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Ultimate Guide
Case interview frameworks or consulting frameworks are arguably the most
critical component of a case interview. Outstanding case frameworks set you
up for success for the case while poor frameworks make the case difficult to
solve.
By the end of this article, you will learn four different strategies on how to create
unique and tailored frameworks for any case interview.
You will apply these strategies to learn how to create case frameworks for the
six most common types of case interviews.
Profitability Framework
Market Entry Framework
Merger and Acquisition Framework
Pricing Framework
New Product Framework
Market Sizing Framework
You will also learn six consulting frameworks that nearly every consultant knows.
When given a case interview, you will need to decide which framework strategy
you want to use. Some framework strategies will be more effective than others
depending on what type of case interview you get.
Therefore, choose the case framework strategy that is easiest for you given the
type of case that you get.
Candidates will either use a single memorized framework for every case or
memorize a different framework for every type of case interview.
The issue with using memorized frameworks is that they aren’t tailored to the
specific case you are solving for. When given an atypical business problem, your
framework areas or buckets will not be entirely relevant.
A poor framework makes the case interview significantly more difficult to solve.
Additionally, Interviewers can easily tell that you are regurgitating memorized
information and not thinking critically.
Instead of creating frameworks from scratch each time, this second case
framework strategy provides a method to speed up the process while still
creating frameworks that are unique and tailored to the case. Additionally, you
won’t need to memorize multiple different frameworks.
First, memorize a list of 8 - 10 broad business areas, such as the following:
When given a case, mentally run through this list and pick the 3 - 5 areas that are
most relevant to the case.
If the list does not give you enough areas for your framework, brainstorm and
add your own ideas as areas to your framework.
Finally, add a few bullet points under each area to add more detail to your case
framework.
This strategy guarantees that your framework elements are relevant to the case.
It also demonstrates that you can create unique, tailored frameworks for every
business problem.
Let’s return to the Coca-Cola case example in which we are asked to determine
whether or not they should enter the beer market
Running through our list of memorized framework areas, the following six areas
would be relevant:
This strategy is a shortcut for creating unique and tailored frameworks for every
business problem. Even if you and a friend used this same strategy, you both
may end up with different frameworks.
That is completely fine. As long as the buckets in your framework are major
areas and are relevant to the case, your case framework will be significantly
better than most candidates’ frameworks.
You do not need to develop a framework entirely from scratch every time to
create outstanding case frameworks. This case framework strategy can be
applied to over 90% of case interviews.
For the remaining 10% of case interviews, you will need to learn and use the
next two case interview framework strategies.
The first two case framework strategies can be applied to over 90% of cases.
However, some cases may require you to identify and focus on various
stakeholders that are involved in running or operating a business.
For these cases, the primary areas of your case framework will be these major
stakeholders.
Let’s take a look at an example: Your client is a non-profit blood bank. They have
volunteer nurses that go to schools and companies to collect blood from donors.
They then sell this blood to hospitals, which use this blood for emergency
situations when a blood transfusion is required. Currently, Hearts4Lives is not
profitable because they are not able to collect enough blood to sell to their
hospital partners. What can they do to fix this?
Similar to the previous case framework strategy, some cases may require you to
focus on improving or optimizing a particular process.
For these cases, the primary areas of your case framework will be each major
step of the process.
Let’s take a look at an example: Your client is a waste disposal company that
manages a fleet of drivers and garbage trucks that go to residential homes,
collect garbage, and then dump the garbage in city landfills. They have an
obligation to collect each home’s garbage once a week. Recently, they have been
failing to meet this requirement and are backed up with garbage disposal
requests. What is causing this issue and what should they do to fix it?
For cases involving processes and efficiencies, it can be helpful to look at the
different components or steps in the process.
We can think about the process of collecting and disposing of garbage in the
following steps:
Once you have systematically listed all of the steps in a process, you can identify
the pain points or bottlenecks that are causing the issue and determine ways to
improve the process.
Profitability Framework
Market Entry Framework
Merger and Acquisition Framework
Pricing Framework
New Product Framework
Market Sizing Framework
Profitability Framework
Profitability frameworks are the most common types of frameworks you’ll likely
use in consulting first round interviews.
A profitability case might look like this: “An electric car manufacturer has recently
been experiencing a decline in profits. What should they do?”
On the cost side, what is causing the increase in costs? Is it from an increase in
variable costs? If so, which cost elements have gone up?
Or is the increase in costs due to an increase in fixed costs? If so, which fixed
costs have gone up?
Next, you need to understand qualitatively, what factors are driving the decline
in profitability that you identified in the previous step.
Looking at the market, are there any market trends that we should be aware of?
For example, are there new technology or regulatory changes? How do these
trends impact profitability?
Once you have gone through this profitability framework and understand both
quantitatively what is causing the decline in profits and qualitatively why this is
happening, you can begin brainstorming ideas to address the profitability issue.
Among the ideas that you brainstorm, you can prioritize which
recommendations to focus on based on the level of impact and ease of
implementation.
Market entry frameworks are the second most common types of frameworks
you’ll likely use in consulting first round interviews.
A market entry case might look like this: “Coca-Cola is considering entering the
beer market in the United States. Should they enter?”
To create a market entry framework, there are typically four statements that
need to be true in order for you to recommend entering the market:
The market is attractive
Competition is weak
The company has the capabilities to enter
The company will be highly profitable from entering the market
If these two conditions are true, then we need to confirm that the company
actually has the capabilities to enter the market.
Finally, even if the company has the capabilities to enter the market, we need to
verify that they will be profitable from entering.
This is a logical progression that your market entry framework will take you
through to develop a recommendation for market entry cases.
Merger and acquisition frameworks are also common frameworks you’ll use in
consulting interviews.
There are two common business situations.
Pricing Framework
Your answer to pricing cases will likely involve a mix of all three of these pricing
strategies.
New product frameworks are used to help a company decide whether or not to
launch a product or service.
New product frameworks share many similarities with market entry frameworks.
In order to recommend launching a new product, the following statements
would need to be true:
Top-down approach: start with a large number and then refine and
break down the number until you get your answer
Bottom-up approach: start with a small number and then build up and
increase the number until you get your answer
To create your market sizing framework, simply write out in bullet points, the
exact steps you would take to calculate the requested market size or estimation
figure.
I would not recommend using these exact frameworks during a case interview
because the interviewer may think you are just regurgitating memorized
information instead of thinking critically about the case.
Instead use the four framework strategies that we covered earlier in this article
to create tailored and unique frameworks for each case.
Suppliers are companies that provide the raw materials for your company to
produce goods or services. The fewer suppliers there are, the more bargaining
power suppliers have in setting prices. The more suppliers there are, the weaker
bargaining power suppliers have in setting prices.
Therefore, high supplier power makes the industry less attractive while low
supplier power makes the industry more attractive.
Buyers are customers or companies that purchase your company’s product. The
more buyers there are, the weaker bargaining power buyers have in setting
prices. The fewer buyers there are, the more bargaining power buyers have in
setting prices.
Therefore, high buyer power makes the industry less attractive while low buyer
power makes the industry more attractive.
The availability of many substitutes makes the industry less attractive while a
lack of substitutes makes the industry more attractive
Threat of new entry: How difficult is it for new players to enter the market?
If barriers to entry are high, then it is difficult for new players to enter the
market and it is easier for existing players to maintain their market share.
If barriers to entry are low, then it is easy for new players to enter the market
and more difficult for existing players to maintain their market share.
A low threat of new entrants makes the market more attractive while a high
threat of new entrants makes the market less attractive.
SWOT Framework
Strengths: What does the company do well? What qualities separate them from
competitors?
Weaknesses: What does the company do poorly? What are the things that
competitors do better?
Threats: Who are the most threatening competitors? What are the major risks to
the company’s business?
4 P’s Framework
The 4 P’s framework is used to develop a marketing strategy for a product. The 4
P’s in this framework are: product, place, promotion, and price.
Product: If there are multiple products or different versions of a product, you
will need to decide which product to market. To do this, you will need to fully
understand the benefits and points of differentiation of each product.
Select the product that best fits customer needs for the customer segment you
are focusing on.
Place: You will need to decide where the product will be sold to customers.
Different customer segments have different purchasing habits and behaviors.
Therefore, some distribution channels will be more effective than others.
Should the product be sold directly to the customer online? Should the product
be sold in the company’s stores? Should the product be sold through retail
partners instead?
Promotion: You will need to decide how to spread information about the
product to customers. Different customer segments have different media
consumption habits and preferences. Therefore, some promotional strategies
will be more effective than others.
Price: You will need to decide how to price the product. Pricing is important
because it determines the profits and the quantity of units sold. Pricing can also
communicate information on the quality or value of the product.
If you price the product too high, you may be pricing the product above your
customer segment’s willingness to pay. This would lead to lost sales.
If you price the product too low, you may be losing potential profit from
customers who were willing to pay a higher price. You may also be losing profits
from customers who perceive the product as low-quality due to a low price
point.
In deciding on a price, you can consider the costs to produce the product, the
prices of other similar products, and the value that you are providing to
customers.
The 3 C’s framework is used to develop a business strategy for a company. 3 C’s
stands for product customers, competition, and company.
Stars: These are businesses that have high market growth rate and high
relative market share. These businesses should be heavily invested in so
they can continue to grow.
Cows: These are businesses that have low market growth rate, but high
relative market share. These businesses should be maintained since they
are stable, profitable businesses.
Dogs: These are businesses that have low market growth rate and low
relative market share. These businesses should not be invested in and
should possibly even be divested to free up cash for other businesses.
Unknown: These are businesses that have high market growth rate and
low relative market share. The strategy for these businesses is not clear.
With enough investment, these businesses could become stars. However,
these businesses could also become dogs if the market growth slows or
declines.
McKinsey 7S Framework