Strategic Management in International Business

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Carleton University
School of Business

International Business Strategy

Winter, 2001

PROFESSOR:
Ian Lee, Ph.D
CLASS SCHEDULE: 479A: Monday 8.30 AM - 11.30 AM
CLASS ROOM:
Room 415, Southam Hall
OFFICE HOURS:
Email: ianlee@sympatico.ca
(email requests for meeting with brief explanation of
issue/problem  meetings arranged within 24 hours)
Phone: 520-2600 x 2375 (Room 807, DDT)
PREREQUISITE:
Fourth year honours business standing: Students
without this prerequisite will be deregistered.
REQUIRED TEXTS Hill and Jones, Strategic Management, 5th Edition

SUPPLEMENTARY READINGS

M. Porter, What is Strategy?, HBR, N-D, 1996
M. Porter, How Competitive Forces Shape Strategy, HBR, M-A, 1979
M. Porter, From Competitive Advantage to Corp. Strategy, HBR, M-J, 1987
M. Porter, “Competition in Global Industries: A Conceptual Framework”, M.
Porter, Competition in Global Industries
Alfred Chandler, “Evolution of Modern Global Competition”, M. Porter,
Competition in Global Industries
Prahalad & Hamel, Core Competence of the Corporation, HBR, M-J, 1990
Collis & Montgomery, Competing on Resources, HBR, J-A, 1995
Campbell, Goold & Alexander, Corporate Strategy, HBR, M-A, 1995
Collis & Montgomery, Creating Corporate Advantage, M-J, 1998
C. Markides, To Diversify or not to Diversify, HBR, N-D, 1997
M. Goold & A. Campbell, Desperately Seeking Synergy, HBR, S-O, 1998

OUTSIDE RESEARCH

You should read the business press, as firms are often analysed from a strategic
perspective. The following are especially helpful: Fortune
(http://www.fortune.com); Wall Street Journal (http://www.wsj.com); Economist

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(http://www.economist.com); Harvard Business Review (http://www.hbsp.edu);
Euromoney (http://www.euromoneyplc.com); Financial Times
(http://www.ft.com); Business 2.0 (http://www.business2.com); Red Herring
(http://www.redherring.com); e-company (http://www.ecompany.com);
Bloomberg (http://www.bloomberg.com); Reuters (http://www.reuters.com);
CNN f/n (http://www.cnnfn.com); Money (http://www.money.com); e-
commerce Times (http://www.ecommercetimes.com); The Street
(http://www.thestreet.com); Fast Company (http://www.fastcompany.com);
The Motley Fool (http://www.fool.com); WIRED! (http://www.wired.com);
The Standard (http://www.thestandard.com); New York Times
(http://www.nytimes.com); Washington Post (http://www.washingtonpost.com)

COURSE DESCRIPTION

The International business strategy course is grounded on the fundamental
principles of strategic management and focuses on strategy making in business
corporations. Emphasis is on corporate and business level strategic analysis,
strategy formulation and implementation. Strategic management emphasizes the
determination and evaluation of environmental opportunities and threats in light
of strengths and weaknesses in the organization’s value chain in order to
enhance its core competencies and craft a sustainable competitive advantage.
The course will examine the firm’s environments – especially the international
environment - using the tools of analysis such as 5 Forces and the value chain.
We will also examine the firm’s corporate and business strategies. Finally, we
will specifically examine the firm’s international strategies, the nature and form
of international business arrangements, to determine if they fit within the firm’s
overall global strategic position. The course serves to integrate and synthesize
knowledge acquired in the functional disciplines in a business school by
application of acquired functional skills to corporate and business strategic
analysis.

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COURSE OBJECTIVES

1.
To familiarize the student with strategic thinking and its component
elements, the identification of strategic options and techniques for
strategy selection.

2.
Through case analysis, to provide an opportunity to apply functional
skills in analysing business situations of strategic import and to
recommend appropriate strategies.

3.
To understand key strategic concepts such as corporate strategy,
business strategy, driving forces, key success factors, value chain
analysis economies of scope, and sustainable competitive advantage

ATTENDANCE AND PARTICIPATION

The student is encouraged to attend all classes including case presentations for
the final exam will include questions pertaining to issues raised during case
presentations. Students will find the final exam very difficult if classes are
missed. It is the responsibility of each student to obtain notes for any classes
missed. In fairness to other students, they will NOT be provided by the
Instructor.

ASSIGNMENTS

Students will assign themselves to groups of 3 - 5 persons (MAXIMUM).
Each group will be responsible for the following group assignment:

1.
Each group will prepare a case selected from the textbook, which will be
presented verbally to the class (worth 15% of final mark), lasting
approximately 30 minutes, pursuant to the schedule below. This mark
will be based on the effectiveness of the presentation. An Executive
Summary MUST be distributed to the class on the day of presentation
with one line summaries under the headings listed in the Case Report
Format below. (Include group number and the names of the individuals in
the group).

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2.
A written report of the case must be submitted to the Professor 7 days
after the verbal presentation (worth 35% of the final mark). The written
report will be approximately 20-40 pages in length (double spaced).
Please ensure that the Executive Summary and supporting documentation
is included (Include group number and names of the individuals).

3.
Each group will present a strategic critique of the verbal case presentation
of one other group (worth 10% of the final mark). The critique must
NOT re-present the case BUT must focus on flaws in analysis and faulty
conclusions and if necessary recommend alternate strategies.

GRADING SYSTEM

1.
Verbal Case Presentation............................................................. 15%
2.
Written Case Report ................................................................... 35%
3.
Case Critique.............................................................................. 10%
3.
Final Examination........................................................................ 40%

TOTAL ............................................................................................. 100%

INTRA-GROUP EVALUATION

By the last day of class each student must send me an email headed 469A or
469 B, Group x. In the email, they must list the first and last names of each
person in the group. Each student has 100 marks to distribute amongst their
group. If the student believes that everyone did approximately the same amount
of work, they are to give everyone the same percent. If the student believes that
the work was not evenly shared, they should assign marks proportionate to each
student’s contribution.

Marks will be adjusted downward if:

-there is a consensus within the group with respect to someone’s participation
(consensus is defined as three or more out of five people in the group marking
someone down), and
- there is a significant difference in marks (i.e. marks will not be lowered if
people give someone 18 and everyone else 21)

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- a person will not be marked down if the group did not speak to that individual
ahead of time regarding group expectations and performance issues

Note that while it is possible for someone to go down (see above), it is also
possible for someone to get a higher mark than the group without the group
being penalized. This could happen if everyone indicated that one person had
taken a real leadership role, completed a lot of extra work etc.

CHANGE OF GRADE

Informal requests for grade increases will be denied. The student may file an
appeal of the final grade pursuant to university regulations.

DISABILITY

Students with a disability who require academic accommodation, must
contact the Paul Menton Centre to complete the required forms at least two
weeks prior to the first in-class, and no later than November 6 for December
exams and March 12 for April exams.

PLAGIARISM

Borrowing someone else’s answers, unauthorized possession of tests or
answers to tests, or possession of material designed in answering exam
questions, are also subject to university policy regarding instructional
offenses.

The Undergraduate Calendar defines plagiarism in the regulations on
instructional offenses as: “to use and pass off as one’s own idea or product
work of another without expressly giving credit to another.”

FORMAT OF CASE REPORTS

1. Executive Summary - 1 pg distributed to class (include names)
2. Brief Overview of Case
3. Macro: PEST O/T Analysis
4. Industry Analysis (for each of the firm’s businesses):

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- Porter’s 5 Forces Analysis
- Strategic Group Map Analysis
- Major Competitor Analysis
- Driving Forces Analysis
- Key Success Factors Analysis
- Overall Industry Attractiveness
5. Business Unit Analysis (for each of the firm’s businesses):
- Porter’s Value Chain (S/W or if applicable ABC analysis)
- Financial Analysis: Investment Return, Financial Strength,
Management Performance (see Appendix at end of syllabus)
- Firm’s Core Competencies, Core Products, End Products
- Firm’s Sustainable Competitive Advantage
Mission Statement and Corporate Objectives
Overall Firm (Un)Attractiveness
6. Strategic Issue(s): Corporate Level; Business Level; Functional Level
7. Strategy Alternatives: Corporate Level, Business Level, Functional Level
8. Strategy Choices and Rationale
9. Appended Documentation i.e. graphs, tables, charts

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SCHEDULE

Jan. 8
Intro to Corporate and Business Strategy
Create groups and select case for group analysis
Chapter 1: Strategic Management and Strategic Competitiveness
M. Porter, What is Strategy?

Jan. 15
Chapter 3: External Environment
M. Porter, How Competitive Forces Shape Strategy
Michael Porter on 5 Forces of Competition

Jan. 22
Chapter 4: Internal Environment: Resources, Capabilities &
Competencies
Prahalad & Hamel, Core Competence of Corporation
Stalk et al, Competing on Capabilities
Collis & Montgomery, Competing on Resources

Jan. 29
Chapter 9 & 10: Corporate Strategy
M. Porter, From Competitive Advantage to Corporate Strategy
Collis & Montgomery, Creating Corp Advantage, M-J, 1998
Campbell et al, Corporate Strategy, HBR, M-A, 1995
C. Markides, To Diversify or not to Diversify, HBR, N-D, 1997
M. Goold, Desperately Seeking Synergy, HBR, S-O, 1998

Feb. 5
Chapter 8: International Strategy


M. Porter, “Competition in Global Industries: A Conceptual
Framework”

Alfred Chandler, “Evolution of Modern Global Competition”,

Feb. 12
Chapter 5, 6 and 7: Business Strategy
M. Porter, What is Strategy?

Feb. 19
Winter Break

Feb. 26
In-class exam

Mar. 5
G1: KFC critiqued by G6; G2 Outback critiqued by G7

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Mar. 12
G3 Caterpillar critiqued by G8; Komatsu critiqued by G9



Mar. 19
G5 Enron in India critiqued by G10; G6 Nestle Global Strategy
critiqued by G1

Mar. 26
G7 Pharmacia & Upjohn critiqued by G2; G8 Monsanto critiqued
by G3



Apr. 2
G9 Sandvik AB critiqued by G4; G10 ABB in China critiqued by
G5

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APPENDIX: WRITTEN ASSIGNMENTS

One person should be assigned the role of editor and that person should
ensure that the sections completed by the individuals in the group, are
integrated into a seamless web so that the entire report is consistent.

FORMAT

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use Kate Turabian, A Manual for Writers of Term Papers
?

require a 1 page Executive Summary i.e. an Abstract
?

require a Table of Contents
?

require a Bibliography
?

require a brief Introduction - a paragraph or so - situating the case
?

paginate in top right corner
?

use footnotes - not endnotes - (available in WordPerfect or Word)
?

cite all sources of information including material from World Wide Web
?

use 14 point fonts for main text
?

quotations more than 2 lines long should be single spaced and indented at
both the right and left margins using fonts 2 points smaller than the text
but do NOT insert quote marks at the beginning and the end

GRAMMAR, SYNTAX, STYLE

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colloquialisms are generally acceptable in speech but NEVER in a written
report e.g. "company was burned", "executive was fried"
?

delete as many adverbs as possible e.g. "perfectly clear"
?

delete as many adjectives as possible e.g. terrible incomprehension,
phenomenal advantages, blatant inequity, very dependent
?

use the simple past tense e.g. "the firm has already been through" should
read "the firm went"
?

avoid lazy phrases and cliches e.g. "at this point in time", "it should be
noted", "we wish to point out", "as you may know"
?

only use last names - not first names - of CEOs
?

do not use the word "feel" - analysts think, believe, judge, determine,
decide, ascertain, resolve, assume, infer, deduce, conclude, are of the
opinion, but never "feel" - this is a university - not Hollywood

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APPENDIX: FINANCIAL ANALYSIS

1. Purpose

- evaluate the past
- forecast the future

2. Comparisons

- inter-firm
- intra-firm
- trends
- variances

3. Types of Analysis

- common size
- ratio

4. Ratio Analysis Framework

A. Investment Return
- Capital market Ratios: EPS, P/E

B. Financial Strength
-Liquidity Ratios: Current, Acid Test
- Solvency Ratios: D/A, D/E, Interest Coverage, Cash Flow/Debt

C. Managment Performance
- Profitability Ratios: Gross Margin, Net Profit Margin, Return on Assets,
Equity, Capital
- Resource Utilization Ratios: Asset Turnover, Payables Turnover

NOTE: YOU MUST INTERPRET THE TRENDS OF EACH OF THESE
RATIOS TO EXPLAIN WHAT EACH MEANS IN TERMS OF THE
FIRM’S STRATEGIC DIRECTION

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