STRATEGIC MANAGEMENT CASE

A strategic-management case describes an organization’s external and internal conditions and raises
issues concerning the firm’s mission, strategies, objectives, and policies.

• What are the firm’s most important external opportunities and threats?

• What are the organization’s major strengths and weaknesses?

• How would you describe the organization’s financial condition?

• What are the firm’s existing strategies and objectives?

• Who are the firm’s competitors, and what are their strategies?

• What objectives and strategies do you recommend for this organization? Explain your reasoning.
How does what you recommend compare to what the company plans?

• How could the organization best implement what you recommend? What implementation
problems do you envision? How could the firm avoid or solve those problems?

The Executive Summary

Focus the written case analysis on a particular aspect of the strategic-management process, such as (1)
to identify and evaluate the organization’s existing mission, objectives, and strategies; or (2) to propose
and defend specific recommendations for the company; or (3) to develop an industry analysis by
describing the competitors, products, selling techniques, and market conditions in a given industry.
These types of written reports are sometimes called executive summaries. An executive summary
usually ranges from three to five pages of text in length, plus exhibits.

The Comprehensive Written Analysis

It requires you to apply the entire strategic-management process to the particular organization. When
preparing a comprehensive written analysis, picture yourself as a consultant who has been asked by a
company to conduct a study of its external and internal environment and to make specific
recommendations for its future

Steps in Preparing a Comprehensive Written Analysis

Step 1 Identify the firm’s existing vision, mission, objectives, and strategies.

Step 2 Develop vision and mission statements for the organization.

Step 4 Construct a Competitive Profile Matrix (CPM).

Step 5 Construct an External Factor Evaluation (EFE) Matrix.

Step 6 Identify the organization’s internal strengths and weaknesses.

Step 7 Construct an Internal Factor Evaluation (IFE) Matrix.

Step 8 Prepare a Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, Strategic Position and

Step 9 Recommend specific strategies and long-term objectives. Show how much your
recommendations will cost. Clearly itemize these costs for each projected year. Compare your
recommendations to actual strategies planned by the company.

Step 10 Specify how your recommendations can be implemented and what results you can expect.
Prepare forecasted ratios and projected financial statements.

Present a timetable or agenda for action.

Step 11 Recommend specific annual objectives and policies.

Step 12 Recommend procedures for strategy review and evaluation.

Generally, detailed analysis of a case study should include eight areas:

1. The history, development, and growth of the company over time

2. The identification of the company’s internal strengths and weaknesses

3. The nature of the external environment surrounding the company

4. A SWOT analysis

5. The kind of corporate-level strategy that the company is pursuing

6. The nature of the company’s business-level strategy

7. The company’s structure and control systems and how they match its strategy

8. Recommendations

1. Analyze the company’s history, development, and growth. A convenient way to

investigate how a company’s past strategy and structure affect it in the present is

to chart the critical incidents in its history—that is, the events that were the most

unusual or the most essential for its development into the company it is today.
Some of the events have to do with its founding, its initial products, how it makes

new-product market decisions, and how it developed and chose functional competencies to pursue. Its
entry into new businesses and shifts in its main lines of

business are also important milestones to consider.

2. Identify the company’s internal strengths and weaknesses. Once the historical profile is completed,
you can begin the SWOT analysis. Use all the incidents you have

charted to develop an account of the company’s strengths and weaknesses as they

have emerged historically. Examine each of the value creation functions of

the company, and identify the functions in which the company is currently

strong and currently weak. Some companies might be weak in marketing; some

might be strong in research and development. Make lists of these strengths and

weaknesses. The SWOT Checklist (Table 1) gives examples of what might go in

these lists.

3. Analyze the external environment. To identify environmental opportunities and

threats, apply all the concepts from Chapter 2 on industry and macroenvironments to analyze the
environment the company is confronting. Of particular

importance at the industry level are Porter’s five forces model and the stage of the

life cycle model. Which factors in the macroenvironment will appear salient

depends on the specific company being analyzed. Use each factor in turn (for

instance, demographic factors) to see whether it is relevant for the company

in question.

Having done this analysis, you will have generated both an analysis of the

company’s environment and a list of opportunities and threats. The SWOT

Checklist table also lists some common environmental opportunities and threats

that you may look for, but the list you generate will be specific to your company.

4. Evaluate the SWOT analysis. Having identified the company’s external opportunities and threats as
well as its internal strengths and weaknesses, consider what

your findings mean. You need to balance strengths and weaknesses against opportunities and threats. Is
the company in an overall strong competitive position?

Can it continue to pursue its current business- or corporate-level strategy profitably? What can the
company do to turn weaknesses into strengths and threats
into opportunities? Can it develop new functional, business, or corporate strategies to accomplish this
change? Never merely generate the SWOT analysis and then

put it aside. Because it provides a succinct summary of the company’s condition,

a good SWOT analysis is the key to all the analyses that follow. Chapters 3 and 4

provide a wealth of material that can be used to guide your thinking here.

5. Analyze corporate-level strategy. To analyze corporate-level strategy, you first need

to define the company’s mission and goals. Sometimes the mission and goals are stated explicitly in the
case; at other times, you will have to infer them from available information. The information you need
to collect to find out the company’s

corporate strategy includes such factors as its lines of business and the nature of

its subsidiaries and acquisitions. It is important to analyze the relationship among

the company’s businesses. Do they trade or exchange resources? Are there gains to

be achieved from synergy? Alternatively, is the company just running a portfolio

of investments? This analysis should enable you to define the corporate strategy

that the company is pursuing (for example, related or unrelated diversification, or

a combination of both) and to conclude whether the company operates in just

one core business. Then, using your SWOT analysis, debate the merits of this strategy. Is it appropriate
given the environment the company is in? Could a

change in corporate strategy provide the company with new opportunities or

transform a weakness into a strength? For example, should the company diversify

from its core business into new businesses?

Other issues should be considered as well. How and why has the company’s

strategy changed over time? What is the claimed rationale for any changes? Often,

it is a good idea to analyze the company’s businesses or products to assess its situation and identify
which divisions contribute the most to or detract from its

competitive advantage. It is also useful to explore how the company has built its

portfolio over time. Did it acquire new businesses, or did it internally venture its

own? All of these factors provide clues about the company and indicate ways of

improving its future performance.

6. Analyze business-level strategy. Once you know the company’s corporate-level

business-level strategy is identical to its corporate-level strategy. If the company is

in many businesses, each business will have its own business-level strategy. You

will need to identify the company’s generic competitive strategy—differentiation,

low cost, or focus—and its investment strategy, given its relative competitive position and the stage of
the life cycle. The company also may market different products using different business-level strategies.
For example, it may offer a low-cost

product range and a line of differentiated products. Be sure to give a full account

of a company’s business-level strategy to show how it competes.

Identifying the functional strategies that a company pursues to build competitive advantage through
superior efficiency, quality, innovation, and customer

responsiveness and to achieve its business-level strategy is very important. The

SWOT analysis will have provided you with information on the company’s functional competencies. You
should investigate its production, marketing, or

research and development strategy further to gain a picture of where the company is going. For
example, pursuinga low-cost or a differentiation strategy successfully requires very different sets of
competencies. Has the company developed

the right ones? If it has, how can it exploit them further? Can it pursue both a lowcost and a
differentiation strategy simultaneously?

The SWOT analysis is especially important at this point if the industry analysis, particularly Porter’s
model, has revealed threats to the company from the

environment. Can the company deal with these threats? How should it change its

business-level strategy to counter them? To evaluate the potential of a company’s

business-level strategy, you must first perform a thorough SWOT analysis that

captures the essence of its problems.

Once you complete this analysis, you will have a full picture of the way the

company is operating and be in a position to evaluate the potential of its strategy.

Thus, you will be able to make recommendations concerning the pattern of its

future actions. However, first you need to consider strategy implementation, or

the way the company tries to achieve its strategy.

7. Analyze structure and control systems. The aim of this analysis is to identify what
structure and control systems the company is using to implement its strategy and

to evaluate whether that structure is the appropriate one for the company. As we

discuss in Chapters 12 and 13, different corporate and business strategies require strategy. Is it
appropriate given the environment the company is in? Could a

change in corporate strategy provide the company with new opportunities or

transform a weakness into a strength? For example, should the company diversify

from its core business into new businesses?

Other issues should be considered as well. How and why has the company’s

strategy changed over time? What is the claimed rationale for any changes? Often,

it is a good idea to analyze the company’s businesses or products to assess its situation and identify
which divisions contribute the most to or detract from its

competitive advantage. It is also useful to explore how the company has built its

portfolio over time. Did it acquire new businesses, or did it internally venture its

own? All of these factors provide clues about the company and indicate ways of

improving its future performance.

6. Analyze business-level strategy. Once you know the company’s corporate-level

strategy and have done the SWOT analysis, the next step is to identify the company’s business-level
strategy. If the company is a single-business company, its

business-level strategy is identical to its corporate-level strategy. If the company is

in many businesses, each business will have its own business-level strategy. You

will need to identify the company’s generic competitive strategy—differentiation,

low cost, or focus—and its investment strategy, given its relative competitive position and the stage of
the life cycle. The company also may market different products using different business-level strategies.
For example, it may offer a low-cost

product range and a line of differentiated products. Be sure to give a full account

of a company’s business-level strategy to show how it competes.

Identifying the functional strategies that a company pursues to build competitive advantage through
superior efficiency, quality, innovation, and customer

responsiveness and to achieve its business-level strategy is very important. The

SWOT analysis will have provided you with information on the company’s functional competencies. You
should investigate its production, marketing, or
research and development strategy further to gain a picture of where the company is going. For
example, pursuinga low-cost or a differentiation strategy successfully requires very different sets of
competencies. Has the company developed

the right ones? If it has, how can it exploit them further? Can it pursue both a lowcost and a
differentiation strategy simultaneously?

The SWOT analysis is especially important at this point if the industry analysis, particularly Porter’s
model, has revealed threats to the company from the

environment. Can the company deal with these threats? How should it change its

business-level strategy to counter them? To evaluate the potential of a company’s

business-level strategy, you must first perform a thorough SWOT analysis that

captures the essence of its problems.

Once you complete this analysis, you will have a full picture of the way the

company is operating and be in a position to evaluate the potential of its strategy.

Thus, you will be able to make recommendations concerning the pattern of its

future actions. However, first you need to consider strategy implementation, or

the way the company tries to achieve its strategy.

7. Analyze structure and control systems. The aim of this analysis is to identify what

structure and control systems the company is using to implement its strategy and

to evaluate whether that structure is the appropriate one for the company. As we

discuss in Chapters 12 and 13, different corporate and business strategies require