Economics of Strategy

by David Besanko, David Dranove, Mark Shanley

Economics of Strategy focuses on the key economic concepts students must master in order to develop a sound business strategy. Ideal for undergraduate managerial economics and business strategy courses, Economics of Strategy offers a careful yet accessible translation of advanced economic concepts to practical problems facing business managers. Armed with general principles, today's students--tomorrows future managers--will be prepared to adjust their firms business strategies to the demands of the ever-changing environment.  

Genres: Economics, Business, Nonfiction, Management, Finance, Textbooks, School

544 pages, Paperback

First published December 15, 1995

About the author

David Besanko is the IBM Professor of Regulation and Competitive Practice at Northwestern University’s Kellogg School of Management, where he teaches public economics and infrastructure strategy. A Northwestern Ph.D. graduate, he joined the Kellogg faculty in 1991 after previous positions at Indiana University and Bell Communications Research. His research explores the intersection of competitive strategy, public policy, and regulation, with work published in top journals including American Economic Review, Econometrica, and Management Science. He is co-author of the textbooks Microeconomics and Economics of Strategy, as well as Corporate Reputation and Social Activism. Besanko has won numerous teaching honors, including three L.G. Lavengood Professor of the Year Awards, making him the only three-time recipient. He has also received the Aspen Institute’s Faculty Pioneer Award and multiple Kellogg teaching awards. Besanko served in leadership roles as Senior Associate Dean for Academic Affairs at Kellogg in both curriculum and strategy.

Reviews

[Eny Rebel · Rating 3 out of 5]

This book provides valuable theoretical and practical information on strategy. Well structured and understandable. I read it as a part from preparation of my Strategic course for Graduate School. If you are a grad student, go for it.

[Timothy Chklovski · Rating 5 out of 5]

This textbook is comprehensive and well-written, over viewing a lot of ground about how firms and markets organize and evolve.
A big highlight for me were the "green boxes" -- the sidebar examples, many of which were interesting and surprising (did you know that cement industry is organized differently in US, Mexico, and Brazil? Did you know Samsung evolved from a very top-down organization focused on volume to much more innovative, risk-taking producer of quality goods?)


Being a textbook, the book provides questions at the end of each chapter, which were helpful in deepening one's understanding and suggesting connections between topics in the text.


Without getting overly theoretical, the book does provide simple economic models -- which are useful in shedding light on topics such as pricing and profit levels in oligopolies. Perhaps the most valuable parts to me were the treatment of oligopoly and discussion of market structure -- including the role of endogenous costs in giving rise to soft-drink-like markets with few dominant forms and many small entrants.


As the title would suggest, the book offers an economics perspective on structure of markets, role of differentiation in strategy, and even internal structure of the firm. Also useful was the treatment of micro and macro dynamics of competition -- both are important to understand if one wants to pick firms which are likely to, for example, attain and retain market dominance, or coexist profitably with other market powers.


Weighing in at around 500 pages of dense network of theories and data, this book took considerable effort to work through, but it amply rewards the effort invested.

[Gerrit Gmel · Rating 4 out of 5]

Very good first half, average second half. The book has some excellent modern examples and taking as mathematical an approach as possible for the topic suits me. This worked really well in the first parts, discussing competition, entry/exit, and competitive advantages. The second half which focuses more on internal organisation and some aspects of value creation and such were rather weak and verbose…

[Peter · Rating 4 out of 5]

Course handbook for economics of strategy course. Some of the concepts included in the book are those of game theory, positioning, competition and organizational readiness for competitive performance linked to financial incentives. These are all fundamental concepts that every business professional should be aware of, put in a concise but maybe a bit too text-heavy format.

[Olof · Rating 4 out of 5]

+Applies macro & micro- economic theory to practical issues.
+Provides many interesting case examples from actual companies.
+Gives a good overview of contrasting theories from a historical perspective.

[Sivananthi T · Rating 5 out of 5]

A must-read for those who want to learn about strategy

[Krishna Mootoosamy · Rating 4 out of 5]

Brilliant book that outlines various different concepts of strategies that can be found in any firm.
The star factor for me are the real-life/anecdotal examples that are given to help readers apply these concepts to real issues amongst firms, and hence improve their understanding.
Worth every penny.

[Tatiana Pecherskaya · Rating 3 out of 5]

The book can be used as a starter for understanding a concept of business competition, competitive environment and strategy. It contains numerous case studies and provides a useful framework for further readings on the topic.

[Nivas · Rating 5 out of 5]

Read this in B school. Strategy textbook

[Velvetink]

Gave to L for uni.

[Chris · Rating 5 out of 5]

God tier textbook.

[Lester · Rating 4 out of 5]

An excellent and concise depiction of current theories and aspects of the subject. Very readable and well laid out.

[Ks Pillai · Rating 3 out of 5]

Good book on Organizational Economics driven strategy

[Mohamed · Rating 4 out of 5]

I read it as a part from my study for EMBA at Manchester business school, great and easy to understand

[Bigd · Rating 5 out of 5]

Excellent book.