Logical Structuring Case Competition Training Strategy and Operations

Logical Structuring Case Competition Training Strategy and Operations January 8, 2008 © 2005 Deloitte Inc.

Logical Structuring Agenda Purpose and Objectives Logical Structuring & Storyboarding Quantitative and Qualitative Observations Professionalism Do’s and Don’ts Appendix 2

Purpose The purpose of this session is to help prepare you for this week’s case competition. Objectives By the end of this session you should have a better understanding of: Ø How to logically structure a case presentation: • Logical Structuring & Storyboarding Ø How to use quantitative and qualitative data to support your research • Research Tips • Example Ø How to execute a successful presentation: • Professionalism Ø Examples of previous presentations: • 3 DOs & DON’Ts

Logical Structuring Agenda Purpose and Objectives Logical Structuring & Storyboarding Quantitative and Qualitative Observations Professionalism Do’s and Don’ts Appendix 4

Why does structure matter? 1. Makes the message precise Ø Forces the writer to be “dead clear” about what they are communicating to the reader, preventing messages that are unclear, unintended, or intellectually empty 2. Reveals gaps in thinking Ø Enables the writer to identify gaps by anticipating and responding to the reader’s questions before the communication is delivered 3. Provides clarity to the reader Ø Prevents the reader from “working” to understand the message, thereby eliminating the possibility that your message is misunderstood or ignored entirely Memo A John Collins telephoned to say he can’t make the meeting at 9: 00. Hal Johnson says he doesn’t mind making it later or even tomorrow, but not before 10: 30 and Don Clifford won’t return from Frankfurt until tomorrow late. The conference room is booked tomorrow, but free on Thursday at 11: 00 looks to be a good time. Is that okay with you? 5 Memo B Could we reschedule today’s 9: 00 meeting to Thursday at 11: 00? This would make it more convenient for Collins and Johnson, and would permit Clifford to be present. It is also the only other time this week that the conference room is free.

The Pyramid Structure Governing Thought: States the answer to the question raised in the readers mind Key Line: Major points which, taken together prove the answer Support: Data and facts which support the key line 6 Explains how or why

An Unstructured Communication ABC should go online and the first priority should be to defend its current market share Primary benefits of the internet strategy Opportunities and threats ABC’s current Without an ABC’s customers are online competitors more likely to channel ABC are increasing shop online risks losing their online than the some product general customers to assortment population competitors 7 ABC’s online sales in 2005 could reach $100 mm Defend market share Grow revenue Develop deeper relationships with customers Support ABC’s operating strategy

A Structured Communication Acme can reduce costs by $10 mm in the next 2 years through some operational improvements Governing Thought: Key Line: Support: 8 Re-engineer core functions to save $5 mm Evaluate internal cost of core function Compare cost of function to best-in-class benchmarks Adopt best practices based on benchmarks Outsource non-core functions to save $3 mm Differentiate service levels to save $2 mm Evaluate cost and service level of potential partners Determine economic level of service for each segment Select non-core functions Choose one partner for each function Segment customers by value Shift lower value segments to lower cost channels

Three Key Rules to Apply When Building a Pyramid 1. Ideas at any level must be summaries of the ideas grouped below – Derived from high-level ideas – Point of a paragraph is a summary of the sentences it contains 2. Idea in each grouping must always be the same kind of ideas – All ideas are from the same logical grouping – Label idea with a plural noun 3. Ideas in each grouping must be in a logical order – Deductively – Chronologically – Structurally – Comparatively Copyright © 2006 Deloitte Development LLC. All rights reserved. 9

Elements of the Introduction • Situation: Governing Thought: Answer Key Line: Support: 10 A statement about the subject with which you know the reader will agree • Complication: The complicating event that create the tension in the story • Question: The implicit question that results from the complication

Structuring a Response to How Acme must develop a value proposition tailored to the coyote market. Governing Thought: S: Acme must increase its focus on the coyote market C: Acme is not currently focused on the coyote market Q: How can Acme focus on the coyote market? How? Key Line: 11 Understand the unique needs of coyotes Adapt product line to meet coyote needs Educate coyotes on Acme’s ability to meet their needs Step 1 Step 2 Step 3

Structuring a Response to Why Drugs. RUs should spend $25 million to accelerate the approval process for Antizak Governing Thought: Why? Key Line: 12 S: Approval for Drugs. RUs new lifestyle drug Antizak is taking longer than expected C: Drugs. RUs can spend $25 million to accelerate the approval process Q: Should Drugs. RUs spend $25 million to accelerate the approval process? The Antizak market is expected to top $1 billion per year Earlier approval allows Drug. RUs more time before patent protection expires, which is worth $200 million in profit Competitors are developing a substitute that may capture the market if launched first Reason 1 Reason 2 Reason 3

Which Question is Raised - How or Why? S: The plant is not meeting its widget production goals C: The production line is frequently stopped because of insufficient parts Q: What should the plant do differently? A: The parts procurement process needs to be redesigned to reduce fulfillment time S: Sow’s Ear Inc. developed a silk purse product line 2 years ago C: Q: A: Since then, the silk purse division has been unprofitable What should Sow’s Ear do? Sow’s Ear Inc. should abandon its silk purse product line S: C: Q: A: ABC, a book retailer, is considering developing an online channel The online retail book market is dominated by 2 strong players Should ABC develop an online channel? Yes, ABC should go online S: C: Q: A: You have undertaken a number of initiatives to improve customer service Customer service continues to result in decreased customer satisfaction How can we improve customers service? We must redesign customer service 13

Clarifying Grouped Ideas List the Points Activities: 14 Synthesize findings from interviews, research and analysis Create a list of key points Identify the Type of Point Put the points into categories by defining the kind of problem being discussed, attempting to use similar level of abstraction across categories Summarize the Points Write a sentence that states the “essence” of each category Order the Points Put the points in logical order, such as order of importance or time order

The Importance of MECE Example Mutually Exclusive Do any of the points overlap? MECE Making Dinner: • Select menu • Buy ingredient • Prepare courses Mobile Phone Types: • Analog • Digital • GSM Collectively Exhaustive Have all possibilities been covered? Reasons to acquire competitor ABC: • Complimentary customer base • Superior technology • Digestible size Points across horizontal levels of the pyramid should be MECE (Mutually Exclusive, Collectively Exhaustive) 15

Storyboarding Creating a storyboard provides an outline for the presentation and the path you will follow: Ø Uses Pyramid Structure as a foundation Ø Maps out the storyline of a presentation Ø Establishes team and judging panel’s expectations about what is to be produced and delivered Ø Helps organize work and define data needs Ø Establishes evaluation frameworks and criteria used in the assessment Ø Facilitates greater productivity and higher quality Ø Keeps an engagement focused 16

Creating the Storyboard Governing Thought: Key Line: Overall costs in Mexico are 75% lower than in Wisconsin, resulting in recovery of moving costs in 6 months Cutting Edge Corporation should close its razor manufacturing operation in Wisconsin and manufacture razors in Mexico provides an operating environment that is as stable as Wisconsin, ensuring continuity of operations Support: One page for each idea 17 Situation Complication (Question) Page 1 Page 2 Manufacturing technology is more advanced in Mexico than in Wisconsin, enabling Cutting Edge to leverage leading edge capabilities Each requires a set-up page

Logical Structuring Agenda Purpose and Objectives Logical Structuring & Storyboarding Quantitative and Qualitative Observations Professionalism Do’s and Don’ts Appendix 18

Quantitative and Qualitative Observations Ø It’s important to use both quantitative and qualitative observations to support your recommendation • Qualitative data and analysis is required as hard justification for your recommendation (e. g. , dollar savings, head count reduction) • Qualitative data can be used to support and explain the meaning of quantitative research • Combining methods leads to a balanced, persuasive argument Definition Examples Quantitative • Numerical and statistical • Most suitable when the objective is to measure or quantify data • Answers the “what” questions • Firm stock value • financial statements • Market share • Net Present Value • statistical studies • surveys • censuses Qualitative • Interpretive and insightful • Most helpful when the goal is to understand situations or provide context • Answers the “how” and “why" questions • Pending lawsuits • press releases • Consumer trends • annual reports • Market perception • industry white papers • analyst reports 19 Sources

Research Tips Ø Structuring your research using a defined approach can help you research effectively in a short period of time • Several models can be applied to help you structure your research. One example is Porter’s Five Forces Ø Your approach to case research should mirror the logical structuring of your presentation • Governing Thought (Recommendation) Key Lines Support Ø But how do you know what your recommendations are before conducting your research? Ø Answer: Guess. • Based on your initial impressions of the case, generate some hypotheses on what you think the company should do. Then, based on your hypotheses, look for supporting evidence • The advantage of this approach is that it can dramatically reduce the amount of time spent on research. You will be focusing your efforts on facts that support your hypotheses Ø Begin by creating a research log • 20 This is a file that documents all of the research sources that have been reviewed and includes a summary of key findings, facts and sourcing information. A research log allows for easy dissemination of key findings saving time. Assign a format and owner up front

Example 21

Logical Structuring Agenda Purpose and Objectives Logical Structuring & Storyboarding Quantitative and Qualitative Observations Professionalism Do’s and Don’ts Appendix 22

Professionalism – Execution of the presentation There are two key avenues for case competitors to convey professionalism: (1)The execution of the presentation (2)The presentation materials Ø Assign roles early – subject matter experts and presenters • Who answers questions on which topics? Ø Rehearse the presentation to clearly define: • Sequence – what order will the team members will present in? • Duration – how long should each section take? • Hand-offs – how will each section of the presentation smoothly and logically transition from one team member to the next? • Contingency plan – which sections could be reduced or eliminated? Ø Pay special attention to numbers, statistics, charts and analysis • Inability to convincingly defend figures is a common pitfall • Be able to recall sources and assumptions without having to use reference material 23

Professionalism – Presentation Materials Ø Alignment • Check text and object alignment to ensure a consistent look across slides • Ensure headings and text boxes are in the same place, as you flip through your slides Ø Colour Scheme • A muted colour scheme is generally recommended • Avoid dark backgrounds, very bright colours or too many colours • Ensure that your colour scheme both prints well and projects well Ø Font • Sans-serif font styles tend to work best: Arial, Verdana, Tahoma • Font size should be readable, but not too large (min ~12 pt) Ø Consistency • Be consistent with font size, font style and colour scheme • Be consistent with punctuation at the end of bullets - Either use it or do not, but do not use it inconsistently • Be consistent with overall structure—i. e. use of tag lines versus just headers • Use the slide master to create a template to ensure consistency 24

Logical Structuring Agenda Purpose and Objectives Logical Structuring & Storyboarding Quantitative and Qualitative Observations Professionalism Do’s and Don’ts Appendix 25

DOs & DON’Ts DOs Ø Brainstorm as a team to develop a strategy and agree to an execution plan Ø Divide and conquer the work to efficiently execute on the plan • Determine required tasks, dependencies and agree to roles for each team member • Have each person create their slides based on an agreed upon template (designed in ‘Slide Master’) Ø Avoid ‘version control’ issues by having one person own the ‘master’ and others provide send over their slides for inclusion in the master Ø Proof-read your presentation for spelling, grammar, content and logic Ø Recognize each others’ strengths in determining roles for the presentation • Group members should present material they are most comfortable with • Confident speakers can present larger portions of the presentation Ø Leave time to rest the night before the presentation 26

DOs & DON’Ts DON’TS Ø Don’t fall victim to ‘analysis paralysis’ • Instead, set a deadline for making a recommendation decision and stick to it • You will not come up with a recommendation that is irrefutable and 100% supported by the facts, so at some point, your group must make a decision and run with it – spend the rest of the time supporting your decision and creating a compelling story Ø Don’t let disagreements impact your team’s dynamics • Agree upfront on a conflict resolution method (e. g. vote or unanimous agreement) • Disagreements can lead to productive discussions, so take a few minutes to hear each point of view and then make a decision on next steps Ø Don’t leave facts or figures unsourced – always include references in the research log for easy footnoting in your final presentation Ø Don’t leave formatting until the end 27

Last Year’s Case Competition Topic Question In early 2006, managers in technology and media companies around the world observed Google with awe, envy, and fear. The company’s opportunities seemed boundless. What would Google do next? Two Options Ø One option was to stay focused on the company’s distinctive competence: developing superior search solutions and monetizing those solutions through targeted advertising. Ø 28 Alternatively, Google could branch into new arenas: • Build Google into a portal like Yahoo! Or MSN by aggregating content into thematic channels • Extend Google’s role in e-commerce beyond search into a more active role as an intermediary facilitating transactions • Challenge Microsoft’s hegemony over the PC desktop by developing products to compete with Office and Windows

Evaluation Criteria Analysis • Identified key problems • Used supporting facts/data • Drew accurate conclusions • Considered risk • Offered original insights Presentation • • Recommendation Spoke clearly and concisely Structured storyline well Slides were visually attractive Showed enthusiasm and professionalism Question & Answer • Followed logically from analysis • Answered question posed • Dealt with all issues raised • Provided convincing explanations • Used decision criteria • Showed sounds business judgment • Admitted weakness • End result was practical/realistic • Answered as a team 29

Last Year’s 2 nd Place Case 30

Bright Colour Scheme 31

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1. Communicate recommendation in the beginning of the presentation 2. Set expectations 34

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Evaluate each recommendation against the 3 criteria 38

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Data Sourcing 42

Pretty Pie Chart 43

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Last Year’s Winning Case 50

Terry Huang Aron Lau Ke Zhang Godmans Chow

What is the situation? Question: What should Google do? Complication: Company is facing boundless opportunities. Stay focused with Google’s distinctive competencies. Branch into new arenas. Recommendation: Google should stay with its core competencies – providing superior search solutions $6. 5 billion by end of 2011 Introduction New frontiers? Growth Strategy Agenda Growth Strategy Implementation

Overview of the approach Measurement Metrics: • Market Potential What should Google do? • Fit with Mission Use Pyramid Structure to Frame the Storyboard Extend Google’s core search & targeting competencies. Option 1 Branch into new areas Build Google into a portal Extend Google’s role into ecommerce Develop Products to Compete with Office & Windows International Search Mobile Advertising New frontiers? Growth Strategy Introduction Option 2 Narrowcasting Implementation

Google should stay focus with its core competence Driven by Company Philosophy It is best to do one thing really, really well – developing superior search solutions Market Potential Has opportunity to further monetize its search solutions through targeted advertising Charts’ data sourced from provided Business Case Description Introduction New frontiers? Growth Strategy Implementation

Google should not branch into new arenas. The three arenas proposed deviates from the company mission, or have tremendous risks (market potential). Google’s mission - To organize the world’s information and make it universally accessible and useful. Inconsistent Font Build Google into a portal Extend Google’s role in e-commerce Develop products to compete with Office and Windows “We’re not in the portal business, we’re in the business of making all the world’s information accessible and useful. ” Acting as an intermediary facilitating transactions (Google Checkout) is consistent with the mission of the company. “There is strategic leverage in building an ecosystem around content and advertising that is an extension of our search mission. ” - Schemidt Introduction New frontiers? - Schemidt Growth Strategy Implementation

Google should not extend in e-commerce or develop products to compete with Microsoft due to the high risks (market potential) involved. Extend Google’s role in e-commerce 1. Strong competition: e. Bay has 39. 2% of the e-commerce market. e. Bay facilitates e. Commerce by offering tools such as Pay. Pal 1. Pay. Pal has 24% market share of U. S. online payments market. It is e. Bay’s major electronic payment method 1. 2. No incentive for Pay. Pal users to switch to using Google Checkout 3. Despite Google Checkout’s launch in June, 2006. Pay. Pal posted revenues of $417 million, a 37% growth rate compared with 2005’s fourth quarter 2. Inconsistent Alignment 1 Wikipedia. org 2 CNN. com Introduction New frontiers? Growth Strategy Implementation

Google should not extend in e-commerce or develop products to compete with Microsoft due to the high risks (market potential) involved. Develop products to compete with Office and Windows 1. Strong competition: Microsoft 2. Difficult for new entrant: Open. Office currently only has 14% of the enterprise software market as of 2004 – Hard to convince user to switch to new desktop applications 1 3. Relatively small potential revenue The market for Office is only an annual revenue of $1 billion 1 Too small of a market size comparing to Google's currently advertising business (140 million vs. 6. 1 billion) 1 Wikipedia. org Introduction New frontiers? Growth Strategy Implementation

Google should continue to strengthen its expansion into the international online advertisement market. U. S. internet user is 30% of all users in the world. By 2009, it will decrease and become 27. 7%. U. S. online ads spending slowed down recently while online ads spending from the international market are increasing at a faster speed. e. Market. com The Winning Case Used Extensive DATA to Back Up its Statement Introduction New frontiers? Growth Strategy Implementation

International Online Advertising Entry Analysis Who is the competitio n? How do their products & services differ Yahoo, MSN, Local search engines (Baidu) Google's competitors entered the market earlier, and tailored products to adapt to local customers. Introduction What are the potential barriers to entry How does Google become a player? What are the risks Perhaps government regulations (censorship issue in China) Partner with local companies, leverage our leading technology, and adapt to local environment. Late to the game. Lack of understanding of the local environment New frontiers? Growth Strategy Implementation

We believe the emerging mobile advertising market is a fit for both Google’s technological expertise and philosophies. The potential of the mobile user base is promising, projected to rise to 1 billion users of 3 G data services by 2011. Mobile advertising revenues is expected to reach $2. 9 billion dollars by 2011. More Data!! Asia – Europe Business: 3 G in the world : June 20 th 2006 Introduction New frontiers? Growth Strategy TVweek. com: Nov 15 th 2006 Growth Strategy Implementation

Mobile advertising market analysis before entry. Introduction New frontiers? Growth Strategy Implementation

We believe the emerging narrowcasting market is a fit for both Google’s technological expertise and philosophies. Narrowcasting revenue in the US is projected to reach $1. 2 billion by 2009 - >$700 million in network/software operations. Targeted online gaming advertising worth is projected to be worth $0. 5 billion by 2010. Even More Data!!! Cap. V Info. Stats March 2005 Introduction New frontiers? Growth Strategy Businessweek Jan 2007 Growth Strategy Implementation

Narrowcasting market analysis before entry Who is the competition ? How do their products & services differ What are the potential barriers to entry How do we become a player? What are the risks? Inaccurate forecast of market. EK 3, Scala, ip. Signs Introduction Current infrastructure of fixed targeted content that is not user targeted New frontiers? Privacy concerns, government billboard regulations, aesthetic trends Growth Strategy Partner with existing players, leverage Google’s user targeted algorithms for more targeted ads. Growth Strategy Changing government regulations on public ads. Implementation

Google can approach to enter the international online searching and advertising market with relative ease. To continue strength its expansion in the international online advertisement market Identify potential international market to expand its service Conduct market research to understand customer behavior Develop localized applications and adapt to taste of local customers Cooperate with local business (partnership, M&A) Introduction New frontiers? Growth Strategy Implementation

Google can approach to enter the narrowcasting and mobile advertising market with relative ease Inconsistent Font Tie into the current and emerging markets with Google’s current Google Froogle Blogger Maps Mobileinfrastructure. News technology and Google Server Retail Targeted User System Corporate Group/Individual Integrator Hospitality Services Public Spaces Advertiser/Contents ____ Gamers Anyone ____ Mobile device users Introduction New frontiers? Growth Strategy San Fran Wifi ____ Game developers ____ Mobile service providers Growth Strategy Implementation

Google’s projected growth in the next 5 years International Search $4. 98 B ($2. 4 B market with 20% annual growth) Recommendation Again Backed Up by DATA! Mobile Advertising : $1. 0 B(assuming 1/3 market share) Introduction New frontiers? Clear Visual Representation Combined revenue growth of an additional $6. 5 B by the end of 2011. Growth Strategy Narrowcasting: $0. 5 B (assuming 1/3 market share) Growth Strategy Implementation