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Prof Örjan Sölvell

Room C 517

Dr Göran Lindqvist

SYLLABUS

2017

Industry Clusters

and

Firm Competitiveness

6106

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The course consists of twelve 3-hour sessions of which 8 are core sessions. In addition there is time for team project coaching.

Session Theme 1 Concepts – Overview of all models

Team Coaching – 1 hour/team: kick-off & case selection. Teams will pick a time at the first session. Room Gunnar on 5th floor behind elevators, Holländargatan 32 7 November 09.00 – 15.00 8 November 09.00 – 17.00

2 Case – Three levels of analysis: Nation – Cluster – Firm

Finland & Nokia (A) and (B): Crisis and Transition

3 Concepts – Competitiveness and Clusters con´t

4 Cases Volvo Trucks (A) and (D)

5 Mid-course summary and Q&A

6 Cases – Global Competition and Cluster Construction – Australian Wine (A) and (B)

7 Case – Cluster Dynamics and Life Cycle – Arjeplog Winter Car Testing

8 Case – Nations and Policy – Singapore

9 Project presentations

10 Project presentations

11 Project presentations

12 Course summary

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Industry Clusters and Firm Competitiveness – Course Background

This course is concerned with firm strategy and the determinants of competitiveness and processes of innovation at different levels of an economy. The course puts firms on center stage, but is concerned with the surrounding environment. Three interacting levels form the core of the course:

• nations/regions offering particular framework conditions for firms (macro- and microeconomic conditions, where the course focuses on microeconomic conditions)

• clusters of proximate interlinked industries and institutions where competition and cooperation takes place

• firm strategies (particularly entry and global strategies) and competitiveness

The dynamics of clusters of interlinked industries, and the overall quality of the regional/national business environment (as summarized in Porter’s Diamond model), within which competition (as summarized in Porter’s Five-Force Model), cooperation and processes of innovation takes place, has a fundamental influence on firms’ competitiveness, and ultimately a society’s productivity and prosperity levels.

In addition to firm strategy and policy choices, the course underlines the role of somewhat deterministic forces, such as history, i.e. the legacy of nations and regions (such as natural factors and historical institutions and culture), and geography, i.e. the regional circumstances of a particular nation/region (e.g. the level of development among neighboring nations and the intensity in regional interaction).

The course is conceptual (rather than theoretical offering different theoretical perspectives) – and has the ambition to make students understand how to make sense of masses of data (fragments) by making use of simple models/recipes. Sometimes students collect data themselves and sometimes data is offered through teaching cases (semi-structured data without conclusions). Conclusions emerge through discussions in the classroom, complemented by shorter lecture style presentations by the instructor (case summaries and model discussions).

The models are like “metaphors” giving the user a chance to structure and analyze vast amounts of data – i.e. to build a coherent picture (a puzzle if you will) from which one can make recommendations. This is not so easy in the beginning, but the case sessions, and your work with the Team Projects are there to help you develop those skills. Models sometimes overlap. When should you use them? Take a look at the subtext for each chapter in Table of

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Contents of the textbook – it will give you a good idea. There is also a Table on page 22 connecting models with the overarching themes.

The backbone of the course is Professor Sölvell’s textbook (2015) “On Strategy and Competitiveness” (can be downloaded for free at www.clusterobservatory.eu under the Library section). The book offers 10 conceptual models of which 8 are used in the course:

Railway Model How to grasp a firm´s strategy

Radio Model How to build an entry strategy

Stairway Model How to better understand local, multi-domestic and global competition

Trabant Model How to analyze differences between static and dynamic business environments

Cluster and

inverted S Model How to better understand the innovation power of clusters, to analyze interactions between firms and other proximate actors such as research and public organizations; how to understand cluster life cycles

7 Cluster Gap Model How to diagnose and improve cluster dynamics

Funnel Model How to reconcile the three levels of analysis: nation – cluster – firm

The Hollywood Model How to better understand interaction between local and global forces in the world economy

In addition the course builds on Professor Porter’s two main models:

Diamond Model How competitiveness is driven by a set of microeconomic conditions at the national/regional and cluster levels

Five-Force Model Understanding the profit potential of an industry and setting strategy

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Progression of the Course

The course includes conceptual sessions, case sessions, coaching sessions and one concluding session. The case sessions include both case discussions and shorter summaries and lectures. Each session will build on a certain theme, including:

• Entry strategy and getting stuck on a strategy • Global Strategy • Global Competition • Different perspectives on the broad concept of competitiveness • Competitiveness vs innovativeness of firms • Cluster Dynamics and cluster life-cycles • National Attractiveness and Policy

Sessions 9-11 are used for project presentations. Session 5 is an open conceptual session to allow for mid-course summary and deepened discussions around the first set of models.

The course requires that students have taken a basic course in Strategy/Strategic Management, and have an understanding of Michael Porter´s Five-Forces and Diamond models.

The progression of the course is summarized below.

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Figure 1 Sequencing of the 8 Core Sessions

Objectives and ILOs

The overall objective of the course is for students to gain a deeper understanding of how firms develop strategies and build and lose competitiveness and innovativeness over time. Furthermore, students will gain an understanding of the microeconomic drivers behind competitiveness, and the role of policymaking in that process.

The overall intended learning outcome for the course is that upon completion of the course, students should be able to assess how firm strategies interact with the surrounding economic and political environment, select appropriate analytical tools (models) for addressing these issues, and employ a set of tools

 

 

 

 

 

 

 

Session  1

Session  2

 

 

Session  3

Session  4

Session  5

Session  6  

 

Case Arjeplog

Concepts Competitiveness

Concepts Three  Levels  of  Analysis

Case Mobiles  &  Smartphones

Case Trucks

Case Wine

 

 

Session  7

Session  8

Half-­‐way  summary

Case Singapore

 

 

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to generate strategic propositions regarding both firms and clusters. More specifically, the students should be able to:

1. Demonstrate in discussion and writing his/her understanding of the models presented during the course

2. Demonstrate in discussion and writing his/her understanding of the conditions under which these models are applicable, clarifying their central assumptions and concepts, and explaining the conceptual relations

3. Demonstrate in discussion and writing his/her ability to select appropriate conceptual models to analyze firms, industries and clusters, to successfully employ the selected tools, and derive recommendations from the analysis, during case discussions and through a written project performed in groups.

In summary, the objective of the course is for students to go from collecting and reading vast amounts of data and information, plus using fancy words like “strategy, global competition, clusters, competitiveness” etc., to be able to analyze and build a puzzle and create a holistic picture – and from this picture draw conclusions around issues of Strategy, Competition, Clusters and Competitiveness for firms, clusters and nations; that is to move from SAYING – READING, MEMORIZING concepts to make good USE of these conceptual models and to REFLECT and make RECOMMENDATIONS.

Pedagogy

The course will use a mix of lectures, cases and a team project. The reading load is relatively light, but the case method requires extensive advance preparation for each class. Also, the instructor will ask students to prepare mini-cases (through web searches) on their own (or in groups as they prefer) as a preparation for class.

For students who want to get a deeper understanding of the concepts, video materials are available on the themes of clusters and cluster initiatives (1-1 to 1-3: what are clusters? And 3-1 to 3-5 how to develop cluster initiatives), please go to:

http://www.youtube.com/channel/UC8VH0o3nLPRSSwE2iU_2EiQ

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The group project involves a competitive assessment of a particular country/region, cluster and a firm. For examples please refer to the Cluster Observatory (www.clusterobservatory.eu) under MOC Classroom.

The take-home exam is distributed at the end of the course, and should be handed in 8 December at 12.00 noon (to Agneta Carlin).

Grading

Grading will be based on a take-home exam and the team project report.

All core sessions (1-4 and 6-8) are obligatory (mid-course summary, team project sessions and final session are voluntary) in order to pass the course. Up to two sessions can be missed, but must be replaced by a written hand-in. Students that miss more than 2 of the 7 sessions will have to retake the course.

To successfully pass the course, the student needs to demonstrate:

1) Knowledge and understanding of the core concepts and models of strategy and competitiveness at levels of nations, clusters and firms

2) An ability to apply the concepts in real life situations

3) An ability to formulate recommendations at the level of nations/regions and firms

ILO 1 and 2 will be assessed through a written exam referring to 1) the literature and models, and 2) preparations before class and discussions in class. ILO 3 will be assessed through a project report. The overall course grade will be weighted so that the result of the individual exam accounts for 60% of the course grade, and the project report accounts for 40%.

In order to be registered as having passed the course, students must achieve at least the minimum score for both assessment activities (exam and project).

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Course Staff

Name email Room Main responsibilities

Örjan Sölvell

Göran Lindqvist

orjan.solvell@hhs.se

goran.lindqvist@hhs.se

C517

A6003

Course director, teacher

Teacher

Agneta Carlin

agneta.carlin@hhs.se C530 Course assistant (course registration, course grades, etc.)

Materials

Study materials (distributed as pdf:s) for the course include:

1. Main Textbook in print: Örjan Sölvell “On Strategy & Competitiveness” (2015)

2. Finland and Nokia (2008)

3. Finland and Nokia (B): Crisis and Transition (2016)

4. Volvo Heavy Trucks (A) (2000)

5. Volvo Heavy Trucks (D) (2016)

6. Australian Wine (A) (2016)

7. Australian Wine (B) – Barossa Cluster (2016)

8. Report: Clusters in South Australia

9. Arjeplog – Winter Car Testing (2016)

10. Remaking Singapore (2013)

11. Report: Summary of Singapore Competitiveness Report (2009)

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Cluster Team Projects A central part of the Industry Cluster and Firm Competitiveness course is the team project on a chosen nation/region, cluster and firm. The aim of the cluster project is for students to apply the concepts and models presented in the course to a particular cluster case. The projects will also develop knowledge about competitiveness and clusters in an array of countries.

Teams of 4-5 students carry out projects.

The content of the team project involves four parts:

1. Overall National/regional framework conditions (around 20% of content in final report)

2. Cluster analysis (around 60% of content) 3. Firm strategy (around 10% of content) 4. Policy recommendations at the cluster level (10%)

Part 1: Overall National/regional framework conditions

• Short profile of the country and region, including, endowments, size, legacy, macro, political system

• Overall economic performance, including economic growth, GDP per capita level and growth, productivity, rate of innovation, and social development measures

• Composition of the economy by cluster • Quality of the national and regional microeconomic business

environments, with a focus on areas relevant to the cluster • Identification of key country/regional overall competitiveness

(attractiveness) issues that are important to the cluster

Part 2: In-depth Analysis of a Cluster

• Profile of the cluster including its products/technologies and services and types of customers

• Description and mapping of the cluster actors (end producer, firms, suppliers, service providers, related industries, research and educational organizations, public bodies, organizations for collaboration, etc.)

• Historical timeline of the cluster: birth, development and (if relevant) decline and their causes, cluster phases

• Cluster performance; current and trends over time • Identification of key competing clusters in other countries/regions;

overview of similarities/differences with the chosen cluster • Cluster dynamics assessment: cluster diamond, strengths and

weaknesses in the cluster; cluster-specific government policies

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• Identification of key issues facing the cluster. Policy recommendations to increase the dynamism of the cluster, including recommendations for national and regional governments, cluster participants, and other relevant stakeholders

Part 3: Overall description of a firm within the cluster

• Overall strategy (products, markets, overall business model) • Level of international competitiveness, global position • Role in home cluster

Part 4: Policy recommendations at the cluster level

• Improved factor conditions (human capital, infrastructure etc.) • Improved context for strategy • Improved conditions for cluster dynamics • Improved conditions for demand sophistication

The team project puts focus on clusters (section II which is 60% of the project). Data and analysis from the national/regional level and firm level is to enhance the understanding of the cluster (history, competitiveness, drivers, policy etc).

Timeline and deliverables:

Tutorial

Projects are decided at a tutorial meeting the first week of classes.

Presentations

Presentation of a “draft” Powerpoint in late Nov/early Dec that should include all parts of the project. You will get written feed-back on these. Send presentations (Powerpoint – not pdf) to me (iibos@hhs.se) by Email on the day of presentation before 09.00 (will be uploaded to a central computer for viewing).

During the project presentation seminars, each group will have 20 minutes at their disposal for presenting the report. The project presentations will be followed by a short discussion initiated by the instructor.

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Project presentations in class can be seen as a presentation of a draft where teams use a maximum of 20 slides with focus on graphs, bullet points and analysis/recommendations (no references or detailed information), using 1 intro slide, about 2-3 slides on Part 1, 10-12 slides on Part 2, 2-3 slides on Part 3, and 1-2 slides on Part 4.

Please use graphical materials/models from the textbook.

Final Report

You use all of the materials you worked with during the course to create your final report to be delivered after the Holidays.

The final report should comprise no more than 35 Power point slides (including bullet points, graphs, tables, and endnotes) – no running text. Sources (endnotes) must be clearly stated in connection with presentation of data. Reports should be handed in no later than January 5, at 12.00. This allows for the teams to develop and refine their final analysis between the date of the draft presentation and the date of final hand-in.

Grading

I will grade your final reports (presentations are not graded) on:

-­‐ content – quality of data and how you deal with data and information sources

-­‐ structure and formal quality of report -­‐ choice of models to fit your analysis of selected cluster -­‐ how well you use the models for analysis of selected cluster -­‐ your analysis of where the clusters is today, how it came into being,

drivers of cluster evolution, benchmarking and issues facing the cluster today

-­‐ your ability to connect analysis above, using the models, to come to a conclusion/recommendations