MEDAILLE COLLEGE
AGASSIZ CIRCLE
BUFFALO, NEW YORK 14214

COURSE DISCLOSURE STATEMENT
MBA 620 (Mod 1)

3 Credits, Fall 2005, Section 11-J, 6:00 to 8:05  T-TH

prerequisites: MBA 500, 501, 502, and 503

instructor, Walt Kolt
physical office, H105
hours, With Appointment, call or e-mail  Ph: 863-3798  M-W , T-Th 5-6
email, wkolt@prodigy.net

course web, http://RicciStreet.net/dwares/lane/mba620/
course discussion forum,

http://RicciStreet.net/cgi-bin/bistro/Ultimate.cgi

please note

Grades on your papers will reflect standard English usage. The Modern Language Association's (MLA) bibliographic style is generally used at Medaille.

MEDAILLE COLLEGE
18 AGASSIZ CIRCLE
BUFFALO, NEW YORK 14214

COURSE OUTLINE


A. CATALOG DESCRIPTION OF COURSE:

This course applies economic reasoning to develop a coherent analytical basis for the formulation and evaluation of the external and internal strategies of the firm. The course emphasizes practical managerial applications of topics from industrial economics and strategy: economics of scale and scope, industry analysis, market structure, commitment, dynamic competition, entry/exit, and the economics of competitive advantage. The course will also include the use of technology in the analysis of current topics. Students will follow a web based course outline 

B. GOALS:

1. Students will understand the general principles that describe and motivate the behavior of firms.

2. Students will gain a working knowledge of the basic economic principles of firm behavior, industry structure, market performance, and strategic action.

3. To apply multimedia techniques to problems in economics and strategy.

C. OBJECTIVES:

Students will be able to:

1. Identify the sources of economics of scale and economics of scope, and will know how to exploit them in making business strategy decisions.

2. Use Porter's five-forcers model to systematically analyze an industry in depth.

3. Describe the effects of market structure on how firms compete and the 
level of profits they can achieve.

4. Describe the importance and influence of strategic commitments in 
determining the nature of competitive interactions between firms.

5. Develop a working knowledge of the determinants of the pricing 
strategies adopted by rivalrous firms. 

6. Identify the structural factors affecting entry and exit decisions, and 
strategies available to incumbent firms to discourage entry and 
encourage exit.

7. Characterize and analyze a firm's strategic position in an industry, and 
know what conditions are necessary for a strategic position to lead to a 
competitive advantage in a market.

8. Diagnose specific sources of competitive advantage, and analyze a 
firm's cost and differentiated positions relative to its competitors.

9. Explain why a given firm can consistently out perform its competitors, 
despite its competitor's efforts to neutralize the given firm.

10. Identify the origins of competitive advantage.

11. Use multimedia software packages to analyze data and construct 
presentations in economics and strategy.

D. OUTLINE OF COURSE CONTENT:

I. Horizontal Boundaries of the Firm

A. Economies of Scale
B. Economies of Scope
C. Sources of Economies of Scale and Scope
D. The Learning Curve
E. Scale, Scope, and Market Structure

II. Industry Analysis
A. The Economics of Porter's Five Forces
B. Applying the Five Forces to Specific Industries

III. Market Structure and Competition
A. Market Structure
B. Oligopoly Models
C. Evidence on Market Structure and Performance




IV. Strategic Commitment and Competition
A. The Importance of Commitment
B. Incentives to Commit
C. Commitment Strategies
D. Flexibility and Option Value
E. Analyzing Commitments

V. Dynamic Pricing Rivalry 

A. Theory of Dynamic Pricing
B. Market Structure and Cooperative Pricing 
C. Quality Competition

VI. Entry and Exit

A. Evidence on Entry and Exit
B. Basic Concepts of the Entry and Exit Decisions
C. Entry- Deterring Strategies
D. Exit- Promoting Strategies
E. Diversification, Entry, and Exit

VII. Strategic Positioning for Competitive Advantage
A. Concepts of Competitive Advantage and Value Creation
B. Strategic Positioning: Cost and Differentiation Advantages
C. Targeting and Marketing Segmentation
D. Strategic Groups

VIII. Cost and Differentiated Position
A. Evaluating Cost Position
B. The Impact of Cost Drivers
C. Sources of Differentiation Advantage

IX. Sustaining Competitive Advantage
A. Sustaining Profits 
B. Sustaining Competitive Advantage
C. Imperfect Imitability and Industry Equilibrium

X. Origins of Competitive Advantage
A. Creative Destruction
B. Incentives for Innovation
C. Innovative Competition
D. Evolutionary Economics and Dynamic Capabilities
E. The Environment
F. Evidence on the Determinents of Innovativeness


E. SUGGESTED TEXT:

Besanko, David, David Dranove, and Mark Shanley. Economics of Strategy. 
New York: Wiley, 3rd edition 2003

F. SUGGESTED MATERIALS, METHODS, AND MEDIA:

Material will be covered by means of lecture, discussion, case analysis, problem solving assignments, video tape, text, journal articles, guest speakers, and computer applications.

G. INSTRUCTOR REFERENCES:

Bain, Joe. Barriers to New Competition: Their Character and Consequences in Manufacturing 
Industries. Cambridge, MA: Harvard University Press, 1956.

Barney, J. "Firm Resources and Sustained Competitive Advantage." 
Journal of Management. 17. pp. 99-120.

Baumol, W., J. Panzar, and R. Willig. Contestable Markets and the Theory of Industrial 
Structure. New York: Harcourt, Brace, Jovanovich, 1982.

Caves, R. and D. Barton. Efficiency in U.S. Manufacturing Industries. Cambridge, MA: MIT 
Press, 1990.

Caves, R. and M. Poter. " From Entry Barriers to Mobility Barriers." Quarterly Journal of 
Economics. May 1977: pp. 241-261.

Christiansen, K. and L. Fahey. "Building Distinctive Competencies into Competitive 
Advantage." Strategic Planning Management. February 1984: pp.113-123.

Cool, K.O., and D.E. Schendel. "Quality Differences Among Strategic Group Members." 
Strategic Management Journal. 9. 1988: pp. 207-223.

Dixit, A. and B. Nalebuff. Thinking Strategically: The Competitive Edge in Business, Politics, 
and Everyday Life. New York: Norton, 1991.

Fundenberg, D. and J. Jirole. " The Fat-Cat Effect, The Puppy-Dog Ploy, and the Lean and 
Hungry Look." American Economic Review. 74. 1984. pp. 361-368.

Ghemawat, P. Commitment: Dynamic of Strategy. New York: Free Press, 1991.

Hamel, G. and C.K. Prahalad. Competing for the Future. Cambridge, MA: Harvard 
Business School Press, 1994.

Jewkes, J., D. Sawers, and R. Stillerman. The Sources of Inventions. London: 
MacMillan, 1958.

Kamien, M.I. and N.L. Schwartz. Market Structure and Innovation. Cambridge, MA: 
Cambridge University Press, 1982.

Kotler, P. Marketing Management. 7th ed. Englewood Cliffs, NJ: Prentice-Hall, 1991.

Martin, S. Industrial Economics. New York: MacMillan, 1988.

Mathews, S. and L. Mirman. "Equilibrium Limit Pricing: The Effects of Stochostic Demand ." 
Econometrica. 51. 1983: pp. 981-996.

Miller, D. and P.H. Friesen. "Porter's Generic Strategies and Quality: An Empirical 
Examination with American Data, Part I: Testing Porter." Organizational Studies. 7. 1986: 
pp. 37-55.

Nelson, R.R. and S.G. Winter. An Evolutionary Theory of Economic Change. Cambridge, 
MA: Belknap Press, 1982.

Penrose, E.T. The Theory of the Growth of the Firm. Oxford: Blackwell, 1959.

Peteraf, M.A. " The Cornerstones of Competitive Advantage: A Resource-Based View." 
Strategies Management Journal. 14. 1993: pp. 179-191.

Phillips, L., D.R. Chang, and R. Buzzell. "Product Quality, Cost Position, and Business 
Performance: A Test of Some Key Hypotheses." Journal of Marketing. 
47. Spring 1983: pp. 26-43.

Porter, M. Competitive Strategy. New York: Free Press, 1980.

Sah, R.U. and J. Stiglitz. "The Architecture of Economic Systems: Hierarchies and 
Polyarchies." American Economic Review. 76. September 1986: pp. 716-727.

Saloner, G. "Modeling, Game Theory, and Strategic Management." Strategic Management 
Jourrnal. 12. Winter 1991: pp. 119-136.

Scherer, F.M. Innovation and Growth: Schumpeterian Perspectives. Cambridge, MA: MIT 
Press, 1984.

Schmalensee, R. and R.D. Willig, (eds.). Handbook of Industrial Organization. 

Amsterdam: North Holland, 1989.

Schumpeter, J. Capitalism, Socialism, and Democracy. New York: 
Harper & Rowe, 1942.

Spulber, D.F. Regulation and Markets. Cambridge, MA: MIT Press, 1989.

Tirole, J. The Theory of Industrial Organization. Cambridge, MA: 
MIT Press, 1988.

Von Weizsacker, C.C. Barriers to Entry: A Theoretical Treatment. Berlin: 
SpingerVerlog, 1980.