Review of The Well Timed Strategy: Managing the Business Cycle for Competitive Advantage (Hardcover)

Most business people who went to college were exposed to the principles of microeconomic analysis at some point.But most don't apply what they learned to their businesses.Professor Navarro's book is a lively look at some of the opportunities that are presented by adjusting your timing to buy low and sell high for:

- capital expenditures
- acquisitions
- hiring people
- adjusting your supply chain
- marketing (especially advertising and promotion)
- extending credit and collecting receivables
- dealing with volatility in raw materials, interest rates and foreign currency
- eliminating unnecessary risks when the environment is clouded
- dealing with natural calamities and wars

In addition, the book explains a variety of economic analysis tools that have proven to be helpful for business people.

Each chapter is clearly outlined and summarized.The key points are illuminated by vignettes about successes and flops (usually among those who ignored risk or didn't think it through properly).

The writing style is popular, rather than academic. You'll feel like you are reading a series of articles from the local business pages rather than a professor's book.

Much of the research for the book was done by students. That gives the book a lot of breadth. The weakness of that approach is that sometimes the students and Professor Navarro don't quite get it right.

I began to get nervous when Moore's Law was misstated as saying that the number of transistors on a chip double every year . . . rather than every two years.That concern increased when I read examples that I knew well from personal experience.The description of what happened and the reality were at odds.For instance, the famous case of Procter & Gamble losing on a derivative contract purchased from Bankers Trust is characterized as a bet against the bank by the soap maker.The relationship between the two wasn't like that at all.Bankers Trust was offering a way to reduce interest rate risk in a very complicated contract.Bankers Trust was supposed to be looking out for P&G. As the contract started to fall apart, Bankers Trust didn't play that fiduciary role.P&G was right to sue and Bankers Trust was right to take half the loss.Kmart's decent into bankruptcy is described as being totally due to cutting advertising.I'm sure that played a role, but Kmart's problems were bigger than that.

If you don't take the details of the examples too seriously, this is a valuable book.It's mostly aimed at those who are new to business such as business students and young entrepreneurs.But some seasoned managers in companies that don't use microeconomic analysis will find useful perspectives as well.

I don't know of a better book on how to adapt spending to various cycles.If that subject interests you, read this book.



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