Mastering the Business Situation Framework for Case Interviews

Consulting firms use a special type of interview, called a case interview, to test whether candidates have the skills to understand and solve real business problems.

These case interview questions cover many business situations, including market entry, profitability, mergers and acquisitions, product development, pricing, and others.

In this article, we’ll teach you the Business Situation Framework and how it can be applied to common case interview questions.

Overview of the Business Situation Framework

What is a case interview framework?

A framework is a template that can be applied to break down and solve case study questions. It aids candidates by giving them a clear approach to resolving the case question they are given. 

However, frameworks are just a starting point. They should be customized according to your own thinking and understanding of the case question.

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What is the Business Situation Framework?

The Business Situation Framework is a flexible case interview framework that is used for market expansion, growth, and product development questions.

It uses the well-known 3C-1P format:

  • Customers: Understanding customer demographics, needs, and pain points.
  • Competitors: Understanding the competitive dynamic of the market.
  • Company: Understanding the internal capabilities of your company.
  • Product: Understanding the value proposition and go-to-market of your products.

Business Situation Framework

How to apply the Business Situation Framework

Unlike some other case interview frameworks, the Business Situation Framework doesn’t give you a step-by-step process to answer case interview questions.

Instead, it ensures that you’re asking the right questions to capture the important information in the case.

As the interviewee, you should methodically work your way through each of the key groups. The most logical order is product, customers, competitors, and finally company.

Product

Key questions you should ask include:

  • What is the product?
  • What specific customer needs does the product serve?
  • What is the unique selling point of the product?
  • What is the go-to-market for our product?
  • Are their product substitutes in the market?
  • Is the product considered a commodity or is it differentiated?
  • Where in the product lifecycle is the product? (i.e. introduction, growth, maturity, or decline)?

Customers

Key questions you should ask include:

  • Who is the target customer? What do their demographics and psychographics look like?
  • How does the company segment its customers? 
  • What are the key customer needs or pain points?
  • How loyal or “sticky” are the customers to their preferred brand?

Competitors:

Key questions you should ask include:

  • Who are the main competitors in the market?
  • What are their products?
  • What market share does both competitors and our company control?
  • What are they doing differently in terms of both value proposition and go-to-market? (e.g. product positioning, pricing, distribution, etc).
  • Do we expect any market entries or exits?

Company

Key questions you should ask include:

  • What are the key strengths and weaknesses of our company? 
  • How effective our our key capabilities? (e.g. people, processes, technology)
  • What is the financial position of our company?
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Advantages and disadvantages of the framework

Advantages

  • It is simple but comprehensive. The Business Situation Framework is simple and easy to remember but covers a broad range of considerations for common case interview questions.
  • It is highly versatile. The Business Situation Framework can be applied to almost any type of case, so it’s both a great starting point and a great backup framework.
  • It is a great supporting framework. Even if you’re using a more specific framework for your case interview question (e.g. the Profitability Framework for a business margin question), you can also apply the Business Situation Framework to ensure you haven’t missed anything.

Disadvantages

  • It is generic. Your case interview response should be tailored to the specific question you’re given, so you’ll need to customize the Business Situation Framework during the interview. You’ll be penalized for applying a generic framework to your case interview question.
  • It gives you questions, not solutions. Unlike other frameworks, the Business Situation Framework will help you uncover important considerations but it won’t help you generate solutions.

Example business situation case interview questions

Example 1: Beer Company

A major US beer company, Beer Brew, recently entered the UK market. Two years after entry, the company is still losing money. Despite a high per capita consumption of beer in the UK market, sales have been very disappointing. What explains this phenomenon?

Example 2: Credit Union

You are a consultant whose services have been retained by a credit union that serves an army base and a number of rural communities in Montana. This business has been around for a long time. Its profits have been declining and it is losing market share to several new competitors. The credit union has a main office and 5 branches.

You are being briefed that day at 9:00 a.m. by the President, who tells you that you will have a meeting with the CEO at 3pm to tell him the things you would look at. The President also tells you that he is planning to quit. What things would you want to know in order to quickly determine the problem areas in the company? 

Example 3: Cosmetics Company

Eurocos, Inc. produces and sells various cosmetic products in several European countries. The company’s different brands are well established in the markets. The various products are quite similar in terms of raw materials and production. The company has been doing very well in the past; however, profits have been shrinking in recent years. The CEO of Eurocos, Inc. thinks of changing his strategy in the industry. He asks you if this is a good idea and what he should do.

Example 4: Cable TV (Venture Capital)

Two years ago a venture capital company purchased a cable TV system that had access to 3 million households in Arizona and New Mexico. The VC firm was attracted to the extremely large subscriber potential, and the potential for considerable return. Despite their best efforts, they have failed to turn a profit in the past three years. You have been hired to determine if they can turn a profit or if they should sell.

Example 5: Lumber Mill

You have been hired by a Canadian timber company that processes trees from the forest to timber products (boards, etc.). They have been making more profits than their direct competitors and do not understand this phenomenon. You have been hired to find out why.

Example 6: Food Manufacturer

You’ve been hired by the Kraft Desserts Division Manager to help solve a problem with Cool Whip (the non-dairy dessert topping). Cool Whip has been a cash cow for Kraft. It has an 80% share of market, low production costs and extremely high margins. Sales of Cool Whip have been flat for the past three years despite aggressive sales efforts. The divisional manger believes sales have peaked (80 % share) and is ready to sit back and milk the profits. Before presenting his recommendation to the company president he hired you to determine if there are opportunities to increase revenues in the US and/or opportunities to enter a foreign market

Example 7: Cheese Producer

Frank’s cheese company has been producing very high quality cheese for distribution and sales in the upper East Coast for over thirty years. Their main competition over these thirty years comes from Joe’s cheese company, which also produces very high quality cheese. These two competitors have had a friendly rivalry over time and each holds about a 30% share of the market. Recently, Frank and Joe have seen their profits drop. Frank blames the decline in profits on increased advertising and promotional spending. You have just a few minutes to determine if Frank is correct and suggest solutions. How do you proceed?

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