MECE Framework In A Nutshell

The MECE framework is an exhaustive expression of information that must account for all conceivable scenarios. While the framework is used in categorizing information and data processing, it is commonly used in formulating problems and then solving them. The MECE framework is a means of the exhaustive grouping of information into categories that are both mutually exclusive (ME) and collectively exhaustive (CE).

Understanding the MECE framework

The MECE framework argues that to understand and solve any large problem, potential factors must be sorted into two categories. 

Mutually exclusive 

Mutually exclusive means that each factor can only fit into one category at a time. In other words, there is no overlap.

Consider the example of a French cheese company, who is seeking to find the root cause of a problem with its distribution network. A framework that is not mutually exclusive may identify two items: distribution networks in France and camembert product distribution networks.

The reason for this lack of mutual exclusivity is that there is overlap between the two items. Since camembert is distributed in France, the item is counted twice.

Thus, a mutually exclusive problem may choose to analyze camembert distribution in France and camembert distribution in Italy. Here, there is no overlap between each item because they occupy different geographic areas.

Collectively exhaustive 

Collectively exhaustive means that each factor covers all possible causes of a problem.

Returning to the cheesemaker with a distribution problem, simply looking at France and Italy is not collectively exhaustive. The company also exports to Spain and the UK, so assessing France and Italy in isolation may cause analysts to overlook the root cause of the problem.

Ultimately, the MECE framework allows businesses to investigate every potential cause in isolation. They do not have to worry that a specific cause may potentially influence the role of another cause in creating the same problem.

Five steps to developing a MECE hypothesis

  1. Understand the problem in detail. What outcome does the business hope to achieve?
  2. Write down the problem statement, ensuring that there is no room for ambiguity. 
  3. Then, list potential options (solutions) to the problem using a MECE idea tree. In the case of the cheesemaker, each option must be both mutually exclusive and collectively exhaustive.
  4. With a list of potential solutions illustrated on the idea tree, consider the pros and cons of each individually. Remove any that seem illogical or add new solutions gleaned from greater insight into the problem itself.
  5. Select the best option and then present it to internal or external stakeholders. At this stage, it’s important that the option is proven, not obvious, and can be performed with a set of predetermined actions.

Applications of the MECE framework

Several frameworks across various disciplines have MECE principles at their core, including the:

  • Cost-Benefit Analysis – which involves the systematic evaluation of the costs or benefits of a project, policy, or program.
  • Porter’s Five Force Model – which is a powerful tool for understanding the competitiveness in a given industry.
  • 4C Model – a tool for analyzing workplace psychology using core components of motivational theory.

MECE framework examples

To conclude this article, we’ll discuss some hypothetical MECE framework examples below.

Electronics company expansion

Consider the example of an electronics company that has the three major revenue streams of tablets, smartphones, and computers.

Imagine that the company now wants to sell televisions and has hired a consultant to determine which geographic market to enter first.

The consultant starts by listing the following categories: North America, South America, Europe, Asia, and Oceania. These geographical categories satisfy the requirements of the MECE framework since:

  • They are mutually exclusive. For example, there is no overlap between the European and Asian markets. 
  • They are collectively exhaustive. This is because the five geographic regions cover every conceivable market in which televisions are sold.

To determine which of these markets should be entered first, the consultant collects data related to the following:

  • Growth of the television market (historical and predicted).
  • Profit margins.
  • Key competitors.
  • Customer segmentation.
  • Market size, and
  • Products.

With none of the geographic markets overlapping and each covering the entire global television market, the consultant can work with the company to compare these metrics to determine the most attractive market to enter.

Improving customer delivery times

The MECE framework can also be used in situations where a business wants to improve specific processes.

In this example, we have an eCommerce company that is looking to make its order fulfillment more efficient and decrease its delivery times.

Using the MECE framework, decision-makers break down the entire process into separate, distinct components to identify potential areas for improvement.

These components include:

  • Collecting customer delivery information from the online store.
  • Selecting the appropriate warehouse to ship from.
  • Picking the item from the warehouse and packaging the item.
  • Transporting the product to a distribution center. 
  • Selecting a local courier service and delivery route the product should take. 
  • Delivering the product to the customer’s residence or business.

At a very simplistic level, the framework enables the eCommerce business to assess every step in the process without analyzing any step twice.

MECE can be used for almost any process and may be particularly suited to those that are complex or require exhaustive analysis.

Developing a proposal for a new stadium

The MECE framework can also be used in situations where a large number of stakeholders need to be consulted or identified.

A construction company that wants to build a new city stadium, for example, can use the framework to systematically address each stakeholder group and develop strategies that cater to each.

Here are some of the stakeholders that will need to be consulted:

  • Local residents.
  • Professional sports teams.
  • Labor unions. 
  • Financiers. 
  • Environmental organizations.
  • Real estate developers, and
  • Government officials. 

Further work will need to be done to ensure that stakeholder groups are mutually exclusive. For example, some real estate developers may also hold positions in government or sit on the board of professional sports teams.

Key takeaways:

  • The MECE framework allows businesses to assess large amounts of information according to mutual exclusivity and collective exhaustion.
  • The MECE framework forms the foundation of several other frameworks, but it is most commonly used in the rigorous and exhaustive solving of problems.
  • Solutions to problems derived from the MECE framework must have proven effectiveness and be realistically achievable. Crucially, they must not be the first or most obvious solution encountered.

Connected strategic frameworks

SWOT Analysis

A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

PESTEL Analysis

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

Porter’s Five Forces

Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces

Blue Ocean Strategy

A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

BCG Matrix

In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.

Balanced Scorecard

First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.

Scenario Planning

Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts at better strategic decision making by avoiding two pitfalls: underprediction, and overprediction.

Other strategy frameworks:

Additional resources:

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