Strategy and Technology - Harvard Business School MBA Program

Strategy and Technology

Course Number 1286

Associate Professor Andrei Hagiu
Fall; Q1Q2; 3 credits
25 Sessions
Final exam or paper

Strategy and Technology Course Snapshot
Fall 2014 Strategy and Technology Syllabus

Overview

This course explores the unique aspects of creating effective management and investment strategies for technology-intensive businesses. What are effective strategies for winning in markets with strong network effects? How should firms go about commercializing highly uncertain, science-based technologies? How can technology be leveraged to build (multi-sided) platforms? How can firms create and capture the value from intellectual property assets? How can they sustain value despite wide-spread imitation and convergence with substitute technologies?

The course provides a series of useful concepts and frameworks which students can directly apply to strategic and investment problems they may encounter post-graduation. Throughout the course, there will be a heavy emphasis on going from concepts and market analysis all the way to the formulation of concrete strategies.

Industries covered include: consumer electronics (smartphones, videogame consoles, PCs, tablets), software (operating systems, virtualization, cloud services), Internet-based businesses (e-commerce, online video, social networking, browsers, app stores), semi-conductors, intellectual property, mobile communications, biotechnology, electronic ink, and mobile payment systems.

Career Focus

The course will be particularly relevant to two types of students: 1) those who anticipate taking managing positions in businesses for which technology is likely to play an important role; 2) those who anticipate consulting or investing in technology industries and must analyze firm strategies. But it may also be valuable for students who do not necessarily plan to pursue a career related to technology. Indeed, the concepts and frameworks covered (e.g. network effects, judo strategy, multi-sided platforms) apply well beyond technology industries.

Content and organization

The course is structured into several modules:

Network Effects and Increasing Returns: Technology-intensive businesses have unique attributes, which make their products increasingly valuable if more consumers buy their product or if more complements become available. Also, the cost structures of some technology businesses are fundamentally different from traditional manufacturing or service industries. What are the implications for market tipping, pricing and growth strategies?

Commercializing New Technologies: Early-stage technologies - particularly those that come out of basic science research - cannot prove their commercial viability without significant investments by venture capitalists (VCs) and/or operating companies. Conversely, VCs and operating companies are reluctant to invest if viability is too uncertain. How can start-ups overcome this problem and are there alternatives to the VC model for science-based companies?

Co-opetition: Understanding the role of complementary assets is critical in technology-intensive businesses: it is virtually impossible today for one company to produce a technology product or service all by itself. This means that a key aspect of strategy is cooperating with providers of complementary products/services, while at the same time maximizing the value extracted for oneself.

Multi-Sided Platforms: The most important competitive battles in technology are no longer between standalone products or services but between ecosystems. The most successful companies are those who build multi-sided platforms (MSPs), which spawn large ecosystems of users and suppliers of complementary products and services. Why and how are MSPs different from "normal" firms? What are the key strategies for creating successful MSPs?

Intellectual Property: Another defining characteristic of technology industries is the disproportionate share of value which resides in intellectual property (IP) assets. We will look at two different sets of strategic issues. The first concerns firms which create IP and need to build business models enabling them to appropriate value from their IP. The second concerns firms which attempt to become intermediaries facilitating IP transactions: how can one build viable business models around IP marketplaces?

Digital Convergence: Large-scale industry change happens faster in technology than in other markets. One of the most disruptive forms of industry change is technological convergence. As previously separate industries collide and create new competitors, how can firms maintain their competitive edge and evolve in order to take advantage of new technological opportunities?

The course relies on case discussions, interactive lectures, student presentations, independent reading, and a significant number of visitors. The readings are primarily drawn from the management and economics literature. The case studies provide extensive opportunities to integrate and apply these abstract tools in practical, competitive strategy contexts. The visitors provide unique opportunities to engage with leading practitioners from the companies and industries we discuss. Grades are determined by class participation (45%), participation in polls (10%), and a final paper or exam (45%). Students who choose to submit a project should do so in teams of 2-4 students. See "Course Requirements and Expectations" for details.