Strategic Management
Yonsei University 2010
Preliminary – Subject to Change
Syllabus Version Date: December 29, 2009
PROF. HART E. POSEN
University of Michigan
Ross School of Business
701 Tappan Street, Ann Arbor, MI 48109
hposen@umich.edu
OVERVIEW
Why do some firms perform better than other firms? The many possible answers to this
important question are the focus of the strategic management course. Business strategy refers
to the set of actions top management takes to achieve superior firm performance. The
perspective adopted in this course is that of managers making decisions regarding: (a) what
businesses their corporations should focus on; and (b) how to run those businesses. We will
explore a set of theories and analytical frameworks both to identify opportunities and threats
companies face – and to propose realistic solutions to these problems.
The value of understanding strategy extends beyond those in top management positions - it is
also essential for internal effectiveness and efficiency that functional specialists understand
strategy and their role within it. In addition, a deep understanding of strategy is also important
for external consultants, auditors, financial analysts, lawyers, and bankers trying to understand
and value other firms.
The course will follow a case based approach. In each class, we will discuss one business case
– and use that case to highlight a theoretical concept or framework. This approach will provide
you with a wide base of industry specific knowledge, as well as an opportunity to “try” the
theories and frameworks on real world business problems.
COURSE MATERIALS
There will be both a course pack containing the cases we will study, as well as excerpted
chapters from a textbook (B&H: Barney and Hesterly: Strategic Management and Competitive
Advantage: Concepts 2nd Edition, Pearson Prentice Hall).
1
CLASS PARTICIPATION
Attendance is mandatory for all classes. You are expected to come to class on-time. Since the
course is designed to help you develop a personal synthesis and perspective, rather than simply
survey analytical models, it is not easy to compensate for an absence. If for some unavoidable
reason you must miss a class (e.g. medical emergency), please inform me in advance.
For the learning process to be effective, it is necessary that you carefully prepare the cases and
readings before class and actively participate in the case discussions during class. Class
participation is mandatory. Participation involves two steps. First, you must develop a clear
position on the case and related questions. Second, you must take part in the class discussion
in a meaningful way. In doing so, you must be able to both present and defend your view on the
issue at hand. The ability to present ideas concisely and persuasively, and to respond
effectively to the ideas of others, is a key success factor in any managerial position.
Participation enables you to learn from your colleagues and to help them learn from you.
Accordingly, I expect you to participate effectively in the class -- analyze, comment, question,
discuss, and build on others' contributions. Your participation grade will be based on the quality
of your contributions.
EVALUATION
There will be both a midterm and final exam. Exams will take the form of a case analysis. I will
not use a rigid formula for evaluating course performance. Your final evaluation will reflect your
class attendance, participation, written work and presentations. Broadly, class participation will
count for 30% of your grade (divided as 10% for attendance and 20% for in class contribution),
the midterm exam for 35%, and the final exam for 35%.
Strategic Management
Yonsei University 2010
Wk 1.1:
Introduction to Strategy
No cases or readings. We will attempt to answer the question: What is Strategy?
-----------BUSINESS UNIT STRATEGY----------Wk 1.2:
Industry Analysis (1)
Reading: B & H, Chap. 2, “Evaluating a Firms External Environment” (p.30-53)
Case: Starbucks
• What are the key drivers of success (profitability) in the Specialty Coffee industry?
• Is the specialty coffee industry attractive?
• Identify the main engines of growth for Starbucks. Attempt also to come up with growth
avenues that are not identified in the case.
• Critically evaluate Starbucksʼ strategy for growth. What do you recommend for and/or
against? Be prepared with reasoning to support your answer.
Wk 1.3:
Industry Analysis (2)
Case: Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century
• Why is the soft drink industry so profitable?
• How has the competition between Coke and Pepsi affected the industryʼs profits?
• Will Coke and Pepsi sustain their profits through the twenty-first century?
Wk 1.4:
Week 1 in Review
Review of theories and topics from the past week.
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Wk 2.1:
Industry Analysis (3)
Case: Apple Computer – 2002 (Part 1)
• Was the PC industry attractive in the 1980ʼs?
• Was the PC industry attractive in 2002?
Wk 2.2:
Resources and Capabilities (1)
Reading: B & H, Chap. 3, “Evaluating a Firmʼs Internal Capabilities” (p.72-90)
Case: Apple Computer – 2002 (Part 2)
• Do Apple Computerʼs resources create a sustainable competitive advantage?
• What growth strategy would you recommend for Apple computer?
3
Wk 2.3:
Case:
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Resources and Capabilities (2)
The Walt Disney Co: The Entertainment King
What accounts for the success of Walt Disney over so many decades?
What are the key elements of Disneyʼs strategy?
To what extent are the elements of the strategy vulnerable to threats of imitation,
substitution, and/or obsolescence?
What would you recommend to Eisner to revitalize Disney?
Wk 2.4:
Week 2 in Review
Review of theories and topics from the past week.
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Wk 3.1:
Business Level Strategy (Cost Leadership)
Reading: B & H, Chap. 4, “Cost Leadership” (p.114-126)
Case: Wal-Mart Stores Inc.
• Is Wal-Martʼs competitive strategy distinct? Why? Why not?
• What are the sources of value creating activity in Wal-Martʼs competitive strategy?
• Can K-Mart and Target duplicate Wal-Martʼs strategy?
Wk 3.2:
Review for the Mid Term Exam
Review and discussion of the materials for the mid term exam.
Wk 3.3:
Mid Term Exam
In-class exam. Open book and note.
Wk 3.4:
Week 3 in Review
Review of theories and topics from the past week.
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Wk 4.1:
Business-Level Strategy (Differentiation)
Reading: B & H, Chap. 5, “Product Differentiation” (p.144-163)
Strategic Management
Yonsei University 2010
Case: Gucci Group, N.V.
• Map the competitive positions of the different players in the luxury good business? Who
are the best positioned players? Why?
--------------CORPORATE STRATEGY---------------Wk 4.2:
Related Diversification
Reading: B & H, Chap. 7 , “Corporate Diversification” (p.206-231)
Case: Newell Company: Corporate Strategy
• Does Newell have a successful corporate-level strategy? Does the company add value to
the businesses within its portfolio?
• What are Newellʼs distinctive resources?
• What challenges faced the company in the late 1990s?
Wk 4.3:
Case:
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Unrelated Diversification
Tyco International
Does Tyco have a corporate level advantage? Does it do anything unusually well?
When over the life of a business does Tyco add value?
Should this be one company or six?
Is Tycoʼs strategy sustainable?
Wk 4.4:
Week 4 in Review
Review of theories and topics from the past week plus an analysis of the mid-term exam case.
---------Wk 5.1:
Vertical Integration
Reading: B & H, Chap. 6, “Vertical Integration” (p.178-190)
Case: Celulosa Arauco: Forward Integration or Horizontal Expansion?
• Should Arauco build the Itata project?
• What are the sources of competitive advantage for Celulosa Arauco?
• Why has Arauco moved away from its traditional “pulp alone” strategy?
Wk 5.2:
Mergers-Acquisitions-Alliances
Reading: B & H, Chap. 9, “Strategic Alliances” (p.276-292)
Chap. 10, “Mergers and Acquisitions” (p.308-322)
Case: Amazon.com and Toys Rʼ Us
5
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Why has the toy industry been so difficult to “crack”?
Do you think the proposed alliance between Amazon.com and Toys Rʼ Us makes sense?
Wk 5.3:
Strategic Entrepreneurship
Case: Athleta
• What is your assessment of Althletaʼs strategy to date?
Wk 5.4:
Week 5 in Review
Review of theories and topics for the week.
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Wk 6.1:
Pre-Final Review Class
Review for the final exam.
Wk 6.2:
Final Exam
Wk 6.3:
Post Final Review Class
Course wrap-up.