1. Analyzing Strategic Management Cases
Strategic Management: creating competitive advantages
Gregory G. Dess
G. T. Lumpkin
Marilyn L. Taylor
Analyzing Strategic Management Cases

2. Why Analyze Strategic Management Cases?
The process of analyzing, decision making, and implementing strategic actions raises many good questions
Why do some firms succeed and others fail?
Why are some companies higher performers than others?
What information is needed in the strategic planning process?
How do competing values and beliefs affect strategic decision making?
What skills and capabilities are needed to implement a strategy effectively?

3. Why Analyze Strategic Management Cases?
Case analysis
Simulates the real-world experience
Forces you to choose among different options
Set forth a plan of action based on your choices

4. Why Analyze Strategic Management Cases?
Detailed description of a challenging situation faced by an organization
Usually includes a chronology of events and extensive support materials
Financial statements
Product lists
Transcripts of interviews with employees

5. Skills Developed from Case Analyses
Evaluate many different elements of a situation at once
Differentiating between the factors that are influencing the situation
Understanding that problems are often complex and multilayered
Dig deep
Being too quick to accept an easy solution will probably fail to get to the heart of the problem
Differentiate
Ask whether the case is operational, business level, or corporate level issues. Do the problems stem from weaknesses in the internal value chain or threats in the external environment?

6. Skills Developed from Case Analyses
Envision explanation that might not readily be apparent
Imagine different scenarios
Contemplate the outcome of a decision
Deal with uncertainty and incomplete knowledge
Missing data
Information may be contradictory
Speculate about details and consequences that are unknown
Differentiate
Speculate

7. Skills Developed from Case Analyses
Look at the big picture
Have an organizationwide perspective
Integrate the information into one set of recommendations affecting the whole company
Changes made in one part will affect the others
Integrate the impact of various decisions and environmental influences on all parts of the organization
Differentiate
Speculate
Integrate

8. How to Conduct a Case Analysis
Prepare for a case discussion
Do your homework
Investigate
Analyze
Research potential solutions
Gather the advice of others
Become immersed in facts, options, and implications

9. How to Conduct a Case Analysis
Put yourself “inside” the case
Think like an actual participant
Strategic decision maker
Board of directors
Outside consultant
Try different perspectives
One of the most challenging is as a business founder or owner
Hiring an outside consultant may not be an option

10. Five Steps for Conducting a Strategic Management Case Analysis
Step One
Become familiar with the material
Read quickly through the case one time
Use initial read-through to assess possible links to strategic concepts
Read the case again, making notes
Evaluate application of strategic concepts
After forming first recommendation, thumb through the case again to assess consequences of actions you propose

11. Five Steps for Conducting a Strategic Management Case Analysis
Step One
Step Two
Identify problems
Some cases have more than one problem
Avoid getting hung up on symptoms
Articulate the problem
Writing down a problem statement gives you a reference point when you proceed through the case analysis
Some problems are not apparent until after you do the analysis
Symptoms e.g. sales at falling; Problem : quality is deteriorating vis a vis competitor product

12. Five Steps for Conducting a Strategic Management Case Analysis
Step Three
Step Two
Conduct strategic analyses
Determine which strategic issues are involved
Use strategic tools to conduct the analysis
Five-forces analysis
Value chain analysis
Contingency frameworks
Financial analysis
Test your own assumptions about the case

13. Financial Ratio Analysis Techniques
Ratio What It Measures
Short-term solvency, or liquidity, ratios:
Current ratio Ability to use assets to pay off liabilities.
Quick ratio Ability to use liquid assets to pay off liabilities quickly.
Cash ratio Ability to pay off liabilities with cash on hand.
Adapted from Exhibit 14.1 Summary of Financial Ratio Analysis Techniques

14. Financial Ratio Analysis Techniques
Ratio What It Measures
Long-term solvency, or financial leverage, ratios:
Total debt ratio How much of a company’s total assets are financed by debt.
Debt-equity ratio Compares how much a company is financed by debt with how much is it finance by equity.
Equity multiplier How much debt is being used to finance assets.
Times interest How well a company has its interest obligations covered.
ratio
Cash coverage A company’s ability to generate cash from operations.
Adapted from Exhibit 14.1 Summary of Financial Ratio Analysis Techniques

15. Financial Ratio Analysis Techniques
Ratio What It Measures
Asset utilization, or turnover, ratios:
Inventory turnover How many times each year a company sells its entire inventory.
Day’s sales in How many days on average inventory is on hand before it
inventory is sold.
Receivables How frequently each year a company collects on its credit
turnover sales.
Days’ sales in How many days on average it takes to collect on credit
receivables sales (average collection period).
Total asset How much of sales is generated for every dollar in assets.
turnover
Capital intensity The dollar investment in assets needed to generate $1 in sales.
Adapted from Exhibit 14.1 Summary of Financial Ratio Analysis Techniques

16. Financial Ratio Analysis Techniques
Ratio What It Measures
Profitability ratios:
Profit margin How much profit is generated by every dollar of sales.
Return on assets How effectively assets are being used to generate a
(ROA) return.
Return on equity How effectively amounts invested in the business by its
(ROE) owners are being used to generate a return.
Market value ratios:
Price-earnings How much investors are willing to pay per dollar of current
ratio earnings.
Market-to-book Compares market value of the company's investments to
ratio the cost of those investments
Adapted from Exhibit 14.1 Summary of Financial Ratio Analysis Techniques

17. Five Steps for Conducting a Strategic Management Case Analysis
Step Four
Step Three
Propose alternative solutions
Develop a list of options first without judging them
Do nothing is often a reasonable alternative
Evaluate alternatives
Can the company afford it?
Is the solution likely to evoke a competitive response?
Will employees accept the change?
How will it affect other stakeholders?
How does it fit with the vision, mission, objectives?
Will the culture or values of the company change?

18. Five Steps for Conducting a Strategic Management Case Analysis
Step Four
Step Five
Make recommendations
Make a set of recommendations that your analysis supports
Describe exactly what needs to be done
Explain why this course of action will solve the problem
Include suggestions for how best to implement the proposed solution
The solution you propose must solve the problem you identified

19. Preparing an Oral Case Presentation
Rule Description
Organize your thoughts
Begin by becoming familiar with the material. Compare notes about key points of the case and share insights among team members. Make an outline.
Emphasize strategic analysis
Purpose of case analysis is to diagnose problems and find solutions. You may need to unravel the case material as presented and reconfigure it in a way that can be more effectively analyzed. Three major categories
Background/Problem Statement 10-20%
Strategic Analysis/Options %
Recommendations/Action Plan 10-20%
Emphasis should be on analysis. You may need to reorganize the material so that the tools of strategic analysis can be applied.
Adapted from Exhibit 14.2 Preparing an Oral Case Presentation

20. Preparing an Oral Case Presentation
Rule Description
Be logical and consistent
Rambling presentations are hard to follow, may confuse the listener, and fail to evoke a good discussion. Present arguments and explanations in logical sequence. Support with facts and appropriate financial analyses. Be sure solutions address the problems you identified.
Defend your position
Anticipate what others might disagree with and be prepared to defend your views in class discussion. Be aware of the choices you made and implications of your recommendations. Be clear about your assumptions. Be able to expand on your analysis.
Share presentation responsibilities
Strategic management case analyses are often conducted by teams. Each member should have a clear role in the oral presentation, preferably a speaking role. Coordinate the different parts into a logical, smooth-flowing whole.
Adapted from Exhibit 14.2 Preparing an Oral Case Presentation

21. How to Get the Most from Case Analysis
Keep an open mind
Take a stand for what you believe
Draw on your own personal experience
Participate and persuade
Be concise and to the point
Think out of the box
Learn from the insights of others
Apply insights from other case analyses
Critically analyze your own performance
Conduct outside research

22. Preparing an Written Case Analysis
Rule Description
Be thorough
Many ideas about oral presentations also apply to written case analysis. However, a written analysis typically has to be more complete. Write out the problem statement and articulate assumptions. Support your arguments and reference case materials and other facts more specifically.
Coordinate team efforts
Written cases are often prepared by small groups. Within a group you may disagree about the diagnosis or recommended plan of action. Healthy disagreement may lead to a richer understanding of the case, but, before committing your ideas to writing make sure you coordinate your responses. Don’t prepare a written analysis that appears contradictory or looks like a patchwork of disconnected thoughts.
Adapted from Exhibit 14.3 Preparing a Written Case Analysis

23. Preparing an Written Case Analysis
Rule Description
Avoid restating the obvious
There is no reason to restate the case content. This uses up valuable space and accomplishes little. Stay focused on key points. Only restate information that is most central to your analysis.
Present information graphically
Tables, graphs, and other exhibits are usually one of the best ways to present supporting factual material. Financial calculations such as break-even analysis, sensitivity analysis, or return on investment are best presented graphically. Even qualitative information such as product lists or rosters of employees can be summarized and viewed quickly by using a table or graph.
Exercise quality control
Use good grammar, avoid misspelling words, and eliminate typos and other visual distractions. Make your written presentation appear as professional as possible. Don’t let a poor appearance of your written case keep the reader from recognizing the importance and quality of your analysis.
Adapted from Exhibit 14.3 Preparing a Written Case Analysis

24. Using Conflict-Inducing Decision-Making Techniques in Case Analysis
Devil’s Advocacy
Dialectical Inquiry
Groupthink
Use conflict-inducing decision-making techniques to help prevent groupthink and lead to better decisions.

25. Symptoms of Groupthink and How to Prevent It
Illusion of invulnerability
Belief in the inherent morality of the group
Stereotyped views of members of opposing groups
Application of pressure to members who express doubts about the group’s shared allusions or question the validity of arguments proposed
Practice of self-censorship
Appointment of mindguards

26. Symptoms of Groupthink and How to Prevent It
Preventing groupthink
Leaders must encourage group members to address concerns and objectives
Leaders should adopt impartial stance
Leader should encourage members to discuss deliberations with trusted associates and report perspectives back to group
Invite outside experts, challenge group’s viewpoints and positions
Divide into subgroups, meet at different times, reconvene to resolve differences
Hold a “second chance” meeting

27. Using Conflict to Improve Decision Making
Devil’s Advocacy
Devil’s advocacy
One of the groups (or members) acts as a critic to the plan
Devil’s advocate comes up with problems of the proposed alternative and suggests reasons for not adopting it
Forces the group to take a hard look at its proposed solution
Can be demoralizing
May not lead to better suggestions

28. Using Conflict to Improve Decision Making
Devil’s Advocacy
Dialectical inquiry
Identify proposal and information used to derive it
State underlying assumptions
Identify counter plan (antithesis)
Engage in debate
Identify a synthesis (best components of each alternative)
Can be very time consuming
May result in undesirable compromises (original solution was better)
Dialectical Inquiry

29. Two Conflict-Inducing Decision-Making Processes
Adapted from Exhibit 14.4 Two Conflict-Inducing Decision-Making Processes

30. Making Case Analysis Teams More Effective
Spend more time together
Make a focused and Disciplined Agenda
Pay more attention to Strategy
Produce Real Decisions
Spend more time together: Analyzing the case itself and organizing how the work to be conducted. Expect to have long meetings during the beginning of the project when the work is being organized and the issues in the case are being sorted out and at the end when the team must coordinate the components of the case analysis that will be presented.
Make a focused and disciplined agenda: Sorting our issues of the case, linking elements of the case to the strategic issues presented in class or the text and assigning roles to various team members.
Pay attention to strategy
Produce Real Decisions Team meetings should be more than information sharing and group input.