When Analyzing A Case…
Identify Opportunities & Threats
Government debt
Growth in the economy Rates of inflation
Unemployment rates Interest rates
Fiscal policy Monetary policy Etc.
Look at all aspects of the marketplace that are possibly beyond the control of the firm or even the industry BUT have a huge impact on the development, implementation and execution of a strategy
How does the industry fair in relation to:
the economies of the countries/regions/cities in which they operate?
Population size
Income distribution Ethnic mix
Geographic distribution Age structure
Immigration Etc.
demographics?
When Analyzing A Case… (Cont’d.)
Percentage of women in the workforce Workforce diversity
Attitudes about quality of work/life relationships Concerns about the environment
Shifts in work/career preferences
Shifts in preferences regarding product/service characteristics Etc.
social and cultural trends?
Important political events Critical global moments
Newly industrialized countries
Different cultural and institutional attributes Etc.
globalization?
Impact of the internet and social networks Product innovation
Process innovations Knowledge applications
New communication technologies Etc.
technological trends?
When Analyzing A Case… (Cont’d.)
Regulation of the industry Anti-trust legislation
Language legislation Safety issues
Etc.
the extent of government intervention?
the major legal battles/issues facing the environment?
Diversification Mergers
Acquisitions Joint ventures Etc.
business trends?
Some of these aspects of the environment may be threats to one industry and, at the same time, an opportunity to
another industry
When Analyzing A Case… (Cont’d.)
How easy is it to become a player in this industry?
How many and how good are substitutes to this industry?
How strong and how much control do suppliers have over the industry?
How strong and how much control do buyers have over the industry?
How much rivalry exists among key players?
What are the keys to being a success in this industry?
Then you want to look at the industry at a more micro level
Where is the industry in its business cycle?
How attractive is the industry?
Who are they?
How strong are they?
What strategies are they using?
Attempt to build profiles of the key competitors Try to predict what they will do next
Fully understanding the key players we will be competing against
We have attempted to determine how attractive the industry is – can we make any money???
And what do we have to do to succeed in this industry?
When Analyzing A Case… (Cont’d.)
Supplier relations Production process Cost control
Distribution network
Risk reduction techniques
All the normal financial ratios (over time & compared to industry norms) Capital requirements
Cash flows
What are the company’s chances of survival? (Z Score) What is the company worth?
So far,
we understand the playing field,
we have determined if the industry is one we want to participate in and we have figured out what we need to do to be a success.
The next step is to figure out if we have what it takes to do what needs to be done.
Do a thorough review of Operations management
When Analyzing A Case… (Cont’d.)
Has the company figured out who they want as customers?
Have they segmented the market properly?
Have they figured out who they don’t want to attract?
Does their marketing and sales operations accomplish what it should?
Any loyalty programs?
How are they building lasting relationships?
Are they cross-selling?
How are they attempting to get customers to buy more?
Look at Customer management
Do they know what the next generation of products is like?
Do they have great R&D partners?
Review design and testing methods
Analyze cost and time controls of innovation
Are they successful at bringing new products on stream?
Review their coordination efforts between innovation and operations Review Innovation
Environmental issues and solutions Health and safety
Employment diversity Being a good social citizen Playing ethically
Review Social and legal policies
When Analyzing A Case… (Cont’d.)
Hiring and training the right employees Effective IT systems
Review how effective top management is Is the culture suitable?
Does management work as a team and share ideas and help each other?
Are all parts of the company working toward the same goal?
Analyze Overhead
Does a firms resources and capabilities add VALUE by enabling it to exploit opportunities and/or neutralize threats?
Even if the capabilities are valuable they must be RARE to give a firm a competitive advantage over rivals. How many rivals possess the same capabilities?
Can these capabilities be IMITATED? Can rivals eventually catch up to us at a reasonable cost? If capabilities can be imitated, the competitive
advantage may be short-lived
Is the firm ORGANIZED to take full advantage of its capabilities and resources?
Does the company have a true Competitive advantage?
We have advanced the analysis to the point of knowing
what the firm is capable of doing
When Doing A Case… (Cont’d.)
It is rare that there is only one solution that solves all the problems fully with no downside
Therefore come up with a few possible solutions to address the major issues you have identified
Discuss the pros and cons of each solution thoroughly
Identify the Issues or Problems Uncovered by the Analysis
Look at everything in your analysis that does not seem to make sense You should separate major concerns from irritants
You must highlight those issues that you feel must be addressed immediately and those that can wait
This has to flow from the analysis Explain your rationale
Come up with some possible solutions
From your alternative solutions, recommend one
Develop the criteria you will use to review your options and select one Make a recommendation and explain your rationale
Discuss how your recommendation adds value to shareholders and customers Show how your recommendation solves the issues and problems
Explain why you think the firm has the capabilities to make your recommendation a success
Be certain that your recommendation has few down-side implications
When Doing A Case… (Cont’d.)
Propose an Implementation Plan of Action
Consider what has to change in operations management Does customer management need to be altered?
Does the firm need to come up with innovative products/processes etc.?
Don’t forget about regulatory and social implications of your recommendation
Then think through what human, IT and structural changes must be made Discuss how you will deal with resistance within the firm
Think through how competitors will react to your new strategy and how the firm should deal with competitors’ counter-moves
Develop a timeline for various major steps in your implementation plan
Make Certain that Everything Fits Together
That the issues or problems flow from the analysis
That the alternatives address the issues or problems to some extent That the recommendation flows from the alternatives
And that the firm is capable of implementing your recommendation
