What is consulting framework? Consulting frameworks are the locks that unlock the gates to business cases that are successful resolve. These tried-and-true methods can help you make every session productive, whether you’re getting ready for your first case interview or need a refresher before a significant client encounter.
In this comprehensive tutorial, we’ll go over the definitions and What is consulting framework of the most basic consulting frameworks, their applications, and how to utilise them. Please keep a copy of this page for future use and use it as a cheat sheet to dazzle consulting clients.
What is consulting framework?
Frameworks for consulting are instruments made to address business issues. They can be tailored to more particular situations or utilised as pre-made cheat sheets to deal with diverse firms across industries. Once you know how to use them confidently, you can combine these frameworks for optimum effect or even develop variations.
These frameworks project to create what is known as an issue tree by decomposing and difficulties your clients are facing. You can delve deeper into the issue tree’s branches to identify the issue’s primary causes. It will provide you with a complete view of the state of the company you are consulting. It’s relatively unusual for consultants to identify several concerns in their initial meeting with a client, some of which may be unrelated or share a similar theme.
The MECE, which stands for mutually exclusive and collectively exhaustive, serves as the foundation for building these frameworks. It implies that while segmenting a problem, all influencing elements must be kept apart from one another without overlapping and cover all relevant regions without exception.
This essential logic is the foundation for all consulting procedures, ensuring that consultants don’t overlook any crucial information while simultaneously working to find answers as quickly as possible. Despite the typical misunderstanding of MECE, you may encounter specific sources; it is not a framework in and of itself but the guiding principle around all frameworks built.
Why Should You Use Business Consulting Frameworks?
Consulting frameworks offer models and recommendations as a place to start for your consulting sessions. They provide a road map for understanding every part of a firm, regardless of size. They can highlight details that could be missed in client interviews and instantly reduce a problematic issue. Even if you believe you’ve already covered the topics they involve, you should never underestimate how straightforward a modelling method or framework is What is consulting framework.
However, when resolving business problems, you cannot rely only on these frameworks. Analytical thinking and asking the proper clarifying questions are far more crucial for a successful case than merely guiding your client through a framework. Although these tools offer a great place to start, they frequently need to be modified or used in conjunction with other frameworks to be effective.
Repeat these templates as often as you can in practice settings to get the most benefit from them. It will help you discover the contexts in which they work best and how to make the most of their effects. You’ll be able to quickly create your frameworks on the spot for a specific business case as your comfort level with them grows.
7 Consulting Frameworks For Case Interviews & Client Sessions
Framework for profitability
The profitability framework is one of the most popular frameworks used in issues involving finances. It’s intended to mathematically deconstruct the problem of a company’s profitability before exploring the more qualitative facets of it.
Here’s how it works:
- Dissect the company’s profitability as revenues minus costs.
- Calculate the payments by multiplying the price per unit by the number of units sold.
- Separate expenses into a variable and fixed expenditures.
- Dissect variable expenses by dividing them by the number of units produced.
- Once you have your facts straight, you may investigate these figures’ causes and effects using various qualitative frameworks or further inquiries.
Japanese organisational theorist Kenichi Ohmae is the creator of the 3Cs framework. It focuses on the three main factors that make a business successful. The three Cs, which stand for clients, rivals, and company, can be further divided into the following parts:
Customers: customer wants, size and rate of growth of client segments, price sensitivity
Competition: the value proposition, brand, market share, development, and financial health of rivals.
The product line, profitability, core competencies, differentiators, financial performance, and resources.
This framework offers a thorough summary of the company’s advantages and disadvantages and makes an excellent place to start your investigation. You can find more potential problems than what is immediately apparent by gaining perspective on the company from a broad level.
The locations potentially containing the main problem’s core cause need to investigates further after you’ve identified these crucial regions. Then, to resolve issues involving the four components, you can employee additional frameworks that fit these particular functions.
Framework for Mergers and Acquisitions
Before purchasing another company, there are several things to take into account. These elements broke down into a straightforward thought process with the mergers and acquisitions framework. This framework comes in two different iterations. The first takes into account the following:
- The two companies’ organisational ideals and how well they mesh
- Their operational coordination
- Additional variables that could affect the choice include viability, legal concerns, or other cultural characteristics.
The target business, buyer business, market features, and the risks and synergies associated with the merger are other ways to use this framework. We can further subdivide the case into the following components within these larger ones.
- Market terms include size and growth, profitability, competition-related risks, and restrictions.
- Target business: financial standing, advantages, management team calibre, and compatibility with buyer culture
- Purchaser: Justification, finance, previous acquisitions made by the buyer, and timing of the purchase
- The synergies and risks section discusses the value of separate and joined entities, cost and revenue synergies, and the greatest failure risks.
- You are encouraged to expand these clusters as you see appropriate, just like you would with any other consulting framework.
4P/7P Marketing Mix
Jerome McCarthy first suggested the 4P Marketing Mix, a well-known paradigm for marketing consultancy, in the 1960s. It represents the following four things:
- Product:the advertised good or service
- Price: Each pricing strategy establishes the item sold.
- Place: The geographical location of the goods offered and the distribution networks
- Promotion: The tactics employed to advertise the product.
Later, this model was expanded into the 7P Marketing Mix with three additional components to examine service-based products. The following three different elements are:
- People: The clients or consumers and all other parties concerned
- Process: How things happen or how a business interacts with its clients.
- Physical proof: Everything is readily apparent, including the service’s packing and setting.
The Marketing Mix is an excellent planning and execution framework, especially for market entry campaigns or product launches in markets with high levels of competition.
Porter’s 5 Forces Model
Nowhere, Michael E. Porter, a professor at Harvard Business School, creates Porter’s Five Forces Model. Its goal is to assess the advantages and disadvantages of the business sector of the market. These are the five elements that make up this model:
- Competitors: The conflict around the industry
- Suppliers: Suppliers’ negotiating power
- Customers’ negotiating power
- The threat of new competitors joining the market:
- The threat of substitute products entering the market:
We can gauge the intensity of industry rivalry and forecast the company’s long-term profitability by mapping out these five forces.
Marketing Entry Framework
The market entry framework examines a new market that the company may eventually enter. Achievable strategies for success can be devised by carefully scrutinising the company’s capabilities and the financial implications of this choice. These four elements of the framework are as follows:
- Market: Size of the market, profitability, products offered, degree of competition, and restrictions
- a client’s capabilities nuances between the old and new markets, client experience with market entry techniques
- Financial Information: Present financial situation, price to join a new market, cost to remain in that market after entry, anticipated sales, and return on investment
- Timing, speed, whether to target a specific area or the entire market, merger potential and management style all go into entry strategy.
Pricing Case Structure
When choosing a product’s pricing strategy, all significant elements consider using the pricing case structure. A data-driven pricing decision determines by viewing the product’s cost. We can examine the following features to separate these quantitative and qualitative data points:
- Cost-based pricing, which includes the fixed costs of all goods, variable costs, the quantity produced, and profitability goals
- Value-based pricing: a product’s characteristics benefit customers financially, emotionally, and on other levels.
- Pricing is improper on rivals’ prices, available alternatives, and value comparison.
- These components, upsells and special offers blend into a comprehensive price plan for all product versions. The leading company strategy of profitability or market share may also impact the choice.
Each consulting case dissects into an issue tree, from the overall picture to the specifics. Even if it appears that your study has ended, there are always other segmentation techniques that can help you carry out your research to the branches’ tips. Almost every consulting framework allows you to consider both internal and external variables, qualitative and quantitative data, or financial and non-financial features.