Case Interview Frameworks: Ultimate Guide

The case interview is the ultimate challenge for the vast majority of candidates, unless you are born with some special kind of case cracking gift. Whether you’re just starting your preparations or whether you are 30 practice cases in, it’s always helpful to visit the most popular case interview frameworks. But it’s important not just to memorize the case study interview frameworks. You must understand each of them well enough to know which to use, how to blend them, and when NOT to use them. Sometimes interviewers are looking to see if you’ll try to cram a business situation into a framework. Instead, you need to know when to use the case interview frameworks or when to build your own framework based on the information given. Enjoy this list of case study interview frameworks and apply wisely!

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This is the Ultimate Guide to Consulting Case Interview Frameworks

The guide will list the consulting case interview frameworks that have endured the test of time. These include:

  1. The Profitability Framework
  2. The Pricing Framework
  3. The 3 C’s + Business Situation Framework
  4. The 4 P’s
  5. Porter’s Five Forces
  6. New Market Framework
  7. New Product Framework
  8. M&A (Mergers and Acquisitions) Framework
  9. Free Case Prep Course
  10. Watch Case Frameworks Video

However, always remember that the best candidates create unique frameworks for each of their cases. We recommend not force fitting these business frameworks in your case interviews. Instead, when you are structuring your thoughts during a case interview, pick and choose the relevant parts of these frameworks that you think will help solve your client’s problem.

 

Case Interview Frameworks: Ultimate Guides, case study interview frameworks, market entry framework, merger and acquisition framework, Profitability framework

 

1. The Profitability Framework

Ultimately, a corporation’s goal is to increase profits. Profits may also be important goals for governments and institutions as well. As a result, profitability remains one of the most common objectives in consulting case study interviews. Knowing how to analyze the major components of profitability is imperative for any aspiring consultant.

The profitability framework is mainly broken into two components: revenue and costs. You should aim to understand the big picture first before drilling down into the specifics.

Additionally, there will be times when your case interviewer states that your client is focused on increasing revenue or decreasing costs. There may be a temptation to always look at both revenue and costs, but there are many instances when the case is built around only one of those categories. Pay close attention when your interviewer gives you the prompt, and stay laser focused on what the client needs.

Potential Profitability Framework Categories and Questions:

  • Revenue
    • Big Picture
      • What are our client’s revenue streams?
      • What percent of total revenue does each stream represent?
      • Have those percentages changed lately?
      • Have the revenue streams been declining or growing over the past 1, 3, 5, or 10 years?
      • How is our client growing relative to the industry?
      • What is our market share in terms of sales compared to competitors?
    • Price
      • What is our client pricing its products at?
      • How has pricing changed over the past few years?
      • What is our pricing strategy?
      • How is pricing expected to change over the next few years?
      • What are competitors pricing similar products at?
    • Quantity
      • At what quantity is our client selling its products at?
      • How has quantity changed over the past few years?
      • How is quantity expected to change over the next few years?
    • Ways to Increase Sales
      • Increase prices
      • Increase quantity
      • Bundle products so customers buy more at once
  • Cost
    • Big Picture
      • What are our client’s major fixed and variable costs?
      • How have costs changed over the past few years?
      • How are our client’s relationships with its suppliers?
      • Will reducing costs damage any of our revenue streams?
      • How do our costs compare against our competitors?
      • What does our client’s supply chain look like?
      • Is there anything happening within our client’s market or the economy that is impacting costs?
      • Are there any government regulations that impact our client’s costs?
    • Cost Per Unit
      • What does our client’s fixed and variable costs look like on a cost per unit basis?
      • Has the cost per unit been increasing or decreasing over the past few years?
      • Is the cost per unit expected to increase or decrease within the next few years?
    • Quantity
      • At what quantity is our client selling its products at?
      • How has quantity changed over the past few years?
      • Is quantity expected to change over the next few years, and if so how?
      • How will costs change if we increase quantity? Will we be able to negotiate better costs?
    • Ways to Decrease Costs
      • Increase quantity to achieve economies of scale
      • Analyze areas of the business that aren’t producing results and reduce resources
      • Create a more efficient supply chain
      • Negotiate with supplier for better costs
  • Ways to Increase Profitability
    • Expand into new markets
    • Increase marketing efforts and strengthen company brand
    • Reduce prices
    • Negotiate better costs with suppliers
    • Improve customer service

2. The Pricing Framework

Another common case study interview framework revolves around pricing strategy. Generally, prices greatly impact volume and ultimately profits, so this case study objective comes up quite frequently.

Pricing products and services is a great challenge for companies because prices greatly influence customer decisions. Consulting companies with rich histories and long track records are able to utilize their work with similar previous clients to provide the guidance needed to get the most out of their pricing strategies.

Potential Pricing Framework Categories and Questions:

  • Product Information
    • What is the new product and how is it different from what is currently on the market?
    • How innovative is this product compared to others that exist in the market?
    • Is the product patented or have any rights that can protect it from being copied?
    • Are there similar products in the market that can act as substitutes?
    • Can the product be bundled with any existing products?
    • Will the product cannibalize any of the client’s current products?
    • What were the R&D costs required to create this product?
    • How big is the market for this product?
  • Competitive Analysis
    • How much are competitors charging for similar products?
    • How are competitors thinking about their pricing strategies?
    • Understand- How much does it cost for competitors to create similar products?
    • Are there any substitutions to our client’s product?
  • Pricing Strategy
    • Does cost-based pricing or price-based costing make more sense?
    • What is our breakeven point?
    • How much does it cost to create and deliver the product?
    • Has there been any research completed to see how much customers are willing to pay for the product or similar ones?
    • Do customers need to be educated about the product?
    • What are the potential costs with bringing this product to market?
    • How much will be spent on marketing?

3. The 3 C’s + Business Situation Framework

The 3C’s and business situation framework overlap in categories, so they will be combined in this section. Both case interview frameworks are focused on broad business categories that could be the source of a client’s problem.

The 3Cs focus the Company, Customers, and Competition. The business situation framework, coined by Victor Cheng, adds Products as an additional category.

Potential 3 C’s Framework Categories and Questions:

  • Company
    • What defines the company?
    • What are the company’s core competencies?
    • How long has the company been around?
    • What do the company’s financial performance look like over the past few years?
    • What is the company’s management team like?
    • How strong is our company’s brand?
  • Customers
    • Who is the customer?
    • What are the customer demographics?
    • How are customers segmented? What kind of growth have each of these segments seen over the past few years? How are they projected to grow?
    • How sensitive are customers to prices?
    • What are the distribution channels through which the client reaches its customers?
  • Competition
    • Who are the other competitors in the market and what are their market shares?
    • How quickly are the other competitors growing?
    • Do our competitors offer products or services that our client does not?
    • What are our client’s competitive advantages? What are our client’s weaknesses?
    • Are there any barriers to entry in the market our client competes in?
    • Are there any important regulations that our client needs to follow?
  • Product
    • What is the new product and how is it different from what is currently on the market?
    • How innovative is this product compared to others that exist in the market?
    • Is the product patented or have any rights that can protect it from being copied?
    • Are there similar products in the market that can act as substitutes?
    • Can the product be bundled with any existing products?
    • Will the product cannibalize any of the client’s current products?
    • What were the R&D costs required to create this product?
    • How big is the market for this product?

4. The 4 P’s

The 4P’s is a common case interview framework used to structure thoughts on marketing strategy. This framework is often used when a new product is launched or when reviewing existing products.

Potential 4 P’s Framework Categories and Questions:

  • Product
    • What is the new product and how is it different from what is currently on the market?
    • How innovative is this product compared to others that exist in the market?
    • Is the product patented or have any rights that can protect it from being copied?
    • Are there similar products in the market that can act as substitutes?
    • Can the product be bundled with any existing products?
    • Will the product cannibalize any of the client’s current products?
    • What were the R&D costs required to create this product?
    • How big is the market for this product?
  • Price
    • Does cost-based pricing or price-based costing make more sense?
    • What is our breakeven point?
    • How much does it cost to create and deliver the product?
    • Has there been any research completed to see how much customers are willing to pay for the product or similar ones?
    • Do customers need to be educated about the product?
    • What are the potential costs with bringing this product to market?
    • How much will be spent on marketing?
  • Promotion
    • What promotion strategies should be used to sell the product?
    • What marketing strategies have been implemented so far? Which have been successful and which have not?
    • What are the ways competitors have been marketing their products?
  • Place
    • Which distribution channels should be used to distribute the products?
    • Which channels best reach our customers?
    • Is a salesforce needed to reach our customers?
    • What channels have been most successful for our client in the past? How about competitors?

5. Porter’s 5 Forces

Porter’s Five Forces is one of the most well known business frameworks in the world. Named after its founder, Michael Porter, the tool provides a structured way of analyzing an industry and understanding how companies fit into the overall competitive picture.

The Porter’s Five Forces model focuses on five undeniable factors that shape a market, regardless of the industry the company is in. Studying these forces can allow consultants to understand how competitive, attractive, and profitable an industry may be.

Potential Porter’s 5 Forces Framework Categories and Questions:

  • Threat of New Entrants
    • What are the barriers to entry in this industry?
    • How do economies of scale work in this industry?
    • What are some cost advantages our client has?
    • What kind of access does our client have to distribution channels?
    • How is our client’s product protected from new entrants?
  • Competitive Dynamics
    • Who are the other competitors in the market and what are their market shares?
    • How quickly are the other competitors growing?
    • What are our client’s competitive advantages? What are our client’s weaknesses?
    • How costly is it to switch costs?
    • Do competitors compete on price in this market?
  • Supplier Power
    • How many suppliers are there in the market?
    • Who are the key suppliers?
    • How much bargaining power do suppliers have in the market?
    • Is there a lot of differentiation amongst suppliers?
  • Buyer Power
    • Who are the key customers?
    • What is the cost for buyers to switch to different competing companies?
    • How much bargaining power do customers have?
    • Do customers have equal information to the products on the market?
  • Threat of Substitutes
    • Are there any notable substitutes in the market for our client’s products that have similar prices and qualities?
    • What is the cost for switching to other similar products for the customer?

6. Market Entry Framework

Companies often need to enter new markets in order to grow their businesses. This is exciting for businesses because new markets represent new opportunities, but of course, more challenges.

Case study interview frameworks for new markets should first include categories and questions that are open-ended, since there are a wide range of possibilities. Once you have a better idea of where the case is going based on the data and information you’re provided, drill into those categories.

Potential Market Entry Framework Categories and Questions:

  • Situation of the New Market
    • What is the size of the market?
    • What is the market growing or declining at for the next 1, 3, 5, or 10 years?
    • At what rate has the market been growing or declining for the past 1, 3, 5, or 10 years?
    • Where is the market in its life cycle?
    • Who are the customers and how are they segmented?
    • Will our client’s products become less useful over time with technological advances?
    • Have there been any major changes in the market lately?
    • What are the key factors that drive the industry?
  • Competition
    • Who are the main competitors and what are their market shares?
    • How do the competitors’ products compare to our client’s?
    • How will the competition respond?
    • What are our client’s competitive advantages?
  • Entering the New Market
    • What are the key risks to consider?
    • Are there any barriers to entry?
    • Would it be more profitable to enter through an acquisition, a joint venture, or by creating a business from scratch?
    • How will the client exit the new market if things don’t go well?

7. New Product Framework

Similar to new markets, companies need to develop new products in order to grow. This problem is intimidating for most clients due to potential high costs and fear of the unknown. Your case study interview framework should dive deep into the new product before anything else.

Potential New Product Framework Categories and Questions:

  • New Product and Product Portfolio
    • What is the new product and how is it different from what is currently on the market?
    • How innovative is this product compared to others that exist in the market?
    • Is the product patented or have any rights that can protect it from being copied?
    • Are there similar products in the market that can act as substitutes?
    • How does the product fit within the client’s current product line?
    • Can the product be bundled with any existing products?
    • Will the product cannibalize any of the client’s current products?
    • Is the client replacing an existing product?
  • Market Strategy
    • Who are our customers and how can we best reach them?
    • How will this product expand our customer base and increase sales?
    • Is there any data or research supporting that customers want this product?
    • Who are the main competitors and how much market share does each firm have?
    • How will competitors respond to this new product?
    • Are we entering into a new market or are we serving the market we currently serve?
  • Feasibility
    • How much funding does this new product require?
    • Where will the funding be coming from?
    • If debt is required, can the client support debt?
    • Does the client have the manufacturing or production capabilities to produce this product on its own or does it need help from other parties?
    • Do we have relationships with the right suppliers that will help us create this product?
    • How will this new product impact our client’s profitability?

8. M&A (Mergers and Acquisitions) Framework

Because they aren’t as common, mergers and acquisitions (M&A) problems often can catch candidates off guard in case interviews. Though you aren’t recruiting for a finance position, it’s still important to have a decent understanding of what M&A case interview frameworks should focus on.

Additionally, a potential merger or acquisition may be a small part of a larger case. For instance, if the company wants to grow, an option the client could be considering is acquiring a smaller competitor. In this case, it will be important for you to be able to structure an M&A framework in order to systematically discover if this is a good idea for your client.

The key to nailing an M&A framework question, is to understand who the acquirer is. No matter who the acquirer is, they will want to increase cash flow. But the type of acquirer will determine how long of an investment they will want to make. Take a look at the types of acquirers that would influence the term of the investment:

Types of M&A Acquirers:

Financial Acquirer- e.g., PE Firm

100% owners. Typically the goal would be to sell the company for a quick return. They’ll usually do this by rapidly decreasing costs and increase top-line revenues and profits with cash injections. They’re not looking for a long-term investment.

Financial Investor- e.g., Hedge Fund

Non-majority owner. The goal is that their involvement would positively affect the share value. Once that takes place, they would look to sell the shares for a profit.

Corporate Acquirer- e.g., Multinational Firm

100% owners. Typically these types of acquirers will operate the purchased company for a period of time. Additionally, they may have bought the company for a specific purpose and integrate it into their overall company operations.

How To Use The M&A Framework:

With M&A frameworks, remember this key concept. Most of the time, interviews are going to be focused on due diligence strategy. They are looking to understand if one company should buy another or not. Look at these 4 key areas:

  1. The Market

What is the market like? Is it saturated with competitors? Is the market growing, stagnant, or contracting- and why? Obviously, investors are looking for attractive markets. Typically, one of the biggest questions to answer, is if the overall market is big enough for your client’s end goals.

  1. The Company

This is all about helping your client understand not only if the market is right, but if the company they are looking at buying, is the best target company within that market. So you must understand everything about the target company. What are their finances like? Do they have strong profits? What do their forecasts look like? What is their competitive positioning? Are they a top performer, generating strong revenues, or do they have room for improvement with the potential to gain significant market share?

  1. Post-Acquisition Strategy

This is really about understanding how much your client could make over time. While the market and the company valuations help you understand how much your client should pay for the target company. So the post-acquisition strategy ties the first two sections together, and also send the message that things will change post purchase.

Is there potential to decrease costs in the target company and increase revenues? Is the culture of the target company conducive to integrating into the purchasing company? Questions like these need to be answered to better understand if the target company would be a beneficial acquisition.

  1. Risks and Benefits

Risks and benefits can be a bit more difficult to determine. For example, does the target company have intangible assets, like Intellectual Property? How do you determine the value of their IP? Or what about their management team? Does their management have the capacity to take the company where it needs to go? Are there government restrictions or litigation that they’re experiencing? These types of questions have to be quantified, in order for your client to understand if the target company is actually a good value, and something that they want to take on.

One bright spot in M&A frameworks, is that the recommendations are typically one of the easiest to create. This is because you’re either for it, or against it. If you’re for it, your post-acquisition strategy should be mind blowing! Take a look at our article on the Pyramid Principle to see how best to present your recommendation, how the executives would want it. If you are against the acquisition then have your details ready as to why not, again, in the Pyramid Principle format. Have your compelling supporting data ready to share, if asked for.

Potential M&A Framework Categories and Questions:

  • Determine Objectives
    • Why is our client thinking about purchasing the asset or company?
    • Are there any potential alternatives?
    • How does the company fit within our client’s broader product portfolio and strategy?
    • If our client doesn’t purchase the company, will a competitor?
    • Are there any financial reasons like tax advantages that make this a good transaction?
    • Are there a lot of potential revenue and cost synergies from the deal?
  • Acquisition Price
    • How much is our client going to be paying?
    • Is the price fair?
    • How will the deal be financed?
    • Will our client be taking on debt, and if so, can the client support it?
  • Due Diligence
    • How are the potential acquisition target’s financials?
    • Has the target’s revenue and profitability been increasing or decreasing over the past few years?
    • How special are the target’s products?
    • What is the target’s customer base like?
    • How healthy is the industry the target is in?
    • How will competitors respond to this acquisition?
    • Are there any legal or regulatory reasons this acquisition may not work?

Free Case Interview Prep Course

MC has a free Case Interview Prep Course! This course will give you insight into what you need to know to ace the case interview, and it will give you a solid foundation on which to build the rest of your preparation. The Case Prep Course will prepare you for the hardest interview you’ll ever face. You can succeed – with the right preparation. Get started today.

Case Interview Frameworks Overview Video

Conclusion

Case interview frameworks are great to quickly assess specific business situations. Yet, they each have their own limitations and proper uses. We trust that our list of case interview frameworks were beneficial to that end. If you want to know how to apply the case frameworks, blend them, and build your own, reach out to us for expert coaching. Good luck in your interview!

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