Overview

This course introduces advanced techniques to analyze, quantify, and implement strategies leading to sustainable competitive advantage in dynamic market and nonmarket environments.
This focus on strategy dynamics is structured around two independent modules of equal duration. Each module examines problems of strategy dynamics from a different level of analysis, as follows:

Module 1: Strategy Dynamics from a Macro Perspective | The Strategist as an Integrator (18 hours)

Module 1 analyzes how the evolution of business environments over time affects firm strategy. Business environments set the ‘rules of the game’ by which firms operate and compete. They are shaped not only by voluntary, contract-based, economic transactions governed by markets, but also by the social, political, and legal arrangements that structure firms’ exchanges with activist groups, media, government entities, NGOs, private institutions, and the public in general. To be successful, firms must manage effectively both types of environment – market and nonmarket – and have a clear understanding of the macro, largescale factors that shape their evolution.
Business environments are not static. An increasing number of industries undergo periods of major market- and nonmarket-driven turbulence, which radically change the rules of the game and the fundamentals of business success. High uncertainty, industry convergence, rapid and discontinuous change, and growing interdependencies among a diverse set of actors have pervaded various industries over time, such as computing with the built-to-order and digital revolutions, pharmaceuticals with accelerated R&D competition, and the video games market with strong critical mass races. Other examples include fashion with shrinking manufacturing lead times, and the home TV market with disruptive technological substitution from Video-on-Demand. At the same time, rising concerns about firms’ practices regarding global labor, animal rights, e-commerce privacy, and environmental protection turned them into regular targets for political activists, NGOs, and the media, often with shattering consequences for entire industries.
This first module examines these issues by focusing on the role of the strategist as an integrator. Specifically, it draws on the different functional areas of a company to develop principles, models, and techniques to achieve sustainable competitive advantage in dynamic environments. Module 1 is designed to build directly on the MBA Core Strategy course. In class, students will also review and apply introductory notions of Marketing, Finance, Operations, and Economics covered during the Core Phase of the MBA Program.

Module 2: Strategy Dynamics from a Micro Perspective | The Strategist as a Negotiator (18 hours)

This second module offers a deep dive into the micro-foundations of strategy: it analyzes the dynamics of value creation and value capture in individual business transactions. In particular, Module 2 focuses on value-based strategy and on the role of the strategist as a negotiator. In a corporate context, executives need not only analytical skills to identify optimal solutions to problems, but also the negotiation skills to get these solutions accepted and implemented by other corporate stakeholders over time. Negotiation determines how prices are set in commodity and financial markets, the distribution of profits along a supply-chain, how contract law is designed, disputes are resolved or dealt with through litigation, and the level of cooperation and competition between organizational agents to achieve common goals. Module 2 identifies the best strategies to create economic value and social capital through trade and develops students’ expertise in managing transactional and dispute resolution negotiations that occur in a variety of business settings. It teaches students how to analyze, prepare for, and execute value-based strategy and negotiations. Specifically, participants will identify value-creating potential in different settings, design and execute agreements that are Pareto-efficient, learn to appropriate economic value, identify tradable versus distributive issues, define ethical boundaries, and discuss coalition negotiations. This second module draws on behavioral strategy, game theory, social psychology and organizational behavior.

Module 2 will provide students with access to unique data that is usually not available in real-world
negotiations: (1) data on how they performed in each negotiation relative to other students in the same role and with the same information; (2) data on how successful students were in maximizing
the potential ‘pie’ in the negotiation relative to what was objectively available; and (3) data on how each student was perceived by the other party (or parties) in the negotiation. Access to these three data sets is aimed at improving negotiation performance or ‘Return on Mistakes’ (ROM).

Learning outcomes