mcdonalds case

MGT 4670 Management Practices

HOW TO CONDUCT A CASE ANALYSIS

(By Dess, Lumpkin and Eisner, Strategic Management: text and cases, 4th edition, 2008. McGraw Hill.)

How to Conduct a Case Analysis

The process of analyzing strategic management cases involves several steps. In this section, we review five steps to follow in preparing a case analysis.

Before beginning, point out that there are two prerequisites for effective case analysis. First, unless students prepare for a case discussion, there is little they can gain from the discussion and even less that they can offer.

Second, to get the most out of case analysis, students need to place themselves “inside” the case in order to think like an actual participant in the case situation. Before beginning the analysis, it may be helpful to envision assuming one of these roles:

1. Strategic Decision-Maker The position of the senior executive responsible for resolving the situation that the case describes. It may be the CEO, the business owner, or a strategic manager in a key executive position.

2. Board of Directors The Board of Directors has a responsibility to step in when a management crisis threatens the company. A board member may be in a unique position to solve problems.

3. Outside Consultant Consultants often have an advantage because they can look at a situation objectively. But they may also be at a disadvantage since they have no power to enforce changes.

1. Become Familiar with the Material

Written cases often include a lot of material. The following technique can enhance comprehension:

1. Read through the case once quickly to get an overall sense of the material.

2. Use the initial read-through to assess possible links to strategic concepts.

3. Read through the case again, in depth. Make written notes as you read.

4. Evaluate how strategic concepts might inform key decisions or suggest alternative solutions.

5. After formulating an initial recommendation, thumb through the case again to assess the consequences of the actions you propose.

One of the main reasons to conduct case analysis is to find solutions. Unless you know the problem, however, it is meaningless to attempt to find an answer. Some cases have more than one problem. Even so, emphasize that the problems are usually related.

When trying to determine the problem, it is easy to get hung up on symptoms. Emphasize the importance of seeing beyond the immediate symptoms to the more fundamental problems.

Another tip when preparing a case analysis is to articulate the problem. Point out that writing down a problem statement provides a reference point to turn to as the case analysis proceeds.

Sometimes, problems are not apparent until after the case has been analyzed.

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 diversification strategies), and other techniques that can be used to evaluate strategic situations. Emphasize that the best way to understand these methods is to apply them by conducting case analyses.

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 there is just one major problem, the strategic processes required to solve it may involve several parts of the organization.

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 the case. First, what assumptions are being made about the case content? Second, what assumptions are being made about the best way to resolve the problems?

 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.

Emphasize that in strategic management case analysis there is rarely one right answer or one best way. Therefore, it is helpful to consider several different solutions.

After conducting strategic analysis and identifying the problem(s), develop a list of options. What are the possible solutions? What are the alternatives? Point out that it is during this step of a case analysis that choices and the implications of those choices are evaluated.

The aim of considering the implications of various alternative solutions is to find a solution that both solves the problem and is realistic.

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 recommendations that is consistent with the analysis and explain why the recommended course of action will solve the problem. The recommendation should also include suggestions for how best to implement the proposed solutions.

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 symptoms or fail to tackle the central problems in the case. Encourage students to make a logical argument that shows how the problem led to the analysis and the analysis led to the recommendations.