Crafting And Executing Strategy Concepts And Readings 20th Edition Arthur Thompson, A. J. Strickland, John Gamble - Solutions

The strategic benefits and risks of expanding a company’s horizontal scope through mergers and acquisitions.
When being a first mover or a fast follower or a late mover is most advantageous.
Whether and when to pursue offensive or defensive strategic moves to improve a company’s market position.
Which rival companies appear to be employing some type of focused strategy?
How would you characterize Stihl’s competitive strategy? Should it be classified as a low-cost provider strategy? A differentiation strategy? A best-cost strategy?Also, has the company chosen to focus on a narrow piece of the market, or does it appear to pursue a broad market approach? Explain
Stihl is the world’s leading manufacturer and marketer of chain saws, with annual sales exceeding $3.7 billion. With innovations dating to its 1929 invention of the gasoline-powered chain saw, the company holds over 1,000 patents related to chain saws and outdoor power tools. The company’s
Best Buy is the largest consumer electronics retailer in the United States, with 2013 sales of almost $50 billion. The company competes aggressively on price with such rivals as Costco, Sam’s Club, Walmart, and Target, but it is also known by consumers for its first-rate customer service. Best
The attributes of a best-cost provider strategy—a hybrid of low-cost provider and differentiation strategies.
The major avenues to a competitive advantage based on differentiating a company’s product or service offering from the offerings of rivals.
The major avenues for achieving a competitive advantage based on lower costs.
What distinguishes each of the five generic strategies and why some of these strategies work better in certain kinds of competitive conditions than in others.
Using the methodology presented in Table 4.4 , do a weighted competitive strength assessment for your company and two other companies that you and your comanagers consider to be very close competitors.
What are the key elements of your company’s value chain? Refer to Figure 4.3 in developing your answer.
What internal strengths and weaknesses does your company have? What external market opportunities for growth and increased profitability exist for your company?What external threats to your company’s future well-being and profitability do you and your co-managers see? What does the preceding SWOT
Using the formulas in Table 4.1 and the data in your company’s latest financial statements, calculate the following measures of financial performance for your company:a. Operating profit marginb. Total return on total assetsc. Current ratiod. Working capitale. Long-term debt-to-capital ratiof.
Using the methodology illustrated in Table 4.3 and your knowledge as an automobile owner, prepare a competitive strength assessment for General Motors and its rivals Ford, Chrysler, Toyota, and Honda. Each of the five automobile manufacturers should be evaluated on the key success factors and
What value chain activities might be important in securing or maintaining American Giant’s competitive advantage? Explain your answer.
How would its various costs and activities differ if the company chose to produce its hoodies in Asia?
Review the information in Illustration Capsule 4.1 concerning American Giant’s average costs of producing and selling a hoodie sweatshirt, and compare this with the representative value chain depicted in Figure 4.3 . Then answer the following questions:a. Which of the company’s costs correspond
Using the financial ratios provided in Table 4.1 and the financial statement information presented on pp. 110–112 for Costco Wholesale Corporation, calculate the following ratios for Costco for both 2012 and 2013:a. Gross profit marginb. Operating profit marginc. Net profit margind.
what is the
How well the company’s strategy delivers on the industry key success factors.
Whether this is likely to change in the course of competitive interactions.
Whether the company occupies a stronger market position than rivals.
Whether industry profitability will be favorably or unfavorably affected by the prevailing driving forces.
Whether the presence of complementors and the possibility of cooperative actions improve the company’s prospects.
Whether strong competitive forces are squeezing industry profitability to subpar levels.
How the company is being impacted by the state of the macro-environment.
Draw circles around each strategic group, making the circles proportional to the size of the group’s share of total industry sales revenues 1. On what basis do buyers of the industry’s product choose between the competing brands of sellers? That is, what product attributes and service
Assign firms occupying about the same map location to the same strategic group.
Plot the firms on a two-variable map using pairs of these variables.
Identify the competitive characteristics that delineate strategic approaches used in the industry. Typical variables used in creating strategic group maps are price/quality range (high, medium, low), geographic coverage (local, regional, national, global), product-line breadth (wide, narrow),
2. Initiating actions calculated to shift the competitive forces in the company’s favor by altering the underlying factors driving the five forces.
1. Pursuing avenues that shield the firm from as many of the different competitive pressures as possible.
Buyers have discretion to delay their purchases or perhaps even not make a purchase at all. Consumers often have the option to delay purchases of durable goods, such as major appliances, or discretionary goods, such as hot tubs and home entertainment centers, if they are not happy with the prices
Buyers are well informed about sellers’ products, prices, and costs. The more information buyers have, the better bargaining position they are in. The mushrooming availability of product information on the Internet (and its ready access on smartphones) is giving added bargaining power to
Buyers pose a credible threat of integrating backward into the business of sellers.Companies like Anheuser-Busch, Coors, and Heinz have partially integrated backward into metal-can manufacturing to gain bargaining power in obtaining the balance of their can requirements from otherwise powerful
Buyers are large and few in number relative to the number of sellers. The larger the buyers, the more important their business is to the seller and the more sellers will be willing to grant concessions.
Buyers’ costs of switching to competing brands or substitutes are relatively low.Switching costs put a cap on how much industry producers can raise prices or reduce quality before they will lose the buyer’s business.
Industry goods are standardized or differentiation is weak. In such circumstances, buyers make their selections on the basis of price, which increases price competition among vendors.
Buyer demand is weak in relation to industry supply. Weak or declining demand and the resulting excess supply create a “buyers’ market,” in which bargainhunting buyers are able to press for better deals and special treatment.
Industry members are incapable of integrating backward to self-manufacture items they have been buying from suppliers. As a rule, suppliers are safe from the threat of self-manufacture by their customers until the volume of parts a customer needs becomes large enough for the customer to justify
The supplier industry is dominated by a few large companies and it is more concentrated than the industry it sells to. Suppliers with sizable market shares and strong demand for the items they supply generally have sufficient bargaining power to charge high prices and deny requests from industry
It is difficult or costly for industry members to switch their purchases from one supplier to another. Low switching costs limit supplier bargaining power by enabling industry members to change suppliers if any one supplier attempts to raise prices by more than the costs of switching. Thus, the
Suppliers provide differentiated inputs that enhance the performance of the industry’s product. The more valuable a particular input is in terms of enhancing the performance or quality of the products of industry members, the more bargaining leverage suppliers have. In contrast, the suppliers of
Demand for suppliers’ products is high and the products are in short supply. A surge in the demand for particular items shifts the bargaining power to the suppliers of those products; suppliers of items in short supply have pricing power.
There are restrictive trade policies. In international markets, host governments commonly limit foreign entry and must approve all foreign
There are restrictive regulatory policies. Regulated industries like cable TV, telecommunications, electric and gas utilities, radio and television broadcasting, liquor retailing, and railroads entail government-controlled entry. Government agencies can also limit or even bar entry by requiring
When existing sellers have strong, well-functioning distributor–dealer networks, a newcomer has an uphill struggle in squeezing its way into existing distribution channels. Potential entrants sometimes have to “buy” their way into wholesale or retail channels by cutting their prices to
There are difficulties in building a network of distributors/dealers or in securing adequate space on retailers’ shelves. A potential entrant can face numerous distribution-channel challenges. Wholesale distributors may be reluctant to take on a product that lacks buyer recognition. Retailers
Capital requirements are high. The larger the total dollar investment needed to enter the market successfully, the more limited the pool of potential entrants.The most obvious capital requirements for new entrants relate to manufacturing facilities and equipment, introductory advertising and sales
There are strong “network effects” in customer demand. In industries where buyers are more attracted to a product when there are many other users of the product, there are said to be “network effects,” since demand is higher the larger the network of users. Video game systems are an
Patents and other forms of intellectual property protection are in place. In a number of industries, entry is prevented due to the existence of intellectual property protection laws that remain in place for a given number of years. Often, companies have a “wall of patents” in place to prevent
LO 4 How to use multiple frameworks to determine whether an industry’s outlook presents a company with sufficiently attractive opportunities for growth and profitability.
LO 3 How to map the market positions of key groups of industry rivals.
LO 2 How to use analytic tools to diagnose the competitive conditions in a company’s industry.
LO 1 How to recognize the factors in a company’s broad macro-environment that may have strategic significance.
3. What are the three to four key elements of your company’s strategy?
When you are finished, check to see if your vision statement meets the conditions for an effectively worded strategic vision set forth in Table 2.1. If not, then revise it accordingly. What would be a good slogan that captures the essence of your strategic vision and that could be used to help
Meet with your co-managers and prepare a strategic vision statement for your company. It should be at least one sentence long and no longer than a brief paragraph.
The sum of a company’s strategic vision, mission, objectives, and strategy constitutes a strategic plan for coping with industry conditions, outcompeting rivals, meeting objectives, and making progress toward aspirational goals. Stretch objectives spur exceptional performance and help build a
5. Monitoring developments, evaluating performance, and initiating corrective adjustments in light of actual experience, changing conditions, new ideas, and new opportunities. This stage of the strategy management process is the trigger point for deciding whether to continue or change the
4. Executing the chosen strategy and converting the strategic plan into action. Management’s agenda for executing the chosen strategy emerges from assessing what the company will have to do to achieve the targeted financial and strategic performance.Management’s handling of the strategy
Thus, strategy making is an inclusive collaborative activity involving not only senior company executives but also the heads of major business divisions, functional-area managers, and operating managers on the frontlines.
3. Crafting a strategy to achieve the objectives and move the company along the strategic course that management has charted. Masterful strategies come from doing things differently from competitors where it counts—out-innovating them, being more efficient, being more imaginative, adapting
2. Setting objectives to convert the vision and mission into performance targets that can be used as yardsticks for measuring the company’s performance. Objectives need to spell out how much of what kind of performance by when. Two broad types of objectives are required: financial objectives and
1. Developing a strategic vision of the company’s future, a mission statement that defines the company’s current purpose, and a set of core values to guide the pursuit of the vision and mission. This stage of strategy making provides direction for the company, motivates and inspires company
Exerting the internal leadership needed to propel implementation forward.
Creating a company culture conducive to successful strategy execution.
Motivating people and tying rewards directly to the achievement of performance objectives.
Installing information and operating systems that enable company personnel to perform essential activities.
Organizing the work effort along the lines of best practice.
Ensuring that policies and procedures facilitate effective strategy execution.
Allocating ample resources to the activities critical to strategic success.
Developing and strengthening strategy-supporting resources and capabilities.
Staffing the organization to obtain needed skills and expertise.
Creating a strategy-supporting structure.
4. Executing the chosen strategy efficiently and effectively.
3. Crafting a strategy for advancing the company along the path management has charted and achieving its performance objectives.
2. Setting objectives for measuring the company’s performance and tracking its progress in moving in the intended long-term direction.
1. Developing a strategic vision that charts the company’s long-term direction, a mission statement that describes the company’s purpose, and a set of core values to guide the pursuit of the vision and mission.
LO 5 The role and responsibility of a company’s board of directors in overseeing the strategic management process.
LO 4 What a company must do to achieve operating excellence and to execute its strategy proficiently.
LO 3 Why the strategic initiatives taken at various organizational levels must be tightly coordinated to achieve companywide performance targets.
LO 2 The importance of setting both strategic and financial objectives.
LO 1 Why it is critical for company managers to have a clear strategic vision of where a company needs to head and why.
Does it appear to have a competitive advantage, and is it likely to be sustainable?
Does your company appear to be in a sound financial condition?
Is your company in a good, average, or weak competitive position vis-à-vis rival companies?
1. What is our company’s current situation? A substantive answer to this question should cover the following issues:
How are we going to get there?
Where do we want to go from here?
What is our present situation?
3. Go to www.nytco.com/investors and check whether The New York Times’ recent financial reports indicate that its business model is working. Does the company’s business model remain sound as more consumers go to the Internet to find general information and stay abreast of current events and
2. Elements of eBay’s strategy have evolved in meaningful ways since the company’s founding in 1995. After reviewing all of the links at the company’s investor relations site, which can be found at investor.ebayinc.com, prepare a one- to two-page report that discusses how its strategy has
1. Based on your experiences as a coffee consumer, does Starbucks’s strategy (as described in Illustration Capsule 1.1) seem to set it apart from rivals? Does the strategy seem to be keyed to a cost-based advantage, differentiating features, serving the unique needs of a niche, or some
7. Crafting and executing strategy are core management functions. How well a company performs and the degree of market success it enjoys are directly attributable to the caliber of its strategy and the proficiency with which the strategy is executed.
6. A winning strategy will pass three tests: (1) Fit (external, internal, and dynamic consistency), (2) Competitive Advantage (durable competitive advantage), and (3)Performance (outstanding financial and market performance).
5. A company’s business model sets forth the logic for how its strategy will create value for customers and at the same time generate revenues sufficient to cover costs and realize a profit. Thus, it contains two crucial elements: (1) the customer value proposition —a plan for satisfying
4. A company’s strategy typically evolves over time, emerging from a blend of (1)proactive deliberate actions on the part of company managers to improve the strategy and (2)• reactive emergent responses to unanticipated developments and fresh market conditions.

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Crafting And Executing Strategy Concepts And Readings 20th Edition Arthur Thompson, A. J. Strickland, John Gamble - Solutions

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