KONSULT

The Consulting and Strategy Interest Group, IIM Kozhikode

Adithya | Dheeraj | Kanikka | Payal | Shuba

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Porter’s Diamond Framework
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Porter diamond illustrate the determinants of national advantage and represents the national playing field that countries establish for
their industries

Firm
Firm Strategy, Structure, and Rivalry Strategy,
Govt.
Structure,
• Local conditions affect firm strategy andRivalry
Demand Conditions
• Low rivalry made an industry attractive. However,
over the • Demanding local market leads to national advantage
long run more local rivalry is better • Strong, trend-setting local market helps local firms
• Local rivalry forces firms to move beyond basic anticipate global trends
advantages that the home country may enjoy

Demand
Factor Conditions
Factor Conditions
Condition
• Country creates its own important factors Related and Supporting Industries
• Stock of factors at a given time is less important than • When local supporting industries are competitive,
the extent that they are upgraded and deployed firms enjoy more cost effective and innovative
• Local disadvantages in factors of production inputs
leads to innovation • This effect is strengthened when the suppliers
Related &
themselves are strong global competitors.
Supporting
Industries

Government's Role
• Encourage companies to raise their performance,
• Focus on specialized factor creation.
• Stimulate local rivalry by limiting direct cooperation and enforcing
antitrust regulations.
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Internal Environment: Resource Based View
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Resource:
All assets, capabilities, systems, processes, structure, firm attributes, information, knowledge etc. controlled by
the firm that enable the firm to conceive of and implement strategies that improve its efficiency and
effectiveness (Daft, 1983) (also understood as physical capital resources, human capital resources and
organizational capital resources)

Competitive Advantage:
A firm is said to have a competitive advantage when it is implementing a value creating strategy not
simultaneously being implemented by any current or potential competitors. (Barney, 1989)

Sustained Competitive Advantage:

A firm is said to have a sustained competitive advantage when it is implementing a value creating strategy not
simultaneously being implemented by any current or potential competitors and when these other firms are unable
to duplicate the benefits of this strategy. (Barney, 1989)
Not all resources create competitive advantages. Some are needed for the survival of a firm, for the firm to just
exist or be a going concern. They are important in their own way but not for fighting competition.
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3 Resource Pathways Framework

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Build (Organic Growth)

If your internal resources are capable of developing new set ofskill and achieve targeted growth

Borrow (Semi Organic Growth)

If it is more cost and time effective to take help of outside domain experts resources through alliances

Buy (Inorganic Growth)

If the targeted growth is critical and needs competitiveadvantage with major control on resources in short span
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Industry Analysis Example- E Commerce Industry
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Step 1: Conduct a generic study of an industry-

different sectors, growth rates, major players
E Commerce in the market,

Online Online Online Digital

Classifieds Retail Travel Download sites
There has been wide array of policy
Overview: Growth Rates(FY 11-16): Online

Geographic advantage
support in terms of SOP, taxes and FDI
Online travel-largest domestic travel market CAGR 30.6% encouragement
B2B e-Commercesegment-81% over Online retail growth at
revenues in 2011 39% over FY Online clasified
Revenue: USD17(2013) growth at 23% over FY Technology advances and declining prices
CAGR 54.4% over next 5 years of PCs. Tablet market increasing

Under- • Certain segments command a significant share of organized retail market are underpenetrated in the
penetrated online retail
segments • Food service and beverages are still at are at thenascent stage in the online retail world.

• COD is necessary evil. Though it has improved customers and volume, it has led to increase in
Payment landscape undergoing change
Better Payment transaction costs
options • Increase in Debit/Credit Cards usage will help e-commerce

More • Reduction in time of funding rounds

Investments • Vertically focussed niches are preferred investments for VC
Step 2: Determine drivers contributing to the growth
of the industry you can use PESTLE ,SWOT

There is no specific format unless mentioned to conduct an industry analysis. This is just an example illustrating what parameters can be included.
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Industry Analysis Example- E Commerce Industry
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Recent Trends in Ecommerce: Step 4: Identify recent

Step 3: Find out generic trends
news in industry like
and opportunities in the industry mergers, acquisitions
Development of new business models

Shifting to in house logistics Recent News

According to KPMG, Majority 80% of ecommerce

Hybrid of consignment-inventory model companies are in dire need of funds. Except for big
players only a few are able to generate funds

Rise of m-commerce
Mergers and Acquisitions
Emergence of e-mails and e-market place
Challenges in Ecommerce
Step 5: Study about
Improving the credit/debit card ecosystem in India challenges faced by
is pivotal in e-commerce. RBI should consider industry
mandating a certain quality service metrics to
ascertain the performance of payment service
providers
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Business Case
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❖ Business case is a business situation requiring strategy formulation in order to fix a problem. These cases
provide candidates the real flavour of consulting world in terms of the kind of work they can expect in the
industry

❖ You might be given a detailed problem statement supported by several facts or can be given one-liner
conceptual statement with very broad and abstract problem description

❖ A good approach would be to listen to introduction of the case carefully and think through the problem at hand.
Ask clarifying questions as and when necessary

❖ During the case, you should communicate explicitly what you want to do with the case. Remember that you are trying
to lead the interviewer through your problem solving approach and interviewer is interested in the approach than the
final answer

❖ You will be creating a framework to solve the case. Go over the framework at a high level with the interviewer and
then plunge into one area at a time. Use interim conclusions to sum up a section of analysis before moving on to
another area
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Business Case Example
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CASE: SATURATED TELECOM MARKET

The client is a telecom operator in India and wants to increase his revenues and grow in this saturated market. What would you advise?

Candidate: I would like to start by understanding the telecom market in India, looking at the revenue drivers and advise the client on which
ones he could use. I understand that the telecom sector works by hiring its services from tower operators and then use their own brand
name and services to generate revenues.

Interviewer: True. Our client too hires such service at market rates.

Candidate: Okay. Then I shall explore the meaning of saturated market. Has the client explored all geographies? Like the whole of rural
market? I recently read that we have about 680 million telecom connections. So, I believe there is still some untapped market to explore.

Interviewer: Right. There is an untapped market. Let us go on and say the rural market has been penetrated to the extent possible and they
have probably done what they could in that respect.

Candidate: Okay. So assuming a saturated market, we should look at increasing revenue from existing consumers. We could analyse the
existing calls being done and could think of schemes like STD call rate packages, local call packages, local and STD SMS packages that suit to
the area to increase per user usage. The idea would be to have lower rates more than compensated by higher usage.

Contd..
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Business Case Example
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Interviewer: Good, what else?

Candidate: We could look at various value-added services like revenues through internet services on mobiles. Having different plans and
offering better speeds, we can get more consumers to use internet on their mobiles. Also, with 3G technology, mobile internet will surely
be a huge source of revenues.

Interviewer: Good. Anything else?

Candidate: Also from games and applications. There are many businesses coming up in the area of mobile gaming and product
development of applications. We could buy them and use them as sources of additional revenue.
Interviewer: Okay, thanks for the inputs. We will now move to the next interview. Thanks for your time.

For more examples, visit the following links –

https://www.bcg.com/careers/path/consulting/practice-interview-cases.aspx
https://mconsultingprep.com/case-interview-examples/
https://www.caseinterview.com/case_interview_frameworks.pdf
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Guesstimates
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• A typical guesstimate question will require you to estimate a number by doing a rough calculation

• You are supposed to reach a final answer by using a series of narrowing assumptions. Your
assumptions should have a sound basis and you should be able to explain the logic behind your
assumptions

• These questions are different from the normal interview questions that you are used to. For the
guesstimate question, the focus is on the logical flow of arguments rather than the final answer

• Sample questions
o How many gallons of white paint are sold in India every year?
o What is the size of market for disposable diapers in Japan?
o How many weddings are performed in US each day?
o Estimate the total revenue obtained by movie ‘X-Men : Apocalypse’
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Example
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Estimate the number of handsets to be produced by a mobile company in a year

• State the approach/formula
• Proxy: Population of India – 1.3 billion
• State assumptions as you proceed:
• target population - Above poverty line (70%), below 14-yrs age (30%)
• rural : urban (70:30),
• frequency of change of handset (once in 3 years for rural & 1.5 years for
urban region)
• Calculations:
Target population = 70% X 70% X 1.3b = 637mn
Rural
Urban
Total Rural = 70% X 637 = 445mn
Total Urban= 30% X 637= 191mn
• Number of Households=445/5=89mn
Handsets/person = 1.5
• Penetration=2 per household
Total= 191 X 1.5= 286mn
Total=178mn

• No. of handsets = 178/3 + 286/1.5 = 55 + 176 = 250 mn mobile phones

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Must Do’s to nail a Guesstimate
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• Practice doing some guesstimate questions before the interview so that you are prepared. A pen and
Practice paper for the interview would be handy to keep track of your calculations.

• It will help to know a few basic facts to give you a starting point from which to make reasonable assumptions. It is a good idea to know
Know some basic some key country and city population estimates. Facts such as: Total World Population : 7.3 billion
facts Total India Population : 1.3 billion (18% of World)
Average Household size in India : 4.5

Use round • You are responsible for doing the calculations so pick numbers that are easy to work with. For example,
numbers estimate the population of America as 300 million not 309.3 million.

Take a moment • It is important to maintain your composure so before starting to answer the guesstimate question take a
moment to consider your approach.

Have a clear • It is important to have a clear approach to help you answer the question. You can take top-bottom or
approach bottom-up approach.
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Must Do’s to nail a Guesstimate
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Ask • Your interviewer may be able to provide you with direction. If the question is “How many ping-pong balls will fit
inside a 747?” the first question you might want to ask your interviewer is “What is the volume of a ping-pong
Questions ball?”

• The interviewer may not know the answer or may not want to give you direction so you’ll have to make
State Your assumptions. It is a good idea to clearly state your assumptions. For example, “let’s assume that the diameter of
Assumptions a ping-pong ball is 4cm. The formula for the volume of a sphere is 4/3.pi-r^3. The volume of a ping-pong ball
would therefore be about 11-pi centimeters cubed”.

Think Out Loud • The interviewer is trying to assess your thought process in getting to the answer, not the answer itself. If you
don’t think out loud, you make it difficult for the interviewer to give you points.

• As you make your way through the problem it is helpful to explain the logic behind each of your assumptions.
Explain Your logic Instead of saying “a 747 is about 100 meters long” you could say “I know that an average car is about 5 meters
long and based on my experience I would say that 20 cars lined up end to end would be about the same length
as a 747. So I will assume that a 747 is 100 meters long”.

Answer the • After doing all of the calculation remember to answer the question that has been asked.
Question
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