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Harvard Business Review

Ghemawat, Pankaj.
"Building Strategy on the Experience Curve."
Harvard Business Review
63, no. 2 (March/April 1985): 143-149.
(Reprinted in:
The Economics of Business Strategy, edited by John Kay. The International Library of Critical Writings in Economics. Cheltenham: Edward Elgar Publishing Limited, 2003.)
Many managers see the experience curve as out of date, but experience curve strategies can improve competitive performance in some clearly defined situations. Successful use of the curve requires understanding why and how it works and when to apply it. Industry examples explain how products have different experience curve slopes, experience bases, and cost reduction sources. Managers should study three critical variables to discover both the opportunities and traps in putting the experience curve to work for their companies: industry structure, the relative position of key competitors, and government impact.

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