GSD / E-Commerce / Assignments

Harvard Design School
E-Commerce
and the Internet in Real Estate and Construction
Fall 2001 - 7401
John D. Macomber, Lecturer
Assignments
last revised Nov 20, 2001
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Class Number 1 2 3 4 5 6 7 8 9 10 11 12

Class Number	1
Date	Sept. 18
Assignment	None
Topics	Introduction Industry Value System
Case	None
Discussion Questions	How are firms organized individually to deliver projects? How are firms collectively arranged in a system to add value in delivering projects? Which way does the product flow? The money? The information? Where are the efficiencies and inefficiencies in the system? Where are the opportunities to make money? To increase efficiencies?
Required Reading	None
Back to Top	Last Revised 9/18/01

Class Number	2
Date	Sept. 25
Assignment	Note: The HBS Case Study, Cortlandt Homes, was handed out in class on Sept 18, is on reserve at the library, and also can be obtained via the TA, astefani@gsd.harvard.edu Problem Set #1 - 1 Page Total (hand in at start of class) (diagrams can be hand drawn) Many students have no prior experience in real estate finance. This assignment is meant to be an introduction. Assignment: Prepare a one-page summary discussion of the financial projections in Exhibit 2. Question 1: Of the bank, developer, contractor, architect, and subcontractors, who has the biggest financial risk? The biggest potential profit? Question 2: What is the impact on the profitability of the project if the Rental Income goes up or down by 10%? If the Debt Service goes up or down by 10%? If the Net Project Cost goes up or down by 10%? (This assignment is meant to get you thinking about the issues - not everybody will feel comfortable right away). Sept 24, evening - Exhibit 2 has a typo in the construction cost. The excel spreadsheet at Cortlandt Spreadsheet** can be used to summarize the key figures and to look at sensitivities to changes in the various elements of the projection.
Topics	Project Risk and Reward Follow the Money: Understand the Intermediaries
Case	Cortlandt Town Center Harvard Business School Case:
Discussion Questions	Comment: This class uses a real estate case study to illustrate the financial position of the players in the value system (or supply chain) and to highlight how the money flows. Understanding the basics of the roles of these players and their relationships will help us to evaluate the e-commerce opportunities that we discuss going forward. We will not be spending much time on the politics of the development project. The purpose of the case for us today is to put numbers and names to the participants in the construction value system, and to address the core business questions such as: Where do you think the financial risk and financial opportunity lies in this project? What are the key sensitivities in the pro-forma financial statements? How would you expect the role of the brokers to compare with the role of the principals? How do you think that e-commerce and the Internet could impact the risk and profit for any of these groups?
Required Reading	None
Back to Top	Last Revised 9/24/01 10:30 pm

Class Number	3
Date	Thursday Sept 27 OR Friday Sept 28; attend one or the other.
Assignment	No written assignment. Please prepare to talk about the discussion questions.
Topics	Fundamentals of Competitive Advantage Market Segmentation Industry Attractiveness Generic Strategies
Case	The Architect's Collaborative Harvard Business School Case: 576-016
Discussion Questions	This is an old marketing and sales case which we will use to discuss concepts in segmentation, industry attractiveness, and generic strategies. These are elements of strategic thinking which are needed as a foundation. Suppose you were a young architect at The Architect's Collaborative. Prepare to discuss the firms' direction with your peers. Where is TAC in the Industry Value System? What are the major planning issues? Have the issues changed in the 25 years since the case was written? Are these issues shared by other professional services firms today? How would you segment the markets that TAC serves - say with a matrix of services offered vs buyer types? How attractive are some of these segments, based on a "five forces" analysis from the reading? What generic strategy are they pursuing? How well do the execute it? Would you prefer to work at TAC or at CRS? Why?
Required Reading	Porter, Michael E: Competitive Advantage, Chapter 1: "Competitive Strategy: The Core Concepts"
Back to Top	Last Revised 9/25/01

Class Number	4
Date	October 2
Assignment	Paper #1: 3 pages including diagrams (hand in at start of class) (diagrams can be hand drawn) This assignment will allow you to practice using some of the strategic planning tools introduced in class to date. This class marks the end of the foundation phase of the semester. You are a member of Willy Welsh's Board of Directors. Write a memo to him that helps him evaluate his opportunities in a strategic manner. Don't focus too much on the numbers this time; remember to use the value system, market segmentation, five forces, and generic strategies models. What is your recommended course of action, and why do you propose it?
Topics	Vertical Integration Strategy in Fragmented Industries The Planning Process
Case	Savannah West Harvard Business School: 9-381-081 (Rev. 1/22/92)
Discussion Questions	This is a finance case which we will use to discuss vertical integration in the AEC Value System. Think of the case from Willy Welsh's perspective. What role(s) does Welsh play in the overall value system? What skills are needed by the various parts of his companies? What are the major elements of risk in the deal? Who takes what risks? Reaps what rewards? How could the risks be separated? What advantages and disadvantages does Welsh realize from being vertically integrated?
Required Reading	Porter, Michael E: Competitive Strategy, Chapter 14: "The Strategic Analysis of Vertical Integration" Macomber: "Strategic Planning for Contractors: Eight Steps to Success" Construction Business Review, January/February 1991
Back to Top	Last Revised 9/18/01

Class Number	5
Date	October 23
Assignment	No written assignment. Please prepare to discuss the case and the concepts.
Topics	The Shared Business Database Portals, Collaboration, Aggregation, Matching, and Disintermediation e Commerce Business Models How Information Gives You Competitive Advantage
Case	Quicken Insurance: The Race to Click and Close Harvard Business School: 800408
Discussion Questions	How did Quicken originally come to prominence? What role(s) do Quicken, and Quicken Insurance, play in the value system for personal insurance products? What comparable roles are there in real estate and construction? What roles does QuickenInsurance try to replace? Was QuickenInsurance able to replace these roles without taking on the risk of the roles? How might QuickenInsurance restructure their industry? What parallels might there be in architecture, real estate, and construction? Are you aware of any companies with similar strategies in RE / AEC today? Is their target segment structurally attractive? What do they have to do to succeed?
Required Reading	Porter, Michael E: "How Information Gives You Competitive Advantage" HBR 85415
Back to Top	Last Revised 10/21/01

Class Number	6
Date	October 30
Assignment	No written assignment. Please prepare to discuss the case and the concepts.
Topics	Knowledge Management
Case	Buckman Laboratories Harvard Business School: 9-800-160
Discussion Questions	What is knowledge management? What is the basic strategic situation at Buckman Laboratories? How does K'Netix help Buckman execute its strategy? Why is knowledge management a potential source of competitive advantage for professional service firms in general? What parallels can you see in real estate, design, and construction firms? How might a knowledge management system alter the presently fragmented structure of our industry? What other trends are in place or on the horizon whose strategic adoption is enhanced by knowledge management? How will this impact large firms? Small firms? What are the benefits and pitfalls of implementing a knowledge management solution? What do you think of the transition from a culture that rewards hoarding of knowledge to a culture that rewards the sharing of knowledge?
Required Reading	Hansen, Nohria, Tierney, "What's Your Strategy for Managing Knowledge" Harvard Business Review 99206 "Do We Know How to Do That" Harvard Management Update U9902A
Back to Top	Last Revised 10/29/01

Class Number	7
Date	November 6
Assignment	No written assignment. Please prepare to discuss the case and the concepts.
Topics	Supply Chain Management Visibility into Demand and Capacity Optimizing the Project System
Case	Supply Chain Management at World Co., Ltd." Harvard Business School: 9601072
Discussion Questions	What is Supply Chain Management as practiced at World Co? What is their strategic position? How does their approach to supply chain help them to accomplish their strategy? What parallels do you see to design and construction? What is not parallel? What would it take to accomplish a supply chain strategy in this industry? How does this compare to e-procurement? What kinds of companies in the construction industry value system could implement a supply chain solution?
Required Reading	"The Manager's Guide to Supply Chain Management" BH044
Back to Top	Last Revised 10/29/01

Class Number	8
Date	November 13
Assignment	No written assignment. Please prepare to discuss the case and the concepts.
Topics	Aligning Economic Incentives Risk Management and Economic Collaboration
Case	[Blockbuster] "Turning the Supply Chain into a Revenue Chain" Harvard Business School: F0103B
Discussion Questions	How did Blockbuster alter the economic situation to help both parties? How might this be done in construction? Do you think that a solution like this might accelerate the adoption of other technologies for sharing? What are some of the key differences between the physical value chain and the virtual value chain in design and construction? How should real estate, design, and construction firms fashion their strategies to take advantage of changes in the physical and virtual value chains?
Required Reading	Rayport & Sviokla, "Exploiting the Virtual Value Chain" HBR 95610
Back to Top	Last Revised 10/29/01

Class Number	9
Date	November 20
Assignment	Problem set #2: 1 -3 pages including diagrams (hand in at start of class) (diagrams can be hand drawn) The Regency Plaza situation is one where the various firms involved are spending a lot of time and effort working against each other. What is the basic industry value system for this situation? What are the motivations and rewards for each firm? Can you think of another kind of incentive structure that would provide economic motivation to the participants to work towards a common goal? How would this look at each level? Is this important to helping firms succeed with other technology initiatives? If successful at implementing Blockbuster-like aligned incentives on this project, how might Kelly Construction leverage this learning in the future to alter or to enhance their competitive strategy?
Topics	Game Theory System Thinking to Align Economic Incentives The Shared Business Database
Case	Regency Plaza, Harvard Business School: 9-391-021
Discussion Questions	(See the assignment, above)
Required Reading	"Aligning Incentives for Supply Chain Efficiency" HBR 600110
Back to Top	Last Revised 10/29/01

Class Number	10
Date	November 27
Assignment	No written assignment. Please prepare to discuss the case and the concepts.
Topics	New Economies of Scale Consortia International Approaches
Case	Colliers and the Technology Solution Harvard Business School: 9-396-091
Discussion Questions	Why is it useful for Colliers to exist? How are the firms linked together? Is the Colliers technology solution different than a knowledge management implementation? Can you think of other instances in the real estate, design, and construction industries where alliance networks might help firms to compete? What are some of the benefits? What are some of the pitfalls? How would a firm's competitive advantage be altered by being a part of such an alliance? How would you price the right to be a member?
Required Reading	"Group vs Group: How Alliance Networks Compete" HBR 94402
Back to Top	Last Revised 10/29/01

Class Number	11
Date	December 4
Assignment	Final Paper Due. 3-5 pages. Use the strategy tools of the course to provide a strategic analysis of the Beck - Destini initiative. What useful concepts can be applied from the other concepts of the course? Does 3D design have the promise to transform the industry, or is it simply another drafting program? Following that review, provide your recommendation for how the Beck Group can grow the Destini business.
Topics	The Shared Database 3D Modeling: Business Issues Aligning Incentives, Managing Risk, Getting Scale
Case	The Beck Group and Destini
Discussion Questions	(See above)
Links	Bentley Triforma (3D solid modeling from the Microstation team) IBM Catia - The 3D modeler used by Frank O. Gehry and Associates Revit - A New 3D Modeling Tool The Beck Group
Required Reading	None DESTINI demo and other Beck/Destini info:
Back to Top	Last Revised November 20, 2001

Class Number	12
Date	December 11
Assignment	Impact on Processes: Return on Investment in Information Technology for Real Estate, Design, and Construction
Topics	Wrapup Concept review Return on Investment
Case	Presentation given by John Macomber at the Center for Design Informatics conference on November 16, 2001 RECI Macomber - ROI
Discussion Questions	To be determined
Required Reading	None
Back to Top	Last Revised November 20, 01