Analyzing Case Studies

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Analyzing Case Studies

• Learning to accept ambiguity and disappointment

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Learning From Case Analysis
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Case Study Handbook
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Types of Case Studies

• Rules Analysis
• Requires you to apply certain rules to a
  situation (e.g., Net Present Value calculation).
• Decisions
• The case calls for a decision.
• Evaluation
• The case requires you to express a judgment about
  a process, action or outcome.
• Problems
• The case focuses on a significant outcome, and
  asks you to determine why or how it occurred.

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Step One Read the Intro and Ending First

• Then read the entire case

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Sorting Through the Red Herrings

• What do I need to know?
• Who is the subject or key actor?
• What are the key issues?
• Who or what is responsible?
• What are the decision options?
• Whats at stake?
• What are the possible criteria?

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Understanding the True Drivers of Action
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Step TwoRe-Read the Case

• Have a purpose in mind as you read

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Identify key data

• Use the frameworks presented in class to help
  guide your search.
• Frameworks help identify key factors or issues
• Frameworks organize data into information

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Step Two Generate Hypotheses

• Take the perspective of the key protagonist
• What is their position and view of the situation?
• Whats my hypothesis?
• What is the key problem?
• What decisions need to be made?
• What are the terms of the evaluation?

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Step ThreeWhats the Problem or Problems?

• Identify the key issues requiring attention

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Selecting the Problem

• Problems are gaps between an actual or
  anticipated state of affairs and the desired
  state of affairs.
• Two conditions for gaps to be closed
• The gap can be closed, such that there are
  sufficient resources, knowledge and so forth to
  close the gap.
• The gap will be closed, there is sufficient
  political will to close the gap. Are there people
  who will thwart attempts to close the gap.

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Example Problem Analysis

• Problem definition
• The divisions performance is declining and
  their reputation for delivery and service is
  slipping. Employees have poor morale, dont trust
  other departments, and are involved in unending
  conflict.
• Diagnosis
• Many of these issues can be traced to the
  underlying culture of the division, the differing
  leadership styles of the division director and
  that of the CEO, poor decisions by the division
  director, and the lack of alignment among
  different groups in the division.

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Step FourFinding the Causal Linkages

• Whats causing what?

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Ask Yourself Questions

• Implications emerge from asking lots of
  questions.
• What is causing the current situation?
• What might happen if the company does ______?
• What will others do, in response to this action?
  
• Why would this work?
• What must happen to make it work?
• Provide Proof of causes
• What data do you have to support your assessment?

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Dig deep into the financials!!

• Treat the financials as you would clues in a
  mystery.
• Be prepared to cite relevant data to support your
  view
• Interpret, dont regurgitate financial
  information
• What are the trends telling you?
• What are the relations between the numbers
  telling you?
• How is the firm really performing? What explains
  this?

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We All Have a Theory

• Recognize that you have assumptions
• We develop a view of the world from our
  experience, and that view filters our
  understanding. Your view may not match the data.
• Ask yourself what are you assuming?
• Recognize that actors in the case are also making
  assumptions
• Assumptions are often used to link events or
  actions to one another
• Question the assumptions that are implicit in the
  case, are they viable? Do they rest on facts or
  conjecture?

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Step FiveGenerate Alternatives

• What is needed to close the gap or solve the core
  problem?

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Generate Viable Alternatives

• What alternatives exist for resolving each issue?
• What outcomes are likely from each alternative?
• How will the alternative affect other
  stakeholders?
• What is necessary for the alternative to work?
• Resources, knowledge, relationships,
  capabilities?
• Each answer must include the why!
• The CEO is right to acquire the firm because
• Then provide your rationale and evidence.

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Necessary and Sufficient Conditions

• Necessary conditions are critical to the success
  of a solution but dont by themselves assure
  success
• Think about what must happen for the
  (acquisition, price change, etc) to succeed?
• Superior resources may be necessary to producing
  superior value for customers, but is not a
  guarantee
• Sufficient conditions assure success.
• Ask what if anything would assure the outcome?
• Customers perceive and value our superior offering

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Step Five Take a stand and defend it

• Dont play both sides of the fence
• Pick a position and defend it.
• Everything has both advantages and disadvantages
• You must decide which side outweighs the other

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Step SixThe Action Plan

• How will the solutions be implemented?

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How Do You Propose to Proceed?

• Short and long-term steps ordered by time and
  priority.
• Consider and address the risks and how to contain
  them

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Case Analysis is not a formula.

• Case analysis is a skill that applies a
  knowledge of organizations and markets to
  situations containing a considerable amount of
  ambiguous and potentially relevant information.
• To be successful decision makers, you need to
  sift through this information to identify the key
  drivers of firm performance and then determine
  which drivers can and should be manipulated, as
  well as how to manipulate those drivers in a way
  that generates a desired outcome.

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Solutions Change

• You are not here to learn specific solutions or
  how a particular company does business.
• This is because solutions and situations are
  constantly changing.

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Asking Questions is Key!

• You are here to learn what questions to ask!

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Ryanair Case

1. What is your assessment of Ryaniars launch
   strategy? Was it a good strategy? In your answer
   consider potential market demand, pricing and
   Ryanairs likely cost structure.
2. How do you expect Aer Lingus and British Airways
   to respond? Why?
3. How costly would it be for Aer Lingus and British
   Airways to retaliate against Ryanairs launch?
   That is, how much in Irish pounds could they lose
   in a price war with Ryanair?

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Ryanair Case

• Hint Consider AL and BAs strategy, goals,
  assumptions, capabilities when answering Q2. When
  answering Q3, consider whether Ryanair can make
  money at 98 Irish pounds (i.e., consider both
  fixed and variable costs).

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Analyzing Case Studies

• Learning to accept ambiguity and disappointment

Prof. Robert M. Wiseman, Ph.D. Eli Broad Legacy
Fellow of Management