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
Rose Yu of the WSJ has a nice recent article on the fragmented nature of the Chinese auto market and how this is leading to over capacity in the industry. Mark Lehrer identifies some nice classroom uses for this article in the WSJ WeeklyReview service. Here is what he suggests:
- SUMMARY: The US auto industry has long had three big domestic car makers. China has more than 170. Optimistic Chinese auto executives send shudders through the rest of the global auto sector. Industry watchers worry that the world’s No. 1 auto market could soon be awash in overcapacity. That would rev up competition in China and pressure companies here to export more of their cars.
- CLASSROOM APPLICATION: As a case in industry analysis, excess capacity seems to be an endemic feature of the car industry (related article). As a study in foresight, the question for class discussion is, first, how to deal with the problem in the US, and second, how to brace for the problem furling over from China in a few years.
QUESTIONS: Continue reading
Often in M&A, there is a concern that the buyer has overbid – especially when there is competition for the target and the risk of winner’s curse is heightened. In essence, if firms bid based on their “unbiased estimates” of the target’s value, the bids may be normally distributed around the true value and the winner is especially likely to have overbid (cursed). The task then, is to shade one’s bid to avoid overbidding. A standard exercise to demonstrate this phenomenon is to have the students bid on a jar of coins (which I describe as a restaurant chain). This is of special interest in a strategy course since the risk of being cursed is driven by the variance around the valuation (not the mean). Variance, it turns out, is driven by aspects of the target that are hard to value. These include strategic resources, human capital, complementarities, cross business synergies (e.g., layers of coins to reflect different target business units), or any other source of uncertainty. As such, even if the winner’s curse is covered in another course, these elements will be specific to a strategy course. Here are materials needed to run the exercise:
- Instruction sheet describing the bidding/valuation task (and to submit bids)
- Spreadsheet to record the results and show a simple estimation method
- PowerPoint slides to lead discussion
- 500ml jar with quarters, pennies, and nickels (as shown)
The short film Trey Parker and Matt Stone made for Universal Studio’s takeover of Seagrams (wine coolers). Has many guest appearances, like Demi Moore, Sylvester Stallone, and Stephen Spielberg. This is a hard to find video – even Trey says he doesn’t have it! Watch the rest of it on Part II.
Contributed by Andrew Inkpen
I found that a recent article in BusinessWeek can be used as an interesting reading to explore power & politics in the context of M&A. The article describes how William Johnson was designated as CEO of Duke Energy after its acquisition of Progress Energy and how he was fired after only two hours. The original M&A agreement included a condition that stated that the CEO of the target (Progress Energy) would be named CEO of the merged company. However, he was fired two hours after the designation and the CEO of the acquirer (Duke Energy) was named CEO of the merged company. I think this article could motivate to further study this acquisition. It seems to be a novel illustration of a hostile acquisition.
Contributed by Francisco Morales
Here are 3 classic Delta Dental commercials that illustrate inefficient diversification (in a funny way)!
See the other two if you click here: Continue reading
“Acquire is a box game that is easy to learn and can be played in about an hour by four players. I bought a dozen games and break the class up into teams and link the game to cases on rivalry, competition, and acquisitions. It does a great job of putting students in the position to see how serendipity and strategy interact, and how your wins are a function of others’ actions, intentions and hubris. The first site below actually has a couple of free and simple DOS versions of the game that students can use for practice and familiarization.” Click Here to Access
Contributed by Mason Carpenter
Attention simulation users: It would be great to have a separate page for each simulation below. If you have used it and can summarize strengths, limitations, and some tips for implementing, please submit a full entry on the simulation.
Click the links below to access quarter and semester length simulations
Contributed by Mason Carpenter
In business, why do the stupid always rise to the top? And what’s an “action item?” These and other mysteries are explored in this animated series that chronicles the corporate life of an engineer named Dilbert and his talking dog, Dogbert. Just like Dilbert, you could waste days previewing these hilarious digs on business (I open my M&A class with the opening minutes from The Merger video).