The Business Situation Framework can help you to consider and tackle issues clients may be facing or proposed courses of action that they may be considering. Below is an example of how the framework can be applied.
"Our client, GoodBattery, produces alkaline batteries and currently operates only in the UK market. GoodBattery is now considering entering the Kuwaiti market and wants your advice on whether this idea is viable."
"To start off with, I would like to hypothesise that GoodBattery should enter the Kuwaiti market. In order to confirm or reject this hypothesis, I would first like to look into four key areas, namely Company, Product, Customers and Competitors/Market.
- Company: as far as the Company aspect is concerned, I would like more information on GoodBattery’s current financial situation. Entering a new market is typically a very costly venture so it is therefore essential that the firm is enjoying healthy profits and has not taken on so much debt that it will be unable to secure finance (e.g. a loan) to help fund the venture. I would also like to know what the firm’s key strengths and weakness are and whether it has any unique selling points. This information would allow me to gain a better understanding of whether GoodBattery is well poised to enter the Kuwaiti market.
- Product: Next, I would like to learn more about the products the company offers. In what ways are they superior to other products available in the market, both in the UK and in Kuwait? Furthermore, in what stage of the product life cycle are GoodBattery’s products? If the market for alkaline batteries is in fact growing, this may add to the argument in favour of expansion.
- Customers: I would also like more information on the key customer segments in GoodBattery’s market. What are the sizes of each segment? How do these segments compare with customer segments in the same market in Kuwait? Our hypothesis would be (to some extent) supported if the relative size of the key customer segments in both the UK and Kuwait are similar (assuming that GoodBattery is currently operating a successful business in the UK). In addition, are our customers price-sensitive? Will this be the case in Kuwait? If so, would we be able to offer prices that are either lower than or equal to those charged by our competitors.
- Competitors/Market: Finally, I would like to learn more about the legal environment in Kuwait. Are there strong patent laws? If not, could competitors easily copy our product? If competitors could easily copy our product, this could impact negatively upon our success following expansion. What are the growth rates of the alkaline and non-alkaline battery segments respectively in Kuwait? I would also like to know more about the key players in the Kuwaiti market and their respective market shares. If our direct competitors are part of a very fragmented market and are not particularly well-established, expansion may seem like a more attractive prospect, thus supporting our initial hypothesis."
Note, at this stage, you would then assess the information received from the interviewer in response to your questions in order to refine your hypothesis and reach a conclusion. The interviewer may subsequently ask you further questions relating to the same case study, for instance whether there are alternative options for expansion that are perhaps more suitable for the client. Tackling this question may require you to first ask the interviewer why GoodBattery considered entering the Kuwaiti market in particular. You could then consider how else GoodBattery could achieve the results that it had hoped entering the Kuwaiti market would achieve.
By Jake Schogger - City Career Series