CASE ANALYSIS COACH

AGEC 630
MASTER OF AGRIBUSINESS PROGRAM
TYPES OF CASES

 Decision Cases describe a decision faced by the case protagonist. The student
ultimately must choose among a finite set of distinct decision alternatives.
 Problem Cases require a student to diagnose a problem in a business case and to
formulate possible solutions.
 Evaluation Cases illustrate a business success or failure. The student analyzes the
underlying reasons for that success or failure to arrive at management lessons.

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 2

WHAT MIGHT YOU BE EXPECTED TO DO WITH A CASE?

 Discuss it  Write a report or essay about it  Create a presentation

(or answer the assignment
questions supplied by
instructor).

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 3

 KOMATSU LTD. CASE

Komatsu LTD. case will be examined throughout this presentation. To

optimize your learning experience follow the suggestions in the "Try It"
notes so that you will become familiar with the examples provided.

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 4

 FROM CASE (ASSIGNMENT QUESTIONS)
Here are 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? 3/1/2018 5
ONE APPROACH TO CASE ANALYSIS

Typically, you'll need to

repeat this process multiple
Action
Planning
Getting
Oriented
times, and as you do, you'll
discover new analytical
Performing Identifying directions, evolving your
Analysis Problems
assessment of the case and
conclusion! 3/1/2018 6
CASE ANALYSIS OVERVIEW

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 7

GETTING ORIENTED

1. Gather your materials and tools.

2. Quickly read the opening section.
3. Flip through the pages.
4. Read and re-read the assignment questions.

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 8

 FROM CASE (GETTING ORIENTED)

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?
Example: 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. 3/1/2018 9
IDENTIFYING PROBLEMS

1. Read the case carefully.

2. Bring outside concepts into your analysis.
3. Revisit your problem statement.
4. List the key concerns, decisions, problems, or
challenges that affect the case protagonist.
Use your judgment to prioritize the items in your list.

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 10

 FROM CASE (REVISIT YOUR PROBLEM STATEMENT)
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
3/1/2018 11

 abandon Katada's strategy, or replace it with something else

PERFORMING ANALYSES

 Apply judgment.
 Identifying useful data.
 Apply qualitative analysis.
 Apply quantitative analysis.
 Read between lines.
 Organize your facts.
 Revisit, refine and reflect.
 Know when to stop.

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 FROM CASE (APPLYING JUDGMENT)
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.

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 13

 FROM CASE (APPLY QUALITATIVE ANALYSIS)

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.
AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 14
 FROM CASE (APPLY QUANTITATIVE ANALYSIS)

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. 3/1/2018 15
 FROM CASE (READING BETWEEN LINES AND ORGANIZING
FACTS)

Kawai Era (1964-1982) Tanaka Era (1987-1989)

 Management by Policy, “Catch Caterpillar”  Accepts new reality

 PDCA cycle reinforces single minded mission  Cuts back on product, rather than
aggressive sales tactics
 1968: Komatsu doubles warranty
 Gives up market share to gain higher
 1970: Raises market share by 15% etc. profits
 Introduces new technology to demand
Nogawa Era (1982-1987) higher prices

 1984-1987 Exchange rate shifts by almost 45 yen/dollar per year  1987-1989: Sales declined by 13%,
profits increased by 119%.
 Falling demand, worldwide prices wars, heightened trade frictions
 Lost market share to Caterpillar
 Slow to move production overseas etc.
3/1/2018 16
 FROM CASE (REVISITING, REFINING, AND REFLECTING)
After comparing the three eras of the Komatsu leadership, you are well positioned to rewrite
this statement so that it is a bit more specific:
 How should Katada move forward to overcome core rigidities, successfully adapt to new conditions, and
develop a strategy that will be adaptive to future shifts?
Many answers are possible, but here are a few:
 When formulating a strategy for current conditions, look closely for factors on which the success of the
strategy depends (such as the exchange rate in this case). A strategy that depends crucially on a factor
outside management's control (e.g., exchange rate) is not as good a strategy as it may seem in the short
term.
 Even in the midst of the greatest success of a business system, it is important to attend to the
adaptiveness of the system. Even if your business is going well, you should look forward to and prepare
for scenarios in which that might change. 3/1/2018 17
ACTION PLANNING

1. Identify tasks.
2. Analyze and delegate Tasks.
3. Double-check with SCHEMES (Space, Cash,
Helpers/People, Equipment, Materials, Expertise).
4. Come up with decision alternatives.
5. Firm up recommendations.
6. Revisit, refine and reflect.

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 18

 FROM CASE (ANALYZING AND DELEGATING TASKS)
 The organization and its processes, as well as the instincts and reflexes of managers, have long evolved to
execute the Kawai strategy.
 Control was traditionally centralized, and now it will need to be coordinated to a much greater extent across
large geographic areas in the newly distributed business. Managers accustomed to the centralized system will
need to relinquish some control.
 Local managers in overseas offices must learn that they can and should take control. They might, however,
need new skills that were not required when control was more centralized.
 As managers move up through the ranks in overseas offices, the company will experience cultural differences
and challenges. No longer will most managers come from the same corporate and national culture.
 As Komatsu moves away from centralization as a means of control, this must be replaced by formalization or
socialization. Socialization could work if Japanese managers worked as expats in key overseas roles, but this
doesn't seem like a robust long-term solution. Thus, the company must develop effective formal processes
that it hasn't traditionally employed. 3/1/2018 19
 FROM CASE (FIRMING UP RECOMMENDATIONS)

To achieve 3G’s-Growth, Global, Groupwide strategy Komatsu should:

 Double sales by 1990s and diversifying into non-construction activities, Katada will need to change a
centralized organization into a more decentralized, nimble network that can better anticipate and
respond to trends in new market segments.
 Implement the globalization goal, Komatsu must acquire new subsidiaries in foreign locations and
relinquish more decision-making control to the existing ones.
 Support the groupwide goals, Katada must find expertise in various parts of the company that could be
redeployed to building the new market segments. Komatsu will also need horizontal knowledge-sharing
processes, such as regularly rotating key engineering staff among project teams and management among
geographical locations. Ways to encourage innovation also need to be developed, such as reserving a
certain percentage of R&D funds for new-idea testing, without unrealistic expectations regarding future
returns on those projects. 3/1/2018 20
 FROM CASE (REVISITING, REFINING AND REFLECTING)
Results from reflecting:
 Carefully developed core competencies can be eroded by rapid changes in the external environment
(currency appreciation, stagnating industry demand, political pressures, etc.). Don't let the success of such
core competencies keep you from planning for a rainy day when those competencies are no longer
helpful.
 Core competencies can actually become obstacles to change—i.e., core rigidities. Laser-like strategic
focus that drives successful behavior in one set of conditions can be counterproductive in changed
conditions.
 In reconfiguring an organization to build new sources of competitive advantage, the structural
realignments might be the easiest part of the job. Much more time consuming and difficult will be altering
interpersonal processes and individual mind-sets. Thus, it might take many years to rebuild the strategic
competencies and organizational capabilities that will make Komatsu more flexible and adaptable as it
strives to achieve competitive advantage. 3/1/2018 21
GOOD LUCK!!!

Like a detective solving a crime, sometimes you'll get stuck. But as you work on more
and more cases, you'll get stuck less often, and you'll have more ideas about how to
proceed!

We've started you down the road toward developing expertise in case analysis, but this
is only a beginning. Real expertise comes from doing it again and again.

AGEC 630: MASTER OF AGRIBUSINESS PROGRAM 3/1/2018 22