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

A useful approach to making decisions is to summarize alternatives using a chart as

illustrated below.

ABC Company Summary Assessment

Alternatives (Rating)

Relative
Criteria Weights (1) (2) (3)

Corporate Mission and Objectives (.2) (5) (2) (3)

Market Opportunity (.3) (2) (3) (5)
Competitive Strengths/Weaknesses (.2) (2) (3) (2)
Financial Position (.3) (1) (1) (4)

Index: Relative Weight X Rating 2.3 2.2 3.7

To prepare a summary as illustrated above, follow the five steps listed below:

Step 1: List criteria on one axis and the alternative actions on the other axis.

Step 2: Assign a weight to each criterion reflecting its relative importance on

the final decision. For convenience, assign weights that add up to 1.

Step 3: 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.

Step 4: Multiply weights assigned to each criterion by the given ratings to each
alternative on each issue.

Step 5: Add the results from Step 4 for each alternative.

For example: (.2x5)+(.3x2)+(.2x2)+(.3x1) = 2.3

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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