Strategic Management: Competitiveness and Globalisation, 7th Edition
By Dallas Hanson, Kim Backhouse, David Leaney, Michael A. Hitt, R. Duane Ireland and Robert E. Hoskisson
Contents:
Guide To The Text Xii
Guide To The Online Resources Xiv
Preface Xvi
About The Authors Xviii
Acknowledgements Xxi
1 PART 1
STRATEGIC MANAGEMENT INPUTS 1
1 Strategic management and strategic
competitiveness 2
Opening case study: McDonald’s and brand recognition 3
The strategic management process 4
The competitive landscape 7
The global economy 8
Strategic focus: Starbucks is a new economy
multinational yet has had failures in key markets 9
The march of globalisation 10
Technology and technological changes 11
Strategic focus:
The core of Apple: technology and innovation 14
The I/O model of above-average returns 15
The resource-based model of above-average
returns 17
Vision and mission 19
Vision 19
Mission 20
Stakeholders 21
Classifications of stakeholders 21
Strategic leaders 23
The work of effective strategic leaders 24
Predicting outcomes of strategic decisions 25
STUDY TOOLS 27
2 The external environment: opportunities,
threats, industry competition and competitor
analysis 34
Opening case study: Drilling for oil: risks and rewards 35
The general, industry and competitor
environments 38
External environmental analysis 39
Scanning 40
Monitoring 40
Forecasting 41
Assessing 41
Segments of the general environment 41
The demographic segment 42
The economic segment 44
The political/legal segment 46
The sociocultural segment 47
The technological segment 49
The global segment 50
The physical environment segment 51
Strategic focus: Target (Tar-zhey) is trying to navigate in
a new and rapidly changing competitive landscape 52
Industry environment analysis 53
Threat of new entrants 54
Bargaining power of suppliers 57
Bargaining power of buyers 57
Threat of substitute products 58
Strategic focus: German performance/luxury cars: if
you’ve seen one, have you seen them all? 58
Intensity of rivalry among competitors 59
Interpreting industry analyses 61
Strategic groups 61
Competitor analysis 62
Ethical considerations 64
STUDY TOOLS 65
3 The internal organisation: resources, capabilities,
core competencies and competitive advantages 72
Opening case study: Large pharmaceutical companies,
big data analytics, artificial intelligence and core
competencies: a brave new world 73
Analysing the internal organisation 75
The context of internal analysis 75
Creating value 76
The challenge of analysing the internal organisation 77
Resources, capabilities and core competencies 79
Strategic focus: Tangible and intangible resources as the
base for core competencies 80
Resources 80
Capabilities 83
Core competencies 83
Building core competencies 84
Strategic focus: Procter & Gamble: using capabilities and
core competencies to create value for customers 85
The four criteria of sustainable competitive advantage 86
Value chain analysis 89
Competencies, strengths, weaknesses and
strategic decisions 92
STUDY TOOLS 94
2 PART 2
STRATEGIC ACTIONS: STRATEGY FORMULATION 101
4 Business-level strategy 102
Opening case study: Clonakilla Wines in a quality niche
position 103
Customers: their relationship with businesslevel
strategies 105
Effectively managing relationships with
customers 105
Reach, richness and affiliation 106
Who: determining the customers to serve 107
What: determining which customer needs to satisfy 107
How: determining core competencies necessary to
satisfy customer needs 108
The purpose of a business-level strategy 109
Business models and their relationship with
business-level strategies 109
Types of business-level strategies 110
Cost leadership strategy 112
Differentiation strategy 115
Focus strategies 119
Integrated cost leadership/differentiation strategy 120
Strategic focus: Apple vs Samsung vs Huawei: the battle
for smart technology 121
STUDY TOOLS 125
5 Competitive dynamics 131
Opening case study: Tesco PLC: a case study in
competitive behaviour 132
A model of competitive rivalry 134
Competitor analysis 135
Market commonality 136
Strategic focus: Competitive rivalry in fast fashion: a
constant stream of actions and responses 137
Resource similarity 138
Drivers of competitive actions and responses 139
Competitive rivalry 141
Strategic and tactical actions 141
Likelihood of attack 142
First-mover incentives 142
Organisational size 144
Quality 144
Likelihood of response 145
Type of competitive action 146
Actor’s reputation 146
Dependence on the market 147
Competitive dynamics 147
Slow-cycle markets 147
Fast-cycle markets 148
Strategic focus: The emergence of competitive rivalry
among battery manufacturers: who will establish the
most attractive market position? 150
Standard-cycle markets 152
STUDY TOOLS 153
6 Corporate-level strategy 161
Opening case study: The quintessential diversified organisation 162
Purpose of corporate-level strategies 163
Levels of diversification 164
Low levels of diversification 165
Moderate and high levels of diversification 166
Strategic focus: Acciona’s related diversification and
renewable energy growth 166
Reasons for diversification 167
Value-creating diversification: related constrained
and related linked diversification 169
Operational relatedness: sharing activities 170
Corporate relatedness: transferring of core competencies 170
Market power 171
Strategic focus: Alphabet’s evolution through diversification 172
Simultaneous operational relatedness and corporate relatedness 174
Unrelated diversification 174
Efficient internal capital market allocation 174
Restructuring of assets 176
Value-neutral diversification: incentives and resources 176
Incentives to diversify 177
Resources and diversification 178
Value-reducing diversification: managerial motives to diversify 179
STUDY TOOLS 182
7 Acquisition and restructuring strategies 189
Opening case study: Strategic acquisitions and a people focused
integration of those acquisitions are vital capabilities of Atlassian 190
The popularity of merger and acquisition strategies 192
Mergers, acquisitions and takeovers: what are the differences? 192
Reasons for acquisitions 193
Increased market power 193
Overcoming entry barriers 195
Strategic focus: Cross-border acquisitions by
organisations from emerging economies:
leveraging resources to gain a larger global footprint and market power 196
Cost of new product development and increased speed to market 198
Lower risk compared to developing new products 199
Increased diversification 199
Reshaping the organisation’s competitive scope 200
Learning and developing new capabilities 200
Problems in achieving acquisition success 201
Integration difficulties 201
Inadequate evaluation of target 202
Large or extraordinary debt 203
Inability to achieve synergy or harvest benefits 203
Too much diversification 204
Managers overly focused on acquisitions 205
Too large 205
Effective acquisitions 206
Restructuring 208
Downsizing 208
Down scoping 209
Leveraged buyouts 209
Restructuring outcomes 209
STUDY TOOLS 211
8 International strategy 218
Opening case study: An international strategy powers ABB’s future 219
Identifying international opportunities 221
Incentives to use international strategy 221
Three basic benefits of international strategy 222
International strategy types 224
International business-level strategy 225
International corporate-level strategy 227
Environmental trends 230
Liability of foreignness 230
Regionalisation 231
Choice of international entry mode 232
Exporting 232
Licensing 233
Strategic alliances 234
Acquisitions 235
New wholly owned subsidiaries 236
Dynamics of mode of entry 236
Strategic focus: Mondelez International: a global leader in
snack foods 237
Risks in an international environment 238
Political risks 238
Economic risks 239
The challenge of international strategies 240
Managing international strategies: size and complexity 240
Limits to international expansion 241
Strategic focus: Mexico’s FEMSA: building its international prowess 241
Strategic competitiveness outcomes 242
International diversification and returns 242
Enhanced innovation 243
STUDY TOOLS 244
9 Cooperative strategy 252
Opening case study: Global cars, with a twist 253
Strategic alliances as a primary type of
cooperative strategy 254
Types of major strategic alliances 255
Strategic focus: Samsung Electric is using diversifying
alliances to reduce its dependence on Google’s Android
operating system 256
Reasons organisations develop strategic alliances 258
Strategic focus: Industrial clusters: geographic centres
for collaborative partnering 260
Competition-reducing strategy 263
Business-level cooperative strategy 263
Complementary strategic alliances 264
Competition response strategy 266
Uncertainty-reducing strategy 266
Assessing business-level cooperative strategies 266
Corporate-level cooperative strategy 267
Diversifying strategic alliance 267
Synergistic strategic alliance 268
Franchising 268
Assessing corporate-level cooperative strategies 269
International cooperative strategy 269
Network cooperative strategy 270
Alliance network types 271
Competitive risks with cooperative strategies 272
Managing cooperative strategies 273
STUDY TOOLS 275
3 PART 3
STRATEGIC ACTIONS: STRATEGY IMPLEMENTATION 283
10 Corporate governance 284
Opening case study: General Electric’s complex
diversification strategy makes evaluation difficult for board directors 285
Separation of ownership and managerial control 288
Agency relationships 288
Product diversification as an example of an
agency problem 290
Agency costs and governance mechanisms 291
Ownership concentration 292
Ownership structures of companies in Australia 293
The increasing influence of institutional owners 293
Board of directors 293
Board of directors process 296
Enhancing the effectiveness of the board of directors 297
Executive compensation 298
The effectiveness of executive compensation 299
Strategic focus: Has more governance scrutiny made
large CEO compensation packages more reasonable? 300
Market for corporate control 301
International corporate governance 302
Corporate governance in Australia 302
Corporate governance in Germany and Japan 306
Corporate governance in China 307
Corporate governance in Spain 308
Governance mechanisms and ethical behaviour 308
Strategic focus: Rewarding top executives of one of the
most poorly governed banks in the world: Westpac 309
Corporate governance and organisation performance 311
Corporate social responsibility 311
STUDY TOOLS 313
11 Organisational structure and controls 321
Opening case study: Changing McDonald’s organisational
structure and controls: a path to improved performance 322
Organisational structure and controls 323
Organisational structure 324
Organisational controls 325
Relationships between strategy and structure 326
Evolutionary patterns of strategy and
organisational structure 327
Simple structure 328
Functional structure 328
Multi-divisional structure 328
Matches between business-level strategies and the
functional structure 329
Matches between corporate-level strategies and the
multi-divisional structure 332
Strategic focus: Globalisation and beer 333
Strategic focus: General Electric’s decline, new strategy
and reorganisation 339
Matches between international strategies and
worldwide structure 340
Matches between cooperative strategies and network structures 344
Implementing business-level cooperative strategies 345
Implementing corporate-level cooperative strategies 346
Implementing international cooperative strategies 347
STUDY TOOLS 348
12 Strategic leadership 355
Opening case study: Meg Whitman: a pioneering strategic leader 356
Strategic leadership and style 358
The role of executive managers 360
Executive management teams 361
Managerial succession 363
Strategic focus: Women in leadership 365
Key strategic leadership actions 366
Determining strategic direction 366
Effectively managing the organisation’s resource portfolio 368
Sustaining an effective organisational culture 370
Strategic focus: Organisational culture: is it really that important? 372
Emphasising ethical practices 373
Leadership and corporate social responsibility 374
Establishing balanced organisational controls 375
STUDY TOOLS 378
13 Strategic entrepreneurship 386
Opening case study: Today it is gas and diesel: tomorrow
it is likely to be electric vehicles, plug-in hybrids, and
driverless cars and trucks 387
Entrepreneurship and entrepreneurial opportunities 389
Innovation 389
Product innovation 391
Entrepreneurs 391
International entrepreneurship 392
Internal innovation 393
Incremental and radical innovation 393
Implementing internal innovations 394
Cross-functional product development teams 395
Facilitating integration and innovation 396
Creating value from internal innovation 396
Innovation through cooperative strategies 397
Strategic focus: Social networking websites facilitate
innovation: application software innovation 398
Innovation through acquisitions 399
Strategic focus: Will these acquisitions lead to innovation
success or to strategic failure? 400
Creating value through strategic entrepreneurship 401
STUDY TOOLS 403
4 PART 4
CASE STUDIES 411
Introduction: A summary of the case analysis process 412
Case 1: JB Hi-Fi Ltd acquisition of The Good Guys 415
Case 2: Challenges at Australia Post 426
Case 3: Nyrstar NV: a case study in a failed vertical integration strategy 432
Case 4: Pfizer 442
Case 5: Atlassian 454
Case 6: The Sunshine Coast UNESCO Biosphere
Reserve and Smart City: a new governance
opportunity in a post-pandemic world? 458
Case 7: CrossFit at the crossroads 465
Case 8: The movie exhibition industry: 2018 and beyond 482
Case 9: Pacific Drilling: the preferred offshore driller 506
Case 10: The trivago way – growing without growing up? 522
Case 11: The Volkswagen emissions scandal 539
Case 12: Otis in the global elevator industry 549
Case 13: Dick Smith: the fall of an Aussie icon 555
Glossary 566
Name Index 572
Subject Index 580