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1 <SAMPLE SYLLABUS ONLY> Strategy II: Corporate Strategy Analysis Dear Corporate Strategy Students: This is a compressed course because of your work schedule. Yet, every subject we cover may be critical in your careers because corporate strategy decisions and failures impact most firms. That is why corporate strategy decisions and problems are in the business news every day. Before our first class, please buy the CS Text + CSC Cases + read first 3 chapters &, Newell Company:Case GE Case in (CSC Cases) & Vertical Integration: Fisher Body & GM Case Revisited CSA on cite. Because we only have 6 class sessions, it is important that all students attend each of the 6 classes and be well prepared for each class discussion. Emergencies can happen that prevent you from being at a class. Please phone me or me. You all work & I admire you for being able to complete your course work and do your Jobs. Four classes will start at 6:00PM. On Saturday, our third and fourth class will start at 9:00 AM. Please make every effort to be on time. It is quite distracting when students wander in late. THE GOALS OF CORPORATE STRATEGY & BUSINESS STRATEGY Business Strategy s goal is to gain sustainable competitive advantage in one business, whereas Corporate Strategy s goal is to manage a multi-business firm to create corporate-wide advantages that benefit each business. For example: Corporate Strategy evaluates whether Walt Disney should own theme parks, sports teams, restaurants, television networks, and movie production and how the corporation can add value to each of its individual businesses. Business strategy analyzes each individual business of Disney relative to its competitors. For example: ABC (one of Disney s television networks) needs a business strategy to succeed against CBS, NBC, Fox and cable TV networks. We Focus on the Following Topics in this Course Why we have firms. How today s converging industries impact firms. What are firm resources? Where do valuable resources come from? How can resources be shared across multi-businesses to grow value? Scale & Scope advantages of the firm: Should it Build? Buy? Or Ally? Why do we have multi-business firms? Do they add or subtract value? Why Corp. Scope results from Transaction Cost Economics & Hold Up? Is there a relation between firm performance and corporate structure? Is the role for corporate headquarters to centralize or decentralize? How to best manage the process of mergers, alliances, JVs, franchises? We compare classic to virtual corporations and to Internet corporations

2 What are good ways to implement corporate strategies, and why? Texts and Other Class Materials From the Bookstore 1. Corporate Strategy: A Resource Based Approach (C&M) by David Collis & Cynthia Montgomery. Irwin McGraw Hill 2 Corporate Strategy Cases (CSC) Includes: GE s Two-Decade Transformation: Jack Welch s Leadership Newell Company: Corporate Strategy Daimler Benz Merger Negotiation with Chrysler 3M Corporation-Innovation : Two Readings KFC In Japan: A Franchise Corporation 2. Handout on: AOL Time Warner for Your 2 Group Paper Analyses I will also hand out key news articles & reports for discussion in class Grading Information 45% of your grade is based on your 2 Group Papers on: AOL-Time Warner vs. Microsoft: 1st Paper=20%: 2 nd Paper=25% 15% of your grade will be based on class participation & homework 40% of your grade will be based on your Final Take Home Exam Jan. 26. Session 1. PM: Resources, Transaction Costs, Convergence of Industries Converging Industries & Dynamics of Corporate Strategy 1. The Resource View of The Firm Links The Corporation s Strategy to Each of its Businesses Strategies? Why do Firms create and update Key Resources: Physical Assets, Intangible Assets and Organizational Capabilities? We compare creation & sustainability of Walt Disney s resources to Intel, Pfizer & Goldman Sachs? 2. The Transaction Cost Economics View of The Firm: Read: Vertical Integration, Fisher Body & GM Case Revisited. Does GM need to buy Fisher Body or simply enter a long-term contract for car hoods? Should corporations build from within, buy from the market, Merge, Acquire, JV, Ally, Network, Franchise or License? 3. Converging Industries Impact Corporate Strategy: Examples: Communications, Finance, Health Care, Transportation and New Materials. Read (C&M) Ch 1.2

3 I hand out slides in class on Convergence of Industries Impact on Strategy. 4. Read and Analyze: The Newell Company: Corporate Strategy Case in (CSC) How was Newell able to rank 24 th in S&P 500 for 10 Years for ROI until 1998? 5. Chart Integrating Four Perspectives on Corporate Strategy Analysis. Please hand in your 2 typed pages Strategy Analysis of Your Firm & Your Industry On Final Exam, 1 question, worth 20% of total, is on concepts in this class. Jan :00-9:00PM Session 2. GE Corp: Managing a Multi-Business Giant. 1. Read: GE s Two-Decade Transformation: Jack Welch s Leadership (CSC) GE Capital: GE s Secret Weapon Read website GE articles & GE Capital GE s Financial Revaluation & Jeff Immelt s Education. Business Strategy and Industry Analysis (C&M p ) Scale and Scope Within an Industry, p Diversified Expansion p What is GE Corporation s relation to the Seven Forces of Competition in: GE Capital, Aerospace, Medical Systems, Power Systems, Appliances & the Internet? 3. How does GE use 4 Types of Corporate Strategy: 1. Diversify, 2. Turnaround, 3. Transfer Skills & 4. Share Resources? How did GE compress its Value Chain? 4. How did GE exploit Value Migration to expand profit? What is GE s Social Architecture and how does it impact GE s implementation of strategy? 5. Contrast the GE-Honeywell merger to the 1000 prior mergers under Welch. 6. Analyze GE s Past Financial Strategy & Current Financial Strategy in depth. Please hand in 1 page on: Impact of Digital Revolution on your Industry & Firm Jan 31. Sat. 9:00 AM Session 3. Managing Mergers: Failures and Successes: Allies 1. Miss-Managed Mergers: Read: The Synergy Trap: Ch. Do You Feel Lucky? Sirowar: Why must you measure the Synergies? How do you measure them? Winning in the Consolidating World : Grubb: & Lamb Six ways to profit from your competitors' mergers, and your firm's own. Also Review Course website articles on Mergers. 2. Read: Daimler Chrysler Merger Negotiation Case (CSC) + Mitsubishi and D-C plus recent articles & securities analysts reports on D-C on course website. 3. How did Daimler Prepare for the Merger? How did Chrysler Prepare?

4 Why did Daimler propose the merger? Why did Chrysler accept? 4. With your Group, using the data in the financials in the D-C Case: 1. Type your Opening Bid by Daimler for Chrysler. Why did you select that? 2. Type Final walk away price for Chrysler. Why did you select that? 5. Analyze Daimler-Chrysler s Merger Implementation: & ? Read 2 page article When Synergy Creates Real Value Morck & Yeung 4. Managing JV s + Alliances: Star Airline Alliance: IBM s 100,000 alliances Read: Collaborate with Your Competitors & Win. Hand in 1st Group Paper on AOL TW and MS Resources & Merger Justification On Final Exam, 1 question, worth 20% of total, will focus on this topic & cases Jan 31. Sat. 1:00-4:00 PM Session 4. ebay: Internet Firm:, 3M: Corp. Innovation: 1. ebay: Managing an Internet Growth Company. Read: 3 brief articles on: ebay. Analyze the Corporate Strategy Expansion of ebay: Any Problems or Limits? 3. 3M: Profile of an Innovative Company: Case & article on 3M s CEO from GE. How does 3M develop resources? How does this affect its financial statements? At 3M, Why is Innovation: A Process of Mindful Replication? How can firms exploit streams of innovation, both internal and external? Read: (C&M) p Managing the Multi-Business Corporation Plus (C&M) Ch. 7. Creating Corporate Advantage Please type 1 paragraph on Innovation in your Firm s Industry Feb. 2. 6:00-9:00 PM: # 5. Global Franchise Corp: Global Financial Services: 1. Global Franchising: Read KFC in Japan Case. Compare McDonalds, Gas Stations, Car Dealers: Strategies for Managing a Global Corporation, Why did KFC Franchise? What did KFC Franchise? Your evaluation of KFC management of its Franchisees: In US? Or Overseas? Should anything be changed at KFC headquarters, or to Expand Across Asia? 2. Global Financial Services: One-Stop-Shop Giant Citigroup vs. Focused Specialists in asset management, underwriting, brokerage, custody, processing and insurance. Read: Handouts on Citigroup, Financial Services Firms, J.P. Morgan-Chase: UBS, Deutsche Bank, Goldman, Capital One: The Financial Specialists Challenge. What corporate strategies work best in Financial Services? Why?

5 What strategies work worst in Financial Services? Why? Please type 1 paragraph on Global Growth in Your Firm s Industry Feb 4. 6:00-9:00 PM. Session Analyze AOL Time Warner vs. Microsoft: 2nd Group Reports on: AOL TW Strategy Due 2. Implementation Of Strategy Using Supply Chain Mgt. 3. Review Course Concepts & Cases to Prepare You For Take Home Exam 1.Analyze AOL Time Warner Merger: 2 Firm s Resources: 2 Firm s Constraints What Was The Theory of the Merger: Convergence Strategy: Merger Valuation: The Merger Integration Process of AOL TW: Your Strategy Recommendations 2. Supply Chain Mgt, Enterprise Resource Planning, Customer Relationship Mgt, Procurement Mgt, Internet Mgt: Read: My 4 page Slides on: Supply Chain Mgt., Contract Manufacture: Read: Have Factory Will Travel and Flextronics 3. Review of Key Course Concepts & Cases to Prepare You for Take Home Exam: Take Home Final Exam Handed Out. Due Back 6:00 PM on Feb. 12, 2004.