MGMT6800 Seminar in Strategic Management

Dr. Yi Karnes (Spring 2017)

CALIFORNIA STATE UNIVERSITY, EAST BAY

College of Business and Economics/ Department of Management
Spring Quarter 2017

MGMT 6800 Seminar in Strategic Management

Thursday 6:30pm-10:00pm

Professor: Yi Karnes
Office: VBT353
Office hours: W, Th 1:00-2:00 pm
or by appointment
Email: yi.karnes@csueastbay.edu

Required Materials:

1. Reading materials posted on Blackboard: HBRs 10 Must Reads on Strategy (free)

2. Simulation through www.capsim.com (free)
3. Harvard Business School Articles and Cases
http://cb.hbsp.harvard.edu/cbmp/access/62895145

You need to register on the Harvard Business School Case site to create a user name if you do
not already have one. Some course materials are PDF documents and you can open them with
Adobe Reader. After you register, you can get to the coursepack at any time by doing the
following:

Visit hbsp.harvard.edu and log in.

Click My Coursepacks, and then click MGMT6800-Spring 2017

To access simulation on www.capsim.com, please follow the steps below:

1. Go to www.capsim.com, click register

2. Click Create New Account
3. Follow the on screen instructions
4. Use your real name and create an account
5. Use industry ID C88121 to find your simulation

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Course Description

This course presents an integrated approach to developing business strategy. Its purpose is to
teach strategic management concepts and tools to sharpen the quality of strategic business
decision-making. The course uses real-world examples, the instructor and participants
experiences, case analysis, a simulation, and a strategic business consulting project to develop
the decision-making skills of participants in a comprehensive and integrated manner.

Student Learning Outcomes

Understand and be able to perform the key steps in the development of a strategic
business plan for new or existing companies including:
o Assessment and development of companies starting or current business model
and strategy
o Evaluation of companies performance including financials, market share,
innovation, and employment.
o Analysis of companies internal resources and capabilities
o Analysis of companies external environment including value chain, competitors,
industries and markets
o Assessment of strategic options
o Recommendation of company strategy
o Development of implementation steps for strategic plans for functional areas such
as (but not limited to): marketing, sales, R&D, human resources, accounting,
control, production, IT, customer service, and finance.
Understand how companies set strategic direction and how they use data and analysis to
create key strategic and operational performance measures to monitor the effectiveness of
the strategy implemented.
Understand the issues and challenges companies face when developing strategic business
plans to improve performance, such as resistance to change, limited resources, etc., and
the importance of employee involvement in the process, and the need to manage the
strategic planning process.

Learn to communicate professionally, to present analysis, recommendations, strategic plans

and implementation steps clearly, both in writing and in presentations.

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Grading Scheme

Contributions to class discussions (20%)

Individual essay (15%) due 6/1
Group business consulting project
Investor pitch (15%)
Business plan write-up (15%) due 6/1
Group simulation project simulation rounds (15%)
Individual final simulation exam (20%) from 6/1 to 6/7

How to Earn a Good Grade:

1. Before each class read the assigned readings.

2. Participate in class discussions.
3. Do well on the business consulting project.
4. Do well on the exam.
5. Work on a team simulation project.

A general rule of thumb is that study and preparation time, on average, may take 2-3 hours for
every class. My grading scheme is designed to encourage you to study harder. It is important to
note that the hard work will be translated into a higher grade.

(A) 100-94 (B+) 89.99-87 (C+) 79.99-77 (D+) 69.99-67

(A-) 93.99-90 (B) 86.99-83 (C) 76.99-73 (D) 66.99-60
(B-) 82.99-80 (C-) 72.99-70 (F) Below 59.99

Attendance and Participation Policy

Since the course is built around some recent cases, attendance and participation are very
important and required of each student. As in the real world, the cases are rich in detail, yet
open-ended and incomplete at the same time. Therefore, do not approach a case as you would a
book chapter or a magazine article. In order to derive maximum benefit from the case method, it
is essential that you mentally "get inside" the case. At a minimum, the well-prepared student
comes to class equipped with the knowledge of the readings and knows how to answer each of
the discussion questions.

Class participation will be graded based on the subjective assessment of the instructor for each
class. Given the high-caliber of the students, my previous experience suggested that this is likely
to be a key area of differentiation in your final grade.

"Dos" for Case Discussions

Keep an open mind
Relate outside experience
Be provocative and constructive

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"Don'ts" for Case Discussions

Do not make sudden topic changes; recognize the flow of discussion
Do not repeat yourself and others
Do not "cut" others to "score points"

Remember it is the quality of your participation, not the quantity (or air time), that will lead to
good performance in class discussion. The following criteria are employed:
Excellent class participation: The student consistently attends class, consistently
contributes to case discussions, and consistently demonstrates superior understanding and
insights
Good class participation: The student consistently attends class, consistently contributes
to case discussions, and occasionally demonstrates superior understanding and insights
Poor class participation: The student inconsistently attends class, inconsistently
contributes to case discussions, and rarely demonstrates superior understanding and
insights.

Make sure you read the case and article indicated in the class schedule under each class date.
Your responsibility is to get yourself familiarized with the material, and state your opinion in
class.

You need to be able to briefly summarize the situation. In a nutshell, you should be able
to analyze the case, rather than describe it.
You should be able to defend your opinion when the other students raise arguments.
Focus on your analysis, and avoid making empty suggestions such as "We need to be
more competitive." The key will be How to be more competitive? In what ways? In
what markets? With what speed? Make solid, actionable recommendations; better yet,
an action plan will be preferred. Another way to approach this task is to treat this as a
consultant's assignment. In order to get paid, you don't want to repeat the information that
the client has already known.

Everyone is expected to contribute to the discussions in class.

Individual Essay (2-3 pages, single space)

There are seven paired articles and cases assigned for the course. Choose one pair of article and
case to write an essay. Submit it on Blackboard.

1. Your write-up should put forth and explain your understanding of the concepts and
arguments in the article and show your critical thinking.

2. Apply the concepts in the article to the case, analyze the case with the framework you
learned in the article. You can also critique the arguments in the article, show your
reasoning and analyze the case.

Your essay will be graded on four criteria:

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professionalism (specifications, grammar, typing, etc.)

breadth (have all relevant issues been covered?)
depth (have the most important issues been given sufficient consideration?)
competency (are the arguments clear, logical, persuasive?)

If you simply summarize the case, you will not receive a high grade for the paper.
Demonstrate that you understand the relevant issues, analyze them, and make connections to
the assigned readings.

Group Business Consulting Project

Your group will write a business plan (5-8 pages, single space, excluding references and
appendix) and deliver an investor pitch (30-40 minutes) for one of the following two startups:

1. ThermaQuatic
http://www.thermaquatic.com
ThermaQuatic, Inc. is a California corporation offering Cool-n-Heat, a thermoelectric cooling
and heating device and mattress overlay ideal for post-traumatic surgery, patient self-care for
chronic conditions, non-pharmacologic pain management, and personal comfort.

2.I like this grape

http://www.ilikethisgrape.com
I like this grape. aims to be the most robust digital platform, aimed towards millennials, for the
discovery & purchase of wine.

A business plan is a document that explains business opportunities, identifies the market to be
served, and provides details about how the organization plans to pursue it. The plan must detail
the market demand of existing and prospective clients; the companys present status, current
needs, and expected future. You must present and justify ongoing and changing strategic
decisions, marketing plans, financial projections, production demands, and personnel needs.

In particular, for these two startups, your task is to:

Assess technology landscape
Scope competitive position
Identify all market opportunities
Identify all strategic partners
Identify industry competitors
Identify key product selling features

Presentation sample: http://www.fastcompany.com/3050985/lessons-learned/lessons-from-the-

early-pitch-decks-of-airbnb-buzzfeed-and-youtube

Refer to the Appendix: Due Diligence Questions for Business Plans and Writing a Business Plan:
The basics.

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Group Simulation Project

The team projects involve the use of the CAPSIM Capstone simulation software, that requires
you to make integrated decisions across multiple business areas such as R&D, Marketing,
Production, Finance, etc., in managing a $100 million firm over four years.

Each team is required to submit a set of the firm's decisions for each round of the simulation
(due dates indicated in the schedule).

Firm decisions (Annual company performance). In the CAPSIM simulation, each year of
operation is represented by a round of decisions across functional areas. Deadlines for
completing each round are noted in the schedule below. The software will evaluate your
company performance on multiple dimensions based on these decisions. Your team score will
reflect your company performance relative to rivals, that is, the companies operated by the other
teams.

Individual Final Simulation Exam

The final exam is the Comp-XM test that is also part of the CAPSIM simulation.

Comp-XM is short for Competency Exam. It addresses the question, Am I

competent to run a company on my own? The examination explores this question by
giving you a simulated company to manage, and then asking you questions as you run
the business. It is an individual exercise, not a team exercise.

Comp-XM begins with a memo. You have been promoted to CEO of a newly
acquired business unit in Andrews Corporation. This business unit is in a similar sensor
business. You have three established competitors, and you have inherited both a
strategy and a strategic position from the former management team.

Logistically, the simulation is the same as Capstone. However, the scenario is

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different. There are four segments, and the buying criteria are different. You use the
same website and tools, however.

There are four rounds. Each round begins with an online quiz that asks questions
about your situation. However, because your situation is slightly different from every
other students situation, your simulation and quizzes are unique to you.

At the end of each round, you will be asked a series of questions representing Board queries,
based on your firms performance so far and the material you studied in the course. You have to
complete the exam by the deadline indicated in the schedule. Half of your score on the exam will
be linked to firm performance and the other half to your responses to Board queries.

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Class Schedule1

3/30 Introduction

4/6
Reading:
1. HBRs 10 Must Reads on Strategy What is Strategy (Blackboard)
2. Writing a Business Plan: The Basics
3. Case: Casper Sleep Inc.
Homework: Complete Capsim tutorials.
Group formation on the business consulting project

4/13
Reading:
1. Pipelines, Platforms, and the New Rules of Strategy
2. Case: Corkd: Building a Social Network for Wine Lovers

4/20
Reading:
1. HBRs 10 Must Reads on Strategy Using the Balanced Scorecard as a
Strategic Management System (Blackboard)
2. Case: Zipcar: Refining the Business Model
Simulation practice round 1

4/27
Reading:
1. When Growth Stalls (Blackboard)
2. Case: Raiser Senior Services The Stratford
Simulation practice round 2

5/4
Reading:
1. Rediscovering Market Segmentation
2. Case: Firefly Network
Simulation competition round 1 due

1
Minor changes may be made in the course content as the quarter progresses

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5/11
Reading:
1. HBRs 10 Must Reads on Strategy The Five Competitive Forces that
Shape Strategy (Blackboard)
2. Case: Rent the Runway
Simulation competition round 2 due
Discussion: Industry and Market Analysis for the Business Plan Project

5/18
Reading:
1. HBRs 10 Must Reads on Strategy Reinventing your business model
(Blackboard)
2. Case: Netflix
Simulation competition round 3 due

5/25 Business Consulting Project Presentation

Simulation competition round 4 due

Final exam Starts Th 6/1 6:30pm

Ends W 6/7 10pm

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Appendix: Due Diligence Questions for Business Plans

Executive Summary

Industry and Market Analysis:

Industry/Market:
What problem do you want to solve? What industry gap/niche do you want to fill?
How do you plan to solve this problem and/or fill the gap?
What are your short-term and long-term objectives?
How big is the market for your products/services regionally, domestically and
internationally today and in the next five years?
What market share do you intend to acquire?
Upon what events and factors does the success of your company depend?
Who and what could stand in the way of success of your company?

Context:
What are the critical regulations, subsidies, and tax benefits that the opportunity is
based on? (Please include subsidies in your financial analysis.)
How likely are these government mechanisms to change in the next five years?
How are demographic trends and economic conditions likely to affect your market and
financial projections?

Product/Service/Customers:
What products/services do you intend to offer to your customers in the next five years?
For each product/service type:
What and how much will you produce/provide?
How many and who are your potential customers for your products?
How much are they willing to spend (purchasing volume capabilities)?
What are the customers using now? What is the value to the customer of these
other products/services?
What are the compelling reasons for customers to switch to your companys
products/services?
How will you secure and grow the demand for your product/services in the
long-term?

Competition:
Who are your current local and national direct and indirect competitors?
How difficult is it for potential competitors to move into your market?
Who else may be able to exploit the same opportunity now and in the near future?
How will competitors respond to your companys entry into the market?
Describe how other competing products/technologies are different from yours?
At what price do your competitors sell products/services?
At what cost do your competitors produce products/services?

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Does your product or production process give you a cost advantage, and how much of
an advantage?
What other competitive advantages do you have?

Strategy Implementation:

Team:
What are the expertise and the responsibilities of the management team members?
Where have the people worked and for whom prior to working with your company?
What experience do the people have that is directly relevant to your product/services?
What other experts/advisers are or will be involved in the project?
How long have people been working for your company?
What kind of expertise is missing on your management team? What additional
workforce/skills will the company require for further expansion in the next 5
years?
How and when do you intend to acquire this expertise?
How do you compensate your management team and other employees?

Funds:
How much capital has been invested in your company so far?
What funding have you received so far? (When, how much and from whom?)
How much personal capital have you invested in your company so far?
How much funding is required to complete your projects, specify by project in the next 5
years?
What sources will you use to secure necessary funding?
What activities you will undertake to receive funding in the next 5 years?

Product/Technology:
How do you intend to protect your intellectual property related to your
products/processes/services?
What is the status of patents or other protection of intellectual property (issued and
pending patents)?

Production Processes:
Describe the production process of your products/services in detail?
How successful were you at your trials to produce your prototype products/offer your
services?
How many and what type of production facilities (demonstration and/or commercial
facilities) do you have and plan to construct in the next 5 years?
Where and when did you or will you start construction of the facilities? When do you
intend to finish the construction of the facilities?
What parts of the value chain do you engage in and who are the partners/suppliers you
work with?
What type of contracts do you have in place with your partners/suppliers?

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Who are the technology providers for your production facilities and who are their
customers in the United States?
What resources does the company control such as technology and facilities, sources of
raw materials, etc.?
How do you or will you secure the resources for the production of your
products/services short-term and long-term?
What are the challenges in scaling the operations from a demonstration facility to a
commercialization-sized facility?

Distribution Channels/Marketing:
What distribution channels does your company use to reach its target market?
How mature is the targeted market and what level of channel development/partnership
is needed?
How will the products/services be priced for the next 5 years? (Based on your cost per
unit analysis and additional margin)
How do you get your product/service known? What promotional content/media will
you use to advertise your product?

Financials and investment Returns:

Please provide detailed cost estimates and revenue projections for your company by
project/product/service? ( Five-Year Projected Income Statement, Balance Sheet,
Cash Flow, Internal Rate of Return (IRR) and selected Financial Ratios)
Please provide an explanation for your key assumptions for your calculations.

Exit Strategy:
What aspects of the plan are most likely to change and what are the effects?
What is the companys stated exit strategy?
Would this company be able to issue a public offering, why and if yes, when?
Would your company be an attractive acquisition for a large company, why and when?
What milestones would this company have to meet to achieve either exit form?

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Presentation Grading Rubric:

Exemplary Accomplished Developing Beginning

14-15 points 12-13 points 10-11 points 0-9 points

Overall appearance Well-balanced All group members Most group One main
participation by all have significant members speaker; little
group members. participation. Time participate. participation from
Time is well is well managed. other group
managed. members. Exceed
Original way of time limit.
presentation.

Student presents Audience has Audience cannot

Information Student presents
information in difficulty understand
information in
logical, interesting following presentation
logical sequence
sequence which presentation because there is
which audience can
audience can because student no sequence of
follow.
follow. jumps around. information.

Subject knowledge Subject knowledge Some subject Subject

is evident is evident in much knowledge is knowledge is not
Subject Knowledge throughout. (more of the product. evident. Some evident.
than required) All Information is clear, information is Information is
information is appropriate, and confusing, confusing,
clear, appropriate, correct. incorrect or incorrect or
and correct. flawed. flawed.
Disproportionate
space allocation
to different
sections.

Student maintains Student

Student maintains
eye contact most of occasionally uses Student reads all
eye contact with
Eye Contact the time but eye contact, but of report with no
audience, seldom
frequently returns to still reads most of eye contact.
returning to notes.
notes. report.

Sides are
consistent, clear
Slides are
and readable. Key Sides are consistent, Slides are long,
inconsistent,
words are used clear and readable. crowded and
Slides different style is
instead of Key words are used impossible to
used through out,
sentences. Slides instead of sentences. follow.
difficult to follow.
are interesting and
draw attention.

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Essay Grading Rubric:

Needs
Traits Exemplary Meets Expectations Below Expectations
Improvement

Writers purpose Writers purpose is Writer often loses Main point of the
is clear and clear for the most focus on the main document is unclear
Purpose document has part. point of the and vague.
clear focus. document.

This reader The report is This reader thinks This reader finds
thinks the report organized the document little coherent
has a clear effectively. This must be structure in this
organizational reader thinks the organized more document. No
logic. Transitions documents effectively, as clear rationale is
Organization between ideas organization could readers will be apparent for why
are handled well. be confused or the document is
refined/tightened misled. set up the way it
(headings, better is. The document
transitions, etc.). is confusing.
This reader thinks This reader thinks This reader The document is
the writer has the writer made thinks the weak because of a
made excellent good use of document lack of evidence
use of research research and would be and support, and/or
and sources, sources, citing substantially the evidence used is
helping well. In a few strengthened formatted so poorly
Evidence strengthen/build places the with that its difficult to
the argument with documents main more/better tell what is cited.
this material. point could have evidence,
been strengthened and/or the
with additional evidence
evidence. presented is
formatted in a
sloppy,
This reader This reader noticed distracting
This reader noticed This reader noticed
noticed few some grammatical/ manner.
numerous many grammatical/
errors, if any. The mechanical errors, grammatical/ mechanical errors.
document is clear, but those errors did mechanical errors, The reader felt the
and the writer not interfere with and those errors number of errors
Correctness shows the readers interfered at times made the
: grammar considerable understanding of the with the readers document difficult
& writing mastery of the documents understanding of to understand, and
language. purpose. the documents the reader
mechanics
purpose and/or questioned the
caused the reader writers
to question the skill professionalism
and expertise of the because of these
writer. recurrent mistakes.

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Peer Evaluation Sheet

Team # ______________

Self Team member 2 Team member 3 Team member 4

Name

Score
(7-10)*
Reasons

* Be objective in evaluating other members in your group and specify reasons.

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