TEXTBOOK — PART ONE: Analysis
CHAPTER ONE: What Is Strategy And Why Is It Important?
• Chapter Outline: o What Strategy Is: Gaining and Sustaining Competitive Advantage
▪ What Is Competitive Advantage? ▪ Industry vs. Firm Effects In Determining Firm Performance
o Stakeholders and Competitive Advantage ▪ Stakeholder Strategy ▪ Stakeholder Impact Analysis
o The AFI Strategy Framework o Implications for the Strategist
• Learning Objectives: o Explain the role of strategy in a firm’s quest for competitive advantage. o Define competitive advantage, sustainable competitive advantage, competitive
disadvantage, and competitive parity.
6
o Differentiate the roles of firm effects and industry effects in determining firm performance.
o Evaluate the relationship between stakeholder strategy and sustainable competitive advantage.
o Conduct a stakeholder impact analysis.
CHAPTER TWO: Strategic Leadership: Managing the Strategy Process
• Chapter Outline: o Vision, Mission, and Values
▪ Vision ▪ Mission ▪ Values
o Strategic Leadership ▪ What Do Strategic Leaders Do? ▪ How Do You Become a Strategic Leader? ▪ Formulating Strategy Across Levels
o The Strategic Management Process ▪ Top-Down Strategic Planning ▪ Scenario Planning ▪ Strategy as Planned Emergence: Top-Down and Bottom-Up
o Implications for the Strategist
• Learning Objectives: o Describe the roles of vision, mission, and values in the strategic management process. o Evaluate the strategic implications of product-oriented and customer-oriented vision
statements.
o Explain why anchoring a firm in ethical core values is essential for long-term success. o Outline how managers become strategic leaders. o Describe the roles of corporate, business, and functional managers in strategy
formulation and implementation.
o Evaluate top-down strategic planning, scenario planning, and strategy as planned emergence.
CHAPTER THREE: External Analysis: Industry Structure, Competitive Forces, and Strategic Groups
• Chapter Outline: o The PESTEL Framework
▪ Political Factors ▪ Economic Factors ▪ Sociocultural Factors ▪ Technological Factors ▪ Ecological Factors ▪ Legal Factors
o Industry Structure and Firm Strategy: The Five Forces Model ▪ Competition in the Five Forces Model ▪ The Threat of Entry ▪ The Power of Suppliers ▪ The Power of Buyers ▪ The Threat of Substitutes ▪ Rivalry Among Existing Competitors
7
▪ A Sixth Force: The Strategic Role of Complements o Changes over Time: Industry Dynamics o Performance Differences Within the Same Industry: Strategic Groups
▪ The Strategic Group Model ▪ Mobility Barriers
o Implications for the Strategist
• Learning Objectives: o Generate a PESTEL analysis to evaluate the impact of external forces on the firm. o Apply Porter’s five competitive forces to explain the profit potential of different
industries.
o Explain how competitive industry structure shapes rivalry among competitors. o Describe the strategic role of complements in creating positive-sum co-opetition. o Appraise the role of industry dynamics and industry convergence in shaping the firm’s
external environment.
o Generate a strategic group model to reveal performance differences between clusters of firms in the same industry.
CHAPTER FOUR: Internal Analysis: Resources, Capabilities, and Core Competencies
• Chapter Outline: o Core Competencies o The Resource-Based View
▪ Two Critical Assumptions ▪ The VRIO Framework ▪ Isolating Mechanisms: How to Sustain a Competitive Advantage
o The Dynamic Capabilities Perspective o The Value Chain Analysis o Implications for the Strategist
▪ Using SWOT Analysis to Generate Insights from External and Internal Analysis
• Learning Objectives: o Differentiate among a firm’s core competencies, resources, capabilities, and activities. o Compare and contrast tangible and intangible resources. o Evaluate the two critical assumptions behind the resource-based view. o Apply the VRIO framework to assess the competitive implications of a firm’s resources. o Evaluate different conditions that allow a firm to sustain a competitive advantage. o Outline how dynamic capabilities can enable a firm sustain a competitive advantage. o Apply a value chain analysis to understand which of the firm’s activities in the process
of transforming inputs into outputs generate differentiation and which drive costs.
o Conduct a SWOT analysis to generate insights from external and internal analysis and derive strategic implications.
CHAPTER FIVE: Competitive Advantage, Firm Performance, and Business Models
• Chapter Outline: o Competitive Advantage and Firm Performance
▪ Accounting Profitability ▪ Shareholder Value Creation ▪ Economic Value Creation ▪ The Balanced Scorecard ▪ The Triple Bottom Line
8
o Business Models: Putting Strategy into Action ▪ Popular Business Models ▪ Dynamic Nature of Business Models
o Implications for the Strategist
• Learning Objectives: o Conduct a firm profitability analysis using accounting data to assess and evaluate
competitive advantage.
o Apply shareholder value creation to assess and evaluate competitive advantage. o Explain economic value creation and different sources of competitive advantage. o Apply a balanced scorecard to assess and evaluate competitive advantage. o Apply a triple bottom line to assess and evaluate competitive advantage. o Outline how business models put strategy into action.
TEXTBOOK — PART TWO: Formulation
CHAPTER SIX: Business Strategy: Differentiation, Cost Leadership, and Blue Oceans
• Chapter Outline: o Business-Level Strategy: How to Compete for Advantage
▪ Strategic Position ▪ Generic Business Strategies
o Differentiation Strategy: Understanding Value Drivers ▪ Product Features ▪ Customer Service ▪ Complements
o Cost-Leadership Strategy: Understanding Cost Drivers ▪ Cost of Input Factors ▪ Economies of Scale ▪ Learning Curve ▪ Experience Curve
o Business-Level Strategy and the Five Forces: Benefits and Risks ▪ Differentiation Strategy: Benefits and Risks ▪ Cost-Leadership Strategy: Benefits and Risks
o Blue Ocean Strategy: Combining Differentiation and Cost Leadership ▪ Value Innovation ▪ Blue Ocean Strategy Gone Bad: “Stuck in the Middle”
o Implications for the Strategist
• Learning Objectives: o Define business-level strategy and describe how it determines a firm’s strategic position. o Examine the relationship between value drivers and differentiation strategy. o Examine the relationship between cost drivers and the cost-leadership strategy. o Assess the benefits and risks of differentiation and cost-leadership strategies vis-à-vis the
five forces that shape competition.
o Evaluate value and cost drivers that may allow a firm to pursue a blue ocean strategy. o Assess the risks of a blue ocean strategy, and explain why it is difficult to succeed at
value innovation.
CHAPTER SEVEN: Business Strategy: Innovation and Entrepreneurship
9
• Chapter Outline: o Competition Driven by Innovation
▪ The Innovation Process o Strategic and Social Entrepreneurship o Innovation and the Industry Life Cycle
▪ Introduction Stage ▪ Growth Stage ▪ Shakeout Stage ▪ Maturity Stage ▪ Decline Stage ▪ Crossing the Chasm
o Types of Innovation ▪ Incremental vs. Radical Innovation ▪ Architectural vs. Disruption Innovation ▪ Open Innovation
o Implications for the Strategist
• Learning Objectives: o Outline the four-step innovation process from idea to imitation. o Apply strategic management concepts to entrepreneurship and innovation. o Describe the competitive implications of different stages in the industry life cycle. o Derive strategic implications of the crossing-the-chasm framework. o Categorize different types of innovations in the markets-and-technology framework. o Compare and contrast closed and open innovation.
CHAPTER EIGHT: Corporate Strategy: Vertical Integration and Diversification
• Chapter Outline: o What Is Corporate Strategy?
▪ Why Firms Need to Grow ▪ Three Dimensions of Corporate Strategy
o The Boundaries of the Firm ▪ Firms vs. Markets: Make or Buy? ▪ Alternatives on the Make-or-Buy Continuum
o Vertical Integration along the Industry Value Chain ▪ Types of Vertical Integration ▪ Benefits and Risks of Vertical Integration ▪ When Does Vertical Integration Make Sense? ▪ Alternatives to Vertical Integration
o Corporate Diversification: Expanding Beyond a Single Market ▪ Types of Corporate Diversification ▪ Leveraging Core Competencies for Corporate Diversification ▪ Corporate Diversification and Firm Performance
o Implications for the Strategist
• Learning Objectives: o Define corporate strategy and describe the three dimensions along which it is assessed. o Explain why firms need to grow, and evaluate different growth motives. o Describe and evaluate different options firms have to organize economic activity. o Describe the two types of vertical integration along the industry value chain: backward
and forward vertical integration.
o Identify and evaluate benefits and risks of vertical integration.
10
o Describe and examine alternatives to vertical integration. o Describe and evaluate different types of corporate diversification. o Apply the core competence-market matrix to derive different diversification strategies. o Explain when a diversification strategy creates a competitive advantage and when it does
not.
CHAPTER NINE: Corporate Strategy: Strategic Alliances and Mergers and Acquisitions
• Chapter Outline: o How Firms Achieve Growth
▪ The Build-Borrow-Buy Framework o Strategic Alliances
▪ Why Do Firms Enter Strategic Alliances? ▪ Governing Strategic Alliances ▪ Alliance Management Capability
o Mergers and Acquisitions ▪ Why Do Firms Merge with Competitors? ▪ Why Do Firms Acquire Other Firms? ▪ M&A and Competitive Advantage
o Implications for the Strategist
• Learning Objectives: o Apply the build-borrow-or-buy framework to guide corporate strategy. o Define strategic alliances, and explain why they are important to implement corporate
strategy and why firms enter into them.
o Describe three alliance governance mechanisms and evaluate their pros and cons. o Describe the three phases of alliance management and explain how an alliance
management capability can lead to a competitive advantage.
o Differentiate between mergers and acquisitions, and explain why firms would use either to execute corporate strategy.
o Define horizontal integration and evaluate the advantages and disadvantages of this option to execute corporate-level strategy.
o Explain why firms engage in acquisitions. o Evaluate whether mergers and acquisitions lead to competitive advantage.
CHAPTER TEN: Global Strategy: Competing Around the World
• Chapter Outline: o What is Globalization?
▪ Stages of Globalization ▪ State of Globalization
o Going Global: Why? ▪ Advantages of Going Global ▪ Disadvantages of Going Global
o Going Global: Where and How? ▪ Where in the World to Compete? The CAGE Distance Framework ▪ How Do MNEs Enter Foreign Markets?
o Cost Reductions vs. Local Responsiveness: The Integration-Responsiveness Framework ▪ International Strategy ▪ Multidomestic Strategy ▪ Global-Standardization Strategy
11
▪ Transnational Strategy o National Competitive Advantage: World Leadership in Specific Industries
▪ Porter’s Diamond Framework o Implications for the Strategist
• Learning Objectives: o Define globalization, multinational enterprise (MNE), foreign direct investment (FDI),
and global strategy.
o Explain why companies compete abroad, and evaluate the advantages and disadvantages of going global.
o Apply the CAGE distance framework to guide MNE decisions on which countries to enter.
o Compare and contrast the different options MNEs have to enter foreign markets. o Apply the integration-responsiveness framework to evaluate the four different strategies
MNEs can pursue when competing globally.
o Apply Porter’s diamond framework to explain why certain industries are more competitive in specific nations than in others.
TEXTBOOK — PART THREE: Implementation
CHAPTER ELEVEN: Organizational Design: Structure, Culture, and Control
• Chapter Outline: o Organizational Design and Competitive Advantage
▪ Organizational Inertia: The Failure of Established Firms ▪ Organizational Structure ▪ Mechanistic vs. Organic Organizations
o Strategy and Structure ▪ Simple Structure ▪ Functional Structure ▪ Multidivisional Structure ▪ Matrix Structure
o Organizational Culture: Values, Norms, and Artifacts ▪ Where Do Organizational Cultures Come From? ▪ How Does Organizational Culture Change? ▪ Organizational Culture and Competitive Advantage
o Strategic Control-and-Reward Systems ▪ Input Controls ▪ Output Controls
o Implications for the Strategist
• Learning Objectives: o Define organizational design and list its three components. o Explain how organizational inertia can lead established firms to failure. o Define organizational structure and describe its four elements. o Compare and contrast mechanistic versus organic organizations. o Describe different organizational structures and match them with appropriate strategies. o Describe the elements of organizational culture, and explain where organizational
cultures can come from and how they can be changed.
o Compare and contrast different strategic control-and-reward systems.
CHAPTER TWELVE: Corporate Governance and Business Ethics
12
• Chapter Outline: o The Shared Value Creation Framework
▪ Public Stock Companies and Shareholder Capitalism ▪ Creating Shared Value
o Corporate Governance ▪ Agency Theory ▪ The Board of Directors ▪ Other Governance Mechanisms
o Strategy and Business Ethics o Implications for the Strategist
• Learning Objectives: o Describe the shared value creation framework and its relationship to competitive
advantage.
o Explain the role of corporate governance. o Apply agency theory to explain why and how companies use governance mechanisms to
align interests of principals and agents.
o Evaluate the board of directors as the central governance mechanism for public stock companies.
o Evaluate other governance mechanisms. o Explain the relationship between strategy and business ethics.