What is our business?
Objectives
Purpose
Mission
Goals
Vision
Values
Competence
Resources
Levels of strategy
Proudct market Opportunity
Monday, April 28, 2008
Objectives
Objectives specify the results sought through the ongoing, long-run operations of the organization. These outcomes may consist not only of the desired results insofar as the organation's customer is concerned but also of what the organization perceives as the long range results it intends to achieve internally.
To have meaningful impact, objectives must be operational; that is they must be capable of being converted into specific targets and specific actions. They must give direction to the activity of the organization. They must set forth long-run organizational priorities. They must become the basis for work and for achievement. They must serve as standards against which performance is to be measured.
Since the role of objectives is to guide the concentration of resources and effort towards the desired ends, objectives should be selective. Objectives are needed in all areas on which the long-term survival and success of the organization depend. The important areas are:
1. Market
2. Technology
3. Innovation
4. Profitability
5. Efficiency
6. Resources
7. Social responsibility
The objectives of an organization may undergo revision over a period of time to meet changing circumstances.
Source
Strategy and Policy: Concepts and Cases
by
Thompson and Strickland
Business Publications, Texas, 1978
To have meaningful impact, objectives must be operational; that is they must be capable of being converted into specific targets and specific actions. They must give direction to the activity of the organization. They must set forth long-run organizational priorities. They must become the basis for work and for achievement. They must serve as standards against which performance is to be measured.
Since the role of objectives is to guide the concentration of resources and effort towards the desired ends, objectives should be selective. Objectives are needed in all areas on which the long-term survival and success of the organization depend. The important areas are:
1. Market
2. Technology
3. Innovation
4. Profitability
5. Efficiency
6. Resources
7. Social responsibility
The objectives of an organization may undergo revision over a period of time to meet changing circumstances.
Source
Strategy and Policy: Concepts and Cases
by
Thompson and Strickland
Business Publications, Texas, 1978
Purpose
A business is defined by the want the customer satisfies when he buys a product or a service from a business organization.
To satisfy the customer (means to satisfy a specific want of the customer) is the mission and purpose of every business.
The question "What is our business?" can be answered ony by looking at the business from the outside, from the view point of customer and market.
The purpose of a company has to be one of the wants of customers in the market.
The customer is not attached to any product, service or company. He wants to know wht the product or service will do for him tomorrow. He is interested in his own wants, his values and his desires and world as he sees it. Therefore any serious attempt to define "what our business is" must start with the customer, his wants, his situation, his behavior, his expectations, and his values.
Therefore a searching enquiry needs to carried out to answer questions such as:
Who is our customer and what his needs?
Where is the customer?
What does the customer buy?
Is it status? Comfort? Satisfaction of a physical need? An ego need? Security?
What is value to the customer?
Is it price? Function? Quality? Service? Economy of use? Durability? Styling? Convenience?
These questions plainly need to be posed and answered at the inception of a business and whenever it gets into trouble.
But even when the business is successful, the organization have to examine their business purpose as the definition may become obsolete in the context of changes in the products and markets. The periodical examination of purpose in the light of customer studies and research will help the organization to look ahead and anticipate the impact of changes in the environment.
At any point of time, the purpose stated by the company has to be the answer to the question "What should our business be?" This question is periodically answered by the top management as a part of its setting the strategy for the future period.
Reference
Strategy and Policy
Thompson and Strickland,
Business Publications, 1978
To satisfy the customer (means to satisfy a specific want of the customer) is the mission and purpose of every business.
The question "What is our business?" can be answered ony by looking at the business from the outside, from the view point of customer and market.
The purpose of a company has to be one of the wants of customers in the market.
The customer is not attached to any product, service or company. He wants to know wht the product or service will do for him tomorrow. He is interested in his own wants, his values and his desires and world as he sees it. Therefore any serious attempt to define "what our business is" must start with the customer, his wants, his situation, his behavior, his expectations, and his values.
Therefore a searching enquiry needs to carried out to answer questions such as:
Who is our customer and what his needs?
Where is the customer?
What does the customer buy?
Is it status? Comfort? Satisfaction of a physical need? An ego need? Security?
What is value to the customer?
Is it price? Function? Quality? Service? Economy of use? Durability? Styling? Convenience?
These questions plainly need to be posed and answered at the inception of a business and whenever it gets into trouble.
But even when the business is successful, the organization have to examine their business purpose as the definition may become obsolete in the context of changes in the products and markets. The periodical examination of purpose in the light of customer studies and research will help the organization to look ahead and anticipate the impact of changes in the environment.
At any point of time, the purpose stated by the company has to be the answer to the question "What should our business be?" This question is periodically answered by the top management as a part of its setting the strategy for the future period.
Reference
Strategy and Policy
Thompson and Strickland,
Business Publications, 1978
Goals
The goals of an organization are the intermediate quantitative and qualitative "performance target" which management seeks to attain in moving toward organizational objectives.
Thus whereas objectives are long range in nature, goals are short range. They serve to indicate the speed and momentum which management seeks to maintain in accomplishing the organization's objectives.
They direct the attention of both management and employees toward the desired standards of performance and behavior in the near term.
Illustrations of goals:
1. Our target is to have market share of 15 percent this year and 17.5 percent next year.
2. We seek to gain enough accounts this year to reach our goal of $50 million in assets under management.
Goals become the rallying point for coordinating the activities of subunits as they act as a basis for establising common goalposts.
Acceptance of the objectives of the organization and goals derived therefrom promotes teamwork and a united approach to the working of the organization.
Thus whereas objectives are long range in nature, goals are short range. They serve to indicate the speed and momentum which management seeks to maintain in accomplishing the organization's objectives.
They direct the attention of both management and employees toward the desired standards of performance and behavior in the near term.
Illustrations of goals:
1. Our target is to have market share of 15 percent this year and 17.5 percent next year.
2. We seek to gain enough accounts this year to reach our goal of $50 million in assets under management.
Goals become the rallying point for coordinating the activities of subunits as they act as a basis for establising common goalposts.
Acceptance of the objectives of the organization and goals derived therefrom promotes teamwork and a united approach to the working of the organization.
Sunday, April 27, 2008
Organizational Competence and Resources
The strategist has to choose among available product-market opportunities, the opportunity which is viable with the organization's current competencies and resources.
Basic Strategic Alternatives
1. Concentration on a single business
2. Horizonal integration
3. Vertical integration
4. Diversification
5. Joint ventures
6. Innovation
7. Retrenchment
8. Divestiture
9. Liquidation
2. Horizonal integration
3. Vertical integration
4. Diversification
5. Joint ventures
6. Innovation
7. Retrenchment
8. Divestiture
9. Liquidation
Developing a Strategic Profile for the Company- Part 3
Information regarding economy, industry and companies.
Where to find them and procure them?
Economy
US Department of Commerce
Survey of Current Business (monthly)
Business Conditions Digest (monthly)
US Industrial Outlook (publication now discontinued)
Statistical Abstract of the United States
Where to find them and procure them?
Economy
US Department of Commerce
Survey of Current Business (monthly)
Business Conditions Digest (monthly)
US Industrial Outlook (publication now discontinued)
Statistical Abstract of the United States
Competitive Environment and Strategy
Jerry Wall, "What the Competition is doing: YOur need to know" Harvard Business Review, vol. 52, no. 6, (Nov-Dec 1974), pp. 22
Evaluation of Strategic Alternatives
Match with the organization's competence and financial resources.
Contribution of overall performance
Competitive edge
Minimum administrative problems
Expected profitability
Fit with organization's philosophy, and personality
Timing
Options
Contribution of overall performance
Competitive edge
Minimum administrative problems
Expected profitability
Fit with organization's philosophy, and personality
Timing
Options
Structuring an Effective Organization to Suit Strategy
Model of stages of organizational development
Malcolm S. Salter, "Stages of 'Corporate Development," Journal of Business Policy, vol 1, no. 1 (Spring 1970), pp.23-27.
Donald H. Thain, "Stages of Corporate Development," The Business Quarterly, (Winter 1969), pp. 32-45
the underpinning of this concept is that enterprises can be arrayed along a continuum running from very simple to very complex organizational forms and tath there is a tendency for an organization to move into more complex forms as it grows in size, market coverage and product line diversity.
Malcolm S. Salter, "Stages of 'Corporate Development," Journal of Business Policy, vol 1, no. 1 (Spring 1970), pp.23-27.
Donald H. Thain, "Stages of Corporate Development," The Business Quarterly, (Winter 1969), pp. 32-45
the underpinning of this concept is that enterprises can be arrayed along a continuum running from very simple to very complex organizational forms and tath there is a tendency for an organization to move into more complex forms as it grows in size, market coverage and product line diversity.
Thursday, April 10, 2008
OSA Operations Simulations Analysis
http://www.osawh.com/
Dr. Warren Huang Wall Street Journal Street daily Economy, Energy, Market OSA Blog : www.osaglobalstrategicmanagement.com
Do not miss this proactive structural price mechanism based strategic financial modeling and risks valuation, simulation for investment , trillion dollar recession hedging strategy workshops series by OSA proactive solution pioneer Dr.Warren Huang
Millions of global /China top fund managers and investment management teams bring their management/s operating problems into our strategic fund allocation and wealth management workshops. take home billion dollar proactive structural solution, avoided trillion dollar housing, stock market loss due betting on the wrong side of interest rates and bull/bear market trend, ready to implement
Dr. Warren Huang accurately warned on Wall Street Journal Market beat Blog Sept.19, 2007 that US housing price slump continue into summer 2008 drag economy into inflationary recession and US, global stock indices bear market correction, oil above 110, Bear Stearn 30 billion dollar MBS hedge funddespite Fed rate cuts He also warned top QFII management on Peking Univ June 2007 International Financial Engineering Conference that China overheated housing, stock market wealth gain resulted inflation over 7 % will lead to China Peoples Bank credit tightening to remove excessive liquidity, Housing, stock markets follow US housing price slump, recession, bear market correction, with Shanghai A testing 3000- 4000 till summer 2008
Dr. Warren Huang Wall Street Journal Street daily Economy, Energy, Market OSA Blog : www.osaglobalstrategicmanagement.com
Do not miss this proactive structural price mechanism based strategic financial modeling and risks valuation, simulation for investment , trillion dollar recession hedging strategy workshops series by OSA proactive solution pioneer Dr.Warren Huang
Millions of global /China top fund managers and investment management teams bring their management/s operating problems into our strategic fund allocation and wealth management workshops. take home billion dollar proactive structural solution, avoided trillion dollar housing, stock market loss due betting on the wrong side of interest rates and bull/bear market trend, ready to implement
Dr. Warren Huang accurately warned on Wall Street Journal Market beat Blog Sept.19, 2007 that US housing price slump continue into summer 2008 drag economy into inflationary recession and US, global stock indices bear market correction, oil above 110, Bear Stearn 30 billion dollar MBS hedge funddespite Fed rate cuts He also warned top QFII management on Peking Univ June 2007 International Financial Engineering Conference that China overheated housing, stock market wealth gain resulted inflation over 7 % will lead to China Peoples Bank credit tightening to remove excessive liquidity, Housing, stock markets follow US housing price slump, recession, bear market correction, with Shanghai A testing 3000- 4000 till summer 2008
TALENT PORTFOLIO MANAGEMENT:
TALENT PORTFOLIO MANAGEMENT:
LEVERAGING HUMAN ASSETS IN INVESTMENT BANKING
AND CAPITAL MARKETS
by Paul Aldrich
http://www.ctnet.com/NR/rdonlyres/CF180B0C-8308-4F4B-8851-22068D9A08B9/1554/IFR_TalentManagementExecSummaryPXA_707.pdf
LEVERAGING HUMAN ASSETS IN INVESTMENT BANKING
AND CAPITAL MARKETS
by Paul Aldrich
http://www.ctnet.com/NR/rdonlyres/CF180B0C-8308-4F4B-8851-22068D9A08B9/1554/IFR_TalentManagementExecSummaryPXA_707.pdf
Improve Productivity in Investment Banking Through Collaborative Email
7 Ways to Improve Productivity in Investment Banking Through Collaborative Email
Collaborative Email combines the power of collaborative capabilities with the familiarity and ease of use of Email. Bankers want a tool that extends Email, as opposed to a specialized tool that is separated from Email. Collaborative Email has emerged as the strategic weapon that promises to provide support for collaborative processes that are mission-critical to bankers. This paper provides seven ways to improve productivity in investment banking through Collaborative Email.
Download full paper from
http://whitepapers.zdnet.co.uk/0,1000000651,260084784p-39000628q,00.htm
after registration
Collaborative Email combines the power of collaborative capabilities with the familiarity and ease of use of Email. Bankers want a tool that extends Email, as opposed to a specialized tool that is separated from Email. Collaborative Email has emerged as the strategic weapon that promises to provide support for collaborative processes that are mission-critical to bankers. This paper provides seven ways to improve productivity in investment banking through Collaborative Email.
Download full paper from
http://whitepapers.zdnet.co.uk/0,1000000651,260084784p-39000628q,00.htm
after registration
Video - Future of asset management - Patrick Dixon
Future of asset management and other financial services related global trends - by Dr Patrick Dixon
59 min 44 sec - 16 Jun 2007
www.globalchange.com
http://video.google.co.uk/videoplay?docid=-7675270257654006023
59 min 44 sec - 16 Jun 2007
www.globalchange.com
http://video.google.co.uk/videoplay?docid=-7675270257654006023
Knowledge Acquisition In Investment Banking
Abstract of paper to be presented at The Eighth International Conference on Knowledge, Culture and Change in Organisations 2008. The Conference will held at the Cambridge University, United Kingdom from 5-8 August 2008.
Knowledge Acquisition In Investment Banking: Opportunities For HR Professionals
By: Dr Carol Royal, Loretta O'Donnell
In a knowledge economy, it is essential for analysts of listed companies to understand, analyse and systematically articulate the drivers of intangible value within listed firms. This is essential for the process of more transparent investment recommendations. This paper examines current knowledge management practices within two investment banking firms, with a focus on the work of securities analysts, and observes a knowledge gap in the approach of analysts to analysing intangible value creation. In particular, the significant role of human capital as a driver of value in listed firms, is not well understood by securities analysts or their clients, and yet, as the human capital literature (Bassi and McMurrer, 2007; Mayo, 2001) suggest, human capital can be a lead indicator of potential future firm value. This knowledge gap is partly historical, as the professional licencing requirements of securities analysts has not, to date, included specific skill development in the qualitative forms of data analysis required for systematic human capital analysis. This is a component (2000-2005) of a larger study conducted from 1996-2005 in investment banks in Australia, Asia and the UK. The authors use an adaptation of Hodson and Sullivan’s (2002) three phase model of professional knowledge acquisition as a basis for highlighting new organisational development opportunities for HR professionals: bridging the human capital knowledge acquisition gap lobbying regulators to make changes in the training underpinning the licensing of securities analysts; accessing formal university courses in qualitative analysis, using professional associations for non-technical, non-traditional, strategic forms of knowledge acquisition and, finally, creating performance management systems to embed this form of knowledge acquisition into the work of securities analysts.
Paper: Knowledge Acquisition In Investment Banking
--------------------------------------------------------------------------------
Dr Carol Royal
Senior Lecturer, Director Masters of Technology Management, Australian School of Business, University of New South Wales
Sydney, NSW, AUSTRALIA
Dr Carol Royal (BA, M Com, PhD, UNSW) is the Director of the Masters of Technology management and senior lecturer in the School of Organisation and Management, Australian School of Business, at the University of New South Wales in Sydney, Australia. She was adjunct to the Australian Graduate School of Management and has had many years experience in corporate life as a practitioner in the human resources profession and as a management consultant.
--------------------------------------------------------------------------------
Loretta O'Donnell
lecturer, Australian School of Business, University of New South Wales
Sydney, NSW, AUSTRALIA
Loretta O'Donnell (BA(Hons), Dip Ed, MBA (AGSM)) has been a management consultant for twenty years. She is undertaking her doctoral studies at Macquarie Graduate School of Management, Macquarie University, Sydney. She is lecturing in the Australian School of Business, at the University of New South Wales, Sydney, Australia.
--------------------------------------------------------------------------------
Ref: M08P0105
http://m08.cgpublisher.com/proposals/105/index_html
Knowledge Acquisition In Investment Banking: Opportunities For HR Professionals
By: Dr Carol Royal, Loretta O'Donnell
In a knowledge economy, it is essential for analysts of listed companies to understand, analyse and systematically articulate the drivers of intangible value within listed firms. This is essential for the process of more transparent investment recommendations. This paper examines current knowledge management practices within two investment banking firms, with a focus on the work of securities analysts, and observes a knowledge gap in the approach of analysts to analysing intangible value creation. In particular, the significant role of human capital as a driver of value in listed firms, is not well understood by securities analysts or their clients, and yet, as the human capital literature (Bassi and McMurrer, 2007; Mayo, 2001) suggest, human capital can be a lead indicator of potential future firm value. This knowledge gap is partly historical, as the professional licencing requirements of securities analysts has not, to date, included specific skill development in the qualitative forms of data analysis required for systematic human capital analysis. This is a component (2000-2005) of a larger study conducted from 1996-2005 in investment banks in Australia, Asia and the UK. The authors use an adaptation of Hodson and Sullivan’s (2002) three phase model of professional knowledge acquisition as a basis for highlighting new organisational development opportunities for HR professionals: bridging the human capital knowledge acquisition gap lobbying regulators to make changes in the training underpinning the licensing of securities analysts; accessing formal university courses in qualitative analysis, using professional associations for non-technical, non-traditional, strategic forms of knowledge acquisition and, finally, creating performance management systems to embed this form of knowledge acquisition into the work of securities analysts.
Paper: Knowledge Acquisition In Investment Banking
--------------------------------------------------------------------------------
Dr Carol Royal
Senior Lecturer, Director Masters of Technology Management, Australian School of Business, University of New South Wales
Sydney, NSW, AUSTRALIA
Dr Carol Royal (BA, M Com, PhD, UNSW) is the Director of the Masters of Technology management and senior lecturer in the School of Organisation and Management, Australian School of Business, at the University of New South Wales in Sydney, Australia. She was adjunct to the Australian Graduate School of Management and has had many years experience in corporate life as a practitioner in the human resources profession and as a management consultant.
--------------------------------------------------------------------------------
Loretta O'Donnell
lecturer, Australian School of Business, University of New South Wales
Sydney, NSW, AUSTRALIA
Loretta O'Donnell (BA(Hons), Dip Ed, MBA (AGSM)) has been a management consultant for twenty years. She is undertaking her doctoral studies at Macquarie Graduate School of Management, Macquarie University, Sydney. She is lecturing in the Australian School of Business, at the University of New South Wales, Sydney, Australia.
--------------------------------------------------------------------------------
Ref: M08P0105
http://m08.cgpublisher.com/proposals/105/index_html
Competition in Investment Banking
Research paper
A comprehensive measure of overall investment banking competitiveness for follow-on offerings that aggregates the various dimensions of competition such as fees, pricing accuracy, analyst recommendations, distributional abilities, market making prowess, debt offering capabilities, and overall reputation is attempted in this paper. The measure allows to incorporate trade-offs that investment banks may use in competing for new or established clients.
The authors find that firms who seek a higher reputation underwriter face relatively non-competitive markets. In contrast, firms who switch to similar-quality underwriters enjoy more intense competition among investment banks which manifests in lower fees and more optimistic recommendations.
Investment banks do compete vigorously for some clients, with the level of competition related to the likelihood of gaining or losing clients. Finally, investment banks not performing up to market norms are more likely to be dropped in the follow-on offering.
Download the full paper from
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=491722
A comprehensive measure of overall investment banking competitiveness for follow-on offerings that aggregates the various dimensions of competition such as fees, pricing accuracy, analyst recommendations, distributional abilities, market making prowess, debt offering capabilities, and overall reputation is attempted in this paper. The measure allows to incorporate trade-offs that investment banks may use in competing for new or established clients.
The authors find that firms who seek a higher reputation underwriter face relatively non-competitive markets. In contrast, firms who switch to similar-quality underwriters enjoy more intense competition among investment banks which manifests in lower fees and more optimistic recommendations.
Investment banks do compete vigorously for some clients, with the level of competition related to the likelihood of gaining or losing clients. Finally, investment banks not performing up to market norms are more likely to be dropped in the follow-on offering.
Download the full paper from
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=491722
Management in Securities Firms - a 1962 Speech by Cohen
Download from
http://www.sec.gov/news/speech/1962/102562cohen.pdf
It contains thoughts on managing securities companies
http://www.sec.gov/news/speech/1962/102562cohen.pdf
It contains thoughts on managing securities companies
Outlook for Mergers and Acquisitions in 2008
17 Jan 2008
Chris McMahon, Brian Doyal and Chris Coetzee share their thoughts
Middle Market Will Remain Largely Insulated from Economic Turmoil
While there’s only one economy, various sub-segments of the capital market exist. The middle market is one sub-segment that has escaped much of the downturn from credit market turmoil, according to Chris McMahon, Managing Director and Head of U.S. Mergers and Acquisitions at Baird.
Across the board, deal activity slowed in the second half of 2007, explains McMahon. However, that trend was felt mostly in the larger merger market. The number of deals valued over $1 billion fell 40 percent from August through October compared to the same period in 2006. Middle market activity – deals under $1 billion – decreased only 8 percent during the same period.
“Traditionally, the primary lenders for middle market M&A deals are not the ‘bulge bracket’ banks. This middle market universe of lenders is less vulnerable to the credit crunch than the larger banks, and as a result, their activity hasn’t slowed as much. In addition, the ‘bulge bracket’ banks now view larger deals as more risky and are reaching down into the middle market, further keeping the segment active.”
Moreover, in a fiercely competitive market, companies understand that pursuing a middle market M&A buyout strategy can help them achieve scale. “While speaking with company executives at Baird’s 2007 Industrials Conference, it struck me that almost all of them have significant M&A objectives for 2008,” says McMahon. “They view transactions as an important supplement for organic growth.”
Furthermore, McMahon emphasizes that such deals will get done despite market turmoil. “Corporate balance sheets are as healthy as they’ve ever been. There is substantial capacity to support M&A activity.”
Business Services: A Hot Sector for 2008
Within the middle market, many sectors are further insulated from economic turmoil, says Brian Doyal, Managing Director and Head of Services and Technology group at Baird.
“Business process outsourcing and off shore outsourcing are hot sectors for 2008. Players in these sectors can actually become more active amid a downturn as companies pursue outsourcing to cut costs,” according to Doyal.
He predicts litigation and regulatory services, government outsourcing, healthcare services and companies involved in “green” initiatives in the waste and environmental management industry will also be winners in 2008.
The industrial sector, however, is heading into the wind. “Valuations of many industrial companies may have already peaked in several sectors and Asian outsourcing efficiencies have already been realized,” adds McMahon. “Global footprints will be critical as the North American industrial economy will be challenged.”
Cross-Border Activity Will Continue to Increase with India at the Helm
In 2008, the number of cross-border mergers and acquisitions will continue to increase – but not for the reasons one might think, says Doyal.
“The assertion that a weak U.S. dollar will drive inbound US M&A activity is false,” notes Doyal. Although a weak dollar does drive increased foreign purchasing of US capital goods, there is no currency arbitrage when you are paying US dollars for a domestic business based on its future, dollar denominated cash generation capabilities.”
Most of the inbound US M&A activity is actually driven by foreign companies desire to have a greater local sales and marketing presence and service delivery capability. Strong growth in developing countries such as India and China is giving companies the confidence and financing capability to reach out beyond their borders for acquisition targets. Case in point: India. Indian outbound cross-border deals have more than doubled each of the last three years and in August of this year volume hit a staggering $30 billion.
“Indian companies are becoming increasingly aggressive buyers,” says Doyal. “And the reasons they’re buying Western companies are often falsely assumed. Access to the marketing, sales and other expertise of Western firms is the primary reason Western companies are purchased by Indian firms; not to move the business offshore as commonly believed.”
Private Equity Firms Will Undergo Increased Competition, Revise Focus
“New entrants to the M&A game are providing fresh competition to private equity players,” says Chris Coetzee, Managing Director of Financial Sponsors group at Baird. “This competition will only increase in 2008.”
Now in the mix are public investment vehicles like Special Purpose Acquisition Companies (SPACs), explains Coetzee. Additionally, increased investment from the sovereign funds of China and Middle Eastern countries will affect the playing field.
Coetzee adds that as the competition heats up, private equity firms will increasingly focus on specialized sectors. “Many private equity firms will change their focus. Limited partners will continue requiring that funds specialize – digging deeper and buying smarter.”
About Chris McMahon, Brian Doyal and Chris Coetzee
With 20 years of investment banking experience, Chris McMahon is a Managing Director of investment banking at Baird focusing on the industrial sector. He is Head of Baird's U.S. Mergers and Acquisitions activities and a member of the firm's Investment Banking Management Committee and M&A Fairness Opinion Committee.
Brian Doyal is a Managing Director and Head of Baird’s Services, Technology and Health Care Groups with 20 years of experience. In addition to serving as Group Head, Mr. Doyal covers a wide range of services sectors, including BPO, Customer Care, Human Capital, Information and Professional Services, and is a member of Baird’s Investment Banking Management Committee.
Chris Coetzee is head of Baird’s Financial Sponsor Group and a member of the firm’s Investment Banking Management Committee and M&A Fairness Opinion Committee. Mr. Coetzee has 17 years of Investment Banking experience.
###
About Baird
Baird is an employee-owned, international wealth management, capital markets, private equity and asset management firm with offices in the United States, Europe and Asia. Established in 1919, Baird has nearly 2,200 associates serving the needs of individual, corporate, institutional and municipal clients. Baird oversees and manages client assets of over $78 billion. Committed to being a great place to work, Baird was recognized as one of the FORTUNE 100 Best Companies to Work For® in 2004, 2005, 2006 and 2007. Baird’s principal operating subsidiaries are Robert W. Baird & Co. in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s private equity operations. For more information, please visit Baird’s Web site at www.rwbaird.com.
http://www.rwbaird.com/news/currentnews/fraNewsRelease117.aspx?Seg=1919
Chris McMahon, Brian Doyal and Chris Coetzee share their thoughts
Middle Market Will Remain Largely Insulated from Economic Turmoil
While there’s only one economy, various sub-segments of the capital market exist. The middle market is one sub-segment that has escaped much of the downturn from credit market turmoil, according to Chris McMahon, Managing Director and Head of U.S. Mergers and Acquisitions at Baird.
Across the board, deal activity slowed in the second half of 2007, explains McMahon. However, that trend was felt mostly in the larger merger market. The number of deals valued over $1 billion fell 40 percent from August through October compared to the same period in 2006. Middle market activity – deals under $1 billion – decreased only 8 percent during the same period.
“Traditionally, the primary lenders for middle market M&A deals are not the ‘bulge bracket’ banks. This middle market universe of lenders is less vulnerable to the credit crunch than the larger banks, and as a result, their activity hasn’t slowed as much. In addition, the ‘bulge bracket’ banks now view larger deals as more risky and are reaching down into the middle market, further keeping the segment active.”
Moreover, in a fiercely competitive market, companies understand that pursuing a middle market M&A buyout strategy can help them achieve scale. “While speaking with company executives at Baird’s 2007 Industrials Conference, it struck me that almost all of them have significant M&A objectives for 2008,” says McMahon. “They view transactions as an important supplement for organic growth.”
Furthermore, McMahon emphasizes that such deals will get done despite market turmoil. “Corporate balance sheets are as healthy as they’ve ever been. There is substantial capacity to support M&A activity.”
Business Services: A Hot Sector for 2008
Within the middle market, many sectors are further insulated from economic turmoil, says Brian Doyal, Managing Director and Head of Services and Technology group at Baird.
“Business process outsourcing and off shore outsourcing are hot sectors for 2008. Players in these sectors can actually become more active amid a downturn as companies pursue outsourcing to cut costs,” according to Doyal.
He predicts litigation and regulatory services, government outsourcing, healthcare services and companies involved in “green” initiatives in the waste and environmental management industry will also be winners in 2008.
The industrial sector, however, is heading into the wind. “Valuations of many industrial companies may have already peaked in several sectors and Asian outsourcing efficiencies have already been realized,” adds McMahon. “Global footprints will be critical as the North American industrial economy will be challenged.”
Cross-Border Activity Will Continue to Increase with India at the Helm
In 2008, the number of cross-border mergers and acquisitions will continue to increase – but not for the reasons one might think, says Doyal.
“The assertion that a weak U.S. dollar will drive inbound US M&A activity is false,” notes Doyal. Although a weak dollar does drive increased foreign purchasing of US capital goods, there is no currency arbitrage when you are paying US dollars for a domestic business based on its future, dollar denominated cash generation capabilities.”
Most of the inbound US M&A activity is actually driven by foreign companies desire to have a greater local sales and marketing presence and service delivery capability. Strong growth in developing countries such as India and China is giving companies the confidence and financing capability to reach out beyond their borders for acquisition targets. Case in point: India. Indian outbound cross-border deals have more than doubled each of the last three years and in August of this year volume hit a staggering $30 billion.
“Indian companies are becoming increasingly aggressive buyers,” says Doyal. “And the reasons they’re buying Western companies are often falsely assumed. Access to the marketing, sales and other expertise of Western firms is the primary reason Western companies are purchased by Indian firms; not to move the business offshore as commonly believed.”
Private Equity Firms Will Undergo Increased Competition, Revise Focus
“New entrants to the M&A game are providing fresh competition to private equity players,” says Chris Coetzee, Managing Director of Financial Sponsors group at Baird. “This competition will only increase in 2008.”
Now in the mix are public investment vehicles like Special Purpose Acquisition Companies (SPACs), explains Coetzee. Additionally, increased investment from the sovereign funds of China and Middle Eastern countries will affect the playing field.
Coetzee adds that as the competition heats up, private equity firms will increasingly focus on specialized sectors. “Many private equity firms will change their focus. Limited partners will continue requiring that funds specialize – digging deeper and buying smarter.”
About Chris McMahon, Brian Doyal and Chris Coetzee
With 20 years of investment banking experience, Chris McMahon is a Managing Director of investment banking at Baird focusing on the industrial sector. He is Head of Baird's U.S. Mergers and Acquisitions activities and a member of the firm's Investment Banking Management Committee and M&A Fairness Opinion Committee.
Brian Doyal is a Managing Director and Head of Baird’s Services, Technology and Health Care Groups with 20 years of experience. In addition to serving as Group Head, Mr. Doyal covers a wide range of services sectors, including BPO, Customer Care, Human Capital, Information and Professional Services, and is a member of Baird’s Investment Banking Management Committee.
Chris Coetzee is head of Baird’s Financial Sponsor Group and a member of the firm’s Investment Banking Management Committee and M&A Fairness Opinion Committee. Mr. Coetzee has 17 years of Investment Banking experience.
###
About Baird
Baird is an employee-owned, international wealth management, capital markets, private equity and asset management firm with offices in the United States, Europe and Asia. Established in 1919, Baird has nearly 2,200 associates serving the needs of individual, corporate, institutional and municipal clients. Baird oversees and manages client assets of over $78 billion. Committed to being a great place to work, Baird was recognized as one of the FORTUNE 100 Best Companies to Work For® in 2004, 2005, 2006 and 2007. Baird’s principal operating subsidiaries are Robert W. Baird & Co. in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s private equity operations. For more information, please visit Baird’s Web site at www.rwbaird.com.
http://www.rwbaird.com/news/currentnews/fraNewsRelease117.aspx?Seg=1919
Wednesday, April 9, 2008
Strategic Management I MIT Open Courseware 15.902
http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-902Fall-2006/CourseHome/index.htm
This course focuses on some of the important current issues in strategic management. It will concentrate on modern analytical approaches and on enduring successful strategic practices. It is consciously designed with a technological and global outlook since this orientation in many ways highlights the significant emerging trends in strategic management. The course is intended to provide the students with a pragmatic approach that will guide the formulation and implementation of corporate, business, and functional strategies.
Required Textbook
Hax, Arnoldo C., and Dean L. Wilde. The Delta Project: Discovering New Sources of Profitability. New York, NY: Palgrave, 2001. ISBN: 0312240465.
Recommended Textbook
Hax, Arnoldo C., and Nicolas S. Majluf. The Strategy Concept and Process: A Pragmatic Approach. 2nd ed. Upper Saddle River, NJ: Prentice Hall, 1996. ISBN: 0134588940.
Each day's reading is listed below.
Course readings. SES # TOPICS Readings
I. Introduction and Overview of Strategic Management
1 The Delta Model Hax and Wilde. Chapters 1 and 2.
2 Porter's Frameworks and the Resource-Based View of the Firm Porter, Michael E. "Towards a Dynamic Theory of Strategy." Strategic Management Journal 12 (1991): 95-117.
Grant, Robert H. "The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation." California Management Review 33, no. 3 (1991).
Hax and Wilde. Chapter 12.
II. Business Strategy
3 Customer Segmentation and Customer Value Proposition Hax, Arnoldo C. "Achieving the Potentials of Your Organization - How to Overcome the Dangers of Commoditization." MIT Sloan Working Paper No. 4260-02. (September 2002).
4 The Firm as a Bundle of Competencies and Putting it All Together Hax and Wilde. Chapters 3-5.
5 Industry Structure and Competitive Interaction
6 The Decommoditization of a Business
7 Competitive Positioning
III. Technology and Industry Transformation
8 Sustaining Competitive Advantage
9 Competitive Dynamics
10 Putting it All Together: Integrating The Critical Tasks of Strategy Hax and Wilde. Chapter 6.
IV. Corporate Strategy
11 Corporate Strategy - The Core Concepts Hax, Arnoldo, and Nicolas Majluf. "Corporate Strategic Tasks." European Management Journal12, no. 4 (1994): 366-381.
12 Corporate Philosophy and Culture
13 General Principles of Organization Design Galbraith, Jay R. "Linking Customers and Products - Organizing for Product and Customer Focus," and "Structuring Global Organizations." Chapters 2 and 4 in Tomorrow's Organization. Edited by Susan A. Mohrman, Jay R. Galbraith, and Edward E. Lawler III. Jossey-Bass, 1998. ISBN: 0787940046.
14 Human Resources Management and Knowledge Management
15 Business Processes: The Core Concepts and Managing the Global Supply Chain Hax and Wilde. Chapter 7.
V. Aggregate and Granular Metrics
16 Metrics of Value Creation Hax and Majluf. Chapter 17.
"America's Best and Worst Wealth Creators." Fortune, December 18, 2000.
"America's Best and Worst Wealth Creators." Fortune, December 10, 2001.
Slywotzky, Adrian J., and Richard Wise. "The Growth Crisis and How to Escape It." Harvard Business Review (July 2002): 72-83.
17 The Balanced Scorecard and Granular Metrics Hax and Wilde. Chapters 9 and 10.
Kaplan, Robert S., and David P. Norton. "Having Trouble with Your Strategy? Then Map It." Harvard Business Review (September-October 2000): 167-176.
VI. Integration
18 Organizational Leadership
General References
Bartlett, C., and S. Ghoshal. Managing Across Borders: The Transnational Solution. Boston, MA: Harvard Business School Press, 2002.
Brandenburger, A. M., and B. J. Nalebuff. Co-opetition. New York, NY: Doubleday & Company, 1996.
Kim, W. Chan, and R. Mauborgne. Blue Ocean Strategy. Boston, MA: Harvard Business School Press, 2005.
Christensen, C. The Innovator's Dilemma: When Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press, 1997.
———. The Innovator's Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.
Collis, D., and C. Montgomery. Corporate Strategy: Resources and the Scope of the Firm. Westport, CT: Irwin Press, 1997.
Cusumano, M. A., and C. C. Mardikes, eds. Strategic Thinking for the New Economy. Hoboken, NJ: Jossey-Bass, 2001.
Foster, R., and S. Kaplan. Creative Destruction. New York, NY: Doubleday & Company, 2000.
Galbraith, J. Designing the Global Corporation. Hoboken, NJ: Jossey-Bass, 2000.
Ghemawat, P., D. Collis, G. Pisano, and J. Rivkin. Strategy and the Business Landscape. Upper Saddle River, NJ: Prentice Hall, 2001.
Hamel, G., and C. K. Prahalad. Competing for the Future. Boston, MA: Harvard Business School Press, 1996.
Hayes, R., G. Pisano, and D. Upton. Strategic Operations: Competing Through Capabilities. New York, NY: Free Press, 1996.
Kaplan, R. S., and D. P. Norton. Strategy Maps: Converting Intangible Assets Into Tangible Outcomes. Boston, MA: Harvard Business School Press, 2004.
Pfeffer, J. The Human Equation. Boston, MA: Harvard Business School Press, 1998.
Porter, M. Competitive Advantage. New York, NY: Free Press, 1985.
———. The Competitive Advantage of Nations. New York, NY: Free Press, 1990.
Prahalad, C. K., and V. Ramaswamy. The Future of Competition. Boston, MA: Harvard Business School Press, 2004.
Reichheld, F. Loyalty Rules. Boston, MA: Harvard Business School Press, 2001.
Saloner, G., A. Shepard, and J. Podolny. Strategic Management. New York, NY: John Wiley & Sons, 2001.
Shapiro, C., and H. Varian. Information Rules. Boston, MA: Harvard Business School Press, 1999.
Stern, J. M., and J. S. Shiely. The Eva Challenge: Implementing Value-Added Change in an Organization. New York, NY: John Wiley & Sons, 2001.
Thompke, S. Experimentation Matters: Unlocking the Potential of New Technologies for Innovation. Boston, MA: Harvard Business School Press, 2003.
Ulrich, D. Human Resource Champions. Boston, MA: Harvard Business School Press, 1997.
von Hippel, E. Democratizing Innovation. Cambridge, MA: MIT Press, April 2006. ISBN: 0262720477.
Lecture Notes
Lecture notes files. SES # TOPICS
I. Introduction and Overview of Strategic Management
1 The Delta Model (PDF - 5.5 MB)
2 Porter's Frameworks and the Resource-Based View of the Firm (PDF 1 - 1.6 MB) (PDF 2) (PDF 3)
II. Business Strategy
3 Customer Segmentation and Customer Value Proposition (PDF - 4.7 MB)
4 The Firm as a Bundle of Competencies and Putting it All Together (PDF 1 - 1.6 MB) (PDF 2)
5 Industry Structure and Competitive Interaction
6 The Decommoditization of a Business (PDF)
7 Competitive Positioning (PDF 1) (PDF 2)
III. Technology and Industry Transformation
8 Sustaining Competitive Advantage (PDF)
9 Competitive Dynamics (PDF 1 - 3.0 MB) (PDF 2 - 1.4 MB)
10 Putting it All Together: Integrating The Critical Tasks of Strategy
IV. Corporate Strategy
11 Corporate Strategy - The Core Concepts (PDF 1 - 1.7 MB) (PDF 2 - 1.2 MB) (PDF 3 - 1.1 MB)
12 Corporate Philosophy and Culture
13 General Principles of Organization Design (PDF 1 - 3.7 MB) (PDF 2) (PDF 3)
14 Human Resources Management and Knowledge Management
15 Business Processes: The Core Concepts and Managing the Global Supply Chain
V. Aggregate and Granular Metrics
16 Metrics of Value Creation
17 The Balanced Scorecard and Granular Metrics
VI. Integration
18 Organizational Leadership
http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-902Fall-2006/LectureNotes/index.htm
Assignments
Assignment cases. SES # TOPICS CASES AND QUESTIONS
I. Introduction and Overview of Strategic Management
1 The Delta Model Questions for Discussion
i. Which of the three options presented - Best Project, Total Customer Solutions, System Lock-In - seems to be the most appropriate, and under which conditions?
ii. Select some companies that you are familiar with and try to identify what, in your judgment, is the existing strategic positioning of the company and whether you would suggest a better alternative.
2 Porter's Frameworks and the Resource-Based View of the Firm Questions for Discussion
i. How would you use the three frameworks?
ii. Does anyone of them seem to you to dominate the others or could you benefit from selectively using all of them?
II. Business Strategy
3 Customer Segmentation and Customer Value Proposition Questions for Discussion
i. Identify a company that you are familiar with and try to perform a customer segmentation.
ii. Position the resulting tiers in the Delta Model Triangle.
iii. At least for one tier, develop a creative custom value proposition.
4 The Firm as a Bundle of Competencies and Putting it All Together Questions for Discussion
i. How does the resource-based view of the firm compare with the methodology suggested by the Delta Model to address the firm's competencies?
ii. Select a company that you are familiar with and try to identify its existing and desired capabilities.
5 Industry Structure and Competitive Interaction Yoffie, David B., and Yusi Wang. "Cola Wars Continue: Coke® and Pepsi in the Twenty First Century." Boston, MA: Harvard Business School Case 9-702-442, January 11, 2002.
Questions for Discussion
i. Why is the soft drink industry so profitable?
ii. Compare the economics of the concentrate business to the bottling business; why is the profitability so different?
iii. How has competition between Coke® and Pepsi affected the industry profits?
iv. Can Coke® and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks?
You might consider using Porter's Five Forces Framework to address some of these issues.
6 The Decommoditization of a Business Anand, Bharat N., Michael G. Rukstad, and Christopher H. Paige. "Capital One Financial Corporation." Boston, MA: Harvard Business School Case 9-700-124, April 24, 2000.
Questions for Discussion
i. What are the key elements of Capital One's strategy that allows them to differentiate themselves from the rest of the industry?
ii. How sustainable is Capital One's competitive advantage? What can competitors do?
iii. Is the strategy transportable to other industries?
In responding to question "i", you might identify Capital One's competencies by considering the eight strategic positionings that are part of the Triangle in the Delta Model.
7 Competitive Positioning Ghemawat, Pankaj, Stephen P. Bradley, and Ken Mark. "Wal*Mart Stores in 2003." Boston, MA: Harvard Business School Case 9-704-430, September 18, 2003.
Questions for Discussion
i. What are the sources of Wal*Mart's competitive advantage in discount retailing?
ii. How sustainable will its position be in the future?
iii. What challenges does Wal*Mart face?
In responding to question "i", you might identify Wal*Mart's competencies by considering the eight strategic positionings that are part of the Triangle in the Delta Model
III. Technology and Industry Transformation
8 Sustaining Competitive Advantage Rivkin, Jan W., and Michael E. Porter. "Matching DELL™." Boston, MA: Harvard Business School Case 9-799-158, June 06, 1999.
Ghemawat, Pankaj, and Jan W. Rivkin. "Creating Competitive Advantage." Boston, MA: Harvard Business School Case 9-798-062, January 25, 1998.
Questions for Discussion
i. How and why did the personal computer industry come to have such low average profitability?
ii. Why has DELL™ been so successful?
iii. Prior to the recent efforts by competitors to match DELL™ (1997-1998), how big was DELL™'s competitive advantage? Specifically, calculate DELL™'s advantage over Compaq in serving a corporate customer.
iv. How effective have competitors been in responding to the challenge posed by DELL™'s advantage? How big is DELL™'s remaining advantage?
DELL™ is properly being presented as one of the most innovative companies, the creator of a business model that has received a great deal of attention in the networked economy. Questions i. and ii. can be addressed using Porter's Five Forces and Porter's Value Chain frameworks respectively. The third question allows for you to do some numerical calculations to quantify DELL™'s advantage over Compaq. You are welcome to work in groups in preparation of this analysis.
9 Competitive Dynamics Ghemawat, Pankaj, and Bret Baird. "Leadership Online (A): Barnes & Noble vs. Amazon.com." Boston, MA: Harvard Business School Case 9-798-063, May 26, 1998.
Corts, Kenneth S., and Jan W. Rivkin. "A Note on Microeconomics for Strategists." Boston, MA: Harvard Business School Case 9-799-128. March 30, 1999.
Questions for Discussion
i. Based on your own experience of traditional bookselling and your exploration of online bookselling, compare willingness-to-pay for books supplied by these two business models.
ii. Also compare the forecast long-run cost position of a successful online bookseller to Barnes & Noble's traditional business model. (Assume that Exhibits 4 and 7 in the case reflect average discounts of 10% off list price for Barnes & Noble's traditional bookstores and 25% off list for the online bookseller.)
iii. Assess Barnes & Noble's response to the substitution threat from AMAZON®. How did AMAZON® respond in turn, and to what net effect?
iv. Who will be the online leader? Will it ever make much money selling books (as opposed to selling stock)?
Please contrast the competitive positioning of a traditional, off-line, competitor like Barnes & Noble vs. an on-line channel like Amazon.com. With regard to question i., a customer willingness to pay for a product or a service is the maximum amount of money a customer is willing to part with in order to obtain a product or a service. The question is whether you find any significant difference in your willingness to pay for a book being acquired under these two different channels. In question ii. You might want to use the most recent data provided in Exhibit 4 (1996 for Barnes and Noble) and Exhibit 7 (F2001E for AMAZON®). Remember that Barnes & Noble provides 10% discount off list price, and AMAZON® provides 25%. The case is a good vehicle also to talk about the substitution threat Barnes & Noble and how it is responding against AMAZON®.
10 Putting it All Together: Integrating The Critical Tasks of Strategy Questions for Discussion
i. What is the role of the frameworks that we have discussed in the course (Porter, Resource-Based View for the Firm, and the Delta Model) in the definition of the critical strategic tasks?
ii. Be ready to discuss the issues that you face when implementing a business strategy.
IV. Corporate Strategy
11 Corporate Strategy - The Core Concepts Questions for Discussion
i. What are the central differences that exist between the development of a corporate and a business strategy?
ii. Should corporate strategy be formulated first and then followed by the development of the individual business strategies that are part of the corporate portfolio (a top-down approach), or should the business strategies be done first and then followed b the formulation of a corporate strategy (bottom-up approach)?
iii. Under which conditions do you favor one approach vs. another?
Be prepared to discuss each of the 10 corporate tasks described in the Hax and Majluf paper.
12 Corporate Philosophy and Culture Aguilar, Francis J., and Arvind Bhambri. "Johnson & Johnson (A)." Boston, MA: Harvard Business School Case 9-384-053, August 19, 1983.
Aguilar, Francis J., and Arvind Bhambri. "Johnson & Johnson (B): Hospital Services." Boston, MA: Harvard Business School Case 9-384-054, August 19, 1983.
Questions for Discussion
(Johnson & Johnson (A))
i. Comment on Johnson & Johnson (J&J) philosophy and culture. Are they overdoing their decentralization policy? What is your opinion about "The Credo?"
ii. How are strategic and operational responsibilities handled at J&J? Do you like their strategic planning process and their executive compensation?
(Johnson & Johnson (B): Hospital Services)
iii. By establishing the Hospital Services Group (HSG), J&J seems to be taking an action against the fiber of its decentralization philosophy and culture. Do you agree with that decision?
iv. Comment on the charter of HSG. How would you prevent possible conflicts between HSG and the J&J companies?
Although these cases on the surface are quite old, they address some very critical issues that have profound relevance in management regardless of time. The A case presents a company that is enormously consistent in terms of its culture, management processes, and philosophy. Decentralization is the trademark of that organization. Case B deeply challenges the effectiveness of this management structure. I have two very interesting tapes of Jim Burke, who was CEO of Johnson & Johnson at that time that I would like for you to see.
13 General Principles of Organization Design Questions for Discussion
i. What are the advantages and disadvantages of the three major organizational archetypes: functional, divisional, and holding organizational forms?
ii. How do you develop a properly balanced Back-End Front-End organizational form?
iii. How do you assume proper horizontal coordination across the individual organizational units?
14 Human Resources Management and Knowledge Management Bartlett, Christopher A. "McKinsey and Company: Managing Knowledge and Learning." Boston, MA: Harvard Business School Case 9-396-357. June 28, 1996
Questions for Discussion
i. How was the obscure little firm of "accounting and engineering advisors" able to grow into the world's most prestigious consulting firm fifty years later? What was the unique source of competitive advantage developed by James O. McKinsey and later Marvin Bower?
ii. How effective was Ron Daniel in leading McKinsey to respond to challenges identified in the Commission on Firm Aims and Goals? What contribution did Fred Gluck make to the required changes?
iii. Judging by the evidence in the three mini-cases of front-line activities in the mid-1990s, how effective has the firm been in its two-decade long change process?
What is your evaluation of Rajat Gupta's "four-pronged" approach to knowledge development and application within McKinsey? As a senior partner, what specific advice would you give him?
15 Business Processes: The Core Concepts and Managing the Global Supply Chain Yoshino, Michael Y., and Anthony St. George. "Li & Fung (A): Beyond 'Filling in the Mosaic' -- 1995-98." Boston, MA: Harvard Business School Case 9-398-092. January 05, 1998.
Questions for Discussion
i. How is Li and Fung able to maintain margins three times those of the rest of the industry? What are its specific strengths and how does it differ from more traditional competitors?
ii. What attributes of Chinese business culture does the company exhibit? Are these strengths for the company?
iii. What are the benefits of the Li and Fung matrix sourcing system?
iv. How does the venture capital group contribute to Li and Fung's growth? What are the challenges the company faces going ahead and what issues does it need to address in order to expand? How and where should it expand?
V. Aggregate and Granular Metrics
16 Metrics of Value Creation Questions for Discussion
i. Discuss the role of metrics that contribute to the economic value generated by a strategy.
17 The Balanced Scorecard and Granular Metrics Questions for Discussion
i. Make sure that you understand the role played by aggregate and granular metrics both in defining a strategy and in monitoring its execution.
VI. Integration
18 Organizational Leadership Bartlett, Christopher A., and Meg Wozny. "GE's Two-Decade Transformation: Jack Welch's Leadership." Boston, MA: Harvard Business School Case 9-399-150. April 28, 1999.
Questions for Discussion
i. How difficult a challenge did Welch face in 1981? How effectively did he take charge?
ii. What is Welch's objective in the series of initiatives he launched in the late 1980s and early 1990s? What is he trying to achieve in the round of changes he put in motion in that period? Is there a logic or rationale supporting the change process?
iii. How does such a large, complex diversified conglomerate defy the critics and continue to grow so profitably? Have Welch's various initiatives added value? If so, how?
iv. What is your evaluation of Welch's approach to leading change? How important is he to GE's success? What implications for his replacement?
This course focuses on some of the important current issues in strategic management. It will concentrate on modern analytical approaches and on enduring successful strategic practices. It is consciously designed with a technological and global outlook since this orientation in many ways highlights the significant emerging trends in strategic management. The course is intended to provide the students with a pragmatic approach that will guide the formulation and implementation of corporate, business, and functional strategies.
Required Textbook
Hax, Arnoldo C., and Dean L. Wilde. The Delta Project: Discovering New Sources of Profitability. New York, NY: Palgrave, 2001. ISBN: 0312240465.
Recommended Textbook
Hax, Arnoldo C., and Nicolas S. Majluf. The Strategy Concept and Process: A Pragmatic Approach. 2nd ed. Upper Saddle River, NJ: Prentice Hall, 1996. ISBN: 0134588940.
Each day's reading is listed below.
Course readings. SES # TOPICS Readings
I. Introduction and Overview of Strategic Management
1 The Delta Model Hax and Wilde. Chapters 1 and 2.
2 Porter's Frameworks and the Resource-Based View of the Firm Porter, Michael E. "Towards a Dynamic Theory of Strategy." Strategic Management Journal 12 (1991): 95-117.
Grant, Robert H. "The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation." California Management Review 33, no. 3 (1991).
Hax and Wilde. Chapter 12.
II. Business Strategy
3 Customer Segmentation and Customer Value Proposition Hax, Arnoldo C. "Achieving the Potentials of Your Organization - How to Overcome the Dangers of Commoditization." MIT Sloan Working Paper No. 4260-02. (September 2002).
4 The Firm as a Bundle of Competencies and Putting it All Together Hax and Wilde. Chapters 3-5.
5 Industry Structure and Competitive Interaction
6 The Decommoditization of a Business
7 Competitive Positioning
III. Technology and Industry Transformation
8 Sustaining Competitive Advantage
9 Competitive Dynamics
10 Putting it All Together: Integrating The Critical Tasks of Strategy Hax and Wilde. Chapter 6.
IV. Corporate Strategy
11 Corporate Strategy - The Core Concepts Hax, Arnoldo, and Nicolas Majluf. "Corporate Strategic Tasks." European Management Journal12, no. 4 (1994): 366-381.
12 Corporate Philosophy and Culture
13 General Principles of Organization Design Galbraith, Jay R. "Linking Customers and Products - Organizing for Product and Customer Focus," and "Structuring Global Organizations." Chapters 2 and 4 in Tomorrow's Organization. Edited by Susan A. Mohrman, Jay R. Galbraith, and Edward E. Lawler III. Jossey-Bass, 1998. ISBN: 0787940046.
14 Human Resources Management and Knowledge Management
15 Business Processes: The Core Concepts and Managing the Global Supply Chain Hax and Wilde. Chapter 7.
V. Aggregate and Granular Metrics
16 Metrics of Value Creation Hax and Majluf. Chapter 17.
"America's Best and Worst Wealth Creators." Fortune, December 18, 2000.
"America's Best and Worst Wealth Creators." Fortune, December 10, 2001.
Slywotzky, Adrian J., and Richard Wise. "The Growth Crisis and How to Escape It." Harvard Business Review (July 2002): 72-83.
17 The Balanced Scorecard and Granular Metrics Hax and Wilde. Chapters 9 and 10.
Kaplan, Robert S., and David P. Norton. "Having Trouble with Your Strategy? Then Map It." Harvard Business Review (September-October 2000): 167-176.
VI. Integration
18 Organizational Leadership
General References
Bartlett, C., and S. Ghoshal. Managing Across Borders: The Transnational Solution. Boston, MA: Harvard Business School Press, 2002.
Brandenburger, A. M., and B. J. Nalebuff. Co-opetition. New York, NY: Doubleday & Company, 1996.
Kim, W. Chan, and R. Mauborgne. Blue Ocean Strategy. Boston, MA: Harvard Business School Press, 2005.
Christensen, C. The Innovator's Dilemma: When Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press, 1997.
———. The Innovator's Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.
Collis, D., and C. Montgomery. Corporate Strategy: Resources and the Scope of the Firm. Westport, CT: Irwin Press, 1997.
Cusumano, M. A., and C. C. Mardikes, eds. Strategic Thinking for the New Economy. Hoboken, NJ: Jossey-Bass, 2001.
Foster, R., and S. Kaplan. Creative Destruction. New York, NY: Doubleday & Company, 2000.
Galbraith, J. Designing the Global Corporation. Hoboken, NJ: Jossey-Bass, 2000.
Ghemawat, P., D. Collis, G. Pisano, and J. Rivkin. Strategy and the Business Landscape. Upper Saddle River, NJ: Prentice Hall, 2001.
Hamel, G., and C. K. Prahalad. Competing for the Future. Boston, MA: Harvard Business School Press, 1996.
Hayes, R., G. Pisano, and D. Upton. Strategic Operations: Competing Through Capabilities. New York, NY: Free Press, 1996.
Kaplan, R. S., and D. P. Norton. Strategy Maps: Converting Intangible Assets Into Tangible Outcomes. Boston, MA: Harvard Business School Press, 2004.
Pfeffer, J. The Human Equation. Boston, MA: Harvard Business School Press, 1998.
Porter, M. Competitive Advantage. New York, NY: Free Press, 1985.
———. The Competitive Advantage of Nations. New York, NY: Free Press, 1990.
Prahalad, C. K., and V. Ramaswamy. The Future of Competition. Boston, MA: Harvard Business School Press, 2004.
Reichheld, F. Loyalty Rules. Boston, MA: Harvard Business School Press, 2001.
Saloner, G., A. Shepard, and J. Podolny. Strategic Management. New York, NY: John Wiley & Sons, 2001.
Shapiro, C., and H. Varian. Information Rules. Boston, MA: Harvard Business School Press, 1999.
Stern, J. M., and J. S. Shiely. The Eva Challenge: Implementing Value-Added Change in an Organization. New York, NY: John Wiley & Sons, 2001.
Thompke, S. Experimentation Matters: Unlocking the Potential of New Technologies for Innovation. Boston, MA: Harvard Business School Press, 2003.
Ulrich, D. Human Resource Champions. Boston, MA: Harvard Business School Press, 1997.
von Hippel, E. Democratizing Innovation. Cambridge, MA: MIT Press, April 2006. ISBN: 0262720477.
Lecture Notes
Lecture notes files. SES # TOPICS
I. Introduction and Overview of Strategic Management
1 The Delta Model (PDF - 5.5 MB)
2 Porter's Frameworks and the Resource-Based View of the Firm (PDF 1 - 1.6 MB) (PDF 2) (PDF 3)
II. Business Strategy
3 Customer Segmentation and Customer Value Proposition (PDF - 4.7 MB)
4 The Firm as a Bundle of Competencies and Putting it All Together (PDF 1 - 1.6 MB) (PDF 2)
5 Industry Structure and Competitive Interaction
6 The Decommoditization of a Business (PDF)
7 Competitive Positioning (PDF 1) (PDF 2)
III. Technology and Industry Transformation
8 Sustaining Competitive Advantage (PDF)
9 Competitive Dynamics (PDF 1 - 3.0 MB) (PDF 2 - 1.4 MB)
10 Putting it All Together: Integrating The Critical Tasks of Strategy
IV. Corporate Strategy
11 Corporate Strategy - The Core Concepts (PDF 1 - 1.7 MB) (PDF 2 - 1.2 MB) (PDF 3 - 1.1 MB)
12 Corporate Philosophy and Culture
13 General Principles of Organization Design (PDF 1 - 3.7 MB) (PDF 2) (PDF 3)
14 Human Resources Management and Knowledge Management
15 Business Processes: The Core Concepts and Managing the Global Supply Chain
V. Aggregate and Granular Metrics
16 Metrics of Value Creation
17 The Balanced Scorecard and Granular Metrics
VI. Integration
18 Organizational Leadership
http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-902Fall-2006/LectureNotes/index.htm
Assignments
Assignment cases. SES # TOPICS CASES AND QUESTIONS
I. Introduction and Overview of Strategic Management
1 The Delta Model Questions for Discussion
i. Which of the three options presented - Best Project, Total Customer Solutions, System Lock-In - seems to be the most appropriate, and under which conditions?
ii. Select some companies that you are familiar with and try to identify what, in your judgment, is the existing strategic positioning of the company and whether you would suggest a better alternative.
2 Porter's Frameworks and the Resource-Based View of the Firm Questions for Discussion
i. How would you use the three frameworks?
ii. Does anyone of them seem to you to dominate the others or could you benefit from selectively using all of them?
II. Business Strategy
3 Customer Segmentation and Customer Value Proposition Questions for Discussion
i. Identify a company that you are familiar with and try to perform a customer segmentation.
ii. Position the resulting tiers in the Delta Model Triangle.
iii. At least for one tier, develop a creative custom value proposition.
4 The Firm as a Bundle of Competencies and Putting it All Together Questions for Discussion
i. How does the resource-based view of the firm compare with the methodology suggested by the Delta Model to address the firm's competencies?
ii. Select a company that you are familiar with and try to identify its existing and desired capabilities.
5 Industry Structure and Competitive Interaction Yoffie, David B., and Yusi Wang. "Cola Wars Continue: Coke® and Pepsi in the Twenty First Century." Boston, MA: Harvard Business School Case 9-702-442, January 11, 2002.
Questions for Discussion
i. Why is the soft drink industry so profitable?
ii. Compare the economics of the concentrate business to the bottling business; why is the profitability so different?
iii. How has competition between Coke® and Pepsi affected the industry profits?
iv. Can Coke® and Pepsi sustain their profits in the wake of flattening demand and the growing popularity of non-carbonated drinks?
You might consider using Porter's Five Forces Framework to address some of these issues.
6 The Decommoditization of a Business Anand, Bharat N., Michael G. Rukstad, and Christopher H. Paige. "Capital One Financial Corporation." Boston, MA: Harvard Business School Case 9-700-124, April 24, 2000.
Questions for Discussion
i. What are the key elements of Capital One's strategy that allows them to differentiate themselves from the rest of the industry?
ii. How sustainable is Capital One's competitive advantage? What can competitors do?
iii. Is the strategy transportable to other industries?
In responding to question "i", you might identify Capital One's competencies by considering the eight strategic positionings that are part of the Triangle in the Delta Model.
7 Competitive Positioning Ghemawat, Pankaj, Stephen P. Bradley, and Ken Mark. "Wal*Mart Stores in 2003." Boston, MA: Harvard Business School Case 9-704-430, September 18, 2003.
Questions for Discussion
i. What are the sources of Wal*Mart's competitive advantage in discount retailing?
ii. How sustainable will its position be in the future?
iii. What challenges does Wal*Mart face?
In responding to question "i", you might identify Wal*Mart's competencies by considering the eight strategic positionings that are part of the Triangle in the Delta Model
III. Technology and Industry Transformation
8 Sustaining Competitive Advantage Rivkin, Jan W., and Michael E. Porter. "Matching DELL™." Boston, MA: Harvard Business School Case 9-799-158, June 06, 1999.
Ghemawat, Pankaj, and Jan W. Rivkin. "Creating Competitive Advantage." Boston, MA: Harvard Business School Case 9-798-062, January 25, 1998.
Questions for Discussion
i. How and why did the personal computer industry come to have such low average profitability?
ii. Why has DELL™ been so successful?
iii. Prior to the recent efforts by competitors to match DELL™ (1997-1998), how big was DELL™'s competitive advantage? Specifically, calculate DELL™'s advantage over Compaq in serving a corporate customer.
iv. How effective have competitors been in responding to the challenge posed by DELL™'s advantage? How big is DELL™'s remaining advantage?
DELL™ is properly being presented as one of the most innovative companies, the creator of a business model that has received a great deal of attention in the networked economy. Questions i. and ii. can be addressed using Porter's Five Forces and Porter's Value Chain frameworks respectively. The third question allows for you to do some numerical calculations to quantify DELL™'s advantage over Compaq. You are welcome to work in groups in preparation of this analysis.
9 Competitive Dynamics Ghemawat, Pankaj, and Bret Baird. "Leadership Online (A): Barnes & Noble vs. Amazon.com." Boston, MA: Harvard Business School Case 9-798-063, May 26, 1998.
Corts, Kenneth S., and Jan W. Rivkin. "A Note on Microeconomics for Strategists." Boston, MA: Harvard Business School Case 9-799-128. March 30, 1999.
Questions for Discussion
i. Based on your own experience of traditional bookselling and your exploration of online bookselling, compare willingness-to-pay for books supplied by these two business models.
ii. Also compare the forecast long-run cost position of a successful online bookseller to Barnes & Noble's traditional business model. (Assume that Exhibits 4 and 7 in the case reflect average discounts of 10% off list price for Barnes & Noble's traditional bookstores and 25% off list for the online bookseller.)
iii. Assess Barnes & Noble's response to the substitution threat from AMAZON®. How did AMAZON® respond in turn, and to what net effect?
iv. Who will be the online leader? Will it ever make much money selling books (as opposed to selling stock)?
Please contrast the competitive positioning of a traditional, off-line, competitor like Barnes & Noble vs. an on-line channel like Amazon.com. With regard to question i., a customer willingness to pay for a product or a service is the maximum amount of money a customer is willing to part with in order to obtain a product or a service. The question is whether you find any significant difference in your willingness to pay for a book being acquired under these two different channels. In question ii. You might want to use the most recent data provided in Exhibit 4 (1996 for Barnes and Noble) and Exhibit 7 (F2001E for AMAZON®). Remember that Barnes & Noble provides 10% discount off list price, and AMAZON® provides 25%. The case is a good vehicle also to talk about the substitution threat Barnes & Noble and how it is responding against AMAZON®.
10 Putting it All Together: Integrating The Critical Tasks of Strategy Questions for Discussion
i. What is the role of the frameworks that we have discussed in the course (Porter, Resource-Based View for the Firm, and the Delta Model) in the definition of the critical strategic tasks?
ii. Be ready to discuss the issues that you face when implementing a business strategy.
IV. Corporate Strategy
11 Corporate Strategy - The Core Concepts Questions for Discussion
i. What are the central differences that exist between the development of a corporate and a business strategy?
ii. Should corporate strategy be formulated first and then followed by the development of the individual business strategies that are part of the corporate portfolio (a top-down approach), or should the business strategies be done first and then followed b the formulation of a corporate strategy (bottom-up approach)?
iii. Under which conditions do you favor one approach vs. another?
Be prepared to discuss each of the 10 corporate tasks described in the Hax and Majluf paper.
12 Corporate Philosophy and Culture Aguilar, Francis J., and Arvind Bhambri. "Johnson & Johnson (A)." Boston, MA: Harvard Business School Case 9-384-053, August 19, 1983.
Aguilar, Francis J., and Arvind Bhambri. "Johnson & Johnson (B): Hospital Services." Boston, MA: Harvard Business School Case 9-384-054, August 19, 1983.
Questions for Discussion
(Johnson & Johnson (A))
i. Comment on Johnson & Johnson (J&J) philosophy and culture. Are they overdoing their decentralization policy? What is your opinion about "The Credo?"
ii. How are strategic and operational responsibilities handled at J&J? Do you like their strategic planning process and their executive compensation?
(Johnson & Johnson (B): Hospital Services)
iii. By establishing the Hospital Services Group (HSG), J&J seems to be taking an action against the fiber of its decentralization philosophy and culture. Do you agree with that decision?
iv. Comment on the charter of HSG. How would you prevent possible conflicts between HSG and the J&J companies?
Although these cases on the surface are quite old, they address some very critical issues that have profound relevance in management regardless of time. The A case presents a company that is enormously consistent in terms of its culture, management processes, and philosophy. Decentralization is the trademark of that organization. Case B deeply challenges the effectiveness of this management structure. I have two very interesting tapes of Jim Burke, who was CEO of Johnson & Johnson at that time that I would like for you to see.
13 General Principles of Organization Design Questions for Discussion
i. What are the advantages and disadvantages of the three major organizational archetypes: functional, divisional, and holding organizational forms?
ii. How do you develop a properly balanced Back-End Front-End organizational form?
iii. How do you assume proper horizontal coordination across the individual organizational units?
14 Human Resources Management and Knowledge Management Bartlett, Christopher A. "McKinsey and Company: Managing Knowledge and Learning." Boston, MA: Harvard Business School Case 9-396-357. June 28, 1996
Questions for Discussion
i. How was the obscure little firm of "accounting and engineering advisors" able to grow into the world's most prestigious consulting firm fifty years later? What was the unique source of competitive advantage developed by James O. McKinsey and later Marvin Bower?
ii. How effective was Ron Daniel in leading McKinsey to respond to challenges identified in the Commission on Firm Aims and Goals? What contribution did Fred Gluck make to the required changes?
iii. Judging by the evidence in the three mini-cases of front-line activities in the mid-1990s, how effective has the firm been in its two-decade long change process?
What is your evaluation of Rajat Gupta's "four-pronged" approach to knowledge development and application within McKinsey? As a senior partner, what specific advice would you give him?
15 Business Processes: The Core Concepts and Managing the Global Supply Chain Yoshino, Michael Y., and Anthony St. George. "Li & Fung (A): Beyond 'Filling in the Mosaic' -- 1995-98." Boston, MA: Harvard Business School Case 9-398-092. January 05, 1998.
Questions for Discussion
i. How is Li and Fung able to maintain margins three times those of the rest of the industry? What are its specific strengths and how does it differ from more traditional competitors?
ii. What attributes of Chinese business culture does the company exhibit? Are these strengths for the company?
iii. What are the benefits of the Li and Fung matrix sourcing system?
iv. How does the venture capital group contribute to Li and Fung's growth? What are the challenges the company faces going ahead and what issues does it need to address in order to expand? How and where should it expand?
V. Aggregate and Granular Metrics
16 Metrics of Value Creation Questions for Discussion
i. Discuss the role of metrics that contribute to the economic value generated by a strategy.
17 The Balanced Scorecard and Granular Metrics Questions for Discussion
i. Make sure that you understand the role played by aggregate and granular metrics both in defining a strategy and in monitoring its execution.
VI. Integration
18 Organizational Leadership Bartlett, Christopher A., and Meg Wozny. "GE's Two-Decade Transformation: Jack Welch's Leadership." Boston, MA: Harvard Business School Case 9-399-150. April 28, 1999.
Questions for Discussion
i. How difficult a challenge did Welch face in 1981? How effectively did he take charge?
ii. What is Welch's objective in the series of initiatives he launched in the late 1980s and early 1990s? What is he trying to achieve in the round of changes he put in motion in that period? Is there a logic or rationale supporting the change process?
iii. How does such a large, complex diversified conglomerate defy the critics and continue to grow so profitably? Have Welch's various initiatives added value? If so, how?
iv. What is your evaluation of Welch's approach to leading change? How important is he to GE's success? What implications for his replacement?
Strategic Management II MIT Open Courseware 15.904
Course Description
This half-semester course is intended to be an extension of course 15.902, Strategic Management I, with the purpose of allowing the students to experience an in-depth application of the concepts and frameworks of strategic management. Throughout the course, Prof. Hax will discuss the appropriate methodologies, concepts, and tools pertinent to strategic analyses and will illustrate their use by discussing many applications in real-life settings, drawn from his own personal experiences.
Highlights of this Course
This course includes a full set of lecture notes, based on the two course textbooks. Both texts are co-authored by Professor Hax. Examples of student projects are also available in the assignments section.
Syllabus
Prerequisite
15.902, Strategic Management I
Broad Description of the Course
This course is intended to be an extension of course 15.902, Strategic Management I, with the purpose of allowing the students to experience an in-depth application of the concepts and frameworks of strategic management. Throughout the course, Professor Hax will discuss the appropriate methodologies, concepts, and tools pertinent to strategic analyses and will illustrate their use by discussing many applications in real-life settings, drawn from his own personal experiences.
Teaching Methodology
This course will use a combination of readings, case studies, lectures, and group research projects conducted by the students. The primary focus of the course will be on students working in teams to develop the strategic analysis of a business of their choice.
Required Textbooks
Hax, and Majluf. The Strategy Concept and Process: A Pragmatic Approach. 2nd ed. Prentice Hall, 1996.
Hax, and Wilde. The Delta Project: Discovering New Sources Of Profitability. Palgrave, 2001.
Readings from these books will be reassigned to allow for further more in-depth reflection on each relevant topic.
Package of additional readings might be distributed as the course progresses.
Requirements
The requirements are two-fold:
Group assignment for the development of a business strategy. The students will select their own groups, limited to at most 4 people per group, to develop a full business strategy. The students will present a written report. The report should address the following issues:
Executive Summary
Strategic Positioning of the Business
Customer Segmentation and Customer Value Proposition
Mission of the Business
Environmental Scan at the Business Level (Opportunities and Threats)
Internal Scrutiny at the Business Level (Strengths and Weaknesses)
Strategic Agenda of the Business
Customer Targeting
Operational Effectiveness
Innovation
Aggregate and Granular Metrics
Economic Evaluation of the Business Strategy
Conclusions
SES # TOPICS READINGS
1 The Frameworks of Strategic Management Revisited Hax, and Majluf, Chapters 1 and 2.
Hax, and Wilde, Chapter 1.
2 Customer Segmentation and Customer Value Proposition Hax, and Majluf, Chapters 3 and 4.
Hax, and Wilde, Chapters 2-5.
3 The Crafting of the Strategic Agenda Hax, and Majluf, Chapters 5-8.
Hax, and Wilde, Chapter 6.
4 Corporate Strategic Issues Hax, and Majluf, Chapters 9-17.
5 Customer Targeting Hax, and Wilde, Chapter 7.
6 Operational Effectiveness Hax, and Majluf, Chapter 21.
7 Strategy and Organizational Structure
Guest Lecturer: Hansjörg Wyss (Chairman and CEO, Synthes-Stratec)
8 Innovation Hax, and Majluf, Chapter 20.
9 Functional Strategies: The Case of Human Resources Management Hax, and Majluf, Chapters 18 and 19.
10 Aggregate and Granular Metrics Hax, and Wilde, Chapters 9 and 10.
11 Implementing Strategy
Guest Lecturer: Tom Stephens (Chairman, Unilever De México)
General References
Bartlett, C., and S. Ghoshal. Managing Across Borders: The Transnational Solution. Harvard Business School Press, 2002.
Brandenburger, A. M., and B. J. Nalebuff. Co-opetition. Doubleday, 1996.
Christensen, C. The Innovators Dilemma: When Technologies Cause Great Firms to Fail. Harvard Business School Press, 1997.
Collis, D., and C. Montgomery. Corporate Strategy: Resources and the Scope of the Firm. Irwin, 1997.
Cusumano, M. A., and C. C. Mardikes, eds. Strategic Thinking for the New Economy. Jossey Bass, 2001.
Foster, R., and S. Kaplan. Creative Destruction. Currency Doubleday, 2000.
Galbraith, J. Designing the Global Corporation. Jossey Bass, 2000.
———. Designing Organizations: An Executive Briefing on Strategy, Structure, and Process. Jossey Bass, 1995.
Ghemawat, P., D. Collis, G. Pisano, and J. Rivkin. Strategy and the Business Landscape. Prentice Hall, 2001.
Ghoshal, S., and C. A. Bartlett. The Individualized Corporation. HarperBusiness, 1997.
Goold, M., A. Campbell, and M. Alexander. Corporate-level Strategy: Creating Value in a Multibusiness Company. Wiley, 1994.
Grove, A. Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company and Career. Currency Doubleday, 1996.
Hamel, G. Leading the Revolution. Harvard Business School Press, 2000.
Hamel, G., and C. K. Prahalad. Competing for the Future. Harvard Business School Press, 1996.
Hayes, R., G. Pisano, and D. Upton. Strategic Operations: Competing through Capabilities. Free Press, 1996.
Kaplan, R. S., and R. Cooper. Cost and Effect. Harvard Business School Press, 1998.
Kaplan, R. S., and D. P. Norton. The Strategy-focused Organization. Harvard Business School Press, 2001.
Kotter, J. P. Leading Change. Harvard Business School Press, 1996.
McTaggart, J., P. Kontes, and M. Mankins. The Value Imperative: Managing for Superior Shareholder Returns. The Free Press, 1994.
Pfeffer, J. The Human Equation. Harvard Business School Press, 1998.
Porter, M. Competitive Advantage. Free Press, 1985.
———. The Competitive Advantage of Nations. Free Press, 1990.
Reichheld, F. Loyalty Rules. Harvard Business School Press, 2001.
Saloner, G., A. Shepard, and J. Podolny. Strategic Management. John Wiley, 2001.
Slywotzky, A. J., and D. J. Morrison. The Profit Zone. Times Business, 1997.
Ulrich, D. Human Resource Champions. Harvard Business School Press, 1997.
Utterback, J. Mastering the Dynamics of Innovation: How Companies Can Seize Opportunities in the Face of Technological Change. Harvard Business School Press, 1994.
Strategy and the Internet
Bovet, D., and J. Martha. Value Nets. Wiley, 2000.
Brynjolfsson, E., and G. Urban, eds. Strategies for e-Business Success. Jossey Bass, 2002.
Cusumano, M., and D. Yoffie. Competing on Internet Time. Touchstone, 2000.
Evans, P., and T. Wurster. Blown to Bits. Harvard Business School Press, 2000.
Kelly, K. New Rules for the New Economy. Viking, 1998.
Shapiro, C., and H. Varian. Information Rules. Harvard Business School Press, 1999.
Siebel, T. M. Taking Care of e-Business. Currency Doubleday, 2001.
Slywotsky, A., and D. Morrison. How Digital is Your Business. Crown Business, 2000.
Tapscott, D., D. Ticoll, and A. Lowy. Digital Capital. Harvard Business School Press, 2000.
Journals of Particular Relevance
California Management Review
Harvard Business Review
Sloan Management Review
Strategic Management Journal
Lecture Notes
Lecture notes for this course are listed below by topic.
The Five Frameworks for the Study of Strategy (PDF)
Business Strategy (PDF)
Customer Targeting (Marketing) Strategy (PDF)
Operational Effectiveness (Supply Chain) Strategy (PDF)
Innovation (Technology) Strategy (PDF)
Granular Metrics, Feedback and Experimentation (PDF)
Aggregate Metrics and the Balanced Scorecard (PDF)
http://dspace.mit.edu/html/1721.1/36362/15-904Fall-2003/OcwWeb/Sloan-School-of-Management/15-904Strategic-Management-IIFall2003/LectureNotes/index.htm
Examples of two group assignments:
Example 1 (PDF)
Example 2 (PDF)
http://dspace.mit.edu/html/1721.1/36362/15-904Fall-2003/OcwWeb/Sloan-School-of-Management/15-904Strategic-Management-IIFall2003/Assignments/index.htm
This half-semester course is intended to be an extension of course 15.902, Strategic Management I, with the purpose of allowing the students to experience an in-depth application of the concepts and frameworks of strategic management. Throughout the course, Prof. Hax will discuss the appropriate methodologies, concepts, and tools pertinent to strategic analyses and will illustrate their use by discussing many applications in real-life settings, drawn from his own personal experiences.
Highlights of this Course
This course includes a full set of lecture notes, based on the two course textbooks. Both texts are co-authored by Professor Hax. Examples of student projects are also available in the assignments section.
Syllabus
Prerequisite
15.902, Strategic Management I
Broad Description of the Course
This course is intended to be an extension of course 15.902, Strategic Management I, with the purpose of allowing the students to experience an in-depth application of the concepts and frameworks of strategic management. Throughout the course, Professor Hax will discuss the appropriate methodologies, concepts, and tools pertinent to strategic analyses and will illustrate their use by discussing many applications in real-life settings, drawn from his own personal experiences.
Teaching Methodology
This course will use a combination of readings, case studies, lectures, and group research projects conducted by the students. The primary focus of the course will be on students working in teams to develop the strategic analysis of a business of their choice.
Required Textbooks
Hax, and Majluf. The Strategy Concept and Process: A Pragmatic Approach. 2nd ed. Prentice Hall, 1996.
Hax, and Wilde. The Delta Project: Discovering New Sources Of Profitability. Palgrave, 2001.
Readings from these books will be reassigned to allow for further more in-depth reflection on each relevant topic.
Package of additional readings might be distributed as the course progresses.
Requirements
The requirements are two-fold:
Group assignment for the development of a business strategy. The students will select their own groups, limited to at most 4 people per group, to develop a full business strategy. The students will present a written report. The report should address the following issues:
Executive Summary
Strategic Positioning of the Business
Customer Segmentation and Customer Value Proposition
Mission of the Business
Environmental Scan at the Business Level (Opportunities and Threats)
Internal Scrutiny at the Business Level (Strengths and Weaknesses)
Strategic Agenda of the Business
Customer Targeting
Operational Effectiveness
Innovation
Aggregate and Granular Metrics
Economic Evaluation of the Business Strategy
Conclusions
SES # TOPICS READINGS
1 The Frameworks of Strategic Management Revisited Hax, and Majluf, Chapters 1 and 2.
Hax, and Wilde, Chapter 1.
2 Customer Segmentation and Customer Value Proposition Hax, and Majluf, Chapters 3 and 4.
Hax, and Wilde, Chapters 2-5.
3 The Crafting of the Strategic Agenda Hax, and Majluf, Chapters 5-8.
Hax, and Wilde, Chapter 6.
4 Corporate Strategic Issues Hax, and Majluf, Chapters 9-17.
5 Customer Targeting Hax, and Wilde, Chapter 7.
6 Operational Effectiveness Hax, and Majluf, Chapter 21.
7 Strategy and Organizational Structure
Guest Lecturer: Hansjörg Wyss (Chairman and CEO, Synthes-Stratec)
8 Innovation Hax, and Majluf, Chapter 20.
9 Functional Strategies: The Case of Human Resources Management Hax, and Majluf, Chapters 18 and 19.
10 Aggregate and Granular Metrics Hax, and Wilde, Chapters 9 and 10.
11 Implementing Strategy
Guest Lecturer: Tom Stephens (Chairman, Unilever De México)
General References
Bartlett, C., and S. Ghoshal. Managing Across Borders: The Transnational Solution. Harvard Business School Press, 2002.
Brandenburger, A. M., and B. J. Nalebuff. Co-opetition. Doubleday, 1996.
Christensen, C. The Innovators Dilemma: When Technologies Cause Great Firms to Fail. Harvard Business School Press, 1997.
Collis, D., and C. Montgomery. Corporate Strategy: Resources and the Scope of the Firm. Irwin, 1997.
Cusumano, M. A., and C. C. Mardikes, eds. Strategic Thinking for the New Economy. Jossey Bass, 2001.
Foster, R., and S. Kaplan. Creative Destruction. Currency Doubleday, 2000.
Galbraith, J. Designing the Global Corporation. Jossey Bass, 2000.
———. Designing Organizations: An Executive Briefing on Strategy, Structure, and Process. Jossey Bass, 1995.
Ghemawat, P., D. Collis, G. Pisano, and J. Rivkin. Strategy and the Business Landscape. Prentice Hall, 2001.
Ghoshal, S., and C. A. Bartlett. The Individualized Corporation. HarperBusiness, 1997.
Goold, M., A. Campbell, and M. Alexander. Corporate-level Strategy: Creating Value in a Multibusiness Company. Wiley, 1994.
Grove, A. Only the Paranoid Survive: How to Exploit the Crisis Points that Challenge Every Company and Career. Currency Doubleday, 1996.
Hamel, G. Leading the Revolution. Harvard Business School Press, 2000.
Hamel, G., and C. K. Prahalad. Competing for the Future. Harvard Business School Press, 1996.
Hayes, R., G. Pisano, and D. Upton. Strategic Operations: Competing through Capabilities. Free Press, 1996.
Kaplan, R. S., and R. Cooper. Cost and Effect. Harvard Business School Press, 1998.
Kaplan, R. S., and D. P. Norton. The Strategy-focused Organization. Harvard Business School Press, 2001.
Kotter, J. P. Leading Change. Harvard Business School Press, 1996.
McTaggart, J., P. Kontes, and M. Mankins. The Value Imperative: Managing for Superior Shareholder Returns. The Free Press, 1994.
Pfeffer, J. The Human Equation. Harvard Business School Press, 1998.
Porter, M. Competitive Advantage. Free Press, 1985.
———. The Competitive Advantage of Nations. Free Press, 1990.
Reichheld, F. Loyalty Rules. Harvard Business School Press, 2001.
Saloner, G., A. Shepard, and J. Podolny. Strategic Management. John Wiley, 2001.
Slywotzky, A. J., and D. J. Morrison. The Profit Zone. Times Business, 1997.
Ulrich, D. Human Resource Champions. Harvard Business School Press, 1997.
Utterback, J. Mastering the Dynamics of Innovation: How Companies Can Seize Opportunities in the Face of Technological Change. Harvard Business School Press, 1994.
Strategy and the Internet
Bovet, D., and J. Martha. Value Nets. Wiley, 2000.
Brynjolfsson, E., and G. Urban, eds. Strategies for e-Business Success. Jossey Bass, 2002.
Cusumano, M., and D. Yoffie. Competing on Internet Time. Touchstone, 2000.
Evans, P., and T. Wurster. Blown to Bits. Harvard Business School Press, 2000.
Kelly, K. New Rules for the New Economy. Viking, 1998.
Shapiro, C., and H. Varian. Information Rules. Harvard Business School Press, 1999.
Siebel, T. M. Taking Care of e-Business. Currency Doubleday, 2001.
Slywotsky, A., and D. Morrison. How Digital is Your Business. Crown Business, 2000.
Tapscott, D., D. Ticoll, and A. Lowy. Digital Capital. Harvard Business School Press, 2000.
Journals of Particular Relevance
California Management Review
Harvard Business Review
Sloan Management Review
Strategic Management Journal
Lecture Notes
Lecture notes for this course are listed below by topic.
The Five Frameworks for the Study of Strategy (PDF)
Business Strategy (PDF)
Customer Targeting (Marketing) Strategy (PDF)
Operational Effectiveness (Supply Chain) Strategy (PDF)
Innovation (Technology) Strategy (PDF)
Granular Metrics, Feedback and Experimentation (PDF)
Aggregate Metrics and the Balanced Scorecard (PDF)
http://dspace.mit.edu/html/1721.1/36362/15-904Fall-2003/OcwWeb/Sloan-School-of-Management/15-904Strategic-Management-IIFall2003/LectureNotes/index.htm
Examples of two group assignments:
Example 1 (PDF)
Example 2 (PDF)
http://dspace.mit.edu/html/1721.1/36362/15-904Fall-2003/OcwWeb/Sloan-School-of-Management/15-904Strategic-Management-IIFall2003/Assignments/index.htm
Tuesday, April 8, 2008
MIT Open Course on Strategy 15-928 Proseminar
Home > Courses > Sloan School of Management > Strategic Management and Consulting Proseminar
Strategic Management and Consulting Proseminar: Theoretical Foundations
Themes of the course are:
Theme 1. Restoring Credibility and Winning Stakeholders Trust.
Theme 2. Focus on Short-Term Efficiency - Cost Containment and Implementation.
Theme 3. Largest Destruction of Shareholder Value - How Could It Happen?
Theme 4. Structuring the Organization for Unstable Markets.
Theme 5. Motivating Employees in a Turbulent Environment - Becoming an Employer of Choice.
Theme 6. Globalization - The Question of Fairness.
Theme 1. Restoring Credibility and Winning Stakeholders Trust
The seemingly endless disclosures of lapses in the integrity in Corporate America have shaken the confidence in businesses and their financial reports. The major task is to enforce the principles of transparency and accountability involving every member of the corporate reporting supply chain: company executives, boards of directors, independent auditors, information distributors, third party analysts, investors, standard setters, and market regulators.
Robert Eccles (Founder and President of Advisory Capital Partners, and former Professor at Harvard Business School)
Paul Tellier (President and CEO, Bombardier)
Theme 2. Focus on Short-Term Efficiency - Cost Containment and Implementation
The economic downturn that we have experienced in the last year and a half has generated a concentration of attention on the bottom line and an emphasis on developing a lean and cost-efficient infrastructure, and a strong belief that execution is everything. The challenge is to address these short-term pressures in a way that we do not compromise the future of the organization.
James McTaggart (Founder and CEO, Marakon Associates)
Jürgen Weber (Chairman of the Executive Board, Lufthansa)
Theme 3. Largest Destruction of Shareholder Value - How Could It Happen?
As of September 30, 2002, the S&P 500 has fallen roughly 45% and NASDAQ has fallen 78% from their March 2000 highs. Countless technology and telecommunications companies have fallen 90+% or have disappeared. Something to the order of $7 trillion of equity value has evaporated over this period. The big question is why did this happen and are there any lessons to be drawn to prevent a similar occurrence in the future.
Stewart Myers (Gordon y Billard Professor, MIT Sloan)
Hans-Jörg Rudloff (Chairman of the Executive Committee, Barclays Capital)
Theme 4. Structuring the Organization for Unstable Markets
The greatest concerns are to assure business continuity, stabilization of earnings in volatile markets, disaster recovery, and mechanisms to successfully face disruptive technologies. These conditions require an organization with a continuous capacity for adaptation. We will explore what are the critical elements of such a structure.
Philip Evans (Senior Vice President, Boston Consulting Group)
Rudi Lamprecht (Member of the Managing Board, Siemens AG)
Theme 5. Motivating Employees in a turbulent Environment - Becoming an Employer of Choice
In these difficult economic times, it has become even more critical to attract, satisfy, and retain the top talent.
Gary Cowger (President, GM North America)
Christopher Bartlett (Thomas D. Casserly, Jr. Professor of Business Administration, Harvard Business School)
Theme 6. Globalization - The Question of Fairness
Globalization has both strong supporters and detractors. There are those that advocate globalization as a powerful means to bring more prosperity and democracy into the world. The detractors argue that the rewards of globalization are spread unequally and inequitably both among citizens of a given country and across countries in the world community. How can we shape the direction of globalization in a just and equitable way?
Philip Khoury (Dean, School of Humanities, M.I.T.)
Dale Laurance (President, Occidental Petroleum)
http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-928Strategic-Management-and-Consulting-Proseminar--Theoretical-FoundationsSpring2003/StudyMaterials/index.htm
Study Materials of the course
Course Summary, Prepared by Students (PDF)
Book Summary by Professor Arnoldo Hax (PDF)
http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-928Strategic-Management-and-Consulting-Proseminar--Theoretical-FoundationsSpring2003/LectureNotes/
Lecture Notes
The following strategic questions are based on discussions by guest lecturers:
Strategic Questions from Lecture 1: Guest Lecturer Rudi Lamprecht, Siemens AG (PDF)
Strategic Questions from Lecture 2: Guest Lecturer Philip Evans, BCG (PDF)
Strategic Questions from Lecture 3: Strategic Questions from Dr. Dale Laurance, Occidental Petroleum (PDF)
Strategic Questions from Lecture 4: Strategic Questions from Philip Khoury, Kenan Sahin Dean of the School of Humanities, Arts, and Social Sciences (PDF)
Strategic Questions from Lecture 5: Strategic Questions from Stewart Myers, Gordon y Billard Professor of Finance (PDF)
Strategic Questions from Lecture 6: Strategic Questions from Hans-Joerg Rudloff, Chairman of the Executive Committee, Barclays Capital (PDF)
Strategic Questions from Lecture 7: Strategic Questions from Jurgen Weber, Chairman of Executive Board, Lufthansa (PDF)
Strategic Questions from Lecture 8: Strategic Questions from Jim McTaggart, Co-Chairman and Co-Founder, Marakon Associates (PDF)
Strategic Questions from Lecture 9: Strategic Questions from Gary Cowger, President of General Motors – North America (PDF)
Strategic Questions from Lecture 10: Strategic Questions from Professor Christopher Bartlett, Harvard Business School (PDF)
Strategic Questions from Lecture 11: Strategic Questions from Bob Eccles, Founder and president of Advisory Capital Partners, former HBS Professor (PDF)
Strategic Questions from Lecture 12: Strategic Questions from Michael Armstrong, Chairman of Comcast Corp. (PDF)
Strategic Management and Consulting Proseminar: Theoretical Foundations
Themes of the course are:
Theme 1. Restoring Credibility and Winning Stakeholders Trust.
Theme 2. Focus on Short-Term Efficiency - Cost Containment and Implementation.
Theme 3. Largest Destruction of Shareholder Value - How Could It Happen?
Theme 4. Structuring the Organization for Unstable Markets.
Theme 5. Motivating Employees in a Turbulent Environment - Becoming an Employer of Choice.
Theme 6. Globalization - The Question of Fairness.
Theme 1. Restoring Credibility and Winning Stakeholders Trust
The seemingly endless disclosures of lapses in the integrity in Corporate America have shaken the confidence in businesses and their financial reports. The major task is to enforce the principles of transparency and accountability involving every member of the corporate reporting supply chain: company executives, boards of directors, independent auditors, information distributors, third party analysts, investors, standard setters, and market regulators.
Robert Eccles (Founder and President of Advisory Capital Partners, and former Professor at Harvard Business School)
Paul Tellier (President and CEO, Bombardier)
Theme 2. Focus on Short-Term Efficiency - Cost Containment and Implementation
The economic downturn that we have experienced in the last year and a half has generated a concentration of attention on the bottom line and an emphasis on developing a lean and cost-efficient infrastructure, and a strong belief that execution is everything. The challenge is to address these short-term pressures in a way that we do not compromise the future of the organization.
James McTaggart (Founder and CEO, Marakon Associates)
Jürgen Weber (Chairman of the Executive Board, Lufthansa)
Theme 3. Largest Destruction of Shareholder Value - How Could It Happen?
As of September 30, 2002, the S&P 500 has fallen roughly 45% and NASDAQ has fallen 78% from their March 2000 highs. Countless technology and telecommunications companies have fallen 90+% or have disappeared. Something to the order of $7 trillion of equity value has evaporated over this period. The big question is why did this happen and are there any lessons to be drawn to prevent a similar occurrence in the future.
Stewart Myers (Gordon y Billard Professor, MIT Sloan)
Hans-Jörg Rudloff (Chairman of the Executive Committee, Barclays Capital)
Theme 4. Structuring the Organization for Unstable Markets
The greatest concerns are to assure business continuity, stabilization of earnings in volatile markets, disaster recovery, and mechanisms to successfully face disruptive technologies. These conditions require an organization with a continuous capacity for adaptation. We will explore what are the critical elements of such a structure.
Philip Evans (Senior Vice President, Boston Consulting Group)
Rudi Lamprecht (Member of the Managing Board, Siemens AG)
Theme 5. Motivating Employees in a turbulent Environment - Becoming an Employer of Choice
In these difficult economic times, it has become even more critical to attract, satisfy, and retain the top talent.
Gary Cowger (President, GM North America)
Christopher Bartlett (Thomas D. Casserly, Jr. Professor of Business Administration, Harvard Business School)
Theme 6. Globalization - The Question of Fairness
Globalization has both strong supporters and detractors. There are those that advocate globalization as a powerful means to bring more prosperity and democracy into the world. The detractors argue that the rewards of globalization are spread unequally and inequitably both among citizens of a given country and across countries in the world community. How can we shape the direction of globalization in a just and equitable way?
Philip Khoury (Dean, School of Humanities, M.I.T.)
Dale Laurance (President, Occidental Petroleum)
http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-928Strategic-Management-and-Consulting-Proseminar--Theoretical-FoundationsSpring2003/StudyMaterials/index.htm
Study Materials of the course
Course Summary, Prepared by Students (PDF)
Book Summary by Professor Arnoldo Hax (PDF)
http://ocw.mit.edu/OcwWeb/Sloan-School-of-Management/15-928Strategic-Management-and-Consulting-Proseminar--Theoretical-FoundationsSpring2003/LectureNotes/
Lecture Notes
The following strategic questions are based on discussions by guest lecturers:
Strategic Questions from Lecture 1: Guest Lecturer Rudi Lamprecht, Siemens AG (PDF)
Strategic Questions from Lecture 2: Guest Lecturer Philip Evans, BCG (PDF)
Strategic Questions from Lecture 3: Strategic Questions from Dr. Dale Laurance, Occidental Petroleum (PDF)
Strategic Questions from Lecture 4: Strategic Questions from Philip Khoury, Kenan Sahin Dean of the School of Humanities, Arts, and Social Sciences (PDF)
Strategic Questions from Lecture 5: Strategic Questions from Stewart Myers, Gordon y Billard Professor of Finance (PDF)
Strategic Questions from Lecture 6: Strategic Questions from Hans-Joerg Rudloff, Chairman of the Executive Committee, Barclays Capital (PDF)
Strategic Questions from Lecture 7: Strategic Questions from Jurgen Weber, Chairman of Executive Board, Lufthansa (PDF)
Strategic Questions from Lecture 8: Strategic Questions from Jim McTaggart, Co-Chairman and Co-Founder, Marakon Associates (PDF)
Strategic Questions from Lecture 9: Strategic Questions from Gary Cowger, President of General Motors – North America (PDF)
Strategic Questions from Lecture 10: Strategic Questions from Professor Christopher Bartlett, Harvard Business School (PDF)
Strategic Questions from Lecture 11: Strategic Questions from Bob Eccles, Founder and president of Advisory Capital Partners, former HBS Professor (PDF)
Strategic Questions from Lecture 12: Strategic Questions from Michael Armstrong, Chairman of Comcast Corp. (PDF)
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