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Strategic management a competitive advantage approach 16th global 2017 by fred david Strategic management a competitive advantage approach 16th global 2017 by fred david Strategic management a competitive advantage approach 16th global 2017 by fred david Strategic management a competitive advantage approach 16th global 2017 by fred david Strategic management a competitive advantage approach 16th global 2017 by fred david Strategic management a competitive advantage approach 16th global 2017 by fred david
Full-Circle Learning MyLab™: Learning Full Circle for Marketing, Management, Business Communication, and Intro to Business BEFORE CLASS DSMs, pre-lecture homework, eText AFTER CLASS Writing Space,Video Cases, Quizzes/ Tests MyLab Decision Sims,Videos, and Learning Catalytics DURING CLASS Strategic ManageMent concepts and cases A Competitive AdvAntAge ApproACh This page intentionally left blank Strategic ManageMent Sixteenth edition concepts and cases A Competitive AdvAntAge ApproACh globAl edition Fred r David Francis Marion University Florence, South Carolina Forest r David Strategic Planning Consultant Boston Columbus Cape Town Mexico City Dubai Indianapolis London São Paulo New York Madrid Sydney San Francisco Milan Hong Kong Munich Seoul Paris Amsterdam Montréal Singapore Toronto Delhi Taipei Tokyo Vice President, Business Publishing: Donna Battista Editor-in-Chief: Stephanie Wall Acquisitions Editor: Daniel tylman Editorial Assistant: Linda albelli Managing Editor, Global Edition: Steven Jackson Associate Project Editor, Global Edition: Paromita Banerjee Vice President, Product Marketing: Maggie Moylan Director of Marketing, Digital Services and Products: Jeanette Koskinas Field Marketing Manager: Lenny ann raper Product Marketing Assistant: Jessica Quazza Team Lead, Program Management: ashley Santora Program Manager: claudia Fernandes Team Lead, Project Management: Jeff Holcomb Project Manager: ann Pulido Project Manager, Global Edition: Purnima narayanan Operations Specialist: carol Melville Senior Manufacturing Controller, Global Edition: trudy Kimber Creative Director: Blair Brown Art Director: Janet Slowik Vice President, Director of Digital Strategy & Assessment: Paul gentile Manager of Learning Applications: Paul Deluca Digital Editor: Brian Surette Director, Digital Studio: Sacha Laustsen Digital Studio Manager: Diane Lombardo Digital Studio Project Manager: robin Lazrus Digital Studio Project Manager: alana coles Digital Studio Project Manager: Monique Lawrence Media Production Manager, Global Edition: Vikram Kumar Assistant Media Producer, Global Edition: Pallavi Pandit Full-Service Project Management and Composition: integra Interior Designer: integra Cover Image: © Westend61 Premium/Shutterstock acknowledgements of third party content appear on the appropriate page within the text, which constitutes an extension of this copyright page with the exception of the photo of the chocolate candies that appear throughout the text and is credited to Danny Kosmayer/123rf PearSOn aLWaYS Learning and MYManageMentLaB® are exclusive trademarks owned by Pearson education, inc or its affiliates in the U.S and/or other countries Pearson Education Limited edinburgh gate Harlow essex cM20 2Je england and associated companies throughout the world Visit us on the World Wide Web at: www.pearsonglobaleditions.com © Pearson education Limited 2017 the rights of Fred r David and Forest r David to be identified as the authors of this work have been asserted by them in accordance with the copyright, Designs and Patents act 1988 Authorized adaptation from the United States edition, entitled Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 16th Edition, ISBN 978-0-13-416784-8 by Fred r David and Forest r David, published by Pearson Education © 2017 all rights reserved no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without either the prior written permission of the publisher or a license permitting restricted copying in the United Kingdom issued by the copyright Licensing agency Ltd, Saffron House, 6–10 Kirby Street, London ec1n 8tS all trademarks used herein are the property of their respective owners the use of any trademark in this text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor does the use of such trademarks imply any affiliation with or endorsement of this book by such owners iSBn 10: 1-292-14849-7 iSBn 13: 978-1-292-14849-6 British Library Cataloguing-in-Publication Data a catalogue record for this book is available from the British Library 10 typeset in times nrMt Pro by integra Software Services, inc Printed and bound by Vivar in Malaysia Brief Contents Preface 15 Acknowledgments 26 About the Authors 27 Chapter Strategic Management Essentials 31 The Cohesion Case: nesTlé s.a., 2016 (nsRGY) Chapter Chapter Chapter Chapter Chapter Chapter Chapter Chapter Chapter 10 Chapter 11 Appendix Glossary 54 Outside-USA Strategic Planning 67 Ethics, Social Responsibility, and Sustainability Types of Strategies 119 Vision and Mission Analysis 157 The Internal Audit 177 The External Audit 217 Strategy Generation and Selection 247 Strategy Implementation 285 Strategy Execution 321 Strategy Monitoring 359 Guidelines for Case Analysis 95 385 657 Name Index Subject Index 667 673 This page intentionally left blank Contents Preface 15 Acknowledgments 26 About the Authors 27 Assurance of Learning Exercise 1E: Strategic Planning at Nestlé S.A 65 Assurance of Learning Exercise 1F: Interview Local Strategists 65 Chapter Outside-USA Strategic Planning Chapter Strategic Management Essentials 31 exemplaRY CompanY showCased: sinGapoRe aiRlines limiTed (sia) 32 What Is a Cohesion Case? Management 33 33 • Defining Strategic 35 Key Terms in strategic management Competitive Advantage 36 • 36 Strategists 36 aCademiC ReseaRCh Capsule 1-1: when aRe Chief sTRaTeGY offiCeRs (Csos) hiRed/appoinTed? 37 Vision and Mission Statements 38 • External Opportunities and Threats 38 • Internal Strengths and Weaknesses 39 • LongTerm Objectives 40 • Strategies 40 • Annual Objectives 40 • Policies 41 The strategic-management model 42 Benefits of engaging in strategic management 43 aCademiC ReseaRCh Capsule 1-2: whaT aCTiviTY is mosT impoRTanT in The sTRaTeGiC-manaGemenT pRoCess? 43 Financial Benefits 44 • Nonfinancial Benefits 45 why some firms no strategic planning 45 pitfalls in strategic planning 46 Comparing Business and military strategy 46 impliCaTions foR sTRaTeGisTs 48 impliCaTions foR sTudenTs 49 Chapter summary 49 Key Terms and Concepts 50 Issues for Review and Discussion 50 mini-Case on RYanaiR limiTed (RYaaY): is RYanaiR’s weBsiTe iTs sTRaTeGiC maRKeTinG Tool? 52 Current Readings Endnotes 53 exemplaRY CompanY showCased: honda moToR CompanY (hmC) 68 The nature of doing Business Globally 68 Multinational Firms 70 • Different Languages Globally 71 • Labor Unions across Europe 71 aCademiC ReseaRCh Capsule 2-1: how manY lanGuaGes aRe TheRe GloBallY? 71 stages of strategic management 33 integrating intuition and analysis 34 Adapting to Change 67 53 The Cohesion Case: nesTlé s.a., 2016 54 assuRanCe of leaRninG exeRCises 63 Assurance of Learning Exercise 1A: Assess Singapore Airlines’ Most Recent Quarterly Performance Data 63 Assurance of Learning Exercise 1B: Gather Strategy Information on Nestlé S.A 64 Assurance of Learning Exercise 1C: Get Familiar with the Free Excel Student Template 64 Assurance of Learning Exercise 1D: Evaluate an Oral Student Presentation 64 advantages and disadvantages of doing Business Globally 72 The Global Challenge 73 Tax Rates and Tax inversions 74 Tax Rates 74 aCademiC ReseaRCh Capsule 2-2: how fiRms deCide wheRe To expand? 74 Tax Inversions 76 american versus foreign Business Culture Communication Differences across Countries 76 78 Business Culture across Countries 79 Mexico’s Business Culture 79 • Japan’s Business Culture 80 • China’s Business Culture 81 • India’s Business Culture 82 Business Climate across Countries 82 Africa’s Business Climate 83 • China’s Business Climate 84 • Brazil’s Business Climate 85 • Indonesia’s Business Climate 85 • India’s Business Climate 85 • Japan’s Business Climate 86 • Mexico’s Business Climate 86 • Vietnam’s Business Climate 87 impliCaTions foR sTRaTeGisTs 88 impliCaTions foR sTudenTs 88 Chapter summary 89 Key Terms and Concepts 89 Issues for Review and Discussion 89 assuRanCe of leaRninG exeRCises 90 Assurance of Learning Exercise 2A: Nestlé S.A Wants to Enter Africa Help Them 90 Assurance of Learning Exercise 2B: Assess Differences in Culture across Countries 91 Assurance of Learning Exercise 2C: Honda Motor Company Wants to Do Business in Vietnam Help Them 91 Assurance of Learning Exercise 2D: Does My University Recruit in Foreign Countries? 92 mini-Case on aiRBus GRoup se (aiR.pa): how well is aiRBus peRfoRminG GloBallY? 92 Current Readings Endnotes 93 93 COnTEnTS Chapter Ethics, Social Responsibility, and Sustainability 95 diversification strategies Related Diversification exemplaRY CompanY showCased: BanK audi s.a.l 96 Does It Pay to Be Ethical? aCademiC ReseaRCh Capsule 3-1: whaT Can we leaRn fRom hiGh-peRfoRmanCe Companies? 98 99 aCademiC ReseaRCh Capsule 3-2: who is pRone To Be uneThiCal in a Business? 99 whistle-Blowing, Bribery, and workplace Romance Whistle-Blowing Romance 102 100 • Avoid Bribery social Responsibility and policy 101 • 100 Workplace environmental sustainability 111 impliCaTions foR sTRaTeGisTs 111 impliCaTions foR sTudenTs 112 Chapter summary 112 Key Terms and Concepts 112 Issues for Review and Discussion 113 mini-Case on eTihad aiRwaYs: how eThiCal and susTainaBle is eTihad aiRwaYs? 116 Current Readings 116 Endnotes 117 120 122 Levels of Strategies integration strategies 124 intensive strategies • 140 • Joint Venture and Private-Equity Acquisitions 142 Backward Integration 126 Market Development 128 • 141 142 • Outsourcing and Reshoring 142 strategic management in nonprofit, Governmental, and small firms 144 148 150 Assurance of Learning Exercise 4A: Market Development for Petronas 150 Assurance of Learning Exercise 4B: Alternative Strategies for Petronas 150 Assurance of Learning Exercise 4C: Private-Equity Acquisitions 150 Assurance of Learning Exercise 4D: The Strategies of Nestlé S.A.: 2015–2017 151 Assurance of Learning Exercise 4E: Lessons in Doing Business Globally 151 Assurance of Learning Exercise 4F: What are Petronas’ Strategies in 2015–2017? 151 Assurance of Learning Exercise 4G: What Strategies Are Most Risky? 151 Assurance of Learning Exercise 4H: Explore Bankruptcy 152 Assurance of Learning Exercise 4I: Examine Strategy Articles 152 Assurance of Learning Exercise 4J: Classify Some Strategies 152 154 Chapter Vision and Mission Analysis • Product 157 exemplaRY CompanY showCased: samsunG eleCTRoniCs Co limiTed (ssnlf) 158 Vision Statement Analysis 128 Market Penetration 128 Development 129 • vision statements: what we want to Become? 124 Forward Integration 125 • Horizontal Integration 127 138 138 aCademiC ReseaRCh Capsule 4-1: aRe inTeRnaTional allianCes moRe effeCTive wiTh CompeTiToRs oR nonCompeTiToRs? 139 Current Readings Endnotes 154 Characteristics and Benefits of Objectives 121 • Financial versus Strategic Objectives 121 • Avoid Not Managing by Objectives 122 Types of strategies 133 mini-Case on TiGeR BRands limiTed: is TiGeR BRands sTRaTeGiCallY ReadY To CompeTe and CoopeRaTe? 153 119 exemplaRY CompanY showCased: peTRonas (pGas.Kl) 120 long-Term objectives Cooperation among Competitors Partnering 138 assuRanCe of leaRninG exeRCises Assurance of Learning Exercise 3A: Sustainability and Nestlé 113 Assurance of Learning Exercise 3B: How Does My Municipality Compare To Others on Being Pollution-Safe? 114 Assurance of Learning Exercise 3C: Compare Nestlé versus Mars, Inc on Social Responsibility 114 Assurance of Learning Exercise 3D: How Do You Rate Nestlé’s Sustainability Efforts? 114 Assurance of Learning Exercise 3E: The Ethics of Spying on Competitors 115 Chapter Types of Strategies means for achieving strategies Chapter summary 147 Key Terms and Concepts 148 Issues for Review and Discussion 112 assuRanCe of leaRninG exeRCises Liquidation 134 aCademiC ReseaRCh Capsule 4-2: whaT aTTRiBuTes GReaT enTRepReneuRs possess? 146 impliCaTions foR sTRaTeGisTs 146 impliCaTions foR sTudenTs 147 109 Food Suppliers and Animal Welfare 132 • Educational Institutions 144 • Medical Organizations 145 • Governmental Agencies and Departments 145 • Small Firms 145 105 What Firms Are the Best Stewards? 106 • Sustainability Reports 107 • The Office of Environmental Affairs 108 • ISO 14000/14001 Certification 108 wildlife welfare Divestiture • First Mover Advantages Social Policies on 130 131 Tactics to facilitate strategies aCademiC ReseaRCh Capsule 3-3: does iT paY To Be soCiallY ResponsiBle? 104 104 • Unrelated Diversification Cost Leadership Strategies (Type and Type 2) 135 • Differentiation Strategies (Type 3) 136 • Focus Strategies (Type and Type 5) 137 Merger/Acquisition 103 Design and Articulate a Social Policy Retirement 104 131 • michael porter’s five Generic strategies 97 How to Establish an Ethics Culture defensive strategies Retrenchment why “Good ethics is Good Business” 96 129 130 158 159 mission statements: what is our Business? 160 The process of developing vision and mission statements The importance (Benefits) of vision and mission statements 162 161 676 Subject Index G GAAP, 373 GAAS, 373 Gain sharing, 342 Generic Strategies, 134–138 Cost leadership, 135–136 Differentiation, 136–137 Focus, 137–138 Glass ceiling, 344 Global challenge, 73–74 Global/International Issues (Chapter 2), 68–88 Advantages and disadvantages, 72–73 Business Climate Across Countries/Continents, 82–87 African Countries, 83–84 China, 84 India, 85–86 Mexico, 86–87 Business Culture Across Countries/Continents, 79–82 China – Business Culture, 81–82 India – Business Culture, 82 Japanese Culture, 80–81 Mexican Culture, 79–80 Communication differences across countries, 78–82 Corporate Tax Rates Globally, 74–76 Cultural pitfalls, 77 Global challenge, 73–74 Global competition, 73–74 Multinational organizations, 70–71 USA vs foreign business cultures, 76–79 Global strategy, 69 Globalization, 69 Goals See objectives 40, 120–129, 324–326 Goodwill, 263, 305 Governance, 271–275 Governmental forces, 224–226 Variables, 224–226 Governmental organizations (strategic planning), 145 Grand Strategy Matrix, 265–266 Growth ratios, 194 Guanxi, 76 Guidelines for case analysis, 386–387 H Halo error, 250 Heroes/heroines, 182, 349 Horizontal consistency of objectives, 326 Horizontal integration, 127–128 Hostile takeover, 140 Human resource concerns when implementing strategies, 341–352 Human resource management, 186, 341–352 I IE Portfolio Matrix, 261–262 IFRS, 373 Implementing Strategies: Management/Operations (Chapter 10), 322–352 Implementing Strategies: Marketing/Finance (Chapter 9), 286–313 Implications for Strategists Chapter 1, 48–49 Chapter 2, 88 Chapter 3, 111–112 Chapter 4, 146–147 Chapter 5, 169–170 Chapter 6, 206–207 Chapter 7, 239–240 Chapter 8, 274–275 Chapter 9, 312–313 Chapter 10, 351–352 Chapter 11, 378 Implications for Students Chapter 1, 49 Chapter 2, 88 Chapter 3, 112 Chapter 4, 147 Chapter 5, 170 Chapter 6, 208 Chapter 7, 240 Chapter 8, 274–275 Chapter 9, 313 Chapter 10, 352 Chapter 11, 378 India, 82, 85–86 Industrial Organization (I/O) View, 221 Industry Growth Rate (BCG axis), 258, 259 Industry Position (IP), in SPACE, 255 Information technology, 226 Inhwa, 76 Initial Public Offering (IPO), 308 Input stage, 251 Institute of Business Ethics, 96 Integration strategies, 124–128 Backward integration, 126–127 Forward integration, 125–126 Horizontal integration, 127–128 Vertical integration, 124 Internal-External (IE) Matrix, 261–262 Intensive strategies, 128–129 Market development, 138 Market penetration, 128 Product development, 129 Internal assessment (Chapter 6), 178–213 Benchmarking, 202 Breakeven analysis, 195–197, 206 Cost/Benefit analysis, 190–191 Cultural pitfalls, 77 Cultural products, 182–183 Finance/accounting functions, 191–197 Financial ratio analysis, 180, 192–194 IFE Matrix, 204–206 Initial Public Offering (IPO), 308 Integrating strategy and culture, 182–184 Internal factor evaluation matrix, 204–206 Internal forces, 179–180 Management, 184–188 Management Information Systems, 200 Marketing, 188–191 Nature of an internal audit, 178–182 Process of performing an internal audit, 180 Production/operations, 197–198 Research and development, 199–200 Research and development audit, 199–200 Resource-Based View (RBV), 181–182 Value chain analysis (VCA), 201–204 Internal audit See internal assessment, 178–213 Subject Index Internal factor evaluation matrix, 204–206 Internal forces, 179–180 Internal strengths and weaknesses, 39–40, 178–179 International financial reporting standards (IFRS), 373 International firms, 70–71 International Issues (Chapter 2), (See Global Issues), 68–88 International operations, 68–88 Advantages and disadvantages, 72–73 Internet, 36, 226, 289–290 Intuition (vs analysis), 34–36 Inventory (production/operations function), 197 Inversion, 76 Investment decision, 191–192 ISO 14000 and 14001 Certifications, 108–109 J Japanese culture, 76, 79 Joint venture/partnering, 138–139 Joint venture in India, 85–86 Just-in-time (JIT), 340 L Labor unions, 225 Late mover, 142 Leadership, 186 Learning from the partner, 138 Legal forces/variables, 224–225 Legend, 182–183, 348 Leverage ratios, 194 Leveraged buyout, 141 Liquidation, 133 Liquidity ratios, 194 Linking pay-performance, 341–343 Bonus system, 341 Gain sharing, 342 Profit sharing, 342 Lobbying, 39 Long-range, planning, 33 Long-term objectives, 40, 120–122 M Making assumptions, 233–234 Management, 184–188, 322–353 Controlling, 187 Functions of management, 184–188 Management audit checklist of questions, 188 Motivating, 186 Organizing, 185 Planning, 184 Staffing, 186–187 Management audit checklist of questions, 187 Management by wandering around, 363 Management Information Systems (MIS), 200, 269, 311–313 Managing by Crisis, 122 Managing by Extrapolation, 122 Managing by Hope, 122 Managing by Subjectives, 122 Managing conflict, 329 Managing resistance to change, 339–340 Managing the natural environment, (See Natural Environment), 96, 106–107 Market capitalization, 265, 307 Market development, 128 Market penetration, 128 Market segment, 251, 293 Market segmentation, 247, 289–292 Market value, 265, 307 Marketing, 188–191, 286–289 Advertising media, 188 Cost/benefit analysis, 190 Distribution, 190 Functions of marketing, 188–191 Implementation issues, 286–292 Market segmentation, 289–292 Marketing audit checklist of questions, 191 Marketing research, 190 New principles of marketing, 289 Perceptual mapping, 292–295 Pricing, 189 Product and service planning, 189 Product positioning, 292–295 Selling products/services, 188–189 Marketing mix, 290 Place, 290 Price, 290 Product, 290 Promotion, 290 Marketing research, 190 Markets, 165 Matching stage, 250–251 Matching structure and strategy, 329–335 Matrix structure, 334–335 Measuring organizational performance, 364–368 Medical organizations, 145 Merger/acquisition, 140–141 Benefits of, 140 Friendly merger 140 Hostile takeover, 140 Why many fail, 140 Merit pay, 341–343 Mexican culture, 79 Mexico Business Climate, 86–87 Military strategy (vs business strategy), 46–47 MIS issues, 311–313 Mission, 38, 147–171 Mission statements, 38, 147–171 Characteristics of, 164–165 Components, 165–166 Definition, 160 Evaluating, 167 Examples, 167–168 Importance (Benefits) of, 162–163 Mission versus vision, 158, 162 Process of developing, 161–162 Writing and evaluating, 166–170 Motivating, 186 Multidimensional scaling, 292 Multinational corporations, 70–71 Myths, 182–183, 348 N Natural environment, 96, 106–107 Nemaswashio, 78 677 678 Subject Index Nestlé S.A (Cohesion case), 54–63 Balance sheets, 58 Competitors, 59–60 Income statements, 57 Organizational structure, 55–56 Nonprofit and governmental organizations, 145 Not Managing by Objectives, 122 Notable Quotes (see www.strategyclub.com website) O Objectives, 40, 120–122, 324–326 Annual, 40–41, 324–326 Benefits of, 40, 121 Characteristics of, 40, 121 Financial versus strategic objectives, 121–122 Long-term, 40, 120–121 Not managing by objectives, 122 Purpose and characteristics, 40–41, 120–121 Office of Civil Rights (OCR), 103 Operations (See Production/Operations Function), 197–198, 339–340 Opportunities, 38, 219–221 Oral case analysis, 387, 389–390 Oral presentation, 387, 389–393 Organizational change, 35, 359, 368 Organizational charts, 329–337 Do’s and Don’ts, 335–337 Organizational culture, 182–184 Cultural products, 182–184 Definition, 182 India culture, 82 Japanese culture, 80–81 Mexican culture, 79–80 U.S vs foreign, 76–82 Ways and means for altering, 183 Organizational structure, 329–330 Advantages/disadvantages of divisional, 331–333 Advantages/disadvantages of functional, 330–331 Advantages/disadvantages of matrix, 334–335 Do’s and Don’ts, 335–336 Symptoms of ineffectiveness, 330 Organizing, 185 Outsourcing, 142–143 Outstanding shares method to value a firm, 307 P Partnering and partnerships, 138–139 Pay-Performance issues, 341–343 Perceptual mapping, 292–296 Personal ethics, 96–100 Personal selling, 290 Personnel management, 186 Philosophy, 166 Pitfalls in strategic planning, 46 Planning, 33, 184–185 Policies, 41–42, 327 Political, governmental and legal forces/variables, 224–225 Politics of strategy choice, 270–271 Porter’s Five-Forces Model, 229–232 Bargaining power of consumers, 230, 232 Bargaining power of suppliers, 230, 231 Potential development of substitute products, 230, 231 Potential entry of new competitors, 231 Rivalry among competing firms, 230 Porter’s five generic strategies Cost leadership (Type and 2), 134–138 Differentiation, 136 Focus (Type and 5), 137 Portfolio of businesses, 258–261 Potential development of substitute products, 231 Potential entry of new competitors, 231 Premium, 307 Prepare and present a case analysis, 387–395 Preparing a case for class discussion, 385–387 Preparing a written case analysis, 385–387 Price, 189, 290 Price earnings ratio method to value businesses, 307–308 Pricing, 189–190 Private-equity acquisitions, 141–142 Process (production/operations function), 197–198, 338 Product, 165, 290 Product and service planning, 189 Product development, 129 Product positioning, 292–295 Product positioning maps, 292–295 Production/Operations function, 197–198 Audit checklist of questions, 198 Production/Operations concerns when implementing strategies, 197–198 Production/Operations functions, 197 Profitability ratios, 194 Projected financial statement analysis, 300 Promotion, 290 Protectionism, 73 Public image, 165 Publicity, 290 Q QSPM, 266–270 Quality (production/operations function), 197 Quantitative Strategic Planning Matrix (OSPM), 266–270 Question marks, 258–261 R Ratings, 204, 235 Ratio analysis, 192–194 Rational change strategy, 339 Reconciliatory, 164 Reengineering, 338–339 Related diversification, 129 Relative deficiency or superiority, 39 Relative market share position (RMSP), 258–261 Research and development, 199–200, 309–310 Research and development audit, 200 Research and development issues, 199–200 Reshoring, 143 Resistance to change, 339, 368 Resource allocation, 34 Resource-Based View (RBV), 181–182 Empirical indicators, 181 Restructuring, 338–339 Retreats, 43 Retrenchment, 131–132 Subject Index Revised EFE (and IFE) Matrix, 364–368 Rightsizing, 338–339 Rites, 182–183 Rituals, 182–183 Rivalry Among Competing Firms, 230 Robinson-Patman Act, 189 Rumelt’s Criteria for Evaluating Strategies, 362–363 S Sales promotion, 290 Sample case analysis outline, 391–395 Sarbanes-Oxley Act, 275 Secondary buyouts, 142 Self-concept (distinctive competence), 166 Self-interest change strategy, 339 Selling products/services, 188–189 Sexual harassment, 102 Six Sigma, 338 SO Strategies, 251–254 Social, cultural, demographic and environmental forces, 223 Variables, 224 Social policies on retirement, 104 Social policy, 104 Japan versus the world, 104 Social responsibility, 96, 103–105 Society of Competitive Intelligence Professionals (SCIP), 228 Software, (See Strategy Club or www.strategyclub.com) Songbirds and coral reefs in trouble, 110 Sources of external information, 232 SPACE Matrix, 254–258 ST Strategies, 251–254 Stability Position (SP), in SPACE, 254–258 Staffing, 186 Standard & Poor’s Industry Surveys, 64 Standards, 107–108 Stakeholders, 164 Stars, 258–261 Statement of beliefs, 160 Statement of philosophy, 160 Statement of purpose, 160 Stock financing, 296–297 Story, 182–183 Strategic Business Unit (SBU) structure, 330, 333–334 Strategic objectives, 121 Strategic management, 33 Art vs Science Issue, 374 Benefits, 43–45 Case analysis, 387–393 Challenges, 374–375 Definition, 33 Guidelines for effective strategic management, 376–377 In nonprofit and governmental organizations, 144–147 In small firms, 145 Levels of your own health, 349–351 Model, 42–43, 69, 97, 123, 161, 219, 239, 286, 361 Process, 33, 42–43 Secret vs open discussion, 375 Stages, 33–34 Terms, 36–41 Visible vs hidden issue, 374 Strategic-management model, 43 679 Strategic objectives, 121 Strategic planning, 33 Art vs Science Issue, 374 Challenges, 374–375 Pitfalls, 46 Process of generating and selecting strategies, 248–283 Quotes, (See Notable Quotes) Software, (see Strategy Club at www strategyclub.com) Why some firms no strategic planning, 45 Strategic Position and Action Evaluation (SPACE) Matrix, 254–258 Strategies in Action, 119–155 Backward integration, 126–127 Bankruptcy, 132 Combination, 123 Diversification, 129–131 Divestiture, 132 Forward integration, 125–126 Franchising, 125 Generic, 134–138 Geographic expansion, 128 Horizontal integration, 127–128 Levels of, 124 Liquidation, 133 Market development, 128 Market penetration, 128 Means for achieving, 138–142 Product development, 128 Related diversification, 130 Retrenchment, 131–132 Types of, 122–134 Unrelated diversification, 130–131 Vertical integration, 124 Strategists, 36 Strategos, 46 Strategy-structure relationship, 330 Strategy-supportive culture, 270, 348–349 Strategy and culture, 270, 348–349 Cultural products, 182–183 Strategy analysis and choice, 248–283 Analytical framework, 250 BCG Matrix, 258–261 Cultural aspects, 270 Decision stage, 266 Governance issues, 271–275 GRAND Matrix, 265–266 IE Matrix, 261–264 Input stage, 250–251 Matching stage, 250–251 Nature of analysis and choice, 248–250 Politics of, 270–271 QSPM, 266–270 SWOT Matrix, 254–258 Strategy Evaluation, 34, 42, 359–383 Activities, 360, 364–368 Art vs Science Issue, 374 Auditing, 373–374 Balanced scorecard, 369–370 Challenges, 374–375 Characteristics of an effective evaluation system, 371–372 Contingency planning, 372–373 Framework, 364–368 680 Subject Index Strategy Evaluation (continued) Measuring organizational performance, 34, 369–370 Published sources, 371 Questions to address, 366 Strategy Monitoring, 34, 359–383 Taking corrective actions, 34, 364–368 Top-Down or Bottom-Up strategic planning, 376 Visible vs hidden issue, 375–376 Strategy Execution, 321–356 Allocate Resources, 327–329 Annual objectives, 324–326 Balancing work life and home life, 343–344 Benefits of a diverse workforce, 344–345 Chandler’s strategy/structure relationship, 330 Corporate wellness programs, 349–352 Creating a strategy-supportive culture, 348–349 Divisional structure, 331–333 Do’s and dont’s in developing organization charts, 335–337 Employee stock ownership plans (ESOPs), 340–341 Functional structure, 330–335 Human resource concerns when implementing strategies, 341–352 Linking performance and pay to strategies, 341–343 Management and operations issues, 321–357 Managing conflict, 329 Managing resistance to change, 339 Managing structure, 329–330 Matching structure with strategy, 329–330 Matrix structure, 334–335 Policies, 327 Restructuring and reengineering, 338–339 Strategic business unit (SBU) structure, 330, 333–334 Versus strategy formulation, 322 Strategy formulation, 33, 42, 248–283 Analytical framework, 250 Cultural aspects, 270 Decision stage, 266 Framework, 250 Governance issues, 271–275 Input stage, 251 Matching stage, 251 Politics of, 270–271 Versus strategy implementation, 322 Strategy implementation, 34, 42, 285–315, 322–324 Business analytics, 234 Corporate evaluation, 304–308 Current marketing issues, 286–295 Finance/Accounting issues, 295–308 Market segmentation, 289–292 Marketing issues, 286–295 MIS issues, 311–313 New principles of marketing, 289 Product positioning/Perceptual mapping, 292–295 Projected financial statement analysis, 300–304 Research and development issues, 309–311 Strategy profiles, 254–258 Strategy review, evaluation, and control (Chapter 9), 359–383 Strengths-Weaknesses-Opportunities-Threats (SWOT) Matrix, 251–254 Strengths, 39–49 Structure and strategy, 329, 335–336 Sum Total Attractiveness Scores (TAS) (in a QSPM), 266–270 Survival, growth, and profitability, 166 Sustainability, 106–107 Sustainability Report, 107 Sustained competitive advantage, (See Special Notes To Students), 36, 37, 190, 202 SWOT Matrix/Analysis, 251–254 Synergy, 185 T Take Corrective Actions, 364–368 Tax rates, 74–76 Technological forces, 226–227 Test marketing, 189 Threats, 38, 219–221 Top-Down or Bottom-Up strategic planning, 376 Total Attractiveness Scores (TAS) (in a QSPM), 266–270 Total costs, 195–197 Treasury stock, 254 Tumbler, 36 Turnaround strategy, 131 Tweet, 246, 288 U Unionized states, 225 Unrelated diversification, 130–131 Upstream activities, 207 Utility of mission statements, 164 V Vacant niche, 292 Value chain analysis (VCA), 201–204 Value of the dollar, 222–223 Values, 182–183 Variable costs (VC), 195–197 Vertical consistency of objectives, 326 Vertical integration, 124 Visible vs hidden strategies, 374 Vision Statements, 38, 157–175 Definition, 38 Examples, 159, 160 Importance (Benefits) of, 162–163 W Wa, 76, 80 Weaknesses, 39–40, 177–215 Weights vs ratings, 204, 235 Wellness programs, 350 Whistle-blowing, 100–101 Wikis, 288 Wildlife, 110–111 WO Strategies, 251–254 Women, 343–344 Workforce (production/operations function), 197 Workplace romance, 102–103 Worth of a business, 304–308 WT Strategies, 251–254 Y YouTube, 36 Comprehensive Model of the Strategic-Management Process Chapter Outside-USA Strategic Planning SIMPLE AND STRAIGHTFORWARD APPROACH TO STRATEGIC PLANNING Chapter The Internal Audit Chapter Vision and Mission Analysis Chapter Types of Strategies Chapter Strategy Generation and election Chapter Strategy Implementation Chapter 10 Strategy Execution Chapter 11 Strategy Monitoring Chapter The External Audit Chapter Strategy Formulation USED WIDELY AMONG BUSINESSES AND ACADEMIA WORLDWIDE Ethics, Social Responsibility, and Sustainability Strategy Implementation Strategy Evaluation USED TO INTEGRATE AND ORGANIZE ALL CHAPTERS IN THIS TEXT This page intentionally left blank This page intentionally left blank This page intentionally left blank This page intentionally left blank This page intentionally left blank This page intentionally left blank This page intentionally left blank Types of Strategies Chapter Strategy Evaluation Strategy Implementation Chapter USED TO INTEGRATE AND ORGANIZE ALL CHAPTERS IN THIS TEXT Strategy Implementation Strategy Generation and Selection Chapter Strategy Formulation The External Audit Chapter Strategy Monitoring The Internal Audit Chapter SIMPLE AND STRAIGHTFORWARD APPROACH TO STRATEGIC PLANNING Strategy Execution Strategic-Management Process Chapter 11: Vision and Mission Analysis Chapter USED WIDELY AMONG BUSINESSES AND ACADEMIA WORLDWIDE Outside–USA Strategic Planning Chapter Ethics, Social Responsibility, Sustainability Chapter Chapter 10: Comprehensive Model of the MyManagementLab : Improves Student Engagement Before, During, and After Class ® BREAKTHROUGH To better results Prep and Engagement OUGH KTHR BREA • NEW! VIDEO LIBRARY – easy-to-assign assessments, the ability for instructors to add YouTube or other sources, the ability for students to upload video submissions, and the ability for polling and teamwork • Decision-making simulations – NEW and improved feedback for students Place your students in the role of a key decision-maker! Simulations branch based on the decisions students make, providing a variation of scenario paths Upon completion students receive a grade, as well as a detailed report of the choices and the associated consequences of those decisions • Video exercises – UPDATED with new exercises Engaging videos that bring business concepts to life and explore business topics related to the theory students are learning in class Quizzes then assess students’ comprehension of the concepts covered in each video • Learning Catalytics – A “bring your own device” student engagement, assessment, and classroom intelligence system helps instructors analyze students’ critical-thinking skills during lecture • Dynamic Study Modules (DSMs) – UPDATED with additional questions Through adaptive learning, students get personalized guidance where and when they need it most, creating greater engagement, improving knowledge retention, and supporting subject-matter mastery Also available on mobile devices Decision Making Critical Thinking • Writing Space – UPDATED with new commenting tabs, new prompts, and a new tool for students called Pearson Writer A single location to develop and assess concept mastery and critical thinking, the Writing Space offers automatic graded, assisted graded, and create your own writing assignments, allowing you to exchange personalized feedback with students quickly and easily Writing Space can also check students’ work for improper citation or plagiarism by comparing it against the world’s most accurate text comparison database available from Turnitin • Additional Features – Included with the MyLab are a powerful homework and test manager, robust gradebook tracking, Reporting Dashboard, comprehensive online course content, and easily scalable and shareable content http://www.pearsonmylabandmastering.com ... Tests MyLab Decision Sims,Videos, and Learning Catalytics DURING CLASS Strategic ManageMent concepts and cases A Competitive AdvAntAge ApproACh This page intentionally left blank Strategic ManageMent. .. Product Marketing Assistant: Jessica Quazza Team Lead, Program Management: ashley Santora Program Manager: claudia Fernandes Team Lead, Project Management: Jeff Holcomb Project Manager: ann Pulido... concepts and cases A Competitive AdvAntAge ApproACh globAl edition Fred r David Francis Marion University Florence, South Carolina Forest r David Strategic Planning Consultant Boston Columbus Cape