BU111 Lab manual Lab #1 content S20 PDF

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Lab #1 Course Preparation and Introduction to Case AnalysisWhat to do before the second week of classes (EXECUTE STEPS IN THIS ORDER): Register for a lab on the course website (go to laurierbiz). After registering for a lab, complete the BU111 Student Survey online at laurierbiz/survey Visit Pearson...

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Lab #1

Course Preparation and Introduction to Case Analysis

What to do before the second week of classes (EXECUTE STEPS IN THIS ORDER): 1.

Register for a lab on the course website (go to www.laurierbiz.com).

2.

After registering for a lab, complete the BU111 Student Survey online at www.laurierbiz.com/survey

3.

Visit Pearson websites and register (follow instructions provided in class and posted to course website so that you do this correctly). Explore the sites and familiarize yourself with their content. You will be expected to use these sites for assignments as indicated in the course outline.

4.

Begin working on the Avoiding Plagiarism and Citing Your Sources Assignment once you have registered with Pearson.

For Lab #1: The purpose of this lab will be to introduce you to your Teaching Assistant and your lab peers. Lab expectations will also be reviewed. The majority of the lab will be spent discussing and practising case analysis so that you begin developing the case analysis skills that will be needed in this course and throughout the business program. Read:

“Introduction to the Case Method”

Review:

• Case Analysis Summary Sheet • Case Analysis & Write-up: Summary Checklist

Prepare:

• Complete “Introduction to the Case Method” Quiz on Pearson website before midnight on the Sunday before your lab. The quiz is based on the reading with the same title in the lab manual. • Think about how you would apply the case method to the “Joe’s Java” case found a few pages below. Answer the questions in “Joe’s Java Preparation Questions” immediately following the case

Warning: Immediately after Lab #1, look ahead at the requirements for Lab #2. You must submit your work to your TA and upload to the My Learning Space dropbox 24 hours before your second lab.

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LAB #1

Introduction to the Case Method

A case is a description of a “real life” business situation that commonly results in an issue that requires a decision. The decision-maker in the case must determine the problems or opportunities (issues) that exist, analyze the situation, generate and compare alternative courses of action, and recommend both a solution and plan of implementation or course of action. In case discussions you will assume the role of the decision-maker in the case, and will be expected to go through the same process, and face the same constraints, as the “real life” decision-maker.

Why Cases? While exams and lectures provide you with the tools and models to make good business decisions, hands-on practice with decision-making is important to build your capability as a business decision-maker. Cases simulate the messy, integrative, limited-information circumstances faced by decision-makers every day and allow you to develop and practise decision-making skills in a low-risk situation where a bad solution will not result in damage to a real company. Students also learn which theories are relevant to understanding and resolving the issue and apply them appropriately. Furthermore, theories that appear to be simple and straightforward in the classroom must be adapted based on the situation at hand. There is no universal right or wrong way to solve a problem. Decision-makers must learn to modify and apply the theory on the basis of their experience, and use what fits. Finally, when you write up a case for hand-in, you also develop proper business writing skills.

Case Frustrations Incomplete/irrelevant/excessive information: Any “real life” decision-maker will tell you that he/she must often make decisions without perfect or complete information and within tight time constraints. You will experience the same frustrations. You may also feel overwhelmed by the amount of information in the case and confused about what is relevant and what can be ignored. This is necessary in order to truly experience realistic decision-making scenarios. No perfect solution — only well-justified ones: You will also find that often there aren’t clear cut, right or wrong answers. Although there are poor solutions and approaches, there is often more than one way to address the case issue well. The best solution is often the one that 28

© Captus Press Inc. 2019-05-24. Draft for Author Review. All rights reserved.

Introduction to the Case Method maximizes the positives while minimizing the effects of the negatives, and is supported by thorough research, analysis, and critical thinking.

What Is Expected? Thoughtful and thorough analysis There are many ways to solve a problem, either by using different solutions or by using different solution implementation approaches. What every instructor will tell you, and what you will discover in your professional life, is that thorough and insightful analysis is ALWAYS expected. This means continuously going beyond the facts. The secret to doing this is always asking two questions: “Why?” and “So what?” A good case analysis requires a good understanding of the causes and effects of a problem or situation to thoroughly solve it, as well as the effects your solution will have and how to implement it well. If your analysis is thorough and your suggested solution(s) logically flow(s) from the analysis, your solution may be very different from your classmates’ and still receive a reasonable grade if it is well supported. Use evidence from the case, your understanding and research of the industry, environment, or organization, theoretical models, and your issue tree (to be described below) to support WHY you believe your recommendation is supported, WHY you have selected certain decision criteria, WHY your implementation should roll out as you suggest. You should describe your expected outcomes and WHY you believe these outcomes are likely to be achieved. You must outline an implementation plan and be prepared to justify WHY these are the steps needed to implement your recommendations.

Anatomy of a Case Solution Any case solution will have these elements to it:

• Identification of the immediate and underlying problem/issue/opportunity, as well as implications

• Alternatives for addressing the issue/problem/opportunity (provided in the case, provided by you, sometimes both)

• Decision criteria (what measures will we use to compare the alternatives) • Recommendation (best alternative), as well as implications • Implementation (what actions must we take in the short, medium, and long term to make the recommendation a reality)

• Risks and contingency plan (what might go wrong when we are implementing our recommendation and what can we do to reduce or address this risk) Below I will outline how to read and understand the case quickly and effectively, and how to execute an insightful analysis. 29

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LAB #1

Case Analysis — How to Analyze the Case Where do you start? How do you think through the case? The following format provides a structured, logical process to guide your analysis. A note of caution is necessary, however. This is only the process for thinking through the case; it is not the process for writing up the case.

Step 1 — Reading the Case Quickly and Effectively Most students begin their case analysis by reading the case from start to finish. This often results in frustration and feeling lost and overwhelmed by the amount of information in the case, particularly when cases are more than 5 pages long. To avoid this and improve your case analysis, you should first “skim” the case to get a rough idea of what it is about. This will ensure that a closer reading will be more focused, organized, and productive. Using this approach will take you less time to read and analyze the case well. 1.

Read the opening and closing paragraphs (two to four paragraphs in total) of the case. This will give you an idea of what you are being asked to do or resolve in the case, who the decision-maker is, and the time period and time constraints faced.

2.

Read the headings of the case so you know what information to expect and where you might find it.

3.

Look at the exhibits, and look for trends, problems or strengths. For example: (a) Changes in revenues and expenses, as well as relative proportions: i.e., if revenues went up by only 10%, why did expenses go up by 20%? How much do we spend on certain key activities, such as marketing, in comparison to our peers? Are we seeing results when we increase certain expenditures, like spending more on marketing? (b) Product mix: i.e., what proportion of revenue and expenses/contribution does each of our products create? Which ones should we therefore spend more energy on to increase profits? (c) Market share information: i.e., what percentage of the market do we hold? How much do our competitors hold? Is the market concentrated in the hands of a few large competitors, or is it fragmented in small pieces among many? Does a particular competitor hold a large portion of a particular market segment?

The objective of skimming is to answer the following questions:

• Who are you, i.e., who is the decision-maker, and what position does he/she hold? • What is/are the issue(s)/problem(s)? What are the aspirations of the decision-maker and/or the organization? What decision must you make? What models are therefore relevant to doing a rigorous analysis of the problem and/or putting together a strong solution?

• Why has this issue appeared/why is a decision needed? • When does the problem/issue occur (time context — year, season, date), and what is the deadline by which it must be resolved? 30

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Introduction to the Case Method

• Where is the case taking place — the setting, i.e., company name, country, department of the company?

• What exhibits are provided? What insights can I draw from them quickly and independently of the written case? Now you are ready to go through a detailed reading and analysis of the case in order to generate the elements of case analysis identified below. Having identified what the issues and relevant models are will help you pick out the important information more quickly and easily as you read. Make notes in the margin, highlight as you read, and record your ideas and reactions to what you are reading. Note what is fact and what is opinion in the case information. The case summary sheet at the end of this reading will help you organize your thoughts and observations in one location so you can easily sift through the analysis and support your recommendation.

Step 2 — Read Thoroughly and Prepare an Analysis of the Case ./

THE CHARACTERS Identify your role in the case and who has asked you to conduct the analysis. Most cases will place you in the position of the decision-maker. Occasionally you will be asked to conduct an analysis and make a recommendation to the decision-maker. Regardless of which approach is used, it is important to consider the position, capabilities, and preferences of the decision-maker for two reasons: 1. It determines what kind of recommendations you can make. The position of the person you are reporting to determines what types of options can be executed, and which are beyond the scope of their position. This is critical for understanding constraints in alternatives or implementation, and decision criteria that might exist due to politics, capabilities, or preferences. For example, your TA has the authority to slightly adjust how much time is spent on various topics in lab and what kinds of activities are used to explore them. Your TA does not have the authority to change course content, or totally change the topic and activities to be covered in a lab. 2. In understanding the decision-maker ’s preferences and character, you will be better able to tailor your analysis to address his concerns. For example, let’s say you have been asked to evaluate which competitor to acquire because the decision-maker wants to grow through buying up competitors. An insightful analysis will begin by evaluating how much growth (while also considering risk) would be achieved by each alternative acquisition. What happens if in doing your analysis you determine that an acquisition of any kind would be a bad decision because it doesn’t achieve a good level of growth, given other growth alternatives or given the amount of risk involved? How do you communicate a recommendation that is outside of the apparent preferences of the decision-maker? If you recognize that the ultimate preference for the decision-maker is growth, then your analysis should explain why acquisition will not achieve that ultimate objective of achieving growth. 31

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LAB #1

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THE CONTEXT Identify when and where the situation is occurring, and how quickly a decision must be m ade. It is important to recognize where and when a situation is occurring and how quickly a decision must be made and/or implemented because the first rule of any case analysis is that your analysis, recommendation, and implementation must recognize the constraints and opportunities of the given time and location context. For example, if a case is taking place in 1990, it would not be realistic to suggest using Facebook and Twitter as part of the solution or implementation. Furthermore, a very insightful analysis will recognize important contextual issues such as high interest rates, labour shortages, social trends, etc., or that the location has particular cultural or political characteristics, even if these are not provided in the case document.

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THE ISSUES Identify the issues and/or decisions the decision-maker must make. This can be one of the most difficult and crucial parts of case analysis. You are unlikely to come up with a good recommendation if you do not correctly identify the issue and its implications. Often you will be confronted with a series of issues, some of which appear to be interrelated, and others that may be totally separate and unrelated issues (secondary). You must take care to separate immediate issues and their underlying causes from secondary issues so that you focus your recommendation appropriately. The following breakdown may help in distinguishing the issues in a case: Immediate Issue

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This is the specific decision/issue/opportunity faced by the decision-maker. It must be resolved in your recommendation.

Underlying Issue —

This is often the root cause of the immediate issue or a more generic issue that is ever-present or common that has led to the immediate issue. For example, if the immediate issue is that revenues are declining, the underlying issue may be that the firm’s customers aren’t making repeat purchases or perhaps the number of customers has declined. It could also be that its prices have been forced down by competitors or customer returns due to dissatisfaction. If the underlying issue is solved, the immediate issue is less likely to occur again in the future. You therefore also need to address the underlying issue in your analysis, either through the recommended solution or as part of your implemen tation plan.

Secondary Issue

This is not necessarily solved when the immediate and primary issues are solved. Secondary issues should be acknowledged but are not always necessary to solve.

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You must identify all important problems/issues as specifically as possible. A good case analysis and solution will identify and recognize the relationship between the immediate and underlying problems/issues. When multiple problems or issues are identified, you are expected to use your analysis to bundle them and/or prioritize them and address those that are most important. 32

© Captus Press Inc. 2019-05-24. Draft for Author Review. All rights reserved.

Introduction to the Case Method Remember ... the case may not involve a problem per se. Often the case involves an opportunity or an issue that needs to be dealt with. Whatever it is, always finish off by knowing the questions that the case is asking, and be sure to answer them.

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INSIGHTFUL ISSUE IDENTIFICATION Identify the drivers of the issue An insightful case analysis and recommendation will begin by understanding the issue confronting the decision-maker and the various elements that are related to it. The easiest way to do this is to decompose the issue into its subcomponents using a tree diagram (see Figure 1 below). For example, if you have been given a case that involves a company with declining profitability, you begin with profitability and identify the factors that affect it (in this case, revenues and costs). You then move to the next level, identifying what affects those factors (revenues are a function of quantity sold and price paid). This tree could go on forever, but moving four levels below the main question is often enough to give you a good start on your analysis.

Figure 1 Issue Tree Profitability

Immediate issue

Underlying issue / possible solution

Revenues

Purchases per customer

Costs

Number of customers

Fixed costs

Sale price

Labour costs

Possible recommendations

Increase market share

Expand to new markets

Variable costs

Marketing costs

Increase productivity through training & incentive

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© Captus Press Inc. 2019-05-24. Draft for Author Review. All rights reserved.

LAB #1

At each level you can either use the generic factor (notice the right side of the diagram that simply identifies “Revenues” and “Costs”) or turn it into a question: you can say, “How can we increase profitability”; then, realizing that profitability is a function of revenues and costs, you can ask, “How can we increase revenues” and/or “How can we decrease costs”. Ideally, by the third or fourth level of your issue tree, you should be starting to identify specific actions that could be your recommendation. You can create your issue tree either before or after reading the case. Doing this will allow you to identify possible solutions and will guide the problem-solving process. If you do this before you engage in a detailed reading of the case, you will better understand the underlying factors of the main case question. Furthermore, you will be able to more quickly and easily identify and extract valuable insights and effectively use the information provided in the case as you read. There is no single correct way to create an issue tree. However, as you identify issues you must make sure that the boxes you create are MECE (mutually exclusive and collectively exhaustive). This means that all of the main factors that affect any box are listed, and that they do not overlap. For example, revenues are only affected by price and quantity. There are no other factors (which means you have met the CE criterion of MECE), and price and quantity are not overlapping factors (ME). Now, as you read the case and identify which of the “boxes” in your diagram are creating the issue or may be a part of the solution, you can then identify which models and theories may be useful in developing an insightful solution. The issue tree will also be helpful in developing a hypothetical recommendation, doing the research, formulating the arguments needed to support your recommendation, and describing its impact qualitatively and quantitatively.

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MODELS AND THEORIES Identify and app...