By: Adel Sakr

Source: Pearson (2010); The McGraw-Hill (2014)

How to Analyze a Case Study

Preparing a Case for Class Discussion:

 If this is your first experience with the case method, you may have to reorient your study habits.
Unlike lecture courses where you can get by without preparing intensively for each class and
where you have latitude to work assigned readings and reviews of lecture notes into your
schedule, a case assignment requires conscientious preparation before class. You will not get
much out of hearing the class discuss a case you haven't read, and you certainly won't be able to
contribute anything yourself to the discussion. What you have got to do to get ready for class
discussion of a case is to study the case, reflect carefully on the situation presented, and develop
some reasoned thoughts. Your goal in preparing the case should be to end up with what you
think is a sound, well-supported analysis of the situation and a sound, defensible set of
recommendations about which managerial actions need to be taken.

To prepare a case for class discussion, we suggest the following approach:

 Read the case through rather quickly for familiarity. The initial reading should give
you the general flavor of the situation and indicate which issue or issues are involved. If
your instructor has provided you with study questions for the case, now is the time to
read them carefully.
 Read the case a second time. On this reading, try to gain full command of the facts.
Begin to develop some tentative answers to the study questions your instructor has
provided. If your instructor has elected not to give you assignment questions, then start
forming your own picture of the overall situation being described.
 Study all the exhibits carefully. Often, there is an important story in the numbers
contained in the exhibits. Expect the information in the case exhibits to be crucial enough
to materially affect your diagnosis of the situation.
 Decide what the strategic issues are. Until you have identified the strategic issues and
problems in the case, you don't know what to analyze, which tools and analytical
techniques are called for, or otherwise how to proceed. At times the strategic issues are
clear either being stated in the case or else obvious from reading the case. At other times
you will have to dig them out from all the information given.
 Start your analysis of the issues with some number crunching. A big majority of
strategy cases call for some kind of number crunching calculating assorted financial
ratios to check out the company's financial condition and recent performance, calculating
growth rates of sales or profits or unit volume, checking out profit margins and the
makeup of the cost structure, and understanding whatever revenue-cost-profit
relationships are present. See (Table 1) for a summary of key financial ratios, how they
are calculated, and what they show.
 Use whichever tools and techniques of strategic analysis are called for. Strategic
analysis is not just a collection of opinions; rather, it entails application of a growing
number of powerful tools and techniques that cut beneath the surface and produce
important insight and understanding of strategic situations. Every case assigned is
strategy related and contains an opportunity to usefully apply the weapons of strategic
analysis. Your instructor is looking for you to demonstrate that you know how and when
to use the strategic management concepts presented in the text chapters.
 Check out conflicting opinions and make some judgments about the validity of all
the data and information provided. Many times cases report views and contradictory
opinions (after all, people don't always agree on things, and different people see the same
things in different ways). Forcing you to evaluate the data and information presented in
the case helps you develop your powers of inference and judgment. Asking you to
resolve conflicting information "comes with the territory" because a great many
managerial situations entail opposing points of view, conflicting trends, and sketchy
information.
 Support your diagnosis and opinions with reasons and evidence. The most important
things to prepare for are your answers to the question "Why?" For instance, if after
studying the case you are of the opinion that the company's managers are doing a poor
job, then it is your answer to "Why?" that establishes just how good your analysis of the
situation is. If your instructor has provided you with specific study questions for the case,
by all means prepare answers that include all the reasons and number-crunching evidence
you can muster to support your diagnosis. If you are using study questions provided by
the instructor, generate at least two pages of notes!
 Develop an appropriate action plan and set of recommendations. Diagnosis divorced
from corrective action is sterile. The test of a manager is always to convert sound analysis
into sound actions that will produce the desired results. Hence, the final and most telling
step in preparing a case is to develop an action agenda for management that lays out a set
of specific recommendations on what to do. Bear in mind that proposing realistic,
workable solutions is far preferable to casually tossing out off-the-top-of-your-head
suggestions. Be prepared to argue why your recommendations are more attractive than
other courses of action that are open.
 As long as you are conscientious in preparing your analysis and recommendations, and
have ample reasons, evidence, and arguments to support your views, you shouldn't fret
unduly about whether what you've prepared is the right answer to the case. In case
analysis there is rarely just one right approach or set of recommendations. Managing
companies and devising and implementing strategies are not such exact sciences that
there exists a single provably correct analysis and action plan for each strategic situation.
Of course, some analyses and action plans are better than others; but, in truth, there's
nearly always more than one good way to analyze a situation and more than one good
plan of action. So, if you have carefully prepared the case using your instructor's
assignment questions, don't lose confidence in the correctness of your work and
judgment.
If the case will be analyzed without questions

This is to analyze the case studies given to students. You may, however, be assigned other case
studies that do not have questions. This Hands-on Guide presents a structured framework to help
you analyze such cases as well as the case studies in this text. Knowing how to analyze a case
will help you attack virtually any business problem.

A case study helps students learn by immersing them in a real-world business scenario where
they can act as problem-solvers and decision-makers. The case presents facts about a particular
organization. Students are asked to analyze the case by focusing on the most important facts and
using this information to determine the opportunities and problems facing that organization.
Students are then asked to identify alternative courses of action to deal with the problems they
identify.

A case study analysis must not merely summarize the case. It should identify key issues and
problems, outline and assess alternative courses of action, and draw appropriate conclusions. The
case study analysis can be broken down into the following steps:

1. Identify the most important facts surrounding the case.

2. Identify the key issue or issues.
3. Specify alternative courses of action.
4. Evaluate each course of action.
5. Recommend the best course of action.

Let's look at what each step involves.

1. Identify the most important facts surrounding the case.

Read the case several times to become familiar with the information it contains. Pay
attention to the information in any accompanying exhibits, tables, or figures. Many case
scenarios, as in real life, present a great deal of detailed information. Some of these facts
are more relevant than others for problem identification. One can assume the facts and
figures in the case are true, but statements, judgments, or decisions made by individuals
should be questioned. Underline and then list the most important facts and figures that
would help you define the central problem or issue. If key facts and numbers are not
available, you can make assumptions, but these assumptions should be reasonable given
the situation. The "correctness" of your conclusions may depend on the assumptions you
make.
2. Identify the key issue or issues.
Use the facts provided by the case to identify the key issue or issues facing the company
you are studying. Many cases present multiple issues or problems. Identify the most
important and separate them from more trivial issues. State the major problem or
challenge facing the company. You should be able to describe the problem or challenge
in one or two sentences. You should be able to explain how this problem affects the
strategy or performance of the organization.
 You will need to explain why the problem occurred. Does the problem or challenge
facing the company comes from a changing environment, new opportunities, a declining
market share, or inefficient internal or external business processes? In the case of
information systems-related problems, you need to pay special attention to the role of
technology as well as the behavior of the organization and its management.

Information system problems in the business world typically present a combination of

management, technology, and organizational issues. When identifying the key issue or
problem, ask what kind of problem it is: Is it a management problem, a technology
problem, an organizational problem, or a combination of these? What management,
organizational, and technology factors contributed to the problem?

o To determine if a problem stems from management factors, consider whether

managers are exerting appropriate leadership over the organization and
monitoring organizational performance. Consider also the nature of management
decision-making: Do managers have sufficient information for performing this
role, or do they fail to take advantage of the information that is available?
o To determine if a problem stems from technology factors, examine any issues
arising from the organization's information technology infrastructure: its
hardware, software, networks and telecommunications infrastructure, and the
management of data in databases or traditional files. Consider also whether the
appropriate management and organizational assets are in place to use this
technology effectively.
o To determine the role of organizational factors, examine any issues arising from
the organization's structure, culture, business processes, work groups, divisions
among interest groups, relationships with other organizations, as well as the
impact of changes in the organization's external environment-changes in
government regulations, economic conditions, or the actions of competitors,
customers, and suppliers.

You will have to decide which of these factors—or combination of factors—is most
important in explaining why the problem occurred.

3. Specify alternative courses of action.

List the courses of action the company can take to solve its problem or meet the challenge
it faces. For information system-related problems, do these alternatives require a new
information system or the modification of an existing system? Are new technologies,
business processes, organizational structures, or management behavior required? What
changes to organizational processes would be required by each alternative? What
management policy would be required to implement each alternative?

Remember, there is a difference between what an organization "should do" and what that
organization actually "can do". Some solutions are too expensive or operationally
difficult to implement, and you should avoid solutions that are beyond the organization's
resources. Identify the constraints that will limit the solutions available. Is each
alternative executable given these constraints?
4. Evaluate each course of action.
Evaluate each alternative using the facts and issues you identified earlier, given the
conditions and information available. Identify the costs and benefits of each alternative.
Ask yourself "what would be the likely outcome of this course of action? State the risks
as well as the rewards associated with each course of action. Is your recommendation
feasible from a technical, operational, and financial standpoint? Be sure to state any
assumptions on which you have based your decision.
5. Recommend the best course of action.
State your choice for the best course of action and provide a detailed explanation of why
you made this selection. You may also want to provide an explanation of why other
alternatives were not selected. Your final recommendation should flow logically from the
rest of your case analysis and should clearly specify what assumptions were used to shape
your conclusion. There is often no single "right" answer, and each option is likely to have
risks as well as rewards.