8/19/2016 1
Instructor: Qi Zhu
Office: 323N
Phone: 480-438-3662
Email: [email protected]
Office Hours: Friday 2:00-4:00 PM & by appointment
WPC480
Strategic Management
8/19/2016 2
A Little about Qi
•Stage 1: computer geek Qi
–Bachelor degree and Master degree are both in
computer science discipline
•Stage 2: business expert Qi
–Served in many different organizations such as CNAO
and domestic consulting firms
•Stage 3: PhD student Qi
–W. P. Carey school of business, ASU
"
W.P.
CAREY
SCHOOL
of
BUSINESS
ARIZONA
STATE
UNIVERSITY
STRATEGIC
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FRANK
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Let
8/19/2016 3
Our Textbook
8/19/2016 4
What is Strategic Management?
•Strategic management is the integrative
management field that combines analysis,
formulation, and implementation (the AFI
framework) in the quest for competitive
advantage.
•In this class we will learn to
–Analyze and manage organizational environment
–Analyze and develop organizational resources
–Formulate organizational strategies
–Implement organizational strategies
8/19/2016 5
Learning goals
•The W.P. Carey School of Business has
established the following learning goals for its
graduate students:
–Critical Thinking
–Communication
–Strategic Decision Making knowledge
–Ethical Awareness and Reasoning
–Global Awareness
•This course has significant coverage of all the
items, especially the first three
8/19/2016 6
Course Requirements
Six take
home quizzes
5%
2 points/quiz X 6 (Best 5)
Class
Participation
10%
20 points
Analyses
of three cases
51%
34 points/case
X 3
Current
event presentation
5%
10 points
Midterm
or final exam
20%
40 points
Final project
presentation
9%
18 points
Total
100%
200 points
8/19/2016 7
Readings and the key Tasks
D
R w will cover
T
19-
A
Syllabus and Chapter 1
26-
A
Chapter 5
2-
S
Chapter 2 and 12
9-
S
Chapter 3 and Cola Wars
Case
Current event presentation 1
16-
S
Chapter 4 and Wal
-Mart Case
Current event presentation 2
23-
S
Mid
-term
30-
S
Chapter 6 and Tesla Motors
case
Current event presentation 3
7-
O
Chapter 6 and
AirAsia case
Current event presentation 4
14-
O
Chapter 7 and Apple
case
Current event presentation 5
21-
O
Chapter 8 and Newell
case
Current event presentation 6
28-
O
Chapter 9 and HP
-Cisco case
Current event presentation 7
4-
N
Chapter 10 and Haier
case
Current event presentation 8
11-
N
Veterans day No class
18-
N
Final project presentation 1
25-
N
Thanksgiving No class
2-
D
Final project presentation 2
9-
D
Final Exam
8/19/2016 8
The Important Days
•Aug 26th : Let me know a) your preferred group members & b) the
three cases you want to analyze
•Sept 2nd : I will let each group know a) the date of your current event
presentation & b) the sequence and the date of your final project
presentation
•Sept 23rd : Midterm (required)
•Oct 21st: Let me know your final project topics
•Nov 18th and Dec 2nd : Final project presentation
•Dec 9th : Final exam (optional)
8/19/2016 9
Grading
•Course grades are assigned as the follows: 195-200= A+; 188-194.9=A;
181-187.9=A-; 174-180.9=B+; 167-173.9=B; 160-166.9=B-; 153-
159.9=C+; 140-152.9=C; etc.
•Final point scores for the course are not rounded up. So, for example, a
final score of 189.9 would yield an overall course grade of B+ not A-
•No extra credit assignments or other options for improving a course grade
•Address your concerns about your performance or grades with me as soon
as possible
•No case assignments will be accepted after the beginning of class in which
the assigned case is discussed
8/19/2016 10
Classroom Policies &
Academic Integrity
•Come to each class on time
•In classroom, the following activities are not allowed:
–Reading newspaper or unrelated materials
–Using electronic devices
–Talking with each other on issues unrelated to class
•Zero tolerance for cheating or plagiarism on all
assignments: penalty ranges from a full 2-letter
reduction in final grade to expulsion from the program
8/19/2016 11
Questions?
"
W.P.
CAREY
SCHOOL
of
BUSINESS
ARIZONA
STATE
UNIVERSITY
U.S.
motorcycle
sales
(in
thousands
of
units)
30075
250-
200-
150-
_|
Honda
@
Others
100-
= =
of
i
1960
1961 1962 1963 1964 1965
1966
8/19/2016 12
8/19/2016 13
How could Honda achieve such
fast growth in sales and market
share in the U.S.?
8/19/2016 14
STRATEGY!
What was Honda’s strategy?
How was it formed?
"
W.P.
CAREY
SCHOOL
of
BUSINESS
ARIZONA
STATE
UNIVERSITY
8/19/2016 15
What to sell?
Lighter vs. Heavier
Mean
\\l
PCAREY
OL
of
BUSINESS
UNIVERSITY
ae
1a
8/19/2016 16
Who’re the marketing targets?
Nicer vs. Wider
8/19/2016 17
Dealers and/or others?
How to sell?
8/19/2016 18
A well-designed strategy
(Boston Consulting Group, 1975)
•Honda thought through all the potential choices it
would face in the U.S.
–Product mix: light or heavy bikes?
–Target/marketing: which customer groups?
–Distribution channel: dealers or multiple channels?
•Devised a strategy of using its low-cost position in
lightweight bikes (where costs mattered most) to create
a huge pool of demand in the U.S.
•Effectively implement this strategy within the firm
8/19/2016 19
Boston’s analysis
A F I
8/19/2016 20
An emergent strategy
(Richard Pascale, 1984)
•Honda had a failed strategy first, but learned and
reacted quickly
–Product mix: heavier bikes (1958) =>light bikes (1960)
–Target/marketing: The wild ones => the “nicest people”
(1963: “You meet the nicest people on a Honda”)
–Distribution: Dealers (1958) => multiple channels (1960)
•Its success was mostly attributable to abiding by the
Japanese belief that “corporate direction evolves from
an incremental adjustment to unfolding events”
8/19/2016 21
A more possible process
A
F I
8/19/2016 22
What is strategy?
•A firm’s strategy is its theory of how to compete
successfully (Peter Druckers 1994 in HBR)
•What is the most influential theory of “how to
compete successfully”?
–Strategy is the creation of a unique and valuable
position, involving a different set of activities that are
consistent and mutually reinforcing with each other,
that gives a firm sustainable competitive advantage in
each of its markets (Michael Porter, 1996, HBR)
–Strategy requires trade-offs for positioning
8/19/2016 23
The three elements
leading to a good strategy
•A diagnosis of the competitive challenges and
opportunities both externally and internally
•A guiding policy to address the competitive
challenges and opportunities
•A set of coherent actions to implement the
firm’s guiding policy
8/19/2016 24
Strategy across the Levels
•Where to Compete?
–Should GE focus on high-end
manufacturing industry?
•How to Compete?
–Should GE jet engines have better
fuel efficiency than Rolls Royce?
•How to Implement?
–Should GE human resources
recruit more science graduates?
–CORPORATE
Level STRATEGY
–BUSINESS Level
STRATEGY
–FUNCTIONAL
Level STRATEGY
8/19/2016 25
Strategy across the Levels
•Where to Compete?
–Should GE focus on high-end
manufacturing industry?
•How to Compete?
–Should GE jet engines have better
fuel efficiency than Rolls Royce?
•How to Implement?
–Should GE human resources
recruit more science graduates?
–CORPORATE
Level STRATEGY
–BUSINESS Level
STRATEGY
–FUNCTIONAL
Level STRATEGY
"
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8/19/2016 26
Focusing on Industrial Internet
8/19/2016 27
Strategy across the Levels
•Where to Compete?
–Should GE focus on high-end
manufacturing industry?
•How to Compete?
–Should GE jet engines have
better fuel efficiency than
Rolls Royce?
•How to Implement?
–Should GE human resources
recruit more science
graduates?
–CORPORATE
Level STRATEGY
–BUSINESS Level
STRATEGY
–FUNCTIONAL
Level STRATEGY
8/19/2016 28
Have better product
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Shift business model
from Lamps to Lighting solutions
8/19/2016 30
Strategy across the Levels
•Where to Compete?
–Should GE focus on high-end
manufacturing industry?
•How to Compete?
–Should GE jet engines have
better fuel efficiency than
Rolls Royce?
•How to Implement?
–Should GE human resources
recruit more science
graduates?
–CORPORATE
Level STRATEGY
–BUSINESS Level
STRATEGY
–FUNCTIONAL
Level STRATEGY
"
W.P.
CAREY
SCHOOL
of
BUSINESS
RSITY
Headquarters
Corporate
Strategy
Where
to
Compete?
SBU
1
SBU
2
SBU
3
Business
Strategy
Business
Strategy
Business
Strategy
How
to
Compete?
How
to
Compete?
How
to
Compete?
Business
Function
1
Business
Function
2
Business
Function
3
Business
Function
4
Functional
Strategy
Functional
Strategy
Functional
Strategy
Functional
Strategy
How
to
Implement
How
to
Implement
How
to
Implement
How
to
Implement
Business
Strategy?
Business
Strategy?
Business
Strategy?
Business
Strategy?
8/19/2016 31
Organizational Structure and Strategy
8/19/2016 32
How are strategies formed?
8/19/2016 33
The AFI Framework
•Analyze (A): diagnosis of competitive challenges and
opportunities
–External & internal environments (Chapters 3 & 4)
•Formulate (F): a guiding policy
–Business strategies (Chapters 6 & 7)
–Corporate strategies(Chapters 8, 9 & 10)
•Implement (I): a set of activities/coherent actions
–Organizational design & governance (Chapters 11 & 12)
8/19/2016 34
The relationship among AFI?
A F I
8/19/2016 35
An alternative: The strategy formation
process (Mintzberg1985)
8/19/2016 36
A
F I
8/19/2016 37
How are we going to
structure this class?
•Concepts
•Frameworks
•Cases
8/19/2016 38
Concepts and Frameworks
Analysis
External (Industry)
Internal (Organizational)
Strategies
Business level
strategies
Corporate level
strategies
Competitive advantage
8/19/2016 39
Self evaluation standards
•Basic level
–Be familiar with the definition of the key concepts
•Advanced level
–Be familiar with the framework composed of the
key concepts
•Expert level
–Well adopt the framework to analyze the cases
8/19/2016 40
Challenges You Will Face
•A lot of readings & activities (inside and outside)
•Easily getting lost in the first a couple of weeks
•It may take several weeks for you to feel that
everything starts to come together
•But, don’t worry or panic –we’ll work together to
go through this process
8/19/2016 41
Takeaways from today’s class
•What is strategic management?
– An integrative management field that adopts AFI
framework in the quest for competitive advantage
•What is strategy?
–The set of goal-directed actions a firm takes to gain and
sustain superior performance relative to competitors
•What is the AFI framework?
•The structure of this class
8/19/2016 42
What’s next?
•What is Competitive advantage?
•What is Performance?
