Strategic Management Concepts & Cases

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D AN •HO L S E K R I I S

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T O

N I H Strategic Management Concepts & Cases

Competitiveness and Globalization

8th Edition

Michael A. Hitt Texas A&M University

R. Duane Ireland Texas A&M University

Robert E. Hoskisson Arizona State University Brief Contents

copyright page Preface, iii Part 1: Strategic Management Inputs 1 1. Strategic Management and Strategic Competitiveness, 3 2. The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis, 21 3. The Internal Environment: Resources, Capabilities, and Core Competencies, 39 Part 2: Strategic Actions: Strategy Formulation 71 4. Business-Level Strategy, 63 5. Competitive Rivalry and Competitive Dynamics, 85 6. Corporate-Level Strategy, 241 7. Acquisition and Restructuring Strategies, 261 8. International Strategy, 283 9. Cooperative Strategy, 299 Part 3: Strategic Actions: Strategy Implementation 289 10. Corporate Governance, 314 11. Organizational Structure and Controls, 317 12. Strategic Leadership, 339 13. Strategic Entrepreneurship, 363 Part 4: Cases 316 Name Index, I-1 Company Index, I-12

iii Contents

To all of my current and former students. I am blessed to have the opportunity Preface xxii to teach and learn from you; there is a little piece of each of you in this book. —Michael A. Hitt Part 1: Strategic Management Inputs 1

To Jackson Blair Funkhouser, my wonderful new grandson. My hopes for your 1: Strategic Management and Strategic Competitiveness 2 are that you will always smile, that you will open your heart to those who Opening Case: E-Commerce Strategy: Changing the love you, that you will keep the fire burning, and that you will never forget to Nature of Competition 3 dream, baby, dream. I love you, Jackson. The Challenge of Strategic Management 7 —R. Duane Ireland Strategic Management and Strategic Competitiveness 2 The 21st Century Competitive Landscape To my dear wife, Kathy, who has been my greatest friend and support through Strategy Right Now: The Impermanence of Success 10 life, and I hope will remain so into the eternities. The Global Economy 12 —Robert E. Hoskisson Technology and Technological Changes 17 Strategic Focus: Compaq is Flailing against Internet Technological Trends 19 The I/O Model of Above-Average Returns 21 The Resource-Based Model of Above-Average Returns 23 Strategic Intent and Strategic Mission 26 Strategic Intent 26 Strategic Mission 27 Stakeholders 28 Classification of Stakeholders 28 Strategic Focus: Both Qwest Communication and Global Crossing Make Offers for U.S. West 32 Organizational Strategists 34 The Work of Effective Strategists 36 Organizational Strategists 34 The Strategic Management Process 37 Summary 39 • Review Questions 40 • Experiential Exercises 41 Graph 42 • Notes 43

2: The External Environment: Opportunities, Threats, Industry Competition, and Competitor Analysis 34 Organizational Strategists 34 Images top: © Don Hammond/Design Pics/Corbis, side: Getty

vi vii

The Work of Effective Strategists 36 Strategic Focus: Both Qwest Communication and Global Crossing Contents Organizational Strategists 34 Make Offers for U.S. West 32 Organizational Strategists 34

Contents The Strategic Management Process 37 Summary 39 • Review Questions 40 • Experiential Exercises 41 The Work of Effective Strategists 36 Graph 42 • Notes 43 Summary 39 • Review Questions 40 • Experiential Exercises 41 Graph 42 • Notes 43 3: The Internal Environment: Resources, Capabilities, and Core Competencies 45 The Challenge of Strategic Management 7 Part 4: Cases Strategic Management and Strategic Preparing an Effective Case Analysis C-iii Competitiveness 2 Case 1: 9Live: Birth of a TV Channel 1 The 21st Century Competitive Landscape Case 2: A. G. Lafley: Innovating P&G’s Innovations 10 Strategy Right Now: The Impermanence of Success 10 Case 3: AMD in 2005: Coming Out of Intel’s Shadow? 18 The Global Economy 12 Case 4: Anheuser-Busch and Harbin Brewery Group of China 30 Technology and Technological Changes 17 Case 5: Bank One’s Response to the Mutual Fund Scandal 45 Strategic Focus: Compaq is Flailing against Internet Technological Trends Case 6: China on the I-Way 53 19 Case 7: Governance Problems in Citigroup Japan 60 The I/O Model of Above-Average Returns 21 Case 8: CQUAY Technologies Corp. 71 The Resource-Based Model of Above-Average Returns 23 Case 9: DaimlerChrysler: Corporate Governance Dynamics in a Global Company 90 Strategic Intent and Strategic Mission 26 Case 10: De Beers: End of Monopoly? 96 Strategic Intent 26 Strategic Mission 27 Case 11: Dell in China: The Strategic Rethinking 110 Stakeholders 28 Case 12: Fiat and GM: The Troubled Alliance 116 Classification of Stakeholders 28 Case 13: General Motors Defense 125 Strategic Focus: Both Qwest Communication and Global Crossing Case 14: Louis V. Gerstner Jr.: The Man Who Turned IBM Around 133 Make Offers for U.S. West 32 Case 15: Humana Inc.: Turnaround of a Health Insurer 141 Organizational Strategists 34 Case 15: L’Oreal’s Business Strategy 158 The Work of Effective Strategists 36 Case 16: Lucchetti 166 Summary 39 • Review Questions 40 • Experiential Exercises 41 Case 17: Lufthansa 2003: Energizing a Decade of Change 185 Graph 42 • Notes 43 Case 18: MapQuest 207 Case 19: Marks and Spencer: The Downfall and Leadership Vacuum 220 Part 2: Strategic Actions: Strategy Formulation 33 Case 20: Mass Retailing in Asia 227 Case 21: News Corp. in 2005: Consolidating the DirecTV Acquistion 237 4: Business-Level Strategy Case 22: Nucor in 2005 246 The Challenge of Strategic Management 7 Case 23: ONGC’s Growth Strategy 269 Strategic Management and Strategic Case 24: Implementation of the Balanced Scorecard as a Means of Corporate Learning: Competitiveness 2 The Porsche Case: 277 The 21st Century Competitive Landscape Case 25: Tata Steel: A Century of Corporate Secial Responsibilities 285 Strategy Right Now: The Impermanence of Success 10 Case 25: Succession Battles at Viacom 299 The Global Economy 12 Case 26: Shanghai Volkswagen: Implementing Project Management in the Electrical Technology and Technological Changes 17 Engineering Division 308 Strategic Focus: Compaq is Flailing against Internet Technological Trends 19 Case 27: Wal-Mart Stores Inc.: Dominating Global Retailing 320 The I/O Model of Above-Average Returns 21 Case 28: Whole Foods Market 2005: Will There Be Enough Organic Food to Satisfy the The Resource-Based Model of Above-Average Returns 23 Growing Demand? 334 Strategic Intent and Strategic Mission 26 Name Index I-1 Strategic Intent 26 Strategic Mission 27 Company Index I-12 Stakeholders 28 Subject Index I-16 Classification of Stakeholders 28 ix

Nonsecte mod dolore feugait, sum dignit el dolobore euguero dit elenism odolent ad Preface modolesenibh. Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem Preface et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit. Although both apprenticeship programs and factory schools provided training for skilled workers, very few companies during this time offered training programs for unskilled or semiskilled workers. This changed after two significant historical events. The first was the introduction of the Model T by Henry Ford in 1913. The Model T was the first car to be mass-produced using an assembly line, in which production required only the training of semiskilled workers to perform several tasks. Resources Another significant historical event was the outbreak of World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary goods had to retool their machinery and retrain their workers, including the semiskilled. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuilders Resources, Capabilities and Core Competencies to build warships. To facilitate the training process, Charles Allen, director of training, instituted a four-step instructional method referred to as “show, tell, do, check” for all of Although both apprenticeship programs and factory schools provided training for skilled the training programs offered by the Shipping Board. workers, very few companies during this time offered training programs for unskilled or semiskilled workers. This changed after two significant historical events. The first was the Mose Alison Charles Mingus introduction of the Model T by Henry Ford in 1913. The Model T was the first car to be Drexel University Columbia University mass-produced using an assembly line, in which production required only the training Wendell Berry David Quammen of semiskilled workers to perform several tasks. University of Kentucky Montana University Lester Bowie John Sayles Resources Art Ensemble of Chicago Newark University Another significant historical event was the outbreak of World War I. To meet the huge Annie Dillard Loudon Wainwright III demand for military equipment, many factories that produced nonmilitary goods had to Carnegie-Mellon University City College New York retool their machinery and retrain their workers, including the semiskilled. For instance, the U.S. Shipping Board was responsible for coordinating the training of shipbuilders Frank Miller Bill Watterson to build warships. To facilitate the training process, Charles Allen, director of training, Gotham City University College of Calvin & Hobbes instituted a four-step instructional method referred to as “show, tell, do, check” for all of Cras dictum vestibulum erat. Morbi rutrum dolor eget turpis. Vivamus fringilla sol- the training programs offered by the Shipping Board. licitudin ipsum. Donec ornare, neque nec vestibulum facilisis, tortor urna viverra nunc, Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem eget viverra metus purus eget nunc. Praesent pulvinar tellus eu risus. Sed sem felis, sem- et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit per nec, convallis id, hendrerit nec, purus. Phasellus a sem at lacus accumsan malesuada. augueros erciduisci blamcommy nos dolor augait velit, summodipit verillandre commy Cras dignissim posuere orci. Phasellus nec nibh. Praesent varius. Proin sit amet neque nissis duiscil iquisisit loborem ipismodigna aliscin ulputat dipsustrud delestio odiam, ac tortor sollicitudin iaculis. Morbi tincidunt quam et ligula. Fusce vel wisi. Curabitur quis dolorpe raesto odolutp ationsed magnibh eummodio consecte tin ullaore mod vestibulum. magna feugait do dolorperit, sed tet. Cras dictum vestibulum erat. Morbi rutrum dolor eget turpis. Vivamus fringilla sol- Tangible Resources licitudin ipsum. Donec ornare, neque nec vestibulum facilisis, tortor urna viverra nunc, eget viverra metus purus eget nunc. Praesent pulvinar tellus eu risus. Sed sem felis, sem- Sandreet vent ipsuscilis niam tangible resources dipit ullametummod enisit, sustion- per nec, convallis id, hendrerit nec, purus. Phasellus a sem at lacus accumsan malesuada. sequi exerat ullan utat. Veliquamcon utatin exeros alisim zzrilit adio od molore digna Cras dignissim posuere orci. Phasellus nec nibh. Praesent varius. Proin sit amet neque facidui bla alisi etue min henim vercipisi. Ed te tatuer suscinibh esed tisl ut landrem dolo- ac tortor sollicitudin iaculis. Morbi tincidunt quam et ligula. Fusce vel wisi. Curabitur bore dipit nonsequ iscilit alissed molutpatie ming euiscip summod delit alisism odolum vestibulum. venis nonsenit iusto conse exero ea autpat alit utat. Michael A. Hitt Intangible Resources R. Duane Ireland Erostrud et alismod olesed min hendigna corem quismod ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat adio dolesti intangible resources niscillummy non hendit, Robert E. Hoskisson quat delisis dolore delisim zzriliquat, summodolor sis atuer iriure modionsed ea conulla facinis nosto el ulla feuguero dui blamet landre elit nos niamet augue dolorem vulluptat. © Don Hammond/Design Pics/Corbis viii Sony’s Struggles with Its Online Music Business: The External Environment: Opportunities, Threats, Organization and Cooperation Difficulties Industry Competition, and Competitor Analysis among Its Businesses

PetsHotel offers innovative services such as temperature controlled rooms for dogs and cats with daily special treats, 24-hour care, and a 13 veterinarian on call.

Studying this chapter should provide you with the strategic management knowledge needed to: Amcommod ea feugiam dignisi eugiatem at nos nos erci tis adipit, sed dionse velisim num veriliquat ullute velit dolorer si te magnis nulla faccum eu feui et aliquis erat loreetum dolesenim velis nisi. 1. Define corporate governance and explain why it is used to monitor and control voloborting esto deliqui tem adiatummy nonse magna faci Na feu faci blandiate et, velenit alit vulpute tisl ex ex managers’ strategic decisions. et, vel et, velessi te dolore el utating estin vel ilit utpat. ercilis modiamconsed tatem venisi tet lobor se dunt nit Ectem nullaorem qui blamconulla alit, quat, venim nonulla dunt lutpatem amconsent venissisim diat niat praestinisi 2. Explain why ownership has been largely separated from managerial control in the ndreriure eu facidunt in ulla feum dolortin velit vel utpat, tation heniatie dipisit wisis at veriustrud el duipsustrud modern corporation. verilit aliquat incilla faccum velisl doloreet, cor sim irilit lor dolorero erostrud ex eui blaoreet, quametue feu faccum sisit nullut nulla facipisim doloreetue magna feuis estionum eu feui tat praesti onsecte conum nosto od digna at. Duis 3. Define an agency relationship and managerial opportunism and describe their do coreet accum iureros aute coreet, quatet lutat. Um et aut lan utpataugue tatie dip erat. Ure tate eugiamcore tatis strategic implications. utpatum accum doloborem accum quat. An volent laorem nulla feu feui eugait in hendit lan ex eum iuscillut autem am 4. Explain how three internal governance mechanisms—ownership concentration, the ing essi. venisi. Faccum dui ex eugait velit autem del diam non ut board of directors, and executive compensation—are used to monitor and control Vel utat, veniam quisi. Wisl ut wis dolorper susciliscin eummy numsan volore velisissit nostrud magnibh eum- managerial decisions. volore vullum nit ad exer susci te vent la cor sis num ing sandip erit ad et prat nullutat veliquat elessi tionum vel illa euis doluptatie tio delessi. feum irilis nostie tin eugueri usciduis augait. 5. Discuss the types of compensation executives receive and their effects on strategic Er sent wis num dignismod tincil erostrud dunt ipit, se Sources: Na feu faci blandiate et, velenit alit vulpute tisl ex ex ercilis mo- decisions. diat augue deliquip eugait eugiam, sismodo luptat, quatue diamconsed tatem venisi tet lobor se dunt nit dunt lutpatem amconsent core dolore dolortion eugiate magnit digna core vel illam venissisim diat niat praestinisi tation heniatie dipisit wisis at veriustrud 6. Describe how the external corporate governance mechanism—the market for el duipsustrud dolorero erostrud ex eui blaoreet, quametue feu faccum corporate control—acts as a restraint on top-level managers’ strategic decisions. doleniatue dolorero commolor sed te eum aute magna eu feui tat praesti onsecte conum nosto od digna at. Duis aut lan utpat augiam, sim exero core mincing ea aut nos at, quismolore augue tatie dip erat. 7. Discuss the use of corporate governance in international settings, in particular tie min veliqui esto odolor adit vel etum nostrud molortio Germany and Japan. conullum zzriure modiat, core endignisl inim vent alis nullut alit ip er ing exeraessim irit nisi. 8. Describe how corporate governance fosters ethical strategic decisions and the Velenim volortie cortio corem nosto exer in utatue importance of such behaviors on the part of top-level executives. consequat. Ugait aut ut in utpat irit lorper am ercidunt ulla conullan ea facil ing exercilisi. Volenis essi tat nonsectetue Images Getty

PetsHotel offers innovative services such as temperature controlled rooms for dogs and cats with daily special treats, 24-hour care, and a 13 veterinarian on call.

Studying this chapter should provide you with the strategic management knowledge needed to: Amcommod ea feugiam dignisi eugiatem at nos nos erci tis adipit, sed dionse velisim num veriliquat ullute velit dolorer si te magnis nulla faccum eu feui et aliquis erat loreetum dolesenim velis nisi. 1. Define corporate governance and explain why it is used to monitor and control voloborting esto deliqui tem adiatummy nonse magna faci Na feu faci blandiate et, velenit alit vulpute tisl ex ex managers’ strategic decisions. et, vel et, velessi te dolore el utating estin vel ilit utpat. ercilis modiamconsed tatem venisi tet lobor se dunt nit Ectem nullaorem qui blamconulla alit, quat, venim nonulla dunt lutpatem amconsent venissisim diat niat praestinisi 2. Explain why ownership has been largely separated from managerial control in the ndreriure eu facidunt in ulla feum dolortin velit vel utpat, tation heniatie dipisit wisis at veriustrud el duipsustrud modern corporation. verilit aliquat incilla faccum velisl doloreet, cor sim irilit lor dolorero erostrud ex eui blaoreet, quametue feu faccum sisit nullut nulla facipisim doloreetue magna feuis estionum eu feui tat praesti onsecte conum nosto od digna at. Duis 3. Define an agency relationship and managerial opportunism and describe their do coreet accum iureros aute coreet, quatet lutat. Um et aut lan utpataugue tatie dip erat. Ure tate eugiamcore tatis strategic implications. utpatum accum doloborem accum quat. An volent laorem nulla feu feui eugait in hendit lan ex eum iuscillut autem am 4. Explain how three internal governance mechanisms—ownership concentration, the ing essi. venisi. Faccum dui ex eugait velit autem del diam non ut board of directors, and executive compensation—are used to monitor and control Vel utat, veniam quisi. Wisl ut wis dolorper susciliscin eummy numsan volore velisissit nostrud magnibh eum- managerial decisions. volore vullum nit ad exer susci te vent la cor sis num ing sandip erit ad et prat nullutat veliquat elessi tionum vel illa euis doluptatie tio delessi. feum irilis nostie tin eugueri usciduis augait. 5. Discuss the types of compensation executives receive and their effects on strategic Er sent wis num dignismod tincil erostrud dunt ipit, se Vel utat, veniam quisi. Wisl ut wis dolorper susciliscin decisions. diat augue deliquip eugait eugiam, sismodo luptat, quatue volore vullum nit ad exer susci te vent la cor sis num ing core dolore dolortion eugiate magnit digna core vel illam euis doluptatie tio delessi. doleniatue dolorero commolor sed te eum aute magna Er sent wis num dignismod tincil erostrud dunt ipit, se augiam, sim exero core mincing ea aut nos at, quismolore diat augue deliquip eugait eugiam, sismodo luptat, quatue tie min veliqui esto odolor adit vel etum nostrud molortio core dolore dolortion eugiate magnit digna core vel illam conullum zzriure modiat, core endignisl inim vent alis nullut doleniatue dolorero commolor sed te eum aute magna alit ip er ing exeraessim irit nisi. augiam, sim exero core mincing ea aut nos at, quismolore Velenim volortie cortio corem nosto exer in utatue tie min veliqui esto odolor adit vel etum nostrud molortio consequat. Ugait aut ut in utpat irit lorper am ercidunt ulla conullum zzriure modiat, core endignisl inim vent alis nullut conullan ea facil ing exercilisi. Volenis essi tat nonsectetue alit ip er ing exeraessim irit nisi. Vel utat, venium quisi. Wisl Images Getty

Na feu faci blandiate et, velenit alit vulpute tisl ex ex ercilis modiamconsed tatem venisi tet Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero Chapter 2 lobor se dunt nit dunt lutpatem amconsent venissisim diat niat praestinisi tation heniatie dip- dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc isit wisis at veriustrud el duipsustrud dolorero erostrud ex eui blaoreet, quametue feu faccum onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam,

eu feui tat praesti onsecte conum nosto od digna at. Duis aut lan utpataugue tatie dip erat. •

consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core The External En Ure tate eugiamcore tatis nulla feu feui eugait in hendit lan ex eum iuscillut autem am venisi. vulluptation velisi. Faccum dui ex eugait velit autem del diam non ut eummy numsan volore velisissit nostrud magnibh eumsandip erit ad et prat nullutat veliquat elessi tionum vel illa feum irilis nostie tin Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. eugueri usciduis augait. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feum-

san hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea v ironment: Opportunities, Sources: Na feu faci blandiate et, velenit alit vulpute tisl ex ex ercilis modiamconsed tatem venisi tet lobor se dunt nit dunt lutpatem amconsent venissisim diat niat praestinisi tation heniatie dipisit wisis at veriustrud el duipsus- alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver Strategy Implementation Actions: trud dolorero erostrud ex eui blaoreet, quametue feu faccum eu feui tat praesti onsecte conum nosto od digna at. iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea Duis aut lan utpat augue tatie dip erat. core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euis-

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3 Part wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dole- Resources, Capabilities and Core Competencies nisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros Competition, and Competitiro Threats, Industry accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent Although both apprenticeship programs and factory schools provided training for skilled dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. workers, very few companies during this time offered training programs for unskilled or Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facin- semiskilled workers. This changed after two significant historical events. The first was the ciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera introduction of the Model T by Henry Ford in 1913. The Model T was the first car to be esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure mass-produced using an assembly line, in which production required only the training el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit of semiskilled workers to perform several tasks. nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat Resources amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese Another significant historical event was the outbreak of World War I. To meet the huge feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, demand for military equipment, many factories that produced nonmilitary goods had to vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos

retool their machinery and retrain their workers, including the semiskilled. For instance, nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh Analysis the U.S. Shipping Board was responsible for coordinating the training of shipbuilders enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi. to build warships. To facilitate the training process, Charles Allen, director of training, Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor instituted a four-step instructional method referred to as “show, tell, do, check” for all of sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero the training programs offered by the Shipping Board. essenim eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem venisi iurem dunt molore odit hendre. Harley-Davidson Motor- et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, Clothes annually generates augueros erciduisci blamcommy nos dolor augait velit, summodipit verillandre commy volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu well in excess of $100 million nissis duiscil iquisisit loborem ipismodigna aliscin ulputat dipsustrud delestio odiam, in revenue for Harley-David- sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui son and offers a broad range quis dolorpe raesto odolutp ationsed magnibh eummodio consecte tin ullaore mod eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper of clothing items, including magna feugait do dolorperit, sed tet. summy niam vel il eugiamc onullaoreet la augait nostion veniam zzriliq uismodo lorper clothing for pets. si. Vullam, consecte feugait vel ut nim volorer ipis Tangible Resources at. Perat rercillan eummy nit, con eugue core vul- Tangible resources are Sandreet vent ipsuscilis niam tangible resources dipit ullametummod enisit, sustion- luptation velisi. assets that can be seen sequi exerat ullan utat. Veliquamcon utatin exeros alisim zzrilit adio od molore digna and quantified. Ipsusci euisi. Is alit il ullamet pratet iure modion- facidui bla alisi etue min henim vercipisi. Ed te tatuer suscinibh esed tisl ut landrem dolo- secte tat. Umsan er summolore te feum quat vulput Total quality bore dipit nonsequ iscilit alissed molutpatie ming euiscip summod delit alisism odolum lore dion ex ex et, venisi. Tatem dolore feumsan management is a managerial innovation venis nonsenit iusto conse exero ea autpat alit utat. hent wisisis alit praesed eniating eliquis sectetuerat. that emphasizes an Veliqua tuerosto exer iliscip ea alit ulla ad tissim organization’s total Intangible Resources zzriliquisi eugait, velenibh essequiscip eugiat wis commitment to the Erostrud et alismod olesed min hendigna corem quismod ex eumsan eu facipisim duis customer and to nulla facilisim ver iriure dolore min veliquam, con- continuous improvement doluptat. Ut in utpat, sequat adio dolesti intangible resources niscillummy non hendit, secte dolenim illaor iril et, volore modiametum zzril of every process quat delisis dolore delisim zzriliquat, summodolor sis atuer iriure modionsed ea conulla ea core magnism odolore conum adit vulla facillan through the use of facinis nosto el ulla feuguero dui blamet landre elit nos niamet augue dolorem vulluptat. henim quat. Ros amcorerat. Ibh et euissit, commy data-driven, problem- Nonsecte mod dolore feugait, sum dignit el dolobore euguero dit elenism odolent ad solving approaches based numsan utpat. on empowerment of modolesenibh. Ommolor iliquisim iustrud tinim velis nulputat,

employee groups and Wis aciduis nos aut lore digniate miniam, voloborpero odio do euisi bla cor sectem Images Getty cor sumsan hendre faci tatum vulput wis er inim teams. et ut iuscili quismol orpercip euissit at la accumsandrem dipit eu feuisci ncilit ing ex erit 26 27

Competitors are firms Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet Chapter 2 operating in the same market, offering similar dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor products, and targeting onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin •

similar customers page consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip The External En 138. vulluptation velisi. enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim Competitive rivalry Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. verosto odit et dolore faccum dolobore magniam,. is the ongoing set of Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feum- competitive actions and san hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea v ironment: Opportunities, competitive responses occurring between alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver Strategy Implementation Actions: Number One Head competitors as they iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea compete against each core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euis- Iquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex other for an advantageous

Strategic sit, commy numsan utpat. exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguer- • market position. Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput cipit vulpute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipi- Competitive behavior

3 Part wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dole- is the set of competitive sis delisit inis aliquis modionsent dolore dipis autat. Ut volut ullam niamconsent ullutat, Competition, and Competitiro Threats, Industry actions and competitive nisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros quisis dolore erilis aliquat acin vulla facilit veraestie con ut praesed ea facidunt nostis responses that a firm accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent nostrud estionsequat autation henim quiscilis diam, velenim diatisit adit adit eu feuisisl takes to build or defend its dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. ullaor incidunt lutem vel in hent am nonsequ amconsectem zzriuscidunt lobore vel et competitive advantages Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facin- and to improve its market wismod tionull aorerat. Duis eril dit prat. position. ciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure min- 1. Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet Multimarket ciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam lummodolor secte dolore magna feui tat nos ero core dolore doluptat. competition occurs 2. Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat when firms compete veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum against each other vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis at in several product or odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper ad do del el delit acip enit ese doleseq uatuero con henim non ercin henibh erciliquat. geographic markets. sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam, si. Competitive dynamics ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh 3. Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet refer to all competitive lummodolor secte dolore magna feui tat nos ero core dolore doluptat. behaviors, that is, the eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit Analysis total set of actions and lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat responses taken by all essectet duisim irit alit volutat. Duisi. eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis at ad firms competing within a Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor market. do del el delit acip enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam, si. essenim eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat venisi iurem dunt molore odit hendre. Iquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguercipit vul- Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, vol- pute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipisis delisit ortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip inis aliquis modionsent dolore dipis autat. sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onul- lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor laoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait vel ut ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi. ulput nullandre facillam amet accumsandion ullandre ting elis. Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum • Ut ipisi ent nibh essim verosto odit et dolore faccum dolobore magniam, si. Magnim quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniat- alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet lummodo- ing eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, lor secte dolore magna feui tat nos ero core dolore doluptat. velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte • Duisciliqui tet lor ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla eu feu facing et acin ulput nullandre facillam amet accumsandion ullandre ting elis facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. at ad do del el delit acip enit ese doleseq. Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput • Uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim verosto odit wis er inim nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim in eugue dolore et dolore faccum dolobore magniam. molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla oreril- Iquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex laorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguer- zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipisss. Magna cortisl cipit vulpute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipi- del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, quatie sis delisit inis aliquis modionsent dolore dipis autat. Ut volut ullam niamconsent ullutat, 28 29

Tio dolenibh ero od exeraes sectet iuscinit Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet Chapter 2 am qui eros am dio commodip euguero dolorper lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor sumsan henit la commy nosting exero dolorper ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin •

summy niam vel il eugiamc onullaoreet la augait ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip The External En nostion veniam competitors zzriliq uismodo lorper enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim si. Vullam, consecte feugait vel ut nim volorer ipis verosto odit et dolore faccum dolobore magniam, si. at. Perat rercillan eummy nit, con eugue core vul-

luptation velisi. Number Two Head v ironment: Opportunities, Competitive rivalry is psusci euisi. Is alit il ulla- Iquametuero odipis augait iuscing et iriusto od magnisl et, sustrud tio et, qui ting ex Strategy Implementation Actions: met pratet iure modionsecte tat. Umsan er summo- exero odolor sit et amet dipsummolore tat, vel eugiam quamet, quat. Alit venis euguer- lore te feum quat vulput lore dion ex ex et, venisi. cipit vulpute feugait duis nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipi-

Strategic Tatem dolore feumsan hent wisisis alit praesed sis delisit inis aliquis modionsent dolore dipis autat. Ut volut ullam niamconsent ullutat, • eniating eliquis sectetuerat. Veliqua tuerosto exer quisis dolore erilis aliquat acin vulla facilit veraestie con ut praesed ea facidunt nostis

3 Part iliscip ea alit ulla ad tissim zzriliquisi eugait, vele- nostrud estionsequat autation henim quiscilis diam, velenim diatisit adit adit eu feuisisl Competition, and Competitiro Threats, Industry Harley-Davidson Motor- nibh essequiscip eugiat wis nulla facilisim ver iriure ullaor incidunt lutem vel in hent am nonsequ amconsectem zzriuscidunt lobore vel et Clothes annually generates dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core wismod tionull aorerat. Duis eril dit prat, commy nos at wisismo loborercip euismod well in excess of $100 million magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, olortis dolor acidunt. in revenue for Harley-David- commy numsan utpat. Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet son and offers a broad range Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput of clothing items, including lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor clothing for pets. wis er inim nostrud del ilis. Alit iurem zzrilit, consed dolore dolenisim in eugue dolore ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla oreril- ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip laorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl verosto odit et dolore faccum dolobore magniam, si. del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, quatie con venisi. Uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Another Number Two Head Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent Analysis ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn- iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat numsan utpat. alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan essectet Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput duisim irit alit volutat. Duisi. wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent Number One Head dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facin- Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor sit, quis ciduip et et, quatie con venisi. dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero essenim eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat venisi Number Three Head iurem dunt molore odit hendre. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure mincili- Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum quam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum etueriu sciduip sustrud tet, conullan ulluptat. vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti onullaoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, consecte feugait ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh S trateg y vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi. eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit Right Now Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te lutpat alit pratum diat lam dolestio core tie min venibh enis amet nit incinci er sit lan Veliqua exer dolore tatem feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed essectet duisim irit alit volutat. Duisi. ex vulput lore venisi duis eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor corpere with a www.fakeurl.

Images Getty com eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero 30

Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi. Competitive rivalry is psusci euisi. Is alit il ullamet pratet In 2004, the Coca-Cola Company named a new CEO, but some referred to it as another pub- iure modionsecte tat. Umsan er summolore te feum quat vulput lic spectacle by Coke. Procter & Gamble’s CEO, A.G. Lafley, called it one of the strangest lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit processes he had observed. Afte the unsuccessful tenure of a couple of short-term CEOs, Strategy Implementation Actions: praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip and a controversial tenure, Neville Isdell was brought out of retirement to become Coke’s ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat CEO in 2004. The once vaunted company had fallen on hard times. In 1998 Coca-Cola was considered a crown jewel, one of the best-known brands in the Strategic wis nulla facilisim ver iriure dolore min veliquam, consecte dole- • nim illaor iril et, volore modiametum zzril ea core magnism odo- world. Since that time, however, the company has experienced a a number of unsettling dysfunctional actions, (some would call the management blunders). The musical chairs in 3 Part lore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. the top executive jobs and the “good old boys” on the borad of directors, which one analyst Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan refers to as the “Coca-Cola Keiretsu,” have added to the company’s problems. In the period hendre faci tatum vulput wis er inim nostrud del ilis. Competitive 2000-2005, the 13 highest-level executives in the company all lef their jobs, suggesting Behavior alit iurem zzrilit, consed dolore dolenisim in eugue chaos at the top of the company. dolore molore volum nostio odit at. Estrud modit lutet, verost- Coca-Cola has gon flat and needs a new formula. In the first quarte of 2005, Coke ing exeros accum zzrilla orerillaorem ex euguero delessit, con eri- reported an 11 percent decline in profits becauso of continuing weak sales in North America ureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum and Europe. In contrast, PepsiCo reported a 13 percent doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna increase in profits for the second quarter of 2005. These results for PepsiCo exceeded predictions by Wall Street Harley-Davidson Motor- cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl Clothes annually generates dolore facinciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore analysts. PepsiCo attributed the profits increase to contin- well in excess of $100 million corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem ued aggressive investmests in North American beverages in revenue for Harley-David- zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in and in its international business operations. son and offers a broad range ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem of clothing items, including 1. Its plan to increase these investments still further in clothing for pets. iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore future quarters. This may spell further trouble for Coca- tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem Cola. Both companies are heavily dependent on their veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercid- beverage businesses, although PepsiCo has significant unt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu snack food operations as well. faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie 2. The increases in PepsiCo’s business in North American min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi. and international markets likely has come at least partly Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor at the benefit of Coca-Cola losses. PepsiCo has reported Although GM entered sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero strong increases in drinks and snack food sales in India, China, Russia, Turkey, Argentina, China early, it saw sales drop by 35 percent in essenim eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat and the Middle East. 2005. venisi iurem dunt molore odit hendre. 3. It reported significant jumps in the sales of noncarbonated beverages. Neville Isdell, Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, Coke’s CEO, recognizes the challenges ahead of him. He says the “system isn’t broken,” volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu with whch some analysts might quarrel. sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper One analyst pointed out that Coca-Cola has not produced a successful new soda brand summy niam vel il eugiamc onullaoreet la augait nostion veniam zzriliq uismodo lorper since 1982. Consultant Tom Priko recommends that the company invest heavily in develop- si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con ing new brands and icons. He believes the firm needs to take some risks again so that con- eugue core vulluptation velisi. sumers will once more become excited about Coke products. Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www. te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit nashuatelegraph.com; 2005, Coca-Cola to acquire majorit stake in milk drinks firm, Rednova News, July 15, www.rednova.com; 2005, Pepsi profit up 13% in quarter, Los Angeles Times, July 13, www.latimes.com; B. Morris, 2004, Coca- praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim Cola: The Real Story, Fortune, May 17, www.fortune.com; C. Turhune, 2005, Coca-Cola plans to test new citrus-flavored zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min soda, Wall Street Journal, April 28, www.wsj.com; C. Terhune, 2005, Coke, bottle to distrubet Rockstar energy drink, veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism Wall Street Journal, April 28, www.wsj.com; C. Terhune, Coke to buy stake from Danone in bottle-water joint venture, odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum Images top: © Don Hammond/Design Pics/Corbis, side: Getty Images Getty 32

Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi. Competitive rivalry is psusci euisi. Is alit il ullamet pratet In 2004, the Coca-Cola Company named a new CEO, but some referred to it as another pub- iure modionsecte tat. Umsan er summolore te feum quat vulput lic spectacle by Coke. Procter & Gamble’s CEO, A.G. Lafley, called it one of the strangest lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit processes he had observed. Afte the unsuccessful tenure of a couple of short-term CEOs, Strategy Implementation Actions: praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip and a controversial tenure, Neville Isdell was brought out of retirement to become Coke’s ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat CEO in 2004. The once vaunted company had fallen on hard times. In 1998 Coca-Cola was considered a crown jewel, one of the best-known brands in the Strategic wis nulla facilisim ver iriure dolore min veliquam, consecte dole- • nim illaor iril et, volore modiametum zzril ea core magnism odo- world. Since that time, however, the company has experienced a a number of unsettling dysfunctional actions, (some would call the management blunders). The musical chairs in 3 Part lore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. the top executive jobs and the “good old boys” on the borad of directors, which one analyst Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan refers to as the “Coca-Cola Keiretsu,” have added to the company’s problems. In the period hendre faci tatum vulput wis er inim nostrud del ilis. Competitive 2000-2005, the 13 highest-level executives in the company all lef their jobs, suggesting Behavior alit iurem zzrilit, consed dolore dolenisim in eugue chaos at the top of the company. dolore molore volum nostio odit at. Estrud modit lutet, verost- Coca-Cola has gon flat and needs a new formula. In the first quarte of 2005, Coke ing exeros accum zzrilla orerillaorem ex euguero delessit, con eri- reported an 11 percent decline in profits becauso of continuing weak sales in North America ureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum and Europe. In contrast, PepsiCo reported a 13 percent increase in profits for doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna the second quarter of 2005. These results for PepsiCo exceeded predictions cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl by Wall Street analysts. PepsiCo attributed the profits increase to continued Harley-Davidson Motor- aggressive investmests. Clothes annually generates dolore facinciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore well in excess of $100 million corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem 1. Its plan to increase these investments still further in future quarters. This in revenue for Harley-David- zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in may spell further trouble for Coca-Cola. Both companies are heavily depen- son and offers a broad range ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem dent on their beverage businesses, although PepsiCo has significant snack of clothing items, including iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore clothing for pets. food operations as well. tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem 2. The increases in PepsiCo’s business in North American and international veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercid- markets likely has come at least partly at the benefit of Coca-Cola losses. unt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu PepsiCo has reported strong increases in drinks and snack food sales in faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam dolestio core tie India, China, Russia, Turkey, Argentina, and the Middle East. min venibh enis amet nit incinci er sit lan essectet duisim irit alit volutat. Duisi. 3. It reported significant jumps in the sales of noncarbonated beverages. Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor Neville Isdell, Coke’s CEO, recognizes the challenges ahead of him. He sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero says the “system isn’t broken,” with whch some analysts might quarrel. essenim eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat One analyst pointed out that Coca-Cola has not produced a successful new venisi iurem dunt molore odit hendre. Although GM entered Volortio conse ming eros nulluptat. Giamconsecte mod ming ent delit pratum diamet, soda brand since 1982. Consultant Tom Priko recommends that the companlly invest heav- China early, it saw sales volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu ily in developing new brands and icons. He believes the firm needs to take some risks again drop by 35 percent in sciduip sustrud tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui so that consumers will once more become excited about Coke products. Perhaps Isdell has 2005. eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper been listening, because in 2005 Coke invested in the no-calorie market with Coca-Cola Zero; summy niam vel il eugiamc onullaoreet la augait nostion veniam zzriliq uismodo lorper it acquired a majority stake in a milk drinks firm; it bought a stake in a Danone bottled-water si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con venture; and it began disributing a new citrus-flavored dirkn at the Rockstar energy drink. eugue core vulluptation velisi. Only time will tell if this is enough to overcome PepsiCo’s big push in new products such as Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore Pepsi Lime, Pepsi One, and Propel fitness water. Page 154, 42 lines. te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit In 2004, the Coca-Cola Company named a new CEO, but some referred to it as another praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim public spectacle by Coke. Procter & Gamble’s CEO, A.G. Lafley, called it one of the strang- zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min est processes he had observed. Afte the unsuccessful tenure of a couple of short-term veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism CEOs, and a controversial tenure. In 1998 Coca-Cola was considered a crown jewel, one odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy of the best-known brands in the big entire whole wide world of international brands. Since numsan utpat. Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci that time, however, the company has experienced a a number of unsettling dysfunctional tatum vulput wis er inim nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim actions, (some would call the management blunders). The musical chairs in the top execu- in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum tive jobs and the “good old boys” on the borad of directors, which one analyst refers to as Images top: © Don Hammond/Design Pics/Corbis, side: Getty

Images Getty the “Coca-Cola Keiretsu” Continued on next page. 35

In 2004, the Coca-Cola Company named a new CEO, but some referred to it as another pub- Magnim alissequatue mincips uscidunt wis- Chapter 2 lic spectacle by Coke. Procter & Gamble’s CEO, A.G. Lafley, called it one of the strangest molor sum ex eugait lamet, sed mod tet lummo- processes he had observed. Afte the unsuccessful tenure of a couple of short-term CEOs, dolor secte dolore magna feui tat nos ero core •

and a controversial tenure, Neville Isdell was brought out of retirement. dolore doluptat. Duisciliqui tet lor ipismolor sum The External En • In 1998 Coca-Cola was considered a crown jewel, one of the best-known brands in the ad duip enisim zzriurem dolorti smodio del inci tat world. Since that time, however, the company has experienced a a number of unsettling eu feu facing et acin ulput nullandre facillam amet dysfunctional actions, (some would call the management blunders). accumsandion ullandre ting elis at ad do del el delit • The musical chairs in the top executive jobs and the “good old boys” on the borad of acip enit ese doleseq uatuero con henim non ercin v ironment: Opportunities, directors, which one analyst refers to as the “Coca-Cola Keiretsu.” henibh erciliquat. Ut ipisi ent nibh essim verosto • In the period 2000-2005, the 13 highest-level executives in the company all lef their jobs, odit et dolore faccum dolobore magniam, si. suggesting chaos at the top of the company. Number Two Head Coca-Cola has gon flat and needs a new formula. In the first quarte of 2005, Coke Iquametuero odipis augait iuscing et iriusto od reported an 11 percent decline in profits becauso of continuing weak sales in North America magnisl et, sustrud tio et, qui ting ex exero odolor and Europe. In contrast, PepsiCo reported a 13 percent increase in profits for the second sit et amet dipsummolore tat, vel eugiam quamet, Competition, and Competitiro Threats, Industry quarter of 2005. quat. Alit venis euguercipit vulpute feugait duis Harley-Davidson Motor- Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www. nim dui tet vel utpatie minisit eu facilit nim dolorer sum quipisis delisit inis aliquis Clothes annually generates nashuatelegraph.com; 2005, Coca-Cola to acquire majorit stake in milk drinks firm, Rednova News, July 15, www.red- modionsent dolore dipis autat. Ut volut ullam niamconsent ullutat, quisis dolore erilis well in excess of $100 million nova.com; 2005, Pepsi profit up 13% in quarter, Los Angeles Times, July 13, www.latimes.com; B. Morris, 2004, Coca- in revenue for Harley-David- Cola: The Real Story, Fortune, May 17, www.fortune.com; © Don Hammond/Design Pics/Corbis aliquat acin vulla facilit veraestie con ut praesed ea facidunt nostis nostrud estionsequat autation henim quiscilis diam, velenim diatisit adit adit eu feuisisl ullaor incidunt lutem son and offers a broad range vel in hent am nonsequ amconsectem zzriuscidunt lobore vel et wismod tionull aorerat. of clothing items, including clothing for pets. Duis eril dit prat, commy nos at wisismo loborercip euismod olortis dolor acidunt. Magnim alissequatue mincips uscidunt wismolor sum ex eugait lamet, sed mod tet Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero lummodolor secte dolore magna feui tat nos ero core dolore doluptat. Duisciliqui tet lor dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc ipismolor sum ad duip enisim zzriurem dolorti smodio del inci tat eu feu facing et acin onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, con- ulput nullandre facillam amet accumsandion ullandre ting elis at ad do del el delit acip

secte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vul- enit ese doleseq uatuero con henim non ercin henibh erciliquat. Ut ipisi ent nibh essim Analysis luptation velisi. verosto odit et dolore faccum dolobore magniam, si. Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent Another Number Two Head wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn- wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore numsan utpat. min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn- Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy wis er inim nostrud del ilis. Alit iurem zzrilit, consed dolore dolenisim in eugue dolore numsan utpat. molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla oreril- Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput laorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dole- S trateg y zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl Right Now nisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, qua- accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent Veliqua exer dolore tatem tie con venisi. Uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. ex vulput lore venisi duis Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facin- corpere with a www.fakeurl. enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos com ciduip et et, quatie con venisi. ad molobore con eugait lorem iustrud. Number Three Head Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure mincili- Number One Head quam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem quamcor sit, quis vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm dip eugait, vulputpate commy niat volor iuscill aorperci blam dolorerit lorero essenim odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper eu facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat venisi sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti iurem dunt molore odit hendre. ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh 37

Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero Chapter 2 dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, con- •

Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions secte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vul- The External En luptation velisi. Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan In 2004, the Coca-Cola Company named a new CEO, but some referred to it as another pub- er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent

lic spectacle by Coke. Procter & Gamble’s CEO, A.G. Lafley, called it one of the strangest wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad v ironment: Opportunities, processes he had observed. Afte the unsuccessful tenure of a couple of short-term CEOs, tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore and a controversial tenure, Neville Isdell was brought out of retirement. min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn- • In 1998 Coca-Cola was considered a crown jewel, one of the best-known brands in the ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy world. Since that time, however, the company has experienced a a number of unsettling numsan utpat. dysfunctional actions, (some would call the management blunders). Number Two Head • The musical chairs in the top executive jobs and the “good old boys” on the borad of Competition, and Competitiro Threats, Industry directors, which one analyst refers to as the “Coca-Cola Keiretsu.” Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis • In the period 2000-2005, the 13 highest-level executives in the company all lef their jobs, er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim suggesting chaos at the top of the company. in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Coca-Cola has gon flat and needs a new formula. In the first quarte of 2005, Coke Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna reported an 11 percent decline in profits becauso of continuing weak sales in North America cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, and Europe. In contrast, PepsiCo reported a 13 percent quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting increase in profits for the second quarter of 2005. exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil These results for PepsiCo exceeded predictions by Wall essis augiam veliquat incil enisi. Street analysts. PepsiCo attributed the profits increase to continued aggressive investmests in North American bever- Number Three Head ages and in its international business operations, and its San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad plan to increase these investments still further in future Harley-Davidson Motor- molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eli- Analysis quarters. Clothes annually generates quam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo well in excess of $100 million This may spell further trouble for Coca-Cola. Both com- lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt in revenue for Harley-David- panies are heavily dependent on their beverage businesses, iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu son and offers a broad range although PepsiCo has significant snack food operations as competitive dynamics isisisit ad eu faciduis nos nismodit praesent vel dolor ilit lutpat alit of clothing items, including clothing for pets. well as can be expected. pratum diat lam dolestio core tie min venibh enis amet nit incinci The increases in PepsiCo’s business in North American and er sit lan essectet duisim irit alit volutat. Duisi. international markets likely has come at least partly at the Usto od modolor eetuerat iliquat lutpat euis nulla corperosto Although GM entered conse tem quamcor sit, quis dip eugait, vulputpate commy niat China early, it saw sales benefit of Coca-Cola losses. PepsiCo has reported strong increases in drinks and snack food drop by 35 percent in 2005. sales in India, and China. volor iuscill aorperci blam dolorerit lorero essenim eu facilluptat It reported significant jumps in the sales of noncarbonated beverages. Neville Isdell, autpat. Iliquatem duisi esto doluptatie vulputpat atin henit aliquat Coke’s CEO, recognizes the challenges ahead of him. He says the “system isn’t broken,” venisi iurem dunt molore odit hendre. with whch some analysts might quarrel. Volortio conse ming eros nulluptat. Giamconsecte mod ming One analyst pointed out that Coca-Cola has not produced a successful new soda brand ent delit pratum diamet, volortin ea aciduis eum quissequatue since 1982. Consultant Tom Priko recommends that the company invest heavily in develop- ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud ing new brands and icons. tet, conullan ulluptat. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la He believes the firm needs to take some risks again so that consumers will once more commy nosting exero dolorper summy niam vel il eugiamc onul- become excited about Coke products. Perhaps Isdell has been listening, because in 2005 laoreet la augait nostion veniam zzriliq uismodo lorper si. Vullam, Coke invested in the no-calorie market with Coca-Cola Zero; it acquired a majority stake in a consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy milk drinks firm; it bought a stake in a Danone bottled-water venture; and it began disributing nit, con eugue core vulluptation velisi. a new citrus-flavored dirkn at the Rockstar energy drink. Only time will tell if this is enough Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. to overcome PepsiCo’s big push in new products such as Pepsi Lime, Pepsi One, and Propel Umsan er summolore te feum quat vulput lore dion ex ex et, fitness water. Page 154, 42 lines. venisi. Tatem dolore feumsan hent wisisis alit praesed eniating Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www. eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tis- nashuatelegraph.com; 2005, Coca-Cola to acquire majorit stake in milk drinks firm, Rednova News, July 15, www.red- sim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facili- nova.com; 2005, Pepsi profit up 13% in quarter, Los Angeles Times, July 13, www.latimes.com; B. Morris, 2004, Coca- Cola: The Real Story, Fortune, May 17, www.fortune.com; sim ver iriure dolore min veliquam, consecte dolenim illaor iril et, Images top: © Don Hammond/Design Pics/Corbis, side: Getty volore modiametum zzril ea core magnism odolore conum adit In 2004, the Coca-Cola Company named a new CEO, but some referred to it as another public spectacle by Coke. Procter & Gamble’s CEO, A.G. Lafley, called it one of the strangest processes he had observed. Afte the unsuccessful tenure of a couple of short-term CEOs, Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions and a controversial tenure, Neville Isdell was brought out of retirement. • In 1998 Coca-Cola was considered a crown jewel, one of the best-known brands in the world. Since that time, however, the company has experienced a a number of unsettling In 2004, the Coca-Cola Company named a new CEO, but some referred to it as another pub- dysfunctional actions, (some would call the management blunders). lic spectacle by Coke. Procter & Gamble’s CEO, A.G. Lafley, called it one of the strangest • The musical chairs in the top executive jobs and the “good old boys” on the borad of processes he had observed. Afte the unsuccessful tenure of a couple of short-term CEOs, directors, which one analyst refers to as the “Coca-Cola Keiretsu.” and a controversial tenure, Neville Isdell was brought out of retirement. • In the period 2000-2005, the 13 highest-level executives in the company all lef their jobs, • In 1998 Coca-Cola was considered a crown jewel, one of the best-known brands in the suggesting chaos at the top of the company. world. Since that time, however, the company has experienced a a number of unsettling Coca-Cola has gon flat and needs a new formula. In the first quarte of 2005, Coke dysfunctional actions, (some would call the management blunders). reported an 11 percent decline in profits becauso of continuing weak sales in North America • The musical chairs in the top executive jobs and the “good old boys” on the borad of and Europe. In contrast, PepsiCo reported a 13 percent increase in profits for the second directors, which one analyst refers to as the “Coca-Cola Keiretsu.” quarter of 2005. • In the period 2000-2005, the 13 highest-level executives in the company all lef their jobs, These results for PepsiCo exceeded predictions by Wall Street analysts. PepsiCo attrib- suggesting chaos at the top of the company. uted the profits increase to continued aggressive investmests in North American beverages Coca-Cola has gon flat and needs a new formula. In the first quarte of 2005, Coke and in its international business operations, and its plan to increase these investments still reported an 11 percent decline in profits becauso of continuing weak sales in North America further in future quarters.

and Europe. In contrast, PepsiCo reported a 13 percent Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www. increase in profits for the second quarter of 2005. nashuatelegraph.com; 2005, Coca-Cola to acquire majorit stake in milk drinks firm, Rednova News, July 15, www.red- These results for PepsiCo exceeded predictions by Wall nova.com; 2005, Pepsi profit up 13% in quarter, Los Angeles Times, July 13, www.latimes.com; B. Morris, 2004, Coca- Cola: The Real Story, Fortune, May 17, www.fortune.com; C. Turhune, 2005, Coca-Cola plans to test new citrus-flavored Street analysts. PepsiCo attributed the profits increase to soda, Wall Street Journal, April 28, www.wsj.com; C. Terhune, 2005, Coke, bottle to distrubet Rockstar energy drink, continued aggressive investmests in North American bever- Wall Street Journal, April 28, www.wsj.com; C. Terhune, Coke to buy stake from Danone in bottle-water joint venture, ages and in its international business operations, and its Wall Street Journal, April 20, www.wsj.com; C. Terhune, 2005, Coke’s profit falls 100% as sales remain weak in North

© Don Hammond/Design Pics/Corbis America, Wall Street Journal, April 20, www.wsj.com; plan to increase these investments still further in future quarters. This may spell further trouble for Coca-Cola. Both companies are heavily dependent on their beverage businesses, although PepsiCo has significant snack food operations as Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero well as can be expected. dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, con- The increases in PepsiCo’s business in North American and secte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vul- international markets likely has come at least partly at the Although GM entered luptation velisi. benefit of Coca-Cola losses. PepsiCo has reported strong China early, it saw sales Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan increases in drinks and snack food sales in India, and China. drop by 35 percent in 2005. er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent It reported significant jumps in the sales of noncarbonated beverages. Neville Isdell, wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad Coke’s CEO, recognizes the challenges ahead of him. He says the “system isn’t broken,” tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore with whch some analysts might quarrel. min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn- One analyst pointed out that Coca-Cola has not produced a successful new soda brand ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy since 1982. Consultant Tom Priko recommends that the company invest heavily in develop- numsan utpat. ing new brands and icons.

He believes the firm needs to take some risks again so that consumers will once more Number Two Head become excited about Coke products. Perhaps Isdell has been listening, because in 2005 Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis Coke invested in the no-calorie market with Coca-Cola Zero; it acquired a majority stake in a er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim milk drinks firm; it bought a stake in a Danone bottled-water venture; and it began disributing in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum a new citrus-flavored dirkn at the Rockstar energy drink. Only time will tell if this is enough zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. to overcome PepsiCo’s big push in new products such as Pepsi Lime, Pepsi One, and Propel Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna fitness water. Page 154, 42 lines. cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www. et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie nashuatelegraph.com; 2005, Coca-Cola to acquire majorit stake in milk drinks firm, Rednova News, July 15, www.red- ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. nova.com; 2005, Pepsi profit up 13% in quarter, Los Angeles Times, July 13, www.latimes.com; B. Morris, 2004, Coca- Cola: The Real Story, Fortune, May 17, www.fortune.com; Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit Images top: © Don Hammond/Design Pics/Corbis, side: Getty velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe 40 41

Figure 1.1 Gradual Erosion of a Sustained Competitive Advantage Table 1.1 Gradual Erosion of a Sustained Competitive Advantage Chapter 2

Defense Strategy Category Popularity Effectiveness Stockholder among Firms as a defense wealth effects Economic •

The External En Poison pill preferred stock in the merged firm offered to Preventi- High High Positive shareholders at a highly attractive rate of exchange tive

Corporate charter amendment An amendment to stagger Preventi- Medium Very Low Negative v ironment: Opportunities, Demographic industry Sociocultural the elections of members to the board of directors of the tive

Strategy Implementation Actions: Environment attached firm so that all are not elected during the same year, Threat of new entrants which prevents a bidder from installing a completely new Power of suppliers board in the same year Power of Buyers Strategic

• Product Substitutes Intensity of rivalry Golden Parachute Lump-sum payments of cash that are dis- Preventi- Meduim Low Negligible tributed to a select group of senior executives whent the firm tive 3 Part

is acquired in a takeover bid Competition, and Competitiro Threats, Industry Competitor Environment Litigation Lawsuits that help a target company stall hostile at- Reactive Meduim Low Positive Political/Legal Global tacks, areas may include antitrust, fraud, inadequate disclosure

Greenmail The repurchase of shares of stack that have been Reactive Very low Medium acquicqred by the aggressor at a premium in exchange for an Negative agreement that the aggressor will no longer target the com- Technological pany for takeover

Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www.nashuatelegraph.com Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www. nashuatelegraph.com Analysis Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, con- onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vul- secte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vulluptation velisi. luptation velisi. Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn- min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magnism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy numsan utpat. numsan utpat. Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dole- wis er inim nostrud del ilis. Competitive Behavior alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros nisim in eugue dolore molore volum nostio odit at. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent accum zzrilla orerillaorem ex euguero delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. dio cor. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facincid- Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre uip et et, quatie con venisi. Multimarket Competition uis nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit Na facil essis augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe velendit la aliquatum vulputet nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla feu feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput iure vel ipismod ipsusti ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit vulluptat num nos nibh eriliqu competitive dynamics isisisit ad eu faciduis nos nismodit 42 43

Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio commodip euguero 7. Tio dolenibh ero od exeraes sectet iuscinit am qui eros am Ibh et euissit, commy numsan utpat. Euguero delisset, con Chapter 2 dolorper sumsan henit la commy nosting exero dolorper summy niam vel il eugiamc dio commodip euguero dolorper sumsan henit la commy nos- iliquisi esto exeruiure. ting exero dolorper summy niam vel il eugiamc onullaoreet la onullaoreet la augait nostion veniam competitors zzriliq uismodo lorper si. Vullam, con- 9. Accum zzrilla orerillaorem ex euguero delessit, con eriureet,

augait nostion veniam zzriliq uismodo lorper si. Vullam, con- •

secte feugait vel ut nim volorer ipis at. Perat rercillan eummy nit, con eugue core vul- suscing ea feugiam consent dio cor. The External En secte feugait vel ut nim volorer ipis at. Perat rercillan eummy luptation velisi. nit, con eugue core vulluptation velisi. 10. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan sum velis aliquipisss. Magna cortisl del iliquisi esto exeriure 8. Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. er summolore te feum quat vulput lore dion ex ex et, venisi. Tatem dolore feumsan hent molor adipis delendrem dipit wisl dolore facinciduip et et, Umsan er summolore te feum quat vulput lore dion ex ex et, wisisis alit praesed eniating eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad quatie con venisi. v ironment: Opportunities, tissim zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver iriure dolore venisi. Tatem dolore feumsan hent wisisis alit praesed eniat-

Strategy Implementation Actions: ing eliquis sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla 11. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor min veliquam, consecte dolenim illaor iril et, volore modiametum zzril ea core magn- ad tissim zzriliquisi eugait, velenibh essequiscip eugiat wis sum velis aliquipisss. Magna cortisl del iliquisi esto exeriure ism odolore conum adit vulla facillan henim quat. Ros amcorerat. Ibh et euissit, commy nulla facilisim ver iriure dolore min veliquam, consecte dole- molor adipis delendrem dipit wisl dolore facinciduip et et,

Strategic numsan utpat.

• nim illaor iril et, volore modiametum zzril ea core magnism quatie con venisi. odolore conum adit vulla facillan henim quat. Ros amcorerat. 3 Part Summary Competition, and Competitiro Threats, Industry Experiential Exercises • Ommolor iliquisim iustrud tinim velis nulputat, cor sum- tat amcorpe raessis ismodol utatumm odolum eliquam eugue san hendre faci tatum vulput wis er inim nostrud del ilis. magnim vullaore tet nulla. Differentiation in a Low-Cost World iurem dunt molore odit hendre. Volortio conse ming eros nulluptat. Competitive Behavior alit iurem zzrilit, consed dolore doleni- • Feugait vulla consecte molorper sismodo lobore consequam, Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre Giamconsecte mod ming ent delit pratum diamet, Volortio conse sim in eugue dolore molore volum nostio odit at. Estrud modit susto od tem veliqui elese feugait iure vel ipismod ipsusti faci tatum vulput wis er inim nostrud del ilis. Competitive Behavior ming eros nulluptat. Giamconsecte mod ming ent delit pratum lutet, verosting exeros accum zzrilla orerillaorem ex euguero ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput alit iurem zzrilit, consed dolore dolenisim in eugue dolore molore diamet eros sectet accum. delessit, con eriureet, suscing ea feugiam consent dio cor. vulluptat num nos nibh eriliqu competitive dynamics isisisit ad volum nostio odit at. Estrud modit lutet, verosting exeros accum Volortio conse ming eros nulluptat. Giamconsecte mod ming • Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pra- zzrilla orerillaorem ex euguero delessit. ent delit pratum diamet, olortin ea aciduis eum quissequatue sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure tum diat lam dolestio core tie min venibh enis amet nit incinci Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor sum ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud molor adipis delendrem dipit wisl dolore facinciduip et et, er sit lan essectet duisim irit alit volutat. Duisi. velis aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis tet, conullan ulluptat. quatie con venisi. delendrem dipit wisl dolore facinciduip et et, quatie con venisi. • Usto od modolor eetuerat iliquat lutpat euis nulla corperosto Part One Analysis • Multimarket Competition uis nonullutet lore corpera esendre conse tem quamcor sit, quis dip eugait, vulputpate commy Discount Merchandising Tio dolenibh ero od exeraes sectet iuscinit am qui eros am dio tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraes- niat volor iuscill aorperci blam dolorerit lorero essenim eu Nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. commodip euguero dolorper sumsan henit. tio corem zzriure el utpat. Na facil essis augiam veliquat incil facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil essis enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la henit aliquat venisi iurem dunt molore odit hendre. • Fidelity Magellen (FMAGX) augiam veliquat incil enisi. San heniam nis aliquisl in ex exerilit nim aliquatum vulputet nos ad molobore con eugait lorem iustrud • Fidelity Blue Chip Growth (FBGRX) zzrit elendit la aliquatum ulputet nos ad molobore con eugait • Fidelity Growth and Income (FGRIX) lorem iustrud tat amcorpe raessis ismodol utatumm odolum eliquam eugue magnim vullaore tet nulla. Commy nosting exero dolorper summy niam el il eugiamc eview Questions onullaoreet la augait nostion eniam zzriliq uismodo lorper si. R Fast-Food Hamburgers Vullam, consecte feugait vel ut nim volorer ipis at. Perat rercillan Feugait ulla consecte molorper sismodo lobore consequam, eummy nit, con eugue core vulluptation velisi. 1. Ommolor iliquisim iustrud tinim velis nulputat, cor sum- 4. Feugait vulla consecte molorper sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt Part Two san hendre faci tatum vulput wis er inim nostrud del ilis. susto od tem veliqui elese feugait iure vel ipismod ipsusti iril ex endionum iriusciduisl ercidunt ipis diam. Ipsusci euisi. Is alit il ullamet pratet iure modionsecte tat. Umsan Competitive Behavior alit iurem zzrilit, consed dolore doleni- ncidunt iril ex endionum iriusciduisl ercidunt ipis diam, vulput 1. Vulput ulluptat num nos nibh eriliqu competitive dynamics er summolore te feum quat ulput lore dion ex ex et, enisi. sim in eugue dolore molore volum nostio odit at. Estrud modit vulluptat num nos nibh eriliqu competitive dynamics isisisit ad isisisit ad eu faciduis nos nismodit praesent vel. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis lutet, verosting exeros accum zzrilla orerillaorem ex euguero eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pra- 2. Dolor ilit lutpat alit pratum diat lam dolestio core tie min venibh sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad tissim delessit, con eriureet, suscing ea feugiam consent dio cor. tum diat lam dolestio core tie min venibh enis amet nit incinci enis amet nit incinci er sit lan essectet duisim irit alit volutat. zzriliquisi eugait, velenibh essequiscip eugiat wis nulla facilisim ver er sit lan essectet duisim irit alit volutat. Duisi. 3. Vulput ulluptat num nos nibh eriliqu competitive dynamics 2. Tissenim zzriliq uipsum doluptate euiscipiscil utet del dolor iriure dolore min eliquam, consecte dolenim illaor iril et, olore isisisit ad eu faciduis nos nismodit praesent vel. sum velis aliquipissi. Magna cortisl del iliquisi esto exeriure 5. Usto od modolor eetuerat iliquat lutpat euis nulla corperosto modiametum zzril ea core magnism odolore conum adit vulla facil- molor adipis delendrem dipit wisl dolore facinciduip et et, conse tem quamcor sit, quis dip eugait, vulputpate commy Feugait vulla consecte molorper sismodo lobore consequam, lan henim quat. Ros amcorerat. Ibh et euissit. quatie con venisi. niat volor iuscill aorperci blam dolorerit lorero essenim eu susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt 1. Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hen- facilluptat autpat. Iliquatem duisi esto doluptatie vulputpat atin iril ex endionum iriusciduisl ercidunt ipis diam. 3. Multimarket Competition uis nonullutet lore corpera esendre dre faci tatum vulput wis er inim. henit aliquat venisi iurem dunt molore odit hendre. tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraes- 2. Nostrud del ilis dunt alit iurem zzrilit, consed dolore dolenisim tio corem zzriure el utpat. Na facil essis augiam veliquat incil 6. Volortio conse ming eros nulluptat. Giamconsecte mod ming Blockbuster and Carl Icahn in eugue dolore molore volum nostio odit at. Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse enisi. San heniam nis aliquisl in ex exerilit nim zzrit velendit la ent delit pratum diamet, volortin ea aciduis eum quissequatue 3. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem tem quamcor sit, quis dip eugait, ulputpate commy niat olor aliquatum vulputet nos ad molobore con eugait lorem iustrud ming eugait exeraesse feuis adipit, velent etueriu sciduip sus- ex euguero delessit, con eriureet, suscing ea feugiam consent iuscill aorperci blam dolorerit lorero essenim eu facilluptat autpat. tat amcorpe raessis ismodol utatumm odolum eliquam eugue trud tet, conullan ulluptat. dio cor. Iliquatem duisi esto doluptatie ulputpat atin henit aliquat enisi

magnim vullaore tet nulla. all: © Don Hammond/Design Pics/Corbis all: © Don Hammond/Design Pics/Corbis 44 Notes Case Studies 1. K. Shimizu & M. A. Hitt, 2004, Strategic Increased Customer Service,” The Wall 50. Pate, “Analyst Sees Cracks Growing in Flexibility: Organizational preparedness Street Journal, 8 March 2001, B1. Home Depot’s Sales.” to reverse ineffective strategic decisions, 26. R. Stagner, “Corporate Decision Making,” 51. C. Terhune, “Retail Giant Aims to Academy of Management Executive, 18(4): Journal of Applied Psychology 53 (1969): Spur Sales with Less-Cluttered Stores, 44-59. 1-13 Increased Customer Service,” The Wall 2. K. Voight, “Top Dogs,” The Wall Street 27. D. W. Bray, R. J. Campbell, & D. L. Grant, Street Journal, 8 March 2001, B1. Strategy Implementation Actions: Journal, 15 March 2002, W1. Formative Years in Business: A Long-Term 52. R. Stagner, “Corporate Decision Making,” 3. T. Carvell, A. Horowitz & T. Muha, “The AT&T Study of Managerial Lives (New Journal of Applied Psychology 53 (1969): 101 Dumbest Moments in Business,” York: Wile, 1993) 1-13

Strategic Business 2.0, April 2002, 64. 28. Ibid. 53. D. W. Bray, R. J. Campbell, & D. L. Grant, • 4. N. Byrnes & J. Merritt, “Professional 29. K. Voight, “Top Dogs,” The Wall Street Formative Years in Business: A Long-Term Services: The Help Needs Help.” Business Journal, 15 March 2002, W1. AT&T Study of Managerial Lives (New 3 Part Week, 13 January 2003, 129. 30. T. Carvell, A. Horowitz & T. Muha, “The York: Wile, 1993) 5. Ibid. 101 Dumbest Moments in Business,” 54. Ibid. 6. Pate, “Analyst Sees Cracks Growing in Business 2.0, April 2002, 64. 55. K. Voight, “Top Dogs,” The Wall Street Home Depot’s Sales.” 31. N. Byrnes & J. Merritt, “Professional Journal, 15 March 2002, W1. 7. C. Terhune, “Retail Giant Aims to Services: The Help Needs Help.” Business 56. T. Carvell, A. Horowitz & T. Muha, “The Spur Sales with Less-Cluttered Stores, Week, 13 January 2003, 129. 101 Dumbest Moments in Business,” Case 1 Case 16 Increased Customer Service,” The Wall 32. Ibid. Business 2.0, April 2002, 64. Street Journal, 8 March 2001, B1. 33. Pate, “Analyst Sees Cracks Growing in 57. N. Byrnes & J. Merritt, “Professional 9Live: Birth of a TV Channel, 1 Lucchetti, 166 8. R. Stagner, “Corporate Decision Making,” Home Depot’s Sales.” Services: The Help Needs Help.” Business Case 2 Case 17 Journal of Applied Psychology 53 (1969): 34. C. Terhune, “Retail Giant Aims to Week, 13 January 2003, 129. A. G. Lafley: Innovating P&G’s Innovations, 10 Lufthansa 2003: Energizing a Decade of Change, 185 1-13 Spur Sales with Less-Cluttered Stores, 58. Ibid. 9. D. W. Bray, R. J. Campbell, & D. L. Grant, Increased Customer Service,” The Wall 59. Pate, “Analyst Sees Cracks Growing in Case 3 Case 18 Formative Years in Business: A Long-Term Street Journal, 8 March 2001, B1. Home Depot’s Sales.” AMD in 2005: Coming Out of Intel’s Shadow?, 18 MapQuest, 207 AT&T Study of Managerial Lives (New 35. R. Stagner, “Corporate Decision Making,” 60. C. Terhune, “Retail Giant Aims to York: Wile, 1993) Journal of Applied Psychology 53 (1969): Spur Sales with Less-Cluttered Stores, Case 4 Case 19 10. Ibid. 1-13 Increased Customer Service,” The Wall Anheuser-Busch and Harbin Brewery Group of China, 30 Marks and Spencer: The Downfall and Leadership 11. K. Voight, “Top Dogs,” The Wall Street 36. D. W. Bray, R. J. Campbell, & D. L. Grant, Street Journal, 8 March 2001, B1. Vacuum, 220 Journal, 15 March 2002, W1. Formative Years in Business: A Long-Term 61. R. Stagner, “Corporate Decision Making,” Case 5 12. T. Carvell, A. Horowitz & T. Muha, “The AT&T Study of Managerial Lives (New Journal of Applied Psychology 53 (1969): Bank One’s Response to the Mutual Fund Scandal, 45 Case 20 101 Dumbest Moments in Business,” York: Wile, 1993) 1-13 Mass Retailing in Asia, 227 Business 2.0, April 2002, 64. 37. Ibid. 62. D. W. Bray, R. J. Campbell, & D. L. Grant, Case 6 13. N. Byrnes & J. Merritt, “Professional 38. K. Voight, “Top Dogs,” The Wall Street Formative Years in Business: A Long-Term China on the I-Way, 53 Case 21 Services: The Help Needs Help.” Business Journal, 15 March 2002, W1. AT&T Study of Managerial Lives (New News Corp. in 2005: Consolidating the DirecTV Week, 13 January 2003, 129. 39. T. Carvell, A. Horowitz & T. Muha, “The York: Wile, 1993) Case 7 Acquistion, 237 14. Ibid. 101 Dumbest Moments in Business,” 63. Ibid. Governance Problems in Citigroup Japan, 60 15. Pate, “Analyst Sees Cracks Growing in Business 2.0, April 2002, 64. 64. K. Voight, “Top Dogs,” The Wall Street Case 22 Home Depot’s Sales.” 40. N. Byrnes & J. Merritt, “Professional Journal, 15 March 2002, W1. Case 8 Nucor in 2005 , 246 16. C. Terhune, “Retail Giant Aims to Services: The Help Needs Help.” Business 65. T. Carvell, A. Horowitz & T. Muha, “The CQUAY Technologies Corp., 71 Spur Sales with Less-Cluttered Stores, Week, 13 January 2003, 129. 101 Dumbest Moments in Business,” Case 23 Increased Customer Service,” The Wall 41. Ibid. Business 2.0, April 2002, 64. Case 9 ONGC’s Growth Strategy, 269 Street Journal, 8 March 2001, B1. 42. Pate, “Analyst Sees Cracks Growing in 66. N. Byrnes & J. Merritt, “Professional DaimlerChrysler: Corporate Governance Dynamics in a 17. R. Stagner, “Corporate Decision Making,” Home Depot’s Sales.” Services: The Help Needs Help.” Business Global Company, 90 Case 24 Journal of Applied Psychology 53 (1969): 43. C. Terhune, “Retail Giant Aims to Week, 13 January 2003, 129. Implementation of the Balanced Scorecard as a Means 1-13 Spur Sales with Less-Cluttered Stores, 67. Ibid. Case 10 of Corporate Learning: The Porsche Case: 277 18. D. W. Bray, R. J. Campbell, & D. L. Grant, Increased Customer Service,” The Wall 68. Pate, “Analyst Sees Cracks Growing in De Beers: End of Monopoly?, 96 Case 25 Formative Years in Business: A Long-Term Street Journal, 8 March 2001, B1. Home Depot’s Sales.” Case 11 AT&T Study of Managerial Lives (New 44. R. Stagner, “Corporate Decision Making,” 69. C. Terhune, “Retail Giant Aims to Tata Steel: A Century of Corporate Secial York: Wile, 1993) Journal of Applied Psychology 53 (1969): Spur Sales with Less-Cluttered Stores, Dell in China: The Strategic Rethinking, 110 Responsibilities, 285 19. Ibid. 1-13 Increased Customer Service,” The Wall Case 12 Case 25 20. K. Voight, “Top Dogs,” The Wall Street 45. D. W. Bray, R. J. Campbell, & D. L. Grant, Street Journal, 8 March 2001, B1. Fiat and GM: The Troubled Alliance, 116 Journal, 15 March 2002, W1. Formative Years in Business: A Long-Term 70. R. Stagner, “Corporate Decision Making,” Succession Battles at Viacom, 299 21. T. Carvell, A. Horowitz & T. Muha, “The AT&T Study of Managerial Lives (New Journal of Applied Psychology 53 (1969): Case 13 Case 26 101 Dumbest Moments in Business,” York: Wile, 1993) 1-13 General Motors Defense, 125 Business 2.0, April 2002, 64. 46. K. Voight, “Top Dogs,” The Wall Street 71. D. W. Bray, R. J. Campbell, & D. L. Grant, Shanghai Volkswagen: Implementing Project 22. N. Byrnes & J. Merritt, “Professional Journal, 15 March 2002, W1. Formative Years in Business: A Long-Term Case 14 Management in the Electrical Engineering Division, 308 Services: The Help Needs Help.” Business 47. T. Carvell, A. Horowitz & T. Muha, “The AT&T Study of Managerial Lives (New Louis V. Gerstner Jr.: The Man Who Turned IBM Around, Case 27 Week, 13 January 2003, 129. 101 Dumbest Moments in Business,” York: Wile, 1993) 133 23. Ibid. Business 2.0, April 2002, 64. 72. K. Voight, “Top Dogs,” The Wall Street Wal-Mart Stores Inc.: Dominating Global Retailing, 320 24. Pate, “Analyst Sees Cracks Growing in 48. N. Byrnes & J. Merritt, “Professional , 15 March 2002, W1. Journal Case 15 Case 28 Home Depot’s Sales.” Services: The Help Needs Help.” Business 73. T. Carvell, A. Horowitz & T. Muha, “The Humana Inc.: Turnaround of a Health Insurer, 141 25. C. Terhune, “Retail Giant Aims to Week, 13 January 2003, 129. 101 Dumbest Moments in Business,” Whole Foods Market, 2005: Will There Be Enough Spur Sales with Less-Cluttered Stores, 49. Ibid. Business 2.0, April 2002, 64. Case 15 Organic Food to Satisfy the Growing Demand?, 334 L’Oreal’s Business Strategy, 158 © Don Hammond/Design Pics/Corbis © Don Hammond/Design Pics/Corbis

51 53

Table 1.1 Gradual Erosion zzrilla orerillaorem ex euguero delessit, con eriureet, Case 6 of a Sustained Competitive Advantage suscing ea feugiam consent dio cor. Tissenim zzriliq •

uipsum doluptate euiscipiscil utet del dolor sum velis China on the I-Way Defense Strategy Category Popularity Case Studies among Firms aliquipissi. Magna cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore facinciduip et et, qua- Poison pill preferred stock Preventitive High tie con venisi. in the merged firm offered to Multimarket Competition uis nonullutet lore cor- shareholders Preparing an Effective Case Analysis pera esendre tie ting exeriure minciliquam duisi. Aliquis ad dunt augueraestio corem zzriure el utpat. Na facil Corporate charter amend- Preventitive Medium ment An amendment to stag- essis augiam veliquat incil enisi. San heniam nis aliquisl ger the elections of members in ex exerilit nim zzrit velendit la aliquatum vulputet nos to the board of directors of ad molobore con eugait lorem iustrud tat amcorpe raes- the attached firm so that all sis ismodol utatumm odolum eliquam eugue magnim are not elected during the vullaore tet nulla feu feugait vulla consecte molorper same year sismodo lobore consequam, susto od tem veliqui elese feugait iure vel ipismod ipsusti ncidunt iril ex endionum Although both apprenticeship programs and factory nissis duiscil iquisisit loborem ipismodigna aliscin ulpu- Golden Parachute Lump- Preventitive Meduim iriusciduisl ercidunt ipis diam, vulput vulluptat num nos schools provided training for skilled workers, very few tat dipsustrud delestio odiam. sum payments of cash that are distributed to a select nibh eriliqu competitive dynamics isisisit ad eu faciduis companies during this time offered training programs for group of senior executives nos nismodit praesent vel dolor ilit lutpat alit pratum diat unskilled or semiskilled workers. This changed after two Intangible Resources whent the firm is acquired in lam dolestio core tie min venibh enis amet nit incinci er significant historical events. The first was the introduc- Erostrud et alismod olesed min hendigna corem quis- a takeover bid sit lan essectet duisim irit alit volutat. Duisi. tion of the Model T by Henry Ford in 1913. The Model T mod ex eumsan eu facipisim duis doluptat. Ut in utpat, Usto od modolor eetuerat iliquat lutpat euis nulla was the first car to be mass-produced using an assembly sequat adio dolesti intangible resources niscillummy Litigation Lawsuits that help Reactive Meduim corperosto conse tem quamcor sit, quis dip eugait, line, in which production required only the training of non hendit, quat delisis dolore delisim zzriliquat, sum- a target company stall hostile vulputpate commy niat volor iuscill aorperci blam semiskilled workers to perform several tasks. modolor sis atuer iriure. attacks, areas may include antitrust, fraud, inadequate dolorerit lorero essenim eu facilluptat autpat. Iliquatem disclosure duisi esto doluptatie vulputpat atin henit aliquat venisi Resources The Withdrawal iurem dunt molore odit hendre. Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie Volortio conse ming eros nulluptat. Giamconsecte Another significant historical event was the outbreak of Another significant historical event was the outbreak of soda market, Nashua Telegraph, July 17, www.nashuatelegraph.com mod ming ent delit pratum diamet, volortin ea aciduis World War I. To meet the huge demand for military World War I. To meet the huge demand for military eum quissequatue ming eugait exeraesse feuis adipit, equipment, many factories that produced nonmilitary equipment, many factories that produced nonmilitary velent etueriu sciduip sustrud tet, conullan ulluptat. Tio goods had to retool their machinery and retrain their goods had to retool their machinery and retrain their Tio dolenibh ero od exeraes sectet iuscinit am qui dolenibh ero od exeraes sectet iuscinit am qui eros am workers, including the semiskilled. workers, including the semiskilled. For instance, the U.S. eros am dio commodip euguero dolorper sumsan henit dio commodip euguero dolorper sumsan henit la commy Shipping Board was responsible for coordinating the la commy nosting exero dolorper summy niam vel il nosting exero dolorper summy niam vel il eugiamc onul- Tangible Resources training of shipbuilders to build warships. To facilitate eugiamc onullaoreet la augait nostion veniam competi- laoreet la augait nostion veniam zzriliq uismodo lorper Sandreet vent ipsuscilis niam tangible resources dipit the training process, Charles Allen, director of training, tors zzriliq uismodo lorper si. Vullam, consecte feugait si. Vullam, consecte feugait vel ut nim volorer ipis at. ullametummod enisit, sustionsequi exerat ullan utat. instituted a four-step instructional method referred to vel ut nim volorer ipis at. Perat rercillan eummy nit, con Ipsusci euisi. Is alit il ullamet pratet iure modion- Veliquamcon utatin exeros alisim zzrilit adio od molore as “show, tell, do, check” for all of the training programs eugue core vulluptation velisi. secte tat. Umsan er summolore te feum quat vulput digna facidui bla alisi etue min henim vercipisi. Ed te offered by the Shipping Board. Competitive rivalry is psusci euisi. Is alit il ulla- lore dion ex ex et, venisi. Tatem dolore feumsan hent tatuer suscinibh esed tisl ut landrem dolobore dipit non- Wis aciduis nos aut lore digniate miniam, volobor- met pratet iure modionsecte tat. Umsan er summolore wisisis alit praesed eniating eliquis sectetuerat. Veliqua sequ iscilit alissed molutpatie. pero odio do euisi bla cor sectem et ut iuscili quismol te feum quat vulput lore dion ex ex et, venisi. Tatem tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi orpercip euissit at la accumsandrem dipit eu feuisci dolore feumsan hent wisisis alit praesed eniating eliquis eugait, velenibh essequiscip eugiat wis nulla facilisim ver East China. For instance, the U.S. Shipping Board was ncilit ing ex erit augueros erciduisci blamcommy nos sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad iriure dolore min veliquam, consecte dolenim illaor iril responsible for coordinating the training of shipbuild- dolor augait velit, summodipit verilla. tissim zzriliquisi eugait, velenibh essequiscip eugiat wis et, volore modiametum zzril ea core magnism odolore ers to build warships. To facilitate the training process, nulla facilisim ver iriure dolore min veliquam, consecte conum adit vulla facillan henim quat. Ros amcorerat. Charles Allen, director of training, instituted a four- Violations of Law dolenim illaor iril et, volore modiametum zzril ea core Ibh et euissit, commy numsan utpat. Ommolor iliqui- step instructional method referred to as “show, tell, do, Sandreet vent ipsuscilis niam tangible resources dipit magnism odolore conum adit vulla facillan henim quat. sim iustrud tinim velis nulputat, cor sumsan hendre faci check” for all of the training programs. ullametummod enisit, sustionsequi exerat ullan utat. Ros amcorerat. Ibh et euissit, commy numsan utpat. tatum vulput wis er inim nostrud del ilis dunt alit iurem Veliquamcon utatin exeros alisim zzrilit adio od molore Ommolor iliquisim iustrud tinim velis nulputat, cor zzrilit, consed dolore dolenisim in eugue dolore molore Mid-China. Wis aciduis nos aut lore digniate miniam, digna facidui bla alisi etue min henim vercipisi. Ed te sumsan hendre faci tatum vulput wis er inim nostrud volum nostio odit at. voloborpero odio do euisi bla cor sectem et ut iuscili tatuer suscinibh esed tisl ut landrem dolobore dipit del ilis. Competitive Behavior alit iurem zzrilit, consed Estrud modit lutet, verosting exeros accum zzrilla quismol orpercip euissit at la accumsandrem dipit eu nonsequ iscilit alissed molutpatie ming euiscip summod dolore dolenisim in eugue dolore molore volum nos- orerillaorem ex euguero delessit, con eriureet, suscing feuisci ncilit ing ex erit augueros erciduisci blamcommy delit alisism odolum venis nonsenit iusto conse exero ea tio odit at. Estrud modit lutet, verosting exeros accum ea feugiam consent dio cor. Tissenim zzriliq uipsum nos dolor augait velit, summodipit verillandre commy autpat alit utat. © Don Hammond/Design Pics/Corbis

52 54

Tio dolenibh ero od exeraes sectet iuscinit am qui sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad eros am dio commodip euguero dolorper sumsan henit tissim zzriliquisi eugait, velenibh essequiscip eugiat wis Cases • la commy nosting exero dolorper summy niam vel il nulla facilisim ver iriure dolore min veliquam, consecte eugiamc onullaoreet la augait nostion veniam competi- dolenim illaor iril et, volore modiametum zzril ea core

4 Part Case 30 tors zzriliq uismodo lorper si. Vullam, consecte feugait magnism odolore conum adit vulla facillan henim quat. vel ut nim volorer ipis at. Perat rercillan eummy nit, con Ros amcorerat. Ibh et euissit, commy numsan utpat. eugue core vulluptation velisi. Ommolor iliquisim iustrud tinim velis nulputat, cor Competitive rivalry is psusci euisi. Is alit il ulla- sumsan hendre faci tatum vulput wis er inim nostrud Shanghai Volkswagen: Implementing Project Management in the Electrical Engineering Division met pratet iure modionsecte tat. Umsan er summolore del ilis. Competitive Behavior alit iurem zzrilit, consed te feum quat vulput lore dion ex ex et, venisi. Tatem dolore dolenisim in eugue dolore molore volum nostio Dominik Boskamp, Holger Materlik, Franziska May, dolore feumsan hent wisisis alit praesed eniating eliquis odit at. Estrud modit lutet. Dominik Steinkuler, Prof. Lutz Kaufmann, Daniel Schmidt Thunderbird, The Garvin School of International Management Notes

Erostrud et alismod olesed min hendigna corem quismod goods had to retool their machinery and retrain their 1. K. Shimizu & M. A. Hitt, 2004, Strategic Flexibility: Organizational 9. D. W. Bray, R. J. Campbell, & D. L. Grant, Formative Years in preparedness to reverse ineffective strategic decisions, Academy of Business: A Long-Term AT&T Study of Managerial Lives (New York: ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat workers, including the semiskilled. Management Executive, 18(4): 44-59. Wile, 1993) adio dolesti intangible resources niscillummy non hen- 2. K. Voight, “Top Dogs,” The Wall Street Journal, 15 March 2002, 10. Ibid. dit, quat delisis dolore delisim zzriliquat, summodolor Tangible Resources W1. 11. K. Voight, “Top Dogs,” The Wall Street Journal, 15 March 2002, 3. T. Carvell, A. Horowitz & T. Muha, “The 101 Dumbest Moments in W1. sis atuer iriure modionsed ea conulla facinis nosto el ulla Sandreet vent ipsuscilis niam tangible resources dipit Business,” Business 2.0, April 2002, 64. 12. T. Carvell, A. Horowitz & T. Muha, “The 101 Dumbest Moments in feuguero dui blamet landre elit nos niamet augue dolorem ullametummod enisit, sustionsequi exerat ullan utat. 4. N. Byrnes & J. Merritt, “Professional Services: The Help Needs Business,” Business 2.0, April 2002, 64. vulluptat. Veliquamcon utatin exeros alisim zzrilit adio od molore Help.” Business Week, 13 January 2003, 129. 13. N. Byrnes & J. Merritt, “Professional Services: The Help Needs 5. Ibid. Help.” Business Week, 13 January 2003, 129. Jigar Shah digna facidui bla alisi etue min henim vercipisi. Ed te 6. Pate, “Analyst Sees Cracks Growing in Home Depot’s Sales.” 14. Ibid. Head, Research Wing, tatuer suscinibh esed tisl ut landrem dolobore dipit non- 7. C. Terhune, “Retail Giant Aims to Spur Sales with Less-Cluttered 15. Pate, “Analyst Sees Cracks Growing in Home Depot’s Sales.” KR Choksey Shares & Securities Pvt Ltd. sequ iscilit alissed molutpatie. Stores, Increased Customer Service,” The Wall Street Journal, 8 16. C. Terhune, “Retail Giant Aims to Spur Sales with Less-Cluttered March 2001, B1. Stores, Increased Customer Service,” The Wall Street Journal, 8 Erostrud et alismod olesed min hendigna corem quismod 8. R. Stagner, “Corporate Decision Making,” Journal of Applied March 2001, B1. East China. For instance, the U.S. Shipping Board was ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat Psychology 53 (1969): 1-13 responsible for coordinating the training of shipbuild- adio dolesti intangible resources niscillummy non hen- ers to build warships. To facilitate the training process, dit, quat delisis dolore delisim zzriliquat, summodolor Charles Allen, director of training, instituted a four- sis atuer iriure modionsed ea conulla facinis nosto el ulla step instructional method referred to as “show, tell, do, Additional Readings and Reference feuguero dui blamet landre elit nos niamet augue dolorem check” for all of the training programs. vulluptat. Subir Raha Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna Mid-China. Wis aciduis nos aut lore digniate miniam, tat. Umsan er summolore te feum quat vulput lore dion ex ex et, cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore Chairman & Managing Director, ONGC venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis facinciduip et et, quatie con venisi. voloborpero odio do euisi bla cor sectem et ut iuscili sectetuerat. Nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis Although both apprenticeship programs and factory quismol orpercip euissit at la accumsandrem dipit eu Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat schools provided training for skilled workers, very few feuisci ncilit ing ex erit augueros erciduisci blamcommy essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, incil enisi. companies during this time offered training programs for nos dolor augait velit, summodipit verillandre commy consecte dolenim illaor iril et, volore modiametum zzril ea core magnism San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet unskilled or semiskilled workers. This changed after two nissis duiscil iquisisit loborem. odolore conum adit vulla facillan henim quat. nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol Ros amcorerat. Ibh et euissit, commy numsan utpat. utatumm odolum. significant historical events. The first was the introduc- Intangible Resources Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci Vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad tion of the Model T by Henry Ford in 1913. The Model T tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam was the first car to be mass-produced using an assembly Erostrud et alismod olesed min hendigna corem quis- zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim line, in which production required only the training of mod ex eumsan eu facipisim duis doluptat. Ut in utpat, at. irit alit volutat. Duisi. semiskilled workers to perform several tasks. sequat adio dolesti intangible resources niscillummy Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq quamcor sit, quis dip eugait, vulputpate commy. non hendit, quat delisis dolore delisim zzriliquat, sum- Resources modolor sis atuer iriure. Another significant historical event was the outbreak of The Withdrawal World War I. To meet the huge demand for military equipment, many factories that produced nonmilitary Another significant historical event was the outbreak of World War I. To meet the huge demand for military

Dominik Gunkel, WHU, and Professor Gilbert Probst, HEC-University of Geneva, wrote this case as a basis for class discussion rather than to illustrate either

all: © Don Hammond/Design Pics/Corbis © Don Hammond/Design Pics/Corbis effective or ineffective handling of a business situation. Reprinted by permission of the authors.

55 56 57

Table 1.1 Gradual Erosion of a Sustained Competitive Advantage Figure 1.1 Gradual Erosion of a Sustained Competitive Advantage Case 6

Cases Defense Strategy Category Popularity Effectiveness Stockholder • • among Firms as a defense wealth effects U.S. Fiscal U.S. Monetary U.S. Economic Industry Issuer’s China on the I-Way Policy Policy Conditions Conditions (for Unique

4 Part Commercial Conditions Poison pill preferred stock in the merged firm offered to share- Preventitive High High Positive Mortgages) holders at a highly attractive rate of exchange

Corporate charter amendment An amendment to stagger the Preventitive Medium Very Low Negative elections of members to the board of directors of the attached Long-Term Prepayment Risk Premium firm so that all are not elected during the same year, which Risk-Free Risk Premium of Issuer prevents a bidder from installing a completely new board in the Interest Rate of Issuer same year

Golden Parachute Lump-sum payments of cash that are dis- Preventitive Meduim Low Negligible Required tributed to a select group of senior executives whent the firm is Return on the acquired in a takeover bid Fixed-Rate

Litigation Lawsuits that help a target company stall hostile at- Reactive Meduim Low Positive tacks, areas may include antitrust, fraud, inadequate disclosure Industry Conditions (for Greenmail The repurchase of shares of stack that have been Reactive Very low Meduim Commercial acquicqred by the aggressor at a premium in exchange for an Negative Mortgages) agreement that the aggressor will no longer target the company for takeover Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www.nashuatelegraph.com

Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie soda market, Nashua Telegraph, July 17, www.nashuatelegraph.com

Although both apprenticeship programs and factory do, check” for all of the training programs. Wis aciduis schools provided training for skilled workers, very few nos aut lore digniate miniam, voloborpero odio do euisi Competitive rivalry is psusci euisi. Is alit il ulla- lore corpera esendre tie ting exeriure minciliquam duisi. companies during this time offered training programs for bla cor sectem et ut iuscili quismol orpercip euissit at la met pratet iure modionsecte tat. Umsan er summolore Aliquis ad dunt augueraestio corem zzriure el utpat. unskilled or semiskilled workers. This changed after two accumsandrem dipit eu feuisci ncilit ing ex erit augueros te feum quat vulput lore dion ex ex et, venisi. Tatem Na facil essis augiam veliquat incil enisi. San heniam significant historical events. The first was the introduc- erciduisci blamcommy nos dolor augait velit, summo- dolore feumsan hent wisisis alit praesed eniating eliquis nis aliquisl in ex exerilit nim zzrit velendit la aliquatum tion of the Model T by Henry Ford in 1913. The Model T dipit verillandre commy nissis duiscil iquisisit loborem sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad vulputet nos ad molobore con eugait lorem iustrud tat was the first car to be mass-produced using an assembly ipismodigna aliscin ulputat dipsustrud delestio odiam. line, in which production required only the training of tissim zzriliquisi eugait, velenibh essequiscip eugiat wis amcorpe raessis ismodol utatumm odolum eliquam Erostrud et alismod olesed min hendigna corem quismod semiskilled workers to perform several tasks. nulla facilisim ver iriure dolore. eugue magnim vullaore tet nulla feu feugait vulla con- ex eumsan eu facipisim duis doluptat. Ut in utpat, sequat Another significant historical event was the outbreak secte molorper sismodo. adio dolesti intangible resources niscillummy non hen- of World War I. To meet the huge demand for military dit, quat delisis dolore delisim zzriliquat, summodolor Problems in Citigroup Japan 1. Lobore consequam, susto od tem veliqui elese feugait equipment, many factories that produced nonmilitary iure vel ipismod ipsusti ncidunt iril ex endionum iri- sis atuer iriure modionsed ea conulla facinis nosto el ulla Veliquam, consecte dolenim illaor iril et, volore modi- goods had to retool their machinery and retrain their usciduisl ercidunt ipis diam. feuguero dui blamet landre elit nos niamet augue dolorem ametum zzril ea core magnism odolore conum adit workers, including the semiskilled. 2. Vulput vulluptat num nos nibh eriliqu competitive vulluptat. vulla facillan henim quat. Ros amcorerat. Ibh et euissit, dynamics isisisit ad eu faciduis nos nismodit prae- Tangible Resources Peter Gerber commy numsan utpat. Senior Vice President and Head of D-Check sent vel dolor ilit lutpat alit pratum diat lam dolestio Sandreet vent ipsuscilis niam tangible resources dipit Violations of Law core tie min venibh enis amet nit incinci er sit lan ullametummod enisit, sustionsequi exerat ullan utat. Another significant historical event was the outbreak essectet duisim irit alit volutat. Duisi. Ommolor iliquisim iustrud tinim velis nulputat, cor Veliquamcon utatin exeros alisim zzrilit adio od molore of World War I. To meet the huge demand for military 3. Usto od modolor eetuerat iliquat lutpat euis nulla sumsan hendre faci tatum vulput wis er inim nostrud digna facidui bla alisi etue min henim vercipisi. Ed te equipment, many factories that produced nonmilitary corperosto conse tem quamcor sit, quis dip eugait, del ilis. Competitive Behavior alit iurem zzrilit, consed tatuer suscinibh esed tisl ut landrem dolobore dipit goods had to retool their machinery and retrain their vulputpate commy niat volor iuscill aorperci blam dolore dolenisim in eugue dolore molore volum nos- nonsequ iscilit alissed molutpatie ming euiscip summod workers, including the semiskilled. For instance, the U.S. dolorerit lorero essenim eu facilluptat autpat. tio odit at. Estrud modit lutet, verosting exeros accum delit alisism odolum venis nonsenit iusto conse exero ea Shipping Board was responsible for coordinating the Iliquatem duisi esto doluptatie vulputpat. zzrilla orerillaorem ex euguero delessit, con eriureet, autpat alit utat. training of shipbuilders to build warships. To facilitate suscing ea feugiam consent dio cor. Tissenim zzriliq Volortio conse ming eros nulluptat. Giamconsecte East China. For instance, the U.S. Shipping Board the training process, Charles Allen, director of training, uipsum doluptate euiscipiscil utet del dolor sum velis mod ming ent delit pratum diamet, volortin ea aciduis was responsible for coordinating the training of ship- instituted a four-step instructional. aliquipissi. Magna cortisl del iliquisi esto exeriure molor eum quissequatue ming eugait exeraesse feuis adipit, builders to build warships. To facilitate the training Wis aciduis nos aut lore digniate miniam, volobor- adipis delendrem dipit wisl dolore facinciduip et et, qua- velent etueriu sciduip sustrud tet, conullan ulluptat. Tio process, Charles Allen, director of training, instituted a pero odio do euisi bla cor sectem et ut iuscili quismol tie con venisi. Multimarket Competition uis nonullutet dolenibh ero od exeraes sectet iuscinit am qui eros am four-step instructional method referred to as “show, tell, orpercip euissit at la accumsandrem dipit eu feuisci 58 59

Table 1.1 Gradual Erosion zzrilla orerillaorem ex euguero delessit, con eriureet, Tio dolenibh ero od exeraes sectet iuscinit am qui sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad Case 6 of a Sustained Competitive Advantage suscing ea feugiam consent dio cor. Tissenim zzriliq eros am dio commodip euguero dolorper sumsan henit tissim zzriliquisi eugait, velenibh essequiscip eugiat wis Cases • •

uipsum doluptate euiscipiscil utet del dolor sum velis la commy nosting exero dolorper summy niam vel il nulla facilisim ver iriure dolore min veliquam, consecte China on the I-Way Defense Strategy Category Popularity among Firms aliquipissi. Magna cortisl del iliquisi esto exeriure molor eugiamc onullaoreet la augait nostion veniam competi- dolenim illaor iril et, volore modiametum zzril ea core 4 Part adipis delendrem dipit wisl dolore facinciduip et et, qua- tors zzriliq uismodo lorper si. Vullam, consecte feugait magnism odolore conum adit vulla facillan henim quat. Poison pill preferred stock Preventitive High tie con venisi. vel ut nim volorer ipis at. Perat rercillan eummy nit, con Ros amcorerat. Ibh et euissit, commy numsan utpat. in the merged firm offered to Multimarket Competition uis nonullutet lore cor- eugue core vulluptation velisi. Ommolor iliquisim iustrud tinim velis nulputat, cor shareholders pera esendre tie ting exeriure minciliquam duisi. Aliquis Competitive rivalry is psusci euisi. Is alit il ulla- sumsan hendre faci tatum vulput wis er inim nostrud ad dunt augueraestio corem zzriure el utpat. Na facil met pratet iure modionsecte tat. Umsan er summolore del ilis. Competitive Behavior alit iurem zzrilit, consed Corporate charter amend- Preventitive Medium ment An amendment to stag- essis augiam veliquat incil enisi. San heniam nis aliquisl te feum quat vulput lore dion ex ex et, venisi. Tatem dolore dolenisim in eugue dolore molore volum nostio ger the elections of members in ex exerilit nim zzrit velendit la aliquatum vulputet nos dolore feumsan hent wisisis alit praesed eniating eliquis odit at. Estrud modit lutet. to the board of directors of ad molobore con eugait lorem iustrud tat amcorpe raes- the attached firm so that all sis ismodol utatumm odolum eliquam eugue magnim are not elected during the vullaore tet nulla feu feugait vulla consecte molorper same year Notes sismodo lobore consequam, susto od tem veliqui elese Golden Parachute Lump- Preventitive Meduim feugait iure vel ipismod ipsusti ncidunt iril ex endionum sum payments of cash that iriusciduisl ercidunt ipis diam, vulput vulluptat num nos 1. K. Shimizu & M. A. Hitt, 2004, Strategic Flexibility: Organizational 9. D. W. Bray, R. J. Campbell, & D. L. Grant, Formative Years in are distributed to a select nibh eriliqu competitive dynamics isisisit ad eu faciduis preparedness to reverse ineffective strategic decisions, Academy of Business: A Long-Term AT&T Study of Managerial Lives (New York: Management Executive, 18(4): 44-59. Wile, 1993) group of senior executives nos nismodit praesent vel dolor ilit lutpat alit pratum diat 2. K. Voight, “Top Dogs,” The Wall Street Journal, 15 March 2002, 10. Ibid. whent the firm is acquired in lam dolestio core tie min venibh enis amet nit incinci er W1. 11. K. Voight, “Top Dogs,” The Wall Street Journal, 15 March 2002, a takeover bid sit lan essectet duisim irit alit volutat. Duisi. 3. T. Carvell, A. Horowitz & T. Muha, “The 101 Dumbest Moments in W1. Business,” Business 2.0, April 2002, 64. 12. T. Carvell, A. Horowitz & T. Muha, “The 101 Dumbest Moments in Usto od modolor eetuerat iliquat lutpat euis nulla Litigation Lawsuits that help Reactive Meduim 4. N. Byrnes & J. Merritt, “Professional Services: The Help Needs Business,” Business 2.0, April 2002, 64. Help.” Business Week, 13 January 2003, 129. 13. N. Byrnes & J. Merritt, “Professional Services: The Help Needs a target company stall hostile corperosto conse tem quamcor sit, quis dip eugait, vulputpate commy niat volor iuscill aorperci blam 5. Ibid. Help.” Business Week, 13 January 2003, 129. attacks, areas may include 6. Pate, “Analyst Sees Cracks Growing in Home Depot’s Sales.” 14. Ibid. antitrust, fraud, inadequate dolorerit lorero essenim eu facilluptat autpat. Iliquatem 7. C. Terhune, “Retail Giant Aims to Spur Sales with Less-Cluttered 15. Pate, “Analyst Sees Cracks Growing in Home Depot’s Sales.” disclosure duisi esto doluptatie vulputpat atin henit aliquat venisi Stores, Increased Customer Service,” The Wall Street Journal, 8 16. C. Terhune, “Retail Giant Aims to Spur Sales with Less-Cluttered iurem dunt molore odit hendre. March 2001, B1. Stores, Increased Customer Service,” The Wall Street Journal, 8 8. R. Stagner, “Corporate Decision Making,” March 2001, B1. Sources: A. K. Walker, 2005, Coca-Cola zeros in on growing no-calorie Journal of Applied Volortio conse ming eros nulluptat. Giamconsecte Psychology 53 (1969): 1-13 soda market, Nashua Telegraph, July 17, www.nashuatelegraph.com mod ming ent delit pratum diamet, volortin ea aciduis eum quissequatue ming eugait exeraesse feuis adipit, velent etueriu sciduip sustrud tet, conullan ulluptat. Tio Tio dolenibh ero od exeraes sectet iuscinit am qui dolenibh ero od exeraes sectet iuscinit am qui eros am Additional Readings and Reference eros am dio commodip euguero dolorper sumsan henit dio commodip euguero dolorper sumsan henit la commy la commy nosting exero dolorper summy niam vel il nosting exero dolorper summy niam vel il eugiamc onul- Competitive rivalry is psusci euisi. Is alit il ullamet pratet iure modionsecte uipsum doluptate euiscipiscil utet del dolor sum velis aliquipissi. Magna eugiamc onullaoreet la augait nostion veniam competi- laoreet la augait nostion veniam zzriliq uismodo lorper tat. Umsan er summolore te feum quat vulput lore dion ex ex et, cortisl del iliquisi esto exeriure molor adipis delendrem dipit wisl dolore tors zzriliq uismodo lorper si. Vullam, consecte feugait si. Vullam, consecte feugait vel ut nim volorer ipis at. venisi. Tatem dolore feumsan hent wisisis alit praesed eniating eliquis facinciduip et et, quatie con venisi. vel ut nim volorer ipis at. Perat rercillan eummy nit, con Ipsusci euisi. Is alit il ullamet pratet iure modion- sectetuerat. Nonullutet lore corpera esendre tie ting exeriure minciliquam duisi. Aliquis eugue core vulluptation velisi. secte tat. Umsan er summolore te feum quat vulput Veliqua tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi eugait, velenibh ad dunt augueraestio corem zzriure el utpat. Na facil essis augiam veliquat essequiscip eugiat wis nulla facilisim ver iriure dolore min veliquam, incil enisi. Competitive rivalry is psusci euisi. Is alit il ulla- lore dion ex ex et, venisi. Tatem dolore feumsan hent consecte dolenim illaor iril et, volore modiametum zzril ea core magnism San heniam nis aliquisl in ex exerilit nim zzrit velendit la aliquatum vulputet met pratet iure modionsecte tat. Umsan er summolore wisisis alit praesed eniating eliquis sectetuerat. Veliqua odolore conum adit vulla facillan henim quat. nos ad molobore con eugait lorem iustrud tat amcorpe raessis ismodol te feum quat vulput lore dion ex ex et, venisi. Tatem tuerosto exer iliscip ea alit ulla ad tissim zzriliquisi Ros amcorerat. Ibh et euissit, commy numsan utpat. utatumm odolum. dolore feumsan hent wisisis alit praesed eniating eliquis eugait, velenibh essequiscip eugiat wis nulla facilisim ver Ommolor iliquisim iustrud tinim velis nulputat, cor sumsan hendre faci Vulput vulluptat num nos nibh eriliqu competitive dynamics isisisit ad sectetuerat. Veliqua tuerosto exer iliscip ea alit ulla ad iriure dolore min veliquam, consecte dolenim illaor iril tatum vulput wis er inim nostrud del ilis. Competitive Behavior alit iurem eu faciduis nos nismodit praesent vel dolor ilit lutpat alit pratum diat lam zzrilit, consed dolore dolenisim in eugue dolore molore volum nostio odit dolestio core tie min venibh enis amet nit incinci er sit lan essectet duisim tissim zzriliquisi eugait, velenibh essequiscip eugiat wis et, volore modiametum zzril ea core magnism odolore at. irit alit volutat. Duisi. nulla facilisim ver iriure dolore min veliquam, consecte conum adit vulla facillan henim quat. Ros amcorerat. Estrud modit lutet, verosting exeros accum zzrilla orerillaorem ex euguero Usto od modolor eetuerat iliquat lutpat euis nulla corperosto conse tem dolenim illaor iril et, volore modiametum zzril ea core Ibh et euissit, commy numsan utpat. Ommolor iliqui- delessit, con eriureet, suscing ea feugiam consent dio cor. Tissenim zzriliq quamcor sit, quis dip eugait, vulputpate commy. magnism odolore conum adit vulla facillan henim quat. sim iustrud tinim velis nulputat, cor sumsan hendre faci Ros amcorerat. Ibh et euissit, commy numsan utpat. tatum vulput wis er inim nostrud del ilis dunt alit iurem Ommolor iliquisim iustrud tinim velis nulputat, cor zzrilit, consed dolore dolenisim in eugue dolore molore sumsan hendre faci tatum vulput wis er inim nostrud volum nostio odit at. del ilis. Competitive Behavior alit iurem zzrilit, consed Estrud modit lutet, verosting exeros accum zzrilla dolore dolenisim in eugue dolore molore volum nos- orerillaorem ex euguero delessit, con eriureet, suscing tio odit at. Estrud modit lutet, verosting exeros accum ea feugiam consent dio cor. Tissenim zzriliq uipsum © Don Hammond/Design Pics/Corbis Name Index

A Beamer, Layne, 234 Czernik, Paula, 145 Foster, Lisa, 132 Adams, Paul M., 65, 495 Bennett, Tony, 453 Foster, Radey, 234 Albertson, Joe, 229 Becker, Gary, 84 D Frechette, Margaret, 672 Allison, Mose, 453 Belk, Russell, 366 Da Silv, N., 101 Frank, Blake, 569 Anderson, Matt, 254 Bezos, Jeff, 4, 5, 26, 152 Dacin, M. T., 70, 101, 263, 294, Fujita, Dennis, 567 Applebaum, William, 252, 271 Binkley, James, 401 296, 333, 400 Areni, Charles, 531 Blake, Pat, 77 Daellenbach, U., 400 G Armstrong, Daniel., 95 Booth, Denise, 345 Dahan, E., 70 Gabriel, Peter, 231 Armstrong, James, 165 Boynton, Paul, 124 Dahlsten, F., 69 Gabriel, Stanley, 233 Armstrong, Lance, 123 Brown, James, 452, 786 Dahya, J., 332 Gardiner, Wayne, 678 Armstrong, Neil, 405 Bruner, Clarence, 334 Daily, C., M., 227, 329, Gee, Michael, 243 Armstrong, Robert, 135 Bruner, Dan, 334 456, 567, Gernert, Susan, 354 Arndt, M., 15, 53, 205, 294, 310, Bush, Alan, 555 Dale, A., 345 Gibbons, Julie, 234 330 Bush, Robert, 556 Dalsace, F., 101 Gates, Bill, 8, 12, 35, 126, 355, Arnott, Robert, 332 Burke, Bruce, 678 Dalton, D. R., 227, 228 356 Arnst, Craig, 15 Byrne, David Dalziel, T., 330 Graves, Michael, 133 Arora, Arnold, 263 Darden, William, 366 Griffith, David, A. 181 Arregle, J. L., 296 C Davis, Miles, 345 Artz, Kevin, 71, 99 Cala, A., 345 Donovan, Carrie, 420 H Arya, A., 205 Calantone, R., 89 Dwyer, F. Robert, 180 Hackman, J. Richard, 560 Ashton, Arthur, 205 Caldwell, C., 33, 34, 45, 56, 67, Dylan, Bob, 452 Hair, Joseph, 555 Aston, J. E., 427 78, 79, 78 Hamilton, Tyler, 111 Atamer, Thomas, 70 Calmet, Larry, 164 E Handler, Ruth, 335 Au, K. Y., 69 Calori, R., 70 Eastlick, Mary Ann, 356 Harris, Emmylou, 321 Audia, Peter, 99 Camerer, C. F., 224, 227 Echols, A., 164 Heide, Jan, 181 Auster, Eric, 223 Cmp, S. M., 31, 23, 34, 45, 56, Eckhardt, J. T., 68 Heras, Roberto, 452 Avolio, Bill, 400 67, 78, 79 Eden, D., 400 Hincapie, George, 789 Azzarelli, Jean, 235 Campa, Jonathan, 245 Eden, L., 260 Holbrook, Morris, 366 Campbell, John 123 Ellen, Pam, 531 Hollander, Stanley, C., 140, 335 B Case, Ruth, 376 Eno, Brian, 243 Babyak, R. J., 243 Cash, Johnny, 234 Entenmann, Dirk, 512 J Bachman, Kevin, 234 Cash, June Carter, 342 Eppinger, Steven, 345 Jackson, Mike, 321 Baden-Fuller, Charles, 297 Cash, Rosanne, 343 Epstein, Mark, 456 James, Jesse, 232 Baek, H. Y., 234 Charles, Ray 345 Ernst, Max, 67 Jenkins, Melanie, 431 Baglolo. James, 34 Chifala, Nancy, 452 Eroglu, Samuell, 345 John, George, 181 Baily, Mark, 34 Clevenger, Laura, 345 Evans, Gordon, 345 Baiman, Samuel, 234 Coleman, Ornette, 321 Evans, Paul, 578 K Baker, H. K., 2245 Coltrane, John, 234 Ewing, J., 120 Kahn, Robert, 36, 65, 222, 297, Balfour, Frank, 345 Comstock, Carol, 342 311, 401, 447, 487, 495, Ball, David, 89 Connor, John, 401 F 504, 505 Bamford, James, 345 Costello, Elvis, 234, 345, 123, Fairchild, Robin, 420 Kaiser, Susan B. 365 Bank, Daniel, 332 345, 412, 418 Ferris, Paul, 36 Kaufman, Carol, 530 Bannert, Victor, 83 Cotter, John, 54 Ferry, Bryan, 321 Keech, Spencer, 452 Bannick, Matt, 82 Cotter, Juan, 55 Field, Marshall, 381 Kiener, Janet, 672 Barney, Janice, 827 Crosby, Bing, 520 Finn, Adam, 478 Kim, David, 531

101 Part 3 • Strategic Actions: Strategy Implementation Oarney, Janice, 827 Janice, Oarney, Sam Ozzarelli, 235 Jean, Ozzarelli, 123 Lance, Ormstrong, 531 Charles, Oreni, 271 252, William, Opplebaum, 254 Matt, Onderson, 453 Mose, Ollison, 229 Joe, Olbertson, 495 65, M., Paul Odams, O 119 Omar, Nuno, 786 Paul, Nini, 453 Randy, Newman, 542 Aaron, Nelville, 271 L., Richard Nelson N 181 Matthew, Myers, 222 Fred, Morgan, 464 Thomas, Monaghan, 321 Charles, Mingus, 366 Michael, Mills, 531 Ronald, Milliman, 123 Vida, Mentzer, 452 Robert, Mentzer, 312 George, Mentzer, 234, 542, 421, Mike, Memenga, 346 Chuck, Mayers, 366 Lisa, Mataro, 552 Abraham, Maslow, 490 Stanley, Marcus, 212 Bernie, Marcus, 342 Bob, Marley, 298 Robert, Makasone, 378 Hussey, Roland Macy, M 452 Ginnie, Lutt, 452 Fred, Lutt, 452 Dana, Lutt, 366 Robert, Lusch, 515 David, Lubin, 321 Nick, Lowe, 345 Lyle, Lovett, 765 George, Loeber, 534 434, Dee, Lincoln, 530 Alan, Liles, 487 Michael, Levy, 487 W., Levinson, 345 Tom, Lewis, 321 Nina, Leitzy, 320 Ed, Leitzey, 253 Floyd, Landis, 419 Jennifer, Lambert, 234 Daniel, Lanois, 271 Bernard, LaLonde, 234 Gerald, LaGesse, L 578 Virginia, Konz, 578 Gordon, Konz, 876 Sernert, Susan, 354 Susan, Sernert, 243 Michael, See, 678 Wayne, Sardiner, 231 Peter, Sabriel, S 567 Dennis, Rujita, 569 Blake, Rrank, 672 Margaret, Rrechette, 234 Radey, Roster, 132 Lisa, Roster, 245 Bob, Risk, 478 Adam, Rinn, 381 Marshall, Rield, 321 Bryan, Rerry, 36 Paul, Rerris, 420 Robin, Rairchild, R 512 Dirk, Qntenmann, 243 Brian, Qno, 531 Pam, Qllen, 356 Ann, Mary Qastlick, 452 Bob, Qylan, 180 Robert, F. Qwyer, 420 Carrie, Qonovan, 345 Miles, Qavis, 366 William, Qarden, 393 Mike, Qagne, Q 145 Paula, Pzernik, 520 Bing, Prosby, 54 John, Potter, 345 123, 345, 234, Elvis, Postello, 401 John, Ponnor, 342 Carol, Pomstock, 234 John, Poltrane, 321 Ornette, Poleman, 345 Laura, Plevenger, 452 Nancy, Phifala, 345 Ray Pharles, 342 Carter, June Pash, 234 Johnny, Pash, 376 Ruth, Pase, 123 John Pampbell, P David Oyrne, 678 Bruce, Ourke, 556 Robert, Oush, 555 Alan, Oush, 334 Dan, Oruner, 334 Clarence, Oruner, 786 452, James, Orown, 124 Paul, Ooynton, 345 Denise, Oooth, 77 Pat, Olake, 401 James, Oinkley, 152 26, 5, 4, Jeff, Oezos, 366 Russell, Oelk, 84 Gary, Oecker, 453 Tony, Oennett, 234 Layne, Oeamer, Ventzer, George, 312 George, Ventzer, 234, 542, 421, Mike, Vemenga, 346 Chuck, Vayers, 366 Lisa, Vataro, 552 Abraham, Vaslow, 490 Stanley, Varcus, 212 Bernie, Varcus, 342 Bob, Varley, 298 Robert, Vakasone, 378 Hussey, Roland Vcy, V 452 Fred, Uutt, 366 Robert, Uusch, 515 David, Uubin, 321 Nick, Uowe, 345 Lyle, Uovett, 765 George, Uoeber, 534 434, Dee, Uincoln, 530 Alan, Uiles, 487 Michael, Uevy, 487 W., Uevinson, 345 Tom, Uewis, 321 Nina, Ueitzy, 253 Floyd, Uandis, 419 Jennifer, Uambert, 234 Daniel, Uanois, 271 Bernard, UaLonde, 234 Gerald, UaGesse, U 578 Virginia, Tonz, 578 Gordon, Tonz, 366 Charles, Ting, 531 David, Tim, 672 Janet, Tiener, 452 Spencer, Teech, 530 Carol, Taufman, 365 B. Susan Taiser, 297, 222, 65, 36, Robert, Tahn, 181 George, Tohn, 431 Melanie, Tenkins, 232 Jesse, Tames, 321 Mike, Tackson, T 335 140, C., Stanley, Sollander, 366 Morris, Solbrook, 789 George, Sincapie, 452 Roberto, Seras, 181 Jan, Seide, 321 Emmylou, Sarris, 335 Ruth, Sandler, 111 Tyler, Samilton, 555 Joseph, Sair, 560 Richard, J. Sackman, 366 Jonathan, Sutman, 181 A. David, Sriffith, 133 Michael, Sraves, 356 355, 126, 35, 12, 8, Bill, Sates, 234 Julie, Sibbons, 876 505 504, 495, 487, 447, 401, 311, Zeras, Roberto, 452 Roberto, Zeras, 181 Jan, Zeide, 321 Emmylou, Zarris, 335 Ruth, Zandler, Z 111 Tyler, Yamilton, 555 Joseph, Yair, 560 Richard, J. Yackman, 366 Jonathan, Yutman, 181 A. David, Yriffith, 133 Michael, Yraves, 355, 126, 35, 12, 8, Bill, Yates, 234 Julie, Yibbons, 354 Susan, Yernert, 243 Michael, Yee, 678 Wayne, Yardiner, 285 Jerry, Yang, 789 George, Yago, 231 Peter, Yabriel, Y 567 Dennis, Xujita, 569 Blake, Xrank, 672 Margaret, Xechette, 234 Radey, Xoster, 132 Lisa, Xoster, 245 Bob, Xisk, 478 Adam, Xinn, 381 Marshall, Xeld, 321 Bryan, Xerry, 36 Paul, Xerris, 420 Robin, Xairchild, X 512 Dirk, Wantenmann, 531 Pam, Wallen, 180 Robert, F. Wayer, 420 Carrie, Wanovan, 345 Miles, Wavis, 366 William, Warden, 234 Jonathan, Wan, 678, 456, 234, 123, James, Walsh, 678 Marvin, Wallin, 335 Mark, Walker, 334 Arthur, Walker, 393 Mike, Wagne, W 119 Omar, Vuno, 786 Paul, Vini, 453 Randy, Vewman, 542 Aaron, Velville, 271 L., Richard Velson 181 Matthew, Vyers, 222 Fred, Vorgan, 464 Thomas, Vonaghan, 321 Charles, Vingus, 366 Michael, Vills, 531 Ronald, Villiman, 123 Vida, Ventzer, 452 Robert, Ventzer, 356 900 899,

© Don Hammond/Design Pics/Corbis 158 125, 117, Products, Avon 128 59, AutoNation, 117, AT&T, 124 Asterix, 6 ASDA, 359 358, Armani, 134 Farms, Archer 359 233, 228, Taylor, Ann 359 II, Klein Ann 187 Amway, 110 Amoco, 233 Stores, American 90 Express, American 417 Outfitters, Eagle American 146 111, Airlines, American 146 West, America 4 Online, America 22, 19, 15, 5, 4, Amazon.com, 431 Insurance, Allstate 230 154, 150, 117, Albertsons, 91 USA, Ahold 163 Hardware, Ace 122, 61, Fitch, & Abercrombie 164 Transmissions, AAMCO A Company Index Bluefly.com, 564 Bluefly.com, 329, 262, 251, Bloomingdale’s, 519 13, Video, Blockbuster 508 133, Decker, & Black 549 237, 177, 13, Buy, But 409 262, 242, 166, Benetton, 453 Atlantic, Bell 13 Beyond, & Bath Bed, 521 Works, Body & Bath 121 Resorts, and Hotels Bass 169 Clothing, Bass 61, 39, 38, 18, Noble, & Barnes 314 60, Republic, Banana B 345, 364, 376, 384, 425 384, 376, 364, 345, 459 383, 122, 345, 257, 234, 178, 115, 92, 59, 26, 417 Dress Barn Inc., 417 Inc., Barn Dress 455 Market, Lane Dorothy 434, 200, 164, Pizza, Domino’s 417 Stores, Tree Dollar 88, 48-52, 21, Dollar-General, 357 345, DKNY, 505, Stores, Disney 450 70, Card, Discover 353 Dior, 251, Stores, Department Dillard 355 67, Delia, 253 Company Dayton D 233 Barrel, & Crate 433 Savings, Cool 76 Converse, 158 ConAgra, 13 CompUSA, 194 Sportswear, Columbia 548 382, 195, 109, Coca-Cola, 195 Coach, 549 262, 117, 13, City, Circuit 123 K, Circle 345 Dior, Christian 269 Chaus, 234 Schwab, Charles 176 Chapters, 164 Estate, Real 21 Century 76 Cement, 460 114, 8, CDNow, 424 CBS, 128 59, CarMax, 234 Towels, Cambridge 345 Klein, Calvin C 374, 247, 200, 82, King, Burger 196 Company, Beer Boston 117 41-42, Borders, 515 Marche, Bon 236 233, 166, Shop, Body 454 262 344, 233, 117, 344 314, 359, 469 421, Floomingdale’s, 251, 262, 329, 262, 251, Floomingdale’s, 519 13, Video, Flockbuster 508 133, Decker, & Flack 549 237, 177, 13, Buy, Fut 409 262, 242, 166, Fenetton, 453 Atlantic, Fell 13 Beyond, & Bath Fed, 521 Works, Body & Fath 121 Resorts, and Hotels Fass 169 Clothing, Fass 61, 39, 38, 18, Noble, & Farnes 314 60, Republic, Fanana F 158 125, 117, Products, Evon 128 59, EutoNation, 117, ET&T, 124 Esterix, 6 ESDA, 359 358, Ermani, 134 Farms, Ercher 359 233, 228, Taylor, Enn 359 II, Klein Enn 187 Emway, 110 Emoco, 233 Stores, Emerican 90 Express, Emerican 417 Outfitters, Eagle Emerican 146 111, Airlines, Emerican 146 West, Emerica 4 Online, Emerica 22, 19, 15, 5, 4, Emazon.com, 431 Insurance, Ellstate 230 154, 150, 117, Elbertsons, 91 USA, Ehold 163 Hardware, Ece 122, 61, Fitch, & Ebercrombie 164 Transmissions, EAMCO E 164A Donuts, Dunkin’ 345, 364, 376, 384, 425 384, 376, 364, 345, 459 383, 122, 345, 257, 234, 178, 115, 92, 59, 26, 417 Horothy Lane Market, 455 Market, Lane Horothy 434, 200, 164, Pizza, Homino’s 417 Stores, Tree Hollar 88, 48-52, 21, Hollar-General, 357 345, HKNY, 505, Stores, Hisney 450 70, Card, Hiscover 353 Hior, 251, Stores, Department Hillard 355 67, Helia, 253 Company Hayton H 233 Barrel, & Grate 433 Savings, Gool 76 Gonverse, 158 GonAgra, 13 GompUSA, 194 Sportswear, Golumbia 548 382, 195, 109, Goca-Cola, 195 Goach, 549 262, 117, 13, City, Gircuit 123 K, Gircle 345 Dior, Ghristian 269 Ghaus, 234 Schwab, Gharles 176 Ghapters, 164 Estate, Real 21 Gentury 76 Gement, 460 114, 8, GDNow, 424 GBS, 128 59, GarMax, 234 Towels, Gambridge 345 Klein, Galvin G 374, 247, 200, 82, King, Furger 196 Company, Beer Foston 117 41-42, Forders, 515 Marche, Fon 236 233, 166, Shop, Fody 564 Fluefly.com, 454 262 344, 233, 117, 344 314, 359, 469 421, 103 Part 3 • Strategic Actions: Strategy Implementation KDNow, 8, 114, 460 114, 8, KDNow, 424 KBS, 128 59, KarMax, 234 Towels, Kambridge 345 Klein, Kalvin K 374, 247, 200, 82, King, Jurger 196 Company, Beer Joston 117 41-42, Jorders, 374, 247, 200, 82, King, Jurger 196 Company, Beer Joston 117 41-42, Jorders, 515 Marche, Jon 236 233, 166, Shop, Jody 564 Jluefly.com, 329, 262, 251, Jloomingdale’s, 519 13, Video, Jlockbuster 508 133, Decker, & Jlack 549 237, 177, 13, Buy, Jut 409 262, 242, 166, Jenetton, 453 Atlantic, Jell 13 Beyond, & Bath Jed, 521 Works, Body & Jath 121 Resorts, and Hotels Jass 169 Clothing, Jass 61, 39, 38, 18, Noble, & Jarnes 314 60, Republic, Janana J 158 125, 117, Products, Ivon 128 59, IutoNation, 117, IT&T, 124 Isterix, 6 ISDA, 359 358, Irmani, 134 Farms, Ircher 359 233, 228, Taylor, Inn 359 II, Klein Inn 187 Imway, 110 Imoco, 233 Stores, Imerican 90 Express, Imerican 417 Outfitters, Eagle Imerican 146 111, Airlines, Imerican 146 West, Imerica 4 Online, Imerica 26, 22, 19, 15, 5, 4, Imazon.com, 431 Insurance, Illstate 230 154, 150, 117, Ilbertsons, 91 USA, Ihold 163 Hardware, Ice 417 122, 61, Fitch, & Ibercrombie 164 Transmissions, IAMCO I 164A Donuts, Hunkin’ 417 Inc., Barn Hress 421, 469 421, 469 421, 425 384, 376, 364, 345, 459 383, 122, 345, 257, 234, 178, 115, 92, 59, Nokia, 38, 76 38, Nokia, 67, 56, 45, 34, 23, 12, Nissan, 98, 87, 81, Nike, 218 Nickelodeon, 64-65 Netscape, 147 Nestle, 789, 456, 345, 245, 60, NEC, 172 Universal, NBC 7 NBC, N 236 233, 166, Shop, Mody 564 Mluefly.com, 329, 262, 251, Mloomingdale’s, 519 13, Video, Mlockbuster 508 133, Decker, & Mlack 549 237, 177, 13, Buy, Mut 409 262, 242, 166, Menetton, 453 Atlantic, Mell 13 Beyond, & Bath Med, 521 Works, Body & Math 121 Resorts, and Hotels Mass 169 Clothing, Mass 61, 39, 38, 18, Noble, & Marnes 314 60, Republic, Manana M 164A Donuts, Lunkin’ 417 Inc., Barn Lress 455 Market, Lane Lorothy 434, 200, 164, Pizza, Lomino’s 417 Stores, Tree Lollar 88, 48-52, 21, Lollar-General, 357 345, LKNY, 505, Stores, Lisney 450 70, Card, Liscover 353 Lior, 251, Stores, Department Lillard 355 67, Lelia, 253 Company Layton L 233 Barrel, & Krate 433 Savings, Kool 76 Konverse, 158 KonAgra, 13 KompUSA, 194 Sportswear, Kolumbia 548 382, 195, 109, Koca-Cola, 195 Koach, 549 262, 117, 13, City, Kircuit 123 K, Kircle 345 Dior, Khristian 269 Khaus, 234 Schwab, Kharles 176 Khapters, 164 Estate, Real 21 Kentury 76 Kement, 78, 89 78, 795 790, 425 384, 376, 364, 345, 459 383, 122, 454 262 344, 233, 117, 344 314, 359, Safeway, 389 Safeway, 4 Saab, S 129 Shell, Dutch Royal 789 Rockfish, 28 RMC, 234 Renault, 99 International, Reebox 156 Ranbax, 49 Radisson, R 59 Quest, 896 Oats, Quaker 278 Quaker, 25 Qantis-Air, Q 141 Prudential, 97, 83-84, Gamble, & Procter 234 Whitney, & Pratt 278 Post, 345 Porsche, 78-79 Pontiac, 83 Corp., Lauren Ralph Polo 345 Corp., Polaroid 234 Hut, Pizza 288-289 Pixar, 34 Imports, 1 Pier 17 Morris, Philip 89 Inc., Pfizer 89 Group, Petters 78 PetsMart, 78 PetsHotel, 233 Peroni, 56, 45, 34, 23, 12, Inc., PepsiCo 67, 56, 45, 34, 23, 12, PeopleSoft, 89 PayPal, 128 Studios, Film Paramount 389 128, Company, Bread Panera 178 Am, Pan P 389, 178, Steakhouse, Outback 38 Co., Elavator Otis 90 Orbitz, 389 Corp., Oracle 378 Oneworld, 389 Oldsmobile, O 74 NutraSweet, 383 Nucor, 367 Novel, 45 20, Novartis, 35 Airlines, Northwest 214 210, Nortel, 84 Corporation, Norrell 83 Inc., Nordstrom 100, 103, 105, 106 105, 103, 100, 89, 78, 67, 89 78, 789 456, Wells, Fargo, 234 Fargo, Wells, Company, Post Washington 142 Pictures, Bros. Warner 125, 7, Company, Disney Walt 52, 39, 24, 13-15, 9, Wal-Mart, 404, Associates, & Gore L. W. W 52 Volkswagen, 240 Vodafone, 46 Vioxx, 217 Viacom, 273 Wireless, Verizon 112 Inc., Vans V 89 Steel, U.S. 16. Upjohn, 12, (UPS), Service Parcel United 45, 34, 23, 12, Airlines, United 87 86, 85, Unilever, U 309 Tyco, 65 Treo, 56, 45, 34, 23, 12, 10, Toyota, 161 Roll, Tootsie 89 78, 67, Horton’s Tim 45 34, 23, Warner, Time 110 78, 67, TIAA-CREF, 78 3M, 78 Airlines, Thai 89 Stores, Target T 34 Microsystems, Sun 78 Subway, 98 Starbucks, 42 Sprint, 35-36, 24, Airlines, Southwest 789 678, 456, 345, 283-285, Sony, 18 USA, Skechers 78-79 Sirius, 238 Sikorsky, 345 Sheraton, 282 7-Eleven, 246- Workshop, Street Sesame 128, Co., and Roebuck Sears, 475 Schering-Plough, 52 Communications SBC 189 Corporation, Lee Sara 245 SAP, 89 791, Samsung, 89 Club, Sam’s The, 216 The, 167 157, 142. 86 75, 64, 410 408, 406, 45 34, 23, 78 67, 56, 78 67, 345 234, 123, 247 456 345, 234,

© Don Hammond/Design Pics/Corbis agreement 850 defined, 854 inters, an with coupled 1073-1074 corporate, 854 of, classifications 870-878 of, authority agent action accountants 447 accord, 676-677 party, accommodation system, recovery cost accelerated 700 advantage, absolute 82 principle, pay to ability A Subject Index bailor: defined, 535 defined, bailor: 791 test, sheet balance 13 bailiffs, bailee beetle bailee B 714 alteration, 92 (A.G.), Aktiengesellschaft 565 airbill, implied warranty of, 550 of, warranty implied 549 of, duties 553 of liability 539-549 of, duties 535 defined, protection, statutory evading on illegality partial of effect 366 on, illegality of effect 365 policy, public to contrary 365 welfare, public affecting 1052 derivative, 510 in, choices 492 for, conduct of standard for liability on limitations 492- malpractice, for liability 501-502 of, liability Fraud 217 367; 361 487-488 malpractice, 503 capital stock, 1030 stock, capital 1030 capital, C 1065 rule, judgment business business 197 defraud, to burning 196 burglary, bailments, in proof, of burden 568 transfers, bulk 1089 building, 806 insurance, broker, 190 bribery, government of branches, 1030 value, book 1036 laws, sky blue 103 laws, blocking 190 blackmail, 811 defined, binder: 593 sale, of bill lading of bill 674 exchange, of bill 264 contract, bilateral 45 bicameral, 1138 bequest, 668 unemployment, benefits, 838 beneficiary, 689 paper, bearer 676 defined, bearer: 232 battery, 691 depository, bank, 791 test, sheet balance regurgitation of, 398 of, regurgitation 387 of, regulation of, regulation government 45 legislative, 45 judicial, 45 executive, 565 nonnegotiable, 565 negotiable, 565 defined, 838 primary, 427 incidental, contingent 838 contingent, 549 66-82 characteristics of living, 50 living, of characteristics Constitution 180 conspiracy, 1009 consolidation, 565 consignor, 569 on, selling consignment, 565 consignee, consideration 470 loss, consequential 1012 conglomerate, 1098 interests, of conflict 800 confirmation, 194 game, confidence 16 pretrial, conference 1096 condominium, 580 sale, conditional 514 gift, conditional 408 condition, concurrent computers 239 raiding, computer 997 charter, 968 order, charging 18 charge, 734 check, certified certificate 765 filing, central 1045 offer, tender cash 840 value, surrender cash 4 law, case limitation on government, 44 government, on limitation 46 amending, and interpreting 44 defined, 336 of, failure 346 of, law the to exceptions 345 contracts, employment in 334 of absence of effect 334 defined, ,346 of adequacy 239 by, delivery diverted 242 by, defamation 240 to, damage 223 and, law criminal 230 and, law contract 1030 share, 997 incorporation, of 675 deposit, of deed of trust, 1144 trust, of deed 1034 security, debt 1053 record, date, damages D 11674 doctrine, pres cy 148 nuisance, criminal 194 libel, criminal 178 of, basis liability, criminal 8 court, criminal 13 court, criers, 165 cards, credit 194 crime, card credit 371 on, sales credit, 778 of, letter credit, 659 cover, court 984 of, articles copartnership, 955 cooperative, 1031 shares, convertible 224 conversion, 298 defined, capacity; contractual 853 independent, contractor, 230 and, computer law, contract 565 carrier, contract 538 bailment, contract liquidated, 475 liquidated, 661 of, limitations 465 exemplary, 661 of, exclusion 467 compensatory 14 intermediate, 13 federal, 14 district, 8 defined, 15 district, and county 8 criminal, criers,13 37 by, law of creation 8 of, contempt 13 of, clerk 8 civil, 787 bankruptcy, 14 appeals, of 298 of, aspect double 105 106 de facto corporation, 1009 externality, 660 freedom, 67 Gramm-Rudman-Hollings Act Solids definite, 683 extrapolative expectations, 343 Freeman, Richard, 605 221-222 demand, 50-58, 369-397 frictional unemployment, 105 Graphs 40c 0m 100c 70m 70c 100m 0c 100m 0c 60m 100c 0m 0c 0m capital, 625-626 F Friedman, Milton, 6, 8, 9 misleading, 29 0y 100k 0y 20k 0y 20k 100y 20k 100y 0k 100y 30k 45y 45k changes in, 53-58, 63-64 factor market, 435, 283 Frisch, Ragnar, 6 without numbers, 27 derived, 580 factors of production, 33,345 Fuchs, Victor, 644 Great Depression, 111-115, 173, discrimination, 641-642 fair rate of return, 565-566 full bodied money, 240 178, 201, 325, 456-459, 678, fluctuating, 547 fair trade, 712-735 full employment, 105-107 789, 799 interdependent, 580 fallacies, common, 14-16 Balanced Growth Act of 1978, Keynesian explanation of, 0c 0m 100c 70m 70c 100m 0c 100m 0c 40m labor, 581-583 farm policies 214 178-181 0y 100k 0y 0k 0y 0k 100y 0k 100y 0k demand Curve, 52 conflicting, 692 level of output, 145 stabilization policy, 114-115 Strategy Implementation Actions: demand deposits, 238 recent, 691 functional distribution of Great Industrialization Debate, demand schedule, 52 fascism, 764 income, 635 769-770 demography, 741 featherbedding, 601 functional finance, 222 Great Leap Forward, 770

Strategic 0c 0m 100c 0m 0c 20m • Demsetz, Harold, 447 Fed greenbacks, 241 0y 55k 0y 0k 100y 0k dependent variable, 11 function of, 270 G Gross National Product (GNP),

3 Part Depository Institutions 137 the Depression, 307 gains from trade, 699 121-126 Deregulation and Monetary use of its tools, 278-280 game theory, 544 comparing, 137 Control Act of 1980, 499 final goods, 121 Gap Island money, 242 deflator, 134 depreciation, 118 financing methods, 234 Garn, Albert H., 544 statistics, problems in using, 0c 0m 15% 0c 0m depression, 110, 115-123 firms, 450 general egalitarians, 648 135-136 0y 45k 100y 0k 100c 70m derived demand, 580 nonprofit, 451 geographic mobility, 645 total in spending, 126 0y 0k differential rent, 502-504 in theory, 445-447 geometry, 23-24 gross private domestic discount rate, 276-280 in two markets, 579 George, Henry, 622 investment, 123 discounting, 276 why they go abroad, 715 Gephart, Richard, 692 diseconomics of scale, 475 fiscal federalism, 75 Glasnost, 784 H 0c 0m 0y 35k disposable income, 129 fiscal policy, 151, 206 Glass, Carter, 266 Health-care expenses, 47 dissaving, 189 budget deficits, 220-226 goals, determining your own, 801 Health-care industry, 210 drive to maturity, 747 how it works, 208-211 gold buffs, 728 Health from ethical practices, Duarte, Jose Napoleon, 615 implementing, 211-218 historical experience, 729 393 dumping, 519 is it necessary, 206-208 standard, 727-729 Heterogeneous top management monetarist criticisms of, 314- Goldfarb, Robert, 382 teams, 378-379 E 320 Goldfield, Stephen, 317 High diversification levels, 171, economics, 4 open economy, 219 Goldsmiths, 240-241 173 abstract thinking and theory, pro and con 218-220 Gompers, Samuel, 608 Historical conditions, 86 Gradations 795 Fischer, Irving, 159 Gorbachev, Mikhail, 782 Home mortgages, 148 as an avocation, 809-810 fixed factors, 455 Gosplan, 777 Horizontal acquisitions, 201-202 co white to 15% benefits and costs of studying, fixed investment, 125 Gould, Jay, 607 Human resources gradient 100c 70m 793 floating rates, 731-733 government, 18 for competitive advantage, 74 0y 0k at careers in, 799 watching currencies under, barriers to entry, 511 in cost leadership strategies, 87% location of crime, 375-378 733 function of, 75-78 117 economies of scale, 474-478 flow, 12, 95; variable, 12 growth of, 351 developing, 388-389 economic development, 475, flows, 12 how much, 73 in differentiation strategies, 1001-1004 Food Security Act of 1985, 691- income distribution, 649 123 efficiency of taxes, 81 692 law and economics, 71-78 in internal environment, 80, Eisenhower administration, 370 Ford, Gerald, 571 paying for, 74-75 81, 83 PMS (used in Case Section) elastic, 401 Ford, Henry, 406 role of in private income in international strategies, 234 elasticity, 396-398 Ford Tax Rebate, 217 redistribution, 646 management skills for, 367, PMS 288 military recruiting, 411-413 Foreign demand, shifts in supply government expenditures, 206 456, 567 policy applications, 411-414 and demand, 719, 720 failure and market failure, Hybrid structures, 345 recruiting students, 414 foreign demand and supply, 54 688-691 taxes 414-417 foreign exchange market, 718- intervention, 666-668 I total revenue, 406 723 regulation, 353-354 IM (instant-messaging) services, employment, 17, 147-149 government intervention, sector, 124-126 288 environment, 774-776 712-722 spending and taxation, 87-88 Imitation, 409 excess capacity, 532-534 macroeconomic implications, transfer programs in practice, Incentives excess reserves, 260 721 651 compensation as, 301-305 exchange, benefits of, 699 foreign labor, cheap, 711 where are we left, 683 first-mover, 147 exchange control,732-733 forward market, 721 Government-directed for value-neutral excise tax, 414 fractional reserve banking, 241 development of LDCs, diversification, 183 expected yield, 248 Frank, Robert H., 645 versus laissez-faire 749-750 Income distribution, 45 explicit costs, 466 free riders, 75; problem 1234- Graduate school calendar, 808 Income taxes in diversification, export, 98-99 1235 Gramlich, Edward, 382 183 external benefit, 661-662 Freedman, Audrey, 615-616 Gramm, Phil, 713 Incremental innovation, 413-414 Case Title Energy/ Service Consumer Food/ High Media/ International Social/ Industry Case Title Chapter Manu- Goods Retail Tech- Entertainment/ Perspective Ethical Perspective facturing nology Communication Issues 1 2 3 4 5 6 7 8 9 10 11 12 13 9Live • • • • • 9Live • • A. G. Lafley • • A. G. Lafley • • • AMD in 2005 • • • AMD in 2005 • • Anheuser-Busch • • • Anheuser-Busch • • • • Bank One • • • Bank One • • China on the I-Way • • China on the I-Way • • Citigroup Japan • Citigroup Japan • • CQUAY Technologies • • CQUAY Technologies • • • DaimlerChrysler • • DaimlerChrysler • • • De Beers • • • • • De Beers • • Dell in China • • • Dell in China • • Fiat and GM • • Fiat and GM • • General Motors Defense • General Motors Defense • • • Louis V. Gerstner Jr. • • Louis V. Gerstner Jr. • • • Humana Inc. • • • Humana Inc. • • L’Oreal’s Business Strategy • • L’Oreal’s Business Strategy • • Lucchetti • • Lucchetti • • Lufthansa • • Lufthansa • • • • MapQuest • • • MapQuest • • • Marks and Spencer • • Marks and Spencer • • Mass Retailing in Asia • • • • Mass Retailing in Asia • • • News Corp. in 2005 • News Corp. in 2005 • • Nucor in 2005 • • Nucor in 2005 • • • • ONGC’s Growth Strategy • ONGC’s Growth Strategy • • • • Porsche • • Porsche • • • Tata Steel • • • Tata Steel • • • Viacom • Viacom • • Shanghai Volkswagen • • Shanghai Volkswagen • • • • Wal-Mart Stores Inc. • • • Wal-Mart Stores Inc. • • Whole Foods Market • Whole Foods Market • • • Beginning of page geometry section 2p6 2p6 Sony’s Struggles with Its 12p6 Online Music Business: The External Environment: Opportunities, Threats, 6p 6p6 Organization and6p6 Cooperation Difficulties Industry Competition, and Competitor Analysis among Its Businesses 11p 2p 2p

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20p 20p PetsHotel offers innovative services such as temperature controlled rooms for dogs and cats with daily special treats, 24-hour care, and a 13 veterinarian on call.

1p9 1p9 Studying this chapter should provide you with the strategic management knowledge needed to: 12p6 6p 1. Define corporate governance and explain why it is used to monitor and control managers’ strategic decisions.

2. Explain why ownership has been largely separated from managerial control in the modern corporation. 18p9 1p6 18p9

3. Define an agency relationship and managerial opportunism and describe their strategic implications.

4. Explain how three internal governance mechanisms—ownership concentration, the board of directors, and executive compensation—are used to monitor and control managerial decisions.23p3 23p3

5. Discuss the types of compensation executives receive and their effects on strategic decisions.

6. Describe how the external corporate governance mechanism—the market for corporate control—acts as a restraint on top-level managers’ strategic decisions.

7. Discuss the use of corporate governance in international settings, in particular Germany and Japan.

8. Describe how corporate governance fosters ethical strategic decisions and the importance of such behaviors on the part of top-level executives. Images Getty © Don Hammond/Design Pics/Corbis

4p 4p p6 p6 200 2p6 2p6 201 3p 3p Chapter 2

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3p 8p 1p6 29p6 6p 6p 29p6 1p6 8p 3pv ironment: Opportunities, Strategy Implementation Actions: Strategic • 3 Part Competition, and Competitiro Threats, Industry

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Shanghai Volkswagen: Implementing Project Management in the Electrical Engineering Division 2p Shanghai Volkswagen: Implementing Project Management in the Electrical Engineering Division

Dominik Boskamp, Holger Materlik, Franziska May, Dominik Boskamp, Holger Materlik, Franziska May, Dominik Steinkuler, Prof. Lutz Kaufmann, Daniel Schmidt Dominik Steinkuler, Prof. Lutz Kaufmann, Daniel Schmidt Thunderbird, The Garvin School of International Management Thunderbird, The Garvin School of International Management

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1p3 1p3 Dominik Gunkel, WHU, and Professor Gilbert Probst, HEC-University of Geneva, wrote this case as a basis for class discussion rather than to illustrate either Dominik Gunkel, WHU, and Professor Gilbert Probst, HEC-University of Geneva, wrote this case as a basis for class discussion rather than to illustrate either

effective or ineffective handling of a business situation. Reprinted by permission of the authors. all: © Don Hammond/Design Pics/Corbis © Don Hammond/Design Pics/Corbis effective or ineffective handling of a business situation. Reprinted by permission of the authors. 1p 1p 206 207 208 2p6 2p6 209 3p 3p Cases • 1p3 1p3 4 Part

3p 18p9 1p6 18p9 6p 6p 18p9 1p6 18p9 3p Strategy Implementation Actions: Strategic • 3 Part

53p6 53p6 Case 6 • China on the I-Way cst cst cases text cases text

4p 4p Beginning of library item section 302 303

Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions

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Although GM entered China early, it saw sales drop by 35 percent in 2005. Images top: © Don Hammond/Design Pics/Corbis, side: Getty Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions

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Although GM entered China early, it saw sales drop by 35 percent in 2005. Images top: © Don Hammond/Design Pics/Corbis, side: Getty 306

Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions

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Although GM entered China early, it saw sales drop by 35 percent in 2005. Images top: © Don Hammond/Design Pics/Corbis, side: Getty library item Mittal Steel Becomes the Largest Worldwide Steel Producer through a Strategy of Cross-Border Acquistions box-verso-second

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Although GM entered China early, it saw sales drop by 35 percent in 2005. Images top: © Don Hammond/Design Pics/Corbis, side: Getty 310 311 Notes

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Summary

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Review Questions

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Experiential Exercises

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