How Industries Evolve: Principles for Achieving and Sustaining Superior Performance

Book Description
An Insightful Model for Understanding Industry ChangeFrom Xerox to K-Mart to Sotheby's, great companies have failed to translate extraordinary innovation into better profitability. Why does this happen?Anita M. McGahan argues that great companies fail to profit from investments in innovation when they break their industries' rules for how change can take hold. In this book, she shows how to develop a strategy that is aligned with the rules of industry change. By understanding and operating within the rules, executives can better appreciate the tradeoffs that are unique to each company's evolutionary path-and consequently improve performance by making smarter, more profitable strategic bets.How Industries Evolve is based on extensive statistical studies of 700 global industries and more than twenty-five case studies. McGahan identifies four models of industry evolution-progressive, creative, radical, and intermediating-and shows how a company can diagnose which model most closely describes the trajectory of change in its industry. The book then explains how company strategists can use their understanding of this model to carefully coordinate choices about R&D, alliances, internal venturing, leadership style, compensation, modularization, and time-to-market.By supporting executives' efforts to recognize and respond to shifts in industry structure, this book will ultimately help companies to achieve and sustain superior performance.

About the Author
Anita M. McGahan is Professor and Chairman of Strategy and Policy at Boston University School of Management, and a Senior Institute Associate at Harvard's Institute for Strategy and Competitiveness.


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"In How Industries Evolve, McGahan convincingly shows that while industries sometimes seem to change overnight, they actually evolve in predictable stages across decades. Executives can learn to identify the implications of change far in advance - and align their strategies in a way that vastly improves their chances for superior performance." Based on a ten-year statistical research study encompassing more than seven hundred industries, How Industries Evolve identifies four distinct evolutionary paths that an industry can take - progressive, creative, intermediating, or radical - and explains the different requirements each holds for successful strategy. This book provides a model for determining which trajectory your industry is on, and identifies the boundaries that govern successful strategy for each trajectory.


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