Paperscape: Building on the RBV

This exercise from Norman Sheehan is based loosely on the Tinkertoy exercise (on this site). The main difference is that groups get unequal resource endowments (one group gets tape and paper, while the rest get paper clips, elastic bands and paper) and are asked to build the highest paper tower. The results lead to a discussion of how superior resources (tape) can lead to better performance if they are organized properly. The takeaway is that students need to see if their focal firm has a tape-like resource. If so, they need to make it the cornerstone of their strategy. If the focal case firm lacks a tape-like resource, then it needs to be excellent at execution if it is to have any chance at having above average performance. Students love the exercise and it is a great way to teach students why they should look for VRIO resources when doing a case analysis. A related exercise, the Egg Drop Auction, explores strategic factor markets and the accumulation of heterogeneous resources. Here is the Paperscape Teaching Note (published in JME) and here are Discussion Questions to assist in the debriefing.

Contributed by Norman Sheehan

Prescription for Corporate Governance

This exercise from Norman Sheehan and Kay Keels addresses corporate governance and ethics (see the Jensen Pharma Teaching Note). Here is the setting: A pharmaceutical firm’s board must decide what to do with its best selling drug, Dekanor, in light of research that suggests that the drug may be causing serious harm. This reflects the ambiguity and choices Merck’s and Pfizer’s boards may have experienced in the years before they knew if their “blockbuster” drugs, Vioxx, Bextra and Celebrex, were harming patients. For example, the role play includes the impact of social media, pressure from rivals, and tactics sometimes used by pharmaceutical companies to discredit negative research studies. Board members are asked to choose between options including: 1) preemptively remove Dekanor from the market, 2) continue selling Dekanor but add additional product warnings and stop actively marketing the drug, or 3) continue to aggressively market the drug and fight to keep the FDA from banning it. The 14 roles include Jensen’s Chairperson and CEO, its five board members, and eight managers (click here for the Jensen Pharma Roles and Agenda). Each must balance his/her corporate agenda with his/her personal agenda. For example, some own considerable amounts of valuable stock that may affect their decisions.

Contributed by Norman Sheehan and Kay Keels

Gibberish as a Second Language

Ever wonder what English sounds like to non-English speakers? This video goes a long way to demonstrate. You may feel like you should know what these people are saying but it just doesn’t sound quite right. This is another in the series of videos that are useful for teaching international business.

Contributed by Russ Coff

A Modular Smartphone?

There has recently been some buzz about the possibility of making modular smartphones — hopefully to reduce waste as people upgrade modules instead of the whole phone. Now Motorola has joined the movement with Project Ara. This poses many interesting issues for discussion. As suggested in the WSJ, might Google really be interested in destroying profitability in smartphones to grow the market and enhance ad revenue? For that matter, is this technologically feasible? It implies that components are not strongly co-specialized and can be swapped out easily. Even if so, would the compromises to achieve modularity be acceptable? Articles by Melissa Schilling and Etheraj & Levinthal paper adds an interesting theoretical perspective. Lots to talk about in class…

Contributed by Russ Coff

Boycotting HBR? Some Alternatives…

You may have followed the debate about HBR’s policy prohibiting professors from linking suggested HBR readings to their own library’s paid subscriptions (see Joshua Gans’ blog posts on this and his Financial Times article on HBR and their journal list). I have increasingly used McKinsey Quarterly which makes their articles available for free (you need to register but that’s free). Here are some HBR alternatives that seem to work well (often by authors you know well):

Strategy process & org change

Internal Analysis and Competitive Advantage

Continue reading

Baby Click Me One More Time

Market signals can be rather noisy and firms may over react or miss the signal entirely. In a similar way, the resource based view draws on causal ambiguity as an isolating mechanism — firms may misread noisy observations and imitate the wrong thing. This clip illustrates that problem as a firm ramps up to meet demand triggered by unusual activity on its web page…

Contributed by Russ Coff

A Different Script Ending…

The economics of video streaming and DVD rental brought Netflix to conclude that the businesses were better off separated. However, they erred in assuming that the separation would be well accepted by their customers. Below is the explanation of the separation and how it would affect users after the uproar ensued. Ultimately, the customer pressure pushed them to reverse their decision.

…and this brought the following reaction from Conan O’Brien:

Contributed by Jeff Martin

Flush with Cash…

A recent Wall Street Journal article points to a resurgence of toilet manufacturing in the U.S. but it is mostly under foreign ownership (like the Japanese company, Toto). Mary Tripsas has a nice HBS case on Toto’s attempts at entering the U.S. market and the WSJ article seems a nice conclusion to the story. A broader question one might ask is why product innovation has not penetrated the U.S, market in this industry. In Japan, top end toilets are highly differentiated and even link to electronic devices like Android smartphones. As such, this might spur discussion of when innovations are likely to take hold as well as questions about entry into new markets. Nevertheless, this video reminds us that there may still be a need for low tech solutions in this market…

Contributed by Russ Coff

Do You Speak English?

Here is another in the series of humorous videos about the hazards of doing business in different countries. Will the people want to help you if they can? See some related videos here.

Contributed by Russ Coff

Apple’s Addiction to Samsung

Apple is famous for being secretive about it’s proprietary knowledge. One would think that they would love to stop handing over their most strategic technical knowledge to Samsung, their biggest rival in smartphones. Nevertheless, all existing iOS core processors have been manufactured by Samsung. They just can’t stop themselves — the A7 chip continues the multi-year pattern of outsourcing production of the heart of the iPhone to their chief competitor. Rumors have been flying that Apple is going to switch to a new supplier, TSMC (Taiwan Semiconductor Manufacturing Co). That may still happen in the near future but the fact that Apple could not shake it’s dependence on Samsung quickly despite large investments in TSMC speaks to the extent of Samsung’s manufacturing advantage. This would seem to prompt a nice discussion of capabilities, rivalry, and alliances…

Contributed by Russ Coff

The Problem with Credible Commitment

Credible commitment sends a valuable signal but can only be achieved at a substantial cost. Unfortunately, that cost can create challenges for implementing different strategies later. A tattoo might be considered one form of credible commitment…

Contributed by Russ Coff

Capabilities: Matrix Mouse

This mouse clearly has extraordinary capabilities. These are especially notable after it acquires the VRIN resource (cheese). Which is the critical resource, the cheese or the ability to acquire it at a discount (e.g., still being alive)?

Contributed by Russ Coff

Blue Sheep of the Family?

This Mercedes Benz commercial poses a critical strategy challenge for firms seeking to differentiate: “How do you try to stand out in a crowd where everyone is trying to be different?”

Contributed by Russ Coff

Get Out of Jail Free

There are many game theory simulations available online to supplement lectures and cases. If you have limited class time or are teaching a distance course, these simulations can be especially valuable because, unlike video lectures or PowerPoint voice overs, these are quite interactive. Here are some examples:

If you really need a video, this one from Greg Mankiw’s page should work. See also the classic Dilbert Prisoner’s Dilemma video.

Contributed by Russ Coff

Facebook Discussion Bonanza

A number of faculty now use Facebook groups to encourage discussion of current events and strategy theory among students and academics. These are typically closed groups but you may be able to join if you ask the moderator nicely. If you have a page like this, please send me the URL and I am happy to add it to this post. Here are a couple of pages you might check out:

Contributed by Russ Coff

Oligopoly in the Classroom

Another 3-E Learning exercise explores market structure through an extra credit scheme. Michael Ryan’s Oligopoly Classroom Experiment allows students to get extra credit for suggesting questions for the next test based on how many questions are submitted. Each student must choose to whether to submit a question related to the topics covered. At the beginning of each class, the instructor informs the students how many total questions have been submitted but does not mention who submitted them. Here is the schedule for extra credit points:

  • If one student submits a question before the deadline, he/she gets 10 points. If two students submit, both get 9 points. If three students submit questions, each get 8 points and so on.
  • If 11 or more students submit questions, none of them receive points.
  • However, if no students submit questions, then every student in the class receives five bonus points.
  • The instructor may also add conditions to this exercise which make collusion more likely or less likely by simulating an increased number of ‘firms’ and an inability to detect when other ‘firms’ change their strategy.

Here is a more detailed writeup from Classroom Expernomics.

Contributed by Michael Ryan

Failing Newspapers Affect Crazy Loons

Ok so here is another funny Onion News Network story of how the death on newspapers affects crazy loons who fill their houses with old newspapers. However, there is a serious issue on how firms ensconced in old technologies respond to strategic challenges. Here is an academic paper by Adner and Snow on the topic. You may also be interested in their HBR article on the topic that may be useful for teaching.

Contributed by Russ Coff

CEO Excels at Destroying Ideas

In another of our Onion News Network stories, the video below examines how a CEO has a knack for recognizing great ideas and then transforming them into complete failures. The story includes interviews of employees amazed at the skill with which the CEO dismantles exceptional ideas. Funny as it is, it may invite a rich discussion of how CEOs really can destroy good ideas.

Contributed by Russ Coff

Social Network Bingo

social20networkWe often try to convey to students how value can be created in social networks as actors gain access to more resources and knowledge. This exercise is a simple game of bingo where players have a list of resources they need to find to win the game (4 boxes in a row). To play, they simply find people in the room with specific attributes or knowledge and have them sign their card. I have added a simple twist that they can complete one box using an indirect tie (e.g., a friend of a friend). This teaches the very basics of social networks and serves as a nice ice breaker as well. Here are two Bingo card created for: 1) an exec ed program and 2) for a PhD Student Orientation. This gives you an idea of how to customize the exercise for the group. This can be useful to explore alliance networks at the organizational level or the role of individual networks in strategy formulation and implementation.

Contributed by Michael Sacks

A Focused Planning Meeting

Robert Wright offers an experiential exercise to get planning teams to think more deeply about their unstructured problems. He suggests applying his “FOCUSED” framework by having them consider a challenging problem and roll his specially designed dice (here is the pattern for the dice). This prompts them to address issues in each aspect of the framework. See his video below explaining the framework and the process for the exercise.

Contributed by Robert Wright