Analyzing Business Issues...John Peacock started a new venture 6 months ago. He has invested $50,000...
Transcript of Analyzing Business Issues...John Peacock started a new venture 6 months ago. He has invested $50,000...
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