Marketing Strategy

MGT 559
Instructor: Jiwoong Shin
Fall 2019

Office: Room 5518, Evans Hall

Phone: 203-432-6665
E-mail: jiwoong.shin@yale.edu,
TA: Hortense Fong (hortense.fong@yale.edu),
Ian Weaver (ian.weaver@yale.edu)
Course Support: somcoursesupport@yale.edu
TA Hours: TBA

Days Time
Class Meeting Times Mon, Wed 10:10 AM – 11:30 AM (S1),
1:00 PM – 2:20 PM (S2)
Office Hours* Mon, Wed 11:30 AM — 1:00PM, by appointment
______________________________________________________________________________

* Office Hours are also available by appointment. I am always available via email.

Overview of the Course

In this course, we will develop frameworks and conceptual tools to analyze problems and develop the
optimal marketing strategy for products and services. The course is aimed at helping you look at the
entire marketing mix in light of the strategy of the firm. The course builds on the foundation developed in
core courses, and the basic framework rests on the recent development in economics and strategy –
resource-based view (RBV) of strategy. You will have a chance to illustrate your ability to apply this
framework in this course through various case discussions. It will be most helpful to students pursuing
careers in which they need to look at the firm as a whole. Examples include consultants, investment
analysts, entrepreneurs, and product managers.

The first module of the course, “what is marketing strategy?” focuses on the purpose and function of
marketing strategy, as well as its relationship to competitive advantage. Also, we will cover a number of
techniques for analyzing the potential of a specific firm in a specific industry over time (external, internal
and dynamic fit of strategy). To do so, we introduce the concept of resources and resource based view
(RBV) of strategy. This will involve looking at concepts such as creating value, capturing value and
evaluating the gap between consumer willingness to pay and supplier opportunity cost. Finally, we
explore the importance of the RBV and focus on the environments-resource-strategy fit of marketing
strategy.

The second module, “External and internal fit of strategy: creating competitive marketing strategy,”
introduces opportunities to apply our basic concept of RBV of strategy in different settings. We will
analyze various situations from the perspective of resources and competitive advantage. In particular, we
discuss how the firm’s equilibrium strategy leverages its unique resources, which fit particular

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environments (external and internal fit of strategy). We will continue to look at issues how to identify
and leverage existing resources necessary to be successful for target segment and positioning.

Finally, in our last module of “Dynamic fit of strategy: challenging competitive marketing strategy,” we
focus on the dynamic aspect of strategy and resource development over the life cycle of the product and
brand – in each stage, firms need different sets of resources and we will look at a number of situations
where smaller firms challenge the advantages of more established competitors. In particular, we will
focus on the options of such challenges in light of the nature of the resources supporting their rivals. In
this process, we will spend time forecasting competitive dynamics.

Course Materials

1. Reading list: The course draws upon a reading list that contains cases and background
articles. These materials will be posted in Class website (Canvas). You are required to
read the assigned cases before class and be prepared to discuss the cases critically.

2. Slides: Slides for the lecture sessions will be available in Class website before class.
Please print and review these slides before coming to the lecture. Slides for the case
sessions will be posted after class.

Grading

Final grades will be based on the following components:

1. Class participation 10%

2. Case write-ups 40%

3. Final exam 50%

The expectations for each component are explained as follows:

1. Class participation (20%)

Your class participation grade is based on attendance and input. Simply, your
absences will cost you attendance points, unless you encounter extenuating
circumstances such as serious illness.

Your input to class discussion will be evaluated by the TA and me based on both
quantity and quality. TA will record all of your class participation. You should view
class participation as an opportunity to both ask questions to enhance your
understanding of the material and suggest examples that demonstrate such
understanding.

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 In order to help me get to know you and give you credit for your comments, please
always bring your nameplate to class.

2. Case write-ups (40%)

We will study several cases during the entire course. In addition to discussing the
cases in class, each individual must submit at least four write-ups from the following
six cases. Each case write-up contributes to 10% of your final grade.

You can choose which case write-ups to hand in, but you must hand in two reports
from the first half and two from the last half.

Choose 2 of these cases: Choose 2 of these cases:

Nintendo and Sega (Session 4) Chase Sapphire Card (Session 8)

Black & Decker (Session 6) Intel (Session 10)

Gucci (Session 7) UFO Moviez (Session 12)

A case write-up is due at the beginning of the class when that case is to be
discussed. As part of the case write-up, you may be asked to provide
recommendations on a course of action. Note that there is rarely a "right" answer in
any case—the course of action often depends on assumptions not explicitly present
in the case facts. However, the process by which you arrive at a recommendation
and the principles you draw on are extremely important.

3. Final exam (40%)

An 80-minute final exam will be given in class on Wed Oct-9. The exam covers all
lectures and case discussions.

Yale School of Management Policies

Please see the Yale School of Management Bulletin for Rights and Responsibilities of
students and for information on requesting course recording.

Laptop and Device policy

Usage is not allowed without the express permission of the instructor

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 Course Outline
Class Day Date Topic Assigned Readings
I. Foundation: what is marketing strategy
Introduction: What is marketing strategy? Collis and Rukstad, “Can you say What
1 Wed 8/28 your Strategy is?”
Ghemawat and Rivkin, “Creating
Competitive Advantage”
Resource-Based View (RBV) of Marketing Collis and Montgomery, “Resources and
2 Fri 8/30
Strategy: Environment-Resource-Strategy Rents,” Chapter 2, pp. 25-47 – also
Fit located under Files on Canvas
Strategy as an integrated set of choices “CarMax: Disrupting the Used Car
3 Wed 9/4 and consistency Market” (HBS Cases)
Case: CarMax

4 Mon 9/9 Creating vs capturing value “Power Play – Nintendo (A) and Sega (B)”
(HBS Cases)
Case: Nintendo and Sega
II. External and Internal consistency: creating competitive advantage
Identifying and leveraging resources for MacMillan and McGrath, “Discovering
5 Wed 9/11 STP new points of differentiation”
Shin and Sudhir, “Should you Punish or
Reward Current Customers”

6 Mon 9/16 Identify key resources for segmentation “The Black & Decker Corporation (A):
Power Tools Division” (HBS Case)
Case: Black & Decker Corporation
7 Wed 9/18 Leverage existing resources for positioning “Gucci Group N. V.” (A) (HBS Case)
Case: Gucci
Leverage customer-based resources for “Chase Sapphire: Creating a Millennial
8 Mon 9/23 targeting Cult Brand” (HBS Case)
Case: Chase Sapphire
III. Dynamic consistency: Challenging competitive advantage
New Environment-Resource-Strategy fit Wernerfelt, “The use of resources in
resource acquisition” – also, located
9 Wed 9/25 under Files on Canvas
“Uber: Changing the Way the World
Moves” (HBS Case)

10 Mon 9/30 Resource development over PLC “Inside Intel Inside” (HBS Case)
Case: Intel Inside
Dynamic fit of strategy and resource “Better Competition: The Holland
11 Wed 10/2 development Sweetener Company versus Nutrasweet
(A)” (HBS Cases)
Case: Nutrasweet

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 The Emergence of the new technology “UFO Moviez – Gentle Disruption” (HBS
12 Mon 10/7 and New Environment-Resource-Strategy Case)
fit
Case: UFO Moviez
13 Wed 10/9
Final Exam

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 DETAILED CLASS SCHEDULE

I. Foundation: what is marketing strategy?

1. Lecture: Introduction

• “Can you say what your strategy is?” David J. Collis and Michale G. Rukstad (2008) HBR
Article.

• “Creating Competitive Advantage,” Ghemawat and Rivkin (2006) HBR Article.

2. Lecture: Resource-Based View (RBV) of Marketing Strategy

• We introduce the concept of resources and learn how to measure and identify these
assets.

• We emphasize the concepts of external fit, internal fit and dynamic fit of strategy. In
particular, we focus on the environments-resource-strategy fit of marketing strategy, as
well as its relationship to competitive advantage.

• "Resources and Rents," David Collis and Cynthia Montgomery (1998), Corporate
Strategy: A Resource-Based Approach, Irwin, Chapter 2, pp. 25-47.

3. Case Discussion about strategy as an integrated set of choices and consistency among them

“CarMax Inc.: Disrupting the Used-Car market,” HBS Cases (9-717-506)

• What is the key resource for its competitive advantage? Is it differentiation, cost-
advantage, or dual advantage?

• How do the key choices in CarMax’s strategy help to meet customer needs more
effectively?

• How sustainable is its success?

4. Case Discussion about Creating vs capturing value

“Power Play – Nintendo (A) and Sega (B),” HBS Cases (9-795-102, 103)

• Nintendo successfully recreated the home video game business following the Atari-era
boom and bust. How did it do so? What was the key difference between the Nintendo
and Atari strategies?

• How was Nintendo able to capture value from the home video game business?

• Evaluate NEC’s and Sega’s strategies for challenging Nintendo in the video game
business.

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II. Internal and external consistency: creating competitive advantage
5. Lecture: Identifying and leveraging customer-based resources for Segmentation, Targeting, and
Positioning (STP)

• We discuss how the firm’s equilibrium strategy leverages its unique resources which fit
particular environments (external and internal fit of strategy).

• We continue to look at added value and spend time identifying the resources of these
firms.

• “Discovering new points of differentiation,” MacMillan and McGrath (1997) HBR article.

• “Should you Punish or Reward Current Customers” by Shin and Sudhir (2015) Sloan
Management Review article.

6. Case Discussion for identifying key resources for target segment

“The Black & Decker Corporation (A),” HBS Cases (9-595-057)

• Why is Black and Decker doing poorly in the tradesman segment?

• What do the tradesmen want?

• Does Black and Decker have a resource that could help them?

• Which action alternative should B&D pursue?

7. Case Discussion for leveraging existing resources for positioning

“Gucci Group N. V. (A),” HBS Cases (9-701-037)

• How has Gucci’s positioning changed: where was it in 1990? 1994? And 2000??
• What were the key elements of Gucci’s positioning strategy in 2000?
• What are the synergies in this industry?
• Does it make sense to become a multi-brand company? Evaluate the YSL acquisition
8. Case Discussion for customer-based resources for targeting

“Chase Sapphire: Creating Millennial Cult Brand,” HBS Cases (9-518-024)

• What value does the Chase Sapphire Reserve deliver to customers? How is it
differentiated from competitors? What value does the card deliver to the company
(JPMorgan Chase)?

• How do you evaluate the 100,000-point offer? Was this a good investment for JPMC?

• Is there enough value in the product to get customers to renew with $450? How
successful will it be at retaining customers in to their second year?

• How will a competing credit card provider respond to the Chase Sapphire Reserve? How
should Chase position itself to be ready for these competitive responses?

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III. Dynamic consistency: challenging competitive advantage
9. Lecture: Competitive strategy and resource development

• We cover the dynamics of companies in competition and how to think, in a rigorous way,
about which types of advantage a specific firm should pursue with regards to its own
resources over time.

• We explore how the new environments often driven by the emergence of new technology
can disrupt the existing industry. Our focus is on how to challenge the existing industry by
leveraging new resources which fit new economical environments. Explore new
environment-resource-strategy fit in this new economy (dynamic fit of strategy)

• The lecture highlights several companies including Uber and Airbnb that exemplify this new
mode of competition, a model that threatens to disrupt traditional firms. These cases
provide an exploration of the impact of disruptive innovation on a market.

• “The use of resources in resource acquisition” by Wernerfelt (2011), Journal of

Management.

• “Uber: Changing the Way the World Moves,” HBS Case (9-316-101).

• “The On-Demand Economy,” HBS Article (9-716-405).

10. Case Discussion for resource development over PLC

“Inside Intel Inside,” HBS case (9-502-083)

• What were the key reasons to launch the Intel Inside campaign? Why was it so
successful?

• What has been the brand promise of the Intel branding campaign throughout the year?
What is the rationale of the shifting ad strategy – from functional to an emotional pitch
using Blue Man Group, etc.

• Should the company extend the “Intel Inside” campaign to other non-PC categories such
as cell phones and PDAs? Why or why not?

• More generally, what does it take to brand an “ingredient”? Can any company pull it
off? In any product category?

11. Case Discussion for dynamic fit of strategy and new resource development

“Better Competition: The Holland Sweetener Company versus Nutrasweet (A-G),” HBS Cases (9-
794-079, …, 085)

• How should Winfried Vermijs expect Netrasweet to respond to the Holland Sweetener
Company’s entry into the European and Canadian aspartame markets?

• Specifically, how should Vermijs assess the relative likelihood of the two scenarios –
price war and normal competition – he has in mind?

12. Lecture: The Emergence of the new technology and New Environment-Resource-Strategy

“UFO Moviez – Gentle Disruption,” HBS case (5-716-453)

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 • What is the logic behind UFO’s entry strategy?

• Do you think that UFO should enter the traditional distributors’ business?

• What are UFO’s options for future growth? Please articulate the rationales behind such
options and how you think UFO should implement it.

13. Final Exam: In-class (80 min)