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A COMPREHENSIVE APPROACH TO ANALYZING STRATEGIC PROBLEMS AND CASES

A CASE ANALYSIS FRAME WORK The basic approach to case analysis is a four stage process, comprising of; Define the Problem Formulate Alternates Evaluate and Compare the Alternatives Select and implement the Chosen Alternative. The problem solving approach to case analysis is not recommended for the students as they are not experienced in the analysis of strategic problems and cases thus the basic framework may be inadequate and oversimplified. AN EXPANDED FRAMEWORK FOR CASE / STRATEGIC ANALYSIS Analyze and Record Current Situation Analyze & Record Problems & their Core Elements Formulate, Evaluate & Record Alternative Courses of Action Select, Justify & Record the Chosen Course of Action & Implementation.

ANALYZE AND RECORD THE CURRENT SITUATION Purpose; Analyzing and recording the current situation is important for three reasons. Develop Clear Understanding of Current Situation; It is impossible to determine what courses of action are appropriate, until we have developed a clear understanding of current situation. In other words, we have no basis in deciding how to improve a situation until we know what that situation is.

Investigate Current & Potential Problems; The major purpose of this stage of analysis is to investigate the current and potential problems involved in the case. By sequentially analyzing all elements of current situation, the analyses clarify those elements and masses evidence that they are the central issues. Determine the Level of Analysis; Level of Analysis means the overall scope of the problem. For example, some cases emphasize issues arises at the industry level, whereas others focus onorganizational&departmental level. Clearly, determining the appropriate level of analysis is a very important aspect of case analysis. Steps of carrying out Environmental Analysis In completing the environmental analysis, the analyst must keep six major steps in mind: Separate Relevant from Superfluous Information; determine that what information is important and what should be ignored. Difference betweenSymptoms and Problems Symptoms; Indicators of problems but not the problems i.e, a decline in sales in a particular sales territory is a symptom of a problem and not the problem itself. Problem; It is the root cause of decline. Perhaps the fixed representative has stopped making the sales on minor problem, as he is unsatisfied with the firms compensation plan. Difference between Facts and Opinion; The analyst must bemindful of the difference between facts and opinions in recording the current situation. Facts; An objective statement or account of information e.g a financial statement or balance sheet. Opinions; Subjective interpretation of a facts or situation ----- I believe that sales will increase by 20% next year. Collect Additional Information for Situational Analysis; Collect additional information outside the case ---- this information is useful for putting the problem in context.

Evaluate Reasonableness & Necessity of Assumptions; Where it is difficult to characterize the current situation completely, at this point assumptions can be made. Draw Explicit Conclusions; When an analyst concludesthat a certain aspect of environmental analysis has no bearing on the case, he should say so explicitly. Steps of Completing Current Situation Organization History:An overview about the organization to cover its brief history, incorporation, products, plants facilities / technologies / capabilities. Organizations Products:Also give an overview about its clientele and product mix, as illustrated in an example of a beverage manufacturer; PEPSI Cans 1.5 lit bottle 2 lit disposable 4.5 lit disposable 7-UP Cans 1.5 lit bottle 4.5 lit disposable Miranda 1.5 lit bottle 4.5 lit disposable MINERAL WATER 1.5 lit bottle 4.5 lit bottle 25 lit bottle 35 lit bottle

Environmental Analysis: Carry out environmental analysis with regard to General, Operating and internal environment. Identify Organizational Direction by evaluating Firms Existing Mission and Objectives. Carry out SWOT:Identify Organizations external Opportunities, Threats and internal Strength and Weaknesses. Analysts should be able to ascertain; Firms existing strategies and threats. Competitors and their strategies and describe problems firm is facing under this aspect.. Describe organizational functional condition.

If required describe the salients of other functional areas. Study Areas in Environmental Analysis In very few cases all each component of General, Operational & Internal components and aspects are crucial for analysis. However, until each component or aspect is considered, there is no way to judge its relative importance. The key task is to consider every possible environmental element in order to access problems and opportunities in the case situation. Keeping a detailed record of all the relevant information uncovered in the environmental analysis is important. Table 12.2 presents a work sheet for recording this information and further investigating its impact on the case. While undertaking environmental analysis, the analyst must keep following six major points in mind. GENERAL ENVIRONMENT Economic component; Economic variables as inflation, unemployment & interest rates. Social component; Social variables as educational levels, customs, beliefs & values. Political component; Lobbying activities and government attitudes toward business. Legal component; Legal variables as federal, state and local legislation Technological component; Level of technology, Technological trends OPERATING ENVIRONMENT Customer component; Target markets and customer profiles. Competition component; Strengths, weaknesses, strategies & market share of competitors Labor component; Supply of labor, skills & competence of available labor. Supplier component; Relationships between suppliers, Resources and the firm International component; International factors / trends INTERNAL ENVIRONMENT

Organizational aspects; Organizational or managerial issues, concepts and analysis, to include; Organizational structure and management system Personnel and administrative structure Briefly comment on the company from organizational point of view. Marketing aspects; Marketing issues, concepts and analysis Financial aspects; Financial issues, concepts and analysis Personnel aspects; Personnel issues, concepts and analysis Production aspects; Production issues, concepts and analysis ANALYZE& RECORD PROBLEMS&THEIR CORE ELEMENTS Purpose; Is to help analyst recognize the major problems and issues of the current situation. Identifying the Inconsistencies; comparing the case situation with an optimal situation should highlight the inconsistencies between them. An optimal situation means a situation in which the activities are performed in a manner consistent with sound managerial principles and logic. Example 1; Analysis of a particular case revealed that although an organization has done an excellent job of setting objectives, its current strategy was not designed appropriately for accomplishing these objectives. The deviation in strategy is probably symptomatic of a deeper managerial problem. Example 2; Reduction in sales despite the fact that overall market size is increasing by 4 6 % annually. Recognizing and Recording of problem is critical for case analysis. In case roots of problems are not determined, explicitly stated and understood the case analysis has little problem. If roots of problems are not determined and explicitly stated and understood, the reminder of the case analysis has little merit because it does not focus on key issues.

Example; Organization excellently set the objectives, however, strategy not designed appropriately for accomplishing these objectives. Table12.3 presents a worksheet to help: Analyze, recognize and record problems. This table emphasizes the importance of providing evidence that a particular problem is a critical one. Simply stating that a particular issue is the major problem is not sufficient; analysis must also provide the reasoning by which they reached this conclusion.

FORMULATE, EVALUATE & RECORD ALTERNATIVE COURSES OF ACTION Purpose; What can be done to resolve problems already defined? Alternate Courses of Action; Regardless of the method used to develop alternatives, the final list should usually include only three to four of the better solutions. Alternate methods commonly used are; Brainstorming;Identify alternate courses of action and develop as many alternatives as possible and then reduce the list to a workable number of most . Search Each Alternate; Another approach is to screen each alternate as it is developed, saving for further evaluation and comparison only those that meet pre-determined feasibility criteria. Formulation and Recommendations of Alternatives Formulation of Alternatives Analyze various options to resolve the problems. Feasible alternatives are evaluated. Recommendations Select the alternate that best solves the problem. Regardless of alternate selected justify the choice; and compare it with companys plan. Specific strategies and long term objectives be recommended. Evaluation of Alternatives; After listing the alternatives, analysts evaluates them in term of strengths and weaknesses;

Strengths; include anythingfavorable about an alternate, such as increased efficiency increased productivity, cost savings, or increased sales and profits. Weaknesses; include anything unfavorable about an alternative, such as its cost in time, money, or other resources or its relative ineffectiveness at solving the problem. General Worksheet for Evaluating Alternative Courses of Action. Table 12.4 offers a worksheet in this regard. Alternative 1 Description of Alternative Strengths & Weaknesses of Alternatives Overall Evaluation of Alternative Repeat as necessary for each feasible alternative

SELECT, JUSTIFY & RECORD CHOOSEN COURSE OF ACTION & IMPLEMENTATION Purpose; Select the alternate that best solves the problem, while creating a minimum of new problems. Select the Alternate that best solves the problem after careful analysis. This alternative is selected via careful analysis of strengths and weaknesses of each alternate scrutinized in the previous stage. Justify Selection; Recording the logic and reasoning that led the selection of a particular alternative are very important. Regardless of which alternative is selected the analyst must justify choice. Implementation Plan; The final phase in the case analysis is devising the action oriented implementation plan. It should emphasize upon following;

How could the organization best implement what analyst recommend? What implementation problems are envisaged? How could firm avoid and solve these problems. General Worksheet for Implementing the Chosen Alternative; Table 12.5 What Should be Done to Implement the Chosen Alternative effectively? Specific Recommendation Justification Who Should be Responsible for Implementing the Chosen Alternative? Specific Recommendation Justification When and Where the Chosen Alternative be Implemented Specific Recommendation Justification How Should the Chosen Alternative be Evaluated for Success or Failure? Specific Recommendation Justification

PITFALLS TO AVOID IN CASE ANALYSIS Inadequately Defining the Problem Analysts often recommend courses of action without adequately understanding or defining the problems those characteristics the case. Sometime analysts jump to premature conclusions upon first reading the case Sound case analysis absolutely depend a clear understanding of major case problem.