Consulting Interview Case Preparation: Frameworks and Practice Cases

Key Concepts

Although consulting interviews will test you for fit, the interviews are mostly meant to probe your understanding and intuition of strategy and business analysis. The interviews are essentially giving you condensed versions of real-life cases, and it’s your job to provide solid analysis and recommendations to the interviewer in the 20-30 minutes you have for each case. Six frameworks are key to both illustrating your knowledge of strategy, and helping you crack the interview case. By the end of this chapter, your knowledge of strategy will make even Michael Porter proud! (And if you don’t understand the last reference, it’s time to start studying!)

Framework #1: Porter's Five Forces

The five forces are the most common framework used in case interviews, and perhaps the field of strategy in general.

The five forces describe the competitive landscape of an industry. Naturally, an extremely competitive industry is one in which we should expect firms to earn small margins, and to re-turn only their cost of capital. An extremely uncompetitive industry will have firms that enjoy fat margins, and reap returns above their cost of capital.

Five forces analysis will tell you if an industry as structurally attractive or unattractive. An unattractive industry doesn’t mean a firm cannot be successful. Rather, it means that the firm’s strategy should aim to mute the unfavorable aspects of the industry. Looking at the five forces of the industry along with a profile of a firm’s strategy will tell you if the firm’s strategy is congruent with the nature of the industry.

The five forces are listed below:

(1) Bargaining Power of Customers – When analyzing an industry, we seek to find out how much bargaining power the Industry’s customers have. Industries with high bargaining power of customers are those in which buying is concentrated within a few customers, if there is little switching cost to change vendors,