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Strategy: A View From the Top / Edition 1 available in Paperback
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A short, up-to-date, practical and readable guide to strategy formulation, this book is designed for practicing executives who are getting ready to assume broader responsibilities. By focusing on strategic thinking and using real-life examples and historical references, this book is a must-read for the serious executive strategist. The first chapter defines strategy and its effect on a corporation's effectiveness; and then in subsequent chapters covers the external strategic environment, the analysis of a firm's physical assets, the development of a competitive strategy, different industry environments, corporate strategy and competition, different strategy choices, global strategy, and implementing and controlling a chosen strategic direction. For CEOs, senior executives, general managers, vice-presidents, divisional managers, and consultants.
|Edition description:||Older Edition|
|Product dimensions:||6.80(w) x 9.10(h) x 0.40(d)|
Table of Contents
|List of Figures||x|
|Chapter 1||What Is Strategy?||1|
|What Is Strategy?||1|
|Strategy Versus Tactics||1|
|Strategy Forces Trade-offs||2|
|Focusing on Value Creation||3|
|Allowing for Learning and Adaptation||4|
|A Long-Term Perspective||4|
|The Role of Stakeholders||4|
|Levels of Strategy||5|
|The Changing Strategy Context||5|
|Mission and Vision||7|
|Strategic Intent and Stretch||8|
|Strategy and Planning||9|
|Evaluating Strategic Options||10|
|The Evolution of Strategic Thinking||11|
|Major Issues in Strategic Management||12|
|Chapter 2||Change and Uncertainty in the External Strategic Environment||14|
|Change in the External Environment||15|
|Demographic Change--The Collapsing Birthrate in the Developed World||15|
|The Distribution of Disposable Income and New Growth Industries||15|
|The Quest for Defining and Delivering Performance||16|
|The Need for Companies to Be Globally Competitive||16|
|Economic Globalization and Political Splintering||17|
|Change in the Industry Environment||18|
|What Is an Industry?||18|
|Industry Structure and Porter's Five Forces Model||19|
|The Influence of the Internet||21|
|Deregulation or Reregulation?||24|
|Risk and Uncertainty||25|
|The Concept of a Change Arena||25|
|Uncertainty and Strategy||28|
|Chapter 3||Leveraging Internal Resources and Change Drivers for Competitive Advantage||30|
|Analyzing a Company's Financial Resource Base||31|
|Human Capital: A Company's Most Valuable Strategic Resource||35|
|Organizational Strategic Resources||36|
|Strategic Resources and Competitive Advantage||40|
|Value Chain Analysis||41|
|Analyzing Internal Change Forces||43|
|The Company Life Cycle||43|
|The Balanced Scorecard||45|
|Strengths, Weaknesses, Opportunities, and Threats||46|
|Chapter 4||Formulating Business Unit Strategy||49|
|Strategic Logic at the Business Unit Level||49|
|How Much Does Industry Matter?||50|
|How Important Is Market Share?||51|
|Findings From the PIMS Project||51|
|Porter's Generic Strategies||52|
|Differentiation or Low Cost?||52|
|Requirements for Success||54|
|A Success Story: Dell Computer||55|
|Critique of Porter's Generic Strategies||55|
|Strategic Analysis at the Business Unit Level||58|
|Profit Pool Analysis||59|
|Analyzing Product/Market Scope||60|
|Product Life Cycle Analysis||62|
|Designing a Profitable Business Model||63|
|Chapter 5||Business Unit Strategy: Context and Special Dimensions||68|
|Emerging, Growth, Mature, and Declining Industries||68|
|Strategy in Emerging Industries||68|
|Strategy in an Industry's Growth Stage||69|
|Strategy in Mature and Declining Industries||70|
|Industry Evolution and Functional Priorities||70|
|Fragmented, Deregulating, and Hypercompetitive Industries||71|
|Strategy in Fragmented Industries||71|
|Strategy in a Deregulating Environment||74|
|Strategy in Hypercompetitive Industries||76|
|Business Unit Strategy: Special Dimensions||77|
|Creating Value Through Innovation||80|
|Horizontal Strategic Thinking||82|
|Chapter 6||The Dynamics of Corporate Strategy||85|
|The Economics of Scale and Scope||86|
|The Logic of Managerial Enterprise||86|
|Timing Is Key||86|
|The Diversification Movement||86|
|The 1990s: Consolidation in the Face of Globalization||87|
|Strategy and Corporate Governance||88|
|Relationship of Corporate Governance to Strategy||88|
|The Evolution of Strategic Thinking at the Corporate Level||89|
|The BCG Approach to Portfolio Analysis||89|
|General Electric Business Screen||92|
|Limitations of Portfolio Analysis||92|
|The Value-Based Approach||92|
|The Resource-Based View of Strategy||96|
|Analysis of Strategic Fit Among Businesses||96|
|Chapter 7||Strategic Options at the Corporate Level||99|
|Concentrated Growth Strategies||99|
|Vertical and Horizontal Integration||100|
|Mergers and Acquisitions||101|
|The Allianced Enterprise||105|
|Disinvestment Strategies: Sell-offs, Spin-offs, and Liquidations||108|
|Management Style Options: The Role of the Corporate Office||109|
|Outcome or Behavior Control?||109|
|Evaluating Strategy Options at the Corporate Level||110|
|Issues of Valuation||110|
|Chapter 8||Formulating a Global Strategy||113|
|Industry and Market Globalization||114|
|Globalization: A Work in Progress||114|
|Industry Globalization Drivers||114|
|Generic Global Strategies||117|
|Formulating a Global Strategy||117|
|Coordination of Decision-Making||121|
|Nonmarket Dimensions of Global Strategy||121|
|Global Strategy and Risk||123|
|Chapter 9||Strategy Implementation and Control||125|
|Implementation: Responsibility, Tasks, and Learning||125|
|Implementation: A Top-Management Responsibility||125|
|Closing Strategic Capability Gaps||126|
|Maintaining Strategic Focus||126|
|Linking Strategy Formulation and Implementation Through Learning||126|
|Strategy and Performance: A Conceptual Framework||128|
|Purpose, Strategy, and Leadership||128|
|The Strategy-Structure-Systems Paradigm||129|
|The New Leadership Focus: From Strategy to Corporate Purpose||129|
|Structure, Systems, Processes, People, and Culture||130|
|Systems and Processes||131|
|Performance and Control||135|
|A Final Word||136|
Corporate success is increasingly tied to the ability of senior executives to craft and implement effective strategies. There is a demonstrated link between executives' strategic choices and their companies' long-term performance. The benefits accrue because companies that enjoy a substantial competitive advantage over their rivals typically have a better grasp of what their customers prefer, how they can create value, who their competitors are, and how they behave.
Formulating a sound strategy requires both analysis and synthesis, and therefore is as much a rational act as it is a creative one. Successful strategies reflect a clear strategic intent and a deep understanding of an organization's core competencies and assets. Generic strategies rarely propel a company to a leadership position. Knowing where you want to go and finding carefully considered, creative ways of getting there are the hallmarks of successful strategy.
This book is designed for practicing executives who are getting ready to assume broader responsibilities and need a short, practical, highly readable guide to strategy formulation, and for MBA and EMBA students who aspire to top management responsibilities.
The first chapter defines strategy as the act of positioning a company for competitive advantage by focusing on unique ways to create value for customers. It contrasts strategy with operational effectiveness, links strategy development to value creation and competitive advantage, and notes the importance of organizational learning in crafting an effective strategy.
Chapter 2 looks at the importance of changes in a firm's external strategic environmentdrivenby economic, technological, political, and sociocultural changeand the impact of the evolutionary forces that shape an industry environment on a company's strategy formulation. In particular, we focus on two key issues that every strategist must confront: how to assess change and uncertainty and how to deal with them.
Chapter 3 focuses on the analysis of a firm's strategic resources including its physical assets, its relative financial position, the quality of its people, and specific knowledge, competencies, processes, skills, or cultural aspects of the organization.
Chapters 4 and 5 address the development of a competitive strategy at the business unit level. The principal focus of business unit or competitive strategy is on how to compete in a given competitive setting. In Chapter 4, we begin this discussion by asking: What determines profitability at the business unit level? We look at the relative importance of the nature of the industry in which a company competes, of a company's competitive position within the industry, and of the drivers that determine sustained competitive advantage. We also introduce a number of techniques that are useful for generating and assessing strategic alternatives, such as profit pool, growth vector, gap, competitor, and product life cycle analyses.
Since business unit strategy is developed in a specific industry context, Chapter 5 discusses six different industry environments. Three represent different stages in an industry's evolutionemerging, growth, and maturity. We then discuss three additional industry environments that pose unique strategic challengesfragmented, deregulating, and hypercompetitive. Because hypercompetition is increasingly characteristic of business-level competition in many industries, we then discuss two critical attributes of successful firms in dynamic industries: speed and innovation. We conclude this chapter by considering the importance of vertical integration and horizontal thinking in business unit strategy formulation.
Chapters 6 and 7 deal with corporate strategy, which is concerned with identifying the businesses in which a company should compete and how a parent company can add value to its business units. In Chapter 6 we look at the concept of economics of scale and scopea fundamental underpinning of corporate strategyand try to answer the question: When is it better to be bigger? Next, we turn to the context in which corporate strategy is developed and executed. In particular, we note the importance of the dispersion in the ownership of large corporations and of the emergence of the market for corporate control. With this background, we trace the evolution of strategic thinking at the corporate level. Three perspectives are identifiedthe portfolio, value-based, and resource-based points of viewand their relative merits are assessed.
Chapter 7 looks at the different strategy choice options at the corporate level. We discuss concentrated growth strategies, diversification issues, merger and acquisition activities, cooperative strategies including joint ventures and alliances, and sell-offs, spin-offs, and liquidations. Next, we look at the issue of corporate management and how a parenting style affects portfolio composition. We conclude the chapter with a discussion of how to evaluate strategy choices at the corporate level.
Chapter 8 deals with formulating a global strategy. We first look at the driving forces behind the emerging global economy and characterize globalization in greater detail as an economic, political, social, and technological phenomenon. Next, we discuss industry globalization. In this section we focus on such questions as: What factors drive the globalization of industries? What explains the dominance of particular countries or regions in global industries? In the third section, we identify the principal dimensions of global strategy and introduce a framework for global strategic thinking that links global strategy options to the nature of the global industry environment. A major tenet of this discussion is that global strategy, more than strategy at the corporate or business unit levels, increasingly is played out in two arenasa market and a nonmarket arena. We conclude this chapter with a consideration of the various strategic risk factors associated with a global strategic posture.
In Chapter 9 we identify key issues associated with implementing and controlling a chosen strategic direction. To this end, we present a conceptual framework that relates a company's strategy to its ultimate performance. This model has three primary components; the first links strategy, leadership, and corporate purpose; the second describes the organization in terms of its structure, systems, processes, people, and culture; while the third component relates performance to control.
ABOUT THE BOOK
Writing a book about a vast subject such as strategy involves making compromises and trade-offs. This book is no exception. In choosing what to include, where, and at what level of depth, we were guided by the book's primary objectiveas a guide for practicing executives, MBA and EMBA students, and corporate development courses. As a consequence, we kept the book relatively short, practical, and highly readable. We adopted a broad perspective, sometimes at the expense of depth and detail about particular techniques or analysis frameworks.
We focused on the process of strategy developmentnot on strategic recipes. We tried to give the reader a sense of contextthrough the use of real examples and, where appropriate, of relevant historical references. Finally, a fundamental premise underlying this book is that strategy formulation and implementation are a dynamic process. As committed as they are to excellence in strategic decision-making, executives must remain equally committed to change. Successful implementation therefore increasingly calls for the use of change management techniques.