Strategic Management Building and Sustaining Competitive Advantage

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ISBN: 9780324116892 | 0324116896
Cover: Paperback
Copyright: 6/5/2002

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Strategic Management, third edition 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 and is organized to reflect the stages that a firm goes through while implementing the strategic process.

Preface

Part 1 Building Competitive Advantage

(200)

The Strategic Management Process

(26)

Strategic Snapshot: Evolution of the Restaurant Industry

(3)

Introduction

(1)

The Strategy Concept

(9)

The Basis of Strategy

(1)

Charting a Direction: Determining and Setting Strategic Goals

(2)

The Strategic Management Process

(2)

Business and Corporate Strategies

(1)

Strategic Imperatives

(3)

Responsibility for Strategic Management

(2)

Characteristics of Strategic Decisions

(1)

Who Are Strategic Managers?

(1)

What Decision Criteria Are Used?

(4)

Key Stakeholders

(1)

Difficulties in Accommodating Stakeholders

(2)

Why Study?

(1)

Candidate Seeking Employment

(1)

Employee or Manager

(1)

Summary

(4)

The Competitive Environment: Assessing Industry Attractiveness

(36)

Strategic Snapshot: The Personal Computer Industry in 2001

(4)

Introduction

(1)

The Macroenvironment

(8)

The Demographic Environment

(1)

The Political Environment

(2)

The Social/Cultural Environment

(1)

Technological Developments

(1)

The Global Environment

(2)

Assessing the Impact of the General Environment

(1)

The Competitive Environment

(9)

The Five Forces Model of Industry Attractiveness

(1)

Threat of New Entrants

(3)

Bargaining Power of Buyers

(1)

Bargaining Power of Suppliers

(1)

The Nature of Rivalry in the Industry

(2)

Threat of Substitutes

(1)

Strategic Groups and the Industry Environment

(4)

Defining the Strategic Group

(1)

Strategic Groups in the Personal Computer Industry

(2)

Implications of Strategic Groups Analysis

(1)

Strategic Application of Five Forces Analysis to the Personal Computer Industry

(2)

New Entrants

(1)

Direct Competitors

(1)

Buyers

(1)

Suppliers

(1)

Substitutes

(1)

Techniques to Monitor the Environment

(1)

Ethical Dimensions

(1)

Legal Requirements

(1)

Long-Run Consequences

(1)

Summary

(1)

Exercises and Discussion Questions

(5)

Firm Capabilities: Assessing Strengths and Weaknesses

(36)

Strategic Snapshot 1: Pizza Hut

(1)

Strategic Snapshot 2: General Motors Corporation

(3)

Introduction

(1)

The Value Chain

(7)

Primary Activities

(4)

Support Activities

(2)

Pizza Industry Value Chain

(1)

Primary Activities

(1)

Support Activities

(1)

Automobile Industry Value Chain

(2)

Primary Activities

(1)

Support Activities

(2)

The Value Chain as Part of a Business System

(2)

Pizza Hut

(1)

General Motors

(1)

Capability Drivers

(6)

First-Mover Status

(2)

Scale of Operation

(1)

Experience

(2)

Interrelationships

(1)

Assessing Competitive Advantage

(3)

First-Mover Advantages

(1)

Scale and Experience Advantages

(2)

The Growth of the Internet and Competitive Advantage

(1)

Diagnosing Pizza Hut's Capabilities

(2)

First-Mover Advantages

(1)

Scale Advantages

(1)

Experience Benefits

(1)

Interrelationships

(1)

Achilles' Heel of Established Firms

(1)

Assessing the Financial Position of Competitors

(2)

Ethical Issues

(2)

Examining Competitors' Products

(1)

Questioning Competitors' Employees

(1)

Using Consultants

(1)

Engaging in Industrial Espionage

(1)

``Pirating'' Employees

(1)

Conclusion

(1)

Summary

(1)

Exercises and Discussion Questions

(4)

Opportunities for Distinction: Building Competitive Advantage

101

(44)

Strategic Snapshot: Nordstrom Inc.

102

(2)

Introduction

104

(1)

Routes to Building Competitive Advantage

105

(1)

Low-Cost Leadership Strategies

105

(6)

Building a Low-Cost Advantage

106

(3)

Benefits and Costs of Low-Cost Leadership Strategies

109

(2)

Differentiation Strategies

111

(7)

Building a Differentiation-Based Advantage

112

(4)

Benefits and Costs of Differentiation Strategies

116

(2)

Focus Strategies

118

(4)

Building a Focus-Based Advantage

118

(3)

Benefits and Costs of Focus Strategies

121

(1)

Strategic Application to Nordstrom

122

(1)

An Emerging View of Strategy: Mass Customization for Best Value

123

(3)

Advanced Manufacturing Technology

124

(1)

Modular Product Designs

124

(1)

Internet-Driven Distribution Systems

125

(1)

New Market Segmentation Techniques

125

(1)

Distinctive Competence Revisited and Why Quality Dominates

126

(2)

The Role of Distinctive Competence

126

(1)

The Importance of Quality

126

(2)

Strategy and Competitive Advantage over the Life Cycle

128

(9)

Introductory Stage

128

(3)

Growth Stage

131

(1)

Mature Stage

132

(1)

Decline Stage

133

(1)

Life Cycle Dynamics and Competitive Advantage

134

(3)

Ethical Dimension

137

(2)

Worthy Need

138

(1)

Safe Product

138

(1)

Ample Information

138

(1)

Summary

139

(1)

Exercises and Discussion Questions

140

(5)

Competing on the 'Net: Building Virtual Advantage

145

(24)

Strategic Snapshot: Amazon.com

146

(2)

Introduction

148

(1)

Characteristics of Internet-Driven Competition

149

(7)

The Rise of Internet-Based Business Platforms

149

(3)

How Traditional Business Differs from E-Business

152

(2)

Economic Drivers of Internet-Based Competition

154

(2)

The Internet's Impact on Competitive Strategy

156

(3)

Disintermediation and Redefinition of the Value Chain

156

(2)

Network Effects on Competition

158

(1)

The Internet and Virtual Advantage

159

(3)

Speed and Fast Turnaround

160

(1)

Customer Knowledge and Intimacy

160

(2)

Strategic Application to Amazon.com

162

(2)

The Internet and Established Firms

164

(1)

Summary

165

(1)

Exercises and Discussion Questions

166

(3)

Shifts in Competitive Advantage: Responding to Environmental Change

169

(32)

Strategic Snapshot 1

Delivery of On-Line Music

170

(3)

Strategic Snapshot 2

Eastman Kodak and Digital Photography

173

(3)

Introduction

176

(1)

New Developments Affecting Competitive Advantage

176

(6)

New Technology

177

(1)

New Distribution Channels

178

(2)

Economic Shifts

180

(1)

Changes in Related or Neighboring Industries

180

(1)

Changes in Government Regulation

181

(1)

Response Options

182

(4)

Prospecting

182

(2)

Defending

184

(1)

Harvesting

185

(1)

Generic Change Situations

186

(6)

Magnitude of Threat

186

(1)

Ability to Adjust

186

(2)

Common Change Situations

188

(4)

Uncertainty

192

(2)

Impact of Environmental Development

192

(1)

Ability to Adjust

193

(1)

Ethical Dimension

194

(2)

Risk Preference

195

(1)

Return Preference

195

(1)

Summary

196

(1)

Exercises and Discussion Questions

196

(5)

Part 2 Extending Competitive Advantage

201

(152)

Corporate Strategy: Leveraging Resources to Extend Advantage

203

(56)

Strategic Snapshot 1: The Kellogg Company

204

(2)

Strategic Snapshot 2: Tyco International

206

(3)

Introduction

209

(1)

The Concept of Resources in Corporate Strategy

210

(1)

Alternate Routes of Corporate Strategy

211

(2)

New Stages

212

(1)

New Businesses and Industries

213

(1)

Broad Types of Corporate Strategies

213

(9)

Vertical Integration

214

(2)

Related Diversification

216

(1)

Building Synergy in Related Diversification

217

(2)

Unrelated Diversification

219

(3)

Corporate Strategies Compared

222

(1)

More Attractive Terrain

222

(3)

Growth

223

(1)

Profitability

224

(1)

Stability

224

(1)

Access to Resources

225

(3)

Physical Assets

225

(1)

Technologies

225

(2)

Expertise

227

(1)

Sharing Activities

228

(2)

Costs of Diversification

230

(4)

Cost of Ignorance

231

(1)

Cost of Neglect

231

(1)

Costs of Cooperation

232

(2)

Maximizing Benefits Minimizing Costs

234

(4)

Achieving Powerful Diversification Benefits

234

(2)

Limiting Diversification Costs

236

(2)

Alternatives to Diversification: Corporate Restructurings

238

(7)

Selective Focus

239

(1)

Divestitures and Spin-offs

240

(5)

Strategic Application to Kellogg and Tyco International

245

(2)

Summary

247

(1)

Exercises and Discussion Questions

248

(11)

Global Strategy: Harnessing New Markers to Extend Advantage

259

(48)

Strategic Snapshot 1: The Boeing Company

259

(4)

Strategic Snapshot 2: The Coca-Cola Company

263

(3)

Introduction

266

(1)

Environmental Factors That Accelerate Globalization

267

(8)

Narrowing of Demand Characteristics across Markets

267

(2)

Escalating Costs of Research and Development

269

(1)

Rising Economies of Scale and Cost Pressures

270

(1)

Role of Government Policy

270

(2)

Change in Factor Costs around the World

272

(1)

Rise of New Distribution Channels

273

(1)

Overall Reduction in Transportation Communication and Storage Costs

274

(1)

Strategies for Global Expansion

275

(12)

Global Strategy

276

(5)

Multidomestic Strategy

281

(6)

Benefits of Global Expansion

287

(3)

Market Growth and Expansion

287

(1)

Recovery of Investment Costs

288

(1)

Creation of a Strong Image

288

(1)

Accelerated Learning

289

(1)

Costs of Globalization

290

(4)

Cost of Strategy Leverage

291

(1)

Loss of Flexibility

292

(1)

Costs of Cooperation

293

(1)

Strategic Application to Boeing and Coca-Cola

294

(2)

Balancing Global and Multidomestic Approaches

296

(2)

Automobiles: Combining Global Scale with Local Response

296

(2)

Personal Care Products: Matching Local Response to Global Development

298

(1)

Ethical Dimensions

298

(2)

Summary

300

(1)

Exercises and Discussion Questions

301

(6)

Strategic Alliances: Teaming and Allying for Advantage

307

(46)

Strategic Snapshot 1: IBM's Global Alliance Strategy

308

(4)

Strategic Snapshot 2: The Global Airline Industry

312

(4)

Introduction

316

(1)

Factors Promoting the Rise of Strategic Alliances

317

(8)

New Market Entry

317

(1)

Shaping of Industry Evolution

318

(2)

Learning and Applying New Technologies

320

(3)

Rounding Out the Product Line

323

(2)

Types and Benefits of Strategic Alliances

325

(10)

Licensing Arrangements

325

(2)

Joint Ventures

327

(3)

Cross-Holdings Equity Stakes, Consortia and Industry-Spanning Networks

330

(5)

Risks and Costs of Strategic Alliances

335

(6)

Rising Incompatibility of Partners

335

(1)

Risk of Knowledge/Skill Drain

336

(1)

Risk of Dependence

337

(2)

Costs of Alliance Control and Operations

339

(2)

Balancing Cooperation and Competition

341

(3)

Understand the Firm's Knowledge and Skill Base

342

(1)

Choose Complementary Partners

343

(1)

Keep Alliance Personnel Long-Term

344

(1)

Ethical Dimension

344

(1)

Cooperation and Competition in Alliances

344

(1)

Alliance Personnel Issues

345

(1)

Summary

345

(1)

Exercises and Discussion Questions

345

(8)

Part 3 Organizing for Advantage

353

(80)

Designing Organizations for Competitive Advantage

355

(40)

Strategic Snapshot: Ford Motor Company

356

(4)

Introduction

360

(1)

Why Study Strategy Implementation?

360

(2)

Strategy Implementation and the Firm's Managers

361

(1)

Strategy Implementation and the Firm's Employees

361

(1)

A Framework for Designing Organizational Structure

362

(1)

Basic Ingredients of Organizational Structure

363

(2)

Specialization

363

(1)

Standardization

364

(1)

Centralization

364

(1)

Broad Forms of Organizational Structure

365

(14)

Functional Structures

365

(2)

Product Divisions

367

(7)

Geographic Division Structures

374

(3)

Matrix Structures

377

(2)

Organizing for Global Operations

379

(5)

International Division Structures

380

(1)

Worldwide Product Divisions

381

(1)

Worldwide Geographic Division Structures

382

(1)

Worldwide Functional Structures

383

(1)

Worldwide Matrix Structures

383

(1)

Worldwide Hybrid or Mixed Structures

384

(1)

Strategic Application to Ford Motor Company

384

(2)

No Single Structure Is Perfect

386

(1)

An Overview of Organizational Structure

387

(1)

Ethical Dimension

388

(1)

Summary

388

(1)

Exercises and Discussion Questions

389

(6)

Attaining Integration for Advantage

395

(38)

Strategic Snapshot 1: Disney World

396

(1)

Strategic Snapshot 2: Cisco Systems

397

(2)

Introduction

399

(1)

Flexibility and Stability: Finding a Balance

400

(1)

Moving to a Networked Organization

401

(3)

Semipermeable Boundaries

401

(2)

Reliance on External Alliances

403

(1)

Organizational Focus on Core Processes and Technologies

403

(1)

Moving to a Virtual Organization

404

(6)

High Specialization of Knowledge

406

(1)

Rapid Assembly/Disassembly of Project Teams

407

(2)

Ability to Interconnect Quickly with Other Firms

409

(1)

Organization Design Practices

410

(1)

Reward and Performance Measurement Systems

410

(6)

Hierarchy-Based Systems

411

(2)

Performance-Based Systems

413

(2)

Performance Measurement at the Corporate Level

415

(1)

Shared Values and Corporate Culture

416

(7)

Characteristics of Shared Values That Define Culture

416

(2)

Methods of Transmitting Shared Values

418

(2)

Corporate Culture and Strategy Implementation

420

(3)

An Overview of Organization Design Practices

423

(1)

Ethical Dimension

424

(2)

Corporate Credo

424

(1)

Indoctrination

424

(1)

Full CEO Support

425

(1)

Control Systems

426

(1)

Summary

426

(1)

Exercises and Discussion Questions

426

(7)

Part 4 Sustaining and Renewing Advantage

433

(93)

Cooperation and Autonomy: Managing Interrelationships

435

(28)

Strategic Snapshot: The 3M Company

436

(2)

Introduction

438

(1)

Achieving Strategic Alignment within the Organization

439

(3)

Distinctive Competence

439

(1)

Organizational Structure

440

(1)

Off-Line Coordinators

440

(1)

Reward and Performance Measurement Systems

441

(1)

Shared Values and Corporate Culture

442

(1)

Managerial Rotation among Business Units

442

(1)

Factors Promoting Closer Cooperation among Business Units

442

(6)

Change in Product Usage

442

(2)

Technological Convergence

444

(2)

The Rise of Multipoint Competition

446

(1)

Reduced Emphasis on Acquisitions

447

(1)

Increased Global Expansion Activity

448

(1)

Factors Promoting Greater Unit Autonomy

448

(4)

Increased Acquisition Activity

449

(1)

Need to Avert Creeping Bureaucratization

450

(1)

Environmental Turbulence and Change

451

(1)

Technology Fusion

452

(4)

Developing Advanced Hybrid Core Technologies

453

(1)

Organizational Alignment to Support Technology Fusion

454

(2)

The Problem of Internal Resistance

456

(1)

Resistance to Greater Cooperation

457

(1)

Resistance to Greater Autonomy

457

(1)

Dealing with Resistance to Change

457

(1)

Ethical Dimension

457

(2)

Fine-Tuning a Delicate Balance

458

(1)

Summary

459

(1)

Exercises and Discussion Questions

459

(4)

Managing Strategic Change: Building Learning Organizations

463

(30)

Strategic Snapshot: Sony Corporation

464

(2)

Introduction

466

(1)

Characteristics of Learning Organizations

467

(5)

Frequent Rotation of Managers

467

(1)

Continual Training of Personnel

468

(1)

Decentralization of Decision Making

468

(1)

Encouragement of Multiple Experiments

469

(1)

High Tolerance for Failure

470

(1)

Openness and Diversity of Viewpoints

471

(1)

Implementing Change in Static Organizations

472

(2)

Resistance to Change in Static Organizations

474

(3)

Lack of Awareness

475

(1)

Lack of Interest

475

(1)

Incompatibility with Cherished Values

476

(1)

Fear of Cannibalization

476

(1)

Fear of Personal Loss

477

(1)

Change Steps

477

(4)

Sense the Need for Strategic Change

478

(1)

Build Awareness of Need to Change and Learn

479

(1)

Foster Debate

479

(1)

Create Consensus

480

(1)

Assign Responsibility

480

(1)

Allocate Resources

480

(1)

From Static to Learning Organization

481

(3)

The Transformation of General Electric

481

(2)

Embracing Change as a Way of Life

483

(1)

Ethical Dimension

484

(2)

Using Diversity to Enrich the Firm's Knowledge Base

484

(1)

Helping Employees Cope with Change

485

(1)

Summary

486

(1)

Exercises and Discussion Questions

486

(7)

Redefining Advantage

493

(33)

Strategic Snapshot: Charting the Future at Nokia

494

(2)

Introduction

496

(1)

Total Quality Management Programs

497

(5)

Principles of Quality

497

(2)

Continuous Quality Improvement

499

(2)

Building a Quality Culture

501

(1)

Reengineering: Business Process Redesign

502

(6)

Factors behind Reengineering

503

(1)

Steps of Reengineering

504

(2)

Benefits of Reengineering

506

(2)

Costs of Reengineering

508

(1)

Reengineering in the Future

508

(1)

Computer-Integrated Manufacturing Technology

508

(4)

Manufacturing's Transformation

509

(1)

Impact of New Manufacturing on Strategy

510

(1)

Impact of New Manufacturing on Employees

511

(1)

Revisiting the Internet and Competitive Advantage

512

(4)

Compressing the Value Chain

513

(1)

Building Virtual Supply Chains

514

(1)

Competitive Dynamics and the Internet

514

(2)

The Organization of Tomorrow

516

(4)

Using Cross-Functional Teams

516

(1)

Partnering with Suppliers and Customers

517

(3)

Treating Employees as Partners

520

(1)

Summary

520

(6)

Glossary

526

(7)

Name Index

533

(4)

Company Index

537

(7)

Subject Index

544

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Strategic Management Building and Sustaining Competitive Advantage

Summary

Table of Contents

Supplemental Materials