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Installments in the series:
What Keeps High Profits High?
This series recounts some of my own explorations into one of the fundamental questions in business strategy: What keeps competition from wiping out differences in performance? Or, put differently, What keeps high-profits high? The series is unabashedly academic in tone and substance. Indeed, one purpose in writing the series is to communicate a bit of what it is like to do scholarly research.
Introducing a series on fundamental research in business strategy
For me, there is a special excitement in fundamental questions—their childlike simplicity covers deep mysteries. A student once asked physicist John Wheeler: “What is time?” Wheeler replied, “Time is what prevents everything from happening at once.” Just as time is
The spurious relationship between market share and profitability
The strategy field’s first systematic theory about these sustained differences in performance attributed them to learning and market-share. Indeed, during the late 1970s, almost every book, paper, and address on business strategy put learning and market-share on center stage. Today
Uncertain imitability explains most stylized facts about industry
In 1982, Steven Lippman and I offered a very general logical answer to the puzzle of sustained differences in efficiency or effectiveness. Our theory—uncertain imitability—argued that the inability to understand and explain the sources of efficiency differences is precisely what
Industry matters but strategy matters more
When I studied economics in the early 1970s, the totally dominant point of view in academic circles was that differences in profit rates were industry effects. High profits were due, it was argued, to muted competition taking place behind high