ABSTRACT
Chapter 1 explains the differences between Fad-Free Strategy and the large number of business strategy books that have been published in the past decades either by business school professors or strategy practitioners. Many of those books belong to the domain of management fads and are based on anecdotal observations from a selection of (often temporarily) successful companies. They contain non-generalizable theories and principles that are hard to translate into sensible advice tailored to the specific situations faced by decision-makers. Fad-Free Strategy, by contrast, provides a practical action-oriented approach, based upon experience from doing real-world strategy rather than observing successful strategies. It is rigorous and grounded in applied microeconomics, thereby focusing on the principle that customers make decisions based on trade-offs between marginal benefits and opportunity cost. It emphasizes the importance of differences in customer preferences, and it uses a quantitative evidence-based approach to understand those differences. Fad-Free Strategy explains in a totally transparent way the steps to take to make critical strategy decisions such as how to enter successfully into new markets, either as an innovator or as a latecomer; how to defend one’s position against aggressive new entrants; or how to sustain margins when price is the only thing customers seem to care about.
