Dr. Armand Gilinsky
Professor of Business
Stevenson 2026F: 707.664.2709 (by appointment)
Sonoma State University
Rohnert Park, CA 94928 USA armand.gilinsky@sonoma.edu

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 2
Required text: Thompson, A. A., Strickland, A. J., and Gamble, J. E. (2008) Crafting and
Executing Strategy: Concepts and Cases , 16th ed., hardcover, McGraw-
Hill/Irwin, [website: www.mhhe.com/thompson ]
Instructor website: www.sonoma.edu/users/g/gilinsky/
Username: gilinsky
Password: TBA in class.
By accepting this learning contract, I (the student) also agree to abide by and comply with the terms of the University’s Honor Code.
Welcome to our Fall 2008 Strategic Management course!
My vision is to help you to generate world-class, cutting-edge business solutions. The overriding objective of this course is to provide the questions you need to ask to make the right decisions about the future of a business or non-profit organization. Strategic management entails generating choices to be made among competing alternatives to produce a competitive advantage and earn above-average returns.
Rapid technological change, mergers and acquisitions, increasing pressures for globalization, and changing local environments for businesses have heightened the urgency to ask the right questions about the future, such as:
1.
Which distinctive competencies should we be developing for our businesses?
2.
Where should we compete?
3.
How do we communicate our strategy to our stakeholders?
We will indeed be fortunate to have your collective wisdom as well as that of possible guest speakers from the business community to help guide us through complex strategic issues.
Learning objectives . The primary goal of this course is to teach you how to think and act strategically. By successfully completing BUS 491, you will learn:
1.
What are the interrelationships among the functional areas of an enterprise;
2.
How to develop and use skills in decision-making and oral and written presentation;
3.
How to analyze, formulate and implement strategies, especially the role of top management teams in performing these activities.
By the end of the course, you should be able to analyze thoroughly a company, its industry and its competitors and to recommend a well-supported strategy to your Board of Directors.
Course description. This course in business policy focuses on integrative, multifunctional approaches to the solution of organizational issues and problems. A practical perspective, rather than a merely theoretical one, is stressed via discussion of case studies. Why use a case-study approach? Three levels of learning take place:
1. We share the generalized insights of leading theoreticians;
2. We test the applicability and limits of these theories to specific case studies; and

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 3
3. You develop your own special amalgam of insights based upon empirical observations and inductive reasoning (from case analyses).
How are cases used in BUS 491?
• As discussion vehicles for probing the benefits and limits of certain approaches;
• To provide class members with opportunities to apply and test concepts and tools related to dimensions of management thought (e.g., marketing, accounting, finance);
• To help you to understand the nature of “better” answers, as well as the complexity of reaching solutions and implanting them in organizations.
What do you—as class member—need to do? First, understand what went on in that situation:
• What has changed?
• What are the key questions about the future that need to be answered?
• What further information is needed to answer those questions?
Major emphasis is placed on action and implementation, not just on analysis. Each case features a top management team (TMT) facing a specific set of issues and problems. So, during the course, you will have an opportunity to see a wide range of TMTs in action, and to think about their specific choices and actions as if you were the TMT in charge.
This course calls on you to integrate concepts of all other prerequisite business courses , i.e., bringing together and applying the learning from core courses to the analysis and solution of strategic management problems. The course is intended to enhance the following skills:
1. Your ability to decipher detail and to analyze information in order to identify and to diagnose the major problems and opportunities confronting business organizations;
2. Your ability to take a cross-functional, top management perspective in developing feasible overall strategies as well as specific problem solutions;
3. Your ability to decide from among alternative courses of action and to formulate feasible plans for their implementation;
4. Your ability to present a position and to defend it.
Study groups. You will be assigned to study groups consisting of four (or five) members, meeting regularly to discuss the cases and readings before they are discussed in class. Teams may not exceed four members without my permission. The aim of these groups is to share and critique individual analyses and to enhance class participation. Each day, class time will be set aside for meetings; as the course progresses, you may find it necessary to spend several hours meeting outside of class.
Class participation.
You should come prepared for class discussion of cases and supplemental readings, that is, with an outline or condensation of your case analysis, stating your perception of the underlying problem, some supportive data, and your recommended plan(s) of action. Bear in mind how difficult it is to assess your participation if you are absent from class!
Attendance will be taken . Your class participation grade will be based on: 1) evidence of careful preparation of the cases and readings; 2) clarity and conciseness of your analysis; and 3) strong and convincing presentation of your findings and conclusions. Guidance for class participation is on p. 12.

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 4
Performance evaluation. Strategic issues seldom have clear-cut or singularly “right” solutions.
This means that my evaluation of your performance will be based upon your managerial aptitude in problem diagnosis, generation of solutions, and communication of your position. I will be looking for demonstration of logical argumentation and consistency in your thought processes.
Grades will be based on your performance in (a) oral discussion and argument (defense) of your ideas and (b) written communication. These will be weighted as follows:
Class preparation, attendance & participation [see Guidelines, pp. 10–12] ........... 30%
Written case analysis [three (3) issue briefs, see Course Calendar, pp. 5–9] ......... 20%
In-class case presentation [see pp. 16-17] .............................................................. 10%
Final presentation [in class, 12/8, see pp. 16-17] ................................................... 20%
Final examination [due in class 12/15 at 5:00 p.m., see p. 15]............................. 20%
Total ......................................................................................... 100%
Written case analyses. In order to create opportunities for us to explore more basic strategy issues and discuss methods of formulation and implementation that might otherwise have to be rushed, we will be using an electronic submission format for Issue Briefs. Please submit your individual case analyses as an MS Word file attachment (double-spaced, Times New Roman 12 pt font, 1 inch margins) to me at gilinsky@sonoma.edu
with both the e-mail subject line and file name reading <CaseAbbrev.yourlastname.doc> (e.g., for for the Panera Bread Company,
PAN.Gilinsky.Doc, or for Costco, Inc., COST.Gilinsky.doc). Please use the following format:
1. Indicate your key case decision (what the GM needs to do now and why) in one succinct sentence (17-20 words, maximum);
2. Support your decision by three (3) bullet points – less than one line in length; use dimensions of strategic management thought; avoid judgment here; your three bullet points are essentially a table of contents (preview) to the rest of (body) of your analysis;
3. Add any qualitative and/or quantitative comments/discussion which you feel is/are necessary to substantiate your analysis. (1-2 page limit, about 250-500 words, plus exhibits, which should be numbered consecutively and referred to in the body of your analysis); and then
4. Conclude by restating the central problem or issue and recommendation for action, stating lessons learned about strategic management, linking to readings that you have gleaned from the textbook.
Do not answer the study questions!
Study questions (see Course Calendar, pp. 5-9) are intended to get you thinking about the issues in the case and to lead you through the process of analysis.
Issue Briefs are due by 8:00 a.m.
on class days for which Issue Briefs are assigned (see Course
Calendar, below). Timely submission of case analyses will facilitate review of your work as well as a summary of the section’s qualitative/quantitative comments. You should always keep a hard copy of your Issue Brief for yourself and bring this to class. Your Issue Brief will serve as a personal document from which you could lead a class discussion. Acceptable Issue Briefs are given a “check,” which is roughly equivalent to a “B” grade. Unacceptable or late submissions will be assigned a “check minus
,” roughly equivalent to a “C” grade.
Issue Briefs not submitted on the date due for any reason will be assigned an “F” grade.
An outstanding effort will receive

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 5 a “check plus
,” roughly equivalent to an “A” grade. Grading and coaching comments on your
Issue Briefs will be returned to you as soon as possible.

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 6
Final examination.
The final examination (see pp. 16–17) will consist of an oral presentation and a written case analysis, both prepared and submitted by your study group team. The final examination will give you the opportunity to present and write a lengthier case analysis and will be assigned a letter grade. NOTE: Written case analysis (issue brief) assignments due in the latter half of this seminar, i.e., after Week 7, will be weighted more heavily than those at the beginning.
Week 1 — Monday, September 8, 2008
Topics: Introduction, Framework for Strategic Analysis; Critical Thinking
Read:
Case:
Participate and do:
Watch and listen:
Syllabus (handout)
“Robin Hood” (T&S&G Case 22: C-318) [
RH ] (also on Syllabus, pp. 19–20)
Meet with study group partners; discuss Robin Hood [RH]: 6:00 – 6:50 p.m.
Class discussion of “Robin Hood”: 7:00–9:40 p.m.
Class cards and one-page résumé assignment (due next week)
Intro lecturette; Outro: Dead Poets' Society (video, in class)
Week 2 — Monday, September 15, 2008*
Topic I:
Assessing a Firm’s Financial & Cultural Health/Building Teams
Prepare: “A Note on Ratio Analysis” (see Syllabus, pp. 21-26)
T&S&G, Ch. 1, “What Is Strategy and Why Is It Important?”
Participate and do:
Don’t forget :
Topic II:
Your one-page résumé and class card (turn in both at the beginning of class)
Study groups: Calculate financial ratios from Kalari Burns case.
Review financial ratio analysis & class discussion: 6:30–8:00 p.m.
*One-page résumé and class cards (with snapshot) are due!
Core Purpose & Values Exercises (see pp. 14–15)
Manager’s Toolkit Exercise (in class – see p. 19): 8:20–9:40 p.m.
Week 3 — Monday, September 22, 2008*
Topic I:
Prepare:
Case:
Crafting & Executing Strategy – Processes & Leadership
T&S&G, Ch. 2, “The Managerial Process of Crafting & Executing Strategy”
“Costco Wholesale Corporation” [ COST ]
(T&S&G, Case 1: C-01)
* Issue brief due from each student by 8:00 a.m.
Participate and do: Study groups meet 6:00 – 6:50 p.m.
Class discussion of “Costco Wholesale Corporation”: 7:00–9:40 p.m.
Study questions for the COST case:
1.
What grade would you assign to CEO Jim Sinegal as a leader? Justify your answer.
2.
Evaluate Costco’s business model. Consider carefully the company’s mission, human resources practices, business philosophy, and code of ethics. What has Costco done well? Which areas should it focus upon for continual improvement?
3.
Evaluate Costco’s financial performance over the 2003-2006 fiscal years. Calculate financial ratios to support your evaluation. What stands out? What is in need of improvement?
4.
What should Costco do now to maintain its leadership position in the membership warehouse retail segment? How would you recommend that Sinegal proceed? Prioritize! What are the likely consequences of your recommendation(s)?

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 7
Week 4 — Monday, September 29, 2008
Topic:
Prepare/Read:
Case:
Industry Analysis and Competitive Positioning
Michael Porter’s “How Competitive Forces Shape Strategy” (website)
T&S&G, Ch. 3: “Evaluating a Company’s External Environment”
“Competition in the Bottled Water Industry in 2006” [ BWI ]
Participate and do:
(T&S&G, Case 4: C-48)
Study groups meet 6:00 – 6:50 p.m.
Class discussion of “Bottled Water Industry”: 7:00 – 9:40 p.m.
Study questions for the BWI case:
1.
Is the bottled water industry attractive? How do you know? Justify your evaluation!
2.
Perform a Porter “5 Forces” analysis of the bottled water industry. (T&S, pp. 54-74, and/or use the
Porter reading to guide your efforts). What do these 5 forces reveal about the opportunities for profitability in the bottled water industry? Which are strongest? Weakest?
3.
How would you characterize the competitive position(s) of each of the major bottled water companies’ mentioned in the case? Which are strong? Which are not so strong? Why?
Week 5 — Monday, October 6, 2008*
Topic:
Prepare:
Situation Analysis: Internal Assessment
T&S&G, Ch. 4, “Evaluating A Company’s Resources and Competitive
Position”; “A Note on Conducting Situation Analysis” (download from
Case:
Participate and do: instructor website)
“Panera Bread Company.” [
PAN ] (T&S&G, Case 8: C-85)
Study groups meet 6:00 – 6:50 p.m.
Class discussion of “Panera Bread”: 7:00 – 9:40 p.m.
* Issue brief due from each student by 8:00 a.m.
Study questions for the PAN case:
1. Describe the dominant business and economic characteristics of fast-casual segment of the restaurant industry. Which of these characteristics stand out?
2. Describe Panera Bread’s competitive strategy. Is this strategy well suited to its industry situation? To achieving management’s stated objectives, namely expanding the number of locations by 17% annually through 2010 and achieving earnings per share growth of 25% annually?
3. Perform SWOT and financial ratio analyses for Panera Bread; what stands out as strengths or weaknesses?
4. What recommendations would you make to Panera Bread’s management to improve the company's performance and outdistance its closest rivals?
Week 6 — Monday, October 13, 2008
Topic:
Prepare:
Case:
Competitive Advantage; The Resource-Based View of Strategy
T&S&G, Ch. 5: “The Five Generic Competitive Strategies”
“Ryanair” [ RYAN ] (T&S&G, Case 28: C-389)
Participate and do: Study groups meet 6:00 – 6:50 p.m.
Class discussion of “Ryanair”: 7:00 – 9:40 p.m.
Study questions for the RYAN case:
1.
Which key forces are driving competitive rivalry in the global passenger airline industry?

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 8
2.
How has RYANAIR chosen to compete in the airline industry? What is its generic strategy? Evaluate its success in developing this generic strategy.
3.
Which challenges does RyanAir need to meet and overcome now to stay ahead of rival air carriers?
4.
What recommendations would you make to CEO Michael O’Leary? Justify!
Week 7 — Monday, October 20, 2008
Topics:
Read:
Case:
Practicing Competitor Analysis: Entry Timing & Competitive Response
T&S&G, Ch. 6: “Supplementing the Chosen Competitive Strategy”
“Competition in Videogame Consoles” [
COMP ] (T&S&G, C-198)
Participate and do: Study groups meet 6:00 – 6:50 p.m.
Class discussion of “Videogame”: 7:00 – 9:40 p.m.
Study questions for the COMP case:
1. What are the key characteristics of the videogame industry? Describe the economic factors and driving forces, including Porter's 5 forces.
2. What does it take to be successful in this industry? List the Key Success Factors.
3. How important are product life cycles in this industry? What are some appropriate strategies to support products in various stages of the life cycle (embryonic, growth, mature, decline)?
4. Describe Nintendo's generic strategy. What are the key elements of this strategy? Use SWOT and financial ratio analyses to evaluate Nintendo's success in implementing this strategy to date.
6. Based on your answers to the above questions, what are some areas that Nintendo needs to address:
(a) immediately and (b) longer-term?
Week 8 — Monday, October 27, 2008
Topic:
Read:
Case:
How Should Firms Meet the Globalization Challenge?
T&S&G, Ch. 7, “Competing in Foreign Markets”
“Blue Nile Inc. – The World’s Largest Diamond Retailer” [ BN ] (T&S&G, Case
Participate and do:
5: C-62)
Study groups meet 6:00 – 6:50 p.m.
Class discussion of “Blue Nile”: 7:00 – 9:40 p.m.
Study questions for the BN case:
1. What are the dominant business and economic characteristics of the global diamond industry?
2. What does it take to become a world-class retailer in the global diamond industry?
3. Describe Blue Nile’s (BN's) competitive strategy in: (a) domestic (U.S.) and (b) international markets. What offensive and defensive strategies has BN management utilized to increase its competitive advantage in these markets?
4. Perform a financial ratio analysis for BN. Based on your analysis, how strongly is BN positioned?
5. What recommendations would you make to BN's CEO, Mark Vadon, to improve the company's performance both domestically and in international markets?
Week 9 — Monday, November 3, 2008*
Topics: Growth Strategies: Leading Change in Organizations
Prepare:
Case:
Participate and do:
Conducting Library Research ( meet in Shultz 2050 ): 6:00 – 7:00 p.m.
Rick Robison, Librarian
T&S&G, Ch. 8: “Tailoring Strategy to Fit Specific Situations”
“New Balance Athletic Shoe, Inc.” [ NB ] (T&S&G, Case 27: C-373)
Study groups meet 6:00 – 6:50 p.m.
Class discussion of “New Balance”: 7:00 – 9:40 p.m.

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 9
* Issue brief due from each student by 8:00 a.m.
Study questions for the NB case:
1.
2.
What are the key success factors for competing in the global athletic footwear industry?
Assess New Balance’s progress in creating and sustaining a competitive advantage. What are the
3.
elements of its success to date? Where is greater attention needed in the future?
How would you advise Jim and Ann Davis, the owners of New Balance, to proceed?
Week 10— Monday, November 10, 2008
Topic:
Read/review:
Case:
Participate and do:
Implementing Strategy: Governance and Social Responsibility
T&S&G, Ch. 10: “Strategy, Ethics, and Social Responsibility”
“Smithfield Foods” [ SF ] (T&S&G, Case 31: C-429)
Study groups meet 6:00 – 6:50 p.m.
Presentations (graded) by Teams 1&2 on “Smithfield Foods”: 7:00 – 9:40 p.m.
Study questions for the SF case:
1.
What does it mean to be a socially responsible corporation?
2.
What are the chief elements of Smithfield Foods’ strategy? How important is the vertical integration component of the company’s strategy in eastern North Carolina?
3.
Can Smithfield Foods’ strategy pass the test of moral scrutiny (as discussed in Chapters 1 and 10)?
Why or why not? Is it socially responsible for a company like Smithfield Foods to pursue a rapid growth strategy when that strategy poses environmental problems and adversely affects living conditions in the communities where it operates?
4.
What is your assessment of Smithfield Foods’ environmental policy? What is your assessment
Smithfield Foods’ “Strategy for Responsible Growth” and “Code of Business Conduct”? Do you think Smithfield is operating in accordance with these pronouncements?
5.
What do you see as the potential implications of retaining or abandoning the vertical integration strategy the company has used in eastern North Carolina, as Smithfield pursues growth and expansion in other parts of the U.S. and the world?
Week 11 — Monday, November 17, 2008
Topics: Leadership, Stakeholders, and Corporate Governance
Read/review:
Participate and do:
T&S&G, Chs. 11-13: “Strategy Execution, Operations, Culture, and Leadership”
Case: “Abercrombie & Fitch” [
AF ] (T&S&G, Case 26: C-357)
Study groups meet 6:00 – 6:50 p.m.
Presentations (graded) by Teams 3&4 on “A&F”: 7:00 – 9:40 p.m.
Study questions for the AF case:
1. Describe some of the business issues that retailers like A&F have faced during (and since) beginning of the twentieth century. To what extent have these issues changed in the last 100 years?
2. Should companies be free to hire employees who match the image their employer is trying to project?
3. Evaluate A&F's handling of relationships with its key stakeholders. Would you say that CEO
Michael Jeffries is doing a good job? Would you want to work for A&F?
4. Identify the critical success factors in the retail industry. How does A&F's position stack up compared to its rivals' positions?
5. Based on the above, what are the major priorities for A&F going forward?
Week 12 — Monday, November 24, 2008
Topic: The Benefits and Limits of Diversification

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 10
Read/review:
Case:
Participate and do:
T&S&G, Ch. 9: “Diversification: Strategies for Managing a Group of
Businesses”
“PepsiCo in 2007” [ PEP ] (T&S&G, Case 19: C-273)
Study groups meet 6:00 – 6:50 p.m.
Presentations (graded) by Teams 5&6 on “PepsiCo”: 7:00 – 9:40 p.m.
* Issue brief due from each student by 8:00 a.m.
Study questions for the PEP case:
1. Assess the attractiveness of the consumer foods industry using Porter’s Five Forces and prioritize the strengths, weaknesses, opportunities and threats for PepsiCo’s businesses.
2. Based on the T&S&G Ch. 9 reading and Michael Porter’s three tests for diversification (T&S&G, p.
270), is PepsiCo better off with its portfolio of businesses?
3. How would you recommend that PepsiCo’s CEO, Indra Nooyi, proceed? What actions would you suggest that she take in order to implement your plan?
4. What lessons can we learn from this case about corporate diversification? What are some of the preconditions for success in this area?
Week 13 — Monday, December 1, 2008
Topic:
Read/review:
Participate and do:
Implementation and Review of Strategy Options
T&S&G, Chs. 1-13
Final Case: To be announced
Teams join and work on Final Examination and Presentations
Watch and discuss: Wrap-up lecture and tips for the final examination assignment!
Week 14 — Monday, December 8, 2008
Participate and do: Team Final Presentations [Teams] – see schedule on p. 15 .
Week 15 — Monday, December 15, 2008 @ 5:00 p.m.*
Participate and do: Turn in Final Examination paper
Course Evaluations: attendance mandatory
*Team Final Examination Papers due

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 11
SUGGESTED GUIDELINES FOR APPROACHING A CASE
In approaching a case, keep in mind that there is no single, right solution. Each case describes a complex situation and there may be a number of equally valid analyses. Try to put yourself in the place of the person who is facing the problem(s) and who is required to make decisions and act.
You may want to consider the following factors in your analysis. This list is far from complete, but I hope it will be a helpful start.
1. What is the problem—or problems? You may want to list the problems and prioritize them. Are the problems short-term, long-term, new to the organization, chronic, etc.?
2. What is the time framework? How urgent is the situation?
3. What is the nature of the organization? Who are the key people involved? What are the key relationships?
4. What industry, competitive, economic factors/trends are significant? How do they influence the current situation? How do they influence future action?
5. What financial information is important (costs, cash flow, ratios, margins, etc.)?
How do these data impact your analysis and recommendation?
6. What are the significant marketing considerations? What is the product or service? Who is your market? How do you price, promote, distribute?
7. What are the significant production/operational considerations? How and where do you produce? Are the operations labor-intensive? capital-intensive? What lead times are required?
8. What are the key human resource management issues? How do they impact on your course of action, particularly in its implementation?
9. What business are you in? What is the organization’s strategy? Is it consistent across functions? What are the risk of/potential rewards from retaining this strategy?
After analyzing the case, generate as many solutions as you deem appropriate. Consider the risks/tradeoffs involved in each alternative and then decide what you would do in the situation and why. What is your plan of action? (be specific) How are you going to implement it? (be specific) Be prepared to support your recommendations, but remain open to different, possibly better ideas.

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 12
TAKE-HOME FINAL EXAM: TIPS FOR DOING WELL
Suggested guidelines for preparing the written case analysis for the final examination:
Summary & Preview. Present a very brief overview of the managerial problem to be solved or challenge to be mastered and what action(s) need to be taken. Consider the context in which a decision needs to be made. Develop a situation analysis , consisting of a brief (4 to 5 sentence) statement of the organization’s mission, generic and subsequent strategies, and present state of affairs. Follow this with a statement of the recommendation that will be proposed. Front-load your writing! Keep in mind that you are asked to take the perspective of the General Manager.
Industry/Environmental Analysis. Describe and analyze the major factors, characteristics, or trends external to the organization that impact the strategic issues in question.
Organizational Characteristics. Summarize the strategy being pursued by the organization and its resulting strengths and weaknesses in relation to its competitors and/or external environment.
Strategic Problems/Issues. As a result of the analyses in the two preceding sections, certain significant potential opportunities and threats facing the organization should begin to emerge.
Reasonable Alternatives to Consider. From among the strategic issues identified in the preceding section, develop a range of feasible strategies or plans of action. Show how alternative strategies may be ranked across a risk-reward spectrum . What are the tradeoffs? Careful assessment of proposed actions and potential outcomes lends credibility to your argument. Typically, the best papers are those that do a superior job of generating/evaluating alternatives.
Identification and Implementation of Selected Strategy. The most desirable alternative from the preceding section should be elaborated in sufficient detail to let your reader know what is to be done and why . Explain the interdependencies among facets of the strategy and offer some indication of the economic, competitive, and environmental consequences over time. What are some of the issues to be addressed in implementing the proposed strategy? Consider feasibility, cost, resource needs, timing, and fallback position(s).
Conclusion/Next Steps. Briefly summarize and re-state the central issues covered in your analysis. Let your reader know what you expect to be done next to follow-up your analysis and recommendations.
Supporting Calculations/Documentation. Prepare evidence to support the arguments you are making. Exhibits such as tables, diagrams, charts, graphs, etc. should be numbered consecutively, placed at the end of your paper, and explained in the body of your analysis.
Original (i.e., library) research and production of visual aids typically distinguish better from mediocre papers. Caveat : avoid reproduction of published data, articles, web pages, etc. A good rule of thumb is: do not use an exhibit unless it is the result of original thinking and analysis (e.g., number-crunching, summation, or visualization).

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 13
CLASS PARTICIPATION
As Woody Allen once quipped, “80% of life is just showing up!” Your contributions to case dialogues will be evaluated on the basis of the following:
1. Your understanding and appreciation of case facts;
2. Your analysis of case data through the use of functional area techniques and general management concepts in the readings; and
3. Your recommendations for management decision and action that arise from analysis.
Below is a checklist to help you evaluate and improve your effectiveness in class discussions:
___ Are you a good (active) listener? Are the points that you are making relevant to the discussion? Are they linked to the comments of others? Are you willing to interact with other class members?
___ Have you demonstrated an ability to suspend judgment?
___ Do you show an ability to ask good questions (inquire and reflect)?
___ Are you willing to challenge assumptions?
___ Do your comments add to our understanding of the situation?
___ Do your comments show evidence of analysis of the case (case preparation)?
___ Do you distinguish among different kinds of data such as facts, opinions, beliefs, concepts, etc.?
___ Do you demonstrate a willingness to share knowledge?
___ Are you willing to test new ideas, or are all comments made “safe”? (An example of a “safe” comment is repetition of case facts with no analysis or conclusions.)
___ Do your comments clarify and highlight the important aspects of earlier comments and lead to a clearer statement of the concepts being covered?
My assessments of your participation will be made on the basis of your attendance and preparedness for class, your responses to questions that arise in dialogues, as well as your voluntary participation.

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 14
I.
The “Empire’s DeathStar” game
Suppose you could sell your business to someone who would pay a price that everyone inside and outside the company agrees is more than fair (even with a very generous set of assumptions about the expected future cash flows of the company). Suppose further that this buyer would guarantee stable employment for all your employees after the purchase—but with no guarantee that those jobs would be in the same industry. Finally, suppose you were to learn that the buyer plans to kill your company after the purchase: its products and/or services would be discontinued, its operations would be shut down, its brand names would be shelved forever, etc. Your company would utterly and completely cease to exist. Would you accept this offer? Why or why not?
What would be lost if your company were to cease to exist? Why is it important that your company continue to exist?
II.
The “I Won the Lottery” game
You are a top-level manager in your organization. Suppose you woke up tomorrow morning and discovered that you suddenly had enough money in the bank to retire—comfortably. Would you nevertheless keep working for this organization? What deeper sense of purpose would motivate you to continue to dedicate your precious time and creative energies to this company’s efforts?

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 15
efficiency initiative environmentalism power control courage competition excitement creativity happiness honor innovation sustainability financial growth community support integrity peace loyalty clarity security love
What should our organization, department, unit, or study group team stand for? What should be the values by which we operate? Look over the list of values below. Circle any values that “jump out” because of their importance to you. Then write your top three values, in order of importance, below the list. Feel free to add values, if needed. truth persistence sincerity fun relationships wisdom flexibility perspective commitment recognition learning honesty originality candor prosperity respect fairness order spirituality adventure cooperation humor collaboration resources dependability trust excellence teamwork service profitability freedom friendship influence justice quality hard work responsiveness fulfillment purposefulness strength self-control cleverness success stewardship support
1. ____________________________________________________________________________
2. ____________________________________________________________________________
3. ____________________________________________________________________________
Source: K. Blanchard & M. O’Connor (1997),
Managing by Values , San Francisco: Berrett-Kohler, p. 112.

BUS 491 (03): M 6-9:40p
Fall, 2008
FINAL EXAMINATION
Dr. Gilinsky/page 16
CASE:
READINGS:
TEAM CASE PRESENTATIONS:
WRITTEN ANALYSIS DUE:
TBA [Value = 40% of course grade, 20% for your team’s case presentation + 20% for the team paper]
Review Thompson, Strickland & Gamble text (all)
Monday, December 8, 2008 in class.
Please see schedule below.
Monday, December 15, 2008, in class @5:00 p.m.
(Late papers will be lowered one full grade for each day overdue)
FORMAT: Review Syllabus: Case Analysis Guidelines
Study group teams will be assigned a case to be announced. Teams should prepare a 20-minute presentation of the case and a 5-page paper addressing the following questions. Each presentation should allow for additional 10 minutes of Q&A. Be polished and professional: external judges may be present!
1.
Describe this company’s strategy in the last 5 years. [33%]
2.
Evaluate this strategy, in the context of the competitive pressures the business faces. Conduct financial ratio analysis. Perform an industry and competitor analysis. To do these analyses, you may need to conduct some primary or secondary research. [33%]
3.
How would you advise the CEO and her/his team to proceed? Prepare an action plan for this company. Generate and evaluate long-range strategic alternatives against a stated set of goals and objectives. Show your financial forecasts and underlying assumptions behind those forecasts.
Discuss how the chosen alternative should be implemented. [33%]
Recommendation: outline your answers prior to writing . Do not spend time regurgitating case facts or photocopying exhibits from published or electronic sources. All work must be original . In grading the examination, my emphasis will be on analysis, formulation and implementation of competitive strategy .
Front-load your writing! Your written analysis should not exceed five (5) typed, double-spaced, 8 1/2 x
11 pages, exclusive of exhibits . No cover pages or binders, please. Please type your name, the title, and the page number in the upper right-hand corner of each page. Cite primary and secondary research sources in standard bibliographic format. Exhibits and endnotes should be numbered consecutively (i.e.,
1, 2, 3,…) and presented at the end of your paper; be sure to refer to them in the body of your analysis.
Submit your case analysis on December 15th in hard copy format only. Keep a copy of your paper for yourself, as your originals will not be returned to you . Course grades may be requested via e-mail. Be present and prepared to question other presenters on December 8th. Attendance will be taken at both sessions.
6:05 p.m.
Team 6
6:40
Team 4
7:25
Team 5
8:00
Team 2
8:35
Team 1
9:10
Team 3

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 17
TEAM PRESENTATIONS
Teams should prepare a 20-minute presentation of the assigned case covering the topics below. Each team should prepare for an additional 10 minutes of Q&A.
1.
Identify the decision facing this organization; clearly state your recommended solution and why.
2.
Perform an analysis of the company’s internal situation and external environment, including industry
& competitors. Caution: some analytical tools may be more appropriate than others .
3.
Substantiate your analysis with facts and data from the case. Answer the “So what?” question .
4.
Develop alternative solutions, in the context of the competitive pressures the organization faces.
5.
Prepare an action plan for this organization.
6.
Generate, list, and evaluate short and long-range strategic alternatives.
7.
Show clearly why your recommendation is superior to other alternatives.
8.
Discuss how the chosen alternative should be implemented and if it is feasible.
9.
Create a timeline and implementation plan.
10.
Show evidence of professionalism, polish, teamwork, and clarity.
11.
Prepare appealing visual aids, handouts and vocal techniques that support your presentation. NOTE: put your team number, team members’ names, and the presentation date in the upper-right hand corner of any handouts you create.
12.
Involve each member of the team in the presentation and Q&A session.
NOTE: TEAMS MUST BE PUNCTUAL.

BUS 491 (03): M 6-9:40p
Fall, 2008
BUS 491— Seminar in Strategic Management
Sheet
REVIEWER’S NAME _________________________________
TEAM NUMBER _____________________________________
[Key: 0 = Marginal; 1 = Satisfactory; 2= Superior]
PROBLEM IDENTIFICATION
Specified problem and solution
Depth of understanding of issues
Logical call to action
0
0
0
1
1
1
2
2
2
ANALYSIS
Internal assessment & financial analysis
External and competitive assessment
Factual support and relevance
0
0
0
1
1
1 2
2
2
RECOMMENDATIONS
Reasonable range of alternatives 0
Appropriateness of alternatives
Risks & contingencies clearly identified
0
0
Implementation timeline 0
Feasibility in terms of know-how, time, cost 0
TEAMWORK & PRESENTATION
Visual aids, sharing of workload, clarity, effectiveness in Q&A
1
1
1
1
1
2
Marginal = 0
Satisfactory = 1
Superior = 2
2
2
2
2
TOTAL POINTS
Team Presentation Score
DATE: _____________________
[Comments]
Dr. Gilinsky/page 18
Total (0-6) ---------------------------------
Total (0-6) ---------------------------------
Total (0-10) ---------------------------------
Total (0-2)
---------------------------------
-------------------------------

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 19
NOTE: Total possible points = 24 points. A = 20–24 pts., B = 16–19 pts., C = 12–15 pts., D = 9–11 pts., F = < 9 pts.

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 20
MANAGER’S TOOLKIT EXERCISE

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 21
Joseph Lampel, New York University
It was the spring of the second year of his insurrection against the High Sheriff of Nottingham that Robin Hood took a walk in Sherwood Forest. As he walked he pondered the progress of the campaign, the disposition of his forces, the Sheriff's recent moves, and the options that confronted him.
The revolt against the Sheriff had begun as a personal crusade. It erupted out of
Robin's conflict with the Sheriff and his administration. However, alone Robin
Hood could do little. He therefore sought allies, men with grievances and a deep sense of justice. Later he welcomed all who came, asking few questions, and demanding only a willingness to serve. Strength, he believed, lay in numbers.
He spent the first year forging the group into a disciplined band, united in enmity against the
Sheriff, and willing to live outside the law. The band's organization was simple. Robin ruled supreme, making all-important decisions. He delegated specific tasks to his lieutenants. Will
Scarlett was in charge of intelligence and scouting. His main job was to shadow the Sheriff and his men, always alert to their next move. He also collected information on the travel plans of rich merchants and tax collectors. Little John kept discipline among the men, and saw to it that their archery was at the high peak that their profession demanded. Scarlock took care of the finances, converting loot to cash, paying shares of the take, and finding suitable hiding places for the surplus. Finally, Much the Miller's son had the difficult task of provisioning the ever-increasing band of Merrymen.
The increasing size of the band was a source of satisfaction for Robin, but also a source of concern. The fame of his Merrymen was spreading, and new recruits poured in from every corner of England. As the band grew larger, their small bivouac became a major encampment. Between raids the men milled about, talking and playing games. Vigilance was in decline, and discipline was becoming harder to enforce. 'Why', Robin reflected, 'I don't know half the men I run into these days.'
The growing band was also beginning to exceed the food capacity of the forest. Game was becoming scarce, and supplies had to be obtained from outlying villages. The cost of buying food was beginning to drain the band's financial reserves at the very moment when revenues were in decline. Travellers, especially those with the most to lose, were now giving the forest a wide berth. This was costly and inconvenient to them, but it was preferable to having all their goods confiscated.
Robin believed that the time had come for the Merrymen to change their policy of outright confiscation of goods to one of a fixed transit tax. His lieutenants strongly resisted this idea.
They were proud of the Merrymen's famous motto: 'Rob from the rich and give to the poor.' 'The farmers and the townspeople,' they argued, 'are our most important allies. How can we tax them, and still hope for their help in our fight against the Sheriff?'
Robin wondered how long the Merrymen could keep to the ways and methods of their early days.
The Sheriff was growing stronger and becoming better organized. He now had the money and the men, and was beginning to harass the band, probing for its weaknesses. The tide of events was beginning to turn against the Merrymen. Robin felt that the campaign must be decisively

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 22 concluded before the Sheriff had a chance to deliver a mortal blow. 'But how,' he wondered,
'could this be done?'
Robin had often entertained the possibility of killing the Sheriff, but the chances for this seemed increasingly remote. Besides, killing the Sheriff might satisfy his personal thirst for revenge, but it would not improve the situation. Robin had hoped that the perpetual state of unrest, and the
Sheriff's failure to collect taxes, would lead to his removal from office. Instead, the Sheriff used his political connections to obtain reinforcement. He had powerful friends at court, and was well regarded by the regent, Prince John.
Prince John was vicious and volatile. He was consumed by his unpopularity among the people, who wanted the imprisoned King Richard back. He also lived in constant fear of the barons, who had first given him the regency, but were now beginning to dispute his claim to the throne.
Several of these barons had set out to collect the ransom that would release King Richard the
Lionheart from his jail in Austria. Robin was invited to join the conspiracy in return for future amnesty. It was a dangerous proposition. Provincial banditry was one thing, court intrigue another. Prince John had spies everywhere and he was know for his vindictiveness. If the conspirators' plan failed, the pursuit would be relentless, and retribution swift.
The sound of the supper horn startled Robin from his thoughts. There was the smell of roasting venison in the air. Nothing was resolved or settled. Robin headed for camp promising himself that he would give these problems his utmost attention after tomorrow's raid.
© Joseph Lampel 1991
Study Questions
1.
What is the key decision that Robin has to make now?
2.
What is he trying to accomplish?
3.
How would you rate his performance as entrepreneur/strategist? What is he doing well?
Not so well?
4.
What options are available to him now?
5.
What do we learn from this case study about strategy?

BUS s491
Summer, 2008
Dr. Gilinsky/page 23
A NOTE ON ASSESSING THE FINANCIAL HEALTH OF THE FIRM –
THE CASE OF KALARI BURNS, INC.
How do we assess the financial health of the firm? Let’s take a look at Kalari Burns, a company that makes diet plans, as an example. Kalari Burns competes with Jenny Craig and Weight Watchers.
• Key issue in assessing the long-term financial health of a firm is whether or not the corporate system of goals, product-market strategies, investment requirements, and financing capabilities are in balance .
• Also depends on the perspective of the person asking the question.
• Has the condition of the company changed over the four-year period? How?
• What changes are most significant , as indicated by financial ratios?
• What is the context in which these changes took place?
A. Steps: 1. Look at Kalari Burns’ financial statements [see Exhibit 1 ]
2. Calculate ratios:
—Profitability
—Activity
—Leverage
—Liquidity
B. Profitability ratios—How profitable is the company?
• Profit after tax as a % of sales (ROS)
• Operating profits as a % of total assets (ROA or ROI)
• Profit after tax as a % of equity (ROE)
One measure of a business’s profitability is its “profit as a percentage of sales” as determined by the profitability ratio equation: profit after taxes net sales
The information necessary to determine a company’s profits as a percentage of sales can be found in the company’s
.
1. Kalari Burns’ profit as a percentage of sales for 2004 ( divided by $ or %. see Exhibit 1 ) was $
2. This represented an ( ) increase or ( ) decrease from % in 2000.
3. The improvement in profitability resulted from an ( ) increase or ( ) decrease in cost of goods sold as a percentage of sales and from an ( ) increase or ( ) decrease in operating expenses as a percentage of sales. The only adverse factor(s) was/were the increase(s) in the .
4. Management and investors often are more interested in the return earned on the funds invested than in the level of profits as a percentage of sales. Companies operating in businesses (e.g, computer software, service bureaus, employment agencies) requiring very little investment in assets often have low profit margins but earn very attractive returns on invested funds. Conversely, there are numerous examples of companies in

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 24 very capital-intensive businesses that earn miserably low returns on invested funds, despite seemingly attractive profit margins (e.g., public utilities, telecommunications companies).
Therefore, it is useful to examine both the level and the trend of the company’s operating profits as a percentage of total assets (ROA aka ROI). To increase the comparability across companies within the same industry, it is useful to use profits before taxes and before any interest charges (earnings before interest and taxes or EBIT).
This allows the analyst to focus on the profitability of operations without any distortion due to tax factors and/or the method by which the company has financed itself.
Kalari Burns had a total of $ earned (before interest and taxes)$ invested in assets at year-end 2004 and
during 2000. Its operating profit (as a percentage of total assets) is calculated as follows: profit before taxes + interest charges total assets
In 2004 this figure was from % in 2000.
%, which represented an ( ) increase or ( ) decrease
5. From the viewpoint of the shareholders, as equally important figure is the company’s return on equity (ROE). Return on equity is calculated by dividing profit after tax by the owner’s equity: profit after taxes owners’ equity
It indicates how profitably the company is utilizing shareholders’ invested funds.
Kalari Burns had a total of $ earned (after taxes)$ of owners’ equity at year-end 2004 and
during 2004. Its ROE was %, which represented an ( ) improvement or ( ) deterioration from % earned in 2000.
C. Activity ratios—Are there any hidden problems?
The second basic type of financial ratio is the activity ratio. Activity ratios indicate how well a company employs its assets. Ineffective utilization of assets results in the need for more finance, unnecessary interest costs, and a correspondingly lower return on capital employed. Furthermore, low activity ratios and/or a deterioration in the activity ratios may indicate uncollectible accounts receivable or obsolete inventory and equipment.
“Total asset turnover” measures the company's effectiveness in utilizing its total assets and is calculated by dividing total assets into sales: net sales total assets
As with any other ratio, caution must be exercised due to timing and basis of sales (cash v credit) and valuation of assets (e.g., age and collectability of accounts receivable, LIFO v
FIFO inventories, method of depreciation used to value net fixed assets, etc.).
1. Total asset turnover for Kalari Burns in 2004 can be calculated by dividing

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 25
$ deteriorated from
into $
times in 2000.
. The turnover ( ) improved or ( )
2. Since the use of total assets may mask important changes in one of the specific asset categories, it may be useful to examine the turnover ratios for each type of asset. Exhibit
2 gives some examples:
• average collection period (days)
• inventory turnover (times)
• fixed asset turnover (times)
3. So far, we have discussed three measures of profitability: they are
(1)
(2) and
. (3)
We have also discussed four activity ratios which measure the effectiveness with which return on equity. However, it also increases the riskiness of the business and, if used in excessive amounts, can lead to default or liquidation.
1. The improvement in Kalari Burns’ profitability, as measured by its return on equity, from 5.8% in 2000 to 16% in 2004, resulted from the combined impact of
, and .
2. The financial riskiness of Kalari Burns ( ) increased or ( ) decreased between 2000 and
2004.

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 26
E. Liquidity ratios—Is the company able to meet current obligations as they become due?
The fourth basic type of financial ratio is the liquidity ratio (see Exhibit 2 ). These ratios assume that, if the company is struck by adversity, current assets are much more readily and assuredly convertible into cash than fixed assets. They also enable the financial manager to consider and project the amount of working capital (short-term financing) needed to pay next year’s (or even next month’s) bills. The current ratio —dividing current assets by current liabilities—relates these fairly liquid assets to the claims that are due within one year—the current liabilities. The quick ratio (or “acid test”) is similar to the current ratio but excludes inventories from the current assets because it is assumed that they often are difficult to convert into cash, particularly if inventories are comprised mainly of work-in-progress rather than resalable raw materials or finished goods.
Remember…
Not enough to crunch numbers
Also need to look beyond numbers, see what they mean
How does this company’s financial performance stack up against other firms in the diet plan industry?
Study Questions
1. How was Kalari Burns doing in 2004, relative to 2000?
2. Is this a financially well-managed company? How do we know?
3. Where do you see areas of strength? weakness?
4. What contextual factors might influence your analysis?

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 27
Exhibit 1— Kalari Burns, Inc., Income Statements and Balance Sheets: 2000 and 2004
All numbers in $000 Consolidated Income Statements
Ending Dec. 31
Net sales
Cost of goods sold
Gross profit
Operating expenses (exc. depreciation)
Depreciation
Interest expenses
2000
$44,991
23,715
$21,276
17,508
1,570
1,041
2004
$70,100
33,504
$36,596
26,208
2,030
1,418
Income before taxes
Federal income taxes
Net Income
$1,157
82
$1,075
$6,940
3,200
$3,740
At Dec. 31
Assets
Cash
Accounts receivable
Inventories
Net fixed assets
Total current assets
Total assets
Consolidated Balance Sheets
2000 2004
$639 $1,079
11,936
14,672
$27,247
6,518
$33,765
18,145
24,162
$43,386
7,706
$51,092
Liabilities and Stockholders' Equity
Notes payable—banks
Accounts payable
Accrued expenses and taxes
Long-term debt
Stockholders' equity
Total current liabilities
Total liabilities and stockholders' equity
$8,480
2,154
1,660
$12,294
3,088
18,383
$33,765
$2,719
6,528
7,482
$16,729
11,230
23,133
$51,092

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 28
Exhibit 2 — Kalari Burns, Inc., Financial Ratio Analysis: 2000 and 2004
I. Profitability
II. Activity
III. Leverage
IV. Liquidity
Return on Sales
Return on Assets
Return on Equity
Total asset turnover (x)
Average collection period, days
Inventory turnover (x)
Fixed asset turnover (x)
Debt:Assets
Debt:Equity
Long-term debt:Equity
Times interest earned (x)
Current ratio (x)
Quick ratio (x)
V. Compound Annual Growth Rates (CAGR)
4 yrs. CAGR, Sales
4 yrs. CAGR, Net Income
Total Assets
Formula
Total debt/ Total assets
Total debt/
Shareholders' equity
Long-term debt/
Shareholders' equity
Earnings before interest and taxes/
Interest charges
Current assets/
Current liabilities
Current assets –
Inventories/
Current liabilities
Profit after taxes/
Net sales
Profit bef. taxes +
Interest charges/
Total assets
Profit after taxes/
Owners' equity
Net sales/
Total assets
Accounts receivable/
Net sales/365 days
Cost of goods sold/
Inventories
Net sales/
Net fixed assets
2000 2004 Remarks

BUS 491 (03): M 6-9:40p
Fall, 2008
Dr. Gilinsky/page 29
B u l l l l s h i i t B i i n g o
Do you keep falling asleep in meetings and seminars? What about those long and boring conference calls? Here is a way to change all of that!
How to play : Check off each block when you hear these words during a meeting, seminar, or phone call.
When you get five blocks horizontally, vertically, or diagonally, stand up and shout
BULLSHIT
!!
Synergy Strategic Fit Core
Competencies
Best Practice Bottom Line
Revisit Take That
Offline
24/7 Out of the
Loop
Benchmark
Value-Added Proactive Win-Win
Think Outside the Box
Fast Track
I’ll Get Back to You
Empower
[or]
Empowerment
Knowledge
Base
At the End of the Day
Touch Base
Going
Forward
Ball Park
“C” Level
Game Plan Leverage
Testimonials from satisfied players:
“I had only been in the meeting for five minutes when I won.” -Jack W. - Boston
“My attention span at meetings has improved dramatically.” -David D. - Florida
“What a gas. Meetings will never be the same for me after my first win.” -Bill R - New York City
“The atmosphere was tense in the last process meeting as 14 of us waited for the 5 th box.” -Ben G. -
Denver
“The speaker was stunned as eight of us screamed 'Bullshit' for the third time in 2 hours.” - Kathleen L. -
Atlanta