Saturday, July 15, 2006

2nd Sem MBA - Highlights

Just managed to find some time to update you on my academic experience during my 2nd semester. Just like the first one, this was a great learning process too.

(1) Strategic Management: This (probably along with the Financial Accounting course that I did during 1st semester) is the best business course I've taken so far. This was an entirely case-based course where we discussed a case study from almost an entirely different industry every class. Some of these cases were pretty old, from 90's and 80's but they were chosen with a reason. The class was divided into three phases:
(a) You know the business you are in, how do you manage the corporate strategy?
(b) How do you manage your corporate portfolio of products? Which businesses you should be in, and which you should get rid of and when?
(c) Given the business you are going to be in, and the strategy you've decided to follow, how do you implement this strategy across the organization?

We learnt how a CEO should act and lead with the example of Lou Gerstner, the CEO of American Express a few years back, who brough about a sea-change in the organization by turning and motivating every employee to become an entrepreneur and innovator. At the same time, we also learnt about the common mistakes CEO make in crunch situations and how one should not act to turn the company around, with the example of Jim Bartlett, a newly hired CEO of Cleveland Twist Drill who failed to please his shareholders and also his employees, and was thrown away after a few years of further failures. What made this class a success and so interesting was the approach taken by our highly experienced Prof. James Fredrickson and how he directed the class discussions. It was really exciting to see people with vast experiences in highly diversified industries and multifarious backgrounds second and contradict each other in a professional manner all through this course - what a learning experience!

(2) Advanced Corporate Finance: This was an extension to the Finance 101 class in the 1st semester, and is one of the pre-requisites for the upcoming Finance courses. With visiting professor, Prof. Matthew Clayton, we learnt about option-pricing theories and how financial options (like Microsoft's call and put options) are priced and how they create value for the holder. We also dealt with real strategic options that arise from the ability to alter a project midcourse or enter into new projects as a result of some investments. We then moved to review capital budgeting and valuation methods that we learnt in the 101 course, and delved further into how taxes play an important role in the decisions on an organization's capital structure. Perhaps the most interesting part of this course was bankruptcy financing, which includes the direct (legal fees, etc) and indirect costs (loss of customers and suppliers) that a company may incur if it runs into Chapters 7 or 11 bankruptcy. This most often results in debtholder-equityholder conflicts and we saw how, in such situations, equityholders choose to pass-up even +NPV projects because the debtholders take most of the benefits, which is the classical debt-overhang or under-investment problem. Further, asset subsitution scenarios where equityholders takeup lower NPV projects, sometimes leads to credit raitoning where a firm falls into a position where it is unable to borrow at "any" rate. We closed the course by touching a little on how convertibles and warrants are different from normal bonds and options respectively and studied about how M&A deals are made, and what are the financial advantages and disadvantages of mergers and acquisitions.

(3) Marketing management: This is the core marketing course, probably the only marketing course that I will be electing to take. It was a good introductory course, but just that my interests vary. Prof. Kapil Jain did a good job in walking us through the marketing fudamentals, the commonly used 4P's and 5C's that constitute most marketing frameworks. He used a lot of his own frameworks too about pricing and effective marketing communication strategies. This was a case-based class too, though not completely. We analyzed around 6 cases through the course, very interesting ones like how SkiSailer should position its new product their R&D architect and come up with and what were the strengths and weaknesses of their marketing strategy. Another interesting case was what market and customer segments should KONE target its new Monospace elevator at. The second half of the course was mostly spent on a Marketplace simulation. We worked in teams and competed against other teams on a complete simulation in taking a product to market in 8 quarters, which involved pricing, positioning, supply chain operations and production capacity handling, advertising and launching sales promotions and authoring the optimal number of sales offices and sales personnel. This simulation also required us to work on developing business plans to show how the product and the company sees itself in the quarters to come.

(4) Strategy for High-Technology Industries: This was a case based course too, but all the cases were very recent and well chosen from high-tech companies and industries. We explored different industries like nanotech, bio-energy, semiconductors and some of the companies we discussed were Matsushita, Dell, Xerox PARC, and Apple of course. The course was also complemented by a well-organized and stimulating speaker series. Prof. Tim Ruefli and Dr. Steve Finnerty (VP - Dell, who co-authored this course) used their industry expertise and contacts to bring in executive speakers from a high-tech firm like National Instruments, I2 or Motion Computing or local Austin technology startups like Axalto and Austin Energy (believe me, there are tons of them mostly started by UT graduates). In teams, we also got the opportunity to work as live consultants with Austin startups. I consulted with Evolutionary Technology International (ETI), a data integration startup at Austin, to develop a startegy for them to allocate and use the $6M VC funding they received and devise a plan to double their revenues to $20M in 2 years.

(5) Consulting Practicum: I dropped a course to gain some practical work experience, so underwent a consulting practicum organized by Capgemini Consulting. We had Mr. Chris Rediker and Mr. Tim Teuscher from Capgemini come to UT and train us on the best consulting practices and how to work with clients. During the course, I worked with SBC Knowledge Ventures, which later became AT&T Knowledge Ventures (after SBC acquired AT&T and decided to rebrand globally as AT&T) at Austin. Our team analyzed their processes and identified key metrics that helped determine their performance based on their annual revenues and profits or number of deals that they cut based on their intellectual properties (IP), including AT&T's patents, softwares, trademarks and copyrights and other know-how. We developed two models for AT&T KV to track and improve their performance, and presented the same to their top level management including their CEO at the end of the practicum. Some of the other practicum projects were from HP, Shell Oil, GE Medical, TempleInland and a few others.

In addition to the coursework, I had the opportunity to dine with Frank Torgus, the CIO of Shell Oil, and on another occasion, with Pramodh Singh, the Director of Technology Innovation at P&G, and with the CTO from one of famous casinos in Vegas, and many others of the like. These are in addition to the 'official' "Think and Drink" activities that happen every week for the B-school students at Downtown Austin. Also, as part of the UT Speaker Series, we had the like of Jeff Immelt (CEO, GE) , Rick Wagoner (CEO, GM) and Michael Dell address us with their inspiring thoughts on globalization and business strategies. Another important activity that kept us occupied this semster was the internship search. More on that later...



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