It is a good time to summarize what I learnt from the subjects that we covered in the second term

Decision Models & Optimization (Liner Program and Simulation)

Some might surprise as to what exactly is the difference between Statistics and Decision Models. There are three main learnings from these two subjects

• Statistics – the biggest take away is Regression.
• Linear Program – how to write formulae or to run Solver to find an optimal solution to a given situation?
• Simulation – what is Monte Carlo simulation and how to find optimal solution when you are not sure of the variables?

The simplest way to differentiate them is this

• You run a Regression when you know independent variables (or uncontrollable) and you do not know the function defining their relationship or at best, the function is ill-defined

• You run an optimization solution, when you know the function, the independent variables but not the Y-axis values

• You run a Monte Carlo simulation when you do not know or uncertain about the independent variables and the function. You want to know Y-axis values

That is all there to these courses. But if one is not from a quant background these two become the toughest of the courses.

Global Economics

• China finally allows its currency to appreciate against the US dollar.
• The blasts and the threat of blasts in London is a productivity shock
• In PPP terms, India is the fourth largest economy

These are some of the news items, which I can easily understand and relate to. Earlier I used to get some sense out of them. But now I know the theoretical underpinnings that explain these phenomena and their consequences

Competitive Strategy

Sure, one course which cannot be taught over a term. But one can always get a panoramic view of what strategy is.

There are two aspects with which a Manager has to deal – Industry and Firm level issues. What forces influence the Industry profitability and how to assess them – Porter’s five forces model is the most popular

What factors are critical in the success of a firm – Core Competence, Activity System, Culture, Global strategy, Competitive advantages, etc define how well a firm does

The recent research has shown that firm level factors are far more important than industry level factors.

Marketing Decision Making

This was about how marketing decisions need to be taken. Any decision without taking competition into cognizance is a myopic one. What market research reports to use; how to use them. What models can be used to make demand forecasts; how do you capture share of market (share of voice X share of mind X share of distribution); what roles can advertising play; what roles do distributors play; how to manage launching and taking a new product to the market; how to manage firms in declining industry; product life cycles. The list goes on.

But if one wants to get into marketing function, what we learnt, as I realize, is not sufficient. There are many specialized courses, such as consumer behavior, advertising, etc, which need to be covered in the electives.