FRAMEWORKS IN DEPTH
MBA CONSULTING CLUB SEPTEMBER 7, 2011
AGENDA
Deloitte Feedback Frameworks Overview Practice Scenarios Next Steps
DELOITTE WHATD YOU THINK?
FRAMEWORKS OVERVIEW
General Frameworks
3 Cs 4 Ps 5 Forces 7 Ss BCG Matrix Value Chain External/Internal
12 Case Scenarios
8 Strategy 4 Operations
Ask yourself,
What kind of case am I working on? What are the case questions I need to answer? What key information do I need in order to answer these questions? Then, What frameworks could I use to best explore and explain the case?
Waterfall Roll Up
Costs
Market entry Volume and growth
Cost Cut
Harvest
Reap profits from cash cow
3 CS
Company
How big? ($2.8 Billion helicopter manufacturer) Public or Private? Products or services? Markets? Who are biggest competitors? Market share? How has market changed? Differentiation? Strategic advantage? Who? What do they want? Needs fulfilled? Increase base? New customers? Losing customers? Why, who? (High volume callers, vs low volume)
Competition
Customer
4 PS
Product
What are they? Companys niche?
Price
Compared to competition? How determined? Priced correctly? Volume effects? Price-based costing vs. Cost-based pricing Supply Chain? Channels? Competition in areas we are not? Prime locations? Political barriers?
Place
Promotion
How to market? Which market? Advertising?
PORTERS 5 FORCES
BCG MATRIX
Margins and cash generated are a function of market share. Growth requires cash input to finance assets. High market share must be earned or bought.
7 SS
Goal is to help managers analyze their organizations and effectiveness. These are what make and organization successful.
VALUE CHAIN
A value chain is a chain of activities for a firm operating in a specific industry. The business unit is the appropriate level for construction of a value chain, not the divisional level or corporate level.
EXTERNAL VS. INTERNAL FACTORS (MARKET ENTRY)
External
Market size, growth rate, stage, technology Customers - segmentation Industry barriers, suppliers, substitutions Competitors players and share, SWOT, niche? Risk market, technology, regulation, foreign (ex rates)
Internal
Strategy fit, core competencies Operations
Marketing and Sales Operations and Logistics Finance and Control Organization and culture R&D
SOME PRACTICE SCENARIOS
DO WE ENTER A NEW MARKET?
Major Players and Market share
Current Market
Product Differentiation
Size Barriers to Entry Growth Rate Customer Segmentation
Entering
If yes, How?
No
Start from scratch Acquisition Joint Venture
Cost Benefit Analysis of each
OUR CLIENT IS THINKING OF ACQUIRING A DIVERSIFIED COMPANY WITH HOLDINGS IN 3 DIFFERENT INDUSTRIES ONE IS ENTERTAINMENT. OUR CLIENT KNOWS NOTHING ABOUT ENTERTAINMENT. WHAT DO WE ANALYZE?
Life Cycle Performance Drivers Clients Position Major Players Industry Changes Profitability, Margins How Many? Product Availability Activity, Changes? Players entering or leaving? Mergers and Acquisitions Barriers to entry / exit Substitutes?
Current Market
Industry Analysis
Suppliers
Future
OUR CLIENT MANUFACTURES HIGH-END ATHLETIC FOOTWEAR. SALES ARE UP BUT PROFITS ARE FLAT. WHAT DO WE NEED TO LOOK AT?
Examine External / Internal Factors
Analyze Revenues
Revenue streams? % of total revenue per stream? Balance in %? Changes? Why? ID major costs Major shift in costs? Anything seem out of line? Benchmark against competitors
Analyze Costs
Volume
Expand into new areas Increase sales force Increase marketing Reduce prices Improve customer service
NEXT STEPS