DescriptionEconomics of Strategy focuses on the key economic concepts students must master in order to develop a sound business strategy. Ideal for undergraduate managerial economics and business strategy courses, Economics of Strategy offers a careful yet accessible translation of advanced economic concepts to practical problems facing business managers. Armed with general principles, today's students--tomorrows future managers--will be prepared to adjust their firms business strategies to the demands of the ever-changing environment.
INTRODUCTION: STRATEGY AND ECONOMICS
Why Study Strategy?
So What’s the Problem?
A Framework for Strategy
ECONOMICS PRIMER: BASIC PRINCIPLES
Economic Costs and Profitability
Demand and Revenues
Total Revenue and Marginal Revenue Functions
Theory of the Firm: Pricing and Output Decisions
PART ONE FIRM BOUNDARIES
1 THE POWER OF PRINCIPLES: AN HISTORICAL PERSPECTIVE
Doing Business in 1840
Doing Business in 1910
Doing Business Today
Three Different Worlds: Consistent Principles, Changing Conditions, and Adaptive Strategies
2 THE HORIZONTAL BOUNDARIES OF THE FIRM
Scale Economies, Indivisibilities, and the Spreading of Fixed Costs
Special Sources of Economies of Scale and Scope
Complementarities and Strategic Fit
Sources of Diseconomies of Scale
The Learning Curve
Why Do Firms Diversify?
Managerial Reasons for Diversification
The Market for Corporate Control and Recent Changes in Corporate Governance
Performance of Diversified Firms
3 THE VERTICAL BOUNDARIES OF THE FIRM
Make versus Buy
Reasons to “Buy”
Reasons to “Make”
Summarizing Make-or-Buy Decisions: The Make-or-Buy Decision Tree
4 INTEGRATION AND ITS ALTERNATIVES
What Does It Mean to Be “Integrated”?
Making the Integration Decision
Alternatives to Vertical Integration
PART TWO MARKET AND COMPETITIVE ANALYSIS
5 COMPETITORS AND COMPETITION
Competitor Identification and Market Definition
Measuring Market Structure
Market Structure and Competition
Evidence on Market Structure and Performance
6 ENTRY AND EXIT
Some Facts about Entry and Exit
Entry and Exit Decisions: Basic Concepts
Evidence on Entry-Deterring Behavior
An Entry Deterrence Checklist
Entering a New Market
7 DYNAMICS: COMPETING ACROSS TIME
Impediments to Coordination
Asymmetries among Firms and the Sustainability of Cooperative Prices
Where Does Market Structure Come From?
Sutton’s Endogenous Sunk Costs
8 INDUSTRY ANALYSIS
Performing a Five-Forces Analysis
Coopetition and the Value Net
Applying the Five Forces: Some Industry Analyses
PART THREE STRATEGIC POSITION AND DYNAMICS
9 STRATEGIC POSITIONING FOR COMPETITIVE ADVANTAGE
Competitive Advantage and Value Creation: Conceptual Foundations
Strategic Positioning: Cost Advantage and Benefit Advantage
Diagnosing Cost and Benefit Drivers
Strategic Positioning: Broad Coverage versus Focus Strategies
10 INFORMATION AND VALUE CREATION
The “Shopping Problem”
The Certifier Market
11 SUSTAINING COMPETITIVE ADVANTAGE
Market Structure and Threats to Sustainability
The Resource-Based Theory of the Firm
Impediments to Imitation
Imperfect Imitability and Industry Equilibrium
Creating Advantage and Creative Destruction
Innovation and the Market for Ideas
Evolutionary Economics and Dynamic Capabilities
PART FOUR INTERNAL ORGANIZATION
12 PERFORMANCE MEASUREMENT AND INCENTIVES
The Principal–Agent Relationship
Problems with Performance-Based Incentives
Performance Measures That Fail to Reflect All Desired Actions
Selecting Performance Measures: Managing Trade-offs between Costs
Do Pay-for-Performance Incentives Work?
Implicit Incentive Contracts
Efficiency Wages and the Threat of Termination
Incentives in Teams
13 STRATEGY AND STRUCTURE
An Introduction to Structure
Types of Organizational Structures
Structure Follows Strategy
14 ENVIRONMENT, POWER, AND CULTURE 456
The Social Context of Firm Behavior
External Context, Institutions, and Strategies
Extended Coverage Expanded and updated treatment of key areas such as the economics of innovation, strategic sources, value creation, commitment and dynamics, emerging economies, information disclosure with examples of Facebook and Google, and the practice of using intelligence to identify a firm’s top competitors.
New Examples Additional examples with more variety of topics involving international business and business practices from the eighteenth century to present day.
Applications Practical applications through Financial Statement Analysis exercises that relate to real companies in virtually every chapter.
Easy Assessment New automatically graded multiple-choice test bank questions make assessment simple to create and schedule in WileyPLUS Learning Space.
WileyPLUS Learning Space addresses the challenges of student readiness and retention, and helps instructors and students improve learning outcomes by integrating course content with learning tools, assessment, and practice activities in one platform.
Designed to engage today’s student, WileyPLUS Learning Space is an easy way to help your students learn, collaborate, and grow. Using the Course Stream and dynamic e-textbook, students will ask more questions, share more insights, and see how their participation leads to progress.