A Guide to Case Analysis Hult International Business School Professor Jim Prost The purpose of this guide is to help

you maximize your learning when using case studies. It outlines some key issues that will help you learn from the case analysis method. In most courses in strategic management, students use cases from actual companies to practice strategic analysis and to gain some experience in the task of creating and implementing strategy. A case describes, in a factual manner, the events and organizational circumstances surrounding a particular managerial problem. Its as if the reader is inside the organization (at the time the case was written) and has most, if not all, relevant information, facts, and circumstances. The students role in case analysis is to diagnose and evaluate the situation described in the case. You then develop recommendations, supporting arguments, and the appropriate action steps that should be taken to rectify the problem presented in the case. After reading this guide, you will be able to: Understand what a case study is Appreciate the benefits of using case studies in the learning of strategic management and how their use can help develop your managerial skills Use the key steps in analyzing case studies Apply theoretical concepts and frameworks to the case material Create a case analysis

The case approach to strategic analysis is an exercise in learning by doing. Because cases provide you with detailed information about conditions and problems of different industries and companies, your task of analyzing organization after organization and situation after situation has the double benefit of increasing your analytical skills and demonstrates the ways companies and managers actually do things. Case analysis helps substitute for on-the-job experience by: 1. Giving you broader exposure to a variety of industries, organizations, and strategic problems. 2. Allowing you to assume a managerial role. 3. Providing an opportunity for learning by applying the tools and techniques of strategic management. 4. Giving you an opportunity to develop pragmatic managerial action plans to deal with the issues presented in the case.

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1. What is a Case Study? A case study is an account of a set of circumstances faced by an industry, a specific organization, or individual. It provides information about a real-life business situation and gives examples of how strategic issues are managed by real organizations. Typical case scenarios in strategic management might include: an analysis of the external environment in which an organization is competing; the resources of that organization; key success factors for the industry; and the specific sustainable competitive advantages for the organization, if they exist. In such a scenario, you could be asked to undertake a strategic analysis and identify the key issues now facing the organization and what you predict their future to be based on your analysis. You will be expected to use relevant concepts and frameworks. 2. The Benefits of Case Analysis In learning about strategic management, it is likely that you will attend lectures. The lecture material will include theoretical concepts and tools of strategy as well as some of the key issues facing business managers in todays competitive environment. Case analysis allows you to engage in the practice of strategic management by putting you in a decision makers position and forcing you to face real-life business scenarios. It also allows you to test your understanding and application of theoretical concepts and frameworks. Case studies help to bridge the gap between classroom learning and the practice of management. They provide us with an opportunity to develop, sharpen, and test our analytical skills at: Assessing situations Sorting out and organizing key information Asking the right questions Defining problems and opportunities Identifying and evaluating alternative courses of action Interpreting data Evaluating the results of past strategies Developing and defending new strategies Interacting with other managers Making decisions under conditions of uncertainty Critically evaluating the work of others Responding to criticism Steps in Case Analysis: 1. Read the case quickly to get an overview, big picture of the situation presented in the case. This will give you a quick view of problems, situations, and issues facing the industry or organization.

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2. Re-read the case more thoroughly to get the particular facts, circumstances, and personalities presented in the case. This will allow you to get a command of the situation and form your own picture of what is being described. 3. Review the information in the exhibits. There is often a story in the numbers. Your review of these exhibits could reveal critical information you will need to develop recommendations and/or argue in favor of your recommendations. 4. After reading the case and the exhibits, you will decide what the critical issues are, decide what to evaluate in more detail, and decide what tools and analytical techniques will aide in your development of recommendations. 5. Begin your analysis of the numbers: financial ratios; growth rates of sales or profits; financial condition of the organization/industry; and understanding any relationship between revenue, costs, and profits. 6. Evaluate the data and information in the case, and make inferences/judgments based on that information. You may not encounter all the data you will need, so you may need to make a judgment based on your knowledge of the industry. 7. Support your analysis and recommendations with evidence, reasons, and probabilities. As you go through the case, remember to ask the questions: What? Why? When? How? Where? and Who? The answers to these questions will support your diagnosis and opinions with evidence and reasons. 8. Most important, develop a specific action plan and a set of recommendations. Take your sound analysis and convert it into a sound action plan. Elements of a Case Analysis 1. Situation Audit Present an overview of the situation facing the industry/organization. This is a short bullet-point of the issues presented in the case; this is not a complete description of all of the facts in the case. This is a synopsis and evaluation of the organizations current situation, opportunities, and problems. This section may include (among others) the mission statement, the S.W.O.T. (strengths, weaknesses, opportunities, and threats), target customers, competitors, pricing, promotion, positioning, and management strengths and weaknesses. 2. Problem/Decision Statement This section identifies the main problem, opportunity, or critical issues facing the organization. Do not confuse symptoms with problems. For example, symptoms may

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include declining sales, low morale, or high turnover. Declining sales is a symptom as a result of the problem of an outdated product or service; low morale is a symptom that may be the result of a reduction in force (problemtoo much work forced on fewer employees); and high turnover is a symptom of the problem of a poor compensation plan. Problems are causes; symptoms are effects. In stating the problem/decision statement, make it conciseone sentence if possible and usually stated as a question. Examples: Should Brand X be deleted from the product line? What is the best positioning strategy for the new computer tablet? Should the organization take on direct distribution of Product Y? 3. Identification of Alternatives These are the strategic options that appear to be feasible solutions to the problem/decision statement you have identified. Often there is more than one available alternative to the organization. Brainstorm alternatives, think outside the box, and initially list as many as you can. Then edit them down to what you consider the most practical, relevant, and feasible for the organization. Remember status quo is the first alternative and not usually the one that will resolve the problem/decision statement. 4. Critical Issues Critical issues are the main criteria you will use to evaluate your strategic options these will be used to assess and compare the feasibility of your recommended alternative courses of action. Critical issues tend to form around profitability, adherence to an organizations mission statement, market growth, opportunity costs, and sales growth. 5. Analysis This is the step where you evaluate the Alternatives you identified in Step 3 against the Critical Issues you identified in Step 4. One way to present this information is as follows: Alternative A: Should the organization increase the price of product X? Critical Issue: Will the price increase result in more profit in the short-term? (profitability).

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Using a Multi-Attribute Chart for Decision Making

Corporate Mission and Objectives Market Opportunity Competitive Strengths/Weaknesses Financial Position Index: Relative Weight X Rating

To prepare a summary as illustrated above, follow the five steps listed below: Step 1: Step 2: Step 3: List criteria on one axis and the alternative actions on the other axis. Assign a weight to each criterion reflecting its relative importance on the final decision. For convenience, assign weights that add up to 1. Review your analysis and rate each alternative on each criterion, using a scale of one to five, with one representing very poor and five representing very good. Multiply weights assigned to each criterion by the given ratings to each alternative on each issue. Add the results from Step 4 for each alternative. For example: (.2x5)+(.3x2)+(.2x2)+(.3x1) = 2.3

Step 4: Step 5:

6. Recommendations In this section: 1. Address specific action steps that should be taken and why. Why do you believe this is the best course of action? (Do not review the analysis section in detail.) Your recommendations should be specific, operational, and feasible. 2. The next part of your recommendation should demonstrate how the organization will implement your recommendations.

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3. The final portion of your recommendation should be a tentative budget based on your recommendations. This is an important part because it demonstrates how your solution is worth the cost to the organization and is within the financial capabilities of the organization. You will learn how to present your Case Analysis in the Presentation Skills section of the Individual Skills Toolbox.

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