Strategic Management


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Strategic Management

  1. 1. Strategic Management SAMPLE SYLLABUS ONLY Required reading: th • Contemporary Strategy Analysis (5 Ed.) by R.M. Grant. Blackwell Publishers. (paperback) • Strategic Management Coursepack • Articles handed out or available online from EBSCO Host Business Source Premier (free on campus through the NYU Libraries site) Course Overview Why are some firms more successful than others? This is the fundamental question of strategy. This course analyzes the sources of competitive success among firms and develops knowledge and skills necessary to effectively analyze and formulate strategy, be it as a manager, a management consultant, or an investment banker. We will tackle the complexity of analyzing the business enterprise in this era of globalization and changing firm boundaries and of assessing strategy under increasing uncertainty. Course Objectives The objective of this course is two-fold. First you will develop strategic thinking by learning the concepts, models, and tools of strategic analysis and by applying them to actual competitive situations. Second, you will build your skills at communication— learning to present ideas concisely and persuasively—and at working collaboratively— obtaining better results by drawing on everyone’s knowledge and experience and building working relationships despite differences in opinions and priorities. Teaching Philosophy In class, I will act as moderator, facilitator, and lecturer to help you gain a better
  2. 2. understanding of strategic analysis. By actively participating in class discussions, you will sharpen your own insights, and those of your classmates. Most of you will not only become familiar with the content of the course, but perhaps more importantly, you will also learn to master the process of analysis and critical thinking that is a central aspect of strategy. Active Involvement. This class is designed so that participation plays an integral role in the learning process. Everyone must prepare the assigned material before class and participate in class discussion. You should expect me to "cold-call" frequently during class. A substantial portion of your grade will depend on your ability to contribute productively to our collective learning experience. We will be very demanding with regard to class attendance and on-time arrival in this course, because our collective learning is maximized with full participation and commitment on the part of everyone. Please remember that late arrivals are very disruptive to your fellow students and to the learning process. Your grade will be adversely affected if I discover a problem with regard to tardiness or absences. When absences must occur, please notify me by email in advance. Please note that class absences (for any reason) cannot be made up, because written assignments cannot replicate your contribution and learning experience in class. Case Discussion. We will be making extensive use of real business cases that provide a forum for you to apply concepts and analytical tools. The goals for each case discussion are to understand the strategic nature of the situation, define key issues, recognize critical assumptions and tradeoffs, and propose strategically sensible recommendations. In order to fully benefit from case discussion, you should: • Come to class well prepared. Analyze the case using the tools you have learned in class, and come prepared to answer the case assignment questions in class. • If tables and figures are provided, perform basic analysis to uncover trends and issues that may not be explicitly mentioned in the case. Probe beyond what is written to what you think may really be going on, using the course lectures and readings as a guide. • Given the complexities of the real world, there is no single right answer, although some answers are better than others. To find those, use strategic concepts and tools to analyze a situation. On any given day, you may be called upon to state your major conclusions and then to provide evidence and analysis in support. Even in the most ambiguous situations, it is important to examine data, reasons, and assumptions that make some answers better than others. For class discussion you will be expected to draw from all the relevant readings and class discussions to date. Also, please remember to listen carefully and respectfully to your classmates and suggest supporting or alternative views. Thoughtful debate is highly encouraged.
  3. 3. Academic Integrity. In order to maintain a vigorous learning community in the classroom, it is critical that we, as a class, do not tolerate academic fraud (cheating, plagiarism, lying). As a matter of personal and professional respect for each other, and ourselves we should expect the highest standards of conduct from our peers and ourselves. Violating these standards takes away the value and meaning of the educational environment for all of us, and in the event that such a violation occurs, the individual(s) responsible will be subject to University sanctions that may include failure from the course, suspension, or expulsion. Course Grading Grading will be based on the following: Participation 35% Quizzes 30% Team Company Analysis 35% Participation. Your participation grade will be based on both oral contributions during class (individual comments and informal group presentations) and individual and group exercises (in-class and out-of-class). Since the purpose of the exercises, cold calling, and presentations is to facilitate your in-class contribution and learning, these may not be made up. You are also required to attend the Barney’s Strategy Event on Friday, April th 28 . Please do not ask me for a way to make up missed exercises; there is no substitute for the in-class aspect of learning in a case-based course. Quizzes. There will be three non-cumulative quizzes to test and provide feedback about your mastery of the content of course. These are closed-book, individual quizzes. If you must miss a quiz, you should contact me at least one week in advance to make arrangements to take the quiz early. If you miss a quiz unexpectedly, you should contact me immediately to discuss your options for making up the work. There will be a grade penalty associated with taking a make-up quiz. Team Case Analysis. Over the course of the semester, you will work in groups of 4-5 to write a company analysis that utilizes the tools and concepts of the class. The companies to be analyzed will be announced in class. Each company analysis must include (but is not limited to) the following components: 1. Brief Introduction & Key Issues It is your responsibility to identify the key issues that the company currently faces. Often best to do this AFTER you have done the bulk of your analysis. 2. External Analysis, including o Porter’s 5/6 Forces, and o Macroenvironmental analysis
  4. 4. 3. Internal Analysis, including o Assessment of firm’s strengths and weaknesses o Are any of the firm’s resources sources of competitive advantage? Are those advantages sustainable? What are the firm’s core capabilities? o What do the firm’s financial statements say about its health? Trends? Comparison to competitors? 4. Analysis of business-level positioning strategy used by the firm, including o What the overall positioning of the firm is in this particular market; o How the positioning strategy is (or is not) supported by its functional strategies; and o How the positioning strategy influences (or responds to) the competitive and/or cooperative dynamics of the industry. Be sure to include any appropriate quantitative analysis of the advantage this position yields (or fails to yield) over the firm’s competitors. 5. Analysis of the corporate-level strategy of the firm o Identify the businesses the company is in (or is considering entering), how they are related (or unrelated), and whether and how they create additional value in their combination. Be specific and detailed. If it is unclear that value is created, try to assess why the firm might have chosen to enter those businesses. o Identify and analyze the methods of entry the firm has used to enter those businesses. Were the methods of entry used (or proposed) the best choice given the firm’s objectives, environment, strengths, weaknesses, and strategy? Be sure to include any appropriate financial analysis to support your assessment. 6. Recommendations Recommendations should respond to the key issues that the company currently faces, and must be specific and actionable. They must not be obvious “so what” platitudes, and they must be consistent with the analysis. You should evaluate the impact of each recommendation on the firm’s environment, strengths, weaknesses, and strategy. Do not forget to consider the firm’s financial standing when making recommendations. The company analysis should be typed single-spaced, 12 point Times New Roman Font, with 1 inch margins all around. The analysis should be no more than 10 pages, excluding references, and exhibits. All exhibits should be referred to in the text of the analysis. Please pay careful attention to the clarity and quality of your writing. Difficult- to-comprehend passages and grammatical errors are a strong signal that your team has not carefully prepared the company analysis.
  5. 5. You will be expected to gather information regarding the company from a variety of sources (SEC filings, newspapers, magazines, Wall Street research reports, etc.). I may provide a published case study as a starting point for your team’s analysis. Any information used in your analysis must be properly referenced. Failure to properly reference any external source constitutes plagiarism. To avoid any confusion over the originality of your work, your team should work alone, and should not utilize any analysis found on the web, performed for previous classes, or any other source (for instance, please do not replicate the analysis performed by a research analyst at one of the large investment banks; you may, however, draw on data from those research reports). Both a hard and an electronic copy of the case must be submitted within one week of the last day of class. Hard copies should be submitted to the instructor personally (or slide under instructor’s office door); electronic copies must be submitted to the digital drop box available on blackboard, indicating the instructor as the recipient. Email submissions will not be accepted. The instructor reserves the right to submit the case analyses to one of the many plagiarism-detection programs available. You may be asked to evaluate your own and your peers’ contributions to the group company analysis. This evaluation may be used to scale your grade on the group company analysis. SCHEDULE Class Topics and Reading Assignments Introduction, External & Internal Analysis, Competitive Advantage
  6. 6. 1 Introduction to Strategic Management Readings: Grant, Chapters 1 & 2 What Is Strategy? By: Porter, Michael E.. Harvard Business Review, Nov/Dec96, Vol. 74 Issue 6, p. 61-78 (Access through EBSCO) Case: Matching Dell Case (A & B) (coursepacket) Assignment Questions (please be prepared to answer these questions in class): 1. How and why did the personal computer industry come to have such low average profitability? 2. Why has Dell been so successful despite the low average profitability of the PC industry? 3. Looking back to 1996, how large was Dell’s competitive advantage at that time? Specifically, calculate Dell’s advantage over the team of Compaq and a reseller in serving a corporate customer. To size up Dell’s competitive advantage, you must understand the gap between a consumer’s willingness to pay for Dell products and Dell’s costs of providing those products. In your analysis, you should compare (a) the wedge that Dell drives between willingness to pay and costs to (b) the wedge generated by a Compaq/reseller team. To the extent that Dell’s wedge is larger, it has a competitive advantage. The Matching Dell (A) case allows you to analyze relative costs in 1996 in detail. Please note that the case allows you to compare willingness to pay only qualitatively. To examine Dell’s costs relative to its competitors, consider a typical PC equipped for the business market. From Exhibit 10b, you can calculate the price that Dell charged for such a machine in 1996. Next, you can use Exhibit 6 to calculate Dell’s cost of goods sold for such a machine. Using other information in the case, identify the major categories of cost differences between Dell and the Compaq/reseller team; as they provide a typical corporate PC, how do the costs they incur differ? Finally, try to quantify the savings or extra costs associated with each difference. 4. By the end of the Matching Dell (A) case, how effective have the competitors been in responding to the challenge posed by Dell’s advantage? How large is Dell’s remaining advantage at the end of that case? 5. At the end of the Matching Dell (B) case, Michael Dell expresses surprise that no one has copied their business model. Why has no one been highly effective at imitating Dell’s approach? 6. Should Dell today continue to expand its product lines to markets
  7. 7. such as PDAs, flat-screen and high definition televisions, digital music players, and digital cameras?
  8. 8. 2 Industry Analysis Readings: Grant, Chapter 3 & 4 Case: Starbucks Corporation (No case in course materials; assignment to be described at the end of the first day of class) 3 Internal Analysis and Competitive Advantage Readings: Grant, Chapters 5 & 7 Ratio Analysis Handout (handed out in class) Case: Wal-Mart Stores in 2003 (coursepacket) *Quiz 1 Business-Level Strategy and Competitive Dynamics 4 Competitive Positioning: Cost Advantage Readings: Grant, Chapter 8 Case: Airborne Express (coursepacket) 5 Competitive Positioning: Differentiation Readings: Grant, Chapter 9 Case: Edward Jones (coursepacket) 6 Competitive Dynamics Readings: The Right Game: Use Game Theory to Shape Strategy. By: Brandenburger, Adam M.; Nalebuff, Barry J.. Harvard Business Review, Jul/Aug95, Vol. 73 Issue 4, p57, 15p (Access through EBSCO) Case: Dogfight over Europe: Ryanair (coursepacket)
  9. 9. 7 Competitive Dynamics, Cont’d Case: Bittersweet Competition (coursepacket) *Quiz 2
  10. 10. Corporate-Level Strategy 8 Expanding the Scope of the Firm Reading: Grant, Chapter 13 Note on Corporate Governance (handed out in class) Case: International Management Group (coursepacket) 9 Diversification Strategies Readings: Grant, Chapter 15 Note on Market Failures (handed out in class) Case: The Walt Disney Company: The Entertainment King (coursepacket) 10 Diversification Strategies, Cont’d Reading: Grant, Chapter 16 Case: Tyco International (A) 11 Corporate Strategy in a Global Context Reading: Grant, Chapter 14 Case: House of Tata, 1995 & House of Tata, 2000 (coursepacket) 12 Methods of Entry and Managing Corporate Scope: Mergers, Acquisitions, Joint Ventures, Alliances, etc. Readings: Methods of Entry Worksheet (handed out in class) Case: Daimler-Benz AG: Negotiations between Daimler and Chrysler & The Renault-Nissan Alliance *Quiz Corporate Transformation & Wrap Up
  11. 11. 13 Corporate Transformation & Conclusions Case: Intrawest Corporation This schedule is a guideline only; instructor reserves the right to change the schedule as necessary.