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University of Southern California

Marshall School of Business

BUAD 497: STRATEGIC MANAGEMENT

FALL 2011 Section 15092R (T,Th: 8:00 – 9: 50 am, ACC 201)

Section 15096R (T,Th: 10:00 – 11: 50 am ACC 201)

Section 15102R (T,Th: 2:00 – 3: 50 pm ACC 201)

Professor: Judith F. Blumenthal, Ph.D. Office: Bridge 307D

Phone: (213) 740-0734

Fax: (213) 740-3582

Office Hours: Tuesdays, 1:10-1:50 p.m. and by

appointment

Prerequisites: Successful completion of all core

business requirements

Email: judith.blumenthal@marshall.usc.edu

COURSE DESCRIPTION This course introduces the concepts and tools of strategy formulation and competitive analysis. You will learn about

why some firms survive and prosper while others do not, and you will develop critical analysis and communication

skills necessary to create and implement firm strategy. The course focuses on the information, analyses,

organizational processes, and skills and business judgment managers must use to craft strategies, position their

businesses and assets, and define firm boundaries, so as to maximize long-term profits in the face of uncertainty and

competition.

This course is also designed to develop among participants the ―general management perspective,‖ often also called

the general manager's point of view. This view is critical because fundamental strategic business decisions can only

be effectively made by viewing a firm holistically, and over the long term. These decisions typically include the

determination of organizational purpose, the pursuit of specific opportunities, and the creation of competitive

advantage, the allocation of critical resources, and the choice of competitive strategies.

This is an integrative course in two respects. First, it takes a broad view of the environment that includes customers,

technology, economics, capital markets, competitors, special interest groups, and government. Thus it draws

together ideas from other functional/discipline-based courses. Second, the course takes the perspective of the firm

as a whole and examines how policies in each functional area can be integrated into an overall company strategy. A

major objective of this course is to acquaint you with a body of analytical tools to aid strategic decision-making,

taking into account the various factors mentioned above.

In addition, major emphasis is placed on action and implementation, not just on analysis. You will have an

opportunity to observe general managers in action, to develop skills in setting strategic priorities, and prepare

integrated action plans. Since the course calls on you to integrate concepts of all other courses from the perspective

of the general manager, it should also help you examine your own interests and capabilities for the job.

Because the success of this course depends heavily on students’ active participation and involvement, I will expect

you to be present and well prepared, and to engage in respectful discussion and debate throughout the semester.

COURSE MATERIALS Text: Carpenter, M.A. and W.G. Sanders. Strategic Management: A Dynamic Perspective -

Concepts, Upper Saddle River, N.J.: Pearson-Prentice Hall, 2nd edition, 2009. (CS)

Readings/ Cases: Most readings and cases for this course are available in a course reader from the University

Book Store.(CP). A few readings are available on the university electronic course reserves

(ARES), which you can find though the ―libraries‖ link on Blackboard. Please refer to

Appendix A for list of all assigned readings and cases.

Additional Readings: Additional readings may be added during the semester. They may be available for purchase

at the bookstore, electronically through the USC electronic reserve system (ARES), or on

Blackboard (BB).

COURSE COMMUNICATION

NOTE: BUAD 497 is a core course that is taught by several instructors. Policies regarding

assignments and grading may be different for each instructor. Be sure to refer ONLY to this

syllabus.

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EDUCATIONAL OBJECTIVES Theory and Concepts. The central concept of this course is that of competitive strategy. Definitions abound, but

they all share some sense of the allocation of critical resources over relatively long periods of time in pursuit of

specific goals and objectives. Successful strategies exploit external conditions, entrepreneurial insights, and internal

resources, seeking configurations of prices, preferences, technologies, and information that offer opportunities for

sustainable competitive advantage. Strategy can be usefully thought of as the comprehensive alignment of an

organization with its future environment.

Success, however, depends not only on the soundness of the strategy, but also on its effective implementation

through appropriate organizational and administrative choices. In the end, unforeseen external factors may cause a

well-conceived and executed strategy to fail, in spite of its initial wisdom -- but a poor strategy badly executed

increases the chances of failure. Opportunities to act strategically occur infrequently. If missed, or mismanaged,

they can prove disastrous for any firm.

Understanding the concept of competitive strategy formulation is a primary educational objective of this course.

This will involve mastering an array of economic, strategic, and organizational concepts and theories, and acquiring

an integrative general manager’s point of view. The course will cover theories for in-depth industry and competitor

analysis, for anticipating and predicting future industry developments, and for examining the impact of change (in

technologies, tastes, government regulations, global competition, and other important environmental forces) on

competition and industry evolution. The course will also examine the economic underpinnings of competitive

advantages, and the fundamental conditions that allow firms to conceive, develop, and sustain, advantageous

strategic positions.

Analytical Skills. Theoretical concepts are a great aid to understanding, but by themselves they do not help resolve

real business problems or challenges. Also needed are analytical skills and techniques that can be applied to the data

to question and validate the facts and premises assumed in the theories. A second educational objective is to further

increase each student’s inventory of useful analytical skills and tools. Some of the tools are quantitative -- analyzing

financial statements, computing comparative buyer costs, and calculating the effects of scale and learning on

production costs, for example -- while others are more qualitative. Learning how to apply these techniques, and,

more importantly, when to apply them is a key objective of the course.

In learning to assess a business and its problems or opportunities, this course will allow you experience in

conducting comprehensive strategic analyses. That is, identifying firms’ strategies and testing them for consistency,

recognizing potential entrepreneurial opportunities and strategic challenges/problems, selecting and establishing

competitively protected market niches, identifying competitive advantages and shaping defenses to circumvent the

advantages of rivals, formulating and implementing internally consistent business strategies, and designing efficient

and effective organizations.

Rhetorical Skills. The best analysis in the world will have little effect if it cannot be communicated to others.

Managers must be able to articulate their views coherently and persuasively, and they must be skilled at

understanding and critiquing other points of view. Management is a "verbal sport"; perhaps 90% of a typical

manager's day is consumed by oral communication. Time is often scarce. You must learn to make convincing

arguments and to make them quickly, or the merits of their ideas are likely to become simply irrelevant. This skill

takes practice, and we will place a great deal of emphasis on it in class.

Wisdom. Much of the knowledge that successful managers employ consist of "rules of thumb" about what issues

are likely to be important in certain kinds of business situations. These rules of thumb, or heuristics, are often

implicit in the thinking of people who have never bothered to articulate them explicitly. A fourth goal of this course

is to help you build up your set of useful "stories" and heuristics for your future managerial careers.

In this course we are as much interested in developing an appreciation for the art of management as we are in

understanding the science of management. Tools alone may make you a good analyst; they will not make you a

strategist. While the ability to master analytical models, frameworks, and tools is essential, ultimate success is more

strongly predicated on prescient judgment, entrepreneurial insight, iconoclastic vision, and a willingness to act

forcefully with conviction.

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COURSE FORMAT AND THE CASE DISCUSSION METHOD In order to achieve the objectives of the course, we will devote substantial time to the analysis and discussion of

selected cases. Cases provide a natural test-bed for theory and provide vivid examples that aid memory of concepts.

While nothing can surpass first hand personal industry and managerial experience as a basis for analysis and

decision-making, case analysis is an indispensable proxy for the kind of knowledge that can only be gained through

years of experience and research. A mix of business cases has been selected on a range of companies from a variety

of industry settings. Each case is intended to teach us something specific, yet each can teach many things. We will

not attempt to exhaust each case of all its learning experiences, but rather build up a kit of analytical tools, skills and

insights, progressively over all the selected cases.

There are other reasons for employing the case discussion method of instruction. First, it allows you to develop

skills at problem definition in addition to problem solving. Cases typically do not have an obvious set of tasks

whose performance will lead to mastery. Rather, they force you to sift through a mass of information, some of it

irrelevant or contradictory, in order to identify the important or strategic issues. You may discover that your

preparation "misses" key points of a case, especially at first.

Second, the case method gives you a chance to deal with ambiguity. Most cases do not have obvious "right"

answers. Managers must be able to function in situations where the right answer is not known, without falling into

the trap of assuming that any answer is as good as another. Some analyses and proposed strategies are clearly

wrong, and some are clearly better than others. A popular phrase in case analysis classes is "There are no right

answers, but there are wrong answers." I may not reveal my own opinions about a particular issue, and there will

be cases which will not end up neatly packaged with an "answer." Case discussion techniques provide a chance to

learn the meaning of analytical rigor in situations that are more ambiguous than black-and-white problems.

The quality of your learning experience will be directly determined by: (1) your degree of preparation, active

listening, and participation, and (2) your classmates' preparation, listening, and participation. Some will not agree

with you, and you may be asked to defend your argument or change your mind. So long as criticism is directed at

arguments and not at individuals, is relevant to the issues at hand and coherently argued, it is very much welcomed.

You are strongly encouraged to form study groups that meet regularly to share insights and ideas about the assigned

cases. While this is voluntary, past experience has shown that it contributes significantly to course performance.

There is a good chance that you will feel a bit confused or overwhelmed during the first few sessions of the course.

This can result from the case method itself, combined with the unusual structure of the strategy course. The course

does not build up linearly by successively adding components of knowledge week by week. Rather, every case in a

sense contains all the material in the entire course. Furthermore, the early theoretical concepts probably won't have

much meaning for you until you've worked through a few cases. As a result, there is no logical way to start off

except by immersion, i.e. throwing you in the deep end of the pool and letting you struggle to stay afloat. The good

news is that the number of new ideas for you to learn drops off quickly and old ideas continue to be relevant. This

way you will get multiple chances to master the basic concepts of the course. So remember: SOME CONFUSION

IS NORMAL AT FIRST.

Please refer to Appendices C and D: Guide for Analyzing Cases and Case Assignment Questions

In addition to cases, the course will include a textbook, lectures, and articles, which will provide key theoretical

models and frameworks and reinforce crucial concepts.

Please refer to Appendix B: Guide for Analyzing Articles.

COURSE EVALUATION Course grades will be determined by students’ relative performance on the following course components:

Course Participation (in-class participation , research activities, and quizzes) 15%

Midterm Examination 20%

Final Exam 25%

Group Case Brief (2 @ 7.5% each) 15%

Group Strategy Analysis (Report and Presentation) 25%

Total 100%

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In order to pass this course successfully, a passing grade must be achieved in the combined average of the group

projects AND in the combined average of the individual components. Plus and minus grades will be assigned to

those immediately above or below grade cutoff points.

INDIVIDUAL COURSE COMPONENTS

Course Participation

This part of your grade will be based on effective contributions to class discussions, performance on

quizzes, and your involvement in research activities. These are discussed below.

In-Class Participation: The key to successful performance in class participation is to provide valuable

input that is relevant to the course content and the topic of discussion. Your overall commitment and your

daily active verbal participation in case discussions will be closely monitored. The case notes that you

prepare in advance will be hugely valuable to you during these discussions. Class participation is obviously

a function of preparation, skills, attitude, and a willingness to actively commit yourself in front of your

instructor and colleagues.

Students may be called on at random to take the lead in various aspects of the case discussion: to identify

critical problems, provide analysis of relevant data (including financial data), generate alternative

recommended courses of action, and generate ideas about implementation. If you are not present, are late,

leave early, or are not sufficiently prepared to make a substantial contribution to the class discussion, you

will lose points for class contribution. Factual misstatements, comments that demonstrate a lack of

adequate preparation, or comments that come late in a discussion that distract the class and indicate that the

student has not been actively listening will be noted as ―negative‖ course participation. Attempts to

dominate class discussion rarely result in consistent and significant contributions. The quality of the

contributions made during class periods determine students’ overall participation grade.

While ALL students are expected to come to class prepared to discuss ALL cases, I will place special

emphasis on class participation for those students who have prepared written briefs for the case being

discussed. While groups will not be called upon to make formal group presentations of cases, I will expect

all members of groups submitting case briefs to be able to present specific portions of their analysis ―on

command.‖

In grading class participation, I will look at both the quantity and quality of your class contributions. With

regard to quality, the dimensions that I look for include:

Relevance: Does the comment bear on the subject at hand? Comments that do not link up

with what the discussion is focusing on can actually detract from the learning experience.

Causal Linkage: Are the logical antecedents or consequences of a particular argument traced

out? Comments that push the implications of a fact or idea as far as possible are generally

superior.

Responsiveness: Does the comment react in an important way to what someone else has said?

Analysis: Is the reasoning employed consistent and logical?

Evidence: Have data from the case, from personal experience, from general knowledge been

employed to support the assertions made?

Importance: Does the contribution further our understanding of the issues at hand? Is a

connection made with other cases we have analyzed?

Clarity: Is the comment succinct and understandable? Does it stick to the subject or does it

wander?

Individual Quizzes. I may give short unannounced quizzes during the course. No make-up opportunities

are available if you are absent or late. Performance on quizzes will count toward your participation grade.

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Mandatory Research Activities: Participation also comprises involvement in research activities. The

University of Southern California is recognized as one of the world’s leading research universities, and the

Marshall School of Business is recognized as a leading center of research within its scholarly domain,

including strategic management, organizational behavior, marketing, finance, accounting, and information

and operations management. Research universities are distinguished and recognized for educating students

in past knowledge AND for being the primary societal engine that creates new knowledge for the

advancement of society. This recognition by the outside community enhances the value of your degree to

potential future employers as well as to other educational institutions to which you may apply for further

education.

As a student who benefits from being a member of a research university, you also have an obligation to

help contribute to research. Therefore, there is a mandatory research requirement as part of your education.

You can choose one of two options to fulfill this requirement. (You cannot do part of Option 1 and part of

Option 2.) Please note that, if you do not complete one of these two options, you will lose the points for

this part of your grade.

Option 1:

First, you can participate in research studies. To do this, you will attend sessions outside of class, conducted

by researchers in MOR at Marshall. You will earn one credit for each separate study you complete; most

sessions are no more than an hour long. You will need to obtain 4 credits during the semester in order to

fulfill the research requirement. If you choose this option, please register for an account at http://marshall-

mor.sona-systems.com/ (see instructions posted separately to Blackboard) no later than Friday September

16, 2011. Those who do not register by this date will be required to complete Option 2. After you verify

your account, you will need to check the site regularly to find open studies and sign yourself up for

appointments. Studies are scheduled throughout the semester, on various days and times. It’s important that

you complete your credit early; if you wait until the end of the semester, there may not be enough studies

available. You are not guaranteed an available study spot. Please note: If you earn your first 3 credits by

showing up to ALL of your scheduled sessions, on time and without cancelling, then you will earn your 4th

credit ―free,‖ as a bonus. That is, the system is ―earn three, get one free‖--again, provided that you show up

to all three early sessions as scheduled and on time. To receive full participation points, you must earn your

first credit by Friday October 28, 2011. Your other credits can be earned any time before December 2, 2011

(last day of Fall semester classes). As a courtesy to the researcher and other students waiting for spots,

please use the online system to cancel your appointment ASAP if you can’t make it.

Option 2:

Your second way to complete the research requirement is to write 3 well-reasoned, 3-page research papers

on topics prearranged with your instructor. Students must be aged 18 or older by Friday October 28, 2011

in order to choose Option 1; otherwise, you will need to use Option 2. Papers must be turned in no later

than December 2, 2011 by 5:00 p.m. to Bridge Hall 306, Attention to Jennifer Overbeck or Jennifer Lim.

NOTE: no electronic copies will be accepted…only a printed copy of the papers will be accepted.

IMPORTANT NOTES: (A) if you have already have a research study account from a past BUAD 304 or

BUAD 497 course, you will need to email the administrator from the website in order to request account

reactivation. She is Jennifer Lim (jennifer.lim@marshall.usc.edu). (B) If you are enrolled for Marketing

BUAD 307, please make sure you visit the Marketing research study website your Marketing Professor has

given you. Please see Marketing syllabus.

Detailed signup instructions for research studies are provided on Blackboard.

Midterm Examination. A midterm examination will be given to test your knowledge of course concepts. The

midterm exam will consist of multiple choice questions, and may also include short answers, short essays, and /or

analysis of a short case or article. The midterm exam will be administered in class during regular class periods. Be

sure to bring a blue book, a pen and a #2 pencil to this exam.

NOTE: No make-up midterm examinations will be given. A student who misses the midterm exam will be assigned

80% of the score he or she earns on the final exam as a grade for the missed midterm exam. A student must

complete all other course components, including the final exam, to receive a passing grade for the course.

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Final Exam. A final exam is scheduled for this course. It will be given during the exam time specified by the

University and indicated in the course schedule portion of this syllabus. The final exam will be cumulative, and will

call upon your understanding and application of all material covered throughout the semester. The exam will consist

of a case analysis. Be sure to bring a blue book and a pen.

GROUP COURSE COMPONENTS

Team Formation for Group Case Assignments . I will make time available in class for you to form yourselves into

teams for group case assignments. Each team will then randomly draw a number, which will be your team number

for case assignments..

Written Group Case Briefs As part of a five-member group, you will prepare two written case briefs. The

schedule indicates the cases for which your team will prepare written case briefs. (Please see Appendices C, D, E,

and G: Guide for Analyzing Cases, Case Assignment Questions, Case Brief Assignments, and Additional Guidelines

For Written Reports.) You are likely to be called upon in class to present some aspects of the cases for which you

have prepared written briefs.

Group Strategy Analysis: Report and Presentation. The group strategy analysis project is a team exercise for

which each team will consist of five members. Expect under exceptional circumstances, teams will be the same as

for the case brief, described above. Any exception must be approved by me. Please see Appendix F for assignment

details as well as Appendices G and H: Additional Guidelines For Written Reports and Additional Guidelines For

Class Presentations.)

Peer Evaluations. Each of you will complete a peer evaluation of the members of team. The peer evaluation form

is Appendix I of this syllabus. Your peer evaluation, in hard copy form, is due not later than the last day of class

before the final exam period. (Electronic copies will not be accepted.) Timeliness and care in completing your peer

evaluation will be part of your participation/commitment grade.

GENERAL COURSE POLICIES Attendance and Participation. Class attendance is absolutely essential! Case courses, unlike lecture courses,

depend for their success on student commitment, participation, and engagement in discussing the issues presented in

the cases by collectively analyzing of the case issues, recommending solutions, and evaluating alternative ways of

implementing them. Therefore, your participation in the analysis is critically important for others as well as your

own learning! Missed classes, tardiness, and early departures result in a loss in class contribution and participation

points, and will be noted as evidence of low course commitment.

The policy on missed classes is to allow each student three (3) absences, no questions asked, no penalty. ALL

further absences over the limit will reduce the student's participation grade. You do not need to contact me with

regard to your absence. Students with an excessive number of absences are at risk of failing the course.

Late Reports. Late reports will be penalized 10 percent for missing the deadline, and 10 percent per day late.

Group presentations MUST be given on the date assigned in order for credit to be received.

Missed Examinations. No make-up midterm examinations will be given. A student who misses the midterm exam

will be assigned 80% of the average score he or she earns on the final exam as a grade for the missed midterm exam.

A student must complete all other course components, including the final exam, to receive a passing grade for the

course.

Turn off all Communication and Entertainment Devices. Please note that all communication devices such as

computers, cell phones, Blackberries, iPhones, Android devices, etc. capable of sending and or receiving electronic

communication, and all entertainment devices such as iPods or other MP3 players are to be turned off and kept off

throughout the class session. Receiving or sending communication or entertainment during class disrupts the

learning environment and is rude to those around you. Failure to turn off these devices will affect your participation

grade adversely.

Returned Assignments The Marshall School of Business policy for returning papers is as follows:

Returned paperwork, unclaimed by a student, will be discarded after four weeks and hence, will not be available

should a grade appeal be pursued by a student following receipt of his/her course grade.

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COURSE COMMUNICATION: BLACKBOARD SYSTEM

I have posted the course syllabus and assignment information to the BUAD 497 folder for your section in

Blackboard. I will also post additional course lecture notes/materials, further details on assignments, and general

course announcements to this folder throughout the semester. You should develop the habit of checking the course

folder on a daily basis. You can access Blackboard through the ―My Marshall‖ portal http://mymarshall.usc.edu, or

directly: https://blackboard.usc.edu. You will need your UNIX password.

Important:

E--mails sent to the class originate from the Blackboard system. It is your responsibility to insure that your e-mail

address and account settings in Blackboard are correct for you to receive messages. If you need to send me an e-

mail, please do so through the Blackboard system.

ACADEMIC INTEGRITY

The following information on academic integrity, dishonesty, and the grading standard are placed here at the

recommendation of the Marshall School of Business Faculty and are taken from the Faculty Handbook. Additional

statements about academic integrity may be found in SCampus handbook available at the Topping Student Center

and online at http://www.usc.edu/go/scampus. Further information may be obtained from the Office of Student

Judicial Affairs and Community Standards at http://www.usc.edu/student-affairs/SJACS/index.

―The University, as an instrument of learning, is predicated on the existence of an environment of integrity. As

members of the academic community, faculty, students, and administrative officials share the responsibility for

maintaining this environment. Faculty has the primary responsibility for establishing and maintaining an

atmosphere and attitude of academic integrity such that the enterprise may flourish in an open and honest way.

Students share this responsibility for maintaining standards of academic performance and classroom behavior

conducive to the learning process. Administrative officials are responsible for the establishment and maintenance of

procedures to support and enforce those academic standards. Thus, the entire University community bears the

responsibility for maintaining an environment of integrity and for taking appropriate action to sanction individuals

involved in any violation. When there is a clear indication that such individuals are unwilling or unable to support

these standards, they should not be allowed to remain in the University.‖ (Faculty Handbook, 1994: 20)

Academic dishonesty includes: (Faculty Handbook, 1994: 21-22)

1. Examination behavior - any use of external assistance during an examination shall be considered academically

dishonest unless expressly permitted by the teacher.

2. Fabrication - any intentional falsification or invention of data or citation in an academic exercise will be considered

a violation of academic integrity.

3. Plagiarism - the appropriation and subsequent passing off another’s ideas or words as one’s own. If the words or

ideas of another are used, acknowledgment of the original source must be made through recognized referencing

practices.

4. Other Types of Academic Dishonesty - submitting a paper written by or obtained from another, using a paper or

essay in more than one class without the teacher’s express permission, obtaining a copy of an examination in

advance without the knowledge and consent of the teacher, changing academic records outside of normal procedures

and/or petitions, using another person to complete homework assignments or take-home exams without the

knowledge or consent of the teacher.

The use of unauthorized material, communication with fellow students during an examination, attempting to benefit

from the work of another student, and similar behavior that defeats the intent of an examination or other class work

is unacceptable to the University. It is often difficult to distinguish between a culpable act and inadvertent behavior

resulting from the nervous tensions accompanying examinations. Where a clear violation has occurred, however,

the instructor may disqualify the student’s work as unacceptable and assign a failing mark on the paper.

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STUDENTS WITH DISABILITIES

Any student requesting academic accommodations based on a disability is required to register with Disability

Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained

from DSP. Please be sure the letter is delivered to me as early in the semester as possible. DSP is located in STU

301 and is open 8:30 a.m. – 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.

ABOUT YOUR PROFESSOR

Judith Blumenthal has published, taught, and consulted in the areas of strategic management, organizational

development, retail and services management, strategic alliances, and corporate governance. She has also served as a

senior corporate executive. Dr. Blumenthal was Associate Dean of the Marshall School of Business (January 1996

through March 2000) and USC Associate Vice President, Alumni Relations/Executive Director of the USC Alumni

Association (April 2000 through June 2006).

She currently serves on the Board of Directors of Guess? Inc. as well as not-for-profit boards-- the Board of

Directors of the California Council on Economic Education and the Advisory Board of USC Radio. She has also

served on the District Board of Directors of the Council for Advancement and Support of Education (CASE), the

Community Advisors for the Natural History Museum of Los Angeles County, and the USC Alumni Association

Board of Directors.

She received her bachelor’s degree in English from Hunter College of the University of New York, and her M.B.A.

and Ph.D., Business Administration, from USC.

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COURSE SCHEDULE Cl D Date Topic/Activities Readings (CS=text; CP=case packet; ARES-library

electronic reserves )

Cases (CP) Case Gp

1 T 8/23 Course Introduction

Lecture/Discussion

CS: 1 and 2

2 TH 8/25 Concepts of Strategy

Lecture/Discussion

Case Preview

CP: Porter, M., “What is Strategy?”(4134)

CP: Magretta, J., “Why business models matter”

(R0205F)

CP: Wal Mart Stores, Inc (794-024),

(Case Preview: Bring case to class, but do not read

in advance)

3 T 8/30 Concept of Strategy

Case Analysis

ARES: ―Wal-Mart’s Midlife Crisis,‖ Business Week,

Apr. 30, 2007

ARES: ―Wal-Mart Tries to Recapture Mr. Sam’s

Winning Formula”

CP: Wal Mart Stores, Inc (794-024)

4 TH 9/1 Business Landscape and Industry Analysis

Lecture/Discussion

Form Groups for Case Briefs and Projects

CS: 4

5 T 9/6 Business Landscape and Industry Analysis

Case Analysis

CP: Coke and Pepsi in 2006 (706-447) 1,6

6 TH 9/8 Sources of Competitive Advantage

Lecture/Discussion

Case Analysis

CS: 3

CP: Patagonia (711-020) 2,7

7 T 9/13 Competitive Positioning and

Business Level Strategies

Lecture/Discussion

Turn in Company Preferences for Team

Project

CS: 5

CP: Ghemawat , P. and Rivkin, J., ―Creating

Competitive Advantage” (798-062)

8 TH 9/15 Competitive Positioning and

Business Level Strategies

Case Analysis

CP: Brandenberger ,A. and Nalebuff,B, ―The Right

Game: Use Game Theory to Shape Strategy” (95402)

CP: Apple Inc. in 2010 (710-467) 3,8

9 T 9/20 GUEST SPEAKER

Lynda Resnick,

Co-chairman, Roll International

NOTE: This session will be delivered at 2:00 pm only. 8:00 am and 10:00 am classes are invited and encouraged to join 2:00

pm class for this special opportunity. Venue and preparation TBA.

10 TH 9/22 Competitive Dynamics and Rivalry

Lecture/Discussion

CS: 6

11 T 9/27 Competitive Dynamics and Rivalry

Case Analysis

CP: Dog Fight Over Europe: Ryanair (A) (700-

115)

4,9

12 TH 9/29 Business Level Strategy Review

Lecture/Discussion

Case Analysis of Video

Video Discussion: Zara Fast Fashion

13 T 10/4 Corporate Level Strategy

Lecture/Discussion

Case Discussion

CS: 7

CP: Prahalad, C.K. and Hamel, G, “The core

competence of the corporation”

CP: Newell Company: Corporate Strategy (799-

139)

5,1

14 TH 10/6 Alliances/ Mergers and Acquisitions

Lecture/Discussion

CS: 9 and 10

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Cl D Date Topic/Activities Readings (CS=text; CP=case packet; ARES-library

electronic reserves )

Cases (CP) Case Gp

15 T 10/11 Mergers and Acquisitions

Case Analysis

CP: Gucci Group NV (701-037) 6,3

16 TH 10/13 Alliances

Case Analysis

CP: The Xtrican Co-promotion Team (UV3254) 7,2

17 T 10/18 International Strategy

Lecture/Discussion

Case Analysis

CS: 8 CP: P&G Japan: The SK-II Globalization

Project(303-003)

8,4

18 TH 10/20 Review Session

19 T 10/25 Midterm Examination

20 TH 10/27 GUEST SPEAKER

Chris Mendez, KUSC (USC Radio)

New Media Strategy

21 T 11/1 Strategic Leadership and Organization Corporate

Renewal

Lecture/Discussion

Case Discussion

CS:11 and 12 CP: IBM’s Decade of Transformation: Turnaround

to Growth (805-130)

9,5

22 TH 11/3 Discussion of Final Projects

23 T 11/8 Corporate Governance

Lecture/Discussion

Case Discussion

CS: 13 CP: Jonathon Elderslie and the Board Decision

(9B03M031):

24 TH 11/10 Corporate Governance and Performance

Case Discussion

CP: Graham Stewart—General Manager (A)

(9B02C028

25 T 11/15 Student Presentations I

Projects Due – ALL GROUPS

(Hard copy due beginning of class;

Soft copy due (e-mail) by 5:00 pm)

26 TH 11/17 Student Presentations II

27 T 11/22 Student Presentations III

TH 11/24 Thanksgiving Holiday NO CLASS

28 T 11/29 Creating New Value Curves

Lecture/Discussion

Video Case

CP: Kim W.C. and Mauborgne,, R. “Blue Ocean

Strategy”(R0410D)

Video Cases: Blue Ocean Strategy (no case

preparation)

29 TH 12/1 Course Wrap-up

Peer Evaluations (hard copy) due at beginning

of class

TH 12/8 FINAL EXAM 15096R (10:00 am class) 11 AM – 1:00 PM

TH 12/8 FINAL EXAM 15102R (2:00 pm class) 2:00-4:00 PM

T 12/13 FINAL EXAM 15092R (8:00 am class) 4:30-6:30 PM

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LIST OF APPENDICES

A. Course Readings and Cases

B. Guide for Analyzing Articles

C. Guide for Analyzing Cases

D. Case Assignment Questions

E. Case Brief Assignments

F. Group Strategic Analysis: Report and Presentation

G. Additional Guidelines For Written Reports

H. Additional Guidelines For Class Presentations

I. Peer Evaluation

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APPENDIX A: CASE READINGS and CASES

READINGS

Porter, M., “What is Strategy?”(96608)

Magretta, J., “Why business models matter” (R0205F)

Bianco, A., Wal-Mart’s Midlife Crisis, Business Week, Apr. 30, 2007 (ARES)

Bustillo, M., Wal-Mart Tries to Recapture Mr. Sam’s Winning Formula, WSJ, Feb. 22, 2011 (ARES)

Ghemawat , P. and Rivkin, J., ―Creating Competitive Advantage” (798-062)

Brandenberger ,A. and Nalebuff,B, ―The Right Game: Use Game Theory to Shape Strategy” (95402)

Prahalad, C.K. and Hamel, G, “The core competence of the corporation” (90311)

Kim W.C. and Mauborgne,, R. “Blue Ocean Strategy”(R0410D)

CASES

Wal-Mart Stores Inc. (9-794-024)

Coke and Pepsi in 2006 (9-706-447)

Patagonia (9 711-020)

Apple Inc. 2010 (9-710-467)

Dog Fight Over Europe: Ryanair (A) (9-700-115)

Newell Company: Corporate Strategy (9-799-139)

Gucci Group N.V. (A) (9-701-037)

The Xtrican Co-promotion Team (UV3254)

P&G Japan: The SK-II Globalization Project (9-303-003)

IBM’s Decade of Transformation: Turnaround to Growth (9-805-130)

Jonathon Elderslie and the Board Decision (9B03M031)

Graham Stewart—General Manager (A) (9B02C028)

APPENDIX B: GUIDE FOR ANALYZING ARTICLES

The following set of questions is provided to guide your analysis of the readings assigned this semester.

Please use this guide to structure your written article analyses.

1. What is the purpose or objective of this article? What is its basic argument/thesis? Its major findings/

conclusions?

2. What is the nature of evidence presented in support of the argument/ thesis? (Impressionistic,

theoretical, empirical, etc.) Are the conclusions well supported?

3. Are there important assumptions, assertions, or values that the author expects us to accept without

support? Are these explicit or implicit?

4. How does this article contribute to your overall understanding of the subject? How does it relate to

other articles you have read and to your own knowledge and experience? What problems or concerns

are you left with?

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APPENDIX C: GUIDE FOR ANALYZING CASES

Purpose

Case analysis helps students to develop the kinds of skills that are essential to success in business organizations:

identification and analysis of complex business problems, application of judgment in developing solutions,

interactive problem-solving, and persuasive presentation of conclusions.

The Nature of Business Cases

Business cases are detailed descriptions of real company situations in which management is confronted with

important issues or problems. Students are required to (1) identify problems or key issues that management needs to

address, (2) assemble relevant data, (3) perform appropriate analysis and evaluation, and (4) propose an action plan

and a set of recommendations that address the issues identified.

Cases contain a rich variety of data, including company background and performance, environmental forces, and

points of view of key decision makers. Not unlike real world situations, cases will not contain all the data you would

like. Your challenge is to do the best job you can with the information available.

How to Approach a Case

The following approach to case analysis has proven helpful.

a. Rapidly read the case to get a sense of layout and a general understanding of background and issues.

During this initial reading, try to form preliminary hypotheses. Initial impressions can be revised, but

this groundwork will provide structure and direction for more in-depth reading.

b. Carefully re-read the case,--

i. Take notes that organize information and separate the ―wheat from the chaff.‖

ii. Test and refine your hypotheses as you read ("the company loses money on small orders"),

modifying or rejecting them as new information surfaces ("Table 2 shows that shipping costs

per unit are higher for small orders, but only for long-distance shipments").

iii. Clarify what the key issues/questions/ problems really are. These are the issues your

recommendations will address. They may or may not have been obvious on first reading.

iv. Develop analysis questions to help illuminate the issues on which action needs to be taken.

What do you need to understand that is not apparent in the case?

c. Perform qualitative and quantitative analyses, as appropriate. If important data are not available in the

case, precise descriptions of what data are missing often trigger ideas for making creative use of the

information that is available, or for developing well-informed assumptions about necessary but missing

information. Be sure to distinguish between factual data from the case, opinions of actors in the case,

and assumptions you make. REMEMBER: Your objective is to get beyond the level of problem

symptoms to analyze underlying issues and causes.

d. Identify and evaluate reasonable alternative courses of action, based on appropriate criteria. You will

explicitly consider and reject various alternatives: Some may not be effective in addressing the issues

you identified, others may cause more problems than they solve or cost more than they are worth,

others may not be feasible or acceptable to management (solutions should be compatible with the

values and preferences of management and those who will implement them). In formulating

alternatives, avoid cop-outs such as: "Hire a new president who can solve the problem," ―Conduct

market research," or "Hire a management consultant to solve the problem.‖

e. Decide on a course of action to recommend. Your solutions must address the issues you have

identified and follow logically from your analysis. Remember: Goals are not recommendations for

action. Don’t say, ―Increase market share,‖ unless you can offer a plan to accomplish it.

f. Recommend a plan by which the desired action may be achieved or implemented within the constraints

encountered in the situation. This is a good final ―acid‖ test. If you solution is not ―do-able,‖ it is not a

good solution.

Preparation for In-Class Case Discussions

Prepare detailed notes that you will bring with you to class to help guide your interventions in class discussions.

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APPENDIX D: CASE ASSIGNMENT QUESTIONS

Wal-Mart

1. Identify Wal-Mart’s early strategy, and explain how and why it enabled Wal-Mart to be so successful in an industry

with intense rivalry.

2. What historically, have been Wal-Mart’s sources of competitive advantage in discount retailing? How has Wal-Mart

operated differently from its rivals?

3. How sustainable is Wal-Mart’s competitive advantage in discount retailing? Where is Wal-Mart’s advantage most

sustainable? What are the bases of sustainability? Why haven’t competitors been able to match Wal-Mart?

4. What are the biggest threats to Wal-Mart’s continued success? Are Supercenters the answer? Will Wal-Mart be

superseded by another retailing concept? Can its advantage be duplicated in markets outside the US?

5. What recommendations would you make?

Coke and Pepsi in 2006

1. Why, historically, has the soft drink industry been so profitable?

2. Compare the economics of the concentrate business to that of the bottling business: Why is the profitability so

different?

3. How has the competition between Coke and Pepsi affected the industry's profits?

4. Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-CSDs?

Patagonia

1. Evaluate Patagonia's strategy.

2. How important to Patagonia's strategy is its environmental position?

3. What is your assessment of the Product Lifecycle Initiative (reduce, repair, reuse, and recycle)?

4. How fast can Patagonia grow? How fast should it grow?

5. How would Patagonia's strategy differ if the company were publicly held?

Apple Inc. in 2010

1. What were Apple’s competitive advantages?

2. Analyze the dynamics of the PC industry. Are these dynamics favorable or problematic for Apple?

3. How sustainable is Apple’s competitive position in PCs?

4. How sustainable in Apple’s competitive position in MP3 players?

5. How would you assess Apple’s competitive position in smartphones?

6. What are the prospects for the iPad?

Dogfight Over Europe: Ryanair (A)

1. What is your assessment of Ryanair’s launch strategy?

2. How do you expect Aer Lingus and British Airways to respond? Why?

3. How costly would it be for Aer Lingus and British Airways to retaliate against Ryanair’s launch?

4. Can the Ryan brothers make money at the I£98 fare they propose?

Zara Fast Fashion (video case: for class discussion)

1. What are the key ―tensions‖ inherent in Zara’s value proposition? How does Zara resolve these?

2. Can you describe the linkages among Zara’s choices concerning how to compete, particularly choices connected to

its quick-response capability, and the ways in which they create competitive advantage?

3. How do the distinctive features of Zara’s business model affect its operating economics?

4. Why might Zara ―fail‖? How sustainable would you calibrate its competitive advantage as being relative to the kinds

of advantages typically pursued by other apparel retailers?

Newell Company: Corporate Strategy

1. Does Newell have a successful corporate-level strategy? Does the company add value to the businesses within its

portfolio?

2. What are Newell’s distinctive resources?

3. What challenges faced the company in the late 1990s?

4. In this context, does the acquisition of Calphalon make sense? Rubbermaid?

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Gucci Group N.V.

1. Map the competitive positions of the different players in the luxury goods business. Who are the best positioned

players? Why?

2. Where was Gucci positioned in 1990? 1994? 2000? What were the critical moves made by DeSole to reposition the

company?

3. Evaluate DeSole’s latest strategic move to buy Yves Saint Laurent (YSL) and Sergio Rossi. What actions do you

recommend for the future?

The Xtrican Co-promotion Team

1. What does partnering mean or suggest?

2. Why was this co-promote alliance created?

3. What perspectives or issues are important to each partner?

4. If you were a member of this team, what strategies would you consider for resolving the budget difference?

P&G Japan: The SK-II Globalization

1. As Paolo DeCesare, what factors do you need to consider before deciding what to recommend in your SK-II

presentation to the global leadership team (GLT)? What kind of analysis will ou need to do in preparing for that

meeting?

2. Does SK-II have the potential to become a global brand within Proctor & Gamble’s worldwide operations? Why or

why not?

3. Which of the three market options should Paolo DeCesare recommend to the GLT? What benefits do you expect to

gain? What risks do you see?

4. How should he implement your recommended option? What arethe implications for P&G’s new post-O2005

organization? What support and/or resistance do you expect? How will you manage it?

IBM’s Decade of Transformation: Turnaround to Growth

1. What factors led to IBM’s success during the 1960s and 1970s and its problems during the late 1980s and early

1990s?

2. What did Gerstner do when he assumed the role of CEO in April 1993? Evaluate Gerstner’s approach to crisis

management. How well did he perform as a turnaround manager? What challenges did he face as he attempted to

position the company for growth?

3. Why do large established companies, like IBM, find it so difficult to build successful and sustainable new

businesses?

4. Evaluate IBS’s approach to leading mature, high growth, and emerging business opportunities. What are the

organization design and leadership models required to manage each type of business? How should a company like

IBM (or AT&T, for example) manage the innovation process?

5. What challenges did Sam Palmisano face as he assumed control of IBM in March 2002? Can a company like IBM

(or AT&T) be organized for both innovation and efficient operation—can it be both ―big‖ and ―small‖? What advice

would you give Palmisano at the end of the case?

Jonathon Elderslie and the Board Decision

1. What attitudes toward corporate governance are revealed in the comments made to Jonathon Elderslie by his friend,

Jerome Haskins, as well as in Elderslie’s own experience as an executive reporting to a board?

2. Do you think these attitudes are widespread or confined to few directors?

3. To the extent that these attitudes exist, what needs to change to create more effective corporate governance?

4. What questions should Elderslie be asking before deciding to take on a directorship?

Graham Stewart

1. At the end of the case, Stewart to himself, "it all began to make some sense to me." In the position of Graham

Stewart, what does the word "it" mean?

2. If you were in Stewart's position, what would you do now? Why? How?

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APPENDIX E: CASE BRIEF ASSIGNMENTS

Case briefs are limited to two 8 ½ x 11‖ pages of text, double-spaced, 12-point font, 1‖ margins, single sided

printing. You may also include up to three appendices, but any appendices must be referenced in the 2-page

narrative portion of your report. All assignments must include a separate cover page with assignment title, course

title and number, section number, and each team member’s name with e-mail address. Pages should be numbered in

the upper or lower right corner (no page number on cover page). Papers should be fastened with a staple in the

upper left corner—no folders please.

Case briefs will include the following:

Key strategic issues (not a laundry list of issues!) facing the manager(s), including statement of why these

issues are important. Refer to class notes and discussion of strategic issues. The issues you identify are the

issues your recommendations must address.

Summary of your analyses (internal and external). This section will selectively apply course concepts and

models to illuminate the situation, and may refer to appendices where you illustrate and elaborate causal

linkages to help the reader understand the underlying dynamics of the organization’s circumstances. Apply

models sparingly in ways that truly shed light on the situation.

Your recommendations to the manager(s), including why the alternative you recommend is superior to other

reasonable alternatives. Your recommendations must address the strategic issues you identified and follow

logically from your analysis! Be sure to consider suggestions for implementation.

Do not rehash facts from the case.

APPENDIX F: GROUP STRATEGY ANALYSIS: REPORT AND PRESENTATION

The group strategy analysis project is a team exercise for which each team will consist of five members. Expect

under exceptional circumstances, teams will be the same as for the case briefs, described above. Any exception must

be approved by me.

For this project, students are to prepare a complete strategic analysis of the current and future prospects for a real

company. I will provide a list of companies available for this analysis on Blackboard. Students will select first,

second, and third choices. I will honor student preferences to the extent possible.

Company Preferences: Your company preferences (first, second, and third choices from the list) must be

turned into me (hard copy) on the date indicated on the course schedule. However, you would be wise to turn it

in sooner, as I will try to manage sign-ups on a first-come first-served basis. I will announce all group/company

assignments for the project as soon as I am able to review and manage preference information. I would like to

meet with all groups as early as possible to discuss your group project. Please make an appointment!

Final Report:

WRITTEN REPORT: Your written report will consist of two parts, explained below. The entire

report (both parts) should be fastened with a staple in the upper left corner—no folders please.

You will provide a separate cover page for the entire report (cover page not included in page count),

with assignment title, course title and number, section number, and each team member’s name with e-

mail address. The two parts are:

Executive Summary (maximum two double-spaced, typewritten pages.) Content and format

of executive summary format will be similar to case brief format, except that instead of

referring to appendices, you will refer to slides in you Power Point presentation. Use 8 ½ x

11‖ paper, double-spaced, 12-point font, 1‖ margins, single sided printing, page numbering in

upper or lower right corner.

Power Point Consulting Report, (maximum 20 PowerPoint slides). Power Point Notes are

required—notes on same page as slides. (Notes will show the remarks you will make during

your class presentation) Use single-sided printing, with Notes on same page as slide (not

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separate). Use 8 ½ x 11‖ paper, page numbering in upper or lower right corner. Use white

background for all slides, and make sure they are readable.

Important: You must provide sources for your data. References must be included on

individual slides AND as a separate references page (not included in page total).

Power Point Consulting Report will include:

―The Story‖: Statement of key strategic issues (refer to class notes and discussion of

―strategic issues.‖ Include brief contextual overview to bring reader/listener ―up to

speed.‖

Internal and external analyses

o External Analysis: key industry characteristics -- KSFs; trends; industry

economics; five forces; major competitors; who is winning and who is losing?,

etc. Use models selectively to illuminate the situation and illustrate your points.

Do NOT provide a ―model dump.‖

o Internal Analysis: Brief background info; current position (including current

operating and share price data); internal capabilities and areas of concern. Use

models selectively to illuminate the situation and illustrate your points. Do NOT

provide a ―model dump.‖

Feasible alternatives and your recommendations to the manager(s)

o Alternatives and recommendations must address the strategic issues that you

have identified and follow logically from your analyses.

o Alternatives and recommendations must consider implementation challenges.

o You must explain why the alternative you recommend is superior to other

reasonable alternatives.

o Recommendation must provide suggestions for implementation.

Submission Requirements: You will turn in the written report (executive summary and

PowerPoint presentation) at the beginning of class on the first day of presentations,

regardless of which day your team is scheduled to present. You will also send both

documents to me via email by 5:00 p.m. on that day.

PRESENTATION: All groups will present their solutions over three days of class. The

presentation allows the team to report its analysis and recommendations to the class. The exact

presentation schedule will be announced later. The presentation will be graded on a group basis.

Clarity and creativity are strongly encouraged in the presentation.

APPENDIX G: ADDITIONAL GUIDELINES FOR WRITTEN REPORTS

An effective management report is a document which clearly and concisely communicates the information a

manager needs to carry out his or her primary function -- decision making. Whether narrative, Power Point, or other

visual presentation, your report should be clear and tightly written. Do not waste time and space summarizing

information with which your audience is already familiar.

All written reports must be carefully edited. Appendices, including tables, charts, diagrams, financial analyses, etc.

may be used to support your analysis. Be sure that any appendices are referenced in the body of your report. In the

case of group written reports, the ―seams‖ between parts must be invisible, and there must be no redundancy (much

less internal contradiction!).

APPENDIX H: ADDITIONAL GUIDELINES FOR CLASS PRESENTATIONS

An effective group presentation requires all the work you do for a written report, PLUS preparation of appropriate

visuals, application of business communication skills, and substantial coordination among team members. You must

prepare and rehearse in advance to avoid fragmentation or redundancy and create a seamless, effective presentation.

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APPENDIX I: PEER EVALUATION

Please allocate 100 points across all the members of your team apart from yourself to reflect your assessment of

their individual contributions to the team effort. I will treat your assessments as confidential.

Course number:_________________ Section number:__________________

Your name: ___________________

Group #: _____________________

Name of Project:______________________________________________________

Team-member name: Contribution %: Comments

1. _____________________ _____ _______________________________

2. _____________________ _____ _______________________________

3. _____________________ _____ _______________________________

4. _____________________ _____ _______________________________

5. _____________________ _____ _______________________________

6. _____________________ _____ _______________________________

Total: 100%

General Comments: __________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________

___________________________________________________________________________________________