BS Compay

Question 1

The goal of asking?

What are the 7 Company Questions?

Answer 1

What are the 7 Company Questions?

Goal: Get a better understanding of the client as a business

1. Capabilities and expertise
   
   1. competitive advantage
      
      1. What do well?
      2. What do differently than the competition?
2. Distribution channels used
3. Cost structure
   
   1. more of a fixed cost business or more of a variable cost business?​
      
      1. Is it better to have higher fixed cost with lower variable, or vice versa.
         
         1. High fixed cost = barrier to entry
      2. compare to industry, often insightful
4. Investment cost (optional)
   
   1. only if case involves an investment decision
5. Intangibles
   
   1. e.g., brands, brand loyalty, culture, reputation
6. Financial situation
   
   1. Analyze sales and cost segmented
   2. Cash- investments
7. Organizational structure (optional)
   
   1. e.g., is team organization in conflict with how customers want to do business.
   2. Ex: We’re organized by product line, but customers want one point of contact across all product lines

Question 2

Why ask about capabilities and expertise? (2)

Answer 2

Why ask about capabilities and expertise? (2)

• Why: Gain insights what the company is good at (competitive advantage)
  
  • What do well?***
  • What do differently than the competition?***

Question 3

Why ask distribution channels company uses? (2)

Answer 3

Why ask distribution channels company uses?

• Why: how a company sells to its customers
  
  • Company’s distribution channel mix= the percentage of sales from each channel
  • Compare it to competitors’ mix and customers’ distribution channel preferences*

Question 4

Why ask cost structure? (3)

Answer 4

Why ask cost structure?

Why: helps define the strategic options that make sense for the client

• (cost portion of the profitability framework)
• More of a fixed cost business or more of a variable cost business?
  
  • Ratio of fixed costs to variable costs
• Comparison to competitors’ ratios
• High fixed cost = barrier to entry

Question 5

When to ask Investment cost? (optional)

Answer 5

When to ask Investment cost? (optional)

• reminder to consider investment costs when testing the hypothesis
• only if a case involves an investment decision/ ROI

Question 6

Why ask: Any Intangible assets related to their business?

Answer 6

Why ask: Any Intangible assets related to their business?

• Why: Understand how intangible assets impact business
• e.g. , brand loyalty/ Recognition, culture, reputation

Question 7

Why ask about the financial situation?

Answer 7

Why ask about the financial situation?

• Why: Understand historical financial performance
• Analyze sales and cost segmented
• Not relevant for market entry strategy

Question 8

Why ask org structure? (optional)

Ex: We’re organized by product line, but customers want one point of contact across all product lines

Answer 8

Why ask org structure? (optional)

Why: identify any conflicts between the structure and the strategy

• Important for execution
• e.g., is team organization in conflict with how customers want to do business.

Question 9

2 questions to always ask

Answer 9

competitive advantage

what do we do well?

what do we do differently from our competitors?