Consulting Primer

Consulting Primer
The Consulting Club of IIM Indore

Prepared in Association with Placement Preparation Committee

Prepared in association with Placement Preparation Committee

 Consulting Primer

Introduction
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

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 Consulting Primer

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.

Mentor-Mentee Session
The club conducts one on one case solving sessions to prepare the PGP-1 students for their Summer Internships & PGP-2 students for their final
Placements.

Intra-college events
Numerous events are conducted during the 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.

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 Consulting Primer

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

Word Origin 5P’s of Strategy

Greek word Strategia, 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.
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The 5 Ps of Strategy were created by Henry Mintzberg in 1987. Each of the 5
Ps stands for a different approach to strategy:
❑ As a Plan, strategy needs to be developed in advance and with
purpose
❑ As a Ploy, strategy is a means of outsmarting the competition
❑ With strategy as a Pattern, we learn to appreciate that what was
successful in the past can lead to success in the future
❑ 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
 Consulting Primer

Case Frameworks
Porter’s 5 Forces Framework

It helps a firm to decide whether to enter an industry or not.

PEST Analysis BCG Matrix SWOT Analysis

LOW HIGH
POLITICAL FACTORS SOCIAL FACTORS STRENGTHS OPPORTUNITIES
• Tax policy • Health consciousness • Technological kills • Changing Customer

• Employment laws
• Environmental
regulations
• Trade restrictions and
tariffs
LOW
• Population growth rate • Production Quality Preferences
• Age distribution • Scale of Operation • Globalized Economy
• Career attitudes • Distribution Channel • Favorable Regulatory
• Emphasis on safety • Loyalty/Relationship Policies
• Low Tax Regimes

ECONOMIC FACTORS TECHNOLOGICAL WEAKNESSES THREATS

• Economic growth
• Interest rates
• Exchange rates
• Inflation rate
• R&D activity • Unreliable Production • Shifting Customer tastes
• Automation Sub-Optimal Scale of • Restricted Geographical
• Technology incentives Operation Access
• Rate of technological • Poor Access to • Obsolescence
change Distribution • Adverse Regulatory
HIGH

• Weak Brand Changes

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 Consulting Primer

Case Frameworks
Value Chain Analysis 4Ps

It is used to identify the value adding activities for a given firm and then This framework is one of the most popular and is used in new product
changing them to achieve the required differentiation or to reduce cost as per launches, New market development and Market share issues.
strategy. Product: Price:
• Packaging Issues • Firm’s COGS
Raw Material
• Brand Equity • Past Price
Relationship with Suppliers
• Positioning • Substitute Price
Place: Promotion:
Procurement • Distribution Channels • Communication Objective
• End User vs. Intermediaries • Barriers to Communication
Infrastructure • Control on Delivery • Push vs. Pull Strategy
Margin
Technology Development • Potential Shift in Channel • Market Budget
Human Resource Management
5CS
Marketing After Sale It is a marketing framework to analyze the environment in which the
Input Operations Output & Services Margin company operates.
Sales
Company Find competitive advantage / Resource by VRIO (Valuable, Rare,
Inimitable, Organized)
JIT Delivery Warranties, Bonus plans Collaborators Buyers and Supplier Selection

Cost of customer acquisition Customers Analyze if company is able to attain SOM (Serviceable
Labor Obtainable Market)
Channels of distribution Sales force issues
Capital utilization
Cycle time & Quality Intermediaries Competitors Competitor Moves & Market Signals
Context Factors affecting business using PESTEL analysis
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 Consulting Primer

Case Frameworks
Strategy Diamond Porter’s Generic Strategy

Strategy diamond is a tool that will help you understand how As per Michael Porter, a firm's strength ultimately falls into one
clearly and completely you have crafted a strategy. of the two strategies – cost advantage and differentiation.

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 Consulting Primer

Guesstimates
A ‘guess-estimate’ or ‘guesstimate’, essentially requires a
State proxy,
candidate to arrive at a quantitative estimate for a variable Clarify & summarize the Structure your
assumptions,
Calculations &
based on sound assumptions and logical reasoning. problem approach sanity check
formulae
Guesstimates test you on your Example: Estimate the market for air conditioners in Bangalore in 1 year.
✓ Ability to handle ambiguity
➢ Assumptions
✓ Ability to handle shock and panic situations The population of Bangalore is 80 lakhs approx. Two types of ACs sold. Domestic use and
✓ Analytical ability Commercial use. For the purpose of this guesstimate we will assume only domestic ac sales.
✓ Creativity ➢ Methodology
Some numbers to be aware of before you start • ACs can only be afforded by middle class and above
• Percentage of population falling in above category: 40% (approx.) = 32lakhs
• Population of major countries & cities (for proxy) • Average size of household: 4
For Example: To name a few countries - India, USA, • Number of households: 8 lakhs
China, Japan, UK • Bangalore has pleasant weather throughout the year. Hence, people who can avoid AC
To name a few cities – Delhi, Mumbai, Bangalore, Kolkata might avoid spending money will on it.

• 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
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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.
 Consulting Primer

Caselets
Case Interview 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 ANALYZE ▪ Bucket the information
available data ▪ Prioritize issues & use hints
▪ Segment and Isolate
Please 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
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 Consulting Primer

ABC co. is 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

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 Consulting Primer

Assignment
Step into Consultant’s shoes and solve the following problems:

1. With the onset of Covid-19 in the year 2020, the demand of cars and automobiles has gone down significantly. Hyundai is planning to
diversify in manufacturing of a new product given its current expertise, plants and human resource (please make appropriate assumptions
accordingly).
Choose any such Product (e.g. Ventilators)
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’s
c. Make a Strategy for entry into new market and fit it into Strategy Diamond (Brainstorm)

2. Calculate the total number of sanitizer bottles to be deployed in the IIM Indore campus. Mention your assumption if any.
(You will need to research about the campus before making any assumptions)

Submission Details:
• Upload your submissions in pdf format with size less than 5 MB in this link submit here
• Name convention “First Name_Surname_CAT ID” (e.g. “Abhishek_Rai_7054471.pdf”)
• Deadline as per Placement Preparation Committee’s Mail

*Candidates with best submissions will get direct entry

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 Consulting Primer

The Team

Kamakshi Prachi Arushi

Shriya Dhanapriya Abhisika

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