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BUS 10a Section 2

FUNCTIONS OF THE CAPITALIST ENTERPRISE

COURSE SYLLABUS

Fall 2012

Class Hours: Tues, Friday 11:00 AM–12:20 PM

Location: TBD

Dr. William J. Oliver

781-728-9455

Email: willo@brandeis.com

Please put “BUS 10a” in the subject line

Office: Sachar 11b

Office Hours: Tuesday 9-11, Friday 9-11, and by appointment

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Objectives

This course is an integral part of the Business minor and major. It uses case examples and practical

concepts to build a framework for addressing key management issues. There are five primary

learning outcomes for students:

1. Understand the fundamental concepts and functions in business management

2. Recognize the interrelationships among these functions

3. Learn how to apply the language and tools of the course to a range of business issues

4. Learn how to read, analyze, and discuss business school case studies

5. Develop oral presentation skills for business

The first half of the course reviews the key functions of managers through cases and lectures on

finance, marketing, operations, organizational behavior, and strategy. The second half applies this

knowledge to three broad themes: the unique issues related to entrepreneurship, business in the

global economy, and business ethics.

This section of BUS 10a is somewhat unique among three sections being offered this term, in that it

focuses more on the issues faced by the entrepreneur, while the others focus on other aspects of

business.

Key Concepts

Upon completing this course, you will be able to assess businesses using several of the most

important tools. These will help you understand articles in the press. Many of these will serve as the

tools you use in your analysis in the final paper. They will also help you understand the company

you go to work for after graduation:

Finding reliable and meaningful information about a company on line

Financial ratio and trend analysis, and Key Performance Indicators – to assess a company’s

health

Growth-share matrix for understanding market potential

Porter’s five forces for assessing strategic position

SWOT analysis for summarizing a company's condition and potential

Business model as a method of describing a business

Product life cycle as a tool to assess a company’s products

Disruptive innovation that will undermine current company's strategic position

Theory X and Y, resonant leadership, teams (e.g. Kyocera's amoebas), and organization structure

as aspects of company culture

Net promoter score to explain the power of customer relationship management

Five ethical frameworks for sizing up ethical challenges

Quality management – reducing errors and process delays to improve operational performance

“Big data," communications and ERP: IT tools of business strategy

Personal brand – using the concepts of business to build your own “Me, Inc.” This will help you

plan your own future—it will also facilitate assessing career opportunities

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Prerequisites: ECON 2a; BUS 6a (or BUS 4a), which may be taken concurrently with BUS 10a

Materials

Text: Ronald J. Ebert and Ricky W. Griffin, Business Essentials, 6th Edition (please note, this is an

old edition), 2007, Prentice Hall, Upper Saddle River, NJ. This can be purchased on-line at a

substantial discount.

Additional readings: In addition, the course requires cases (see schedule, below.) Purchase these

from HBS Publishing, at the link below. If you have question about purchasing, call 800-810-8858

or 617-783-7700.

Link: http://cb.hbsp.harvard.edu/cb/access/14233733

Grading

Students will be graded on a combination of the following (50% individual/50% team):

Contributions to class discussions (25%) – based on the quality and frequency of in-class

comments. BUS 10a is like business—a team sport. You need to help your team by asking

questions and building on each others’ comments. Midway through the course, I will ask you to

assess your own performance, and will provide my feedback on class participation—making

suggestions for improvement.

Do Don’t

Feel Free to express your opinion Just repeat case facts or other’s

comments

Be persuasive Use poor/wrong interpretation of data

Talk briefly and clearly Make rude, vulgar, irrelevant and

personal comments

Address the entire class and not only the

instructor

Keep quiet lest you might make a fool

of yourself

Listen to what others have to say Be obstinate

Take a stand; defend your analysis

Build on the prior speaker’s point

Digress

Have a sense of humor Talk for the sake of talking

Midterm exam (25%) This is a written, open-book exam that will be conducted during the normal

class period. You will be asked essay questions about the materials covered and issues discussed in

class. It will; require you to do some calculations as well as assess some companies from the

perspective of the approaches you have learned in the course thus far

Five written assignments:

PowerPoint presentation on “Cafeteria Day” (5%) Group assignment in teams of 5 or 6

students concerning one of the university‘s cafeterias or food stores. See details below.

Business attire is required.

PowerPoint presentation on globalization (15%) Group assignment in teams of 4 or 5

students. Each presentation (on a theme of your choice) should last 8-10 minutes, plus time

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for Q+A. Please submit the topic as indicated on the schedule: who is on your team and what

your proposed topic will be; only one submission per team, though! I will let you know the

following day if that topic has already been selected by another team. Business attire is

required.

Essay on the ethical issues surrounding the sub-prime mortgage debacle (5%) Individual

assignment. Write two pages double spaced, due at the start of class on Monday, April 23.

This is an individual assignment.

Tracking a company (5%) Individual assignment. Select one company which is listed on

NYSE or NASDAQ. Each week, on Tuesday before class, submit a short paragraph

describing an important event from the week that will affect (or reflect) your company’s

health or strategy. Include a link to your on-line source, in addition to your short assessment.

Each week, add the most current paragraph to the top of the prior weeks’ document—so at

the end of the course, you have a 13-week, running assessment of the company

Final paper analyzing a business problem facing a real company (20%) Group

assignment in teams of 3-4 students. The final paper must be done in teams of 3 students. The final paper is an opportunity for teams of 3 students to examine in depth a topic of your

choice. The paper must be 10 - 15 double-spaced pages (plus footnotes and references) and

cover:

Describe the facts around a problem a real company is facing today,

Use specific learnings and/or paradigms from the course (i.e. the list above) to evaluate

the situation, and

Offer a clear set of recommendations that are carefully analyzed.

NOTE: Teams will reconfigure for each assignment. Grades on written assignments are assigned to

all members of the team, though I reserve the right to alter individual grades when it is clear that an

individual contributed significantly more or less to the assignment.

Submitting Assignments

Papers must be submitted as an MSWord document. Presentations must be submitted as a

PowerPoint. Files must be readable on the Wintel platform; if you prepare documents on a Mac, you

are responsible for submitting them in compliant format (if I cannot read your file, you cannot expect

a good grade). Assignments are to be submitted to LATTE. Papers that are submitted late will be

graded down one full grade (e.g. from A to B) for each day or portion thereof.

Computers in the Classroom

Computers are not generally conducive to interactive classroom discussions. There are a few times

you will be asked to bring your computer—otherwise, leave them in your bag. Print out case studies

and any notes you need. Take notes on paper—transferring them to your computer helps the learning

process.

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Seating

Please select a seat on the first day of class, and use that seat for each class session. This helps the

professor get to know you (i.e. it helps establish your class participation grade)

Academic Honesty

You are expected to be honest in all of your academic work. Instances of alleged dishonesty will be

forwarded to the Office of Campus Life for possible referral to the Student Judicial System.

Potential sanctions include failure in the course and suspension from the University. For the

University policy, please see section 5 of the Rights and Responsibilities Handbook.

Special Accommodation

If you are a student with a documented disability on record at Brandeis University and wish to have a

reasonable accommodation made for you in this class, please see me immediately.

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Date Topic

Ebert

Reading Assignment Due Case Other Reading

1 8/31 Introduction: what is

capitalism? Where has

it been? Where is it

going?

1 Syllabus

2 9/28 Understanding

business health

11 Kellogg‘s 2010 annual report

(LATTE)

A Guide to Case Analysis

(LATTE)

3 9/4 Marketing goods and

services

12 Cafeteria Day team

members and subject

venue on LATTE by

8AM day before class

Reebok International Ltd

4 9/7 Producing goods and

services

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5 9/11 Improving Operations 15 Benihana of Tokyo

6 9/14 Leadership 9 Taran Swan at Nickelodeon Latin

Am.(A)

7 9/18 Student presentations:

“Cafeteria Day”

Presentations on Latte by

8AM day before class

8 9/25 No Class

9 9/21 HR and Labor

Relations

10 Howard Schultz and Starbucks

Coffee

10 10/2 Organization 8 Kyocera Corporation”

11 10/9 Financial analysis 14 Coca-Cola 2010 annual report

(LATTE)

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Date Topic

Ebert

Reading Assignment Due Case Other Reading

12 10/5 Financing the

enterprise

16 “Cafeteria Day”

presentations due on

LATTE by 8AM day

before class

Cartwright Lumber Company

13 10/16 No Class

14 10/12 Corporate Strategy 5 Crown Cork and Seal in 1989 Porter: Five Competitive Forces

that Shape Strategy

15 10/23 Midterm Preparation

16 10/19 Midterm (in normal

class time)

17 10/30 Accounting and IT

Systems

13, 14 Cisco Systems Architecture: ERP

and Web-enabled IT

18 10/26 Midterm Results e

19 11/6 Entrepreneurship Facebook Bhide, The Questions Every

Entrepreneur Must Answer

20 11/2 Entrepreneurship 3 Globalization paper team

members and proposed

topic due on LATTE by

8AM day before class

Zipcar: Refining the Business

Model

21 11/13 Innovation Kodak and the Digital Revolution

(A)

Christensen: Will Disruptive

Innovations Save Healthcare?

22 11/9 Innovation Globalization

presentations due on

LATTE by 8AM day

before class

Teva Pharmaceutical Industries,

Ltd

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Date Topic

Ebert

Reading Assignment Due Case Other Reading

23 11/20 Social

Entrepreneurship

Patrimonio Hoy Pralahad, Fortune at the Bottom

of the Pyramid (LATTE)

24 11/16 Globalization One-page outline of the

final paper due on

LATTE by 8AM day

before class

Li & Fung Barker, Invisible Government (on

LATTE)

25 11/27 Student globalization

presentations

26 11/23 Student globalization

presentations

27 12/4 Business Ethics 2 Parable of the Sadhu

28 11/30 Business Ethics Business Ethics – sub-prime

mortgage

Readings on LATTE

29 12/11 Course review Final paper due on

LATTE by 8AM day

before class

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Assignments + Study Questions

Class 1: Capitalism

Discussion about the history and foundations of Western Capitalism, and the enterprises that

make it work. We will talk about your experience with economic cultures outside the West, such

as those in Latin and South America, India, China or the former Soviet republics. Ideally, we

will have students who can also reflect on their experiences with the emerging economies in

Africa

We will reflect together on how has capitalism developed over the past 150 years, and where is it

likely going over the next 100 years

Class 2: Kellogg’s 2010 Annual Report.

We will explore Kellogg’s as a company by reviewing 3 sections of the annual report. Please read

the text portions of the report and flip through the numbers pages. Focus particularly on the section

assigned below, based on the first letter of your last name.

A-J Section entitled “2010 Recap” (pages 3-5). List 5 key messages about how things are

going at Kellogg’s

K-R Section entitled “Engaging Customers” (page 6). List 5 things Kellogg’s is doing to

make the company better.

S-Z Section entitled “We strive to deliver sustainable performance while doing the right thing

for the environment and society” (last two pages). Explain 3 purposes of including this

in the report

Class 3: Reebok International Ltd

This will be the first of many case studies in BUS 10A. Plan to spend 2 hours (more if needed)

preparing the case—following the process discussed in the previous class session. I recommend

against preparing in groups at this point

Reebok executives are reviewing the company‘s advertising and promotion programs for the second

half of 1988. These include sponsorship of the 1988 Summer Olympics and a rock concert tour

organized by Amnesty International. In addition, Reebok is launching a new advertising campaign

with the slogan, ― Reeboks “Let U.B.U.”

Study Questions

Please read the case and come prepared to discuss the following:

Why has Reebok been successful? What are the company’s strengths and weaknesses?

How do consumers buy athletic footwear? How is the market segmented?

How would you evaluate Reebok’s proposed 1988 communications program?

Does Reebok need an umbrella brand campaign (versus product specific advertising alone)? Is

the UBU campaign appropriate?

What do you think of the other proposed communications programs?

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Class 4: Benihana of Tokyo

If you feel prepared to join a study group to prepare for this case, do so. This should be in addition to

1.5-2 hours preparing individually. A group is likely to improve your ability to “shine” in class—by

broadening your insight into the issues presented in the case

Set in the 1970s, this case describes the development of a particular limited-menu restaurant and the

expansion of this model into a chain. This demonstrates how a well-designed operating system can

fit into the competitive strategy.

Please read the case and come prepared to discuss the following:

What are the differences between the Benihana production process and that of a typical

restaurant?

Examine the production system in detail. What are the major design choices which generate

operating efficiencies?

Class 5: Producing Goods and Services

In-class exercise

Class 6: Taran Swan at Nickelodeon Latin Am.(A)

Prepare to discuss:

Describe the culture at Nickelodian, Latin America. Be specific.

How did Swan go about building that culture? Consider the interrelationships among

Nickelodian LA’s context, design factors, culture and outcomes.

Describe Swan’s leadership style. What impact has it had on the culture?

What are the challenges that Swan faces at the end of the case? What actions should she

take? Should she assign an interim director?

Class 7: Cafeteria Day

Prepare and deliver in teams of 4 - 5 students a PowerPoint presentation recommending

improvements to one of the university's cafeterias or food stores.

Based on your own experience, apply the concepts in the reading to your cafeteria or store:

1) How does the cafeteria or store define "quality"?

2) Draw a flow diagram depicting how customers move through the cafeteria or store to select,

purchase, and consume products.

3) How might the cafeteria or store be reorganized to provide greater value to its customers?

Each group must submit an e-mail by 7 pm on 1/27

The names of team members (only one e-mail per team, or you get a deduction!)

Your choice of cafeteria or store (I cannot guaranty your choice if another team has already

selected it)

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You submit your PPT slides as indicated below. (NOTE: If your PPT was done on an Apple

computer, submit it as PDF.)

Each team will have 5 minutes to deliver the presentation. I recommend that you assign speaking

roles and that you practice your presentation. Be sure to wear business attire (required)

Class 8 – No Class

Class 9: Howard Schultz and Starbucks Coffee

Prepare to discuss:

In the early 1980s, how did Howard Schultz view the possibilities for the fledgling specialty

coffee market? What were the most important factors in shaping his perspective?

In 1987, Schultz bought Starbucks from its original founders. At that time, the Seattle-based

coffee bean retailer had six stores and a roasting plant. By the end of the 2oth century, Starbucks

had 3,300 locations in 17 countries, and was the leading specialty coffee purveyor in the world.

What were the critical drivers of Starbuck’s success?

It’s 2012; looking back, what would you ascribe to Starbucks and Howard Schultz role in the

successful development of the specialty coffee industry?

Class 10: Kyocera Corporation

Class 11: In Class Financial Ratio Analysis

Bring your computer, and download the Kellogg’s Financial Tend and Ratio Excel template

from LATTE.

Class 12: Cartwright Lumber Company

Coca Cola: Come to class with the financial trend and ratio table we used for Kellogg’s, completed

individually for Coca Cola. Do not submit unless requested:

Cartwright: A group will greatly assist you in preparing this case. But remember, you should spend

1.5-2 hours individually first—then the group will be really useful.

Cartright Lumber has been expanding for years. Growth has outstripped the company’s ability to

meet working capital needs with internally-generated cash. Mr. Cartwright has approached the bank

for a loan. Consider his options and his request from the point of view of his banker.

Why does Mr. Cartwright has to borrow so much money to support this profitable business?

Do you agree with his estimate of the company’s loan requirements? How much will he need to

borrow to finance his expanded expansion in sales (assume a 2004 sales volume of $3.6MM)

As Mr. Cartwright’s financial advisor, would you urge him to go ahead with, or to reconsider his

anticipated expansion and his plans for additional debt financing? As the banker, would you

approve Mr. Cartwright’s loan request. If so, what conditions would you place on the loan?

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Class 13 – No Class

Class 14: Crown Cork and Seal in 1989

What are the key strategic issues that Avery needs to consider? What strategic options are open

to him?

If we are going to analyze the industry that Crown competes in, what is the appropriate industry

to analyze?

How attractive has the metal container been of the years?

How well did Crown Cork do under John Connelly? What were the keys to their success?

What significant changes are taking place in the industry? How should the new CEO, Bill Avery

respond? Is it finally time to change the Connelly strategy that has been successful for over 30

years? Why/why not?

Class 15:Midterm Review – bring your questions

Class 16: Midterm – in the regular classroom at the regular time

Class 17: Cisco Systems Architecture: ERP and Web-enabled IT

Prepare to discuss:

Cisco is frequently cited as an Information Age company in contrast to an Industrial Age

company. In your opinion, what are the key factors that differentiate Cisco as an Information

Age company?

To what extent does information technology (IT) contribute to the Cisco strategy?

How would you characterize the role of Pete Solvik and CIO?

Class 18 – Midterm Review

Class 19: Facebook

Prepare to discuss:

Why do people visit Facebook? What is the “customer value proposition?”

What do advertisers expect from being on Facebook? In what ways might a company benefit

from being associated with a Facebook visit? Selling? Marketing? Brand?

What is the issue with Facebook selling information about visitors? What other companies do

that?

What sort of organization might want to implement a “Facebook for Websites?” Why?

How could social advertising create more revenue for Facebook?

What is the prospect for the privacy issue? Where will the customer draw the line?

Class 20: Zipcar: Refining the Business Model

Prepare to discuss:

Evaluate the potential venture and the progress that Chase has made

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What is the business model, and how has it changed between December 1999 and May 2000?

What do the data from actual operations in September say about how the business model is

playing out in practice? Does this give you comfort or concern?

What actions should Chase take as a result of the September operating results?

What is the strongest argument Chase could make to a potential investor about the attractiveness

of the venture? What specifically should her elevator pitch be at the Springboard forum?

As you think about the "business model”, consider how you would build a spreadsheet model of

Zip Car. For example:

In order to calculate total revenue, you need to know # of members and revenue per member

To know the number of members, you need to know how many last month, how many were

added, and how many left (attrition)

In order to know revenue per member, you need to know: number of rentals, hours per rental,

rental rate per hour, price per mile, miles driven

...and so forth. How would you build up costs?

Come prepared to support a discussion of how the factors fit together to develop an Excel model of

the companies’ finances -- in a way that you can show a venture capitalist (a) how the company will

work and (b) that your assumptions were correct once operations have begun.

Class 21: Kodak

Prepare to discuss:

Evaluate Kodak’s strategy in traditional photography. Why has the company been so successful

throughout the history of the industry?

Compare traditional photography to digital imaging. What are the main structural differences (in

the business)? How have value creation and value appropriation changed in digital photography

relative to traditional photography?

Evaluate Kodak’s response to Sony’s introduction of the Mavica in 1981. Was it appropriate?

How would you assess Fisher’s attempt to transform Kodak? Why did it fail?

What is Kodakcurrent position in digital imaging? Would Kodak’s position be different had the

company adopted a different digital imaging strategy in the 1980s and 90s? Evaluate Kodaks

strategy from the mid-1980s onward.

Class 22: Teva Pharmaceutical Industries, Ltd

How did Teva succeed in Israel? Why did such a company emerge in Israel? How did TEva set

itself apart from its competitors in Israel?

As the CEO of Teva, which markets would you concentrate on developing going forward?

As an executive of “big pharma,” what approach would you take to deal with Teva?

Where is Teva vulnerable going forward?

Class 23: Patrimonio Hoy

What business is CEMEX in? In what ways is PH consistent with the base business?

What has CEMEX learned through PH about “Business at the Bottom of the Pyramid?”

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Does CEMEX make a profit on PH operations? Should it?

Does CEMEX make a profit on PH operations? Should it? How could PH profit more?

What benefits does PH bring to CEMEX besides profit margin?

What is the range of options CEMEX ahs with PH going forward?

In general, what should be a multi-national company’s considerations as it thinks about BABP?

Class 24: Li & Fung

Classes 25 & 26: Student globalization presentations

See instructions above.

Class 27: Ethics—Parable of the Sadhu

Make sure you study the ethical frameworks described on the web site cited on LATTE

Also, bring your computer, for an in-class exercise

Class 28: Sub-prime mortgage debacle, with a focus on the ethical issues that surrounded this

crisis

Study Guide

Losses from the subprime mortgage debacle will exceed half a trillion dollars. What caused this

stunning collapse? Is everyone to blame? Or, can we single out certain groups for special

criticism? If so, here are the typical culprits, based on a review of print, TV/radio, and internet

sources:

1. Mortgage Brokers

2. Homebuyers

3. Investment Banks

4. Rating Agencies

An alternative (and overlapping) explanation is that there was a complete breakdown in business

and personal ethics. Only by starting with this proposition, the argument goes, can we begin to

understand how greed clouded the judgment of all participants, leading some down the path to

misrepresentation and outright fraud. Others put the lion’s share of the blame on the Federal

Government for turning a blind eye to imprudent lending practices or for even encouraging it.

Compiled for your review on LATTE is a sample of what can easily be found on the web. These

articles touch on the themes in this study guide, and give you a starting point for the class.

WRITTEN ASSIGNMENT (hand in your essay at the start of class; also post to Latte)

NOTE: As an individual assignment, you may not discuss your work with anyone else.

In a one-page essay (single-spaced, Times New Roman, font size 11, 1” margins), argue either

for or against the following prompt:

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“The subprime mortgage meltdown reflected a complete breakdown in business

and personal ethics; as such, no single culprit should be blamed more than

others.”

Although it is not required, I encourage you to do additional research.

This assignment is worth 5% of the final grade. There is no “right” answer; instead, I am

looking for well-reasoned and well-written essays.

Class 29: Reviewing how much you better understand the Foundations of the

Capitalist Enterprise

Pulling it all together—what do you know about Functions of the Capitalist Enterprise

Building your personal brand (based on Tom Peters)

Complete course evaluations in class