Yale Graduate Consulting SIG

Market Sizing/ Basic Quantitative:

How many dump trucks would you need to move Mount Fuji?

Profitability:

A birth control division of a pharmaceutical company is not meeting its targets.  What should they do about it?

New market Entry:

A German encyclopedia publisher faces a shrinking domestic market and is considering expansion into Eastern Europe.  How should it think about the decision to enter or not to enter.

Government/Nonprofit:

One of our clients is an urban center for the arts.  How would you estimate the centers economic value to society?

Investment Decisions:

A client has extra cash lying around and is thinking about buying some television stations.  Should it?.

Product Development and Launch:

Kelloggs is thinking about launching a coffee line.  Should it?.

Mergers and Acquisitions:

If Sir John Browne came to and asked whether BP should merge with Amoco, how would you respond.

Industry Dynamics:

The utilities industry was de-regulated in the mid-1990's.   What effect will this have on companies in the industry and how should they prepare for the deregulated environment?

Frameworks

(By Frederik Bay)

Internal vs. External:

Cost/Benefit

Supply vs. Demand

Marginal Cost Analysis (Profit/New market)

• Fixed/Variable costs
• Raw materials
• Overtime payment
• Cost of getting new employ

Fixed versus variable cost

BCG 2*2 (Mergers/acquisitions)

3 C (Strategy/New opportunity)

Four P (Marketing/New Product)

Porter's Five Forces (Competition)

1. Barriers to Entry
2. Bargaining Power of Suppliers
3. Bargaining Power of Buyers
4. Substitutes
5. Rivalry amongst firms

Firm Analysis

Internal:

• Core competencies (strengths & weaknesses)
• Objectives, values, mission
• Company systems & resources

External:

• Industry trends
• Outside constraints:
• Governmental
• Legal

Competitor activities

• Unions, government regulations, parent/sister company relations
• Capacity constraints (cost increses in large jumps
• Not always economies of scale:
• Unionization, higher equipment cost w/ more production, raw materials
• Competitors actions do not always make sense
• Company culture

More Frameworks

(By Yale SOM Consulting SIG)

Value Chain Analysis:

• Raw Materials
• Inbound logistics
• R & D
• Manufacturing (Inventory)
• Outbound Logistics and Distribution
• Sales & Marketing
• Wholesailers
• Retailers
• Customer
  

Profitability Analysis:

• Revenues-Cost=Profit
• [Quantity*Gross Margin (Price-variable cost)-Fixed Cost] = Profit
• Things to remember: Overhead, Cost Allocation, Taxes, SG&A,Inventory, Distribution
  

Synergies/Complements:

• Examine the parties separately
• Examine them together looking for areas of leverage, duplication, cost savings, core competencies
• Consider financial, operational, marketing, cultural, etc. issues
  

Other Concepts:

• Product Lifecycle - Development, Growth, Maturity, Decline
• Core Competencies
• Experience curve/learning curve
• Relative cost position
• SWOT - Strengths, Weaknesses, Opportunities, Threats
• Product and market 2*2 - New/Old Product, New/Old Market
• Sunk cost, fixed costs, marginal costs, variable cost
• STP - Segmenting, Targeting, Positioning
• Elasticity of supply and demand