Table of Contents Preface xiii Preamble xiii Contents xvi What Is Strategy? xviii Acknowledgments xix Chapter 1. Introduction 1 Executive Summary-- Introduction 7 Chapter 2. Industry Analysis 9 The Five Six Forces 9 Entry 11 Buyer Bargaining Power 16 Supplier Bargaining Power 18 Substitute Products 18 Rivalry 19 Complements-The Sixth Force 23 Strategies for Complements 26 Industry Structures 27 Fragmented Industry 28 Dominant Firm 30 Tight Oligopoly 33 Loose Oligopoly 34 Executive Summary -Industry Analysis 34 Chapter 3. Firm Strategies 36 Value/Cost Strategies 36 Quality Choice without Competition 37 Games and Best Responses 38 The Effects of Competition on Quality Choice 42 Accommodation and Dissuasion 44 Low-Cost Strategy 45 Cream-Skimming 47 Coherent Strategies 48 The Three-Layer Model 50 Stuck in the Middle 56 Dealing with Competitors 57 Executive Summary--Firm Strategies 58 Chapter 4. Differentiation 61 Competition in Differentiated Products 63 Creating Synergies 70 Quality Complementarities 74 Networks 75 Technological Races 78 Patent Strategy 80 Hedonic Prices 85 Executive Summary--Differentiation 89 Chapter 5. Product Life Cycle 91 Introduction 95 Growth 97 Maturity 98 Decline and Replacement 101 Summary of the Product Life Cycle 105 The Life Cycle for Durable Goods 108 Executive Summary--Product Life Cycle 112 Chapter 6. Cooperation 113 Cooperation on a Variety of Issues 113 Tacit Collusion 116 Shared Interest 116 Punishment 119 Recovery 124 Problems of Tacit Cooperation in Price 127 Confessions 128 Many Producers 129 Differentiated Products 129 Reaction Time 130 Environmental Randomness 132 Motivating Managers 132 Efficient Allocation within a Cartel 133 Unenforceable Contracts 135 Risky Communication 135 Small or Failing Firms 135 Entry and Substitutes 136 Competition in Other Dimensions 137 Solutions to Tacit Cooperation Problems 138 Industry Association 138 Published Price Lists 139 Exclusive Territories 139 Preannouncing Future Price Increases 140 The