MGT 6400: STRATEGIC ANALYSIS
Fall 2011
Section 01 5:30 – 8:20 Th Bu 103
INSTRUCTOR:
Roy Johnson, JD, PhD.
BU 326
Phone: 865-8030, e-mail: johnsonr@suu.edu,
Website: www.suu.edu/faculty/johnsonr
OFFICE HOURS:
REQUIRED TEXTS:
SUPPLEMENTARY
MATERIALS:
2:30-4:00 T, 11:30-1:00, 2:30-5:30 Th; Other hours by appointment
Harvard Cases To be purchased from the professor the first night of classes.
Readings. Located on the SUU library website or handouts (HO) by the professor
Familiarization with The Wall Street Journal, Business Week, Fortune, The Economist,
Harvard Business Review, and other business publications is strongly recommended.
COURSE DESCRIPTION:
This is the capstone course for the MBA, and as such, it will integrate the methods and tools developed in the
curriculum to solve the strategic positioning and management issues of the organization. Case analysis and a
consulting project are the practice fields where you will develop these tools for analyzing and solving problems.
Prerequisites: Admission into a graduate business program and completion of relevant foundation courses.
COURSE OBJECTIVES:
1.
To develop a holistic perspective of an organization which integrates the concepts, skills, and principles
learned in previous functional area courses (e.g. Marketing, Finance, Accounting).
2.
To develop an appreciation and understanding of the role of top management in dealing with complex and
dynamic strategic questions.
3.
To gain an understanding of the concepts of strategic management and business policy.
4.
To be able to analyze business cases and to apply the knowledge gained from one case to a seemingly
unrelated case. The objective of the course is not so much to accurately access an individual case as it is to
begin to "think strategically" about business opportunities and problems.
5.
To develop communication, presentation, and participation skills which will be invaluable in a business
career.
REQUIREMENTS:
1. Class Participation. Each student is expected to participate in class and team discussions. During every session,
class members will be called on randomly to answer questions pertaining to that day's assignment, whether or not the
student has prepared a brief for that session. You are expected to prepare every case and take an active role in every
class. Case sessions are analytic exercises, analogous to laboratory sessions in other disciplines. The objective is
that you gain experience in analysis by responding to the ideas of others and by allowing your own ideas to be
evaluated. You will learn by doing, not by passively listening. To do this you must be there, you must be prepared,
and you must be involved.
Your participation will be evaluated based on attendance, quantity and quality of participation. It will be
rated on a scale from 0 to 5 (0 = absent, 1 = unprepared, 2 = no comments, 3 = called on and prepared, comment but
don't add much to class learning, 4 = good comments, 5 = leadership role) in classes throughout the semester, with a
special focus on case classes. Your final participation grade will be formed from the composite of these scores.
Remember: Those who are well-prepared and following the discussion in their heads, but, who make no
comments themselves, are generally indistinguishable from those who are unprepared and inattentive and can,
therefore, expect no better participation grade.
More than one unexcused absence from classes in which cases are being discussed will result in a penalty of
one-third decrease in your participation grade (e.g., B to B-) for each absence. This is in addition to the 0 you will
receive for participation each time you are absent. If circumstances require you to miss class you may, with the
consent of the instructor, make up the class by turning in comprehensive written answers to the study questions for
that case. These will be due no later than the following class period.
2. Case Questions. We will cover several cases in the course. These are classic cases that have been selected for
their ability to illustrate timeless strategic concepts rather than their currency. In the syllabus, following each of these
cases, there are several questions that you should be prepared to discuss. You will be assigned one question to
answer and submit in writing. These assignments will be graded based on the specificity and completeness of your
answers.
3. Readings, Executive Summaries: There are also readings listed on the syllabus. Again these have been chosen as
seminal works in the field. This assignment is to write an executive summary outlining the substance of each reading.
4. Consulting Project: Teams of four-five students will be formed the first week of class. Each team will be required
to do a strategic assessment of a local business. This project is intended to give each of you some “real world”
practice in evaluating the strengths and weaknesses of a business, assessing its opportunities and threats, and
recommending a course of action to improve the long-term profitability of the company. The written project will be
given a group grade. Individual grades will be assigned based on group members’ evaluations of one another and a
self-evaluation. These projects will also be presented both to the client and to the class in a 20-25 minute
presentation. Because the project is so important, Project Guidelines are attached to help your group produce a highquality project.
5. ETS Field Exam: The ETS Field exam (or Princeton exam) which is administered to all graduating MBA students. It
will test your knowledge of all areas of the business program (e.g., accounting, economics, finance, management,
marketing, etc.). This exam is used nationally to rank the quality of different business schools. While taking this exam is a
requirement of this course (if you do not take it you do not pass), how well you do on the exam does not affect your course
grade. The exam has been converted to an electronic format and will be available in the Testing, it will take between two
and three hours.
GRADING
Quizzes and articles
Class Participation
Consulting Project
Project Presentation
20
20
50
10
----Total
100
Grades may be curved either up or down as indicated by the class distribution, otherwise, the standard point
distribution will be followed, with grades rounded to the nearest whole number (e.g., 70-72 = C-, 73-76 = C, 77-79 =
C+...). Final grades will be awarded with pluses and minuses.
A course fee of $40 is used for classroom mediation, computer lab access and updating, and instructional materials
Scholastic dishonesty will not be tolerated and will be prosecuted to the fullest extent. You are expected to
have read and understood the current issue of the student handbook (published by Student Services)
regarding student responsibilities and rights, and the intellectual property policy, for information about
procedures and about what constitutes acceptable on-campus behavior.
If you have a disability which may impair your ability to successfully complete this course, please let Student
Support Services know during the first week of class. Students with medical, psychological, learning or other
disabilities desiring academic adjustments, accommodations, or auxiliary aids will need to contact Student Support
Services in Room 205K, Sharwan Smith Center or phone (435) 586-7848. Student Support Services determines
eligibility for and authorizes the provision of these services and aids.
This syllabus may be amended and unlisted handouts may be distributed throughout the semester. If you miss any
classes make sure that you check.
IV. COURSE OUTLINE:
DATE
TOPIC & ASSIGNMENTS
Aug.
25
Introduction to Course and Strategic Management Overview
Teams selected
Sept.
01
Vision, Mission, and Goals
Companies assigned
1.
2.
3.
4.
Case: Phil Knight: CEO at NIKE (1983)
Why has Nike been successful?
What role has Phil Knight played in this success?
How would you describe Phil Knight's job to a friend who is unfamiliar with the "jargon" of MBAs? What does he
do?
Assess the situation facing Nike in the summer of 1983. What action, if any, would you recommend to Phil Knight?
Readings: Guide to Case Analysis (on course website)
Does Management Matter? (HO)
STRATEGY AND COMPETITIVE ADVANTAGE: ECONOMICS
1.
2.
3.
4.
08
Case: Cola Wars Continue: Coke and Pepsi in the 21st Century
Why is the soft drink industry so profitable?
Compare the economics of the concentrate business to the bottling business: why is the profitability so different?
How has the competition between Coke and Pepsi affected industry profits?
Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of noncarbonated drinks.
Reading: Porter The Five Competitive Forces that Shape Strategy, HBR Jan. 2008
1.
2.
3.
15
Case: Coors
Why did the brewing industry consolidate?
What factors accounted for Coors's competitive advantages?
Why has Coors's performance since deteriorated?
Reading: Ghemawat, Rivkin, Creating Competitive Advantage, HBS Note, 9-798-062 2006 (HO)
1.
2.
3.
22
Case: Caterpillar Tractor Co.
What are the key elements in Caterpillar's strategy? What is the source of its outstanding success in the worldwide
earth-moving equipment industry?
What changes do you see in the industry and the competitive environment? What implications do they have for
companies in the industry?
How well is Cat positioned for the future? What recommendations would you make to Morgan at the meeting in
October 1981?
Reading: Porter, What is Strategy? HBR Nov.-Dec. (74:6) 1996
STRATEGY AND COMPETITIVE ADVANTAGE: RESOURCE DEPENDENCE
1.
2.
3.
29
Case: Komatsu Limited
What are the sources of Komatsu's success?
How was this company able to challenge Caterpillar when so many larger and better established companies -- like
International Harvester, John Deere and J.I. Case -- had failed?
How are environmental forces and industry changes likely to affect Komatsu's competitive position vis-a-vis Cat?
What recommendations would you have for Ryoichi Kawai? For Lee Morgan?
Reading: Hamel and Prahalad, Strategic Intent, HBR May-June 1989 p. 63
Oct.
06
Group Work
1.
2.
3.
4.
13
Case: Toys “R” Us A
Why has Toys “R” Us (TRU) been successful?
How sustainable is TRU’s success? Why?
which of the options being considered by TRU in January 1992 would you recommend? Why?
How would you implement your recommendation? In what time frame?
Reading: Hamel, Strategy as Revolution, HBR July-Aug. 1996
NEW ENVIRONMENTS AND MODELS OF STRATEGY
1.
2.
3.
4.
20
Case: Leadership Online: Barnes & Noble vs. Amazon.com
Based on your own experience of traditional bookselling and your exploration of online bookselling, compare
willingness-to-pay for books supplied by these two business models
Also compare the forecast long-run cost position of a successful online bookseller to Barnes and Noble’s traditional
business model. (Assume that Exhibits 4 and 7 in the case reflect average dicounts of 10% off list price for Barnes
& Nobel’s traditional bookstores and 25% off list for the online bookseller.)
Assess Barnes & Noble’s response to the substitution threat from Amazon. How did Amazon respond in turn, and to
what net effect?
Who will be the online leader? Will it ever make much money selling books (as opposed to selling stock)?
Reading: D’Aveni, Hypercompetition, Introduction. (HO)
CORPORATE DIVERSIFICATION STRATEGIES
1.
2.
3.
4.
5.
27
Case: Bombardier, Handout.
Did it make sense for Bombardier to diversify away from the snowmobile business? Why or why not?
What do you think of Bombardier's moves into the mass transit industry? Has Bombardier been successful in this
business?
What strategic reasons can you see for acquiring MLW? Has this move proved successful?
How would you describe Bombardier's diversification strategy?
What recommendations would you make to Laurent Beaudoin regarding the Canadair acquisition and the
diversification move into minicars?
Reading: Porter, From Competitive Advantage to Corporate Strategy HBR May-June 1987
Nov.
1.
2.
3.
03
Case: Newell Company: Acquisition Strategy
Is Newell just another conglomerate?
How is it organized differently?
What business can it be in? Should it acquire Sanford or Levolor?
10
Group Work
IMPLEMENTATION
17
1.
2.
3.
4.
Final Class Project due
Case: Lincoln Electric: Venturing Abroad
How was Lincoln able to grow and proper for so long in such a difficult commodity industry that forced out other
giants such as General Electric? What is the source of Lincoln’s outstanding and enduring success?
What factors will be critical to Lincoln's continued success?
Given this outstanding success, why did the internationalization thrust of the late 1980s and early 1990s fail?
What is your 25-year prediction for Lincoln Electric?
24
THANKSGIVING BREAK
01
Project Presentations Groups 1-2
08
Project Presentations Groups 3-4
15
Final Client Project due with client response
ETS Field Exam in Business – Required of all students – in the Testing Center
Strategic Analysis Semester Project Guidelines
One of the best ways to develop a better understanding of strategic management is to apply the tools of
strategy to a complex problem. The semester project will be a strategic assessment of a Cedar City area small
business. Students will work in teams to analyze an existing business to determine whether that business is managing
an optimal strategy. Businesses have been recruited for you by Craig Isom director of the Small Business
Development Center. Mr. Isom will act as the liaison between the client and the team should any problems occur.
There are several reasons for incorporating this project into your curriculum:
1. Working with a real business helps students translate theory to practice.
2. The promise of actual business gain or threat of business loss makes the academic experience more salient;
students take real businesses more seriously than case studies.
3. Small to medium size businesses provide a manageable assessment environment for students.
4. Entrepreneurs have been and continue to be the primary source of innovation and job creation in this country. It is
hoped that in the process of interacting with entrepreneurs, you might enhance the skills needed to “intrapreneur” in
your corporate context.
5. In addition to having an extraordinary learning experience, you will be assisting businesses that have asked for
your help. This is a service learning project that reinforces our commitment to developing good citizens.
All projects must address the following:
Identification and evaluation of current strategy. What is the organization’s current strategy in relation to the
scope of its activities and to the basis on which it has attempted to establish competitive advantage over its rivals,
and the organizational structure, management systems and leadership style through which the strategy has been
implemented? How successful has the strategy been in relation to the performance of the company?
Analysis of the company vision, mission, and goals. What is the company’s business purpose, what is it
attempting to accomplish, where does it hope to go (what is its future strategic course), and how do these answers
translate into specific goals and objectives?
Appraisal of the external environment. Emphasis should be on what the principal developments in the industry
environment are in terms of factors which will influence the overall industry attractiveness and determinants of
relative success (key success factors). When appropriate discussion of macro variable should also be included in the
analysis. Do an analysis of Porter’s five industry forces and forces driving change in the industry.
Appraisal of internal resources and capabilities. On the basis of an appraisal of the organization's resources and
capabilities, what do you perceive to be the principal strengths and weaknesses of the organization? To what extent
is the current strategy effectively exploiting the company's strengths in resources and capabilities and defending
against its weaknesses? This analysis needs to include a financial analysis; sometimes helping the company organize
its finances is one of the most important things you will contribute. There is a broad range of sophistication in the
accounting of these companies; you must deal with what is available to you.
*An effective external/internal analysis should lead you to focus on the issues most critical to your client sustaining
successful performance.
Alternatives. Often there are several alternative solutions to the issues raised. Note these alternatives and the pros
and cons of each. Recommend actions for the client to take.
Recommendations. What are your recommendations? How do you see the organization's strategy being amended
in order to achieve a better match to the external environment and to the internal potential for competitive
advantage? What internal organizational changes does your analysis suggest? How would you prioritize your
recommendations in terms of short, medium and long-term? A strategic recommendation must be three dimensional.
It must define the basis of competition (low-cost, differentiation or focus); it must have a direction (market
penetration, market or product development, or diversification); and it must have a method (internal, joint-venture,
etc.). A strategic recommendation must also be valuable to the company. It must either generate new revenue or
reduce costs.
_____________________________________________________________________
Evaluation
The project will be evaluated on how well you demonstrate the following:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
An understanding of the overall strategic goals and objectives of the organization.
An understanding of the organization's competitors and the key external factors affecting the organization
and its industry and the trends in those factors.
An understanding of the organization's internal strengths and weaknesses (including a thorough financial
analysis)
Identification of strategic issues: Could your team sort through the data and find the critical issues that
needed to be resolved?
The quality and thoroughness of the evaluation of the organization's present strategy and its future potential.
Use of available information: was the student resourceful in identifying and using sources of data: on-line,
CD-ROM, library resources, interviews, etc.? Is there full information?
Usefulness of recommendations: Will management be able to take meaningful action based on your short
and long term recommendations?
Appropriateness and thoroughness of the implementation plan (sufficient details provided, time horizon,
and consideration of available resources and constraints).
Written paper: Organization, grammar, spelling, writing quality, presentation quality (i.e. graphs, charts,
overall appearance and creativity).
Professionalism of presentation: Visual aids, organization, speaking, etc.
Project Milestones
Milestone 1: Select your team members: In selecting your team, remember:
1.
Your team will be required to provide opinions on everything from accounting and finance to marketing and
operations. The broader your team’s skill base, the greater your likelihood of success.
2.
Not everyone on the team needs to make customer contact. It is highly recommended that the team have
one regular contact person and that at least two team members have regular contact with the business. The
team members not in contact with the business can perform library research, financial analysis, editing, etc.
3.
It is the responsibility of the team to divide work and control work so as to provide a quality report. Each
member must keep a record of hours worked on the project. Peer evaluations will be administered both at
mid-term and at the end of the semester. The final peer evaluation will be used to determine a student’s
final project and presentation grade.
Milestone 2: Plan for your project
Set out initial assignments, develop a preliminary outline of your assessment and case history report,
prepare for initial contact with your company. Prior to visiting your firm, you should find out as much as you can
about the assessment process and about your company. Be prepared to set the expectation level for your client.
Milestone 3: First visit:
At this visit, you should get as much information as you can about the general operations of the firm. Bring
written questions with you, or an outline of what you’d like to learn. Respect your client’s time and attention.
Milestone 4: Preliminary assessment
Develop a preliminary assessment for your client to discuss with him or her. Look for points of agreement
and disagreement. Includes both internal and external analysis. Do not wait too long in the semester to gather
information as data is extremely difficult to find and therefore requires a considerable amount of time and tenacity.
Milestone 5: Drafts of sections
Students may submit drafts prior to the November 17 deadline but drafts must be in good form with correct
grammar, spelling, etc. Acceptable drafts will be reviewed and strengths and weaknesses or areas for improvement
will be noted. I would prefer entire sections rather than a couple of pages at a time.
Milestone 6: Class report
Class reports are due in hard copy on November 17. They must be in a format that will be presented ta a
client, that is, professionally written and error free. After a final edit by me and a grade, you will need to make all
corrections and turn in two hard copies and a word file of the final project on December 15.
After final approval by me, you may present the assessment to the client and get client feedback for
submission to Craig Isom. Also, the team director must turn in the hours worked and a one-page summary of the
team’s perception of how its recommendations were received by the client.