Syllabus B189 — Fall 2018

Room	BBC 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 23^rd, 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 30^th, 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 6^th, 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 13^th, 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 20^th, 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 Lecture / discussion – Industry Analysis Negotiation exercise Case discussion – Exide case (up to "Manufacturing, Employees, and Facilities")
Presentation slides:	Industry Analysis
Sep 27^th, 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 Lecture / discussion – The Resource Based View of the Firm Anecdotal evidence – TeleDanmark in 1995 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
Oct 4^th, 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 consultation with each group demonstrating forecasting model and accuracy
Assignments due:	360 Evaluation #1
Oct 11^th, 2018 (Thursday)	8. Mid-tem Exam
Class agenda:	2 ½ hours, open book Use the link below to submit your answer. Submit 2 page goals statements. Explain your braod goal(s), what metrics you will us to measure your progress and what your target is for each metric for Y5Q4, Y6Q4 and Y7Q4
Assignments due:	Mid-term exam Goals / Metrics and Targets
Oct 18^th, 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
Class agenda:	Md-term review 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?
Presentation slides:	Business models
Oct 25^th, 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
Assignments due:	360 Evaluation #2
Nov 1^st, 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 8^th, 2018 (Thursday)	12. AACSB Accreditation Assessment
Class agenda:	Today's class is being devoted to assessment. Every 5 years, our College has to report to the AACSB, the accrediting agency for buinsess degree programs, on how it is improving in its mission. One of the College's goals it to help students develop their critical thinking capabilities. In order to track how we are doing, we have to measure those skills. Today we are pilot testing two insturments, one or both of which will be used next semester to collec the data for submission to the AACSB Read the short Business Week article "Chain Saws Thrive Outside the Big Box". What was the strategic thinking behind Sam Wilson's decisions described in the first two paragraphs? What might you have done differently and why? Explain Stihl's strategy and how it differs from its competitors. Discuss the impact on manufacturers of the Big Box stores' approach. Individual exercise – Critical Thinking Assessment - part 1 The second part of the class is to complete this assessment instrument. Complete this individual assignment – Critical Thinking Assessment - part 2
Assignments due:	Critical Thinking Assessment - part 1 Critical Thinking Assessment - part 2
Nov 15^th, 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 22^nd, 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 29^th, 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 6^th, 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)