GENERAL COMMENTS ON ANALYZING A CASE STUDY
The purpose of the case study is to let you apply the concepts you’ve
learned when you analyze the issues facing a specific company. To analyze a case
study, therefore, you must examine closely the issues with which the company is
confronted. Most often you will need to read the case several times – once to grasp
the overall picture of what is happening to the company and then several times
more to discover and grasp the specific problems.
Generally, detailed analysis of a case study should include seven areas:
1. Comprehending the Case Situation
2. Analyzing the company’s history, development, and growth
3. Defining the Problem
4. Generating Alternative Solutions
5. Identifying Criteria for Evaluating Alternatives
6. Making recommendations
7. Taking Action and Following Up
To analyze a case, you need to apply what you’ve learned to each of these
areas. In what follows, details about each of the above areas will be provided.
1. COMPREHEND THE CASE SITUATION: DATA COLLECTION, IDENTIFY
RELEVANT FACTS
Most cases require at least two readings, sometimes more; the first time
through should involve familiarizing yourself with the basic situation; you may
be given some guide questions to help you and you also might think about why
the case was assigned now. There are some standard question that you might keep
in mind as you read the case:
• what are the key issues in the case; who is the decision maker in the case; is
there a critical decision
• what is the environment in which the key people operate; what are the
constraints on their actions; what demands are imposed by the situation
• are solutions doable
• if you had the chance to talk to critical people in the company, what would
you want to know
• what are the actual outcomes of the current situation-productivity,
satisfaction, etc.; how stable are present conditions
• what are the “ideal” outcomes; what is an ideal “future” condition
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• what information is lacking; what are the sources of the available
information
Managers and students rarely have complete information and must rely on
inferences. Be prepared to make creative assumptions; good analysis goes beyond
identifying the relevant facts in the case. If some facts aren’t given, figure out what
you can assume they are.
Rereading: After the first reading, try to formulate several plausible courses of
action and explanation for the data in the case. Imagine yourself as various key
people in the case and figure out why you (as the person in the case) might have
acted as he/she did, or what you would do. Think about the consequences if you
are wrong.
Using evidence and numbers: One of the most difficult problems in preparing a
case is sorting through the mass of information and evidence. Often cases involve
considerable background information of varying relevance to the decision at hand.
Often cases involve conflict with different actors providing selective information
and courses of action to support their claims. As in real life, you must decide what
information is important and what isn’t and evaluate apparently conflicting
evidence.
As in real life, you will be faced with a lot of information but perhaps not exactly
the information you need.
It is not uncommon to feel paralyzed by all the available information; it is
difficult to identify the key information after the first reading. You should be
slightly skeptical about the information presented or the interpretation placed on
it by various actors in the case. You won’t have time to question all evidence in the
case but if the evidence is critical, you might ask yourself what it really implies
and whether it is as compelling as it seems. As you read the case keep in mind:
• remember that all behavior is caused, motivated, and goal-directed;
behavior may see strange, or “irrational” but you can assume it makes sense
to the actor
• separate fact from opinion; distinguish between what people say vs. do
• it might be possible to get more information about the case (e.g. the
industry) but for the most part you will be asked to do your best with the
information available
• separate symptoms from underlying causes
• avoid judgments; avoid premature solutions
2. ANALYZE THE COMPANY’S HISTORY, DEVELOPMENT, AND GROWTH
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A convenient way to investigate how a company’s past strategy and structure
affect it in the present is to chart the critical incidents in its history – that is, the
events that were the most unusual or the most essential for its development into
the company it is today. Some of the events have to do with its founding, its initial
products, how it makes new-product market decisions, and how it developed and
chose functional competencies to pursue. Its entry into new businesses and shifts
in its main lines of business are also important milestones to consider.
Identify the company’s internal strengths and weaknesses. Once the historical
profile is completed, you can begin the SWOT analysis. Use all the incidents you
have charted to develop an account of the company’s strengths and weaknesses as
they have emerged historically. Examine each of the value creation functions of
the company, and identify the functions in which the company is currently strong
and currently weak. Some companies might be weak in marketing; some might be
strong in research and development. Make lists of these strengths and weaknesses.
The SWOT checklist gives examples of what might go in these lists.
SWOT Checklist
Potential internal strengths Potential internal weaknesses
Many product lines? Obsolete, narrow product
lines?
Broad market coverage? Rising manufacturing costs?
Manufacturing competence? Decline in R&D innovations?
Good marketing skills? Poor marketing skills?
Good materials management
systems?
Poor materials management
systems?
R&D skills and leadership? Loss of customer good will?
Information system
competencies
Inadequate information
systems?
Human resource
competencies?
Inadequate human resources?
Brand name reputation? Loss of brand name capital?
Portfolio management skills? Growth without direction?
Cost of differentiation
advantage?
Bad portfolio management?
New-venture management
expertise?
Loss of corporate direction?
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Appropriate management
style?
Infighting among divisions?
Appropriate organizational
structure?
Loss of corporate control?
Appropriate control systems? Inappropriate organizational
structure and control systems?
Ability to manage strategic
change?
High conflict and politics?
Well-developed corporate
strategy?
Poor financial management?
Good financial management? Others?
Others?
Potential environmental
opportunities
Potential environmental
threats
Expand core business(es)? Attacks on core business(es)?
Exploit new market segments? Increases in domestic
competition?
Widen new market segments? Increases in foreign
competition?
Extend cost or differentiation
advantage?
Change in consumer taste?
Diversify into new growth
businesses?
Fall in barriers to entry?
Expand into foreign markets? Rise in new or substitute
products?
Apply R&D skills in new
areas?
Increase in industry rivalry?
Enter new related businesses? New forms of industry
competition?
Vertically integrate forward? Potential for takeover?
Vertically integrate backward? Existence for corporate raiders?
Enlarge corporate portfolio? Increase in regional
competition?
Overcome barriers to entry? Changes in demographic
factors?
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Reduce rivalry among
competitors?
Changes in economic factors?
Make profitable new
acquisitions?
Downturn in economy?
Apply brand name capital in
new areas?
Rising labor costs?
Seek fast market growth? Slower market growth?
Others? Others?
Analyze the external environment. The next step is to identify environmental
opportunities and threats. Here you should apply all information you have
learned on industry and macroenvironments, to analyze the environment the
company is confronting. Of particular importance at the industry level is Porter’s
five forces model and the stage of the life cycle model.
Porter’s Five Forces Model
(Developed by Michael E. Porter of the Harvard School of Business
Administration)
This model focuses on five forces that shape competition within an industry.
1. The risk of new entry by potential competitors
2. The degree of rivalry among established companies within an industry
3. The bargaining power of buyers
4. The bargaining power of suppliers
5. The threat of substitute products
3. DEFINING THE PROBLEM
What is the critical issue or problems to be solved? This is probably the most
crucial part of the analysis and sometimes the hardest thing to do in the whole
analysis. Perhaps the most common problem in case analysis (and in real life
management) is that we fail to identify the real problem and hence solve the wrong
problem. What we at first think is the real problem often isn’t the real problem.
To help in this stage here are some questions to ask in trying to identify the real
problem:
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• where is the problem (individual, group, situation)why is it a problem; is
there a “gap” between actual performance and desired performance; for
whom is it a problem and why
• explicitly state the problem; are you sure it is a problem; is it important;
what would happen if the “problem” were left alone”; could doing
something about the “problem” have unintended consequences?
• what standard is violated; where is the deviation from standard
• what are the actual outcomes in terms of productivity and job satisfaction;
what are the ideal outcomes
• how do key people feel about the problem and current outcomes
• what type of problem is it ?(individual, relationships, group, intergroup,
leadership/motivation/power, total system)
• how urgent is the problem? How important is the problem relative to other
problems?
• assess the present conditions:
• What are the consequences; how high are the stakes; what factors must and
can change? for the organization (costs and profits; meeting obligations;
productivity) for the people (personal and financial rewards; careers;
satisfaction and growth)
• How stable are present conditions?
• What information is lacking?
• What are the sources of the available information?
Traps in this stage:
• suggesting a solution prematurely-stating a problem while implying a
solution
• stating problems in behavioral (personal) terms, not situational terms
• not explicitly stating the problem-assuming “your” problem is “the”
problem
• blindly applying stereotypes to problems; accepting all information at face
value; making premature judgments; multiple causality
• most crucial at this step is to avoid suggesting a solution
• confusing symptoms with causes; differentiating fact from opinion;
prematurely judging people and actions
• stating the problem as a disguised solution (eg. Hardesty’s failure is due to
his not visiting purchasing
Analyze structure and control systems. The aim of this analysis is to identify what
structure and control systems the company is using to implement its strategy and
to evaluate whether that structure is the appropriate one for the company.
Different corporate and business strategies require different structures. For
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example, does the company have the right level of vertical differentiation (for
instance, does it have the appropriate number of levels in the hierarchy or
decentralized control?) or horizontal differentiation (does it use a functional
structure when it should be using a product structure?)? Similarly, is the company
using the right integration or control systems to manage its operations? Are
managers being appropriately rewarded? Are the right rewards in place for
encouraging cooperation among divisions? These are all issues that should be
considered.
In some cases there will be little information on these issues, whereas in
others there will be a lot. Obviously, in analyzing each case you should gear the
analysis toward its most salient issues. For example, organizational conflict,
power, and politics will be important issues for some companies. Try to analyze
why problems in these areas are occurring. Do they occur because of bad strategy
formulation or because of bad strategy implementation?
Organizational change is an issue in many cases because the companies are
attempting to alter their strategies or structures to solve strategic problems. Thus,
as a part of the analysis, you might suggest an action plan that the company in
question could use to achieve its goals. For example, you might list in a logical
sequence the steps the company would need to follow to alter its business-level
strategy from differentiation to focus.
Causes:
Once you have identified the key problem(s), try to find the causes here. Most
critical here is avoiding solutions, and avoiding blaming or judging people. Also:
• don’t quit at the most obvious answer-try playing devil’s advocate; put
yourself in the other person’s shoes
• accept the multiple causality of events
• there may be a number of viable ways to fit the data together; explore as
many as you can; go past the obvious
• there is a great tendency to evaluate behavior as good or bad; I care about
why it occurred; judgments leads to a poor analysis focusing on justification
for the evaluation
• the concern is not whether behavior is good or bad but why it occurred and
its consequences
• be careful about hindsight; actors in the case usually don’t have access to
outcomes when they act so avoid “Monday Morning Quarterbacking”-
consider what actors in the case are reasonably likely to know or do as
before, avoid premature solutions and premature judgments
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4. GENERATING ALTERNATIVE SOLUTIONS
In thinking about a context for generating alternatives, think about:
• what are the decision-maker’s sources of power in the situation? (legitimate,
reward, punishment, expert, referent)
• what are possible leverage points (changing technology such as machines,
processes, product designs; changing organizational structure; changing
reward systems, job descriptions education, changing personnel, changing
culture)
• can individual behavior be changed (education, training, reward systems,
job description, etc.)
• what are the constraints on the solution? (time, money, organizational
traditions, prior commitments, external realities, legal etc)
• what are the available resources (time, money, people, existing
relationships, power)
• should others be involved (in problem definition, data collection,
generating alternatives, implementing solutions, monitoring and assessing
realities)
In this stage it is important to avoid reaching for a solution too quickly; be
creative here and put yourself in the case. Try living with various alternatives that
you are thinking about; what would be the impact on you and on others. Be sure
to think about the costs and benefits of each alternative.
5. CRITERIA FOR EVALUATING ALTERNATIVES
In considering the alternatives generated above you need to be clear on the
criteria you will use to evaluate them. Some possible criteria include:
• does the alternative address the critical aspect of the problem? What are
your objective? Be specific.
• what are the intended consequences; what are some unintended possible
consequences; how will your decision improve the situation
• what is the probability of success; what are the risks; what happens if the
plan fails
• what does the plan depend on? What are the costs? What power and control
is needed?
• who would be the “change agent” Does he/she have the power, skills,
knowledge to be successful
• is the “solution” consistent with organizational realities
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Remember that there is no one “elegant” solution; all solutions have costs
and benefits; identify pros and cons of each alternative; evaluate relative to goals;
look at main and side effects
• you may have to make inferences and judgments; do this as long as you
have good reasons for your inferences
• choose alternative which best meets the criteria. The decision might not be
accepted by those involved so you may have to choose a more acceptable
one. You might want to rank order your alternatives according to how well
they meet the criteria used as you think about action, put yourself into the
case; try to project living with the consequences
6. MAKE RECOMMENDATIONS
The last part of the case analysis process involves making recommendations
based on your analysis. Obviously, the quality of your recommendations is a direct
result of the thoroughness with which you prepared the case analysis. The work
you put into the case analysis will be obvious to the professor from the nature of
your recommendations. Recommendations are directed at solving whatever
strategic problem the company is facing and at increasing its future profitability.
Your recommendations should be in line with your analysis; that is, they should
follow logically from the previous discussion. For example, your recommendation
generally will center on the specific ways of changing functional, business, and
corporate strategy and organizational structure and control to improve business
performance. The set of recommendations will be specific to each case, and so it is
difficult to discuss these recommendations here. Such recommendations might
include an increase in spending on specific research and development projects, the
divesting of certain businesses, a change from a strategy of unrelated to related
diversification, an increase in the level of integration among divisions by using
task forces and teams, or a move to a different kind of structure to implement a
new business-level strategy. Again, make sure your recommendations are
mutually consistent and are written in the form of an action plan. The plan might
contain a timetable that sequences the actions for changing the company’s strategy
and a description of how changes at the corporate level will necessitate changes at
the business level and subsequently at the functional level.
7. TAKING ACTION AND FOLLOWING UP
In thinking about implementation you want to think about these areas:
• what are leverage points for change-technology, reward systems, work
relationships, reporting relationships, personnel changes