Indian Institute of Management, Udaipur

Post-Graduate Programme in Management

Academic Year 2020-21

Course Outline for Strategic Management

Version dated December 22, 2020

Credits : 4 Term : III

Instructors : Prof. Dhirendra Mani Shukla

Prof. Prarthan Desai
Prof. Shaleen Gopal

Course Overview

This is the introductory course in strategic management. The course aims to help students
understand how strategy formulation and implementation enables firms to register and sustain
superior performance.

The course is divided into three modules. The first two modules of the course focus on Strategy
Development – how firms formulate effective strategies at the business and corporate level,
bringing in conceptual understanding of competitive and corporate strategies as well as analytical
techniques to support analysis and strategy formulation.

Business strategy deals with a particular line of business – either a single-business firm or a line
of business within a multi-business firm, and focuses on competitive forces in the industry,
business models, strategic positioning within the industry, as well as resources and capabilities
needed to compete effectively.

Corporate strategy typically deals with the management of scope of the firm – horizontal scope
(growth through diversification of products / services), vertical scope (forward integration,
backward integration), and geographic scope (domestic markets, multiple markets, global
markets). The vehicles for corporate growth in one or more of the three dimensions of scope can
be organic – through expansion of the scope of current businesses or entry into new businesses,
or inorganic – through mergers, acquisitions, alliances and so on. Thus, corporate strategy
focuses on the appropriate scope of the firm, how the corporate adds value to the various lines of
business and the appropriate strategies to compete successfully in multiple geographies.

The last module of the course focuses on Strategy Formulation and Implementation Process –
how firms go about managing the development and execution of strategy, how the key elements
involved in strategy execution (implementation) process influence the outcome, and how strategic
change unfolds. In this module we will explore strategy execution in depth, the various
dimensions of execution and how they are interlinked. We will also explore the symbiotic
relationship between strategy development and execution. Participants will learn that the process
of developing and implementing strategy is iterative and not necessarily sequential.

The viewpoint will be from the perspective of the CEO, who has responsibility for the long-term
sustenance and growth of the firm.

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Learning Objectives

Strategic analysis assumes that most resource and product markets are imperfect, providing firms
with the opportunity to generate above-normal profits. Opportunities emerge as industry
conditions change or are changed by innovating firms. Firms create competitive advantage by
understanding and responding to these opportunities through their strategies – effective strategies
implemented successfully lead to superior performance. Successful firms, be it a single business
or a corporate, are faced with the challenge of being able to sustain their performance against
competitive rivalry and changes in the environment. The first two modules explore these themes
in various ways, and seek to develop understanding of various conceptual frameworks and
analytical techniques that will help the participants to:

– Assess the structure of an industry and its influence on potential for profitability of firms in the
industry
– Assess a firm’s resources and organizational capabilities for their ability to generate
competitive advantage
– Develop a business strategy based on understanding of the industry / market, the resources /
capabilities of the firm and its competitive advantage
– Evaluate a firm’s diversification / conglomerate strategy
– Evaluate the need for vertical integration and how to succeed in it
– Evaluate a firm’s global strategy

Strategy execution is an art, and many CEOs and managers have made their name and fame in the
brilliance they showed in managing the implementation process in their enterprises. A great
strategy poorly implemented is a failed strategy. In comparison, a good strategy implemented
well, and adapted for the changing realities that unfold over time can lead to superior
performance outcomes. The last module of this course aims to anchor this understanding and
underlying concepts strongly in the participants’ thinking. More specifically, at the end of the
course, participants will be able to:

– Appreciate the process of strategic management

– Understand the key elements of successful implementation of strategy, such as aligned
structure, communication / information sharing, performance management, organizational culture
and leadership
– Appreciate the holistic nature of the strategic change process, and understand how the various
key elements link up to create successful execution

Pedagogy

Learning will primarily be facilitated through discussion of cases, as the concepts and techniques
in strategic management are best understood through practice. Participants have the responsibility
to prepare for the case prior to the session, and actively participate in the case discussion.

Preparing for the Case Discussion

For the participants to derive the best learning experience from the sessions, prior preparation for
case discussions is essential and necessary. For each session, readings and cases have been
assigned. Prior to participating in the sessions, the students must go through the relevant readings
and the case and analyze the case with specific reference to the discussion questions. In analyzing
the case, the concepts in the relevant readings must be applied. As we progress through the
course, it would be useful to integrate the learning from prior sessions into the preparation. Some
of the discussion questions would require numerical estimates based on data provided in the case.
As part of the preparation, participants must carry out relevant numerical analysis and bring their

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results to the class. The numerical analysis by itself does not become the answer to discussion
questions but will help the student in more thoroughly anchoring their responses with the realities
of the case facts.

There is no right or wrong answer to any business situation or issue, as managers often work with
insufficient data and time. While it is often possible to judge the correctness of a decision with
hindsight, that is not the primary learning objective. Rather the objective is to inculcate in the
students the ability to analyze situations and arrive at conclusions that are most appropriate, given
the available information; the appropriateness being judged based on consistency of the line of
thought that leads to the conclusion. The students, in preparing for the case discussion, shall focus
their analysis on:

– Understanding the business situation / problem in as detailed and nuanced a manner as is

possible
– Applying the conceptual frameworks and techniques to address the situation / problem
– Coming up with explanations and conclusions that are internally consistent and logical, that
directly address the situation / problem

Participating in Case Discussions

Discussions on the cases assigned for each of the sessions is expected to provide the participants
with the understanding and application of relevant conceptual frameworks and analytical
techniques. Active participation by the participants is essential for the case discussion to deliver
value in the classroom.

Effective class participation requires the students to:

– Prepare well for the class (summarized points of view, based on case analysis and readings)
– Participate meaningfully in the class discussion (clear and concise articulation of one’s point of
view, without repeating / paraphrasing what someone else has said already)
– Understand differing points of view
– Synthesize learning from the discussion

Class participation gives participants the opportunity to practice and develop their ability to add
value to a discussion. So, prepare well and do not hesitate to participate in the class discussion.

Evaluation

The evaluation shall comprise of four components:

Class Participation 10%
Group Assignments 05%
Group Project 20%
Mid-term Examination 30%
End-term Examination 35%

Please note the following regarding class participation, group assignments, and group project:

Class Participation

 Prior preparation is a commitment made by each participant to herself/himself

and to the class. It is expected that participants will have read the specified material
prior to each session. The material presented in the assigned textbook / readings will not

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 be covered through instructor’s lectures in the class. It is expected that all participants
will read the specified chapter(s) of the textbook as well as assigned articles BEFORE the
session, prior to embarking on case preparation.

 Regularity in attending the sessions, preparing for the sessions before the class and active
participation in the learning experience are vital. Anyone in the class may be called
upon to contribute insights during the case discussion. If there is a dire and pressing
need to absent from a session, prior written permission (via email) is essential.

Group Assignments

 PGP Office will form groups of five students each for the group assignments.

 The groups will submit analyses of two cases - one before midterm and one after
midterm.

 The cases to be analyzed will be announced in the class and due in the class

Group Project

 Each group is expected to select one industry and a firm, listed on a stock exchange in
India, in that industry. The group will collect relevant information on that industry and the
firm and analyze the collected information using tools/concepts covered in the course.
You are required to submit the choice of your industry and firm before the fourth session
of the course. An interim report will become due before the thirteenth session. The due
date for submission of the final report will be announced later.

 All groups will submit a power point presentation of their project findings before twenty
second (22nd) session. A few groups will be randomly selected by draw of lots to make
class presentations of 10 minutes each in the last two sessions.

 Copying verbatim from web resources or other group’s submissions will be considered
plagiarism and severely penalized. You are expected to clearly cite your data sources
using footnotes or endnotes. Verbatim quotes of a sentence or more should be italicized
and put in double quotation marks.

Course Materials

– Session readings and cases available in the course pack

– Textbook for the course: Dess GG, McNamara G, & Eisner AB Strategic Management: Text
and Cases. McGraw Hill. Eighth Edition

Schedule of Topics

Module 1: Introduction

Session 1: Introduction to Strategic Management (1)

Similarities and differences between management and science

Readings:
– Martin, R.L. and Golsby-Smith, T. Management is Much More than a Science. Harvard
Business Review. September-October 2017

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– Drucker, P.F. The Theory of the Business. Harvard Business Review. September-October
1994
– Christensen, C.M. Managing the Strategy Development Process: Deliberate vs. Emergent
Strategy. HBS Note: 9-420-084. December 11, 2019

Case:
– Honda (A) (HBS Case 9-384-049)
– Honda (B) (HBS Case 9-384-050) – To be distributed in the class

Discussion questions: How do you rate Honda’s new product development process? Was
Honda’s entry into the US a good decision? Were US an attractive market for motorcycles?
Did Honda have the competence to match the technological prowess of its US counterparts?
Could Honda have done anything differently?

Session 2: Introduction to Strategic Management (2)

Strategy as sustainable competitive advantage

Readings:
– Porter, M. E. What is strategy? Harvard Business Review, 74(1), November-December 1996
– Collis D.J. and Rukstad M.G. Can you say what your strategy is? Harvard Business Review,
April 2008
– Collins, J.C. & Porras, J.I. Building Your Company’s Vision, Harvard Business Review,
September-October 1996

Case:
– Narayana Hrudayalaya Heart Hospital – Cardiac Care for the Poor (HBS Case 9-505-708)

Discussion questions: Is Narayana Hrudayalaya successful? Why? If successful, what were

the elements that made it successful? If not successful, what else should NH be doing?

Module 1: Competitive Strategy

Sessions 3 & 4: Industry Attractiveness & Firm Performance (1)

Explore how the structural features of an industry influence the potential for profitability for
firms in the industry.

Readings:
– Porter, M. E. (2007) Understanding Industry Structure, HBS Note (9-707-493)

Case:
– Indian airline industry

Sessions 5 & 6: Industry Attractiveness & Firm Performance (2)

Examine how industry economics shape the structural features of an industry and how firms
influence the industry structure to their advantage.

Case:
– Cola Wars Continue: Coke and Pepsi in 2006 (HBS Case No. 9-706-447)

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 Discussion questions: Why has the soft drinks industry been so profitable historically? How
has competition between Coke and Pepsi affected the industry’s profit? Why is profitability
so different for concentrate and bottling business?

Sessions 7 & 8: Understanding Competitive Advantage (1)

Explore how to identify and explain competitive advantage, and how competitive advantage leads
to superior performance. Specifically, examine how and when cost advantages are a source of
competitive advantage to firms.

Readings:
– Grant, R.M. Cost Advantages and Differentiation: Pg. 223-259
– Ghemawat P. & Rivkin J.W. Competitive Advantage, Core Reading (HBR#8105), Jan 2014

Case:
– Matching Dell (HBS Case No. 9-799-158)

Discussion questions: Why is the profitability of the personal computer industry so low?
What accounts for Dell’s success in the personal computer industry? Estimate Dell’s
competitive advantage over rivals? How should rivals respond to challenge posed by Dell?

Sessions 9 & 10: Understanding Competitive Advantage (2)

Examine differentiation as a source of superior firm performance.

Readings:
– Heracleous, L. & Wirtz, J. Singapore Airlines’ Balancing Act. Harvard Business Review,
July-August 2010

Case:
– Tata Consultancy Services: Selling Certainty (HBS Case No. PG0-007)

Discussion questions: Critically examine the ‘experience certainty’ strategy proposed at

TCS. What are the implications of this strategy for customer selection, contract pricing,
human resources, global delivery footprint, and R&D?

Session 11: Creating & Sustaining Competitive Advantage (1)

Understand how competitive advantage can be created. Explore the relevance of value chain
analysis in identifying sources of competitive advantage and the importance of business models
in creating competitive advantage.

Readings:
– Johnson, M.W., Christensen, C.M. & Kagermann, H. Reinventing Your Business Model.
Harvard Business Review, December 2008
– Note on the Value Chain: A Framework for Analyzing Firm Activities. WDI Publishing.
W90C02 (Dated: January 15, 2010)

Case:
– Health City Cayman Islands (HBS Case No. 9-714-510)

Discussion questions: Is NH business model in India appropriate for Cayman Islands? What
are the adaptations needed to the NH business model? Why are these adaptations needed?

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Session 12: Creating & Sustaining Competitive Advantage (2)
Resources as origins of sustainable competitive advantage

Readings:
– Collis, D. J. & Montgomery, C. A. Competing on Resources. Harvard Business Review. Jul-
Aug 2008

Module 2: Corporate Strategy

Sessions 13 & 14: Diversification

Reasons for product market diversification and differences between related diversification and
unrelated diversification.

Readings:
– Markides C.C. To Diversify or Not to Diversify. Harvard Business Review, 1997
– Capron L. and Mitchell W. Finding the Right Path., Harvard Business Review, 2010

Case:
– Newell Company: Corporate Strategy (HBS Case 9-799-139)

Discussion questions: Is Newell successful? What are Newell’s distinctive resources? What
are the challenges Newell faced in 1990s? What is Newell’s acquisition strategy? Does
Calphalon acquisition make sense?

Sessions 15 & 16: Vertical Integration

Understand outsourcing decisions of firms. Examine factors that prompt firms to manufacture an
input in house rather than purchase from other firms.

Readings:
– Stuckey, J. & White, D. When and When Not to Vertically Integrate. Sloan Management
Review, 34(3), p.71-83. 1993

Case:
– The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire? (HBS Case 9-709-
462)

Discussion questions: Should Disney acquire Pixar? What are the organizational challenges
that Disney would face in managing the combined entity? Should Disney and Pixar
renegotiate contract? What is the distribution fee that Disney should charge Pixar? Who
should hold ownership rights to movie titles: Disney or Pixar?

Session 17: Internationalization

Examine what encourages firms to expand operations to different countries and the challenges in
operating globally (in multiple countries).

Readings:
– Ghemawat, P. Managing Differences: The Central Challenge of Global Strategy, Harvard
Business Review, Mar 2007
– Tallman S. & Fladmoe-Lindquist. Internationalization, Globalization, and Capability-Based
Strategy, California Management Review, 2002

Case:
– Philips Vs Matsushita: The Competitive Battle Continues (HBS Case 9-910-410)

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 Discussion questions: How did Philips become the leading consumer electronics company
in the world in the postwar era? What distinctive competence did they build? What
distinctive incompetencies? How did Matsushita succeed in displacing Philips as No. 1?
What were its distinctive competencies and incompetencies?

Sessions 18 & 19: Alliances and Networks

Alliances between firms have dotted corporate landscape in recent years. We explore the reasons
why firms form alliances.

Readings:
– Gompers, P.A. A note on strategic alliances (HBS Note 9-298-047)

Case:
– Corning Inc: A network of alliances (HBS Case 9-391-102)

Discussion questions: What are the criteria for evaluating the three proposals before the
management committee? Do the proposals meet these criteria? What are your specific
recommendations regarding the three proposals?

Module 3: Strategy Formulation and Implementation

Session 20: Strategy and Structure (1)

Implementing the strategy requires that there is internal fit between the strategy and the
organization's configuration. We will explore structure – one of the key elements of the
organization's configuration, and its importance in facilitating strategy execution.

Readings:
– Nohria, N. Note on Organization Structure. HBS Background Note. 9-491-083, 1995
– Waterman Jr., R. H., Peters, T. J. & Phillips, J. R. Structure is Not Organization, Business
Horizons, Vol.23(3), pg.14-26, 1980

Case:
– Texas Instruments Incorporated (A) (HBS Case 9-306-065)
– Texas Instruments Incorporated (B) (HBS Case 9-306-065) (To be distributed in the class)

Discussion questions: What were the various businesses of Metals and Controls
Organization? How were these businesses organized? Was this organization appropriate?
Why? What problems was Metals and Controls Organization facing? Who would you hold
responsible for these problems?

Session 21: Strategy and Structure (2)

Textbook view of strategy and structure often leads one to believe that changes in structure
follow change in strategy. Managers are often faced with situations where current structure
inhibits change in strategy, making it necessary to change the structure first, to facilitate change
in strategy. We explore the iterative nature of the link between strategy and structure.

Readings:
– Gavetti, G. Strategy Formulation and Inertia. HBS Note 9-705-468. 2005

Case:
– Time Life Inc. (A) (HBS Case 9-395-012)

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– Time Life Inc. (B) (HBS Case 9-395-013) – To be distributed in the class

Discussion questions: What challenges did John Fahey face in early 1992? What is your
evaluation of the steps he took? What has been accomplished and what remains to be done as of
January 1993?

Session 22: Wrap-up and Group Project Presentations

Synthesize the course learnings

Readings:
– Buchanan, L. & Connell A.O. A brief history of decision making. Harvard Business
Review. January 2006

Sessions 23 & 24: Group Project Presentations

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