Strategic Management and Business Policy: Globalization, Innovation and Sustainability: Global Edition

A class-tested approach to Strategy for Strategic Management and Business Policy courses Wheelen and Hunger's class-tested approach to teaching Strategy is brought into sharper focus with a new emphasis on globalization, innovation, and sustainability. This text equips students with the strategic concepts they will need to know as they face the issues that all organizations must build upon to push their businesses forward. For the first time in 30 years, the 14th edition has added two new authors to the text. Alan Hoffman, a major contributor to the 13th edition, is a former textbook author and world-renowned author of strategy business cases, and Chuck Bamford, who was a student of Tom Wheelen and David Hunger back in 1980 at the University of Virginia (McIntire School of Commerce), has authored four other textbooks. They join J. David Hunger and bring a fresh perspective to this extraordinarily well-researched and practically crafted text. Please note that the product you are purchasing does not include MyManagementLab. MyManagementLab Join over 11 million students benefiting from Pearson MyLabs.This title can be supported by MyManagementLab, an online homework and tutorial system designed to test and build your understanding. Would you like to use the power of MyManagementLab to accelerate your learning? You need both an access card and a course ID to access MyManagementLab. These are the steps you need to take:1. Make sure that your lecturer is already using the system Ask your lecturer before purchasing a MyLab product as you will need a course ID from them before you can gain access to the system.2. Check whether an access card has been included with the book at a reduced cost If it has, it will be on the inside back cover of the book.3. If you have a course ID but no access code, you can benefit from MyManagementLab at a reduced price by purchasing a pack containing a copy of the book and an access code for MyManagementLab (ISBN:9781292061153)4. If your lecturer is using the MyLab and you would like to purchase the product...Go to www.mymanagementlab.com to buy access to this interactive study programme. For educator access, contact your Pearson representative. To find out who your Pearson representative is, visit www.pearsoned.co.uk/replocator Cover 1 Brief Contents 6 Contents 8 Preface 24 About the Authors 32 Part One: Introduction to Strategic Management and Business Policy 36 Chapter 1: Basic Concepts of Strategic Management 37 The Study of Strategic Management 39 Phases of Strategic Management 39 Benefits of Strategic Management 40 Globalization, Innovation, and Sustainability: Challenges to Strategic Management 42 Impact of Globalization 43 Impact of Innovation 44 Global Issue: Regional Trade Associations Replace National Trade Barriers 44 Impact of Sustainability 45 Theories of Organizational Adaptation 46 Creating a Learning Organization 47 Basic Model of Strategic Management 48 Environmental Scanning 49 Strategy Formulation 51 Strategy Implementation 54 Evaluation and Control 56 Feedback/Learning Process 56 Initiation of Strategy: Triggering Events 57 Strategic Decision Making 58 What Makes a Decision Strategic 58 Mintzberg's Modes of Strategic Decision Making 59 Strategic Decision-Making Process: Aid to Better Decisions 60 The Strategic Audit: Aid to Strategic Decision Making 61 End of Chapter Summary 62 Appendix 1.A: Strategic Audit of a Corporation 67 Chapter 2: Corporate Governance 75 Role of the Board of Directors 78 Responsibilities of the Board 79 Members of a Board of Directors 81 Innovation Issue: JCPenney and Innovation 82 Strategy Highlight: Agency Theory Versus Stewardship Theory in Corporate Governance 84 Nomination and Election of Board Members 87 Organization of the Board 88 Impact of the Sarbanes-Oxley Act on U.S. Corporate Governance 89 Global Issue: Global Business Board Activism At Yahoo! 91 Trends in Corporate Governance 92 The Role of Top Management 93 Responsibilities of Top Management 93 Sustainability Issue: CEO Pay and Corporate Performance 94 End of Chapter Summary 97 Chapter 3: Social Responsibility and Ethics in Strategic Management 103 Social Responsibilities of Strategic Decision Makers 105 Responsibilities of a Business Firm 105 Sustainability 108 Corporate Stakeholders 109 Sustainability Issue: Marks & Spencer Leads the Way 109 Strategy Highlight: Johnson & Johnson Credo 112 Ethical Decision Making 112 Some Reasons for Unethical Behavior 113 Global Issue: How Rule-Based and Relationship-Based Governance Systems Affect Ethical Behavior 114 Innovation Issue: Turning a Need into a Business to Solve the Need 116 Encouraging Ethical Behavior 117 End of Chapter Summary 119 Part Two: Scanning the Environment 124 Chapter 4: Environmental Scanning and Industry Analysis 125 Environmental Scanning 127 Identifying External Environmental Variables 127 Sustainability Issue: Green Supercars 129 Global Issue: SUVs Power on in China 137 Identifying External Strategic Factors 138 Industry Analysis: Analyzing the Task Environment 139 Porter's Approach to Industry Analysis 139 Industry Evolution 143 Innovation Issue: Taking Stock of an Obsession 144 Categorizing International Industries 144 International Risk Assessment 145 Strategic Groups 145 Strategic Types 147 Hypercompetition 147 Using Key Success Factors to Create an Industry Matrix 148 Competitive Intelligence 149 Sources of Competitive Intelligence 150 Strategy Highlight: Evaluating Competitive Intelligence 151 Monitoring Competitors for Strategic Planning 152 Forecasting 153 Danger of Assumptions 153 Useful Forecasting Techniques 153 The Strategic Audit: A Checklist for Environmental Scanning 155 Synthesis of External Factors—EFAS 155 End of Chapter Summary 157 Chapter 5: Internal Scanning: Organizational Analysis 161 A Resource-Based Approach to Organizational Analysis 163 Core and Distinctive Competencies 163 Using Resources to Gain Competitive Advantage 164 Determining the Sustainability of an Advantage 165 Business Models 167 Value-Chain Analysis 168 Industry Value-Chain Analysis 169 Corporate Value-Chain Analysis 170 Scanning Functional Resources and Capabilities 171 Basic Organizational Structures 172 Corporate Culture: The Company Way 173 Global Issue: Managing Corporate Culture for Global Competitive Advantage: ABB vs. Panasonic 175 Strategic Marketing Issues 175 Innovation Issue: DoCoMo Moves against the Grain 177 Strategic Financial Issues 178 Strategic Research and Development (R&D) Issues 179 Strategic Operations Issues 181 Strategic Human Resource (HRM) Issues 182 Sustainability Issue: The Olympic Games-Sochi 2014 and Rio 2016 185 Strategic Information Systems/Technology Issues 186 The Strategic Audit: A Checklist for Organizational Analysis 188 Synthesis of Internal Factors 188 End of Chapter Summary 190 Part Three: Strategy Formulation 196 Chapter 6: Strategy Formulation: Situation Analysis and Business Strategy 197 Situational Analysis: SWOT Approach 199 Generating a Strategic Factors Analysis Summary (SFAS) Matrix 199 Finding a Propitious Niche 200 Review of Mission and Objectives 203 Business Strategies 204 Porter's Competitive Strategies 204 Global Issue: The Nike Shoe Strategy vs. The New Balance Shoe Strategy 206 Innovation Issue: CHEGG and College Textbooks 209 Cooperative Strategies 210 Sustainability Issue: Strategic Sustainability-Espn 211 End of Chapter Summary 215 Chapter 7: Strategy Formulation: Corporate Strategy 219 Corporate Strategy 221 Directional Strategy 221 Growth Strategies 222 Strategy Highlight: Transaction Cost Economics Analyzes Vertical Growth Strategy 226 International Entry Options for Horizontal Growth 227 Global Issue: Global Expansion is not Always A Path to Expansion 227 Controversies in Directional Growth Strategies 231 Stability Strategies 232 Retrenchment Strategies 233 Portfolio Analysis 235 BCG Growth-Share Matrix 235 Sustainability Issue: General Motors and The Electric Car 237 Advantages and Limitations of Portfolio Analysis 238 Managing a Strategic Alliance Portfolio 239 Corporate Parenting 240 Innovation Issue: To Red Hat or Not? 240 Developing a Corporate Parenting Strategy 241 Horizontal Strategy and Multipoint Competition 242 End of Chapter Summary 242 Chapter 8: Strategy Formulation: Functional Strategy and Strategic Choice 249 Functional Strategy 251 Marketing Strategy 251 Financial Strategy 252 Research and Development (R&D) Strategy 254 Operations Strategy 255 Global Issue: Why doesn't Starbucks want to Expand to Italy? 256 Purchasing Strategy 257 Sustainability Issue: How Hot is Hot? 258 Logistics Strategy 259 Innovation Issue: When an Innovation Fails to Live Up to Expectations 259 Human Resource Management (HRM) Strategy 260 Information Technology Strategy 260 The Sourcing Decision: Location of Functions 261 Strategies to Avoid 264 Strategic Choice: Selecting the Best Strategy 264 Constructing Corporate Scenarios 265 The Process of Strategic Choice 270 Developing Policies 271 End of Chapter Summary 272 Part Four: Strategy Implementation and Control 278 Chapter 9: Strategy Implementation: Organizing for Action 279 Strategy Implementation 281 Who Implements Strategy? 282 What Must Be Done? 283 Developing Programs, Budgets, and Procedures 283 Sustainability Issue: A Better Bottle-Ecologic Brands 284 Achieving Synergy 287 How is Strategy to Be Implemented? Organizing for Action 288 Structure Follows Strategy 288 Stages of Corporate Development 289 Innovation Issues: The P&G Innovation Machine Stumbles 290 Organizational Life Cycle 293 Advanced Types of Organizational Structures 295 Reengineering and Strategy Implementation 298 Six Sigma 299 Designing Jobs to Implement Strategy 300 International Issues in Strategy Implementation 301 International Strategic Alliances 301 Stages of International Development 302 Global Issue: Outsourcing Comes Full Circle 303 Centralization Versus Decentralization 303 End of Chapter Summary 305 Chapter 10: Strategy Implementation: Staffing and Directing 309 Staffing 311 Staffing Follows Strategy 312 Selection and Management Development 314 Innovation Issue: How to Keep Apple "Cool" 314 Problems in Retrenchment 316 International Issues in Staffing 318 Leading 320 Sustainability Issue: Panera and The "Panera Cares Community Cafe" 320 Managing Corporate Culture 321 Action Planning 325 Management by Objectives 327 Total Quality Management 327 International Considerations in Leading 328 Global Issue: Cultural Differences Create Implementation Problems in Merger 330 End of Chapter Summary 331 Chapter 11: Evaluation and Control 337 Evaluation and Control in Strategic Management 339 Measuring Performance 339 Appropriate Measures 339 Types of Controls 340 Innovation Issue: Reuse of Electric Vehicle Batteries 341 Activity-Based Costing 342 Enterprise Risk Management 343 Primary Measures of Corporate Performance 343 Balanced Scorecard Approach: Using Key Performance Measures 346 Sustainability Issue: E-Receipts 346 Primary Measures of Divisional and Functional Performance 348 Responsibility Centers 349 Using Benchmarking to Evaluate Performance 350 International Measurement Issues 351 Global Issue: Counterfeit Goods and Pirated Software: A Global Problem 353 Strategic Information Systems 353 Enterprise Resource Planning (ERP) 354 Radio Frequency Identification (RFID) 354 Divisional and Functional is Support 355 Problems in Measuring Performance 355 Short-Term Orientation 355 Goal Displacement 357 Guidelines for Proper Control 358 Strategic Incentive Management 358 End of Chapter Summary 360 Part Five: Introduction to Case Analysis 366 Chapter 12: Suggestions for Case Analysis 367 The Case Method 369 Researching the Case Situation 369 Financial Analysis: A Place to Begin 370 Analyzing Financial Statements 370 Common-Size Statements 374 Z-Value and the Index of Sustainable Growth 374 Useful Economic Measures 375 Format for Case Analysis: The Strategic Audit 376 End of Chapter Summary 378 Appendix 12.A: Resources for Case Research 380 Appendix 12.B: Suggested Case Analysis Methodology Using the Strategic Audit 382 Appendix 12.C: Example of Student-Written Strategic Audit 385 Part Six: Cases in Strategic Management 394 Section A: Corporate Governance: Executive Leadership 400 Case 1: The Recalcitrant Director at Byte Products, Inc.: Corporate Legality versus Corporate Responsibility 400 Several Solutions 401 The Solution! 401 Taking the Plan to the Board 402 The Dilemma 404 Case 2: The Wallace Group 406 Background on The Wallace Group 406 History of the Wallace Group 409 Organization and Personnel 410 Current Trends 410 The Problem Confronting Frances Rampar 411 Section B: Business Ethics 416 Case 3: Everyone Does It 416 The Industry 417 Financing a Satellite Program 417 The Current Problem 417 Case 4: The Audit 420 Section C: Corporate Social Responsibility 422 Case 5: Early Warning or False Sense of Security? Concussion Risk and the Case of the Impact-Sensing Football Chinstrap 422 Battle Sports Science, LLC 423 Football and the Concussion Problem 423 Product Responsibility and the Impact Indicator 424 Section D: International Issues in Strategic Management 426 Case 6: A123 Systems: A New Lithium-Ion Battery System for Electric and Hybrid Cars 426 Company Background 426 Strategic Direction 427 A123's Competitors 428 Government Programs 428 Social and Demographic Trends 430 A123's Technology 431 Global Opportunities and Threats 432 A123's Finances 433 Areas of Concern for A123 434 Marketing 435 Research and Development 436 Operations 436 Challenges Facing A123 Systems 438 Case 7: Guajilote Cooperativo Forestal, Honduras 442 Operations 443 Management and Human Resources 443 Munguia: El Caudillo 444 Guajilote's Members 444 Financial Situation 445 Issues Facing the Cooperative 445 A Possibility 445 Concerns 446 Section E: General Issues in Strategic Management 448 Industry One: Internet Companies 448 Case 8: Google Inc. (2010): The Future of the Internet Search Engine 448 Background 448 Management and Board of Directors 450 Mission 450 Issues and Risk Factors Facing Google in 2010 452 Google's Future 458 Case 9: Amazon.com, Inc.: Retailing Giant to High-Tech Player? 462 Overview 462 Amazon Corporate Governance 463 Retail Operations/Amazon’s Superior Website 463 Diversified Product Offerings 464 Partnerships 465 Web Services 465 Amazon's Acquisition of Zappos, Quidsi, Living Social, and Lovefilm 466 Competitors 467 Frustration-Free Packaging 467 Financial Operations 468 Challenges for Amazon 470 Case 10: Blue Nile, Inc.: "Stuck in the Middle" of the Diamond Engagement Ring Market 474 Company Background 474 Strategic Direction 475 The Jewelry Industry 476 Blue Nile's Competitors 476 Barriers to Entry/Imitation 477 Social and Demographic Trends 478 Global Opportunities 479 Blue Nile's Finances 479 Marketing 482 Operations and Logistics 483 Human Resources and Ethics 485 Stuck in the Middle 485 Industry Two—Entertainment and Leisure 490 Case 11: Groupon Inc.: Daily Deal or Lasting Success? 490 History 490 Business Model 491 Mission and Strategy 492 Corporate Governance 493 Operations 497 Finance 498 Information Technology 504 Marketing 504 Competition 506 Legal Issues 507 Looking to the Future 507 Case 12: Netflix Inc.: The 2011 Rebranding/Price Increase Debacle 510 Online Streaming 511 Demographics 512 Netflix's Competitors 512 Rising Content Costs 513 Global Expansion 514 Financial Results 514 Netflix's Success 518 The 2011 Price Increase/Rebranding Debacle 518 Strategic Challenges Ahead for Netflix 519 Case 13: Carnival Corporation & plc 522 Overview 523 The Evolution of Cruising 524 Carnival History 524 Industry Projections 531 Carnival in the Future 540 Case 14: Zynga, Inc. (2011): Whose Turn is It? 542 Introduction 542 History 543 Mission, Strategy, and Business Model 544 Corporate Governance 545 The Zynga Way 546 Turning Games to Revenue 546 Partnerships 547 Acquisitions 548 Operations 549 Marketing 550 The Legal Landscape 552 Corporate Philanthropy 554 Finance 554 Future Outlook 559 Industry Three—Food and Beverage 562 Case 15: The Boston Beer Company: Brewers of Samuel Adams Boston Lager (Mini Case) 562 Company History 562 Corporate Mission and Vision 563 The Beer Industry 563 Current Challenges 565 Case 16: Panera Bread Company (2010): Still Rising Fortunes? 566 History 567 Concept and Strategy 569 The Fast Casual Segment 572 Competition 574 Corporate Governance 574 Menu 577 Site Selection and Company-Owned Bakery-Cafés 578 Franchises 579 Bakery Supply Chain 580 Marketing 581 Management Information Systems 582 Human Resources 582 Finance 583 Case 17: Whole Foods Market (2010): How to Grow in an Increasingly Competitive Market? (Mini Case) 590 Company Background 590 Whole Foods Market's Philosophy 591 Employee and Customer Relations 591 Competitive Environment 592 A Different Shopping Experience 592 The Green Movement 593 The Economic Recession of 2008 593 Organic Foods as a Commodity 594 Struggling to Grow in an Increasingly Competitive Market 594 Case 18: Burger King (Mini Case) 596 Business Model 597 Industry 598 Issues 598 New Owners: Time for a Strategic Change? 599 Case 19: Church & Dwight: Time to Rethink the Portfolio? 600 Background 600 Management 601 Changing Directions 604 Consumer Products 605 Specialty Products 607 International Operations 608 Streamlining 608 Industry Four: Apparel 610 Case 20: Under Armour 610 Industry Background 611 Competitors 612 Under Armour's History 613 Under Armour's Activities 613 The Pursuit of Three Percent 621 Case 21: TOMS Shoes (Mini Case) 622 History 622 Business Model 623 Marketing and Distribution 623 Operations and Management 624 Mission Accomplished: Next Steps? 625 Case 22: Best Buy Co. Inc. (2009): A Sustainable Customer-Centricity Model? 626 Company History 627 Industry Environment 628 Internal Environment 629 Competition 634 Core Competencies 635 Challenges Ahead 636 Industry Five: Specialty Retailing 640 Case 23: Rosetta Stone Inc.: Changing the Way People Learn Languages 640 Introduction 640 History 641 Products and Services 642 Content and Curriculum 644 Technology 644 Manufacturing and Fulfillment 645 Language-Learning Success 645 Marketing, Sales, and Distribution 645 Protecting Rosetta Stone 647 The Language-Learning Industry 648 Competitors 649 Financial Analysis 650 Case 24: Dollar General Corporation: 2011 Growth Expansion Plans (Mini Case) 656 Expansion Plan 656 Industry 656 Corporate Ownership 657 The Dollar General Store and Merchandise 658 Finance 658 Case 25: iRobot: Finding the Right Market Mix? 662 Company History 663 Research and Development at iRobot 665 New Markets 669 Section F 672 Industry Six: Transportation 672 Case 26: Tesla Motors, Inc.: The First U.S. Car Company IPO Since 1956 672 Company Background 672 Strategic Direction 673 Tesla's Competition 673 Barriers to Entry and Imitation 676 Proprietary Technology 676 External Opportunities and Threats 677 Oil Price 680 Finances 680 Marketing 683 Operations 683 Human Resources 684 Tesla's Future: Success or Bust? 685 Case 27: Delta Air Lines (2012): Navigating an Uncertain Environment 688 Delta Becomes the World’s Second-Largest Airline 689 The Airline Industry 700 Challenges Facing Delta 704 Case 28: TomTom: New Competition Everywhere! 708 TomTom's Products 710 Company History 711 TomTom's Customers 711 Mergers and Acquisitions 712 TomTom's Resources and Capabilities 712 Traditional Competition 713 New Competition Everywhere! 714 Potential Adverse Legislation and Restrictions 715 Internal Environment 716 Marketing 718 Operations 719 Human Resources 720 Issues of Concern for TomTom 720 Section G 722 Industry Seven: Manufacturing 722 Case 29: General Electric, GE Capital, and the Financial Crisis of 2008: The Best of the Worst in the Financial Sector? 722 Company Background 722 GE's Diversified Industrial Products Competitors 724 GE Capital 724 GE Capital's Strategic Direction 725 GE Capital's Competitors 726 Financials 726 Core Competencies 733 Challenges Facing GE 734 What to Do with GE Capital? 735 Case 30: AB Electrolux: Challenging Times in the Appliance Industry 738 Product Offerings and Brands 739 Strategic Direction 739 Industry Environment 739 Competition 740 Sustainability 740 The 2008–09 Global Recession 741 The Growing Middle Class in Asia 742 Technical Advancements 742 Global Opportunities and Threats 743 Financials 744 Operations 745 Marketing 746 Innovation 746 Challenges 747 Industry Eight: Information Technology 750 Case 31: Apple Inc.: Performance in a Zero-Sum World Economy 750 Management's View of the Company 752 History of Apple Inc. 754 Steven P. Jobs: Entrepreneur and Corporate Executive 758 Business Strategy 760 Business Organization 762 Product Support and Services 764 Markets and Distribution 764 Competition 765 Supply of Components 766 Research and Development 767 Patents, Trademarks, Copyrights, and Licenses 767 Seasonal Business 768 Warranty 768 Backlog 768 Environmental Laws 768 Employees 769 Legal Proceedings 769 Software Development Costs 769 Properties 769 John Tarpey's Decision 770 Case 32: Dell Inc.: Changing the Business Model (Mini Case) 772 Problems of Early Growth 773 Business Model 773 Product Line and Structure 774 The Industry Matures 775 Issues and Strategy 775 Future Prospects 776 Case 33: Logitech (Mini Case) 778 Company Background 778 Competitors 779 Trends 780 Global Presence 780 Finance 781 Operations 781 The Changing Landscape Ahead 782 Case 34: Daktronics (A): The U.S. Digital Signage Industry 2010 784 The U.S. Digital Signage Industry 785 Environment of the U.S. Digital Signage Industry in 2010 791 Competitive Environment 794 Summary Analysis of Industry Competitiveness in 2010 795 Looking to the Future 798 Glossary 804 Name Index 816 Subject Index 821 ALERT: Before you purchase, check with your instructor or review your course syllabus to ensure that you select the correct ISBN. Several versions of Pearson's MyLab & Mastering products exist for each title, including customized versions for individual schools, and registrations are not transferable. In addition, you may need a CourseID, provided by your instructor, to register for and use Pearson's MyLab & Mastering products. PackagesAccess codes for Pearson's MyLab & Mastering products may not be included when purchasing or renting from companies other than Pearson; check with the seller before completing your purchase. Used or rental booksIf you rent or purchase a used book with an access code, the access code may have been redeemed previously and you may have to purchase a new access code. Access codesAccess codes that are purchased from sellers other than Pearson carry a higher risk of being either the wrong ISBN or a previously redeemed code. Check with the seller prior to purchase." ""A class-tested approach to Strategy for Strategic Management and Business Policy courses" Wheelen and Hunger's class-tested approach to teaching Strategy is brought into sharper focus with a new emphasis on "globalization, innovation, and sustainability." This text equips students with the strategic concepts they will need to know as they face the issues that all organizations must build upon to push their businesses forward. For the first time in 30 years, the 14th edition has added two new authors to the text. Alan Hoffman, a major contributor to the 13th edition, is a former textbook author and world-renowned author of strategy business cases, and Chuck Bamford, who was a student of Tom Wheelen and David Hunger back in 1980 at the University of Virginia (McIntire School of Commerce), has authored four other textbooks. They join J. David Hunger and bring a fresh perspective to this extraordinarily well-researched and practically crafted text. MyManagementLab for "Strategic Management and Business Policy" is a total learning package. MyManagementLab is an online homework, tutorial, and assessment program that truly engages students in learning. It helps students better prepare for class, quizzes, and exams-resulting in better performance in the course-and provides educators a dynamic set of tools for gauging individual and class progress. This program will provide a better teaching and learning experience-for you and your students. Here's how: Improve Results with MyManagementLab: MyManagementLab delivers proven results in helping students succeed and provides engaging experiences that personalize learning.Focus on Globalization, Innovation, and Sustainability: These three strategic issues comprise the cornerstone that all organizations must build upon to push their businesses forwardHelp Students Apply Concepts to Real-Life Scenarios: A Strategic Management Model provides structure for content and case analysis. 0133254186 / 9780133254181 Strategic Management and Business Policy: Globalization, Innovation and Sustainability Plus MyManagementLab with Pearson eText -- Access Card PackagePackage consists of: 0133123685 / 9780133123685 NEW MyManagementLab with Pearson eText -- Standalone Access Card -- for Strategic Management and Business Policy0133126145 / 9780133126143 Strategic Management and Business Policy: Globalization, Innovation and Sustainablility MyManagementLab is not a self-paced technology and should only be purchased when required by an instructor.