Title of the Presentation

Subheading (if any)

Consulting Primer 2019

 Introduction

Title / Heading
What is consulting?
Consulting involves solving complex business problems and offering recommendations to companies in different industries. Consultant are
hired by companies to give an outsiders perspective.

Overview of Management Consulting

• Management consulting firms sell business advisory services to corporations, governments, and even non-profit organizations.
• Working closely with the senior management on the client side and understanding their business requirements.
• Intellectually stimulating work with the opportunity to build one’s skill sets
• Frequent travelling to client locations and building the relationship network with different clients

About us
Established in January 2004, the Consulting Club of IIM Indore, helps clients to solve problems by enhancing and exploring student
community’s interest in consulting. Our mission is to:
Attract the best consulting minds on campus
Solve the business problems of our clients with utmost commitment
Catalyze the engagement of current and future industry leaders via conversations
Aid the development of IIM Indore as a leading nurturing ground for consultants

Prepared in association with the Placement Preparation Committee, IIM Indore

 Introduction

Title / Heading
Events & Activities
Neetishastra
It is a national level consulting event introduced in 2012. India’s best consulting minds across B-Schools gather to solve real time consulting
problems of SMEs

Live Projects
Club offers high quality consulting services through live projects to the clients across various industries in India. Interested students use their
industry experience to give a different point of view to the clients.

Guest Lectures/Workshops
The club works towards conducting orientation sessions that sensitize and educate the participants about careers in consulting

Intra-college events
Events like MindF are conducted every year to develop and hone participants’ interest in the domain of consulting.

Building Knowledge Centre

The members interact and work with the esteemed faculty of IIM Indore and mentors of the club and publish articles and reports to build a
strong knowledge base of club which is leveraged during live projects.

Prepared in association with the Placement Preparation Committee, IIM Indore

 Case Frameworks

Vision & Mission Title / Heading

Industry Analysis Company Analysis Product Analysis Strategy Formulation Evaluation & Control

Porter’s 5 Forces Value Chain Analysis Porter’s Generic

Who we are ? BCG Matrix
PESTEL SWOT 4P Strategies
Who we want to be? Balanced Scorecard
4Cs/5Cs McKinsey 7S Strategy Market Sizing & Strategy Diamond
Segments Ansoff Matrix

Word Origin 5P’s of Strategy

Greek word Strategia, office of a general; linked to Strategos and
means ‘the science and art of using all the forces of a nation to
execute approved plans as effectively as possible during peace or
war’; strategy thus refers to deployment of troops; Once the
enemy has been engaged, attention shifts to tactics!
Vision and Mission
A Vision statement defines the desired future position of the
company.
A Mission statement defines the company’s business, its
objective and it’s approach to reach those objectives.
Both of these are often combined to get the company’s purpose,
goal and values. These statements are given by Senior managers
or founders. Companies don’t change their vision and mission
statement frequently and generally it remains constant
subjected to external environment.
The 5 Ps of Strategy were created by Henry Mintzberg in
1987. Each of the 5 Ps stands for a different approach to
strategy:
Plan ❑ As a Plan, strategy needs to be developed in
advance and with purpose
Pattern Ploy
❑ As a Ploy, strategy is a means of outsmarting the
5P’s of competition
Strategy
❑ With strategy as a Pattern, we learn to appreciate that
what was successful in the past can lead to success in
the future
Position Perspective
❑ With Position, strategy is about how the organization
relates to its competitive environment, and what it can
do to make its products unique in the marketplace
❑ Perspective emphasizes the substantial influence that
organizational culture and collective thinking can have
on strategic decision making within a company

Prepared in association with the Placement Preparation Committee, IIM Indore

 Case Frameworks

Title / Heading
Porter’s 5 Forces Framework
The industry level analysis is usually done through Porter’s 5
forces framework. It helps a firm to decide whether to enter an
industry or not. Obviously, you would realize that for an industry
to be attractive for entry, you would want all these 5 aspects
to be categorized as low.

SUPPLIER POWER THREAT OF NEW ENTRANTS INTER-FIRM RIVALRY THREAT OF SUBSTITUTES BUYER POWER

• Supplier concentration
• Importance of volume to
supplier
• Differentiation of inputs
• Impact of inputs on cost or
differentiation
• Switching costs of firms in the
industry
• Presence of substitute inputs
• Threat of forward integration
• Cost relative to total purchases
in industry
• Barriers to entry
• Absolute cost advantage
• Proprietary learning curve
• Access to inputs
• Government Policy
• Economies of scale
• Capital requirements
• Brand identity
• Switching costs
• Access to distribution
• Expected retaliation
• Proprietary products
• Exit barriers • Switching costs • Bargaining leverage
• Industry concentration • Buyer inclination to substitute • Buyer volume
• Fixed costs Value added • Price-performance trade-off of • Buyer information
• Industry growth substitutes • Brand identity
• Intermittent overcapacity • Price sensitivity
• Product differences • Threat of backward
• Switching costs • Integration
• Brand identity • Product differentiation
• Diversity of rivals • Buyer concentration vs. industry
• Corporate stakes • Substitutes available
• Buyers' incentives

Prepared in association with the Placement Preparation Committee, IIM Indore

 Case Frameworks

PEST Analysis
Title / Heading
PEST analysis deals with the analysis of macro-environment that
comprises Political, Economic, Social and Technological factors. It
can also be extended to PESTEL by adding Environmental & Legal
factors. The various factors that come under this analysis are:
BCG Matrix
The BCG matrix, also known as ‘Product Portfolio Matrix’ provides a framework for
allocating resources among different business units and allows one to compare
many business units at a glance.

Political factors:
• Tax policy
• Employment laws
• Environmental regulations
• Trade restrictions and
tariffs
• Political stability
Question Marks – They require huge cash to maintain or gain market share. If ignored, then question
marks may become dogs, while if huge investment is made, and then they have potential of
becoming stars.
Social Factors: Dogs – They don’t require cash nor they generate cash. Generally retrenchment strategies are
• Health consciousness adopted because these firms can gain market share only at the expense of competitor’s/rival firms.
• Population growth rate
Star - They may generate cash but because of a fast growing market, stars require huge investments
• Age distribution
• Career attitudes to maintain their lead. If successful, a star will become a cash cow when the industry matures.
• Emphasis on safety Cash Cow - Cash cows require little investment and generate cash that can be utilized for investment
in other business units.

Economic factors: Technological:

• Economic growth • R&D activity
• Interest rates • Automation
• Exchange rates • Technology incentives
• Inflation rate • Rate of technological
change

Prepared in association with the Placement Preparation Committee, IIM Indore

 Case Frameworks

SWOT Analysis Title / Heading McKinsey 7S Framework

Environmental factors internal to the firm usually can be McKinsey 7S framework is useful in determining the sources of competitive
classified as strengths or weaknesses, and those external to the advantage for the company and to facilitate mergers and organization change.
firm can be classified as opportunities or threats.

Hard Factors: Easier to identify and change by

STRENGTHS
❖ Technological kills
❖ Production Quality
❖ Scale of Operation
❖ Management Style
❖ Distribution Channel
❖ Leading Brand’s Strength
❖ Customer Loyalty/Relationship
OPPORTUNITIES management by influence
❖ Changing Customer Preferences Strategy – Structure - Systems
❖ Globalized/Enlarged Economy
❖ Technological Advantages
Soft Factors: Less tangible and difficult to
❖ Favorable Regulatory Policies
❖ Low Tax Regimes describe and influenced by culture
❖ Demographic Changes – age factor Shared Values – Skills – Staff - Style
❖ New Distribution Channels

Ansoff Matrix Product

WEAKNESSES THREATS Ansoff Matrix also known as Existing New
❖ Absence of Critical Skills ❖ Shifting Customer tastes ‘Product/Market Expansion Grid’
Market New Product

❖ Unreliable Production Quality
❖ Sub-Optimal Scale of Operation
❖ Management Bottleneck
Existing
❖ Restricted Geographical Access helps us to get clarity on the strategy
❖ Technology Denial/Obsolescence Penetration Development
to be adopted, when a firm plans to
❖ Adverse Regulatory Changes
expand.

Market
❖ Poor Access to Distribution ❖ Aging of the population
❖ Weak Brand – Me Too Brand ❖ Emergence of newer distribution Ex: A company whose strength is its
❖ Unreliable Product/Service channel Market Diversification
customer base would go for New Development

New
Product Development (ex. Apple Inc.)
and sell new products to the same
customer
Prepared in association with the Placement Preparation Committee, IIM Indore
 Case Frameworks

Value Chain AnalysisTitle / Heading 4Ps

It is used to identify the value adding activities for a given firm This framework is one of the most popular and is used in new product
and then changing them to achieve the required differentiation or launches, New market development and Market share issues.
to reduce cost as per strategy.
Product: Price:
Raw Material • Packaging Issues • Firm’s COGS
Relationship with Suppliers • Brand Equity • Past Price
• Positioning • Substitute Price
Place: Promotion/Branding:
• Distribution Channels • Communication Objective
Procurement • End User vs. Intermediaries • Barriers to Communication
• Control on Delivery • Push vs. Pull Strategy
Infrastructure • Potential Shift in Channel • Market Budget
Margin
Technology Development
Human Resource Management 4Cs/5Cs
It is a marketing framework to analyze the environment in which the company
Marketing After Sale
operates.
Input Operations Output & Services Margin
Sales Company Find competitive advantage / Resource by VRIO (Valuable, Rare,
Inimitable, Organized)
Collaborators Buyers and Supplier Selection
JIT Delivery Warranties
Bonus plans Customers Analyze if company is able to attain SOM (Serviceable Obtainable
Market)
Labor
Capital utilization Channels of distribution Cost of customer acquisition Competitors Competitor Moves & Market Signals
Cycle time & Quality Intermediaries Sales force issues Context Factors affecting business using PESTEL analysis

Prepared in association with the Placement Preparation Committee, IIM Indore

 Case Frameworks

Strategy Diamond Title / Heading Porter’s Generic Strategy

Strategy diamond is a tool that will help you understand
how clearly and completely you have crafted a strategy.
As per Michael Porter, a firm's strength ultimately falls into
one of the two strategies – cost advantage and
differentiation. By applying these strengths in either a
broad or narrow scope, three strategies result: cost
leadership, differentiation and focus. These are called
generic strategies.

Prepared in association with the Placement Preparation Committee, IIM Indore

 Guesstimates

Title / Heading
A ‘guess-estimate’ or ‘guesstimate’, essentially requires a Clarify & summarize the Structure your
State proxy,
assumptions,
Calculations &
candidate to arrive at a quantitative estimate for a variable problem approach sanity check
formulae
based on sound assumptions and logical reasoning.
e. g. Estimate the market for air conditioners in Bangalore in 1 year.
Guesstimates test you on your
➢ Assumptions
✓ Ability to handle ambiguity
The population of Bangalore is 80 lakhs approx. Two types of ACs sold. Domestic use and
✓ Ability to handle shock and panic situations Commercial use. For the purpose of this guesstimate we will assume only domestic ac sales.
✓ Analytical ability ➢ Methodology
✓ Creativity • ACs can only be afforded by middle class and above
Some numbers to be aware of before you start • Percentage of population falling in above category: 40% (approx.) = 32lakhs

• Population of major countries & cities (for proxy)
For Example: To name a few countries - India, USA,
China, Japan, UK
To name a few cities – Delhi, Mumbai, Bangalore,
Kolkata
• GDP, Area, Demographics of major countries
(for example: Japan v/s India or China v/s USA)
• Distribution of population in rural and urban areas(in terms of
percentage)
• Distribution of income
• Average size of household: 4
• Number of households: 8 lakhs
• Bangalore has pleasant weather throughout the year hence people who can avoid
spending the money will do so.
Also fresh grads and students form a very large percentage of the population. They will
also avoid buying ACs even though they fall in the target demographic.
• Number of households thinking of buying AC = 60% of target = 5 lakhs approx.
• Average age of an AC = 5 years
• Average number of ACs in a household of 4 = 2
• Number of target ACs = 10 Lakh
Answer: The number of sales of air conditioners in Bangalore in a
year =10/5 = 2lacs.

Prepared in association with the Placement Preparation Committee, IIM Indore

 Caselets

Case Interview Title / Heading Approach for Business Case Interviews

A case interview is typically the most important round in the selection process of
a consulting firm. ▪ Listen to the question
properly
What is a case? OPEN THE CASE ▪ Paraphrase the question to
• A business issue/problem company is facing in a few sentences confirm your understanding
• Within a given time-frame, candidate is expected to approach the case with
limited available data
• A logical and structured approach to solution is often more important than ▪ Describe the approach
the final solution STRUCTURE ▪ Identify the problem type
▪ Map your framework
Two Common case interview methods
• ‘Go with the Flow’ cases (typical of most consulting firms)- You will
determine which areas to explore and lead the discussion, i.e. drive the case
• Command and control (typical of McKinsey and Deloitte S & O)- Within a ▪ Ask relevant questions
given time-frame, candidate is expected to approach the case with limited ▪ Bucket the information
ANALYZE ▪ Prioritize issues & use hints
available data
▪ Segment and Isolate
Pl. go through the resources to deep dive in consulting
• Case in Point – 7th edition
• https://www.caseinterview.com/case_interview_frameworks.pdf ▪ Synthesise the discussion
• https://www.quora.com/What-is-the-best-approach-to-solve-guesstimates CLOSE THE CASE ▪ Develop final recommendation
• http://mconsultingprep.com/case-interview-market-sizing-guesstimate/ ▪ Relate back to the Problem
statement

Prepared in association with the Placement Preparation Committee, IIM Indore

 Caselets

Title
ABC co. /is Heading
experiencing decline in profits. Analyze the situation.
Explore it further to
Hypothesis and
Suppliers/ Import identify problem with
Assumptions
suppliers
Ask Questions:
What kind of business ABC is in?
Who are competitors? Raw Material
Transportation
Is this a recent trend? Costs
Is it a market-wide trend? Synthesize and
Costs Summaries what you
Market Costs
have done
Selling and increased
Distribution Costs

Profits
Final Problem
Keep stating your Identification and
No. of Customers assumptions and incorporate
Recommendations
feedback

Rephrase Problem Revenues

As I understand, profits have been going
down in the last 3 months and this has Market Share in If given a chance, please
comparison to peers do ask them some
not been experienced by other players.
questions
Let’s explore the reason for this

Prepared in association with the Placement Preparation Committee, IIM Indore

 Assignment

Title / Heading
Step into Consultant’s shoes and solve the following problems:

1. With good earnings in 2018, TCS is hungry for acquisitions and wants to diversify. It is planning to enter into FMCG sector
with a launch of new product in 2019.
Choose any FMCG Product (e.g. Toothpaste)
a. Give the factors which must be considered and find the sources of competitive advantages if any
(Hint: Use 2-3 frameworks mentioned in the primer)
b. Find the Market Size and propose a target market share using 4P
c. Make a Strategy for entry into new market and fit it into Strategy Diamond (Brainstorm)

2. Calculate the total number of Wired internet users in India including corporate connections. Mention your assumption if any.

Upload your submissions in pdf format with size less than 5 MB

in the link mentioned below: Candidates with best submissions will be given direct
https://forms.gle/kuEwfi9KPDRQ1oqr6 entry to the interview of Consulting Club’s selection
process.
Name convention “First Name_Surname_CAT ID”
e.g. “Abhishek_Rai_7054471.pdf”

Prepared in association with the Placement Preparation Committee, IIM Indore

 Our Team

Title / Heading

Abhilash Bire Juhi Nirokhekar Rupakshi Soni Sagar Sonawale Swarnava Majumdar

Prepared in association with the Placement Preparation Committee, IIM Indore