How much uncertainty is there in different industries

Jeff Dyer, Nathan Furr, and Curtis Lefrandt have put together a useful graphic on the relative uncertainty in different industries.

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Game Theory:  Why it became so popular and why it often is hard

John Cassidy explains in the New Yorker:


Thanks to the sterling efforts of Sylvia Nasar, Ron Howard, and Russell Crowe, many people are aware that John Nash, the Princeton mathematician who was killed over the weekend in a car crash on the New Jersey Turnpike, lived a remarkable life. It included early academic stardom, decades of struggling with schizophrenia, and, in 1994, a shared Nobel Memorial Prize in Economic Sciences. But outside the field of economics, Nash’s contribution to game theory, for which he was awarded the Nobel, remains rather less well understood.

Although it is often used in economics, game theory can be applied to any venue where people, or other decision makers, interact strategically and follow rules-based behavior. The setting could be nuclear negotiations, such as the ones currently taking place between Iran and the great powers. It could be a product market, in which a number of firms compete for business. Or it could be a political campaign, in which various candidates try to outdo each other. The word “strategically” is important, because the various players, in choosing from a variety of possible moves, take account of one another’s actions, or likely actions. And the phrase “rules-based” means that the players are acting purposefully and seeking to maximize their own advantages, rather than behaving passively, or randomly.


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Duplicity

Rarely is a Hollywood movie such a great teaching instrument. Duplicity gives a wonderful picture of how far large companies go in figuring out what their competition is up to. What’s more, the principles of game theory are very well illustrated by Julia Roberts and Clive Owen, who make a wonderful pair. I recommend that every Strategic Management student watch this film.

Understanding the Strategies of Airbus and Boeing

Boeing and Airbus are pursuing different strategies with their next generations planes (the superlarge A380 and the supereffecient Boeing 787 Dreamliner). A recent article in the New York Times nicely demonstrates that the differences on the two companies’ strategic bet are driven by two different views how passenger travel will develop in the future. In essence, the firms tried to create strategies that fit with the perceived future environments of airplane travel.

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Strategy Formulation