MG4A6      Half Unit
The Analysis of Strategy B

This information is for the 2021/22 session.

Teacher responsible

Dr Jorn Rothe NAB5.01


This course is compulsory on the MSc in Management and Strategy. This course is not available as an outside option.


Students must have completed The Analysis of Strategy A (MG4A5).

Course content

In this course we continue, deepen and extend the analysis of strategy. The success of a firm depends on the decisions it makes, and these decisions have to take the behaviour of competitors into account who themselves try to make optimal decisions. Thus the firm faces a problem of strategic interaction, and game theory takes this interaction consistently into account. This course aims at a strategic understanding of these situations and the decisions firms face. We will study general principles of strategic thinking, the application of these principles to specific problems and general conclusions we can draw in these situations. This part of the course focuses on the strategic aspects of competing against other firms within the same industry. We start by analysing market structure and various dimensions of competition - pricing, capacity choices, research and development and advertising. We will then discuss different aspects of strategic commitment and the commitment aspects of pricing, investment and financing decisions. We then focus on the dynamic aspect of pricing rivalry, in particular collusion and price wars. We will finally discuss the incentives for innovation and market entry and exit decisions. Our approach will emphasise both the power and the limits of a game-theoretic approach. We will use simple models to clarify the logic of strategic reasoning, and case studies to illustrate the link between the analysis of strategy and managerial decision making.


20 hours of lectures and 8 hours of seminars in the LT. 2 hours of seminars in the ST.

Students on this course will have a reading week in Week 6, in line with Departmental policy.

Indicative reading

There is no fully adequate textbook for this course.

The most important text is D Besanko, D Dranove & M Shanley and S Schaefer, The Economics of Strategy, John Wiley (6th edition, 2012). Among the other sources are:

L M B Cabral, Introduction to Industrial Organization, MIT Press (2000); P Ghemawat, Games Businesses Play: Cases and Models, MIT Press (1997); D M Kreps, Game Theory and Economic Modelling, Clarendon Press (1990); J Sutton, Technology and Market Structure, MIT Press (1998). A detailed reading list will be provided at the beginning of the course.


Exam (100%, duration: 2 hours) in the summer exam period.

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Important information in response to COVID-19

Please note that during 2021/22 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the differing needs of students in attendance on campus and those who might be studying online. For example, this may involve changes to the mode of teaching delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.

Key facts

Department: Management

Total students 2020/21: 86

Average class size 2020/21: 17

Controlled access 2020/21: Yes

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Team working
  • Communication
  • Application of numeracy skills
  • Commercial awareness
  • Specialist skills