case competition guidance slides by xiao hu

How to prepare case competition?

A case preparation guide for 2014 Cornell-Rockefeller Case Competition

Prepared by Xiao Hu (VP of External Relations, CGCC)

Adapted by Cornell-Rockefeller Case Competition Organizing Committee

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Agenda – Concept, Examples, and Hands-on Practice

Executive Summary Situation, Complication, Question, & Answer (SCQA)

Pyramid Structure Governing Thoughts, MECE Principle, Key Lines, and

Supports

Storyboarding Structure and Flow

Group Presentation

Deck & Charts Tips

Research Resource

Visualization Principles

Transitions, Synthesis, and Reinforcement

Industry Research, Market Analysis, Company Insights

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Executive Summary - SCQA approach structures case facts efficiently

What are the keyrelevant factors?

Why does the company have to act

now?

What is the main problem to solve?

What is your recommendation to the

CXO?

Situation

Complication

Question

Answer

• 3-4 impending issues that require immediate action

• A sense of urgency is necessary

• 3-4 sub-questions that you will answer in your deck

• 3-4 steps/recommendations that the company must follow to be successful

• 3-4 primary high-level facts

• Relevant to problem, analysis or solution

New Beetle should use its unique driving experience to attract a

new audience and lead Volkswagen to success

SUMMARY SEGMENTATIONPRICING & MEDIA

SELECTIONRECOMMENDATIONS

• 1950-1970’s success relied heavily on the Beetle

• VW failed to face competition & to comply to U.S. regulation � almost left the market

• Now, sales & brand image are improving dramatically, but they remain much lower than competition

Volkswagen is slowly recovering from its

1980’s collapse in the U.S.

• Based on Type 1 design and on the Golf engineering model

• Old Beetle = American Icon � attention of media & public

• New Beetle might help VW come back on the U.S. market

VW has high expectation for the soon New Beetle

launch

• What target, positioning, pricing and media strategies will allow the New Beetle to improve VW’s sales & brand image in the U.S. without becoming the new car brand?

A relaunch of an old icon is tricky

• Positioning: A car providing exciting & unconventional driving experience to drivers looking for challenges & self-expression

• Integration to VW product line through the “Drivers Wanted” campaign

VW should target the Innovator/Experiencer

s consumer group

** Sample slide from Nate Peck's course of Problem-Solving Project Process (NBA 5780)

0

Ritz-Carlton should increase its opening occupancy rate to 55%

Summary Ritz Essence Training Program Hotel Opening Process

Service Business Experimentation

The Ritz-Carlton is a premium hotel chain that is known for the exceptional service that it delivers to the world’s

most discerning guests

Millennium Partners is pushing the Ritz to increase revenues during the hotel

opening process and the Ritz must balance this objective with maintaining the highest levels of customer service

How can the Ritz increase revenues during new hotel opening process while maintaining the highest levels of service that the Ritz is known for?

The Ritz can increase occupancy rates and revenues by focusing on the following areas:

Lengthening the new hire training process to include more hands on

situational training

Retain trainers onsite throughout the

opening process to leverage the trainers

expertise

Provide new employees the

opportunity to shadow employees in the same positions at other Ritz

hotels


| 0

Focusing efforts on consolidation and IT integration will achieve >$60M cost savings target

1. Relocation and consolidation of:� Headquarters� Regional Offices

2. Branch consolidation3. IT integration

New HQ …………………….………..…. Elimination of regional office ………..…

Elimination of 15-23 bank branches .....

BRAINS system elimination……………. Elimination of 3 processing centers……

Where we are Due diligence and interviews have identified areas of focus to achieve cost targets

� Must show substantial progress towards

overall $60M savings by 3 month mark

� SG&A must be reduced to $25M

� Increasing revenue is not immediate

concern, though long-term growth ideas

should be considered

� Barclay’s workforce is unionized; risk of significant cost increase due to

union expansion, and must take into consideration before layoffs

� Possible morale issues with substantial layoffs. Must have an effective

communication plan

� Costs must be reduced without an effect on services

� Currently no marketing budget, so marketing expenses can not be cut

Short term concerns Primary Challenges

Initial target areas for cost reductions:Total cost savings:

15-16.5M10M

30-46M

6M9M

$70-87.5 Million


| 0

Following integration, FirstCaribbean should achieve 68M+ USD in cost savings synergies and 55M+ USD in long-term revenue synergies

Communicating message

effectively both internally and

externally

Managing integration without

disrupting service

Managing employee morale

issues during layoffs

Reducing costs while

minimizing effect on revenue

Implementation of growth

strategies following integration

Primary Challenges

Long term annual cost synergies

25M28M15M

Project Process Due diligence Analysis Recommendation ImplementationWeeks 1-2 Weeks 3-4 Weeks 5-6 Next steps

28

25

28415

354

65120

390

445 Long term annual revenue synergies

Customer churn resulting from merger…………………………....Synergies following integration…

-65M+120M

Pre-merger

Post-Merger

Costs (M USD)

Revenues (M USD)

One-time Costs

Management Team Development…Brand and Personnel Integration….IT Integration………………………...

Upfront costs of 100-115M USD will be offset by incremental short-term income

Eventual positive ROI through divestiture of real estate assets

Annual Financials Pre and Post Merger

Through a comprehensive 3-phase approach, TeFour consulting has devised a merger implementation plan that will achieve 68M USD in cost savings, exceeding targets by 13%

**All currency used in USD unless otherwise noted


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Executive Summary - SCQA Practice 1

After 15 minutes, we’ll discuss your ideas as a group

Exercise from Nate Peck’s course of Management Cases (NBA 5810)

WSJ article: “U.S. Moves to Block US Airways-American Airlines Merger”

Read the article

Working with a partner, go through the text and try to identify the S-C-Q-A

Hint:

Work as if you were going to build a “How?” pyramid;

the underlying question should not be “Should they merge?”

American should take steps to address anti-trust concerns and maximize benefit for customers

American Airlines and

US Airways plan to

merge

• American Airlines has been in bankruptcy since late 2011

• US Airways has sought to merge with American since filing chapter 11

• The planned merger would make American the largest airline and

allow for a quick exit from bankruptcy

The Department of

Justice moved to

block the merger

• The merger would leave only 4 airlines controlling 80% of US market,

and American controlling as much as 70% at some airports

• DOJ claims it may result in higher airfare, more fees and fewer choices

• US airways could abandon their low fare strategy (Advantage Fares)

How can American Airlines ensure that the merger will take place?

Take steps to address

anti-trust concerns

and maximize benefit

for customers

1. Fight DOJ in court to prove benefit of merger to customers

2. Make concessions by giving up slots at airports like Reagan (DCA)

3. Sell assets, spin off American Eagle

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Executive Summary - SCQA Practice 2



WSJ article: “Resource Boom Spurs Big Deal --- Glencore, Xstrata in Talks to Form $80 Billion Mining Giant”

Read the article

Working with a partner, go through the text and try to identify the S-C-Q-A

Hint:

Work as if you were going to build a “How?” pyramid;

the underlying question should not be “Should they merge?”

Xstrata and Glencore should ac0vely manage all stakeholders to ensure merger comple0on

Xstrata and Glencore are large raw material

companies

• Xstada is a leading miner for coal and copper • Glencore runs a lucra0ve trading opera0on for raw materials • Xstrata is the 4th largest copper producer; Glencore is 8th • An Xstrata-‐Glencore deal would create an $80B mining and natural resources colossus poised for supply chain dominance

Consolida4ng industry creates

pressure for firms to merge

• High capital costs and poor credit access make expansion difficult • Booming Asian market creates high demand for raw materials • Fragmented copper market is poised for consolida0on • The total deal value for the mining sector rose 43% in 2011 to $162.4B

How can Xstrata and Glencore ensure that the merger will take place?

Xstrata and Glencore must manage internal

and external stakeholders

1.  The firms must mi0gate an0-‐trust and regulatory risks 2.  The firms must manage the internal power struggle between CEOs 3.  The firms must manage shareholder resistance and expecta0ons

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Pyramid Structure - determine the storyboard of your presentation

Answer

A statement about the subject with which you know the reader will agree

The complicating event that demands immediate attention

• Situation:

• Complication:

The implicit question that must be answered• Question:

Governing Thought

Key Line

Support

•Contains the three elements of a story: the situation, complication and solution implicitly answering a question

•Sets up the relevant question that will be answered in the document, as well as the context with which it will be addressed

•Reminds the reader of the issues rather than informing

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Pyramid Structure - two questions that move you through the tree

Action

Conclusion

Step Step Step

Reason Reason Reason

Kmart needs to revamp its cost structure to remain a viable entity

Reduce headcount in the Corporate office

Reject leases for closed assets

Close unprofitable

stores

Kmart needs to revamp its cost structure to remain a viable entity

Kmart lost money for the last two years

Competition from Walmart continues

to impact more stores’ profits

Comp sales are down due to

reduced consumer spending

Structure Example

How?

Why?

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Deductive reasoning is inefficient and should be used sparingly

A LETTER FROM A FRIEND

Dear April,

Remember last Saturday afternoon when I was playing in the park with my boyfriend and you came over, and he told me that when my back was turned, you kissed him?

And also, on Sunday when you came to my house and my Mom made you a tuna fish salad for lunch and you said: “Yech! That’s the worst salad I ever ate!”?

And yesterday, when my cat brushed against your leg, you kicked her and threatened to sic your dog “Monster” on her?

Well, for all of these reasons, I hate you, and I no longer want to be your friend.

Lucy

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Inductive reasoning is effective and efficient

Revised Letter:

Dear April,

I HATE you. Here are my reasons:

– 1. You stole my boyfriend.

– 2. You insulted my mother.

– 3. You scared my cat.

Governing thought

Keyline support!

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MECE – divide problems into logically discrete sub-problems

Mutually Exclusive

No sub-problem should contain elements of another problem

Each branch is distinct from every other branch

This allows discrete sub-problems to be solved independently

Collectively Exhaustive

Audience must agree with conclusion, because logical sub-elements are proved sequentially

The sub-problems together address all aspects of the main issue

This requires distillation of the problem to its core elements

In-class Example: Step 3 – Fill missing gaps in pyramid

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The merger of Selmar and Steinway creates tremendous growth

opportunities

Messina and Kirkland are experienced purchasers

Strong brand value

New growth opportunities

Invest-ment

bankers

Successful

turn-around of

Selmer

MBA

technical back-

ground

Current market segmen-

tation

Value Propo-sition

Comp-etitor

evaluation

Chall-enges

exist but can be

overcome

Expansion into new products

Expansion into new markets

Best practice: Minto Pyramid

48

33

Mountain Beer should launch a light beer under a new brand

Light beer market has 10% YoY growth and is

fragmented

New brand will prevent brand dilution from existing brand

Expected ROI of 15% within 3 years

Market sizeMarket size Competitive Analysis

Competitive Analysis ABCABC

New brand customer base

New brand customer base

Operational Synergies Operational Synergies abcabc NPVNPV SensitivitySensitivity

Alternative options aren’t as attractive

Alternative options aren’t as attractive

Developing Compelling RecommendationsDefining the Problem

Situation Complication Question Minto Pyramid Storyboarding

Step 3 – Determine what additional information you need to complete your analysis

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Pyramid Structure – Pyramid Practice



HBS Case: “Adelphia Communications Corporation”

Read the article

Working with a partner, go through the text and try to layout your pyramid

Hint:

You can use the governing thought as either “Adelphia’s loan issuance request should be approved/rejected.”;

Make sure your key lines and supports are MECE.

Adelphia’s strategy to finance existing debt with new debt no

longer makes sense – We do not recommend investment

3/20/20142

Adelphia is seeking further debt

financing to help manage its

existing debt

$690M in new financing

$480M to repay existing bank loans

$210M to fund new plant upgrades (Cap Ex)

The Company is an industry

laggard and has high leverage

ratios

Highly unprofitable and anticipated to return negative earnings

for foreseeable future

Debt to EBITDA ratio > 8

Is Adelphia a strategic

investment opportunity for this

bank?

Adelphia performance justify investment?

Can Adelphia bring its debt levels down to industry norms?

Do industry dynamics support Adelphia’s recovery?

Adelphia’s request for funding

should be rejected

Adelphia’s ability to organically grow is unproven

Insufficient cash is generated to cover cost of debt

Competition is growing and industry is maturing

Adelphia’s request for funding should be rejected.

New regulation

creates opportunity

3/20/20143

Bad StrategyHigh

Business Risk

Bad

Performance

Bad Strategy

Implementation, i.e.

too much debt, under-

performed, etc.

Scenario analysis of

FCFE, negative NPV in

best scenario

Increasing cost of debt

Uncertain growth

driver, i.e. acquisition.

EBITDA per

subscriber

Interest Expense per

subscriber

Debt-to-EBITDA ratio

Strategy Business Risks Performance Future Prospects

Adelphia intends to capitalize on Telecommunications Act of 1996

to offer full suite of services to customers

Low

High penetration in rural and

urban areas

2-way data transmission and

future high-def demanded

3/20/20144

Television Internet Phone

The new regulation creates new opportunities for Adelphia, but also allows for

greater competition from traditional telecom providers (e.g., AT&T)

New Growth

& Industry

Trends

Competition

Adelphia’s

Strategy

High

Low penetration

Broadband offers many benefits over dial-up service and anticipated to have high demand

Moderate

Completely new opportunitycable providers

Unclear if customers will value phone value proposition from cable providers

Moderate & Increasing

Satellite and Wireless Cable have distinct advantages (both regulatory and geographical)

Consolidation in industry is diminishing Adelphia’s relative size

Low

Cable offers data transmission

speeds > offered by dial-up or

DSL

All other cable providers are

entering this space

High

Nearly 100% of potential

customers are already serviced

by incumbent carriers

Unclear if customers will be

“sticky” with incumbents

Fiber-optic investments today will pay off in future

Lower future Cap Ex required

High-def and improved 2-way data transmission possible

Increase bandwidth for fast

data transmission speeds

through fiber-optic network

Provide broadband to all

customers passed in districts

Hyperion subsidiary will

provide phone service

Invest in infrastructure to

provide phone service to

$4.8B potential market


Yet we believe Adelphia’s past strategy of growth by leveraged

acquisitions has put the company in poor position for the future

Cash flow analysis indicates inability to cover cost of debt

without further financing or equity contributions

Cost of debt likely to increase for Adelphia as risk of default

grows

3/20/20145

Future prospects for the

Company look bleak

The company has under-

performed given debt

levels

Growth by acquisition has

loaded the company with

too much debt

Past

Present

Future

The Company has experienced low returns from its debt-

financed investments

Olympus acquisition has been a drag on performance

Lowest EBITDA return on debt

6th in EBITDA value created per subscriber

Adelphia must de-lever as cable industry growth is slowing

and growing more competitive

Company will be challenged to deliver any value to

shareholders in the future

Unclear if Company can effectively compete with very low

capital expenditures and high debt-servicing costs

Unlikely that Adelphia will be an attractive takeover target given

burdensome debt levels


12

Storyboard of the Minto’s Pyramid Structure

Situation and Complication

Overview of Answer

Reason #1 with supporting charts


Executive Summary


Risks & mitigation, Implementation

13

Situation

Question

Answer

Complication

Example: Executive Summary

Executive Summary slide should STAND ALONE, without supports of any other slides.

14



Overview of Answer



Executive Summary



15

Example: Situation & Complication Slides

Situation slides highlight important background information allowing audience to follow presenter’s logic

Complication slides highlight what has changed that fueled the current issue

16



Overview of Answer



Executive Summary



17

Example: Answer Slide

The answer slide provides a high level overview of your recommendation

18



Overview of Answer



Executive Summary



19

Example: Reason Slides

Reason slides provide details about each one of the recommendation components listed in the answer

Reason #1Reason #1 Reason #2 Reason #3

20



Overview of Answer



Executive Summary



21

Example: Risk and Implementation Slides

Reason #1Risk and Mitigation Implementation

Addresses risks associated with presented solutionInclude a mitigation strategy for each risk factor

Provides the client with next steps and timing of each step

22

Individual Slide Principles

Takeaway Box

Charts, Graphs, Situation Implication & Explaination

• 1.

• 2.

• 3.

Tracker Tracker Tracker Tracker Tracker

Actionable Title (Verb or Sentence)

23

• Action headline• Should reflect content of the slide• 1 – 2 line statement• You should be able to read only

the headlines of your deck and still understand the story you are telling your audience

Individual Slide – Headlines

24

• Concise: express ideas and key messages in the fewest possible words that paint a clear picture for the audience

• Precise: choose the best words to communicate powerfully; try to limit bullet points to 2 – 3 lines

• Avoid orphan words (words that sit on their own line)

Individual Slide – Writing

25

• Kickers call out the “so what” of a slide• A means of checking in with the audience to

ensure main takeaways are understood

Individual Slide – Kickers (Takeaway Box)

26

• Trackers help the audience follow along • Keep takers clean and simple to avoid

distraction from the slide’s contact • Also include page numbers on slides

Individual Slide – Trackers

27

• Use a consistent color theme throughout the presentation

• Limit the number of colors used• Match colors to a client’s logo • Ensure colors are easy to read (i.e., avoid

blue text on a black background)

Individual Slide – Colors

28

• Ensure consistent spacing and size of objects

• Text should fit neatly into boxes; avoid squeezing words into tight spaces

Individual Slide – General Formatting

29

• Use graphics that support key messages• Use clean, crisp graphics• Avoid forcing content into SmartArt

Individual Slide – Graphics

30

• Use the most appropriate chart type to communicate your message

• Ensure proper labeling • Only show high-level numbers within

the presentation; include details in the appendix

Individual Slide – Charts

31

• Highlight, circle, or draw attention to elements that are different from the others; will help the audience process information quickly

Individual Slide – Callouts

32

Individual Slide – Stand-alone Practice



HBS Case: “Adelphia Communications Corporation”

Working with a partner, choose one of the three supports under the third key line, “Bad Performance”, and extend it into a slide with graph, explanation, takeaway, and actionable title.

EBITDA per subscriber

Interest Expense per subscriber

Debt-to-EBITDA ratio

Past acquisitions have failed to deliver profitable, high-yield business

and Adelphia correspondingly delivers poor value per subscriber

Adelphia is a laggard relative to its

peers in creating value from its

existing subscriber base

Olympus (an acquisition) has been

a poor performer with no

indication of a near-term return to

profitability

Company needs to generate more

value per subscriber in order to

satisfy growth requirements

(growth necessary to service debt

costs)

3/20/20149 Strategy Business Risks Performance Future Prospects

Comcast $ 263.10

Continental $ 170.71

Cablevision

Cox

TCI

Adelphia

TimeWarner

$ 169.38

$ 161.48

$ 145.59

$ 143.33

$ 125.42

EBITDA Value Created per Subscriber per Year ($)

The Company is left with most EBITDA generated going to debt-

servicing costs

Significant portion of Company’s

earnings go to service the debt

Debt levels steady or increasing currently

Adelphia must increase allocation to debt

repayment to lower debt levels

Cap ex is left poorly funded

Unclear how Company will continue to

compete with peers (plus satellite and

wireless cable competitors)

Unrestricted geographic coverage of

alternative cable sources (e.g., satellite)

will increase choices available to

consumers

Low cap ex will likely have detrimental

effect on competitiveness of services


$ 0.80

Continental $ 0.60

TCI $ 0.50

Comcast $ 0.49

Cox $ 0.25

$ 1.06

Adelphia $ 0.82

TimeWarner

Cablevision

Interest Expense for Every $ of EBITDA

As the cable industry changes, Adelphia’s extraordinary debt levels

relative to peers puts the Company at risk

Cable industry is maturing

New subscriber growth waning

Consolidation eliminating smaller

players that lack economies of

scale

Enhanced competition will likely

increase cap ex requirements for

cable companies

Cable companies will need to

deliver greater value to consumer

Satellite and wireless cable are a

new option for many consumers

Traditional telecoms (e.g., AT&T)

may now compete with cable

companies


8.4

7.8

6.76.56.46.3

4.8

Cox

Cab

levi

sio

n

TC

I

Co

ntinenta

l

Tim

eW

arner

Co

mca

st

Adelp

hia

Debt to EBITDA Ratios ($)

Industry growth no longer supports

Adelphia’s debt load and Company will

need to increase cap ex to compete

33

Group Presentation – Synthesizing all the time

Synthesizing Keep telling audience where you are in your presentation

Transitions Summarize main takeaway of previous parts

Summarize your part

# of Presenters Based on Natural Transitions

Timing

Q&A

Rehearsing

Brief recap Straightforward answer

Confirm – “Did I answer your question?”

Minus 2 minutes when rehearsing

In the presenting place, if possible

34

Research Resource – It takes a consultant only ONE WEEK to be a pro

Market/Industry

IBIS World

Frost & Sullivan

Mintel

Company

Capital IQ (listed firms)

Hoover (Basics and competitors)

MarketLine (SWOT)

Company Website

Recent News

Wall Street Journal

New York Times

Financial Times

case competition guidance slides by xiao hu

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