Strategic Management Concepts

by Hitt, Michael A.; Ireland, R. Duane; Hoskisson, Robert E.

• ISBN13: 9780324405361
• ISBN10: 0324405367
• Edition: 7th
• Format: Paperback
• Copyright: 2006-03-06
• Publisher: Thomson-South Western

Summary

Are you looking for the perfect tool to guide you in today's fast paced business world? In STRATEGIC MANAGEMENT: COMPETITIVENESS AND GLOBALIZATION you will discover a unique model that blends both new and old ideas resulting in a cutting edge, accurate and relevant text. Specific examples, models, and figures emphasize important points and make the text easy to understand.

Table of Contents

Preface	xxii
Part 1 Strategic Management Inputs	1	(101)
Strategic Management and Strategic Competitiveness	2	(32)
Opening Case: General Motors: How Bright Is the Future?	3	(3)
The 21st-Century Competitive Landscape	6	(9)
The Global Economy	7	(1)
The March of Globalization	8	(2)
Technology and Technological Changes	10	(2)
Strategic Focus: Amazon.com: Using Technology to Create Change	12	(2)
Strategic Focus: Organizational Change: Be Ready, Because It Can't Be Avoided!	14	(1)
The I/O Model of Above-Average Returns	15	(2)
The Resource-Based Model of Above-Average Returns	17	(2)
Vision and Mission	19	(2)
Vision	19	(1)
Mission	20	(1)
Stakeholders	21	(3)
Classifications of Stakeholders	21	(3)
Strategic Leaders	24	(2)
The Work of Effective Strategic Leaders	25	(1)
Predicting Outcomes of Strategic Decisions: Profit Pools	25	(1)
The Strategic Management Process	26	(2)
Summary	28	(1)
Review Questions	29	(1)
Experiential Exercises	29	(2)
Notes	31	(3)
The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis	34	(38)
Opening Case: General and Competitive Environmental Influences on U.S. Airlines	35	(2)
The General, Industry, and Competitor Environments	37	(2)
External Environmental Analysis	39	(3)
Scanning	40	(1)
Monitoring	41	(1)
Forecasting	41	(1)
Assessing	41	(1)
Segments of the General Environment	42	(9)
The Demographic Segment	42	(3)
The Economic Segment	45	(1)
The Political/Legal Segment	46	(1)
The Sociocultural Segment	47	(1)
The Technological Segment	48	(1)
The Global Segment	49	(2)
Industry Environment Analysis	51	(10)
Strategic Focus: The Nature of the Competitive Forces in the Global Automobile Industry	52	(1)
Threat of New Entrants	53	(3)
Bargaining Power of Suppliers	56	(1)
Bargaining Power of Buyers	57	(1)
Threat of Substitute Products	57	(1)
Intensity of Rivalry among Competitors	58	(1)
Strategic Focus: Satellite TV Service Substitutes for Digital Cable Service, Which Substitutes for Local Telephone Service	59	(2)
Interpreting Industry Analyses	61	(1)
Strategic Groups	62	(1)
Competitor Analysis	63	(2)
Ethical Considerations	65	(1)
Summary	66	(1)
Review Questions	66	(1)
Experiential Exercises	67	(1)
Notes	68	(4)
The Internal Environment: Resources, Capabilities, and Core Competencies	72	(30)
Opening Case: The Capability to Innovate: A Critical Source of Competitive Advantage	73	(2)
The Nature of Internal Environmental Analysis	75	(4)
The Context of Internal Analysis	75	(1)
Creating Value	75	(2)
The Challenge of Internal Analysis	77	(2)
Resources, Capabilities, and Core Competencies	79	(6)
Resources	79	(3)
Strategic Focus: Human Capital: Underutilizing Valuable Intangible Assets	82	(1)
Capabilities	83	(1)
Core Competencies	84	(1)
Building Core Competencies	85	(7)
Four Criteria of Sustainable Competitive Advantage	85	(4)
Value Chain Analysis	89	(3)
Outsourcing	92	(3)
Strategic Focus: Outsourcing---Boon or Bane to Competitiveness?	94	(1)
Competencies, Strengths, Weaknesses, and Strategic Decisions	95	(1)
Summary	96	(1)
Review Questions	97	(1)
Experiential Exercises	97	(1)
Notes	98	(4)
Part 2 Strategic Actions: Strategy Formulation	102	(196)
Business-Level Strategy	104	(32)
Opening Case: Lamps of Distinction: Where Did the Customers Go?	105	(2)
Customers: Their Relationship with Business-Level Strategies	107	(5)
Effectively Managing Relationships with Customers	108	(1)
Reach, Richness, and Affiliation	108	(1)
Who: Determining the Customers to Serve	109	(2)
What: Determining Which Customer Needs to Satisfy	111	(1)
How: Determining Core Competencies Necessary to Satisfy Customer Needs	112	(1)
The Purpose of a Business-Level Strategy	112	(2)
Types of Business-Level Strategies	114	(16)
Cost Leadership Strategy	115	(4)
Strategic Focus: Beating Wal-Mart It's Tough, But It Can Be Done	119	(1)
Differentiation Strategy	120	(5)
Focus Strategies	125	(2)
Integrated Cost Leadership/Differentiation Strategy	127	(4)
Strategic Focus: Maytag Corporation: A Cost Leader? A Differentiator?	131
Summary	130	(2)
Review Questions	132	(1)
Experiential Exercises	132	(1)
Notes	133	(3)
Competitive Rivalry and Competitive Dynamics	136	(30)
Opening Case: Southwest Airlines: The King of the Hill That Is Changing an Industry	137	(2)
A Model of Competitive Rivalry	139	(1)
Competitor Analysis	140	(3)
Market Commonality	141	(1)
Resource Similarity	142	(1)
Drivers of Competitive Actions and Responses	143	(3)
Strategic Focus: Is General Motors Stuck in the 1970s?	145	(1)
Competitive Rivalry	146	(1)
Strategic and Tactical Actions	146	(1)
Likelihood of Attack	147	(5)
First-Mover Incentives	147	(2)
Organizational Size	149	(1)
Quality	150	(2)
Likelihood of Response	152	(3)
Type of Competitive Action	152	(1)
Actor's Reputation	152	(1)
Dependence on the Market	153	(1)
Strategic Focus: The Continuing Saga of Coke and Pepsi Competition: Has Coke Fizzled While Pepsi Popped the Top?	154	(1)
Competitive Dynamics	155	(4)
Slow-Cycle Markets	155	(1)
Fast-Cycle Markets	156	(2)
Standard-Cycle Markets	158	(1)
Summary	159	(2)
Review Questions	161	(1)
Experiential Exercises	161	(2)
Notes	163	(3)
Corporate-Level Strategy	166	(30)
Opening Case: Dining Concepts: What Is the Best Combination?	167	(2)
Levels of Diversification	169	(4)
Low Levels of Diversification	169	(2)
Moderate and High Levels of Diversification	171	(1)
Strategic Focus: What Is the Best Way to Manage Product Diversification at GE?	172	(1)
Reasons for Diversification	173	(2)
Value-Creating Diversification: Related Constrained and Related Linked Diversification	175	(6)
Operational Relatedness: Sharing Activities	175	(1)
Corporate Relatedness: Transferring of Core Competencies	176	(1)
Market Power	177	(1)
Strategic Focus: Adding Maytag's Products to Whirlpool's: An Effort to Develop Market Power	178	(2)
Simultaneous Operational Relatedness and Corporate Relatedness	180	(1)
Unrelated Diversification	181	(2)
Efficient Internal Capital Market Allocation	181	(1)
Restructuring of Assets	182	(1)
Value-Neutral Diversification: Incentives and Resources	183	(5)
Incentives to Diversify	183	(4)
Resources and Diversification	187	(1)
Value-Reducing Diversification: Managerial Motives to Diversify	188	(2)
Summary	190	(1)
Review Questions	190	(1)
Experiential Exercise	191	(1)
Notes	192	(4)
Acquisition and Restructuring Strategies	196	(32)
Opening Case: Domestic and Cross-Border Acquisitions: Meeting Competitive Challenges and Acquiring Critical Resources	197	(2)
The Popularity of Merger and Acquisition Strategies	199	(2)
Mergers, Acquisitions, and Takeovers: What Are the Differences?	200	(1)
Reasons for Acquisitions	201	(7)
Increased Market Power	201	(2)
Overcoming Entry Barriers	203	(1)
Strategic Focus: Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquisitions	204	(1)
Cost of New Product Development and Increased Speed to Market	205	(1)
Lower Risk Compared to Developing New Products	206	(1)
Increased Diversification	207	(1)
Reshaping the Firm's Competitive Scope	207	(1)
Learning and Developing New Capabilities	208	(1)
Problems in Achieving Acquisition Success	208	(6)
Integration Difficulties	209	(1)
Inadequate Evaluation of Target	210	(1)
Large or Extraordinary Debt	211	(1)
Inability to Achieve Synergy	211	(1)
Too Much Diversification	212	(1)
Managers Overly Focused on Acquisitions	213	(1)
Too Large	214	(1)
Effective Acquisitions	214	(2)
Restructuring	216	(6)
Downsizing	217	(1)
Downscoping	217	(1)
Strategic Focus: Restructuring through Firm Spin-offs Allows for Value Creation	218	(2)
Leveraged Buyouts	220	(1)
Restructuring Outcomes	220	(2)
Summary	222	(1)
Review Questions	222	(1)
Experiential Exercises	223	(1)
Notes	223	(5)
International Strategy	228	(38)
Opening Case: Chinese Firms' Incentives for Foreign Acquisitions	229	(3)
Identifying International Opportunities: Incentives to Use an International Strategy	232	(4)
Increased Market Size	233	(1)
Return on Investment	234	(1)
Economies of Scale and Learning	234	(1)
Location Advantages	235	(1)
International Strategies	236	(5)
International Business-Level Strategy	236	(2)
International Corporate-Level Strategy	238	(3)
Environmental Trends	241	(4)
Strategic Focus: Whirlpool's Progress toward the Transnational Strategy	242	(1)
Liability of Foreignness	243	(1)
Regionalization	244	(1)
Choice of International Entry Mode	245	(6)
Exporting	245	(1)
Licensing	246	(1)
Strategic Alliances	247	(1)
Acquisitions	248	(1)
New Wholly Owned Subsidiary	249	(1)
Dynamics of Mode of Entry	250	(1)
Strategic Competitiveness Outcomes	251	(2)
International Diversification and Returns	251	(1)
International Diversification and Innovation	252	(1)
Complexity of Managing Multinational Firms	253	(1)
Risks in an International Environment	253	(4)
Political Risks	253	(1)
Economic Risks	254	(1)
Strategic Focus: Are China and India Changing Their Approach to Intellectual Property Enforcement?	255	(1)
Limits to International Expansion: Management Problems	256	(1)
Summary	257	(1)
Review Questions	258	(1)
Experiential Exercises	259	(1)
Notes	260	(6)
Cooperative Strategy	266	(32)
Opening Case: Using Alliances to Build Greater Value	267	(2)
Strategic Alliances as a Primary Type of Cooperative Strategy	269	(4)
Three Types of Strategic Alliances	269	(2)
Reasons Firms Develop Strategic Alliances	271	(2)
Business-Level Cooperative Strategy	273	(6)
Complementary Strategic Alliances	274	(2)
Competition Response Strategy	276	(1)
Uncertainty-Reducing Strategy	276	(1)
Competition-Reducing Strategy	277	(1)
Assessment of Business-Level Cooperative Strategies	278	(1)
Corporate-Level Cooperative Strategy	279	(4)
Diversifying Strategic Alliance	280	(1)
Synergistic Strategic Alliance	280	(1)
Franchising	280	(1)
Strategic Focus: Franchising Finger Foods the American Way	281	(1)
Assessment of Corporate-Level Cooperative Strategies	282	(1)
International Cooperative Strategy	283	(1)
Network Cooperative Strategy	284	(3)
Alliance Network Types	284	(1)
Strategic Focus: Forming an International Alliance Network for Innovation and Its Use	285	(2)
Competitive Risks with Cooperative Strategies	287	(1)
Managing Cooperative Strategies	288	(2)
Summary	290	(2)
Review Questions	292	(1)
Experiential Exercises	292	(1)
Notes	293	(5)
Part 3 Strategic Actions: Strategy Implementation	298	(127)
Corporate Governance	300	(34)
Opening Case: Is Managerial Incentive Compensation Too High?	301	(3)
Separation of Ownership and Managerial Control	304	(7)
Agency Relationships	305	(1)
Product Diversification as an Example of an Agency Problem	306	(2)
Agency Costs and Governance Mechanisms	308	(1)
Strategic Focus: Sarbanes-Oxley Act Increases Governance Intensity	309	(2)
Ownership Concentration	311	(1)
The Growing Influence of Institutional Owners	311	(1)
Board of Directors	312	(5)
Strategic Focus: Governing the CEO	315	(1)
Enhancing the Effectiveness of the Board of Directors	316	(1)
Executive Compensation	317	(2)
A Complicated Governance Mechanism	317	(1)
The Effectiveness of Executive Compensation	318	(1)
Market for Corporate Control	319	(3)
Managerial Defense Tactics	321	(1)
International Corporate Governance	322	(3)
Corporate Governance in Germany	323	(1)
Corporate Governance in Japan	324	(1)
Global Corporate Governance	325	(1)
Governance Mechanisms and Ethical Behavior	325	(1)
Summary	326	(1)
Review Questions	327	(1)
Experiential Exercises	328	(1)
Notes	329	(5)
Organizational Structure and Controls	334	(38)
Opening Case: Sony's Struggles with Its Online Music Business: Organization and Cooperation Difficulties among Its Businesses	335	(1)
Organizational Structure and Controls	336	(5)
Organizational Structure	337	(1)
Organizational Controls	337	(1)
Strategic Focus: A Change in Structure Leads to Improved Strategy Implementation at Kellogg Co.	338	(3)
Relationships between Strategy and Structure	341	(1)
Evolutionary Patterns of Strategy and Organizational Structure	341	(21)
Simple Structure	341	(2)
Functional Structure	343	(1)
Multidivisional Structure	343	(1)
Matches between Business-Level Strategies and the Functional Structure	344	(3)
Matches between Corporate-Level Strategies and the Multidivisional Structure	347	(7)
Matches between International Strategies and Worldwide Structures	354	(5)
Strategic Focus: Unilever is Reorganizing to Implement the Transnational Strategy by Using the Combination Structure	359	(1)
Matches between Cooperative Strategies and Network Structures	360	(2)
Implementing Business-Level Cooperative Strategies	362	(1)
Implementing Corporate-Level Cooperative Strategies	362	(1)
Implementing International Cooperative Strategies	363	(1)
Summary	364	(1)
Review Questions	365	(1)
Experiential Exercises	366	(2)
Notes	368	(4)
Strategic Leadership	372	(32)
Opening Case: Long-Term Vision or Operational Performance? The ``Un-Carly'' Takes Hewlett-Packard's Reins	373	(2)
Strategic Leadership and Style	375	(2)
The Role of Top-Level Managers	377	(4)
Top Management Teams	377	(4)
Managerial Succession	381	(3)
Key Strategic Leadership Actions	384	(12)
Determining Strategic Direction	384	(1)
Effectively Managing the Firm's Resource Portfolio	385	(1)
Strategic Focus: How Do Managers Acquire, Protect, and Use Resources Wisely?	386	(3)
Sustaining an Effective Organizational Culture	389	(2)
Strategic Focus: Change Lost in a `Sea' of Organizational Politics	391	(1)
Emphasizing Ethical Practices	392	(2)
Establishing Balanced Organizational Controls	394	(2)
Summary	396	(2)
Experiential Exercises	398
Review Questions	397	(2)
Notes	399	(5)
Strategic Entrepreneurship	404	(21)
Opening Case: W.L. Gore & Associates: The Most Innovative Company in America?	405	(2)
Entrepreneurship and Entrepreneurial Opportunities	407	(1)
Innovation	408	(1)
Entrepreneurs	409	(1)
International Entrepreneurship	410	(1)
Internal Innovation	411	(5)
Strategic Focus: Panera Bread Company: Thriving through Internal Innovation	412	(1)
Incremental and Radical Innovation	413	(1)
Autonomous Strategic Behavior	414	(2)
Induced Strategic Behavior	416	(1)
Implementing Internal Innovations	416	(3)
Cross-Functional Product Development Teams	417	(1)
Facilitating Integration and Innovation	417	(1)
Creating Value from Internal Innovation	418	(1)
Innovation through Cooperative Strategies	419	(2)
Strategic Focus: Cooperating to Innovate in the DVD Rental and Sales Markets	420	(1)
Innovation through Acquisitions	421	(1)
Creating Value through Strategic Entrepreneurship	422	(1)
Summary	423	(1)
Review Questions	424	(1)
Experiential Exercises	424	(1)
Notes	425