University of Southern California Marshall School of Business BUAD 497: STRATEGIC MANAGEMENT FALL 2011

Section 15092R (T,Th: 8:00 9: 50 am, ACC 201) Section 15096R (T,Th: 10:00 11: 50 am ACC 201) Section 15102R (T,Th: 2:00 3: 50 pm ACC 201) Professor: Office: Phone: Fax: Email: Judith F. Blumenthal, Ph.D. Bridge 307D (213) 740-0734 (213) 740-3582 judith.blumenthal@marshall.usc.edu Office Hours: Prerequisites: Tuesdays, 1:10-1:50 p.m. and by appointment Successful completion of all core business requirements

COURSE DESCRIPTION
This course introduces the concepts and tools of strategy formulation and competitive analysis. You will learn about why some firms survive and prosper while others do not, and you will develop critical analysis and communication skills necessary to create and implement firm strategy. The course focuses on the information, analyses, organizational processes, and skills and business judgment managers must use to craft strategies, position their businesses and assets, and define firm boundaries, so as to maximize long-term profits in the face of uncertainty and competition. This course is also designed to develop among participants the general management perspective, often also called the general manager's point of view. This view is critical because fundamental strategic business decisions can only be effectively made by viewing a firm holistically, and over the long term. These decisions typically include the determination of organizational purpose, the pursuit of specific opportunities, and the creation of competitive advantage, the allocation of critical resources, and the choice of competitive strategies. This is an integrative course in two respects. First, it takes a broad view of the environment that includes customers, technology, economics, capital markets, competitors, special interest groups, and government. Thus it draws together ideas from other functional/discipline-based courses. Second, the course takes the perspective of the firm as a whole and examines how policies in each functional area can be integrated into an overall company strategy. A major objective of this course is to acquaint you with a body of analytical tools to aid strategic decision-making, taking into account the various factors mentioned above. In addition, major emphasis is placed on action and implementation, not just on analysis. You will have an opportunity to observe general managers in action, to develop skills in setting strategic priorities, and prepare integrated action plans. Since the course calls on you to integrate concepts of all other courses from the perspective of the general manager, it should also help you examine your own interests and capabilities for the job. Because the success of this course depends heavily on students active participation and involvement, I will expect you to be present and well prepared, and to engage in respectful discussion and debate throughout the semester.

COURSE MATERIALS
Text: Readings/ Cases:

Additional Readings:

Carpenter, M.A. and W.G. Sanders. Strategic Management: A Dynamic Perspective Concepts, Upper Saddle River, N.J.: Pearson-Prentice Hall, 2nd edition, 2009. (CS) Most readings and cases for this course are available in a course reader from the University Book Store.(CP). A few readings are available on the university electronic course reserves (ARES), which you can find though the libraries link on Blackboard. Please refer to Appendix A for list of all assigned readings and cases. Additional readings may be added during the semester. They may be available for purchase at the bookstore, electronically through the USC electronic reserve system (ARES), or on Blackboard (BB).

COURSE COMMUNICATION
NOTE: BUAD 497 is a core course that is taught by several instructors. Policies regarding assignments and grading may be different for each instructor. Be sure to refer ONLY to this syllabus. 1

EDUCATIONAL OBJECTIVES
Theory and Concepts. The central concept of this course is that of competitive strategy. Definitions abound, but they all share some sense of the allocation of critical resources over relatively long periods of time in pursuit of specific goals and objectives. Successful strategies exploit external conditions, entrepreneurial insights, and internal resources, seeking configurations of prices, preferences, technologies, and information that offer opportunities for sustainable competitive advantage. Strategy can be usefully thought of as the comprehensive alignment of an organization with its future environment. Success, however, depends not only on the soundness of the strategy, but also on its effective implementation through appropriate organizational and administrative choices. In the end, unforeseen external factors may cause a well-conceived and executed strategy to fail, in spite of its initial wisdom -- but a poor strategy badly executed increases the chances of failure. Opportunities to act strategically occur infrequently. If missed, or mismanaged, they can prove disastrous for any firm. Understanding the concept of competitive strategy formulation is a primary educational objective of this course. This will involve mastering an array of economic, strategic, and organizational concepts and theories, and acquiring an integrative general managers point of view. The course will cover theories for in-depth industry and competitor analysis, for anticipating and predicting future industry developments, and for examining the impact of change (in technologies, tastes, government regulations, global competition, and other important environmental forces) on competition and industry evolution. The course will also examine the economic underpinnings of competitive advantages, and the fundamental conditions that allow firms to conceive, develop, and sustain, advantageous strategic positions. Analytical Skills. Theoretical concepts are a great aid to understanding, but by themselves they do not help resolve real business problems or challenges. Also needed are analytical skills and techniques that can be applied to the data to question and validate the facts and premises assumed in the theories. A second educational objective is to further increase each students inventory of useful analytical skills and tools. Some of the tools are quantitative -- analyzing financial statements, computing comparative buyer costs, and calculating the effects of scale and learning on production costs, for example -- while others are more qualitative. Learning how to apply these techniques, and, more importantly, when to apply them is a key objective of the course. In learning to assess a business and its problems or opportunities, this course will allow you experience in conducting comprehensive strategic analyses. That is, identifying firms strategies and testing them for consistency, recognizing potential entrepreneurial opportunities and strategic challenges/problems, selecting and establishing competitively protected market niches, identifying competitive advantages and shaping defenses to circumvent the advantages of rivals, formulating and implementing internally consistent business strategies, and designing efficient and effective organizations. Rhetorical Skills. The best analysis in the world will have little effect if it cannot be communicated to others. Managers must be able to articulate their views coherently and persuasively, and they must be skilled at understanding and critiquing other points of view. Management is a "verbal sport"; perhaps 90% of a typical manager's day is consumed by oral communication. Time is often scarce. You must learn to make convincing arguments and to make them quickly, or the merits of their ideas are likely to become simply irrelevant. This skill takes practice, and we will place a great deal of emphasis on it in class. Wisdom. Much of the knowledge that successful managers employ consist of "rules of thumb" about what issues are likely to be important in certain kinds of business situations. These rules of thumb, or heuristics, are often implicit in the thinking of people who have never bothered to articulate them explicitly. A fourth goal of this course is to help you build up your set of useful "stories" and heuristics for your future managerial careers. In this course we are as much interested in developing an appreciation for the art of management as we are in understanding the science of management. Tools alone may make you a good analyst; they will not make you a strategist. While the ability to master analytical models, frameworks, and tools is essential, ultimate success is more strongly predicated on prescient judgment, entrepreneurial insight, iconoclastic vision, and a willingness to act forcefully with conviction.

COURSE FORMAT AND THE CASE DISCUSSION METHOD

In order to achieve the objectives of the course, we will devote substantial time to the analysis and discussion of selected cases. Cases provide a natural test-bed for theory and provide vivid examples that aid memory of concepts. While nothing can surpass first hand personal industry and managerial experience as a basis for analysis and decision-making, case analysis is an indispensable proxy for the kind of knowledge that can only be gained through years of experience and research. A mix of business cases has been selected on a range of companies from a variety of industry settings. Each case is intended to teach us something specific, yet each can teach many things. We will not attempt to exhaust each case of all its learning experiences, but rather build up a kit of analytical tools, skills and insights, progressively over all the selected cases. There are other reasons for employing the case discussion method of instruction. First, it allows you to develop skills at problem definition in addition to problem solving. Cases typically do not have an obvious set of tasks whose performance will lead to mastery. Rather, they force you to sift through a mass of information, some of it irrelevant or contradictory, in order to identify the important or strategic issues. You may discover that your preparation "misses" key points of a case, especially at first. Second, the case method gives you a chance to deal with ambiguity. Most cases do not have obvious "right" answers. Managers must be able to function in situations where the right answer is not known, without falling into the trap of assuming that any answer is as good as another. Some analyses and proposed strategies are clearly wrong, and some are clearly better than others. A popular phrase in case analysis classes is "There are no right answers, but there are wrong answers." I may not reveal my own opinions about a particular issue, and there will be cases which will not end up neatly packaged with an "answer." Case discussion techniques provide a chance to learn the meaning of analytical rigor in situations that are more ambiguous than black-and-white problems. The quality of your learning experience will be directly determined by: (1) your degree of preparation, active listening, and participation, and (2) your classmates' preparation, listening, and participation. Some will not agree with you, and you may be asked to defend your argument or change your mind. So long as criticism is directed at arguments and not at individuals, is relevant to the issues at hand and coherently argued, it is very much welcomed. You are strongly encouraged to form study groups that meet regularly to share insights and ideas about the assigned cases. While this is voluntary, past experience has shown that it contributes significantly to course performance. There is a good chance that you will feel a bit confused or overwhelmed during the first few sessions of the course. This can result from the case method itself, combined with the unusual structure of the strategy course. The course does not build up linearly by successively adding components of knowledge week by week. Rather, every case in a sense contains all the material in the entire course. Furthermore, the early theoretical concepts probably won't have much meaning for you until you've worked through a few cases. As a result, there is no logical way to start off except by immersion, i.e. throwing you in the deep end of the pool and letting you struggle to stay afloat. The good news is that the number of new ideas for you to learn drops off quickly and old ideas continue to be relevant. This way you will get multiple chances to master the basic concepts of the course. So remember: SOME CONFUSION IS NORMAL AT FIRST. Please refer to Appendices C and D: Guide for Analyzing Cases and Case Assignment Questions In addition to cases, the course will include a textbook, lectures, and articles, which will provide key theoretical models and frameworks and reinforce crucial concepts. Please refer to Appendix B: Guide for Analyzing Articles.

COURSE EVALUATION
Course grades will be determined by students relative performance on the following course components: Course Participation (in-class participation , research activities, and quizzes) Midterm Examination Final Exam Group Case Brief (2 @ 7.5% each) Group Strategy Analysis (Report and Presentation) Total 15% 20% 25% 15% 25% 100% 3

In order to pass this course successfully, a passing grade must be achieved in the combined average of the group projects AND in the combined average of the individual components. Plus and minus grades will be assigned to those immediately above or below grade cutoff points. INDIVIDUAL COURSE COMPONENTS Course Participation This part of your grade will be based on effective contributions to class discussions, performance on quizzes, and your involvement in research activities. These are discussed below. In-Class Participation: The key to successful performance in class participation is to provide valuable input that is relevant to the course content and the topic of discussion. Your overall commitment and your daily active verbal participation in case discussions will be closely monitored. The case notes that you prepare in advance will be hugely valuable to you during these discussions. Class participation is obviously a function of preparation, skills, attitude, and a willingness to actively commit yourself in front of your instructor and colleagues. Students may be called on at random to take the lead in various aspects of the case discussion: to identify critical problems, provide analysis of relevant data (including financial data), generate alternative recommended courses of action, and generate ideas about implementation. If you are not present, are late, leave early, or are not sufficiently prepared to make a substantial contribution to the class discussion, you will lose points for class contribution. Factual misstatements, comments that demonstrate a lack of adequate preparation, or comments that come late in a discussion that distract the class and indicate that the student has not been actively listening will be noted as negative course participation. Attempts to dominate class discussion rarely result in consistent and significant contributions. The quality of the contributions made during class periods determine students overall participation grade. While ALL students are expected to come to class prepared to discuss ALL cases, I will place special emphasis on class participation for those students who have prepared written briefs for the case being discussed. While groups will not be called upon to make formal group presentations of cases, I will expect all members of groups submitting case briefs to be able to present specific portions of their analysis on command. In grading class participation, I will look at both the quantity and quality of your class contributions. With regard to quality, the dimensions that I look for include: Relevance: Does the comment bear on the subject at hand? Comments that do not link up with what the discussion is focusing on can actually detract from the learning experience. Causal Linkage: Are the logical antecedents or consequences of a particular argument traced out? Comments that push the implications of a fact or idea as far as possible are generally superior. Responsiveness: Does the comment react in an important way to what someone else has said? Analysis: Is the reasoning employed consistent and logical? Evidence: Have data from the case, from personal experience, from general knowledge been employed to support the assertions made? Importance: Does the contribution further our understanding of the issues at hand? Is a connection made with other cases we have analyzed? Clarity: Is the comment succinct and understandable? Does it stick to the subject or does it wander?

Individual Quizzes. I may give short unannounced quizzes during the course. No make-up opportunities are available if you are absent or late. Performance on quizzes will count toward your participation grade.

Mandatory Research Activities: Participation also comprises involvement in research activities. The University of Southern California is recognized as one of the worlds leading research universities, and the Marshall School of Business is recognized as a leading center of research within its scholarly domain, including strategic management, organizational behavior, marketing, finance, accounting, and information and operations management. Research universities are distinguished and recognized for educating students in past knowledge AND for being the primary societal engine that creates new knowledge for the advancement of society. This recognition by the outside community enhances the value of your degree to potential future employers as well as to other educational institutions to which you may apply for further education. As a student who benefits from being a member of a research university, you also have an obligation to help contribute to research. Therefore, there is a mandatory research requirement as part of your education. You can choose one of two options to fulfill this requirement. (You cannot do part of Option 1 and part of Option 2.) Please note that, if you do not complete one of these two options, you will lose the points for this part of your grade. Option 1: First, you can participate in research studies. To do this, you will attend sessions outside of class, conducted by researchers in MOR at Marshall. You will earn one credit for each separate study you complete; most sessions are no more than an hour long. You will need to obtain 4 credits during the semester in order to fulfill the research requirement. If you choose this option, please register for an account at http://marshallmor.sona-systems.com/ (see instructions posted separately to Blackboard) no later than Friday September 16, 2011. Those who do not register by this date will be required to complete Option 2. After you verify your account, you will need to check the site regularly to find open studies and sign yourself up for appointments. Studies are scheduled throughout the semester, on various days and times. Its important that you complete your credit early; if you wait until the end of the semester, there may not be enough studies available. You are not guaranteed an available study spot. Please note: If you earn your first 3 credits by showing up to ALL of your scheduled sessions, on time and without cancelling, then you will earn your 4th credit free, as a bonus. That is, the system is earn three, get one free--again, provided that you show up to all three early sessions as scheduled and on time. To receive full participation points, you must earn your first credit by Friday October 28, 2011. Your other credits can be earned any time before December 2, 2011 (last day of Fall semester classes). As a courtesy to the researcher and other students waiting for spots, please use the online system to cancel your appointment ASAP if you cant make it. Option 2: Your second way to complete the research requirement is to write 3 well-reasoned, 3-page research papers on topics prearranged with your instructor. Students must be aged 18 or older by Friday October 28, 2011 in order to choose Option 1; otherwise, you will need to use Option 2. Papers must be turned in no later than December 2, 2011 by 5:00 p.m. to Bridge Hall 306, Attention to Jennifer Overbeck or Jennifer Lim. NOTE: no electronic copies will be acceptedonly a printed copy of the papers will be accepted. IMPORTANT NOTES: (A) if you have already have a research study account from a past BUAD 304 or BUAD 497 course, you will need to email the administrator from the website in order to request account reactivation. She is Jennifer Lim (jennifer.lim@marshall.usc.edu). (B) If you are enrolled for Marketing BUAD 307, please make sure you visit the Marketing research study website your Marketing Professor has given you. Please see Marketing syllabus. Detailed signup instructions for research studies are provided on Blackboard.

Midterm Examination. A midterm examination will be given to test your knowledge of course concepts. The midterm exam will consist of multiple choice questions, and may also include short answers, short essays, and /or analysis of a short case or article. The midterm exam will be administered in class during regular class periods. Be sure to bring a blue book, a pen and a #2 pencil to this exam. NOTE: No make-up midterm examinations will be given. A student who misses the midterm exam will be assigned 80% of the score he or she earns on the final exam as a grade for the missed midterm exam. A student must complete all other course components, including the final exam, to receive a passing grade for the course.

Final Exam. A final exam is scheduled for this course. It will be given during the exam time specified by the University and indicated in the course schedule portion of this syllabus. The final exam will be cumulative, and will call upon your understanding and application of all material covered throughout the semester. The exam will consist of a case analysis. Be sure to bring a blue book and a pen. GROUP COURSE COMPONENTS Team Formation for Group Case Assignments . I will make time available in class for you to form yourselves into teams for group case assignments. Each team will then randomly draw a number, which will be your team number for case assignments.. Written Group Case Briefs As part of a five-member group, you will prepare two written case briefs. The schedule indicates the cases for which your team will prepare written case briefs. (Please see Appendices C, D, E, and G: Guide for Analyzing Cases, Case Assignment Questions, Case Brief Assignments, and Additional Guidelines For Written Reports.) You are likely to be called upon in class to present some aspects of the cases for which you have prepared written briefs. Group Strategy Analysis: Report and Presentation. The group strategy analysis project is a team exercise for which each team will consist of five members. Expect under exceptional circumstances, teams will be the same as for the case brief, described above. Any exception must be approved by me. Please see Appendix F for assignment details as well as Appendices G and H: Additional Guidelines For Written Reports and Additional Guidelines For Class Presentations.) Peer Evaluations. Each of you will complete a peer evaluation of the members of team. The peer evaluation form is Appendix I of this syllabus. Your peer evaluation, in hard copy form, is due not later than the last day of class before the final exam period. (Electronic copies will not be accepted.) Timeliness and care in completing your peer evaluation will be part of your participation/commitment grade.

GENERAL COURSE POLICIES

Attendance and Participation. Class attendance is absolutely essential! Case courses, unlike lecture courses, depend for their success on student commitment, participation, and engagement in discussing the issues presented in the cases by collectively analyzing of the case issues, recommending solutions, and evaluating alternative ways of implementing them. Therefore, your participation in the analysis is critically important for others as well as your own learning! Missed classes, tardiness, and early departures result in a loss in class contribution and participation points, and will be noted as evidence of low course commitment. The policy on missed classes is to allow each student three (3) absences, no questions asked, no penalty. ALL further absences over the limit will reduce the student's participation grade. You do not need to contact me with regard to your absence. Students with an excessive number of absences are at risk of failing the course. Late Reports. Late reports will be penalized 10 percent for missing the deadline, and 10 percent per day late. Group presentations MUST be given on the date assigned in order for credit to be received. Missed Examinations. No make-up midterm examinations will be given. A student who misses the midterm exam will be assigned 80% of the average score he or she earns on the final exam as a grade for the missed midterm exam. A student must complete all other course components, including the final exam, to receive a passing grade for the course. Turn off all Communication and Entertainment Devices. Please note that all communication devices such as computers, cell phones, Blackberries, iPhones, Android devices, etc. capable of sending and or receiving electronic communication, and all entertainment devices such as iPods or other MP3 players are to be turned off and kept off throughout the class session. Receiving or sending communication or entertainment during class disrupts the learning environment and is rude to those around you. Failure to turn off these devices will affect your participation grade adversely. Returned Assignments The Marshall School of Business policy for returning papers is as follows: Returned paperwork, unclaimed by a student, will be discarded after four weeks and hence, will not be available should a grade appeal be pursued by a student following receipt of his/her course grade. 6

COURSE COMMUNICATION: BLACKBOARD SYSTEM

I have posted the course syllabus and assignment information to the BUAD 497 folder for your section in Blackboard. I will also post additional course lecture notes/materials, further details on assignments, and general course announcements to this folder throughout the semester. You should develop the habit of checking the course folder on a daily basis. You can access Blackboard through the My Marshall portal http://mymarshall.usc.edu, or directly: https://blackboard.usc.edu. You will need your UNIX password.

Important: E--mails sent to the class originate from the Blackboard system. It is your responsibility to insure that your e-mail address and account settings in Blackboard are correct for you to receive messages. If you need to send me an email, please do so through the Blackboard system.

ACADEMIC INTEGRITY
The following information on academic integrity, dishonesty, and the grading standard are placed here at the recommendation of the Marshall School of Business Faculty and are taken from the Faculty Handbook. Additional statements about academic integrity may be found in SCampus handbook available at the Topping Student Center and online at http://www.usc.edu/go/scampus. Further information may be obtained from the Office of Student Judicial Affairs and Community Standards at http://www.usc.edu/student-affairs/SJACS/index. The University, as an instrument of learning, is predicated on the existence of an environment of integrity. As members of the academic community, faculty, students, and administrative officials share the responsibility for maintaining this environment. Faculty has the primary responsibility for establishing and maintaining an atmosphere and attitude of academic integrity such that the enterprise may flourish in an open and honest way. Students share this responsibility for maintaining standards of academic performance and classroom behavior conducive to the learning process. Administrative officials are responsible for the establishment and maintenance of procedures to support and enforce those academic standards. Thus, the entire University community bears the responsibility for maintaining an environment of integrity and for taking appropriate action to sanction individuals involved in any violation. When there is a clear indication that such individuals are unwilling or unable to support these standards, they should not be allowed to remain in the University. (Faculty Handbook, 1994: 20) Academic dishonesty includes: (Faculty Handbook, 1994: 21-22) 1. 2. 3. Examination behavior - any use of external assistance during an examination shall be considered academically dishonest unless expressly permitted by the teacher. Fabrication - any intentional falsification or invention of data or citation in an academic exercise will be considered a violation of academic integrity. Plagiarism - the appropriation and subsequent passing off anothers ideas or words as ones own. If the words or ideas of another are used, acknowledgment of the original source must be made through recognized referencing practices. Other Types of Academic Dishonesty - submitting a paper written by or obtained from another, using a paper or essay in more than one class without the teachers express permission, obtaining a copy of an examination in advance without the knowledge and consent of the teacher, changing academic records outside of normal procedures and/or petitions, using another person to complete homework assignments or take-home exams without the knowledge or consent of the teacher. The use of unauthorized material, communication with fellow students during an examination, attempting to benefit from the work of another student, and similar behavior that defeats the intent of an examination or other class work is unacceptable to the University. It is often difficult to distinguish between a culpable act and inadvertent behavior resulting from the nervous tensions accompanying examinations. Where a clear violation has occurred, however, the instructor may disqualify the students work as unacceptable and assign a failing mark on the paper.

4.

STUDENTS WITH DISABILITIES

Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure the letter is delivered to me as early in the semester as possible. DSP is located in STU 301 and is open 8:30 a.m. 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.

ABOUT YOUR PROFESSOR

Judith Blumenthal has published, taught, and consulted in the areas of strategic management, organizational development, retail and services management, strategic alliances, and corporate governance. She has also served as a senior corporate executive. Dr. Blumenthal was Associate Dean of the Marshall School of Business (January 1996 through March 2000) and USC Associate Vice President, Alumni Relations/Executive Director of the USC Alumni Association (April 2000 through June 2006). She currently serves on the Board of Directors of Guess? Inc. as well as not-for-profit boards-- the Board of Directors of the California Council on Economic Education and the Advisory Board of USC Radio. She has also served on the District Board of Directors of the Council for Advancement and Support of Education (CASE), the Community Advisors for the Natural History Museum of Los Angeles County, and the USC Alumni Association Board of Directors. She received her bachelors degree in English from Hunter College of the University of New York, and her M.B.A. and Ph.D., Business Administration, from USC.

COURSE SCHEDULE
Cl 1 2 D T TH Date 8/23 8/25 Topic/Activities Course Introduction Lecture/Discussion Concepts of Strategy Lecture/Discussion Case Preview Concept of Strategy Case Analysis Readings (CS=text; CP=case packet; ARES-library electronic reserves ) CS: 1 and 2 CP: Porter, M., What is Strategy?(4134) CP: Magretta, J., Why business models matter (R0205F) ARES: Wal-Marts Midlife Crisis, Business Week, Apr. 30, 2007 ARES: Wal-Mart Tries to Recapture Mr. Sams Winning Formula CS: 4 Cases (CP) Case Gp

8/30

CP: Wal Mart Stores, Inc (794-024), (Case Preview: Bring case to class, but do not read in advance) CP: Wal Mart Stores, Inc (794-024)

TH

9/1

5 6

T TH

9/6 9/8

9/13

TH

9/15

9/20

10 11 12

TH T TH

9/22 9/27 9/29

13

10/4

14

TH

10/6

Business Landscape and Industry Analysis Lecture/Discussion Form Groups for Case Briefs and Projects Business Landscape and Industry Analysis Case Analysis Sources of Competitive Advantage Lecture/Discussion Case Analysis Competitive Positioning and Business Level Strategies Lecture/Discussion Turn in Company Preferences for Team Project Competitive Positioning and Business Level Strategies Case Analysis GUEST SPEAKER Lynda Resnick, Co-chairman, Roll International Competitive Dynamics and Rivalry Lecture/Discussion Competitive Dynamics and Rivalry Case Analysis Business Level Strategy Review Lecture/Discussion Case Analysis of Video Corporate Level Strategy Lecture/Discussion Case Discussion Alliances/ Mergers and Acquisitions Lecture/Discussion

CP: Coke and Pepsi in 2006 (706-447) CS: 3 CP: Patagonia (711-020)

1,6 2,7

CS: 5 CP: Ghemawat , P. and Rivkin, J., Creating Competitive Advantage (798-062) CP: Brandenberger ,A. and Nalebuff,B, The Right Game: Use Game Theory to Shape Strategy (95402)

CP: Apple Inc. in 2010 (710-467)

3,8

NOTE: This session will be delivered at 2:00 pm only. 8:00 am and 10:00 am classes are invited and encouraged to join 2:00 pm class for this special opportunity. Venue and preparation TBA. CS: 6 CP: Dog Fight Over Europe: Ryanair (A) (700115) Video Discussion: Zara Fast Fashion 4,9

CS: 7 CP: Prahalad, C.K. and Hamel, G, The core competence of the corporation CS: 9 and 10

CP: Newell Company: Corporate Strategy (799139)

5,1

Cl 15 16 17

D T TH T

Date 10/11 10/13 10/18

Topic/Activities Mergers and Acquisitions Case Analysis Alliances Case Analysis International Strategy Lecture/Discussion Case Analysis Review Session Midterm Examination GUEST SPEAKER Chris Mendez, KUSC (USC Radio) New Media Strategy Strategic Leadership and Organization Corporate Renewal Lecture/Discussion Case Discussion Discussion of Final Projects Corporate Governance Lecture/Discussion Case Discussion Corporate Governance and Performance Case Discussion Student Presentations I Projects Due ALL GROUPS (Hard copy due beginning of class; Soft copy due (e-mail) by 5:00 pm) Student Presentations II Student Presentations III

Readings (CS=text; CP=case packet; ARES-library electronic reserves )

Cases (CP) CP: Gucci Group NV (701-037) CP: The Xtrican Co-promotion Team (UV3254)

Case Gp 6,3 7,2 8,4

CS: 8

CP: P&G Japan: The SK-II Globalization Project(303-003)

18 19 20

TH T TH

10/20 10/25 10/27

21

11/1

CS:11 and 12

CP: IBMs Decade of Transformation: Turnaround to Growth (805-130)

9,5

22 23

TH T

11/3 11/8

CS: 13

CP: Jonathon Elderslie and the Board Decision (9B03M031): CP: Graham StewartGeneral Manager (A) (9B02C028

24 25

TH T

11/10 11/15

26 27 28

TH T TH T

11/17 11/22 11/24 11/29

29

TH

12/1

TH TH T

12/8 12/8 12/13

Thanksgiving Holiday NO CLASS Creating New Value Curves CP: Kim W.C. and Mauborgne,, R. Blue Ocean Lecture/Discussion Strategy(R0410D) Video Case Course Wrap-up Peer Evaluations (hard copy) due at beginning of class FINAL EXAM 15096R (10:00 am class) 11 AM 1:00 PM FINAL EXAM 15102R (2:00 pm class) 2:00-4:00 PM FINAL EXAM 15092R (8:00 am class) 4:30-6:30 PM

Video Cases: Blue Ocean Strategy (no case preparation)

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LIST OF APPENDICES

A. B. C. D. E. F. G. H. I.

Course Readings and Cases Guide for Analyzing Articles Guide for Analyzing Cases Case Assignment Questions Case Brief Assignments Group Strategic Analysis: Report and Presentation Additional Guidelines For Written Reports Additional Guidelines For Class Presentations Peer Evaluation

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APPENDIX A: CASE READINGS and CASES

READINGS Porter, M., What is Strategy?(96608) Magretta, J., Why business models matter (R0205F) Bianco, A., Wal-Marts Midlife Crisis, Business Week, Apr. 30, 2007 (ARES) Bustillo, M., Wal-Mart Tries to Recapture Mr. Sams Winning Formula, WSJ, Feb. 22, 2011 (ARES) Ghemawat , P. and Rivkin, J., Creating Competitive Advantage (798-062) Brandenberger ,A. and Nalebuff,B, The Right Game: Use Game Theory to Shape Strategy (95402) Prahalad, C.K. and Hamel, G, The core competence of the corporation (90311) Kim W.C. and Mauborgne,, R. Blue Ocean Strategy(R0410D) CASES Wal-Mart Stores Inc. (9-794-024) Coke and Pepsi in 2006 (9-706-447) Patagonia (9 711-020) Apple Inc. 2010 (9-710-467) Dog Fight Over Europe: Ryanair (A) (9-700-115) Newell Company: Corporate Strategy (9-799-139) Gucci Group N.V. (A) (9-701-037) The Xtrican Co-promotion Team (UV3254) P&G Japan: The SK-II Globalization Project (9-303-003) IBMs Decade of Transformation: Turnaround to Growth (9-805-130) Jonathon Elderslie and the Board Decision (9B03M031) Graham StewartGeneral Manager (A) (9B02C028)

APPENDIX B: GUIDE FOR ANALYZING ARTICLES

The following set of questions is provided to guide your analysis of the readings assigned this semester. Please use this guide to structure your written article analyses.

1.

What is the purpose or objective of this article? What is its basic argument/thesis? Its major findings/ conclusions? What is the nature of evidence presented in support of the argument/ thesis? (Impressionistic, theoretical, empirical, etc.) Are the conclusions well supported? Are there important assumptions, assertions, or values that the author expects us to accept without support? Are these explicit or implicit? How does this article contribute to your overall understanding of the subject? How does it relate to other articles you have read and to your own knowledge and experience? What problems or concerns are you left with?

2.

3.

4.

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APPENDIX C: GUIDE FOR ANALYZING CASES

Purpose Case analysis helps students to develop the kinds of skills that are essential to success in business organizations: identification and analysis of complex business problems, application of judgment in developing solutions, interactive problem-solving, and persuasive presentation of conclusions. The Nature of Business Cases Business cases are detailed descriptions of real company situations in which management is confronted with important issues or problems. Students are required to (1) identify problems or key issues that management needs to address, (2) assemble relevant data, (3) perform appropriate analysis and evaluation, and (4) propose an action plan and a set of recommendations that address the issues identified. Cases contain a rich variety of data, including company background and performance, environmental forces, and points of view of key decision makers. Not unlike real world situations, cases will not contain all the data you would like. Your challenge is to do the best job you can with the information available. How to Approach a Case The following approach to case analysis has proven helpful. a. Rapidly read the case to get a sense of layout and a general understanding of background and issues. During this initial reading, try to form preliminary hypotheses. Initial impressions can be revised, but this groundwork will provide structure and direction for more in-depth reading. Carefully re-read the case,-i. Take notes that organize information and separate the wheat from the chaff. ii. Test and refine your hypotheses as you read ("the company loses money on small orders"), modifying or rejecting them as new information surfaces ("Table 2 shows that shipping costs per unit are higher for small orders, but only for long-distance shipments"). iii. Clarify what the key issues/questions/ problems really are. These are the issues your recommendations will address. They may or may not have been obvious on first reading. iv. Develop analysis questions to help illuminate the issues on which action needs to be taken. What do you need to understand that is not apparent in the case? Perform qualitative and quantitative analyses, as appropriate. If important data are not available in the case, precise descriptions of what data are missing often trigger ideas for making creative use of the information that is available, or for developing well-informed assumptions about necessary but missing information. Be sure to distinguish between factual data from the case, opinions of actors in the case, and assumptions you make. REMEMBER: Your objective is to get beyond the level of problem symptoms to analyze underlying issues and causes. Identify and evaluate reasonable alternative courses of action, based on appropriate criteria. You will explicitly consider and reject various alternatives: Some may not be effective in addressing the issues you identified, others may cause more problems than they solve or cost more than they are worth, others may not be feasible or acceptable to management (solutions should be compatible with the values and preferences of management and those who will implement them). In formulating alternatives, avoid cop-outs such as: "Hire a new president who can solve the problem," Conduct market research," or "Hire a management consultant to solve the problem. Decide on a course of action to recommend. Your solutions must address the issues you have identified and follow logically from your analysis. Remember: Goals are not recommendations for action. Dont say, Increase market share, unless you can offer a plan to accomplish it. Recommend a plan by which the desired action may be achieved or implemented within the constraints encountered in the situation. This is a good final acid test. If you solution is not do-able, it is not a good solution.

b.

c.

d.

e.

f.

Preparation for In-Class Case Discussions Prepare detailed notes that you will bring with you to class to help guide your interventions in class discussions. 13

APPENDIX D: CASE ASSIGNMENT QUESTIONS

1. 2. 3. 4. 5. Wal-Mart Identify Wal-Marts early strategy, and explain how and why it enabled Wal-Mart to be so successful in an industry with intense rivalry. What historically, have been Wal-Marts sources of competitive advantage in discount retailing? How has Wal-Mart operated differently from its rivals? How sustainable is Wal-Marts competitive advantage in discount retailing? Where is Wal-Marts advantage most sustainable? What are the bases of sustainability? Why havent competitors been able to match Wal-Mart? What are the biggest threats to Wal-Marts continued success? Are Supercenters the answer? Will Wal-Mart be superseded by another retailing concept? Can its advantage be duplicated in markets outside the US? What recommendations would you make? Coke and Pepsi in 2006 Why, historically, has the soft drink industry been so profitable? Compare the economics of the concentrate business to that of the bottling business: Why is the profitability so different? How has the competition between Coke and Pepsi affected the industry's profits? Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-CSDs? Patagonia Evaluate Patagonia's strategy. How important to Patagonia's strategy is its environmental position? What is your assessment of the Product Lifecycle Initiative (reduce, repair, reuse, and recycle)? How fast can Patagonia grow? How fast should it grow? How would Patagonia's strategy differ if the company were publicly held? Apple Inc. in 2010 What were Apples competitive advantages? Analyze the dynamics of the PC industry. Are these dynamics favorable or problematic for Apple? How sustainable is Apples competitive position in PCs? How sustainable in Apples competitive position in MP3 players? How would you assess Apples competitive position in smartphones? What are the prospects for the iPad? Dogfight Over Europe: Ryanair (A) What is your assessment of Ryanairs launch strategy? How do you expect Aer Lingus and British Airways to respond? Why? How costly would it be for Aer Lingus and British Airways to retaliate against Ryanairs launch? Can the Ryan brothers make money at the I98 fare they propose? Zara Fast Fashion (video case: for class discussion) What are the key tensions inherent in Zaras value proposition? How does Zara resolve these? Can you describe the linkages among Zaras choices concerning how to compete, particularly choices connected to its quick-response capability, and the ways in which they create competitive advantage? How do the distinctive features of Zaras business model affect its operating economics? Why might Zara fail? How sustainable would you calibrate its competitive advantage as being relative to the kinds of advantages typically pursued by other apparel retailers? Newell Company: Corporate Strategy Does Newell have a successful corporate-level strategy? Does the company add value to the businesses within its portfolio? What are Newells distinctive resources? What challenges faced the company in the late 1990s? In this context, does the acquisition of Calphalon make sense? Rubbermaid?

1. 2. 3. 4.

1. 2. 3. 4. 5.

1. 2. 3. 4. 5. 6.

1. 2. 3. 4.

1. 2. 3. 4.

1. 2. 3. 4.

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1. 2. 3.

Gucci Group N.V. Map the competitive positions of the different players in the luxury goods business. Who are the best positioned players? Why? Where was Gucci positioned in 1990? 1994? 2000? What were the critical moves made by DeSole to reposition the company? Evaluate DeSoles latest strategic move to buy Yves Saint Laurent (YSL) and Sergio Rossi. What actions do you recommend for the future? The Xtrican Co-promotion Team What does partnering mean or suggest? Why was this co-promote alliance created? What perspectives or issues are important to each partner? If you were a member of this team, what strategies would you consider for resolving the budget difference? P&G Japan: The SK-II Globalization As Paolo DeCesare, what factors do you need to consider before deciding what to recommend in your SK-II presentation to the global leadership team (GLT)? What kind of analysis will ou need to do in preparing for that meeting? Does SK-II have the potential to become a global brand within Proctor & Gambles worldwide operations? Why or why not? Which of the three market options should Paolo DeCesare recommend to the GLT? What benefits do you expect to gain? What risks do you see? How should he implement your recommended option? What arethe implications for P&Gs new post-O2005 organization? What support and/or resistance do you expect? How will you manage it? IBMs Decade of Transformation: Turnaround to Growth What factors led to IBMs success during the 1960s and 1970s and its problems during the late 1980s and early 1990s? What did Gerstner do when he assumed the role of CEO in April 1993? Evaluate Gerstners approach to crisis management. How well did he perform as a turnaround manager? What challenges did he face as he attempted to position the company for growth? Why do large established companies, like IBM, find it so difficult to build successful and sustainable new businesses? Evaluate IBSs approach to leading mature, high growth, and emerging business opportunities. What are the organization design and leadership models required to manage each type of business? How should a company like IBM (or AT&T, for example) manage the innovation process? What challenges did Sam Palmisano face as he assumed control of IBM in March 2002? Can a company like IBM (or AT&T) be organized for both innovation and efficient operationcan it be both big and small? What advice would you give Palmisano at the end of the case? Jonathon Elderslie and the Board Decision What attitudes toward corporate governance are revealed in the comments made to Jonathon Elderslie by his friend, Jerome Haskins, as well as in Elderslies own experience as an executive reporting to a board? Do you think these attitudes are widespread or confined to few directors? To the extent that these attitudes exist, what needs to change to create more effective corporate governance? What questions should Elderslie be asking before deciding to take on a directorship? Graham Stewart At the end of the case, Stewart to himself, "it all began to make some sense to me." In the position of Graham Stewart, what does the word "it" mean? If you were in Stewart's position, what would you do now? Why? How?

1. 2. 3. 4.

1.

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5.

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APPENDIX E: CASE BRIEF ASSIGNMENTS

Case briefs are limited to two 8 x 11 pages of text, double-spaced, 12-point font, 1 margins, single sided printing. You may also include up to three appendices, but any appendices must be referenced in the 2-page narrative portion of your report. All assignments must include a separate cover page with assignment title, course title and number, section number, and each team members name with e-mail address. Pages should be numbered in the upper or lower right corner (no page number on cover page). Papers should be fastened with a staple in the upper left cornerno folders please. Case briefs will include the following: Key strategic issues (not a laundry list of issues!) facing the manager(s), including statement of why these issues are important. Refer to class notes and discussion of strategic issues. The issues you identify are the issues your recommendations must address. Summary of your analyses (internal and external). This section will selectively apply course concepts and models to illuminate the situation, and may refer to appendices where you illustrate and elaborate causal linkages to help the reader understand the underlying dynamics of the organizations circumstances. Apply models sparingly in ways that truly shed light on the situation. Your recommendations to the manager(s), including why the alternative you recommend is superior to other reasonable alternatives. Your recommendations must address the strategic issues you identified and follow logically from your analysis! Be sure to consider suggestions for implementation. Do not rehash facts from the case.

APPENDIX F: GROUP STRATEGY ANALYSIS: REPORT AND PRESENTATION

The group strategy analysis project is a team exercise for which each team will consist of five members. Expect under exceptional circumstances, teams will be the same as for the case briefs, described above. Any exception must be approved by me. For this project, students are to prepare a complete strategic analysis of the current and future prospects for a real company. I will provide a list of companies available for this analysis on Blackboard. Students will select first, second, and third choices. I will honor student preferences to the extent possible. Company Preferences: Your company preferences (first, second, and third choices from the list) must be turned into me (hard copy) on the date indicated on the course schedule. However, you would be wise to turn it in sooner, as I will try to manage sign-ups on a first-come first-served basis. I will announce all group/company assignments for the project as soon as I am able to review and manage preference information. I would like to meet with all groups as early as possible to discuss your group project. Please make an appointment! Final Report: WRITTEN REPORT: Your written report will consist of two parts, explained below. The entire report (both parts) should be fastened with a staple in the upper left cornerno folders please. You will provide a separate cover page for the entire report (cover page not included in page count), with assignment title, course title and number, section number, and each team members name with email address. The two parts are: Executive Summary (maximum two double-spaced, typewritten pages.) Content and format of executive summary format will be similar to case brief format, except that instead of referring to appendices, you will refer to slides in you Power Point presentation. Use 8 x 11 paper, double-spaced, 12-point font, 1 margins, single sided printing, page numbering in upper or lower right corner. Power Point Consulting Report, (maximum 20 PowerPoint slides). Power Point Notes are requirednotes on same page as slides. (Notes will show the remarks you will make during your class presentation) Use single-sided printing, with Notes on same page as slide (not 16

separate). Use 8 x 11 paper, page numbering in upper or lower right corner. Use white background for all slides, and make sure they are readable. Important: You must provide sources for your data. References must be included on individual slides AND as a separate references page (not included in page total). Power Point Consulting Report will include: The Story: Statement of key strategic issues (refer to class notes and discussion of strategic issues. Include brief contextual overview to bring reader/listener up to speed. Internal and external analyses o External Analysis: key industry characteristics -- KSFs; trends; industry economics; five forces; major competitors; who is winning and who is losing?, etc. Use models selectively to illuminate the situation and illustrate your points. Do NOT provide a model dump. o Internal Analysis: Brief background info; current position (including current operating and share price data); internal capabilities and areas of concern. Use models selectively to illuminate the situation and illustrate your points. Do NOT provide a model dump. Feasible alternatives and your recommendations to the manager(s) o Alternatives and recommendations must address the strategic issues that you have identified and follow logically from your analyses. o Alternatives and recommendations must consider implementation challenges. o You must explain why the alternative you recommend is superior to other reasonable alternatives. o Recommendation must provide suggestions for implementation. Submission Requirements: You will turn in the written report (executive summary and PowerPoint presentation) at the beginning of class on the first day of presentations, regardless of which day your team is scheduled to present. You will also send both documents to me via email by 5:00 p.m. on that day. PRESENTATION: All groups will present their solutions over three days of class. The presentation allows the team to report its analysis and recommendations to the class. The exact presentation schedule will be announced later. The presentation will be graded on a group basis. Clarity and creativity are strongly encouraged in the presentation.

APPENDIX G: ADDITIONAL GUIDELINES FOR WRITTEN REPORTS

An effective management report is a document which clearly and concisely communicates the information a manager needs to carry out his or her primary function -- decision making. Whether narrative, Power Point, or other visual presentation, your report should be clear and tightly written. Do not waste time and space summarizing information with which your audience is already familiar. All written reports must be carefully edited. Appendices, including tables, charts, diagrams, financial analyses, etc. may be used to support your analysis. Be sure that any appendices are referenced in the body of your report. In the case of group written reports, the seams between parts must be invisible, and there must be no redundancy (much less internal contradiction!).

APPENDIX H: ADDITIONAL GUIDELINES FOR CLASS PRESENTATIONS

An effective group presentation requires all the work you do for a written report, PLUS preparation of appropriate visuals, application of business communication skills, and substantial coordination among team members. You must prepare and rehearse in advance to avoid fragmentation or redundancy and create a seamless, effective presentation.

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APPENDIX I: PEER EVALUATION

Please allocate 100 points across all the members of your team apart from yourself to reflect your assessment of their individual contributions to the team effort. I will treat your assessments as confidential.

Course number:_________________ Your name: ___________________ Group #: _____________________

Section number:__________________

Name of Project:______________________________________________________ Team-member name: 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________ 5. _____________________ 6. _____________________ Total: Contribution %: _____ _____ _____ _____ _____ _____ 100% Comments _______________________________ _______________________________ _______________________________ _______________________________ _______________________________ _______________________________

General Comments: __________________________________________________________________________ ___________________________________________________________________________________________ ___________________________________________________________________________________________ ___________________________________________________________________________________________

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