Professor Ram Shivakumar Competitive Strategy

ram.shivakumar@chicagobooth.edu Business 42800

Term: Winter 2014

SYLLABUS

A. Administrative Information

Contact Information

Office: Harper Center #337 & Gleacher Center

Office Hours: By Appointment
Phone: (630) 660 4752
Postal Address: Booth School of Business
University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637

Materials

There is no text book for this course. The required readings for this course (listed under
“Readings”) are contained in a course packet.

B. Course Overview

This course introduces the fundamental concepts, models, tools and frameworks used to
formulate, assess and refine any firm’s business strategy. The goal is to enable you to think
strategically: (a) to identify the central questions that a firm must answer (b) to apply the
appropriate concepts, models and frameworks that address these questions (c) to assess the
influence of the economic, social, political & technological forces buffeting the firm (d) to
develop a roadmap on how the firm can build vital capabilities and finally (e) to formulate a
strategy, given the firm’s external environment and its capabilities.

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C. Course Requirements and Grading

Your grade in this course will be based on 5 components:

Strategy Report (10%)

The goal of this report is to describe the strategy and tactics for achieving a personal objective.
The objective could be to start and run a for-profit business, launch a not-for-profit enterprise,
popularize an idea or even mobilize a community.

 The report must be submitted individually and is due at the start of session 8

 The report cannot exceed 1 written page (1.5 spacing and 12 font) and 1 exhibit page

 Additional details are provided in a document posted on chalk

Case Analysis (20%)

We will discuss several cases over the course of this quarter. You are required to submit a
write-up for 4 case write-ups (beginning week 2):

 Case write-ups are to be submitted in groups

 Your write-up should contain no more than 1 written page and 1 exhibit page

 I have posted a document titled “Case Questions” (on chalk) that lists some
questions for each case. Answer only the bold-faced typed questions

 I have also posted a document titled “Guidelines for Case Writing” (on chalk).

Quizzes (10%)

A 10-15 minute quiz will be administered at the beginning of the 4th and 8th sessions. The
quizzes will test you on your understanding of the assigned articles and cases.

Company Report (20%)

Your task is to analyze a firm (and the industries and markets in which the firm operates)
of your choice. More specifically, your project should:

 Describe and critique the firm’s strategy

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  Assess how the firm can develop and sustain a competitive advantage
 Evaluate the environment in which the firm operates
 Analyze the horizontal and vertical scope of any firm
 Assess the organization’s structure & culture and its decision-making capabilities
 Recommend an alternative strategy (or course of action)

Here are some important guidelines and deadlines:

 The project must be completed in groups

 Group presentations will take place in session 9

 You must notify me of the firm you propose to analyze by the end of session 4

 Additional information on the project is provided in a document titled “Guidelines

for Project Presentation” that is posted on the chalk site.

Final Exam (40%)

The final exam will be a 2.5 hour in-class exam. I will provide you with further details on the
structure and content of the exam in the weeks prior to the final exam.

Homework problems

I will post 4 problem sets on chalk. You are not required to submit answers to these questions.
However, you should try to answer as many questions as you can on your own. I will discuss
answers to these questions in the review sessions (held after sessions 3, 5, 7 and 9).

Lecture Notes

I will distribute course notes each week in class.

D. Honor Code

Students are expected to adhere to the Booth honor code and are required to sign the following
honor code pledge on each case as well as the take-home exam.

“I pledge my honor that I have not violated the Booth honor code.”

Students should not consult with students who have taken this course in prior terms nor should
they look at their notes, assignments or exams.

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F. Class Schedule

Session 1: Strategy

 What is Strategy?
 The OES Framework
 Leadership and Strategy

Readings: Collis, D. and M. Ruckstad, "Can You Say What Your Strategy is?” Harvard
Business Review, April 2008

Rumelt, R., 2011, “The Perils of Bad Strategy,” McKinsey Quarterly, June 2011

Grobart, S., “One Direction,” Bloomberg Businessweek, September 23, 2013

Case: Cohan, W., “The Rise and Fall of Jimmy Cayne,” Fortune, August 18, 2008
Gucci Group N.V. (A)

Further Rumelt, R., Good Strategy Bad Strategy: The Difference and Why it Matters,
Reading Crown Business, 2011

Harford, T., Adapt: Why Success Always Starts with Failure, Picador, 2011

Session 2: Competitive Advantage

 The Economics of Value Creation

 Resources & Capabilities

Readings: Ghemawat, P. and J. Rivkin, “Creating Competitive Advantage,” Teaching

Note, Harvard Business School Publishing, 2006

Shook, J., “Toyota’s Secret: The A3 Report,” Sloan Management Review,

Summer 2009

Case: “The Megabus Effect,” Bloomberg Businessweek, April 11, 2011

Ducati

Further Welch, J. and S. Welch, Winning, HarperBusiness, 2005

Reading
Levy, S., In The Plex: How Google Thinks, Works and Shapes Our Lives,
Simon & Schuster, 2011

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Session 3: Market & Industry Analysis

 Market Segmentation
 Porter’s Industry Analysis Model

Readings: Porter, M., “Note On The Structural Analysis Of Industries” HBS Publishing

Evans, D., and K. Webster, “Designing The Right Product Offerings,” Sloan
Management Review, Fall 2007

Case: The Fashion Channel

“Bulletins from the Future,” The Economist, July 9, 2011

Further Underhill, P., Why We Buy: The Science of Shopping, Simon & Schuster, 2008
Reading
Doctoroff, T., What Chinese Want: Culture, Communism and the Modern
Chinese Consumer, Palgrave Macmillan, 2012

Session 4: Industry Transformation

 Industry Life Cycles

 The S Curve

Readings: O’Reilly, C. and M. Tushman, “The Ambidextrous Organization,” Harvard

Business Review, April 2004

Shook, J., “How To Change a Culture: Lessons From NUMMI,” Sloan

Management Review, Winter 2010

Case: “GM: Live Green or Die,” Businessweek, May 26, 2008

“Charged for Battle,” Bloomberg Businessweek, January 3, 2011
Stone, B., “Can Marissa Mayer Save Yahoo?” Bloomberg Businessweek,
August 5, 2013

Further Christensen, C. and M. Raynor, The Innovator’s Solution: Creating and

Reading Sustaining Successful Growth, Harvard Business School Press, 2003

Moore, G., Dealing With Darwin: How Great Companies Innovate at Every
Phase of Their Evolution, Portfolio Trade, 2008

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Session 5: Corporate Strategy

 Models of Corporate Strategy

 Vertical Scope

Readings: Grant, R., “Diversification Strategy” (Chapter 15) from Contemporary Strategy
Analysis, 6th Edition, Blackwell, 2008

Dean, J., “Is This The World’s Most Creative Manufacturer?” Inc., October 2013

Case: Engardio, P., “The Last Rajah,” BusinessWeek, August 2, 2007

“Out of India,” The Economist, March 3, 2011
Hansen, S., “How Zara Grew Into the World’s Largest Fashion Retailer,” New
York Times, November 11, 2012

Guest Jai Shekhawat, CEO, Field Glass, Inc.

Speaker

Further Zook, C. and J. Allen, Repeatability: Building Enduring Business for a World of
Reading Constant Change, Harvard Business Review Press, 2012

Anderson, C., Makers: The New Industrial Revolution, Crown Business, 2012

Session 6: The Game

 Decision Analysis
 Game Theory

Readings: Gawande, A., “The Case of the Red Leg” from Complications: A Surgeon’s Note on
An Imperfect Science, Picador 2003

Oberholzer-Gee, F. and D. Yao, “Game Theory and Business Strategy,” HBS

Publishing, 2007

Case: Merck & Co: Evaluating a Drug Licensing Opportunity

CBS and Online Video

Further Dixit, A. and B. Nalebuff, The Art of Strategy: A Game Theorist’s Guide to
Reading Success in Business & Life, W.W. Norton, 2010

Berne, E., Games People Play: The Psychology of Human Relationships,

Vintage, 1969

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Session 7: Entry & Exit:

 First Mover Advantages and Disadvantages

 Exit

Readings: Suarez, F and G. Lanzolla, “Half-Truth of First Mover Advantage,” Harvard

Business Review, April 2005

Cabral, L., “Strategic Behavior, Entry & Exit” (Chapter 15) from Introduction to
Industrial Organization, 1st Edition, MIT Press, 2000, 259-269.

Case: Slanket: Responding to Snuggle’s Market Entry

Nantucket Nectars: The Exit

Session 8: Changing the Game

 An In-Class Game
 Principles for Changing the Game

Readings: Brandenburger, A. and B. Nalebuff, “The Right Game: Use Game Theory to
Shape your Strategy,” Harvard Business Review, 1995

Shermer, M. “The Doping Dilemma,” Scientific American, April 2008

Case: Birth of the Swatch

Further Kahnemann, D., Thinking Fast And Slow, Farrar, Straus & Giroux, 2011
Reading
Heath, C. and D, Heath, Switch: How to Change Things When Change is Hard,
Crown, 2010

Chwe, M., Jane Austen: Game Theorist, Princeton University Press, 2013

Session 9: Group Presentations

The presentation schedule will be posted on the chalk site.

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Session 10: Governance

 The Strategy Review Process

 The Board’s Role in Strategy

Case: Whitcare, E., “GM On The Brink,” Fortune, February 4, 2013

“HP Defends Hasty Whitman hire,” Wall Street Journal, September 23, 2011
“Jon Corzine Comes Up Snake Eyes,” Bloomberg Businessweek, November 7,
2011

Session 11: Final Meeting

In-Class Final Exam (3 hours)