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Industrial Organization and Business Strategy (2nd module)
Valentina Peruzzi

Seat Fac. Economia - Sede di Ancona
A.A. A.A. 2016-2017
Credits 6
Hours 44
Period 1^ semestre
Language ENG

Prerequisites

Basic knowledge of micro-economics and statistics at under-graduate level.

Development of the course

The course aims at providing both theoretical models and empirical tools to understand the reasons for profitability and market success of firms operating in competitive markets. As firms face challenging and unpredictable business environments, and value creation is critical to company survival and prosperity, strategic management is increasingly important. A deep understanding of customer needs, competitive forces, firm’s strengths and weaknesses should be at the basis of the company’s strategic decision-making process. So, the aim of the course is to identify the general principles driving firms’ behavior by looking at both industry sectors’ dynamic and firm’s competitive advantage.

Learning outcomes

1. 1.    Knowledge and Understanding
   The purpose of the course is to introduce students to the theoretical knowledge and empirical analysis of companies’ strategic decision-making process. The teaching approach is simultaneously analytical and practical and is based on: (i) theoretical models of industry structure and firm behavior, and (ii) case studies analysis.
   1.    Applying knowledge and  understanding 
   At the end of the course, students must be able to apply economic analysis to sectoral studies and individual firm behavior. In particular, they must be able to: (i) analyze a sector and identify major players and competitors; (ii) provide a quantitative and qualitative analysis of market demand; (iii) group competitors using cluster analysis; (iv) compute market concentration and demand elasticity; (iv) assess firms’ reaction functions. 
   2.    Judgement, focus  and  communication skills
   The course relies on an active teaching method that connects the theoretical approach to sectoral studies with industry and market empirical analysis. By following a problem-based learning approach, students are required to provide evidence-based industry and company analysis, thus developing autonomy in learning and critical decision-making. As some of the weekly assignments are done in (small) groups, students develop teamwork abilities and improve their communication skills. 

 

Program

Part I: The tools of strategy analysis
Part II: Industry analysis
Part III: The analysis of competitive advantage
Part IV: Business strategies in different industry context
1.    Esercitazioni (Se presenti)
During the course, students are given weekly assignments on empirical applications of basic concepts and theoretical issues discussed in class. 

 

Development of the examination

1.    Exam. 
Examination: One hour written exam. 
2.    Assessment criteria.
To pass the exam, students must prove deep knowledge of both theoretical models and empirical tools for sector, market and firm behavior analysis. Students must be able to analyze industry sectors, measure market concentration, estimate demand functions, formulate and evaluate pricing strategy, identify the existence of strategic groups using cluster analysis and assess firm behavior through conjectural variations using regression analysis. 
3.    Grading scale 
Positive grades: from 18 to 30. Outstanding students can be awarded a distinction. 
4.    Grading method . 
The final grade is given by the result of the written exam, consisting of three questions and two exercises (or two case studies as alternative). Questions are given 60% of total grade; Exercises are given the remaining 40%.

 

Recommended reading

The indicative readings for the course are provided below. Some other materials will be indicated at the beginning of the module.
Economic Analysis:
Besanko D., Dranove D., Shanley M., The Economics of Strategy, 3rd Edition, Wiley.
Saloner G., Shepard A., Podolny J., Strategic Management, Wiley.
Strategic Analysis:
Grant, R.M., Contemporary Strategy Analysis, 7th Edition, Wiley. 

 

Courses

• L.M. - International Economics and Commerce curriculum Business Organization and Strategy