The Megapolis City Council is looking to solve a major problem in the city’s traffic – for the last decade, the number of traffic accidents has been rising steadily.
Which factors would you look at, to tackle this problem?
“Which framework to use?” is probably among the most common questions popping up in a candidate’s mind when confronting a case.
This definitive guide will not only answer that question by introducing a few common frameworks, but also tell you HOW to use those frameworks more effectively during case interviews, and what pitfalls you should be aware of.
Case interview frameworks are templates used to break down and solve business problems in case interviews. A framework can be off-the-shelf or highly customized for specific cases; it can also be tailored for certain functions/industries, or versatile enough for general problem-solving.
Common case interview frameworks include:
All of these frameworks will be discussed later in this article.
During a case interview, you use consulting frameworks to break down the problem into smaller pieces through an issue tree and test each branch to see if the root-cause is in there. If a branch indeed contains the root-cause, you break it down further. Rinse and repeat until the root-cause is identified.
The big part of problem solving is about breaking down the problem in almost every step of the case.
Templates should be treated as guidelines, and not strict rules. The same applies to case interview frameworks.
In the past, case interviews were much more predictable, and frameworks were more applicable. However, nowadays, case interviews are more similar to real business problems, where frameworks need a lot of customizations (you’ll see this word repeated a lot in this article) to be useful.
In fact, the whole consulting industry exists on the basis that consultants can customize theory to real, difficult business situations and produce positive results; nobody pays hundreds of thousands of dollars for them to recite a textbook – any college freshman can do as much.
That’s why in my Case Interview End-to-End Secrets Program, I don’t teach candidates to use frameworks – instead, the focus in on the fundamentals of case interview (problem-solving and business intuition) as well as the tips and techniques for instant performance improvement.
Here’s a problem with case interview beginners – they tend to go straight for the frameworks, before even knowing the basic mechanisms and principles of case interviews.
If you are one of those beginners, you must first grasp the basics of case interviews – the fundamentals of case interview problem-solving, the issue tree, and the MECE principle. I have written extensive, separate guides on these topics, but for starters, I advice you to read this Case Interview 101 comprehensive guide.
Before we proceed with the popular frameworks in consulting and case interviews, here are four huge myths about frameworks you should steer clear of.
Spend your time learning to draw customized frameworks/issue trees instead. Case interviews are getting progressively more realistic and less conforming to specific frameworks, so trying to memorize dozens of frameworks is of no use.
Additionally, you should attend to the qualitative side of things, to deeply absorb each framework and its use; skimming the surface will come back to bite you later.
Ready-made frameworks CANNOT cover all kinds of situations. Even regarding the ones covered, existing frameworks are often “okay-fit”, but not perfectly fit.
Just create a framework/issue tree yourself. Nobody deducts your points for not using a ready-made tool, they even give you points if you can customize it.
You are definitely not wooing anyone by being fancy-schmancy here. Nobody cares about your shiny frame if it does not fit with the picture.
Consultants are very practical and result-oriented people; what impresses them are candidates who really know what they are talking about, and actually produce good results.
What’s worse is that you also run the risk of appearing superficial; it’s not difficult for consultants with years of experience in the field to fully expose your bluffing. If that happens you may as well say goodbye to your chance of getting hired.
The assumption underlying this myth is that in interviewer-led cases, the candidate is not the driver of the case, so he or she does not need to actively break down the problem.
This cannot be further from the truth. Many questions in interviewer-led cases are about frameworks/issue trees (“What factors would you consider to solve this problem?”).
Even with other question types you still need to structure answers like a mini-case. Appropriate knowledge of frameworks, as such, is still a MUST.
Get your end-to-end training to master each question types, “consultant-like” case delivery method and thorough consulting math practice.
Profitability is the most common problem type in case interviews – that means the Profitability Framework is the first one to master for every prospective consultant. You have to absolutely nail it every time, there’s no way around it.
In case interviews, the Profitability Framework is used to mathematically break down the problem, before switching to more qualitative frameworks to devise solutions.
Most of the time, the framework looks like this:
What’s so good about it?
Are there any shortcomings I should be aware of?
This is an extremely versatile template you can use in nearly every case, so make sure to learn it well. It’s not even a “should”, but a “must”.
In my video, I referred to the Business Situation Framework by the more tell-tale “3C & P”, based on it being derived from the famous 3C Framework. These four letters stand for “Company, Customers, Competitors, Products” – areas that the framework analyzes to yield solutions.
What’s so good about it?
Are there any shortcomings I should be aware of?
How do you avoid that situation then? I’m inclined to say “practice”, but that much is obvious. A less obvious solution is to equip yourself with some “ninja tips” by learning how each C and P is usually segmented, although again I have to emphasize that it’s vital to maintain a flexible mindset.
I absolutely love this one because it works in almost every single M&A case.
There isn’t an official name for this framework, but since it is used by McKinsey consultants when confronting an M&A issue, I’d just call it the “McKinsey M&A Framework”.
The framework assesses a proposed M&A on three dimensions: the stand-alone value of each involving companies (values, strengths, weaknesses, etc.); their synergy, i.e. will the two companies combined be greater than the sum of its parts; and other factors, such as feasibility, culture, legal issues, etc.
What’s so good about it?
Are there any shortcomings I should be aware of?
This one is perhaps the single most popular framework in marketing. In case interviews, the 4P/7P Framework is used to formulate and implement marketing strategies for the supposed client, such as in competitive situation or market entry cases.
The original Marketing Mix covers four aspects – Product, Price, Place, and Promotion – thus, “4P”; note that “Place” does not pertain to any physical location, but the channel used by the company to deliver its products to its customers.
When services are involved, the mix becomes 7P; the new additions are: People – those performing the services; Process – how those services are delivered to the customers; and Physical Evidence – the visible, physical clues about the services (think of decorations inside a restaurant).
What’s so good about it?
Are there any shortcomings I should be aware of?
Porter’s Five Forces Model is best used when candidates ask for the case context surrounding the client company; this framework helps them know what to ask.
Michael Porter’s model analyzes how a company’s Competitors, Suppliers, Customers interact with it, as well as how New Entrants and Substitute Products might threaten its place in the industry; it produces a snapshot of the relative power the business holds over its industry environment.
What’s so good about it?
Are there any shortcomings I should be aware of?
These powerful mini-frameworks are probably the most under-appreciated problem-solving tools ever existed.
Mini-frameworks, like the larger frameworks, are also templates to break down information in a top-down, organized fashion.
Unlike their big cousins, however, these are almost never a primary or upper-most component of an issue tree. Furthermore, while common case interview frameworks are, to varying degrees, business-oriented, mini-frameworks are universal.
In this section, I’ll introduce you to five mini-frameworks I find most helpful in consulting case interviews. They feature prominently as supplements for larger frameworks in candidate-led cases, or stand-alone templates to answer questions in interviewer-led cases.
This is a quick and easy method to segment information about a particular entity. The internal branch concerns the inside of the said entity, such as functions within a company; the external branch describes anything outside that entity.
Here’s an example of this mini-framework as an adjunct to the Profitability Framework:
Here, a quick check can be performed by splitting the factors causing the decline into two groups – external and internal, then ask the interview if the declining profits are also experienced by other American airlines; “yes” suggests an external root cause while “no” suggests an internal one.
This method of segmentation is primarily used in evaluations. By dividing items into two MECE groups, it reduces confusion and minimizes the risk of missing an important item.
For illustration, we again look at the packaged food company in the previous example:
For this task, I recommend using the McKinsey M&A Framework to break down the analysis into three branches: (1) South Sea’s stand-alone value, (2) its possible synergy with Wilhelm International, and of course (3) there must be an “Other factors” branch as well.
Within each branch, it’s possible to group items into quantitative (profits, growth rates) and qualitative (brand name, capabilities). This combination makes the analysis more MECE, and easier to work with.
This decision-making tool is pretty straightforward – if the benefits outweigh the costs, you go with that option. Otherwise, you’d be better off keeping your money under the mattress.
The Costs-and-Benefits analysis is a somewhat-business-centric twist of the omnipotent Pros-and-Cons. Both of these approaches work even better with weights attached to each evaluating criterion to reflect its impact.
Now, let’s check up on South Sea:
A simple Costs-and-Benefits breakdown would suffice.
For benefits you have the financial gains to consider, as well as non-financial benefits such as improved brand image (because surprisingly, people love good food!).
The 2×2 Matrix is a decision-making tool where options are examined using two criteria, each of which forms an axis of the matrix.
How do you apply this matrix in South Sea’s case, then?
The 2×2 matrix most famous in the business world, and also suitable for this case, is BCG’s Growth-Share Matrix, which uses market growth rate and market share as decision-making criteria. The position of a business on this matrix suggests whether to invest in, maintain, or discard that business.
SWOT stands for Strengths, Weaknesses, Opportunities, Threats.
This mini-framework is seldom used in case interviews and consulting work because it’s very generic; however, for a quick and easy evaluation of a company’s positioning within the industry context, the SWOT analysis works just fine.
In most case interviews, this is where you usually turn to the Marketing Mix or the Business Situation frameworks, but even a SWOT analysis may yield some insights.
Besides the ones we have covered, there are some other case interview frameworks and mini-frameworks worth looking into:
Of these five rules, the first three are about getting the right framework, while the last two are about looking smart during interviews.
I’ll give you a brief case sample to see how these rules work in practice:
You can see the candidate tried to gather information on the case through the playback and clarification steps; as a result, he correctly decided that the Profitability Framework is suitable for this case.
However, he quickly found out that the conventional “revenue = volume x price” isn’t too insightful, so he knew he needed to bend the framework.
Unable to find a good way to segment, he asked for help from the interviewer – note how he showed a relevant purpose for the request, and demonstrated that he at least made an effort – these are what we call “consulting traits”.
You should also notice that throughout this brief opening part, the candidate never explicitly mentioned the name of the Profitability Framework, and he always explained his choices before being asked.
This question apparently can not be answered using any aforementioned framework. In real life, consultants rarely use pre-defined frameworks to solve their client’s issues. Rather, they create unique frameworks based on the MECE principle specific to their problems.
There are few things you should bear in mind to shortcut the way to your own framework:
Practice this step-by-step with any real-life issues.
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