UNDERGRADUATE COURSE SYLLABUS Course Title and Number: Credit Hours: STRT 4905 GLOBAL BUSINESS STRATEGY Name of Professor: Professor Ingo BÖBEL, Dr., Dr. habil. Affiliate Faculty for the MOC Course at Institute for Strategy and Competitiveness, Harvard Business School (Professor Michael E. Porter) ibobel@monaco.edu Office hours: By appointment Office: Room 304 Spring 2012 Contact Details: Term: Class Meeting Times: Prerequisites: Course Description: 3 Wednesday and Friday from 8.30 to 10.00 Senior standing Subjects covered: competition, competitive advantage, competitive decision -making, competitive strategy, corporate strategy, Porter’s Five Forces, strategic planning, strategy formulation. Examination of managerial decision-making, planning and policy in changing environments. What is strategy? How to develop a competitive strategy? Historical review of competition and business strategy; analysis of industry structure, competitive positioning, competitive dynamics, sustainability; impact of globalization on industry structure. The course will provide the students with the theoretical fundament that is necessary to discuss a series of practical cases (application of the theoretical knowledge). Course Learning Outcomes: Assessment tools: Link to BSBA program learning outcomes: This course aspires to expose Quiz, exam, written 1. (functional knowledge) the student to the role of being a assignment, in class 2. (written communication) member of a management team discussions. 4. (problem solving and which is responsible for critical thinking) managing the short and long 5. (cultural diversity) term success of the entire 6. (ethical considerations) organization. In this case one 7. (independent research) has to face a number of 8. (understand business questions: Which industries and environment) markets should you enter? Which products should you invest in? Which segments should you target? How to create a competitive advantage over your rivals? The specific objectives are as follows: To expose the student to the concepts of modern strategic thinking, planning and strategy development. To enlighten the student in developing “general management” skills. To develop analytical skills required in developing Business Strategies. To develop the knowledge and skills required to implement strategies. To equip the student with the tools necessary to develop strategies in all aspects of their professional and personal lives. Participate in Oral participation, in class discussions, in class, and discussions. develop their own point of view and critical thinking process. Methodology: Course Materials: 1. (demonstrate knowledge) 2. (oral communication) 3.(technology) 4. (problem solving) 8. (understand business environment) Class time will consist of lectures, case studies, and discussions. Students will have to complete the following assignments each week: Read the corresponding assignments before class. Read all selected readings, articles, cases and handouts given. Solve the problems assigned (incl. case summaries). You will receive handouts and readings related to the course or be asked to search in EBSCO for appropriate articles. Ms. Susan Eklow, IUM Librarian, will also assist you in finding the relevant sources and data banks (and on how to use EBSCO!!). I expect that students will actively use the library and the library resources that are available when solving homework problems or any other assignments. You are expected to prepare adequately for each class and to participate actively and frequently in class discussion. Participation requires you publicly in class to respond fully to questions and comments from the professor and from fellow students, and to offer spontaneously your own thoughts and opinions on the material. You are expected to bring to and to demonstrate in each class sufficient preparation, intellectual curiosity, competence to engage in a high level of disciplined analytical thought and discussion, and written and oral English-language communication skills. 1. There is no specific textbook. Consult the HBS Reader (=HBSR): Business Fundamentals "Competitive Strategy", Harvard Business School Publishing: Number 1520, Boston, Mass. 2002. "Business Fundamentals" are collections of Harvard Business School background materials… supplemented by self-study aids. This collection includes six background notes, two articles from Harvard Business Review, Assessment and Grading: Class Code of Conduct: Attendance and one article from California Management Review. The collection covers ideas, issues, and best practice principles in the area of competitive strategy”. 2. Additional recommended articles: R. Whittington, Strategies to Lure Investors, Financial Times: Mastering Management Series Nr. 4, October 2000 D. J. Collis and C. A. Montgomery: Competing on Resources: Strategy in the 1990s, HBR July-August 1995, Reprint 95403 Wharton School Publ., Interview with L. Hrebiniak http://knowledge.wharton.upenn.edu/index.cfm?fa=viewArticle&ID=1173 Additional readings will be handed out during class sessions. 3. Cases/Article: These are the cases you must prepare in accordance with the Professor’s instructions: M. Porter, What is Strategy, HBR Nov./Dec. 1996 Intel Corporation: 1968-2003 (HBS 703427) Cola Wars Continue: Coke vs. Pepsi in the 21st.Century (HBS 702442) Wal-Mart Stores, Inc. (HBS 794-024) Wal-Mart in 2002 (HBS 702466) Crown Cork & Seal in 1989 (HBS 793-035) The final course grade will be composed of the following components with given weights: (divide up accordingly) Class participation (value added) 25% Projects (individual case summaries) 20% Quiz 20% Final Exam 35% All grades (homework, participation, quizzes, exam, project, etc.) are given over 100 points using the following grading system: A (95 – 100), A- (90 – 94), B+ (87 – 89), B (83 – 86), B- (80 – 82), C+ (77 – 79), C (73 – 76), C(70 – 72), D+ (67-69), D (63-66), D- (60-62), F (0 - 59). Student grades are made available the week following final exams. The final grades are posted with the student number. The breakdown of the final grades is available in the Director of Undergraduate Programs’ office. E.g. Students and the instructor must show each other adequate personal respect at all times. Students and the instructor must also respect and preserve the integrity of the learning environment of the classroom. Accordingly, disruptive behavior is not permitted. Examples of disruption are the sound or any use of cell phones, abruptly entering or leaving the room without explanation, using computers for activities other than those of the course. Students are expected to attend all classes! Absences affect the final course grade. - 0 absence = 1 bonus point - Up to 2 (two) absences no penalty is given - For the 3rd (third) absence 3 points are subtracted from the final course grade (given over 100 points) and the student will receive a warning by e-mail - For the 4th (fourth) absence 7 more points are subtracted from the final course grade (given over 100 points) and the student will receive a warning by e-mail - Reference Materials: Academic Honesty: For the 5th (fifth) absence the student is automatically withdrawn from the class and receives a WF grade M. E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors, , The Free Press, New York 1998 M. E. Porter: From Competitive Advantage to Corporate Strategy, HBR May-June 1987 (Reprint 87307) Articles are available through EBSCO. You will find that your understanding of both current economic events and economic analysis will be bolstered by the regular persual of periodicals such as The Economist, The Wall Street Journal, The Financial Times, and Business Week. By the first class, you are expected to already know well the IUM policy on academic honesty found in the current Student Catalogue. The instructor strictly enforces this policy, especially regarding academic cheating and plagiarism. Course Outline STRT 4905 GLOBAL BUSINESS STRATEGY Sessions 1 2-3 4-6 7 - 10 TOPICS/Teaching Purpose Introduction Get organized. Discussion of the syllabus and the literature Origins of Strategy: Introduction to Competition and Business Strategy: An Overview and Historical Review Establish a historical context for understanding the origins of strategy: Role of Elite Business Schools; The Economists' Contribution to Strategy: Industrial Organization; Industry Analysis; Dynamics of Competition; The Evolution of Strategic Management and Strategic Thinking ( see for ex. BCG's influence, growth-share matrix) What is Strategy? Today's dynamic markets and technologies have called into question the sustainability of competitive advantage. Under pressure to improve productivity, quality, and speed, managers have embraced a number of tools. Dramatic operational improvements have resulted, but rarely have these gains translated into sustainable profitability. And gradually, the tools have taken the place of strategy. As managers push to improve on all fronts, they move further away from viable competitive positions. Porter argues that operational effectiveness, although necessary to superior performance, is not sufficient, because its techniques are easy to imitate. In contrast, the essence of strategy is choosing a unique and valuable position rooted in systems of activities that are much more difficult to match. Competitive Strategy on the Corporate Level Preparation for the First Case Discussion: Intel Corporation 1968-2003 Remarks on the development and history of the computer industry and internet economy We then start with the discussion of the Intel case. The case describes three stages in Intel's history: the initial success and then collapse in DRAMs and Homework/ Recommended readings before class "A Note on Microeconomics for Strategists" (included in the HBSR) Relevant chapters in M. Parkin “Microeconomics”, 9th ed. 2010 (or any other modern economics textbook) “Competition and Business Strategy in Historical Perspective” (included in the HBSR); D. J. Collis and C. A. Montgomery: “Competing on Resources: Strategy in the 1990s”, HBR July-August 1995, Reprint 95403 M. E. Porter : "What is Strategy” "The Five Competitive Forces that Shape Strategy,” by M. E. Porter Prepare case: Intel Corporation 1968-2003 Write a case analysis for Intel Corporation 1968-2003 (summarize the case in 2 pages max.) Sessions TOPICS/Teaching Purpose Homework/ Recommended readings before class EPROMs, its transition to and dominance in microprocessors, and its move to become the main supplier of the building blocks for the Internet economy. It allows a rich discussion of industry structure and transformation in DRAMs and microprocessors, creation of competitive advantage and value capture, as well as sustainability. Teaching Purpose: Intel's Internet strategy can be used to introduce basic ideas on corporate strategy and industry analysis and transformation, competitive strategy, and competitive dynamics. We continue with the discussion of the Intel case. Prepare case: How did Intel succeed in creating a competitive Intel Corporation 1968-2003 advantage in Microprocessors? Creating Competitive Advantage What is competitive advantage? 11 -15 Competitive Advantage and Location: Defending Competitive Advantage against Competitors and Sustaining Competitive Advantage - Threats to Sustainability (Imitation, Substitution) Does location matter? Summary of lessons learned. Second Case Discussion: Wal-Mart Stores, Inc. (HBS 794-024) (I) The case focuses on the evolution of Wal-Mart's remarkably successful discount operations and describes the company's more recent attempts to diversify into other businesses. The company has entered the warehouse club industry with its Sam's Clubs and the grocery business with its Supercenters, a combination supermarket and discount store. Teaching Purpose: Explores the issue of sustaining competitive advantage. Wal-Mart has advantages over its competitors in areas such as distribution, information technology, and merchandising, to name a few. How sustainable are these, and what are the threats to Wal-Mart's continued success? Wal-Mart Stores, Inc. (HBS 794-024) (II) Continued Wal-Mart in 2002 (702466) In its first quarter of 2002, Wal-Mart became the largest company on the globe (by sales) and expanded into Japan. Was the giant retailer unstoppable? This case explores Wal-Mart's top issues in fueling top- and bottom-line growth: diversification into groceries, new retail channels Prepare case: Intel Corporation 1968-2003 Article "Sustaining Superior Performance" (included in the HBSR). Prepare case Wal-Mart Stores, Inc. (HBS 794-024) and write a case analysis (summarize the case in 2 pages) Article “Creating Competitive Advantage” (included in the HBSR) Prepare case Wal-Mart in 2002 (702466) and Prepare case Wal-Mart in 2002 (702466) Write a case analysis of Case Wal-Mart in 2002 (summarize this short case in 1 page) Sessions 16 -18 19 - 21 TOPICS/Teaching Purpose such as the Neighborhood Markets, and continued international expansion. Teaching Purpose: Explores the issue of sustaining competitive advantage. Wal-Mart has advantages over its competitors in areas such as distribution, information technology, and merchandising, to name a few. How sustainable are these, and what are the threats to Wal-Mart's continued success? Industry Analysis How competitive forces shape strategy Extensive discussion of Porter's Five Forces Framework: Industry Forces Driving Profits Down Degree of Rivalry (The cases of perfect competition and monopolistic competition revisited) "The Five Competitive Forces that Shape Strategy,” by M. E. Porter 90 minutes individual written quiz (exact date will be announced in class) Case Discussion: Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century (702442) Examines the industry structure and competitive strategy of Coke and Pepsi over 100 years of rivalry. New challenges of the twenty-first century included boosting flagging domestic cola sales and finding new revenue streams. Both firms also began to modify their bottling, pricing, and brand strategies. They looked to emerging international markets to fuel growth and broaden their brand portfolios to include noncarbonated beverages like tea, juice, sports drinks, and bottled water. For over a century, Coca-Cola and Pepsi-Cola had vied for the "throat share" of the world's beverage market. The most intense battles of the cola wars were fought over the $60 billion industry in the United States, where the average American consumes 53 gallons of carbonated soft drinks (CSD) per year. In a "carefully waged competitive struggle," from 1975 to 1995 both Coke and Pepsi had achieved average annual growth of around 10% as both U.S. and worldwide CSD consumption consistently rose. This cozy situation was threatened in the late 1990s, however, when U.S. CSD consumption dropped for two consecutive years and worldwide shipments slowed for both Coke and Pepsi. The case considers whether Coke's and Pepsi's era of sustained growth and profitability was coming Homework/ Recommended readings before class Article "How competitive forces shape strategy" (included in the HBSR). Article “Strategies to Lure Investors”, R. Whittington, in: Financial Times: Mastering Management Series Nr. 4, October 2000 (article is downloadable from EBSCO) Prepare case Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century” Write a case analysis of Case “Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century” (702442) Sessions TOPICS/Teaching Purpose to a close or whether this apparent slowdown was just another blip in the course of a century of enviable performance. Teaching Purpose: Industry and competitor analysis. Case Discussion of Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century (702442) ........Continued 22-25 Case Discussion: "Crown Cork & Seal in 1989" (HBS 793-035) The case describes the structure and recent trends of the metal container industry, Crown's successful strategy for competing in the industry, and John Connelly's leadership over more than 20 years. In 1989, William Avery succeeded Connelly as CEO and is forced to consider new strategic options in the face of industry change. Teaching Purpose: Allows for a structural analysis (five forces) of the industry, identification and evaluation of a classic focused strategy, and a critique of proposed new strategic directions. Case Discussion: "Crown Cork & Seal in 1989" (HBS 793-035) ........Continued Teaching Purpose: Allows for a structural analysis (five forces) of the industry, identification and evaluation of a classic focused strategy, and a critique of proposed new strategic directions. Corporate Role in Business Strategy Shared Value Revision Homework/ Recommended readings before class Prepare case Cola Wars Continue: Coke vs. Pepsi in the Twenty-First Century” Prepare case "Crown Cork & Seal in 1989" (HBS 793-035) Write a case analysis of Case "Crown Cork & Seal in 1989" (HBS 793-035) Prepare case 5 "Crown Cork & Seal in 1989" (HBS 793-035) Read through lecture notes and relevant material Final Exam Week (April 25 – May 2) Please note that the professor reserves the right to modify this outline – regularly check the course website at http://ibobel.pbworks.com for announcements and modifications! Revision Date: January 2012