Analyzing Business Issues

Don Caplan

Faculty of Management

September 2012

Purpose & Outcomes

To develop common understanding of the Case Study Method.

To increase comfort, competence and confidence levels in learning with cases.

Articulate what domains, learning outcomes and assessment criteria are frequently employed in the context of the Case Study Method.

Learning Outcomes

As a result of participating in these sessions you will:

Understand the three-stage case learning cycle

Practice the short and long cycle processes of case analysis

Practice class-based discussion and understand the nature of case participation

What is a Business Case?

A description of an actual organization’s external and internal condition at some point in time.

Usually expressed from the point of view of a decision maker, it puts the reader at the scene of the action.

At RRU, you’ll see “classic” cases as well as case vignettes

Why Working with Cases?

Discuss real life situations

Consulting vs. owning: “step in to the shoes”

Analysis and Decision Making

Test understanding of concepts and theories

“I never thought of it that way”

Skill development

“Solving a Case”

No one clear-cut answer

No single precise/definite solutions

Incomplete information / Time pressure

Subjective, yet collaborative effort

Be open and welcome all opinions

Effort, logic and toolkit usage

Remember

What constitutes effective case work?

Data interpretation

Facts

…especially when they lead to analysis

Opinions

…but only when they’re backed by evidence

Analysis

…especially when it reveals something hidden

Missing Information

What information do I need to have?

Why do I think it is critical to have this information?

Where do I think this information is located? Who has it?

How much time and money will it take to produce it?

If provided, what difference will it make to my decision?

What can I assume?

“Solving a Case”

preparation

promptness

presence

participation

Individual Responsibilities

How is contribution/participation assessed?

Each instructor will have own assessment process

Each instructor will conduct case discussion differently

Learners should seek clarification from each instructor

Case Analysis: Three Stage Learning Process

Individual Preparation

Small Group Discussion

Large Group Discussion

Lear

ning

Adapted from Erskine 1999

Individual Preparation

Short Cycle (15 minutes or less)

Long Cycle 1-3 hours

Individual Preparation

Small Group Discussion

Large Group Discussion

Time

Short Cycle Process

propels you inside the case

assess the case difficulty

determine the analytical techniques required

provides focus and direction to detailed reading

1. Read opening and ending paragraphs

2. Who? What? Why? When? How?

3. Quick look at the case exhibits

4. Quick review of the case subtitles

5. Skim case body (1st & last sentence of each paragraph)

6. Read assignment questions and reflect

The Long Cycle Process

1. Read the case

2. Apply the case solving process

A. Define the issue

B. Analyze the case data

C. Generate alternatives

D. Select decision criteria

E. Analyze and evaluate alternatives

F. Select preferred alternative

G. Develop an action and implementation plan

Small Group Discussion

Why: to clarify your thoughts and be exposed to other perspectives

Who: your assigned team

When: AFTER individual preparation and before the class discussion (45 minutes)

How:

1. Review the “short cycle” process conclusions

2. Review the “long cycle” process conclusions

3. Review special difficulties

4. Anticipate the class discussion

Benefits of Teamwork

What are the benefits of Collaborative Case Solving?

• Several minds think better than one

• Discover other perspectives • Learning through Process

rather than Outcome

Case Analysis: Three Stage Learning Process

Individual Preparation

Small Group Discussion

Large Group Discussion

Lear

ning

Case Analysis: Three Stage Learning Process

Individual Preparation

Small Group Discussion

Large Group Discussion

Lear

ning

Time

Guidelines for Case Analysis Practicality

There is no such thing as a complete case… as in the business world there is never enough information or enough time.

Justification Supporting your decision is more important than the decision

Realism

Avoid recommending a course of action beyond an organization's means…present and analyze only feasible alternatives

Specificity Avoid generalizations such as “The company should pursue a

market penetration strategy”

Originality Do not necessarily recommend the course of action that the firm

plans to take or actually undertook…consider all relevant facts and creatively develop alternatives.

Contribute!

Strategic business decisions are not made by a single person…team and class discussions are essential

Working Example: John Peacock

John Peacock started a new venture

6 months ago. He has invested

$50,000 of his personal saving into

his venture: Peacock Golf. At the

present time John:

received a patent for a unique putter.

has a prototype putter developed

has no sales

has no cash left

needs to participate in the North American Golf trade show in 3 weeks

Apply the case solving process

A. Define the issue

B. Analyze the case data

C. State your assumptions

D. Generate alternatives

E. Select decision criteria

F. Analyze and evaluate

alternatives

G. Select preferred alternative

H. Develop an action and

implementation plan

A. Define the issue (example only)

Immediate Generalization 1. John’s venture needs money 1. Cash flow management

2. Choose debt or equity 2. Risk/reward profile

3. How much for what deal 3. Deal structure

Case and Context Based

Course and Content Based

A. Define the issue (continued)

Could it make or break

the company?

I II

III IV

Low

Low

High

High

Urgency

Importance

Is the timing critical

for the survival of the

company?

B. Case Data Analysis (example only)

John’s

company

is short on

growth

capital

Strategy

• Lack of a business

plan

• Approaching the

wrong people

Skill/knowledge

• John has no experience

in business

• John has no business

education

Systems

• No bookkeeping

• No cash management

system

Market Conditions

• Investors are skeptical

of new ventures

• Many entrepreneurs

seeking money

People

• John pays 40% higher

than average

• High employee

turnover

C. Alternative Generation

Well thought out alternatives address the causes of the problem (identified in the previous section…data analysis)

When formulating alternatives consider the constraints and opportunities for the companies/person.

Be creative

Opposing alternatives are often useful to consider

1. Seek bank (debt) financing

2. Seek private angel investor (equity) financing

3. Seek financing from family and friends

D. Selecting Decision Criteria

They are the standards by which alternatives may be evaluated and compared.

Useful to include both Qualitative and Quantitative Criteria (see examples)

D. Selecting Decision Criteria (examples only)

Qualitative Competitive advantage

Customer satisfaction

Employee morale

Corporate image

Ease of implementation

Synergy

Ethics

Flexibility

Safety

Obsolescence

Cultural sensitivity

Motivation

Goodwill

Quantitative Profit

Cost

Return of investment

Market share

Capacity

Delivery time

Risk

Cash Flow

Inventory turn

Productivity

Staff turnover

Quality

Growth rate

D. Selecting Decision Criteria

John’s decision criteria ought to be:

Timing: his company needs the money in 45 days

Control: John needs to maintain 51% of the equity

Expertise: he needs management expertise to compliment his technical skill set

Amount: the company needs $100,000

E. Alternative Assessment (example only)

Alternatives

Decision Criteria

Timing Control Expertise Amount

1. Bank

2. Angel

3. Family & Friends

F. Preferred Alternative

Choose one!

Remember: What counts is:

Your analysis

The use you make of the information available

Your justification for adopting the alternative

G. Developing an Action and Implementation Plan

Timing Milestones

Who

What

When

Where

How

Be Specific Estimate when

necessary

Rubric Checklist

• Case Summary

• Problem identification

• Business definition

• Context: time & placement

• Link between problem – analyses – solutions

• Proper Toolkit usage

• Research & References

• Recommendations

• Conclusions

Here’s what you are going to do between now and 9:00 a.m. tomorrow

You will work in your teams developing a presentation of your analysis of the case.

Tomorrow, a random selection of teams will be chosen to present.

The case:

IREKA CONSTRUCTION BERHAD

IREKA CONSTRUCTION BERHAD

A. Summarize the case

B. State the problem

C. Analyze the issues

D. Generate alternatives

E. Select decision criteria

F. Analyze and evaluate alternatives

G. Select preferred alternative

H. Develop an action and implementation plan

IREKA CONSTRUCTION

REMEMBER

READ THE OPENING PARAGRAPH AND CLOSING PARAGRAPHS FIRST.

Presentation Guidelines

Maximum 15 slides, and/or 20 minute presentation

You should:

Make a decision that is realistic, specific and original

Justify it with your analysis

Use frameworks we’ve talked about.

Next Session – Tomorrow 9:00 a.m.

Selected Teams Will Present IREKA

Class will ask questions and critique