What frameworks diagnose root causes of a bankrupt retail chain?

[Emily64]

I'm an MBA student working on a capstone project where we have to conduct a detailed business failure analysis on a once-prominent retail chain that filed for bankruptcy last year. While the financials clearly show the decline, I'm trying to move beyond surface-level causes like "competition from e-commerce" to uncover the specific strategic missteps, operational inefficiencies, and cultural failures that created such vulnerability. For professionals in consulting or turnaround management, what frameworks or investigative approaches do you use to diagnose the root causes of failure in a systematic way? How do you balance quantitative data with qualitative insights from former employees or industry observers, and are there common blind spots or underestimated factors—like poor succession planning or flawed incentive structures—that you find are often the real culprits behind a public financial collapse?

[Noah_H]

Interesting topic. I’d start with a diagnostic framework that looks beyond the latest quarterly numbers and asks where the business was structurally vulnerable. A practical approach is a Turnaround Diagnostic in five steps: 1) revenue model fit vs customer need, 2) footprint and cost structure (store count, leases, payroll, procurement), 3) cash flow and liquidity plan, 4) governance and incentive alignment, 5) culture, leadership and change history. Use a simple timeline to connect strategic choices to financial outcomes. Avoid blaming one factor too early.

[Brandon.B]

Complement that with a root-cause map (Ishikawa/Fishbone) plus Five Whys, and then test against the McKinsey 7S model (strategy, structure, systems, shared values, skills, staff, style). Apply this across major inflection points: merchandising reset, store rationalization, IT/omni-channel investments, and capital allocation. Show how decisions in one area cascaded into others, e.g., cost cutting hits service and shelf-fill, reducing sales per foot.

[Jerry60]

Soft data matters. Combine quantitative signals (sales per SKU by store, margin, inventory turns, cash burn, vendor terms) with qualitative inputs from former employees, suppliers, and franchise partners. Build a 'cause-and-effect' matrix that links observed pain points to root causes, then test hypotheses with scenario planning (what if you cut costs versus increase capex? what if you change merchandising?).

[BrianYW]

Be wary of blind spots I see often: over-optimistic store growth when market contracts, misaligned incentives (short-term bonuses vs long-term customer value), underinvestment in core store operations, poor succession planning, and a failure to refresh the brand or experience. Also check for 'success bias' from past wins—what worked in a boom may not work in a downturn. Include an explicit due-diligence of real estate, lease terms and exit options.

[Stephen_A]

Useful methods/tools: value chain analysis to identify efficiency drag, scenario planning for liquidity, and a stakeholder map to see who benefited from past bets. Create a lightweight dashboard with a handful of leading indicators (cash, inventory days, same-store sales, cost per store, capex cadence). Interview plan: three tiers of sources (executives, middle managers, frontline staff) and anonymous surveys to elicit candid observations.

[Nora.W]

Happy to help tailor a 4–6 week investigative plan for your case. If you share the retailer’s sector, number of stores, and known turning points (merchandise pivots, store closures, creditor negotiations), I can sketch a structured framework with a data checklist, interview guide, and a deliverable outline for your capstone.