KEY BENEFIT: Strategy and the Business Landscape is based on contemporary research in the field of strategy and adopts a value-focused, firm-centered perspective that promotes an analytical approach to strategy.
KEY TOPICS: Origins of strategy, mapping the business landscape, creating competitive advantage, anticipating competitive dynamics, sustaining superior performance, and choosing a corporate scope.
MARKET: This text is designed to help managers and business professionals master a body of analytical tools and develop an integrative point of view when making strategic choices.
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Pankaj Ghemawat is the Jaime and Josefina Chua Tiampo Professor of Business Administration at Harvard University's Graduate School of Business Administration and Head of the Strategy Unit. He received his Ph.D. in Business Economics from Harvard University, he worked as a consultant with McKinsey & Company in London during 1982 and 1983, and has taught at the Harvard Business School since then. In 1991, he was appointed the youngest full professor in the Business School's history. One strand of his research and teaching focuses on the dynamics of globalization and generic strategies for international firms. Another strand of his work is concerned with foundational issues in business strategy, particularly work on the topics of competitive dynamics, business scope, and complexity.
Professor Ghemawat's publications include Commitment (Free Press, 1991), Games Businesses Play (MIT Press, 1997), and Strategy and the Business Landscape (Addison Wesley Longman, 1999), as well as several dozen articles and case studies. He serves on the editorial boards of Management Science, Journal of International Business Studies, the Journal of Economics and Management Strategy, LongRange Planning, the Strategic Management Journal, and Strategic Organization.
This book grew out of my experience, over the last four years, teaching and then running Harvard Business School's required first-year course on Competition and Strategy My colleagues and I were dissatisfied with the strategy textbooks and disinclined to assign a mish-mash of book chapters and articles instead. As a result, I, along with some of them, began to write conceptual notes for our students. These notes, which have since been revised several times, constitute the core of this book.
Strategy and the Business Landscape has several distinguishing features.
First and perhaps most obviously, it begins with and maintains a historical perspective on the field of strategy This approach offers several advantages. It avoids imposing an arbitrary definition of strategy on the reader. Tracking changing conceptions of strategy can also help identify patterns in what might otherwise seem to be just the random churn of ideas. Most ambitiously, an understanding of the history of the field may foster an ability to sort through the continual barrage of new ideas—some good and others bad—about strategy.
Second, this book tries to be contemporary as well as historically grounded. Thus Chapter 2 begins by reviewing early work on environmental analysis, particularly Michael Porter's influential "five-forces" framework (which is standard practice), but goes on to discuss newer ways of thinking about the business landscape (which is not). Chapter 3 pursues a parallel line of development, starting with the early work on competitive positioning but culminating in the more recent conceptualizations of added value and rugged landscapes. Chapters 4 and 5 deal with dynamic issues—the sustainability of superior performance and the instrumental roles of capabilities and commitments—that most strategists have only begun to address since the mid-1980s.
Third, this book uses firm-centered, value-based logic to bridge some of the great debates about strategy. It addresses the debate about internal versus external focus by concentrating on the firm in relation to its environment, aided by the visual imagery of the business landscape. The debate about competition versus cooperation is channeled into the recognition that both kinds of relationships affect a firm's added value as well as its ability to sustain and appropriate some of that value over time. And the debate about the activity-system vs. resource-based views of the firm is dealt with at length in Chapter 5, which emphasizes both the complementarity of these two perspectives on strategy and the way in which they need to be extended.
Fourth, this book tries to be practical as well as rigorous. Key concepts are laid out succinctly (but with suggestions for additional reading in the notes). They are illustrated with rich examples, often drawn from consulting work. In addition, the process of actually applying these concepts to real-world situations is discussed in some detail.
Finally, this book focuses on business- rather than corporate-level strategy. While strategies at the corporate and business levels intersect to some extent Significant differences are also apparent in many of the management issues raised. In addition, corporate strategy may have less immediate relevance to most of the M.B.A. students taking an introductory course on strategy. Having said that, there are obviously a number of good readings on corporate strategy that can be assigned in conjunction with this book for a course whose scope extends to corporate- as well as business-level issues.
It would have been impossible to prepare this book without aid and support from a number of different quarters. My most obvious debt is to my coauthors on the individual chapters in this book, David J. Collis, Gary P Pisano, and Jan W. Rivkin. Each pushed the chapter in which he was involved to a new level. Each also provided copious feedback on some of the other chapters in this book, although none of the three should be presumed to agree entirely with the end-product.
I am also greatly indebted to the other colleagues with whom I have taught the Competition and Strategy course at Harvard. All of them have stimulated and sharpened my thinking about business strategy, and some of them have commented on earlier drafts of the chapters in this book as well. I am especially grateful to Adam Brandenburger, for developing and helping educate me about a number of the key ideas in this book, as well as for reading and commenting on a number of the draft chapters.
I owe another very important debt to our students in the Competition and Strategy course, who were an invaluable source of feedback on earlier versions of the chapters in this book. Their perspective on what worked and what didn't greatly helped reorganize and refine the exposition in this book.
In addition, I should thank a number of reviewers for their guidance:
–Ralph Biggadike, Columbia University
–Tina Dacin, Texas A&M University
–Daniel E. Levinthal, University of Pennsylvania
–Joseph T. Mahoney, University of Illinois at Urbana-Champaign
–George Puia, Indiana State University
–John A. Seeger, Bentley College
–Mark Shanley, Northwestern University
–Todd Zenger, Washington University
Finally, I am also very grateful to the teams assembled by Addison Wesley Longman and Prentice Hall for their support of this project; to my research associates, Bret Baird and Courtenay Sprague, for helping me push this work toward completion; to my exceptionally able assistant, Sharilyn Steketee, who made the process as painless as possible; and to my wife, Anuradha Mitra Ghemawat. Thank you all.
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