Half-Course: Strategies Beyond the Market

Course Number 1275

Associate Professor Felix Oberholzer-Gee
Late Fall, 15 session half-course
1.5 credits
Exam

Educational Objectives

Successful managers understand how to tailor business strategy to the legal and social environments of their company. Laws, regulations and social norms - factors beyond the market - often afford spectacular business opportunities, and at times they pose difficult strategic challenges, even to the seasoned strategist. For example, how should EMI, the London-based music company, adjust its strategy when much of the company's catalogue loses copyright protection in Europe? Can DuPont improve its competitive position by supporting stricter environmental regulation? How did ClearChannel use a regulatory change to become enormously profitable? And what strategies can ClearChannel pursue now to avoid consumer boycotts? What does it take to succeed with real estate investments in the politically charged environment of inner cities? In Half-Course: Strategies Beyond the Market (HC: 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. HC: SBM deepens students' capabilities in applying the concepts of competitive advantage (e.g., rent-chain analysis) and competitive dynamics (e.g., Bayesian games).

Course Content

Half-Course: SBM consists of four modules. The first, "The Strategic Management of Property Rights," analyzes strategies that companies use to protect and monetize their rights. Property rights are often limited. For example, patents and copyright terms expire, and most rights can be challenged in court. In many countries legal rights are barely enforced. In this module, we discuss how managers can effectively monetize their company's property rights when these rights are missing or when they become weaker.

The second module, "Competitive Strategy and the Rules of the Game," shows how companies can shape the rules of business to their advantage. We discuss how deregulation and regulatory regimes such as antitrust law influence the ability of companies to capture value. Throughout the course, we will pay close attention to the ethical dilemmas posed by some SBM.

In the third module, "Strategic Public-sector Relationships," we study how companies can design effective strategies to create value in public-sector relationships. Governments create significant business opportunities as powerful buyers (public procurement), sellers (privatizations), negotiators (granting market access) and bearers of risk (private-public partnerships, project finance). HC: SBM discusses the unique challenges that are involved in capturing value in transactions with public-sector entities.

The fourth module, "The Informal Rules of Business Strategy," studies how social norms influence the profitability of strategic actions. We discuss consumer boycotts and the role of the media in producing and channeling social pressure. As in the other modules, the case discussions emphasize the competitive effects of social norms.

Career Focus

This course is of particular interest to students who expect to bear responsibility for strategic decision-making as consultants, general managers and entrepreneurs. The course is also relevant for those who will invest in operating companies.