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Case studies Introduction A summary of the case

analysis process C-2

Preparing an effective case analysis – the full story C-5

Case 1 Hearing with the aid of implanted technology: The case of Cochlear™, an Australian high-technology leader C-19

Case 2 The Australian retail wars: Coles Myer and Woolworths battle for brand value C-26

Case 3 eBay.com: Profitably managing growth from start-up to 2000 C-32

Case 4 Gillette and the men’s wet-shaving market C-50

Case 5 Gunns and the greens: Governance issues in Tasmania C-70

Case 6 Growth at Hubbard’s Foods? C-79

Case 7 Incat Tasmania’s race for international success: Blue-riband strategies C-89

Case 8 The Golden Arches in India: A case of strategic adaptation C-95

Case 9 Monsanto: Better living through genetic engineering? C-106

Case 10 Nucor Corporation and the US steel industry C-121

Case 11 Philip Condit and the Boeing 777: From design and development to production and sales C-152

Case 12 Resene Paints C-168

Case 13 Sony Corporation: The vision of tomorrow C-184

C-2

Introduction

A summary of the case analysis process Dallas Hanson University of Tasmania

Case analysis is an essential part of a strategic man- agement course and is also perhaps the most enter- taining part of such a course. The ‘full story’ that follows this summary gives you considerable detail about how to go about a case analysis, but for now here is a brief account.

Before we start, a word about attitude: make it a real exercise; you have a set of historical facts and use a rigorous system to work out what strategies should be followed. All the cases are about real companies, and one of the entertaining bits of the analysis pro- cess is to compare what you have said they should do with what they really have done. So, it is best not to check the Net to see current strategies until you have completed your analysis.

What follows is one analytical system, a fairly tight one that you may want to adapt according to how much time you have and the style of the case.

External analysis

Step 1 What industry is it? You must decide on this early. This is an important step, because it changes the analysis – for example, your industry analysis will yield different conclusions depending on what industry you determine.

Step 2 General environment analysis Analyse the six generic elements – economic, socio- cultural, global, technological, political/legal and demographic – and work out what the important facts are. There may be many issues and facts in each element, but you put down only the important ones. It is also important to avoid the common error of over- emphasis on the firm in question. So, assuming the firm operates in the Australian ice-cream industry, the demographic analysis may have this comment: ‘A large baby boomer generation is now becoming more health-conscious. This presents opportunities in health foods and healthy alternatives for conventional foods. It also presents opportunities for low-fat ice creams.’ Or, in analysing the demographics of the Cochlear™ firm, you may conclude that there is a global market of 1.8 million profoundly deaf people and that this pro- vides a huge undeveloped market for the implantable hearing devices industry.

Step 3 The industry environment Analyse the five forces (that is, supplier power, buyer power, potential entrants, substitute products and rivalry among competitors) and explain briefly what is significant for each. For example, what are the issues involved in new entrants into the industry? For

Introduction • A summary of the case analysis process C-3

the implantable hearing devices industry, these may include the need for understanding of intricate new technology, possession of a reputation in the global deaf community for safe and effective product devel- opment, and links to research institutions. This makes the industry hard to enter. Each force needs a brief dis- cussion followed by a short conclusion.

One extra consideration before you pull the anal- ysis together and work out if this is an attractive industry (the main conclusion) is: Is there a key force or forces in your industry? Porter argues that there is a key force in any industry, one that exerts more influ- ence than the other forces.

Now, is it an attractive industry? You need to explain, briefly, why or why not. Bear in mind that it is often not a clear decision because the forces are mixed – for example, there may be little concern about new entrants, suppliers or substitutes, but buyers may be fickle and rivalry high. In such cases, the key force analysis is very important

Remember: it is the industry you analyse, not the firm.

Step 4 Competitive environment Is there a strategic group that you need to take account of? What is the rivalry like in this group? What capa- bilities do the relevant firms have? What strategies do they follow? What threats do they represent?

Step 5 You now have material about opportunities and threats

It is easy to pull this together from the four steps you have now completed.

Internal analysis

Step 6 The firm’s resources, tangible and intangible

List all relevant resources. It is useful to distinguish between tangible and intangible resources. Remem- ber: firms have many resources.

At this point, if you have the skills and time, you can analyse the financial information that almost all cases provide. This provides material for a financial resources paragraph.

Step 7 Capabilities identification Here you make a list of capabilities. Capabilities tell you what the firm can do.

Remember: each firm may have a dozen or more capabilities, so include some that are very unlikely to be core competencies. This is a difficult step, because you must explain the capabilities carefully to indicate what the firm really does. For example, Cochlear has a capability for research in cochlear-related technol- ogy. It does not have a generic research capability.

Step 8 Core competency analysis For each capability, indicate which of the four tests for a core competency it meets. An easy way to do this is through use of a table. For example:

Rare? Valuable? Costly to imitate?

Non- substitutable

Logistics management in cochlear technologies Yes Yes No No

Research knowledge and skill in cochlear- related areas Yes Yes Yes Yes

Etc.