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Fifth

Edition

ESSENTIALS OF STRATEGIC MANAGEMENT


INTERNATIONAL EDITION

J. David Hunger
Saint John's University Iowa State University

Thomas L. Wheelen
Formerly with University of Virginia Trinity College, Dublin, Ireland

Prentice Hall Boston Columbus Indianapolis New York San Francisco, Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo

CONTENTS
Preface 13

Part I

Introduction to Strategic Management


1.1 1.2 1.3 1.4

17

Chapter 1 Basic Concepts of Strategic Management 17


The Study of Strategic Management 18 Initiation of Strategy: Triggering Events 20 Basic Model of Strategic Management 21 Strategic Decision Making 27
Discussion Questions 30 Key Terms 30 Notes 31

Chapter 2 Corporate Governance and Social Responsibility 32


2.1 Corporate Governance: Role of the Board of Directors 33 2.2 Corporate Governance: Role of Top Management 39 2.3 Social Responsibilities and Ethics in Strategic Decision Making 40
Discussion Questions 44 Key Terms 45 Notes 45

Part II Scanning the Environment 46


Chapter 3 Environmental Scanning and Industry Analysis 46
3.1 3.2 3.3 3.4 3.5 Environmental Scanning 47 Industry Analysis: Analyzing the Task Environment 53 Competitive Intelligence 62 Forecasting 63 Synthesis of External FactorsEFAS 64
Discussion Questions 66 Key Terms 66 Notes 67 68

Chapter 4 Internal Scanning: Organizational Analysis


4.1 4.2 4.3 4.4 4.5

Resource-Based View of the Firm 68 Business Models 71 Value-Chain Analysis 72 Scanning Internal Resources and Capabilities 73 Synthesis of Internal FactorsIFAS 85
Discussion Questions 86 Key Terms 87 Notes 87

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Contents

Part III

Strategy Formulation

88

Chapter 5 Strategy Formulation: Situation Analysis and Business Strategy 88


5.1 Situational (SWOT) Analysis 88 5.2 Review of Mission and Objectives 92 5.3 Generating Alternative Strategies Using a TOWS Matrix 93 5.4 Business Strategies 94
Discussion Questions 103 Key Terms 103 Notes 104

Chapter 6

Strategy Formulation: Corporate Strategy 6.1 Corporate Strategy 106 6.2 6.3 Directional Strategy 106 Portfolio Analysis 113
Discussion Questions 120

105

6.4 Corporate Parenting 118


Key Terms 120 Notes 120

Chapter 7

Strategy Formulation: Functional Strategy and Strategic Choice 121 7.1 Functional Strategy 122 7.2 The Sourcing Decision: Location of Functions and Capabilities 126 7.3 7.5 Strategies to Avoid 127 Development of Policies 133
Discussion Questions 133 Key Terms 133 Notes 134

7.4 Strategic Choice: Selection of the Best Strategy 127

Part IV

Strategy Implementation and Control

135

Chapter 8 Strategy Implementation: Organizing for Action 135


8.1 What Is Strategy Implementation? 136 8.2 Who Implements Strategy? 136 8.3 What Must Be Done? 136 8.4 How Is Strategy to be Implemented? Organizing for Action 137
8.5

International Issues in Strategy Implementation 147


Discussion Questions 148 Key Terms 148 Notes 148

Chapter 9 Strategy Implementation: Staffing and Leading 150 9.1 Staffing 151 9.2 Leading 155
Discussion Questions 161 Key Terms 162 Notes 162

Contents

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Chapter 10 Evaluation and Control 163


10.1 Evaluation and Control in Strategic Management 164 10.2 Measuring Performance 165 10.3 Strategic Information Systems 172 10.4 Guidelines for Proper Control 173 10.5 Strategic Incentive Management 173
Discussion Questions 175 Key Terms 176 Notes 176

PartV

Introduction to Case Analysis


11.1 The Case Method 177

177

Chapter 11 Suggestions for Case Analysis 177


11.2 Frameworks for Case Analysis 177 11.3 Researching the Case Situation 178 11.4 Financial Analysis: A Place to Begin 178 11.5 Using the Strategic Audit in Case Analysis 184
Discussion Questions 184 Key Terms 185 Notes 185

A p p e n d i x 11.A Suggested Techniques f o r Case Analysis and Presentation 186 A. Case Analysis 186 B. Written Report 187 C. Oral Presentation by Teams 187 A p p e n d i x 11.B Resources f o r Case Research 189

A. Company Information 189 B. Economic Information 189 C. Industry Information 189 D. Directory and Index Information on Companies and Industries 190 E. Ratio Analysis Information 190 F. Online Information 190 A p p e n d i x 11.C Strategic A u d i t o f a Corporation I. Current Situation 192 11. Corporate Governance 192 III. External Environment: Opportunities and Threats 193 IV. Internal Environment: Strengths and Weaknesses 194 192

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Contents V. Analysis of Strategic Factors (SWOT) 199 VI. Strategic Alternatives and Recommended Strategy VII. Implementation 200 VIII. Evaluation and Control
Index 201

199

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