essentials of strategic management 3th 0078029287 by gamble solutions manual and test bank
Section 1
Instructor Resources,
Chapter Features,
and Case Overview
Instructor Resources
We strived to achieve four goals in preparing this package of Instructor Resources for the 3rd Edition of Essentials of Strategic Management:
1. To equip you with all the resources and pedagogical tools you’ll need to design and deliver a course that is on the cutting-edge and solidly in the mainstream of what students need to know about crafting and executing winning strategies.
2. To give you wide flexibility in putting together a course syllabus that you are comfortable with and proud of.
3. To give you a smorgasbord of options to draw from in keeping the nature of student assignments varied and interesting.
4. To help you deliver a course with upbeat tempo that wins enthusiastic applause from students.
We believe the contents of the package will be particularly informative and helpful to faculty members teaching the strategy course for the first time but we have also tried to embellish the content with ideas and suggestions that will prove valuable to experienced faculty looking for ways to refurbish their course offering and/or to keep student assignments varied and interesting.
A Quick Overview of the Entire
Instructor Resource Package
The Instructor’s Manual for this third edition of Essentials of Strategic Management contains:
· A quick look at the topical focus of the text’s 10 chapters (Section 1).
· An overview of the 16 cases in the text, along with a grid profiling the strategic issues that come into play in each case (Section 1 and Section 3).
· A discussion of the reasons to use a strategy simulation as an integral part of your strategy course. The two web-based strategy simulations—The Business Strategy Game or GLO-BUS—that are companions to this text incorporate the very kinds of strategic thinking, strategic analysis, and strategic decision-making described in the text chapters and connect beautifully to the chapter content. The automated nature of both online strategy simulations entails minimal administrative time and effort on the instructor’s part—see Sections 2 and 3 for more details.
· The merits of incorporating the use of the ConnectTM Management Web-based assignment and assessment platform accompanying the 19th Edition, into your course requirements. Connect includes chapter quizzes, case assignment exercises for 10 of the 16 cases, and learning assurance exercises and Concept Check quizzes for all 10 chapters of the3rd Edition. Connect offers automatic grading for all chapter quizzes, and many of the case exercises and learning assurance exercises. Connect offers an easy-to-administer approach to testing and assessing individual-level student mastery of chapter concepts and case analysis (covered in Section 3).
· Ideas on course design and course organization (Section 3 and Section 4).
· Suggestions for sequencing the case assignments and ideas about how to use the cases effectively (Section 3).
· Two sample course syllabi (Section 4).
· Ten sample schedules of class activities and daily assignments (Section 4).
· A test bank prepared by the co-authors that contains over 600+ multiple choice questions and
short-answer/essay questions (Section 5).
· A set of Lecture Notes for each of the 10 chapters (Section 6).
· A comprehensive teaching note for each of the 16 cases in Essentials of Strategic Management
(Section 7).
In addition to the Instructor’s Manual, the support package for adopters also includes:
Online Learning Center (OLC) The instructor section of www.mhhe.com/gamble includes the Instructor’s Manual and other instructional resources. Your McGraw-Hill representative can arrange delivery of instructor support materials in a format-ready Standard Cartridge for Blackboard, WebCT and other web-based educational platforms.
PowerPoint Slides To facilitate delivery preparation of your lectures and to serve as chapter outlines, you’ll have access to the PowerPoint presentations that the authors have developed for their own classes. The collection includes approximately 350 professional-looking slides displaying core concepts, analytical procedures, key points, and all the figures in the text chapters.
Accompanying Case Videos Nine of the cases (Competition among the North American Warehouse Clubs, Netflix, Redbox, Sift Cupcake and Dessert Bar, Blue Nile, Google, Sara Lee, Southwest Airlines, Starbucks, and Cash Connection) have accompanying video segments that can be shown in conjunction with the case discussions. Suggestions for using each video are contained in the teaching note for that case.
A Comprehensive Test Bank and EZ Test Software There is a 700+-question test bank, consisting of both multiple choice questions and short answer/essay questions that you can use in conjunction with McGraw-Hill’s EZ Test electronic testing software to create tests from chapter- or topic-specific lists. The EZ Test software enables allows instructors to add their own questions to those that appear in the test bank. The EZ Test program gives you the capability to create and print multiple versions of the test and to administer the test via the Web at www.eztestonline.com. Tests can also be exported into a course management system such as WebCT, BlackBoard, PageOut, and Apple’s iQuiz.
Instructor’s Resource CD-ROM All instructor supplements are available to text adopters in this one-stop multimedia resource, including case videos, the Instructor’s Manual, EZ Test software, and PowerPoint presentations.
All these Instructor Resources included in the Essentials of Strategic Management package gives you the capability to custom-tailor your course using most any combination of the following powerful and proven teaching/learning techniques:
· Lectures (supported by Lecture Notes and PowerPoint slides).
· Case discussions (All 16 cases have teaching notes developed by the text authors).
· Oral team presentations on one or more assigned cases.
· Use of either GLO-BUS or The Business Strategy Game to serve as an integrative, capstone exercise. Both simulations are a breeze to administer, are automatically graded, and provide detailed data in the form of a Learning Assurance Report showing how each student in your class performed vis-à-vis all students at all schools worldwide that have played the simulation over the last 12 months (a population of 30,000+ in the case of GLO-BUS and 40,000+ in the case of The Business Strategy Game).
· Use of the chapter-end Assurance of Learning exercises that may be coupled with instructor-developed scoring rubrics to assess course or program learning objectives. The exercises may also be assigned for class discussion, oral team presentations, or written reports not linked to course embedded assessment.
· Each chapter also contains Exercises for Simulation Participants that tightly connect chapter concepts to the issues and decisions that class members wrestle with when running their simulation company for either The Business Strategy Game or GLO-BUS; many of these exercises/questions are also appropriate for use with other strategy simulations.
The ability to choose among the above options, backed by the array of support materials in the Instructor Resources package, give you enormous course design flexibility and provides you with a powerful kit of teaching/learning tools. We’ve done our very best to ensure that the 3rd Edition package will work especially well for you in the classroom, help you economize on the time needed to be well-prepared for each class, and cause students to conclude that your course is one of the very best they have ever taken—from the standpoint of both enjoyment and learning a lot.
Essentials of Strategic Management, 3rd Edition:
What to Expect
In preparing our revision of the text chapters for this 3rd edition of Essentials of Strategic Management, we have strived to hit the bulls-eye with respect to both content and teaching/learning effectiveness. This edition also includes the important contributions of our newest member of the author team, Margie Peteraf. The author team’s overriding objectives for this revision were to:
· Thoroughly explain core concepts and analytical tools in language that students can grasp. The discussions have been carefully crafted to maximize understanding and facilitate correct application.
· Strengthen linkages to the latest research findings.
· Modify the coverage and exposition as needed to ensure squarely on-target content.
· Provide first-rate examples at every turn. Illustrating the connection and application of core concepts and analytical tools to real-world circumstances correctly is the only effective way to convince readers that the subject matter merits close attention and deals directly with what every student needs to know about crafting, implementing, and executing business strategies in today’s market environments.
We believe this 3rd edition incorporates all of the necessary elements to support your delivery of a successful undergraduate or MBA strategic management course. Chapter discussions cut straight to the chase about what students really need to know. Our explanations of core concepts and analytical tools reflect current research and are covered in enough depth to truly add value for the student. All the chapters are flush with convincing examples that students can easily relate to. There’s a straightforward, integrated flow from one chapter to the next. We have deliberately adopted a pragmatic, down-to-earth writing style, not only to better communicate to an audience of students (who, for the most part, will soon be practicing managers) but also to convince readers that the subject matter deals directly what managers and companies do in the real world.
And, thanks to the excellent case research and case writing being done by colleagues in strategic management, this edition contains a set of 16 high-interest cases with unusual ability to work magic in the classroom. Great cases make it far easier for you to drive home valuable lessons in the whys and hows of successfully crafting and executing strategy.
Organization, Content, and Features of the Text Chapters
Our objective in undertaking the revision of this text was to ensure that its content was current, with respect to both scholarship and managerial practice, and presented in as clear and compelling a fashion as possible. We established five criteria for meeting this objective, namely that the final product must:
· Explain core concepts in language that students can grasp and provide first-rate examples of their relevance and use by actual companies.
· Thoroughly describe the tools of strategic analysis, how they are used, and where they fit into the managerial process of crafting and executing strategy.
· Incorporate the latest developments in the theory and practice of strategic management in every chapter to keep the content solidly in the mainstream of contemporary strategic thinking.
· Focus squarely on what every student needs to know about crafting, implementing, and executing business strategies in today’s market environments.
· Provide an attractive set of contemporary cases that involve headline strategic issues and give students ample opportunity to apply what they’ve learned from the chapters.
We believe this 3rd edition measures up on all five criteria and that you’ll be amply convinced that no other leading text does a better job of setting forth the principles of strategic management and linking these principles to both sound theory and best practices.
There are five noteworthy traits that strongly differentiate this text and the accompanying instructional package from others in the field:
1. Our coverage of resource-based theory of the firm in the 3rd edition is unsurpassed by any other leading strategy text. RBV principles and concepts are prominently and comprehensively integrated into our coverage of crafting both single-business and multi-business strategies. In Chapters 3 through 8 it is repeatedly emphasized that a company’s strategy must be matched not only to its external market circumstances but also to its internal resources and competitive capabilities. Moreover, an RBV perspective is thoroughly integrated into the presentation on strategy execution to make it unequivocally clear how and why the tasks of assembling intellectual capital and building core competencies and competitive capabilities are absolutely critical to successful strategy execution and operating excellence.
2. Our coverage of business ethics, core values, social responsibility, and environmental sustainability is unsurpassed by any other leading strategy text. Our chapter on “Strategy, Ethics, and Corporate Social Responsibility” is embellished with fresh content so that it can better fulfill the important functions of (1) alerting students to the role and importance of ethical and socially responsible decision-making and (2) addressing the accreditation requirements of the AACSB International that business ethics be visibly and thoroughly embedded in the core curriculum. Moreover, discussions of the roles of values and ethics are integrated into portions of Chapters 2 and 10 to further reinforce why and how considerations relating to ethics, values, social responsibility, and sustainability should figure prominently into the managerial task of crafting and executing company strategies.
3. The caliber of the case collection in the 3rd Edition is truly top-notch from the standpoints of student appeal, teachability, and suitability for drilling students in the use of the concepts and analytical treatments in Chapters 1 through 10. The 16 cases included in this edition are the very latest, the best, and the most on-target that we could find. The ample information about the cases in the Instructor’s Manual makes it effortless to select a set of cases each term that will capture the interest of students from start to finish.
4. The ability to utilize the Publisher’s trailblazing web-based assignment and assessment platform called Connect to gauge class members’ prowess in accurately completing (a) selected chapter-end exercises, (b) chapter-end quizzes, and (c) the creative author-developed exercises for 10 of the cases in this edition.
5. The two cutting-edge and widely-used strategy simulations—The Business Strategy Game and GLO-BUS—that are optional companions to the 3rd edition give you unmatched capability to employ a text-case-simulation model of course delivery.
The following rundown summarizes the noteworthy features and topical emphasis in this new edition:
· Chapter 1 focuses on the central questions of “Where are we now?” “Where do we want to go from here?” and “How are we going to get there?” In putting these questions into the context of business strategy, we introduce students to the primary approaches to building competitive advantage and the key elements of business-level strategy. Following Henry Mintzberg’s pioneering research, we also stress why a company’s strategy is partly planned and partly reactive and why this strategy tends to evolve over time. The chapter also discusses why it is important for a company to have a viable business model that outlines the company’s customer value proposition and its profit formula. This brief chapter is the perfect accompaniment to your opening day lecture on what the course is all about and why it matters.
· Chapter 2 delves more deeply into the managerial process of actually crafting and executing a strategy—it makes a great assignment for the second day of class and provides a smooth transition into the heart of the course. The focal point of the chapter is the five-stage managerial process of crafting and executing strategy: (1) forming a strategic vision of where the company is headed and why, (2) developing strategic as well as financial objectives with which to measure the company’s progress, (3) crafting a strategy to achieve these targets and move the company toward its market destination, (4) implementing and executing the strategy, and (5) monitoring progress and making corrective adjustments as needed. Students are introduced to such core concepts as strategic visions, mission statements and core values, the balanced scorecard, and business-level versus corporate-level strategies. There’s a robust discussion of why all managers are on a company’s strategy-making, strategy-executing team and why a company’s strategic plan is a collection of strategies devised by different managers at different levels in the organizational hierarchy. The chapter winds up with a section on how to exercise good corporate governance and examines the conditions that led to recent high-profile corporate governance failures.
· Chapter 3 sets forth the now-familiar analytical tools and concepts of industry and competitive analysis and demonstrates the importance of tailoring strategy to fit the circumstances of a company’s industry and competitive environment. The standout feature of this chapter is a presentation of Michael Porter’s “five forces model of competition” that has long been the clearest, most straightforward discussion of any text in the field.
· Chapter 4 presents the resource-based view of the firm and convincingly argues why a company’s strategy must be built around its most competitively valuable resources and capabilities. We provide students with a simple taxonomy for identifying a company’s resources and capabilities and frame our discussion of how a firm’s resources and capabilities can provide a sustainable competitive advantage with the VRIN model. We introduce the notion of a company’s dynamic capabilities and cast SWOT analysis as a simple, easy-to-use way to assess a company’s overall situation in terms of its ability to seize market opportunities and ward off external threats. There is solid coverage of value chain analysis, benchmarking, and competitive strength assessments—standard tools for appraising a company’s relative cost position and customer value proposition vis-à-vis rivals.
· Chapter 5 deals with the basic approaches used to compete successful and gain a competitive advantage over market rivals. This discussion is framed around the five generic competitive strategies—low-cost leadership, differentiation, best-cost provider, focused differentiation, and focused low-cost.
· Chapter 6 deals with the strategy options available to complement a company’s basic competitive strategy and improve its market position. The advantages and disadvantages of offensive strategies (including the benefits of a blue ocean strategy), defensive strategies, first-mover, fast-follower, and late-mover strategies are discussed. The chapter features sections on what use to make of vertical integration strategies; outsourcing strategies; strategic alliances and collaborative partnerships; and merger and acquisition strategies.
· Chapter 7 explores the full range of strategy options for competing in international markets: export strategies; licensing; franchising; establishing a subsidiary in a foreign market; and using strategic alliances and joint ventures to build competitive strength in foreign markets. There’s also a discussion of how to best tailor a company’s international strategy to cross-country differences in market conditions and buyer preferences, how to use international operations to improve overall competitiveness, and the the unique characteristics of competing in emerging markets.
· Chapter 8 introduces the topic of corporate-level strategy—a topic of concern for multibusiness companies pursuing diversification. This chapter begins by explaining why successful diversification strategies must create shareholder value and lays out the three essential tests that a strategy must pass to achieve this goal (the industry attractiveness, cost of entry, and better-off tests). Corporate strategy topics covered in the chapter include methods of entering new businesses, related diversification, unrelated diversification, combined related and unrelated diversification approaches, and strategic options for improving the overall performance of an already diversified company. The chapter’s analytical spotlight is trained on the techniques and procedures for assessing a diversified company’s business portfolio—the relative attractiveness of the various businesses the company has diversified into, the company’s competitive strength in each of its business lines, and the strategic fit and resource fit among a diversified company’s different businesses. The chapter concludes with a brief survey of a company’s four main post-diversification strategy alternatives: (1) sticking closely with the existing business lineup, (2) broadening the diversification base, (3) divesting some businesses and retrenching to a narrower diversification base, and (4) restructuring the makeup of the company’s business lineup.
· Chapter 9 reflects the very latest in the literature on (1) a company’s duty to operate according to ethical standards, (2) a company’s obligation to demonstrate socially responsible behavior and corporate citizenship, and (3) why more companies are limiting strategic initiatives to those that meet the needs of consumers in a manner that protects natural resources and ecological support systems needed by future generations.
The discussion includes approaches to ensuring consistent ethical standards for companies with international operations. The contents of this chapter will definitely give students some things to ponder and will help to make them more ethically-aware and conscious of why all companies should conduct their business in a socially responsible and sustainable manner. Chapter 9 has been written as a “stand-alone” chapter that can be assigned in the early, middle, or late part of the course.
· Chapter 10 is anchored around a pragmatic, compelling conceptual framework: (1) building dynamic capabilities, core competencies, resources, and structure necessary for proficient strategy execution; (2) allocating ample resources to strategy-critical activities; (3) ensuring that policies and procedures facilitate rather than impede strategy execution; (4) pushing for continuous improvement in how value chain activities are performed; (5) installing information and operating systems that enable company personnel to better carry out essential activities; (6) tying rewards and incentives directly to the achievement of performance targets and good strategy execution; (7) shaping the work environment and corporate culture to fit the strategy; and (8) exerting the internal leadership needed to drive execution forward.
The recurring theme throughout the chapter is that implementing and executing strategy entails figuring out the specific actions, behaviors, and conditions that are needed for a smooth strategy-supportive operation—the goal here is to ensure that students understand that the strategy-implementing/strategy-executing phase is a make-it-happen-right kind of managerial exercise that leads to operating excellence and good performance.
We have done our best to ensure that the 10 chapters hit the bulls-eye in covering the concepts, analytical tools, and approaches to strategic thinking that should comprise a senior/MBA course in strategy. There are new and updated Concepts & Connections capsules in each chapter that tie core concepts to real-world management practice and that complement the fresh examples and illustrations in each chapter. We’ve provided a host of interesting chapter-end Assurance of Learning Exercises that you can use as a basis for class discussion or written assignments or team presentations used for assessment purposes. In the event you have opted to utilize a strategy simulation as part of your course offering, we have created chapter-end Exercises for Simulation Participants that provide a terrific way to tie the chapter coverage to the situational circumstances that confront students in running their simulation company. We are confident you’ll find this 10-chapter presentation has a positive pedagogical impact it has in the classroom and sets an effective stage for your lectures and helping you persuade students that the discipline of strategy merits their rapt attention.
The Case Collection
The 16-case line-up in this edition is flush with interesting companies and valuable lessons for students in the art and science of crafting and executing strategy.
n There’s a good blend of cases from a length perspective—about one-half are under 15 pages, yet offer plenty for students to chew on; about a fourth are medium-length cases; and the remaining fourth are detail-rich cases that call for more sweeping analysis.
n At least 12 of the 16 cases involve companies, products, or people that students will have heard of, know about from personal experience, or can easily identify with.
n The lineup includes at least four cases that will provide students with insight into the special demands of competing in industry environments where technological developments are an everyday event, product life cycles are short, and competitive maneuvering among rivals comes fast and furious.
n Twelve of the cases involve situations where the role of company resources and competitive capabilities are emphasized.
n Scattered throughout the lineup are 7 cases concerning non-U.S. companies, globally competitive industries, and/or cross-cultural situations; these cases, in conjunction with the globalized content of the text chapters, provide abundant material for linking the study of strategic management tightly to the ongoing globalization of the world economy.
n Eleven cases involve public companies, thus allowing students to do further research on the Internet regarding recent developments at these companies.
n Four cases deal with strategic problems of family-owned or relatively small entrepreneurial busineses.
n Nine of the 16 cases (Competition among the North American Warehouse Clubs, Netflix, Redbox, Sift Cupcake and Dessert Bar, Blue Nile, Google, Sara Lee, Southwest Airlines, Starbucks, and Cash Connection) have accompanying video segments that can be shown in conjunction with the case discussions.
A grid showing the issues that are prominent in each of the 16 cases in this edition is presented in Table 1.
Suggestions for sequencing the case assignments can be found in Section 3 of this IM. The sample course outlines and daily schedules of class activities in Section 4 provide further suggestions about the sequencing of case assignments and how to integrate your coverage of the 10 chapters, the various case assignments, and use of a strategy simulation.
Specific details about how to utilize each case (including recommended assignment questions and recommended oral team presentation assignments are contained in the teaching notes for each of the cases (the TNs appear in Section 7).
Sample course syllabi displaying possible case sequencing and suggested case assignments are presented in Section 4 of this volume of the IM.
It is worth mentioning at this juncture that there is a comprehensive table of financial ratios in Appendix of the text that provides the formulas and brief explanations of what each ratio reveals. Adopters of prior editions have told us that students find this table extremely helpful in guiding their analyses of the financial statements contained in the cases. You will probably want to call this table to the attention of class members and urge that they make full use of the information it contains.
We believe you will find the collection of 16 cases quite appealing, eminently teachable, and very suitable for drilling students in the use of the concepts and analytical treatments in Chapters 1 through 10. With this case lineup, you should have no difficulty whatsoever assigning cases that will capture the interest of students from start to finish.
Value-Adding Student Support Materials for the 3rd Edition of Essentials of Strategic Management
The text and text website include several kinds of support materials to help students grasp the material.
Key Points Summaries At the end of each chapter is a synopsis of the core concepts, analytical tools and other key points discussed in the chapter. These chapter-end synopses help students focus on basic strategy principles, digest the messages of each chapter, and prepare for tests.
Online Learning Center (OLC) The following helpful aids are available to students via the publisher’s OLC at www.mhhe.com/gamble:
n Self-Graded Chapter Quizzes The OLC contains 20-question quizzes for each chapter to allow students to measure their grasp of the material presented in each of the 10 chapters.
n Guide to Case Analysis Explains what a case is, why cases are a standard part of courses in strategy, how to prepare for a class discussion of a case, how to prepare a written case analysis, what is expected in an oral presentation, and how to use financial ratio analysis to assess a company’s financial condition. We suggest having students read this Guide prior to the first class discussion of a case.
n Study Questions for Assigned Cases A set of PDF files containing study questions for each of the 15 cases in this edition is posted; the ready accessibility of these files to class members eliminates the need for you to provide study questions for assigned cases. The study questions provided to students match those appearing in the teaching notes for these cases.
n Accompanying Case Videos Some of the brief video segments that accompany cases are available on the student portion of the textbook website.
n PowerPoint Slides There is a selection of PowerPoint slides for each of the 10 chapters.
ConnectTM Management Web-based Assignment and Assessment Platform Connect chapter quizzes, learning assurance exercises, and case exercises can be used as a graded component of the course, an assessment mechanism, or as an effective way to prepare students for chapter exams, in-class discussions of cases, written case assignments or oral case presentations. Whether Connect assignments are calculated into students’ grades for the course or not, our robust collection of chapter quizzes, chapter learning assurance exercises, and case preparation exercises will give students valid and timely feedback about their mastery of the concepts and analytical tools presented in the text. All students who purchase a new copy of the text are automatically provided access to Connect at no additional charge (those who have a used copy can obtain access by paying a modest fee – $20 at the time of this writing).
The Business Strategy Game and GLO-BUS Online Strategy Simulations Using one of the two companion strategy simulations is a powerful and constructive way of emotionally engaging class members in the subject matter of the course. We know of no more effective and interesting way to stimulate the competitive energy of students and prepare them for the rigors of real-world business decision-making than to have them match strategic wits with classmates in running a company in head-to-head competition for global market leadership.
In Section 2 of this IM, we outline why using a competition-based strategy simulation as a course centerpiece makes great sense and provide you with detailed suggestions for successfully incorporating either The Business Strategy Game or GLO-BUS in your strategic management course.
Should you decide to incorporate use one of the two simulations in your course, the simplest (and usually the cheapest) way for students to obtain the simulation is via a credit card purchase at www.bsg-online.com (if you opt to use The Business Strategy Game) or at www.glo-bus.com (if you opt to use GLO-BUS). Purchasing the simulation direct at the web site allows students to bypass paying sometimes hefty bookstore markups (a savings that can amount to $10-$15). The second way for students to register for the simulation is by using a pre-paid access code that comes bundled with the 3rd Edition when you order the text-simulation package through your bookstore—this requires use of a separate ISBN (the 3rd Edition bundled with either simulation has a different ISBN number than just the 3rd Edition ordered alone). Your McGraw-Hill rep can provide you with the correct ISBN for ordering the combination text-simulation package through your bookstore(s).
Section 2
Using a Strategy
Simulation in Your Course:
The Compelling Benefits,
What’s Involved,
and How to Proceed
For some years now, growing numbers of strategy instructors at business schools worldwide have been transitioning from a purely text-cases course structure to a more robust and energizing text-cases-simulation course structure. Incorporating a competition-based strategy simulation has the strong appeal of providing class members with an immediate and engaging opportunity to apply the concepts and analytical tools covered in the chapters and have hands-on involvement in crafting and executing a strategy for a virtual company they have been assigned to manage.
Two of the world’s most widely-used and pedagogically effective online strategy simulations, The Business Strategy Game and GLO-BUS, are optional companions for this text.
· The Business Strategy Game is the world’s most popular strategy simulation, having been used in courses involving over 650,000 students at 700+ university campuses in 40+ countries.
· GLO-BUS, a somewhat simpler strategy simulation introduced in 2004, has been used at 400+ university campuses worldwide in courses involving over 150,000 students.
Arthur Thompson, an author of this text, is a co-author of both The Business Strategy Game and GLO-BUS and painstakingly designed both simulations to provide instructors with an appealing and proven means of:
· Getting class members personally engaged in thinking strategically and applying the chapter content,
· Giving students valuable practice in synthesizing a variety of decisions (relating to production, pricing and marketing, social responsibility/citizenship, and finance) into an overall strategy and competitive approach that produces good financial and strategic results.
The role of the “Exercises for Simulation Participants”, found at the end of each of the 12 chapters, is to provide clear guidance to class members in applying the concepts, analytical tools, and strategy options covered in the chapters to the issues and decisions that they have to wrestle with in managing their simulation company.
How the Strategy Simulations Work
In both The Business Strategy Game (BSG) and GLO-BUS, 1 to 5 class members are assigned to run a company that competes head-to-head against companies run by other class members.
· In BSG, team members run athletic footwear companies that produce and market both branded and private-label footwear.
· In GLO-BUS, team members operate digital camera companies that design, assemble, and market entry-level digital cameras and upscale, multi-featured cameras.
In both simulations, companies compete in a global market arena, selling their products in four geographic regions—Europe-Africa, North America, Asia-Pacific, and Latin America. Each management team is called upon to craft a strategy for their company and make decisions relating to production capacity, plant operations, workforce compensation, marketing, social responsibility/citizenship, and finance.
Company co-managers are held accountable for their decision-making. Each company’s performance is scored on the basis of earnings per share, return on equity investment, stock price, credit rating, and image rating. Rankings of company performance, along with a wealth of industry and company statistics, are available to company co-managers after each decision round to use in making strategy adjustments and entering decisions for the next competitive round. You can be certain that the market environment, strategic issues, and operating challenges that company co-managers must contend with in running their simulation company are very tightly linked to the concepts, analytical tools, and strategy options they encounter in the text chapters (this is something you can quickly confirm by skimming through some of the Exercises for Simulation Participants that appear at the end of each chapter).
We suggest that you schedule 1 or 2 practice rounds and anywhere from 4 to 10 regular (scored) decision rounds (6 to 10 rounds are better than 3-5 rounds). Each decision round represents a year of company operations and will entail roughly two hours of time for company co-managers to complete. Decision rounds can be scheduled weekly, bi-weekly, or at whatever intervals instructors wish. Sample schedules for courses of varying length and numbers of class meetings are provided.
When the instructor-specified deadline for a decision round arrives, the simulation server automatically accesses the saved decision entries of each company, determines the competitiveness and buyer appeal of each company’s product offering relative to the offerings of rival companies, and then allocates sales and market shares, geographic region by geographic region, based on:
· how each company’s prices compare against the prices of rival brands,
· how each company’s product quality compares against the quality of rival brands,
· how each company’s product line breadth and selection compares to those of rival companies,
· how each company’s advertising effort compares to rivals’ advertising, and so on for a total of 11 competitive factors that determine unit sales and market shares.
The competitiveness and overall buyer appeal of each company’s product offering in comparison to the product offerings of rival companies is all-decisive—this algorithmic feature is what makes BSG and GLO-BUS “competition-based” strategy simulations. Once each company’s sales and market shares are awarded based on the competitiveness of its respective overall product offering vis-à-vis rival companies, the various company and industry reports detailing the outcomes of the decision round are then generated. Company co-managers can access the results of the decision round 15-20 minutes after the decision deadline.
Rest assured that both simulations were meticulously designed to be instructor-friendly. You’ll be pleasantly surprised—and we think quite pleased—at how little time it takes to gear up for and to administer an automated online simulation like The Business Strategy Game or GLO-BUS.
This remainder of this section provides you with information about the two strategy simulations and offers suggestions for successfully using either BSG or GLO-BUS in your course. Here is a quick reference guide to the contents of this section:
The Compelling Case for Using a Strategy Simulation in Your Course
How Much Time Will It Take for You to Learn About and Conduct a Simulation
A Birdseye View of The Business Strategy Game
A Birdseye View of GLO-BUS
Special Features and Extras of Both Strategy Simulations
Which Simulation Makes the Most Sense for Your Course
Course Setup: A Quick, 4-Step Procedure
How Do Class Members Register and Gain Full Access to the Simulation Website?
How Much Should a Simulation Exercise Count in the Total Course Grade?
How Company Performances Are Scored: A Balanced Scorecard Approach
What to Do If You Opt to Use Either of the Companion Simulations
The Teaching/Learning Benefits of Using a Strategy Simulation in Your Course
There are three exceptionally important teaching/learning benefits associated with using a competition-based simulation in strategy courses taken by seniors and MBA students:
1. The three-pronged text-case-simulation course delivery model delivers significantly more teaching-learning power than the traditional text-case delivery model. Having class members run a company in head-to-head competition against companies managed by other class members provides a truly powerful learning experience that engages students in the subject matter of the course and helps achieve course learning objectives. This added learning power of a strategy simulation stems from three things:
· Using both case analysis and a competition-based strategy simulation to drive home the lessons that class members are expected to learn is far more pedagogically powerful and lasting than relying solely on case analysis alone. Both cases and strategy simulations drill students in thinking strategically and applying what they read in your text, thus helping them connect theory with practice and gradually building better business judgment. What cases do that a simulation cannot is give class members broad exposure to a variety of companies and industry situations and insight into the kinds of strategy-related problems real-world managers face. But what a competition-based strategy simulation does far better than case analysis is thrust class members squarely into an active, hands-on managerial role where they are totally responsible for assessing market conditions, determining how to respond to the actions of competitors, forging a long-term direction and strategy for their company, and making all kinds of operating decisions. Because company co-managers are held fully accountable for their decisions and their company’s performance, they are strongly motivated to dig deeply into company operations, probe for ways to be more cost-efficient and competitive, and ferret out strategic moves and decisions calculated to boost company performance. Such diligent and purposeful actions on the part of company co-managers translate into a productive learning experience with strong retention of the lessons learned and higher achievement of course learning objectives.
· The achievement of course learning objectives is further enhanced because of the extremely tight connection between the issues and decisions that company managers face in running their BSG or GLO-BUS company and the concepts, analytical tools, and strategy options they encounter in the 12 chapters of the 3rd edition. Having class members use an interactive “learn-by-doing” tool to apply and experiment with the chapter content, while at the same time honing their business and decision-making skills, generates solid learning results.
· Since it doesn’t take long for a spirited rivalry to emerge among the management teams of competing companies and for co-managers to become emotionally invested in figuring out what strategic moves to make to out-compete rivals, class members become more receptive to reading the text chapters, listening to your lectures, and wrestling with assigned cases—partly in the hope they will come across ideas and approaches that will help their company outperform rivals and partly because they begin to see the practical relevance of the subject matter and the value of taking the course.
To provide you with quantitative evidence of the boost in learning power and achievement of course objectives that occurs with using The Business Strategy Game or GLO-BUS, there is a built-in Learning Assurance Report showing how well each class member performs on 9 skills/learning measures versus tens of thousands of students worldwide that have completed the simulation in the past 12 months.
2. The competitive nature of a strategy simulation arouses positive energy and steps up the whole tempo of the course by a notch or two.
· The healthy rivalry that emerges among the management teams of competing companies stirs competitive juices and spurs class members to fully exercise their strategic wits, analytical skills, and decision-making prowess—much more so than occurs with case assignments. Nothing energizes a class quicker or better than concerted efforts on the part of class members to gain a high industry ranking and avoid the perilous consequences of getting outcompeted by other members of the class. It is hard to duplicate the excitement and hallway chatter that occurs when the results of the latest decision round become available and co-managers renew their quest for strategic moves and actions that will strengthen company performance. At the same time, class members become more receptive to reading the text chapters, listening to your lectures, and wrestling with assigned cases—partly in the hope they will come across ideas and approaches that will help their company outperform rivals and partly because they begin to see the practical relevance of the subject matter and the value of taking the course.
· Participating in a competition-based strategy simulation is an unusually stimulating and enjoyable way for class members to learn. As soon as your students start to say “Wow! Not only is this fun but I am learning a lot”, which they will, you have won the battle of engaging students in the subject matter and moved the value of taking your course to a much higher plateau in the business school curriculum. This translates into a livelier, richer learning experience from a student perspective and better instructor-course evaluations.
3. Use of a fully automated online simulation reduces the time instructors spend on course preparation, course administration, and grading.
· Since the simulation exercise involves a 20 to 30-hour workload for student-teams (roughly 2 hours per decision round times 10-12 rounds, plus optional assignments), simulation adopters often compensate by trimming the number of assigned cases from, say, 10 to 12 to perhaps 4 to 6, which significantly reduces the time instructors spend reading cases, studying teaching notes, and otherwise getting ready to lead class discussion of a case or grade oral team presentations. The cases-for-simulation tradeoff is a sound one because class members will learn as much or more from their experience managing their simulation company and retain it longer, as compared to the learning gleaned from covering 4 to 6 more cases.
· Course preparation time is further cut because you can use several class days to have students meet in the computer lab to work on upcoming decision rounds or a 3-year strategic plan (in lieu of lecturing on a chapter or covering an additional assigned case). Lab sessions provide a splendid opportunity for you to visit with teams, observe the interplay among co-managers, and view the caliber of the learning experience that is going on.
· Use of a simulation gives you leeway to eliminate at least one assignment that entails considerable grading on your part. Grading one less written case or essay exam or other written assignment saves enormous time. With BSG and GLO-BUS, grading is effortless and takes only minutes. Once you enter percentage grading weights for each simulation activity in your online grade book, an overall numerical grade is automatically calculated for each class member.
· The speed and ease with which you can conduct a fully-automated strategy simulation for your course frees time for other activities. Plus, every task can be performed from an office or home PC that has an Internet connection and an Internet browser.
Instructors who have used state-of-the-art simulations in their strategy courses quickly become enthusiastic converts because the added spark to the course and student excitement surfaces rapidly and the resulting teaching/learning benefits are undeniable. Moreover, the word about the effectiveness of using a top-notch strategy simulation seems to be spreading. Recent market data indicates that close to 2,000 instructors worldwide are now using strategy simulations in courses taken by 120,000+ students annually and that the number of students participating in simulations is growing ~10% annually.
How Much Time Will It Take to Learn About and Conduct Either One of the Simulations for Your Course?
One of the biggest factors probably weighing on your mind if you are contemplating being a first-time user is “how much time will it take me to learn about The Business Strategy Game or GLO-BUS, conduct the simulation exercise for my course, and assign grades on the simulation exercise?” Here are some honest estimates of what you can expect:
n It will take perhaps 30 minutes for you to explore the 4-page Quick Guide to Getting Started for instructors that speeds the gear-up process—this online guide will have you up and running the simulation for your class in about an hour, plus it has built-in links to additional information if you want to know more about particular facets of the simulation. You might also want to skim through the Participant’s Guide if you want to explore what running a company is all about from a student perspective—but this can be deferred until later if you wish. It will, of course, take a couple of hours to really digest the contents of both the Quick Guide and the Participant’s Guide.
n To launch either one of the simulations for your course, you must complete a simple Course Setup procedure that entails deciding what size management teams you want (anywhere between 1 and 5 persons), specifying the number of companies you want to create (which is a function of expected class size and how many people you want to co-manage each company), selecting dates/times for each decision round to be completed, indicating which optional assignments you want company co-managers to complete (the quizzes, strategic plans, peer evaluations, and company presentation exercise), and distributing company registration codes and/or registration procedures to class members. Recommendations for handling each of the options are provided in the Quick Guide to Getting Started (and on-screen guidance is also provided during the Course Setup procedure). It will take you about 30 minutes or so to complete the Course Setup procedure the first time you do it and about 15 minutes each time thereafter.
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