Harvard University
Extension School
Business Strategy in the Real World
MGMT E-5002 (24183), January 2016
Dr. Daniel Deneffe
Course Syllabus (v. Nov 9 2015)
COURSE LOGISTICS
Meeting times:
Monday, Tuesday, Wednesday and Thursday from 5.30 to 8.30pm
Location:
Maxwell Dworkin G125
Email:
danieldeneffe@fas.harvard.edu
Office hours:
Every day after class
Course website:
Courses.harvard.edu/course/ext-24183/2016/winter
ABOUT DANIEL C. DENEFFE, PHD
Dr. Daniel Deneffe is an independent strategy consultant and a Senior Advisor to a number of
strategy consulting companies. Prior to going on his own in 2013, he was a consultant with Arthur
D. Little for 18 years, which he joined in 1995 and where he was elected to partner 5 years later.
Deneffe’s areas of expertise include



corporate and business unit strategy
marketing strategy
pricing, bidding and sales excellence
Deneffe has applied his expertise in projects world-wide (Europe, US, Latin America, Middle East,
Asia Pacific, Australia) and across a wide range of industries (including cars, trucks, FMCGs,
alcoholic beverages, beer, food, financial industries, chemicals, pharmaceuticals, vaccines, biotech,
medical devices, disposable medical supplies, general and psychiatric hospitals, consumer durables,
construction, cement, engineering and manufacturing industries, perimeter protection solutions,
telecom operators, telecom hardware and software suppliers, payroll services, coach services, radar
warning systems, insulation materials, specialty metals, precious metal refining, electric utilities,
electricity grid operators, public services).
At Hult Deneffe teaches Managerial Economics and Global Strategy. Deneffe was elected Professor
of the Year 18 times, the Hult record. Prior to joining Arthur D. Little, Deneffe was a full time
faculty member at Duke University’s Fuqua School of Business. He has published widely in Arthur
D. Little’s Prism but also in journals such as Management Science, Harvard Business Review, the
International Journal of Industrial Organization, Managerial and Decision Economics, and Health
Policy. He obtained his PhD from Cornell University’s Economics Department.
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COURSE DESCRIPTION AND OBJECTIVES
This course is about how to develop, tailor and apply decision-making frameworks to real world
strategy problems. It complements standard strategy courses in a number of important ways:
1. Content focus on short to medium term margin improvement
Standard strategy courses typically provide conceptual approaches to formulate business unit or
corporate level strategies to establish sustainable competitive advantage. This is important and
hence the core of these concepts will also be reviewed here.
The vast majority of the current course content will focus on hands-on tools and frameworks that
help strategic and marketing managers formulate strategy to obtain short-to medium term
advantages rather than long term competitive advantage. We focus on this as in the real world long
term sustainable positions are often difficult and in many industries close to impossible to obtain.
In addition, the horizon of many managers is often to obtain margin improvement within 1 to 3
years and not necessarily competitive advantage in the long run.
2. Focus on how to apply frameworks
In standard strategy courses a number of important and theoretically sound frameworks of analysis
are introduced. This course builds on them but focuses on the how question: Which framework is
relevant for what problem? What are the key operational steps to approach a strategy problem (e.g.,
entry into a market) and how does the sequence of steps differ depend on the problem. And, most
importantly, how does one tailor frameworks and make them operational for decision making and
tailored to the specific company and industry situation.
The rationale for this focus is that many graduates that take on positions in strategy or marketing
functions typically have a fair amount of difficulties in tailoring and make sound frameworks
operational to real world decisions. This course should help at reducing this problem.
3. Focus on real world process and limitations
In standard strategy case based courses students typically learn to provide strategic solutions from
given case information. A real world strategy case often has a blank sheet as a starting point, not
an existing case. Many business graduates suffer from this ‘blank sheet’ problem. The key
difficulty is the real world is not only to make decisions based upon information from a case but to
first ‘fill the sheet’ with relevant information to address the problem. As a result, the class will use
a mix of HBS cases as well as the instructor’s disguised real world (disguised) cases to answer the
following questions: (1) How do we gather the right information to address a strategy issue, given
real world informational constraints and (2) How do we process that information for improved
decision-making?
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CLASS FORMAT AND COURSE REQUIREMENTS
Class Format
Class sessions will consist of lectures and case discussions. The lectures will supplement the
reading materials to explore the basis analytical arguments. The cases will illustrate how these
concepts can be applied in specific strategic situations. For cases that do not need to be turned in,
you need to carefully prepare and answer the discussion questions at the end of this syllabus. Your
class contribution grade will be affected by the quality of your participation in these case
discussions.
Class Preparation
Preparing well for, regularly attending and fully contributing is extremely important in this course.
You are expected to prepare carefully for case discussions and to read the assigned material before
class. You may be asked questions on the assigned materials. Your ability to do so or lack thereof
will be evaluated and this evaluation will strongly affect your class participation grade.
Case write-up
You are required to submit the Ice-Fili case. The write-up is an individual effort. You are
expected to answer the discussion questions for the cases that are attached at the end of this
document.
The write-up should solely be based upon the information in the case. Using any information
outside the case description is strictly prohibited and will automatically result in a zero (0) on the
case. You are not allowed to exchange any answers or files electronically and doing so will
automatically be considered plagiarism. Plagiarized work will also result in a zero (0) grade on
the case.
The write-up must be uploaded on the course webpage BEFORE session 4 (January 7 at
5.30pm).
In-class quiz
There will also be an in-class quiz on the last day of the 2nd week (session 8). Here your
understanding of the concepts covered in class will be evaluated by means of multiple choice and
true-false questions.
Group real world Strategy Recommendation and Project Plan
In this project, you will be asked to first select a company that has either been experiencing
deteriorating performance in its current markets or is expected to experience such performance or
limits to profitable growth in its current markets. This could be for a variety of reasons that we
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went thru in class (entry by new players, better substitutes, slow or negative market growth and
the like).
For that company, you will write a report of between 6 and 9 single-spaced pages, plus
appendices. This report requires that you perform the following
1. Write a Situation-Complication-Question (Max 1 page): In a nutshell, this requires that you
briefly summarize the past performance of the company (Situation), explain the reasons for the
(expected) deteriorating performance (Complication) and the questions that you will address in
this report (Question)
2. Generate strategic options (1 to 2 pages): Come up with a number of strategic options (3 to
5), using a number of the tools discussed in class (eg inside-out idea generation) that could
improve future company performance.
3. Evaluate the various options (2 to 3 pages) along the key dimensions: (1) an assessment of
attractiveness of the market/segment to which the option applies and (2) and assessment of the
future competitive position of the selected company in these markets/segments (tools to do so
will be provided in the course). This is a two-step process: (1) define the criteria for
market/segment attractiveness and future competitive position and (2) evaluate the options on
each of these criteria. Plot the options then on the Strategic Position Matrix.
4. Select the one option with the highest potential (1 to 2 pages)
On the basis of the above analysis and of a number of other constraints (company mission,
short/long term horizon) you will be asked to select the one with the highest potential and explain
your choice. You will also need to detail the vision that you have for the future on a number of
strategic dimensions (product, price positioning etc.) by writing up a 1/2 page vision statement
(for your company’s internal use) on a number of strategic dimensions of your future market
positioning.
5. Write up a high level project plan to define further the operational strategy (Max 1 page)
After the selection of a strategic option, it needs to be refined along a number of dimensions to
answer questions such as: Which product/service features should it have? At what price? What
is the Unique Selling Proposition? Which potential resources should be acquired? What are
potential partners to work with etc. This is then also the input for the business plan. A key input
for this are (potential) customers’ interviews. While for this project you are not expected to
gather any customer data, you are expected to set up a high level 1 page project plan that explains
the way forward: How you would gather and process the necessary information to answer your
questions (Eg whom will you interview, how many interviewees, how to contact them, how to
incentivize them etc.) and refine the selected strategic option.
For this project, you will need to do a fair amount of research about the company and the industry
and can use any publically available information to do so. Do always properly cite your sources
in the write-up. To do well on this assignment you will need to draw heavily on the type of
analyses performed in class, and understand their benefits and limitations. There is no single
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correct way of performing the above and the evaluation of your performance will be based upon
the foundation for the approach taken.
A major take-away of this assignment is that learn in a hands-on way how difficult the above
really is (given the imperfect information) and that you nonetheless have to make important
strategic decisions based on such information.
The deadline for submitting the name of the company and a max 1 page explanation of its
(expected) deteriorating performance by the beginning of our 5th meeting on January 12 (this
submission will eventually be the first deliverable of the project).
The report must be uploaded BEFORE the beginning of the optional final session (Session 11,
January 21 at 5.30pm)
Group real world workshop presentation
In session 8, I will provide you with disguised information of an actual real world situation in which
a cement company is being attacked by low priced imports. The management team disagrees
internally on how to respond. Interviews reveal that these can be boiled down to four options, one
of which is the launch of a fighting brand. A review of the literature reveals that no frameworks
exist to address these specific questions so you will be asked to ‘get your hands dirty’ to generate a
sensible framework.
You are asked to prepare a 4 page workshop document based on templates provided by me to help
management come to an agreement quickly. Volunteer teams will be present and the class will be
the management team that challenges the presenting teams. You need to upload your document
BEFORE the beginning of session 10 (January 20 at 5.30pm)
If any of your individual or group write-ups are late but are submitted within the first hour after the
due date, you will receive a 50% ‘discount’ on the grade. Write-ups submitted more than an hour
late will neither be graded nor accepted.
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GRADING
Assessment form
% of final grade
Individual case write-up
25%
Group real world workshop presentation
15%
In-class quiz
15%
Group strategy project
30%
Class contribution
15%
Assignment Ice-Fili individual case write-up
Weighting (% of final grade): 25%
Description of Assignment: Read Ice-Fili case and answer the 3 discussion
questions related to the case that will be posted.
Quality Indicators (how will it be A good assignment is one that
graded; what constitutes a good 1. Is well structured and professionally written
assignment) 2. Is solidly founded based upon the understanding
of external analysis
3. Is maximally using quantitative and qualitative
evidence in the case rather than personal beliefs
In addition, students will receive extra credit for
participating in the discussion related to each of the
case questions
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Assignment Group real world workshop presentation
Weighting (% of final grade): 15%
Description of Assignment: Prepare sound workshop document to align
management team on selecting the most effective
strategic option
Quality Indicators (how will it be A good assignment is one that:
graded; what constitutes a good 1. Generates a sound framework of analysis
assignment): 2. Uses the disguised information to suggest a
convincing solution
3. Consists of a professionally written workshop
document that is to the point (‘less is more’
principle)
Assignment In-class quiz
Weighting (% of final grade): 15%
Description of Assignment: Testing of material covered in session 1 thru 7 thru
multiple choice and true/false questions
Quality Indicators (how will it be Correct answer
graded; what constitutes a good
assignment):
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Assignment Group strategy project
Weighting (% of final grade): 30%
Description of Assignment: Company Strategy Recommendation and Project
Plan
Quality Indicators (how will it be 1. Is well structured and professionally written
graded; what constitutes a good 2. Is solidly founded based upon the understanding
assignment): of the tools of Grand and Operational Strategy
covered in-class
3. Is maximally using quantitative and qualitative
evidence
4. Presents clear decisions made
Assignment Class contribution
Weighting (% of final grade): 15%
Quality Indicators (how will it be 1. Attendance;
graded; what constitutes a good 2. Extent to which the class participant
assignment): demonstrated his/her mastery of the case and other
readings;
3. Proactive and constructive attitude;
4. Listening skills;
5. Quality (not quantity) of the comment(s)
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Academic Integrity
Common sense warning: Just as ethics and integrity are important in management practice,
academic integrity is important in this course. Please take the time to familiarize yourself with
the Harvard’s policies on academic integrity, which can be found at
http://www.extension.harvard.edu/exams-grades-policies/student-responsibilities. I also highly
encourage you to take two online tutorials created by the Harvard Extension School
http://www.extension.harvard.edu/resources/career-academic-resource-center/plagiarism-properuse-sources) to help you understand common scenarios and what constitutes plagiarism. Other
resources include, The Harvard Guide to Using Sources
(http://usingsources.fas.harvard.edu/icb/icb.do). Please visit and use these sites to avoid any
unintentional errors. It is important to understand the standards to which you will be held;
ignorance of the standards will not be considered an excuse for violating them.
COURSE MATERIALS
There is an eTextbook, called Business Strategy in the Real World. This consists of the first 8
chapters of the textbook by Roethaermel, Frank, Strategic Management, McGraw-Hill, 2015.
You can locate and purchase the book online by following these simple steps:
1. Go to http://create.mcgraw-hill.com/shop/
2. Search for and select book
by Title: Business Strategy in the Real World or
by ISBN: 9781308694238
3. Add the book to your cart and pay using a credit card or access code.
The course pack contains readings and cases. You can obtain the coursepack from Harvard
Business Publishing by using this unique link:
https://cb.hbsp.harvard.edu/cbmp/access/42842225
What you should read prior to class can be found in the class schedule below.
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Class Schedule1
CLASS
TOPICS
CASES AND READINGS
1
1/4/2016

Objectives and
constraints of real world
strategy



eTextbook, Chs 1 and 5
Optional eTextbook, Ch. 6
Chris Bradley, Angus Dowson and Sven Smit,
The Strategic Yardstick you can’t chose to
Ignore, McKinsey Quarterly, Oct 2013
2
1/5/2016

The ideal world:
Sustainable Competitive
Advantage (SCA)

Pankaj Ghemawat and Jan W. Rivkin, Creating
Competitive Advantage, HBS note 2006
Rita Gunther McGrath, Transient Advantage,
HBR, June 2013
Strategy diagnosis and
quick win generation




Real world in-class case (Deneffe, 2006):
Performing a strategy diagnosis and generating
quick wins at a diversified intermediate
chemicals company
Real world in-class case (Deneffe, 2014):
Generating quick wins at a provider of security
solutions
3
1/6/2016

External analysis
(industry analysis) –
conceptual framework


eTextbook, Ch.3
Thomas R. Eisenmann, Geoffrey Parker and
Marshall W. Van Alstyne, Strategies for TwoSided Markets, HBR, October 2006
4
1/7/2016

Real world applications
of real world industry
analysis

Daniel Deneffe, Julie Vandermeersch and
Gregory Venters, Overcoming the Real Barriers
to Entry into Adjacent Markets, Prism, 2010
Real world in-class case (Deneffe, 2008-2012):
Quantifying entry barriers into an adjacent
geographic market at a leading payroll services
company


External analysis
(customer needs
analysis)

Using industry analysis
as a source of option
generation

Case: Ice-Fili (Abridged - HBSP case)
Individual case write-up due (25%)
1 All cases labelled ‘Deneffe’ are disguised real world strategy case descriptions from the instructor’s own strategy
consulting experience. They will be discussed in class (there are no pre-class ‘case readings’ required here).
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5
1/11/2016

Strategic Position
Analysis (quantitative)


6
1/12/2016
Kevin Coyne, Enduring Ideas: The GE–
McKinsey nine-box matrix, McKinsey Quarterly,
September 2008
Real-world in-class case (Deneffe, 1999):
Applying Strategic Position Analysis for product
portfolio decisions at a large pharmaceutical
company

Internal analysis:
conceptual framework


eTextbook Ch.4
Optional: Herman Vantrappen and Daniel
Deneffe, Don’t Write off the (Western) Focused
Firm Yet, HBR Blog, 27 January 2014

Outside-in strategy:
Market entry and SCA
based on first-mover
advantages

Optional: Fernando Suarez and Gianvito
Lanzolla, The Half-Truth of First-Mover
Advantage, HBR, April 2005
Case: Wal-Mart Stores, Inc. (HBSP case)
Inside-out diversification
strategy: Creating SCA
based on Resources and
Capabilities







The real world strategy
process: Grand Strategy
vs. Operational Strategy


Case: Walmart Update 2011 (HBSP case)
eTextbook, Chs. 4,6
Optional: Walmart: Less amazing than Amazon,
The Economist, Feb 1 2014
http://www.economist.com/news/business/21595
435-worlds-biggest-retailer-stumbling-its-genialnew-boss-needs-prove-he-can-push-through
Optional: eTextbook, Ch. 8
eTextbook, Ch. 2
Herman Vantrappen and Daniel Deneffe, How to
(Gradually) Become a Different Company, HBR
blog, October 15 2014
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7
1/13/2016
8
1/14/2016

Grand Strategy
outcomes: Vision and
Mission

Real world in-class case (Deneffe and
Vantrappen, 2006-2008): Identifying and
Funneling Strategic Options at a leading payroll
company

From Grand Strategy to
Operational real world
Strategy: Performing a
quantitative assessment
of the commercial
potential of Strategic
Options

Real world in-class case (Deneffe, 2009):
Analyzing a medical supplies company’s
revenue and profit potential from diversifying
into the medical labels market in Europe’s big 5
countries

Strategies and tools to
improve performance in
markets where SCA is
hard or impossible to
obtain:
(1) Blue Ocean
Strategy?
(2) Opportunity
identification thru
inside-out Ideations

Kim and Mauborgne, ‘Blue Ocean Strategy,’
HBR, October 2004
Optional: eTextbook, Ch. 7
Real world strategy case (Deneffe, 2010/2011):
Opportunity identification thru inside-out
ideation: A global glass beads company case
example



In-class quiz

All materials (except Ice-Fili case) covered in
sessions 1 thru 7

(2) Opportunity identification thru inside-out
Ideations (continued)

Real world strategy case (Deneffe, 2011):
International growth strategy at a leading food
ingredient company: Outside-in or Inside-out?

Case description for
group assignment due in
session 10

Strategies and tools to
improve performance in
markets where SCA is
hard or impossible to
obtain:
(3) Operational Strategy:
Designing an effective
customer centric entry
strategy & business plan

Deneffe and Hoyos, Pricing in Downturn
Economies, Prism, 2003
Real world in-class case (Deneffe, 2000):
Diversification into the market for industrial
pumps

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9
1/19/2016



10
1/20/2016
(3) Operational Strategy:
Designing an effective
customer centric entry
strategy and business
plan (continued)


Strategies to improve
performance in markets
where SCA is hard or
impossible to obtain:
(4) Realistic Margin
Management: Value
Identification, Creation
and Extraction

Getting your strategy
hands dirty: Designing
competitive strategy
when under attack by
low cost competitors





11
1/21/2016

Optional Q&A session
on applied strategy
topics

Real world in-class case (Deneffe, 2000):
Diversification into the market for industrial
pumps (continued)
Real world in-class case (Deneffe, 2006):
Evidence-based segmentation, product/service
positioning at a leading private network operator
(if time permits)
Deneffe and Rüdiger, Profitable Pricing with
Irrational Competitors and Rational Customers,
Prism, 2005 (2), pp. 80-89
Real world in-class case discussion (Deneffe,
2012): Value creation and extraction in the
airline industry
Real world in-class case: Implementing value
creation at a leading global chemical company
(Deneffe, 2005)
Optional: Nirmalya Kumar, Strategies to Fight
Low-Cost Rivals, HBR December 2006
Real-world case (Deneffe, 2006): Making the
fighting brand decision at a leading cement
producer
Short group real world workshop
presentation due (15%)
Group strategy project due (40%)
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CASE ASSIGNMENT QUESTIONS
Ice-Fili
Please answer the following questions for the case write-up. The write-up is limited to a
maximum of three (3) single-spaced pages (font size 12 or larger) plus any supporting appendices
1.
2.
3.
4.
What quantitative indicators can you find in the case that could capture the changing
attractiveness of the Russian ice cream market between 1996 and 2001? (max ½ page)
What is the drawback of these indicators? (max ½ page)
What explains this change in market attractiveness over these years? (max 1 page)
What, in your opinion, should the Russian incumbent ice-cream makers consider to enhance
the market attractiveness in a way that is favorable to themselves? (max 1 page).
Note: (Note: In your answer, you can also include available information on actions that
these incumbents have been taken to enhance that attractiveness).
Wal-Mart Stores, Inc.
Please prepare the following questions for the in-class case discussion (not to be turned in)
1.
2.
Consider Walmart’s historic performance in the discount retail industry.
Did Walmart perform well, primarily because (1) it benefited from an overall attractive
discount retailing industry when it entered the market, or (2) because of its superior
competitive advantage/position within that discount retailing industry? Explain the sources
of superior performance.
What sources of competitive advantage are most sustainable?
Wal-Mart Update 2011
Please prepare the following questions for the in-class case discussion (not to be turned in)
1
2.
3.
Which of Wal-Mart’s sources of competitive advantage are transferable to international
markets?
In which markets has it not been successful? Why?
What international markets should Walmart have entered first after having been active in
the US? Why?
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