Kevin bertolini stop-loss strategy pdf free download

Harvard Business case studies represent real-life situations, and therefore, an analysis of the industry's competitive environment needs to be carried out to come up with more holistic case study solutions. In Porter's Five Forces analysis, the industry is analysed along 5 dimensions. This tool helps one understand the relative powers of the major players in the industry and its overall competitive dynamics.

Actionable and practical solutions can then be developed by keeping these factors into perspective. This also looks at the external business environment of the organisation helps in finding case study Analysis to real-life business issues as in HBR cases. Under the VRIO analysis, the following steps are carried out:. The analysis done on the 4 dimensions; Value, Rareness, Imitability, and Organization. If a resource is high on all of these 4, then it brings long-term competitive advantage.

If a resource is high on Value, Rareness, and Imitability, then it brings an unused competitive advantage. If a resource is high on Value and Rareness, then it only brings temporary competitive advantage. This tool is used in the case study analysis as follows:. The BCG Matrix is an important tool in deciding whether an organization should invest or divest in its strategic business units.

The matrix involves placing the strategic business units of a business in one of four categories; question marks, stars, dogs and cash cows. The placement in these categories depends on the relative market share of the organization and the market growth of these strategic business units. The steps to be followed in this analysis is as follows:. These are either to further develop the product, penetrate the market, develop the market, diversification, investing or divesting. It helps decide whether an organization should pursue future expansion in new markets and products or should it focus on existing markets and products.

The choice of strategy depends on the analysis of the previous tools used and the level of risk the organization is willing to take. To do so, it will need to use the marketing mix, which serves as a tool in helping bring out responses from the market.

The 4 elements of the marketing mix are Product, Price, Place and Promotions. The following steps are required to carry out a marketing mix analysis and include this in the case study analysis. A blue ocean strategy is a strategy that involves firms seeking uncontested market spaces, which makes the competition of the company irrelevant.

It involves coming up with new and unique products or ideas through innovation. This gives the organization a competitive advantage over other firms, unlike a red ocean strategy.

The PESTEL analysis discussed previously looked at the macro environmental factors affecting business, but not the microenvironmental factors. One of the microenvironmental factors are competitors, which are addressed by a competitor analysis.

Once various tools have been used to analyse the case, the findings of this analysis need to be incorporated into practical and actionable solutions. These are usually in the form of strategies that the organisation can adopt.

The following step-by-step procedure can be used to organise the Harvard Business case solution and recommendations:. It is important to have more than one solution to the case study.

This is the alternate solution that would be implemented if the original proposed solution is found infeasible or impossible due to a change in circumstances. The case study does not end at just providing recommendations to the issues at hand. One is also required to provide how these recommendations would be implemented. This is shown through a proper implementation framework.

A detailed implementation framework helps in distinguishing between an average and an above average case study answer. A good implementation framework shows the proposed plan and how the organisations' resources would be used to achieve the objectives. It also lays down the changes needed to be made as well as the assumptions in the process.

Baron, E. Free Management E-Books. Gupta, A. International Journal of Modern Social Sciences, 2 1 , Hambrick, D. Academy of Management Journal, 25 3 , Hill, C. Hussain, S. Management and Administrative Sciences Review, 2 2 , Kim, W. Blue ocean strategy. If you read nothing else on strategy, read thesebest-selling articles. Kulkarni, N. Lin, C. A fuzzy quantitative VRIO-based framework for evaluating organizational activities. Management Decision, 50 8 , Nixon, J. Exploring SWOT analysis — where are we now?

Journal of Strategy and Management, 3 3 , Pickton, D. What's swot in strategic analysis? Strategic Change, 7 2 , Porter, M. The value chain and competitive advantage. Magnitude of both incoming and outgoing cash flows — Projects can be capital intensive, time intensive, or both.

Stop Loss shareholders have preference for diversified projects investment rather than prospective high income from a single capital intensive project. Timing of the expected cash flows — stockholders of Stop Loss have higher preference for cash returns over years rather than years given the nature of the volatility in the industry. Net Cash In Flow — What the firm will get each year.

Net Cash Out Flow — What the firm needs to invest initially in the project. Step 1 — Understand the nature of the project and calculate cash flow for each year. Step 2 — Discount those cash flow based on the discount rate. Step 3 — Add all the discounted cash flow. Step 4 — Selection of the project. In our daily workplace we often come across people and colleagues who are just focused on their core competency and targets they have to deliver. For example marketing managers at Stop Loss often design programs whose objective is to drive brand awareness and customer reach.

To overcome such scenarios managers at Stop Loss needs to not only know the financial aspect of project management but also needs to have tools to integrate them into part of the project development and monitoring plan. This means that project will deliver higher returns over the period of time than any alternate investment strategy.

In theory if the required rate of return or discount rate is chosen correctly by finance managers at Stop Loss, then the stock price of the Stop Loss should change by same amount of the NPV. In real world we know that share price also reflects various other factors that can be related to both macro and micro environment. In the same vein — accepting the project with zero NPV should result in stagnant share price.

Finance managers use discount rates as a measure of risk components in the project execution process. Project selection is often a far more complex decision than just choosing it based on the NPV number. Finance managers at Stop Loss should conduct a sensitivity analysis to better understand not only the inherent risk of the projects but also how those risks can be either factored in or mitigated during the project execution.

Sensitivity analysis helps in —. What are the key aspects of the projects that need to be monitored, refined, and retuned for continuous delivery of projected cash flows. Projects are assumed to be Mutually Exclusive — This is seldom the came in modern day giant organizations where projects are often inter-related and rejecting a project solely based on NPV can result in sunk cost from a related project.

Independent projects have independent cash flows — As explained in the marketing project — though the project may look independent but in reality it is not as the brand awareness project can be closely associated with the spending on sales promotions and product specific advertising.

Published by HBR Publications.