ACA. See Affordable Care Act (ACA)
Acquisitions, 29–30, 142, 196–197, 225–230
Activity ratios, 94
combined with aggregation, 204–205
combined with arbitrage, 205–206
pitfalls and lessons in applying, 176–177
value proposition, 199–202
Administrative aggregation, 172
Administrative arbitrage, 173
Administrative distance, 49
Aetna
telework program, 113
Affordable Care Act (ACA), 71, 139, 140
Aggregation, 171–172
administrative, 172
combined with adaptation, 204–205
cultural, 172
economic, 172
geographic, 172
pitfalls and lessons in applying, 176–177
value proposition, 199, 202–204, 206–207
Airbus, 206
Alcoa, 62
Alignment, strategy as, 13
Allstate, 25
Amazon, 8–9, 22, 24, 56, 57, 58, 149
Amazon Web Services (AWS), 9
American Airlines, 134
America Online, 55
Amoco, 25
Anheuser-Busch, 73
Arbitrage, 172–174
administrative, 173
combined with adaptation, 205–206
cultural, 173
economic, 173–174
geographic, 173
pitfalls and lessons in applying, 176–177
value proposition, 205–207
Artifacts, 40
Asda, 190
AT&T, 163
Attractiveness test, 28
AWS. See Amazon Web Services (AWS)
Balanced Scorecard, 42–44
Banco Colpatria–Red Multibanca Colpatria S.A., 32
BASF, 127
BCG. See Boston Consulting Group (BCG)
Benetton, 126
Benihana of Tokyo, 173
Berkshire Hathaway, 26–27
Best Buy, 82
Better-off test, 28
Bharti, 48
BI. See Business Intelligence (BI)
Big data, impact on technology revolution, 56–57
Blackberries, 159
Blockbuster profit model, 137–138
Blu-ray, 157
BMW, 46
ConnectedDrive, 58
Board’s role, in strategic management, 215–232
acquisitions, 225–230
deciding on capital structure, 223–225
defined, 215–220
meaningful role, creating, 220–222
mergers, 225–230
strategy focused board, creating, 231–232
strategy implementation, monitoring, 230–231
takeovers, 225–230
Boeing, 181
Boston Consulting Group (BCG), 51
BPR. See Business process reengineering (BPR)
Brands, importance of, 100–102
Breakthrough innovation, 157–158
Budweiser, 51
“Build, Buy, or Bond” paradigm, 24
Business and society, compact between, 59–61
Business Intelligence (BI), 107, 108
Business model, 5–8
Business process reengineering (BPR), 155
Business-to-business (B2B) models, 153
Internet-based, 152
Business-to-consumer (B2C) models, 153
Internet-based, 152
Business unit strategy, 14, 139–166
in click-and-mortar businesses, 150
competitive reactions under extreme competition, 147–148
competitive superiority, 151
in customer service, 150–151
in deregulating industries, 145–146
disruptions from myriad sources, 120
in emerging industries, 141
formulating, 119–138
competitive advantage, 123–125
key challenges, 122–123
value chain analysis, 126–128
foundations
industry, 121
market share, importance of, 122
relative position, 121–122
strategic logic at business unit level, 120–121
in fragmented industries, 144–145
in growth industries, 141–143
in hypercompetitive industries, 146–147
innovation, 157–166
Internet-based business models, 152
Internet-based firm inventory and fulfillment, 152–153
in Internet-based industries, 149–150
in mature and declining industries, 143–144
Porter’s generic business unit strategies
critique of, 132–133
differentiation or low cost, 128–130
risks, 131–132
success, requirements for, 130–131
profitable business model, designing, 136–138
speed, 153–157
value disciplines
customer intimacy, 135–136
operational excellence, 134–135
product leadership, 133–134
Buyers
bargaining power of, 74
preferences, 201
Cadbury Schweppes PLC
“Purple goes Green” initiative, 114
Canon, 102
Capital
cost of, 95
markets, 193
structure, 223–225
total, 95
Career planning, global perspective on, 187–188
Cash trap, 144
Caterpillar, 25
Chemlawn, 25
Chevron, 98
China
Restriction of Hazardous Substances, 115–116
Circuit City, 130
Cisco, 205
Click-and-mortar businesses, strategic planning for, 150
Clorox, 164
Coca-Cola, 46, 48, 53, 73, 100, 117, 131, 167, 169, 181, 192, 199
Coke, 169
Colgate-Palmolive, 23
Collaborative filtering, 57
Commercial infrastructure, 200–201
Companies
globalization pressures on, 51–53
options and outcomes, industry influence on, 71–72
strategic resource base, analysis of. See Company’s strategic resource base, analysis of
Company’s strategic resource base, analysis of, 91–117
brands, importance of, 100–102
core competencies, 102–103
financial resource base, 94–97
forces for change
internal, 109
life-cycle forces, 109–110
strategic forces, 110–111
global supply-chain management, 103–108
challenges to, 104–106
importance of, 104
strategic alliances to build core competence, 108
strategic supply-chain models, 106–107
supply-chain technology hosting, 107–108
green corporate strategy, creation of, 112–117
external green initiatives, 116
governments mandate adherence to green regulations, 115–116
internal green initiatives appreciated by investors, 113–115
sustainability efforts through marketing, 117
human capital, 97
organizational strategic resources, 97–100
physical assets, 93
stakeholder analysis, 111–112
Competition
competitive reactions under extreme, 147–148
globalization impact on, 51
Competitive advantage, 123–124
analysis of, 124–125
Competitive drivers, 50
Competitive environment, 193–194
Competitive reactions under extreme competition, 147–148
Competitive strategy. See Business unit strategy
Competitive superiority, 151
Competitor(s)
analysis, 87–89
globalization of, 53
Complementary products, influence of, 75
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 115
Concentrated growth strategies, 24–25
Cooperative strategies, 30–31
Core business, definition of, 23
Core competencies, 102–103
strategic alliances to build, 108
Corporate Executive Board, 165
Corporate social responsibility (CSR), 3, 46, 58–63
business and society, compact between, 59–61
green initiatives, 61–63
Corporate strategy, 14
Cost
analysis, 96
benchmarking, 96
of capital, 95
control, 142
of entry test, 28
globalization drivers, 50
CSR. See Corporate social responsibility (CSR)
Cultural aggregation, 172
Cultural arbitrage, 173
Cultural differences, and value proposition adaptation, 201–202
Cultural distance, 49
Culture, and organizational change, 39–41
Customer
development/customer solutions profit model, 137
intimacy, 135–136
needs and preferences, globalization of, 53
service, strategic planning for, 150–151
CyberGate, 154
DaimlerChrysler, 156
Debt
versus equity, 223–224
long-term, 223
preferred, 223
Decision-making process, global, 186
Deere & Company, 213
De facto standard profit model, 138
Dell, 22, 98, 126, 128, 130, 151, 154
Dell, Michael, 113
Deregulating industries, business unit strategy in, 145–146
Design strategy, 171
Disinvestments, 33
Disruptive innovation, 159
Distance, 194–195
administrative, 49
cultural, 49
economic, 50
geographic, 49–50
political, 49
Diversification, 26–33
cooperative strategies, 30–31
funding limitations, 31
market access, 32
mergers and acquisitions, 29–30
relatedness, 27–28
risk sharing, 31
technology access, 32
tests, 28
Drop-shipping method, 153
Due diligence, 228–229
Dunkin’ Donuts, 11
DuPont, 28, 47, 53, 61, 62, 94
Earned surplus, 223
Earnings per share (EPS), 96
Eastman Kodak, 28
eBags.com, 153
Economic aggregation, 172
Economic arbitrage, 173–174
Economic distance, 50
Economics of learning, 22
Economic value added (EVA), 42, 95–96
Economies of scale, 21–22, 52, 171
Economies of scope, 22, 52, 171
Ecosystem perspective, of strategy, 12
Emerging industries, business unit strategy in, 141
Employee selection, global perspective on, 187–188
Entrepreneurial profit model, 138
Entry strategies
modes of entry, 195–197
timing, 197–198
EPA Superfund. See Comprehensive Environmental Response, Compensation and Liability Act of 1980
EPS. See Earnings per share (EPS)
Equity
versus debt, 223–224
stakeholders’, 223–224
EVA. See Economic value added (EVA)
Executive Order 12780, 115
Expedia.com, 150
Explicit knowledge, 99
Exporting, 195
Externalization strategy, 170–171
External partners, leveraging, 162–163
External strategic environment, analysis of, 45–70
corporate social responsibility, 58–63
globalization, 46–54
risk and uncertainty, 63–70
technology revolution, 54–58
Financial markets, 193
Financial ratio analysis, 94
Financial resource base, analysis of, 94–97
Financial risk analysis, 97
Focus strategy, 170
Folgers, 10
Followers, 142
Forces for change company’s strategic resource base
internal, 109
life-cycle forces, 109–110
strategic forces, 110–111
Foreign direct investment, 196
Fragmented industries, business unit strategy in, 144–145
Franchising, 171
Functional strategy, 14
Gain or excess market power, 27–28
GE. See General Electric (GE)
GEH. See GE Healthcare (GEH)
GE Healthcare (GEH), 175–176
GE Money, 32
Genentech, 24
General Electric (GE), 7, 22, 24, 46, 53, 61, 128, 158, 175, 181, 187, 189
Ecomagination program, 113
Generally Recognized as Safe, 200
General Mills, 62
General Motors, 156
Geographic aggregation, 172
Geographical scope decisions, 22
Geographic arbitrage, 173
Geographic distance, 49–50
Global change strategy, 204
Global competitive advantage, realigning and restructuring for, 185–188
global strategy and risk, 53–54
impact on competition, 51
industry drivers, 50
persistence of distance, 48–50
pressures on companies, 51–53
status of, 47–48
Global market
attractiveness, measuring, 191–195
selection, 190–191
Global message strategy, 204
Global mind-set, importance of, 178–181
Global mix strategy, 203
Global offer strategy, 203–204
Global segmentation approach to market selection, 192
Global strategy, 167–214
AAA framework, 168–177
business model, adapting, 189–214
entry strategies, 195–197
global market attractiveness, measuring, 191–195
global market selection, 190–191
sourcing dimension, 208–214
value proposition, 198–207
as business model change, 167–168
need for, 177–188
global competitive advantage, realigning and restructuring for, 185–188
global mind-set, importance of, 178–181
organization, as global strategy, 181–185
Global Supply-Chain Forum (GSCF) model, 107
Global supply-chain management, 103–108
challenges to, 104–106
importance of, 104
strategic alliances to build core competence, 108
strategic supply-chain models, 106–107
supply-chain technology hosting, 107–108
Goizueta, Roberto, 48
Good to Great: Why Some Companies Make the Leap . . . and Others Don’t, 20
Goodyear, 25
Google, 169
Government drivers, 50
Green corporate strategy, creation of, 112–117
external green initiatives, 116
governments mandate adherence to green regulations, 115–116
internal green initiatives appreciated by investors, 113–115
sustainability efforts through marketing, 117
Greenfield start-ups, 196–197
Green initiatives, 61–63
Growth, 52
industries, business unit strategy in, 141–143
need for, 23–24
GSCF. See Global Supply-Chain Forum (GSCF) model
H&R Block, 15
Harrah’s, 57
HBO, 74
Heineken, 46
Hewlett-Packard (HP), 63
Hills Brothers, 10
Service Performance Initiative, 135
Honda, 102
Horizontal integration, 26
Horizontal scope decisions, 22
HP. See Hewlett-Packard (HP)
Hubbard Hall, 62
Hulu.com, 158
Huyett, 147
Hypercompetitive industries, business unit strategy in, 146–147
IAS. See International Accounting Standard (IAS)
IBM, 22, 28, 46, 61, 98, 162–163, 174–175, 177
IBM Consulting Group, 140
IBM Global Services, 140
IKEA, 171
Implicit knowledge, 99
Industrial economics, 4
Industry
buyers, bargaining power of, 74
complementary products, influence of, 75
definition of, 72–73
evolution of, 76–86
market evolution, common elements in, 79–81
new patterns, 85–86
power curves, 82–84
product differentiation, 77–78
product life cycle analysis, 83–85
structure, 77–78
trajectories of change, 76–77
globalization drivers, 50
influence on company’s options and outcomes, 71–72
methods of analysis, 86–90
competitor analysis, 87–89
segmentation, 87
strategic groups, 89–90
rivalry among participants, 74–75
structure of, 73–75
suppliers, bargaining power of, 74
threat of entry, 73
threat of substitute products and services, 74
Information technology, 3
ING DIRECT, 9–10
breakthrough, 157–158
characteristics of, 161–162
disruptive, 159
external partners, leveraging, 162–163
framework for, 162
global, 206–207
improving performance through, recommendations for, 165–166
outsourcing, 158
Procter & Gamble, 163–164
and profitability, 164–166
sustaining, 158–159
value creation through, 158–162
Innovators’ Dilemma, 158
Installed base profit model, 138
Intellectual capital, 5, 98–99
Interface, 62
Internal development, 142
International Accounting Standard (IAS), 227
Internet, 55–56
Internet-based business models, 152
Internet-based firm inventory and fulfillment, 152–153
Internet-based industries, strategic planning for, 149–150
Investors, internal green initiatives appreciated by, 113–115
Jobs, Steve, 99
John Deere, 25
Johnson & Johnson, 117
Joint ventures, 142, 196, 212, 29, 30. See also Partnering; Strategic alliances
KFC, 25
explicit, 99
implicit, 99
tacit, 99
Labor markets, 193
LBOs. See Leveraged buyouts (LBOs)
Leadership, 34–36
product, 133–134
technological, 191
Learning or experience curve, 22
Leverage, 224
external partners, 162–163
ratios, 94
Leveraged buyouts (LBOs), 225
Li and Fung, 58
Licensing, 195–196
Liquidations, 33
Liquidity ratios, 94
Long-term debt, 223
Long-term perspectives, of strategy, 8–10
Low cost, 128–130
Lucent, 181
Market
drivers, 50
evolution, 79–81
selection, global, 190–191
share, as strategic goal in business unit level, 122
Market value added (MVA), 95, 96
Mary Kay Cosmetics (MKC), 194
Matsushita, 183
Mature and declining industries, business unit strategy in, 143–144
Maytag, 131
McCormick, 102
McDonald’s, 11, 22, 82, 115, 204
McKinsey & Company, 71, 91, 111, 165, 218
Metalco, 151
Metro, 190
Microsoft, 28, 32, 98, 141, 187, 192, 205, 213
Microsoft Office, 157
Millennium Pharmaceuticals, 127
definition of, 178
global, importance of, 178–181
Minnesota Mining & Manufacturing (3M), 102
15 percent rule, 150–151
“Foresight,” 160
“Greenfields,” 160
innovation, 160–161
Pollution Prevention Pays (3P) program, 63
Mission statement, 14–16
MKC. See Mary Kay Cosmetics (MKC)
MK Restaurants, 101–102
Modes of entry, 195–197
Mr. Clean, 140
Multicomponent system profit model, 137
MVA. See Market value added (MVA)
NASDAQ, 98
NBC, 158
Nescafé, 10
Nestlé, 101, 174, 184, 186, 189
Netscape, 98
Network(s/ing), 171
developing and coordinating, 187
News Corp., 158
Nike, 7, 46, 100, 127, 130, 134
Nordstrom, 135
Offshoring, 172, 208, 209, 210
On-demand models, 107
Operational excellence, 134–135
Oracle Corporation, 128
Organizational change, 36–41
culture, 39–41
people, 39
structure, 37–38
systems and processes, 38–39
Organizational resistance to change, anticipating and overcoming, 186–187
Organizational strategic resources, 97–100
Organization, as global strategy, 181–185
global, 183
international, 181–182
modern global, 184–185
modern multidomestic, 184
multidomestic, 182–183
transnational, 183–184
Outsourcing, 172
advantages of, 208–210
innovation, 158
risks associated with, 210–212
Packaging design, 201
Palm Pilots, 159
Partnering, 212–214. See also Joint ventures; Strategic alliances
Patents, 98–99
Pepsi Cola, 73
Performance and strategy, link between, 33–41
leadership, 34–36
organizational change, 36–41
purpose, 34–36
strategic options, evaluation of
Balanced Scorecard, 42–44
criteria, 41
shareholder value, 42
Philips Medical Systems (PMS), 176
Physical assets, 93
PMS. See Philips Medical Systems (PMS)
Political distance, 49
Porter’s generic business unit strategies
critique of, 132–133
differentiation or low cost, 128–130
risks, 131–132
success, requirements for, 130–131
Power curves, 82–84
Pratt & Whitney, 7
Preferred debt, 223
Price-comparison services, 57
PricewaterhouseCoopers, 46, 140
Procter & Gamble (P&G), 11, 47, 52, 102, 116, 124, 140, 175, 181, 187, 197
“Connect and Develop” program, 163
FutureWorks, 163
innovation, 163–164
Product
differentiation, 77–78
guarantees, 201
leadership, 133–134
life cycle analysis, 83–85
markets, 193
pyramid profit model, 137
Profitability
innovation and, 164–166
ratios, 94
Profitable business model, designing, 136–138
Profit multiplier model, 138
Radio Shack, 130
Razor–razor blade model, 6
Regionalization, 171
Relatedness, 27–28
degree of, 28
gain or excess market power, 27–28
intangible resources, 27
strategic, 28
tangible resources, 27
Resource-based perspective, of strategy, 4–5
Retained earnings. See Earned surplus
Return on assets (ROA), 94, 95, 96
Return on equity (ROE), 95, 96
Return on Investment (ROI), 26, 41, 94, 195
Revenue business models, Internet-based, 152
Reverse logistics, 106
Risk(s), 63–70
business unit strategy, 131–132
implications for strategy, 66–68
scenario analysis, 68–69
scenario planning, limitations of, 69–70
ROA. See Return on assets (ROA)
Rockwell International, 28
ROE. See Return on equity (ROE)
ROI. See Return on Investment (ROI)
Rolls Royce, 7
SaaS. See Software as a Service (SaaS)
SAP, 206
Scenario analysis, 68–69
Scenario planning, limitations of, 69–70
SCOR. See Supply-Chain Operational Reference (SCOR) model
Securities and Exchange Commission, 145
Segmentation, 87
Sell-offs, 33
7-S model, 111
Shared values, 40
Shareholder-value analysis, 94
Shareholder value approach (SVA), 42
ShopAlerts, 56
SIC. See Standard Industrial Classification (SIC) code
Siemens Medical Solutions (SMS), 176
Silk Road, 46
Skandia, 98
SMS. See Siemens Medical Solutions (SMS)
Software as a Service (SaaS), 107
Sourcing dimension, globalizing, 208–214
partnering, 212–214
risks associated with outsourcing, 210–212
Southwest Airlines, 129
Specialization profit model, 138
Specialization ratio, 28
Speed merchants, 154
Speed, of business unit strategy, 153–157
consequences of, 156–157
forming partnerships, 156
methods of, 155
pressures for, 154–155
requirements of, 155
streamlining operations, 155
upgrading technology, 156
Spin-offs, 33
Stakeholder(s)
analysis, 111–112
role in strategy formulation, 14
Standard Industrial Classification (SIC) code, 121
Starwood Hotels & Resorts Worldwide, 134–135
Strategic alliances, 142, 171, 196, 212, 30. See also Joint ventures; Partnering
to build core competence, 108
Strategic choice process, 221–222
Strategic decision making, 221
Strategic groups, 89–90
Strategic intent, 16
Strategic planning, 221
Strategic relatedness, 28
Strategic supply-chain models, 106–107
Strategic thinking, 221
Strategy
as alignment, 13
definition of, 1
distinguished from tactics, 8
ecosystem perspective of, 12
execution, 221
focused board, creating, 231–232
formulation of. See Strategy formulation
implementation, monitoring, 230–231
levels of, 14
planning of, 13
resource-based perspective of, 4–5
Strategy formulation, 5–18
business model, 5–8
ecosystem perspective, 12
levels of strategy, 14
long-term perspectives, 8–10
options, creating, 11–12
process, 16–18
stakeholders, role of, 14
strategic intent, 16
strategy as alignment, 13
stretch, 16
value, 10–11
vision and mission, 14–16
Stretch, 16
Success, requirements for, 130–131
Suppliers, bargaining power of, 74
Supply chain(s)
of Internet business models, 152
technology hosting, 107–108
Supply-Chain Operational Reference (SCOR) model, 107
efforts through marketing, 117
Sustaining innovation, 158–159
SVA. See Shareholder value approach (SVA)
Switchboard profit model, 137
Synergy, 27
Tacit knowledge, 99
Taco Bell, 123
Tactics
distinguished from strategy, 8
Takeovers, 225–230
Tata Motors, 171
Technology access, 32, 213–214
Technology revolution, 54–58
impact of big data, 56–57
Internet, 55–56
new business models, 57–58
Texas Instruments, 52
Textron, 28
Threat of market entry, 73
Threat of substitute products and services, 74
Time profit model, 137
Timing of entry, 197–198
Top management, strong commitment by, 185
Total capital, 95
Trade-offs, 8–10
Transparency, 37
Uncertainty, 63–70
implications for strategy, 66–68
residual, analysis of, 64–66
scenario analysis, 68–69
scenario planning, limitations of, 69–70
United Nations, 191
United Nations World Intellectual Property Organization, 98
United Parcel Service (UPS), 40, 61–62, 115
UPS. See United Parcel Service (UPS)
Use adaptation, 171
USEC, 115
Value, 10–11
chain analysis, 126–128
creation through innovation, 158–162
disciplines
customer intimacy, 135–136
operational excellence, 134–135
product leadership, 133–134
migration, 11
adaptation strategies, 199–202
globalization matrix, 202–204
globalizing, 198–207
Value-based management (VBM), 42
Variation strategy, 169–170
VBM. See Value-based management (VBM)
Vertical integration, 25–26
Vertical scope decisions, 22
Viguerie, 147
Virgin, 22
Wal-Mart, 8, 9, 12, 24, 48, 50, 57, 61, 82, 102, 114, 128, 134, 172, 190
Walt Disney Productions, 130
Web-based markets, 58
What Really Works: The 4 + 2 Formula for Sustained Business Success, 20–21
Whole Foods Market, 15–16
World Bank, 191
World Trade Organization (WTO), 98, 190
WTO. See World Trade Organization (WTO)
Xerox, 172
Zara, 46
Zeneca, 125