54 The Marketing Book
of codification of this new area, most obviously
in the first key text by Abell and Hammond
(1979), which was based on a, by then, well-
established second year MBA option at Har-
vard. The book itself is clearly influenced by the
work related to the Profit Impact of Market
Strategy (PIMS) project, as well as work in
management consultancies such as McKinsey,
ADL and, perhaps most importantly, Boston
Consulting Group, whose founder, Bruce Hen-
derson, had close links with Derek Abell. The
MBA course itself started in 1975 with a broad
notion of ‘filling the gap’ between what was
seen then as the marketing domain and the
much broader area of Business Policy, so
encompassing issues relating to Research and
Development, Distribution and Competitive
Costs. The course itself was a second year
elective and rapidly expanded to four sections
with a major commitment on development and
case writing in 1976 and 1977. For a more
historical analysis of the ways in which the case
method has been used to incorporate new
issues in management whilst avoiding some
central concerns about the nature of power and
influence, see Contardo and Wensley (2002).
In retrospect, this period was the high
point for the uncontested impact of competitive
market-related analysis on strategic manage-
ment practice. With the advantage of hindsight,
it is clear that a serious alternative perspective
was also developing, most obviously signalled
by Peters and Waterman (1982), which was to
have a very substantial impact on what was
taught in strategic management courses and
what was marketed by consultancies. It was
also a significant book in the sense that,
although not widely recognized as so doing, it
also attempted to integrate, at least to some
degree, earlier work by other relevant aca-
demics such as Mintzberg (1973), Pettigrew
(1973), and Weick (1976).
As the decade progressed, it was inevitable
that, at least to some degree, each side recog-
nized the other as a key protagonist. Perhaps
one of the most noteworthy comments is that in
which Robert Waterman challenged the value
of a Michael Porter-based analysis of competi-
tion. Waterman (1988) argued that the Porter
approach does not work because ‘people get
stuck in trying to carry out his ideas’^1 for three
reasons: the lack of a single competitor, the
actual nature of interfirm co-operation as well
as competition and, finally, the fact that com-
petitors were neither ‘dumb nor superhuman’.
This is a particular, and rather colourful, way of
representing the notion of ‘rational expecta-
tions’ (Muth, 1961; Simon, 1979) in economics,
to which we will return later in this chapter.
Equally, the economists have not taken
such attacks lying down: somewhat more
recently, Kay (1993) attempted to wrest back the
intellectual dominance in matters of corporate
strategy and Porter (1990) extended his domain
to the nation state itself.
The story, of course, has also become
complicated in other ways, many of which are
outside the scope of this chapter. In terms of
key perspectives, Tom Peters has become more
and more polemical about the nature of success
(indeed, to the extent of arguing in one inter-
view that innovative behaviour now depends
on ignoring rather than exploiting market
evidence), C. K. Prahalad has refined his
original notion of dominant logic to reflect in
general terms the importance of transferable
capabilities and technological interdependen-
cies in the development of strategic advantage
(for instance, see Bettis and Prahalad, 1995;
Prahalad and Hamel, 1990; Prahalad and Bettis,
1989), whist Gary Hamel, who started his work
with C. K. Prahalad on Strategic Intent (1989),
has moved on to espousing radical and revolu-
tionary change (2000) and, of course, Peter
Senge (1992) reiterated the importance of infor-
mation structures, and Hammer and Champy
(1993) introduced a ‘new’ approach labelled
business process analysis.
In terms of the disciplinary debate, what
was originally broadly a debate between econ-
omists and sociologists now also involves(^1) It is noteworthy that the very representation of the five-
forces diagram, for instance, is one which emphasizes that
the firm is under pressure from all sides.