net Full-Circle Learning MyLab™: Learning Full Circle for Marketing, Management, Business Communication, and Intro to Business BEFORE CLASS DSMs, pre-lecture homework, eText Writing MyLab AFTER Space,Video Decision CLASS Cases, Quizzes/ Sims,Videos, DURING Tests and Learning CLASS Catalytics www.net MyManagementLab : Improves Student ® Engagement Before, During, and After Class BREAKTHROUGH To better results Prep and Engagement • NEW! VIDEO LIBRARY – Robust video library with over 100 new book-specific videos that include easy-to-assign assessments, the ability for instructors to add YouTube or other sources, the ability for students to upload video submissions, and the ability for polling and teamwork. • Decision-making simulations – NEW and improved feedback for students. Place your students in the role of a key decision-maker! Simulations branch based on the decisions students make, providing a variation of scenario paths. Upon completion students receive a grade, as well as a detailed report of the choices and the associated consequences of those decisions.
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A single location to develop and assess concept mastery and critical thinking, the Writing Space offers automatic graded, assisted graded, and create your own writing assignments, allowing you to exchange personalized feedback with students quickly and easily. Writing Space can also check students’ work for improper citation or plagiarism by comparing it against the world’s most accurate text comparison database available from Turnitin. • Additional Features – Included with the MyLab are a powerful homework and test manager, robust gradebook tracking, Reporting Dashboard, comprehensive online course content, and easily scalable and shareable content.net Strategic ManageMent concepts and cases A Competitive AdvAntAge ApproACh www.net This page intentionally left blank www.net Strategic ManageMent Sixteenth edition concepts and cases A Competitive AdvAntAge ApproACh Fred r. David Francis Marion University Florence, South Carolina Forest r.
David Strategic Planning Consultant Boston Columbus Indianapolis New York San Francisco Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo www.net Vice President, Business Publishing: Donna Battista Editor-in-Chief: Stephanie Wall Acquisitions Editor: Daniel tylman Editorial Assistant: Linda albelli Vice President, Product Marketing: Maggie Moylan Director of Marketing, Digital Services and Products: Jeanette Koskinas Field Marketing Manager: Lenny ann raper Product Marketing Assistant: Jessica Quazza Team Lead, Program Management: ashley Santora Program Manager: claudia Fernandes Team Lead, Project Management: Jeff Holcomb Project Manager: ann Pulido Operations Specialist: carol Melville Creative Director: Blair Brown Art Director: Janet Slowik Vice President, Director of Digital Strategy & Assessment: Paul gentile Manager of Learning Applications: Paul Deluca Digital Editor: Brian Surette Director, Digital Studio: Sacha Laustsen Digital Studio Manager: Diane Lombardo Digital Studio Project Manager: robin Lazrus Digital Studio Project Manager: alana coles Digital Studio Project Manager: Monique Lawrence Full-Service Project Management and Composition: integra Interior Designer: integra Cover Designer: integra Cover Image: Francesco Pezzotta Printer/Binder: rr Donnelley/Kendallville Cover Printer: Phoenix color/Hagerstown copyright © 2017, 2015, 2013 by Pearson education, inc. or its affiliates. all rights reserved. Manufactured in the United States of america.
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or its affiliates, authors, licensees or distributors. Library of Congress Cataloging-in-Publication Data David, Fred r. Strategic management: concepts and cases—a competitive advantage approach / Fred r. David, Francis Marion University, Florence, South carolina, Forest r.
David, Strategic Planning consultant. pages cm iSBn 978-0-13-416784-8 (alk. paper) — iSBn 0-13-416784-8 (alk. Strategic planning—case studies.4'012—dc23 2015021210 10 9 8 7 6 5 4 3 2 1 iSBn 10: 0-13-416784-8 iSBn 13: 978-0-13-416784-8 www.net Thank you to the following companies that graciously provided the substance of the Cohesion Cases over a 30-year span of 16 editions of this book.
• 1st edition, 1987: Ponderosa • 2nd edition, 1989: Ponderosa • 3rd edition, 1991: Hershey Company • 4th edition, 1993: Hershey Company • 5th edition, 1995: Hershey Company • 6th edition, 1997: Hershey Company • 7th edition, 1999: Hershey Company • 8th edition, 2001: America Online (AOL) • 9th edition, 2003: American Airlines • 10th edition, 2005: Krispy Kreme Doughnuts, Inc. • 11th edition, 2007: Google Inc. • 12th edition, 2009: The Walt Disney Company • 13th edition, 2011: Apple, Inc. • 14th edition, 2013: McDonald’s Corporation • 15th edition, 2015: PepsiCo, Inc.
• 16th edition, 2017: Hershey Company www.net This page intentionally left blank www.net Brief Contents Preface xvii Acknowledgments xxxi About the Authors xxxiii Part 1 Overview of Strategic Management 2 Chapter 1 The Nature of Strategic Management 3 The Cohesion Case: The heRsheY CoMPanY, 2015 (hsY) 26 Part 2 Strategy Formulation 38 Chapter 2 The Business Vision and Mission 39 Chapter 3 The External Assessment 59 Chapter 4 The Internal Assessment 89 Chapter 5 Strategies in Action 129 Chapter 6 Strategy Analysis and Choice 167 Part 3 Strategy Implementation 204 Chapter 7 Implementing Strategies: Management, Operations, and Human Resource Issues 205 Chapter 8 Implementing Strategies: Marketing, Finance/Accounting, R&D, and MIS Issues 243 Part 4 Strategy Evaluation 278 Chapter 9 Strategy Review, Evaluation, and Control 279 Part 5 Key Strategic-Management topics 304 Chapter 10 Business Ethics, Social Responsibility, and Environmental Sustainability 305 Chapter 11 Global and International Issues 329 Part 6 Strategic-Management Case analysis 356 How to Prepare and Present a Case Analysis 357 Glossary 627 Name Index 637 Subject Index 643 vii www.net This page intentionally left blank www.net Contents Preface xvii Assurance of Learning Exercise 1C: Update the Hershey Cohesion Case 36 Acknowledgments xxxi Assurance of Learning Exercise 1D: Strategic Planning for Your University 36 About the Authors xxxiii Assurance of Learning Exercise 1E: Strategic Planning at a Local Company 37 Part 1 Overview of Strategic Assurance of Learning Exercise 1F: Get Familiar with the Strategy Club Website 37 Management 2 Assurance of Learning Exercise 1G: Game Plans vs. Strategic Plans: Chapter 1 the Nature of Strategic Teams vs. Companies 37 Management 3 exeMPlaRY CoMPanY showCased: aPPle, inC. 4 Part 2 Strategy Formulation 38 what is strategic Management? 4 Chapter 2 the Business Vision and Mission 39 What Is a Cohesion Case? 5 • Defining Strategic Management 5 exeMPlaRY CoMPanY showCased: h&R BloCK 40 stages of strategic Management 5 vision statements: what do we want to Become? 40 integrating intuition and analysis 6 Vision Statement Analysis 41 Adapting to Change 7 Mission statements: what is our Business? 42 Key Terms in strategic Management 8 The Process of developing vision and Mission Competitive Advantage 8 • Strategists 8 statements 43 aCadeMiC ReseaRCh CaPsule 1-1: when aRe Chief The importance (Benefits) of vision and Mission sTRaTegY offiCeRs (Csos) hiRed/aPPoinTed? 9 statements 44 Vision and Mission Statements 10 • External Opportunities aCadeMiC ReseaRCh CaPsule 2-1: The Mission sTaTeMenT/ and Threats 10 • Internal Strengths and Weaknesses 11 • Long-Term Objectives 12 • Strategies 12 • Annual fiRM PeRfoRManCe linKage 44 Objectives 12 • Policies 13 A Resolution of Divergent Views 45 The strategic-Management Model 14 Characteristics of a Mission statement 46 aCadeMiC ReseaRCh CaPsule 1-2: whaT aCTiviTY is A Customer Orientation 47 Most IMportant In the strategIc-ManageMent Components of a Mission statement 47 PRoCess? 15 evaluating and writing Mission statements 48 Benefits of engaging in strategic Management 15 Two Mission Statements Critiqued 49 • Five Mission Statements Financial Benefits 16 • Nonfinancial Benefits 17 Revised 49 • Two Mission Statements Proposed 49 why some firms do no strategic Planning 17 iMPliCaTions foR sTRaTegisTs 51 Pitfalls in strategic Planning 18 iMPliCaTions foR sTudenTs 52 Comparing Business and Military strategy 18 Chapter summary 52 iMPliCaTions foR sTRaTegisTs 20 Key Terms and Concepts 53 Issues for Review and Discussion 53 iMPliCaTions foR sTudenTs 21 assuRanCe of leaRning exeRCises 54 Chapter summary 21 Assurance of Learning Exercise 2A: Develop an Improved BB&T Mission Key Terms and Concepts 22 Statement 54 Issues for Review and Discussion 22 Assurance of Learning Exercise 2B: Evaluate Three Mission Statements 54 Mini-Case on The KRogeR CoMPanY: whaT aMeRiCan Assurance of Learning Exercise 2C: Write a Vision and Mission Statement CoMPanY does The BesT JoB of sTRaTegiC for the Hershey Company 55 Planning? 24 Assurance of Learning Exercise 2D: Compare Your College or University’s Current Readings 25 Vision and Mission Statements to That of a Leading Endnotes 25` Rival Institution 55 The Cohesion Case: The heRsheY CoMPanY, 2015 26 Assurance of Learning Exercise 2E: Conduct Mission Statement assuRanCe of leaRning exeRCises 35 Research 55 Assurance of Learning Exercise 1A: Compare Business Strategy with Mini-Case on walT disneY CoMPanY: whaT is disneY’s Military Strategy 35 vision foR The fuTuRe and Mission foR The PResenT? 56 Assurance of Learning Exercise 1B: Gather Strategy Information Current Readings 56 for the Hershey Company 35 Endnotes 57 ix www.