STR421 Competitive Strategy

• Topics

  Competitive strategy explores the relationships between a firm and its competitors, suppliers, distributors, and partners. This relationship is analyzed through the lens of "coopetition," which emphasizes the simultaneous occurrence of both competition and cooperation between a firm and the various players in its environment. The core principles of coopetition are derived from game theory and help generate business strategies that may not be immediately obvious and easy to see, and in some cases, might even appear counterintuitive.

  The course takes a broader perspective by examining how firms can change the "game" they are currently playing — whether by changing the rules, altering the players involved, changing other players' perceptions, or by expanding or limiting its scope. Through a set of case studies, the course will demonstrate that coopetition is something firms of all sizes, and in any industry, should be highly aware of and master, as it may yield large profits or prevent large losses.

  Topics covered include:

  • Price competition: Why and when do we observe intense price competition, and how can firms mitigate or avoid such outcomes?
  • Collusion: In which markets do we expect collusive behavior? Can collusion on prices lead to fierce competition along other dimensions?
  • Market entry: How should new entrants approach markets dominated by established firms?
  • Entry dynamics: Does a lack of coordination typically result in excessive or insufficient market entry, and why?
  • Regulatory impact: How can competition authorities reshape the rules of the game?
  • Vertical integration: When does vertical integration benefit firms and consumers?

  The course will incorporate case studies from a variety of industries and will feature guest lectures from industry professionals.

• Learning outcome

  The primary focus of this course is the strategic interaction between firms, aiming to provide a deep understanding of business strategies through a combination of theoretical models and real-world case studies. Simple game-theoretic models and case studies from Harvard Business School will be applied to examine actual firm behavior.

  Upon completion of the course, the student can:

  Knowledge

  • Describe different tools that are used to study the interaction between firms in the market place, and how this can be used to shape a firm's strategy.
  • Discuss how game theory can be used to predict outcomes in competitive situations.
  • Explain the "coopetition" framework and the different ways this framework can be used to shape firms' strategies.

  Skills

  • Apply game-theoretical models to real business decision-making scenarios.
  • Predict optimal strategic choices based on the competitive and cooperative dynamics within a business environment.

  General Competence

  • Recognize and analyze firms' strategies for value creation and the capture of maximum value across different business contexts.

• Teaching

  The course consists of a combination of plenary lectures, case discussions, and student presentations.

• Recommended prerequisites

  The course is based on a student background of intermediate microeconomics (e.g. "Microeconomics" by Goolsbee, Levitt and Syverson, "Microeconomics" by Pindyck and Rubinfeld, or a textbook in micro economics at a similar level) and Business Strategy.

• Required prerequisites

  The course is based on a student background of intermediate microeconomics (e.g. "Microeconomics" by Goolsbee, Levitt and Syverson, "Microeconomics" by Pindyck and Rubinfeld, or a textbook in micro economics at a similar level) and Business Strategy.

• Compulsory Activity

  All students must give a presentation in class on the topic of their course paper. In addition, we expect the students to attend all classes (15 lectures) and all presentations in class by group of students (minimum 10 presentations).

• Assessment

  Three hours individual digital school exam (50% of final grade); course paper (50% of final grade).

  The course paper must be written in groups of 2-3 students, and within the period mid-March to mid-April (approximately). 

  The exam and the course paper must be written in English. 

• Grading Scale

  A-F.

• Computer tools

   None.

• Literature

  The main required text book in the course:

  BN: A. M Brandenburger and B. J. Nalebuff: Co-opetition, Currency Doubleday, paperback edition, 1998.

  The course is based on a student background of intermediate microeconomics (e.g Pindyck and Rubinfeld) and students also need to have, or acquire, some basic knowledge on game theory. The following text book can for instance be used:

  DSR: A. K. Dixit, S. Skeath and D.H. Reiley: Games of Strategy, W.W. Norton & Company, third edition, 2009.

  In addition, there will be several case studies, shorter notes and articles to be announced at course start.

• Permitted Support Material

  Calculator 

  One bilingual dictionary (Category I) 

  All in accordance with Supplementary provisions to the Regulations for Full-time Study Programmes at the Norwegian School of Economics Ch.4 Permitted support material https://www.nhh.no/en/for-students/regulations/https://www.nhh.no/en/for-students/regulations/ and https://www.nhh.no/en/for-students/examinations/examination-support-materials/https://www.nhh.no/en/for-students/examinations/examination-support-materials/