External Industrial Analysis and Competitive Market Performance
A case study presents an account of what happened to a business or industry over a number of years. It chronicles the events that managers had to deal with, such as changes in the competitive environment, and charts the managers’ response, which usually involved changing the business- or corporate-level strategy. To analyze a case study, therefore, one must examine closely the issues with which the company is confronted.
Cases prove valuable for two reasons: First, cases provide students with experience of organizational problems that one probably has not had the opportunity to experience firsthand. In a relatively short period of time, he will have the chance to appreciate and analyze the problems faced by a company in an industry and to understand how managers tried to deal with them.
Second, cases illustrate what one has learned and how he can apply the things he learned to solve the company’s problems. The meaning and implication of this information are made clearer when they are applied to case studies. The theory and concepts help reveal what is going on in the companies studied and allow students to evaluate the solutions that specify companies adopted to deal with their problems.
Management is an uncertain game, and using cases to see how theory can be put into practice is one way of improving student’s skills of diagnostic investigation. When evaluating a case, it is important to be systematic. This requires analyzing the case in a logical fashion, beginning with the identification of operating and financial strengths and weaknesses and environmental opportunities and threats.
This means an external analysis of industry and competitive market to be performed, covering general trends, present and future specific opportunities and keys to success, and competitor strengths and weaknesses in key-to-success areas. Also, one has to perform an internal analysis of the company. He/she has to ask himself/herself whether the company’s current strategies make sense. If they do not, what changes need to be made?
What are the recommendations? He has to be able to State explicitly how the strategies he/she identifies take advantage of the company’s strengths to exploit environmental opportunities, how they rectify the company’s weaknesses, and how they counter environmental threats.
To do this, one needs both special training in systematic structured analysis, the knowledge base upon which strategic frameworks are built, as well as intensive training in formulating and implementing winning strategies systematically and creatively. The main objective of case study is formulating of enterprise-wide strategies that will differentiate their company from the competition and will enable the companies in intermediate and long-term to win against the strong competitors.
Other objectives of performing a detailed analysis of a case study are:
Also, one has to be able to determine company’s internal weaknesses such as, lack of strategic direction, weak financial resources, limited spending on R&D, narrow, product line, limited distribution, high operating costs, poor marketing skills, limited management skills etc.
One has to be able to determine the external opportunities and threats. Thus, economic, political, demographic, legal and regulatory, social and other changes and trends in the external environment have to be researched and investigated.
The case study is a good tool for thinking strategically and finding the answer to three basic questions:
The major way to outperform a competitor is focusing on existing, as well as anticipated, market needs and continually coming up with new ways to meet them in key-to-success areas, and with the needed resources to do this. In a case study with matching internal resources and capabilities with external market requirements and opportunities is critical to success of that company.
Cases can be useful and cheap tool for management in fast changing markets. Cases can be useful to practitioners to demonstrate best practice in management or examples of poor practice. Even an historical case can be used to meet demands of current practice. Cases can also illustrate a new technique or approach to management. Kaplan (1998) argues that the case is a critical part of the dissemination of new practice.
The early development of activity-based management was matched by many Harvard cases which demonstrated the use and impact of that technique. For example, Schrader Bellows (Cooper, 1986) demonstrated the proliferation of products and problems in strategy direction that can result from poor information.
Target costing was another management technique well illustrated by cases. The application of management theory in a case context would give managers a deeper understanding of how to apply theory in their own organizations. Along with this overview are two articles from The Harvard Business School and one article from another source on the Case Study Method.
Take a minute to review them. Harvard Business School 9-584-097 Rev. October 12, 1988 This note was prepared by Professor Benson P. Shapiro. Copyright © 1984 by the President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685 or write Harvard Business School Publishing, Boston, MA 02163.
No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School. 1 An Introduction to Cases Management instruction involves the development of a set of philosophies, approaches, skills, knowledge, and techniques.
Lectures and readings are the most efficient way to acquire knowledge and to become informed about techniques. Exercises or problem sets are an excellent way to begin to learn about the application and limitations of techniques. But, the development of philosophies, approaches, and skills is best served by the case method which can also help to provide knowledge and experience with techniques. The case method becomes a part of a broad-gauge approach to management education and development.
It is therefore generally used in well-orchestrated concert with other approaches. Most students and executive program participants are quite familiar with lectures, readings, exercises, and problem sets, but the case method is often new to them. It is important to understand the basis for the case method and to have some idea of how to approach cases.
That is the purpose of this brief note. The case method is built around the concepts of metaphors and simulation. Each case is a description of a real business situation and serves as a metaphor for a particular set of problems. The situations which you face as a manager may differ from the metaphors we have chosen here, but taken together, the cases provide a useful and relevant set of metaphors for marketing situations.
The cases were selected to include a wide variety of products and company types so that at least some of them would be relevant along those dimensions. The situations analyzed and skills developed in the cases are relevant to almost all marketing management situations.
Thus, they are relevant to students of marketing management. The case method of management instruction is based upon the belief that management is a skill rather than a collection of techniques or concepts. The best way to learn a skill is to practice in a simulation-type process. Thus, the swimmer swims and the pianist play the piano. The swimming novice might drown if thrown into deep water after reading a set of books.
And few of us would want to hear a concert pianist who had never before touched a piano, but who had attended many lectures on piano playing. Because it is impractical to have the student manager manage a company, the case provides a vehicle for simulation. The total case process consists of four steps ordered as follows:
The protaganist is usually one manager, but is sometimes a group. By actively studying the case, the student begins to learn how to analyze a management situation and develop a plan of action. By participating in an involved manner in the case discussion, the student learns to commit him or herself to a position easily, and to express that position articulately. The core of management decision making consists of the processes of analysis, choice, and persuasion.
The fourth step, generalization, is also part of good management practice. The smart manager steps back from each situation he or she has experienced and asks, “What did I learn?” and “How does the situation and the lesson relate to my whole experience?” The astute student will want to do the same thing on his or her own, building on the help provided by the instructor. An important part of that process is to relate the cases to the assigned reading material.
The reading material generally provides the structure and techniques, and the case a simulated experience in the application of the structure and techniques. The cases also help to develop a generalized approach to business situations as well as a set of philosophies. The case method is demanding of both teachers and students. Participants who are involved in each case analysis and discussion, and who attempt to generalize their learning across cases gain the most from the process.
Each person should strive to develop the ability to ask “the right questions” about each case. The instructor may provide specific questions for each case. The following questions are among those which are generally relevant to all cases: • Who is the protagonist? • What are his or her objectives (implicit or explicit)? • What decisions (implicit or explicit) must I make?