*One of Strategy & Business's Best Business Books for 2003*
Competitive Solutions is an entertaining and wide ranging 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 McAfee 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, McAfee emphasises 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. McAfee begins by considering strategy as successfully applied by America OnLine, 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. McAfee's exploration of a product's life cycle proves an invaluable guide to positioning new technology in order to maximise the potential for future customers.
In the centrepiece of the book, McAfee 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, McAfee also addresses such deep topics as organisational 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, signalling, 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 recognise 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.
'[T]his book does an excellent job of translating the insights of modern IO into language that business students can readily grasp...I am confident that this is a book that will be received by good students and will serve well as the main text in any strategy course that approaches the topic.' - Benjamin E. Hermalin, Journal of Economic Literature
