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PRICE Hypothesis Generation Framework

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This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go …

This Slideshare presentation is a partial preview of the full business document. To view and download the full document, please go here:
http://flevy.com/browse/business-document/price-hypothesis-generation-framework-323

Forming a coherent hypothesis is an instrumental tool when analyzing and addressing any business problem. It is a common approach used by management consultants. When evaluating any new, abstract business problem, it is wise to begin by forming an hypothesis related to the problem.

A popular consulting framework for forming a hypothesis is PRICE. PRICE is used by strategy consulting firms like McKinsey, Bain, and BCG. It can be used to test a hypothesis, determine if the hypothesis is valid, and answer questions, like, Does the hypothesis make sense? Should it be discarded? Should it be reworded?

This document explains the PRICE framework and provides template slides to be used in your own presentations.

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  • 1. Crowdsourced Business Presentation Design Service PRICE Framework Hypothesis Generation Forming a coherent hypothesis is an instrumental tool when analyzing and addressing any business problem. It is a popular technique used by management consulting firms. The PRICE framework helps us develop a proper hypothesis. This document explains the methodology and provides template slides to be used in your own presentations. August 31, 2013 ORIGINAL PROJECT DETAILS http://pptlab.com/ppt/Management-Consulting-Basics-PRICE-Hypothesis-Generation-40
  • 2. Contents  Framework Overview  Templates PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 3
  • 3. First, let’s formally define the term “hypothesis” Hypothesis Definition A hypothesis is a proposed explanation for an observable phenomenon The above pictured is the Andreas Cellarius hypothesis, demonstrating the planetary motions in eccentric and epicyclical orbits Note, that, by definition, a hypothesis must have 2 components—oftentimes, people provide a hypothesis that only contains the ―observable phenomenon‖ portion. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 5
  • 4. By setting up the context, we can formulate the proper hypothesis that addresses the right questions and discussions PRICE Framework P Problems E R Environment Restrictions By setting up the context for our hypothesis, we can use the PRICE methodology to: • Frame the problem Hypothesis • Bring out the right questions • Draw out the right discussions C I Criteria Individual PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 7
  • 5. … that can be answered, if we frame our hypothesis in the format “Due to… We can… Resulting…” Hypothesis Structure – Example (2 of 2) What is creating the phenomenon? What is the observable phenomenon? DUE TO WE CAN securing exclusive distribution rights with Channel Partners A and B … reach a wider audience and dominate the top 5 distributors What is the outcome of the phenomenon? RESULTING IN … A ROCE of 30% for the Emerging Markets. The hypothesis must state the desired outcome of the phenomenon (e.g. ROCE of 30% in Emerging Markets). PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 9
  • 6. Insert headline PRICE Framework TEMPLATE PROBLEMS to be solved • Filler text, filler text, filler text • Filler text P ENVIRONMENT context RESTRICTIONS on scope and hurdles Problems • Filler text, filler text, filler text • Filler text, filler text, filler text • Filler text • Filler text E R Environment Restrictions Hypothesis INDIVIDUAL decision maker(s) CRITERIA for success • Filler text, filler text, filler text • Filler text, filler text, filler text • Filler text C I Criteria • Filler text Individual PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 11
  • 7. Insert headline PRICE Framework TEMPLATE PROBLEMS ENVIRONMENT RESTRICTIONS Hypothesis Definition INDIVIDUALS CRITERIA Insert bumper. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 13
  • 8. PPT Lab (www.pptlab.com) is the only crowdsourced presentation design service. Get consulting-quality presentations at a fraction of the cost! www.PPTLab.com support@pptlab.com Each month, we will create well over 50 slides of for our members. As a member, you will drive what business slides we create by submitting your own presentation projects to our team. All presentations will be created by a team of management consultants and follow the Consulting Presentation Framework. PPT Lab (www.PPTLab.com) – Crowdsourced Business Presentation Design Service 15

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