Category Archives: Technology/innovation

Teaching Tips @ SMS Madrid

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The Strategic Management Society always has excellent teaching sessions incorporated in their conferences. Here are some sessions to check out at the Madrid conference September 20-23, 2014:

  • Sat, 9/20 @ 13-16:00. Competitive Strategy Interest Group Teaching Workshop. Building on last year’s workshop on innovation & education, the 2014 theme is “The Impact of New Technologies on Teaching and Higher Education.” The education industry is abuzz with talk of MOOCs, distance learning, computer-based instruction, and other innovations. How are these best incorporated into the curriculum? (Co-sponsored by the Teaching Community).
  • Sun 9/21 @ 8-9:15. Teaching Corporate Strategy: Insights & Opportunities. Panelists will share experiences teaching corporate strategy topics related to their research: vertical integration, M&A, industry consolidation, and diversification.
  • Sun 9/21 @ 9:15-10:45. Researchers Hooked on Teaching / Teachers Hooked on Research. Most academics polarize teaching and research into separate worlds. Building on last year’s very popular session we bring together world-class scholars who have successfully bridged this apparent divide. This engaging session will showcase their experiences in “translating” their research into teachable moments and their teachable moments into research.
  • Sun 9/21 @ 15:45-17:00. Alternatives Takes on Teaching Strategy: Balancing the (ex)Tensions. Strategy is a complex subject with multiple teaching approaches. This interactive session will provide insights from experienced educators on the methods that work, as well as addressing moves to online content.
  • Mon 9/22 @ 11:00-12:15. Challenging the Way We Teach and Practice Strategy. This is a common ground session comprised of submissions to the teaching community track.
  • Mon 9/22 @ 14:45 – 16:00. Teaching Strategy Philosophically. Ethics applies different theories to address Socrates’s question of how we should act. The application of philosophical principles in teaching strategy has multiple advantages including a better appreciation of underlying values and motivation, and increasing tolerance of ambiguity. Join us in this highly interactive session in how great scholars teach strategy philosophically.

Contributed by Russ Coff

Technological Breakthrough: BookBook

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This excellent ad for the 2015 IKEA catalog spoofs Apple’s over-the-top spots about their new products (as well as Samsung’s “next best thing”). This will spur some additional discussion about the value of older technologies and how to sell them to customers as the “best thing you always had.” It also is a nice opener for a discussion of how IKEA leverages their capabilities (advertising and reputation). You can find more background in this Forbes article. For an even lighter take on legacy products, see this Onion post on failing newspapers.

Contributed by Russ Coff

Power & Alliances: Dog’s Best Friend?

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This short clip is probably self explanatory. Not all alliances work out in the end for all parties. Nearly all alliances involve contexts where power is unevenly distributed. What are the management challenges for both the favored and unfavored partners? This follows a similar pattern as the classic dog and bird alliance featured in this commercial (similar to Tom and Jerry). Click here for more posts on alliances.

Contributed by Russ Coff

Stuck in the Middle Blues

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Samsung’s profits are down by a whopping 25% and they put the blame firmly on Chinese competitors entering with cheaper smartphones (see this NYT article). Companies like Xiaomi and Huawei have increased market share in China over the last year as they sell good products at break-even prices. Now, they have turned their sights on western markets that eat into Samsung’s bread and butter. Pressure on Samsung to respond with lower prices? Perhaps but Apple continues to compete effectively at the high end. It’s proprietary operating system keeps rivals from fully imitating many of the most important product attributes. For now, Samsung is signalling that it will accelerate efforts to differentiate their products — an innovation war more than a price war. The real winner may be Google which gains as Android dominates growth in this market. As you can see, this “live” case allows one to explore the complexities of how different strategies play out in the market. It also pushes us to explore how a sequence of strategies might unfold leading to a longer term competitive advantage. This case might go nicely with the HBS case on Samsung’s dual (cost/differentiation) advantage in memory chips and the threat of Chinese rivals. Of course, in the race for new features, one wonders what they will think of next…

Heard Through Michael Leiblein

Keeping Your Cool in Alliances

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Quirky is a company that collects ideas on innovative products from it’s “community members.” It is governed somewhere between crowdsourcing and a holacracy (see the posts on Zappos and Valve). They have formed an alliance with the much more established and traditional, General Electric (GE). The two companies have very different strengths which can be the basis of complementarities that drive value creation in alliances. Together, they have produced Aros, a connected air conditioner that, for example, uses one’s Phone location to tell the system when to turn on and cool one’s house. This is a nice opportunity to apply the frameworks for achieving a network advantage (see Greve, Rowley, & Shipilov’s new book). For example, Shipilov describes the Alliance Radar framework which allows you to see if an alliance portfolio is balanced and identify what kinds of alliances will create the most value. Below is a video review of the resulting product. See also Henrich Greve’s blog post on the alliance for a discussion of how it has worked. While GE handled the product design, manufacturing and sales, the core idea came from Quirky.

Contributed by Aya Chacar

Special Orders Outsourced at BK

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This funny video depicts the movement from poorly trained and low paid local workers to outsourced workers overseas and finally to flawed voice recognition software. The result is equally frustrating for the customer. Ultimately, this touches on a variety of subjects including human capital, global strategy, outsourcing, and technology strategy. One important caution is that the video reinforces stereotypes. This too should probably be a part of the conversation.

Contributed by Russ Coff

Google/Apple vs. Their Employees?

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Google and Apple must pay a total of $324 Million to current and former employees in a class action lawsuit that they lost. This highlights the multiple arenas on which competition and cooperation play out. Is it surprising that strategic alliance partners might agree not to actively poach employees from each other? Such trust seems like a prerequisite to a productive alliance. And yet, fierce competition in product and intellectual property markets makes it hard to imagine close coordination to collude in strategic factor (human capital) markets. This brings together a nice discussion at the intersection of factor markets, alliances, diversification, game theory, and rent appropriation. The video below gives an idea what Google employees do all day…

Contributed by Russ Coff and Aya Chacar

Graphene with a Kitchen Blender?

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Can a simple “kitchen blender” method of making graphene shake up the electronics industry? The one-atom thick sheets of carbon may one day replace silicon wafers and revolutionize computing and electronics. For example, recent findings suggest that electricity can be generated by running salt water over graphene. Samsung may soon use graphene to make ultra thin hard cases for it’s phones. A fun thought experiment in class might be to develop scenarios for how this disruptive innovation might alter the dynamics of the industry (and adjacent industries).

Contributed by Russ Coff

Adaptation on Rugged Seascapes?

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We teach strategy formulation in a dynamic world and yet many of our analytic tools may seem more static if we aren’t careful. For example, 5 forces offers an industry snapshot unless students know to explore how the forces evolve. I tend to introduce scenario planning, decision trees, and monte carlo simulations to incorporate the qualitative and quantitative dimensions of strategy formulation under uncertainty. This brief video provides a fairly graphic view of how it feels to managers. Of course, the seascape metaphor is a play on Levinthal’s classic article (adaptation on rugged landscapes)…

Contributed by Russ Coff

Tesla Strategy Sparks Cusiosity

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Melissa Schilling notes that, despite extensive automation (video below), labor usage is quite high. “There are 3000 workers in the plant, and Tesla produced a little over 20,000 cars in 2013. That’s about 7 cars per worker in a year (assuming the workers are full time). However, the GM Lordstown plant made 70 cars per worker last year (thanks Linos Jacovides for this stat), and in the well-known Renault-Nissan HBS case it reports that Nissan’s productivity was 101 cars/worker/year, and Renault’s was 77 cars/worker/year.” Given the automation, the workers are probably highly skilled (and, thus, well paid). Is Tesla at a huge economies of scale disadvantage? What might be the strategy? They are still 3 years away from selling a cheaper model so it will be a while before they can generate volume from a mid-market product. In the meantime, one possible solution may be found in Chinese sales of electric cars.

Contributed by Melissa Schilling

How to Build a Network Advantage

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“Network Advantage: How to Unlock Value from Your Alliances and Partnerships” is written for MBA, Masters of management, and Executive Education programs. It can be used in core strategy courses or electives on corporate strategy innovation, or strategic alliances. The book offers a step-by-step guide for how to build network advantages.

  • The impact of individual alliances, partnerships and their portfolios on the firms’ competitive advantage (Introduction, Chapters 1 & 2).
  • The role of complementarity and compatibility between partners for the formation of successful alliances and partnerships (Chapter 3)
  • Differential impact of the “hub and spoke” alliance portfolios and “integrated” portfolios on competitive advantage. These represent inter-organizational networks rich in structural holes and dense ties, respectively (Chapters 4 & 5).
  • The role of organizational status in competitive advantage (Chapters 6 & 7)
  • Should the firm build its own alliance portfolio or join another firm’s network (Chapter 8)
  • How to improve information flows inside the firm to attain competitive advantage from alliances and partnerships (Chapter 10).

Most chapters introduce tools for how to develop a collaboration strategy. These are compiled at the end of the book. A short introductory video is available on youtube:

Contributed by Andrew Shipilov

Homer’s Oddity: A Human Capital Chip

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The Simpson’s clip below illustrates how human capital can be co-specialized with other assets to create an advantage. The Intel chip, once paired with Homer, becomes a strategic asset in the pastry sciences. In this way, human capital becomes industry and firm-specific and can be a source of competitive advantage especially if rivals have no substitutes. This is also related to Lazear’s skill weights model where unique combinations of general human capital form highly idiosyncratic knowledge bases. Could Homer be a source of advantage for Dunkin Donuts? Who would reap the gains?

Contributed by Russ Coff

Zappo’s Zaps Mgrs: A whole holacracy

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Zappos is moving to a holacracy whereby managers and job titles go by the wayside (see this CNET article among others). This is a real kick in the head to bureaucracy and hierarchy. How does this organizational design mesh with their strategy of customer service and innovation? Another nice example is Valve — see the Valve post on this site. These examples can seed a discussion of strategy, structure, and organizational design as well as a critical analysis of many practices taught in business schools. Such radical forms can be very hard to design and implement. One problem that Foss explores in a recent Organization Science paper is incentives, motivation, and the tendency of managers to meddle in tasks that they say they have delegated. Here is an entertaining Zappo’s commercial to ease into the topic (though one of the many Dilbert videos would be quite compatible as well).

Contributed by Russ Coff

Budget Failure…

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Budgeting is often a political process where firms fail to make strategic choices and underfund all projects instead of picking the ones that deserve funding and giving them what is needed. This short Dilbert video gets at that squarely.

Contributed by Russ Coff

MicroDesign Negotiation: Cross-business coordination

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This exercise focuses on the problems with designing incentives and structures to promote the cooperation across divisions needed to achieve synergies. MicroDesign is a negotiation to transfer a technology between 2 divisions of a corporation in order to take advantage of a market opportunity. Sub-optimal agreements (money left on the table) represent transaction costs and inefficiencies that must be overcome in order to create corporate value.

There are two roles (Gant and Coleman). One division, Household Appliances (HA), has developed a new technology that has value if sold outside of the company. However, the division does not have a charter to sell chips. In order to take advantage, the technology must be transferred to the Chips & components (CC) division. Continue reading →

Heroic Assumptions…

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Often strategy is geared toward upside scenarios that may not be particularly realistic. This can be ok when using tools like real options (e.g., the strategy is part of a portfolio of options). However, one would have to make a case that at least some of the options might be in the money…

Contributed by Russ Coff

Betray Your Ignorance

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Causal ambiguity can be hard to explain in class. This Dilbert video might offer a starting point. Here, the report is so technical that no one reads it and the summary slide is so complex that no one understands it.

Contributed by Russ Coff

An Epic Split in the Strategy Field

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Birgul Arslan suggests that the Epic Split commercial of Volvo in the Volvo Trucks Case to showcase how truck companies may differentiate themselves with their technology. I see a broader use in the context of almost any kind of alignment one might want to discuss (e.g., strategies, governance, organizational units, etc.). Any misalignment could result in catastrophic results…

Contributed by Birgul Arslan

A Modular Smartphone?

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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…

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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 →