Competitive strategy

Editor’s note: For an opposing viewpoint on this topic, see Robert E. Litan’s and Hal J. Singer’s entry “Why Business Should Oppose Net Neutrality.” In business school, where I teach, students are often predisposed to see legal concepts as impenetrable and foreign. I watch the lightbulbs go on as they see that Microsoft’s antitrust woes, […]

During the past 25 years an increasing proportion of U.S. companies have seen wisdom in pursuing a strategy of diversification. Between 1950 and 1970, for example, single-business companies comprising the Fortune “500” declined from 30% to 8% of the total. Acquisition has become a standard approach to diversification. In recent years the productivity of capital […]

On the basis of a sample from the top 200 of the Fortune “500” and data from the PIMS (Profit Impact of Market Strategies) project, this author gives some guidelines for established companies on what to expect from new ventures. He points out that it takes an average of 10 to 12 years before the […]

It’s the only way to make sound trade-off decisions and choose the right practices.

Imagine yourself solving an arithmetic problem with the top managers of a leading Japanese automobile company. As a group, Japanese producers already export 2.3 million passenger vehicles a year to the United States. They are also building capacity for an additional 2.5 million vehicles in North America. You remind your friends across the table that […]

Do you know the tale of Icarus? Icarus was a figure in Greek mythology who fashioned some wings out of feathers and beeswax to escape an island. So enamored...

Using weak signals to spur innovation

Managers should make environmental investments for the same reason they make other investments: because they expect them to deliver positive returns or to reduce risks.

Many managers of service businesses are aware that the strategic management (by which I mean the total process of selecting and implementing a corporate strategy) of service businesses is different from that of manufacturing businesses. This article discusses how pure service businesses are different from product-oriented businesses and why they require different strategic thinking. A […]

It prioritizes short-term profits over patients’ health.

While the global economy began slowing down in late 2007, forces transforming the face of business trace back more than a decade. Over that time period, technological improvements have made it ever easier to start and scale a business. Convergence went from being a cliché to a reality. Companies from countries like China, India, and […]

Marketers and finance people seldom see eye to eye. The makers say, “This product will open up a whole new market segment.” Finance people respond, “It’s a bad investment. The IRR is only 8%.” Why are they so often in opposition? The financial criteria used to decide if a project will be profitable are entirely […]

Newcomers may have the will, but industry insiders have the way.

The days of "buying" loyalty with rewards or rebates are over.

Political scientists, legislators, educators, business executives, lawyers, consumerists—practically everyone, it sometimes seems—is calling for better public management. For businessmen, the need is especially important because they feel surrounded by government institutions with which they are legally required to interact. But enthusiasm for good government is one thing; understanding the nature of it, to say nothing […]

Lessons from Microsoft, NVIDIA, Netflix, Tesla, and others.

GenAI tools are increasingly built on the same underlying models. To get ahead, companies need to look elsewhere for advantages.

Answers from Hank Paulson, former U.S. Treasury secretary, and other corporate and government leaders.

Very few studies have quantified disruption. This one does.

Don’t let your competitors control what “sustainable” means in your industry.