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For these Global Editions, the editorial team at Pearson has a
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collaborated with educators across the world to address a wide g
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range of subjects and requirements, equipping students with the best M
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approach and pedagogy of the original, but also features alterations,
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This is a special edition of an established title widely estearne
ry
ly
used by colleges and universities throughout the world.
Pearson published this exclusive edition for the benefit
of students outside the United States and Canada. If you
purchased this book within the United States or Canada
you should be aware that it has been imported without
the approval of the Publisher or Author.
Pearson Global Edition
BARNEY_129205767X_mech.indd 1 22/09/14 5:51 PM
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BARNEY_129205767X_ifc.indd 1 22/09/14 5:00 PM
What’s Out?
Models, concepts, and topics that don’t pass a simple test:
“Does this help students analyze cases and real business situations?”
What’s In?
“VRIO” – an integrative framework (see next page for details).
■ Broad enough to apply in analyzing a variety of cases and real business
settings.
■ Simple enough to understand and teach.
V R I O
V R I O
V R I O
V R I O
The Results?
Provides students with the tools they need to do strategic analysis.
Nothing more. Nothing less.
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“Value. Rarity. Imitability. Organization.”
What Is It?
This book is not just a list of concepts, models, and theories. It is the first
undergraduate textbook to introduce a theory-based, multi-chapter organizing
framework to add additional structure to the field of strategic management.
“VRIO” is a mechanism that integrates two existing theoretical frameworks:
the positioning perspective and the resource-based view. It is the primary tool for
accomplishing internal analysis. It stands for four questions one must ask about a
resource or capability to determine its competitive potential:
1. The Question of Value: Does a resource enable a firm to exploit an
environmental opportunity, and/or neutralize an environmental threat?
2. The Question of Rarity: Is a resource currently controlled by only a small
number of competing firms?
3. The Question of Imitability: Do firms without a resource face a cost
disadvantage in obtaining or developing it?
4. The Question of Organization: Are a firm’s other policies and
procedures organized to support the exploitation of its valuable, rare, and
costly-to-imitate resources?
What’s the Benefit of the VRIO Framework?
The VRIO framework is the organizational foundation of the text. It creates a
decision-making framework for students to use in analyzing case and business
situations.
Students tend to view concepts, models, and theories (in all of their
coursework) as fragmented and disconnected. Strategy is no exception. This
view encourages rote memorization, not real understanding. VRIO, by serv-
ing as a consistent framework, connects ideas together. This encourages real
understanding, not memorization.
This understanding enables students to better analyze business cases and
situations—the goal of the course.
The VRIO framework makes it possible to discuss the formulation and
implementation of a strategy simultaneously, within each chapter.
Because the VRIO framework provides a simple integrative structure,
we are actually able to address issues in this book that are largely ignored
elsewhere—including discussions of vertical integration, outsourcing, real
options logic, and mergers and acquisitions, to name just a few.
A02_BARN7675_05_GE_FM.INDD 2 13/09/14 3:08 PM
Edition
5
Strategic Management and
Competitive Advantage
Concepts
Global Edition
Jay B. Barney
the University of Utah
William S. Hesterly
the University of Utah
Boston Columbus Hoboken Indianapolis New York San Francisco
Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto
Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
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Editor in Chief: Stephanie Wall Strategic Marketing Manager: Erin Gardner
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Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this
textbook appear on the appropriate page within text.
Pearson Education Limited
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and Associated Companies throughout the world
Visit us on the World Wide Web at:
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© Pearson Education Limited 2015
The rights of Jay B. Barney and William S. Hesterly to be identified as the authors of this work have
been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
Authorized adaptation from the United States edition, entitled Strategic Management and Competitive
Advantage: Concepts, 5th edition, ISBN 978-0-13-312930-4, by Jay B. Barney and William S. Hesterly,
published by Pearson Education © 2015.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
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All trademarks used herein are the property of their respective owners. The use of any trademark in this
text does not vest in the author or publisher any trademark ownership rights in such trademarks, nor
does the use of such trademarks imply any affiliation with or endorsement of this book by such owners.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
10 9 8 7 6 5 4 3 2 1
15 14 13 12 11
ISBN 10: 1-292-05767-X
ISBN 13: 978-1-292-05767-5
Typeset in 10/12 Palatino LT Std Roman by Integra
Printed by Courier Kendallville in the United States of America
A02_BARN7675_05_GE_FM.INDD 4 13/09/14 3:08 PM
This book is dedicated to my family: my wife, Kim; our children,
Lindsay, Kristian, and Erin, and their spouses; and, most of all, our
nine grandchildren, Isaac, Dylanie, Audrey, Chloe, Lucas, Royal,
Lincoln, Nolan, and Theo. They all help me remember that no suc-
cess could compensate for failure in the home.
Jay B. Barney
Salt Lake City, Utah
This book is for my family who has taught me life’s greatest lessons
about what matters most. To my wife, Denise; my daughters, sons,
and their spouses: Lindsay, Matt, Jessica, John, Alex, Brittany, Austin,
Julia, Ian, and Drew.; and my grandchildren, Ellie, Owen, Emerson,
Cade, Elizabeth, Amelia, Eden, Asher, Lydia, and Scarlett.
William Hesterly
Salt Lake City, Utah
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A02_BARN7675_05_GE_FM.INDD 6 13/09/14 3:08 PM
Brief Contents
Part 1: The ToolS of STrATegiC AnAlySiS
CHaptEr 1 What Is Strategy and the Strategic Management Process? 24
CHaptEr 2 Evaluating a Firm’s External Environment 48
CHaptEr 3 Evaluating a Firm’s Internal Capabilities 84
Part 2: BuSineSS-level STrATegieS
CHaptEr 4 Cost Leadership 122
CHaptEr 5 Product Differentiation 150
Part 3: CorporATe STrATegieS
CHaptEr 6 Vertical Integration 182
CHaptEr 7 Corporate Diversification 208
CHaptEr 8 Organizing to Implement Corporate Diversification 240
CHaptEr 9 Strategic Alliances 268
CHaptEr 10 Mergers and Acquisitions 296
CHaptEr 11 International Strategies 328
Appendix: Analyzing Cases and Preparing for Class Discussions 365
Glossary 369
Company Index 377
Name Index 380
Subject Index 385
7
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