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Industrial Organization and Business Strategy (2nd module)
Marco Cucculelli

Seat Fac. Economia - Sede di Ancona
A.A. A.A. 2015-2016
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 tools and models to understand the reasons for profitability and market success of firms operating in competitive markets. Using currently successful firms as a standard of behaviour assumes that other firms can achieve similar successful results by copying their behaviour. However, success does not happen randomly, and simply using firms’ experience to understand what would make all firms successful would not provide a good guidance. So, the aim of the course is to identify general principles behind the firms’ behaviour, and to avoid the trap of listing characteristics that are more likely to lead to success. Firm competitive behaviour in the market depends on how decision-makers (managers and the entrepreneur) match economic principles to external conditions.

Learning outcomes

1. Conoscenze e comprensione.

The course aims at providing the student with theoretical knowledge and tools for the empirical analysis of the company’s strategic decision-making process. The teaching approach of the course is based on i) analytical modelling of industry structure and firm behaviour, and ii) case studies analysis.

2. Capacità di applicare conoscenze e comprensione.

At the end of the course, students will be able to apply economic analysis to sectoral studies and individual firm behaviour. They will be able to: i) define a sector and list major players and competitors; ii) provide a quantitative and qualitative analysis of market demand, using quantitative methods and software; iii) group competitors using cluster analysis; iv) compute market concentration and demand elasticity; v) assess firms’ reaction functions.

3. Competenze trasversali.

The course relies on an active teaching method that connects the theoretical approach to sectoral studies with the empirical analysis of the industry and the market. Students are required to provide evidence-based industry and company analysis, and generate strategic recommendations. A problem-based learning approach helps students to develop autonomy in learning and critical decision-making. As five out of seven assignments are done in (small) groups, students develop ability in teamwork and improve communication skills.

 

Program

1. Contenuti.

Part I – Methods for applied industry study and competitive strategy
Part II –  Industry analysis
Part III – Competitive strategy

2. Esercitazioni (teoria ed esercizi)

During the course, students are given weekly assignments on empirical applications of basic concepts and theoretical issues discussed during classes.

Development of the examination

1. Modalità di valutazione dell'apprendimento.
Assessment is through a one hour written exam.

2. Criteri di valutazione dell'apprendimento.
To pass the exam, students must prove knowledge of theoretical models for the analysis of the industry and the company’s competitive behaviour.  Students must be able to define the industrial sector, measure market concentration, estimate demand functions, evaluate the pricing strategy, even using software-based empirical tools, identify the existence of strategic groups using cluster analysis and assess firm behaviour through conjectural variations using regression analysis.

3. Criteri di misurazione dell'apprendimento.
The student passes the exam if final grade is above 18/30. Outstanding students can be awarded a distinction.

4. Criteri di attribuzione del voto finale.
The final grade is given by results of a written test, consisting of three questions and two exercises (or two case studies as alternative). Questions are given 60% of total grade; exercises 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 – Wiley, 3rd ed.
SALONER G. SHEPARD A. PODOLNY J., Strategic Management, Wiley

Strategic analysis
THOMPSON A. STRICKLAND A., GAMBLE J., Strategic Management, McGraw Hill, 2009
COLLIS D. MONTGOMERY C., Corporate strategy, McGraw Hill 2007

Reading list
The reading list and case studies will be communicated at the beginning of the course.

 

Courses

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