Exploring the Strategic Role and Benefits of Business Case CompetitionsPublished: August 11, 2004 in Knowledge@Emory
When companies face a challenging business problem, there are a number of avenues they can take to get answers. Beyond internal teams and consultants, a growing number of companies are tapping the talent in MBA programs through case competitions in order to bring fresh ideas and innovation to a variety of business issues.
Earlier this year, Marietta-Ga-based Solvay Pharmaceuticals, Inc. invited Atlanta-area business schools to compete in the Solvay Challenge 2004, the company’s inaugural business school study competition.
The problem? Solvay Pharmaceuticals’ AndroGel® (which represents 40% of its U.S. total sales), is the brand leader in the rapidly growing testosterone replacement therapy market and the company wants to retain that leadership position. The testosterone replacement therapy market is expected to top $410 million in 2004 (up from just under $360 million in 2003), and not surprisingly, competitors are entering the market in hopes of capturing a portion of AndroGel®’s commanding market share.
In addition to attracting new ideas, the competition also provided an opportunity for the company to introduce itself to area schools, professors and students. “The idea was to foster relationships with area schools and, at the same time, get fresh ideas from the students,” notes Kumar Kantheti, a senior marketing research analyst for Solvay Pharmaceuticals and recent Goizueta Business School graduate [MBA 2002]. “AndroGel® is our biggest brand. Anything innovative the students could bring to the table would have an impact on the product.”
A number of teams entered the competition, including a team from Goizueta. Susan Gilbert, a professor in the practice of finance and associate dean of the evening MBA program, was the faculty lead, and full-time MBA students Kaido Kaarli, Jordana Kraft, Jimmy Lin, Susan Lin and Jim Mason rounded out the team. Each team was given eight weeks to work on the project, and given access to Solvay Pharmaceuticals’ employees in various functional areas, including market research, marketing, sales and new business development. The challenge culminated in a 45-minute presentation to high-level employees in the company’s commercial operations division, who ranked the presentations based on creativity, analytical rigor and the team’s overall presentation style.
“All the presentations were energetic, enthusiastic and well thought out,” observes Kevin Rose, Business Director, Specialized Markets for Solvay Pharmaceuticals. “It was very close.”
The Goizueta team took the top prize and received $20,000. For the students, the competition provided an opportunity to research and solve real-world problems, enhance team-building skills, and interact on a deeper level with the Goizueta faculty.
Goizueta team member Mason called it a “capstone experience,” and noted that although there was a focus on marketing, the team used decision analysis and financial models to show the effects of their business strategies. “The challenge seemed to synthesize a lot of topics and concepts we covered in two years [at school], and brought it to conclusion in dramatic fashion,” said Mason, who will be consulting for Deloitte starting in September. “It took a lot of time, but it was worth it.”
Fellow Goizueta team member Susan Lin concurred that the challenge commandeered the student’s workload, but she said they worked around it. “There was a sense of urgency when we met,” said Lin, a consultant with Kurt Salmon Associates. “The team was very efficient.”
As faculty lead, Gilbert worked with Mason to set up the financial model, and provided a sounding board for the team’s assumptions. She also established a framework to evaluate each of the team’s ideas. “One of my jobs was to make sure they had an effective decision framework, and to tell them why that was so important in terms of evaluating different strategies and the quantitative impact of the different good ideas.”
The team also consulted Steve Stuk, associate professor in the practice of decision and information analysis, about regression analysis; marketing professors Raj Srivastava and Doug Bowman provided advice on marketing and branding; and Kembrel Jones, assistant dean and director of the MBA Program, Reshma Shah, assistant professor in the practice of marketing, and Molly Epstein, assistant professor in the practice of management communication, assisted with presentation and communications skills.
Gilbert, who has judged her fair share of case competitions, notes that great presentation skills will secure a team a top three spot in a challenge, but it’s the data—the analytical rigor—that often secures the win.
In this case, the Goizueta team considered several options, including a merger, acquiring another company, as well as pricing and packaging innovations. “The team ultimately concluded it was more about new ideas and maintaining the drug’s dominant position through innovation,” notes Gilbert. The team came up with a multi-pronged strategy to boost total revenue by increasing the number of AndroGel® customers. Those strategies included recapturing lost customers, eliciting current customers to buy more of the product, and attracting new customers.
While impressed with all of the teams' presentations, the Solvay Pharmaceuticals representatives say the Goizueta team did the most thorough analysis and presented that analysis with support, including increased growth opportunities, trending and return on investment (ROI) calculations.
The company is also pleased with the outcome of the competition. “At least 30% to 40% of [the ideas] were unique,” says Solvay Pharmaceuticals’ Rose. “We intend to utilize [what we learned from the competition] as part of our business planning process and share it with our advertising agency to see how to leverage and use what we’ve learned.”
Additionally, the competition reaffirmed several decisions the company had already made in terms of AndroGel®. It also proved to be a cost-effective way to unearth new ideas. Rose and Kantheti estimate that hiring an outside consultancy to approach the same issue would have cost the company in the neighborhood of $150,000. With a total budget of $40,000 for the business case competition, Kantheti says Solvay Pharmaceuticals “got a great ROI.”
As far as mimicking a real life business experience, Rose says the challenge was “90% close” to developing a business plan. The only thing the students will miss, notes Rose, is that they won’t get to implement their ideas.
For Solvay Pharmaceuticals, “The competition opened the door to networking opportunities and brought us closer to institutions in the area,” notes Rose. “We’d very much like to see the company do it again.”
Gilbert hopes so too, and stresses that other companies should follow Solvay Pharmaceuticals’ lead. “This should be a blueprint for working with schools and helping our students be better prepared for the business world.”