During our second week, we worked on the following topics: We used the keywords - innovation, adoption, spending, payoffs - to summarize the content of chapter 1. The logic behind these keywords is that an new technological innovations are introduced, firms decide whether and when to adopt. Adoption implies spending, which is expected to lead to positive payoffs. Discussion on payoffs served as our transition to Chapter 2 (business strategy) and more specifically the association between industry structure and profitability.
In the seminar we reviewed briefly the theory of confidence intervals, and looked at an example of how we can use confidence intervals to classify industry in terms of their IT spending.
There is no Lecture in Week 3 (Victoria Day). In the seminar, we are going to work on the creation of accounting based proxies for industry structure. More specifically, we are going to generate accounting proxies for rivalry among existing competitors and barriers to entry. We are going to use these proxies to contrast US and Canadian wireless market (problem 2.9.3).
Readings for Week 3
Read Chapter 2 (Read pp. 40-69). For the seminar you will need to read the following material from the Appendix: How to extract data from Compustat (pp. 355-357), how to calculate performance measures using Compustat data (pp. 358-361), and how to calculate proxies for barriers to entry and for rivalry among existing competitors with accounting data (pp. 368-377).
SharpScholar is a new tool for testing your knowledge and learning from each other. SharpScholar shows as a hyperlink on the lower left corner on Learn. If you have not visited SharpScholar yet, please do this as soon as possible.
Assignments for Week 3
The third online quiz will be a based on Chapter 2 (pp. 40-56) and material from the seminar. The quiz will be available on Friday at 12:30 pm.
New: SharpScholar based Quiz for material from the Seminar of Week 2 (WEEK 02: Seminar). I have added a set of 12 questions associated with the material from Week 2. The questions are similar to the numeric questions from the second online quiz. You can try to answer these questions multiple times and without a time limit. I will treat this as an additional quiz. If you want this to count, you will have to answer all 12 questions before Friday 8:0o am.
Enjoy the long weekend.
