Management Strategy: Achieving Sustained Competitive Advantage » (2nd Edition)

Management Strategy: Achieving Sustained Competitive Advantage, 2e, by Alfred Marcus, is a brief, focused paperback text, allowing ample time for the instructor to incorporate other materials commonly used in this course, such as cases, readings, and/or simulations. The text focuses on how making winning moves depends on finding profitable patterns that repeatedly meet customer demands for solutions. Whereas many strategy books have lost sight of the purpose of strategy and fail to show how decisions actually affect business performance and, ultimately, outcomes, Management Strategy focuses on the types of analyses and strategic moves required, given the industry, environment, and a company's internal resources. In eight chapters, this textbook builds upon the analysis process and demonstrates how strategy impacts an organization's position in comparison to its competitors, both in terms of the cost and quality of its products and the scope of businesses in which it is involved (vertical and horizontal integration), as well as its global versus domestic reach. The outcomes that come from analyzing an organization also determine the extent to which the organization will strive to be an innovator as opposed to being a follower.

Preface ix

Part 1 Managing Strategically 1

Chapter 1 Strategy Basics 2

Introduction 2

Sustained Competitive Advantage 4

Winning Moves 7

Analysis 7

Moves 7

Understanding Management Strategy 9

Chess 9

War 13

Sports 17

Keeping Score: Performance Measurement 19

The Balanced Scorecard 19

Measures of Overall Dominance 20

Industry Boundaries 21

Summary 22

Endnotes 23

Chapter 2 External Analysis 25

Introduction 25

Industry Analysis 26

Industrial Organization Economics 27

The Five Forces 27

Industry Differences: Examples of Five-Force Analysis 28

The Strategist's Role in Industry Analysis 32

Long-Term Industry Attractiveness 34

Macroenvironmental Analysis 35

Components of the External Environment 35

Systems and Scenarios 45

Uncertainty 46

An Enacted Environment: The Industry and Its Boundaries 47

Cooperation or Competition? 48

Stakeholder Analysis 49

Stakeholder Theory 49

Agency Theory 49

Summary 50

Endnotes 51

Chapter 3 Internal Analysis 53

Introduction 53

Management Theory 55

The Human Relations Approach 56

Contingency Theory 56

The Seven-S Framework 58

Value Chain Analysis 60

Value Chain Linkages 61

Benefits of Value Chain Linkages: An Example 62

The Resource-Based View 62

RBV versus IO Economics 63

Resources, Capabilities, and Competencies 64

From Resources to Capabilities 66

Examples of Company Capabilities 69

From Capabilities to Competencies 71

The Process of Acquisition 74

Summary 74

Endnotes 75

Part 2 Making Moves 77

Chapter 4 Timing and Positioning 78

Introduction 78

Timing 79

The Value of Rapid Adjustment 81

Obstacles to Quick Action 82

Game Theory 83

Learning from Game Theory 87

Positioning 89

Are Low Cost and Differentiation Incompatible? 92

The New Alternative: Best Value 93

Repositioning 95

Strategic Groups: Company Segmentation 97

Segmentation by Product or Service 99

Summary 100

Endnotes 101

Chapter 5 Mergers, Acquisitions, and Divestitures 103

Introduction 103

Different Forms a Firm Can Take 104

Mergers, Acquisitions, and Divestitures: The Record Thus Far 105

A Poor Record of Past Performance 106

A Shifting Landscape 107

Motivations Behind M&As 107

The Role of Deregulation 108

Examples of Good Deal Making 111

M&As and the Global Economic Meltdown 112

Pharmaceuticals 112

Why Do M&As Fail? 114

Why Do Mergers Succeed? 116

Mergers of Equals 116

Effective Management 117

Breaking Down the Corporate Hierarchy 120

Is Vertical Integration the Answer? 121

The Entertainment Industry 122

Summary 124

Endnotes 125

Chapter 6 Globalization 127

Introduction 127

Reasons for Globalization 128

Product Maturity: Soft Drinks 129

Industry Evolution 130

Global Analysis 131

Where to Invest 132

An Example: Soft Drinks 132

Does Globalization Pay? 134

Which Regions in the World? 135

The Comparative Development of Nations 136

Labor, Capital, and Technology 136

Open Economies 138

Parallels Between Global and Domestic Moves 139

Business Strategy 141

Corporate Strategy 143

Globalization's Challenges 145

Economic Imbalances 145

Insecurity 145

Youth Violence 147

Government Incapacity 148

Summary 149

Endnotes 149

Chapter 7 Innovation and Entrepreneurship 151

Introduction 151

Challenges of Succeeding in New Business Ventures 152

Success Stages 152

Commitment 153

Overcoming Barriers 153

Technological Opportunities 159

Trends 159

Experts 160

Alternative Scenarios 160

Leading-Edge Industries 160

Postindustrialism 161

Biotechnology 162

The Environment as a Business Opportunity 164

Environmental Innovation 165

Low-Emissions vehicles 167

Obstacles to Exploiting New Technologies 168

Risk 169

Uncertainty 169

Technology Push and Market Pull 173

Difficulties of Successful Innovation 173

Understanding the Innovation Process 174

Summary 176

Endnotes 176

Part 3 Repositioning 179

Chapter 8 Continuous Reinvention 180

Introduction 180

Judo Strategy 182

Rapid Movement and Agility: An Example 182

Defense and Exploitation 183

Sweet Spots and SCA: Company Analysis 183

Reinvention 185

The Dilemma of Change 186

A Strategic Approach to the Dilemma 187

Innovations in Strategy 189

An Example: Retail Food Industry 189

Competing via Strategic Innovation 190

Summary 195

Endnotes 196

Chapter 9 Implementation 197

Introduction 197

The Probability and Anatomy of Failure 198

Home Depot: Performance-Enhancing Moves versus an Engrained Culture 198

Circuit City: "Me Too" Moves versus Faster, More Savvy Foes 199

United Airlines: A Low-Cost Segmentation Move versus Lack of Internal Commitment 199

Swissair: Empire-Building Moves versus Resource Limitations and EU Law 200

The Root Causes of Failure 200

A Comprehensive Implementation Framework 201

Assess Change Readiness 202

Install Integrative Leadership 203

Create a Consistent Message 204

Appoint Cross-Functional Program Teams 204

Solicit Change Program Proposals 205

Select and Prioritize Proposed Change Programs 205

Assign Process Owners and Align Resources 206

Secure Funding, Formalize Operational Objectives, and Design Incentives 208

Advance and Continually Monitor Initiatives 209

Fortify Gains and Refine the Implementation Process 211

Summary 211

Endnotes 212

Glossary 214

Index 221