to Approach Case Analysis1 Michael P. Claudon January, 1998 As with actual business decisions, case analysis can be both difficult and seemingly trivial. The difficulty arises from the reality that there is never have enough information to facilitate and support recommended courses of action. Incomplete information oddly, can also make cases seem easy or even trivial as almost any "solution" can be defended. Rarely is there a single correct answer. Because they hold divergent underlying assumptions, different people may deduce and defend starkly conflicting conclusions from the same facts. Despite this odd juxtaposition of characteristics, case analysis is compelling because it is grounded in actual experience. Cases are real; they deal with business issues that actually confronted executives managing actual companies. Thus case learning involves deducing principles and generalizations, and rendering recommendations, from experience rather than from an abstract body of theory or modeling. The uncertainty inherent in and limitations of a mathematical model are implicit and found in its behavioral and state assumptions. Uncertainty is explicit in case analysis; decisions must be made and actions taken despite incomplete information and varying degrees of risk. Where a theoretical model's predictions might be tested using data and statistical techniques, the company's ultimate prosperity or failure gauges the correctness of case study recommendations. Above all else keep in mind that developing a pattern of thinking, not developing specific case solutions, is the primary goal of the case method. Some Guidelines: 1. Read and Reflect -- Whether working alone are with a team, your first step is quickly reading the entire case alone. Read for general themes, for identifying the broad brush strokes and identifying the main issues of the case. Reflection, not coming to conclusions is your goal at this point. Don't even make notes or begin highlighting passages at this reading. Read the case again with greater care and attention to detail a day or so later. Take notes, paying particular attention to ideas, themes, acts, values, and attitudes about which decisions must be made. Begin formulating your view of the case in writing. Note the problems it raises and the data needed to resolve them. Try to identify all the positions reasonable people
1 The following note has been complied from a variety of sources, including a variety of Harvard Business School notes on learning with cases, as well as those collected from disparate sources, many of which were anonymous, over the years.
might take. Then try to see how best the issues you identified can be raised from these positions. Study the spreadsheets contained in both the body of the case and its appendices. Write your thoughts out and then join your teammates to begin building your analysis, recommendations and presentation of same. 2. Team Meetings -- Realizing this fact, successful teammates maintain open minds, especially during initial "brainstorming" sessions. Remember, business decisions typically combine judgement and straightforward empirical analysis. Rarely is there an obviously "right" (or "wrong") decision. A decision may appear right to you given your assessment and consideration of the facts. Other teammates, evaluating same facts, may arrive at a substantially different "right" response. But group analysis involves participatory learning and decision-making. Thus: Push your ideas, supporting them with analysis, reasoning, and data Listen to your teammates, evaluating their positions in the process Remain prepared to change you mind based on presentation of new insights and evidence Enjoy the friendly competition and debate. 3. Value and Uses of Data -- Tables, charts, graphs, and related exhibits typically contain information critical to resolving the case's issues. "The analysis of the hard data included in a case is an important part of the learning experience and usually permits the student to infer far more about the company and the situation than is stated in the text."2 Additional data on the relevant industries and competitors may be usefully included in the competitor and situation/prospects analysis that is part and parcel of successful case analysis. Be certain that data collected and applied to the case is contemporary with the time period in which the case is presented. 4. Textbooks -- Course textbooks can be valuable assets when doing cases. Scanning the relevant sections of the textbook after reading a case to glean ideas and to refresh your memory about possible alternatives is always time well spent.3 The text offers a collection of analytical tools and strategies. Selecting and creatively applying the most appropriate tools is a core challenge you, the analyst, faces. The text, then, offers the resources you need, but not the solution or even the correct approach to the case. 5. Additional Information -- Before launching a search for additional information, consider asking yourself:
2D.F. Healy, "Student Guidelines to Using the Case Method," Consumer Behavior Dynamics, M. Wayne DeLozier, (ed.), Columbus, Charles E. Merrill Publishing Company, 1977. 3Ibid.
Whether research is needed or justified by the nature and magnitude of the particular situation? What specific kind of information will best support the analysis; and how will I use it? What and where are the correct sources most likely to be? Can I have confidence in the results or in demonstrating the need for still further searching or preparation? How can I translate the information collected into results?4 Remember the goal here is filling in the gaps, not discovering what actually happened, so that the information collected matches that an executive would have had at the time of the case. 6. Identifying the Problem -- Herein lies the single most important aspect of case preparation. First, reread the case again, reviewing your list of actual/potential issues, opportunities, and problems. Purge all items which are symptomatic of more fundamental problems from the list. Then organize the remaining items both by degree of importance (urgency) and by topical areas. Note: A precise, tightly written statement of the case's issues, opportunities, and problem(s) is an essential element of every case presentation. Michael Porter offers the following problems/issues/opportunities:5 Structure Systems Human resource practices Conflict resolution processes conceptual outline for identifying
Common fault: specifying symptoms of more fundamental issues as problems germane to the case, rather than the actual problems. Example: evidence of increasing competition, product obsolescence, inadequate sales force, or rising prices may actually be symptoms of a deeper malady -- say an absence of CEO leadership, of a company-wide strategic plan, or of appropriate supervisorial and incentive systems. Recommending that efficiency be raised to facilitate lowering prices and regaining market share treats the symptoms but not the disease infecting the company. Be suspicious of symptoms masquerading as problems. Adopt a "convince me" attitude regarding all entries on your and teammates' "bill of problems". 7. Specifying and Evaluating Alternative Action Plans -- The literature on the case method suggests that the best analysis offers several and as many as five reasonable
4E.D. Bursk and S.A. Greyser, "Introduction to the Study of Cases," Cases in Marketing Management, Englewood Cliffs, prentice-Hall, Inc., 1975 5Michael E. Porter, Competitive Advantage, Creating and Sustaining Superior Performance, New York, Macmillan, Inc., 1985.
action options. Even though they were written almost 40 years ago, answering Kenneth Andrews' "five critical questions" -- in cases where they are applicable -- provide an excellent "jumping off" point for launching your analysis: What are the essential economic and technical characteristics of the industry in which company the participates? What trends suggesting future change in economic and technical characteristics are present? What is the nature of competition both within the industry and across industries? What are the requirements for success in competition in the company's industry? Given the technical, economic, social and political developments that most directly apply, what is the range of strategy options available to any company in this industry?6 Your answers help expose the company's strengths and weaknesses, and particularly its core competencies, which is critical to judging the relative merits of alternative courses of action. For example, the discovery by an IBM researcher of a way to get a nickel-silver alloy to reliably adhere to plastic did not mean that IBM could profitably launch a line of action toys that were both light and indestructible. IBM had (and has) no core competencies in manufacturing, distributing, and marketing toys. Thus the researcher was about to them when someone else in the company happened on the results. No, IBM would not become a toy company, but it would radically revolutionize the typewriter industry by introducing the Selectric typewriter, with its bouncing ball type head and immovable carriage. 8. Biases Each team member brings personal baggage to the challenge of doing cases. Biases are convenient and effective categorizing and recalling information. But they when they become imbedded into rigid categories, biases spawn narrow ideological perspectives and severely limit our ability to ask the right questions and entertain competing courses of action on a level playing field. Extreme utopianism thinking, viz., categorically denying the existence of discrimination based on gender, race, and ethnicity in individuals and organizations; or extreme cynicism that all change is motivated by forces antagonistic to my position or wellbeing. 9. Decision Time At some point in the process, making a decision can no longer be avoided, no matter how seductive putting off the decision "just a bit longer" may be. Managers operate under extreme time constraints. They are forced to make decisions; and successful managers develop the skill to do so in the face of incomplete information, insufficient time, or too little experience.
6Kenneth Andrews, (ed.), The Case Method of Teaching Human Relations and Administration, Boston, Harvard University Press, 1960.
Confront the team's decision(s) against the "test of reason" Does it make sense? Does it solve or ameliorate the problem as your team has framed it? If the decision fails the test, do not be too quick to jettison it. Has the problem been accurately identified and articulated? Perhaps the decision will make sense once the problem is reformulated based on information provided by the proposed course of action. If the team concludes that the problem was correctly stated, inconsistent (or unreasonable) action recommendations must be recast. In the end, the action recommendations must both fit the problem and be consistent with the company's capacity for action given its competencies and its competitive situation. Finally, what specific actions do you recommend and how much will they cost? Related to cost are considerations of timing, intra-organizational reactions, competitor- and customer-reactions, resource requirements and availability, the means by which the outcomes will be measured against some preconceived performance milestones. In other words answer the "who, what, why, and how" questions: Who should be involved? What are the most likely competitor and customer responses, and what do these responses imply for the success of the action being recommended? Why should action (any action) be taken at all? How can/will performance be measured? 10. The "Talking Points" Presentation Approach to Writing the Case Your audience has neither the time or inclination to read endless narration. You are competing against a myriad of issues demanding your audience's attention. The outline or talking points format allows you to lay out your analysis and evidence concisely and efficiently. What is (are) the problem(s)? What actions do you recommend? Why and particularly why will they solve the problem(s) you identify? Here is one structure that has been used to good advantage: Pertinent data on the present situation (not the specific problem). Statement of objectives what is the desired situation? Specify the problem(s) and/or opportunity(ies). Offer alternative approaches, listing the strengths and weaknesses (liabilities) of each. Offer criteria that your recommendation(s) indeed any recommendations related to this situation must satisfy. The recommendation(s), including the specifics of implementation. Method(s) for monitoring results. Additional research needed (if any). S...