Strategic Management

352 Pages·2020·15.365 MB·English

by  Eli Jamison, Joseph Simpson, Pankaj Kumar, Ayenda Kemp, Kiran Awate, Kathleen Manning

STRATEGIC
MANAGEMENT
Adapted by Reed Kennedy
with Eli Jamison, Joseph Simpson, Pankaj Kumar,
Ayenda Kemp, Kiran Awate, and Kathleen Manning
Why do some companies outperform others? In a dynamic and competitive busi-
ness environment, the answer to this question can be the difference between
success and failure. Firms that are successful generally have a strategic man-
agement process that helps them set goals and execute on a clear vision.
This textbook offers an introduction to the key topics and themes of strategic
management. The authors draw on examples of familiar companies and person-
alities to illustrate the different strategies used by today’s firms - and how they
go about implementing those strategies. Students will learn hot to conduct a
case analysis, measure organizational performance, and conduct external and
internal analyses. In short, they will understand how organizations operate at the
strategic level to be successful.
Strategic Management is intended for a wide range of business students
including those majoring in marketing, management, business administration,
accounting, finance, real estate, business information technology, and hospi-
tality and tourism. It is ideal for a senior capstone course in an undergraduate
business program. It is available online for free in multiple formats and also as
affordable print editions.
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Contents
Copyright and License Information ix
Acknowledgments xi
Introduction 1
Instructor Resources 5
Chapter 1: Mastering Strategy: Art and Science 7
1.1 Introduction 7
1.2 What is Strategic Management? 9
1.3 Intended, Emergent, and Realized Strategies 12
1.4 The History of Strategic Management 17
1.5 Contemporary Critique of Strategic Management 25
1.6 Understanding the Strategic Management Process 27
1.7 Conclusion 31
Chapter 2: Assessing Organizational Performance 32
2.1 Introduction 32
2.2 Vision, Mission, and Goals 33
2.3 Assessing Organizational Performance 42
2.4 Competitive Advantage 50
2.5 Conclusion 52
Chapter 3: Evaluating the External Environment 53
3.1 Introduction 53
3.2 The Relationship between an Organization and its Environment 55
3.3 Evaluating the General Environment 58
3.4 Evaluating the Industry 69
3.5 Mapping Strategic Groups 83
3.6 Conclusion 87
Chapter 4: Evaluating the Internal Environment 88
4.1 Introduction 88
4.2 Managing Firm Resources 90
4.3 Resource-Based View 92
4.4 Intellectual Property & Isolating Mechanisms 101
4.5 Value Chain 110
4.6 Conclusion 114
Chapter 5: Synthesis of Strategic Issues and Analysis 116
5.1 Introduction 116
5.2 SWOT Framework 117
5.3 Strategic Issue Identification 120
5.4 Conclusion 123
Chapter 6: Selecting Business-Level Strategies 124
6.1 Introduction 124
6.2 Understanding Business-Level Strategy through “Generic Strategies” 127
6.3 Cost Leadership 131
6.4 Differentiation 136
6.5 Focused Cost Leadership and Focused Differentiation 143
6.6 Best-Cost Strategy 152
6.7 Stuck in the Middle 158
6.8 Conclusion 162
Chapter 7: Innovation Strategies 163
7.1 Introduction 163
7.2 Entrepreneurial Orientation 164
7.3 Why Innovate? 170
7.4 Types of Innovation 173
7.5 Implementing Innovation 180
7.6 Responding to Innovation in the Market 188
7.7 Conclusion 194
Chapter 8: Selecting Corporate-Level Strategies 195
8.1 Introduction 195
8.2 Corporate-Level Strategy Defined 196
8.3 Diversification 199
8.4 Implementing Corporate Strategy 211
8.5 Strategies for Getting Smaller 213
8.6 Portfolio Planning and Corporate-Level Strategy 216
8.7 Conclusion 220
Chapter 9: Competing in International Markets 221
9.1 Introduction 221
9.2 Advantages and Disadvantages of Competing in International Markets 222
9.3 CAGE Framework 234
9.4 Types of International Strategies 237
9.5 Drivers of Success and Failure When Competing in International Markets 241
9.6 Options for Competing in International Markets 249
9.7 Conclusion 257
Chapter 10: Executing Strategy through Organizational Design 259
10.1 Introduction 259
10.2 Why Organizational Design? 260
10.3 The Basic Building Blocks of Organizational Structure 264
10.4 Creating an Organizational Structure 269
10.5 Creating Organizational Control Systems 282
10.6 Legal Forms of Business 291
10.7 Conclusion 295
Chapter 11: Leading an Ethical Organization: Corporate Governance, Corporate Ethics, and Social 297
Responsibility
11.1 Introduction 297
11.2 Doing Well by Doing Good 300
11.3 Corporate Governance 306
11.4 Corporate Ethics and Social Responsibility 312
11.5 Contemporary Questions of Corporate Ethics 318
11.6 Conclusion 324
About the Author 327
Primary Contributor and Content Expert Coordinator 327
Reviewers and Contributors 327
Editorial and Production Teams 330
Editorial Team 330
Version Notes 332
Glossary 336
Copyright and License Information
Strategic Management (c) 2020. Reed Kennedy.
This book is licensed with a Creative Commons NonCommercial-ShareAlike 3.0 License.
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Adaptation Attribution: This book is adapted from an open textbook produced and distributed under a
Creative Commons license (CC BY NC-SA). This adapted edition is produced by Virginia Tech Publishing
(http://publishing.vt.edu) through the University Libraries’ Open Education Initiative
(https://guides.lib.vt.edu/oer/grantees). It is an adaptation of an edition produced in 2015
(https://open.lib.umn.edu/strategicmanagement) by the University of Minnesota Libraries Publishing through
their eLearning Support Initiative. Whereas the University of Minnesota adapted and did not significantly
update a 2010 version by a publisher who has requested that they and the original author not receive
attribution, this version has been significantly updated. Version notes located in the back of the book describe
changes and updates implemented in this version.
Third-party works: All third-party works within the book (images, illustrations, etc.) retain their original
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license, works used under fair use, and those in the Public Domain. Links to external content such but not
limited to videos are not covered by the overall license on this book. Trademarks are the property of their
respective owners.
Suggested citation: Kennedy, Reed. (2020) Strategic Management. Blacksburg, VA: Virginia Tech Publishing.
https://doi.org/10.21061/strategicmanagement CC BY NC-SA 3.0
Publisher: This work is published by Virginia Tech’s Pamplin College of Business in association with Virginia
Tech Publishing.
Copyright and License Information | ix
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Publication Cataloging Information
Kennedy, Reed, author
Strategic Management / Reed Kennedy
Pages cm
ISBN 978-1-949373-94-3 (print-color)
ISBN 978-1-949373-89-9 (print-black & white)
ISBN 978-1-949373-96-7 (ebook-PDF)
ISBN 978-1-949373-95-0 (ebook-Pressbooks)
DOI: https://doi.org/10.21061/strategicmanagement
1. Management. 2. Strategy
I. Title
HD30.28.K45
Cover Design: Kindred Grey
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Acknowledgments
Publication of this work was made possible in part by the University Libraries at Virginia Tech through its
Open Education Initiative (https://guides.lib.vt.edu/oer/grants), which provides development assistance and
financial support to Virginia Tech faculty who wish to use, create, or adapt openly licensed teaching materials
to support student learning. The University Libraries also contributed faculty and staff labor. Reed Kennedy’s
contributions were supported by the Pamplin College of Business at Virginia Tech.
Acknowledgments | xi