At some point in your business career you will likely be asked to build a case study. Whether it’s for school or for work, building a case study is a very methodical task. While case studies will differ across companies and sectors, your process should remain the same. When conducting a case study, you should try to include these core pieces: a summary of the company’s background, analysis of their background, the company’s internal strengths and weaknesses, their opportunities and threats, the external environment that they compete in, an evaluation of your SWOT analysis, and some recommendations to remedy potential issues you find. After figuring out which company you’re looking to examine, the first step will be to write a summary of that company’s background.
Summarizing a Company’s Background
A summary of a company’s background is just as it sounds — a brief synopsis of who the company is and what they do. Here is a summary of Ford Motor Co. found on CNNMoney’s website:
“Ford Motor Co. engages in the manufacture, distribution, and sale of automobiles. It operates through the following segments: Automotive, Financial Services, Ford Smart Mobility, and Central Treasury Operations. The Automotive segment includes the sale of Ford and Lincoln brand vehicles, service parts, and accessories worldwide, together with the associated costs to develop, manufacture, distribute, and service the vehicles, parts, and accessories. The Financial Services segment includes its vehicle-related financing and leasing activities at Ford Motor Credit Company LLC . The Central Treasury Operations segment engages in decision making for investments, risk management activities, and providing financing for the Automotive segment. The Ford Smart Mobility segment designs, builds, grows, and invests in emerging mobility services. The company was founded by Henry Ford on June 16, 1903 and is headquartered in Dearborn, MI.”
The summary is short and succinct. It explains who Ford is, which segments they operate in, and a brief explanation of what they do in each of their segments. When making a summary of your own, you’ll want to keep it short and sweet; the summary is only meant to introduce the company and what they do, it’s not meant to be comprehensive. Once you’ve summarized your company’s background your next step will be to start analyzing their history, development, and growth.
Analyzing a Company’s Background
Now that you’ve summarized the company, you’ll want to more thoroughly understand their background to get an idea of how they got to where they are today. Primarily, you’ll want to analyze their history, development, and growth.
When mulling through a company’s history you’ll start at their inception. You will be looking backwards to see how they got to where they are. The good, the bad, the ugly, the fantastic; you’ll want to see how your company dealt with both their successes and their failures. It can show you how they handle certain situations. When faced with competition, do they try to be more creative to get a leg up, or do they budget more effectively and out finance their opposition? Finding the answers to these questions can explain how the company will likely handle similar situations in the future.
Development and growth shows how the company developed and grew from the beginning until now. Did they bring a revolutionary idea to the market and change an industry like Ford, or did they take something old and put a new spin on it? Did they burst onto the scene and never look back or did they slowly build into a profitable company? When analyzing your company’s growth and development you’ll want to see how successful they were in growing their business. With exponential increases in available capital, a successful business will find ways to continue growing at a healthy rate — until a certain point. Eventually every company will reach their growth potential and will look to extract as much value from their business as possible, such as General Electric. Observing how well your company uses their cash flows to grow and develop their business will give you an insight into how they plan to develop in the future and how likely they are to succeed.
After you’ve finished analyzing your company’s background, you will begin conducting a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis. The first part of your SWOT analysis will be identifying the company’s internal strengths and weaknesses.
Internal Strengths and Weaknesses
When analyzing a company’s internal strengths and weaknesses, you should be looking only at things within the company’s control. This will typically include the company’s culture, expertise, and resources.
A company’s culture involves different aspects of their organizational beliefs, image, and structure. This includes the company’s mission statement, how they handle public relations, and how they handle their employees. If a company has a good public and private standing, then their culture would be considered a strength. However, if they have a bad public image, such as Comcast, or internal employee discontent, like Google, you could deem their culture to be a weakness that needs be improved.
Part of looking at a company’s culture will involve understanding their management structure and control systems. The management structure shows who is in authority and how work is divided. There are three main types of management structures: horizontal, vertical, and matrixed.
Horizontal management is one where there is no middle management between staff members and executives. In this style of management, each supervisor has a larger number of people to manage. This means that a manager in a horizontal structure will have more responsibility than one in a vertical structure. The benefit to this is that information moves quicker, since there is no middle management to pass through. It also benefits workers, as it allows them to be more autonomous and directly involved in the decision-making process. Horizontal management is more common in companies that are growing and trying to harbor innovation. Since innovation requires lots of free-flowing information, it is better when there are fewer people it must pass through to reach the top executives.
Vertical management is one where information is passed from the top to the bottom — from supervisors to staff members. You can think of vertical management as a pyramid — where you have a CEO at the top then three vice presidents then five senior managers and so on. Unlike horizontal management, vertical management is very rigid and bureaucratic. Information flows in a slow, steady manner, passing from supervisor to subordinate until it reaches the very bottom. This style of management is more common in larger conglomerates like General Electric, who would prefer more executives since they operate in many different sectors. These companies don’t require information to move as quickly, so they’d rather it be refined as it moves through the chain of command.
Matrixed management is a bit more difficult. This management structure attempts to combine the strengths of both horizontal and vertical management. Many larger companies are trying to move into a matrixed structure, but the details are still being tweaked. This type of structure is not as old and well researched as the others, so companies are still trying to see what the benefits and disadvantages are. It is also much harder to integrate, because it requires a thorough understanding from both executives and those who report to them.
A company’s expertise involves how knowledgeable they are in their given field. Expertise is measured by comparing how vital a company’s skills are relative to the market they compete in. If your company has skilled employees in computer software, but there are other companies with similar skills, their expertise may not be considered a strength. On the other hand, if your company is significantly more knowledgeable than their competitors, it could be considered a strength. While expertise involves an external factor by comparing your company’s knowledge to their competitors, it’s something that is internally controlled. A company can control their expertise by hiring and investing in highly skilled employees; they cannot control who their competitors hire and how they invest in their skills.
A company’s resources include their finances, assets, and infrastructure. Analyzing a company’s resources involves observing how they manage their resources compared to their competitors.
Corporate Level Strategy
Using a company’s resources, you can begin to examine their corporate level strategy. Corporate level strategy is concerned with the company’s business decisions and how they affect the entire organization. Financials, mergers and acquisition, and the overall management of resources are all things involved with corporate level strategy.
Usually, companies within the same industry will have similar corporate level strategies. For example, companies in the telecom industry have higher levels of debt than companies in other industries. This is because they must make larger initial investments in infrastructure before they can start to deliver their products. However, that doesn’t mean companies who break from the industry tradition are always weaker, in fact, it could be a strength.
Understanding your company’s corporate level strategy will help explain some of the decisions they’ve made, as well as allow you to formulate recommendations that help them enhance their strategy.
A company’s resources can also include their intellectual property. Intellectual property is a creative invention that a company has legal access to use commercially. This includes trademarks, patents, and copyrights. Intellectual property can be a big internal strength for a company, especially if it restricts competitors from being covered under fair use, such as Apples pinch-to-zoom feature.
Now that you’ve covered the Strengths and Weaknesses portion of your SWOT analysis, you’ll need to find identify the company’s Opportunities and Threats. This is done by looking at the external environment of your company.
The external environment is composed of all the outside factors that impact your company’s operations. These are the factors that your company doesn’t have control over. It can include their competitors, their customers, the government, and the economic climate. From the external environment, you will be able to observe potential threats to your company as well as potential opportunities they may have.
Threats in your SWOT analysis will consist of problems that could arise for your company due to either internal or external threats. Employee discontent, expiration of a patent, or legal issues would all be considered internal threats that could potentially harm future business operations. External threats, which can consist of competitor innovation, government regulation, or an economic recession could also pose a serious threat to business operations. When analyzing for threats to a company, the primary concern is whether something will negatively impact business operations. If something positively impacts business operations, it would be considered an opportunity.
Opportunities in your SWOT analysis will consist of ways that your company can potentially improve their business operations. These will include both internal and external strengths. Building on employee knowledge, launching of a new product, or a positive economic forecast are all potential opportunities for a company. The primary goal of an opportunity is to positively affect a company’s business operations.
Once you’ve completed your SWOT analysis, you will then want to evaluate what you’ve found. What you find will likely be part of the recommendations that you formulate to your company.
Evaluating your SWOT analysis
By conducting your Strengths, Weaknesses, Opportunities, and Threats analysis, you will have identified what your company does well, what they need to work on, what opportunities are present for them, and what threats they may face. The information you’ve discovered will then be used to help formulate recommendations to the company.
The final step in building your case study is to formulate recommendations. This is the part where you reflect on what you’ve discovered during the process of analyzing your company and synthesize meaningful recommendations to them. You may suggest that your company continues investing in one of their strengths, or make note of an opportunity that is present. You may also wish to recommend that your company shores up one of its weaknesses to potentially eliminate a looming threat. When formulating your recommendations, you’ll want to cite the information you discovered during your case study. This will provide a reference point to which the company can verify your claim. This lesson is part of the PersonalFinanceLab curriculum library. Schools with a PersonalFinanceLab.com site license can get this lesson, plus our full library of 300 others, along with our budgeting game, stock game, and automatically-graded assessments for their classroom - complete with LMS integration and rostering support!
This lesson is part of the PersonalFinanceLab curriculum library. Schools with a PersonalFinanceLab.com site license can get this lesson, plus our full library of 300 others, along with our budgeting game, stock game, and automatically-graded assessments for their classroom - complete with LMS integration and rostering support!Learn More