MODULE 4

CASE STUDY
ANALYSIS
1. CASTILLO, JHERRELYN

2. CENA, CHRISTINE JOY

3. DELA CRUZ, PAUL ALBERT

 OVERVIEW

Case study analysis enables you to bridge to gap between business school and the “real business world.” Another
benefits from case study analysis is the further development of necessary strategic management skills. Case study
analysis requires you to examine a critical point in the life of an organization. You are put in the position of a decision-
maker. In a real business situation, key decisions will have to be made logically, objectively and timely manner. In a case
study analysis, you will have to apply your analytical skills to identify and solve whatever
problems appear. Studying cases will help you to develop the experience to make these decisions in the real world.
LEARNING OBJECTIVES
● Be able to demonstrate an understanding and appreciation of the
case study method

● Be aware of the characteristics of successful and failing

organizations

● Use the results of the case study method to critically evaluate the
efficiency and effectiveness of corporate, business and operational
level strategies

● Structure ideas and arguments in an effective manner

● Be familiar with how to synthesis qualitative and quantitative material

● Be able to communicate more articulately and concisely in items.

4.1 CASE STUDY ANALYSIS STEPS
To analyze the current situation, students
must closely examine the big issues facing
them
in the case study. A common mistake is to try
and identity every single problem facing the
company. Then they prepare a long list to
incorporate into the report. There are many
way for students to approach the analysis of
business case studies. Each instructor has
his or her own
ideas on the number and nature of the steps
that are involve. A logical format should be
used for
analyzing any business situation.

Table 4.1 illustrates a generic ten-step

procedure to begin:

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TABLE 4.1 GENERIC 10-STEP PROCEDURE IN CASE STUDY ANALYSIS

Steps Activities Questions to consider about the organizations

______________________________________________________________________________
1. Heritage, development and Who were the founders? Who are the key individuals?
Growth review. What have been the critical incidents in the organization’s
history?
Has the development to date successful? What have been
the salient capabilities and competencies?
What is the current situation?
What are the big questions?

2. External analysis What are the treat’s and opportunities ?

3. Internal analysis What are the internal strengths and
weaknesses?
4. SWOT analysis Define the problem.
What problem need to be diagnosed?
How can weaknesses be converted into
strengths?
How can threats be converted into opportunities?
TABLE 4.1 GENERIC 10-STEP PROCEDURE IN CASE STUDY ANALYSIS

Steps Activities Questions to consider about the organizations

______________________________________________________________________________
5. Corporate strategy review  Is a corporate strategy renewal programme
required?
6. Business strategy review
How are SBU’s positioned in their market place?
What are SBU’s value propositions?
Are the  SBU’s on track to   deliver their targets?
7. Option selection
Formula the alternatives.
What are the alternatives? Analyses  the
alternatives.
What is the most appropriate option? What are
the key risk?
8. Develop a strategic plan  What is the vision and mission?
TABLE 4.1 GENERIC 10-STEP PROCEDURE IN CASE STUDY ANALYSIS

Steps Activities Questions to consider about the organizations

______________________________________________________________________________
9. Develop a strategic What barriers exist to implement the renewal
implementation plan strategy?
What structures and control systems are required
to implement the strategy? 
Is it affordable?
10. Recommendations How can the strategic problem be solved?
Recommend a  solution.
4.2 FORMAT FOR CASE STUDY ANALYSIS

Analyzing a business situation needs a formalized plan of

action. The case study analyst should try to understand all
elements in a particular business situation so that they can
recommend action to improve that situation.

The entire process must be systematic, in a

strategic management case study analysis, there should be a
systematic set of principles and procedures in examining a
particular situation and making appropriate recommendations.

The case study method becomes an effective teaching device

when students are encouraged
to analyze the date presented and to or emulate their own set
of recommendation.
CASE STUDY OVERVIEW

Suppose for a moment that you are a strategy consultant who has just been asked to analyze an
organization and advise it on its business strategy. Where would you begin? First, you would acquaint yourself
with the entire organization, including its products, processes, situation and any other relevant general factors.
You would try to get a broad picture in your mind of the whole organization. With this overview, you would then
be able to deal with specific elements of the situation.

Your first objective should be to get an overall feel the case study, an overview of what is going on.
Do this by skimming over the case study quickly, perusing its highlights. Try to answer these general types of
questions: what kind of organization is it? What are  some of the general factors of work? What kinds of
problems is the organization having?
PRE-CASE ANALYSIS

Most students jump to recommendations and conclusions for case studies almost before they have finished
reading them for the first time. This section describes a way of  forcing students to do more analysis before
preparing a formal case study report.

Although strategic management case studies can be used in a number of different ways, most instructors
use them, frequently with text material , to get student to apply principles and to develop decision-making
abilities. This is supposed to provide an involvement, which builds analytical skills and accelerates skills and
learning and understanding rather than rote memory. But experience with this method both as a student and a
teacher suggests that something is missing. In case study analysis many students  find it difficult to sift the data
for useful information. But case study analysis offers a new dimension.

Practice in making assumptions is extremely valuable since business executives regularly have to make “
educated guesses.” but this may be one of the weaknesses of the case study method for instruction purposes.
the  student may avoid careful analysis of the given data by making a strong assumption that overwhelms all
other consideration.
STRUCTURING THE ANALYSIS

A somewhat discouraging observation is that some students do not even know where to begin when given
the “raw material” that is, the judgment or assumption which instructors usually expert students to create for
themselves. This can result in the frequent class experience of dominated unstructured case study discussion
by students with strong, unsupported conclusions.

In other words, in the normal unstructured case study analysis, many students are just guessing. Less
extensively, treatment of a few other cases has led to similarly discouraging results. Weaker students give
superficial analyses, and may completely miss the underlying difficulties of which the current problem is only a
symptom.
SIZING UP THE SITUATION

A special exercise we sometimes use with students has been developed to  force students back one step in
their thinking. Students are required to submit a one page paper entitle " sizing up the situation." They are
expected to describe (using strategic management terminology) the situation in the case study, including the
underlying situation which gives rise to the present problems and which will affect their solution. They are not
permitted to solve any problems or make any recommendations at this stage.

Basically, the students are asked to put down on paper the essential facts and the logical, basic
assumptions which they feel they can make on the basis of the material presented in the case study. In the
usual case study analysis students are expected to select the key facts. Here more is required. There are
certain fundamental, logical assumptions about the nature of the situations, which can be brought out later in
the formal report. These modifying assumptions may determine the conclusion. When pressed in this way, it is
surprising how many students differ regarding fundamental considerations, for example, about the nature of the
company's product, probable targets markets, and even the nature of the market situation. When first starting
out, some students even call obvious monopolistic competition situations pure competition (and then are willing
to develop policies according).
THE STEPS IN "SIZING UP THE SITUATION" FOR A STRATEGIC MARKETING MANAGEMENT
PROBLEM CAN INCLUDE WORKING THROUGH THE FOLLOWING MENTAL STEPS:

i. Look at the product or products now being produced or contemplated and provide a tentative classification
into categories such as convenience goods, shopping goods, accessories, and so on, and specify the
apparent target market of the company. Something about the company’s product policy and overall strategy 
might be noted. The type of market situation (pure competition, monopolistic competition, and so on)and the
stage of the product in its life cycle should also be considered. Further, some thought should be given to the
degree  of brand preference achieved or sought.

ii. Develop a “reasonable” marketing mix on the basis of the preliminary judgment in step 1. this should be
merely a quickly developed “ideal” based primarily on the product classification.

iii. Look at the way the product is actually being handled by the company in the case study.

iv. Rethink the nature of the product and the target market(s) before condemning the company’ s procedure if it
differs from the student’s “ideal.” The students should try to give the company management the benefits of
the doubt, but should not accept everything as “right”.

v. Size up the situation, including the strengths and weaknesses of various elements of the marketing mix.
SITUATION ANALYSIS

After  having understood the case study and identified the key problem areas, you should break the case study
down into parts so you can evaluate critically all aspects of the organization. Look closely at all details of the
case, then try to pull this information together into a more manageable form. The situation analysis stage
involves analyzing four general areas: the organization,, the customer, the competition and the environment.
Although these four areas of study are important, one area that can create problems is that of financial analysis.

Here is an outline to help you organize your situation

analysis.
FINANCIAL SITUATION

A. BALANCE SHEET / INCOMES STATEMENT ANALYSIS

You should analyse the financial statements both vertically and horizontally. Vertical analysis involves the
calculation of meaningful figures from the financial statements of one year. For the balance sheet, each item
may be expressed as a percentage of sales. These figures can then be compared with industry figures,
competitors, or other divisions of the same company.
Horizontal analysis consist of comparing items on the financial statement, or calculations derived from the
vertical analysis, with the same items in other time periods. A comparison of key items over a five-year period
can be especially enlightening. For example, you might analyse sales trends over the past five-years, calculating
the percentage change from one year to the next. You might do the same for other key items such as goods sold
or net income. Not only can these figure be compared between years, but they may also be compared with
industry trends, these of competitors, or other divisions of the same company.
FINANCIAL SITUATION

B. RATIO ANALYSIS
To obtain an accurate measure of a firm's financial position, it is best to calculate several financial ratios. Some
of the more frequently used financial ratios are shown in table end table 4.3 shows and illustrate a summary of
profit measures. These ratios might be calculated for two or more years to uncover any significant trend in the
company's financial performance.

C. OTHER QUANTITATIVE ANALYSIS

Depending on the information provided in the case study, you may be able to carry out other quantitative
analyses. For example break-even analysis is a helpful technique for
Table 4.2 Selected financial ratios
Ratios How calculated What is measure
(1) Liquidity Ratios Current assets Measures the ability of firm to meet short-term
(a) Current ratio Current liabilities debt. The rule-of-thumb for this ratio is 2.

(b) Quick (acid test) Current assets-Inventory A more accurate measure of firm’s ability to pay
ratio Current liabilities off immediately its short-term debt.

(c) Inventory to working Inventory Measures the extent to which the firm’s
Capital Working capital is tied up in inventory.

(2) Profitability Ratios

(a) Return on net worth Profit after taxes Measures the rate of return on stockholders
(return on equity) Net worth Equity.

(b) Return on asset Profit after taxes Measures the return on total investment in the
(return on investment) Total assets Firm.
(c) Net profit margin Profit after taxes Indicate return on sales
(return on sales) Sales
(3) Leverage Ratios

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 (a) Debt to assets ratio Total liabilities Measures the extent to which borrowed funds
Current assets have been used to finance the operation of the
business.
(b) Debt to equity ratio Total liabilities Provides a comparison of the equity of the
Stockholders equity owners with the funds provided by the
creditors.
(c) Times Interest caned Profit before taxes and Measures the risk that a company might not be
Interest able to meet its interest payments.
Interest charges

(4) Activity Ratios

(a) Inventory Turnover Sales Measures the number of times the average
Inventory inventory is turned over in the year.

(b) Fixed assets Sales Measures the sales productivity and utilization
Fixed cost of plant and equipment.
(c) Total assets turnover Sales Measures the sales productivity and
Total Assets utilization of all the firm’s assets.
(d) Average collection Accounts receivable Measures the average collection period
Total sales + 365 for accounts receivable.

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FINANCIAL SITUATION

D. OVERALL FINANCIAL ASSESMENT  

After you have scrutinized all of the financial information in the case study, you should be able to make some
general statements regarding the financial position of the firm, for example,
Table 4.3 Summary of profit measures
Method Definition Computation
Payback period Number of years If rate of flow is constant
Until investment is recouped
Payback= Investment Net
Cash flow
Otherwise, the payback is determined by
adding up the expected cash inflows until the
total equals the initial investment
Accounting (or Ratio of average annual Average Annual - Average Annual
Unadjusted) return of return income after depreciation Cash flow Depreciation
to the average book value ______________________
of the investment Half initial investment
 Net present value Difference between
(NPV) cash inflows and outflows NPV= Ft
Discounted to the present at (1+I)t
A given interest rate Where Ft= net cash flow at time period t
I= discount
T= planning horizon
ROI (Rate of Return Discount rate which makes The ROI is determined by solving
Of the investment or the net present value of the equation
Internal Rate of return) inflows and outflows equal = Ft
to zero (1- i)t
____________________________________________Where i is the rate of return of the investment

You may have determined from your ratio analysis that the firm is in a precarious position relative to its Liquidity. You
should draw attention to this, since it limits what the company is able to do in the short run and, thus, what you are able
to recommend. It is imperative that you state concisely the
firm’s financial position since it directly impacts on future strategy.

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PROBLEM IDENTIFICATION

Now  that you understand the case study and have critically evaluated all of its key elements, you are ready to formalize the
problems existing in the organization. Not only is this normally the most difficult part of the case study analysis, it is also the
most crucial. Since the remainder of the case study analysis evolves around solving the problems defined at this stage, it is
important to consider the problem areas very carefully. At this stage you should consider strategic management theory and
practice. The amount of academic rigor and practice is increased at the undergraduate level. Student often forget the differing
programmed and module outcomes at the undergraduate and postgraduate levels. At the MBA level we have found that the
balance between theory and practice is skewed towards the latter. Conversely at the MSc level students tend to have
problems with both the application of theory and appropriate practice.

STATEMENT AND EVALUATION OF ALTERNATIVES

Now that you have identified the major problem, you are ready to solve it. Develop as many possible solutions as you can ,
and then screen out those ideas that are illogical until you have a set of realistic alternatives. You can then examine the
advantages and disadvantages of these remaining alternative to reach a solution. The initial process of alternative generation
is similar to idea generation in the creative process. The objective is to generate as many alternative courses of action as
possible. The next step involves mentally making a pass over each of these to eliminate any that are not feasible. This
process should leave you with some realistic alternatives to be assessed more critically.
RECOMMENDED SOLUTION AND JUSTIFICATION

After following this logically approach to identifying potential solution to the major problem and
evaluating the alternatives, you should be in a position to recommend a course of action.

IMPLEMENTATION

You may fell that after you have recommended a solution that case study analysis. Sometimes one of the
questions for the case study analysis explicitly asks for an implementation strategy. All you have
accomplished so far is to decide on a specific course of action for the future. Now you must answer such
question as:

● How will it be accomplished? 

● When will it be accomplished (short term, long term)?
● Who will do it?
● Where will it be done?
● How much is the projected revenue?
● How much is the projected contributed?
WRITING THE REPORT
Students who prepare written reports do a better job for analyzing business problems. Writing a good report
takes a certain skills. When instructors read reports day check to see whether students fully understand the
situation and whether their interpretation of the facts are reasonable. They also like to say papers that are
objective, balance, consistent and decisive. Perhaps the most common error made by students in writing case
reports is to repeat the facts that have been provided, or merely regurgitate the lecture slides used by
instructors. Instead of analyzing data in the of the alternatives , students spring complain repeat

FINAL SUGGESTION
How do you know when you have done a good case study analysis? As you develop your analyses  of the case
studies, keep the following points in mind.

i. Immerse yourself in the role of strategy consultant are a particular decision maker and the organization and
address your comment to the appropriate company executive.

ii. As with any report is sent to an executive , you should keep it as consists as possible do not rehash all the
information contained in the case. Steak with critical evaluations of the facts.
 
FINAL SUGGESTION

iv. Do not use the expression " i need more information." the information provided for you in each case is
sufficient for making a decision. Managers would always like to have more data , but cost and time limitations
prevent this. Assume you have all the possible information and make a decision based on it. 

v. It is imperative that the case study analysis be true. Each area of the situation analysis must be in this class,
problems and opportunities must be identified, alternatives must be presented and evaluate using  the situation
and the and the relevant financial analysis and a decision must be made each area above must be covered and
good depth and with insight.

vi. Avoid rehashing case study facts. A good analysis uses facts that are relevant to the situation at hand to
make summary points of analysis. A poor analysis just restate or rehashed this fact without making relevant
summary comments.
vii. Make a reasonable assumption. Every case study is incomplete in terms of some piece of information that you
would like to have. Incomplete information is an accurate reflection of the real world. All strategic management
decision are made on the basis of incomplete information. A good case study analysis must make realistic
assumption to fill in the gaps of information in the case study.
FINAL SUGGESTION

viii. Do not confuse the symptoms with problems. For example, you might one problem as decreasing sales
volume. This would not be correct. This is a symptom. The real problem is identified by answering the question:
why are sales down ? For example, sales volume may be low due to inadequate sales force training. But this
may not yet be the root problem. You still need to ask: why is sales training inadequate?
ix. Do not confuse opportunities with taking action. One can recognize a market opportunity but not take any
action related to it. A may decide not to compete in this market due to lack of resources or skills or the existence
of strong competition. Decision involved the complex trading off of many problems and opportunities.
x. Recognize alternative. A good analysis especially recognizes and diseases alternatives action plans. You
must do your situational analysis and recognize alternatives before evaluating them and reaching a decision.

xi. Make effective use of financial and other quantitative information. Financial data ( break-even points and so
on) and information derived from other qualitative analysis can add a great deal to a good case study analysis.
Totally ignoring these aspects or handling them improperly results in a poor analysis.
THANK YOU!