1. Strategic Management Dr. Don Neubaum dneubaum@bus.oregonstate.edu@bus.oregonstate.edu 541-737-6036 400E Bexell

2. Class Sessions Monday & Wednesday - 8:00am Monday & Wednesday - 10:00am Both in 412 Bexell Monday & Wednesday – 2:00pm 326 Bexell

3. WIC Writing Intensive Curriculum Writing as a critical aspect of the learning process Significant portion of your grade – over 30% Reflecting writing with typical business content

4. Individual Grades - 80% Midterm/Final – 20% each (40% total) Industry analysis – 20% Case write ups – 2 @ 5% (10% total) Strategic issue summary – 10% Group Grades – 20% In-class case exam – 5% Strategic plan presentation – 15% Grading

5. Midterm and Final Multiple Choice and Short Answer Midterm – 5/2 Chapters 1-4 Final – TBA Chapters 5-13, non-cumulative Both exams will focus on lecture material and text terms.

6. Typical Questions What four generic strategies exist? Why does Porter call them generic? List and describe the three international corporate strategies. According to Porter, when should firms diversify? What rules does he forward to judge the merits of diversification? What is the goal of executive compensation? Why is it so difficult to design an effective compensation package? What are the axis on the BCG and the GE Nine-Cell Matrix? Which model is superior and why?

7. Industry Analysis Within teams, you will select one of the following industries Airlines e.g. Delta, Southwest Gaming & Casinos Harrah’s Cruise Line Royal Caribbean Beer Coors Personal Computer Dell Guidelines provided on COB storage Due November 6 th Highest team average will receive 5 extra points

8. Case Write Ups Choose 2 of 3 assignments Napster (10/9), Perdue (10/18), or Nike (11/15) 3 pages Specific questions and guidelines will be provided for each case You can do all 3, drop the lowest Re-write 2 with feedback, due the day of the final exam.

9. Strategic Issues Start most class sessions with 2-3 of these Articles from WSJ, Forbes, Fortune, etc. highlighting an aspect of strategy 2 page summary and a short (3 - 5 slides) 5 minute presentation Sign up sheet will be distributed Graded equally on paper and presentation

10. Group In class Case Exam Group Exam – 10/25 Case handed out a week ahead of time Questions emailed to you that morning Answers due by the end of the day Work in your group using laptop/PC before you email me your answers that evening.

11. Group Strategic Plan and Presentation Groups of four or five Last week of the quarter – November 27 & 29 Company of your choice, with my approval PowerPoint presentation of 20 minutes Sign up sheet for time slots will be distributed

12. Peer Evaluations Your group members will evaluate your contribution throughout the quarter Your group grades can be adjusted up and down, based upon their assessment of your contribution and effort.

13. One Minute Papers Write a short, ungraded essay at the end of most classes: 1) something you learned 2) giving an example 3) asking a question or clarification 4) making a comment 5) anything else Paper notebook with name and section marked on the cover

14. Participation While not specifically graded, I will be assessing your attendance, participation and one-minute papers. Final grades might be adjusted up and down, based upon my assessment. Students attending every class period will receive 5 points on the final

15. Golden Rule “No Tolerance” policy for cheating Guilty parties receive an F and will be dropped from the class Disciplinary actions may be taken

16. Standing-O Earn 5 bonus points on midterm Announce to us a recent accomplishment or achievement While you may do as many Standing-Os you want, you can only earn the 5 points once

17. Team Specials Teams can earn points from “Team Specials” tasks and assignments These points are tabulated over the quarter Students may also request team special points, subject to instructor approval Awards: Gold – exempt from Final Silver – 15 points added to midterm Bronze – opt out of one essay on final

18. Chapter One Basic Concepts of Strategic Management

19. Why do we need strategy? The reasons why firms succeed and fail is perhaps the central question in strategy Answers the fundamental question of the firm - who and what we are

20. Strategic Management Defined decisions and actions that determine long-term performance formulation and implementation of plans designed to achieve objectives an action managers take to achieve one or more of an organization’s goals unifying theme that gives coherence and direction to organizational/individual decisions game plan management has for positioning the company in its chosen market, competing successfully, satisfying customers, and achieving good business performance analysis, decision, and actions an organization undertakes in order to create and sustain a competitive advantage – the best predictor of above average profits

21. So….how can firm’s be profitable ? 1)Choose an attractive industry in which to compete – 2)2) Attain a competitive advantage within an industry -

22. Levels of Strategic Management

23. HP’s Corporate Strategy Enterprise Storage & Servers HP Services SoftwarePersonal Systems Imagining and Printing Financial Services Where are we going to compete? What businesses are we in?

24. HP’s Business Strategy Enterprise Storage & Servers HP Services SoftwarePersonal Systems Imagining and Printing Financial Services How are we going to compete against Dell? How are we going to compete against Sun Microsystems? Xerox? Cannon?

25. HP’s Business Strategy Enterprise Storage & Servers HP Services SoftwarePersonal Systems Imagining and Printing Financial Services Profits are won and lost at the business level!!

26. Two Models of Profitability I/O Model (Industrial/Organizational Economics Model) Resource Based View of the Firm

27. I/O Model General Environment Industry Environment Competitive Environment Strategy & Profitability 3 Assumptions 1) external environment imposes pressures/constraints 2) firms within an industry possess similar resources 3) resources are highly mobile Therefore, firms must identify attractive segments within an industry and acquire skills/resources to achieve superior profitability It’s about finding the right “place” to compete. General Environment Industry Environment Competitive Environment

28. Resource Based View The Firm’s Resources & Capabilities Strategy & Performance 3 assumptions 1) internal environment critical to strategic action 2) firms are bundles of unique resources 3) resources may not be mobile across firms Therefore, firms must develop the skill and resources to take advantage of opportunities in their industries It’s about finding the right “way” to compete.

29. Generic Strategies Broadly speaking, only 2 “ways” to compete Differentiation Low Cost

30. What is Strategy? Strategy is not doing similar activities better than your rivals – that’s operational effectiveness continual improvement not a sustainable advantage industry-wide cost reductions do not lead to increased profitability examples: PCs, automobiles, airlines

31. What is Strategy? 1) Strategy is performing different activities or performing similar activities in a different way Strategy is about positioning a) Variety-based positioning b) Needs-based positioning c) Access-based positioning

32. What is Strategy? 2) Strategy is about choosing a position which requires tradeoffs, choosing what not to do without tradeoffs, all firms would imitate Tradeoffs arise from inconsistent image/reputation different activities, products, equipment, employees, skills, systems, machines priorities, internal coordination, and control

33. What is Strategy? 3) Strategy is about combining activities as advantages come from fit and reinforcing Operational effectiveness is about excellence in individual activities Fit/integration increases sustainability by reducing imitability

34. What is Strategy? 4) The desire to grow is most threatening to an effective strategy

35. What do Good Strategies Have in Common? Consistent, long-term goals and objectives Reflects and understanding of the environment Takes resources into consideration Effectively implemented Strategic Effectiveness (fit)

36. Mission & Vision Today vs. tomorrow fundamental purpose which sets the firm apart from other firms of its type Based on several fundamental beliefs product, service, customer, market, geographic domain customer need growth, profitability - outcome, not a goal management philosophy, self-concept and values

37. Objectives Turns mission into performance outcomes Organizations produce what is measured Strategic or financial, long or short term Keep in mind what will the industry/competition allow what will it take to succeed does this objective support what we are trying to do

38. 6 Characteristics of a good objective 1. 2. 3. 4. 5. 6.

39. Evolutionary and Emergent Nature of Strategy Intended Strategies Deliberate Strategies Unrealized Strategies Realized Strategies Emergent Strategies Causes of emergence?  Unpredictability  Lower-level management  Serendipity