Preface to Eighth Edition xvii

Guide to Web Resources xix

PART I INTRODUCTION 1

1 The Concept of Strategy 3

Introduction and Objectives 4

The Role of Strategy in Success 4

The Basic Framework for Strategy Analysis 10

A Brief History of Business Strategy 12

Strategy Today 15

How Is Strategy Made? The Strategy Process 21

Strategic Management of Not-For-Profit Organizations 25

Summary 27

Self-Study Questions 28

Notes 29

PART II THE TOOLS OF STRATEGY ANALYSIS 31

2 Goals, Values, and Performance 33

Introduction and Objectives 34

Strategy as a Quest for Value 35

Putting Performance Analysis into Practice 41

Beyond Profit: Values and Corporate Social Responsibility 49

Beyond Profit: Strategy and Real Options 52

Summary 55

Self-Study Questions 56

Notes 57

3 Industry Analysis: The Fundamentals 59

Introduction and Objectives 60

From Environmental Analysis to Industry Analysis 60

Analyzing Industry Attractiveness 62

Applying Industry Analysis to Forecasting Industry Profitability 73

Using Industry Analysis to Develop Strategy 74

Defining Industries: Where to Draw the Boundaries 77

From Industry Attractiveness to Competitive Advantage: Identifying Key Success Factors 79

Summary 83

Self-Study Questions 84

Notes 84

4 Further Topics in Industry and Competitive Analysis 87

Introduction and Objectives 88

Extending the Five Forces Framework 88

Dynamic Competition: Hypercompetition, Game Theory, and Competitor Analysis 91

Segmentation and Strategic Groups 99

Summary 106

Self-Study Questions 107

Notes 107

5 Analyzing Resources and Capabilities 111

Introduction and Objectives 112

The Role of Resources and Capabilities in Strategy Formulation 112

Identifying Resources and Capabilities 116

Appraising Resources and Capabilities 126

Developing Strategy Implications 131

Summary 136

Self-Study Questions 137

Notes 138

6 Organization Structure and Management Systems: The Fundamentals of Strategy Implementation 141

Introduction and Objectives 142

From Strategy to Execution 143

Organizational Design: The Fundamentals of Organizing 147

Organizational Design: Choosing the Right Structure 157

Summary 164

Self-Study Questions 165

Notes 166

PART III BUSINESS STRATEGY AND THE QUEST FOR COMPETITIVE ADVANTAGE 167

7 The Sources and Dimensions of Competitive Advantage 169

Introduction and Objectives 170

How Competitive Advantage Emerges and Is Sustained 170

Types of Competitive Advantage: Cost and Differentiation 177

Cost Analysis 179

Differentiation Analysis 188

Implementing Cost and Differentiation Strategies 201

Summary 202

Self-Study Questions 203

Notes 204

8 Industry Evolution and Strategic Change 207

Introduction and Objectives 208

The Industry Life Cycle 209

Managing Organizational Adaptation and Strategic Change 217

Managing Strategic Change 224

Summary 240

Self-Study Questions 241

Notes 242

9 Technology-based Industries and the Management of Innovation 245

Introduction and Objectives 246

Competitive Advantage in Technology-intensive Industries 247

Which Mechanisms Are Effective at Protecting Innovation? 253

Strategies to Exploit Innovation: How and When to Enter 254

Competing for Standards 259

Implementing Technology Strategies: Creating the Conditions for Innovation 265

Summary 272

Self-Study Questions 274

Notes 274

10 Competitive Advantage in Mature Industries 277

Introduction and Objectives 278

Competitive Advantage in Mature Industries 278

Strategy Implementation in Mature Industries: Structure, Systems, and Style 284

Strategies for Declining Industries 287

Summary 290

Self-Study Questions 291

Notes 291

PART IV CORPORATE STRATEGY 293

11 Vertical Integration and the Scope of the Firm 295

Introduction and Objectives 296

Transaction Costs and the Scope of the Firm 297

The Benefits and Costs of Vertical Integration 300

Designing Vertical Relationships 306

Summary 311

Self-Study Questions 312

Notes 313

12 Global Strategy and the Multinational Corporation 315

Introduction and Objectives 316

Implications of International Competition for Industry Analysis 317

Analyzing Competitive Advantage in an International Context 319

Applying the Framework: International Location of Production 322

Applying the Framework: Foreign Entry Strategies 326

Multinational Strategies: Global Integration versus National Differentiation 328

Strategy and Organization within the Multinational Corporation 334

Summary 340

Self-Study Questions 341

Notes 342

13 Diversification Strategy 345

Introduction and Objectives 346

Trends in Diversifi cation over Time 347

Motives for Diversifi cation 350

Competitive Advantage from Diversifi cation 353

Diversification and Performance 358

The Meaning of Relatedness in Diversification 359

Summary 361

Self-Study Questions 362

Notes 362

14 Implementing Corporate Strategy: Managing the Multibusiness Firm 365

Introduction and Objectives 366

The Role of Corporate Management 367

Managing the Corporate Portfolio 367

Managing Individual Businesses 370

Managing Linkages across Businesses 375

Managing Change in the Multibusiness Corporation 379

Governance of Multibusiness Corporations 385

Summary 391

Self-Study Questions 392

Notes 393

15 External Growth Strategies: Mergers,

Acquisitions, and Alliances 395

Introduction and Objectives 396

Mergers and Acquisitions: Causes and Consequences 396

Strategic Alliances 402

Summary 407

Self-Study Questions 407

Notes 408

16 Current Trends in Strategic Management 411

Introduction 412

The New Environment of Business 412

New Directions in Strategic Thinking 417

Redesigning Organizations 421

The Changing Role of Managers 425

Summary 427

Notes 428

Glossary 431

Index 437

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