Strategic Management Building and Sustaining Competitive Advantage

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ISBN: 9780324006995 | 0324006993
Cover: Paperback
Copyright: 7/22/1999

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STRATEGIC MANAGEMENT explores how firms build, extend, organize, and sustain a competitive advantage, focusing on five key themes: distinctive competence, quality, globalization, change, and ethics. This text takes an applications-oriented approach in which a company's strategic position or dilemma is dissected and analyzed in such a way that all key concepts and ideas are brought to light. Filled with current real-world applications, this book also includes mini-cases within each chapter.

Building Competitive Advantage	p. 1
The Strategic Management Process	p. 3
Case: The Restaurant Industry	p. 4
Introduction	p. 6
The Strategy Concept	p. 6
The Basis of Strategy	p. 7
Charting a Direction: Determining and Setting Strategic Goals	p. 8
The Strategic Management Process	p. 10
Business and Corporate Strategies	p. 12
Strategic Imperatives	p. 13
Responsibility for Strategic Management	p. 16
Characteristics of Strategic Decisions	p. 17
Who Are Strategic Managers?	p. 18
What Decision Criteria Are Used?	p. 18
Key Stakeholders	p. 18
Difficulties in Accommodating Stakeholders	p. 20
Why Study?	p. 22
Candidate Seeking Employment	p. 22
Employee or Manager	p. 22
Summary	p. 22
The Competitive Environment: Assessing Industry Attractiveness	p. 25
Case: The Personal Computer Industry in 1998	p. 26
Introduction	p. 28
The Macroenvironment	p. 29
The Demographic Environment	p. 29
The Political Environment	p. 30
The Social/Cultural Environment	p. 31
Technological Developments	p. 31
The Global Environment	p. 32
Assessing the Impact of the General Environment	p. 34
The Competitive Environment	p. 34
The Five Forces Model of Industry Attractiveness	p. 35
Threat of New Entrants	p. 35
Bargaining Power of Buyers	p. 40
Bargaining Power of Suppliers	p. 41
The Nature of Rivalry in the Industry	p. 42
Threat of Substitutes	p. 44
Strategic Groups and the Industry Environment	p. 45
Defining the Strategic Group	p. 45
Strategic Groups in the Personal Computer Industry	p. 46
Implications of Strategic Groups Analysis	p. 48
Application of Five Forces Analysis to Windows/DOS PC Operating Systems	p. 49
Techniques to Monitor the Environment	p. 50
Ethical Dimensions	p. 51
Legal Requirements	p. 51
Long-Run Consequences	p. 51
Summary	p. 52
Firm Capabilities: Assessing Strengths and Weakness	p. 55
Pizza Hut	p. 56
General Motors Corporation	p. 56
Introduction	p. 57
The Value Chain	p. 58
Primary Activities	p. 59
Support Activities	p. 63
Pizza Industry Value Chain	p. 65
Primary Activities	p. 66
Support Activities	p. 66
Automobile Industry Value Chain	p. 66
Primary Activities	p. 66
Support Activities	p. 66
The Value Chain as Part of a Business System	p. 68
Pizza Hut	p. 68
General Motors	p. 69
Capability Drivers	p. 70
First-Mover Status	p. 70
Scale of Operation	p. 72
Experience	p. 74
Interrelationships	p. 75
Assessing Competitive Advantage	p. 76
First-Mover Advantages	p. 76
Scale and Experience Advantages	p. 77
The Growth of the Internet and Competitive Advantage	p. 79
Diagnosing Pizza Hut's Capabilities	p. 81
First-Mover Advantages	p. 82
Scale Advantages	p. 82
Experience Benefits	p. 82
Interrelationships	p. 82
Achilles' Heel of Established Firms	p. 83
Assessing the Financial Position of Competitors	p. 83
Ethical Issues	p. 85
Examining Competitors' Products	p. 85
Questioning Competitors' Employees	p. 85
Using Consultants	p. 85
Engaging in Industrial Espionage	p. 86
"Pirating" Employees	p. 86
Conclusion	p. 86
Summary	p. 86
Opportunities for Distinction: Building Competitive Advantage	p. 91
Case: 7-Eleven	p. 92
Introduction	p. 94
Routes to Building Competitive Advantage	p. 94
Low-Cost Leadership Strategies	p. 95
Building a Low-Cost Advantage	p. 96
Benefits and Costs of Low-Cost Leadership Strategies	p. 99
Differentiation Strategies	p. 101
Building Differentiation-Based Advantage	p. 102
Benefits and Costs of Differentiation Strategies	p. 106
Focus Strategies	p. 108
Focus-Based Advantages	p. 108
Benefits and Costs of Focus Strategies	p. 111
An Emerging View of Strategy: Mass Customization for Best Value	p. 112
Advanced Manufacturing Technology	p. 113
Modular Product Designs	p. 113
Internet-Driven Distribution Systems	p. 114
New Market Segmentation Techniques	p. 115
Distinctive Competence Revisited and Why Quality Dominates	p. 115
The Role of Distinctive Competence	p. 115
The Importance of Quality	p. 116
Strategy and Competitive Advantage over the Life Cycle	p. 117
Introductory Stage	p. 119
Growth Stage	p. 120
Mature Stage	p. 121
Decline Stage	p. 122
Life Cycle Dynamics and Competitive Advantage	p. 123
Ethical Dimension	p. 127
Worthy Need	p. 127
Safe Product	p. 127
Ample Information	p. 127
Summary	p. 128
Shifts in Competitive Advantage: Responding to Environmental Change	p. 133
Timex and the Electronic Revolution	p. 134
Eastman Kodak and Digital Photography	p. 135
Introduction	p. 138
New Developments Affecting Competitive Advantage	p. 138
New Technology	p. 138
New Distribution Channels	p. 140
Economic Shifts	p. 142
Changes in Related or Neighboring Industries	p. 142
Government Regulation	p. 143
Response Options	p. 144
Prospecting	p. 145
Defending	p. 146
Harvesting	p. 147
Generic Change Situations	p. 148
Magnitude of Threat	p. 148
Ability to Adjust	p. 148
Common Change Situations	p. 150
Uncertainty	p. 155
Impact of Environmental Development	p. 155
Ability to Adjust	p. 155
Ethical Dimension	p. 156
Risk Preference	p. 157
Return Preference	p. 157
Summary	p. 158
Extending Competitive Advantage	p. 163
Corporate Strategy: Leveraging Resources to Extend Advantage	p. 165
Exxon Corporation	p. 166
Kao Corporation of Japan	p. 167
ATandT: Shifting Corporate Strategies in the 1990s	p. 169
Introduction	p. 171
The Concept of Resources in Corporate Strategy	p. 172
Alternate Routes of Corporate Strategy	p. 174
New Stages	p. 174
New Products and Industries	p. 175
Broad Types of Corporate Strategies	p. 176
Vertical Integration	p. 176
Related Diversification	p. 178
Building Synergy in Related Diversification	p. 180
Unrelated Diversification	p. 181
Corporate Strategies Compared	p. 184
More Attractive Terrain	p. 185
Growth	p. 185
Profitability	p. 185
Stability	p. 186
Access to Resources	p. 186
Physical Assets	p. 187
Technologies	p. 187
Expertise	p. 188
Sharing Activities	p. 190
Costs of Diversification	p. 192
Cost of Ignorance	p. 192
Cost of Neglect	p. 192
Cost of Cooperation	p. 193
Maximizing Benefits, Minimizing Costs	p. 195
Achieving Powerful Diversification Benefits	p. 195
Limiting Diversification Costs	p. 197
Alternatives to Diversification: Corporate Restructurings	p. 199
Selective Focus	p. 199
Divestitures and Spin-offs	p. 200
Corporate Application to Exxon, Kao, and ATandT	p. 204
Summary	p. 206
Global Strategy: Harnessing New Markets to Extend Advantage	p. 215
The Boeing Company	p. 216
The Coca-Cola Company	p. 218
Introduction	p. 220
Environmental Factors That Accelerate Globalization	p. 220
Narrowing of Demand Characteristics across Markets	p. 221
Escalating Costs of Research and Development	p. 223
Rising Economies of Scale and Cost Pressures	p. 224
Role of Government Policy	p. 224
Change in Factor Costs around the World	p. 225
Rise of New Distribution Channels	p. 226
Overall Reduction in Transportation, Communication, and Storage Costs	p. 226
Strategies for Global Expansion	p. 228
Global Strategy	p. 228
Multidomestic Strategy	p. 234
Benefits of Global Expansion	p. 240
Market Growth and Expansion	p. 240
Recovery of Investment Costs	p. 241
Creating a Strong Image	p. 241
Accelerated Learning	p. 242
Costs of Globalization	p. 242
Cost of Strategic Leverage	p. 244
Loss of Flexibility	p. 245
Costs of Cooperation	p. 246
Corporate Application to Boeing and Coca-Cola	p. 247
Balancing Global and Multidomestic Approaches	p. 248
Automobiles: Combining Global Scale with Local Response	p. 248
Personal Care Products: Matching Local Response to Global Development	p. 249
Ethical Dimensions	p. 250
Summary	p. 252
Strategic Alliances: Teaming and Allying for Advantage	p. 257
IBM's Global Alliance Strategy	p. 258
The Global Airline Industry	p. 262
Introduction	p. 264
Factors Promoting the Rise of Strategic Alliances	p. 265
New Market Entry	p. 265
Shaping of Industry Evolution	p. 266
Learning and Applying New Technologies	p. 268
Rounding Out the Product Line	p. 269
Types and Benefits of Strategic Alliances	p. 271
Licensing Arrangements	p. 271
Joint Ventures	p. 274
Cross-Holdings, Equity Stakes, and Consortia	p. 277
Risks and Costs of Alliances	p. 279
Rising Incompatibility of Partners	p. 279
Risk of Knowledge/Skill Drain	p. 280
Risk of Dependence	p. 281
Costs of Alliance Control and Operations	p. 282
Balancing Cooperation and Competition	p. 285
Understand the Firm's Knowledge and Skill Base	p. 285
Choose Complementary Partners	p. 286
Keep Alliance Personnel Long Term	p. 287
Ethical Dimension	p. 287
Collaboration and Competition in Alliances	p. 287
Alliance Personnel Issues	p. 288
Summary	p. 288
Organizing for Advantage	p. 295
Strategy Implementation (I): Organizing for Advantage	p. 297
Ford Motor Company	p. 298
Asea-Brown-Boveri (ABB)	p. 300
Introduction	p. 301
Why Study Strategy Implementation?	p. 302
Strategy Implementation and the Firm's Managers	p. 302
Strategy Implementation and the Firm's Employees	p. 303
A Framework for Understanding Organizational Structure	p. 303
Basic Ingredients of Organizational Structure	p. 304
Specialization	p. 304
Standardization	p. 305
Centralization	p. 306
Broad Forms of Organizational Structure	p. 306
Functional Structures	p. 307
Product Divisions	p. 309
Variants of the Product Division Structure	p. 313
Geographic Division Structures	p. 316
Matrix Structures	p. 319
Organizing for Global Operations	p. 322
International Division Structures	p. 323
Worldwide Product Divisions	p. 324
Worldwide Geographic Division Structures	p. 325
Worldwide Functional Structures	p. 326
Worldwide Matrix Structures	p. 327
Worldwide Hybrid or Mixed Structures	p. 327
Corporate Application to Ford Motor Company and ABB	p. 327
Ford Motor Company	p. 327
Asea-Brown-Boveri (ABB)	p. 328
No Single Structure Is Perfect	p. 329
An Overview of Organizational Structure	p. 329
Ethical Dimension	p. 330
Summary	p. 331
Strategy Implementation (II): Achieving Integration	p. 337
Disney World	p. 338
Westinghouse Electric Corporation	p. 339
Introduction	p. 341
Moving to a Networked Organization	p. 342
Semipermeable Boundaries	p. 343
Reliance on External Alliances	p. 344
Organizational Focus on Core Processes and Technologies	p. 344
Flexibility and Stability: Finding a Balance	p. 346
Organization Design Practices	p. 346
Staffing Policies	p. 346
Selection Policies	p. 347
Development Policies	p. 348
Reward and Performance Measurement Systems	p. 349
Hierarchy-Based Systems	p. 349
Performance-Based Systems	p. 351
Performance Measurement at the Corporate Level	p. 353
Shared Values and Corporate Culture	p. 354
Characteristics of Shared Values That Define Culture	p. 354
Methods of Transmitting Shared Values	p. 356
Corporate Culture and Strategy Implementation	p. 358
An Overview of Organization Design Practices	p. 361
Ethical Dimension	p. 362
Corporate Credo	p. 363
Indoctrination	p. 364
Full CEO Support	p. 364
Control Systems	p. 364
Summary	p. 365
Sustaining and Renewing Advantage	p. 371
Cooperation and Autonomy: Managing Interrelationships	p. 373
The Hewlett-Packard Company	p. 374
Hitachi Corporation of Japan	p. 375
Introduction	p. 376
Cooperation and Autonomy within the Organization	p. 377
Distinctive Competence	p. 377
Organizational Structure	p. 377
Off-Line Coordinators	p. 379
Staffing	p. 380
Reward and Performance Measurement Systems	p. 380
Shared Values and Corporate Culture	p. 380
Achieving Strategic Alignment	p. 381
The Nature of Interrelationships	p. 381
Varying Emphasis on Cooperation	p. 383
Shifting the Balance between Cooperation and Autonomy	p. 387
Factors Promoting Closer Cooperation	p. 388
Change in Product Usage	p. 388
Technological Convergence	p. 389
The Rise of Multipoint Competition	p. 392
Reduced Emphasis on Acquisitions	p. 393
Increased Global Expansion Activity	p. 394
Factors Promoting Greater Autonomy	p. 394
Increased Acquisition Activity	p. 395
Need to Avert Creeping Bureaucratization	p. 396
Environmental Turbulence	p. 397
Technology Fusion	p. 399
The Problem of Internal Resistance	p. 402
Resistance to Greater Cooperation	p. 402
Resistance to Greater Autonomy	p. 402
Dealing with Resistance to Change	p. 402
Ethical Dimension	p. 403
Fine Tuning a Delicate Balance	p. 404
Summary	p. 405
Managing Strategic Change: Building Learning Organizations	p. 409
Case: Sony Corporation	p. 410
Introduction	p. 411
Characteristics of Learning Organizations	p. 412
Frequent Rotation of Managers	p. 412
Continual Training of Personnel	p. 413
Decentralization of Decision Making	p. 414
Encouragement of Multiple Experiments	p. 415
High Tolerance for Failure	p. 416
Openness and Diversity of Viewpoints	p. 417
Implementing Change in Static Organizations	p. 418
Resistance to Change in Static Organizations	p. 420
Lack of Awareness	p. 421
Lack of Interest	p. 421
Incompatibility with Cherished Values	p. 421
Fear of Cannibalization	p. 422
Fear of Personal Loss	p. 423
Change Steps	p. 423
Sense the Need for Strategic Change	p. 423
Build Awareness of Need to Change and Learn	p. 425
Foster Debate	p. 425
Create Consensus	p. 426
Assign Responsibility	p. 426
Allocate Resources	p. 427
From Static to Learning Organization	p. 427
Ethical Dimension	p. 428
Using Diversity to Enrich the Firm's Knowledge Base	p. 429
Helping Employees Cope with Change	p. 429
Summary	p. 430
Redefining Advantage	p. 435
Case: Motorola	p. 436
Introduction	p. 437
Total Quality Management Programs	p. 437
Principles of Quality	p. 438
Continuous Quality Improvement	p. 440
Building a Quality Culture	p. 441
Reengineering: Business Process Redesign	p. 442
Factors behind Reengineering	p. 443
Steps of Reengineering	p. 444
Benefits of Reengineering	p. 445
Costs of Reengineering	p. 447
Reengineering in the Future	p. 447
Computer-Integrated Manufacturing Technology	p. 447
Manufacturing's Transformation	p. 448
Impact of New Manufacturing on Strategy	p. 449
Impact of New Manufacturing on Employees	p. 450
Revisiting the Internet and Competitive Advantage	p. 451
Compressing the Value Chain	p. 451
Building Virtual Supply Chains	p. 452
Competitive Dynamics and the Internet	p. 453
The Organization of Tomorrow	p. 454
Use of Cross-Functional Teams	p. 455
Partnering with Suppliers and Customers	p. 457
Treating Employees as Partners	p. 458
Summary	p. 459
Glossary	p. 463
Name Index	p. 471
Company Index	p. 475
Subject Index	p. 481
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Strategic Management Building and Sustaining Competitive Advantage

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