What are the different areas you would look to help Real Food decide whether it should enter the US Frozen Food Market or not?
MARKET ENTRY FRAMEWORK A. Market attractiveness: 1. Financials 2. Customer segments 3. Product categories 4. Competition
B. Company’s ability to compete/win
- Finance
- Brand Relevance/Strength
- Skills, expertise, equipment
C. Market entry options
- Start from scratch
- Merger & Acquisition
- Joint venture
What are the different areas you would look at to help Revital decide how much it should charge for Vitalift?
PRICING FRAMEWORK
A. Competitive Products
- Prices
- Purchasing model
- Brand image
- Product quality
B. Customer’s willingness to pay
- Absolute value
- Relative value
C. Vitalift cost structure
- Cost: variable vs fixed
- Target Profit margin
What are the different areas you would look at to help Gymcube grow its profitability back to historical levels?
PROFITABILITY FRAMEWORK
π = Revenue - Cost
A. Revenues (R=Quantity*Price)
- NUMBER OF CUSTOMERS
a) Existing customers
b) Market size and competitor offering - PRICE
a) Our pricing
b) Competitor pricing
B. Costs (Fixed + Variable)
- FIXED COSTS
a) Real estate cost
b) Equipment cost
c) Staff cost - VARIABLE COSTS
a) Advertising and cost of acquiring new customers
b) Utilities
What is the challenge for a subscription business?
Retaining existing customers.
Always distinguish between two types of customers
- New customers who weren’t in the previous year
- Existing customers who will need to renew sometime
Company could be good at retaining customers but not attracting or it could be good in attracting but not retaining
What are the different areas you would look to identify the reasons behind Alsace’s market share decline?
RETAIL FRAMEWORK
A. Stores strategy
- Revenue per store
- Stores layout
- Location
- Opening times
- Experience
B. Products strategy
- Existing products price
- Existing products revenue
- New products
C. Communication strategy
- Brand
- Advertising
What are the different areas you should look into to decide if AQ should invest in Rebu or not?
PRIVATE EQUITY INVESTMENT FRAMEWORK
A. INDUSTRY’S MARKET ATTRACTIVENESS
- Size and growth
- Competition
- Regulations
- Culture
B. REBUS’ ABILITY TO WIN
- Customer base/usage
- Financial situation
- Future plans
- Management team
C. EXPECTED RETURN
- Company evaluation
- Type of investment
- Return on investment
- Risks
List all 8 frameworks you know
- Private equity/investment framework
- Market share decline framework
- Profitability framework
- Pricing framework
- Market entry framework
- Business Situation framework
- Increase profits framework
- Company - Customers - External environment
- Merger + Acquisition
State Private equity/investment framework
What areas to look to decide whether to invest?
PRIVATE EQUITY INVESTMENT FRAMEWORK
A. INDUSTRY’S MARKET ATTRACTIVENESS
- Size and growth
- Competition
- Regulations
- Culture
B. REBUS’ ABILITY TO WIN
- Customer base/usage
- Financial situation
- Future plans
- Management team
C. EXPECTED RETURN
- Company evaluation
- Type of investment
- Return on investment
- Risks
State Retail framework
Market share decline
Market Share decline FRAMEWORK
A. Stores strategy
- Revenue per store
- Stores layout
- Location
- Opening times
- Experience
B. Products strategy
- Existing products price
- Existing products revenue
- New products
C. Communication strategy
- Brand
- Advertising
State Profitability framework
grow profitability
PROFITABILITY FRAMEWORK
π = Revenue - Cost
A. Revenues (R=Quantity*Price)
- NUMBER OF CUSTOMERS
a) Existing customers
b) Market size and competitor offering - PRICE
a) Our pricing
b) Competitor pricing
B. Costs (Fixed + Variable)
- FIXED COSTS
a) Real estate cost
b) Equipment cost
c) Staff cost - VARIABLE COSTS
a) Advertising and cost of acquiring new customers
b) Utilities
State the Pricing Framework
PRICING FRAMEWORK
A. Competitive Products
- Prices
- Purchasing model
- Brand image
- Product quality
B. Customer’s willingness to pay
- Absolute value
- Relative value
C. Vitalift cost structure
- Cost: variable vs fixed
- Target Profit margin
State the Market Entry framework
MARKET ENTRY FRAMEWORK A. Market attractiveness: 1. Financials 2. Customer segments 3. Product categories 4. Competition
B. Company’s ability to compete/win
- Finance
- Brand Relevance/Strength
- Skills, expertise, equipment
C. Market entry options
- Start from scratch
- Merger and Acquisition
- Joint venture
State the Business Situation framework
Business Situation framework 3-5-5-5
A. CUSTOMERS
- Target Customers
- Customer Needs
- Sales channels
B. COMPANY
- Expertise - Structure
- Distribution
- Supply Chain
- Financials
- Costs
C. COMPETITORS
- Market share
- Behaviours
- Customers
- Barriers to entry
- Regulatory environment
D. PRODUCT
- Differentiating factors
- Substitutes
- Price
- Quality
- Lifecycle
State the Increase profits framework
- Increase revenue A. Find More Customers 1) Distribution 2) Marketing 3) New markets 4) New products B. Increase frequency of buying of existing customers C. Increase spending of existing customers
- Cut costs
A. Labour
B. Production
C. Finance
State the CCE framework
Company
Customers
External environment
State M+A framework
Follow business situation for company A, then company B then company A+B merged
A. CUSTOMERS
- Target Customers
- Customer Needs
- Sales channels
B. COMPANY
- Expertise - Structure
- Distribution
- Supply Chain
- Financials
- Costs
C. COMPETITORS
- Market share
- Behaviours
- Customers
- Barriers to entry
- Regulatory environment
D. PRODUCT
- Differentiating factors
- Substitutes
- Price
- Quality
- Lifecycle
State the different parts of the Mckinsey interview process and what to do
A. SITUATION
- Play back situation
- Emphasise key points
- Ask clarifying questions
B. FRAMEWORK QUESTION
- Ask for 60 seconds
- Break down situation in chunks
- Use chunks as areas with analysis
- Be specific to the company at hand!
- Tell interviewer which area should be prioritised and why
C. QUANTITATIVE QUESTION
- Data interpretation
1. Compare graphs
2. Draw key highlights
3. RELATE BACK TO ORIGINAL QUESTION
4. Suggest next analysis - Maths question
1. Map out calculation
2. Simplify numbers
3. Sense check result
4. RELATE BACK TO ORIGINAL QUESTION
5. Suggest next analysis
D. CREATIVITY QUESTION
- Ask for 60 seconds
- Draw mini framework
- Be specific and creative
- Prioritise by ease/impact
E. RECOMMENDATION
- Say conclusion first
- 3 Supporting arguments
- Explain Risks
- Say next steps
Should sunshine launch online service?
- Customer demand
- Operational demand
- Economics
