Table of Contents

1. Introduction 1

2. Business Strategy 19

3. Competitive Advantage 39

4. Internal Context: Organization Design 65

5. Organization and Competitive Advantage 93 

6. External Context: Industry Analysis 119

7. The Spectrum of Competition and Niche Markets 149

8. Competition in Concentrated Markets 185

9. Entry and the Advantage of Incumbency 215

10. Creating and Capturing Value in the Value Chain 239

11. Strategic Management in a Changing Environment 271

12. Strategy in Markets With Demand-Side Increasing Returns 305

13. Globalization and Strategy 329

14. Corporate Strategy: Managing for Value in a Multibusiness Company 351

15. The Strategy Process 381

Appendix: Applying Game Theory to Strategic Management 405

Credits 427

Index 429

About the Author

Garth Saloner is the Jeffrey S. Skoll Professor of Electronic Commerce, Strategic Management and Economics at the Graduate School of Business at Stanford University where he has headed the Strategic Management group since 1990. He has taught strategic management, competitive strategy and e-commerce courses for MBAs and in executive education. He served as Associate Dean for Academic Affairs and Director of Research and Curriculum Development from 1993-1996. He has served as a Co-Editor of the Rand Journal of Economics and on the editorial boards of the Strategic Management Journal, the International Journal of Industrial Organization, and Economics of Innovation and New Technology. He has also served as a member of the Steering Committee of the National Bureau of Economic Research Program in Industrial Organization and is a Research Associate in that program. Professor Saloner has a Ph.D. in Economics, Business, and Public Policy from Stanford.

Andrea Shepard is an Associate Professor of Strategic Management and Economics at the Graduate School of Business at Stanford University. Professor Shepard has taught strategic management, technology strategy and competitive strategy courses for MBA's and in executive education. She has served as a Co-Editor of the Journal of Industrial Economics, the Journal of Economics and Management, and as an Associate Editor for Business Policy at Management Science. She is a Research Associate at the National Bureau of Economic Research and has served on the Program Committee for the Econometric Society. Prior to joining Stanford's GSB, she was a member of the Economics Department faculty at the Massachusetts Institute of Technology. Professor Shepard has a Ph.D. in Economics from Yale University.

Joel Podolny is the William R. Timken Professor of Organizational Behavior and Strategic Management at the Graduate School of Business at Stanford University. He has taught MBA, executive, and Ph.D. courses in the areas of organizational behavior, organizational design, strategy, and global management. He is currently the Associate Dean for Academic Affairs. He served as consulting editor for the American Journal of Sociology. His articles have appeared in the Strategic Management Journal, Administrative Science Quarterly, American Journal of Sociology, and American Sociological Review. Professor Podolny has a Ph.D. in Sociology from Harvard University.