This course offers the “essential” tool-kit of the executive involved in the strategy process—the key ideas, concepts, and tools that are necessary to properly exercise strategic leadership. The course is divided into two parts. The first focuses on the strategy problem at the business unit level. It is at the business unit level that many key strategic choices and actions are formulated and undertaken. This part of the course starts by proposing a vocabulary and an analytical structure that help define competitive advantage precisely. It then tackles the question of how a strategic leader can locate opportunities to achieve sustained competitive advantage. This part of the course concludes with a discussion of why strategic leaders should be not only competent “practitioner economists”––the ability to read market forces is the traditional focus of competitive strategy analysis and tools––but also competent “practitioner psychologists,” and what developing such competence entails. The second part of the course focuses on the challenge of managing multiple business units. In particular, it focuses on how a strategic leader can determine the ideal horizontal and vertical scope for her firm and what that implies for mergers, acquisitions, and various typologies of alliances. Students take the first half of the Strategy course in the fall term, and the second half in the spring.