Having trouble with setting up a framework and understanding what to focus on

Question

First, I'm concerned with figuring out what all to focus on. This case mentions declining profitability, but do I need to examine revenue and costs to figure out what's driving the issue, or no since it doesn't seem like the client is concerned with figuring out why profits are declining? Do I just focus on the viability and attractiveness of the contract?

My framework looks like this:

Contract:

How many trains/what kind of trains would be manufactured?
Estimated costs of contract?
Estimated revenue?

TrainCo.

Does TrainCo. have the capacity and capabilities?
- Do they have the ability to finance this project?
- Would they have to hire and train new workers?
- Where would TrainCo. manufacture the trains?

I've never had this much trouble making a framework + I'm relatively inexperienced.

Answer 1

Hi,

First, I would not recommend this case if you are inexperienced. In my opinion, it is medium to high level and I would encourage you to work on other beginner cases to get comfortable in developing your frameworks.

With that said, I recommend you start clarifying the problem and objectives with the interviewer. This is a similar situation consultants experience in their work, when clients are not fully aware of their key priorities/objectives.

The central question is if they should bid for the contracts, considering a minimum profit margin of 10%. Your initial framework considers revenue, cost and some operations, which is a good start. But I would encourage you to broaden the framework as much as you can at the start of it, adding aspects such as competition and regulation. Then it will naturally narrow down one or two dimensions of your framework.

Best,

Answer 2

Hi there, and thanks for asking, Indeed, setting up the framework for a profitability case can be a bit confusing, ho... (read entire answer)

Hi there, and thanks for asking, Indeed, setting up the framework for a profitability case can be a bit confusing, however, I would advise you not to think of “THE” framework wh... (read entire answer)