Management Consulting and Case Solving
for Dummies
9. Growth Strategy Cases
Issac Jojy
PGP 2014-16
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I expect you to be completely thorough with the contents of Documents 7 and 8 before proceeding
any further. All the fundamentals for case solving have been covered there. I will not be repeating any
of that again.. This document as well as the following documents will only cover the other types of
cases and will not repeat the fundamentals to that level of detail I’ve gone to earlier
Growth Strategy Cases: Suppose your client has a lot of money coming in as part of investment
from some big private equity company or other investment firms OR if your client has a lot of money
has a result of its own revenue generation and the client is deciding what to do with the money.
Suppose the client decides – “OK. We’re in the growth phase. Let’s grow the company, Get a lot of
market share in whatever segments we’re playing currently or planning to play in the future and try to
consolidate the market” These kind of cases are called growth strategy cases. Unlike profitability cases,
the objective function here is either Increase Revenue within a particular timeframe OR Increase
Market share within a particular segment in which the client is operating within a particular timeframe
Revenue increase target will naturally result in a market share increase. Last year, some friends of mine
did know what market share meant – I know it is extremely basic stuff but just to ensure everyone’s
clear. Suppose an industry has 3 companies part of that industry. Suppose the sum of revenues of all
the 3 companies is INR 100 Cr and the split amongst the companies contributing to this 100 Cr is 50
Cr, 30 Cr and 20 Cr. The market share of those companies are 50%, 30% and 20% respectively – I
know some of you might be thinking – “That is so sad. Are there people doing an MBA who do not
know all this?” My answer to those folks – Remember – you’re a continuous learning machine. When
you came across this term market share for the first time in your life, you also would not have had any
clue. Forget about when you came across that term in your life. Everyone has to learn stuff at some
point. Just be happy you knew it at some point in life. If I gave you some very basic MBA jargon (basic
to me) and you do not understand that, will you like it if I thought the same way? So, just acknowledge
that everyone has to learn at some point in their life. I know I’m digressing a bit from the growth
strategy cases, but thought I should make my point.
Anyway, if the objective function is revenue, the target figures will be something like increase from
INR 100 Cr to INR 500 Cr in next 3 years. If it is market share, the objective function would be
increase market share percentage in a particular segment from say 20% to 60% in the next 3 years or
so. Unlike the profitability cases, the tools/frameworks that give you direction for growth strategy
cases are different and the costs involved are not really given a lot of importance because in the growth
stage of a company, the costs involved are all part of long term sustainable return. So in growth strategy
cases, we’re primarily bothered about the revenue and ways to increase revenue and NOT costs.
Step 1: Understanding a bit of the client business context:
(Same learnings covered in previous 2 documents to be collated and used judiciously – Practice and
you’ll know when to use what in a matter of time)
During this step, also please ask “What is the timeframe expected by the client for this growth to take
place”. The interviewer may say 1 year, 5 years depending on the requirement the client gives etc.
Ask about the reason why the company wants to focus on growth. Some of the reasons could include
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Data showing that current markets in which the client is functioning is declining. So the client
has to look at other markets and look at other revenue sources.
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•
Data showing that there are attractive opportunities available in other markets. So the client
might want to tap in on those opportunities and generate more revenue.
In this way, try to understand the reason why the client wants to go for a growth strategy. The reason
will give you better direction on what approach to follow.
Step 2: Set the objective(s)/goal(s) function
(Same approach as mentioned in the previous docs). Paraphrase the open ended question given to you
before Step 1 based on data you received from step 1 and state it out loud to the interviewer making
the objective function clear (Revenue increase within X years / Market Share Increase within X years).
Ask whether there are other objectives. Get the interviewer’s approval before proceeding forward.
Step 3: Reverse Engineer from this objective function ONLY based on data, ensuring MECE
at each stage to drill down to the core problem(s)
Once the objective function has been set as Revenue or Market Share, the most commonly used
framework to reverse engineer from the objective function is the Ansoff Matrix. It’s 2 X 2 selfexplanatory matrix, but really powerful tool to MECE all possible options to be covered as part of
formulating a client’s growth strategy. This was covered during the Marketing Management Course,
when I was a pgp1. I’ll just give a quick explanation of the 4 options possible for a company to grow
as part of the Ansoff Matrix.
Option 1: Market Penetration – The client currently functions with a portfolio of products or services
in particular segments of the market. When the client focuses its growth around these same products
and services in the markets in which the client is functioning currently, that is called market
penetration. For example, let’s take ABP. In the previous documents, I had mentioned that ABP has
only 2 stores – one at IIMB and one at MG Road. Suppose ABP, as part of its growth strategy decides
to a lot of advertisements at both these stores and give the customers food vouchers, discount
coupons etc., there will be a spike in demand for its existing products and services within the existing
markets. This will lead to a revenue spike. The cost involved in discounts/promotions/ads is not the
primary focus since the objective is revenue increase. This is a simple example of market penetration.
Option 2: Market Development: I think it’ll be easy to explain using the same ABP example. Suppose
the ABP management decides to open up new stores in Koramangala and Indira Nagar. In this case,
they’re using their existing products/services and getting into new markets/spaces. This will also result
in revenue increase. This is a simple example of market development.
Option 3: Product Development: Earlier I had mentioned that ABP had only 2 products – Mango
Lassi and Hot Chocolate. Suppose ABP introduces a few more products to get a larger customer base
in all its stores (Eg. Products like Chilli cheese toast or brownie etc). In this case, within its existing
markets, the client is developing new products/services. These products and services are developed
based on market research and extensive customer surveys and analysis (A lot of your elective courses
after Term 2 teach you this). Anyway, so this is a simple example of product development.
Option 4: Diversification – So this is just a combination of Option 2 and Option 3. Suppose ABP
gets into new markets like Koramangala and Indira Nagar with its newly developed products and
services in addition to its existing offerings, this is an example of diversification.
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The ansoff matrix has been summarized below. Don’t worry too much at this stage if this is seeming
a little too theoretical because it is on paper. You just need to practice cases with these frameworks
keeping the data-centric MECE mindset and with time, you’ll be able to handle any growth strategy
case.
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A couple of tips in Step 3 for Growth Strategy Cases
1. Do not explicitly state that you’re using the Ansoff matrix. In general, whatever frameworks
you’re planning to use, DO NOT state it out loud to the interviewer that you’re using a
framework. Use these frameworks only as tools for your logic to flow and make the interview
seem like a normal conversation. Like for example, after asking for time to write down your
thoughts, you can make statements like “Broadly, I believe we can achieve growth through 4
paths” You can show them the 2X2 matrix that you write down on your rough sheet and tell
them crisply what each of the buckets represent.
2. Within the limited time frame of an interview, it might not be possible for you to get into all
4 buckets and analyze how the client can grow the business. So, use 80-20 rule and get the
interviewer’s buy in before reverse engineering further to come to the final conclusion. For
example, if the interviewer says that “Market penetration is already at a maximum for the
client”. Then state out loud that “Ok. Then we’ll not focus on that for the scope of this
analysis. I’ll move on to the other three. Do we have any data from the client to show that one
of these 3 has more potential so that I can prioritize and attack the problem? If not, can I get
into market development” After getting the interviewer’s buy in proceed further on each.
Don’t try to boil the ocean by trying to come up with recommendations on each of the 4
verticals. Even in an actual consulting assignment, there isn’t so much time available. So
depending on data from the client, the consulting firm uses 80-20 rule, prioritizes and analyzes
to come up with recommendations.
3. Suppose the interviewer directs you to get into one of the buckets – For example the
interviewer asks you to get into Market development. How to proceed further is something
dependent on the client context. Again, don’t worry if you don’t have complete clarity now.
Will come up practice. In this case, if we use the tools given in the pictures above for market
development, the various options available are geographic expansion, new channels to
distribute the products/services etc. After taking a few seconds to think about the various
options within Market development, show the interviewer your options and proceed forward
as per data given by the interviewer.
In the picture just given above, at the end, there is a small section categorized under “How?” This will
be handled in the next Step. Unlike Profitability cases, where the core intent was finding the root
problem through reverse engineering and then giving recommendations, the case here is different.
There is no problem as such. We’re formulating the future strategy on what to do for future revenue.
So the final step is different in this case. The final step is more of summarizing the findings as a result
of the analysis from Step 3 and giving an idea of HOW to go about executing the strategy. So, this is
slightly different from the profitability cases.
Step 4: Recommendations: How to go about executing the strategy formulated
For each of the buckets (market penetration, market development etc), there will be different
recommendations possible based on the client context and analysis.
For example, suppose market penetration for ABP was the part which was focused. And when
suppose we realize that there is a lot of scope to get more customers with the existing products and
in the existing market itself. The “How” part will address things like Advertisements, promotions,
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discounts etc. And end it by asking “Is this sufficient or do you want me to look at more options?”
This is a simple example of how the recommendations flow from the analysis.
A very important one – New market entry – Suppose as part of the formulating the growth strategy,
we analyze using the Ansoff matrix and we realize that a particular market has high potential and we
want to enter the market. This comes under New Market Entry cases. Our hypothetical ABP client
with just 2 stores entering the
Another one would be something like – Suppose ABP wants to do market development and get into
Koramangala and Indira Nagar and currently suppose ABP does not have the capability to get into
these markets say, because of real estate space constraints in these areas. ABP can think of acquiring
other small food joints in these areas. There is an analysis that will be done in an actual consulting
assignment before this acquisition is done. Acquisition is an important sub-part of how to go about
New Market entry cases.
During a 20 minute case interview, it’ll be very rare that you are asked to do this analysis. So don’t
worry one bit that you’ll have to do all this. There is a framework for new market entry and acquisition
that will be discussed in later documents. You need to be aware of these and the cases that might be
asked might be like “ABP wants to enter Mumbai market as part of its long term growth strategy.
Help out ABP” Now it becomes a new market entry case flowing from a growth strategy case. So the
cases will not be big huge cases. The primary intent of these cases is to see whether you can logically
break down the problem ensuring MECE and reverse engineering using data. I believe that more than
the speed at which you crack the case, the clarity of thought in breaking down the problem is more
important. Initially, even if your speed at cracking a case is slow, with time and practice, your speed
will improve as well.
There are examples of these cases in the reference document I’ve attached (Document 16) as well as
other resources that ICON will send you. Prioritize and solve a few cases of each type.
That’s about it when it comes to Growth Strategy Cases. All these cases and frameworks I’ve
mentioned till now and will be mentioning further – Unless you practice, screw up, practice again,
screw up again and then practice more, you’ll not get better. It’ll only seem like theoretical paper work
on a pdf file. In terms of concepts, there’s nothing much more to it. All that’s remaining is practice.
Next up – New market entry cases
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