Michael_A._Hitt,_R._Duane_Ireland,_Robert_E._Hosk

Part 1: Strategic Management Inputs About the Authors, xx

Strategic Management and Strategic Competitiveness,

and Competitor Analysis, 2. The External Environment: Opportunities, Threats, Industry Competition,

and Competitive Advantages, 3. The Internal Organization: Resources, Capabilities, Core Competencies,

Part 2: Strategic Actions: Strategy Formulation

Business-Level Strategy,

Competitive Rivalry and Competitive Dynamics,

Corporate-Level Strategy,

Merger and Acquisition Strategies,

International Strategy,

Cooperative Strategy,

Part 3: Strategic Actions: Strategy Implementation

Corporate Governance,

Organizational Structure and Controls,

Strategic Leadership,

Strategic Entrepreneurship,

Part 4: Case Studies C-

Name Index, I-

Company Index, I-

Subject Index, I-

Part 1: Strategic Management Inputs About the Authors xx

1: Strategic Management and Strategic Competitiveness

Opening Case: Alibaba: An Online Colossus in China Goes Global

1-1 The Competitive Landscape

1-1a The Global Economy

1-1b Technology and Technological Changes

Strategic Focus: Starbucks Is “Juicing” Its Earnings per Store through Technological Innovations

1-2 The I/O Model of Above-Average Returns

1-3 The Resource-Based Model of Above-Average Returns

1-4 Vision and Mission

1-4a Vision

1-4b Mission

1-5 Stakeholders

Strategic Focus: The Failure of BlackBerry to Develop an Ecosystem of Stakeholders

1-5a Classifications of Stakeholders

1-6 Strategic Leaders

1-6a The Work of Effective Strategic Leaders

1-7 The Strategic Management Process

Summary 28 • Key Terms 28 • Review Questions 29 • Mini-Case 29 • Notes

Competition, and Competitor Analysis 2: The External Environment: Opportunities, Threats, Industry

Opening Case: Are There Cracks in the Golden Arches?

2-1 The General, Industry, and Competitor Environments

2-2 External Environmental Analysis

2-2a Scanning

2-2b Monitoring

2-2c Forecasting

2-2d Assessing

2-3 Segments of the General Environment

2-3a The Demographic Segment

2-3b The Economic Segment

2-3c The Political/Legal Segment

2-3d The Sociocultural Segment

2-3e The Technological Segment

2-3f The Global Segment

2-3g The Sustainable Physical Environment Segment vi Contents

Strategic Focus: Target Lost Its Sway Because Tar-zhey No Longer Drew the Customers

2-4 Industry Environment Analysis

2-4a Threat of New Entrants

2-4b Bargaining Power of Suppliers

2-4c Bargaining Power of Buyers

2-4d Threat of Substitute Products

2-4e Intensity of Rivalry among Competitors

2-5 Interpreting Industry Analyses

2-6 Strategic Groups

Jet.com Strategic Focus: Watch Out All Retailers, Here Comes Amazon; Watch Out Amazon, Here Comes

2-7 Competitor Analysis

2-8 Ethical Considerations

Competencies, and Competitive Advantages 3: The Internal Organization: Resources, Capabilities, Core

Core Competencies: A Brave New World Opening Case: Data Analytics, Large Pharmaceutical Companies, and

3-1 Analyzing the Internal Organization

3-1a The Context of Internal Analysis

3-1b Creating Value

3-1c The Challenge of Analyzing the Internal Organization

3-2 Resources, Capabilities, and Core Competencies

3-2a Resources

Strategic Focus: Strengthening the Superdry Brand as a Foundation to Strategic Success

3-2b Capabilities

3-2c Core Competencies

3-3 Building Core Competencies

3-3a The Four Criteria of Sustainable Competitive Advantage

3-3b Value Chain Analysis

3-4 Outsourcing

3-5 Competencies, Strengths, Weaknesses, and Strategic Decisions

Strategic Focus: “We’re Outsourcing that Activity but Not That One? I’m Surprised!”

Part 2: Strategic Actions: Strategy Formulation

4: Business-Level Strategy

Opening Case: Hain Celestial Group: A Firm Focused on “Organic” Differentiation

4-1 Customers: Their Relationship with Business-Level Strategies

4-1a Effectively Managing Relationships with Customers

4-1b Reach, Richness, and Affiliation

4-1c Who: Determining the Customers to Serve

4-1d What: Determining Which Customer Needs to Satisfy
- 4-1e How: Determining Core Competencies Necessary to Satisfy Customer Needs Contents vii

4-2 The Purpose of a Business-Level Strategy

4-3 Types of Business-Level Strategies

4-3a Cost Leadership Strategy

4-3b Differentiation Strategy

Strategic Focus: Apple vs. Samsung: Apple Differentiates and Samsung Imperfectly Imitates

4-3c Focus Strategies

4-3d Integrated Cost Leadership/Differentiation Strategy

Strategic Focus: RadioShack’s Failed Focus Strategy: Strategic Flip-Flopping

5: Competitive Rivalry and Competitive Dynamics

Markets Opening Case: Does Google Have Competition? Dynamics of the High Technology

5-1 A Model of Competitive Rivalry

5-2 Competitor Analysis

5-2a Market Commonality

5-2b Resource Similarity

Strategic Focus: Does Kellogg Have the Tiger by the Tail or Is It the Reverse?

5-3 Drivers of Competitive Behavior

5-4 Competitive Rivalry

5-4a Strategic and Tactical Actions

5-5 Likelihood of Attack

5-5a First-Mover Benefits

5-5b Organizational Size

5-5c Quality

5-6 Likelihood of Response

5-6a Type of Competitive Action

5-6b Actor’s Reputation

5-6c Market Dependence

5-7 Competitive Dynamics

5-7a Slow-Cycle Markets

5-7b Fast-Cycle Markets

5-7c Standard-Cycle Markets

Countries Strategic Focus: The Ripple Effect of Supermarket Wars: Aldi Is Changing the Markets in Many

6: Corporate-Level Strategy

Opening Case: Disney Adds Value Using a Related Diversification Strategy

6-1 Levels of Diversification

6-1a Low Levels of Diversification

6-1b Moderate and High Levels of Diversification

6-2 Reasons for Diversification

Linked Diversification 6-3 Value-Creating Diversification: Related Constrained and Related

6-3a Operational Relatedness: Sharing Activities viii Contents

6-3b Corporate Relatedness: Transferring of Core Competencies

6-3c Market Power

6-3d Simultaneous Operational Relatedness and Corporate Relatedness

6-4 Unrelated Diversification

6-4a Efficient Internal Capital Market Allocation

and Restructuring Strategies Strategic Focus: GE and United Technology Are Firms that Have Pursued Internal Capital Allocation

6-4b Restructuring of Assets

6-5 Value-Neutral Diversification: Incentives and Resources

6-5a Incentives to Diversify

Strategic Focus: Coca-Cola’s Diversification to Deal with Its Reduced Growth in Soft Drinks

6-5b Resources and Diversification

6-6 Value-Reducing Diversification: Managerial Motives to Diversify

7: Merger and Acquisition Strategies

Enhance Their Performance Opening Case: Mergers and Acquisitions: Prominent Strategies for Firms Seeking to

7-1 The Popularity of Merger and Acquisition Strategies

7-1a Mergers, Acquisitions, and Takeovers: What Are the Differences?

7-2 Reasons for Acquisitions

Strategic Focus: A Merger of Equals: Making It Happen Isn’t Easy!

7-2a Increased Market Power

7-2b Overcoming Entry Barriers

Strategic Focus: Different Strategic Rationales Driving Cross-Border Acquisitions

7-2c Cost of New Product Development and Increased Speed to Market

7-2d Lower Risk Compared to Developing New Products

7-2e Increased Diversification

7-2f Reshaping the Firm’s Competitive Scope

7-2g Learning and Developing New Capabilities

7-3 Problems in Achieving Acquisition Success

7-3a Integration Difficulties

7-3b Inadequate Evaluation of Target

7-3c Large or Extraordinary Debt

7-3d Inability to Achieve Synergy

7-3e Too Much Diversification

7-3f Managers Overly Focused on Acquisitions

7-3g Too Large

7-4 Effective Acquisitions

7-5 Restructuring

7-5a Downsizing

7-5b Downscoping

7-5c Leveraged Buyouts

7-5d Restructuring Outcomes

8: International Strategy Contents ix

Growth Also Fires Up the Competition Opening Case: Netflix Ignites Growth Through International Expansion, But Such

8-1 Identifying International Opportunities

8-1a Incentives to Use International Strategy

8-1b Three Basic Benefits of International Strategy

8-2 International Strategies

8-2a International Business-Level Strategy

8-2b International Corporate-Level Strategy

Strategic Focus: Furniture Giant IKEA’s Global Strategy

8-3 Environmental Trends

8-3a Liability of Foreignness

8-3b Regionalization

8-4 Choice of International Entry Mode

8-4a Exporting

8-4b Licensing

8-4c Strategic Alliances

8-4d Acquisitions

8-4e New Wholly Owned Subsidiary

8-4f Dynamics of Mode of Entry

8-5 Risks in an International Environment

8-5a Political Risks

8-5b Economic Risks

Strategic Focus: The Global Soccer Industry and the Effect of the FIFA Scandal

8-6 Strategic Competitiveness Outcomes

8-6a International Diversification and Returns

8-6b Enhanced Innovation

8-7 The Challenge of International Strategies

8-7a Complexity of Managing International Strategies

8-7b Limits to International Expansion

9: Cooperative Strategy

Produce a Smartwatch Opening Case: Google, Intel, and Tag Heuer: Collaborating to

9-1 Strategic Alliances as a Primary Type of Cooperative Strategy

9-1a Types of Major Strategic Alliances

9-1b Reasons Firms Develop Strategic Alliances

9-2 Business-Level Cooperative Strategy

9-2a Complementary Strategic Alliances

9-2b Competition Response Strategy

9-2c Uncertainty-Reducing Strategy

9-2d Competition-Reducing Strategy

Strategic Focus: Strategic Alliances as the Foundation for Tesla Motors’ Operations

9-2e Assessing Business-Level Cooperative Strategies

9-3 Corporate-Level Cooperative Strategy

9-3a Diversifying Strategic Alliance

9-3b Synergistic Strategic Alliance x Contents

9-3c Franchising

9-3d Assessing Corporate-Level Cooperative Strategies

9-4 International Cooperative Strategy

9-5 Network Cooperative Strategy

9-5a Alliance Network Types

9-6 Competitive Risks with Cooperative Strategies

Strategic Focus: Failing to Obtain Desired Levels of Success with Cooperative Strategies

9-7 Managing Cooperative Strategies

Part 3: Strategic Actions: Strategy Implementation

10: Corporate Governance

Shareholders of Today Opening Case: The Corporate Raiders of the 1980s Have Become the Activist

10-1 Separation of Ownership and Managerial Control

10-1a Agency Relationships

10-1b Product Diversification as an Example of an Agency Problem

10-1c Agency Costs and Governance Mechanisms

10-2 Ownership Concentration

10-2a The Increasing Influence of Institutional Owners

10-3 Board of Directors

10-3a Enhancing the Effectiveness of the Board of Directors

10-3b Executive Compensation

10-3c The Effectiveness of Executive Compensation

Strategic Focus: Do CEOs Deserve the Large Compensation Packages They Receive?

10-4 Market for Corporate Control

10-4a Managerial Defense Tactics

10-5 International Corporate Governance

10-5a Corporate Governance in Germany and Japan

Strategic Focus: “Engagement” versus “Activist” Shareholders in Japan, Germany, and China

10-5b Corporate Governance in China

10-6 Governance Mechanisms and Ethical Behavior

11: Organizational Structure and Controls

for Concern? Opening Case: Luxottica’s Dual CEO Structure: A Key to Long-Term Success or a Cause

11-1 Organizational Structure and Controls

11-1a Organizational Structure

Strategic Focus: Changing McDonald’s Organizational Structure: A Path to Improved Performance?

11-1b Organizational Controls

11-2 Relationships between Strategy and Structure

11-3 Evolutionary Patterns of Strategy and Organizational Structure

11-3a Simple Structure

11-3b Functional Structure Contents xi

11-3c Multidivisional Structure

11-3d Matches between Business-Level Strategies and the Functional Structure

11-3e Matches between Corporate-Level Strategies and the Multidivisional Structure

and Focused Allocations of Resources Strategic Focus: Sony Corporation’s New Organizational Structure: Greater Financial Accountability

11-3f Matches between International Strategies and Worldwide Structure

11-3g Matches between Cooperative Strategies and Network Structures

11-4 Implementing Business-Level Cooperative Strategies

11-5 Implementing Corporate-Level Cooperative Strategies

11-6 Implementing International Cooperative Strategies

12: Strategic Leadership

Jobs Opening Case: Can You Follow an Icon and Succeed? Apple and Tim Cook After Steve

12-1 Strategic Leadership and Style

12-2 The Role of Top-Level Managers

12-2a Top Management Teams

12-3 Managerial Succession

Strategic Focus: Trial by Fire: CEO Succession at General Motors

12-4 Key Strategic Leadership Actions

12-4a Determining Strategic Direction

12-4b Effectively Managing the Firm’s Resource Portfolio

Strategic Focus: All the Ways You Can Fail!

12-4c Sustaining an Effective Organizational Culture

12-4d Emphasizing Ethical Practices

12-4e Establishing Balanced Organizational Controls

13: Strategic Entrepreneurship

Opening Case: Entrepreneurial Fervor and Innovation Drive Disney’s Success

13-1 Entrepreneurship and Entrepreneurial Opportunities

13-2 Innovation

13-3 Entrepreneurs

13-4 International Entrepreneurship

13-5 Internal Innovation

13-5a Incremental and Novel Innovation

Strategic Focus: Innovation Can Be Quirky

13-5b Autonomous Strategic Behavior

13-5c Induced Strategic Behavior

13-6 Implementing Internal Innovations

13-6a Cross-Functional Product Development Teams

13-6b Facilitating Integration and Innovation

13-6c Creating Value from Internal Innovation

13-7 Innovation through Cooperative Strategies

13-8 Innovation through Acquisitions xii Contents

Lack of Capability? Strategic Focus: What Explains the Lack of Innovation at American Express? Is It Hubris, Inertia, or

13-9 Creating Value through Strategic Entrepreneurship

Part 4: Case Studies C-

Preparing an Effective Case Analysis C-

CASE 1: Kindle Fire: Amazon’s Heated Battle for the Tablet Market C-

CASE 2: American Express: Bank 2.0 C-

CASE 3: BP In Russia: Bad Partners or Bad Partnerships? (A) C-

CASE 4: Carlsberg in Emerging Markets C-

CASE 5: Fisk Alloy Wire, Inc. and Percon C-

CASE 6: Business Model and Competitive Strategy of IKEA in India C-

CASE 7: Invitrogen (A) C-

Marketplace Leadership C- CASE 8: Keurig: From David to Goliath: The Challenge of Gaining and Maintaining

CASE 9: KIPP Houston Public Schools C-

CASE 10: Luck Companies: Igniting Human Potential C-

Not “A Good Thing” C- CASE 11: Corporate Governance at Martha Stewart Living Omnimedia:

CASE 12: The Movie Exhibition Industry: 2015 C-

CASE 13: Polaris and Victory: Entering and Growing the Motorcycle Business C-

CASE 14: Safaricom: Innovative Telecom Solutions to Empower Kenyans C-

CASE 15: Siemens: Management Innovation at the Corporate Level C-

CASE 16: Southwest Airlines C-

CASE 17: Starbucks Corporation: The New S-Curves C-

CASE 18: Super Selectos: Winning the War Against Multinational Retail Chains C-

CASE 19: Tim Hortons Inc. C-

CASE 20: W. L. Gore—Culture of Innovation C-

Name Index I-

Company Index I-

Subject Index I-

Michael_A._Hitt,_R._Duane_Ireland,_Robert_E._Hosk

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