case workshop unc

8/6/2019 Case Workshop Unc

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Kenan-Flagler Business School Consulting Club

Case Interview Frameworks

Overview

Determine Key

Issue(s)

Develop

Hypotheses

Gather Data /

Test HypothesesDevelop Options

Make

Recommendation

Refine Answer

As the interviewer describes the situation, think about what are the key issues

facing general management

Develop hypotheses

Decide what data you need to better understand the issues

Listen to the facts

Evaluate which facts are criticalto the key issues

Probe for more detail in critical areas

Usefacts andnumbers appropriate in building argument

Summarize optionsbefore making recommendation

Statepros andcons - be fact driven

Make your recommendation


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Using Frameworks

There is no golden rule, more than one framework may be applicable

Use an appropriate framework

Do not force a framework

Be hypotheses driven

Be prepared to revise your hypotheses

Mutually Exclusive and Collectively Exhaustive (MECE)

Listen forclues from the interviewer

Acceptdirection from the interviewer

Display your thinking visually / graphically

Be transparentin your analysis

Leave time to summarize and make recommendations


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Some General Frameworks

The Three Cs

The Four Ps

Porters Five Forces (+govt.)

Supply & Demand

The Profit Equation

Internal - External

NPV Analysis

Dont be afraid to create your own framework, as long as it is logical,

appropriate and transparentto the interviewer.


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Adjust Answer

Increasing Factors

Adjust Answer

Decreasing Factors

Analyze Results

Implications?

Calculate

Use Round Numbers!

Common sense check!

Make Assumptions

Determine The Key Drivers

Bottom Up or Top Down?

Market Sizing


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Decreasi

. ress re?

Price

- arket

iti

s

-

etiti

Decrease

Hi

er ar

.

sts

- Or

. Dysf

cti

- O

erti e

I

crease

Vol

e

Selli

Less

Profitable Items

Product

ix

evenues

-

dded

apacity?

Fixed

osts

- aw aterial Prices

Variable

osts

- Writeoffs

- Lawsuits

nusual Expenses

Expenses

nalyze sing

Profit Equation

Gat er Information

W at's Driving

t eDecline?

Declining Profits


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Increase Capacity?

Competitors Plans

Global Competition

Substitutes

T reats

IndustryCapacity

Cyclical Seasonal

Economy

Consumer tastes

arket Trends

arket Demand

Bottlenecks

Design formanuf.

Improve Productivity

Add s ifts

Acquire

Outsource

AddCapacity

Investment vs. Improvement

Should We IncreaseCapacity?


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Susbsitutes

Demographic changes

New customers?

Values

Tastes

Disposable income

Mature market?

Price Sensitivity

Distribution channel

Bundled product?

Normal good?

Purchasing Habits

Cust

r

-

hat do they want?

- How do they ch oose?

! roduct

" lace

! rice

" romotion

Competitor

-

here are we positioned?

-

here is the competition?

Cost structure

Tangible

Intangible

Finances

Resources to respond?

Distributor

Vendor

Customer

Business relationships

Company

- How do we add value?

Given the above, is it worth making a competitive response?

How will the competition react?

Applying game theory or PARTS analysis may help.


Competitive Response


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New Product Introduction?

Product

Have we done homework?#

hat does the segment want?

Proliferation of products already?

PriceHave we e

$

plored sensitivity?

Can we make a profit at this price?

Promotion

Push orPull?Cost of launch?

#

ill current promotions help?

Place

Is distribution aligned with customer?

Are we e$

perienced in this channel?

CustomerDoes product met a need?

Is market growing?

Can we eat the young?

Many

%

hat wil be the strategy?& ow cost or Differentiated?

Few

Yes

YesCan we beat them?

NoCan we erect some?

Are there barriers to entry?

Any precious resourcethat we own?

(Ricardian rents)

'

ill we be first movers?

No

CompetitionIs there any?

Finance

Are we able to finance the launch?Should we buy an e

(

isting producer?

OperationsD0 we have capacity?

Supply network?

Marketing)

ill we cannibalize e(

isting products?Is this a complement

0

bundled good

Does it build on resources?

CompanyCan we do it?


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International Expansion

Doesit matchourgrowth strategy?

- 1 OE2

1 OI

Alliancewith local firm?

- Joint venture/distributor

Canour resources succeedoverseas?

-Flexibleenough toadapt?

Is organ ization consistent

withoverseas 'autonomy'

CorporateValues

-Bribery

Worker's cond itions / child labor

Internal

Cu ltural Differences ofCustome rs

- Tastes /produ ct preferences

-Va lues /gender roles

3ethod s ofConducting Bu siness

- Introdu ctions

-Government con tacts

Edu cationa l Differences

Ec onomy4

Exc hange 1 ates

Seasona lity

- Weather

Distribu tion system- Transportation in frastructure

-Different channels

Political Clima te

- Instab ility

Local 3 arket

-S ize

-Competition

External

Amount

Timing

-Startup /disposition

- Operating

Discoun t 1 ate

CashFlows

1 OI /Hurdle 1 ate

Quantitative


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Useful Life

Timing

- OpportunityCost

Size

- 5 arket Potential

- Outflows

- WorkingCapital

CashFlows

- 6 isk Free 6 ate

- Inflation

- 6 isk Adjust

Discount6

ate

NPVAnalysis

Strategic Fit

- 5 issing Links

ofValueChain

Synergies

-Seasonality

-Volatility

- Inflation

DemandCycle

Environmental

Stability

Regulation

Political

-Current Supply

Potential Demand

Competitors

OtherFactors

Investment Decision

Investment Decision


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Strategic Objective Strengths Weaknesses

Resources AcquisitionFit

Internal Factors

Porter's FiveForces

ThreeC's

IndustryAttractiveness

Soft Issues

-Culture/Fit

- anagement

Hard Issues

- Price

-BalanceSheet

IdentifyAcquisition

Candidates

External Factors

Analyze Opportunity

Understand Purpose

Diversification?

Gain arket Share?Geographic Expansion?

Company Acquisition


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YesThen Buy Back Stock

to Raise Stock Price

NoCan e Release ood News

to Raise Stock Price?

Do e Have Cash?

Yes

Issue Debt, Buy Back Stock

No

Are e Highly evered?(Relative to the Industry)

Self-Help

Has Financial Strength

Strategic Compatability

Cultural Fit

Classic M&AIs there a Firm That...

hite Knight

Two ptions Both

Designed to Raise the

Value of the Company

Hostile TakeoverDefense

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