Geoff’s Guide to Case
Analysis
Geoffrey G. Bell, PhD, CA
University of Minnesota Duluth
September, 2004
Goals of Lecture
• Help students understand what case
analyses are and why we use them as
a pedagogical tool.
• Help students understand how to
prepare for in-class case analyses.
What is case analysis?
• A “case” is basically the story of a business and a
decision-maker in the business.
– Like any good story, the case will highlight certain
elements, and downplay others, depending on the goals
of the author.
• Normally, the case will present a conundrum or
dilemma the decision-maker is facing, and a lot of
data (facts and opinions) surrounding the dilemma.
• Students are expected to examine the data and
make recommendations that they believe the
decision-maker should follow.
Case pedagogy
• One of the best student learning tools is
experimenting with reality.
• Unfortunately, we don’t have the resources or
ability to have students enter into “real”
businesses and make a bunch of decisions.
• The case method allows students to confront
many different decision situations and try their
hand developing different solutions.
• Thus, the primary goal of the case is to simulate
“real” business situations.
Two errors in case analysis
regarding the CEO
The CEO is a God
• Often, we will presume
that the CEO is an allknowing being who always
makes the right choice.
• Therefore, we seek to
understand what the CEO
did in this decision
situation, and assume that
that is the “right answer.”
The CEO is a fool
• Alternatively, we may
presume that the CEO
knows and understands
virtually nothing.
• Therefore, we discount
what the CEO thinks and
does, and try to develop a
solution divorced from the
CEO’s reality.
“Truth” – the CEO is human!
•The CEO often struggles to figure out a good
course of action within limits of knowledge and
understanding.
•The CEO is “boundedly rational.”
Goals of a strategy case
• Holistic thinking
– Try to see the “big picture” as well as the details.
– Try to see how the parts fit together into an
integrated, coherent package.
• Integrative thinking
– Try to think like a general manager; not a functional
manager.
– How do the issues in the case involve multiple lenses
from your past courses? (Why are there all those
prerequisites, anyway?)
What’s the “right”
answer?
• Students sometimes assume there is a “right”
answer, and their job is to find it.
– Often, this leads them to try to figure out what the
CEO did, presuming the CEO is a God.
• Cases do not have “right” answers, although
sometimes there may be “wrong” ones.
– Wrong answers are ones not supported by the evidence.
• Cases have “good” answers; often many of them.
– A good answer is logical and well-reasoned.
Approaching the case
analysis
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Read through the case.*
What is the critical decision / choice? *
Diagnose the situation for seriousness. *
Read for understanding. *
Use models to develop your analyses. *
What alternatives are open to the decision-maker?
How do you know which alternative is “best”?
What should the decision-maker do now?
Steps required for your take-home analysis.
Read through the case
• First step is to skim through the case.
• Not reading for detailed understanding –
just for an overview of “what’s going on?”
• General impressions:
– What industry is this?
– Who is the decision-maker (CEO, division
manager, what)?
– What seems to be the decision facing the
decision-maker? Often, this will be stated in
the first &/or last paragraphs of the case.
Differentiating facts &
opinions
• The case presents both fact- and opinion-based data.
When making your diagnosis, it’s important to distinguish
between the two.
– Numeric data tends to be factual, often drawn from thirdparty sources. Generally, these can be accepted at face value.
• However, there may be errors in the data!
– Opinion data can be identified by comments like:
• “Mr. Smith felt that…” or
• “industry analysts believe that…”
– Opinion data cannot be taken at face value. Rather, it must be
interpreted in light of the factual data in the case.
– One key question – are there apparent differences between
fact-based data and opinion data, and what bearing does that
have on the case?
What are the critical
issues / decisions?
• After reading through the case, try to determine
what is (are) the critical issue(s) and decision(s)
facing the decision-maker.
• Think like a physician – the case presents a set of
symptoms (declining profits, unhappy customers,
etc.) that belie an underlying root condition.
What is the critical issue that reflects the root
condition?
• A good solution will solve underlying causes, not
just symptoms.
Diagnose the situation
for seriousness
• Once you’ve got a handle on what the critical issue is, you
need to determine how serious the situation is.
• Ask yourself – “If this company does nothing, what will
happen?”
– If the answer is, “not too much,” then the situation isn’t too
serious. If the answer is, “the company will die,” then it’s
situation critical! Normally, the truth lies in between.
• This will require some basic financial analysis.
– Is the company making money, or losing money? If losing, how
long can it survive on existing cash?
– What’s the break-even point? How much of a cushion does the
company have?
– Does the company seem to be doing well compared to its rivals?
Read for understanding
• You’re now in a position to read the case in detail.
This includes:
– A detailed reading of the text.
– Looking at all the exhibits.
– Looking at the numbers in greater detail.
• Your goal at this point is to see how things fit
together, and to ensure that your initial analysis
seems to hold.
• You may want to look for (apparent)
contradictions in the case. Why might they
exist?
Use models for analysis:
Financial & strategic analysis
• Conduct a detailed financial analysis to
assess firm performance.
– Includes, but is not limited to, ratio analysis.
• Conduct a detailed strategic analysis to
assess firm performance.
– Does the firm have established objectives?
What are they?
– Is the firm attaining its objectives?
– How far short is it?
Use models for analysis:
Internal and external analysis
• After developing a thorough
understanding, try to apply the models
developed in class to the case.
• Includes both internal analysis models and
external analysis models.
• Try to integrate the results of your
internal and external analysis together
into a combined package.
Use models for analysis:
Internal analysis
• Does the firm have a clear strategic vision? Does it make
sense?
• Analyze each of the five dimensions of strategy for the
firm.
• What is the firm’s generic strategy?
• Where is the firm on the value chain? What does its cost
structure look like compared to its rivals?
• What are the firm’s key resources and competencies?
Using the VRIS scale, do they provide a sustainable
competitive advantage compared to rivals? How much?
• Does the firm have any strategic weaknesses?
Use models for analysis:
External analysis
• What are the dominant industry characteristics in
this industry? Which ones are most important to
the firm? Why?
• What are the industry KSFs?
• What are the industry driving forces of change?
• What does a Porter 5-force model look like?
• Are there different industry strategic groups?
– You can often tell because different firms are
differently affected by different driving forces / KSFs
/ elements of Porter’s model.
Use models for analysis:
Integration
• Try to tie together the internal and
external analysis.
• Does the firm’s vision & strategy
make sense in light of:
– Its resources / competencies /
weaknesses?
– Industry conditions / anticipated
changes in conditions?
An integrative model
Strategy
Fit?
External
Analysis
Fit?
Fit?
Internal
Analysis
For your take-home case
analysis, you can quit
here!
For class cases, keep
going!
Alternatives
• What alternatives seem to be open to
the decision-maker?
• At face level (without detailed
analysis) do they seem to solve the
critical issue(s)?
• Do they seem to be reasonable, or
are they inherently problematic?
Which alternative is “best”?
Criteria for selection
• How do you choose among alternatives you’ve
identified?
• Develop a set of criteria which relate to both the
critical issue(s) and symptoms you identified at
the start.
• Assess how important each criterion is.
– Are there any “must have” criteria? (Without this, the
plan is a “no go!”)
• Assess how well each alternative deals with the
criteria. Which one seems to be the best?
What to do now?
• Once you’ve chosen your preferred
alternative, you need to develop your plan
of action to implement it.
• This should be a detailed plan of action –
often over 3-5 years.
• Think about it in terms especially of the
“staging” element of strategy. What
timing rules apply?
Think functionally
• Try to think through what changes
need to be made in each major
functional area (marketing,
production, finance, etc.).
• Try to develop a grid of functional
area X time (a multi-bar time line).
Think organizationally
• What changes in organization
structure are required?
• Is the current organization structure
sufficient, or are major changes
needed?
Think about resources /
competencies
• Does the firm possess the resources /
competencies required to execute the
alternative you’ve chosen?
• If so, does it need to redeploy them?
How?
• If not, what is the sequence to develop
the resources? How do they relate to &
build on existing resources?
Final “gut check”
• If the firm does everything you recommend, will
it solve the critical issues?
– If not, then you need to think through why? Where
does your plan fall short?
– If so, how sensitive is your plan to unexpected changes?
Do minor shifts in the state of the world cause
catastrophic consequences? What problems is it most
and least sensitive to? What would you tell the CEO to
look out for particularly?
• Go relax – “You done good!”