Case Analysis & Recommendation 101 Fulltime MBA Class of 2013 August 16, 2011 Glenn Voss

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Case Analysis & Recommendation 101 In case analysis, you apply frameworks and models to generate insights into a real or simulated business problem. You also calculate metrics to evaluate the likely outcomes associated with various alternatives. Your recommendation is formulated as a strategy.

Case Analysis & Recommendation 101 Models Frameworks Metrics Concepts & Terminology

 A system of words used to name concepts in a particular discipline.  Examples: – Objectives, Resources & Capabilities – Segmentation, Targeting & Positioning – Product, Price, Promotion- Communication, Place-Channel – Customer Relationship Management – Customer Acquisition & Retention – Customer Satisfaction & Value What is Terminology?

Terminology  An objective is defined as: – The criterion by which the success or failure of the strategy is measured.  Characteristics of well-written objectives: – Lists a quantified standard of performance. – Designates a clear time frame. – States goal in measurable terms. – Should be challenging but realistic.  Objectives frequently require trade-offs; e.g., increasing market share versus increasing profits; acquiring new customers versus retaining current customers.

 Resource: tangible (e.g., equipment, machinery, mail list), intangible (e.g., brand name, customer knowledge), or human assets that the firms currently possesses.  Capability: the ability to deploy individual resources (e.g., patents, know-how, brand names, equipment) to perform a task or activity to produces a desired end result. What the firm can do (i.e., skills) as a result of teams of resources working together. Terminology Terminology (continued) We are interested in resources & capabilities that are rare & valuable.

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 A measure for quantitatively assessing a complex process or outcome, along with procedures for carrying out and interpreting the measures.  Examples: – Revenues & Profits (Break-even, ROI) – Contribution Margin – Customer Lifetime Value – Conversion/Purchase Rates – Awareness/Recognition What is a Metric?

 A structured approach to defining, analyzing or communicating the characteristics of a complex system or process.  Examples: – Comprehensive Metabolic Panel – Google’s PageRank Algorithm – SWOT Analysis – Case Analysis – Strategy Formulation What is an Analytic Framework?

 Define the problem or objective.  Enumerate the decision factors.  Consider relevant information.  Identify the best alternative.  Develop a plan for implementing the chosen alternative.  Evaluate the decision (alternatives) and the decision process. Case Analysis Analysis Recommendation

 A hypothetical or simple description of a complex system or process.  Effective strategies rely on insightful or valid models.  Examples: – Aristotle’s Geocentric Model – Newton’s Model of Classical Mechanics – Product Life Cycle Model – Price Response Models – Advertising Response Models What is a Model? accounted for all observations of the movement of the sun and the moon, and the planets, and the stars; good predictor of future positions of celestial bodies (i.e., verifiable) simplicity (Principle of Parsimony) - as few assumptions or rules as possible & no contradictions.

Modeling the Marketing Process P roduct/Service Offering P romotion/ Communication P ricing P lace/ Channel C ompany C ustomers C ompetitors C ollaborators C ontext Market Segmentation Selection & Targeting Product/Service Offering Positioning SWOT Analysis Customer Acquisition Customer Retention Customer Relationship Management Revenue & Profits Create Value Communicate, Share & Capture Value Sustain Value

This case addresses whether a beer company should introduce a brand extension in response to changing competitor strategies & customer tastes. Read the case, define the problem, & identify alternative solutions & key issues. Use the following questions to help guide the evaluation.  What has made Mountain Man Lager successful (Is it successful?)? What is its competitive advantage? Define the key competitors. What has caused Mountain Man Lager’s decline in spite of its strong brand?  What are/should be the objectives for Mountain Man Lager over the next 2-5 years?  How would introduction of MM Light affect these MM Lager objectives? Specifically, what level of cannibalization do you predict and why?  What are/should be the marketing and financial (e.g., breakeven) objectives? Can MM Light achieve those objectives?  Who would be the target customers & competitors for MM Light?  What marketing capabilities are necessary to make a MM Light introduction successful? Does Mountain Man currently possess these capabilities? Mountain Man

Mountain Man SWOT StrengthsWeaknesses Capabilities (e.g., Product, Channels, Communications, Price, CRM): Resources Capabilities (e.g., Product, Channels, Communications, Price, CRM): Resources OpportunitiesThreats External focus on: 1. Customers: 2. Collaborators: 3. Competition: 4. Socioeconomic, technological, legal, product life cycle… Context External focus on: 1. Customers: 2. Collaborators: 3. Competition: 4. Socioeconomic, technological, legal, product life cycle … Context

MM Marketing Strategy Mountain Man LagerMountain Man Light Objectives Quantified, measurable with a specified time frame Challenging & realistic Target Customers Likely to be loyal? MM Competitive Advantage Key capabilities  …is based on Positioning Statement For, MM Lager is a that, unlike, offers For, MM Light is a that, unlike offers

 Conduct analyses that quantify the expected outcome associated with each alternative using the Mountain Man Excel spreadsheet. If you need more background on breakeven analysis, review the Breakeven Tool. If you need more background on calculating net present value, review the Discounting Future Income and Present Value Tool.Mountain Man Breakeven ToolDiscounting Future Income and Present Value Tool  To complete the spreadsheet, start with the worksheet titled MMLagerDecline. Fill in the key assumptions that are highlighted in yellow. The spreadsheet should fill in as you enter these numbers. Note that constructing spreadsheets in this manner is important because it allows you to conduct “What-if” analyses by simply changing your assumptions.  Continue to fill in each worksheet in a similar manner, leaving the Summary sheet for last. The MMLagerGrowth sheet allows for the possibility of allocating resources and effort to reversing the recent decline in MM Lager sales. If you (and I) have completed everything appropriately, the Summary sheet should summarize each of the options. You now need to assign likely probabilities to each outcome associated with the Light go/no-go decision. Optional Mountain Man Exercise