Strategies Beyond the Market
Course Number 1277
Professor Dennis Yao
Winter; Q3;Q4; 3 credits
Course Content and Organization
Many successful companies live in an ambiguous relationship with society. On the one hand, they are an important source of local pride and national identity. Think of Google and Boeing in the United States, Infosys in India, China's Huawei and Switzerland's Nestlé. But at the same time, the most successful organizations are also often the target of less-than-friendly lawmakers, regulators, NGO's, and a sometimes hostile public. Wal-Mart, Microsoft, Tesco, and France Telecom are prominent examples.
This course is designed to help you tailor strategy to a company's business environment. We will analyze the sources of political, legal and social tensions surrounding successful firms, consider how these forces affect the sustainability of a firm's strategy, and explore avenues to turn these tensions into elements of competitive advantage. We will study both the impacts of these forces on competitive strategy: choice of strategic position, actions to influence the cost positions of rival firms and their customers' willingness to pay, and how rivals can impose additional cost on our business and reduce our customers' willingness to pay. In studying these strategic interactions, we will pay close attention to laws, regulations and social norms - factors beyond the market - because these factors often serve as levers to influence cost positions and price premiums. We will also examine how the pursuit of competitive advantage raises issues about a firm's role in society.
For example, how can Amgen, a biotechnology firm that developed the first biotech blockbuster drug, slow down Genetics Institute, a rival that works on similar products? Can Goodyear improve its competitive position by supporting stricter safety regulation? How did Clear Channel, the radio giant, use a regulatory change to become enormously profitable? And what strategies can Clear Channel pursue now to avoid consumer boycotts and political backlash? How should IKEA respond to accusations that its Indian suppliers employ underage children?
SBM is potentially valuable for students who plan to lead or advise companies in industries where key competitive advantage and industry dynamics are shaped by governmental, legal, and social forces.
In Strategies Beyond the Market (SBM), we analyze a series of advanced strategic problems to show what successful companies do to shape the rules of the game to their advantage. In so doing, SBM also aims to deepen your ability to apply the concepts of competitive advantage and competitive dynamics. Because communication is an important aspect of engaging with society, SBM also involves exercises designed to increase your communication skills.