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MBA Core Strategy Course AnalysisJuan Alcacer, David Collis, Daniel Gross, Raffaella Sadun, Thomaz TeodoroviczAugust 17th, 2020Copyright President & Fellows of Harvard College

Objective To benchmark the core/quasi-core MBA strategy courses across top-ranked business schools in theUnited States and Europe This report summarizes the main findings All schools are anonymized and referred to as School 1, 2, 3, , 20. The order was generatedrandomly.2

Methodology Collection and analysis of syllabi (2019-2020 academic year) from 20 top business schools aroundthe world 17 business schools in the United States and 3 business schools in Europe Information on content, faculty/staffing, pedagogy, and reading materials 19 1-hour interviews with faculty in charge of course to Corroborate/clarify syllabus information Obtain quantitative course information Understand context of course (positioning in MBA program, staffing, strengths andweaknesses) Understand pedagogical approach Analysis and grouping of data in the following areas Context Faculty/Staffing Content Pedagogy/Grading3

Main Findings Timing: the core strategy course is often a stand-alone course available in the 1st semester (80%) asthe content is useful for internship interviews Courses have either one of two structures: marathon (several weeks with short sessions) or sprints(few weeks with long sessions) It is common for senior faculty to teach the course and to continue teaching it for long periods of time Relative homogeneity in the topics covered but heterogeneity in how topics are covered Most schools (14 3) follow classic tradition and/or value-based strategy Focus on core theoretical concepts of competitive strategy (e.g. price/cost strategies,alignment, 5 forces, and alike) discussed verbally and through cases 3 of these schools have idiosyncrasies briefed in the report Other schools (3) adopt an economic-driven course Focus on game theory models of dynamic interaction (e.g. models of entry, price wars,and alike) or on formal economic models about competitive strategy (e.g. Hoteling modelof diversification) Most schools use a mix of case method and lectures4

CONTEXT5

Status of strategy course in the MBA curriculumCourse type within MBA curriculum20.0% Change of core status toquasi-core (if any) is oftenimposed by school Core: mandatory to all fulltime MBA students Quasi-core: within a selectedset of “menu” of courseswhich students must choosesome from80.0% Even quasi-core courses arepopular amongst studentsQuasi-core6Core Enrollment rates between 60and 75% of the cohort

Timing of the main strategy course50%78%22%50% Why does it concentrate in the 1st semester? 7Course covers concepts that will be important for internship interviews

Position of other courses in relation to mainstrategy courseLarge variation in ics21602Finance I41420Accounting51410Business Analytics41411Marketing41060OB71030Operations reneurship02018taught before and afterstrategy due to:(1) variation in when strategyis taught; and(2) variation in the structure ofthe MBA programTechnical courses are taughtconcurrently with strategyStrategy is often the onlycase-based course in thesemester in which it is taughtNo evidence of coordinationacross courses

Schools vary in the length of the strategy course interms of weeks and in sessionsCourse length in weeksSchool 1School 2School 3School 4School 5School 6School 7School 8School 9School 10School 11School 12School 13School 14School 15School 16School 17School 18School 19School 20AverageSchool 1School 2School 3School 4School 5School 6School 7School 8School 9School 10School 11School 12School 13School 14School 15School 16School 17School 18School 19School 9Course length in .5051015Sessions2025

Strategy courses can be “marathons” (extensive)or “sprints” (intensive)11

Context: other notes Most schools reported having experiences low student-evaluations in theirrecent past that led to a revamp in the course Revamps punctuate periods of long stability with no changes in facultyand modest changes in topics12

Summary of context Strategy is mostly taught as a core course in 1st semester, often concurrentlywith technical courses that do not use cases No reported overlap with other courses Two types of strategy courses: Sprints: long sessions in fewer weeks (most courses) Marathons: short sessions spread over many weeks13

FACULTY/STAFFING14

Staffing – More seniors, less juniors In all schools but one, there is at least one senior faculty member teaching thecore class In 10 schools, out of 19 interviewed, all teaching faculty are seniors Only 4 schools assign juniors automatically to core strategy Most schools place juniors in undergrad course, part-time MBA course or electiveOnly these 4 schools have a process to rotate faculty in and out of the core class Only 3 schools reported to have some form of course head across sectionstaught; most schools have only an informal coordination15

Staffing – other notes Often the faculty teaching the core class do so for a long time Schools reported having senior faculty teaching the same course for between 10and 14 years When juniors start teaching the course, schools eventually report having somementoring process, though often informally 8 out of 19 schools use teaching assistants Schools rarely report formal coordination across faculty teaching differentsections of the same course16

Instructors typically teach 2 sections at a time18Faculty load: annual sections x number of faculty teaching1416 Higher faculty leverageabove that line, lowerfaculty leverage belowthat line24Number of sections6810 12School 14School 19School 11School 5School 4 Tradeoff betweenteaching multiple timesfor the same course forshort period of time vs.teaching once for a longperiod of timeSchool 20AverageSchools2 and 10School 17School 6Schools3 and 18Schools 7, 8, 9,12, and 16School 130School 101712345Number of faculty6789

Faculty load also varies in terms of time andstudents4500Faculty load per time and per students The figure does notadjust for time spent inpreparing the classes orspent in elective coursesMinutes per faculty (across all sections)3000350040002500School 2School 13School 20School 17School 9School 7School 3School 6 Most schools stay closeto the meanAveragec Schools 11 and 18School 8School 10School 16School 4School 19School 52000Lower loadSchool 15018Higher loadSchool 14100School 12150200Students per faculty (across all sections)250300

CONTENT20

What we did Characterize courses in multiple dimensions: Overall framing: HBS classic (Porter, Ghemawat, Collis/Montgomery, Rivkin)Value-based strategy (Brandenburger/Stuart)Resource-based view (RBV) (Barney, Wernerfelt, Prahalad/Hamel)Economics (Spulber, Besanko, Cabral, Saloner)Behavioral strategy (Gavetti, Fang) Topic analysis: Coverage of topic per school (extensive margin)Time intensity per topic (intensive margin)Clustering/Grouping of schools based on topic coverage Quantitative and formal orientation: 21Use of numerical evidence to sustain case-discussionUse of formal models to explain concepts

Five frameworks are often used to teach strategy Classic Strategy Value-based strategy E.g.: Spulber, Besanko, Cabral, SalonerBehavioral strategy 22E.g.: Barney, Wernerfelt, Prahalad/HamelEconomics E.g.: Brandenburger/StuartResource-based view E.g.: Porter, Ghemawat, Collis/Montgomery, RivkinE.g.: Gavetti, Fang

Most schools follow a mix of approachesSchool 1School 2School 3School 4School 5School 6School 7School 8School 9School 10School 11School 12School 13School 14School 15School 16School 17School 18School 19School 2023ClassicStrategyValue-basedstrategy RBVEconomicsBehavioralStrategy - Checkmarks mean the intensity of eachapproach within the course syllabus Value-based strategy is the most commonframework Often it supersedes traditional classic HBSview Industry analysis is minimized in at least 2schools 4 schools use economics to complement andsupport Classic HBS and Value-based strategy Collis/Montgomery is still predominant framingfor corporate strategy- Strategy is often a “stand-alone” course thatdiscusses its own concepts without necessarilyconnecting them to a larger set of fields inmanagement (rather than “integrative” coursethat connects management fields)

Classifying course sessions into strategy topics Started with common labels in syllabi Numerous trials of applying classificationto existing syllabi Consulted with colleagues and receivedfeedback Harmonized a refined version of thelabels Two independent raters evaluated eachsyllabus and classified sectionsaccording to their main topics Differences between classificationsresolved through discussions andinterviews24 Value Based StrategyIndustry Analysis/External ForcesResources/Dynamic CapabilitiesProduct DifferentiationCost AdvantageAlignmentNetwork -Market StrategyStrategy ImplementationStrategy DesignSustainability/Change/GrowthCompetitive DynamicsHorizontal DiversificationVertical DiversificationGeographic DiversificationStructure/GovernanceIncentive SystemsMicroeconomicsContextually-driven topicsOthers- Introduction/summary/exam/presentation

The most popular topics are still within competitivestrategy Graph shows the count of schoolswith at least one session about thetopic Industry analysis, cost advantage andproduct differentiation still mostcommon topics Large divergence on how toincorporate topics such asecosystems, platforms, networks Innovation/Technology topics mostlycovered through phenomenon-drivensessions25

The most time is spent on topics within competitivestrategyAverage % of time spent on topicCompetitive DynamicsIndustry AnalysisProduct DifferentiationContextual TopicsCost AdvantageValue-Based StrategyVertical DiversificationHorizontal DiversificationSustainability/ Change/ GrowthStrategy DesignNetwork rces/CapabilitiesGovernance StructureOtherGeographic DiversificationAlignmentStrategy ImplementationEntrepreneurshipNon-Market StrategyIncentive 32.22.12.11.81.71.10.90.8051015% of course time (w/o considering introduction/evaluation/simulations)26 Course time is, on average, dividedacross 10 topics Competitive dynamics is skewed byone school that uses 50% of thecourse to cover the topic Several “sub-topics”: Entry,Exit, Price Wars, etc. Nonetheless, 12 schools stillcover competitive dynamics Schools diversify in terms of othertopics This figure assumes that sessionswith multiple “core” topics divide theirtime equally across topics

Schools vary in their pace in covering topics220Average pace per topicSession length (minutes)100140180School 11School 17School 6School 13School 2School 7School 8School 9AverageSchool 12School 1960School 5School 14 School 1School 20School 16 School 3School 4School 15School 18School 101271.522.5Number of sessions for the average covered topic3

Schools vary in their orientation when coveringtopics Schools witheconomics-trainedfaculty favor a higherformal orientationFormal Orientation(use of formal models)HIGHLOWSchool 9School 11School 8School 10 No clear driver ofquantitativeorientationSchool 20School 3 Anecdotal evidencethat faculty would likemore quantitativelydriven cases Two schoolsreportedsupplying theirown quantitativematerialsSchool 18School 16School 19 School 6School 17School 4School 12School 2School 13 School 14School 1School 5School 7LOW28Quantitative orientation(e.g. use of financial indicators,support arguments with data)HIGH

Similarity of topics across strategy courses: highoverall Schools 9, 10, and 14 are the mostdissimilar for different reasons: School 9’s course is heavilyecon-based focused oncompetitive dynamics and gametheory School 10’s course is heavilyecon-based and a mix ofmicroeconomics/IO and strategy School 14’s course emphasizesstrategy design andimplementation Formal models about productdifferentiation, cost advantage, andcompetitive dynamics appear in afew schools where the faculty’sbackground is mostly economicsMeasure: pairwise Euclidean similarity comparing vectors of share of course time spent on each topic.29