Introduction A summary of the case
analysis process C-2
Preparing an effective
case analysis – the full
Case 1 Hearing with the aid of
implanted technology: The
case of Cochlear™, an
Case 2 The Australian retail wars:
Coles Myer and Woolworths
battle for brand value C-26
Case 3 eBay.com: Proﬁtably
managing growth from
start-up to 2000 C-32
Case 4 Gillette and the men’s
wet-shaving market C-50
Case 5 Gunns and the greens:
Governance issues in
Case 6 Growth at Hubbard’s
Case 7 Incat Tasmania’s race for
Blue-riband strategies C-89
Case 8 The Golden Arches in
India: A case of strategic
Case 9 Monsanto: Better
living through genetic
Case 10 Nucor Corporation and the
US steel industry C-121
Case 11 Philip Condit and the
Boeing 777: From design and
development to production
and sales C-152
Case 12 Resene Paints C-168
Case 13 Sony Corporation: The vision
of tomorrow C-184
A summary of the case
University of Tasmania
Case analysis is an essential part of a strategic management course and is also perhaps the most entertaining part of such a course. The ‘full story’ that
follows this summary gives you considerable detail
about how to go about a case analysis, but for now
here is a brief account.
Before we start, a word about attitude: make it a
real exercise; you have a set of historical facts and use
a rigorous system to work out what strategies should
be followed. All the cases are about real companies,
and one of the entertaining bits of the analysis process is to compare what you have said they should do
with what they really have done. So, it is best not to
check the Net to see current strategies until you have
completed your analysis.
What follows is one analytical system, a fairly
tight one that you may want to adapt according to
how much time you have and the style of the case.
Step 1 What industry is it?
You must decide on this early. This is an important
step, because it changes the analysis – for example,
your industry analysis will yield different conclusions
depending on what industry you determine.
Step 2 General environment analysis
Analyse the six generic elements – economic, sociocultural, global, technological, political/legal and
demographic – and work out what the important
facts are. There may be many issues and facts in each
element, but you put down only the important ones.
It is also important to avoid the common error of overemphasis on the ﬁrm in question. So, assuming the
ﬁrm operates in the Australian ice-cream industry,
the demographic analysis may have this comment: ‘A
large baby boomer generation is now becoming more
health-conscious. This presents opportunities in health
foods and healthy alternatives for conventional foods.
It also presents opportunities for low-fat ice creams.’
Or, in analysing the demographics of the Cochlear™
ﬁrm, you may conclude that there is a global market of
1.8 million profoundly deaf people and that this provides a huge undeveloped market for the implantable
hearing devices industry.
Step 3 The industry environment
Analyse the ﬁve forces (that is, supplier power, buyer
power, potential entrants, substitute products and
rivalry among competitors) and explain brieﬂy what
is signiﬁcant for each. For example, what are the
issues involved in new entrants into the industry? For
Introduction • A summary of the case analysis process
the implantable hearing devices industry, these may
include the need for understanding of intricate new
technology, possession of a reputation in the global
deaf community for safe and effective product development, and links to research institutions. This makes
the industry hard to enter. Each force needs a brief discussion followed by a short conclusion.
One extra consideration before you pull the analysis together and work out if this is an attractive
industry (the main conclusion) is: Is there a key force
or forces in your industry? Porter argues that there is
a key force in any industry, one that exerts more inﬂuence than the other forces.
Now, is it an attractive industry? You need to
explain, brieﬂy, why or why not. Bear in mind that
it is often not a clear decision because the forces are
mixed – for example, there may be little concern about
new entrants, suppliers or substitutes, but buyers may
be ﬁckle and rivalry high. In such cases, the key force
analysis is very important
Remember: it is the industry you analyse, not the
Step 4 Competitive environment
Is there a strategic group that you need to take account
of? What is the rivalry like in this group? What capabilities do the relevant ﬁrms have? What strategies do
they follow? What threats do they represent?
Step 5 You now have material about
opportunities and threats
Step 7 Capabilities identiﬁcation
Here you make a list of capabilities. Capabilities tell
you what the ﬁrm can do.
Remember: each ﬁrm may have a dozen or more
capabilities, so include some that are very unlikely to
be core competencies. This is a difﬁcult step, because
you must explain the capabilities carefully to indicate
what the ﬁrm really does. For example, Cochlear has
a capability for research in cochlear-related technology. It does not have a generic research capability.
Step 8 Core competency analysis
For each capability, indicate which of the four tests
for a core competency it meets. An easy way to do this
is through use of a table. For example:
skill in cochlearrelated areas
This is an important step, because the core competencies are fundamental in the strategies you suggest
– ﬁrms use their core competencies.
Step 9 Weaknesses
It is easy to pull this together from the four steps you
have now completed.
What major weaknesses does the ﬁrm have – for
example, old technology, very limited ﬁnance and poor
cash ﬂow, no succession planning?
Step 10 Pulling it together
Step 6 The ﬁrm’s resources, tangible and
List all relevant resources. It is useful to distinguish
between tangible and intangible resources. Remember: ﬁrms have many resources.
At this point, if you have the skills and time, you
can analyse the ﬁnancial information that almost all
cases provide. This provides material for a ﬁnancial
You now have all the material for an excellent
SWOT (strengths/weaknesses, opportunities/threats)
analysis. Pull together the earlier identiﬁcation of
opportunities and threats (step 5) with the internal
analysis you have done. This resources-based, theoryoriented system gives you a powerful vocabulary
to describe what simpler systems call ‘strengths’,
and the other elements of the system allow you to
systematically identify other signiﬁcant factors in
Introduction • A summary of the case analysis process
Step 11 Current strategies
Work out the ﬁrm’s current strategies.
Step 12 Strategies
Here you take advantage of opportunities and handle
threats. You should be able to make use of core competencies to do this.
You may need strategies at the business level, corporate level and international level (but it depends on
the industry and on whether all are required). Also,
bear in mind that you may need to specify functionallevel strategies to ﬁt the generic strategies at the
business level. For example, if your ice-cream company adopts a differentiation strategy, you must specify
how it is differentiated (on what grounds – low fat?)
and there must be associated innovation and marketing strategies (or, in the corporate-level strategy, a
supporting acquisition strategy may be used to handle
the innovation issue).
Make a list of alternative possibilities and use
the external and internal analyses that you have conducted to assess them. Choose one set of alternatives.
How do these differ from current strategies?
Make sure the strategies chosen ﬁt in with your
earlier analysis. Use all the conclusions in the earlier
analysis. For example (and bear in mind that this is
simpliﬁed to make the idea clearer), if you are in a
rivalrous industry which has good growth prospects
because of useful demographic change and you have
good ﬁnancial resources, you may argue for expansion into the new segment using available resources.
If the ﬁnances were not there, this strategy would be
difﬁcult to support.
Using the Cochlear™ case
as a training case
This case analysis process is easy to use once you have
learned it, and the best way to learn is to try it out. The
Cochlear™ case in this book is designed as a training
case to help you do this. Don’t be concerned if you get
a slightly different analysis to other people: one of the
glories of case analysis is that they are never ‘right’;
some are, however, more plausible than others.
Preparing an effective case
analysis – the full story
In most strategic management courses, cases are used
extensively as a teaching tool.1 A key reason is that
cases provide active learners with opportunities to
use the strategic management process to identify and
solve organisational problems. Thus, by analysing
situations that are described in cases and presenting
the results, active learners (that is, students) become
skilled at effectively using the tools, techniques and
concepts that combine to form the strategic management process.
The cases that follow are concerned with actual
companies. Presented within the cases are problems
and situations that managers and those with whom
they work must analyse and resolve. As you will see,
a strategic management case can focus on an entire
industry, a single organisation, or a business unit of
a large, diversiﬁed ﬁrm. The strategic management
issues facing not-for-proﬁt organisations also can be
examined using the case analysis method.
Basically, the case analysis method calls for a careful diagnosis of an organisation’s current conditions
(as manifested by its external and internal environments) so that appropriate strategic actions can be
recommended in light of the ﬁrm’s strategic intent and
strategic mission. Strategic actions are taken to develop and then use a ﬁrm’s core competencies to select
and implement different strategies, including businesslevel, corporate-level, acquisition and restructuring,
international and cooperative strategies. Thus, appropriate strategic actions help the ﬁrm to survive in the
long run as it creates and uses competitive advantages
as the foundation for achieving strategic competitiveness and earning above-average returns. The case
method that we are recommending to you has a rich
heritage as a pedagogical approach to the study and
understanding of managerial effectiveness.2
As an active learner, your preparation is critical
to successful use of the case analysis method. Without careful study and analysis, active learners lack the
insights required to participate fully in the discussion
of a ﬁrm’s situation and the strategic actions that are
Instructors adopt different approaches in their
application of the case analysis method. Some require
active learners/students to use a speciﬁc analytical
procedure to examine an organisation; others provide less structure, expecting students to learn by
developing their own unique analytical method. Still
other instructors believe that a moderately structured
framework should be used to analyse a ﬁrm’s situation and make appropriate recommendations. Your
lecturer or tutor will determine the speciﬁc approach
you take. The approach we are presenting to you is a
moderately structured framework.
We divide our discussion of a moderately structured case analysis method framework into four
sections. First, we describe the importance of understanding the skills active learners can acquire through
effective use of the case analysis method. In the second section, we provide you with a process-oriented
framework. This framework can be of value in your
efforts to analyse cases and then present the results of
your work. Using this framework in a classroom setting yields valuable experiences that can, in turn, help
you to successfully complete assignments that you
will receive from your employer. The third section
Introduction • Preparing an effective case analysis
is where we describe brieﬂy what you can expect to
occur during in-class case discussions. As this description shows, the relationship and interactions between
instructors and active learners/students during case
discussions are different than they are during lectures.
In the ﬁnal section, we present a moderately structured framework that we believe can help you to prepare effective oral and written presentations. Written
and oral communication skills also are valued highly
in many organisational settings; hence, their development today can serve you well in the future.
Skills gained through use of
the case analysis method
The case analysis method is based on a philosophy
that combines knowledge acquisition with signiﬁcant
involvement from students as active learners. In the
words of Alfred North Whitehead, this philosophy
‘rejects the doctrine that students had ﬁrst learned
passively, and then, having learned should apply
knowledge’.3 In contrast to this philosophy, the case
analysis method is based on principles that were elaborated upon by John Dewey:
Only by wrestling with the conditions of this
problem at hand, seeking and ﬁnding his own way
out, does [the student] think ... If he cannot devise
his own solution (not, of course, in isolation, but
in correspondence with the teacher and other
pupils) and ﬁnd his own way out he will not learn,
not even if he can recite some correct answer with
a hundred percent accuracy. 4
The case analysis method brings reality into the
classroom. When developed and presented effectively,
with rich and interesting detail, cases keep conceptual discussions grounded in reality. Experience shows
that simple ﬁctional accounts of situations and collections of actual organisational data and articles from
public sources are not as effective for learning as fully
developed cases. A comprehensive case presents you
with a partial clinical study of a real-life situation that
faced managers as well as other stakeholders, including employees. A case presented in narrative form
provides motivation for involvement with and analysis of a speciﬁc situation. By framing alternative strategic actions and by confronting the complexity and
ambiguity of the practical world, case analysis provides extraordinary power for your involvement with
a personal learning experience. Some of the potential consequences of using the case method are summarised in Exhibit 1.
As Exhibit 1 suggests, the case analysis method can assist active learners in the development of
their analytical and judgement skills. Case analysis also helps students to learn how to ask the right
questions. By this we mean questions that focus on
the core strategic issues that are included in a case.
Active learners/students with managerial aspirations
can improve their ability to identify underlying problems rather than focusing on superﬁcial symptoms as
they develop skills at asking probing, yet appropriate,
The collection of cases your instructor chooses to
assign can expose you to a wide variety of organisations and decision situations. This approach vicariously broadens your experience base and provides
insights into many types of managerial situations,
1 Case analysis requires students to practise important managerial skills – diagnosing, making decisions, observing, listening and
persuading – while preparing for a case discussion.
2 Cases require students to relate analysis and action, to develop realistic and concrete actions despite the complexity and
partial knowledge characterising the situation being studied.
3 Students must confront the intractability of reality – complete with absence of needed information, an imbalance between
needs and available resources, and conﬂicts among competing objectives.
4 Students develop a general managerial point of view – where responsibility is sensitive to action in a diverse environmental
Source: C.C. Lundberg and C. Enz, 1993, ‘A framework for student case preparation’, Case Research Journal, 13 (summer), p. 134.
Introduction • Preparing an effective case analysis
tasks and responsibilities. Such indirect experience
can help you to make a more informed career decision about the industry and managerial situation
you believe will prove to be challenging and satisfying. Finally, experience in analysing cases deﬁnitely
enhances your problem-solving skills, and research
indicates that the case method for this subject is better
than the lecture method.5
Furthermore, when your instructor requires oral
and written presentations, your communication skills
will be honed through use of the case method. Of
course, these added skills depend on your preparation as well as your instructor’s facilitation of learning. However, the primary responsibility for learning
is yours. The quality of case discussion is generally
acknowledged to require, at a minimum, a thorough
mastery of case facts and some independent analysis
of them. The case method therefore ﬁrst requires that
you read and think carefully about each case. Additional comments about the preparation you should
complete to successfully discuss a case appear in the
Student preparation for
If you are inexperienced with the case method,
you may need to alter your study habits. A lectureoriented course may not require you to do intensive
preparation for each class period. In such a course,
you have the latitude to work through assigned readings and review lecture notes according to your own
schedule. However, an assigned case requires signiﬁcant and conscientious preparation before class. Without it, you will be unable to contribute meaningfully
to in-class discussion. Therefore, careful reading and
thinking about case facts, as well as reasoned analyses and the development of alternative solutions to
case problems, are essential. Recommended alternatives should ﬂow logically from core problems identiﬁed through study of the case. Exhibit 2 shows a
set of steps that can help you to familiarise yourself
with a case, identify problems and propose strategic
actions that increase the probability that a ﬁrm will
achieve strategic competitiveness and earn aboveaverage returns.
a In general – determine who, what, how, where and when (the critical facts of the case).
b In detail – identify the places, persons, activities and contexts of the situation.
c Recognise the degree of certainty/uncertainty of acquired information.
a List all indicators (including stated ‘problems’) that something is not as expected or as desired.
b Ensure that symptoms are not assumed to be the problem. (Symptoms should lead to
identiﬁcation of the problem.)
a Identify critical statements by major parties (e.g. people, groups, the work unit, etc.).
b List all goals of the major parties that exist or can be reasonably inferred.
Conducting the analysis
a Decide which ideas, models and theories seem useful.
b Apply these conceptual tools to the situation.
c As new information is revealed, cycle back to sub-steps (a) and (b).
Making the diagnosis
a Identify predicaments (goal inconsistencies).
b Identify problems (discrepancies ...
Purchase answer to see full