J - DePaul University



ECO 798: Business Strategy

Winter Quarter 2009 Syllabus

Section 201

Tuesday

5:45PM - 9:00 p.m.

14 E. Jackson, Room 601

Professor Rafael Tenorio

6207 DePaul Center

(312) 322-8309

rtenorio@condor.depaul.edu

Office Hours:

Tuesdays, one hour prior to class, or by appointment

Course Goals and Description

A. Overview and Objectives

Within a biological context, the Merriam-Webster Dictionary defines strategy as “An adaptation or complex of adaptations (as of behavior, metabolism, or structure) that serves or appears to serve an important function in achieving evolutionary success.” This definition captures the basic approach to strategy we will take in this class. In business, “adaptations of behavior or structure” translate into the formulation of the firm’s business plans and policies, and how they change in response to various conditions, incentives, and stimuli. “Achieving evolutionary success,” on the other hand, translates into generating and sustaining surplus for the firm’s owners. Throughout the term, we will discuss various concepts and frameworks used to analyze and formulate business strategies. You will be introduced to a number of tools and analytical –yet practical- techniques for diagnosing a firm’s competitive position, identifying managerial and organizational issues, evaluating alternative plans of action, and anticipating the consequences of alternative decisions.

Although the overall course structure is ultimately aimed to help you develop and organize a framework for business strategy, the “toolbox” approach we take implies that this class cannot be as structured as other disciplines, like accounting or statistics, which begin with a set of core principles, and then build to harder problems and applications. Strategy is not as linear, and is complicated throughout, and we will be learning new tools -and going back to the old ones- to answer new questions that arise throughout the class.

B. Methodology

Our approach will be primarily inductive. The intention is to understand and become familiar with the application of a number of concepts and frameworks through analysis and discussion of examples and cases. This analysis and discussion will then help us develop broader principles about decision-making and business strategy, which we can then apply in a wide variety of business and managerial decision contexts.

Good cases are often times ambiguous and complex. You may find this a bit frustrating when preparing for case discussions. Some questions posed in the cases may not necessarily have one right answer. However the frameworks and concepts we will learn and discuss in class will help us identify a set of insights and solutions that is better than others. The assigned readings and lectures will complement the cases by providing useful background information and further explanations of the important concepts.

For a case discussion to be valuable, it is essential that you come prepared. Each week, I will post a set of questions on the assigned cases that will serve as the guide and focus of our discussions. It is also important that you deal with the cases as you find them: do not do additional research to find outside or post-case data on the firm or industry, as this will serve the role of a spoiler. If any of you already has post-case or inside information, you will have the opportunity to share it with us at an appropriate point during the discussion.

C. Grading

Case Reports: 20%. You will write a report on an assigned question in preparation for each case. This report should not exceed two typed, double-spaced pages, and it is due in the Blackboard Digital Dropbox before class on the day of the case discussion in question. Either MS Word (preferred), or PDF format is acceptable. These reports will receive a grade of 10 (outstanding), 9 (very good), 8 (good), or 7 (substandard). I will provide feedback on each of these.

Class Participation and Mini-Presentation: 30%. Preparation and participation are vital in this class, as in any class based on the case method. I will not take attendance, but, obviously, you cannot participate if you are not present, so frequent absences will likely lead to a reduced participation grade. Learning opportunities are maximized when all students are actively engaged in class discussion. Active engagement means not only that you have prepared the material, but also that you are paying attention to the comments of other students and seeking opportunities to make comments that move the class discussion forward. Case discussions take a large fraction of class time, so there will be ample opportunity for everyone to participate, especially in a small class like this. To increase opportunities for effective participation, I may occasionally cold call students during the course of a discussion. Rest assured that if you have invested quality time to prepare the case, you will have something valuable to say during the course of the discussion. Also, as part of class participation, for each case, I will assign a mini-presentation (5-10 min) to a student on a specific aspect of the case. Please prepare slides and either e-mail them to me or have them loaded in the classroom’s PC before class.

Final Project and Presentation: 50%. The final project is a 15-20 page (1.5 spaced, 12 point font) analysis of a competitive situation or industry practice. This is due on the Blackboard Digital Dropbox before class on the final day of class. Either MS Word (preferred), or PDF format is acceptable. The goal of the final project presentation will be to clearly set up your case and convince the class that your analysis and major conclusions are accurate and correct. You will have about 30 minutes to do this. All presentations will take place in two marathon sessions; one on the final day of class, and the other one on the date assigned for the final exam. Non-presenters are expected to participate and contribute to the discussion during presentations. Please refer to the Course Documents area of our Blackboard site for extensive guidelines and expectations for the final project.

D. Readings:

-Competitive Solutions: The Strategist's Toolkit, by R. Preston McAfee, Princeton University Press, 2002.

-A course packet, which you can purchase from . This course packet, which includes the cases and some additional articles on the syllabus, is also required. To purchase the course packet, please follow these instructions;

i. Open the XanEdu "Login/Register" page at:



ii. If you have previously registered for another CoursePack, log in. If not, click the "register" link underneath the "Students" heading.  Complete the registration page, and click Continue.

iii. Confirm your Course Pack Selection, and complete the purchase form.

-Miscellaneous readings, which I will post on Blackboard.

E. Additional Course Materials:

For each course section, I will make supplementary materials available on Blackboard. Students are responsible for checking the Blackboard site to download the lecture and case slides, and the case discussion and preparation questions. I will not pass these materials out in class, so please get them in advance as needed.

F. Topics and Dates

Weeks 1-2

Topic: Basic Economics of Strategy

Readings: McAfee (Ch. 1)

F. Scott Morton. “Why Economics has been Fruitful for Strategy”

Financial Times, Mastering Strategy Series, 4 Oct 1999.

M. Porter. "What Is Strategy? (HBR OnPoint Enhanced Edition)." In HBR OnPoint, Case No. 4134. Published 02/01/2000, Harvard Business School Publishing.

E. R. Corey. "A Note on Case Learning." Case No. 9-899-105. Published 11/06/1998, Revised 04/27/1999. Harvard Business School Publishing.

W. Ellet. "How to Discuss a Case." Case No. 2450BC. Published 04/17/2007, Harvard Business School Press.

Case: K. Corts. "Performance Indicator." Case No. 9-702-480. Published 05/20/2002, Revised 05/22/2003. Harvard Business School Publishing.

Weeks 2-3

Topic: Industry Analysis

Readings: McAfee (Ch. 2)

M. Porter, “The Structural Analysis of Industries,” in Competitive Strategy: Techniques for Analyzing Industries and Competitors, (New York: Free Press), 1980.

J. Chevalier. “The Pros and Cons of Entering a Market. Financial Times, Mastering Strategy Series, 1 November 1999.

Case: S. Bradley, and S. Cavanaugh. “Crown Cork & Seal in 1989.". Case No. 9-793-035. Published 03/01/1993, Revised 07/26/2005. Harvard Business School Publishing.

Two-page project proposal due on Digital Dropbox prior to class on week 3

Weeks 3-4

Topic: Firm Analysis

Readings: McAfee (Ch. 3)

D. Collis and C. Montgomery, "Competing on Resources (HBR Classic)." In Harvard Business Review, Case No. R0807N. Published 07/01/2008, Harvard Business School Publishing.

Case: F. Oberholzer-Gee, T. Khanna, D. Lane, and E. Raabe. "Red Flag Software Co." Case No. 9-706-428. Published 10/26/2005, Revised 02/26/2007. Harvard Business School Publishing.

Weeks 4-6

Topic: Game-Theory and Strategy

Readings: A. Brandenburger and B. Nalebuff, "The Right Game: Use Game Theory to Shape Strategy." In Harvard Business Review, Case No. 95402. Published 07/01/1995, Harvard Business School Publishing.

McAfee (Ch. 6)

Cases: Brandenburger, M. Costello, and J. Kou, "Bitter Competition: The Holland Sweetener Co. vs. NutraSweet (A)." Case No. 9-794-079. Published 12/28/1993, Revised 11/13/2000. Harvard Business School Publishing.

D. Spar and J. Burns, “Forever: De Beers and U.S. Antitrust Law." Case No. 9-700-082. Published 02/01/2000, Revised 09/06/2002. Harvard Business School Publishing.

“The Cartel Isn't Forever.” The Economist July 15th, 2004.

Weeks 6-7

Topic: Differentiation and Strategic Positioning

Readings: McAfee (Ch.4)

M. Porter, "Industry Segmentation and Competitive Advantage," Chapter 7 in Competitive Advantage (New York: The Free Press), p. 231-272.

Case: Enterprise Rent-a-Car (various readings).

Weeks 7-8

Topic: Dynamics and the Product Life Cycle

Readings: McAfee (Ch. 5)

L. Cabral, "Networks and Standards," in Introduction to Industrial Organization, (Cambridge: MIT Press).

Cases: “Triumph of the Nerds: The Rise of Accidental Empires,” video.

D. Yoffie, and M. Slind. "Apple Inc., 2008." Case No. 9-708-480. Published 02/29/2008, Revised 09/08/2008. Harvard Business School Publishing.

V. Rangan and M. Bell. "Dell - New Horizons." Case No. 9-502-022. Published 05/10/2002, Revised 10/10/2002. Harvard Business School Publishing.

Weeks 8-9

Topic: Organization and the Boundaries of the Firm

Readings: McAfee (Ch. 7-8)

T. Hubbard, “Integration Strategies and the Scope of the Firm, in Mastering Strategy: The Complete MBA Companion in Strategy (Prentice Hall), p. 65-70.

Cases: M. Porter, C. Montgomery, and C. Moorman. "Household Furniture Industry in 1986." Case No. 9-389-189. Published 04/27/1989, Revised 12/03/1998.

M. Porter, C. Montgomery, and C. Moorman. "Masco Corp. (A) and (B)." Case Nos. 9-389-186 and 9-389-187. Published 04/26/1989, Revised 12/16/1998 and 11/23/1998. Harvard Business School Publishing.

Weeks 10-11

Final paper due prior to class on week 10

Final Project Presentations

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