Starting, running or growing a business can require the acquisition and utilisation of a wide range of resources and capabilities and typically involves a huge degree of risk. Consequently, the reality is that many new businesses fail. Key strategic and operational challenges include: controlling/reducing costs and maintaining/boosting revenues (dealt with in the previous section of this handbook); ensuring a company has adequate resources and capabilities to compete with established competitors; ensuring sufficient financing is in place; negotiating complicated and/or restrictive regulation; and generally mitigating and overcoming any risks and uncertainties that arise (for instance, when entering a new market).
Business Situation Framework
There are a wide array of problems/issues to which this framework can be applied and it tends to be relevant in the vast majority of interview case studies. The Business Situation Framework can help you to consider and tackle issues clients may be facing (for instance, a decrease in market share or the entry of new competitors into the market), or proposed courses of action that they may be considering (for instance, expansion into a new market, the acquisition of a new client-base within their existing market, or the introduction of a new product or distribution channel).
This framework focuses on the analysis of four key elements that together have a strong impact on a company’s profitability and general success. These elements include: (1) the company itself (2) the company’s product offering (3) the company’s customers and (4) the company’s competitors/market. The first two elements focus on internal factors whilst the latter two focus on external factors. Depending on the nature of the problem you are facing, different aspects of each of these factors can be considered and analysed in more detail.
Examples of questions you may be asked
- Our client is an estate development corporation. It is looking to build an apartment complex very close to London’s financial centre. Which key areas should be examined to decide whether this is a good idea?
- Our client is a budget airline considering entering the market for business class flights throughout Europe. They want our advice on whether this is a good and feasible idea and if so, how they should proceed.
By Jake Schogger - City Career Series