MBA 299 Topics

  • Basic issues in strategy
  • Where are we now
  • Where do we want to be
  • How do we get there
  • The strategic process
  • Strategy as the creating and capturing value
  • The candy bar experiment and the importance of market power
  • Frameworks for assessing where we are now
  • VRIO
  • Porter’s 7-forces model
  • Application: The Cramer Case
  • Game theory
  • Prisoners’ dilemma
  • Dominant strategies
  • Best responses
  • Nash equilibrium
  • Mixed strategies
  • Games in extensive form
  • Subgame perfection (backward induction)
  • Incredible threats
  • Repeated games
  • The Bertrand Trap
  • Six conditions for the Bertrand Trap
  • Examples: air service experiment; electronic components distribution industry
  • Fundamental rule of competitive strategy: “Competitive strategy is like driving, not football: Head-on collisions are to be avoided.”
  • Escaping the Bertrand Trap
  • Via cost advantage
  • Via raising consumer search costs
  • Via raising consumer switching costs
  • Via product differentiation
  • Via capacity constraints
  • Via recognizing repeated play
  • Vulnerability of means of escaping trap to lack of market discipline, emulation, and entry
  • Cournot competition (the capacity/quantity game)
  • Factors that make tacit collusion difficult
  • Means of facilitating tacit collusion
  • GE vs. Westinghouse
  • Antitrust law and issues
  • Barriers to entry
  • Entry deterrence
  • Via locking up customers
  • Via locking up suppliers
  • Via making fighting credible (e.g., capacity expansion)
  • By signaling toughness (“beer drinking”)
  • By establishing a reputation for fighting
  • Example: NutraSweet vs. Holland Sweetener Company
  • Antitrust issues surrounding
  • Issues in vertical relations
  • Double marginalization
  • Hold-up and bargaining
  • Vertical foreclosure
  • Downstream free-riding
  • Resolving problems in vertical relations
  • Lack of double marginalization when one stream competitive (Bertrand); recall Raytheon
  • Transfer price = marginal cost (correctly calculated)
  • Use of contracts, including option contracts
  • Resolving downstream free-riding
  • Use of vertical integration
  • Problems with vertical integration
  • Incentive theory
  • Hidden action
  • Hidden information
  • Lessons from African Communication Group case
  • Vulnerability to loss of value creation to suppliers
  • Problems facing first mover
  • Lessons from the CSG