Table Of ContentTHE BUSINESS Strategic Management D Strategic Management Collection
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EXPERT PRESS An Executive Perspective K John A. Pearce II, Editor
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Curriculum-oriented, born- Organizational success crucially depends on having a P
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digital books for advanced superior strategy and effectively implementing it. Com- A
business students, written panies that outperform their rivals typically have a bet- R
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by academic thought ter grasp of what customers value, who their competitors E
leaders who translate real- II
are, and how they can create an enduring competitive
Strategic
world business experience
advantage.
into course readings and
Successful strategies refl ect a solid grasp of relevant
reference materials for
students expecting to tackle forces in the external and competitive environment, a clear Management
management and leadership strategic intent, and a deep understanding of a company’s
challenges during their core competencies and assets. Generic strategies rarely
professional careers. propel a fi rm to a leadership position. Knowing where to
An Executive
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BY LIBRARIANS ting there are the hallmarks of successful strategy. TR
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The Digital Libraries are a Cornelis A. de Kluyver
comprehensive, cost-eff ective John A. Pearce II is the VSB Endowed Chair in Strategic
way to deliver practical
Management and Entrepreneurship at Villanova Univer- John A. Pearce II
treatments of important
sity. He has coauthored 42 books, 119 articles, and 137 ref-
business issues to every
ereed professional papers. His groundbreaking analysis of
student and faculty member.
product reconstruction appeared in the Wall Street Jour-
nal, and his work in legal issues has produced 12 articles
in law review journals. Professor Pearce has also served
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Strategic Management Collection
John A. Pearce II, Editor
Strategic Management:
An Executive Perspective
Strategic Management:
An Executive Perspective
Cornelis A. de Kluyver and John A. Pearce II
Strategic Management: An Executive Perspective
Copyright © Business Expert Press, LLC, 2015.
All rights reserved. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted in any form or by any
means—electronic, mechanical, photocopy, recording, or any other
except for brief quotations, not to exceed 400 words, without the prior
permission of the publisher.
First published by
Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com
ISBN-13: 978-1-63157-073-5 (paperback)
ISBN-13: 978-1-63157-074-2 (e-book)
Business Expert Press Strategic Management Collection
Collection ISSN: 2150-9611 (print)
Collection ISSN: 2150-9646 (electronic)
Cover and interior design by S4Carlisle Publishing Services Private Ltd.,
Chennai, India
First edition: 2015
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America
Abstract
The principal objectives of this book are to assist practicing managers
in preparing to assume executive responsibilities and to introduce MBA
and Executive MBA students to an executive perspective on strategic
management.
Organizational success crucially depends on having a superior strategy
and effectively implementing it. Companies that outperform their rivals
typically have a better grasp of what customers value, who their competi-
tors are, and how they can create an enduring competitive advantage.
Successful strategies reflect a solid grasp of relevant forces in the exter-
nal and competitive environment, a clear strategic intent, and a deep
understanding of a company’s core competencies and assets. Generic
strategies rarely propel a firm to a leadership position. Knowing where to
go and finding carefully considered, creative ways of getting there are the
hallmarks of successful strategy.
Perhaps even more important to success is the ability to effectively
implement a chosen strategy—marshaling the right resources and talent,
creating a functional organizational structure, fostering a beneficial cor-
porate culture and providing appropriate incentives.
Keywords
Strategy formulation, corporate strategy, business unit strategy, competi-
tive advantage, business model, innovation, value creation, value prop-
osition, markets, segmentation, positioning, value disciplines, market
participation, supply chain infrastructure, global management model,
global industry, global branding, innovation, outsourcing, offshoring,
board of directors
Contents
Acknowledgments ...................................................................................ix
Preface ..................................................................................................xi
Chapter 1 What Is Strategy? ..............................................................1
Introduction .....................................................................1
Strategy Formulation: Concepts and Dimensions ..............5
The Strategy Formulation Process ....................................16
Chapter 2 Strategy and Performance ................................................19
Introduction ...................................................................19
Strategy and Performance: A Conceptual Framework ......33
Evaluating Strategic Options ...........................................41
Chapter 3 Analyzing the External Strategic Environment ................45
Introduction ...................................................................45
Globalization ..................................................................46
The Technology Revolution .............................................54
Corporate Social Responsibility—A New Business
Imperative ...................................................................58
Risk and Uncertainty ......................................................63
Chapter 4 Analyzing an Industry .....................................................71
Industry Influences a Company’s Options
and Outcomes .............................................................71
What Is an Industry? .......................................................72
Industry Evolution ..........................................................76
Methods for Analyzing an Industry .................................86
Chapter 5 Analyzing a Company’s Strategic Resource Base ..............91
Introduction ...................................................................91
Strategic Resources ..........................................................92
Global Supply-Chain Management ...............................103
Forces for Change .........................................................109
Stakeholder Analysis ......................................................111
Creating a Green Corporate Strategy .............................112
Chapter 6 Formulating Business Unit Strategy ...............................119
Introduction .................................................................119
viii CONTENTS
SBU Disruptions Come from Myriad Sources ...............120
Foundations ..................................................................120
Formulating a Competitive Strategy ..............................122
Porter’s Generic Business Unit Strategies .......................128
Value Disciplines ...........................................................133
Designing a Profitable Business Model ..........................136
Chapter 7 Business Unit Strategy: Contexts and
Special Dimensions .......................................................139
Introduction .................................................................139
One Cause to Reconsider an SBU Strategy ...................139
Emerging, Growth, Mature, and Declining Industries ...141
Fragmented, Deregulating, Hypercompetitive,
and Internet-Based Industries ....................................144
Business Unit Strategy: Special Dimensions ..................153
Chapter 8 Global Strategy: Fundamentals ......................................167
Introduction .................................................................167
Global Strategy as Business Model Change....................167
Ghemawat’s Generic ”AAA” Global Strategy
Framework ................................................................168
Which ”A” Strategy Should a Company Choose? ..........174
The Need for Global Strategic Management ..................177
Chapter 9 Global Strategy: Adapting the Business Model ..............189
Introduction .................................................................189
Globalizing the Value Proposition .................................198
Globalizing the Sourcing Dimension.............................208
Chapter 10 The Board’s Role in Strategic Management ....................215
Introduction .................................................................215
What is the Proper Role of the Board in Strategy
Development? ............................................................215
Creating a Meaningful Role for the Board .....................220
Dealing with Special Situations .....................................223
Monitoring Strategy Implementation:
Choosing Metrics ......................................................230
Creating a Strategy Focused Board .............................231
Notes..................................................................................................233
Index .................................................................................................245
Acknowledgments
Writing a book is a mammoth undertaking. Fortunately, we had a lot of
encouragement along the way from users of our other books, our pub-
lisher, our families, our colleagues, and our friends. We take this opportu-
nity to thank them all for their constructive criticisms, time, and words of
encouragement. We are grateful to all of them and hope the result meets
their high expectations.
We are particularly indebted to our families: Louise de Kluyver and
sons Peter and Jonathan, and Susie Pearce and sons David and Mark. We
thank them for their unwavering support.
Cornelis A. “Kees” de Kluyver
John A. “Jack” Pearce II
January 2015
