Strategic Management Syllabus

Strategic Management
Spring, 2006
Preliminary Syllabus

Professor Michael A. Roberto

Contact info: Email: mroberto@stern.nyu.edu
Office hours: TBA
Required reading:
Contemporary Strategy Analysis (5th Ed.) by R.M. Grant. Blackwell Publishers. (paperback)
Strategic Management Coursepack
Articles handed out or available online from EBSCO Host Business Source Premier (free on
campus through the NYU Libraries site)
Course Overview
Why are some firms more successful than others? This is the fundamental question of strategy. This
course analyzes the sources of competitive success among firms and develops knowledge and skills
necessary to effectively analyze and formulate strategy, be it as a manager, a management
consultant, or an investment banker. We will tackle the complexity of analyzing the business
enterprise in this era of globalization and changing firm boundaries and of assessing strategy under
increasing uncertainty.
Course Objectives
The objective of this course is two-fold. First you will develop strategic thinking by learning the
concepts, models, and tools of strategic analysis and by applying them to actual competitive
situations. Second, you will build your skills at communicationlearning to present ideas
concisely and persuasivelyand at working collaborativelyobtaining better results by drawing on
everyones knowledge and experience and building working relationships despite differences in
opinions and priorities.
Teaching Philosophy
In class, I will act as moderator, facilitator, and lecturer to help you gain a better understanding of
strategic analysis. By actively participating in class discussions, you will sharpen your own
insights, and those of your classmates. Most of you will not only become familiar with the content
of the course, but perhaps more importantly, you will also learn to master the process of analysis
and critical thinking that is a central aspect of strategy.

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Active Involvement. This class is designed so that participation plays an integral role in the learning
process. Everyone must prepare the assigned material before class and participate in class
discussion. You should expect me to "cold-call" frequently during class. A substantial portion of
your grade will depend on your ability to contribute productively to our collective learning
experience.
We will be very demanding with regard to class attendance and on-time arrival in this course,
because our collective learning is maximized with full participation and commitment on the part of
everyone. Please remember that late arrivals are very disruptive to your fellow students and to the
learning process. Your grade will be adversely affected if I discover a problem with regard to
tardiness or absences. When absences must occur, please notify me by email in advance. Please
note that class absences (for any reason) cannot be made up, because written assignments cannot
replicate your contribution and learning experience in class.
Case Discussion. We will be making extensive use of real business cases that provide a forum for
you to apply concepts and analytical tools. The goals for each case discussion are to understand the
strategic nature of the situation, define key issues, recognize critical assumptions and tradeoffs, and
propose strategically sensible recommendations. In order to fully benefit from case discussion, you
should:

Come to class well prepared. Analyze the case using the tools you have learned in class, and
come prepared to answer the case assignment questions in class.

If tables and figures are provided, perform basic analysis to uncover trends and issues that
may not be explicitly mentioned in the case. Probe beyond what is written to what you think
may really be going on, using the course lectures and readings as a guide.

Given the complexities of the real world, there is no single right answer, although some
answers are better than others. To find those, use strategic concepts and tools to analyze a
situation.

On any given day, you may be called upon to state your major conclusions and then to provide
evidence and analysis in support. Even in the most ambiguous situations, it is important to examine
data, reasons, and assumptions that make some answers better than others. For class discussion you
will be expected to draw from all the relevant readings and class discussions to date. Also, please
remember to listen carefully and respectfully to your classmates and suggest supporting or
alternative views. Thoughtful debate is highly encouraged.
Academic Integrity. In order to maintain a vigorous learning community in the classroom, it is
critical that we, as a class, do not tolerate academic fraud (cheating, plagiarism, lying). As a matter
of personal and professional respect for each other, and ourselves we should expect the highest
standards of conduct from our peers and ourselves. Violating these standards takes away the value
and meaning of the educational environment for all of us, and in the event that such a violation
occurs, the individual(s) responsible will be subject to University sanctions that may include failure
from the course, suspension, or expulsion.

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Course Grading
Grading will be based on the following:
Participation
Quizzes
Team Company Analysis

35%
30%
35%

Participation. Your participation grade will be based on both oral contributions during class
(individual comments and informal group presentations) and individual and group exercises (inclass and out-of-class). Since the purpose of the exercises, cold calling, and presentations is to
facilitate your in-class contribution and learning, these may not be made up. You are also required
to attend the Barneys Strategy Event on Friday, April 28th. Please do not ask me for a way to make
up missed exercises; there is no substitute for the in-class aspect of learning in a case-based course.
Quizzes. There will be three non-cumulative quizzes to test and provide feedback about your
mastery of the content of course. These are closed-book, individual quizzes. If you must miss a
quiz, you should contact me at least one week in advance to make arrangements to take the quiz
early. If you miss a quiz unexpectedly, you should contact me immediately to discuss your options
for making up the work. There will be a grade penalty associated with taking a make-up quiz.
Team Case Analysis. Over the course of the semester, you will work in groups of 4-5 to write a
company analysis that utilizes the tools and concepts of the class. The companies to be analyzed
will be announced in class. Each company analysis must include (but is not limited to) the following
components:
1. Brief Introduction & Key Issues
It is your responsibility to identify the key issues that the company currently faces. Often
best to do this AFTER you have done the bulk of your analysis.
2. External Analysis, including
o Porters 5/6 Forces, and
o Macroenvironmental analysis
3. Internal Analysis, including
o Assessment of firms strengths and weaknesses
o Are any of the firms resources sources of competitive advantage? Are those
advantages sustainable? What are the firms core capabilities?
o What do the firms financial statements say about its health? Trends? Comparison to
competitors?
4. Analysis of business-level positioning strategy used by the firm, including
o What the overall positioning of the firm is in this particular market;
o How the positioning strategy is (or is not) supported by its functional strategies; and
o How the positioning strategy influences (or responds to) the competitive and/or
cooperative dynamics of the industry. Be sure to include any appropriate quantitative
analysis of the advantage this position yields (or fails to yield) over the firms
competitors.

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5. Analysis of the corporate-level strategy of the firm

o Identify the businesses the company is in (or is considering entering), how they are
related (or unrelated), and whether and how they create additional value in their
combination. Be specific and detailed. If it is unclear that value is created, try to
assess why the firm might have chosen to enter those businesses.
o Identify and analyze the methods of entry the firm has used to enter those businesses.
Were the methods of entry used (or proposed) the best choice given the firms
objectives, environment, strengths, weaknesses, and strategy? Be sure to include any
appropriate financial analysis to support your assessment.
6. Recommendations
Recommendations should respond to the key issues that the company currently faces,
and must be specific and actionable. They must not be obvious so what platitudes,
and they must be consistent with the analysis. You should evaluate the impact of
each recommendation on the firms environment, strengths, weaknesses, and
strategy. Do not forget to consider the firms financial standing when making
recommendations.
The company analysis should be typed single-spaced, 12 point Times New Roman Font, with 1
inch margins all around. The analysis should be no more than 10 pages, excluding references, and
exhibits. All exhibits should be referred to in the text of the analysis. Please pay careful attention to
the clarity and quality of your writing. Difficult-to-comprehend passages and grammatical errors are
a strong signal that your team has not carefully prepared the company analysis.
You will be expected to gather information regarding the company from a variety of sources (SEC
filings, newspapers, magazines, Wall Street research reports, etc.). I may provide a published case
study as a starting point for your teams analysis. Any information used in your analysis must be
properly referenced. Failure to properly reference any external source constitutes plagiarism. To
avoid any confusion over the originality of your work, your team should work alone, and should not
utilize any analysis found on the web, performed for previous classes, or any other source (for
instance, please do not replicate the analysis performed by a research analyst at one of the large
investment banks; you may, however, draw on data from those research reports).
Both a hard and an electronic copy of the case must be submitted within one week of the last
day of class. Hard copies should be submitted to the instructor personally (or slide under
instructors office door); electronic copies must be submitted to the digital drop box available on
blackboard, indicating the instructor as the recipient. Email submissions will not be accepted. The
instructor reserves the right to submit the case analyses to one of the many plagiarism-detection
programs available.
You may be asked to evaluate your own and your peers contributions to the group company
analysis. This evaluation may be used to scale your grade on the group company analysis.

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SCHEDULE
Class
1

Topics and Reading Assignments

Introduction, External & Internal Analysis, Competitive Advantage
Introduction to Strategic Management
Readings:
Grant, Chapters 1 & 2
What Is Strategy? By: Porter, Michael E.. Harvard Business Review, Nov/Dec96, Vol. 74
Issue 6, p. 61-78 (Access through EBSCO)
Case: Matching Dell Case (A & B) (coursepacket)
Assignment Questions (please be prepared to answer these questions in class):
1. How and why did the personal computer industry come to have such low average
profitability?
2. Why has Dell been so successful despite the low average profitability of the PC
industry?
3. Looking back to 1996, how large was Dells competitive advantage at that time?
Specifically, calculate Dells advantage over the team of Compaq and a reseller in
serving a corporate customer. To size up Dells competitive advantage, you must
understand the gap between a consumers willingness to pay for Dell products and
Dells costs of providing those products. In your analysis, you should compare (a)
the wedge that Dell drives between willingness to pay and costs to (b) the wedge
generated by a Compaq/reseller team. To the extent that Dells wedge is larger, it
has a competitive advantage. The Matching Dell (A) case allows you to analyze
relative costs in 1996 in detail. Please note that the case allows you to compare
willingness to pay only qualitatively. To examine Dells costs relative to its
competitors, consider a typical PC equipped for the business market. From Exhibit
10b, you can calculate the price that Dell charged for such a machine in 1996.
Next, you can use Exhibit 6 to calculate Dells cost of goods sold for such a
machine. Using other information in the case, identify the major categories of cost
differences between Dell and the Compaq/reseller team; as they provide a typical
corporate PC, how do the costs they incur differ? Finally, try to quantify the
savings or extra costs associated with each difference.
4. By the end of the Matching Dell (A) case, how effective have the competitors been
in responding to the challenge posed by Dells advantage? How large is Dells
remaining advantage at the end of that case?
5. At the end of the Matching Dell (B) case, Michael Dell expresses surprise that no
one has copied their business model. Why has no one been highly effective at
imitating Dells approach?
6. Should Dell today continue to expand its product lines to markets such as PDAs,
flat-screen and high definition televisions, digital music players, and digital
cameras?

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Industry Analysis
Readings:
Grant, Chapter 3 & 4
Case: Starbucks Corporation (No case in course materials; assignment to be described at
the end of the first day of class)

Internal Analysis and Competitive Advantage

Readings:
Grant, Chapters 5 & 7
Ratio Analysis Handout (handed out in class)
Case: Wal-Mart Stores in 2003 (coursepacket)
*Quiz 1

Business-Level Strategy and Competitive Dynamics

Competitive Positioning: Cost Advantage
Readings:
Grant, Chapter 8
Case: Airborne Express (coursepacket)

Competitive Positioning: Differentiation

Readings:
Grant, Chapter 9
Case: Edward Jones (coursepacket)

Competitive Dynamics
Readings:
The Right Game: Use Game Theory to Shape Strategy. By: Brandenburger, Adam M.;
Nalebuff, Barry J.. Harvard Business Review, Jul/Aug95, Vol. 73 Issue 4, p57, 15p (Access
through EBSCO)
Case: Dogfight over Europe: Ryanair (coursepacket)

Competitive Dynamics, Contd

Case: Bittersweet Competition (coursepacket)
*Quiz 2
6

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Corporate-Level Strategy
Expanding the Scope of the Firm
Reading:
Grant, Chapter 13
Note on Corporate Governance (handed out in class)
Case: International Management Group (coursepacket)

Diversification Strategies
Readings:
Grant, Chapter 15
Note on Market Failures (handed out in class)
Case: The Walt Disney Company: The Entertainment King (coursepacket)

10

Diversification Strategies, Contd

Reading:
Grant, Chapter 16
Case: Tyco International (A)

11

Corporate Strategy in a Global Context

Reading:
Grant, Chapter 14
Case: House of Tata, 1995 & House of Tata, 2000 (coursepacket)

12

Methods of Entry and Managing Corporate Scope: Mergers, Acquisitions, Joint

Ventures, Alliances, etc.
Readings: Methods of Entry Worksheet (handed out in class)
Case: Daimler-Benz AG: Negotiations between Daimler and Chrysler & The RenaultNissan Alliance
*Quiz

13

Corporate Transformation & Wrap Up

Corporate Transformation & Conclusions
Case: Intrawest Corporation

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This schedule is a guideline only; instructor reserves the right to change the schedule as necessary.