“It’s all about the right plan”

CONSULTING FRAMEWORKS
Q. Suppose you go to a market where there
are 4 pizza outlets, what factors will you
consider before selecting one of them?
Q. Assume your client is the owner of a social
ed-tech start-up who wishes to provide
courses to underprivileged at subsidised rates,
he wants you to do a feasibility check for a
district in Uttar Pradesh ?
 Type of Analysis
In any corporate strategy project, you are required to analyse the different external and internal situations

External Situation (E) Internal Situation (I)

Area

E.1 Market E.2 Competitive I.1 Business Model I.2 Risks and Growth
Analysis environment Analysis Opportunities Financials (F)

● Market Type ● Competitive ● Customer ● Company business

● Industry size, intensity and satisfaction plan analysis
strategies level ● Revenue Projection ● Assessment and
growth
Type of Analysis

● Competitor ● Revenue and EBITDA prioritization of

● Market
positioning volatility ● Company specific potential exit options
penetration
● Cost/margin ● Sales force cost drivers ● Evaluation and risk
● Value chain
benchmarking productivity ● Vertical/horizontal assessment of
● Regulatory
● Price ● Production integration option available exit options
threats
● Product benchmarking and IT assessment
substitution ● Market entry diagnosis ● Geographical
conditions ● Cost curve expansion
What are CONSULTING frameworks?
Frameworks are nothing but a structure to your proposed solutions. It gives a sense of direction to
your case problem and helps you analyse the facts better.

Why to use? Why not to? Where to use?

➔ Help you to structure ➔ Case Competitions

your answers ➔ Rigidity ➔ Projects
➔ Builds the skills of ➔ Complexity makes you forget ➔ Case Interviews
articulation
 INDEX

Framework Relevance Goal

1 5-C Situation Analysis E.1, E.2, I.1, I.2 Assessing overall situation affecting company

2 Entry/Exit Barriers E.1 New entrants or business leaving the market

3 Competitive Landscape E.2, I.1 Competitive positioning (Benchmarking)

Balanced Scorecard Tool Measuring the performance of management

● BCG Growth Matrix

● Porter’s 5 forces
● Break Even Analysis ● Ansoff Matrix

Additional Concepts
● Fixed and Variables Costs Other frameworks ● McKinsey 7S Framework
● Net Profit Margin ● Value chain
● ROI ● Value drivers
● VRIO Analysis
5C Situation Analysis
● Distributors
● Suppliers
● Alliances
● Ex. McDonald’s Franchise model
( Key factors needed for success )
● Who are we taking into account?
● What do we know about them?
● What’s our USP? ● How do we connect to them?
● Strengths and weakness ● Personal engagements
● Product offerings ● Need and their demand
● Brand Image Collaborators ● Ex. Starbucks Rewards
● Ex. FB portfolio diversification

Customers

Corporation Competitors
● Who are we up against?
● Economic environment ● Core strengths
● Political and regulatory ● Objectives & Values
environment ● Price point
● Social and cultural environment Context ● Market Share
● Ex. IKEA Sustainability aim by ● Product differentiation
2030 ● Ex. Canon, Nike, Sony

Primary goal: Interest of the customers should be taken care of, not of the shareholders
5C Situation Analysis
This analysis gives a deep understanding about the external and internal
factors of the market environment, customer and company abilities

Company Competition Customer

➔ Product/service offering ➔ Competitor mix/make-up ➔ Customer mix

Pros and cons Market share Demographics (age, gender, etc.)
Value Chain Fragmentation Value of core customers
Financial situation (for example, deep Wants and needs of customers
➔ Profitability Analysis pocket competitors?)
Management ➔ Key drivers of customer decisions
Revenue (price x volume) and
Other competencies (for example, Price
expenses
marketing or distribution channels) Product characteristics
➔ Other company factors Brand
Capacity Personnel (especially for B2B)
Core competencies ➔ Competitor products/service
Regulatory environment Value proposition versus client
➔ Position with customer segments
Distribution network Value chain
Customer segment sizes
Management and core employees Customer segment share
Other Customer growth rate
5C Situation Analysis Let us take an example

Customer

Company
Climate/Context

Collaborators
Competition
5C Situation Analysis Let us take an example

Customer

Consumed by all segments

and demographics
Company
Climate/Context
● One of the biggest beverage
brands People prefer health options, coca
● Portfolio of brands like Sprite, cola produces diet and zero versions
smart water, etc.
● Present in most of the world

Collaborators
Competition
Bottling, sourcing and
Pepsi being the biggest with ingredients
local competition
 Enter/Exit Barriers
Helps to determine the strength of competition in an industry. It also tells
about the likelihood of new entrants and businesses leaving the industry

Exit barriers keep companies in market despite low negative

The number of entrants into an industry is returns. There can be economic, strategic or emotional factors
reduced if there are high barriers that keep companies compete even with negative ROI

Potential entrants Barriers to entry Market Exit Barriers

● Economies of scale ● Specialised assets

● Product differentiation ● Fixed costs of exit

● Capital requirements ● Strategic

inter-relationships
● Switching costs
● Emotional barriers
● Property rights
● Government/social
● Government Policy restrictions
Enter/Exit Barriers EXHIBIT
Enter/Exit Barriers Let us take an example (Entry Barriers)

Social Media Clothing

Coffee shop Newspapers

Enter/Exit Barriers Let us take an example (Entry Barriers)

Social Media - Difficult Clothing - Easy

Coffee shop - Easy Newspapers - Difficult

Enter/Exit Barriers Let us take an example (Entry Barriers)

Social Media - Difficult Clothing - Easy

● If you have a niche group

● Niche market
● Hard to displace players like
● Economies of scale is less
Facebook, Instagram
● Word of mouth and personal
● Network with the most users
recommendations for marketing

Coffee shop - Easy Newspapers - Difficult

● Lower entry costs ● Strong brand loyalty

● Brand loyalty isn’t everything ● Industry is in decline
● May be fed up customers from ● Economies of scale
big players like Starbucks, CCD ● Paying journalists and printers
for a small national circulation
Competitive Landscaping Understanding your competitors is the best way to
leverage the opportunities in the market

● Identify key competitors - divide them into

Primary (Direct), Secondary
(Direct-Indirect), Tertiary (Indirect)
● Set the parameters to benchmark your
product against their
● Analyse their key potential - Monitor
trends, social media, marketing, offers
● Evaluate pricing
● Determine your position
● Take steps to solve

Tools to use
- Pi Datametrics (Analyse rising trends)
- SimilarWeb (Overview of Website Traffic)
- Kompyte (Record competitors to track)
- SEMRush
Competitive Landscaping Perceptual Map

High Quality
Useful for understanding how the customers
perceive your product offerings in relation to ABC Co.
Brand 5
your competitors. It helps to identify the
gaps to reach the targets.
Brand 1 ABC Co.

High Cost
Low Cost
● Identify key attributes that relevant for
your market and set them on the axis
Brand 2
● For a single brand, you may have multiple
Brand 3
perceptual maps on varying axis
Brand 7
● Good way to represent is to put the logo of
Brand 4
the brand next to the dots Brand 6
● You can also show where you want your
brand to move
Low Quality
Competitive Landscaping

Let’s take an example and solve it right away

● Identify competitors and

make a landscape

● Draw a perceptual map

Balanced Scorecard
A Balanced Scorecard defines an organization’s performance and measures
whether management is achieving desired results. The Balanced Scorecard
translates Mission and Vision Statements into a comprehensive set of
objectives and performance measures that can be quantified and appraised.

Measures How it works? Used to?

● Financial performance (revenues, ● Articulate the business’s vision and ● Clarify a business’s strategy
earnings, return on capital, cash flow) strategy ● Link strategic objectives to
● Customer value performance (market ● Identify the performance categories long-term targets and annual
share, customer satisfaction measures, that best link the business’s vision budgets
customer loyalty) ● Establish objectives that support the ● Track the key elements
● Internal business process performance business’s vision and strategy ● Incorporate strategic objectives
(productivity rates, quality measures, ● Develop effective measures and into resource allocation
timeliness) meaningful standards processes
● Innovation performance (percentage of ● Ensure company wide acceptances ● Facilitate organizational change
revenue from new products, employee ● Create appropriate budgeting, ● Compare performance of
suggestions, rate of improvement tracking, communication geographically diverse business
index) ● Collect and analyze performance data units
● Employee performance (morale, ● Take action to close unfavorable gaps ● Increase company wide
knowledge, turnover, use of best understanding of the corporate
demonstrated practices) vision and strategy
Balanced Scorecard

EXHIBIT
Balanced Scorecard Time for an example

Draw a balanced scorecard for

an E-Commerce Business
 Additional Concepts

Break Even Point Fixed and Variable Costs Net Profit Margin

● Break-Even Point is the number of ● Fixed costs remains same no matter ● Net Profit Margin = Net
units sold at which Revenue equals how much a company produces Income ÷ Total Revenue
Total Expenses (Fixed Expenses ● Variable costs vary with the ● Gross Profit Margin = Gross
plus Variable Expenses). amount of output produced Profit ÷ Total Revenue
● Whether to develop a new product/ ● VC may include labour, commission, ● Operating Profit Margin
Make a capital equipment raw materials (EBIT Margin), or EBITDA
investment /Making decisions ● FC may include rental payment, Margin
around how to price products and insurance, and interest payments
service /Number of units to ● For example, X company produce a
ROI
produce. bucket for Rs. 10 per piece, 500
● Break-Even Number of Units = units will have VC, Rs. 5000 while if ● Return on Investment (ROI) is a
Fixed expenses ÷ (Revenue per unit it pays a fixed rent of Rs. 10,000, it ratio that determines the return,
– Variable Expenses per unit). will have to pay regardless of the or Profit, from capital invested
● Revenue per unit – Variable production of the buckets ● Profit from the Investment
Expenses per unit) = Contribution (Revenue minus Costs) ÷ Capital
margin per unit Invested
It’s Play Time
 Question 1

Q. Which is the framework used to study the environment in the 5C Analysis?

❏ SWOT
❏ PESTLE
❏ VRIO
❏ 4Ps
❏ BCG Matrix
 Question 1

Q. Which is the framework used to study the environment in the 5C Analysis?

❏ SWOT
A PESTLE analysis is a framework to analyse the key factors (Political, Economic, Sociological,
❏ PESTLE Technological, Legal and Environmental) influencing an organisation from the outside. It offers people
❏ VRIO professionals insight into the external factors impacting their organisation

❏ 4Ps
❏ BCG Matrix
 Question 2

Q. Parth is incharge of a project where he has to calculate the break even quantity for a
company dealing in water bottles. He determines fixed cost to be Rs. 1,00,000. Variable
cost with the product is Rs. 2 per unit and it is sold at a price of Rs. 12. What will be his
final answer?

❏ 100
❏ 10,000
❏ 10
❏ -10,000
❏ 1,000
 Question 2

Q. Parth is incharge of a project where he has to calculate the break even quantity for a
company dealing in water bottles. He determines fixed cost to be Rs. 1,00,000. Variable
cost with the product is Rs. 2 per unit and it is sold at a price of Rs. 12. What will be his
final answer?

❏ 100
❏ 10,000 Break even quantity = 1,00,000 / (12-2) = 10,0000
❏ 10
❏ -10,000
❏ 1,000
 Question 3

Q. Swiggy and Zomato and market leaders in food delivery in India but do their
businesses intersect with each other?

❏ Yes, then why

❏ No
 Question 3

Q. Swiggy and Zomato and market leaders in food delivery in India but do their
businesses intersect with each other?

❏ Yes, then why Food delivery, cloud kitchen (Swiggy access, Zomato kitchens)
❏ No
 Question 4

Q. Aryan wishes to study the perception of consumers in the automobile industry. What
sort of a map should he use to identity the competitors in the market?

❏ ………………...
 Question 4

Q. Aryan wishes to study the perception of consumers in the automobile industry. What
sort of a map should he use to identity the competitors in the market?

❏ Perceptual Map
 Knowledge Bank

Read and learn

● Barriers to entry - https://www.investopedia.com/terms/b/barrierstoentry.asp

● Perceptual mapping-
https://blog.alexa.com/perceptual-mapping/#:~:text=Perceptual%20mapping%20is%20a%20visual,also%20known%20
as%20positional%20mapping.&text=Perceptual%20mapping%20utilizes%20customer%20input,service%20from%20th
e%20customer's%20perspective.
● Competitive Analysis - https://www.crayon.co/blog/competitive-landscape-analysis-free-report
● 5C Situation Analysis - https://corporatefinanceinstitute.com/resources/knowledge/strategy/5c-analysis-marketing/
● Barriers to Exit -
https://www.investopedia.com/terms/b/barriers-to-exit.asp#:~:text=Key%20Takeaways-,Barriers%20to%20exit%20a
re%20obstacles%20or%20impediments%20that%20prevent%20a,write%2Doffs%20and%20closure%20costs.
● Break Even Point -
https://www.investopedia.com/terms/b/breakevenpoint.asp#:~:text=The%20breakeven%20point%20is%20the%20lev
el%20of%20production%20at%20which,same%20as%20its%20original%20cost.
● Net Profit Margin - https://corporatefinanceinstitute.com/resources/knowledge/finance/net-profit-margin-formula/
● ROI -
https://www.investopedia.com/terms/r/returnoninvestment.asp#:~:text=Return%20on%20investment%20(ROI)%20is,
relative%20to%20the%20investment's%20cost
 Knowledge Bank

Watch and learn

● Competitive Analysis Framework- https://www.youtube.com/watch?v=G2kpQGNxkRc

● Competitive Analysis - https://www.youtube.com/watch?v=C91utiNU0cI
● 5C Situation Analysis - https://www.youtube.com/watch?v=UIK1xmAMZWE
● Barriers to Entry - https://www.youtube.com/watch?v=Jx8fEumsbQo
● Barriers to Exit - https://www.youtube.com/watch?v=s713keGE6b4
● Break Even Point - https://www.youtube.com/watch?v=vUT8lZLZpKg
● Net Profit Margin - https://www.youtube.com/watch?v=esdCHrh40Sc
● ROI - https://www.youtube.com/watch?v=AvfXyuiBn2o

Download and learn

● CVP Analysis - https://corporatefinanceinstitute.com/resources/templates/excel-modeling/cvp-analysis-template/

● 5 Situaltion Analysis -
https://d2myx53yhj7u4b.cloudfront.net/sites/default/files/IC-Marketing-Processes-5C-Analysis-Template-PDF.pdf
● Competitor analysis - https://www.aha.io/roadmapping/guide/templates/competitor-analysis
Thank you for your time!