Have you ever wondered how a perfect framework
looks like? I mean a framework that a real McKinsey consultant
would use to structure a case? Our goal with this channel is to teach you
effective techniques so that you can stand out in your case interviews by thinking like
a top management consultant. So because I'm an ex McKinsey consultant,
in this video, I'm gonna show you how I would structure a typical business strategy case,
so a case you see in a McKinsey, in a BCG, in a Bain interview and it's actually a case
that we've used before in a different video on how to improve your case interview frameworks,
but instead of getting a generic framework and improving it as we did on that video,
I'm going to structure this case from scratch and what you're going to see as a result is
an incredibly insightful, effective and efficient framework. Not very long, very short and to the point,
but it covers all the aspects you need in a very hypothesis-driven way. After presenting this framework to you, I'm
going to break it down so you can see how I did it and why is it much, much better than
any framework from any case interview book. For this specific case at least because the
framework is going to be tailored for this case. So let's jump right in and see the case question
and how I structured this case. So here's the case question. A high end European haircare brand wants to
enter the Asian market, should they do it or not? So ideally I'd ask a few clarification questions
just to get the case more specific. For example, what's motivating them to enter
this market? What type of hair care do they do? How high end are they? Uh, do they have any experience with Asia? Do they have any specific objectives with
this entry besides just increasing shareholder value and so on. But let's suppose the interviewer does not
answer me any of these clarifying questions. They just say, well, this is the case, do
your best. And this is code for: they want to know if
I can structure a pretty broad, market entry case, but with some specificities. It's a high end, European company, of haircare,
entering Asia, so I'm going to jump right into my structure and I'm gonna present it
as I would present it to the interviewer. Ready? Let's go. So to help this company decide if they should
enter the Asian market, I want to answer four main questions and then there's two extra
questions that would be nice if answered. The main questions that I want to answer is,
first, is this market attractive? Second, would our current products fit this
market's needs or could we develop new products that would fit this market's needs? Third, can we open up distribution channels
in Asia? And fourth, could we have a sustainable advantage
over our competitors? If this a market is attractive, there is product
fit, we can open up distribution channels and we can build a sustainable advantage,
then I think we should enter the Asian market and if some of these things don't hold up,
then we'll have to evaluate the specifics of the situation and see if we're willing
to take the risks or make the trade offs required to do so. Now, the two extra questions that I want to
answer our first, does the investment pay off? And second, what happens if we stay out? Now to answer these two questions, we need
to answer the first four questions first, so I'd focus on the four first questions and
these two extra questions would make our argument stronger. So let's start with market attractiveness. To answer if this market is attractive or
not. I'd ask three main questions or try to answer
three main questions. The first one is demand large and growing? And the second one, is this market profitable? And to test just two things to answer these
two questions, I'd get data on sales, growth and profitability of different market segments
of high end haircare in Asia and compare it with the rest of the world. So we're looking for Asia being better, larger,
growing more and more profitable than the rest of the world, or at least some market
segments in Asia. Now, the third question to answer for market
attractiveness is if competition is or tends to be reactive through price wars or by increasing
ad spent. What we don't want is to enter a market in
which competition is too reactive. Otherwise they may just undermine the profitability
of this markets and to test it, I just have to look at best behavior of competition and
their incentives to be reactive, in case we enter, of course. Now if we answer these three questions, we
will know if the market is attractive or not and if it is attractive, my next step would
be to look into product fit and there's two main questions here. The first is if the benefits and the positioning
of our product are correlated with the needs and wants of one or two or three large market
segments in this market, so want to see if our product has fit with what the demand wants
and next, if the market is lacking for a product with those characteristics, which would be
a nice thing and to do this analysis or just compared to benefits and positioning of our
products or brands, other players' brands and products and with what's each market segment
wants and needs and hopefully we can fill a nice gap here. Now if there's product fit, if the market
is attractive, my next step would be to look into distribution channels and there's too
many things to look here. First, if the distribution channels for haircare
products are open to new suppliers and I'd look into B2C and B2B channels, so drugstores,
supermarkets on the B2C side and distributors and wholesalers for hairstylists, for example,
on the B2B side. Also, I want to see if we can offer them the
incentives that they need to carry and promote our products. Now, I don't see why distribution channels
would be a problem, but I'd talk to them and talk to experts in Asian retail, in Asian
haircare to see if this really is not a problem or if there's things that we're not seeing. It. Finally, I'd look at sustainable competitive
advantage over our competitors and I'd look at three sources for it. First, if we can have a product advantage
due to patents or know hows. Second, if we can have a brand advantage because
we're European, so maybe they're smart, perceived quality or people perceive our product to
be celebrity status, I dunno. And third, if we can have a distribution advantage
by locking up channels. Now I don't believe this is likely because
we're new to the market, but maybe there is a possibility of locking up channels and getting
a distribution advantage. Well, as I've said, if these four broad questions
are true and the answer to them is strong, than I think we should go onto the market,
but I would do two extra analysis here. First is if investment pays off and here want
to know how quickly do we need to grow market share to pay off the investment and then to
do that, I'm just going to model the return over investment in different scenarios of
target market share and velocity. So if we are to get 10% market share in one
year, what's the investment required and what's the return or if we are aiming for 30% market
share, but we actually have two or three or five years, what's the investment, what's
the return? So I think some numbers to the table will
make the decision easier to digest for many of the people on the board and the CFO and
so on. And this is the, the reason for this analysis. And then the other one is a bit more strategic. What happens if we stay out? So I don't know what are the consequences
20 years from now or 30 years from now to not enter Asia. And to do that, I want to model how relevant
Asia is going to be in the market in the long term. So what is the share of sales and profits
of these markets of Asia compared to the rest of the world? Maybe 20, 30 years from now, I don't know,
80 percent of the profits of these markets are going to be in Asia. So we don't want to miss that, right? Uh, so I wanna know what are the consequences
in the long term, just to have a more strategic perspective, I'd start with market attractiveness
because I think it's the most important thing. If the market's not attractive, it's hard
to justify an entry. We would probably do better entering elsewhere
first. So I'd start with that first by doing those
two analysis. So by now you might be thinking, hey Bruno,
come on, I can never do that. But instead of getting anxious or overwhelmed,
uh, the, this is actually pretty tough to do, but you have to be aware that you don't
need to get to this level of tailoring for your framework in the case interview, it's
just so you can see what's possible. So in the spirit of seeing what's possible
and having an ideal goal so that we can aspire to, I want to tell you the three things that
I like about this framework and why I think it's much, much better than most frameworks
out there or then adapting a generic framework. So the first takeaway and the first thing
that I love about this type of framework is that it's fully customized to the problem. It's really tailored. What I mean by that is: most important issues
are covered if not all of them. They're covered in a prioritized way. So I'm telling the interviewer, I do this
first, if the results are positive, then I would say do this and then this and so on,
and there's absolutely nothing irrelevant in this framework. We can go back and try to look for things
that might not be relevant and you're not gonna find any because everything there has
a purpose. So that's the first takeaway maker structure,
fully customized so that your frameworks cover all or at least most of the important aspects
in a prioritized manner with absolutely no irrelevant stuff there. The second takeaway or the second reason why
I love this kind of framework is that it's to the point, so even though it's comprehensive,
it's exhaustive, I don't spend half the time rambling. I actually have four questions that need to
be answered, two extra questions that make the answer stronger. I have sub questions that if answered, will
answer the key questions and I have specific tests to answer these sub questions. So by making the structure as linked together
with specific things that I need to do to answer specific key questions and by doing
the key questions as kind of "if-then" statements, if this four things are true, then we should
enter the market. By doing that, I don't waste any time. I'm so to the point that every second, every
word spoken is actually useful and that's what you should be aiming for in your frameworks. You should be aiming for being to the point. And the key to do that is to have good key
questions and good specific tests that answer these key questions. And in my case, I like to have the sub-questions
in the middle and I think it's advisable to do so. So that's the second thing: Be to the point. And finally, the third thing that I love about
this type of framework and that you should try to implement in your own is, and I'm obviously
biased on this one, but I think this framework was communicated in a really clear, easy to
understand way, so you who's watching this or the interviewer who would be interviewing
me, can clearly see what steps am I going to take to solve this problem. What analysis am I going to make. So in practice this means that, uh, if this
were a real project, I could actually get each part of the framework and hand it to
different associates or to different consultants and they could understand why they're doing
that, go do it, and in the end we could bring the analysis together and put together a recommendation
to the client. So for example, I could get an associate and
ask him to discover if this market is attractive or not. I could get an analyst to find out if we can
open up distribution channels in Asia and so on. And in the end we could even estimate how
long this project would take with different staffing needs. So this is getting a little bit more into
how a consulting firm manages their project, but a framework that's really clear, easy
to understand has these characteristics as well. So I'm biased again, but the point is that
you can understand each step that I'm going to take and why and how and so on. So that's takeaway number three: Make your
frameworks, easy to understand, easy to follow, really clearly communicated. So by now I might be thinking, okay, Bruno,
cool. I want to learn how to build a framework like
that. You said it's pretty difficult, but I want
to do what it takes to stand out in my cases, and I really want to come up with a structure
like that in front of the interviewer because I know this will impress them. If that's the case, your next step should
be to go to our course on Case Interview Fundamentals. It's a free course and among other things
we teach you how to build frameworks from scratch so you can actually structure any
case without depending on having memorized the right framework from the right case interview
book. You can access this course craftingcases.com/FREECOURSE. Also, take a look at the rest of the channel. There's lots of interesting stuff, more advanced
case interview content as you've seen in this video, and if you like what you see, hit subscribe,
hit the alarm button so you're notified. We launch roughly two videos per week. And comment on the comments section what kind
of videos would you like to see in the future? I hope you've liked this video and I hope
you have a good day, a good evening, a good preparation for your case interviews and I'll
see you in the next one.
