CF Case Frameworks

MANAGEMENT
CONSULTING
Business Case
Frameworks
An Insiders Guide
Management Consulting Business Case Frameworks

- An Insiders Guide
1st edition
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contents
Prepare for
Your Consulting
Career
The Six Success Factors in Management Consulting

Structured thinking
The Six Success

Factors
The ability to think in a clear and organized way. This is useful for problem solving
and analysis. Math skills also fall in this category and are often used to exemplify
structured thinking skills.
Business judgment
Have a good judgment of business and strategic issues. This is important for case
solving a key management consulting discipline. A good way of practicing this is
by reading business media and trying to understand the underlying issues behind
different news stories and the underlying strategic choices.
04
Communication:
08
Both written and oral communication skills are important in management consulting. During a business case interview, you should focus on your verbal communication skills. You need to convince the interviewer that they can send you in front of
clients from day 1.
Personal impact:
Personal impact is hard to define, but think about it sometimes you are around
people who are good at influencing others. As management consulting firms look
for future leaders, they will look for that leadership talent in you.
Team skills:
Cooperation with other people is essential as a management consultant; you work

in project teams and are surrounded by both clients and coworkers. Team skills
must be demonstrated while you are presenting during an interview, whether they
are explained or shown through actions.
Drive and motivation:
Know what you like and go for it. People should have a feel that you are motivated for a career filled with challenging assignments and long hours, and that you
can maintain drive even when the things get tough.
Prepare for
Business Case
Interviews
16
Product
Company
Evaluation of M&A target
Capacity expansion
Prot hunt
22
Analyze
Company
Product
Product strategy
New product development
Pricing
Advise
Market
Types of
Business Cases
Structure
12
Market
Market situation
Market segmentation
New market entry
Competitor response
Business
Case Solving
Methodology
Business
Case
Frameworks
24
Prepare for Your

Consulting Career
Management consulting firms are
extremely selective in their recruiting. The
first hurdle for an applicant is to make it to
the interview rounds. 93% of applicants do
not make it that far, so congratulations if you
have made the cut! The interview rounds are
where the real fun starts. They can include
as many as eight separate interviews, where
it is expected that you can provide recommendations and solutions to real life business situations with only limited information. No wonder that most applicants find the
application process intimidating. Preparation
is essential to make it through the eye of
this needle. The purpose of this guide is to
provide you with the methodology and the
frameworks you need to ace a business case
interview.
ConsultingFact.com aspires to be
the number one online resource
helping you enter, maintain, and
exit a successful management
consulting career.
ConsultingFact.com was founded in
Copenhagen, Denmark by a former
McKinsey management consultant.
Recommended preparation plan

Before diving deep into business cases
and frameworks, this guide will give you an
idea of the whole preparation process for a
successful consulting career. This is a lengthy
process and you should not underestimate
how much time the preparation can take
your preparation should start three months
before the interview. Look at this recommendation on the next page.
Month 1
Month 2
Month 3
Planning:
Plan and schedule preparation
Application:
Write resume and cover letter
Obtain and incorporate feedback
Proofread and send application
Test preparation:
Practice verbal and numerical tests
Case solving preparation:

Practice mental math skills
Learn the case types/frameworks
Practice case solving
Complete mock interviews
Fit interview preparation:

Prepare for fit interviews
Different persons might be better at some

parts of this process. However, for the vast
majority: you should be ready to invest the
time necessary if you are serious about a
consulting career. Three months is not exag-
gerated and most consultants today have

spent lot of time practicing and preparing.
Read more about the different parts of this
process on the next page.
Planning
Failing to plan is planning to fail
Obtaining an offer from a management consulting firm is a project like any others and
requires planning. Start by making a detailed plan of your preparation and practice efforts.
Also, make sure you schedule your mock interviews and case solving practice with a
practice partner at this time.
Application
93% doesnt make it to the interview rounds
Do not underestimate the importance of a great application, since the majority of

applicants do not make it to the interview rounds. Use a professional and conservative
layout, and be sure to get feedback on your cover letter and resume from a relevant
person. Do not forget to proofread and have others do it as well.
Obtaining an offer from a management consulting firm is a project like any others and
requires planning. Start by making a detailed plan of your preparation and practice efforts.
Also, make sure you schedule your mock interviews and case solving practice with a
practice partner at this time.
Test
Preparation
Similar to a GMAT
Case Solving
Preparation
Know your frameworks and math
Fit Interview
Preparation
How do you fit in?
An often-overlooked activity is the written test preparation. Most of the major consulting
firms require candidates to pass a combined verbal and numerical test. The test type is
similar to a GMAT, thus get a hold of GMAT practice resources. If you think this type of test
is one of your weak spots, then start three months before.
Mental math skills are very important and you should start practicing these right away. In
addition, you need to learn the structure and types of case interviews and the required
frameworks. Find a partner, practice cases together, and combine it all with full mock
interviews (target: 10-15 mock interviews). Receive feedback and work on your weak spots.
Research the firm you applied to via websites, company presentations, meet and greet
events etc. Make sure you know what separates one firm from the other. From an outside
perspective, the firms seem similar. However, there are differences. Your task is to convince
the interviewer that you specifically fit the firm. Prepare for this.
Business Case Interviews

This guide will teach you the necessary
methods and frameworks for business cases.
The business case interview is the most
common case type in management consulting. The purpose of the interview is to test
the candidates ability to perform problem
solving and effectively communicate and present findings. In real life consulting, the client
often puts you on the spot by asking a question that requires problem-solving skills. The
business case interview is a great way to test
6
how a person performs under pressure, i.e.

if the candidate easily gets frustrated when
challenged.
In a business case interview, you will be
presented to a business situation on a market,
company, or product level. A business case
can cover all practice areas within a management consulting firm. The frameworks in this
guide allow you to solve the most common
types of business cases.

Structured thinking
Business judgment
Communication:
clients from day 1.
Personal impact:
Team skills:
The Six Success Factors
The Six Success

Factors
Knowing what management consulting
firms look for is a prerequisite for acing a
business case interview at a major consulting
firm. At ConsultingFact.com, we work with
six management consulting success factors
which cover the key skills and personal characteristics it requires to be a high performing
management consultant.
A business case interview can help the
interviewer to evaluate the candidates performance on all six factors, but in particular
the Business judgment, Structured thinking and Communication skill set is essential
to succeed in the business case solving discipline. Keep the six factors in your mind when
you prepare for the interview, so you know
the evaluation criteria. See the six success
factors on the next page.

Structured thinking
Business judgment
Communication:
clients from day 1.
Personal impact:
Team skills:
Prepare for a
Business Case
Prepare for a
Business Case
Interview
The business case interviews can be
rather demanding. It is likely that you will
need to work on several different development areas to reach your potential for the
interviews. Since business case solving is the
most common case type, this should be your
key area of preparation. We recommend that
you do those crucial four steps:
Learn the business case frameworks

Brush off your mental math skills
Practice business case solving (as
much as possible)
Improve your communication skills
11
We will go through these different areas

in the following sections. The best way to
practice these is to ally yourself with a friend
or a management consultant who can practice
case interview with you.
Learn the Business Case

frameworks
Frameworks are helpful for the business
case interview solving process, as they allow
you to quickly structure and approach a case
problem. Be aware that you will often not be
able to find a framework that fits the case
problem perfectly, so always try to use your
common sense in combination with one or
more frameworks. Memorize the frameworks
in this guide and you will be prepared for the

most common business case types.
Mental math
During the business case interview, you
will need to do a good amount of mental math
for case calculations. For this, you will need to
practice the following areas:
Addition, subtraction, multiplication

and division on paper and mentally
Percentage arithmetic
Fraction arithmetic
Currency conversion
Chart reading
Of course, the interviewer will not expect

that you can solve complex math problems
mentally, but you should be able to do more
simple calculations like 17 x 22, 229 + 128 and
450 / 25 without using paper. In addition to
this, practice your paper math skills for more
complex math questions.
Percentages and fractions are important,
and you will almost certainly need these
during the interview. There might be ques-
12
tions requiring you to estimate a growth in

percentage or to divide some numbers. In
the latter case, knowing the decimal result
of most common fractions is important. You
should memorize the results of the fractions
up to 1/20.
It is very likely that you will be presented
to some charts during the interview. They
might be part of a case or a very specific question about what you can read in a chart.
There are many situations in your everyday life where you can practice math skills.
The key is to get into a mindset, where it feels
more natural for you to work with numbers
mentally. Below are some examples of real life
situations where you can practice:
When shopping: add the numbers in

the shopping cart in your head, and
see if you can match the correct result
When filling gas: look at your gas
meter and calculate what the price
would have been, if you had chosen
another type of gas
When travelling: practice currency
conversion
A bonus is that you can also use your brushed off mental math skills in market
sizing exercises, brain teasers or written numerical tests. Do not underestimate
the importance of great mental math skills.
Practice Business Case Solving

It is actually quite easy to structure the
case solving process. During our career, our
team met many bright candidates with a good
business sense and excellent mental math
skills. Still, they did not make it through the
interview process due to a lack of basic structure. When you have learned and memorized
the business case frameworks in this guide
and practiced your mental math skills, you
need to build your business case experience
by practicing case solving. Solve as many cases
as you can and try to see if you can team up
with a friend or even better a former or current management consultant. Try to make the
interviews as realistic as possible. Do not just
practice the case solving part practice the
whole interview process. Poor preparation is
the sure way to failure.
Improve Your Communication

skills
Communication skills are one of the most
important success factors for a management
consultant. It is crucial that you show the
interviewer that you are a true communicator. Make sure that you remember to smile
no matter how the interview goes and whom
the interviewer is. This sets the mood and it is
usually contagious. Also, remember to display
confidence by using slow gestures while you
speak, sitting straight, and keeping a good eye
contact. The confidence part is very important
during the case interviews. Remember to ask
13
your practice interview partner for feedback

on your communication abilities.
Another thing is to dress correct for an
interview. Recruiters say that candidates
should stand out based on their qualifications and not their wardrobe, but it is even
more important in the management consulting sector. As a management consultant you
will be dealing with executives from Fortune
500 companies, hence the interviewer will
want to make sure that you can put forth the
company image in how you act and dress.
Forgetting this for the interview may mean
you could forget it in a client meeting.
Also, remember that a business case interview is a two-way dialogue. One of the objectives of the interviewer is to evaluate your
thought process. The road to the answer is
more important than the answer itself. So
make sure you share your thoughts such as
case assumptions and rationales. Often, you
will receive hints from the interviewer that
will help you and you can present that you
are able to receive input and being able to
present clear recommendation based on the
discussions. It is easy to get out of track if you
insist on running the show entirely.
Business case solving is fun! If you do
not agree, then you are probably pursuing a
wrong career. Display that you find the business case interview fun and enjoyable.
Business Case
Solving Methodology
Business
Case Solving
Methodology
A structured approach to a business case
question is necessary. Without structure, it is
nearly impossible to escape a business case
interview with a reasonable answer that will
get you through to the next round. A good
approach needs to be simple and the candidate needs to be able to memorize it, and
15
that is why we only work with four steps. The

four steps give you an overall approach to
business case types, which can be modified
to each business case with a framework. All
of the business case frameworks in this guide
are developed to fit with our overall business
case interview structure shown on next page.
Results
Steps
Clarify
Structure
Analyze
Advise
Listen and absorb

case information
Ask clarifying
questions (1-2
questions)
Understand the
case situation,
complication and
key questions
Paraphrase the
case question back
to interviewer if
needed)
Ask for a few
seconds to collect
your thoughts
Find and use

a relevant
framework to
guide the case
discussion
Make the problem
manageable by
breaking it down
into components
Present and share
your assumptions
(keep the dialog
through out the
interview)
Use the chosen

frame to drive
your analysis
Discard all
irrelevant
elements and
focus on the key
issues
Filter and
synthesize the
data provided by
the interviewer
Apply a simplified
approach to
quantify value
Work proactively
towards an answer
Combine
the different
components of
your analysis to
one answer
Recommend a
set of pragmatic
activities to
achieve results
Know the case

problem and the
complication
Have all the basic
facts about the
case
Find and present

the approach
and a relevant
framework
Secure buy-in from
interviewer on the
chosen approach
and framework
Analyze all
relevant elements
of the case
Present subconclusion as you
move along the
analysis
Synthesize
and summarize
analysis and
sub-conclusions
into an overall
conclusion and
a recommended
strategy
Present pragmatic
next steps
Step 1: Clarify
The first step is to listen carefully to the
interviewers presentation of the case. If you
need to, you can take notes, so you are sure
to get all the details (usually a pen and paper
is provided to you by the interviewer). Listening is the most important part here. It leaves
a very bad impression to ask for information
that has already been given. The amount of
information given upfront can vary greatly.
16
Some interviewers prefer to give limited information, to see how the candidate
responds. You can ask for more information
if you feel so, and the same goes for terms
you have not heard about before. Ask what
they mean, so you know what the interviewer
is talking about. Try to keep your clarifying
questions to a number of 2-4. Before you
move to the next step, you need to know at
least what the situation is, what the complication is, and what the derived case questions
are. A great and legitimate way to make sure
you have understood the case question is to
paraphrase it back to the interviewer before
you start attacking the problem.
Next, ask politely for some time to structure your approach to the case question, and
spend a minute to collect your thoughts and
structure your analysis. Try to avoid spending more than a minute here, since too much
silence can seem awkward.
Donts:
Look scared and intimidated when the
case is presented
Ask imprecise or irrelevant questions
Jump to conclusions without an analysis structure
Stop listening to the case description
and think ahead
Step 2: Structure
Having a structure of the case will help
you make a solution hypothesis and drive
the analysis. You should start by spending
a minute on structuring your thoughts and
drawing a structure on paper. The key input
elements for this structure are:
The frameworks from this guide

The specific case information and
questions
Business judgment
We recommend this three-step process
to find a structure for your solution quickly:
1. Start with the information and the case
questions that you received. Is this a
market entry case? A pricing case? A
growth strategy case? Choose one framework from this book that fits most. A great
17
framework is one that can break your

analysis down into manageable components.
2. Judge whether this single framework is
enough based on the case question. Do
you need to add another framework? Let
us assume that your question is Should
we start selling our Venus chocolate bar
on the Chinese market, and if so, what
price should we charge? Here, you need
to combine the market entry framework
with the pricing framework.
3. Use your common sense and business
judgment and add any part that is missing.
In the example above, you might need to
add to structure a logistics/fulfillment part
that might be relevant if the company is
not already present in the Chinese market.
Remember that the framework is merely a
tool. You will get no points for forcing an irrel-
evant framework to the problem. If it does

not fit then discard it and use common sense
nothing beats common sense in consulting.
When you feel you have the relevant
structure in place, it is time to present it to
the interviewer. A good way is to draw the
structure of your analysis on paper and use
this to guide your presentation. As previously
mentioned, it is important that you keep
the dialog with the interviewer. Share your
assumptions and thoughts. That way you get
a constant feed of input. This will help you to
correct your analysis if the interviewer thinks

that you are drifting off track.
Donts:
Force your analysis into a framework
Ask for data before presenting your
analysis structure
Boil the ocean (consulting slang for
being all over the place)
Step 3: Analyze
Now that you have a structure of the problem, look at your structure with the case question in mind. Before you start any analysis,
you need a hypothesis for the solution. Ask
yourself:
What could be an answer to the

case question?
The answer is your working hypothesis.
You will usually be unable to find a detailed
answer at this stage, so a broad answer is
fine. Say the question is where a company
could reduce costs. Based on the background
information you are not sure in detail, but
you sense that the overhead costs are too
high. Then your hypothesis is simply: reduce
overhead costs.
Your analysis can end up proving or disproving your hypothesis. Both are legitimate.
18
If you end up abandoning your initial hypothesis, make sure your analysis comes up with
an alternative answer. If you end up proving
your hypothesis, make sure to expand on it if
necessary.
The analysis part should form the majority
of the interview. A key thing here is to remember that case solving is done through a dialogue with the interviewer. Ask for more information as you drive your analysis. Filter the
information you get by discarding all irrelevant
elements of the framework and always keep
focus on the most relevant elements. Your task
is to develop, test, and refine your hypothesis.
Let your hypothesis be the reference point for
the analysis, i.e. relate your findings back to
it. Summarize and conclude as you go along.
Often, it is necessary to perform calculations while solving a case. These should preferably be calculated without paper, if you want to
impress the interviewer. Use a pen and paper

if the calculations get too complex. When it
comes to case calculations, an overall advice
is to try to simplify the calculations as much
as possible and round the numbers. Note that
some interviewers can be strict and require
you to perform calculations without simplifications. Be cool about this and go straight to the
paper if you do not think you can solve it using
mental math. Think out loud when you calculate, so the interviewer gets a picture of your
thought process. Should you end with a wrong
amount at the end; the interviewer might
give you some credit for it if your approach
was right. If you do not share your thoughts,
the interviewer can only conclude that your
quantitative skills are insufficient.

Also, keep all the six success factors in
mind. They are not just looking for an analyst;
they want a management consultant and a
future leader.
Donts:
Lose yourself in the details
Worry about minor calculation mistakes (but do not make too many of
them)
Stick to your initial hypothesis too long
if your analysis disproves it
Make the interview a monologue
Step 4: Advise
When you think your analysis has covered
all of the major issues, it is time to summarize your conclusions and advise the client
on what do. Tie your hypothesis together
with your analysis and recommendations.
Remember that your recommendation must
be pragmatic and actionable for the client.
Also, identify the implications of your recommendation, e.g. competitive response or the
expected response from the client.
A classic question from an interviewer is
where is your analysis weakest? Do not be
defensive when you answer, but acknowledge
that a real client case cannot be solved in 30
minutes. Answer the question by pointing out
any potential weak points and advise how
19
to verify these if you had more time and a

consulting team. Also, suggest the next step
for the client to take e.g. verify parts of the
analysis and plan of actions.
Donts:
Leave the conclusion out
Forget your hypothesis
Be indecisive (you need to take a stand)
Forget the main questions of the case
Market
Company
Product
Market
Market situation
Market segmentation
New market entry
Competitor response
Company
Capacity expansion
Prot hunt
Product
Product strategy
Pricing
Types of Business Cases
Types of Business Cases

Several different types of business cases exist. In fact, all possible business problems could
be potential business cases. In order to make it manageable, we operate with 10 types of business cases. The cases are categorized in three key scope areas: market, company, and product.
Market
Company
Product
21
Market
Market situation
Market segmentation
New market entry
Competitor response
Company
Capacity expansion
Prot hunt
Product
Product strategy
Pricing
Structure
Rationale
Options
How to expand capacity?
Market
Alternatives
Analyze
Rationale
Options
Demand for product

Availability of site
Revenue and prot gain Distance to customers
Distance to suppliers
Transport cost
Availability of labor
Technology
Expansion time
Investment
Market
Impact on market
supply
Competitor reactions
Alternatives
Outsourcing
Other
Advise
Summarize the cost/benets of the above element and present your recommendation of each
of the elements
No
Dont Expand
Recommended decision
Expand current
facility
Build new
facility
Yes
Other
Business Case
Frameworks
Market: Market Situation

The market situation framework is a very generic framework. It is useful in numerous situations where the objective is to make an industry analysis, i.e. determine the attractiveness
of a market. This is one of the most common case types, which the interviewers use. A typical
question could be:
Our client a private equity firm is interested in a certain market and wants our help
to analyze it. What would you analyze?
Structure
Customers
Suppliers
Market situation
Competition
Performance
Analyze
Performance
Size
Protability
Maturity and growth
Trends
Drivers
Competition
Suppliers
Key players
Key suppliers
Market share
BargainIng power
Brand position
Substitution products
Barriers to entry
Customers
Key customers
Customer preference
Customer purchasing
behavior
Bargaining power
Advise
Summarize the cost/benets of the above element and present

your conclusion
Performance
Competition
Suppliers
Analysis conclusion
Recommendation
23
Customers
Structure
The framework consists of four elements (Customers, Suppliers, Competition, and Performance). They are all required for a true understanding of a market.
Analyze
Use the four elements in the structure and go through each of them one by one. Your
analysis should reveal answers to some of the following questions:
Performance
Competition
What is the size of the market?

How profitable are the market play-
Who are the market players and what

is their share of the market?
ers? (e.g. measured via EBIT-margin)

Which maturity stage is the market
in? (growth, mature, or a declining
market)
What trends can you derive from the
maturity level?
What drives the market? (scale, technology, brand, customer trends)
Is there any competition from substituting products? (different products

that can fulfill the same customer
need)
What is the threat from potential
future competitors and how well is the
market protected by entry barriers?
Suppliers
Who are the suppliers?
How is their bargaining power? (Many
suppliers to choose from gives low
bargaining power and vice versa)
Customers
Who are the customers?
What are their preferences and purchasing behavior?
What is the size of their bargaining
power? (if there are only a few customers in the market their bargaining
power is relatively high)
Advise
When you have completed the analysis, you can move to the advise part, which in this
case requires you to summarize your findings. Draw an overall conclusion about the situation
and remember to answer the case question(s) and advise the client on what to do.
24
Market: Segmentation
A market usually consists of several segments that differ in behavior and/or attractiveness. The objective of market segmentation is to group the customers with similar attributes.
A business case question in this category could be:
Which segment should the client target?
Structure
Geographical
Segmentation parameters
Demographical
Segment attractiveness
Psychographical
Segmentation
Behavioral
Segmentation parameters
Analyze
Geography
Region
Climate
Population
Growth rate
Population
density
Demography
Age
Gender
Education
Occupation
Income
Advise
Segmentation model
25
Geography
Demography
Psychography
Behavorial
Psychography
Values
Attitudes
Lifestyle
Behavioral
Usage rate
Size
Price sensitivity Protability
Brand loyalty
Share
Growth trends
Segment A
Segment E
Segment C
Segmentation
attractiveness
Target segment
Go for segment X
Structure
The structure of the analysis includes two equally important elements: the segmentation
itself and the evaluation of the segments. You can segment a market in several ways. These
four are the most common ways of segmenting and by memorizing these you are already well
on your way to acing the case.
Analyze
Go through each of the four elements and ask for information about the customers along
the way. Your choice of parameters should be based on the relevance and the available data.
Typical questions you should find the answer to are:
Geography
Where are the customers from?
(region, country, city, etc.)
Psychography
What do we know about the customers lifestyle and values?
Demography
What are the relevant age groups?
What are their education levels?
What are their income levels?
Behavioral
How price sensitive is the segment?
What is their usage rate of the product?
How loyal are the customers?
The next step in your analysis is to look at the attractiveness of each segment:
What is the size of the segment?
What is the profitability of the segment? (average EBIT-margin)
What are the growth trends for the segment?
Advise
Your recommendation should start with the segment that the client should target. Following, you should elaborate on this choice by telling more about this segment. Lastly, you
can briefly explain what segmentation criteria you used and some of the segments that you
did not target.
26
Market: New Market Entry

Many management consulting clients face the decision about whether they should enter
a new market or not. Many interviewees also face this question in their case interviews. A
typical case question could be:
Our client considers moving into an adjacent market. Should they enter the market? If
they should, how should they do so?
Structure
Potential
Enter new market
Competition
Potential
Analyze
Company t
Market size
Market protability
Market growth
Potential market share
Further segmentation?
Company t
Past experience
Resources
Capabilities
Financing
Competition
Competitors and their strategy
Competitors product portfolio
Market shares
Barriers to entry
Reaction to entry
Summarize the cost/benets of the above element and present recommendation
Advise
Dont enter
27
Low potential?
Bad company t?
Tough competition?
Enter - how?
Green eld
Enter alone
Strategic
alliance
Joint venture
Enter via
collaboration
with partner
Enter via shared

entity with
partner
Aquisition
Enter via
acquisition
Structure
The structure of a market entry case is relatively simple. Your analysis must include an
evaluation of the markets potential, its fit with the client company and an analysis of the
competition. Mention to your interviewer that you will present a strategy for entry if your
analysis shows that the market is attractive.
Analyze
In the analysis phase, your aim should be to find the answers to the following questions:
Potential
What is the profitability of the market? (average EBIT-margin)
What is the market growth?
What market share is realistic for the client to achieve?
Can the market be segmented further? (if relevant, use elements from the market
segmentation framework)
Company fit
Can the client leverage any experience when entering the new market?
Does the client have the necessary resources and capabilities?
How does the market entry fit with the overall client company strategy and objectives?
Is the organization capable of handling the new market entry?
How will the client finance the market entry?
Competition
Who are the competitors and what do we know about their strategy and product
portfolio?
How is the market divided between the players (market share)?
To what extent is the market protected by entry barriers?
What is the likely response from the competitors if the client enters?
Advise
After the analysis, you should come up with a sound advice for the client. The first question to answer is whether the client should enter the market. If your analysis concludes that
28
the market is attractive, you should move on to the entry strategy. A market can be entered
in four different ways:
Green field: An organic entry by the client alone
Strategic alliance: An entry with a strategic collaboration partner
Joint venture: Entry via the formation of a shared entity with a partner
Acquisition: Entry via an acquisition of a current market player
Go through the pros and cons of each of the four options and present your recommendation.
29
Market: Competitor Response

A competitor response analysis is usually a separate case, but it can also be a part of a
larger case. Typically, a question of this case type would be:
How should we respond to a move by competitor X?
Structure
Product
Change in?
Competition action
Client reaction
Analyze
Change in?
New product
New pricing
New promotion
New distribution channel
Eect
Pricing
Promotion
Distribution
Counter strategy
Eect
Eect of change (market share)
Counter strategy
CIient's ability to imitate:
Scope
Scale
Advise
Recommended strategy
30
Dont follow
Change not important
Follow (organic)
Imitate with current
capabilities
Hire new capabilities
Follow (M&A)
Merge with competitor
Acquire competitor
Structure
The two main components of the competitor response framework are the competitors
action and the clients reaction. First step is to identify what has changed. This is done by using
the marketing mix parameters (Product, Pricing, Promotion, and Distribution). Second step is
to measure the effect of the competitors action. When these things are established, you can
move on to the recommendation, which should include a counter strategy.
Analyze
Start with the analysis of the competitors move. What exactly has the competitor changed?
Has a new product been launched?
Has the pricing changed significantly?
Have the promotion activities changed?
Has a new sales or distribution channel been launched?
What is the effect of the change in terms of market share?
If you find the effect significant, you should move on to analyzing the clients counter
strategy.
Should the move be imitated and how?
Does it require scale or scope capabilities that are not present today?
How can the necessary capabilities be obtained?
Advise
Your recommended strategy can be not to follow which requires the competitor move to
be unimportant (this is very seldom the answer). If your analysis shows that the client should
follow, this leaves them with two options: do it organically or by a merger/acquisition. If the
firm can manage this with current capabilities, then this should be your recommendation.
Another option is to hire people with the necessary skills (e.g. people from the competitor).
A complete different solution is to acquire or merge in order to counter the competitor move.
Go through the pros and cons of each of the options and present your final answer.
31
Company: Evaluation of M&A Target

Making recommendations on M&A targets is a typical client case at the top tier consulting
firms, hence it is also a common case used during case interviews. A typical question could be:
Should the client pursue an acquisition of the target company?
Structure
Target company
Acquire target?
Market performance
Strategic t
Deal economics
Market
performance
Analyze
Target company
Size
Protability
Development trend
Product portfolio
Customers
Size
Market growth
Competitors
Strategic t
Acquire resources e.g.:
Capacity
Distribution
Product line
Technology
Brand
Customers
Decrease cost e.g.:
Scale
Scope
Deal economics
NPV(fairprice)
Financing
Summarize the cost/benetsof the above element and present answer
Advise
No
32
Yes
Highlight potential issues, that the client
specically needs to have veried in the
due diligence phase
Structure
The structure includes an analysis of the target company itself, the relevant market, the
target companys fit with the acquirer, and a look at the economics behind the potential deal.
Analyze
Take a deep-dive into the four components of the analysis structure and seek out the answer
to the below questions. Ask for information from the interviewer as you drive the analysis.
Target company
Market performance
What is the size of the company?

How profitable is the company?

How is the market growing?
What is the development trend on key

financials?
What product does the company
make/sell?
Who are the customers?
Who are the competitors and how

competitive is the market?
Strategic fit
Why is target relevant for the acquirer?
(acquire resources or decrease cost)
Are there any cost synergies?
Are there any sales synergies?
Deal economics
What is the target worth for the
acquirer? (stand-alone value + synergy value)
How will the acquirer finance the
deal?
Advise
You should provide a clear yes or no recommendation to pursue the target. The argument
for your recommendation should be the sub-conclusions from the analysis. If you conclude
yes, acquire the target, it is a good idea to highlight potential issues that need to be verified
in the due diligence phase. These are the weak spots in your analysis.
33
Company: Company: Capacity Expansion

Case interviews frequently deal with cases about if and how to expand capacity. Clients
might be successful with a product line and cannot cope with the current demand. This case
question might be combined with a new market entry case. A typical capacity expansion
question is:
Should the client build a new plant or expand the existing facility?
Structure
Rationale
Options
How to expand capacity?
Market
Alternatives
Analyze
Rationale
Options
Demand for product

Availability of site
Revenue and prot gain Distance to customers
Distance to suppliers
Transport cost
Availability of labor
Technology
Expansion time
Investment
Market
Impact on market
supply
Competitor reactions
Alternatives
Outsourcing
Other
Advise
Summarize the cost/benets of the above element and present your recommendation of each
of the elements
34
No
Dont Expand
Recommended decision
Expand current
facility
Build new
facility
Yes
Other
Structure
The structure of the framework includes an analysis of the rationale behind the expansion.
It also covers the clients options. In this case, build a new plant or expand the current facility. The framework also includes a market element where the impact on the market supply is
analyzed. Finally, there are the alternatives to the clients suggestion such as outsourcing of
the production.
Analyze
Your analysis should seek answers to the below questions.
Rationale
How is the demand for clients products and why is it necessary to expand?
What are the reasons behind the expansion? (additional revenue and profit, strategic
value)
Options
What is the availability of the different sites?
What is the distance to the customers and suppliers?
How does the transport cost affect the picture?
What is the availability of labor?
Does a difference in technology and learning curve affect the comparison?
What is the timeframe for expansion for the different options?
What is the size of the investment for the different options?
Market
What is the impact on the market
supply? Will expansion lead to excess
capacity?
What is the likely response from competitors?
35
Alternatives
Are there any alternatives that the
client needs to consider? (e.g. outsourcing)
Advise
Take the interviewer through the options at hand, i.e. the pros and cons of the options and
present your recommendation. This is a case where you can and should be creative. Try to find
some other options for the client, like outsourcing or partnership. Even if the interviewer only
gives you two options, he/she will be impressed if you have good arguments for a third solution.
36
Company: Profit Hunt
Advise
Analyze
Structure
Profit is one of the more generic frameworks that can be used in its entirety or just some
of the elements, e.g. for cost reduction cases. A typical question could be:
How can the client increase their operating profits?
37
Structure
The framework has the traditional MECE structure that consultants use a lot. MECE stands
for Mutually Exclusive and Collectively Exhaustive and is a grouping principle that ensures data
can be divided into exhaustive subgroups with no factor overlapping the other. This framework
allows you to analyze both levers: revenue growth and cost reduction.
Analyze
The first step is to identify the revenue streams, since the revenue analysis must be performed per revenue stream. Make sure you know the relative size of the revenue streams.
Start with the largest, and work yourself down.
Price
How is the product priced?
What is the price elasticity?
How does the product differentiate itself from competing products?
(uniqueness and brand)
How is the companys bargaining
power?
Fixed cost
How does the fixed costs split look
like? What are the major items?
Has there been any change in the
split?
Do we have any competitor benchmarks? How do they compare?
Volume
How is the competition?
Are there any substituting products?
How is the market developing?
Which marketing mix is used? (promotion and distribution channels)
Variable cost
How does the variable costs split look
like? What are the major items?
Have there been any changes in the
split?
Do we have any competitor benchmarks? How do they compare?
Advise
Sum up your analysis and suggest a few major initiatives under each component. Each of
these should increase profits. For pricing strategies, please see the pricing framework. If you
have received some numerical information and financials, you should also calculate the profit
impact of your recommendations.
38
Product: Product Strategy
Advise
Analyze
Structure
How to market a product is a key issue for many marketing departments. A typical question is:
Which product strategy should we use for product X?
39
Structure
A product strategy is not just about the product. It is also about the surrounding elements
in the customers experience. That is why the structure of the framework focuses on not just
the product, but also attributes such as pricing, promotion, and distribution. The objective of
a product strategy is to find the optimal mix of the four components.
Analyze
Go through each of the four parameters. What is the client doing today? Are there any
unidentified opportunities within the parameters?
Product
What are the products features and
Unique Selling Points (USP)?
Is the product vertically or horizontally
differentiated?
Promotion
What are the promotion activities?
(customer reach and choice of media)
Any sales promotion activities?
Pricing
What is the pricing strategy? (see pricing framework)
What is the price discrimination practice?
What are the price campaign activities?
Distribution
How are the customers buying the
product?
What are the sales channels?
Advise
Based on the sub conclusions from your analysis, you should come up with a recommendation to the mix of the four components. Suggest actionable activities that can be launched
under each element.
40
Product: New Product Development
Advise
Analyze
Structure
The decision to develop a new project requires solid analysis, and that is why companies
often turn to management consultants for their advice. The problem is also widely used in
business case interviews.
Our client considers developing a new product. Should they proceed and start development?
41
Structure
When deciding on developing a new product, you should have an overview of the supply
and demand situation, a view on the product strategy, a view on the economics behind the
initiative (business case) and know how it fits in with the rest of the companys activities.
Analyze
Your analysis should evolve around the five elements in the structure. Find the answers
to the below questions and make sub conclusions along the way.
Demand
Supply
What are the products features and
What is the pricing strategy? (see pric-
Unique Selling Points (USP)?

Is the product vertically or horizontally
differentiated?
ing framework)
What is the price discrimination practice?
What are the price campaign activities?
Product strategy
What are the promotion activities?
(customer reach and choice of media)
Any sales promotion activities?
Business case
How are the customers buying the
product?
What are the sales channels?
Demand
How does the product fit in with the current portfolio?
How does the product fit with the overall company strategy?
Does the company have the necessary resources and capabilities?
Advise
Sum up the five elements and take a stand. If you recommend developing and launching
the product, explain how you would do it. Which steps would you do next? Use the content
from the product strategy to get inspiration for next actions.
42
Product: Pricing
Structure
Pricing a product is a classic management consulting discipline, and is often used in business case interviews. You will usually find pricing considerations as a part of some other business cases.
Our client is unsure of the pricing of a product. What do you think the price should be?
Advise
Analyze
Substitutes
43
Competitors products
and pricing
Substituting products
and pricing
Demand
Willingness to pay
Value creation
Financials
Marginal costs
Fully allocated costs
Break-even price
Structure
When you have understood the product you are dealing with, you can present the structure
of your analysis. In order to find suitable price strategy you need to analyze the substitutes,
the demand for the product and the financials behind a certain price choice.
Analyze
Go through the three components and tell the interviewer that your analysis will lead to
a presentation of a price strategy.
Substitutes
Demand
What are the competitors products
What are the customers willing to
and their pricing?

Which substituting products exist, and
what is their pricing? (look at products
that satisfy the same customer needs)
pay?
How much value does the product
produce for the customer?

Financials
What is the marginal cost of producing and distributing the product?
What is the total cost of the product? (with fixed costs allocated)
What is the break-even price?
Advise
Sum up your analysis and decide on one of these three pricing strategies:
Cost based price: Take a break-even cost and add markup
Competitor pricing: Price a product relative to competitors products and substituting
products
Value based pricing: Price the product based on the value that it creates for the customer
You should mention the different price ranges that each of these strategies would imply
and end with a strategy and price range recommendation. The interviewer might also ask you
to calculate the financial impact of this new price.
44
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MANAGEMENT

Management Consulting Business Case Frameworks

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The Six Success Factors in Management Consulting

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Cooperation with other people is essential as a management consultant; you work

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Prepare for Your

Recommended preparation plan

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Case solving preparation:

Fit interview preparation:

Different persons might be better at some

gerated and most consultants today have

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Failing to plan is planning to fail

93% doesnt make it to the interview rounds

Do not underestimate the importance of a great application, since the majority of

Know your frameworks and math

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Business Case Interviews

how a person performs under pressure, i.e.

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The Six Success Factors

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The Six Success

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Learn the business case frameworks

We will go through these different areas

Learn the Business Case

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in this guide and you will be prepared for the

Addition, subtraction, multiplication

Of course, the interviewer will not expect

tions requiring you to estimate a growth in

When shopping: add the numbers in

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Practice Business Case Solving

Improve Your Communication

your practice interview partner for feedback

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that is why we only work with four steps. The

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Listen and absorb

Find and use

Use the chosen

Know the case

Find and present

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silence can seem awkward.

The frameworks from this guide

framework is one that can break your

Management Consulting Business Case Frameworks

evant framework to the problem. If it does

correct your analysis if the interviewer thinks

What could be an answer to the

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impress the interviewer. Use a pen and paper

quantitative skills are insufficient.