Prep lounge Flashcards
Structure your thoughts
Issues Tree (Define/ Purpose) (2)
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An issue tree is a customized framework used to analyze the root causes of problems in a case
ere are two types of issue trees during case interviews:
- A problem-based tree can be used to determine the root cause of the problem and understand the “why” the problem exists.
- A solution-based tree can be used to determine the recommendation and understand the “how” to solve the problem.
issue tree is the foundation of all consulting projects
Once a new project starts, you draft an issue tree of the case problem right away as a team. As soon as you are aligned on all underlying sub-problems you force yourself to take a view and focus on the most important issues based on your hypotheses
Structure your thoughts
Solution Tree
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A solution-based tree can be used to determine the recommendation and understand the “how” to solve the problem.
Example: the primary issues lie in the speed and accuracy of calculations during interviews. Thus, the goal now should be to develop a solution-based issue tree to find potential solutions.
Structure your thoughts
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Structure your thoughts
What is MECE and how does it apply to issue trees
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MECE as a method should be used when you craft an issue tree for your case structure
* Segmenting information into sub-elements that are mutually exclusive and collectively exhaustive
* elements should “exclude” each other, i.e. be distinct, and should “exhaust” the relevant field, i.e. contain everything that belongs to it.
* help you avoid dependencies between different branches
Mutually Exclusive: aims at reducing complexity by avoiding overlaps. You need to make sure that the possible solutions or groups are not accidentally considered twice.
Collectively Exhaustive: aims at ensuring a comprehensive collection without leaving alternatives. Exhaustive means that all possible options have been considered.
MECE is a best practice method to lay down a robust structure for your case interview. MECE is also helpful for calculation. Many well-known frameworks, such as Cost-Benefit, 4Cs, Porter’s Five Forces are all designed with the MECE principle in mind.
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Pyramid Principle (Define)
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Use the pyramid structure to provide syntheses and recommendations at the end or in between your case interviews
The Pyramid Principle is a structure to present your synthesis in an effective and convincing manner. Here, you present your results first and then how you got there. This principle is of crucial importance in a consulting context where you need to bring across the most important messages as quickly as possible. Remember that due to time constraints a CEO is primarily interested in the “answer” and not in the process behind the answer.
The Pyramid Principle consists of three parts:
What – Why – How
What: Theory, hypothesis, recommendation, or conclusion
Why: The reasons
How: Elaborate on how you want to implement it
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Pyramid Principle (Example)
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Just as the above example, assume we have completed the analysis (note that the numbers in the example are hypothetical).
Question: Should the Whole Foods Market enter India?
Conclusion, after analysis in a pyramid format:
What:
Yes (notice that it is extremely important to answer the client’s question which is primarily a YES/NO answer, be direct!).
Our initial analyses show that the Wholefoods Market should enter the Indian market, specifically, they should concentrate on the urban areas of India.
Why:
(1) Market for organic/healthy food is growing at a rate of 10 % annually, which is faster than most developing countries of the world.
(2) Increasing disposable incomes of the customers align well with the premium pricing of the company’s products.
(3) The concept of organic food is getting a lot of influence from the western world, leaving more than ~1.5 billion dollars of untapped opportunity in India.
How (next steps):
Partnership with locals
Analysis of governmental regulations
Pilot study
You can also mention that the next steps would need further analysis to determine the most attractive option.
Key takeaway for the Pyramid Principle
Remember: What – Why – How
Pyramid Principle is a structure to present your synthesis in an effective and convincing manner
Structure your thoughts
Porter’s Five Forces (Define)
Porter’s Five Forces is the most common framework to assess a market’s a
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Use Porter’s Five Forces during structuring for a thorough market analysis
Porter’s Five Forces is an established framework to analyze a market. A market is defined as a specific industry that sells similar products.
Porter’s analysis is used to assess market attractiveness both for new entrants and existing companies. In general, the stronger the five forces are, the less attractive is the industry.
During increased competition, companies need more than usual resources to survive, which ultimately leads to less attractiveness. The following schematic shows the elements of Porter’s five forces.
