Boston Consulting Group on Strategy

CARL W. STERN has been with BCG for thirty-two years. He was the CEO of BCG from 1997 to 2003 and presently serves as co-chairman of the board. He holds an MBA from Stanford Business School. MICHAEL S. DEIMLER is a Senior Vice President in the Atlanta office of BCG and the leader of its strategy practice. He holds an MBA from The Wharton School.

"Essential reading for anyone with a serious interest in strategy." (Long Range Planning, 40/2007)

• Foreword xiiiPreface xvAcknowledgments xviiPart One The Nature of Business StrategyStrategic and Natural Competition, Bruce D. Henderson, 1980 2Part Two The Development of Business StrategyFoundations 9The Experience Curve Reviewed: History, Bruce D. Henderson, 1973 12The Experience Curve Reviewed: Why Does It Work? Bruce D. Henderson, 1974 15The Experience Curve Reviewed: Price Stability, Bruce D. Henderson, 1974 18The Pricing Paradox, Bruce D. Henderson, 1970 24The Market-Share Paradox, Bruce D. Henderson, 1970 27More Debt or None? Bruce D. Henderson, 1972 29The Rule of Three and Four, Bruce D. Henderson, 1976 31The Product Portfolio, Bruce D. Henderson, 1970 35The Real Objectives, Bruce D. Henderson, 1976 38Milestones 40Life Cycle of the Industry Leader, Bruce D. Henderson, 1972 43The Evils of Average Costing, Richard K. Lochridge, 1975 46Specialization or the Full Product Line, Michael C. Goold, 1979 48Stalemate: The Problem, John S. Clarkeson, 1984 51Business Environments, Richard K. Lochridge, 1981 56Revolution on the Factory Floor, Thomas M. Hout and George Stalk Jr., 1982 59Time—The Next Source of Competitive Advantage, George Stalk Jr., 1988 63Competing on Capabilities: The New Rules of Corporate Strategy, George Stalk Jr., Philip B. Evans, and Lawrence E. Shulman, 1992 82Strategy and the New Economics of Information, Philip B. Evans and Thomas S. Wurster, 1997 99Collaboration Rules, Philip Evans and Bob Wolf, 2005 120Part Three The Practice of Business StrategyThe Customer: Segmentation and Value Creation 137Segmentation and Strategy, Seymour Tilles, 1974 139Strategic Sectors, Bruce D. Henderson, 1975 141Specialization, Richard K. Lochridge, 1981 143Specialization: Cost Reduction or Price Realization, Anthony J. Habgood, 1981 145Segment-of-One® Marketing, Richard Winger and David Edelman, 1989 147Discovering Your Customer, Michael J. Silverstein and Philip Siegel, 1991 151Total Brand Management, David C. Edelman and Michael J. Silverstein, 1993 154Pricing Myopia, Philippe Morel, George Stalk Jr., Peter Stanger, and Peter Wetenhall, 2003 157Trading Up, Michael J. Silverstein and Neil Fiske, 2003 and 2005 162Trading Down: Living Large on $150 a Day, Lucy Brady and Michael J. Silverstein, 2005 168Innovation and Growth 173From the Insight Out, Michael J. Silverstein, 1995 174Capitalizing on Anomalies, Lawrence E. Shulman, 1997 176Breaking Compromises, George Stalk Jr., David K. Pecaut, and Benjamin Burnett, 1997 179A New Product Every Week? Lessons from Magazine Publishing, Gary Reiner and Shikhar Ghosh, 1988 183Innovating for Cash, James P. Andrew and Harold L. Sirkin, 2003 186Acquiring Your Future, Mark Blaxill and Kevin Rivette, 2004 189Deconstruction of Value Chains 194The New Vertical Integration, John R. Frantz and Thomas M. Hout, 1993 195The Deconstruction of Value Chains, Carl W. Stern, 1998 198How Deconstruction Drives De-Averaging, Philip B. Evans, 1998 201Thinking Strategically about E-Commerce, Philip B. Evans and Thomas S. Wurster, 1999 205From “Clicks and Mortar” to “Clicks and Bricks,”Philip B. Evans and Thomas S. Wurster, 2000 208Thermidor: The Internet Revolution and After, Philip B. Evans, 2001 210The Online Employee, Michael S. Deimler and Morten T. Hansen, 2001 214Richer Sourcing, Philip B. Evans and Bob Wolf, 2004 218The Real Contest between America and China, Thomas Hout and Jean Lebreton, 2003 223Performance Measurement 227Profit Center Ethics, Bruce D. Henderson, 1971 229The Story of Joe (A Fable), Bruce D. Henderson, 1977 232Controlling for Growth in a Multidivision Business, Patrick Conley, 1968 234Making Performance Measurements Perform, Robert Malchione, 1991 237Economic Value Added, Eric E. Olsen, 1996 240New Directions in Value Management, Eric E. Olsen, 2002 244Workonomics, Felix Barber, Jeff Kotzen, Eric Olsen, and Rainer Strack, 2002 248Resource Allocation 254Cash Traps, Bruce D. Henderson, 1972 255The Star of the Portfolio, Bruce D. Henderson, 1976 258Anatomy of the Cash Cow, Bruce D. Henderson, 1976 259The Corporate Portfolio, Bruce D. Henderson, 1977 262Renaissance of the Portfolio, Anthony W. Miles, 1986 265Premium Conglomerates, Dieter Heuskel, 1996 268The End of the Public Company—As We Know It, Larry Shulman, 2000 271Advantage, Returns, and Growth—In That Order, Gerry Hansell, 2005 275Organizational Design 281Profit Centers and Decentralized Management, Bruce D. Henderson, 1968 282Unleash Intuition, Richard K. Lochridge, 1984 285Network Organizations, Todd L. Hixon, 1989 289The Myth of the Horizontal Organization, Philippe J. Amouyal and Jill E. Black, 1994 292The Activist Center, Dennis N. Rheault and Simon P. Trussler, 1995 295Shaping Up: The Delayered Look, Ron Nicol, 2004 298A Survivor’s Guide to Organization Redesign, Felix Barber, D. Grant Freeland, and David Brownell, 2002 302Leadership and Change 309Why Change Is So Difficult, Bruce D. Henderson, 1967 310Leadership, Bruce D. Henderson, 1966 312How to Recognize the Need for Change, Carl W. Stern, 1983 315Sustained Success, Alan J. Zakon and Richard K. Lochridge, 1984 318Strategy and Learning, Seymour Tilles, 1985 323Let Middle Managers Manage, Jeanie Daniel Duck, 1991 327Jazz versus Symphony, John S. Clarkeson, 1990 330The Change Curve, Jeanie Daniel Duck, 2001 333Leadership in a Time of Uncertainty, Bolko von Oetinger, 2002 342Leading in Emotional Times, Jeanie Daniel Duck, 2002 345The Forgotten Half of Change, Luc de Brabandere, 2005 347Part Four Business ThinkingBusiness Thinking, Bruce D. Henderson, 1977 354Brinkmanship in Business, Bruce D. Henderson, 1967 357Business Chess, Rudyard L. Istvan, 1984 361Probing, Jonathan L. Isaacs, 1985 366Creative Analysis, Anthony W. Miles, 1987 369Make Decisions Like a Fighter Pilot, Mark F. Blaxill and Thomas M. Hout, 1987 370The Seduction of Reductionist Thinking, Jeanie Daniel Duck, 1992 373Choices, Again, Barry Jones and Larry Shulman, 2003 376The Hardball Manifesto, George Stalk Jr. and Rob Lachenauer, 2004 377Part Five Social Commentary Failure to Compete, Bruce D. Henderson, 1973 383Inflation and Investment Return, Bruce D. Henderson, 1974 384Conflicting Tax Objectives, Bruce D. Henderson, 1975 385Dumping, Bruce D. Henderson, 1978 387Adversaries or Partners? Bruce D. Henderson, 1983 389The Promise of Disease Management, Joshua Gray and Peter Lawyer, 1995 393Making Sure Independent Doesn’t Mean Ignorant, Colin Carter and Jay W. Lorsch, 2002 400Index 405