Question about Frameworks

Released an update to his 5 forces analysis in the HBR last year. He touched on this: it depends on how you choose to use a framework. A framework is a way for you to understand something: to package an otherwise complicated or un-unified idea/set of ideas into one.

So, do you want a quick overview of the industry status-quo, or do you want a more detailed idea of what goes on within that industry? One is good for context, an introduction, a macro-view, etc. the other is more laborious, but potentially helpful as you consider an industry and the different ways that key players differentiate themselves within that industry, both as it relates to the status quo of the industry as a whole, and their competitors: i.e., how do we compete relative to the market, how do we compete relative to company X.

right, but why do an analysis of the industry if he tells us to do an analysis on the strategic groups?

for a good interview

always have a frameworks in mind but do not apply them straight up

last thing you want is to come off as someone that memorized all the frameworks

This is one of the big mistakes people make in consulting interviews - rigid application of some memorized framework. There are so many case interview books/guides out there, that people come in over-prepared from a framework standpoint and look for any opportunity to apply one of their memorized frameworks to the problem, whether it fits or not.

Here's a quote from a McKinsey consultant. Full article here http://bit.ly/17iUQb: "... one of my biggest sources of disappointment with case portion of interviews is that many candidates have become too robotic (forcing standard frameworks that don’t fit, focusing so much on their plan of attack that they ignore suggestions, or miss details behind questions, etc.). Most of these cases are real situations that the consultant struggled with in the past year. Try to think of the case less as a performance by you and more as a conversation where the interviewer lets you in on a problem they faced. Some tips along these lines: Talk about how you’re going to solve a problem before you go into the math (and keep talking as you work through the arithmetic). Ask clarifying questions to make sure you understand the context, questions before suggesting an approach. At the end of the day, you are responsible for getting to the answers but don’t let that reality make it feel like a test."

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No, no, I'm not talking about case interview. This is not for case interview.

I'm talking about analyzing the industry/strategic group as an analyst.

As an analyst/consultant, say you're given a project and you need to look at the external environment. Why do an 5forces analysis on the industry if you can go ahead and do one on the strategic group?

a framework is just meant to help you make sure you cover all the bases. it's like a grocery list. frankly i don't trust analyses that originate with grocery lists. the first thing i trust when analyzing an issue is my instincts. from the information i get i pinpoint the problems that seem the most obvious and i work from there. once i've exhausted my associative and instinctive targets, only then do i proceed to the checklists that are relevant. the 5 forces is a very general checklist and is good for a general picture. but then you have to decide what you're focusing on. if you're trying to get insight into a competitive environment, strategic groups might give you some interesting points. but again, it's all very case-specific. on top of that i can never trust frameworks blindly (including the strategic grouping) because reality is never that simple. if you wanna be accurate and thorough, do the damn work and go into the details. everything affects everything in the end, like a bunch of cogwheels that are interdependant on each other's movements. you might find out that a firm's strategy or profitability is greatly affected by a small branch in Nowhere, Oregon because they have a terrible workers' union there that cripples their productivity. go figure. so what are you trying to get at exactly?

random hackneyed words of wisdom

I think the takeaway you've heard from everyone here is that frameworks are not meant to be rigidly applied in every situation. They are useful to help you think about key factors you should be considering, but every situation is unique and in the situation you are describing, you'll want to make sure that you are factoring in the key variables that are pertinent to the industry/strategic group.

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thank you all for your insights. I know that a framework should guide you to think and shouldn't be applied rigidly. Perhaps I misconveyed my question. Let me rephrase it. Porter clearly wrote in his book that readers should look at the industry before strategic group. Why does he want readers to analyze industry first before strategic groups?

you usually want to look at the macro before the micro. gotta understand the environment before studying the specific groups and species. you'll have a tough time understanding strategic groups' actions, much less individual firms, before understanding the environment they're working in.

random hackneyed words of wisdom