Case Study Analysis Framework

Case Study Analysis Framework

• Case studies often involve analyzing business situations, such as expanding into new markets, launching new product lines, or responding to market changes.
• The Business Situation Framework is a tool for evaluating these situations, focusing on four key areas impacting profitability:
  • The company itself
  • The company's products/services
  • The company's customers
  • The company's competitors/market

Company Analysis

• Internal Factors: Company strengths, weaknesses, specializations, and expertise need evaluation.
• Tangible/Intangible Assets: Existing assets (brand loyalty, human resources), compared with competitors.
• Human Resources: Skills, experience, and expertise of the workforce.
• Physical Resources: Cash for operations, premises, machinery, distribution channels.
• Partnerships: Partnering with other businesses or individuals with necessary resources (e.g., business angels) can be beneficial for start-ups or small businesses.
• Unique Selling Proposition (USP): What distinguishes the company from its competitors? This can be product-related, but also strong human resources, brand reputation, or unique distribution channels.
• Financial Situation: Profitability, cost control, fixed costs, capital structure, and historical performance (1-10 years). Evaluate sales trends, profit margins, and potential financial difficulties.
• Capital Structure: Debt-to-equity ratio affects risk perception by lenders and potential interest rates. High gearing (high debt) means higher risk.

Product/Service Analysis

• Product/Service Offerings: Identifying types of products/services.
• Product Life Cycle: Determining the stage of the product's life cycle (introduction, growth, maturity, decline).
• Advantages/Disadvantages: Assessing strengths and weaknesses of the company's products/services.
• Differentiation: Evaluation of how products differentiate from competitors' offerings. Differentiating offerings can open the possibility of valuing the product based on demand or to use cost-based pricing.
• Pricing Strategies: Use demand-based pricing if the product is differentiated or cost-based pricing if cost is the only differentiator..
• Intellectual Property: Patents, copyrights, and trademarks protect products and prevent competitors from replicating them easily.
• Positioning: How are the products positioned in the market (luxury vs. basic)?
• Cross-selling and Up-selling: Additional opportunities to generate revenue from existing customers through complementary products/services or upgraded versions.
• Supply/Demand: Demand and supply dynamics (complementary and substitute goods) and their impact on sales should be considered. Should the business develop new products or promote its current products?

Customer Analysis

• Customer Identification: Identifying the company's customer base and understanding their motives.
• Customer Expectations: Identifying customer preferences and expectations, including the desired avenues of purchase (online, in-store, or both).
• Customer Segmentation: Segmenting customers (age, gender, location, occupation, etc.) can help determine target markets and tailor products/service offerings.
• Willingness to Spend: Assessing customer spending capacity and how it is affected by prices.
• Price Elasticity of Demand: Measuring how drastically customer demand changes due to pricing changes. Price-elastic products tend to be necessities or items with many alternatives. Conversely, price-inelastic products are harder to replace or unique.
• Market Share, Saturation, and Industry Growth: Analyze market share, expansion, market saturation, and industry profitability. How does the company's market share compare to competitors?
• Customer Concentration: Assessing the concentration of customers and their impact on the company's position as the supplier. What is the company's market share, and how stable/predictable is that share in terms of the business cycle?

Competitor/Market Analysis

• Competitor Analysis: Identifying competitors, understanding market shares, competitive strategies, strengths, and weaknesses.
• Competitor Behavior: Analyzing competitor strategies, including collaboration, price wars, and negative advertising campaigns.
• Barriers to Entry: Identifying barriers to entry in a new market (financial, regulatory, competition, risks).
• Market Regulation: The regulatory environment's impact on the business (specific regulations for certain industries).
• Market Structure: Identifying the structure of the market - is it fragmented, a monopoly, or an oligopoly? This determines buyer/supplier power.
• Market Segments: Identifying and analyzing different market segments, including the segments’ growth/decline and profitability and how they have evolved over time.
• Market Challenges: Assessing market problems, general industry stability, and how companies are positioned to handle those challenges (e.g., recessions). Are competitors better placed to respond to these challenges?