Industry and Competitive Analysis (ICA)

Prof. Tri Widodo, Ph.D.

Faculty of Economics and Business
Universitas Gadjah Mada

Contact Information:
Office Hour: Monday, 10.00-12.00
Email: widodo.tri@ugm.ac.id

Description:
This course discusses economic principles that are essential to analyze competitiveness and
market. In the last thirty years, the use of formal economic analysis, especially game theory, has
changed the understanding of firm decisions and industry dynamics. This course covers
discussions on economies of scale, horizontal and vertical boundaries, transaction-cost
economics, competitive advantage, oligopoly theory, entry-exit, strategic positioning,
commitment, incentive innovation, and internal organization.

Class Format:
We will spend roughly 60 percent of class time on discussions/presentations and 40 percent on
lectures. The goal of the lectures is to explain economic concepts and summarize the discussion
of particular cases. Question during the lectures are welcome and expected.

Grading:
1. Midterm exam: 30%
The midterm is based on the theoretical tools and case insights from the first half of the
course. The best preparation for the exam is to review the ideas from the cases and
lectures. The exam will be closed books, but you might bring in a single sheet (A4) of
notes with any formulas, definitions, graphs, etc.
2. Final exam:30%
The final exam will be similar to the midterm. The exam will emphasize the materials of
the second half of the course (Topic 14 is not included). The exam will be closed books,
but you may bring in a single sheet (A4) of notes with any formulas, definitions, graphs,
etc.
3. Discussion/Presentation/Assignment: 40%
- Individual : 20%
- Group : 20%
Topic:
1. Introduction
2. The Horizontal and Vertical Boundaries of the Firm (Ch 2 and 3) - Group 1 (Discussant:
Group 2)
3. Integration and Its Alternatives (Ch 4) - Group 2 (Discussant: Group 3)
4. Competitor and Competition (Ch 5)- Group 3 (Discussant: Group 4)
5. Entry and Exit (Ch 6)- Group 4 (Discussant: Group 5)
6. Dynamics: Competing Across Time (Ch 7)- Group 5 (Discussant: Group 6)
7. Industry Analysis (Ch 8)- Group 6 (Discussant: Group 1)
8. Strategic Positioning for Competitive Advantage (Ch 9)- Group 1 (Discussant: Group 2)
9. Information and Value Creation (Ch 10)- Group 2 (Discussant: Group 3)
10. Sustaining Competitive Advantage (Ch 11)- Group 3 (Discussant: Group 4)
11. International Organization: (3 sub-topic for Big Group Discussion)
a. Performance Measurement and Incentive (Ch 12) - Group 4 (Discussant: Group
5)
b. Strategy and Structure (Ch 13) - Group 5 (Discussant: Group 6)
c. Environment, Power and Culture (Ch 14) - Group 6 (Discussant: Group 1)

Discussion/Presentation: Group
There are two kinds of groups: 6 small groups (consisting of 2-3 students) The small groups will
discuss the Topics 2-10.

Individual Assignment: Indonesian Case Study related ICA

Every student will be required to write a short memo/note (not more than 2 pages) on any
aspect of the Indonesian case study related to ICA which you found interesting while analyzing
the topic.

Reference
Besanko, D., D. Dranove, M. Shaley and S. Schaefer, 2013. Economics of Strategy. John Wiley &
Sons, Inc., Hoboken.
Martin, S., 1988. Industrial Economics. Mamillan Publishing Company, New York dan Collier
Macmillan Pusblisher..
Porter, M.P., 1980. Competitive Strategy: Techniques for Analyzing Indutries and Competitors. The
Free Press. New York.
Papers will be handed in class.