1- What do we mean by strategic leadership? Please discuss the role of strategic leaders in business

  

1- What do we mean by strategic leadership? Please discuss the role of strategic leaders in business organizations.2- What do you think are the sources of sustained superior profitability?3- What are the strengths of formal strategic planning? What are its weaknesses? In what situations is top-down planning likely to be superior to bottom-up emergent strategy development?4- Discuss the sources of cognitive biases in strategic information processing and decision making. Can you think of an example in your own life where cognitive biases resulted in you making a poor decision? How might that mistake have been avoided?5- Choose a (single) business of interest to you and discuss the competitive forces model with reference to the industry. What does the model tell you about the level of competition in the industry?6- Assess the impact of macroenvironmental factors on the likely level of enrollment at your university over the next decade. What are your suggestions for the strategic leaders leading the university in response to the macroenvironmental changes?7- Discuss the concept of “Resource Based View (RBV) of the firm”. In elaborating the concept of RBV, focus on the relationships among these variables: firm resource, firm capability, competitive advantage, core competence, and firm strategy. Why is it important to study the internal resources, capabilities, and competitive advantages of firms? What insights can be gained?8- Apply the VRIO framework to Uber and describe to what extent these resources can be considered valuable, rare, inimitable, and well organized. What must Uber do to maintain its competitive advantage going forward in the increasingly competitive industries such as taxi hailing and food delivery businesses?9- What role can top management play in helping a company achieve superior efficiency, quality, innovation, and responsiveness to customers?10- What is the relationship between innovation and competitive advantage?11- What are the main differences between a low-cost strategy and a differentiation strategy?12 How can a business-level strategy of (a) low cost and (b) differentiation offer some protection against competitive forces in a company’s industry?13- What is required to transform a business-level strategy from a concept to a reality?Each question is one page double spacedit all should be in your words. no citations. i have attached a copy of the the book.Thanks
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MGMT 497 Strategic Management
Exam 1 Review
11- July TH
Exam 1
(Exam time 6:00 – 8:30 p.m.)
1. What do we mean by strategic leadership? Please discuss the role of strategic leaders in business
organizations.
2. What do you think are the sources of sustained superior profitability?
3. What are the strengths of formal strategic planning? What are its weaknesses? In what
situations is top-down planning likely to be superior to bottom-up emergent strategy
development?
4. Discuss the sources of cognitive biases in strategic information processing and decision making.
Can you think of an example in your own life where cognitive biases resulted in you making a
poor decision? How might that mistake have been avoided?
5. Choose a (single) business of interest to you and discuss the competitive forces model with
reference to the industry. What does the model tell you about the level of competition in the
industry?
6. Assess the impact of macroenvironmental factors on the likely level of enrollment at your
university over the next decade. What are your suggestions for the strategic leaders leading the
university in response to the macroenvironmental changes?
7. Discuss the concept of “Resource Based View (RBV) of the firm”. In elaborating the concept of
RBV, focus on the relationships among these variables: firm resource, firm capability,
competitive advantage, core competence, and firm strategy. Why is it important to study the
internal resources, capabilities, and competitive advantages of firms? What insights can be
gained?
8. Apply the VRIO framework to Uber and describe to what extent these resources can be
considered valuable, rare, inimitable, and well organized. What must Uber do to maintain its
competitive advantage going forward in the increasingly competitive industries such as taxi
hailing and food delivery businesses?
9. What role can top management play in helping a company achieve superior efficiency, quality,
innovation, and responsiveness to customers?
10. What is the relationship between innovation and competitive advantage?
11. What are the main differences between a low-cost strategy and a differentiation strategy?
12. How can a business-level strategy of (a) low cost and (b) differentiation offer some protection
against competitive forces in a company’s industry?
13. What is required to transform a business-level strategy from a concept to a reality?
11TH EDITION
STRATEGIC MANAGEMENT
THEORY
11TH EDITION
Strategic Management
THEORY
Charles W. L. Hill
University of Washington – Foster School of Business
Gareth R. Jones
Melissa A. Schilling
New York University – Stern School of Business
Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States
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Strategic Management: Theory, 11e
2015, 2013 Cengage Learning
Charles W. L. Hill
Gareth R. Jones
Melissa A. Schilling
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Brief Contents
PART ONE  INTRODUCTION TO STRATEGIC MANAGEMENT
1
2
Strategic Leadership: Managing the Strategy-Making Process
for Competitive Advantage
External Analysis: The Identification of Opportunities and Threats
1
43
PART TWO  THE NATURE OF COMPETITIVE ADVANTAGE
3
4
Internal Analysis: Distinctive Competencies, Competitive Advantage,
and Profitability
Building Competitive Advantage Through Functional-Level Strategies
80
116
PART THREE  STRATEGIES
5
6
7
8
9
10
Business-Level Strategy
Business-Level Strategy and the Industry Environment
Strategy and Technology
Strategy in the Global Environment
Corporate-Level Strategy: Horizontal Integration, Vertical Integration,
and Strategic Outsourcing
Corporate-Level Strategy: Related and Unrelated Diversification
153
178
210
246
286
318
PART FOUR  IMPLEMENTING STRATEGY
11
12
13
Corporate Performance, Governance, and Business Ethics
Implementing Strategy in Companies That Compete in a Single Industry
Implementing Strategy in Companies That Compete Across Industries
and Countries
Glossary
Index
359
395
439
G-1
I-1
v
Contents
Preface xix
Acknowledgements xxiii
Dedication xxvii
PART one INTRODUCTION TO STRATEGIC MANAGEMENT
Chapter 1
trategic Leadership: Managing the Strategy-Making
S
Process for Competitive Advantage
Opening Case 1
Overview 3
Strategic Leadership, Competitive Advantage, and Superior
Performance 4
Superior Performance 5
Competitive Advantage and a Company’s Business Model
Industry Differences in Performance 7
Performance in Nonprofit Enterprises 8
Strategic Managers 9
Corporate-Level Managers 10
Business-Level Managers 10
Functional-Level Managers 11
The Strategy-Making Process 11
A Model of the Strategic Planning Process 11
Mission Statement 12
Major Goals 16
External Analysis 17
Internal Analysis 17
SWOT Analysis and the Business Model 17
1
6
Strategy in Action 1.1: Strategic Analysis at Time Inc. 18
Strategy Implementation 19
The Feedback Loop 20
Strategy as an Emergent Process 20
Strategy Making in an Unpredictable World 20
Autonomous Action: Strategy Making by Lower-Level
Managers 21
Strategy in Action 1.2: Starbucks’ Music Business
Serendipity and Strategy 22
Intended and Emergent Strategies 22
21
vii
viii
Contents
Strategy in Action 1.3: A Strategic Shift at Charles Schwab
Strategic Planning in Practice 25
Scenario Planning 25
Decentralized Planning 26
Strategic Decision Making 27
Cognitive Biases and Strategic Decision Making 27
Techniques for Improving Decision Making 29
Strategic Leadership 29
Vision, Eloquence, and Consistency 30
Articulation of the Business Model 30
Commitment 30
Being Well Informed 31
Willingness to Delegate and Empower 31
The Astute Use of Power 32
Emotional Intelligence 32
Chapter 2
23
xternal Analysis: The Identification of Opportunities
E
and Threats
Opening Case 43
Overview 44
Defining an Industry 45
Industry and Sector 46
Industry and Market Segments 47
Changing Industry Boundaries 47
Competitive Forces Model 47
Risk of Entry by Potential Competitors 48
Rivalry Among Established Companies 50
Strategy in Action 2.1: Circumventing Entry Barriers
into the Soft Drink Industry 51
Strategy in Action 2.2: Price Wars in the Breakfast
Cereal Industry 53
The Bargaining Power of Buyers 55
The Bargaining Power of Suppliers 56
Substitute Products 58
Complementors 58
Summary: Why Industry Analysis Matters 59
Strategic Groups Within Industries 60
Implications of Strategic Groups 61
The Role of Mobility Barriers 62
Industry Life-Cycle Analysis 63
Embryonic Industries 63
Growth Industries 64
Industry Shakeout 64
Mature Industries 65
Declining Industries 66
Summary 66
43
Contents
Limitations of Models for Industry Analysis
Life-Cycle Issues 67
Innovation and Change 67
Company Differences 69
The Macroenvironment 69
Macroeconomic Forces 69
Global Forces 71
Technological Forces 71
Demographic Forces 72
Social Forces 72
Political and Legal Forces 72
67
PART two THE NATURE OF COMPETITIVE ADVANTAGE
Chapter 3 Internal Analysis: Distinctive Competencies,
Competitive Advantage, and Profitability
Opening Case 80
Overview 82
The Roots of Competitive Advantage 82
Distinctive Competencies 83
Competitive Advantage, Value Creation, and
Profitability 85
The Value Chain 89
Primary Activities 89
Strategy in Action 3.1: Value Creation at Burberry
Support Activities 91
91
Strategy in Action 3.2: Competitive Advantage at Zara 92
The Building Blocks of Competitive Advantage 93
Efficiency 93
Quality as Excellence and Reliability 94
Innovation 96
Customer Responsiveness 96
Business Models, the Value Chain, and Generic Distinctive
Competencies 97
Analyzing Competitive Advantage and Profitability 98
The Durability of Competitive Advantage 103
Barriers to Imitation 103
Capability of Competitors 105
Industry Dynamism 106
Summary 106
Avoiding Failure and Sustaining Competitive
Advantage 106
Why Companies Fail 106
Steps to Avoid Failure 108
Strategy in Action 3.3: The Road to Ruin at DEC 109
80
ix
x
Contents
Chapter 4
uilding Competitive Advantage Through
B
Functional-Level Strategies
116
Opening Case 116
Overview 117
Achieving Superior Efficiency 119
Efficiency and Economies of Scale 119
Efficiency and Learning Effects 120
Strategy in Action 4.1: Learning Effects in Cardiac Surgery
Efficiency and the Experience Curve 122
Efficiency, Flexible Production Systems, and Mass
Customization 124
Marketing and Efficiency 125
122
Strategy in Action 4.2: Pandora: Mass Customizing
Internet Radio 126
Materials Management, Just-in-Time Systems,
and Efficiency 128
R&D Strategy and Efficiency 129
Human Resource Strategy and Efficiency 129
Information Systems and Efficiency 132
Infrastructure and Efficiency 132
Summary 133
Achieving Superior Quality 134
Attaining Superior Reliability 134
Strategy in Action 4.3: General Electric’s Six Sigma Quality
Improvement Process 135
Implementing Reliability Improvement Methodologies 136
Improving Quality as Excellence 138
Achieving Superior Innovation 139
The High Failure Rate of Innovation 140
Reducing Innovation Failures 141
Strategy in Action 4.4: Corning—learning from Innovation
Failures 142
Achieving Superior Responsiveness to Customers 144
Focusing on the Customer 144
Satisfying Customer Needs 145
PART Three
Chapter 5
STRATEGIES
Business-Level Strategy
Opening Case 153
Overview 154
Low Cost and Differentiation
Lowering Costs 155
153
155
Contents
Strategy in Action 5.1: Low Costs at Southwest Airlines 156
Who are Our Customers? Market Segmentation 161
Business-Level Strategy Choices 164
Business-Level Strategy, Industry and Competitive Advantage 166
Strategy in Action 5.2: Microsoft Office versus Google Apps
Implementing Business-Level Strategy 168
Competing Differently: Searching for a Blue Ocean 171
Chapter 6
Business-Level Strategy and the Industry
Environment
167
178
Opening Case 178
Overview 179
Strategy in a Fragmented Industry 180
Reasons for Fragmentation 180
Consolidating a Fragmented Industry Through Value
Innovation 181
Chaining and Franchising 182
Horizontal Mergers 183
Strategies in Embryonic and Growth Industries 184
The Changing Nature of Market Demand 185
Strategic Implications: Crossing the Chasm 188
Strategy in Action 6.1: Crossing the Chasm in the
Smartphone Market 189
Strategic Implications of Differences in Market
Growth Rates 190
Strategy in Mature Industries 191
Strategies to Deter Entry 192
Strategies to Manage Rivalry 194
Strategy in Action 6.2: Toyota Uses Market Development
to Become the Global Leader 198
Strategy in Action 6.3: Non-Price Competition at Nike
Strategies in Declining Industries 201
The Severity of Decline 201
Choosing a Strategy 202
Chapter 7
199
Strategy and Technology
Opening Case 210
Overview 211
Technical Standards and Format Wars
210
213
Strategy in Action 7.1: “Segment Zero”—A Serious Threat
to Microsoft? 213
Examples of Standards 216
Benefits of Standards 217
xi
xii
Contents
Establishment of Standards 218
Network Effects, Positive Feedback, and Lockout
Strategies for Winning a Format War 222
Ensure a Supply of Complements 222
Leverage Killer Applications 222
Aggressive Pricing and Marketing 223
Cooperate with Competitors 223
License the Format 224
Costs in High-Technology Industries 224
Comparative Cost Economics 225
Strategic Significance 226
219
Strategy in Action 7.2: Lowering the Cost of Ultrasound
Equipment Through Digitalization 227
Capturing First-Mover Advantages 227
First-Mover Advantages 229
First-Mover Disadvantages 229
Strategies for Exploiting First-Mover Advantages 230
Technological Paradigm Shifts 233
Paradigm Shifts and the Decline of Established
Companies 234
Strategy in Action 7.3: Disruptive Technology in Mechanical
Excavators 238
Strategic Implications for Established Companies 238
Strategic Implications for New Entrants 240
Chapter 8
Strategy in the Global Environment
Opening Case 246
Overview 247
The Global and National Environments 248
The Globalization of Production and Markets 248
National Competitive Advantage 250
Increasing Profitability and Profit Growth Through Global
Expansion 253
Expanding the Market: Leveraging Products 253
Realizing Cost Economies from Global Volume 255
Realizing Location Economies 256
Leveraging the Skills of Global Subsidiaries 257
Cost Pressures and Pressures for Local Responsiveness 258
Pressures for Cost Reductions 259
Pressures for Local Responsiveness 259
Strategy in Action 8.1: Local Responsiveness at MTV
Networks 260
Choosing a Global Strategy 261
Global Standardization Strategy 262
Localization Strategy 263
Transnational Strategy 264
246
Contents
International Strategy 265
Changes in Strategy over Time 265
Strategy in Action 8.2: The Evolving Strategy of Coca-Cola 267
The Choice of Entry Mode 268
Exporting 268
Licensing 269
Franchising 270
Joint Ventures 271
Wholly Owned Subsidiaries 272
Choosing an Entry Strategy 273
Global Strategic Alliances 275
Advantages of Strategic Alliances 275
Disadvantages of Strategic Alliances 276
Making Strategic Alliances Work 276
Chapter 9
orporate-Level Strategy: Horizontal Integration,
C
Vertical Integration and Strategic Outsourcing
286
Opening Case 286
Overview 287
Corporate-Level Strategy and the Multibusiness Model 288
Horizontal Integration: Single-Industry Corporate Strategy 289
Benefits of Horizontal Integration 290
Strategy in Action 9.1: Larry Ellison Wants Oracle to Become
the Biggest and the Best 293
Problems with Horizontal Integration 294
Vertical Integration: Entering New Industries to Strengthen
the “Core” Business Model 295
Increasing Profitability Through Vertical Integration 297
Strategy in Action 9.2: Specialized Assets and Vertical
Integration in the Aluminum Industry 299
Problems with Vertical Integration 301
Alternatives to Vertical Integration: Cooperative Relationships
Short-Term Contracts and Competitive Bidding 303
Strategic Alliances and Long-Term Contracting 303
Strategy in Action 9.3: Apple, Samsung, and Nokia Battle
in the Smartphone Market 304
Building Long-Term Cooperative Relationships 305
Strategy in Action 9.4: Ebay’s Changing Commitment to
Its Sellers 306
Strategic Outsourcing 307
Strategy in Action 9.5: Apple Tries to Protect Its New Products
and the Workers Who Make Them 308
Benefits of Outsourcing 310
Risks of Outsourcing 311
302
xiii
xiv
Contents
Chapter 10 Corporate-Level Strategy: Related and Unrelated
Diversification
318
Opening Case 318
Overview 322
Increasing Profitability Through Diversification 322
Transferring Competencies Across Businesses 323
Leveraging Competencies to Create a New Business 324
Sharing Resources and Capabilities 325
Using Product Bundling 326
Utilizing General Organizational Competencies 327
Strategy in Action 10.1: United Technologies Has an “ACE” in
Its Pocket 329
Two Types of Diversification 331
Related Diversification 331
Unrelated Diversification 331
The Limits and Disadvantages of Diversification 333
Changes in the Industry or Company 333
Diversification for the Wrong Reasons 334
The Bureaucratic Costs of Diversification 335
Strategy in Action 10.2: How Bureaucratic Costs Rose
Then Fell at Pfizer 337
Choosing a Strategy 338
Related Versus Unrelated Diversification 338
The Web of Corporate-Level Strategy 338
Strategy in Action 10.3: Sony’s “Gaijin” CEO Is Changing
the Company’s Strategies 340
Entering New Industries: Internal New Ventures 341
The Attractions of Internal New Venturing 341
Pitfalls of New Ventures 342
Guidelines for Successful Internal New Venturing 344
Entering New Industries: Acquisitions 345
The Attraction of Acquisitions 345
Acquisition Pitfalls 346
Guidelines for Successful Acquisition 348
Entering New Industries: Joint Ventures 349
Restructuring 350
Why Restructure? 350
PART four
IMPLEMENTING STRATEGY
Chapter 11 C
orporate Performance, Governance,
and Business Ethics
Opening Case 359
Overview 361
359
Contents
Stakeholders and Corporate Performance 362
Stakeholder Impact Analysis 363
The Unique Role of Stockholders 363
Profitability, Profit Growth, and Stakeholder Claims
364
Strategy in Action 11.1: Price Fixing at Sotheby’s and Christie’s
Agency Theory 367
Principal–Agent Relationships 367
The Agency Problem 367
366
Strategy in Action 11.2: Self-Dealing at Hollinger
International Inc. 371
Governance Mechanisms 372
The Board of Directors 372
Stock-Based Compensation 373
Financial Statements and Auditors 374
The Takeover Constraint 375
Governance Mechanisms Inside a Company 376 …
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