7th Edition Student & Teaching Resources

Chapter 1
The Concept of Strategy

John Kay, “The Structure of Strategy,” Business Strategy Review, Volume 4 Issue 2, 1993, pp. 17 - 37
John Kay, a leading UK economist and new columnist for the Financial Times applies his characteristic incisive thinking to the question of “What is strategy?” He argues that corporate success derives from a competitive advantage which is based on distinctive capabilities. These in turn are derived from the unique character of a firm's relationships with its suppliers, customers, or employees. Strategy is the process through which these capabilities are applied to relevant markets.

  • Henry Mintzberg and James A. Waters, “Of Strategies, Deliberate and Emergent,” Strategic Management Journal, Vol. 6, No. 3 (Jul. - Sep., 1985), pp. 257-272.

    The paper distinguishes between intended, deliberate, and emergent strategies within the context of strategy making and strategy evolution in a sample of 11 different organizations.

  • Aneel Karnani, “Controversy: The Essence of Strategy,” Business Strategy Review, Volume 19 Issue 4, 2008, pp. 28 – 34.
    The essence of strategy is to make controversial choices in order to gain a competitive advantage, but difficult choices often engender opposing views. Aneel Karnani, Professor of Strategy at the University of Michigan, presents a process for strategy development that can help managers surface, manage and resolve conflict, thus resulting in more effective strategic choices.

  • George Yip and  Gerry Johnson, “Transforming Strategy,” Business Strategy Review, Volume 18 Issue, 2007, pp. 11 – 15.
    George Yip and  Gerry Johnson outline the basic requirements for a strategy to yield superior performance to a company.

Chapter 2
Goals, Values, and Performance

  • John Browne, “Making Sense of Big Business,” Business Strategy Review, Volume 17 Issue 3, 2006, pp. 52 - 56
    John Browne, c hief executive of BP plc, considers the question: “What is the purpose of business?”

  • N. Craig Smith and Halina Ward, “Corporate Social Responsibility at a Crossroads?” Business Strategy Review, Volume 18 Issue 1, 2007, pp. 16 – 21
    Craig Smith and Halina Ward draw upon a survey of senior managers across industry to identify what companies believe CSR to be, how it relates to the goals and purpose of their businesses, and how it is likely to develop in the period to 2015.

  • Juan Luis Martinez and María Carbonell, “Value at the Bottom of the Pyramid,” Business Strategy Review, Volume 18 Issue 3, 2007, pp. 50 – 55.
    Juan Luis Martinez 1 and María Carbonell  of Instituto de Empresa Business School in Madrid identify the opportunities for doing business with low-income consumers and provide a model for combining the quest for profit with corporate social responsibility.

  • Stuart Crainer, “Interview: Keeping Score,” Business Strategy Review, Volume 17 Issue 3, 2006, pp. 44 – 50.
    This interview with David Norton, the co-creator of the Balanced Scorecard, discusses the challenge of performance measurement and the role that the balances scorecard can play in setting performance targets and monitoring their achievement.

Chapter 3
Industry Analysis: The Fundamentals

To gain practice at applying industry analysis to understand the structural forces causing industries to be either profitable or unprofitable, it is useful to look at industries that are in the news and consider the factors that are either depressing or boosting profitability.

Oil Refining
As evidence on in BP’s Statistical Yearbook shows  (P. 19) US refining margins have been on a roller coaster, spiking in 2007, then collapsing during 2008 and 2009 (go to http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622).  The long term situation is that the industry has experienced low profitability. The five forces framework can be deployed to understand both the long-term situation of low profitability, and the short term fluctuations in margins.  The following articles describe the recent industry situation.

Funerals Industry
In most countries, the funerals industry—including both the hardware side of the business (caskets, headstones, burial plots) and the service side (burial and cremation services) is fragmented yet has many attractive features. A five forces analysis is useful for evaluating the profit potential of the industry, it can also point to the opportunities for structural change in the industry (including within local markets) that can increase its attractiveness.

DRAM Chips
DRAM chips are the leading commodity product of the semiconductor industry used in computers and a wide variety of electronic products. Their prices are notoriously volatile—as are the profits of the firms that produce them. The industry offers an interesting combination of structural factures that explain the volatility of process and profits: lack of product differentiation, many producers, cyclical demand, and a high ratio of fixed to variable costs, and a “hog cycle” pattern of capital investments where high procures encourage overinvestment in new plants (“fabs”).

  • “DRAMs: Historically, how bad is this downturn?” The Denali Memory Report, March 31, 2009 (http://www.denali.com/wordpress/index.php/dmr/2009/03/31/drams_historically_how_bad_is_this_downt_1)
  • “The Downs (and Ups) of the DRAM Market,” Business Week, April 19, 2006 (http://www.businessweek.com/technology/content/apr2006/tc20060419_908183.htm)

Chapter 4
Further Topics in Industry and Competitive Analysis

  • Sumantra Ghoshal and D. Eleanor Westney, “Organizing Competitor Analysis Systems,” Strategic Management Journal, Vol. 12, No. 1 (Jan., 1991), pp. 17-31.
    The paper provides an in-depth view of how competitor analysis is undertake within three large corporations.  

Chapter 05
Analyzing Resources and Capabilities
FURTHER READING

The articles listed below are intended to deepen your understanding of the concepts and analytical tools covered by the chapter though elaborating and developing these concepts and tools and by showing how these ideas can help us to understand the why some firms have been able to build powerful positions of competitive advantage.

  • M. A. Peterlaf, “The Cornerstones of Competitive Advantage: A Resource‐Based View,” Strategic Management Journal, Vol. 14 (1993): pp. 179–92.
    Marjorie Peteraf offers a classic exposition of the Resource‐based View of the Firm (“RBV”) which outlines how a firm’s resources and capabilities provide the foundation of competitive advantage.

  • Gary R Fane, M. Reza Vaghefi, Cheryl Van Deusen and Louis A Woods, “Competitive Advantage the Toyota Way,” Business Strategy Review, Vol. 14, Issue 4, 2003, pp. 51 – 60.
    During the past 40 years, Toyota has from being a medium‐sized Japanese auto producer to the world’s biggest and most successful volume car manufacturers. Its success has been rooted in the development and deployment of a set of powerful resources and capabilities.

  • M. Reza Vaghefi, Cheryl Van Deusen, Louis A. Woods, “Motor Drive,” Business Strategy Review, Vol. 18, No. 3, Autumn 2007, pp. 28‐32.
    While Toyota has experienced near continuous global expansion, General Motors has been in long term decline, and entered chapter 11 bankruptcy in June 2009. The contrasting fortunes of these two giants of the auto industry points to the critical importance of aligning resources and capabilities with industry Key Success Factors.

  • Donald Sull and Stefano Turconi, “Fast fashion lessons,” Business Strategy Review, Vol. 19 Issue 2, 2008, pp. 4 – 11.
    An important implication of the a resource‐based approach to strategy is that the essence of a successful strategy is being different: exploiting one’s uniqueness to develop competitive advantage. Often this will mean rejecting the conventional wisdom of the industry. Zara, the fashion brand of Spanish apparel maker, Inditex is just such a company. In an industry where the conventional wisdom dictates that fashion clothing firms should outsource to contract manufacturers in low‐wage countries, Zara pursues a vertically‐integrated strategy. Zara has adopted a unique approach to building competitive advantage in a market where customer preferences shift quickly, where product lifecycles are measured in weeks, and product value plummets if you miss the latest trend. Welcome to the world of fast fashion.

  • Stefan Szymanski, “Why is Manchester United so Successful?” Business Strategy Review, Vol. 9, Issue 4, 1998, pp. 47–54.
    Profession sports provide a fascinating arena for studying the relationship between resources, capabilities and performance. Stefan Szymanski’s outline of the history of Britain’s most financially successful football club points to the key role of brand image in providing the basis for financial success which in turn provides the financial resources for acquiring top players. However, this account leaves open the issue of the role of the manager and the other determinants of team‐based playing capabilities.

  • Tony Cockerill, “Ryder Cup: Lessons in Team Play” Business Strategy Review, Vol. 15, Issue 4, Date: December 2004, pp. 66‐72.
    The linkage between resources and capabilities is one of the most important aspects of the analysis of resources and capabilities. The fact that the teams comprised of the best players do not always win is one of the most fascinating aspects of team sport. Even though golf is a highly individual game (compared to soccer or ice hockey), the results for the Ryder Cup clearly show that the quality of team members is only one factor in determining team capability.

  • Stuart Crainer, “From Edison to Immelt: The GE Way,” Business Strategy Review, Vol. 20, Issue 3, 2009, pp. 18‐22
    Identifying the resources and capabilities that underpin the competitive advantage of specialized companies such as Starbucks, Intel, Toyota, or McDonalds is relatively easy. Widely diversified companies offer a more complex challenge. General Electric is one of the most successful corporations of the 20th century. During the 21st century it has faced major challenges—notably the financial crisis of 2008‐9. Nevertheless, its continues to be one of the world’s leading companies in terms of both revenues and market value. But what makes the giant tick? What is it about its management capabilities that have allowed it to survive when most other US‐based conglomerates have been broken up?

Chapter 6
Capability Development and Knowledge Management

  • David J. Teece, Gary Pisano and Amy Shuen, “Dynamic Capabilities and Strategic Management,” Strategic Management Journal, Vol. 18, No. 7 (Aug., 1997), pp. 509-533

    This highly influential launched the concept of dynamic capabilities. While capabilities have conventionally been viewed as a source of inertia (see Leonard Barton article above), Teece et al argue that some capabilities allow the firm to change and evolve.

Chapter 7
Organization Structure and Management Systems:
The Fundamentals of Strategy Implementation

  • Ron  Sanchez and  Joe T Mahoney, “Modularity, Flexibility, and Knowledge Management in Product and Organization Design,” Strategic Management Journal, 1996  Vol. 17 (Winter Special Issue, 1996): 63-76.
    Sanchez and Mahoney argue for the efficacy of modular designs both in products and organization. Separate modules linked by standardized interfaces represent systems of “embedded coordination” that  permits decentralized adaptation without the need for extensive communication and coordination.

  • Andrew Likierman, “Successful Leadership — How Would You Know?” Business Strategy Review, Volume 20 Issue 1, 2009, pp. 44 – 49.
    Boardrooms and business school classrooms are equally preoccupied with leadership, and success is often assumed to be about profit or Total Shareholder Return. It's neither. For leaders wanting to measure their own success, for those who appoint leaders to know what they are aiming at and for outsiders assessing the quality of leadership, Andrew Likierman, Dean  of London Business School and director of Barclays plc,  shows how to do it.

Chapter 8
The Nature and Sources of Competitive Advantage

  • Julian Birkinshaw 1 and Jules Goddard, “The Management Spectrum,” Business Strategy Review, Volume 20 Issue 4, 2009, pp 30 – 35.

    While leadership dominates the attention of many, it is management that drives the work at hand. Julian Birkinshaw and Jules Goddard suggest that you reconsider the management model you practice daily to see if it's really working inside your company

Chapter 9
Cost Advantage

  • “Whirlpool Cleans Up Its Supply Chain” Interactive Case Study, Business Week,  October 24, 2008. http://www.businessweek.com/managing/content/oct2008/ca20081024_801808.htm

    This interactive case study from Business Week includes online text plus video commentary from Brian Hancock, Whirlpool’s VP of Supply Chain Management. The case addresses the challenges that Whirlpool faced in achieving cost reduction through the integration of the supply chain of Maytag—an appliance maker it acquired in 2005—with its own.

Chapter 10
Differentiation Advantage

  • “FreshDirect Focuses on Customer Service,” Interactive Case Study, Business Week,  July 1, 2009. http://www.businessweek.com/managing/content/jun2009/ca20090630_154481.htm

    In this online article and video presentation from CEO,Richard Braddock (formerly the CEO of Priceline, the strategy of online grocer FreshDirect is outlined. Braddock explains how FreshDirect has differentiated its offering in order to provide a superior service offering to consumers. The video explains how FreshDirect has linked its services in order to match the consumer value chain in terms of the activities involved both in online ordering, receiving produce, and the whole cooking experience. Braddock also points to the competitive advantages that FreshDirect has established that are difficult for competitors to imitate. The presentation is followed by a case analysis:  “FreshDirect Capitalizes on the Downturn” by Russ Winer, chairman of the marketing department at New York University's Stern School of Business.

Chapter 11
Industry Evolution and Strategic Change

  • Herbert A. Simon, “Strategy and Organizational Evolution,” Strategic Management Journal, Vol. 14, Special Issue: Organizations, Decision Making and Strategy (Winter, 1993), pp. 131-142
    Herbert Simon argues that a firm can expect to sustain  competitive advantage within its market niche for a period of less than one decade. Hence, strategic planning must assure a stream of new ideas that allow the firm to find new sources of advantage. Strategic planning must focus attention on identifying opportunities for new products and developing new businesses.  Idea generation is a crucial component of strategy. Strategic thinking must permeate the entire organization.

  • Robert Simons, “How New Top Managers Use Control Systems as Levers of Strategic Renewal,” Strategic Management Journal, Vol. 15, No. 3 (Mar. 1994), pp. 169-189.
    The paper examines how newly appointed top managers use corporate control systems as tools for initiated corporate change.
     
  • John Mullins, “Launching a New Venture,” Business Strategy Review, Volume 20 Issue 2, Pages 46 - 49
    With the current economic storm raging, can a better understanding of business models make for smoother sailing for today's entrepreneur? What strategies can entrepreneurs adopt to help them weather this storm? John Mullins has researched entrepreneurial ventures and offers some valuable insights.

Chapter 12
Technology-based Industries & the Management of Innovation

  • Julian Birkinshaw 1 and Stuart Crainer, “Combine harvesting,” Business Strategy Review, Volume 20 Issue 4, 2009, pp. 20 – 23.

     Mix the wisdom of internal and external networks and you might just come up with brilliant and unexpected solutions to apparently intractable problems. Julian Birkinshaw and Stuart Crainer report on how Roche Diagnostics is exploring an experimental approach to harvesting bright ideas.

  • “Strategy & Competition: IBM May Not Be the Patent King After All,” Business Week, January 13, 2010 (http://www.businessweek.com/magazine/content/10_04/b4164051608050.htm)

    Business Week reviews the 2009 ranking of innovative companies in terms numbers of patents issued, but also offers an alternative ranking based upon the value of firms’ intellectual property.

Chapter 13
Competitive Advantage in Mature Industries

  • “Premium Efforts Needed at Hanover,” Interactive Case Study, Business Week, December 18, 2009. http://www.businessweek.com/managing/content/dec2009/ca20091218_256387.htm
    When Fred Eppinger joined Hanover Insurance Group (THG) as CEO back in 2003, the company was close to bankruptcy. This online article and video presentation by Eppinger outlines his strategy of turnaround and illustrates a number of the points made in Chapter 13 concerning competitive advantage and segment and customer selection in mature industries.  The case presentation is followed up by an analysis of the situation: “A Healthy Hanover Moves Ahead.”

Chapter 14
Vertical Integration and the Scope of the Firm

You think your industry is tough? Imagine customer preferences that can shift literally overnight, product lifecycles measured in weeks, and the value of your product plummeting if you miss the latest trend. Welcome to the world of fast fashion. Don Sull and Stefano Turconi examine how Zara, a leader in the industry, has pioneered an approach to navigate the volatility of fast fashion, offering lessons for any company facing rapidly changing markets.

Chapter 15
 Global Strategies and the Multinational Corporation

  • Andreas Birnik  and Richard Moat, “Mapping Multinational Operations,” Business Strategy Review, Volume 20 Issue 1, 2009, pp. 30 - 33
    Andreas Birnik and Richard Moat assert that multinational firms need to develop an operating model at the activity level. By doing so, managers can identify inconsistencies and develop coherent operations across local subsidiaries, the corporate centre and outsourcing partners.

  • Gary Hamel, “Competition for Competence and Inter-Partner Learning Within International Strategic Alliances,” Strategic Management Journal, Vol. 12, Special Issue: Global Strategy (Summer, 1991), pp. 83-103.
    Hamel’s study of international strategic alliances reveals  collaborations between firms with complementary resources and capabilities. The alliances were destabilized by the near constant quest of each partner to access and acquire the capabilities of the other.

  • Steve Tappin and Andrew Cave, “Hard Globalization,” Business Strategy Review, Volume 20 Issue 1, 2009, pp. 34 – 37.
    Many companies aspire to be players in the global marketplace, but the challenges to succeed are now greater than ever. Steve Tappin and Andrew Cave are  authors of The Secrets of CEOs: 150 Global Chief Executives Lift the Lid on Business, Life and Leadership. They  spoke with the CEOs of strongly globalized companies to learn their secrets.

Chapter 16
Diversification Strategy

  • “Monsanto: Seeding the Ground for Growth,” Interactive Case Study, Business Week,  July 29, 2008. http://www.businessweek.com/managing/content/jul2008/ca20080729_437330.htm
    When Hugh Grant became CEO of Monsanto, the company was an underperforming chemicals company. The new strategy was to diversify into seeds and biotechnology. This online article and accompanying video recounts Monsanto’s exit from several of its traditional chemical businesses and its entry into seeds using biotechnology to create new genetically modified strains of seed.  Grant outlines how the top management team implemented this transition—including the processes for strategy making and strategy review. The analysis that follows the case presentations features Ed Lawler, Professor of Management and Organizational Behavior at the University of Southern California .

Chapter 17
Implementing Corporate Strategy: Managing the Multibusiness Company

  • Stuart Crainer , “From Edison To Immelt: The GE Way,” Business Strategy Review, Volume 20 Issue 3, 2009, pp. 18 – 22.
    General Electric is one of the great corporations of our times. While others fall by the wayside, it has forged a uniquely strong corporate trajectory over more than a century. But what makes the giant tick? How has GE outlasted the competition and does it have the strength and sense of purpose to carry on? Stuart Crainer explores the GE way
    .
  • Freek Vermeulen, “Songs of the Sirens,” Business Strategy Review, Volume 19 Issue 3, 2008, pp. 22 – 27.
    Some companies think that mergers or acquisitions can put them on the path to greater success. Freek Vermeulen, Professor of Strategic and International Management at London Business School, points out the warning signs along the path that show when a deal is not a good deal.

  • Andrew Kakabadse and Nada Kakabadse, “The Return of the Chairman,” Business Strategy Review, Volume 18 Issue 4, 2007, pp. 62 – 65.
    After the corporate scandals of the last few years and tightened corporate governance, the role of the chairman is set to become ever more important. Andrew and Nada Kakabadse, authors of Leading the Board, chart the return of the chairman.

Chapter 18
Current Trends in Strategic Management?

  • John Connolly, “Positioning for the Future,” Business Strategy Review, Volume 20 Issue 3, 2009, pp. 30 – 34.
    The next two years is a make or break period for companies, and the way business leaders respond will determine winners and losers for the next decade. Deloitte's UK Chief Executive and Global Chairman, John Connolly, explains how.

  • Don Sull, “The Only Way is Up,” Business Strategy Review, Volume 20 Issue 3, 2009, pp. 64 – 69.
    Just because the world is in a business downturn, it doesn't mean that you and your business can't be up about your future prospects. Don Sull has specialized on the upside of turbulence.

  • Srinivas Koushik, Julian Birkinshaw and Stuart Crainer , “Using Web 2.0 to Create Management 2.0,” Business Strategy Review, Volume 20 Issue 2, 2009, pp. 20 - 23
    The latest technology is increasingly utilized as a means of reinventing management. Srinivas Koushik, CIO of the Nationwide Property and Casualty Company, is one of those leading the way. Julian Birkinshaw and Stuart Crainer report his approach.