case interviews and client engagements. These frameworks help consultants break down complex problems into smaller, manageable components, allowing for a systematic and efficient approach to problem-solving.

Consultants Create Frameworks to Run Teams

Remember, frameworks are not just to be memorized. They are your tailored, objective-driven, approach to solving a problem.

Because frameworks are simply the modules that a consulting team would assign to their team members.

When creating your frameworks, think to yourself, can my buckets be assigned successfully to Team Member 1, Team Member 2, and Team Members 3 & 4?

The Importance of Case Study Frameworks

Case study frameworks are valuable for several reasons:

• They provide a structured way to approach business problems, making it easier to identify the root cause and develop actionable solutions.
• They help consultants effectively communicate their thought process, findings, and recommendations to clients and interviewers.
• They enable consultants to leverage their experience and knowledge by applying proven methodologies to new business situations.

Flexibility and Adaptability in Applying Case Frameworks

It’s essential to understand that case frameworks are not one-size-fits-all solutions . Instead, they should be viewed as flexible tools that can be adapted, combined, and customized to fit the specific problem at hand. In other words, the best case frameworks are those that can be tailored to address the unique challenges and requirements of each client and situation.

In the following sections, we will discuss some of the most commonly used case study frameworks in management consulting. We will cover their key components, when to use them, and how to apply them effectively.

Profitability Case Frameworks

The profitability framework is a fundamental case study framework that focuses on understanding the drivers of a company’s financial performance. It is most applicable in cases where the client’s primary objective is to improve financial performance, either by increasing revenue, reducing costs, or both.

If you want to read even more on profitability and how to approach it for any case type , take a look at our article here .

Do Not Regurgitate Revenue Cost

As we mentioned above, it is absolutely critical that you stay flexible and adaptable with your frameworks. This is especially true for Profitability. Gone are the days of a generic Revenue Cost framework.

Consultants do not solve real life projects with Revenue and Cost and nor should you in your cases.

Adapt and Adjust Based on the Case

The most important thing to remember about a profitability framework is that it needs to be adjusted to the case . Bucket options include (but are not limited to):

• Competition
• Store (breakdown)
• External/Macro
• Revenue (in context/tailored)
• Cost (in context/tailored)
• Value chain

How do you decide which buckets to use? Well, it depends on the case! For example, if the prompt tells you there are 3 products our company has and we just launched a 4th, of course you need a products bucket. If we are McDonalds (international, different models worldwide), of course you need to break it down by geography.

Listen to how I break this down to a candidate of mine here:

As an example, say we have a food delivery company that has previously focused on topline revenue growth, has negative margins, and now needs to become profitable. How would you create a framework for this? (Please don’t say revenue cost!)

Here’s one option (of multiple):

This probably looks different to what you expected. But it’s also why my candidates consistently get interviewer feedback saying their frameworking is the best they have ever seen.

Remember, every profitability case should have a slightly different set of buckets, based on the problem you are solving.

Again, for a deeper breakdown, check out our article here .

Applying the Profitability Framework

To apply the profitability framework effectively, follow these steps:

•   Identify the relevant components (revenue, costs) and drivers (price, quantity, variable costs, fixed costs) that are most pertinent to the client’s problem.
•   Analyze the current performance of these components and drivers, comparing them against industry benchmarks and competitors.
•   Identify opportunities for improvement and develop recommendations to address these opportunities, considering both short-term and long-term implications.

When identify which areas to pursue (across profit, margin, revenu, and cost), you want to tackle any of the following:

• What’s the biggest? – This refers to the biggest piece of the revenue/expenditure pie, which has the potential to significantly impact the end result.
• What’s changing the most? – Rapid changes in a revenue/cost segment could be a significant driver and potentially fixable.
• What’s the easiest to answer or eliminate? – Opt for quick wins. These are typically yes/no types of questions that can eliminate many other factors.
• What’s the most different? – Look for differences between companies, business units, products, and geographies. Differences often equate to opportunities.
• What’s the most likely? – This is self-explanatory and refers to the most probable source of revenue/cost issues

Market Entry Case Frameworks

The market entry framework is used to evaluate the attractiveness and feasibility of entering a new market or launching a new product. It helps consultants assess the potential opportunities and risks associated with market entry and develop a comprehensive strategy for successful market penetration.

Key Components of the Market Entry Framework

Just like with profitability, you have to tailor your framework to the case prompt.

One option for a market entry framework is as follows:

•   Market Analysis : Assessing the size, growth, and dynamics of the target market.
•   Competitive Landscape : Evaluating the competitive forces and players in the market.
•   Internal Capabilities : Analyzing the company’s strengths, weaknesses, and resources to enter the market.
•   Entry Strategy : Determining the best approach to enter the market, such as organic growth, joint ventures, or acquisitions.

But, the above is just one option. We could also have a Market, Company/Competition, and Financials framework. However, ideally we would articulate it as follows:

Now, remember that all of the above is just for the question Should We Enter This Market?

A different market entry question might be “Our Client has determined that x market is attractive and wants to enter. They have brought us to figure out if we should”. This needs a different framework.

Or, the question might be “Our client has decided to enter x market. How should we enter?” The above frameworks don’t work here!

As a final example, perhaps the case tells us “We are evaluating between 3 markets to enter. Which one should we enter?” Again, new framework needed.

To understand how to tackle these more unconventional market entry cases, please take a look at our 360 degree course .

The Porter's Five Forces Case Framework

Porter’s Five Forces is a widely recognized case study framework developed by Harvard Business School professor Michael E. Porter. It helps consultants analyze the competitive forces shaping an industry and understand the attractiveness and profitability of a market.

Key Components of Porter’s Five Forces Framework

The Porter’s Five Forces framework consists of five main components:

•   Threat of New Entrants : The ease with which new competitors can enter the market and challenge established players.
•   Bargaining Power of Suppliers : The ability of suppliers to influence the terms and conditions of their business relationships with companies in the industry.
•   Bargaining Power of Buyers : The ability of customers to influence the terms and conditions of their business relationships with companies in the industry.
•   Threat of Substitute Products or Services : The likelihood that customers will switch to alternative products or services that fulfill the same need.
•   Rivalry Among Existing Competitors : The intensity of competition among companies within the industry.

When to Use Porter’s Five Forces Framework

The Porter’s Five Forces framework is most applicable in cases where the client is considering entering a new market, launching a new product, or assessing the competitive landscape of an industry.

Applying Porter’s Five Forces Framework

To apply the Porter’s Five Forces framework effectively, follow these steps:

•   Analyze each of the five forces, considering their impact on the industry’s attractiveness and profitability.
•   Identify the key drivers and trends influencing each force and assess their potential implications for the client.
•   Develop recommendations to address the opportunities and challenges posed by the competitive forces, considering both short-term and long-term strategies.

The SWOT Analysis Framework

The SWOT analysis is a widely recognized case study framework that helps consultants evaluate a company’s internal strengths and weaknesses as well as external opportunities and threats. This framework enables consultants to identify key strategic issues and develop recommendations to address them.

Key Components of the SWOT Analysis Framework

The SWOT analysis framework consists of four main components:

•   Strengths : The internal capabilities and resources that give the company a competitive advantage.
•   Weaknesses : The internal limitations and vulnerabilities that hinder the company’s performance.
•   Opportunities : The external factors that the company can capitalize on to improve its performance.
•   Threats : The external factors that pose risks to the company’s performance and success.

When to Use the SWOT Analysis Framework

The SWOT analysis framework is most applicable in cases where the client is seeking to improve its overall performance or address specific strategic issues.

Applying the SWOT Analysis Framework

To apply the SWOT analysis framework effectively, follow these steps:

•   Identify the company’s key strengths and weaknesses, considering factors such as resources, capabilities, and market position.
•   Analyze the external environment, identifying opportunities and threats that may impact the company’s performance.
•   Develop recommendations to leverage the company’s strengths, address weaknesses, capitalize on opportunities, and mitigate threats.

Growth Case Frameworks

The growth strategy framework focuses on identifying and evaluating potential avenues for a company to achieve revenue and market share growth. This framework helps consultants develop a strategic roadmap for the client’s expansion and growth.

Key Components of the Growth Strategy Case Framework

One growth strategy case framework can be broken down into four main components:

•   Market Penetration : Increasing sales of existing products or services in current markets.
•   Market Development : Entering new markets with existing products or services.
•   Product Development : Introducing new products or services in existing markets.
•   Diversification : Expanding into new markets with new products or services.

Remember, however, just like with profitability and market entry cases, you need to listen to the prompt and adjust this framework accordingly to the prompt and company context. Different growth prompts will have different case frameworks.

When to Use the Growth Strategy Case Framework

The growth strategy framework is most applicable in cases where the client is seeking to expand its business, increase market share, or explore new growth opportunities.

Applying the Growth Strategy Framework

To apply the growth strategy framework effectively, follow these steps:

•   Assess the company’s current performance, market position, and growth potential.
•   Identify potential growth opportunities across the four growth strategy components, considering factors such as market attractiveness, competitive landscape, and internal capabilities.
•   Evaluate the feasibility and risks associated with each growth opportunity, taking into account factors such as market entry barriers, resource requirements, and potential synergies.
•   Develop a strategic roadmap for the client’s growth, prioritizing the most attractive and feasible growth opportunities.

Tips for Successfully Applying Case Study Frameworks

To effectively apply case study frameworks in your consulting practice, consider the following tips:

•   Don’t rely solely on case frameworks : Remember that frameworks are just one tool in your problem-solving toolkit. Use them as a starting point, but be prepared to adapt and customize them to fit the specific problem at hand.
•   Listen carefully to the client’s needs : Understand the client’s objectives, priorities, and constraints before selecting and applying a framework. Tailor your approach to address the client’s unique needs and circumstances.
•   Stay flexible and adaptable : Be prepared to adjust your approach as new information emerges or as the client’s needs evolve. Be open to combining and customizing frameworks to develop a tailored solution.
•   Communicate your thought process clearly : Clearly explain the rationale behind your chosen framework, the steps you took to apply it, and the insights and recommendations that emerged from your analysis. This will help ensure that your client and interviewers understand and appreciate your approach.

Enroll in our 360 course . This comprehensive course focuses heavily on building up your frameworking optimally. To get a better understanding of how to create killer case frameworks, start with our master article on case frameworks.

Mastering case study frameworks is crucial for success in the consulting industry. By understanding the key components, applications, and best practices for applying these frameworks, you can develop a strong foundation for effective problem-solving and strategic thinking.

Remember to stay flexible, adaptable, and customer-centric in your approach, and always be prepared to learn and grow as you refine your skills in applying case study frameworks. By doing so, you can unlock unparalleled insights and deliver exceptional value to your clients and interviewers alike.

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11 must-know case interview frameworks

This is a complete guide to case interview frameworks.

In this in-depth guide, you’ll learn:

• 11 must-know consulting frameworks to ace your case interviews
• How to use these frameworks in your case interviews
• And how to create custom frameworks

So, if you want to land an offer from a top consulting firm, this guide is for you.

Let’s dive right in.

Table of Contents

Get the latest data about salaries in consulting, what are case interview frameworks.

A case interview framework is a structured way to approach how to solve a problem .

In other words:

Case interview frameworks help Consultants (and aspiring Consultants) brainstorm and organize their ideas to solve complex problems.

For example, a case interview framework is the profitability framework.

Let’s imagine this business problem:

Your client is manufacturing cars. And, for the past 2 years, they have been experiencing declining profits. They hire us to determine the root causes of this business problem.

And to help this company, you should explore the two main profit drivers: revenues and costs.

And explore if revenues decreased (one cause of declining profits).

Or explore if costs increased (another cause of declining profits).

Well… this (simple) example is a business framework.

Related articles

Check also these articles to ace your case interviews:

16 case interview tips

16 case interview mistakes

Ace market sizing questions (incl. 3 market sizing frameworks) 

Case interview preparation

280 case interview examples

Let’s detail the 11 common case interview frameworks you must know to ace your case interviews .

And let’s start with Porter’s five forces.

Case interview framework 1: Porter’s Five Forces

Let’s start with an analysis of external factors.

And one of the most well-known business frameworks is Michael Porter’s Five Forces model.

And it can be found in the book Competitive Strategy: Techniques for Analyzing Industries and Competitors .

Michael Porter’s Five Forces model says the following:

Competitive advantage in an industry is dependent on five primary forces :

• The threat of new entrants
• How much bargaining power do buyers have
• The bargaining power of suppliers
• Threat of substitute products
• Rivalry with competitors

The degree of these threats determines the attractiveness of the market:

• An intense competition allows minimal profit margins.
• Mild competition allows wider profit margins.

Therefore, the goal is to assess whether a company should enter/exit the industry or find a position to defend itself against these forces best or influence them in its favor .

For instance, your market entry framework should include the components of Porter’s Five Forces. 

The threat of new entrants (barriers to entry)

Several factors determine the degree of difficulty in entering an industry:

• Economies of scale

Product differentiation

• Capital requirements vs. switching costs
• Access to distribution channels
• Cost advantages independent of scale
• Proprietary product technology
• Favorable access to raw materials
• Favorable location
• Government subsidies
• Learning curve
• Government policy

Relationship with buyers (buyer power)

• It is concentrated or large purchases volumes relative to the seller’s sales
• The products it purchases front the industry are standard or undifferentiated
• It faces few switching costs
• Buyers pose a credible threat of backward integration
• The industry’s product is unimportant to the quality of the buyer’s products or services
• The buyer has full information
• Purchasing potential
• Growth potential
• Structural position: intrinsic bargaining power and propensity to use it
• Cost of servicing

Relationship with suppliers (supplier power)

A supplier group is powerful if:

• It is not obliged to contend with other substitute products for sales in the industry
• The industry is not an important customer of the supplier group
• The supplier group is an important input to the buyer’s business
• The supplier group’s products are differentiated, or it has built up switching costs
• The supplier group poses a credible threat to forward integration

Key issues in purchasing strategy from a structural standpoint are as follows:

• Stability and competitiveness of the supplier pool
• An optimal degree of vertical integration
• Allocation of purchases among qualified suppliers
• The threat of backward integration

Substitute products

Substitute products that deserve the most attention are those that:

• Compete in price with the industry’s products
• Are produced by industries earning high profits

Rivalry among competitors (competitive analysis)

Now, let’s analyze the competitive landscape.

Rivalry among existing competitors increases if:

• Numerous or equally balanced competitors exist
• Industry growth is slow
• Fixed costs are high
• There is a lack of differentiation (commodity market)
• There are low switching costs
• Production capacity is augmented in large increments

To end this first section about Porter’s Five Forces, you can watch this video made by the channel Business To You.

Case interview framework 2: the 4 P’s

The 4Ps are:

And it’s often seen as a Marketing framework.

The 4Ps framework can help you in your case interviews in one of the following situations :

• A market entry strategy or a product launch strategy
• To understand why sales (or market shares) have decreased

Now, let’s look at the different elements of the 4P framework.

In examining the competitiveness of a company’s product, whether it is a new product being introduced on the market or an existing product manufactured by the company, one must examine the product itself.

The following are some of the questions you might find helpful in assessing a product’s competitiveness :

• Does the product serve a particular market segment? Is it a mass market or a niche product
• Is it differentiated enough to stand out against the competition? If yes, how? If not, what can be done to improve its value perception?
• What features can be added to the product that would add to the perception of value to the consumer?
• What are some of the packaging issues that might present an opportunity or impediment to increased sales?
• Does my packaging reflect the positioning of the product?
• Does the product have patent protection?
• What financial role is the product playing (i.e., cash cow, long-term profit potential, etc.)?
• Are there any other products that can act as substitutes?

Getting the right price for a product is extremely important for the company’s success.

Unfortunately, sometimes the right price is not easy to determine.

Depending on the price elasticity of the product, a 1% increase in price has anywhere from a -20% reduction to a 25% increase in net income.

The most important factor that drives price is the customer’s perceived “value” of the product .

This is also known as the customer’s willingness to pay.

For example, if a company produces shirts with a unit cost of $10, but the market perceives the product as fashionable or has the right brand name, the shirt can be priced to capture any consumer surplus at $50 or even $80 per shirt.

The same manufacturer introduces another shirt at the same cost the following season.

This time, however, the shirt is no longer considered in vogue and thus has little “value.”

This time, the shirt would be priced at $25.

Other factors determining a product’s price are:

• The Cost to Produce COGS : maintain low costs to capture a bigger profit margin.
• The price paid previously – the expected price: if consumers are used to paying a certain price for a product, it is challenging to convince them to pay a $20 premium for the same product. However, if their perceived product value is higher than what they paid in the past, there’s room to capture some consumer surplus.
• The price of substitutes : the price of a product is driven down if the product can be easily substituted by another that serves the same function.

After assessing the product positioning and understanding who your customers are, you need to develop a strategy around which distribution channel to use and where to sell your product .

The distribution channel can be through a third party or an in-house sales force.

And the distribution channel is responsible for transmitting the company’s product to the customer (wholesaler, retailer, end-user).

The selected distribution channel and the outlets at which the product is sold MUST be aligned with the product’s positioning and focused customer segment.

There are many issues to consider when examining the place/channel distribution.

Below are some thoughts to formulate a strategy for delivering the product to market :

• What are the customer preferences regarding distribution?
• Which channels most closely align with the company’s strategy?
• Does the company need to build new channels or eliminate existing ones?
• Does it make more sense to go direct to the end-user or deliver the product through intermediaries?
• What are the economics of the channel?
• What would be the relationship of the company’s sales force in this arrangement?
• How would the company address any potential shifts in power to the channel?
• How do competitors distribute their products?

Promoting and developing a specific brand for the product has many benefits :

It develops a certain perception of the product in consumers’ eyes.

The product’s success will depend on the message conveyed to the consumer and what that consumer ultimately believes about the product.

To maintain a certain perception of exclusivity, traditional advertising (mass or niche), refraining from advertising, word-of-mouth marketing, direct mail, etc., can all be included in promotion and branding.

Here is a list of issues worth analyzing in case interviews:

• How is the marketing strategy different from the competition?
• What message are we trying to communicate? What is the objective?
• Where are we advertising our product (newspapers, TV, radio, Internet, etc.)?
• Pull strategy: (direct at end-user) use of advertising, direct mail, telemarketing, word of mouth, and consumer promotions.
• Push strategy: trade promotions, sales aids, and sales training programs
• How much money is allocated to marketing?
• How are competitors marketing their products?

Ace market sizing questions

Case interview framework 3: the 3 C’s

Knowing the 3C framework and the details upon which the framework is based is crucial to cracking the case .

For instance, the 3C framework is often used to assess the business landscape.

Or by simply defining a growth strategy.

For instance, your market entry framework should include the 3C’s. 

By analyzing the three elements, Consultants can identify the key success factors and create a viable marketing strategy.

DO NOT attempt to tackle a case during the interview by saying, “I would like to use the 3Cs framework…”

Before you even finish your sentence, the interviewer will have decided to reject you.

This point will be emphasized many times during this guide.

A good first step in assessing the business landscape is to examine the customer, the people whose problems the industry is trying to solve.

Below are eight factors to consider when examining the customer.

#1: Customer Identification

Who is the customer?

In trying to identify the customer, remember that the person who makes the purchase decision, the person who pays (the customer), and the end user (the consumer) may all be different people.

For example, a doctor may prescribe medicine that will be paid for by an insurance company (the customer) and ultimately used by a patient (the consumer).

#2: Customer Segmentation

Is it possible to group customers into distinct segments?

Customer segmentation can make it easier to understand customer needs and preferences, the size and growth rate of different revenue streams, and to identify trends.

It may make sense to segment customers by: 1. Age group 2. Gender 3. Income level 4. Employment status 5. Distribution channel 6. Region 7. Product preference 8. Willingness to pay 9. New versus existing customers 10. Large versus small customers.

How big is the market?

How big is each customer segment?

How many customers are there in each segment, and what is the dollar value of those customers?

How fast is the market growing?

What is the growth rate of each customer segment?

#5: Customer Preferences

What do customers want?

Do different customer segments want different things?

Are the needs and preferences of customers changing over time?

#6: Willingness to Pay

How much is each customer segment willing to pay?

How price sensitive is each customer segment?

For example, students will normally be very price sensitive, which means that offering student discounts can increase units sold by enough to increase total revenue.

#7: Bargaining Power

What is the concentration of customers in the market relative to the concentration of firms?

If there is a small number of powerful customers who control the market?

Then it may be necessary to either play by their rules or search for a more favorable market.

Do customers face high switching costs?

If customers face high switching costs, this will reduce their bargaining power and allow firms to charge higher prices than would otherwise be possible.

#8: Distribution

What is the best way to reach customers?

Does each customer segment have a preferred distribution channel?

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Competitors

It is also important to understand the business landscape to understand the competition .

Competition can come from firms within an industry offering similar solutions to the same group of customers (for example, Pepsi and Coca-Cola).

But, competition can also come from firms in other industries who produce substitutes .

Substitutes may have quite different characteristics (for example, petroleum and natural gas).

Still, they represent a form of indirect competition because consumers can use them in place of one another (at least in some circumstances).

For example, petroleum and natural gas might produce heat and energy.

Below are ten factors to consider when examining the competition.

#1: Competitor Identification

Who are the company’s major competitors?

Taking Cadbury as an example, some of its major competitors might include Lindt, Ferrero, Nestlé, Hershey’s, and Mars.

What products and services does the competition offer?

#2: Substitutes

Who are the company’s indirect competitors? That is, which firms are producing substitutes?

Identifying indirect competitors helps to take a broader view of what the company offers.

For example, Cadbury sells chocolate.

But it might be considered a snack food company.

So indirect competitors might include companies like Lays, Cheetos, and Doritos.

#3: Competitor Segmentation

Is it possible to segment competitors in a meaningful way?

The competition might be grouped by distribution channel, region, product line, or customer segment.

#4: Size and Concentration

What are the revenues and market shares of major competitors?

What is the concentration of competitors in the industry?

Are there many small competitors (a low-concentration industry) or a few dominant players (a high-concentration industry)?

Examples of high-concentration industries include oil, tobacco, and soft drinks.

Examples of low-concentration industries include wheat and corn.

#5: Performance

What is the historical performance of the competition?

Relevant performance can be profit margins, net income, and return on investment.

#6: Industry Lifecycle

Where is the industry’s lifecycle (early stage, growth, maturity, or decline)?

#7: Industry Drivers

What drives the industry: brand, product quality, the scale of operations, or technology?

#8: Competitive Advantages

What is the competition good at?

How sustainable are these advantages?

What are the competition’s weaknesses? How easily can these weaknesses be exploited?

#9: Competitive Strategy

What strategy is the competition pursuing?

Is the competition producing products that are low-cost or differentiated?

What customer segments is the competition targeting?

What are the competition’s pricing and distribution strategies?

What is the competition’s growth strategy?

Are they seeking growth by focusing on customer retention, increased sales volume, entering new markets, or launching new products?

#10: Barriers to entry

Key barriers to entry include capital requirements, economies of scale, network effects, product differentiation, proprietary product, technology, government policy, access to suppliers, access to distribution channels, and switching costs. (see Porter’s five forces model).

In assessing the business landscape, it is not enough to understand the customer and the competition.

Understanding the firm from whose perspective you are analyzing the industry is also important .

Below are ten factors to consider when examining the company.

#1: Performance

What is the historical performance of the company?

What is its market share?

If profits are falling, what is the cause of the issue?

#2: Competitive Advantage

What resources and capabilities does the company possess?

Consider tangible assets (property, plant, equipment, inventory, and employees) and intangible assets (brand, patents, copyrights, and specialized knowledge).

How sustainable are the company’s advantages? What are the company’s weaknesses, and can they be remedied?

#3: Competitive Strategy

What is the company’s competitive strategy?

Is the company producing products that are low-cost or differentiated?

Which customer segments does the company target? What are the company’s pricing, distribution, and growth strategies?

#4: Products

What does the company offer, and how does it benefit consumers?

Does the product have any downsides or side effects?

Is the product differentiated?

How does the company’s product offering compare with the competition?

Are there substitutes available?

#5: Finances

If the company is considering a particular course of action, does it have sufficient funds available?

Financing may be secured from various sources, including internal cash reserves, bank loans, shareholder loans, bond issues, or the sale of shares.

How many units will the company need to sell to cover the cost of the project?

Is there sufficient market demand?

#6: Cost Structure

To understand a company’s cost structure, it helps to break each business unit down into the collection of activities performed to produce value for customers.

How each activity is performed, and its economics will determine a firm’s relative cost structure within its industry.

Are costs predominantly fixed or variable?

How does this compare with the competition?

#7: Organisational Cohesiveness

Understanding a firm’s inner workings is important since competitive strategies can fail if they conflict with its culture, systems, and general business.

The organizational aspects of a firm can be examined using the McKinsey 7 S Model.

#8: Marketing

How do customers perceive the company and its products?

How does the company communicate with customers?

#9: Distribution Channels

What distribution channels does the company use to reach customers?

Are there other channels that are more cost-effective or preferred by customers?

#10: Customer Service

Does the company have a customer loyalty program?

How does the company interact with customers and support its customers post-sale?

Are employees empowered to solve problems and delight customers?

Case interview framework 4: PESTEL (or PESTLE)

PESTEL is an acronym for five factors – Political, Economic, Social, Technological, Legal, and Environmental – that can influence a company’s performance or strategic decisions.

A PESTEL analysis examines these external forces that can have strategic implications for the company .

And conducting a PESTEL analysis can be helpful for three reasons:

Understanding the facts : Understanding the big picture can help a business make informed decisions and avoid incorrect assumptions based on past experience.

Anticipating change : Understanding the macro environment can help a business identify trends and anticipate change, allowing it to take advantage of opportunities and manage potential threats.

Avoiding failure : Understanding the macro environment can help a business (and its investors) to identify projects that are likely to fail due to unfavorable conditions.

Below is a list of some of the general issues the interviewee should consider:

Political forces

• Are there any legal or political restrictions, such as new legislation, that would impede the product’s sale?
• What regulations must be addressed before introducing the product (health regulations/antitrust, etc.)?

Economic factors

• Has the economy’s overall performance impacted the sale of my product? Interest rate? Unemployment figures? Exchange rates? Balance of Payments? Free-Trade Agreements?

Socio-cultural forces

• What norms/cultural practices should be considered when entering a new market?
• Are there any trends in religious practices/traditions/rituals that should be considered?

Technological factors

• What are some of the technological trends in the market that could help/diminish the sale of the product (e.g., paper-based media vs. internet)?
• What R&D advancements were made by the market that would have a long-term impact on the very survival of the company (e.g., pay-per-view video vs. video stores)?

Environmental factors

• How does the business affect the environment?

Legal factors

Finally, the folks from the YT channel Business To You have made a great video about the PESTLE model:

Case interview framework 5: Profitability framework

There’s a good chance that the cases discussed during the interview will often touch on issues of declining profitability .

This framework is very helpful in organizing your thoughts and methodically approaching profitability problems.

According to the Profitability Framework’s opening statement, profit is a function of revenue and costs.

A company’s profitability declines when revenue has dropped, costs have risen, or both.

The goal is to identify the component of the equation that is reducing profitability and determine the best course of action for fixing it.

A quick note:

Variable costs are costs that vary with the units sold.

Fixed costs are costs that do not vary with the units sold.

Case interview framework 6: Unit contribution

The following is a framework you can use to help you understand the economics of the product’s contribution.

This framework is critical when forecasting the overall success of the product .

Case interview framework 7: Break Even

A break-even analysis tells you how many units of a product must be sold to cover the fixed and variable production costs.

For instance, this is important when deciding whether to launch a new product.

Also, a break-even analysis concerns a product’s contribution margin (selling price minus variable costs per unit; see the previous section).

So, the contribution margin is the excess between the selling price of the product and the total variable costs .

For example, if an item sells for $100, the total fixed costs are $25 per unit, and the total variable costs are $60 per unit, the product’s contribution margin is $40 ($100 – $60).

This $40 reflects the revenue collected to cover the remaining fixed costs, which are excluded when figuring the contribution margin.

Case interview framework 8: ROI

ROI is an acronym for Return On Investment.

The ROI is a performance measure that a company can use to evaluate the return from an investment or to compare the returns of several different investments .

For example, if you spent $10,000 and made $15,000, your ROI would be 50%.

[ ( $15,000 – $10,000 ) / $10,000 ] x 100% = 50%

Case interview framework 9: Payback

A payback period is the time needed to recover the cost of an investment.

Simply put, it is the time an investment reaches a breakeven point .

For example, if a company invests $300,000 in a new production line, and the production line then produces a positive cash flow of $100,000 per year, then the payback period is 3 years.

Another example:

You are offered to invest in the project $120K.

The project will bring on average $30K a year in net profit.

Using the payback formula, we get a payback period for capital invested of four years (we divided 120,000 by 30,000).

Case interview framework 10: Value Chain

A Value Chain Analysis is a concept first described and popularised by Michael Porter in his 1985 book, Competitive Advantage .

Value Chain Analysis involves identifying all the important business activities and determining which ones give the company a competitive advantage .

Also, a value chain analysis can be performed to identify potential root causes of a business problem.

For instance, a Value Chain Analysis can be undertaken by following three steps:

• Break down a company into its key activities under each heading in the model.
• Identify activities that contribute to the firm’s competitive advantage by giving it a cost advantage or creating product differentiation.
• Develop strategies around the activities that provide a sustainable competitive advantage.

Cost advantage

A business can achieve a cost advantage over its competitors by understanding the costs associated with each activity.

And then organizing each activity so that it is as efficient as possible.

Porter identified ten cost drivers related to each activity in the value chain : 1. Economies of Scale 2. Learning 3. Capacity utilization 4. Linkages among activities 5. Interrelationships among business units 6. Degree of vertical integration 7. Timing of market entry 8. Firm’s policy on targeting cost or product differentiation 9. Geographic location 10. Institutional factors (regulation, union activity, taxes, etc.)

A firm can develop a cost advantage by controlling these ten cost drivers better than its competitors.

A firm can achieve product differentiation by focusing on its core competencies to perform them better than its competitors .

Product differentiation can be achieved through any part of the value chain.

For example, procurement of unique inputs and not widely available to competitors, providing high levels of product support services, or designing innovative and aesthetically attractive products.

Case interview framework 11: Ansoff Matrix

The Product/Market Expansion Matrix (or “Ansoff Matrix” as it is sometimes called) was developed by a Russian-American mathematician named Igor Ansoff.

And it was first explained in his 1957 Harvard Business Review article entitled Strategies for Diversification.

The Product/Market Expansion Matrix can help a firm define a product-market growth strategy by focusing on four growth alternatives :

1. Market Penetration; 2. Market Development; 3. Product Development; and 4. Diversification.

The four alternative growth strategies are:

Market Penetration : A strategy to increase sales without departing from the original product-market strategy. This involves increasing sales to existing customers and finding new customers for existing products.

Market Development : A strategy to sell existing products to new markets (normally with some modifications). Ansoff described this as a strategy “to adapt [the] present product line … to new missions.” For example, Boeing might adapt a passenger aircraft model for cargo transportation.

Product Development : A strategy to sell new products, with new or altered features, to existing markets. Ansoff described this as a strategy to develop products with “new and different characteristics such as will improve the performance of the [existing] mission.” For example, Boeing might develop a new aircraft design with improved fuel economy.

Diversification : A strategy to develop new products for new markets, which can be related to the current business (e.g., vertical integration or horizontal diversification) or unrelated (e.g., conglomerate diversification).

Learn how to create custom case interview frameworks

The question then becomes, “How do you use business frameworks in consulting interviews?”.

On the Internet, numerous suggestions exist for how you ought to proceed.

However, the two main schools of thought are Victor Cheng’s frameworks and Marc Cosentino’s Case In Point.

However, these two approaches have one thing in common: they both attempt to impose pre defined frameworks on cases .

For instance:

For a market entry case, those resources tell you the market entry framework you should use.

And for an M&A case, those resources tell you exactly the merger and acquisition framework you should use.

They push you to adapt the problem to your tools .

Since every case is different, this will inevitably result in average outcomes and rejections.

For instance, 10 different M&A cases should have 10 different merger and acquisition frameworks. 

Another example: 10 different market entry cases should have 10 different market entry frameworks. 

So, you have to learn how to create custom case interview frameworks.

You must create your own unique frameworks using First Principle Thinking .

Those case interview frameworks must be MECE .

To do so, I’ve created free training to help you in that journey .

You can sign up for free with the link below.

Case interview frameworks: Final words

I hope you enjoyed this updated guide to business frameworks.

Those consulting frameworks will help you join a top consulting firm.

Now, I’d like to hear from you:

Which frameworks from today’s guide do you use the most?

Or which frameworks are new to you?

Has this guide helped you develop your business acumen?

Let me know by leaving a quick comment below right now.

To your success,

P.S. Need help with your case interview preparation?

Check whether our coaching program is a good fit. 

Do you know?

We have a unique coaching model and deliver amazing results .

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Frameworks for the Case Interview (Part III: Value Chain Framework)

• Post author By Mike Ni
• Post date May 27, 2018
• No Comments on Frameworks for the Case Interview (Part III: Value Chain Framework)

Candidates often use the Value Chain Framework without being aware of it. It may form part of your thinking when breaking down a problem using a MECE tree diagram or used when drilling into upstream suppliers and downstream distributors. However, the Value Chain Framework is indeed very useful when it comes to breaking down a firm’s activities and processes, so it deserves our attention.

Fortunately, the structure of the Value Chain Framework is very easy to remember. There are three stages, and they follow in sequence: Input, Production, Output.

A key purpose of this framework is to analyse links between the activities of a company or industry that generate value for the end user. For example, a link between procurement and manufacturing, or manufacturing and marketing. So, what we really need to understand is how to examine these links. The way to analyse links in the value chain is to:

• Compare the same link in a value chain over time to identify trends,
• Identify and examine complementarity between one link and others in the same value chain, and
• Compare to the value chains of key competitors to identify opportunities for improvement.

Before we go into more details about linkages, let’s have a look at the body of the framework to understand what’s in each stage.

Stage 1 – Input

To begin the analysis, it is important to identify the inputs (otherwise known as “resources”, “raw materials” or “factors of production”). For different industries the inputs will be very different. However, candidates can normally think about three aspects.

• Supply:  For many manufacturing cases, inputs are materials from suppliers. This can be further broken down into different types of materials needed to produce the finished product.
• Origination:  The initial source of the material. For example, inputs in the mining industry are originally discovered through prospecting.
• Design:  This is the formula and plan to produce a product or service. For example, one of Ikea’s more important inputs is the design of its furniture.

Stage 2 – Production

Production is all about turning inputs into useful output. The task here is to define all production processes. Production processes can be manufacturing for tangible products like cars, ships, houses, or food. Production can also involve activities that produce intangible products such as coding software, painting pictures, or writing reports.

Stage 3 – Output

The final stage is when the finished product or service is introduced to customers, sold, distributed, and serviced. Candidates may want to identify sales channels (such as online, wholesale, retail, or department store), and logistics (such as train, truck, shipping, or air freight).  It is important to address how products and services are delivered to customers.

Link Analysis

The next part of this framework involves examining linkages between activities. The criteria are limitless in real life. However, there are 4 common criteria that can be applied to most cases (see a summary below). What candidates need to do is apply the criteria to all three stages, assess the links in the value chain to determine existing performance, missing links, and areas for improvement.

Case Prompts

Finally, I want to provide three case prompts for which you can use the Value Chain Framework.

Prompt I: “Company A has lost control of its costs. Increasing costs have dramatically impacted profit margins. CEO of Company A has asked you to identify the source of cost increases.” This prompt indicates that you should use the whole Value Chain Framework. Candidates may initially start with the Profit Framework but mainly focus on the cost part of that framework.  When breaking down costs, candidates should quickly realize that the Value Chain Framework fits the analysis very well.

Prompt II: “Company B has significant challenges in its downstream value chain. Based on market research, the company knows that there is significant demand for its product, however few customers are buying. What is the root cause of the problem?” This prompt is an obvious one for using the Value Chain Framework. However, candidates should focus on the Output Stage since the main issue is sales and distribution.

Prompt III: “Company C has recalled a large number of products in the past few months, which almost bankrupted the company. The CEO wants you to find out how to prevent this issue from happening again and ensure the quality of the products.” This case prompt requires candidates to focus on the Input or probably Production part of the framework. And “quality” is the main criteria when assessing linkages in the chain.

A final caveat when using the Value Chain Framework is to be aware of the relevance of your criteria and area of focus in each stage. There are thousands of criteria and things to focus on in each stage. Please make sure you surface them by asking the interviewer probing questions rather than blindly following what I have told you in this article.

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Mike Ni  believes that technology is the engine of the future, while business capability is the wheel!

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