MG 422- Management Policy



SI422 – Strategy, Innovation, & Global Competitioninstructors: Paul Cosway, John Kirks, Joseph LiPuma, Lynn Walter, &Jeff Furman (course coordinator)version: 30 August 2017 [Please be sure to read this Syllabus thoroughly prior to your 1st class session!][We know it is long (and may be dull in places), but it is an essential guide for the course!][We are not joking – please be sure to read this carefully.][We have planted some Easter Eggs in the syllabus, just to check whether you have read it.] SI422 Administrative Detailsinstructor: Jeff Furman (HAR#653a; furman@bu.edu; 617-353-4656)office hours: Tue/Thu, 9.15-10.45pre-requisites: CORE (Questrom 323 sequence)TAs: TBA; note that TAs have a limited role in grading for the course; your instructor does all primary evaluationCourse Overview, Learning Goals, Modules, & Materials II.1. Course Description & Learning GoalsSI422 introduces students to issues associated with formulating and implementing strategy in the global environment. It draws on findings from a number of academic disciplines, especially economics, organization theory, sociology, accounting, control, and management policy to build a fundamental understanding of how and why some firms achieve and sustain superior performance. Readings and cases are designed to lead towards understanding of the underlying economics affecting a firm’s external and internal environments and the implications of these fundamental factors for affecting the practice of strategy design. The course is designed to challenge students both inside and outside of the classroom. The curriculum includes common themes across all sections, but also enables faculty initiative to tailor the course to reflect their specific expertise.The course’s primary objective is to enable students to understand and analyze the factors that affect organizations’ long-run economic performance and to provide them with the tools to make recommendations regarding how firms can improve long-term performance. In order to do this, the course aims to provide students with tools that will enable them to:Assess the structure of firms’ external environments and understand how these affect expected long-run industry performanceEvaluate firms' competitive positioning and assess firm-level resources and capabilitiesAssess the dynamics of competition and understand how economic, social, political, and technological forces can determine the need for strategic re-positioning and affect long-term industry and firm profitabilityUnderstand how global events, including political and technological changes, can shape firm strategies and long-term firm and industry profit potential.Develop recommendations for firm strategies at the business-unit, corporate, geographic levels that take into account an understanding of firms’ internal and external environments.SI422 is designed to function like an MBA course and to prepare students (a) for potential MBA courses in the future and (b) for the intensity of the professional experience. Consistent with this approach, we emphasize class preparation, class discussion, and professionalism to a substantial degree – for example, cold-calling may comprise 33% or more of all in-class contributions. If you cannot prepare for class on any particular day, please inform your faculty member in advance. Also note that SI422 is a coordinated but not standardized course. The design, flow, and core material is the same in each section of the course and there is a common Midterm. Individual cases, discussions, and assignment details may vary across sections to take advantage of the unique experience and expertise of each instructor.II.2. Course Modules & StructureSI422 is organized into a number of modules, which are described below:Introduction – This module introduces the course structure, content, and requirements. It emphasizes the norms of class participation and active debate that are the cornerstones of learning in SI422. Further, the module introduces the concepts of value creation and value capture and fundamental facts about the variability of profits across and within industries.Industry Analysis – This module investigates the factors that affect industry average profits and determine long-lived differences in profitability across industries. It presents a powerful framework for thinking about differences in structural conditions across industries (Porter’s Five Forces Framework) and examines changes in industry structure over time.Positioning & Competitive Advantage – This module examines the sources of differences in profitability within industries. We explore the ways in which some firms achieve competitive advantage, i.e., profitability greater than the industry average. We will pay particular attention to the firm’s choice of strategic position and the fit between its strategy, its internal resources and capabilities, and its external petitive Dynamics – This module examines the evolution of competition and the factors that affect whether firms can sustain superior profits over time. In order to demonstrate competitive dynamics, the module incorporates a historical case analysis and analysis of the profit histories of several firms.Corporate & Global Strategy – This modules shifts our focus course away from business unit analysis and onto the decisions at the corporate level. In particular, we examine choices about the horizontal, vertical, and global scope of the firm, including decisions regarding the set of industries in which a firm competes, the sets of steps in the value chain in which the firm will participate, and the locations and modes of global competition in which the firm engages.Innovation & Advanced Strategy – This module highlights advanced topics in strategic management, most notably those related to innovation and technology strategy. Readings and case explore issues associated with disruptive change, including whether potential entrants or incumbents are most likely to introduce or be threatened by technological innovation, profiting from innovation, and competition in markets characterized by standards. Team Presentations, Course Review, & Wrap-Up – We conclude the course with sessions devoted to team consulting project presentations and a final session that reinforces key concepts and discusses broader issues in Strategy & Innovation. II.3. Course Materials:The course material required for purchase is the Reading Packet, available at the Questrom Copy Center. Additional materials will be posted to QuestromTools.Course Expectations, Evaluation, PoliciesIII.1. Course Expectations – Preparation, Time Investment, Class Contributions, & Attendance:Preparation & Class Contributions: The Course Schedule towards the end of this syllabus lists all required readings and particular questions for each class – you can ensure your readiness for each class by completing these readings and preparing your answers to those questions. It is essential that you read the assigned material and that you prepare the Class Preparation Questions before coming to class. Faculty will assume that you are prepared for every class unless you inform them prior to class that you are unprepared. Some faculty will employ online assessments (conducted on QuestromTools) to supplement Class Prep Questions and to ensure (and gauge) preparation for each session. The results of these assessments may also be incorporated into your Class Contributions score.Cold Calling: We plan on incorporating “cold calling” into every class. The purpose of cold calling is not to create anxiety but to ensure that participation is equitable, that all class members contribute to class discussions, and that all members are prepared for these discussions. The requirement to contribute is universal and applies even if you are extremely shy or sleepy during scheduled class times or if English is not your first language. If you are particularly worried about your class contributions, please check in with us within the first two weeks of the semester and we can work with you in creative ways to help your contributions. For example, we could coordinate with you on an issue for you to raise in class or a question for you to answer. Your faculty may offer some ways to obtain a limited number of class contribution points in other ways, e.g. via current events, advanced strategy topics presentations, or online class preparation assessments. There is, however, no alternative to participating in class discussions. Faculty will post interim class participation scores by the time of the midterm at the latest.Time expectations: We anticipate that students take si422 along with 3 (or 4) other BU courses, which, together, constitute a professional schedule of 40 hours investment. As a result, we have designed SI422 with the expectation that students will devote, on average, 12-15 hours a week to the course, including time in class, time spent preparing for class or studying for exams, time spent preparing assignments, and time in teamwork. Assessment of Class Contributions: Assessment of class contributions is based on your active involvement in discussion of cases & course materials and reflects primarily the quality (and secondarily the extent) of your contributions to the classroom environment and to the learning of all participants. Positive contributions may include: providing germane illustrations; motivating the use of a particular tool or technique; helpful recapitulation or summarizing; making observations that link or integrate concepts or discussion; responding effectively to questions; asking perceptive questions; illustrating specific points by appealing to your own experiences; quoting movies that neatly illustrate important elements of readings or cases; as well as presenting or supporting alternative, or unpopular, positions. Being “wrong” will not count against you, but it will also not help out. Making empty or repetitive comments that do not add to the discussion will also not help, and may hurt if these comments interfere with the ability to discuss issues in depth. Your instructor will post your mid-semester class contribution scores for your information. If you are worried about your class contribution scores or your ability to speak in class, please see your instructor as early as possible during the semester so that they can help you on this. We really would like everyone do contribute to class discussions.Decorum: Students who dominate discussions, discourage, intimidate, or show a lack of respect for other participants, or diminish the value of the class in any way, will be penalized. In particular, we are all expected to treat colleagues with respect (e.g., to disagree with an idea without discrediting the speaker), to help others to articulate their points of view, and to use discussion time judiciously.Norms: Class discussions will be conducted by the norms of a professional business meeting. Arriving for class after the session has begun, causing disruptions (including via ringing cell phones), and unnecessarily leaving class will count against your class contributions.Attendance: Satisfactory class contributions require attendance at every session of the course; preparation of all materials for every session; and active, quality participation in class discussions. Simply attending class, however, does not constitute a positive contribution to class and will not yield high class contribution scores. Recognizing that senior year is a complex time, we can excuse three absences during the term (for any reason). If you anticipate that you will need to miss more than three sessions, then you should take SI422 in another term. Students who miss more than 5 sessions will have their grades reduced an entire letter grade and students who miss more than 7 sessions may fail the course as a result. Assignments are always due at the beginning of class on their due date, even if students are unable to attend class that day.Fun BU Fact & SI422 Syllabus Easter Egg #1: Did you know that the most recent BU Nobel Prize winner is Osamu Shimomura, who won the 2008 Nobel Prize in Chemistry for his discovery of green fluorescent protein in the jellyfish aequorea victoria? Other BU faculty who have won the Nobel Prize include Daniel Tsui (1998, Physics), Derek Walcott (1992, Literature), Sheldon Glashow (1979, Physics), & the late Elie Wiesel (1986, Lit.) & the late Saul Bellow (1976, Lit.). BU alumni Rev. Dr. Martin Luther King and Oscar Arias Sánchez won the Nobel Peace Prize in 1964 and 1961, respectively.III.3. Assignments & GradingThe course deliverables include a set of individual assignments, a semester-long team-based project, and an individual, class midterm (which will be offered on a Thursday evening). Assignments are always due at the beginning of class on their due dates. Just to reiterate: excused absences are not excuses to turn assignments in late. If you must miss a class in which an assignment is due, please e-mail the assignment to your instructor before class begins on the date on which it is due. Late assignments will not be accepted.Individual Writing Assignments: Over the course of the semester you will be asked to submit three individual writing assignments, one of which may be done in class while the others will be done individually out of class. Note that these are to be individual (not collaborative) efforts. You may discuss ideas with other class members, but the writing in these assignments must be your own. If you build on outside sources (including newspaper or journal articles or conversations with your classmates, advisors, or friends) or if you paraphrase or quote external sources, you are expected to cite them appropriately. Plagiarism (passing someone else’s work off as your own) is an extremely serious academic and ethical violation and will result in academic charges – ignorance or oversight does not excuse borrowing ideas or words without attribution. If you are unsure, err on the side of caution by citing your sources. We will dedicate attention to the quality of your writing in all written assignments, including clarity, grammar, usage, appropriateness, and use of reference materials. Please write all assignments in the style of business correspondence, following the norms introduced in your prior Questrom writing instruction (e.g., ES275 and the Career Management sequence). We will make available some helpful guides on business communication (including helpful tips such as “avoid contractions,” “avoid the passive voice,” and “know the difference between ‘their’ & ‘there’ and ‘its’ & ‘it’s’). Feel free to use the 1st person (“I” or “we”).Consulting Project: The course will also incorporate a semester-long Consulting Project, which will involve teams preparing a Strategic Analysis for public corporation. Your faculty will provide more details during the first month of the course. Your performance on the Final Project will include both Individual and Team Components and will depend on both an oral and written Team Consulting Presentations with a written Executive Summary. The content, format, and timing of the project may vary slightly across sections. Instructors in all sections will provide consultation with students on their written and oral projects over the course of the semester.Grading: The relative weighting of assignments in SI422 is as follows:Fraction of Course GradeMid-Term Exam30%Class Contributions30%Consulting Project20%Individual Assignments20%TOTAL100%There will be absolutely no grade deflation in SI422. ! (There will also be no grade inflation.) Final course grades will be the result of pure mathematical computation, based on the formula above.If you have any questions about grades that you receive on particular assignments, you must raise them within two weeks of receiving your assignment grade. Unless we have made computational errors, we will not alter scores after final grades have been determined. If you have particular grade-related considerations that you think are important, please raise these with your instructor as early as possible (during the first half of the semester at the latest!), so that your instructor can help you approach the course in a way that will help you achieve your best possible performance. III.4. Academic integrityConsistent with the overall aims of the Questrom School and the Questrom UG Program, Academic Integrity is of central concern in SI422. If there is anything that your instructor can do to improve the environment supporting academic integrity in the course, please inform her/him as soon as possible. We would like to make the following expectations regarding academic integrity clear:Midterm: Individuals may prepare in groups for the Midterm and may use course readings, slides and supporting materials in their preparation for the course. We expect, though, that all contributions on the exam reflect individuals’ own knowledge and that students’ answers will not be aided by supplemental materials during the exam. Students may not consult notes or electronic devices during the exam. Students may ask questions of the faculty but should not converse or share information with other students about the exam until all students have completed the exam. Midterm exams will be returned to students and recent, old exams will be posted for student reference.Class preparation assessments: These are individual assignments. In those sections that use online or in-class assessments we will expect that students’ answers are completed without consulting any other students. Students may consult course materials while completing online assessments in those sections that offer them, but should not consult outside materials when completing the assignments.Individual writing assignments: Unless otherwise specified by your instructor, please feel free to use all course materials in order to prepare your answers to these assignments and to talk in general terms with fellow students about the approach to these assignments, about the way in which you may apply the concepts to your assignments, and to talk with other students about the extent to which your assignment addressed faculty expectations. Please be sure, however, to cite all sources of content or important ideas that are not your own and to quote sources if the original words are not your own. Although students are welcome to engage editorial support, students should ensure that the writing on the assignment is theirs alone. (If you would like to be most careful, feel free to identify any sources of editorial aid as a footnote or in the references section of your assignment, e.g., “Although the analysis and writing in this assignment were my own, William Shakespeare helped me correct grammar on this assignment.”) Consulting Project: This is a team assignment. Teams will be assigned by your instructor, subject to randomization. All members of the team are invited to contribute to the project. The project should reflect the original analysis of the members of the team. Students may consult all materials that might be helpful in completing the analysis, but should reference sources of ideas and analyses fully and appropriately.III.5.Attendance policySatisfactory class contributions require attendance at every session of the course; preparation of all materials for every session; and active, quality participation in class discussions. Simply attending class, however, does not constitute a positive contribution to class and will not yield high class contribution scores. Recognizing that senior year is a complex time, we can excuse three absences during the term (for any reason). If you anticipate that you will need to miss more than three sessions, then you should take SI422 in another term. Students who miss more than 5 sessions will have their final grades reduced an entire letter grade and students who miss more than 7 sessions may fail the course as a result. Assignments are always due at the beginning of class on their due date, even if students are unable to attend class that day. III.6 Academic accommodations for students with special needs:In keeping with University policy, any student with a disability who needs or thinks they need academic accommodations must call the Office of Disability Services at 617-353-3658 or stop by 19 Deerfield Street to arrange a confidential appointment with a Disability Services staff member. Accommodation letters must be delivered to your instructor in a timely fashion (not later than two weeks before any major examination). Please note that accommodations will not be delivered absent an official letter of accommodation.Fun BU Fact & SI422 Syllabus Easter Egg #2: Nice work – you have made (almost) it to the end of the text part of the syllabus. Did you know that the following former BU students have won Academy Awards: Geena Davis, Olympia Dukakis, Faye Dunaway, Julianne Moore, Harold Russell, Marisa Tomei, and Michael Williams? Fun BU Fact & SI422 Syllabus Easter Egg #3: OK – this really is the end of the text part of the syllabus. Did you know that Alexander Graham Bell was a BU professor at the time he invented the telephone?[Syllabus continues on the next page with Course Schedule…]COURSE SCHEDULE[Note that the course schedule may change; pay careful attention to your faculty & the QuestromTools site.]Module 1: Introduction - What is Strategy?Session 1:WHAT IS STRATEGY? COURSE OVERVIEW (Tue-Sep-05/Wed-Sep-06)Reading #1: “What is Strategy?” Michael Porter (HBR, 1996, Reprint 96608) Note: This reading is available free online for all BU affiliates through the BU library. To save $$$ (woo-hoo!) the article will not be in the reading packet. Note: You must be on the BU network or logged in via VPN to gain access to the reading.Reading #2: Please check your course’s QuestromTools site. Your instructor will post Day #1 readings. Please choose one of the posted readings, answer the Class Prep Questions for that reading, & bring a printed copy of your answers to class.Reading #3: Please skim the Syllabus before the first class!Class Preparation Questions (Porter Reading):What is the difference between Operational Effectiveness & Strategy?What does Porter say that some Japanese firms do not have a Strategy? Do you agree or disagree with him? Why?What is the role of tradeoffs in Strategy?What is a Strategic Activity Map?Class Preparation Questions (Case Reading):What are the key lessons of the reading you chose?What, if any, are the implications of the reading for industry-average profits and firm average profits?Session 2: WHAT IS STRATEGY? AN HISTORICAL & CONCEPTUAL OVERVIEW(Thu-Sep-07/Mon-Sep-11)Reading #1: Robert M. Grant & Judith Jordan, Foundations of Strategy, Chapter 1, [link here; please read pp. 1-26 & pay extra attention to “Strategy History”] Reading #2: Also, please read the Syllabus carefully! (We will talk about it today!)Class Preparation QuestionsIn Grant’s view, what is the difference between strategy & tactics?What is the resource-based view? How is it different from other views of Strategy?What is the difference between business strategy (aka, “business unit strategy”) and corporate strategy? What is the difference between the design and emergence view of strategy?What are the key advances in the history of Strategy research?[Syllabus continues on next page…]Module 2: Industry AnalysisSession 3: THE ECONOMICS OF A LOW PROFIT INDUSTRY (Tue-Sep-12/Wed-Sep-13)Required Reading: Levitt, Steve & Sudhir Venkatesh, “An Economic Analysis of a Drug-Selling Gang's Finances,” Quarterly Journal of Economics, 2000. [to be posted]Relevant blog entry: Matthew Yglesias, “When Cartels Are Cartels, Public Safety Wins,” Slate, Moneybox, 20 Aug 2012. [link posted above]Alternative Reading: Levitt, Steve & Stephen Dubner, Freakonomics, Chapter 3, “Why Do Drug Dealers Still Live with Their Moms?” (2005) Some sections will use alternate Case: Coffee Shops Please read this case with the aim of understanding the economics of retail sales! Focus in particular on the costs of entry, the nature of rivalry (and the impact of rivalry on costs and prices), the power of suppliers and buyers, and the relative value of substitutes. Be prepared with #s to back up your understanding of the case.Class Preparation QuestionsAre this industry’s buyers price-sensitive? Do these buyers who wield substantial power over the prices that firms in the industry can charge? Why/why not?What are the substitutes for this industry’s products? Do those substitutes exert significant downward pressure on prices (or upward pressure on costs)? Why?Are industry participants confronted with suppliers who have substantial power to raise costs and buyers who have substantial power to reduce price? Why/why not?What resources/investments would an organization need in order to enter into street level drug sales? Is entry into this industry “easy” or “hard”? Why?What form does rivalry take in this industry – does it involve price wars or competition that raises costs? Does rivalry suppress expected industry profits?Session 4: UNDERSTANDING THE FIVE FORCES (Thu-Sep-14/Mon-Sep-18)Reading #1: Joan Magretta, “The Five Forces: Competing for Profits--Understanding Michael Porter's Best-Known Framework” (8889BC-PDF-ENG) [in packet]Optional Alternative Reading: Michael Porter, “The Five Competitive Forces that Shape Strategy,” Harvard Business Review, January 2008 [we cannot post this article, but you can find it online through the BU library]Class Preparation QuestionsTo which level of analysis does the Five Forces framework apply – the firm, the industry, or the country?What is the main purpose of the Five Forces framework?How can we draw industry boundaries?In practice, how can we tell the difference between Rivals and Substitutes?What are the roles of government & technological innovation in Five Forces analysis?[Syllabus continues on next page…]Session 5: THE ECONOMICS OF A HIGH PROFIT INDUSTRY (Tue-Sep-19/Wed-Sep-20)Case: Cola Wars: Coke vs. Pepsi [in packet]Video: Please watch the complete video, “The Five Competitive Forces That Shape Strategy,” Class Preparation QuestionsWhy is the soft-drink industry so profitable?How has the competition between Coke and Pepsi affected the industry’s profits?Compare concentrate and bottling businesses. Why are the differences in profitability so stark? What is causing concentrate producers to integrate vertically into bottling?Will Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of noncarbonated drinks? What would you recommend to Coke to ensure success in the future? To Pepsi?Session 6: INDUSTRY EVOLUTION (Thu-Sep-21/Mon-Sep-25)Case: Adolph Coors in the Brewing Industry [in packet]Class Prep Questions:What technological and social changes helped change the structure of the brewing industry over time? Which choices by industry participants help changed industry structure and industry profitability? Which choices by industry participants helped them adapt their firm’s strategy to best address industry structure and changing industry conditions? How has the structure of the brewing/PC industry changed since the end of the case? What external factors and firm choices have driven these changes? [Note: Thu-Sep-21 evening before Rosh Hashannah; Fri-Sep-22 = Rosh Hashanah; Fri-Sep-29 = evening before Yom Kippur; Sat-Sep-30 = Yom Kippur]Module 3: Positioning & Competitive AdvantageSession 7: COMPETITIVE POSITIONING CONCEPTS (Tue-Sep-26/Wed-Sep-27)Reading: Rivkin & Ghemawat (HBS Note), “Creating Competitive Advantage” [in packet]Class Preparation QuestionsWhat are the two core tradeoffs that firms must make in order to achieve competitive advantage? Why is dual advantage so difficult to achieve?How can analysts (like us) understand firm strategy by using activities based analysis to compare costs and willingness-to-pay across firms?[Syllabus continues on next page…]Session 8: COMPETITIVE POSITIONING – DIFFERENTIATION STRATEGY (Thu-Sep-28/Mon-Oct-02) Case: Ducati (Giovanni Gavetti, HBS# 9-701-132) [in packet]Class Preparation QuestionsWhat makes the motorcycle manufacturing industry so attractive?What were Ducati’s strategic positions before and after Minoli arrived? Which activities & tradeoffs are most critical to its positioning? How did Ducati turnaround from the brink of bankruptcy to become one of the most profitable motorcycle manufacturers in the world? Why are buyers willing to pay such a premium for Ducati motorcycles? Is growth critical for Ducati? Why or why not? Session 9: RELATIVE COST ANALYSIS (Tue-Oct-03/Wed-Oct-04)Reading: Analyzing Relative Costs (Halaburda & Rivkin, HBS 9-708-462) [in packet]Cases: In-Class ExercisesClass Preparation QuestionsWhat are the four key steps in Relative Cost Analysis? What unit of analysis should we use in a Relative Cost Analysis?Should we give up if we cannot get exact estimates of rivals’ costs? What should we do instead?Should we do a relative WTP analysis, too? Why & how? What can we learn from a Relative Cost Analysis? Session 10: COMPETITIVE POSITIONING – COST LEADERSHIP? (Thu-Oct-05/Tue-Oct-10)Case: Trader Joe’s [in packet]To prepare for this class, please visit one of your local supermarkets. Please ask the folks who work there whether they enjoy working there and why/why not. Please also take note of the variety and quality of prepared foods and packaged foods available for purchase and of the physical layout of the stores.Class Preparation QuestionsPlease apply the Five Forces framework to evaluate the attractiveness of the US supermarket industry. Please relate your analysis to the data in the case (especially exhibit 2) that speak to industry pared to a typical grocery store like Kroger or Safeway, does Trader Joe’s compete on lower costs, higher willingness to pay, or both? What are the key choices that Trader Joe’s has made that allow the grocery store to create and capture economic value? How do these choices reinforce one another? How sustainable is Trader Joes’ position in the market? Could an existing rival or a new entrant, such as Whole Foods, imitate its Strategy? What, in your assessment, are the greatest threats to Trader Joes’ competitive advantage (and why)? [Note: No BU classes on Mon-Oct-09 & Tue-Oct-10 = BU Monday schedule!][Syllabus continues on next page…]Module 4: Competitive DynamicsSession 11: RESOURCES & CAPABILITIES – OBTAINING & MAINTAINING COMP ADV(Thu-Oct-12/Wed-Oct-11)Reading #1: "Internal Analysis: Resources, Capabilities, & Activities" [in packet]Reading #2: The Body Shop case [in packet]Class Preparation Questions:Which characteristics of resources are most likely to enable firms to retain competitive advantages?Which resources does The Body Shop possess that are most important for the firm's ability to sustain competitive advantage in its industry? Which ones are VRIO and which are not?What are the chief differences between the approach to firm-level strategy described in the "Resource Based View"/"VRIO framework" and the approach to firm-level strategy outlined by Porter, Rivkin, & Ghemawat (the economics-oriented view)? Which thinks explicitly about the length of time that a competitive advantage will last? How do they think about competitive advantage differently? Session 12: LEADERSHIP ADVANTAGE (Tue-Oct-17/Mon-Oct-16)Reading #1: Peter J Coughlan, “The Leader‘s (Dis)Advantage” [in packet]Reading #2: SAB Tanzania [in packet]Class Preparation QuestionsMany business commentators argue that moving first is a key to competitive advantage. Do you agree? Why or why not? Which economic factors does Coughlan suggest lead to leadership advantage? Which impede leadership advantage?What does Coughlan’s framework imply about SAB’s investments in Tanzania? Which factors suggest that SAB will achieve leadership advantage? Which suggest that SAB will suffer a disadvantage as a result of moving first? Overall, do you think SAB will achieve leadership advantage?Session 13: NON-MARKET STRATEGY (Thu-Oct-19/Wed-Oct-18)Reading #1: BU Note on Non-Market Strategy (Jeff Furman) [to be posted]Reading #2: “What every CEO should know about Non-market strategy” [link here]Case: Sweet Deal (Breakfast Cereal Self-Regulation) [HBS 9-712-463] [in packet]Class Preparation QuestionsWhat are (a) market efficiency, (b) market failures, and (c) the most common causes of market failure?What is the different between negative externalities and positive externalities? How do these externalitiesConsider a particular type of market failure & identify 2 examples of how firms can exploit that market failure to raise industry average profits. Consider a particular type of market failure & identify 2 examples of how firms can exploit that market failure to raise firm profits relative to rivals.What are the key elements of the OIT&T framework described in the BU Non-Market Strategy note?[Syllabus continues on next page…]Module 5: Corporate & Global StrategySession 14: CORP STRATEGY: CONCEPTS & HORIZONTAL SCOPE (Tue-Oct-24/Mon-Oct-23)Reading #1: “Choosing Corporate & Global Scope” (M-Piskorski) [in packet]Reading #2: Apple 2015 [in packet]Reading #3: From Comp. Advantage to Corporate Strategy (Porter) [optional]Class Preparation QuestionsExplain the “Better Off Test” and “Ownership Test” in Horizontal Scope?Explain the “Better Off Test” & “Ownership Test” in Vertical Scope?Consider the horizontal and vertical scope of an organization with which you are familiar – either one that we have discussed in class or one that you are familiar with. Assess whether you believe that it has chosen he correct horizontal and vertical scope and explain why, building on the concepts in the reading. Be prepared to present your analysis in class.Supplemental Class Prep QuestionsHorizontal Integration Questions:What is the difference between related diversification and unrelated diversification?What are economies of scope and what is their role in horizontal integration?What is the role of market power in diversification?Vertical Integration Questions:What is the difference between horizontal and vertical integration?What are the benefits and risks of vertical integration?Achieving Corporate Growth Questions:What are some of the ways that a firm can achieve growth?Why might managers wish to increase firm size when it is not in the best interests of the shareholders?Case QuestionsWhich investments/activities in which Apple engages are most important to its horizontal scope?Has Apple chosen a horizontal scope that makes sense considering its core investments? Why/why not? Are there obvious divisions/businesses that Apple should divest? Are there obvious divisions/businesses that Apple should acquire? Why/why not?Session 15: CORP STRATEGY - VERTICAL SCOPE (Thu-Oct-26/Wed-Oct-25)Reading: Disney-Pixar (D-Collis, J-Alcacer, M-Furey) [in packet]Class Preparation QuestionsIs total value greater when Disney & Pixar are in an exclusive, long-term relationship? Could linking the companies destroy value? If so, how?Does Disney need to own Pixar outright? Why/Why not?Supposed the companies did combine: What would the biggest management concerns be? How do you integrate the Disney & Pixar animation teams?[Syllabus continues on next page…]Session 16:GLOBAL STRATEGY (Tue-Oct-31/Mon-Oct-30)Reading #1: Jordan Siegel, “Global Strategy Note” [in packet]Reading #2: Competitive Advantage of Nations (Michael E. Porter) [link here]Case: LG – Global Strategy in Emerging Markets [in packet]Class Preparation QuestionsIn the view of the Global Strategy Note, what are the “Three A’s of Global Strategy?What is an adaptation approach and can you provide examples of its application? What is an aggregation approach and can you provide examples its application? What is an arbitrage approach and can you provide examples its application? What are some organization modes of market entry?Session 17:GLOBAL LEADERSHIP & STRATEGIC CHANGE (Thu-Nov-02/Wed-Nov-01)Case: Lego [in packet]Class Preparation QuestionsHow have global trends affected the toy industry? Which of the 5 Forces have changed in a favorable or unfavorable direction prior to the near-bankruptcy? What are the internal causes of decline at Lego?What is your assessment of management moves during the "growth period that wasn't (1993-1998) and the "fix that wasn't" (1999-2004)?What do you think that Knudstorp should to turn Lego around?MIDTERM Session 18: MIDTERM REVIEW (Tue-Nov-07/Mon-Nov-06)Readings: Review readings from semester-to-dateSession 19:MIDTERM (covering all material to date) (Thu-Nov-09 = MIDTERM) [all Sections HAR Auditorium, KCB 101, or Morse Auditorium]Module 6: Advanced Strategy TopicsSession 20:INNOVATION STRATEGY (1) – DISRUPTION (Tue-Nov-14/Mon-Nov-13)Reading #1: C-Christensen, “What Is Disruptive Innovation?” [posted; link here]Reading #2: Andrew King & Baljir Baatartogtokh, “How Useful Is the Theory of Disruptive Innovation?”[posted; link here]Reading #3: Netflix [in packet]Class Preparation QuestionsWhat are sustaining and disruptive technologies, according to Christensen?Why does King criticize Christensen’s theory?Why was Blockbuster unable to adapt to DVD by mail? Why was Netflix better able to adapt to video-on-demand?[Syllabus continues on next page…]Session 21:INNOVATION STRATEGY (II) – COMPLEMENTARY ASSETS (Thu-Nov-16/Wed-Nov-15)Reading: Appropriating the Returns from Innovation (Ceccagnoli & Rothaermel) [posted; link here]Case: Tesla [posted]Class Preparation Questions The following idea is often attributed to Ralph Waldo Emerson: “If you build a better mousetrap, the world will beat a path to your door.” Do you agree? What are complementary assets? Why are they important to profit from innovation?If Tesla succeeds in building a better electric car than its rivals, does this guarantee that it will achieve high profitability? What does the firm need, in addition to an excellent car, to achieve high profitability?What are the key complementary assets in the automotive industry? Which assets does Tesla not possess that are essential for profiting from automotive innovation?Session 22:TECHNOLOGY STANDARDS & COMPETITION (Tue-Nov-21/Mon-Nov-20)Reading #1: Carl Shapiro & Hal Varian “The Art of Standards Wars” [handout]Reading #2: “The Current Wars: Edison vs. Westinghouse (& Tesla)” [handout]Class Preparation QuestionsHow does competition in a Standards Race differ from “normal” competition? How is a firm’s relationship with rivals different in a standards war?What are the firm’s key strategic levers when fighting a standards war?What is the role of expectations management in a standards war?Can firms in a standards war recover from initial setbacks? Session 23:IN-CLASS WRITING ASSIGNMENT/EXERCISE (Tue-Nov-28/Mon-Nov-27) [Wed-Nov-22 & Thu-Nov-23: Thanksgiving - Have a happy & safe break!]Fun BU Fact & SI422 Syllabus Easter Egg #4: Did you really read this far & this faithfully in the syllabus? I hope so. Here are a few fun facts about Boston University’s football team. You likely know that BU Football is undefeated since 1998, when former Chancellor Jon Silber shut down the program. But did you know that BU won the Yankee Conference Football championship in 1980, 1982, 1983, 1984, and 1990 and that it made it to the Quarterfinals of the Division I-AA National Championship before being defeated by Furman University. (Note: I am not related to that university.)Module 7: Consulting Presentations & Course Wrap-UpSession 24:TEAM PRESENTATIONS #1 (Thu-Nov-30/Wed-Nov-29)Session 25:TEAM PRESENTATIONS #2 (Tue-Dec-05/Mon-Dec-04)Session 26:TEAM PRESENTATIONS #2 (Thu-Dec-07/Wed-Dec-06) Session 27:COURSE WRAP-UP (Tue-Dec-12/Mon-Dec-11)[End of syllabus; end of SI422!] ................
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