The goal of asking?
What are the 7 Company Questions?
What are the 7 Company Questions?
Goal: Get a better understanding of the client as a business
- Capabilities and expertise
- competitive advantage
- What do well?
- What do differently than the competition?
- competitive advantage
- Distribution channels used
- Cost structure
- more of a fixed cost business or more of a variable cost business?
- Is it better to have higher fixed cost with lower variable, or vice versa.
- High fixed cost = barrier to entry
- compare to industry, often insightful
- Is it better to have higher fixed cost with lower variable, or vice versa.
- more of a fixed cost business or more of a variable cost business?
- Investment cost (optional)
- only if case involves an investment decision
- Intangibles
- e.g., brands, brand loyalty, culture, reputation
- Financial situation
- Analyze sales and cost segmented
- Cash- investments
- Organizational structure (optional)
- e.g., is team organization in conflict with how customers want to do business.
- Ex: We’re organized by product line, but customers want one point of contact across all product lines
Why ask about capabilities and expertise? (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?***
Why ask distribution channels company uses? (2)
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*
Why ask cost structure? (3)
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
When to ask Investment cost? (optional)
When to ask Investment cost? (optional)
- reminder to consider investment costs when testing the hypothesis
- only if a case involves an investment decision/ ROI
Why ask: Any Intangible assets related to their business?
Why ask: Any Intangible assets related to their business?
- Why: Understand how intangible assets impact business
- e.g. , brand loyalty/ Recognition, culture, reputation
Why ask about the financial situation?
Why ask about the financial situation?
- Why: Understand historical financial performance
- Analyze sales and cost segmented
- Not relevant for market entry strategy
Why ask org structure? (optional)
Ex: We’re organized by product line, but customers want one point of contact across all product lines
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.
2 questions to always ask
competitive advantage
what do we do well?
what do we do differently from our competitors?
