The Case Types, and How Each One Is Solved

Profitability

The most common type. Profits have fallen or are below expectation, and the client does not know why.

Drive the profit tree and be systematic about narrowing. Is the fall in revenue, cost or both? If revenue, is it price or volume? If volume, which segment, channel or geography? If cost, fixed or variable, and which line? Get to the located issue before theorising about causes, because a diagnosis without a location is a guess.

Then ask two questions that separate strong candidates. Is this happening to competitors too, which tells you whether the cause is the market or the client? And when exactly did it start, which usually points straight at the cause.

Market entry

A client is considering a new geography, segment or product. The trap is treating it as a research exercise and producing a description of the market.

The decision has four parts: is the market attractive in size and growth; can we win in it given the competition and our capabilities; does the financial case clear our hurdle; and what is the best way in. That last one is frequently where the real answer lives, because build, buy and partner have different answers and most candidates never raise them.

Always ask what success would look like and by when. An entry that is marginal on a five-year view and clearly good on a ten-year view is a different recommendation depending on the client horizon.

Growth

Broader than market entry and more open. The client wants to grow and has not decided how.

A clean decomposition is to separate growth within the current business from growth outside it. Within: sell more to existing customers, win new customers in current segments, raise price, improve retention. Outside: new segments, new geographies, new products, acquisition.

Size the options roughly before going deep on any one. A candidate who spends ten minutes on a channel worth two per cent of the target has demonstrated exactly the failure of prioritisation the case was set to find.

Pricing

A specialist type that appears often because it is where consulting demonstrably adds value. Three approaches, and a good answer uses all three and then chooses.

• Cost-plus: what it costs plus a margin. Sets a floor and tells you nothing about what the market will pay.
• Competitive benchmarking: what comparable products cost. Useful, and it anchors you to a market that may itself be mispriced.
• Value-based: what the product is worth to the customer, measured as the economic benefit it delivers versus the next best alternative. This is the one that produces the interesting answer and the one candidates most often omit.
• Then consider the shape of the price as well as the level: subscription against one-off, tiering, bundling, and what each does to volume and to the competitive response.

Mergers and acquisitions

A client is considering buying a company. The structure is stable: is the target market attractive; is the target a good business within it; what is it worth to us including synergies; and can we integrate it.

The questions that distinguish a strong candidate are about the last two. Revenue synergies should be treated sceptically, because they are routinely overestimated and rarely delivered on the promised timetable. Cost synergies are more reliable and carry one-off costs to achieve them. And integration risk is where most deals actually fail, so raising it unprompted is a genuine signal.

Always ask what the alternative use of the money is. Buying a company is only good if it beats building the same capability or returning the cash.

Cost reduction

A client must take out a stated amount of cost. The mistake is to start listing costs.

Start by sizing the cost base and finding where the money is. Break it by category, then benchmark against competitors or internal comparators to find where the client is out of line. A depot costing thirty per cent more per unit than an identical depot is a specific and defensible target; a general instruction to reduce overheads is not.

Then distinguish between cost that can go without consequence and cost that is buying something. The strongest answers separate the two explicitly and name what the client would be giving up, because a plan that hits the number and damages the business is not a recommendation.

Operations and capacity

A factory cannot meet demand, a service is too slow, a network is inefficient. These reward concrete thinking and frequently defeat candidates who are only comfortable with strategy vocabulary.

Find the bottleneck. Walk the process end to end, identify the constraining step, and understand why it constrains: capacity, changeover, quality, labour or scheduling. Then evaluate the options against it, which are usually some combination of adding capacity, removing variability, resequencing and shifting demand.

Do the arithmetic properly. These cases typically carry a throughput calculation, and getting it right is most of the marks.

Private equity commercial diligence

A fund is considering buying a company and wants a view on the market and the target position in it, usually in three weeks. This case type has grown with the deals practices and appears frequently at firms with private equity clients.

The structure is a market view and a company view, joined by a question about whether the business plan is deliverable. How big is the market, how fast is it growing and why, is that growth durable; how is the target positioned, is its share defensible, what do customers say; and does the forecast in the seller plan follow from any of that.

Two questions give you an edge here. What would make a buyer walk away, which shows you understand the purpose of the work. And how would we test the key uncertainty in three weeks, which shows you understand the constraint.

Recognising the type without being trapped by it

Naming the type to yourself is useful; announcing it is not. "This is a market entry case, so I will use the market entry framework" is precisely the recited approach the type recognition was supposed to help you avoid.

Use it privately, as a head start on where the answer usually lives, then build the structure from the specific objective in front of you. And stay alert to hybrids, because real cases mix types: a profitability case that turns into a pricing case, or a growth case that becomes an acquisition question, is extremely common and is usually the point of the case.