STRATEGIC MANAGEMENT

Fall Semester, 1995

INSTRUCTOR: Ken G. Smith, Professor

PHONE: 405-2250

OFFICE: RM 3349 Van Muching Hall

OFFICE HOURS: 1:00-2:00 PM Tuesday and Thursday

THE COURSE: Strategic management is an integrative course where students study and experience problems associated with top management and the total organization. It is a course where students bring together all of their learned functional skills (accounting, finance, marketing etc.) and utilize them to study full-blown organizational problems (as opposed to functional problems). The course achieves integration by considering the question: How do companies build and sustain competitive advantage?

THE OBJECTIVE: The objectives of Strategic Management 690 are:

• To familiarize students with the current literature and theories of Strategic Management, including such topics as value chain analysis, industry analysis, and competitor analysis.

• To introduce students of business to the perplexities of multi-functional organizational problems.

• To facilitate the development of a personalized approach to the analysis of multi-functional organizational problems.

• To acquaint students with the idiosyncrasies of top management as opposed to functional management.

• To actively involve students in the exploration of current ideas, issues, problems and techniques particularly associated with top management and the total organization.

• To improve, sharpen and practice report writing and presentation skills.

THE METHODOLOGY: Procedures to accomplish these objectives include: readings, cases, mini-lectures, video tapes, class discussions, written reports, peer evaluations and a case competition.

CASES AND READINGS: (1) a packet of Harvard Business School Cases available at the campus book store (referred to HBSC); and (2) a handout of readings (referred to as HANDOUT). RECOMMENDED BUT NOT REQUIRED: Porter, Competitive Strategy, The Free Press, NY, NY, 1980 (referred to as Porter);

GRADING:

Groups

Case Report 20%

Case Competition 20%

Presentations 10%

Individual

Case Reports 30%

Participation 20%

Peer evaluation will be used in final grade determination

GROUP REPORTS: Students will organize into four person teams. In forming teams please consider the expertise of team members across functional areas (e.g., accountant/ finance, marketing, human resource, etc.). Note that these groups will stay together for the entire semester and participate as a group in the case competition. Each group will submit one case report during the course of the semester (20% of grade) and also participate in the case competition (20% of grade). The first group case report on Cramer Electronics is due on October 2, 1995.

INDIVIDUAL/GROUP REPORTS: Groups will also submit 4 other written case reports at scheduled times throughout the semester (see schedule for exact dates of individual reports 1-4). However, for these 4 reports, each individual within the group will have an opportunity to act as lead person and only that person will receive the grade for the report (30% of grade). The format for the first group report and the individual reports may be different. It is expected that these reports will be the product of a group effort (over the years, I have found that groups do much better than individuals). Students, through a process of peer evaluation will have an opportunity to evaluate individual group member's contribution to all of the projects.

The semester will conclude with a formal case competition. Teams should use the first five written reports (the first group report plus the four individual/group reports) to prepare for the case competition, which begins on December 4, 1995 (see details on page 3).

GROUP PRESENTATIONS: Each group will make a formal presentation to the class accounting for 10% of the total grade (one grade will be assigned to each group presentation). This presentation should be no more than 15 minutes in length, be well-rehearsed, and accompanied by visual aids. The presentation should reflect the arguments presented in the written case report due that day. Presentation dates will coincide with the due dates of the individual reports (1-4). Specific criterion for evaluation will be provided.

PARTICIPATION: 20% of your grade is participation. Strategic management is a course where students can bring together all their functional skills, and display and practice them in an atmosphere that is far more forgiving than the real world (although you may think otherwise). It is critical (to the success of this case course) and urgent (since you will graduate soon) that you take advantage of this opportunity to gauge your skills. To do this you must participate. Contrary to other courses, solutions to strategic management problems can be varied, with no real right or wrong answer. Often the best solution only becomes apparent over time. For this reason, a student's fear of being wrong should not be a consideration to his/her participation. Thus, for the course to be useful to you it is essential that you come to each class well-prepared to discuss your analysis of the assigned case. Because your participation is so vital to the success of the class as a whole, daily participation grades will be recorded.

Grades for class participation will depend on both the quality and the frequency of participation. Quality is much more important than frequency but a person with frequent high quality participation will merit a better grade than one with occasional high quality participation. Grades will be assigned each class based on:

• Student shows evidence of careful case analysis by using facts and evidence from the case to make arguments, as appropriate;

• Student’s participation fits in with the flow of class discussion and demonstrates that they have been listening to and reacting to others’ points of view;

• Student is able to influence the class to consider important avenues that it has neglected;

• Student is able to engage constructively in debating points with other students;

• Student presents recommendations justified by their analysis and/or by the discussion in the class.

Less value is placed on participation that repeats case facts without analysis (history) or that disrupts the flow of the class discussion without good reason. Students who attend class but do not participate in the class discussion should not expect to receive a passing grade in the course.

ATTENDANCE IS MANDATORY: I expect you to attend all scheduled classes and to arrive on time for each class. If you are going to be late for class or must leave early please contact me before class. You may occasionally attend my other section if you have scheduling conflicts

WRITTEN ASSIGNMENT POLICY: All written assignments must be typed and handed in on schedule. Late assignments will drop a letter grade for every day they are late.

1995 MBA CASE COMPETITION

The primary purpose of the University of Maryland MBA Case Competition is to refine and develop the skills of MBA students in industry analysis and strategic decision making. The competition takes place among teams of four students each and consists of two rounds.

In the first round, every team will receive a case at 9:00 AM on Monday, December 4, 1995 and is required to submit a 7-page (maximum) written proposed action plan for the company by 12:00 PM (noon), Wednesday, December 6, 1995. On Thursday, December 7, 1995, each team will give a 15 minute oral presentation on its proposed action plan and the underlying analysis to a panel of judges acting as a board of directors.

Based on the judges' evaluation of the written report and oral presentation, four teams will be selected to participate in the final round of competition scheduled Friday, December 8, 1995. The teams will present the same plan as in the first round to a different panel of judges. Following the presentations, a reception will be held for all Bmgt 690 students, guests, presenters, College faculty, and case competition judges.

Key Case Competition Dates

September 20, 1995 Team Selection Complete

December 4, 1995 Cases distributed 9:00 AM

December 6, 1995 Written reports due 12:00 PM (noon)

December 7, 1995 First round presentations

December 8, 1995 Final round presentations

 

A case is a slice of life, and should set forth in a factual manner the conditions and circumstances surrounding a particular managerial situation or series of events in an organization. A good case offers as live and practical a situation as can be conceived short of the real thing. In most cases, the presentations are from actual real life situations. Therefore the case puts you at the scene of the action, and it asks what you would do if confronted with the same circumstances. A case allows the novice to learn by doing, but without having to live with the real world consequences of actions.

Since class discussion emphasizes your participation, it is obvious that the effectiveness of the class depends upon your preparation beforehand. You will not get much out of this class unless you invest the time and effort to prepare cases before class.

In preparing a case for class discussion, or written analysis (a formal outline will be provided), you should immerse yourself in the buzzing world of facts, numbers, values, and feelings which are depicted in this slice of life. For this, you must methodically organize and diagnose the situation. This is a lot easier said than done given the complexity of the typical strategic management case. The following approach is recommended.

1. Read the case four to seven days beforehand. Try to get the general flavor of the case, areas of importance, relationships to readings, and to get a feel for what kind of research is necessary. Also, try to get a feel for the type of analysis which is required. Ultimately, you must play the role of top management in the case and get attuned to the organizational environment within which decisions must be made. Needless to say, you cannot devise sensible solutions to total organizational problems without a complete grasp of the organization's situation.
2. Reread the case 2-4 days before class. In general, the financial position of the organization must be scrutinized closely (e.g., ratio analysis), the external opportunities (e.g., new markets) and threats (e.g., strong competitors) will need to identified and prioritized. Similarly, the internal resources of the organization will have to be identified and evaluated (e.g., human resources or technological resources, etc.). Within this context you must predict what the future will hold (that is, not only must you assess the organization at one point in time but you must anticipate the future) and this includes the actions and reactions of competitors and other stakeholders. It is critical that you pinpoint the determining elements of success and failure. Most importantly, be prepared to support your decisions, actions, findings, and conclusions with facts found from research or data provided in the case (your opinions are important but they should be driven by the facts).
3. I highly recommend the use of study groups that meet the day before class to discuss the readings and cases. The purpose of the readings is to help you understand and make better informed decisions about issues raised in the cases. A well-managed study group is an efficient and effective way to make your final preparations for class discussion.

BMGT 690 SCHEDULE FALL 1995

CASE STUDY QUESTIONS FOR EMCO

1. What, historically, have been EMCO's core competencies?

2. How should EMCO reposition itself to exploit these competencies?

 

CASE STUDY QUESTIONS FOR WAL-MART

1. What, historically, has been Wal-Mart's key sources of competitive advantage in discount retailing?

2. How sustainable is Wal-Mart's competitive advantage in discount retailing in 1986?

3. Will Sam's Wholesale Clubs prove as big a success for Wal-Mart as its discount stores?

CASE STUDY QUESTION FOR ELECTRONIC COMPONENT INDUSTRY

1. What is the profit potential of the electronic component distribution industry (use the five forces)?

CASE STUDY QUESTIONS FOR CRAMER

1. What is Creamer’s strategy for competing in its fragmented industry? What assumptions are implicit in Cramer's strategy?

2. What strategic adjustments would you recommend? HINT: DO NOT BET THE FUTURE OF THE COMPANY ON THE INFORMATION PROCESSESING SYSTEM. IT IS A NON FACTOR!

CASE STUDY QUESTIONS FOR COCA-COLA VS. PEPSI

1. What is the profit potential of the soft drink industry?

2. How is the soft drink industry structure changing and what are the implications of these changes for industry profitability?

 

CASE STUDY QUESTIONS FOR COCA-COLA VS. PEPSI

1. What were the different competitive moves that Coca Cola and Pepsi-Cola were taking in the 1950s and 1960s? What are the different moves in the 1970s and 1980s?

2. How has industry rivalry changed?

CASE STUDY QUESTIONS FOR PET FOOD INDUSTRY

1. Who is best positioned in the pet food industry in 1986? Why?

2. What should Ralston Purina do?

3. Who do you predict will bid for Anderson-Clayton? Why?

CASE STUDY QUESTIONS THE CHAIN SAW INDUSTRY IN 1974

1. What key changes are occurring in the industry and what is their significance?

2. What should McCulloch Corporation's five year strategic plan be?

CASE STUDY QUESTIONS FOR MARINE SUPPLY COMPANY

1. Evaluate Marine Supply Company as an acquisition candidate? Did DeStefano pay too much?

2. Evaluate DeStefano's strategy for Marine Supply Company.

What mistakes did he make? What strategic changes do you recommend?

CASE STUDY QUESTIONS FOR COMPUSERVE (A)

1. What are the strategic issues facing Jeff Wilkins and his management in the spring of 1984?

2. How are these reflected in the preliminary requests for capital and operating budgets?

3. How would you advise Wilkins and McCall to resolve the shortfall between requested and available funds?

4. What changes, if any, would you suggest be made in the resource allocation process at CompuServe?

CASE STUDY QUESTIONS FOR EXECUTIVE INFORMATION SYSTEMS, INC.

1. What is Executive’s competitive advantage in 1993? What are its profits disappointing?

2. What are Executone’s financial and non-financial goals? How have they changed since the formation of the company in 1988?

3. What mid-course adjustments should Kessman make? Should he make a major adjustment in Executone’s strategy?

 

CASE STUDY QUESTIONS FOR PHILLLIPS

1. What are the key opportunities and problems that Cor van der Klugt should address?

2. Evaluate the actions that he has taken.

3. What specific actions should van der Klugt take as of June 1987? (For each major initiative, consider the likely organizational resistance, timing, and priority).

CASE STUDY QUESTIONS FOR MOTOROLA AND JAPAN

1. What is Motorola’s problem in 1982?

2. What are Motorola’s options?

3. What would you recommend Motorola do?

Week 14

December 4-8 CASE COMPETITION