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M B A C O N S U L T I N G C L U BS E P T E M B E R 7 , 2 0 1 1

FRAMEWORKS IN DEPTH

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AGENDA

• Deloitte Feedback 

• Frameworks Overview

• Practice Scenarios

• Next Steps… 

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DELOITTE – WHAT‟D YOU THINK? 

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FRAMEWORKS OVERVIEW

• General Frameworks• 3 C’s • 4 P’s • 5 Forces• 7 S’s • BCG Matrix

• Value Chain• External/Internal

• “Waterfall” • Market entry

• “Roll Up” •

Volume and growth• “Cost Cut” 

• Costs

• “Harvest” • Reap profits from cash cow

• 12 Case Scenarios

 – 8 Strategy

 – 4 Operations

•Ask yourself, – “What kind of case am I working on?” 

 – “What are the case questions I needto answer?” 

 – “What key information do I need in

order to answer these questions?”  – Then, “What frameworks could I use to

best explore and explain the case?” 

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3 C‟S •

Company• How big? ($2.8 Billion helicopter manufacturer…) 

• Public or Private?

• Products or services?

• Markets?

• Competition•

Who are biggest competitors?• Market share?

• How has market changed?

• Differentiation?

• Strategic advantage?

• Customer•

Who?• What do they want?

• Needs fulfilled?

• Increase base? New customers?

• Losing customers? Why, who? (High volume callers, vs low volume…) 

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4 P‟S • Product

• What are they?

• Company’s niche? 

• Price

• Compared to competition?

• How determined?

• Priced correctly?

• Volume effects?

• Price-based costing vs. Cost-based pricing… 

• Place

• Supply Chain?

• Channels?

• Competition in areas we are not?

• Prime locations? Political barriers?

• Promotion

• How to market?

• Which market?

• Advertising?

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PORTER‟S 5 FORCES 

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BCG MATRIX

• Margins and cashgenerated are afunction of marketshare.

• Growth requirescash input tofinance assets.

• High market sharemust be earnedor bought.

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7 S„S 

Goal is to help managersanalyze their organizations andeffectiveness.

These are what make and

organization successful.

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VALUE CHAIN

• A value chain is a chain of activities for a firm operating in aspecific industry.

• The business unit is the appropriate level for construction of avalue chain, not the divisional level or corporate level.

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EXTERNAL VS. INTERNAL FACTORS(MARKET ENTRY)

• External• Market – size, growth rate, stage, technology• Customers - segmentation• Industry – barriers, suppliers, substitutions• Competitors – players and share, SWOT, niche?• Risk  – market, technology, regulation, foreign (ex rates)

• Internal• Strategy – fit, core competencies• Operations

• Marketing and Sales• Operations and Logistics• Finance and Control• Organization and culture• R&D

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SOME PRACTICE SCENARIOS

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DO WE ENTER A NEW MARKET?

CurrentMarket

Major Players and Market share

Product Differentiation

Barriers to Entry

Entering

If yes,

How?

No

Start from scratch

Acquisition

Joint Venture

Cost Benefit

Analysisof each

• Size•

Growth Rate• Customer Segmentation

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“OUR CLIENT IS THINKING OF ACQUIRING A DIVERSIFIED

COMPANY WITH HOLDINGS IN 3 DIFFERENT INDUSTRIES – ONEIS ENTERTAINMENT. OUR CLIENT KNOWS NOTHING ABOUT

ENTERTAINMENT. WHAT DO WE ANALYZE?” 

CurrentMarket

Life CyclePerformanceDriversClient’s Position Major Players

Industry ChangesProfitability, Margins

IndustryAnalysis

Suppliers

How Many?Product AvailabilityActivity, Changes?

Future

Players entering or leaving?Mergers and AcquisitionsBarriers to entry / exitSubstitutes?

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OUR CLIENT MANUFACTURES HIGH-END ATHLETICFOOTWEAR. SALES ARE UP BUT PROFITS ARE FLAT.

WHAT DO WE NEED TO LOOK AT?

Examine External /Internal Factors

AnalyzeRevenues

Revenue streams?% of total revenue per stream?Balance in %?

Changes? Why?

AnalyzeCosts

Volume

ID major costsMajor shift in costs?Anything seem out of line?Benchmark against competitors

Expand into new areasIncrease sales forceIncrease marketingReduce pricesImprove customer service

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