Profitability is the most common type of problem in case interviews, which means that the Profitability Framework is the first one that every potential consultant must master. You always have to hit the nail on the head, there's no way around it. In case interviews, the cost-effectiveness framework is used to mathematically break down the problem, before moving on to more qualitative frameworks to devise solutions. In my video, I referred to the Business Situation Framework with the most revealing expression “3C&P”, based on the fact that it derives from the famous 3C Framework.
These four letters mean “company, customers, competitors, products”, areas that the framework analyzes to obtain solutions. There is no official name for this framework, but since it is used by McKinsey consultants when faced with an M&A problem, I would simply call it the “McKinsey M&A Framework”. In most cases, interviews tend to use marketing mix or business situation frameworks, but even a SWOT analysis can yield some ideas. As you can see, the candidate tried to collect information about the case through the stages of reproduction and clarification; as a result, he correctly decided that the cost-effectiveness framework was adequate for this case.
It should also be noted that, throughout this brief initial part, the candidate never explicitly mentioned the name of the Profitability Framework and always explained his options before being asked. This strategic framework was developed by Boston Consulting Group (BCG) to help companies determine the potential profitability of various products.
