Case 2 requires analyzing the internal environment as well as the external environment, as covered in Case 1 and in Chapter 3. The internal environment analysis is covered in Chapter 4. You should draw heavily from the material in Chapter 4 in preparing your case. You may choose to analyze the internal environment using Michael Porter’s Value Chain approach or Jay Barney’s Resource Based View of the Firm (RBV). Porter’s approach sees the firm as a collection of activities; Barney sees the firm as a collection of resources. Both believe that the firm uses either activities or resources to build competitive advantage. Hence, the internal focus.
For the case study, you will write a report to the CEO Alan Johnson about your analysis of the industry, the macro-environment and the strengths and weaknesses of Potbelly. The problem statement is about the most significant problem facing the company; that problem could be based on external factors or internal factors – or both.
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The analysis section is about the external and the internal environment. External factors are termed Opportunities and Threats, such as the Threat of Substitutes. (Yes, something can be both an opportunity and a threat – much as the growth of Internet retail is both an opportunity and a threat for a retailer.) Opportunities and Threats are factors that affect the entire industry, maybe even the entire marketplace. If an Opportunity or a Threat is company-specific, then it is not an external factor; it is an internal factor.
Internal factors are Strengths and Weaknesses. Be sure to read Chapter 4 to learn more about internal analysis, using either a resource based view, a value chain view or a competence perspective – or all three. Although you should include some reference to key financial aspects of the firm, no significant analysis of the financial aspects of the firm are needed until Case 3.
Based on your analysis, you recommend to the CEO what Potbelly should do strategically. And support your strategic recommendation. Why is it the best solution to the significant problem you have identified? You might also consider: Does the new strategy make sense? Does the focus seem correct? Is the CEO zeroing in on the right issues, in your judgment? Why or why not?
Your recommendation should have as foundation at least 1-5 internal factors and at least 1 -5 external factors. You can mix and match – what strengths should the company use to take advantage of an opportunity; or what opportunity should the company take to solve one of its weaknesses. What strengths could the company use to mitigate a threat; or what weaknesses must the company address so they do not fall victim to the treats facing the industry. Yes – this is a SWOT analysis. And the true payoff of SWOT analysis is learning enough to develop a strong strategic approach to gaining competitive advantage.
Please see the three files for instructions regarding Case Studies in this class. Remember: your report is based on where the company and the industry are now! 2018! The fourth file, ” New Potbelly CEO Wants to Make Sandwiches More Interesting ” is the basis for your case about the company. At the end of the article is the link to the online version that also includes many charts, graphs and further information.
You will be delving into the exciting world of the fast-casual restaurant industry (or the fast-casual sandwich industry – you choose). For your quantitative analysis draw on as many current sources as you can to get the material for some quantitative analysis of the industry and the current company. The company is publically traded; its annual report and 10-K will be most helpful.
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