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Syllabus B189 — Fall 2018

RoomBBC 130
Day Thursday
Time 6pm-8:45pm
 
Instructor: Simon Rodan
Office: BT 457
Office Hours: Thursday, 4:15pm-5:45pm
 
Email: simon.rodan@sjsu.edu

Course Description

Integrative capstone seminar analyzing inter-relationships of managerial decisions/actions within and between the firm and its environment. Applies multi-disciplinary techniques to diagnose and recommend actions appropriate to specific company situations, using case method.

Prerequisites: COMM 100W or ENGL 100WB or LLD 100WB. The course is restricted to graduating seniors only.

Program Level Learning Objectives

  • To sharpen students' ability to think critically, logically and strategically.
  • To diagnose business situations from a strategic perspective.

Course Learning Objectives

By the end of the course students should be able to demonstrate an ability to:
  • Apply the following strategic analyitical perspectives to unfamiliar business situations
    • Value-price-cost framework
    • Industry and competitive analysis (Porter’s 5 forces model)
    • The Resource Based View of the firm
    • Generic strategies
    • Economies of scale, experience and learning
    • Diversification
    • Acquisition
    • Transaction costs economics and vertical integration
    • Network externalities
  • Apply the knowledge, tools and techniques you have studied in your courses in economics (ECON 1A, 1B), accounting (BUS 20, BUS 21), marketing (BUS 130), operations management (BUS 140), management and organizational behaviour (BUS 160), finance (BUS 170), and QBA (BUS 190) in the context of a business simulation.

Required Reading

There are two required readings for this course.

The first is Rothaermel, Frank, Strategic Management: Concepts and Cases, 3rd Edition. ISBN: 9781307327465.

This is a customized version of the book, tailored specifically for this class. It is cheaper than buying the complete book (we will be using only a few of the cases from the complete book and removing them in this custom text reduces its cost significantly). Importantly, it contains additional case material that you won't find in the "off-the-shelf" version.

Follow this link to buy the book

If you do not get this on-line text and instead use a used copy of the book without the additional cases, here are links to the cases you will need to buy seperately:

    The second is a collection of handouts, “Supplemental Readings in Strategy” which you can download here.

    Evaluation

    Class contribution (5%) At the end of the semseter, I make an assessment of the contribution you have made to the plenary class discussions. I tend to ask questions of the class as a whole and will rarely call on you individually to answer a question; so it is up to you to volunteer information. At a minimum, you must show that you have prepared for the class. Beyond knowing basic facts about the case, I will look for your ability to think logically and to connect the different theories we look at to the case material.

    Exams (35%) There is one mid-term exam and a final which will respectively count for 15% and 20% of your course grade. The exams will generally require either short answers or a single short essay based on a 3-4 page fictional case. Spelling and grammatical errors will reduce your grade.

    Simulation (25%) Your grade in the simulation exercise will be based on:

    • The accuracy of your unit sales forecasting model (5%)
    • The quality of your business plan, in partucular its logic, coherence and the clarity of the writing (10%)
    • Your end of semester presntation (10%)
    • Your company’s financial achievement in the simulation based on the Z-score or pro-score metrics (15%)

    In your business plan you should explain:

    • the strategy you are adopting (Cost leadership or Differentiation)
    • the metrics you see as the important measures of your team’s performance and why
    • the targets you have set yourselves on each of those metrics and how you arrved at them
    • how you propose to translate your strategy into your operational (pricing, advertising, training, R&D, line scheuling and construction, and financing) decisions

    Similarly, in your presentation you should explain:

    • the strategy you adopted
    • how your team performed on each against the targets you have set yourselves on each of your chosen metrics
    • What worked and what didn’t and why
    • What you will take away from the simulation

    In your written reports and oral presentation clarity and straight-forwardness is infinitely preferable to spin and BS.

    Typically teams should be three or four - larger than that leads to coordination problems which generally lead to poor finanical performance. The roles / functions that need to be undertaken are:

    • Sales and marketing, including unit forecasting
    • Production scheduling and capacity planning
    • Accounting, finance and cash-flow management
    The price of the simulation software is $100 per team or between $25 and $20 per person (for teams of 4 and 5 respectively). In the interests of full discuosure, I have a financial interest in the use of the software as a junior partner in the develpment of the web version of the BPG simulation. However, my interest in, and use of, this particular simulation preceeded, and indeed was a factor in my joining the BPG development partnership.

    Peer 360 evaluation (15%) 4 times during the semester you will be asked to make an assessment of your team members’ contributions. Each assessment counts for 5% and the best 3 out ot 4 will be used in calculating your grade. You must complete your evaluation for your team’s assessment of your performance to be counted towards you grade.

    Quizes and other exercises (20%) There will be occasional pop quizzes and in-class (or occasionally take-home) exercises.

    Grading scheme

    I do not use a fixed scale to assign final letter grades. Since exams may vary in difficulty from semester to semester and I often introduce new ones, a fixed scale would be unfair. My approach is to determine the grading scale approximately based on the highest and lowest total scores for the semester’s work. This means you are not penalized if I set a particularly hard exam. This is not a forced curve, but the ends of the scale are determined by the range in perfomance across all the evaluation dimensions mentioned above. Differently abled students should contact me if these evaluation procedures are not appropriate.

    If you want to keep track of your scores during the semester do not use Canvas. Instead, use "Score View" to view your scores in the course.

    Following a recent change in university policy, there are no extra credit assignments.


    Class schedule


    Aug 23rd, 2018
    (Thursday)
    1. Introduction to the Course and the Simulation
    To prepare: Buy the edited version of "Rothaermel: Strategic Management, 3rd edition" ISBN 9781307327465
    Download - “Supplemental Readings in Strategy”
    Download - Business Policy Game manual
    Class agenda:
  • Information you will need
    • Text book - On-line, customized version of Frank Rothaermel’s book “Strategic Management 3rd edition Concepts and Cases”
    • Other required reading - accumulated handouts in “Supplemental Readings in Strategy”
    • Cases
  • Culminating Experience: The Business Policy Game Simulation
  • Assignments and Exams
  • Sumitting assignments using Canavas (not for score summary)
  • Grading
  • Teams

  • Introdution to the Business Policy Game
    • Key functions
      • Sales & marketing, demand forcasting
      • Production and operations management, scheduling and capacity planning
      • Accounting, financing and cash flow management
    • Software interface
    • Marketing mix
    • Demand forecasting
  • Four ‘quick fire’ quarters
  • Decision Schedule

  • Quick run-through of the 360 evaluation interface
  • Aug 30th, 2018
    (Thursday)
    2. Generic Strategies, Scale and Learning
    To prepare: Rothaermel, Chapter 6 "Business Strategy: Differentiation, Cost Leadership, and Blue Oceans"
    Supplemental Readings, Chapter 7, "Generic Strategies"
    Rothaermel, Chapter 1 "What Is Strategy, and Why Is It Important?
    Class agenda:
  • Lecture / discussion – Generic strategies
  • Video – Fiat Chrysler Warren Plant Press ~ 00:10-01:00. 02:11-02:22
  • Lecture / discussion – Profitability, Scale and Learning
  • Presentation slides: Generic strategies
    Profitability, Scale and Learning
    Sep 6th, 2018
    (Thursday)
    3. Self-study
    To prepare: Accounting exercise
    Class agenda:
  • Review what you have learned about financial accounting statements from your B20 class
  • Use this to solve the problems in the "Accounting" exercise
  • In-class exercise – Financial accounting exercise ( download the questions here: Accounting exercise )
  • Assignments due: Financial accounting exercise
    Sep 13th, 2018
    (Thursday)
    4. Sales Forecasting
    Class agenda:
  • What should we be forecasting?
  • Factors that affect sales
  • Seasonality
  • Building a one quarter model
  • Extending to a 12 quarter forecast
  • Sep 20th, 2018
    (Thursday)
    5. Industry and External Analysis
    To prepare: Frank Rothaermel, Chapter 3 "External Analysis: Industry Structure, Competitive Forces, and Strategic Groups"
    Chapter 1, “Competitive Strategy”, Porter, M. E. (1980), Free Press
    Supplemental Readings in Strategy: Chapter 4 "Porter's 5 forces"
    Supplemental Readings in Strategy: Chapter 5 "More on Bargaining Power of Buyers"
    Exide case (up to "Manufacturing, Employees, and Facilities")
    Class agenda:
  • External Analysis
  • Negotiation exercise
  • Case discussion – Exide case (up to "Manufacturing, Employees, and Facilities")
  • Presentation slides: Industry Analysis
    Sep 27th, 2018
    (Thursday)
    6. Internal Firm Analysis - The Resource Based View
    To prepare: Frank Rothaermel, Chapter 4 "Internal Analysis: Resources, Capabilities, and Core Competencies"
    Supplemental Readings in Strategy, Chapter 6, "The Resource Based View"
    TeleDanmark in 1995
    The Air Express Industry
    Airborne Express in 2002
    Class agenda:
  • Internal Analysis
  • Please read The Air Express Industry for the industry background to Airborne Express case
  • Case discussion – Airborne Express in 2002
  • Presentation slides: The Resource Based View of the Firm
    Assignments due: 360 Evaluation #1
    Oct 4th, 2018
    (Thursday)
    7. Internal Firm Analysis - The Resource Based View Continued
    To prepare: Nucor in 2001
    Class agenda:
  • Case discussion – Nucor in 2001

  • Simulation - status review
    • 5 miunte presenations from each group
    • Goals / metrics and targets
    • Submit 1 page goals statements
  • Oct 11th, 2018
    (Thursday)
    8. Mid-tem Exam
    Class agenda:

  • 2 ½ hours, open book
    Use the link below to submit your answer.
     
  • Assignments due: Mid-term exam
    Business plan
    Oct 18th, 2018
    (Thursday)
    9. Exam review and Business Models
    To prepare: Frank Rothaermel, Chapter 5, page 129 "Popular Business Models"
    Frank Rothaermel, Case: "Barnes & Noble vs Amazon"
    Dixons - Dealing with on-line retailing
    Stihl Chain Saws - Thriving Outside the Big Box
    Class agenda:
  • Team exercise / peer feedback on mid-term
  • Lecture / discussion – Business models
  • Case discussion – Frank Rothaermel, Case: "Barnes & Noble vs Amazon"
  • Case discussion – Dixons - Dealing with on-line retailing
    Focus on what Dixons did to combat the threat from on-line retailing.
    What were the key components of its strategy? What is the key to Dixons' new business model?
  • Case discussion – Stihl Chain Saws - Thriving Outside the Big Box
  • Presentation slides: Business models
    Assignments due: 360 Evaluation #2
    Oct 25th, 2018
    (Thursday)
    10. Diversification
    To prepare: Frank Rothaermel, Chapter 8.4 "Corporate Diversification: Expanding Beyond a Single Market"
    First Grayhound, Then Grayhound Dial, Then Dial...
    Case "Sony vs. Apple: Whatever Happened to Sony?"
    Class agenda:
  • Lecture / discussion – Diversification
  • Case discussion – First Grayhound, Then Grayhound Dial, Then Dial...
    If time permits...
  • Case discussion – Case "Sony vs. Apple: Whatever Happened to Sony?"
  • Presentation slides: Diversification
    Nov 1st, 2018
    (Thursday)
    11. Acquisition and Vertical Integration
    To prepare: Frank Rothaermel, Chapter 9 "Corporate Strategy: Mergers and Acquisitions, Strategic Alliances"
    The Hanson Trust
    Honda and Triumph (pt 1)
    Frank Rothaermel, Chapter 8.2 "8.2 The Boundaries of the Firm"
    Frank Rothaermel, Chapter 8.2 "8.3 Vertical Integration along the Industry Value Chain"
    Supplemental Readings, Chapter 8, "Transaction Cost Economics"
    Swiss watchmakers - Time is money
    Class agenda:
  • Lecture / discussion – Acquisitions
  • Case discussion – The Hanson Trust
  • Case discussion – Honda and Triumph (pt 1)
  • Lecture / discussion – Vertical Integration and Transaction Cost Economics (TCE)
  • Case discussion – Swiss watchmakers - Time is money
  • Presentation slides: Acquisitions
    Vertical Integration and Transaction Cost Economics (TCE)
    Nov 8th, 2018
    (Thursday)
    12. Self-study
    To prepare: Decision tree exercies
    Class agenda:
  • Review what you have learned in B90 and B190 on decision trees and the calculation of expected value
  • Use this to solve the problems in the "Decision Tree" exercise
  • Individual exercise – Decision tree exercise ( download the questions here: Decision tree exercies )
  • Assignments due: Decision tree exercise
    Nov 15th, 2018
    (Thursday)
    13. Network Externalities
    To prepare: The Home Video Game Industry: From Pong to X-box
    Class agenda:
  • Case discussion – The Home Video Game Industry: From Pong to X-box
  • Lecture / discussion – Network Externalities
  • Presentation slides: Network Externalities
    Assignments due: 360 Evaluation #3
    Nov 22nd, 2018
    (Thursday)
    14. Corporate Social Responsibility and Final Review
    To prepare: Case "Google Inc.: Figuring Out What to do with China"
    Class agenda:
  • Case discussion – Case "Google Inc.: Figuring Out What to do with China"
  • Review of key ideas from this course
    • The Demand Curve, Monopoly and Oligopoly Profit Maximization
    • Value Creation and Appropriation (VPC), Consumer and Producer Surplus
    • Industry Analysis - Porter's model
    • The Resrouce Based View
    • Generic Strategies
    • Diversification
    • Corporate Acquisitions
    • Cash flow valuation
    • Vertical Integration and TCE
    • Financial accounting (P&L, Balance sheet)
    • Present value calculation
    • Network effects
    • Nov 29th, 2018
      (Thursday)
      15. Presentations
      Class agenda:
    • Presentation of year 7 results

      Imagine this to be a presentation to your board of directors. These are the poeple who hire (or fire) you as the company's managers. Their job is to ensure that you are doing the best possible job for the company's shareholders. Keep this in mind as you put your presentation together.

      • Each team has 30 minutes including time for questions
      • Each team member must present for rougly the same amount of time
      • Bring a hard copy of the slides (for the instructor)
    • Assignments due: Video of presentation rehearsal (dry-run)
      360 Evaluation #4
      Dec 6th, 2018
      (Thursday)
      16. Final Exam
      Class agenda:

    • Part 1 - 5:15pm - 6:15pm
    • 1 hour, open book

    • Part 2 - 6:15pm - 7:45pm
    • 1 ½ hours, open book
    • Use the links below for access to the questions and to to submit your answers.
       
    • Assignments due: Final exam - part 1 (~60 minutes)
      Final exam - part 2 (~90 minutes)