MBAI 610-01 – MANAGEMENT STRATEGY
Fall 2005
Note: This syllabus is subject to change
Instructor:
Office:
Phone:
E-mail:
Classes:
Office Hours:
Dr. D. C. Chen
Hilton 216
310.338-2923
dchen@lmu.edu
Thursday 4:25 – 7:05pm, Hilton 107
Tuesday 3-5pm, Wednesday 2-5pm or by appointment
COURSE MATERIALS
 A packet of Harvard Business Review, Sloan Management Review, and Academy of
Management Executive articles
available at Library Electronic Reserve (ERes); password strategy
http://eres.lmu.edu/eres/coursepage.aspx?cid=731
 A packet of cases
available for purchase at XanEdu.com (Pack ID: 241019)
http://www.xanedu.com/login.shtml?PackId=241019
 Capstone® Business Simulation
Team Member Guide will be provided by the instructor
Registration at http://www.capsim.com/ (Course ID: C12467)
 Recommended textbooks
De Kluyver & Pearce. 2005. Strategy: A View from the Top, 2nd Ed., Prentice Hall
Barney. 2002. Gaining and Sustaining Competitive Advantage, 2nd Ed., Prentice Hall
COURSE OVERVIEW & OBJECTIVES
Firm strategies are used to develop and sustain competitive advantages. While
technological changes and globalization have produced a new competitive landscape,
strategic management is more critical to organizational success than ever. Organization
members need to think strategically about their jobs, the organizations they work for, and
the environments these organizations face.
Management Strategy Fall 2005
Management Strategy is a graduate-level management course about the formulation and
implementation of business policies and strategies. This course introduces concepts and
frameworks of strategic management process from a multi-disciplinary perspective. As a
capstone course of business administration, it helps students develop a strategic view of
business and corporate operations.
This course intends to help students to:
 think strategically as top executives;
 understand and evaluate the major issues involved in strategic decision making;
 develop a working knowledge of effective strategic management;
 integrate function-level learning into strategy formulation and implementation;
 develop a strong sense of professionalism and social responsibility.
APPROACH
Successful strategic management relies on conceptual, analytical, and communication
skills. In this regard, this course employs multiple methodologies including lecturing,
class discussion, case analysis, business simulation, and professional presentation.
Lectures are used to outline and clarify major issues of strategic management. Class
discussions focus on certain cases so as to enhance participation and learning. Teamwork
on case analysis, business simulation, and presentations can help students integrate
related business knowledge and develop real-life working skills.
“Tell me and I’ll forget. Show me and I may remember. Involve me and I’ll understand.”
-- Native American proverb
COURSE REQUIREMENTS
Preparation and Participation
The reading requirement for each week usually includes 4 or 5 articles and 1 case. The
select articles cover classic strategy thinking and the latest development. While reading
the case, students should be able to identify problems, explore strategic alternatives, and
develop strategic recommendations.
Given the emphasis on interactive learning, students’ participation is very critical in this
course. You are expected to actively participate in class discussion and contribute
thoughtful ideas. Profound understanding, careful analysis, and creative thinking will be
highly appreciated. Both the quantity and the quality of participation will be considered
in grading. For this reason, it is essential that students be ready to discuss and analyze
pre-assigned cases and readings. In particular, the following questions are asked to
evaluate participation:
1. Is the participant a good listener?
2. Do the comments reflect careful analysis?
3. Do the comments add to our understanding of the situation?
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4. Is there a willingness to try new ideas?
5. Is the participant considerate of other class members?
In addition, attendance may be checked in any class throughout the semester. Only
documented illness, emergencies, religious holidays, or university/company engagements
can be recognized as legitimate excuses for absence.
Case Study
Case study is widely used in business schools to expose students to complex, real-world
problems facing companies. In this semester, we will discuss 12 strategic management
cases (as listed below). Students are required to read all the cases, lead class discussion
on one case, and prepare a written analysis on one case.
 The Rise and Fall of the J. Peterman Co.
 Note on Home Video Game Technology and Industry Structure
 Dell – New Horizons
 Starbucks: Delivering Customer Service
 Fedex and UPS – The War Continues
 The Walt Disney Co.: The Entertainment King
 The Merger of Union Bank of Switzerland and Swiss Bank Corporation
 The Renault-Nissan Alliance
 Making China Beautiful: Shiseido and the China Market
 Merck & Co., Inc.: Corporate Strategy, Organization and Culture
 IBM’s Decades of Transformation
 GE and Jack Welch
The instructor will lead discussion on 4 of the cases (with strikethrough lines). Class
discussion on each of the other 8 cases (without strikethrough lines) will be led by two
students. The two students are expected to carefully analyze their assigned case, answer
the questions given by the instructor, and prepare professional presentation materials to
share with the class. Please remember that you are supposed to lead the class to analyze
and discuss the case. Do not simply “present” case facts and your answers. The case
discussion assignments will be decided within the first two weeks.
Also, each student is required to submit a written report on one of the 12 cases. It may or
may not be the case you are assigned for class discussion. You need to examine the
company’s external and internal environment, identify key strategic issues, and provide
recommendations. Cases normally include dilemmas as encountered by managers; so, it
is important to deal with them as they are written and there is little need to search for
additional or more recent data. The written report should be double-spaced, with #12 font
and 1-inch margin, and no more than 10 pages (not including appendix and
bibliography). The report is due on Dec. 1st.
Capstone Simulation
The Capstone Simulation is an important part of this course, as it provides an
environment where students can gain hand-on experience of strategic management. In the
simulation, you need to make decisions about the strategy and direction of your firm, and
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implement them through various functional areas, such as production, R&D, marketing,
production and finance. It is a very exciting way to explore the complexities and
challenges of running a business. The simulation is founded on teamwork as it plays a
crucial role in the formulation and execution of strategy. Students will be asked to form
into groups within the first two weeks. Each group will run a firm competing with firms
managed by other groups in a simulated electronic sensor business. Once your team is
formed, one member of the team will register the team name on the CapSim website
(www.capsim.com) and then the rest of the team members will register and join their
specific team.
The simulation involves numerous class activities and assignments. First, each group
needs to make decisions about their business operations. There are two practice rounds
and eight formal rounds. For each round, you must further develop your overall strategic
plan by relating the previous session’s articles and cases to your simulation decisions.
Your decisions must be uploaded in time for processing. The decision schedule is listed
below.
Practice round 1 due by 4pm Sep.22
Practice round 2 due by 4pm Sep. 29
Decision # 1 due by 4pm Oct. 6
Decision # 2 due by 4pm Oct. 13
Decision # 3 due by 4pm Oct. 20
Decision # 4 due by 4pm Oct. 27
Decision # 5 due by 4pm Nov. 3
Decision # 6 due by 4pm Nov. 10
Decision # 7 due by 4pm Nov. 17
Decision # 8 due by 4pm Nov. 29
Second, each group is required to make debriefings about certain pre-specified issues
throughout the semester. Accompanying each briefing, you need to hand in a one-page
memo about your team reflection on a pre-specified issue. Please see the debriefing
schedule below for details. Remember, you should not reveal your future decisions in the
debriefings. It is a competition!
Sep.22 Situation analysis results (all groups)
Sep. 29 Potential sources of competitive advantage (all groups)
Oct. 6 Vision and strategy (all groups)
Oct. 13 Competitor analysis (all groups)
Oct. 20 Round 2 results (group 1); Product portfolio review (all groups)
Oct. 27 Round 3 results (group 2); Acquisition plan (all groups)
Nov. 3 Round 4 results (group 3); Alliance plan (all groups)
Nov. 10 Round 5 results (group 4); International expansion plan (all groups)
Nov. 17 Round 6 results (TBA); Reflection on strategy implementation (all groups)
Dec. 1 Final results (TBA); Reflection on strategic change (all groups)
Third, each group needs to prepare a final board report and a presentation. You should
maintain a record of team activities such as strategic pastures taken, assumptions
employed, decisions made, the outcomes of those decisions, and changes felt necessary.
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Management Strategy Fall 2005
Based on such information, each group will report on its simulation experience in the
form of a report to the company’s board of directors. Your board report is not intended to
be an academic paper. It should be a truthful sell-job to the board illustrating your
managerial effectiveness. It should be a typed double-spaced, 10-page maximum report,
not including attachments and appendices. The report is due on Dec. 8. It should include:
- Your company’s initial vision and strategy statement
- A comparison of your emergent strategy with the original intended strategy
- An evaluation of intended and emergent strategies based on SWOT analysis
- An analysis of your market and competition
- A description of the strategic decisions you made over time
- Why you made those decisions and how you implemented them
- What worked well and what you will do differently in the future
- A discussion of what you learned from your experience
Success Measurement. Given the variety of strategic goals, you are allowed to choose
your own measurements for success, thus evening the playing field of various strategic
options. The measurements choices are profits, stock price, ROE, ROS, ROA, asset
turnover, market share, and market capitalization. Each team needs to choose at least 3
measurement categories, and cannot place more than 40% weight on any one category.
Your measurement selection must be submitted before Decision # 2 (Oct. 13).
Final Exam
The final examination will contain 6 to 8 short essay questions and cover materials from
the readings, lectures, and class discussions.
GRADING PLAN
Your grade will be determined as follows:
Participation 20%
Case Study 20%
Case Discussion 5%
Individual Report 15%
Business Simulation 40%
Mini-Reports 10%
Performance 10%
Final Board Report 15%
Final Board Presentation 5%
Final Exam 20%
Total 100%
Grading Scale
A
B+
B–
C
D
93 – 100%
85 – 88%
77 – 80%
69 – 72%
60 – 64%
A–
B
C+
C–
F
5
89 – 92%
81 – 84%
73 – 76%
65 – 68%
0 – 59%
Management Strategy Fall 2005
CLASS SCHEDULE
Sep. 1 – Course Introduction
Course overview; Simulation introduction; Team formation
Exercise: Lego Construction
Read: course syllabus and simulation manual
Sep. 8 –Strategic Management and Corporate Performance
Read: Porter, “What is Strategy?” HBR Nov-Dec 1996
Eisenhardt & Sull, “Strategy as Simple Rules” HBR Jan 2001
Kim & Mauborgne, “Charting Your Company’s Future” HBR Jun 2002
Handy, “What’s Business For” HBR Dec 2002
Case: The Rise and Fall of the J. Peterman Co. (HBR Sep-Oct 1999)
Simulation: Finalize teams and divide teamwork; Register online at http://www.capsim.com/
Sep. 15 – Industry Analysis
Read: Porter, “How Competitive Forces Shape Strategy” HBR Mar-Apr 1979
McGahan, “How Industries Change” HBR Oct 2004
Bower & Christensen, “Disruptive Technologies: Catching the Wave” HBR Jan-Feb 1995
Porter, “Strategy and the Internet” HBR Mar 2001
Case: Note on Home Video Game Technology and Industry Structure ( Case Packet)
Simulation: Conduct situation analysis; Practice round 1 due by 4pm Sep.22
Sep. 22 – Internal Analysis
Debrief: Situation analysis results
Read: Prahalad & Hamel, “The Core Competence of the Corporation” HBR May-Jun 1990
Collis & Montgomery, “Competing on Resources: Strategy in the 1990s” HBR Jul-Aug 1995
Ulrich & Smallwood, “Capitalizing on Capabilities” HBR June 2004
Gottfredson, Puryear, & Phillips, “Strategic Sourcing From Periphery to the Core”
HBR Feb 2005
Case: Dell – New Horizons (Case Packet)
Simulation: Examine firm resources and capabilities; Practice round 2 due by 4pm Sep. 29
Sep. 29 – Business-Level Strategy
Debrief: Sources of competitive advantage
Read: MacMillan & McGrath “Discovering New Points of Differentiation” HBR Jul-Aug 1997
Kim & Mauborgne, “Blue Ocean Strategy” HBR Oct 2004
Gadiesh & Gilbert, “Profit Pools: A Fresh Look at Strategy”; “How to Map Your
Industry’s Profit Pool” HBR May-Jun 1998
Hammer, “Deep Change: How Operational Innovation Can Transform Your Company”
HBR April 2004
Case: Starbucks: Delivering Customer Service (Case Packet)
Simulation: Formulate strategy and performance criteria; Decision # 1 due by 4pm Oct. 6
Oct. 6 – Competitive Dynamics
Debrief: Vision and strategy
Read: Rafii & Kampas, “How to Identify Your Enemies Before They Destroy You” HBR Nov 2002
Brandenburger & Nalebuff, “The Right Game: Use Game Theory to Shape Strategy”
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HBR Jul-Aug 1995
Yoffie & Cusumano, “Judo Strategy: The Competitive Dynamics of Internet Time” HBR
Sep 2000
Rao & Bergen & Davis, “How to Fight a Price War” HBR Mar 2000
Hill: “Establishing a Standard: Competitive Strategy and Technological Standards in
Winner-Take-All Industries” Academy of Management Executive 1997 11(2)
Case: Fedex and UPS – The War Continues (Case Packet)
Simulation: Analyze competitors; Decision # 2 due by 4pm Oct. 13
Oct. 13 – Corporate-Level Strategy
Debrief: Competitor analysis
Submit: Success measurement selction
Read: Porter, “From Competitive Advantage to Corporate Strategy” HBR May-Jun 1987
Markides, “To Diversify or Not to Diversify” HBR Nov-Dec 1997
Goold & Campbell, “Desperately Seeking Synergy” HBR Sep-Oct 1998
Slywotzky & Wise, “The Growth Crisis-How to Escape It” HBR July 2002
Dranikoff, Koller, & Schneider, “Divestiture: Strategy’s Missing Link” HBR May 2002
Case: Walt Disney Co. (Case Packet)
Simulation: Consider restructuring product portfolio; Decision # 3 due by 4pm Oct. 20
Oct. 20 – Merger and Acquisition
Debrief: Round 2 results (group 1); Product portfolio review (all groups)
Read: Harding & Rovit, “Building Deals on Bedrock” HBR Sep 2004
Bower: “Not All M&As Are Alike – and That Matters” HBR Mar 2001
Cullinan, Le Roux, & Weddigen, “When to Walk Away from a Deal” HBR April 2004
Aiello & Watkins, “The Fine Art of Friendly Acquisition” HBR Nov-Dec 2000
Ashkenas, DeMonaco, & Francis, “Making the Deal Real: How GE Capital Integrates
Acquisitions” HBR Jan 1998
Case: The Merger of Union Bank of Switzerland and Swiss Bank Corporation ( Case Packet)
Simulation: Consider potential acquisition target; Decision # 4 due by 4pm Oct. 27
Oct. 27 – Strategic Alliances
Debrief: Round 3 results (group 2); Acquisition plan (all groups)
Read: Kanter: “Collaborative Advantage: The Art of Alliances” HBR Jul-Aug 1994
Chesbrough & Teece, “Organizing for Innovation: When is Virtual Virtuous?” HBR
Jan-Feb 1996 (Reprinted in HBR Aug 2002)
Dyer, Kale, & Singh, “How to Make Strategic Alliances Work” Sloan Management
Review 2001 42(4)
Gomes-Casseres, “Group versus Group: How Alliance Network Compete” HBR Jul-Aug 1994
Ernst & Bamford, “Your Alliances Are Too Stable” HBR Jun 2005
Case: The Renault-Nissan Alliance (Case Packet)
Exercise: The Blue Chip
Simulation: Consider potential partner; Decision # 5 due by 4pm Nov. 3
Nov. 3 – International Strategies
Debrief: Round 4 results (group 3); Alliance plan (all groups)
Read: Porter, “The Competitive Advantage of Nations” HBR March-April 1990
Farrell, “Beyond Offshoring: Assess Your Company’s Global Potential” HBR Dec 2004
Ghemawat, “The Forgotten Strategy” HBR Nov 2003
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Management Strategy Fall 2005
Khanna, et al., “Strategies That Fit Emerging Markets” HBR Jun 2005
Bartlett & Goshal, “Going Global: Lessons from Late Movers” HBR Mar 2000
Case: Making China Beautiful: Shiseido and the China Market (Case Packet)
Exercise: Copying the Best Practice
Simulation: Consider potential international expansion; Decision # 6 due by 4pm Nov. 10
Nov. 10 – Strategy Implementation
Debrief: Round 5 results (group 4); International expansion plan (all groups)
Read: Mankins & Steele, “Turning Great Strategy into Great Performance” HBR Jul-Aug 2005
Beer & Eisenstat, “How to Have an Honest Conversation about Your Business
Strategy” HBR Feb 2004
Kaplan & Norton, “The Balanced Scorecard: Measures That Drive Performance” HBR Jan-
Feb 1992 (Reprinted in HBR Jul-Aug 2005)
Nohria, Joyce, & Roberson, “What Really Works” HBR July 2003
Nadler, “Building Better Boards” HBR May 2004
Case: Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A) ( Case Packet)
Simulation: Reflect on your team organization; Decision # 7 due by 4pm Nov. 17
Nov. 17 – Strategic Change
Debrief: Round 6 results (TBA); Team reflection on strategy implementation (all groups)
Read: Sull, “Why Good Companies Go Bad” HBR Jul-Aug 1999
Hamel, “Strategy as Revolution” HBR Jul-Aug 1996
Greiner, “Evolution and Revolution as Organizations Grow” HBR May-Jun 1998
Beer & Nohria, “Cracking the Code of Change” HBR May-June 2000
Hamel & Välikangas, “The Quest for Resilience” HBR Sep 2003
Case: IBM’s Decades of Transformation (Case Packet)
Simulation: Consider possible changes, decision #8, Decision # 8 due by 4pm Nov. 29
Nov. 24 – Thanksgiving
Dec. 1 – Strategic Leadership
Debrief: Final results (TBA); Team reflection on strategic change (all groups)
Read: Ireland & Hitt, “Achieving and Maintaining Strategic Competitiveness in the 21 st Century:
The Role of Strategic Leadership”, Academy of Management Executive 1999 13(1)
Tedlow, “What Titans Can Teach Us” HBR Dec 2001
Collins, “Level 5 Leadership: The Triumph of Humility and Fierce Resolve” HBR Jan
2001 (Reprinted in HBR Jul-Aug 2005)
Kanter, “Leadership and the Psychology of Turnarounds” HBR Jun 2003
Hamm, “Why Entrepreneurs Don’t Scale” HBR Dec 2002
Video Case: GE and Jack Welch
Discuss: “My strategic management idol” (prepare to tell a story about him or her)
Submit: Individual case analysis
Dec. 8 – Capstone Board Presentations
Final Board Report Due
Dec. 15 – Take-Home Final Exam Due
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Management Strategy Fall 2005
CASE PACKET
http://www.xanedu.com/login.shtml?PackId=241019
 Note on Home Video Game Technology and Industry Structure
 Dell – New Horizons
 Starbucks: Delivering Customer Service
 Fedex and UPS – The War Continues
 The Walt Disney Co.: The Entertainment King
 The Merger of Union Bank of Switzerland and Swiss Bank Corporation (A)
 The Renault-Nissan Alliance
 Making China Beautiful: Shiseido and the China Market
 Merck & Co., Inc.: Corporate Strategy, Organization and Culture (A)
 IBM’s Decades of Transformation (A)
Others:
- The Rise and Fall of the J. Peterman Co. (on E-Rev)
- GE and Jack Welch (Video Case)
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