Topic: GrouponAPA format, double spaces, total 10 pages Section I: Introduction, leadership, & Mission Statement 4pages1. A brief introduction to the business name, location, nature of the business, founding date, the number of employees, the brief biographies of founders and current leaders, major shareholders, the composition of clientele, annual revenue, the growth history of the business2. The firm’s mission StatementThe mission, The vision, Values (corporate culture), Major goals Section II: External Analyses 6pages/ refer to the textbook. Conduct an external analyses1. Identify the industry. ( Its products or services, Key players)2. Environmental analyses of the industry Discuss at least two factors (Political factors, Economic factors, Social factors, Technological factors)3. Use Michael Porter’s Five Forces’ Model· Risk of entry by potential competitors (Entry barriers)· Intensity of rivalry among established firms (Who and why)· Bargaining power of suppliers (Who and why)· Bargaining power of buyers (Who and why)· Threat of substitutes (Who and why)4. Andrew Grove’s sixth force (Who and why)5. Use the Industry Life Cycle Analysis model to identify the stage in which the firm’s industry finds itself
strategic_management_theory_an_integrated_approach_12th.pdf
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STRATEGIC
MANAGEMENT
12e
THEORY
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STRATEGIC
MANAGEMENT
12e
THEORY
CHARLES W. L. HILL
University of Washington – Foster School of Business
MELISSA A. SCHILLING
New York University – Stern School of Business
GARETH R. JONES
Australia ● Brazil ● Mexico ● Singapore ● United Kingdom ● United States
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Strategic Management, Theory, 12e
Charles W. L. Hill
Melissa A. Schilling
Gareth R. Jones
Vice President, General Manager, Social
Science & Qualitative Business: Erin
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Cengage Learning
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Print Number: 01
Print Year: 2016
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BRIEF CONTENTS
PART ONE
1
2
Strategic Leadership: Managing the Strategy-Making Process
for Competitive Advantage
External Analysis: The Identification of Opportunities and Threats
PART TWO
3
4
10
11
12
78
109
146
170
202
239
279
308
IMPLEMENTING STRATEGY
Corporate Governance, Social Responsibility, and Ethics
Implementing Strategy Through Organization
Glossary
Index
42
STRATEGIES
Business-Level Strategy
Business-Level Strategy and the Industry Environment
Strategy and Technology
Strategy in the Global Environment
Corporate-Level Strategy: Horizontal Integration, Vertical
Integration, and Strategic Outsourcing
Corporate-Level Strategy: Related and Unrelated Diversification
PART FOUR
2
THE NATURE OF COMPETITIVE ADVANTAGE
Internal Analysis: Resources and Competitive Advantage
Competitive Advantage Through Functional-Level Strategies
PART THREE
5
6
7
8
9
INTRODUCTION TO STRATEGIC MANAGEMENT
348
384
G-1
I-1
v
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
vi
CONTENTS
Preface
Acknowledgments
Dedication
xv
xix
xxii
PART ONE
INTRODUCTION TO STRATEGIC MANAGEMENT
Chapter 1
Strategic Leadership: Managing the Strategy-Making Process
for Competitive Advantage
2
Opening Case: The Rise of Lululemon 2
Overview 4
Strategic Leadership, Competitive Advantage, and Superior
Performance 5
Superior Performance 5
Competitive Advantage and a Company’s Business Model
Industry Differences in Performance 8
Performance in Nonprofit Enterprises 9
Strategic Managers 10
Corporate-Level Managers 11
Business-Level Managers 12
Functional-Level Managers 12
The Strategy-Making Process 13
A Model of the Strategic Planning Process 13
Mission Statement 15
Major Goals 17
External Analysis 18
7
Strategy in Action 1.1: Strategic Analysis at Time Inc. 19
Internal Analysis 20
SWOT Analysis and the Business Model 20
Strategy Implementation 21
The Feedback Loop 22
Strategy as an Emergent Process 22
Strategy Making in an Unpredictable World 22
Autonomous Action: Strategy Making by Lower-Level Managers 23
Serendipity and Strategy 24
Intended and Emergent Strategies 24
Strategy in Action 1.2: A Strategic Shift at Charles Schwab
Strategic Planning in Practice 27
Scenario Planning 27
Decentralized Planning 29
25
vi
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Contents
Strategic Decision Making 29
Cognitive Biases and Strategic Decision Making
Techniques for Improving Decision Making 31
Strategic Leadership 31
Vision, Eloquence, and Consistency 32
Articulation of the Business Model 32
Commitment 33
Being Well Informed 33
Willingness to Delegate and Empower 33
The Astute Use of Power 34
Emotional Intelligence 34
Chapter 2
vii
30
External Analysis: The Identification of Opportunities
and Threats
42
Opening Case: Competition in the U.S. Market for Wireless
Telecommunications 42
Overview 44
Defining an Industry 44
Porter’s Competitive Forces Model 45
Risk of Entry by Potential Competitors 46
Rivalry Among Established Companies 48
Strategy in Action 2.1: Circumventing Entry Barriers into the Soft Drink
Industry 49
Strategy in Action 2.2: Price Wars in the Breakfast Cereal Industry 52
The Bargaining Power of Buyers 53
The Bargaining Power of Suppliers 54
Substitute Products 55
Complementors 55
Summary: Why Industry Analysis Matters 56
Strategic Groups Within Industries 57
Implications of Strategic Groups 59
The Role of Mobility Barriers 59
Industry Life-Cycle Analysis 60
Embryonic Industries 60
Growth Industries 61
Industry Shakeout 62
Mature Industries 63
Declining Industries 63
Summary 64
Limitations of Models for Industry Analysis 64
Life-Cycle Issues 64
Innovation and Change 65
Company Differences 66
The Macroenvironment 67
Macroeconomic Forces 68
Global Forces 69
Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
viii
Contents
Technological Forces 69
Demographic Forces 69
Social Forces 70
Political and Legal Forces 70
PART TWO
THE NATURE OF COMPETITIVE ADVANTAGE
Chapter 3
Internal Analysis: Resources and Competitive Advantage
Opening Case: Southwest Airlines 78
Overview 80
Competitive Advantage 80
Distinctive Competencies 81
Resources 81
Resource Quality: The VRIO Framework 83
Resources and Sustained Competitive Advantage
Value Creation and Profitability 87
The Value Chain 90
Primary Activities 91
Support Activities 92
78
84
Strategy in Action 3.1: Value Creation at Burberry 93
Strategy in Action 3.2: Competitive Advantage at Zara 94
Value-Chain Analysis: Implications 95
The Building Blocks of Competitive Advantage 96
Efficiency 97
Quality as Excellence and Reliability 97
Innovation 99
Customer Responsiveness 99
Analyzing Competitive Advantage and Profitability 100
Comparing Wal-Mart and Target 102
Chapter 4
Competitive Advantage Through Functional-Level
Strategies
109
Opening Case: Trouble at McDonald’s 109
Overview 111
Achieving Superior Efficiency 111
Efficiency and Economies of Scale 112
Efficiency and Learning Effects 113
Strategy in Action 4.1: Learning Effects in Cardiac Surgery 114
Efficiency and the Experience Curve 115
Efficiency, Flexible Production Systems, and Mass Customization
Strategy in Action 4.2: Pandora: Mass Customizing Internet Radio
Marketing and Efficiency 120
117
119
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Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Contents
ix
Materials Management, Just-in-Time Systems, and Efficiency 121
Research and Development Strategy and Efficiency 122
Human Resource Strategy and Efficiency 123
Hiring Strategy 123
Employee Training 123
Pay for Performance 124
Information Systems and Efficiency 124
Infrastructure and Efficiency 125
Summary 125
Achieving Superior Quality 126
Attaining Superior Reliability 127
Implementing Reliability Improvement Methodologies 127
Strategy in Action 4.3: General Electric’s Six Sigma Quality
Improvement Process 128
Improving Quality as Excellence 130
Achieving Superior Innovation 132
The High Failure Rate of Innovation 133
Reducing Innovation Failures 134
Achieving Superior CUSTOMER Responsiveness 136
Focusing on the Customer 136
Demonstrating Leadership 136
Shaping Employee Attitudes 136
Knowing Customer Needs
137
Satisfying Customer Needs 137
Customization
137
Response Time 138
PART THREE
Chapter 5
STRATEGIES
Business-Level Strategy
Opening Case: Virgin America 146
Overview 148
Low Cost and Differentiation 148
Lowering Costs 148
Differentiation 149
The Differentiation–Low Cost Tradeoff 151
Value Innovation: Greater Differentiation at a Lower Cost
146
153
Strategy in Action 5.1: IKEA: Value Innovation in Furniture Retailing
Who Are Our Customers? Market Segmentation 155
Three Approaches to Market Segmentation 155
Market Segmentation, Costs and Revenues 156
Business-Level Strategy Choices 158
154
Strategy in Action 5.2: Microsoft Office Versus Google Apps 160
Business-Level Strategy, Industry, and Competitive Advantage 161
Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
x
Contents
Implementing Business-Level Strategy 162
Lowering Costs Through Functional Strategy and Organization 163
Differentiation Through Functional-Level Strategy and Organization 163
Competing Differently: Blue Ocean strategy 164
Chapter 6
Business-Level Strategy and the Industry Environment
170
Opening Case: Can Best Buy Survive the Rise of E-commerce? 170
Overview 173
Strategy in a Fragmented Industry 173
Reasons for Fragmentation 173
Consolidating a Fragmented Industry Through Value Innovation 174
Chaining and Franchising 175
Horizontal Mergers 176
Strategies in Embryonic and Growth Industries 177
The Changing Nature of Market Demand 178
Strategic Implications: Crossing the Chasm 181
Strategy in Action 6.1: Crossing the Chasm in the
Smartphone Market 182
Strategic Implications of Differences in Market Growth Rates
Strategy in Mature Industries 185
Strategies to Deter Entry 185
Strategies to Manage Rivalry 188
183
Strategy in Action 6.2: Toyota Uses Market Development to Become the
Global Leader 192
Strategies in Declining Industries 194
The Severity of Decline 194
Choosing a Strategy 195
Chapter 7
Strategy and Technology
202
Opening Case: Blu-ray Versus HD-DVD and Streaming: Standards
Battles in Video 202
Overview 204
Technical Standards and Format Wars 205
Strategy in Action 7.1: “Segment Zero”—A Serious Threat to
Microsoft? 206
Examples of Standards 208
Benefits of Standards 209
Establishment of Standards 210
Network Effects, Positive Feedback, and Lockout 211
Strategies for Winning a Format War 214
Ensure a Supply of Complements 214
Leverage Killer Applications 215
Aggressive Pricing and Marketing 215
Cooperate with Competitors 216
License the Format 216
Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
Contents
xi
Costs in High-Technology Industries 217
Comparative Cost Economics 217
Strategic Significance 218
Strategy in Action 7.2: Lowering the Cost of Ultrasound Equipment
Through Digitalization 219
Capturing First-Mover Advantages 220
First-Mover Advantages 221
First-Mover Disadvantages 222
Strategies for Exploiting First-Mover Advantages 223
Technological Paradigm Shifts 226
Paradigm Shifts and the Decline of Established Companies 227
Strategic Implications for Established Companies 231
Strategic Implications for New Entrants 232
Chapter 8
Strategy in the Global Environment
239
Opening Case: The Globalization of Starbucks 239
Overview 241
Global and National Environments 242
The Globalization of Production and Markets 242
National Competitive Advantage 243
Global Expansion, Profitability, and Profit Growth 246
Expanding the Market: Leveraging Products 247
Realizing Cost Economies from Global Volume 247
Realizing Location Economies 248
Leveraging the Competencies of Global Subsidiaries 249
Cost Pressures and Pressures for Local Responsiveness 250
Pressures for Cost Reductions 251
Pressures for Local Responsiveness 252
Strategy in Action 8.1: Local Responsiveness at MTV Networks
Choosing a Global Strategy 255
Global Standardization Strategy 256
Localization Strategy 257
Transnational Strategy 258
International Strategy 259
Changes in Strategy over Time 259
Strategy in Action 8.2: The Evolving Strategy of Coca-Cola
The Choice of Entry Mode 262
Exporting 262
Licensing 263
Franchising 264
Joint Ventures 265
Wholly Owned Subsidiaries 266
Choosing an Entry Strategy 267
Global Strategic Alliances 269
Advantages of Strategic Alliances 269
253
261
Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
xii
Contents
Disadvantages of Strategic Alliances 270
Making Strategic Alliances Work 271
Chapter 9
Corporate-Level Strategy: Horizontal Integration, Vertical
Integration, and Strategic Outsourcing
279
Opening Case: The Proposed Merger of Comcast and Time
Warner Cable 279
Overview 281
Corporate-Level Strategy and the Multibusiness Model 281
Horizontal Integration: Single-Industry Corporate Strategy 282
Benefits of Horizontal Integration 284
Strategy in Action 9.1: Wal-Mart’s Expansion into Other
Retail Formats 286
Problems with Horizontal Integration 287
Vertical Integration: Entering New Industries to Strengthen the “Core”
Business Model 288
Increasing Profitability Through Vertical Integration 290
Problems with Vertical Integration 293
Alternatives to Vertical Integration: Cooperative Relationships 294
Short-Term Contracts and Competitive Bidding 295
Strategic Alliances and Long-Term Contracting 295
Building Long …
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