(Ebook) Economics of Strategy 6E International Student Version Premium Custom Edition by David Besanko, David Dranove, Scott Schaefer, Mark Shanley ISBN 9781119378761, 1119378761

(Ebook) Economics of Strategy 6E International Student Version Premium Custom Edition by David Besanko, David Dranove, Scott Schaefer, Mark Shanley ISBN 9781119378761, 1119378761

WHY STUDY STRATEGY?
To answer this question, we first have to understand what strategy is. Consider how
three leading contributors to the field define the concept of strategy:
. . . the determination of the basic long-term goals and objectives of an enterprise, and
the adoption of courses of action and the allocation of resources necessary for carrying
out these goals—Alfred Chandler1
. . . the pattern of objectives, purposes or goals, and the major policies and plans for
achieving these goals, stated in such a way as to define what business the company is in
or should be in and the kind of company it is or should be—Kenneth Andrews2
. . . what determines the framework of a firm’s business activities and provides guidelines
for coordinating activities so that the firm can cope with and influence the changing
environment. Strategy articulates the firm’s preferred environment and the type of
organization it is striving to become—Hiroyuki Itami3
These definitions have much in common. Phrases such as “long-term goals” and
“major policies” suggest that strategy has to do with the “big” decisions a business
organization faces, the decisions that ultimately determine its success or failure. The
emphasis on “pattern of objectives” and “the framework of a firm’s business” suggests
that strategy is revealed in terms of consistent behavior, which in turn implies that
strategy, once set, is not easy to reverse. Finally, the idea that strategy “defines . . . what
kind of company it is or should be” suggests that strategic decisions shape the firm’s
competitive persona, its collective understanding of how it is going to succeed within
its competitive environment.