MSC IEM STRATEGIC MANAGEMENT

Course Outline

COURSE LEADER
Name: Yuri Mishina
E-mail: y.mishina@imperial.ac.uk
Office hours: By appointment

COURSE AIMS
The central question of strategic management is how to enhance the performance of the firm.
We will explore this question in Strategic Management by examining the variety of issues that
confront managers as they strive to enhance the performance of their firms. Some issues
include: defining what the firm “does,” whom the relevant competitors are, how the firm can
try to gain an “edge” over its competitors, and whether and how the firm can try to retain that
“edge” over time.

The goal of this course is to provide you with the tools and concepts necessary to analyse and
understand how to formulate and implement the appropriate policies and strategies for a firm.
In order to do so, you will be taking a general management, as opposed to a functional (e.g.,
accounting, finance, marketing), perspective in this course and thus will need to think of how
each action, decision or event will affect the firm as a whole. By the end of this course, you
should be able to actively and critically use course concepts to diagnose, manage, design,
change and generally make sense of the various firms in which you will participate through
the course of your lives.

A different area of strategic management will be explored during each class, and we will
examine how it can be used to anticipate, understand and resolve different problems that arise
for managers. Class discussions, exercises and readings from the textbook and business
press will be used to link strategic management concepts with real world issues and problems.
Because actively applying these concepts is such a central part of the course, the conceptual
topics covered may also be applied to cases that are assigned subsequently. Case analysis
and discussion are integral parts of the course. The cases are designed to test and sharpen
the ability of students’ to identify course concepts in actual business settings and apply these
concepts in decision-making.

COURSE OBJECTIVES
Knowledge Objectives
• Understand the central concepts in strategic management
• Understand which frameworks and tools to utilise for internal and external analyses
• Understand the relationship between the different strategic management concepts

Skill Objectives
• Ability to apply concepts and frameworks to business cases and real-life firms
• Ability to conduct an industry analysis
• Ability to analyse a firm’s resources and capabilities
• Ability to determine what business strategy might be appropriate for the firm, given its
internal and external context
• Enhanced skills in written and verbal communication, teamwork, analytical thinking,
decision-making, project planning and general management

LEARNING OUTCOMES
By the end of this course, you should be able to actively and critically use course concepts to
diagnose, manage, design, change and generally make sense of various types of firms and
firm situations.
TEACHING METHODS AND STRUCTURE
This is not a traditional lecture-based course. Although I will frequently have short lectures to
clarify and extend ideas from the readings, the majority of class time will generally be spent
discussing both the readings and the cases. I expect that you will have read the assigned
course material, analysed the assigned case, and be thoroughly prepared to discuss both for
each class period. In essence, the readings provide the basic ideas, and we will use the class
period to clarify and extend the ideas, as well as apply them in discussing the case.
Consequently, it will be difficult for you to follow along with the material or participate in any
meaningful way if you have not done the reading assignments beforehand.

You are expected to be an active participant in the class discussions. Participation in class
discussion is not only an opportunity for you to apply course concepts to demonstrate your
knowledge and analytical skills, but also gives me a chance to assess how well you and your
classmates understand a particular concept and whether or not I need to cover it in more
detail. If all class members are well-prepared for and actively participate in each class
discussion, we will all learn more from each other and the course will be more enjoyable as
well. In addition to class discussions, you will be expected to participate in any in-class
exercises that we have during the course.

ASSESSMENT
The course evaluation is as follows:

Final exam 50%

Group project 40%
Participation 10%

READINGS
You are required to prepare the following readings:

1. Textbook (selected chapters): “Contemporary Strategy Analysis” (10th edition,

Blackwell Publishing) by Robert Grant. Please, see the “Course Schedule” section for
the indication of what chapters are required.
2. Additional articles and readings
3. Videos
4. Cases
5. Lecture slides
ASSESSMENT DETAILS

Final Exam

The final exam will be closed-book and will consist of two to three questions that will assess
your ability to apply course concepts and frameworks to analyse real world issues and
problems. You will see examples of sample questions throughout each class session.

Participation

Participation will consist of three components—in-class participation, online discussions, and

peer feeedback

In-class participation:
• Participation in class discussion is not only an opportunity for you to apply course
concepts to demonstrate your knowledge and analytical skills, but also gives me a
chance to assess how well you and your classmates understand a particular concept
and whether or not I need to cover it in more detail. Your class participation grade will be
determined by your attendance, preparation for each class, and the extent to which you
meaningfully contribute to class discussion. Merely being present in class does not
constitute class participation.
• I expect that you will have read and be thoroughly prepared to discuss the course
material assigned for each class period. In essence, the readings provide the basic
ideas, and we will use the class period to clarify and extend the ideas. Consequently, it
will be difficult for you to follow along with the material if you have not done the reading
assignments beforehand.
• At various points during each class, I will pose questions to the class. If people do not
volunteer to answer the question, I will randomly call on students. If I call on you and you
are not prepared, that may result in reduced points. In addition to class discussions, we
will have some in-class exercises during the term. You will be expected to participate in
these activities, and not participating (or missing those classes) may result in a reduction
of your participation points. I will keep close track of your attendance and participation
throughout the semester.
• Participation is judged not only by its quantity but also by its quality. In general, short,
insightful contributions are usually better than rambling comments, and comments that
are irrelevant, distracting, and/or disruptive may be awarded negative points. There is
no makeup of participation points since participation is based on contributing to
class discussions
• Below is a table explaining what constitutes high quality participation:
Goes beyond merely what concepts would
suggest by identifying hidden assumptions
Outstanding
and/or integrates and builds on the points
others have made

Uses appropriate course concepts and/or

Good offers constructive criticism on the points
others have made

Contributions to in-class discussion largely

Adequate focuses on straightforward facts and
information from the case
 Merely present and not actively contributing
Inadequate to in-class discussion beyond asking simple
questions

Online discussions:
• The Insendi platform has a place for people to start and respond to discussion questions.
This could be anything that relates to or extends the course content, including relating it
to real world events, bringing in other concepts that might extend some of the tools and
frameworks, and the like.
• Posts to these discussion forums will be assessed in exactly the same way as the in-
class participation.

In-class participation:
• Providing appropriate and developmental feedback is an important and useful skill.
Additionally, as I’ve mentioned in class, it’s in your best interest to ensure that you help
your classmates to develop their skills to their fullest capacity since people are likely to
generalize from the other Imperial MSc IEM students and alumni that they meet.
Consequently, you will be responsible for providing feedback to the presentations of two
other syndicate groups in the course. Each person will be randomly assigned two
syndicate groups that are not their own that they will have to provide detailed feedback
for. Although the groups receiving the feedback will not know which of their classmates
provided them with the feedback, I am using this as part of your participation grade, so I
will assess the quality of the feedback that you provided. Below are more specific
instructions.
1. Please provide roughly a paragraph in feedback for each group whose presentation
you evaluate. You are not providing any marks, but instead are providing feedback
that the group is likely to find useful.
2. Feedback should be developmental, and hence the goal is for them to be able to use
this feedback to become even better at presenting than they were before. Hence
don’t just focus on the positives, and make sure to provide explanations and
suggestions that they can use to improve. As such, don’t just say whether something
was “good,” but what made it good. Also, don’t say that something was “bad.”
Instead, if some aspect was not as good as it could be, state that the aspect could be
improved, and provide specific things that they can do to improve them.
3. Consider the tone and framing of your comments. Even if the essence of the
comment is identical, a comment framed using language that is more positive (i.e.,
focused on what can be improved) is likely to be taken more seriously than a
comment that focuses on the negatives (i.e., what was wrong).
4. Focus on these five elements and provide a sentence or two (minimum) about each
aspect.
a. Whether or not the presentation flowed smoothly and was put together in a
thoughtful and professional manner.
b. Whether or not the group was knowledgeable about the company and
appeared to be well prepared to answer questions.
c. The use of appropriate concepts and analyses.
d. The appropriateness of recommendations based on the evidence and
analyses.
e. Overall quality of the presentation
• You will thus need to watch every presentation that the other groups upload, as well as
how well they answer questions during the Q&A session. You will then use that
information to provide detailed feedback to the two teams that you have been individually
assigned to provide feedback to.
• The peer feedback will be due at 5:00 p.m. on 29 November. This will also be the
deadline for all online participation as well.
Group Project

The purpose of the group project is to learn to work with others in a team environment in
order to apply what you have learned in this course to a real firm. You and your group will
select a company and analyse one particular line of its business. In doing so, you will be
analysing both that firm, as well as its industry, and be providing recommendations for the
firm’s management based on your analyses. You can think of this project as your chance to
act as a consultant to the company or as an analyst trying to make sense of the firm and its
prospects. In doing so, you will also gain valuable skills and experience that should be useful
to you both during the Msc Innovation, Entrepreneurship and Management programme and
also in your post-Msc I, E & M careers.

In particular, the group project will require you to both gather information and carry out
appropriate analyses of the type that you will be required to do in the Summer Term during
your Business Applications components (e.g., Business Plan Competition, Consulting
Project). Additionally, the experiences and skills required to work effectively in a group have
broad applicability throughout your working career, and the tools and frameworks that you
will be using in this project can also be used to analyse other organisations once you leave
Imperial, including potential employers, competitors, suppliers, and potential investment
opportunities, for example.

Your first task is to determine what company you will analyse. You should let me know by e-
mail what company your group has chosen. Company selection is on a first-come, first-
served, and thus your chance of being able to analyse the company of your first choice is
greater the earlier you select a company.

In selecting a company, you should choose one that is (a) different from any company
chosen by the other groups, (b) is not the primary focus of any of the cases that we will
discuss in the class, (c) and for which a lot of information about their product lines, financial
performance, and their industry is readily available to you. In most cases, this would imply a
large, fairly prominent, publicly traded firm. I would also suggest selecting a firm that you and
your group members find particularly interesting, since this project will require you to gather
and analyse a lot of information about the firm.

The outputs of your group project include (a) a 6 minute oral presentation of your project and
(b) a written analysis of your project. Details of each are described below.

Oral presentation (25% of group project assessment)

• You must design a 6-minute Pecha Kucha-style presentation (with overheads) of
your company covering all relevant details. Your classmates and I will have an
additional 5 minutes to ask you any questions about your presentation. Since you will
only have 6 minutes, carefully choose only the most important information for your
presentation. Do not feel like you have to strictly follow an internal or external
analysis for your presentation—present the main issues and whatever you think is
directly relevant using class concepts. Be creative and try to engage your audience.
- For example, if the main issue facing your company is whether or not to
expand globally, you might want to discuss the various entry strategies that
they could use, various issues that the companies might face regarding
international expansion, and so on.
- You can have 12 slides, and each slide will automatically advance after 30
seconds (I will provide a template)
• Each person in the group must either present and/or answer questions. Think of this
as a presentation to your client. I expect you to be in business attire for your
presentation.
• Your presentation will be judged using the following criteria:
 - Whether or not the presentation flowed smoothly and was put together in a
thoughtful and professional manner.
- Whether or not the group was knowledgeable about the company and
appeared to be well prepared to answer questions.
- The use of appropriate concepts and analyses.
- The appropriateness of recommendations based on the evidence and
analyses.
- Overall quality of the presentation.

Written analysis (75% of group project assessment)

• The written analysis should include the following items, plus whatever else is needed
to address the main issue at hand for the company. For each item, make sure that
you provide appropriate justifications based on using the appropriate course
concepts and frameworks.
- How is the firm performing? Are all performance indicators suggesting the
same thing?
- What are the main issues (i.e., what problems and concerns does the
company have)?
- What industry is the firm in? What are the boundaries of this industry? Is the
firm in an attractive industry? Why or why not?
§ Examine each of the five forces (i.e., threat of new entrants, power of
suppliers, power of buyers, threat of substitute products, and degree
of rivalry)
§ Who are the buyers and suppliers for this industry? What are the
substitutes?
- What information do you have about the firm’s competitors? Are there
different strategic groups in this industry? Along what dimensions?
- Does the company have any sources of competitive advantage? Is it (are
they) sustainable? Why or why not?
- What is the company’s business-level strategy? What makes you think so? Is
it appropriate for this company?
- What are your recommendations for how this firm can address its
problems/concerns? Why?
• Make sure you provide appropriate references for all of your arguments and
assertions. The body of the written analysis should be no more than 3000 words in
length. Any additional material should be in the appendix, but remember that the
appendix will be treated as supplementary material, so the basic argument and
justifications will need to be in the body of the text, even if the more detailed analysis
is in the appendix. Think of this as a written report to your client. Therefore, the
written analysis should be in report form, and your writing style and use of language
should be professional. Make sure that you actually provide a roadmap to your
analysis and include appropriate transitions to direct your readers.

Other important information about the group project:

• You should select a firm to analyse no later than the end of the second class session.
• I expect members of each group to meet regularly with one another to work on this
project weekly over the course of this term. The best policy is to make sure each
team member knows what his or her responsibilities are upfront so that there is no
misunderstanding later.
• I expect all of you to be present at each group presentation and show common
courtesy
• Both the presentation and written analysis should be uploaded to the Insendi by 9:00
a.m. 19 November.

GENERAL TEMPLATE FOR THE WRITTEN ANALYSIS:

 1. Executive summary
a. How is the firm performing? Are all performance indicators suggesting the
same thing?
b. What are the main issues (i.e., what problems and concerns does the
company have)?
i. These may be specific to the company (e.g., from annual reports,
business press articles about the firm, and/or analyst reports about the
firm) or more broadly issues for the industry (i.e., trends in the general
environment).
c. Roadmap for the rest of the analysis
2. Industry analysis
a. What industry is the firm in? What are the boundaries of this industry? Is the
firm in an attractive industry? Why or why not?
i. What is the level of the threat of new entrants?
ii. Who are the buyers for this industry? What is the level of buyer
power?
iii. Who are the suppliers for this industry? What is the level of supplier
power?
iv. What are the substitutes to this industry? What is the level of the
threat of substitutes?
v. Who are the firm’s competitors? What is the degree of rivalry
b. Competitors and strategic groups
i. What information do you have about the firm’s competitors? Are there
different strategic groups in this industry? If so, along what
dimensions?
3. Competitive advantage
a. Does the company have any sources of competitive advantage (or
disadvantage)? Is it (are they) sustainable? Why or why not?
4. Business-level strategy
a. What is the company’s business-level strategy? What makes you think so? Is
it appropriate for this company? Why or why not?
5. Recommendations
a. Based on your analyses above, what are your recommendations for how this
firm can address its problems/concerns? Why? Make sure you provide
appropriate details and justifications based on course concepts.
6. References
7. Figures and charts

CITATING INFORMATION SOURCES

You should provide citations for any information in your report that is not “common
knowledge.” In-text citations should be of the form (Author’s last name, Year of publication) if
it is not a direct quote. If, however, you are quoting a source directly, you should also provide
a page number so that the citation would be of the form (Author’s last name, Year of
publication: Page number). If you are specifically mentioning the author’s name in the text,
you can just include the additional information (e.g., year of publication) within the
parentheses. Below are examples of each:

Not a direct quote:

For example, Google Inc.’s stock price dropped by 12.4 percent after announcing its
results for the fourth quarter of 2005, despite strong performance, because it was
below the market's expectations (Liedtke, 2006). Similarly, Amazon.com shares
dropped 16 percent on the day after it reported its earnings for the third quarter of
 2007, despite beating earnings estimates, because the market expected even
greater performance (Martin, 2007).

Direct quote:

In doing this, we follow Stiglitz’s (2000: 1471) suggestion to draw upon research in
psychology to determine how “individuals process information, form expectations,
and select among possible signals.”

If there are multiple authors for a single work, you can cite them in the following manner:

A key theoretical perspective that has emerged from research on cognitive biases is
prospect theory (Kahneman & Tversky, 1979). This perspective states that the
manner in which individuals frame choices affects how the choice is evaluated, and
that the framing can be influenced by whether or not actors perceive themselves to
be in a gain or loss position.

However, if there are three or more authors for a particular source, you can cite them as
(Lead Authors last name et al., Year of publication). All authors should be listed in the
references, of course.

This overlooks the possibility that holding too many resources may be inefficient
(e.g., Penrose, 1959), and that entrepreneurial success may be derived from “the
pursuit of opportunity without regard to resources currently controlled” (Stevenson et
al., 1994: 5) and making “the sparest allotment of resources” (Stevenson & Gumpert,
1985: 88) work to one's advantage.

To cite multiple sources to make a single point, separate the sources with a semicolon:

Prospect theory suggests that individuals evaluate choices by gauging whether the
choice represents a potential gain, a sure gain, a potential loss, or a sure loss, and
that they will behave in a risk-averse manner to protect sure gains and in a risk-
seeking manner to avoid sure losses (e.g., Kahneman & Tversky, 1979; Tversky &
Kahneman, 1981).

REFERENCES

For every work you cite within the body of the text, you should include the appropriate
citation in the references section in the back of your paper. References should be in the
following form:

Author’s last name, Author’s first and middle initials. Year of publication. Title of
article. Title of publication. Volume number (Issue number if available): Page
numbers of article.

Kahneman, D., & Tversky, A. 1979. Prospect theory: An analysis of decision under
risk. Econometrica. 47(2): 263-292.
Stevenson, H.H., & Gumpert, D.E. 1985. The heart of entrepreneurship. Harvard
Business Review. 63: 85-94.
Stiglitz, J,E. 2000. The contributions of the economics of information to twentieth
century economics. The Quarterly Journal of Economics. 115(4): 1441-1478.
Tversky, A., & Kahneman, D. 1981. The framing of decisions and the psychology of
choice. Science. 211(4481): 453-458.
If it is an online source, you should also include the URL and the date on which you
accessed the source.

Liedtke, M. 2006. Google earnings disappoint; Shares plunge. Associated Press.

Tuesday, January 31.
http://biz.yahoo.com/ap/060131/earns_google.html?.v=13 Accessed March
16, 2006.
Martin, S. 2007. Amazon delivers; Shares don’t. Red Herring. October 24, 2007.
http://www.redherring.com/Home/23031 Accessed October 25, 2007.

For a book, you would cite it as follows:

Author’s last name, Author’s first and middle initials. Year of publication. Title of
publication. Location where it was published: Publisher.

Penrose E. 1959. The Theory of the Growth of the Firm. Oxford: Oxford University
Press.
Stevenson, H.H., Roberts, M.J., & Grousbeck, H.I. 1994. New Business Ventures
and the Entrepreneur 4th Edition. Burr Ridge, IL: Irwin.
TENTATIVE COURSE SCHEDULE

BLOCK 1: Introduction to strategic management

Session 1: Course introduction, administrative details, and what is strategy?

Learning By the end of this session, you should be able to:

outcomes: • Define what is meant by a strategy
• Identify the elements required for a successful strategy
• Articulate the different emphases of an I/O economics versus an RBV
perspective on strategy
• Identify the assumptions inherent in an I/O economics perspective of
strategy
• Identify the assumptions inherent in an RBV perspective on strategy

Readings: Grant, chapter 1

In-class Alaskan Goldmine

exercise:
BLOCK 2: External analysis
Session 2: Threat of new entrants, power of buyers, and power of suppliers

Learning By the end of this session, you should be able to:

outcomes: • Analyse the threat of new entrants in real world situations
• Analyse the power of buyers in real world situations
• Analyse the power of suppliers in real world situations

Readings: Grant, chapter 3

Further Porter, The five competitive forces that shape strategy

Readings on
the topic

Case: The a2 Milk Company

Case • What is the threat of new entrants for this industry?

discussion
questions: • Who are the buyers for this industry, and what is the power of buyers
in this industry?

• Who are the suppliers in this industry? What is the power of suppliers
for this industry?

•
Session 3: Threat of substitutes, the degree of rivalry, and the general environment

Learning By the end of this session, you should be able to:

outcomes: • Analyse the threat of substitutes in real world situations
• Analyse the degree of rivalry in real world situations
• Determine the overall attractiveness of an industry
• Articulate why it is important to examine the general environment

Readings:
Case: The a2 Milk Company

Case • What are the substitutes for this industry? What is the threat of
discussion substitutes for this industry?
questions:
• What is the degree of rivalry in this industry?

• What is the overall attractiveness for this industry?

• How should a2MC respond to Nestle?

BLOCK 3: Internal analysis

Session 4: Analysing resources and capabilities

Learning By the end of this session, you should be able to:

outcomes: • Articulate exactly how each of the VRIN characteristics relate to
competitive advantages
• Identify which resources and capabilities may be a source of a
sustainable competitive advantage, temporary competitive advantage,
competitive parity, or competitive disadvantage

Readings: Grant, chapter 5

Further Collis and Montgomery, Competing on resources

readings on
the topic

Case: Nanxi Liu: Finding the Keys to Sales Success at Enplug

Case • Does Enplug have any sources of competitive advantage? What

discussion makes you think so?
questions:
• Does Enplug have any sources of competitive disadvantage?

• What should Enplug do in regards to pricing, sales and customer

support, the reseller program, and investors?
Session 5: Developing and sustaining advantages

Learning By the end of this session, you should be able to:

outcomes: • Identify potential sources of core rigidities
• Determine whether or not slack resources are likely to be beneficial or
be a hindrance in a particular situation
• Determine which type of slack resources are likely to be useful, in
particular instances
• Determine how environmental changes and firm actions can influence
competitive advantages

Readings: Grant, chapter 8

CNNMoney: Smiling refrigerators, high-speed toilets and the sad story of
Japan’s wasted talent
FORTUNE: Luxury goes mass market

Case: Yoyo Wallet: Entering the Mobile Payment Space in the United States

Case • Does Yoyo have any sources of competitive advantage?

discussion
questions: • What can Yoyo do to deal with the changes in the industry?

BLOCK 4: Business strategies

Session 6: Business strategies

Learning By the end of this session, you should be able to:

outcomes: • Articulate the pros and cons of each of Porter’s generic strategies
• Identify the business strategy being used by a firm in a real world
situation
• Determine whether or not the business strategy is feasible in the
firm’s industry
• Determine whether or not the business strategy is consistent with the
firm’s resources and capabilities

Readings: Grant, chapter 7

Case: Shang Xia: Selling High-Quality Goods "Proudly Made in China"

Case • Does Shang Xia have any sources of competitive advantage? What
discussion makes you think so?
questions:
• What is the business strategy of Shang Xia? Is it appropriate? Why or
why not?
 BLOCK 5: Special topics, guest speakers, and presentations
Session 7: Entering established versus new markets

Learning By the end of this session, you should be able to:

outcomes: • Articulate the difference between red and blue ocean strategies
• Identify ways in which to find blue oceans
• Identify potential disadvantages to a blue ocean strategy
• Apply these concepts to a real life situation

Readings: Kim & Mauborgne, Blue ocean strategy

Kim & Mauborgne, Creating new market space
Case: Avoiding the Competition for Decades: The Case of Comic Relief

Case • How is Comic Relief different from other charities?

discussion
questions: • Can Comic Relief continue to be successful? Would they need to do
anything differently if they wish to do so?

Session 8: Guest speakers

Objectives: Hear about the experiences of real entrepreneurs and be able to ask
them questions.

Session 9-11: Class presentations and Q&A (session 11 only if necessary)

Presentations and written analyses should be uploaded onto the

Insendi by 9:00 a.m. 19 November

Objectives: • Display what you have learned in the course

Note: This schedule is tentative. In some instances, certain topics, articles, and/or
cases may be carried over into a subsequent class if there is not enough time to
discuss them during the initially scheduled session.