Preliminary — Subject to Change
Version: 20140510
International Business
!!
Professor:
Office Hours:
Technion - 2014
Hart E. Posen (hposen@bus.wisc.edu)
By appointment
!
*Syllabus Version: 20140510. Please see footnote for revisions since prior version.
!!
1
Course Overview and Learning Objective
!
The International Business course is an advanced strategy course that will enhance your abilities to
develop strategies for competing in the fast-changing global business environment. My aim is to help you
develop the analytical skills necessary assume a leadership role by cultivating the ability to make wellgrounded and uncommonly insightful recommendations as to how the business actually is or should be
competing globally. A (global) strategy must define a specific problem or opportunity, the scope of the
firm's activities, the logic through which the activities result in better performance, and what it is about
the firm that allows it to better carry out those activities than its competitors.
The course is organized around two central ideas. First, we challenge the naive logic that "going
global" is a strategic imperative, and instead, treat it as a choice that must be weighed on its own merits.
Second, we challenge the popular rhetoric of a “flat world,” and instead, recognize the enduring role of
economic and institutional differences across countries. While these differences create challenges in
tapping foreign markets, differences are the source of opportunity on the supply side. As a consequence,
the key take-away from the course is a framework and set of analytical tools for developing global
strategic initiatives that create value by bridging country differences or leveraging similarities.
In order to capture the pragmatic, action-oriented nature of the general manager’s job, and the
complexity of the general manager’s context, this course is taught through the case method. We will
supplement case discussions with readings, lectures, and “live cases.” Live cases are firm global strategy
issues currently under discussion in the business press — we will apply the frameworks directly to these
live cases as a means of developing a deeper understanding of the current business strategy landscape.
!
Assignments and Evaluation
! Evaluation in this course is learning oriented — designed to help you assess your progress and
understanding of strategy. Evaluation will include both individual and group based assessments.
Participation (22%). Attendance is a basic requirement of the course. Beyond this, the learning
process requires that you carefully prepare the cases/readings before class and actively participate during
the class discussion — answer questions, raise questions, and argue (constructively). Participation enables
you to learn from your colleagues and to help them learn from you. I may call upon you to start the
discussion or answer specific questions during the class.
1
Changes from version 20140402: (1) Group project details updated — please read these details carefully. (2) Change session
order, swapping sessions 6 and 7. Note quiz is now in session 7.
!1
Preliminary — Subject to Change
Version: 20140510
Electronic Polls (8%). Related to participation in-class is preparation and thought in advance of class.
As indicated on the schedule, there are 4 polls. Grading is only on the basis of poll completion (not on the
content of your responses). I will provide links to these polls on Moodle. The polls close at midnight the
evening before the class session.
Quiz (20%). There will be one quiz, which will be administered at the start of Session 6. The quiz will
cover theoretical material and frameworks, as well as questions specifically related to your analysis of the
Zara case. The quiz is close notes, books, computers etc. You are permitted to discuss the Zara case with
your classmates as a means of preparing.
Group Project (50%): The group project is on Netflix’s global strategy. You have been hired by
Netflix CEO Reed Hastings in 2010 to make recommendations for Netflix’s global strategy. There is a
Netflix case in your course pack. I provide it to give you some basic background, but it does not
substantially discuss global issues. You will need to engage in additional research on your own. You are
encouraged, to discuss your project with me at anytime during the course. You are NOT permitted to
discuss the assignment with anyone outside of your group. To discuss the project outside of your group
constitutes a violation of the ethics code. Students have been randomly assigned to groups (see below).
The assignment includes two deliverables.
• Deliverable 1 (15%) is due at the start of Session 5 and includes a presentation (only).
• Assess Netflix’s competitive advantage in the US market.
• Consider industry attractiveness (average value capture) and competitive advantage (value
creation and isolating mechanisms protecting capture of created value).
• What is the problem/opportunity Netflix’s global strategy will address?
• The presentation may include up to 5 slides plus a title page.
• Presentations will last 7 minutes, plus up to an additional 7 minutes during which time I will
ask you questions about your analysis.
• Please submit the presentation via email as a pdf document, and bring a printed copy to class.
Late submissions will not be accepted and will be given a grade of zero. Name you PDF
document “Del1-[group #].pdf”. e.g, Del1-1.pdf
• Deliverable 2 (35%) is due at the start of Session 8 and includes a presentation and a written report.
• Formulate a global strategy to address the problem/opportunity.
• Identify what (countries), when (now or later), why (better-off test), and how (ownership
test)
• Construct a clearly articulated argument for the global strategy.
• Better-off test: Netflix creates more value by engaging in the strategy you propose,
rather than some other strategy?
• Ownership test: Netflix captures more value by employing the governance mechanism
(own, JV, alliance, contract) you propose?
• The presentation may include up to 5 slides plus a title page.
• Presentations will last 7 minutes, plus up to an additional 7 minutes during which time I will
ask you questions about your analysis.
• The written report is due, as a printed hard copy, at the start of the final class (Session 8). Late
submissions will not be accepted and will be assigned a grade of zero. Please also submit to me
via email the report and slides in a single PhD document. Late submissions will not be accepted
and will be given a grade of zero.
!2
Preliminary — Subject to Change
Version: 20140510
!
!
• Report formatting details.
• The main body of the report must not exceed 2 pages in length (single spaced, 12 pt Times
New Roman font).
• You may include up to 2 pages of exhibits (tables and graphics that support the claims in
the body of the report only).
• You should include a title page with your group number and the names of each of the
members of your team.
• You should include a citations page containing endnotes identifying the sources of
information used in the write-up. Each endnote should be numbered and have a matching
(referring) endnote number in the document body or exhibits.
• Space is very limited. You will need to identify the core issues and analyses and focus narrowly
on them. Furthermore, you will need to be concise and persuasive in your writing.
• Please submit via email the presentation and written component in a single pdf file, and bring a
printed copy to class. Late submissions will not be accepted and will be given a grade of zero.
Name you PDF document “Del2-Group[#].pdf”. e.g, Del2-Group1.pdf
Project groups (randomly assigned)
!3
Preliminary — Subject to Change
Version: 20140510
Academic Integrity
!
The assignments above and on the schedule are clearly marked as individual or group – there should
be no confusion. I expect you to uphold the highest standards of academic integrity and these are enforced
in the school. The penalties are rather severe and violators typically get the most serious of the alternative
penalties. I don’t relish the thought of putting anyone through this but it behooves all of us to make sure
that academic integrity is taken seriously.
!
Prof. Hart E. Posen — Bio and Teaching Philosophy
!
Dr. Posen is an internationally recognized scholar conducting research on innovation
strategy. His research and teaching is informed by a prior engagement as an entrepreneur
in the technology and retail sectors. He is regularly invited to lecture on issues of strategy
to academic and corporate audiences in North America, Europe, and Asia.
Dr. Posen holds a PhD in Strategy from the Wharton School at the University of
Pennsylvania. He is currently an Associate Professor of Management at the University of
Wisconsin. He was previously on faculty at the University of Michigan, and has held
affiliate appointments at Seoul National University (S. Korea), the Technion (Israel), and
the University of Zurich (Switzerland).
In studying innovation strategy, Dr. Posen's research focuses on what he terms the
“knowledge generation-erosion cycle." He studies the process of knowledge generation
that leads to innovative products, processes, and intellectual property. He also studies the
mechanisms by which the value of this knowledge is eroded. Employing computational
and empirical methods, Dr. Posen studies technological change, competition by entrants,
and the enduring possibility that the innovator does not survive. He currently focuses on
knowledge spillovers to rivals resulting from imitation and the consequences of different
imitation strategies.
!
Dr. Posen's research is regularly published in leading strategy journals. He holds
influential editorial board positions at journals including: Academy of Management
Journal, Administrative Science Quarterly, Organization Science, Strategic Management
Journal, and Strategic Organization. His commentary on economic issues has appeared in
a variety of media outlets including the New York Times and BBC.
My teaching style is highly interactive. We will build an understanding of strategy through discussion
and debate. In the process, I hope that your will learn a great deal — transform your understanding of
what accounts for performance differences across firms, and how to use strategy to generate superior
performance. I also hope that the class experience will be engaging and enjoyable.
!
Course Outline and Schedule
!
The course is divided into three modules (plus an introduction) that explore different aspects of
Global Strategy. For each session, I’ve indicated the topic, theory/framework and case readings,
preparation questions, and individual polls. You are responsible for coming to all classes fully prepared —
if there is confusion about materials or assignments, it is your responsibility to contact me to ask for
clarification. There is no textbook for this course. All materials used in the course are listed below. I will
provide any additional materials.
!4
Preliminary — Subject to Change
Version: 20140510
Session
Topic and Readings
Case and Preparation
Introduction to Global Strategy: Globalization
and its Consequences for Strategy!
!
!
1
Go Global or No?!
• Readings!
• Rumelt: The Perils of Bad Strategy, McKinsey
Quarterly!
• Friedman (2005). “Friedman: It's a Flat World,
After All”. New York Times!
• Ghemawat (2007). "Why the world isn't flat".
Foreign Policy!
• Friedman (2007). "Is the world flat (Reply to
Ghemawat)". Foreign Policy
• What do you think Friedman means by a ‘flat world’?!
• If Friedman is correct, what is the implication for firm strategy? What is
the implication for DataClear?!
• Should DataClear go global?
I. Leveraging Firm-Specific Advantage
Global Opportunities - Assessing the Potential
to Adding Value!
!
2
!
DaimlerChrysler Post-Merger Integration (A)!
• Framework/Theory!
• Ghemawat: Global Value Creation: The
ADDING Value Scorecard!
!
!
• Reading!
• Carmaking: A drive to Lego Land (FT.com)!
• Take Schrempp's position. Would you pursue the Chrysler merger?!
• Of the various categories of potential gains from global merger that might
make the merged entity better off than its two components, which ones
were targeted by DaimlerChrysler? Which ones were not?!
• What, in your view, is the single most significant explanation for the
limited success of the integration process?!
• Does increased cross-border integration generally mandate industry
consolidation? Why or why not?
• Poll 1
3
Country Differences and the Potential to Add
Value!
!
!
• Framework/Theory!
• Ghemawat, Distance Still Matters, HBR!
!
Jollibee Foods Corp. (A): International Expansion!
!
• Poll 2!
• How did Jollibee build its dominant position in fast food in the Philippines?!
• Did Tony Kitchner (the first head of Jollibee’s international division) put in
place a sensible global strategy? Be prepared to explain your answer.!
• As Noli Tingzon, how would you deal with the three options described at
the end of the case?
II. Leveraging Locational Advantage
Leveraging Locational Advantage of Common
and Less-Common Varieties!
!
4
!
!
• Framework/Theory!
• Ghemawat: Arbitrage-Exploiting Differences!
• Porter - The Competitive Advantage of Nations!
!
!
• Reading!
• Live cases (TBA)!
!
Palliser Furniture Ltd.: The China Question!
• As Art DeFehr, how would you evaluate the competitive pressures from
Asia? What are the implications for Palliser’s strategy?!
• Should Palliser invest in China now? Why?!
• If Palliser invests in China, is the strategy is viable in the long run?!
!
Live Case discussion!
• Apply course ideas to current global-strategy news stories. I will provide
links to the news articles in advance of class.
• Poll 3
5
!
Leveraging Locational Advantage in Knowledge
Based Industries!
!
!
• Framework/Theory!
• Khanna & Palepu - Emerging Giants: Building
World-Class Companies in Developing
Countries!
Tata Consultancy Services Iberoamerica!
• Poll 4
Netflix!
• DELIVERABLE 1 — PRESENTATION (1st hour of class)
!
!
• How has the Indian software industry managed to perform much better
than most other Indian industries in international competition?!
• How sustainable are the Indian software industry's advantages in
international competition? What are its growth prospects?!
• What is your assessment of the Tata’s globalization strategy?!
!5
Preliminary — Subject to Change
Version: 20140510
Session
Topic and Readings
Case and Preparation
III. Advanced Topics in Global Strategy
6
Lincoln Electric!
Leveraging and Foregoing Firm- and LocationSpecific Advantage!
!
!
ZARA: Fast Fashion!
!
7
!
Entry Mode Decision (and Adaptation of
Complex Knowledge)!
!
!
• Framework/Theory!
• Piskorski: Choosing Corporate and Global
Scope
Quiz!
• 20 minutes in length.!
• Closed book and notes.!
• Covers theoretical issues in the course, as well
as specific questions related to Zara.!
• To aid your preparation for the quiz, I will
provide a set of very specific set of Zara
preparation question that will serve as a guide.!
!
!
• Is Lincoln considering going to India to leverage their firm-specific
advantage or the unique locational advantage of India?!
• When Lincoln Electric goes to India what factors should determine how
much it adapts its pay-for-performance management practices to local
norms?!
• If you were to expand into India, which factors would inform your
decision among the entry mode choices (acquisition, greenfield, JV,
License)? Why?!
• In which countries is Lincoln Electric likely to be most or least
successful? Why?
• Evaluate Zara’s global strategy.!
• The question above reflects are main point of discussion of the Zara
case in class.!
• We will proceed to discuss the Zara case after the quiz is complete.!
!
!!
Wrap-Up Class!
• Group Project due at start of class.!
!
!
Netflix!
!
!
8
• DELIVERABLE 2 — FINAL PRESENTATIONS AND SUBMISSION OF
WRITTEN REPORT. !
• Presentations will use the first hour of class.!
• We will discuss the term project case — an evaluation of Netflix’s global
strategy.!
Live Cases!
!
!
!
!
!
!
!
• Apply course ideas to current global-strategy news stories. Each student
must identify one instance of global strategy currently (or recently) in the
news. There must be a reasonably informative news article to
accompany the story (please identify one or two key articles). Each
student will submit their article by Session 6. I will announce the articles
that will be used in class. As preparation for this session, read the
selected articles, and engage in research and analysis to address the
global strategy issue.
!6
Preliminary — Subject to Change
Version: 20140510
Reading List
!
McKinsey Quarterly
Rumelt: The Perils of Bad Strategy,
New York Times
Friedman (2005). “Friedman: It's a Flat World, After All”.
Foreign Policy
Ghemawat: Why the world isn't flat
Foreign Policy
Friedman: Is the world flat (Reply to Ghemawat)
HBR
Go Global or No
R0106X
HBS
Ghemawat: Global Value Creation: ADDING Value Scorecard
2620BC
FT.com
Carmaking: A drive to Lego Land (Financial Times)
HBS
DaimlerChrysler Post-Merger Integration (A)
9-703-417
HBR
Ghemawat: Distance Still Matters
R0108K
HBS
Jollibee Foods Corp. (A): International Expansion
9-399-007
HBS
Ghemawat: Arbitrage-Exploiting Differences
2624BC
Ivey
Palliser Furniture Ltd.: The China Question
904M05
HBR
Porter: The Competitive Advantage of Nations
90211
HBR
Khanna & Palepu: Building World-Class Companies in Developing Countries R0610C
HBS
Tata Consultancy Services Iberoamerica
9-705-020
HBS
ZARA: Fast Fashion
9-703-497
HBS
Piskorski: Choosing Corporate and Global Scope
9-707-496
HBS
Lincoln Electric
9-707-445
HBS
Netflix
9-607-138
!
!
!
Reading List ** NOT INCLUDED IN COURSE PACK — I WILL DISTRIBUTE IN CLASS **
HBS
!
!
Jollibee Foods Corp. (B): Global Focus
!
!
!
!
!
!7
9-399-113