Case Study

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Questions that needs to be answered in each section above

Step 16: What Strengths Exist for the Organization? (Page 214)

Step 17: What Weaknesses Exist for the Organization? (Page 214-215)

Resources and strategic capabilities are the foundation for a firm’s internal strengths and weaknesses. The VRINO framework should be employed to evaluate the competitive quality of firm resources. The organization’s strengths and weaknesses should be numbered, each with as much depth and justification as possible. Many possible organizational strengths and weaknesses can emanate from its resource base, including (but not limited to):

  1.  Brand names and recognition

  2.  Company reputation

  3.  Control systems

  4.  Costs (internal)

  5.  Customer loyalty

  6.  Decision-making

6.  Decision-making

  7.  Distribution

  8.  Economies of scale

  9.  Environmental scanning

10.  Executive leadership

11.  Financial resources

12.  Forecasting

13.  Government lobbying

14.  Human resources

15.  Information systems and technology

16.  Internet presence

17.  Labor relations

18.  Location

19.  Logistics and Inventory management

20.  Manufacturing and operations

21.  Market share

22.  Organizational structure

23.  Physical facilities and equipment

24.  Product/service differentiation

25.  Product/service quality

26.  Promotion and advertising

27.  Public relations

28.  Purchasing and channel management

29.  Quality control

30.  Research and development

31.  Sales

32.  Strategic capabilities

33.  Technology and patents

The previous list includes examples of strengths and weaknesses, but there are many others. To set the stage for the remainder of the analysis, it is important to state clearly how each strength has helped the organization and how each weakness has hindered it. In many instances, the strengths are the primary catalysts for the organization’s successes, and its weaknesses are the main reasons why it has failed in certain endeavors.

There is no set target for the number of strengths or weaknesses that should be identified in a case analysis. When only several are identified, however, it is likely that the effort is not thorough. When the list becomes too long—as would be the case if all of the items in the previous list happened to be associated with strengths and/or weaknesses—it becomes cumbersome to manage in the remaining steps of the analysis. In this situation, it is necessary to consider pooling several items into a single one whenever feasible. For example, “expertise in advertising” and “a strong sales force” could be merged into a single item entitled “marketing expertise.”

Step 18: What Opportunities Exist for the Organization? (Page 216)

Step 19: What Threats Exist for the Organization? (Page 216)

In the SWOT analysis, one must not only identify strengths and weaknesses, but must also translate the analysis of the macroenvironment and industry into opportunities and threats. Although these issues will have been addressed at the industry level earlier in the analysis, they should be integrated into a discussion that highlights specifically how they present opportunities to or threaten the organization. For example, if it was previously noted that the industry rises and falls abruptly with economic conditions, then the prospects of a recession may pose a major threat for the firm. If it was noted that technological advances have not yet been incorporated into production processes in the industry, then application of this technology may become an opportunity worth considering for the organization.

There is no set target for the number of opportunities or threats that should be identified. When only several in each category are identified, however, it is likely that the analysis is superficial and key issues have not been included.

Step 20: What Strategic Alternatives Are Available to the Organization? (Page 219 – 219)

Alternatives are organizational courses of action that (1) are worth considering because they offer some potentially positive benefits, and (2) are within the realm of possibilities for the organization. For starters, one alternative is to continue with the present strategy. Sometimes, this alternative is the most desirable, but typically, some changes are needed. Additional alternatives should be identified from the SW/OT matrix in two ways. First, one should consider more fully utilizing one’s strengths to take advantage of existing opportunities or palliate threats if the organization is not presently doing so. For example, if an organization has excess production capacity and there exists a market not presently served, then moving into this market is worth considering. Second, one should also consider taking action to minimize the weaknesses so that the organization can pursue opportunities or minimize the effect of threats. It is critical to identify the S/W-O/T combinations that result in the identification of each alternative, but it is not worthwhile to include alternatives that are obviously implausible or unattractive (e.g., McDonald’s could close its fast-food stores to concentrate on promoting frozen foods through grocery outlets) for the sake of creating a list. All of the alternatives to be considered should be deemed viable upon cursory examination. Alternatives should also be plotted in the SCLC matrix.

There is no set number of alternatives that should be generated. As with the identification of elements within the SWOT analysis, having too few alternatives implies a superficial analysis, whereas too many alternatives can become difficult to assess.

Step 21: What Are the Pros and Cons of These Alternatives? (Page 219)

Some of the alternatives identified in step 20 may be mutually exclusive, whereas others may not. Inevitably, one must assess the attractiveness of each alternative. It is not appropriate to subjectively promote one or two that will be recommended later. Rather, pros and cons must be objectively identified for each alternative. Even attractive alternatives have costs and downsides, and others may have limited prospects for success, factors that should be converted to dollars whenever possible. For example, quality circles may be proposed as a solution to low morale without considering the costs. Quality circles require a commitment of time (i.e., lost production) and effort if they are to be successful, and management must be willing to implement suggestions. In the final analysis, quality circles may be desirable, but no strategy can be implemented cost free.

Interestingly, the quality circles recommendation also has another problem. Most scholars and practitioners have reported that quality circles are effective only when part of a larger approach to employee empowerment. As such, a quality circle alternative should encompass an overall strategic change as related to the organization’s human resources, not simply the implementation of a technique.

It is important to consider competitive responses in concert with this and the subsequent case analysis step. For example, a McDonald’s drop in price for the Big Mac cannot be considered in isolation of a likely price cut at Burger King. In many cases, anticipated retaliation is a “con” of the alternative and could ultimately render the alternative as undesirable. Assuming that competitor behavior will not change over time—especially in response to a major strategic change—is shortsighted.

Step 22: Which Alternative(s) Should Be Pursued and Why? (Page 219)

This phase necessitates an objective and subjective analysis of the pros and cons associated with each alternative. It is important that an alternative not be selected without both arguing for its selection and explaining why competing alternatives were rejected. When two or more options are mutually exclusive, eliminating the options not chosen is just as important as selecting the desired choices. While it is important to spend time analyzing the alternatives, one must resist the temptation to “over-analyze” and avoid making the difficult choices, a process often referred to as “analysis to paralysis.”

Step 23: How Should the Alternative(s) Be Implemented? (Page 257)