BUS30-993-01, STRATEGIC MANAGEMENT
FWO 222 Monday, 2:00PM-4:30PM
Instructor: Ira J. Dolich, Ph.D.
Phone: Office-863-1659, Home-869-0356
Office: 2nd Floor Joe S. Mundy Hall
Hours: by Appointment
Course emphasis is on the application and integration of business concepts and
tools through participation in the management of a firm in competition with other
students from the United States and foreign countries. The course’s focal point is
a computerized strategic management simulation with considerable emphasis on
Marketing. Prerequisites: Successful completion of BUS30-323, 483, 473 or
Eco 473, and consent of instructor.
This is an integrative class that draws upon your knowledge of accounting, finance,
information systems, marketing and management. It is also helpful if you have had
some work experience, are creative, and somewhat Machiavellian.
About the Course
Unlike some other courses you may have taken, Strategic Management involves mostly active, as
opposed to passive, learning. It also challenges you to utilize all that you have learned and
experienced to create, develop, grow, and manage a business enterprise in a realistic and very
The focus of this course is strategic. To succeed you (and your team members) will have to maintain
strategic direction for your actions. On the other hand, you will quickly become immersed in a myriad of
tactical detail challenging your ability to keep strategic composure and focus.
All of this action occurs in the form of a sophisticated computer simulation. Within this game, you will
form a company team, start a business and identify goals for its success. You will analyze international
markets, design products, manufacture and improve them, manage a field sales organization and e-
commerce web sites, design and implement promotional strategies, set salary and benefits, and deal
with pricing decisions. Your ability to do much of this will be subject to limited financial resources that
improve or wane based on your performance and other factors. The environment of the simulation is
Strategic Management Spring, 2007 Syllabus, Page 1
also quite sophisticated, allowing the market to develop and evolve based on economic (and other) fac-
tors, as well as the performance of the companies within the industry you are competing.
In other words, there are five hallmarks to the methodology used in this class:
• A heavy emphasis on the interconnectedness of the business disciplines,
• The continuous application of strategic planning and execution skills,
• Persistent focus on bottom line profitability while simultaneously delivering customer value,
• The repetitive practice of budgeting and cash-flow management, and
• A strong emphasis on leadership, teamwork and interpersonal skills.
1. Marketplace, Strategic Corporate Management game registration purchased through the
Marketplace web sitei. (see endnote i)
2. Readings Book: Ernest R. Cadotte and Harry J. Bruce, The Management of Strategy in
the Marketplace, Thomson/Southwestern, 2003, ISBN 0-324-17575-2. There will be
important readings for all team members and specialized readings for others.
3. Marketplace on-line manual. This manual is available in stages from the computer
program as needed to perform in the simulation.
4. Team Notebooks: you will need at least one 3-ring binder, 2” Minimum thickness.
National Brand, Premier E-Z-D View Binders are recommended. (These binders are needed to
document your team meetings, memoranda to the Board of Directors and to track your team’s progress
over the semester. Make sure that you get the type with straight, rather than rounded, rings, plastic on
the front and spine, and a slot inside the cover.)
5. Other Materials: Business Week, Fortune, Wall Street Journal. (Although not actually
required, it is suggested that you read or subscribe to one of the standard news and reference sources in
business.) Each of these sources provides a wealth of corporate and industry news helpful to the
university student. If you have the resources to subscribe to only one of the publications, then the Wall
Street Journal is recommended. It is published each workday and features many interesting articles on
accounting, finance, management, international business, and other fields, as well marketing. There are
special columns on marketing a couple of days a week, usually on Tuesdays and Thursdays. Student
subscriptions are available.
As you can see from the information in Table 1, class grades will be based on the major components of
the course, mostly revolving around the simulation. The grade that you earn will be determined by your
final percentage in the course, as shown in Table 2.
Table 1: Grade Components
One -Year Business Plan 125 pts ( 25%) Written Plan
1st Report to the Board 65 pts ( 13%) Oral Presentation of Plan @ Q6
2nd Report to the Board 50 pts ( 10%) Written & Oral Presentations @ Q9
Marketplace Results 100 pts ( 20%) Balanced Scorecard Results
Team (Peer) Evaluationii 100 pts ( 20%) Submit During Final Presentation
Strategic Thinking 30 pts ( 6%) Instructor’s subjective evaluation
On-line Manual Examiii 30 pts ( 6%) If required, see iii endnote
Total 500 pts (100%)
Strategic Management Spring, 2007 Syllabus, Page 2
Table 2: Grades, Scores, Percent
Grade Score Percent
A+ =490-500 =>98
A = 465-489 = 93-97
A- = 450-464 = 90-92%
B+ = 440-449 = 87-89%
B = 415-448 = 83-86%
B- = 400-414 = 80-82%
C+ = 390-399 = 77-79%
C = 365-389 = 73-76%
C- = 350-364 = 70-72%
D+ = 340-349 = 67-69%
D = 315-339 = 63-66%
D- = 300-314 = 60-62%
F = 000-299 <= 59%
1. To understand what it takes to deliver customer value. Modern emerging concepts of marketing
are based on the creation of customer value. This is not the same as the more traditional marketing
concept. It requires an understanding of the customer’s value perception and the ability to translate
that information into a combination of primary and extended product/marketing features. This objective
addresses your need to effectively use market research and performance data by providing the best (as
in best competitive) combination of product features and promotion in the right locations. All of this must
be accomplished at prices consistent with the customer’s perception of value while satisfying the
financial requirements of the business.
2. To understand the strategic planning process and to apply it in a business situation. To
achieve this objective you will need to establish objectives and create a plan that effectively utilizes the
various strengths of your teammates. The plan must incorporate time-specific stages of progress and
development. Your strategy will emerge in the early periods of the simulation as you gain an
understanding of the market and your ability to compete effectively across the various areas of
3. To develop strategic thinking skills. You will need to find tools to facilitate your strategic planning
tasks and to keep tactics in perspective. On the other hand, tactics will be the means by which you
achieve strategic objectives. Knowing the objectives you want to accomplish and designing tactics to
achieve them becomes an increasingly challenging task as the industry and competition evolve and
grow. Some useful tools include simple spreadsheets, planning methods (e.g., pert charting), and
sophisticated application programs you develop specifically for this purpose.
4. To develop on-your-feet-thinkers and “skilled adjusters” through the initiation and
management of the strategy in an uncertain, highly competitive, and very dynamic environment.
Unlike the static exercises that may have characterized some of your education, the simulation pro-
vides a constantly changing decision making environment. At the tactical level you will have to deal
with the reality of that changing environment to stay on your strategic plan. There are also times when
you need to make changes in the strategy itself, although such changes become tactical if they are
Strategic Management Spring, 2007 Syllabus, Page 3
nothing more than quick reactions to short-term developments. The pace of the simulation is fast, and
you will need to “think on your feet” to keep on track.
5. To gain experience in budgeting and cash flow management. In the “real world” discounted
cash flows have become the basis for assessing the performance of a business and placing a value on
it. To some extent this is also true of the companies in the simulation. More important, however, is the
effective planning and management of cash to insure attainment of strategic objectives. The availability
of cash from equity, debt, and sales revenue must be carefully utilized in the right combination and at
the right time. Cash may always be a constraint in the simulation forcing you to choose from among
desirable alternatives. It is also necessary to understand the relationship between actions, their effects
on cash, and the simultaneous change in other financial measures used to evaluate the success of the
6. To develop teamwork and interpersonal skills. Another way in which the simulation mirrors
reality is the organizational setting in which decisions are made and consequences are shared. Each
team is a company organization. While the specific organizational scheme will vary from company to
company, certain features remain constant. First, there must be a leader who accepts responsibility for
managing the strategy. Then, each team member must assume responsibility for one or more decision
making aspects. Finally, the team must function effectively to achieve its objectives. The latter will test
the interpersonal and team building skills of each member of the team. All of the issues faced in
organizations will be reflected among the members of a simulation team.
7. To develop an understanding of the whole business organization and how all of the
functional areas must be integrated to achieve corporate goals. The days of functional silos in
business organizations are numbered. Functional groups within a business competing for resources
and political influence tend to be inefficient at best and counterproductive at worst. An effective
manager of strategy understands that everything is interconnected. The operative phrase is cross-
functional integration. Marketing, research and development, and manufacturing are all affected by
each other and create new effects in turn. Everything places demand on the cash position and cash
availability affects everything. Failing to understand and deal with this cross-functional integration will
lead managers, and thus companies, to perform poorly.
8. To develop decision making skills and a sense of accomplishment which comes from testing
one’s business skills in a dynamic, uncertain, and competitive environment. This course
presents an opportunity for you to test yourself as a decision maker in an uncertain environment facing
competition and working with limited resources. How well do you utilize imperfect information to reduce
uncertainty? Can you maintain strategic perspective while working to implement necessary tactics?
Are you good on your feet in the face of change? Most important, this course should demonstrate that
you improve as a decision maker as you gain experience.
9. To gain confidence in making formal Board presentations. When actual decisions begin,
weekly meetings will consist of “board meetings” where the team members are the management board
members and the instructor is board chair. The focus of these board meetings is the team’s
presentation of the decisions for that quarter. The role of the board chair is to ensure that the team has
properly evaluated the competitive situation and that the financial expectations are reasonable.
To accomplish these objectives, you will participate in a complex simulation, conducted through a
“workshop” approach to teaching. The simulation you will be using, Marketplace, is a sophisticated
game. It is a “reality simulation” designed to replicate many of the competitive features of the business
Strategic Management Spring, 2007 Syllabus, Page 4
world. You will be challenged in much the same way as those who actually start and run their own
You will team up with 4 to 5 of your classmates to form an entrepreneurial firm that will compete in a
“business war game”; the Marketplace. During the next 16 weeks, you will take your fledgling busi-
ness through several stages of business growth, including emergence, development, and even early
maturity. Along the way, you will learn to cultivate and refine marketing strategies and tactics.
Each team member is required to have a personal ID and Password to access their company
information at the Marketplace web site. Here you will review company and industry quarterly
performance, your own and other team member decision inputs, and complete the decision making
process with a “wrap up”.
The readings book, “The Management of Strategy in the Marketplace” (MSM), contains an excellent
conceptual model to help guide your efforts in the simulation. The Marketplace on-line manual
provides a chronological listing of selected simulation activities which you and your team will encounter
while competing in the exercise. Each quarter (also referred to as a decision period) has a dominant
activity with a set of decisions linked to it. These dominant activities take the team through the
business life cycle from start-up through development, growth, and maturity. As you work through the
business life cycle, we will phase-in the Marketing and business disciplinary content as it becomes
relevant to the current decisions of the team. Thus, the delivery of the learning material is not organ-
ized by disciplines, rather by its relationship to decisions being faced by the company. Therefore, it is
important to review the contents of MSM prior to engaging in critical decision making activities. MSM
should be considered a valuable resource, in addition to the on-line manual, to help structure both
strategies and tactics.
Each quarter’s activities not only result in new material being introduced, but also build upon the prior
content so there is considerable repetition. It has been observed that business activities such as
leadership, team management, pro forma cash flow analysis, value creation in product, demand-based
production scheduling, activity-based costing, and strategic planning and management are not easily
absorbed. They require repetitive exercise in order to set them into the natural thinking of students.
As with all new ventures, you will face significant levels of uncertainty. You may be very uncomfortable
making decisions and commitments as you start your business. You probably have a natural need to
know the “right” answer. Indeed, your classroom training encourages you to be addicted to finding “the
answer.” However, in a rapidly changing business world there are few pat answers. Fuzzy logic, rather
than point estimates, dominates. Solutions are ephemeral. Today’s great idea is tomorrow’s cliché.
Outstanding entrepreneurs need two qualities to thrive: confidence in themselves and the ability to
adapt to a changing environment. These you will have the chance to experience in this course.
Hopefully, at the end of the simulation, you will have developed, or improved, on both of these
requisites for success. They will be manifested in your ability to read clues in the marketplace, predict
trends, plan a course of action to capitalize on market opportunities, initiate that plan, and then modify
plan and actions as information changes.
It is my hope that this experience in the Marketplace will allow you to become more than a marketing
technician. If the course objectives are realized, you will have become a management decision maker
with strategic and tactical planning skills. You will have developed knowledge of product strategy
coupled with entrepreneurial spirit and boldness. Finally, you will have come to appreciate the use of
every day “common horse sense” and a heavy dose of your mother’s intuition.
Strategic Management Spring, 2007 Syllabus, Page 5
As currently conceived, the course entails a great deal of work, particularly in regard to its major
component, the simulation. The most successful teams have been those that immediately became
familiar with the information in the on-line manual, who mastered the art of dividing and delegating
work, planned ahead (while remaining flexible), and learned to juggle a vast number of new cognitive
encounters without becoming overwhelmed. In the next several sub-sections, the main elements of the
simulation are adumbrated and some elucidating pointers given.
In my capacity as Board Chair, I shall meet regularly with each team on a formal basis beginning in
February. These formal meetings will be held in the classroom at which time the team will present and
substantiate its decisions for that quarter and discuss plans for the future. An agenda and a brief
“board memorandum” will be provided at the start of each of these formal meetings. Informal meetings
with the Chair and among your teammates will start almost at once as you undertake your initial
marketing research and analysis. In this crucial stage, you should be discussing your company plans
with the Board Chair.
“Be remembered for the quality of your questions.”
The Marketplace “on-line” manual contains all of the directions you will need to participate in the
marketing strategy simulation. Nonetheless, there is a tendency for students to ask the instructor for
help rather than look in the manual. Since this class adopts a “workshop” approach to learning, simply
answering any questions you may pose detracts from this pedagogical approach. For this reason the
instructor will levy a charge or consulting fee of $10,000 to answer any questions already addressed in
the Marketplace manual. The $10,000 charge will appear as a debit in the income statement for the
quarter in which it is incurred. To mitigate any possible penalties, I shall try to let you know if a
particular question you ask is liable for the $10,000 assessment.
Each quarter (1,2, …, 8), your team must prepare a succinct “board memorandum” summarizing its
goals, performance, strategy, and tactics for the current quarter of play. All functional areas of the firm
need to be reviewed. One copy should be placed in your team notebook and a copy given to the Board
Chair at the beginning of your team’s Executive Briefing.
“I love it when a plan comes together.”
As the simulation begins, your team of executives will own 100% of your new firm. By the end of
quarter four, $4,000,000 will have been invested in your company. These investments are automatically
recorded for each of the first four quarters. However, there is a high probability that you will require ad-
ditional venture capital as the market develops.
After the fourth quarter of play, you will prepare a one-year business plan (Q6-Q9) required as part of
the application for additional equity funding from venture capital firms. At this time you will also
complete the on-line tactical plan as part of the one-year business plan.
Guidelines for the preparation of the one-year business plan are contained in the on-line manual of the
Marketplace. An outline for the 1st and 2nd reports to the Board is included with this syllabus. Each
team will deliver an oral and written presentation of the business plan. The team will be expected to
make a professional presentation using an assortment of visual aids. Moreover, the details of the
market analyses and strategy must be carefully laid out in appropriate handouts. This presentation will
be made to a group of experienced business executives operating as the venture capital companies.
As a rule of thumb, the venture capitalists will require approximately 10% of the equity in your firm for
each million dollars it may decide to invest. For example, for an investment of $5 million, they would
take 50,000 shares of your firm at a price of $100/share. Although the actual price per share will be
determined by the Venture Capital group members, you must provide a suggested offering price as part
of your plan. When your financial performance is evaluated at the end of the game, the Balanced
Scorecard Analysis will account for your retained earnings figure by the percent of equity you have
surrendered to the VC and to Guido, a short-term cash provider of emergency cash. This discounted
figure will then be used to determine your financial performance. Please note that the amount of
additional equity invested in Quarter 5 is $5 million. You may value your VC shares at more or less
than $100/share, but the VC team members will decide individually on the price each will pay for your
shares. The highest bid per share will prevail until all $5mm is invested. No single investor will be able
to purchase all of your shares.
The business plan your team prepares is a watershed in the course. This business plan enables your
team to demonstrate understanding of its customers and competitors as the foundation for product,
promotion and manufacturing strategies. Play in the simulation will be suspended while you prepare
Individual Effort versus Group Effort
“Don’t try to go it alone. That’s why we call them ‘teams’”
Each student is expected to participate equally in all presentations, executive briefings and decision
making activities. Both the individual and the group will be evaluated on all assignments. Individuals
can rise or drop one or more letter grades from the group grade, depending upon their individual
contributions to the team and class.
Peer evaluations may be requested by the board chair as part of each business plan presentation, at
other times if necessary, and are required as part of the final presentation. Significant deviation in
performance above or below the team norm will be used to adjust individual student grades. Individual
team members shall be evaluated on the quality of their evaluations. Any individual receiving
“Unacceptable” ratings from his/her team may result in a final grade that does not provide credit for the
course. Peer evaluations are accomplished within the Southwestern University Honor Code
It is expected that each team member will spend a significant amount of time logged into their team
web site examining and analyzing relevant information, other team member’s initial and final decisions,
and entering their own decision responsibilities. Although there is no minimum amount of time on-line
required of each individual, there is a direct relationship between the times spent on-line working on
assignments, reviewing team member decisions, and the quality of these decisions and their accurate
placement in the decision forms. The computer program provides team member information on each
individual’s time on-line. It has been my observation that individuals who do not spend sufficient time in
the program do not have an in-depth understanding of what is happening to them and their competitors.
The team's Marketplace Results grade is computed from the Balanced Scorecard provided by the
Marketplace simulation program. The Balanced Scorecard value is calculated as the product of the
following seven performance criteria:
1. Financial performance. Net profit from current operations divided by total shares issued
2. Market performance. Market demand creation in two product markets adjusted by stock outs
3. Marketing effectiveness. A measure of the quality of your brands, advertisements and sales persons
4. Investments in the firm’s future. Current expenses that benefit the firm’s future divided by net revenues
5. Creation of wealth. Net equity divided by total stockholders equity
6. Asset management. Asset turnover times penalty for excess inventory
7. Manufacturing productivity. Reliability judgment times percent of operating capacity used in production and
performance of manufacturing personnel.
These criteria are described with further detail in the Balanced Scorecard screens on the web site.
Deceptive Advertising “Look out! Here comes the judge”
A very unusual provision of the Marketplace is the ability of your team to challenge a competitor's
advertising when you have evidence that it is deceptive. In the event that you wish to challenge a
competitor's advertising claims, you will need to document your complaint, in writing, to the team whose
advertising you are challenging, with a copy to the Federal Trade Commission. The challenge must
occur within the time specified in the Marketplace program. The challenged team must respond to the
plaintiff within the time specified in the Marketplace program also in writing, with a copy to the FTC.
The FTC will issue a ruling with application of any sanctions as specified in the on-line manual. This
information is specified, in full, in the on-line manual.
The Marketplace experience requires a heavy initial workload through the writing and presentation of
the Business Plan. Students report spending 8 or more hours per week for quarters three and four, and
during the preparation of the Business Plan. It is not likely that an individual would gain much from the
experience by spending less than 6 hours per week during this time period.
Following the completion of the Business Plan, the majority of students report spending 5 to 8 hours per
week for the remainder of the semester. The reduction in time is due to familiarity with the software,
game procedures, market, and having a plan of action that requires modification rather than initial
creation. The format of the course virtually eliminates lectures and replaces them with independent
work and executive briefings. If one assumes that a normal workload for a course is equal to 7.5 hours
per week (2.5 hours in class plus 5 hours of study out of class), then the workload for the Marketplace
is reasonable. It may seem less demanding than it is because it tends to be captivating. You will find
yourself thinking about it at odd times, e.g., walking to class, in your shower, or out on a date.
Time management will be vital to your success in participating in the Marketplace simulation. There is
more effort than any one person can accomplish at the level of excellence required to be number one in
your industry, so it is not necessarily wise for everyone to participate in all aspects of the business
throughout the term, too much time would be wasted. It will undoubtedly be necessary to divide the
workload. There are suggestions in the on-line manual on how to accomplish this division of
responsibility. Feel free to depart from these guidelines if individual preferences, experiences, or work-
loads would allow a more equitable, or optimal, allocation of tasks. Also, do not hesitate to reallocate
responsibility if conflicts arise during the semester, or you feel that the workload is unevenly distributed.
The president of your team should chair each of your executive sessions (board meetings and team
meetings), making sure that the discussion does not wander from the business at hand. Each team
meeting should begin with an agenda and a timetable. Meetings should probably not last more than 2
hours. Long drawn out meetings are not necessarily productive and often raise frustration levels.
Meetings should conclude with a set of tasks for each executive on your team. Be sure to review the
outcome of the actions you agree on at the start of your next meeting. Keep records of these meetings
in your binder.
To facilitate executive meetings, team members should prepare their work in advance. Each executive
should know the ins and outs, problems, and trade-offs of his or her area of responsibility. When the
executive committee meets as a whole, each member should have a plan of action to recommend to
the team. Executives should be prepared to discuss the company’s options thoroughly. Do be flexible
concerning the final decision of the executive team. This means that when final decisions are made, all
members of the team share equal responsibility for the outcome.
“Presentation skills can make the difference”
Report to the Board at Quarter 9 – Review of Team performance
For your 2nd Report to the Board, please include the following, at the very least:
1. Executive Summary.
2. Review of financial and market performance during the past year.
3. Review of business during the past year.
a. Comparison of actions taken against your business plan.
b. Discussion of departures from the business plan, their justification, and outcomes.
c. How is the current market different than it was in the early quarters?
i. Customers – Demand Analysis
ii. Competition – SWOT Analysis
iii. Your company’s strengths and weaknesses.
d. Strategy for the next year in business. (What will it take to get ahead or stay ahead?)
i. Target markets.
ii. Marketing mix, i.e., product, price, promotion, and distribution.
e. Research & development.
g. Market and financial objectives.
4. Financial information to support your reports.
The communication style throughout the reports should emphasize objectivity and candidness. The
Board Chair does not want you to gloss over problems or to present only the positive side of your
performance. The integrity of the report will be measured by your candor in evaluating the current
situation and how you plan to deal with it in the future.
Each quarter, i.e., decision period, your team will be analyzing data and making marketing decisions.
As an end result of all your deliberations, you will wrap-up your quarterly decisions electronically at the
Marketplace Web site by 11AM each Wednesday. Your three-ring binder, containing memoranda and
any other germane material, will be handed in when directed by the board chair, typically at the end of
the semester, but may be requested for preliminary review at any time.
Finish of Simulation
There are several alternatives in playing the last couple of quarters of the simulation. The one that you
are asked to implement is to assume that your company is going to continue in business. That is, your
company is trying to maximize its present value in anticipation of being sold off to interested outsiders
or to accomplish an IPO. Accordingly, your management team should continue to make production,
advertising, investment, and other decisions as if a third year of operations lies ahead. It is inadvisable
to play games within the context of the simulation. The Balanced Scorecard analysis takes these
issues into account and your final score is the cumulative scores of the last four (4) quarters completed.
Throughout the semester, please remember that this is a course where the pedagogy rests on learning
through discovery. The more intensive your effort, the greater will be your learning.
University Policy for Persons with Disabilities
Southwestern University is committed to assisting students with disabilities. Reasonable
accommodations may be made once a student has registered his/her disability and has the appropriate
documentation on file with the Office of Academic Services on the third floor of the Cullen Building.
Professors must be notified of the accommodation at least two weeks before the accommodation is
necessary or as soon as reasonably possible. For more information, contact Kimele Carter at
You must purchase a Marketplace certificate from the Marketplace web site and sign in at the website indicated below to
continue your registration in this course. You will need to make arrangements with the company for payment of the
registration fee. Each student shall advise me via Email when he/she has signed in to their company. You will need:
1. Pay by check or credit card ($50)
2. the game ID (To Be Provided by Instructor), SCM2007 – Last digits to be announced
3. the team number assigned to you by the instructor
4. the serial number from your certificate,
URL is : http://www.marketplace-simulation.com/college/announcing-global-competition.html
Additional individual sign up information will be provided by instructor.
Instructor may request interim evaluations if deemed necessary.
If this on-line manual test is not administered, component scores and percentages will be adjusted to a 470 point
maximum basis or these points used for evaluating other assignments initiated by the instructor.