COURSE INTRODUCTION

C562
August 21, 2018; 7:00 PM ET
 Avoid Billion Dollar Mistakes

• Blockbuster / Netflix - $290 billion

• News Corp / MySpace - $12 billion
• Premier Smokeless Cigarette - $1 billion
• Kodak – First Digital Camera - $31 billion
• Newton – First Tablet
• Daimler / Chrysler - $20 billion
• Quaker – Snapple - $1 billion
Make Billion Dollar Successes
• Deere and Co.
• Amazon
• Disney
• Apple
• Johnson & Johnson
• Citigroup
• Samsung
 Factfulness
• One of the goals of C562 is to encourage
you to acquire a factful world view.
• In all low-income countries across the
world today, how many girls finish
primary school?
– 20 percent
– 40 percent
– 60 percent
 Factfulness
• In the last 20 years, the proportion of the
world population living in extreme poverty
has …
– Almost doubled
– Remained more or less the same
– Almost halved
• Rosling, Hans. Factfulness: Ten Reasons We're Wrong About
the World--and Why Things Are Better Than You Think Flatiron
Books, p. 53.
 Thinking Fast/Thinking Slow
• Humans are wired to be irrational.
• We know that managers are
systematically conservative.
• NFL: Fourth-and-goal on the 2-yard line
early in the game.
– Go for the touchdown?
– Or kick the field goal?
– What does the Bellman Equation Say?
– https://www.livescience.com/7065-fourth-goal-nfl-coaches-lousy-decisions.html
 Industry 4.0
• The next phase of automation
• Bigger leap than Toyota Lean Mfg.
– Data Volumes
– Analytics
– New human-machine interactions
– Advanced Robotics and 3-D Printing
• https://www.mckinsey.com/business-functions/operations/our-
insights/manufacturings-next-act
 New Business Models
• Subscription
– Netflix
– Movies (MoviePass)
– Autos (Lyft, Maven)
– Razor Blades (Dollar Shave Club)
• Disintermediation
– Travel Agents
– Delivery (Amazon Flex)
 Critical Thinking
• Where do you armor aircraft? The
bullet/shrapnel holes per square foot are:
– Engines 1.11
– Fuel System 1.55
– Fuselage 1.73
– Rest of Plane 1.80
• From: Ellenberg, Jordan (2014-05-29). How Not to Be
Wrong: The Power of Mathematical Thinking.
 Where do you place the armor?
• The officers saw an opportunity for efficiency; you can
get the same protection with less armor if you
concentrate the armor on the places with the greatest
need, where the planes are getting hit the most. But
exactly how much more armor belonged on those
parts of the plane? That was the answer they came to
Wald for.
 Where do you place the armor?
• It wasn’t the answer they got. The armor, said Wald,
doesn’t go where the bullet holes are. It goes where
the bullet holes aren’t: on the engines.
• Wald’s insight was simply to ask: where are the
missing holes? The ones that would have been all
over the engine casing, if the damage had been
spread equally all over the plane?
• Wald was pretty sure he knew. The missing bullet
holes were on the missing planes.
 Where do you place the armor?
• The missing bullet holes were on the missing planes.
The reason planes were coming back with fewer hits to the
engine is that planes that got hit in the engine weren’t coming
back. Whereas the large number of planes returning to base with
a thoroughly Swiss-cheesed fuselage is pretty strong evidence
that hits to the fuselage can (and therefore should) be tolerated.
• If you go the recovery room at the hospital, you’ll see a lot more
people with bullet holes in their legs than people with bullet holes
in their chests. But that’s not because people don’t get shot in the
chest; it’s because the people who get shot in the chest don’t
recover.
• Ellenberg, Jordan (2014-05-29). How Not to Be Wrong: The Power of Mathematical Thinking (p. 6). Penguin
Publishing Group. Kindle Edition.
C562 Administrative Details
 Section 36570
• Several days ago due to low enrollment
in Section 36570 the Kelley Direct office
moved everyone in this section to Section
8969. However, it appears they didn't
eliminate the original section (yet). So,
going forward please sign in to Section
8969. I will check with the KD office
about hiding/deleting the cancelled
section. Sorry for any confusion.
 Online Sessions
• 12 Sessions
• Tuesday evenings at 7:00-8:30 pm ET.
• Please log in using your first and last
names. Two names – sorting.
– E.g., “Philip Cochran”
• Not “Phil”
• Not “Phil’s Galaxy 8 Tab”
• Not “317-555-1212”
 Live or Recorded
• Attend live and participate.
• Or watch MP4 of the live session.
– If you watch the recording then you
can get credit by providing “feedback.”
– Feedback is (at least) 3-5 highlights,
thoughts, comments, reflections.
• Make this a commentary (about a page/250 words)
not a list. Tell me your takeaways. Don’t
“summarize” the session.
 Contact Information
• Instructor: Philip L. Cochran, Ph.D., M.B.A.,
Professor of Management, Kelley School of
Business
• E-Mail: Through Canvas (preferred) or
plcochra@iu.edu
• Office Phone: 317-274-2481
 COURSE MATERIALS - BOOKS

• Strategic Management, 4E, by Frank T.

Rothaermel
• IU e-text
• “Unizin Engage (IU eTexts)”
• For a tutorial on using Unizin Engage:
https://expand.iu.edu/browse/etexts/courses
/the-student-guide-to-iu-etexts
Preliminary Stuff
• Please upload a photo to Canvas
• Please fill out your Canvas Profile
– Click on “Account” (upper left)
– Click on “Profile”
– Click on “Edit Profile”
– Follow format outlined in Canvas
Preliminary Stuff
• Introductions
– Including at least one “interesting fact”
– I’ll share two:
• Unique thing once happened to me while
running.
– Google “Christian the Lion”
• I have a picture of me at a place that does
not exist. Guesses?
The lion that tackled me.
A place that does not exist
Mt. St. Helens
 COURSE OVERVIEW
• Some companies consistently outperform others.
• Why?
• Explore characteristics -> high levels of performance.
• Frameworks and Theoretical Lenses.
• Corporate level strategy vs. business level strategy
• Differences in leadership and organizational
capabilities needed to enable companies to sustain
superior performance.
 COURSE OBJECTIVES
• To classify market structures and match them to
effective business strategies.
• To examine and evaluate of the behavior of effective
general managers.
• To learn the language and concepts of strategy and
strategic management.
 COURSE OBJECTIVES
• Identify, communicate, and act upon competitive
advantage.
• Position technology and information flow to be a
strategic asset.
• To enable you to understand how dynamic, self-
renewing organizations are built.
 ASSIGNMENTS
• Class Discussion Forums
• Mimic in class discussions
– Be Prepared and Participate
• Deliverables
– Team Projects (5 members per team)
– Steps to strategic analysis
 How an Online MBA Strategy Course
Helped Student Kash Faheem Land a Job
with Apple
Kash was able to speak about Apple and its products easily
because all of the research he did in the course. The thing that
especially separated him from his competition was the report.
Kash cleaned up the four deliverables and combined them into
what turned out to be a 50+ page report to take to the interview.
He had a printed copy ready for everyone he met throughout the
interview process. All of the interviewers were intrigued and
impressed by the report and were very interested in learning about
Kash’s insights from the course.

• http://kelleydirect.blogspot.com/2015/09/how-online-mba-strategy-course-helped.html
EVALUATION OF TEAM MEMBERS
• Evaluate Team members’ performance
• Who (if any) contributed less than 100%?
• Critical issue – team equity is very
important.
 DISCUSSION FORUMS
• Mimic classroom discussions.
• I will begin each forum with one or more
questions.
• Note: The first discussion forums are
open - time to get involved.
• I will try to get into discussions daily.
• Students – try to check in several times.
• No expectation that you will get in daily.
 CRITERIA FOR EVALUATION OF
FORUM DISCUSSIONS
• Spirited discussion is encouraged.
• However, do so civilly.
• Discussions will build over time.
• Participate as if in a discussion.
• DO NOT simply dump your thoughts into
the forum at the end.
• Early comments and questions will get
more credit than the same statements later.
CRITERIA FOR EVALUATION OF
FORUM DISCUSSIONS (cont.)
• Feel free to raise new issues as the
discussion evolves.
• Draw on your personal experiences.
• I may add new questions as the
discussion unfolds.
• Remember, treat the forums as if they
are a discussion in class.
 Discussion Forum
Choose a Company to Analyze
• There are many great firms to analyze.
• If any of them might be problematic I will
step in and explain why.
Rationale for Discussion Forums
• For a 3 credit course over a 12 week
term schools are required to have about
3 hours/week of “class contact time”.
• Our live sessions are 1-1.5 hours every
week.
• So, the expectation is that students
should devote about 1.5-2.0 hours of time
to discussion forums per week.
Rationale for Discussion Forums
• Course evaluations suggest that the
average student spends 1.5 - 2 hours per
week on the discussion forums.
• Thus, the accreditation requirements are
satisfied.
Engaging in Discussion Forums
• Carve out some time every few days to
devote to the class.
• I often spend 30 minutes in morning on
my exercise bike where I can read your
posts.
• Perhaps 30-60 minutes some evenings
instead of TV.
• Sometimes while on an airplane (most
airlines now have WiFi) or in a hotel.
Engaging in Discussion Forums
• You can use a tablet (like an iPad or
Android) if that works better.
• It’s possible (albeit pretty awkward) to
access the discussion forums from a
smart phone.
• You can use an inexpensive personal
Chromebook if your work laptop or work
network have issues.
 What leads to higher scores?
• High quality posts. Note: quality is easy
to recognize but tough to quantify.
• Getting into the discussions over several
days.
• Responding to comments of other
students and the instructor.
• Bringing in examples from your work
experience.
 What leads to higher scores?
• A strong first post that shows insight and
thoughtfulness.
• This first post should be more than just a
sentence or two.
• This post will be significantly more
impactful if it happens in the first few
days (and ideally in the first week) after
the discussion forum opens.
 What leads to higher scores?
• Bringing in examples from your
educational experience (other classes).
• Bringing in examples from books or
articles that you have read.
• Posting insightful comments that follow
the posts that others made.
• Raising interesting questions in response
to posts that others made.
 What leads to lower scores?
• Few posts.
• Posting late in the two week window
– Even 6-8 thoughtful and responsive
posts on the last day will probably not
result in an “A” score.
 What leads to lower scores?
• Posts that are not responsive to the initial
questions of the posts of others in the
class.
• Failing to respond to questions or
comments raised by others to your posts.
 Grading is Multidimensional
• Please understand that there is no simple
formula. The following at not guarantees.
• Many factors contribute to a discussion
forum grade.
Choose your level of participation
• I’d be delighted to give everyone in the
class an “A.”
• But I know that you all have incredibly busy
lives between work, family and KD.
• Choosing to earn a “C” or a “B” with a
lower level of participation is fine.
– Some students choose to do so and I’m OK
with that. No value judgements.
For a Grade of “F” 0 points
• No postings during the forum window
 For a Grade of “D” 60-69
• A single posting, late in the window.
• A sentence or two in length.
• Not particularly insightful.
 For a Grade of “C” 70-79
• A single post (or two short posts).
• If it is an interesting and relevant comment (or
comments) perhaps a paragraph in length it may
probably earn something in the 72-75 range.
• If it is an excellent comment (or comments) that
cover the question(s) posed and is two or more
paragraphs in length it may earn between 76-79.
 For a Grade of “B” 80-89
• Two to three thoughtful posts - on different days.
• Each at least a paragraph in length.
• Higher quality posts will result in higher scores.
• Responsive to the initial questions and the posts
of other students.
 For a Grade of “A” 90-94
• At least 3-4 quality, substantive comments -
ideally posted on different days will usually earn
a score of about 90 or better.
• Higher scores are earned when some posts are
earlier in the window.
• Quality posts are those that clearly add to the
discussion.
• Quality matters.
 For a Grade of “A” 95-98

• Everything above plus:

– 6-8 quality posts spread over the
posting window.
 For a Grade of “A+” 99

• All the above plus:

• Interesting and new (to me) ideas.
• I start thinking that you ought to be
teaching the class.
• You may want to think about getting a
Ph.D. in Strategy. (If this is appealing we
can talk.)
 Point of Diminishing Returns
• Anything above 8-10 substantive
comments will have no grade
impact.
• But, feel free to have “guidance
comments.”
– E.g.: “Great idea, Joe. Could you
elaborate?”
 KD Students are like CEOs
• I’m actually totally serious here.
• A successful KD student must learn how
to manage his/her time efficiently.
• Can you squeeze in 10-20 minutes for
the discussion forums while waiting for a
cab, a meeting, dinner, etc.?
• CEOs often use that time to catch up on
reading. Many CEOS actually carry a
book with them to utilize down times.
 Suggestions?
• Finally, I am always open to suggestions on
how to improve the course. I could easily
have a two-hour live session every week.
That would dramatically decrease the time
expected on items like discussion forums.
 Suggestions?
• At the extreme, there are some business
schools that have all live classes and you
need to "show up" and be on camera
during these classes. We have the
technology to do this but that would
significantly decrease the flexibility that the
current system provides.
• Any ideas you have would be appreciated.
 WRITTEN ASSIGNMENTS
• Read the Directions -- Carefully!
• Clarity Matters.
• May use appendices. (But not required.)
• Submit ONE FILE using Microsoft Word.
– Do not submit any separate or
embedded files.
• Keep files under 5 MB.
• Submit on time!
WRITTEN ASSIGNMENTS (cont.)

• Quality of your Research and Analysis.

• Quality of your Final Recommendations.
• Quality of your Writing, Logic, and
Organization.
• Plagiarism
WRITTEN ASSIGNMENTS (cont.)
WRITTEN ASSIGNMENTS (cont.)
WRITTEN ASSIGNMENTS (cont.)
 Questions/Comments?
• Feel free to email me at any time.
• Good luck! Enjoy the course!