Strategic Management in the Design and Construction Value Chain

Assignments

This section contains the written assignments to be handed in at each class session, along with questions that students reviewed prior to class to prepare for the case-based discussions.

Assignments: 1 2 3 4 5 6 7 8 9 10

LEC #	TOPICS	CASES	WRITTEN ASSIGNMENTS	DISCUSSION QUESTIONS
1	Purpose of Strategic Planning Industry Value System - Structure	None	None	Who are the participants in the real estate and construction value system? How are firms organized individually to deliver and own projects? How are they collectively organized to deliver projects? How does the physical product flow through this supply chain? How does the money flow? Where do you think are the major areas of economic reward? Of risk? How are firms individually organized to contain risk and to receive reward? Where are there inefficiencies in the system? How is the whole value system optimized for best performance, if at all?
2	Steps in Planning Industry Value System - Risk and Reward	Poland’s A2 Motorway,  Harvard Business School Note 9-202-030.	No written assignment. Prepare to discuss the case in class, including incorporating your judgment of the issues and considering key concepts from the reading.	Notes This is a finance case about one project which we will use to illustrate cash flow and risk allocation issues. Students are not expected to bring sophisticated financial analysis to the discussion at this time. Questions What is the arrangement of this value system? Follow the money. In broad terms, how is the money supposed to flow if the project is successful? In broad terms, who is responsible for what? What are the major risks? How are they described? How well are they understood? Who do you think stands to reap the most reward? Who takes the most risk? Could you define “success” for the whole project including all organizations involved? As leader of one of the organizations, how would you go about planning to be the Owner?The Engineer? The General Contractor? Do you think that the alliance could continue as an operating business on other projects?
3	Market Segmentation: How to Analyze?	Young Canada Dock Builders, The University of Western Ontario, Richard Ivey School of Business Note 9A89-J004.	Consider your options as John Morrison, the CEO of Young Canada. In particular, prepare a market segmentation matrix using the concepts in Chapter 7 of the reading. Consider your choices in how to set it up. What does Young Canada sell to whom? What could they sell to whom? Discuss how this analysis informs your efforts in answering the questions in the case. For example, what insights to you gain about the individual cells in your segmentation diagram? What else would you like to know? Segmentation matrices and other diagrams for this problem set may be hand drawn. I am looking for thinking, not for computer formatting skills.	Consider the 8 steps in planning. How would you answer the questions with respect to Young Canada (not for the written assignment). In what segments might Young Canada compete? What are the pros and cons of each segment? What other steps would the CEO have to take in order to succeed in various segments? What would the resource allocation in the Firm Value Chain look like for the various possible strategies? How much should he spend on marketing? What would you do?
4	Segment Attractiveness: Where to Compete? Generic Strategies	SOHO China, Harvard Business School Note 9-703-011.	Consider your options as a principal of SOHO China. Prepare a market segmentation matrix using the concepts in Chapter 7 of the reading. What does SOHO China sell to whom? What could they sell to whom? Using the Five Forces model from Chapter 1, discuss how some of these segments might or might not be attractive for SOHO from a strategic point of view. Then select up to four different segments and describe how the Generic Strategies discussed in Chapter 2 might apply to competing in these segments. All of the diagrams for this problem set may be hand drawn. I am looking for thinking, not for computer formatting skills. You might also think of other clever ways to efficiently convey the information by combining or modifying some of the tools.	Which segments do you think that SOHO should pursue next? On what do you think they should focus in the long run? Why?
5	Firm Value Chain 1 What Drives a Low - Cost Strategy	Arborite, Harvard Business School Note 9-796-146.	You work in Arborite’s financial department. Brian Nutter has asked you to prepare a strategic analysis to help illustrate the issues as the firm enters strategy and budget discussions. As part of your analysis, prepare a market segmentation matrix for Arborite. Which segments do you feel are attractive, and why? How do handle the issues of multiple sales channels and varying preferences regarding delivery time? What strategies do you feel Arborite should be pursuing? Why? Prepare diagrams of Arborite’s “Firm Value Chain” at present, and then as you propose it should be.  Of particular note, on what areas would you focus in order to execute on your proposed strategy?	Arborite is a supplier to contractors. They have a complex firm value chain and many problems in their business. This is the kind of situation that you might be asked to analyze or even to manage! Where does Arborite fit in the industry value chain? How does Arborite compete: What generic strategies is Arborite pursuing NOW in each segment? What strategies are their competitors pursuing? Do the sales goals generally make sense in light of history and total market size? What would you do about plant capacity? Are there other opportunities that may not be evident in the case? What would you recommend they do?
6	Firm Value Chain 2 What Drives a Differentiation Strategy	KONE: The Monospace Launch in Germany, Harvard Business School Note 9-501-070.	You work at KONE supporting Raimo Hatala. The firm has asked you to prepare a strategic analysis of a number of issues at the firm, including the proposed rollout in Germany. As part of your analysis, prepare a market segmentation matrix for KONE. Which segments do you feel are attractive, and why? What strategies do you feel KONE should be pursuing in various markets? Why? Prepare diagrams of KONE’s “Firm Value Chain” at present, and then as you propose it should be. On what value activities would you concentrate in the future? Why?	Where does KONE fit in the industry value system? How are elevators sold? How does KONE compete: What generic strategies is KONE pursuing NOW in each segment? What strategies are their competitors pursuing? Do the sales goals generally make sense in light of history and total market size? In what ways does KONE believe Monospace to be differentiated? Is this realistic? Do the customers care? How does KONE signal differentiation? How much will the customers value differentiation, if at all? How would you manage the rollout in Germany? Why? What are the firm value chain drivers of a differentiation strategy, in this situation? Should the emphasis be different in the future than presently? What would you recommend they do?
7	Issues in Vertical Integration: How Much Risk Do You Want?	Savannah West, Harvard Business School Note 9-381-081.	You have been hired as Willy Welsh’s Chief Operating Officer. Write your analysis of the business strategies that Engineered Concepts should follow going forward as their business evolves. What are your major three or four recommendations and why? Select and use the tools introduced in the course to help make your argument. Also consider the new issues in vertical integration raised by the case and by the reading. What are the benefits of vertical integration? The pitfalls? How has Welsh addressed these issues?	Notes This is a finance case which we will use to discuss vertical integration in the A/E/C value system. 20 years later, what is different and what is the same in our industry? Questions Think of this case from Willy Welsh’s perspective. Think of this case in terms of the business, Engineered Concepts. Based on what you can infer from the case, think of the analysis in terms of how you might help this company grow beyond the one project in Savannah. What role(s) does Engineered Concepts play in the overall value system? What do you think the firm value chain looks like in Engineered Concepts? What are the major elements of risk in the Savannah West deal? Who takes what risks? Who gets what benefits?How could the risks be contained and the rewards be allocated? What advantages and disadvantages does Welsh realize from being vertically integrated? How sound is his personal financial statement? If you were Allison Porter, would you make the loan? If you were Willy Welsh’s Chief Operating Officer, how would you proceed in helping the company to grow and compete? Would you go to other markets or develop other kinds of projects or play other roles in the value system?
8	Changing the Game: How Information Gives You Competitive Advantage Strategy in Fragmented Industries	Otisline, Harvard Business School Note 9-186-304.	No written assignment	What is/are Otis’ place(s) in the industry value system? What does Otis’ segmentation matrix look like? Where does Otis make money? What did the Five Forces look like before Otisline? What do you think they look like after Otisline? Was the elevator service business fragmented before Otisline? Is it fragmented now? How much of this change is due to regular corporate strategy decisions and how much depends on innovative use of information technology? Do you see other opportunities to use these kinds of strategies in real estate, architecture, and construction? Is “Industry Transformation” possible in our industry? What or who might drive it? How do you think the advent of Otisline impacts the employees?
9	Strategy, Leadership, and Choices	Del Webb, Inc., Harvard Business School Note 9-497-016.	Phil Dion has quit and you are the new CEO of Del Webb Inc. at the time of the case. Prepare a strategic plan for the business going forward. What are your major three or four recommendations and why? Select and use the tools introduced in the course to help make your argument. Also consider the new issues in leadership raised by the case.	Notes While this case is written to be largely about boardroom dynamics, we will spend more time on looking at opportunities for the firm going forward. What roles does Del Webb Inc. play in the Industry Value System? Does this answer depend on some kind of market segmentation assumption? How would you articulate Del Webb Inc’s market segmentation choices? In what ways would you determine which segments were the most attractive? What would their firm value chain (or chains) look like to see your strategy implemented? The company has subsequently gone in another direction following its 2002 acquisition by Pulte Homes: Was this inevitable? Is this the best that could have happened given Dion’s options at the time of the case?
10	Disruptive Technology, Industry Selection and Career Strategies	B2Bilt, Center for Design Informatics at Harvard Design School Note 020405-044.	No written assignment	B2Bilt has a novel strategy in our industry. What roles do they play in the industry value system? How would you characterize their firm value chain? Is this consistent with the market segments and strategies which they seem to be pursuing? How does their service offering help Owners to manage construction risk, in the context of the HBR article? How are they choosing to compete in this fragmented industry? Do they have a chance to overcome fragmentation, are they coping with fragmentation, or are they not addressing the issues? What will be important to B2Bilt if they hope to increase the scale of their operation (get a lot bigger)? How do you feel about their dedication to technology? Will their investment be repaid? If their design and project management tools lead to greater efficiencies, how does this shape the job market for project managers and designers?
11	Review of Core Concepts in 1.46	None	None	None