Chapter 13
Analyzing Strategic Management Cases…………….…….….…….. 416 (13-2)
Why Analyze Strategic Management Cases?……….…….…….….…….……. 417 (13-2)
How to Conduct a Case Analysis……………………………..….…….…….……... 419 (13-5)
Become Familiar with the Material………………………………………………………………….….. 421 (13-6)
Identify Problems……………………………………………………………………………………….….….. 422 (13-6)
Conduct Strategic Analyses…………………………………………………………….…….…….……... 422 (13-7)
Propose Alternative Solutions……………………………………………………………………………… 424 (13-9)
Make Recommendations…………………………………………………………………..…….….…….… 424 (13-9)
How to Get the Most from Case Analysis………………….…….…….…….….. 426 (13-10)
Useful Decision-Making Techniques in Case Analysis…………..….…….… 428 (13-12)
Integrative Thinking………………………………………………………………………………………..…. 428 (13-12)
Asking Heretical Questions……………………………………………………………………………….… 430 (13-12)
Conflict-Inducing Techniques……………………………………………………………..…….…….….. 431 (13-12)
Following the Analysis-Decision-Action Cycle in Case Analysis………... 436 (13-15)
Summary……………………………………………………………………………….…….… 440 (13-17)
Chapter 13
Analyzing Strategic Management Cases
Summary/Objectives
Case analysis uses real-life situations to present the processes of analysis, formulation,
and implementation that have been addressed in this textbook. By studying and analyzing the
strategic predicaments posed by a case, students can see that the circumstances businesses
confront are often difficult and complex. Case analysis also challenges students to make
decisions that address the dilemmas in the case and evaluate how their recommendations will
affect the situation in the case. The chapter is divided into five major sections.
1. The first section addresses the question Why analyze strategic management cases?
It describes how case analysis can develop proficiencies in critically evaluating
business situations and improves the ability to differentiate, speculate, and
integrate.
2. The second section addresses how to conduct a case analysis. It describes five
steps—become familiar with the material, identify problems, conduct strategic
analyses, propose alternative solutions, and make recommendations.
3. The third section discusses how to get the most from case analysis. It provides ten
guidelines for using case analysis to enhance learning.
4. The fourth section addresses integrative thinking, conflict-inducing discussion
techniques that are often used to stimulate conversation. It describes how these
approaches can lead to better decisions.
5. The fifth section illustrates the parallels between the analysis—decision—action
sequence used to organize this text and the case analysis process. Questions from
each chapter that may be salient to a case analysis are introduced.
Lecture/Discussion Outline
I. Why Analyze Strategic Management Cases?
Strategic managers and business leaders evaluate options, make choices, and find
solutions to the challenges they face every day. To do so, they must learn to ask the right
questions. These include
1. Why do some firms succeed and others fail?
2. Why are some companies higher performers than others?
3. What information is needed in the strategic planning process?
4. How do competing values and beliefs affect decision making?
5. What skills and capabilities are needed to implement a strategy effectively?
How does a student of strategic management answer those questions? By strategic case
analysis. Case analysis simulates the real world experience that strategic managers and company
leaders face.
A case is a detailed description of a challenging situation faced by an organization. It
usually includes a chronology of events and extensive support materials such as financial
statements, product lists, and transcripts of interviews. Cases usually report the facts of a
situation as authentically as possible.
One of the main reasons to analyze strategic management cases is to develop an ability to
critically evaluate business situations. Three capabilities that can be learned by conducting case
analysis are the ability to differentiate, speculate, and integrate:
1. Differentiate Effective strategic management requires that many different elements of a
situation be evaluated at once. When analyzing cases, it is important to
isolate critical facts, evaluate whether assumptions are useful or faulty, and
to distinguish between good and bad information.
2. Speculate Being able to imagine different scenarios or contemplate the
outcome of a decision can aid the analysis. Case materials often seem to
be missing data or the information provided is contradictory. An ability to
speculate about details that are unknown or the consequences of an action
can be helpful.
3. Integrate Strategy involves looking at the big picture and having an
organization-wide perspective. Integration involves comprehending how
all the factors of a case will interact. Changes made in one part of an
organization affect other parts. Thus, a holistic perspective that integrates
the impact of various decisions and environmental influences on all parts
of the organization is needed.
Discussion Question 1: How can you both differentiate and integrate at the same time?
These seem like “opposite” tasks. Can it really benefit an organization to simultaneously
engage in these opposites?
Discussion Question 2: What are some examples of executives who have used these
abilities—differentiating, speculating, and integrating—to strengthen or transform their
companies?
In summary, case analysis asks students to “walk a mile in the shoes” of the strategic
STRATEGY SPOTLIGHT 13.1 describes how Sapient Health Networks, a business faced
The SUPPLEMENT below emphasizes that companies use strategic analysis techniques
Extra Example: Analysis, Decision, and Action at Butterfield Fabrics
Butterfield Fabrics (a disguised name) is the largest producer in Europe of coated and laminated fabrics. But in
1995, amid a growing market, the company’s sales were stagnant. More nimble competitors were out-flanking
Butterfield’s high-margin specialty products, and lower cost rivals were seizing market share in the standard price-
competitive end of its product line. Butterfield had never formalized a strategy, but it clearly had one: to reap the
economies of scale, scope, and reputation that come from being the largest competitor in its industry. By the mid-
1990s, however, the strategy was no longer working.
After several failed attempts to reinvigorate the company, Butterfield finally engaged in an intense process of
analysis that led to a detailed strategy that included explicit guidance about what the company would and would not
do, and generated the support of key players responsible for implementing the many interrelated parts of the
strategy. The process Butterfield went through included three major stages:
Stage 1: Identify the driving forces in the company’s competitive environment.
Stage 2: Formulate strategy that addresses the driving forces.
Stage 3: Create a plan to implement the strategy.
In the process of going through these stages, Butterfield used several analytical techniques that helped it assess and
keep track of the many issues involved with the change. One of these was to map the driving forces. Mapping is a
visual tool that makes managers’ assumptions explicit. Once the mapping process is complete, the implications for
strategic action are often quite obvious.
A second technique was to create a strategy matrix. The matrix shows how the company might address each driving
force. Across the top of the matrix are listed all of the driving forces. Down the side are the functional areas or
projects that are involved in implementing action. The matrix is used to identify responsibilities and allocate
resources across all the functional areas. Here is one example (not in matrix format):
Driving Force 1:
“Butterfield’s costs are high relative to competitors because new technologies enable cost-effective manufacturing at
low volumes and because of the complexity of managing our broad product line.”
Response:
Manufacturing: Divide plant into three “factories within a factory” each focusing on a few
product families. Buy new equipment to reduce set-up and waste costs in low-volume
runs.
Marketing and Sales: Broaden product line further as soon as process capability and plant configuration are
ready.
Business Development: Where local volumes are sufficient, open small regional plants that are close to the
customer.
Finance and accounting: Implement an activity-based costing system.
Quality and process Develop expertise in fast set-up and changeover on existing and new equipment to
engineering: handle greater variety without suffering cost penalties.
The point of the lengthy strategic process undertaken by Butterfield was to create a plan of action that would lead to
renewed strengths and new core competencies. Whether the recommended actions will lead to the desired outcomes
will depend on the commitment and cooperation of the entire organization.
Source: Christensen, C. M. 1997. Making strategy: Learning by doing. Harvard Business Review, 75(5): 129–143.
Discussion Question 3: What are the benefits of engaging in a strategic process such as
Butterfield undertook? Are there any disadvantages? Explain?
Discussion Question 4: How could the steps that Butterfield used be applied in the case
analysis process?
Teaching Tip: Many instructors present the case analysis chapter to students early in the
course as a way to introduce the case method approach to learning strategy. This is often
useful for providing students with not only a method for analyzing cases but also a means
to understand the context and purpose of in-depth evaluations of business situations. The
II. How to Conduct a Case Analysis
The process of analyzing strategic management cases involves several steps. In this
Before beginning, point out that there are two prerequisites for effective case analysis.
Second, to get the most out of case analysis, students need to place themselves “inside”
1. Strategic Decision Maker The position of the senior executive responsible for
resolving the situation that the case describes. It may be the
2. Board of Directors The Board of Directors has a responsibility to step
in when a management crisis threatens the company. A
3. Outside Consultant Consultants often have an advantage because they
can look at a situation objectively. But they may also be at
Discussion Question 5: Why would participants in a case analysis interpret the facts or
see the situation differently? For example, how might an outside consultant see the
problem in a case differently than a CEO or owner? What would make a board member
have a different perspective than a top executive? (One reason might be the existence of
an agency problem—Chapter 4)
STRATEGY SPOTLIGHT 13.2 draws a parallel between the task of preparing a business
plan and the steps involved in conducting a case analysis.
A. Become Familiar with the Material
Written cases often include a lot of material. The following technique can enhance
comprehension:
2. Use the initial read-through to assess possible links to strategic concepts.
4. Evaluate how strategic concepts might inform key decisions or suggest alternative
5. After formulating an initial recommendation, thumb through the case again to
B. Identify Problems
One of the main reasons to conduct case analysis is to find solutions. Unless you know
When trying to determine the problem, it is easy to get hung up on symptoms. Emphasize
Another tip when preparing a case analysis is to articulate the problem. Point out that
Sometimes, problems are not apparent until after the case has been analyzed.
Discussion Question 6: How can writing down the problem(s) in a case help with the
analysis? Explain.
Discussion Question 7: Why is it that a company’s problems would emerge only after the
case analysis? Aren’t they immediately apparent?
C. Conduct Strategic Analyses
This textbook has presented numerous analytical tools (such as five-forces analysis and
value-chain analysis), contingency frameworks (such as when to use related rather than unrelated
The first step is to determine which strategic issues are involved. Remind students that
most real-life case situations involve issues that are highly interrelated. Even in cases where
Once the issues that apply to the case have been identified, conduct the analysis. That
means to actually apply the tools of analysis (such as five-forces analysis, value-chain analysis,
etc.).
In this part of the analysis, point out that it is important to test one’s assumptions about
Discussion Question 8: Why is it important to understand the assumptions that are being
used to make decisions and take action?
The SUPPLEMENT below presents Peter F. Drucker’s views about the critical
importance of making valid and informed assumptions in resolving the strategic issues that many
businesses face.
Extra Example: How Assumptions Drive the Theory—and Success—of a Business
Peter F. Drucker is a highly notable management expert whose books and articles on management have had an
enormous impact on modern management practices. In this article, Drucker describes how important it is for
businesses to understand the assumptions that underlie the actions they take.
“The root cause of nearly every [management crisis] is not that things are being done poorly. It is not even that the
wrong things are being done. Indeed, in most cases, the right things are being done—but fruitlessly. What accounts
for this apparent paradox? The assumptions on which the organization has been built and is being run no longer fit
reality. These are the assumptions that shape any organization’s behavior, dictate its decisions about what to do and
what not to do, and define what the organization considers meaningful results. These assumptions are about markets.
They are about identifying customers and competitors, their values and behavior. They are about technology and its
dynamics, about a company’s strengths and weaknesses. These assumptions are about what a company gets paid for.
They are what I call a company’s theory of the business.”
“It usually takes years of hard work, thinking and experimenting to reach a clear, consistent, and valid theory of the
business. Yet to be successful, every organization must work one out. What are the specifications of a valid theory of
the business? There are four:
1. The assumptions about environment, mission, and core competencies must fit reality.
2. The assumption in all three areas [in #1] have to fit one another.
3. The theory of the business must be known and understood throughout the organization.
4. The theory of the business has to be tested constantly.”
Source: Drucker, P. F. 1994. The theory of the business. Harvard Business Review, 72(5): 95–104.
Discussion Question 9: What are some examples of assumptions that businesses make?
Pick a company and research their assumptions about customers, competitors, suppliers,
buyers, and so forth.
Discussion Question 10: What might be the consequences if you interpreted the content
of a case differently—or made different assumptions—than your team members or
classmates? How might similar consequences affect a business decision if you were an
executive in the business you are analyzing?
EXHIBIT 13.1 presents a summary of the financial ratio analysis techniques that are
presented in APPENDIX 1 to Chapter 13.
By the end of this stage in the process, the problem(s) should be identified and a thorough
analysis should have been conducted.
D. Propose Alternative Solutions
Emphasize that in strategic management case analysis there is rarely one right answer or
After conducting strategic analysis and identifying the problem(s), develop a list of
The aim of considering the implications of various alternative solutions is to find a
Discussion Question 11: What is the point of developing alternative solutions? Discuss.
Discussion Question 12: Is it possible to have more than one solution that is realistic
and viable? Why or why not?
E. Make Recommendations
The basic aim of case analysis is to find solutions. Emphasize that the analysis is not
complete until a course of action has been recommended. The task is to make a set of
Remind students that the proposed solution must solve the problem that was identified.
This point cannot be overemphasized—too often students make recommendations that only treat
Discussion Question 13: What is meant by the phrase “an analysis is not an end in
itself?” Why is it important to follow an analysis with a set of recommendations?
Discussion Question 14: Research examples of action plans that companies have
developed in order to implement a new strategy or undertake a company renewal.
EXHIBIT 13.2 provides some guidelines for preparing an oral case presentation.