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BUSINESS STRATEGY 30012

Professor David Bardolet


Office: Via Roentgen 1, 4th Floor, room B2-01 david.bardolet@unibocconi.it Office Hours: Friday 12-1pm

Professor Elisabetta Marafioti


Office: Via Roentgen 1, 4th Floor, room A4-03 elisabetta.marafioti@unibocconi.it Office Hours: check the instructors webpage

Course description The focus of this course is on how general managers enhance and sustain business performance by implementing some kind of long-term strategy. The course covers analytical and conceptual tools that are meant to be aids to the development of judgment. Its fundamental focus, however, is not on tools, but on sharpening skills at developing robust judgments in the face of uncertainty and complexity. The central concept of this course is that of strategy. Definitions abound, but they all share some sense of the allocation of critical resources over relatively long periods of time in pursuit of specific goals and objectives. Sustained performance, we shall discover, depends not simply upon choosing the right strategy, but also upon the processes by which strategy is implemented/executed within the organization. The subject matter of strategy is complex and multidisciplinary. As a student, you should feel free to make active use of skills and tools covered in Marketing, Finance, Accounting, Statistics, and other courses.

Case discussions Good judgment about complex general management situations is developed by studying the judgments of successful managers and by practice in making judgments. Accordingly, the course relies heavily on case materials and the analysis and discussion of different case situations is the primary activity in class. Therefore, you will get little from this course unless you take considerable responsibility for your own learning. This means devoting time and energy to preparation before class and then, during the class, listening carefully to others and being willing to present and defend your own point of view. Key to good student learning in a case course is excellent student preparation of the case prior to coming to class. This means not just reading the case, but analyzing the central issues raised in it and developing a well-thought-out position on these issues that the student is able to articulate and explain to others during the class meeting. Thorough student preparation allows the student to learn more from the case and the classroom experience by increasing the students involvement with the material and his or her ability to understand new ideas that are presented. In preparing a case for class discussion, you should read the case at least twice. The first reading provides you with a general sense of the "story" and of the types of information available. On the second reading, you should start to carefully take notes, sorting information into categories, and writing down answers to the study questions and asking new questions of your own. You may find it useful to undertake specific analyses (e.g., time-line of events, personnel profiles, funds-flow patterns, cost analysis, market segment analyses, demand driver analyses, industry structure analyses, etc.) The well-

prepared student comes to class with a written outline of how he or she would answer each of the study questions associated with the days case. Writing down your responses to the study questions imposes a valuable discipline on ones own thought processes, as it forces a level of specificity and clarity, and hence of case preparation, that otherwise might be absent. Good case discussions take the group farther than any one individual or study group was able to go on their own.

Course text There is no officially assigned book for this course, as we will rely heavily on case studies and discussions. However, most of the concepts developed in class can be found in basic strategy textbooks. A good introduction to business strategy is Contemporary Strategy Analysis, by Robert Grant, Ed. Wiley, (8th edition).

Evaluation and Grades Students will be evaluated on class participation, pair assignments and a final exam (NOTE: there will be no partial exam). The final grade will weight these three areas in the following way. Final Exam Pair Assignments Class Participation 60% 25% 15%

Pair Assignments Each student is expected to hand-in TWO pair assignments during the course. You should pick two case studies from the ones we will discuss in class and BEFORE the discussion of each case, hand in a 2-page report answering the study questions for that case. The first assignment should be handed in before October 17th and the second one before December 5th.

Final Exam The final exam will consist on the analysis of a case study, in a manner similar to what we will do in class. Note: Universit Bocconi conceives of education as an ongoing process that stretches across a persons entire professional life. The University hopes that the entire Bocconi community will respect the values of fairness and correctness associated with it, values which inspire and guide the conduct of all community members as they pursue common objectives and a shared mission. The Universit Bocconi Honor Code is published at http:// www.unibocconi.eu/honorcode . We encourage all students to read it.

SESSION DESCRIPTIONS AND STUDY QUESTIONS Session 1: 10 September 2013, room N30
Introduction to the Course and Lecture: What is Strategy?

Session 2: 12 September 2013, room N35


Case: Delta Airlines (A): The Low-Cost Carrier Threat Preparation Questions: 1. Why is the airline industry so unprofitable for the main airlines in the U.S.? Why are the low-cost carriers (LCCs) profitable? 2. Compare the basic cost items (labor, fuel, planes, etc) of Southwest or JetBlue to the ones of Delta. 3. What are the strategic options that Mark Balloun and his team should consider in order to improve Deltas performance for the future? Which one of those options would you recommend to Deltas board of directors?

Session 3: 17 September 2013, room N37


Lecture: Does Industry Really Matter?

Session 4: 19 September 2013, room N35


Case: Southwest Airlines Study Questions: 1. How attractive is the airline industry in 2008? 2. How has Southwests original strategy been altered in recent years? How have these changes affected Southwests key success factors? 3. What further changes does Southwest need to make? Would you recommend that Southwest acquire the gates and slots available at LaGuardia Airport? Why?

Session 5: Monday, 23 September 2013, room N38


Lecture: What in the world is Competitive Advantage?

Session 6: 26 September 2013, room N35


Case: Apple Inc., 2008 Study Questions: 1. What is Apples competitive advantage in the computer industry? 2. Given the initial success of the iPod and the iPhone, has Steve Jobs found a new formula to create and sustain a competitive advantage? 3. How would you assess Apples initial strategy with the iPhone? Why did Apple change so quickly to a different strategy?

Session 7: 1 October 2013, room N24


Lecture: Value chain analysis: creation and appropriation of value

Session 8: 3 October 2013, room N35


Case: Wal-Mart Stores, Inc. Study Questions: 1. Why does Wal-Mart have superior profitability in this industry? 2. Will Wal-Mart be able to sustain its success in the future? 3. What should Wal-Mart do to continue growing as in recent years?

Session 9: 8 October 2013, room N24


Lecture: Strategy in markets with demand-side increasing returns

Session 10: 10 October 2013, room N35


Objective: IKEAs case is a perfect example of corporate strategy that starts with the leaders vision and extends throughout the whole organization. Case: Ingvar Kamprad and IKEA Study Questions: 1. What was Ingvar Kamprads role in IKEAs success? 2. What challenges lie ahead for IKEA? 3. Please recommend what course of action Anders Moberg should follow in order to deal with those future challenges.

Session 11: 15 October 2013, room N24


Lecture: Vertical Integration

Session 12: 17 October 2013, room N35


Case: Facebooks Platforms Study Questions: 1. What are Facebooks main sources of revenue as of right now? How much does each one contribute? 2. Are there other potential revenue sources that Facebook has not explored yet?? 3. What should the company do in the near future?

Session 13: 5 November 2013, room N24


Lecture: Entry and the Advantage of Incumbency

Session 14: 7 November 2013, room N35


Case: Zara: Managing Stores for Fast Fashion. Study Questions: 1. Compare Zaras financials with its competitors. What are the major differences? 2. What are the main differences between Zara and its competitors in each step of the value chain (design, production, marketing, etc)? 3. What do you think of the changes that Pablo Isla wants to implement at to increase efficiency at the stores? Would you make them as well? Why?

Session 15: 12 November 2013, room N24


Lecture: Scope of the Firm

Session 16: 14 November 2013, room N35


Case: The Walt Disney Co.: The Entertainment King. Study Questions: 1. Why has Disney been successful for so long? 2. What did Michael Eisner do to rejuvenate Disney and improve its performance? 3. Has Disney diversified too much in recent years?

Session 17: 19 November 2013, room N24


Lecture: Corporate strategy: Managing a multibusiness company

Session 18: 21 November 2013, room N35


Case: Richard Branson and the Virgin Group of Companies in 2004 Study Questions: 1. What common resources and capabilities link the separate Virgin companies? 2. Which businesses, if any, should Branson consider divesting? Which ones should he invest in? 3. What changes in the organizational structure and managing systems of the Virgin group would you recommend?

Session 19: 26 November 2013, room N10


Lecture: Global Strategy: Managing a multinational corporation

Session 20: Wednesday, 27 November 2013, room N01


Lecture: Management of Innovation and Technology Adoption

Session 21: 28 November 2013, room N35


Case: Toyota Motor Corp.: Launching Prius. Study Questions: 1. How attractive is the automobile industry? Does the hybrid technology make it more or less attractive? 2. Why is Toyota pursuing the Prius project? What factors are important to make this project a success? 3. Should Okuda push for an acceleration of the Prius launch?

Session 22: 5 December 2013, room N35


Case: Sony Playstation 3: Game Over? Study Questions: 1. For the 2006 launch, how would you position the new Playstation 3 in terms of target customers and value proposition? 2. If you are a software developing firm, how many units do you need to sell to break even on the development of a new game for the PS3? 3. How soon should Sony phase out the PS2? What other changes should they make to the PS3 for the future?

Session 23: 10 December 2013, room N24


Lecture: Corporate Social Responsibility and Strategy

Session 24: 12 December 2013, room N35


Lecture: Wrap-up

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