Fred R. David • Forest R. David

David • D

avid

GlobAl edITIon

Strategic ManagementConcepts

FIFTeenTh edITIon

Fred R. David • Forest R. David

Strategic ManageMent concepts

A COMPETITIVE ADVANTAGE APPROACH

Strategic Management: Concepts, GlobalEdition - PDF - PDF - PDF

Table of Contents

Cover

Title page

Copyright

Brief Contents

Contents

Preface

Acknowledgments

About the Authors

Chapter 1 Strategic Management EssentialsSingapore Airlines: Excellent Strategic Management Showcased

What Is Strategic Management?Defining Strategic Management

Stages of Strategic Management

Integrating Intuition and Analysis

Adapting to Change

Key Terms in Strategic ManagementCompetitive Advantage

Strategists

Vision and Mission Statements

External Opportunities and Threats

Internal Strengths and Weaknesses

Long-Term Objectives

Strategies

Annual Objectives

Policies

The Strategic-Management Model

Benefits of Strategic ManagementFinancial Benefits

Nonfinancial Benefits

Why Some Firms Do No Strategic Planning

Pitfalls in Strategic Planning

Guidelines for Effective Strategic Management

Comparing Business and Military Strategy

Special Note to StudentsThe Cohesion Case adida s Group2013

Table of Contents

Assurance of Learning Exercises

Assurance of Learning Exercise 1A: Assess Singapore Airlines Most Recent

Quarterly Performance Data

Assurance of Learning Exercise 1B: Gathering Strategy Information on adidas AG

Assurance of Learning Exercise 1C: Getting Familiar with the Free Excel Student

Template

Assurance of Learning Exercise 1D: Evaluating An Oral Student Presentation

Assurance of Learning Exercise 1E: Strategic Planning at Nestlé

Assurance of Learning Exercise 1F: Interviewing Local Strategists

Chapter 2 Outside-USA Strategic Planning Honda: Excellent Strategic Management Showcased

Multinational Organizations

Advantages and Disadvantages of International Operations

The Global ChallengeGlobalization

Corporate Tax Rates Globally

United States versus Foreign Business Cultures

Communication Differences Across Countries

Business Culture Across CountriesMexicoBusiness Culture

JapanBusiness Culture

BrazilBusiness Culture

GermanyBusiness Culture

EgyptBusiness Culture

ChinaBusiness Culture

IndiaBusiness Culture

NigeriaBusiness Culture

Business Climate Across Countries/ContinentsUnion Membership Across Europe

African Countries

China

Philippines

Taiwan

India

Germany

Mexico

Special Note to StudentsAssurance of Learning Exercises

Assurance of Learning Exercise 2A: The adidas Group wants to enter Africa. Help

them.

Assurance of Learning Exercise 2B: Assessing Differences in Culture Across

Table of Contents

CountriesAssurance of Learning Exercise 2C: Honda Motor Company wants to enter the

Vietnamesemarket. Help them.

Assurance of Learning Exercise 2D: Does My University Recruit in Foreign

Countries?

Chapter 3 Ethics/Social Responsibility/SustainabilityBusiness Ethics

Nestlé Excellent Strategic Management ShowcasedCode of Business Ethics

An Ethics Culture

Whistle-Blowing

Bribes

Workplace Romance

Social ResponsibilitySocial Policy

Social Policies on Retirement

Environmental SustainabilityWhat Is a Sustainability Report?

Lack of Standards Changing

Managing Environmental Affairs in the Firm

ISO 14000/14001 Certification

Wildlife

Solar Power


Assurance of Learning Exercise 3A: Sustainability and Nestlé

Assurance of Learning Exercise 3B: How Does My Municipality Compare To Others on

Being Pollution-Safe?

Assurance of Learning Exercise 3C: Compare adidas AG versus Nike on Social

Responsibility

Assurance of Learning Exercise 3D: How Do You Rate adidas AG s Sustainability

Efforts?

Assurance of Learning Exercise 3E: How Do You Rate Nestlés Sustainability

Efforts?

Assurance of Learning Exercise 3F: The Ethics of Spying on Competitors

Chapter 4 Types of Strategies Long-Term Objectives

The Nature of Long-Term Objectives

Petronas: Excellent Strategic Management Showcased

Financial versus Strategic Objectives

Not Managing by Objectives

Types of Strategies

Table of Contents

Levels of Strategies

Integration StrategiesForward Integration

Backward Integration

Horizontal Integration

Intensive StrategiesMarket Penetration

Market Development

Product Development

Diversification StrategiesRelated Diversification

Unrelated Diversification

Defensive StrategiesRetrenchment

Divestiture

Liquidation

Michael Porters Five Generic StrategiesCost Leadership Strategies (Type 1 and Type 2)

Differentiation Strategies (Type 3)

Focus Strategies (Type 4 and Type 5)

Strategies for Competing in Turbulent, High-Velocity Markets

Means for Achieving StrategiesCooperation Among Competitors

Joint Venture and Partnering

Merger/Acquisition

Private-Equity Acquisitions

First Mover Advantages

Outsourcing and Reshoring

Strategic Management in Nonprofit and GovernmentalOrganizationsEducational Institutions

Medical Organizations

Governmental Agencies and Departments

Strategic Management in Small Firms


Assurance of Learning Exercise 4A: Market Development: Petronas

Assurance of Learning Exercise 4B: Alternative Strategies for Petronas

Assurance of Learning Exercise 4C: Private-Equity Acquisitions

Assurance of Learning Exercise 4D: The strategies of adidas AG: 2013-2015

Assurance of Learning Exercise 4E: Lessons in Doing Business Globally

Assurance of Learning Exercise 4F: Petronas 2013-2015

Table of Contents

Assurance of Learning Exercise 4G: What Strategies Are Most Risky?

Assurance of Learning Exercise 4H: Exploring Bankruptcy

Assurance of Learning Exercise 4I: Examining Strategy Articles

Assurance of Learning Exercise 4J: Classifying Some Strategies

Chapter 5 Vision and Mission AnalysisSamsung: Excellent Strategic Management Showcased

What Do We Want to Become?

What Is Our Business?Vision versus Mission

Vision Statement Analysis

The Process of Developing Vision and Mission Statements

Importance (Benefits) of Vision and Mission StatementsA Resolution of Divergent Views

Characteristics of a Mission StatementA Declaration of Attitude

A Customer Orientation

Mission Statement Components

Writing and Evaluating Mission Statements


Assurance of Learning Exercise 5A: Examining Potential Changes Needed in a

Firms Vision/Mission

Assurance of Learning Exercise 5B: Studying an Alternative View of Mission

Statement Content

Assurance of Learning Exercise 5C: Evaluating Mission Statements

Assurance of Learning Exercise 5D: Evaluating the Mission Statement of Under

Armoura Competitor of adidas AG

Assurance of Learning Exercise 5E: Selecting the Best Vision and Mission

Statements in a Given Industry

Assurance of Learning Exercise 5F: Writing an Excellent Vision and Mission

Statement for Novartis AG

Chapter 6 The Internal AuditThe Process of Performing an Internal Audit

Volkswagen: Excellent Strategic Management ShowcasedKey Internal Forces

The Process of Performing an Internal Audit

The Resource-Based View

Integrating Strategy and Culture

ManagementPlanning

Organizing

Table of Contents

Motivating

Staffing

Controlling

Management Audit Checklist of Questions

MarketingCustomer Analysis

Selling Products and Services

Product and Service Planning

Pricing

Distribution

Marketing Research

Cost/Benefit Analysis

Marketing Audit Checklist of Questions

Finance and AccountingFinance and Accounting Functions

Basic Types of Financial Ratios

Breakeven AnalysisFinance and Accounting Audit Checklist

Production and OperationsProduction and Operations Audit Checklist

Research and DevelopmentInternal and External Research and Development

Research and Development Audit

Management Information SystemsManagement Information Systems Audit

Value Chain AnalysisBenchmarking

The Internal Factor Evaluation Matrix


Assurance of Learning Exercise 6A: Develop a Corporate IFE Matrix for Volkswagen

Group

Assurance of Learning Exercise 6B: Should VW Deploy More Resources or Less

Outside of the USA?

Assurance of Learning Exercise 6C: Apply Breakeven Analysis

Assurance of Learning Exercise 6D: Performing a Financial Ratio Analysis for

adidas AG

Assurance of Learning Exercise 6E: Constructing an IFE Matrix for adidas AG

Assurance of Learning Exercise 6F: Analyzing Your College or Universitys

Internal Strategic Situation

Chapter 7 The External Audit

Table of Contents

The Nature of an External Audit

Michelin: Excellent Strategic Management Showcased Key External Forces

The Process of Performing an External Audit

The Industrial Organization (I/O) View

Economic Forces

Social, Cultural, Demographic, and Natural Environment Forces

Political, Governmental, and Legal ForcesLabor Unions

Technological Forces

Competitive ForcesCompetitive Intelligence Programs

Market Commonality and Resource Similarity

Competitive Analysis: Porters Five-Forces ModelRivalry Among Competing Firms

Potential Entry of New Competitors

Potential Development of Substitute Products

Bargaining Power of Suppliers

Bargaining Power of Consumers

Sources of External Information

Forecasting Tools and TechniquesMaking Assumptions

Industry Analysis: The External Factor Evaluation Matrix

The Competitive Profile Matrix

Special Note To StudentsAssurance of Learning Exercises

Assurance of Learning Exercise 7A: Michelin and Africa: An External Assessment

Assurance of Learning Exercise 7B: Preparing a CPM for Michelin Based on

Countries Rather than Companies

Assurance of Learning Exercise 7C: Develop Divisional Michelin EFE Matrices

Assurance of Learning Exercise 7D: Developing an EFE Matrix for adidas AG

Assurance of Learning Exercise 7E: The External Assessment

Assurance of Learning Exercise 7F: Developing a CPM for Michelin

Assurance of Learning Exercise 7G: Developing a CPM for adidas AG

Assurance of Learning Exercise 7H: Analyzing Your College or Universitys

External Strategic Situation

Chapter 8 Strategy Generation and SelectionThe Nature of Strategy Analysis and Choice

The Process of Generating and Selecting Strategies

Unilever Excellent Strategic Management Showcased

Table of Contents

A Comprehensive Strategy-Formulation Analytical Framework

The Input Stage

The Matching Stage

The SWOT Matrix

The Strategic Position and Action Evaluation (SPACE) Matrix

The Boston Consulting Group (BCG) Matrix

The Internal-External (IE) Matrix

The Grand Strategy Matrix

The Decision Stage

The Quantitative Strategic Planning Matrix (QSPM)Positive Features and Limitations of the QSPM

Cultural Aspects of Strategy Choice

The Politics of Strategy Choice

Governance Issues


Assurance of Learning Exercise 8A: Should Unilever Penetrate Southeast Asia

Further?

Assurance of Learning Exercise 8B: Perform a SWOT Analysis for Unilevers

Global Operations

Assurance of Learning Exercise 8C: Preparing a BCG Matrix for Unilever

Assurance of Learning Exercise 8D: Developing a SWOT Matrix for adidas AG

Assurance of Learning Exercise 8E: Developing a SPACE Matrix for adidas AG

Assurance of Learning Exercise 8F: Developing a BCG Matrix for adidas AG

Assurance of Learning Exercise 8G: Developing a QSPM for adidas AG

Assurance of Learning Exercise 8H: Developing a SWOT Matrix for Unilever

Assurance of Learning Exercise 8I: Developing a SPACE Matrix for Unilever

Assurance of Learning Exercise 8J: Developing a BCG Matrix for your College or

University

Assurance of Learning Exercise 8K: Developing a QSPM for a Company that You Are

Familiar With

Assurance of Learning Exercise 8L: Formulating Individual Strategies

Assurance of Learning Exercise 8M: The Mach Test

Chapter 9 Strategy Implementation The Nature of Strategy Implementation

Royal Dutch Shell Excellent Strategic Management Showcased

Current Marketing IssuesNew Principles of Marketing

Market SegmentationRetention-Based Segmentation

Table of Contents

Does the Internet Make Market Segmentation Easier?

Product Positioning/Perceptual Mapping

Finance and Accounting IssuesAcquiring Capital to Implement Strategies

Projected Financial Statements

Projected Financial Statement Analysis for Whole Foods Market

Financial Budgets

Company Valuation

Deciding Whether to Go Public

Research and Development (R&D) Issues

Management Information Systems (MIS) IssuesBusiness Analytics


Assurance of Learning Exercise 9A: Preparing an EPS/EBIT Analysis for Royal

Dutch Shell plc

Assurance of Learning Exercise 9B: Developing a Product-Positioning Map for

adidas AG

Assurance of Learning Exercise 9C: Performing an EPS/EBIT Analysis for adidas AG

Assurance of Learning Exercise 9D: Preparing Projected Financial Statements for

adidas AG

Assurance of Learning Exercise 9E: Determining the Cash Value of adidas AG

Assurance of Learning Exercise 9F: Developing a Product-Positioning Map for My

College

Assurance of Learning Exercise 9G: Do Banks Require Projected Financial

Statements?

Chapter 10 Strategy ExecutionThe Nature of Strategy Implementation

Accenture Excellent Strategic Management Showcased AccentureManagement Perspectives

Annual Objectives

Policies

Resource Allocation

Managing Conflict

Matching Structure with StrategyThe Functional Structure

The Divisional Structure

The Strategic Business Unit (SBU) Structure

The Matrix Structure

Some Dos and Donts in Developing Organizational Charts

Restructuring

Table of Contents

Restructuring

Linking Performance and Pay to Strategies

Managing Resistance to Change

Creating a Strategy-Supportive Culture

Production and Operations Concerns When Implementing Strategies

Human Resource Concerns When Implementing StrategiesEmployee Stock Ownership Plans (ESOPs)

Balancing Work Life and Home Life

Benefits of a Diverse Workforce

Corporate Wellness Programs


Assurance of Learning Exercise 10A: Developing an Organizational Chart for

Accenture plc

Assurance of Learning Exercise 10B: Assessing Accentures Philanthrophy Efforts

Assurance of Learning Exercise 10C: Revising adidas AG s Organizational Chart

Assurance of Learning Exercise 10D: Exploring Objectives

Assurance of Learning Exercise 10E: Understanding My Universitys Culture

Chapter 11 Strategy MonitoringThe Nature of Strategy Evaluation

BHP Billiton: Excellent Strategic Management ShowcasedThe Process of Evaluating Strategies

A Strategy-Evaluation FrameworkReviewing Bases of Strategy

Measuring Organizational Performance

Taking Corrective Actions

The Balanced Scorecard

Published Sources of Strategy-Evaluation Information

Characteristics of an Effective Evaluation System

Contingency Planning

Auditing

21st-Century Challenges in Strategic ManagementThe Art or Science Issue

The Visible or Hidden Issue

The Top-Down or Bottom-Up Approach


Assurance of Learning Exercise 11A: Evaluating BHP Billitons Strategies

Assurance of Learning Exercise 11B: Preparing a Strategy-Evaluation Report for

adidas AG

Table of Contents

Assurance of Learning Exercise 11C: Preparing a Strategy-Evaluation Report for

adidas AG

Assurance of Learning Exercise 11D: Evaluate My Universitys Strategies

Appendix 1 Guidelines For Case AnalysisWhat Is a Strategic-Management Case?

Guidelines for Preparing Case AnalysesThe Need for Practicality

The Need for Justification

The Need for Realism

The Need for Specificity

The Need for Originality

The Need to Contribute

Preparing a Case for Class Discussion

The Case Method versus Lecture ApproachThe Cross-Examination

Preparing a Written Case AnalysisThe Executive Summary

The Comprehensive Written Analysis

Steps in Preparing a Comprehensive Written Analysis

Making an Oral PresentationOrganizing the Presentation

Controlling Your Voice

Managing Body Language

Speaking from Notes

Constructing Visual Aids

Answering Questions

Tips for Success in Case AnalysisContent Tips

Process Tips

Sample Case Analysis Outline

Steps in Presenting an Oral Case Analysis

Oral PresentationStep 1: Introduction (2 minutes)

Oral PresentationStep 2: Mission and Vision (4 minutes)

Oral PresentationStep 3: Internal Assessment (8 minutes)

Oral PresentationStep 4: External Assessment (8 minutes)

Oral PresentationStep 5: Strategy Formulation (14 minutes)

Oral PresentationStep 6: Strategy Implementation (8 minutes)

Oral PresentationStep 7: Strategy Evaluation (2 minutes)

Oral PresentationStep 8: Conclusion (4 minutes)

Glossary

Table of Contents

Name IndexA

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Subject IndexA

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Fred R. David • Forest R. David

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