DESIGN SERVICES OF # 108137 Cust: Cengage Au: Hill Jones Pg. No. ii C/M/Y/K S4-CARLISLE 25843_fm_ptg01_hr_i-xxxii.indd 2 1/24/12 2:28 AM Title: Strategic Management Server: Short / Normal / Long Publishing Services StrategIC ManageMent An Integrated Approach Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. DESIGN SERVICES OF # 108137 Cust: Cengage Au: Hill Jones Pg. No. i C/M/Y/K S4-CARLISLE 25843_fm_ptg01_hr_i-xxxii.indd 1 1/24/12 2:28 AM Title: Strategic Management Server: Short / Normal / Long Publishing Services Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. DESIGN SERVICES OF # 108137 Cust: Cengage Au: Hill Jones Pg. No. ii C/M/Y/K S4-CARLISLE 25843_fm_ptg01_hr_i-xxxii.indd 2 1/24/12 2:28 AM Title: Strategic Management Server: Short / Normal / Long Publishing Services C h a r l e S W . l . h I l l g a r e t h r . J o n e S University of Washington Texas A&M University StrategIC ManageMent An Integrated Approach Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. DESIGN SERVICES OF # 108137 Cust: Cengage Au: Hill Jones Pg. No. iii C/M/Y/K S4-CARLISLE 25843_fm_ptg01_hr_i-xxxii.indd 3 1/24/12 2:28 AM Title: Strategic Management Server: Short / Normal / Long Publishing Services Strategic Management: An Integrated © 2013, 2010 South-Western, Cengage Learning Approach, Tenth Edition ALL RIGHTS RESERVED. No part of this work covered by the copyright Charles W. L. Hill and Gareth R. Jones herein may be reproduced, transmitted, stored, or used in any form Vice President of Editorial, Business: or by any means graphic, electronic, or mechanical, including but Jack W. 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For your course and learning solutions, visit www.cengage.com Purchase any of our products at your local college store or at our preferred online store www.cengagebrain.com Printed in the Canada 1 2 3 4 5 6 7 18 17 16 15 14 13 12 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. DESIGN SERVICES OF # 108137 Cust: Cengage Au: Hill Jones Pg. No. iv C/M/Y/K S4-CARLISLE 25843_fm_ptg01_hr_i-xxxii.indd 4 1/24/12 2:28 AM Title: Strategic Management Server: Short / Normal / Long Publishing Services This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. DESIGN SERVICES OF # 108137 Cust: Cengage Au: Hill Jones Pg. No. ii C/M/Y/K S4-CARLISLE 25843_fm_ptg01_hr_i-xxxii.indd 2 1/24/12 2:28 AM Title: Strategic Management Server: Short / Normal / Long Publishing Services Brief Contents 1 PART ONE iNTROducTiON TO sTRATEgic mANAgEmENT 1 Strategic Leadership: Managing the Strategy-Making Process 1 for Competitive Advantage 2 External Analysis: The Identification of Opportunities and Threats 45 2 PART TwO ThE NATuRE Of cOmPETiTivE AdvANTAgE 3 Internal Analysis: Distinctive Competencies, Competitive Advantage, 81 and Profitability 4 Building Competitive Advantage Through Functional-Level Strategy 117 3 PART ThREE sTRATEgiEs 5 Building Competitive Advantage Through Business-Level Strategy 155 6 Business-Level Strategy and the Industry Environment 191 7 Strategy and Technology 227 8 Strategy in the Global Environment 263 9 Corporate-Level Strategy: Horizontal Integration, Vertical Integration, 307 and Strategic Outsourcing 10 Corporate-Level Strategy: Related and Unrelated Diversification 339 4 PART fOuR imPlEmENTiNg sTRATEgy 11 Corporate Performance, Governance, and Business Ethics 377 12 Implementing Strategy in Companies that Compete 413 in a Single Industry 13 Implementing Strategy in Companies that Compete Across 461 Industries and Countries 5 PART fivE cAsEs iN sTRATEgic mANAgEmENT v Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. DESIGN SERVICES OF # 108137 Cust: Cengage Au: Hill Jones Pg. No. v C/M/Y/K S4-CARLISLE 25843_fm_ptg01_hr_i-xxxii.indd 5 1/24/12 2:28 AM Title: Strategic Management Server: Short / Normal / Long Publishing Services Contents Preface xix Acknowledgements xxv dedication xxix 1 PART ONE iNTROducTiON TO sTRATEgic mANAgEmENT Chapter 1 strategic leadership: managing the strategy-making Process for competitive Advantage 1 Opening Case: Dell Inc. 1 Overview 3 Strategic Leadership, Competitive Advantage, and Superior Performance 4 Superior Performance 5 Competitive Advantage and a Company’s Business Model 6 Industry Differences in Performance 7 Performance in Nonprofit Enterprises 8 Strategic Managers 9 Corporate-Level Managers 10 Business-Level Managers 11 Functional-Level Managers 11 The Strategy-Making Process 11 A Model of the Strategic Planning Process 12 Mission Statement 14 Major Goals 16 External Analysis 17 Strategy in Action 1.1: Strategic Analysis at Time Inc. 18 Internal Analysis 19 SWOT Analysis and the Business Model 19 Strategy Implementation 20 The Feedback Loop 21 Strategy as an Emergent Process 21 Strategy Making in an Unpredictable World 21 Autonomous Action: Strategy Making by Lower-Level Managers 22 Strategy in Action 1.2: Starbucks’ Music Business 22 Strategy in Action 1.3: A Strategic Shift at Charles Schwab 23 Serendipity and Strategy 23 Intended and Emergent Strategies 24 Strategic Planning in Practice 26 Scenario Planning 26 Decentralized Planning 27 Strategic Decision Making 28 Cognitive Biases and Strategic Decision Making 28 vi Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 25843_fm_ptg01_hr_i-xxxii.indd 6 1/24/12 2:28 AM