Crafting and executing strategy chapter 3

The Quest for Competitive Advantage

Instructor’s Manual to accompany

SEVENTEENTH EDITION

Arthur A. Thompson, Jr. The University of Alabama

A.J. Strickland The University of Alabama

John E. Gamble University of South Alabama

Table of Contents Section 1 The Seventeenth Edition: Instructor Resources, Chapter Features,

and Case Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Section 2 Using a Strategy Simulation in Your Course: The Compelling Benefi ts, What’s Involved, and How to Proceed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Section 3 Organizing Your Course, Developing a Syllabus, and Suggestions for Using the Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Section 4 Sample Syllabi and Daily Course Outlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Section 5 Test Bank for Chapters 1-12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Chapter 1 What Is Strategy and Why Is It Important? . . . . . . . . . . . . . . . . . . . . . . . 99

Chapter 2 Leading the Process of Crafting and Executing Strategy . . . . . . . . . . . . 115

Chapter 3 Evaluating a Company’s External Environment . . . . . . . . . . . . . . . . . . . . 143

Chapter 4 Evaluating a Company’s Resources and Competitive Position . . . . . . . . 171

Chapter 5 The Five Generic Competitive Strategies—Which One to Employ? . . . . 199

Chapter 6 Supplementing the Chosen Competitive Strategy—Other Important Strategy Choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219

Chapter 7 Strategies for Competing in Foreign Markets . . . . . . . . . . . . . . . . . . . . . 243

Chapter 8 Diversifi cation—Strategies for Managing a Group of Businesses . . . . . . 269

Chapter 9 Ethical Business Strategies, Social Responsibility, and Environmental Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303

Chapter 10 Building an Organization Capable of Good Strategic Execution . . . . . . . 329

Chapter 11 Managing Internal Operations: Actions That Promote Good Strategy Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351

Chapter 12 Corporate Culture and Leadership: Keys to Good Strategy Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369

Section 6 Lecture Notes for Chapters 1-12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393

Chapter 1 What Is Strategy and Why Is It Important? . . . . . . . . . . . . . . . . . . . . . . . 495

Chapter 2 Leading the Process of Crafting and Executing Strategy . . . . . . . . . . . . 401

Chapter 3 Evaluating a Company’s External Environment . . . . . . . . . . . . . . . . . . . . 413

Chapter 4 Evaluating a Company’s Resources and Competitive Position . . . . . . . . 429

Chapter 5 The Five Generic Competitive Strategies—Which One to Employ? . . . . 441

Chapter 6 Supplementing the Chosen Competitive Strategy—Other Important Strategy Choices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451

Chapter 7 Strategies for Competing in Foreign Markets . . . . . . . . . . . . . . . . . . . . . 465

Chapter 8 Diversifi cation—Strategies for Managing a Group of Businesses . . . . . . 475

Chapter 9 Ethical Business Strategies, Social Responsibility, and Environmental Sustainability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 491

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Chapter 10 Building an Organization Capable of Good Strategic Execution . . . . . . . 501

Chapter 11 Managing Internal Operations: Actions That Promote Good Strategy Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511

Chapter 12 Corporate Culture and Leadership: Keys to Good Strategy Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 519

Section 7 Teaching Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529

Case 1 Whole Foods Market in 2008—Vision, Core Values, and Strategy . . . . . 530

Case 2 Costco Wholesale Corp. in 2008—Mission, Business Model, and Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 549

Case 3 JetBlue Airways: A Cadre of New Managers Takes Control . . . . . . . . . . 567

Case 4 Competition in the Golf Equipment Industry in 2008 . . . . . . . . . . . . . . . . 579

Case 5 Competition in the Movie Rental Industry in 2008: Netfl ix and Blockbuster Battle for Market Leadership . . . . . . . . . . . . . . . 593

Case 6 Dell, Inc. in 2008—Can It Overtake Hewlett-Packard as the Worldwide Leader in Personal Computers? . . . . . . . . . . . . . . . . . . . 619

Case 7 Apple, Inc. in 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 639

Case 8 Panera Bread Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 661

Case 9 Rogers’ Chocolates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 673

Case 10 Nucor Corporation—Competing Against Low-Cost Foreign Imports. . . . 687

Case 11 Competition in Video Game Consoles: The State of the Battle for Supremacy in 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 705

Case 12 Nintendo’s Strategy for the Wii —Good Enough to Beat Xbox 360 and PlayStation 3? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717

Case 13 Corona Beer: From a Local Mexican Player to a Global Brand . . . . . . . . 729

Case 14 Google’s Strategy in 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 741

Case 15 The Challenges Facing eBay in 2008—Time for Changes in Strategy . . . 753

Case 16 Loblaw Companies Limited: Preparing for Wal-Mart Supercenters . . . . . 771

Case 17 Research in Motion: Managing Explosive Growth . . . . . . . . . . . . . . . . . . 783

Case 18 Adidas in 2008: Has Corporate Restructuring Increased Shareholder Value? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 795

Case 19 PepsiCo’s Diversifi cation Strategy in 2008 . . . . . . . . . . . . . . . . . . . . . . . 805

Case 20 Robin Hood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 819

Case 21 Dilemma at Devil’s Den . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827

Case 22 Wal-Mart Stores, Inc. in 2008—Management’s Initiatives to Transform the Company and Curtail Wal-Mart Bashing . . . . . . . . . . . . 833

Case 23 Southwest Airlines in 2008: Culture, Values, and Operating Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851

Case 24 Shangri-La Hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 865

Case 25 E & J Gallo Winery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875

Case 26 Detecting Unethical Practices at Supplier Factories: The Monitoring and Compliance Challenges . . . . . . . . . . . . . . . . . . . . . . 883

1section Instructor Resources,

Chapter Features, and Case Overview

Section 1 Instructor Resources, Chapter Features and Case Overview6

INSTRUCTOR RESOURCES We strived to achieve four goals in preparing this package of Instructor Resources for the 17th Edition:

1. To equip you with all the resources and pedagogical tools you’ll need to design and deliver a course that is on the cutting-edge and solidly in the mainstream of what students need to know about crafting and executing winning strategies.

2. To give you wide fl exibility in putting together a course syllabus that you are comfortable with and proud of.