STRATEGIC CASE ANALYSIS. The first step in analyzing a case is to skim it for the basic facts. As you read, jot down your notes regarding the following basic questions:
■ What company or companies is the case about?
■ Who are the principal actors?
■ What are the key events? When and where do they happen (in other words, what is the timeline)? Second, go back and reread the case in greater detail, this time with a focus on defining the problem. Which facts are relevant and why? Just as a doctor begins by interviewing the patient (“What hurts?”), you likewise gather information and then piece the clues together in order to figure out what is wrong. Your goal at this stage is to identify the “symptoms” in order to figure out which “tests” to run in order to make a definitive “diagnosis” of the main “disease.” Only then can you prescribe a “treatment” with confidence that it will actually help the situation. Rushing too quickly through this stage often results in “malpractice” (that is, giving a patient with an upset stomach an antacid when she really has the flu), with effects that range from unhelpful to downright dangerous. The best way to ensure that you “do no harm” is to analyze the facts carefully, fighting the temptation to jump right to proposing a solution. The third step, continuing the medical analogy, is to determine which analytical tools will help you to most accurately diagnose the problem(s). Doctors may choose to run blood tests or take an x-ray. In doing case analysiswe follow the steps of the strategic- management process. You have any and all of the following models and frameworks at your disposal:
1. Perform an external environmental analysis of the:
■ Macrolevel environment (PESTEL analysis)
■ Industry environment (e.g., Porter’s five forces)
■ Competitive environment
2. Perform an internal analysis of the firm using the resource-based view:
■ What are the firm’s resources, capabilities, and competencies?
■ Does the firm possess valuable, rare, costly to imitate resources, and is it organized to capture value from those resources (VRIO analysis)?
■ What is the firm’s value chain?
3. Analyze the firm’s current business-level and corporate-level strategies:
■ Business-level strategy (product market positioning)
■ Corporate-level strategy (diversification)
■ International strategy (geographic scope and mode of entry)
■ How are these strategies being implemented?
4. Analyze the firm’s performance:
■ Use both financial and market-based measures.
■ How does the firm compare to its competitors as well as the industry average?
■ What trends are evident over the past three to five years?
■ Consider the perspectives of multiple stakeholders (internal and external).
■ Does the firm possess a competitive advantage? If so, can it be sustained?