OS 432 Org Policy and Strategy Clarkson University School of Business Spring 2004 Mike Wasserman Mon 3/08/04 Business Level Strategy II

Today’s Agenda Questions for Discussion –Defining competitive level strategies –Team discussion Midterm overview Paper 2 guidelines and grading criteria Time for your questions about concepts or material.

Questions for Discussion We concluded last week that generic business-level strategies (differentiation, cost leadership, focus/niche) need to be customized in order to provide uniqueness and barriers to imitation in order to drive competitive advantage. We talked about this ‘customization’ as a way to think about competitive positioning. Chapter 5 deals with ‘competitive strategies’. What are these, especially in relation to the generic business strategies introduced in chapter 4?

‘Customizing’ Business Level Strategies How do we differentiate? How do we price? How do we segment? What is our uniqueness? What are our distinctive competencies? -Efficiency -Innovation -Responsivenss -Quality What value do we provide? What are our customers needs? Who are our customers? How will we satisfy them? Business Definition Value Business Level Strategies What is our cost structure? How do we position ourselves in relation to rivals?

Define each strategy and provide an example Industry Structure Strategy Fragmented Chaining, Franchising, Horizontal Merger, IT Embryonic/Growth Mass Market, Innovation Adoption/Diffusion, Chasm Crossing Maturity Entry Deterral: Product Proliferation, Pricing Games, Maintaining Excess Capacity, Rivalry Mangaement: Price Signaling, Price Leadership, Nonprice Competition, Market Penetration, Product Development, Market Development, Product Proliferation, Capacity Control, Supply and Distribution Decline Leadership strategy, Niche Strategy, Harvest Strategy, Divestment Strategy

Question for Discussion Have there been changes in the length and nature of the maturity phase in recent years? What does this imply? What is game theory and how is it relevant to business level strategies?

Lessons Learned

Midterm Exam In-class on Wednesday. All you need to bring is a pencil or pen. Format: Exam will consist of a 20 multiple choice questions (each worth 1/2 point) and 1 brief essay question (worth 5 points). The exam has a total of 15 points. You will have 75 minutes to complete the exam.

Midterm Exam Material covered: The midterm covers content from course readings (text and articles), course discussion, and may include questions concerning presentations. Your course schedule is the best overview for content coverage. Everything up until the exam, including today, is fair game. My testing philosophy: I try and provide at least one question on every major topic we cover (topics? Use the course schedule!). I emphasize areas of overlap - concepts covered in multiple class periods, or found in text chapters and articles and course discussion. My questions tend to ask you to integrate and apply but are straightforward - they are not designed to be 'trick questions' or 'curveballs'. The key is to know AND be able to integrate and apply the key issues.

Midterm Exam Study Tips: Know most important concepts from each topic and be able to say how those issues are related to other material covered before or after, and be able to think of a good example in the real world. Revisions: You will have the opportunity (it's not mandatory) to submit corrected and justified midterm answers in order to earn back half of the credit you lost. You need to demonstrate that you know what the correct answer is as well as why it is correct in order to earn the credit. Revisions should be word-processed and turned in stapled to your original exam. Revisions should be in paragraph form and specific sources should be included and cited (text pages, article titles, dated course notes). For short essay revisions, you must turn in a completely rewritten essay. Revisions will be due Weds 3/29 at 1:00pm (the start of class - if you bring it in at 1:05, it's late and not accepted). I will return the exams in class on the Monday after break.

Paper 2 The second paper is a brief firm and industry performance analysis that addresses competitive advantage, firm resources and capabilities, and links the two by identifying potential opportunities and problems the firm may face in the next 3-5 years. Your paper should be 2 to 3 double-spaced pages accompanied by appendices containing relevant and appropriate data collected and analyses to be conducted. Part 2 is worth 11 points and is due to turnitin.org no later than noon Friday 3/26 to

Paper 2 Three key issues: 1. Provide performance data for your company and its closest rivals over the last 3-5 years should be briefly summarized in the body of your paper, with supporting data included as appendices. Also, please include summary performance data for the most recently available quarter for both your company and its closest rivals. Performance data should include an assessment of the income statement, balance sheet, and cash flow statement and a set of ratio analyses (see class slides from Friday 2/20). slides 2. After interpreting your data analysis, you should assess whether your firm enjoys competitive advantage and explain why or why not using course concepts. 3. Identify two or three specific resources/capabilities that may help or hinder future performance.

Upcoming Assignments Wednesday: Midterm Exam! For Monday after break: Read Text, Chapter 7 AND Article: Off-the-Shelf Parts Create New Order in TVs, ElectronicsOff-the-Shelf Parts Create New Order in TVs, Electronics We will talk about strategies in technology-oriented industries. This should be a helpful discussion for your second paper!