Author Biography xiii

Preface to the Eleventh Edition xv

Matching Cases to Chapters xvi

Part I Introduction 1

1 The Concept of Strategy 3

Introduction and Objectives 4

The Role of Strategy in Success 4

The Basic Framework for Strategy Analysis 8

What Is Strategy? Why Do Firms Need It? 10

Locating and Describing Strategy 14

How Is Strategy Made? The Strategy Process 18

Strategic Management of Not-For-Profit Organizations 21

Summary 24

Self-Study Questions 25

Notes 26

Part II The Tools Of Strategy Analysis 27

2 Goals, Values, and Performance 29

Introduction and Objectives 30

Strategy as a Quest for Value 31

Profit, Cash Flow, and Enterprise Value 34

Putting Performance Analysis into Practice 38

Beyond Profit: Values and Corporate Social Responsibility 45

Beyond Profit: Strategy and Real Options 49

Summary 51

Self-Study Questions 52

Notes 52

3 Industry Analysis: The Fundamentals 54

Introduction and Objectives 55

From Environmental Analysis to Industry Analysis 55

Analyzing Industry Attractiveness 57

Applying Industry Analysis to Forecasting Industry Profitability 65

Using Industry Analysis to Develop Strategy 66

Defining Industries: Where to Draw the Boundaries 68

From Industry Attractiveness to Competitive Advantage: Identifying Key Success Factors 70

Summary 73

Self-Study Questions 74

Notes 74

4 Further Topics in Industry and Competitive Analysis 76

Introduction and Objectives 77

The Limits of Industry Analysis 77

Beyond the Five Forces: Complements, Ecosystems, and Business Models 79

Competitive Interaction: Game Theory and Competitor Analysis 83

Segmentation and Strategic Groups 89

Summary 93

Self-Study Questions 94

Notes 94

5 Analyzing Resources and Capabilities 97

Introduction and Objectives 98

The Role of Resources and Capabilities in Strategy Formulation 98

Identifying Resources and Capabilities 102

Appraising Resources and Capabilities 108

Developing Strategy Implications 112

Summary 116

Self-Study Questions 117

Notes 118

6 Organization Structure and Management Systems: The Fundamentals of Strategy Implementation 119

Introduction and Objectives 120

Strategy Formulation and Strategy Implementation 121

The Fundamentals of Organizing: Specialization, Cooperation, and Coordination 123

Developing Organizational Capability 126

Organization Design 129

Summary 136

Self-Study Questions 136

Notes 137

Part III Business Strategy And The Quest For Competitive Advantage 139

7 The Sources and Dimensions of Competitive Advantage 141

Introduction and Objectives 142

How Is Competitive Advantage Established? 142

How Is Competitive Advantage Sustained? 148

Cost Advantage 151

Differentiation Advantage 158

Can Firms Pursue Both Cost and Differentiation Advantage? 168

Summary 169

Self-Study Questions 169

Notes 170

8 Industry Evolution and Strategic Change 173

Introduction and Objectives 174

The Industry Life Cycle 175

The Challenge of Organizational Adaptation and Strategic Change 182

Managing Strategic Change 187

Summary 197

Self-Study Questions 197

Notes 198

9 Technology-Based Industries and the Management of Innovation 201

Introduction and Objectives 202

Competitive Advantage in Technology-Intensive Industries 202

Strategies to Exploit Innovation 209

Standards, Platforms, and Network Externalities 214

Implementing Technology Strategies 220

Summary 227

Self-Study Questions 228

Notes 228

Part IV Corporate Strategy 231

10 Vertical Integration and the Scope of the Firm 233

Introduction and Objectives 234

Transaction Costs and the Scope of the Firm 234

The Benefits and Costs of Vertical Integration 238

Designing Vertical Relationships 245

Summary 248

Self-Study Questions 248

Notes 249

11 Global Strategy and the Multinational Corporation 251

Introduction and Objectives 252

Implications of International Competition for Industry Analysis 253

Analyzing Competitive Advantage in an International Context 254

Internationalization Decisions: Locating Production 258

Internationalization Decisions: Entering a Foreign Market 261

Multinational Strategies: Global Integration versus National Differentiation 263

Implementing International Strategy: Organizing the Multinational Corporation 269

Summary 275

Self-Study Questions 275

Notes 276

12 Diversification Strategy 278

Introduction and Objectives 279

Motives for Diversification 280

Competitive Advantage from Diversification 284

Diversification and Performance 289

The Meaning of Relatedness in Diversification 290

Summary 291

Self-Study Questions 292

Notes 293

13 Implementing Corporate Strategy: Managing the Multibusiness Firm 295

Introduction and Objectives 296

The Role of Corporate Management 297

Managing the Corporate Portfolio 297

Managing Linkages across Businesses 299

Managing Individual Businesses 303

Managing Change in the Multibusiness Corporation 308

Governance of Multibusiness Corporations 312

Summary 316

Self-Study Questions 316

Appendix: External Growth Strategies: Mergers, Acquisitions, Alliances 317

Notes 323

14 Current Trends in Strategic Management 326

Introduction 327

The New Environment of Business 327

New Directions in Strategic Thinking 329

Redesigning Organizations 332

The Changing Role of Managers 334

Summary 335

Notes 335

Cases To Accompany Contemporary Strategy Analysis, Eleventh Edition

1 Peloton Interactive, Inc.: Creating New Market Space in the Home Fitness Sector 337

2 Kering SA: How Does Its Performance Compare to That of LVMH? 348

3 Pot of Gold? The US Legal Marijuana Industry 359

4 The Lithium-Ion Battery Industry 371

5 Streaming Wars: Netflix versus Disney 384

6 BP: Organizational Structure and Management Systems 396

7 Starbucks Corporation: Sustaining Competitive Advantage 403

8 Eastman Kodak's Quest for a Digital Future 413

9 Toyota: Seeking a Future in Hydrogen 430

10 Zara: Agility Through Vertical Integration 440

11 City Football Group: Building a Multinational Soccer Enterprise 450

12 Google Is Now Alphabet-But What's the Corporate Strategy? 462

13 How Do You Solve a Problem Like General Electric? 475

14 Haier Group: Reinventing the Industrial Corporation 490

Glossary G-1

Index I-1