Essentials of Strategic Management : The Quest for Competitive Advantage

Cover
Strategic Management: The Quest for Competitive Advantage
Dedication
About the Authors
Brief Contents
Preface
Acknowledgments
Table of Contents
Part One: Concepts and Techniques for Crafting and Executing Strategy
	Section A: Introduction and Overview
		Chapter 1: Strategy, Business Models, and Competitive Advantage
			The Importance of a Distinctive Strategy and Competitive Approach
			The Relationship Between a Company’s Strategy and Business Model
			Strategy and the Quest for Competitive Advantage
			CONCEPTS & CONNECTIONS 1.1: PANDORA, SIRIUS XM, AND OVER-THE-AIR BROADCAST RADIO: THREE CONTRASTING BUSINESS MODELS
			The Importance of Capabilities in Building and Sustaining Competitive Advantage
			CONCEPTS & CONNECTIONS 1.2: APPLE INC.’S STRATEGY AND SUCCESS IN THE  MARKETPLACE
			Why a Company’s Strategy Evolves over Time
			The Three Tests of a Winning Strategy
			Why Crafting and Executing Strategy Are Important Tasks
			The Road Ahead
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
		Chapter 2: Strategy Formulation, Execution, and Governance
			The Strategy Formulation, Strategy Execution Process
			Stage 1: Developing a Strategic Vision, a Mission, and Core Values
			CONCEPTS & CONNECTIONS 2.1: EXAMPLES OF STRATEGIC VISIONS—HOW WELL DO THEY MEASURE UP?
			The Importance of Communicating the Strategic Vision
			Developing a Company Mission Statement
			Linking the Strategic Vision and Mission with Company Values
			CONCEPTS & CONNECTIONS 2.2: TOMS SHOES: ITS MISSION-DRIVEN BUSINESS MODEL
			Stage 2: Setting Objectives
			The Imperative of Setting Stretch Objectives
			What Kinds of Objectives to Set
			CONCEPTS & CONNECTIONS 2.3: EXAMPLES OF COMPANY OBJECTIVES
			Stage 3: Crafting a Strategy
			Strategy Formulation Involves Managers at All Organizational Levels
			A Company’s Strategy-Making Hierarchy
			Stage 4: Implementing and Executing the Chosen Strategy
			Stage 5: Evaluating Performance and Initiating Corrective Adjustments
			Corporate Governance: The Role of the Board of Directors in the Strategy Formulation, Strategy Execution Process
			CONCEPTS & CONNECTIONS 2.4: CORPORATE GOVERNANCE FAILURES AT VOLKSWAGEN
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
	Section B: Core Concepts and Analytical Tools
		Chapter 3: Evaluating a Company’s External Environment
			Assessing the Company’s Industry and Competitive Environment
			Question 1: What Are the Strategically Relevant Components of the Macro-Environment?
			Question 2: How Strong Are the Industry’s Competitive Forces?
			The Competitive Force of Buyer Bargaining Power
			The Competitive Force of Substitute Products
			The Competitive Force of Supplier Bargaining Power
			The Competitive Force of Potential New Entrants
			The Competitive Force of Rivalry among Competing Sellers
			The Collective Strengths of the Five Competitive Forces and Industry Profitability
			Question 3: What Are the Industry’s Driving Forces of Change, and What Impact Will They Have?
			The Concept of Industry Driving Forces
			Identifying an Industry’s Driving Forces
			Assessing the Impact of the Industry Driving Forces
			Determining Strategy Changes Needed to Prepare for the Impact of Driving Forces
			Question 4: How Are Industry Rivals Positioned?
			Using Strategic Group Maps to Assess the Positioning of Key Competitors
			CONCEPTS & CONNECTIONS 3.1: COMPARATIVE MARKET POSITIONS OF SELECTED PIZZA CHAINS: A STRATEGIC GROUP MAP EXAMPLE
			The Value of Strategic Group Maps
			Question 5: What Strategic Moves Are Rivals Likely to Make Next?
			Question 6: What Are the Industry Key Success Factors?
			Question 7: Does the Industry Offer Good Prospects for Attractive Profits?
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
		Chapter 4: Evaluating a Company’s Resources, Capabilities, and Competitiveness
			Question 1: How Well Is the Company’s Strategy Working?
			Question 2: What Are the Company’s Competitively Important Resources and Capabilities?
			Identifying Competitively Important Resources and Capabilities
			Determining the Competitive Power of a Company’s Resources and Capabilities
			The Importance of Dynamic Capabilities in Sustaining Competitive Advantage
			Is the Company Able to Seize Market Opportunities and Nullify External Threats?
			Question 3: Are the Company’s Cost Structure and Customer Value Proposition Competitive?
			Company Value Chains
			CONCEPTS & CONNECTIONS 4.1: THE VALUE CHAIN FOR BOLL & BRANCH
			Benchmarking: A Tool for Assessing Whether a Company’s Value Chain Activities Are Competitive
			The Value Chain System for an Entire Industry
			Strategic Options for Remedying a Cost or Value Disadvantage
			How Value Chain Activities Relate to Resources and Capabilities
			Question 4: What Is the Company’s Competitive Strength Relative to Key Rivals?
			Interpreting the Competitive Strength Assessments
			Question 5: What Strategic Issues and Problems Must Be Addressed by Management?
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
	Section C: Crafting a Strategy
		Chapter 5: The Five Generic Competitive Strategies
			The Five Generic Competitive Strategies
			Low-Cost Provider Strategies
			The Two Major Avenues for Achieving Low-Cost Leadership
			When a Low-Cost Provider Strategy Works Best
			CONCEPTS & CONNECTIONS 5.1: VANGUARD’S PATH TO BECOMING THE LOW-COST LEADER IN INVESTMENT MANAGEMENt
			Pitfalls to Avoid in Pursuing a Low-Cost Provider Strategy
			Broad Differentiation Strategies
			Approaches to Differentiation
			Managing the Value Chain in Ways That Enhance Differentiation
			Delivering Superior Value via a Differentiation Strategy
			Perceived Value and the Importance of Signaling Value
			When a Differentiation Strategy Works Best
			Pitfalls to Avoid in Pursuing a Differentiation Strategy
			Focused (or Market Niche) Strategies
			A Focused Low-Cost Strategy
			A Focused Differentiation Strategy
			When a Focused Low-Cost or Focused Differentiation Strategy Is Viable
			CONCEPTS & CONNECTIONS 5.2: CLINÍCAS DEL AZÚCAR’S FOCUSED LOW-COST STRATEGY
			The Risks of a Focused Low-Cost or Focused Differentiation Strategy
			CONCEPTS & CONNECTIONS 5.3: CANADA GOOSE’S FOCUSED DIFFERENTIATION STRATEGY
			Best-Cost Provider Strategies
			When a Best-Cost Provider Strategy Works Best
			CONCEPTS & CONNECTIONS 5.4: AMERICAN GIANT’S BEST-COST PROVIDER STRATEGY
			The Danger of an Unsound Best-Cost Provider Strategy
			Successful Competitive Strategies Are Resource Based
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
		Chapter 6: Strengthening a Company’s Competitive Position: Strategic Moves, Timing, and Scope of Operations
			Launching Strategic Offensives to Improve a Company’s Market Position
			Choosing the Basis for Competitive Attack
			Choosing Which Rivals to Attack
			Blue Ocean Strategy—A Special Kind of Offensive
			Using Defensive Strategies to Protect a Company’s Market Position and Competitive Advantage
			CONCEPTS & CONNECTIONS 6.1: ETSY’S BLUE OCEAN STRATEGY IN ONLINE RETAILING OF HOMEMADE CRAFTS
			Blocking the Avenues Open to Challengers
			Signaling Challengers That Retaliation Is Likely
			Timing a Company’s Offensive and Defensive Strategic Moves
			The Potential for Late-Mover Advantages or First-Mover Disadvantages
			Deciding Whether to Be an Early Mover or Late Mover
			Strengthening a Company’s Market Position via Its Scope of Operations
			Horizontal Merger and Acquisition Strategies
			Why Mergers and Acquisitions Sometimes Fail to Produce Anticipated Results
			CONCEPTS & CONNECTIONS 6.2: WALMART’S EXPANSION INTO E-COMMERCE VIA HORIZONTAL ACQUISITION
			Vertical Integration Strategies
			The Advantages of a Vertical Integration Strategy
			The Disadvantages of a Vertical Integration Strategy
			Outsourcing Strategies: Narrowing the Scope of Operations
			CONCEPTS & CONNECTIONS 6.3: TESLA’S VERTICAL INTEGRATION STRATEGY
			Strategic Alliances and Partnerships
			Failed Strategic Alliances and Cooperative Partnerships
			The Strategic Dangers of Relying on Alliances for Essential Resources and Capabilities
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
		Chapter 7: Strategies for Competing in International Markets
			Why Companies Expand into International Markets
			Factors That Shape Strategy Choices in International Markets
			Cross-Country Differences in Demographic, Cultural, and Market Conditions
			Opportunities for Location-Based Cost Advantages
			Industry Cluster Knowledge Sharing Opportunities
			The Risks of Adverse Exchange Rate Shifts
			The Impact of Government Policies on the Business Climate in Host Countries
			Strategy Options for Entering Foreign Markets
			Export Strategies
			Licensing Strategies
			Franchising Strategies
			Foreign Subsidiary Strategies
			Alliance and Joint Venture Strategies
			CONCEPTS & CONNECTIONS 7.1: WALGREENS BOOTS ALLIANCE, INC.: ENTERING  FOREIGN MARKETS VIA ALLIANCE FOLLOWED BY MERGER
			International Strategy: The Three Principal Options
			Multidomestic Strategy—A Think Local, Act Local Approach to Strategy Making
			Global Strategy—A Think Global, Act Global Approach to Strategy Making
			Transnational Strategy—A Think Global, Act Local Approach to Strategy Making
			Using International Operations to Improve Overall Competitiveness
			CONCEPTS & CONNECTIONS 7.2: FOUR SEASONS HOTELS: LOCAL CHARACTER, GLOBAL SERVICE
			Using Location to Build Competitive Advantage
			Using Cross-Border Coordination to Build Competitive Advantage
			Strategies for Competing in the Markets of Developing Countries
			Strategy Options for Competing in Developing-Country Markets
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
		Chapter 8: Corporate Strategy: Diversification and the  Multibusiness Company
			When Business Diversification Becomes a Consideration
			Building Shareholder Value: The Ultimate Justification for Business Diversification
			Approaches to Diversifying the Business Lineup
			Diversification by Acquisition of an Existing Business
			Entering a New Line of Business Through Internal Development
			Using Joint Ventures to Achieve Diversification
			Choosing the Diversification Path: Related Versus Unrelated Businesses
			Diversifying into Related Businesses
			Strategic Fit and Economies of Scope
			The Ability of Related Diversification to Deliver Competitive Advantage and Gains in Shareholder Value
			CONCEPTS & CONNECTIONS 8.1: THE KRAFT–HEINZ MERGER: PURSUING THE BENEFITS OF CROSS-BUSINESS STRATEGIC FIT
			Diversifying into Unrelated Businesses
			Building Shareholder Value Through Unrelated Diversification
			The Pitfalls of Unrelated Diversification
			Misguided Reasons for Pursuing Unrelated Diversification
			Diversifying into Both Related and Unrelated Businesses
			Evaluating the Strategy of a Diversified Company
			Step 1: Evaluating Industry Attractiveness
			Step 2: Evaluating Business-Unit Competitive Strength
			Step 3: Determining the Competitive Value of Strategic Fit in Multibusiness Companies
			Step 4: Evaluating Resource Fit
			Step 5: Ranking Business Units and Setting a Priority for Resource Allocation
			Step 6: Crafting New Strategic Moves to Improve the Overall Corporate Performance
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
		Chapter 9: Ethics, Corporate Social Responsibility, Environmental Sustainability, and Strategy
			What Do We Mean by Business Ethics?
			Drivers of Unethical Strategies and Business Behavior
			CONCEPTS & CONNECTIONS 9.1: ETHICAL VIOLATIONS AT UBER AND THEIR CONSEQUENCES
			The Business Case for Ethical Strategies
			Ensuring a Strong Commitment to Business Ethics in Companies with International Operations
			The School of Ethical Universalism
			The School of Ethical Relativism
			Integrative Social Contracts Theory
			Strategy, Corporate Social Responsibility, and Environmental Sustainability
			What Do We Mean by Corporate Social Responsibility?
			CONCEPTS & CONNECTIONS 9.2: WARBY PARKER: COMBINING CORPORATE SOCIAL RESPONSIBILITY WITH AFFORDABLE FASHION
			What Do We Mean by Sustainability and Sustainable Business Practices?
			Crafting Corporate Social Responsibility and Sustainability Strategies
			The Business Case for Socially Responsible Behavior
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
	Section D: Executing the Strategy
		Chapter 10: Superior Strategy Execution—Another Path to Competitive Advantage
			The Principal Managerial Components of Strategy Execution
			Building an Organization Capable of Good Strategy Execution: Three Key Actions
			Staffing the Organization
			CONCEPTS & CONNECTIONS 10.1: MANAGEMENT DEVELOPMENT AT DELOITTE TOUCHE TOHMATSU LIMITED
			Acquiring, Developing, and Strengthening Key Resources and Capabilities
			CONCEPTS & CONNECTIONS 10.2: ZARA’S STRATEGY EXECUTION CAPABILITIES
			Matching Organizational Structure to the Strategy
			Allocating Resources to Strategy-Critical Activities
			Instituting Strategy-Supportive Policies and Procedures
			Striving for Continuous Improvement in Processes and Activities
			The Difference Between Business Process Reengineering and Continuous Improvement Programs
			Installing Information and Operating Systems
			Using Rewards and Incentives to Promote Better Strategy Execution
			Motivation and Reward Systems
			Guidelines for Designing Monetary Incentive Systems
			Nonmonetary Rewards
			CONCEPTS & CONNECTIONS 10.3: HOW WEGMANS REWARDS AND MOTIVATES ITS EMPLOYEES
			Instilling a Corporate Culture That Promotes Good Strategy Execution
			High-Performance Cultures
			Adaptive Cultures
			Unhealthy Corporate Cultures
			Changing a Problem Culture
			Leading the Strategy Execution Process
			CONCEPTS & CONNECTIONS 10.4: DRIVING CULTURAL CHANGE AT GOLDMAN SACHS
			Staying on Top of How Well Things Are Going
			Putting Constructive Pressure on Organizational Units to Achieve Good Results and Operating Excellence
			Initiating Corrective Actions to Improve Both the Company’s Strategy and Its Execution
			Key Points
			Assurance of Learning Exercises
			Exercises for Simulation Participants
			Endnotes
			Appendix Key Financial Ratios: How to Calculate Them and What They Mean
Part Two: Cases in Crafting and Executing Strategy
	Cases
		Case 1: Fixer Upper: Expanding the Magnolia Brand: Rochelle R. Brunson: Baylor University, Marlene M. Reed: Baylor University
		Case 2: Lola’s Market: Capturing a New Generation: Katherine Gonzalez: MBA Student, Sonoma State University, Sergio Canavati: Sonoma State University, Armand Gilinsky: Sonoma State University
		Case 3: Under Armour’s Strategy in 2019: Its Struggle to Revive North American Sales and Profitability: Arthur A. Thompson: The University of Alabama
		Case 4: iRobot in 2019: Can the Company Keep the Magic?: David L. Turnipseed: University of South Alabama, John E. Gamble: Texas A&M University–Corpus Christi
		Case 5: Twitter, Inc. in 2019: Are the Growth and Profit Sustainable?: David L. Turnipseed: University of South Alabama
		Case 6: Netflix in 2019: Striving to Solidify Its Position as the Global Leader: Arthur A. Thompson: The University of Alabama
		Case 7: Mattel Incorporated in 2019: Hard Times in the Toy Industry: Randall D. Harris: Texas A&M University–Corpus Christi, Jeffrey Wylie: MBA Student, Texas A&M University–Corpus Christi
		Case 8: Tesla’s Strategy in 2019: Is Sustained Profitability a Realistic Prospect?: Arthur A. Thompson: The University of Alabama
		Case 9: The Walt Disney Company: Its Diversification Strategy in 2018: John E. Gamble: Texas A&M University–Corpus Christi
		Case 10: Robin Hood: Joseph Lampel: Alliance Manchester Business School
		Case 11: Starbucks in 2019: Is the Company on Track to Achieve Operational Excellence and Attractive Growth?: Arthur A. Thompson: The University of Alabama
		Case 12: Profiting from Pain: Business and the U.S. Opioid Epidemic: Anne T. Lawrence: San Jose State University
Glossary
Indexes
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