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STRATEGY
Master in Management Universidad Carlos III de Madrid
Quarter: Fall Professor(s): Kurt Desender, Office 6.0.29, ([email protected]) sites.google.com/site/kurtdesender/
SHORT COURSE DESCRIPTION
“Strategy” is designed to develop your ability to understand at a fundamental level how and why some firms achieve and sustain superior performance. The course draws on frameworks and findings from a number of academic disciplines, especially economics, organization theory, sociology, accounting, and management policy. Successful strategy design and implementation requires a broad-based understanding of the firm’s external environment and competitive landscape, as well as its capabilities and potential positioning. The course is designed to develop this integrative view of the firm and its environment, along with appropriate analytical skills.
OBJECTIVES
The course aims to provide you with specific tools that will enable you to:
- Understanding how firms gain and sustain competitive advantage;
- Analyzing strategic business situations and formulating strategy; and
- Implementing strategy and organizing the firm for strategic success.
Success depends not only on the soundness of the formulated strategy, but also on effective implementation through appropriate organizational choices. This course focuses on strategic decisions, and with both the content of those decisions and the processes by which general managers position the businesses and allocate resources under conditions of uncertainty and competition. This course utilizes various tools, concepts, and analytical frameworks that enhance our ability to define and analyze strategic problems
and to identify sources of competitive advantage from both an industry and firm- level perspective.
This course focuses on key issues in formulating and implementing strategies to create and sustain competitive advantage. Emphasis is given to developing pragmatic and action-oriented general management skills. Extant theory within the fields of strategy, accounting, economics, finance, international business, marketing, political science and organization theory have important implications for general management. Thus, this course emphasizes cases and lecture/ discussions.
METHODOLOGY
To accomplish our objectives, we will use a variety of learning techniques: lectures, outside of class assignments, readings, written reports, presentations, and most importantly, class discussion of case studies.
Case Analysis
Strategic thinking and analysis are best learned through practice. The capstone business cases we will study concern real-world business situations. These cases are designed to provide you with data on real-life managerial problems, and case analysis is useful as a simulation of actual managerial activity. These integrative cases provide an opportunity to both apply the concepts that we discuss in class as well as to further develop our ability to think about business strategy. How much you learn from these strategic management cases depend on your preparation and active participation. Everyone is expected to participate effectively in each class to comment, question, and analyze.
Group Work
Discussing cases and preparing analyses outside of class helps to deepen your knowledge about strategic management. Group work will be essential for the major group project.
Exam
There will be an in-class (closed-book) final exam. This exam will test both your mastery of the concepts and your ability to apply them.
Individual Participation
Active participation in the class is an essential part of the learning experience. You are expected to contribute both to the case discussion and to discussion during the lecture sessions.
REFERENCE BOOKS
Grant, R. Contemporary strategy analysis, 7th edition. Wiley. (This is an excellent book that covers all major issues in strategic management. I strongly recommend you to buy a copy). Besanko, D., Dranove, D., Shanley, M., and Schaefer, S., Economics of Strategy, 5th^ edition. Wiley & Sons. (Selected chapters only. This book illustrates how economics can be used to formulate strategies.) Material distributed during the course (articles, case studies, etc.). Available at Aula Global 2.
OFFICE HOURS
Professor: Kurt Desender (please contact first by email)
DETAILED PROGRAM OF THE COURSE
Class 1: Introduction to Strategy
Readings: Grant, R. Ch1 and Ch2. Michael E. Porter, "What is Strategy?" Harvard Business Review, November-December 1996, Reprint #96608(*)
Cases/Exercises: Madonna(*) Red Bull
Learning Objectives :
- Introduction to the strategic management course.
- What is strategy and what is its role in achieving the objectives of the firm?
- What is sustainable competitive advantage and how can the strategic management process enable the firm’s managers to achieve such an advantage?
- What are the elements in “defining the business?”
- What are the hierarchical definitions of strategy?
- What is “strategic coherence?” Why is it important?
Assignment Questions:
- What is Strategy?
- In Porter's view, what is the difference between Operational Effectiveness & Strategy?
- What is the role of tradeoffs in Operational Effectiveness & Strategy?
Class 2: Industry Analysis
Readings: Besanko et al. Industry Analysis. Ch11. Grant R. Ch 3.
Cases/Exercises: Cola Wars Continued: Coke vs. Pepsi in the 21st Century (HBS 9-702-
- (*)
Learning Objectives:
- What are the conceptual approaches to defining performance?
- What are the measures of performance?
- What are some sources of above-average performance?
Assignment Questions:
- 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? Why are concentrate producers integrating into bottling?
- How has the competition between Coke and Pepsi affected the industry's profits? Has competition between the two companies in emerging markets differed substantially from competition in the United States?
- Will Coke and Pepsi sustain their profits? What would you recommend to Coke to ensure its success? To Pepsi?
Class 3: Positioning and Competitor Analysis
Readings: Grant R. Ch4.
Cases/Exercises: Dogfight over Europe: Ryanair (A) (Case: HBS 9-700-115)(*) Ryanair (B) – distributed in class
Learning Objectives:
Readings: Grant, R. Ch10.
Cases/Exercises: Ducati (HBS 9-701-132) (*)
Learning Objectives :
- What are the strategic benefits and risks of a low-cost strategy?
- What are the strategic benefits and risks of a differentiation strategy?
- Define the integrated low-cost/differentiation strategy and discuss its increasing importance in the new competitive landscape.
- Define corporate-level strategy and discuss its importance to the diversified firm
- What are the sources of value creations by diversification?
Assignment Questions:
- How does Ducati create value?
- What is the economic logic behind Minoli’s turnaround efforts? In which ways have they been successful & unsuccessful?
- Should Ducati get into cruisers?
Class 7: Sustainability and Industry Transformation
Readings: Pankaj Ghemawat, "Sustaining Superior Performance" (*)
Cases/Exercises: Kodak and the digital revolution () The Circus Industry() The Cirque du Soleil
Assignment Questions:
- In Ghemawat’s view, what are the major threats to sustainability?
- Why did Kodak fail to benefit from the digital revolution?
- What are the most likely threats to the sustainability of Ryanair’s competitive advantage?
Class 8: Midterm evaluation + Project outline presentations
Readings: None
Cases/Exercises: Be prepared for your presentation and for an in-class exam
Class 9: Vertical Integration
Readings: Grant, R. Ch 13.
Cases/Exercises: a) News War: Sun vs. Mirror(); b) Zara: Fast fashion()
Assignment Questions:
- In Sun vs. Mirror, what is the role of vertical integration?
- How does Zara use a vertical integrated structure to create a competitive advantage?
Class 13: Project Presentations
Readings: None
Cases/Exercises: Be prepared for your presentation
