BOOK REPORT

Wharton on Dynamic Competitive Strategy



Wharton on Dynamic Competitive Strategy

Introduction

In Wharton on Dynamic Competitive Strategy George S. Day and David Reibstein write: "In light of the increasing intensity and velocity of competition, the ability of managers to formulate and implement competitive strategies has not kept pace. Consultants have stepped to offer an array of frameworks and methods. And, in their attempt to oversimplify strategy, these approaches often overlook crucial elements of the strategy process. Without a dynamic view of strategy, manager's risk clinging to strategies no longer work. Without a sophisticated view of the competition, managers risk oversimplifying or ignoring a potential threat or opportunity." Wharton on Dynamic Competitive Strategy is another new book on business strategy aimed at mid- to upper-level executives of businesses of virtually any size. It is a book written for practitioners by business school academics.

Discussion

Why read another strategy book? One reason is that the book has a distinctive marketing orientation. Another is the quality of its content. Although the University of Pennsylvania's Wharton School is best known for its finance work, it also is home to some of the best-known marketing thinkers, including George Day, Paul Green, Jerry Wind, and David Reibstein. This is not a beginner's textbook on strategy; we will get more out of it if we already know the basics. The book's 17 chapters wind through a lot of territory, starting with an overview of competitive advantage in changing environments. The main message is that the competitive environment changes quickly, which means that strategy must be capable of dealing with change. The second part of the book deals with anticipating competitors' actions. Three chapters explain three theoretically grounded approaches to anticipating competitor actions and reactions. The first chapter, on game theory, is easy to understand but less useful than it might have been. The next chapter discusses behavioral approaches to anticipating competitor moves. Again, it is highly simplified and omits a lot of what makes behavioral approaches interesting. We will learn something about the non-rational ways competitors make decisions, but we can spot a few of own irrationalities-the book shows how non-rational actions (non-rational in an economic game theoretic sense) can lead to results that are even better than "rational" actions (Teece, Pisano and Shuen, 1997).

The book contains additional chapters on sizing up competitors and their likely reactions, and a useful chapter on formulating strategies that respond to competitor's actions. For ...