Preface to the 7th Edition

I wrote Contemporary Strategy Analysis to equip managers and students of management with the concepts, frameworks and techniques needed to make better strategic decisions. I wanted a strategy text that would reﬂect the dynamism and intellectual rigor of this fast-developing ﬁeld of management. At that time, the existing texts failed to incorporate either the enormous advances taking place in strategy research or the strategic management practices of leading-edge companies.

The result is a strategy text that endeavors to be both relevant and rigorous. While embodying the latest thinking in the strategy ﬁeld, Contemporary Strategy Analysis aims to be accessible to students from different backgrounds and with varying levels of experience. I achieve this accessibility by combining concentration on the fundamentals of value creation with clarity of exposition and an emphasis on practicality.

These same objectives are unchanged in this seventh edition of Contemporary Strategy Analysis. My approach is simultaneously analytical and practical. If strategic management is all about managing to achieve outstanding success then the essential tasks of strategy are to identify the sources of superior business performance and to formulate and implement a strategy that exploits these sources of superior performance.

The seventh edition also reﬂects the developments that have occurred since 2007 both in the business environment and in strategy analysis. With regard to the former, the dominant feature is the global recession that followed the ﬁnancial crisis of 2008–9. I view this ﬁnancial crisis less as an isolated event than one in a series of shocks that have afﬂicted the twenty-ﬁrst century business environment. Looking ahead, I anticipate that turbulence, unpredictability, and intense competition will continue to dominate the global business environment.

The principal implications I draw are, ﬁrst, that strategy will become increasingly important to ﬁrms as they navigate a challenging and unpredictable business environment and, second, that a determined focus on the fundamentals of value creation will be critical to ﬁrm survival and prosperity. Despite the reaction against shareholder value maximization for its inducement to short-termism and crass materialism, strategy analysis must focus on the pursuit of long-run proﬁtability. This requires a penetrating understanding of customer needs, competitive forces and the ﬁrm’s strengths and weaknesses.
Achieving proﬁtability in the face of intense competition means that competitive advantage must be the central focus of strategy. This new edition places a stronger emphasis on the primary sources of competitive advantage: the resources and capabilities of the enterprise.

This edition also places a greater emphasis on strategy implementation. Establishing competitive advantage in a complex and unpredictable business environment requires that ﬁrms reconcile scale economies with entrepreneurial ﬂexibility, innovation with cost efﬁciency and globalization with local responsiveness.

This creates new challenges for the design of organizational structures and management systems. At the same time I have maintained an integrated approach to strategy formulation and strategy implementation recognizing their codependence. A strategy that is formulated without regard to its implementation is likely to be fatally ﬂawed. It is through the process of implementation that strategies adapt and emerge.

As well as emphasizing the fundamentals of strategy analysis, I draw upon promising new approaches to strategy analysis including the role of complementarity, the use of real options to analyze ﬂexibility, the nature of complexity and the potential for self-organization, and the role of legitimacy and its relevance to corporate social responsibility.

There is very little in this book that is original—I have plundered mercilessly the ideas, theories and evidence of fellow scholars. My greatest debts are to my colleagues and students at the business schools where this book has been developed and tested—notably Georgetown University and Bocconi University. This edition has also beneﬁtted from feedback and suggestions from professors and students in other schools where Contemporary Strategy Analysis is used. I am particularly grateful to Andrew Campbell for assisting with Chapters 16 and 17. With the enhanced Web-based support being provided by the publisher, I look forward to closer interaction with users.

The success of Contemporary Strategy Analysis owes much to the professionalism and enthusiasm of the editorial, production and sales and marketing teams at John Wiley & Sons and Blackwell Publishers. I am especially grateful to Steve Hardman, Deborah Egleton, Catriona King and Rosemary Nixon.

Robert M. Grant
London