ABSTRACT
The previous chapter introduced the concept of business strategy by focusing on and describing Porter’s typology of generic business strategies—cost leadership, differentiation, and focus. 1 The chapter focused on how managers’ beliefs (i.e., their mental models) about how to compete would influence not only their choice of business strategy, but also the process of accumulating the firm-specific resources and capabilities that would allow them to come to enjoy a competitive advantage. Chapter 7 also suggested some of the unattractive characteristics of commodity markets and the dangers of price competition while also highlighting the advantages as well as the limitations of differentiation.
