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Competitive Intelligence. Dr. Richard Michon TRSM 1-040 Scope of this Course. Michael Porter Business economics Economic reasoning underneath business strategy. Is this course matching your personal motivations? . Intellectual curiosity

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competitive intelligence

Competitive Intelligence

Dr. Richard Michon

TRSM 1-040

scope of this course
Scope of this Course
  • Michael Porter
  • Business economics
  • Economic reasoning underneath business strategy
is this course matching your personal motivations
Is this course matching your personal motivations?
  • Intellectual curiosity
  • Abstract concepts
  • Quantitative reasoning

Paris Hilton would not do well in this class

is this course matching your student motivations
Is this course matching your student motivations?
  • Minor or Major?
  • Motivation to workand learn
  • “A” students?

Students only doing time at Ryerson do not do well in this class


D- D D+ C- C C+ B- B B+ A- A A+

is this course matching your professional motivations
Is this course matching your professional motivations?
  • Will not bring you practical hands-on job skills
  • Will give you business insight
  • Will make you look more intelligent and help you make your way around as a smart kid!
course framework
Course Framework
  • Cost, Pricing, and Value
  • Sustainable advantage
  • Understanding the industry structure and competitors’ behaviour
course content 1
Course Content (1)
  • Part 1: Firm Boundaries
    • Microeconomics (2)
    • Economies of scale and scope (3)
    • Vertical integration & diversification (4)
  • Part 2: Market and Competitive Analysis
    • Competition and Competitors (5)
    • Competition, strategic commitment, and dynamic pricing strategy (7)
    • Industry analysis (8)
course content 2
Course Content (2)
    • Part 3:Strategic Positioning and Dynamics
    • Positioning for competitive advantage (9)
    • Sustaining Competitive Advantage (10)
  • Part 4: Internal Organization
    • Structure, culture and strategy (11)
    • Markstrat wrap-up (12)
course material
Course material
  • David Besanko, David Dranove, Mark Shanley, Scott Schaefer, Economics of Strategy, 6th Edition, Wiley, 2013 $141 (Binder) or $69 (e-book)
  • Markstrat online license and manual (60 USD)Purchase:
  • Additional readings are posted on the website
course evaluation
Course evaluation
  • Three quizzes out of four (individual) 15%
  • Midterm exam 20%
  • Markstrat Simulation 35%
    • Markstrat industry simulation (group) 15%
    • One Markstrat industry analysis report (group) 10%
    • Markstrat peer evaluation (individual) 10%
  • Final Exam (cumulative, must pass) 30%


enduring principles
Enduring Principles

“He who loves practice without theory is like the sailor who boards ship without a rudder and compass and never knows where he may cast.”

Leonardo da Vinci

enduring principles13
Enduring Principles
  • "Theory without practice is empty;Practice without theory is blind."--Immanuel Kant
  • "Practice without Theory is blind,Theory without practice is sterile"-- Karl Marx
  • "Practice without theory is dangerous, but theory without practice is madness".--Mao-Tse-Tung
evolution of the modern firm
Evolution of the Modern Firm
  • Strategy = f (Business Conditions, Industry structure, Monopoly Power)
    • Business Condition = f (Country’s Infrastructure, Technology, Governments)
    • Infrastructures = f (Transportation, Communications, Finance, Institution)
  • Infrastructure (Lack of …)
    • Transport: Sea, Rail, Waterways (Canada and US)
    • Communications: Mail, Telegraph, No market info.
    • Finance: Small private banks, No asset financing, No spot markets
  • Technology: Artisan, piecemeal production
  • Governments: Investments, lack of laws and regulations
  • Firms: Small, local, family owned & operatedProducer-Merchants-Brokers-Agents-Buyers
  • Infrastructure (Transaction efficiencies)
    • Transport: Efficient rail/waterways  Logistics
    • Communications: Telephone
    • Finance: Investment bankers, accounting practices (i.e. financial reporting and inventory turnovers), stock exchanges
  • Technology: Large throughputs, Economies of scale and scope (ROI), Office efficiency
  • Gov: Safety, antitrust, insurance, regulations
  • Firms: Some small, some large, professional managers, hierarchical organizational structures, vertical integration.
yesterday 1980s
Yesterday… 1980s
  • Infrastructure
    • Transport: Air and ground (multi-modal)
    • Communications: EDI, IT and Web based
    • Finance: Financial instruments, LBO, mergers
  • Technology: CAD and CAM, JIT tech and logistics
  • Government: Relaxed rules, support R&D & industrial clusters
  • Firms: Large conglomerates and portfolio holdings, diversifications
today 2010s
Today… 2010s
  • Infrastructure
    • Transport: Air and ground (multi-modal) (global warming/costs)
    • Communication: EDI, IT and Web based, Web 2.0 (Social Mkt)
    • Finance: Collapse of institutions, credit crunch, ethics and governance
  • Technology: CAD and CAM, JIT tech and logistics,turnaround cycles, short runs, small volumes
  • Government: Tightening rules, re-invest in infrastructures, social programs
  • Firms: Downsizing (lean and mean), back to their knitting, focusing on core activities, outsourcing the rest, networking, flat structure, virtual organizations, governance
  • Strategies  Adaptive responses to the environment and competition
  • Following recipes  Failures
  • Principles are universal
    • Infrastructures drive businesses
    • Large upfront investments  Cost advantages only if large throughputs
    • Microeconomics theory
  • Applications are localized 
    • Distribution chains (short or long)
    • Vertical integration or quasi integration
    • Functions remain the same but can be performed by different players.
next week for survivors
Next Week, for Survivors
  • Microeconomic Primer
    • Demand and cost functions
  • More on Markstrat