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How to take up a business case? Shahnawaz Adil Assistant Professor (Strategies and Advanced Management) Premium Educator (for Higher Education), Harvard Business Publishing, USA For M.B.A students only.

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Encl:

1. Komatsu Ltd. and Project G (A).pdf 2. Komatsu Ltd. and Project G (A) with marked up.pdf 3. Quantitative Data Analysis.pdf 4. Case Analysis Worksheet.docx

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1.0 (last updated on: Wednesday, June 13, 2012) Introduction to Case Analysis

1. Types of Cases Cases tend to fall into one of three categories that sometimes overlap: Decision Cases describe a decision faced by the case protagonist. The student ultimately must choose among a finite set of distinct decision alternatives. Decision cases are probably the most common type. Decision cases begin by describing a decision faced by the case protagonist, and often identifying distinct decision alternatives. These cases ask students to choose an alternative and to defend that choice with arguments and evidence. Problem Cases require a student to diagnose a problem in a business case and to formulate possible solutions. Problem cases are similar to decision cases, in that they ask students to assume the role of a case protagonist and make recommendations, but they don't provide clear alternatives from which to choose. Instead, they describe a problem the protagonist must confront, and challenge students to invent and justify an action plan for dealing with the problem. Evaluation Cases illustrate a business success or failure. The student analyzes the underlying reasons for that success or failure to arrive at management lessons. Evaluation cases, sometimes called Best-Practice or Worst-Practice cases, portray situations that are interesting or remarkable, usually because they are especially
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successful or unsuccessful. These cases typically do not include an obvious single problem or decision. Instead, the student must look at all that is relevant, good, bad or inbetween and those outcomes must be evaluated to provide a clear assessment. 2. Learning from Case Analysis From the events of a case, students can derive general principles, ideas, and theories. Sometimes these are famous frameworks, such as Porter's theory of generic strategies, Williamson's transaction cost theory, or the general principles of revenue recognition. Deriving or discovering a framework inductively from a real case helps you remember it and apply it to other business situations. That's because you've seen why it's needed, how to use it, and what its limits are. The role of the instructor in a case-based class is to guide students through this discovery process, to ask penetrating questions that refine and improve students' understanding, and to clarify the applicability of general concepts to other business settings.

3. What might you be expected to do with a case? Discuss it. Harvard professor David Garvin, an expert case teacher and writer, sometimes says, "A case is a literary form intended to be discussed." A case does not fully achieve its purpose until students talk about it, just as the script of a play realizes its purpose when performed on stage. You should come to class prepared to discuss a case-specifically, to say what you think the decision should be, to articulate how the problem ought to be solved, and to defend your solution thoroughly, insightfully, and persuasively using data from the case. Write a report or essay about it. The process of arriving at your recommendations for an exam or a paper is similar to how you prepare to discuss a case in class. However, you have the additional challenge of explaining your logic in written form, often within a limited number of pages or words. This limitation is especially pertinent on an exam. Create a presentation. The analysis you'll do for a presentation will be similar to how you prepare for a discussion, exam, or paper on a case. The difference is the need to create presentation materials to help you explain your analysis and recommendations to a live audience. In short, you are the leader not merely a participant. 4. Assignment Questions Assignment questions are a good place to begin a case analysis. Usually your instructor will supply these, but occasionally they are included within a case, typically at the end. Some professors provide many detailed assignment questions; others offer relatively few or less-detailed ones. Assignment questions and questions that come up in a class discussion usually don't match up precisely. In general, assignment questions require a deeper exploration of the
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nuances of a case to be answered effectively, but they might merely prompt your thinking about key issues. Whatever your professor's approach to assignment questions, the basic challenge remains the same: identifying the important issues at the heart of the case, addressing those through analysis, and identifying what lessons from the case can be applied more broadly.

Examples from the Komatsu LTD. and Project G case will be examined. Some examples of possible assignment questions for the Komatsu case. 1. How was Komatsu able to evolve from a $169 million company with low-quality products to become a real challenge to Caterpillar by the early 1980s? How would you evaluate Mr. Kawai's performance? 2. Why did performance deteriorate so rapidly in the mid-1980s? What grade would you give to Mr.Nogawa's term as CEO? 3. How appropriately did Mr. Tanaka deal with the problems he inherited? What is your evaluation of his brief tenure as CEO?

4. How effectively did Mr. Katada take charge? How would you assess his new vision for the company? His new strategy? His new cultural and behavioral objectives? What grade would you give him for his performance?

One Approach to Case Analysis The general approach to case analysis used in this tutorial. It's by no means the only approach that exists, but it's a worthwhile one to try as you get started.

Getting Oriented Identifying Problems Performing Analysis Action Planning

Getting Oriented It's useful to think of a case analysis as digging deeper and deeper into the layers of a case. 1. You start at the surface, Getting Oriented and examining the overall case landscape. 2. Then you begin to dig, Identifying Problems, as well as possible alternative solutions. 3. Digging deeper, Performing Analyses you identify information that exposes the issues, gather data, perform calculations that might provide insight.

4. Finally, you begin Action Planning to outline short-, medium-, and long-term welldefined steps. Typically, you'll need to repeat this process multiple times, and as you do, you'll discover new analytical directions, evolving your assessment of the case and conclusion. Analyzing a case is not just about digging. It's also about climbing back out to examine what you've unearthed, deciding what it means, determining what to analyze next, and digging some more. Often your examination of information about a problem will change your idea of what the real problem is-and about what to analyze next. The process is similar to when a detective investigating a crime shifts his or her opinion about the most likely suspect as more clues come to light. Let's see how all this might work for a particular case.

Example
Open: 1. Komatsu Ltd. and Project G (A).pdf Getting Oriented Gather your materials and tools. These include the case itself, the assignment questions, and any other materials your instructor might provide (e.g., a spreadsheet or supplementary reading). Be prepared to take notes in the margins and to highlight important numbers or passages. This Case Analysis Worksheet can also be helpful as you organize information to use in your analysis. Open: Case Analysis Worksheet.docx

Quickly read the opening section. In roughly a page, this important part of the case typically identifies the place and time setting, reveals the type of case this is, and signals what problem or issue might be the starting point for analysis. Along with the assignment questions, this section provides the most-reliable clues for beginning to solve the mystery of the case. Flip through the pages, look at the section headings and exhibit titles, and skim parts of the body text that immediately catch your eye. Also glance through the exhibits, which usually appear at the end. Read and re-read the assignment questions, and compare them with the section headings and exhibits. Try to gain an initial impression of where you might find answers to the questions (under which headings, in which exhibits, and how the exhibits relate to relevant sections of the case). Defining the Problem
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Based on your first pass, take a preliminary stab at writing a sentence or two that summarizes:

the type of case it appears to be (Decision, Problem, or Evaluation) your impression of the main problem(s) or issue(s) that might be the appropriate focus of your analysis

Bear in mind that your initial impressions of the problem statement might change. Nevertheless, trying to define the problem early will help focus your thinking as you read the case in more detail. Try it Before you view the examples provided, think about or jot down your first impression of the type of case and preliminary problems or issues described. You can record your thoughts to this case, or any case, by using the Case Analysis Worksheet. What kind of case is Komatsu? It's probably closest to an Evaluation Case. The assignment questions include a lot of evaluation words such as "well," "evaluate," "assess," and "grade." You could also interpret Komatsu as a Decision Case, however: Is Mr. Katada doing the right thing? Is he wise to be attempting this big change at this time? You could even argue that it is a Problem Case: What has gone wrong at Komatsu? How should it be fixed? What seems like the central problem or issue you'll want to focus on in analyzing the case? Write this down in one to three sentences. One possibility:

Is Mr. Katada's direction the right one for Komatsu? Will it succeed? How can Katada maximize the chances that it will?

As you write this first draft problem statement, it will probably already seem clear to you that analyzing the problem will require that you examine how Komatsu got into its current situation, and how that situation has generated a need for change.

Identifying Problems After you are generally oriented to the case, it's time to dig deeper to test your initial assumptions. The digging process often begins with trying to find the answer to an assignment question or to a question that occurred to you during your first pass. Your opening questions lead you to sub5

questions and sometimes to new questions altogether. Patterns will begin to emerge, as will major themes, problems, and issues that unify your questions and that ultimately elucidate the major pedagogical purpose of the case.

Reading the Case Carefully Return to the beginning of the case, read it carefully, and add to your original notes and highlights. Pause to think about certain passages; then re-read them. Ask yourself: What's happening? What does this mean for the company? Will it succeed? What problems can I see coming? You may have gut feelings about some of the information that suggests particular significance, perhaps numbers or other facts. Circle or highlight those. You'll be wrong about some of them because some may be intentionally false leads ("red herrings") inserted by the case writer. Nevertheless, most cases will require that you synthesize numbers or facts from different sections to conduct important analyses. As you analyze more cases, you'll get better at spotting potentially important bits of information. Don't worry if not everything becomes clear immediately. That's just the way this works. Try It Take the time to read the case carefully, making notes and highlighting anything that seems significant. Open: 2. Komatsu Ltd. and Project G (A) with marked up.pdf

Bringing Outside Concepts Into Your Analysis As you read carefully, you might begin to see connections to principles, frameworks, and theories with which you are already familiar from this or another class. To help identify appropriate frameworks, ask questions such as these:

"What kind of course is this?" A marketing course, for example, will typically employ marketing frameworks. "What clues did the instructor provide?" Assignment questions, the title of the module, or the syllabus might signal the specific focus of the case. "What are the assigned readings?" Supplemental readings (e.g., an Industry Note, article, or chapter) often provide the theoretical framework used as a starting point for the analysis of a new case.

"Where you are in the course?" Early in a course an instructor will choose cases that are pretty straightforward, but later in the term there's often a twist or a sophisticated refinement that you need to look for. Expert Advice: Among the principles, frameworks, and theories that might connect to the Komatsu case are these:

Hamel and Prahalad's classic "Strategic Intent" framework (from Harvard Business Review May-Jun 1989, pp. 63-76), which could be assigned as a reading with this case

Theories about core competencies and core rigidities (Prahalad, C. K., & Hamel, C. 1990. The core capability of the corporation. Harvard Business Review, 68(3):79-91; Leonard-Barton, D. 1992. Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management Journal, 13:111-125)

Change management frameworks, such as Kotter's 8 steps (Kotter, John. 2007. Leading change: Why transformation efforts fail. Harvard Business Review, 85(1):96-103)

Don't worry if your answers are different. Depending on your course, these or any of many others might come to mind. This approach of identifying and applying theories to a specific problem may differ from what you have encountered in other classrooms, where instructors teach a theory and then show examples. But the use of inductive reasoning, whereby you come to a conclusion or form an opinion after detecting patterns from evidence, is common in the business world and therefore can offer a powerful learning experience. Revisiting Your Problem Statement Now that you've read the case carefully, return to your initial statement of the problem or issue at the heart of the case. Do you need to revise it after your careful reading? Always remain open to the fact that the meaning of a case may shift as you discover new evidence, just as a detective investigating a crime must be open to new evidence. Take a moment to list the key concerns, decisions, problems, or challenges that affect the case protagonist. Then use your judgment to prioritize the items in your list. What do you most need to understand first? What factors do other answers and action plans depend on?

Try It Revise your problem statement, if applicable, and list and prioritize your key concerns. Expert Advice: Our initial problem statement included the following:

Is Mr. Katada's direction the right one for Komatsu? Will it succeed? How can Katada maximize the chances that it will?

A revision after a careful read might lead you to develop a problem statement like this: The strategy that was very successful for Komatsu for some time has ceased to be effective. The problem at the heart of this case is to figure out why the old strategy has become ineffective and to assess whether new strategy proposed by Katada is likely to be more effective. Also, to formulate an action plan, a way forward, that will make success with the new plan more likely. Recommendations might include these:

continue along the current path, following Katada's new strategy modify Katada's strategy abandon Katada's strategy, or replace it with something else

Performing Analyses "Analysis" describes the varied and crucial things you do with information in the case, to shed light on the problems and issues you've identified. That might mean calculating and comparing cumulative growth rates for different periods from the year-by-year financials in a case's exhibits. Or it might mean pulling together seemingly unrelated facts from two different sections of the case, and combining them logically to arrive at an important conclusion or conjecture. Applying Judgment Analysis usually doesn't provide definitive answers. But as you do more of it, a clearer picture often starts to emerge, or the preponderance of evidence begins to point to one interpretation rather than others. Don't expect a case analysis to yield a "final answer." If you're accustomed to doing analysis that ends with a right answer, coming up with a possible solution that simply reflects your best judgment might frustrate you. But remember that cases, much like real-world business experiences, rarely reveal an absolutely correct answer, no matter how deeply you analyze them. Expert Advice:
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In the Komatsu case, three eras of the company's history are described in different sections. The numerical information in exhibits can also be analyzed by time periods. Your initial analysis should concentrate on what was going on in each era before you evaluate the current situation. Contrasting the eras and management styles of Kawai, Nowaga, and Tanaka will provide valuable historical perspective. Analysis Types: Qualitative Typically, you'll do qualitative analysis based on your reading and interpretation of the case. Ask yourself: What is fact and what is opinion? Which facts are contributing to the problem? Which are the causes? Qualitative factors should be prioritized and fully developed to support your argument. Make notes about your evolving interpretations, always being careful to list the evidence or reasons that support them. Qualitative information in a case can be a mix of objective and subjective information. For example, you may need to assess the validity of quotations from company executives, each of whom has a subjective opinion. Reports from external industry analysts or descriptions of what other companies in the industry have done might seem more objective; no one in the case has a vested interest in this information. A company's internal PowerPoint presentation should be considered separately and differently from a newspaper article about the company. Cases mix firsthand quotations and opinions with third-person narratives, so you need to consider the reliability of sources. As in real life, you shouldn't take all case information at face value. Expert Advice: Example #1 (Refer last two lines in paragraph 1 on page 1)

By collecting, combining, and analyzing qualitative information from different areas of the case, you might synthesize a tentative summary, like this: Kawai's strategy was, in many ways, quite simple: The simple and clear long-term vision, "Catch up with and surpass Cat," drove the broadening of product offerings and the extension of the scope of the Komatsu market. This was all accomplished via a strong, highly disciplined, top-down implementation process, orchestrated by very concrete "projects" with simple objectives (e.g., "cost down"). The PDCA cycle enforced the discipline by constantly comparing activities with objectives, leaving little room for deviation from the organization's single-minded mission. Example #2 (Refer second last paragraph on page 2)

You might then build on your tentative summary by collecting more qualitative information from the case and using it to refine and elaborate on earlier analysis, like this:
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The text notes that this strategy was "an immediate and outstanding success." Quality improved enough for Komatsu to double its warranty period (p. 2, section paragraph 4). By 1970, market share had increased from 50% to 65% (same paragraph). Caterpillar reacted with great concern (p. 3, full paragraph 1: "Cat would not be able to compete against its Japanese rival at prevailing exchange and wage rates"). Quantitative datasuch as amounts of materials, money, time, and so on-might be embedded in the text or provided in tabular form in the exhibits (often both). It can be difficult to know which calculations to do, what formulas to apply, and how to interpret the results. Don't sweat this. Try a few simple calculations such as ratios and growth rates over time. If some of those provide insight, great; if not, nothing is lost but a little time. Use simple calculations to determine what other things you might want to assess quantitatively. Quantitatively rich cases may seem intimidating; some people don't enjoy calculating or relying on math to reach conclusions. You might need to calculate, say, a net present value in a finance case, or the capacity of a production system to locate the bottleneck in an operations case. Don't be fooled into thinking that just applying those standard analyses is the point of a case. Be prepared if the professor asks, "How is that number relevant to this situation?" or "How would you incorporate it into your decision in favor of one approach over another?" or "Is that number even relevant in this situation?" From case: Exhibits 2 and 3 provide further information of interest, most of it confirming the above claims of success under Kawai's stewardship.

Company sales trended generally upward (more than doubling between 1975 and 1982). Profits tell a similar story (Exhibit 2). Overseas share of construction equipment explodes between 1966 and 1982 (Exhibit 3), which means Komatsu is becoming a much more export-oriented company. Caterpillar's sales result for 1982 is also revealing, for its sharp downward trend (Exhibit 2), and helps explain why the 1982 annual report for Caterpillar expressed such concern. 3. Quantitative Data Analysis.pdf

Open: Action Planning:

To be continued

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