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Look up a framework, industry or term here. For a guided lesson with a scratch sheet, start with the Case Atlas →

CONSULTING · FIELD GUIDE

Look up the tool behind the decision.

Use this reference for frameworks, industry economics and terminology. For a guided problem-to-practice journey, start with the Case Atlas.

◇ Decision→⑂ Structure→∑ Evidence→↗ Recommendation

Original study guidance—not a firm-approved framework or a set of memorized answers. Case types overlap; adapt these starting points to the client.

Reference library

What would help with this decision?

Case frameworksTen decision structures and their economic checks.Framework toolkitSix lenses to use within a case.Industry economicsBusiness models, driver clusters and sourced terminology.Business word bankDefinitions and practical implications.

Choose the question

Enter a market

Where and how should we compete?

Market entrySee the three starting questions →Market sizingSee the three starting questions →Competitive responseSee the three starting questions →

Choose the question

Grow revenue

Where can we find growth?

GrowthSee the three starting questions →PricingSee the three starting questions →Market sizingSee the three starting questions →

Choose the question

Improve profitability

Where is profit being lost?

ProfitabilitySee the three starting questions →PricingSee the three starting questions →TurnaroundSee the three starting questions →

Choose the question

Improve operations

How can we work better?

Operations & capacitySee the three starting questions →TurnaroundSee the three starting questions →

Choose the question

Evaluate a deal

Should we acquire or invest?

Mergers & acquisitionsSee the three starting questions →Investment & launchSee the three starting questions →

Choose the question

Explore another problem

What else could this case be asking?

Market sizingSee the three starting questions →Competitive responseSee the three starting questions →TurnaroundSee the three starting questions →

Choose a case type

CASE TYPE 01

Profitability

Why did profit fall, and how should we recover it?

Revenue

Separate price, volume and product/customer mix. Identify when and where the decline began.

Costs

Separate fixed and variable costs. Compare unit cost with total cost.

Drivers & response

Test customer, competitor and operational explanations; prioritize recoverable profit.

Profit = Σ(price × units) − total costs

Business sense & what to say

Check: A 10% sales decline can cause a much larger profit decline when costs do not fall. Do not count a market change again after its revenue effect is included.

I would isolate whether this is a price, volume, mix or cost issue before choosing a response.

Pricing isolates a profit driver.

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CASE TYPE 02

Market entry

Should this company enter this market, and how?

Market attractiveness

Size addressable demand, growth, customer needs, competition and barriers.

Entry economics

Estimate reachable sales, contribution, upfront investment and downside.

Ability to win

Test differentiation, distribution, capabilities, regulation and entry mode.

Break-even units = fixed costs ÷ (price − variable cost per unit)

Business sense & what to say

Check: A large market is not automatically a reachable market. Compare building, partnering and acquiring; include the ramp-up period.

The market is attractive only if we can reach customers profitably and overcome the entry barriers.

Market entry tests contribution and break-even.

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CASE TYPE 03

Growth

Where should the business find profitable growth?

Core business

More customers, more purchases, better retention, price and mix.

Adjacencies

New segments, products, channels or geographies; test cannibalization.

Prioritize & deliver

Compare incremental profit, capital needs, feasibility, timing and risk.

Revenue = customers × purchases per customer × average purchase value

Business sense & what to say

Check: Growing sales can destroy value if discounts, acquisition costs or working capital consume the upside.

I would compare incremental contribution, not just top-line growth.

Use market entry to test one growth option.

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CASE TYPE 04

Pricing

What price or pricing model should we choose?

Customer value

Segment willingness to pay, alternatives and price sensitivity.

Economics

Assess unit costs, capacity, break-even volume and margin.

Market & rollout

Test competitor response, channels, bundles and a reversible pilot.

Contribution = (price − variable cost per unit) × units

Business sense & what to say

Check: A price increase may improve margin but reduce volume. Test both together; willingness to pay is not the same as cost-plus pricing.

I would test the volume response by segment before applying one price across all customers.

Test a price change against lost volume.

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CASE TYPE 05

Mergers & acquisitions

Should we buy or combine with this business?

Strategic fit

Why this target, why now, and why ownership rather than partnership?

Value & deal economics

Standalone cash flows, realistic synergies, price, financing and integration costs.

Execution & risks

Diligence, customer retention, people, systems, regulation and integration timing.

Value created ≈ present value of incremental cash flows − acquisition premium − integration costs

Business sense & what to say

Check: Do not double count synergies already in the forecast. Revenue synergies often depend on customer behavior; cost cuts can impair service.

I would separate the target’s standalone value from the value we can create as the owner.

Practice entry economics; this is not an acquisition model.

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CASE TYPE 06

Operations & capacity

How can we improve output, service or cost?

Process

Map steps, cycle times, handoffs, queues and the bottleneck.

Capacity & economics

Demand, utilization, labor, yield, downtime and incremental capacity cost.

Improve & implement

Test scheduling, maintenance, quality, outsourcing or investment.

Utilization = actual output ÷ available capacity (same period and units)

Business sense & what to say

Check: Speeding up a non-bottleneck may not increase total throughput. High utilization can worsen queues when demand varies.

I would locate the system constraint before adding capacity everywhere.

Find the bottleneck before adding capacity.

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CASE TYPE 07

Investment & launch

Should we invest in a new product, asset or technology?

Demand & use case

Who needs it, adoption, substitutes and validation.

Returns

Cash outflows, cash inflows, timing, scenario range and opportunity cost.

Delivery

Dependencies, capability gaps, staged launch and exit criteria.

NPV = Σ[cash flow at time t ÷ (1 + discount rate)^t] − upfront investment

Business sense & what to say

Check: Payback ignores cash flows after payback and usually the time value of money. A positive base case is not enough if adoption is highly uncertain.

I would test the assumptions that drive the investment decision and stage the commitment.

Test one capacity investment; this is not a full NPV model.

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CASE TYPE 08

Market sizing

How much demand or revenue could exist?

Define scope

Geography, customer, product, period, units and current versus potential demand.

Build the estimate

Segment population or businesses; apply eligibility, adoption, frequency and price.

Cross-check

Use a second approach, sanity-check units and show a plausible range.

Annual market revenue = eligible buyers × adoption × purchases/year × price

Business sense & what to say

Check: A market estimate is not a sales forecast. Apply reachable share and ramp-up separately; avoid multiplying overlapping percentages.

I will define the market first, then estimate it from customer behavior and cross-check the result.

Translate reachable demand into entry economics.

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CASE TYPE 09

Competitive response

How should we respond to a rival or disruption?

Threat

Which customers, jobs and profit pools are at risk?

Position

Compare differentiation, costs, switching costs and channel power.

Response

Defend, differentiate, partner, pivot or exit; test likely reactions.

Expected impact = affected volume × contribution per unit − response costs

Business sense & what to say

Check: Matching a competitor’s price can trigger a price war without fixing the reason customers switch.

I would identify why the competitor wins before deciding whether to match its offer.

Test a pricing response; competitor reactions remain a separate question.

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CASE TYPE 10

Turnaround

How do we stabilize and rebuild a struggling business?

Stabilize

Cash runway, liquidity, critical service and near-term obligations.

Diagnose

Structural versus temporary losses; segments, unit economics and root causes.

Rebuild

Prioritize cash and viable profit; sequence fixes, funding and milestones.

Cash runway ≈ available cash ÷ average monthly net cash burn

Business sense & what to say

Check: Accounting profit and cash are different. Inventory and receivables can absorb cash even when the income statement improves.

I would stabilize cash first, then distinguish viable segments from structural losses.

Practice a contribution lever; liquidity remains a separate question.

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Find a framework · all 10 case types

Search case types

Familiar frameworks, used deliberately

Use a framework as a question generator. A complete case answer still needs a decision, evidence and a recommendation.

Profit tree

Revenue → price × volume (then mix); costs → fixed + variable. Use to locate a profit change before explaining its cause.

3Cs

Customer → Company → Competition. Use as a market-context lens; add economics, timing and implementation to answer the decision.

4Ps

Product → Price → Place → Promotion. Useful for go-to-market choices after choosing a target customer and value proposition.

Five forces

Rivalry · entry threat · substitutes · buyer power · supplier power. Use to understand industry profit pressure, not to replace company economics.

Value chain

Inputs → operations → distribution → sales → service. Use to find where cost, delay or differentiation arises.

Growth matrix

Existing/new products × existing/new markets. Use to generate growth options, then compare economics, feasibility and risk.

BUSINESS SENSE

Same question. Different business model.

Combine a case type with an industry lens: retailer × market entry, software × pricing, manufacturer × acquisition.

Choose a business model, then inspect its drivers and terminology. Context and case implications are Harper’s educational synthesis; linked sources support the definitions and examples, not an investment forecast.

Industry

Retail & e-commerce

A retailer competes on assortment, price, convenience and availability across stores and digital channels. Walmart’s filing illustrates why inventory forecasting and fulfillment matter alongside sales.

Where does the business create or lose value?

Demand: traffic × conversion × basket

Margin: product mix, markdowns and fulfillment

Cash: inventory purchased before it sells

Consumer products

Price, volume and product mix can move in different directions. P&G’s FY2026 report separates organic growth from currency and portfolio changes; use that bridge before calling a brand stronger.

Where does the business create or lose value?

Consumer: willingness to pay and repeat demand

Channel: retailer access and promotions

Economics: price, volume, mix and input cost

Software & subscriptions

Subscription growth depends on both new customers and what existing customers retain or expand. Asana’s filing also distinguishes revenue recognition from contract commitments.

Where does the business create or lose value?

Acquire: new paying customers

Retain: renewals and contraction

Expand: more use, seats or products

Manufacturing

Orders, shipments and inventory describe different stages of production. The Census M3 definitions help distinguish an expanding order book from goods already sold.

Where does the business create or lose value?

Demand: new orders net of cancellations

Process: materials → work in process → finished goods

Delivery: shipments and remaining backlog

Airlines & hospitality

Seats and rooms are perishable capacity: an unsold departure or room-night cannot be stored for tomorrow. Measure utilization and realized price together; then test contribution and service cost.

Where does the business create or lose value?

Capacity: seats × miles or available room-nights

Utilization: paid demand ÷ available capacity

Yield: realized price and ancillary revenue

Healthcare

Distinguish the patient, provider and payer. Payment methods change the economic question; access, clinical outcomes and resource use must remain visible alongside margin.

Where does the business create or lose value?

Patient: need, access and outcome

Provider: staffing, capacity and care delivered

Payer: coverage, reimbursement and claims

Financial services

For a bank, funding cost, asset yields, credit risk and fee income interact. FDIC guidance warns that higher interest income can reflect higher-risk lending rather than better underlying performance.

Where does the business create or lose value?

Funding: deposits and other borrowing

Assets: loans, securities and credit quality

Earnings: interest spread, fees and losses

Energy & infrastructure

Electricity capacity describes potential output; generation describes actual energy delivered over time. EIA explains why operating conditions, dispatch and fuel costs can keep generation below capacity.

Where does the business create or lose value?

Asset: installed capacity and investment

Operations: dispatch, downtime and conditions

Output: generation × realized price

Find terminology across industries

Choose an industry or search a term.

Terminology → meaning → case implication
Term	Plain meaning	Why it matters	Source
CompsRetail & e-commerce	Comparable or same-store sales: growth for an eligible existing-store base. Walmart includes e-commerce and uses its own eligibility rules.	Separate growth in existing business from new locations; compare definitions before comparing retailers.	Walmart FY2025 Form 10-K
OmnichannelRetail & e-commerce	Connected store and digital shopping, including orders fulfilled through stores.	A digital order may use store inventory; channel revenue is not a complete cost model.	Walmart FY2025 Form 10-K
ShrinkRetail & e-commerce	Inventory lost through theft or other causes.	Diagnose loss separately from a deliberate markdown; both can pressure margin.	Walmart FY2025 Form 10-K
Organic salesConsumer products	Sales growth excluding acquisitions, divestitures and foreign exchange in P&G’s definition.	This is a company-defined non-GAAP comparison, not the same as reported sales growth.	P&G FY2026 results
FXConsumer products	Foreign exchange: currency movements that can change translated sales.	Separate currency translation from changes in customer demand.	P&G FY2026 results
MixConsumer products	The composition of products or markets sold.	Sales can improve through higher-priced products without an increase in total unit volume.	P&G FY2026 results
DBNRSoftware & subscriptions	Dollar-based net retention: revenue from the same customer cohort relative to its earlier revenue. Asana reports an average of quarterly rates.	Includes expansion and contraction; excludes new customers. Compare the cohort and averaging method.	Asana FY2025 Form 10-K
SaaSSoftware & subscriptions	Software as a service: software provided through a hosted subscription service.	Model recurring service delivery and renewal, not just a one-time software sale.	Asana FY2025 Form 10-K
RPOSoftware & subscriptions	Remaining performance obligations: contracted revenue not yet recognized, subject to the company’s accounting disclosure.	Contracted work is not current-period revenue or cash; check timing and exclusions.	Asana FY2025 Form 10-K
WIPManufacturing	Work in process: accumulated cost of goods still undergoing fabrication.	Rising WIP may signal a bottleneck or production ramp; it is not finished inventory.	Census M3 definitions
BacklogManufacturing	Unfilled orders: beginning backlog + new orders net of cancellations − sales, broadly.	Do not treat orders as recognized sales; investigate cancellations and delivery capacity.	Census M3 definitions
FOBManufacturing	Free on board: Census shipment values generally use the plant selling value, excluding freight and excise taxes.	Keep the valuation basis consistent when comparing shipment value with delivered revenue.	Census M3 definitions
RPM / ASMAirlines & hospitality	Revenue passenger-miles / available seat-miles. One RPM is one paying passenger carried one mile; one ASM is one available seat carried one mile.	Load factor = RPM ÷ ASM. Keep distance and period consistent.	BTS airline metric definitions
ADRAirlines & hospitality	Average daily rate: room revenue divided by occupied rooms.	A higher rate does not guarantee higher total room revenue if occupancy falls.	Marriott FY2025 annual report
RevPARAirlines & hospitality	Revenue per available room: room revenue ÷ available rooms; also ADR × occupancy as a fraction.	Combines price and occupancy, but excludes the full cost base and is not profit.	Marriott FY2025 annual report
MS-DRGHealthcare	Medicare Severity Diagnosis-Related Group: an inpatient classification grouping similar clinical conditions and resource needs.	Payment analysis must account for case mix; a patient count alone is insufficient.	CMS Medicare payment systems
PPSHealthcare	Prospective payment system: Medicare payment based on a predetermined basis under the applicable system.	Identify the care setting and payment unit before applying a generic revenue-per-visit formula.	CMS Medicare payment systems
MLRHealthcare	Medical loss ratio: the portion of premium used for medical claims and care-quality activities under applicable rules.	This is an insurer measure. The remainder covers administration and profit; it is not all profit.	HealthCare.gov MLR definition
NIIFinancial services	Net interest income: interest income less interest expense.	Distinguish a dollar amount from a margin ratio; state any tax-equivalent adjustment.	FDIC earnings examination manual
NIMFinancial services	Net interest margin: annualized net interest income divided by average earning assets; FDIC uses tax-equivalent income in this ratio.	Compare funding cost and asset yield separately; a wider margin can accompany higher risk.	FDIC earnings examination manual
ROAFinancial services	Return on assets: net income relative to average assets.	Different from NIM: it includes more of the income statement and uses a broader asset denominator.	FDIC earnings examination manual
MWEnergy & infrastructure	Megawatt: a unit of power, used to describe generator capacity.	Capacity alone does not tell you annual energy or revenue.	EIA capacity and generation
MWhEnergy & infrastructure	Megawatthour: energy produced by one MW sustained for one hour.	Multiply power by operating time; do not compare MW directly with MWh.	EIA capacity and generation
Capacity factorEnergy & infrastructure	Actual generation ÷ maximum possible generation over the same period.	Separate utilization from installed capacity; a low factor does not by itself establish a malfunction.	EIA capacity and generation

Sources checked October 14, 2026. Company filings are dated examples; definitions and metrics can vary by company. These links do not constitute a live market feed.

WORD BANK

Use the term. Explain the implication.

Find a term, case type or industry

35 terms

COGS

Cost of goods sold: costs assigned to goods or services sold. Classification varies by business.

Profitability; Retail; Manufacturing

Use it in a case

Compare gross margin before moving to overhead; do not assume all COGS is variable.

SG&A

Selling, general and administrative expenses, such as sales support and central administration.

Profitability; M&A

Use it in a case

Separate avoidable savings from costs that remain after a change; avoid double counting costs already in COGS.

Gross margin

Revenue minus COGS; gross margin percentage divides this by revenue.

Profitability; Retail

Use it in a case

A mix shift toward lower-margin products can reduce margin even as sales grow.

Contribution margin

Revenue minus variable costs; per-unit contribution is price minus variable cost per unit.

Pricing; Market entry; Operations

Use it in a case

Use contribution to compare incremental volume within the relevant capacity range.

Fixed vs variable costs

Fixed costs stay broadly constant within a period/capacity range; variable costs change with activity.

Profitability; Operations

Use it in a case

Check whether new volume requires a step-up in capacity or staffing.

Operating leverage

Sensitivity of operating profit to changes in sales, often driven by fixed costs.

Profitability; Turnaround

Use it in a case

With high fixed costs, lost volume can hit profit disproportionately.

Break-even

The point where relevant revenue covers relevant costs.

Market entry; Pricing; Investment

Use it in a case

At the planned price, how many units must we sell to cover fixed costs?

Price elasticity

Percentage change in quantity demanded divided by percentage change in price.

Pricing; Retail

Use it in a case

Demand may be more price-sensitive in one segment; state the sign or magnitude convention.

Willingness to pay

The highest amount a customer would pay for a particular offering under specified conditions.

Pricing; Launch

Use it in a case

Test perceived value and alternatives by customer segment.

Substitutes

Different offerings that satisfy a similar customer need.

Market entry; Competitive response

Use it in a case

The rival may be a different product category, not just another brand.

Barriers to entry

Factors that make entering and competing difficult, such as scale, regulation, switching costs or distribution access.

Market entry; M&A

Use it in a case

Which barrier protects incumbents, and what would it cost us to overcome?

Economies of scale

Falling average cost as output expands over a relevant range.

Operations; Growth; M&A

Use it in a case

Check the source of savings and whether complexity eventually offsets it.

Economies of scope

Cost advantages from producing or serving multiple offerings jointly.

Growth; M&A

Use it in a case

Can the businesses share distribution or capabilities more cheaply together?

Supply & demand

Supply reflects sellers’ willingness to provide output; demand reflects buyers’ willingness to purchase at different prices.

Pricing; Market sizing

Use it in a case

Distinguish a demand shift from movement along a demand curve after a price change.

Bargaining power

Ability of a supplier or buyer to influence price or terms.

Retail; Manufacturing; Competitive response

Use it in a case

Supplier concentration and few substitutes may limit procurement savings.

Switching costs

Money, time, effort or risk incurred when changing provider or operating setup.

M&A; Competitive response; Investment

Use it in a case

Customer retention may reflect switching friction; our own switching costs also affect payback.

Cannibalization

New sales that replace sales of an existing offering.

Growth; Launch; Retail

Use it in a case

Subtract lost contribution from the existing product when measuring incremental value.

Segmentation

Grouping customers or business activity by characteristics relevant to the decision.

All case types

Use it in a case

Split by behavior, need or economics rather than using arbitrary labels.

TAM / SAM / SOM

Total addressable market, serviceable available market, and serviceable obtainable market. Definitions should be stated explicitly.

Market sizing; Market entry

Use it in a case

Narrow total demand to what the product and go-to-market approach can realistically serve and win.

CAC

Customer acquisition cost: defined acquisition spending divided by newly acquired customers in a matching period/cohort.

Software; Growth

Use it in a case

Compare acquisition cost with contribution from retained customers, using consistent attribution.

LTV

Lifetime value: estimated discounted contribution or cash flows from a customer relationship; assumptions matter.

Software; Growth

Use it in a case

Do not compare lifetime revenue with CAC as if all revenue were profit.

Churn / retention

Loss of customers or recurring revenue / proportion retained over a defined period.

Software; Growth

Use it in a case

Separate customer churn from revenue churn and state the cohort and period.

Network effects

Value to users changes as participation grows; it can be positive or negative.

Software; Market entry

Use it in a case

Test who benefits from more users and whether congestion or poor quality offsets the benefit.

Utilization / throughput

Share of available capacity used / output produced per unit of time.

Operations; Manufacturing

Use it in a case

Find the bottleneck; local utilization gains may not improve system output.

Working capital

Operating funds tied up in items such as inventory and receivables, net of operating payables.

Retail; Turnaround; Growth

Use it in a case

Growth may require cash before customer payments arrive.

Capex / opex

Capital expenditures on longer-lived assets / operating expenses recognized through operations.

Investment; Operations

Use it in a case

Separate upfront cash investment from recurring operating expense; accounting treatment can differ.

Opportunity cost

Value of the best alternative forgone when making a choice.

All case types

Use it in a case

Compare the proposal with the best feasible use of the same money, time or capacity.

Sunk cost

A past cost that cannot be recovered.

Investment; Turnaround

Use it in a case

Exclude sunk costs from incremental decisions, while retaining relevant future commitments.

Synergies

Incremental benefits available from combining businesses beyond their standalone performance.

M&A

Use it in a case

Identify a mechanism, timing, owner and cost to achieve each synergy.

Due diligence

Investigation of a business’s financial, commercial, operational and other material assumptions and risks.

M&A; Investment

Use it in a case

Which finding would change our valuation or cause us to walk away?

Acquisition premium

Purchase price above a specified standalone reference value.

M&A

Use it in a case

Define the reference value; synergies must justify what we pay above it.

NPV

Net present value: present value of future cash flows less the investment.

Investment; M&A

Use it in a case

Use cash flows, matching timing and a risk-appropriate discount rate.

Payback period

Time needed for cumulative cash inflows to recover an investment.

Investment; M&A

Use it in a case

Simple investment ÷ annual incremental cash flow assumes constant inflows; payback is not a full valuation.

Sensitivity analysis

Testing how a result changes when an input changes.

All case types

Use it in a case

Identify the assumptions that could reverse the recommendation; distinguish one-input sensitivity from multi-input scenarios.

Keep practicing

Apply these questions in the worked case and paper lab, or connect them to company stories.

Official interview preparation: McKinsey · Bain. These links provide interview context; this index, terminology and examples are Harper’s original educational synthesis.