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RSM1301.2012-0108 (PM2014) - STRATEGY - Winter 2012 Will Mitchell Anthony S.

. Fell Professor of New Technology and Commercialization and Visiting Professor of Strategic Management, Rotman School of Business J. Rex Fuqua Professor of International Management and Professor of Business Administration in Strategy, Duke University, The Fuqua School of Business Phone: 1.416.978.3253, Fax: 1.416.978.4629, Office: 553 Email: Homesite: Dates: Tuesdays & Thursdays, February 7 March 7, 2012 Room: TBD Time: 18:30-21:30 Office hours: After class Syllabus date: December 7, 2011

Course Pack Information Some of the material for the course is posted on the course website. However, you will need to purchase some of the materials via Harvard Business Online Please purchase the HBS cases for this course by clicking on: xx If you have technical difficulties please contact HBS at: 1-800-810-8858 or The HBS material is copyrighted, which HBS is making available at an academic rate. Please do not distribute or post.

Overview This course deals with the work and understanding of strategic management. The course adopts the perspective of managers within the corporation, business, division, plant, or other operating unit who must mesh their individual actions and responsibilities with the overall objectives of the firm. During the course, we will focus on the perspectives and skills required to diagnose and find realistic solutions for critical problems in complex business situations. The course deals with issues of both managerial effectiveness and business efficiency we will emphasize "doing the right things" as well as "doing things right", while avoiding falling into the trap of doing the wrong things really well. The course is aimed at all managers, whether you will have general management responsibilities or work within a specialist position. Due to the complexity of business activities and managerial 1

responsibilities, it is critically important that specialists acquire the capability to perceive the company as a whole, to understand its vision, and to work effectively with specialists in other functions within the company or within the companys business partners to move your company towards its goals. You need to know the strategic purposes that you serve as a specialist in order to manage well. The course has several core premises. Strategy often requires quick responses you need to act quickly to seize short-lived opportunities. Strategic decisions commit resources your choices will have a long term impact on your firms actions and performance. Strategic management is integrative you need to draw on multiple people and resources within and across firms. Strategy is often ambiguous but you need to act in the face of the ambiguity. In order to capture the pragmatic, action-oriented nature of strategic management, I teach this course through the case method, supplemented with readings, lectures, and discussions. My objective is for you to develop your personal synthesis and approaches for identifying and solving the key problems that you face as business managers. Preparation and participation Important parts of your learning in this course will take place in the classroom. Attending classes is essential. Because the course is designed to help you develop a personal synthesis and perspective, it is not possible to make up for an absence. I expect you to prepare for class and to participate in class. Preparation Preparation is the most important assignment for the on-site sessions. In addition to the cases, I will provide background readings that will help you prepare for each discussion during our time together. I expect you to be familiar with the core material during each discussion and to have developed a personal point of view concerning the issues that arise in the material. Preparation has two key elements. First, you need to read the materials, consider the issues raised by the case and assignment questions, and carry out appropriate quantitative and qualitative analysis in order to arrive at a thoughtful position concerning the options that face the firms and managers in the case. Second, and just as importantly, you need to develop a personal position on the issues that the case and readings raise. Unless you have thought about and adopted a personal position, it is difficult to learn from others' contributions in the class. Participation For the learning process to be effective, you will need to participate actively during class. Active participation in class discussions helps you sharpen your own insights and those of your classmates. You will learn the content of the course and, as importantly, the process of analysis and implementation that is central to successful strategic management. I expect you to analyze, comment, question, discuss, and build on others' contributions. Participation enables you to learn from your colleagues and to help them learn from you.

Class participation involves being clear about your own position and articulating it, while also being willing to seek alternative perspectives on the situation. The ability to present one's ideas concisely and persuasively, and to respond effectively to the ideas of others, is a key success factor in any management position. I value effective participation. I do not reward those who talk simply for the sake of being heard. Grading I will base your grade on class participation, a learning journal, and a term paper. Class participation (20%). Includes contributions in class and to on-line discussion boards. Learning journals (40%). Due after classes 3, 6, and 9. Term paper (40%): Due at end of term. Learning journal As you reflect on the discussion for each class, I would like you to prepare a summary (maximum 2 pages per class) of the key learnings that you have taken from that material and discussion. The summary should quickly state the key general points of the content and discussion (maximum 1 page) and then describe the implications of those points for your own career and aspirations (maximum 1 page).

Contact I encourage you to talk to me about any aspect of your work during the term. I will be available by phone or email, as well as in my office. I will participate actively in class discussions on the course web-site. In addition, I will schedule regular office hours. Please feel free to contact me outside office hours if necessary I prefer to deal with issues and opportunities as they arise, rather than letting issues fester and opportunities pass.

Course materials The course materials include a set of cases and readings. The discussions in class will focus on the case material, using the readings as background concepts to assist the discussion. Term paper You will undertake a group term paper for the course. You will do the term paper in your assigned teams. The paper will study a strategic topic of your choice. Each paper will be a maximum of 15 pages (1.5 line spacing), plus exhibits and references. An electronic version of the term paper will be due by midnight, Sunday, March 12. By class 3, please send me a one-page prcis of your paper, including team members, topic, major research question, and proposed source of information that you will use the answer the question.

Your paper will address a strategy topic that is important to your team. I will expect you to identify an important question and then to gather and integrate sufficient information to provide a reasonable answer to your question. I expect the paper to be focused, while providing enough detail to support your arguments. Format: The term paper should include the following sections (for simplicity, I refer to firms and businesses, but you are welcome to focus on other entities including government agencies, hospitals, non-profit organizations, and other organizations). Issue statement. Identify the problem or opportunity that your firm faces. State the issue in sufficient detail and with enough precision that it will be possible to undertake strategic actions that address the issue. Place the issue in a broader strategic context for your firm, including your firms existing vision and/or a new vision that you recommend for your firm. Competitive analysis. Outline the industry and market context in which your firm competes or will compete. Focus your analysis on identifying the qualitative and quantitative competitive factors that are relevant for your firm, as opposed to a general broad-brush assessment of an industry. To the extent possible, given available data, undertake financial analysis relevant to the issue. In particular, focus on identifying and summarizing the implications of the factors that are most relevant to the strategic issue that your firm faces. Business capabilities. Identify the key qualitative and quantitative business capabilities that your firm can bring to bear to address your issue and/or must develop in order to do so. Focus your analysis on the capabilities that are relevant to your issue, rather than undertaking a general assessment of the firms skills. To the extent possible, given available data, undertake financial analysis relevant to the issue. Recommended actions. Outline a set of specific actions for the companys management, taking all relevant issues into account. The set of actions should address the quantitative and qualitative issues you identified in your earlier analyses. To the extent possible, evaluate the financial requirements and impact of your recommendations. Implementation plan. Outline a feasible implementation plan for your recommendations. Please review how long and in what order the company should take implement your recommendations; what resources the firm will need to implement the recommendations; which people will be responsible for implementation; what incentives and information the firm will need to put in place to ensure that the people implement the plan and any other relevant issues. Overall. Above all, I value papers that provide thoughtful analysis, rather than simple descriptions and lists of facts. Your paper should provide me with a clear understanding of an opportunity, the major options that are available to seize the opportunity, and a way of accomplishing the solution. I should understand the logic of your argument and understand the assumptions you have made to arrive at your conclusions. You should obtain financial support for your analysis to the extent available given your topic; I recognize that papers that rely on publicly-available information may have less financial data than papers that can access internal information. Hints about good practices and common problems to avoid in your paper Focus - Strive to develop a small set of actions or tactics that will work together in a coherent manner. By contrast, do not throw all possible ideas into your paper. Creativity is good and logical consistency for a viable set of actions is just as important.

Pay attention to assumptions - You will have to make assumptions in any project. For instance, you will likely make assumptions involving: 1) competitive reactions (e.g., if and how competing firms will respond to actions you consider), 2) the outcome of various company actions (e.g., product development efforts), 3) consumer responses (e.g., whether citing market and/or technical studies is enough to convince end users that an opportunity has value). Try to make these assumptions as reasonable as possible, and indicate why you think your assumptions are reasonable. Also, try to think through the possible implications for your recommendations if each assumption is wrong. Above all, make sure that you explicitly identify the assumptions you make. An important part of effective strategy is making sure you know what you dont know. Specify your proposals in a concise and concrete manner - Put recommendations into concrete terms that managers and/or policy makers will understand and be able to act on. For instance, it is much more direct to specify that a product "should run consumer testimonial advertisements in magazines targeted to medium- to high-income people over 50 years old than it would be to simply state that the product "should engage in direct to consumer advertising." Balance analytics and creativity - The most rigorous analytical work does not necessarily lead to a great idea - ideas can be correct without being exciting. In parallel, the most creative ideas do not necessarily hold up to analytical scrutiny - ideas can be exciting without being correct. In the early phase of your work, try to cycle back and forth between brainstorming (for creative ideas) and careful analysis (for correct ideas). This is particularly important when you are trying to identify the concrete offering (e.g., product/service/intervention) that you will evaluate.

Keys to success in the class

Attend class. If you must miss a class, please email me. Be fully prepared for each class because I may call on you at any time to start the discussion or answer a specific question. If there is a rare occasion that you are not prepared, please email me ahead of class so that I do not inadvertently embarrass you in class. Participate effectively by introducing new ideas and building on others' contributions. I do not reward people who talk simply for the sake of being heard. Continue discussion from class in the on-line discussion boards. Some issues will receive only partial discussion in class, given time constraints, so use the on-line discussion to make your point and to consider ideas that others raise.

COURSE TOPICS Background preparation Background videos: I have prepared a primer and three brief videos that provide an introduction to (1) strategic management, (2) industry analysis, and (3) business capabilities. The primer and links to the videos are available via the course web-site. Each of the classes will emphasize the issues that arise in the cases. Focus your attention on these issues, using the background readings and your experience to help you decide on a course of action for the firms managers.


Class 1. Strategic Vision: Czech Republic Skoda Auto This class examines a company that has transformed itself from a mediocre producer that was struggling in its home market to a high quality and profitable firm with extensive international operations. Case: Skoda Auto From No-Class to World-Class in One Decade [IMD-3-0910] Preparation: Consider Skodas position at the time of the case. Please be prepared to discuss the following questions in class, as well as any other issues that strike you during your preparation of the case. How did VW help Skoda Auto improve between 1991 & 2002? What are the current priorities for Skoda management? Now that Skoda Auto is successful, how should VW use Skodas abilities? What tensions might emerge between Skoda management & VW corporate management?

Class 2. Creating Competitive Advantage: Cirque de Soleil This class focuses on tools for redefining competitive space while creating capabilities to take advantage of opportunities in the new space. Reading: The Evolution of the Circus Industry (Case A) [Insead case 302-057-1, 2002] Case: Even a Clown Can Do It: Cirque de Soleil Recreates Live Entertainment (Case B) [Insead case 302-058-1, 2002] Preparation: Consider the following questions as you prepare the case. How would you assess the attractiveness of the circus industry in the early 1980s? What were the factors that the traditional circus companies competed on? What do you like or dislike about the traditional circus? 6

How did Cirque redefine the conventional circus industry? What elements of the traditional business did Cirque eliminate? What elements did Cirque keep? What new elements did Cirque create & where did they come from?

Class 3. Assessing Opportunities: AirAsia The class focuses on understanding your competitive environment and creating a business that can thrive in that environment. Reading: The Asian Airline Industry (NUS case, 2006-11-2006) Case: Air Asia: Now Everyone Can Fly (NUS case, 2006-08-11) Preparation: Consider the following questions as you prepare the case. What explains AirAsias success? Will AirAsias success attract traditional carriers to enter its segment? Can AirAsia sustain its success?

Class 4. Creating Capabilities - Unilever This class assesses opportunities to create new types of consumer value. Case: Unilever in Brazil Marketing Strategies for Low-Income Consumers [Insead 02/20045118] Reading: Serving the World's Poor, Profitably, HBR, September 1, 2002, Reprint 90209C Preparation: Based on your reading of the case and background materials, please outline a strategy for Unilever to target the low-income segment of consumers in Northeastern Brasil. Your strategy should examine the financial implications of your recommendations, as well as any impact on other parts of Unilevers product portfolio. In addition, your strategy should include a plan for expanding your approach to other countries and product lines, if it succeeds in Brasil.

Class 5. Global Strategy MTN This class examines a firm that has succeeded in creating value in a series of tough markets in Africa. Cases MTN: One group, one vision, one brand (WBS case WBS-2005-10, 2005) MTN Cameroon (Babson case BAB135, 2009) Orange Cameroon (Babson case BAB136, 2009)

Preparation. Consider MTN & Orange at the time of the cases. MTN in Africa: How did MTN succeed in creating a successful common brand in Africa? MTN & Orange in Cameroon: How can each company grow (profitably) in Cameroon?


Class 6. Expansion Lenta This class examines a company that has established a strong position in on point of its domestic market and now seeks to expand. Case: Lenta of St. Petersburgh, Russia (Babson case BAB123, March 2006) Preparation: Consider Lenta at the time of the case. How has Lenta succeeded so far? Where should Oleg lead Lenta?

Class 7. Internal Dynamics BYD This class examines a firm that is flourishing in its original industry and is attempting to move into a very different value chain. Case: BYD Company Ltd. (HBS case 9-606-139, 2009) Preparation: Consider BYD at the time of the case. Should BYD vertically integrate from batteries into cars (by buying a small auto company), and build an electric car?

Class 8. Value Chain Integration HTC Corp. This class examines a firm that has become a global technical leader and is facing choices about where to position itself on the value chain. Case: HTC Corp. in 2009 (HBS case 9-709-466, December 2009) Preparation: Consider HTCs position at the time of the case. What has driven its success to date? Should HTC emulate its competitors and open an app store? Should it do something else? What recommendations would you make for the company going forward as it seeks to become the leading smart-phone company in the world?

Class 9. Acquisitions & Strategic Leadership - Nicholas Piramal This class considers a company that is seeking to become a magnet in providing services at a key point of the international supply chain. Case: Michael Fernandes at Nicholas Piramal (HBS case 9-408-001, July 17, 2008) Preparation: Consider NPIL at the time of the case. What choices and factors have driven NPILs success to date? How should NPIL change its strategies going forward?

STRATEGY 230 (FALL 2009) COURSE PACK CONTENTS S1. Skoda Auto From No-Class to World-Class in One Decade [IMD case 3-0910, 2004] S2a. The Evolution of the Circus Industry (Case A) [Insead case 302-057-1, 2002] S2b. Even a Clown Can Do It: Cirque de Soleil Recreates Live Entertainment (Case B) [Insead case 302-058-1, 2002] S3a. The Asian Airline Industry (NUS case, 2006-11-2006) S3b. Air Asia: Now Everyone Can Fly (NUS case, 2006-08-11) S4a. Unilever in Brazil Marketing Strategies for Low-Income Consumers [Insead 02/20045118] S4b. Serving the World's Poor, Profitably, HBR, September 1, 2002, Reprint 90209C S4. Infosys Consulting in 2006: Leading the Next Generation of Business and Information Technology Consulting (Stanford case SM-151, 5/16/2006) S5a. MTN: One group, one vision, one brand (WBS case WBS-2005-10, 2005) S5b. MTN Cameroon (Babson case BAB135, 2009) S5c. Orange Cameroon (Babson case BAB136, 2009) S6. Lenta of St. Petersburgh, Russia (Babson case BAB123, March 2006) S7. BYD Company Ltd. (HBS case 9-606-139, September 2009) S8. HTC Corp. in 2009 (HBS case 9-709-466, December 2009) S9. Michael Fernandes at Nicholas Piramal (HBS case 9-408-001, July 17, 2008)