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Strategic Management: A Dynamic Perspective Concepts and Cases, Second Edition

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Strategy and Strategic Leadership in Dynamic Times

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Strategic Management: A Dynamic Perspective Concepts and Cases, Second Edition

by Mason A. Carpenter; Wm. Gerard Sanders

Publisher: Prentice Hall

Copyright Year: 2009

Publishing Date: 2007/12/28

eText ISBN-10: 0-13-234177-8

eText ISBN-13: 978-0-13-234177-6

Print ISBN-10: 0-13-234138-7

Print ISBN-13: 978-0-13-234138-7

Course: Strategic Management

Pages: 888

eTextbook $66.27

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Table of Contents | Description

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ABOUT THIS TITLE - TABLE OF CONTENTS

Acknowledgments, xx

About the Authors, xxiii

Part One. Strategy and Strategic Leadership in Dynamic Times, 2

1. Introducing Strategic Management, 2

Three Overarching Themes, 7

What Is Strategic Management?, 8

The Strategic Leader’s Perspective, 9

Why Study Strategy?, 9

What Is Strategy?, 10

Business Strategy versus Corporate Strategy, 10

Strategy Formulation and Implementation, 12

Strategy Formulation, 12

Strategy Implementation Levers, 17

How Would You Do That? 1.1 The Five Elements of Strategy at JetBlue, 18

Strategic Leadership, 21

What Is Competitive Advantage?, 22

Determinants of Competitive Advantage, 22

Summary of Challenges, 26

Review Questions, 27

Experiential Activities, 27

How Would You Do That?, 27

2. Leading Strategically Through Effective Vision and Mission, 30

Strategic Leadership, 33

What This Chapter Is About, 33

The Roles Leaders Fill, 34

The Skill Set of the Effective Strategic Leader: The Level 5 Hierarchy, 36

What Does It Take to Be a CEO?, 38

What Makes an Effective Executive Team?, 41

How Would You Do That? 2.1 Mapping Your Social Network, 44

The Imprint of Strategic Leadership: Vision and Mission, 46

Defining Vision and Mission, 46

What Should Vision and Mission Statements Encompass?, 47

Why Vision and Mission Statements Are Not Substitutes for Strategy, 48

Goals and Objectives, 49

Strategic Purpose and Strategic Coherence, 50

Strategic Purpose, 50

Strategic Coherence, 52

Stakeholders, Stakeholder Analysis, and Stakeholder Planning, 52

Stakeholders and Strategy, 53

Stakeholder Analysis, 54

Stakeholder Planning, 56

Ethics, Biases, and Strategic Decision Making, 57

How Would You Do That? 2.2 Driving Stakeholder Analysis at Tritec Motors, 58

Ethics and Strategy, 60

Summary of Challenges, 64

Review Questions, 64

Experiential Activities, 65

How Would You Do That?, 65

Part Two. The Internal and External Environment of Strategy, 68

3. Examining the Internal Environment: Resources, Capabilities, and Activities, 68

Internal Drivers of Strategy and Competitive Advantage, 72

Internal Models of Competitive Advantage, 75

Strategic Leadership, 75

Resources and Capabilities, 76

Capabilities, 77

The VRINE Model, 78

Dynamic Capabilities, 84

Resources as Stocks and Flows, 84

Rebundling Resources and Capabilities, 86

The Value Chain, 87

Tradeoff Protection, 89

Seeking Clues to Value Chain Advantages Through Financial Analysis, 91

Outsourcing, Offshoring, and the Value Chain, 92

How Would You Do That? 3.1 Applying DuPont Analysis to Understand Competitive Advantage in Retailing, 94

Strategic Leadership: Linking Resources and Capabilities to Strategy, 96

Senior Managers, 96

Middle Managers, 97

Summary of Challenges, 98

Review Questions, 98

Experiential Activities, 99

How Would You Do That?, 99

4. Exploring the External Environment: Macro and Industry Dynamics, 102

The External Context of Strategy, 106

Industry- and Firm-Specific Factors, 107

Fundamental Characteristics of the External Context, 108

Key Questions, 108

Macro Environment, 109

PESTEL Analysis, 109

Globalization, 111

Industry Analysis, 114

I/O Economics and Key Success Factors, 114

What Is an Industry?, 115

A Model of Industry Structure, 117

How Would You Do That? 4.1 A Five-Forces—Plus Complementors—Analysis of the U.S. Airline Industry, 126

Competitor Analysis, 128

The Value Curve, 128

How Would You Do That? 4.2 Evaluating the Value Curve in the Wine Industry, 130

Dynamic Characteristics of the External Context, 132

Drivers of Change: Making the Five-Forces Model Dynamic, 133

When Industries Divide, 139

When Industries Collide, 139

Summary of Challenges, 140

Review Questions, 141

Experiential Activities, 141

How Would You Do That?, 142

Part Three. Business, Corporate, and Global Strategies, 144

5. Creating Business Strategies, 144

An Introduction to Business Strategies, 148

Types of Strategies—Finding a Position That Works, 148

Generic Strategies, 149

Economic Drivers of Strategic Positioning, 157

Drivers of Low-Cost Advantage, 157

How Would You Do That? 5.1 How to Take the Learning Curve on Two Wheels, 162

Threats to Successful Competitive Positioning, 167

Threats to Low-Cost Positions, 168

Threats to Differentiation Positions, 168

Threats to Focus Positions, 169

Threats to Integrated Positions, 169

Strategy and Fit with Industry Conditions, 170

Strategies for Different Industry Life Cycle Conditions, 170

Testing the Quality of a Strategy, 173

Does Your Strategy Exploit Your Firm’s Resources and Capabilities?, 173

Does Your Strategy Fit with Current Industry Conditions?, 174

Are Your Differentiators Sustainable?, 175

Are the Elements of Your Strategy Consistent and Aligned with Your Strategic Position?, 175

Can Your Strategy Be Implemented?, 175

Summary of Challenges, 176

Review Questions, 177

Experiential Activities, 178

How Would You Do That?, 178

6. Crafting Business Strategy for Dynamic Contexts, 180

Strategy and Dynamic Contexts, 184

The Challenges to Sustainable Competitive Advantage, 184

Revolutionary Strategies That Lead Industry Change, 188

Reconceive a Product or Service, 191

Reconfigure the Value Chain, 193

How Would You Do That? 6.1 [yellow tail]^® Creates a New Value Curve in the Wine Industry, 194

Redefine Your Arenas, 196

Rescale the Industry, 197

Reconsidering the Competitive Mindset, 198

First Movers, Second Movers, and Fast Followers, 200

First-Mover Strategy and the Industry Life Cycle, 200

The Pros and Cons of First-Mover Positioning, 201

First Movers and Complementary Assets, 203

Defensive Strategies for Incumbents Caught Off-Guard, 203

Containment, 204

Neutralization, 204

Absorption, 205

The Pitfalls of the Retaliatory Mindset, 206

Formulating and Implementing Dynamic Strategies, 207

Focusing on Arenas and Staging, 208

Summary of Challenges, 211

Review Questions, 212

Experiential Activities, 212

How Would You Do That?, 212

7. Developing Corporate Strategy, 214

Corporate Strategy, 217

The Evolution of Diversification in the United States, 220

Economic Logic of Diversification: Synergy, 224

Economy-of-Scope Synergies, 224

Revenue-Enhancement Synergies, 225

Economic Benefits of Diversification, 226

Limits of Diversification Benefits, 227

Resource Relatedness and Strategic Similarity, 228

Ulterior Motives for Diversification, 229

Types of Diversification, 230

Vertical Scope, 230

Horizontal Scope, 231

Geographic Scope, 233

How Would You Do That? 7.1 Six Steps to a Profit Pool, 234

Strategies for Entering Attractive New Businesses, 237

Focus on a Niche, 237

Using a Revolutionary Strategy, 238

Leverage Existing Resources, 239

Combination Strategies, 239

Competitive Advantage and Corporate Strategy, 239

Implementation, 241

Corporate Strategy in Stable and Dynamic Contexts, 242

Corporate Strategy in Stable Contexts, 242

Corporate Strategy in Dynamic Contexts, 243

How Would You Do That? 7.2 Evaluating Diversification at Disney, 246

Summary of Challenges, 248

Review Questions, 249

Experiential Activities, 249

How Would You Do That?, 250

8. Looking at International Strategies, 252

International Strategy, 256

International Strategy and Competitive Advantage, 259

The Pros and Cons of International Expansion, 260

Key Factors in International Expansion, 262

Using Cage to Choose Foreign Countries, 267

How Would You Do That? 8.1 Putting CAGE to Work at Virgin Mobile, 274

Entry Vehicles into Foreign Countries, 276

Foreign Direct Investment, 281

Importing and International Strategy, 281

International Strategy Configurations, 282

Resolving the Tension Between Local Preferences and Global Standards, 283

Born-Global Firms, 284

International Strategy in Stable and Dynamic Contexts, 286

Global Context and Industry Life Cycle, 286

Developing a Mindset for Global Dynamic Competitiveness, 287

Summary of Challenges, 288

Review Questions, 289

Experiential Activities, 290

How Would You Do That?, 290

Part Four. Strategy Vehicles for New Directions, 292

9. Understanding Alliances and Cooperative Strategies, 292

Strategic Alliances, 295

Growth of Alliances, 296

Failure Rates, 297

Why Alliances?, 298

Alliances and Competitive Advantage, 298

Alliance Motivation over Time, 299

Form and Structure of Alliances, 300

Joint Ventures and Other Equity Alliances, 301

Nonequity Alliances, 302

Multiparty Alliances, 302

Alliances as Strategy Vehicles, 303

Alliances and Business Strategy, 303

Corporate and International Strategic Alliances, 307

Alliance Networks, 308

Risks Arising from Alliances, 310

Alliances in Stable and Dynamic Contexts, 312

Relative Stability and Alliance Motivation, 313

Relative Stability and the Coevolution Model of Corporate Strategy, 313

What Makes an Alliance Successful?, 314

Understanding the Determinants of Trust, 315

Managing Knowledge and Learning, 316

Understanding Alliance Evolution, 316

Measuring Alliance Performance, 317

Dedicated Alliance Function, 317

When Do Partners Fit?, 319

How Would You Do That? 9.1 Assessing Alliance Fit at Millennium Pharmaceuticals, 320

Summary of Challenges, 322

Review Questions, 323

Experiential Exercises, 324

How Would You Do That?, 324

10. Studying Mergers and Acquisitions, 326

Motives for Mergers and Acquisitions, 330

Differences between Acquisitions and Mergers, 330

Managerial Self-Interest, 330

Mergers, Acquisitions, and Strategy, 332

The Vehicle and Its Economic Logic, 333

Benefits of Acquisition over Internal Development, 336

Drawbacks of Acquisition over Internal Development, 336

Types of Mergers and Acquisitions, 337

Types of Acquisitions, 337

Pricing and Premiums, 341

The Acquisition Process, 343

How Would You Do That? 10.1 The Impact of Premiums on Required Synergies, 344

Stages of the Acquisition Process, 346

Integrating and Implementing an Acquisition, 349

Strategic Interdependence, 349

Need for Autonomy, 349

The Implementation Process, 350

Acquisitions in Different Industry Contexts, 352

M&As and Industry Life Cycle, 352

M&As in Dynamic Contexts, 352

M&As and Coevolution, 353

Summary of Challenges, 354

Review Questions, 355

Experiential Activities, 355

How Would You Do That?, 356

Part Five. Implementation, New Ventures, and Governance in Dynamic Contexts, 358

11. Organizational Structure, Systems, and Processes, 358

Interdependence of Strategy Formulation and Implementation, 362

A Model Company, 363

The Knowing-Doing Gap, 363

Implementation Levers, 367

Forms of Organizational Structure, 368

Systems and Processes, 372

How Would You Do That? 11.1 Developing a Balanced Scorecard for the NUWC, 378

People and Rewards, 381

Strategic Leadership and Strategy Implementation, 386

Decisions about Levers, 386

Decisions about Resource Allocation, 386

Communicating with Key Stakeholders about Strategy, 388

Implementation Levers in Global Firms and Dynamic Contexts, 390

Implementation Solutions for Global Firms, 390

Implementation Levers in Dynamic Contexts, 392

Linking Strategy Implementation to Staging, 395

Summary of Challenges, 396

Review Questions, 397

Experiential Activities, 397

How Would You Do That?, 397

12. Considering New Ventures and Corporate Renewal, 400

From New-Venture Creation to Corporate Renewal, 403

New-Venture Creation versus Corporate Renewal, 404

Entrepreneurship and the Entrepreneurial Process, 404

What Is Entrepreneurship?, 405

The Entrepreneurial Process, 406

New-Venture Creation and Corporate New-Venturing, 409

New-Venture Scenarios, 409

Corporate New-Venturing, 412

Initial Public Offerings and Managerial Professionalism, 414

How Does an IPO Work?, 414

Cost of an IPO, 415

An IPO or a More Formal Organization?, 417

Why Do Organizations Fail?, 418

External Causes of Organizational Failure, 418

Internal Causes of Organizational Failure, 422

How Would You Do That? 12.1 Are Ford’s Numbers Fizzy or Flat?, 424

Strategic Change and Organizational Renewal, 426

The Change Process, 426

Turnaround Management, 430

Summary of Challenges, 434

Review Questions, 435

Experiential Activities, 435

How Would You Do That?, 436

13. Corporate Governance in the Twenty-First Century, 438

What Is Corporate Governance?, 442

Corporate Governance and Competitive Advantage, 443

Evidence That Governance Works, 443

Corporate Governance and Strategy, 445

The Major Parties in Corporate Governance, 446

Codes of Governance, 446

Ownership and the Roles of Owners, 448

The Board of Directors, 450

Insiders versus Outsiders, 450

The Board’s Activities and the Company’s Strategy, 451

Executive Compensation, 454

Executive Ownership, 455

Incentive Compensation, 457

The Market for Corporate Control, 460

How Would You Do That? 13.1 Doing Some Repairs at Home Depot, 461

The Faces of Corporate Governance Around the World, 462

Differing National Governance Practices, 463

The Case of Germany, 463

The Case of China, 464

Summary of Challenges, 465

Review Questions, 466

Experiential Activities, 466

How Would You Do That?, 467

Part Six. Case Studies: Pulling it all Together, 469

1. Robin Hood, 474

2. Three Dimensional Printing, 476

3. Southwest Airlines, 488

4. Pleasant Valley Elementary School: Celebrating Success One Student at a Time, 497

5. Prince Edward Island Preserve Co., 502

6. ESRI: Changing World, 514

7. ICMR Case Collection: Li and Fung—The Global Value Chain Configurator, 522

8. Update: Music Industry in 2006, 545

9. Razorfish, 554

10. Embraer: Shaking Up the Aircraft Manufacturing Market, 568

11. Wal-Mart in the 21st Century: A Global Perspective, 581

12. Home Depot’s Strategy Under Bob Nardelli, 593

13. Ryanair—The “Southwest” of Eurpean Airlines, 602

14. Airbus—From Challenger to Leader, 611

15. Hornby Plc: Building Communities, 621

16. Oracle Corporation: Transformation to an e-business, 630

17. McDonald’s and the McCafé Coffee Initiative, 639

18. House of Tata, 1995: The Next Generation (A), 645

19. Apple’s iPod System: iPod, iTunes and Fairplay, 661

20. Coca-Cola’s Re-entry and Growth Strategies in China, 666

21. Neilson International in Mexico (A), 675

22. eBay International, 683

23. Renault-Volvo Strategic Alliance (A): March 1993, 690

24. Symbian Ltd. and Nokia: Building the Smart Phone Industry, 698

25. British Airways—USair: Structuring a Global Strategic Alliance (A), 706

26. Oracle: Growth by Acquisitions, 724

27. The Expansion of Vincor, 735

28. Cisco Systems, Inc.: Acquisition Integration for Manufacturing (A), 742

29. Implementation of the Balanced Scorecard as a Means of Corporate Learning: The Porsche Case, 761

30. Google in China, 768

31. Green Room Productions, LLC, 773

32. Blue Whale Moving Company, Inc. (A), 785

33. AtomShockwave (A): A Venture Rollercoaster in the Online Entertainment Industry, 795

34. David Walentas’ Two Trees Management Company, 806

35. DaimlerChrysler: Corporate Governance Dynamics in a Global Company, 812

36. Trouble in the “Magic Kingdom”—Governance Problems at Disney, 828

37. VNU’s Strategy Derailed by Active Investors, 836

Photo Credits, 861

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ABOUT THIS TITLE - DESCRIPTION

For undergraduate and MBA strategic management or business policy courses. This is the book that enables students to TRANSFER conceptual classroom LEARNING to strategic application in their professional lives.

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