Welcome to the

Case Analysis Coach
This tutorial is designed to start you down the road toward becoming an expert at analyzing business cases. You'll learn how to identify and define the business concepts raised by a case, as well as to develop analysis-based solutions, recommendations, and action plans. These skills will prepare you for class discussions and exams. You will have access to a complete real case, called Komatsu Ltd. and Project G., so that you can apply what you learn to a concrete example. You will also get other helpful resources, such as a Case Analysis Worksheet and samples of classdiscussion notes on the Komatsu case that were prepared by real students like you. In addition, smaller excerpts from other real cases are used to illustrate some of the steps in case analysis.

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Introduction to Case Analysis
Types of Cases
The "case method" is an approach to learning that encourages students to extract useful lessons from the experiences of others ("cases"). Students study accounts of specific events in order to discover general principles that they can apply in other situations. Cases tend to fall into one of three categories that sometimes overlap:
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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.

Tip:

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 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, sometimes called Best-Practice or Worst-Practice cases, portray situations that are interesting or remarkable, usually because they are especially 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 in-between and those outcomes must be evaluated to provide a clear assessment.

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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.

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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.

Tip: Ways of Teaching with Cases
The Harvard approach to cases is inductive. The inductive approach begins with specifics and moves to the general. This approach may be different from what you are used to. Another common approach to cases is deductive. It provides students practice in applying a general principle or framework they've already been taught. It begins with a broad structure and asks students to apply it to specific events; moving from general to specific. Note that this is opposite the inductive approach. Cases can also be used to illustrate the application of general principles to realistic contexts, as a way of broadening understanding of those general principles. There are so many different possible uses of cases that this tutorial cannot, of course, address all of them.

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

Try It
Our first "Try It" tip is to print and then read the assignment questions for Komatsu LTD. and Project G.

From Case:

Komatsu Ltd. and Project G

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? Download the full Komatsu case (240kb - pdf)

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One Approach to Case Analysis

The figure to the left describes 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.
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Getting Oriented Identifying Problems Performing Analysis Action Planning

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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 well-defined 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.

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Case Analysis Overview
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. Illustrated here:

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.

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Your First Pass

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.

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).

Try It
Using the Komatsu LTD and Project G case complete a "First Pass" now.

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Defining the Problem
Based on your first pass, take a preliminary stab at writing a sentence or two that summarizes: o o

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.

From Case:

Komatsu Ltd. and Project G

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.

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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 sub-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.

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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.

From Case: Komatsu Ltd. and Project G – View Marked Up Case

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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.

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From Case:
 

Komatsu Ltd. and Project G

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; LeonardBarton, 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)

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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.

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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.

From Case:


Komatsu Ltd. and Project G

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

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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.

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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.

From Case:

Komatsu Ltd. and Project G

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.

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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.

From Case:

Komatsu Ltd. and Project G

Example #1 - View In Full Case 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 - View In Full Case 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: 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").

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Analysis Types: Quantitative
Quantitative data—such 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:
  

Komatsu Ltd. and Project G

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.

Marked Up Example of Exhibit 4

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Identifying Useful Data
To maintain your analysis priorities, first identify what data you have and what data you need. Note where in the case you might find the data you require. For each of your top priorities, list the sources of data that look most promising. A common misconception is that crunching numbers leads to one solution that is beyond debate. Numbers often provide useful insights, but they usually also give an incomplete picture. The vast majority of cases won't hinge on a vital calculation that yields a single right answer. You'll have to interpret the numbers you crunch, just as you interpret what you read in the text. In short, focus on what the numbers actually mean. Davis Maister's article, "How to Avoid Getting Lost in the Numbers" outlines a process for doing just that.

Try It
List both the quantitative and qualitative data that you have highlighted. Then prioritize them.

It's important to read between the lines because no case describes the full complexity of every event and because case writers aim to maintain a neutral voice. For each factual statement or description in the case, ask what might be missing, why it's not there, and what implications its absence has. To organize your facts, you can draw a cause-and-effect diagram, a timeline, or some other kind of visual organizer. You might also prioritize facts in different ways. Issues of strategic importance to a firm are not always urgent; nor are urgent issues necessarily strategic.

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From Case:

Komatsu Ltd. and Project G

At the end of the analysis of the Kawai era, you may have noticed the coming shift in exchange rate. Exhibit 3 is very revealing. Komatsu had dealt with unfavorable exchange rate shifts during the Kawai era. Exhibit 3 shows that the yen strengthened from 360 to 236 yen/dollar between 1966 and 1982 (when Kawai turned over the reins to Nogawa). That's about 16 years, at a rate shift of 124-on average, a little less than 8 per year. In the five-year period from 1982 to 1987, the exchange rate shifted by 111, or more than 20 yen/dollar per year. In fact, if you look closely, between 1984 and 1987, it shifted (after a favorable move in the rate between 1982 and 1984) by 131 in just 3 years, or almost 45 per year (Exhibit 3). So a very big factor that hit Komatsu in the mid-1980s was a new and dramatic shift in the exchange rate. Combine that with the overseas percentage of construction-equipment segment sales (67% in 1982, according to Exhibit 3), and you've got the makings of a very big problem. The case also mentions "falling demand, worldwide price wars," and "heightened trade frictions." In short, market conditions shifted very rapidly in a manner very unfavorable to Komatsu in the mid-1980s. Results are discernible from the exhibits:    After growing almost 15% per year from 1975 to 1982, Komatsu's construction equipment sales declined by 20% between 1982 and 1984. Net income dropped 35% between 1982 and 1984. Percentage of sales outside Japan, after rising for many years, declined from 58% in 1982 to 31% by 1988. Given that total sales were stagnant or declining, this implies an overseas sales drop of almost 50%. The percentage of sales from construction equipment declined from 80% in 1982 to 69% in 1988 (Exhibit 2).

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Matching Frameworks to Data
As conclusions or evidence in favor or against certain alternatives begin to emerge, you might spot connections to principles, frameworks, and theories that you've already covered in class. It's often worthwhile to try applying what seems like a relevant framework to the raw data or to data that have been transformed in some way by your analysis. Once you've begun interpreting your analyses in the context of a framework, you'll often start to see more opportunities for analysis, suggested by the framework itself. It's usually a good idea to follow these paths, although not all will prove to be fruitful.

From Case:

Komatsu Ltd. and Project G

Bringing In Outside Concepts "Strategic Intent" is a concept developed by Gary Hamel and C. K. Prahalad to explain the success of certain Japanese companies against bigger and better-resourced international rivals in the 1980s. In an influential 1989 Harvard Business Review article, the authors explained that while Western companies focused on scaling back ambitions to match resources, Japanese companies leveraged resources by accelerating the pace of organizational learning, trying to attain seemingly impossible goals, fostering the desire to succeed among their employees, and maintaining that desire by spreading the vision of global leadership. Hamel and Prahalad describe four techniques involved in strategic intent: building layers of advantage, searching for "loose bricks," changing the terms of engagement, and competing through collaboration. If you had read their article before encountering the Komatsu Ltd. and Project G case, you might see ways to use the concept in your case analysis (in fact, Hamel and Prahalad discuss Komatsu in developing their notion of strategic intent). Here are a few ways you might relate this concept to the case: Kawai's goal, in 1964, to "catch up and surpass Caterpillar" describes a desired leadership position and establishes criterion for the organization to use to chart progress. This goal "captures the essence of winning," as Hamel and Prahalad put it.  Building Layers of Advantage Komatsu builds advantages in quality, cost, and brands, moving from less-defensible advantages, such as lower wage costs, to more-defensible ones, such as high quality, improved processes, and global brands. Searching for "Loose Bricks" Komatsu went after product segments (e.g., hydraulics) and geographic territories (e.g., newly industrialized countries) in ways that were not immediately threatening to Caterpillar, thereby muting the larger company's inclinations to respond. Changing the Terms of Engagement Komatsu, like some other Japanese companies during the 1980s, drove quality much higher, while also driving down costs. This shifted the basis of competition toward quality and debunked the historical presumption that higher quality came only at much higher prices. Competing Through Collaboration International partnerships such as a 50/50 venture with Dresser / International Harvester

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The idea of strategic intent may also be used in other ways when analyzing this case. See if you can find more evidence of the usefulness of strategic intent in the case, or other examples that show how the concept fits with Komatsu's actions.

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Revisiting, Refining, and Reflecting
Sometime near the midpoint of your analysis—use your judgment to decide when—take a few minutes to revisit the layers of the case again. At times the results from a case analysis disorient you, and you realize you had something wrong earlier. Your analysis process might go something like this... o Layer 0 - Getting Oriented o Layer 1 - Identifying Problems o Layer 2 - Performing Analyses o Reflection o Layer 3 - Action Planning During the reflection phase consider these questions: o Do you need to refine your original problem statement? o Has your sense of what the real problem is evolved? o Do you see any new directions for analysis that weren't obvious before? Then take some time for reflection to identify general lessons that might apply to other cases. Odds are there are several such lessons.

From Case:

Komatsu Ltd. and Project G

Result of reflection: You have now analyzed the Kawai, Nogawa, and Tanaka eras. To begin to address the assignment question about how effectively Mr. Katada has taken charge, you will probably want to examine the state of the company he inherited. 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 do core competencies that serve a company very well in certain contexts become core rigidities when conditions change? [You have largely seen how this happens through your analysis so far.] How might one arrive at a strategy after a shift in environments that has made core competencies into core rigidities? Also, how can one formulate strategies to adapt to changing conditions? More specifically, 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:

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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. Core competencies have a way of becoming core rigidities. The longer they're sources of success, the more rigid they'll be when they're no longer sources of success. Line-management experience gives a leader credibility to create change (+, Tanaka). It may, however, also give a leader habits that make it difficult for him or her to adapt or even see the need for change (-, Nogawa).

Many other possibilities exist. You might, for instance, use the example of the case to refine your interpretation of a framework, if applicable.

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Knowing When to Stop
How do you know when to stop analyzing? A well-written case will almost always cough up one more relevant fact or interpretation that's tempting to consider. But as a practical matter, you need to use good judgment to determine how to end the process at some point. A bit of trial-and-error is perfectly normal. Some of the things you decide to analyze might provide little insight, and that's okay. Other things don't yield much at first but turn out to be more valuable later, after you've investigated further. So don't throw anything away or set anything aside too quickly. One approach is to stop analyzing when you're not learning very much anymore. If when revisiting your problem statement and recommendations, you find that you're not changing them very much, you're getting close to being finished. Of course, it could be that you're not learning more simply because you're not digging very deeply into the case. In that situation, the clue would be that your analysis so far doesn't seem very substantial. If this happens, try putting the case aside for a few minutes and then coming back to it or talking it over with someone else. Approach the case in a different way-perhaps read it from back to front. In short, try to jolt loose an insight that will help you move forward.

Tip:
The Case Method is sometimes called "Education for Judgment." Click here to learn more

Education for Judgment
The Case Method is sometimes called "Education for Judgment." This description emphasized a truth about case analysis: You have to make your own judgments about what to do next. What to pay attention to and what to disregard. There's no magic formula, thus no unambiguously right or wrong next step. At this point, you've gotten oriented and done a careful read, so you've got all the facts "on the table." Now what do you do? This is one of the most difficult moments in case analysis-you need to begin to structure your investigation. What you do next depends on your own judgment, how you decide to structure your investigation, based on your assessment of how this particular case's structure, and how it has revealed its meaning so far.

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From Case:

Komatsu Ltd. and Project G

The last statement we made, after our careful read of the case, was 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.” We are arguably now well positioned to rewrite this statement to something a bit more specific: “How do core competencies that serve a company very well in certain contexts become core rigidities when conditions change? [We have largely seen how this happens through our analysis so far]. How might one arrive at a strategy after a shift in environments that has made core competencies into core rigidities? Also, how can one formulate strategies to be adaptive to change conditions? More specifically, 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?” While this new problem statement is more specific it has not changed very much. It seems clear now that it is time to stop.

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Action Planning

Recommended action plans should state what would be objectively best for the case company given its goals, resources, and situation. But they should also outline possible implementation objectives and hurdles. Action plans should include short-, medium-, and long-term steps that will concretely carry out recommendations like these. Real-life situations often have hidden agendas and nuances that can affect how an action plan is crafted. These elements are also relevant in the analysis of a full case, except perhaps for cases that are purely or primarily quantitative. At some point, you might need to develop your favored case action plan in a degree of detail that exceeds that of alternative plans. If you're operating with space constraints (on a word-limited case exam, for instance), you may need to explore just one alternative in full detail, rather than developing all alternatives at the same level of detail.

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An Approach for Action Planning
Step 1: Identify Tasks Brainstorm all of the tasks that you need to accomplish your objective. It's helpful to start this process at the very beginning. What's the very first action you'll need to take? What comes next? Should any steps be prioritized to meet specific deadlines, or because of limits on other people's availability? Step 2: Analyze and Delegate Tasks Now that you can see the entire project from beginning to end, look at each task in greater detail. Are there any steps you could drop without compromising your objective? Which tasks could you delegate to someone else on your team or to a freelancer? Are there deadlines for specific steps? Do you need to arrange additional resources? Step 3: Double-Check with SCHEMES Use the SCHEMES mnemonic to check that your plan is comprehensive. SCHEMES stands for: o o o o o o o

Space. Cash. Helpers/People. Equipment. Materials. Expertise. Systems.

You may not need to think about all of the SCHEME components to complete your project. For a small internal project to streamline the format of your team's reports, for instance, you might need to think only about Helpers/People, Expertise, and Systems. An action plan is a list of tasks that you need to do to complete a simple project or objective. To draw up an action plan, simply list the tasks in the order that you need to complete them. As you finalize the process, keep in mind the short-, medium-, and long-term horizons for the project. Action plans are useful for small projects, as their deadlines are not especially tough to meet and the need for coordinating other people is not high. As your projects grow, however, you'll need to develop moreformal project management skills, particularly if you're responsible for scheduling other people's time or you need to complete projects to tight deadlines. [adapted, in part, from Mindtools.com]

Try It
Summarize your analysis to this point. Include the evidence you have accumulated that supports one interpretation over another.

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From Case:

Komatsu Ltd. and Project G

The case contains relatively little detail on actual implementation. Nevertheless, your analysis probably provides what you need to recommend whether to move forward with Katada's new approach, to adjust it, or to abandon it. You can also easily anticipate that the change to the new approach will be difficult, for many reasons:   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.

 



Example of an action plan

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Decision Alternatives
At this point, stop to list a few possible recommendations for the case and think about possible action plans. These deliverables are, after all, the ultimate objectives of your analysis. Try not to restrict yourself to one solution. Let your conclusion emerge from the evidence; don't force the evidence to fit your conclusion. Remain open-minded as you proceed to the next step. List possible recommendations or actions based on your analysis of the case.

Try It
List a few recommendations or actions that come from your analysis of the case.

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Firming Up Recommendations
When you finish your case analysis, you still must articulate your recommendations and your action plan. You also must assemble the arguments and evidence needed to defend those proposals. The format of your case analysis will depend on what you're being asked to do. You might take one approach if you're preparing for an in-class "cold call" or a class discussion, but another approach if you're writing a paper or preparing for a team presentation, or still another if you're taking an exam. For examples of how real students have prepared analyses of the Komatsu case for different purposes, click on these links.
• •

Komatsu Case Notes: Student 1 Komatsu Case Notes: Student 2

(72kb - pdf) (65kb - pdf)

From Case:

Komatsu Ltd. and Project G

In 1991, Komatsu President Katada decides to radically change the company's organizational structure and strategic objectives, from simply "surpassing Caterpillar" to the broader "Three G's-Growth, Global, Groupwide." He also wants the company to change its image from that of a construction equipment manufacturer to one of a "total technology enterprise." To achieve the stated growth goal of doubling Komatsu's sales by the mid-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. To implement the globalization goal, Komatsu must acquire new subsidiaries in foreign locations and relinquish more decision-making control to the existing ones. For example, if previously a central Komatsu procurement person had sourced the raw materials for the entire company, now the subsidiaries will need to strike deals with local vendors (if, for example, they could provide faster delivery, more specialization, or better knowledge of local market needs). To 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.

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Revisiting, Refining and Reflecting
In most case discussions, the professor will ask for general lessons learned (although sometimes students might be expected to develop those on their own outside of class). To prepare for this part of a case discussion, take a few minutes at the end of your analysis to think about lessons that you might apply to other cases. List four or five major takeaways that you think your case analysis has revealed.

From Case:

Komatsu Ltd. and Project G

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.



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Other Cases and Case Analyses
The approach to analysis we've outlined in this tutorial is sound, as it has been tested in real classrooms. Nonetheless, given the wide variety of case types and topics, the approach may sometimes lead you to a dead end when you come to a new case. After all, each case is unique. When that happens, don't give up. Use your judgment to try something a different way. If moving to more analysis seems like a problem (because you don't know what to do next), try going up in layers. You also might revisit the context, the problem definition, or your past ideas about action plans. 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. Good luck!

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