Course Description GESTS406 Module Advanced Strategy (Timo Ehrig)

In this module, you will learn the newest developments in the academic field of strategy. Our understanding of strategy rapidly changes, for instance, due to the advent of AI, shifting our understanding of the origins of advantages of firms away from resources and information. Rather, there is growing consensus that great strategies rest on superior theories of how the world may change. That is good news: If theories of change, and not resource or information endowments drive advantage, newcomers can disrupt industries. Indeed, that is what we empirically observed with Apple, Amazon, or Tesla. This course aims at providing students the tools to navigate and also actively steer or create such disruptive dynamics, grounded in value capture theory and theory-based learning.

Value capture theory is the quantified andd extended version of Positioning View (Porter). Rather than teaching you how to perform the (outdated) 5-forces analysis, I will teach you the much more powerful Value Based Business Strategy framework invented by Brandenburger and Stuart. This framework will not just allow you to simulate who, in future markets, will make a profit. We will learn how to calculate profit ranges and (going beyond the 2025 course) take steps to calibrate such calculaltions to market data.

Theory-Based Learning is a tool to learn about uncertain futures, in particular, if a strategists (and that could be you) wants to make a contrarian future true, and improve her steps to succeed. Theory-Based Learning, more generally, is a framework that makes you excel, as it helps you to learn what LargeLanguage Models cannot learn: Coherent counterfactual causal models. 

Exam Format: Learning from student feedback in 2025, the exam format in 2026 will change: The theory-based learning exam part will count as 50% of the grade and is tested as open-book, digitally submitted excercises at the end of two of the running classes (the dates will be announced in late January). That will allow me to give individual feedback to theories of individual students, explain why one theory was better than other, etc, while the class is still running. If you cannot come to the two classes in which theory-based learning is tested, you need a medical certificate. The theory based learning grade will be the average of the grades for the two excercises. The value capture theory grade will be determined by a multiple choice test in the regular exam period, and count as 50% of the grade for the module.

Brandenburger, A. M., & Stuart Jr, H. W. (1996). Value‐based business strategy. Journal of economics & management strategy, 5(1), 5-24.

Felin, T., & Zenger, T. R. (2017). The theory-based view: Economic actors as theorists. Strategy Science, 2(4), 258-271.

Ehrig, T., & Schmidt, J. (2022). Theory‐based learning and experimentation: How strategists can systematically generate knowledge at the edge between the known and the unknown. Strategic Management Journal, 43(7), 1287-1318.