Educational Objectives

The goal of the course is to provide students with knowledge, skills, and judgment to manage the role of competitors in the success of an organization. The course will enhance students’ understanding of how competition unfolds in the market, the various strategies available to firms to change the competitive game, and the social, ethical, and legal consequences of pursuing different strategies. A key tradeoff analyzed in the course is the tension between cooperation and competition with rivals, including the legal limits of various behaviors. The course uses a mix of model-based thinking and real-world examples to generate practical insights for the design of the organization, its strategic choices, and communication with rivals.

Course Content and Organization

Through case studies, simulations, and the occasional interactive lecture, the course will introduce analytical tools and insights about assessing and managing competitive environments. Core topics include:

• The Independence/Interdependence of Rivals’ Objectives: We will look into the sources of firm objectives and the mechanisms that might link one firm’s objective to the objectives of rival firms. This includes the influence of market-level factors such as demand, labor markets, and the supply of inputs, as well as firm-specific considerations that can be driven by ownership pressures and within-firm organizational choices.
• Coordination Techniques: Firms have many means of communicating with rivals about their strategic actions, including public announcements, third-party sources of information, and direct private communication. We will look in detail at a few of the more common techniques to understand the rationale in various contexts. Importantly, we will look at the legal limits of such behaviors.
• Advances in Competitive Technology: Changes to technology affect the nature of competition. For example, advances in pricing algorithms allow for the widespread adoption of high-frequency price changes, dynamic strategies, and personalized pricing. We will seek to understand how the adoption of such technologies provide may provide firms with a competitive advantage and affect how competition plays out in the market.
• The Trillion-Dollar Question: How Big is Too Big? Competition policy and antitrust is evolving as policymakers attempt to address perceived harms by the world’s largest companies. Formulating a long-term strategy in a market affected by these giants and the technologies they rely on depends critically on understanding potential changes to legal occurring over the next decade and beyond. Will we discuss current issues being considered by competition authorities, the underlying motives for the evolution of policy, and how firms are responding.

Final Project

Working alone or in pairs, students will write a short paper that:

1. Identifies a major change to the competitive environment driven by competition policy, regulation, or technology,
2. Analyzes the impact the change has had on the largest firms and the market overall,
3. Proposes a strategy to take advantage of the constraints imposed or relaxed by the change, focusing on how the strategy actively manages the competitive environment to the advantage of the organization.

Career Focus

This course provides a general management perspective on competition and is designed to improve your ability to improve firm performance in a competitive environment. It should appeal to students who are future CEOs; strategy consultants who advise organizations; or as private equity, public equity, venture capital, or hedge fund investors. We will provide some understanding of what you can and cannot talk about with friends and acquaintances at rival companies! The course should also appeal to students who simply want to deepen their understanding of how competition varies across markets and the antitrust and regulatory pressures that are faced by the largest organizations in the world today.

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