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| Introduction: Strategy and Economics | |
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| Why Study Strategy? | |
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| Why Economics? | |
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| The Need for Principles | |
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| So What's the Problem? | |
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| The Rise and Fall of the New Economy's Darling: The Enron Story | |
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| A Framework for Strategy | |
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| Boundaries of the Firm | |
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| Market and Competitive Analysis | |
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| Position and Dynamics | |
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| Internal Organization | |
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| Endnotes | |
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| Primer: Economic Concepts for Strategy | |
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| Costs | |
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| Cost Functions | |
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| The Importance of the Time Period: Long-Run versus Short-Run Cost Functions | |
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| Sunk versus Avoidable Costs | |
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| Economic Costs and Profitability | |
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| Economic versus Accounting Costs | |
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| Economic Profit versus Accounting Profit | |
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| Economic Profit and Net Present Value | |
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| Demand and Revenues | |
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| Demand Curve | |
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| The Price Elasticity of Demand | |
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| Total Revenue and Marginal Revenue Functions | |
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| Theory of the Firm: Pricing and Output Decisions | |
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| Perfect Competition | |
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| Game Theory | |
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| Games in Matrix Form and the Concept of Nash Equilibrium | |
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| Game Trees and Subgame Perfection | |
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| Endnotes | |
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| Firm Boundaries | |
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| The Evolution of the Modern Firm | |
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| The World in 1840 | |
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| The Emergence of Chicago | |
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| The World in 1910 | |
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| Evolution of the Steel Industry | |
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| The World Today | |
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| Economic Gyrations and Traffic Gridlock in Thailand | |
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| Three Different Worlds: Consistent Principles, Changing Conditions, and Adaptive Strategies | |
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| Infrastructure and Emerging Markets: The Russian Privatization Program | |
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| Building National Infrastructure: The Transcontinental Railroad | |
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| The Risks of Modernity: The Halifax Explosion of 1917 | |
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| Parties, Scandals, and Directors Behaving Badly: After the Ball | |
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| Blaming Wal-Mart: The Prequel | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| The Horizontal Boundaries of the Firm: Economies of Scale and Scope | |
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| Where Do Economies of Scale Come From? | |
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| Where Do Scale Economies Come From? | |
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| Hub-and-Spoke Networks and Economies of Scope in the Airline Industry | |
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| The Division of Labor in Medical Markets | |
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| Special Sources of Economies of Scale and Scope | |
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| The Ace Hardware Corporation | |
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| The Pharmaceutical Merger Wave | |
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| Sources of Diseconomies of Scale | |
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| The AOL Time Warner Merger and Economies of Scope | |
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| The Learning Curve | |
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| The Boston Consulting Group Growth/Share Paradigm | |
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| Chapter Summary | |
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| Questions | |
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| Using Regression Analysis to Estimate the Shapes of Cost Curves | |
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| Endnotes | |
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| The Vertical Boundaries of the Firm | |
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| Make versus Buy | |
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| Vertical Disintegration in the Pharmaceutical Industry | |
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| Self-Insurance by British Petroleum | |
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| Reasons to "Buy" | |
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| Getting "Connected" at Sony | |
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| Reasons to "Make" | |
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| The Fundamental Transformation in the U.S. Automobile Industry | |
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| Power Barges | |
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| Underinvestment in Relationship-Specific Assets by British Subcontractors | |
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| Summarizing Make-or-Buy Decisions: The Make-or-Buy Decision Tree | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Organizing Vertical Boundaries: Vertical Integration and Its Alternatives | |
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| Technical Efficiency versus Agency Efficiency | |
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| Vertical Integration in a Mountain Paradise | |
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| An Application of the Make-or-Buy Framework to Children's Memorial Hospital | |
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| Vertical Integration of the Sales Force in the Insurance Industry | |
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| Process Issues in Vertical Mergers | |
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| Alternatives to Vertical Integration | |
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| Tapered Integration in Gasoline Retailing | |
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| Amicore Comes to the Aid of Physicians | |
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| Interfirm Business Networks in the United States: The Women's Dress Industry in New York City | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Diversification | |
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| A Brief History | |
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| Changes in Diversification, from American Can to Primerica | |
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| Why Do Firms Diversify? | |
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| Acquiring for Synergy: Procter & Gamble Buys Gillette | |
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| Managerial Reasons for Diversification | |
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| The Rise and Fall of an Industrial Conglomerate: The Strange Case of Tyco International | |
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| Performance of Diversified Firms | |
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| The Search for Synergy in New Markets: Ebay's Acquisition Binge | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Market and Competitive Analysis | |
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| Competitors and Competition | |
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| Competitor Identification and Market Definition | |
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| Substitutes and Competition in the Postal Service | |
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| Measuring Market Structure | |
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| Defining Coca-Cola's Market | |
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| Market Structure and Competition | |
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| A Dog-Eat-Dog World: The Demise of the On-line Pet Supply Industry | |
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| The OPEC Cartel | |
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| Pricing in the Airline Industry | |
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| Cournot Equilibrium in the Corn Wet Milling Industry | |
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| Evidence on Market Structure and Performance | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Strategic Commitment | |
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| Why Commitment Is Important | |
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| Loblaw Versus Wal-Mart Canada | |
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| Strategic Commitment and Preemption in the Global Airframe Market: Airbus versus Boeing | |
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| Commitment and Irreversibility in the Airline Industry | |
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| Strategic Commitment and Competition | |
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| Commitment at Nucor and USX: The Case of Thin-Slab Casting | |
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| Flexibility and Real Options | |
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| Commitment versus Flexibility in the CD Market | |
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| Corning's Nuclear Winter | |
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| A Framework for Analyzing Commitments | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| The Dynamics of Pricing Rivalry | |
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| Dynamic Pricing Rivalry | |
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| The General Motors Employee Discount Price War | |
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| What Happens When a Firm Retaliates Quickly to a Price Cut: Philip Morris versus B.A.T in Costa Rica | |
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| Forgiveness and Provocability: Dow Chemicals and the Market for Reverse Osmosis Membrane | |
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| How Market Structure Affects the Sustainability of Cooperative Pricing | |
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| Pricing Discipline in the U.S. Cigarette Industry | |
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| How Market Structure Conditions Conspire to Limit Profitability in the Heavey-Duty Truck Engine Industry | |
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| Facilitating Practices | |
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| Quality Competition | |
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| Quality Competition among U.S. Health Plans | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Entry and Exit | |
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| Some Facts about Entry and Exit | |
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| Entry and Exit Decisions: Basic Concepts | |
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| Hyundai's Entry into the Steel Industry | |
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| Emirates Air | |
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| Entry-Deterring Strategies | |
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| Limit Pricing by Brazilian Cement Manufacturers | |
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| Entry Barriers and Profitability in the Japanese Brewing Industry | |
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| Predatory Pricing in the Laboratory | |
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| Exit-Promoting Strategies | |
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| Symbian: Keeping Microsoft out of the Mobile Phone Business | |
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| Evidence on Entry-Deterring Behavior | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Industry Analysis | |
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| Performing a Five-Forces Analysis | |
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| Coopetition and the Value Net | |
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| Applying the Five Forces: Some Industry Analyses | |
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| Chapter Summary | |
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| Questions | |
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| Template for Doing a Five-Forces Analysis | |
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| Endnotes | |
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| Strategic Position and Dynamics | |
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| Strategic Positioning for Competitive Advantage | |
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| Competitive Advantage | |
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| Competitive Advantage and Value Creation: Analytical Tools and Conceptual Foundations | |
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| The Division of the Value-Created in the Sale of Beer at a Baseball Game | |
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| Kmart Versus Wal-Mart | |
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| Creating Value at Enterprise Rent-A-Car | |
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| Measuring Capabilities in the Pharmaceutical Industry | |
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| Strategic Positioning: Cost Advantage and Benefit Advantage | |
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| Cost Leadership by Cemex | |
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| Benefit Leadership by Superquinn | |
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| Strategic Positioning in the Airline Industry: Four Decades of Change | |
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| Strategic Positioning: Broad Coverage versus Focus Strategies | |
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| Chapter Summary | |
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| Questions | |
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| Appendix | |
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| Endnotes | |
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| Sustaining Competitive Advantage | |
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| How Hard Is It to Sustain Profits? | |
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| "Von-a-Bees" | |
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| Apex Digital | |
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| Exploiting Resources: The Mattel Story | |
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| American versus Northwest in Yield Management | |
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| Cola Wars: Slugging It Out in Venezuela | |
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| Switching Costs for the Newborn Set: Garanimals | |
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| The Microsoft Case | |
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| Imperfect Imitability and Industry Equilibrium | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| The Origins of Competitive Advantage: Innovation, Evolution, and the Environment | |
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| Creative Destruction | |
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| The Incentive to Innovate | |
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| The Sunk Cost Effect in Steel: The Adoption of the Basic Oxygen Furnace | |
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| Innovation and the Market for Ideas | |
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| R&D Spending and Firm Size in the Biotechnology Sector: The Role of Management | |
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| Innovation Competition | |
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| Patent Racing and the Invention of the Integrated Circuit | |
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| Organizational Adaptation in the Photolithographic Alignment Equipment Industry | |
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| Evolutionary Economics and Dynamic Capabilities | |
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| The Rise of the Swiss Watch Industry | |
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| The Environment | |
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| Competence, History, and Geography: The Nokia Story | |
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| Managing Innovation | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Agency and Performance Measurement | |
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| The Principal/Agent Framework | |
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| Agency Contracts in Franchising | |
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| Pay, Performance, and Selection at Safelite Glass | |
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| Costs of Tying Pay to Performance | |
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| Market Effects in Executive Compensation | |
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| Cardiovascular Surgery Report Cards | |
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| Selecting Performance Measures: Managing Tradeoffs Between Costs | |
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| Do Pay-for-Performance Incentives Work? | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Internal Organization | |
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| Incentives in Firms | |
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| Implicit Incentive Contracts | |
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| Promotion Tournaments at General Electric | |
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| Incentives in Teams | |
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| Stock Options for Middle-Level Employees | |
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| Career Concerns and Long-Term Employment | |
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| Career Concerns of Mutual Fund Managers | |
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| Incentives and Decision Making in Organizations | |
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| Teams and Communication in Steel Mills | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Strategy and Structure | |
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| An Introduction to Structure | |
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| ABB's Matrix Organization | |
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| Structure-Environment Coherence | |
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| Organizational Structure at AT&T | |
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| Structure Follows Strategy | |
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| Strategy, Structure, and the Attempted Merger Between the University of Chicago Hospital and Michael Reese Hospital | |
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| Samsung: Reinventing a Corporation | |
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| Transnational Strategy and Organization Structure At SmithKline-Beecham | |
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| WingspanBank.Com: A Network Organization | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Environment, Power, and Culture | |
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| The Social Context of Firm Behavior | |
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| Internal Context | |
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| Power | |
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| The Sources of Presidential Power | |
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| Power and Poor Performance: The Case of the 1957 Mercury | |
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| Gary Wendt at Conseco | |
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| Culture | |
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| Corporate Culture and Inertia at CPI | |
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| Politics, Culture, and Corporate Governance | |
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| External Context, Institutions, and Strategies | |
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| Institutions and Culture: The eBay IPO | |
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| Chapter Summary | |
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| Questions | |
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| Endnotes | |
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| Strategy and the General Manager | |
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| Introduction | |
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| A Historical Perspective on the General Manager | |
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| What Do General Managers Do? | |
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| Chapter Summary | |
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| Endnotes | |
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| Glossary | |
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| Name Index | |
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| Subject Index | |