Preface to Eighth Edition xvii Guide to Web Resources xix PART I INTRODUCTION 1 1 The Concept of Strategy 3 Introduction and Objectives 4 The Role of Strategy in Success 4 The Basic Framework for Strategy Analysis 10 A Brief History of Business Strategy 12 Strategy Today 15 How Is Strategy Made? The Strategy Process 21 Strategic Management of Not-For-Profit Organizations 25 Summary 27 Self-Study Questions 28 Notes 29 PART II THE TOOLS OF STRATEGY ANALYSIS 31 2 Goals, Values, and Performance 33 Introduction and Objectives 34 Strategy as a Quest for Value 35 Putting Performance Analysis into Practice 41 Beyond Profit: Values and Corporate Social Responsibility 49 Beyond Profit: Strategy and Real Options 52 Summary 55 Self-Study Questions 56 Notes 57 3 Industry Analysis: The Fundamentals 59 Introduction and Objectives 60 From Environmental Analysis to Industry Analysis 60 Analyzing Industry Attractiveness 62 Applying Industry Analysis to Forecasting Industry Profitability 73 Using Industry Analysis to Develop Strategy 74 Defining Industries: Where to Draw the Boundaries 77 From Industry Attractiveness to Competitive Advantage: Identifying Key Success Factors 79 Summary 83 Self-Study Questions 84 Notes 84 4 Further Topics in Industry and Competitive Analysis 87 Introduction and Objectives 88 Extending the Five Forces Framework 88 Dynamic Competition: Hypercompetition, Game Theory, and Competitor Analysis 91 Segmentation and Strategic Groups 99 Summary 106 Self-Study Questions 107 Notes 107 5 Analyzing Resources and Capabilities 111 Introduction and Objectives 112 The Role of Resources and Capabilities in Strategy Formulation 112 Identifying Resources and Capabilities 116 Appraising Resources and Capabilities 126 Developing Strategy Implications 131 Summary 136 Self-Study Questions 137 Notes 138 6 Organization Structure and Management Systems: The Fundamentals of Strategy Implementation 141 Introduction and Objectives 142 From Strategy to Execution 143 Organizational Design: The Fundamentals of Organizing 147 Organizational Design: Choosing the Right Structure 157 Summary 164 Self-Study Questions 165 Notes 166 PART III BUSINESS STRATEGY AND THE QUEST FOR COMPETITIVE ADVANTAGE 167 7 The Sources and Dimensions of Competitive Advantage 169 Introduction and Objectives 170 How Competitive Advantage Emerges and Is Sustained 170 Types of Competitive Advantage: Cost and Differentiation 177 Cost Analysis 179 Differentiation Analysis 188 Implementing Cost and Differentiation Strategies 201 Summary 202 Self-Study Questions 203 Notes 204 8 Industry Evolution and Strategic Change 207 Introduction and Objectives 208 The Industry Life Cycle 209 Managing Organizational Adaptation and Strategic Change 217 Managing Strategic Change 224 Summary 240 Self-Study Questions 241 Notes 242 9 Technology-based Industries and the Management of Innovation 245 Introduction and Objectives 246 Competitive Advantage in Technology-intensive Industries 247 Which Mechanisms Are Effective at Protecting Innovation? 253 Strategies to Exploit Innovation: How and When to Enter 254 Competing for Standards 259 Implementing Technology Strategies: Creating the Conditions for Innovation 265 Summary 272 Self-Study Questions 274 Notes 274 10 Competitive Advantage in Mature Industries 277 Introduction and Objectives 278 Competitive Advantage in Mature Industries 278 Strategy Implementation in Mature Industries: Structure, Systems, and Style 284 Strategies for Declining Industries 287 Summary 290 Self-Study Questions 291 Notes 291 PART IV CORPORATE STRATEGY 293 11 Vertical Integration and the Scope of the Firm 295 Introduction and Objectives 296 Transaction Costs and the Scope of the Firm 297 The Benefits and Costs of Vertical Integration 300 Designing Vertical Relationships 306 Summary 311 Self-Study Questions 312 Notes 313 12 Global Strategy and the Multinational Corporation 315 Introduction and Objectives 316 Implications of International Competition for Industry Analysis 317 Analyzing Competitive Advantage in an International Context 319 Applying the Framework: International Location of Production 322 Applying the Framework: Foreign Entry Strategies 326 Multinational Strategies: Global Integration versus National Differentiation 328 Strategy and Organization within the Multinational Corporation 334 Summary 340 Self-Study Questions 341 Notes 342 13 Diversification Strategy 345 Introduction and Objectives 346 Trends in Diversifi cation over Time 347 Motives for Diversifi cation 350 Competitive Advantage from Diversifi cation 353 Diversification and Performance 358 The Meaning of Relatedness in Diversification 359 Summary 361 Self-Study Questions 362 Notes 362 14 Implementing Corporate Strategy: Managing the Multibusiness Firm 365 Introduction and Objectives 366 The Role of Corporate Management 367 Managing the Corporate Portfolio 367 Managing Individual Businesses 370 Managing Linkages across Businesses 375 Managing Change in the Multibusiness Corporation 379 Governance of Multibusiness Corporations 385 Summary 391 Self-Study Questions 392 Notes 393 15 External Growth Strategies: Mergers, Acquisitions, and Alliances 395 Introduction and Objectives 396 Mergers and Acquisitions: Causes and Consequences 396 Strategic Alliances 402 Summary 407 Self-Study Questions 407 Notes 408 16 Current Trends in Strategic Management 411 Introduction 412 The New Environment of Business 412 New Directions in Strategic Thinking 417 Redesigning Organizations 421 The Changing Role of Managers 425 Summary 427 Notes 428 Glossary 431 Index 437