How Growth Industries

Strategic Case Analysis

Using the AMA (American Management Association) 8 step case analysis process

Compiled by: Deb Patten, Davenport University 1. The Basic Problem Solving or Case Analysis Process 2. Applying the Process The Basic Problem Solving or Case Analysis Process You have all engaged in the process of basic problem solving numerous times in your life as well as in your academic career. However, since you will be utilizing this process extensively in this course, it is appropriate to spend some time reviewing and discussing it. Whether this process is being applied to a simple, routine decision or an immensely complex decision the steps are the same. It is what one does within each of those steps that vary. To begin, let's review the process. Step 1 - Recap and analyze the relevant facts In this step look at the information you have and the information you can gather that is relevant to the situation. The relevancy component is key. Often, cases that are presented in texts, and certainly the information that is available through outside sources, contain additional material that is related but not relevant. As a manager that is strategically analyzing a situation (case), the first step is to figure out what you need to pay attention to and what you don't. That is relevance. For example, you are presented with a scenario involving employees who are chronically late for work and the information you have mentions that it is snowing. Is the fact that it is snowing relevant or not? It may or may not be. It could just be extra "stuff" that is included, but not relevant. On the other hand, if this group of chronically late employees all happen to travel the same road that is notorious for multi-car pile-ups when it snows, then the fact that they are late when it is snowing is relevant. This also points out that in many situations trying to work from only the facts presented is not enough. The manager must be astute enough to recognize when additional information, and what type of information is required, in order to assess the relevance of a particular piece of data. At the same time he or she must know when to make the decision with the information at hand. Often this step is concluded with a SWOT analysis which further extrapolates the most important issues out of the overall situation analysis. This helps to zero-in on the root problem. Step 2 - Determining the Root Problem & Step 3 - Identifying the Problem Components The most difficult and important part of the process is identifying the problem. You must have a clearly stated, concisely worded problem to generate usable information. The objective is to separate symptoms from the actual problem. If there is an underlying reason for what you have identified, it is a symptom and not the problem itself (Hatten, 2006). You should be able to state the root problem in a sentence. It may then be necessary, and in a comprehensive case or in more complex situations a given, to elaborate on any identifying component portions of the problem. Often it is necessary to

prioritize or identify which components need to be addressed first, second, and so forth at this stage of the process. Step 4 - Generating Alternatives (THE WHAT/Setting Objectives) This is the brainstorming step. It is here that a variety of alternative courses of action are identified and articulated. This step is where you list the strategies you might pursue. This is an important point. If it isn't listed here, you can't choose it as your preferred course of action. While it isn't possible to list every possible course of action, there should be a variety of things to do. This is where you put your creative powers to work. In this part of the process, you should engage in brainstorming. Remember that in brainstorming you simply generate ideas - save the evaluation of those ideas for later. That isn't to say that in critical strategic case analysis you want to include every idea you came up with in the final report. In actual business strategic planning, reports have been produced that simply refer to the process and the number of ideas that upon initial screening were determined not plausible or viable. The objective of this process is not to do a full analysis of every idea that was generated while brainstorming but rather to conduct an initial screening and narrowing of the choices down to those that seem most likely to succeed if implemented.

Step 5 - Evaluating Alternatives When the case analysis report is written, it often appears as if steps 4 and 5 were done simultaneously. That should not be the case. Once the list has been narrowed down to those choices that are most likely to succeed, the information that was gathered and analyzed in the first step should be applied to these alternatives. Articulate the most probable outcome based on the information collected, personal experience, education, and expertise. It is important to support selected outcomes with analysis. As an example, it is not enough to say, “Do nothing - situation will not improve.” While this may be true in many situations, it lacks credibility because the decision is not supported by facts. When writing this section, make sure the alternatives are clearly differentiated from each other with the use of headings and subheading and offset with bold type or underlining, etc.

• Remember, in business writing you are trying to convey information and the reader needs to be able to pick the pieces out quickly and easily when working back and forth through the report!

Step 6 - Choose an Alternative Once the possible consequences of the narrowed down alternatives have been considered, it is time to make a decision. It is important that the final decision is clearly stated with choice of strategy or strategies selected.

• Keep in mind that your readers are not as immersed in this as you have been. What seems obvious to you may not be to them. Don't assume - articulate the reasoning behind your choice.

Step 7 - Implementation Plan (THE HOW)

While in many cases, people stop at step 6, in order to complete the process, two more steps are needed. The implementation plan portion of strategic case analysis is where it is explained how the decision is going to be implemented. This is where tactical details are outlined. In the business world, this stage will often involve operational action plans that state the name of the person responsible for carrying out specific tasks and a precise date by which the tasks will be completed. In a course based setting, it isn't possible to take it to that depth. However, it is necessary to complete a basic tactical plan that outlines the major tasks that must be undertaken and a logical timeframe within which they are to be completed. For example, let's imagine for a moment that the chosen strategy involves some type of expansion. Expansion requires money and the financial reports do not show the organization to be particularly cash heavy. Therefore, in order to carry out the expansion, the firm must borrow money. Break that down into the necessary steps – i.e.: determine amount needed within 2 weeks; determine if needed funds should be borrowed; a bond issued, stock issued, etc. within 4 weeks, and so forth. This is a rudimentary example, but it should give you the idea. This portion of the business plan (strategic case) is often presented in the form of a table with columns for the action, the area of the firm responsible, and a time frame for completion. Without this section of the case analysis, the plan is not complete; and often neither will student course work be considered complete!

Step 8 - Alternative Choice Finally, as with any plan, it is necessary to set up an evaluation point. How and when will the strategy be checked on to determine whether it has been successfully implemented? Is the firm getting the return on investment it expected?

• Obviously, in the scope of an academic course, you will not actually carry out the implementation step or the evaluation of results, but you will need to state how and when this will take place. You also need to state what action is required in the event that the results are not as desired. Would you start the process over? Would you choose some other alternative that you've already identified and evaluated? Those are the decisions you must make.

• Make sure you have a concluding paragraph.