MAN 386/MKT 382: OPERATIONS AND MARKETING STRATEGY
MW 3.30-5 PM (Unique #s: 03355, 04545) MW 5-6.30 PM (Unique #s: 03360, 04550)
Instructor: Vish V. Krishnan E-Mail: Vish.Krishnan@bus.utexas.edu
Office: CBA 4.226 Phone: 512-471-9498
Office Hours: MW 2-3 PM Web: http://courses.utexas.edu
Course Objective: Coordinated marketing and operations decision making and action can be a
source of competitive advantage to a firm. In this course, our objective is to learn about the
design and implementation of operations and marketing strategies in an information-
intensive business environment.
Course Positioning: The course builds on the foundational concepts covered in the core
operations and marketing classes. We will now tie these concepts to the business unit/firm
strategy with the objective of creating strategies that can be effectively implemented. The
course, therefore, lies at the intersection of the core operations, marketing, and strategy
Intended Audience: This course would be attractive to students who are interested in careers in
consulting, general management, product marketing, and operations management positions.
Approach: The course is primarily case-based. However, it also includes an extensive class
project that helps students apply the concepts to a real company setting.
Readings Packet: A packet of readings and cases can be picked up from I/T copy, on MLK
Boulevard and Guadalupe.
2. Class Evaluation Approach
The course grade is a combination of class participation, case paper performance, and progress in
the class project, as shown in the following table:
Class Participation 30%
3 Case Analysis Papers (1 Individual, 2 Team) 3 * 10% = 30%
Company Analysis and Recommendations Project 40%
Class participation. Much of the learning happens during class discussions through the mutual
exchange of ideas. Your preparation of the reading material and contribution to the class
discussions is vital to the class learning experience. To help in preparation, I have suggested
"Guiding Questions" for every class in the detailed syllabus that follows this document. These
questions should serve merely as a starting point. At the beginning of the class, one or more class
members will be asked to start the session by addressing a specific question. Anyone who has
prepared the case should be able to handle such a leadoff assignment. After a few minutes of initial
analysis and recommendations, we will open the discussion to the rest of the class. As a group we
will try to build a complete analysis of the situation. You are expected to be an active participant
throughout the entire class and to contribute to the quality of the discussion.
Please note that the frequency (i.e., the quantity) of your interventions in class is not a key criterion
for effective class participation. Also, class participation" does not just mean "the amount of time
you talk in class" - it means participation in the class as a whole, including involvement that occurs
outside the classroom. In particular, you may use bulletin board discussions as a way of
communicating with the class. Some students are intimidated by the "obligation" of speaking up in
class. Here's the secret to cutting your stress level - BE PREPARED. Your class participation
grade is weighted heavily in favor of quality over quantity. Make sure that you contribute in a
professional way. Your ideas are more likely to be accepted and appreciated by your fellow
students if they are presented in measured and well-reasoned terms, rather than in an impatient,
confrontational way. Feel free to disagree, but do so constructively so that the class can also gain
insights into your viewpoint. When you feel bogged down in a circular argument that's going
nowhere, recognize that and complete the discussion outside class. The attitude is: everybody
(including the instructor) learns from everybody else! Some criteria used to evaluate class
participation are as follows:
(1) Is the participant a good listener?
(2) Are the points that are made relevant to the discussion? Are they linked to the comments of others?
(3) Do the comments show evidence of analysis of the case?
(4) Is there willingness to test new ideas, or are all comments "safe"? (For example, repetition of case facts without
analysis and conclusions.)
(5) Do comments clarify or build upon the important aspects of earlier comments and lead to a clearer understanding
of the case?
Note: You are expected to attend EVERY class; you are responsible for the material covered in
class whether or not you attend. However, I realize that despite your best efforts you might have to
occasionally miss a class due to unforeseen emergencies. If you must miss class, you may provide
a one-page written evaluation of the material or case to be covered (contact us for details of
specific assignments). This assignment should be e-mailed in advance of class for planned
absences and by the BEGINNING of the following class for emergencies. Since participation is a
substantial fraction of the course grade, it is impossible to get better than a "B" without following
these guidelines even if you "ace" all the written work.
Case papers. During the semester, you will submit three case papers. The first of these papers is
an individual analysis paper (analysis of Fabtek due January 28th), while the other two papers
(analysis of Product Development at Dell and FreeMarkets Online cases) are submitted as a team
after Spring break. (By the second week of classes, you are expected to be a part of the team. The
same team will be used for case papers as well as the class project.) Your case papers submitted
should be no more than 5 pages in length (double-spaced), plus any exhibits. These papers will be
judged on the following four dimensions:
1. Analytical Depth (AD): Degree to which paper contains reasoning and analysis based on a deep
understanding of the facts and details of the case, producing insightful recommendations.
2. Comprehensiveness - Extent to which all the important issues in a case are included.
3. Managerial realism - Refers to the degree to which the arguments have taken into account the importance of
various hard and soft issues affecting the case situation (going beyond the numbers).
4. Crispness/Persuasiveness – Degree to which presentation style marked by clarity, terseness, briskness, and
the ability to persuade the reader.
Re-grading. Requests to have a grade reconsidered should be submitted by e-mail. If you would
like to submit a request, or if you would just like to discuss your grade in general, wait at least 3
days after an assignment is returned to you. This is to prevent an emotional type of interaction, and
replace it with a rational, objective discussion of the merits of the case. No re-grading will be
considered more than 10 days after the assignments is returned to you, unless it is a matter of a
math error (adding up points), which will always be cheerfully corrected.
Class Project. The class project offers the opportunity to apply the concepts covered in class to a
real-life setting. As a team, you will be assigned to the study of a publicly traded company
(“client”) in a particular industry. Your team will examine not only the structural changes
happening in the industry, but also the operating performance of the client and compare it with
other peers in the same industry. Your team will then make marketing and operations strategy
recommendations that will help the company raise its margins and profitability, and create
additional shareholder value. Your class project grade is awarded both for the outcome and the
process. The timeliness of completion of each of the individual process steps and the quality of the
intermediate outcomes are also awarded grades as follows:
Phase 1 Structural Analysis of the Client’s Industry (10% of the class grade): Five Forces Analysis, Key
Disruptive Changes Happening in the Industry, Patterns of Value Migration, Identification of Shifts in
Profit Pools (Written submission due “Project I”: February 25th)
Phase 2 Marketing Strategy Recommendation (10% of the class grade): Examination of the impact of the
structural changes on the firm’s marketing strategy. Recommendations about new target markets,
customers, products, services, bundles, alliances, and acquisitions. (Written submission and presentation
due “Project II”: March 6th)
Phase 3: Operating Strategy Recommendation (20% of the class grade): Articulating the impact of the
structural changes on the firm’s innovation, supply chain, and other operating strategies. Recommendations
on how to implement the proposed strategy. (Written submission included in the final report due with the
class presentation on “Project III: May 1st)
Each member of the class is expected to conduct themselves in accordance with University of
Texas at Austin’s policies. All work turned in for a grade should be your work alone, unless
specifically instructed otherwise. For case analysis paper, stick to the facts and data presented in
the case, and do not use information not within the case.
MAN 386/MKT 382: OPERATIONS AND MARKETING STRATEGY CLASS SCHEDULE
Session Date Topic Case Hand-in/Email
1 1/14 Introduction Individual Vita
2 1/16 Business System Design
Airborne (A) Team names and
3 1/23 Activity Analysis
4 1/28 Coordination Fabtek (A) Individual paper
5 1/30 Scoping the Business
6 2/4 Project Discn. With Instructor
7 2/6 Guest Speaker: Strategy Maps
8 2/11 Dynamic Competition; Co-opetition NutraSweet
9 2/13 Value Innovation
10 2/18 Services-Led Growth Intuit
11 2/20 Product Strategy: Bundling and Architecture
12 2/25 Guest Speaker: Industrial R&D Project I
13 2/27 Managing Product Development Braun AG
14 3/4 Developing and launching Radically New Products TiVo
15 3/6 Project Mid-term Presentation Project II
16 3/18 Prototyping & Launch Timing IDEO
17 3/20 Managing Projects in Turbulent Environments PD @ Dell Team paper
18 3/25 Managing Transitions Intel
Strategic Supply Chains: Supply Chain Structure &
20 4/1 Negotiating Supplier Contracts
21 4/3 Supplier Relationship Management Bose
22 4/8 Collaborative Supply Chain Management
23 4/10 Project Review with Instructor
24 4/15 E-Procurement and Electronic Markets FreeMarkets Team paper
25 4/17 Multi-Channel Mgmt Golfsmith
26 4/22 Managing Knowledge and Learning McKinsey
27 4/24 Corporate Mgmt of Disruptive Change Teradyne
28 4/29 Project Final Presentation
29 5/1 Project Final Presentation & Wrap-Up Project III
As a team of consultants, your focus is helping on your client in a particular industry with
identifying operations and marketing strategy recommendations to meet the structural
changes happening in their industry. Specifically, you will identify any patterns
happening in the industry (value migration, changes in value chain location where profits
are concentrated), and make recommendations about new products and services,
customer segments, target markets, channels, suppliers, operating locations, technologies
that will help the client navigate these changes and create additional share-holder value.
1 Disney (Media industry)
2 Albertsons (Grocery Retailing)
3 Continental Airlines (Airline industry)
4 Merrill Lynch & Co. (Financial Services)
5 Starwood Hotels & Resorts (Hospitality)
6 Bank of America (Banking)
7 Eastman Kodak (Imaging)
8 Ford Motor Co. (Automobile industry)
9 Trammell Crow & Company (Commercial Real estate industry)
10 Dow Chemicals (Chemical Industry)
11 APOLLO Group/University of Texas Executive & Lifelong Education
12 Accenture (Professional service)
13 InterPublic Group (Advertising industry)
14 Conoco (Oil & Gas)
16 Merck (Pharmaceutical)
17 National Instruments Company (Electronic Instrumentation)
18 Dish Network (Broadcasting Television)
19 Vignette Corp. (Enterprise Software)
20 Motorola (Semiconductor & High Technology)
Other Companies in Discussion with Instructor
Your team needs to prepare a final project report/case-study and a formal presentation
that details the emerging structural changes in the industry, and your recommendations
for how your client should thrive under these conditions with new products/services,
target markets, alliances, and organizational practices. (It is highly recommended that you
write your report in two parts as a 10-page case study and 10-page solution key, with the
case study outlining the dilemma of senior management, and the solutions key presenting
a solution to the problem. If written as a report, it should be limited to a maximum of 20
pages, double-sized and font size of 12). As intermediate deliverables, you will present
the marketing strategy recommendations in the class before Spring break, and a written
version of the structural analysis by Feb 25. Your client asks you to make sure that the
team addresses at the least the following issues:
What changes are happening to various segments of the value chain and the five forces
within this industry? What are the implications of these changes for value creation and
capture? What are the key trends emerging in the industry in terms of consolidation,
fragmentation and/or restructuring? Do any patterns appear in the changes happening to
the supplier industry, customer industry, or to the distribution channels? Are firms going
to market in new ways? Are existing channel structures being disintermediated? Are
there new kinds of intermediation emerging between firm and customer?
Product and Pricing Patterns
How is the product or service concept being re-defined in this context? Are products and
services being bundled or unbundled? Is there any effect on the company brand? How is
the responsibility for assembling and designing the offering, including customization,
being reallocated between firms, their partners and customers? Are there any new pricing
models that are being, or can be, applied? Is the potential for price discrimination lower
or higher? Why? Is there new potential for bundling?
What aspects of consumer needs and wants are likely to remain stable, and what aspects
are likely to change? How do you perceive consumers as searching and making choices
between firms in the near future? How is consumer behavior likely to change in the short
and long term? How can customer loyalty be maintained, and the customer relationship
be managed? How can online and offline assets and capabilities be jointly leveraged to
provide customers with complete solutions? What are the new modes of market
What is the nature of emerging alliances and partnerships? Who wields the power in
How are the dimensions of differentiation changing in the NDE? How can competition be
focused on variables other than price? What are new bases for building sustainable
competitive advantage, if such bases exist?
Implications for Business Design and Organizational Structure
How is the design of the activity systems and business processes impacted by the above
changes? Do firms need to unbundle or integrate their business processes innovation,
infrastructure, and customer relationship management? How is the scope of the activities
done within the firm influenced? How can firms raise the barriers to entry and imitation
of their business processes, and sustain their advantage?
SESSION 1 (M, 1/ 14) Introduction To The Class
Readings: Class Overview and Detailed Syllabus
Hand-in/Email Your Resume
SESSION 2 (W, 1/16) Business System Design
Assignment: Read the article Leveraging to Beat the Odds carefully, and browse the other two articles.
Readings: The Last Mile to Somewhere
Brilliant Strategy: Can You Execute?
Leveraging to Beat the Odds: The New Marketing Mind-Set
Questions: 1. What in your opinion went wrong with the strategic plans of the online grocery
2. What are some challenges to executing a brilliant strategy?
3. What is the new marketing mindset that the authors are referring to?
SESSION 3 (W, Jan. 23) Activity Analysis
Case: Airborne Express (A)
Questions: 1. How and why has the express mail industry structure evolved in recent years? How
have the changes affected small competitors? How has Airborne survived?
2. Quantify Airborne’s sources of advantage. Specifically, compare the costs of an
overnight letter shipped by Airborne Express to one shipped by Federal Express.
(To examine relative costs, start with the cost structure of a Federal Express
overnight letter, given in Exhibit 3. Using information in the case and your
understanding of what influences each cost item, estimate each of the items for
3. What must Robert Brazier, Airborne’s President and COO, do in order to
strengthen the company’s position?
SESSION 4 (M, 1/ 28) Coordination
Case: Fabtek (A)
Hand-in/Email Your Analysis of the Case (Note: Your paper should not written as answers
to these questions below. Instead, it should flow smoothly, with the questions
below answered implicitly. These questions are merely a starting point. Look at
the class overview for more guidelines on the paper.)
Guiding Questions 1. What is the company's current process of order selection? Can it be improved? How?
2. What criteria should be used in selecting orders? What are the major characteristics
of each order relative to the criteria established?
3. What does each order do for Fabtek in an economic and strategic sense? What are
the political and human implications of each order? Are there any trade-offs that
need to be resolved?
SESSION 5 (W, 1/30) Scoping the Business
Assignment: Read the article Leveraging to Beat the Odds carefully, and browse the other
Readings: Unbundling the Corporation
When and When Not to vertically Integrate
Questions: 1. What according to the authors are the compromises inherent in a bundled company?
2. What technological forces are contributing to the unbundling of corporations?
3. What are the risks in unbundling a company?
4. How is the unbundling discussed in the first article related to vertical integration? When
should a company integrate vertically?
SESSION 6 (M, 2/ 4) Project Discussion with Instructor
Assignment Identify the value chain for your client’s industry. Perform a five-
forces analysis, and begin identifying some structural changes
happening in the industry. Be prepared to discuss these changes with
SESSION 7 (W, 2/6) Guest Speaker: Strategy Maps
Assignment Continue working on the industry structural changes happening in
your client’s industry. Plan and schedule your project, and divide
responsibilities among your team members.
SESSION 8 (M, 2/11) Dynamic Competition and Coopetition
Case: Bitter Competition: The Holland Sweetener Co. vs. NutraSweet (A)
Readings Scenario Planning A Tool for Strategic Thinking
The Right Game: Use Game Theory to Shape Strategy
Guiding Questions 1. How should Vermijs expect NutraSweet to respond to the Holland
Sweetener Company’s entry into the European and Canadian
aspartame markets? How could an aggressive response affect
2. Specifically, how should Vermijs assess the likelihood of the two
scenarios – price war and normal competition - that he has in mind?
SESSION 9 (W, 2/13) Value Innovation
Readings: Value Innovation: The Strategic Logic of High Growth
Questions: 1. What is value innovation?
2. How do you differentiate in a commodity industry?
SESSION 10 (M, 2/18) Value Capture and Serviced-Led Growth
Case: Intuit QuickBooks
Guiding Questions 1. What are the opportunities and challenges in generating
revenues through value-added services?
2. How can Intuit capture value without damaging the
SESSION 11 (W, 2/20) Product Strategy (Bundling and Architecture)
Readings: How Architecture Wins Technology Wars
Bundling New Products, new Markets, Low Risk
Questions: 1. Why is architecture important in a business context?
2. Do you agree that a proprietary architecture can be open?
3. What are the pros and cons of bundling products?
SESSION 12 (M, 2/25) Guest Speaker: Industrial R&D
Readings: From the Ladder of Science to the Product Development Cycle
Hand-in: Strategic Analysis of Your Client’s Industry
SESSION 13 (W, 2/27) Managing Product Development
Readings: From the Ladder of Science to the Product Development Cycle
Develop Profitable New Products with Target Costing
Case: Braun AG
Guiding Questions 1. What is your evaluation of the role of Industrial Design (I. D.) at Braun?
What has it contributed to the company in general and the KF40 project in
2. What is responsible design? Is masking flaws responsible design?
3. How should Braun management reconcile Braun's design philosophy and the
demands of the market? What would you recommend about the material
4. The decision facing the chairman of Braun is about more than the material
choice. Would you agree? What lessons do you take away from the case,
especially regarding cultural, behavioral, and organizational issues in
SESSION 14 (M, 3/4) Developing and Launching Radically New Products
Readings: Disruptive Technology: Catching the Wave
First to Market, First to fail? The Real Causes of Enduring Market Leadership
Guiding Questions 1. Analyze the situation from the customer’s viewpoint. What factors facilitate
and complicate adoption of TiVo’s product? Who is the ideal candidate for
2. Now adopt the standpoint of advertisers and broadcasters: What do they want
TiVo to be? Who is TiVo’s competition, and what are their strengths and
3. What is your evaluation of TiVo’s action and communication plan? Would
you propose any changes?
SESSION 15 (W, 3/6) Project Mid-Term presentation
Assignment Present your team’s analysis of the structural changes and your
progress to date on the marketing strategy recommendations.
Detailed Syllabus for the Second Part to be Emailed and Posted on the Web