STRATEGIC MANAGEMENT
AREA: STRATEGY
INTERNATIONAL M.B.A.
PROFESSOR:
SESSIONS: 20
MANUEL BECERRA
E-mail: manuel.becerra@ie.edu
Professor and Accenture Chair in Strategic Management
Metaphorically speaking, Manuel Becerra puts on a different hat for each of his three activities teaching, research and consulting - for he believes that they should all be approached
differently.
"There is certainly some overlap," he says. "But a researcher needs to think through
assumptions and hypotheses. A teacher must convey ideas in clear ways. And a consultant
must help solve problems for business. So we have three audiences. We should be proficient in
communicating with all three and they require different approaches."
An important audience for the business school professor consists of the readers of academic
journals, and Prof. Becerra has contributed to publications such as the Academy of
Management Review, Academy of Management Journal, Organization Science, and Journal of
Finance. In this academic role, he has been a member of the editorial board of prestigious
journals like the Academy of Management Review, Journal of Management, and Journal of
International Business Studies. His recent book Theory of the Firm for Strategic Management
reviews the extant academic literature in one of the few texts specifically written for advanced
students and doctoral programs in strategy.
However, material developed through writing, research, consulting and teaching can be applied
elsewhere, and Prof Becerra's knowledge of value creation, corporate strategy,
internationalization and organisational processes means that he is now highly valued by leading
companies as a professor for their executive programmes. As an acknowledgment of his
outstanding teaching expertise, he received the 2005-08 IE Excellence Teaching Award.
But again, he says that dealing with top executives is very different from the classroom
experience. "In the MBA, like most of the faculty here, I teach a lot of theory through cases," he
explains. "But top executives don't want theory - they want you to help solve their specific
problems." Certainly, this is what can be required from a complete, top-level scholar in strategy.
Academic Background
PhD in Strategic Management, University of Maryland, College Park, USA
MSc in Management, University of Southern California, Los Angeles, USA
Degree in Economics and Business Administration, Universidad Complutense de Madrid, Spain
Academic Experience
Professor of Strategic Management, Instituto de Empresa, Spain, 1999 to present.
Previously at IE Business School: Strategy Department Chair and Academic Director for the
Global Senior Management Program (GSMP joint program with the University of Chicago).
Visiting Professor at Fudan University (China), BI-Norwegian School of Management (Norway),
and Michigan State University (USA).
Published by IE Publishing Department.
Last revised, December 2010
1
GOALS OF THIS COURSE
In this introductory course to the area of strategic management, the students will be exposed to
the analysis of complex competitive situations that require a multidisciplinary approach from the
perspective of top management. Through the discussion of cases, the course focuses on
strategic analysis and how to build competitive advantage at the business and corporate levels
in our global economy. The main theories, models, and tools within the field of strategy will be
covered with a strong emphasis in strategic analysis and decision-making.
COURSEWORK
Before each session, the students should read the case and the article assigned for the day.
Participation is an important element for learning in this course. To participate effectively, it is
necessary to have read carefully and formed a sound opinion about the main issues raised in
the reading material. To facilitate your analysis of the case, the course outline identifies a few of
the questions that will be discussed in class. Though participation is very important for learning,
it will have limited effect on your actual grade, so that only outstanding participation and lack of
sufficient participation/attendance will receive a separate high or low grade.
At the end of the course there will be an exam. This in-class exam will consist of questions
about the material covered in the course, which will applied to a short case or article from the
economic press. During the exam you will not have access to the course material, but the exam
will not be an exercise of memorization. However, you may use a computer and any material
you have inside of it, except Internet and any communication such as email or chat. Note that if
you have not read and assimilated the material in the textbook, articles, and cases, you will not
be well prepared to address the questions. The exam will consist of two conceptual questions
about strategy, plus one longer question based on a real case for which you will have to do
some analysis and provide specific recommendations.
The teams assigned for the class will give a formal presentation at the end of the course. The
first set of groups (usually groups 1-5) will give one presentation in Session 18 about one
industry of their choice. The teams will make a presentation to analyze the main features of the
industry, how firms compete in it, key success factors, strategic groups, current financial
performance, and the main strategic challenges that they will face in the future. These
presentations should conclude with the teams’ assessments of the future of the industry and
their expectations in 3-5 years. The second set of groups (6-10) will give a different type of
presentation in Session 19. The goal of this presentation is to compare and contrast the strategy
of two firms in the same industry (GM vs. Toyota, Telefonica vs. Vodafone, Walmart vs.
Carrefour, etc). It is absolutely necessary to choose two firms that allow the group to identify
differences in strategy and performance. The teams should not analyze the industry, but they
should focus directly on the differences between the two firms, to what degree they follow
different strategies voluntarily, which one has better results, and why the second firm cannot
match the performance of the superior firm. The presentations should provide recommendations
to what each firm should do in the future.
The presentations will be 10-minutes long plus Q&A. Each team should provide a 1-page
summary of the main ideas in their presentation as handout to all students and professor.
Please note that you cannot use a traditional case as background information for the
presentations, because your original research is an important part of this assignment. Each
group will announce their choice of industry or two firms during Session 10. Those teams not
making a presentation that day will evaluate the presentations of the set of teams making a
presentation. Taking into consideration these evaluations, the professor will assign the grade.
2
PROGRAM
COMPETITIVE STRATEGY
SESSION 1: Basics of strategy
Reading:
- Grant, chapter 1: The concept of strategy.
SESSION 2: Industry analysis
P.C.: The ready-to-eat breakfast cereal industry in 1994 (A) (HBS 9-795-191)
- Why was the RTE cereal industry so profitable for so many decades?
- What effect have the white labels had in the industry?
- Will this industry regain its previous high-level profitability?
Reading:
- Grant, chapter 3: Industry analysis: The fundamentals.
SESSION 3: Market positioning
P.C.: The ready-to-eat breakfast cereal industry in 1994 (B) (HBS 9-796-122)
- Was General Mills’ decision to cut its prices correct?
- What should Kellogg do in response to General Mills’ decision?
- How can Kellogg compete with the white-label firms?
Reading:
- Grant, chapter 7: The nature and sources of competitive advantage.
SESSION 4: Cost leadership
P.C.: Dollar General (A) (HBS 9-607-140)
- How has Dollar built its cost advantage?
- Should Dollar compete directly against Wal-Mart?
- What recommendations would you provide to Dollar regarding its strategic alternatives?
Reading:
- Grant, chapter 8: Cost advantage.
SESSION 5: Differentiation
P.C.: Cola Wars Continue: Coke and Pepsi in 2006 (HBS 9-706-447)
- Why are Coke and Pepsi so profitable?
- Why did Coke change its formula for the New Coke in the eighties? Why did it fail?
- What are their main strategic challenges for the next five years?
Reading:
- Grant, chapter 9: Differentiation advantage.
SESSION 6: Industry dynamics
P.C.: Bitter competition, The Holland sweetener company versus Nutrasweet (A&B) (HBS 9794-079 & 9-794-080)
- Was Monsanto´s acquisition of Nutrasweet a good decision?
- Was it reasonable for Nutrasweet to start a price war in Europe?
- What should HSC do in Europe against Nutrasweet? In the U.S.? In Canada?
Readings:
- Grant, chapter 4: Further topics in industry and competitive analysis.
- Grant, chapter 10: Industry evolution.
SESSION 7: Strategic resources
P.C:
EnClean, Malcolm Waddell´s story A (HBS 9-794-115)
- Why was EnClean successful during its first ten years?
- Why did EnClean go near bankruptcy in 1992?
- What would you recommend to Mr. Waddell?
Reading:
- Grant, chapter 5: Analyzing resources and capabilities.
SESSION 8: Innovation and setting standards
P.C.: Browser wars (HBS 9-798-094)
- How did Netscape come to dominate the browser market?
3
- Why was MS Internet Explorer able to displace Netscape?
- Can Firefox and other browsers win over MS Explorer?
Reading:
- Grant, chapter 11: Technology-based industries and the management of innovation.
SESSION 9: Value creation
P.C.: Innovation at Progressive (A) (HBS 9-602-175)
- How do auto insurance firms create value for customers?
- Which auto insurers can have greater profitability?
- Should Autograph be launched nationally?
Reading:
- Kim and Mauborgne (2004). Blue ocean strategy, Harvard Business Review, October.
CORPORATE STRATEGY AND GLOBALIZATION
SESSION 10: Corporate strategy
Reading:
- Grant, chapter 15: Diversification strategy
SESSION 11: Diversification and the corporate office
P.C.: PepsiCo, A view from the corporate office (HBS 9-694-078)
- Why did PepsiCo expand its operations beyond soft-drinks?
- What value did PepsiCo provide to its three business units in the 1990’s?
- Is the beverage-restaurant vertical integration economically reasonable?
Reading:
- Grant, chapter 13: Vertical integration and the scope of the firm
SESSION 12: Managing the diversified corporation
P.C.: Newell: Corporate strategy (HBS 9-799-139)
- How does Newell corporate office add value to its business units?
- Were the acquisitions of Calphalon and Rubbermaid correct?
- What changes in Newell’s corporate strategy would recommend looking towards the future?
Reading:
- Grant, chapter 16: Managing the multi-business corporation.
SESSION 13: Acquisitions and diversification
P.C.: Vivendi A&B (HBS 9-799-019 & 9-703-418)
- Assess how Dejouany decided the strategic direction for its corporation.
- Was correct the corporate strategy set by Messier for Vivendi?
- Why did Fourtou change Vivendi’s corporate strategy?
Reading:
- Becerra, chapter 7: Corporate strategy (Theory of the firm for strategic management,
Cambridge University Press).
SESSION 14: Internationalization process
P.C.: Jollibee Foods Corporation: International expansion (HBS 9-399-007)
- What were the strategy and the competitive advantages of Jollibee in the Philippines?
- Was the international strategy followed by Kitchner correct? Why did it fail?
- What should Tingzon do which regard to Hong-Kong, the U.S., and New Guinea?
Reading:
- Grant, chapter 14: Global strategies and the multinational corporation.
SESSION 15: Global strategy
P.C.: Philips and Matsushita: Preparing for a new round (HBS 9-302-049)
- Analyze the strategy followed by Philips and Matsushita. How and why do they differ?
- Why was it so difficult for Philips the globalization of its strategy?
- Who is better positioned to compete in the future?
Reading:
- Gupta and Govindarajan (2001): Converting global presence into global competitive
advantage. Academy of Management Executive. 15(2): 45-58.
4
SESSION 16: Strategy and leadership
P.C.: Acer Inc: Taiwan´s rampaging dragon (HBS 9-399-010)
- What role has Shih played in the early success of Acer? ¿Was it necessary to change its initial
strategy?
- Assess Liu´s strategy for Acer. Where did he go wrong?
- What did Shih do regarding the American subsidiary and the Aspire?
Reading:
- Grant, chapter 17: Current trends in strategic management.
SESSION 17: What is a good strategy, really?
P.C.: Apple in 2008 (HBS 9-708-480)
- Why did Apple almost go bankrupt in the mid-1990s?
- Why have the iPod and the iPhone been so successful?
- How should Apple determine in what businesses it should be present?
Reading:
- Hambrick and Fredrickson (2001): Are you sure you have a strategy? Academy of
Management Executive, 15(4): 48-59.
SESSION 18: Team Presentations on industry analysis.
10-minute presentation from the first set of teams in class (teams 1-5).
Presenting teams should distribute a handout (1 page long) to each person in the class.
Key questions to address in the industry analysis:
- Is this industry profitable on average? Why?
- Which are the keys for success in this industry?
- How would you expect the industry to evolve in the next three-five years?
- What impact can it have in the strategies and the resources of the firms in this industry?
SESSION 19: Team Presentations on competitors’ comparison
10-minute presentation plus written report from the second set of teams.
Presenting teams should distribute a handout (1 page long) to each person in the class.
Key questions to address in the strategic analysis of two competitors:
- Which strategy is each company following?
- How do they differ in their strategy? Why have they followed different paths?
- Which firm has better performance? Is the difference sustainable?
- Which recommendations would you give to each firm?
SESSION 20
Exam (computer allowed, but not the textbook)
EVALUATION
Class participation
Team presentation
Exam
20 %
30 %
50 %
COURSE MATERIAL
- Package with cases and articles.
- Textbook: Robert Grant. Contemporary Strategy Analysis. Blackwell Publishers. The chapter
numbers and titles in the syllabus are based on the 7th edition of this book, but any previous
edition of the book may also be used.
5