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  • 1. Brandeis University International Business School BUS 260a Competition and Strategy Course Syllabus Version 1.0 NOTE: This is the “final” syllabus, i.e. what we will use in class this year, but always subject to change during the term. Changes will be discussed in class and announced by email as needed. You may go ahead and order the materials; those will not change. Spring 2007 Monday and Wednesday, 9:30 - 11:00 Lee Auditorium, Lemberg Center Ben Gomes-Casseres Professor of International Business Contact information Office: Lemberg Center 258 Email: bgc@brandeis.edu (best way to contact me) Tel: 781-736-2264 Office hours: Before March 19: Mondays 2-3.30 or by appointment From March 19 onward: Mondays 1-2.30 or by appointment
  • 2. BUS 260a Competition and Strategy v1.0 Spring 2007 2 Course Outline SM stands for Garth Saloner, Andrea Shepard, and Joel Podolny, Strategic Management (Wiley, 2001), available in the bookstore. Other readings are in case packet, available for purchase online from HBS Publishing (instructions in first class). Articles in italics are available on the Business Source Premier database offered by Brandeis Library. See the end of this syllabus and the WebCT site for permanent links to these articles. Class Topic Readings (see assignments in syllabus) Introduction 1 Overview and administration • SM, Chapter 1. 2 Elements of strategy • SM, Chapter 2 • “Prelude Corp.” • “What is Strategy?” Porter I. Industry and Competitor Analysis 3 Industry structure and • SM, Chapter 6, sec 6.3 and pp. 136-144. competition • “Cola Wars: Coke vs. Pepsi in the 21st Century” • “How Competitive Forces Shape Strategy,” Porter 4 Market competition and strategy • SM, Chapter 7, sec. 7.2-7.3. • “Crown Cork & Seal in 1989” 5 Strategy and network • SM, Chapter 12, sec. 12.2, 12.4. externalities • “Microsoft, 1995” 6 Strategy and country • “Microsoft in the PRC, 1993” environments 7 Synthesis I • Project due (optional hand-in) II. Strategy and Competitive Advantage 8 Competitive advantage • SM, Chapter 3, sec. 3.2-3.3 • “Adolph Coors” • “The Core Competence of the Corporation,” Prahalad, Hamel (skim)
  • 3. BUS 260a Competition and Strategy v1.0 Spring 2007 3 9 Cost and differentiation • SM, Chapter 3, section 3.7. • “Benihana of Tokyo” 10 Cost, scale, and scope • SM, Chapter 9, sec. 9.2. • “Wal-Mart Stores in 2003” 11 International advantages • SM, Chapter 13, sec. 13.3-13.5. • “Globalization of CEMEX” • “The Forgotten Strategy,” Ghemawat Midterm Evaluation 12 Synthesis II and Review Pick up exam case outside Lemberg 258, 12:00-4:00pm (day before exam) 13 Midterm exam (in class time) III. Multi-country Strategy 14 Country advantage • “Competitive Advantage of Nations,” Porter • “Hoechst and German Chemicals” 15 Cross-border acquisitions • “Hoechst in the USA (A)” IV. Multi-business Strategy 16 Speaker • Lee Spirer, SVP for Strategy/Business Development, Dunn & Bradstreet • Paper outline due 17 Corporate advantage • “Newell: Corporate Strategy” • SM, Chapter 14 • “Creating Corporate Advantage,” Collis and Montgomery 18 Strategy and organization • SM, Chapter 4, sec 4.1-4.2 and 4.4-4.6 • “Procter & Gamble: Organization 2005” 19 Corporate leadership and change • “GE’s Two-Decade Transformation: Jack Welch” • SM, Chapters 11 and 15
  • 4. BUS 260a Competition and Strategy v1.0 Spring 2007 4 V. Technology Strategy 20 First-mover advantages • “British Satellite vs. Sky” • SM, Chapter 8, sec. 8.2 and Ch. 9. 21 Value-chain competition • SM, Chapter 10 • “Dell Online” • “From Value Chain to Value Constellation: Designing Interactive Strategy, Normann and Ramirez 22 Value-chain intermediation • “FreeMarkets Online” 23 Disruptive technology and • “BMG Entertainment” information economics • “Disruptive Technologies: Catching the Wave,” Bower and Christensen • “Versioning: The Smart Way to Sell Information,” Shapiro and Varian VI. Applications and Conclusions 24 Open • Optional student presentations 25 Open • Optional student presentations 26 Closing 5/7 Final papers due by email by 12 noon for GRADUATING STUDENTS 5/14 Final papers due by email by 12noon for ALL OTHERS
  • 5. BUS 260a Competition and Strategy v1.0 Spring 2007 5 Course Description Course objectives The performance of any firm -- international or domestic -- depends critically on the design and implementation of its strategy. This strategy must take account of the industry environment facing the firm, the position and likely strategies of the firm's rivals, and the firm's own capabilities and goals. This is an intensive survey of the most important techniques and frameworks in the field of business strategy. We will explore ideas from the theoretical and normative research on the topic, and apply them to decisions using case studies. Course content This course deals with issues of general management, not with technical economics or finance. Among the main topics covered are the following: • Analyzing industry structure and dynamics • Analyzing the positions and reactions of competitors • Creating and sustaining competitive advantage • Corporate strategy and business combinations • Technology strategy and e-business • Processes of strategic management Course requirements The workload will be heavy. Required readings will be HBS cases, HBR articles, and chapters from Saloner, Shepard, and Podolny, Strategic Management, which available in the bookstore. This is a book about both strategy and organization – for this course, we will focus on the chapters about strategy. (The same book is also used in Organizations and Management, BUS 225a, which is not taught this year.) Students will need to read and analyze at least one case for every class and are expected to participate in class discussions. The case packet will be available for purchase online; as detailed at the end of this syllabus and discussed in the first class. Articles are available for free on the Business Source Premier (BSP) database of Brandeis Library; see end of this syllabus for details and URLs of each article. (You will need your UNET account info to sign on to BSP.) Relationship to other courses There are no formal prerequisites, but it is assumed that students have a background in micro-economics and business studies, and are able to analyze financial statements. The course is required as a core course for MBA students and will be useful to MAief students concentrating in Business. Other courses that are fitting complements are Alliance Strategy (BUS 262f), Managing International Business (BUS 270a), and Consulting Approaches (BUS 264a). The full syllabus and other course information will be given in the first class. For further information, contact the instructor at bgc@brandeis.edu. Learning by the Case Method Because this course is based on the case method of learning, class participation by all students is critical. This method of learning is based on three premises. First, we can all learn a great deal from each other's points of view and experience. Second, we often learn more by questioning each other and debating issues than by listening passively or by reading alone. Third, there is no “one best way” to manage complex business problems; rather, we must search for alternatives and weigh them critically.
  • 6. BUS 260a Competition and Strategy v1.0 Spring 2007 6 In order for this method to work, we must all be prepared to go beyond case facts in the discussion. In other words, we must assume that everyone has prepared the case and readings thoroughly--there is simply no time to explain or reiterate case facts. Our discussions ought to be analytical, not descriptive. This does not mean that we will ignore the facts; to the contrary, students should strive to back up their arguments with the facts of the case. In sum, I will expect three P’s from students in every class: • Presence--attendance is required. • Preparation--readings and assignments are to be done on time. • Participation--share your views and questions in class. If you cannot make it to class or are unprepared for the discussion on any day, please let me know before that particular class. Grading Students will be graded on a combination of the following: • Contributions to class discussions (40%). I will keep a record of class performance for each student and determine a grade based on the frequency and quality of in-class comments. Students will receive a midterm evaluation on class participation. Short assignments will be given during the course, which would count toward class participation, as do any presentations made during the course. • A written midterm exam (25%). This will consist of analysis of a case. You will pick up the case at my office (Lemberg 258) on the day before the midterm, between 12 noon and 4pm. (If for any reason you can't do this, be sure to talk to me ahead of time!) The exam itself will take place during normal class hours. You will then be asked one or more questions about the issues in the case, which should be answered in writing during the 75-minute exam period. This will be an open-book exam. • A final term paper (35%). Final papers may be written by individuals or by teams of 2- 3 students. The final paper is an opportunity for you to delve more deeply into analysis of a real strategy, as discussed below. Depending on your progress on the paper, you may get an opportunity to present the work to the class in the final weeks of the course. Final Paper The final paper is an opportunity to examine a strategic issue in depth. You may choose to study any firm or organization, but your paper must contain the following elements: 1. Statement of the issue or question to be addressed. You may choose any issue from those discussed in the course, but must state up front in the paper what you intend to address. In this section, give a short overview of where your issue fits in the field of competition and strategy and what concepts you will draw on to explore your issue. 2. Statement of the evidence (or case) you will use to address your issue, that is, the firm or organization you choose to examine, and why this is a good context for your analysis.
  • 7. BUS 260a Competition and Strategy v1.0 Spring 2007 7 In selecting the case(s) you will examine, be sure you can get the information you need before you commit to the topic. Note: To help you in selecting an appropriate topic and case, I will review and approve your paper proposal in advance. Please submit a brief outline of what you will study in your paper on or about Monday March 19th. This outline does not need to be detailed, but you should try to define your issue and you should do some preliminary research to check if data are available to address the issue. If you are not sure about your focus, say so in the proposal, so that I can try to guide you. We can meet to discuss the paper topic, but I prefer that you first try to develop a rough proposal. 3. Presentation of the most important facts about the case you are examining. For this, you can use data from the business press, from annual reports, and from other sources. A useful place to start is with the online resources available through the Brandeis library; for a guide, go to: http://www.brandeis.edu/global/current_research_resources.php. At any rate, in your actual paper, you should keep this section to a minimum – describe only what is needed for the reader to understand the context and to begin addressing the issues you are exploring. Do not write a full-fledged descriptive “case.” 4. Analysis of your evidence. This is the body and most important part of the paper; use the case(s) and evidence you gathered to answer the questions you raised at the start. It is best to choose a clear focus and framework and use it throughout the presentation and analysis of the data. 5. Conclusions. End with a short section drawing the implications of your study for strategic thinking and decision making. What are the main lessons you learned? Are they applicable to other situations? Note that this is not a section on recommendations to the company you study – it is a section about your recommendations to analysts of organizations. Paper length depends on the size of your team, if any. Papers written by individuals should be 10-15 double-spaced pages, not including exhibits; papers written by teams of two students can be 15-25 pages, and papers by three students can be 25-35 pages. Please be sure to cite your sources and provide references. All direct quotes, specific data, paraphrased text, all tables and graphics, and important arguments should be properly sourced with foot- or end-notes; a bibliography can be used as reference for general discussions. Papers should be submitted to me by email (in PDF or MSFT Word format) by noon on Monday May 7th for graduating students and May 14th for all others. Unexcused late submissions will be penalized. If you have a good reason for missing this deadlines (e.g. illness), you will need to get an “Incomplete” from me before this date. Appointments I will be available in my office (Lemberg 258) on Mondays, 2:00-3:30 pm before March 19th, and Monday’s 1-2.30 from then on. You do not need an appointment if you come during these open office hours. If you cannot come at these times and want to see me by appointment at another time, please contact me by email at bgc@brandeis.edu.
  • 8. BUS 260a Competition and Strategy v1.0 Spring 2007 8 Email is generally the quickest way to reach me; I usually respond promptly, including over the weekends or when I am off campus. In addition, all enrolled students will be automatically signed up to the mailing list for the course and will be expected to check their email regularly – I will often send out notices on this list. You are expected to be honest in all of your academic work. This includes proper citation of the work of others in your papers and presentations. Potential sanctions include failure in the course and suspension from the university. If you have any questions about my expectations, please ask. If you are a student with a documented disability on record at Brandeis University and you wish to have a reasonable accommodation made for you in this class, please see me immediately. Please keep in mind that reasonable accommodations are not provided retroactively.
  • 9. BUS 260a Competition and Strategy v1.0 Spring 2007 9 Before we start . . . Required text: Garth Saloner, Andrea Shepard, and Joel Podolny, Strategic Management (Wiley, 2001), available in the bookstore. Cited below as SM. Required cases: All HBS cases are in the case packet, available for purchase online from HBS Publishing (instructions in first class). Required and recommended readings: All other articles are available from Business Source Premier (BSP), or on my website. At the end of this syllabus there is a list of direct links to the articles, but you will also need your UNET account information to get into BSP. Recommended, if you have little background in business: Ronald J. Ebert and Ricky W. Griffin, Business Essentials, any edition (Englewood Cliffs, NJ: Prentice Hall, 1999 or later). This text is used in the undergraduate course BUS 10a (“Functions of the Capitalist Enterprise”) and is on reserve in Goldfarb Library. Preparing for class: Please follow the assignments below carefully. The readings are of two types – there is usually a conceptual reading from the text or an article, and an HBS case study. The conceptual readings are there to give you definitions, tools, and approaches that will help you analyze the cases; they will also help you develop a general framework over the course of the semester. Usually, one conceptual reading applies to many cases, not just the one with which it is paired in an assignment. So feel free to review them later in the course and apply them to new cases. Remember: we do not study theory for its own sake, but to apply it to the real world, i.e. to the cases and in your paper. Even though the conceptual readings are important, in class we will usually focus on analyzing the cases, not on reviewing concepts in the abstract. In the process of discussing the cases, the use of the concepts will become clearer. But this means that you should prepare the case carefully and fully – using the assignment questions as loose guidelines, you should read and analyze the case, work the numbers in the exhibits, formulate your conclusions, and prepare to share your work in class through discussion and debate. If you are new to the case method, or have questions about how it is used and how to prepare for it, review this article that was distributed during Orientation Week: • Arthur Thompson, Jr. and A. J. Strickland III, “Guide to Case Analysis,” Strategic Management: Concepts and Cases, 9th Edition (Chicago, IL: Irwin, 1996), pp. 322- 332. If you don’t have a copy, please ask Student Services for a copy from their file.
  • 10. BUS 260a Competition and Strategy v1.0 Spring 2007 10 Ben’s Tips for Preparing, Participating, and Learning in Case Classes 1. Read the assignment questions and think about how this case and the questions fit in the course. What have we done so far? What appears to be the topic for this class? 2. Skim the case; this means: • Read opening paragraphs • Read closing paragraphs • Page through it and read the section titles • Look at every exhibit to see what kind of data are offered • Read quickly a few parts of the case to glean the main themes • Go back to the assignment questions: What will you need to focus on in the case? 3. If there is an additional reading that is to be used in analyzing the case, read that next, or decide what other tools you need to attack the case. Sometimes additional reading is optional; in that case read it later. Use your judgment in allocating reading time. 4. Read the case and mark up useful information. Don’t highlight all of it; just scribble and highlight as needed to bring out the most important facts and issues. Keep an eye out for case facts that may be useful in answering the assigned questions or the main issues. 5. Analyze the exhibits; this means: • Identify what important messages they contain that speak to the issues • Do some calculations to get beyond the numbers that are presented (e.g. ratios) • Spend extra time on exhibits that seem to be core to the issues, skim over others 6. Prepare your analysis, this means: • Write down your answers to the assignment questions, in bullet or short form • Make reference to case facts to support your answers • Write down any additional issues that may be interesting to bring up in class 7. Discuss your analysis with fellow students; this means: • Get together in a study group or over coffee or dinner • Hear the perspectives of others; share insights; get tips for your analysis • “Rehearse” with them how and what you would say in class 8. You are now ready for class! • If you are lucky, you will be called to start class; open with your best shot • Otherwise, raise your hand and jump into the discussion with additional thoughts • Early in a class, you can usually use your prepared analysis; later, topics may evolve 9. When you get the floor: • Try to connect (build, debate) to what was said before, or to the issues “on the floor” • Try to explain your idea and argument, using facts to back it up • Don’t be concerned about your speaking skills or accent: We will listen! 10. After class, jot down what you learned, including • New insights about the topic • New ideas about how to approach the subject next time • Tips to yourself about case analysis and preparation • Tips to yourself for future projects or papers
  • 11. BUS 260a Competition and Strategy v1.0 Spring 2007 11 Study Assignments Introduction Wednesday, 1/17 Overview and Administration Required readings: • SM, Chapter 1. Read this after the class, if you were not able to read it before class. Focus on section 1.2, but skim the rest to help you understand the scope of the field. Mon 1/22 Elements of Strategy Required readings: • SM, Chapter 2. • “Prelude Corp.,” in case HBS packet. Recommended reading: • “What is Strategy?” Porter in HBR (in BSP). Study questions: 1. What was Prelude’s strategy up to 1972? Evaluate how the various pieces of this strategy fit together. 2. What key forces in the environment shaped the success of firms in Prelude’s industry? 3. Evaluate how well Prelude’s strategy responds to these forces. I. Industry and Competitor Analysis Wed 1/24 Industry structure and competition Required readings: • SM, Chapter 6, especially 6.3 and pp. 136-144. • “Cola Wars Continued: Coke vs. Pepsi in the 1990s,” in HBS case packet. • “How Competitive Forces Shape Strategy,” Porter in HBR Study questions:
  • 12. BUS 260a Competition and Strategy v1.0 Spring 2007 12 1. Be sure you understand Porter’s “Five Forces” model discussed in section 6.3; many of the concepts in pp. 136-144 elaborate on this model. (The HBR article is Porter’s original statement of the model.) Apply the model to the case. 2. Why is the soft drink industry so profitable? Consider this question for two separate segments of the industry: (1) concentrate producers and (2) bottlers. 3. Why do concentrate producers want to integrate vertically into bottling? 4. How has the rivalry between Coke and Pepsi affected the industry’s profitability? Mon 1/29 Market competition and strategy Required readings: • SM, Chapter 7, especially sections 7.2 and 7.3. • “Crown Cork & Seal in 1989,” in HBS case packet. Study questions: 1. What were the most important competitive challenges facing the companies competing in Crown’s industry in the decades up to 1989? 2. Why did Crown perform so well during Connelly’s tenure (1957-1989)? 3. What should Avery do now to respond to emerging threats and opportunities in the industry, and why? Wed 1/31 Strategy and network externalities Required readings: • SM, Chapter 12, section 12.2 and 12.4. You may skim the rest of the chapter for now; we will return to these topics later in the course. • “Microsoft, 1995,”in HBS case packet. Skip the (large) section called “New Growth Opportunities,” as we will not discuss that section. Study questions: 1. What accounts for Microsoft’s historical success up to 1995? 2. Compare and identify the differences between the “network” industry in which Microsoft operates and more “traditional” industries, such as that of Crown Cork & Seal. What are the implications for strategy? Mon 2/5 Strategy and country environments
  • 13. BUS 260a Competition and Strategy v1.0 Spring 2007 13 Required reading: • “Microsoft in the People’s Republic of China, 1993,” in HBS case packet. Study questions: 1. What is the emerging structure of the software industry in the PRC? 2. Is this structure different from the same industry in the United Stages? 3. What are the implications for Microsoft’s entry strategy? 4. How much localization should Microsoft do in the PRC? Wed 2/7 Synthesis I: Performance and Industry Analysis Required readings: • Review all your notes and cases used so far. Required assignment: This is a fairly long assignment, and you are encouraged to do it in teams of 2-3 students. It is OK to divide up the work so that each team member gets to do one or two parts, but be sure to discuss your results in your team so that you have a common understanding. I will ask each team (or individual, if you don’t use a team) to share their results in class. You are welcome to hand in your analysis before class, and will receive credit for the handed-in work if you do that, though it is not absolutely required. Note that we will continue this assignment with additional cases and concepts in a few weeks, after we complete Part II of the course just before the midterm. You will need the results of today’s assignment for the later assignment, so please keep them on file. 1. Firm performance: Using two or three indicators, compare and rank the performance of the following firms, over the period described in each case: • Prelude • Coca-Cola • Pepsi • Crown Cork & Seal • Microsoft in USA (up to 1995) 2. Industry attractiveness: Compare and rank the attractiveness of the industries of the firms above, in the period of the case. We have already done the detailed analysis in class. Focus now on comparing across the cases and identify reasons why you would rank one industry as being more or less attractive than another.
  • 14. BUS 260a Competition and Strategy v1.0 Spring 2007 14 3. Fit of strategy to industry: How well did each company’s strategy fit the environment they faced? II. Strategy and Competitive Advantage Mon 2/12 Competitive advantage Required reading: • SM, Chapter 3, especially sections 3.2-3.3. • “Adolph Coors in the Brewing Industry,” in HBS case packet. Recommended reading: • “The Core Competence of the Corporation,” Prahalad and Hamel in HBR. Study questions: 1. Coors was successful throughout the mid-1970s. What was its strategy historically? 2. How did Coors’s operating performance change relative to its competitors between 1977 and 1985? Why? Specifically, compare the performance of Coors and Anheuser-Busch, using the numbers in exhibits. Identify key trends and explain them. 3. What, if anything, might Coors have done differently to avoid its decline? Wed 2/14 Cost and Differentiation Required readings: • SM, Chapter 3, section 3.7. • “Benihana of Tokyo,” in HBS case packet. Recommended: • If you have not taken Operations Management, you may find it useful to review Business Essentials, pp. 262-283. This text shows how to lay out and analyze the process flow for a production process. In this case, we will apply this idea to the flow of services in Benihana (see question 3 below). The book is on reserve at Goldfarb Library for the undergraduate course BUS 10a. Study questions:
  • 15. BUS 260a Competition and Strategy v1.0 Spring 2007 15 1. Identify the key features of the Benihana business concept. What attracts customers to these restaurants? 2. What are the differences between Benihana’s operations and those of a typical restaurant? Try to quantify the differences that you identify, using Ex. 1 and the numbers in the text. 3. Examine the Benihana production system in detail. (For this, it will help if you draw a process flow diagram that identifies how customers pass through the system, where key operations are done, how food is handled, and so on.) What design choices in this system generate major operating efficiencies or profits? Spring Break I Enjoy yourself, but prepare the important case that follows! Mon 2/26 Cost, Scale, and Scope Required readings: • SM, Chapter 9, especially section 9.2. • “Wal-Mart Stores, Inc.,” in HBS case packet. Study questions: 1. What are Wal-Mart’s sources of competitive advantage in discount retailing? How did Wal-Mart create these advantages? Compare the performance and cost structure of Wal- Mart to that of an average retailer and explain the differences that you see. 2. How effective is Wal-Mart’s diversification into the food industry likely to be? 3. Why are many communities so resistant to allow Wal-Mart to establish locally? Is Wal- Mart good or bad for the local community? Wed 2/28 International and Global Strategy Required readings: • SM, Chapter 13, especially sections 13.3-13.5. • “The Globalization of CEMEX,” in HBS case packet. Recommended reading: • “The Forgotten Strategy,” Ghemawat in HBR Study questions:
  • 16. BUS 260a Competition and Strategy v1.0 Spring 2007 16 1. How has CEMEX managed to outperform its international rivals, first in Mexico and later in other countries? 2. Why did CEMEX enter foreign markets in the sequence that it did? How do the markets it has entered recently compare with the markets that it entered early on? 3. What benefits have CEMEX and its international rivals derived from globalization? More broadly, how can cross-border activities add value in this industry? Mon 3/5 Synthesis II and Review: Competitive Advantage Required readings: • Review your notes to date. Required assignment: For this assignment too you are encouraged to work in teams of 2-3 students. As before, you are welcome to hand in your analysis before class, and will receive credit for the handed-in work if you do that, though it is not absolutely required. The following assignment is a continuation of the assignment you did in Synthesis I. This time, we will focus on a different set of companies and address different issues. For Prelude, Coca- Cola, Crown Cork Seal, Microsoft (USA), Coors, and Walmart, analyze the following questions, again focusing only on the period covered in each case: 1. Competitive advantage: Identify the main sources of competitive advantage for each. 2. Explanations of performance: What accounts for firm performance in each case – industry conditions or strategy? What weight do you give to each set of factors? Midterm Evaluation Tues 3/6 Not a class, but: Pick up exam case! Pick up the exam case in Lemberg 258, between 10:00 am and 4:00 pm. If for any reason you cannot come during this time, talk to me beforehand. You will need this case in order to do take the exam the following day. The exam itself is open-book; bring the case itself to the exam. Mon 3/7 Midterm exam (in normal class time and place) You will be asked to answer 2-3 questions about the situation in the case; please bring the case with you, but do not hand in the case. You will get exam booklets to use and that is the only material you should hand in.
  • 17. BUS 260a Competition and Strategy v1.0 Spring 2007 17 III. Multi-country Strategy Mon 3/12 Country Advantage Required readings: • “The Competitive Advantage of Nations,” Porter in HBR [Note: This time the HBR reading is required – it is an important framework often confused with 5-Forces.] • “Hoechst and the German Chemical Industry,” in HBS case packet. Study questions: 1. How strong was Germany’s competitive advantage in chemicals? What are the indicators you would use to measure this advantage? 2. How did German chemical firms benefit from their home base? 3. How did the nature of competition among German chemical firms change over time, and what effects did this have on their competitiveness? 4. Assess Porter’s arguments in the light of your analysis of this case. Wed 3/14 Cross-border acquisitions Required readings: • “Hoechst in the United States (A),” in HBS case packet. Study questions: 1. Why does Hoechst want to expand in the United States? Why does American Hoechst seem to prefer an acquisition over other ways to grow? 2. Should Hoechst acquire Celanese? Why or why not? (Hint: Think of this from two points of view – American Hoechst’s and Hoechst AG in Germany.) 3. Should Celanese accept a friendly acquisition? Why or under what conditions? Note: Paper outline due in next class! Mon 3/19 Visiting Speaker: Lee Spirer, SVP Strategy/Business Development, Dunn & Bradstreet Paper outline due: Please hand in a 1-2 page outline of your proposed final paper, stating the issue you will address and the evidence or cases you will use. See project description above.
  • 18. BUS 260a Competition and Strategy v1.0 Spring 2007 18 IV. Multi-business Strategy Wed 3/21 Corporate Advantage Required Readings: • “Newell: Corporate Strategy,” in HBS case packet. • SM, Chapter 14 Recommended Reading: • “Creating Corporate Advantage,” Collis and Montgomery in HBR Study Assignment: 1. What has been Newell’s corporate strategy? 2. How did its acquisitions add value to the corporation? 3. How did Newell add value to the businesses it acquired? 4. What do you conclude about the value of highly-diversified conglomerates, such as those that were popular in the US in the 1960s (ITT, Textron) and that exist today in many developing countries? Mon 3/26 Strategy and Organization Required Readings: • “Procter and Gamble: Organization 2005 (A),” in HBS case packet. • SM, Chapter 4, sections 4.1-4.2 and 4.4-4.6. Study Assignment: 1. What were the main advantages and disadvantages of each major organization structure for P&G in its history? 2. Does the A-R-C model in Chapter 4 apply to P&G? How? 3. What should P&G do now? Wed 3/28 Corporate Leadership and Change Required Readings:
  • 19. BUS 260a Competition and Strategy v1.0 Spring 2007 19 • “GE’s Two-Decade Transformation: Jack Welch” • SM, Chapters 11 and 15 Study Assignment: 1. What were the challenges that Jack Welch faced in 1981? 2. Why did he do what he did in the 1980s and early 1990s? 3. How did he go about implementing his strategies? 4. What kind of a leader was Jack Welch? 5. What do you conclude about leadership and strategy in large corporations? Spring Break II Enjoy yourself, but work on your final paper too! V. Technology Strategy Wed 4/11 First-Mover Advantages Required readings: • SM, Chapter 8, especially section 8.2. • SM, Chapter 9, section 9 • SM, Chapter 12, sections 12.3 and 12.5-12.7. • “British Satellite Broadcasting vs. Sky Television,” in HBS case packet. Study questions: 1. Could BSB have predicted Sky Television’s entry? Why did it fail to do so? 2. How will the game end if both companies continue to act as they have been acting? 3. What should BSB do now? What should Sky do? 4. What are the lessons for strategic decision making? Mon 4/16 Value-chain competition Required reading: • SM, Chapter 10. • “Dell Online,” in HBS case packet.
  • 20. BUS 260a Competition and Strategy v1.0 Spring 2007 20 Recommended readings: • “From Value Chain to Value Constellation: Designing Interactive Strategy,” Normann and Ramirez in HBR Study questions: 1. Sketch the value chain in Dell’s business and evaluate how Dell’s approach to the value chain differs from the traditional approach of its rivals (e.g. Compaq). 2. What advantages does Dell derive from the way it has implemented its online business? 3. What are the threats to Dell Online's continued success? Wed 4/18 Value-chain intermediation Required reading: • “FreeMarkets Online,” in HBS case packet. Study questions: 1. How does FreeMarkets Online create value for its customers? 2. Assess the company's business model. What are its strengths and weaknesses? 3. What are the advantages and disadvantages of a stand-alone B2B exchange, as FreeMarkets is creating, compared to an exchange linked to suppliers or buyers? Mon 4/23 Disruptive technologies and information economics Required reading: • “BMG Entertainment,” in HBS case packet. Recommended readings: • “Disruptive Technologies: Catching the Wave,” Bower and Christensen in HBR • “Versioning: The Smart Way to Sell Information,” Shapiro and Varian in HBR Study questions: 1. What have been the traditional sources of competitive advantage for BMG? 2. How is the Internet changing the economics of the music business? Sketch the value chain in the music industry and identify where new technologies have an impact.
  • 21. BUS 260a Competition and Strategy v1.0 Spring 2007 21 VI. Applications and Conclusions Wed 4/25 Open: Students presentations optional Mon 4/30 Open: Students presentations optional Wed 5/2 Close Mon 5/7 Due date for final paper for graduating students (BA or MA/MBA) Mon 5/14 Due date for final paper for all others Papers must be submitted to me by email (in PDF or MSFT Word format) by noon. Unexcused Late submissions will be penalized. If you have a good reason for missing this deadline (e.g. illness), you will need to get an “Incomplete” from me before this date.
  • 22. BUS 260a Competition and Strategy v1.0 Spring 2007 22 Selected Bibliography Strategy and General Management Amram, Martha and Nalin Kulatilaka. Real Options: Managing Strategic Investment in an Uncertain World. HBS Press, 1999. Andrews, K. A. The Concept of Corporate Strategy. Irwin, 1987. Barnard, Chester I. The Functions of the Executive, 30th edition. Cambridge, MA: Harvard University Press, 1968. Barney, Jay B.. Gaining and Sustaining Competitive Advantage. Addison Wesley, 1996. Brandenburger, Adam and Barry J. Nalebuff, "The Right Game: Use Game Theory to Shape Strategy," Harvard Business Review, July-August, 1995, pp. 57-71. Brandenburger, Adam and Barry Nalebuff. Co-opetition. Currency/Doubleday, 1996. Brown, Shona L. and Kathleen M. Eisenardt. Competing on the Edge. HBS Press,1998. Collis, David and Cynthia Montgomery, "Competing on Resources: Strategies for the 1990s," Harvard Business Review, July/August 1995. Cusumano, Michael A. and David B. Yoffie. Competing on Internet Time. Free Press, 1998. Fahey, Liam. Competitors. John Wiley, 1999. Ghemawat, P. Commitment. Free Press, 1991. Ghemawat, Pankaj, "Sustainable Advantage," Harvard Business Review, September-October, 1986, pp. 53-58. Hax, Arnoldo C. and Nicolas S. Majluf. The Strategy Concept and Process. Prentice Hall, 1991. Lax, David A. and James K. Sebenius. The Manager as Negotiator. New York: The Free Press, 1986. Minzberg, Henry and James Brian Quinn. The Strategy Process. 2nd Edition, Prentice Hall, 1991. Nalebuff, Barry and Avinash Dixit. Thinking Strategically. Norton Press, 1991. Oster, Sharon. Modern Competitive Analysis. Oxford University Press, 1990. Porter, M. E., "From Competitive Advantage to Corporate Strategy," Harvard Business Review, May-June 1987, pp. 43-59. Firm Strategy and Industry Structure Caves, R. E., "Industrial Organization, Corporate Strategy, and Structure," Journal of Economic Literature, March 1980, pp. 64-92. Chandler, A. D. The Visible Hand. Belknap Press, Harvard University Press, 1977.
  • 23. BUS 260a Competition and Strategy v1.0 Spring 2007 23 Chandler, A. D. Strategy and Structure. MIT Press, 1962. Chandler, Alfred D., Jr., "The Enduring Logic of Industrial Success," Harvard Business Review, March-April, 1990, pp. 130-140. Christensen, Clayton. The Innovator's Dilemma. HBS Press, 1997. Fine, Charles. Clockspeed: Winning Industry Control in the Age of Temporary Advantage. Perseus Books, 1998. Porter, M. E. Competitive Advantage. Free Press, 1985. Porter, M. E. Competitive Strategy. Free Press, 1980. Porter, M. E. "How Competitive Forces Shape Strategy," Harvard Business Review, March/April 1979. Tirole, Jean. The Theory of Industrial Organization. MIT Press, 1988. Shapiro, Carl and Hal R. Varian. Information Rules. HBS Press, 1998. Slywotzky, Adrian. Value Migration. HBS Press, 1996. Vietor, Richard H. K. Contrived Competition. Harvard University Press, 1994. Yoffie, David B. Competing in the Age of Digital Convergence. HBS Press, 1997. Scope of the Firm and Firm Capabilities Chandler, Alfred D., Jr. Scale and Scope: The Dynamics of Industrial Capitalism. Cambridge, MA: Harvard University Press, 1990. Gomes-Casseres, Benjamin. The Alliance Revolution: The New Shape of Business Rivalry. Cambridge, MA: Harvard University Press, 1996. Hamel, Gary and C. K. Prahalad, "Core Competence of the Corporation," Harvard Business Review, May/June 1990. Jensen, Michael C. Foundations of Organizational Strategy. Harvard University Press, 1998. Milgrom, Paul and John Roberts. Economics, Organization, and Management. Englewood Cliffs, NJ: Prentice Hall, 1992. Penrose, Edith. The Theory of the Growth of the Firm. Basil Blackwell, 1968. Teece, D., "Economies of Scope and Scope of the Enterprise," Journal of Economic Behavior and Organization, June 1980, pp. 223-247. Teece, D., "Toward an Economic Theory of the Multi-Product Firm," Journal of Economic Behavior and Organization, March 1982, pp. 39-63. Willamson, O. E. Markets and Hierarchies. Free Press, 1975.
  • 24. BUS 260a Competition and Strategy v1.0 Spring 2007 24 Williamson, O. E. The Economic Institutions of Capitalism. Free Press, 1985. International Strategy and Management Austin, James E. Managing in Developing Countries: Strategic Analysis and Operating Techniques. New York, NY: Free Press, 1990. Bartlett, Christopher, Yves Doz, and G. Hedlund, eds. Managing the Global Firm. New York, NY: Routledge, 1990. Bartlett, Christopher A. and Sumantra Ghoshal. Managing Across Borders: The Transnational Solution. Boston: Harvard Business School Press, 1989. Caves, Richard E. Multinational Enterprise and Economic Analysis. 2nd Editon. Cambridge University Press, 1996. Davidson, William H. Global Strategic Management. New York, NY: John Wiley, 1982. Dunning, John H. Multinational Enterprises and the Global Economy. Addison-Wesley, 1993. Hamel, Gary and C.K. Prahalad, "Do You Really Have a Global Strategy?" Harvard Business Review, vol. 63, no. 4, July-August 1985, pp. 139-148. Hout, Thomas, Michael E. Porter, and Eileen Rudden, "How Global Companies Win Out," Harvard Business Review, September-October, 1982, pp. 98-108. Kester, Carl W. Japanese Takeovers: The Global Contest for Corporate Control. Boston, MA: Harvard Business School, 1991. Levitt, Theodore, "The Globalization of Markets," Harvard Business Review, vol. 61, no. 3, May-June 1983, pp. 92- 102. Porter, Michael E., ed. Competition in Global Industries. Boston, MA: Harvard Business School Press, 1986. Prahalad, C.K. and Yves L. Doz. The Multinational Mission: Balancing Local Demands and Global Vision. New York, NY: Free Press, 1987. Vernon, Raymond, and Louis T. Wells, Jr. Manager in the International Economy. Englewood Cliffs: Prentice Hall, 1986. Fifth edition. Vernon, Raymond. Sovereignty At Bay: The Multinational Spread of U.S. Enterprises. New York, NY: Basic Books, 1971. Wells, Louis T. Jr. Third World Multinationals: The Rise of Foreign Investment from Developing Countries. Cambridge, MA: MIT Press, 1983. Yip, George S. Total Global Strategy: Managing for Worldwide Competitive Advantage. Englewood Cliffs, NJ: Prentice Hall, 1992. Yoffie, David B., ed. Beyond Free Trade: Firms, Governments, and Global Competition. Boston, MA: Harvard Business School Press, 1993.
  • 25. BUS 260a Competition and Strategy v1.0 Spring 2007 25 Readings available (free to students) on Business Source Premier, Brandeis Library database Title: What Is Strategy? Authors: Porter, Michael E. Source: Harvard Business Review; Nov/Dec96, Vol. 74 Issue 6, p61, 18p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=9611187954 Title: How competitive forces shape strategy. Authors: Porter, Michael E. Source: Harvard Business Review; Mar/Apr79, Vol. 57 Issue 2, p137, 9p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=3867673 Title: The Core Competence of the Corporation. Authors: Prahalad, C. K.; Hamel, Gary Source: Harvard Business Review; May/Jun90, Vol. 68 Issue 3, p79, 13p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=9006181434 Title: The Forgotten Strategy. Authors: Ghemawat, Pankaj Source: Harvard Business Review; Nov2003, Vol. 81 Issue 11, p76, 8p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=11187602 Title: The Competitive Advantage of Nations. Authors: Porter, Michael E. Source: Harvard Business Review; Mar/Apr90, Vol. 68 Issue 2, p73, 17p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=9005210820 Title: CREATING CORPORATE ADVANTAGE Authors: Collis, David J.; Montgomery, Cynthia A. Source: Harvard Business Review; May/Jun98, Vol. 76 Issue 3, p70, 14p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=547126 Title: From value chain to value constellation: Designing interactive strategy. Authors: Normann, Richard; Ramirez, Rafael Source: Harvard Business Review; Jul/Aug93, Vol. 71 Issue 4, p65, 13p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=9309166477 Title: Disruptive Technologies: Catching the Wave. Authors: Bower, Joseph L.; Christensen, Clayton M. Source: Harvard Business Review; Jan/Feb95, Vol. 73 Issue 1, p43, 11p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=9501303527 Title: VERSIONING: THE SMART WAY TO SELL INFORMATION. Authors: Shapiro, Carl; Varian, Hal R. Source: Harvard Business Review; Nov/Dec98, Vol. 76 Issue 6, p107, 9p Persistent link to this record: http://search.epnet.com/login.aspx?direct=true&AuthType=cookie,ip,url,uid&db=buh&an=1246803
  • 26. BUS 260a Competition and Strategy v1.0 Spring 2007 26 HBS Cases available (for purchase) on Harvard Business School Publishing website (www.hbsp.com) I have created a course area on the Harvard Business Online website where you can order the required materials for this course. Click on the link below to order the course materials. Click on the link below to order the course materials. http://harvardbusinessonline.hbsp.harvard.edu/relay.jhtml?name=cp&c=c95209 If you have not registered with Harvard Business Online, you will be required to do so. This URL will provide you with a list of required materials for use in this course. The products are listed at the bottom of this email. Note that the downloaded course materials are encrypted using SealedMedia. Use the following link to download the plug-in: http://download.sealedmedia.com/unsealer/index.asp You will have immediate access to the materials upon placing your order, for subsequent access, you must login to http://harvardbusinessonline.org For technical assistance, please view the Quick Tips section or contact Harvard Business School Publishing at 1- 800-810-8858 or 617-783-7700. They are open 8am-6pm Eastern Standard Time. They can also be reached at techhelp@hbsp.harvard.edu The cases that should be available in the package for this course, and that you will need to have to do the work in the course are the following: 9-373-052 Prelude Corp. 9-702-442 Cola Wars Continue: Coke vs. Pepsi in the 21st Century 9-793-035 Crown Cork & Seal in 1989 9--795-147 Microsoft--1995 9-795-115 Microsoft in the People's Republic of China--1993 9-388-014 Adolph Coors in the Brewing Industry 9-673-057 Benihana of Tokyo 9-704-430 Wal-Mart Stores in 2003 9-701-017 The Globalization of CEMEX 9-390-146 Hoechst and the German Chemical Industry 9-391-140 Hoechst in the United States (A) 9-799-139 Newell Co: Corporate Strategy 9-707-401 Procter & Gamble: Organization 2005 (A) 9-399-150 GE’s Two-Decade Transformation: Jack Welch’s Leadership 9-794-031 British Satellite Broadcasting vs. Sky Television 9-598-116 Dell Online 9-598-109 FreeMarkets OnLine 9-701-003 BMG Entertainment This syllabus was last updated on: January 8, 2007 by BGC