Entrepreneurship

Hands-on Guide: How to Analyse a Business Case Study

Case studies are used in many professional education programs, primarily in business school, to present real-world situations to students and to assess their ability to parse out the important aspects of a given dilemma. In general, a case study should include, in order: background on the business environment, description of the given business, identification of a key problem or issue, steps taken to address the issue, your assessment of that response, and suggestions for better business strategy. The steps below will guide you through the process of analyzing a business case study in this way.

A case study helps students learn by immersing them in a real-world business scenario where they can act as problem-solvers and decision-makers. The case presents facts about a particular organization. Students are asked to analyse the case by focusing on the most important facts and using this information to determine the opportunities and problems facing that organization. Students are then asked to identify alternative courses of action to deal with the problems they identify.

A case study analysis must not merely summarize the case. It should identify key issues and problems, outline and assess alternative courses of action, and draw appropriate conclusions. The case study analysis can be broken down into the following steps:

1. Identify the most important facts surrounding the case.
2. Describe the structure and size of the main business under consideration
3. Identify the key issue or issues.
4. Specify alternative courses of action.
5. Evaluate each course of action.
6. Recommend the best course of action.
7. Conclusion.

Let’s look at what each step involves.

1. Identify the most important facts surrounding the case.
   Read the case several times to become familiar with the information it contains. Pay attention to the information in any accompanying exhibits, tables, or figures. Many case scenarios, as in real life, present a great deal of detailed information. Some of these facts are more relevant than others for problem identification. One can assume the facts and figures in the case are true, but statements, judgments, or decisions made by individuals should be questioned. Underline and then list the most important facts and figures that would help you define the central problem or issue.
   Describe the nature of the organization under consideration and its competitors. Provide general information about the market and customer base. Indicate any significant changes in the business environment or any new endeavours upon which the business is embarking.

If key facts and numbers are not available, you can make assumptions, but these assumptions should be reasonable given the situation. The “correctness” of your conclusions may depend on the assumptions you make.

2. Describe the structure and size of the main business under consideration

Analyse its management structure, employee base, and financial history. Describe annual revenues and profit. Provide figures on employment. Include details about private ownership, public ownership, and investment holdings. Provide a brief overview of the business’s leaders and command chain.

• Identify the key issue or issues.
  Use the facts provided by the case to identify the key issue or issues facing the company you are studying. Many cases present multiple issues or problems. Identify the most important and separate them from more trivial issues. State the major problem or challenge facing the company. You should be able to describe the problem or challenge in one or two sentences. You should be able to explain how this problem affects the strategy or performance of the organization.

You will need to explain why the problem occurred. Does the problem or challenge face the company comes from a changing environment, new opportunities, a declining market share, or inefficient internal or external business processes? In the case of information systems-related problems, you need to pay special attention to the role of technology as well as the behaviour of the organization and its management.

In all likelihood, there will be several different factors at play. Decide which is the main concern of the case study by examining what most of the data talks about, the main problems facing the business, and the conclusions at the end of the study. Examples might include expansion into a new market, response to a competitor’s marketing campaign, or a changing customer base.

Information system problems in the business world typically present a combination of management, technology, and organizational issues. When identifying the key issue or problem, ask what kind of problem it is: Is it a management problem, a technology problem, an organizational problem, or a combination of these? What management, organizational, and technology factors contributed to the problem?

• To determine if a problem stems from management factors, consider whether managers are exerting appropriate leadership over the organization and monitoring organizational performance. Consider also the nature of management decision-making: Do managers have sufficient information for performing this role, or do they fail to take advantage of the information that is available?
• To determine if a problem stems from technology factors, examine any issues arising from the organization’s information technology infrastructure: its hardware, software, networks and telecommunications infrastructure, and the management of data in databases or traditional files. Consider also whether the appropriate management and organizational assets are in place to use this technology effectively.
• To determine the role of organizational factors, examine any issues arising from the organization’s structure, culture, business processes, work groups, divisions among interest groups, relationships with other organizations, as well as the impact of changes in the organization’s external environment-changes in government regulations, economic conditions, or the actions of competitors, customers, and suppliers.

You will have to decide which of these factors—or combination of factors—is most important in explaining why the problem occurred.

• Specify alternative courses of action.
  List the courses of action the company can take to solve its problem or meet the challenge it faces. For information system-related problems, do these alternatives require a new information system or the modification of an existing system? Are new technologies, business processes, organizational structures, or management behaviour required? What changes to organizational processes would be required by each alternative? What management policy would be required to implement each alternative?

Remember, there is a difference between what an organization “should do” and what that organization actually “can do”. Some solutions are too expensive or operationally difficult to implement, and you should avoid solutions that are beyond the organization’s resources. Identify the constraints that will limit the solutions available. Is each alternative executable given these constraints?

• Evaluate each course of action.
  Evaluate each alternative using the facts and issues you identified earlier, given the conditions and information available. Identify the costs and benefits of each alternative. Ask yourself “what would be the likely outcome of this course of action? State the risks as well as the rewards associated with each course of action. Is your recommendation feasible from a technical, operational, and financial standpoint? Be sure to state any assumptions on which you have based your decision.
  Draw on the information you gathered and trace a chronological progression of steps taken (or not taken). Cite data included in the case study, such as increased marketing spending, purchasing of new property, changed revenue streams, etc.
• Recommend the best course of action.
  Identify the successful aspects of this response as well as its failures. State your choice for the best course of action and provide a detailed explanation of why you made this selection. You may also want to provide an explanation of why other alternatives were not selected. Your final recommendation should flow logically from the rest of your case analysis and should clearly specify what assumptions were used to shape your conclusion. There is often no single “right” answer, and each option is likely to have risks as well as rewards.

Indicate whether each aspect of the response met its goal and whether the response overall was well-crafted. Use numerical benchmarks, like a desired customer share, to show whether goals were met; analyse broader issues, like employee management policies, to talk about the response as a whole.
Suggest alternative or improved measures that could have been taken by the business, using specific examples and backing up your suggestions with data and calculations.

• Conclude your analysis by reviewing your findings and emphasizing what you would do differently in the case. Showcase both your understanding of the case study and your business strategy.

Warnings:

• Do not use impassioned or emphatic language in your analysis.
• Business case studies are a tool for gauging your business acumen, not your personal beliefs.
• When assigning blame or identifying flaws in strategy, use a detached, disinterested tone.

General Tips:

• Always read a case study several times. At first, you should read just for the basic details. On each subsequent reading, look for details about a specific topic: competitors, business strategy, management structure, financial loss. Highlight phrases and sections relating to these topics and take notes.
• In the preliminary stages of analysing a case study, no detail is insignificant. The biggest numbers can often be misleading, and the point of an analysis is often to dig deeper and find otherwise unnoticed variables that drive a situation.
• If you are analysing a case study for a consulting company interview, be sure to direct your comments towards the matters handled by the company. For example, if the company deals with marketing strategy, focus on the business’s successes and failures in marketing; if you are interviewing for a financial consulting job, analyse how well the business keeps their books and their investment strategy.
• Business school professors, potential employers, and other evaluators are looking to see that you understand the business aspects of the case, not to assess your skills as a close reader. Always remember that what’s important is the content of the case study, not the way in which the information is presented or peculiarities of its style.