1. How To Do Your Case Study?
March 2009
MCO 101
Issue date: 15 June 2008

2. To Think the Case by
Answering the Following
Questions
• Who are we?
• Where are we now?
• How did we get here?
• Where are we going?
• How can we get there?
MCO 101
Issue date: 15 June 2008

3. Who are we?
• Background Introduction
• Corporate strategy and business strategy
– What kind of product or service do you provide?
• Product, service, lifestyle. etc
– What’s your advantages and disadvantages?
• The business model (profit pattern)
MCO 101
Issue date: 15 June 2008

4. Where are we now?
• Where is the company or industry now?
• How well is it doing financially and in
terms of market performance
• What’s the main problems?
• SWOT analysis for current situation
(Page 97)
MCO 101
Issue date: 15 June 2008

5. Where are we now?
• External environment analysis
– Economic situation
– Industry situation
– Competition situation
• Internal environment analysis
– What problems do we have, or are we facing?
– Performance
• Industrial or corporate performance
• Financial performance
• Five-force model analysis (industry attractiveness)
MCO 101
Issue date: 15 June 2008

6. How did we get here?
• What have been the environmental and
management factors that had led to the
present success or failure?
• The successful business model or the
successful experience
• The failed experiences
• What can be learned from the past
MCO 101
Issue date: 15 June 2008

7. Where are we going?
• Where is the business heading?
• Does the future environment and
application of the present strategy look
favorable or unfavorable?
– The goal or target
– The trade-off and opportunity cost
– strategy or planning
– The reason to go there
MCO 101
Issue date: 15 June 2008

8. Where are we going?
Industry
Corporate
Attractiveness
Strategy
Which industry should we be in?
Rate of Profit
Above the
competitive
Level
How do we make
money?
Competitive
Business
Advantage
Strategy
How should we compete?
MCO 101
Issue date: 15 June 2008

9. How can we get there?
• What should be done?
• What strategies and decisions are required to
overcome the current problems or capitalize on its
opportunities?
• How should your suggestions or your
recommendations be implemented?
– Opportunities
– Challenges or difficulties
– Resources that have obtained for to be obtained
– The solution to solve problems
– The prospect
• SWOT analysis
MCO 101
Issue date: 15 June 2008

10. The Environmental Analysis
MCO 101
Issue date: 15 June 2008

11. Components of the General Environment
Economic
Demographic
Socio-cultural
Industry
Environment
Competitive
Environment
Political/
Global
Legal
Technological
MCO 101
Issue date: 15 June 2008

12. SWOT Analysis
• Strengths
• Weaknesses
• Opportunities
• Threats
MCO 101
Issue date: 15 June 2008

13. The Purpose of SWOT Analysis
• It is an easy-to-use tool for developing
an overview of a company’s strategic
situation
– It forms a basis for matching your
company’s strategy to its situation
MCO 101
Issue date: 15 June 2008

14. SWOT is the starting point
• It provides an overview of the
strategic situation.
• It provides the “raw material” to do
more extensive internal and external
analysis.
MCO 101
Issue date: 15 June 2008

15. Strengths
What advantages or capabilities the firm has
R & D
Marketing
Distribution channel
Know-how
Business model, etc
MCO 101
Issue date: 15 June 2008

16. Opportunities
• An OPPORTUNITY is a chance for firm
growth or progress due to a favorable
juncture of circumstances in the
business environment.
• Possible Opportunities:
– Emerging customer needs
– Quality Improvements
– Expanding global markets
– Vertical Integration
MCO 101
Issue date: 15 June 2008

17. Weakness
The disadvantages the firm has
Financial status: cash flow
Marketing: product positioning
(competitors)
Corporate culture and structure:
bureaucratic and motivation
R & D, etc.
MCO 101
Issue date: 15 June 2008

18. Threats
• A THREAT is a factor in your
company’s external environment that
poses a danger to its well-being.
• Possible Threats:
– New entry by competitors
– Changing demographics/shifting demand
– Emergence of cheaper technologies
– Regulatory requirements
MCO 101
Issue date: 15 June 2008

19. Opportunities and Threats form a basis
for EXTERNAL analysis
• By examining opportunities, you can
discover untapped markets, and new
products or technologies, or identify
potential avenues for diversification.
• By examining threats, you can identify
unfavorable market shifts or changes in
technology, and create a defensive
posture aimed at preserving your
competitive position.
MCO 101
Issue date: 15 June 2008

20. The purpose of
Five-Forces Analysis
• The five forces are environmental forces
that impact on a company’s ability to
compete in a given market (return on
capital or ROC).
• The purpose of five-forces analysis is to
diagnose the principal competitive
pressures in a market and assess how
strong and important each one is.
MCO 101
Issue date: 15 June 2008

21. MCO 101
Issue date: 15 June 2008

22. Porter’s Five Forces
Model of Competition
Threat of
Threat of
New
New
Entrants
Entrants
MCO 101
Issue date: 15 June 2008

23. Threat of New Entrants
Economies of Scale
Product Differentiation
Barriers to
Entry Capital Requirements
Switching Costs
Access to Distribution Channels
Cost Disadvantages Independent
of Scale
Government Policy
MCO 101
Issue date: 15 June 2008

24. Porter’s Five Forces
Model of Competition
Threat of
Threat of
New
New
Entrants
Entrants
Bargaining
Power of
Suppliers
MCO 101
Issue date: 15 June 2008

25. Bargaining Power of Suppliers
Suppliers are likely to be powerful if:
Supplier industry is dominated by a
Suppliers exert power
few firms
in the industry by:
Suppliers’ products have few substitutes
* Threatening to raise
prices or to reduce quality Buyer is not an important customer to
supplier
Powerful suppliers
Suppliers’ product is an important
can squeeze industry
input to buyers’ product
profitability if firms
are unable to recover
Suppliers’ products are differentiated
cost increases
Suppliers’ products have high
switching costs
Supplier poses credible threat of
forward integration
MCO 101
Issue date: 15 June 2008

26. Porter’s Five Forces
Model of Competition
Threat of
Threat of
New
New
Entrants
Entrants
Bargaining Bargaining
Power of Power of
Suppliers Buyers
MCO 101
Issue date: 15 June 2008

27. Bargaining Power of Buyers
Buyer groups are likely to be powerful if:
Buyers are concentrated or purchases
are large relative to seller’s sales Buyers compete
with the supplying
Purchase accounts for a significant
industry by:
fraction of supplier’s sales
Products are undifferentiated * Bargaining down prices
* Forcing higher quality
Buyers face few switching costs
* Playing firms off of
Buyers’ industry earns low profits each other
Buyer presents a credible threat of
backward integration
Product unimportant to quality
Buyer has full information
MCO 101
Issue date: 15 June 2008

28. Porter’s Five Forces
Model of Competition
Threat of
Threat of
New
New
Entrants
Entrants
Bargaining Bargaining
Power of Power of
Suppliers Buyers
Threat of
Substitute
Products
MCO 101
Issue date: 15 June 2008

29. Threat of Substitute Products
Keys to evaluate substitute products:
Products Products with improving
with similar price/performance tradeoffs
function relative to present industry
limit the products
prices firms
can charge Example:
Electronic security systems in
place of security guards
Fax machines in place of
overnight mail delivery
MCO 101
Issue date: 15 June 2008

30. Porter’s Five Forces
Model of Competition
Threat of
Threat of
New
New
Entrants
Entrants
Bargaining Bargaining
Rivalry Among
Power of Power of
Competing Firms
Suppliers Buyers
in Industry
Threat of
Substitute
Products
MCO 101
Issue date: 15 June 2008

31. Rivalry Among Existing Competitors
Intense rivalry often plays out in the following ways:
Jockeying for strategic position
Using price competition
Staging advertising battles
Increasing consumer warranties or service
Making new product introductions
Occurs when a firm is pressured or sees an opportunity
Price competition often leaves the entire industry worse off
Advertising battles may increase total industry demand, but
may be costly to smaller competitors
MCO 101
Issue date: 15 June 2008

32. Rivalry Among Existing Competitors
Cutthroat competition is more likely to occur when:
Numerous or equally balanced competitors
Slow growth industry
High fixed costs
High storage costs
Lack of differentiation or switching costs
Capacity added in large increments
Diverse competitors
High strategic stakes
High exit barriers
MCO 101
Issue date: 15 June 2008

33. The Five Forces are Unique to
Your Industry
• Five-Forces Analysis is a framework for
analyzing a particular industry.
– Yet, the five forces affect all the other
businesses in that industry.
MCO 101
Issue date: 15 June 2008

34. Competitor Analysis
The follow-up to Industry Analysis is
effective analysis of a firm’s Competitors
Industry
Environment
Competitive
Environment
MCO 101
Issue date: 15 June 2008

35. Competitor Analysis
Assumptions
What assumptions do our
competitors hold about the future Response
of industry and themselves?
What will our
competitors do in the
Current Strategy
future?
Does our current strategy support
changes in the competitive Where do we have a
environment? competitive
advantage?
Future Objectives
How do our goals compare to our How will this change
competitors’ goals? our relationship with
our competition?
Capabilities
How do our capabilities compare
to our competitors?
MCO 101
Issue date: 15 June 2008

36. Competitor Analysis
Future Objectives What Drives the competitor?
How do our goals compare
to our competitors’ goals?
Where will emphasis be
placed in the future?
What is the attitude
toward risk?
MCO 101
Issue date: 15 June 2008

37. Competitor Analysis
Future Objectives What is the competitor doing?
How do our goals compare What can the competitor do?
to our competitors’ goals?
Where Current Strategy
will emphasis be
placed in the future? currently
How are we
What is the attitude
competing?
toward risk?
Does this strategy
support changes in the
competitive structure?
MCO 101
Issue date: 15 June 2008

38. Competitor Analysis
Future Objectives What does the competitor believe
How do our goals compare about itself and the industry?
to our competitors’ goals?
Where Current Strategy
will emphasis be
placed in the future?
How are we currently
What is the attitude
competing?
Assumptions
toward risk?
Does this strategy
Do we assume the future
support changes in the
will be volatile?
competition structure?
What assumptions do our
competitors hold about the
industry and themselves?
Are we assuming stable
competitive conditions?
MCO 101
Issue date: 15 June 2008

39. Competitor Analysis
Future Objectives What are the competitor’s
How do our goals compare capabilities?
to our competitors’ goals?
Where Current Strategy
will emphasis be
placed in the future?
How are we currently
What is the attitude
competing?
Assumptions
toward risk?
Does this strategy
Do we assume the future
supportwill be volatile?
changes in the
competition structure?
What assumptions do our
Capabilities
competitors hold about the
industry and themselves?
What are my competitors’
Are we operating under
strengths and weaknesses?
a status quo?
How do our capabilities
compare to our
competitors?
MCO 101
Issue date: 15 June 2008

40. Competitor Analysis
Response
Future Objectives
What will our competitors
How do our goals compare
to our competitors’ goals? do in the future?
Where Current Strategy
will emphasis be Where do we have a
placed in the future? competitive advantage?
How are we currently
What is the attitude How will this change our
competing?
Assumptions
toward risk? relationship with our
Does this strategy
Do we assume the future competition?
supportwill be volatile?
changes in the
competition structure?
What assumptions do our
Capabilities
competitors hold about the
industry and themselves?
What are my competitors’
Are we operating under
strengths and weaknesses?
a status quo?
How do our capabilities
compare to our
competitors?
MCO 101
Issue date: 15 June 2008