Being able to successfully analyse a company’s economic roles and stakeholder interactions is an essential aid to the development of its strategy and a guide to shaping its tactics.

Monday 17 February–Friday 21 February 2020
1st Floor MBA Suite
Dr Tong Wang; University of Edinburgh Business School


Applications for this Option Course are now closed.

Join us for this highly interactive 5 day course, which considers the use of economics to help managers make decisions regarding factors such as cost and demand, pricing, products and strategy in relation to rival firms. It offers guidelines to analysing the make or buy decision and vertical integration; diversification and the implications of mergers, and the sustainability of profits.

A special emphasis will be placed on the problems created by a lack of information and how this affects contracts and hence control of suppliers or distributors (and their management). By looking at many of the problems of strategy, marketing, and public policy, participants will learn to analyse the motivational factors of each party involved, something that is highly relevant in today’s extremely competitive global economy.

Aims and Outcomes

On completion of this course, the students will be able to:

  • Understand and critically discuss Marginal Cost, Average Cost, Sunk Costs, Economies of Scale and their influence on decisions in the short and long run and their relationship to market structure
  • Understand and critically discuss the nature of demand functions, for both differentiated and undifferentiated products
  • Understand and critically discuss the role of cost and differentiation advantage in strategic decisions
  • Understand and critically discuss issues involved in the make or buy decision including monopoly power and the trade-off between technical efficiency and agency costs
  • Understand and critically discuss factors leading to the sustainability of profits

Course Content

The course uses a mix of lectures and case studies, together with classroom simulations and exercises. Lectures are designed to be interactive and to promote autonomous learning.

Day Content Overview
Day 1 Lecture: Basic Principle
Firm Objectives, Differences between Opportunity Costs and Accounting Costs, Decompose the Profit, Market Equilibrium, and Price Elasticity
Classroom Activity: Pit Market
Case Study: PlayStation vs Xbox 360
Day 2 Lecture: Firm Boundaries
Economies of Scales, Economies of Scopes, Control Loss, Vertical Integration, Role of Contract, Lack of Commitment, Quasi-rent, and Economic Profit
Classroom Activity: Vertical Relations
Case Study: Disney and Pixar
Day 3 Lecture: Competitive Advantage
Strategic Positioning, Component of Value Creation, Value Map, Economic Logic of Cost Advantage/Benefit Leading, Cost vs Differentiation, Sustaining Competitive Advantage, Profit Erosion, and Impediments to Imitation
Classroom Activity: Predatory Price
Case Study: Apple Inc in 2015
Day 4 Lecture: Compensation Scheme
Agency Problem, Public Limited Company, Separate Ownership and Control, the Cost of Agency, and Incentive Compensation Model
Classroom Activity: Compensation Design
Case Study: Executive Compensation at General Electric
Day 5 Lecture: Innovation
Innovation, Patent Issue, Hyper-competition, Fintech, and Blockchain
Classroom Activity: Patent Race
Case Study: Nest Wealth

Assessment and Credits

Participants are required to attend every session throughout the week and to take part in all activities and submit all assessments. On successful completion, they will receive a certificate and 10 credits which can be used towards an MBA/EMBA cohort interaction.

In the group report (40% of final mark) students will be expected to show knowledge and understanding of lecturing content, and the ability to use appropriate tools to analyse business cases.

For the individual report (50% of final mark) three topics are set from the lecture content, from which students must select and complete one. Students need to apply the knowledge gained from the course materials to argue for/against the topics that they choose.

In addition to the reports, there will be an in-class quiz which makes up 10% of the final mark.

This is an intensive course with teaching based on a 09:00–17:00 working day however there will be group work, assignments and reading outside these hours. There will also be some pre-course reading and tasks to complete before the first session.

Course Fees

Course fees include all tuition and course materials, but excludes any textbooks that may be required. Catering and accommodation are not included.

There is a 20% discount for University of Edinburgh Alumni and Staff.


For entry requirements please see our EMBA entry requirements.

Please email us if you would like more information: