Marketing Case Analysis

How to Analyze a Case

An Introduction to the Case Method

For many of you, this will be the first course using cases that you have ever taken. The fact that

this form of learning is new to you will naturally cause you some concern, and early on, some

difficulty. Your textbook has ten chapters that present aspects of the strategic marketing planning

process, and a large number of “stories” about companies called cases. These cases give you the

chance to look at the present situation facing an organization, and after a systematic analysis,

make recommendations that will produce a change in the results or outcomes. While you cannot

be certain what that outcome will be, through the discussion and critique of your suggestions by

fellow students and your professor, projections can be made about the foundation for the

probable success of your recommendations.

In this course you will have the opportunity, through cases, to see how well you can assess and

address a business issue or problem. The role of the case course is to provide you with the

opportunity to utilize the knowledge you have gained to this point to evaluate and make

recommendations to enhance the performance of real organizations. This is not a substitute for

real world experience in a job with an organization, but it is the type of learning that helps

prepare you to begin using the business knowledge you have acquired.

Analysis Frameworks

Because the process of learning through case analysis may be new to you, we will devote much

of this discussion to providing you with a framework to use in analyzing the cases found in your

textbook. Such a framework is useful not only in analyzing cases in textbooks, but also in

considering business situations described in publications such as The Wall Street Journal,

Business Week, Fortune, and Forbes. In reality, most articles about companies in magazines and

newspapers are mini-cases. The cases in your text tell stories, including facts, opinions,

projections, results, expectations, plans, policies, and programs. As readers, we need some way

to structure the information presented in a way that makes it more useable. Analysis frameworks

provide a means to accomplish this end.

There are several benefits in having a framework to use for analyzing situations. The first is that

a framework provides comprehensive coverage of the topics and issues involved. Without a

framework, the analyst may overlook some issues. For example, a person might not consider the

various effects of the economic environment facing the organization at a given point in time.

Recommendations made without this consideration may not be appropriate, and they may even

lead to the failure of the organization. Another benefit of a framework is ease of communication.

When everyone uses a similar framework to analyze cases, the terms each person uses have

similar meanings. This is a huge advantage in discussing cases in and outside of class. A final

benefit is consistency of analysis. A framework provides a blueprint to approach situations

consistently every time. This is a great aid in getting started and conducting the analysis

effectively and efficiently. Using the framework repeatedly will make you very proficient with it.

In fact, experience shows that students continue to use this framework in their jobs long after

graduation. They continue to get these benefits, and in times of crisis, the framework gives them

something to rely on in dealing with difficult situations.

The framework presented in the remainder of this discussion is certainly not the only one that is

useful in analyzing cases. We also cannot claim that it is the best framework. Your professor

may provide his or her own framework, and if so, you should follow it. In all probability, it will

be some modification of the one outlined here. As long as the framework provides you with the

benefits outlined above, you feel it suits your needs, and you use it consistently, the case analysis

process will be made more manageable and valuable.

The Seven-Step Case Analysis Framework

The seven-step framework presented here is a synthesis of the frameworks used by your book’s

authors in their many years of combined experience in teaching marketing. It has been improved

over the years through discussions with other marketing professors who use case analysis in their

courses. It is straightforward to use, and provides the benefits of comprehensiveness,

communication, and consistency. It will not, however, serve as a substitute for carefully reading

(usually three or more times) and considering the cases. It will provide a solid structure to

organize the diverse information presented in a case.

As you work your way through this framework, or a similar approach to case analysis, we offer

the following hints to increase your probability of success:

1. No one can analyze a case after reading it only one time, or even worse, doing the analysis during the first reading of the case. You should read through the case once just to get an

understanding of the nature of the case. During the second reading, you can begin to structure

and classify the issues as they appear. A truly comprehensive case analysis will probably

require at least three readings.

2. Don’t get trapped into thinking the “answer” to the case is hidden somewhere in the case text. There is never a single answer to a case just as there is never a single marketing strategy

that is appropriate for all situations. Each case is unique. Looking for tricks or shortcuts is not

appropriate.

3. Make an effort to put yourself in the shoes of the decision maker in the case. The use of role- playing as part of the analysis can be very useful. It helps you gain some feeling for the

perspective of the key parties at the time the case took place. After you have done several

analyses, you will likely come up with your own additional procedures or guidelines that

assist you with this process.

4. One final hint: Like anything else, the learning benefits of case analysis are dependent on the amount of effort you put into the analysis. Learning to think critically and see the big picture

are important lessons to be learned in a case course. Likewise, learning how business

activities (not just marketing activities) can be strategically integrated to achieve superior

results is the ultimate goal. Finally, quality is much more important than quantity with

regards to any report.

5. Answer the Case Questions for Discussion within the appropriate framework step. At the end of every case, there is a section entitled “Questions for Discussion.” Please

answer these questions in your case analysis and presentation as well.

Step 1: Situation Analysis

The material presented in a case is much like the communications we have in our daily lives.

Usually our conversations involve the selection of a topic and then the discussion of that topic,

and so it is with cases. The problem is that we end up with bits and pieces of information that by

themselves are not very useful, but once organized, can be quite valuable in our assessment of

the situation. The first step in the framework helps you organize the pieces of information into

more useful topic blocks.

The process of assessing a situation is widely accomplished through the use of SWOT Analysis

(strengths, weaknesses, opportunities and threats). The issues and procedures involved in SWOT

Analysis are fully explored in Chapter 4 of your text. Our role here is simply to reinforce the

issues covered in SWOT and to emphasize its role in the case analysis framework.

Looking at an organization’s strengths and weaknesses is the first half of Step 1. This involves

looking at the organization’s internal environment. Strengths are those aspects of the internal

environment that can help the firm address a present problem, issue, or opportunity, while

weaknesses are negative factors or deficiencies that do not allow the firm to reach its full

potential. One topic that should be addressed is the content and appropriateness of the current

marketing plan. Is the marketing plan current? Do the key parties understand and utilize it? Was

it developed with input from all levels of the organization? The organization’s financial

condition may also present strengths and weaknesses. Is it in a solid position, and does it have, or

can it acquire, needed funds at a reasonable cost of capital? Other possible strengths and

weaknesses might include managerial expertise, human resources, product reputation and

customer loyalty, patents and trademarks, age and capacity of production facilities, channel

relationships, and promotional programs (sales force, advertising program, publicity, and sales

promotion efforts). These are all issues that we want to consider in terms of both the present state

of the firm and identifiable trends.

Students assessing a case situation see the importance of considering the organization’s internal

environment fairly naturally. The aspect of SWOT analysis that gives students the most difficulty

is the external environment where all opportunities and threats reside. These are issues that exist

outside the boundaries of the firm. All opportunities and threats will exist at their present levels

even if the organization in question does not exist. Technology, competition, the macroeconomic

environment, regulation, and social and cultural trends are all issues that affect the success of an

organization’s strategies, but the organization has only limited influence on them.

Because the power to affect the external environment significantly is usually absent,

management must view the factors and forces present in the external environment as issues to be

considered, but not usually controlled. Managers should take steps to minimize the exposure to

threats and to take full advantage of the opportunities. You might think of opportunities and

threats as currents in a river. It is much easier to find a river whose currents will help take you

where you are going than to try to make headway going against the force of the river.

You may get hung up on several points when conducting a SWOT analysis. First, while a factor

will usually fall into only one of the four categories, this is not always the case. A factor can be

both a strength and a weakness, or an opportunity and a threat. For example, excess capacity in a

factory would be a weakness from a production efficiency standpoint. But, it could be a strength

if the firm is looking to introduce a new product because it will not have to build a new factory.

The second and more serious issue is the difficulty in identifying opportunities. There is a

tendency to confuse opportunities with possibilities. Something the company might do, such as

franchise its operations in an effort to expand, is not an opportunity. The mention of the

organization’s name in the opportunity is a clear indication that it is not an issue from the

external environment. Both threats and opportunities would be present even if the organization

did not exist.

Third, if your professor asks you to update the case material, you must be sure to get an

explanation of what it means to update a case. To some professors, updating a case means

locating additional information about the case situation at the time the situation actually took

place. Thus, if a case situation took place in late 2003, updating that case would involve

gathering information that was published in 2003 or earlier. Using more recent information

sources can bias your strategy recommendations and conclusions. However, many professors

will prefer that you use recent sources of information to bring a case into the present day. We

personally do not recommend this approach because it usually changes the focus of the case.

What the organization did is not a key issue because there is no one right recommendation for

any case. Even if the company was successful with its subsequent strategy, it does not make that

strategy the only good option.

Finally, you are accustomed to the material in a textbook containing accurate information that

should be believed and remembered. However, in some cases, you will find statements of

opinion that are often biased by a person’s motives and position in a firm. The organization’s

CEO who has just recently given approval to the firm’s strategic plan might say, “This is an

excellent mission statement that will effectively direct our firm’s efforts for the next decade.” Is

this really true? It might be, but it will be up to you to determine what is fact as opposed to

someone’s opinion. Opinions will need to be assessed in your case analysis to determine their

accuracy.

Step 2: Assumptions and Missing Information

As with life, it is neither possible nor realistic for cases to contain all the information a decision

maker might wish to have available. Usually a decision maker has only bits and pieces of

information. He or she must either fill in the gaps, or make the decision that the information is

not critical, fairly predictable, or simply too costly and time-consuming to justify collecting for

the decision at hand. A marketing manager might want to know the history of competitive

reactions to price cuts by his firm. This information may be present in company files. It also

might be available from trade sources or other noncompetitive channel members.

Following the seven-step framework, in step two you will list important information not

contained in the case, why that information might be useful, and how you might go about

acquiring it. This is more than just a wish list. The items included here should considered

thoroughly. The list should contain pieces of information that would help shore up or fill gaps in

your SWOT analysis. Some of the materials may be available from secondary sources, such as

U.S. Department of Commerce reports, the Bureau of the Census, or trade publications such as

Sales & Marketing Management Magazine. Internal records will contain much of the needed

strength/weakness information, such as employee turnover or historical sales levels.

Some of the information that is not available can be addressed through assumptions. One might

assume that if information about the firm’s advertising budget were not available, it would be

equal to industry averages. The same assumptions might be made for other costs and revenues. It

is critical that these assumptions be realistic and clearly identified before and during the case

analysis. This list should contain only those items that will be truly useful in enhancing the

quality of the decisions made. It should not be a list of things that would be interesting to know.

The quality of your analysis will depend on your coverage of the framework, the depth of your

analysis, and the degree to which you can defend your recommendations.

Step 3: Statement of the Problem(s)

The identification and clear presentation of the problem(s) or issue(s) facing the company is the

most critical part of the analysis framework. Only a problem properly defined can be addressed.

Define the problem too narrowly, or miss the key problem all together, and all subsequent

framework steps will be off the mark. Getting a clear picture of the problem is one major benefit

derived from SWOT analysis.

The process of identifying problems is similar to the one people go through with their doctors. A

nurse or assistant comes in to conduct a strength and weakness assessment on you. Your vital

signs are taken and you are asked about any symptoms you may be experiencing. Symptoms are

observable manifestations or indications that a problem may be present. Symptoms are not the

problem themselves. If you have a temperature of 103 degrees, that is a symptom. If the medical

staff were to pack you in ice for several minutes, that reading would probably approach 98.6

degrees. Would that make you well? It might make your condition worse! The doctor uses the

information collected from you, with knowledge of the viruses and diseases that are present in

the external environment, to identify what has led to your high fever. The doctor will attempt to

diagnose the real problem, then prescribe treatment from a set of feasible alternatives (make

recommendations about what steps will help solve the problem) and provide you with a

prognosis (an indication of the things you can expect to occur as you are recovering).

The case analysis process is similar to the doctor’s analysis and treatment of a patient in several

basic ways. First, symptoms are the most observable indication that a problem exists. Many

students are very quick to start treating the symptoms found in a case, as opposed to digging

deeper to find the underlying problem(s). A symptom may be that sales are down from previous

periods. If this is how you define the problem, your answer might be to cut the price. This might

be an appropriate step, but not based on the analysis to this point. Sales might pick up, but will

this reaction make the company healthier? This is a clear case of prescription without adequate

diagnosis.

The most important question in the identification of any problem is “Why?” The Why question

should always be asked after a potential problem has been proposed. To illustrate, pinpointing

the problem associated with the sales decline in our previous example might progress like this:

The problem is that sales have declined.

Why have sales declined?

Sales have declined because there are too many sales territories that are not

assigned to a salesperson.

Why are so many sales territories unassigned?

Sales territories are unassigned because sales force turnover has

doubled in the past year.

Why has sales force turnover doubled?

Turnover began to increase over a year ago when

the sales force compensation plan was altered in

order to reduce variable expenses.

When you can no longer devise a meaningful response to the Why? question, you have probably

found the problem. In this instance, the problem statement might read:

The current sales force compensation plan at XYZ Company is inadequate to retain an

acceptable percentage of the firm’s salespeople, resulting in lost customers and decreased

sales.

The problem statement should be brief—almost always one or two sentences. It should be to the

point, and it should provide a clear indication as to what must be addressed to improve the

performance of the organization.

Given this problem statement, our first reaction, to work on the symptom of reduced sales by

cutting prices, would clearly not solve the problem. When we work on symptoms, the symptom

may go away, but the problem will always manifest itself again with the same symptom, or a

related one. Cutting prices would enhance sales, but would it be profitable? And, with an

understaffed sales force, could the firm serve customers at a level that would keep them

satisfied?

It is often said, and very true: a problem well defined is a problem half solved. This is certainly

the situation when performing case analyses.

Step 4: Development and Evaluation of Alternatives

Once we have the problem clearly and succinctly defined, we are in a position to develop a set of

strategic alternatives that have a reasonable potential to solve the problem. A key problem

students face in this step is that they generate a laundry list of a dozen fairly detail-oriented

items. These items have a lot more to do with the tactics of implementing a strategy than with

presenting alternative strategies from which we will make our selections. Going back to the sales

force example above, the list may include ideas such as:

• Take candidates through a more rigorous interview process • Lengthen the training program • Give every salesperson a company car • Offer both individual and regional bonuses • Increase company contribution to the retirement program for each year of employment • Conduct an employee-evaluation training program for the firm’s sales managers

While these may all be good ideas, they are not strategic alternatives. The term alternative

suggests an either/or situation. From the list above, you might include several items in your

recommendation section. Strategic alternatives should identify basic directions the firm might go

with the sales force support of its product.

One alternative is always the status quo. You must understand that this is not a means of

avoiding a decision. If recommended as the next step, it is a conscious decision, based on a

careful evaluation, that the present strategy in use, perhaps with some tactical modifications, is

the best course of action in the current situation.

Besides the status quo, you should use creative thinking to come up with several truly strategic

alternatives. For our present example, one option might be to eliminate the external sales force

and start using a manufacturer’s representative network to sell to the firm’s customers. Another

alternative would be to use direct marketing, with an inside sales force to market the product.

Another possible option is to reemphasize the sales force with a more effective sales

management program, including better selection, compensation, evaluation, and recognition of

the sales force.

Frequently, the underlying problem facing the organization is the failure to have a current,

widely used, well-developed marketing plan. If the analysis indicates this to be the case,

conducting a comprehensive strategic market planning process should be one of the alternatives

listed. This is one of the few options that might be selected in combination with some other

alternative.

Once you have developed a set of realistic alternatives, it is time to do a thorough evaluation of

each of the options. Three major criteria should be used in this evaluation process. First, how

well does the alternative address the problem or issue as stated in Step 3? Closely related to the

first criterion is the consistency of the alternative with the organization’s mission statement, as

well as its ability to assist in achieving the plan’s stated goals and objectives. These issues are

addressed in Chapter 2 of your textbook. Clearly, for an organization whose mission includes

providing the most innovative health care products to doctors, nurses, and patients, a low

cost/price competitive organization model would be inappropriate.

This does not mean alternatives that are not consistent with the present plan should never be

selected. It does indicate that part of the evaluation for such alternatives must address the

complete modification of the organization’s strategic plan. Likewise, an objective of increasing

profit margins from 15% to 25% is not consistent with the alternative of becoming a low-price

provider. The deletion, or at the very least modification, of this aspect of the plan must be

considered in evaluating this alternative.

For each alternative, you should make an effort to estimate and evaluate the cost and revenue

implications of the option. Probable income statements, under corresponding stated assumptions,

should be included for each alternative. Exhibit 1 provides an example of just such an

assessment. Costs are certainly easier to calculate than revenue projections, but an effort must be

made to do both. To conclude simply that developing a new innovative product line for the

organization, without any discussion of the costs and benefits involved, or in what year each is

likely to occur, is an incomplete and unrealistic approach to case analysis. You should use what

you have learned from your accounting and finance courses when you conduct case analyses.

Look at any financial information you are given in the case, or that you can acquire, as a key

resource in conducting your analysis.

<Insert Exhibit 1 Here (see end of file)>

The final criterion is an important one that relates to the feasibility and probable success of each

alternative: How well do the alternatives coincide with the key findings from the SWOT

Analysis you conducted in Step 1? In other words, how well does each alternative match up with

the internal and external environments of the organization? Does the organization have, or can it

realistically acquire, the human and financial resources required by each alternative? Building

additional capacity to increase volume as the low-price provider is probably not a reasonable

alternative for an organization in great financial difficulty. Conversely, for a firm with limited

history and investment in research and development, becoming the innovative leader in the

industry will not be possible in the near term.

The external environment, in terms of the economy, competition, regulation, and cultural trends,

will have a major impact on the pro forma revenue projections you make in this step. Any

alternative that adds pollution to the environment will not be well received today. Often,

alternative analyses assume the competition is an inanimate object. Thinking that competitors

will stand still while you steal their customers with a new marketing strategy is not at all

realistic. Part of the evaluation of alternatives, and making projections about their potential

success, is to use the assessment of the external environment to make assumptions about what

key competitors will do. You must remember that as one company is setting a course for the

future, most of its effective competitors are doing likewise.

Step 5: Recommendations

The recommendation step is the natural continuation of the alternative step. If step 4 is done

well, step 5 will be an easy transition. The alternative chosen (i.e., the recommendation) is the

one that stands up best in terms of all three criteria: consistency with mission, goals and

objectives as stated or as modified, strongest probable financial performance, and harmony with

the internal and external environments of the organization. With a thorough evaluation, the

recommended alternative should be a logical move. This does not mean that two alternatives will

never be close in terms of their attractiveness, but usually one will be a better match for the

organization as a whole.

One more note: Become accustomed to making recommendations in the face of unknown

economic or competitive conditions. While you will be able to know some things for certain

(such as gross domestic product or consumer spending), no one can possibly predict all future

events. As long as your evaluation is thorough, and your assumptions are clearly stated and

reasonable, your recommendations will be justified.

Step 6: Implementation

This step has historically been omitted from the strategic planning process. However, in modern

strategic planning, implementation has become so critical that we devoted all of Chapter 9 in

your textbook to its discussion. Implementation includes actions to be taken, the sequencing of

marketing activities, and a time frame for their completion. A timeline, like the one shown in

Exhibit 2, can be a very useful tool in directing the implementation discussion. Students are often

very optimistic in terms of the time needed to carry out certain tasks. However, small things, like

the development of a questionnaire and the collection and analysis of data, can take several

weeks, if not months. Be careful to provide reasonable amounts of time for each step.

<Insert Exhibit 2 Here (see end of file)>

It is frequently noted that Americans are great innovators, while the Japanese are great

implementers. In U.S. organizations, the selection of the alternative to be pursued is often made

on a majority-rules basis. If ten people are on the decision-making team, and six speak in favor

of introducing a new product line and four speak against it, a decision to introduce the new line

is the likely result. Under this system, six people leave the room with their reputation on the line

to make the decision work, but what about the other four? Will they be committed to the project?

This can cause serious problems in implementing the selected alternative. Contrast this process

with the traditional decision-making process in Japanese organizations, where an alternative is

not chosen until everyone agrees that it is the appropriate course of action. The selection process

is much more time consuming, and often requires compromises that can make the selected

alternative less distinctive. On the plus side, everyone leaves the process agreeing that the

selected course of action is best. With everyone working together, implementation becomes a

much easier process.

This aspect of the decision-making process makes internal marketing a critical issue that you

must address in your discussion of the implementation phase. Who will be the critical players in

carrying out the plan? Are they likely to be naturally in favor of the selected alternative? What

can be done to get them on board? Giving more people, particularly frontline personnel, more

input during the decision-making process will be a plus here. Top-down planning often creates

resistance in the implementation phase. Part of the problem with some strategic plans is that the

frontline employees, those people who are most likely to come in contact with suppliers and

customers, feel that the plan “handed down” is not realistic given what they know about the day-

to-day working environment. They may feel that management is out of touch. Getting their input

early and late in the planning process can go a long way toward easing the implementation of the

selected alternative.

In all instances, it is very difficult for employees to market the firm and its products as planned

until the plan has been marketed to them. Internal marketing plays a major role in determining

the success of the plan. If employees can be shown they will get things they value by helping the

firm carry out this plan, the process has an excellent chance for success. Many managers feel that

they would rather have a mediocre plan vigorously implemented, than an excellent plan

implemented in a mediocre fashion.

Step 7: Evaluation and Control

As the firm is implementing the selected alternative, it must constantly monitor the results

achieved. What do you expect this chosen alternative to accomplish, and by when? This is a

major concern, as the firm must determine if the selected strategy is working as anticipated.

Clear objectives must be set. A 20% increase in awareness and a 10% increase in sales within six

months are possible examples of the benchmarks that might be used to determine if the selected

alternative is on course.

If objectives are not being met by the targeted dates, a tough decision must be made. Is it a

poorly devised strategy, poor implementation, or an unfavorable environment that is leading to

these results? The answer to this question will dictate how the organization will respond. As we

said earlier, planning cannot assume an inanimate set of competitors. If your recommendation is

to cut price and expand distribution, can you reasonably assume that competitors will do nothing

and let you take their business away without a fight? This is seldom the case. The competitive

situation will almost always change, sometimes significantly. Other external environmental

factors, such as the economy or technology, may also not remain constant or turn out as planned.

Such changes that result in outcomes that do not meet expectations point to the need for the

development of contingency plans. Contingency plans are not centered on the most preferred

alternative under the present conditions, but are a “fall-back” position in case things do not work

out as planned for the selected alternative. For example, more expensive, upscale products might

have been recommended for the firm. If the competition slashes prices at the same time the

economy weakens, the firm might need to respond by implementing a contingency plan. To

blindly carry out a strategy that no longer matches the environment is an almost certain route to

failure. In this instance, a contingency plan of heavy sales promotion might need to be

implemented. Firms can try to predict what future environments will be like, but they cannot

guarantee the future external environment with much certainty.

End your Report with a strong Conclusion/Summary Paragraph(s)

What feeling, impression, and action do you want the audience to have after reading your report?

You want to reiterate your main persuasive points that will naturally lead your audience to

accept your recommendation.

Exhibit 1

Hypothetical Pro Forma Assessment

Unfavorable

Environment

Neutral

Environment

Favorable

Environment

Sales

Dollars $2,000,000 $3,500,000 $7,000,000

Units ($5 per unit) 400,000 750,000 1,400,000

Costs

Product development $250,000 $250,000 $250,000

Production costs $1,200,000

($3 per unit)

$2,062,500

($2.75 per unit)

$3,500,000

($2.50 per unit)

Advertising $300,000 $300,000 $300,000

Sales commission (10%) $200,000 $350,000 $700,000

Other selling expenses $10,000 $135,000 $200,000

Earnings before taxes $ -50,000 $402,500 $2,050,000

Exhibit 2

A Hypothetical Implementation Timeline

Weeks

1

2

3

4

5

6

7

8

9

10

Conduct customer surveys

Collect media information

Analyze data and present results

Develop point-of-purchase

materials

Develop sales force training

program

Conduct sales force training

program

Develop and send promotional

materials to dealers

Roll out program in selected

regions with both personal and

mass promotion