: A hypothesis that stable competitive markets naturally settle into an equilibrium of three significant competitors with market shares in a roughly 4:2:1 ratio.
Henderson defines strategy as "a set of rules that define what a company is and what it does" (Henderson, 1984). He argues that strategy is not just about making a plan or setting goals, but about creating a coherent and sustainable position in the market. A good strategy, according to Henderson, should provide a clear direction for the company, while also allowing for flexibility and adaptability in response to changing market conditions. the logic of business strategy bruce henderson pdf
Costs do not drop automatically; they drop as a result of accumulated experience, which yields administrative efficiency, technological specialization, and scale. : A hypothesis that stable competitive markets naturally