Guide to Case Analysis
A case presents a situation involving a managerial problem or issue that requires a decision. Typically, cases describe a variety variety of conditions conditions and circumsta circumstances nces facing an organiza organization tion at a particul particular ar time. time. This description description often includes includes information regarding the organization's goals and objectives, its financial condition, the attitudes and beliefs of managers and employees, market conditions, competitors' activities, and various environmental forces that may affect the organization's present or proposed marketing strategy. strategy. Your Your responsibility is to carefully sift through the information provided in order to identify the opportunity, problem, problem, or decision facing the organization to carefully identify and evaluate alternative courses of action and to propose a solution or decision based on your analysis. This guide provides an overvie! of the case method. "t begins !ith a discussion of the role that cases play in the teaching#learning process. This is follo!ed by a series of guidelines for case analysis. After carefully reading this material, you should be prepared to tackle your first case analysis. $ven if you have had previous e%perience !ith cases, this guide !ill provide a useful revie!. revie!. Why Cases? •
The case method differs substantially from other teaching#learning approaches such as lectures and discussion. &ecture and discussionoriented classes provide students !ith information about concepts, practices, and theories. "n contrast, cases provide an opportunity to use concepts, practices, and theories. The primary objective of the case method is to give you a handson opportunity to apply !hat you have learned in your course !ork.
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(onsider this analogy) *uppose that you !ant to learn to play a musical instrument. Your instruction might begin !ith several classes and reading assignments about your particular instrument. instrument. This could include information about the history of the instrument and descriptions of the various parts of the instrument and their functions. *ooner or later, ho!ever, you !ould actually have to play the instrument. $ventually, you might become an accomplished musician, but you !ould have to have many hours of practice on the instrument.
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+o!, suppose you !ant to become a marketing professional instead of a musician. You started !ith classes or courses that introduced you to the foundations of marketing management. Your Your prior studies may have also included courses in areas of specialization such as marketing research, buyer behavior, and promotion, as !ell as other business disciplines such as management, finance, accounting, economics, and statistics. You need practice and e%perience to become a professional. This is precisely the purpose of the case method of instruction. The cases !e !ill cover in this class !ill give you opportunities to apply your kno!ledge of marketing and other business subjects to actual marketing situations.
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(ase studies help to bridge the gap bet!een classroom learning ridge that gap bet!een classroom learning and the practice of marketing management. They They provide is !ith an opportunity to develop, sharpen, and test our analytical skills at) o
Assessing situations
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*orting out and organizing key information
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Asking the right questions
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-efining problems and opportunities
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"dentifying and evaluating alternative courses of action
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"nterpreting data
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$valuating the results of past strategies
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-eveloping and defending ne! strategies
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"nteracting !ith other managers
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aking decisions under conditions of uncertainty
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(ritically evaluating the !ork of others
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/esponding to criticism
"n addition, cases provide e%posure to a broad range of situations facing different types and sizes of organizations in a variety of industries. The decisions that you encounter in this class !ill range from fairly simple to quite comple%. "f you !ere the managers making these decisions, you !ould be risking any!here from a fe! thousand to several million dollars of your firm's resources, not to mention your job and career. 0bviously, the risk 1cost2 of making a mistake is much lo!er in the classroom environment. •
A principal difference bet!een our e%ample of learning to play an instrument and the practice of marketing lies in !hat might called 3consequences.3 A musician's e%pertise is based on the ability to perform precisely the same series of actions time after time. The outcome of perfect e%ecution of a predetermined series of actions is the sought consequence) a beautiful melody. arketing, on the other hand, is often described as a skillful combination of art and science. +o t!o situations ever require e%actly the same actions. Although the same skills and kno!ledge may be required in different situations, marketing e%ecutives must analyze and diagnose each situation separately and conceive and initiate unique strategies to produce sought consequences. 4urther, perfect e%ecution of identified tactics is no guarantee of the sought consequence. 5udgment, as opposed to rote memory and repetition, is one key to marketing success. 6hen judgment and a basic understanding of the variables and interrelationships in marketing situations are coupled, they form the core of an analysis and problemsolving approach that can be used in any marketing decisionmaking situation.
The Case Method of Instruction
The case method is participative. You !ill be e%pected to take a more active role in learning than you have taken in lectureanddiscussion classes. The case method is based on a philosophy of learning by doing as opposed to learning by listening and absorbing information.
(ase analysis is an applied skill. As such, it is something you learn through application, as opposed to something someone teaches you. The more you practice, they more proficient you !ill become. The benefit you receive from case analysis is directly proportional to the effort you put into it.
Your Responsibilities) As a case analyst, the follo!ing responsibilities are key to your success)
Active 7articipation) The case method requires a great deal of individual participation in class discussion. $ffective participation requires thorough preparation, !hich entails more than casually reading each case
before class. Also, keep in mind that there is a difference bet!een contributing to a class discussion and just talking. 7lease see 8o! to 7repare (ases for specific details.
"nteraction among students plays an important role in the case method of instruction. $ffective learning results from individual preparation and thinking, combined !ith group discussion. 6hether you are assigned to !ork independently or in groups#teams, most instructors encourage students to discuss cases !ith other students. This, of course, is common practice among managers facing important business decisions. (ase discussions, in and out of class, are beneficial because they provide immediate feedback regarding individual perspectives and possible solutions. 0ther important benefits of case discussions are the synergism and ne! insights produced by group conversations and brainstorming.
(ritical $valuation) 0ne of the most difficult student responsibilities is learning to critique their peers and to accept criticism from them. Typically, students are reluctant to question or challenge their classmates or to suggest alternatives to the perspectives proposed by others in the class. *tudents find this difficult because they are generally ine%perienced at performing these functions and are also unaccustomed to being challenged by their peers in the classroom. 8o!ever, the case method is most effective !hen all parties engage in an open e%change of ideas. 9ood cases do not have one clearcut, superior solution. -on't be shy about e%pressing and defending your vie!s. oreover, the reasoning process you use and the questions you raise are often more important than the specific solution that you recommend.
$ffective (ommunication) $ach of the three responsibilities above requires effective communication. "t is important that you organize your thoughts before speaking out. You !ill develop and refine your communication skills by making class presentations, participating in case discussions, and !riting case analyses. 4urthermore, the focus of the case method is the development and sharpening of quantitative and qualitative analytical skills. Your analytical skills !ill improve as you organize information, diagnose problems, identify and evaluate alternatives, and develop solutions and action plans.
(ase analysis plays an important role in your overall education. 6hat you learn in a course that utilizes the case method may be your best preparation for securing your first job or gaining that soughtafter promotion up the career ladder. "f you ask a sample of recruiters to assess the students !ho are completing undergraduate and graduate programs in business administration today, you !ill probably hear that these students are e%tremely !ell trained in concepts and quantitative skills, but that they lack verbal and !ritten communication and decisionmaking skills. The case method offers students an e%cellent opportunity to enhance and refine those skills.
Purpose of Case iscussion
any of the courses you !ill take in the usiness -epartment !ill use the case study method to assist students in developing an understanding of some of the strategic issues in today's business environment. "t is important to understand the purpose, objectives, and e%pectations for a class conducted using case studies.
Purpose! The purpose of case teaching is the facilitation of student learning through analysis of real situations involving strategic management decision making. "b#ectives! The "nstructor's task is to provide you !ith the follo!ing)
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;no!ledge,
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Techniques,
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*kills,
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Approaches, and
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7hilosophies.
6hile cases provide kno!ledge, they also help to sho! the application and limitations of various management techniques. (ases are particularly useful in the development of skills, approaches, and a philosophy of management, i.e. that people are important and 3make things happen.3 (ase discussions provide a forum for active participation. 7resenting your ideas, and listening to the ideas of others, in the case classroom highlights the importance of the individual and emphasizes team effort to support the discussion. $%pectations! (ase discussions depend on the active, effective participation of students. The student must get involved and take the primary responsibility for his or her learning. "n a sense, !e are making a contract to ensure the successful operation of this class. The contract is a t!o!ay street, and both parties must be !illing to meet their commitments. The "nstructor's (ontract includes)
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(areful and complete preparation for the classroom e%perience.
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(oncern and devotion to the students in all dealings, including those in the classroom, the office, or through other means of communication, and
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*triving to make the course a satisfying development e%perience.
The (ontract involves commitment to the 3>7's3 of case discussion) :.
Preparation if the student does not read and analyze the case, and then formulate an action plan, the case discussion !ill mean little.
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Presence if the student is not present, he or she cannot learn. 6hat is more important, if you are not here, you cannot add your unique thoughts and insights to the group discussion.
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Promptness students !ho enter the classroom late disrupt the discussion and deprecate the decorum of the process.
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Participation the case student's learning is best facilitated by regular participation. The case student has the responsibility to share his or her understanding and judgment !ith the class to advance the group's collective skills and kno!ledge.
Case Analysis & Preparation!
A case presents an actual strategy situation. "t provides a scenario for use in strategy diagnosis and strategy choice. (ases serve four important teaching#learning aims) :.
They offer you the opportunity to diagnose an organization's business and marketing strategies. You then develop strategy recommendations.
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$ach case offers an interesting marketplace situation for learning and applying the strategy concepts and decision making processes covered in the course.
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(lass discussion of the case !ill help you to improve your analysis skills in preparing and presenting management briefings.
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7reparation of the !ritten analysis for the t!o comprehensive cases !ill help you develop your !riting skills.
The most important single rule of case analysis and discussion is that students must accept and maintain o!nership of the discussion, i.e. it must be student driven. 0ther!ise, the discussion breaks do!n and the analysis becomes a lecture about the case given by the instructor. To!ard this end, your instructor should avoid making a choice about the case decision, but e%pect you to do so. All students are e%pected to have a plan of action for the protagonist in the case to ensure that they ma%imize their learning and can
participate actively and effectively in class. $ach student should develop approaches and ans!ers that fit his or her talents and judgments. A su''ested outline for preparing cases includes) •
*ummary of the ecision (ituation
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Problem Identification
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"dentification of Alternatives
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)ey decision criteria used to evaluate each alternative
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Comprehensive analysis of the alternatives using key criteria
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Recommendations, including implementation guidelines
*o+ to Prepare Cases
There is no one best !ay to analyze a case. ost people develop their o!n method after gaining some e%perience. As !ith studying, everybody does it a little differently. ost cases are based on real business situations. You !ill have the same information that !as available to the decision maker !hen the decision !as made. The major difference is that your data are already compiled and organized. The follo!ing suggestions are intended to give you some ideas regarding ho! others approach cases. Try these suggestions and make your o!n adjustments. egin by reading each case completely but quickly, from beginning to end. The purpose of the first reading should be to familiarize yourself !ith the organization, the problem or decision to be made, the types and amount of data provided, and to get a general 3feel3 for the case. Your second reading of the case should be more careful and thorough. any students find it helpful to underline, highlight, and make notes about symptoms, potential problems and issues, key facts, and other important information. +o! you should be in a position to investigate the tabular and numerical data included in the< @ < ... case. Ask yourself !hat each figure, table, or chart means, ho! it !as derived, !hether or not it is relevant, and !hether further computations !ould be helpful. "f calculations, comparisons, or consolidations of numerical data appear useful, take the necessary action at this time. A large part of !hat you !ill learn from case analysis is ho! to define, structure, and analyze opportunities and problems. "'ve included a sample case !riteup on this site so you can see ho! the template proposed belo! looks in practice. The template is intended to provide you !ith a general frame!ork for problem solving, and for presenting your analysis in a succinct and precise manner. "n essence, it is the scientific method !ith some embellishment. An Approach to Case Analysis (ituation Audit! This step is basically a synopsis and evaluation of an organization's current situation, opportunities, and problems. The primary purpose of the audit is to help you prepare for problem definition and subsequent steps in the problemsolving process. Accordingly, much of the material in the audit should be in !orksheet form rather than formal discussion that is handed in !ith a !ritten case. As the purpose of this step is to sho! the relevance of case information, your situation audit should be diagnostic rather than descriptive. 4or e%ample, it is descriptive to report 3(ompany A's current and quick ratios are :.B= and B.C> respectively.3 A diagnostic look at these figures indicates that (ompany A may not be able to meet maturing obligations. The poor quick ratio sho!s that !ithout inventory, the least liquid asset, shortterm obligations could not be met. "n other !ords, (ompany A is insolvent. "f you have information about a number of different problems or challenges facing (ompany A, kno!ing that the company is insolvent helps you focus on those that affect the firm's short term survival needs. The breadth and depth of an appropriate situation audit are determined by the nature and scope of the
case situation. *ome focus on individual marketing mi% decisions at the brand level, !hile others deal !ith corporate and#or strategic business unit decisions. $ach case !ill require a situation audit that is a little different from any of the others because of the information available and the decision to be made. There are at least t!o philosophies regarding the appropriate depth and scope of a situation audit. 0ne holds that the situation audit should include a comprehensive assessment of the organization's mission and objectives each business unit of interest present and potential customers and competitors the organization's markettarget objectives and strategies its marketing program positioning strategy its product, distribution, pricing and promotion strategies current planning, implementation, and management activities its financial condition, and an overall summary of the organization's situation. The second philosophy holds that the situation audit can be a short, concise analysis of the major strengths, !eaknesses, opportunities, and threats a *60T analysis reserving the comprehensive effort for the analysis step. The *60T analysis !ould include only that information crucial to analyzing the case. The emphasis is on analysis, diagnosis, synthesis, and interpretation of the situation. "n a !ritten case assignment, you should be able to present this in less than t!o pages. Problem,ecision (tatement
"dentification of the main problem, opportunity, or issue in a case is crucial. To paraphrase from Alice in 6onderland, if you don't kno! !here you are going, any solution !ill take you there. "f you don't properly identify the central problem or decision in a case, the remainder of your analysis is not likely to produce recommendations necessary to solve the organization's main problem. A major pitfall in defining problems occurs in confusing symptoms !ith problems. *uch things as declining sales, lo! morale, high turnover, or increasing costs are symptoms that are often incorrectly identified as problems. You can frequently avoid incorrectly defining a symptom as a problem by thinking in terms of causes and effects problems are causes, symptoms are effects. The e%amples above are the effects of something !rong in the organization. 6hy are sales lo!, morale lo!, and turnover highD *ales may be lo! because of lo! morale and high turnover. 6hyD aybe it has something to do !ith the compensation plan, !hich may be caused by inadequate profit margins. argins may be lo! due to improper pricing or an outdated distribution system. *ymptoms may appear in one part of the overall marketing program and the true problem may lie else!here. ;eep asking !hy until you are satisfied that you have identified the problem 1cause2 and not just another symptom 1effect2. 6hen you identify more than one major problem or decision in a case, ask yourself !hether they are related enough to be consolidated into one central problem#decision. "f you have identified t!o or more problems that are not related, rank them in order of importance and address them in that order. You may find that although the problems do not appear to be linked, the solutions are related one solution may solve multiple problems. A final suggestion is to state problems#decisions concisely, if possible in the form of a question. Try to !rite a onesentence question that is specific enough to communicate the main concern. Identification of Alternatives
Alternatives are the strategic options that appear to be viable solutions to the problem or decision that you have determined. 0ften, more than t!o seemingly appropriate actions !ill be available. *ometimes these !ill be e%plicitly identified in the case, and sometimes they !ill not. 7repare your list of alternatives in t!o stages. 4irst, prepare an initial list !hich includes all the actions that you feel might be appropriate. 9roup brainstorming is a useful technique for generating alternatives. e creative, keep an open mind, and build upon the ideas of others. 6hat may initially sound absurd could become an outstanding possibility. After you have generated your initial list, begin refining it and combining similar actions. Ese the information that you organized in your situation audit regarding goals, objectives, and constraints to help you identify !hich alternatives to keep and !hich to eliminate. Ask !hether or not an alternative is feasible, given the e%isting financial, productive, managerial, marketing, and other constraints and !hether or not it could produce the results sought. That is, does the alternative directly address the problem you identified in *tep
(tep -! Critical Issues
(ritical issues are the main criteria you use to evaluate your strategic options. y stating the issues you intend to use in evaluating alternatives, you make clear the criteria you plan to use in assessing and comparing the viability of your alternative courses of action. 7erhaps the best place to start in identifying critical issues is to ask !hat general factors should be considered in making a strategic decision regarding the problem presented. 4or e%ample, assume that your task is to identify the most attractive productmarket niche. Your alternatives are niches F, Y, and G. Your question !ould then be) 36hat criteria should be employed to assess the niche choicesD3 4or each niche, appropriate criteria might include potential sales volume, variable costs, contribution margins, market share, total niche sales, business strength, niche attractiveness, etc. This !ill provide an evaluation relative to the market and to competition. The single most important critical issue in many decisions is profitability /olled on the thighs of virginsH1it's all about money, rightD2. *ince profits are a principal goal in all commercial organizations, nearly every marketing decision is influenced by monetary considerations that affect 1e%pected2 profits. *ometimes several profitoriented critical issues are involved. These may include future costs and revenues, breakeven points, opportunity costs, contribution margins, ta%es, turnover, sales, market share, etc. any critical issues are only indirectly linked to profits. *uch things as the impact of a decision on employees, the local economy, the environment, suppliers, or even customer attitudes may not directly affect profits. ecause profits are almost al!ays the overriding critical issue, all factors bearing on them, directly or indirectly, must be considered.
Analysis Analysis is the process of evaluating each alternative action against the critical issues identified in *tep >. 0ften, analysis includes assessment of advantages and limitations associated !ith each issue. A tendency e%ists !hen first starting a case analysis to identify important issues carefully and to analyze each issue superficially. The consequence is a !eak analysis. Your analysis !ill be much more penetrating and comprehensive if you use the same criteria in assessing each alternative.
0ne !ay of assuring that you assess each alternative in terms of each critical issue is to organize your analysis in outline form, as follo!s) Alternative A) 1specify2 :.
"dentify the critical issue and thoroughly discuss Alternative A in those terms.
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4or the remaining critical issues, follo! the same procedure.
Alternative ) 1specify2 :.
Critical Issue 1) Thoroughly discuss Alternative
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Critical Issue 2-n ) 4ollo! the same procedure.
in terms of critical issue :.
After alternatives are analyzed against each issue, you should complete your analysis !ith a summary assessment of each alternative. This summary !ill provide the basis for preparing your recommendations. 0ne approach that students sometimes find useful in preparing their summary analyses is illustrated belo!. The e%hibit, labeled A( (ompany *ummary Assessment, entails five steps) :.
&ist critical issues on one a%is and alternative actions on the other.
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Assign a !eight to each critical issue reflecting its relative importance on the final decision. 4or convenience, assign !eights that add up to one.
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/evie! your analysis and rate each alternative on each critical issue using a scale of one to five, !ith one representing very poor and five representing very good.
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ultiply the assigned !eight by the rating given to each alternative on each issue.
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Add the results from 1>2 for each alternative.
"t is important to understand that this type of analytical aid is not a substitute for thorough, rigorous analysis, clear thinking, and enlightened decision making. "ts value is in encouraging you to assess the relative importance of alternatives and critical issues, and in helping you to organize your analysis. Recommendations "f your analysis has been thorough, the actions you recommend should flo! directly from it. The first part of your recommendations section addresses !hat specific actions should be taken and !hy. *tate the main reasons you believe your chosen course of action is best, but avoid rehashing the analysis section. "t is important that your recommendations be specific and operational. The follo!ing e%ample of a recommendation deals !ith !hether a manufacturer of oil field equipment should introduce a ne! product line. The second part of your recommendation section addresses implementation. *tate clearly !ho should do !hat, !hen, and !here. An implementation plan sho!s that your recommendations are both possible and practical. The last part of recommendations sections should be a tentative budget. This is important because it illustrates that the solution is !orth the cost and is !ithin the financial capabilities of the organization. Too often, students develop grandiose plans that firms couldn't possibly afford, even if they !ere !orth the money. The numbers used in your tentative budget may not be as accurate as they !ould be if you had complete access to company records. ake your best estimate and try to get as close to actual figures as possible. The e%ercise is good e%perience, and it sho!s that you have considered the cost implications. *tudents often ask ho! long the recommendations sections should be, and ho! much detail they should go into. This question is difficult to ans!er because each case is different and should be treated that !ay. ;eeping in mind the page limitations imposed upon you for this class, it is generally advisable to go into as much detail as possible. You may be criticized for not being specific enough in your recommendations, but you are not likely to be criticized for being too specific.
