Strategic Management

Cover......Page 1
Contents......Page 7
List of figures......Page 14
List of tables......Page 16
Acknowledgements......Page 18
Prologue......Page 22
Who this book is for......Page 23
How to use the book......Page 24
The case studies......Page 30
Companion website......Page 33
Introductory reading......Page 34
Part I: Introducing Strategic Management......Page 38
1 Introducing strategy and strategy making......Page 41
What is strategy?......Page 42
A brief history of the concept......Page 45
A multiplicity of meanings......Page 50
Assumptions and metatheories......Page 57
Strategists and stakeholders......Page 63
The social web and the 'political' process of strategy making......Page 70
2 Thinking and acting strategically......Page 80
Case Study Scenario: The IKEA way......Page 81
STRATEGY IN ACTION: Quick strategic thinking in unfavourable circumstances......Page 82
STRATEGY IN ACTION: Sony – the disruptive innovator......Page 87
Principles for the successful use of strategy......Page 98
Finding the right strategic mix of entrepreneurial creativity and administrative expertise......Page 102
Case Study: The IKEA way......Page 106
3 Adopting a global perspective......Page 115
Case Study Scenario: The airlines and the integration of global markets......Page 116
The meaning of globalization......Page 117
The five main elements of globalization......Page 120
Home country bias......Page 127
A convergent world......Page 130
Global players......Page 132
The impact of globalization on strategy......Page 138
Case Study: Bad strategy and bad fortune – Swissair and Qantas......Page 140
4 Reading an uncertain future......Page 150
Case Study Scenario: Airbus Industrie and the next generation of civil airliners......Page 151
Limited information......Page 152
Information, knowledge and strategy......Page 156
Reading the general environment......Page 157
Coping with the future......Page 161
Different kinds of risk......Page 169
Scenario building......Page 173
Case Study: Airbus Industrie and the next generation of civil airliners......Page 184
Part II: Strategic Environments and Competitive Advantage......Page 194
5 Identifying opportunity and risk......Page 197
Case Study Scenario: A clean vehicle – the hybrid electric vehicle (HEV)......Page 198
General and competitive environments......Page 199
The nature of the general environment......Page 201
Change and strategy......Page 204
Environment segments......Page 206
STRATEGY IN ACTION: Riding the Internet wave – Amazon.com......Page 210
STRATEGY IN ACTION: The Celtic tiger......Page 215
STRATEGY IN ACTION: Argentina, a case of recurrent crises......Page 216
STRATEGY IN ACTION: The development state – the port of Tanjung Pelepas (PTP)......Page 219
The main features of global change......Page 222
Case Study: A clean vehicle – the hybrid electric vehicle (HEV)......Page 230
6 Reading the competitive environment......Page 236
Case Study Scenario: Video game wars......Page 237
Strategic players......Page 238
The forces of competition......Page 241
STRATEGY IN ACTION: Competitive forces for Starbucks......Page 242
Risk and market structures......Page 250
STRATEGY IN ACTION: Banking in Europe, Germany and market structure......Page 253
STRATEGY IN ACTION: Business crisis, country risk and the case of Indonesia......Page 256
Strategic risk......Page 258
STRATEGY IN ACTION: The Deutsche Bank and investment banking......Page 259
Case Study: Video game wars......Page 261
7 Analysing resources, capabilities and core competencies......Page 270
Case Study Scenario: Branding a sports team – Manchester United......Page 271
Enterprise identity......Page 272
The nature of resources: tangible and intangible......Page 274
Resources and capabilities......Page 276
STRATEGY IN ACTION: Charles Schwab and online broking......Page 277
STRATEGY IN ACTION: Haier: developing a new core competency and pioneering the Chinese export brand......Page 280
STRATEGY IN ACTION: Business models in broking......Page 286
STRATEGY IN ACTION: John Doerr and Kleiner Perkins Caulfield & Byers, the leading venture capital firm in Silicon Valley......Page 293
Case Study: Branding a sports team – Manchester United......Page 295
8 Creating and maintaining competitive advantage......Page 303
Case Study Scenario: Hutchison and the introduction of third generation wireless communication......Page 304
The concept of competitive advantage......Page 306
STRATEGY IN ACTION: Inventing a new product – cosmetic contact lenses......Page 309
STRATEGY IN ACTION: The virtual university and the MBA......Page 310
Strategies for acquiring competitive advantage......Page 312
STRATEGY IN ACTION: The Mt Buller winter resort and global warming......Page 317
STRATEGY IN ACTION: Samsung Electronics: a dramatic turnaround – creating the brand......Page 318
STRATEGY IN ACTION: Samsung Electronics: a dramatic turnaround – investing in new technology......Page 321
STRATEGY IN ACTION: Vivendi Universal – divesting to survive......Page 323
Competitive advantage and market structures......Page 326
E-commerce and services......Page 328
STRATEGY IN ACTION: Dell and direct sales......Page 330
Case Study: Hutchison and the introduction of third generation wireless communication......Page 333
9 Reducing costs......Page 339
Case Study Scenario: Infosys and the Indian comparative advantage......Page 340
Cost leadership......Page 341
Cost drivers......Page 342
STRATEGY IN ACTION: The rise of Haier......Page 346
Pricing strategy......Page 348
STRATEGY IN ACTION: Southwest Airline – the no-frills airline......Page 352
Focused cost minimization......Page 354
STRATEGY IN ACTION: Packaging a cheap holiday – Club Med......Page 358
The nature of a technology......Page 359
STRATEGY IN ACTION: Wal-Mart: the origins of a cost-reducing machine......Page 360
STRATEGY IN ACTION: Caterpillar vs. Komatsu......Page 362
STRATEGY IN ACTION: Wal-Mart: IT as a source of cost leadership......Page 367
Case Study: Infosys and the Indian comparative advantage......Page 369
10 Differentiating the product......Page 375
Case Study Scenario: Turning a stone into a jewel – De Beers......Page 376
Needs and wants......Page 377
STRATEGY IN ACTION: The democratization of luxury......Page 380
STRATEGY IN ACTION: Creating and maintaining demand for luxury and aspirational automobiles......Page 382
STRATEGY IN ACTION: Formula One......Page 383
STRATEGY IN ACTION: Promoting a good image......Page 389
STRATEGY IN ACTION: Exploiting a brand name – Harley-Davidson......Page 390
Intangible qualities......Page 394
STRATEGY IN ACTION: Sir Richard Branson and many wise virgins......Page 396
A product differentiation strategy......Page 400
Case Study: Turning a stone into a jewel – De Beers......Page 406
Part III: Strategic Dilemmas......Page 412
11 Determining the size of an enterprise......Page 415
Case Study Scenario: A merger and a demerger......Page 416
The optimum size of an enterprise......Page 417
STRATEGY IN ACTION: Communication, information and entertainment – the forces making for fusion......Page 422
The strategic gains from vertical and horizontal integration......Page 424
STRATEGY IN ACTION: Integration in communications/information/entertainment......Page 431
Acquisitions and mergers......Page 432
STRATEGY IN ACTION: The Hewlett-Packard/Compaq merger......Page 437
Focusing, strategic alliances and networks as devices for reducing the disadvantages of size......Page 439
Outsourcing and downscoping......Page 441
Case Study: A merger and a demerger......Page 445
12 Integrating the strategists......Page 453
Case Study Scenario: The house of Gucci......Page 454
Integrating structures......Page 455
The influence of the principal/agent relationship on strategy......Page 457
STRATEGY IN ACTION: Microsoft, a giant comes of age......Page 458
The behaviour of principals and agents......Page 461
STRATEGY IN ACTION: Semco and Ricardo Semler – democracy as a management strategy......Page 462
STRATEGY IN ACTION: Finding a new structure and new strategy for Microsoft......Page 465
STRATEGY IN ACTION: Reliance and the death of the founder......Page 466
Strategy and organizational design......Page 468
STRATEGY IN ACTION: Asea Brown Boveri (ABB)......Page 474
Monitoring, incentives and corporate culture......Page 478
Outside control......Page 485
Case Study: The house of Gucci......Page 487
13 When to compete and when to cooperate......Page 493
Case Study Scenario: The wine industry in Australia......Page 494
Dealing with other strategic players......Page 495
STRATEGY IN ACTION: Benetton: cooperation as strategy......Page 498
STRATEGY IN ACTION: The strategic alliance between Renault and Nissan......Page 499
The commons and free riding......Page 501
STRATEGY IN ACTION: Benetton and changing networks......Page 502
Game theory and the prisoner's dilemma......Page 504
The universality of the prisoner's dilemma......Page 508
How to cooperate......Page 514
STRATEGY IN ACTION: When does a strategic alliance become a merger?......Page 518
Case Study: The wine industry in Australia......Page 524
14 Managing risk......Page 532
Case Study Scenario: Africa – AIDS and civil wars......Page 533
The universality of risk management......Page 534
Strategic responses to risk......Page 540
STRATEGY IN ACTION: Enron and the Dabhol project......Page 541
STRATEGY IN ACTION: Lloyd's of London and 'long-tailed' risk......Page 544
STRATEGY IN ACTION: Responses to the Asian economic crisis......Page 548
STRATEGY IN ACTION: Disney and the redistribution of risk......Page 550
Risk and diversification......Page 553
Strategic risk, scenario building and strategy making......Page 554
STRATEGY IN ACTION: Three different reform scenarios in China......Page 555
Case Study: Africa – AIDS and civil wars......Page 559
15 Participating in the global economy......Page 567
Case Study Scenario: Entry into the Chinese automobile industry......Page 568
Participation strategies......Page 569
STRATEGY IN ACTION: Wal-Mart and the internationalization of retailing......Page 572
STRATEGY IN ACTION: News Corporation and expansion in the USA......Page 574
Participation strategies and competitive advantage......Page 576
STRATEGY IN ACTION: The Japanese entry into the USA automobile market......Page 578
Country-specific assets and enterprise-specific assets......Page 579
STRATEGY IN ACTION: 1. Disney and a tale of three cultures......Page 582
STRATEGY IN ACTION: 2. The trials of Euro Disney......Page 583
Internalization......Page 584
STRATEGY IN ACTION: SingTel and its Asia Pacific role......Page 586
STRATEGY IN ACTION: Nestlé – a global enterprise?......Page 591
Case Study: Entry into the Chinese automobile industry......Page 592
Part IV: Bringing it all Together......Page 602
16 Formulating strategy......Page 605
Case Study Scenario: Nokia – where did it come from?......Page 606
STRATEGY IN ACTION: Honda and the revival of a stagnant market......Page 607
Steps in strategy making......Page 611
Two alternative models......Page 613
Strategic thinking – making room for creativity......Page 617
The nature of strategic management......Page 626
STRATEGY IN ACTION: IKEA and innovative combination......Page 631
Strategic planning......Page 633
Case Study 1: The supreme strategist – General Electric......Page 636
Case Study 2: Nokia – where did it come from?......Page 643
17 Implementing strategy......Page 651
Case Study Scenario 2: Toyota – still a Japanese company?......Page 652
Common weaknesses in strategy implementation......Page 653
The five Cs and strategy implementation......Page 655
STRATEGY IN ACTION: Starbucks and being a good citizen......Page 658
The interactive or iterative nature of strategy making......Page 663
Boundaries......Page 664
Staging......Page 666
STRATEGY IN ACTION: Lessons from the online broking experience – how to stage?......Page 667
Leadership and the role of the centre: a specialized strategy division......Page 671
Case Study 1: South African Breweries – a different global strategy......Page 674
Case Study 2: Toyota – still a Japanese company?......Page 677
18 Monitoring strategic performance......Page 688
Case Study Scenario 2: A blockbuster drug – Imclone and insider trading......Page 689
Monitoring......Page 690
Measuring......Page 694
The role of financial controls......Page 700
STRATEGY IN ACTION: Andersen, accounting and the problems of monitoring......Page 705
Satisfying all the stakeholders......Page 706
STRATEGY IN ACTION: General Motors and its value added......Page 707
Choosing the nature of strategy......Page 716
Case Study 1: The disruptive innovator, Sony......Page 720
Case Study 2: A blockbuster drug – ImClone and insider trading......Page 725
Part V: Strategic Analysis and Audit......Page 736
Riding the Internet wave: Amazon.com......Page 739
Finance, a venue for perfect competition: the Deutsche Bank......Page 745
Haier: pioneering the Chinese export brand......Page 753
The Hewlett-Packard/Compaq merger......Page 759
Lloyd's of London and 'long-tailed' risk......Page 766
The Mt Buller winter resort and global warming......Page 772
Euro Disney and a tale of three cultures......Page 780
The strategic alliance between Renault and Nissan......Page 785
Samsung Electronics: a dramatic turnaround......Page 791
Going global: Singapore Telecommunications (SingTel)......Page 797
Starbucks: the third place......Page 803
Sir Richard Branson and many wise virgins......Page 810
Vivendi Universal: divesting to survive......Page 815
Wal-Mart: the cost-reducing machine......Page 820
Forecasting the price of oil......Page 827
Epilogue: reviewing the nature of strategy......Page 835
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