A Guide to Strategic Case Analysis

Each individual is responsible for one written case assignment, which should resemble an executive briefing based on your analysis of the case (10-15 pages, excluding figures, exhibits, and appendices). You may choose which case to do. These briefings must be professionally done (typed, 1” margins, 11 or 12 font, times new roman, etc.) and turned in at the beginning of the class period for which that case will be discussed. Be prepared to comment on the case extensively and to lead the discussion in class. Turning in a case without attending class is unacceptable and will result in the briefing not being counted! The presentation should be an in- depth professional presentation over the case assignment. Professionalism and creativity are expected along with solid content. Length of the presentation should be about 20 to 25 minutes in overall time length with a 5-10-minute discussion session at the end. Use PowerPoint slides and provide a copy of slides to instructor. All members of the team must be presentation participants.

These assignments should be between 10 and 15 pages in length – typed, double-spaced and neat. Coverage should include:

Executive Overview – gives general overview of case including key issues or problems and recommendations.

Analysis – briefly describes the overarching framework for the case and its background. No additional information should be used other than that provided in the case text.

Problem Statement – more focus on statement of problem or central issue within case. More than one issue may be relevant so limit write-up to the three most interesting or troublesome issues. Name and explain these explicitly.

Options – give several options for the focal organization concerning these problems or issues.

Recommendation – name one explicit action that will help or fix that which is named in the problem statement.

Implementation and Control – briefly explain how the recommendation may be carried out and how it can be controlled, altered or adjusted if necessary.

* You may read chapter 13 which provide a detailed guidelines.

Analytical Tools

There are a number of analytical tools to help you organize, analyze, and display your information in a convenient and easy to interpret form. Some of these techniques allow you to quantify the decisions by making judgments about the situation. You should select those tools which best fit the particular case situation. Following are some of the tools that are available:

1) Performance Analysis – You should make comparisons of key financial and market data at both the corporate and business unit level with major competitors and/or industry averages. Compare key expenses to sales, such as percent R&D of sales, percent sales and administrative expense of sales, percent of accounts receivable of sales, and sales per employee or sales per store.

2) BCG Portfolio Mapping / Product Mission Matrix – Developing a matrix that compares variables between companies, such as product lines or financial results, is an easy way to illustrate differences. A simple two-by-two matrix sometimes illustrates the relationships between variables. This can also be expanded into a larger matrix, sometimes referred to as portfolio mapping, such as those developed

by the Boston Consulting Group. You can be creative with the mapping technique and use it for a variety of comparisons, such as a business compared with competitors, a SBU or product line compared with others within the same company, or SBU's compared to industry. You can modify the BCG techniques to fit your particular needs. Be sure to carefully label and identify the components used in mapping.

3) Key Success Factors / Strength Assessment – Identifying key success factors for the company and its competitors is another useful analytical tool. By utilizing a rating and weighing technique, you can quantify qualitative evaluations. The first step is to identify the key success factors, then apply a weighing to each of those that totals one hundred percent. The weighing represents the importance of each factor relative to the others. Next, using a scale of one to five, with five being very strong and one being very weak, rate the company on each of the success factors. Also rate its key competitors. This shows rather quickly the comparison on each factor, and when multiplied by the weighing and added together, can provide one number that represents the total key success factor comparison with each major competitor. This technique can also be used as a starting point in developing a map such as strategic groups map.

4) SWOT Analysis – A SWOT analysis is designed to identify the strengths and weaknesses of the company (internal factors) and the opportunities and threats for the company (external factors). A SWOT analysis is often a good starting point, but you need to draw conclusions as a result of the analysis. For example, is the company in a strong competitive position? What can it do to turn weaknesses into strengths and threats into opportunities? Can it continue to pursue its current strategy in a profitable manner, or will the strategy need revision?

5) Competitive Strategy Models (Porter) – A useful point to begin the analysis of strategy is to use Porter's Competitive Strategy Model. Porter believes that to be successful, a company must select one of three generic models of competitive strategy. These are Low Cost Producer, Differentiation, and Focus or Niche. This can be followed by developing Porter's Five Forces Model. The Five Forces Model displays the major sources of competition. These five forces of competition include direct competitors, substitute products, customers, suppliers, and new entrants into the marketplace. Successful use of the Porter Model Analysis includes identifying the sources of competition, the strength and likelihood of that competition existing, and strategic recommendations for the action a company should take to develop barriers to the various forms of competition.

6) Best Case/Worst Case/Expected Case Scenarios – In developing business plans it is useful to develop future financial scenarios based on a best case/worst case/expected case basis.

7) Break-Even Analysis – In preparing a business plan or evaluating a project, it is helpful to develop a break-even analysis, in essence that point where cost equals sales with no profit or no loss. Two basic ways of calculating break-even point are the amount of sales that would be necessary to break even or the number of units that must be sold to break even. A very important aspect of this calculation is the classification of cost between fixed and variable as it applies to the period of time under consideration. For example, if you are using a two-year planning horizon and you have a two-year lease on your property, that would be considered fixed for this purpose. If you have a store that is open a set number of hours per day, the minimum is one employee available during the hours the store is open. This could be considered fixed, while the addition of other employees could be considered variable.

8) Common-Sized Financial Statements – The comparison of balance sheet and income statements over time and across companies will be facilitated by using common-