Crafting and Executing Strategy

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ad ” (helpreface here's a different look and feel to thus 14th edition, starting with a more descriptive | utile Crafting and Frccuting Strategy: The Quest for Competitlve Advantage

that more clearly conveys the central thrust of basic courses in business and competitive strategy. The new face we've put on this edition includes a modified chapter organization, streamlined chapter presentations, more coverage of some topies and less covcrage of others, and an all-new and very timely chapter: “Strategy, Ethics, and Social

Responsibility.” Yet the fundamentat character that has driven the text’s success over the

years remains firmly intact. The treatment of basic concepts and analytical tools is golrdly mainstream, very much in step with both theory and practice, and laced with the best examples we could muster. As is traditional in all of our new editions, there ís a fresh line-up of the best and most current cases available. And we've prepared a comprehensive package of support materials that truly work in the classroom and that provide maximum flexibility in custom-tailoring a course to particular needs and preferences.

A TEXT WITH ON-TARGET CONTENT

In our view, for a senior/MBA-level strategy text to qualify as having on-target content,

it must:

® Explain core concepts and provide examples of their relevance and use by actual companies.

e Present understandable explanations of essential analytical tools, how they are used, and where they fit into the managerial process of crafting and executing strategy.

e Be up-to-date and comprehensive, with solid coverage of the landmark changes in competitive markets and company strategies being driven by globalization and Internet technology.

e Focus squarely on what every student needs to know about crafting, implementing, and executing business strategies in today’s market environments.

e Contain fresh, value-adding cases that feature interesting products and companies, illustrate the important kinds of strategic chaflenges managers face, embrace valuable teaching points, and spark student interest.

We believe the 14th edition measures up on all five of these criteria. Chapter discus

sions cut straight to the chase about what students really need to knowdespite the

addition of a new 33-page chapter, the 13 chapters of this edition are 50 pages shorter than the 13 chapters of the previous edition. Our explanations of core concepts and analytical tools are, however, covered in enough depth to make them understandable and usable, the rationale being that a shallow explanation carries little punch and has almost no pedagogical value. We have chosen current examples to which students can easily relate. We have striven to incorporate all relevant state-of-the-art research that is pertinent in a first course in strategy. And we were quite fortunate in assembling a truly fine lineup of interesting, relevant, and challenging cases to drive home valuable lessons in the whys and hows of successfully crafting and executing strategy.

Preface

ORGANIZATION, CONTENT, AND FEATURES OF THE TEXT CHAPTERS

The 13 chapters in this edition reflect not only the normal updating and shsfts in topical emphasis and coverage but also a modestly drfferent organizatton of chapters and topics. There's a mueh improved two-chapter inttroductson to the concept of strategy and the managerial proeess of erafling and executing strategy. Chapters 3 and 4 lay out the concepts and tools of analyzing a company's external environment and internal resources and capabilities, There 1s a four-chapter module on a single-business company's strategy alternatives and a single chapter (condensed from two chapters m prior editions) covering multibusiness diversificatton. The chapter on Internet strategy that was a prominent feature in the 12th and t3th editions has been dropped; now that Internet technology and use of the Internet have beeome standard strategy components at most companies worldwide, we think Internet strategy no longer justifies separate chapter-length treatment. However, the material in this deleted chapter that continues to be relevant has been included as a prominent part of Chapters 3, 4, and 6. The all-new Chapter 10, “Strategy, Ethies and Social Responsibility,” fills a much-needed gap in coverage and can be assigned at any of several places in the course. We continue with our threechapter coverage of what managerial actions underlie effective strategy execution. In all 13 chapters, we have diligently kept the presentations aligned with latest developments in the theory and practice of strategic management. We've gone all-out to incorporate the latest advances in the conceptual underpinning of strategic management and to clearly describe the changes in business strategies, value chain operations, business practices, and competitive conditions being wrought by the continuing march toward globalization and the rapid adoption of Internet technology applications by companies worldwide. The chapter discussions mirror the growing scope and strategic importance of collaborative alliances, the continuing spread of high-velocity change to more industries and company environments, and the recently heightened imperatives of linking strategy and operating practices to what is ethically and socially acceptable. Much is made of the need to match a company's strategy both to its external market circumstances and to its internal resources and competitive capabilities. The resourcebased view of the firm is prominently integrated into the discussion of crafting both single-business and multibusiness strategies. The three-chapter module on executing strategy embraces a strong resource-based perspective, stressing the importance of intellectual capital, core competencies, and competitive capabilities. The following rundown summarizes the noteworthy chapter features and topical

emphasis in this edition:

e Chapter l has been extensively rewritten and revised to focus on the central questions of “What is strategy?” and “Why is it important?” It defines what is meant by the term strategy and describes the identifying elements of a company's strategy, why a company's strategy tends to change and evolve over time, why a company's strategy is partly planned and partly reactive, and why management efforts to craft a company s strategy entail a quest for competittve advantage. In addition,

there are sections discussing the importance of ethical considerations in crafting strategy, how a company's strategy relates to its “business model,” and why good strategy + good strategy execution = good management. The role of this first chapter is to give readers a solid grasp of what the term strategy means, pique their interest, and convince them that the ins and outs of crafting and executing a

ARTE vnvmng strategy are thmgs every business student should know. We intend for this chapter te he a perfect accompaniment for a first day's lecture on what the course is all about and why rt matters.

© Chapter 2 delves into the managerral process of actually erafling and executing a strategy it makes a great assignment for the second day of class. This chapter is structured around the five-step managerial process of crafting and executing strat. egy: (1) forming a strategic vision of where the company is headed and why, (2) setting objectives and performance targets that measure the company's progress, (3) erafling a strategy to achieve these targets and move the company toward its market destination, (4) implementing and executing the strategy, and (5) monitoring progress and making corrective adjustments as needed. This chapter is also introductory in nature and presents such core concepts as strategic vistons and business missions, strategic versus financial objectives, strategic plans, and strategic intent. There's a section underscoring that a company's strategic plan is a collection of strategies devised by different managers at different levels in the organizational hierarchy. We've taken pains to explain why all managers are on a company s strategy-making, strategy-executing team, why managers are well advised to make the concepts and techniques of strategic management a basic part of their toolkit, and why the best companies want their personnel to be true “students of the business.” The chapter winds up with a section on corporate governance.

e Chapter 3 presents the now-standard tools of industry and competitive analysis andto go? How will we get there? The question “Where are we now?” concerns the ins and outs of the company's present situation its market standing, how appealing its products or services are to customers, the competitive pressures it confronts, its strengths and weaknesses, and its current performance.