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1
Strategic Analysis
1
Strategic Management: Creating Competitive Advantages 4
2
Analyzing the External Environment of the Firm 36
3
Assessing the Internal Environment of the Firm 68
4
Recognizing a Firm’s Intellectual Assets 114
2
Strategic Formulation
5 Business-Level Strategy: Creating and Sustaining Competitive Advantages 146
6 Corporate-Level Strategy: Creating Value through Diversification 182
7 International Strategy: Creating Value in Global Markets 218
8 Digital Business Strategy: Leveraging Internet and E-Business Capabilities 250
3
Strategic Implementation
9
Strategic Control and Corporate Governance 288
10 Creating Effective Organizational Designs 328
11 Strategic Leadership: Creating a Learning Organization and an Ethical Organization 360
12 Managing Innovation and Fostering Corporate Entrepreneurship 394
13 Recognizing Opportunities and Creating New Ventures 428
4
Case Analysis
14
Analyzing Strategic Management Cases 470
Cases 500
Indexes 919
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contents
1
The Competitive Environment
Strategic Analysis
Porter’s Five-Forces Model of Industry
Competition
Strategic Groups within Industries
Chapter 1
Strategic Management: Creating
Competitive Advantages
4
What Is Strategic Management?
8
Defining Strategic Management
The Four Key Attributes of Strategic Management
The Strategic Management Process
Strategy Analysis
Strategy Formulation
Strategy Implementation
The Role of Corporate Governance and
Stakeholder Management
Zero Sum or Symbiosis? Two Alternate
Perspectives of Stakeholder Management
Social Responsibility: Moving Beyond the
Immediate Stakeholders
The Strategic Management Perspective: An
Imperative Throughout the Organization
9
10
11
12
14
15
17
19
19
21
Some Key Driving Forces
21
Enhancing Employee Involvement in the Strategic
Management Process
24
Ensuring Coherence in Strategic Direction
Organizational Vision
Mission Statements
Strategic Objectives
26
26
28
29
Chapter 3
Assessing the Internal Environment
of the Firm
68
Value-Chain Analysis
71
Primary Activities
Support Activities
Interrelationships among Value-Chain Activities
within and across Organizations
Resource-Based View of the Firm
Types of Firm Resources
Firm Resources and Sustainable
Competitive Advantages
The Generation and Distribution of a
Firm’s Profits: Extending the Resource-Based
View of the Firm
Evaluating Firm Performance:
Two Approaches
Financial Ratio Analysis
Integrating Financial Analysis and Stakeholder
Perspectives: The Balanced Scorecard
Summary 31
Chapter 2
Chapter 4
36
Creating the Environmentally Aware
Organization
39
The Role of Scanning, Monitoring, Competitive
Intelligence, and Forecasting
SWOT Analysis
The General Environment
The Demographic Segment
The Sociocultural Segment
The Political/Legal Segment
The Technological Segment
The Economic Segment
The Global Segment
Relationships among Elements of the
General Environment
39
45
45
45
48
48
49
51
52
52
54
61
Summary 64
Summary 97
Appendix to Chapter 3: Financial Ratio Analysis 102
Analyzing the External Environment
of the Firm
53
Recognizing a Firm’s
Intellectual Assets
The Central Role of Knowledge
in Today’s Economy
Human Capital: The Foundation
of Intellectual Capital
73
76
81
81
82
84
89
91
91
94
114
117
120
Attracting Human Capital
Developing Human Capital
Retaining Human Capital
121
123
126
The Vital Role of Social Capital
129
How Social Capital Helps Attract
and Retain Talent
The Potential Downside of Social Capital
Using Technology to Leverage Human
Capital and Knowledge
130
132
133
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Using Networks to Share Information
and Develop Products and Services
133
Codifying Knowledge for Competitive Advantage 134
Retaining Knowledge When Employees Leave
135
The Central Role of Leveraging Human
Capital in Strategy Formulation
Leveraging Human Capital and
Business-Level Strategy
Leveraging Human Capital and
Corporate-Level Strategy
Leveraging Human Capital and
International-Level Strategy
Leveraging Human Capital and
Internet Strategies
137
137
137
139
139
Summary 139
2
Overall Cost Leadership
Differentiation
Focus
Combination Strategies: Integrating Overall
Low Cost and Differentiation
Industry Life Cycle Stages:
Strategic Implications
Strategies in the Introduction Stage
Strategies in the Growth Stage
Strategies in the Maturity Stage
Strategies in the Decline Stage
Relating Generic Strategies to Stages of the
Industry Life Cycle: The Personal
Computer Industry
Turnaround Strategies
150
151
157
162
164
169
170
171
172
173
175
175
Summary 177
Chapter 6
Corporate-Level Strategy:
Creating Value through Diversification 182
Making Diversification Work: An Overview
Related Diversification: Economies of Scope
and Revenue Enhancement
Leveraging Core Competencies
Sharing Activities
Unrelated Diversification: Financial
Synergies and Parenting
Corporate Parenting and Restructuring
Portfolio Management
Caveat: Is Risk Reduction a Viable Goal of
Diversification?
The Means to Achieve Diversification
Mergers and Acquisitions
Strategic Alliances and Joint Ventures
Internal Development
Real Options Analysis: A Useful Tool
How Managerial Motives Can Erode
Value Creation
190
190
192
195
197
198
201
201
202
203
206
207
208
209
210
212
Summary 212
Business-Level Strategy: Creating and
Sustaining Competitive Advantages 146
Types of Competitive Advantage
and Sustainability
Pooled Negotiating Power
Vertical Integration
Growth for Growth’s Sake
Egotism
Antitakeover Tactics
Strategic Formulation
Chapter 5
Related Diversification: Market Power
186
187
188
189
Chapter 7
International Strategy: Creating
Value in Global Markets
218
The Global Economy: A Brief Overview
220
Factors Affecting a Nation’s Competitiveness 221
Factor Conditions
Demand Conditions
Related and Supporting Industries
Firm Strategy, Structure, and Rivalry
Concluding Comment on Factors Affecting
a Nation’s Competitiveness
International Expansion: A Company’s
Motivations and Risks
Motivations for International Expansion
Potential Risks of International Expansion
Achieving Competitive Advantage
in Global Markets
Two Opposing Pressures: Reducing Costs
and Adapting to Local Markets
International Strategy
Global Strategy
Multidomestic Strategy
Transnational Strategy
222
223
223
224
226
226
226
228
232
232
234
235
236
238
Entry Modes of International Expansion
239
Exporting
Licensing and Franchising
Strategic Alliances and Joint Ventures
Wholly Owned Subsidiaries
240
242
242
244
Summary 246
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Chapter 8
Digital Business Strategy: Leveraging
Internet and E-Business Capabilities 250
How the Internet Is Affecting the Five
Competitive Forces
257
The Threat of New Entrants
The Bargaining Power of Buyers
The Bargaining Power of Suppliers
The Threat of Substitutes
The Intensity of Competitive Rivalry
257
258
259
260
262
How the Internet Adds Value
Search Activities
Evaluation Activities
Problem-Solving Activities
Transaction Activities
Other Sources of Competitive Advantage
Business Models
How the Internet Is Affecting the
Competitive Strategies
Overall Cost Leadership
Differentiation
Focus
263
265
265
266
267
268
270
Are Internet-Based Advantages Sustainable? 278
Leveraging Internet Capabilities
304
Business-Level Strategy and Strategic Control
Corporate-Level Strategy and Strategic Control
305
306
The Role of Corporate Governance
The Modern Corporation: The Separation
of Owners (Shareholders) and Management
Governance Mechanisms: Aligning the Interests
of Owners and Managers
External Governance Control Mechanisms
278
280
Summary 281
Creating Effective
Organizational Designs
Traditional Forms of Organizational
Structure
Patterns of Growth of Large Corporations
Simple Structure
Functional Structure
Divisional Structure
Matrix Structure
International Operations: Implications
for Organizational Structure
How an Organization’s Structure Can Influence
Strategy Formulation
Boundaryless Organizational Designs
The Barrier-Free Organization
The Modular Organization
The Virtual Organization
Boundaryless Organizations: Making Them Work
3
Chapter 9
Chapter 11
288
Ensuring Informational Control: Responding
Effectively to Environmental Change
291
Attaining Behavioral Control: Balancing
Culture, Rewards, and Boundaries
Building a Strong and Effective Culture
Motivating with Rewards and Incentives
Setting Boundaries and Constraints
Behavioral Control in Organizations:
Situational Factors
Evolving from Boundaries to Rewards
and Culture
311
317
Chapter 10
Summary 355
A Traditional Approach to Strategic Control
A Contemporary Approach to Strategic Control
309
Summary 321
Strategic Implementation
Strategic Control and Corporate
Governance
307
263
272
273
275
Are Combination Strategies the Key
to E-Business Success?
Linking Strategic Control to Business-Level
and Corporate-Level Strategies
291
292
295
296
297
299
302
303
Strategic Leadership: Creating
a Learning Organization and an
Ethical Organization
Leadership: Three Interdependent Activities
Setting a Direction
Designing the Organization
Nurturing a Culture Dedicated to Excellence
and Ethical Behavior
Overcoming Barriers to Change and the
Effective Use of Power
Emotional Intelligence: A Key
Leadership Trait
Developing a Learning Organization
Empowering Employees at All Levels
Accumulating and Sharing Internal Knowledge
328
330
331
332
333
334
338
339
341
341
343
347
348
352
360
363
365
365
367
367
370
374
375
376
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Gathering and Integrating External Information
Challenging the Status Quo and Enabling
Creativity
Creating an Ethical Organization
Individual Ethics versus Organizational Ethics
Integrity-Based versus Compliance-Based
Approaches to Organizational Ethics
Role Models
Corporate Credos and Codes of Conduct
Reward and Evaluation Systems
378
380
381
Dedication and Drive
Commitment to Excellence
Entrepreneurial Strategy
383
387
387
388
Managing Innovation and Fostering
Corporate Entrepreneurship
Case Analysis
Managing Innovation
Types of Innovation
Challenges of Innovation
Defining the Scope of Innovation
Managing the Pace of Innovation
Collaborating with Innovation Partners
Corporate Entrepreneurship
Focused Approaches to Corporate
Entrepreneurship
Dispersed Approaches to Corporate
Entrepreneurship
Measuring the Success of Corporate
Entrepreneurship Activities
Entrepreneurial Orientation
Autonomy
Innovativeness
Proactiveness
Competitive Aggressiveness
Risk Taking
394
397
398
400
401
402
402
Chapter 14
Analyzing Strategic
Management Cases
Become Familiar with the Material
Identify Problems
Conduct Strategic Analyses
Propose Alternative Solutions
Make Recommendations
405
410
How to Get the Most from Case Analysis
Using Conflict-Inducing Decision-Making
Techniques in Case Analysis
Symptoms of Groupthink and How to Prevent It
Using Conflict to Improve Decision Making
414
414
416
418
419
421
Summary 423
4
Why Analyze Strategic Management Cases?
How to Conduct a Case Analysis
404
408
455
459
462
Summary 463
Summary 390
Chapter 12
454
Entry Strategies
Generic Strategies
Combination Strategies
381
451
453
470
472
473
475
477
477
478
480
480
483
485
485
Following the Analysis-Decision-Action Cycle
in Case Analysis
487
Summary 491
Appendix to Chapter 14: Sources of Company and Industry
Information 493
Chapter 13
Recognizing Opportunities
and Creating New Ventures
New Ventures and Small Businesses
428
431
Categories of Entrepreneurial Ventures
431
Opportunity Recognition: Identifying
and Developing Market Opportunities
435
The Opportunity Recognition Process
Characteristics of Good Opportunities
438
440
Entrepreneurial Resources
New-Venture Financing
Other Entrepreneurial Resources
Entrepreneurial Leadership
Vision
442
443
447
450
450
Cases
1.
2.
3.
4.
5.
Adolph Coors in the Brewing Industry
American Red Cross to 2002 (A)
American Red Cross, 2002–2004 (B)
Atari and InfoGrames Entertainment SA
Ben & Jerry’s Homemade, Inc.: Passing
the Torch
6. The Best-Laid Incentive Plans
7. Carly Fiorina: The Reinvention
of Hewlett-Packard
500
514
525
530
540
555
559
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8. Challenges Brewing
at Breckenridge Brewery
9. Chiquita’s Global Turnaround
10. Crown Cork and Seal in 1989
11. Dippin’ Dots Ice Cream
12. eBay: King of the Online Auction Industry
13. Edward Marshall Boehm, Inc.
14. Ford Motor Company in 2004: Entering
a Second Century of Existence
15. FreshDirect
16. General Motors
17. Go Global—or No?
18. Green Mountain Coffee Roasters
19. Growing for Broke
20. Heineken
21. Jay’s Foods, LLC
22. JetBlue Airways
23. Johnson & Johnson
24. The Lincoln Electric Company, 1989
25. McDonald’s
26. Microsoft’s Battle for the Living Room:
The Trojan Horse—The Xbox
27. Nokia’s Strategic Intent for the
21st Century
28. Outback Steakhouse Goes International
576
589
597
615
621
640
641
650
660
666
670
679
683
689
700
710
716
730
736
751
764
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
Panera Bread Company
Pixar Animation Studios
Procter & Gamble
Robin Hood
Samsung Electronics
Schoolhouse Lane Estates
Segway: A New Dimension
in Human Transportation
The Skeleton in the Corporate Closet
Southwest Airlines: How Much Can
“LUV” Do?
Starbucks Corporation: Competing
in a Global Market
Toys “R” Us Moving into 2004
Trouble in Paradise
Wal-Mart’s Strategy for the 21st Century:
Sustaining Dominance
World Wrestling Entertainment
Yahoo!
Yum! Brands, Pizza Hut, and KFC
783
793
799
805
806
811
825
834
837
846
866
872
876
895
901
907
Indexes
Company
919
Name
926
Subject
936