Use the case method to apply concepts, share ideas and improve communication skills towards solving a complex business problem.
You must read the case on page 97 carefully. Various assigned readings in this course lean toward value investing. Two additional valuation techniques (P/E and FCF valuation), and also some basic ideas on value stocks and growth stocks in the chapter about learning outcomes, will help you analyze the case.
Preparing the Case Analysis (% indicates relative weight given to this part of your analysis)
Step 1. Define the problem (15%)
Be sure to identify the problem and not the symptom of a problem. For example, a decline in sales is a symptom of a problem; you must identify the actual cause of the decline in sales.
Step 2. Formulate alternative solutions to the problem (20%)
It may be helpful to brainstorm as many solutions as you can and then narrow your list down to three or four solutions you feel are the strongest.
Step 3. Evaluate and compare the alternative solutions (35%)
To evaluate alternative solutions you should consider their strengths (e.g. increased productivity) and their weaknesses (e.g. increased cost).
Step 4. Recommend and justify an effective solution (30%)
Be sure to record the reasons why the chosen solution is most effective. In your Case Analysis you must provide a recommendation that is supported by your analysis.