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Over the last decade, many companies have
failed to generate substantial returns on their investments
in innovation. Executives lament that the pace of change
is too fast, forcing companies to make uninformed and often
costly decisions. But Anita McGahan argues there is a different
reason: Strategy fails when a company breaks the rules of
change in an industry.
In How Industries Evolve, McGahan
convincingly shows that while industries sometimes seem
to change overnight, they actually evolve in predictable
stages across decades. Executives can learn to identify
the implications of change far in advance -- and align their
strategies in a way that vastly improves their chances for
superior performance.
Based on a ten-year statistical research
study encompassing more than seven hundred industries, How
Industries Evolve identifies four distinct evolutionary
paths that an industry can take -- progressive, creative,
intermediating, or radical -- and explains the different
requirements each holds for successful strategy. This book
provides a model for determining which trajectory your industry
is on, and identifies the boundaries that govern successful
strategy for each trajectory. Using a wide range of company
examples, the book outlines diagnostic tools executives
can use to:
- Determine whether an industry's core
activities or assets are being threatened
- See the implications of structural change
before their competitors do
- Separate truly important developments
from temporary distractions
- Evaluate options for how to compete during
each phase of industry evolution
- Decide which forms of innovation will
work within the industry's context -- and which won't
- Better assess the tradeoffs in a specific
situation
- Use existing strengths to achieve an
enduring competitive advantage
By giving readers the tools to recognize
and respond to shifts in industry structure, How Industries
Evolve will ultimately help executives make strategic
decisions that keep them on the path to superior performance.
Anita M. McGahan is Everett V. Lord Distinguished
Faculty Scholar and Professor of Strategy & Policy at
the Boston University School of Management. She is also
Senior Institute Associate at Harvard's Institute for Strategy
and Competitiveness.
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