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The problem statement should be a clear, concise statement of exactly what needs to be addressed. This is not easy to write! The work that you did in the short cycle process answered the basic questions. Now it is time to decide what the main issues to be addressed are going to be in much more detail. Asking yourself the following questions may help:

1. What appears to be the problem(s) here?
2. How do I know that this is a problem? Note that by asking this question, you will be helping to differentiate the symptoms of the problem from the problem itself. Example: while declining sales or unhappy employees are a problemto most companies, they are in fact, symptoms of underlying problems which need to addressed.
3. What are the immediate issues that need to be addressed? This helps to differentiate between issues that can be resolved within the context of the case, and those that are bigger issues that needed to addressed at a another time (preferably by someone else!).
4. Differentiate between importance and urgency for the issues identified. Some issues may appear to be urgent, but upon closer examination are relatively unimportant, while others may be far more important (relative to solving our problem) than urgent. You want to deal with important issues in order of urgency to keep focussed on your objective. Important issues are those that have a significant effect on:
   1. profitability,
   2. strategic direction of the company,
   3. source of competitive advantage,
   4. morale of the company’s employees, and/or
   5. customer satisfaction.

The problem statement may be framed as a question, eg: What should Joe do? or How can Mr Smith improve market share? Usually the problem statement has to be re-written several times during the analysis of a case, as you peel back the layers of symptoms or causation.