Strategic Marketing

MBA Program

WAC

Written Case Analysis

March 2009

Prepared By:

Aly Raza Syed

Resource Person:

Marketing Strategy

Case Analysis

Approaches to attack a case study and its components

Analyzing A Case Study. Whenever you analyze a case, remember

that you are not an outsider, but a part of the management around whom the case is being presented.

Remember to undergo a through analysis, so that you can convince the reader that your analysis is backed with sound arguments and supported by concrete solutions.

Remember there might not be just 1 right answer to the case but several options of feasible strategies available.

As there is no one single solution to the case, similarly there is no single way to prepare the case.

General Guideline Step 1: Skim the case and breeze through it. Skim it

for the 1st time Ask yourself questions like

What sort of organization does the case concern, the nature of the industry in which it is operating, External Environment, management’s problems.

Step 2: Carefully read the case the 2nd time and start making notes. Seek to identify the key problem facts, such as what

decision are to be made, who is going to make these decisions, objectives of the organization and each key player.

What are the resources & constraints in the case. Make sure to use the quantitative data as well

Reading The Case There will be a lot of information overload

in some cases, irrelevant information, too little information or ambiguous information or relevant information dispersed throughout the case.

Don’t get worried but try to make the best of it.

What to Do in a Case Study? In the case study it is required by you to logically

attack the case study. Identify the alternative course of action that the

management might take. List the Pros and Cons of each alternative. Always keep in mind the objectives of the

organization. Develop short term tactics for long term

strategies and give a comprehensive implementation plan of the desired strategy.

What is Required? In a case you students will be identifying

and clarifying problems/ opportunities being faced by the management of a company.

Analyze the qualitative information and quantitative data.

Steps To Case Analysis. All to gather the case study includes

various steps. In some cases you will not have

information regarding some of the steps. Your objective is to use whatever

information is given, to the best of your abilities.

The following are the Steps that are commonly used in a case study.

STEPS TO SOLVE A CASE1. Introduction2. Situation Analysis3. Identification of Problems

I. Main ProblemII. Sub Problem

4. Development of Alternatives5. Evaluation of Alternatives6. Selection of the Best Alternative7. Implementation plan8. Recommendations.

1 ] INTRODUCTION In the introduction you will give a short synopsis

of the case. Inform the reader what industry does the

company belongs, what the time of the case, who are the key players, what issue is at hand.

Remember not to reveal any hard facts in the introduction part as they have to be utilized in the upcoming steps.

Usually an introduction would include the following:

Introduction Time of case Industry of operations Time of establishment of company Key People Important dates if any in the case Size of company Main Line of business of the company. Geographic Area (e.g. Region, Country or City in

which operations are being held) Others Remember: NO HARD FACTS.

2 ] A SITUATION ANALYSIS

Elements of Situational Analysis Macro Environmental

Analysis DEEP-LIST Analysis

Industry Analysis Mission Goal Objectives Segment and Target

Market Marketing Mix PLC/CLC/ILC Portfolio Analysis

KSF’s USP’s Market Analysis

Market Share Sales Growth Rates

SWOT analysis Ansoff Matrix Competitive Analysis Financial Analysis Strategic Analysis

The Macro Environment DEEP-LIST analysis

Demographic Ecological Economic Political Legal Informational Social Technological

Give the factors of the above that effect the case only

An Industry Analysis

Porters 5 Forces Model.

IndustryCompetitor

sInternalRivalry

Bargaining Power of Suppliers

Bargaining Power of

Buyer

Threat of Substitutes

Threat of New Entrants

Solutions From Porter’s 5 Forces Model. By analyzing this model you will have to identify

either a industry is Attractive Unattractive Moderate.

Remember these Five forces can have the following effects. Either a force e.g

Bargaining power of suppliers can be HIGHER OR LOWER. If it is Higher, then it is NEGATIVE FOR THE COMPANY. If it is LOWER, then it is POSITEVE FOR THE COMPANY.

So a force that is is Negative A Force that is is Positive for the company. A Force can also have a Moderate (~) effect

IndustryCompetitor

sInternalRivalry

Bargaining Power of Suppliers

Bargaining Power of

Buyer

Threat of Substitutes

Threat of New Entrants(-)

(+)

(~)

Solutions From Porter’s 5 Forces Model. Analysis Continued.

You will evaluate these five forces and see how many are positive, Negative or Moderate.

Then At the end, you will after looking at the positive and negative forces, give conclusion about the ATTRACTIVENESS OF THE INDUSTRY.

Remember that an unattractive industry does not means that profitability will also be Negative.

A company can make profits even in an unattractive industry and vise versa. e.g. Nishat Mills is making a profit, although the

Textile industry of Pakistan is UNATTRACTIVE.

Mission/Goals & Objectives Find any explicit or implicit statement of

the firms mission. Goals and Objectives:

Look for the expressed or implied goals and objectives of the firm

The importance of this is that after your analysis you can have a good picture of either the company is really achieving/following its mission/goals and objectives or not.

Segmentation & Target Market Segments Dealing in:

1. Demographics

2. Geographic

3. Psychographics

4. Media Graphics Define the appropriate Target market that

the firm seeks to pursue. Customer Profiling

Marketing Mix Here you have to give details of the

Marketing Mix. Use the 7 P’s Model.

The 4 Hard P’s The 3 Soft P’s are:

People Processes Physical Evidence

PLC/CLC/ILC ILC: Industry Life Cycle CLC: Company Life Cycle PLC: Product Life Cycle

Telecom Industry (ILC)

CMCC (CLC)

Zong (PLC)

Portfolio Analysis The BCG Matrix

Though this is a portfolio analysis that is meant to analyze different businesses in the entire portfolio, but we will use this model for our product analysis.

Identify where the Product/ Products of the company fall in this matrix.

BCG Framework

?High

Low

High LowMarket share

% of Market growth

KSF This part will identify the KSF’s of the

business or in other words the KEY SUCCESS FACTORS

KSF’s are thing that are important while operating in an industry. Remember you have to list the factors for the industry and NOT the internal company factors.

These are the Key Factors for Success for any business operations in an INDUSTRY.

USP The Unique Selling Preposition helps

identify the main differentiation upon which the company is banking upon.

The USP’s have to be identified so that the Positioning strategy of the company can be analyzed.

Market Analysis Market Share:

Look at Quantitative or Qualitative information that describes the past and current market Share position

Sales Sales Growth rates or Sales figures will be plugged

here. This will help you to analyze the next point.

Growth Rates You will analyze the TRENDS in the patterns of

Growth or Decline of the above two factors.

Competitive Analysis Here you can analyze the Share Analysis of

different competitors or the Product Attribute Analysis

Competitive AnalysisMarket Share, Mind Share, and Heart Share

Market Share Mind Share Heart Share

2000 2001 2002 2000 2001 2002 2000 2001 2002

Competitor A 50% 47% 44% 60% 58% 54% 45% 42% 39%

Competitor B 30 34 37 30 31 35 44 47 53

Competitor C 20 19 19 10 11 11 11 11 8

Product Attribute AnalysisCompetitor A.

Attribute Importance

( L/M/H )

Rating

(1-5)

Impact

Price

Quality

Features

Benefits

Style

Overall Rating:

Remarks:

SWOT ANALYSIS Here look at the

strengths/weaknesses/opportunities/threats Remember

Opportunities and Threats are External Strengths and Weaknesses are Internal.

THE SWOT MATRIX

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Convert

Minimize/Avoid

Match Match

Convert

Minimize/Avoid

Quantitative Assessment of Elements within the SWOT Matrix

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Size and CapacityExperienceIndividual Benefit

M . I = R3 3 = 93 3 = 92 2 = 4

Away from core valueAdding value to customerMaintain long term focusCertification program Awareness and value

M . I = R-3 3 = - 9-3 3 = - 9-3 2 = -6

-2 2 = -4

A currently untapped marketGrowth & popularity of marketing disciplineField innovationIncreased competition

M . I = R3 3 = 9

3 2 = 62 2 = 42 2 = 4

Business collegesBusiness might notcare about the programOther certification programs

M . I = R-3 3 = - 9

-3 3 = -9-3 2 = -6

Ansoff’s Product-Market Expansion Grid

Financial Analysis. Financial Analysis includes analysis like

Market Share Sales Analysis and Trends. Ratio Analysis Break Even Analysis Analysis of Financial Statements

Market Share Previously you have computed the Market

Share of the Firm and also in the competitive analysis the Shares of competitors

Now you have to give a comparative situation by merging the both the previously done analysis.

Use a Tabular form to do this.

Sales Analysis Here you can use Tables or Graphs to

present the sales analysis of the company and its competitors or substitutes.

Be Creative over here

Ratio Analysis Financial Ratios determine the relationship

between two variables, and with the help of company ratios and industry ratios we can undergo a comparative analysis for the operating of our firms.

Common RatiosCurrent Ratio Current Assets

Current Liabilities

Acid Test Ration or Quick Ratio

Current Assets- Inventory

Current Liabilities

Inventory Turn Over Cost of Goods Sold

Average Inventory

Total Asset Utilization

ROA

Net Sales

Total Assets

Profit Margin On Sales EBIT

Sales

ROI EAT

Total Assets

ROE Net Income

Shareholders Equity

Analysis of Financial Statements

Most commonly three statements are analyzed: Balance Sheet Income statement Cash Flow Statement

Example: Income Statement.Sales 3,600

Cost of goods sold 2,700

Gross Profit 900

Less operating expense:

Selling expenses 40

General & Administrative 60 100Gross Operating revenue 800

Less Depreciation 250

Net operating income 550

Less other expenses 50

EBIT 500

Less Interest expenses 200

Earning Before Tax 300

Less federal and state income tax (40%) 120Earnings After Taxes (EAT) 180

Break Even Analysis Break even point is that level of sales in

either units or sales dollars at which a firm covers all the costs of investing in a project.

It is the level at which total sales revenue just equals the total costs necessary to achieve these sales.

Computing Break Even Three values are required to calculate the

BEP. Selling price per unit Level of Fixed Cost (TFC) Variable cost per unit produced (VC)

Break Even Point.

3500 __

3000 __

2500 __

2000 __

1500 __

1000 __

500 Fixed Cost

50 100 150 200 250 300 350

LOSS

PROFIT

BREAKEVENPOINT

TOTALCOSTS

TOTALREVENUES

UNITS SOLD

SA

LE

S I

n R

s.

Formula For Calculating BEP IN UNITS

Fixed Costs

Contribution Margins

FC

SP- VC

Break Even Point in Dollars

FC .

1 – VC

SP

Break Even Plus Profits.

FC + Profit .

SP- VC

In terms of Sales Dollars

Break Even plus Profits.

FC + P

1 – VC

SP

Over All Work Sheet

Environment Relevant Issues Case Impact

(Favorable/Un fav)

Case Importance

Imp/ Un imp

General EnvtSocial

Economic

Political

Legal

Technological

___________

___________

___________

___________

______________

______________

______________

______________

_____________

_____________

_____________

_____________

Operating EnvtInternational

Suppliers

Competition

Customers

Labor

___________

___________

___________

___________

______________

______________

______________

______________

_____________

_____________

_____________

_____________

Internal EnvtOrganizational

Marketing

Financial

Personnel

Production.

___________

___________

___________

___________

______________

______________

______________

______________

_____________

_____________

_____________

_____________

3] Problem Identification

IDENTIFICATION OF MAIN PROBLEM

Remember to distinguish the Symptoms from the problem!

Problems are identified in terms of Time Impact.

i.e. if the time to solve the problem is less, and if not solved the impact will be very high, it is the Main Problem

IDENTIFICATION OF SUB PROBLEM

Sub Problems have to be identified, so you will only list them over here.

The treatment to the sub problems will be dealt at the last stage of case analysis.

List a maximum of three (3) sub problems over here.

Analyze & Record the Problems & core elements.

Major problem or IssueDescription of Problem or Issue:

____________________________________________________________________________________________________________

Evidence that this is a major problem: Facts: _______________________________Symptoms or other effects: _______________Opinions: _____________________________Assumptions: __________________________

4] Alternatives to the Main Problem Give at least three (3) viable alternatives

over here that can solve the main problem These alternatives can also be your

strategies that you wish to implement.

5 ] EVALUATION OF EACH ALTERNATIVE

Here you have to Evaluate each individual alternative separately.

You will look at the Cost and Benefits of each alternative, or in other words the Pro’s and Con’s.

To do this you will use the following Table.

Alternative #1: ____________________

Pro’s Con’s

1. .

2. .

3. .

1. .

2. .

3. .

6 ] Selection of Best Alternative This is the solution to your problem. Here you will after having performed an

analysis on all the alternatives, select one alternative that: Has more Pro’s then Con’s Solves the problem completely Is your final Solution for the case

7 ] IMPLEMENTATION Implementation means to bring the best suited

alternative to the practical form. Here you will give details in how will you

implement the alternative. Basically you will answer the following:

What to do? When to do it? How to do it? Who will be responsible for the implementation? Costs (if you can give the implementation costs)?

8 ] RECOMMENDATION/S These usually help or rectify all the sub

problems that you have solved. Recommendations can be given in bullet

form or they can be given in paragraph form as well.

You might want to give recommendations to each of the sub problems that the company is facing.

PITFALLS TO AVOID IN SOLVING A CASE.

Common Mistakes that analysts make.

PITFALLS TO AVOID IN A CASE. Inadequately Defining the

problem Searching for the answer. Assuming the case away. Complaining of not having

enough information Recommending research or

consultants. Not thinking.

Relying too much on generalizations.

Postulating a different situation

Focusing too narrowly. Abandoning realism Setting up “Straw Man”

alternatives. Rehashing case material Getting discouraged