case study strategy frameworks

Mastering Case Study Frameworks: A Comprehensive Guide for Success

Note: Don’t forget to read and work through our Masterguide to Case Frameworks if you’re still struggling with your profitability case frameworks after reading this article.

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Case study frameworks are crucial tools for management consultants and aspiring candidates in the consulting industry. They provide a structure to analyze and solve complex business problems, helping consultants deliver valuable insights and recommendations to their clients. In this comprehensive guide, we dive into the most essential case study frameworks, their applications, and how to effectively use them in your consulting practice.

Introduction to Case Study Frameworks

Case study frameworks are structured approaches used to analyze and solve business problems during consulting case interviews and client engagements. These frameworks help consultants break down complex problems into smaller, manageable components, allowing for a systematic and efficient approach to problem-solving.

Consultants Create Frameworks to Run Teams

Remember, frameworks are not just to be memorized. They are your tailored, objective-driven, approach to solving a problem.

Because frameworks are simply the modules that a consulting team would assign to their team members.

When creating your frameworks, think to yourself, can my buckets be assigned successfully to Team Member 1, Team Member 2, and Team Members 3 & 4?

The Importance of Case Study Frameworks

Case study frameworks are valuable for several reasons:

• They provide a structured way to approach business problems, making it easier to identify the root cause and develop actionable solutions.
• They help consultants effectively communicate their thought process, findings, and recommendations to clients and interviewers.
• They enable consultants to leverage their experience and knowledge by applying proven methodologies to new business situations.

Flexibility and Adaptability in Applying Case Frameworks

It’s essential to understand that case frameworks are not one-size-fits-all solutions . Instead, they should be viewed as flexible tools that can be adapted, combined, and customized to fit the specific problem at hand. In other words, the best case frameworks are those that can be tailored to address the unique challenges and requirements of each client and situation.

In the following sections, we will discuss some of the most commonly used case study frameworks in management consulting. We will cover their key components, when to use them, and how to apply them effectively.

Profitability Case Frameworks

The profitability framework is a fundamental case study framework that focuses on understanding the drivers of a company’s financial performance. It is most applicable in cases where the client’s primary objective is to improve financial performance, either by increasing revenue, reducing costs, or both.

If you want to read even more on profitability and how to approach it for any case type , take a look at our article here .

Do Not Regurgitate Revenue Cost

As we mentioned above, it is absolutely critical that you stay flexible and adaptable with your frameworks. This is especially true for Profitability. Gone are the days of a generic Revenue Cost framework.

Consultants do not solve real life projects with Revenue and Cost and nor should you in your cases.

Adapt and Adjust Based on the Case

The most important thing to remember about a profitability framework is that it needs to be adjusted to the case . Bucket options include (but are not limited to):

• Competition
• Store (breakdown)
• External/Macro
• Revenue (in context/tailored)
• Cost (in context/tailored)
• Value chain

How do you decide which buckets to use? Well, it depends on the case! For example, if the prompt tells you there are 3 products our company has and we just launched a 4th, of course you need a products bucket. If we are McDonalds (international, different models worldwide), of course you need to break it down by geography.

Listen to how I break this down to a candidate of mine here:

As an example, say we have a food delivery company that has previously focused on topline revenue growth, has negative margins, and now needs to become profitable. How would you create a framework for this? (Please don’t say revenue cost!)

Here’s one option (of multiple):

This probably looks different to what you expected. But it’s also why my candidates consistently get interviewer feedback saying their frameworking is the best they have ever seen.

Remember, every profitability case should have a slightly different set of buckets, based on the problem you are solving.

Again, for a deeper breakdown, check out our article here .

Applying the Profitability Framework

To apply the profitability framework effectively, follow these steps:

•   Identify the relevant components (revenue, costs) and drivers (price, quantity, variable costs, fixed costs) that are most pertinent to the client’s problem.
•   Analyze the current performance of these components and drivers, comparing them against industry benchmarks and competitors.
•   Identify opportunities for improvement and develop recommendations to address these opportunities, considering both short-term and long-term implications.

When identify which areas to pursue (across profit, margin, revenu, and cost), you want to tackle any of the following:

• What’s the biggest? – This refers to the biggest piece of the revenue/expenditure pie, which has the potential to significantly impact the end result.
• What’s changing the most? – Rapid changes in a revenue/cost segment could be a significant driver and potentially fixable.
• What’s the easiest to answer or eliminate? – Opt for quick wins. These are typically yes/no types of questions that can eliminate many other factors.
• What’s the most different? – Look for differences between companies, business units, products, and geographies. Differences often equate to opportunities.
• What’s the most likely? – This is self-explanatory and refers to the most probable source of revenue/cost issues

Market Entry Case Frameworks

The market entry framework is used to evaluate the attractiveness and feasibility of entering a new market or launching a new product. It helps consultants assess the potential opportunities and risks associated with market entry and develop a comprehensive strategy for successful market penetration.

Key Components of the Market Entry Framework

Just like with profitability, you have to tailor your framework to the case prompt.

One option for a market entry framework is as follows:

•   Market Analysis : Assessing the size, growth, and dynamics of the target market.
•   Competitive Landscape : Evaluating the competitive forces and players in the market.
•   Internal Capabilities : Analyzing the company’s strengths, weaknesses, and resources to enter the market.
•   Entry Strategy : Determining the best approach to enter the market, such as organic growth, joint ventures, or acquisitions.

But, the above is just one option. We could also have a Market, Company/Competition, and Financials framework. However, ideally we would articulate it as follows:

Now, remember that all of the above is just for the question Should We Enter This Market?

A different market entry question might be “Our Client has determined that x market is attractive and wants to enter. They have brought us to figure out if we should”. This needs a different framework.

Or, the question might be “Our client has decided to enter x market. How should we enter?” The above frameworks don’t work here!

As a final example, perhaps the case tells us “We are evaluating between 3 markets to enter. Which one should we enter?” Again, new framework needed.

To understand how to tackle these more unconventional market entry cases, please take a look at our 360 degree course .

The Porter's Five Forces Case Framework

Porter’s Five Forces is a widely recognized case study framework developed by Harvard Business School professor Michael E. Porter. It helps consultants analyze the competitive forces shaping an industry and understand the attractiveness and profitability of a market.

Key Components of Porter’s Five Forces Framework

The Porter’s Five Forces framework consists of five main components:

•   Threat of New Entrants : The ease with which new competitors can enter the market and challenge established players.
•   Bargaining Power of Suppliers : The ability of suppliers to influence the terms and conditions of their business relationships with companies in the industry.
•   Bargaining Power of Buyers : The ability of customers to influence the terms and conditions of their business relationships with companies in the industry.
•   Threat of Substitute Products or Services : The likelihood that customers will switch to alternative products or services that fulfill the same need.
•   Rivalry Among Existing Competitors : The intensity of competition among companies within the industry.

When to Use Porter’s Five Forces Framework

The Porter’s Five Forces framework is most applicable in cases where the client is considering entering a new market, launching a new product, or assessing the competitive landscape of an industry.

Applying Porter’s Five Forces Framework

To apply the Porter’s Five Forces framework effectively, follow these steps:

•   Analyze each of the five forces, considering their impact on the industry’s attractiveness and profitability.
•   Identify the key drivers and trends influencing each force and assess their potential implications for the client.
•   Develop recommendations to address the opportunities and challenges posed by the competitive forces, considering both short-term and long-term strategies.

The SWOT Analysis Framework

The SWOT analysis is a widely recognized case study framework that helps consultants evaluate a company’s internal strengths and weaknesses as well as external opportunities and threats. This framework enables consultants to identify key strategic issues and develop recommendations to address them.

Key Components of the SWOT Analysis Framework

The SWOT analysis framework consists of four main components:

•   Strengths : The internal capabilities and resources that give the company a competitive advantage.
•   Weaknesses : The internal limitations and vulnerabilities that hinder the company’s performance.
•   Opportunities : The external factors that the company can capitalize on to improve its performance.
•   Threats : The external factors that pose risks to the company’s performance and success.

When to Use the SWOT Analysis Framework

The SWOT analysis framework is most applicable in cases where the client is seeking to improve its overall performance or address specific strategic issues.

Applying the SWOT Analysis Framework

To apply the SWOT analysis framework effectively, follow these steps:

•   Identify the company’s key strengths and weaknesses, considering factors such as resources, capabilities, and market position.
•   Analyze the external environment, identifying opportunities and threats that may impact the company’s performance.
•   Develop recommendations to leverage the company’s strengths, address weaknesses, capitalize on opportunities, and mitigate threats.

Growth Case Frameworks

The growth strategy framework focuses on identifying and evaluating potential avenues for a company to achieve revenue and market share growth. This framework helps consultants develop a strategic roadmap for the client’s expansion and growth.

Key Components of the Growth Strategy Case Framework

One growth strategy case framework can be broken down into four main components:

•   Market Penetration : Increasing sales of existing products or services in current markets.
•   Market Development : Entering new markets with existing products or services.
•   Product Development : Introducing new products or services in existing markets.
•   Diversification : Expanding into new markets with new products or services.

Remember, however, just like with profitability and market entry cases, you need to listen to the prompt and adjust this framework accordingly to the prompt and company context. Different growth prompts will have different case frameworks.

When to Use the Growth Strategy Case Framework

The growth strategy framework is most applicable in cases where the client is seeking to expand its business, increase market share, or explore new growth opportunities.

Applying the Growth Strategy Framework

To apply the growth strategy framework effectively, follow these steps:

•   Assess the company’s current performance, market position, and growth potential.
•   Identify potential growth opportunities across the four growth strategy components, considering factors such as market attractiveness, competitive landscape, and internal capabilities.
•   Evaluate the feasibility and risks associated with each growth opportunity, taking into account factors such as market entry barriers, resource requirements, and potential synergies.
•   Develop a strategic roadmap for the client’s growth, prioritizing the most attractive and feasible growth opportunities.

Tips for Successfully Applying Case Study Frameworks

To effectively apply case study frameworks in your consulting practice, consider the following tips:

•   Don’t rely solely on case frameworks : Remember that frameworks are just one tool in your problem-solving toolkit. Use them as a starting point, but be prepared to adapt and customize them to fit the specific problem at hand.
•   Listen carefully to the client’s needs : Understand the client’s objectives, priorities, and constraints before selecting and applying a framework. Tailor your approach to address the client’s unique needs and circumstances.
•   Stay flexible and adaptable : Be prepared to adjust your approach as new information emerges or as the client’s needs evolve. Be open to combining and customizing frameworks to develop a tailored solution.
•   Communicate your thought process clearly : Clearly explain the rationale behind your chosen framework, the steps you took to apply it, and the insights and recommendations that emerged from your analysis. This will help ensure that your client and interviewers understand and appreciate your approach.

Enroll in our 360 course . This comprehensive course focuses heavily on building up your frameworking optimally. To get a better understanding of how to create killer case frameworks, start with our master article on case frameworks.

Mastering case study frameworks is crucial for success in the consulting industry. By understanding the key components, applications, and best practices for applying these frameworks, you can develop a strong foundation for effective problem-solving and strategic thinking.

Remember to stay flexible, adaptable, and customer-centric in your approach, and always be prepared to learn and grow as you refine your skills in applying case study frameworks. By doing so, you can unlock unparalleled insights and deliver exceptional value to your clients and interviewers alike.

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Mastering Case Interview Frameworks in 2024: A Comprehensive Guide

Last Updated on August 14, 2024

In the competitive world of consulting recruiting , mastering case interviews is a crucial step towards landing a job at top firms like McKinsey , BCG , and Bain . Discovering how to structure case interviews in consulting is fundamental, as the foundation of successful performance lies in effectively tackling complex business problems. In 2024, with more challenging and creative cases, understanding how to craft a compelling case interview framework is more important than ever.

This article serves as a comprehensive case structure guide, diving deep into the art and science of structuring your analysis and providing you with essential insights into what a case interview framework entails, why it’s critical for your success, and the different strategies you can employ to impress your interviewers from the get-go.

Starting with an overview of what case interview frameworks are and their significance, we explore the nuances and provide essential case structuring tips that set apart winning strategies from the rest. We offer tips for acing consulting firm case interview frameworks. Whether you’re wondering about the types of frameworks that exist, what constitutes a robust case interview structure, or if memorizing frameworks is beneficial, we’ve got you covered.

This guide is based on our experience as McKinsey interviewers and cas coaches with more than 1600 case interview sessions conducted at the time of writing. It is designed to give you a head start in your case interview preparation, ensuring you’re well-equipped to structure your thoughts like a seasoned consultant.

By integrating key concepts with practical advice, this article is your ultimate guide to consulting case structure and acing case interviews in 2024. Stay tuned as we guide you on answering consulting structuring questions with confidence and tackle some of the most pressing consulting framework questions, helping you structure your approach in case interviews more effectively. We want to give you a head start by answering the following questions in this article:

• What is a case interview framework?
• Why do you need to structure your approach?
• Are there different types of frameworks?
• What makes a good case interview structure?
• Should you learn case interview frameworks by heart?
• How can you create frameworks from scratch using a first-principles approach?
• What is the best way to practice framework creation?
• How do you structure a McKinsey case interview? Is it different from candidate-led interviews?

This article is part of our consulting case interview series. For the other articles, please click below:

• Overview of case interviews: what is a consulting case interview?
• How to create a case interview framework (this article)
• How to ace case interview exhibit and chart interpretation
• How to ace case interview math questions

What is a Case Interview Framework?

A case interview structure is used to break the problem you are trying to solve for the client down into smaller problems or components. It is the roadmap you establish at the beginning of the interview that will guide your problem-solving approach throughout the case.

You are defining areas to analyze that help you understand where the problem is coming from or how to answer the question of a client.

In that sense, structuring your approach is the first important step in every case interview. Initially, the interviewer will tell you about the client’s situation and the problem they are asking you to solve. After playing back the prompt and asking clarification questions, you need to structure your approach and create a case interview framework.

Let’s look at one traditional example:

Our client is a beverage manufacturer and has seen declining profits over the last year. They have called us to investigate the issue and propose ways out of it. A typical case interview prompt (simplified)

For you as a candidate, getting the framework right is the first step to successfully acing the case. If you fail to propose a proper analytical structure, you will not be able to investigate the situation and find the root cause of the issue.

A case interview framework usually consists of a top layer and several sub-levels, where the top-level buckets cover the issue broadly, whereas the sub-level buckets identify more concrete areas to look at.

To illustrate, the most common and basic structure that would allow us to analyze the situation on top would be looking at:

Profit = Revenue – Cost

This high-level structure is used for profitability cases when you are tasked to solve an issue with the client’s profit development. The two buckets revenue and cost represent the top level. To analyze the problem properly, you would need to go deeper and figure out what sub-levels influence the variables you are looking at.

For instance, for our beverage manufacturer, you could look at cost and break it down into fixed cost and variable cost with a 3rd level of concrete areas to investigate:

It is important to tailor the structure and associated sub-levels to the case questions. Framework templates were en vogue 5-10 years ago and consulting firms have moved away from asking generic cases that would fit the frameworks taught by Case in Point or Victor Cheng (more on that below).

In terms of format, the best-practice approach to structuring a case is to build an issue tree with branches, which are split into several sub-branches (see the example below).

As with most other aspects of the case interview, mastering effective consulting interview frameworks and deconstructing problems is a skill that needs to be learned, internalized, and practiced to perform best during the interviews.

We’ll cover this in much more detail later in this article.

Why Do You Need a Framework to Structure Your Approach?

The initial structure you need to come up with serves three important purposes in a case interview.

Investigative roadmap

First, it is the roadmap you establish initially that guides your problem-solving throughout the case. Once you lay out your planned approach, you should go through each bucket or branch of your issue tree to find the issue(s) the client is facing or to evaluate the ideas you came up with to fit the needs of the client and then work on your recommendation(s). The case framework serves as the anchor you should stick to as you move through your analysis.

Communication device

Second, it is used as a communication device to guide the interviewer through your thought process and approach. Additionally, moving through the structure allows you to ask targeted questions to the interviewer about additional data or information on each point.

Analytical test

Third, coming up with a proper structure and communicating it well is a test in itself. The interviewer tries to understand how well you can tackle unfamiliar problems. They will evaluate your thinking, logic, analytical capabilities, and problem-solving prowess as well as communication skills.

Case Structuring Course and Drills

Learn how to structure any case, regardless of the problem, industry, or context with our first-principles approach to problem deconstruction and brainstorming. We use our McKinsey interviewer experience to teach you how to structure cases like a real consultant.

Includes 36 video lessons on structuring and brainstorming and 100 practice drills.

Different Types of Frameworks with Examples

Generally, two types of case frameworks exist, depending on the nature of the question.

Either you are asked to break a problem down into its parts and understand where an issue comes from to provide a recommendation (e.g. ”Our client is trying to understand why…?” ) or you are asked to answer a specific question ( ”Should our client engage in…?” ).

Figuring out a problem

A structure here is the starting point and anchor of your problem diagnostic.

First, you need to think about all potential problem areas, then drill down into each branch to figure out what is wrong exactly by collecting more information from the interviewer and exhibits; based on your probing you will receive information from the interviewer that you have to analyze qualitatively and quantitatively, then provide a recommendation in the end.

Answer a question

For these types of questions, a structure is a systematic analysis of a situation or comparison of options that you want to investigate on behalf of the client to help them with a specific goal or question.

For both types of structures, you should follow a hypothesis-driven approach, i.e. already having a clear vision of where the problem could be buried most likely or what approach or idea would best support the client’s goal.

Apart from knowing what frameworks are used for, what characteristics make a strong case interview structure?

Criteria of Strong Case Interview Frameworks

A good case interview framework follows several rules.

Let’s break them down into content requirements and principles.

Content requirements

An excellent structure is broad at the top level, goes into greater depth on the sub-levels, and consists of meaningful and insightful ideas.

• Breadth: How many buckets does your structure consist of at the top level? While in a profitability case, the top level is given, for many other cases you can expand your top level by several buckets ( Real MBB case question: ”What could be the reason our machines break down at different rates in different locations?” ).
• Depth: How deep do you go into each top-level idea and come up with levers/areas to look at below? How well can you support your top-level with the actual ideas that influence it?
• Innovation: How meaningful and insightful are your ideas? Create a mix of common components as well as more out-of-the-box answers. Tell the interviewer something they have not heard before.

Principles of success

Make sure that your structure adheres to the principles below.

• MECE-ness: Refers to a grouping principle for separating a set of ideas into subsets that are mutually exclusive (no overlaps between the different branches of the issue tree) and collectively exhaustive (covering all important aspects). It is used to break down problems into logical and clean buckets of analysis.
• Actionable: Your answer should only consist of ideas that you can exert influence on within the given time frame (e.g. if you are asked to come up with measures over the next year, everything beyond that should not be touched in your structure).
• Logically coherent: Top levels and sub-levels should be consistent within their level and across levels. They should stick to the same hierarchy of importance and logic (e.g. if you are comparing revenue and cost, they should be at the same level, and everything that influences the two should be below).
• Relevant: The content should be relevant to the case at hand, tailored to the client, and easy to follow and communicate. Avoid over-structuring your case. Find a few broad categories at the top and then break them down further.
• Hypothesis-driven: You should have a clear idea of where the problem is buried or what solution is best for the client from the start, and while moving through the structure and gathering additional information, that hypothesis should become clearer.

Memorizing Frameworks is the Worst Thing You Can Do

Upon beginning work with new clients, it becomes immediately evident when they’ve memorized standard frameworks, as this practice typically affects their early performance noticeably. It’s hard to fault them, given that prevalent case interview guidance and literature still advocate memorizing frameworks to apply or tweak across various cases.

Be aware that framework templates were applicable 15 years ago, in the era of Victor Cheng and Case in Point. McKinsey and other top-tier firms have long caught up on this and the cases you will get during the interviews are tailored in a way to test your creativity and ability to generate insights, not remember specific frameworks.

In fact, it will hurt you when you try to use a framework on a case that calls for a completely different approach. Also, it gives a false sense of security that will translate to stress once you figure out how your approach won’t work during the real interview – We have seen this so many times…

Your goal should be to master various framework creation methods, allowing you to build custom issue trees and frameworks, interpret charts , and perform math no matter the case’s context, industry, or function. Our approach teaches you this and trains your ability to come up with deep, broad, and insightful structures for each case individually.

Also, be aware that there is no typical McKinsey case interview framework, BCG case interview framework, or Bain case interview framework. All firms use a diverse set of cases, which are usually developed by each interviewer individually based on a real consulting project they have completed.

If you are looking for case interview examples, check out this article , where we have compiled a link list of all publicly available MBB and tier-2 consultancy cases.

Back to the frameworks: Memorizing frameworks for a case interview may seem like an effective strategy, but in reality, this practice is detrimental to your performance. McKinsey, BCG, Bain, and other top consulting firms want to see candidates come up with their own solutions and innovative approaches.

I want to show you why memorized frameworks like the ones from Case In Point or Victor Cheng do not work and supplement these with plenty of examples to bring the point across. In the end, I want to introduce you to my Structuring Drills course as well as my Case Interview Preparation book, The 1%: Conquer Your Consulting Case Interview . Both resources are aimed at developing you into a world-class case interviewee.

Below are the top reasons why memorized frameworks and cookie-cutter approaches do not work.

No points for problem-solving

First, case interviews are designed to test your problem-solving and critical-thinking skills, not your ability to regurgitate memorized information. Frameworks are meant to be a guide, not a script. Using a memorized framework in an interview can make it obvious that you are not thinking critically about the problem at hand, which can make it difficult for you to impress the interviewer. Interviewers want to see insightful analytical constructs, which means that they need to be tailored, relevant, and concrete.

If you just use memorized buckets, you will score badly in terms of problem-solving. To see a real scoring sheet, go here .

Cases have become much more creative

Second, case interviews often involve unique and unpredictable scenarios. No two cases are the same, so a memorized framework may not apply to the specific problem you are presented with. Attempting to force a framework onto an unrelated problem can make it clear that you lack flexibility and the ability to adapt to new situations.

For instance, let’s look at a real McKinsey case example from a couple of years ago.

You are working with an operator of a specific type of machines. They break down at different rates at different locations. What factors can you think of why that would happen? Example of a McKinsey Case Interview Structure Questions

Which Victor Cheng framework or Cosentino ideas would you present here to the interviewer? There is not a single bucket that would work.

Let us look at an example answer for this prompt.

You limit your creativity

Third, using a memorized framework can limit your ability to think creatively. When you are focused on trying to fit the problem into a pre-existing framework, you may miss opportunities to come up with innovative solutions.

1% of candidates make it through the filter of MBB . You want to provide insights the interviewer has not heard before and not be just like the other 99% that fail to impress.

You have no rationale

Fourth, case interviews also test your ability to communicate and present your thought process effectively. When you are relying on a memorized framework, you may not be able to explain the reasoning behind your solutions and ideas. This can make it difficult for the interviewer to understand your thought process and evaluate your problem-solving skills.

Interviewers want to understand why you think a certain way, not just what you think. Memorizing frameworks completely kills your ability to support and defend your choices.

In conclusion, memorized frameworks can be detrimental to your performance in a case interview. Instead, it’s better to focus on developing your problem-solving, critical thinking, flexibility, creativity, and communication skills. These are the skills that are truly valued in case interviews and a business setting later on.

Let’s have a brief look at how you can become a better problem solver and create frameworks like an actual consultant.

Apply a First-Principles Approach to Frameworks

Consultants approach problems from a first-principles perspective. If you learn how to do the same, not only will you come across as an equal to them, not just another case interviewee, but your analytical lens and case performance will skyrocket. Adopt these innovative framework creation methods for case interviews.

First-principles thinking

At the core of your idea generation should be first principles thinking, which refers to the process of systematically deconstructing a problem or situation into its constituent parts in a MECE way. Only by following this approach can you identify where the issue in a case comes from and how big it is (the what), then dive deeper to understand the reason (the why) to eventually work on a solution (the how). First principles allow you to break a situation down into its core pieces and then put it back together.

For instance:

“What do we need to build an aircraft?”

• A factory (infrastructure)
• Tools and equipment
• Financial means

From there, you go into second and third-order considerations; for instance, for staff:

• Formal education and training
• Work experience
• # of people in total
• # of people for different areas (e.g., engines vs. wings)
• Supply of and demand for labor in the area
• Job advertisement
• Working conditions
• Remuneration and benefits

There are several ways you can employ this type of thinking for creating case interview frameworks. First, we look at the top level of your issue tree, the foundation of your problem-solving, and then explore in more depth the branches, all with a first principles perspective in mind.

Framework creation techniques

For most cases, you can focus on problem deconstruction from two angles: examining the components involved and understanding the process.

To illustrate, we’ll explore the example of improving customer satisfaction for an airline.

The component approach

When we dissect a problem through the lens of its components, we look at the static elements that make up the situation. For an airline, this could include the tangible and intangible assets that affect a customer’s experience. These components might encompass the aircraft itself (comfort, cleanliness, amenities), the staff (friendliness, efficiency), the booking system (ease of use, flexibility), and ancillary services (lounge access, on-board meals).

By examining each component individually, you can identify potential areas for improvement. For example, an analysis might reveal that enhancing the on-board meal quality could significantly boost overall customer satisfaction. This approach requires a deep dive into each element, assessing its current state, impact on the customer journey, and potential for optimization.

The process approach

Alternatively, examining the problem through a process lens involves mapping out the sequence of steps a customer takes, from booking a flight to reaching their destination. This perspective allows you to identify pain points and opportunities for enhancement at each stage of the customer journey.

For instance, you might discover that the check-in process is a significant bottleneck, causing frustration and setting a negative tone for the journey. By streamlining this process, perhaps through more efficient use of technology or additional staff training, you could improve the overall customer experience, thereby increasing satisfaction.

Once you have generated your top-level buckets, expand those ideas into more concrete ideas on the levels below. For instance, from a component perspective, you might have identified staff as an area to investigate.

Next, think about what type of staff a typical passenger encounters like booking agents, check-in staff, lounge personnel, cabin crew, etc. Voila, you have created the most concrete and final level of your analytical framework structure.

Try it out yourself when you encounter the next case problem and think about it either from a process or component perspective, then dive deeper.

While it might be harder initially to use this approach of creating frameworks from scratch, the outcome over time always beats memorization. Hence, we do not recommend any other way to learn and practice frameworks.

Practicing Case Interview Framework Creation and Problem Deconstruction

Developing a strong foundation in creating case interview frameworks is essential for success in consulting interviews. This skill is not about memorizing a set of frameworks but understanding how to construct them from scratch based on the problem at hand. Here’s how you can hone this ability:

1. Master content creation techniques for problem deconstruction : Our course is designed to equip you with the right techniques for breaking down complex problems into manageable parts. We focus on first principles thinking and an intuitive way of breaking down problems, enabling you to understand the core elements of any issue you’re presented with, which is crucial for custom framework creation.

2. Practice with a variety of cases : Exposure to a wide range of case scenarios is key. Our library includes over 100 practice cases, complete with detailed answer keys and explanations. This diverse set of examples will not only improve your ability to adapt your framework to different problems but also enhance your problem-solving speed and efficiency.

3. Regularly read business publications and magazines : Keeping up-to-date with the latest in the business world is invaluable. This habit sharpens your business acumen, enriches your understanding of current market trends, and deepens your industry knowledge, all of which are critical when you need to tailor your frameworks to specific contexts.

4. Understand basic business concepts and terminology : A solid grasp of fundamental business concepts and jargon is non-negotiable. This foundational knowledge ensures you can speak the language of business fluently, making it easier to structure your thoughts and communicate effectively during the case interview.

Remember, the goal is not to memorize frameworks but to learn how to construct them dynamically as per the needs of the case. This approach ensures that your frameworks are always tailored, insightful, and directly relevant to the problem you’re solving.

Also, do not forget that creating the structure at the beginning of the case is just the first step. There are also other elements to consider in a consulting interview preparation plan .

Case Interview Framework in McKinsey Interviews

Since the McKinsey interview is interviewer-led, there is an extra emphasis on the structuring part.

At the core, McKinsey wants to see creative ideas communicated in a structured manner, the more exhaustive the better. Your goal should be to come up with a tailored and creative answer that fits the question.

In a McKinsey interview, you can take up to 2 minutes to draft your structure, IF the structure you come up with is strong and

• hits all the key points that the firm wants to see and
• is communicated in the right way.

A big issue I see with coaching candidates is that they take too little time to structure their thoughts because they feel pressured to be quick rather than exhaustive and creative.

An additional 30 seconds can often make the difference between a bad structure and a good one or a good one and an excellent one. So my battle-tested advice is to get rid of this time-pressure mindset, especially in a McKinsey interview.

Now for the content of the structure, there is no right or wrong answer. Some answers are better than others because they are

• hypothesis-driven
• follow a strong communication (MECE, top-down, signposted)

That being said, there is no 100% that you can reach or a one-and-only solution/ answer. It is important that your answers display the characteristics specified above and are supported well with arguments.

Also different from other firms, you can take up to roughly 5-6 minutes to present your structure, your qualifications, and hypotheses. This is due to the interviewer-led format that McK employs. The firm wants to see exhaustive and creative approaches to specific problems.

Again, this only applies if everything you say

• adds value to the problem analysis
• is well qualified
• includes a detailed discussion of your hypotheses at the end

The difference in format and way of answering a question is the reason why I recommend preparing differently for McKinsey interviews vs. other consultancies’ interviews.

Read more about the McKinsey interview process and the McKinsey case interview specifically.

We Help You Draft Frameworks and Communicate Them Well

I have seen memorized and cookie-cutter frameworks destroy many candidates’ performance and chances to get an offer for many years now. The only issue that is bigger than that is the typical candidate’s ability to handle case math ( but that is for another time ).

To conquer that and many other things that I think are wrong with today’s standard literature on case interviews, I wrote The 1%: Conquer Your Consulting Case Interview . The book is available on Amazon and covers frameworks, case structuring, and brainstorming in great depth. It teaches you how to think and not to memorize faulty frameworks (among 340+ pages of other valuable case interview content).

Once you have understood how to tackle a case structure, you can practice with the Case Structuring Course and Drills here on StrategyCase.com.

We have specialized in placing people from all walks of life with different backgrounds into top consulting firms, both as generalist hires as well as specialized hires and experts. As former McKinsey consultants and interview experts, we focus on teaching the best habits and strategies to ace every case interview, including idea generation, problem-solving, and brainstorming, all from a first-principles perspective.

We can help you by

• tailoring your resume and cover letter to meet consulting firms’ highest standards
• showing you how to pass the different online assessments and tests for McKinsey , BCG , and Bain
• showing you how to ace McKinsey interviews and the PEI with our video academy
• coaching you in our 1-on-1 sessions to become an excellent case solver and impress with your fit answers (90% success rate after 5 sessions)
• preparing your math to be bulletproof for every case interview
• helping you structure creative and complex frameworks for case interviews
• teaching you how to interpret charts and exhibits like a consultant
• providing you with cheat sheets and overviews for 27 industries .

Reach out to us if you have any questions! We are happy to help and offer a tailored program to help you break into consulting.

To improve your skills in all areas of the interview, check out some of our targeted offers below.

Frequently Asked Questions about Case Interview Frameworks

In more than 1600 case interview sessions at the time of editing this article, several questions have come up frequently from my clients. To assist you in this critical phase of your case interview preparation, I’ve compiled a list of frequently asked questions about case interview frameworks.

These questions aim to shed light on the nuances of preparing for and excelling in case interviews, providing you with insights to enhance your understanding and skills.

How do specific industries impact the creation of case interview frameworks? Industries play a crucial role in shaping the choice of case interview framework components, specifically at the lower levels. At the top level, most companies are built in the same way, regardless if they are offering a product or a service. The main difference to tailor it to the industry usually happens on the lower levels of the framework. For instance, while both an airline and a bookstore generate revenue, which is comprised of price times quantity, the pricing for an airline works very differently (e.g., ticket price, booking fee, seat allocation fee, baggage allowance fee, etc).

Can you provide real-life examples of case interview questions from top consulting firms and how to apply frameworks to them? While specific real-life examples are proprietary, many consulting firms publish practice cases on their websites. These can serve as a valuable resource for understanding how to apply frameworks to solve common business problems, with each case typically demonstrating the application of different analytical frameworks. We have collected many free practice cases from different firms here .

What are the common mistakes candidates make when structuring their approach in case interviews, and how can they avoid them? Common mistakes include overly relying on memorized frameworks without creating new ones for the specific case, failing to listen actively to the interviewer’s hints, and neglecting to structure answers in a MECE (mutually exclusive, collectively exhaustive) manner. Avoid these by practicing flexibility, active listening, and ensuring your approach is tailored and comprehensive.

How has the approach to case interviews and the use of frameworks changed over the past decade? The approach has shifted towards evaluating candidates’ ability to think creatively and adapt frameworks dynamically rather than relying solely on memorized structures. This change reflects the consulting industry’s need for innovative problem solvers who can navigate complex and evolving business landscapes.

Are there any differences in how frameworks should be applied in virtual versus in-person case interviews? The core principles remain the same, but virtual interviews require candidates to be even more clear and structured in their communication , given the lack of physical presence. Ensuring technical setup is optimal and practicing verbalizing your thought process can help bridge the gap.

What role does creativity play in structuring case interviews, and how can candidates balance it with the use of standard frameworks? Creativity is crucial for developing tailored and insightful frameworks that go beyond standard responses. Candidates should not use standard frameworks but explore creative angles and solutions to demonstrate their unique problem-solving abilities.

How can non-business background candidates quickly grasp the concept of case interview frameworks? Non-business candidates should start with foundational problem-solving practices and business concepts and practice applying them to diverse case scenarios. Leveraging resources like business publications, online courses , and practice cases can accelerate their understanding and application of case frameworks.

What are the interviewers’ perspectives on the use of frameworks, and what do they look for in a candidate’s approach? Interviewers seek candidates who can create their own frameworks flexibly and creatively, showing an understanding of the underlying business principles. They value clarity, logical structuring, and the ability to derive actionable insights tailored to the specific case. Interviewers usually do not pass candidates who use memorized frameworks that do not fit the case.

How can candidates effectively practice and improve their framework structuring skills? Practice is key. Engaging in mock interviews, analyzing case studies, and receiving feedback from peers or mentors can greatly improve your ability to structure effective frameworks. Additionally, regularly challenging yourself with new and diverse case scenarios can build adaptability and depth in problem-solving. If frameworks are one of your key development areas, do not waste time going through full cases. Rather, work on individual drills back to back to create a habit of deconstructing problems accurately and swiftly.

What are some advanced techniques for customizing frameworks to fit unique case interview scenarios? To customize frameworks for unique case interview scenarios, focus on deconstructing the problem using first principles thinking. Break down the issue into its fundamental components or underlying steps to understand its structure. This approach enables you to create a tailored framework that directly addresses the specificities of the scenario. Apply relevant industry insights and business sense to enhance your analysis. Begin with a clear, strong hypothesis to steer your investigation and framework construction, ensuring that every part of your framework is directly relevant to unraveling the core problem at hand.

Do you have a framework-related question or struggle? Reach out to us in the comments below and we are happy to help!

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Florian spent 5 years with McKinsey as a senior consultant. He is an experienced consulting interviewer and problem-solving coach, having interviewed 100s of candidates in real and mock interviews. He started StrategyCase.com to make top-tier consulting firms more accessible for top talent, using tailored and up-to-date know-how about their recruiting. He ranks as the most successful consulting case and fit interview coach, generating more than 500 offers with MBB, tier-2 firms, Big 4 consulting divisions, in-house consultancies, and boutique firms through direct coaching of his clients over the last 3.5 years. His books “The 1%: Conquer Your Consulting Case Interview” and “Consulting Career Secrets” are available via Amazon.

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Career in Consulting

11 must-know case interview frameworks

This is a complete guide to case interview frameworks.

In this in-depth guide, you’ll learn:

• 11 must-know consulting frameworks to ace your case interviews
• How to use these frameworks in your case interviews
• And how to create custom frameworks

So, if you want to land an offer from a top consulting firm, this guide is for you.

Let’s dive right in.

Table of Contents

Get the latest data about salaries in consulting, what are case interview frameworks.

A case interview framework is a structured way to approach how to solve a problem .

In other words:

Case interview frameworks help Consultants (and aspiring Consultants) brainstorm and organize their ideas to solve complex problems.

For example, a case interview framework is the profitability framework.

Let’s imagine this business problem:

Your client is manufacturing cars. And, for the past 2 years, they have been experiencing declining profits. They hire us to determine the root causes of this business problem.

And to help this company, you should explore the two main profit drivers: revenues and costs.

And explore if revenues decreased (one cause of declining profits).

Or explore if costs increased (another cause of declining profits).

Well… this (simple) example is a business framework.

Related articles

Check also these articles to ace your case interviews:

16 case interview tips

16 case interview mistakes

Ace market sizing questions (incl. 3 market sizing frameworks) 

Case interview preparation

280 case interview examples

Let’s detail the 11 common case interview frameworks you must know to ace your case interviews .

And let’s start with Porter’s five forces.

Case interview framework 1: Porter’s Five Forces

Let’s start with an analysis of external factors.

And one of the most well-known business frameworks is Michael Porter’s Five Forces model.

And it can be found in the book Competitive Strategy: Techniques for Analyzing Industries and Competitors .

Michael Porter’s Five Forces model says the following:

Competitive advantage in an industry is dependent on five primary forces :

• The threat of new entrants
• How much bargaining power do buyers have
• The bargaining power of suppliers
• Threat of substitute products
• Rivalry with competitors

The degree of these threats determines the attractiveness of the market:

• An intense competition allows minimal profit margins.
• Mild competition allows wider profit margins.

Therefore, the goal is to assess whether a company should enter/exit the industry or find a position to defend itself against these forces best or influence them in its favor .

For instance, your market entry framework should include the components of Porter’s Five Forces. 

The threat of new entrants (barriers to entry)

Several factors determine the degree of difficulty in entering an industry:

• Economies of scale

Product differentiation

• Capital requirements vs. switching costs
• Access to distribution channels
• Cost advantages independent of scale
• Proprietary product technology
• Favorable access to raw materials
• Favorable location
• Government subsidies
• Learning curve
• Government policy

Relationship with buyers (buyer power)

• It is concentrated or large purchases volumes relative to the seller’s sales
• The products it purchases front the industry are standard or undifferentiated
• It faces few switching costs
• Buyers pose a credible threat of backward integration
• The industry’s product is unimportant to the quality of the buyer’s products or services
• The buyer has full information
• Purchasing potential
• Growth potential
• Structural position: intrinsic bargaining power and propensity to use it
• Cost of servicing

Relationship with suppliers (supplier power)

A supplier group is powerful if:

• It is not obliged to contend with other substitute products for sales in the industry
• The industry is not an important customer of the supplier group
• The supplier group is an important input to the buyer’s business
• The supplier group’s products are differentiated, or it has built up switching costs
• The supplier group poses a credible threat to forward integration

Key issues in purchasing strategy from a structural standpoint are as follows:

• Stability and competitiveness of the supplier pool
• An optimal degree of vertical integration
• Allocation of purchases among qualified suppliers
• The threat of backward integration

Substitute products

Substitute products that deserve the most attention are those that:

• Compete in price with the industry’s products
• Are produced by industries earning high profits

Rivalry among competitors (competitive analysis)

Now, let’s analyze the competitive landscape.

Rivalry among existing competitors increases if:

• Numerous or equally balanced competitors exist
• Industry growth is slow
• Fixed costs are high
• There is a lack of differentiation (commodity market)
• There are low switching costs
• Production capacity is augmented in large increments

To end this first section about Porter’s Five Forces, you can watch this video made by the channel Business To You.

Case interview framework 2: the 4 P’s

The 4Ps are:

And it’s often seen as a Marketing framework.

The 4Ps framework can help you in your case interviews in one of the following situations :

• A market entry strategy or a product launch strategy
• To understand why sales (or market shares) have decreased

Now, let’s look at the different elements of the 4P framework.

In examining the competitiveness of a company’s product, whether it is a new product being introduced on the market or an existing product manufactured by the company, one must examine the product itself.

The following are some of the questions you might find helpful in assessing a product’s competitiveness :

• Does the product serve a particular market segment? Is it a mass market or a niche product
• Is it differentiated enough to stand out against the competition? If yes, how? If not, what can be done to improve its value perception?
• What features can be added to the product that would add to the perception of value to the consumer?
• What are some of the packaging issues that might present an opportunity or impediment to increased sales?
• Does my packaging reflect the positioning of the product?
• Does the product have patent protection?
• What financial role is the product playing (i.e., cash cow, long-term profit potential, etc.)?
• Are there any other products that can act as substitutes?

Getting the right price for a product is extremely important for the company’s success.

Unfortunately, sometimes the right price is not easy to determine.

Depending on the price elasticity of the product, a 1% increase in price has anywhere from a -20% reduction to a 25% increase in net income.

The most important factor that drives price is the customer’s perceived “value” of the product .

This is also known as the customer’s willingness to pay.

For example, if a company produces shirts with a unit cost of $10, but the market perceives the product as fashionable or has the right brand name, the shirt can be priced to capture any consumer surplus at $50 or even $80 per shirt.

The same manufacturer introduces another shirt at the same cost the following season.

This time, however, the shirt is no longer considered in vogue and thus has little “value.”

This time, the shirt would be priced at $25.

Other factors determining a product’s price are:

• The Cost to Produce COGS : maintain low costs to capture a bigger profit margin.
• The price paid previously – the expected price: if consumers are used to paying a certain price for a product, it is challenging to convince them to pay a $20 premium for the same product. However, if their perceived product value is higher than what they paid in the past, there’s room to capture some consumer surplus.
• The price of substitutes : the price of a product is driven down if the product can be easily substituted by another that serves the same function.

After assessing the product positioning and understanding who your customers are, you need to develop a strategy around which distribution channel to use and where to sell your product .

The distribution channel can be through a third party or an in-house sales force.

And the distribution channel is responsible for transmitting the company’s product to the customer (wholesaler, retailer, end-user).

The selected distribution channel and the outlets at which the product is sold MUST be aligned with the product’s positioning and focused customer segment.

There are many issues to consider when examining the place/channel distribution.

Below are some thoughts to formulate a strategy for delivering the product to market :

• What are the customer preferences regarding distribution?
• Which channels most closely align with the company’s strategy?
• Does the company need to build new channels or eliminate existing ones?
• Does it make more sense to go direct to the end-user or deliver the product through intermediaries?
• What are the economics of the channel?
• What would be the relationship of the company’s sales force in this arrangement?
• How would the company address any potential shifts in power to the channel?
• How do competitors distribute their products?

Promoting and developing a specific brand for the product has many benefits :

It develops a certain perception of the product in consumers’ eyes.

The product’s success will depend on the message conveyed to the consumer and what that consumer ultimately believes about the product.

To maintain a certain perception of exclusivity, traditional advertising (mass or niche), refraining from advertising, word-of-mouth marketing, direct mail, etc., can all be included in promotion and branding.

Here is a list of issues worth analyzing in case interviews:

• How is the marketing strategy different from the competition?
• What message are we trying to communicate? What is the objective?
• Where are we advertising our product (newspapers, TV, radio, Internet, etc.)?
• Pull strategy: (direct at end-user) use of advertising, direct mail, telemarketing, word of mouth, and consumer promotions.
• Push strategy: trade promotions, sales aids, and sales training programs
• How much money is allocated to marketing?
• How are competitors marketing their products?

Ace market sizing questions

Case interview framework 3: the 3 C’s

Knowing the 3C framework and the details upon which the framework is based is crucial to cracking the case .

For instance, the 3C framework is often used to assess the business landscape.

Or by simply defining a growth strategy.

For instance, your market entry framework should include the 3C’s. 

By analyzing the three elements, Consultants can identify the key success factors and create a viable marketing strategy.

DO NOT attempt to tackle a case during the interview by saying, “I would like to use the 3Cs framework…”

Before you even finish your sentence, the interviewer will have decided to reject you.

This point will be emphasized many times during this guide.

A good first step in assessing the business landscape is to examine the customer, the people whose problems the industry is trying to solve.

Below are eight factors to consider when examining the customer.

#1: Customer Identification

Who is the customer?

In trying to identify the customer, remember that the person who makes the purchase decision, the person who pays (the customer), and the end user (the consumer) may all be different people.

For example, a doctor may prescribe medicine that will be paid for by an insurance company (the customer) and ultimately used by a patient (the consumer).

#2: Customer Segmentation

Is it possible to group customers into distinct segments?

Customer segmentation can make it easier to understand customer needs and preferences, the size and growth rate of different revenue streams, and to identify trends.

It may make sense to segment customers by: 1. Age group 2. Gender 3. Income level 4. Employment status 5. Distribution channel 6. Region 7. Product preference 8. Willingness to pay 9. New versus existing customers 10. Large versus small customers.

How big is the market?

How big is each customer segment?

How many customers are there in each segment, and what is the dollar value of those customers?

How fast is the market growing?

What is the growth rate of each customer segment?

#5: Customer Preferences

What do customers want?

Do different customer segments want different things?

Are the needs and preferences of customers changing over time?

#6: Willingness to Pay

How much is each customer segment willing to pay?

How price sensitive is each customer segment?

For example, students will normally be very price sensitive, which means that offering student discounts can increase units sold by enough to increase total revenue.

#7: Bargaining Power

What is the concentration of customers in the market relative to the concentration of firms?

If there is a small number of powerful customers who control the market?

Then it may be necessary to either play by their rules or search for a more favorable market.

Do customers face high switching costs?

If customers face high switching costs, this will reduce their bargaining power and allow firms to charge higher prices than would otherwise be possible.

#8: Distribution

What is the best way to reach customers?

Does each customer segment have a preferred distribution channel?

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Competitors

It is also important to understand the business landscape to understand the competition .

Competition can come from firms within an industry offering similar solutions to the same group of customers (for example, Pepsi and Coca-Cola).

But, competition can also come from firms in other industries who produce substitutes .

Substitutes may have quite different characteristics (for example, petroleum and natural gas).

Still, they represent a form of indirect competition because consumers can use them in place of one another (at least in some circumstances).

For example, petroleum and natural gas might produce heat and energy.

Below are ten factors to consider when examining the competition.

#1: Competitor Identification

Who are the company’s major competitors?

Taking Cadbury as an example, some of its major competitors might include Lindt, Ferrero, Nestlé, Hershey’s, and Mars.

What products and services does the competition offer?

#2: Substitutes

Who are the company’s indirect competitors? That is, which firms are producing substitutes?

Identifying indirect competitors helps to take a broader view of what the company offers.

For example, Cadbury sells chocolate.

But it might be considered a snack food company.

So indirect competitors might include companies like Lays, Cheetos, and Doritos.

#3: Competitor Segmentation

Is it possible to segment competitors in a meaningful way?

The competition might be grouped by distribution channel, region, product line, or customer segment.

#4: Size and Concentration

What are the revenues and market shares of major competitors?

What is the concentration of competitors in the industry?

Are there many small competitors (a low-concentration industry) or a few dominant players (a high-concentration industry)?

Examples of high-concentration industries include oil, tobacco, and soft drinks.

Examples of low-concentration industries include wheat and corn.

#5: Performance

What is the historical performance of the competition?

Relevant performance can be profit margins, net income, and return on investment.

#6: Industry Lifecycle

Where is the industry’s lifecycle (early stage, growth, maturity, or decline)?

#7: Industry Drivers

What drives the industry: brand, product quality, the scale of operations, or technology?

#8: Competitive Advantages

What is the competition good at?

How sustainable are these advantages?

What are the competition’s weaknesses? How easily can these weaknesses be exploited?

#9: Competitive Strategy

What strategy is the competition pursuing?

Is the competition producing products that are low-cost or differentiated?

What customer segments is the competition targeting?

What are the competition’s pricing and distribution strategies?

What is the competition’s growth strategy?

Are they seeking growth by focusing on customer retention, increased sales volume, entering new markets, or launching new products?

#10: Barriers to entry

Key barriers to entry include capital requirements, economies of scale, network effects, product differentiation, proprietary product, technology, government policy, access to suppliers, access to distribution channels, and switching costs. (see Porter’s five forces model).

In assessing the business landscape, it is not enough to understand the customer and the competition.

Understanding the firm from whose perspective you are analyzing the industry is also important .

Below are ten factors to consider when examining the company.

#1: Performance

What is the historical performance of the company?

What is its market share?

If profits are falling, what is the cause of the issue?

#2: Competitive Advantage

What resources and capabilities does the company possess?

Consider tangible assets (property, plant, equipment, inventory, and employees) and intangible assets (brand, patents, copyrights, and specialized knowledge).

How sustainable are the company’s advantages? What are the company’s weaknesses, and can they be remedied?

#3: Competitive Strategy

What is the company’s competitive strategy?

Is the company producing products that are low-cost or differentiated?

Which customer segments does the company target? What are the company’s pricing, distribution, and growth strategies?

#4: Products

What does the company offer, and how does it benefit consumers?

Does the product have any downsides or side effects?

Is the product differentiated?

How does the company’s product offering compare with the competition?

Are there substitutes available?

#5: Finances

If the company is considering a particular course of action, does it have sufficient funds available?

Financing may be secured from various sources, including internal cash reserves, bank loans, shareholder loans, bond issues, or the sale of shares.

How many units will the company need to sell to cover the cost of the project?

Is there sufficient market demand?

#6: Cost Structure

To understand a company’s cost structure, it helps to break each business unit down into the collection of activities performed to produce value for customers.

How each activity is performed, and its economics will determine a firm’s relative cost structure within its industry.

Are costs predominantly fixed or variable?

How does this compare with the competition?

#7: Organisational Cohesiveness

Understanding a firm’s inner workings is important since competitive strategies can fail if they conflict with its culture, systems, and general business.

The organizational aspects of a firm can be examined using the McKinsey 7 S Model.

#8: Marketing

How do customers perceive the company and its products?

How does the company communicate with customers?

#9: Distribution Channels

What distribution channels does the company use to reach customers?

Are there other channels that are more cost-effective or preferred by customers?

#10: Customer Service

Does the company have a customer loyalty program?

How does the company interact with customers and support its customers post-sale?

Are employees empowered to solve problems and delight customers?

Case interview framework 4: PESTEL (or PESTLE)

PESTEL is an acronym for five factors – Political, Economic, Social, Technological, Legal, and Environmental – that can influence a company’s performance or strategic decisions.

A PESTEL analysis examines these external forces that can have strategic implications for the company .

And conducting a PESTEL analysis can be helpful for three reasons:

Understanding the facts : Understanding the big picture can help a business make informed decisions and avoid incorrect assumptions based on past experience.

Anticipating change : Understanding the macro environment can help a business identify trends and anticipate change, allowing it to take advantage of opportunities and manage potential threats.

Avoiding failure : Understanding the macro environment can help a business (and its investors) to identify projects that are likely to fail due to unfavorable conditions.

Below is a list of some of the general issues the interviewee should consider:

Political forces

• Are there any legal or political restrictions, such as new legislation, that would impede the product’s sale?
• What regulations must be addressed before introducing the product (health regulations/antitrust, etc.)?

Economic factors

• Has the economy’s overall performance impacted the sale of my product? Interest rate? Unemployment figures? Exchange rates? Balance of Payments? Free-Trade Agreements?

Socio-cultural forces

• What norms/cultural practices should be considered when entering a new market?
• Are there any trends in religious practices/traditions/rituals that should be considered?

Technological factors

• What are some of the technological trends in the market that could help/diminish the sale of the product (e.g., paper-based media vs. internet)?
• What R&D advancements were made by the market that would have a long-term impact on the very survival of the company (e.g., pay-per-view video vs. video stores)?

Environmental factors

• How does the business affect the environment?

Legal factors

Finally, the folks from the YT channel Business To You have made a great video about the PESTLE model:

Case interview framework 5: Profitability framework

There’s a good chance that the cases discussed during the interview will often touch on issues of declining profitability .

This framework is very helpful in organizing your thoughts and methodically approaching profitability problems.

According to the Profitability Framework’s opening statement, profit is a function of revenue and costs.

A company’s profitability declines when revenue has dropped, costs have risen, or both.

The goal is to identify the component of the equation that is reducing profitability and determine the best course of action for fixing it.

A quick note:

Variable costs are costs that vary with the units sold.

Fixed costs are costs that do not vary with the units sold.

Case interview framework 6: Unit contribution

The following is a framework you can use to help you understand the economics of the product’s contribution.

This framework is critical when forecasting the overall success of the product .

Case interview framework 7: Break Even

A break-even analysis tells you how many units of a product must be sold to cover the fixed and variable production costs.

For instance, this is important when deciding whether to launch a new product.

Also, a break-even analysis concerns a product’s contribution margin (selling price minus variable costs per unit; see the previous section).

So, the contribution margin is the excess between the selling price of the product and the total variable costs .

For example, if an item sells for $100, the total fixed costs are $25 per unit, and the total variable costs are $60 per unit, the product’s contribution margin is $40 ($100 – $60).

This $40 reflects the revenue collected to cover the remaining fixed costs, which are excluded when figuring the contribution margin.

Case interview framework 8: ROI

ROI is an acronym for Return On Investment.

The ROI is a performance measure that a company can use to evaluate the return from an investment or to compare the returns of several different investments .

For example, if you spent $10,000 and made $15,000, your ROI would be 50%.

[ ( $15,000 – $10,000 ) / $10,000 ] x 100% = 50%

Case interview framework 9: Payback

A payback period is the time needed to recover the cost of an investment.

Simply put, it is the time an investment reaches a breakeven point .

For example, if a company invests $300,000 in a new production line, and the production line then produces a positive cash flow of $100,000 per year, then the payback period is 3 years.

Another example:

You are offered to invest in the project $120K.

The project will bring on average $30K a year in net profit.

Using the payback formula, we get a payback period for capital invested of four years (we divided 120,000 by 30,000).

Case interview framework 10: Value Chain

A Value Chain Analysis is a concept first described and popularised by Michael Porter in his 1985 book, Competitive Advantage .

Value Chain Analysis involves identifying all the important business activities and determining which ones give the company a competitive advantage .

Also, a value chain analysis can be performed to identify potential root causes of a business problem.

For instance, a Value Chain Analysis can be undertaken by following three steps:

• Break down a company into its key activities under each heading in the model.
• Identify activities that contribute to the firm’s competitive advantage by giving it a cost advantage or creating product differentiation.
• Develop strategies around the activities that provide a sustainable competitive advantage.

Cost advantage

A business can achieve a cost advantage over its competitors by understanding the costs associated with each activity.

And then organizing each activity so that it is as efficient as possible.

Porter identified ten cost drivers related to each activity in the value chain : 1. Economies of Scale 2. Learning 3. Capacity utilization 4. Linkages among activities 5. Interrelationships among business units 6. Degree of vertical integration 7. Timing of market entry 8. Firm’s policy on targeting cost or product differentiation 9. Geographic location 10. Institutional factors (regulation, union activity, taxes, etc.)

A firm can develop a cost advantage by controlling these ten cost drivers better than its competitors.

A firm can achieve product differentiation by focusing on its core competencies to perform them better than its competitors .

Product differentiation can be achieved through any part of the value chain.

For example, procurement of unique inputs and not widely available to competitors, providing high levels of product support services, or designing innovative and aesthetically attractive products.

Case interview framework 11: Ansoff Matrix

The Product/Market Expansion Matrix (or “Ansoff Matrix” as it is sometimes called) was developed by a Russian-American mathematician named Igor Ansoff.

And it was first explained in his 1957 Harvard Business Review article entitled Strategies for Diversification.

The Product/Market Expansion Matrix can help a firm define a product-market growth strategy by focusing on four growth alternatives :

1. Market Penetration; 2. Market Development; 3. Product Development; and 4. Diversification.

The four alternative growth strategies are:

Market Penetration : A strategy to increase sales without departing from the original product-market strategy. This involves increasing sales to existing customers and finding new customers for existing products.

Market Development : A strategy to sell existing products to new markets (normally with some modifications). Ansoff described this as a strategy “to adapt [the] present product line … to new missions.” For example, Boeing might adapt a passenger aircraft model for cargo transportation.

Product Development : A strategy to sell new products, with new or altered features, to existing markets. Ansoff described this as a strategy to develop products with “new and different characteristics such as will improve the performance of the [existing] mission.” For example, Boeing might develop a new aircraft design with improved fuel economy.

Diversification : A strategy to develop new products for new markets, which can be related to the current business (e.g., vertical integration or horizontal diversification) or unrelated (e.g., conglomerate diversification).

Learn how to create custom case interview frameworks

The question then becomes, “How do you use business frameworks in consulting interviews?”.

On the Internet, numerous suggestions exist for how you ought to proceed.

However, the two main schools of thought are Victor Cheng’s frameworks and Marc Cosentino’s Case In Point.

However, these two approaches have one thing in common: they both attempt to impose pre defined frameworks on cases .

For instance:

For a market entry case, those resources tell you the market entry framework you should use.

And for an M&A case, those resources tell you exactly the merger and acquisition framework you should use.

They push you to adapt the problem to your tools .

Since every case is different, this will inevitably result in average outcomes and rejections.

For instance, 10 different M&A cases should have 10 different merger and acquisition frameworks. 

Another example: 10 different market entry cases should have 10 different market entry frameworks. 

So, you have to learn how to create custom case interview frameworks.

You must create your own unique frameworks using First Principle Thinking .

Those case interview frameworks must be MECE .

To do so, I’ve created free training to help you in that journey .

You can sign up for free with the link below.

Case interview frameworks: Final words

I hope you enjoyed this updated guide to business frameworks.

Those consulting frameworks will help you join a top consulting firm.

Now, I’d like to hear from you:

Which frameworks from today’s guide do you use the most?

Or which frameworks are new to you?

Has this guide helped you develop your business acumen?

Let me know by leaving a quick comment below right now.

To your success,

P.S. Need help with your case interview preparation?

Check whether our coaching program is a good fit. 

Do you know?

We have a unique coaching model and deliver amazing results .

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47 case interview examples (from McKinsey, BCG, Bain, etc.)

One of the best ways to prepare for   case interviews  at firms like McKinsey, BCG, or Bain, is by studying case interview examples. 

There are a lot of free sample cases out there, but it's really hard to know where to start. So in this article, we have listed all the best free case examples available, in one place.

The below list of resources includes interactive case interview samples provided by consulting firms, video case interview demonstrations, case books, and materials developed by the team here at IGotAnOffer. Let's continue to the list.

• McKinsey examples
• BCG examples
• Bain examples
• Deloitte examples
• Other firms' examples
• Case books from consulting clubs
• Case interview preparation

Click here to practise 1-on-1 with MBB ex-interviewers

1. mckinsey case interview examples.

• Beautify case interview (McKinsey website)
• Diconsa case interview (McKinsey website)
• Electro-light case interview (McKinsey website)
• GlobaPharm case interview (McKinsey website)
• National Education case interview (McKinsey website)
• Talbot Trucks case interview (McKinsey website)
• Shops Corporation case interview (McKinsey website)
• Conservation Forever case interview (McKinsey website)
• McKinsey case interview guide (by IGotAnOffer)
• Profitability case with ex-McKinsey manager (by IGotAnOffer)
• McKinsey live case interview extract (by IGotAnOffer) - See below

2. BCG case interview examples

• Foods Inc and GenCo case samples  (BCG website)
• Chateau Boomerang written case interview  (BCG website)
• BCG case interview guide (by IGotAnOffer)
• Written cases guide (by IGotAnOffer)
• BCG live case interview with notes (by IGotAnOffer)
• BCG mock case interview with ex-BCG associate director - Public sector case (by IGotAnOffer)
• BCG mock case interview: Revenue problem case (by IGotAnOffer) - See below

3. Bain case interview examples

• CoffeeCo practice case (Bain website)
• FashionCo practice case (Bain website)
• Associate Consultant mock interview video (Bain website)
• Consultant mock interview video (Bain website)
• Written case interview tips (Bain website)
• Bain case interview guide   (by IGotAnOffer)
• Digital transformation case with ex-Bain consultant
• Bain case mock interview with ex-Bain manager (below)

4. Deloitte case interview examples

• Engagement Strategy practice case (Deloitte website)
• Recreation Unlimited practice case (Deloitte website)
• Strategic Vision practice case (Deloitte website)
• Retail Strategy practice case  (Deloitte website)
• Finance Strategy practice case  (Deloitte website)
• Talent Management practice case (Deloitte website)
• Enterprise Resource Management practice case (Deloitte website)
• Footloose written case  (by Deloitte)
• Deloitte case interview guide (by IGotAnOffer)

5. Accenture case interview examples

• Case interview workbook (by Accenture)
• Accenture case interview guide (by IGotAnOffer)

6. OC&C case interview examples

• Leisure Club case example (by OC&C)
• Imported Spirits case example (by OC&C)

7. Oliver Wyman case interview examples

• Wumbleworld case sample (Oliver Wyman website)
• Aqualine case sample (Oliver Wyman website)
• Oliver Wyman case interview guide (by IGotAnOffer)

8. A.T. Kearney case interview examples

• Promotion planning case question (A.T. Kearney website)
• Consulting case book and examples (by A.T. Kearney)
• AT Kearney case interview guide (by IGotAnOffer)

9. Strategy& / PWC case interview examples

• Presentation overview with sample questions (by Strategy& / PWC)
• Strategy& / PWC case interview guide (by IGotAnOffer)

10. L.E.K. Consulting case interview examples

• Case interview example video walkthrough   (L.E.K. website)
• Market sizing case example video walkthrough  (L.E.K. website)

11. Roland Berger case interview examples

• Transit oriented development case webinar part 1  (Roland Berger website)
• Transit oriented development case webinar part 2   (Roland Berger website)
• 3D printed hip implants case webinar part 1   (Roland Berger website)
• 3D printed hip implants case webinar part 2   (Roland Berger website)
• Roland Berger case interview guide   (by IGotAnOffer)

12. Capital One case interview examples

• Case interview example video walkthrough  (Capital One website)
• Capital One case interview guide (by IGotAnOffer)

12. EY Parthenon case interview examples

• Candidate-led case example with feedback (by IGotAnOffer)

14. Consulting clubs case interview examples

• Berkeley case book (2006)
• Columbia case book (2006)
• Darden case book (2012)
• Darden case book (2018)
• Duke case book (2010)
• Duke case book (2014)
• ESADE case book (2011)
• Goizueta case book (2006)
• Illinois case book (2015)
• LBS case book (2006)
• MIT case book (2001)
• Notre Dame case book (2017)
• Ross case book (2010)
• Wharton case book (2010)

Practice with experts

Using case interview examples is a key part of your interview preparation, but it isn’t enough.

At some point you’ll want to practise with friends or family who can give some useful feedback. However, if you really want the best possible preparation for your case interview, you'll also want to work with ex-consultants who have experience running interviews at McKinsey, Bain, BCG, etc.

If you know anyone who fits that description, fantastic! But for most of us, it's tough to find the right connections to make this happen. And it might also be difficult to practice multiple hours with that person unless you know them really well.

Here's the good news. We've already made the connections for you. We’ve created a coaching service where you can do mock case interviews 1-on-1 with ex-interviewers from MBB firms . Start scheduling sessions today!

Related articles:

Market Entry Framework: How to Apply in Case Interviews

The market entry framework is a tool to assess whether a company should enter a particular market or introduce new products in existing markets by assessing growth opportunities, capabilities, and challenges. In case interviews , these frameworks are useful templates for market entry cases.

In this article, I will explain how you can apply market entry frameworks in market entry cases using a four-step guide and case examples. Let’s get started!

Table of Contents

Market entry cases in case interview

A market entry is a type of case interview that asks candidates to evaluate and decide whether a client company should enter a particular market. The market entry case is one of the most common types of cases in consulting interviews since, in practice, consultants frequently deal with this type of cases 

Among MBB (Big 3) firms , market entry cases are more common at BCG and Bain than McKinsey.

Our Case Interview End-to-End Secrets Program assembled everything you need to know about consulting case interviews and how to pass them, so that’s the best place to go if you have general questions.

Types of market entry cases

There are three commonly encountered market entry cases: New geographic market case, New product category case, and New customer segment case. 

However, you also need to be aware that there are countless types of market entry cases and you can face any type of case in your case interview. Each case you receive has certain differences and comes with a different breakdown and solution.

Type 1: New geographic market case

Geographic market entry cases ask candidates to assess whether the business should expand to a new geographical market , for example, if Amazon Go should enter the UK or if Mercy Meats should enter South America.

Type 2: New product category case

On the other hand, product expansion cases ask candidates to assess whether the business should launch new business lines into their existing market , for example, if Disney should launch their own streaming service, or if Walmart should start selling meal kits from its service partners.

Type 3: New customer segment case

Lastly, targeting different customer segment cases ask candidates to assess whether the company ought to consider offering a version of an existing product to a new customer segment , for example, if KFC should serve premium fried chicken for the wealthy or if Gucci should target working class people. 

Examples of market entry cases

A French soft drink company, Le Seine, is looking to diversify its holdings by investing in a new fast food chain in the US. You are hired to determine whether they should pursue this path and, if so, how they should go about execution (HBS Case Interview Guide).

The client is a grocery store chain considering whether they should enter the emerging Internet-based grocery shopping/delivery market in the Boston area. This regional chain is currently one of the leaders in northern New England's traditional grocery store market.

In their core market, two competitors have emerged in the Internet/at-home grocery shopping business and are rapidly gaining market share. Should the client enter the market?

Apple, a technology company renowned for its premium smartphones and computers, has predominantly focused on individual consumers and creative professionals. Apple is now contemplating the prospect of expanding its market by targeting the corporate sector. Should Apple venture into the corporate market? If so, how should they do it?

Case interview frameworks – Definition & characteristics

Understanding what a framework is, the characteristics of good frameworks, and how to apply them in case interviews is essential to sounding structured and methodical – two main consulting traits interviewers look for.

What is a case interview framework? 

The most important thing to remember when using frameworks to solve a problem is to be FLEXIBLE. Consulting problems are complex and usually, there are no clear-cut, ready-to-use frameworks to solve them. The interviewer looks for context-relevant frameworks, not complicated but inappropriate ones.

Hence, the more you master the “building-blocks” frameworks, the better you can draw specific frameworks suitable to each context. Learn more about frameworks here .

Characteristics of a good framework

When building a framework, you should keep these three priorities in mind:

A good framework is top-down: The problem must be broken down from the generic to the specific, with each hypothesis staying on one level of the issue tree .

A good framework is MECE: MECE is extremely important in problem-solving because it ensures complete coverage of the problem while preventing effort duplications.

A good framework is geared toward isolating the root cause: To isolate the root cause, your framework must strictly follow the problem-solving methodology .

The MConsultingPrep market entry framework

In a market entry case interview , you are expected to evaluate an expansion opportunity (entry into new markets, new segments or new product lines in existing markets), decide whether the client company should pursue it , and, if yes, suggest an entry strategy . The underlying principle of the market entry framework is based on this process.

A market entry framework answers three questions, in order: “Should I enter?”, “Can I enter?”, “How to enter?” .

These ordered questions make up the  three steps of a market entry framework: Assessment, Feasibility, and Implementation.

Step 1: Assessment – Should I enter?

The first step is to justify WHY the company should pursue a particular expansion opportunity. To answer “Should I enter?”, you have to make two assessments – market assessment and company assessment . 

Company assessment will reveal the company’s internal motivations to expand, whereas market assessment shows the external motivations driving expansion decisions.

Company assessment

The first step after receiving a case is to ask for more information about your client company. Use that data to understand if there are internal motivations driving expansion decisions.

For example, let’s say you asked about revenue and were informed of a declining trend. You know this is a market entry case, so you might hypothesize that the client company’s revenue is declining because their product is at the mature stage of the product life cycle.

If the hypothesis is confirmed, this implies an internal motivation for the company’s expansion to other markets to capture new market shares or introduce new products to capture more revenues from their early life cycles.

Market assessment

The next step is to inquire into the market of interest to pinpoint the external motivations that can justify the need to expand. What is attractive about this market? Is it the market size, or the potential market demand? 

If information about the market size is available in the case, this implies that you need to first estimate it .

Sometimes, markets are attractive because of their location advantage , which can save transport costs or enable the client company to obtain cheap inputs . 

The open trade environment of a market might also help firms jump trade barriers. Finally, political stability is also attractive for minimizing risks and conducting business sustainably in the long run.

Other information to ask for:

What is the current product portfolio? What is the life cycle of each product? How closely related are the current products?

Who are the customers? How are they segmented?

What are the company’s key strengths and weaknesses?

What are the current distribution channels?

Who are the key suppliers and partners?

Regardless, the most important information to ask for are:

What geographical area will I serve, and how much demand will there be in the market?

What is the market’s growth rate? What are the current trends in the industry?

At what stage of the life cycle is it? Emerging, Mature, Declining?

Who are the existing competitors in the market?

Are there substitute products or potential entrants?

Are there any location-specific advantages that can save transport/ input costs?

Are there any macroeconomic, social, or geopolitical factors to consider?

Is there a key technology involved? How fast are technologies changing in the industry?

After gathering information about the company and market opportunities, do your cost-benefit analysis. By then, you can decide if the company SHOULD enter a new market or not. 

If you decide that the company should not enter , you no longer need to answer the other two questions. If you decide that it should enter , move on with the next step. 

Part 2: Feasibility – Can I enter?

Remember, only move on with this step if you’ve decided that the estimated benefit of this market entry outweighs the estimated cost. 

At this point, you need to assess the FEASIBILITY of entering a new market – does the client company have the financial capacities and capabilities to adapt to and profit from the new market?

Financial feasibility

Figure out whether the client company’s financial situation can cover investment costs . To do this, you first need to estimate the amount of investment required.

You can follow these questions, in order:

What investments are required for this market entry? (R&D, warehouse rent, factory rent, marketing, distribution, etc)

What is the current financial situation of the company?

Can the company fund these investments itself or can it raise the required capital?

Capability feasibility

The company’s capabilities help it secure market share by differentiating it from other competitors in the market. 

Examples of capabilities are firm-specific competitive advantages such as patented technologies, efficient logistics & production capacities, local knowledge, a low-cost structure, etc.

Important information to ask for:

Does the company have efficient distribution channels/ logistics?

Does the company have efficient production capacities?

Does the company have a patented technology/design that makes room for no substitution of its products?

Can the company obtain the capabilities it currently lacks?

Step 3: Implementation – How to enter?

This step will be applied if it’s feasible for the client to enter this new market and you must next suggest an entry strategy or an implementation plan. This plan must be specific in terms of timeline, modes of expansion, and execution details.

However, there are some market entry scenarios where the project may just require the first two components, which entails responding to the customer's inquiry regarding whether or not they should enter the market they desire. 

Propose a timeframe

Propose a time frame for your expansion strategy. When is the right time for the client company to enter the market? Is there a first-mover advantage at present? 

Don’t forget to refer back to the above information about the company’s situation and market opportunities to support your decision.

Propose a method of expansion

Regarding modes of expansion, there are three common strategies:

Partnership: Partnership entry modes are those wherein two (bilateral partnership) or more (network partnership) firms co-join their finance, skills, information and/or other resources to minimize risks. These are joint ventures , licensing , or joint distribution networks .

Organic: Organic entry modes involve those that increase the company’s sales using only internal resources. In other words, they are trade-based entry modes, such as exporting.

Mergers and Acquisitions (M&A): M&A generally occurs when one company directly purchases another company. Together, they form a new legal entity under one mother corporation.

Again, evaluate the information about the company and carefully compare that with the risks of each entry mode to decide on a suitable one. For example, if the client company has a patented technology, choosing a partnership entry mode runs the risk of technological theft.

You should also consider the commitment factor – how much control does the company want over the new market, and how much investment is it willing to make? 

With a simple strategy like exporting, you can exit easily but have less control. Meanwhile, with a wholly-owned subsidiary, investment costs are high but you also have more control.

Finalize your execution plan

The final step is to specify your execution plan, containing the key objectives to be implemented. The plan will also need to specify what tasks to be completed, who is in charge of each task, and how they should be carried out. 

The final plan will be the final deliverable to the client. The client can then choose to implement it themselves or sign another implementation contract.

The market entry framework – Sample case

Now, let’s apply the framework to a sample case so you can see the flow.

Situation: 

Your client company is Mercy Meats, an international plant-based meat producer in the US. The main ingredients in their products are soy protein and heme – a genetically modified ingredient extracted from soy roots that makes their products look and taste identical to animal meat.

Mercy Meats is considering an expansion in South American countries, Brazil in particular, after major successes in the US, Hong Kong, and Canada. Our client would like your help in deciding whether or not to pursue this growth opportunity, and if so, what their entry strategy should be.

We’ll begin by assessing the company – Mercy Meats, and Brazil’s market, to make an entry decision.

Company Assessment

For company assessment, we want to find out if there are any internal motivations specific to Mercy Meats regarding this entry decision. We are told that the only motivation is to satisfy its stakeholders’ expectations, profitability-wise and mission-wise.

Profitability-wise, shareholders want to scale up production to capitalize on economies of scale, thereby maximizing profits.

Mission-wise, the CEO and investors want to reduce the environmental footprint of the factory farming industry, by competing with conventional meat producers and making more consumers cut back on animal meat consumption.

Market Assessment

For market assessment, we will look at external motivations that Mercy Meats seek to justify its entry decision – attractive characteristics of Brazil’s alternative protein market.

What is the market’s size, growth rate, trends, and industry life cycle?

First, we’ll want to know the life cycle of plant-based meat, its market size in Brazil, the market’s growth rate, and trends. The plant-based industry is in its growth stage, with an annual average compound growth rate of 8% globally and 20% in Brazil’s market.

Meanwhile, we’re told that Brazil’s plant protein market size is predicted to reach $30.2 billion by 2023. This is mainly attributable to a strong shift in attitude towards vegetarianism among young Brazilian consumers. With a strong growth rate driven by positive attitude shifts, this market is an attractive place to be.

Who are the customers? What are their needs and preferences?

We can broadly construct a portfolio of our customers: people who are health-conscious, high-income, concerned about animal welfare, would buy plant-based protein as a substitution for animal protein, and enjoy similar tastes of real meat.

The interviewer might also inform us that our customers could be swayed by lab-grown meat for its real taste and “real meat” brand, although this technology is yet to be marketable due to its high price and environmental concerns.

The competitors of Mercy Meats will consist of any businesses meeting the same customer demand mentioned above. We’re told that direct competitors in the market are local plant-based brands, however, the tough competition will be posed by conventional meat players (such as Marfrig or JBS), who are starting to develop their own plant-based products.

Here, we should talk about events that can broadly affect our entry strategy. For example, we might point out that complex bureaucracy and lack of transparency are the two biggest barriers to doing business in Brazil.

As a response, the interviewer might say that Brazilian governments are committed to reducing bureaucracy by simplifying their tax structure and investing in public services digitalization (such as digitized tax fillings). This is a positive improvement, making Brazil a more attractive place to do business. You can raise other concerning issues in a similar manner if needed.

To summarize, we have sufficient reasons to decide that Mercy Meats should enter Brazil . Brazil’s plant-based protein market is overall attractive, with a strong predicted growth rate and, as a leading soy producer, can create a cost-saving advantage for the company.

The biggest concern so far is competition from well-established meat players, and lab-grown meat competitors in the near future. 

Step 2: Feasibility – Can I enter?

Now that we’ve decided that entering Brazil is beneficial for Mercy Meats, we need to see whether the client company is equipped with what’s required to do so, capability-wise and finance-wise.

First, we need to understand whether Mercy Meats has the capabilities (competitive advantages), to sustainably compete in the new market. 

In the US, Canada, and Singapore, Mercy Meats have very efficient logistical channels, with low warehouse capacity, minimal shipping time, low inventory turnover rate, and a high number of orders relative to all of its major competitors. The company definitely has the required capability to replicate another efficient logistical channel in Brazil.

Can the company produce premium quality products at a lower cost than its competitors?

Mercy Meats products, Mercy Burger, Mercy Sausage, and Mercy Pork, are much more expensive compared to animal meat products in Brazil. For example, one Impossible Burger pack weighing 1.4kg is currently priced at around $30, nearly 4 times higher than the same amount of beef (around $8 per 1.4kg) in Brazil. 

However, Brazil is the leading exporter of soybean in quantity due to its low price and premium quality. Hence, if the company can take advantage of the low soybean input in Brazil and can scale up its production, a more reasonable product pricing can be achieved. 

Does the company have a patented technology/design that distinguishes it from other competitors?

Mercy Meats owns a patented technology over its heme ingredient, a soy root-extracted ingredient that makes its products taste and look almost identical to animal meat. In fact, Burger Queen, a major fast food chain, chose to partner with Mercy Meats in the US because its products taste much more like real meat than that of Beyond Meat, Mercy Meats’ biggest competitor in the plant-based industry. 

What is the current financial situation of the company? Can the company fund the investments itself or can it raise the required capital?

Next, we will look at how much investment is required and whether the company can financially cover it. The total investment cost is estimated at $80 million, while the expected return is over $180 million in 2 years. 

Finance-wise, the company is doing really well, with average yearly revenue of $151 million. Mercy Meats also attracted many investors in the past, with $1.4 billion in total funding, of which $200 million was acquired in 2020. These figures exhibit investor confidence in the company, which implies a high chance of getting more funding in the near future.

After analyzing the facts and evidence, we can conclude that Mercy Meats clearly has the finance and capability to enter Brazil . Hence, we proceed with the decision to advise the client to say “Yes” to the entry decision.

The final step is to formulate an entry strategy, which includes deciding the implementation timeline, choosing the methods of expansion, and drafting an execution plan. We will examine each aspect, in the above order.

When is the best time to enter Brazil’s market?

The best time to enter Brazil is right now. We’ve observed that our major competitors, such as Marfrig, have started developing their own lines of plant-based meat. These competitors have better local knowledge than our client company and an already widely-recognized brand name in Brazil. Mercy Meats needs to move fast if it wants to secure a fair share of the plant-based meat market. 

Which method of expansion is the most suitable?

To effectively gauge demand, Mercy Meats should consider expanding under trade-based modes, exporting in particular, and growing organically first. After that, it is recommended that Mercy Meats establish its own subsidiary, to have better control of two aspects: technology and market. 

First, partnership modes are risky due to the potential of technological theft, subsidiaries or M&A modes can eliminate this risk, although they require more investment. Second, establishing a production subsidiary will enable the company to exert more control over the target market, by quickly adjusting production to customers’ needs and reducing logistic costs to be more cost-competitive . 

What is the execution plan?

Finally, we need to develop an execution plan.

What: The breakdown of tasks in the overall implementation plan, for example, establishing partnerships for exporting, marketing the product, setting up the factory, etc.

Who: Who will be in charge of the aforementioned tasks? What are their deliverables?

How: What are the targets for each task, what are the expected quality standards that align with the key objectives?

Market entry case: examples & guidelines 

Case 1: medicare plus.

Our client, MediCare Plus, is considering opening a new medical clinic in the affluent Riverside neighborhood of Los Angeles. Riverside is known for its high-income residents, including individuals from various socio-economic segments. 

The client aims to diversify their healthcare services and tap into the lucrative Riverside market that aligns with their expertise. They seek your guidance on whether to proceed with this investment.

Should MediCare Plus open a new medical clinic in Riverside, Los Angeles?

Step 1: Assessment - Should I Enter?

Current Capability: Can MediCare Plus handle this expansion given its current resources and expertise?

Strategic Alignment: Does this expansion align with MediCare Plus' long-term goals?

Market Size: How big is the Riverside healthcare market?

Market Growth: Is the Riverside healthcare market expected to grow?

Competitors: Who are the competitors in Riverside's healthcare market?

Step 2: Feasibility - Can I Enter?

Financial Feasibility

Initial Investment: What's the cost to set up the new clinic?

Operating Costs: What are the ongoing expenses, including salaries, maintenance, and utilities?

Revenue Projection: How much revenue can we expect from different patient segments and specialties?

Capability Assessment

• Facilities: Can MediCare Plus handle clinic setup and management in Riverside?
• Financing: How can we finance this expansion?
• Doctor and Patient Attraction: Can we attract top doctors and patients to Riverside?

Step 3: Implementation - How I Enter?

Key Milestones: What are the critical milestones and deadlines for the expansion?

Responsibility: Who is responsible for each task?

Tasks: What specific activities are needed for a successful launch?

Methods: How will we execute each task effectively?

Approaches: What strategies and methods will we use for marketing, patient acquisition, and operations?

Case 2: TechGizmo Inc .

Our client, TechGizmo Inc., is a leading manufacturer of smartphones and consumer electronics. They have been experiencing steady growth, with revenues of $500 million last year and a healthy profit margin of 15%. However, they are concerned about the cyclical nature of the consumer electronics industry, which can lead to fluctuations in their business.

The CEO is considering entering the market for smart home devices. They want your opinion on whether this would be a good strategic move for TechGizmo Inc.?

Current Capability: Can TechGizmo handle this expansion with its existing resources and expertise?

Strategic Alignment: Does this expansion align with TechGizmo's long-term goals and expertise in consumer electronics?

Market Size: How big is the smart home devices market in Westwood?

Market Growth: Is the smart home devices market in Westwood expected to grow?

Competitors: Who are the competitors in Westwood's smart home devices market?

Initial Investment: What's the cost to develop and launch the new line of smart home devices?

Operating Costs: What are the ongoing expenses, including production, marketing, and distribution?

Revenue Projection: How much revenue can we expect from different customer segments and product lines?

Product Development: Can TechGizmo efficiently develop and manufacture smart home devices?

Financing: What are the financing options available for this expansion?

Customer and Retailer Attraction: Can TechGizmo attract both customers and retailers to sell their smart home devices in Westwood?

Step 3: Implementation

Key Milestones: What are the critical milestones and deadlines for launching the new line of smart home devices?

Responsibility: Who is responsible for each task, from product development to marketing?

Tasks: What specific activities are needed for a successful product launch?

Methods: How will we execute each task effectively, from marketing strategies to distribution?

Approaches: What marketing strategies and distribution methods will we use to promote and sell our smart home devices in Westwood?

What do you think about the market entry framework sample presented above? It’s super detailed, isn’t it? Even so, it’s just theory. 

The only way to master the market entry framework is to practice. You need to learn and understand the fundamentals of market entry cases.

And it would be best if you had any consulting experts review your performance. Reach out to our ex-consultants , who can give you concrete feedback on your answer to a specific market entry framework case. 

Meet your coach today to start sharpening your skills! They’ll help you determine your weak areas and suggest effective improvement methods. 

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A case interview is where candidates is asked to solve a business problem. They are used by consulting firms to evaluate problem-solving skill & soft skills

Case interview frameworks are methods for addressing and solving business cases.  A framework can be extensively customized or off-the-shelf for specific cases.

S T R E E T OF W A L L S

Consulting case study 101: an introduction to frameworks.

Before we look at individual Cases, it is important to begin by looking at analysis frameworks that commonly can be used to address Case Study questions. In this chapter, we will outline some of the core frameworks and some additional Consulting concepts that are important to grasp and will form part of many interviews. The frameworks will be helpful to answer certain types of cases, depending on the type of case.  In reality, few case interviews or real-life business situations cover just one concept or business problem, so you have to have the flexibility to apply a range of concepts/structures.  For example, a Company bringing a new product to market would require a market size analysis, competitor analysis, as well as understanding the key customer segments.

The more you practice, the easier the cases will become and the more articulate and structured you’ll be in your answers.

An important note on this: historically, the vast majority of Consulting candidates have used specific business frameworks to answer cases.  Frameworks remain important as concepts to answer Case Studies, but you should absolutely avoid any rigid use of a specific framework . In reality, the main purpose of learning the frameworks is to help you to structure your answers , just as the case situations in our later examples should do.

The key frameworks that follow should be used directly in certain Case situations , but more broadly they should be used as a way to expand your strategic thinking , which is the critical component of success in the Case Study interview process. Ultimately, a top-flight candidate will build his or her own framework/structure for evaluating the Case as it progresses, often drawing from many of the frameworks and concepts in this module, and potentially others. In other words, you should absolutely avoid using the phrase, “I will apply framework X to this case.” However, be aware of the “famous” frameworks in case they are mentioned in an interview setting, and don’t be shy about referencing them as you dive into the specifics of the Case Study you’re evaluating.

Porter’s Five Forces

Porter’s Five Forces has become an incredibly well known framework in the business strategy world. It is probably the most famous of all of them. It was introduced by Harvard Professor and Monitor Consulting firm founder Michael Porter.  Porter’s Five Forces is a high-level framework that you can draw upon to perform a market landscape and competitor dynamics analysis. It can help determine whether a market or company is attractive, whether the client for whom the analysis is being performed is a private equity firm thinking about buying a company, or a major company thinking about entering or exiting a certain market segment. In most cases, a Case Study will address at least some of the components found in this framework.

Here are the Five Forces in detail:

Porter’s Five Forces

• Legal or regulatory barriers (for example, patents or government contracts)
• Economies of scale
• Cost advantage (for example, unique access to lower raw material costs)
• Access to distribution channels
• Product differentiation (for example, how is this product different?)
• Industry growth rate
• Industry fragmentation
• Level of switching costs
• Motivation to reduce prices (for example, from excess capacity)
• Level of substitute products
• Buyer’s decision influenced by supplier
• Supplier inputs/products have high switching costs
• Supplier has potential to forward integrate
• Supplier accounts for large share of the inputs/products
• High customer/client concentration
• Level of commoditization of product/input
• Level of switching costs for buyer
• Buyer has significant product/market information
• Substitute products/services that can compete on price and/or quality
• Switching costs to shift to substitute products

This simple framework has been around for a long time as a way to think about any industry or company, and applies broadly to a wide range of Case Study questions. If you compare the description below to that of Porter’s Five Forces above, you will see that there is substantial overlap.

The “3 Cs” approach is to address any Case situation by assessing the:

• Competitors
• Customers/clients

The 3 C’s

• Pros and cons of product/service
• Value chain
• Revenue (price × volume) and expenses
• Core competencies
• Regulatory environment
• Distribution network
• Management and core employees
• Market share
• Fragmentation
• Financial situation (for example, deep pocket competitors?)
• Other competencies (for example, marketing or distribution channels)
• Value proposition versus client
• Demographics (age, gender, etc.)
• Value of core customers/clients
• Wants and needs of customers/clients
• Customer/client segment sizes
• Customer/client segment shares
• Customer/client segment growth rate
• Product characteristics
• Personnel (especially for B2B)

This framework is often used specifically whenever there is a marketing component involved in a case (for example: how to increase sales resulting from any profitability optimization case, deciding on an approach to enter a market, etc.). When combined with the 3 Cs, this framework can cover many topics and as you practice more Case Study questions, you’ll develop a better sense of when and how to draw from these frameworks.

The “4 Ps” approach is to address a marketing-oriented Case situation by assessing the:

The 4 P’s

• Commoditized or differentiated?
• How close are the substitutes?
• Value proposition versus substitutes (price, quality, etc.)
• Switching costs
• Why are clients/customers purchasing the product?
• Brand, availability, service, value, reliability, aesthetic, etc.
• Is our product sufficiently better to justify a higher price? Or is it somewhat commoditized?
• Customer loyalty/lock-in
• Supply/demand: current state of demand and supply for the product or service
• Price of substitute products/services
• Price of competitor products/services
• Brand position and perception
• What is the cost for the client to produce the product or offer the service?
• Select/exclusive channels or wide distribution network?
• Seamless delivery to customers
• Internal transport or outsource?
• Specific areas of a site online
• Product placement in stores
• Customer/client awareness
• Is the Company reaching and attracting its target market?
• What are the most effective marketing campaign strategies?
• Return on marketing spend
• Are we retaining our customers/clients?
• Can we up-sell or cross-sell to our current customers/clients?

SWOT (Strengths, Weaknesses, Opportunities, Threats)

SWOT analysis is more of a mini-framework, specifically for quickly evaluating a single company in an industry. In that regard, it’s far less complete than other frameworks, and can often miss important details. However an interviewer could potentially ask you for a SWOT analysis, and you should be prepared to apply it in that case.

SWOT is effectively a quick, high-level market landscape/competitive dynamics analysis arranged using the following terminology:

SWOT Analysis

• Strengths: Company strengths within an industry
• Weaknesses: Company weaknesses within an industry
• Opportunities: Company opportunities available within the industry (or potentially by branching into a new industry)
• Threats: Company threats within the industry (or potentially from companies whose primary business is in another, related industry, or from disruptive technologies that potentially threaten all companies in an industry)

It should be noted that SWOT can be extended from comparing a specific company to the others in the industry, to comparing a specific industry or sub-industry to other, related industries or sub-industries within the economy. For example, a classic SWOT analysis might entail benchmarking Delta Airlines with the airline industry as a whole; an extension could entail benchmarking the entire airline industry against the broad transportation sector.

Other Frameworks

You should be very familiar with the well-known frameworks already discussed in this chapter, although it is unlikely that an interviewer would ask you to use a particular framework in your analysis. Instead, it is typically expected that you draw on the concepts encompassed by these frameworks and/or the concepts that we will outline in the next chapter, which breaks down the common Case Study interview question types .

In addition to these frameworks, there are a number of other frameworks that you will read about on certain Consulting firm sites, but you will probably not be expected to know them in detail or apply them specifically in an interview. It does not hurt, however, to be familiar with them. Therefore, we include these example frameworks for your reference and encourage you to at least familiarize yourself with the basics of them:

• The BCG Growth Share Matrix for evaluating product or business lines
• The McKinsey 7S Framework for evaluating organizational effectiveness
• The Product/Market Grid to determine growth opportunities
• Force Field Analysis for Change Management
• The Affinity Diagram for organizing ideas and information

Additional Analysis Concepts

There are additional, relatively simple analytical techniques that you should be prepared for in Consulting Case Study interviews. These techniques tend to be numerical, and occur frequently, although none are comprehensive or broad enough to fall into the category of a “Framework”:

Break-Even Analysis

Fixed vs. variable expenses, net profit margin, return on investment (roi), compound annual growth rate (cagr).

• Lifetime Customer Value (LCV; sometimes referred to as “User Lifetime Value”)

Product Life Cycle

Opportunity cost, elasticity (supply or demand).

• Financial Statements, Accounting, and Valuation

Let’s take a deeper look at each analysis category.

• The gist of Break-Even Analysis cases is that the Fixed Costs of a business—i.e., the costs that are unavoidable—need to be overcome by making profit from sales of products. Presumably, each incremental sale contributes to profit at a rate that can be determined (or at least estimated); the question that is to be answered is, “How many units do I have to sell in order to overcome my Fixed Costs, i.e., to ‘Break Even’?”
• In other words, the Break-Even Point is the number of units sold at which Revenue equals Total Expenses (Fixed Expenses plus Variable Expenses).
• Break-Even Analysis is often applied when deciding whether to develop a new product or make a capital equipment investment, as well as helping in making decisions around how to price products and service and the number of units to produce.
• Formulaically, Break-Even Number of Units = Fixed expenses ÷ (Revenue per unit – Variable Expenses per unit).
• Note that the expression ( Revenue per unit – Variable Expenses per unit ) is often referred to as the Unit Contribution Margin .
• An understanding of how to analyze Expenses and differentiate Fixed Expenses from Variable Expenses is useful in order to run a Break-Even Analysis of a company.
• Break-Even Analysis can get more complex, as there are microeconomic and macroeconomic considerations that can change both the Fixed and Variable Expenses, but the basic concept is an important one; therefore you will likely come across some form of Break-Even Analysis in Consulting Case Study interviews.
• Note that this concept can also be translated into a question on Break-Even Price , i.e., “Assuming a certain volume of sales, what is the sales price required in order to break even?”
• Formulaically, Break-Even Price = (Fixed Expenses ÷ Sales Volume) + Variable Expenses per unit .
• Note that the expression ( Fixed Expenses ÷ Sales Volume ) equates to the required Unit Contribution Margin at the assumed Sales Volume in order to break even. In other words, Break-Even Price = Required Unit Contribution Margin + Variable Expenses per Unit .
• Fixed Expenses (or Fixed Costs ) are expenses that do typically fluctuate regardless of the production or sales levels. These expenses can be viewed as “unavoidable,” at least in the short-term. Typical examples for Fixed Expenses include Rent, Insurance, Mortgage Payments, and Corporate Overhead Expenses.
• Variable Expenses (or Variable Costs ) are impacted by changes in production or sales levels – typical examples include are Raw Materials, Direct Labor Expenses (wages and benefits), and delivery costs.
• Understanding a Company’s Fixed vs. Variable Cost structure is important in a variety of cases (such as in Break-Even Analysis, discussed above).
• When analyzing a Case, always keep in mind that total Fixed Expenses remain constant as volume rises (or falls), but Fixed Expenses per unit decline as volume rises (rise as volume falls). For example, if a computer component manufacturer has $1,000 of Fixed Expenses and produces 100 components, then the $1,000 of Fixed Expenses will be spread across 100 components (= $10 of Fixed Expenses per unit). If the Company produced 200 components, then the Fixed Expenses per unit would decrease to $5 per unit.
• Variable Expenses, meanwhile, rise proportionately as volume increases, so Variable Expenses per unit remain constant.
• When an interviewer asks a candidate to calculate the Net Profit Margin (a.k.a. Profit Margin or Net Income Margin ), he or she will usually be referring to the total Net Income of a company or business line as a percentage of its Revenue: Net Profit Margin = Net Income ÷ Total Revenue.
• The interviewer could also refer to Gross Profit Margin , which is simply Gross Profit as a percentage of revenue: Gross Profit Margin = Gross Profit ÷ Total Revenue
• Similarly, the interview may also refer to Operating Profit Margin ( EBIT Margin ), or EBITDA Margin . In both cases, thus is simply the figure in question (Operating Profit, a.k.a. EBIT, or EBITDA) as a percentage of Revenue.
• Return on Investment (ROI) is a ratio that determines the return, or Profit, from capital invested. ROI is used in consulting interviews as a way to evaluate the return of a particular investment or to assess the feasibility of a potential investment or acquisition. Many companies have an internal ROI metric for capital investments.
• Standard ROI is calculated as follows: Profit from the Investment (Revenue minus Costs) ÷ Capital Invested .
• Note: Return on Assets (ROA) is a variation of this concept, but instead revolves around all capital invested in a project (Liabilities + Equity), rather than just Equity invested, which is typical for an ROI calculation.
• The Compound Annual Growth Rate (CAGR) is the percentage rate at which any figure, such as number of units sold, a population, or an investment must grow in each year to reach a given end value over a certain amount of time. (Note that this is not the only growth path to grow from a beginning number to an ending number, but it is the only growth path that is the same growth rate every year .)
• The formula to calculate CAGR is: [(Ending Value ÷ Beginning Value)^(1 ÷ Number of Years)] – 1.
• For example: If sales grew from $1,000 in the year 2001, when a store opened, to $2,100 in 2012, what is the CAGR?
• Answer: [(2,100 ÷ 1,000)^(1 ÷ 11)] – 1 = 2.1^(0.090909) = 7.0%
• Thus, the CAGR between 2001 and 2012 was 7.0%.
• CAGR is very similar in concept to Internal Rate of Return (IRR), which is the annual rate of return on an investment if its value grows by a specific multiple over a specific amount of time.
• Use the Rule of 72 to estimate CAGR whenever possible. The rule of 72 simply states that a quantity will roughly double in value whenever the number of years times the annual growth rate equals 72.
• Using the above example, we can see that the quantity slightly more than doubled, so the answer should be slightly above (72 ÷ 11) percent, or slightly above 6.6%. Indeed, it is!

Lifetime Customer Value (LCV)

• Lifetime Customer Value (LCV) projects the total profitability attributed to a firm’s future relationship to a typical customer.
• The idea behind this microeconomic analysis is to determine the reasonable cost to win or acquire a customer (or to maintain an existing customer, i.e., prevent him or her from “churning,” or switching to a competitor). It can also be used to determine level and type of customer service to provide, and as another way to estimate the value of a business. (In theory, the value of a business should equal the number of existing customers × the LCV per customer , plus growth opportunities.)
• The steps to calculate the LCV are as follows:
• Estimate the remaining customer years; in other words, how long is a typical customer expected to last with the company?
• Estimate future Revenue per year per customer, based on product volume per customer × price
• Estimate Total Expenses for producing those products (either separating Fixed Costs out or allocating them on a per-customer basis)
• Calculate the Net Present Value of the future profit (Revenue – Expenses) per customer (in other words, discount these future profits back into today’s equivalent dollars)
• Important for market sizing problems, the Product Life Cycle helps to calculate and project the annual market size for a given market/industry. It is often used by companies to project their own anticipated Revenue figures.
• Formulaically, Annual Market Size = Total Revenue of a product outstanding ÷ Average life of the product . For example, “Total Revenue of a product outstanding” might represent the sticker price of all cars driven in the US, while the “Average life of the product” would be the average number of years a car is driven.
• It is also worth knowing the four steps in the Product Life Cycle Curve , as the concept could come up in a hypothetical product case.
• Emerging: A new product or technology that is in initial adoption phases and therefore has very rapid growth rates (for example: electric cars)
• Growth: Product adoption is becoming widespread but still growing at an above-average rate (for example: smartphones)
• Maturity: Product adoption is widespread, or at least stabilized; growth typically comes only from price increases and growth in GDP (for example: breakfast cereal)
• Declining: Technological obsolescence, shifting consumption patterns, or increased market competition has resulted in total growth rates that are below-average or negative (for example: dairy products or wireline telephones)
• Opportunity Cost simply refers to the concept that if a person or company does X , the person or company necessarily cannot also do Y .  This is an important concept throughout business and consumer decision making, as there are only finite resources available in most cases (time, money, etc.).
• Thus, for example, it is unwise for a company to invest $1 million in a project earning $3 million if that same investment prevents it from investing the $1 million in another opportunity that would earn $10 million. In this case, the Opportunity Cost can be defined as the loss of incremental profit of $7 million ($10 million potential profit lost minus the $3 million earned).
• If X does not prevent also doing Y , then there is said to be “no Opportunity Cost” of doing X with respect to Y . In the above example, if the company had $2 million to invest and the capacity to manage both projects, it could reap the profits from both projects, i.e., $13 million.
• Elasticity is a concept from microeconomics that describes the tradeoff between Quantity and Price.
• Specifically, Elasticity is the ratio of a percentage change in quantity to the percentage change in price. Formulaically, Elasticity = % Change in Quantity Demanded or Supplied ÷ % Change in Price .
• For example, if an increase in the price of oranges from $1.00 apiece to $1.50 apiece causes demand for those oranges to fall from 100 units to 80 units, then the % Change in Quantity = –20% and the % Change in Price = 50%. Therefore the Elasticity of Demand = (–20 ÷ 50) = –0.4.
• Note that for normal goods, Elasticity of Demand will always be negative (higher prices mean less quantity is purchased) while Elasticity of Supply will always be positive (higher prices mean that suppliers are willing to produce and/or supply more goods).
• The concept comes up in multiple types of cases, such as pricing optimization. Clients often ask what the impact would be on volume if they adjust the price. Usually the correct answer is to increase prices in Inelastic markets (price increases lead to a relatively small decrease in products sold) and decrease them in Highly Elastic markets (price increases lead to a large decrease in product sold).

Financial Statements, Accounting and Valuation

Unlike Investment Banking interviews, which can be detailed and highly technical in terms of Finance and Accounting, Consulting interviews and the Consulting job itself revolve much more around estimation and exercising business judgment and “what-if” analysis. Rarely would a Consultant be called upon to develop and maintain a detailed, precise financial model for Discounted Cash Flow valuation, for example.

That being said, a basic-to-moderate understanding of the Income Statement, Balance Sheet and Statement of Cash Flows, and how they work together, is very relevant to many interviews. (You might even be provided with a basic Income Statement or Balance Sheet of a company as part of a Case Study interview question.)

Rather than reinventing the wheel and writing content on Finance and Accounting in this guide, we recommend you review any standard, basic Financial Accounting textbook to familiarize yourself with the components of basic Financial Statements:

• Income Statement (Revenue, Expenses, and Profit)
• Balance Sheet (Assets, Liabilities, and Equity)
• Statement of Cash Flows (Cash Flows broken out into the following categories of sources: Operating Activities, Investing Activities and Financing Activities)

We also recommend that you familiarize yourself with some basic core Finance concepts (Net Income, EBIT (Operating Profit), EBITDA, Free Cash Flow, Internal Rate of Return, Net Present Value, and Enterprise Value are good places to start) and core Valuation techniques (Cost of Capital, Comparable Company Analysis, Precedent Transaction Analysis, Discounted Cash Flow analysis, and Leverage Buyout analysis).  Although these concepts will not be tested and do not form a major part of general Consulting Case Study interviews, these topics can appear in a general discussion about a particular business situation and you should be able to discuss them at least on a basic level.

If you are applying for a job in Business Development, or for a Consulting position in a Corporate Finance group or at a firm that does a lot of Corporate Finance Consulting work, then you should definitely study up and be prepared for these core Finance and Accounting concepts, because they will likely be tested on in detail in your interviews. In addition to introductory Finance and Accounting textbooks, we highly recommend that these candidates read the Street of Walls Investment Banking Technical Training guide, which addresses complex details around Financial Statements, Accounting and Valuation at a very detailed level. (We also recommend this training guide in general to anyone who is interested in advancing their Finance and Accounting skills—particularly when it comes to Corporate Valuation.)

Hacking the Case Interview

Market entry case interviews are one of the most common types of cases you’ll see in consulting interviews. They are also known as go to market case interviews. There is a very good chance you will see at least one market entry case in your upcoming interviews, especially in first-round interviews.

The good news is that market entry cases are fairly straight forward and predictable. Once you’ve done a few market entry cases, you’ll be able to solve any market entry case that comes your way.

In this article, we’ll cover:

• Three types of market entry case interviews
• The five steps to solve a market entry case interview
• The perfect market entry framework
• A market entry case example
• Recommended market entry case interview resources

If you’re looking for a step-by-step shortcut to learn case interviews quickly, enroll in our case interview course . These insider strategies from a former Bain interviewer helped 30,000+ land consulting offers while saving hundreds of hours of prep time.

Three Types of Market Entry Case Interviews

A market can be broadly defined as the group of consumers that are interested in a particular product or service. There are three different types of market entry cases / go to market cases:  

• Entering a new geography
• Targeting a new customer segment
• Entering a new product or service category

In the first type of market entry case, the company is not launching a new product . Instead, the company is trying to sell an existing product to customers in new countries.

Example:  Uber  is a peer-to-peer ride-hailing company based in the United States. They are considering expanding their operations into Thailand. Should they enter? 

In the second type of market entry case, the company is also not launching a new product. Instead, the company is trying to sell a version of an existing product to a new customer segment. Customers can be segmented by a variety of different factors such as age, gender, needs, or preferences.

Example: Salesforce is a software company that provides customer relationship management tools. They primarily sell to large enterprises. Salesforce is considering expanding their customer base by also targeting small- and medium-sized businesses. Should they do this?

In the third and final type of market entry case, the company is looking to launch an entirely new product or service category.

Example: Coca-Cola is a large beverage corporation that produces soft drinks, sports drinks, fruit juices, teas, and other beverages. They are considering entering the vodka market. Should they enter?

The Five Steps to Solve a Market Entry Case Interview

Step One: Understand why the company wants to enter the market

The first step to solve any market entry case / go to market case is to understand why the company is looking to enter the new market. The four most common reasons are:

• The company wants to increase profit
• The company wants to increase revenues
• The company wants to invest in a fast-growing market
• The company wants to gain access to new customers

Only when you understand why the company is looking to enter the market will you have the context needed to properly assess whether or not they should enter.

Step Two: Quantify the specific target or goal

Now that you understand why the company wants to enter the market, identify what the specific target or goal is.

For example, if the company wants to increase revenues, how much of a revenue increase are they targeting? By what time frame are they looking to achieve this revenue increase by?

If the company wants to invest in a fast-growing market, what return on investment are they targeting? In how many years are they hoping to achieve this level of return by?

By quantifying the target or goal, you can more easily make the case for entering or not entering the market. If the company can achieve their goal, you would recommend entering the market. Conversely, If the company cannot reach their target, you would recommend not entering the market.

Step Three: Develop a market entry framework and work through the case

With the overall target or goal of the market entry in mind, you will now move onto gathering data and information to build support for your recommendation.

The most efficient way to do this is by using a market entry framework to structure all of the important questions you will need to answer.

We’ll go over the perfect market entry framework in the next section of the article, but there are four major areas of your framework:

Market attractiveness : Is this an attractive market to enter?

Competitive landscape : How strong are competitors and how easy is it to capture meaningful market share?

Company capabilities : Does the company have the capabilities to successfully enter the market?

Financial implications : Will the company achieve its financial goals or targets from entering the market?

Step Four: Consider the market entry strategy OR consider alternatives to entering the market

Your market entry framework will help you investigate different areas in the case to develop a hypothesis for whether the company should enter the market.

What you do next will be determined by whether you are leaning towards recommending entering the market or recommending not entering the market.

If you are leaning towards recommending entering the market…

Think through what the right market entry strategy would be. You should think through three different questions:

• When should the company enter the market?
• At what speed should the company enter the market?
• How should the company enter the market?

When should the company enter the market? Should they enter right away to get a first-mover advantage? Or should they wait to see how competitors enter the market and learn from their mistakes.

At what speed should the company enter the market? Should they target the entire market immediately? Or should they target a smaller subgroup to test their product first?

Finally, you should consider how the company should enter the market. There are three different ways to enter a market:

• Developing the capabilities internally
• Partnering or forming a joint venture
• Acquiring an existing company

Each of these strategies has their own advantages and disadvantages.

The main advantage of entering the market from scratch by developing capabilities internally is that the company has full control over the strategy and operations. The disadvantages are that this requires significant capital and investment costs, the company may not have all of the capabilities needed to be successful, and market entry will likely be slower than the other strategies.

The advantages of a partnership or joint venture are that there are much lower capital and investment costs and market entry will likely be faster than entering the market from scratch. The disadvantages of this strategy are that it requires working with the partner effectively and that this strategy does not give the company full control over the strategy and operations.

The advantages of acquiring an existing company are that it is a faster way of entering the market compared to the other strategies and that the company has a high level of control over the strategy and operations. The disadvantages are that acquisitions are expensive and it can be challenging to fully integrate an acquired company effectively.

If you are leaning towards recommending NOT entering the market…

Explore the other alternative options the company has. Is there another potentially attractive market that the company should enter instead? Are there other projects or investments that the company should pursue?

Remember that there is always an opportunity cost for each investment a company makes. If you are recommending that the company should not enter the market, what is the next best alternative?

Step Five: Deliver a recommendation and propose next steps

By this time in the case, you should have explored all of the major areas and questions needed to make a firm recommendation.

State your recommendation and then provide three reasons that support it. Conclude by proposing potential next steps.

Here are some potential areas to include for next steps:

• Areas of your framework you have not explored yet
• Open questions that have not been answered
• Information or data that would make you feel more confident in your recommendation

The Perfect Market Entry Framework

A market entry framework, or go to market framework, breaks down the complex question of whether or not the company should enter the market into smaller, more manageable questions.

You should always try to create a framework that is tailored to the specific case you are solving for. Do not rely on using memorized frameworks.

However, for market entry cases, there are four major things you should probably include in your framework.

1. Market attractiveness

For this area of your framework, the overall question you are trying to answer is whether the market that the company is looking to enter is attractive.

There are a number of different factors you can look at to assess the market attractiveness:

• What is the market size?
• What is the market growth rate?
• What are average profit margins in the market?
• How strong are substitutes?
• How strong is supplier power?
• How strong is buyer power?
• How high are barriers to entry?
• Are there other macroeconomic, geopolitical, or social factors to consider?

If you don’t have a strong business background, it may be helpful to review Porter’s Five Forces to better understand the five forces that determine the attractiveness of a market.

These five forces (supplier power, buyer power, substitutes, threat of new entrants, competitive rivalry) are already incorporated in this market entry framework.

2. Competitive landscape

For this area of your framework, the overall question you are trying to answer is how competitive the market is and how easy is it to capture meaningful market share.

The market can be attractive, but if it is extremely difficult to capture market share, then entering the market may not be a great idea.

There are a number of different factors you should consider in assessing the competitive landscape:  

• How many players are in the market?
• How much market share does each player have?
• Do players have competitive advantages?
• Do players have meaningful differentiation from one another?

3. Company capabilities

For this area of your framework, the overall question you are trying to answer is whether the company has the capabilities to successfully enter the market.

The market can be attractive and competition can be weak, but if the company does not have the right capabilities, they will not be able to successfully compete in the market.

There are a number of different factors you should consider in assessing the company’s capabilities:

• Does the company have significant capability gaps?
• Can the company leverage synergies with existing capabilities?
• Is the company in a favorable financial position to enter the market?
• Does the company have the right distribution channels?
• Does the company have the right relationships with suppliers?

4. Financial implications

The last area of your framework covers the financial implications of entering the market. The overall question you are trying to answer is whether the company will meet its financial targets or goals by entering the market.

Depending on what the specific goal of the market entry is, you may need to look into the following questions:

• What are the expected costs of entering the market?
• What are the expected revenues of entering the market?
• What are the expected profits from entering the market?
• How long will it take to break even?
• What is the expected return on investment?

Market Entry Case Example

Let’s put our strategy and framework for market entry cases into practice by going through an example of a market entry case.

Market entry case example:  Facebook  is an online social media and social networking service with $70B in annual revenue, $20B in annual profit, and roughly 2.5 billion users. They are looking to continue growing at a fast pace and are considering entering the global smartphone market. Should they enter?

Let’s go through the five steps we outlined above on how to solve a market entry case or go to market case.

In this case, we are told that Facebook is looking to enter the global smartphone market in order to continue growing. However, it is unclear what they are trying to grow. Is it revenues, profits, number of users, or something else?

We need to ask the interviewer a clarifying questions so that we can understand why Facebook wants to enter the smartphone market.

Question: Is Facebook specifically looking to grow revenues, profits, or number of users?

Answer: Facebook wants to grow profits.

Now that we understand that Facebook is looking to enter the smartphone market to grow profits, we need to quantify what their specific target or goal is.

Again, we’ll ask a question to the interviewer to get this information.

Question: Is there a particular financial goal or metric that Facebook is trying to reach within a specified time frame?

Answer: Facebook is looking to grow annual profits by $10 billion over the next year.

With this specific goal in mind, we need to structure a framework that will help us solve the case. We can use market attractiveness, competitive landscape, company capabilities, and financial implications as our four broad framework areas.

Then, we’ll need to identify and select the most important and relevant questions to explore in each of these areas. One potential framework could look like the following:

Let’s say that you gather the following data and information as you explore different areas of your framework:

• The global smartphone market size is $800 billion, which is large compared to Facebook’s annual revenues of $70 billion
• Facebook would need a 20% market share to break even
• The top six smartphone players have 80% market share, which implies high barriers to entry and fierce competition
• The top two smartphone players each have 20% market share
• There are limited synergies Facebook can leverage with its existing capabilities

At this point, we are leaning towards recommending that Facebook should not enter the market.

It is unlikely that Facebook will be able to grow annual profits by $10 billion over the next year. They already need 20% market share just to break even, which would tie them with the top two largest smartphone manufacturers.

Therefore, we should consider the alternative options Facebook has. Is there another market that may be worth entering? Are there other projects or investments that the company should pursue?

Thinking through potential markets, we think that Facebook is best suited to enter markets that can leverage its online platform. Potential markets may include the online travel booking market or the online gaming market.

Now it is time to summarize all of the work we have done so far into a clear and concise recommendation. One potential recommendation may look like the following:

I recommend that Facebook should not enter the global smartphone market for the following three reasons.

One, although the market size is massive at $800B, the smartphone market is highly concentrated. The top six players have 80% of the global market share. This implies that competition is fierce.

Two, Facebook would need to capture a 20% market share to break even. For comparison, the top two smartphone market leaders have 20% market share each. Therefore, this target does not seem feasible.

Three, barriers to entry are high and Facebook will likely not be able to overcome them. Facebook has minimal experience in producing hardware and they have no distribution channels with smartphone retailers.

All of these reasons strongly suggest that Facebook will not achieve its target profit growth of $10 billion over the next year. For next steps, we can look into other adjacent markets, such as the online travel booking and online gaming markets. These markets may be more attractive and feasible for Facebook to pursue growth in.

More market entry examples and practice

We've included two additional market entry practice case interviews below. Follow along with the video to get more market entry case interview practice.

For more practice, check out our article on 23 MBA consulting casebooks with 700+ free practice cases .

In addition to market entry case interviews, we also have additional step-by-step guides to: profitability case interviews , growth strategy case interviews , M&A case interviews , pricing case interviews , operations case interviews , marketing case interviews , and private equity case interviews .

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Mastering the Pricing Case Study: A Comprehensive Guide

• Last Updated November, 2022

Setting the optimal pricing for products or services is important for a company as it directly impacts profitability. So every management consulting firm helps its clients with pricing strategies. The primary goal of a pricing case is to recommend a price that maximizes profit, taking costs for product/service and market considerations into account.

A typical pricing case interview would start something like this –

A manufacturer of kitchen knives sells a range of products, from low-end to professional, to customers at different price points. They’ve developed a new line of knives in collaboration with a celebrity chef and would like help setting the prices for these products.

Pricing cases might not seem straightforward initially, but with the right frameworks and practice cases, we will help you prepare for it.

In this article, we’ll discuss:

• Examples of pricing cases.
• The alternative pricing methods.
• How to approach a pricing case interview.
• An end-to-end pricing case example.

Let’s get started!

Pricing Case Examples

How to approach a pricing case interview, what are the most common pricing strategies, an end-to-end pricing case example, the relevant pricing strategy for our pricing case examples, 6 tips for solving a pricing case interview.

As companies mature, pricing becomes more complex because:

• Companies develop multiple products with different cost structures.
• Clients have different product/service needs and price sensitivities.

Pricing can also be a source for driving revenue growth if you can identify opportunities to price based on value to the customer or in a way that optimizes the tradeoff between revenue and costs. Let’s explore a few situations where consultants can help with pricing:

New Art Museum

A new modern art museum is scheduled to open next year in a major European city. The project lead has requested your help with the pricing of the admission tickets. He has two questions: How would you approach selecting a pricing method for the museum? What price would you recommend and why?

Nail the case & fit interview with strategies from former MBB Interviewers that have helped 89.6% of our clients pass the case interview.

Animal Healthcare

Our client provides healthcare services for animals and develops veterinary drugs. The client has recently developed a product that enables cows to increase milk production by 20%. They have turned to you to figure out how to price this new product in order to maximize profits.

California Municipality

Your client is a local municipality in California. The town recently built a complex of six parking lots, encircling a nearby community center and outdoor mall, which features shopping, restaurants, and some light attractions. In total there are 20,000 parking spots in these lots. Our client wants to maximize the profit it generates from the parking lots with a focus on revenue generation. How would you think about different types of pricing structures and revenue models for the parking lots?

In most pricing case questions, you’ll have to work through one or a combination of the following pricing strategies:

Most companies use a combination of these alternative pricing strategies to maximize profitability. For example, a manufacturer of diet pills that costs $10 to produce may be able to charge $100 per bottle if the target customers have low-price sensitivity and high perceived value (a savings of many hours working out in the gym and/or eliminating the negative health effects of being overweight).

Note that for these examples, multiple correct solutions are possible. The important thing in pricing case interviews is to back up your answer well with analysis and logic.

Relevant pricing strategies + sample approach:

• Since the costs of running the museum are mostly fixed (e.g., staff, maintenance, and utilities), a cost-based pricing strategy will not provide much insight. 
• The new museum should therefore use a combination of demand-pull and market-based pricing.
• Since the museum is new, they should set their pricing below the average market price in order to draw in early customers to check out the museum and spread awareness to their friends.
• Do a check that the proposed price point will cover a good portion of the museum’s costs with expected attendance numbers.
• Note that for a museum, ticket sales are probably not expected to fully cover costs. Exhibit sponsors, grants, and donations will be additional sources of funding.

Our client provides healthcare services for animals and develops veterinary drugs . The client has recently developed a product that enables cows to increase milk production by 20%. They have turned to you to figure out how to price this new product in order to maximize profits.

• The cost of making a dose is $30.
• The competition charges $300 per dose.
• Clients are willing to pay $300 per dose because the 20% increase in their revenues will more than offset the product’s price.
• Therefore, the client should set its price based on a combination of market-based pricing and demand-pull.
• The recommendation of whether to price above or below the competitor’s $300 price depends upon how our product compares to theirs. If the client’s product is superior in any way, we may be able to command a higher price. If we are entering the market late and with a comparable product, we’ll need to set our price lower in order to provide an incentive for customers to try our product.
• At $300, this will provide a very attractive gross margin of close to 90%.

Your client is a local municipality in California. The town recently built a complex of six parking lots, encircling a nearby community center and outdoor mall, which features shopping, restaurants, and some light attractions. In total there are 20,000 parking spots in these lots. Our client wants to maximize the profit it generates from the parking lots with a focus on generating additional revenue. How would you think about different types of pricing structures and revenue models for the parking lots?

• Costs are mostly fixed (staff salaries and bond payments for garage construction), so a cost-based strategy doesn’t provide much insight. 
• Competitive garages are priced similarly, but less convenient for shoppers.
• Excess capacity provides the opportunity to identify additional revenue sources by driving higher utilization of the parking spaces and offering customers additional services while parked in the garage. 
• Brainstorming options to increase revenue identifies a variety of options (offer monthly passes, charge stores monthly fees to validate customer parking, provide valet parking and car washing, use excess capacity for concerts, fairs, or other large events that require parking spaces.)
• Do a check that the proposed price point, including value-added services, will cover salary and bond payments.

Like any other case interview, you want to spend the first few moments thinking through all the elements of the problem. Also, there is no one right way to approach a pricing case study but it should include the following:

• Cost-based: What is the cost of making the product or delivering the service?
• Market-based: What is the pricing of a comparable product or service? Can we price above what the competition is charging?
• Value-based: What is the customer’s willingness to pay? Will we lose customers if we charge higher prices? Are there incremental services we could provide that customers would value?  
• What is the volume impact of the alternative pricing model? What is the incremental revenue expected?
• What significant costs will be incurred if the pricing model changes?
• What revenues and costs will be realized if value-added services are launched?
• It can be hard to raise prices once customers are used to a low price. Price anchoring (establishing a higher price but discounting it) may be needed for some time to transition customer expectations.
• What is the expected response from the competition?
• What is the impact on the brand if we reduce prices?
• What is the impact on volume if we increase prices?

Let’s go through the pricing case for the California municipality with 6 parking lots. Remember that the instructions said to focus on incremental revenue. As you develop your structure for the case, remember the key components of our pricing issue tree approach:

• Pricing strategies including offering value-added services
• Financial Impact

Tailor Your Pricing Case Approach for this Client

The first thing you will need to do in a pricing case study, as well as any other consulting case, is to ensure you understand the problem you need to solve by repeating it back to your interviewer. If you need a refresher on the 4 Steps to Solving a Consulting Case Interview , check out our guide.

Second, you’ll structure your approach to the case. Stop reading for a moment and consider how you’d structure your analysis of this case. We gave you some hints in our sample cases section. After you’ve outlined your approach, read on and see what issues you addressed, and which you missed. Remember that you want your structure to be MECE and to have a couple of levels in your Issue Tree . 

• What is the municipality’s cost structure? 
• How much revenue is required to cover costs?
• How much of a profit expectation does the municipality have? Do they want to generate as much revenue as possible or cover their costs and provide a service to their community at an attractive price?
• What are the municipality’s current pricing structure and prices?
• How do the municipality’s current prices compare to alternative parking options?
• What alternative pricing structures could the municipality use (hourly rates, daily rates, monthly rates, store validation, etc.)
• What non-price considerations are there? (Proximity to popular destinations, roof vs. no roof, lighting/safety, cleanliness)
• What services could the parking lots provide in addition to the parking spot?
• How much space would providing additional services require?
• How much revenue would they generate?
• What are the expected revenues of alternative pricing models?
• What are the expected revenues of value-based services?
• Would additional costs be incurred?
• How might customers react to alternative pricing models?
• To value-based services?
• How might competitors react?

Pricing Case Brainstorming Exercise

After you structure your approach, the interviewer asks you to brainstorm some revenue growth opportunities for the California municipality. Again, stop reading for a moment to do this exercise yourself because you’ll learn more if you do. When you’re done, note the ideas you didn’t consider. Few candidates hit every possibility, but to move on to the next round of interviews, you’ll definitely want to go beyond the straightforward responses. 

• Charge store owners for parking spots to offer free parking for visitors.
• Charge higher pricing for spots closest to the stores.
• Offer annual/monthly parking passes.
• Valet parking
• Car washing
• Quick car servicing (e.g., oil change)
• Locate public transportation/bus stops adjacent to the lots and provide parking to commuters at a monthly rate.
• Rent space to event attendees (e.g., sporting events, concerts, fairs).

When you ask about the municipality’s current pricing and parking space utilization rates, your interviewer provides you with the following exhibit and asks you to calculate the daily revenue. Note that the parking lot has two sources of revenue:

• Tourists/shoppers buying parking tickets for an hourly rate.
• Store owners buying monthly parking permits for their staff.

Calculation of current daily revenue:

• 3 hour parking: Revenue = (20,000 parking spots) * (30% of total lot occupancy for tourists/shoppers) * (75% of tourists/shoppers occupancy for 3hr parking) * ($2/hr) * (*3hrs) = $27,000
• 5 hour parking: Revenue = (20,000 parking spots) * (30% of total lot occupancy for tourists/shoppers) * (25% of tourists/shoppers occupancy for 5hr parking) * ($10 flat fee) * = $15,000
• Total tourist/shopper revenue – $42,000
• Store owners: Revenue = (20,000 parking spots) (5% lot occupancy for owners) *($240/month) (1/30 to convert to daily revenue) = $8,000
• Total tourist/shopper + store owner daily revenues= $50,000

Alternative Pricing Model: Store Validation

If we move to a store validation model, in which a store validates the ticket of any customer who buys something, the spots taken would increase to 10,000, or 50% of available capacity. This is because the cost of parking is currently a deterrent to customers shopping at this mall. More shoppers at the mall would be a significant benefit to store owners.

The cost per validation would be $5 to the store. Assume every person parking a car purchases something. The number of store owner permits would drop to 750 since store owners will likely decide to save money on permits to pay for visitor parking spots.

What would be the impact on daily revenue?

• Increase in the tourist/shopper revenues = $8,000 = (10,000 spots) * ($5 per spot) – $42,000
• Store owner revenues would decrease by $2,000= (750 permits) * ($240 per permit/30 days per month) – $8,000 
• Change in total daily revenue = + $6,000
• A good candidate will recognize that the increase of 12% in daily revenues is a positive move forward.

Risks to the Change to a Validation Pricing Model

Do you see any risks to a validation pricing model? Do you think you’re likely to run into any resistance? From which types of stores and why?

• Stores with low price per transaction (such as ice cream shops) will likely lose money if they pay for the $5 validation fee, therefore 100% of stores will not be willing to participate.
• An alternative validation model would be to charge stores based on a percentage of transactions or profits. This would get less pushback.
• Under the percentage model, there would need to be a cap on the price charged to stores. A 5% charge on an ice cream may be reasonable but a 5% charge on a $1000 handbag would not be.
• You could note that while the focus of this case is on revenue generation, the costs to run a validation model might be slightly higher because the municipality will need to process the validation numbers and bill the stores.

Recommendation

Lastly, provide your recommendation for the client. Try coming up with your own before reading our sample.

The California Municipality should proceed with the transition to the validation pricing model because it provides an incremental $6000 per day or an increase in revenue of 12%. While doing this, it should study the risk of pushback from store owners with low transaction value and the possibility of charging based on a percentage of the transaction. Additionally, the municipality should roll out revenue growth opportunities such as renting out excess capacity and offering value-added services (e.g., valet parking) over time.

Determine the relevant pricing strategy to apply (e.g., cost-based vs. market-based or demand pull).

Brainstorm all possible changes in pricing methodologies that might bring in additional revenue (e.g., hourly, daily, or monthly pricing, a store-validation model for our parking lot case), don’t forget that charging for value-added services could be part of a broader pricing & revenue generation strategy (e.g., oil changes, car wash for our parking lot case)., calculate the incremental revenues from suggested changes in pricing., always have an answer to whether to proceed or not., detail the risks associated with the pricing changes..

– – – – –

In this article, we’ve covered:

• Examples of pricing cases
• Approaches for solving a pricing case
• Different pricing strategies 
• Tips for solving a pricing case

Still have questions?

If you have more questions about pricing case study interviews, leave them in the comments below. One of My Consulting Offer’s case coaches will answer them.

Other people prepping for pricing case studies found the following pages helpful:

• Our Ultimate Guide to Case Interview Prep .
• Types of Case Interviews .
• Consulting Case Interview Examples .
• M&A Case Study Interview.
• Market Sizing Case Questions .

Help with Case Study Interview Prep

Thanks for turning to My Consulting Offer for advice on pricing case study interviews. My Consulting Offer has helped almost 85% of the people we’ve worked with to get a job in management consulting. We want you to be successful in your consulting interviews too. For example, here is how David  was able to get his offer from  Deloitte.

2 thoughts on “Mastering the Pricing Case Interview: A Comprehensive Guide”

In the Alternative Pricing Model: Store Validation

The original tourist/shopper revenue is $42,000 Under the alternative pricing model, (10,000 spots) * ($5 per spot) = $50,000, an $8,000 increase

The original store owner revenue is $8,000 Under the alternative pricing model, (750 permits) * ($240 per permit/30 days per month) = $6,000, a $2000 decrease.

The new total daily revenue = $56,000 Original daily revenue = $50,000

Shouldn’t the change in total daily revenue be = $56,000 – $50,000 = $6,000, a 12% increase?

I’m confused about the change in total daily revenue $2,000 and 4% numbers.

Yes, good catch! We’ll make the change. Sorry for the confusion.

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3 Top Strategies to Master the Case Interview in Under a Week

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Choose Wisely: A Guide to Picking the Right Strategy Frameworks

Here's an overview of six leading strategy frameworks—Exponential Organizations, Odyssey 3.14, Connected Strategy, Porter's Five Forces, Lean Startup, and Blue Ocean Strategy—exploring their unique strengths, limitations, and optimal applications for making informed decisions.

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In the dynamic world of business, selecting an apt strategy framework is not just a choice but a necessity for survival and growth. There are several frameworks available, each with its unique strengths and ideal applications.

Devising the right business strategy is no small feat, especially with the variety of frameworks to select from. While tools like Porter's Five Forces and Blue Ocean Strategy have become popular standards, the reality is that different frameworks serve different purposes. There is no one-size-fits-all approach.

The key is matching the right strategic framework to your organization's current state and aspirations. But with so many options on the table, how do you even begin deciding? This article is designed to help.

We compare six leading strategy frameworks— Exponential Organization 2.0 , Odyssey 3.14 , Connected Strategy , Porter's Five Forces , Lean Startup , and Blue Ocean Strategy —exploring their unique strengths, limitations, and optimal applications so you can make an informed selection tailored to your organization's needs.

Detailed Overview of Each Framework

Exponential organization 2.0 (scale & ideas).

Exponential Organization 2.0 is crucial in today's VUCA world, fostering organizations to be agile, scalable, and future-ready. With its exhaustive arsenal, Exo2.0 isn’t just a framework but more of a DNA builder for an organization

It's holistic, fostering resilient growth through:

• Staff on Demand : Flexibility in workforce management.
• Community & Crowd : Leveraging external resources and communities.
• Algorithms : Utilizing data and automation for efficiency.
• Leveraged Assets : Using assets owned by others to reduce costs.
• Engagement : Keeping stakeholders actively involved.
• Interfaces : Efficiently managing customer and company interactions.
• Dashboards : Using real-time data for decision-making.
• Experimentation : Encouraging innovation and learning.
• Autonomy : Empowering teams for faster decision-making.
• Social Technologies : Integrating social media and technologies for better connectivity.
• Airbnb used many principles of ExO, such as leveraging assets (rental listings) owned by others and engaging with a large community of hosts and guests, leading to its rapid growth and scalability.
• For more case studies, check out the link - https://openexo.com/book/1404-case-studies-and-tools
• Applicability : Evaluating firms for readiness and scalability.

Odyssey 3.14 by HEC

Overview : Integrates strategic planning with creative innovation, focusing on sustainable growth. Combines creative innovation with strategic planning. It has three pillars and 14 directions of exploration.

The three pillars are:

Value Proposition : Target audience and value delivery. – Focuses on What & Who

Value Architecture : How value is created and delivered. – Focuses on How

Profit Equation : Financial aspects of the value proposition. – Focuses on How Much

14 Directions: ·      Reduce Price

·      Look for New Clients

·      Reduce Client Hassle

·      introduce more emotion or features

·      Search other industries

·      Modify revenue stream

·      Introduce Technology

·      Modify step(s) in value chain

·      Eliminate or reduce steps in the value chain

·      Leverage strategic resource

·      Associate with competitors

·      Identify Supplementors

·      Find new resources

  Case Study:

• A case study from Odyssey 3.14's application is Danone, which used the framework to restructure its approach to health-focused food products, leading to innovative product lines and expanded market reach.
• More examples: https://www.odyssey314.com/case-studies.html

Applicability : Best for organizations aiming for balanced growth and innovation.

Connected Strategy by Wharton

Overview Overview: In the current era where customer needs are dynamically changing and evolving, building ongoing customer relationships using technology and data key and connected strategy emphasizes this.

Details: Details: Connected strategy has two schools of thought, one from the consumer/user standpoint and the other within the organization.

• Connected Customer Experience : Enhancing engagement and understanding of customer needs.
• Connected Delivery Model : Efficient delivery of products/services.

Case Study:

Nike uses connected strategies through its apps and Nike+ community creates personalized customer experiences, driving brand loyalty and engagement.

Suitability : Ideal for customer-focused businesses leveraging digital transformation.

Porter's Five Forces

Overview: Developed by Michael Porter, this framework analyzes an industry's competitive environment and is the "OG" of the strategy frameworks.

Details: The five forces of the market are as below:

• Threat of New Entrants: How easily can new competitors enter the market?
• Threat of Substitutes: The availability of alternative products/services.
• Bargaining Power of Customers: The influence customers have on prices and terms.
• Bargaining Power of Suppliers: The impact suppliers have on prices and quality.
• Industry Rivalry: The intensity of competition among existing firms.

Coca-Cola used Porter’s Five Forces to assess the soft drink industry, helping them strategize against competitors and substitutes.

Applicability: Essential for any business assessing new markets, competition, or strategic positioning.

Lean Startup 

Overview: Pioneered by Eric Ries, it's a methodology for developing businesses and products.

Details: Lean startup methodology has been a great approach for startups to validate their hypotheses and move forward. This has become a staple framework for all startup founders.

• Build-Measure-Learn Loop: Rapid development cycles for continuous improvement.
• Minimum Viable Product (MVP): Developing a product with minimum features to satisfy early customers and provide feedback for future development.
• Pivot or Persevere: Deciding whether to pivot (change strategy) or persevere based on customer feedback and data.

Case Study: Dropbox used Lean Startup principles to build and test its MVP, adapting its product based on user feedback, leading to its massive success.

Applicability: Ideal for startups and any business in a fast-paced market that values flexibility and customer feedback.

Blue Ocean Strategy

Overview: Created by W. Chan Kim and Renée Mauborgne, this strategy emphasizes creating new market space, making the competition irrelevant.

Details: While everyone wanted to build something unique, the concept brought in by Chan and Renée provided people with a name that they could go for.

• Value Innovation: Focuses on creating value for both the company and its customers while simultaneously lowering costs.
• Eliminate-Reduce-Raise-Create Grid (ERRC): A tool to help businesses reframe their offerings and create new value.
• Finding Blue Oceans: Identifying and exploiting untapped markets and customer needs.

Cirque du Soleil successfully implemented Blue Ocean Strategy by combining the high thrill of a circus and the sophistication of a theatrical production, creating an entirely new entertainment market.

Applicability: Best suited for businesses looking to break away from intense competition and seeking to innovate in saturated markets.

Comparative Analysis Table

Now that we have understood these cutting-edge frameworks, let's do a comparison of them and see when to use what.

Example Story: A Startup's Strategic Journey

Let's illustrate this with a fictional startup's journey:

• Initial Phase - Market Analysis with Porter's Five Forces: The startup begins with an analysis of the competitive environment using Porter's Five Forces, identifying a niche market with potential for growth.
• Strategic Positioning - Blue Ocean Strategy: It moves to carve a unique market position, focusing on untapped customer needs and differentiating itself from competitors.
• Product Development - Lean Startup: Adopting the Lean Startup approach, the startup develops its product iteratively, using customer feedback for rapid pivots and ensuring market fit.
• Growth Phase - Exponential Organization 2.0: As the company grows, it embraces the principles of Exponential Organization for scalable growth, leveraging technology and external assets.
• Customer Engagement - Connected Strategy: To deepen market penetration and enhance customer loyalty, the company employs Connected Strategy, focusing on building strong, ongoing relationships with customers.
• Sustainable Expansion - Odyssey 3.14: In its expansion phase, the startup uses Odyssey 3.14 to explore new opportunities and diversify its offerings, balancing innovation with operational efficiency. 

Choosing the right business strategy framework can significantly influence an organization's trajectory. While each framework has its unique strengths and limitations, the key lies in understanding which one aligns best with your organization's current situation and future aspirations. Reflect on your organizational needs, market dynamics, and long-term goals to make an informed decision.

What are your experiences with these strategy frameworks? Do you have insights or success stories to share? Join the conversation in the comments, and if you're looking for tailored advice on adopting a strategic framework for your business, feel free to reach out for a consultation.

Exponential Technologies Course Launched!

Tech enthusiasts, get ready to embark on a journey into the future! We're excited to announce our latest course,  "Exponential Technologies: Transforming the Future."   What's Inside?  Dive into AI, Blockchain, VR, and more across 17 mind-blowing sessions!

From defining the tech landscape to future possibilities, this course is your guide to tomorrow's innovations. Illustrative videos, helpful quizzes, and a certificate of completion – your journey to tech mastery starts now! We will be covering definitions, brief histories, current trends, and use cases for each technology.  Why Enroll?  This course is designed to inspire and empower you with knowledge of key exponential technologies shaping our future. This course is designed to inspire and empower you.  Ready to Shape Tomorrow?  Hop in, and let's explore the future together!  Go to the  Learning Hub  and start your journey. Prerequisite:  Premium Subscription Required

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Getting Started With Business Process Transformation: Free Starter Kit, Use Cases, and Case Study

By Courtney Patterson | September 18, 2024

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Business process transformation is the strategic overhaul of workflows to boost competitiveness for long-term success. We’ve gathered expert advice and real-life examples of how companies can best plan and implement business process transformation.

Included in this article, you’ll find the following:

• Frameworks for approaching business process transformation
• Phases of business process transformation
• Steps to implement business process transformation
• Business process transformation starter kit

What Is the Business Process Transformation Process?

Business process transformation (BPT) is the complete redesign of how a company works to make it more efficient and effective. It involves overhauling key processes, reimagining goals, restructuring teams, and updating workflows and delivery methods. With BPT, companies can improve operations at every level and achieve business goals.

Business process transformation is one part of business process management (BPM), which, as the authors of this 2020 study in the European Journal of Information Systems explains, involves identifying inefficiencies or redundancies in processes and workflows and streamlining them for better organizational growth .

“The entire concept can be boiled down to a simple formula: new business demands + updated technology systems + talent + culture change = business process transformation ,” writes Forbes Councils Member Daragh Mahon in 2021. This is very similar to business process re-engineering , where companies also revamp processes, cultures, and systems for better workflows and satisfaction. Business process transformation more often involves incorporating digital tools and new technologies, but the two terms are sometimes used interchangeably.

Businesses might undertake business process transformation in order to grow their profit margins, lower their costs, or increase their competitive advantage. Whatever the case, the bigger objective is to cultivate additional value — through people, processes, and technology — and improve customer experience by better adapting to market demands.

Why Is Business Process Transformation Important?

Business process transformation is important because it helps companies improve their operational efficiency by reducing costs and streamlining workflows. It also helps businesses adapt to changing market conditions, which improves customer satisfaction and loyalty.

Business process transformation often involves integrating technology and data analytics into workflows. This helps companies make more informed decisions and reduces uncertainty. Improved processes can also mitigate risk and ensure compliance, as well as improve employee satisfaction.

Business process transformation can benefit a company in a number of ways:

• Cross-Functional Collaboration: Business process transformation promotes communication and collaboration across departments by encouraging a holistic view of workflows, rather than focusing on individual tasks. Large-scale transformation requires teams to agree on shared goals, use common platforms, integrate their systems, standardize their processes, and merge their data.
• Cost Reduction: Business process transformation can streamline workflows, reduce waste, and optimize resource utilization, all of which improve operational efficiency and reduce overall costs.
• Customer Experience Enhancement: Transformed processes should lead to better-quality services in the long run. By streamlining and optimizing workflows, these transformations often result in shorter overall wait times for customers. Additionally, enhanced data analytics that result from business process transformation help personalize customer experience.
• Increased Productivity: Automation of workflows allows employees to engage in more creative or strategic work, which makes better use of their skills.
• Informed Decision-Making: Digitized processes generate more data that can be leveraged for better insights. Businesses using artificial intelligence (AI) and machine learning to make better use of their data can reach more informed decisions and predict market trends more accurately.
• Market Adaptation: Business process transformation enables companies to respond and adapt to changing market conditions. For example, an efficient shift toward remote work processes and workflows during a global pandemic ensures that a company stays competitive.

When to Go Through Formal Business Process Transformation

It’s important to remember that in the general sense, a company is never done transforming, but undergoing targeted business process transformation is not always the right decision. Whether it’s the right time to undertake process transformation depends on a variety of internal and external factors, such as increased competition, process bloat, or new technology.

These are some common reasons for a business to undergo a transformation:

• Digital Transformation: A company may undertake digital transformation even if its technology is not outdated. In this case, business process transformation may be required as part of a broader digital transformation strategy.
• Changing Market Conditions: Evolving industry trends, global events such as wars or economic recessions, changes in government regulations or compliance requirements, and other market conditions may require a business to transform its processes.
• Bloat: Operational inefficiencies, or excessive waste in business processes, call for transformation to ensure that a company can stay relevant and competitive without incurring losses. If a business is losing time, labor, or raw material due to inefficient workflows, process transformation will help reduce waste.
• Competition: If competitors are outperforming a company, process transformation may be necessary to improve efficiency and regain a competitive edge.
• Growth: When companies expand into new regions or countries, move into new product markets, or acquire or merge with other companies, business process transformation is required to accommodate new requirements, customer preferences, or organizational cultures.
• Customer Experience: When a business feels it needs to reaffirm customer satisfaction and loyalty or improve its draw among potential customers, it may transform its processes to better meet customer needs and expectations.

Business Process Transformation Frameworks and Strategies

Using existing frameworks for business process transformation can save time and reduce risks. Examples include McKinsey & Company’s 7-S Model, the Prosci ADKAR Model, Lewin’s Change Management Model, and Kotter’s 8-Step Change Model. Each has its own approach to guiding organizations through change and addressing different aspects of the transformation process.

According to Varun Grover , Co-Editor of Business Process Transformation and Distinguished Professor at the Walton College of Business, University of Arkansas, there are, historically, two distinct ways of thinking about business process transformation: one focusing on cost, and the other on revenue.

The more popular model in the early years of transformation focused on cost — making processes more efficient, cutting costs, and eliminating workers. “In the later years of business process transformation, the focus was not so much on cost and slashing people, but on revenue,” Grover says. “How you differentiate your product to generate more premium and how you create more value for customers.”

These are two distinct strategies or frameworks. “Cost focuses on streamlining, so a company focused on costs will evaluate its different components and say, ‘Are we generating enough return?’ Your focus is on highly efficient facilities and cutting out marginal accounts,” Grover says. “A company focused on differentiation is focused on uniqueness. How do we create it in our people and our processes? These two strategies contradict each other. If you’re focusing on costs, you’re focused on streamlining; when you're focusing on differentiation, you want uniqueness, and uniqueness comes at a cost.”

The difference between these two frameworks depends on a number of different factors, including a company’s strategic timeline and its size. “Public companies in the United States are very sensitive to their shareholders. They have a fiduciary responsibility to their shareholders to show profit. And the cost-focused strategies tend to be more low-hanging fruit,” Grover says. “Reduce costs to show more profit.”

The revenue-focused strategies are longer-term. “That requires innovation,” Grover says, “building this uniqueness, creating a proposition that’s compelling for your customers and your markets.”

These well-established strategies for organizational change could also be adapted specifically for business process transformation:

• McKinsey & Company's 7-S Model: The McKinsey model emphasizes the interaction and combination of seven key factors for effective transformation: strategy , or the company’s plan for achieving its goals; structure , or the company’s hierarchy of talent; the staff working at the company and the skills they demonstrate; the systems and workflows in place at the company, as well as the shared values common throughout the company; and the style leaders use to motivate their teams. According to this model, the seven factors — divided into “hard” elements (strategy, structure, systems) that influence management, and “soft” elements (staff, skills, shared values, style) — have to be aligned in order to achieve successful transformation. This model was developed in the 1980s to aid organizations that were undergoing restructuring, and it emphasized not only the technological considerations for transformation but also social and cultural aspects.
• The Prosci ADKAR Model: This is a goal-oriented model for organizational transformation that emphasizes awareness, desire, knowledge, ability, and reinforcement. These five components help organizations stay focused on the human requirements for change. They also ensure that individuals in the organization understand the need for transformation, as well as have the desire to take part in it, the knowledge and ability to implement it, and sufficient motivation to continue it. The emphasis on individual knowledge and motivation ensures that organizational change cannot happen without employees understanding why it is happening and being on board with the specific changes. This in turn ensures that managers provide the necessary training and build the required trust to implement transformation.
• Lewin’s Change Management Model: This model involves three phases: unfreeze, change, and freeze. Unfreezing involves getting employees on board with the need for a change in processes, raising awareness and creating momentum in anticipation of change. Then the organization implements the changes, and people adapt to the new processes. Finally, refreezing involves stabilizing and reinforcing new processes, ensuring that policies and procedures are updated to reflect the changes and that the organizational culture supports them. Since transformation is ongoing, this model reflects a continuous process. For example, a company transitioning to a digital model for invoicing might first have to convince employees comfortable with a current manual system that change is necessary. Then, as the company rolls out a new digital invoicing software, it might have to provide training resources and other support systems. Finally, after adopting the new system, the company would focus on stabilizing, which might involve refining workflows, integrating the new system into daily workflows, rewarding employees who use the new system well, and conducting regular reviews.
• Kotter’s 8-Step Change Model: This model emphasizes the importance of building urgency in order to enact change and transform the organizational culture. It involves several key steps: clearly communicating the need for change, building a coalition of stakeholders to influence this change, forming a strategic vision, and clearly defining the ideal future state, then taking that vision to every level of the organization and securing broad-based support. It then involves removing barriers to enacting change with resources and training, generating short-term wins for the new system with quick-result projects, using this momentum to tackle bigger challenges, and finally embedding the new approaches into the organization’s work culture, ensuring that the company’s policies, procedures, and norms reflect the changes.

Learn more about optimizing your business processes with this beginner’s guide to business process modeling and notation .

Approaches to Business Process Transformation

Approaches to business process transformation typically revolve around three key areas: people, processes, and technology. Successful transformations require a holistic focus on these categories, as they encompass the essential elements for driving change, improving efficiency, and enhancing a company’s competitive edge.

According to Evan Weiner , who manages commercial operations at Tanium and previously led transformation efforts at Splunk, this is the mantra to business process transformation: “People, process, technology.” Holistic transformation efforts should consider all three of these broad categories, and most approaches to business process transformation share overlapping focuses and methodologies.

Technology-Driven:

• Automating complex decision-making tasks
• Analyzing large datasets to identify patterns and optimize processes
• Enhancing fraud detection and risk management
• Implementing virtual assistants for streamlined customer service
• Adopting new technologies, including AI tools, or Internet of Things (IoT) devices
• Implementing cloud-based solutions
• Integrating digital platforms across the organization
• Changing the mode of delivery, such as Netflix switching from the DVD rental model to a streaming model to keep up with consumer preferences and new technologies
• Developing new products, such as Nokia shifting from manufacturing cables to becoming a telecommunications company
• Entering new geographical markets, such as Starbucks adapting its product to regional tastes to become an international chain  

Process-Oriented:

• Lean Six Sigma: This methodology combines Lean principles (eliminating waste and improving flow) with Six Sigma (eliminating defects and reducing variability in processes) to improve process quality and efficiency. It typically requires the involvement of certified professionals who are trained in these methodologies. Lean Six Sigma involves identifying and eliminating activities and processes that do not add value and conducting statistical analysis to reduce process variation. It also involves continuous improvement through DMAIC (define, measure, analyze, improve, control) cycles. Learn more about the methodology in this complete guide to Lean Six Sigma .  
• Total Quality Management (TQM): TQM is a comprehensive, organization-wide effort focused on long-term quality improvement. While it overlaps with Lean Six Sigma, TQM aims to improve all aspects of the organization, not just specific processes. In other words, with TQM, everyone in the organization is involved in the quality improvement efforts. This participatory approach creates a culture of continuous improvement. TQM emphasizes a commitment to quality improvement across the entire organization and a reduced dependence on inspections through a customer-focused approach to quality. This requires open communication and collaboration, as well as ongoing training and education for all employees. Learn more about this quality management system in this comprehensive guide to total quality management .  
• Agile Transformation: This methodology applies Agile principles, which were originally created for software development, to business process transformation. It encourages flexibility, adaptability, and responsiveness to change. This involves breaking down larger transformation initiatives into smaller, manageable components in order to focus on continuous delivery and improvement. Learn more about the Agile methodology in this comprehensive guide to the Agile manifesto , and implement Agile project management with this complete Agile one-stop project management resource .  

People-Focused:

• Customer-Centric Transformation: This approach puts the customer at the center of process redesign efforts. It involves mapping and optimizing customer journeys, implementing Voice of Customer (VoC) programs, and generally focusing processes to enhance customer satisfaction.
• Cultural Transformation: Business process transformation can’t happen without changes to the organizational culture that show support for the new values, behaviors, and ways of working. For example, improving employee engagement to foster a more collaborative workplace is necessary for making strategic transformations that focus on participatory approaches to improvement. “I think the biggest thing when talking about transformation is the culture component,” Weiner says. “A company can implement the greatest technology in the world or put together the gold standard Harvard Business Review process, but if the organizational mindset isn’t there, and the behavior toward change and continuous improvement isn’t there, no one’s going to actually use it, and it’s not going to matter.”
• Capability-Driven Transformation: This approach focuses on building and enhancing employees’ core capabilities. This involves assessing the current capabilities, conducting gap analysis, and engaging in training to develop new skills and competencies. This enables the company to keep up with changing market demands and readies it for future growth.
• Organizational Restructuring: This strategy focuses on realigning the organizational structure with business goals. If the current hierarchy hinders innovation or communication and there is a need to break down silos to improve collaboration, organizational restructuring may be necessary. 

Phases of Business Process Transformation

The phases of business process transformation depend on the organization’s goals, the existing processes, and the scale of the changes required. Generally, they involve assessing the needs of stakeholders, generating ideas, designing new processes, creating a roadmap for execution, implementing changes, and continuously refining solutions.

Simone Grapini-Goodman , Chief Marketing, Communications, and Digital Officer at the American Diabetes Association, recommends what she calls “design thinking frameworks” to think about business process transformation. Design thinking frameworks traditionally view transformation in terms of five phases: empathize, ideate, prototype, test, and implement.

“I’ve learned over the years that a slightly altered approach makes more sense for processes,” she says. Grapini-Goodman’s “adapted approach” reframes the traditional model in four phases: discovery, definition and decision, development, and deployment. “This adjusted framework ensures a more effective and collaborative process for achieving business transformation.”

Here are the four phases Grapini-Goodman recommends:

• Discovery: Traditionally called the empathize phase , discovery involves deeply understanding the needs, challenges, and perspectives of users or stakeholders. “ Empathize is relabeled as discovery ,” Grapini-Goodman says. “This phase is crucial for understanding the current state and identifying opportunities for change.”
• Definition and Decision: This is the traditional ideation phase. According to Grapini-Goodman, the purpose of this phase is to “define what we are solving, outline what is out of scope, and plan our approach.” Grapini-Goodman argues that these first two phases are critical for engaging with stakeholders. “Stakeholders’ engagement and development are essential,” she says,— “make sure you bring people along on the journey, and communicate transparently and consistently.”
• Development: This phase combines the traditional prototype and test phases to make a clear transformation roadmap. “This involves creating a detailed plan in collaboration with stakeholders and socializing it on a smaller scale to gather key input,” Grapini-Goodman says.
• Deployment: In this phase, according to Grapini-Goodman, the transformation is executed at scale. This phase also includes monitoring. “Refinement is key when implementing and measuring transformation,” she says. “Remember that transformation is an organic process that needs to be nurtured and adjusted at times based on ongoing learning and the changing business landscape.”

Steps to Implement Business Process Transformation

The steps to implementing business process transformation are to assess the existing processes, plan resources for transformation, design new processes and workflows, implement new systems, and monitor the process. This also involves fostering a culture of adaptability among employees and ensuring that changes are always aligned with long-term business goals.

Evan Weiner’s end-to-end process for business process transformation consists of these five stages: assessment, planning, design, implementation, and monitoring.

These are the steps for implementing business process transformation:

1.  Assessment: This stage involves reviewing the current organizational design and completely rethinking the existing system to identify gaps in structures and processes. This can include business process modeling , or creating a visual and analytical representation of business processes. It also includes identifying redundant tasks or outdated systems and gathering input from stakeholders or project management teams on what’s missing. “Let’s say we have these 20 problems,” Weiner says. In the assessment phase, “let’s go in and assess what’s most important, and what’s the level of effort against it.” This stage is essential for clarifying the goal for the business process transformation.

2. Planning: This phase involves ensuring that you have enough resources to achieve your goal, and laying out your goals against a timeline, according to Weiner. “This is when I like to align on the problem statement, put together a vision and objectives, and understand the metrics that we’re going to be tracking and the reports that we need,” he says.

The planning phase can be broken down into several separate steps:

• Fill the Room: Business process transformation can’t happen without people. When undertaking transformation, make sure all stakeholders are informed of both the assessment and the plan so they know what the process will entail and what to expect. “My favorite question to ask when I’m starting a transformation effort — and people laugh because I’m asking it all the time — is, ‘Who else needs to be in the room?’” says Weiner. “The worst thing that can happen is you go through a transformation, you’re six months down the line, and you realize you never talked to Jim or Bob in finance about something that was impacting his team. The biggest thing that I’ve learned was bringing in as many people as early on in the process as possible, and making sure there’s cross-functional alignment on the problem statement and then the vision.” One way to engage all these interest groups is to hold early-stage workshops, guided by a single “narrative,” according to Weiner. “That includes key elements such as problem statements, business backgrounds, metrics and related KPIs, business impacts, and recommendations,” he says. “Start the workshop by having everyone read over this narrative to ensure alignment. This initial step is crucial as it sets the stage for more constructive and focused discussions on the recommendations. By having everyone on the same page, we can dive deeper into the issues at hand and work collaboratively toward solutions.”  
• Get Buy-In: Some people may be resistant to transformation, especially when it involves new technologies, because they are used to the status quo. Hear out their concerns, and make an effort to convince them of the urgency and the benefits of transformation, using data, research, and metrics. In the long run, as your business becomes more innovative and competitive, everyone will gain from process transformation.
• Develop Samples: Bring in leaders across different departments to create a comprehensive transformation and change management plan, keeping in mind the importance of connecting new business processes end to end. This early collaboration can facilitate the development and analysis of sample process models. Try to solicit feedback and support from employees and key stakeholders.
• Compare Samples: Compare your processes to those used by competitors or those considered best practices according to industry standards. Use this analysis to identify room for improvement in your model.
• Analyze existing processes, systems, and performance metrics.
• Consider your current organizational strategy.
• Identify pain points, inefficiencies, and areas for improvement.
• Write it all down.
• Articulate the overall purpose and desired outcomes of the transformation.
• Consider how this might align with the broader organizational strategy and objectives.
• Workshop with Multiple Stakeholders: Gather feedback from every interest group on how potential changes in the business process will affect them.  

Start planning your first steps with these free goal setting and tracking templates . Visualize processes better with this essential guide to business process mapping .

3. Design: This phase involves using new technologies to redesign core processes. Make sure you document all existing processes and requirements, including training requirements for employees. According to Weiner, the design phase is the time to discuss the future state process. “What is that going to look like? What technology is needed?” he says. “How does the future state design impact organizational design? Do we need any new roles or responsibilities? Do we need to make any changes to the overall organizational structure?” “I’m mostly involved in systems work or sales transformation,” he says. “So for me, this process involves asking, for example, ‘How do we actually design the system to be able to convert our customers from premium to cloud licenses?’ A lot of it will be systems-heavy, but we’ll do read-outs and have conversations with all of our stakeholders to make sure we’re on the right track. I like to have check-ins with everyone to say, ‘Are we doing alright? Is this the vision that you have as well?’ Because we don’t want to end up nine months down the road and realize we designed this wrong.” Designing new processes involves different components:

• Create a Workflow: Diagram your ideal scenario, including all the components of an optimal workflow. This new workflow diagram should include all tasks completed by individuals, teams, and systems.
• Make a Transition Plan: A business process transformation transition plan can detail how your business will conduct everyday operations and implement new processes simultaneously. This transition plan should include a detailed timeline of the different phases of your transformation and be shared across the organization so that all stakeholders have realistic expectations.
• Define Performance Metrics: Business process transformation requires a set of well-thought-out measurements, established at the beginning of the process, to track progress and alignment with strategic goals.
• Conduct User Acceptance Testing: For technical products especially, it’s useful to conduct internal testing before implementing a pilot or a full rollout. Business users can test the entire system and process to ensure that everything is working prior to full-scale implementation. “It’s useful having a select number of people do all that testing before we actually do the release,” Weiner says.  

Document and design your processes more effectively with these free process document templates .

4. Implementation: During this phase, change management is critical. For business process transformation to be executed successfully, it’s important to have employees experienced with change management on board who can help mitigate disruptive effects and support other employees throughout the transition. “Make sure that we have adoption, that we have the culture change, that we’re providing support and training,” Weiner recommends.

Implementation is usually best done in phases, rather than all at once. In Weiner’s case, he conducts a pilot test at the scale of about 200 users before a full rollout reaches about 7,000 users.

5. Monitoring: “We’re not done,” is the first thing Weiner reminds his teams after the implementation phase. In the immediate aftermath of implementing changes, integration can be challenging. This period requires monitoring and continuous improvement. “Now we’re running the reports that we had built earlier, making sure that we’re hitting the metrics that we had set out to achieve,” Weiner says.

The monitoring phase can be broken down into three parts:

• Tracking: At this point, teams need to start measuring KPIs and tracking progress with reporting tools and dashboards. To learn more about tracking progress, read this comprehensive guide to KPI dashboards , or check out this collection of free KPI dashboard templates .  
• Collecting Feedback: Sending notes to users to gather their individualized feedback allows you to check whether the user experience is as intended, and whether users have any suggestions for improvement. Ensure that these exchanges are detailed and well documented so that the information gleaned from them can be useful in the next step.  
• Continuous Improvement: At this point, the process is no longer internal, and the business team hands it over to the transformation team. “It’s like the right arm and the left arm,” Weiner says. “The transformation arm will do all the reporting [which includes gathering information from tracking and collecting feedback], and once it’s time to actually implement the improvement, we pass it over to the business team and they handle implementations from there.”

Business Process Transformation Starter Kit

Download the Business Process Transformation Starter Kit

Use this free starter kit during your business process transformation process. This kit includes templates for a basic elevator pitch and an elevator pitch deck.

In this kit, you’ll find:

• A  change management brainstorming template for Microsoft Word  and  Adobe PDF  to help you brainstorm the requirements and challenges of different aspects of your process transformation
• A  performance checklist for Microsoft Word  and  Adobe PDF  to help you measure the impact of your transformation
• A  business process transformation performance scorecard for Excel  and  Adobe PDF  to help monitor your transformation cycle
• A  flowchart template for PowerPoint  to help visualize the current and future business process
• A  workshop facilitation template for Microsoft Word  and  Adobe PDF  to help your team work through the initial phases of transformation

Ways to Measure Your Business Process Transformation

Key metrics to assess your business process transformation are effectiveness, alignment, speed, cost, time, revenue, efficiency, customer and employee satisfaction, error frequency, and brand perception. Compare each to the pre-transformation process to monitor the success of your business process transformation.

Continuous monitoring is essential for any business process transformation cycle. Ensure that you are regularly collecting data and feedback from consumers and employees, as well as identifying changes.

You can use several tools and metrics to measure your transformation process. Using as much stakeholder and customer feedback as possible, create a scale to measure the following elements:

• Effectiveness: How effectively is the process delivering value to customers based on their specific requirements?
• Alignment: How closely is the process aligned with customer demand profiles and time requirements?
• Speed: Track the total duration of the process, from input to delivery. How quickly is the end product reaching the customer, compared to before implementation?
• Cost: Calculate the total cost to produce and deliver outputs, including inputs, processing, and resource costs. How does it compare to the process prior to implementation?
• Time: Quantify time saved with the transformed process. How does it compare to the time prior to implementation?
• Revenue: How does revenue tied to the transformed process compare to prior to implementation?
• Efficiency: How does resource consumption of the process compare to prior to implementation?
• Customer Satisfaction: How would customers rate their experience compared to prior to implementation?
• Employee Satisfaction: How does employee engagement and experience rate compared to prior to implementation?
• Errors: Track the frequency of errors and the amount of rework needed after implementing new processes. How does it compare to prior to implementation?
• Brand Perception: Rate the change in brand value with the transformed process.

Examples of Business Process Transformation

Companies such as General Motors, Toyota, and others have undergone business process transformation to improve their efficiency, adapt to changing market conditions, expand their offerings, and more. For example, Walmart increased sales by overhauling its e-commerce strategy and buying Jet.com.

Here are some examples of companies that have implemented significant business process transformation:

• General Motors: Around 2012, GM decided to overhaul its approach to IT by hiring almost 10,000 IT professionals to replace their contractors. This provided the support needed for employees to focus on innovation and development rather than solely business-as-usual maintenance work, resulting in an exponential improvement in data and productivity. Before their transformation, the ratio of internal to external employees was about 10 to 90; after transformation, it was about 90 to 10.
• Walmart: After acquiring the e-commerce company Jet.com in 2016, Walmart spent nearly $12 billion investing in technology in what Moody’s lead retail analyst called a “ race for second ,” competing only with Amazon. Within two years, its online sales had increased by 40 percent . 
• Toyota: Integrating digital technologies such as AI and the Internet of Things (IoT) allowed Toyota to focus on data-driven insights and research , including using computer vision and machine learning for autonomous vehicles and predictive capabilities for taxi service demand.
• Goldman Sachs: In 2016, Goldman Sachs created Marcus, a digital banking platform that used data analytics to gain new insights into trends, risks, and customer behavior, and began to offer tailored banking services such as personal loans and savings accounts. Over the next three years, the platform generated more than $5 billion in loans and $55 billion in deposits across the United States and the United Kingdom.

Business Process Transformation Case Study

Business process transformation is happening all the time in a myriad of different ways. In the case of Splunk, a software company where Evan Weiner led the transformation effort for three years, one major transformation was transitioning customers from on-premises licenses to cloud-based licenses. This is a common move across the industry.

“We implemented a transformation called ‘cancel and replace,’ which was to cancel all of our customers’ existing licenses that were on premises — on actual hardware — and replace them with cloud-based licenses,” Weiner says. To tackle this, he used his three-pronged approach: people, process, technology.

First, the team at Splunk had to think about the current and future processes. “What is the process that we do as a sales team right now to sell on-premises licenses? What is the future state process going to look like, to be able to actually go in and change those existing licenses and replace them with cloud licenses?” Weiner asks.

This also involves thinking about the different roles and responsibilities that will be affected by the transformation. “Fulfillment teams, invoicing and finance teams, and sales teams — what is changing for those people to now be able to sell in the cloud?” Weiner says.

Then they had to make sure that they had the right technology and infrastructure to implement this transformation. “We have to ask: Do we have the right systems in place? Do we have the right tools in Salesforce, for example, to be able to support being able to convert those licenses into cloud?” Weiner says.

Finally, they had to consider how the organizational culture would be impacted and how it would need to change or be supported. “It’s an organizational mindset,” Weiner says. “How do we actually enable the behavioral change required to get people to now do a cloud-based sale? Everyone’s job description has essentially changed.”

To learn more about implementing practical transformation solutions, check out this real-world guide to business process management .

Challenges in Business Process Transformation

Not all businesses are ready for business process transformation all the time. Not having a clear vision or plan for integrating new technologies can lead to failed change efforts. Lack of employee buy-in is another common challenge companies may face.

In 2015, McKinsey observed that 70 percent of change efforts failed, “largely due to employee resistance and lack of management support.”

Here are some common challenges that a business might face when undergoing or considering business process transformation:

• Ambiguity: “Lack of a clear vision — or inadequate communication of that vision — is perhaps the first opportunity to get it wrong,” says Grapini-Goodman. It’s possible to invest in a transformation that digitizes a process without necessarily making it more efficient or effective, if the overall objective is not clear enough.
• Inertia: People may be justifiably skeptical or scared of large-scale organizational change. To address this, full transparency about the transformation initiative is essential. “It’s important to understand the different motivations of various stakeholders, anticipate what their response might be, and build a plan to address it,” Grapini-Goodman says.
• Integration Challenges: Aligning new technologies, processes, and organizational structures, whether with new management methods or new data systems or software, can be expensive and require significant resources. Choosing the right business process management platform and conducting thorough testing is essential. If existing systems are not well-integrated into new systems, data can end up inaccurate and cause disruption or delay to the overall process.
• Measurement: “Measuring the impact of transformation can be challenging at times since it is not the only thing that may be changing,” Grapini-Goodman says. “Nothing is constant. There might be competitors or regulatory or consumer actions that also influence the course of the business. While measurement might not be perfect, it should not be ignored. Progress over perfection will be key in understanding impact.”

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The Leading Source of Insights On Business Model Strategy & Tech Business Models

A business strategy is a deliberate plan that helps a business to achieve a long-term vision and mission by drafting a business model to execute that business strategy. A business strategy, in most cases, doesn’t follow a linear path, and execution will help shape it along the way.

Business Strategy Examples In 2024: Examples, Case Studies, And Tools

Table of Contents

What is a business strategy?

At this stage, it is important to clarify a few critical aspects.

As an HBR working paper entitled “From Strategy to Business Models and to Tactics” pointed out:

Put succinctly, business model refers to the logic of the firm, the way it operates and how it creates value for its stakeholders. Strategy refers to the choice of business model through which the firm will compete in the marketplace. Tactics refers to the residual choices open to a firm by virtue of the business model that it employs.

Personally, I have a controversial relationship with the concept of “strategy.” I feel it’s too easy to make it foggy and empty of practical meaning.

Yet strategy and vision matter in business.

A strategy isn’t just a calculated path, but often a philosophical choice about how the world works.

Usually, it takes years and, at times, also decades for a strategy to become viable. And once it does become viable, it seems obvious only in hindsight.

In this guide, we see what that means.  

In the real world, the difficult part is understanding the problem

Bounded rationality is a concept attributed to Herbert Simon, an economist and political scientist interested in decision-making and how we make decisions in the real world. In fact, he believed that rather than optimizing (which was the mainstream view in the past decades) humans follow what he called satisficing.

In the real world, a lot of time and resources are spent on defining the problem.

Classic case studies at business school assume in most scenarios that the problem is known and the solution needs to be found.

In the real world, the problem is unknown, the situation is highly ambiguous, and the most difficult part is making the decision that might solve that same problem you’re trying to figure out. 

How do you execute a strategy in that context? Business modeling can help!

Is a business strategy the same thing as a business model?

A business strategy is a deliberate vision to get toward a desired long-term goal. A business model is a great tool to execute a business strategy. 

Yet while achieving a long-term goal a business strategy set a vision, mission and value proposition that can be executed through several possible business models. When one of the drafted business models encounters the favor of the market that is when a business strategy becomes successful!

As the business world started to change dramatically, again, by the early 2000s, also the concept of strategy changed with it. 

In the previous era, the strategy was primarily made of locking in the supply chain to guarantee a strong distribution toward the marketplace. 

And yet, the web enabled new companies to form with a bottom-up approach.

In short, product development cycles shortened, and frameworks like lean , agile , and continuous innovation became integrated into a world where software took over. 

Where most of the processes before the digital age, were physical in nature. As the web took off, most of the processes became digital.

In short, the software would become the core enhancer of hardware. 

We’ve seen how in cases like Apple’s iPhone , it wasn’t just the hardware that made the difference.

But it was the development ecosystem and the applications that enhanced the capabilities of the device. 

Thus, from a product standpoint, hardware has been enhanced more and more with the software side.

At the same time, the way companies developed products in the first place changed. 

Software and digits-based companies could gather feedback early on, thus enabling the customers’ feedback as a key element of the whole product development cycle. 

Therefore, wherein the previous era, companies spent billions of budgets to release markets, and products, with little customer feedback.

In the digital era, customer feedback became built into the product development loop. 

That led to frameworks with faster and faster product releases, which also changed the way we do marketing . 

As pointed out by Eric Ries, a minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort through a cycle of build, measure, learn; that is the foundation of the lean startup methodology.

In a classic MVP approach, the loop (build, measure, learn) has to be very quick, and it has to lead to the so-called product/market fit .

As the web made the ability to gather customers’ feedback early on, and as the whole process becomes less and less expensive, also lean approaches evolved, to gain feedback from customers as early as possible. 

From build > demo > sell, to demo > sell > build , lean approaches got leaner. 

And the era of customer-centrism and customer obsession developed:

Customer obsession goes beyond quantitative and qualitative data about customers, and it moves around customers’ feedback to gather valuable insights. Those insights start by the entrepreneur’s wandering process, driven by hunch, gut, intuition, curiosity, and a builder mindset. The product discovery moves around a building, reworking, experimenting, and iterating loop.

This whole change flipped the strategy world upside down.

And from elaborate business plans , we moved to business modeling , as an experimental tool, that enabled entrepreneurs to gather feedback continuously.

In a customer-centered business world, business models have become effective thinking tools, to represent a business and a business strategy on a single page, which helped the whole execution process. 

The key building blocks of a classic business model approach, like a business model canvas or lean startup canvas  move around the concept of value proposition , that glue them together. 

And from the supply chain , we moved to customer value chains .

Where most digital business models  learned to gather customers’ feedback in multiple ways. 

The business strategy formed in the digital era, therefore, developed its own customer-centered view of the world, and the business theory world followed.

Academics, following practitioners, moved away from traditional models (like Porter’s Five Forces ) to more customer-centered approaches ( business model canvas , lean canvas).  

The mindset shift flipped from distribution and optimization on the supply side.

To optimize on the demand side, or how to build products that people want, in the first place. This is the new mantra.

No more grandiose business plans, just substantial testing, iteration, and experimentation. 

In this new context, we can understand the strategy developed by several players and how business modeling has become the most important strategy tool. 

And the interesting part is, whether you want to scale to become a tech giant, or you just want to build a small, viable business, it all starts from the same place!

The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.

Is business strategy a science?

Business strategy is more of an art than a science.

In short, a business strategy starts with a series of assumptions about how the business world looks in a certain period of time and for a certain target of people.

Whether those assumptions will turn out to be successful will highly depend on several factors.

For instance, back in the late 1990s when the web took over, new startups came up with the idea of revolutionizing many services.

While those ideas seemed to make sense, they turned out to be completely off, and many of those startups failed in what would be recognized as a dot-com bubble.

While in hindsight certain aspects of that bubble came up (like frauds, or schemes).

In general, some of the ideas for which startups got financed seemed to be visionary and turned out to work a decade later (see DoorDash , or Instacart , in relation to Webvan’s bankruptcy). 

For instance, some startups tried to bring on-demand streaming to the web (which today we call Netflix ). Those ideas proved to be too early.

They made sense but from the commercial standpoint, they didn’t.

Thus, if we were to use the scientific method, once those assumptions would have proved wrong in the real world, we would have discarded them.

However, those assumptions proved to be wrong, in that time period, given the current circumstances.

While we can use the scientific inquiry process in business strategy, it’s hard to say that it is a scientific discipline.

So what’s the use of business strategy?

In my opinion, business strategy is useful for three main reasons:

• Focus : chose one path over another.
• Vision : have a long-term strategic goal.
• Commercial viability : create a self-sustainable business.

As a practitioner, someone who tries to build successful businesses, I don’t need to be “scientific.”

I need to make sure not to be completely off track. For that matter, I aim at creating businesses.

Thus, I need to understand where to focus my attention in a relatively long period of time (3-5 years at least) and make sure that those ideas I pursue are able to generate profits, which – in my opinion – might be a valid indicator that those ideas are correct for the time being.

If those conditions are met, I’ll call it a “successful business.”

Those ideas will become a business model , that executes a business strategy.

This doesn’t mean those ideas, turned into a business model , pushed into the world will always be successful (profitable).

As the marketplace evolves I will need to adjust, and tweak a business model to fit with the new evolving scenarios, and I’ll need to be able to “bet” on new possible business models .

Survivorship bias

Survivorship bias is a phenomenon where what’s not visible (because extinct) isn’t taken into account when analyzing the past.

In short, we analyze the past based on what’s visible.

This error happens in any field, and in business, we might get fooled by that as well.

In short, when we analyze the past we do that in hindsight.

That makes us cherry-pick the things that survived and assume that those carry the successful characteristics we’re looking for.

For instance, for each Amazon or Google that survived there were hundreds if not thousands of companies that failed, with the same kind of “successful features” as Amazon or Google.  

So why do we analyze successful companies in the first place? In my opinion, there are several reasons: 

• Those successful companies have turned into Super Gatekeepers to billions of people : as I showed in the gatekeeping hypothesis , and in the surfer’s model , a go-to-market strategy for startups will need to be able to leverage existing digital pipelines to reach key customers.

In a world driven by tech giants that locked-in the digital distribution pipelines to reach billions of people across the globe, the gatekeeper hypothesis states that small businesses will need to pass through those nodes to reach key customers. Thus, those gatekeepers become the enablers (or perhaps deterrent) for small businesses across the globe.

• Modeling and experimentation : another key point is about modeling what’s working for other businesses and borrowing parts of those models, to see what works for our business. By borrowing parts you can build your own business model, yet that requires a lot of testing. 

Where scientists use labs to test their hypotheses through experimentation. Entrepreneurs build business model experiments to test their businesses ideas in the real world.

• Skin in the game testing : therefore business models become key tools for experimentation, where we can use real customers’ feedback (not a survey, or opinions but actions) and test our hypotheses and assumptions. When we’re able to sell our products, when people keep getting back to our platform, or service, there is no best way to test our assumptions that measure those actions. 

Lindy effect and aging in reverse

The Lindy Effect is a theory about the ageing of non-perishable things, like technology or ideas. Popularized by author Nicholas Nassim Taleb, the Lindy Effect states that non-perishable things like technology age – linearly – in reverse. Therefore, the older an idea or a technology, the same will be its life expectancy.

Nicholas Nassim Taleb , in his book Antifragile , popularized a concept called Lindy Effect .

In very simple terms the Lindy Effect states that in technology (like any other field where the object of discussion is  non-perishable)  things age in reverse.

Thus, life expectancy, rather than diminishing with age, has a longer life expectancy.

Therefore, a technology that has lived for two thousand years, has a life expectancy of another thousand years.

That is a probabilistic rule of thumb that works on averages.

Thus, if a technology (say the Internet) has stayed with us for twenty years, it doesn’t mean we can expect only to live for another twenty years at least.

But as the Internet has proved successful already, the Lindy Effect might not apply.

In short, as we have additional information about a phenomenon the Lindy Effect might lose relevance.

For instance, if I know a person is twenty, yet sick of a terminal disease, I can’t expect to use normal life expectancy tables.

So I’ll have to apply that information to understand the future.

Strategies take years to fully roll out

It was 2006, when Tesla, with his co-founder   Martin Eberhard , launched a sports car that broke down the trade-off between high performance and fuel efficiency.

Tesla, which for a few years had been building up an electric sports car ready to be marketed, finally pulled it off.

As Elon Musk would   explain   Back in 2012:  

In 2006 our plan was to build an electric sports car followed by an affordable electric sedan, and reduce our dependence on oil…delivering Model S is a key part of that plan and represents Tesla’s transition to a mass-production automaker and the most compelling car company of the 21st century.

The beauty of a strategy that turns into a successful company, is that it might take years to roll out and seem obvious only in hindsight. 

This connects to what I like to call the transitional business model.

Or the idea, that many companies, before getting into a fully rolled out business strategy, transition through a period of low scalability and low market size, which will help them gain initial traction. 

A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.

As a transitional business model proves viable, it helps the company shape its long-term vision, while its built-in strategy is different from the long-term strategy.

The transitional business model will guarantee survival. It will help further refine the long-term strategy and it will also work as a reality check. 

As the transitional business model proves viable, the company moves to its long-term strategy execution. 

As the business strategy gets rolled out, over the years, it becomes evident and obvious, and yet none managed to pull it off.

When Netflix moved from DVD rental to streaming. DVD rental was the transitional business model that helped Netflix stay in business in the first place.

And yet, when Netflix moved from DVD to streaming it had to apparently change its strategy.

When, in reality, it was rolling out its long-term strategy, shaped by the transitional business model. 

Caveat: Frameworks work until suddenly they don’t

When you stumbled upon a “business formula,” you can’t stop there.

That business formula, if you’re lucky, will allow you to succeed in the long term. Yet as more and more people will find that out, that will lose relevance.

And the matter is, the reality is a villain. Things work for years until they suddenly don’t work anymore.

We’ll see some frameworks, but the real deal is not a framework but the inquiry process that makes us discover those frameworks.

In short, the value is in the repeatable process of discovery and not in the discovery itself. A discovery, once spread, loses value.

Master a business strategy process

There isn’t a size-fits-all business playbook that you can apply to all the scenarios.

Some of the business case studies we’ll see throughout this article will show companies that have dominated the tech space in the last decade and more.

While the playbook executed by those companies worked for the time being.

That doesn’t mean you should play according to their playbook. If at all you’ll need to figure out your own.

Thus, what matters is the process behind finding your business playbook and my hope is that this guide will inspire you and give you some good ideas on how to develop your own business strategy process!

Business strategy case studies

We’ll look now at a few case studies of companies that, at the time of this writing, are playing an important role in the business world.

• Alibaba Business Strategy.
• Amazon Business Strategy.
• Apple Business Strategy.
• Airbnb Business Strategy.
• Baidu Business Strategy.
• Booking Business Strategy.
• DuckDuckGo Business Strategy.
• Google (Alphabet) Business Strategy.

What is a business model’s essence?

Keeping in mind the distinction between business strategy and business models is critical.

The other element used in this guide is a business model essence.

Shortly, I’ve been looking for a way to summarize the key elements of any business in a couple of lines of text:

A Business Model Essence according to FourWeekMBA is a way to find the critical characteristics of any business to have a clear understanding of that business in a few sentences. That can be used to analyze existing businesses. Or to draft your Business Model and keep a strategic and execution focus on the key elements to be implemented in the short-medium term.

Therefore, for the sake of this discussion, you’ll find each company’s business strategy, a business model essence that will help us navigate through the noisy business world.

From there, we’ll see the business strategy of a company.

Alibaba Business Strategy

Business Model Essence : Online Stores Leveraging On An E-Commerce/Marketplace Distribution And Monetization Strategy  

As pointed out in Alibaba’s annual report for 2017:

We derive revenue from our four business segments: core commerce, cloud computing, digital media and entertainment, and innovation initiatives and others. We derive most of our revenue from our core commerce segment, which accounted for 85% of our total revenue in fiscal year 2017, while cloud computing, digital media and entertainment, and innovation initiatives and others contributed 4%, 9% and 2%, respectively. We derive a substantial majority of our core commerce revenue from online marketing services. 

Alibaba, like Amazon , became an “everything store” in China.

It leveraged its success to build also other media platforms ( Youku Todou and UCWeb). The e-commerce, marketplace business model has become quite common since the dawn of the web.

From that business model tech giants like Amazon , eBay and Alibaba have raised.

Alibaba is an e-commerce platform that generated over $134 billion in revenues in 2022, and over $7.4 billion in net income. Alibaba has six main segments: core commerce (revenues generated in China), international commerce, local consumer services, cloud services, Cainiao (logistics), digital media, and other innovation initiatives.

Alibaba’s vision, mission, and core principles

Alibaba’s Business Strategy starts from its core values defined in its annual report:

• Customer First : “The interests of our community of consumers, merchants, and enterprises must be our first”
• Teamwork: “ We believe teamwork enables ordinary people to achieve extraordinary things.”
• Embrace Change   I”n this fast-changing world, we must be flexible, innovative, and ready to adapt to new business conditions in order to maintain sustainability and vitality in our business.”
• Integrity “We expect our people to uphold the highest standards of honesty and to deliver on their commitments.”
• Passion “We expect our people to approach everything with fire in their belly and never give up on doing what they believe is right.”
• Commitment  “Employees who demonstrate perseverance and excellence are richly rewarded. Nothing should be taken for granted as we encourage our people to “work happily and live seriously.”

Alibaba’s mission is “ to make it easy to do business anywhere, ” and its vision is “to build the future infrastructure of commerce… a company that would last at least 102 years.”

For that vision to be executed it has three major stakeholders: users, consumers, and merchants.

The focus on the “at least 102 years” might seem fluffy words, yet those are important as this kind of goal helps you keep a long-term vision while executing short-term plans.

It isn’t unusual for founders to set such visions, as they help keep the company on track in the long run.

And this is where a business strategy starts.

All the business models designed by Alibaba will follow its vision, mission, and values they aim to create in the long run.

Read : Alibaba Business Model

Alibaba ecosystem and value proposition

These elements gave rise to an ecosystem made of “consumers, merchants, brands, retailers, other businesses, third-party service providers and strategic alliance partners.”

As Alibaba points out in its annual report “our ecosystem has strong self-reinforcing network effects benefitting its various participants, who are in turn invested in our ecosystem’s growth and success.”

Network effects are a critical ingredient for marketplaces’ success.

To give you an idea, the more buyers join the platform, the more Alibaba’s recommendation engine will be able to suggest relevant items to buy for other customers, and at the same time the more merchants will join in, given the larger and larger business opportunities.

Keeping these network effects going is a vital element of long-term success but also among the greatest challenge of any marketplace that wants to be relevant.

Even though Alibaba’s essence is in online commerce, the company has several business model s running and a business strategy that at its core is evolving quickly.

Thus, the core commerce has made it possible for Alibaba to build a whole new set of “companies within a company.”

From digital entertainment and media, logistics services, payment, financial services, and cloud services with Alibaba Cloud.

Thus, from a successful existing online business model , Alibaba has expanded in many other areas.

And its future business strategy focuses on developing, nurturing, and growing its ecosystem.

More precisely, its strategic long-term goal is to “serve two billion consumers around the world and support ten million businesses to operate profitably on its platforms”

To achieve that Alibaba is focusing on three key activities:

• Globalization.
• Rural expansion.
• And big data and cloud computing.

For its core commerce activities, Alibaba has designed a value proposition that moves around a few pillars:

• Broad selection: over 1.5 billion listings as of March 31, 2018.
• Convenience:  seamless experience anytime, anywhere from online and offline.
• Engaging, personalized experience: personalized shopping recommendations and opportunities for social engagement.
• Value for money: competitive prices offered via a marketplace business model.
• Merchant quality: review and rating system to keep merchants’ quality high.
• Authentic products: merchant quality ratings, clear refund, and return policies, and the Alipay escrow system.

From that value proposition , Alibaba has been able to grow its customer base and offer wider and broader products, until it expanded in the service and cloud business.

Amazon Business Strategy

Amazon runs a platform business model as a core model with several business units within. Some units, like Prime and the Advertising business, are highly tied to the e-commerce platform. For instance, Prime helps Amazon reward repeat customers, thus enhancing its platform business. Other units, like AWS, helped improve Amazon’s tech infrastructure.

Business Model Essence : E-Commerce/Marketplace Distribution And Monetization Model Leveraging On Proprietary Infrastructure To Offer Third-Party Services

Starting in 1994 as a bookstore, Amazon soon expanded and became the everything store.

While the company’s core business model is based on its online store.

Amazon launched its physical stores, which generated already over five billion dollars in revenues in 2017.

Amazon Prime (a subscription service) also plays a crucial role in Amazon’s overall business model , as it makes customers spend more and be more loyal to the platform. 

Besides, the company also has its cloud infrastructure called AWS, which is a world leader and a business with high margins. Amazon also has an advertising business worth a few billion dollars.

Thus, the Amazon business model mix looks like many companies in one. Amazon measures its success via a customer experience obsession, lowering prices, stable tech infrastructure, and free cash flow generation.

Amazon has a diversified business model. In 2023, Amazon generated nearly $575 billion in revenues while it posted a net profit of over $30 billion. Online stores contributed over 40% of Amazon revenues. Third-party Seller Services and Physical Stores generated the remaining. Amazon AWS, Subscription Services, and Advertising revenues play a significant role within Amazon as fast-growing segments.

Therefore, even though in the minds of most people Amazon is the “everything store.”

In reality, its revenue generation shows us that it has become a way more complex organization, that also has a good chunk of advertising revenue and third-party services.

For instance, Amazon is also a key player with its AWS in the cloud space.

And is well a key player in the digital advertising space, together with Google and Facebook :

The digital advertising industry has become a multi-billion industry dominated by a few key tech players. The industry’s advertising dollars are also fragmented across several small players and publishers across the web. Most of it is consolidated within brands like Google, YouTube, Facebook, Instagram, Amazon, Bing, Twitter, TikTok, which is growing very quickly, and Pinterest.

Amazon has been widely investing in its technological infrastructure since the 2000s, which eventually turned into a key component of its business model .

Read : Amazon Business Model

Amazon’s vision, mission, and core values

Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” 

Jeff Bezos is obsessed with being in “day one,” which as he puts it , “ day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always  Day 1. “

It all starts from there, and to achieve that Jeff Bezos has highlighted a few core values that makeup Amazon ‘s culture and vision :

• Customer obsession.
• Resist proxies.
• Embrace external trends.
• High-velocity decision-making.

As pointed out by Amazon , “w hen Amazon.com launched in 1995, it was with the mission “ to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. ” 

This goal continues today, but Amazon ’s customers are worldwide now and have grown to include millions of Consumers, Sellers, Content Creators, and Developers & Enterprises.

Each of these groups has different needs, and we always work to meet those needs, innovating new solutions to make things easier, faster, better, and more cost-effective.”

In this case, Amazon ‘s mission also sounds like a vision statement.

Whatever you want to call it, this input is what makes a company look for long-term goals that keep them on track.

Of course, that doesn’t mean a well-crafted vision and mission statement is all that matters for business success.

Yet, it is what keeps you going when things seem to go awry.

Amazon moved from an online book store to the A-to-Z store it kept its mission almost intact while scaling up.

Start from a proof of concept, then scale up

It is interesting to notice how businesses evolve based on their commercial ability to scale up.

When Amazon started up as a bookstore, it made sense for several reasons, that spanned from logistics to pricing modes and industry specifics.

Yet, when Amazon finally proved that the whole web thing could be commercially viable, it didn’t wait, it grew rapidly.

From music to anything else it didn’t happen overnight, but it did happen quickly.

Thus, this is how Amazon’s mission shifted from “any book in the world” to “anything from A-Z.”

This isn’t a size-fits-all strategy. Amazon chose rapid growth, similar to a blitzscaling process as aggressive growth was a way to preserve itself.

Hadn’t Amazon grown so quickly, it could have been killed.

The opposite approach to this kind of strategy is a bootstrapped business, which is profitable right away and self-sustainable.

Decentralized and distributed value creation: the era of platforms and ecosystems

Before we move forward, I want to highlight a few key elements to have a deeper understanding of both Amazon and Alibaba’s business models and their strategies.

Before digitalization would show its use and commercial viability, most of the value creation processes were internalized.

That meant companies had to employ massive resources to generate value along that chain.

That changed when digitalization allowed the value creation process to be distributed, and we moved from centralized to grassroots content creation.

This is even clearer in the case of platforms, and marketplaces like Amazon and Alibaba.

For instance, where in the past the review process and quality insurance would be done centrally by making sure that the supply complied with the company’s quality guidelines.

Introducing distributed review systems, where the end-users checked against the quality compliance, allowed companies like Alibaba and Amazon to generate network effects, where the more users enriched the platforms with those reviews the more the platform could become valuable.

For that matter though, the main platform’s role will be to fight spam and attempt to trick the system.

Other than that (fighting spam is a challenging task) all the rest is managed at the decentralized level, and the value creation happens when more and more users review products and services on those platforms.

We’re referring here to the review system, but it applies almost to any aspect of a platform.

Amazon for years allowed third-party to feature their stores on Amazon ‘s platform, while they kept the inventory.

This meant an outsourced and distributed inventory system, spread across the supply side.

Therefore, the supply side not only made the platform more valuable by creating compelling offerings.

But it also made it more valuable from the operational standpoint, by allowing a better inventory system, which could be turned quickly.

Therefore, the critical aspect to understand in the digital era is decentralized value creation, which makes the value creation process less expensive for an organization, more valuable to its end users, and more scalable as it benefits from network effects.

How do decentralize value creation?

Many platform-like business models have leveraged a few aspects:

• User-generated content (Quora, Facebook , Instagram).
• Distributed inventory systems ( Amazon , Alibaba).
• Peer-to-peer networks ( Airbnb , Uber).

This implies a paradigm shift.

When you start thinking in terms of platforms, no longer you’ll need a plethora of people taking care of each aspect of it.

Rather you’ll need to understand how the value creation can be outsourced to a community of people and make sure the platform is on top of its game in a few aspects.

For instance, Amazon and Alibaba have to make sure their review system isn’t gamed. Airbnb has to make sure to be able to guarantee safety in the interactions from host to guests and vice-versa.

Quora has to make sure to keep its question machine to keep generating relevant questions for users to answer (the supply-side).

If you grasp this element of a platform, you’re on a good track to understanding how to build a successful platform or marketplace.

Apple Business Strategy

Business Model Label : Product-Based Company Leveraging On Locked-In Ecosystems With A Reversed Razor And Blade Business Strategy

Apple sells its products and resells third-party products in most of its major markets directly to consumers and small and mid-sized businesses through its retail and online stores and its direct sales force.

The Company also employs a variety of indirect distribution channels , such as third-party cellular network carriers, wholesalers, retailers, and value-added resellers.

During 2017, the Company’s net sales through its direct and indirect distribution channels accounted for 28% and 72%, respectively, of total net sales.

Many people look at the iPhone, or the previous products Apple has launched successfully in the last decade and assume that their success is due to those products.

In reality, Apple has followed throughout the years a strategy that focused on five key elements:

• Strong branding.
• Beautifully crafted products.
• Technological innovation.
• Strong distribution.
• Locked-in ecosystems.

In short, Apple can sell an iPhone at a premium price because it employs a reversed razor and blade strategy.

This strategy implies free access to Apple’s Ecosystem (ex. iTunes, and Apple Store).

That makes the whole experience through Apple’s devices extremely valuable.

Thanks to that experience, the perception of high-end (luxury-like) products, together with a reliable distribution, justifies Apple’s premium prices.

Apple has a business model that is divided into products and services. Apple generated over $383 billion in revenues in 2023, of which over $200 billion came from iPhone sales, $29.36 billion came from Mac sales, $39.84 billion came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $28.3 billion came from iPad sales, and $85.2 billion came from services.

Apple’s managed to build a business platform on top of the iPhone, thus creating a strong competitive moat, which lasts to these days:

iPhone and Services sales represented the main revenue drivers in 2022. Within the service revenues, the fastest growing sub-segment was the advertising business Apple built on top of the App Store, followed by the Mac, Accessories & Wearables, and the iPad.

Therefore, Apple’s future success can’t be measured with the same lenses as the last decade.

The real question is: what product will Apple  be able to launch successfully?

And keep in mind it’s not just about the product. Apple’s formula summarized above can be replicated over and over again.

But it isn’t a simple formula. And as locked-in ecosystems, in which Apple controls as much as possible, the experience of its users has proved quite successful in the last decade.

That might not be so in the next, given the rise of more decentralized infrastructure.

For that matter, Amazon might be well moving from a reversed razor and blade model:

To a service-based model:

This isn’t surprising, as a service business has a few compelling advantages:

• High margins.
• A relatively stable revenue stream.
• Scalability.

As Apple has relied on home runs with its products, from the new Mac to the iPod, iPhone, and iPhones, that kind of success isn’t easy to replicate, and it makes the company relies on a continuous stream of fresh sales to keep the business growing.

A service business would balance things out.

It is important to remark this isn’t something new to Apple :

When Apple introduced the iPhone, it isn’t like it was an overnight success. It was successful, but it had to create a whole ecosystem to make the iPhone a continuous source of growth for the company!

When it comes to business strategy, as pointed out in Apple’s annual reports:

The Company is committed to bringing the best user experience to its customers through its innovative hardware, software and services. The Company’s business strategy leverages its unique ability to design and develop its own operating systems, hardware, application software and services to provide its customers products and solutions with innovative design, superior ease-of-use and seamless integration.

Understanding this part is critical. As I explained above, at the time of this writing many think of Apple as the “iPhone company.”

Yet Apple is way more than that, and its business strategy is a mixture of creating ecosystems by leveraging on these pillars:

• Operating systems.
• Applications software.
• Innovative design.
• Ease-of-use.
• Seamless Integration.

Those elements together make Apple ‘s products successful. As Apple further explained:

As part of its strategy, the Company continues to expand its platform for the discovery and delivery of digital content and applications through its Digital Content and Services, which allows customers to discover and download or stream digital content, iOS, Mac, Apple Watch and Apple TV applications, and books through either a Mac or Windows personal computer or through iPhone, iPad and iPod touch® devices (“iOS devices”), Apple TV, Apple Watch and HomePod.

Once again, it isn’t anymore about creating a product, but about generating self-serve ecosystems.

How do you support those ecosystems?

It depends on what’s your target. A media company will primarily need an ecosystem made of content creators (take Quora or Facebook or YouTube ).

In many cases, a digital media company over time has to be able to nurture several communities to create a thriving ecosystem.

For instance, large tech companies or startups, often rely on several communities:

• Programmers and developers ( Google , Apple ).
• Content creators and publishers ( Google , Quora, YouTube ).
• Artists and creative talents ( Apple , YouTube ).

In Apple ‘s case though, the first ecosystem is the community of developers building third-party software products that complement the company’s offering:

The Company also supports a community for the development of third-party software and hardware products and digital content that complement the Company’s offerings.

When you combine that with a high-touch strategy (where skilled and knowledgeable salespeople interact with customers) you create a flywheel, where customers are retained for longer, the brand grows as a result of this high-touch activity which creates a better post-sale experience and triggers word of mouth and referral from existing customers:

The Company believes a high-quality buying experience with knowledgeable salespersons who can convey the value of the Company’s products and services greatly enhances its ability to attract and retain customers.Therefore, the Company’s strategy also includes building and expanding its own retail and online stores and its third-party distribution network to effectively reach more customers and provide them with a high-quality sales and post-sales support experience.The Company believes ongoing investment in research and development (“R&D”), marketing and advertising is critical to the development and sale of innovative products, services and technologies.

Read : Apple Business Model

Airbnb Business Strategy

Business Model Essence : Peer-To-Peer House-Sharing Network With Fee-Based Monetization Strategy

As a peer-to-peer network, Airbnb allows individuals to rent from private owners for a fee.

Airbnb charges guests a service fee between 5% and 15% of the reservation subtotal; While the commission from hosts is generally 3%.

Airbnb also charges hosts who offer experiences a 20% service fee on the total price.

The digitalization that happened in the last two decades has facilitated the creation of peer-to-peer platforms in which business models disrupted the hospitality model created in the previous century by hotel chains like Marriott, Holiday Inn, and Hilton.

Airbnb is a platform business model making money by charging guests a service fee between 5% and 15% of the reservation, while the commission from hosts is generally 3%. For instance, on a $100 booking per night set by a host, Airbnb might make as much as $15, split between host and guest fees. 

Airbnb is quickly branching out toward offering more experiences. We can call Airbnb the “marketplace of experiences.”

In short, just like Amazon started from books, Airbnb has started from house-sharing.

But that is the starting point, which gives the innovative company enough traction to validate its whole business model and expand to other areas.

The principal aim of Airbnb is to control the whole experience for its users. This means creating an end-to-end travel experience that embraces the entire process .

Thus, it’s not surprising that we’ll see Airbnb expanding its marketplace to more and more areas. This is also shown by the fact that Airbnb might soon offer bundled travel packages .

Just as we’ve seen in the case of Alibaba and Amazon , Airbnb follows a marketplace logic, where it needs to make the interactions between its key users (hosts and guests) as smooth as possible, with an emphasis on safety.

As a platform, Airbnb initially used a strategy of improving the quality of its supply by employing freelance photographers that could take pictures of host homes.

This, in turn, made those homes more interesting for guests, as they could appreciate those homes more.

As many people in real estate might know, the quality of the pictures is critical.

Although this might sound trivial, this is what improved the Airbnb supply side.

Indeed with better and professionally taken images, Airbnb improved its reach via search engines (yes, search engines are thirsty for fresh and original content, images comprised).

And it enhanced the experience of its potential customers.

Now Airbnb is converting its business model to digital experiences. In addition to changing the whole strategy.

Whereas Airbnb focused in the past on covering major cities across the world.

Changing travel habits made Airbnb focus on digital experiences and local, extra-metropolitan areas throughout the pandemic.

While, post-pandemic, as people travel for longer stays, the whole platform has been structured around these. 

In 2022, Airbnb enabled $63.2 Billion in Gross Booking Value, generating $8.4 Billion in service fee revenues. In 2022, there were $393.7 Million Nights and Experiences Booked, ad an average service fee of 13.3%, at an Average Value per Booking of $161.

Read : Airbnb Business Model

Baidu Business Strategy

Business Model Essence :  Online Marketing Free Services Advertising-Supported Revenue Model

Baidu makes money primarily via online marketing services (advertising). In fact, in 2017, Baidu made about $11.24 in online marketing services and a remaining almost $1.8 billion through other sources. According to Statista,

Baidu has an overall search market share of 73.8% of the Chinese market. Other sources of revenues comprise membership services of iQIYI (an innovative market-leading online entertainment service provider in China) and financial services.

As any digital business, Baidu needs a continuous stream of traffic to monetize its pages. In 2017 Baidu managed to lower its Traffic Acquisition Costs as a percentage of its revenues at 11.4%. Primarily driven from its Baidu Union Members, and its iQIYI services. The former allows Baidu to have inexpensive content served by third-parties members. The latter will enable Baidu to have high-quality premium content at a low cost.

At first sight, Baidu might seem the mirror image of Google , but in China.

However, this is a superficial view. While Baidu has followed in China a similar path to Google , it did take advantage of the fact that Google wasn’t available there, to build its dominant position.

Baidu also has a more efficient cost structure than Google. It had also introduced innovations in its search products (like voice search devices for kids) at a time when Google wasn’t there yet.

Read : Baidu Business Model

Baidu mission: two-pillar business strategy and value propositions acting as a glue for its key users/customers

In the past years, Baidu has followed an expansion business strategy focused on acquiring assets and companies that complemented its core business model .

As the leading Chinese search provider, in 2017, Baidu updated its mission to “ Baidu aims to make a complex world simpler through technology.”

This mission is achieved via a two-pillar strategy:

• Strengthening the mobile foundation (similar to Google’s mobile-first).
• And leading in artificial intelligence.

Baidu’s key partners comprise users, customers, Baidu union members, and content providers.

For each of those critical segments, Baidu has drafted a fundamental value proposition .

Thus, to generate a value chain that works for these stakeholders, Baidu has to balance it with a diversified value proposition :

• Users:  enjoying Baidu search experience want a search engine that gives them relevant results.
• Customers: with 775,000 active online marketing customers in 2017, consisting of SMEs, large domestic businesses, and multinational companies, distributed across retail and e-commerce, network service, medical and healthcare, franchise investment, financial services, education, online games, transportation, construction and decoration, and business services. Those businesses look for a trackable, and sustainable ROI for their paid advertising campaigns. By bidding on keywords, they can target specific audiences.
• Baidu Union Member: share revenues with Baidy by displaying banner ads on their sites in relevant spaces filled by the  Baidu search algorithm (think of it as Google’s AdSense Network ). Those publishers and sites can generate additional revenues and monetize their content without relying on complex infrastructure, that instead is employed by Baidu.
• Content Providers:  video copyright holders, app owners who list their apps on the Baidu app store, users who contribute their valuable and copyrighted content to Baidu products, and publishers. Those users get visibility or money in exchange for this content. Baidu has to make sure to allow those content providers to get in exchange for their work and creativity visibility and revenues.

Understanding how the value proposition for each player comes together is critical to understanding the business decisions a company like Baidu makes over time.

For instance, as Baidu (like Google ) moves more and more toward AI, the need to balance the value proposition for Baidu Union Members might fickle.

Booking Business Strategy

Business Model Essence :  House-Sharing Platform Leveraging On A Two-Sided Marketplace With A Commission-Based Revenue Model

Booking Holdings is the company that controls six main brands that comprise Booking.com, priceline.com, KAYAK, agoda.com, Rentalcars.com, and OpenTable. 

Over 76% of the company’s revenues in 2017 came primarily via travel reservations commissions and travel insurance fees.

Almost 17% came from merchant fees, and the remaining revenues came from advertising earned via KAYAK.

As a distribution strategy, the company spent over $4.5 billion on performance-based and brand advertising.

Booking Holdings is the company the controls six main brands that comprise Booking.com, priceline.com, KAYAK, agoda.com, Rentalcars.com, and OpenTable. Over 76% of the company revenues in 2017 came primarily via travel reservations commisions and travel insurance fees. Almost 17% came from merchant fees, and the remaining revenues came from advertising earned via KAYAK. As distribution strategy, the company spent over $4.5 billion in performance-based and brand advertising. 

Read : Booking Business Model

Booking mission, value proposition, and key players

Booking’s mission is to “help people experience the world.” Booking does that via a few primary brands:

• Booking.com.
• priceline.com.
• Rentalcars.com.

The mission of helping people experience the world is executed via three primary value propositions delivered to consumers, travelers, and business partners:

• Consumers are provided what Booking calls “the best choices and prices at any time, in any place, on any device.”
• People and travelers can easily find, book, and experience their travel desires.
• Business partners (like Hotels featured on Booking.com) are provided with platforms, tools, and insights in exchange.

Boomedium-term term strategy is focused on:

• Leveraging technology to provide the best experience.
• Growing partnerships with travel service providers and restaurants.
• Investing in profitable and sustainable growth.

DuckDuckGo Business Strategy

Business Model Essence : Privacy-based Search Engine Built On Google’s Weakness With An affiliate-based Revenue Model

DuckDuckGo makes money in two simple ways: Advertising and Affiliate Marketing.

Advertising is shown based on the keywords typed into the search box. Affiliate revenues come from Amazon and eBay affiliate programs.

When users buy after getting on those sites through DuckDuckGo the company collects a small commission.

DuckDuckGo makes money in two simple ways: Advertising and Affiliate Marketing. Advertising is shown based on the keywords typed into the search box. Affiliate revenues come from Amazon and eBay affiliate programs. When users buy after getting on those sites through DuckDuckGo the company collects a small commission.

While this model might not sound that exciting. DuckDuckGo managed to grow quickly by leveraging Google’s primary weakness: users’ privacy. Where Google’s primary asset is made of users’ data. DuckDuckGo throws that data away on the fly:

It is important to remark that DuckDuckGo is still figuring out a business model that can make it sustainable in the long term.

Indeed, the company got a venture round of $10 million back in August 2018.

DuckDuckGo will be tweaking its business model in the coming years, to reach a “ business model /market fit.”

Read : DuckDuckGo Business Model

Read : DuckDuckGo Story

Google (Alphabet) Business Strategy

Business Model Essence :  Free Search Engine Distributed Across Hardware, Browsers, And Members’ Websites With An Hidden Revenue Generation Model

As of 2017, over ninety billion dollars, which consisted of 86% of Google ’s revenues came from advertising networks.

The remaining fraction (about 13%) came from Apps, Google Cloud, and Hardware. While a bit more than 1% came from bets like Access, Calico, CapitalG, GV, Nest, Verily, Waymo, and X.

Google business model is changing over the years.

Even though advertising is still its cash cow, Google has been diversifying its revenues in other areas. 

While in 2015 90% of Google’s revenues came from advertising, in 2017, advertising revenues represented 86%.

Other revenues grew from about 10% in 2015 to almost 13% in 2017.

Google (now Alphabet) primarily makes money through advertising. The Google search engine, while free, is monetized with paid advertising. In 2023, Alphabet generated over $175B from Google search, $31.51B billion from the Network members (Adsense and AdMob), $31.31B billion from YouTube Ads, $33B from Google Cloud, and $34.69B billion from other sources (Google Play, Hardware devices, and other services). And $1.53B from its other bets. 

Why did Google get there? And where is Google going next? To understand that you need to understand the “moonshot thinking.”

Read : Google Business Model

Read : Google Cost Structure

Read : Baidu vs. Google

Understanding Google’s moonshot thinking and a breakthrough approach to business

As highlighted in the Alphabet annual report for 2018:

Many companies get comfortable doing what they have always done, making only incremental changes. This incrementalism leads to irrelevance over time, especially in technology, where change tends to be revolutionary, not evolutionary. People thought we were crazy when we acquired YouTube and Android and when we launched Chrome, but those efforts have matured into major platforms for digital video and mobile devices and a safer, popular browser. We continue to look toward the future and continue to invest for the long-term. As we said in the original founders’ letter, we will not shy away from high-risk, high-reward projects that we believe in because they are the key to our long-term success.

Understanding the moonshot approach to business is critical to understanding where Google (now Alphabet) got where it is today, and where it’s headed next.

Since the first shareholders’ letter from Google’s founders, Brin and Page they highlighted that “ Google is not a conventional company. We do not intend to become one.”

Google has successfully built ecosystems that today drive

To understand where Google is going next, you need to look at the AI Economy , in which the tech giant is trying to lead the pack.

Whether or not it will be successful will highly depend on its ability to keep creating successful ecosystems, just as Google has done with Google Maps (you might not realize but Google Maps powers up quite a large number of applications) and Android.

At the time of this writing, Google is widely investing in other areas, such as:

• Voice search.
• AI and machine learning applications.
• Self-driving cars.
• And other bets.

If that is not sufficient Google has made several moves in different spaces, to keep its dominance on mobile, while moving toward voice search, like the investment in KaiOS, which business model is interesting as it finally allows an ecosystem to be built on top of cheap mobile devices in developing countries:

As feature phones powered by KaiOS have access to mobile apps, connectivity and voice search. KaiOS feature phone business model wants to bring connectivity and the digital revolution to those developing countries (like India and Africa) that have missed out on the smartphone wave due to too high costs of those devices.

Besides, KaiOS might be well suited for the IoT revolution!

KaiOS is a mobile operating system built on the ashes of the discontinued Mozilla OS. Indeed, KaiOS has developed a robust standalone mobile operating system that turns feature phones (so-called “dumb phones”) into smartphones-like phones.

That is why Google keeps making “smaller bets in areas that might seem very speculative or even strange when compared to its current businesses.”

Those other bets made “just” $595 million to Google in 2018.

This represented 0.4% of Google ‘s overall revenues , compared to the over $136 billion coming from the other segments.

Google ‘s North Star is its mission of “ organizing the world’s information and making it universally accessible and useful.” 

Read : KaiOS Business Model

Let’s go through a few other tips for a successful business strategy. 

Problem-first approach

The customer-problem quadrant by LEANSTACK’s Ash Maurya is a great starting point to define and understand the problem, that as an entrepreneur you will going to solve. 

Indeed, a successful business is such, based on the market’s rewards for the entrepreneur’s ability to solve a problem.

Keep in mind that defining and understanding problems in the real world is one of the most difficult things (that is why entrepreneurship is so hard).

To properly stumble on the right definition of the problem you’re solving, there might be some fine-tuning going on, which in the business world we like to call product-market fit . 

Business engineering skills

Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.

Another key element is not to lose sight of the context you’re operating.

As such, analyzing that properly might require some business engineering skills . 

To simplify your life you can use the FourWeekMBA business analysis framework.

Don’t strategize on a piece of paper

Strategies always work well on a piece of paper.

Yet when execution comes suddenly we can realize all the drawbacks of that.

In very few, rare cases, a designed strategy will work as expected.

However, the reason we plan and strategize isn’t just to make things work as we’d like them to.

But to communicate a vision we have to those people (employees, customers, stakeholders) who will help us get there. 

That is why when we strategize it’s important not to lose sight of the essence of our strategy, which is the long-term vision we have for our business.

The rest is execution, practice, and a lot of experimentation!

The innovation loop

Entrepreneurship is a continuous quest for real-world problem-solving. The success of a business is measured by how well you helped people solve those problems. While entrepreneurs can rely on methodologies, systems, and processes, they also need to know when to revert to instinct and leverage on their experience.

Innovation starts by tweaking, testing, and experimenting also in unexpected ways.

Often though, as a business strategy is documented after the fact, it seems as if it was all part of a plan. 

In most cases, the innovation loop starts by stumbling upon that thing that will have a great impact on your business.

Therefore, as an entrepreneur, you need to keep pushing on those models that worked out.

But also to be on the lookout for new ways of doing things. 

Barbell approach 

A Barbell strategy consists of making sure that 90% of your capital is safe, and use the remaining 10%, or on risky investments. Applied to business strategy, this means having a binary approach. On the one hand, extremely conservative. On the other, extremely aggressive, thus creating a potent mix.

In a barbel approach we want to have a clear distinction between two domains: 

• Core business : on the core business side, where you have a consolidated strategy, and a business model that has proved to work, it’s important to be structured. This means having a clear culture, following given processes, and slowly evolving your business model. 
• New bets : as your business model will become outdated over time, and that might happen also very quickly, you need to be on the lookout for new opportunities emerging, also in new, completely unrelated business fields. 

For instance, a tech giant like Google, has a part of its business skewed toward a few bets it placed on industries that are completely unrelated to its core business (search).

Those bets are not contributing at all to its bottom line (only some of those bets are generating revenues but those are extremely marginal compared to the overall turnover of the company). 

However, those might turn out widely successful (or huge failures) in the years to come. 

Of Google’s (Alphabet) over $307.39 billion in revenue for 2023, Google also generated for the first time, well over 1.5 billion dollars in revenue from its bets, which Google considers potential moonshots (companies that might open up new industries). Google’s bets also generated a loss for the company of over $4 billion in the same year. In short, Google is using the money generated by search and betting it on other innovative industries, which are ramping up in 2023. 

Thus, with a barbell approach, we want to consolidate what we have. But also be open to what might be coming next!

Business Explorers

Strategic analysis thinking tools.

Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions, to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.

Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions , to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.

Business model canvas

The business model canvas aims to provide a keen understanding of your business model to provide strategic insights about your customers, product/service, and financial structure;

so that you can make better business decisions.

Blitzscaling canvas

In this article, I’ll focus on the Blitzscaling business model canvas. This is a model based on the concept of Blitzscaling.

That is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency. It focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.

Pretotyping

The pretotyping methodology comes from Alberto Savoia’s work summarized in the book “The Right It: Why So Many Ideas Fail and How to Make Sure Yours Succeed.” This framework is a mixture of the words “pretend” and “prototype” and it helps to answer such questions (about the product or service to build) as: Would I use it? How, how often, and when would I use it? Would other people buy it? How much would they be willing to pay for it? How, how often, and when would they use it?

Pretotyping is a mixture of the words “pretend” and “prototype,” and it is a methodology used to validate business ideas to improve the chances of building a product or service that people want.

The pretotyping methodology comes from Alberto Savoia’s work summarized in the book “The Right It: Why So Many Ideas Fail and How to Make Sure Yours Succeed.”

This framework is a mixture of the words “pretend” and “prototype,” and it helps to answer such questions (about the product or service to build) as: Would I use it? How, how often, and when would I use it?

Would other people buy it? How much would they be willing to pay for it? How, how often, and when would they use it?

Value innovation and blue ocean strategy

A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created.

At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken.

Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

Growth hacking process

Growth hacking is a process of rapid experimentation, coupled with the understanding of the whole funnel, where marketing, product, data analysis, and engineering work together to achieve rapid growth. The growth hacking process goes through four key stages of analyzing, ideating, prioritizing and testing. 

Growth hacking is a process of rapid experimentation, coupled with the understanding of the whole funnel, where marketing , product, data analysis, and engineering work together to achieve rapid growth.

The growth hacking process goes through four key stages analyzing, ideating, prioritizing, and testing.

Pirate metrics

Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.

Venture capitalist , Dave McClure, coined the acronym AARRR which is a simplified model that enables us to understand what metrics and channels to look at. At each stage of the users’ path toward becoming customers and referrers of a brand.

Engines of growth

In the Lean Startup, Eric Ries defined the engine of growth as “the mechanism that startups use to achieve sustainable growth.” He described sustainable growth as following a simple rule, “new customers come from the actions of past customers.” The three engines of growth are the sticky engine, the viral engine, and the paid engine. Each of those can be measured and tracked by a few key metrics.

In the Lean Startup, Eric Ries defined the engine of growth as “the mechanism that startups use to achieve sustainable growth.”

He described sustainable growth as following a simple rule, “new customers come from the actions of past customers.”

The three engines of growth are the sticky engine, the viral engine, and the paid engine. Each of those can be measured and tracked by a few key metrics, and it helps plan your strategic moves.

The RTVN model is a straightforward framework that can help you design a business model when you’re at the very early stage of figuring out what you need to make it succeed.

Sales cycle

A sales cycle is the process that your company takes to sell your services and products. In simple words, it’s a series of steps that your sales reps need to go through with prospects that lead up to a closed sale.

A sales cycle is the process that your company takes to sell your services and products.

In simple words, it’s a series of steps that your sales reps need to go through with prospects that lead up to a closed sale.

Planning ahead of time the steps your sales team needs to take to close a big contract can help you grow the revenues for your business.

Comparable analysis

A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company.

To find comparables, you can look at two key profiles: the business and economic profiles.

From the comparable company analysis, it is possible to understand the competitive landscape of the target organization.

Porter’s five forces

Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces

Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition.

It was published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s.

The model breaks down industries and markets by analyzing them through five forces which you can use to have a first assessment of the market you’re in.

Porter’s Generic Strategies

In his book, “Competitive Advantage,” in 1985, Porter conceptualized the concept of competitive advantage, by looking at two key aspects. Industry attractiveness, and the company’s strategic positioning. The latter, according to Porter, can be achieved either via cost leadership, differentiation, or focus.

Porter’s Value Chain

In his 1985 book Competitive Advantage, Porter explains that a value chain is a collection of processes that a company performs to create value for its consumers. As a result, he asserts that value chain analysis is directly linked to competitive advantage. Porter’s Value Chain Model is a strategic management tool developed by Harvard Business School professor Michael Porter. The tool analyses a company’s value chain – defined as the combination of processes that the company uses to make money.

Porter’s Diamond Model

Porter’s Diamond Model is a diamond-shaped framework that explains why specific industries in a nation become internationally competitive while those in other nations do not. The model was first published in Michael Porter’s 1990 book The Competitive Advantage of Nations. This framework looks at the firm strategy, structure/rivalry, factor conditions, demand conditions, related and supporting industries.

Bowman’s Strategy Clock

Bowman’s Strategy Clock is a marketing model concerned with strategic positioning. The model was developed by economists Cliff Bowman and David Faulkner, who argued that a company or brand had several ways of positioning a product based on price and perceived value. Bowman’s Strategy Clock seeks to illustrate graphically that product positioning is based on the dimensions of price and perceived value.

VMOST Analysis

The VMOST Analysis is a tool that allows a business to evaluate its core strategies in terms of whether the supporting activities of that strategy are being carried out. The VMOST analysis tries to answer that by looking at five core elements: vision, mission, objectives, strategies, and tactics.

Fishbone Diagram

The Fishbone Diagram is a diagram-based technique used in brainstorming to identify potential causes for a problem, thus it is a visual representation of cause and effect. The problem or effect serves as the head of the fish. Possible causes of the problem are listed on the individual “bones” of the fish. This encourages problem-solving teams to consider a wide range of alternatives.

GE McKinsey Matrix

The GE McKinsey Matrix was developed in the 1970s after General Electric asked its consultant McKinsey to develop a portfolio management model. This matrix is a strategy tool that provides guidance on how a corporation should prioritize its investments among its business units, leading to three possible scenarios: invest, protect, harvest, and divest.

VRIO Framework

The VRIO framework is a tool that businesses can use to identify and then protect the factors that give them a long-term competitive advantage. The VRIO framework will help assess reality based on four key elements that make up its name (VRIO): value, rarity, imitability, and organization. VRIO is a holistic framework to assess the business.

3C Analysis

The 3C Analysis Business Model was developed by Japanese business strategist Kenichi Ohmae. The 3C Model is a marketing tool that focuses on customers, competitors, and the company. At the intersection of these three variables lies an effective marketing strategy to gain a potential competitive advantage and build a lasting company.

AIDA stands for attention, interest, desire, and action. That is a model that is used in marketing to describe the potential journey a customer might go through before purchasing a product or service. The AIDA model helps organizations focus their efforts when optimizing their marketing activities based on the customers’ journeys.

AIDA stands for attention, interest, desire, and action. This is a model that is used in marketing to describe the potential journey a customer might go through, before purchasing a product or service. The variation of the AIDA model is the CAB model and the AIDCAS model.

PESTEL analysis

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization.

This is a critical step that helps organizations identify potential threats and weaknesses. That can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Technology adoption curve

In his book, Crossing the Chasm, Geoffrey A. Moore shows a model that dissects and represents the stages of adoption of high-tech products. The model goes through five stages based on the psychographic features of customers at each stage: innovators, early adopters, early majority, late majority, and laggard.

The technology adoption curve is a model that goes through five stages. Each of those stages (innovators, early adopters, early majority, late majority, and laggard) has a specific psychographic that makes that group of people ready to adopt a tech product.

This simple concept can help you define the right target for your business strategy.

Business model essence

A Business Model Essence, according to FourWeekMBA, is a way to find the critical characteristics of any business to have a clear understanding of that business in a few sentences.

That can be used to analyze existing businesses. Or to draft your Business Model and keep a strategic and execution focus on the key elements to be implemented in the short-medium term.

FourWeekMBA business model framework

An effective business model has to focus on two dimensions: the people dimension and the financial dimension. The people dimension will allow you to build a product or service that is 10X better than existing ones and a solid brand. The financial dimension will help you develop proper distribution channels by identifying the people that are willing to pay for your product or service and make it financially sustainable in the long run.

An effective business model has to focus on two dimensions: the people dimension and the financial dimension. The people dimension will allow you to build a product or service that is 10X better than existing ones and a solid brand.

The financial dimension will help you develop proper distribution channels by identifying the people that are willing to pay for your product or service and make it financially sustainable in the long run.

TAM, SAM, and SOM

A total addressable market or TAM is the available market for a product or service. That is a metric usually leveraged by startups to understand the business potential of an industry. Typically, a large addressable market is appealing to venture capitalists willing to back startups with extensive growth potential.

Understanding your TAM, SAM and SOM can help you navigate the market you’re in and to have a laser focus on the market you can reach with your product and service.

Brand Building

Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.

Value Proposition Design

A value proposition is about how you create value for customers. While many entrepreneurial theories draw from customers’ problems and pain points, value can also be created via demand generation, which is about enabling people to identify with your brand, thus generating demand for your products and services.

Product-Market Fit

Marc Andreessen defined Product/market fit as “being in a good market with a product that can satisfy that market.” According to Andreessen, that is a moment when a product or service has its place in the market, thus enabling traction for the company offering that product or service.

Freemium Decision Model

Organizational Design And Structures

An organizational structure allows companies to shape their business model according to several criteria (like products, segments, geography and so on) that would enable information to flow through the organizational layers for better decision-making, cultural development, and goals alignment across employees, managers, and executives. 

Speed-Reversibility Matrix

Minimum Viable Product

SWOT Analysis

A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

Revenue Modeling

Revenue modeling is a process of incorporating a sustainable financial model for revenue generation within a business model design. Revenue modeling can help to understand what options make more sense in creating a digital business from scratch; alternatively, it can help in analyzing existing digital businesses and reverse engineer them.

Business Experimentation

Business experiments help entrepreneurs test their hypotheses. Rather than define the problem by making too many hypotheses, a digital entrepreneur can formulate a few assumptions, design experiments, and check them against the actions of potential customers. Once measured, the impact, the entrepreneur, will be closer to define the problem.

Business Analysis

In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.

Ansoff Matrix

You can use the Ansoff Matrix as a strategic framework to understand what growth strategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growth strategy can be derived by whether the market is new or existing, and the product is new or existing.

Key takeaway

I hope that in this guide you learned the critical aspects related to business strategy, with an emphasis on the entrepreneurial world. If business strategy would only be an academic discipline disjoined from reality, that would still be an interesting domain, yet purely speculative.

However, as a business strategy can be used as a useful tool to leverage on to build companies, hopefully, this guide will help you out in navigating through the seemingly noisy and confusing business world, dominated by technology. As a last but critical caveat, there isn’t a single way toward building a successful business.

And oftentimes the way you choose to build a business is really up to you, how you want to impact a community of people and your vision for the future!

Other resources: 

• Types of Business Models You Need to Know
• What Is a Business Model Canvas? Business Model Canvas Explained
• Blitzscaling Business Model Innovation Canvas In A Nutshell
• What Is a Value Proposition? Value Proposition Canvas Explained
• What Is a Lean Startup Canvas? Lean Startup Canvas Explained
• How to Write a One-Page Business Plan
• How to Build a Great Business Plan According to Peter Thiel
• How To Create A Business Model
• What Is Business Model Innovation And Why It Matters
• What Is Blitzscaling And Why It Matters
• Business Model Vs. Business Plan: When And How To Use Them
• The Five Key Factors That Lead To Successful Tech Startups
• Business Model Tools for Small Businesses and Startups

Additional Business Strategy Tactics

Blue ocean player, blue sea player.

Constructive Disruptor

A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Niche player

A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.

Blitzscaler

The Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.

Continuous Blitzscaler

The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.

OYO business model is a mixture of platform and brand, where the company started primarily as an aggregator of homes across India, and it quickly moved to other verticals, from leisure to co-working and corporate travel. In a sort of octopus business strategy of expansion to cover the whole spectrum of short-term real estate.

What is business strategy?

What are examples of business strategies.

Things like product differentiation, business model innovation, technological innovation, more capital for growth, can all be moats that organizations focus on to gain an edge. Depending on the context, industry, and scenario, a business strategy might be more or less effective; that is why testing and experimentation are critical elements.

Connected Strategy Frameworks

ADKAR Model

The ADKAR model is a management tool designed to assist employees and businesses in transitioning through organizational change. To maximize the chances of employees embracing change, the ADKAR model was developed by author and engineer Jeff Hiatt in 2003. The model seeks to guide people through the change process and importantly, ensure that people do not revert to habitual ways of operating after some time has passed.

Business Model Canvas

The business model canvas is a framework proposed by Alexander Osterwalder and Yves Pigneur in Busines Model Generation enabling the design of business models through nine building blocks comprising: key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.

Lean Startup Canvas

The lean startup canvas is an adaptation by Ash Maurya of the business model canvas by Alexander Osterwalder, which adds a layer that focuses on problems, solutions, key metrics, unfair advantage based, and a unique value proposition. Thus, starting from mastering the problem rather than the solution.

Blitzscaling Canvas

Blue Ocean Strategy

Business Analysis Framework

Balanced Scorecard

First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.

Blue Ocean Strategy 

GAP Analysis

A gap analysis helps an organization assess its alignment with strategic objectives to determine whether the current execution is in line with the company’s mission and long-term vision. Gap analyses then help reach a target performance by assisting organizations to use their resources better. A good gap analysis is a powerful tool to improve execution.

GE McKinsey Model

McKinsey 7-S Model

The McKinsey 7-S Model was developed in the late 1970s by Robert Waterman and Thomas Peters, who were consultants at McKinsey & Company. Waterman and Peters created seven key internal elements that inform a business of how well positioned it is to achieve its goals, based on three hard elements and four soft elements.

McKinsey’s Seven Degrees

McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.

McKinsey Horizon Model

The McKinsey Horizon Model helps a business focus on innovation and growth. The model is a strategy framework divided into three broad categories, otherwise known as horizons. Thus, the framework is sometimes referred to as McKinsey’s Three Horizons of Growth.

Porter’s Five Forces

According to Michael Porter, a competitive advantage, in a given industry could be pursued in two key ways: low cost (cost leadership), or differentiation. A third generic strategy is focus. According to Porter a failure to do so would end up stuck in the middle scenario, where the company will not retain a long-term competitive advantage.

Porter’s Value Chain Model

PESTEL Analysis

Scenario Planning

Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts at better strategic decision making by avoiding two pitfalls: underprediction, and overprediction.

STEEPLE Analysis

The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

FourWeekMBA Business Toolbox

Business Engineering

Tech Business Model Template

A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

Web3 Business Model Template

A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.

Asymmetric Business Models

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Business Competition

In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.

Technological Modeling

Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Transitional Business Models

Minimum Viable Audience

Business Scaling

Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Market Expansion Theory

The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.

Speed-Reversibility

Asymmetric Betting

Growth Matrix

In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Revenue Streams Matrix

In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.

Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.

Pricing Strategies

A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.

Other business resources:

• What Is Business Model Innovation
• What Is a Business Model
• What Is Business Strategy
• What is Blitzscaling
• What Is Market Segmentation
• What Is a Marketing Strategy
• What is Growth Hacking

More Resources

About The Author

Gennaro Cuofano

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The ClearPoint Strategy Success Framework: Simplifying Execution

Marisela Montenegro

As Director of Customer Success, Marisela leads the team responsible for our customer relationships.

Ensure that nothing gets in the way of executing strategy.

Table of Contents

Strategy Execution . It’s no small feat. It’s a journey filled with challenges, from gathering the necessary data, to shifting the culture of an entire organization.  

...but it doesn’t have to be daunting!  

ClearPoint Strategy is here to streamline your strategic planning, business reporting, and management processes, so you can focus on the actions that matter most. Backed by over 50 years combined experience working with strategy, ClearPoint software offers built-in expertise from our proven Strategy Success Framework :

• Organize Strategy
• Align Organization
• Manage Projects
• Communicate Results
• Simplify Execution

Below is a breakdown of how ClearPoint supports the fifth and final strategy success factor.

Strategy Execution Blockers

The real test of a successful strategic plan lies in the execution phase, where organizations often encounter several hurdles:

• Data Collection and Report Building : Gathering accurate data and building insightful reports can be time-consuming and complex.
• Cultural Change and Organizational Alignment : Shifting the organizational culture to align with new strategic goals requires buy-in from all levels of the organization. This change can be met with resistance and requires careful management.
• Overcoming Resistance to Change : Employees might resist new strategies due to uncertainty or comfort with the status quo. Addressing these concerns is crucial for effective execution.

ClearPoint’s Strategy Execution Solution

These challenges have met their match in ClearPoint! Our robust platform is designed to simplify strategy execution. Here’s how:

• Integrated Systems : ClearPoint automates data collection from various sources, serving as a single source of truth for your organizational operations. Use AI analysis to gain insights and make informed decisions.
• Automation: Workflows, reporting tools, and communication features all streamline your strategic processes, establishing a regular reporting cadence that saves time and reduces human error.
• Comprehensive Support : Our team of strategy experts design tailored onboarding and adoption strategies and provide additional resources and training, ensuring you feel confident in managing cultural changes.

ClearPoint’s Approach to Change Management

Change Management is crucial for successful strategy execution. The award-winning ClearPoint Customer Success team excels in this area with a multifaceted approach. Our dedicated experts will guide you through the process, offering personalized guidance.  

Comprehensive training resources can be found in our Support Center . Our CS team also hosts regular training webinars (see: Events ).

• Step-by-Step Tutorials : Our online guides allow you to move at your own pace, providing detailed instructions and best practices for every stage of the process.
• Training Sessions : Regular training sessions and office hours ensure that you and your team are well-prepared and address any questions or concerns.
• Continuous Support : The ClearPoint team offers a wealth of knowledge and conducts regular check-ins to help you navigate any challenges that arise .

Adoption Strategies with ClearPoint

Adopting a new strategy (and strategy software) can be intimidating, but ClearPoint makes the process as smooth as can be.

Our personal Workspaces help accelerate adoption and secure buy-in across different levels of an organization. By allowing users to customize their own view according to their unique needs, employees are empowered to better manage tasks, track progress, and share information from a centralized location.

With a user-friendly interface, ClearPoint workspaces significantly lower the barrier to entry for individuals not used to strategic management tools - accessibility that is crucial during periods of change. The easy user experience helps maintain momentum and engagement among team members.

Moreover, Workspaces rewards collaborative efforts by allowing team members to see the impact of their contributions in real-time. This visibility not only reinforces the value of each team member’s work, but also promotes a culture of accountability and alignment with the organization’s overall objectives.

Onboarding with ClearPoint

ClearPoint’s implementation process is designed for a smooth and supportive transition, encouraging new users to harness the full power of our solution from day one.

As part of a thorough Success Planning phase, your Technical Account Manager (TAM) and Customer Success Manager (CSM) will conduct a Strategy Evaluation to understand your organization’s structure and reporting responsibility.

Read about our ClearPoint Strategy Evaluation

Even after the initial onboarding phase, ClearPoint offers continuous support with resources available to help your strategy stay on track.

What Sets ClearPoint Apart

ClearPoint Strategy stands out as the #1 Strategic Planning and Execution software for several reasons:

• Holistic Approach to Strategy Execution : We take a comprehensive approach, addressing all aspects of strategy execution from strategy planning to cultural change.
• UI/UX and Support : Our software solution is designed with the user in mind, offering an intuitive interface and extensive support to ensure a positive experience.
• Flexible to You : ClearPoint is customizable, allowing you to mold your account to fit your organization’s unique needs.

Our #ClearPointCommunity has a proven track record of success, with numerous stories demonstrating the effectiveness of our solution within different industries. Explore our Customer Success Stories here .

Bringing your strategic plan to life doesn’t have to be a daunting task. By leveraging ClearPoint’s powerful features and support, you can overcome common challenges and achieve your goals with ease. Our comprehensive approach, coupled with our purpose-built platform, gives you everything you need to succeed in your strategy journey - from start to finish.  

Ready to simplify your strategy execution? Demo ClearPoint (for free!) to get excited about the possibilities of success.

Latest posts

ClearPoint Strategy at the 2024 ICMA Annual Conference

The Power of Software in Managing a City Strategic Plan

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• Customer Relationship Management
• Forecasting
• Global Distribution
• Healthcare Supply Management
• Inventory Management
• Procurement
• Sales and Operations Planning
• Supply Market Intelligence
• Sustainability
• Transportation Planning

Supply Chain Interdiction: The Mysterious Case of Exploding Pagers

As the world economy became increasingly globalized, supply chains also became more global. As a consequence, never in our industrial economic history had competition become so intense so quickly. North American companies compete not only with other North American companies, but also with companies around the globe. This has resulted in the expansion of the United States economy in many important sectors.

Manufacturing also became global. Commodities created from raw materials hailing from one part of the world, built in factories located in another part of the world, combined and bundled with other commodities located in still other parts of the world, were sold to consumers from Tokyo to Berlin.

Materials, components, and products can cross multiple geographies and regions in their journey through the supply chain, due to different tax structures, logistical efficiencies, and labor arbitrage differences. Therefore, depending on the product, demand, capacity, and other factors, companies can source materials and components for their products from other geographical regions, or may do so from local suppliers. The ability to coordinate with worldwide partners has increased because of the diffusion of the internet. Global sourcing has also increased. The majority of electronics sold in the U.S. are now produced in Asia, not in North America. As supply chains became more complex, however, it also became more difficult to find out exactly where materials, components, and products travelled in their path through the chain because, also by virtue of the internet, nearly anyone could become a seller or buyer at any point along the supply chain.

These complex supply chains make it increasingly easy for nefarious activities to be inserted into any point along the chain. This type of activity is called supply chain interdiction, and refers to the activities involved in interfering with the normal, designed processes of any supply chain. Interdiction can result in counterfeits being inserted into the distribution channel, sabotaging products, cyberhacking, data gathering, or any other type of illegal activity.

In the last few years, this potential for interdiction has only escalated, as companies like Amazon and Alibaba have made global competition more important than ever. (This has also led to other problems, such as increased sales of counterfeit products). Moreover, as cost competition has increased, organizations have “outsourced” more of their functions, to lower cost suppliers that are located in areas all over the world. More companies than ever before have outsourced their manufacturing capabilities to organizations called “contract manufacturers.” As Table 1, below, demonstrates, many are now headquartered in Asia. Even those that are headquartered in the United States, including Flextronics, Jabil, and Sanmina, have the majority of their factories in Asia (and some in Eastern Europe).

That contract manufacturers are now predominantly located in Asia reflects not only the shift in manufacturing from Europe and the United States to Asia, but also the shift in the location of the consumption of many finished electronic goods to Asia. In countries such as China, income and discretionary spending have increased at an unprecedented rate since 2000. [1]

• Although these contract manufacturers are located in Asia, they produce and distribute final products for major global brands, including Samsung, Apple, GE, Dell, Ford, Lenovo, Siemens, and other recognizable global brands, both locally and worldwide. With these shifts in global manufacturing, the structure of supply chains has also shifted.
• A few entities like Walmart have achieved near total control over their supply chains. [1] But Walmart is the exception. The vast majority of individual firms, including very large firms, do not have the same market power — and therefore capability — to manage all aspects of their supply chains, particularly since supply chains often include multiple firms with potentially conflicting objectives. Essentially no commodity or upstream component suppliers of which I am aware have such control or capability.
• While Walmart is one instance in which a single, powerful firm took primary responsibility for improving performance across its own supply chain and had the power to do so, nearly all companies in a modern global supply chain will only work with their immediate upstream suppliers and their immediate downstream customers. (This is sometimes referred to as “Tier 1” suppliers/customers.) They rarely have the ability to control or influence parties that are beyond this immediately-adjacent level. A second step removed is, in most cases, where a company’s insight and influence ends. This is particularly the case in industries — like manufacturing of pagers at issue in this case — where there are many competitors and the entities are not sole-source suppliers, but instead compete with other international firms to provide materials, components, or products to the same customer. As competition rises, the ability of any supplier of components to influence the activity of Tier 1 and later users diminishes. Notably, the WSJ reports that Gold Apollo operates in a very competitive space involving a low margin low volume product. As such, for companies in this space, there is often very little visibility and influence beyond “Tier 1” entities in a supply chain. Tier 1 was BAC Consulting, a shell company in Bulgaria, and Tier 2 was Norta Global, in Norway.  But even now, it is not clear how these shell companies were tied to the output of pagers. 

[1] Yuval Atsmon and Max Magni, “Meet the Chinese Consumer of 2020,” McKinsey Quarterly (March 2012), available at https://www.mckinsey.com/featured-insights/asia-pacific/meet-the-chinese-consumer-of-2020.

[2] Stalk, Evans & Shulman (1992), “Competing on capabilities: The new rules of corporate strategy”, HBR, Vol. 70, no. 2, pp. 57-69.

• China Supply Chain
• Counterfeit Supply Chain
• Director's Blog
• FLOW: How the Best Supply Chains Thrive

More From Supply Chain Resource Cooperative

Five myths about the supply chain heading into 2022, rob handfield lists 10 ways to outsmart the supply chain when holiday shopping, maybe its time for consumers to consume less...market satiation as a new supply chain strategy.

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InfoQ Homepage Articles Building Better Platforms with Empathy: Case Studies and Counter-Examples

Building Better Platforms with Empathy: Case Studies and Counter-Examples

Sep 23, 2024 9 min read

David Stenglein

reviewed by

Aditya Kulkarni

Key Takeaways

• Empathy is the ability to see experiences from someone else's perspective, sharing their emotions (positive or negative) based on understanding their experience, unlike sympathy which focuses on acknowledging distress.
• Organizations adopt platforms to manage the increasing complexity of growth, which strains the DevOps model as security, compliance, performance, and other operational demands create an overwhelming cognitive load on developers.
• Building your platform as a product promotes a customer-centric approach. We recognise that internal users have choices and may resort to shadow IT if the platform doesn't meet their needs.
• Building a culture of empathy, modeled through open communication and active listening, empowers you to understand users' true needs and fosters leadership from all levels of the organization.
• The DevEx framework helps identify key areas for platform improvement by focusing on the interconnected elements of feedback loops, cognitive load, and flow state, ultimately addressing user pain points.

When it comes to platform development, achieving scale often involves absorbing excess cognitive burdens into the platform's framework. An important aspect of constructing these platforms lies in fostering empathy. Rather than viewing individuals only through the lens of their issues, it's imperative to recognize them as people. Focusing on more than just specific issues can narrow down solutions unnecessarily. But, taking time to listen and understand diverse challenges leads to better results.

At my QCon San Francisco 2023 presentation, I emphasized the importance of integrating empathy into platform development.

Drawing Lessons from a Costly Error

After securing stakeholder approval, we embarked on a project to extend a cloud-native platform (that we had originally built), leveraging the robust Netflix stack with its blue-green deployments and relevant tools. We set out with a goal to address current usability issues with the platform.

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Confident in our understanding of the platform's needs, we dove into the development. However, as we began demoing the new functionality to users — who were different from the project's stakeholders — we encountered negative feedback. Despite repeated iterations and demonstrations, it became increasingly clear that a significant gap existed between user expectations and our development direction.

Eventually we realized that users would never adopt what we were building and the project was cancelled. A sizeable budget had been spent with no return. What had begun as a well-intentioned attempt to empower teams ended in disappointment, highlighting the contrast between our hypothesis and the users' reality.

In hindsight, we recognized the critical oversight of not considering user perspectives. Our assumption of alignment proved incorrect, highlighting the importance of genuine user engagement and feedback in guiding successful project outcomes.

Significance of Empathy

Let's distinguish between empathy and sympathy. Sympathy involves reacting to someone in distress without necessarily understanding their perspective. Empathy, on the other hand, means understanding experiences from another person's viewpoint.

It's crucial to differentiate empathy from sympathy, as sympathy merely involves acknowledging negative emotions or feeling distress when witnessing someone else's suffering. For instance, the image below might evoke empathy in individuals who have experience with server rooms, allowing them to understand what the person shown below is going through. Empathy extends beyond negative emotions; it can also involve sharing in someone else's excitement or joy.

Empathy has its do's and don'ts.

First, listen without immediately jumping to solutions — which is a challenge with many technical-minded individuals. Instead of assuming and solving, ask probing questions to understand the person's experience and needs better.

Practice active listening by asking open-ended questions that uncover core issues and pains. Embrace vulnerability by admitting what you don't know, rather than rushing to demonstrate capability. Avoid the urge to explain why someone's approach is wrong; this can make the person feel isolated rather than empathized. Similarly, refrain from minimizing concerns; comparing their experience won't foster empathy or understanding.

Why do we build platforms?

Organizations adopt platforms to streamline operations when expansion leads to complexity. DevOps culture encouraged engineers to take ownership, improving speed by removing bottlenecks from the other teams. However, as companies grow, the demands of security, compliance, performance, and other factors create a cognitive load.

Cognitive load is a topic studied in academic research. It investigates how the difficulty of a learning task affects people. The right balance of cognitive load helps a person better absorb new information in a learning environment. This idea has also been applied to understand workplace tasks. NASA has an interesting concept called mental workload, developed during the shuttle program. This concept builds upon the idea of cognitive load by adding in the impact of deadlines, environmental factors, and other stressors that we can sometimes face.

Cognitive load has three primary components. Intrinsic cognitive load describes the underlying complexity of the task at hand – like figuring out your route to the supermarket and the act of driving itself. Germane cognitive load represents the knowledge and skills you need for the task – having a driver's license and knowing how to operate a car. Finally, extraneous cognitive load encompasses distractions that hinder your focus – such as unexpected traffic or detours that force you to adjust your route.

At an enterprise level, when too many people are involved in too many processes, extraneous cognitive load increases exponentially. This leads to lower overall organizational efficiency. Platforms achieve scale by absorbing much of this extraneous cognitive load. They either directly capture work, eliminating the need for users to do it, or significantly simplify it through abstraction. For any remaining tasks that can't be fully eliminated, platforms strive to make them as easy as possible for users to interact with.

Building your platform as a product makes sense for several reasons that align with a customer-focused mindset. Products have customers, and customers have options. This differs from how we typically treat internal tools. However, we've seen situations where internal customers reject what's provided, opting to use their resources to purchase solutions elsewhere – giving rise to shadow IT.

Building a Platform That Delivers Results

By treating your platform as a product, you prioritize making it the best solution. This is crucial, as the alternative (users refusing to migrate or adopt your platform) is equally undesirable. A non-compelling platform can simply become another layer in the company's growing tech stack, failing to solve real user problems. It may linger without being officially canceled, ultimately contributing to the company's tech debt rather than providing value.

The old approach was highly transactional. Users would submit requests through a ticketing system – asking for a specific feature or a change to the build system. We'd either try to incorporate these requests into the platform directly or figure out ways to automate them to handle the volume. Unfortunately, this old method resulted in limited understanding and empathy due to its reactive nature.

Platform engineering centers around building for others, not yourself. This marks a fundamental mindset shift compared to traditional systems administration. Sysadmins and even DevOps engineers focused on maintaining and modifying the shared components of a system. In contrast, platform engineering teams build a self-service product for others to utilize. The new focus is on creating an appealing product, which requires understanding your users' needs. By employing empathy and stepping into your users' shoes, you'll be far more successful than simply offering solutions based on assumptions about their requirements.

This approach offers significant benefits. By focusing on building what users actually need, based on their direct feedback, you optimize the use of company resources. For example, if you develop five features but only two are truly valuable to internal customers, the remaining three represent wasted effort and contribute to tech debt. However, if all five features are genuinely useful to engineering teams, you'll significantly boost their effectiveness. This approach leads to accelerated growth and, likely, much higher employee satisfaction.

Much of developer experience focuses on satisfaction, and for good reason. By understanding user needs, building solutions for them, and actively eliminating their pain points, you naturally create happier engineers. This sets up a virtuous cycle: start by identifying what users need and then build it – they will adopt it. This increases overall company efficiency and effectiveness, further increasing user satisfaction. The cycle continues. Alternatively, if you build something without this approach and expect adoption, the cycle stalls if users don't engage. You've inadvertently hindered the company's potential for greater efficiency and created a roadblock to this positive cycle.

Leveraging Empathy for Results

To use empathy when building platforms, you need to create a culture of empathy. Since we're dealing with human emotions, establishing a cultural foundation is crucial. This means actively encouraging everyone to practice listening – focusing on understanding others rather than immediately formulating a response. Additionally, it's important to get to know coworkers and customers as individuals. Building these connections makes it easier to step into their shoes, shadow them, and understand their experiences – all of which are essential for building with empathy.

From a product perspective, building a culture of empathy empowers you to have honest conversations with users about their true needs, going beyond mere requests. This starts with modeling the desired behavior yourself. By actively demonstrating this approach with both coworkers and customers, you set an example for others to follow. Remember, leadership can come from any level of the organization – you don't need a managerial title to showcase these principles.

Use Product Management practices to deeply understand your users, their pain points, and the solutions they need. These techniques are equally beneficial when building internal platforms. For example, surveys can be beneficial to acquire subjective data. To grasp someone's perspective, you need to understand how they feel about the system – not just measure deployment frequency or other objective metrics. Survey your users directly, asking questions like "Do you feel you're as effective as you could be?" This type of feedback is surprisingly valuable for platform development.

The DevEx framework also offers a powerful way to identify crucial improvement areas and ask the right questions about how your platform can address user pain points. This is because its elements – feedback loops, cognitive load, and flow state – are deeply intertwined. For example, if slow build times disrupt feedback loops, addressing that directly will help users stay in a flow state for longer. Similarly, if you streamline deployment options, reducing the complexity within AWS, you lower cognitive load and boost efficiency. The emphasis on flow state is vital – the longer users remain focused and productive, the more value they generate for the company.

I believe that any organization benefits greatly from having software engineers join the platform engineering team. This diversity of perspectives is crucial for ensuring the team builds the right solutions and truly satisfies its internal customers. At the same time, platform engineers should actively work alongside their customer teams – the developers – to gain a firsthand understanding of their day-to-day experience. This reciprocal approach fosters a deeper understanding of both sides.

Empathy means seeing people first, not just problems. By connecting with the person, you open yourself to a wider range of solutions. Focusing solely on fixing a specific issue prematurely limits your options. Taking the time to actively listen and understand the person and their broader challenges will ultimately lead to much more effective solutions.

Always remember your target audience: you're not building for yourself. As a platform team crafting a product, you're building for your customers. Keeping this mindset at the forefront will guide you towards addressing their needs. Much of what we discussed in this article is actionable on a personal level – integrating product management techniques, etc. But if you're part of a platform team, you can start making a difference right away. Focus on active listening and resist offering immediate solutions.

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Case Study on the Use of Integrated Approaches for Testing and Assessment (IATA) for Chronic Toxicity and Carcinogenicity of Agrichemicals with Exemplar Case Studies - Ninth Review Cycle (2023)

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The objective of the Integrated Approaches for Testing and Assessment (IATA) Case Studies Project is to increase experience with the use of IATA by developing case studies which constitute examples of predictions that are fit for regulatory use. The aim of this project is to create common understanding of using novel methodologies and the generation of considerations/guidance stemming from these case studies. This case study was developed by the International Council on Animal Protection in OECD Programmes (ICAPO) to illustrate practical uses of IATA, and was submitted to the 2023 review cycle of the IATA Case Studies Project. The case study provides a framework to fulfil an IATA for chronic toxicity and carcinogenicity assessment through a weight of evidence (WoE)-based approach, in the absence of rodent cancer bioassays. The purpose of this IATA is to illustrate the use of the Rethinking Carcinogenicity Assessment for Agrichemicals Project (ReCAAP) framework, which is a scientific, WoE-based approach that allows the estimation of a Point of Departure (POD) for use in agrochemical risk assessment. To illustrate the use of the ReCAAP framework, two examples are presented in this IATA.

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