Colorado Executive Development in Residence (CEDIR) Program Summer 2001
Business Strategy in the Internet Age
Instructor: Ramiro Montealegre [email protected], BUS 443, 303-492-0416
COURSE OVERVIEW
There is little doubt that the exploitation of the Internet and its associated technologies to enable electronic commerce will continue and probably accelerate throughout the world in the next decades. Recent dot com failures is a temporary phenomenon. When we come out of this recession, organizations ought to be able to be prepared to exploit Internet-based technologies for competitive advantage. And managers have to ensure that their companies are prepared to compete in the Internet age. Making fashionable investments without systematically analyzing needs and without understanding how to adopt these new technologies in accordance with their company’s situation is irresponsible.
This course will focus on an understanding of the skills, tools, business concepts, and strategic and entrepreneurial opportunities, as well as managerial and social issues that surround the global information infrastructure and the emergence of electronic commerce. The course centers on the management of information as a resource and on the identification of opportunities to exploit its potential for competitive advantage (as well as to avoid the potential problem of strategic jeopardy brought about by mismanaging the information resource). Thus, it is not a technical course about information technology or the Internet; rather, it addresses the question: why and how should the global information infrastructure be leveraged to shape and support strategic and entrepreneurial initiatives in the global competitive landscape.
The majority of the classes will be taught using the case method. Case studies are based on actual company situations that give students examples of real management decision opportunities. At the same time, each case study illustrates a set of issues dealing with the uses and impacts of information technology. Classes will primarily be discussions of the case study assigned for that day, and the students are expected to have read, though about, and prepared the case prior to class.
COURSE OUTLINE
Class 1. Monday, July 30
Effects of IT on strategy and competition Framing e-business market opportunities Prepare case: CNET 2000 (HBS case #9-800-284) Class 2. Tuesday, July 31
Managing in the physical and virtual worlds Prepare case: Dell Online (HBS case #9-598-116) Exploiting the virtual value chain
Class 3. Wednesday, August 1
E-business models Prepare case: Webvan: Groceries on the Internet (HBS case#9-500-052) The customer interface for e-business
Class 4. Thursday, August 2
Implementation Issues Prepare case: Staples.com (HBS case #9-800-305) Final reflection
ABOUT THE INSTRUCTOR
Ramiro Montealegre received his Doctorate in Business Administration from the Harvard Business School in the area of management information systems. His Master’s Degree in computer science is from Carleton University, Canada. He holds a Bachelor in Engineering degree from the Francisco Marroquin University, Guatemala. Currently, he is an Associate Professor of Information Systems at the University of Colorado, Boulder. He is regularly Invited Lecturer at Case Western Reserve University, Instituto de Centro America de Administracion de Empresas (INCAE) in Costa Rica, the Instituto Tecnologico y de Estudios Superiores de Monterrey in Mexico, Instituto de Altos Estudios Empresariales (IAE) in Argentina, and Instituto de Empresas and IESE Business School in Spain. In 1998 he received the “Joseph Frascona Excellence Award” the “1999 Graduate Professor of the Year Award,” and the “2000 MBA Professor of the Year Award” for outstanding teaching in the College of Business at the University of Colorado.
Dr. Montealegre’s research focuses on the interplay between new information technology, such as the Internet, and organization transformation in highly uncertain environments. He has been involved in studying projects of organizational change in the United States, Canada, Mexico, and the Central and South American regions. His research has been published in MIS Quarterly, Sloan Management Review, Journal of Management Information Systems, IEEE Transactions on Communications, Information & Management, Information Technology & People and other journals. In 1997, he received the MCB University Press' Award for the "Most Outstanding" paper published in the journal of Information Technology & People. In 1998, he received the "Best Paper" Award of the Organizational Communication and Information Systems (OCIS) Division of the Academy of Management. Class 1. July 30 - Monday
Prepare: CNET 2000
1. Do you agree with CNET’s decision to:
a) Avoid entering other vertical markets?
b) Avoid direct participation in online retailing?
c) Avoid licensing CNET’s reviews and articles to online retailers?
d) Increase ad spending to $100 million?
2. Why do you think CNET’s stock price declined in response to the announcement of its marketing strategy?
3. Do you think that the company did a good job running the CNET 2000 process? Why or why not?
4. In January 2000, CNET acquired the “shopping bot” website my Simon.com (an event that is not mentioned in the case). Is this acquisition consistent with the strategy articulated by the CNET 2000 team? Do you think this was a good move? Class 7. July 31 - Tuesday
Prepare: Dell Online
ASSIGNMENT QUESTIONS:
1. What are the key success factors of Dell’s Direct Model? How does Dell Online fit within this model?
2. What value does Dell Online deliver for the various Dell’s stakeholders?
3. Does Dell Online provide a sustainable advantage for Dell?
4. What are the next steps that Dell should undertake in order to be capable of doing “at least 50% of [its] business over the Web the next few years”?
5. What general lesson can we learn from Dell? What other type of business could be designed like this one? Class 3. August 1 - Wednesday
Prepare: Webvan: Groceries on the Internet
For each of the following companies:
Peapod Streamline HomeRuns NetGrocer Alberston online HomeGrocer Priceline’s WebHouse and Webvan
1. Who is the valued customer?
2. What is the value proposition?
3. What is the value chain grocery model (Concentrate on the cost and scalability of the supply chain).
4. What indicators would you use to measure the relative success of these companies? Class 4. August 2 - Thursday
Prepare: Staple.com
ASSIGNMENT QUESTIONS:
1. What is Staple’s competitive advantage in the online markespace?
2. Do you agree with Staples.com’s growth strategy and timing? Why? Are they following a “Get Big Fast” strategy? Would you pursue wallet share or market share as the first priority? Or like Staple.com, would you pursue both with vigor?
3. Do you think that Staples.com should expand into the SOHO services market? If so, should it ally with external service providers or create services internally?
4. What should Staples.com’s pricing strategy be, relative to the competition? What should their pricing strategy be relative to Staples’ catalog and Staples’ retail stores?
5. Do you agree with the high level of organizational and operational integration between Staples.com and Staples Inc.? What are the risks and/or disadvantages associated with the dotcom division being so closely allied to the parent? Please request the following cases from the Harvard Business School (www.hbsp.harvard.edu)
CNET 2000 (HBS case #9-800-284) Dell Online (HBS case #9-598-116) Webvan: Groceries on the Internet (HBS case#9-500-052) Staples.com (HBS case #9-800-305)