34538 - Diversification and Acquisition

Learning outcomes

The student explores many dimensions of firms growth. He is particularly focused on: 1) acquiring the ability of applying diversification strategies: starting from the analysis of the different reasons that push a company to diversify its business he studies the challenge of building competitive advantage from managing a diversified business portfolio; 2) merger and acquisition strategies: he can understand the reasons that push towards acquisition strategies and knows the critical factors that influence the acquisition success in the most critical phase, the post acquisition integration of the two companies.

Course contents

nit 1

Topics:

· Strategic Management and Corporate Strategy

· Corporate Advantage

Case/Workshop:

Corporate Strategy in Practice – the Strategist's Job

Unit 2

Topics:

· Diversification Strategy

· Related and Unrelated Diversification

Case/Workshop:

Walt Disney Co: The Entertainment King (HBSP 701035-PDF-ENG)

Unit 3

Topics:

· Vertical Integration

Case/Workshop:

The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? (HBSP 709462-PDF-ENG)

Unit 4

Topics:

· International Expansion

· Organization of Multi Business Companies

Case/Workshop:

Teletech Corporation Case (University of Virginia Case # UV A-F-1485, 2005) – to be distributed in class

Unit 5

Topics:

· Alliances, Mergers and Acquisitions

The information contained in this syllabus may be subject to moderate changes. The course instructor will communicate any modifications to students.

Readings/Bibliography

Given the “state-of-the-art” and nature of the course, no textbook adequately covers the scope of this course. The course thus relies on readings, cases (as per the above course outline), and foremost lecture notes which will be distributed after each session. Any Strategy textbook contains some chapters on corporate strategy which you may want to consult as you see fit.

Follow up readings:

§ “Does corporate strategy matter?”, EH Bowman, CE Helfat - Strategic Management Journal, 2001

§ “The death of diversification? The focusing of the world's industrial firms, 1980 – 2000”, LC Franko – Business Horizon, 2004

§ “Corporate strategy: the quest for parenting advantage”, A Campbell, M Goold, M Alexander - Harvard Business Review, 1995

§ “Does Diversification Cause the" Diversification Discount"?, B Villalonga - Financial Management, 2004

§ “Creating corporate advantage”, DJ Collis, CA Montgomery - Harvard Business Review

• “Desperately seeking synergy”, M Goold, A Campbell - Harvard Business Review, 1998

§ “When to ally and when to acquire”, JH Dyer, P Kale, H Singh - Harvard Business Review, 2004

§ “The composition of boards of directors and strategic control: Effects on corporate strategy”, B Baysinger, RE Hoskisson - Academy of Management Review, 1990

§ “Vertical integration and corporate strategy”, KR Harrigan - Academy of Management journal, 1985

Teaching methods

Conceptual understanding is developed through lectures, group discussion, case studies and textbook/course readings. You are expected to prepare the assigned cases and readings before each class. Informed and engaged participation is an essential part of this course and is expected from everyone. Active engagement means that you are listening carefully to the comments of your peers and seeking opportunities to make comments that move the class discussion forward.

Assessment methods

ASSESSMENT

§ 50% individual exam

§ 40% group coursework

§ 10% peer assessment

Individual Exam. 60 minutes, closed book (questions and short exercises).

Group Coursework. You are required to develop a consulting-like group project revolving around a specific case or a specific aspect of corporate strategy. Ideally, you should address a corporate strategy problem of a real company. We will discuss the scope of the project during the course. Groups must be formed by 4 or 5 people (Please note that no exception to this rule will be accepted).

In your project, you are expected to: a) define and describe the challenge to be addressed, b) describe the methodology that you use to address the challenge; c) collect relevant data and perform the required analyses; d) identify options and draw recommendations that address the challenge; e) outline the key milestones to implement your recommendations.

The outcome of your group project is a project report and a power point presentation.

• The project report should have no more than 3000 words (tables and graphs do not contribute to the word count). You are expected to decide the format and the structure of the report
• Your power point presentation should be aimed at conveying the key insights out of your analysis and recommendations. This presentation should be developed as a 5 minute elevator pitch. Within this constrain, you are free to organize your presentation as you see fit.

Deadlines

TBA in class - Group composition due

TBA in class- Project due

Your group project – both project report and power point presentation - will be assessed along the dimensions outlined below:

Project scope definition:

The report addresses a clear problem which has a real business relevance. The project scope is challenging but realistic. The exact questions/issues that must be addressed in order to solve the client's problem are identified.

Methodology and project design

The methodology is rigorous, well justified and uses relevant academic knowledge, theory, frameworks and previous literature. Where appropriate, alternative theories and methodologies are considered explicitly. Where possible the conclusions and implications of the project are explicitly hypothesised in order to decide on the right methods and data to test the hypotheses. The project design is explicit, practical and robust.

Data

The project uses an appropriate range of data, given its aims and methods and the time and resources available. The data may be any combination of primary and secondary, qualitative and quantitative. All secondary data sources should be cited.

Analysis and Interpretation

The analysis and interpretation are valid and appropriate and make specific reference to the Chinese context. Any statistical techniques are applied correctly, with due regard to the nature of the data, sample sizes, potential non-response bias, etc. Qualitative data and the results of quantitative analysis are interpreted critically and convincingly. Alternative interpretations and inferences are considered.

Recommendations and implementation plan

The conclusions and recommendations are clear and follow from the evidence and analysis. Where appropriate, alternative conclusions, perhaps involving competing hypotheses, strategies or courses of action, have been explicitly considered and tested against the evidence. Implementation and next steps have been thought through. Recommendations are spelt out, prioritised on both urgency and importance, and both valid and practical.

Project presentation and report

The produced documents are clear and professional. The report itself is well structured, easy to read, and convincing, with details relegated to appendices. Students are advised that although project presentation and report account for only 10% of the final grade, their quality will significantly influence the other 90%.

Office hours

See the website of Gianvito Lanzolla