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Business Review, vol.74, 1996: 61.
Clickable Link (in Blackboard) to Business
Source Premier, a Pepperdine database.
Schnietz, Note on Generic Business-Level Strategies Blackboard class e-room
(blackboard.pepperdine.com)
“Wal-Mart’s $288 Billion Meeting,” Fortune, 4-18-
05: 93.
Blackboard class e-room
“How Target Does It,” Fortune, Oct. 18, 2004: 100. Blackboard class e-room
Questions:
1. According to Porter, what is operational effectiveness (1st reading)? Why aren’t constant
improvements in operational effectiveness always sufficient to achieve superior profitability? What’s
the definition of strategy?
2. What 3-4 primary strategic activities (“strategic positions” in the vocabulary of Porter) does your
firm pursue? Do these main activities give it a sustainable competitive advantage? What is a
sustainable competitive advantage?
3. What is your firm’s strategic vision and/or mission (often located on company web site, if you’ve
never been exposed to it previously)? Does your firm’s stated mission “match” your experience inside
the company?
4. Consider the retail industry. Name at least one retailer (of any kind, in any country) that fits into
each of the 4 boxes of generic, business-level strategies (Schnietz Note). For example, where do Home
Depot, Wal-Mart, Whole Foods, and Nordstrom fit in the 2x2 matrix? What explains why Wal-Mart is
successful (profitable) but K-Mart is not (recently emerged from bankruptcy)?
Further Readings (Recommended not required):
 On Porter’s impact, particularly given the recent popularity of the resource-based view of strategy: “Retrospective on
Michael Porter,” in the Academy of Management Executive, 16 (2002): pages 41 – 63.
 For anyone desiring a strategy textbook, I think the best one on the market is Strategic Management: Competitiveness
and Globalization, Michael Hitt, R. Duane Ireland and Robert Hoskisson, Thomson Learning.
 Sam Walton, Sam Walton: Made in America (1992) on Wal-Mart’s basic strategic activities and positioning.
9
Class 2, The External Environment -- Industry & Competitor Analysis
Class Overview (Approximate)
Time Topic/Activity
8 - 10 Porter’s 5 Forces & Value Chain Models
* Applications to some current Industry Shifts and Issues
Break
10:15 –
11:15
Team Break-Out
* Group Discussion of Question 3 Below
* 5-Forces Application: The MBA Education “Industry” (case handed out in class)
11:15 -
noon
Class Discussion of the MBA Industry
* Applying Resources Analysis to the Graziadio School
* Bridge to Next Week: Porter’s (5-Forces) vs. Internal (Core Competency) Analysis
Class Readings:
Reading Availability
Michael Porter, The Structural Analysis of Industries (chapter 1 of Porter’s
Competitive Strategy, Free Press, 1980). HBS Publishing Reprint 9-376-054.
www.study.net or
HBS Publishing
“Facing the Music,” Fortune, 3-31-03: 90. Blackboard class e-room
“Bertelsmann’s Latest Tune,” Wall St J, 9-27-04:B1. Blackboard class e-room
“How Big Can Apple Get?” Fortune, 2-21-05: 68. Blackboard class e-room
“Hit by iPod and Satellite, Radio Tries New Tune,” Wall St J, 3-18-05: A1. Blackboard class e-room
“Pay as you go MD: Doctor is In, But Insurance is Out,” Wall St J, 11-6-03:A1. Blackboard class e-room
“In Clash of Sneaker Titans, Nike Gets Leg Up,” Wall St J, 5-13-03: A1. Blackboard class e-room
Schnietz, Value Chains and Competitive Scanning. Blackboard class e-room
Schnietz, Schumpeter’s Creative Destruction. Blackboard class e-room
Simulation Manual, Third Printing of 5th edition (please begin to familiarize
yourself with game rules).
Chapter 1
Questions:
1. What is the essence of each of Porter’s 5 Forces? Which of the 5 Forces is most strongly at work
in the industry conditions described in each of the above business press readings? For example, in the
record industry (1st 3 business press articles), who are the main customers? Suppliers? New entrants?
Substitute products? What is the level of rivalry in the industry? What’s the evidence for your
assessment?
2. Where do each of the firms in the business-press articles under section I create the most value (Note
on Value Chains)? How good are those firms at scanning their competitors’ value-creating activities?
3. Which of the 5 forces is the source of your industry’s greatest threat? Which force figures most
prominently in your job responsibilities? Where does your firm create value? How good is your firm
　
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