533577570
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1
Topics
INTRODUCTION TO
STRATEGIC
PLANNING
Purpose of Course
Objectives of Strategic
Planning
Revision Date August 4, 2003
Case
None
Readings
Macomber, John, “8
Strategic Planning
for Contractors: 8
Steps to Success”
Construction
Business Review
Jan/Feb 1991
Assignment /
Discussion Questions
Assignment:
Study the readings;
prepare to discuss
them in class.
Teaching Comments
See also MIT 1.46, Strategic
Management,
http://web.mit.edu/1.46/www/
Objective: Set up the intent,
flow, and methodology of the
course. Tell students what is
expected.
Discussion
Questions:
Learning by the
Case Method
HBS 9-376-241
2
3
The Real Estate and
Construction Value
System
Risk, Reward, and
Capability
None
“Poland’s A2
Motorway”
HBS Case
#9-202-030
*Notes:
- Recommend
having HBS prepare
a compiled & bound
reader for the
students
Porter, Michael E:
Competitive
Advantage (Free
Press, 1985),
Chapter 1:
“Competitive
Strategy: The Core
Concepts”
Optional: An
Overview of the
Project Finance
Market
HBS Case
#200028
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Questions:
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Page 1 of 9
Powerpoint/Lecture
Topics
Tape 1 (recorded 6/30) 50 mins
 Why strategy?
 Class comments: self
introductions, objectives in taking
the course
 Steps in Planning
 Overview of flow and topics in the
calendar
 Overview of key concepts to be
introduced
 About the case method – how to
read, teach, discuss, write about
 Expectations for the Course
Introduce the idea of mapping
the Firm Value Chain. Show at
a high level how the parties take
on risks and rewards. Introduce
thinking about how the various
entities might think about
business strategy.
Tape 2 (recorded 6/27) 70 mins
 Review of planning concepts
 Illustration of the industry value
system
 Discussion of strategic ambition:
who are you and what are you
trying to do?
Illustrate the strategic analysis
of a business situation.
Case Discussion and Illustration:
Poland’s A2 Motorway
Practice:
 Preparing a case study for
discussion
(Tape 3 to recorded July 1, 3rd session)

Vocabulary
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533577570
Revision Date August 4, 2003
Questions:




4
Market Segmentation
“Del Webb”
HBS Case
# 9-497-016
Competitive
Advantage
Chapter 7: “Industry
Segmentation and
Competitive
Advantage”
5
Segment
Attractiveness and
Generic Strategies
“Del Webb”
(same case as
prior class)
Competitive
Advantage
Chapter 2: “The
Value Chain and
Competitive
Advantage”
Optional:
Competitive
Advantage
Steps in planning
Mapping the Industry Value
System
Identifying some of the
areas of risk and reward
The basics of showing how
the money flows
Introduce the idea of market
segmentation by using a real
(and difficult) example. Show
how planning can be made
easier with thoughtful market
segmentation. Solicit
comments on the Del Webb
strategic options.
Assignment:
To hand in: prepare a
market segmentation
analysis for Del
Webb. Based on
your analysis, on
what market
segments would you
focus the firm’s
efforts? Why? And
what generic strategy
Page 2 of 9
Continue with the Del Webb
case, now looking at the
attractiveness of the various
segments. What are the
measures of attractiveness?
How do they apply here? What
generic strategies would you
follow in each segment? What
would students recommend?








Missions of the key entities
External/Environmental scan
Internal scrutiny
Industry Value System: The
Players
Risks
Rewards
Roles
Sensitivity to Economic Factors
(“Follow the Money.”
Tape 4 recorded July 2, 4th session, 1st
half
 What is market segmentation?
 To illustrate, what are the issues
faced by Del Webb Co?
 How might you segment Del
Webb?
 How to segment Del Webb.
 Preliminary comments on
attractiveness, size
Pause today’s tape.
Continue tape for second day of Del
Webb.
Continue on tape 4, 4th taping session,
2nd half
 Segment Attractiveness. Explain
determinants of size, growth,
experience
 Explain 5 forces, illustrate for
some segments
 Explain how to follow generic
strategies for some segments
 Have some pauses for students to
disuss
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Revision Date August 4, 2003
Chapter 6:
“Competitor
Selection”
would you follow in
those segments?
Study the readings;
prepare to discuss
them in class.
6
7
8
9
Firm Value Chain 1:
What Drives a Cost Advantage Strategy
Firm Value Chain 2:
What Drives a
Differentiation
Strategy
Issues in Vertical
Integration
Strategy in
Fragmented Industries
Competitive
Advantage
Chapter 3: “Cost
Advantage”
Discussion
Questions:
Assignment:
Study the readings;
prepare to discuss
them in class.
“KONE: The
Monospace
Launch in
Germany”
HBS Case
# 9-501-070
Competitive
Advantage
Chapter 4:
“Differentiation”
Discussion
Questions:
Assignment:
Study the readings;
prepare to discuss
them in class.
“Savannah West”
HBS Case
#9 381 081
Porter, Michael E,
Competitive
Strategy (Free Press,
1980): Chapter 14:
“The Strategic
Analysis of Vertical
Integration”
Assignment:
Study the readings;
prepare to discuss
them in class.
Competitive
Strategy, Chapter 9:
"Competitive
Strategy in
Fragmented
Assignment:
Study the readings;
prepare to discuss
them in class.
“Arborite”
HBS Case
# 9 -796 - 146
“George B.H.
Macomber
Company”
HBS Case
# 191120
Discussion
Questions:
Discussion
Questions:
Page 3 of 9
Dig deeper into strategic
implementation by discussing a
potential cost-advantage
strategy and how Arborite
competes. Practice using the
Firm Value Chain to illustrate.
Tape 5, 5th taping session, July 15th
1hour 18 mins
Dig deeper into strategic
implementation, this time
investigating how KONE might
command a premium price for
their new and nominally
differentiated new product.
Tape 6, 6th taping session, July 16th 45 mins
Consider the strategic options
for an integrated
contractor/developer and what
risks, rewards, and management
issues there are in being
vertically integrated as a
business.
Tape 7, 6th taping session, July 16th –
45 mins
Taking the conversations from
the situations in prior classes,
discuss how this general
contractor is coping with
competing in a fragmented
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Revision Date August 4, 2003
Industries"
10
Implementation: The
Firm Value Chain
Wood Structures
HBS Case
#9-490-061
None
Discussion
Questions:
Assignment:
To Hand In: Write a
5 page paper with a
strategic analysis of
how you would
proceed as CEO of
Wood Structures.
Show the steps in
planning; use the
tools; use the Firm
Value Chain to
indicate where you
would focus
resources.
industry. Apply the set of tools.
Practice using all the tools, from
the steps in planning through the
several models. Recommend
how Wood Structures should
proceed from this point in time.
Discussion
Questions:
11
12
DISRUPTIVE
TECHNOLOGIES,
INNOVATION, AND
TECHNOLOGY
STRATEGY
How Information
Gives You
Competitive
Advantage
Overview of ECommerce Concepts:
See also MIT E-Business,
1.464,
http://web.mit.edu/1.464/www/
“Otisline”
HBS Case
# 9 -186-304
“eBricks.com”
HBS Case
"How Information
Gives You
Competitive
Advantage," HBR
Reprint #85415
Assignment:
Study the readings;
prepare to discuss
them in class.
ca ch 5
Discussion
Questions:
"Knowing a
Winning Business
Assignment:
To hand in: Write a
Page 4 of 9
Study how OTISLINE caused
the restructuring of the elevator
service industry: from low
economies of scale, low barriers
to entry, and high
fragmentation; to high
consolidation, high barriers to
entry, greater economies of
scale – and greater margins.
Teaching Note available.
Study this internet dot.com from
the height of the stock market
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Knowing a Winning
Business Idea
13
14
Marketplaces,
Disintermediation, and
Scale
Auctions, Consulting
and Services
Revision Date August 4, 2003
# 800327
“Quicken
Insurance: The
Race to Click and
Close”
HBS Case
#800408
“Freemarkets
Online”
HBS Case
#9 598 109
Idea when you See
One" HBS Case
#R00510
"Overview of EBusiness Models"
HBS Case #801172
three page paper
discussing your
impression of
whether E-Bricks has
a winning business
idea from the
viewpoint of the
article. If so, how
would you implement
the strategy? If not,
how would you fix
the strategy? Would
you invest in EBricks given the
circumstances at the
time of the case?
Discussion
Questions:
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Questions:
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Questions:
Page 5 of 9
bubble. What did they intend to
bring to the customer? Using
the “Winning Business Idea”
construct, do students think the
idea made sense?
Study this very successful
extension of a solid software
and internet brand name
company. How are they
changing how people buy a
service like insurance? What
are the strategic benefits? How
would you see this applying in
the real estate and construction
industry?
Study another successful
Internet company, this one
providing infrastructure for
auctions. What are the key
value added activities other than
the actual auction tool? How
might the other consulting and
contract management activities
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15
16
Supply Chain
Management
3D Modeling
Revision Date August 4, 2003
Supply Chain
Management at
WorldCo Ltd.
HBS Case
# 601 072
“BMW AG: The
Digital Car Project”
HBS Case
#9-699-044
Optional:
"Fast, Global, and
Entrepreneurial:
Supply Chain
Management, Hong
Kong Style: An
Interview
with Victor Fung"
HBR # 98507
"The Manager's
Guide to Supply
Chain Management"
HBS Case
# BH044
"Disruptive
Technologies:
Catching the Wave"
HBR Reprint
# 95103
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Questions:
Assignment:
To hand in:
Write a 5 page paper
discussion how the
advent of 3D design
has changed the rules
of competition in the
auto business.
Discuss impact on the
five forces for
automakers. Now
discuss how these
strategic benefits (or
drawbacks) might be
translated into a few
select market
segments in the real
estate and
Page 6 of 9
impact the roles of traditional
construction procurement
officers?
Supply Chain Management is
the standard in the retail and
consumer electronics industries.
Huge amounts of time and
waste are removed from the
system – and the players who
succeed in the end may not be
those who were prominent in
the beginning. What does it
take to succeed in this space?
Can you see an analog to the
construction industry?
3D design is the standard for
autos, planes, and industrial and
consumer products. It is not yet
the standard for buildings. Why
not? Would one expect the
same cultural disruption as at
BMW in adopting these tools?
In some ways the analog to
construction is in getting to the
final design for this auto – that’s
a one off, multimillion dollar
task like building a building.
The unit manufacturing after the
design is set is a separate issue.
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Revision Date August 4, 2003
construction
business.
Study the readings;
prepare to discuss
them in class.
17
Knowledge
Management:
Strategy in
Fragmented Industries
Buckman
Laboratories
HBS Case
# 9 800 160
"A Note on
Knowledge
Management"
HBS Case
#9-398-031
Discussion
Questions:
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Questions:
18
19
New Economies of
Scale: International
Approaches
Aligning Economic
Incentives to Optimize
the System
“Knowledge
Management at
Andersen
Consulting”
HBS Case
#9-499-032
"What's Your
Strategy for
Managing
Knowledge?"
HBS 99 206
“Turning The
Supply Chain Into a
Revenue Chain”
HBS Case
#F0103B
"Aligning Incentives
for Supply Chain
Efficiency"
HBS Case
#600 110
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Questions:
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Questions:
Page 7 of 9
This company works
internationally and has a big
investment in sharing
knowledge among branches and
salespeople. How does this
change the five forces for them?
How does it alter the bargaining
power of employees who might
leave to found new firms?
What did it take to implement
these tools?
Go deeper into the hows and
whys of building a sophisticated
multinational service business.
How is this different from a
large construction and design
company? Might Andersen
(now Accenture) decide to enter
the construction management
segment? For which kinds of
projects, which kinds of clients?
Many of the tools described in
the last several cases rely on the
open sharing of information.
Yet if the participants have
business incentives against
sharing, then the innovation is
difficult to accomplish. Here is
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20
21
22
Exercise in Aligning
Incentives
Consortia,
Federations,
Autonomy, and Scale
Summary and
Revision Date August 4, 2003
“Regency Plaza”
HBS Case
# 391 021
“Colliers and the
Technology
Solution”
HBS Case
# 396 081
Assignment:
To Hand In: Write a
three page paper
proposing a reward
system that provides
incentives for all the
players to work in
each others self
interest. Consider
that there are many
condos to be built.
Consider that some of
the motivations are
not economic.
"Group vs Group:
How Alliance
Networks Compete."
HBR # 94402
Optional:
“A Note on
Franchising”
HBS Case
# 9-297-108
Discussion
Questions:
Assignment:
Study the readings;
prepare to discuss
them in class.
Discussion
Questions:
Assignment:
Page 8 of 9
a simple example of a
thoughtful way to share an
economic benefit – and grow the
revenues and profits for all
parties.
Students can practice on this
real life construction situation,
to think how to structure a
reward system that would align
the incentives for the
participants. This might
leverage other attributes beyond
just cost – for example time or
perception of service levels.
Many of the tools described
above cannot be implemented
with impact by just one firm.
Some of them rely on scale that
might be accomplished by many
firms working in concert.
Colliers is an example of such
an alliance. Ignoring the old
technology in the case, discuss
why the alliance exists; who
benefits; how might this be
extended to other areas of the
design and construction value
system?
Recap the concepts and key
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Evaluations
Revision Date August 4, 2003
None
Page 9 of 9
items of learning from the
course. Discuss student
questions and concerns. Ponder
how the learning will impact
companies and careers as the
students go forward in life.
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