2.1 Introduction

In the previous chapter, you were introduced to strategic management as an area of practice in businesses and as a field of study. This chapter introduces you to case analysis. After an explanation of how some essential terms are used in the book, you then learn what is involved in conducting a case analysis—both full and abbreviated versions.

2.2 Case and Case Analysis

First, it is important to understand how the terms case and case analysis are used in the textbook.

Case

Imagine you are asked to read a case about a real company and that case contains real information about what the firm has faced. This may be a case from a well-known publisher, such as a Harvard Business case, or it could be an open-source case (free to you). You may even be asked to read a case about a hypothetical company that uses realistic but hypothetical data about the business. Hypothetical cases are sometimes used to illustrate especially sensitive areas of business that a real company would hesitate to disclose. Both real and hypothetical cases are written cases, which means they can cover only a limited timeframe. Some of the case data may be written as a narrative about the company, and other data may be presented as quantitative or qualitative data in tables, charts, and graphs, for example. Perhaps you have read cases like these during your business education so far.

Therefore, in the context of strategic management, cases are written scenarios about companies, such as Harvard Business cases or open-source cases, that present real business issues faced by firms. Sometimes they contain real facts about real companies, while other times, cases are written scenarios about a hypothetical company that uses realistic but hypothetical data.

Whether about real or hypothetical companies, cases are usually limited in the timeframe they cover. Cases often focus on a narrow range of company information to support students seeking in-depth understanding of an area of strategic management.

Case Analysis

Engaging in experiential learning by applying strategic management concepts and theories and analytical frameworks and tools to cases is an excellent way for you to learn “by doing.” Early in learning about strategic management, you may apply one concept and one analytical framework to a case. For example, you may apply what you learn about a firm’s external environment using a PESTEL framework (which you will learn more about in Chapter 4) to information about a real company. As your learning progresses, you may be asked to apply more of what you know about strategic management using multiple analytical frameworks.

Therefore, in strategic management, case analysis is a broad term used to encompass multiple possible approaches to conducting a strategic management review of a company. A case analysis is a thorough and methodical analysis, interpretation, and evaluation of a case or company.

There are two important things to notice about the term case analysis. The first is the use of the word case. As you have just seen, a case is a written scenario about a real or hypothetical company. In case analysis, a case can be a written scenario about a real or hypothetical company. If the case uses current real data about a real company, you can obtain this data in one of two ways. You can conduct research about a real company in the form of a desk review, meaning you do not meet with the leaders of the company. You gather data from sources to conduct a case analysis in this instance. The other option would be to provide consulting services to a real company, both collecting data about the company and using data the leaders of a company provide you to conduct the case analysis.

The second important thing to notice about case analysis is the use of the word analysis. Though the term case analysis only mentions analysis, the process of analysis includes three steps: analysis, interpretation, and evaluation. Analysis, interpretation, and evaluation are reviewed in detail below.

You can see that case analysis is an umbrella term that means applying strategic management concepts and theories and analytical frameworks and tools to analyze, interpret, and evaluate company information provided in a written scenario that uses real or hypothetical data about a company; case analysis can also be carried out in researching a company or working directly with a company through a consultancy project.

Case analysis is used as a pedagogical tool in strategic management because it requires you to step into the shoes of strategic leaders and managers and see the company from their perspective. By conducting case analysis, you strategically analyze a firm’s organizational performance and its external and internal environments. Then, by analyzing strategies, you learn how strategic leaders and managers formulate strategy. Finally, you consider strategy implementation by using the tools of strategic leaders and managers to assess the success of implemented strategies.

2.3 Data, Analysis, Interpretation, and Evaluation

Each of these ideas—data, analysis, interpretation, and evaluation—is considered in turn to add conceptual clarity to the process of conducting a thorough case analysis. In practice, the distinctions between each idea may be less delineated, combining with and informing each other.

The first important term is data.

Data

Data is the information in the case being reviewed, the company being researched, or the company receiving consulting services. For example, data may include information such as whether a company is a domestic or multinational firm, what industry, market, and market segments in which the business operates, whose its major competitors are, and whether the company follows a centralized or decentralized management style, to name just a few.

Analysis

Analysis is the process and result of examining all the data available for the firm and identifying and classifying all the data for each category in a strategic management tool. Many cases contain a lot of data, and your task when conducting a case analysis is to sift through a large volume of data to determine which of the data is important and which data is to be placed into which strategic management tool. This requires a thorough understanding of the case and the strategic management framework you are applying.

For example, the PESTEL framework is one of the strategic management frameworks you use to analyze a company’s external environment. The first and broadest level of a firm’s external environment is the general environment, which consists of the societal events and trends that impact all firms in an industry including political, economic, sociocultural, technological, environmental, and legal factors. You will learn about a firm’s external environment and how to analyze it in Chapter 4. Imagine that you analyze a firm’s external environment and identify a growing consumer preference for healthier food options that impacts the sales of the company’s product. You also notice that phone app sales are increasing among customers over thirty-five. You then place both of these observations in a PESTEL strategic management tool, identifying the growing consumer preference for healthier food options as a sociocultural factor and phone app sales increasing among customers over thirty-five as a technological factor.

To conduct an analysis of the data, follow these steps:

Step 4

• Complete the analysis section of a strategic management instrument.

Analyzing data is different than placing data from the company in the strategic management instrument. Analysis requires critical thinking and a thorough knowledge of the company that can only come from reading the case or company research multiple times.

So far, analyzing the data in the case has produced a large quantity of information by examining, identifying, and classifying all the data about the company. After analyzing an aspect of a firm using a strategic management framework (such as analyzing the general external environment using the PESTEL tool), you can narrow the focus by considering why the situation is occurring and its meaning for the company. Interpretation and evaluation begin to narrow the focus.

Interpretation

Once you have analyzed the data, it is possible to interpret the analysis.

Once you have analyzed the case, you now review your analysis. Interpretation is the process and result of examining the analysis to identify and explain relationships in the analysis as well as underlying root causes of the situation.

For example, when you review your analysis, you notice that food and drink sales are stronger on phone apps than those placed in the drive-through. When you examine the analysis in more detail, you notice that phone app sales are increasing among customers over thirty-five. When you consider this analysis along with a growing consumer preference for healthier food options, you may see a correlation between customers preferring healthier food that they can purchase on an app.

You should also consider which aspects of your analysis relate to each other and in what ways. When you consider the root causes of the increase in phone app usage in customers over thirty-five, you may find the underlying cause of this trend is that, for those over thirty-five, adoption of phone apps to order food requires a change in behavior, whereas those under thirty-five have been using phone apps for most purchases throughout their buying years. Changes in behavior always take more time.

Interpretation is not found in the case or company research. Interpretation is the process and result of applying critical thinking to the analysis conducted so far.

Interpret the analysis of the data by following these steps:

Step 4

• Complete the interpretation section of a strategic management instrument.

Interpretation requires discernment and judgment. Answer the questions and complete the steps above that are relevant to the firm and the strategic management tool. It is not realistic or productive to answer every question and complete every step for each element of your analysis. The goal of interpretation is to begin to narrow the focus of your analysis of all the data on the company to that which is most important.

Evaluation

Once you have interpreted the analysis, the next step is to evaluate the information produced from the analysis and interpretation. Evaluation continues to narrow the focus of your analysis.

Evaluation is the process and result of examining the analysis and interpretation to identify and explain the meaning of the information to the company by considering its impact, relevance, and importance to the company and by identifying the company’s current, potential, or needed assets, organizational capacity, and managerial ability that may support or mitigate the areas of highest impact, relevance, and importance for the firm.

In considering the interpretation you have conducted so far, you decide that because your primary target market segment is those 18–25 years old, the trend of increased usage of phone apps in those over thirty-five is likely to impact the business less, making the trend less relevant and important to this company. You also determine that knowing that the drive-through is used less frequently for ordering is important for the company because up to now it has made location decisions based on the need for a drive-though. This may be relevant and important to the company, potentially having a significant impact on its future expansion decisions. To consider a change in expansion strategy, the organization needs resources in marketing research, capitol assessment, and technology development (including cybersecurity), to name just a few.

Like interpretation, evaluation is not found in the case or company research. Evaluation is the process and result of applying critical thinking to the analysis and interpretation conducted so far.

Follow these steps to evaluate the analysis and interpretation:

• Identify the company’s current, potential, or needed assets, organizational capacity, and managerial ability that may support or mitigate the areas of highest impact, relevance, and importance for the firm.
• Questions to ask:
  • What are the company’s current, potential, or needed assets, that may support or mitigate the areas of highest impact, relevance, and importance for the firm?
  • What is the company’s organizational capacity that may support or mitigate the areas of highest impact, relevance, and importance for the firm?
  • What managerial ability does the company possess that may support or mitigate the areas of highest impact, relevance, and importance for the firm?

Step 6

• Complete the evaluation section of a strategic management instrument.

Like interpretation, evaluation requires discernment and judgment. Answer the questions and complete the steps that are relevant to the firm and the strategic management tool. The goal of evaluation is to continue to narrow the focus of your analysis of all the data on the company to that which is most important.

2.4 Line of Sight and Congruence

Strategic analysis requires that steps in the process have a direct and clear line of sight and strong congruence. The ideas of line of sight and congruence are similar yet distinct.

When thinking about analysis, interpretation, and evaluation through the lens of strategic analysis, confirm line of sight and congruence from three perspectives.

1. Within a strategic management tool, from analysis to interpretation to evaluation
2. Among strategic management frameworks
3. Across the entire case analysis

Line of Sight

Line of sight means there is a direct, unobstructed line between an observer and the object being observed. Imagine you are attending a match of your favorite women’s tennis team, perhaps your university’s team. Your seat is slightly raised from the seats in front of you, giving you an unobstructed view of your team winning. You have a clear and direct line of sight to players and the game. In strategic analysis, and in business generally, line of sight is used metaphorically to refer to a direct and clear logic connecting two or more concepts or ideas. In strategic analysis, you identify and state specifically what that line of sight is.

Investigate the questions below to identify and explain a direct and clear logic connecting two or more concepts or ideas.

• Is there a direct and clear logic connecting two or more ideas within an element of a strategic management tool during analysis, interpretation, or evaluation?
  • For example, when you consider a firm’s external environment, you can use a PESTEL framework as a tool, which considers sociocultural factors, among others. Imagine you identify two sociocultural factors in your PESTEL analysis. One is a growing consumer preference for healthier food options and another is a shift in demographics, with more Muslims and Hindus living in the area. Ask yourself if there is a connection here. Identifying a line of sight between these two sociocultural factors may lead you to a connection between not only healthier food options but also anticipating a growing demand for halal, vegan, and vegetarian menu items.
• Is there a direct and clear logic connecting two or more ideas between elements of a strategic management tool?
  • For example, consider that you identify in your PESTEL analysis a shift in demographics with more Muslims and Hindus living in the area as a sociocultural factor and stronger food and drink sales on phone apps than those placed in the drive-through as a technological factor. Can you see a relationship between these? By identifying a line of sight between the sociocultural and technological factors, you may identify the need not only to offer more non-alcoholic drinks but also to show more images on your phone app for mango lassis, which may appeal to a broad audience.
• Is there a direct and clear logic connecting two or more concepts or ideas among strategic management frameworks?
  • For example, you use a PESTEL framework to analyze a firm’s external environment and a VRIO framework for its internal environment (more on each of these in later chapters). Imagine that in your internal analysis of the business, you identify partnerships with organic and regenerative suppliers as a strategic resource. What lines of sight can you trace between your internal and external analyses? Perhaps you see a connection between organic and regenerative suppliers and a growing consumer preference for healthier food options. You recognize that here may not necessarily be a 100 percent overlap in these two elements of your analysis. After all, classic Oreos are vegan. You further understand that many consumers who are interested in healthier food seek out organic and regenerative food options. Drawing this line of sight across different strategic management frameworks may support the business in considering foregrounding its organic and regenerative products in its marketing, expanding its organic and regenerative options, or even acquiring a supplier.
• Is there a direct and clear logic connecting two or more concepts or ideas across the entire case analysis?
  • When you finish your entire case analysis, you consider all of your analysis, interpretation, and evaluation, looking for as many lines of sight as possible, just as you searched within and among strategic management tools. This time, you consider the whole case analysis. The more connections and lines of sight you identify, the more robust your case analysis.

Congruence

The concept of congruence also is important to case analysis.

Congruence means there is a one-to-one relationship or agreement between two or more things. There is harmony or compatibility between two things that are congruent. The two things do not necessarily have to be identical and in most cases are not exactly alike. Imagine you and your friend share similar taste is music. You both love a particular genre and like many of the same songs. However, you also dislike some of the songs your friend likes. Because your taste is compatible and you like more of the same songs as your friend than you dislike, your taste in music is congruent. In case analysis, congruence means there is a one-to-one agreement or reconciliation between steps in the case analysis process or across an entire case analysis. All the main elements are compatible. Congruence is more relevant for some phases of case analysis.

Ensure there is robust congruence by considering the following steps.

Step 1

• Identify and explain how everything that is relevant in one aspect of the case analysis is also included in another aspect of the case analysis.
• Questions to ask:
  • Among specific steps in the case analysis, is everything that is relevant in one step of the case analysis also included in another step of the case analysis?
    • For example, as you learn in section 2.6, the case analysis process includes multiple steps such as analyze a firm’s organizational performance, external environment, and internal environment. Then you synthesize this analysis by conducting a SWOT (strengths, weaknesses, opportunities, and threats) analysis. It is important that all essential details that are relevant from the analysis of the firm’s organizational performance, external environment, and internal environment are also present in the SWOT analysis.
  • Across the entire case analysis, is everything that is relevant in one step of the case analysis also included in another step of the case analysis?
    • For example, as you also learn in section 2.6, the case analysis process consists of thirteen steps. Now ensure everything that is relevant in one step in the case analysis process is carried through and is present in all the steps in the entire case analysis. Step one focuses on ensuring all essential details are included among steps in the case analysis and across the entire case analysis.

Step 2

• Identify and explain how nothing that is relevant in one aspect of the case analysis is absent from another aspect of the case analysis.
• Prompts to consider:
  • Among specific steps in the case analysis, ensure nothing relevant in one step of the case analysis is absent from another step of the case analysis.
    • For example, ensure nothing that is relevant from the analysis of a firm’s organizational performance, external environment, and the internal environment is omitted in the SWOT analysis.
  • Across the entire case analysis, ensure nothing relevant in one step of the case analysis is absent from another step of the case.
    • For example, now ensure nothing that is relevant in one step in the case analysis is omitted in another step in the case analysis. Review the entire case analysis to confirm each essential detail is carried through across all the steps in the entire case analysis process. Step two focuses on confirming that no essential details are omitted among steps in the case analysis and across the entire case analysis. As you conduct case analyses, what information is relevant to be included in each step of the case analysis and what information in important to be present across the entire case analysis will become clear.

You ensure congruence, which is a one-to-one reconciliation among and across all steps in the case analysis process, by making sure everything that is essential is included and nothing essential is omitted among and across all steps in the case analysis.

As you have just learned, line of sight and congruence are similar and distinct. You often assess both together in case analysis, and the difference can be a matter of emphasis. Line of sight focuses primarily on a direct and clear logic between ideas, and congruence focuses primarily on agreement, compatibility, and harmony between ideas. As you learn in section 2.6, the final step in the case analysis process is presenting the case analysis. This is not a description or summary of all the preceding steps. This is a rich and robust narrative that presents the analysis, conclusions, and suggestions for future actions. The presentation needs to be logical and have a clear line of sight between all aspects of the case analysis. This ensures a rational, cohesive presentation. Ensuring congruence in the case analysis means the conclusions and recommendations are based on the analysis and the presentation does not suddenly introduce new and unexpected information that has not been previously supported by the analysis. It also ensures no essential information is omitted. Often in case analysis, when line of sight is strong, congruence is also robust, but this is not always the case. It is possible that either line of sight or congruence may be strong and the other weak. That is why it is important to understand how these ideas are related and different.

Now that you understand line of sight and congruence and have a clear conception of data, analysis, interpretation, evaluation, and how they relate, it is now possible to conduct case analysis.

2.5 Case Analysis Process

Chapter 1 introduced you to the subject of strategic management. In this chapter, you learn how to apply strategic management concepts, and analytical frameworks in conducting a case analysis.

Business is fundamentally a profession of doing, of action. To be successful, that action needs to be grounded in knowledge and evidenced-based decisions. To be industry leading, it needs to reflect inspiration, creativity, and insight.

Business is full of multiple dynamic tensions, and as an area of business, strategic management reflects many of these tensions. Strategic management embodies tensions between planning methodically and capitalizing on unexpected opportunities; between making decisions based on evidence and analytics or based on creativity and insight; between focusing on important details and seeing the bigger picture.

When conducting a case analysis, you use all of your capabilities, some of which are your preferred ways of operating and some that may challenge you. For example, though a successful career and life require the ability to consider both minute details and the big picture, most will naturally prefer one or the other, perhaps showing more skill with one.

In light of this potential difference in skills across expertise, strategic management and its application through case analysis is most often the focus of diverse and cross-functional teams. Such a team offers the advantage of a diverse range of topic expertise, such as accounting, business information technology and cybersecurity, finance, insurance and business law, human resource management, and marketing. It also utilizes a diverse range of talents and capabilities, ensuring, for example, that the team can focus on details and the big picture.

Case analysis starts with the objective data mining of company data and becomes more subjective as the process progresses through analysis, interpretation, and evaluation. A structured case analysis process incorporates both a micro, detail-oriented focus and a macro, big-picture orientation that considers the entire situation facing a firm.

Case analysis is central to strategic management. Conducting a case analysis follows a structured process. This requires a methodical approach that relies on a solid cross-functional understanding of business, thorough knowledge of the company, critical thinking, insight, judgment, intuition, and creativity.

First consider all the data in a company, and then gradually narrow the focus. Thoroughly analyze all the data available about the firm. Interpret and evaluate the information that is relevant and useful.

Because the ideas and process build upon each other, the early stages of conducting a case analysis require you ti sequentially analyze the data, interpret the analysis, and evaluate the information produced so far through analysis and interpretation. As the review of a firm progresses, return to previous stages and consider the other ideas as well.

2.6 Case Analysis Steps

Utilize the following process to conduct a case analysis that follows a structured process. There are multiple steps, and conducting a case analysis in order is important. The overview presented here can be used as a reference as you conduct case analyses throughout the course. The following chapters discuss each step and the frameworks involved in detail.

2.7 Abbreviated Case Analysis Steps

When learning case analysis, students often conduct an abbreviated case analysis for their first case analysis. An abbreviated case analysis differs from the longer and more thorough case analysis detailed in section 2.6 by omitting the following steps: (5) As appropriate to the case, analyze strategies: corporate-level, business-level, innovation, sustainability and ethics, technology, and multinational strategies; (9) Evaluate strategic alternatives; and (11) Design implementation plan.

Utilize the following process to conduct an abbreviated case analysis that follows a structured process.

Within the practical constraints of a university term, students are often asked to conduct a second, more thorough case analysis that includes the same information as an abbreviated case analysis with a few additional elements.