MAN 6721: Applied Strategy and Business Policy

1. MAN 6721: Applied Strategy and Business Policy Dr. Marshall Schminke Spring, 2012 These slides are intended to be a supplement to your class notes, not a replacement for them. For specific references, etc., see me.

2. Week 1 • Introduction to the course • A brief tour of the syllabus and course • Introduction to the strategic process • Q: Why are we here? • Begin with content • Mission & strategy • External analyses (possibly)

3. A quick tour: • The syllabus • Projects • The website: • http://web.bus.ucf.edu/faculty/mschminke/ • (lots of useful tools there)

4. A note on the books: • Michael Porter’s Competitive Strategy • Michael Porter’s Competitive Advantage • Michael Porter’s On Competition

5. A note on the books: • Michael Porter’s Competitive Strategy • Michael Porter’s Competitive Advantage • Michael Porter’s On Competition • Strategic analysis based on: • Industry analysis (the five forces) • Firm analysis (the value chain)

6. A note on the books: • Michael Porter’s Competitive Strategy • Michael Porter’s Competitive Advantage • Michael Porter’s On Competition • Strategic analysis based on: • Industry analysis (the five forces) • Firm analysis (the value chain) • They are classics, but don’t be fooled by the dates…

7. A note on the books: • They provide the foundation for most of the best current thinking on strategic issues today

8. They are the foundation of HBS’s current strategy offerings: • What is Strategy? (HBR digital) • How Competitive Forces Shape Strategy (HBR digital) • From Competitive Advantage to Corporate Strategy (HBR digital) • The Five Competitive Forces that Shape Strategy (HBR digital)

9. And they provide the foundation for nearly all strategy texts: • Strategic Management: Competitiveness & Globalization by Hitt, Ireland,& Hoskisson (2012) • Crafting & Executing Strategy by Thompson, Gamble, & Strickland, & Gamble (2009) • Strategic Management: Creating Competitive Advantages by Dess, Lumpkin, Eisner, & McNamara (2011) • Strategic Management: Formulation, Implementation, and Control by Pearce & Robinson (2010) • Even Strategic Management and Competitive Advantage by Barney & Hesterly (2011)

10. A note on the books: • Their impact goes beyond providing the foundation for most current thinking on strategic, business, and economic issues

11. They are the foundation for Porter’s current & recent work: • Porter: Strategic Corporate Social Responsibility • Porter & Teisberg: Redefining Health Care: Creating Value-Based Competition on Results • Porter & Kramer: Strategy and Society: The Link between Competitive Advantage & CSR • Plus, Porter’s work on competitive advantage of nations, urban development, environment, …

12. They are the foundation for important research across a variety of areas: • A Study of the Role Played by Manufacturing Strategic Objectives and Capabilities in Understanding the Relationship between Porter's Generic Strategies and Business Performance (British Journal of Management, 2010) • Porter’s Generic Strategies and Environmental Scanning Techniques (The Business Review, Cambridge, 2010) • Analyzing Porter's Ideas: Horizontal Differentiation and Product Innovation (IUP Journal of Knowledge Management, 2010) • Porter's generic strategies as applied toward e-tailers (The Journal of Product and Brand Management, 2010)

13. They are the foundation for important research across a variety of areas: • Strategy as "Inferior" Choice: A Re-interpretation of Porter's "What is Strategy?“ (Journal of Management Research) • Does the Porter Hypothesis Explain Expected Future Financial Performance? The Effect of Clean Water Regulation on Chemical Manufacturing Firms (Environmental and Resource Economics) • Competitive Advantage of German Renewable Energy Firms in Russia – An Empirical Study Based on Porter’s Diamond (Journal for EE Management Studies) • The Effect of Clean Water Regulation on Profitability: Testing the Porter Hypothesis (Land Economics)

14. Realistically? • They’re not comic books • My friends at other top schools said… • They can be dry in places. (Oh, yes.) • But the load works out to be very manageable, in terms of pages per week • Just don’t let it sneak up on you

15. Bottom line… • They are books and ideas that matter • They are books and ideas with practical value • We’ll start with the basics • And there’s plenty of room to grow, once you have these down

16. Back to the syllabus: • Fixed teams throughout • Three main projects • 10-K Integration Project (solo) • Full industry analysis (solo) • Full strategic analysis (team) • Paper • Presentation: The Great EMBA Case Competition • Q&A now…and next time

17. Before we move ahead, some perspective: The University Process

18. You • Two years ago, you were… • And you decided to come back to a university setting

19. Colleges and universities • Are amazing things • They began with Plato’s Academy (Around 387 B.C.)

20. Colleges and universities • They evolved through that to his full symposia (nicer surroundings)

21. Colleges and universities • And eventually to the School of Athens

22. Colleges and universities • By around 800s, formal universities were being formed in places like Constantinople and Salerno

23. Colleges and universities • By around 1200, they existed in Paris, Oxford, Cambridge, & Salamanca

24. Colleges and universities • These provide the foundations for our concept of universities today But it was a long road; It took more than 400 additional years for Harvard to even enter the picture!

25. Colleges and universities • Today, we refer to them collectively as institutions of higher education • That’s meaningful • It drives what we do here • And it’s why you came here

26. Back to you • That brings us back to you. • Two years ago, this was all a pretty fuzzy concept to you.

27. Back to you • So here you sit • Final semester • Time for some questions:

28. Back to you • Are there things you wanted out of it that haven’t yet happened?

29. Back to you • Time’s almost up… • This is the last chance you have to see what you can do • We’re here to help • Let’s get to it

30. Topic: Strategy

31. Conversation: What is Strategy?

32. Conversation: What is Strategy?What is Strategic?

33. Conversation: What is Strategy?What is Strategic?

34. Topic: Who remembers Hannibal?

35. Hannibal

36. What we need for effective strategy: • A mission • A plan • Elephants • That’s strategy • That’s what the course is all about

37. The recurring question: What are we doing here?

38. All firms have strategy. The only decision is whether you manage it, or simply back into it… What are we doing here?

39. We will be looking at: • Strategic analysis • Strategic decision making • Strategic planning & implementation • Integrating strategy across functional areas

40. What is strategy? • Read enough about business thinkers and leaders, and a picture starts to emerge

41. What is strategy? • Michael Porter in Harvard Business Review: • “A company can outperform its rivals only if it can establish a difference it can preserve”

42. What is strategy? • Warren Buffett: • The best company to own, invest in, or work for is a company that has ”durable competitive advantage” • These are “supercompanies” that have a near lockdown on their market

43. The common theme • Sustainable competitive advantage • It fell out of style • Hypercompetition rules • Positioning is too static • Everything is “copy-able” • But it shouldn’t have Operational effectiveness is important, but it isn’t

44. In the end, strategy is all about prioritizing…

45. …but that can be difficult Strategy helps us identify what’s most important and to respond to those things in a sustainable way

46. That’s strategy…That’s what we are doing here

47. Exercise: Now that’s bad strategy

48. Where we are going: • Mission • External analysis (industry & beyond) • Internal analysis

49. First project?

50. The 10-K Integration Project • What’s a 10-K? • What’s in there? • Where do we find one? • http://www.sec.gov/edgar/searchedgar/companysearch.html • What do we do with it once we have it?