imba 2005/2006 business policy and strategy … · web viewcase preparation dogfight over europe:...

COURSE OUTLINE

Program unit: Advanced Corporate Strategy

Target group: St. Gallen CEMS - MIM

Period: Monday, November 22nd – Friday, November 26th, 2010

Instructors: Prof. Dr. Fred van Eenennaam Prof. Dr. Pablo Collazzo

Coordinator: Hansje Vlam ([email protected])

Study-load: 29 contact hours

General course descriptionIn the five days the Advanced Corporate Strategy course comprises, you will learn to master concepts that go beyond the average. The course focuses on the two areas of gaining strategic insight and dynamics of strategy. First, it will address the foundations of strategic thinking, some of the fundamental insights from the strategies of successful companies, and the main elements and concepts of strategy. Furthermore, the course will go beyond the static view of strategy. It introduces the concepts of uncertainty, competitive actions and reactions and complex dynamics and discusses how these affect a company’s strategic landscape.

It is our strong intent to support the case discussions with live interaction with managers from the case companies through video conference. However, this is highly dependent on the technical infrastructure available at Universtät St. Gallen and beyond the scope of our control.

Course Objectives- Developing strategic insight and understanding of the dynamics of

strategy, through exploring and applying strategic core concepts.- Taking advantage of lessons that have been learned from the

experiences of successful companies.- Emphasizing the importance of having strategic insight and providing

the tools and concepts for turning insight into strategy.- Providing concepts for thinking about and dealing with strategic

uncertainty..Course Materials

Required reading:1. Digital articles, book excerpts and cases2. Ghemawat, P., Third Edition, 2009, Strategy and the Business

Landscape. Prentice-Hall, Chapters 1-5.

Recommended reading:1. Mintzberg, Ahlstrand and Lampel, Second Edition, 2009, Strategy

Safari. Simon & Schuster

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2. Johnson and Scholes, Eigth Edition, 2010, Exploring Corporate Strategy. Prentice Hall

3. Collins, 2001, Good to great. Harper Collins

AssessmentPerformance will be assessed by a mix of a group presentation and an individual assignment. The group presentation accounts for 30 per cent of your final grade and the final exam for the remaining 70 per cent. For the former, you will be divided up in four groups, each presenting one of the discussion questions of the Ahold case study in the last session. Each group will have 30 minutes for the presentation, including discussion and feedback (see detailed schedule, page 14). For the final exam, five broad questions will be given relating to the topics of the course. You will have to select one of those questions and write a 5-page essay answering it. The paper will be judged on the following dimensions:

- Degree of having insight in the course topics- Degree of applying the concepts and theories- Degree of using own experience/company- Degree of making judgments based on the concepts and theories- Quality and clarity of reasoning

Grades procedureThe 5-page essay should be sent by email to [email protected] ultimately Sunday, December 26h, 2010. The grades and feedback comments will be made available to CEMS-MIM Program Management ultimately Wednesday, January 26th, 2011. CEMS-MIM Program Management will determine the time of disclosure of the grades.

Exam reviewAlthough feedback on the essays will be made available, there will be an opportunity to receive additional feedback on the graded essay. If you want to make use of this service, please send an email to [email protected]

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mailto:[email protected]

providing a detailed request with motivation. The instructors reserve the right to re-review the essay as a whole.

Absence from classSince participation in class is essential to both your learning and that of your fellow students, all class sessions are mandatory. In case you cannot make it to class, send an email in advance to the Course Coordinator, Hansje Vlam ([email protected]), clearly stating the reasons for your absence. At the end of the course it will be decided by the instructors whether these are valid reasons or not and, consequently, whether your absence will affect your grade.

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Monday, November 22nd

Time Topic Description Readings / Case questions Instructor

08:15 – 09:00

Introduction to the course

Theme, topics and outline of the course Prof. Prof. Dr. Pablo CollazzoProf. Dr. Fred van 09:15 –

12:00Strategies of successful companies:Developing strategic insight

Discusses how companies create successful strategies. Various topics among which:- What is the purpose of a business?- How do we measure the

performance of a business?

Readings:- Handy – What Is A Company For?- Christensen, Raynor, Verlinden –

Skate To Where The Money Will Be

Prof. Dr. Pablo CollazzoProf. Dr. Fred van Eenennaam

13:15 – 14:15

Case preparation - Intel Corporation 1968 – 2003 (9-703-427)14:15 –

16:00Case discussion:Intel Corporation 1968 – 2003 (9-703-427)&Intel Corporation 2005 (9-706-437) (Will be handed out in class)

Describes three stages in Intel’s history; initial success and then collapse in DRAMs and EPROMs, transition to and dominance in microprocessors, and supplier of building blocks for the Internet economy.

Case questions:1. What was Intel’s strategy in

DRAMs? Why did Intel decline in the DRAM market?

2. How were they able to create and sustain a competitive advantage in microprocessors? What are the main threats to sustainability?

3. Why did Intel choose to enter new businesses such as networks, wireless communications and online services under Craig Barrett? Do these choices make sense?


16:15 – 17:00

What is strategy IThe origins of strategy

Video of Michael Porter discussing his view on the essence of strategy.

Readings:- Porter – What Is Strategy?- Ghemawat – Strategy and the

Business Landscape, Chapter 1, The Origins Of Strategy


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Evening Case preparation - De Beers Consolidated Mines Ltd. (A) (9-391-076)

- Singapore 2008 (9-793-096)

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Tuesday, November 23rd


08:15 – 10:00

Case discussion: De Beers Consolidated Mines Ltd. (A) (9-391-076)&De Beers Consolidated Mines Ltd. (B) (9-702-434)(Will be handed out in class)

Depicts De Beers, the dominant firm that traditionally buffered the diamond industry by stockpiling excess production, facing an unprecedented surge in supply and drop in demand in 1983.

Case questions:1. What functions does the CSO

perform as a global intermediary? How do these functions help expand the economic pie in the diamond industry?

2. How does that expanded economic pie end up getting divided among the various players in the diamond industry? Why?

3. Should De Beers pull the plug on the CSO’s stock lining strategy? Depending on your answer, what specific actions would you recommend?


10:15 – 12:00

What is Strategy IIBuilding the strategic business plan: eight key-concepts of Strategy

- Ambition

Discusses the definition of strategy and its key concepts:

Direction

Readings:- Collins, Montgomery – Competing

On Resources: Strategy In The 1990’s

- Hamel, Prahalad - Strategy As Stretch And Leverage


What is Strategy III- Position Scope, scale and synergy

Competitive advantageEnvironment


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What is Strategy IV- Strategic Implementation and Execution

ResourcesStakeholdersOrganization

Readings:- Ghemawat – Strategy And The

Business Landscape, Chapter 2 and 3;


What is Strategy V- Dynamics Long term


14:15 – 15:30

Dynamics of Strategy IDealing with uncertainty: Scenario analysis

Discusses the concept of uncertainty and the implications of uncertainty for the strategic approach

Readings:- Sull, Escobari – Creating Value In

An Unpredictable World- Courtney, Kirkland, Viguerie –

Strategy Under Uncertainty


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15:45 – 17:00

Case discussion:Singapore 2008 (9-793-096)

Economics & Strategy Case questions:

1. What was Singapore’s competitive position at independence? Why did Lee Kuan Yew decide to abandon his initial economic development strategy?

2. What was Singapore’s economic development strategy between in-dependence and the late 1970s (be specific about the components of the strategy)? Why was it so suc-cessful?

3. Why did Singapore shift its strategy in the late 1970s? Why was Singa-pore able to sustain its success?

4. What are the competitiveness is-sues facing Singapore in 1992?

5. What are the key elements of an economic strategy for Singapore for the next decade? What significant policy steps are needed, and what is their rationale?


Evening Case preparation - Dogfight over Europe: Ryanair (A) (9-700-115)

- Cola wars continue: Coke and Pepsi in the 21st century (9-702-442)

- Environmental Sustainability in the Port Supply Chain

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Wednesday, November 24th


08:15 – 10:00

Case discussion: Environmental Sustainability in the Port Supply Chain

Sustainability as a source of competitive advantage

Case questions:1. How will the Port of Rotterdam Au-

thority be able to assist its cus-tomers in their environmental de-mands going forward?

2. Can a sustainability strategy be profitable to the Port Authority?

3. What actions can the PoRA take in order to contribute to the ‘green-ing’ of supply chains?

4. How can the PoRA distinguish itself from competitor ports when it comes to sustainability?

Prof. Dr. Fred van Eenennaam, Prof. Dr. Pablo Collazzo

10:15 – 12:00

Strategy and Society Discusses the concept of uncertainty and the implications of uncertainty for the strategic approach

Readings:- Van der Lugt & De Langen – Port

Authority Strategy: Beyond the Landlord – A Conceptual Approach

- Porter – The link between Competi-tive Advantage and Corporate So-cial Responsibility


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14:15 – 15:00

Dynamics of Strategy IICompeting on the Rock or Not

Discusses competitive strategy from a warfare perspective. Provides various real-life examples of firms engaged in rivalry in their industry

Readings:- Ghemawat – Strategy And The

Business Landscape, Chapter 4; Anticipating Competitive Dynamics

- Eenennaam – Dynamics of Strategy, the games of competitiveness and Corporate Governance, Chapter 3; Dynamics of Strategy: the Games of Competitiveness.


15:00 – 16:00

Dynamics of Strategy IIICompeting on the Rocks – Competitive Moves

Case discussion:Dogfight over Europe: Ryanair (A) (9-700-115)&Dogfight over Europe: Ryanair (B) (9-700-116) (Will be handed out in

Looks at the entry and expansion of a low-cost airline in the face of entrenched competition

Case questions:1. What is your assessment of

Ryanair’s launch strategy? Is it sensible? Will it succeed?

2. How do you expect Air Lingus and British Airways to respond? Why?

3. How costly would it be for Aer Lingus and British Airways to retaliate against Ryanair’s launch rather that accommodate it?


Dynamics of Strategy IVCompeting on the Rocks – Competitive Moves

Discusses competitive strategy from a war-fare perspective. Provides various real-life examples of firms engaged in rivalry in their industry.


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16:15 – 17:00

Dynamics of Strategy VCase Discussion: Cola wars continue: Coke and Pepsi in the 21st century (9-702-442)

Case Questions:1. Why is the soft drink industry so

profitable?2. Compare the economics of the

concentrate business to the bottling business: Why is the profitability so different?

3. How has the competition between Coke and Pepsi affected the industry’s profits?

4. Can Coke and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks?


Dynamics of Strategy VICompeting on other Rocks – Competitive Gamesmanship

If so much is at stake, why are companies surprised by competitive conduct? Discusses war games to more systematically describe, predict, and shape competitive conduct to your advantage

Readings:- Ho, Weigelt – Game theory and

competitive strategy; from: Wharton on Competitive Strategy, chapter 5


Evening Case preparation - Puma AG (303-075-1)- Google Inc. (9-806-105)- Dutch Flower Cluster

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Thursday, November 25th

Time Topic Description/ questions Readings / Case questions Instructor

08:15 – 10:00

Dynamics of Strategy VIICompeting for an emerging Rock – The Art of Competitive Pressure Systems

Case discussion:Puma AG (303-075-1)

In the 1980s, Puma was close to bankruptcy and had a terrible brand image. Following a change in management, a new strategic direction was chosen and implemented in three major strategic phases. The first phase was aimed at restructuring the company – mainly from a financial perspective. The next phases were aimed at investing in the brand and product and gaining momentum respectively, and were greatly successful.Now, in 2005, Puma is facing the next – fourth – strategic phase that they are about to launch early 2006.

Case questions:1. What is the message Puma wants

to communicate? Given Puma’s positioning in the market, explain why the international sports market is fragmented? Consider also the long run.

2. Why is Puma able to be that profitable in such a long-grown industry? What is Puma’s competitive advantage and how will it be able to maintain this advantage regarding the threat of increasing competition?

3. How can Puma optimize its “operational excellence”? Can the brand value be further leveraged? Where are additional growth potentials?

4. Compare the economics and success factors of the sports and the lifestyle market: why are there significant differences in valuation?

5. Illustrate an adequate strategy for Puma to ensure sustainability of its competitive advantages and business success. How can Puma fulfill its goal of being the world’s most desired sports brand?


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10:15 – 12:00

Dynamics of Strategy VIIICreating a New Rock: Clusters and Ecosystems

Case Discussion: Google Inc (9-806-105)

Case questions:

2. What are the key factors behind Google’s early success?

3. Do you expect the web search business to become more concentrated (i.e., dominated by fewer firms)? Is search a winner-take-all business?

4. In renewing its deal with AOL, could Google afford to pay AOL more than 100% of the revenue generated from AOL searches? How did Microsoft’s maximum affordable bid for AOL’s search traffic compare to Google’s?

5. In addition to enhancing its core search businesses, should Google also branch out into new arenas? Which of the following would you recommend: 1) building a full-fledged portal like Yahoo!’s; 2) targeting Microsoft’s desktop software hegemony; and/or 3) becoming an e-commerce intermediary like eBay?


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14:15 – 15:15

Dynamics of Strategy IXCreating a New Rock: Clusters and Ecosystems

Case Discussion:Dutch Flower Cluster

Takes a competitive dynamics perspective on corporate portfolio management

Case Questions:1. What do you think

of the strategic agenda of the Dutch Flower cluster, is it complete or in-complete? Is it achievable and man-ageable?

2. What do you think will be the future role of the tradi-tionally organized auctions?

Readings:- D’Aveni – Competitive Pressure

Systems: Mapping and Managing Multimarket Contact

- D’Aveni – Corporate Spheres of Influence


15:15 – 16:15

Dynamics of Strategy XScenario Analysis: What managers should know about complexity theory.

Provides a general structured approach to analyzing and anticipating competitive dynamics

Readings:- Kupers – What organizational

leaders should know about the new science of complexity.


16:15 – 17:00

Dynamics of Strategy XI

Discusses some fundamental insights on the unpredictable behavior of complex systems and the implications this has for strategy development

Readings:- Bonabeau, Meyer - Swarm

Intelligence, A Whole New Way To Think About Business

- Beinhocker - Strategy At The Edge Of Chaos


Evening Case preparation - GE’s Two-Decade Transformation: Jack Welch’s Leadership (9-399-150)- The Ahold Case (A); The Ahold Crisis

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Friday, November 26th


08:15 – 09:45

Strategy Execution, Leadership and Governance

Case discussion:

GE’s Two-Decade Transformation: Jack Welch’s Leadership (9-399-150)

Discusses the reasons for success at GE.

Case questions:1. How difficult a challenge did

Welch face in 1981? How effec-tively did he take charge?

2. What is Welch’s objective in the series of initiatives he launched in the late 1980s and early 1990s? What is he trying to achieve in the round of changes he put in motion in that period? Is there any logic or rationale supporting the change process?

3. How does such a large, complex diversified conglomerate defy the critics and continue to grow so profitably? Have Welch’s various initiatives added value? If so, how?

4. What is your evaluation of Welch’s approach to leading change? How important is he to GE’s success? What are the implications for his replacement?


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10:00 – 12:00

Case discussion: The Ahold Case (A); The Ahold Crisis&The Ahold Case (B); ‘Ahold’s Road to Recovery’.(Will be handed out in class)

Team presentations: participants are divided up in four groups, each addressing one of the case questions

Case questions:1. How can the success of Albert Heijn

/ Ahold until 1996 be explained and what was the role of (members of) the non-executive board in this?

2. What went wrong between 1997 and 2001 and what was the role of (members of) the non-executive board in this?

3. What are the most important lessons to be learned from the fall and restart of Albert Heijn /Ahold?

4. What should Albert Heijn / Ahold do in the future?


12:00 – 12:30

Questions and answers, assignment description and course wrap-up


Sunday, December 26th

21:00 Exam Deadline Submit your 5-page essay by sending it to XXX. Please make sure that you receive a confirmation of receipt. If you do not receive one, you are responsible for taking action and making sure your work has been received.

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