Critical Analysis and Writing

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Critical Analysis: What

What to do: • Analyse decisions made by business people • Understand their rationale (reasons for making that particular decision) • Provide recommendations about future actions

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Critical Analysis: Why

1. Learn to solve complex problems 2. Deal with the unexpected 3. Persuading others

Descriptive

Analytical

Critical Analysis

Persuasive
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Critical Analysis and Writing

Key steps:
1. Understand the question and context 2. Conduct research and analyse the situation 3. Develop possible solutions and evaluate options 4. Recommend a course of action and argue for it What is the questions asking? What information are we missing? What does analysis suggest? What else do we know?

What do we need to research?

What is happening to the business?

What are the possible options?

Which one’s are better?

State your recommendations

Build an argument to support them
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1. Understand the question and context

What is the question actually asking? What is happening? When? Who is involved? What are the facts? Do we have additional information about the case? What is our deliverable?
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Critical Analysis Example : Food wars

You are a junior strategy analyst at Coles. Given the recent controversy around food discounting (Food wars), you have been asked by senior management to provide a recommendation as to whether Coles should continue the discounting or not. In your answer provide a clear rationale for your recommendation.
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Food Wars

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What is happening in the case? Understanding the case What happened? - When? - Who was involved? - What are the facts?
Milk Wars
Coles selling milk at below cost prices to attract customers Milk producers fear pressure to lower their prices

Woolworths sides with the milk producers

Coles continues to discount the milk, denies plans to pressure producers
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What is happening in the case? Understanding the case What happened? - When? - Who was involved? - What are the facts?
Fruit and vegetable producers fear further pressure from supermarkets

Fruit Wars
Coles introduces weekly fruit deals – selling fruit and vegetables at high discount

Coles and Woolworths remain profitable, analysts attribute this to decreasing margins for certain products
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Understanding the question

Provide a recommendation as to whether Coles should continue the discounting or not

2 Options to argue for

Discounting is good for Coles

Discounting is bad for Coles
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Understanding the question

Based on the particular case, you may be asked to: • Argue for one option • Choose between a set of options • Generate a set of options yourself and recommend one

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2. Conduct research and analyse the situation

› Find out more about what happened › Research similar situations › What kind of things we could look for here? › Use your business knowledge, concepts and frameworks to conduct analysis

Retail consumer behaviour

Cost leadership strategy in food retail

Supplier relationships and consumer demand

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3. Develop possible solutions and evaluate options

Continue discounting › Increases sales of discounted product (e.g. Milk) › Increases customer traffic so people buy other products (Gruen Transfer) › Positive for brand as it is good for everyday Australian

Stop discounting

› Damages supplier relationships › Damages brand image through Farmer abuse › Creates stronger ‘ethical’ image for competition

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3. Develop possible solutions and evaluate options

Continue discounting › Increases sales of discounted product (e.g. Milk) › Increases customer traffic so people buy other products (Gruen Transfer) › Positive for brand as it is good for everyday Australian

Stop discounting

› Damages supplier relationships › Damages brand image through Farmer abuse › Creates stronger ‘ethical’ image for competition

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How to decide on the best recommendation and rationale?

The rationale is the argument to persuade your reader that the recommendation is valid. 1. Use quality research 2. Apply key concepts and frameworks 3. Use a A-CA-R format

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4. Recommend a course of action and argue for it
Developing an informed answer Recommendation : Coles should proceed with discounting Rationale: Reasons why discounting is good

Argument for discounting Coles attracts more customers who buy more items than just food staples giving Coles higher market share. Coles creates an image of caring about the average Australian by offering cheaper staple goods like milk and fruit.

Theory/Concept Sustainable competitive advantage/Return on Assets Stakeholder/Increasing revenues

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A-CA-R

Argument
• Statements in support of your position

Counter Argument
• Potential challenges to your position

Rebuttal
• Supporting your original statements – why the challenges are not persuasive
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4. Recommend a course of action and argue for it

Considering counter-arguments
Argument for discounting Coles attracts more customers who buy more items than just food staples giving Coles higher market share Issues/Risks – counter arguments Coles’ behaviour is unethical and puts profits before the well-being of farmers and growers, creating fears that it will push the discounting through to producers. This may drive customers away and lower profits. Woolworths supports food producers and depicts Coles as a heartless corporate giant that exploits its market bargaining power over small producers by not caring about the average Australian.
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Coles creates an image of caring about the average Australian by offering cheaper staple goods like milk and fruit

Step 4. Developing the Rationale
Dealing with risks: rebuttal (dismissing) the counter-argument
Argument for discounting Coles attracts more customers who buy more items than just food staples giving Coles higher market share. Coles creates an image of caring about the average Australian by offering cheaper staple goods like milk and fruit. Issues/Risks – counter arguments Coles’ behaviour is unethical and puts profits before the well-being of farmers and growers, creating fears that it will push the discounting through to producers. This may drive customers away and lower profits. Woolworths supports food producers and depicts Coles as a heartless corporate giant that exploits its market bargaining power over small producers by not caring about the average Australian. Dealing with the risks (Rebuttal) Coles actually promised NOT to force the producers to sell at lower prices, which makes the first counter argument speculative.

By discounting food, Coles is indeed maximising the utility of a larger number of people – all Australians compared to a small number of producers.
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Rationale
There are two main reasons for Coles to continue discounting food items in their stores. Firstly, by discounting milk Coles is ensuring that customers are attracted by lower prices and will buy other products together with their milk and fruit (Johnson 2012). This will have a positive impact on Coles’ market share and profits. Those who oppose this move might argue that discounting is unethical as it exploits food producers and that Coles’ damaged reputation will actually drive customers away to competition (Lee 2011). However, as Coles has provided multiple public reassurances that it does not intend to pressure producers to drop the price of produce, this viewpoint lacks sufficient grounding to pose a credible threat at this point in time (Davis 2011) . The second reason to continue food discounting is . . .

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Rationale
Persuasive rationale: ARGUMENT FOR There are two main reasons for Coles to continue discounting food items in their stores. Firstly, by discounting milk Coles is ensuring that customers are attracted by lower prices and will buy other products together with their milk and fruit (Johnson 2012). This will have a positive impact on Coles’ market share and profits. Those who oppose this move might argue that discounting is unethical as it exploits food producers and that Coles’ damaged reputation will actually drive customers away to competition (Lee 2011). However, as Coles has provided multiple public reassurances that it does not intend to pressure producers to drop the price of produce, this viewpoint lacks sufficient grounding to pose a credible threat at this point in time (Davis 2011) .

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Rationale
Persuasive rationale: COUNTER-ARGUMENT There are two main reasons for Coles to continue discounting food items in their stores. Firstly, by discounting milk Coles is ensuring that customers are attracted by lower prices and will buy other products together with their milk and fruit (Johnson 2012). This will have a positive impact on Coles’ market share and profits. Those who oppose this move might argue that discounting is unethical as it exploits food producers and that Coles’ damaged reputation will actually drive customers away to competition (Lee 2011). However, as Coles has provided multiple public reassurances that it does not intend to pressure producers to drop the price of produce, this viewpoint lacks sufficient grounding to pose a credible threat at this point in time (Davis 2011) .

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Rationale
Persuasive rationale: REBUTTAL There are two main reasons for Coles to continue discounting food items in their stores. Firstly, by discounting milk Coles is ensuring that customers are attracted by lower prices and will buy other products together with their milk and fruit (Johnson 2012). This will have a positive impact on Coles’ market share and profits. Those who oppose this move might argue that discounting is unethical as it exploits food producers and that Coles’ damaged reputation will actually drive customers away to competition (Lee 2011). However, as Coles has provided multiple public reassurances that it does not intend to pressure producers to drop the price of produce, this viewpoint lacks sufficient grounding to pose a credible threat at this point in time (Davis 2011) .

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