New Features:

Strategic Planning and Decision Making is moved earlier in this edition. Students are often confused about the specifics of strategic decision making in the firm and need to be clear about how the concepts of strategy can be applied in a structured way. Placing the chapter near the front of the book alleviates this problem.

The chapter on Strategic Planning and Decision Making (referenced above) includes a new section on the financial performance measures focusing on those used by Standard & Poors. It shows how S&P uses assessments of competitive advantage in rating companies and demonstrates that a firm's creditworthiness is a function not only of financial outcomes, but also of the strategy that produces them.

Research in many areas has been elaborated or moved forward. For example, Chapter Five on Competing Over Time references new work that bolsters strongly the empirical support of the industry life cycle. Chapter Six on Strategy Execution now includes research that suggests how capability planning and learning are related. See preface for more details.

Chapter Ten has a new section on mergers and acquisitions that reflects the recent research on acquisition performance. It also contains a framework that applies to both strategic and financial investors.

Chapter 12 includes a deeper discussion of the consequences of Sarbanes-Oxley based on recently published studies.

Chapter One has been rewritten so that the reader can grasp more easily what strategy means and how the book lays out its central elements. The goal is to introduce the concept of strategy in its multiple forms without losing the central point that strategy defines how the firm makes money.

Retained Features:

Covers both business and corporate-level strategy, making it appropriate for strategy courses that cover both.

A unique chapter on "Competing Over Time" discusses how firms sustain success over long periods of time and weather economic ups and downs.

The book's eclectic approach offers a balanced presentation of leading strategic theorists, rather than focusing on a single perspective as is often the case with competing texts.

Includes a chapter on Governing the Firm (corporate governance)—a topic of particular interest given the recent problems related to corporate governance at firms such as Enron, Tyco, and others.