STRATEGY SEMINAR – GEST-S-549 – 2015 H2 (v2015-09-19)

PROFESSOR: Jean-Pierre Bizet (bizetjp@gmail.com; see Bio in Appendix)

OBJECTIVES OF THE SEMINAR – The seminar assumes you have successfully internalized the core concepts acquired in a basic strategy course, e.g.: where and how to compete; industry analysis; value proposition, willingness-to-pay, cost position, competitive advantage, business model design. On that basis, the seminar will both deepen your understanding of such core concepts and broaden your knowledge via introduction to new ones. We will devote our sessions to the following themes:

Cognitive biases in strategy and execution Strategy, systems-thinking, the Internet and platform-based networks Internationalization strategy Disruption in service businesses Diversification and Corporate multi-business strategy

Being case-based, the course focuses on practicing strategic diagnosis and problem-solving, not just on acquiring new knowledge through advance readings. At the end, you will be able to:

Better understand and diagnose strategic situations in various industry environments Master and apply key concepts and frameworks of strategic analysis and design Start thinking systemically about decisions, their impact and their second-order consequences

IMPORTANT NOTE FOR ALL SESSIONS – All students are to (a) read all advance readings and prepare all cases first individually; (b) then discuss cases in their study group; (c) finally attend and actively take part individually to all plenary discussions. No group presentations will be taking place.

Grading – Each session starts with a 20 minute individual written “quiz” on the required case preparation (no preparation materials other than the case are allowed during the quiz). In case of a justified absence, a personal, written, 2-page paper on the case should be emailed to bizetjp@gmail.com prior to the plenary session. Individual class participation will be graded as well. There will be no written exam at the end. NB: Please bring your laptop or tablet to the sessions as you will turn in your quiz via “wooclap”, an app you will connect to through ULB SOLBOSCH WIFI.

Cases and Readings – for which permission to duplicate has been purchased from, and granted by, Harvard Business Publishing – will be e-mailed to all students in advance of each session.

Calendar: (NB: 8am session in R42.4.110; 4pm session in R42.5.110)October 21: 8am (sharp)-10am Session 1; 4pm (sharp)-6pm Session 2October 28: 8am-10am Session 3; 4pm-6pm Session 4November 4: 8am-10am Session 5November 18: 8am-10am Session 6; 4pm-6pm Session 7November 25: 8am-10am Session 8; 4pm-6pm Session 9December 2: 8am-10am Session 10; 4pm-6pm Session 11December 9: 8am-10am Session 12

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PREPARATION FOR EACH SESSION

SESSION 1 – CASE: Keeping Strategic Dialogue Moving

SUBJECT: Cognitive biases in strategy development

Readings: The Case Method of Instruction (NB: applies to the whole seminar) Why Do Good Managers Choose Poor Strategies ? (HBS Note) The Processes of Strategy Definition and Implementation (HBS Note) Ground Rules for Effective Group Dialogue, R.W. Schwarz

Question: Identify in the case ALL instances of behaviors, mindsets and statements which you believe hinder constructive strategic dialogue. Use ”Ground Rules for Effective Group Dialogue” as a helper.

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SESSION 2 – CASE: Mount Everest 1996

SUBJECT: Cognitive biases in strategic/operational decision-making

Readings: Same readings as for Session 1

Questions:- What caused the disaster ?- What could have been done by whom to prevent it ?- What lessons can we learn that might apply to the corporate world ?

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SESSION 3 – CASE: Leadership Online: Barnes & Noble and Amazon.com (A)

SUBJECT: Strategy and the Internet vs brick-and-mortar

Readings: Strategy and the Internet (Michael Porter, HBR)

Questions: Based on the information in the case, can Amazon.com be a very profitable company ? Why ? How do you evaluate B&N’s response to Amazon’s threat in online bookselling ? If you had been counselling B&N, what would you have recommended they should do to

confront the substitution threat from Amazon.com in online bookselling ?_______________

SESSION 4 – CASE: Ready.be

SUBJECT: Strategy and the Internet vs brick-and-mortar

Readings: Same as for Session 3

Questions: Could Ready.be have survived profitably ? If yes, under what specific conditions ? Assess the substitution threat of online grocery retailing to traditional brick-and-mortar

grocery retailers, from a value (benefits/price) and cost perspectives

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SESSION 5 – CASE: Google Inc.

SUBJECT: Strategy and the Internet: Platform-mediated networks

Readings: “A Shift of Mind” and “Systems Archetypes” (extracts from Peter Senge, The Fifth Discipline) Platform-Mediated Networks: Definitions and Concepts (HBS Note)

Questions: What were the key reasons behing Google’s early success ? Is search a « winner take all » business ? Why or why not ? Do you view Google’s governance structure, corporate culture, and organizational processes

as strengths or limitations ?_______________

SESSION 6 – CASE: eBAY, Inc. and Amazon.com (A)

SUBJECT: Strategy and the Internet: Platform-mediated networks

Readings: same as for Session 5

Questions: What are the key drivers of profitability in eBay’s business model ? Compare and contrast the eBay and Amazon business models.

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SESSION 7 – CASE: EXKI (not a written case)

SUBJECT: Retail expansion strategy

Readings: Retail Expansion Strategies (HBS Note)

Questions:

There is no written EXKi case. This is a “real life” learning experience. Well in advance of our plenary session, please have a meal at EXKi with your study group (e.g. chaussée de Wavre at Porte de Namur, or rue Neuve across from Galeria Inno's main entrance, or any other EXKi location, if you prefer) and prepare the following assignment questions:

1. Compare and contrast EXKi’s value proposition to Quick or McDonald's Hamburger Restaurants’ value proposition in as many dimensions as you can : e.g. target customer segments, product characteristics, product/service line, taste, pricing, location, interior decoration, atmosphere, customer experience, service levels, and any other dimension you believe may be relevant to customers’ perception of value.

2. Estimate weekly revenue = average ticket value x # tickets, at the restaurant you visit.

3. How would key P&L items (food cost, labor cost, marketing cost, real estate cost, as % of revenue) contrast with a typical hamburger chain's P&L : roughly identical ? higher ? lower ? (you can look up McDonald’s P&L/financial report on their website)

4. What should EXKi’s growth strategy be? In which geographies? How fast? Why? What are the pros and cons of franchising?

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SESSION 8 – CASE: YUM! China

SUBJECT: Business in China

Readings: Political and Economic History of the People’s Republic of China (HBS Note) Inside the Mind of the Chinese Consumer (HBR)

Questions: What are the similarities and differences between KFCs in China and fast food restaurants in

Europe and the USA? What special challenges did Yum face in exporting the KFC model in China and how did Sam

solve them? What are the drivers/hindrances to further KFC growth in China?

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SESSION 9 – CASE: McKinsey & Company : Managing Knowledge & learning

SUBJECT: Disruption in service businesses

Readings: Consulting on the Cusp of Disruption (HBR)

Questions: What are the “strategy”, and the “competitive advantage”, of McKinsey? What are the drivers and hindrances to innovation and international growth?

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SESSION 10: CASE: Target Corporation: Ackman vs the Board

SUBJECT: Strategy and Governance

Readings: Focusing on strategy to govern effectively, K. Palepu, HBS

Questions: Do you think Ackman’s demands for changes at Target are justified, given Target’s strategy

and its financial track record ? Do you think Ackman’s criticism of Target’s board is justified ? If you were an investor, who would you have sided with – Target’s current board, or

Ackman’s proposed slate ? _______________

SESSION 11 – CASE: (to be presented in class – no case preparation required)

SUBJECT: Corporate Multi-Business Strategy

Readings: Strategies of Related Diversification (HBS Note) Strategies of Unrelated Diversification (HBS Note)

Questions: Prepare questions about the readings (for discussion in class)

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SESSION 12 – WHAT HAVE WE LEARNED ?

Readings:

The Past and Future of Competitive Advantage, C. Christensen (MITSloan Management Review)

Is Your Strategy What You Say It Is ? C. Christensen (Rotman Management Review) Most Common Strategy Mistakes (HBSWK interview with Michael Porter) What Strategists Need: A Meeting of the Minds (McKinsey Quarterly: September 2014)

Questions:

Please prepare with your study-group a collective 2-page paper reflecting your study-group's answer to the following question: What are the most important things you believe you have learned through the seminar ? (Take the widest definition of ”things” and ”seminar" : include everything relevant, e.g. theoretical and/or practical knowledge, significant new insights you extracted from cases or readings, what you learned from the case method, from your study group meetings and from our plenary discussions, etc…).

Please send me your paper by email before the session and come prepared to share and discuss the 2-3 key thoughts in your paper. NB: This paper will not be graded, be candid !

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Appendix. Jean-Pierre Bizet - summary bio.

Jean-Pierre Bizet is currently :

Partner at New Science Ventures LLC, a New-York based Venture Capital firm which invests in companies using novel scientific approaches in the life sciences and information technology sectors worldwide

Non-executive board member of several companies and non-profit foundations Professor at ULB-SBSEM since 1980, where he teaches business unit and corporate strategy,

and a Board member of Solvay Executive Education.

From 1980 until 1994, JPB was successively a consultant, engagement manager, Principal and Director at McKinsey and Co. Inc, in Paris, France. He also co-led McKinsey’s Change Management practice worldwide.

From 1999 until 2002, JPB was CEO of GIB Group, a leading Belgian retail holding group and a BEL-20 company, and, from 2002 until 2013, JPB was CEO of D’Ieteren, also a BEL 20 company and a multibusiness group (Carglass Worldwide; D’Ieteren Auto, the Belgian distributor of VW Group’s car brands; and Avis Car Rental EAMEA until 2011).

Jean-Pierre Bizet is a graduate of Solvay (1970), Harvard Business School (MBA 1973), and holds a PhD in Applied Economics from ULB (1978).