Solved by verified expert:Please submit a Case Analysis and Written Report 4 pages single spaced. This does not include the appendix table. Sample is attached.Instructions are also attached, Please refer to the guidelines on the overview attachment_case analysis summary.Writing the Report: (Per professor) Do not rehash statements in the case except to support a specific point in your argument. You should organize your report logically: do not present information in random fashion. Please use the following system of organization for your written report. The sections are designated by Roman numerals and are arranged in the following order:I.Problem/Issue Statement II.AlternativesIII.Analysis (Use your alternatives as subheadings)IV.Recommendation V.Plan of ActionVI.Contingency Plans
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THE CASE METHOD
Case analysis gives students an opportunity to develop a productive and meaningful way of thinking
and expressing themselves about business problems. The case method is designed to provide
practice in analyzing and reporting business issues in real business settings. Each case describes
the facts surrounding a particular business situation facing managers and asks the student to
provide a solution to the problems/issues presented in the case.
Benefits
The case method is an effective learning tool. It encourages you to analyze the data presented in
the case and make your own recommendation(s) for resolving the problems/issues in the case. The
preparation and discussion of case studies help you enhance your skills in oral and written
expression. In addition, the case method is a way for you to learn about current business practices
and methods and apply business concepts and principles in solving business problems. In addition,
the case method provides experience in thinking logically about different sets of data. It allows you
to enhance your analytical ability and judgment.
Most cases are based on the experience of real firms. Typically, the name and location of the
firm is disguised to protect the interests of the company involved. In addition, final decisions of the
firm are usually omitted in the case narrative, thus allowing you to reach your own conclusions. In
contrast to a typical business situation, the facts in casebook cases are presented clearly and
neatly. Real world problem solving in business usually involves extensive data collection, something
that has been essentially done for you in a case study.
It is important to remember that solutions to problems are worthless unless they can be sold
to decision makers in a position to act on the recommendations. The case method presented here
provides students with practical experience in convincing others of the soundness of their reasoning.
A Framework for Analysis
There are many ways to approach the analysis of business cases. For this course, however, I prefer
the following six-step procedure. I believe that this six- steps procedure is a logical and practical way
to analyze a case. Besides, it provides a rubric for objective grading of individual written case
reports.
1.
2.
3.
4.
5.
6.
Problem definition.
Generation of Solution Alternatives.
Analysis of the alternatives.
Recommendation of a solution.
Specify a plan of action.
Prepare contingency plans.
Problem Definition
Read the case and become familiar with the facts of the case. Isolate the central problem/issue of
the case. Normally you can get an idea of the central problem in a case by looking at previously
covered concepts on the course outline. For example, is the root of the problem/issue cultural
differences between managers and employees? Instructors may use a case to see if you
understand lesson concepts that have been presented. Your instructor might provide case related
questions to help you start your analysis. Where provided, you should use the questions as guides
for analysis rather than as specific issues to be resolved. Instead of a full case report, your instructor
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may simply pose questions to answer after analyzing the case.
Generation of Solution Alternatives
The second step is the formulation of possible alternatives to resolve the problem/issue around
which the case is organized. Some of these alternatives are obvious from the materials supplied in
the case and your statement of the main issue. Therefore, limit your solution to three or four
alternatives. One alternative that you should always consider is the maintenance of the status quo.
Sometimes the status quo is the best course of action to follow. For this learning exercise, the
alternatives must be mutually exclusive (the alternatives should be independent of one another).
Analysis of Alternatives
Analysis of alternatives is the most important aspect of a case analysis. Carefully evaluate the facts
presented in the case. Use the data presented in the case to evaluate each of the alternatives you
have selected. Differentiate relevant materials from peripheral or irrelevant ones. And be very
careful to distinguish between a fact and an opinion. Also, you should make sure that the facts are
consistent and reliable.
You must sift through the data presented to uncover all the relationships that apply to the
alternatives being considered. Hence the quantitative information must be examined employing a
variety of ratios, graphs, tables, or other forms of analysis. If you find gaps in the data provided, you
should make assumptions in order to continue the analysis. Be prepared to defend your
assumptions. Present both sides of important issues under examination, and refute major opposing
views where possible.
You should base your analysis on the evidence presented. However, feel free to use other
information you have on the issue. In other words, you may use facts available to the trade at the
time, including general information or public knowledge. Apply relevant concepts from other
disciplines, such as accounting, statistics, economics, psychology, and sociology. The outside
material used in your analysis must be appropriate to the particular situation. For example, do not
use data published in 1996 to make decisions in a case dated 1992. Remember to stay within the
time period covered by the case and note any contemporary knowledge utilized in your solution that
was not available to decision makers during the time frame of the case.
Recommendations
After you have completed your analysis of alternatives, you must recommend one of the
alternatives. You should make a clear-cut decision without qualifications. Explain why your selected
alternative is superior to the other alternatives you have analyzed. Remember that alternatives are
mutually exclusive, so do not recommend more than one alternative. It is not unusual to find more
than one course of action attractive. Still, you must come up with a specific recommendation. To
settle on a solution, you must judge the relative risks and opportunities offered by each alternative.
The optimum choice is the one with the best balance between profit opportunities, risks and costs of
failure.
Specifying a Plan of Action
Explain how you are going to implement your recommendation. You should suggest what actions
you would take, when they would be taken, and how much they would cost. You should provide pro
forma income statements and other relevant supporting material where possible. You should also
reflect on the potential market reactions to your moves, especially competitive reactions. How would
you modify your actions if those market reactions materialize?
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Preparing Contingency Plans
Ask yourself what you would do if the market does not respond to your marketing actions as you
anticipate, if competitors take actions that deviate from their usual behavior, if the economy is
different than forecasted, etc. Outline possible competitive responses to your marketing action and
how you might respond to them. Contingency plan reduces panicking if things do not go your way
and allows you to approach matters in a calm manner.
Writing the Report
Do not rehash statements in the case except to support a specific point in your argument. You
should organize your report logically: do not present information in random fashion. Please use the
following system of organization for your written report. The sections are designated by Roman
numerals and are arranged in the following order:
I.
II.
III.
IV.
V.
VI.
Problem/Issue Statement
Alternatives
Analysis (Use your alternatives as subheadings)
Recommendation
Plan of Action
Contingency Plans
The problem or issue statement is brief. It should point to business concepts and principles that
inform the major problem or issue. The alternatives section should be limited to three or four
workable solutions to the problem. The analysis section makes up the bulk of the report and should
include evaluations of the data or discussions of the influence of the data on the alternatives. A good
analysis is more than just a list of advantages and disadvantages of each alternative.
The recommendations section should be relatively short and concise. Do not evaluate the
facts of the case in this section or hedge your position. Your written report will be judged on
completeness, clarity of presentation and freedom from errors in spelling and grammar. The
standard of your written communication should reflect what the business community expects from a
college graduate.
Source: Adapted from Douglas J. Dalrymple, William L. Cron, and Thomas E. DeCarlo, Sales
Managagement, 7th Edition, 2001, John Wiley & Sons, Inc. New York
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EVALUATION OF WRITTEN CASE ANALYSIS
Course #: _________________
Date: _________________
Title of Case: __________________________________________________________
Student’s Name: _______________________________________________________
I.
Problem/Issue Statement [10 points Max]: _______
1.
2.
3.
4.
5.
II.
Correctly identified the central problem/issue and all minor issues? (9.4-10 pts)
Correctly identified the central problem/issue and some minor issues? (9-9.3 pts.)
Correctly identified just the central problem/issue? (8–8.9 pts.)
Correctly identified minor issues? (7–7.9 pts)
Failed to identify the central problem/issue and minor issues. (0-6 pts)
Alternative Solutions (not more than four alternatives) [10 points Max]: _______
1. Listed three (and not more than four) plausible solutions for resolving the
problem/issue identified (10 pts)
2. Listed less than three or more than four plausible alternative courses of action (8 -9
pts)
3. Failed to list any plausible alternative course of action (0-7 pts)
III.
Analysis of Alternatives [30 points Max]: ______
1. Excellent evaluation of each alternative, using information presented in the case
and employing appropriate international business concepts, theories and principles
(such as the ones covered in class lectures and the course textbook). Clearly
identified the strengths and weaknesses of each alternative (28-30 pts)
2. Less than excellent evaluation of each alternative (24-27 pts)
3. Weak evaluation of alternatives (19-23 pts)
4. Poor or no analysis of alternatives (0-18 pts)
IV.
Recommendation [10 points Max]: _______
1. Recommended only one of the evaluated alternatives and avoided qualifications and
obvious hedges. Explained why the selected alternative is superior to the other
alternatives (10 pts)
2. Recommended only one of the evaluated alternatives without explaining why it
is superior (9 pts)
3. Recommended more than one alternative from the evaluated alternatives
(8 pts)
4. Recommended an alternative inferior to any of the other evaluated alternatives
(7 pts)
5. Failed to make a recommendation or recommended an alternative not evaluated
(0-6 pts)
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V.
Plan of Action [20 points Max]: _______
1. Excellent plan of action–one which specified how you would implement your
recommendation; provided pro forma income statement (where applicable) and
other relevant supporting materials; addressed the weakness of the
recommended alternative; reflected on the potential negative reactions to your
proposed actions; and explained how you would modify your actions if those
reactions materialized (18-20 pts)
2. Less than excellent plan of action as explained in #1 above (15-17 pts)
3. Poor or no plan of action (0-14 pts)
VI.
Contingency Plans [5 points Max]: _______
1. Explained what you would do if the response to your solution is not what you
anticipated; for example, if competitors take actions that deviate from their usual
behavior, if the economy is different from your forecast, etc.(4-5 pts)
2. Poor or no contingency plan (0-3 pts)
VII.
Writing skills [10 points Max]: _______
1.
2.
3.
4.
5.
VIII.
Good writing style and excellent grammar (10 pts)
Acceptable writing style, but few grammatical errors (9 pts)
Acceptable writing style, but several grammatical errors (8 pts)
Poor writing style and few grammatical errors (7 pts)
Poor writing style and several grammatical errors (0-6 pts)
Organization of the report [5 points Max]: _______
1.
2.
3.
4.
Excellent organization of the report (5 pts)
Less than excellent organization of the report (4 pts)
Organized well enough for the report to be understood (3 pts)
Poorly organized report (0-2 pts)
Total Points [100 points Max]: _______
Evaluator’s signature: ___________________________________
5
Palliser Furniture Ltd. (Case No. 1)
I.
Problem statement:
Arthur DeFehr is confronted with a situation where he along with the board must decide how to expand
the company; if so, when and where this expansion should take place. This can be either in Mexico
and/or China.
II. Alternatives:
1. Status Quo. Do not do anything different from what the company is doing now.
2. Build a factory in Mexico.
3. Establish a joint venture with the Chinese company.
III. Analysis:
1. Status Quo. Do not do anything different from what the company is doing now.
According to the company’s condensed income statement as of December 31, 1997 Palliser
Furniture Ltd. did very well financially. The net income for the year grew at an astonishing rate of
92.6% from last year’s net income of CDN$5.96 million to CDN$11.478 million. The sales volume
increased 16.9% from CDN$277.21 million to CDN$324.061 million. Yet, the cost of sales increased
by only 14.5% from CDN$ 182.091 million to CDN$208.532 million. This difference in the increase
rate of sales volume and the cost of sales has generated greater profit margin. Even though, the
company has done very well throughout the years, can Palliser afford to stop being innovative—in its
product as well as its market strategy—and still maintain its market share?
Most analysts would say yes, if they limit themselves to only Palliser’s income statement. However,
the international market is a dynamic environment. It’s constantly changing rather than remaining the
same. These changes are brought about by the social, technological, economic, and political (STEP)
differences in each of the countries. When an international trade is engaged, the STEP environment for
both countries will change over time which can cause a great barrier to one country’s export compared to
1
the others. This is precisely what happened in 1975. The CDN$: US$ currency ratio increased to the
point where exporting became increasingly difficult, therefore, Palliser withdrew entirely from the
export market. However, Palliser did not limit its sales to Canada only, instead, it decided to purchase
a plant in the US when the opportunity came. This plant would not be affected by the currency rate
change. This small Fargo plant was eventually shut down due to redundancy and inefficiency when
Palliser purchased an idled 400,000 square foot furniture production facility in Troutman, North
Carolina in 1991. Unable to achieve acceptable quality of output or productivity per worker at this plant,
Palliser converted this plant from manufacturing wooden furniture to leather furniture. Since the
demand for leather furniture outpaced the demand for others, it was indeed a good idea to move towards
that direction. This innovative thinking enabled the company to survive in the US and capture a portion of
the market share in this lucrative market.
Palliser also made changes in the Canadian market. Because of the FTA and the NAFTA, the
competition in Canadian market became very fierce. In anticipation of this, Palliser knew that the
company couldn’t compete head-to-head with U.S. producers. This caused Palliser to become protective
of its Canadian market by narrowing its selection of furniture. This meant only bedroom and living
room furniture markets would be targeted rather than all different types of furniture, since these two were
the retailers’ top two choices, Palliser also reduced the number of distributors overall to strengthen
relationships with its top distributors. This eliminated almost half of its 800 distributors and wiped out
10% to 12% of its Canadian sales.
In response to increased competition from overseas, such as Taiwan, with their cheap labor market,
Palliser established a trading company in Taipei in 1986. This had two purposes, first to help the
management think internationally and second to establish a foothold in the foreign market.
All these changes that Palliser made due to the environment strengthened the company’s finances.
However, more changes are coming. Since Palliser had become one of the largest furniture manufactures
2
in Canada with almost 2,900 employees in Winnipeg, the firm offers great opportunity for union
recruitment drives. If unionization occurs, the cost of the furniture would most likely increase due to
employees wanting higher labor wages. This will make Palliser’s market vulnerable to the competition
from U.S. manufacturers as well as the Asian manufacturers.
Though the Asian manufacturers made gains in the North American market in the low-cost furniture,
most firms did not considered the Chinese companies to be serious competitors. However, STEP
environment has changed to put Asian companies in better advantage. Better technology combined
with cheaper labor force and lower tariff by Canada as well as U.S. made their product very
competitive—it’s no longer a “cheap” product, rather it’s a “quality” product for its price—and their
company a formidable competitor against Palliser. What concerns Palliser is the willingness by some
retailers to buy directly from the Chinese without the assistance of Palliser World Trade. The best
Chinese producers were able to market without intermediaries. All these changes mean Palliser would
lose its influence, revenue, and ultimately even its market.
Due to this dynamic environment caused by different STEP associated with their respective
countries, a company cannot lie still and assume everything will be back to normal later on. These changes
are not temporary changes, but permanent, therefore, the company must plan to meet these challenges or
face extinction. Therefore, maintaining status quo is unwise at this time.
2. Build a factory in Mexico.
The NAFTA has created an environment where many manufacturing plants in the U.S. moved their
plants to Mexico because of the cheaper labor force. In 1996, the wage rates in the industry in Canada
were CDN$10.66/hour whereas in Mexico in 1997, the workers were paid US$1.00-1.50/hour. Taking the
currency exchange rate into account, there is still a huge wage difference.
Besides the wage difference, the weak performances by the Mexican upholstered furniture
producers created an opportunity for competitors to move in and attack the local manufacturers. This
3
opportunity was created, even though the retailers prefer to purchase products from Mexican plants,
because of lack of supplies and too many delivery delays. The retailers were looking for alternatives.
Another opportunity for competitors was in the “Rustic” furniture segment. Total production in
Mexico for this type of furniture was over US$100 million in 1997 and 60% was exported to the U.S.
with sales increasing at 15% annually. Though inefficient, the leader of the Rustic furniture segment
was Segusino S.A. This company in 1997 generated a revenue exceeding US$35 million.
The Mexican furniture manufacturers’ production amounted to US$2.9 billion at wholesale prices
in 1997 an increase of 17% over previous year’s levels. Around 13% of the firms produced upholstered
furniture and only 7% produced kitchen furniture with an annual value of US$226 million and US$122
million, respectively. With an expected increase in wooden furniture by 17%, a competitor should be
able to meet this increase in demand without encountering any retaliation by local companies.
The Mexican market also consumed US$3.35 billion worth of home furniture in 1997. Bedroom and
living roo …
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