Assignments
Last Revised: April 13, 2001
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1. Introduction: The Real Estate and Construction Value System
Risk, Reward, Capability, and Change
Date: Feb 8
Case: None
Required Reading:
John
Macomber AEC/Systems Keynote Address, June 2000: People and Extranets:
The Soul of a Project (on line)
Macomber,
John D., "Yes, The Internet Changes Everything", CBR Sept, 27,1999 (in
reader)
Optional Reading: None
Visitor: None
Comment: This class introduces
the key parties and variables in analyzing the opportunities presented
by E-Commerce and the Internet in Real Estate and Construction. This class
will also lay the administrative groundwork for the course.
Assignment: For background on John Macomber and on risk and change in the Real Estate and Construction industries, please read the two pieces linked below. Both are derived from speeches to major industry groups over the last two years.
Study Questions:
2. Understanding Project Risk in the Real Estate Value System
Follow the Money. Understand the Intermediaries
Date: February 15
Case: Cortlandt Town Center
Required Reading: "An Overview of
the Project Finance Market"
Optional Reading: None
Visitor: None
Comment: This class uses a real estate case study to illustrate the players in the value system (or supply chain) and to highlight how the money flows. Understanding these players and relationships will help to evaluate all of the e-commerce opportunities that we discuss going forward. Further, since project finance is such a key aspect of all real estate and construction, the case is an understandable (if simple) illustration of some of the concepts in the Overview note. Finally, study of this company helps us to segment the various parts of the real estate and construction industry into manageable areas to study.
Assignment: Read the case. Prepare to discuss the study questions.
Study Questions:
Title: NO CLASS
Date: February 22
Case:
Required Reading:
Optional Reading:
Visitor:
Assignment:
Study Questions:
3. Fundamentals of Competitive Advantage
Title: Analytical Structure; Understanding Financial Services; Fundamentals of Strategy
Date: March 1
Case: "QuickenInsurance: The Race to Click and Close"
Required Reading: "How Information Gives You Competitive Advantage," "Competitive Strategy: The Core Concepts (Chapter 1 of 'Competitive Advantage')"
Optional Reading: None
Visitor: None
Comment: This case discussion serves several purposes. First, it's an example of a contemporary e-business initiative. Second, we will use the case to illustrate the major points in studying competitive advantage. Third, it's possible that financial services may be a more compelling e-business for real estate and construction than are design, collaboration, or procurement. Finally, the problem set is intended to cause you to put your thoughts on paper in reviewing this business; and the problem set will give me feedback on how well people understand the concepts to date.
Study Questions:
Internal Links: SwissRe
External Links: None
Title: Competitive Procurement
Date: March 8
Case: Freemarkets.com
Required Reading: "Exploding the Self Service Myth"
Optional Reading: "Industrial Distribution Systems." This note is hard to get through but offers good insight into the existing set of relationships that the standard B2B company is trying to displace.
Visitor: Chuck Miller, Founder and CEO, ProcureZone. Mr. Miller was formerly CEO of Raytheon Engineers and Constructors. ProcureZone helps EPC firms to procure specified components more effectively than before.
Comment: Many e-business models are based on some aspect of procurement. There are some successes, like Dell and Cisco; and some failures. This case illustrates many of the benefits - and costs - that go with online auctions.
Assignment:
Study Questions:
Links: Procurezone.com, BuildFolio.com,
Citadon.com, OneBuild.com
No Class
Title: NO CLASS
Date: March 15
Case:
Required Reading:
Optional Reading:
Visitor:
Assignment:
Study Questions:
Title: Collaborative Procurement: Supply Chain Optimization
Date: March 22
Case: Li & Fung (Corporate Site: Li & Fung )
Required Reading: "Fast, Global, and Entrepreneurial: Supply Chain Management, Hong Kong Style: An Interview with Victor Fung"
Optional Reading: "The Manager's Guide to Supply Chain Management" "i2 Technologies." Both of these readings provide further insight into the benefits of coordinated supply chain management.
Visitor: Jerome Meier. Jerome Meier is Founder and CEO of Rentmaker, Inc., an Internet company that helps match providers and users of rental equipment such as forklifts and bulldozers. The firm helps other companies to optimize their fleet usage and to generate value where none existed before.
Comment: The other side of e-business is in coordination and cooperation. As opposed to competitive buying in the Freemarkets mode, a highly coordinated supply chain can generate more value by eliminating confusion and inefficiency and wasted time. This should result in more gain for everyone. We will discuss the costs and benefits of such a system, what is needed to implement it, and some of the ways this might be implemented in certain parts of the real estate and construction industry.
Assignment: None
Study Questions:
Internal & External Links on
Links
page, also: Rentmaker,
Inc., i2 Technologies
No Topic
Topic: NO CLASS - VACATION
Title: NO CLASS
Date: March 29
Case:
Required Reading:
Optional Reading:
Visitor:
Assignment:
Study Questions:
Title: Knowing a Winning Business Idea when you See One
Date: April 5
Case: eBricks.com
Required Reading: "Knowing a Winning Business Idea when you See One" "E-Hubs: The New B2B Marketplaces," Rayport & Sviokla, "Exploiting the Virtual Value Chain" Harvard Business Review 95610 (old class)
Optional Reading: "Disruptive Technologies: Catching the Wave" "Industry Structural Change" These are useful to get two angles on the issue of substantial change to an industry. Together, the concept of how a disruptive technology can change structure as discussed can be very powerful.
Visitor: Tim Perini. Tim Perini was founder and CEO of eBricks. He presently is Vice President of a successor company, Citadon, a leading provider of collaboration and commerce tools for the AEC and EPC industries.
Comment. The first five classes set the groundwork for industry structure and for some of the more compelling models in the e-business and Internet realms. This case is a real example of a cutting edge plan that got funded. Now that we have several years of experience in this market, what could we have anticipated? What have we learned? How would you approach this concept today?
Assignment: Business plans. This is an opportunity to use the strategic tools, industry analysis, and other business models to evaluate a real e-business plan. You also now have the benefit of hindsight. 5 Page Paper due: Provide your strategic analysis of the business plan of eBricks.com. What do you think will be the issues leading to success or failure in the real estate and construction marketplace?
Alternate assignment: Instead of preparing the eBricks business plan, you may submit a five page precis of a business plan or business issue that you have faced or may be working on. This is a chance to have me and potentially the class comment on your ideas, strategy, and presentation - perhaps even in advance of the $50k competition. PLEASE INDICATE AT THE START OF YOUR PAPER IF YOU ARE WILLING TO ALLOW ME TO COPY YOUR PAPER FOR DISTRIBUTION TO THE CLASS ON APRIL 12TH FOR POTENTIAL DISCUSSION ON APRIL 19TH. Otherwise I will assume that your paper is confidential.
Study Questions:
External and Internal Links (Pending):
Fluor Daniel, Stone & Webster, eBricks.com, LoopNet, PrimeContract,
Collaborative Structures, Cephren, Citadon, Kaufman Ctr
Title: Accepting Risk and Retaining Learning
Date: April 12
Case: George B. H. Macomber Co 1990
Required Reading: "What's Your Strategy for Managing Knowledge?" "Porter, Michael E., Competitive Strategy, Chapter 9: "Competitive Strategy in Fragmented Industries" (Note: Not "Competitive Advantage")
Optional Reading: "Do We Know How to Do That?" "A Note on Knowledge Management" "Overview of E-Business Models"
Visitor:
Comment: Although now over a decade old, this case study continues to highlight many of the key issues facing construction company executives from firms of all sizes and capabilities. The construction industry is highly fragmented; can this be overcome? Knowledge is precious, especially of historical costs and projected costs; what is the best way to transfer the knowledge? Innovation is difficult; should it be done within the firm or within a separate "skunkworks?"
Assignment: None
Study Questions:
Links: George
B. H. Macomber Company
Title: Can we do this better together than we can do it apart?
Date: April 19
Case: Colliers and the Technology Solution
Required Reading: "Leveraging the Web for Corporate Success" "Collaborate with your Competitors - and Win"
Optional Reading: "Beyond the Exchange: The Future of B2B"; "Group vs Group: How Alliance Networks Compete." These important readings provide further background into collaboration beyond exchanges, and into how alliance networks can provide better results than going it alone…maybe.
Visitor: Leo Linbeck. Leo Linbeck is CEO of Linbeck Construction from Houston, Texas. Mr. Linbeck was the guiding light behind the first AEC consortium, TwentyPounds.com.
Comment: Profitability in the real estate and construction industry may never improve as long as there is severe fragmentation. Big companies are one way to eliminate fragmentation. In concept, consortia are another way to realize the benefits of consolidation. Initial forays might have been motivated by the "easy money" that seemed available up until early 2000. New initiatives will have to show more business purpose. Is it possible to have success with a "federation of entrepreneurs?" How can you motivate members with a short term orientation to share information that benefits the whole in the long term?
Assignment: None
Study Questions:
Links: Links
for this class: Colliers, Twentypounds, Octane, others
Title: Keeping the Information
in One Place
Date: April 26
Case: Collaborative Structures (not in reader - an investment presentation is on the site at Collaborative Structures Presentation
Required Reading: "Marketing the Unmarketable" "The Real Value of On-Line Communities"
Optional Reading: "Leveraging the Web for Corporate Success" "Co-opting Customer Competence." These readings go further into the how Internet businesses can serve new kinds of customers.
Visitor: Arol Wolford. Arol Wolford is CEO of CMD Group, a unit of Reed Elsevier publishing. CMD owns such titles as the RS Means Cost Database series, and the Architect's FirstSource catalog. In class we have discussed the merits of an existing aggregator - like a publisher or software company - helping to overcome the industry fragmentation that the principal firms encounter. This is a different strategy than a consortia of at risk principals.
Comment: Causing the whole project team to work from the same shared database of design and business information would seem to make a great deal of sense. Why doesn't it happen faster? What motivations of the parties are acting counter to "sharing?"
Would CMD have a better chance than Collaborative Structures to succeed in this space?
Assignment: Problem Set #2. Prepare a discussion of pros and cons of shared project databases from the point of view of an entrepreneurial company seeking to address the issues of risk and opportunity that we have studied to date. Consider the study questions as a starting point. This is to be three pages maximum, including any diagrams or tables.
Study Questions:
Links for this class, on the
Links page:
CMD Group
Internal links, on the Links page:
Title: Scale or syndication?
Date: May 3
Case: Citibank, N.A., in China
Required Reading: "Syndication: The Emerging Model for Business in the Internet Era;" "Managing International Alliances: Conceptual Framework" "Global Property and Casualty Industry"
Optional Reading: "The Siam Cement Group" "The End of Corporate Imperialism." These two readings may be of use to those with particular interest in these subjects.
Visitor:
Comment: This case is nominally about retail banking. We will use it to draw parallels to other businesses expanding into developing countries. What is the value proposition for the customers? How can the global business interact with local entrepreneurs and regulators? Might syndication of services be another path for disruptive change in the global real estate and construction industry?
Assignment: None
Study Questions:
Links (pending): AIG, SwissRe,
Bechtel, Flour, Bouyges, Shimizu, LendLease
Title: Dot.coms for a fee? The existing consolidators.
Date: May 10
Case: PrimeContract
Required Reading: "What High Tech Managers Need to Know about Brands."
Optional Reading: None
Visitor: Laurent Dubernais. Mr. Dubernais is Senior Vice President of the PrimeContract Division of Primavera Systems, Inc. Primavera is a leading brand in project scheduling and project control Mr. Dubernais' challenge at PrimeContract is to extend that brand into the e-commerce space.
Comment: While the principal companies in real estate and construction are highly fragmented, many of the firms providing them services are not. The construction scheduling, design software, and construction content business are consolidate around two or three firms respectively. Could those firms be the ones to leverage existing market penetration and brand recognition into new, highly profitable e-commerce and Internet businesses?
Assignment:
Study Questions:
Links (pending): Buzzsaw, Construction.com,
CMD, AIG, SwissRe, Autodesk, Meridian, MSProject, Bentley
Title: Appropriating the Benefit
Date: May 17
Case: The Beck Group: Destini (to be distributed later)
Optional Reading: None
Visitor: Peter Beck. Peter Beck is CEO of The Beck Group, a national real estate and construction services provider headquartered in Dallas, TX
Comment. There are many ways to create value in the AEC Value System. There are also many ways to accept risk or to shed it. There is theoretical benefit to collaboration but it's not clear who drives it or who realizes the most benefit. This case covers a response by an at risk real estate and construction firm seeking to be on the leading edge of technology adoption. What are the issues? How would you do it?
Assignment: Final paper. Ten pages, maximum. Using the information provided regarding Beck and Destini, please write a strategic analysis of the business initiative. In particular, focus on the variety of ways in which Beck can earn fees and be compensated for its investment in Destini. This assignment is the largest single piece of the grade save class participation. However, there clearly is no "right answer." I will be looking for students to demonstrate that they understand the concepts discussed in the course and that they can articulate them in the context of an existing business opportunity.
Study Questions:
Links: The Beck Group, Destini
(on the links
page)