Carnegie Mellon University

Corporate Strategy

Course Number: 45770

This course focuses on strategy as the search for rents among opportunities that are entrepreneurial, dynamic, and evolutionary. In this way this course presents "strategy as progress" as a complement to strategy as positioning. Here, the distinguishing feature of the economy is that advantage arises through entrepreneurial behavior, dynamically, and is inherently temporary. Still, for companies the traditional view, with its emphasis on structural stability, remains important.

Consequently, competitive strategy in the new economy reflects a mix of traditional strategies, designed to sustain advantage through physical assets and traditional economies of scale, as well as newer strategies, designed to gain advantage through information assets and speed. The approach used in this course to tie old and new approaches together is Sustainability Analysis, a method that formulates business strategies according to the profit half-life of a company's products and services. Thus, here the goal of strategy is not only to sustain advantage, but more deeply to maximize value, to manage the ebb and flow of economic progress with the continual goal of recapitalizing assets.

The range of rent-earning environments studied begins with Oligopolistic markets where traditional, economies of scale dominate. Here we look at the need to supplement traditional oligopolistic rivalry with continuous innovation, a process examined as "scale orchestration." Examples studied include Federal Express, McDonalds, Toyota, Starbucks, Las Vegas Casinos, and WebVan.

We then look at newer, Schumpeterian-like markets, where the gale of creative destruction and the "wow factor" as we term it, is central to competition and progress, where companies must "eat their children" at a faster rate than competitors. Examples studied include Intel, DRAM chips, Zara, Calloway Golf, the Johnson & Johnson Coronary Stent, Nokia, and the iPhone.

We then look at Monopolistic-like markets where long-lived advantage can be created lawfully through control of a central factor needed for the functioning of the market. Here, examples abound from the entertainment, aerospace, and information industries, including Martha Stewart, World Wrestling Federation, the Space Shuttle, the Joint Strike Fighter, iPod, eBay, and Microsoft.

These generic Standard-, Fast-, and Long-cycle competitive settings and business models, as we term them, are supplemented by a look at competitive situations where Sustainability is undergoing transformational, disruptive change, as in the Telecommunications and Airline industries.

We then look at trends in the strategy field generally by examining the history of strategy, providing further insight into how practitioners think and as how the field is changing. We conclude by applying course principles to planning MBA careers in a business world where changing employment opportunities are continual. (JW 6-14)

Degree: MBA
Academic Year: 2023-2024
Semester(s): Mini 2, Mini 3
Required/Elective: Required
Units: 6


Lecture: 100min/wk and Recitation: 50min/wk