The University of Texas at Dallas

BPS 6310
STRATEGIC MANAGEMENT
Spring 2006

Professor Sumit Majumdar

Office: (972) 883 4786
majumdar@utdallas.edu
SOM 3.433
Office Hours: By appointment

Objectives of the Course:

• To develop analytic skills to identify key issues and formulate appropriate strategies for
complex business situations.
• To understand how to analyze industry dynamics
• To understand how to respond to competitive challenges & improve corporate performance.

Main thrust of course and short outline:

To Understand How to Achieve Sustained Competitive Advantage

§ The basic purpose of strategy is to take a series of decisions and make a series of moves
which are designed to achieve sustained competitive advantage.

§ One must relate moves back to outcomes, that is the extent to which these moves actually
affect business performance.

§ Ultimately business performance is based on the performance achieved in competitive

domains, so a great deal of strategic thinking is all about understanding how to compete.

§ This course focuses on the many competitive moves that businesses make and the types of
analyses required to make these moves effective.

§ You will learn how to undertake an analysis of the industry environment and an analysis of a
company’s internal resources.

§ The main moves that flow from such an analysis are

o positioning versus competitors in terms of the cost and quality of products,
o positioning in terms of the scope of businesses classified as vertical or horizontal
integration,
o positioning with respect to innovation.

§ The basic premise of the course is that making winning moves depends on finding profitable
patterns of activities or business models that meet customer demands for solutions, and
doing so repeatedly.
 § There are human resources issues to implement strategy and the question of global markets.
There are IB and OB classes covering these topics and this class will not go into these issues.

§ Nevertheless, we will continuously address issues of strategy implementation as we analyze

the various concepts and the cases that have been assigned for the class.

There are seven broad areas that are covered:

What is Strategy?
Performance: the Key to a Successful Strategy
Competitive Dynamics: Strategy Not Done in Isolation
Inflection Points: The Value of “Getting it” Early
SWOT: Matching External Opportunities & Threats with Internal Strengths and Weaknesses

How to Do Industry and Environmental Analysis

Porter’s Five Forces
Industry Boundaries
The Analysis of Social and Political Factors
Stakeholder Analysis

How to Analyze a Company's Resources

Resources, Capabilities, and Competencies
The Need to Replicate Successes
Continuously Building Capabilities
Organizational learning

How to Position a Company within an Industry

Generic Strategies: Low Cost and High Quality
Strategic Groups
The Broad Basis for Segmentation
Heterogeneity as Source of Competitive Advantage

Company Positioning, Mergers and Acquisitions and

Corporate Strategy
Scope of the Firm
Portfolio management
New Trends

Innovation and Company Positioning

Finding and Exploiting New Opportunities
Forecasting
Technology Push and Market Pull
Obstacles to Realization

Conclusion: Making the Moves that Win

Profitable Patterns or Models of Business
Customer Demand for Solutions
Searching the Value Chain
Learning Methods:

This is both a concepts based and a case based class.

Concepts: From readings, lectures and discussion.

Group Case Analysis: Applying concepts to cases where key issues are identified and recommendations made.
Strategic Analysis: Comparing companies to understand their strategies for sustained competitive advantage.

§ This is an integrative course that takes into account all the management functions including
accounting, finance, marketing, and operations.
§ Classes will profile a short situation that illustrates the main theme of the class.
§ Each class also portrays the main concepts with which it deals with discussion of a case
involving two businesses that have been long standing competitors, for example:
o Intel vs. AMD,
o Amazon.com versus Barnes & Noble,
o Dell versus Gateway,
o Best Buy versus Circuit City,
o Charles Schwab versus Morgan Stanley,
o Disney versus AOL Time Warner,
o Monsanto versus Du Pont.
§ The rivalry between these companies is a good starting point for a discussion of the class
concepts.
§ The aim is to deal with the case companies given the current situations they face when we
discuss the cases and not at the time the cases were written.

Please come prepared to participate in each class. Course materials can be found on the WebCT site.
Regularly consult the site for information about the course.

Reading Material:

§ The required book for this course is “Alexander the Great’s Art of Strategy” by
Partha Bose, Gotham Books, 2003. This book is available at the book store.
§ On the WebCT site you will find chapters from a textbook that will be used for this
class. The book has been written by a colleague, Alfred Marcus, for McGraw Hill
called Management Strategy: Sustaining Competitive Advantage. That will be
the main source for the conceptual strategy related text material.
§ Some of the cases come from another book he is writing called Winning Moves: A Case
Book that Marsh Publications will have published.
§ The chapters and the case are available for downloading at the WebCT site.

Grading:

Class participation: 20 points

Group analysis of cases: 40 pts ~ The cases will be put on the WebCT
Final exam case: 40 pts ~ The case will be handed out halfway during the term
 Detailed Course Schedule
Serial Date Agenda Topic Details of Readings
Number
The Basics of Strategy
th
Class 1 11 January Introduction What is the class all
about?

Class 2 18th January Concepts class What is strategy? Bose ~ Introduction and
Chapter 1
Marcus ~ Chapter 1

Class 3 25th January Concepts class Industry and internal Bose ~ Chapter 2
analysis Marcus ~ Chapters 2 and
3

Class 4 1st February Case class Intel versus AMD

Class 5 8th February Case class Barnes and Noble

versus Amazon

Class 6 15th February Concepts class Market positioning and Bose ~ Chapter 5 and 9
mergers Marcus ~ Chapters 4 and
5

Class 7 22nd February Case class Dell versus Gateway

Class 8 1st March Case class Best Buy versus

Circuit City

Class 9 15th March Case class Charles Schwab

versus Morgan Stanley

Class 10 22nd March Globalization Bose ~ Chapter 7

Marcus ~ Chapter 6

Class 11 29th March Case class Walt Disney vs Time

Warner

Class 12 5th April Concepts class Innovation, Bose ~ Chapters 6 and 8

entrepreneurship and re- Marcus ~ Chapter 7
invention

Class 13 12th April Case class Monsanto vs Du Pont

Class 14 19th April Final class Final case presentation

Assignments:

1. Group analysis of cases:

§ For each class topic there are 2 case questions. You have to choose which particular firm’s
approach you will take. I will ensure that the groups cover each of the firms equally. Groups
meet before class time.
§ Each group is expected to develop a series of 4 to 6 Power Point overheads to answer one of the
questions related to the case. The overheads should summarize your answers to the following
detailed issues:
§ What is the main challenge the company faces?
§ How should it respond to this challenge?
§ How are its competitors like to react to what it does?
§ What is the outcome likely to be?
§ The overheads can be in the form of figures, tables, and diagrams. For each session, two groups
will be called on to present their overheads to the class. After the first class I will list the groups
that will start the discussion for each case class.
§ For the following class meeting, all groups should write a memo that answers the case question
and hand in their overheads along with their memo.
§ Only if your group is not willing to include your name in its submissions, should you hand in your
own memo and overhead the Class after the scheduled class.
§ If your group is called upon to present its answer to a case question to the class as a whole, use the
overheads to get the discussion started. Be honest with the class about aspects of your answer
about which you are unsure. Solicit the class’ help. The presenting groups should be prepared to
talk for about 10 to 20 minutes. The rest of the class time will be devoted to class discussion.
§ As a member of the class, be sure to participate in these discussions. Think about what the
presenting group has said. What do you think? Has the presenting group missed something? Are
its ideas on target, or off? What can be done to strengthen the presenting group’s answer?

2. Memo:

Recall that memos are due the class after the case is discussed.
Appendices are permitted if you want to amplify or develop your points.
Memos should have no more than 2 single-spaced pages of text excluding appendices.
Below I have presented the elements of what would be in a good memo.

A Good Memo
To:

Current Challenge
• What is the problem/threat/opportunity? How have these been analyzed? What is the issue -- the negative
assumption, the complication -- that necessitates action?
• What is the pivotal question that must be addressed? Why?

Recommended Strategy
• What is the main action that should be taken to alleviate the problem you have identified? Why this action
rather than some other? Did you consider alternatives? Why did you reject them?
 • What moves should be made? These moves must be implementable? If there are internal or external barriers,
if there are serious limitations, or constraints that might stand in the way of the moves you are advocating,
how can they be overcome?
• Substantiate each element in the moves you are proposing? Try to be specific as specific as possible. Who
should do what, how, and in what time period?
• How will other parties (competitors in particular) respond to these moves? Will their responses effectively
neutralize the moves you are proposing and make them null and void?
• In the end, what difference will the moves you are recommending make? How likely are they to solve the
problem you have identified? What problems will they create in their wake?
• Why do you think the strategy you are proposing should be carried out and what difference it would make?
• Who will be better off? In short run? In the long run? What are the uncertainties? What risk is involved?

Case Questions

Intel and AMD

Analyze the rivalry between Intel and AMD in terms of the need to find the right balance between exploiting strengths
and exploring for new business opportunities.

1. What is the competitive challenge AMD faces from Intel? How should AMD fend off this
challenge? Analyze the situation and give advice to management.
or
2. What is the competitive challenge Intel faces from AMD? How should Intel fend off this
challenge? Analyze the situation and give advice to management.

Barnes and Noble and Amazon.com

Analyze Barnes and Nobles’ and Amazon.com’s existing rivals, potential new entrants, the threat of substitutes, and
the bargaining power of suppliers and customers.

1. Based on your assessment of Amazon.com’s customers, suppliers, competitors, etc., what is

the competitive challenge that Amazon.com faces from Barnes and Noble? Analyze the
situation and give advice to management.
or
2. Based on your assessment of Barnes and Noble’s customers, suppliers, competitors, etc.,
what is the competitive challenge that Barnes and Noble faces from Amazon.com? Analyze
the situation and give advice to management.

Dell and Gateway

Assess the resources, capabilities, and competencies that Dell commands in comparison to the resources, capabilities,
and competencies that competitors like Gateway command.

1. Can Gateway build the resources, capabilities, and competencies to challenge Dell? As a
management consultant, what would you tell Gateway to do?
or
2. Does Dell have the resources, capabilities, and competencies to maintain an advantage in the
long run? What should Dell do to counter the moves that competitors such as Gateway
might make??
Best Buy and Circuit City

Analyze how Best Buy reinvents itself to better combine low cost and differentiation than such competitors as Circuit
City.

1. What does Circuit City have to do to catch up to Best Buy? How should it distinguish itself
from Best Buy?
or
2. As a management consultant, your role is to think through what Best Buy should do next.
How should it reinvent itself again to assure that it will maintain an advantage over
competitors like Circuit City?

Morgan Stanley and Charles Schwab

In light of U.S. financial scandals, analyze how Charles Schwab and Morgan Stanley Dean Witter have been
repositioning themselves between being low cost and full service brokerages.

1. Assess the threat posed to Morgan Stanley by a competitor like Schwab. How should
Morgan Stanley respond to this threat?
or
2. Assess the threat posed to Charles Schwab by a competitor like Morgan Stanley. How
should Charles Schwab respond?

Disney and Time Warner

Assess the logic behind the acquisitions Walt Disney and Time Warner have made and assess the approaches they are
taking to achieve synergy among their diverse holdings.

1. Time Warner’s ability to confront companies like Disney depends on how it manages its
diverse holdings. Provide advice to management.
or
2. Disney currently seems to be in a position where it can make gains on Time Warner. What
should it do?

Du Pont and Monsanto

Analyze the ways in which du Pont’s strategy is different from Monsanto’s and assess the extent to which du Pont and
Monsanto are likely to succeed.

1. What can Du Pont learn from Monsanto’s experience? What should it do to assure its
long-term success?
or
2. What moves should Monsanto now make? How will it meet the challenge from Du Pont?