Strategic Management I (21855)
Degree/study: degree in Business Sciences
Year: 2nd
Term: 3rd
Number of ECTS credits: 5 credits
Hours of studi dedication: 125 hours
Teaching language or languages: Spanish, English
Teaching Staff: Yuliya Snihur, Jose Lejarraga
1. Presentation of the subject
Strategy involves the coordination and integration of the efforts within the different functional areas of an organization for dealing with an uncertain future. This comprises formulating a business strategy for each individual unit of the firm, formulating a corporate strategy, and implementing these strategies. Strategy formulation involves understanding the business the firm is in, determining how to position the strategic unit within this business environment, and developing the capabilities to compete, but also to cooperate, in this environment. Therefore, strategy at the same time coordinates and integrates the individual functional strategies such as manufacturing, marketing, sales, and finance.
2. Competences to be attained
Thinking strategically is a difficult skill to master. The objective of this course is to push the students to think strategically in different situations. The course introduces the students to a coherent framework of value creation and value capture and develops related concepts that are used to analyze the competitive environment of a firm and its internal strengths and weaknesses. We expect the students to be able to deal with the basic strategy concepts introduced. The ultimate objective is to formulate a strategy for a business that will shape the future environment of the firm and will aid the firm with its strategic decision-making in this future.
Students will learn to perform an industry analysis, to identify changes in industry evolution, and to identify the circumstances in which a firm can create a competitive advantage. Students are expected to improve their ability to analyze real business situations, to master the strategic vocabulary in English, as well as to practice their communication, writing, and oral presentation skills during various class activities and discussions.
The course is organized with a combination of theory, case discussion, and group presentations. The tentative outline follows, although we might be discussing other issues as they come up at the teacher's discretion.
3. Contents
I. Introduction
The purpose is to become familiar with a number of strategy concepts as well as to see how business strategy fits with broader dynamics in the society. We will also start the discussion about business sustainability and the potential limits to economic growth that will be continued through different parts of the course.
II. Industry value system
We focus on how the industry and the environment affect the performance of an individual business. The industry will shape the environment, determining the initial conditions within which the business will compete. Understanding the pressures of industry characteristics on the income statement of the business is a first step in formulating a strategy that attempts to isolate the business from these pressures in the future.
III. Competitive strategy: The building blocks
Here we take a closer look at the business itself. We define the competitive position of a firm, analyze its activities and capabilities and determine which combinations of positioning, activities and capabilities result in a sustainable competitive advantage.
IV. Competitive dynamics
In this module, we turn our attention to the dynamic aspects of strategy formulation and specifically competitive interaction. Understanding competitors' moves and reacting appropriately is important. However, making strategic decisions and anticipating competitors' reactions is crucial for the viability of the business. Finally, strategic thinking does not exclude cooperation, and shared value creation is the long-term goal for sustainable business models.
V. Contemporary challenges in strategy
Change and uncertainty are always present when formulating a business strategy. In this module we explicitly discuss how some current challenges such as innovation, globalization, issues of sustainable business development, stakeholder value sharing, and corporate business responsibility affect the competitive strategy formulation today.
4. Assessment
A series of deliverables is assigned to develop different skills:
- Class participation
Strategic thinking is best learned through practice and use of strategic concepts. The cases we will study are about specific business situations; they are an opportunity to both apply the concepts we discuss in class as well as further develop our ability to think about competitive strategy. Discussions are an important part of the course, which makes it imperative that everyone attempts to regularly contribute to class discussions. The grade will be based on such measures as the quality (not the quantity) of student contributions during both theory and seminar classes, attendance, and punctuality. Please inform the professor before class if unable to attend and the reasons for the absence. Class participation will contribute 10% to the final grade.
- Theory group presentation
Students will be assigned to a group to do a presentation during one of the theory classes. Every group will make a presentation to the class on an assigned topic. Students will be assigned a general topic, and a more specific question to guide the preparation. The goals are to apply strategic principles learned in class to a real problem and hone communication skills. The day of class before presentation please send by email a 2-page report addressing the specific presentation question. Presentations should last 15 minutes, and students should prepare questions to generate class discussion for another 15 minutes afterwards. Theory presentation will contribute 10% to the final grade. Presentations (including discussion) will be judged by 3 criteria:
1. Informativeness - how much did we learn from the presentation? How much debate did the presentation generate?
2. Analysis - application of insights from the class, evidence used to support argument, novel insights.
3. Style - clarity, slide quality etc.
Please feel free to consult with the professor beforehand for further readings if you require guidance in preparing your presentation.
- Seminar group presentation
Students will be assigned to another group with whom they will work to do a presentation and reports for the seminar classes. During every seminar we will analyze in depth a specific case that students will receive to read beforehand. We will have 6 seminars, during which students will have to write 6 reports and present one case. Students will be assigned a specific question to guide the preparation and reports. The goals are to analyze a real problem in further depth, based on more quantitative information available in each case. Seminar presentation will contribute 10% to the final grade. Presentations should last 15 minutes and will be judged by 3 criteria:
1. Informativeness - how well did students understand the case?
2. Analysis - application of insights from the class, evidence used to support argument, novel insights and use of information provided in the case.
3. Style - clarity, slide quality etc.
- Seminar case reports
We will have 6 seminars during which we will discuss more complex and realistic assignments based on case studies that use and extend the principles and tools developed in class. Each case is to be read and analyzed individually as seminars will be based on discussions of details provided in the case. Students will have to prepare a specific report addressing questions that will be distributed in due time for each seminar. The case reports are to be sent by email the day of class before the seminar. The discussion questions included for each case should provide the framework within which the case is to be analyzed. This does not preclude the inclusion of additional issues that a group wishes to discuss, but the questions provided should be answered. In the write-ups, be sure to combine the analysis of the case with the conceptual material in the course. The write-up should be based on quantitative and qualitative information from the case.
Students can structure the report in any way they like, as long as the reader can understand what their thoughts about the case were (arguments, conclusions, and recommendations) and what their answers to the questions asked are. Many teams find answering the questions one by one an effective way to structure their thoughts. The report will be graded on use of concepts covered in class, convincing arguments, and style:
1. Use of concepts
To communicate effectively, students must use the right concepts and in the right way. If not sure of the definition of a certain concept, find it online or look it up in the index of Grant's book. Using the wrong concepts or using them incorrectly always leads to confusion, which seriously hurts the report grade.
2. Convincing argument
To make a convincing report, students must analyze the case facts, put them into perspective, write down the argument explicitly ("A will lead to B"), use case facts to support the arguments, and come to a conclusion.
3. Style
The team case reports should be a minimum of 2 typed double-spaced pages. This does not count supplementary exhibits, figures, or tables that can be appended to the text. The title page should include team number and names. Number pages. This is a business style report. It is good to be to the point. Avoid prose.
For one seminar out of six, students will have to present the case and also hand in the report (see above). Each report will contribute 5% to the final grade, or a total of 30% for 6 reports.
- Final exam
Final exam will be used as an individual evaluation of the knowledge acquired in this class and will contribute 40% to the final grade.
The course grade will be determined based on student contributions to all of these deliverables, weighted as follows:
Individual class participation: 10
Theory presentation: 10%
Seminar presentation: 10%
Case reports (6): 30%
Final Exam: 40%
In September, the mark will be granted on the basis of:
Individual class participation: 5%
Presentations: 10%
Case reports: 10%
September exam: 75%
The September overall grade will keep the grades obtained along the trimester in participation, presentations and case projects.
Notes:
The failure to attend exams, present assignments or any other of the grading criteria without justified and properly accredited cause entails that "0" points will be given for that criterion. The failure to attend the final exam, without justified and properly accredited cause, entails a final mark of "0" points.
5. Bibliography and teaching resources
Our class will loosely follow the following textbook:
• Contemporary Strategy Analysis, by R. M. Grant, 6th Edition, Blackwell Publishing, 2008.
Further references include:
• Regular reading of The Economist magazine
• David Besanko, David Dranove, Mark Shanley and Scott Schaefer, Economics of Strategy, Fourth Edition, 2007. Wiley.
• Strategy and the Business Landscape, by Pankaj Ghemawat, 3rd Edition, Prentice Hall, 2009.
• Porter, Michael: Competitive Strategy, The Free Press, 1980.
• Porter, Michael: Competitive Advantage, The Free Press, 1985.
6. Planning of activities
|
Session |
Date |
Chapter |
Class Topic |
|
Theory 1 |
5-Apr |
Introduction |
Introduction |
|
Theory 2 |
6-Apr |
Industry Value System |
Five forces |
|
Theory 3 |
12-Apr |
Industry structure |
|
|
Theory 4 |
13-Apr |
Building Blocks |
Resources and capabilities |
|
Theory 5 |
26-Apr |
Economies of scale and scope |
|
|
Theory 6 |
27-Apr |
Vertical integration |
|
|
Seminar 1 |
28-29/4 |
Cola Wars |
|
|
Theory 7 |
3-May |
Competitive advantage: Cost |
|
|
Theory 8 |
4-May |
Competitive advantage: Differentiation |
|
|
Theory 9 |
11-May |
Competitive Dynamics |
Game theory |
|
Seminar 2 |
12-13/5 |
Bird's Eye |
|
|
Theory 10 |
17-May |
Commitment |
|
|
Theory 11 |
18-May |
Industry evolution |
|
|
Seminar 3 |
19-20/5 |
Ryan Air |
|
|
Theory 12 |
25-May |
Contemporary Challenges |
Innovation |
|
Seminar 4 |
26-27/5 |
Ducati |
|
|
Theory 13 |
31-May |
Innovation through business models |
|
|
Theory 14 |
1-Jun |
Network effects |
|
|
Seminar 5 |
2-3/6 |
Apple |
|
|
Theory 15 |
8-Jun |
Globalization 1 |
|
|
Seminar 6 |
9-10/6 |
Patagonia |
|
|
Theory 16 |
15-Jun |
Globalization 2 |