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.