Analyzing and Writing a Case StudySupplemental Reading – Chabros / Dubai
Professor Kelly Ashihara
What is Case Study?
Case Study is an integral part of strategic management
Purpose: to provide students with experience in actual situations and industry and ask them to address issues real managers had to respond to given a situation over a number of years.
Cases provide student with real situations and improve analytical skills
Cases illustrate theory and content in strategic management and allow you to apply what you’ve learned and make decisions. As we learned, top managers enjoy the thrill of learning and problem-solving in an uncertain environment
Case studies allow you to improve team work skills and participate in class in a substantive way and present your ideas to the class.
Analyzing a Case Study
Case Studies allow you to apply your theory that you’ve learned in this class and through past coursework.
Generally, cases include:
1. General background, history and development of the case
2. Identification of the company’s internal strengths and weaknesses (SWOT)
3. Analysis of strategies considering internal core competencies and external factors (PEST and competition)
4. Analysis of how to reach target goals and what strategies to set such as product development, market expansion, pricing, vertical integration, external partners.
5. Core Recommendations
Product types and product lines
Brand name reputation
Rising manufacturing costs
Decline in R&D
Growth without direction
Conflict or politics
External competitive situations
External market factors
Poor financial management
Change in margins
How can strengths and weaknesses be balanced against opportunities and threats?
Can you reach your goals by continuing to pursue the current path or do you need to change directions?
Are there functional or corporate strategies to pursue – what are your conclusions?
Expand product types and product lines
Expand manufacturing Marketing
Expand to new markets
Source new materials
Gain scale through new products and use of existing infrastructure
Leverage differences found in competition
Attacks on core businesses
Increases in competition
Change in consumer taste
Rise in substitute products
Potential for takeover
Changes in demographics
Rising labor costs
Slower market growth
Change in product tastes / market
Analyze Structure and Control Systems
The aim of analysis is to identify key issues in the structure and control that open up opportunities and finding which opportunities produce the most value.
Making recommendations: The quality of your recommendations will be a product of the thoroughness of your analysis. Wherever possible, try to combine and think of different factors (multiple exhibits / numbers that support your case)
Your team should be specific whenever possible in terms of diversification of products, level of integration, changes in functional products or direction and reasons what certain strategies – you believe, will improve the profitability or situation of the company.
Case Study Supplemental Reading
Palm shaped islands built and developed by state owned Dubai World
Dubai in 2008
Historically, oil based economy
Oil is sold in Petrol dollars linked to the dollar
Estimated 20% of world cranes in Dubai.
Sept 2008, $1.5billion dollar Atlantis resort on palm-shaped island opened. $25,000 / night
Banks reigned in loans, oil prices dropped
Dubai home prices dropped 50% from 2008 peak
Emirates Central Bank made $3.6 billion available as of Sept. 22nd 2008, speculation that that may not be enough.
Many building projects without secure financing may be dropped
2007 – 2008 Financial Crisis
Like all previous cycles, the seeds of subprime meltdown were rooted in unusual circumstances.
In 2001 – the US economy had a mild recession – to keep the recession away, the Federal Reserve eased capital by lowering interest rates 11 times from 6.5% in May 2000 to 1.75% in Dec. 2001. This created liquidity. Borrowing money was cheap which increased home sales (dramatically).
Question is not just IF you have a home, it is how MUCH home should one live in / can one afford.
In June 2003, the Fed lowered interest rates to 1%, the lowest rate in 45 years.
Bankers repackaged loans collateral debt obligations (CDO) and passed on debt.
2007 – 2008 Financial Crisis
By 2004, homeownership peaked at 70%, home prices started to fall which led to a declining by 40% in new construction.
During Feb – March of 2007, more than 25% of subprime lenders filed bankruptcy.
According to 2007 news reports, financial firms and hedge funds owned more than $1 trillion in securities backed by these now failing subprime mortgages.
Central banks coordinated to prevent worldwide crises. The Fed started to reduce rates.
The US Gov’t came out with the National Economic Stabilization Act in 2008 to create $700 billion,
Central banks in England, China, Canada, Sweden, Switzerland, European Central Bank cut rates.
Dollar slides to 2009 low versus Euro
As of May 22, 2009, the dollar fell to the lowest level versus the Euro as traders looked for alternatives to the U.S. dollar amid waning fears about the global economy's prospects.
The euro rose to $1.3996 on Friday, after passing the key $1.40 mark to touch $1.4049 earlier. That was up from $1.3904 in late North American trading Thursday.
"In the near-term, the stars are aligned against the U.S. dollar." "If the news stream is good, we are told investors are less risk averse and do not need the dollar's security. If the news stream is poor, we are told the U.S. is in horrific shape and the budget deficit and Fed's balance sheet will swell even more" to the detriment of the dollar.
The British pound also rose to its highest level since November versus the U.S. currency, shaking off a Standard & Poor's report Thursday saying the ratings agency might downgrade the U.K.'s AAA credit rating. The pound traded at $1.5925 from $1.5848 late Thursday.
Several analysts' notes earlier also acknowledged reports about concern that the U.S. will maintain its AAA credit rating, after the U.K.'s top-tier rating was given a negative outlook by Standard & Poor's on Thursday.
"We would have to see a continuing onslaught of real deterioration in the U.S. financial situation for its rating to come under threat," he said. "The dollar's issues are mostly related to quantitative easing and how inflationary that might be. Also, risk aversion has lessened considerably" in recent months.
Minutes of Fed policy makers' last meeting released Wednesday indicated a possibility that the Fed would buy more Treasury or mortgage-related debt. Those kinds of programs to keep borrowing costs low for consumers, companies and home buyers are considered quantitative easing and negative for the currency
Dollar slides to 2009 low versus Euro