Case Interview Series – session 2 of 3

Structure in Communication and

Problem Solving

Workshop document
HEC MBA Sep 2023 Promotion
20 October 2023
Nicolas Constantinesco
The case process always consists of 4 stages
Case steps Outputs What you must do

3-4 mins § Context 1. Listen, recap,

1. Introduction and understand
§ Problem statement
the Question
(question to answer)

3-4 mins § “Problem” broken 2. Structure the

2. Structure
down into discrete problem
parts
Focus today

3.Deep 3.Deep 3.Deep ±15 mins § Insights that address 3. Analyze & extract
dive dive dive different parts of insights
analysis analysis analysis the problem

4. Recom- 4-5 mins § Recommendations 4. Recommend

mendations and next steps

2
Bain video

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3
5:27
One key goal today is to make you independent of
frameworks

Objective:
“Framework problem” Learn to build
tailored frameworks
§ Interviewers don’t like them
using business logic
§ Hard to memorize
§ Better interview
§ Difficult to apply correctly results
§ Better thinker

4
Today’s learning journey

Analytical techniques
derived from Business Logic

“How to”
Foundations: “Which
Communicate “How to” Questions
thinking options” Wrap-up
with impact Questions quantitative
analytically Questions
techniques

5
Today’s learning journey

Analytical techniques
derived from Business Logic

“How to”
Foundations: “Which
Communicate “How to” Questions
thinking options” Wrap-up
with impact Questions quantitative
analytically Questions
techniques

6
Poor communication leaves a negative impression

7
Poor communication leaves a negative impression

Interviewer/client
Poor comms…
§ Frustrated
§ Rambling, no
Message unclear… § Wasted time
clear point
§ Hard to follow
§ Too much detail
§ Confusing Candidate
§ Too fast
§ Lost credibility
§ Unstructured
§ Not client ready

8
Great communication looks very different

9
Great communication is about leadership

How to
If you communicate well… communicate well…

§ Gravitas § Crystal clear

when you speak, others listen
§ To the point
§ Executive presence
ability to inspire confidence § Confident
from leaders, peers and
subordinates
§ Empathetic

10
Great communication is about leadership

How to
communicate well…

§ Crystal clear
§ To the point
3 techniques
§ Confident
§ Empathetic

11
1. Executive Summarize

• ____
• ____
• ____ Example:

1. Message Should the school double its MBA class size?

2. Outline To solve this question I would explore 3 factors:

1. Point 1 § Will it attract more employers?
2. Point 2 § Will it strengthen the alumni network?
3. Point 3 § Will it increase profits?

3. Detail On the attractiveness for employers, I would …

1. Point 1:……
2. Point 2:……
3. Point 3:……

12
2. Number things

Example:

Should the school double its MBA class size?

§ Number items
whenever you To solve this question I would explore 3 factors:
have 2 or more #1: Will it help attract more employers?
items #2: Will it strengthen the alumni network?
#3: Will it increase profits?
§ Use fingers to
help visualize On the 1st factor, I would …

13
3. Use empathetic language

Example:

Should the school double its MBA class size?

§ Explicitly put If I were the dean, I would want to know 3 things:

yourself in #1: Will it help us attract more employers?
client’s shoes #2: Will it strengthen our alumni network?
#3: Will it increase our profits?
§ Adapt
language On the 1st factor, I would …
accordingly

14
Bain video

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15
5:27
Time to practice!

1. Each person chooses a question (can be the same)

2. 1 minute: think quietly about an answer with 3 ITEMS
§ Don’t worry about being “right”
3. Each person gives answer (max 2 mins per person)

Question 1
Should KPMG acquire Bain to better compete with
McKinsey and BCG?

Question 2
How could the campus cafeteria double revenues in
2 years?

16 1 round
Today’s learning journey

Analytical techniques
derived from Business Logic

“How to”
Foundations: “Which
Communicate “How to” Questions
thinking options” Wrap-up
with impact Questions quantitative
analytically Questions
techniques

17
Thinking about the problem…

18
Start by being clear about the Case Question

Case structuring
ALWAYS starts with
the Case Question

REMINDER #1
1st task to clearly identify the Case Question

19
Thinking analytically means to dissect something

Analytical Thinking:

The abstract separation of a

whole into its constituent parts
in order to study the parts and
their relations

REMINDER #2
Structuring the Case Question means breaking it down

20
Dissect the Question into smaller questions

Q
Q
Q

Q Q

Q Q

REMINDER #3
Break down the Question into sub-questions

22
Jen’s structure was made of sub-questions

Jen’s structure:
§ Which option has the highest ROI?
§ Which option results in the best competitive reaction?
§ Which option causes least cannibalization on existing
business?
§ Which option has the least execution risk?

Let’s watch again:

23
Focus on the key words to conduct your analytic
breakdown

1. Focus on key word(s)

at the essence of the
question
2. Reflect
3. Start breaking down

27
Problem structuring – Helpdesk example

How can we increase

number of clients?
How can we
increase
revenue?
How can we increase Test for robustness:
revenue/client?
How can 1. Results-oriented:
sub-questions answer
Helpdesk
parent question
restore (≠ data-mining, open-
profits in the ended)
How can we reduce
next 2 years?
call center costs? 2. MECE:
§ Mutually Exclusive
(no overlaps)
How can we How can we reduce § Collectively Exhaustive
reduce costs? dispatch costs? (no gaps)

3. Fits the case è simple,

How can we reduce insightful, good business
judgment
overhead costs?

28
Which approach do you like better?

How much profit can Analyze

they generate? potential
customers

Does it make
Should strategic sense?
Should
Analyze
Apple build Apple build
competition
an iCar? an iCar?
Do they have the
capabilities?

Analyze
Can they manage Apple’s internal
the key risks? capabilities

Results-oriented
ü Sub-questions (partially) answer parent question Open-ended è endless work
è “value drivers” ✘ Too broad; “hope to find something”
ü What we must solve; clear & specific “goal posts” ✘ Analyzing, but not solving
ü Supports decision-making ✘ Too much work for too little return

29
Breakdowns must be based on one single logic

Imagine:
We want to understand Which of the following
the drivers of are logically defensible
academic performance ways of breaking down § A-D are logically defensible
in school children school children? because they are each based
on one single logic (A: gender,
A. Boys, girls B: height, C: race, D: wealth)

B. Short, tall
§ E-F are not logical because
C. Asian, black, white, they use more than one logic:
other – This is what causes
overlaps and/or gaps
D. Wealthy, middle class,
poor § To be MECE, breakdowns
E. Urban, boys must be conducted with
one single logic
F. Short, white, poor

30
The methodical approach to structuring

Structure Analyze
Listen & recap Recommend
approach & solve

5+4 steps:

How to THINK:
1. Ignore for now
2. Focus on key word(s) at essence of Question and Reflect
3. Ignore for now
4. Break down the Question analytically
5. Test logic & business sense with 3-part Health Check

How to COMMUNICATE:
1. Draw & show outline of your framework (e.g. Issue Tree)
2. Restate the Question
3. Executive Summarize & Number Things
4. Suggest where to begin

31
Save for new house structuring exercise
§ My family will expand
§ New house costs 500k
§ I already have 300k
How can I earn
§ I don’t want to borrow
more from work?

How can I
How can I earn more Test for robustness:
increase
from investments?
income? 1. Results-oriented:
sub-questions answer
parent question
How can I How can I earn (≠ data-mining, open-
ended)
save 200k more other means?
before baby 2. MECE:
arrives? § Mutually Exclusive
How can I buy (no overlaps)
How can I fewer items? § Collectively Exhaustive
(no gaps)
reduce
expenses? How can I pay less 3. Fits the case è simple,
insightful, good business
for items I buy? judgment
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32
Today’s learning journey

Analytical techniques
derived from Business Logic

“How to”
Foundations: “Which
Communicate “How to” Questions
thinking options” Wrap-up
with impact Questions quantitative
analytically Questions
techniques

34
HOW TO questions require driver thinking

HOW TO questions ask us how to achieve an Objective

(drive future change)

Change question Example Model answer

How can we How can we increase To achieve X and Y, you should
achieve X (and Y)? profit? do Action 1, Action 2, …

How can we make our

organization Agile?

§ The answer recommends actions to achieve the desired objective

§ The answer & structuring logic come from change/value drivers

35
“How to” questions are best broken down with
more “how to” questions

How can they get

more clients?
How can they
increase
revenue?
How can they increase
revenue per client?
How can
Helpdesk How forces us
increase to think
profits? How can they reduce in value drivers
call center costs?

How can they How can they reduce

reduce costs? dispatch costs?

How can they reduce

overhead costs?

36
The 4 Angles

4 angles to break down a Key Word

Key Word
3. Drivers of KW

1.Components 2.Segmentation
of KW when KW is a population

§ Demographic
§ Geography
§ Time
4. Driving process(es) § Size
that lead to KW § Color
§ etc…

37
 The 4 Angles

4 angles to break down a key word - examples

Key Word
3. Drivers of KW

1.Components 2.Segmentation
of KW when KW is a population

§ Demographic
§ Geography
§ Time
4. Driving process(es) § Size
that lead to KW § Color
§ etc…

1. COMPONENT 2. SEGMENTATION 3. DRIVER 4. DRIVING PROCESS

How can we improve How can we improve How can we improve How can we improve
quality of iPhones? quality of iPhones? quality of iPhones? quality of iPhones?
§ …quality of processor? § … quality of iPhone § …improve raw § …improve components?
Pros? materials?
§ …quality of camera? § …improve body
§ … quality of iPhone § …improve machining?
§ …quality of tactile
Plus? production?
components? § …improve polishing?
§ … quality of iPhone § …improve QA & QC?
§ …quality of other § …improve final
Minis?
components? assembly?

38
The 4 Angles

4 angles to break down a Key Word

Key Word
3. Drivers of KW

1.Components 2.Segmentation
of KW when KW is a population

§ Demographic
§ Geography
§ Time
4. Driving process(es) § Size
that lead to KW § Color
§ etc…

39
The 4 Angles

1. Breakdown into Components

Description Example breakdown into Components

Breakdown into the How to improve
different PARTS of quality
a Key Word of university
recruits?

How to recruit How to recruit

How to recruit How to recruit
more students with
smarter harder working
experienced better cultural
students? students?
students? fit?

40
1. Component
The 4 Angles

4 angles to break down a Key Word

Key Word
3. Drivers of KW

1.Components 2.Segmentation
of KW when KW is a population

§ Demographic
§ Geography
§ Time
4. Driving process(es) § Size
that lead to KW § Color
§ etc…

41
The 4 Angles

2. Breakdown by Segmentation

Description Example breakdown by Segmentation

Breakdown a Key How to improve
Word into several quality of
manifestations of university
university
one of its FEATURES recruits?
recruits
Options:
§ Demographic How to How to How to
§ Geography increase quality increase quality increase quality
§ Time of recruits from of recruits from of recruits from
§ Size top-tier mid-tier lower-tier
§ Color universities? universities? universities?
§ etc…

42 *Source: CraftingCases.com 2. Segmentation

2. Segmentation case for discussion

§ McDubai is a revolutionary fast casual startup that sells

burgers made with cultured meat
§ They opened a prototype restaurant to test their concept
2 months ago, and success has exceeded even the most
optimistic expectations.
§ Now McDubai wants to capture the Dubai market as
quickly as possible
§ How can they do this?

Vote on best 5
43
2. Segmentation
The 4 Angles

2. Segmentation also works beyond people – example 1

Description Example breakdown by Segmentation

Breakdown a Key
Word into several How can retailer
manifestations of increase sales of
one of its FEATURES televisions
televisions ?

Options:
§ Demographic
§ Geography
How to How to How to
§ Time
increase sales increase sales increase sales
§ Size
of small TVs ? of medium TVs ? of large TVs ?
§ Color
§ etc…

44 *Source: CraftingCases.com 2. Segmentation

The 4 Angles

2. Segmentation also works beyond people – example 2

Description Example breakdown by Segmentation

Breakdown a Key
Word into several How can Amazon
manifestations of reduce
one of its FEATURES delivery
deliverytimes
times?

Options:
§ Demographic
§ Geography
How to reduce How to reduce How to reduce
§ Time
delivery times delivery times delivery times
§ Size
in cities? in suburbs? in rural areas?
§ Color
§ etc…

45 *Source: CraftingCases.com 2. Segmentation

The 4 Angles

2. Segmentation also works beyond people – example 3

Description Example breakdown by Segmentation

Breakdown a Key
Word into several How to increase
manifestations of revenues
revenues from
one of its FEATURES tennis courts?

Options:
§ Demographic
§ Geography How to How to How to
§ Time increase increase increase
§ Size weekend weeknight weekday
§ Color revenues? revenues? revenues?
§ etc…

46 *Source: CraftingCases.com 2. Segmentation

The 4 Angles

4 angles to break down a Key Word

Key Word
3. Drivers of KW

1.Components 2.Segmentation
of KW when KW is a population

§ Demographic
§ Geography
§ Time
4. Driving process(es) § Size
that lead to KW § Color
§ etc…

47
The 4 Angles

3. Breakdown into Drivers

Description Example breakdown into Drivers

Breakdown a Key
Word into its How can retailer
DRIVERS increase
increase sales
sales
of televisions?

How to ensure
How to improve How to improve How to improve
sufficient
portfolio of TVs the pricing the promotion
availability
on offer? of the TVs? of the TVs?
of TVs?

48 *Source: CraftingCases.com 3. Drivers

The 4 Angles

3. Who caused the Nordstream explosion?

49
3. Drivers
The 4 Angles
3. Motivation & Ability are fundamental drivers of
behavior & performance

Don’t do
High Do (well) Influencing
(well)
behavior &
Motivation performance
(prerequisite: requires
awareness)
acting on both
Don’t do Don’t do Motivation
Low and Ability
(well) (well)

Low High
Ability

50
3. Drivers: Motive & Ability
 The 4 Angles
3. McKinsey’s Influence Model is a proven & elegant method
to structure drivers of behavioral change
Rationale & Instilling inspiration &
Story to foster Role-modeling belief
inspiration
understanding and [motivation]
§ Story content conviction [motivation] § Who (influencers)…
I see my leaders, team
§ Communication I know what is expected mates and other § …should model what
strategy (who, what, of me, I agree with it, colleagues adopt the new actions…
to whom, when, what
channels) AND I find it meaningful behaviors § …in front of whom…
§ …in what settings?
I will change
Enabling & my own
§ Organization’s
empowering behavior if… capabilities:
Skill & opportunities Formal – Size & structure
§ Training
[ability] reinforcement mechanisms – Roles & Responsibi-
§ Talent I have the skills and [motivation & ability] lities (e.g. RACI)
management – Working processes
opportunities to Barriers are being removed,
processes § Performance mgmt:
behave in the new way and I’m being rewarded for
§ Creation and making the changes I am KPIs, targets,
provision of incentives, promotions
being asked to make
opportunities § Information systems
§ Access to resources
($$, data, equipment…)

51
3. Drivers: Influence Model
3. Influence Model – FCB example
Story to foster Role-modeling
§ In last 20 years FC understanding and [motivation]
conviction [motivation] I see my leaders, team
Barcelona has consistently I know what is expected mates and other
been the best in Spanish of me, I agree with it,
AND I find it meaningful
colleagues adopt the new
behaviors

and European football I will change

§ In last 3-4 years, my own
behavior if…
performance has become Skill & opportunities Formal

uninspiringly subpar, morale What players should Coach buy [ability]

I have the skills and
reinforcement mechanisms
[motivation & ability]

& sell?
opportunities to Barriers are being removed,
has sagged, and the team behave in the new way and I’m being rewarded for
making the changes I am
has lost focus [Skill & opportunities] being asked to make

How can Coach improve the

How can FCB’s new training?
[Skill & opportunities]
coach sustainably
restore the club to
historical What game philosophy & tactics
performance levels? should Coach implement?
[Reinforcing mechanisms]

What story to tell?

How to restore focus, hunger,
and belief in the team?
[Story + Role Modeling] Who can Coach use as
role models?

52
3. Drivers of behavioral change
The 4 Angles

4 angles to break down a Key Word

Key Word
3. Drivers of KW

1.Components 2.Segmentation
of KW when KW is a population

§ Demographic
§ Geography
§ Time
4. Driving process(es) § Size
that lead to KW § Color
§ etc…

53
The 4 Angles

4. Structuring example using process

Discussion
…make it easy to
find and reach?

…optimize check-in
How can Abu Dhabi experience?
Airlines make its
lounge the best in the § Work
world?
…optimize in-lounge § Relaxation
experience? § Food
Follow customer journey
§ Personal hygiene

…optimize access to
gates?

54
4. Driving process
4. Sales volume responds to multiple drivers
External driver

D is
trib

m et
d
de ark
Internal driver

an
uti

M
on
Sales Competition
Promotion
volume

Pr
od
uc
ng

t
ic i
Pr

55
4. Business process
 4. Process thinking can also be applied in the 2nd layer
after Drivers

Assess
Define Ideate & Test &
Product product/ Launch
product vision design validate
market fit

Assess target
Evaluate Choose Select
Define market’s Determine
Pricing
objectives evaluation of
competitor basis for pricing
specific price Improved
prices pricing strategy
price processes
lead to
Define
improved
Define target Define Decide Plan imple-
Promotion
segment objectives
marketing
channels mentation
Execute outcomes
messages

Inventory
Distribution Production Warehousing Packing Shipping Delivery
management

56
4. Business process
The 4 Angles

4. The business world is structured by processes

Not exhaustive
Business
functions

Sales & Human

Operations Finance IT & Digital
Marketing Resources

§ Customer journey § R&D / product § Financial planning § Employee journey § Soft/hardware

§ Marketing funnel development § Budgeting § Recruitment testing
§ Customer § Design § Financial analysis § Selection & Hiring § Soft/hardware
acquisition § Production § Financial § Employee rollout
§ Client onboarding process (e.g. reporting onboarding § Incident
§ New product production line) § Treasury § Performance management
introduction § Plan-to-inventory management management § Request
§ Quote-to- § Strategic § Expense (evaluations, fulfillment
bill/order-to-cash procurement management promotions, …) § Capacity
§ Account § Procure-to-pay § Investment § Payroll processes management
management § Supplier appraisal
§ Content management § Taxation
marketing § Quality control & § Equity/debt
§ Pricing assurance issuance Processes can also extend
management § Product delivery § Accounts payable outside a single business,
§ Product returns § Accounts
e.g. industry value chain
§ Customer service receivable

57
4. Driving process
When all else fails: Opposite Words* is a very
simple way to start a breakdown

Description Example concepts Example breakdown

A Yin-Yang-like § Supply vs Demand
breakdown of How can retailer
§ Internal vs External
the problem into increase
increase sales
sales
§ Financial vs Non-Financial of televisions?
its opposite,
complementary § Existing vs New
parts* § Fixed vs Variable Costs
How to How to
increase sales increase sales
through through
marketing non-marketing
actions? actions?

Note:
§ Opposite Words is rarely insightful
§ But it can be a good “go-to” default if you’re stuck
§ Also useful for less important parts of Question Tree

58 *Source: CraftingCases.com Opposite words

Each bucket that must be broken down needs its own
technique
How ... from schools where
How can we we already recruit?
improve
Segmentation
quality of
How ... by recruiting at new
applicants?
schools?

How ... by improving our

process?
How can we
How can we
improve the
improve our How ... by adjusting our
quality of Components
selection criteria?
university
method?
recruits?
How ... by improving our
recruiters

How can we How ... by training them

improve new before their start date?
recruits Opposite words
before they How ... by training them
start to work? right after their start date?

Business process (recruits’ journey)

59 *Source: CraftingCases.com
Let’s close this section in style…

How can our school increase revenues from alumni donations ?

In pairs develop 2 or 3 structures using the 4 Angles

(1st layer only)

60
Today’s learning journey

Analytical techniques
derived from Business Logic

“How to”
Foundations: “Which
Communicate “How to” Questions
thinking options” Wrap-up
with impact Questions quantitative
analytically Questions
techniques

62
Value Driver Trees

Build Value Driver Trees for numerical questions

# people with ANY fitness
# people with app installed
our app installed x
% of those with OUR app
# users x
% that have used
the app
Increase
revenues x
% users that pay
From paying
users x
Rev / paying user
Revenue/user +
% users that don’t pay
From non-paying
Increase users x
profitability
of fitness – Rev / non-paying user

app Software development

Fixed + Content development

Server infrastructure
Reduce costs +
Commissions to app platforms
Variable +
User acquisition

63
Value Driver Trees

Helpdesk example using Value Driver Tree

How can they get

more clients?
How can they
increase X
revenue?
How can they increase
revenue per client?
How can
Helpdesk
increase –
profits? How can they reduce
call center costs?
+
How can they How can they reduce
reduce costs? dispatch costs?
+
How can they reduce
overhead costs?

64
 The 4 Angles

The 4 angles can combine with a Value Driver Tree

Key Word
3. Drivers of KW

1.Components 2.Segmentation
of KW when KW is a population

§ Demographic
§ Geography
§ Time
4. Driving process(es) § Size
that lead to KW § Color
§ etc…

1. COMPONENT 2. SEGMENTATION 3. DRIVER 4. DRIVING PROCESS

How to reduce supply How to reduce supply How to reduce supply How to reduce supply
chain costs of toothpaste
toothpaste? chain costs of toothpaste
toothpaste? chain costs of toothpaste? chain costs of toothpaste?
+ …SC costs of abrasives? + …SC costs of Colgate + …SC costs of raw + …costs of procurement &
Total? materials? inbound logistics?
+ …SC costs of fluoride?
+ …SC costs of Colgate + …other external SC costs? + …costs of production?
+ …SC costs of detergents? Optic White?
+ …SC costs of internal + …costs of distribution &
+ …SC costs of other + …SC costs of Colgate labor? outbound logistics?
ingredients? Sensitive?

+ …SC costs of other sub-

brands?

65
Mega technique: use Factoring
How to factor:
1. Think of a value driver X
2. Multiply or divide by X/X and rearrange
Value driver
# clients
Value driver
Value driver
# calls How to decrease
# hours number of clients?
How to decrease
number of calls? X
How to decrease How to decrease calls
hours? X per client (call frequency)?
How to decrease hours
per call (call duration)?
How to
decrease
labor costs in X
call center?
How to decrease direct
How to decrease labor costs (wage rate) ?
labor cost per
hour? (wage rate)
+
How to decrease indirect
labor costs?

§ MECE guaranteed if the math works

§ Each disaggregation unlocks powerful concepts

66
Mastering market sizing is essential

67 Source: CraftingCases.com
Factoring is also THE technique for market sizing
Value driver
# cars
# people
Value driver
Value driver # of cars X # people
Fuel liters
# cars/person
Fuel liters
X
bought
# km/car
Value driver
Liters of fuel/car X km
# gas # liters/km
stations in ÷
Spain Value driver
# pumps

# of pumps per station

Liters sold per
X Daily tank fills per pump
station
Value driver
Liters/pump X Tank fills
Liters/tank fill

Learn more about market sizing: www.craftingcases.com

68
Practice Factoring

Keep track of units!

How can we reduce CO2 emissions from cars in Berlin by 50%?

Estimate market size (€) of take-away coffee market in Madrid

69
Factoring: sample solution
Value driver
population
Value driver
# cars … population?

How to reduce
X
# of cars?

… # cars
/person?

How to reduce
CO2 emissions
from cars in X Value driver
Fuel liters
Berlin? Value driver
km
… CO2/liter?

… CO2/km? X
… liters/km?
How to reduce
CO2/car? X

… km/car?

70
Factoring: sample solution

Value driver
# TAC drinkers
Population
# TAC drinkers Value driver
(per year)
X # people
Value driver
% TAC drinkers
TAC drinks
(per year)

TAC drinks
(per year) X

All coffee drinks

/TAC drinker Value driver
TAC drinks/TAC drinker X All coffee
Market size (per year) drinks
Take-Away
X % of which Take-away
Coffee in
Madrid (EUR)

Price/TAC drink

71
Let’s now revisit this question

How can our school increase revenues from alumni donations ?

Can you come up with additional structures?

(1st layer only)

72
Numerical questions for practice at home

How can Boeing double revenue in 5 years?

How many passenger-kilometers are ridden each

year in the Paris subway?

Tom is overweight and wants to run the New York

Marathon in 9 months. How can he lose 15kg?

Mary wants to buy a house that costs 300k.

She already has 225k but doesn’t want to borrow.
How can she save 75k in 1 year?

73 Pairs: Solve together, communicate individually; Call on someone

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Today’s learning journey

Analytical techniques
derived from Business Logic

“How to”
Foundations: “Which
Communicate “How to” Questions
thinking options” Wrap-up
with impact Questions quantitative
analytically Questions
techniques

74
WHICH OPTIONS questions require criteria thinking

WHICH OPTIONS questions ask us to

decide between (strategic) options

Question Example Model answer

Should we…? Should we enter Poland? You should (not) do it
(yes/no) because Reason 1, Reason 2, …

Which option Should we enter Poland, You should choose option A

should we choose? Czech or Hungary? because Reason 1, Reason 2, …
(one from several)

Which options Which 5 EU countries You should choose [A, B,…]

should we choose? should we enter? Because Reason 1, Reason 2, …
(a few from several)

§ The answer recommends options because of Reasons

§ The answer and structuring logic come from Decision Criteria

75
1. Example of Which Options question with decision
criteria

How much profit can

they generate?

Does it make
Should strategic sense?
Apple build
an iCar?
Do they have the
capabilities?

Can they manage the

risks?

76
1. The 5 criteria
1. Exercise: Yes/No questions

1) Should Emirates buy Etihad Airways?

2) Should Toyota build a plant in Rwanda to increase

sales in East Africa?

3) Should your cousin do an MBA?

Task:
§ Choose one question
§ Define the Level 1 sub-questions that must be solved
§ Avoid open-endedness J

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77
1. The 5 criteria
1. The 5 decision criteria that govern decision-making

Criteria Example question Example Level 2 issues to explore (not exhaustive)

§ Revenue: market size & growth, competition, product/market

1. Economic How profitable is fit, competitive advantage, customer segments…
benefit this idea? § Costs: Production, distribution, sales & marketing, overhead…
§ Industry margins
§ Cross-selling, cannibalization, diversion of scarce capacity…

2. Strategic How strong is the § Alignment e.g., fit with brand positioning & product range
(bene)fit strategic (bene)fit? § Competitive advantage or impact on competitive dynamics
§ How well option can adapt to changing circumstances
§ Quality
What
option(s) How feasible is it in § Capabilities, management bandwidth
should 3. Feasibility terms of skills & § Resources: financial, physical, etc…
we resources? § Availability and ease of ‘how to’ options
choose?

Can we manage the § Types of risk: country (PESTEL), financial, strategic, market
4. Risks key risks? (changes to Porter 5, competitive response), operational,
organizational, reputational, etc…
§ Risk assessment: probability of failure vs impact of failure vs
controllability/manageability
5. Opportunity Are there better
§ Attractiveness of alternative options
cost alternatives?

78
1. The 5 criteria
1. The criteria are only a starting point

ALWAYS TAILOR TO THE CASE:

§ Be specific (avoid generic):
– Tailor content & language to the case
– Drill down to Level 2 to highlight case-specific
The 5 criteria issues
are only a § Be flexible:
starting point
– Focus on most important criteria only
to structure
your thoughts – If helpful, combine two Level 1 criteria into 1
bucket, e.g. risks + alternatives into “other”
– If helpful, break up a criterion into two Level 1
buckets, e.g. “strategic benefit” into competitive
dynamics and long term growth potential
– Re-order buckets into a better story

79
1. The 5 criteria
1. Example Cousin MBA

§ Can they get job that improves career, e.g. acceleration, industry
Are there good pivot, etc…
career benefits?
§ Can s/he expect to learn valuable skills?
§ Can s/he expect to build a strong network?

Is there a good § What is the expected lifetime salary gain after the MBA?
return on § What is the foregone income during the MBA?
investment? § What are the fees?
Should
cousin do
an MBA?
§ Can s/he gain admission to a desirable program?
Is it feasible? § Can s/he finance it?
§ Can s/he obtain the required visa?
§ What will be the impact on family?

§ Risk of not obtaining desired job?

Are the risks
manageable? § Risk of not being able to return to current job?

81
1. The 5 criteria
1. Example Emirates-Etihad (exhaustive)

§ Will it improve the route networks, e.g. through complementarity

Does it make and/or rationalization
strategic sense?
§ Does Etihad have unique & valuable assets, e.g. frequent flyers,
traffic rights, etc…

What is the § What are the revenue synergies, e.g. greater pricing power
economic § What are the cost synergies, e.g. 3rd party spend
Should benefit? § Are there negative synergies and/or integration costs, e.g.
Emirates merging labor contracts
acquire
Etihad? § Will Abu Dhabi government allow it?
How feasible is it? § Will regulators allow it? What concessions will they demand?
§ Do they have the financial capacity? How will they finance it?
§ Do they have knowhow & resources to manage the integration?
(labor contracts, fleet integration, working methods)

§ Could the merger management process become excessively

Other issues to disruptive (labor issues)
consider
§ Are there better alternatives, e.g. Oman Airways

82
1. The 5 criteria
1. Questions with multiple options can also be
addressed through criteria

Questions with multiple options:

§ Should Emirates Airlines buy Etihad

Airways, Oman Air or Kuwait Airways? 1. Evaluate using
criteria 1-4
§ Should Toyota build in Rwanda, 2. Compare results
Burundi or Kenya? & recommend
§ Should my cousin do an MBA, EMBA or
simply continue to work?

83
1. The 5 criteria
2. 3Cs++ : Start with 3Cs and add additional
perspectives if helpful

Technique:
1. Start with 3Cs
2. Add perspectives from
additional stakeholders
(if helpful)

84
2. 3Cs ++
 2. Example 3C++ SuperSoda
§ SuperSoda is a Top 3 beverage
producer with several brands of
§ Is the market for sports drinks large and growing?
carbonated & non-carbonated Consumers – will
§ Does Electro-Light successfully target sufficiently large
drinks: enough of them buy segments?
– They lead their own brand this product? § Will the lower sugar content be an asset or liability?
design, marketing, and sales;
they have distribution
agreements with most major § What is the ideal distribution channel for this product?
Channels – can we sell
retailers § Are current retail outlets willing to add Electro-Light to
Electro-light through those product catalogs?
– They own the entire supply Should our current channels?
chain: production of SuperSoda
concentrates, bottling & launch
packaging (5 large plants), and Electro- § Which products will Electro-Light be competing with?
distribution to retail outlets Competitors – can we
Light? § Which companies are key in the market, and how will
outcompete them? they react?
§ They’re evaluating the launch of
“Electro-Light”, a new flavoured
Cost & Price
sports drink:
Company – can we § How profitable are sports drinks vs other SuperSoda
– Sports drinks are usually operate profitably? markets?
designed to replenish energy § Can we sell Electro-Light profitably at a price set by the
with sugars and electrolytes market?
§ What is the break-even point for Electro-Light?
– Electro-Light focuses only on
electrolyte replenishment: it Capabilities & Capacity
has a lower sugar content than § Do we have the necessary marketing & sales capabilities?
other sports drinks in order to § Does the product require specialized production,
capitalize on the recent trend packaging, or distribution?
away from high-sugar products § Can we accommodate Electro-Light in current production
& distribution facilities?
Should SuperSoda launch Electro-
Light?

85 Source: CraftingCases.com 2. 3Cs ++

2. Exercise: build the full structure

Should a major beer company start a direct-to-

home beer delivery operation in major cities?

Task:
§ Break down to Level 1 using 3Cs++
§ Make it case-specific
§ Avoid data mining J

86
2. 3Cs ++
2. Sample solution Beer Company

§ Do they currently get beer delivered? If not, is it lack

Customers – would they of supply or interest?
like this channel?
§ How satisfied are they with current delivery options?
§ How often do they drink at home?
§ Do they get delivery for other things?

§ How good are the current delivery services?

Competitors – can we
§ Can we compete with them given that we don’t carry
outcompete them?
our competitors’ beer brands?
Should a major beer
company start a § Can we stop supplying to them?
direct-to-home beer
delivery operation in § How will warehouse and logistics work?
major cities? Company – can we
§ How will we take orders?
operationalize this?
§ What should be our delivery terms?

Distribution channels – § Would supermarkets, convenience stores, etc…

does this negatively retaliate? What could be the impact?
impact our relationship
with them?

87 Source: CraftingCases.com 2. 3Cs ++

Which Options questions for practice at home

Your client is a hair products manufacturer struggling to grow. Should they enter
the sunscreen market?

ABC is a luxury boat manufacturer debating whether to offer a financing option to

customers in order to stimulate sales. They would do this on their own because
they haven’t found a bank willing to partner. Should they do it?

A bread division of a large food company is facing increasing competition in its

market and wants to know if it should exit the market. Should they?

Your uncle lives in a small town, retired one year ago and is bored to death. He
has savings of EUR 200,000 and is thinking about opening the town’s first pet
store. The investment required would be EUR 80,000. Should he do it?

88 Pairs: Solve together, communicate individually; Call on someone

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Today’s learning journey

Analytical techniques
derived from Business Logic

“How to”
Foundations: “Which
Communicate “How to” Questions
thinking options” Wrap-up
with impact Questions quantitative
analytically Questions
techniques

89
Overview of analytical techniques*
Type of question
Value Driver Trees
Numerical Technique
questions
Factoring

“How To” Components

Questions

Segmentation Motive & Ability

Behavioral
change
Influence Model
All questions Drivers
Analytical Other
techniques
Business process
derived from
Business Logic
Opposite words

5 criteria
Options
Questions
3C++

90 *Not MECE
RECAP: The methodical approach to structuring

Structure Analyze
Listen & recap Recommend
approach & solve

5+4 steps:

How to THINK:
1. Assess if Question is How To or Options
2. If How To, focus on key word(s) at essence of Question and Reflect
3. Select an analytical technique to break down the Question
4. Break down the Question analytically
5. Test logic & business sense with 3-part Health Check

How to COMMUNICATE:
1. Draw & show outline of your framework (e.g. Issue Tree)
2. Restate the Question
3. Executive Summarize & Number Things
4. Suggest where to begin

91
We’re almost done…

Analytical techniques
derived from Business Logic

Foundations: Change Change

Communicate Options Wrap-up
thinking Questions Questions
with impact Questions in style
analytically Numerical Conceptual

92
Bain video

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93 5:27
FEEDBACK
We covered a lot of ground today!

Analytical techniques
derived from Business Logic

“How to”
Foundations: “Which
Communicate “How to” Questions
thinking Options” Wrap-up
with impact Questions quantitative
analytically Questions
techniques

94
Structuring is a skill: build it by practicing!
Practice smart:
§ Do multiple drills – not full cases
§ Practice thinking AND communication
§ In pairs: more fun & higher ROI
§ Give each other feedback on both thinking (use Health Check)
and communication (techniques)

Suggested drills:
§ MECE: group & reorder “Top XX ways to …” lists
§ Factoring: use market sizing cases
§ Process-thinking: pick a business outcome from WSJ or FT and
reverse-engineer a process that could explain its occurrence
§ Segmentation: use the news to find “How to” questions
§ Motive & ability: use any social issue from the news (increase use of
masks, reduce street littering, etc…)

§ Options Questions: use regular cases and questions from the

news

95 FEEDBACK
96