Top Business Consulting Frameworks

Top Business Consulting
Frameworks
Helpful Strategic Resources for the Independent Consultant

Top Business Consulting
Frameworks
The 3C’s Porter’s Five

Introduction
Strategy Model Forces
BCG
SWOT and The McKinsey
Growth-Share
PEST 7S Framework
Matrix
MECE
Conclusion
Framework
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INTRODUCTION
Frameworks in this guide
Independent professionals utilize business frameworks to assist in getting
The 3 C’s
client agreement and buy-in on project goals, scope and deliverables.
Use of a framework can proves helpful not just in achieving buy-in from Porter’s 5 Forces
a client, but also in identification and understanding of all aspects of the SWOT Analysis
issue at hand, leading to a more complete and successful final product— SWOT Matrix
and happier clients. PEST Analysis
The frameworks included in this guide are commonly used models. There BCG Matrix
is no “winner” or best framework, as each serves a different purpose. The McKinsey 7S
These frameworks can be used individually or in tandem to frame thinking MECE Framework
and increase project efficiency.
THE 3C’S STRATEGY MODEL

OVERVIEW Corporation
The 3C’s model is a classic strategy model. Whether you are a management
consultant hired to improve costs, or a technology consultant tasked with
adding infrastructure, the 3C’s model can support analyzing intrinsic and
extrinsic factors to develop sustainable solutions.
Customer Competition
The 3C’s—customer, competition, company—is a strategy framework
developed by Japanese strategy guru, Kenichi Ohmae. The model asserts
that in the construction of a business strategy, information gathering and analysis should be centered on
three key factors: the customer, the competition, and the corporation. Proper analysis can help companies
achieve a sustained competitive advantage.
According to Ohmae, it is only by integrating these three C’s that a sustained competitive advantage can exist.
Think of these key factors as the strategic triangle of independent contracting. As an independent, you have
the ability to set a flexible schedule and work from home, but you are also responsible for providing your own
job security. It is important to think through both the financial and emotional considerations of supporting
your own income.
One of the key roles of an independent consultant is problem solver.

CORPORATION
Roles of the Corporation
A corporation needs strategies to maximize its strengths relative to the
competition in the functional areas that are critical to success in the 1. Selectivity and Sequencing
industry. The corporation plays roles such as: 2. Case of Make or Buy
Selectivity and sequencing: The company does not have to have a 3. Improving Cost-
clear lead in every function in order to win. If it can gain a decisive effectiveness
edge in one key function, it will eventually be able to pull ahead of the
competition in other functions that may currently be mediocre.
A case of make or buy: When faced with rapidly rising wage costs, it becomes a critical decision for a
company to subcontract a major share of its assembly operations. Its competitors may not be able to shift
production so rapidly to subcontractors and vendors, and the resulting difference in cost structure and/or
in the company’s ability to cope with demand fluctuations could have significant strategic implications.
Improving cost-effectiveness: Cost-effectiveness can be improved in three ways:
1. By reducing basic cost more effectively than the competition.

Example: Taking a bigger step to look at labor costs differently than others in the same industry and
leverage technology to increase operating efficiency.
2. By exercising greater selectivity in orders accepted, products offered, or functions to be performed.

Example: Reducing the product line and removing low-performing items that use disproportionate
resources.
3. By sharing the cost burden of certain shared functions among the corporation’s other businesses or even
sharing these resources with other businesses.
Example: Outsourcing accounting or finance to a third-party firm.
The 3C’s framework considers how strategic decisions made by corporations will affect the
competitive environment.
COMPETITION
According to Kenichi Ohmae, proper analysis of the firm includes looking at where business functions stand
out versus the competition. This analysis ranges from purchasing, design, and engineering, to sales and
servicing. Analysis strategies may include:
The power of an image: When product performance and mode of distribution are difficult to differentiate,
image may be the only source of positive differentiation.

Capitalizing on profit/cost-structure differences: Companies can exploit
HIto-Kane-Mono DefInItIons
the difference in source of profit, such as profit from new product
sales, or profit from services. another option is to strategically exploit Hito = People
the difference in the ratio of fixed cost to variable cost. For example, a Kane = Money
company with a lower fixed cost ration can lower prices in a sluggish Mono = things
market and win market share.
Hito-Kane-Mono: A favorite phrase of Japanese business planners is hito-kane-mono, or people, money,

things—fixed assets. They believe that streamlined corporate management is achieved when these
three critical resources are in balance without any waste. Of the three critical resources, funds should
be allocated last. The corporation should first allocate management talent based on the available mono
(things), such as plants, machinery, technology, process know-how, functional strengths, and so on. Once
these hito (people) have developed creative, imaginative ideas to capture the business’s upward potential,
the kane (money) should be allocated to the specific ideas and programs generated by individual
managers.
CUSTOMER
Ohmae prioritized the customer, saying: “There is no doubt that a corporation’s foremost concern ought to
be in the interest of its customers rather than that of its stockholders and other parties. In the long run, the
corporation that is genuinely interested in its customers is the one that will be interesting to investors.”
Ohmae argued the following in regard to the customer:
Segmenting by objectives: Differentiation is done in terms of the different ways different customers use
the product. For example, some people drink coffee to boost their energy or to wake up, while others
drink it as a way to relax or socialize.
Segmenting by customer coverage: This kind of strategic segmentation emerges in comparison to the
spend of its competitors. In the cost-versus-coverage relationship, there appears to always be a point of
diminishing returns. Therefore, the corporation is tasked with optimizing its range of market coverage
(geographical or channel) so that its cost of marketing will be advantageous relative to the competition.
Re-segmenting the market: In a fiercely competitive market, the corporation and its head-on competitors
are likely to be dissecting the market in similar ways. Over time, the effectiveness of a given initial
strategic segmentation will tend to decline. When this occurs, it is beneficial to select a small group of key
customers and reexamine what they are really looking for in the market.
Changes in the customer mix: Market forces can alter the distribution of the user-mix over time by

influencing distribution channels, demography, customer size, and more. The market segment change
calls for shifting the allocation of corporate resources and/or changing the absolute level of resources
committed in the business.
Keeping your customer or client happy leads to repeat business!
PORTER’S FIVE FORCES

OVERVIEW
Porter’s Five Forces is a useful tool in helping you to harness both the power of your current competitive
position as well as a planned, future position. You can use the insights to leverage your strengths, improve
your weaknesses and avoid making missteps. Whether assessing your own business plans—such as
transitioning form employee to independent consultant, or working with clients to assess adding a new
product or service—or moving into a new market, Porter’s provides a framework to aid you in making
strategic decisions.
’Porter’s five forces’ have shaped a generation of academic research and business practice.” –
Editor, Harvard Business Review

THE FIVE FORCES
According to Michael Porter, the mastermind behind the Five Forces, the rules of competition in any
industry—domestic or international—are embodied in five competitive forces as outlined below.
PORTER’S 5 FORCES
Threat of
new entrants
Bargaining power Rivarly among Bargaining power

of suppliers exisiting firms of buyers
Threat of substitute
products or services
Traditionally, Porter’s Five Forces model has been used to identify whether or not new products, services, or
businesses have the potential to be profitable. It can help you to understand the strength of your current
competitive position, as well as a position you may be considering moving into in the future.
The five forces that Porter suggests drive competition are:
1. Threat of new market entrants

A market that is profitable and yields high returns will attract many new entrants and can weaken
your market position. If you have strong and durable barriers to entry, such as protection of your key
technology, economies of scale, and brand equity, you can preserve and leverage a favorable position.
2. Bargaining power of buyers

If you only deal with a few powerful buyers, there is risk that they can dictate terms to you and drive down
pricing. Among the consideration to access the bargaining power of buyers are the number of customers,

size of orders, price sensitivity, cost of switching, and the ability to
Porter’s 5 Forces
substitute.
1. Threat of new entrants
3. Existing competitive rivalry between suppliers
Your position is impacted by the number and capability of your 2. Bargaining power of
competitors. If you have a number of competitors that offer equally buyers
attractive products and services, buyers and suppliers can go elsewhere 3. Threat of substitutes
if they don’t get a good deal from you. Conversely, if no one else can do 4. Bargaining power of
what you do, you have tremendous competitive strength. suppliers
4. Power of suppliers 5. Rivalry among existing
If you have a small number of suppliers that provide a unique product firms
or service for key inputs, there is a risk that they can drive up your
supplier prices. The number of suppliers, uniqueness of offerings and cost of switching are all factors to
consider in how powerful your suppliers are and the ease in which they can drive up prices.
5. Threat of substitute products (including technology change)

If substitution is easy and viable, it can weaken your power in the market. For example, if a company
supplies a unique software product that automates a key process, buyers may substitute by outsourcing
or doing the process manually.

SWOT AND PEST A SWOT ANALYSIS CAN BE USED
OVERVIEW TO EVALUATE:
Most independent consultants share a penchant for planning. A company (position,

From the decision to go independent to managing client projects, commercial viability, etc.)
independents know the value of planning for success. Before you A product or brand
formulate a plan, however, you have to understand where you are
A new business idea
and what factors will help or hinder your success.
A strategic option, such as
SWOT and PEST are simple but useful tools that can be used to
entering a new market or
launch a strategy formulation process or as a more sophisticated
launching a new product
strategy tool. You can use the tools in the proposal process to gain
the deeper understanding of your client’s business, present how An opportunity for partnership
your solutions align with their needs, or guide decisions on client or acquisition
projects. Project planning and

management
SWOT ANALYSIS
The SWOT Analysis framework is used to evaluate the Strengths, Personal planning (starting
Weaknesses, Opportunities, and Threats of a venture or project. a business, investments, life

change, etc.)
Strengths: Characteristics of the business or project team that
give it an advantage over others.
Weaknesses (or Limitations): Characteristics that place the team at a disadvantage relative to others.
Opportunities: External chances to improve performance (e.g. make greater profits) in the environment.
Threats: External elements in the environment that could cause trouble for the business or project.

STRENGTHS WEAKNESSES
Examples: Examples:
Brand equity Lack of differentiation
Patented products or processes Damaged reputation
Technology Low quality
Business location High cost structure
Innovative products or services
OPPORTUNITIES THREATS
Examples: Examples:
Developing market Competing innovative product or service
New market segment Price wars
Unmet customer need New entrant in home market
Removal of international trade barriers New government regulations affecting your cost or
process
Taxation introduced on your product or service
SWOT MATRIX
The SWOT matrix (also known as a TOWS matrix) can help you to develop strategies that take the SWOT
profile into account.
S-O Strategies pursue opportunities that are a good fit to the company’s strengths
W-O Strategies overcome weaknesses to pursue opportunities
S-T Strategies identify ways that the company can use its strengths to reduce its vulnerability to external
threats
W-T Strategies establish a defensive plan to prevent a company’s weaknesses from making them highly
susceptible to external threats
Strengths Weaknesses
Opportunities S-O Strategies W-O Strategies
Threats S-T Strategies W-T Strategies

Develop and assess multiple strategies before deciding which path will be most successful.
PEST ANALYSIS
PEST helps you understand the broader Political, Economic, Socio-Cultural, and Technological environment in
which you operate. PEST is a helpful tool when you are beginning operations in a new country or region.
Use the prompts of PEST to brainstorm relevant factors. Next, identify information that applies to the factors.
Then, you can draw conclusions.
Political Economic Socio-cultural Technological
Conclusions. Tax Stage of business Population growth Automation

policy cycle rate and age profile Impact of emerging
Government type Unemployment and Health of population technologies
and stability labor supply Population Research &
Employment laws Interest rates employment patterns development activity
Trade restrictions and Economic growth Socio-cultural Impact of technology

tariffs changes transfer

BCG MATRIX
OVERVIEW
In today’s fiercely competitive business environment, it is more important than ever to be strategic in how you
allocate resources. When working with large clients with multiple products, services, or business units, you
may be asked with helping to assess the best use of resources.
The BCG Growth-Share Matrix provides a framework for deciding how to use resources. It is also helpful
in assessing each product or business units’ ability to continuously generate profit. Are there products or
services that bring in major cash, but have no room for growth? What products or services have high market
share and high potential for growth? BCG can help you answer these questions and formulate a strategy
for your business or your client’s business that will ensure a strategic deployment of resources to maximize
return.
BCG MATRIX
The BCG Growth-Share Matrix was developed by Boston Consulting Group in the 1970s. The model was
developed to manage a portfolio of different business units or major product lines.
The Matrix displays the various business units or product lines on a graph of the market growth versus
market share relative to competitors. Resources are allocated to each according to where they are on the grid
as follows:
QUESTION MARKS: LOW MARKET SHARE/HIGH MARKET GROWTH

Question Marks might become Stars and eventual Cash Cows, but if nothing is done to change the market
share, they could just as easily absorb effort with little return.
DOGS: LOW MARKET SHARE/LOW MARKET GROWTH

Companies often invest high dollars in turn-around plans for dogs. Dogs have a low market presence and it
would take a great deal of work to get noticed. Coupled with low market growth, improvement is difficult.
CASH COWS: HIGH MARKET SHARE/LOW MARKET GROWTH

Products and business units in this quadrant are well established, making it easier to get attention and to
exploit new opportunities. However, the market is not growing so opportunities are limited. Cash cows can
help fund new Stars.
STARS: HIGH MARKET SHARE/HIGH MARKET GROWTH

Business units and products in this quadrant use large amounts of cash, but are also leaders in the business,
typically generating large amounts of cash.

The BCG Matrix is used for strategic allocation of resources, but can also be sued to project the trajectory of a
company. Optimally, on a BCG Matrix, a business would continuously generate future Cash Cows or Stars.
BCG MATRIX
High
Question Marks Stars

Market Growth
Dogs Cash Cows
Low
Low Market Share High
Optimally, on a BCG Matrix, a business would continuously generate future Cash Cows or Stars.

THE MCKINSEY 7S FRAMEWORK
OVERVIEW
The McKinsey 7S Framework is a tool to help you find and fix internal organizational problems. Whether
you have been hired to work with a new management team, or are working on a project to develop and
implement a new strategy, this tool can support your strategic analysis.
7S FRAMEWORK
The McKinsey 7S Framework was developed by two McKinsey consultants. The framework is a useful tool
in assessing organizational effectiveness. The basic premise of this framework is that there are 7 internal
aspects of an organization that need to be aligned if it is to be successful. There are many situations where it
is helpful to gain an alignment perspective, including:
To improve the performance of a company
To align departments and processes during a merger or acquisition
To determine the best way to implement a proposed strategy
To examine the likely effects of future changes within a company
The 7 interdependent elements of the model are categorized as hard or soft elements
Hard elements Soft elements
Strategy Shared values
Structure Skills
Systems Style
Staff
Hard elements are easier to define and management can influence them. These hard elements include
strategy statements, organizational charts and reporting lines, and formal processes or IT systems. Soft
elements are not as tangible and can be more difficult to describe. These elements are as important as hard
elements, but are influenced more by the culture rather than by the management.
The 7S Model is based on the theory that all 7 elements need to be aligned and mutually reinforcing for an
organization to perform well. You can use the model to identify areas that need realignment or that need to

maintain alignment during change such as restructuring, mergers, new systems, or change of leadership.
The illustration below depicts the interdependency of the elements.
Structure
Strategy Systems
Shared
Values
Skills Style
Staff
SAMPLE QUESTIONS
To utilize the 7S model, identify key stakeholders and relevant experts to gather information about the 7
elements. For example, to determine if an organization has clear goals and a vision that is communicated
throughout the organization, you might ask: Does the organizational structure support objectives and goals?
Summarize the findings in a report that can be used for further discussion.
Depending on the element you are looking to evaluate, here are some sample questions you might ask:
Strategy: Is there a clear vision along with goals that drive the organization? Are these shared among staff?

Structure: How are the functions and roles of
departments and units organized? What are the roles and Strategy: The long term scope and
responsibilities? Does the structure support strategic and direction of the company
organizational goals?
Structure: The structure of the
System: Do HR, financial, and technological systems organization and reporting lines
support objectives? Are these monitoring and evaluation
Systems: The procedures, processes
systems?
and systems, both formal and informal,
Style: What is the management style? What is the level of that characterize how work gets done
communication? How do managers spend their time?
Shared Values: Core values of the
Staff: Are staffing resources adequate? How effectively is company that are evidenced in the
the staff being used? What is the level of staff motivation? company culture and general work ethic
Skills: What are the organization’s core capabilities? What Style: The company’s adopted style of
are they best at doing? Are there opportunities for training leadership
or knowledge sharing?
Staff: The employees and how they are
Shared Values: What are the organization’s values, trained, motivated and developed
customs, and principles that guide the organization’s
Skills: The capabilities and competencies
behavior? To what extent are core professional values
of the company
internalized?

MECE FRAMEWORK Mutually exclusive: Information
OVERVIEW should be grouped into

categories so that each category
There is an old adage that says the best way to eat an elephant is one
is separate and distinct without
bite at a time. This wisdom can be applied to problem solving as well.
any overlap
In business, many problems are not easily solved with black and white
Collectively exhaustive: All of the
answers. You are often faced with problems that have overlapping
categories taken together should
issues. The MECE Framework helps to break down problems into
deal with all possible options
distinct categories so it is easier to assess both the problem as well as
without leaving any gaps.
proposed solutions.
MECE FRAMEWORK M utually
The MECE Framework is one of the hallmarks of problem solving at E xclusive

McKinsey Consulting and has become widely used in the consulting C ollectively
industry. MECE stands for Mutually Exclusive and Collectively
E xhaustive
Exhaustive.
According to the MECE principle, when solving any business problem such as, “How can we reduce costs?”
or, “How can we increase profits?”, all possible causes or options to be considered should be grouped into
categories. There should be no overlap in categories (mutually exclusive) and all the categories together
should cover all possible options (collectively exhaustive).
For example, taking your customers and grouping them by age group is an MECE principle because it is
mutually exclusive—no individual can fall into more than one category—and collectively exhaustive—the
groupings as a whole cover the entire population.
The MECE framework helps in problem solving by allowing you to separate the problem into distinct, non-
overlapping issues. It ensures that no issues relevant to the problem are overlooked.
According to Ethan Rasiel, author of “The McKinsey Way,” a major issues list using the MECE framework
should contain no less than two major issues and no more than five major issues. This acts as a broad
indicator for a consultant on how to categorize information.
Using MECE, you can create a Logic or Issue Tree that breaks down a problem into components.

MECE FRAMEWORK
Increase volume
Increase
Increase price
revenue
Improve mix
Increase
profit
Reduce R&D cost
Reduce Reduce production cost
cost Reduce marketing cost
Reduce G&A cost

Improve
ROI
Reduce fixed
investment
Reduce
investment
Reduce variable
investment
Resource: The McKinsey Way by Ethan Rasiel
There should be no overlap in categories (mutually exclusive) and all the categories together
should cover all possible options (collectively exhaustive).
CONCLUSION
The frameworks in this guide are useful additions to your toolkit. Rather than spending time on developing
an approach, they provide a starting point for your analysis of business problems—whether for your client or
for your solo business. Frameworks can help guide your questioning and information gathering process by
providing a structure for your thinking. Remember that you should never force your analysis into frameworks,
they are merely a tool to support you.
Click here to download the full Frameworks Guide Supplement

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Top Business Consulting

Helpful Strategic Resources for the Independent Consultant

The 3C’s Porter’s Five

13454 Sunrise Valley Drive, Suite 300 Herndon, VA 20171 | mbopartners.com 2

THE 3C’S STRATEGY MODEL

One of the key roles of an independent consultant is problem solver.

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 Improving cost-effectiveness: Cost-effectiveness can be improved in three ways:

1. By reducing basic cost more effectively than the competition.

2. By exercising greater selectivity in orders accepted, products offered, or functions to be performed.

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market and win market share.

 Hito-Kane-Mono: A favorite phrase of Japanese business planners is hito-kane-mono, or people, money,

Ohmae argued the following in regard to the customer:

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Keeping your customer or client happy leads to repeat business!

PORTER’S FIVE FORCES

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Bargaining power Rivarly among Bargaining power

1. Threat of new market entrants

2. Bargaining power of buyers

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competitors. If you have a number of competitors that offer equally buyers

5. Threat of substitute products (including technology change)

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Most independent consultants share a penchant for planning.  A company (position,

projects.  Project planning and

Weaknesses, Opportunities, and Threats of a venture or project. a business, investments, life

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 W-O Strategies overcome weaknesses to pursue opportunities

Opportunities S-O Strategies W-O Strategies

Threats S-T Strategies W-T Strategies

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Political Economic Socio-cultural Technological

 Conclusions. Tax  Stage of business  Population growth  Automation

 Trade restrictions and  Economic growth  Socio-cultural  Impact of technology

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QUESTION MARKS: LOW MARKET SHARE/HIGH MARKET GROWTH

DOGS: LOW MARKET SHARE/LOW MARKET GROWTH

CASH COWS: HIGH MARKET SHARE/LOW MARKET GROWTH

STARS: HIGH MARKET SHARE/HIGH MARKET GROWTH

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Question Marks Stars

Dogs Cash Cows

Low Market Share High

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 To improve the performance of a company

 To align departments and processes during a merger or acquisition

 To determine the best way to implement a proposed strategy

 To examine the likely effects of future changes within a company

Hard elements Soft elements

Strategy Shared values

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The illustration below depicts the interdependency of the elements.

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OVERVIEW should be grouped into

MECE FRAMEWORK M utually

The MECE Framework is one of the hallmarks of problem solving at E xclusive

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Reduce Reduce production cost

cost Reduce marketing cost

Reduce G&A cost

Click here to download the full Frameworks Guide Supplement

Improving cost-effectiveness: Cost-effectiveness can be improved in three ways:

Hito-Kane-Mono: A favorite phrase of Japanese business planners is hito-kane-mono, or people, money,

Most independent consultants share a penchant for planning. A company (position,

projects. Project planning and

W-O Strategies overcome weaknesses to pursue opportunities

Conclusions. Tax Stage of business Population growth Automation

Trade restrictions and Economic growth Socio-cultural Impact of technology

To improve the performance of a company

To align departments and processes during a merger or acquisition

To determine the best way to implement a proposed strategy

To examine the likely effects of future changes within a company