You are trying to memorize a dozen different
frameworks and then you found Victor Cheng's Business Situation Framework, and now you
feel happy. You have one framework, you can solve a dozen
different cases with it. But there's still that uncertainty within
you. Can one framework actually solve almost all
types of business cases. Is the business situation framework always
MECE? Hey everyone. I'm Bruno and in this video I'm gonna share
with you a few tips on how to use the Business Situation Framework. I'm going to share with you when you can use
it, when it cannot use it, and also I'm going to show you how to adapt this framework to
your specific situation. So for those of you who don't know it, the
Business Situation Framework is a framework used to structure consulting case interviews
or business problems and it does so by breaking down a business problem into a customer analysis,
a competitor analysis, a company analysis and product analysis. Now, it is the best friend of every beginner
in case interviews and the reason is that it lets you structure "any" case without you
having to memorize a dozen different business situations. So it doesn't matter if your client is trying
to enter a market or acquire a competitor or launch a new product or verticalize backwards. You can use the business situation framework
to structure those types of cases. But can it really do it? Can the business situation framework actually
help you structure any business case? And if so, who is the genius we invented it? It was Victor Cheng himself. Well, another question that I get asked a
lot: do real McKinsey consultants actually use the business situation framework to structure
their client's problems? Short answer is no, but anyway, a little history
will help you understand where does this framework come from so you can know when you can use
it and when you cannot use it. The business situation framework is actually
not an original framework. It is a derivation from the 3C's model, which
is a model to describe or understand strategy that was created by an ex-McKinsey senior
partner named Kenichi Ohmae in the early eighties. So, this model had the customer's analysis,
the competitor analysis and the company analysis. My guess is that Victor Cheng got this model,
saw that it worked for a lot of strategic problems, added the product category because
you need the product analysis in a lot of the case interviews that you're gonna face
and then called it the business situation framework, so if you want to understand better
the origins of this framework and where it came from and how to use it better, you can
read this book: The Mind of the Strategist. It was written by Kenichi Ohmae himself. It's full of insights and how to use the 3C's,
how to use issue trees to better understand your client's strategic problems. Either if you're a consultant or going through
case interviews. Now obviously you don't need to read this
book to do well in the case interview. I only read it after I left McKinsey, but
it's a really good book, so if you want to pick it up, I'm going to put some information
on the description below. So now that you understand better, where this
framework comes from, let's jump right into the tips on how to use it. So tip number one is to ONLY use it in competitive
business strategy cases. So the 3C's are the basic elements of a competitive
business strategy. Every market has customers who have some problem
to be solved. It has your company trying to solve this customer's
problems with their products or services and it has the competitors of your company doing
the same. They're trying to solve your customer's problems
with products and services. Now it only makes sense to add the product
category in most cases because the products are the main interface between the companies,
yours or your competitors and the customers problems, that's the main way they interact. Now, one implication of all this is that you
can use the business situation framework whenever you have a business-related competitive strategy
problem, because the 3Cs framework, which is the one that originated this one, was created
for business competitive strategy. So if you have a problem of this type, you
can use that framework. What this also means is that you cannot use
this framework when you have a different type of problem. So for example, if you have a public sector
problem, that's not business, that's not competitive strategy, you can't use it, or if you have
a business problem that's not strategic. So for example, we have an operations problem
or you have a finance problem, how to finance my new factory or my new business line or
whatever, those are not competitive strategy problems. So you can't use them. You can use the business situation framework
to solve them. Or even if you have a strategy problem that
is not COMPETITIVE strategy problem. So for example, have a supply chain strategy
problem or you have a media strategy problem. Those types of problems are not competitive
strategy. There are strategic, but they're related to
something else that's not competition. So you can't use the 3C's framework for those
types of problems. So tip number one is to only use the business
situation framework when you have a business-related competitive strategy problem. Tip number two is to adapt it a lot. So even if you have a business-related competitive
strategy case, does that mean that you should use the business situation framework? Do real McKinsey consultants use the business
situation framework or the 3C's when they have this type of problem? The answer is no. During my time at Mckinsey, I have never seen
anyone using the 3Cs, the business situation framework to solve any client's problems. And the reason is, it's just too basic. Maybe they did use it in the eighties, but
right now it's just common sense. You're not adding any value if you bring these
basic ideas to the table. So what that means is that if you choose to
use the business situation framework, you have to adapt it a lot. So how do you adapt it? Well, you can add new categories that might
be relevant and you can also go deep into each category and do very specific analysis
that are very useful for that specific case. So for example, if you have an automotive
case, you cannot the Suppliers category, that's really important for a strategy in the automotive
business or if you have an airlines case, you might want to add the Regulators category
because they're really important for the airline business or if you have, if you're launching
a new consumer packaged goods, so a new line of shampoo or hair care, you might want to
add the Distribution Channel category because they're really important for that type of
business. Also, don't forget to go very deep into each
bucket and do analysis that are specific for that industry, for that type of problem within
each bucket. This will make up a little bit for using a
generic, common sense framework and the deeper you go, the more relevant categories you add,
the more customized your framework is going to be for your specific case. Tip number three is to make her framework
MECE enough. So a lot of people come to me and ask if the
business situation framework is MECE or not, which is actually the title of this video
and what to answer to them is I can't tell. You need to tell me what problem are you trying
to use this framework to solve, because if it's MECE or not, if it's exhaustive or no,
it depends on the type of problem you're trying to solve. So you're probably gonna need to adapt it
a bit. So it's related to the last tip. So you have to make it MECE enough, you look
at your problem that you're trying to solve and you add all the really relevant categories
that you think are relevant, at least to solve the problem and that's going to make it more
exhaustive to that problem. Do you have to be perfect? Probably not. If there's a category that might be relevant,
but you're not really sure either add it or not, or mention the issue in another part
of your framework, but you have to be MECE enough. Same within each bucket. You have to think of the issues and the main
questions and hypotheses that you have that are really important in that industry, in
that type of problem that you're trying to solve and you don't have to be perfect again,
but it has to be MECE enough. Now all this adapting takes work so you might
not be liking what you're hearing. Maybe you're looking for a magic pill or a
silver bullet that works and I'm sorry, but I'm not going to be the guy who brings you
that. If you're looking for that, there's a bunch
of other channels or blogs that "teach you frameworks", but I wanted that because that
doesn't work. Your interviewer wants to see how you think
about the problem, what unique ideas you bring to the problem, because that's what the work's
about. You can't copy-paste your way into consulting
because they're not looking for people who can copy-paste. They're looking for people who can show original
thinking. And finally, tip number four is to think of
it as training wheels. So people love this framework, especially
when they're starting out because it's super simple. It makes their life simple, and when you're
starting out, everything's overwhelming, so you just want to keep some stuff stable under
control before you can learn the rest, and that's fine. That's okay. It's okay when you're learning something new
that you keep some stuff stable, something stable and under control so you can learn
the rest, and then you go back and make it variable again. It's like when you're trying to learn to ride
a bike, you have your training wheels, so I have to worry about balancing. You don't have to worry about that initial
push when the bike is standing still and it's more likely to fall. You learn everything else and then you go
back, take the training wheels off when you can, you know, handle the direction and what
to do with your head and everything. You go back to take your training wheels off
and then worry about the balancing and the initial push. Think of the business situation framework
the same way. Think of them as training wheels. So if you're trying to go to an interview
and use the business situation framework to impress your interviewer, that's probably
not a good idea. Most interviewers nowadays, they want to test
your ability to come up with your own structures, not to memorize structures, so they'll give
you a case that's not on competitive strategy. At least one in your whole recruiting process,
or even if it's a case on competitive strategy, they're going to give you a case that's so
different, so nuanced that you're probably not going to get away by using a premade structure
without a lot of adaptations. So if you want to use the business situation
framework so that you don't have to learn frameworks, uh, in your first 10 or 15 cases. So that you don't have to learn how to structure
your own cases. That's fine. You hold this constant and then, uh, you learn
how to solve cases in general and eventually one day return to your training wheels and
you get rid of them. You learn how to structure your on cases. Now if you're going to interviews with the
business situation framework or any premade frameworks for that matter... That's like trying to go to a biking competition
with training wheels. I mean no one's gonna laugh at you in the
consulting firms as they would in the biking competition. But you're be like, "who the hell is this
guy?" And that's not what you want. What you want is to show them that you can
think originally. So you need to learn how to solve cases and
you need to learn how to structure cases, but you can use this framework to help you
early on. So you don't have to learn how to do both
things at once. So what should you do now? Well, if you've been using the business situation
framework, and you want to quickly find some techniques to make it better and more specific
to the case and how to adapt it, I'm going to put a video up here now. It's on three simple techniques. You can use in your business situation framework
to make just that. Make them more adapted, more specific to your
problem. Now, if want to go a step further and learn
how to create MECE structures from scratch, I've created a whole playlist on the 5 ways
to be MECE. So the business situation framework, is a
type of conceptual framework, that's just one way to be MECE. There are four others. There's a whole playlist on that. If we're going to case interviews and you
know how important being MECE is, I recommend that you watch, if not the whole playlists,
at least the first video because it shows an overview of the 5 ways to be MECE. It's so helpful because when you have to structure
a problem, you know what your options are. I highly recommend you watch the whole playlist,
but watch at least the first video and if you want to learn how to create your own frameworks
from scratch, if you want to do some exercises, some drills on that, and see how you perform,
there is a free course that we make available to you at craftingcases.com/freecourse. It teaches you many other things besides that,
but that's one of the core things in the course I highly recommend you take it. There is no catch. We just make stuff available to you, some
of our best stuff and it's not something that you're going to find elsewhere because my
partner, Julio and I have developed these techniques over the years by coaching candidates. We didn't borrow it from someone else or steal
it from another person. We just created it and it's really helpful. So you might want to check it out at craftingcases.com/freecourse. Even if you do that, I still recommend you
go watch the 5 ways to be MECE because a lot of this stuff in those videos is not in the
course. So hope you've liked this video, if you did
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