A friend has asked me to make a cake similar to this for her wedding and I have no idea how to make the staircase.

Does anyone have an idea?

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You could make a 4" double barrel cake whre the topper for the topper and then use rice krispies treats to build out the rest of the staircase.  Or maybe a styrofoam piece?

Looks challenging...i would either do what ropalma said with the rice krispies or i would make a 10" (or however many inches round the bottom layer is)  and about 6" high cake (or higher depending on how high you want the stair case to go)  and carve it out to look like a stair case. Maybe use white chocolate rectangular shaped to form the stairs. Just some thoughts =) 

These links show how to carve a spiral cake, I know yours is not a full spiral but it may be helpful along with the ideas already suggested.....

http://cakecentral.com/tutorial/23085/save-time-carving-a-spiral-cake

http://350degreeconfections.blogspot.com/2011/04/its-spring-but-we-still-love-penguins.html?m=1