a field guide, distilled from MIT OpenCourseWare · system by [email protected]
Strategy is deciding where to spend money and attention before you spend it. Here are the durable ideas from MIT's strategy courses, in plain terms, each one cited to the course it came from.
Pick where you win before you optimize how you run.
Operations choices (what to build, where to put capacity, who to source from) only create advantage when they fit one clear basis of competition (cost, quality, availability, or new-product speed) and stay consistent with each other. Default to "minimize cost everywhere" and you get a business that is mediocre on every axis and excellent on none.Strongest when you have a real choice of how to compete. Re-run the check whenever the basis shifts, like a market that rewarded availability starting to reward price.Operations Strategy 15.769-fall-2010
Creating value and capturing it are two different problems. Solve both.
You can build something genuinely valuable and still make no money, because the value flows to someone else: the platform you sell on, a copycat, a supplier who owns the bottleneck. Whether you capture value depends on how protected it is (uniqueness, control of the complementary assets), not just how good it is.Capture is most fragile where imitation is easy or a partner sits between you and the customer. Re-check it every time you add a distribution partner or platform.Technology Strategy 15.912-fall-2008
Where you sit in the value chain beats how good you are.
Value migrates along a chain over time, and the outsized returns concentrate where the scarce link is (a standard, a platform, a bottleneck). You can be excellent at a step that is going cheap and abundant while the profit pools move to the step next door.Most actionable where there are clear hand-offs. The migration is a tendency, not a law, so confirm the bottleneck is really moving before you reposition.Technology Strategy 15.912-fall-2008 · Operations Strategy 15.769-fall-2010
In network markets, adoption can beat a better product.
When a product gets more valuable as more people use it, early adoption compounds and the real question becomes whether to open the standard (grow the pie, share it) or keep it proprietary (smaller pie, capture more). The usual "build it better and they will come" logic breaks; timing and installed base can matter more than features.Only applies where value truly rises with the number of users or complementors. Do not force network-effect thinking onto a local service, where one customer's value is unaffected by how many others you have.Technology Strategy 15.912-fall-2008
Durable advantage is usually worse-before-better, carried by trust.
Long-run advantage tends to come from investments that lower short-term performance before they pay off, and the ability to make those bets rests on relationships built on trust, inside the firm and with partners. It reframes the soft stuff (culture, incentives) as the hard mechanism that lets you do the patient things rivals cannot sustain. Built from cases like Toyota and Southwest.Most relevant when you are building something defensible over years. A business under acute cash pressure may rationally take the near-term win first; this bet assumes you can absorb the dip.Advanced Strategy 15.963-spring-2008 (Prof. Rebecca Henderson)
Before any structure decision: all parties, all taxes, all costs.
A three-lens filter for entity form, compensation, and financing choices. Count the effect on every party (differences in their tax status are where the opportunity is), count implicit costs as well as explicit ones, and remember a tax is one business cost among many that cannot be minimized in isolation.This is a reasoning frame, not tax advice. The specific 2002-era rates are dated and a real decision needs a current professional, but the three lenses generalize well beyond taxes, to pricing and partnership terms.Taxes and Business Strategy 15.518-fall-2002
When buyers cannot judge quality, design for trust and selection.
Where buyers cannot fully verify quality up front (services, anything with a delayed outcome, anything sold on trust), the offer you put out decides which customers it attracts and how they behave. Price and guarantees are not just margin levers, they sort your customer base, and reputation becomes a core asset.Strongest in high-trust, high-stakes sales. The behavioral levers (defaults, framing) are powerful and easy to misuse; the honest use is reducing the customer's real uncertainty, not exploiting a bias.Consumer Finance 15.483-spring-2018 · Strategy and Information 14.16-spring-2016
Three separate questions, not one. Most operators only answer the first. After Technology Strategy 15.912-fall-2008.
How a technology, and the firm around it, matures. The basis of competition shifts as you move along the curve. After Advanced Strategy 15.963-spring-2008.