University of Alberta
Course Information
Course number: AREC 484
Course title: Strategic Management in Food and Resource Businesses.
Term: Winter 2017
Days and time: Tuesday and Thursday, 8:00-9:20am (09Jan-12Apr) Location:
Format:
GSB 511 Lecture Instructor Contact Information
Instructor: Mohammad Torshizi
Office phone: (780) 492-5439
Email address: [email protected]
Office location: 529 General Services Building
Office hours: Mondays and Wednesdays 10:45-11:45pm. Students are encouraged to make appointments by email for any other time.
TA: TBA
Overview of the course
This course provides the students with an illustration of how economic reasoning and principles can inform agricultural and food business managers, particularly with regards to strategies for dealing with a firm’s external and internal environment. Strategic Management in Food and Resource Businesses applies the latest microeconomic theories to the empirical evidence about the strategic management of firms and industries in food and agricultural markets. Students will learn the conditions for and the outcomes of different market structures such as perfect competition, oligopoly, monopoly, etc. This course will provide the students with the tools required to understand the nature of competition and analyze the outcome of strategic behaviour among firms and industries in agricultural markets. Throughout the course, there will be great emphasis on analyzing the current issues of Canadian agriculture. Examples used and discussed in class will be mainly related to Western Canada’s food and agricultural industries.
Learning outcome and objectives
The ultimate goal of courses such as Strategic Management in Food and Resource Businesses is to enable students to, first, recognize economic phenomena and pick the right theory to analyze the phenomena; second, apply the theory to the phenomena; and third, analyze the phenomena using the theory that they have learned in the course. These could also be combined as “Recognize-Apply-Analyze” learning outcome for students.
This learning goal is the general theme of the entire course as well as individual lessons.
The more specific learning objectives are as follows:
• Provided the examples given in 1st lesson, the students will be able to (TSWBAT) orally describe what exactly it is that we are studying by means of examples.
• Provided the Perfect Competition lessons taught, TSWBAT demonstrate, intuitively and graphically, what exactly the perfect competition market structure is.
• Provided the Perfect Competition lessons, TSWBAT restate the conditions for a perfect competition market and illustrate the implications of each condition.
• Provided the lessons taught throughout the course, TSWBAT demonstrate the implications of failure in each of the perfect competition conditions.
• Provided the lessons on horizontal and vertical boundaries of a firm, monopoly, price discrimination, barriers to entry and exit and contestable markets (chapters 2,3,5,6 and 8), TSWBAT perform a SWOT analysis for a firm in an agricultural or food industry.
• Provided the lessons on perfect competition, monopoly, and oligopoly markets, TSWBAT contrast the outcome (i.e. equilibrium price and quantity, and welfare measures) of these market structures intuitively, graphically, algebraically, and through numerical examples.
• Provided the lessons on oligopoly and strategic behaviour, TSWBAT recognize and interpret the outcome (i.e. equilibrium price and quantity, and welfare measures) of different types of competition (e.g. price competition and quantity competition) among firms in an oligopoly market structure.
• Provided the lessons on oligopoly and strategic behaviour, TSWBAT analyze the result of firms’ strategic behaviour intuitively, graphically, algebraically, and through numerical examples.
• Provided the lessons on product differentiation and strategic positioning, TSWBAT formulate the strategic position of a firm and/or product within a food or agricultural market.
• Provided the lessons on SWOT analysis, strategic positioning, and competition over time and competitive advantage, TSWBAT formulate the competitive strategy of a firm within a food or agricultural market.
• Provided the concepts and economic models taught throughout the course, particularly the lesson(s) on performance measurement, TSWBAT evaluate the economic performance of a firm within a food or agricultural market.
Reading Material:
Students should acquire a copy of the required textbook. Additional reading will be assigned throughout the course. Handouts will be made available through eClass. Students will also have access to Representative Evaluative Material on eClass.
Required Textbook:
Besanko D., D. Dranove, M. Shanley and S. Shaefer. 2012 The Economics of Strategy: Sixth Edition, Published by John Wiley.
This text is referred to as (BDSS) throughout the rest of the syllabus. The textbook offers a comprehensive approach that provides a link between economic theory and business applications. Agricultural examples are provided in a series of case studies.
Supplemental Books and Articles:
Carlton, Dennis W., Jeffrey M. Perloff. 2005. Modern Industrial Organization, 4th ed.
Church, J, and R. Ware. 1999. Industrial organization: A strategic approach. Boston, Irwin McGraw Hill.
Akerlof, G.A., 1970. “The Market for "Lemons": Quality Uncertainty and the Market Mechanism”. The Quarterly Journal of Economics, 84(3): 488-500.
Alston, J.M. 1991. “Research Benefits in a Multimarket Setting: A Review”. Review of marketing and agricultural Economics, 59(1): 23-52.
Howard, P.H., (2009). “Visualizing consolidation in the global seed industry: 1996–2008”, Sustainability, 1(4): 1266–1287.
Grading Policy:
Professionalism / Participating in class discussions 10%
Assignments 30%
Midterm exam 30%
Final exam 30%
Total 100%
The Assessment and Grading Policy is available at:
https://policiesonline.ualberta.ca/policiesprocedures/policies/assessment-and-grading- policy.pdf
The Grading Procedure is available at:
https://policiesonline.ualberta.ca/PoliciesProcedures/Procedures/Grading-Procedure.pdf Final percentage grades will be converted to letter grades as follows:
Percentage Letter
>90%
A+
85-90%
A 80-85%
A- 75-80%
B+
70-75% B
65-70% B-
60-64% C+
55-59% C
50-55% D
<50% F
Professionalism / Participating in class discussions
Students are expected to treat AREC 484 lectures as professional meetings. Attendance and participation is an important part of this course (Would you miss a professional meeting?). Students will be marked for attendance and participation in class. This is measured by the number and accuracy of students' answers to the instructors' oral questions during the lectures as well as students' participations in class discussions.
Students will be asked, for example, to restate and illustrate what has been taught in previous lectures.
Examinations:
The midterm examination will be held on Feb 16. Midterm exam is written and comprehensive of all materials taught before February 16 2017.
The tentative final examination date announced by U of A Registrar is 27-Apr-2017 at 9:00 am. Final exam is written and comprehensive of all materials taught throughout the course.
A final exam planner, with dates and times for final exams based on course lecture time slots, is provided by the Registrar’s Office:
http://www.registrarsoffice.ualberta.ca/en/Examinations.aspx
Students who are unable to write an examination because of illness or any other legitimate reason, should contact the instructor as soon as possible to make alternative arrangements. The usual university regulations apply in these situations, as per Section 23.5.6 in the U. of A. Academic Calendar (see web link below). Specifically:
· students unable to write a midterm examination due to legitimate reasons will have the option of a) writing a make-up examination to be held within one week of the originally scheduled examination, or b) have the
percentage weight for the missed midterm exam added to the percentage weight allotted to the final exam;
· students unable to write the final examination due to legitimate reasons must apply for a deferred examination.
Webpage link for Section 23.5 in the University of Alberta Academic Calendar (http://www.registrar.ualberta.ca/calendar/Regulations-and-Information/Academic-
Regulation/23.5.html#23.5 )
Plagiarism and Cheating
“The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (online at www.governance.ualberta. ca) and avoid any behaviour which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.”
Electronic Devices
The use of electronic devices during AREC 484 exams is limited to “Only approved non-programmable calculators”. The use of cell phones, financial and engineering calculators, hand-held organizers and computers is not permitted.
Assignments Schedule:
There will be 6 to 8 assignments. Possible assignment topics with the approximate due dates and weights in total assignments grade are presented in the following table. Please beware that this table is only to give students an idea of assignment topics and approximate due dates; the actual schedule may slightly differ from this table.
Topic Approximate due date Weight in assignments grade
Firm and cost 19 Jan 5
Perfect competition/Vertical Market/ Horizontal Boundaries
26 Jan
15
Monopoly/vertical Boundaries 2 Feb 15
Market and Competitive Analysis 14-16 Feb 15
Strategic behavior 21 March 15
Product differentiation 28 March 15
Strategic Position and Dynamics 4 April 15
Performance Measurement 11 April 5
Assignments are to be in hard copies and submitted before 4:30pm of the due date.
Assignments can be submitted in class or at the instructor’s office.
Late Assignments will be given a mark of zero.
Code of Student Behaviour at the University of Alberta
“The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (www.ualberta.ca/secretariat/appeals.htm) and avoid any behaviour which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence. Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.” (GFC 29 SEP 2003).
Key excerpts from this code include:
“30.3.2(1) Plagiarism
No Student shall submit the words, ideas, images or data of another person as the Student’s own in any academic writing, essay, thesis, project, assignment, presentation or poster in a course or program of study.”
“30.3.2(2) c No Student shall represent another’s substantial editorial or compositional assistance on an assignment as the Student’s own work.”
Students should speak with the course instructor about any questions or concerns about the code. Students should be particularly aware of the code as it pertains to internet and library research, use of previous class notes, reclamation plans of former students and interviews or discussions with others.
(http://www.registrar.ualberta.ca/calendar/Regulations-and-Information/Code-Student-
Behavior/25.html and;
http://www.governance.ualberta.ca/en/CodesofConductandResidenceCommunityStandar ds/CodeofStudentBehaviour.aspx )
Recording of Lectures
“Audio or video recording, digital or otherwise, of lectures, labs, seminars or any other teaching environment by students is allowed only with the prior written consent of the instructor or as a part of an approved accommodation plan. Student or instructor content, digital or otherwise, created and/or used within the context of the course is to be used solely for personal study, and is not to be used or distributed for any other purpose without prior written consent from the content author(s).”
“Policy about course outlines can be found in Course Requirements, Evaluation Procedures and Grading of the University Calendar.”
Tentative Course Schedule
The following schedule is only to provide students with the order and approximate length of topics so they can develop their study plans, some topics might take longer or shorter than expected in the following table. The instructor may use the review sessions for teaching the course topics.
Date Contents of Lecture Topic Reading
Jan-10 Introduction Strategy and Economics
Jan-12 Firm and cost/horizontal boundaries of firm
Basic Principles Econ.
Primer/Ch 2 Jan-17 Horizontal Boundaries/ Vertical markets
Firm Boundaries Ch2/Ch 4/Handout Jan-19 Perfect competition: conditions
Econ.
Primer/Ch 5 Jan-24
Monopoly and monopsony: origins, why study
them?, pricing, welfare Ch 5
Jan-26
Vertical Boundaries of firm (transaction cost,
holdup problem) by Professor James Rude Ch 3
Jan-31 Price discrimination Market and Competitive
Analysis Ch 5/Handout
Feb-02 Natural monopoly and regulation Ch 5/Handout
Feb-07
Fixed vs. sunk cost, Barriers to entry and exit,
Contestable mkts Ch 6
Feb-09 SWOT and Porters 5 forces Ch 8
Feb-14 Review
Feb-16 Midterm
Feb-21 No Class
Feb-23 No Class
Feb-28
Review of midterm, Intro to game, prisoner's dilemma
Market and Competitive Analysis
Econ.
Primer/Ch 7/Handout
Mar-02 Cournot Ch 5/ Handout
Mar-07 Bertrand Ch 5/ Handout
Mar-09 Strategic behaviour, Stakelberg Ch 5/ Handout
Mar-14 Strategic behaviour, limit pricing etc. Ch 6/ Handout
Mar-16
Monopolistic competition: Horizontal
Differentiation Ch 5/ Handout
Mar-21
Monopolistic competition: Vertical
Differentiation Ch 5/ Handout
Mar-23 Strategic positioning Strategic Position and
Dynamics Ch 9
Mar-28 Dynamics: Competing over time, durapolists Ch 7
Mar-30 Sustaining competitive advantage Ch 11
Apr-04
Sustaining competitive advantage/Performance Measurement
Internal Organization
Ch 11, 12
Apr-06 Performance Measurement Ch 12
Apr-11 Review
