MGMT90146 Week1:

Introduction
Tom Osegowitsch
MGMT90146 Strategic Management
 Enrolment Requirements
(Source: Handbook 2019)

Prerequisites

Available to all students in the Master of Management who have

successfully completed 100 points of study in either the 150 point or 200
point program, plus completion of the core subjects MGMT90025 People
and Change and MKTG90004 Marketing Management at time of subject
commencement.

Available to all students in the Master of International Business who

have successfully completed 50 points of study at time of subject
commencement.

Available to all students in the Master of Finance who have successfully

completed 100 points of study at time of subject commencement.

Available to all students in the Master of Engineering Management who

have successfully completed 50 points of study at time of subject
commencement.
 Today’s Agenda

Introduction
To Strategic Management
To this subject
• Structure
• Administration
• Assessment
To our big learning exercise (Capstone)
 Hi there

Tom Osegowitsch
Taught subject for 10+ years
International Business and Strategy researcher

Email: ot@unimelb.edu.au 
Room: 10.048 (L10, “The Spot”, 198 Berkeley Street) 
Phone: 8344 3722 
Consultation: After class or by appointment 
What comes to mind when you
hear “strategy”?
 What is a Strategy?

“Strategy articulates the firm’s preferred environment and the

type of organization it is striving to become” (Itami 1987)

“…define(s) what business the company is in or should be in

and the kind of company it is or should be” (Andrews 1971)
What would happen without a
strategy?
 The key questions

What makes some firms more successful than others?

Alternatively: How do firms achieve competitive advantage?

or

What would make our firm more successful?

 Getting strategy wrong (or not having
one at all)

1. Fluff - a superficial statement of

the obvious combined with a
general sprinkling of buzzwords.

“Our fundamental strategy is one of

customer-centric intermediation.”
 Getting strategy wrong (or not having
one at all)

BAD STRATEGY=
1. Fluff
2. Failing to face core problem
3. Mistaking goals for strategy
4. …
 Strategic Management Process

Strategic Analysis

Strategy Choices Strategy

(“Formulation”) Implementation
 Strategy choices

What are the strategic options?

 Business strategies
Strategies
(Week 2-7) – How to
compete in a given industry

 Corporate Strategies
(Weeks 8-10) – Where to
compete (e.g. industry and activity
The Firm choices) and How to manage
collection of businesses
 Business strategy choices

Business strategies
Choices (Week 2-3)
generic strategy, strategic
positioning, as guided by mission,
vision, values…

… and as informed by our diagnosis of

(i) the firm’s environment (external)
The Firm
and (ii) the firm’s capabilities (internal).
 Diagnostic tools to inform strategy
choices

Weeks 4 & 5 - External Analysis

Strategies

Buyers
Suppliers

The
Firm

Substitutes The Industry  Rivals and new

Environment entrants
 Diagnostic tools to inform strategy
choices

Weeks 6 & 7 - Internal Analysis

What makes this firm

different?

The Firm
 Corporate strategy choices

Strategies  Corporate Strategies

(Weeks 8-10) – Where
to compete (e.g. industry
and activity choices) and
How to manage collection
of businesses

The Firm
 How will we do all this?

1. Conceptual (theories, frameworks)

2. Examples (cases)

3. Application (cases plus Capstone simulation)

 Conceptual

Pre-class reading and in-class discussion

as well as lecture
Briefing Note
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 Examples

Case studies
Read before class
In class:
- Small group discussions

- Whole class discussions

Applying, illustrating conceptual

content (i.e. the theories,
frameworks)
 A typical MGMT90146 class

Admin Issues + Lecture (75 – 90mins)

Break (15mins)
Case (and other) discussion, Video etc. (30mins)
Capstone debrief and group work (45mins)

NB: the first few classes are very full: covering lots of
conceptual ground; putting out lots of Capstone info
What do I need to do?

Work through Briefing Note, article(s)

and case study before class. Take
notes, address the questions, come
prepared.

Be brave. Be confident. Be inquisitive.

Be respectful of others. Be in class!!!

Materials are available from LMS…

 But that’s not all…

To experience strategy formulation and implementation

hands on…

…compete in an ongoing simulation.

 Capstone as 50% of your assessment

Individual 
Assessment Item Due Weighting
or Group

Capstone Simulation  Group Weeks 5‐10 5%

Capstone Strategy Statement  Group Week 5 5%
Capstone Board Report  Group Week 10 30%
Capstone Board Presentation Group Week 11 or 12 5%
Capstone Board of Directors  Individual Week 11 or 12 5%
Evaluation 
End‐of‐semester Exam Individual Examination  50%
Period
 Given there is such a large group component…

…free-riding behaviour is taken seriously.

 Work on any group problems (Week3: team workshop)

 Come to me with problems

 Final sanction: Adjustment of free-rider’s group scores.

35
 “Tell me about yourself”

Please complete the student profile sheets.

Welcome to
 Capstone Objectives

• To gain an awareness of competitive dynamics.

• To understand the interactions among various parts of a
business.
• To take away practical know-how to improve the
effectiveness of your business.
• To demonstrate the effectiveness of multidisciplinary
teams
 Why simulate?

Learning by doing:
“Tell me and I'll forget. Show me and I might remember. But
involve me and I will understand.”
Learning by interacting and discussing within the team
Compressing time
• 1 round = 1 year
• We simulate 6 years
Risk-free
 Capstone is an online simulation

http//:www.capsim.com
 Capstone – Registration

All students are required to register for the simulation.

Register for the correct simulation “industry”:

C110434 (Wednesday Afternoon stream)
C110438 (Wednesday Evening stream)

Registration fee is US$53.99 (credit card required).

Welcome to the
Sensor Industry
The Product

Your firm designs, manufactures and

sells sensors…
The Marketplace

Sensors – a crucial piece of

technology utilised by a wide
variety of industries.

Customers need sensors for

their various products

Diverse use of sensors 

different customer demands
developing in the segments
 The Marketplace

Low
Tech
Customer demands shifting
over time
Performance

Traditional

High
Size Tech
Over the 6 years (rounds),
customers will demand faster
and smaller sensors

Market segments continue to

diverge
Low Tech & Traditional Customers

“I want these sensors to be cheap”

“The technology doesn’t have to 
be cutting edge.”
High Tech, Size & Performance Customers

“These sensors have to be the latest and 
greatest: super‐small and super‐fast” 

“I’m prepared to pay more for what I 
want”
COMPANY
OVERVIEW
ACCC ANNOUNCES BREAKUP OF MONOPOLY
FOR IMMEDIATE RELEASE

Rod Sims, Chairman of the ACCC, took dramatic action today by

breaking up the monolithic corporation Sensors, Inc.

In a statement to the press Chairman Sims outlined the reason

and the outcome of this move.

“We cannot allow monopolies of this sort to impact an entire

industry!” stated Samuel . “The customers that utilize these
sensors are being held hostage.

“Effective immediately, Sensors Inc. will be dissolved into the

Andrews, Baldwin, Chester, Digby, Erie and Ferris companies.”
 The New Industry Structure

Andrews Digby
6 Identical Companies
Baldwin Erie
Each with $100m in sales

Chester and 5 product lines Ferris

A closed marketplace
(i.e. no new entrants, no exports/imports)
 Well, two industries…

1 class = 2 industries.

You are only competing against the other

companies in your industry.
Senior Executives needed in new Sensor Industry
FOR IMMEDIATE RELEASE

The Andrews, Baldwin, Chester, Digby, Erie and Ferris sensor

companies are all looking to fill vacancies in their respective
management teams.

Capable, self-starters with a deep love of all things sensor are

sought for roles in Finance, Marketing, Research &
Development, Human Resources and Production
Management.

“The industry needs folks with functional expertise and

strategic nous” said long-time sensor expert Tom
Osegowitsch. “My view is they must recruit from the
University of Melbourne”.
Welcome to Your
New Company
Functional Areas

R&D Production HR

Marketing Finance
 Research & Development

Key Tasks:
 Establish the specifications of our
products to meet customer demand
 Build appropriate quality and reliability
(MTBF) into products
 Ensure perceived age of products meet
customer demands
 Create new products to meet the
changing marketplace
Production

Key Tasks:
 Purchase machinery to automate our
facilities
 Buy or sell capacity of product lines
 Schedule production for each line
 Manage the company’s fixed assets
 Establish our workforce complement
 Marketing

Key Tasks:
 Set the price of our products
 Build customer awareness through
promotion
 Establish a sales force and
distribution channels
 Generate sales forecasts for our
products
Human Resources

Key Tasks:
 Determine workforce
complement (1st and 2nd shifts)
 Manage separation costs and
overtime
 Set recruitment spending
 Decide on Training
 Conduct labor negotiations
 For wage rates, profit
sharing, wage escalator,
benefits
 Finance

Key Tasks:
 Acquire capital to fund expansion
 Issue Stock
 Short Term Debt
 Issue Long Term Bonds
 Determine dividend payouts
 Balance the debt portfolio
 Work with proformas
RUNNING YOUR
COMPANY
 Strategy in Capstone

As a team you make weekly decisions about your

products and functional areas
…so will your competitors
The market will decide who’s doing the best job
i.e. customer preferences determine what products are
sold and how profitably
You need to constantly adapt and evolve in
response to competitors.
LC 11.25 CAPSIM website modules
 Things to do on an “annual” basis

Establish/Adapt your company’s business strategy

Make tactical decisions across each functional area (aligned with your
chosen strategy)

Upload your decisions by due date

Await results (Tom/system processes)

Rejoice (or not) in your superior business acumen

Analyse your results (Courier Reports and other Reports) by

comparing them with your strategic objectives.
 Capstone Support

Student Guide and (online) Manager

Guide
Demos & Tutorials, Quizzes, Coaching
Function, FAQs, Definitions pages, …

Online Help: Email or Phone (Skype)

During US business hours
 Company / Simulation performance

Select a minimum of four criteria to be assessed on:

1. Cumulative profit [compulsory]
2. Market share (in $)
3. ROA
4. ROS
5. ROE
6. Asset turnover
7. Stock price
8. Market capitalisation
Attach weights to the selected criteria.

 You only get assessed on your nominated criteria.

 You only get assessed against other teams in your industry.

Good Luck
and Enjoy!
 Some observations re: Capstone

Start your Capstone preparation early!

When exploring Capstone (guides, demos…), don’t get

bamboozled. Persevere!
Some observations re: Capstone

Each industry will have its own

dynamic, depending on how
competition plays out.
 Uploading Capstone Decisions

Capstone decisions must be uploaded by the

evening before class.

From Week 4 (Practice Round) onward, upload team

decisions by 10pm on the day prior to your class.
 Is Capstone (this subject) for you?

Capstone does generate a significant work-load

(especially upfront)
Need to work with others and be motivated
Capstone does involve numbers
As does business life more generally
 For next week

Read the Capstone Student Guide (LMS > Capstone

Simulation)

Register with Capstone (assuming you are sure you want to

stay in this class)
Get your hands dirty as soon as possible (tutorials,
demos…)

Prepare:
Briefing Notes, Readings, Case

Attend the correct stream (team formation!)