Lords of Strategy

3.

The ExperienceCurve Deliversa Shock

LARGER ECONOMIC FORCES were conspiring to make businesspeople ache and fret for a new way of understanding the world. As the 1960s unfolded, fattish, complacent American companies found themselves confronted with competition from unexpected quarters—foreign manufacturers, smaller upstart enterprises in their own backyard. What was going on? What to do about it? The Boston Consulting Group had the answer to both questions in the form of the experience curve.

The experience curve was, simply, the single most important concept in launching the strategy revolution. Despite the reality that its empirical foundations were in places shaky, that academics gleefully point out its limitations, and that BCG itself ...