15.963 | Spring 2008 | Graduate

Advanced Strategy

Lecture Notes

This section includes both discussion questions for cases and occasional slide presentations. For the (B) cases in sessions 17, 20, and 22, discussion questions are intentionally omitted so that the classroom discussions of the (A) cases are not influenced.

I. Introduction
1 Does sustained performance exist? (PDF)

If hospitals were all “for profit”, would the kinds of checklists described in Atul Gawande’s article be more widely adopted?

Have you ever seen a managerial or organizational process that could be improved through the use of something like a checklist?

Why do you think Toyota is arguably still the most successful competitor in the automobile industry?

Can things like “checklists” or “the Toyota way” be a sustained source of competitive advantage? Why or why not?

II. What drives sustained performance?
2 Reviewing 15.900: Strategy fundamentals (PDF)

(Each student was asked to read one of the following cases: Rockwell International, Coke, Dell, Airborne Express, Husky, Mark Twain, Sun Power, Coors, and Nintendo.)

As you review your case, think about the following questions:
- What are the sources of competitive advantage for your firm?
- Are they largely structural or organizational?
- If they exist, identify the structural sources of advantage in detail. Do they stem from first mover advantage? From economies of scale or scope? From network effects?
- If they exist, identify the organizational sources of competitive advantage in detail. Can they be imitated? Why or why not?

3 Wal-Mart stores in 2002  
4 Southwest Airlines 2002: an industry under siege  
5 Pause for reflection  
III. Organizational Competence and Relational Contracts
6 Revisiting 15.311: Lincoln Electric in China  
7 Case: The HP-Cisco Alliance (A)  
8 Toyota Motor Manufacturing USA Inc.  
9 BP: Organizing for performance at BPX  
10 Case: BP and the Baker report  
11 Pause for reflection  
IV. Changing Relational Contracts
12 Case: Best Buy and Circuit City

Why was Circuit City initially so successful? How much of its success was driven by structural advantage and how much by organizational competencies? By other factors?

Why has Best Buy been so successful? How much of its success was driven by structural advantage and how much by organizational competencies? By other factors?

Why was Best Buy able to surpass Circuit City? Why did Circuit City not “simply copy” Best Buy’s strategy?

13 Delta Air Lines (A): the low cost carrier threat, and Delta Air Lines (B): Song (PDF)

Why has it historically been difficult for the established airlines to respond effectively to the challenges presented by low cost carriers?

Is Song well positioned, in your view, to challenge Southwest and other low cost competitors?

If you were running Song, what would you be worried about? What would be your top three priorities for action for the coming year?

14 Pause for reflection: Toyota’s expansion

How much of Toyota’s success is now dependent on structural dynamics, and how much on organizational competence?

Why is Toyota experiencing difficulties as it expands?

What would you do if you were running Toyota?

V. Doing Strategy when Competence Matters
15 Deconstructing Jim Collins’s Good to Great

How does Collins’s analysis of the roots of strategic success differ from the analysis we have been developing in class?

What is the role of a leader in an organization in building competitive advantage?

16 Eli Lilly’s Project Resilience (MIT authored case)

Which of the scenarios outlined in the case seem to you the most likely? Why?

What should Lilly do in response to Peter’s analysis? Where should they invest? How would you implement your recommendation?

17 Lilly (B) (MIT authored case) Case and questions will be handed out in session 16
18 The Leadership Council at Corning (MIT authored case)

What problem is the Leadership Council designed to solve?

What are its major strengths? What are its potential weaknesses?

If you were Peter Volunakis, would you change the way in which the Council operates or the way in which resources are allocated at Corning? Why or why not?

19 Paul Levy and the Deaconess Hospital

How would you describe the situation Levy inherited at the Beth Israel Deaconess Medical Center? What challenges did he face? Why did previous turnaround efforts fail?

How did Levy get started in his new job? In particular, what were his objectives and what did he accomplish:
- prior to his first day at work?
- on his first day?
- during his first week?

What (if anything) was distinctive about the way Levy went about formulating, announcing, and implementing the recovery plan? What is your evaluation of his approach to staffing the task forces?

What is your prognosis going forward? What has Levy accomplished in his first two months, and what challenges remain? What is your evaluation of his management style? How should he proceed?

20 Case: Paul Levy (B) Case and questions will be handed out in session 19
21 Case: Simmons

What are the challenges faced by Simmons in December 2001? How has Charlie Eitel’s leadership affected the company in his first six months as CEO?

What should be the management team’s top priorities heading into 2002?

What is Eitel attempting to accomplish with the Great Game of Life program? What is the premise of the GGOL program? How is it supposed to help Simmons or other companies?

Should Simmons roll out the GGOL program? If so, how, and how would you justify the $7.2 million investment to the New York investors? If not, why not, and what would you do instead? Be specific.

22 Case: Simmons (B) Case and questions will be handed out in session 21
VI. Wrap Up
23 Student presentations of highlights from term projects  
24 Conclusions (PDF)  

Course Info

As Taught In
Spring 2008
Learning Resource Types
Lecture Notes
Written Assignments