Strategy 5700 - Strategic Management
Fall 2017
INSTRUCTOR: Lyda Bigelow, Associate Professor of Entrepreneurship & Strategy
Office: SFEBB 7213 Tel.: (801) 585 3471
Email: [email protected]
Office Hours: Monday 2-3pm and by appointment
RESOURCES: Required Text Strategic Management and Competitive Advantage:
Concepts and Cases; Barney and Hesterly, 5th edition.
Other required material available on Canvas.
COURSE DESCRIPTION
The central question of this course, and of much of strategy research over the past thirty years is “Why do some firms outperform others?” We will spend the term learning strategy theory and applying it to real business situations presented in cases and classroom exercises. The class will explore questions such as “How can a company as large as Wal-Mart continue to grow?”; “Who are Google’s competitors?”; “How can firms use the challenges of global warming to their advantage?”; “Why don’t all firms outsource customer service to lower- cost countries?”; “Do acquisitions ever create value for the acquirer or does all the money inevitably go to the shareholders of the company that sells out?” At the end of the term, students will be able to formulate answers to these types of questions using the tools and frameworks covered in the course.
Strategy is an integrative discipline. That means students are required to use the principles, analytic tools, and communication skills learned in prerequisite courses WRTG 2010/MGT 3810, MKT 3010, FIN 3040, and MGT 3680 in the class discussions and projects. All students MUST have completed the prerequisite courses to be enrolled in STRAT 5700. If you have not completed the prerequisites, drop the course and re-enroll once you have completed them.
This course is intended to introduce students to the basics of the how firms choose and implement their strategy. Strategic management is concerned with how a firm sets its direction, chooses its business activities, and establishes and defends its position in a competitive market. This course will introduce you to concepts and tools that will help you to develop an understanding of how strategies are formed and managed, and how
1 competitive advantage might be created and sustained. Course topics include industry analysis, firm analysis, business level strategies, vertical integration, diversification, strategic alliances, and mergers and acquisitions. The course carries a substantial reading and writing load. Students are expected to actively participate in class and case discussions.
This course adopts a perspective and maintains that strategy is fundamental to not just the chief executive, but to managers at all levels of the firm. As a result, it provides you with the opportunity to analyze business decisions from the perspective of the general manager. This approach is also valuable for entrepreneurs, and would-be-entrepreneurs, who are often responsible for a wide-range of decisions. When those decisions are connected to strategy, the venture has a greater likelihood of surviving. Additionally, this course allows you to practice deploying strategic tools and gives you the opportunity to make mistakes in a relatively cost-free environment. Strategy can be uncomfortable because the questions and answers are often ambiguous and the solutions unclear. However, there are frequently better alternatives that can be reached through careful understanding of the tools and frameworks used in this course.
COURSE OBJECTIVES
1. Identify and analyze business unit and corporate strategies using the tools provided by the instructor and the textbook.
2. Assess the past performance and likelihood of future success of real strategies.
3. Formulate recommendations for meeting competitive and organizational challenges managers face.
4. Communicate recommendations effectively, succinctly, and persuasively both orally and in writing; and
5. Evaluate team members effectively and work in a team.
COURSE FORMAT
This is a case/discussion method course. The primary instruction vehicle will be the analysis of selected management, strategy, and policy cases. Short lectures and discussions of assigned readings will be used to complement the discussion of the case material. In addition, readings in the popular business press will be used to supplement the conceptual readings and formal case material. This material will be used primarily to understand the practical application of the competitive strategy frameworks.
Students often feel uncomfortable in this course because of the lack of "precise" answers. We will, however, examine real problems, messy problems, and problems without "optimal" solutions. Tools are important, but are inadequate by themselves and the ever-changing conditions of today's business world quickly render yesterday's analysis inappropriate for tomorrow. Consequently, it is critical to develop skills in both the "art" and the "science" of strategy.
2 COURSE EVALUATION
1. Case analyses 20%
2. Final Project (team assignment) 15% Written report 10% Presentation 5% 3. Exams (2) 30% Exam 1 (15%) Exam 2 (15%) 4. Quizzes 15% 5. Class participation (includes case presentation) 20%
100%
The David Eccles School of Business has set guidelines for average class grades for the different levels of courses. This class is a 5000-5990 level course with an expected class average range of 2.8-3.2. Students should expect the class average to fall within this range.
Assignments Cases provide important windows into the real problems that firms face. The use of cases provides students the opportunity to evaluate and make recommendations in an environment that is "safer" than having to make choices that have immediate and real business implications.
1. Case Analyses a. Individual, a written strategic analysis is required for three cases. (Cases are indicated in bold, in the schedule.) You can choose which cases you’d like to complete, however you cannot submit a case analysis for the case that your team presents in class (see Participation). The case analysis should answer the question assigned for the particular case and utilize theory and concepts from the relevant chapter (chapter indicated in parentheses after the case). Case questions are available at the class website. Please respond to only the question indicated for case analysis – limitations on the length of the assignment will not let you do justice to all questions. The other listed questions are designed to help the team who will be presenting the case in class. Case analyses are due at the beginning of the session in which the relevant case is discussed.
These assignments are limited to 300 words and additional discussion will not be reviewed. You must provide quantitative analysis of data found in the case in order to receive full credit. Becoming proficient with excel and demonstrating that skill is critical to success in the classroom and beyond. You may attach as many quantitative exhibits as needed. The word limit will help you focus both your thinking and writing.
3 Turning in assignments The assignments must be handed in at the beginning of class (i.e. the beginning of the session in which the relevant case is discussed). You must provide a hard copy and it should be identified with your name, date, course name and section number. If for some reason you are unable to attend class the day an assignment is required (e.g., illness, business trip), you may submit it before class via email. Such submissions are still due before the start of class time. Late assignments will not be accepted in fairness to other students.
Evaluation Exceptional analyses that address the assigned questions, support assertions, show substantial insight, integrate concepts from the text and attempt to draw conclusions regarding the implications of the issue will receive 5 points. Analyses/commentaries that make general comments, generally support the assertions, but do not fully draw conclusions or insights regarding the implications of the issue will receive 4 points. 3 points will be awarded to underdeveloped analyses/commentaries that make statements generally, but do not support positions or draw any conclusions. Zero points will be awarded to bullet lists that do not include support, evidence or rationale for the position.
2. Final Project
The final strategic analysis project will be conducted in teams of 5-6 students. Teams are assigned randomly by the professor and the team list will be posted on Canvas. Team communication and management is the responsibility of the members. One of the most important developments in the workplace today is the idea of self-managed teams. The final project (and case presentation) is designed to encourage students to practice constructive self-management techniques.
You will be asked to evaluate your teammates upon completion of the final project. Based on these evaluations, grades for individuals may be affected upwards by a maximum of ½ a letter grade and downwards by a full letter grade. Choose and manage your teams with this in mind.
Each team will be assigned either Tesla (Electric cars, founded 2003) or Procter & Gamble (Consumer goods, founded 1837). All teams will develop both a written analysis and a brief oral presentation. Details on the final project will be posted on canvas. Fundamentally, the team project allows you to use both the "art" and "science" of strategic management by developing your research skills in competitive analysis, applying the strategic tools learned in class, and using your imagination and judgment to formulate the recommendations and implementation plan. a) Written project
The written analysis should be no more than 10 pages, double-spaced, not including exhibits. The paper should describe and evaluate the firm's current position, and include an analysis of the relevant industry issues. The paper should conclude with recommendations for both future strategy and implementation. Please see Canvas for details. It is important to evaluate your company by using theory and concepts from each chapter. Papers are
4 required to be fully referenced in the body of the paper and with a complete bibliography of sources. A lack of appropriate referencing is considered plagiarism.
b) Final presentation
Presentations will be conducted at the end of the semester in class. Each presentation should last about 10 minutes, followed by 5 minutes of Q&A. You will be assigned a strategic issue for your firm. (Details will be available on Canvas). Order of presentation will be determined by a random draw of dates. Presentation style and creativity as well as efforts to engage the participants will be rewarded.
3. Exams
There will be two exams that will cover the general strategic frameworks discussed in class. Cases and other material discussed in class (e.g., current news articles) will also be included in the exam. The format of the exam will be multiple choice and short answer questions. Exams must be taken at the times indicated in the class schedule.
4. Quizzes
Quizzes are a great way to tell if you are keeping up with the material. I will give 3 quizzes prior to the midterm and 3 quizzes between the midterm and the final. These are unannounced and there are no make-ups, since we will go over the answers in class. Given that there may be times when students simply can’t attend class I will only count your top two scores per quarter towards your final grade.
5. Class participation
There are two components to your class participation grade: A. your individual participation and B. your team assignment to lead class discussion through a case or topic.
A. Individual: An important aspect of learning by the case method is class discussion of the issues, problems, and solutions. This approach, however, depends on students being thoroughly familiar with the assigned readings. The quality of individual preparedness in case discussions is important. Although it can be difficult, students should anticipate being called on at random, and attendance at all classes is expected. If you are not present, you cannot participate.
Criteria which will be used to judge case preparedness include:
* Are the discussion points relevant to the case? * Do the points go beyond recitation of the case facts? * Is there evidence of analysis to back up statements? * Are the implications of facts clearly drawn and stated? * Are comments linked to those of others? * Do comments further the class understanding of issues discussed? * Do comments raise interesting questions? * In discussion, do the comments fit in the class context?
5 * Does the analysis make use of models and techniques from the readings or lectures? * Are comments made in a respectful, professional, and constructive manner?
Students should not expect to receive full points for participation without preparation. Simply being present does not warrant full credit, nor does frequent participation that does not advance the learning of the class. B. Team Assignment: Each team will be assigned one case (indicated in bold in the schedule), during the course of the semester. The team assignment involves two components i) leading and managing class discussion for the relevant case session (20-30 minutes) and ii) a powerpoint slide deck for the particular case. The team presentation and class discussion should address the individual assignment and class discussion questions posted for the case. The team is responsible for stimulating class discussion. Therefore credit will be given for raising issues and questions that go beyond what is obvious and for creativity in involving the class. The team will submit a set of slides (powerpoint) for evaluation to me via email by midnight prior to class.
Five Rules of Class Etiquette 1. EVERYONE is required to follow professional business protocols as follows: 1) all emails and texts are to be responded to within 24 hours of receipt, 2) all email are to be brief, well thought out, error free, capitalized, punctuated, and organized, 3) all class assignments are to follow email protocols.
2. EVERYONE is required to make all meetings and appointments using electronic calendars with locations, dial-in details, and agenda for the meetings clearly stated in meeting invitations.
3. EVERYONE is expected to spend at least five hours per week outside of class preparing for our three hours in class and be prepared to answers questions when randomly selected.
4. EVERYONE must support their ideas, opinions, and views with facts, data, research, and/or references. You are NOT an authority and therefore CANNOT be the primary source of your opinions.
5. EVERYONE is required to treat teammates with consideration throughout the semester. Make sure to follow these basic rules with one another.
Academic standards All students are expected to pursue the highest standards of academic honesty. Any assignments not meeting such standards are subject to failure. The Student Code (University Regulations - Chapter X, Article XI of the Student Code) defines academic dishonesty as "including, but not limited to, all forms of cheating, plagiarism, research misconduct, misrepresenting one's work, and/or inappropriately collaborating." Plagiarism and misrepresentation specifically refer to the copying of another person's material, even with modification, that is not fully referenced. Specific details of each of these issues are discussed in the University of Utah Class Schedule.
DESB Use of Electronic Devices Policy
6 Use of any and all electronic devices (e.g. pagers, cell phones, language translators, laptops, tablets, calculators, etc.) is forbidden during an exam unless otherwise specifically authorized by the instructor. A student who uses an unauthorized device may be subject to penalties for academic misconduct.
Student Absences Excused Absences: Students absent from class to participate in officially sanctioned University activities (e.g., band, debate, student government, intercollegiate athletics) or religious obligation, or with instructor’s approval, shall be permitted to make up both assignments and examinations. The University expects its departments and programs that take students away from class meetings to schedule such events in a way that will minimize hindrance of the student’s orderly completion of course requirements. Such units must provide a written statement to the students describing the activity and stating as precisely as possible the dates of the required absence. The involved students must deliver this documentation to their instructors, preferably before the absence but in no event later than one week after the absence.
If you will not be in class for any other reason, it is your responsibility to email the professor prior to class, explaining the reason for the absence.
Americans with Disabilities Act: The University of Utah, David Eccles School of Business seeks to provide equal access to its programs, services and activities for people with disabilities. If you will need accommodations in this class, reasonable prior notice needs to be given to the instructor and to the Center for Disability Services, http://disability.utah.edu/, 160 Olpin Union Building, 581-5020 (V/TDD) to make arrangements for accommodations. All written information in this course can be made available in alternative format with prior notification to the Center for Disability Services.
David Eccles School of Business -- Statement of Professional and Ethical Conduct
Because of the importance of professional and ethical behavior in business, and its emphasis in our program, professional or academic misconduct is not tolerated in the David Eccles School of Business. Students are expected to adhere to the standards of behavior outlined in the University of Utah Code of Student Rights and Responsibilities (Policy 6-400). Students engaging in behavioral misconduct could be subject to suspension or dismissal from the University. Students involved in any form of academic misconduct, including but not limited to cheating on tests, plagiarism and collusion may, at the instructor's discretion, receive a failing grade in the course, examination, or academic assignment. In addition to or instead of this sanction, the instructor may refer the case to the Student Behavior Committee for hearing. If the instructor chooses not to do so, the Associate Dean for Academic Affairs, after appropriate investigation, may do so along with a recommendation to dismiss the student from the Business School. If, after hearing the evidence, the Committee determines that the student in question is guilty of the misconduct charged, the Committee may impose sanctions in addition to those taken by the professor. If the academic dishonesty is not proven, the instructor must rescind any sanctions imposed and will be required to evaluate the student's performance with the assumption that there has been no misconduct. The School will treat the student likewise. If a student suspects another student of academic misconduct, he/she should refer the incident to the instructor, the appropriate department, the Associate Dean
7 for Academic Affairs, or the Student Behavior Committee, administered by the Associate Dean of Students, 270 Union.
STRAT 5700 Policy on Academic Dishonesty
In accordance with the DESB standards for professional and ethical conduct, cheating on exams, quizzes, and assignments in STRAT 5700 is unacceptable. Any student caught cheating in STRAT 5700 will receive a 0% on that assignment, quiz or exam for a first offense. Cheating on a quiz also will result in the student being evicted from class for that class period. If a student cheats on any other assignment, quiz, or exam, he/she will receive a failing grade for the course. This grade will not qualify as a score that can be dropped. His/her name will be added to the University of Utah’s academic dishonesty database, and he/she will be subject to further sanctions by the DESB. Cheating includes, but is not limited to:
1. copying or attempting to copy another student’s answers;
2. plagiarism;
3. turning in someone else’s work and representing it as your own; and
4. Comparing team project answers to another team’s answers.
In order to avoid the appearance of cheating, it is your responsibility to keep your eyes on your own paper, remove all materials from the top of your desk, keep your exam papers flat on the desk in front of you, and put all electronic devices away. NOTE: I use turnitin for plagiarism checking on all assignments – including the essays for the team projects. Since this is not the first term that I have used the service, turnitin has a data base that includes case write ups from previous terms. All case write ups, and essays automatically are compared to student work turned in in previous terms and checked for originality.
David Eccles School of Business -- Statement of Grading Policy
Grading provides feedback to students on how well they have mastered the content and learning objectives of a particular course to allow students to capitalize on strengths and work to improve weaknesses through future courses of action. The DESB grading policy is intended to ensure grades offer reliable feedback regarding student performance, and to ensure fairness and consistency across the School. The faculty member is responsible for arriving at a grade for each student that the faculty member believes appropriately reflects the student's mastery of the course material and learning objectives. The faculty member will then consider the class' overall performance in terms of School guidelines. These guidelines are provided to ensure that grading, on average for the School as a whole, is sustained at a reasonable level over time. The guidelines are as follows:
COURSE LEVEL GUIDELINE
1000-2000 2.4-2.8
3000-3990 2.6-3.0
4000-5990 2.8-3.2
8 6000-6990 3.1-3.5
If students have a concern about their grade in a particular course, they should consider whether it reflects an accurate evaluation of their mastery of the course material and learning objectives, in terms of the above descriptors. If they need clarification of the instructor's evaluation, they should meet with the instructor to obtain additional information and feedback. If after doing so, they believe their grade was arrived at in an inappropriate manner, they may pursue an appeal through the School's appeals process as described in Section 5.15 of the University of Utah Code of Student Rights and Responsibilities (Policy 6-400).
5.32 DESB GRADING POLICY
Generally, grades in the School should be interpreted as follows:
A - Excellent Performance/Superior Achievement
An A student is one who understands the content and learning objectives thoroughly, completely and accurately, and can demonstrate that understanding in a number of ways. Such a student will have done exceptionally well on assignments, exams and class projects, and will have participated extensively in class discussion by asking good questions and contributing constructive thoughts. An A student will also have demonstrated a strong interest in the learning process by contributing to a constructive class environment and to the learning success of his or her fellow students.
B - Good Performance/Substantial Achievement
A B student is one who has demonstrated a relatively high level of mastery of the content and learning objectives of the course. A B student will have done very well on assignments, exams and class projects, and will have participated constructively in class discussion. A B student will have demonstrated a positive attitude toward the learning process and made a positive contribution to the learning environment of the class.
C - Standard Performance and Achievement
A C student will have demonstrated a reasonable level of mastery of the content and learning objectives of the course. A C student will have completed assignments and demonstrated a reasonable grasp of requisite knowledge on exams and class projects. A C student will have demonstrated a reasonable level of commitment to the learning process and made a positive contribution to the learning environment of the class.
D - Substandard Performance/Marginal Achievement
A D student will have demonstrated some level of mastery of the content and learning objectives of the course, but less than that desired to serve as a basis for future endeavor. A D student will not have completed all assignments in a satisfactory manner, nor demonstrated more than a partial grasp of requisite knowledge on exams and class projects. A D student will have demonstrated only some commitment to the learning process and made only a marginal contribution to the learning environment of the class.
E - Unsatisfactory Performance and Achievement
9 An E student has failed to demonstrate any significant mastery of the content and learning objectives of the course. An E student will not have completed all assignments in a satisfactory manner, nor demonstrated any significant grasp of the requisite knowledge on exams and class projects. An E student will have failed to demonstrate any significant level of commitment to the learning process, nor made any positive contribution to the learning environment of the class.
The most important aspect of grading from the student's standpoint is to view is as an opportunity to understand where his or her strengths and weaknesses lie so that he or she can capitalize on the strengths and work to improve the weaknesses through future courses of action.
2. To provide a system of measurement to distinguish among students for various evaluative purposes. Internal to the University, students are allowed to progress based on grades. For example, admission to professional programs and graduate programs use grades as a major (but not the only) input. In addition, scholarships and other awards are based largely on grades. External to the University, persons recruiting and hiring students consider grades an important factor in their evaluation process.1
DESB Grading Policy
A grading policy is needed for the following reasons:
1. To ensure fairness and consistency across the School.
2. To ensure that students can use grades as reliable feedback of their actual performance and understanding of course material.
3. To ensure that grades are based on actual learning and achievement, so that persons who base decisions on them have confidence that they are reliable for that purpose.
The School's policy is as follows:
1. Faculty are responsible for developing an appropriate system of evaluation, feedback and grading for each course. That system is described in the course syllabus.
2. Faculty are responsible for carrying out the system described in the syllabus in an accurate and effective manner. In particular, faculty must design evaluative processes (e.g., assignments, exams) that are capable of distinguishing clearly among students who have different levels of mastery in the course.
3. Faculty are responsible for arriving at a grade for each student that the faculty member believes appropriately indicates the student's mastery of the course material and learning objectives. Once that is done, the faculty member will consider the class' overall performance in terms of School guidelines. If the class mean falls outside the guidelines, the faculty member will explain the nature of the deviation in a memorandum to the chair of the department responsible for the course. These guidelines are provided to ensure that grading, on average for the School as a whole, is sustained at a reasonable level over time.
10 In accordance with University policy and applicable regulations, grades are not made available to persons or organizations outside the University without the student's written consent.
About the Professor Professor Bigelow is Associate Professor of Entrepreneurship and Strategy and a David Eccles Faculty Fellow. She received her MBA from Wharton and Ph.D. from the University of California, Berkeley. Prior to pursuing doctoral studies, she worked in investment banking for Kidder Peabody and Smith Barney in the corporate finance area. Her research focuses on using transaction cost economics to assess the impact of efficient boundary of the firm decisions (e.g. make-or buy decisions, strategic alliances) on firm performance. Her most recent work has investigated the trade-offs of managing efficient sourcing arrangements under conditions of rapid technological innovation. She also has research interests in industry evolution, entrepreneurship, and organizational change. Her work has appeared in the Strategic Management Journal, Management Science, and the Journal of Economic and Organizational Behavior and she has won Best Paper awards from the Entrepreneurship Division and from the Business Policy and Strategy Division of the Academy of Management. She is a reviewer for Administrative Science Quarterly, Organization Science and other journals and is a member of the editorial boards of the International Journal of Strategic Change Management and the Strategic Management Journal. She was named to the Advisory Board of the Women Tech Council in 2009. Prior to joining the faculty of the David Eccles School of Business at the University of Utah, she was a strategy professor at the John M. Olin School of Business, Washington University in St. Louis where she was awarded the Reid Teaching award twice.
SCHEDULE OF READINGS, CASES, AND ASSIGNMENTS
Aug 21 Course Overview – Introduction to Strategic Management and the Strategic Management Process
Reading: Course Syllabus
Aug 23 Strategic Management Process Reading: Chapter 1: Strategy and the Strategic Management Process, Zenger (HBR)
Analyzing and writing a case study.
Aug 28 External environment Reading: Chapter 2: Evaluating a firm’s external environment
Aug 30 External environment Reading: Chapter 2: Evaluating a firm’s external environment (continued) Zero to One (excerpt), Christensen (HBR) Team List Posted
11
Sept 4 NO CLASS: Labor Day
Sept 6 External capabilities Reading: Chapter 2: Evaluating a firm’s external environment (continued) Case: Bally’s (See Canvas) (Chapter 2)
Sept 11 Internal capabilities Reading: Chapter 3: Evaluating a firm’s internal capabilities
Choice of Final Project Company Due. Final Project Guidelines.
Sept 13 Internal capabilities Reading: Chapter 3: Evaluating a firm’s internal capabilities (continued)
Case: Driverless Cars (Two teams present) (Chapters 2 & 3)
Sept 18 Business Level Strategy
Reading: Chapter 4: Cost Leadership
Sept 20 Business Level Strategy
Reading: Chapter 4: Cost Leadership Case: 2-1 AirAsia X (Chapter 4)
Sept 25 Business Level Strategy
Reading: Chapter 5: Product Differentiation
Sept 27 Business Level Strategy Reading: Chapter 5: Product Differentiation Case: The Levi’s Personal Pair Proposal (Chapter 5)
Oct 2 Business Level Strategy Review
Oct 4 Mid-Term Exam
12
Oct 9 & 11 NO CLASS-Fall Break
Oct 16 Corporate Level Strategy (No class for Sec 2)
Mid-Term Exams Returned Reading: Chapter 6: Vertical Integration
Oct 18 Corporate Level Strategy: Vertical Integration
Reading: Chapter 6: Vertical Integration
Oct 23 Corporate Diversification
Reading: Chapter 6: Vertical Integration
Chapter 7: Corporate Diversification
Case: eBay: Customer Support Outsourcing (Chapter 6)
Oct 25 Corporate Diversification
Reading: Chapter 7: Corporate Diversification
Oct 30 NO CLASS
Nov 1 Implementing corporate diversification Reading: Chapter 8: Organizing to implement corporate diversification Case: GE (Chapter 7) On Canvas
Nov 6 Implementing corporate diversification Reading: Chapter 8: Organizing to implement corporate diversification Best Companies to Work For (Canvas)
Nov 8 Strategic Alliances Reading: Chapter 9: Strategic alliances
13 Nov 13 Strategic alliances Reading: Chapter 9: Strategic alliances Case: Ben & Jerry’s – Japan (See Canvas) (Chapter 9) Nov 15 Mergers and Acquisitions Reading: Chapter 10: Mergers and Acquisitions
Nov 20 Mergers and Acquisitions Reading: Chapter 10: Mergers and Acquisitions FINAL PAPERS DUE
Nov 22 NO CLASS – Thanksgiving Nov 27 Mergers and Acquisitions
Case: The Activision Blizzard Merger (Chapter 10)
Nov 29 Team presentations Dec 4 Team presentations Dec 6 Team presentations & Review
Final Exam: Tuesday Dec 12th: 10:30 a.m. – 12:30 p.m.
14