Strategic Marketing

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Strategic Marketing

• MBA Program

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WAC

• Written Case Analysis
• March 2009

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Prepared By

• Aly Raza Syed
• Resource Person
• Marketing Strategy

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Case Analysis

• Approaches to attack a case study and its
  components

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Analyzing A Case Study.

• Whenever you analyze a case, remember that you
  are not an outsider, but a part of the management
  around whom the case is being presented.
• Remember to undergo a through analysis, so that
  you can convince the reader that your analysis is
  backed with sound arguments and supported by
  concrete solutions.

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• Remember there might not be just 1 right answer
  to the case but several options of feasible
  strategies available.
• As there is no one single solution to the case,
  similarly there is no single way to prepare the
  case.

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General Guideline

• Step 1 Skim the case and breeze through it. Skim
  it for the 1st time
• Ask yourself questions like
• What sort of organization does the case concern,
  the nature of the industry in which it is
  operating, External Environment, managements
  problems.
• Step 2 Carefully read the case the 2nd time and
  start making notes.
• Seek to identify the key problem facts, such as
  what decision are to be made, who is going to
  make these decisions, objectives of the
  organization and each key player.
• What are the resources constraints in the case.
  Make sure to use the quantitative data as well

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Reading The Case

• There will be a lot of information overload in
  some cases, irrelevant information, too little
  information or ambiguous information or relevant
  information dispersed throughout the case.
• Dont get worried but try to make the best of it.

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What to Do in a Case Study?

• In the case study it is required by you to
  logically attack the case study.
• Identify the alternative course of action that
  the management might take.
• List the Pros and Cons of each alternative.
• Always keep in mind the objectives of the
  organization.
• Develop short term tactics for long term
  strategies and give a comprehensive
  implementation plan of the desired strategy.

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What is Required?

• In a case you students will be identifying and
  clarifying problems/ opportunities being faced by
  the management of a company.
• Analyze the qualitative information and
  quantitative data.

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Steps To Case Analysis.

• All to gather the case study includes various
  steps.
• In some cases you will not have information
  regarding some of the steps.
• Your objective is to use whatever information is
  given, to the best of your abilities.
• The following are the Steps that are commonly
  used in a case study.

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STEPS TO SOLVE A CASE

• Introduction
• Situation Analysis
• Identification of Problems
• Main Problem
• Sub Problem
• Development of Alternatives
• Evaluation of Alternatives
• Selection of the Best Alternative
• Implementation plan
• Recommendations.

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1 INTRODUCTION

• In the introduction you will give a short
  synopsis of the case.
• Inform the reader what industry does the company
  belongs, what the time of the case, who are the
  key players, what issue is at hand.
• Remember not to reveal any hard facts in the
  introduction part as they have to be utilized in
  the upcoming steps.
• Usually an introduction would include the
  following

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Introduction

• Time of case
• Industry of operations
• Time of establishment of company
• Key People
• Important dates if any in the case
• Size of company
• Main Line of business of the company.
• Geographic Area (e.g. Region, Country or City in
  which operations are being held)
• Others
• Remember NO HARD FACTS.

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2 A SITUATION ANALYSIS
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Elements of Situational Analysis

• Macro Environmental Analysis
• DEEP-LIST Analysis
• Industry Analysis
• Mission
• Goal
• Objectives
• Segment and Target Market
• Marketing Mix
• PLC/CLC/ILC
• Portfolio Analysis

• KSFs
• USPs
• Market Analysis
• Market Share
• Sales
• Growth Rates
• SWOT analysis
• Ansoff Matrix
• Competitive Analysis
• Financial Analysis
• Strategic Analysis

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The Macro Environment

• DEEP-LIST analysis
• Demographic
• Ecological
• Economic
• Political
• Legal
• Informational
• Social
• Technological
• Give the factors of the above that effect the
  case only

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An Industry Analysis

• Porters 5 Forces Model.

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Threat of New Entrants
Industry Competitors Internal Rivalry
Bargaining Power of Suppliers
Bargaining Power of Buyer
Threat of Substitutes
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Solutions From Porters 5 Forces Model.

• By analyzing this model you will have to identify
  either a industry is
• Attractive
• Unattractive
• Moderate.
• Remember these Five forces can have the following
  effects.
• Either a force e.g
• Bargaining power of suppliers can be HIGHER OR
  LOWER.
• If it is Higher, then it is NEGATIVE FOR THE
  COMPANY.
• If it is LOWER, then it is POSITEVE FOR THE
  COMPANY.
• So a force that is is Negative
• A Force that is is Positive for the company.
• A Force can also have a Moderate () effect

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(-)
()
()
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Solutions From Porters 5 Forces Model.

• Analysis Continued.
• You will evaluate these five forces and see how
  many are positive, Negative or Moderate.
• Then At the end, you will after looking at the
  positive and negative forces, give conclusion
  about the ATTRACTIVENESS OF THE INDUSTRY.
• Remember that an unattractive industry does not
  means that profitability will also be Negative.
• A company can make profits even in an
  unattractive industry and vise versa.
• e.g. Nishat Mills is making a profit, although
  the Textile industry of Pakistan is UNATTRACTIVE.

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Mission/Goals Objectives

• Find any explicit or implicit statement of the
  firms mission.
• Goals and Objectives
• Look for the expressed or implied goals and
  objectives of the firm
• The importance of this is that after your
  analysis you can have a good picture of either
  the company is really achieving/following its
  mission/goals and objectives or not.

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Segmentation Target Market

• Segments Dealing in
• Demographics
• Geographic
• Psychographics
• Media Graphics
• Define the appropriate Target market that the
  firm seeks to pursue.
• Customer Profiling

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Marketing Mix

• Here you have to give details of the Marketing
  Mix.
• Use the 7 Ps Model.
• The 4 Hard Ps
• The 3 Soft Ps are
• People
• Processes
• Physical Evidence

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PLC/CLC/ILC

• ILC Industry Life Cycle
• CLC Company Life Cycle
• PLC Product Life Cycle

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Telecom Industry (ILC)
Zong (PLC)
CMCC (CLC)
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Portfolio Analysis

• The BCG Matrix
• Though this is a portfolio analysis that is meant
  to analyze different businesses in the entire
  portfolio, but we will use this model for our
  product analysis.
• Identify where the Product/ Products of the
  company fall in this matrix.

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KSF

• This part will identify the KSFs of the business
  or in other words the KEY SUCCESS FACTORS
• KSFs are thing that are important while
  operating in an industry. Remember you have to
  list the factors for the industry and NOT the
  internal company factors.
• These are the Key Factors for Success for any
  business operations in an INDUSTRY.

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USP

• The Unique Selling Preposition helps identify the
  main differentiation upon which the company is
  banking upon.
• The USPs have to be identified so that the
  Positioning strategy of the company can be
  analyzed.

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Market Analysis

• Market Share
• Look at Quantitative or Qualitative information
  that describes the past and current market Share
  position
• Sales
• Sales Growth rates or Sales figures will be
  plugged here. This will help you to analyze the
  next point.
• Growth Rates
• You will analyze the TRENDS in the patterns of
  Growth or Decline of the above two factors.

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Competitive Analysis

• Here you can analyze the Share Analysis of
  different competitors or the Product Attribute
  Analysis

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Competitive Analysis Market Share, Mind Share,
and Heart Share
Market Share Market Share Market Share Mind Share Mind Share Mind Share Heart Share Heart Share Heart Share
2000 2001 2002 2000 2001 2002 2000 2001 2002
Competitor A 50 47 44 60 58 54 45 42 39
Competitor B 30 34 37 30 31 35 44 47 53
Competitor C 20 19 19 10 11 11 11 11 8
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Product Attribute AnalysisCompetitor A.
Attribute Importance ( L/M/H ) Rating (1-5) Impact
Price
Quality
Features
Benefits
Style
Overall Rating Overall Rating Overall Rating Overall Rating
Remarks Remarks Remarks Remarks
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SWOT ANALYSIS

• Here look at the strengths/weaknesses/opportunitie
  s/threats
• Remember
• Opportunities and Threats are External
• Strengths and Weaknesses are Internal.

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THE SWOT MATRIX
STRENGTHS
OPPORTUNITIES
WEAKNESSES
THREATS
Minimize/Avoid
Minimize/Avoid
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Quantitative Assessment of Elements within the
SWOT Matrix
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Ansoffs Product-Market Expansion Grid
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Financial Analysis.

• Financial Analysis includes analysis like
• Market Share
• Sales Analysis and Trends.
• Ratio Analysis
• Break Even Analysis
• Analysis of Financial Statements

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Market Share

• Previously you have computed the Market Share of
  the Firm and also in the competitive analysis the
  Shares of competitors
• Now you have to give a comparative situation by
  merging the both the previously done analysis.
• Use a Tabular form to do this.

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Sales Analysis

• Here you can use Tables or Graphs to present the
  sales analysis of the company and its competitors
  or substitutes.
• Be Creative over here

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Ratio Analysis

• Financial Ratios determine the relationship
  between two variables, and with the help of
  company ratios and industry ratios we can undergo
  a comparative analysis for the operating of our
  firms.

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Common Ratios
Current Ratio Current Assets Current Liabilities
Acid Test Ration or Quick Ratio Current Assets- Inventory Current Liabilities
Inventory Turn Over Cost of Goods Sold Average Inventory
Total Asset Utilization ROA Net Sales Total Assets
Profit Margin On Sales EBIT Sales
ROI EAT Total Assets
ROE Net Income Shareholders Equity
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Analysis of Financial Statements

• Most commonly three statements are analyzed
• Balance Sheet
• Income statement
• Cash Flow Statement

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Example Income Statement.
Sales 3,600
Cost of goods sold 2,700
Cost of goods sold
Gross Profit 900
Less operating expense
Selling expenses 40
General Administrative 60 100
Gross Operating revenue 800
Less Depreciation 250
Net operating income 550
Less other expenses 50
EBIT 500
Less Interest expenses 200
Earning Before Tax 300
Less federal and state income tax (40) 120
Earnings After Taxes (EAT) 180
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Break Even Analysis

• Break even point is that level of sales in either
  units or sales dollars at which a firm covers all
  the costs of investing in a project.
• It is the level at which total sales revenue just
  equals the total costs necessary to achieve these
  sales.

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Computing Break Even

• Three values are required to calculate the BEP.
• Selling price per unit
• Level of Fixed Cost (TFC)
• Variable cost per unit produced (VC)

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Break Even Point.
3500 __ 3000 __ 2500 __ 2000 __ 1500
__ 1000 __ 500
PROFIT
TOTAL REVENUES
TOTAL COSTS
SALES In Rs.
BREAK EVEN POINT
Fixed Cost
LOSS
50 100 150 200 250
300 350
UNITS SOLD
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Formula For Calculating BEP IN UNITS
Fixed Costs
Contribution Margins
FC
SP- VC
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Break Even Point in Dollars

• FC .
• 1 VC
• SP

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Break Even Plus Profits.

• FC Profit .
• SP- VC

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In terms of Sales Dollars

• Break Even plus Profits.
• FC P
• 1 VC
• SP

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Over All Work Sheet
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Environment Relevant Issues Case Impact (Favorable/Un fav) Case Importance Imp/ Un imp
General Envt Social Economic Political Legal Technological ___________ ___________ ___________ ___________ ______________ ______________ ______________ ______________ _____________ _____________ _____________ _____________
Operating Envt International Suppliers Competition Customers Labor ___________ ___________ ___________ ___________ ______________ ______________ ______________ ______________ _____________ _____________ _____________ _____________
Internal Envt Organizational Marketing Financial Personnel Production. ___________ ___________ ___________ ___________ ______________ ______________ ______________ ______________ _____________ _____________ _____________ _____________
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3 Problem Identification
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IDENTIFICATION OF MAIN PROBLEM

• Remember to distinguish the Symptoms from the
  problem!
• Problems are identified in terms of
• Time
• Impact.
• i.e. if the time to solve the problem is less,
  and if not solved the impact will be very high,
  it is the Main Problem

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IDENTIFICATION OF SUB PROBLEM

• Sub Problems have to be identified, so you will
  only list them over here.
• The treatment to the sub problems will be dealt
  at the last stage of case analysis.
• List a maximum of three (3) sub problems over
  here.

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Analyze Record the Problems core elements.
Major problem or Issue Description of Problem or
Issue ___________________________________________
__________________________________________________
_______________ Evidence that this is a major
problem Facts _______________________________ S
ymptoms or other effects _______________ Opinions
_____________________________ Assumptions
__________________________
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4 Alternatives to the Main Problem

• Give at least three (3) viable alternatives over
  here that can solve the main problem
• These alternatives can also be your strategies
  that you wish to implement.

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5 EVALUATION OF EACH ALTERNATIVE

• Here you have to Evaluate each individual
  alternative separately.
• You will look at the Cost and Benefits of each
  alternative, or in other words the Pros and
  Cons.
• To do this you will use the following Table.

Alternative 1 ____________________ Alternative 1 ____________________
Pros Cons
. . . . . .
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6 Selection of Best Alternative

• This is the solution to your problem.
• Here you will after having performed an analysis
  on all the alternatives, select one alternative
  that
• Has more Pros then Cons
• Solves the problem completely
• Is your final Solution for the case

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7 IMPLEMENTATION

• Implementation means to bring the best suited
  alternative to the practical form.
• Here you will give details in how will you
  implement the alternative.
• Basically you will answer the following
• What to do?
• When to do it?
• How to do it?
• Who will be responsible for the implementation?
• Costs (if you can give the implementation costs)?

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8 RECOMMENDATION/S

• These usually help or rectify all the sub
  problems that you have solved.
• Recommendations can be given in bullet form or
  they can be given in paragraph form as well.
• You might want to give recommendations to each of
  the sub problems that the company is facing.

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PITFALLS TO AVOID IN SOLVING A CASE.

• Common Mistakes that analysts make.

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PITFALLS TO AVOID IN A CASE.

• Inadequately Defining the problem
• Searching for the answer.
• Assuming the case away.
• Complaining of not having enough information
• Recommending research or consultants.
• Not thinking.

• Relying too much on generalizations.
• Postulating a different situation
• Focusing too narrowly.
• Abandoning realism
• Setting up Straw Man alternatives.
• Rehashing case material
• Getting discouraged