Mastering the Business Situation Case Interview Framework (Part 7 of 12) | caseinterview

Summary

该视频脚本详细阐述了商业情境框架的应用，适用于各种客户或公司情境，包括进入新市场、推出新产品、开始新业务、增长策略、剥离、甚至企业转型等。演讲者通过案例分析，如NBA考虑进入中国市场并电视转播其比赛，展示了如何使用框架来理解业务的驱动因素和影响。框架的核心在于分析客户、产品、公司和竞争四个关键领域，通过一系列标准化的开场问题收集基本信息，进而深入挖掘问题的核心。此外，还讨论了成本结构、组织结构、市场集中度、行业生命周期等概念，以及如何根据收集到的信息调整分析策略。整个脚本强调了在商业案例分析中，不仅要关注数据，还要理解背后的“为什么”，从而更精准地定位问题并提出解决方案。

Takeaways

• 📈 **业务情况框架**：用于分析各种客户或公司情况，如进入新市场、推出新产品、增长策略、剥离、转型等，以理解影响业务的驱动因素。
• 🎨 **框架应用**：在案例分析中，框架帮助理解问题并提供结构化的方法，如分析主要航空公司考虑开设低成本航空服务的案例。
• ✍️ **记录与实践**：建议提前练习框架的使用，决定是垂直还是水平方向记录，以便在案例分析中有效展示和避免空间不足。
• 🤔 **客户分析**：始终从客户开始分析，了解客户群体、需求、支付意愿、分销渠道偏好和市场集中度，因为所有业务都以客户需求为出发点。
• 📚 **产品理解**：深入了解产品的功能、差异化程度以及互补商品和替代品，这有助于发现市场机会和潜在风险。
• 🏢 **公司优势**：识别公司的核心竞争力和专长，了解公司的分销渠道和成本结构，以及是否与市场需求同步。
• 💰 **成本结构**：理解固定成本与变动成本的比例，以及它们如何影响市场进入壁垒和公司的竞争地位。
• 📊 **竞争分析**：评估竞争对手的市场份额、行为、行业最佳实践、进入壁垒和供应商集中度。
• 🌐 **行业环境**：考虑行业的监管环境和生命周期，了解其对公司业务的潜在影响。
• 🔍 **深入挖掘**：在分析过程中寻找关键见解，深入挖掘以理解问题的根源，而不是机械地应用框架。
• 🛠️ **框架调整**：根据案例的具体情况调整框架的使用，确保分析过程既有组织又灵活，以适应不同的情况。

Q & A

什么是商业情境框架，它通常用于哪些类型的客户或公司情况？

商业情境框架是一种分析工具，用于分析各种客户或公司情况，包括进入新市场的新公司、推出新产品、开始新业务、开设柠檬水摊、增长战略、剥离以及在某些情况下的策略转型。它帮助理解影响业务整体的关键问题。

在商业情境框架中，为什么客户分析通常放在首位？

客户分析通常放在首位，因为所有业务都是由客户需求驱动的。了解客户群体、他们的需求、支付意愿和偏好对于制定有效的商业策略至关重要。

如何使用商业情境框架来分析NBA是否应该进入中国市场并在中国转播其比赛？

首先，需要分析中国观众的构成，包括性别、年龄和篮球参与度。其次，了解观众的偏好，包括他们对比赛的兴趣点和他们希望通过观看比赛获得什么。然后，考虑广告商的需求和动机，以及他们与NBA合作的潜在利益。最后，综合这些信息来形成关于NBA是否应该进入中国市场以及如何操作的初步假设。

在分析产品时，为什么了解产品的定性特性很重要？

了解产品的定性特性有助于理解产品的功能、顾客为何购买以及产品为何有价值。这对于发现市场中可能存在的其他细分市场以及这些市场对产品特性的特定需求至关重要。

公司在分析其成本结构时应该关注哪些方面？

公司在分析其成本结构时应该关注是否为低成本或高成本生产者、固定成本与变动成本的比例、与市场相比的成本结构、投资成本以及无形资产如品牌效应。

如何使用商业情境框架来识别和应对市场中的主导客户，例如沃尔玛效应？

通过分析市场中是否存在一个或少数几个主导客户，以及这些客户对市场的影响力。如果存在主导客户，需要单独分析与这些客户的互动，并考虑他们对公司策略和市场定位的影响。

在商业情境框架中，为什么需要了解竞争对手的市场行为？

了解竞争对手的市场行为有助于揭示市场的竞争动态，包括竞争对手的优势、市场行为模式以及可能的行业最佳实践。这些信息对于制定有效的竞争策略和市场定位至关重要。

如何使用商业情境框架来分析公司的组织结构是否与市场需求同步？

通过询问公司的组织结构并将其与客户服务偏好和分销渠道偏好进行比较，可以发现是否存在不匹配。如果公司组织结构与市场需求不一致，这可能表明需要调整组织结构以更好地服务市场。

在商业情境框架中，为什么需要考虑行业的生命周期和监管环境？

行业的生命周期和监管环境可以显著影响公司的运营和市场策略。了解行业当前所处的阶段和监管环境的变化有助于公司预测未来的市场趋势和潜在的法律风险。

在商业情境框架分析中，如何处理和利用收集到的数据来形成结论？

在收集数据的过程中，需要不断地综合和分析信息，形成初步假设，并通过提问来测试这些假设。一旦找到关键的洞察点，就可以深入挖掘，理解问题的根源，并据此制定策略。

在实际应用商业情境框架时，为什么需要避免机械式地应用框架，而是要根据情况灵活调整？

机械式地应用框架可能导致忽视关键的业务洞察和市场信息。灵活调整框架以适应特定情况可以更好地利用收集到的数据，发现问题的核心，并形成更有针对性的解决方案。

Outlines

00:00

📈 业务状况框架概述

本段介绍了业务状况框架的应用范围，包括新市场的进入、新产品的推出、新业务的开启、增长策略、剥离策略和转型策略。框架旨在帮助理解影响业务整体的关键问题。通过实际案例，如航空公司考虑开设低成本航空服务，以及NBA考虑进入中国市场，展示了如何应用框架。强调了客户是业务的核心，讨论了客户的需求、偏好和市场变化对业务的影响。

05:01

👥 客户细分和需求理解

详细讨论了如何进行客户细分，包括识别不同客户群体的特征、规模、需求份额和增长率。通过昵称来形象化客户群体，如“足球妈妈”。强调了了解客户群体的重要性，包括他们的年龄、性别、兴趣和购买动机。还探讨了价格敏感度、分销渠道偏好和市场集中度，以及如何将这些信息整合到框架中。

10:02

🛍️ 分销渠道偏好与市场集中度

分析了分销渠道偏好对业务的影响，如在中国的直销模式和美国市场的不同偏好。讨论了如何根据客户的服务偏好调整销售策略，以及市场集中度对定价和利润的影响。特别提到了“沃尔玛效应”，即单一大客户对市场和供应链的影响，以及如何根据市场集中度调整业务策略。

15:05

🛠️ 产品特性与市场定位

深入探讨了产品层面的关键问题，包括产品的功能、差异化、互补品、替代品和产品生命周期。讨论了产品是否为商品或服务，以及产品的差异化程度。还考虑了互补品的市场状况对产品销售的影响，以及潜在的替代品对业务的威胁。强调了产品包装和捆绑销售策略的重要性。

20:08

🏢 公司优势与成本结构

分析了公司的核心竞争力和成本结构，包括固定成本和变动成本的比例，以及与市场竞争对手的成本对比。讨论了如何通过增加固定成本来提高市场进入壁垒，以及如何通过理解公司的组织结构和市场服务偏好来调整业务模式。还考虑了品牌效应和无形资产对业务的影响。

25:08

📊 竞争环境与市场动态

探讨了竞争环境对业务决策的影响，包括市场份额、市场集中度、竞争对手的行为、行业进入壁垒和供应链集中度。讨论了如何利用波特五力模型来分析竞争态势，并根据市场动态调整策略。还考虑了行业监管环境和行业生命周期对业务的影响。

30:12

🔍 问题诊断与策略制定

最后一段强调了在使用框架时寻找关键洞察的重要性，以及如何根据获得的信息调整分析的深度和广度。讨论了如何在发现关键问题后深入挖掘，以及如何根据问题的具体情况制定策略。强调了灵活性和创造性在解决问题过程中的作用，以及如何将框架作为工具来引导分析和讨论。

Keywords

💡商业情境框架

商业情境框架是一种分析工具，用于帮助理解企业面临的各种情况，如进入新市场、产品发布、业务增长策略、剥离或转型等。在视频中，它被用作一个核心结构，通过一系列的标准问题来揭示客户、产品、公司和竞争环境的关键信息。例如，视频中提到使用商业情境框架来分析NBA是否应该进入中国市场并电视转播其比赛。

💡客户细分

客户细分是指将市场根据不同的需求、行为或特征划分成不同的群体。在视频中，提到了对NBA在中国的观众进行细分，发现80%是男性，20%是女性，并且大部分男性观众年龄在20岁以下，这有助于理解不同客户群体的特定需求。

💡产品差异化

产品差异化是指产品与市场上其他竞争产品相比所具有的独特属性或优势。视频中提到，了解产品的差异化对于制定市场策略至关重要，因为它可以帮助公司确定哪些市场细分可能对其产品的独特卖点更感兴趣。

💡成本结构

成本结构涉及公司生产产品或提供服务时所涉及的成本分布，包括固定成本和变动成本。视频中讨论了固定成本对于市场进入壁垒的影响，如亚马逊通过投资仓库提高固定成本，从而增加市场进入难度。

💡市场集中度

市场集中度描述的是一个市场中领先企业的市场份额和市场影响力。视频中提到，了解市场集中度有助于分析竞争动态，如垄断、寡头竞争或高度竞争的市场环境对策略的影响。

💡竞争行为

竞争行为涉及市场上竞争对手的行动和策略。视频中强调了了解竞争对手的行为对于制定有效商业策略的重要性，包括他们的优势、市场实践和潜在的进入壁垒。

💡供应链集中度

供应链集中度指的是供应链中某一环节或供应商对整个供应链的影响力。视频中以英特尔对芯片市场的控制为例，说明了供应链集中度如何影响公司的议价能力和成本结构。

💡行业生命周期

行业生命周期描述一个行业从兴起、成长、成熟到衰退的过程。视频中提到，了解行业所处的生命周期阶段对于制定合适的商业策略至关重要，因为它影响着市场的需求和公司的投资决策。

💡市场进入策略

市场进入策略涉及公司如何计划和执行进入新市场。视频中通过NBA考虑进入中国市场的例子，探讨了市场进入策略，包括了解当地市场的需求、竞争环境和潜在的增长机会。

💡需求侧分析

需求侧分析关注市场上客户的需求和偏好。视频中通过提问来揭示客户的需求，如他们愿意支付的价格、偏好的分销渠道和市场集中度，从而帮助公司更好地理解其目标市场。

💡供应侧分析

供应侧分析涉及评估公司的生产能力和成本结构，以及如何影响市场供给。视频中提到，通过了解公司的供应侧情况，可以揭示其在市场上的竞争力和潜在的改进领域。

Highlights

业务状况框架用于各种客户情况或公司情况，从新市场进入、新产品启动、新业务开展，到增长策略、剥离、甚至企业转型。

框架有助于理解哪些问题在推动和影响业务的整体表现。

在案例中，通常以你为一家主要航空公司工作为背景，该公司考虑开设低成本航空公司提供商的情况开始。

NBA成功在中国完成了NBA总决赛的试点项目，中国观众数量是美国的五倍。

分析是否应该进入中国市场并在中国播放NBA比赛，以及如何进行。

四个关键领域包括客户、产品、公司本身和竞争，是理解是否进入新市场的关键。

通常首先从客户开始分析，因为所有业务都是由客户需求驱动的。

通过标准问题获取基线信息，使案例面试更像是哈佛商学院的案例研究。

了解客户细分、大小、需求份额和每个细分的增长率对于理解市场至关重要。

询问每个客户细分的需求，可能需要用不同的方式进入市场或针对不同的市场细分。

了解每个细分愿意支付的价格，以及广告商的动机和需求。

分析客户的分布渠道偏好，了解他们喜欢如何被服务以及他们如何接触供应商。

检查客户集中度，了解是否存在像沃尔玛这样的大客户，这可能会影响整个价值链的盈利能力。

产品分析包括了解产品的功能、差异化程度以及互补商品的情况。

了解公司的强项、分销渠道、成本结构和组织结构，以及它们与市场需求的匹配程度。

竞争分析涉及市场份额、竞争对手行为、行业最佳实践、进入壁垒和供应链集中度。

行业监管环境和行业生命周期也是分析的一部分，了解行业是否处于低谷或周期性业务。

使用框架的过程中，寻找关键见解并深入挖掘，这有助于理解问题的根源并找到解决方案。

Transcripts

the business situation framework is used

for wide variety of client situations or

company situations everything from a new

market entering a new product starting a

new business opening a lemonade stand

growth strategy divestiture in some

cases strategy turnaround how's the

company doing in general okay it's just

a good way to understand what issues are

driving and impacting the business

overall and so let me walk you through

what each of the pieces are and actually

draw it out like I would in a case

here's one you might want to think about

whether you seems kind of silly when you

have paper depending on the framework

you use you actually want to practice

whether you want to have it sort of

vertical orientation horizontal

depending on what space you need because

the sort of weird if you run out of

space in it to flip pages you'll get

confused so you sort of have a

preference but know it in advance so in

this case I applied for this for me I

would probably normally do it sort of

landscape style but I can't show it so

I'll do it this way so what I usually do

is that let me just give you the demo

the opening a little bit and then we'll

talk about the actual framework so the

way the case is usually presented is you

work for a major airline company and

they are thinking of it's going they are

now there's some capacity issues on the

way that's gonna say they're entering

they're thinking of starting like a a

low-cost airline provider okay but

problem at that is there's a fixed

constitute you are working with a okay

so you're working with the National

Basketball Association and they recently

successfully completed a pilot program

showing MBA final games in in China and

they had five times more viewers in

China for those games than the United

States

okay NBA commissioner comes to you

you're working on that as a client

should NDA enter the China market and

televise its games in China and if so

how should they do it okay that would be

fairly typical of a case like that

and and it's a guy that's interesting

the probably four key areas when you

look at to understand whether the MBA

should enter that market and if so how

you certainly want to look at the

customers look at the products that

you're providing to that marketplace you

want to look at the company itself the

MBA and I'm on za slide D here and then

you want to look at the competition

those are sort of the four key areas in

this case because it's entering a new

market and obviously these all these

issues are important I probably want to

start with the customer first and that's

what I usually do you'll find in in some

of the case prep books I've seen out

there they they tend to like for

particular situations skip the customer

and I just have a preference for always

wipe I just feel a lot more comfortable

knowing what's going on in the

marketplace and the customers have the

money if they're changing their minds I

want to know about it because that's

implication so everything else it was an

M&A situation but customers want

customer needs have changed as

implications for M&A has implications

for Cassity so I personally just like

starting with a customer because all the

businesses are driven off the customer

okay not everyone does that lots of ways

to be right you can come back to it

later but I just have a preference for

starting with a customer that's what I

usually do okay so that's how I usually

lay it out and then depending on which

branch I'm going through I'll use these

sort of standard opening questions and

again the purpose of these questions is

not to solve the case it's very

important the purpose of these questions

is to get you sort of baseline

information to make this case interview

feel more like an HBS case see if data

okay blank sheet of paper hard to solve

the case how to be protagonist when you

have no idea what's going on when you

have data it's a lot easier so the

purpose of this is really kind of get

you through about 1/3 to 1/2 the way

through the case ok and then the rest is

really sort of based on what you

discover so judgment business acumen

sort of logical conclusions all sort of

matter some creativity tends to matter

at sort of middle of the case opt for

and it tends to be sort of mechanical ok

so I'm gonna go through the mechanical

stuff and show you the kind of questions

I typically ask

okay so our first question I'll list all

of them and I'll get saying what each

one means so the series of questions I

typically ask are who is the customer

what is each customers doesn't want what

did you seventh willing to pay in terms

of price

what distribution channel does each have

and sort of what's the concentration of

customers in that marketplace so sort of

Porter's five forces but like a fifth of

it right so with customers I always ask

who is the customer and what I'm looking

for I'm looking for segments okay so I

want to know customers overall that's

sort of very misleading I want to know

we know what are the segment's the

important questions there are to figure

out what the segments are okay and

usually I should be prepared for this

when when consultants do and market

researchers do segmentations of

customers

they tend to sort of like give them

nicknames okay so it's like actually

this what happened with the minivan

right the minivan has this association

for being with soccer moms right that's

because the guy who person who did the

original marker we should study says it

tends to be like women with like one and

a half kids with who are aged five

attentively attracted minivans let's

call them soccer moms okay so that names

stuck so they will have nicknames and

they're used to sort of amusing because

otherwise it's kind of boring to sort of

work with them all then and it's also

easier to visualize who that customer is

okay and so the segment's you want to

know the segment's how big they are what

share the total demand comes from each

segments and then the growth rate of

each and all of this is like on that

first bullet if you would work should be

bullet but I guess just missing a bullet

but that first line item on this

framework sheet okay so who are the

customers what are the segment's you

want to understand them at a qualitative

level so who are these people

right and then you want to understand it

mathematically so for example I'll make

stuff up for for China it could be it

turns out there are three major segments

of there were three major segments of

viewers in China for the NBA games about

80 percent were men 20 percent were

women okay let's do school right great

and that's sexual and within the men do

we have any more information on what

kind

maybe age demographic and how old were

they younger older were they interested

in sports was a novelty thing what they

play basketball and the interviewer

might say what's a good question amongst

the man 80% were under the age of 20 oh

that's interesting okay so it's a youth

market that's watching and amongst that

well are these kids are they playing are

they playing basketball or was it sort

of a novelty thing turns out eighty

percent of the eighty percent actually

play basketball okay

turns out by the way Michael Jordan is

extraordinary popular in China I'm like

my brother visit is sort of rural China

in the middle and they call them Michael

Jordan for like a week and they have

like no TV dirt poor but they all know

who Mike is it means pretty crazy and so

you can start getting a flavor right for

who this customer is it's kids a lot of

ways like like American kids I'm again

making all this up and that gives you

some sense of okay I understand the

context what's going on here all right

next question is what does each customer

segment want ok oftentimes the needs are

very different and you may want to

tackle the markets in a very different

way you might want to target one segment

over another you might want to ignore

one you might want to sort of attack

both but in a different way so using the

tunnel the whole China example it could

be that you know half of them half that

half the viewers were like young kids

and half of them were like sort of

adults well that's interesting why they

don't swatching why the kids watching

what are they getting out of it

kids are watching because they get to

learn new moves right adults are

watching cuz you know they're really

into sports in general so they're like

the sports widows of China

sorta like Americans like okay that's

interesting now sort of an idea of

what's driving them okay now probably

not appropriate for this case but if it

was more of a product purchase rather

than the media viewership you know what

is the price each segment is willing to

willing to pay so in this case if this

was the China NBA saying I might want to

know who the advertisers okay are these

American companies or the you sort of

you know local companies the big

companies and small companies why they

advertising what's driving their need to

advertise so it might be that

P&G China you know has a really tough

time reaching sort of the younger age

market because the way there's not as

much media there I thought you and and

so that's the and companies like that

are driving the bulk of advertising

sales in the pilot program

okay that's useful to know those whole

time we're doing is we're sort of just

gathering information you don't want to

you want to sort of synthesize sort like

do a little mini summary as you go you

don't want to just like gather

information for like forty minutes okay

you want to sort of refine what you're

thinking think out loud yeah just like I

was interesting oh so these are like

like like sports kids who just want to

be like Mike but they want to be like

Mike in Chinese okay I got that that's

one group and then they're sort of like

the sports waiter okay know kind of what

that is I'll make the analogy and then I

might say what seems like so far my

hypothesis is that the market break out

in China seems to be very similar so far

to a mini-computer ship as I understand

it okay that might be or hypothesis and

so if I'm favoring and that the

underlying tone is so far favoring that

this seems like a good fit so far but we

have looked at other factors but my

hypothesis so far is that looks like

might be a good thing to worth

considering

well he's testing further for the other

questions I usually ask our distribution

channel preferences free segments so

again in China the they do a lot of like

Avon lady stuff you know so person the

person selling which is like not so

popular here and more but it's really

populated because more of leadership

culture so in every market there's like

always big biases in terms of how

customers want to be served in certain

technology markets so like really

expensive software packages fortune

finders CIOs they tend to like to deal

with one person so they want to deal

with one person from some one person

from HP one person from I don't know

Apple whatever or IBM and that may be

different than how these companies are

organized right so you may have an issue

where you're losing market share because

the customer wants to deal with one

person but your company is organized by

product line so the CIO of Pepsi has to

deal with five sales people and their

complaint is

one person from your company knows my

entire system okay and I find an

acceptable and that's why I'm going with

IBM something like that so by

understanding the distribution channel

preferences or actually that's why bad

example for this particular point but

maybe it's like I like working with my

system integrator partners so I want to

buy my hardware on and buy my software

through my Accenture consulting partner

because that guy knows everything and I

trust him I don't want to deal with IBM

directly I want I want you to go through

that guy okay that's my preferred way of

doing business for some younger segments

I prefer to buy things on the internet I

don't want to go to I don't want to go

see talk someone in person right for

certain kinds of things I want to buy

over like SMS right or texting or

whatever and I can see sort of on the

internet a lot of younger kids want to

buy through Facebook like this one all

the time and Facebook that kind of thing

so there's preferences as to how they

prefer to buy how they want to access

vendors and it's useful to know that in

advance particularly by segments so

virtually everything here you want to

sort of break it out by segments

whenever you can

especially customers and then the final

one is the customer concentration of

power and we're looking for here is what

I call the Walmart effect is there one

big customer right that P&G cannot

afford with nor do they have so much

power that driving out all the

profitability earlier in the value chain

so this is sort of from Porter's five

forces that's really useful not because

if that happens in an industry it has

implications for you might want to do

okay you react differently if you knew

that were to be the case if you miss

that fact that there's a Walmart

customer out there your recommendations

could be off okay because they're not

they don't work as well in that kind of

situation so those are sort of like the

five questions I typically ask and

usually if I honey get through the five

I got a good feel for what's going on on

the demand side and again you can add

your own in there or I suggest you do

but sort of have your stock opening four

or five questions in each category that

gets you sort of information you need

and I found these five tend to work well

for me yes question

yes so the question is you always want

to just or while you're asking for more

information and you want to sort of

continue dress apply each step actually

in a business situation context you get

a little more leeway okay so in a clear

plan for ability case you want to be

high pot it's very mathematical right so

it's clear case hypothesis data test

refine and keep going in this there's

there's a lot of contextual information

you need so you can actually start

asking you get a little more leeway you

can go a couple questions without saying

why you want it

but it's good once you sort of reach a

sort of an interim conclusion to

actually state that because then you're

sort of sympathizing in little steps yes

yeah actually that's a good point should

in that prior example I sort of compare

the Chinese market the American market I

did make some assumptions I'm gonna make

it I should state it but it's actually

better to ask it seems to mean it seems

like it's similar to the American market

do we know that's true or not okay so

that would be a better way of phrasing

so you see it's good because subtle word

changes right make a difference in how

in terms of housing interpreted so make

no assumptions at all and if you do

state you're thinking about making one

and see if they think it's a good idea

that sometimes I'll say I don't think

that's a good idea when they tell you

it's not a good idea it's not a good

idea for a variety of reasons either

it's wrong or they're not prepare to

talk about it or they have no data

what's sort of logically inconsistent

cuz they made up the case and they want

you to go somewhere else take the lead

and go somewhere else yes

so thing is it almost always just focus

all your effort now your recommendation

around that my first instinct is when

that's happening that the problem tends

to be sort of the problem what do you do

with Walmart and versus everyone else so

that's my initial reaction of how I was

at segmenting my my analysis in the way

my approach because they got there's one

big elephant that the rules are really

different for them so the questions

could be okay if I'm a small company and

I got a Walmart type customer sort of

down my demand chain if you would what

do I do

they have 50% of the buying comes from

that one customer the remainder are the

other 50% and that's fragmented over by

other customers or a thousand or five

thousand customers what should we do

well so we could look at each one

separately let's first analyze the whole

Walmart thing are we likely to win that

game lots a byte used to a segment sort

of customers competitors for Walmart

competitors for everybody else products

sold to Walmart product sold everybody

else right what are our efforts as a

company towards Walmart towards

everybody else it's still a business

situation framework right the same key

issues but when I know there's a Walmart

type customer

I started splitting everything along

that segment because it seems relevant

that's just my first impression and so

in that situation you might have a we

should devote all resources to Walmart

okay or we already are devoting all

resources to one more and we're getting

crushed okay and it could be that

there's a capacity issue which would be

like a creative framework as you realize

that why we're being crushed okay and

turns out we have we don't have a

low-cost position well we don't have

low-cost position and there's a

structural issue with the market we're

in the mansion there's one big customer

then you seems like you can't win that

game okay so let's look at our other

options around the normal more customers

where's our position there who else is

in that market in terms of competitors

and again same framework with sort of

you just sort of split it and you may

find that with Walmart it's a losing

proposition everyone else other than

Walmart it seems like you can win and

there's some segments in there and

that's how you tie sort of have that

conversation okay next up is is the

product let me back up for one second

there are a lot of a lot of general

frameworks out there

that's that are sort of similar to this

like three C's forces whatever C's and

what you'll find is they all tend to

cover the same thing but they tend to

organize a little differently so I

broken out product just out of habit you

could very easily lump product in with

company for example some companies some

frameworks have cost as a separate

category it's like the four C's is like

paying customer company cost and

competition I tap on the role cost

underneath company because I think the

classes within a company and it's an

interesting cost issue

I'll have treat that separately inside

of competition so it's all fairly

flexible sort of more ways a lot of ways

to be right you sort of it's good to

pick the way you like and sort of stick

to it so you sort of get process

repetition and get used to it okay so

for product my sort of four or five key

questions I typically ask is at purely a

qualitative level I just want to

understand the product like what does it

do why do people buy it why is it useful

and and sort of put on my customer hat

and make sure I understand that because

you will get some insights particularly

combined with other information as to

well maybe if the product is is very

good at being fast you know it's faster

than the other the competitive offerings

are there other segments that value fast

if you don't understand it qualitatively

it's hard to do that so that's the first

thing I ask is just really understand

the product at a customer level a second

thing I want to know is this kind of

widget is it like a commodity good like

rice or is it a differentiable good like

a service so you want to know how much

flexibility do I have in changing the

product itself so if I'm selling coffee

beans hard to change okay if I'm selling

coffee at a Starbucks lot you can change

okay

so it's useful to know what kind of

product you're dealing with usually you

get like an actual product sometimes you

get like a widget right but either way

it's worth asking to what degree is

there variation differentiation amongst

the parts that are in the marketplace

next thing I usually ask are I want to

understand what the complementary goods

so selling if I'm selling ketchup I want

to know what's happening to french fries

right and vice versa

because I tend to go together and if my

compliment is is that markets getting

beat up that has implications for me so

way if all of a sudden the government

decided that french fries will like kill

you in a month

then I'm sure ketchup sales will fall

okay so you want to know that because if

you don't know that sometimes you're

solving this you saw with the ketchup

industry problem what the problems in

potatoes okay and so you're going to

miss the whole point and you're a

synthesis in your conclusion is going to

be off substitutes as well again this

from Porter's five forces are there

other things people can use other than

our product so this is really sort of

indirect competitors right so maybe the

substitute I don't know for ketchup is

honey mustard I don't know the

substitute for traditional MBA could be

a online MBA okay anybody that didn't

exist before so it really is useful to

them to get some sense of how vulnerable

you the company is to substitute

products again it changes your

conclusion sometimes I've known about

the product lifestyle is this product on

its last legs that we have to sort of

retire it anyway or is it sort of in its

infancy sometimes it sort of Allens last

legs

then you you're more apt to sort of kill

the product because you know you got to

do it anyway soon and so I'm making

investment something to replace it might

make more sense but it sort of wants

early stages maybe it's better to try to

get to fix the marketing in that

business for example get it to work then

to kill it because it takes a little bit

long it's like a long cycle for develop

new products like cars to get a new car

out the door it's like four or five

years or something like that so if

you're in the first year and you want

say well there's a flaw on the product

well you can't fix it you can't fix the

platform to like from now five years

from now well then let's not look at

there because we need some something

better to make some improvements more

immediately and last thing and this is

sort of depends on the nature of the

product sometimes I ask packaging

questions what's included what's not

included sometimes you can differentiate

the product by based on what's bundled

in so it's like razors with razor blades

actually what computers go it was like

cell phones with service planes so you

drop the cell phone price to close to

free

but you bundle in a mandatory service

plan and that really drove a lot of

adoption okay same product same fitna

that you didn't change manufacturing

right you just change the nature of the

packaging and that dramatically changed

market penetration adoption and

ultimately sales okay if you didn't sort

of think about that you that industry

would have missed a very big opportunity

okay so you're seeing this is really

sort of like a checklist you know I sort

of think of it like you're trying to fly

an airplane standard questions you ask

every single time just to sort of cover

your bases and usually what happens is

when you ask these questions it flushes

out useful information that will lead

you in the right direction okay

so again this is really the open that's

my standard opening night sort of wick

with middle nights I have my five

questions for customer my five for

products and so on and so forth and it's

just to sort of get you in the right

direction get enough information to sort

of use your Annika breezing skills to

kind of continue

so that's product next up is sort of

company or clients and key questions

there are what is the company good at ok

this is sort of like a squishy

qualitative thing you want to know what

are the company's capabilities and

expertise and and this is where some

some interviewees and actually some

consultants to this is where they kind

of get screwed up because you know in

like a in a theoretical business case

the answers are very clean okay in a

real world situation it's not all about

the hard data in fact a lot of its the

soft data ok so one of the things you

want know what the company is what are

they good at doing sort of as

individuals at and as an enterprise and

the reason it's important is sometimes

it will you'll have an opportunity where

a client where market opportunity exists

there's a competitive vacuum but the

company is not good at what that market

wants a customer segment so then

theoretically business plan wise you

know maybe it's a good opportunity to

pursue but not let's say for that

particular company so you have to know

what they're good at and I'll give you

an example that a little bit because

we've asked customers what the tribution

channels they prefer you want to know

for your client or for the company but

distribution channels do you got and

what's the mix between them so

if there's a mismatch this helps you

flush out the mismatch so while the

customers want channel a but all your

resources and channel being that's a

mismatch okay so that's an insight and

then you can start brainstorming about

how you'd fix that I understand why it's

that way

historically and then we make some

changes along the way okay a cost

structure so this is sort of embedding a

little bit of our leader framework in

here the general questions are sort of

you know are you the low-cost producer

II the high cost producer sometimes if

you're dealing with a case that's just

kind of conceptual that's all you need

to know you know like the precise cost

structure like the number but that that

we're the leading low-cost producer in

the market okay and and that's that's

good enough for this family if they gave

you information around well at this wall

meaning we can produce at this cost at a

higher volume you can produce at that

cost that's like a cost curve that's

more of a supply curve and that's

usually a hint you got a switch to

potentially switch the supply demands

okay so conceptual you keep it here

merely specific you switch to supplying

man other things with costs a - just to

do certain more notes rather than

questions but the understanding the

proportion of fixed cost versus

available cost is very important because

it indicates a barrier entry issue okay

some example I I sort of I gave kind of

time is Amazon early on when they first

started the online bookstore it was a

low it was a low fixed cost business

totally virtual high margins they sort

of had a websites and then they had a

drop shipping relationship with a number

one wholesaler in books Ingram books or

whatever they are and and besos in 98

did an interesting thing where he

deliberately decides when even of the

cup was bleeding money decided to build

out 300 million dollars worth of

warehouses okay pissed off Wall Street

to no end because you can like make the

margins like worse for like four years

it's like damn straight I am here's why

number one I don't want to be tied to my

one supplier okay so there's like an

industry concentration issue right so

it's what it's a reverse of the Walmart

effect it's the Intel effect all right I

gotta buy all my chips of Intel so

they're getting all the profits and

they're sucking it out of all like you

know Dell and HP and compact wake up

actually I need a favor what did I just

say I lost my train of varied entry okay

so when when the fixed costs are are

very high that indicates a barrier to

entry so you have to deal with what's

existing competitors are the barrier to

entry is low then you're gonna get new

entrance that's what happened with

Amazon so they're like a thousand and

one bookstores that within the year okay

so he said well screw you I went I

didn't IPO I raised a billion dollars

boom $300 and chips on the table you

want to come play with me

put in three million bucks okay and it

kind of was pretty effective right and

then so Amazon in particular has been

very good at sort of adding various to

entry so they went from physical

warehousing infrastructure was sort of

one barrier to entry so they raised the

fixed cost that business be much higher

much more difficult to compete and then

did a lot of things on the rebel costs

like with book reviews scanning scanning

scanning now scan a lot of the books so

you can kind of keyword search them they

play up a couple hundred thousand books

sort of scan so if you want to compete

with Amazon you gotta go out and scan a

hundred thousand books

another big fixed cost so they're just

adding it up so you want to go play ball

Amazon you need like a half a billion to

a billion big payment but no one does it

so they got the business to myself okay

so that's why that's important another

thing one do is you want to compare the

cost structure of the company to again

to the marketplace so this class is over

a little bit and you just want to

understand are you in line higher or

lower and sometimes there's an insight

there and again all this was just trying

to flush out an interesting insight that

sort of puts together a paints a picture

what's going on and how you can what

what options you have for trying to fix

the situation if there is sort of the

case of sort of investment oriented you

would want to include investment cost

intangibles are useful sort like a brand

effect and those are sort of a strong

emotional loyalty customers have to the

product that's would the hard to con

that sort of analytically right so

analytically it ought to work but

customers just really love I don't know

aunt jemima like maple syrup and then

they just refuse use anything else

because it would be like heresy in the

South I have no idea

then shal situation and then

organizational structure I talked about

the example I give here is you know if

you're organizing your company by

product line but customers want to be

served sort of a sort of a cross product

lines so one point of contact are you

out of sync with what the market wants

so if you if you ask the so in the

customer portion of framework you're

asking how do they want to be served

what the district and channels are what

do they want if that's an issue they'll

any what if eclis mention it so when you

come back to the company you want to ask

what the organizational structures are

you in sync with the marketplace if

you're out of sync okay that's an

insight what we do about it that's where

the conversations sort of begins okay

last one is around competition I usually

ask around

I start with market shares so who are

the competitors and what's the market

share mix how concentrated is it is it a

monopoly oligopoly was it highly

competitive

because the competitor names for vastly

different in those situations okay well

funny story at McKinsey we were actually

banned from talking about pricing in the

context of price fixing we had really

had antitrust attorneys because we were

work with fortune 500 so you know and

oftentimes we work with all the key

companies in an industry and if profit

sucks in one business you know it

would've been very easy to say lunch

nudge wink wink over lunch you tell your

CEO Tom I see we should open price of 10

percent that's like highly illegal so I

just sort of came to mind so you can't

talk about that and actually I actually

got reprimanded for talking about it

because we really applied about that

so but knowing the concentration helps

you understand the competitive dynamics

that's very different Porter's five will

get I've sort of incorporated elements

of Porter's five forces in here if

you're not familiar with its worth sort

of reading competitive strategy of the

book or even just googling it and

getting a summary of it very useful

I mean I've sort of just very insightful

framework I sort of very impressed with

it I have sort of used it a lot and

let's see competitive behaviors what the

competitors doing what so basically

think of all the company questions you

asked and you want to know for the

competitors same deal

best practices do they really excel at

something that we stink that useful to

know again barriers to entry for the

industry overall we talked about and in

supply a concentration so the Intel

effect you got one supplier that kind of

controls it are they suck in I always

think

as the porters light forces is you got

the suppliers the company competitors

and then the customers and it's like

it's one big vacuuming sort of like suck

profits out you suck it out of the man

chain is suck it out of supply chain and

it's useful to know that if you have

that that pressure on your business it's

useful to know them and then last one

just to be complete or complete her or

more complete rather industry regulatory

environment in like lifecycle of the

industry so we sort of been in a trough

it is it a cyclical business so like in

mortgages I work in finance for a number

of years right now we're sort of in a

credit crunch thing and it's highly

predictable goes back 50 years every ten

years this happens

banks do you do stupid things ask for

bailout just crazy and then you know

people borrow more than they should

market tanks because all bleeding they

got a write-off loans and then there's

no credit and and they come comes back

next seven years later okay so that's

sort of the the checklist I use you have

questions yes on you here's please start

you try to figure out where the issue is

likely to be given what information you

have okay if you don't know so it would

no I wouldn't get I wouldn't do what I

just did I would not do what I just did

in the real case okay yeah you don't do

that I'm just explaining it does it

would be very boring what you are what

you want to do is I typically service

customer first unless unless dive

information that's just it's like a

competitive issue and in my sort of

competition okay so you sort of figured

what information you have initially

before you even touch the framework and

use that as your starting point and I

tend to go on each of these I might

spend five ten minutes but usually what

happens is I almost never get through

the whole thing before I discover

something really interesting that's very

indicative what's going on what's

driving the problem and at that point

this is where the creativity comes in

okay see if your mechanical get good at

this you'll do what I just did just bang

bang I gotta ask these 40 questions and

and and the interview will drop useful

information that if you're paying

attention is insightful but if you're

mechanically going through it and you

miss it it's clearly just

cramming through a framework okay and

that's like not good because it doesn't

show your palm something you're sort of

regurgitating stuff so we look what

you're looking for is you're looking for

an opportunity to branch off from this

okay so you're looking for the critical

insight in each piece and that tells you

what's going on tells you starts telling

the story what's going on and then you

might sort of go ahead and sort of skip

certain things alright so if the nature

of the business is such that I sort of

clear there's not like a Walmart effect

an Intel effect

I wouldn't use Porter's five forces all

right once I understand the nature of

the color of the customers are who the

competitors I would sort of skip some

those things so you start tailoring

these things based on the information

you get and that's where I don't know

call-out minute fifteen a minute twenty

you start deviating from the framework a

little bit or you start breaking things

out doing things within the framework so

it's still organized but it's not part

of like the standard questions so this

is where the whole you know talent comes

in it's less mechanical it's more about

look at the situation in analyzing it

laid out you told them like I want to

talk yeah customer product company yep

competition and you got an insight on

customer which is where you start it do

you dig deep then or do you go ahead and

still get a broad picture before you go

it depends on that sort of actually more

of a judgement question like if if I

sort of got the aha and I'll keep moving

if that's intriguing unexpected

counterintuitive I don't understand why

it's happening I'll keep digging okay

sometimes there's underlying there's

like underlying trends as to why things

happen so it's important I'm saying not

just what's happening but why okay so

this sort of gets the frameworks get you

to what right and as you get drilled

down lower and lower you start getting

the why and once you know why then it's

a lot easier know what to do about it

and then that sort of becomes more like

the HBS cases you've got all the

information you know what's driving the

whole situation now what are you guys

protagonists do and so that's sort of

how that process tends to attends to

evolve

you