Navigating the Case Analysis Process for Strategic Management

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Navigating the Case Analysis Process for Strategic Management Dr. Paul N. Friga 2005

Navigating the Case Analysis Process for Strategic Management Dr. Paul N. Friga 2005

Overview of Document • This slide deck is designed to guide students through the

Overview of Document • This slide deck is designed to guide students through the process of analyzing a case study for a general management or strategic management course • It is a step-by-step process that is illustrated with an actual case study - Singapore International Airlines: Strategy with a Smile (Thunderbird, 2001) • The material is organised into 5 phases – and each is supported by a suggested approach, tips and sample output from the case (but remember to try and solve the case before reading the sample output from the case!)

Objectives of Case Analysis • • Application of theoretical concepts Development of managerial skills

Objectives of Case Analysis • • Application of theoretical concepts Development of managerial skills Use of disciplined problem-solving process Group discussions afford multiple context and perspective opportunities • Deal with ambiguity Source: HBS Note – An Introduction to Cases (Shapiro, 1984)

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising 5. Concluding What are the objectives? What are the facts? What is important? What are the options? What is the answer? • Identify the key question • Flip through the case • Skim read the case • Carefully read the beginning and end • Label the facts in the margins of the case: • General (GEN) • Industry (IND) • Competition (COM) • Strength (STR) • Weakness (WEA) • Summarise the facts • Eliminate unimportant • Eliminate redundant • Mark most important • State the 1 -3 key questions • Identify options (MECE) • State decision criteria • Summarise pros/cons • Take a position • Identify the few key supporting facts • Discuss implementation • Mention risks The key to good case analysis is to break down the case facts into a clear, understandable and useful form

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising 5. Concluding What are the objectives? What are the facts? What is important? What are the options? What is the answer? • Identify the key question • Flip through the case • Skim read the case • Carefully read the beginning and end • Label the facts in the margins of the case: • General (GEN) • Industry (IND) • Competition (COM) • Strength (STR) • Weakness (WEA) • Summarise the facts • Eliminate unimportant • Eliminate redundant • Mark most important • State the 1 -3 key questions • Identify options (MECE) • State decision criteria • Summarise pros/cons • Take a position • Identify the few key supporting facts • Discuss implementation • Mention risks The key to good case analysis is to break down the case facts into a clear, understandable and useful form

Phase 1 – Framing Key Question: What are the objectives? STEPS TIPS Identify the

Phase 1 – Framing Key Question: What are the objectives? STEPS TIPS Identify the key question (what is the assignment, discussion questions, and purpose of this case study) • Pay attention to what the Professor says as the case is introduced • Understand the context of the case in terms of material from the textbook Flip through the case (in less than 5 minutes, look at the big picture of the case and the overall components) • This is literally intended to give you a look at the overall contents of the case • Conclude as to the general nature of the case – quantitative/qualitative, technical/general, long/short, etc. Skim read the case (in less than 15 minutes read the intro and end of each paragraph and skim all exhibits) • Don’t bother marking up the case at this point • Focus on getting the ‘gist’ of the paragraphs without reading every word (find the 1 -2 primary sentences and understand how other sentences support them) Carefully read the beginning and end (every case has an important intro section and ending section) • Some of the most important information about the framing of the case comes in the beginning and end • Realize that every story has a situation, complication and resolution (try to find the key issues to solve)

Case Template - Framing Key Question: Flipping and Skimming: Beginning of Case: Ending of

Case Template - Framing Key Question: Flipping and Skimming: Beginning of Case: Ending of Case: Note: Answer key is at the end of this deck; please attempt to fill in the template before looking at possible answers

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising 5. Concluding What are the objectives? What are the facts? What is important? What are the options? What is the answer? • Identify the key question • Flip through the case • Skim read the case • Carefully read the beginning and end • Label the facts in the margins of the case: • General (GEN) • Industry (IND) • Competition (COM) • Strength (STR) • Weakness (WEA) • Summarise the facts • Eliminate unimportant • Eliminate redundant • Mark most important • State the 1 -3 key questions • Identify options (MECE) • State decision criteria • Summarise pros/cons • Take a position • Identify the few key supporting facts • Discuss implementation • Mention risks The key to good case analysis is to break down the case facts into a clear, understandable and useful form

Phase 2 – Labeling Key Question: What are the facts? STEPS TIPS Label the

Phase 2 – Labeling Key Question: What are the facts? STEPS TIPS Label the facts in the margins of the case (using the nomenclature below, label the facts in the case ) • Use abbreviations as indicated • Underline the key sentence in the paragraph General – GEN (general issues include the macro environment beyond the industry as well as customers and overall trends) • Review a checklist of the types of issues beforehand • Remember that this is not company or industry specific – examples are social, economic, ecological, technical, and political issues (STEEP) Industry - IND (this pertains to any issues that affect the specific industry under study – not companies or general environmental issues) • Examples include industry consolidation, profitability, general strategies, differentiation, market growth, etc. • This does not include individual competitor data Competition – COM (specific identification and data related to competitors in the stated industry) • Examples include names of competitors, market share, profitability, and specific strategies thereof • Start thinking of the key dimensions by which you can compare your company with competitors Strength – STR (any facts that appear to be positive for the company under study) • Even if you are unsure if this will ultimately be positive, include it as a strength if the case mentions it Weakness - WEA (any facts that appear to be negative for the company under study) • Be very careful to identify as many weaknesses as possible as they drive strategies • This is of the organization only – not industry level

Case Template - Labeling General Environment: Industry: Competition: Label in the case and capture

Case Template - Labeling General Environment: Industry: Competition: Label in the case and capture here Strengths: Weaknesses: Note: Answer key is at the end of this deck; please attempt to fill in the template before looking at possible answers

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising 5. Concluding What are the objectives? What are the facts? What is important? What are the options? What is the answer? • Identify the key question • Flip through the case • Skim read the case • Carefully read the beginning and end • Label the facts in the margins of the case: • General (GEN) • Industry (IND) • Competition (COM) • Strength (STR) • Weakness (WEA) • Summarise the facts • Eliminate unimportant • Eliminate redundant • Mark most important • State the 1 -3 key questions • Identify options (MECE) • State decision criteria • Summarise pros/cons • Take a position • Identify the few key supporting facts • Discuss implementation • Mention risks The key to good case analysis is to break down the case facts into a clear, understandable and useful form

Phase 3 – summarising Key Question: What is important? STEPS TIPS Summarise the facts

Phase 3 – summarising Key Question: What is important? STEPS TIPS Summarise the facts (the overall goal here is to pull out the key facts that have been marked in the case) • This process can take some time, but do not attempt to include everything that has been marked • Set up some blank templates to be filled in by using the material covered in the respective textbook (common frameworks are STEEP, Porter’s 5 Forces, 3 Cs – company, customers and competition, 4 Ps – product, price, place and promotion, & financial ratios) Eliminate unimportant facts (think of this as creating two piles - important vs. unimportant facts) • This is one of the hardest elements to effective case analysis, but perhaps the most important • As you sort through the facts, ask ‘so what’ about the fact and try to calculate if you think it may change the final answer Eliminate redundant facts (as you go, you will begin to see redundancy in the facts, so eliminate and combine related facts) • As you pull out a fact for the summaries, mark out related facts throughout the case to avoid redundancy • Don’t stress about not including something – you can always come back to the case at a later point Mark most important facts (highlight the most important facts) • In the end, the conclusion will be based on a few critical data points; the key is to start looking for these facts as you go • Use a highlighter or coding system to mark key facts

Case Template - Summarising General Environment: • Limit to 3 -4 most important Industry:

Case Template - Summarising General Environment: • Limit to 3 -4 most important Industry: • Limit to 3 -4 most important External What is really important? Competition: • Limit to 3 -4 most important Strengths (of company under study): • Limit to 3 -4 most important Internal Weaknesses (of company under study): • Limit to 3 -4 most important Note: Answer key is at the end of this deck; please attempt to fill in the template before looking at possible answers

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising 5. Concluding What are the objectives? What are the facts? What is important? What are the options? What is the answer? • Identify the key question • Flip through the case • Skim read the case • Carefully read the beginning and end • Label the facts in the margins of the case: • General (GEN) • Industry (IND) • Competition (COM) • Strength (STR) • Weakness (WEA) • Summarise the facts • Eliminate unimportant • Eliminate redundant • Mark most important • State the 1 -3 key questions • Identify options (MECE) • State decision criteria • Summarise pros/cons • Take a position • Identify the few key supporting facts • Discuss implementation • Mention risks The key to good case analysis is to break down the case facts into a clear, understandable and useful form

Phase 4 – synthesising Key Question: What are the options? STEPS TIPS State the

Phase 4 – synthesising Key Question: What are the options? STEPS TIPS State the 1 -3 key questions (decide what the few key questions to the case are, note that it may be that there is only one key question) • Go back to the key questions identified in the first step • Do not include more than 3 key questions (otherwise they likely are not ‘key’) Identify options - MECE (for each question, list out the options or alternatives, using the MECE format as described in tips) • MECE stands for ‘Mutually Exclusive, Collectively Exhaustive’ • Examples of MECE are timing-day/night; profit-revenue/expenses; expand oversees – yes/no; etc. State decision criteria (an important step is to identify the few dimensions that will be used to decide between options/alternatives) • This is a step that many people skip and as a result, it is difficult to reach a decision • Explicitly state the decision criteria before deciding (examples include profit, market share, growth, impact on shareholders, implementation effort, timing, fit with overall vision, etc. ) Summarise pros/cons (list out the support for and against each option/alternative) • Review the summarised facts to find support for and against alternatives • Prioritize the pros and cons based upon decision criteria

Case Template – synthesising Question Option / Hypothesi s Decision Criteria Pros Note: Answer

Case Template – synthesising Question Option / Hypothesi s Decision Criteria Pros Note: Answer key is at the end of this deck; please attempt to fill in the template before looking at possible answers Cons

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising 5. Concluding What are the objectives? What are the facts? What is important? What are the options? What is the answer? • Identify the key question • Flip through the case • Skim read the case • Carefully read the beginning and end • Label the facts in the margins of the case: • General (GEN) • Industry (IND) • Competition (COM) • Strength (STR) • Weakness (WEA) • Summarise the facts • Eliminate unimportant • Eliminate redundant • Mark most important • State the 1 -3 key questions • Identify options (MECE) • State decision criteria • Summarise pros/cons • Take a position • Identify the few key supporting facts • Discuss implementation • Mention risks The key to good case analysis is to break down the case facts into a clear, understandable and useful form

Phase 5 – Concluding Key Question: What is the answer? STEPS TIPS Take a

Phase 5 – Concluding Key Question: What is the answer? STEPS TIPS Take a position (this is the exciting end to analysis; the first step is to decide what the best supported answer is to the key question) • Don’t be afraid to take a stand even if you feel that you do not have enough data – any position is better than no position • Avoid the typical compromise solution (pursue both of the alternatives) Identify the few key supporting facts (pull out the most important support from the summaries and pros/cons analysis) • The best arguments are clear statements that are supported by 2 -3 key data-based observations • Be very familiar with the underlying assumptions, facts, and numbers when you present in class Discuss implementation (one way to differentiate a good case analysis is the consideration of what it would take to implement the recommendation) • Think in terms of the few key action steps that must be taken • A checklist for consideration includes changes in staff, style, systems, structure, shared values, and skills Mention risks (the final step is to identify risk and contingencies that may be encountered if the recommended course of action is pursued) • This is the chance to show that you have completed a thorough analysis and considered what may go wrong • Do not underestimate the power of the caveat!

Case Template - Concluding Risks Overall Recommendation Key Supporting Facts Note: Answer key is

Case Template - Concluding Risks Overall Recommendation Key Supporting Facts Note: Answer key is at the end of this deck; please attempt to fill in the template before looking at possible answers Implementation

Final Tips • The key to success in case analysis is to take a

Final Tips • The key to success in case analysis is to take a structured approach to organising and using facts • It is easy to get carried away with too much data and lose sight of the need for a clear story with a few supporting ideas • Prepare for multiple outcomes and see the pros and cons • Use hypotheses to focus analysis but do not get personally attached to one ‘possible solution’ • In strategic management, there is no one right answer, but there are better and worse ways to present ideas • Be structured, objective and thorough and you will succeed

Answer Key – Singapore International Airlines • A sample set of possible answers is

Answer Key – Singapore International Airlines • A sample set of possible answers is presented in this section to the Singapore International Airlines: Strategy with a Smile (Thunderbird, 2001) case • Remember to try the case on your own first, using the suggested approach, tips and templates from the preceding slides • You very well may come up with different and/or additional concepts than those shown here, but remember, it is not the actual answer, but the process that leads to learning

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising

Model for Effective Case Analysis Process 1. Framing 2. Labeling 3. Summarising 4. Synthesising 5. Concluding What are the objectives? What are the facts? What is important? What are the options? What is the answer? • Identify the key question • Flip through the case • Skim read the case • Carefully read the beginning and end • Label the facts in the margins of the case: • General (GEN) • Industry (IND) • Competition (COM) • Strength (STR) • Weakness (WEA) • Summarise the facts • Eliminate unimportant • Eliminate redundant • Mark most important • State the 1 -3 key questions • Identify options (MECE) • State decision criteria • Summarise pros/cons • Take a position • Identify the few key supporting facts • Discuss implementation • Mention risks The key to good case analysis is to break down the case facts into a clear, understandable and useful form

Case Example – Framing Singapore International Airlines Key Question: How can SIA best position

Case Example – Framing Singapore International Airlines Key Question: How can SIA best position itself for the future? • Should SIA invest in Virgin Atlantic? • Should SIA pursue a low-cost strategy? • Should SIA stay in the Star Alliance? Flipping and Skimming: What is most notable during the flip & skim? • 16 page case with 10 exhibits and a glossary • Lots of data provided – not all will be relevant • The organization of the case is: (i) introduction; (ii) industry; (iii) markets – NA, Europe, Asia; (iv) alliances; (v) Singapore – country and company; (vi) issues moving forward Beginning of Case: Ending of Case: What is going on and what is the problem? What other insights may impact our decision? • The timetable is the beginning of the 21 st Century (1999) • A major strategic issue is the possible investment in VA • Other strategic issues include: (i) increasing competition; (ii) labour costs are rising; (iii) customers are moving toward lower fares; (iv) alliances • An important fact is that even though the airline industry is increasingly global, there are very few true global players • The alliance decision is critically important • SIA leaders seem to be in support of the VA investment

Case Example – Labeling Singapore International Airlines Here are two examples of labeling Note:

Case Example – Labeling Singapore International Airlines Here are two examples of labeling Note: the most important issues are summarised in the next slide

Case Example – summarising Singapore International Airlines General Environment: • Globalization is increasing demand

Case Example – summarising Singapore International Airlines General Environment: • Globalization is increasing demand for international air travel (esp. to Asia) • Political changes include the increase of free trade markets (like Singapore) • Economic conditions are important as recessions cause price sensitivity External What is really important? Internal Industry: • Consolidation in the airline industry is increasing to enhance scale and scope • Alliances are the hottest strategy tool as companies seek global connections • Customers are increasingly price sensitive but business segments are loyal • There are little to no substitutes for international air travel Competition: • Key domestic competitors are Japan Airlines, Thai Airways, and Cathay • Key international competitors are United, KLM, and British Airways • SIA has the best cost structure for premium level service but losing ground Strengths: • Reputation and brand image of the “Singapore Girl” • Young fleet and excellent training facilities and programs • Extensive regional and international route network Weaknesses: • Increasing difficulty supplying high quality labour at low costs (esp. Singapore) • “Buttoned Down” image may not be attractive to younger demographic • High cost structure needed for high quality service is difficult to change

Case Example – synthesising Singapore International Airlines Question Option / Hypothesis Decision Criteria Pros

Case Example – synthesising Singapore International Airlines Question Option / Hypothesis Decision Criteria Pros Cons Invest in VA? Yes Return on Investment • Enables a lower cost product offering • Access to younger demographic • Complimentary routes • Competes with Star Alliance • Limited resources/ opportunity cost • May affect reputation Overall Strategy? Low Cost (rather than Differentiation) Long Term Profitability • Head to head with new competitors • Seems to be the trend in the U. S. • Fuel costs are rising • Lose reputation as high quality provider • Goes against infrastructure • Differentiation may be the only way to win Stay in Star Alliance? Yes Market Share Growth • Cross-selling opportunities to new customers • Access to additional routes quickly • Lose control of scheduling • May compromise the consistent quality of service

Case Template – Concluding Singapore International Airlines SIA should set a strategic Vision to

Case Template – Concluding Singapore International Airlines SIA should set a strategic Vision to be the leading global premier service airline Risks Implementation • Alliances don’t deliver • Invest in VA (but go high end) • Costs get too high • Stay in Alliance • Other airlines act first • Expand high quality labour pool • This is a critical time as technology and global reach require a high-end international access airline • SIA’s best strengths are high end service and global routes • Going low-cost will damage long-term profit potential