Abstract
While the benefits of experiential learning are well established throughout management and business courses, they are used less often when teaching strategic management. Yet, many concepts in strategy, such as the value chain, are difficult for students to understand. The abstract nature of these topics, coupled with the limited real-life exposure to strategy, make these topics difficult for students to understand and apply. The Golden Ticket exercise is designed to help students correctly apply the VRIO framework and conduct a value chain analysis. This exercise uses redirection as a learning tool, incorporating several independent myopic parts to create ambiguity, where students are initially unable to see how the exercise connects to the “big picture.” It is not until the end of the exercise that students can see how these parts connect (creating the big picture perspective), as they are able to identify the firm’s value creating activities, core competencies, and create the value chain for the firm. This exercise can be used in undergraduate and graduate-level strategy, marketing, and management classes, and can be taught face-to-face or online. Student feedback suggests that this exercise is engaging, practical, and an enlightening way to learn about value chain analysis and core competencies.
Introduction
“Learning is the process whereby knowledge is created through the transformation of experience” (D. A. Kolb, 1984, p. 38).
D. A. Kolb’s (1984) theory of experiential learning provides a holistic integrative perspective on learning that combines experience, perception, cognition, and behavior. While it has been used for over 40 years in management, experimental learning theory has been, and continues to be, one of the most influential theories of managerial learning, and it is considered foundational to many who practice action learning developmental approaches (Kayes, 2002; Rezania & Blyth, 2009).
Experiential learning has become a common teaching tool in many fields of management such as negotiation, leadership, and organizational behavior. Experiential pedagogy fosters the direct application of student experiences with organizational situations, where the goal of an experiential exercise is to enhance learning of essential management skills. In fact, teaching experientially is often the most appropriate modality to help students learn essential competencies and become leaders making intelligent organizational decisions (Lund Dean et al., 2020). Business schools often employ experiential learning as a teaching method (D. A. Kolb, 1984). One of the main intentions of the experiential learning model is to co-create a socially constructed environment where students can simultaneously explore and assimilate new ideas through more authentic practices. There are two goals in experiential learning: one is to learn the specifics of the subject and the other is to learn about one’s own learning process (A. Y. Kolb & Kolb, 2009, p. 58).
Yet, historically, the field of strategy has relied primarily on texts and cases as opposed to experiential learning (Fowler & Scott, 1996; Joshi et al., 2005). Partially responsible for the lack of experiential exercises in strategy is that over the past few decades, the field of strategic management has consistently grown in intensity and complexity, resulting in an increasingly intense and fast-paced course (Joshi et al., 2005). This has made teaching strategy especially difficult as instructors must choose which concepts to focus on, and which topics are either less essential or covered sufficiently in other classes. Allocating and efficiently using contact time with students is a consistent challenge as instructors strive to ensure that complex concepts are sufficiently discussed and understood. The abstract nature of these topics coupled with the limited real-life exposure to strategy in general, make these topics particularly difficult for students to understand and apply (Greiner et al., 2003; Meilich, 2022).
Learning how to conduct an analysis of the internal environment of the firm is a key objective in strategic management as students learn how to apply the VRIO framework to identify the firm’s core competencies, and to understand how these core competencies are deeply integrated into the firm’s value chain. The value chain is a conceptual framework used by managers and consultants to analyze firm performance and is key to improving business performance (Porter, 1985, 1991, 1996a). Value chain analysis is widely used in business schools, especially in strategic management; though it also applies in many diverse fields including entrepreneurship, management, accounting, production management, logistics, and marketing (Sheehan & Gamble, 2010).
The VRIO framework, also called the VRIN framework in some textbooks, is the foundation for competitive advantage. It is used to identify resources and capabilities that are “
Experiential learning focuses on the process of learning and provides a focused and efficient means to help students understand the link between theory and organization (D. A. Kolb, 2015; Meilich, 2022). The central theory behind experiential learning is that different knowledge can be gained through active participation in, as opposed to passive reception of, learning and concrete experience can stimulate learners to reflect upon that experience (D. A. Kolb, 1984). Lund Dean et al. (2020) discuss the importance of experiential learning for business school students, as the interplay between expectation and experience fosters learning.
To help students better understand their own process of learning and to teach these critical concepts in strategic management, I created the Golden Ticket exercise to help students understand and apply the VRIO concept and recognize how these concepts integrate into the value chain. This exercise is designed to use redirection as a learning mechanism to challenge student’s predisposition and assumed knowledge. Redirection allows the instructor to clearly state the objective of the exercise; but the path to get to these outcomes may remain veiled as students experience reoccurring redirection (i.e., repeatedly starting something over with a different path to the goal). By creating a setting that encourages “tunnel vision,” instructors can create and exploit students’ myopic viewpoint so that they do not realize what they are learning until the final reflection at the end of the exercise.
Johnson and Johnson (1982) postulated that experiential learning has the potential to affect a learner in three different ways: changing cognitive structures, altering attitudes, and expanding portfolios of skills. In the “Golden Ticket” experiential exercise, when students see how all the individual pieces fit into the whole, cognitive structures shift as students fully understand the big picture. Student attitudes change from feeling overwhelmed and inundated by all the pieces of an internal analysis to excited and assured as they comprehend these concepts. Lastly, students gain the skills to complete an internal analysis of a firm as they understand how a firm’s core competencies integrate into the value chain to create a competitive advantage.
The Golden Ticket exercise is designed as a parody based on Roald Dahl’s 1964 children’s novel, “Charlie and the Chocolate Factory” (later made into the movie “Willy Wonka and the Chocolate Factory”). In the storyline, Willy Wonka has hidden five golden tickets inside chocolate bars. The finders of these tickets will receive an exclusive tour inside Willy Wonka’s elusive chocolate factory and a lifetime of chocolate. However, a saboteur has created counterfeit tickets and intends to steal Willy Wonka’s recipes. In the Golden Ticket exercise, students search to identify the “real” Golden Tickets, which are in fact, the source of their firm’s competitive advantage. Throughout the exercise, students use gold (paper) tickets to identify the firm’s key resources and capabilities, connect these to the firm’s value chain, and eventually find the source of the firm’s competitive advantage when they identify the firm’s two to four core competencies. . .. The real golden tickets. (This context has been received well at both the undergraduate and graduate level. However, an alternative setting for this exercise for more mature audiences, such as executive education, is to use an Olympic-style option where students identify bronze, silver, and gold tickets. See Appendix C for more details.)
The following article will first outline the importance of experiential learning in management, the use of deception and propose redirection as an alternative teaching mechanism. Second, I will discuss the role of the value chain and core competencies when conducting an internal analysis of the firm. Third, I will introduce the “Search for the Golden Ticket” exercise and demonstrate the application and effectiveness of using this tool when teaching either face-to-face or online classes.
Experiential Learning, Deception, and Redirection as Teaching Mechanisms
To help students learn and understand difficult concepts in business and strategy, instructors need to bring these concepts to life, connecting strategic tools and theories to “real world” organizational contexts. While the case method is the most commonly used modality to teach concepts in strategy, experimental exercises are an appropriate and efficient tool to complement these methods (Greiner et al., 2003; Joshi et al., 2005; D. A. Kolb, 1984). Experiential learning focuses on the process of learning by using a multisensory approach and is a catalyst for an interactive process to facilitate learning.
Deception is sometimes an important part of experiential exercises. Experiential exercises should challenge students’ predisposition and assumed knowledge as “it is in this interplay between expectation and experience that learning occurs [and] any experience that does not violate expectation is not worthy of the name experience” (D. A. Kolb, 1984, p. 41). The problem is that students think they understand these concepts and they don’t know what they don’t know. Educators strive to not only implant new ideas but also dispose of or modify old ones. When students walk into an exercise, certain that they know the outcome of the experience, this mindset blocks learning (D. A. Kolb, 1984). Directly challenging these beliefs often results in resistance. Experiential exercises can be used to indirectly challenge students’ old beliefs or modify old knowledge and inspire new beliefs.
Exercises that utilize deception may require instructors to employ “creative manipulation,” provide or infer disinformation, draw on power dynamics, or withhold information, in order to push students outside of their comfort zones to create powerful learning opportunities and achieve learning outcomes. Deception can be useful when the goal is to move past superficial learning and help students immerse themselves in their learning topic; yet the use of deception in the classroom has been a controversial topic in recent literature (Bradford, 2019; Lund Dean & Forray, 2016; Wright et al., 2019). The trade-off when using deception is short-term “pain” during the activity that pays off in long-term appreciation of complex topics. These short-term deceptions done entirely within the classroom setting, accompanied by a formal debriefing can have significant pedagogical value (Lund Dean et al., 2020). However, are there ways to achieve similar learning objectives without the use of deception?
This article proposes a possible alternative to deception in experiential learning, as demonstrated via the Golden Ticket exercise, by allowing ambiguity and using reoccurring redirection (as opposed to misdirection) to teach new concepts. Reoccurring redirection challenges assumed knowledge without misdirection, manipulation, providing disinformation, or relying on power dynamics. By using four separate semi-independent or ambiguously connected activities, instructors can capitalize on student’s myopic viewpoint, making it difficult for students to see the big picture until the end of the exercise.
Core Competencies and Value Chain
Business experts in strategy and management are constantly advising firms to develop core competencies and create a competitive advantage (Mooney, 2007). Andrews (1971) introduced the idea of core competence and defined it as “what the company can do particularly well” (p. 46). Other scholars have extended this logic to suggest that core competencies are building blocks for the firm’s strategy (cf. Collis & Montgomery, 1995). Prahalad and Hamel (2003) describe core competencies as a root system that “provides nourishment, sustenance and stability” to the firm (p. 83) and that core competencies are the primary activities that firms utilize to leverage to achieve a competitive advantage. However, these competencies can be difficult to identify.
The real value of core competencies is realized when a core competency creates a basis for competitive advantage. However, this does not always happen. This is often difficult for students to understand. Core competencies are a source of the firm’s competitive advantage but having a core competency does not mean the firm has a competitive advantage. Sustaining a competitive advantage (the organizational factors that enable a firm to outperform competitors) should be the central activity of the firm (Porter, 1985). The firm’s competitive advantage is rooted in its ability to leverage its internal strengths in response to external pressures and opportunities. For a firm to fully leverage its core competencies to achieve a competitive advantage, a firm must fully integrate these activities into its value chain.
Porter (1985) value chain emphasizes that organizations create value through activities within the organization. The value chain is frequently used by instructors who teach principles of marketing, management, and strategic management, as this is considered a critical tool in understanding how organizations create customer value. The real strength of a value chain analysis is not the firm’s traditional competencies but the knowledge and understanding of what the customer needs to increase value in their value chain (Webb & Gile, 2001). Porter argues that the value chain can be used to analyze where firms may decrease costs and/or increase customers’ willingness to buy. As students are better able to understand the value chain, they better understand how the firm creates value and lowers costs through the coordination and integration of activities (Weinstein & Barrett, 2007).
The problem that instructors face when teaching these concepts is there is often a disconnect between the concepts of core competencies and the value chain. For example, students often don’t realize that a core competency is created by multiple integrating and coordinating activities within the firm’s value chain. So even when students learn to identify a firm’s core competencies, they don’t fully understand how these activities integrate and coordinate into the firm’s value chain and form the firm’s business level strategy. The following exercise helps students better understand these concepts.
Activity Overview: The Search for the Golden Ticket
This experiential exercise is designed so that when the class period is over, students will have a working draft of the value chain for a firm and will have identified the firm’s VRIO activities and core competencies. Since many strategy courses have a semester-long team project where teams conduct an extensive external and internal analysis of a firm, I suggest each team focus on the firm specific to their team project. Further, using a team-based approach to the exercise encourages peer-to-peer learning.
The exercise is built in four parts. While teams all start at the same time, they often complete each part at different paces. This allows the instructor to work individually with each group and provide immediate feedback. In part one of this exercise, teams of students are asked to first identify all the activities of the firm that create superior Value for the end user and use the VRI funnel to identify the firm’s key activities. In part two, students link each activity to specific parts of the value chain (i.e., technology and marketing). In part 3, students create 3 to 5 “buckets” of linked activities and rename each bucket. Finally, in part four, we put all the pieces together creating the “big picture,” as students identify the core competencies of the firm (i.e., the “real” Golden Tickets) and connect the activities that create these core competencies to the value chain.
A key part of the experimentation stage is checking or verifying the correct method and capturing active information for subsequent stages (D. A. Kolb, 1984; Miller & Maellaro, 2016). This exercise was built with that in mind as the check-in with the instructor after each stage is vital. This assures the quality and correct application of the exercise. At the end of the exercise, students can see the big picture of the firm’s value creating activities, identify the firm’s core competencies, and create the value chain for the firm. Further, instructors can refer to this exercise and use this as an additional tool when discussing business level strategy.
Learning Objectives
The main learning objectives of this exercise are:
To develop students’ ability to apply the VRIO framework
To conduct a value chain analysis of a firm
Subsequent objectives are the following:
To apply the VRI funnel to a firm’s resources and capabilities
To understand how the VRI activities link to the value chain to create the “O”rganization of VRIO
To understand how the firm’s activities within the value chain coordinate and integrate, creating the firm’s core competencies and competitive advantage
When applying Bloom’s Taxonomy of Learning, we can see in Figure 1 that the pre-exercise objectives begin at the bottom of the pyramid and steadily rise to the top. Table 1 has a detailed description of each stage of the exercise (pre/during/post) and describes the objectives at each stage of learning.
Bloom’s taxonomy (Krathwohl, 2002).
Pedagogical Objectives and Learning Outcomes.
Target Audience
The Golden Ticket exercise is designed for use in undergraduate strategic management classes. It has also been used in graduate classes at early stages in the MBA program. However, this exercise can also be applied in principles of marketing classes, general management classes, and any course focused on understanding how organizations create customer value.
Teaching Modality and Class Size
This exercise can be taught face-to-face and synchronously online. To teach online, participants will need to utilize video conferencing software that allows breakout rooms (i.e., Zoom or MS Teams) and an online whiteboard program such as Miro (www.miro.com). Miro is free for basic users and has a free educator and student plan (https://miro.com/education-whiteboard/). A short tutorial (Miro 101) explains the basic functions of the program. While there is also an app, some functions, like labeling sticky notes may not be available in this format. This activity can be used in various class sizes. Since the instructor meets with each team three times during the exercise, the best results have six teams in total per class.
Timeline
Instructor Preparation and Class Size
Before class begins, the instructor should create the “golden tickets” or small squares of paper. Yellow or gold card stock paper cut into approximately 3″x3″ squares or yellow Post-its® are ideal as this fits the theme of the exercise. Each team should have a minimum of 12 to 18 cards with extra cards available upon request. For example, a class with five teams would need approximately 75 to 80 cards total. Additionally, since the exercise focuses on finding a golden ticket, instructors may want to have a candy reward or “golden” extra credit tickets for completing the exercise. Students have enjoyed the exercise both with and without the reward.
Class Concepts Preparation
Generally, I suggest planning two class periods, approximately 75 to 90 minutes each, to teach the internal environment when using the Golden Ticket exercise, or one 3-hour period split into two parts (content + exercise). The first class can be synchronous or asynchronous. Here, instructors should introduce key topics in the internal environment (i.e., resource-based view, resources, capabilities, core competencies, and value chain primary and support activities) and discuss the assigned readings. I have found that most textbooks provide a good overview of the value chain analysis. Assigned readings could include one or more of the following articles on the value chain and competitive advantage:
“Creating Competitive Advantage” by Ghemawat and Rivkin (2006)
“The Value Chain and Competitive Advantage” by Porter (2001, pp. 50–66)
For the VRIO framework, I suggest one of the following:
“Looking inside for competitive advantage” by Barney (1995)
“Firm resources and sustained competitive advantage” by Barney (1991)
For face-to-face classes, a combination of traditional lectures and student-led discussion of the article they read for class works well. For example, to prepare for the first class, students read Barney’s (1995) paper. Students often like this article due to the practical application of the concepts to real-world examples and the clear incorporation of the “O”rganization of the VRIO. Additionally, one method to quickly assess whether students are reading this paper is, at the beginning of class, having students try to list all the companies they could think of that are in the article. Students should be able to provide a minimum of three firms.
Prior to the second class and to prepare for the class exercise, students watch a short video (c.f. https://www.youtube.com/watch?v=RaJS8XuU3G4) describing how to use the VRI funnel (See Figure 2). The funnel technique has been applied and used to help students understand other concepts such as assessing market dynamics and situations (Weinstein & Barrett, 2007; Weinstein & Pohlman, 1998). The funnel represents a downward flow with each successive level being a requirement of the above level. The four levels of the VRI funnel are apparent as the dotted lines between levels indicate that each successive level is dependent on the previous level. For example, without value, the rarity of a resource or capability is meaningless. Even if the resource is rare, if no one wants it, it provides no value. Similarly, if anyone can access that resource, it doesn’t matter that it can’t be easily replicated.
VRI funnel.
Instructors could have students individually identify the core competencies of the firm in advance, as this will provide a pre- and post-assessment benchmark. The risk of this additional assignment is that it may frame students’ expectations and create a learning block during the exercise.
Case Context and Preparation
To complete the exercise, students must research the strengths and weaknesses of the company they will analyze. How students prepare for the class depends on which of these contexts the instructor uses. There are three contexts that instructors can choose from to apply the exercise:
The first option requires student teams to apply the “Golden Ticket” exercise to each team’s uniquely assigned company (i.e., the final project/semester-long company analysis).
A second option is to use a universal example in class, such as following the example of Caterpillar.
Finally, instructors can assign a case study, such as those found on the Harvard Business School Press website (https://hbsp.harvard.edu), and apply the information found in the case during the exercise.
The unique value of the exercise lies in the process by which students come to identify a firm’s core competencies, whether the exercise is taught using a unique company, case, or a class-led universal example. Context 3 is the simplest and most uniform option, using a written case analysis that provides one source from which all the information about the firm can be identified. To prepare for the exercise when using a written case study, students will need to read the case in advance.
In contrast, selecting context 1 or context 2 requires students to directly research one company, often exploring several different sources for this information. When the course is designed with a semester-long company analysis, students have noted that using the first option is extremely beneficial, as by the end of the exercise, most teams have identified 1 or 2 core competencies of the firm. In this scenario, it is common for each team to have a different company that they are researching. Using context 1 does present a challenge for the instructor, as often the instructor has to work “on the fly” with limited knowledge about the firm. However, the process of understanding how to identify the firm’s core competencies and value chain is the goal, not the outcome per se. When students understand the process, they can use these skills in the future. Thus, I explicitly explain at the end of the exercise that as students further research their company, they may identify additional core competencies or those they identify may change based on their research.
To prepare for both context 1 and context 2, students will need to research the company’s key resources and capabilities. When first conducting the exercise, instructors may want students to complete this research in advance, no matter the class length, to allow ample time for the assignment. In a 75+ minute class, I have found that students are able to do most of this research in class and little pre-work is required. However, for shorter classes, I recommend assigning this research in advance. I often suggest students take a divide-and-conquer approach to this research. (See Appendix A for a sample assignment page.) I ask that each student creates a list of 8 to 10 key resources and/or capabilities of the firm using the following resources:
1. Research the company website to identify the company’s strengths.
2. Review the Business Description or first 15-20 pages of the company’s 10-K (the comprehensive performance report publicly traded companies must file with the Securities and Exchange Commission) and skimming the titles of the risk factors in the second section of the 10-K.
3. Conduct a broad internet search exploring the company’s strengths and weaknesses using keywords such as “awards,” “reputation,” and “strengths.” a. While a broad internet (Google) search may result in the use of some unpreferred websites or sources (i.e., SWOT analysis) this search often serves as a starting point for students to then explore more established and well-founded sources. Students can later explore these concepts in more depth using more reliable sources for citation.
4. Other resources could include library databases. This option is contingent on what resources and databases are accessible to each student. Some options could include Nexus Uni, ProQuest, Business Source Premier, etc.
Outline of Time
The exercise is designed to be completed in one 75- to 90-minute class, however, the parts of the exercise could be broken into two 45 to 60 minute classes. Additionally, having students conduct their company research in advance, requiring that each student come to class with a list of 8 to 10 key resources and capabilities will also allow more time for the exercise in shorter class periods. The longer class times allow for a group discussion and reflection while the shorter class times often necessitate a written individual reflection.
I. Introduction (5–10 minutes)
II. Part 1 Activity (30–45 minutes)
III. Part 2 Activity (10–15 minutes)
IV. Part 3 Activity (10–15 minutes)
V. Part 4 Discussion (5 minutes)
VI. Reflection
VII. Class discussion (10–15 minutes) or
VIII. Written assignment
After completing each part, student groups check in with the instructor for the next part’s instruction. While students all begin the activity at the same time, completion of each part becomes staggard as each group completes each activity at a different pace. This allows the instructor to meet with each group to provide individual comments.
Exercise Instructions
On the day of the exercise, students are requested to sit with their teams when they arrive to class. The instructor then tells each student group what company they will be using in the exercise. Since many strategy courses have a final team project, where teams conduct an extensive external and internal analysis of a firm, I suggest having students focus on the firm for their team project. This direct application of the exercise to students’ final projects increases interest and applicability of the exercise. Start the class with a quick reminder about the funnel from the video lecture. It is recommended that the instructor draws the funnel and the generic value chain on the board so students can continuously reference it, even when the instructor changes the PowerPoint.
Introduction
The instructor sets the tone of the exercise by explaining to students that they are searching for the golden ticket and notes the reward for completing the exercise (if the instructor includes a reward). Instructors may wish to ask, “How many of you are familiar with the story of Willy Wonka and the Chocolate Factory?” Then, use this analogy to explain that there are anywhere from two to four Golden Tickets yet to be discovered that will allow them to enter Dr./Professor [Instructor’s Name] Emporium. Their job is to find the Golden Tickets allowing them to enter. I use the following text on a PowerPoint slide while explaining these instructions.
You are searching for a golden ticket that will allow you to enter
Part 1: Applying the VRI Funnel
Once the stage is set, the instructor can explain Part 1 of the exercise. For Part 1, students need to identify 12 to 18 value creating activities of the firm. During this stage, students are encouraged to use their computers, tablets, or phones to research their firm and identify the firm’s key resources and capabilities. Students then determine if these activities offer superior value to the end consumer. If so, students write the name of the resource or capability on the yellow “ticket” and write the letter “V” at the bottom. After listing all the value-creating resources and capabilities, students move to the second level of the funnel. In this stage, students identify all the activities that are both value-creating and rare and add an “R” to the yellow ticket. Finally, students move to the last stage of the funnel by taking only the tickets that are VR and identifying those resources and capabilities that are “VRI”. The following is an example of the PowerPoint text for Part 1 (see Appendix B):
PART 1 – Identify the names of the tickets
Discuss the resources and capabilities of your company and identify 12-18 key activities that add Now identify which of these activities are Looking ***Note: You must go in order. . . if a capability is rare but has no value, does it really matter? When finished: Talk to your instructor to discuss the VRI core competencies.
For instructional purposes, the company example of Caterpillar Inc. is used throughout this article. The following is an example of Part 1, applied to Caterpillar Inc. (See Figure 3). However, while this example includes only eight tickets, ideally, students will have identified a minimum of 12 tickets (key resources and capabilities).
Part: examples of Caterpillar’s “golden tickets” applying the VRIN funnel.
After completing Part 1, students meet with the instructor for feedback. The most common error is for students to identify an activity at VI or VIN. When this occurs, instructors can ask, “If something isn’t rare, but can’t be copied or substituted, why wouldn’t you want the original?” Often at this point, students have a lot of Vs, some VRs, and only a couple of VRIs. Some teams get frustrated as their company may not have many, or any, VRI. After discussing this, they often realize that this could be the reason that their company is having certain problems. Other possible issues at this stage include students struggling to identify activities, identifying too few tickets, and vaguely identified activities. See Appendix D for common issues and suggested solutions for instructors.
Part 2: Linking Activities to the Organization
After the first team has completed Part 1, change the PowerPoint to Part 2 Instructions. If not yet drawn, instructors should draw the value chain on the board. (See Figure 4).
PART 2 – Evaluate Each Ticket Once you find a
This is the first “redirection” moment of the exercise where students essentially start the exercise over with the following changes. Students are told to essentially go back to square one and ignore everything they did related to VRI. For example, instructors may state,
“First, forget everything you just did related to your classification of VRI. For this next section, you will use all your tickets in the second part (all the V, VR, and VRI tickets). The next thing we will do is identify where all these activities fit into the value chain and write this on the back of the ticket. You may find that some of these activities will fit into multiple parts of the value chain.”
It is imperative to remind students that they need to do this for every ticket, no matter their VRI classification and to write this on the back of the ticket (the blank side). For every ticket created in Part 1, students will identify where each resource and capability fit into the value chain. Instructors may want to do a couple of tickets with each team so that they realize they may need to link some activities to more than one part of the value chain. For example, Coca-Cola’s marketing capability is not only linked to the primary activity of marketing but also to history (infrastructure). This typically takes teams very little time and the activity speeds up from here. Once students complete this part, they meet with the instructor to discuss what they did.
The value chain.
Students may convey some confusion at this point as they don’t understand why they are ignoring Part 1. Instructors may wish to state that it’s okay if they are a little confused and simply encourage them to move forward or simply to “not worry about it at this time as it will make sense at the end.” This confusion, the student’s inability to see the big picture in the exercise, is important; this is the first time the instructor uses redirection to challenge students’ predisposition to the theoretical concepts and their assumed knowledge. See Figure 5 for an example from Caterpillar.
Part 2: example of Caterpillar’s “golden tickets” link to the value chain.
As teams complete Part 2, it is important for instructors to meet with each team to review their classifications linking each activity to the value chain. Instructors should review each ticket to make sure that each activity listed connects to all the parts of the value chain. If there are multiple errors, I often point out a couple and then have students re-check their tickets. For example, in the example of Caterpillar, the ticket “Known for Quality Products” is connected to several activities including Procurement, Inbound Logistics, Manufacturing, and Marketing. Most students will understand the connection between product quality, marketing, and inbound logistics but may miss the connection to procurement and manufacturing. Instructors could ask, “How do the relationships with suppliers impact the quality and reliability of raw materials?” and/or, “Does TQM or 6 Sigma impact product quality? Where would that fit in the value chain?” By briefly reviewing each ticket the instructor can explain the connection between the activity and where it fits in the value chain. Students are often quick to grasp their errors with minimal guidance once the instructor identifies the first few errors. After the instructor has met with each team and reviewed their tickets, the teams move on to Part 3.
Part 3: Creating and Naming Buckets (Identifying Core Competencies)
The purpose of Part 3 is to identify the firm’s core competencies by combining connected activities into groupings. After Part 2 is completed, the students meet with the instructor. Again, redirection is used as the instructor states that students should ignore what they did in Part 1 (V, VR, and VRI classifications) and Part 2 (how each activity connects to the Value Chain). To begin, the instructor has students flip the cards back over (to the VRI side) and instruct students to identify “buckets” or “themes” among their cards. Occasionally, one activity connects to more than one bucket. Again, students should ignore any previous VRI classification. For example, the instructor may state,
“Can these activities be grouped together? Or are there activities that “play well with each other”? You want to identify the “themes” or connections between these activities. Some of these activities may be completely their own thing, but some of these may connect or contribute to the success of different parts.
Your next job will be to identify which activities connect, and to put these into “buckets” or create piles. You may have anywhere from three to six buckets in the end. Some of these buckets may have only one ticket while others may have four or more. Once you have created your buckets, see if there is a better name that describes all these activities, and write down that name on a new ticket. Decide if this new ticket is V, VR, or VRI, and then call [the instructor] back to your group.”
At this point, I provide each team with four or five new, blank tickets. Instructors can further guide students by identifying connections for one bucket and have them do the rest. For example, if students have identified that some of Coca-Cola’s key resources and capabilities include their reputation, marketing capabilities, brand image, and history, they could combine these together into one pile as all these activities are highly integrated into each other. Students could then rename that bucket Coca-Cola’s “international brand recognition.” Once this is completed, students should let the instructor know. Figure 6 provides a detailed example of the final classification and renaming of “buckets” using Caterpillar Inc.
Part 3: example of Caterpillar’s “golden tickets” creating “buckets” and identifying core competencies.
Part 4: The Big Picture
The last part, while being the shortest, is the most important. Here, the instructor meets with the team for the final time to fill in the pieces of all three parts and connect these parts to the big picture. Students now have new golden tickets with new names describing each bucket full of activities. Each new golden ticket should be labeled as V, VR, or VRI. Some of these new tickets will still be labeled V or VR, but sometimes a bucket with only VR becomes VRI when these parts are put together. Students have now identified the core competencies of the firm as these new VRI tickets are the real “Golden Tickets.”
The final step is to connect these integrated activities to the value chain. Keeping the cards in their relative groups, students flip over the cards. Most of the time, those buckets that have been identified as core competencies are connected to multiple parts of the value chain. Buckets that are not core competencies often connect to only one or two activities.
Instructors should emphasize that in order to be a core competency, these activities are deeply integrated into multiple areas of the firm. This helps students understand why the “O” is so important as complexity is what makes a core competency and why these activities are so difficult to copy. At the completion of this part, students can present their newly created golden tickets identifying the firm’s core competencies, and “enter the emporium.” I encourage students to take a picture of their final buckets so they can apply this material to their final project.
Debrief and Reflection
Student reflection is an essential component of the exercise as this allows learners to draw conclusions that will guide them toward new assumptions and more accurate application of these strategy tools. Mezirow’s (2000) transformation learning theory posits that learning occurs when students can reflect on the disconnection between their previously held assumptions and what they actually experienced. Depending on the time available, instructors can either facilitate class discussion about the exercise or assign an individual reflection paper. In either case, instructors can ask reflection questions such as:
What was the main point of the exercise?
What did you learn overall?
How did (or didn’t) the exercise help you understand the course concepts: VRIO and Value Chain? Why is the “O” a critical final piece of this exercise? How do VRIO and Value Chain connect?
Students quickly see that the “best” activities are deeply “chained” or integrated into the firm’s structure at many points. This is the last part of the VRIO—the Organization. Students then see that it is not just having a resource or capability but how that activity fits and is integrated into the value chain.
Addition Topics: Organizational Fit and Business Level Strategy
In addition to these questions, instructors can reiterate that the purpose of the value chain is to link the value creating activities to create core competencies for the firm. It isn’t any one, single activity that leads to a core competency, but the integration and coordination of these activities. If students have read the article, “What is Strategy?” by Porter (1996b), I often refer to when the article discusses the difficulty of imitation. Porter states,
“The probability that any competitor can match any activity is often less than one. The probabilities then quickly compound to making matching the entire system highly unlikely (.9 x .9 =.81; .9 x .9 x .9 x .9 = 66 and so on) . . .” (p.13-14).
At this point, students often better understand the importance of both first- and second-order “fit” (Porter, 1996b, pp. 10–14) and how the integration of these activities creates barriers to duplication.
Instructors may also choose to integrate concepts of business level strategy into the discussion by exploring how these integrated activities create the firm’s business level strategy. Business level strategy is created when firms use “an integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets” (Hitt et al., 2020, p. 111). Once students have a basic understanding of business level strategy this exercise can be used to exemplify these concepts. For example, once students understand the principles of cost leadership vs differentiation strategy, students can get back into teams to review the firm’s previously identified resources and capabilities and discuss how (and if) these activities “fit” toward the firm’s business level strategy. Additionally, instructors can further elaborate on the concepts of “fit” as discussed in Porter’s (1996b) paper “What is Strategy?”. Porter describes first-order fit as “general consistency” and second-order fit as “reinforcement” of the business level strategy. By referring to this article and talking with their teammates about how the firm’s activities “fit” toward the firm’s business level strategy, students can connect the readings and theory to the application. Example reflection questions could include: The core of business level strategy lies in the integration and coordination of the firm’s activities to create a competitive advantage. Consider the value chain activities you identified during The Golden Ticket exercise.
What activities of your company support its business level strategy?
How do the activities of your company “fit” at the first and/or second order? What activities are consistent with the company’s business level strategy? What activities reinforce each other?
Online Application
To teach online, students and the instructor will need to utilize video conferencing software that allows breakout rooms (i.e., Zoom or MS Teams) and an online whiteboard program such as Miro (www.miro.com). The specific template and functions needed for this exercise include the funnel template, sticky notes, and the sticky note label. Students can use the yellow sticky notes as their golden tickets. The text function allows team members to label the sticky note with the activities and note V, VR, and VRI. Finally, the label function within the sticky note function can be used to identify the connection to the value chain activity. See Figures 7 to 9 for examples using the Miro app.
Part 1 of golden ticket exercise using miro: creating the activity funnel.
Part 2 of golden ticket exercise using miro: adding tags to all activities.
Part 3 of golden ticket exercise using miro: creating buckets of interconnected activities.
Assessment of Student Learning
In the past 8 years, four instructors at five different universities have successfully run the exercise in 50+ classes of undergraduate and graduate business policy and strategy students. Anecdotally, instructors have noted a significant difference in student comprehension and ability to correctly apply these concepts. However, to better assess the exercise’s efficacy, pre- and post-tests were administered to assess student learning using both qualitative and quantitative measures. One instructor (not the author) volunteered to administer the exercise and assess student learning in two of their strategic management classes, creating a sample of 62 students in 2019.
Quantitative results further support the efficacy of the exercise. One day prior to the exercise and immediately after completing it, students were asked to complete an online survey, using a Likert scale of 1 to 5, to rank their confidence and ability to apply the VRIO framework and identify a firm’s value chain. The survey posed three questions focused on the VRIO tool and three questions focused on the value chain tool. Table 2 provides the question prompts, means, standard deviations, and results of the paired samples t-test. In addition to the individual scores for each question, the calculated average for questions 1 to 3 (VRIO Framework) and questions 4 to 6 (Value Chain Analysis) are provided. After the exercise, again using a Likert scale of 1 to 5, students were asked to rank the extent to which the exercise helped them understand the concepts and their overall enjoyment of the exercise. Table 3 provides these results.
Pre and Post Test. Pre- and Post-Test Descriptives and Paired T-Test Results.
Scale 1 to 5 where 1 is “Not comfortable at all” and 5 is “Extremely comfortable.”
Scale 1 to 5 where 1 is “No Confidence” and 5 is “Complete Confidence.”
Enjoyability and Usefulness of the Exercise.
Scale 1 to 5 where 1 is “Not Helpful at All” and 5 is “Very Helpful.”
Scale 1 to 5 where 1 is “Did Not Enjoy at All” and 5 is “Greatly Enjoyed.”
Scale 1 to 5 where 1 is “Boring” and 5 is “Very Interesting.”
Paired samples t-test results find significant improvement in students’ ability and confidence to identify a firm’s core competencies using the VRIO tool and to identify a firm’s value chain. (See Table 2.) The overall VRIO Framework (Q1–Q3) finds an increase in the average change of students’ ability and confidence before (M = 2.43, SD = 0.761) and after (M = 3.87, SD = 0.516) the exercise; t (62) = 15.45 with a mean difference of 1.44, p < .000. Similarly, there is a notable change in the average of students’ ability and confidence for the Value Chain Analysis (Q4–Q6); t (62) 10.644, p < .000 before (M = 2.67, SD = 0.578) and after (M = 3.78, SD = 0.578) the exercise with a mean difference of 1.11. Overall values show that there is a positive change in students’ confidence and ability to conduct an internal analysis of the firm following the exercise.
After completing the exercise, students were asked to assess the “helpfulness” of the exercise and whether they enjoyed the experience. (See Table 3.) Questions asked, “How much did the exercise help you understand how to perform a value chain analysis?” (M = 4.04, SD = 0.781) and “How much did the exercise help you understand how to use the VRIN/O tool?” (M = 4.26, SD = 0.729). Lastly, students noted that they “enjoyed” the exercise (M = 4.26, SD = 0.828) and found the exercise “interesting” (M = 4.18, SD = 0.850).
In addition to the quantitative assessment, both before and after the exercise students were asked a series of qualitative questions. Prior to the exercise, students were asked, “How do you identify a firm’s core competencies,” “Why does VRIO matter?” and “Why does the O matter when determining core competencies?” They were also asked to identify the core competencies of the firm that their team was researching for their final project. Before completing the exercise, many students suggested that core competencies were found in the mission and vision statement or by looking at the firm operations, but few discussed the importance of applying the VRIO framework. Students often demonstrated a vague knowledge base but struggled to apply the concepts.
After completing the exercise, students were asked, “What did you learn from the exercise?” and “What did you learn about VRIO and how this relates to core competencies?” Many students noted that what they thought were the core competencies for their firm changed following the exercise. Students’ comments stated that they better understood the difference between primary and support activities, and frequently noted that interconnectivity of the core competency into the organization is vital to competitive advantage. Several students explicitly stated that they were more comfortable and confident applying the VRIO framework and creating the Value Chain diagram after participating in the exercise. For example, one student noted, “I wasn’t comfortable with this concept until we worked through it in class. Now, I understand what it stands for more and how it relates to our company. After the discussion, I was able to relate our core competencies to VRI and O and describe how they fit in that.” Another student stated, “I developed a deeper understanding of core capabilities because of the Golden Ticket activity. I already had, what I now know to be a basic understanding of the definition, but after receiving the feedback, researching, and bouncing information off of my group members, I now have a more complex understanding of just how crucial core capabilities are to an organization.”
Conclusion
This exercise provides several important contributions to the field of strategy. First, this exercise presents a new and novel experiential exercise to teach some of the core concepts in strategic management. In the Golden Ticket exercise, students apply the VRIO concept and learn how these concepts are integrated into the value chain. As students work on three semi-independent tasks, (seemly) starting the exercise over at the beginning of each part, instructors can encourage a “tunnel vision” mentality (focusing only the activities within each part) to create a temporarily myopic viewpoint. This ambiguous connection between parts makes it difficult to see the big picture and creates a setting that challenges student’s predisposition and assumed knowledge, both of with are critical aspects of any experiential exercise. It is only at the end of the exercise that students see the big picture and understand how all the three parts of the exercise interact.
As business schools continuously face increasing institutional pressures from accreditation organizations and employers to modernize the teaching curriculum and incorporate experimental learning (Lebron et al., 2020), more options and methods to these concepts are needed. Yet, there have been far fewer experiential exercises available in strategy, compared to other management fields. While using experiential exercises to teach complex concepts is common in many subject areas in management, case studies have been the dominant teaching tool when teaching strategy. Yet, Joshi et al. (2005) argue that cases alone are insufficient in “bridging the gap between these students’ knowledge, experience and preparation for the real world” (p. 676). These authors suggest that the case method (which fosters inductive learning) should be complemented by experiential (deductive) learning. The Golden Ticket exercise helps to address this need for complementary learning tools by providing instructors with an exercise designed to teach strategic management concepts.
Second, this article presents instructors with new tools and methods to employ in online learning. While the COVID-19 pandemic drove schools and universities toward online education, post-COVID, some of these changes provided beneficial pedagogical alternatives. However, one remaining challenge for the online classroom is student-to-student engagement. This exercise incorporates specific tools that can be used for teaching experiential exercises or other group collaboration-based activities online. While this article utilizes the platform Miro.com, other alternatives such as Microsoft Whiteboard, Mural, and Conceptboard have similar features. These platforms can be used to teach and execute other highly collaborative exercises and concepts such as Design Thinking or Systems Thinking.
Finally, this article contributes to the field of pedagogy by utilizing redirection as an alternative to deception-based learning in experiential exercises. The Golden Ticket exercise does not require the instructor to misdirect students, withhold or conceal information, or employ manipulation. For example, at the beginning of class, the instructor could say, “Today we are going to identify your firm’s Core Competencies. The purpose of today’s exercise is to create the map to get us there.” Even knowing the purpose and end outcome of the exercise will not compromise the learning objectives. Students may know the goal of the exercise, but they are unable to see how the path to this goal is created. Thus, instructors can use redirection as a learning mechanism to create ambiguity and temporarily short-sighted vision in experiential exercises.
Footnotes
Appendix A
Appendix B
Appendix C
Appendix D
Common Issues and Suggested Solutions.
| Part | Issue | Solution | Notes |
|---|---|---|---|
| Part 1 | Students struggle to identify activities | Provide direct assistance with keyword suggestions. | Search keywords/phrases such as: • “Company” strengths • “Company” awards • “Company” reputation • “Company” rank • “What is ‘Company’ known for” |
| Part 1 | Students create too few tickets | Provide 15–18+ blank tickets at the beginning of the exercise. | If too few tickets are provided, students do not tend to ask for more. Provide more tickets than needed. |
| Part 1 | Activities are too vague | Ask students to “dig deeper” into each activity and ask, “What creates this strength?” | Students may say “Operational Efficiency,” “Reliability,” “Innovation” or “Inventory Management.” Suggest students search phrases such as: • “Why does Netflix never go down?” • “Why is Amazon so reliable?” • “What makes Apple so innovative?” • “What makes Walmart so efficient?” |
| Part 1 | Students use the title of the value chain category | Ask students to search each activity directly. | Students may say “Marketing and Sales” or “Inbound Logistics.” Ask for more details and suggest students search keywords such as: • “Company” marketing • “Company” inbound logistics • “Company” supplier relationships • “Company” supply chain strengths • “Company” reputation |
| Part 2 | Identifying the activity to multiple parts of the Value Chain | Talk through 2 to 3 specific activities and discuss how each activity connects to (multiple parts of) the Value Chain. | Students often identify the main part of the Value Chain each activity connects to but may not see when an activity connects to multiple parts of the value chain. • Zappos Culture Infrastructure + HRM • Coca-Cola Brand Recognition Infrastructure (History) + Marketing |
| Overall | Frustration at not seeing the big picture | Encourage patience during the process of the exercise and let them know this frustration is temporary. | Encourage students to focus on each part individually but let them know that they will see the “whole picture” at the end of the exercise. |
| Overall | Exercise takes too long | Option 1: Have students research the company before class. Option 2: Set approximate times on the board noting when each part should be completed. |
Option 1: See Appendix A. Option 2: Use the timeline to provide guidance but allow teams to complete each part at their own pace. Allowing staggered completion of each part will allow the instructor to talk to each team directly. |
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author received no financial support for the research, authorship, and/or publication of this article.
