Top 7 Case Interview Frameworks (And How To Create Your Own) - IGotAnOffer

9/14/23, 8:54 PM Top 7 case interview frameworks (and how to create your own) - IGotAnOffer
Coaches Articles
Top 7 case interview frameworks (and

how to create your own)
CRACK THE INTERVIEWS JUN 09, 2022
Today we're going to cover the top case interview frameworks, as well as how you can
create your own custom frameworks.
Understanding frameworks has always been critical for the 8,000+ candidates who we've
helped with consulting interview preparation.
And one of the first things you'll want to know is that you should AVOID using pre-made
frameworks, like those recommended in Case in Point and in Victor Cheng's LOMS
programme. But more on that later.
Let's start with the list of top frameworks.

Table of contents
Top 7 frameworks for case interviews
Practise with MBB ex-interviewers
https://igotanoffer.com/blogs/mckinsey-case-interview-blog/118288068-case-interviews-frameworks-comprehensive-guide#porter 1/18
1. Profitability
2. 4Ps
3. Porter's 5-forces
4. 3Cs
5. Market entry
6. Pricing
7. Merger and acquisition
Don't reuse pre-existing frameworks
How to create custom frameworks
Click here to practise 1-on-1 with MBB ex-interviewers
Top 7 frameworks for case interviews
1. Profitability framework
The profitability framework is the most basic framework in business analysis. It simply
breaks down profit into its basic revenue and cost components and is commonly used to
identify the root cause of profitability issues.
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Revenue can simply be broken down into the Number of Units Sold x Price Per Unit.
Costs can be broken down into Variable and Fixed Costs. And Variable Costs can be
further broken down into the Number of Units Produced x Cost Per Unit.
2. The 4Ps framework

The 4Ps framework is widely used by company executives to design their marketing
strategy. There are different variations of this framework, which is also sometimes
referred to as the “Marketing mix” framework, but the 4Ps is the most common one.
This framework is commonly used when launching a new product or when reviewing the
positioning of an existing product.
Product: What are the key characteristics of the product sold? Key elements of the
product definition could include: customer need fulfilled by product, product usage
(E.g. who, where, how, etc.), good vs. service, product lifecycle (new vs. established),
competing products and substitutes, etc.
Price: At what price should the product be sold? Different considerations need to be
taken into account here: the customer perceived value of the product, the price of
competitive products, the customer price sensitivity, the cost of producing the
product, etc.
Promotion: Which promotion strategies should be used to sell the product? Key
Tableelements
of contentsto consider include: promotion messages, media type (E.g. TV, social media,
radio, etc.), best time to promote, competitors’ strategies, etc.
Place: Through which channels should the product be distributed? Key elements to
consider include: possible channels to distribute the product (E.g. in store, web, mail-
to-order, etc.), customer expectations in terms of channel, requirement of a sales
team or not, competitors’ strategies, etc.
3. Porter's 5 forces
Porter’s 5 forces is a framework commonly used by CEOs to explore the competitive
dynamics of industries. Indeed not all industries are structured the same way.
Some industries are really hard to get into (E.g. banking) while others have very low
barriers to entry (E.g. newspapers).
Suppliers have strong bargaining power in some industries (E.g. high-end medical
equipment) but little power in others (E.g. small milk producer), etc.
Understanding these dynamics is extremely important when you're considering entering

a new industry or when assessing the competitive dynamics of the industry a company
is already in.
Bargaining power of customers: How much bargaining power do customers have?

If there is only one buyer but multiple suppliers, then that buyer will be at a strong
advantage. Key elements to consider here include: customer concentration
(percentage of industry revenues from Top 3 buyers), customer price sensitivity,
Tablecustomer
of contentsinformation availability, etc.

Bargaining power of suppliers: How much bargaining power do suppliers have?

Similarly to the previous point, if there is only one supplier but multiple buyers, then
that supplier will be at a strong advantage. Key elements to consider include:
concentration of suppliers (percentage of industry revenues to Top 3 suppliers),
difficulty of switching from one supplier to another, differentiation between
suppliers, etc.
Threat of substitutes: What are the substitutes for the product and are they
increasingly popular? As a reminder, water is a substitute for Coke while Pepsi is a
competitive product for Coke. Key elements to consider here include: potential new
substitutes, ease of substitution, evolution of customer propensity to substitute, etc.
Threat of new entrants: How difficult is it to enter the industry for potential new
players? Key elements to consider here include: regulation authorisations, capital
requirements, economies of scale, network effects, etc.
Existing rivals: How competitive are existing rivals in the industry? Key elements to
consider include: number of competitors and their market shares, similarity between
their products and products of the firm analysed, financial health of competitors, etc.
4. 3Cs framework
The 3Cs framework is also commonly used to put together strategies for companies. As
you will notice below, a lot of its components overlap with the Porter’s 5 forces.
TableCustomers
of contents : Who is the customer? Key elements to consider include: customer
demographics (E.g. age, sex, income, etc.), customer needs, customer segments' size
Practise
and growth rates, customer with MBB
willingness ex-interviewers
to pay and price sensitivity, etc.
Competition: What are the competitive dynamics? Key elements to consider include:
competitors’ value proposition and brand, competitors’ market share and growth,
competitors’ financial health, etc.
Company: What defines the company? Key elements to consider include: product
offering, profitability, core competencies, unique selling point, financial performance
and resources, etc.
5. Market entry framework

The market entry framework is commonly used to make decisions on whether a
company should enter a new market or not.
For instance, you could use it to decide if Starbucks should enter the Chinese market, or
if Nike should enter the sports broadcasting business.
Market: What are the characteristics of the market we are trying to enter? Key
elements to consider include: market size and profitability, products already available
in the market, intensity of the competition, heaviness of the regulation, etc.
Client capabilities: Does the client have the right capabilities to enter that new
market? Key elements to consider include: differences between the client's current
market and the new one they are now targeting, number of times client has entered
new markets and achieved success, other companies already in the new market, etc.
TableFinancials
of contents: Does it make financial sense to enter the new market? Key elements to
consider include: current financial situation of the client, cost to enter the new
market, ongoing costs once the market is entered, expected revenues and return on
investment, etc.
Entry strategy: How should the client go about entering the new market? Key
elements to consider include: timing of market entry (now vs. delay), speed of market
entry (test region vs. whole country), opportunity to buy competitor or do a JV,
management approach (control from HQ vs. decentralise), etc.
6. Pricing case framework

Companies always face a difficult issue when launching a new product or service. What
should its price be? The pricing framework is extremely helpful for answering that
question.
Cost-based: What price do we need to set to cover all our costs? Key elements to
consider include: fixed costs and their allocation across products, variable costs and
number of units produced / sold, profitability targeted, etc.
Value-based: How much are customers willing to pay for our product? Key elements
to consider include: price of the next best alternative to our product, features that
make our product better than the next best alternative, value of these features, etc.
Competitor-based: What is the competition charging for similar products? Key
elements to consider include: available substitute products from the competition,
price of these substitute products, value of our product vs. substitutes, etc.
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Overall strategy: Given the elements above, what should our pricing strategy be?
Key elements to consider Practise
include:with
objective of the pricing strategy (E.g. high
MBB ex-interviewers
profitability or high market share), opportunities for upsell / cross-sell that should be
taken into account (E.g. Kindle and ebooks), possibility to sell different versions of the
same product (E.g. iPhone 13 and iPhone 13 Pro), etc.
7. Merger and acquisition framework

Finally, the merger and acquisition framework is used when companies are looking to
acquire or merge with competitors.
These situations are not very frequent in a CEO's life, but they are highly stressful,
which is one reason why consultants are often asked to support such initiatives.
The market: What are the characteristics of the target company's market? Key
elements to consider include: market size and growth, market profitability and
intensity of the competition, market regulation, etc.
The target: How attractive is the target to be acquired? Key elements to consider
include: current and future financial position of the target, important assets or
capabilities owned by the target, quality of the target's management team, target /
buyer culture fit, etc.
The buyer: What's driving the buyer to make the acquisition? Key elements to
consider include: acquisition rationale (E.g. target undervalued, etc.), acquisition
financing, buyer's acquisition experience, acquisition timing, etc.
TableSynergies
of contentsand risks: What are the acquisition synergies and risks? Key elements to
consider include: value of individual and combined entities, cost synergies, revenue
synergies, biggest risks of Practise
failure, with
etc. MBB ex-interviewers
Don't reuse pre-existing frameworks

Once you are generally familiar with frameworks, the question becomes: how do you
actually use frameworks in case interviews?
There are a lot of opinions about how you should do this on the Internet. But the two
main schools of thought are Marc Cosentino’s Case In Point and Victor Cheng’s LOMS.
But both of these methods share the same flaw: they try to force pre-defined
frameworks onto cases. In our experience, this is bound to produce average results
because all cases are unique.
Not convinced? Let's cover each of these two popular methods in more detail.
Why NOT to use the Case In Point frameworks

In Case In Point, Marc Cosentino attempts to classify case interviews into 10+ categories
and then suggests that candidates should memorise a specific framework for each of
them.
This is an interesting exercise as it exposes you to a range of business problems and

helps you think about them in different ways. However, in our experience, learning 10+
frameworks is difficult and time consuming.
More importantly, in live case interviews, trying to recognise one of the 10+ case
categories and then remembering the associated framework is a real nightmare!
Instead of focusing on solving the problem at hand, you end up trying to remember a
framework that will not even perfectly fit the case you are solving. In our experience, the
best candidates avoid this strategy.
Why NOT to use Victor Cheng's LOMS frameworks

In his LOMS programme, Victor Cheng advocates for a much simpler method and
suggests you should only learn two frameworks: the profit framework for profitability
cases, and a general framework for all other cases (Product, Consumer, Company,
Competition).
The benefit of this approach is its simplicity. It gives you a starting point that’s easy to
remember when you are putting a framework together.
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However, in our experience, this approach has a fatal drawback. In practice, there aren’t
that many profitability cases, and you basically always end up using the general
framework.
Even if you adapt this general framework, it won't be perfectly tailored to the case you
are trying to solve. More importantly, your interviewer will quickly realise that you are
using a pre-made framework and that will reflect negatively on you.
Why to create custom frameworks instead

A good framework is a bit like a tailor-made suit: it is adapted to the problem you are
trying to solve, the company, the industry, and it is also as MECE as possible.
If you use pre-existing frameworks, you run the risk of missing important elements of
the specific problem you are trying to solve. In real life, consultants rarely use pre-
defined frameworks. They are familiar with them, but they do not directly re-use them
as-is on projects.
Instead, they create a customised framework or issue tree that addresses the specific
details of each case. To do so, they rely on conversations with their client as well as past
experiences.
This might sound intimidating, but the good news is that creating custom frameworks is
actually much simpler than you might think.
How to create custom frameworks

Now, let's turn our attention to HOW you can create your own custom frameworks
during case interviews.
Here's a brief summary of the steps you'll need to take:
Summary - IGotAnOffer method (framework

development questions)
Step 1: Ask for time to gather your thoughts
Step 2: Create the framework
Extract the main elements from the case question
Table of contents
Break down the mainPractise
elements into components
with MBB ex-interviewers
Step 3: Communicate the framework

Spin your paper around
Begin with an overview
Highlight 3-5 considerations for each branch
Summarise your points
Prioritise next steps
Now let's cover these steps in more detail. We'll also be digging into a real case example
below, in order to illustrate the framework creation process.
1. Ask for time to gather your thoughts

Regardless of the case you get, you should always ask your interviewer for some time to
gather your thoughts, before you begin to develop the framework.
This is a normal part of the interview process. Your interviewers will expect you to ask,
and they'll almost always give you this time.
But don't get carried away!
For reference, you should only take 30-60 seconds to quietly think-through your
framework. We recommend that you also sketch out your framework on a piece of
paper during this time, as that will help you to organise your thoughts more clearly.
Without practise, it's really difficult to estimate how long 30-60 seconds actually is, so we
highly recommend that you practice this process with a stopwatch. This exercise will
help you get a clear idea of how much time you're actually using.
2. Create the framework

During that 30-60 second time window, you'll need to do the real work of crafting your
framework.
The essence of framework creation is actually quite simple. A framework takes the
business situation presented in the case, and breaks it into smaller "bite size" pieces.
Table of contents
By isolating the various components of a case, you'll be able to better identify the root
cause of an issue, or find the Practise
best opportunities for improving the underlying business.
with MBB ex-interviewers
And the best way to develop your framework creation skills is with practice on realistic
case problems, so let's walk through an example together.
Star Production case example

Star Production is a start-up that produces low-cost movies. Two university friends
created the company after watching “Paranormal Activity”, a low-budget movie that
attracted a larger-than-expected audience.
Very few low-cost movies end up being very successful. Star Production is hoping to
generate profits by producing a large number of low-budget movies and betting that
some of them become very successful. The company forecasts that most of its movies
will be loss making but that a few of them will be big financial hits.
Considering the high up-front cost of production, and the low probability of success
of low-budget movies, the two friends are evaluating the best ways to finance the
company. They have hired you to help them develop a business plan that can
convince investors that their model is sustainable.
What areas would you look at to determine if Star Production’s business model can
be sufficiently profitable to recoup initial investments in the short term?
In this case we need to analyse the short-term profitability of a movie production

company. So, you would begin crafting your framework by thinking about the different
factors that would contribute to the company's overall profits.
The first two components of this framework are fairly straightforward: revenues and
costs. That's because the profitability of any company is determined by a combination of
their revenues and costs.
Then, we can further deconstruct both revenues and costs based on our knowledge (or
perhaps some assumptions) of the movie production business. And as you break down
the components further, it's important to consider the concept of MECE, which stands
for Mutually Exclusive Collectively Exhaustive.
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In simple terms, MECE means that you should aim to have a framework where the
branches do NOT overlap with each other, and where the framework is comprehensive
(i.e. no branches are missing). You can learn more about this in our separate MECE
guide.
Now here's an example of what your draft framework might look like for the Star
Production case:
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As you can see in the example above, we've broken down the revenues and costs into
specific components that would make sense for a movie production business.
And we've used bullet points to highlight the information we would need in order to
determine how each individual item contributes to the overall revenues or costs of the
business.
For example, we would need to know the expected ticket sales, the average ticket price,
and the share of the ticket revenue that Star Production would be entitled to, in order to
calculate the total ticket revenue.
Once you've drawn out a rough framework like the above example, your next task will
be to explain your framework to your interviewer.
3. Communicate the framework

Even if you created the world's best framework, it won't get you an offer if you're not
able to explain it in a clear and structured way.
Here's how we'd recommend you communicate your framework during your interviews:
Spin your paper around

Start by showing your interviewer the framework that you've drawn on paper. Having
this visual structure will make it much easier to explain (and understand).
Start with an overview

Before jumping into the details of your framework, you should start with an overview of
the framework.
In our example above, you could simply explain that the profitability of Star Production
will be determined by the expected revenues and costs of the business, which can be
broken down into more specific categories.
You should also tell your interviewer the order in which you plan to walk through each
individual branch, so they'll know what to expect.
Highlight 3-5 considerations for each branch

Next, go through each branch of your framework and mention several considerations
Table
thatofcame
contents
to mind while you were drafting the framework.
For example, for the "upfront costs" branch of the Star Production case, you could
explain that you'd want to find out what costs the company would incur before it can
start releasing movies, like filming equipment, studio space, and post production
expenses.
Summarise your points

And throughout your explanation of the framework, you should pause periodically to
summarise your key points, and to check in with your interviewer.
You're likely going to be covering a lot of ground in your framework, and you want to
make sure that your logic doesn't get foggy in the details.
For example, you could summarise the most important considerations that impact the
revenues of Star Production, after you've walked through each individual sub-branch
under revenues.
Prioritise next steps

Finally, after walking through your full framework, you should tell your interviewer the 2-
3 next steps you would recommend, in priority order.
There's a variety of ways you could rank next steps, but three good options would be
based on importance, ease, or speed.
Returning to the Star Production example, you could recommend the following next
steps in priority order:
Identify the biggest cost drivers. Star Production's business model is focused on
producing a high volume of low cost movies, so controlling costs will be essential to
the profitability of the company.
Develop a production process that minimises costs. Once the primary cost drivers
are identified, we should develop a production process that keeps those costs as low
as possible.
Look for opportunities to increase the hit rate. Star Production is counting on a
few box office hits to drive revenues. As a result, increasing the percentage of movies
that succeed could be a big win.
Get MBB offers by mastering frameworks

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To succeed in case interviews, you MUST be able to create and apply frameworks
effectively. And if you really want the best possible preparation for your case interview,
you'll want to practise doing this in an interview situation, ideally with an expert
consultant giving you feedback.
That's why we’ve created a coaching service where you can do mock case interviews 1-
on-1 with ex-interviewers from MBB firms. Start scheduling sessions today!
BROWSE MBB EX-INTERVIEWERS
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9/14/23, 8:54 PM Top 7 case interview frameworks (and how to create your own) - IGotAnOffer

Top 7 case interview frameworks (and

Let's start with the list of top frameworks.

Click here to practise 1-on-1 with MBB ex-interviewers

Top 7 frameworks for case interviews

Practise with MBB ex-interviewers

2. The 4Ps framework

Understanding these dynamics is extremely important when you're considering entering

Bargaining power of customers: How much bargaining power do customers have?

Practise with MBB ex-interviewers

Bargaining power of suppliers: How much bargaining power do suppliers have?

5. Market entry framework

6. Pricing case framework

7. Merger and acquisition framework

Don't reuse pre-existing frameworks

Why NOT to use the Case In Point frameworks

This is an interesting exercise as it exposes you to a range of business problems and

Why NOT to use Victor Cheng's LOMS frameworks

Practise with MBB ex-interviewers

Why to create custom frameworks instead

How to create custom frameworks

Here's a brief summary of the steps you'll need to take:

Summary - IGotAnOffer method (framework

Step 3: Communicate the framework

1. Ask for time to gather your thoughts

But don't get carried away!

2. Create the framework

Star Production case example

In this case we need to analyse the short-term profitability of a movie production

Practise with MBB ex-interviewers

3. Communicate the framework

Spin your paper around

Start with an overview

Highlight 3-5 considerations for each branch

Summarise your points

Prioritise next steps

Get MBB offers by mastering frameworks

Practise with MBB ex-interviewers

BROWSE MBB EX-INTERVIEWERS

The IGotAnOffer team

Photo: Roberto Taddeo / IM

About Practise with MBB ex-interviewers

Read our book

Case interview examples

Case interview prep

McKinsey case interview

Case interview frameworks

INTERVIEW COACHING SERVICE

Case interview coaching

Consulting resume review

MOCK INTERVIEW SERVICE

Consulting case mocks

Practise with MBB ex-interviewers

Terms and conditions

Copyright © 2023, IGotAnOffer

Practise with MBB ex-interviewers

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