UNIVERSITY OF LAUSANNE
Faculty of Business and Economics (HEC)
COURSE: COMPETITIVE STRATEGY
Master in Management
Professor: Jean-Philippe Bonardi Assistant: Dominik Breitinger
Email: Jean-Philippe.Bonardi@unil.ch Email: Dominik.Breitinger@unil.ch
Tel: 021 692 3440 Tel: 021 692 34 30
Office: Internef 604 Office: Internef 541
Course on Fridays 8:30am-noon
A website for the course with a description of the sessions and posted material is available at:
The focus of this course is on strategic management - the process of choosing and defining purposes and
objectives, formulating a strategy and implementing it. The course aims to develop your ability to see an
organization as a whole and to understand how and why the various functions of a business are
interdependent and need to be coordinated. Hence, the thrust of the course is the organization in its
totality - the environment in which it operates, its strategy and how this strategy builds on the firm’s
internal administrative activities. The emphasis is on the kinds of problems and issues that affect the
success of the entire organization. I will make a serious attempt to elaborate on the general applicability
of the strategic management discipline to all types of firms, although in the end, the focus rests on profit-
oriented enterprises operating in a competitive environment.
Through readings, discussions and lectures, you will be exposed to a wide ranging, up-to-date synthesis
of the huge literature on strategic management and to a systematic review of the prevailing views and
ideas about the manager as an architect and implementor of a strategy. Terms and concepts will be
thoroughly explored and applied on the kinds of problems and issues that bear directly on an
organization's ultimate success.
THIS COURSE HAS BEEN DESIGNED AS AN ADVANCED COURSE. I WILL ASSUME THAT
ALL STUDENTS IN THE CLASS HAVE ATTENDED A BASIC STRATEGY OR BUSINESS
POLICY CLASS. This means that I assume you will know some of the basic Strategy frameworks, such
as key methods to analyze an industry profitability (especially Porter’s 5 forces framework) or when
firms should adopt Generic strategies (such as Cost Strategies or Differentiation Strategies). The first two
sessions will include and review some of these key notions. It will also be a way for you to become more
familiar with my way of teaching. In fact, we will also use these key notions as starting points for many
of the subsequent sessions in the course, even when we explore the more advanced topics.
Even though I will bring up quite a bit of theory, the orientation of this course will be pragmatic and
managerial. Through the use of the case method, you will be placed in simulated managerial roles where
the concepts of strategy are applied in relevant management situations. General managers must apply
judgment when formulating strategy and guiding its implementation, and answers that are clearly right or
wrong are rare in strategic management. Nevertheless, remember that judgment without rigorous analysis
is like shooting hoops in the dark!
Besides learning about advanced competitive strategy concepts, this course will give you an opportunity
to develop and demonstrate a number of capabilities in dealing with cases and using the research findings
- size up, quickly and accurately, complex and unstructured situations by identifying the
core problems and issues;
- analyze quantitative and descriptive data to identify strategies which are appropriate to
each situation, evaluate alternatives, and recommend specific courses of action for
creative solutions to problems/issues;
- link theory and practice, and develop understanding of when and how to use what "tools"
in particular problem solving situations;
- sharpen analytical skills acquired in functional areas
Cases and additional readings (listed below) will be available either on the course website or at the
My assistant, Dominik, will place a couple of case packets at the library (with all the cases used in the
course) for your consultation. Please contact him if you have problems finding these case packets.
Alternatively, cases that are not posted on the web will come from the Harvard Business School website
and will be available for reading in the HEC library.
Course Expectations and Organization
All students are required to attend regular classes every Friday (8:30am to noon) for 14 weeks.
In each of this session, we will have a case discussion that I will complement with lectures and
comments. Sometimes, I will also assign compulsory or additional readings. These readings (both theory
and case studies) are your responsibility and need to be prepared carefully every week if you want to
learn and succeed in this course.
This course is committed to the case method of teaching. Every session must be considered, to some
extent, as a business meeting where students are asked to put their collective knowledge, experience and
brain-power together to analyze and solve complex business problems. Class discussions, role plays, and
presentations will be used to help you analyze authentic business situations, evaluate alternative courses
of action, and produce concrete action plans.
This means you cannot remain a passive observer. The case method forces you to be decisive and action-
oriented. “If you were the decision-maker, what would you do and how would you do it?” Answering
these questions requires the active participation and co-operation of all people in the classroom, meaning
you have to come to each class prepared to present arguments on what to do and how to do it. Don’t
come to class to sit back and hear intellectually pleasing theories of the world. Business is real world
stuff. Come to class to analyze and act in genuine managerial situations. Give yourself the opportunity
to think for yourself and to learn from the contributions of others.
Naturally, such a method places heavy demands on you. Being actively engaged in the learning process
means you have to devote time and energy to preparation before class and then, during class, listening to
others and being willing to put forward and explain your points of view. If you think you know the
answer to a case before carefully analyzing it, chances are that you are either naïve or simply too
subjective. Use the study questions provided with each case to guide your analysis, and stimulate your
preparation. Keep asking yourself: “What is really problematic here? How can I best solve this situation?
What are the implications of my decisions?” Study questions are suggestions, not “assignments” to be
The readings assigned for each class are your responsibility. In each session, you are expected to bring
forth questions that arise from the readings for class discussion.
Evaluation of Students’ Learning
Students' progress will be evaluated on performance in class discussions, one group written assignment
and final examination. I will apply the following calculation to get your final grade:
Classroom Performance 20%
Group assignment 30%
Final Examination 50%
FINAL GRADE 100%
Below is a more detailed account of what I expect from you in this class.
A. Class Participation and Classroom Performance 20%
Class participation is an important element of learning progress. You should be present (on time) and
prepared for every class, and ready to share your views in the classroom discussion. In fact, you have an
obligation not only to study the material, but in addition, to assist in the learning of your classmates. To
do so, you must make a meaningful contribution to the discussion in class. Summarizing case facts,
repeating points already made, or simply agreeing with your classmates’ arguments does not constitute a
There is no need to participate for the sake of participating. You will only get a good participation grade
if your comments are seen to provide insights that pass the “so-what” test. Those can take the form of
helping to sort out the key facts in a complex case or developing an analysis that builds on prior
comments, thereby moving the class discussion forward. Your contribution mark, therefore, will be
primarily a function of the quality of your comments.
B. Group Assignments 30%
As part of your grade, you will be asked to form a group (max 5 students) to provide an analysis of one of
the cases we will discuss in class. The analysis should be prepared like a presentation with a set of slides
(maximum 10 Powerpoint slides). You will not be asked to present your slides in class, but I use here the
presentation format because it is a critical way of communicating for anybody involved in strategic
management, whether as an entrepreneur, in a firm, or as a consultant. This is a tough exercise because
you need to find an effective way to communicate your analysis in a limited space, and using figures and
graphs but without losing the logic of your argument. You’ll see, it’s difficult but also a lot of fun!
Regarding the organization of your slide deck, you can choose to follow the assignment questions posted
for the case (assignment questions are here to guide you), but you DO NOT HAVE TO. Please feel free
to adopt the structure you feel is the most effective to convey your ideas.
For your assignment, you are free to choose one among all of the cases listed on the schedule.
Assignments are due at the beginning of the session, in hard copy or by email, before the case is taught.
Students will lose grades for submitting their assignment late.
C. Final Examination 50%
The format of the final exam is a open book, in class, 4 hour examination that seeks to assess your
comprehension of the theory covered in the readings and lectures, as well as your problem-
solving/decision-making skills, as they were developed through the case discussions in class.
Students who fail the course must redo only the final examination, which means that the student keeps its
classroom performance & group assignments grades. If a student is required to redo the exam, he or she
will do so during the official re-examination period. Examination and re-examination will have a similar
From time to time, I will post optional readings on the course website. Up to you to read them or not (or
also to keep them for later!).
There also exists an extensive and growing literature on strategic management. Students should consult
the following journals for additional or specialized materials: The Economist, Harvard Business Review,
Sloan Management Review, California Management Review, Long Range Planning, The McKinsey
Pure academic outlets, such as the Strategic Management Journal, the Academy of Management Journal,
and the Academy of Management Review, Management Science, Organization Science, Journal of
Management, Journal of Business Venturing, also constitute valuable sources of insights although more
technical in nature.
Please feel free to contact me if you wish to read more on one of the topics we discuss/present in class.
Course Structure and Flow
The course consists of three modules:
1. The first module is on ‘Competitive advantage’. Where does it come from, and why does it differ
from one type of industry to another.
2. The second module will look into ‘Competitive Dynamics’: how firms’actions create reactions
from their competitors and how these types of games play out.
3. The third module will be about ‘Competitive Strategy Implementation’. Too often,
implementation considerations are forgotten, whereas they also play a key role. Formulating the
strategy is one thing, implementing it is another. We will look into this as well to finish off the
NOTE: The session on September 19 is cancelled. It will take place at a later date. This date is still
to be determined.
MODULE 1: COMPETITIVE ADVANTAGE
Session 1: Industry structure analysis
September 26, 2008
Case: Ice-Fili and the Ice cream industry in Russia
1. How attractive is the Russian ice cream market? How is it likely to evolve?
2. How well is Ice-Fili relative to its key competitors?
3. What are Ice-Fili’s strategic options? What do you recommend they should do?
This session introduces the fundamental tools of industry analysis, including Porter’s five forces
framework. The purpose is to develop an understanding of how industry structure (which as we
will see is not set in stone) determines industry profitability and the range of actions that can be
source of success for the firm.
Porter, M., “How competitive forces shape strategy,” Harvard Business Review, 1997.
Session 2: Differentiation and strategic repositioning
October 3, 2008
1. How did Ducati become the second most profitable motorcycle maker in the world
despite its small scale? How did they turn things around?
2. Can Ducati sustain its position in the sport segment?
3. Should they enter Harley-Davidson’s segment? If not, what else can they do?
Optional Readings: Strategic positioning, by P. Ghemawat
Session 3: Cost advantage and differentiation: Is it possible to generate a dual advantage?
October 10, 2008
1. What recommendation would you make to Chairman Lee regarding Samsung’s response to
the threat of large-scale Chinese entry?
2. What were the sources of Samsung’s cost advantage in DRAM in 2003? (tip: you might
want to run some numbers there to support your analysis)
3. What were the sources of Samsung’s price premium in DRAM in 2003?
Session 4: Competitive advantage and internal resources/capabilities
October 17, 2008
Case: Harlequin: The Mira decision
1. What is the basis of Harlequin’s competitive advantage? Where in its value chain does it
create unique value?
2. Should Harlequin re-enter the single-title business?
Collis, David, and Cynthia Montgomery, “Competing on resources: Strategy in the 1990s,”
Harvard Business Review, 1995.
Session 5: Competitive advantage in services
October 24, 2008
Case: Cirque du soleil
1. What is Cirque’s product and strategy?
2. How has Cirque structured and supported its cast to deliver superior performance?
3. What are the challenges to Cirque’s continued growth and/or diversification?
Session 6: Competitive advantage and technology with network effects
October 31, 2008
Case: Apple Computer
1. Historically, what were Apple’s major competitive advantages?
2. Analyze the structure of the personal computer industry over the last 15 years. How have the
dynamics of the PC industry changed?
3. Evaluate Apple’s strategy since 1990.
4. Has Steve Job solved the “problem”? What should he do now?
Session 7: Network effect industries, late movers and the Internet world
November 7, 2008
Case: Google Inc.
1. What were the key factors behind Google’s early success?
2. Do you expect the search business to become more concentrated? Is it a winner-take-all
3. In renewing its deal with AOL, could Google afford to pay AOL more than 100% of the
revenue generated from AOL searches? How did Microsoft’s maximum affordable bid
for AOL’s search traffic compare to Google’s?
4. In addition to enhancing its core search businesses, should Google also branch out into
new arenas? Which of the following do you recommend: (1) building full-fledged portal
like Yahoo!’s; (2) targeting Microsoft’s desktop software hegemony; (3) becoming an e-
commerce intermediary like E-bay?
Session 8: How far does competitive advantage travel?
November 14, 2008
Case: HSBC Holdings
1. Should Sir John Bond have bought Household? Yes or no?
2. What can HSBC bring to a leading North American consumer finance company such as
3. Is HSBC organizationally ready to take on consumer finance?
MODULE 2: COMPETITIVE DYNAMICS
Session 9: Competitive dynamics and market entry
November 21, 2008
Case: Dog Fight Over Europe: Ryanair
1. What is your assessment of Ryanair’s launch strategy?
2. How do you expect Aer Lingus and British Airways to respond? Why?
3. Do you expect this entry strategy to succeed or not?
Game theory and Business Strategy
Session 10: Competitive dynamics and oligopolistic markets
November 28, 2008
Case: Sticky business: Rivalry in the U.S. labelstock industry
1. What is your overall assessment of the attractiveness of the labelstock industry?
2. How would the acquisition by UPM of MACtac change the profitability potential of the
3. Assuming the acquisition is approved in the U.S., what is your assessment of UPM’s
decision to acquire MACtac?
4. Now take Avery Dennison’s position: Is this merger a good thing or a bad thing for Avery?
Session 11: When small emerging market firms compete against multinational giants
December 5, 2008
Case: Lamoiyan Corporation of the Philippines: Challenging Multinational Giants
1. How do you evaluate Lamoiyan’s entry strategy in the Philippine toothpaste market?
2. Why didn’t Colgate and Unilever crush Lamoiyan earlier? What factor or factors do you think
were the most important in driving the hesitancy to respond? (Hint: try to think about what
price a firm like Colgate would have to charge to ‘kill’ Hapee)
3. Is Lamoiyan’s success attributable to good strategy by Lamoiyan or bad strategy by Colgate
and Unilever? What aspects of Cecilio Pedro’s strategy were most important in allowing
Lamoiyan to survive and thrive?
4. How do you evaluate each of the avenues of growth that Lamoiyan is pursuing (increased
market penetration, expanding product offerings, international expansion)? Which option
shows the most promise? Which option most concerns you?
Session 12: Competitive dynamics, entry and nonmarket strategies
December 12, 2008
Case: Porter Airlines
1. Politics aside, does an investment in a new airline at TCCA represent a sound business
opportunity? Can a new airline compete with an incumbent like Air Canada and survive in the
2. How important was it for the company to gain political or public support for its proposal?
What should its 'non-market' (political or lobbying) strategy be to achieve support? Whom did it
need to influence? By what means?
MODULE 3: STRATEGY IMPLEMENTATION
Session 13: Strategy implementation I
December 12, 2008 – 12.30 – 14.00
This session attempts to demonstrate how strategy applies at the level of the CEO and at all
levels of the organization. This view presents a more challenging perspective on strategy as it co-
mingles the day-to-day operating issues with strategic issues.
Case: AES in Georgia
1. Does entering Georgia sound like a good idea for AES?
2. What are the things that you think they should keep in mind when evaluating this investment?
Session 14: Strategy implementation II + Wrap up session / Exam preparation
December 19, 2007
In this session, we finish this course by looking at strategy implementation from the perspective a
recent business school graduate (it could be you) as he attempts to act as an intrapreneur in a
large multinational corporation.
Case: GE Energy
1. Review your assessment of the attractiveness of the energy management industry and the key
success factors for operating in it.
2. How does the GE management system work? How does GE Canada fit into this picture?
What are the implications of these observations for the development of the energy
3. At the end of the meeting with GE Supply executives, what are your options for proceeding
and what do you intend to do?