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MBA/ENG 290.2 2008

International Competition in High Technology 
Class Syllabus

WORKING DRAFT FOR INFORMATIONAL PURPOSES  
(SUBJECT TO MAJOR CHANGES) 
Revision Date: September 16^th 2008 

Course Contents and Objectives 
Class Format and Preparation 
Team Presentation 
Attendance and Feedback 
Grades 
Required and Recommended Reading 
Web Resources 
CLASS SCHEDULE

1. Introduction
2. Competitive Advantage of Nations:  Nokia and Finland
3. Competitive Advantage of Nations:  Singapore, Inc.
4. Competitive Advantage of Nations:  China Outsourcing
5. Dell, HP, Acer, Asus, and Lenovo Value Chain
6. Dell, HP, Acer, Asus, and Lenovo Value Chain (cont.)
7. Value Chain: Philips vs. Matsushita
8. Value Chain: Samsung Semiconductor
9. Guest Lecture – TBD
10. Guest Lecture –  TBD      Value Chain:  Video Drivers in Consumer Electronics:  Broadcast vs. Cable vs. Telecom vs. Internet Video
11. Guest Lecture – TBD
12. Disruptive Technology and Crossing the Chasm
13. Competitive Advantage of Nations:  Silicon Valley Ecosystem
14. Wrap up Class

Course contents and objectives

Please note:  Due to the changes in the market environment and the nature of the class, the course syllabus is subject to major changes and should only be considered a draft and work in progress. 

The rise and fall of the high-technology industries reflect broad changes in markets, production organization, and business models, as well as the operation of government policies. These broader changes, which include but go well beyond the Internet revolution itself, suggest that the industrial economy is being fundamentally transformed by the diffusion of innovations in technology and business models across the industrial and industrializing economies. At the same time, these changes cannot be understood without a deeper examination of the factors that created competitive advantage at the national level in many of these industries during the previous three decades. This course explores the broad changes in "who is winning, who is losing, and why" in global markets for high-technology goods ranging from semiconductors to internet services to clean tech.

This course seeks to make sense of the decline and recovery of U.S. high-technology industries, the evolution of innovation and technology strategies and policies in Asia and Europe, the historic and current roles of governments in shaping markets for high-technology goods, and the impact on business strategies of recent developments in early-stage capital markets. Our general approach views technological innovation and competition as dynamic processes that reflect choices and policies made by firms and governments. Modern technologies develop in markets that are international in scope, often imperfectly competitive, and subject to influence by a variety of economic and political stakeholders. We will use an eclectic mix of practical, historical, and theoretical perspectives throughout the course in examining these issues. From time to time, we will be joined by venture capitalists, corporate executives, and technologists engaged in global high-technology markets for discussion of these issues.

Class Format and Preparation

The course will use a mix of case discussions, lectures and guest speakers from leading high tech companies, global corporations, and venture capital firms.

The expectation is that the cases and reading materials will be fully prepared for each session. Students are encouraged to Google outside sources to learn more about the company, case, outcomes and issues.

The format of the case discussions will be as follows:

Team Presentation

One pre-assigned team will have the opportunity to open the discussion of the case. Each case opening should consist of:

The total length of the case opening should be no more than 20 minutes. If your team makes use of overhead slides or other presentation material, you should limit yourself to just a few items. Case openings should emphasize the frameworks and models covered in class or elsewhere. You should submit one copy of slides and other presentation materials at the start of your session. Please note that everyone on the team does not have to present - it is usually recommended to pick one spokesman. Within 24 hours of the end of the class, the assigned team should post on the class wiki:

Class participation is strongly encouraged. You are invited to highlight insightful linkages between class material and your past experience as a professional and a global observer, to raise challenging questions and issues related to topics in global competition and strategies being reviewed, and to participate actively in discussion of cases and global trends. 
 
The instructor will also use a call list and any student may be called on at anytime. If for some special reason a student is not so ready for one class, please inform the instructor prior to class. Also, please use your name card throughout the semester. 
 
Many classes will also have an international business executive guest speaker that will comment on the class analysis of the case as well as provide a forum for practical questions and answers. Due to speaker availability, session topics may be changed as the semester progresses.

Attendance and Feedback

Attendance is expected and unexcused absences will affect course grade. Excused absences are those officially sanctioned by the school’s academic regulations. In all cases of absence, professional conduct and courtesy dictate that the instructor be informed prior to class. Failure to do so will cause consternation and disappointment.

As "International Trade and Competition in High Technology" is a broad topic, the instructor will do his best to adapt the course based on current events and student feedback. As a result, mandatory email questionnaires will be occasionally be sent out following a class with the expectation of responses by Tuesday at 9am. This questionnaire is not expected to take more than 5-10 minutes to complete, but timely submissions will count towards your final course grade.

Grades

Course grades will be based on both team activities (33%), individual team activities (33%) and individual activities (33%). Team activities will be decided primarily by assigned case openings and team member feedback on other team members. Individual activities will consist of class participation, email questionnaire responses, and any other extra credit projects (which can also be done with other students).

Extra credit projects will consist of either research questions assigned during class and/or projects approved by the professor.

Required and Recommended Reading

Required cases and articles will be published and purchased through Study.Net or referenced on the web.  In addition, there are a number of recommended books to be referenced for use in cases.

   The World is Flat by Thomas Friedman

Web Resources

The following websites contain information that will be used throughout the class.  

   www.professorwu.com - General course information, class wiki

   www.study.net - Contains required cases and articles  

Class Schedule

1. Introduction

2. Competitive Advantage of Nations:  Nokia and Finland

      Assignment - The Competitive Advantage of Nations  

• Read case - Finland and Nokia  
• Read Nokia's 20F

        Questions  

  1. Please outline the principal global competitive advantages of Finland in cellular phones based on the 4 major components of Porter?s diamond: Factor Conditions, Demand Conditions, Related and Supporting Industries and Firm Strategy, Structure & Rivalry.  
  2. What developments in Finland led to the economic transformation in Finland? What was different about Finland?s telecommunication sector that led to Finland?s emergence as a global telecommunication powerhouse?  
  3. What was the cluster program? How did it stimulate R&D and technology innovations?  
  4. How did Nokia leapfrog Motorola in the early 1990s to become the No. 1 mobile phone company?  
  5. What challenges did Finland face by 2001? What strategy would you recommend the nation to take on?  
  6. Is Nokia's description of their history the same or different from the HBS case study?
  7. Describe Nokia's current business.  Where do most of their handset revenues come from?  What are their fastest growing markets?  Have they grown faster or slower than Motorola?
  3. Competitive Advantage of Nations:  Singapore, Inc.

  Assignment  

  • Read case: Singapore Inc. 
  • Read article - From "Silicon Island" to "Biopolis of Asia": Innovation Policy and Shifting Competitive Strategy in Singapore   
  • Read the annual report of Singapore’s Economic Development Board

  Questions  

  1. Compare and contrast the economy of Singapore (3M people+/-) to the economy of the Bay area (6M people +/-).  
  2. How do you explain Singapore's economic performance since 1965?  How, in particular, have business-government relations contributed? 
  3. Do you approve of Singapore's new strategy for getting the economy growing?
  4. Competitive Advantage of Nations:  China Outsourcing

  Assignment  

  • Read Chapter 4 of Three Billion New Capitalists  
  • Read article - The Great Chinese Experiment  
  • Read One Billion Customers  

  Questions   

  1. Profile China’s advantages and disadvantages regarding outsourced manufacturing and also outsource services.  
  2. What measures has the government taken to encourage economic growth and especially the technology industry.  
  3. What are the key technology drivers that have enabled China?s technology awakening.  
  4. Use Porter?s Diamond to analyze China.  

        Extra Credit Project

  • Compare and contrast the economy of Shanghai (16M people+/-) to the economy of the Bay area (6M people +/-).
  5. Dell, HP, Acer, Asus, and Lenovo Value Chain

        Assignment

  • Read 10K's, press reports, analyst reports, etc. for these companies  

        Links:

  • HP 10-K
  • Dell 10-K
  • Acer Annual Report
  • EEPC
  • Lenovo Annual Report

        Questions  

  1. Create a value chain for Dell, HP, Acer, EEPC, and Lenovo.  
  2. How do the value chains differ?
  3. What are the dependencies in each value chain (suppliers, customers, etc.)?
  4. Dell recently announced a relationship with Box.net. I've been recently quoted $200K to develop a website similar to Box.net. Where does Box.net fit in the value chain? Why would Dell create a partnership vs. do it themselves?
  5. Where do you think the industry is going? What are the key linkages in the value chain? Show how you see the value chain "changing" over the next 5 years?
  6. Dell, HP, Acer, Asus, and Lenovo Value Chain (cont.)

        Assignment  

  All teams will prepare the following for the top 3-4 companies in their assigned sector:

  1. One slide answering the following questions
     • PC Market Industry Size, Growth, Competitor Concentration
     • New market industry size and growth (Cell phones, MP3 players, pdas, servers etc.)
     • Major customers for each company
     • Geographic breakdown (US, EMEA, Asia) for each company
     • Major suppliers to the industry
  2. One slide summarizing the comparable companies analysis (found on the Dell wiki)

        Sector assignments to be found below:

  Team Number - Industry: Example Companies (does not have to be used - try to find the market leaders)

  Team 1 - Semiconductor Foundries: UMC, Chartered Semiconductor, TSMC 
    
  Team 2 - Disk Drive Companies: Western Digital, Maxtor, Seagate

  Team 3 - Wireless Chip Companies: Atheros, Broadcom, Cisco/Linksys (if Linksys segment info is available - I'm assuming Linksys doesn't outsource their chips)

  Team 4 - Graphics/Display Chips: Nvidia, Intel/ATI (use either Intel segment numbers or last financial statement of ATI before acquisition), Trident, Zoran

  Team 5 - Flash Memory: Sandisk, Lexar

  Team 7 - CPUs: Intel, AMD, MOT (if segment info is available),

  Team 8 - OS: MSFT, Palm, Psion

  Team 9 - Application Software: Intuit, Symantec, Adobe

  Team 10 - Retailers: Best Buy, Walmart, Circuit City

  10K Notes

  There is a competition, supplier and customer section in any 10K.  You may not get overall market information in the 10K (sometimes it's there and sometimes it's not).  If you don't - try to get it from an analyst report - but don't worry if you can't. Relative sizes within the segment will suffice.

  You can "imply market growth" from the growth of the major companies in the segment.  New markets should be found in the segment information of the 10K - otherwise don't worry about it.

  The financial template and directions can be found at Class 5: Dell, HP, Lenovo, Acer Value Chain

  Let me know if there is anything else you need.

  7. Value Chain: Philips vs. Matsushita

        Team: Please see Team Roster Wiki Page  

        Assignment  

  • Read case - Philips versus Matsushita: A New Century, A New Round  
  • Read case - Innovating an "Outsourced R&D" Project for Matsushita Electric (MEI): Launching the Panasonic Digital Concepts Center  

        Questions  

  1. Please compare and contrast Philips vs. Matsushita based on the 4 major components of Porter’s diamond.
  2. Please develop the internal product value chain for both Philips and Matsushita. Compare and Contrast.  
  3. How did Philips become the leading consumer electronics company in the world in the post war era? What distinctive competence did they build? What distinctive incompetencies?  
  4. How did Matsushita success in displacing Philips as No. 1? What were its distinctive competencies and incompetencies?  
  5. What do you think of the change each company has made to date: the objectives, the implementation, the impact? Why is the change so hard for both of them?  

  Value Chain:  The New US Consumer Electronic Companies:  Apple, Tivo, Roku Chumby, Kindle, Microsoft – What are their positions in the Value Chain?

  Apple has dominated the MP3 marketplace with 80% market share.  Other major CE manufacturers have failed to date. With regards to corporate culture and organizational structure, what has allowed Apple to succeed?  What should Philips and Matsushita do to compete?

  8. Value Chain: Samsung Semiconductor

        Team: Please see Team Roster Wiki Page  

        Assignment  

  • Read article - Industry Transformation  
  • Read case - Samsung Electronics  

        Questions 

  1. Please apply Porter's Diamond and Porter's Five Forces to the DRAM Industry at the time of the case. What parts of the Industry are under transformation and why?
  2. What are the options for dealing with the Chinese threat?
  3. What kind of advantage are the Chinese entrants seeking?  How close are they to achieving that advantage? How much of Samsung's performance is based on it's low cost advantage? What were the sources of Samsung's cost advantage in DRAMs in 2003? What were the sources of Samsung's price premium in DRAMs in 2003?
  4. Can Samsung low cost advantage withstand the Chinese threat?  Should Samsung retreat from the low-end product lines? 
     What should Samsung do to gain a differentiation advantage?
  5. If Samsung is both low-cost and differentiated - How does it do both?  If it can do both - why can't more firms in other industries do the same?
  6. What recommendation would you make to Chairman Lee regarding Samsung's response to the threat of large-scale Chinese entry?
  9. Guest Lecture – TBD
  10. Value Chain:  Video Drivers in Consumer Electronics:  Broadcast vs. Cable vs. Telecom vs. Internet Video
  11. Guest Lecture – TBD

        Thanksgiving Break

  12. Disruptive Technology and Crossing the Chasm
  13. Competitive Advantage of Nations:  Silicon Valley Ecosystem

  Assignment:  

  • Read article: From Value Chain to Value Constellation: Designing Interactive Strategy 

  Questions   

  1. Profile Silicon Valley's advantages and disadvantages regarding the technology industry.  
  2. What measures has the government taken to encourage economic growth and especially the technology industry.  
  3. What are the key technology drivers that have enabled Silicon Valley's technology dominance? 
  4. Use Porter's Diamond to analyze Silicon Valley.
  14. Wrap up Class