Assignment: Case Analysis
Each student is responsible for one written case assignment, which should resemble an executive briefing based on your analysis of the case (10-15 pages). You may choose which case to do.
Should be between 10 and 15 pages in length.
• Executive Overview - gives general overview of case including key issues or problems andrecommendations.
• Analysis - briefly describes the overarching framework for the case and its background. No additionalinformation should be used other than that provided in the case text.
• Problem Statement - more focus on statement of problem or central issue within case. More than oneissue may be relevant so limit write-up to the three most interesting or troublesome issues. Name andexplain these explicitly.
• Options - give several options for the focal organization concerning these problems or issues.
• Recommendation - name one explicit action that will help or fix that which is named in the problemstatement.
• Implementation and Control - briefly explain how the recommendation may be carried out and how itcan be controlled, altered or adjusted if necessary.
There are a number of analytical tools to help you organize, analyze, and display your information in aconvenient and easy to interpret form. Some of these techniques allow you to quantify the decisions bymaking judgments about the situation. You should select those tools which best fit the particular casesituation. Following are some of the tools that are available:
1) Performance Analysis - You should make comparisons of key financial and market data at both the corporate and business unit level with major competitors and/or industry averages. Compare keyexpenses to sales, such as percent R&D of sales, percent sales and administrative expense of sales,percent of accounts receivable of sales, and sales per employee or sales per store.
2) BCG Portfolio Mapping / Product Mission Matrix - Developing a matrix that compares variables between companies, such as product lines or financial results, is an easy way to illustrate differences. Asimple two-by-two matrix sometimes illustrates the relationships between variables. This can also beexpanded into a larger matrix, sometimes referred to as portfolio mapping, such as those developed by the Boston Consulting Group. You can be creative with the mapping technique and use it for avariety of comparisons, such as a business compared with competitors, a SBU or product line comparedwith others within the same company, or SBU's compared to industry. You can modify the BCGtechniques to fit your particular needs. Be sure to carefully label and identify the components used inmapping.
3) Key Success Factors / Strength Assessment - Identifying key success factors for the company and itscompetitors is another useful analytical tool. By utilizing a rating and weighing technique, you canquantify qualitative evaluations. The first step is to identify the key success factors, then apply aweighing to each of those that totals one hundred percent. The weighing represents the importance ofeach factor relative to the others. Next, using a scale of one to five, with five being very strong and onebeing very weak, rate the company on each of the success factors. Also rate its key competitors. Thisshows rather quickly the comparison on each factor, and when multiplied by the weighing and addedtogether, can provide one number that represents the total key success factor comparison with eachmajor competitor. This technique can also be used as a starting point in developing a map such asstrategic groups map.
4) SWOT Analysis - A SWOT analysis is designed to identify the strengths and weaknesses of the company (internal factors) and the opportunities and threats for the company (external factors). ASWOT analysis is often a good starting point, but you need to draw conclusions as a result of theanalysis. For example, is the company in a strong competitive position? What can it do to turnweaknesses into strengths and threats into opportunities? Can it continue to pursue its current strategyin a profitable manner, or will the strategy need revision?
5) Competitive Strategy Models (Porter) - A useful point to begin the analysis of strategy is to usePorter's Competitive Strategy Model. Porter believes that to be successful, a company must select oneof three generic models of competitive strategy. These are Low Cost Producer, Differentiation, andFocus or Niche. This can be followed by developing Porter's Five Forces Model. The Five Forces Modeldisplays the major sources of competition. These five forces of competition include direct competitors,substitute products, customers, suppliers, and new entrants into the marketplace. Successful use of thePorter Model Analysis includes identifying the sources of competition, the strength and likelihood ofthat competition existing, and strategic recommendations for the action a company should take todevelop barriers to the various forms of competition.
6) Best Case/Worst Case/Expected Case Scenarios - In developing business plans it is useful to developfuture financial scenarios based on a best case/worst case/expected case basis.
7) Break-Even Analysis - In preparing a business plan or evaluating a project, it is helpful to develop abreak-even analysis, in essence that point where cost equals sales with no profit or no loss. Two basicways of calculating break-even point are the amount of sales that would be necessary to break even orthe number of units that must be sold to break even. A very important aspect of this calculation is theclassification of cost between fixed and variable as it applies to the period of time under consideration.For example, if you are using a two-year planning horizon and you have a two-year lease on yourproperty, that would be considered fixed for this purpose. If you have a store that is open a set numberof hours per day, the minimum is one employee available during the hours the store is open. This couldbe considered fixed, while the addition of other employees could be considered variable.
8) Common-Sized Financial Statements - The comparison of balance sheet and income statements overtime and across companies will be facilitated by using common-sized statements. Convert every category from dollar terms to percentages. For the income statementdivide each item by total sales. For the balance sheet divide each balance sheet item by total assets.
9) Valuation of a Business - There are a number of factors that go into determining the value andappropriate price for a business. The degree to which the buyer wants to buy and the seller wants tosell, the various terms and conditions associated with the sale, and the actual negotiation capabilitiesare all factors in arriving at the final price. However, there are two methods that help quantify thedecision and provide a basis for negotiation.
(a) The price earnings ratio is the amount investors are willing to pay per dollar of reported profit. It isdetermined by dividing the selling price per share by the earnings per share and comparing the P/E ratiowith comparable firms or the industry average. For example, if the P/E ratio for the industry is 6:1 andthe earnings of the business under consideration are $100,000 per year, the value of the business couldbe estimated at $600,000.
(b) The net present value of a business can be obtained by using a discounted cash flow of futureearnings method.
10) Lease vs. Buy Decisions - There are many factors that influence the decision of whether to lease orpurchase an asset. A cost comparison using net present value and cash flow evaluations of the twoalternatives is helpful in reaching the appropriate decision.
11) Proforma Statements - A forecast of financial statements (income and balance sheet) is used forbusiness planning. In addition to being a good ongoing planning tool, they are usually prepared bymonth for a two-year period. They are required when presenting business plans to obtain financing. It isimportant to note all major assumptions that impact the plan.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
Attachment:- Guide-to-Case-Analysis.rar