Guide to Case Analysis

ABOUT THIS CONTENT
This excellent guide from Otterbein College provides an overview of the case method. It begins with a discussion of the role that cases play in the teaching/learning process. This is followed by a series of guidelines for case analysis. After carefully reading this material, you should be prepared to tackle your first case analysis. Even if you have had previous experience with cases, this guide will provide a useful review.

Guide to Case Analysis

Source: Cravens & Lamb, Strategic Marketing Management

A case presents a situation involving a managerial problem or issue that requires a decision. Typically, cases describe a variety of conditions and circumstances facing an organization at a particular time. This description often 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. Your responsibility is to carefully sift through the information provided in order to identify the opportunity, 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 overview of the case method. It begins with a discussion of the role that cases play in the teaching/learning process. This is followed by a series of guidelines for case analysis. After carefully reading this material, you should be prepared to tackle your first case analysis. Even if you have had previous experience with cases, this guide will provide a useful review.

Why Cases?

  • The case method differs substantially from other teaching/learning approaches such as lectures and discussion. Lecture- and discussion-oriented classes provide students with information about concepts, practices, and theories. In contrast, cases provide an opportunity to use concepts, practices, and theories. The primary objective of the case method is to give you a hands-on opportunity to apply what you have learned in your course work.

    Consider this analogy: Suppose that you want to learn to play a musical instrument. Your instruction might begin with several classes and reading assignments about your particular instrument. This could include information about the history of the instrument and descriptions of the various parts of the instrument and their functions. Sooner or later, however, you would actually have to play the instrument. Eventually, you might become an accomplished musician, but you would have to have many hours of practice on the instrument.

    Now, suppose you want to become a marketing professional instead of a musician. You started with classes or courses that introduced you to the foundations of marketing management. Your prior studies may have also included courses in areas of specialization such as marketing research, buyer behavior, and promotion, as well as other business disciplines such as management, finance, accounting, economics, and statistics. You need practice and experience to become a professional. This is precisely the purpose of the case method of instruction. The cases we will cover in this class will give you opportunities to apply your knowledge of marketing and other business subjects to actual marketing situations.

  • Case studies help to bridge the gap between classroom learning Bridge that gap between classroom learning and the practice of marketing management. They provide is 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

In addition, cases provide exposure 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 will range from fairly simple to quite complex. If you were the managers making these decisions, you would be risking anywhere from a few thousand to several million dollars of your firm’s resources, not to mention your job and career. Obviously, the risk (cost) of making a mistake is much lower in the classroom environment.

  • A principal difference between our example of learning to play an instrument and the practice of marketing lies in what might called “consequences.” A musician’s expertise is based on the ability to perform precisely the same series of actions time after time. The outcome of perfect execution of a predetermined series of actions is the sought consequence: a beautiful melody. Marketing, on the other hand, is often described as a skillful combination of art and science. No two situations ever require exactly the same actions. Although the same skills and knowledge may be required in different situations, marketing executives must analyze and diagnose each situation separately and conceive and initiate unique strategies to produce sought consequences. Further, perfect execution of identified tactics is no guarantee of the sought consequence.

    Judgment, as opposed to rote memory and repetition, is one key to marketing success. When judgment and a basic understanding of the variables and interrelationships in marketing situations are coupled, they form the core of an analysis and problem-solving approach that can be used in any marketing decision-making situation.

The Case Method of Instruction

  • The case method is participative. You will be expected to take a more active role in learning than you have taken in lecture-and-discussion classes. The case method is based on a philosophy of learning by doing as opposed to learning by listening and absorbing information.

    Case 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 will 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 following responsibilities are key to your success:
    • Active Participation: The case method requires a great deal of individual participation in class discussion. Effective participation requires thorough preparation, which entails more than casually reading each case before class. Also, keep in mind that there is a difference between contributing to a class discussion and just talking. Please see How to Prepare Cases for specific details.
    • Interaction among students plays an important role in the case method of instruction. Effective learning results from individual preparation and thinking, combined with group discussion. Whether you are assigned to work independently or in groups/teams, most instructors encourage students to discuss cases with other students. This, of course, is common practice among managers facing important business decisions. Case discussions, in and out of class, are beneficial because they provide immediate feedback regarding individual perspectives and possible solutions. Other important benefits of case discussions are the synergism and new insights produced by group conversations and brainstorming.
    • Critical Evaluation: One 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. Students find this difficult because they are generally inexperienced at performing these functions and are also unaccustomed to being challenged by their peers in the classroom. However, the case method is most effective when all parties engage in an open exchange of ideas. Good cases do not have one clear-cut, superior solution. Don’t be shy about expressing and defending your views. Moreover, the reasoning process you use and the questions you raise are often more important than the specific solution that you recommend.
    • Effective Communication: Each of the three responsibilities above requires effective communication. It is important that you organize your thoughts before speaking out. You will develop and refine your communication skills by making class presentations, participating in case discussions, and writing case analyses. Furthermore, the focus of the case method is the development and sharpening of quantitative and qualitative analytical skills. Your analytical skills will improve as you organize information, diagnose problems, identify and evaluate alternatives, and develop solutions and action plans.
  • Case analysis plays an important role in your overall education. What you learn in a course that utilizes the case method may be your best preparation for securing your first job or gaining that sought-after promotion up the career ladder. If you ask a sample of recruiters to assess the students who are completing undergraduate and graduate programs in business administration today, you will probably hear that these students are extremely well trained in concepts and quantitative skills, but that they lack verbal and written communication and decision-making skills. The case method offers students an excellent opportunity to enhance and refine those skills.

Purpose of Case Discussion

Many of the courses you will take in the Business Department will use the case study method to assist students in developing an understanding of some of the strategic issues in today’s business environment. It is important to understand the purpose, objectives, and expectations 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.

Objectives:

The Instructor’s task is to provide you with the following:

  1. Knowledge,
  2. Techniques,
  3. Skills,
  4. Approaches, and
  5. Philosophies.

While cases provide knowledge, they also help to show the application and limitations of various management techniques. Cases are particularly useful in the development of skills, approaches, and a philosophy of management, i.e. that people are important and “make things happen.”

Case discussions provide a forum for active participation. Presenting 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.

Expectations:

Case discussions depend on the active, effective participation of students. The student must get involved and take the primary responsibility for his or her learning. In a sense, we are making a contract to ensure the successful operation of this class. The contract is a two-way street, and both parties must be willing to meet their commitments.

The Instructor’s Contract includes:

  1. Careful and complete preparation for the classroom experience. 
  2. Concern and devotion to the students in all dealings, including those in the classroom, the office, or through other means of communication, and
  3. Striving to make the course a satisfying development experience.

The Student’s Contract involves commitment to the “4P’s” of case discussion:

  1. Preparation — if the student does not read and analyze the case, and then formulate an action plan, the case discussion will mean little.
  2. Presence — if the student is not present, he or she cannot learn. What is more important, if you are not here, you cannot add your unique thoughts and insights to the group discussion.
  3. Promptness — students who enter the classroom late disrupt the discussion and deprecate the decorum of the process.
  4. 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 with the class to advance the group’s collective skills and knowledge.

Case Analysis & Preparation:

A case presents an actual strategy situation. It provides a scenario for use in strategy diagnosis and strategy choice. Cases serve four important teaching/learning aims:

  1. They offer you the opportunity to diagnose an organization’s business and marketing strategies. You then develop strategy recommendations.
  2. Each case offers an interesting marketplace situation for learning and applying the strategy concepts and decision-making processes covered in the course.
  3. Class discussion of the case will help you to improve your analysis skills in preparing and presenting management briefings.
  4. Preparation of the written analysis for the two comprehensive cases will help you develop your writing skills.

The most important single rule of case analysis and discussion is that students must accept and maintain ownership of the discussion, i.e. it must be student driven. Otherwise, the discussion breaks down and the analysis becomes a lecture about the case given by the instructor.

Toward this end, your instructor should avoid making a choice about the case decision, but expect you to do so. All students are expected to have a plan of action for the protagonist in the case to ensure that they maximize their learning and can participate actively and effectively in class. Each student should develop approaches and answers that fit his or her talents and judgments.

A suggested outline for preparing cases includes:

  • Summary of the Decision Situation
  • Problem Identification
  • Identification of Alternatives
  • Key decision criteria used to evaluate each alternative
  • Comprehensive analysis of the alternatives using key criteria
  • Recommendations, including implementation guidelines

How to Prepare Cases

There is no one best way to analyze a case. Most people develop their own method after gaining some experience. As with studying, everybody does it a little differently.

Most cases are based on real business situations. You will have the same information that was available to the decision maker when the decision was made. The major difference is that your data are already compiled and organized.

The following suggestions are intended to give you some ideas regarding how others approach cases. Try these suggestions and make your own adjustments.

Begin by reading each case completely but quickly, from beginning to end. The purpose of the first reading should be to familiarize yourself with the organization, the problem or decision to be made, the types and amount of data provided, and to get a general “feel” for the case. Your second reading of the case should be more careful and thorough. Many students find it helpful to underline, highlight, and make notes about symptoms, potential problems and issues, key facts, and other important information.

Now you should be in a position to investigate the tabular and numerical data included in the2 + 2 = … case. Ask yourself what each figure, table, or chart means, how it was derived, whether or not it is relevant, and whether further computations would be helpful. If calculations, comparisons, or consolidations of numerical data appear useful, take the necessary action at this time.

A large part of what you will learn from case analysis is how to define, structure, and analyze opportunities and problems. I’ve included a sample case write-up on this site so you can see how the template proposed below looks in practice. The template is intended to provide you with a general framework for problem solving, and for presenting your analysis in a succinct and precise manner. In essence, it is the scientific method with some embellishment.

An Approach to Case Analysis

Step 1: Situation 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 problem-solving process.  Accordingly, much of the material in the audit should be in worksheet form rather than formal discussion that is handed in with a written case. As the purpose of this step is to show the relevance of case information, your situation audit should be diagnostic rather than descriptive.

For example, it is descriptive to report “Company A’s current and quick ratios are 1.03 and 0.64 respectively.” A diagnostic look at these figures indicates that Company A may not be able to meet maturing obligations. The poor quick ratio shows that without inventory, the least liquid asset, short-term obligations could not be met. In other words, Company A is insolvent. If you have information about a number of different problems or challenges facing Company A, knowing 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. Some focus on individual marketing mix decisions at the brand level, while others deal with corporate and/or strategic business unit (SBU) decisions. Each case will 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 two philosophies regarding the appropriate depth and scope of a situation audit. One 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 market-target 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, weaknesses, opportunities, and threats — a SWOT analysis — reserving the comprehensive effort for the analysis step. The SWOT analysis would include only that information crucial to analyzing the case. The emphasis is on analysis, diagnosis, synthesis, and interpretation of the situation. In a written case assignment, you should be able to present this in less than two pages.

Note on Gathering More Data & Making Assumptions
Students often feel they need more information in order to make an intelligent decision. Rarely, if ever, do decision makers have all the information they would like to have prior to making important decisions. The cost and time involved in collecting more data are often prohibitive. Therefore, they (like you) have to make assumptions. There is nothing wrong with making assumptions as long as they are explicitly stated and reasonable. Be prepared to defend your assumptions as logical — don’t use lack of information as a crutch. That kind of argument invariably comes back to get you in the end!

Step 2: Problem/Decision Statement

Identification of the main problem, opportunity, or issue in a case is crucial. To paraphrase from Alice in Wonderland, if you don’t know where you are going, any solution will take you there. If 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.

You may become frustrated with your early attempts at problem/decision identification. Don’t feel alone. Most students and many experienced managers have difficulty with this task. Your skill will improve with practice.

A major pitfall in defining problems occurs in confusing symptoms with problems. Such things as declining sales, low 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 examples above are the effects of something wrong in the organization. Why are sales low, morale low, and turnover high? Sales may be low because of low morale and high turnover. Why? Maybe it has something to do with the compensation plan, which may be caused by inadequate profit margins. Margins may be low due to improper pricing or an outdated distribution system. Symptoms may appear in one part of the overall marketing program and the true problem may lie elsewhere. Keep asking why until you are satisfied that you have identified the problem (cause) and not just another symptom (effect).

When you identify more than one major problem or decision in a case, ask yourself whether they are related enough to be consolidated into one central problem/decision. If you have identified two 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 write a one-sentence question that is specific enough to communicate the main concern. For example:

  • Should Brand A be deleted from the product line?
  • What is the best positioning strategy for our shampoo?
  • Which of the five candidates should be hired?

You may find it useful to provide a brief narrative describing the main parameters of the problem/decision. This is helpful when you have a compound problem that can be subdivided into components or sub-problems.

Step 3: Identification of Alternatives

Alternatives are the strategic options that appear to be viable solutions to the problem or decision that you have determined. Often, more than two seemingly appropriate actions will be available. Sometimes these will be explicitly identified in the case, and sometimes they will not.

Prepare your list of alternatives in two stages. First, prepare an initial list which includes all the actions that you feel might be appropriate. Group brainstorming is a useful technique for generating alternatives. Be creative, keep an open mind, and build upon the ideas of others. What may initially sound absurd could become an outstanding possibility.

After you have generated your initial list, begin refining it and combining similar actions. Use the information that you organized in your situation audit regarding goals, objectives, and constraints to help you identify which alternatives to keep and which to eliminate. Ask whether or not an alternative is feasible, given the existing financial, productive, managerial, marketing, and other constraints and whether or not it could produce the results sought. That is, does the alternative directly address the problem you identified in Step 2?

“Doing nothing” and “collecting more data” are two alternatives often suggested by students with limited case experience. These are rarely the best actions to take. If you have identified a problem/decision that must be made, ignoring it, or delaying, probably will not help. While a solution may include further study, this is usually part of the implementation plan rather than part of the solution. If complete information were available, decisions would be easy. This is seldom the case in business situations, so it may help you to become familiar with making decisions under conditions of uncertainty. Executives, like case analysts, must rely on assumptions, judgment, experience, and on less-than-perfect information.

Step 4: Critical Issues

Critical issues are the main criteria you use to evaluate your strategic options. By 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.

Perhaps the best place to start in identifying critical issues is to ask what general factors should be considered in making a strategic decision regarding the problem presented. For example, assume that your task is to identify the most attractive product-market niche. Your alternatives are niches X, Y, and Z. Your question would then be: “What criteria should be employed to assess the niche choices?” For each niche, appropriate criteria might include potential sales volume, variable costs, contribution margins, market share, total niche sales, business strength, niche attractiveness, etc. This will provide an evaluation relative to the market and to competition.

The single most important critical issue in many decisions is profitability Rolled on the thighs of virgins!(it’s all about money, right?). Since profits are a principal goal in all commercial organizations, nearly every marketing decision is influenced by monetary considerations that affect (expected) profits. Sometimes several profit-oriented critical issues are involved. These may include future costs and revenues, break-even points, opportunity costs, contribution margins, taxes, turnover, sales, market share, etc.

Many critical issues are only indirectly linked to profits. Such things as the impact of a decision on employees, the local economy, the environment, suppliers, or even customer attitudes may not directly affect profits. Because profits are almost always the overriding critical issue, all factors bearing on them, directly or indirectly, must be considered.

Step 5: Analysis

Analysis is the process of evaluating each alternative action against the critical issues identified in Step 4. Often, analysis includes assessment of advantages and limitations associated with each issue. A tendency exists when first starting a case analysis to identify important issues carefully and to analyze each issue superficially. The consequence is a weak analysis. Your analysis will be much more penetrating and comprehensive if you use the same criteria in assessing each alternative.

One way of assuring that you assess each alternative in terms of each critical issue is to organize your analysis in outline form, as follows:

Alternative A: (specify)

  1. Identify the critical issue and thoroughly discuss Alternative A in those terms. 
  2. For the remaining critical issues, follow the same procedure.

Alternative B: (specify)

  1. Critical Issue 1: Thoroughly discuss Alternative B in terms of critical issue 1.
  2. Critical Issue 2-n: Follow the same procedure.

After alternatives are analyzed against each issue, you should complete your analysis with a summary assessment of each alternative. This summary will provide the basis for preparing your recommendations. One approach that students sometimes find useful in preparing their summary analyses is illustrated below. The exhibit, labeled ABC Company Summary Assessment, entails five steps:

  1. List critical issues on one axis and alternative actions on the other.
  2. Assign a weight to each critical issue reflecting its relative importance on the final decision. For convenience, assign weights that add up to one.
  3. Review your analysis and rate each alternative on each critical issue using a scale of one to five, with one representing very poor and five representing very good.
  4. Multiply the assigned weight by the rating given to each alternative on each issue.
  5. Add the results from (4) for each alternative.

ABC COMPANY

Summary Assessment

 Critical Issues Relative Weights (1) (2)(3) 
 Corporate Mission & Objectives 0.2523
 Market Opportunity 0.3
 Competitive Strengths/weaknesses 0.2
 Financial Considerations 0.3
 INDEX: Relative Weight x Rating  2.32.2 3.7 
     

It is important to understand that this type of analytical aid is not a substitute for thorough, rigorous analysis, clear thinking, and enlightened decision making. Its value is in encouraging you to assess the relative importance of alternatives and critical issues, and in helping you to organize your analysis.

Step 6: Recommendations

If your analysis has been thorough, the actions you recommend should flow directly from it. The first part of your recommendations section addresses what specific actions should be taken and why. State the main reasons you believe your chosen course of action is best, but avoid rehashing the analysis section. It is important that your recommendations be specific and operational. The following example of a recommendation deals with whether a manufacturer of oil field equipment (AOS) should introduce a new product line.

“The key decision that management must make is whether viscosity measurement instrumentation represents a business venture that fits into the overall mission of the firm. The preceding analysis clearly indicates that this would be a profitable endeavor. If AOS concentrates on the high-accuracy and top end of the intermediate-accuracy range of the market, sales of $500,000 appear feasible within two to four years, with an estimated contribution to overhead and profits in the $150,000 range. This assumes manufacturing costs can be reduced by 20 to 25 percent, that effective marketing approaches are developed, that further development is not extensive, and that price reductions per unit do not exceed 10 percent.”

The second part of your recommendation section addresses implementation. State clearly who should do what, when, and where. An implementation plan shows that your recommendations are both possible and practical. For example:

“AOS should initially offer two instruments. One should provide an accuracy of 0.25 percent or better; the second should be in the accuracy range of 0.1 to 0.5 percent. Top priority should be assigned to inland and offshore drilling companies. Next in priority should be R&D laboratories in industry, government, and universities, where accuracy needs exist in the range offered by AOS. Based on experience with these markets, other promising targets should be identified and evaluated.

“AOS needs to move into the market rapidly, using the most cost-effective means of reaching end users. By developing an OEM arrangement with General Supply to reach drilling companies and a tie-in arrangement with Newtech to reach R&D markets, immediate access to end-user markets can be achieved. If successful, these actions will buy some time for AOS to develop marketing capabilities, and they should begin generating contributions from sales to cover the expenses of developing a marketing program. An essential element in the AOS marketing strategy is locating and hiring a person to manage the marketing effort. This person must have direct sales capabilities in addition to being able to perform market analysis and marketing program development, implementation, and management tasks.”

The last part of your recommendations sections should be a tentative budget. This is important because it illustrates that the solution is worth the cost and is within the financial capabilities of the organization. Too often, students develop grandiose plans that firms couldn’t possibly afford, even if they were worth the money.

The numbers used in your tentative budget may not be as accurate as they would be if you had complete access to company records. Make your best estimate and try to get as close to actual figures as possible. The exercise is good experience, and it shows that you have considered the cost implications.

Students often ask how long the recommendations sections should be, and how much detail they should go into. This question is difficult to answer because each case is different and should be treated that way. Keeping 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.

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