1) Dyer Chapter 1

Chapter 1 is a good time to ask some “big” picture questions. Here are a few:

• What is economic value?
• How is it created?
• How do we know if it has been created, or how much of it has been created?
• Based on the way competitive advantage is defined in the Dyer textbook, does having a competitive advantage mean that a given company is better at creating economic value than its competitors? Explain why or why not.

2) Dyer Chapters 2 & 3

Chapter 2 is about external analysis. Is there anything in this chapter that isn’t in the Porter article? Is there anything in the article that isn’t in this chapter?

Describe a trend in one of the eight general environment categories (pages 34-38) and how you believe businesses are responding to it (or should respond to it).

So which is better? More or less “competitive” industries? From whose perspective? Why?

Can Porter’s five forces model be used by companies to make industries less competitive? What are the implications of that?

One of the take-aways from Porter’s five forces model is that the profitability of a particular company is more dependent on the structural characteristics of the industry in which it is embedded than on the internal capabilities of the company. In other words, profitability is determined more by bargaining power than company-specific competitive advantage. If this is true for companies, is it also true for individuals in the labor market?

Chapter 3 is about internal analysis (aka the resource based view of the firm, or the VRIO model). Is there anything in this chapter that isn’t in the Collis & Montgomery article? Is there anything in the article that isn’t in this chapter?

The real “theory” of the VRIO is on pages 53-58 (the explanation of why capabilities are difficult to imitate). In a perfectly competitive market, would there be capabilities or competencies that competitors couldn’t copy? Why or why not? What does this say about “competitive” markets (draw from the Walters chapter here)?

3) Markets

On page 39 of the article “What Markets Do” there is an explanation of what we want from economic markets (i.e. productive and allocative efficiency, maximization of social surplus). Explain each of these objectives. [Note: Once someone has done an adequate job of answering a question, you shouldn’t put up another post repeating the same information, although you should feel free to comment on, clarify, add to, amend, etc. previous posts.]

Once we’ve covered that, let’s move on to the assumptions on pg. 31. There are a number of assumptions here. Pick one of the assumptions and then carefully explain why, if that particular assumption isn’t met, we won’t get the outcomes we discussed in the first part of the question. For example, if products aren’t homogenous or uniform in a particular market, then explain–in detail, using the language of the article–why the market may not lead to the three outcomes we just got done discussing. There are a number of assumptions here, so there is a lot of room for people to respond. Again, don’t repeat what somebody else has already said. We’ll cover the rest of the article as we try to explain how violations of different assumptions make it more difficult to get desired outcomes. If we do a good job here, we’ll have a good understanding of why network externalities, social dilemmas, and other situations in which individual behavior is not independent are so problematic (basically, behavioral interdependence often short-circuits economic markets in particularly spectacular ways, e.g. bubbles, prisoner’s dilemmas, tragedy of the commons, etc.).

The basic ideas in this reading are important and we’ll return to these ideas in later modules.

Note: Feel free to interact with each other as the discussion unfolds (ask each other questions, add things, clarify things, challenge assumptions, etc.). All that’s fair game. I just don’t want you to repeat each other (i.e. by posting the same list that another student has already posted, etc.).

4) What is Strategy?

Let’s start at the beginning of the Porter article and work our way through the different sections (Sections 1 through 5).

Who wants to start us off by explaining what Porter means by OE? Once we’ve covered that, then let’s move on to the following questions.

Section 1: What does “necessary but not sufficient mean”? What examples does Porter give? Porter gives two reasons why OE isn’t a strategy, what are they? Do y’all agree with Porter here? What if a company’s strategy is to constantly stay ahead of competitive through process innovation? Why isn’t that a strategy?

Section 2: Unique activities? What are Porter’s three origins of strategic positions (one at a time, just name one, then let someone else jump in)? Once we’ve named all three, then let’s go back and define them (and list the examples that Porter gives). Can anyone provide other examples of positioning using firms that you’re familiar with (that aren’t mentioned in the article)?

Section 3: This is a “thought” question (kind of): Why does Porter link sustainable advantage and trade-offs (there may be room for multiple answers here, just be careful not to repeat what others have said)? Where do trade-offs come from? What examples does Porter use?

Once we’ve made it this far through the article, let’s move on to Section 4 and 5. What is the take-away from each of these sections?

5) Competing on Resources

What is this article about? Could this article also be called “What is Strategy?” (like the Porter article)? Compare and contrast this article with the Porter article. What’s the same? What’s different? Do these authors conceptualize corporate strategy in the same way? What are some of the implications of the “external market tests” described in the article? Why are these tests referred to as “market tests”?

Note: I’m purposefully leaving this discussion more “open” than the Porter discussion. Although I’ve supplied some questions to get the discussion going, the discussion shouldn’t be limited to what I’ve asked. Sometime the best contribution to a discussion is a good question (so feel free to ask your own).