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The book 'Good Strategy, Bad Strategy' by Richard Rumelt explores several key themes. Firstly, it emphasizes the importance of clear and coherent strategy in business, distinguishing between good strategy that is direct and actionable, and bad strategy that is vague and undefined. Secondly, it discusses the concept of 'attractor states', which provide a sense of direction for the future evolution of an industry. Thirdly, it highlights the role of predictable biases in business decision-making, such as overprediction of current companies and business models. These themes are highly relevant to contemporary business issues, as they address the challenges of strategic planning, industry evolution, and decision-making biases in today's rapidly changing business environment.
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Even some of the world’s biggest organizations do strategy poorly, and incorrectly credit their success to personal decision-making skills. We read th...
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Raise fixed costs: the simplest form of transition is triggered by a substantial increase in fixed costs, such as when traditional pistons were replaced by more advanced jet engines, which leaves but a few competitors left able to pay for the added cost Deregulation: this can enable previously stretched competitors to become more involved with profit-making Predictable biases: biases include an inability to predict a dip in sales after continuously rising all-time highs; an overprediction of current companies and business models; and the advice from consultants and analysts that businesses should copy whatever the current largest player does Incumbent responses: expect resistance from incumbent companies when dynamics start to shift Attractor states: this provides a sense of direction for the future evolution of an industry, but such attractor states might not come to be.
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