Strategic management and competitive advantage: concepts and cases

Cover......Page 1
VRIO......Page 2
Title Page......Page 4
Copyright Page......Page 5
Dedication......Page 6
Brief Contents......Page 7
Contents......Page 8
Preface......Page 14
Acknowledgments......Page 20
About The Authors......Page 21
PART 1: THE TOOLS OF STRATEGIC ANALYSIS......Page 28
  Go, Pokémon Go......Page 29
   Defining Strategy......Page 31
   The Strategic Management Process......Page 32
  What is Competitive Advantage?......Page 35
   The Strategic Management Process, Revisited......Page 37
   Accounting Measures of Competitive Advantage......Page 38
   Strategy in Depth: The Business Model Canvas......Page 39
   Economic Measures of Competitive Advantage......Page 43
   Ethics and Strategy: Stockholders Versus Stakeholders......Page 45
  Emergent Versus Intended Strategies......Page 46
  Why you Need to Know About Strategy......Page 47
  Summary......Page 49
  Problem Set......Page 50
  End Notes......Page 52
  How Attractive is the Music Streaming Industry?......Page 53
  Understanding a Firm’s General Environment......Page 55
   Ethics and Strategy: Is a Firm Gaining a Competitive Advantage Good for Society?......Page 59
   Threat from New Competition......Page 61
   Strategy in Depth: Environmental Threats and theS-C-P Model......Page 62
  Another Environmental Force: Complements......Page 72
  Industry Structure and Environmental Opportunities......Page 73
   Research Made Relevant: The Impact of Industry and Firm Characteristics on Firm Performance......Page 74
   Strategy in Depth: Network and Empty Core Industries......Page 75
   Opportunities in Fragmented Industries: Consolidation......Page 76
   Opportunities in Emerging Industries: First-Mover Advantages......Page 77
   Opportunities in Mature Industries: Product Refinement, Service, and Process Innovation......Page 79
   Opportunities in Declining Industries: Leadership, Niche, Harvest, and Divestment......Page 81
  Summary......Page 84
  Challenge Questions......Page 85
  Problem Set......Page 86
  End Notes......Page 87
  When a Noun Becomes a Verb......Page 89
   What Are Resources and Capabilities?......Page 91
   Critical Assumptions of the Resource-Based View......Page 92
   Strategy in Depth: Ricardian Economics and theResource-Based View......Page 93
  The VRIO Framework......Page 94
   The Question of Value......Page 95
   Ethics and Strategy: Externalities and the Broader Consequences of Profit Maximization......Page 96
   The Question of Rarity......Page 98
   The Question of Imitability......Page 100
   The Question of Organization......Page 104
   Research Made Relevant: Strategic Human Resource Management Research......Page 105
  Applying the VRIO Framework......Page 107
   Applying the VRIO Framework to Southwest Airlines......Page 108
   Southwest’s People-Management and Competitive Advantage......Page 109
  Imitation and Competitive Dynamics in an Industry......Page 110
   Changing Tactics in Response to Another Firm’s Competitive Advantage......Page 111
   Changing Strategies in Response to Another Firm’s Competitive Advantage......Page 112
   Where Does the Responsibility for Competitive Advantage in a Firm Reside?......Page 113
   Difficult-to-Implement Strategies......Page 115
   The Role of Organization......Page 116
  Summary......Page 117
  Challenge Questions......Page 118
  Problem Set......Page 119
  End Notes......Page 120
  Case 1–1: Can SodaStream Disrupt the Carbonated Soft Drink Market?......Page 122
  Case 1–2: True Religion Jeans: Flash in the Pants or Enduring Brand?......Page 132
  Case 1–3: Walmart Stores, Inc.......Page 147
  Case 1–4: Harlequin Enterprises: The Mira Decision......Page 160
PART 2: BUSINESS-LEVEL STRATEGIES......Page 170
  Fashion Eyeglasses—At a Fraction of the Price......Page 171
   Sources of Cost Advantages......Page 173
   Strategy in Depth: Determining the Optimal Level of Production in an Industry......Page 177
   Research Made Relevant: How Valuable Is Market Share—Really?......Page 181
   Ethics and Strategy: The Race to the Bottom......Page 183
   Cost Leadership and Environmental Threats......Page 184
   Strategy in Depth: The Economics of Cost Leadership......Page 185
  Cost Leadership and Sustained Competitive Advantage......Page 186
   The Rarity of Sources of Cost Advantage......Page 187
   The Imitability of Sources of Cost Advantage......Page 188
   Organizational Structure in Implementing Cost Leadership......Page 192
  Summary......Page 195
  Challenge Questions......Page 196
  Problem Set......Page 197
  End Notes......Page 198
  Who Is Victoria, and What Is Her Secret?......Page 199
  What is Product Differentiation?......Page 201
   Bases of Product Differentiation......Page 202
   Research Made Relevant: Discovering the Bases of Product Differentiation......Page 204
   Product Differentiation and Creativity......Page 207
   Product Differentiation and Environmental Threats......Page 208
   Strategy in Depth: The Economics of Product Differentiation......Page 209
   Product Differentiation and Environmental Opportunities......Page 210
   Ethics and Strategy: Product Claims and the Ethical Dilemmas in Health Care......Page 211
   The Imitability of Product Differentiation......Page 212
   Organizational Structure and Implementing Product Differentiation......Page 218
   Management Controls and Implementing Product Differentiation......Page 219
   Strategy in Depth: Going in Search of Blue Oceans......Page 220
   Compensation Policies and Implementing Product Differentiation Strategies......Page 222
   No: These Strategies Cannot Be Implemented Simultaneously......Page 223
   Yes: These Strategies Can Be Implemented Simultaneously......Page 224
  Summary......Page 225
  Challenge Questions......Page 226
  Problem Set......Page 227
  End Notes......Page 228
  Why Is Netflix called Netflix?......Page 229
   Types of Flexibility......Page 231
  The Value of Strategic Flexibility......Page 233
   Limitations of Risk Based Decision Making Under Uncertainty......Page 234
   Valuing Flexibility......Page 235
   Strategy in Depth: The Black-Scholes Model forValuing Financial Options......Page 236
   Research Made Relevant: The Value of Real Options Thinking......Page 244
   Rare and Costly-to-Imitate Flexibility......Page 247
  Organizing to Implement Strategic Flexibility......Page 248
   Ethics and Strategy Feature: Treating Employees as Flexible Assets......Page 249
  Challenge Questions......Page 250
  Problem Set......Page 251
  End Notes......Page 252
  A Gas Station Conundrum......Page 253
  What is Collusion?......Page 255
   Ethics and Strategy Feature: The Ethics of Collusion......Page 256
   Colluding to Reduce the Threat of New Competitors......Page 257
   Strategy in Depth: How Colluding Firms Generate Economic Profits......Page 258
  Collusion and Sustained Competitive Advantage......Page 259
   Ways Firms Can Cheat on Collusive Agreements......Page 260
   Industry Attributes and the Threat of Cheating......Page 264
   Research Made Relevant: Sending Signals to Maintain Collusion......Page 265
   Rarity and Costly to Imitate Collusion Strategies......Page 271
   Organizational Efficiency......Page 272
  Summary......Page 273
  Problem Set......Page 274
  End Notes......Page 275
  Case 2–1: McDonald’s: Comeback in the U.S. Burger Market?......Page 276
  Case 2–2: The Levi’s Personal Pair Proposal......Page 282
  Case 2–3: Papa John’s International, Inc.: Growth Challenges......Page 292
  Case 2–4: Ryanair—The Low Fares Airline......Page 299
  Case 2–5: Torrey Nano, Inc.......Page 323
  Case 2–6: Collusion in Major League Baseball......Page 327
PART 3: CORPORATE STRATEGIES......Page 332
  Outsourcing Research......Page 333
  What Is Vertical Integration?......Page 335
  The Value of Vertical Integration......Page 336
   Strategy in Depth: Measuring Vertical Integration......Page 337
   Vertical Integration and the Threat of Opportunism......Page 338
   Vertical Integration and Firm Capabilities......Page 340
   Vertical Integration and Flexibility......Page 341
   Research Made Relevant: Empirical Tests of Theories of Vertical Integration......Page 343
   Integrating Different Theories of Vertical Integration......Page 345
   The Rarity of Vertical Integration......Page 346
   Ethics and Strategy: The Ethics of Outsourcing......Page 347
   The Imitability of Vertical Integration......Page 348
   Organizational Structure and Implementing Vertical Integration......Page 349
   Management Controls and Implementing Vertical Integration......Page 350
   Compensation in Implementing Vertical Integration Strategies......Page 352
  Summary......Page 354
  Challenge Questions......Page 355
  Problem Set......Page 356
  End Notes......Page 357
  The Worldwide Leader......Page 359
  What is Corporate Diversification?......Page 361
   Limited Corporate Diversification......Page 362
   Related Corporate Diversification......Page 363
   What Are Valuable Economies of Scope?......Page 364
   Research Made Relevant: How Valuable Are Economies of Scope?......Page 365
   Can Equity Holders Realize These Economies of Scope on Their Own?......Page 378
   Ethics and Strategy: Globalization and the Threat of the Multinational Firm......Page 379
   Strategy in Depth: Risk-Reducing Diversificationand a Firm’s Other Stakeholders......Page 380
   The Imitability of Diversification......Page 382
  Summary......Page 383
  Problem Set......Page 384
  End Notes......Page 385
  Is It Soup Yet?......Page 387
  Organizational Structure and Implementing Corporate Diversification......Page 389
   The Board of Directors......Page 390
   Strategy in Depth: Agency Conflicts Between Managers and Equity Holders......Page 392
   Research Made Relevant: The Effectiveness of Boards of Directors......Page 393
   Institutional Owners......Page 394
   The Senior Executive......Page 395
   Corporate Staff......Page 396
   Division General Manager......Page 398
   Shared Activity Managers......Page 399
   Evaluating Divisional Performance......Page 401
   Allocating Corporate Capital......Page 404
   Transferring Intermediate Products......Page 405
  Compensation Policies and Implementing Corporate Diversification......Page 408
  Summary......Page 409
  Problem Set......Page 410
  End Notes......Page 412
  Alliances Between Chinese and U.S. Firms......Page 413
  What is a Strategic Alliance?......Page 415
   Strategic Alliance Opportunities......Page 416
   Strategy in Depth: Winning Learning Races......Page 418
   Research Made Relevant: Do Strategic Alliances Facilitate Tacit Collusion?......Page 421
  Alliance Threats: Incentives to Cheat on Strategic Alliances......Page 423
   Moral Hazard......Page 424
   Holdup......Page 425
   Ethics and Strategy: When It Comes to Alliances, Do “Cheaters Never Prosper”?......Page 426
   The Rarity of Strategic Alliances......Page 427
   The Imitability of Strategic Alliances......Page 428
   Explicit Contracts and Legal Sanctions......Page 431
   Equity Investments......Page 432
   Firm Reputations......Page 433
   Joint Ventures......Page 434
  Summary......Page 435
  Problem Set......Page 436
  End Notes......Page 437
  The Travails of Technology Acquisitions......Page 439
  Ethics and Strategy: Is Greed Good?......Page 441
  What Are Mergers and Acquisitions?......Page 442
   Mergers and Acquisitions: No Economies of Scope......Page 443
   Mergers and Acquisitions: When Economies of Scope Exist......Page 444
   Strategy in Depth: Evaluating the Performance Effects of Acquisitions......Page 448
   Why Are There So Many Mergers and Acquisitions?......Page 449
   Valuable, Rare, and Private Economies of Scope......Page 452
   Valuable, Rare, and Costly-to-Imitate Economies of Scope......Page 453
   Unexpected Valuable Economies of Scope Between Bidding and Target Firms......Page 454
   Implications for Bidding Firm Managers......Page 455
   Implications for Target Firm Managers......Page 459
   Research Made Relevant: The Wealth Effects of Management Responses to Takeover Attempts......Page 460
   Post-Merger Integration and Implementing a DiversificationStrategy......Page 463
   Special Challenges in Post-Merger Integration......Page 464
  Challenge Questions......Page 466
  Problem Set......Page 467
  End Notes......Page 468
  Case 3–1: National Hockey League EnterprisesCanada: A Retail Proposal......Page 470
  Case 3–2: Starbucks: An Alex Poole StrategyCase......Page 475
  Case 3–3: Rayovac Corporation: InternationalGrowth and Diversification ThroughAcquisitions......Page 488
  Case 3–4: Aegis Analytical Corporation’s StrategicAlliances......Page 500
  Case 3–5: Activision’s Crush on MobileGaming......Page 510
Appendix: Analyzing Cases and Preparing for Class Discussions......Page 518
Glossary......Page 523
Company Index......Page 531
Name Index......Page 534
Subject Index......Page 538