01. Introduction to Business Case Studies Lets begin with the end - - PDF document

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PGDBFS 301 - CBFS 11/9/19 SESSION 01 PGDBFS 301 Cases in Business Finance and Strategy (CBFS) Conducted by Nadun Kumara Postgraduate Diploma in Business Finance & Strategy 01. Introduction to Business Case Studies Lets begin

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PGDBFS 301 - CBFS 11/9/19 Conducted by Nadun Kumara 1

PGDBFS 301 Cases in Business Finance and Strategy (CBFS)

Postgraduate Diploma in Business Finance & Strategy

SESSION 01

Conducted by – Nadun Kumara

01. Introduction to Business Case Studies

Let’s begin with the end in mind…

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“ ”

Case study analysis is an integral part

f a course in strategic management.

The purpose of a case study is to provide students with experience of the strategic management problems that actual organizations face…

01.01 - INTRODUCTION to Business Case Studies

▸ A case study is a particular account of a set of circumstances faced by an industry, specific organization or individual. ▸ It provides information about a real life business situation and gives examples of how strategic issues are managed by real organizations. ▸ A case study describes an actual situation, such as the current state of an industry and factors influencing it or, for example, specific problems facing an

rganization.

▸ When undertaking such analysis, you would be expected to utilize relevant theoretical concepts and frameworks.

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01.02 - OBJECTIVES of Business Case Studies

1. Increase your understanding of what managers should and should not do in

guiding a business to success.

2. Build your skills in sizing up company resource strengths and weaknesses

and in conducting strategic analysis in a variety

industries and competitive situations. 3. Get valuable practice in identifying strategic issues that need to be addressed, evaluating strategic alternatives, and formulating workable plans

f action.
4. Enhance your sense of business judgment, as opposed to uncritically

accepting the authoritative crutch of the professor or “back-of-the-book” answers.

5. Gaining in-depth exposure to different industries and companies, thereby

acquiring something close to actual business experience.

02. Process of Business Case Analysis (BCA)

How it is done…

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02.01 – PROCESS of BCA

Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

R S A P S A R

02.01 – PROCESS of BCA (contd.)

▸ No one can analyze a case after reading it only one time, or even worse, doing the analysis during the first reading of the case. You should read through the case once just to get an understanding of the nature of the case. During the second reading, you can begin to structure and classify the issues as they appear. A truly comprehensive case analysis will probably require at least three readings. ▸ Don’t get trapped into thinking the “answer” to the case is hidden somewhere in the case text. There is never a single answer to a case just as there is never a single marketing strategy that is appropriate for all situations. Each case is unique. Looking for tricks or shortcuts is not appropriate. ▸ Make an effort to put yourself in the shoes of the decision maker in the case. The use of role- playing as part of the analysis can be very useful. It helps you gain some feeling for the perspective

f the key parties at the time the case took place.

Read

Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

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02.01 – PROCESS of BCA (contd.)

Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

Situational Analysis Internal “SW”OT Ratio Analysis External SW“OT” PESTEL P5Fs

02.01 – PROCESS of BCA (contd.)

▸ There can be a plethora of information that is missing as you feel. ▸ The way forward is… Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

Identify the missing information State VALID and LOGICAL assumptions State restrictions in the analysis

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02.01 – PROCESS of BCA (contd.)

▸ The identification and clear presentation of the problem(s) or issue(s) facing the company is the most critical part of the analysis framework. ▸ Only a problem properly defined can be addressed. ▸ Tools used in Step 02 can help you to identify the problems / issues of the organization. Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

02.01 – PROCESS of BCA (contd.)

▸ The most important question in the identification of any problem is “WHY?” ▸ The “WHY?” question should always be asked after a potential problem has been proposed. ▸ Example – To illustrate, pinpointing the problem associated with a sales decline might progress like this: ü Why have sales declined? Sales have declined because there are too many sales territories that are not assigned to a salesperson. ü Why are so many sales territories unassigned? Sales territories are unassigned because sales force turnover has doubled in the past year. ü Why has sales force turnover doubled? Turnover began to increase over a year ago when the sales force compensation plan was altered in order to reduced variable expenses. Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

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02.01 – PROCESS of BCA (contd.)

▸ When you can no longer devise a meaningful response to the “WHY?” question, you have probably found the problem. ▸ Example – In this instance, the problem statement might read: “The current sales force compensation plan at XYZ Company is inadequate to retain an acceptable percentage of the firm’s salespeople, resulting in lost customers and decreased sales.” ▸ The problem statement should be brief—almost always one or two sentences. ▸ It should be to the point, and it should provide a clear indication as to what must be addressed to improve the performance of the organization. Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

02.01 – PROCESS of BCA (contd.)

▸ BUSINESS STRATEGY TOOLS ▸ Vision / Mission / Goals / Objectives / KPIs ▸ Porter’s Generic Strategies ▸ Ansoff’s Matrix ▸ BCG Matrix ▸ Value Chain Analysis ▸ FINANCE TOOLS ▸ Corporate Valuations ▸ Cost of Capital ▸ Financial Statement Analysis ▸ Investment Appraisals Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

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02.01 – PROCESS of BCA (contd.)

▸ Once we have the problem clearly and sufficiently defined and the strategy clearly identified, we are in a position to develop a set of strategic alternatives that have a reasonable potential to solve the problem. ▸ A key problem students face in this step is that they generate a laundry list of a dozen fairly detail-

riented items. These items have a lot more to do with the tactics of implementing a strategy than

with presenting alternative strategies from which we will make our selections. Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

02.01 – PROCESS of BCA (contd.)

▸ Example – ▸ Going back to the sales force example above, the list may include ideas such as: ü Take candidates through a more rigorous interview process ü Lengthen the training program ü Give every salesperson a company car ü Offer both individual and regional bonuses ü Increase company contribution to the retirement program for each year of employment ü Conduct an employee-evaluation training program for the firm’s sales managers ▸ While these may all be good ideas, they are not strategic alternatives. The term alternative suggests an either/or situation. From the list above, you might include several items in your recommendation section. Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations

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02.01 – PROCESS of BCA (contd.)

▸ Once you have developed a set of realistic alternatives, it is time to do a thorough evaluation of each of the options. ▸ Three major criteria should be used in this evaluation process: Read Situational Analysis Assumptions & Missing information Problem Definition Strategic Analysis Alternatives Recommen- dations 01 – How well does the alternative address the problems or issues as stated in Step 4? 02 – Does it meet the “Strategy” of the organization as analyzed in Step 5? 03 – Does it have a cost-benefit impact to the organization in the short run or long run?

BIG PICTURE

Like anything else, the learning benefits of case analysis are dependent on the amount of effort you put into the

analysis. Learning to think critically and

see the big picture are important lessons to be learned in a case course.

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03. Tips & Hints

What to do & What not to do… 03.01 – Tips & Hints – WHAT TO DO?

ALWAYS try to relate to and apply theoretical models, concepts, frameworks…etc.
When reading the case study, put yourself in the situation of the case study and

imagine how you would have felt

Highlight/underline key names, key phrases, and, statistics, pointers, issues, strategy
Make notes in an orderly manner
Apply the case study info as well

This means, using names, phrases, statistics, examples, actions, activities, issues, situations, and any sort of details from the case study, back in your answer to help justify your answer

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03.02 – Tips & Hints – WHAT “NOT” TO DO?

Not understanding and accepting the facts of the case
Not explaining exactly what the problems are and why they have occurred
Making unwarranted assumptions to try to simplify the case
Sticking to generalities, such as “they must try to improve communication”
Not integrating the various points into a preferred solution
Seeking ways out of the situation (such as “fire them all”) rather than trying to solve

the problems

Ignoring practicalities

THANKS!

Any HELP? nadun.shk@gmail.com 0773 796 063