Case Analysis Framework
Strategic Management
Strategic Management
Industry
context
Company
National/Mac resources,
ro context capabilities,
and strategies
Company
performance
Strategic Analysis = Choices
Thinking
strategically Identify strategic Choice of best
• Industry and feasible options strategy
competitive
conditions
• Firm’s own situation
Case Background
Brief factual summary
1/2 page or so
name of firm, time of case
broad issue(s)
PEST Analysis
Political
Economic
Social-Cultural
Technological
Summary
Most important or significant Factors
not all Factors equally significant
focus on those with greatest impact
Industry Analysis
5 Forces Model of Competition
Porter’s 5 Forces
Head to head competition L-M-H
Substitutes L-M-H
Threat of entry L-M-H
Power of buyers L-M-H
Power of suppliers L-M-H
Strategic Group Map
Cluster the major competitors
According to their “niche”
Graphically
Major Competitor Analysis
Who are they?
what strategies are they pursuing
relative market share? profitability?
Driving Forces
major forces of change affecting all firms
e.g. entry of new competitors
de-integration
globalization of industry
Key Success Factors
Generic characteristics for all firms
necessary for success
regardless of particular business strategy
whether low cost or differentiation
Overall Industry Attractiveness
Based on:
Porter’s 5 forces analysis
driving forces, KSFs, competitor analysis
industry (un)attractive e.g. ROI?
Business Unit Analysis
Value Chain
Apply analysis to Porter’s VC
under each heading
also helps understand Hamel Framework
Porter Value Chain
Value Chain System
Supplier Firm value Channel Buyer value
…
value chain chain value chain chain
Prahalad and Hamel’s Framework
Core Competencies
Core Product
End Product
SCA (Sustainable Competitive Advantage)
Hamel’s Competency Framework
Core competencies
Valuable Rare
CC
Costly to Non-
imitate substituteable
Outcomes from Criteria for SCA
Financial Statement Analysis
A. Investment Return
Capital Market Ratios:
EPS (Earning Per-share)
P/E (Price to Earning ratio)
B. Financial Strength
Liquidity Ratios:
Current (Total Current Assets / Total Current Liabilities)
Acid Test
Solvency Ratios:
D/A, D/E, Interest Coverage, Cash Flow/Debt
Financial Statement Analysis (2)
C. Management Performance
Profitability Ratios:
Gross Margin
Net Profit Margin
Return on Assets
Return on Equity
Return on Capital
Financial Statement Analysis (3)
D. Resource Utilization Ratios
Asset Turnover
Payables Turnover
Vision/Mission Statement
Construct firm’s mission from data
may recommend changes in mission
under strategies
Corporate Objectives
Presently followed by firm
quantitative objectives
qualitative objectives
Relationships between ...
Business level strategy
Overall Firm (un)Attractiveness
Based on:
value chain analysis
core competency analysis
F/S analysis
sustainable competitive advantage
is firm attractive e.g. ROI or profitability?
Strategic Issues
A Diversified Company
Corporate Issues
1. What businesses should we be in?
re macro, industry, firm O/T, S/W analysis
vertical, horizontal, international diversification
internal growth vs acquisitions vs alliances
2. How should corporate govern SBUs?
Centralized vs decentralized
large HQ vs small HQ
portfolio approach vs competencies approach
Business Level Issues
1. What product markets should we be in?
horizontal (McDonalds sells chicken)
vertical (outsourcing)
2. How should firm produce SCA?
Which of 4 generic strategies?
Functional Level Issues
How should the functional depts support the SBU
strategy
what functional strategies needed
Corporate and Business
Strategy
Corporate Strategy Alternatives
List and analyze major alternatives:
vertical, horizontal, intl diversification
internal growth vs acquisitions vs alliances
should address issues defined above
Business Strategy Alternatives
List and analyze strategy alternatives
should address issues at SBU defined above
Generic Business Level
Strategies
Factors Shaping Strategy
Summary
Summarize major O/T in PEST
summarize strength of 5 forces
summarize industry (un)attractiveness
summarize VC & major competencies
summarize major strategic issues
summarize corporate & business strategies
summarize how strategy recommendations solve
problems
