Sweetarts chicks ducks and bunnies walgreens

Full-Circle Learning MyLab™: Learning Full Circle for Marketing,One main discussion post. And two responses. Use the book as a reference and both the main post and the response must have at least two outside peer-reviewed/research journal sources.

Evaluate three mission statements by completing Learning Exercise 2B of your text. Using the "Characteristics of a Mission Statement" identified in the table, identify (1) what you believe is the best of the three mission statements and (2) the one you find most inspiring and why.
Management, Business Communication, and Intro to Business

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STRATEGIC MANAGEMENT Concepts and Cases

A COMPETITIVE ADVANTAGE APPROACH

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Fred R. David Francis Marion University Florence, South Carolina

Forest R. David Strategic Planning Consultant

SIXTEENTH EDITION

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STRATEGIC MANAGEMENT Concepts and Cases

A COMPETITIVE ADVANTAGE APPROACH

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Library of Congress Cataloging-in-Publication Data David, Fred R. Strategic management: concepts and cases—a competitive advantage approach / Fred R. David, Francis Marion University, Florence, South Carolina, Forest R. David, Strategic Planning Consultant.—Sixteenth Edition. pages cm ISBN 978-0-13-416784-8 (alk. paper) — ISBN 0-13-416784-8 (alk. paper) 1. Strategic planning. 2. Strategic planning—Case studies. I. David, Forest R. II. Title. HD30.28.D3785 2015 658.4'012—dc23 2015021210

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Thank you to the following companies that graciously provided the substance of the Cohesion Cases

over a 30-year span of 16 editions of this book.

1st edition, 1987: Ponderosa 2nd edition, 1989: Ponderosa 3rd edition, 1991: Hershey Company 4th edition, 1993: Hershey Company 5th edition, 1995: Hershey Company 6th edition, 1997: Hershey Company 7th edition, 1999: Hershey Company 8th edition, 2001: America Online (AOL) 9th edition, 2003: American Airlines 10th edition, 2005: Krispy Kreme Doughnuts, Inc. 11th edition, 2007: Google Inc. 12th edition, 2009: The Walt Disney Company 13th edition, 2011: Apple, Inc. 14th edition, 2013: McDonald’s Corporation 15th edition, 2015: PepsiCo, Inc. 16th edition, 2017: Hershey Company

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Brief Contents

Preface xvii

Acknowledgments xxxi

About the Authors xxxiii

Part 1 Overview of Strategic Management 2 Chapter 1 The Nature of Strategic Management 3

The Cohesion Case: The heRsheY CoMPanY, 2015 (hsY) 26

Part 2 Strategy Formulation 38 Chapter 2 The Business Vision and Mission 39 Chapter 3 The External Assessment 59 Chapter 4 The Internal Assessment 89 Chapter 5 Strategies in Action 129 Chapter 6 Strategy Analysis and Choice 167

Part 3 Strategy Implementation 204 Chapter 7 Implementing Strategies: Management, Operations, and Human Resource Issues 205 Chapter 8 Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues 243

Part 4 Strategy Evaluation 278 Chapter 9 Strategy Review, Evaluation, and Control 279

Part 5 Key Strategic-Management topics 304 Chapter 10 Business Ethics, Social Responsibility, and Environmental Sustainability 305 Chapter 11 Global and International Issues 329

Part 6 Strategic-Management Case analysis 356 How to Prepare and Present a Case Analysis 357 Glossary 627

Name Index 637

Subject Index 643

vii

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Contents

Preface xvii

Acknowledgments xxxi

About the Authors xxxiii

Part 1 Overview of Strategic Management 2

Chapter 1 the Nature of Strategic Management 3

exeMPlaRY CoMPanY showCased: aPPle, inC. 4 what is strategic Management? 4

What Is a Cohesion Case? 5 • Defining Strategic Management 5

stages of strategic Management 5 integrating intuition and analysis 6

Adapting to Change 7

Key Terms in strategic Management 8 Competitive Advantage 8 • Strategists 8

aCadeMiC ReseaRCh CaPsule 1-1: when aRe Chief sTRaTegY offiCeRs (Csos) hiRed/aPPoinTed? 9 Vision and Mission Statements 10 • External Opportunities and Threats 10 • Internal Strengths and Weaknesses 11 • Long-Term Objectives 12 • Strategies 12 • Annual Objectives 12 • Policies 13

The strategic-Management Model 14 aCadeMiC ReseaRCh CaPsule 1-2: whaT aCTiviTY is Most IMportant In the strategIc-ManageMent PRoCess? 15

Benefits of engaging in strategic Management 15 Financial Benefits 16 • Nonfinancial Benefits 17

why some firms do no strategic Planning 17 Pitfalls in strategic Planning 18 Comparing Business and Military strategy 18

iMPliCaTions foR sTRaTegisTs 20 iMPliCaTions foR sTudenTs 21

Chapter summary 21 Key Terms and Concepts 22 Issues for Review and Discussion 22 Mini-Case on The KRogeR CoMPanY: whaT aMeRiCan CoMPanY does The BesT JoB of sTRaTegiC Planning? 24 Current Readings 25 Endnotes 25` The Cohesion Case: The heRsheY CoMPanY, 2015 26 assuRanCe of leaRning exeRCises 35 Assurance of Learning Exercise 1A: Compare Business Strategy with Military Strategy 35 Assurance of Learning Exercise 1B: Gather Strategy Information for the Hershey Company 35

Assurance of Learning Exercise 1C: Update the Hershey Cohesion Case 36 Assurance of Learning Exercise 1D: Strategic Planning for Your University 36 Assurance of Learning Exercise 1E: Strategic Planning at a Local Company 37 Assurance of Learning Exercise 1F: Get Familiar with the Strategy Club Website Assurance of Learning Exercise 1G: Game Plans vs. Strategic Plans: Teams vs. Companies

Part 2 Strategy Formulation 38

Chapter 2 the Business Vision and Mission 39 exeMPlaRY CoMPanY showCased: h&R BloCK 40

vision statements: what do we want to Become? 40 Vision Statement Analysis 41

Mission statements: what is our Business? 42 The Process of developing vision and Mission statements 43 The importance (Benefits) of vision and Mission statements 44

aCadeMiC ReseaRCh CaPsule 2-1: The Mission sTaTeMenT/ fiRM PeRfoRManCe linKage 44 A Resolution of Divergent Views 45

Characteristics of a Mission statement 46 A Customer Orientation 47

Components of a Mission statement 47 evaluating and writing Mission statements 48

Two Mission Statements Critiqued 49 • Five Mission Statements Revised 49 • Two Mission Statements Proposed 49

iMPliCaTions foR sTRaTegisTs 51 iMPliCaTions foR sTudenTs 52

Chapter summary 52 Key Terms and Concepts 53 Issues for Review and Discussion 53 assuRanCe of leaRning exeRCises 54 Assurance of Learning Exercise 2A: Develop an Improved BB&T Mission Statement 54 Assurance of Learning Exercise 2B: Evaluate Three Mission Statements 54 Assurance of Learning Exercise 2C: Write a Vision and Mission Statement for the Hershey Company 55 Assurance of Learning Exercise 2D: Compare Your College or University’s Vision and Mission Statements to That of a Leading Rival Institution 55 Assurance of Learning Exercise 2E: Conduct Mission Statement Research 55

Mini-Case on walT disneY CoMPanY: whaT is disneY’s vision foR The fuTuRe and Mission foR The PResenT? 56 Current Readings 56 Endnotes 57

ix

37

37

Chapter 3 the External assessment 59 exeMPlaRY CoMPanY showCased: ChiPoTle MexiCan gRill 60

The Purpose and nature of an external audit 61 Key External Forces 61 • The Process of Performing an External Audit 62 • The Industrial Organization (I/O) View 63

Ten external forces That affect organizations 63 Economic Forces 63 • Social, Cultural, Demographic, and Natural Environment Forces 65 • Political, Governmental, and Legal Forces 66 • Technological Forces 68 • Competitive Forces 69

Porter’s five-forces Model 71 Rivalry among Competing Firms 72 • Potential Entry of New Competitors 73 • Potential Development of Substitute Products 73 • Bargaining Power of Suppliers 73 • Bargaining Power of Consumers 74

sources of external information 74 forecasting Tools and Techniques 74

Making Assumptions 75 • Business Analytics 76

The external factor evaluation Matrix 77 The Competitive Profile Matrix 78

iMPliCaTions foR sTRaTegisTs 81 iMPliCaTions foR sTudenTs

Chapter summary 82 Key Terms and Concepts 83 Issues for Review and Discussion 83 assuRanCe of leaRning exeRCises 84 Assurance of Learning Exercise 3A: Competitive Intelligence (CI) Certification 84 Assurance of Learning Exercise 3B: Develop an EFE Matrix for Hershey Company 84 Assurance of Learning Exercise 3C: Perform an External Assessment 85 Assurance of Learning Exercise 3D: Develop an EFE Matrix for Your University 85 Assurance of Learning Exercise 3E: Comparing Chipotle Mexican Grill to Panera Bread and Moe’s Southwest Grill 85 Assurance of Learning Exercise 3F: Develop a Competitive Profile Matrix for Hershey Company 86 Assurance of Learning Exercise 3G: Develop a Competitive Profile Matrix for Your University 86

Mini-Case on CoaCh, inC.: whY aRe The ladies shunning CoaCh? 86 Current Readings 87 Endnotes 87

Chapter 4 the Internal assessment 89 exeMPlaRY CoMPanY showCased: neTflix, inC. 90

The nature of an internal audit 90 Key Internal Forces 91 • The Process of Performing an Internal Audit 92 • The Resource-Based View 93

aCadeMiC ReseaRCh CaPsule 4-1: does RBv TheoRY deTeRMine diveRsifiCaTion TaRgeTs? 93

integrating strategy and Culture 94 Management 96

Planning 96 • Organizing 97 • Motivating 98 • Staffing 98 • Controlling 99 • Management Audit Checklist of Questions 99

Marketing 100 Customer Analysis 100 • Selling Products and Services 100 • Product and Service Planning 101 • Pricing 101 • Distribution 102 • Marketing Research 102 • Cost/Benefit Analysis 102 • Marketing Audit Checklist of Questions 103

finance/accounting 103 Finance/Accounting Functions 103 • Financial Ratios 104 • Breakeven Analysis 107 • Finance/Accounting Audit Checklist 109

Production/operations 109 Production/Operations Audit Checklist 110

Research and development 111 Internal and External Research and Development 111 • Research and Development Audit 112

Management information systems 112 Managing Voluminous Consumer Data 112

aCadeMiC ReseaRCh CaPsule 4-2: new TRends in Managing Big daTa 113 Management Information Systems Audit 113

value Chain analysis 113 Benchmarking 114

The internal factor evaluation Matrix 116 iMPliCaTions foR sTRaTegisTs 118 iMPliCaTions foR sTudenTs 120

Chapter summary 121 Key Terms and Concepts 121 Issues for Review and Discussion 122 assuRanCe of leaRning exeRCises 123 Assurance of Learning Exercise 4A: Apply Breakeven Analysis 123 Assurance of Learning Exercise 4B: Compare Netflix with Redbox 123 Assurance of Learning Exercise 4C: Perform a Financial Ratio Analysis for Hershey Company 124 Assurance of Learning Exercise 4D: Construct an IFE Matrix for Hershey Company 124 Assurance of Learning Exercise 4E: Construct an IFE Matrix for Your University 124 Assurance of Learning Exercise 4F: Applying Research-Based View (RBV) Theory 125

Mini-Case on Buffalo wild wings, inC.: whaT do ouTsTanding ManageMenT, MaRKeTing, and finanCe exeCuTives do TogeTheR? 125 Current Readings 126 Endnotes 126

Chapter 5 Strategies in action 129 exeMPlaRY CoMPanY showCased: signeT JeweleRs liMiTed 130

long-Term objectives 130 Characteristics and Benefits of Objectives 131 • Financial versus Strategic Objectives 131 • Avoid Not Managing by Objectives 132

Types of strategies 132 Levels of Strategies 134

integration strategies 134 Forward Integration 135 • Backward Integration 136 • Horizontal Integration 137

intensive strategies 138 Market Penetration 138 • Market Development 138 • Product Development 139

x CONTENTS

82

diversification strategies 139 Related Diversification 140 • Unrelated Diversification 140

defensive strategies 141 Retrenchment 141 • Divestiture 142 • Liquidation 143

Michael Porter’s five generic strategies 144 Cost Leadership Strategies (Type 1 and Type 2) 145 • Differentiation Strategies (Type 3) 146 • Focus Strategies (Type 4 and Type 5) 147

Means for achieving strategies 148 Cooperation among Competitors 148 • Joint Venture and Partnering 148

aCadeMiC ReseaRCh CaPsule 5-1: aRe inTeRnaTional allianCes MoRe effeCTive wiTh CoMPeTiToRs oR nonCoMPeTiToRs? 149 Merger/Acquisition 150 • Private-Equity Acquisitions 151

Tactics to facilitate strategies 152 First Mover Advantages 152 • Outsourcing and Reshoring 152

strategic Management in nonprofit, governmental, and small firms 154

Educational Institutions 154 • Medical Organizations 155 • Governmental Agencies and Departments 155 • Small Firms 155

aCadeMiC ReseaRCh CaPsule 5-2: whaT aTTRiBuTes do gReaT enTRePReneuRs Possess? 156 iMPliCaTions foR sTRaTegisTs 156 iMPliCaTions foR sTudenTs 157

Chapter summary 157 Key Terms and Concepts 158 Issues for Review and Discussion 158 assuRanCe of leaRning exeRCises 159 Assurance of Learning Exercise 5A: Develop Hypothetical Hershey Company Strategies 159 Assurance of Learning Exercise 5B: Horizontal Integration in Practice 160 Assurance of Learning Exercise 5C: What Strategies Should Hershey Pursue in 2017? 160 Assurance of Learning Exercise 5D: Examine Strategy Articles 160 Assurance of Learning Exercise 5E: Classify Some Recent Strategies 161 Assurance of Learning Exercise 5F: How Risky Are Various Alternative Strategies? 162 Assurance of Learning Exercise 5G: Develop Alternative Strategies for Your University 162

Mini-Case on linKedin CoRPoRaTion: should linKedin CooPeRaTe wiTh faCeBooK? 163 Current Readings 164 Endnotes 164

Chapter 6 Strategy analysis and Choice 167 exeMPlaRY CoMPanY showCased: sMiTh & wesson holding CoRPoRaTion 168

The strategy analysis and Choice Process 168 The Process of Generating and Selecting Strategies 168

The strategy-formulation analytical framework 170 The Input Stage 171 • The Matching Stage 171 • The Decision Stage 171

The swoT Matrix 171 The strategic Position and action evaluation (sPaCe) Matrix 174 The Boston Consulting group (BCg) Matrix 178 The internal-external (ie) Matrix 181

aCadeMiC ReseaRCh CaPsule 6-1: a new ie MaTRix 184 The grand strategy Matrix 185 The decision stage: The Quantitative strategic Planning Matrix (QsPM) 186

Positive Features and Limitations of the QSPM 189

Cultural aspects of strategy analysis and Choice 190 The Politics of strategy analysis and Choice 190 Boards of directors: governance issues 191

aCadeMiC ReseaRCh CaPsule 6-2: how ManY BoaRd of diReCToRs MeMBeRs aRe ideal? 193 iMPliCaTions foR sTRaTegisTs 194 iMPliCaTions foR sTudenTs 194

Chapter summary 195 Key Terms and Concepts 196 Issues for Review and Discussion 196 assuRanCe of leaRning exeRCises 198 Assurance of Learning Exercise 6A: Perform a SWOT Analysis for Hershey Company 198 Assurance of Learning Exercise 6B: Develop a SPACE Matrix for Hershey 199 Assurance of Learning Exercise 6C: Develop a BCG Matrix for Hershey 199 Assurance of Learning Exercise 6D: Develop a QSPM for Hershey 199 Assurance of Learning Exercise 6E: Formulate Individual Strategies 200 Assurance of Learning Exercise 6F: Develop a BCG Matrix for Your University 200 Assurance of Learning Exercise 6G: The Role of Boards of Directors 200 Assurance of Learning Exercise 6H: Locate Companies in a Grand Strategy Matrix 201

Mini-Case on The sTaRBuCKs CoRPoRaTion: whaT sTaRBuCKs sTRaTegies aRe BesT? 201 Current Readings 202 Endnotes 202

Part 3 Strategy Implementation 204

Chapter 7 Implementing Strategies: Management, Operations, and Human resource Issues 205

exeMPlaRY CoMPanY showCased: PaPa John’s inTeRnaTional, inC. 206

Transitioning from formulating to implementing strategies 206 The need for Clear annual objectives 208 The need for Clear Policies 211 allocate Resources and Manage Conflict 211

Allocate Resources 211 • Manage Conflict 213

Match structure with strategy 213 Types of organizational structure 214

The Functional Structure 214 • The Divisional Structure 215 • The Strategic Business Unit (SBU) Structure 217 • The Matrix Structure 218

CONTENTS xi

dos and don’ts in developing organizational Charts 219 aCadeMiC ReseaRCh CaPsule 7-1: whY is The Coo PosiTion Being deleTed in ManY oRganizaTions? 221

strategic Production/operations issues 222 Restructuring and Reengineering 222 • Manage Resistance to Change 223 • Decide Where and How to Produce Goods 223 • Employee Stock Ownership Plans (ESOPs) 224

strategic human Resource issues 225 Linking Performance and Pay to Strategy 225 • Balance Work Life and Home Life 227 • Develop a Diverse Workforce 228

aCadeMiC ReseaRCh CaPsule 7-2: how do woMen vs. Men Ceos PeRfoRM? 229 Use Caution in Hiring a Rival’s Employees 229 • Create a Strategy- Supportive Culture 232 • Use Caution in Monitoring Employees’ Social Media 233 • Develop a Corporate Wellness Program 233

iMPliCaTions foR sTRaTegisTs 235 iMPliCaTions foR sTudenTs 236

Chapter summary 237 Key Terms and Concepts 237 Issues for Review and Discussion 237 assuRanCe of leaRning exeRCises 239 Assurance of Learning Exercise 7A: Critique Corporate Organizational Charts 239 Assurance of Learning Exercise 7B: Draw an Organizational Chart for Hershey Company Using a Free, Online Template 239 Assurance of Learning Exercise 7C: Do Organizations Really Establish Objectives? 239 Assurance of Learning Exercise 7D: Understanding Your University’s Culture 240

Mini-Case on hilTon woRldwide holdings: is The new hilTon PoliCY waRRanTed? 240 Current Readings 241 Endnotes 241

Chapter 8 Implementing Strategies: Marketing, Finance/accounting, r&D, and MIS Issues 243

exeMPlaRY CoMPanY showCased: fooT loCKeR, inC. 244

strategic Marketing issues 244 social Media Marketing 245 Market segmentation 247 Product Positioning and Perceptual Mapping 250

Author Commentary 251

strategic finance/accounting issues 253 ePs/eBiT analysis: acquire needed Capital 254 Projected financial statements 258 Projected financial statement analysis for d. R. horton 260 Corporate valuation 262

aCadeMiC ReseaRCh CaPsule 8-1: when should we oveRPaY To aCQuiRe a fiRM? 264 Corporate Valuation Methods 264

iPos, Cash Management, and Corporate Bonds 266 Go Public With An IPO? 266 Keep Cash Offshore if Earned Offshore? 267 Issue Corporate Bonds for What Purpose? 267

strategic Research and development (R&d) issues 267 strategic Management information systems (Mis) issues 269

Mobile Tracking of Employees 270

iMPliCaTions foR sTRaTegisTs 270 iMPliCaTions foR sTudenTs 271 Mobile Apps for Customers 271

Chapter summary 271 Key Terms and Concepts 272 Issues for Review and Discussion 272 assuRanCe of leaRning exeRCises Assurance of Learning Exercise 8A: Develop a Product-Positioning Map for Hershey Company Assurance of Learning Exercise 8B: Gain Practice Developing Perceptual Maps 274 Assurance of Learning Exercise 8C: Perform an EPS/EBIT Analysis for Hershey Company 274 Assurance of Learning Exercise 8D: Prepare Projected Financial Statements for Hershey Company Assurance of Learning Exercise 8E: Determine the Cash Value of Hershey Company 275 Assurance of Learning Exercise 8F: Develop a Product-Positioning Map for Your University 275 Assurance of Learning Exercise 8G: Do Banks Require Projected Financial Statements? 27

Mini-Case on aliBaBa gRouP holding lTd.: is selling sToCK oR Bonds BesT To Raise CaPiTal? 276 Current Readings 277 Endnotes 277

Part 4 Strategy Evaluation 278

Chapter 9 Strategy review, Evaluation, and Control 279

exeMPlaRY CoMPanY showCased: niKe, inC. 280 The strategy-evaluation Process, Criteria, and Methods 280

The Process of Evaluating Strategies 283

The Three strategy-evaluation activities 284 Reviewing Bases of Strategy 284 • Measuring Organizational Performance 286 • Taking Corrective Actions 287

The Balanced scorecard 289 Published sources of strategy-evaluation information 291 Characteristics of an effective strategy evaluation system 291 Contingency Planning 292 auditing 293 Twenty-first-Century Challenges in strategic Management 294

The Art or Science Issue 294 • The Visible or Hidden Issue 295 • The Top-Down or Bottom-Up Approach 296

guidelines for effective strategic Management 296 iMPliCaTions foR sTRaTegisTs 298 iMPliCaTions foR sTudenTs 298

Chapter summary 299 Key Terms and Concepts 299 Issues for Review and Discussion 299 assuRanCe of leaRning exeRCises 300

xii CONTENTS

274

274

275

6

Assurance of Learning Exercise 9A: Examine 100 Balanced Scorecards 300 Assurance of Learning Exercise 9B: Prepare a Strategy-Evaluation Report for Hershey Company 301 Assurance of Learning Exercise 9C: Evaluate Your University’s Strategies 301

Mini-Case on TJx CoMPanies, inC.: is seCReT sTRaTegiC Planning BesT foR TJx? 301 Current Readings 302 Endnotes 302

Part 5 Key Strategic-Management topics 304

Chapter 10 Business Ethics, Social responsibility, and Environmental Sustainability 305

exeMPlaRY CoMPanY showCased: ChiCK-fil-a 306

why “good ethics is good Business” 306 Does It Pay to Be Ethical? 307

aCadeMiC ReseaRCh CaPsule 10-1: whaT Can we leaRn fRoM high-PeRfoRManCe CoMPanies? 308 aCadeMiC ReseaRCh CaPsule 10-2: who is PRone To Be uneThiCal in a Business? 309 How to Establish an Ethics Culture 309

whistle-Blowing, Bribery, and workplace Romance 310 Whistle-Blowing 310 • Avoid Bribery 311 • Workplace Romance 312

social Responsibility and Policy 313 aCadeMiC ReseaRCh CaPsule 10-3: does iT PaY To Be soCiallY ResPonsiBle? 314 Design and Articulate a Social Policy 314 • Social Policies on Retirement 314

environmental sustainability 315 What Firms Are the Best Stewards? 316 • Sustainability Reports 317 • The Office of Environmental Affairs 318 • ISO 14000/14001 Certification 318

wildlife welfare 319 Food Suppliers and Animal Welfare 321

iMPliCaTions foR sTRaTegisTs 321 iMPliCaTions foR sTudenTs 322

Chapter summary 322 Key Terms and Concepts 322 Issues for Review and Discussion 322 assuRanCe of leaRning exeRCises 323 Assurance of Learning Exercise 10A: How Does Your Municipality Compare to Others on Being Pollution-Safe? 323 Assurance of Learning Exercise 10B: Does Hershey Company or Mars, Inc. Win on Sustainability? 324 Assurance of Learning Exercise 10C: The Ethics of Spying on Competitors 324 Assurance of Learning Exercise 10D: Who Prepares a Sustainability Report? 325

Mini-Case on avon PRoduCTs, inC.: would ClaiMs of eThiCal wRongdoing BY a CoMPanY iMPaCT YouR BuYing The fiRM’s PRoduCTs? 325 Current Readings 326 Endnotes 326

Chapter 11 Global and International Issues 329

exeMPlaRY CoMPanY showCased: alCoa, inC. 330 The nature of doing Business globally 330

Multinational Firms 332 • Different Languages Globally 333 • Labor Unions across Europe 333

aCadeMiC ReseaRCh CaPsule 11-1: how ManY languages aRe TheRe gloBallY? 333

advantages and disadvantages of doing Business globally 334 The global Challenge 335

aCadeMiC ReseaRCh CaPsule 11-2: how do fiRMs deCide wheRe To exPand? 336

Tax Rates and Tax inversions 336 Tax Rates 336 • Tax Inversions 338

american versus foreign Business Culture 338 Communication Differences across Countries 340

Business Culture across Countries 341 Mexico’s Business Culture 341 • Japan’s Business Culture 342 • China’s Business Culture 343 • India’s Business Culture 344

Business Climate across Countries 344 Africa’s Business Climate 345 • China’s Business Climate 346 • Brazil's Business Climate 347 • Indonesia’s Business Climate 347 • India’s Business Climate 347 • Japan’s Business Climate 348 • Mexico’s Business Climate 348 • Vietnam’s Business Climate 349

iMPliCaTions foR sTRaTegisTs 350 iMPliCaTions foR sTudenTs 350

Chapter summary 351 Key Terms and Concepts 351 Issues for Review and Discussion 351 assuRanCe of leaRning exeRCises 352 Assurance of Learning Exercise 11A: Business Cultures across Countries: A Hershey Company Analysis 352 Assurance of Learning Exercise 11B: Hershey Company Wants to Enter Africa. Help Them 353 Assurance of Learning Exercise 11C: Does Your University Recruit in Foreign Countries? 353 Assurance of Learning Exercise 11D: Assess Differences in Culture across Countries 353 Assurance of Learning Exercise 11E: How Well Traveled Are Business Students at Your University? 354

Mini-Case on doMino’s Pizza, inC.: To gRow gloBallY The RighT waY = follow doMino’s? 354 Current Readings 355 Endnotes 355

Part 6 Strategic-Management Case analysis 356

How to Prepare and Present a Case analysis 357

what is a strategic-Management Case? 358 guidelines for Preparing Case analyses 358

The Need for Practicality 358 • The Need for Justification 358 • The Need for Realism 358 • The Need for Specificity 358 • The Need for Originality 359 • The Need to Contribute 359

CONTENTS xiii

The Case Method versus lecture approach 359 The Cross-Examination 359

Preparing a written Case analysis 360 The Executive Summary 360 • The Comprehensive Written Analysis 360 • Steps in Preparing a Comprehensive Written Analysis 360

Making an oral Presentation 361 Controlling Your Voice 361 • Managing Body Language 361 • Speaking from Notes 362 • Constructing Visual Aids 362 • Answering Questions 362

Tips for success in Case analysis 362

Sample Case Analysis Outline 363 • Recommended Time Allocation for Presenting a Case Analysis 365 Assurance of Learning Exercise Strategic Planning for Gruma SAB 365

strategic-Management Cases

Glossary 627

Name Index 637

Subject Index 643

xiv CONTENTS

Cases

USa-Headquartered Service Firms

Restaurants

1. Dunkin’ Brands Group, Inc. (DNKN) 370 2. Krispy Kreme Doughnuts, Inc. (KKD) 378

Lodging and Movies

3. Marriott International, Inc. (MAR) 385 4. Wynn Resorts Limited (WYNN) 396 5. Cinemark Holdings, Inc. (CNK) 404

Internet Based

6. Facebook, Inc. (FB) 412 7. Zynga, Inc. (ZNGA) 420 8. The Priceline Group, Inc. (PCLN) 428

Stores and Banks

9. The TJX Companies, Inc. (TJX) 437 10. Tiffany & Company (TIF) 446 11. Citigroup Inc. (C) 455

Airlines and Airfreight

12. JetBlue Airways Corporation (JBLU) 464 13. FedEx Corporation (FDX) 472

USa-Headquartered Manufacturing Firms

Food

14. Tyson Foods, Inc. (TSN) 481 15. Constellation Brands Inc. (STZ) 491

Leisure Sports

16. GoPro, Inc. (GPRO) 500 17. Arctic Cat Inc. (ACAT) 508

Automobiles and Motorcycles

18. Tesla Motors, Inc. (TSLA) 516 19. Ford Motor Company (F) 522 20. Harley-Davidson, Inc. (HOG) 532

Computers/Software

21. Apple Inc. (AAPL) 540 22. International Business Machines Corporation (IBM) 549

Personal Products

23. TASER International, Inc. (TASR) 558 24. Revlon, Inc. (REV) 566

xv

Nonprofit Organizations

25. World Relief 574 26. World Wildlife Fund for Nature (WWF) 582

Outside-USA Headquartered Firms

27. Michael Kors Holdings Ltd. (KORS) 591 28. SABMiller plc (SAB) 599 29. Gruma S.A.B. de C.V. (GMK) 609 30. Restaurant Brands International, Inc. (QSR) 617

xvi CASES

xvii xvii

Preface

Why Adopt This Text? This textbook is trusted across five continents to provide managers the latest skills and con- cepts needed to effectively formulate and efficiently implement a strategic plan—a game plan, if you will—that can lead to sustainable competitive advantage for any type of business. The Association to Advance Collegiate Schools of Business (AACSB) International increasingly advocates a more skills-oriented, practical approach in business books, which this text provides, rather than a theory-based approach. Strategic Management Concepts and Cases: A Competitive Advantage Approach meets all AACSB International guidelines for the strategic-management course at both the graduate and undergraduate levels, and previous editions have been used at more than 500 colleges and universities globally. We believe you will find this sixteenth edition to be the best textbook available for communicating both the excitement and value of strategic management. Concise and exceptionally well organized, this text is now available in English, Chinese, Spanish, Thai, German, Japanese, Farsi, Indonesian, Indian, Vietnamese, and Arabic. A version in Russian is being negotiated. In addition to universities, hundreds of companies, orga- nizations, and governmental bodies use this text as a management guide.

An MBA student using this text recently wrote the following:

Dear Dr. David: I am in the midst of my MBA at Adams State University here in Colorado. I’m 7 of 12 classes in with a 4.0 average. As a result, I’ve been through about 14 textbooks (not to mention the 60 or so I went through for my BBA at the University of California (UC)-Berkeley. This is the first time I’ve written to the author of a textbook. Why? Because the David book is by far the best textbook I have ever used. It’s clear. It’s accurate. It’s not full of opinion masquerading as fact! You, sir, are to be commended. Usually when I spend an insane amount of money on a text, I’m broke. But your text is worth every cent, and I’ll keep it forever. Well done sir! Respectively, Eric Seiden, MBA Student in Littleton, Colorado (August 10, 2015)

Eric N. Sims, a professor who has used this text for his classes at Sonoma State University in California, says:

I have read many strategy books. I am going to use the David book. What I like—to steal a line from Alabama coach Nick Saban—is your book teaches “a process.” I believe at the end of your book, you can actually help a company do strategic planning. In contrast, other books teach a number of near and far concepts related to strategy.

A recent reviewer of this textbook shares his opinion:

One thing I admire most about the David text is that it follows the fundamental sequence of strategy formulation, implementation, and evaluation. There is a basic flow from vision/mission to internal/external environmental scanning, to strategy development, selection, implementation, and evaluation. This has been, and continues to be, a hallmark of the David text. Many other strategy texts are more disjointed in their presentation, and thus confusing to the student, especially at the undergraduate level.

New to This Edition 1. This 16th edition is 40 percent new and improved from the prior edition. 2. A brand new COHESION CASE on The Hershey Company (2015) is provided. Hershey

is one of the most successful, well-known, and best-managed global companies in the world. Students apply strategy concepts to Hershey at the end of each chapter through new, innovative Assurance of Learning Exercises.

3. Brand-new one-page MINI-CASES appear at the end of each chapter, complete with ques- tions designed to apply chapter concepts. Provided for the first time ever in this text, the mini-cases focus on the following companies: Chapter 1: Kroger Company Chapter 2: Walt Disney Company Chapter 3: Coach Chapter 4: Buffalo Wild Wings Chapter 5: LinkedIn Chapter 6: Starbucks Chapter 7: Hilton Worldwide Chapter 8: Alibaba Chapter 9: TJX Companies Chapter 10: Avon Products Chapter 11: Domino’s Pizza

4. Original, half-page ACADEMIC RESEARCH CAPSULES are presented in each chapter to showcase how new strategic-management research is impacting business practice. Two capsules per chapter are provided—for the first time ever in this text.

5. At the end of each chapter are new sections titled IMPLICATIONS FOR STRATEGISTS and IMPLICATIONS FOR STUDENTS that highlight how companies can best gain and sustain competitive advantages.

6. Brand new EXEMPLARY COMPANY CAPSULES appear at the beginning of each chapter and showcase a company that is employing strategic management exceptionally well. The capsules focus on the following companies: Chapter 1: Apple Chapter 2: H&R Block Chapter 3: Chipotle Mexican Grill Chapter 4: Netflix Chapter 5: Signet Jewelers Limited Chapter 6: Smith & Wesson Holding Corp. Chapter 7: Papa John’s International Chapter 8: Foot Locker Chapter 9: Nike Chapter 10: Chick-fil-A Chapter 11: Alcoa

7. Chapter 2, The Business Vision and Mission, is 60 percent new, due to current research and practice that reveals the need for “these statements to be more customer-oriented.”

8. Chapter 11, Global and International Issues, is shortened by 30 percent but provides new coverage of cultural and conceptual strategic-management differences across countries. Doing business globally has become a necessity in most industries.

9. Chapter 10, Business Ethics, Social Responsibility, and Environmental Sustainability, provides extensive new coverage of ethics, workplace romance, flirting, hiring away rival firms’ employees, wildlife welfare, and sustainability. “Good ethics is good business.” Unique to strategic-management texts, the sustainability discussion is strengthened in this edition to promote and encourage firms to conduct operations with respect for the environment—an important concern for consumers, companies, society, and AACSB International.

10. Sixty-four unique ASSURANCE OF LEARNING EXERCISES appear at the end of chapters to apply chapter concepts. The exercises prepare students for strategic- management case analysis. An additional excellent exercise for each chapter is provided in the Chapter Instructor’s Resource Manual.

11. More than 200 new EXAMPLES bring the chapters to life. 12. At the end of chapters are 78 new (459 total) REVIEW QUESTIONS related to chapter

content. 13. All the Current Readings at the end of the chapters are new, and up-to-date research and

theories of seminal thinkers are included. However, practical aspects of strategic manage- ment are center stage and the trademark of this text.

14. Every sentence and paragraph has been scrutinized, modified, clarified, streamlined, updated, and improved to enhance the content and caliber of presentation.