Competitive Solutions is an entertaining and wideranging introduction to successful business methods applied to a variety of real-world situations. Rejecting the one-size-fits-all premise that underlies so many guides to business strategy, Preston Mc Afee develops the intellectual tools and insights needed to confront many marketplace problems. Drawing on his broad experience as a consultant for major U.S. companies, as well as extensive research, Mc Afee emphasizes cooperation, pricing, litigation, and antitrust as vital to a firm’s competitive posture–and focuses more attention on these elements than do most business strategy accounts.
Mc Afee begins by considering strategy as successfully applied by America On Line, an example that introduces many of the tools discussed in greater depth throughout the book. From here he moves to industry analysis: By examining the context for developing a strategy, he points out uses of positioning and differentiation that enable a firm to weaken price competition and deter rivals from stealing customers. Mc Afee’s exploration of a product’s life cycle proves an invaluable guide to positioning new technology in order to maximize the potential for future customers.
In the centerpiece of the book, Mc Afee lays out a how-to manual for cooperation, providing tactics crucial for setting standards, lobbying the government, and fostering industry growth. Writing in a conversational manner, Mc Afee also addresses such deep topics as organizational design and employee compensation and incentives. More detailed discussions examine antitrust enforcement, which is an increasingly important constraint on strategy, as well as strategies for pricing, bidding, signaling, and bargaining.
This book is a fascinating examination of modern business strategy and its application in many different settings. Students of business and economics–as well as executives and managers–will recognize Competitive Solutions as an indispensable resource as well as a definitive vision of the strategic firm: one in which each element of company strategy reinforces the other elements.
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R. Preston Mc Afee is J. Stanley Johnson Professor of Business, Economics, and Management at the California Institute of Technology. One of North America’s leading experts in industrial organization, he is the author of dozens of papers on antitrust, pricing, auctions, and business strategy and coeditor of theAmerican Economic Review. Mc Afee codesigned the Federal Communication Commission’s PCS auctions, which raised $20 billion, and served as an expert for the Federal Trade Commission on a variety of matters, including the Exxon-Mobil and BP-Arco mergers.
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