Indian Institute of Management, Udaipur

Post-Graduate Programme in Management

Academic Year 2013-14

Course Outline for Strategic Management

Credits : 4 Term : 3

Instructor : Prof. Thomas Joseph

Course Overview
This is the introductory course in strategic management. The course aims to help students understand
why some firms outperform others by formulating and implementing strategy for gaining and sustaining
corporate and competitive advantage, which may result in superior performance.

The course is divided into three modules. The first two modules of the course focus on Strategy
Development how firms formulate effective strategies at the business- and corporate level, bringing in
conceptual understanding of competitive and corporate strategies as well as analytical techniques to
support analysis and strategy formulation.

Business strategy deals with a particular line of business either a single-business firm or a line of
business within a multi-business firm, and focuses on competitive forces in the industry, business models,
strategic positioning within the industry and resources and capabilities needed to compete. Corporate
strategy typically deals with the management of scope of the firm vertical scope (forward integration,
backward integration), horizontal scope (growth through diversification of products/ services) and
geographic scope (domestic markets, multiple markets, global markets). The vehicles for corporate
growth in one or more of the three dimensions of scope can be organic through expansion of the scope
of current businesses or entry into new businesses, or inorganic through mergers, acquisitions,
alliances and so on. Thus, corporate strategy focuses on the appropriate scope of the firm, how the
corporate adds value to the various lines of business and the appropriate strategies to compete
successfully in multiple geographies.
The last module of the course focuses on Strategy Process how firms go about managing the
development and execution of strategy, how the key elements involved in strategy execution
(implementation) process influence the outcome, and how strategic change unfolds. In this module we will
explore strategy execution in depth, the various dimensions of execution and how they are interlinked.
More importantly, we will also explore the symbiotic relation between strategy development and
execution. The process of developing and implementing strategy is iterative and not necessarily
sequential we will explore this as well.

Our viewpoint will be that of the CEO who has responsibility for the long-term health of the business or
the firm.

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Learning Objectives
Strategic analysis assumes that most resource- and product markets are imperfect, providing firms with
the opportunity to generate above-normal profits. Opportunities emerge as industry conditions change, or
are changed by innovating firms. Firms create competitive advantage by understanding and responding
to these opportunities through their strategies effective strategies implemented successfully lead to
superior performance. Successful firms, be it a single business or a corporate, are faced with the
challenge of being able to sustain their performance against competitive rivalry and changes in the
environment. The first two modules explore these themes in various ways, and shall seek to develop
understanding of various conceptual frameworks and analytical techniques that will help you to:
Assess the structure of an industry and its influence on potential for profitability of firms in the industry
Assess a firms resources and organizational capabilities for their ability to generate competitive
advantage
Develop a business strategy based on understanding of the industry/ market, the resources/ capabilities
of the firm and its competitive advantage
Evaluate the need for vertical integration and how to succeed in it
Evaluate a firms diversification/ conglomerate strategy
Evaluate a firms global strategy

Strategy execution is an art, and many CEOs and managers have made their name and fame in the
brilliance they showed in managing the implementation process in their enterprises. A great strategy
poorly implemented is a failed strategy. In comparison, a good strategy implemented well, and adapted
for the changing realities that unfold over time can lead to superior performance outcomes. The last
module of this course aims to anchor this understanding and underlying concepts strongly in your
thinking. More specifically, at the end of the course, you will be able to:
Appreciate the process of strategic management
Understand the key elements of successful implementation of strategy, such as aligned structure,
communication/ information sharing, performance management, organisational culture and leadership
Appreciate the holistic nature of strategic change process, and understand how the various key
elements link up to create a winning execution

Pedagogy
Learning will primarily be facilitated through discussion of cases, as the concepts and techniques in
strategic management are best understood through practice. The effectiveness of case teaching method
depends on both the instructor and the participants. The students, as participants to the case discussion,
have the responsibility to prepare for the case prior to the session, and actively participate in the case
discussion.

Preparing for the Case Discussion

For the participants to derive the best learning experience from the sessions, prior preparation for case
discussions is essential and necessary. For each session, readings and cases have been assigned. Prior
to participating in the sessions, the students shall go through the relevant readings and teaching case and
analyse the case with specific reference to the discussion questions. In analysing the case, the concepts
in the relevant readings shall be applied. As we progress through the course, it would be useful to
integrate the learning from prior sessions into the preparation. Many of the discussion questions would
require numerical estimates based on data provided in the case. Students are encouraged to carry out
relevant estimates and bring their results to the class. The numerical estimates themselves do not
become the answer to discussion questions, but will help the student in anchoring the responses with
analysis.

There are no right and wrong answers to any business situation or issue, as managers often work with
insufficient data and time. While it is often possible to judge the correctness of a decision with hindsight,

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that is not the primary learning objective. Rather the objective is to inculcate in the students the ability to
analyse situations and arrive at conclusions that are most appropriate given the available information; the
appropriateness being judged on the basis of consistency of the line of thought that leads to the
conclusion. The students, in preparing for the case discussion, shall focus their analysis on:

Understanding the business situation/ problem in as detailed and nuanced a manner as is possible
Applying the conceptual frameworks and techniques to address the situation/ problem
Coming up with explanations and conclusions that are internally consistent and logical, that directly
addresses the situation/ problem

Participating in Case Discussions

Discussions on the cases assigned for each of the sessions is expected to provide the students with the
understanding and application of relevant conceptual frameworks and analytical techniques. While the
instructor shall moderate and guide the case discussion, active participation by the students is essential
for the case discussion to deliver value in the classroom.
Effective class participation requires the students to:
Prepare well for the class (summarised points of view based on case analysis and readings)
Participate meaningfully in the class discussion (clear and concise articulation of ones point of view,
without repeating/ paraphrasing what someone else has said already)
Understand differing points of view
Synthesize learning from the discussion

Class participation gives the students the opportunity to practice and develop their ability to add value to a
discussion. So prepare well, and do not hesitate to participate in the class discussion.

Evaluation
The evaluation shall comprise of four components:
Class Participation 20%
In-class Surprise Quiz 10%
Mid-term Examination 35%
End-term Examination 35%

Class Participation

Active participation in the class discussion by the students is absolutely essential for the effectiveness of
teaching through cases. This component of evaluation seeks to reward students for participating in the
class in a well-prepared, well-structured and meaningful way that enhances the learning experience of all
including the instructor. Evaluation will cover both the quality and frequency of participation across all the
sessions in this course.

Quiz

This is an individual assignment. Three to four unannounced quizzes shall be taken at the beginning of
any of the sessions in this course. Preparation for the class readings and case analysis is adequate to
answer the quizzes successfully. The quizzes shall be administered during class time and shall last 5-10
minutes depending on the questions asked. The quiz shall be taken at the start of the class. Students
entering the class after the quiz has started cannot take the quiz please be on time to take the quiz.
Since none of the quizzes will be announced in advance, absentees are not eligible for make-up quiz.

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Mid-term & End-term Examinations

These are individual assignments. The exams shall be open-book case-based, and shall test the students
in their understanding of the concepts and techniques covered in the course. Case analysis shall require
the application of one or more of the concepts/ techniques covered in the module. Specific exam
questions shall be given based on the case (to be provided at the time of the exam) and the students are
expected to respond in an essay format for each of the questions, backed by analysis of data in the case,
where relevant.
The examinations will be a case-based open book, of three hours' duration each. The students will be
provided with a case and a set of questions at the start of the exam. Students are expected to answer
each of the questions in reference to the case in essay format, supported by analysis of quantitative/
qualitative data from the case. Students are free to refer to any printed or written material they bring to the
exam hall. While students can refer to the materials brought with them, they are not allowed to exchange
materials with other students during the exam, or request the invigilator to provide specific materials. It is
the student's responsibility to bring the required materials. While use of calculators is allowed during the
exam, use of laptops and smartphones are not. Reading and analysis of case has to be done individually
and no discussion is permitted among students during the exam.
In answering the exam, students are expected to apply the concepts and frameworks covered during the
course. Precise and concise articulation will be valued more than long-winded stories. Logical, well-
reasoned and data-supported conclusions will be valued more than unsubstantiated opinions and global
statements. Students are urged to explicitly state any assumption taken in the analysis. While multiple
positions and options may be considered for analysis, the response to each question should be summed
up with one clear position and/ or conclusion.

Course Materials
Robert M. Grant, Contemporary Strategic Management, 6th Ed. Wiley-India (Blackwell
Edition), 2008
Session readings and cases available in the course pack
Contacting the Instructor
Do not hesitate to approach the instructor for clarifications or additional inputs.

Schedule of Topics

Session 1& 2: Introduction to Strategic Management

Introduction to the module.Explore how to understand the way a business is managed and what is
strategic about it. Discuss the relevance of mission, visionand values in the context of strategic
management.

Readings:

Chapters 1& 2 (Grant)

Porter, M. E. (1996) What is Strategy? Harvard Business Review, 74(1), Nov-Dec 1996
Collins, J. C., &Porras, J. I. (1996) Building Your Companys Vision, Harvard Business Review, Sep-
Oct 1996, p.65-76

Case: NarayanaHrudayalayaHeart Hospital Cardiac Care for the Poor (HBS Case 9-505-708)

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Supplement: The Henry Ford of Heart Surgery(WSJ article by GeetaAnand, 25 Nov 2009)

Module 1: Competitive Strategy

Sessions3&4: Industry Attractiveness &Firm Performance

Explore how the structural features of an industry influence the potential for profitability for firms in the
industry. Discuss the benefits and limitations of industry analysis as a framework to explain/ predict firm
performance.

Readings:

Porter, M. E. (2007) Understanding Industry Structure, HBS Note (9-707-493)

Chapter 3 (Grant)

Case: Michelin in the Land of Maharajahs (A): Note on the Tire Industry in India (Ivey Case 907M30)

Session 5: Competitive Strategy (1): Understanding Competitive Advantage

Explore how to identify and explain competitive advantage, and how competitive advantage leads to
superior performance. Specifically discuss how differentiation advantage can be the basis of superior
performance.

Readings:

Ghemawat, P. &Rivkin, J. W. (2006) Creating Competitive Advantage, HBS Note (9-798-062)

Chapters 7 & 9 (Grant)

Case:Singapore International Airlines: Strategy with a Smile (Thunderbird Case TB0173)

Session 6: Competitive Strategy (2): Creating Competitive Advantage

Understand how competitive advantage can be created. Explore the relevance of value chain analysis in
identifying sources of competitive advantage and the importance of business models in creating
competitive advantage.

Readings:

Walters, D. & Lancaster, G. (2000) Implementing Value Strategy through the Value Chain,
Management Decision, 38(3), p.160-178
Johnson, M. W., Christensen, C. W. &Kagermann, H. (2008) Reinventing your Business Model,
Harvard Business Review, Dec 2008, 10p.

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 Chapters 5, 7& 8 (Grant)

Case:Nirma& HLL: Mother of All Battles (IIMC Case)

Session 7: Competitive Strategy (3): From Competitive Advantage to Competitive Strategy

Understand and practice the development of competitive strategy. Explore the interdependencies among
competitive advantage, resources & capabilities and business strategy.

Readings:

Brandenburger, A. M. & Stuart, Jr., H. W. (1996) Valued-based Business Strategy, Journal of

Economics & Management Strategy, 5(1), p.5-24
Ghemawat, P. (1991) Commitment: The Persistence of Strategies, Chapter 2 in Commitment, Free
Press, NY
Ghemawat, P. (1991) Choice: Making Commitments, Chapter 3 in Commitment, Free
Press, NY

Case:Curled Metal Inc. Engineered Products Division (HBS Case 9-709-434)

Session 8: Competitive Strategy (4): Sustaining Competitive Advantage

Understand the sources of competitive advantage and the basis for sustainable competitive advantage.
Specifically explore how cost advantage can be sustained over time and against competitive retaliation.

Readings:

Collis, D. J. & Montgomery, C. A., (2008) Competing on Resources, Harvard Business Review, Jul-
Aug 2008
Ghemawat, P. & Pisano, G. (1997) Sustaining Superior Performance: Commitments and Capabilities,
HBS Note 9-798-008, 20p.

Case: Wal-Mart Stores in 2003 (HBS Case 9-704-430)

Module 2: Corporate Strategy

Session 9: Corporate Strategy (1): Scope of the Firm& Vertical Integration

Readings:

Chapter 13 (Grant)
Stuckey, J. & White, D. (1993) When and When Not to Vertically Integrate, Sloan Management
Review, 34(3), p.71-83

Case: Birds Eye and the UK Frozen Foods Industry (A) (HBS Case 9-792-074)

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Session 10: Corporate Strategy (2): Related Diversification

Readings:

Prahlad, C. K. & Hamel, G. (1990) The Core Competence of the Corporation, Harvard Business
Review, May-Jun 1990, p.79-91
Campbell, A., Goold, M. & Alexander, M. (1995) Corporate Strategy: TheQuest for Parenting
Advantage, Harvard Business Review, p.120-132
Chapters15& 16 (Grant)

Case: Newell Company: Corporate Strategy (HBS Case 9-799-139)

Session 11: Corporate Strategy (3): Conglomerates

Readings:

Readings for session 9

Goold, M., Pettifer, D. & Young, D. (2001) Redesigning the Corporate Centre, European Management
Journal, 19(1), p.83-91
Goold, M. &Luchs, K. (1993) Why Diversify? Four Decades of Management Thinking, Academy of
Management Executive, 7(3), p.7-25

Case: Danaher Corporation (HBS Case 9-708-445)

Session 12: Corporate Strategy (4): International Strategy

Understand the concept of global strategy. Explore the differences between operating in domestic
markets as against globally.

Readings:

Chapter 14 (Grant)
Ghemawat, P. (2007) Managing Differences: The Central Challenge of Global Strategy, Harvard
Business Review, Mar 2007, 11p.

Case: Whirlpool Corporations Global Strategy (Thunderbird Case TB0175)

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