The document provides an overview of a strategic management course. It includes sections on the instructor, assignments, course topics like industry structure and firm resources, and the grading breakdown. Team assignments include case analyses and a final project. The course aims to help students analyze strategies and make things happen in their careers.

1. Please take handouts at the front of the room & Use Name Cards
1 Strategic Management

2.  Introduction & Overview
 Instructor
 Assignments
 What are the most critical factors
influencing firm performance?
 Video Case: Why your PC isn’t a Xerox?
 RFH Case on Monday
2 Strategic Management

3. Consulting:
 Strategy, Organization & Management
 M&A: Valuation of human assets for tax purposes
Teaching (Wisconsin, Wash U, Emory, Wharton, HEC Paris, UCLA):
 Strategy (19 yrs Undergrad through Executives)
 Executive Education programs (M&A, Strategy)
Research:
 Competitive Advantage
 M&A of human asset intensive firms
 Strategy in uncertain & high velocity environments
(Real options, creativity, forecasting)
3 Strategic Management

4. 4 Strategic Management

5. Group Level (50%)
 (20%) 2 case analyses (6 ppt slides)
 (30%) Final project (≤15 pgs)
Individual Level (50%)
 (20%) 2 quizzes (lowest counts 5%)
 (20%) Participation
 (10%) Electronic Polls (9 of 13)
Next Steps
 Teams of 5-6 (w/in sec) – sign up form
 Team case writeup preferences (ranked)
 Cases, Readings, Polls
5 Strategic Management

6.  What determines a company’s
profitability?
 Why do some companies
succeed, while others fail?
 How can we distinguish between
a good strategy and a bad one?
(Rumelt, 2011, McKinsey Quarterly)
6 Strategic Management

7. 9 Strategic Management

8. External factors: Internal factors:
 Number & behavior of  Resources controlled by
competitors the firm
(e.g., reputation, proprieta
 Barriers to entry
ry technology)
 Industry-wide technology
 Ability to innovate/change
 Macroeconomic cycles
 Incentives/control systems
 Social/regulatory/political
 Leadership
environment
 Customers & suppliers  Organization
 Culture
 Substitute products
 Systems/processes
What might the firm do? What can the firm do?
Opportunities & Threats Strengths & Weaknesses
10 Strategic Management

9.  What use is a “laundry list” of factors?
 How important are each of these factors?
 How does their importance vary according to
each company’s situation?
 When & how can companies manipulate
these factors to their advantage?
11 Strategic Management

10. 12 Strategic Management

11. 13 Strategic Management

12. Decomposition of Variation in Profit Rates
for Business Units of Diversified Companies
Corporate
parent effect
4%
Business-
unit effect Unexplained
32% variation
43%
Year effect
2% Industry effect
19%
Source: McGahan & Porter (1997 Strategic Management Journal)
14 Strategic Management

13. 15 Strategic Management

14. 1. Analyze industry structure & external trends to predict
prospects for a strategy;
2. Assess a firm’s resources for their potential to generate
a competitive advantage;
3. Evaluate multi-business strategies;
4. Develop M&A/alliance strategies to access capabilities;
5. Make decisions in uncertain & turbulent environments;
6. Apply tools learned across the curriculum.
16 Strategic Management

15.  Diagnosis of the nature of the challenge
simplifies the often overwhelming complexity
by identifying the most critical factors.
 A Guiding Policy defines the overall approach
chosen to cope with the obstacles identified in
the diagnosis.
 Coherent Actions are coordinated Vision
steps to support achieving the
Mission
guiding policy.
Values
“Strategy”
* Rumelt, R. 2011, The Perils of Bad Strategy. McKinsey Quarterly
17 Strategic Management

16. Internal Analysis (SW) External Analysis (OT)
• Value chain • PESTEL
• VRINE • 5 Forces
• Corporate value • Game theory
Strategy
Arenas
Staging Economic
Vehicles
Pacing Logic
Differentiators
Implementation Strategy
• Business plan People
Symbols
Structure
• Resource allocation Rewards Processes
• Organizational design
18 Strategic Management

17.  Some people make things happen.
 Some people watch things happen.
 Some people wonder what happened.
Goal of this Course:
 Make sure you’re not in the last group.
 Provide tools to help you join the 1st group.
19 Strategic Management

18. Left Hemisphere Right Hemisphere
 Linear, sequential, logic  Holistic, intuitive, non-
al thought process linear thought process
 Symbolic representation  Concrete representation
(words & numbers) (e.g., hands on).
 Reality-based  Imagination-oriented
orientation processing
 Quantitative  Qualitative
20 Strategic Management

19. https://buswisc.qualtrics.com/SE/?SID=SV_8dWKspcjUm3lpdi
22 Strategic Management

20. 24 Strategic Management

21.  Teams
 Members
 Case Schedule
 Project proposal (10/3)
Company, data, analysis, types of
recommendations
 No class Monday – Team meetings?
 Seating chart (team exercise next class)
 Forum
 Palisade Decision Tools (@Risk, Precision
Tree, etc.). Install before 9/19
25 Strategic Management

22. 26 Strategic Management

23. Internal Analysis (SW) External Analysis (OT)
• Value chain • PESTEL
• VRINE • 5 Forces
• Corporate value • Game theory
Strategy
Arenas
Staging Economic
Vehicles
Pacing Logic
Differentiators
Implementation Strategy
• Business plan People
Symbols
Structure
• Resource allocation Rewards Processes
• Organizational design
27 Strategic Management

24.  What is Google’s strategy?
 In the Mobile Arena?
 Corporate (across businesses)?
 How might Motorola add value to Google
(over the $12.5B paid)?
 What are the biggest risks to Google?
 How will Google do in the deal? Buy/Hold/Sell?
 What should Google do next:
 To realize the potential value?
 To minimize the risks?
28 Strategic Management

25. 29 Strategic Management

26. 70%
60%
60%
50%
40%
30%
30%
20%
9%
10%
0%
Bad Move (Sell) No Impact (Hold) Good Move (Buy)
30 Strategic Management

27. 80%
76%
70%
60%
50%
40%
30%
20%
11%
8%
10% 4%
0%
0%
Vertical Integration
Power Over Partners hwart OS EntrantsReduce OS Rivalry
T Other
31 Strategic Management

28. 70%
67%
60%
50%
40%
30%
20% 16%
9%
10%
3% 5%
0%
Customers go Anti-trust Over bid Can't integrate Other
to MS
32 Strategic Management

29. Low Cost Uniqueness
Broad Cost Differentiation
Market Leadership
Narrow Focused Low Focused
Market Cost Differentiation
33 Strategic Management

30. Price
Your Price } Advantage
Industry
avg. cost Industry
avg. price
Advantage { Your cost
Cost
Cost or Product Design or
Efficiency Customer Intimacy
34 Strategic Management

31. Arenas
Staging Economic
& Logic Vehicles
Pacing
Differentiators
35 Strategic Management

32.  Strategies for market position:
 Operational Efficiency: Deliver products or
services at the lowest cost
 Product/Service Design: Offer the most
innovative products or services.
 Customer Intimacy: Nurture close customer
relationships.
 Profitability: How can these strategies drive a
wedge between costs and price?
 Implications for being “stuck in the middle”?
Source: Treacy, M. and Wiersema, F. 1995. The Discipline of Market Leaders
36 Strategic Management

33. Strategy
People Structure
Symbols
Rewards Processes
37 Strategic Management