Business Capstone Strategic Positioning and Competition

							                                           Business Policy Capstone Course:
                                           Mastering Strategic Analysis

                                           Professor Michael A. Roberto
                                           Fall 2006

Michael A. Roberto
Associate Professor, Trustee Professor of Management
Faculty Suite F-414
Email: mroberto@bryant.edu         Phone: 401-232-6155              Fax: 401-232-6319

Course Overview

Why are some firms more successful than others? This is the fundamental question that we will
tackle in this course. Successful management of a firm begins with a coherent, well-defined
strategy. This course develops the knowledge and skills necessary to analyze, formulate and
implement strategy effectively. We will take the perspective of the general manager, learning
how to assess the external environment, as well as the firm’s internal resources and capabilities,
so as to create a successful strategy. We will learn how the general manager makes the parts of
the firm (functional areas, product lines, and/or geographic units) work in harmony to support the
strategy and create a whole which is greater than the sum of its parts. Thus, the integrative
nature of this course will reflect the fundamentally integrative nature of the general manager’s
job. Throughout the course, we will address the complexity of leading a business in this era of
globalization, social and technological change, and dynamic firm and industry boundaries.

Course Objectives

      Develop and practice the ability to think strategically by learning the concepts, models,
       and tools of strategic analysis and by applying them to actual competitive situations.

      Develop an understanding of the sources of profitability differences among firms, as well
       as how firms can either sustain or lose their competitive advantage over time.

      Learn how general managers achieve the critical task of alignment/integration among the
       various parts of the firm so as to compete successfully.

      Develop two critical perspectives: first, a global perspective on how markets function and
       firms compete; second, a general manager’s view of an organization and its environment.

      Build your skills at communication—learning to present ideas concisely and
       persuasively—and at working collaboratively—obtaining better results by drawing on
       everyone’s knowledge and experience and building working relationships despite
       differences in opinions and priorities.
Desired Outcomes

By the end of the course, you should be able to:

   1. Evaluate the structure of an industry, domestically and globally.

   2. Assess the internal resources and capabilities of a firm from a systemic perspective, and
      the extent to which that system creates a sustainable competitive advantage.

   3. Perform various forms of quantitative analysis to evaluate the extent of a firm’s
      competitive advantage or disadvantage.

   4. Conduct a thorough competitor analysis and project how a rival might react to a firm’s
      strategic moves.

   5. Evaluate how and why firms might create or destroy value by expanding their scope
      horizontally, vertically, and/or geographically.

   6. Analyze the multiple mechanisms (contracts, long term relationships, joint ventures,
      alliances, mergers, etc.) that firms might employ to achieve economies of scale and
      scope.

   7. Assess the quality of a firm’s strategic process, as well as the efficacy of the leadership of
      that process.


Required Books

       1. Robert M. Grant. 2005. Contemporary Strategy Analysis: Concepts, Techniques,
          Applications. 5th Edition (paperback).

       2. Michael A. Roberto. 2005. Why Great Leaders Don’t Take Yes For An Answer:
          Managing for Conflict and Consensus. Wharton School Publishing.

       3. MBA 651 Customized Course-pack (cases and readings)
Class                            Topics and Reading Assignments

                  MODULE 1: Fundamentals of External and Internal Analysis
 1      Introduction

        Readings:
            Robert M. Grant, Chapters 1 & 2
            Michael E. Porter. 1996. ―What Is Strategy?‖ Harvard Business Review.
            Michael A. Roberto. 2006. ―Learning by the Case Method.‖ (Blackboard)
            Michael A. Roberto. 2005. Why Great Leaders Don’t Take Yes For An Answer.
              Chapter 1.

        Case:
            Matching Dell (A)

 2      External Analysis

        Readings:
            Grant, Chapter 3 & 4

        Cases:
            The Chinese Fireworks Industry
            Robert Mondavi and the Wine Industry

        Recommended:
            China: Building "Capitalism with Socialist Characteristics"

 3      Internal Analysis and Competitive Advantage

        Readings:
            Grant, Chapters 5 & 7
            ―Wal-Mart selling its 85 stores in Germany.‖ (Blackboard)

        Cases:
            Wal-Mart Stores in 2003
            Wal-Mart 2005

        Refreshers:
            P. Healy and J. Cohen. ―Financial Statements and Ratio Analysis.‖ HBS Note 9-
              101-029.
            W. Bruns. ―Basic Capital Investment Analysis.‖ HBS Note 9-198-004.
                          MODULE 2: Business-Level Strategy
4   Competitive Positioning: Cost Advantage

    Readings:
        Grant, Chapter 8

    Case:
        Airborne Express
5   Competitive Positioning: Differentiation

    Readings:
        Grant, Chapter 9

    Case:
        Edward Jones
6   Competitive Dynamics

    Readings:
        Peter Coughlan, et al. “Competitor Analysis: Anticipating Competitive Actions.‖
          HBS Note 9-701-120.

    Cases:
        Dogfight over Europe: Ryanair (A)
7   Competitive Dynamics

    Readings:
        Adam Brandenburger and Barry Nalebuff. 1995. ―The Right Game: Use Game
          Theory to Shape Strategy.‖ Harvard Business Review.

    Cases:
        Bittersweet Competition: The Holland Sweetener Co. vs. Nutrasweet (A)

                        MODULE 3: Corporate-Level Strategy
8   Expanding the Scope of the Firm

    Reading:
        Grant, Chapters 13 and 15
        Roberto, Markets vs. Firms: A Framework for Evaluating Corporate Strategy
          (Blackboard)

    Case:
        The Walt Disney Company: The Entertainment King
9    Expanding the Scope of the Firm (continued)

     Reading:
         Grant, Chapter 16
         Roberto, Note on Agency Costs and Corporate Governance (Blackboard)
     Case:
         No case study assigned for this class (please see Blackboard for assignment)
10   Corporate Strategy in a Global Context

     Reading:
         Grant, Chapter 14

     Cases:
         House of Tata – 1995
         House of Tata – 2000

     Recommended:
         India on the Move
11   Alternative Mechanisms for Achieving Scope Economies: Mergers vs. Alliances

     Reading: No supplemental readings for this class.

     Cases:
         Background Note on the Daimler-Chrysler Merger
         The Renault-Nissan Alliance

             MODULE 4: The Strategic Process - From Creation to Execution
12   The Strategic Planning Process

     Reading:
         Charles Knight. 1993. ―Emerson Electric: Consistent Profits, Consistently.‖
           Harvard Business Review.
         Larry Bossidy and Ram Charan. 2002. Execution: The Discipline of Getting
           Things Done. Chapter 8.
     Case:
         GE's Two-Decade Transformation: Jack Welch's Leadership
     Recommended:
         Robert Kaplan and David Norton. 1992. ―The Balanced Scorecard: Measures
          That Drive Performance.‖ Harvard Business Review.
         Robert Kaplan and David Norton. 2005. ―The Office of Strategy Management.‖
          Harvard Business Review.
 13     The Decision-Making Process

        Reading:
               Roberto. Why Great Leaders Don’t Take Yes For An Answer. Chapter 2-5.

        Case:
                   Arthur Schlesinger, Jr. A Thousand Days: John F. Kennedy in the White
                    House. Chapter 10.


 14     Strategy Formulation & Execution: The Evolution of a Failure

        Reading:
               Roberto. Why Great Leaders Don’t Take Yes For An Answer. Chapter 6-9.

        Case:
                   Orientation for Viewing "Path to War"

        Film:
                   Path to War. 2002. HBO Movie.


Teaching Philosophy

I believe strongly in teaching by the case method, rather than purely by lecture. The case method
of learning is based on the philosophy that management is a ―skill more than it is a collection of
techniques and concepts.‖

The cases in this course will provide a description of a management situation. I ask that you put
yourselves in the shoes of the general manager or management team in the case, who often will
have an important decision or set of decisions to make. Sometimes, those decisions will be
discussed explicitly in the case; on other occasions, you will have to infer the key problems,
opportunities, and decisions facing the organization.

We will learn primarily in an inductive fashion in this method of learning and teaching. While I
have assigned a text and some supplemental readings, I will not begin most classes by outlining a
set of theories and principles, and then asking you to apply those ideas to the case study. Instead,
we will dive right in and discuss the issues facing the organization in the case, and principles and
hypotheses about how to manage that situation effectively will emerge from the class
deliberations.

Naturally, the text and readings will offer you a starting point as to the frameworks and models
that might be useful for analyzing the case in a thoughtful and rigorous manner. For more on my
philosophy of learning and teaching, please read the note entitled ―Learning by the Case
Method.‖ (You may download the note from Blackboard).
Class Participation

Class participation plays an integral role in the learning process in this course. Everyone must
prepare the assigned material before class and participate in class discussion. You should expect
me to "cold-call" frequently during class. A substantial portion of your grade will depend on
your ability to contribute productively to our collective learning experience. We will be making
extensive use of real business cases that provide a forum for you to apply concepts and analytical
tools. The goals for each case discussion are to understand the strategic nature of the situation,
define key issues, recognize critical assumptions and tradeoffs, and propose sensible
recommendations. In order to fully benefit from case discussion, you should:
      Come to class well prepared. Analyze the case using the tools you have learned in class,
       and come prepared to answer the case assignment questions in class. (The case
       assignment questions will be posted on Blackboard several days prior to class).
      If tables and figures are provided, perform basic analysis to uncover trends and issues
       that may not be explicitly mentioned in the case. Probe beyond what is written to what
       you think may really be going on, using the course lectures and readings as a guide.
      Given the complexities of the real world, there is no single right answer, although some
       answers are better than others. To find those, use strategic concepts and tools to analyze
       a situation.
On any given day, you may be called upon to state your major conclusions and then to provide
evidence and analysis in support. Even in the most ambiguous situations, it is important to
examine data, reasons, and assumptions that make some answers better than others. For class
discussion you will be expected to draw from all the relevant readings and class discussions to
date. In addition, please remember to listen carefully and respectfully to your classmates and
suggest supporting or alternative views. Thoughtful debate is highly encouraged.


Attendance Policy


We will be very demanding with regard to class attendance and on-time arrival in this course,
because our collective learning is maximized with full participation and commitment on the part
of everyone. Please remember that late arrivals are very disruptive to your fellow students and to
the learning process. Your grade will be adversely affected if I discover a problem with regard
to tardiness or absences. Moreover, late arrival greatly enhances the likelihood that you will be
―cold-called‖ during the class session. When absences must occur, please notify me by email in
advance whenever possible. If you must be absent for any reason, you also must submit a memo
(three page limit, single spaced, 12 point font) detailing your responses to the assignment
questions for that class session. Those memos are due no later than 24 hours after the class
session ends. Please do not consult with anyone who attended class when you draft your memo.
Please note that while submitting written memos will help offset any detrimental impact on your
grade due to your absence, it should not be considered a substitute for participation in the class
discussion. Vigorous participation in a class discussion will always earn you more credit than a
memo submitted in lieu of attending a session.
Academic Integrity


In order to maintain a vigorous learning community in the classroom, it is critical that we, as a
class, do not tolerate academic fraud (cheating, plagiarism, lying). As a matter of personal and
professional respect for each other, and ourselves, we should expect the highest standards of
conduct from our peers and ourselves. Violating these standards takes away the value and
meaning of the educational environment for all of us, and in the event that such a violation
occurs, the individual(s) responsible will be subject to University sanctions that may include
failure from the course, suspension, or expulsion.

The Global Perspective

We, the faculty at Bryant, have committed to providing our students with the ability to excel in
an increasingly global business environment. In this course, all the firms that we study will face
global competition, and a number of them are headquartered outside the United States. The case
studies that will focus a great deal of attention on international markets include:

           o The Chinese Fireworks Industry case study
                  a case study about a highly competitive industry in China
           o Robert Mondavi and the Wine Industry
                  a case study about how the wine industry differs around the world
           o Wal-Mart 2005
                  a case study that chronicles Wal-Mart’s attempts to grow internationally
           o Dogfight Over Europe: Ryanair
                  a case study about a European low-cost airline headquartered in Ireland
           o Bittersweet Competition: The Holland Sweetener Co. vs. Nutrasweet
                  a case study about a Dutch firm that challenges an American incumbent
           o The House of Tata
                  a case study about a conglomerate in India
           o The DaimlerChrysler Merger
                  a case study about the merger of German and American automakers
           o The Renault-Nissan Alliance
                  a case study about the alliance between a French and Japanese automaker

In addition to the work that we will do in this course, I highly recommend that you begin reading
a book entitled The World is Flat by Thomas Friedman. You should examine this book at some
point during this term. Friedman, the Pulitzer-Prize winning columnist from the New York
Times, provides a unique and insightful exploration of how global competition is transforming
markets and firms in the United States and abroad.
Course Grading

Grading will be based on the following:

       Tests (Three 45-minute exams)                                               45%
       Class Participation                                                         30%
       Team Project                                                                25%

Tests
There will be three 45-minute tests to evaluate your mastery of the content of the course, with
each test worth 15% of your grade. If you must miss a test, you should contact me at least one
week in advance to make arrangements to take it early. If you miss a test unexpectedly, you
should contact me immediately to discuss your options for making up the work. The tentative
schedule for the three tests is as follows:

        First Test: Week #4
        Second Test: Week #9
        Third Test: Week #13

Participation
Your participation grade will be based on a combination of:
    Individual contributions during class
    Group presentations during class
    Four one-page memos that will be due immediately prior to our case discussions in class
       (due at start of class sessions 3, 6, 9, and 14).

Team Project
Each student group must complete a project about a particular company during this course. At
the start of the semester, I will assign each group to serve as the top management team of a
different firm in the alcoholic beverage industry. For instance, one group might play the role of
the executive team at Anheuser-Busch, the largest beer company in the United States. Another
group might step into the shoes of management at Diageo, a European firm that produces and
sells many leading spirits brands, as well as wine and beer. A third group might play the role of
the top managers at Foster’s Group, an Australian beer producer that has moved aggressively
into the wine business in recent years with the acquisition of Beringer’s and other wineries.

All groups will have to evaluate the overall industry landscape, including a structural analysis of
the industry, as well as an understanding of market trends, social and technological changes,
major threats and opportunities, etc. Each group then must evaluate their particular firm’s
strategy for succeeding in this industry and make recommendations for the firm moving forward.
As part of this comprehensive analysis, each group will have to evaluate its competitors in the
industry, many of which are firms that are serving as the primary focus of other groups’ projects.

By the end of the semester, each group must hand in a 10-15 page paper (page count excludes
references and exhibits) detailing its comprehensive strategic analysis of the industry and the
firm to which it has been assigned. The document should be single-spaced, 12 point Times
New Roman Font, with 1 inch margins all around. Each group also will have to make a brief
presentation in class, summarizing its analysis and recommendations. I will invite a panel of
outside experts to class (faculty, alumni, etc.), and together with me, the panel will evaluate the
presentations and draw conclusions about which of the industry competitors are most likely to
succeed in the future, if they were to pursue the recommendations outlined by the student groups.
During the first few weeks of the semester, I will provide additional detail about the group
project. These instructions will include a detailed set of guidelines regarding the required
contents of the final written report and oral presentation.

At the end of the semester, you will be asked to evaluate your own and your peers’ contributions
to the group project. That evaluation will be used as part of the grading process for the group
project.

Office Hours

My door is always open. I look forward to getting to know each of you over the course of the
semester. My office hours will be:

      Tuesday, 4:00pm-5:30pm
      Wednesday, 5:00pm-7:30pm

If you would like to speak with me, and you cannot meet during office hours, please feel to email
(mroberto@bryant.edu) or call me (401-232-6155) to schedule an individual appointment.
Naturally, you can always reach me by email or phone if you simply have a quick question about
the course that does not require an in-person meeting. I am on email quite regularly and will
respond no more than 24 hours after receiving your message.

Over the course of the semester, I also will be scheduling several informal evening gatherings
(either before or after class). These gatherings will not be required. I am offering these
opportunities simply as a way for us to get to know one another better, as well as to talk about
issues that are beyond the scope of the course. I will have sign-up sheets in class for these
informal chats, and if you are interested, you can indicate your interest in attending at that time.