During our 3rd week, we completed an exercise on strategic data analytics. Our objective was to first, develop a process for comparing average profitability in the utility industry between US and Canada; and second, examine whether any differences could be associated to differences of the industry structure. We used confidence intervals to compare the average profitability between the two countries, and we learned how to leverage accounting data to develop proxies for barriers to entry and rivalry among existing competitors. While our discussion was specific to an industry the same process (and R script) can be used to compare difference between US and Canada for any other industry, or for comparing two industries within US or Canada.
Topics and Readings for Week 4
Theory: Our goal this week will be to finish the discussion on business strategy (chapter 2) and transition into IT strategy (Chapter 3). While relative performance has been the major theme in our first section of chapter 2, leveraging accounting data to make sense of business strategies, such as cost leadership and product differentiation, will be our focus in the second half.
The most recent issue of the Economist has a special section on the effect of technological innovations (fintech) in the finance industry. The article will serve as our transition to IT strategy (Chapter 3) and relates to our first topic in Chapter 3, which is the effect of IT on industry structure.
Read pp. 56-69 from chapter 2, and pp. 82-102 from Chapter 3.
Seminar: We will evaluate a firm’s competitive position and market valuation (2.9.1 and 2.9.2) and make sense of business strategy with accounting data (2.9.4). Read section A.4 (pp. 362 - focus only on market to book value) and A.5 (pp. 364-5) from Appendix A.
Assignments for Week 4
The fourth online quiz will be a based on Chapter 2 and material from the seminar. The quiz will be available on Friday at 12:30 pm.
