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Frameworks

Deep Dive into Hypothesis-based Problem Solving

The hypothesis-based problem solving (HBPS) approach is a method employed by consultants to develop actionable recommendations for clients using a structured, evidence-based process. As we saw in the previous article, the HBPS process has five key steps: Define the problem Define drivers and generate/refine hypotheses Determine information needs Gather and analyze the data Draw conclusions […]

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Solving Problems with the Hypothesis-based Approach

There are generally two main approaches to solving problems in consulting, namely the: Investigative / data-based approach, and Hypothesis-based approach. The investigative approach is appropriate when the opportunity is well-defined, repetitive, and standardized, or where the solution is clear from the beginning. Progress is made by employing technical and subject matter expertise to drive towards […]

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Frameworks

Mental Models: Maps of Meaning

A mental model is simply a representation of reality. The world is complex, and so we cannot account for every moving part and keep all the details in our brains. In the words of the famous physicist Richard Feynman: “You only think you know, as a matter of fact. And most of your actions are […]

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Frameworks

Creating Value Through a Great Customer Journey Map

It is said that to really understand somebody you have to walk a mile in their shoes. Analysing a customer journey, from prospect to buyer, allows the business to step into the customer’s shoes and experience the whole process from their perspective. Professor Bernd Schmitt of Columbia Business School is credited with creating the concept […]

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Frameworks Interviews

M&A deals – benefits and drawbacks

Many consulting, corporate strategy, and corporate development roles require the interviewee to go through an M&A case study. Depending on the firm and specific role this case could be very strategic and operational like doing a market entry/growth-type case or very technical (i.e. building financial models like DCF, accretion/dilution, LBO, etc.). But before we dive […]

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Frameworks Interviews

Breaking down the M&A Case Study

M&A case framework Now that you have a high-level understanding of why companies buy each other in the first place (refer to M&A deals – benefits and drawbacks), let’s discuss the framework you should use to analyze the transaction. Firms typically look at four areas when working on M&A cases. Let’s step through them one […]

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Frameworks

Cracking Pricing Strategy Case Studies

Pricing strategy is one of the easiest levers CEOs can pull to increase revenues in their company. For instance, retail banks can raise interest rates (the price they pay customers for depositing funds at the bank) to quickly attract new balances and acquire new customers. They can then lend out this money at even higher […]

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Product Roadmap Explained

A roadmap streamlines business goals into strategic and executable paths. In the context of project management, a roadmap can span across multiple timelines for continuous product development. Why do you need a product roadmap? A roadmap is crucial for visualizing a product’s strategy that is aligned with your business goals, while incorporating customer insights for […]

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Frameworks

A framework for understanding technology companies

The technology industry is booming: in 2008, Microsoft was the only tech firm ranked in the world’s top 10 public companies by market capitalisation. In 2018, tech firms take seven of the top ten spots (Financial Times Global 500). Top graduates are more interested in joining Google than Goldman Sachs. Start-up ecosystems are exploding as […]

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Due Diligence by Management Consulting Firms

During one of my internships I worked on a due diligence project, which involved conducting market research to help a PE firm decide whether to acquire a major stake in a joint venture owned by one of the largest telecom companies in Asia. It was a very interesting experience, so in this post I will […]

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Frameworks Healthcare

Improving the Patient Experience: People, Process, Place Model

In this day and age of hospitals working to provide better care and outcomes for a cheaper price, one of the ways to gauge the impact that the implemented changes are having is through measuring patient satisfaction. Hospitals, health systems, and some private practice groups are working actively and diligently to improve patient satisfaction scores. […]

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Economics Frameworks Strategy

The Spirit of Giving – Re-examining the notion of “Value”

Merry Christmas! Joyeux Noël! Sheng Dan Kuai Le! (圣诞快乐!) Wishing you an enjoyable day, and a happy holiday season spent with good people, surplus amounts of food and drinks, and a large number of gifts! One idea that is firmly associated with Christmas is gift giving. This is a central part of the Christian tradition, […]

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Frameworks

9 M’s Resource Audit Checklist

An organisation’s approach to strategy will always depend on the circumstances. Who are the organisation’s competitors? There will be existing competitors, and outsiders who might threaten to compete in future. And who are the organisation’s customers? There will be existing customers, and larger groups that the organisation wants to target. By understanding the external environment, an organisation will then be […]

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Frameworks

Product Market Expansion Matrix

The product-market expansion matrix may prove useful in the consulting case interview and is relevant when considering growth strategies. It might be used on a standalone basis or as part of a larger profitability framework. There are four ways that a company can pursue growth: Market penetration: A strategy to increase sales to existing customers […]

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Frameworks

Outsourcing Matrix

The outsourcing matrix may prove useful in the consulting case interview, either as a standalone framework or as part of a larger profitability framework. With the view to reducing costs, there are three questions that a firm would do well to consider: How long will it take to reduce major cost drivers? Are the activities strategically […]

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McKinsey 7 S Model

While you may not directly use the 7 S Model in the consulting case interview, it will give you a deeper understanding of how to examine the inner workings of an organisation, identify strengths and sources of competitive advantage, as well as weaknesses and reasons why an organisation may not be operating effectively. The 7 […]

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BCG Growth/Share Matrix

While it may not be a core framework for solving consulting case questions, the BCG Growth Share Matrix can help to broaden your understanding of how a company might want to allocate cash between products and business units. The framework is based on the idea that the amount of cash a product uses is proportional […]

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Frameworks

Value Chain Analysis

Value Chain Analysis is another tool that may prove useful during the consulting case interview. It can be used to analyse the cost structure of a company as part of a declining profitability case, or to analyse the supply chain as part of an operations case. To understand which activities provide a company with a competitive […]

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Frameworks

Four P’s Analysis

Four P’s Analysis is a framework that may prove useful for solving consulting case questions. It can be used to evaluate the marketing strategy for a product. 1. Price The pricing strategy that a company employs will affect its market share and profitability. There are three key pricing strategies to consider. Competitive pricing: How do prices compare with […]

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Frameworks

Porter’s Five Forces

The Porter’s Five Forces framework is used to determine the competitive intensity and attractiveness of an industry, and is relevant in the context of entering a new market, M&A, or starting a new business. The intensity of competition will depend on the strength of the five competitive forces, however the significance of the forces will vary by […]

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Frameworks

Three C’s Framework

The Three C’s Framework may prove extremely valuable for consulting case questions. It can help to assess the business situation in the context of entering a new market, M&A, product development, and starting a new business. It involves examining customers, competition, and the company. 1. Customers Eight (8) factors to consider when examining the customer. 1. Customer […]

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Frameworks

Profitability Framework

The profitability framework is probably the most important framework for solving consulting case questions Profit equals revenue minus cost. 1. Revenue Revenue is normally thought of as being a function of price per unit and units sold. Declining revenue can derive from a fall in prices or a reduction in units sold, and can be […]

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Frameworks

Surveying the Business Landscape

Before taking decisive action, it may be a good idea to assess the lay of the land According to Sun Tzu, the quality of decision “is like the well-timed swoop of a falcon which enables it to strike and destroy its victim.” And much like a circling falcon overhead, a company needs to take a […]

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Economics Frameworks Learning

Learning From Experience

A natural and unstructured process that results from doing the work LAST week we looked at the value of breaking with experience, which followed on nicely from our initial article on the Experience Curve. This week we focus on learning from experience. What does it mean to learn from experience? And what role does management have to […]

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Frameworks

Porter’s Generic Strategies

Three strategies to achieve above-average performance: cost leadership, differentiation, and focus In order to understand Porter’s Generic Strategies, it is helpful to take a step back and examine the two things which determine a firm’s profitability in the long run. The first is industry attractiveness, which is determined in any industry by the five competitive forces: […]

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Frameworks

Profitability Framework

The profitability framework can help executives, consultants and entrepreneurs to diagnose and respond to falling prices, declining sales volume, or rising costs BUSINESSES sometimes experience reduced profitability. This is not necessarily a problem if the decline was expected because a business is sustained from cashflow, not profit, and long term growth can be pursued through capital appreciation, which shows […]

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Frameworks

PEST Analysis

Understanding the big picture can help reveal hidden opportunities and threats 1. Background In 1967, Harvard Professor Francis Aguilar wrote a book entitled “Scanning the Business Environment” in which he identified four important factors – Economic, Technical, Political, and Social – that a business can use to better understand the big picture. While the ordering […]

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Frameworks

Product/Market Expansion Matrix

A framework to help executives, senior managers and marketers devise strategies for future growth 1. Background THE Ansoff Matrix (referred to by some commentators as the Product/Market Expansion Grid) was developed by a Russian-American mathematician named Igor Ansoff, and first explained in his 1957 Harvard Business Review article entitled Strategies for Diversification. 2. Benefits of […]

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Frameworks

The Coin Flip

Flip a coin. Make a decision HAVE you ever had two options, and found it difficult to choose between them? You may have applied for MBA programs and received offers from Oxford and Cambridge. You may have been offered a new job from a competing firm. Or, you may have been trying to decide what to […]

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Frameworks

MECE Framework

MECE stands for “mutually exclusive” and “collectively exhaustive” 1. Background MECE stands for “mutually exclusive and collectively exhaustive” and is one of the hallmarks of problem solving at McKinsey (The McKinsey Way by Ethan M. Rasiel). 2. Benefit of the MECE framework You can use the MECE framework to help you think clearly about a business problem. […]

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Frameworks

Value GROW Model – mobilise goal-oriented action

The Value GROW Model can be used to help people set and achieve goals 1. Background The Value GROW Model is an adaption of the traditional “GROW Model” – a framework used widely for coaching individuals to set and achieve goals. The traditional GROW Model has been used and popularised by various high profile coaches […]

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Set SMART Goals

Whether your goals are personal or professional, setting SMART goals is the first step to actually achieving them “A goal properly set is halfway reached.” ~ Zig Ziglar 1. Background ALTHOUGH its origins are unclear, SMART goal setting appears to have been first used by Peter Drucker in his 1954 book “The Practice of Management”. […]

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Frameworks Strategy

Porter’s Six Steps of Strategic Positioning

There are six strategic principles which are relevant to any company that wants to be profitable online                 IN AN article entitled “Strategy and the Internet” published in the March 2001 edition of the Harvard Business Review, Michael Porter outlined six principles that he believes companies need to […]

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Frameworks

GE-McKinsey 9-Box Matrix

The GE-McKinsey 9-Box Matrix offers any decentralised corporation with multiple business units a systematic approach to help it decide where to invest its cash IN SEPTEMBER 2008, the McKinsey Quarterly published an interactive audio presentation on the GE-McKinsey 9-Box Matrix. An outline of this framework is provided below. 1. Background The 9-Box Matrix follows in […]

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Frameworks

Product Life Cycle Model

The Product Life Cycle Model can be used to analyse the maturity stage of products and industries 1. Background THE idea of the Product Life Cycle was first developed in 1965 by Theodore Levitt in an article entitled “Exploit the Product Life Cycle” published in the Harvard Business Review on 1 November 1965. 2. Benefit […]

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Five C Analysis of Borrower Creditworthiness

When a company is trying to borrow money, executives, entrepreneurs and consultants should be aware that there are five criteria that most lenders care about What are lenders looking for? IT IS important to understand what lenders look for when they lend money because companies often need to borrow money for various reasons: increase cash […]

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Value Chain Analysis

To understand which activities provide a business with a competitive advantage, it is helpful to separate operations into a series of value-generating activities referred to as the “value chain” 1. Background VALUE Chain Analysis is a concept that was first described and popularised by Michael Porter in his 1985 book, Competitive Advantage. 2. Relevance of […]

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Frameworks

Four P’s Marketing Framework

A useful framework for evaluating the marketing strategy for a product                 THE Four P’s consists of: price ; product ; position/place; and promotion . 1. Price The pricing strategy employed by a firm for a particular good or service will have a significant effect on profit. There […]

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Frameworks

McKinsey 7 S Framework

The 7 S Framework can help executives and consultants to understand the inner workings of an organisation, and it provides a guide for organisational change 1. Background DEVELOPED around 1978, the 7 S framework first appeared in a book called The Art of Japanese Management by Richard Pascale and Anthony Athos, and also featured in […]

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Frameworks

NPV: Net Present Value

The NPV of an investment is the present value of the series of cash flows generated by the investment minus the cost of the initial investment 1. Net Present Value (NPV) explained THE net present value (NPV) of an investment is the present value of the series of cash flows generated by the investment minus the […]

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Frameworks

Porter’s Five Forces Analysis

The Porter’s Five Forces framework is used to determine the competitive intensity and attractiveness of an industry HARVARD Business School professor Michael Porter, in his 1979 book Competitive Strategy, developed the Porter’s Five Forces. The Porter’s Five Forces framework is used to determine the competitive intensity and attractiveness of an industry. Attractiveness in this context […]

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Frameworks

BCG Growth Share Matrix

The BCG growth share matrix is a simple conceptual framework for resource allocation within a firm 1. Background to the BCG matrix IN 1968, BCG developed the growth share matrix, which is a simple conceptual framework for resource allocation within a firm. 2. Purpose of the BCG matrix The BCG matrix is a simple tool […]

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SWOT Analysis

SWOT Analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats involved a business venture 1. SWOT Analysis Explained ALBERT Humphrey is credited with inventing the SWOT analysis technique. SWOT analysis is a strategic planning tool used to evaluate the strengths (S), weaknesses (W), opportunities (O), and threats (T) involved a business […]

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Frameworks

Cost Benefit Analysis

The cost benefit analysis is a basic analysis framework that involves weighing up the costs and benefits of one course of action against another                 IN YOUR consulting case interview you will most likely be required to make a recommendation on a hypothetical business problem. Understanding how to […]