Stock picking

For next class please pick a combination of Client Company stocks based on 4-25 closing prices equalling Y10,000,000.  If you spread your portfolio equally you would get the following.  Please send company names with associated number of stocks to sbgivens@gmailcom by Tuesday of nexxt weeke.

	Price 4/25		No shares
Taisho	7500	2,500,000	333
Sony	1836	2,500,000	1362
SB	7734	2,500,000	323
JP	7433	2,500,000	336

リポビタンD

リポビタンD

Student paper on Red Bull vs Lipovitan D

Japan's Global Imperative

Japan's Global Imperative

How Companies Die

Demise of Kodak and Polaroid

Demise of Kodak

The Experience Curve and the Growth-Share Matrix

The Experience Curve and the Growth-Share Matrix

Data Required to Perform Strategic Analysis

Data required to perform strategic analysis

1.  Competitor analysis

              -- Revenues, market shares, profitability of primary direct competitors

              --Geographical segment analysis—domestic, regional, global business?

              -- Product/market analysis

              -- Intensity/directness of competition

              -- Competitive strengths/weaknesses relative to competitors

              -- Definition of company “business”, internal synergies

2.  Industry analysis

              -- Growth prospects, degree of maturity, product saturation

              -- Technological innovation

              -- Overall industry characteristics

3.  Supplier analysis

--Who are key suppliers?  Is supplier market competitive or not?  How profitable are suppliers?

              --How much of value added comes from suppliers?

              --Are supplies standardized/fungible or differentiated?

              --How dependent is the company on a given supplier?

4.  Buyer analysis

              --Consumer or business, i.e. where in the chain of production?

              -- Distribution channels

              -- Price competition vs product differentiation

5.  Other data

              --Financial condition, debt

              --Shareholder structure

Nikkei Past Year Performance

Nikkei Past Year Performance

Big Japan Investors Tell Firms to Shape Up

HBS Coursepack Link

HBS Coursepack Link

Sony Financial Statements

Softbank Financial Statements

Taisho Pharmaceutical Financial Statements

Ｔａｉｓｈｏ　Ｐｒｏｄｕｃｔｓ

JR Financial Statements

Client Company Financials

JR East Japan Railroad

Taisho Pharmaceuticals

Softbank

Sony

Client Company IR Sites

JR East Japan Railway Company

Taisho Pharmaceutical Holdings

Softbank

Sony

Class segments

Each class will be divided into four segments:

              1.  Review of reading assignment and key concepts.  The instructor will review the reading assignment and require students to answer questions about the reading.

              2.  Student presentations.  Students will deliver presentations on assigned topics.  Students may be asked to deliver recorded versions of their presentations in advance of the class.  The instructor and student evaluators will give feedback and evaluations on the presentations.

              3.  Weekly topics; Games and exercises; Outside speakers.  We will look at recent developments in the world of business and finance that have relevance to corporate strategy and the Client Companies.  Students will be asked to give presentations on current developments.  We will also conduct games and exercises in English that realistically simulate situations that might occur in a multinational company.  Guest speakers will visit from time to time.

              4.  Review of material.  There will be an opportunity to review and confirm reading material and key concepts in Japanese at the conclusion of each class.

Syllabus

Why is this man smiling?

GPP CORPORATE STRATEGY WORKSHOP

Stephen Givens

              “Japanese companies rarely have strategies.”  This provocative statement appears in Michael Porter’s influential article “What Is Strategy?”  One of the primary objectives of this workshop is to introduce students to the “toolbox” of concepts taught in American business schools on the subject of “corporate strategy” and to apply those concepts to four Japanese companies in different industries: JR East Japan Railway, Taisho Pharmaceuticals, Softbank and Sony. 

              What are the competitive dynamics of those industries and do the Japanese companies have a coherent strategy or strategies to succeed in the markets in which they compete?  Students will be assigned to teams dedicated to one of the four Client Companies.  Each team will act as the corporate strategy advisor to its Client Company and prepare a series of presentations culminating in a final comprehensive presentation analyzing the client’s competitive challenges and recommending strategic actions and policies the client should take.  By the end of the semester students will know their Client Companies in depth.

              There will be a reading assignment each week introducing students to basic business analytic tools and corporate performance metrics.  Those tools will in turn be used to analyze the industry and competitive dynamics faced by the Client Companies.  This will be an opportunity for students to learn about the economics of different industries: pharmaceuticals, railways, mobile communications, consumer electronics, and the complexities created in relation to market and product segmentation as the result of the Internet and information technology.

              This will also be an opportunity for students to develop analytic and communications skills in English.  Each student/team during the course of the semester will prepare a short paper in English; prepare a presentation giving an overview of its Client Company against the background of its relevant competitive environment; participate in a debate about specific actions the Client Company should take to improve performance; and prepare and present a final presentation to the senior management of the Client Company analyzing challenges and making recommendations.

		Themes	Reading/assignment
Week 1	Introduction
Week 2	Corporate Strategy: Basic Analytic Framework 1:	Capital Efficiency and Measures of Profitability How Do Investors Evaluate Potential Investments? Profitability Ratios: Gross margin, operating profit, net margin, return on assets, return on equity, return on net assets Other basic concepts: -- Income statement/Balance sheet --Net asset value/shareholders equity --Market capitalization --Debt/equity --EBITDA --Price/earnings ratio	Reading: “Profitability Ratios” Team Assignment: Chart revenues, operating profit, market capitalization, P/E ratio and ROE your Client Company for the past five years: JR East Japan Railway (9020) Taisho Pharmaceuticals (4581) Softbank (9984) Sony (6758)
Week 3	Corporate Strategy: Basic Analytic Framework 2	The Five Forces that Drive Profitability	Reading: Michael Porter: “The Five Competitive Forces That Shape Strategy” Team Assignment: For your Client Company: --Define the relevant product market(s) and the Client Company’s market share --What “business” is the Client Company engaged in? --Evaluate the relevant geographic scope of competition --Identify the relevant actual/ potential competitors of the Client Company --Identify the Client Company’s main competitive advantages and weaknesses
Week 4 4/30	Corporate Strategy: Basic Analytic Framework 3	Competitive Advantage and Corporate Strategy	Reading:  Michael Porter: “What Is Strategy?” Optional reading:  Ronald Coase, The Nature of the Firm  Team Assignment: Present progress report on data collection for your team’s Client Company.  Describe competitive dynamics within the relevant industy(ies) and preliminary hypothesis about the client company’s competitive position within the relevant industry(ies), applying the concepts developed by Michael Porter.
Week 5 5/13	JR East Japan 1	The Economics of Railways and Other Network Businesses	Reading: HBS, ”Platform-Mediated Networks” JR East Railway Fact Sheet Assignment for JR Team: Overview Presentation: “Overview of JR East Japan” Assignment for other teams: Is the Tokaido Shinkansen a “platform-mediated network”? Write a brief paper (500 words) explaining whether the Tokaido Shinkansen is a “platform mediated network” and how that affects the economics of the business.
Week 6 5/20	Taisho Pharmaceuticals 1	Dynamics of the Global and Domestic Pharmaceutical Markets	Reading:  “The Challenge for Japan’s Pharmaceutical Top 20” Pharma 50 Taisho Pharmaceutical Annual Report Assignment for Taisho Team: Overview Presentation: Domestic and International Market Analysis of Taisho’s Products Assignment for other teams:  Work on upcoming presentations
Week 7 5/27	Softbank 1	Understanding the Mobile Communications Industry	Reading:  Mobile Industry Segment Analysis Assignment for Softbank Teams: Overview Presentation:  What is Softbank’s Business? Other Teams:  Prepare diagram showing major segments of mobile communications business and key players in each segment
Week 8 6/3	Sony 1	What Happened to Sony?	Reading: “Amazon, Apple, Facebook and Google” Assignment for Sony Teams: Overview Presentation:  “What Happened to Sony?” Assignment for other teams:  Write a short paper (500 words) analyzing the main differences in business model between Sony and Apple.
Week 9 6/10	Taisho Pharmaceuticals 2	Proposition 1: Taisho should withdraw from the international market and become a purely domestic company Proposition 2:  Taisho should immediately return ¥200 billion in unneeded cash to its shareholders	Reading:  Framework for Financial Decisions Assignment for Taisho Teams: Debate on Propositions 1 and 2 Assignment for other teams:  Work on upcoming presentations
Week 10 6/17	JR East Japan 2	Proposition 1:  JR East Japan should be broken up into two or more separate companies. Proposition 2: JR should actively pursue growth opportunities outside Japan.	Reading: Hagel and Singer, “Unbundling the Corporation” Assignment for JR Teams: Debate on Propositions 1 and 2 Assignment for other teams:  Work on upcoming presentations
Week 11 6/24	Softbank 2	Proposition 1: Softbank’s acquisition of Sprint/Nextel has seriously damaged Softbank’s corporate value Proposition 2:  Softbank is significantly overvalued by the market	Reading: “Valuation Methodologies” Assignment for Softbank Teams: Debate on Propositions 1 and 2 Assignment for other teams:  Work on upcoming presentations
Week 12 7/1	Sony 2	Proposition 1:  Daniel Loeb is right:  Sony should spin off its movie and entertainment business Proposition 2.  Sony should sell its television business	Reading:  Daniel Loeb letter to Sony Assignment for Sony Teams: Debate on Propositions 1 and 2 Assignment for all teams:  Deliver video version of finalpresentation
Week 13 7/8	Final presentation 1	JR East Japan: Strategic Proposals Taisho Pharmaceutical: Strategic Proposals	Deliver final presentations
Week 14 7/15	Final presentation 2	Softbank: Strategic Proposals Sony: Strategic Proposals	Deliver final presentations