Industry Structure and Competitive Strategy
Indian Institute of Management, Kozhikode Academic Year 2002-3 PG2GM-002: `Industry Structure and Competitive Strategy’ I. Outline In attempting to bring together industrial organisation theory – a branch of mainstream economics – and the idea of positioning for competitive advantage – associated with the work of Michael Porter – `PGP 306’ is somewhat unique to the IIMK. While firms are assumed to be constantly seeking out competitive advantage, they are also constrained in their behaviour by the structure of the industry of which they are a part. Now, managers are expected to benefit from a body of knowledge that provides them with the analytical base and generalisable insights necessary to steer their firms. This course, focussed on the relation between industry structure and competitive interaction among firms, may be considered the foundation of such a body of knowledge. The year 2002 run of the course will be organised, as in the past, around the text The Economics of Strategy by Besanko, Dranove and Shanley (Second edition, New York: Wiley & Sons, 2000). There will be twenty one-and-a-half-hour sessions based on material from the text. In addition, students are encouraged to systematically work through Cases in Competitive Strategy by Michael Porter (New York: The Free Press, 1983) to be placed on Reserve in the Library. The contact sessions will be organised under four rubrics as outlined below: Firm Boundaries * The vertical boundaries of the firm * The horizontal boundaries of the firm Competition * Industry analysis * Market structure and competition * Competing via commitment * The dynamics of pricing rivalry * Entry and exit Strategic Position and Dynamics * Strategic positioning for competitive advantage * Sustaining competitive advantage * The origins of competitive advantage: Innovation, Evolution, Environment What is strategy? II. Learning The course material combines basic economic theory with caselets, being very short histories of firms and markets. My intention in the lectures will be to take you through this, highlighting the key predictions of economic theory and flagging the actually observed pattern of firm behaviour. Each contact session will commence with a lecture, to be followed by group discussion based on material not covered in the lecture. To be able to participate in the discussion prior reading of the material will be necessary. However, at that stage considerable freedom for the student is envisaged, and you are encouraged to bring a wider range of experience and knowledge to the classroom engagement. III. Evaluation Performance evaluation will be based on participation, an objective/quantitative mid-Term test and an essay-based final examination. IV. Office hours While the course is in session, I shall be available in my office 4.30-5.30 p.m. on every Tuesday and Thursday.